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FINANCIAL TIMES 


Europe’s Business Newspaper 



Decision day for 
banks 
in Telekom sale 

US and European banks will learn today which of 
them has been picked by the German go w imant 
to play the main foreign role in the DM1 5bn (S9.7bn) 
privatisation of Deutsche Telekom. Merrill Lynch of 
the US is regarded as one of the strongest candi- 
dates. with Goldman Sachs. Morgan Stanley and 
Salomon Brothers also among the 22 banks which 
made presentations in Bonn. Page 15 

Death sentence for bus bomber: An Israeli 
military court sentenced a Palestinian to death for 
plotting a suicide bus bombing that killed six peo- 
ple, i n cluding the bomber, in ApriL If upheld, the 
sentence would make Hamas member ii Badar- 
neh only the second person to be executed in Israel 
alter Nazi maste rmin d Adolf Eichmann, hanged in 
1962. Farther Gaza d«i»g< likely. Page 4 

T hrea t to US ofl supplies: The US risks a 
winter oil shortage because many tanker owners 
have not yet shown that they comply with 
tough new US rules about meeting the finanHai 
consequences of an oil spilL Page 14 

Hacker claim probod: Britain’s Data Protection 
Registrar has called feu talks with British Telecom- 
munications over a breach of security which has 
resulted in the leak of some of the most sensitive 
security telephone numbers in the OK. Page 6 

East Timor protesters hove US embassy: 

East Timorese protesters 
'flashed, victory signs as 
their bus left the US 
embassy in Jakarta, 
where they staged a 12- 
day sit-in. The 29 protest- 
ers were on their way to 

catch a flight from Indon- 
esia on the first leg of 
their journey to Portugal, 
where they have been 
granted political asylum. 
Timorese youths have 
bam in the ran g narri nf ft- pgh pm faytK Hgainyt Indo- 
nesian rule of the fonner Portuguese colony. 

Hungary accused over hotels: International 
banks accused Hungary of scuttling the sale of the 
country’s biggest hotelcbain, and cast doubt over 
Budapest’s commitment to privatisation. The row 
erupted as talks collapsed -about a tender by Ameri- 
can General Hospitality far si per cent of state- 
owned Hungarhotels. Page 15 

BASF profits ogam The German chemicals group 
forecast a 50 per cent rise m pre-tax earnings to 
DMLSbn (Jl.OThn) this year after profits more than 
trebled inthethinlquarter. page 15 

Zi^.|UM^clt^-stBolia<b Zaire’s president 
Mobutu Ses&Sqko dismissed the head of the Bank 
oT Zaire, ending a four-month battle of wiDs 
between central bank governor Ndiang Kaboul and 
Kengo Wa DondO; prime minister. Page 4 

UK business seeks renewed Iraq links: 

Some British companies are preparing to resume 
trade with Iraq when sanctions are lifted, even 
though the UK government publicly supports their 
continuation. Page 7 

Joint Irish promotion move: London and 
Dublin agreed to launch their first joint initiative to 
promote Ireland as a holiday destination. World- . 
wide inquiries about Northern Ireland tourism has 
almost doubled since the Irish Republican Army’s 
September ceasefire in its war against British rule. 

Prosecutors demand death: Turkish 

prosecutors called for eight Kurdish politicians to 
be condemned to death for treason. T he eig ht are 
accused, in what has become a controversial trial, 
of complicity with outlawed Kurdish guerrillas. 

No change In German rates: The 

Bu ndesbank 's council meeting decided to leave Ger- 
man interest rates unchanged. Currencies, Page 42 

Bulgaria shuts down M-pbnb Bulgaria 
suffered nationwide power shortages after the 
Kozloduy unclear power plant had to be shut down 
because of a switch failure. Officials said there was 
no radiation danger. 

Hijacker surrenders: A Russian former mine 
worker miner who hijacked a Russian aircraft car- 
rying 70 people surrendered in Estonia after releas- 
ing all his captives. 

Russia’s income gap widens: The average 
income of Russia's wealthiest 10 per cent was m 
times higher than that of the poorest, according to 
official figures for September and October. 

Bishops’ refresher course: The Roman 
Catholic church is organising “pastoral and theolog- 
ian refresher courses at the Vatican for bishops. 

Hamburg drugs haul: German customs officials 
S^SbSg seized 16 tonnes of marijuana worth 
about $65m on a freighter. 

Rugby refreshment Australia’s «^oug rugby 
league squad downed 16,200 cans of spedaDy 
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FRIDAY NOVEMBER 25 1994 


Disagreement means ‘stabilisation zone’ plan must be referred to UN 


Squabbling 
Nato fails 
to contain 
Serb thrust 


By Laura Sober bn Belgrade 
and Bruce Clark In London 

Government forces defending the 
town of Bfhac In northwest Bos- 
nia said they had lost strategic 
ground to the Serbs last night as 
squabbling Nato countries put 
together a plan to stop the fight- 
ing in the embattled enclave. 

After a day of unexpectedly 
tough bar gaining in Brussels, 
ambassadors from Nato’s 16 
members failed to agree on 
details of a blueprint to halt the 
Serb advance and referred it to 
the United Nations. 

Mr Robert Hunter, the US 
ambassador to Nato, «*id the 16 
allies were in broad agreement 
on a proposal to set up a “stabi- 
lisation zone” around Bihac. 

“We have asked the UN mili- 
tary authorities to tell us what 
toe UN protection force fin Bos- 
nia] might need,” be said, adding 
that it should be posable to pro- 
tect the enclave under erigtfng 
UN resolutions. 

However. Russia and China, 
both members of the UN Security 
Council, cautioned against West- 
ern military intervention in the 
conflict as Nato members .hag- 
gled over thp flgfailg- ' 


Mr Haris Silajdzlc, Bosnian 
prime minister, said the Serb 
attackers had taken the strategic 
hill of Debeljaca, which overlooks 
Bihac, in fighting which intensi- 
fied yesterday afternoon. 

They are attacking from all 


Allies fall out over protecting 
Bosnia safe areas Page 2 


sides and the houses are burn- 
ing,” said Mr Silajdzic, aiUg iTt g 
that the Sab infantrymen were 

harkpH by ti»nks and artillery 

Mr Andrei Kozyrev, the Rus- 
sian foreign minister, sharply 
criticised the Bosnian govern- 
ment 

“The Moslem side launched its 
latest offensive with the cle&r 
intention of involving Nato and 
other third forces in fighting on 
its side," he said in Moscow. 

Mr Kozyrev said there could be 
no military solution to the Bos- 
nian conflict, and outside inter, 
vention could result in a “second 
Afghanis tan or Vietnam*. 

The m inister said next week’s 
meeting of the contact group 
comprising the US, Russia, 
B ritain, France and r Germany - 



Seeking shelter: an elderly woman runs for cover from a Serb sniper yesterday in Sarajevo 


must send a “dear signal that 
the world community ... favours 
a return to political methods” In 

Rmwla. 

China, whose approval will be 
necessary for any fresh UN reso- 
lutions on Bosnia, voiced “deep 
concern” and insisted that West- 
ern air power should be used to 
defend civilians or peacekeepers, 
and not in a punitive way. 

In emergency talks in in Brus- 
sels, the US initially urged its 
allies to agree to make as wide as 
possible the zone round Bihac 
town where heavy weapons 
would be -subject to air 'Strikes. 

European members-af Nato, led 
by ITance, suggested a more 


modest plan for a four-mile 
extension of the UN’s existing 
“safe area". 

Approval of this idea was 
delayed by French insistence that 
more ground troops would be 
seeded to implement any cease- 
fire agreement 

The French stance aimed to 
drive home to the US the limits 
of a policy based purely on air 
power. The US has refused to 
deploy ground troops in Bosnia. 

The UN's current contingent in 
the Bihac enclave is largely made 
up of a force of 1,200 poorly 
armed Bangladeshis, who were 
resupplied by _a UN convoy 
yesterday under an agreement 


with the Serbs. The UN’s vulner- 
ability to any all-out confronta- 
tion with the Serbs was driven 
home yesterday when more than 
250 peacekeepers from Canada, 
France, Russia and Ukraine 
were detained in the Sarajevo 
area. 

The Bosnian Serbs on Wednes- 
day blocked the peacekeepers at 
weapons- collection sites round 
the exclusion zone ringing the 
Bosnian capital. 

While UN officials are trying to 
downplay the detention, it fol- 
lowed threats by Bosnian Serb 
leaders to wage an “aD-out war 
against the UN” in retaliation for 
ordering’ Nato air strikesT 


Berlusconi pension deal may avoid strike 


By Robert Graham in Rome 

Italy’s embattled government 
was last night hammering out a 
compromise formula on pension 
reform with trade union leaders 
in a bid to head off a damaging 
eight-hour general strike on 
December 2. 

Both sides appeared anxious to 
resolve the confrontation, over 
proposed cuts in Italy’s generous 
state pensions system, as the 
country’s rightwing coalition bat- 
tled for political survival. 

in the run-up to last night’s 
meeting, Mr Silvio Berlusconi, 
the prime minister, jprfiea tpri his 
willingness to make fresh conces- 
sions to the unions to avoid the 
strike. 

This was in sharp contrast to 
his tough stand before and after 
the huge union-organised protest 


that brought almost i,sm demon- 
strators on to the streets of Rome 
on November 12. 

The government’s attempt to 
find a compromise appeared 
directly linked to Mr Berlusconi’s 
weakened political position in the 
wake of Milan magistrates warn- 
ing him this week be was under 
investigation for alleged corrup- 
tion. 

As more details of the investi- 
gation leaked out, Milan 
magistrates were reported to 
have discovered a bank account 
allegedly used for making 
unregistered payments in Mr 
Berlusconi’s Fininvest business 
group. 

Mr Berlusconi has said he will 
not resign as a result of the 
investigation. However, if the 
general strike went ahead, it 
would add an additional e l emen t 


of political instability. The popu- 
list Northern League of Mr 
Umberto Bossi is in open dis- 
agreement with its coalition part- 
ners, particularly on the pensions 
issue, where it is ready to side 
with the unions. 

Mr Berlusconi is fighting a des- 
perate battle to survive and 
needs to get the 1995 budget 
through parliament 

Apart from being ready to give 
ground on pensions, he signalled 
on Wednesday a renewed readi- 
ness to sell off the bulk of his 
stake in Fininvest - although the 
opposition consider such a move 
unlikely. 

Union leaders called the gen- 
eral strike to increase pressure 
on the government to remove the 
sensitive and complex issue of 
pension reform from the budget 
However, they are concerned 


they might lose control of grass 
roots protest and have no wish to 
be seen as the cause of social 
instability. 

The government was last night 
seeking a formula that would not 
alter the budget's overall aim of 
funding up to L5O,OO0bu ($3lbn) in 
new taxes and spending cuts to 
hold the public sector deficit 
down to 8 per emit of GDP. 

The treasury has warned that 
the financial markets would react 
negatively to any weakening of 


the budget's objectives. 
Removing pension cuts from the 
budget would mean the govern- 
ment finding L5,000bn from else- 
where. 

Any agreement on pensions 
between the government and the 
unions will have to be committed 
for consultation to ConfSndustria, 
the industrialists confederation; 
and all sides may wish to reflect 
before a final decision. 

Investigation leak, Page 2 


DS523A 


EU rebels 
threaten 
challenge 
to Major’s 
leadership 

By Philip Stephens in London 

The bitter confrontation between 
Mr John Major and Eurosceptics 
within his ruling Conservative 
party escalated yesterday as lead- 
ers or the anti-Brussels rebellion 
threatened to turn it into a direct 
challenge to the prime minister’s 
leadership. 

The latest bout in the struggle 
over increased British contribu- 
tions to the European Union fol- 
lowed formal cabinet endorse- 
ment of Mr Major’s threat to seek 
a general election if he is 
defeated in a parliamentary vote 
on Monday. 

In spite of the continuing defi- 
ance of a hard core of ConWva- 
tive sceptics and an attempt by 
the opposition Labour party and 
the Liberal Democrats to defeat 
the government, senior ministers 
insisted last night they were 
assured of a comfortable victory. 

On paper, the government’s 
majority is only 14. but Mr Major 
also expects the backing of nine 
Unionist MPs from Northern 
Ireland. Mr Tony Blair, the 
Labour leader, acknowledged 
publicly that a general election 
was unlikel y 

Amid signs of irritation among 
rightwing members of the cabi- 
net at the prime minister’s han- 
dling of the issue, there was less 
confidence that the row had not 
further damaged the Mr Major’s 
already battered authority. 

The three leading Eurosceptics 
in the cabinet - Mr Michael Por- 
tillo, Mr Peter Lllley, and Mr 
John Redwood - publicly sup- 
ported the tough line over the 
bill, which Downing Street 
insisted had been reaffirmed 
unanimo usly at yesterday’s meet- 
ing. But earlier at least one h ad 
voiced his misgivings to joumal- 
ists. 

Anger on the backbench Tory 
right prompted intense specula- 
tion that Mr Norman Lamont, 
the former chancellor of the 
exchequer, might stand in a lead- 
ership contest 

Opponents of Mr Major are 
seeking the 34 nominations 
needed by next Wednesday to 
trigger a leadership contest The 
dissidents are still short cf the 


Continued on Page 14 
Editorial Comment Page 13 
International bonds. Page 19 


Business chiefs outline steps 
to stem European job losses 


By Lionel Barber tn Brussels 

Europe's top industrialists 
yesterday called for a campaign 
to reduce public spending, to 
speed privatisation, and to 
improve education and training, 
in order to prevent the drain of 

jobs and wealth to the US and 
Asia. 

In a hard-hitting report issued 
in advance of next month's Euro- 
pean summit in Essen, the Euro- 
pean Round Table warned that it 
was an illusion to believe that 
economic recovery meant an end 
to Europe’s crisis of competitive- 


“This is a dangerous conclu- 
sion. The need to improve 
long-term competitiveness in 
order to generate job opportuni- 
ties through sustained growth 
remains as important as ever," 
the report says. 

The Round Table groups 40 top 
industrialists from companies 
such as Bayer, BP, Elat, I Cl, Phil- 
ips, Siemens and Unilever. 

several recommendations to force 


competitiveness to the top of the 
ElTs political agenda: 

• The creation of a Competitive- 
ness Advisory Group. The forum 
would be drawn from business 
and trade unions. It would offer 
an independent assessment of 
industry's performance in global 
markets. 

• The appointment of a Euro- 
pean commissioner for competi- 
tiveness, to filter proposals for 
EU-wide legislation in order to 
halt directives deemed to damage 
businesses’ ability to compete 
internationally. 

• Investing - not consuming - 
the “recovery dividend". Public 
finsmtvR must be put on a sound 
footing; the burden of the public 
sector must be lifted; and the pro- 
posed carbon dioxide energy tax 
scrapped, says the report 

Sir Denys Henderson, chair- 
man of ICI, and Viscount Etienne 
Davignon, chairman of the 
Soctete G£n6rale de Belgique, 
presented the report to Mr Jac- 
aues Defers, outgoing president 


Mr Defers was said to be in 
favour of its main conclusions. 

Sir. Denys said Europe could 
not afford to slacken efforts to 
bolster its competitiveness, 
despite the economic recovery: 
“We are, so to speak, at the point 
of maviTnom danger, where peo- 
ple often let loose [on costs].” 

He warned that EU trade with 
the rest of the world had felled to 
keep pace with intra-EU trade. 
Energy costs to European indus- 
try were at least 30 per cent 
higher than in the US, while tax- 
ation levels in Europe were 46 
per cent or GDP (as opposed to 31 
per cent In the US and 34 per 
omit in Japan). 

The Round Table report gave a 
cautious welcome to the trans- 
European networks, the tnHian- 
dollar infrastructure projects 
expected to span Europe in the 
21st century. But it remained 
generally wary about state subsi- 
dies and public spending. 

Viscount Davignon urged 
Europe's leaders to examine the 
projects seriously at the Essen 



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FINANCIAL TIMES ' FFJDA Y NOVEMBm ^ T$^. 


NEWS: EUROPE 


Berlusconi investigation details leak out 


By Robert Graham in Rome 

Milan magistrates are reported 
to have discovered a bank 
account allegedly used for 
making unregistered payments 
in the Finlnvest business 
group of Mr SOvio Berlusconi 

This discovery, according to 
the national news agency 
Ansa, lay behind the magis- 
trates' move on Tuesday tell- 
ing Mr Berlusconi the prime 
minister, he was under investi- 
gation for alleged corruption. 
The report, quoting judicial 
sources, appeared to be 
a well orchestrated leak from 
MQan magistrates in advance 
of Mr Berlusconi’s interroga- 
tion. 

No date has been fixed, but 
the meeting with the magis- 
trates, whom Bdr Berlusconi 
has accused of mounting a 
politically motivated cam p aign 


a gainst him, is expected very 
soon. 

Throughout 2% years of anti- 
corruption investigations that 
have jF^Pimhipd Italy’s post- 
war political system, sensitive 
information has consistently 
leaked from the offices of the 
MOan magistrates - including 
thin week’s news of the plan to 
interrogate Mr Berlusconi. 

The report of the bank 
account discovery followed 
publication in yesterday’s 
media of the four-page docu- 
ment explaining why the mag- 
istrates wish to interrogate the 
pr emier about tiding his Fin- 
invest group, Italy’s second 
largest private business 
empire. The bank account 
allegedly served to make off- 
balance sheet payments to 
members of the Berlusconi 
family and Finiflvest execu- 
tives as well as to otbers 


including the Guardia dl Fin- 
anza. the financial police. 

Mr Jas Gawronski, Mr Ber- 
lusconi’s spokesman, ridiculed 
the report, saying; “Mr Berlus- 
coni has for many years been 
the first and second biggest 
taxpayer in Italy. If he wished 
to give presents to his family 
and friends, he had no need to 
resort to illicit funds let alone 
Swiss bank accounts." 

In July Mr Salvatore Scias- 
cia, head of Fininvest's tax 
department, admitted paying 
L330m (£130, 600) between 1989 
and 1992 to Guardia di Fmanza 
officials. This related to tax 
inspections of Videotime, a 
Fininvest TV production com- 
pany. Mediolanum, the group’s 
life insurance company, and 
the Mondadori publishing divi- 
sion. Mr Sdascia also received 
a special L500m gratuity from 
Mr Berlusconi for his work at 


Fininvest. One of the reasons 
cited by Milan magistrates for 
questioning Mr Berlusconi was 
his responsibility as head of 
the group for such payments. 

Mr Scinscia told magistrates 
the funds were given to him by 
Mr Paolo Berlusconi, the prime 
minister’s younger brother. Mr 
Paolo Berlusconi later con- 
firmed the payment and 
claimed Fininvest had been 
forced to make it. This has 
been the standard defence of 
all businessmen accused in the 
ever- widening enquiry into 
bribes paid to tax inspectors. 
Mr Silvio Berlusconi used the 
same defence at a news confer- 
ence in Naples on Wednesday. 

Milan magistrates are also 
investigating in a separate case 
alleged undeclared transfer 
fees paid by Mr Berlusconi's 
football club, AC Milan , for 
Gianluigi Lentini of Torino 


football club. Mr Maura Bor- 
sano, the hold of Torino, told 
the magistrates L8bn was paid 
secretly via banks in Liechten- 
stein and Lugano. 

Different judicial authorities 
in Italy are believed to be 
investigating at least seven 
separate cases within the Fin- 
invest empire. Yesterday Rome 
magistrates revealed that Mr 
Berlusconi was on the list of 
people under investigation for 
abuse of office following com- 
plaints by a left-wing pobtidan 
and a consumers’ association, 
for allegedly patting pressure 
on the RAL the state broad- 
casting organisation, to do a 
deal with Fininvest's TV chan- 
nels on advertising rates. 

It also emerged yesterday 
that Mr Berlusconi’s two chil- 
dren by his first marriage - 
Marina, aged 28, and Piersfivio, 
25 - who have board positions 



Move to | Allies fall out 


root out 
corruption 
In France 

By David Buchan in Paris 

Wide-ranging proposals aimed 
at stemming corruption in 
French political life were yes- 
terday tabled by an all-party 
group of deputies in France’s 
National Assembly. 

Among other things, the pro- 
posals would reduce the share 
of corporate cash in political 
party coffers, submit politi- 
cians to audits of their per- 
sonal wealth and make it 
harder for them to hold 
national amd local posts simul- 
taneously, and Increase trans- 
parency and controls on the 
awarding of public contracts. 

It is unlikely all 18 legisla- 
tive proposals in the group's 
650-page report would become 
law, even though representa- 
tives of almost all the assem- 
bly's 577 deputies sat in the 
group, chaired by Mr Philippe 
S6guin. assembly president. 
This feet did not commit par- 
liamentary parties to backing 
the report, Mr Seguin said yes- 
terday. 

The reforms could be debated 
tor the assembly in mid-Decem- 
ber, he declared. But the gov- 
e mment is master of the par- 
liament’s agenda. Prime 
Minis ter Edouard Balladur is 
reluctant to introduce new leg- 1 
islation on corruption, arguing 
the current investigations of 
senior politicians and company 
heads show existing anti-cor- 
ruption laws are working. 

To avoid being accused in 
next spring's presidential elec- 
tion of befog lax on the issue, 
Mr Balladur is likely to react 
to reforms which Mr S6guin 
said were aimed at “helping 
dissolve suspicion of public 
officials and restoring confi- 
dence in democracy". 

The premier has already 
given his backing to minor 
amendments to audit politi- 
cians’ personal wealth and to 
reverse his own government’s 
easing of the provisions of a 
1993 law governing procedures 
on public contract awards. 

In one respect, yesterday's 
report goes less fer than Mr 
Balladur, who said he was 
open to a total ban on corpo- 
rate contributions to political 
parties for an experimental 
three years. The report sug- 
gests that the state could fund 
more political expenses and 
increase tax incentives for indi- 
viduals to give mare money to 
the party of their choice, so 
indirectly lessening the weight 
of corporate gifts. 

But one proposal would dras- 
tically change French politi- 
cians’ careers by preventing 
them “accumulating man- 
dates". At present, erf the 577 
deputies, 83 are also mayors of 
big cities. 22 preside over 
departmental councils and 
nine preside over regional 
councils. Under the proposed 
reform, they would have to 
choose either the national or 
local post 


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over protecting 
Bosnia safe areas 


By Laura Saber, David Buchan 
and Bruce Clark 

Wide differences of emphasis 
, between the outside powers 
involved in Bosnia have resur- 
faced as they debate how to 
defbse the crisis in Bihac, a 
stronghold of the Moslem-led 
government which has been 
surrounded by Serb forces. 

The US, strongly committed 
to the Bosnian government, 
has pressed for the establish- 
ment around Bihac of as wide 
as possible an “exclusion zone” 
in which heavy weapons would 
he subject to air strikes. 

This measure would be 
aimed at the Serbs, who enjoy 
overwhelming superiority in 
heavy armour. 

France has been no less stri- 
dent than the US in saying 
that the town of Bihac - a 
small and theoretically UN-pro- 
tected area of the Bihac 
enclave - must not be allowed 
to fell. 

Paris was one of the first 
western capitals to moot the 
idea of extending the protected 
area northwards from the town 
by up to four miles, less than 
the US would hke hut still a 
breathing space. 

At the same time, France 
and Britain - whose troops 


form the linchpin of the UN 
ground force in Bosnia - have 
doubts about the feasibility of 
protecting Bihac with air 
power alone. 

London and Paris differ 
about what these doubts imply. 
British officials say the fell of 
Bihac may in practice prove 
impossible to prevent, while 
the French say the limits of air 
power reinforce the need to 
deploy for more ground troops. 

This Anglo-French difference 
is more rhetorical than sub- 
stantiaL But not for the first 
Hmp , Paris is proving quicker 
than London to seize the moral 
high ground in Bosnia. 

The US put forward its ideas 
as part of a plan to “demilitar- 
ise” Bihac - a worthy-sounding 
objective whose precise mean- 
ing is bitterly disputed. 

If it means a surrender of 
weapons by the government 
army, whose battle-hardened 
Fifth Corps is based in Bihac 
and remains in business, then 
it will be hailed by the Serbs 
and rejected by the Bosnian 
authorities. The reverse may 
apply if the Fifth Corps is 
allowed to keep its weapons 
and use them elsewhere. 

This week’s showdown 
around Bihac is the third crisis 
since the UN designated six 



Royal Navy Sea Harrier jets prepare for takeoff from HMS Invincible in the Adriatic yesterday. 
They have been in action over Bosnia for the past four days pa 


Bosnian towns as “safe areas” 
in May 1993. 

The international commu- 
nity failed to define their bor- 
ders and sent a handful of 
troops to guard them. Nor was 
their status as safe areas ever 
respected by the warring par- 
ties. Serbs have blocked con- 
voys to the enclaves, while 
Moslems have used them as 
la unching pads for assaults. 

The “safe area” concept was 
bom out of fears of a bloodbath 
in April 1998, when the defend- 
ers of Srebrenica, one of three 
Moslem enclaves in the east, 
smuggled out a note, saying 


they could not hold out. 

On condition that govern- 
ment forces disarmed immedi- 
ately, Bosnian Serb com- 
mander General Ratko Mladic 
agreed to halt the offensive. 
The UN never called it a sur- 
render, but it was a unila teral 
disar mament. 

About 44,000 Moslems 
remain in Srebrenica, an mi vi- 
able enclave at the fer end of a 
life support system. 

In April. Moslem defenders 
tried to break out of Gorazde, 
about 45 miles south-east of 
Sarajevo. Scoffing at Nato 
threats, Bos nian Serb forces 


closed in on the town, which, 
was crowded with. 65,000 peo- 
ple. most of than refugees. 

Nato reacted with a series of 
small air strikes. Gorazde, Hire 
Sarajevo, was declared an 
“exclusion zone” where heavy 
weapons could be subject to 
aerial bombing, and a ceasefire 
was negotiated. 

Eight months later, the 
enclave remains short of food, 
and conditions are miserable, 
but the government army 
appears to have retained some 
fire-power in the town - 
enough, in the UN’s view, to 
stage occasional provocations. 


Vote opens way for 
Turkish privatisation 


Yeltsin aide in call 
to postpone elections 


By John Barham in Ankara 

Turkey’s parliament approved a 
framework privatisation law yesterday, 
opening the way to aril nearly all the 
country’s loss-making state companies. 

Approval of the law, by 193 votes to 
25, was a welcome political victory for 
Prime Minister Tansu Ciller, whose 
fractious coalition government has 
faced collapse in recent weeks. 

The law gives the PPA broad author- 
ity to sell more than 100 companies 
without prior parliamentary approval 
for each sale. Proceeds will finance 
infrastructure projects and fond sever- 
ance payments for workers who lose 
their jobs. 

The Erdemir steel company and the 
Petrol Ofisi chain of petrol stations and 
oil refineries are expected to be among 
the first companies to be privatised. 
Officials expect to raise $4bn from pri- 
vatisation next year. 

The state telephone company has a 
special constitutional status, so cannot 
he privatised at present However, the 
government will be able to license new 
private telephone services. 

This is the first structural reform 
measure parliament has approved since 
Mrs Ciller in April adopted an emer- 
gency package of tax increases and 


spending cuts after a balance of pay- 
ments crisis. Both the International 
Monetary Fund and World Bank, which 
support her policies, had become exas- 
perated at the slow pace of public sector 
reform. 

State companies control or dominate 
the telecommunications, airline, iron 
and steel, mining, petroleum and elec- 
tric power industries. Last year, they 
contributed one-fifth of the public sec* 
tor borrowing requirement of $29.72bn. 

Politicians have resisted privatisation 
because state companies are a valuable 
source of patronage. Earlier this year. 
Mrs piller tried to impose privatisation 
by decree. But the SHP social demo- 
cratic party, her junior coalition part- 
ner, appealed to the constitutional 
court. It ruled that the government 
must win parliamentary approval first 
Her conservative DYP parly only won 
the SHFs grudging support by promis- 
ing to relax Turkey’s strict security 
laws. 

However, Mrs Ciller now faces 
mounting opposition from trade unions. 
On Wednesday, demonstrators para- 
lysed the city of Zongnldak. home to 
the Demir Celik steel company, to pro- 
test against privatisation, which is 
likely to cost 80 per cent of the com- 
pany^ 8,700 jobs. 


| By John Lloyd In Moscow 

A senior Russian presidential aide 
I yesterday called for the postponement 
I of parliamentary and presidential elec- 
tions because of the “political apathy 
of tiie majority’’. 

Mr Mark Crnov, newly appointed 
head of Mr Boris Yeltsin’s analytical 
centre - the main presidential think- 
tank - also said that combining the 
elections for parliament and the presi- 
dency could “raise the level of political 
activity of the population” and drive 
more people to tee polls. 

Another reason for postponement, he 
said, was that positive results from the 
tough economic policy being proposed 
by the government would appear only 
after the summer of 1996. Parliamen- 
tary elections are scheduled for the end 
of next year, while presidential elec- 
tions are due in spring of 1996. 

Postponement of the elections has 
been a constant theme of presidential 
aides in recent months - though they 
Insist, as Mr Urnov repeated yesterday, 
that Mr Yeltsin has not yet decided 
whether he will again be a candidate. 

Mr Umov said Mr Grigory Yavlinsky, 
leader of the reformist Yabloko group 
and a self-declared presidential candi- 
date, had an “extremely high” rating 


as a potential presidential ca ndi da te , 
especially in industrial areas, accord- 
ing to his polls. 

But Mr Yavlinsky, with other reform- 
ist leaders such as Mr Yegor Gaidar, 
leader of the Russia’s Choice grouping, 
Mr Boris Fyodorov, leader of the lib- 
eral Democratic Union, and Mr Sergei 
Shakhrai, leader of the Party of Unity 
and Accord, are considering uniting 
forces by presenting a joint platform 
on parliamentary elections and one 
candidate for president 

The move comes in the face of 
Increasing evidence that far-right and 
far-left parties are better organised, 
more papular and ahead in local elec- 
tions. 

• Mr Andrei Kozyrev, the foreign min- 
ister, warned yesterday of a danger of 
fascism In Russia. “There are concrete 
examples of people who express it," he 
said. 

Meanwhile, one of the far-right lead- 
ers, Mr Alexander Steriigov, bead of 
the Russian National Assembly, fore- 
cast yesterday a period of “national 
liberation struggles” to stop the pres- 
ent leadership from turning the coun- 
try into a “servile producer of raw 
materials for the west” and to express 
the interests of the M per cent of the 
population who are ethnic Russians. 


Iberia strike situation ‘very gr im ’ 

Things were starting to look up for the airline’s Hispanic strategy, reports Tom Burns 

A two-hour stoppage by concern that wiMcat disruptive 7.4 per cent from Pta277bn to have served to increase the holdings built ud fo Latin 
F^ ( L Crfi r S ha ? could follow jf the air- PtaZBbn. compared with a 222 company's losses, estimated to AmeriSi rairienf since 1S9 

forced Iberia to cancel line s mam unions lost control ner cent increase bv tee Cer. total Pt.-i.idhn .. — i ^ 


A two-hour stoppage by 
ground crews has 
forced Iberia to cancel 
20 per cent of its 125 domestic 

flights today as management 

and unions remained in a dead- 
lock that could ground Spain’s 
national carrier in the days 
ahead and, in the medium 
term, reduce the company to a 
fraction of its present size. 

The management said on 
Wednesday that unless unions 
accepted a viability plan 
involving average pay cuts erf 
15 per cent for the airline’s 
25.000 employees, it would 
press ahead at the begnring of 
next week with a decision to 
axe 5,200 jobs and to sell off 
most of its business units. 

Unions will stage the first of 
several planned demonstra- 
tions against the threatened 
break-up of the company on 
Monday, with a march through 
central Madrid. Mass meetings 
held at domestic airports heard 
calls to dose down air traffic 
in Spain, and there is growing 


concern that wildcat disruptive 
action could follow if the air- 
line’s main unions lost control 
of the protest to extremists. 

“The situation is very grim 
indeed,” said a middle-manage- 
ment executive who asked not 
to be named. The labour force 
is extremely angry and it is in 
no mood to negotiate anything 
unless the top level of the com- 
pany is sacked first” 

As it torches to to the sever- 
est crisis in its 65 years, Iberia 
faces the prospect of bank- 
ruptcy by next March unless it 
gains a Ptal30bn ($lbn) injec- 
tion of capital. The funds can 
only be obtained through pub- 
lic subsidies, which have to be 
authorised by the European 
Commission, or through dis- 
posals. 

Fart of Iberia’s problem is its 
singular failure to increase its 
revenue. The carrier says that 
although its unit costs are 
comparable to those of Luft- 
hansa, it raised its revenues 
between 1990 and 1993 by only 


7.4 per cent from Pta277bn to 
Pta299bn, compared with a 22 2 
per cent increase by the Ger- 
man carrier over the same 
period. 

The lowered revenue, Iberia 
claims, is chiefly caused by the 
competition that the company 
faces from charter carriers 
which account for 80 per cent 
of air traffic to Spain. This 
competition from cut-rate oper- 
ators places a heavy cost-re- 
ducing onus on Iberia. 

The company's costs, mea- 
sured in available seat kilo- 
metres (ask), stand at 11.5 US 
cents - a middle-ranking level 
among the big European air- 
lines, where the best performer 
is British Airway’s 8 US cents 
ask. Iberia needs to curb its 
expenditure to BA’s level if it 
is to take business from the 
charter carriers. 

The additional burdens of a 
fleet renewal programme, 
which Iberia is already scaling 
down, and of a strong invest- 
ment policy in Latin America 


have served to increase the 
company’s losses, estimated to 
total Pta44bn this year, up on 

earlier estimates of Pta30bn. 

E ven if the pay cuts had 
been agreed with the 
union. Iberia would still 
have encountered difficulties 
in gaining approval from Brus- 
sels far a government recapi- 
talisation. There is an open lift 
in the Commission over new 
guidelines on state aid to trou- 
bled carriers and seven' Euro- 
pean airlines, led by British 
Airways, are contesting the 
Commission's recent approval 
of a state aid package worth 
$3Jbn to Air France. Iberia's 
accumulated losses by Decem- 
ber will have in effect wiped 
out a Ptal20bn capital injection 
authorised by Brussels in 1992 
on condition that no more pub- 
lic money be made available to 
the airline until 1998. 

Breaking up the airline 
would involve raising around 
Ptal30bn by selling the share- 


holdings built up in Latin 
American carriers since 1989 
and hiving off units such as 
handling and maintenance. 

The proposed sale of Iberia’s 
85 per cent stake in Aerolineas 
Argentinas and of its lesser 
shareholdings in Chile’s 
Ladeco and in Venezuela’s 
Viasa signals the end of the 
airline’s ambitions to link 
Europe and the southern hemi- 
sphere. Iberia will clip its 
wings further with the planned 
disposal of its domestic subsid- 
iaries Aviaco, Bin ter f-annrtag 
and Btnter Mediterraneo. 

It is ironic that Iberia should 
face loss of its Hispanic empire 
just as Aerolineas Argentinas, 
its biggest Investment, should 
be starting to post an operating 
profit. The Latin American 
strategy could turn out to be a 
money spinner but the man- 
agement’s inability to control 
costs and improve its indus- 
trial relations record may kill 
the potential golden goose just 
as it starts to lay eggs. 



Mamfs I^ha^ the .junior: partner -intiHr imtgon^ = 

government, yesterday held talks- with b oth F ianna Fall, its 
former maHtipn partner, mid ffie .amsarvative Fine Gael, toe 
ffiiafn nppnsitfafli party, in tile ftrstiieps to breakthe deadlock 

over thh search, for a. pew gdve roinfinfc Fine G^Tieader -John. 

Bruton described 'the talks as p raliml n a ry.l A new Hanna 
I^-Labour walitkm is stiff seen hy toast observers as -the 
Ay** likely outcome. However, ’X.ahour’s'xneetiiig with Fmej 


Berlusconi: biggest taxpayer 

to Fininvest, vrere under tovesr 
tigation for alleged false biffing 
to connection with Puhlitalia. 
Ftomvesfs advertising arm. 


UiSW UIE Jivuoiwrt MWW j ~ * . .. . . 

accept the suggestion., by Labour, the smaller of to two, that 
Mr Dick Spring the Labour leader. be app ointed as “rotating" 
prime minis ter .m a rainbow coafftion.of several parties. 7- 
Vfith tee Daff. fife Irish parthmifint, tote to Vote tin the issue 
next Wednesday, the-pofitidans are under mounting pressure 
to agree terms for a new coadttion in the wake of the cribyae : 
of the Hanna Fail-Labour coalition last week and the resigna- 
. ti™* as prime minister of tir' Albert Reynolds. " . ' • 

Rapprochement between Hanna Fail and Labour was briefly 
threatened yesterday after Mr Reynolds' to .a -farewell speech to 
the parliamentary party on Tuesday night suggested Labou r 
was trying to push "through changes 'll! the controversial 
abortion law, a suggestion that Labour as quickly, dented. 

There was speculation last. night that Mr Spring, who was . 
foreign minister under the old coalition, * will -demand a new- 
carve up of ministerial portfolios as his price .for re-entering a 
r^lfrinn with Hanna FsriL Labour is said' to want finan ce ; 
while Mr Sprin g may .head a newly established . Northern 
Ireland ministry, as well asan “open government? portfolio.. 
John Murray Brown, Dublin 

Norwegian EU threat ; 

Norway’s principal opponents of jotofogtoe European Union 
yesterday re-affirmed their threat to block accession in partte- 
ment if the referendum on Monday results in a narrow vote to 
favour of membership. With latest opinion' polls showing the 
. Yes side narrowing the longstanding. lead held by the No 
camp aign, Mrs (fro Harlem BnmdtLand, the prime minister , 
strongly attacked anti-EU parties for their refusal to be hound 
by the referendum result, saying she would consider dissolv- 
ing parfiament if a Yes vote was blocked. .- 
. Both the main parties .opposed to 'membership. Which, 
together hold three more seats than thenumber required for a 
blocking minority, yesterday said they stood by their policy to 
reserve the right to vote against the referendum result .- 
Yesterday, three opinion polls showed farther gains for the 
Yes campaign, but they continued to show a No lead ranging 
from a margin of 44-40 to 47-39-A fourth poll, which eliminated 
imdecidcd voters, showed a No lead of just 51-49. Hugh 
Carnegy, Stockholm . . ; ' . . . 

German output set to rise 

Western German -companies are revtefng; their production 
plane upwards for the aiming mr ^pthK h e cauw*? <rf the cantina- . 
tog strong .re c over y to the economy. Bo, the Bfunlcbbased 
tettah for Economic Research, . condudes in its monthly 
survey. However, the retail sector to both eastern and western 
Germany remains one of the few which show little sigh of 
growth, largely because consumer- spending is stfll sluggish. 
This is ^Asp ire recent official estimates showing teat pan-Ger- 
man gross domestic product will grow 3 per emit not year. 
The more optimistic response by companies coincides with a 
record level of investment in eastern Germany for 1994. Mr 
Gflnter Rexrodt, the economics minister, yesterday told the . 
Bundestag, parffemenfs lower house, that a record investment 
level of DMlSObn (£7&4fcfl)i higher per capita than to western. 
Germany, bad poured "tato eastern Germany this year. Judy 
Dempsey, Bom . - - 

Fewer Spaniards out of work 

Spanish joblessness edged down to 2R8 per cent of the work 
force at the end of September from 242 per cent three months 
earlier, according to the economy ministry’s third-quarter 
employment survey. 

The data confirmed projections there will be a net creation 
of jobs this year on the bat* of an economic recovery that, 
under revised government forecasts, will show a GDP growth 
of 2 per cent. The number of jobless, according to the survey, 
dropped by 64£S0 between July and September, the biggest fell 
for the period to four years. Registered unemployment, accord- 
ing to a separate set of figures issued by the labour ministry, 
stood at 16.7 per cent of toe work force at the end of last 
month , after the lowest jobless rise in October since 1988. Tom 
Bums, Madrid 

Europol treaty delayed 

The treaty granting legal recognition to Europol, the embry- 
onic European police force, has been delayed by disagre ement 
among European Union members, Netherlands' justice minis - 
tor Winnie Sorgdrager told the Dutch pa rliament yesterday. 
Europol was set up in February to share infor matio n between 
EU police forces to their fight against drug trafficking and 
organised crime. It went into action without a formal legal 
basis, and the treaty supporting it was scheduled for signing 
next week. But questions over toe treaty’s compatibility with 
laws in member states have put this target beyond reach, the 
minister said. Reuter, The Hague 

ECONOMIC WATCH 

Rate of French growth slower 

^ France’s rate of growth 

real GDP growth slowed to Hw third quarter to - 

. °- 7 cent, from 1.1 per cent 

Ouartw on quarter *6 change to the second quarter and 0.8 

^ - — — » — : per cent in the first three ; - 

* • months of this year, Insee, 

• ™ ' ~ — v — . toe official statistics agency, 

DJ _ 'IIbi reported yesterday. Insee also 

"H'S'H'- said consumer purchases of 
o „ — H i manufactured goods fell by 

2-5 per cent in October after 

H .. ■ Stagnation to September. But 

■ the agency saw “no sign of a 

, 1 0 ■ break -in the recovery”, which 

0 * bad been exceptionally strong ; 

1 ^ ■- _ a : • » . bx the January-June period . 

less 94' and was now continuing at a 

more normal pace. Even if 
fiat rr „ „ _ . gross domestic product was 

flat m the fourth quarter, average growth this year would be 

JH S was led by domestic demand, 

with household consumption rising 0.9 ™*r pent m oZ' 

tember. This offset theonenegattaf fectar*^ erwirte 
volmne terms increased on^Jper rato to • 

SSK--WS 

EjgpaSSasasBS 

mFSLTo p ™ iucts to real teem 
quarter* last Bj? 1 - 

yesterday This s£atist * c al office, reported 

^ su ® ested a taS in ttSr . 

aecnrtiim? to i iS!? ering vatx> 

yesterday. ConaJS^S^ taStaTJEF S £ tes ’ 
most populous state, rose 0 1 per ** 

vember. The annual rate was^ to 

SSMf - 

5^=saaw*^«ssisf. 


r 


fir s * 


jienem 

Idjj cat 

forre-el. 

*-• -v> i-n: 


^ ’ i.. • 


■ > 

VL ' 

j 

” : 


V -*r 




FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 


3 








★ 


NEWS: THE AMERICAS 


Resignation triggers 
Mexico shockwaves 


By Ted Bardaehe in Mexico 
City and Stephen Fidter 
In London 

The resignation of Mexico's 
deputy attorney-general over 
claims that senior ruling party 
officials have obstructed inves- 
tigations into the assassination 
of his brother has delivered 
another shock to the country's 
political system. 

Mr Mario Ruiz Massieu 
resigned as deputy attorney- 
general. member of the ruling 
Institutional Revolutionary 
party iPfU), and lead investiga- 
tor into the killing of his 
brother, Francisco, which he 
claims was ordered by a power- 
ful group of PRI politicians. 
Francisco was. at the time of 
his death, secretary-general of 
the PRI 

One week before Mr Ernesto 
Zedillo takes over the presi- 
dency, the accusations have 
generated much noise, heat 
and smoke in the febrile atmo- 
sphere of Mexico's political 
system. But it is not clear yet 
whether Mr Ruiz, whose 
brother was shot in September, 
has tossed a bomb or a fire- 
cracker at the ruling party. 

The weeks before the six- 
yearly handover of power in 
Mexico are, in any case, usu- 
ally highly charged. In the rel- 


ative political vacuum that 
exists before power is handed 
over, stunning accusations are 
often levelled at powerful polit- 
ical figures, and the cracks 
quickly covered up once the 
new president takes power. 

That may be more difficult 
on this occasion, given the 
greater freedom now enjoyed 
by parts of the Mexican media. 
Mr Ruiz's accusations and res- 
ignations were delivered on 
live television and witnessed 
by a packed room of family 
members, politicians and jour- 
nalists who applauded every 
digging statement 

Political analysts say Mr 
Ruiz's moves make more likely 
a bold political gesture from 
Mr Zedillo as soon as be takes 
office. 

Such a move would be remi- 
niscent of President Carlos 
Salinas's decision to arrest the 
head of the oil workers' union, 
Mr Joaquin Hernandez Galicia, 
when he took office, and would 
stamp his authority on a feud- 
ing ruling party. 

They also increase the pres- 
sure on him. they argue, to 
pursue the reform he has 
already promised of the judi- 
ciary. This would head off 
minor scandals before they 
became big political incidents. 

In Washington on Wednes- 


day Mr Zedillo said he would 
give the assassination investi- 
gation priority In his new 
administration and said he was 
anxious to receive all informa- 
tion about the case from Mr 
Ruiz. 

Mr Ruiz said be would hand 
his ''proof” that senior officials 
obstructed justice - which has 
yet to be seen - over to a 
notary public, who would hold 
it for Mr Zedillo. Mr Zedillo, 
said Mr Ruiz, would then have 
to demonstrate the “political 
will" to continue investigating 
members of his own party once 
be became president. 

Yesterday the attorney-gen- 
eral. Mr Humberto Benitez, 
and the president of the RPI, 
Mr Ignacio Pichardo, renewed 
their demands that Mr Ruiz 
present proof that they con- 
spired to obstruct the investi- 
gation of the assassination. 

In a message to Mr Zedillo, 
Mr Ruiz said the alleged 
obstruction meant "now is the 
time for political decisions 
instead of police investiga- 
tions". Mr Ruiz said that 
“those who obstructed the 
investigation will surely 
receive jobs in the next admin- 
istration" and that they "were 
more powerful than the truth 
and justice the president 
sought". 



Mario Ruiz Massieu: mow is time for political decisions’ 


State of Missouri contests desegregation plan 


White House to enter 
battle over education 


By George Graham 
in Washington 

The Clinton administration is 
to intervene in a Supreme 
Court battle over how much 
state governments can be held 
responsible for the wide dispar- 
ities in educational achieve- 
ment between black and white 
and rich and poor. 

Mr Drew Dai's, the salidtor- 
general, plans to file a brief on 
the side of parents and the 
local school district of Kansas 
City, Missouri, against a law- 
suit brought by the state of 
Missouri seeking release from 
a costly court-ordered plan to 
desegregate its schools which 
has required it to put more 
money into schools In poor 
areas. 

At the heart of the case is an 
argument over how much the 
state has to do to prove it has 
reversed the effects of decades 
of racial segregation in 
schools: is it enough to spend 
$l_3bn f£828m) on specialised 
“magnet" schools drawing 
pupils with particular abilities 
or interests from outside their 
catchment areas and other 
educational facilities, comply- 
ing literally with the court's 
orders, or must it also bring 


the test scores of black chil- 
dren in the district up to 
national levels to prove the 
success of the desegregation 
plan? 

The court decision is poten- 
tially far reaching, with more 
than 100 school districts under 
similar court orders. 

Mr Jeremiah Nixon, Miss- 
ouri's attorney-general, is ask- 
ing the Supreme Court to 
reverse a federal appeals court 
ruling which he argues departs 
from previous law by holding 
the state responsible for low 
student achievement levels. 

Justice department officials 
say the state must prove that It 
has done everything it reason- 
ably could to ensure the suc- 
cess of the desegregation plan 
before it can be released from 
the court's supervision. 

The case, which is to be 
argued before the Supreme 
Court in January, is believed 
to be the first school desegre- 
gation case in which the Clin- 
ton administration has taken 
sides. The administration of 
former President George Bush 
generally sided with school 
boards se eking to be released 
from court-supervised desegre- 
gation plans. 

Responsibility for education 


in the US is delegated princi- 
pally to the states and to 15,000 
local school districts, which 
are massively uneven in fund- 
ing and educational achieve- 
ment. With no national curric- 
ulum or examination, high 
school graduation standards 
vary widely. 

A recent survey by the 
Organisation for Economic 
Cooperation and Development 
criticised “the extreme and 
unjustifiable disparity of ser- 
vice quality between affluent 
and poorer communities". 

The Clinton administration 
is working with state gover- 
nors to establish national edu- 
cational standards under the 
"Goals 2000" legislation signed 
earlier this year. But the fed- 
eral government has little 
leverage to mak e states bring 
their poorer districts up to 
these standards. 

A 1973 Supreme Court deci- 
sion that education was not a 
“fundamental interest” means 
that the unequal distribution 
of education funding cannot in 
general be challenged under 
the US constitution, but racial 
equality laws do provide the 
federal government with the 
means to hold state govern- 
ments to some standard. 


Menem begins 
long campaign 
for re-election 


A split opposition boosts his 
chances, writes David Pilling 


l week is a long time in 
k politics but. when it 
JL comes to Argentine 
tion campaigns, six months 
lot considered overlong, 
rly half a year before next 
J s presidential elections, 
2arlos Menem last weekend 
ially .launched his re^slec- 
bia at' a huge rally of 
mist faithful on the out- 
s of Buenos Aires, 
esident Menem, having 
ier this year engineered 
stitutional reforms 
iling him to seek a second 
u has now begun the pro- 
of ensuring four more 
s in office. To win outright 
leeds 45 per cent of the 
, or more than 40 per cent 
ided he is 10 points clear 
le next candidate, 
te president’s aspirations, 
h had been dulled earlier 
te year by sagging popular- 
ind the gathering strength 
the opposition Frente 
ide coalition, received a 
in the arm last month 
a fellow Peronist Governor 
irdo Duhalde scored an 
irtant victory in the prov- 
of Buenos Aires. Mr 
aide, mirroring Mr 
sin's constitutional tinker- 
won 61 per cent of elec- 
I support in a plebiscite 
osing that he be allowed to 
i again as governor, 
though Mr Duhalde's twin 
have owed as much to his 
anal style of leadership as 
eneral approval for the 
nist national agenda, Mr 
am was quick to claim the 
iry as his own. “This is a 
for my government's 
si," he said- 

• Menem’s claim was par- 
y endorsed by a recent 
ion poll which suggested 
rould win the forthcoming 
ion, without the need of a 
ad-round run-off. by poll- 
nearly 44 per cent of the 

against 20 per cent each 
be Frente Grande and Rad- 

st as Mr Menem sought to 
credit for the governors 
(ry, so too has his party 
, keen to scotch rumours ot 
wer struggle between Die 
ident and Mr Duhalde, 
has made no secret of his 
Idential aspirations in 
Mr Duhalde is considered 
, of an old-fashioned popu- 
and is thought to dislike 

* aspects of the govern- 
t’s often painful 

u during policies. He has 
e several calls for a return 
the politics of work , an 
ied criticism of unemploy- 
t. which now exceeds 10 

* n any signs of discord 
in the governing 
neiehed by the bitter 
rhtSig of the opposition, 
wo most important sectors 
Sch - tie Radicals and 
KSe Grande - will nomi- 
their presidential candi- 

the tro*- 
,, to Peromsm. has 

SSf S-&EK 

Kncan.paig». mUlMr 


Storani accusing his opponent 
of ideological capitulation to 
the governing Peronists. Mr 
Storani has hinted that, if nom- 
inated, he may be willing to 
forge an electoral pact with the 
Frente Grande coalition in 
order to mount a serious chal- 
lenge to Mr Menem. 

TOe Radical party has lost 
much credibility as an opposi- 
tion force since its leader, for- 
mer President Radi Alfonsfn, 
yielded to Mr Menem’s wishes 
and supported the constitu- 
tional changes that may well 
deliver the Peronists a second 
presidential term. The Radicals 
are also remembered as the 
party whose government led to 
a period of hyper-inflation; Mr 
Alfonsfn admitted recently 
that “the economy exploded in 
our hands”. 

The void left by the Radicals 
has in part been filled by the 
Frente Grande, a centre-left 
coalition headed by Mr Carlos 
“Chacho" Alvarez, a charis- 
matic Peronist dissident The 
Frente, which shot to promi- 
nence in April's constitutional 
assembly elections - when it 
defeated the Peronists in the 
federal capital of Buenos Aires 
- is the great hope of those 
wishing to unseat Mr Menem. 

But the Frente has also been 
racked by unseemly internal 
squabbles and may be losing 
ground. It has also failed to 
establish itself as an important 
force outside the capital and is 
not yet much more than a 
loose alliance of the disen- 
chanted middle classes. 

Mr Alvarez, partly in mind of 
the defeat in Brazil of Mr Lufs 
Inacio Lula da Silva, is seeking 
to reposition himself in the 
camp of the moderate, electa- 
ble. centre. But this stance has 
disenchanted the coalition's 
more radical contingent, part 
of which has broken off into a 
separate faction. 

M r Alvarez, who has 
so far campaigned 
mainl y on an anti- 
corruption platform, is now 
seeking to persuade voters and 
businessmen that he will not 
overhaul Mr Menem' s eco- 
nomic model. He advocates 
instead a shift from “funda- 
mentalist neo-tfberahsm” to a 
“more harmonic, egalitarian 
growth model”. 

Mr Rosendo Fraga. a political 
analyst, says the Frente has 
much to do if it is to persuade 
the electorate, scarred by the 
memory of hyperinflation, that 
it can risk a potentially desta- 
bilising change of government 
Mr Fraga also believes that to 
have any chance of success, 
the Frente will have to reach 
some sort of electoral alliance 
with the Radicals, a prospect 
which is only possible if Mr 
Storani wins the Radical nomi- 
nation this weekend. 

For the moment the Peron- 
ists can afford to sit back in 
the hope that the opposition 
will self-destruct. Mr Menem 
does not enjoy the levels of 
popularity that he did a few 
years ago but, unless the oppo- 
sition is able to rally behind a 
single Bag. this is unlikely to 
prevent the president riding 
home to a second term. 


Save up to 1 6% 
on business fares 
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Inclined to know more? Just call Alitalia 
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The wings of Italy. 


FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 


NEWS: INTERNATIONAL 


Zambia 
airline 
sell-off 
row may 
hit aid 


By Michael Holman 
in Harare 

A dispute between the 
Zambian government and 
international donors over pri- 
vatisation of the state-owned 
national airline could jeopard- 
ise external support for the 
country’s economic recovery 
programme. 

The row stems from the gov- 
ernment's decision to use a 
)30m (£l9m) oil pu rchase 
facility, provided by a Kuwaiti 
bank, on behalf of the heavily 
Indebted Zambia Airways. 

Donors, who have met gov- 
ernment twice this week, say 
it contravenes an agreement 
with the International Mone- 
tary Fond which includes a 
ceiling on public sector bor- 
rowing, and fear that the gov- 
ernment may be backtracking 
on a commitment to privatise 
the airline. 

Donors and government offi- 
cials are dne in Paris on 
December 5-6 for World Bank 
chaired conference to review 
progress under the reform pro- 
gramme, and disc ass future 
funding. 

Failure to resolve the dis- 
pute could result in donors 
withholding aid. 

Zambian government offi- 
cials have strongly defended 
the use of the oil facility, argu- 
ing that it does not break the 
IMF deal, and insisting that 
they intend to privatise the 
airline. 

The facility was originally 
negotiated by the Zambia 
Industrial and Mining Corpo- 
ration (Zimco). the holding 
company of aB Zambia's state- 
run enterprises, and has been 
used to finance oil purchases 
by Zamoil, the government 
fhel agency. 

Zambian officials point out 
that the rolling loan Is 
replenished through the 
sale of the oil in Zambia, 
with the local currency 
proceeds being converted to 
US dollars. 

They argue that they are 
co-ordinating the needs of 
Zamoil with the short term 
refinancing ami restruct u ring 
of the airlines’ debt, and have 
paid off arrears which other- 
wise would have left some air- 
craft impounded. 

This will also allow time to 
implement a radical cost cut- 
ting plan. It includes reducing 
staff from 1,300 to 500, closing 
and selling all offices outside 
southern Africa except Lon- 
don, and selling much of the 
airline’s property in Lusaka, 
including staff housing and a 
hotel. 

Some leading donors express 
scepticism, however, and 
have Interpreted the govern- 
ment move as a last ditch 
attempt to avoid privatising 
the airline. 

They fear it also may signal 
a weakening of commitment to 
privatisation of the state- 
owned copper mines, which 
donors believe is essential to 
the recovery plan undertaken 
by President Frederick Chi- 
luba on taking office three 
years ago. 

The government faces elec- 
tions next year, and privatis- 
ing the airline, and in particu- 
lar the mines, faces 
considerable electoral opposi- 
tion. 

But any weakening of gov- 
ernment resolve would reduce 
donor support of $700m-$800m 
a year, say aid officials. 

Earlier this year, the govern- 
ment had seemed prepared to 
let the airline go to the wall. 
In a letter to Zimco, finance 
minister Ronald Penza wrote: 
"The government is left with 
no option but for the airline to 
go into voluntary liquidation.** 
A year ago the International 
Air Transport Association 
(lata) suspended the airline 
over arrears exceeding S5m. 
The airline’s DC-10 was 
grounded over other debts, 
and earlier this month a New 
York bank seized airline assets 
when seeking payment of a 
Sim debt 

Zambia Airways has accu- 
mulated a loss of $3Tm over 
the past two years. A farther 
obligation stem from a 1990 
order for a McDonnelTDoogLas 
aircraft due to be delivered in 
1996. 

If cancelled, it will cost 
$25m; If the order goes ahead, 
the aircraft will cost 9132m. 


China talks moving too fast for some T aiwanese 

Officials worry that Taipei’s economy will become captive to the mainland, write Tony Walker and Laora Tyson . 


T alks between China and 
Taiwan on improving working 
relations inched forward this 
week in Nanjing, the Yangtze 
river town, but at the trading 
and investment level the rela- 
tionship continues to progress 
strongly, too strongly for some 
Taiwanese officials. 

Pledged Taiwanese invest- 
ment in the mainland exceeds 
$20bn (£12Jjbn), making it the 
second largest investor after 
Hong Kong. More noteworthy 
perhaps is the rate of invest- 
ment. While Investors from 
Hong Kong, Singapore, and 
Thailand have been active 
since the mid-1980s, Taiwanese 
businessmen really got started 
in 1991, tbe year Taipei lifted 
its formal ban on business 
lioteg with the mainland. 

According to the mainland- 
published China Economic 
News. Taiwanese investment 
amounted to $3.4bn in 1991, 
$5^bn in 1992 and $10bn last 
year, a total of nearly Sl9bn by 
the end of 1993. This estimate 
vastly exceeds official Taiwan- 
ese investment figures ($4 bn at 
the end of June), the Invest- 
ment Commission of the Minis- 
try of Economic Affairs says. 

One explanation for this dis- 
crepancy is that many Taiwan- 
ese have chosen not to report 
their activities. Some have 
channelled their investment 
through subsidiaries in Hong 
Kong and Singapore. 

Taiwanese officials appear 


resigned to the fact that invest- 
ment in the mainland will con- 
tinue to grow rapidly, but then- 
attitudes sometimes show two 
differing viewpoints. On one 
hand they can see real advan- 
tages in Taiwanese business 
positioning itself in the world's 
largest market, on the other 
they worry understandably 
about Taiwan's economy 
becoming captive to China, 
and investment being drained 
away from Taiwan. 

Mr Hansen Chien, spokes- 
man for the ruling Kuomin- 
tang, reflecting gloomy con- 
cerns of the Taiwanese 
establishment about becoming 
caught up in the mainlan d’s 
embrace, said: “We are getting 
more worried about too much 
investment in mainland China. 
We are becoming too depen- 
dent on the mainland." 

At a political level. Mr Chien 
also gave voice to underlying 
Taiwanese worries: “Every 
time we talk with mainland 
China," he said, “it seems we 
are losing more and more of 
our chips. We don’t have too 
many chips to lose. Every time 
we throw out a chip, we should 
get something back." 

Attempts by the authorities 
to mount what they describe as 
a “go south” policy to persuade 
investors to put their money in 
south-east Asian economies is 
one among several responses 
aimed at tempering enthusi- 
asm for mainland investment. 


Taiwan: investment in Asia 


Vietnam 


Indonesia Malaysia 


Mainland I 
China I 


UtMand Phffipplnea 


--- 


ilUii*. 


1994s Jan 10 Jun 


1988 88 90 82 84 1988 88' 90 92 

1986 88 90 92 94 1991 82 83 « “ 


88 9092 94 


“We are encouraging our 
people to go to south-east Asia, 
but not discouraging them 
investing in the mainlan d, on 
condition we derive mutual 
benefit," says Mr Leo Tseng, 
deputy director-general of tbe 
Board of Foreign Trade. 

Taiwanese investment at the 
end of 1993 in Thailand. Malay- 
sia, Philippines. Indonesia and 
Vietnam, the main destina- 


tions for Taiwan’s south-east 
Asian investment, matched 
that of investment in the main- 
land: but again tbe build-up of 
investment in China Is proving 
much more rapid (see chart). 

Typical of attitudes among 
larger investors to putting 
their money in the mainland 
as opposed to south-east Asia 
is that expressed by represen- 
tatives of President Foods 


Group, the big Taiwanese food 
processor that hag ambitions of 
becoming the world’s biggest 
food conglomerate. 

The mmpatiy has set Up four 
factories in south-east Asia but 
targeted the mainland because 
executives believe it provides 
better opportunities. President 
Foods is establishing 12 compa- 
nies involved in making a wide 
range of products, including 


Taiwan tycoon sets off court s kir mish 


By Laura Tyson in Taipei 

Mr Oung Ta ming, a Taiwanese tycoon 
suspected of illegal share dealing s, pro- 
voked a courtroom skirmish between 
his bodyguard and the bailiff when he 
refused to pay TJlm (£24.200) bail set by 
the Taipei district court to which 
he was subpoenaed for questioning 
yesterday. 

Friends of Mr Oung rallied to meet 
his ball as he resolutely denied that he 
had played any role in the share specu- 
lation case which led to a chain of 
share payment rtofanits and rattled the 
Taiwan stock market early last month. 

As an elected member of Taiwan’s 


Legislative Yuan, or parliament. Mr 
Oung may not be arrested or detained 
without tiie permission of the legisla- 
ture unless caught in the act of commit- 
ting a crime, under the country's con- 
stitution. 

Mr Oung apparently sought to force 
the court into the position of having to 
secure approval to arrest him. 

During questioning. Mr Oung, effec- 
tive chief of Huaion-Teijran Corp. a 
listed textile concern, blamed the 
Taiwan Stock Exchange for the incident 
that sparked a 14 per cent plunge in 
share prices in one week. 

He said the exchange's failure to 
enforce a newly instituted “self-protec- 


tion clause" made financiers refuse to 
continue backing his chief aide, Ms Li 
Hsiu-fen. thus precipitating the defaults 
crisis. 

Earlier this year, Huaion-Teijran com- 
mitted to invest £160m to build a textile 
plant in Northern Ireland with Kim in 
subsidies from the UK government 

The Taipei district attorney's office is 
believed to have documented evidence 
of financial links among Mr Oung, Ms 
Li and other unnam ed providers of 
funds to speculation in shares of Impe- 
rial Hotel. 

But Mr Oung denied such links , say- 
ing it was a mistake to take evidence of 
financial flows as proof of his role in 


Defence spending split 
threatens Japan’s rulers 


Bank of Zaire’s 
chief dismissed 


By Wffiam Dawkins in Tokyo 

A split over defence spending 
has opened in Japan's three- 
party ruling coalition of con- 
servatives and socialists, 
threatening the government's 
stability. 

The dispute, over the rate of 
increase for next year’s defence 
budget, intensified yesterday 
when finance ministry officials 
announced they were pushing 
for a lower rise next year than 
the 0.9 per cent set by the 
coalition in August, a month 
after taking office. 

Tins strengthens the hand of 
the pacifist Social Democratic 
party, the second largest coali- 
tion partner, an unusual ally 
for the finanna minis try. 

The Socialists felt they were 
coerced into agreeing the 03 


per cent rise by the dominant 
coalition member, the conser- 
vative Liberal Democratic 
party. 

“It is our duty to chart a 
dear course for disarmament," 
said Mr Wataru Kubo, the 
Socialists’ deputy leader. Mr 
Kozo Igarashi, chief cabinet 
secretary, denied the govern- 
ment would reduce the figure. 

Socialist politicians fear they 
have alienated traditional sup- 
porters over the past few 
months by discarding most of 
their party’s former policies, 
such as opposition to the mili- 
tary’s constitutional right to 
exist and opposition to sales 
tar, in order to form a govern- 
ment with the LDP. 

As a result, they are eager to 
demonstrate progress on paci- 
fism, one of the few policies 


the party still retains. 

Failure to agree on the 
defence budget would increase 
pressure on a group of dissi- 
dents, orchestrated by Mr 
Kubo. to form their own party. 
If the Socialist party broke up, 
the government could be 
deprived of a majority. 

The LDP's proposed rise, 
while the lowest for 33 years, 
would bring Japanese defence 
spending to Y4,730bn (£303bn). 
It is the second largest defence 
budget in the world, inflated 
by the yen’s rise in value and 
huge pension and social secu- 
rity payments. 

On the outcome also hang 
the hopes of several foreign 
defence-equipment suppliers, 
awaiting finance ministry 
clearance before their con- 
tracts can proceed. 


| Zaire's President Mobutu Sese 
I Seko has dismissed the head of 
the Bank of Zaire, aiding a 
four-month battle of wills 
between the central bank gov- 
ernor and Mr Kengo Wa 
Don do. prime minister. Reuter 
reports from Kinshasa. 

Zairean state radio yester- 
day said that Mr Mobutu had 
signed a decree on Tuesday 
dismissing Mr Ndiang Kaboul. 
his own appointee. Mr Ndiang 
has been fighting to save his 
job since Mr Kengo’s govern- 
ment suspended torn in July, 
accusing him of fuelling 
hyperinflation by flooding the 
market with millions of new 
zaire notes. 

A parliamentary committee 
earlier voted for Mr Ndiang’s 
dismissal after an audit found 
he had made huge unauthor- 
ised payments in defiance of a 


government freeze on central 
bank transactions. 

Economists regard establish- 
ing the autonomy of the Bank 
of Zaire, which in the 
past has been tapped for funds 
by Mr Mobutu and his army 
generals, whenever they ran 
short of cash, as tbe key to 
rescuing Zaire's wrecked econ- 
omy. 

Tbe appointment of the cen- 
trist Mr Kengo in June broke a 
long political stalemate 
between supporters and oppo- 
nents of Mr Mobuio. 

He quickly made the inde- 
pendence of the bank a central 
policy objective and, during a 
tour of western capitals last 
month, he was repeatedly told 
that investors would not put 
money into Zaire unless he 
could guarantee the bank’s 
independence. 


Russia raises its Gulf profile 

Conservative Arab states have something to gain, writes John Lloyd 

M r Victor Chemomyr- Kuwait was the most diffi- his Kuwaiti hosts: "It would be include joint production of 
din, the Russian pre- cult stop on the trip. Still fear- more profitable if the money new SU-37 fighter (a version i 
mier, returns to fill of President Saddam Hus- was invested direct! v " the sii-xu 


M r Victor Chernomyr- 
din, the Russian pre- 
mier, returns to 
Moscow today having lifted the 
Russian profile among the con- 
servative Arab states of the 
Gulf. Also, he may have 
achieved a diminution of the 
suspicion that Russia remains 
inheritor not just to the prop- 
erty and treaties of the Soviet 
Union, but to its alliances with 
the radical states of Syria, 
Libya and Iraq. 

“Not so,” says Mr Valery 
Kuzmin, deputy head of the 
Russian Foreign Ministry’s 
Middle Eastern and North Afri- 
can department 
“The changes in the ideologi- 
cal position of the Soviet Union 
were coming evident in the 
late 1380s; we officially ended 
the period of confrontation in 
the Middle East in 1991: now 
we are partners in the peace 
process (in Israel/Pales tine) 
and our interests are to sup- 
port tbe development of eco- 
nomic ties.” 


Kuwait was tbe most diffi- 
cult stop on the trip. Still fear- 
ful of President Saddam Hus- 
sein’s Iraq, the Kuwaiti 
leadership saw the visit to 
Baghdad by Mr Andrei 
Kozyrev, Russian foreign min - 
ister, as suspicious, even when 
he won Baghdad’s apparent 
recognition of Kuwait 

“We wanted to reassure 
Kuwait and the other states we 
did not have something going 
on with Iraq behind their back. 
The visit was important in that 
regard, a sign of the impor- 
tance we attach to good rela- 
tions with these states after a 
time when it was said, 
wrongly, that we had lost 
interest in them.” 

Mr Chernomyrdin signed 
five fairly standard agreements 
on economic co-operation, 
information exchange and 
investment protection. Mr Oleg 
Davydov, Russian trade minis- 
ter, noting Arab capital usually 
came into Russia through 
western intermediaries, told 


his Kuwaiti hosts: "It would be 
more profitable if the money 
was invested directly." 

Mr Chernomyrdin got 
nowhere on the Russian debt 
to Kuwait of Sl.lbn (£687m). 
nor did be manage to unfreeze 
a credit promised in 1992. 

The Kuwaitis were not inter- 
ested in a plan to restructure 
the debt along similar lines to 
that achieved in the Paris club 
of western creditors; the form 
of words said only the two 
sides had reached “a common 
understanding on the issue of 
the possible reconstruction of 
the debt". But contracts worth 
$750m were signed to deliver to 
Kuwait Russian armoured per- 
sonnel carriers and other 
equipment, though it is not 
known what part, if any, of 
that is to be written off against 
the debt 

Tbe United Arab Emirates, 
closest to Russia of all the Gulf 
states, has concluded mili tary 
contracts Russian experts say 
are worth up to $3bn and 


include joint production of a 
new SU-37 fighter (a version of 
the SU-35). 

The Russian debt to the UAE 
is S550m, with arrears on inter- 
est payments of more than 
$60m, according to tbe Interfax 
news agency. No decision on 
deferment, or of the use of the 
military shipments to pay off 
the debt, has yet been 
announced. 

Mr Chernomyrdin had most 
to gain from Saudi Arabia, but 
seems to have achieved little 
but formal agreements. The 
Saudis opened an embassy in 
Moscow only after tbe fall of 
the Soviet Union and remain 
distant A claim by Mr Davy- 
dov of an agreement to put off 
repayment of $250m owed by 
Russia to a group of Saudi 
banks was flatly denied by Mr 
Mohammed AJi Aba al-Khail, 
Saudi finance minister, who 
said the banks demanded full 
repayment immediately. 

For these wealthy states, 
Russia is of moderate interest 



& 

Chernomyrdin: be may have 
lessened fears that Russia Is 
heir to the Soviet Union 

It Is indigent and has better 
links with the radical states. 
But it offers a chance to diver- 
sify arms purchases and put 

some pressure on the west; it is 
an active partner in the Pal- 
estinian-israeii peace process; 
its economy may be chaotic 
but offers high quick returns 

in some spheres, and may 
become stable soon; its diplo- 
macy remains skilful and its 
memory long. Both sides had 
something to gain. 


instant noodles, biscuits, ani- 
mal feed . and car batteries. . 
Since 1992, it has invested 
5100m, with plans to double 
that .figure. 1 

But its representatives 
acknowledge that business in 
the . mainland remains- 
extremely - difficult: among' 
problems is a lack of manage- 
rial talent and difficulties in 
securing market share in, a . 
highly fragmented market 
where local brand loyalties, 
dominate. Transport bottle- 
necks militate against the 
building of national • brands. 

Taiwanese -officials point out 
that while thousands of Tai- 
wanese businessmen are con- 
tinuing to rush to the main- 
land, ’ the. success ‘ rate -is 
patchy, at best Mr Steven Wtu. 
director of the Industrial 
Development and Investment . 
Centre of the Ministry of Eco- 
nomic Affairs, estimates that 
3050 per cent of enterprises are 
making money. 

“Tbe rest have had a very 
sad experience,” be says. Prob- 
lems mirywintorf i d jpphirfo over- 
manning, bureaucratic obsta- 
cles and difficulties with. local . 
partners. Mr Wu noted that the 
success rate of investments in 
southeast Asia was h ig h e r . . 

But it seems that despite 
well publicised difficulties, Tai- 
wanese investors are deter- 
mined to make their presence 
felt on the mainland, attracted, 
as they are by low labour 


costs, a hngfe market, mjgnt- 
some cases .jprOJMUed au . 
desire 4o escape Erom; an., 
increasingly . active ehyUffln£- 
mental lobby in Taiwan..-', ;• 
' r Mr S Lee; vk»aninis^^ih- - 
. the Ministry* of;- EccflOMaigr- 
Aff airs, responsible Tor over* 
flarin g approvals for mainland . 
Investments,- believes invest-*-.,, 
ment . growth . will slow, hut-, 
noted Tsdwanese -biBinfisanEa- - 
are be ginning to make larger/ 
commitments. . ^ : 

- -Mr Lee said that of^tbfr = 
“whole hst” of 9,000 items, coyr'j 
ered by investmept guidelines, 
Taiwanese - business was’- piss - 
mitted to -make about 4,588- on 
the mainlan d another JUftO 
items were- inV“grey, areaV, 

piaantng approval would - be 

withheld for the time befog, . 
and about. 1,000. “high-tech” v 
items wera farttdden. ... . ---r.— '■ 

Industries in the;“grey area* 
include cement factories and-, 
petrochemical plants involved ' 
in producing, synthetic fibres, 
in which Taiwan leads' the; 
world. - The authorities, are - 
reluctant to allow competing, 
industries to move across tie - : 
Taiwan Straits. 

Mr Lee says: “We are review- ' 
ing our policy (on mvesfraeni - 
approvals) cautiously and pro- - 
gressively”. The; problem for - 
the Taiwanese authorities, •• 
however, is ihatpress u re from 
Taiwanese business is such 
that it is having great diffi- 
culty holding the line. 


deals involving the share price. He was 
simply help in g his friends and employ- 
ees, he said. 

“For several years now I have 
entrusted all funds to Ms Li Hsiu-fen. 
including even my cheque-book.” he 
told tbe Taipei district attorney, assert- 
ing: “I stopped paying attention to these 
matters long ago.” 

Ms U. also brought in for questioning 
yesterday, tearfully told prosecutors 
that although aha hjri traded heavily in 
Imperial Hotel shares, she did not rig 
the share price. 

Ms Li has been in detention since 
early October. No date was set for fur- 
ther proceedings. 


INTERNATIONAL NEWS DIGEST 


Further Gaza 
clashes likely 

Further confrontation between the Palestine Liberation 
Organisation Tsiamte militants Is expected today • when tbs 

militants hold a big rally in Gaza amid growing evidence that 
Palestinian police were largely to.’ blame for last ..Friday’s 
killing of 12 people. The Hamas Islamic Resistance Movement 
has refused formally to sign an accord with the PLO to calm 
tension in the Gaza Strip and ban weapons at public rallies 
until the PLO accepts responsibility for last Week’s violence. 
But PLO efforts to blame the incident on a conspiracy against 
the Palestinian self-rule authority are befog widdy discredited , 
and there is growing evidence to support the Hamas version of 
events. The PLO accused the opposition of provoking violence ; 
by firing on police and said evidence for the was sup- 
ported by the fact that among the were one policeman 
and eight activists of the Fatah faction, . the. PLO 1 a hugest, 
political group. JuHtmQunme, Jerusalem ... : i. ' 

South Korea growth slows 


.1801 92 

Somtie Magnum 



. . . J, . .. South Korea’s gross national 

South Korea: red ORP ; product growth rate slowed 
■ " jliiL ” down in the third, quarter to 

7.5 per cent because of a smn- 
12 mer drought that affected 
•• -V ■.'•/ . v|* agriculture, the central bank 

10 - said yesterday. Economic 

'-V" \ . K : growth has ' gradually 

.0 i*t-— '>-v' 1 ; " 1 1 rVr 1 ■ declined from K9 per- cent In 

' - • : ■ ■ M • 010 41181 Tarter and 7.8 per 

■ 8 ; — ■-—-A - - — — •y cent in the second. The earn.-. 

\ ■■ j * omy has expanded by 8 per 
4 7 -" \ cent during the first nine- 

‘ - • • - - ’ months of 1994. Biit the third 

2 ~ . — quarter posted the biggest- 

^ , i , f : , jump in Industrial invest- 
- 0 tflBi go an ments • at 23- 4 per cent, since 

0 TV v ■ the beginning of 1988. Compa- 

soBt»Dstes&i*«m nies are expanding produc- 

tion facilities to meet an export boom caused by the weak 
Korean currency. Private consumption rose by 7.6 per cent 
during the third quarter, raising concerns of growing inflation- 
ary pressure. Inflation is now hovering just below the govern- 
merit's target of 6 per cent for this year. John Burton, Seoul : 

Beirut blames Paris on air deal 

A Lebanese parliamentary committee said yesterday the 
French government was responsible for Beirutis loss of mil- 
lions of dollars in a 1983 helicopter deal, and iteman dp^ Paris 
investigate the case. The committee investigating the deal said 
it wanted Beirut “officially to ask the French government, 
which bears responsibility for breaching the contract, to 
uncover the identity of French accomplices with Lebanese, 
officials . Under the agreement Lebanon paid for six French 
Puma helicopters but received much cheaper Ramaniaitas- 
sembled ones from Paris. The committee said it wanted tha~ 
Lebanese government to hold Paris responsible for the loss 
r ? slJ k^£fr 0 ? 1 the deal * put by one committee source at 
about 330m (£i9m). It said it was holding General Ib rahim 
Tannous, farmer head of the Lebanese army, “responslbte for- 

£™., the deal - kno ™ 

Murdoch China channel boost 

Murdoch’s Star television, the satellite network 
Ko °f \ bolstered its tenuous foothold in China 
approx limited distribution of its 
Br °adcast authorities confirmed 


narrow segments of the population to apply for licences £S 

“tS *7* 831611116 m °vte channel, 

rules mainly affect foreign tourists in hotels and for- 


1S c controUed b y Mr Murdoch’s News 
Corporation. Using AsiaSat-l, its footprint covers north Asia 
with four channels in English or Chines* and « 
nel whase signal 3 m °™ 

EU ‘must release Rwanda aid’ 

M.2.35M ssrr “ 

by demands which could not be met withm^fh 
international medical agency Mfidech?? 0 ^ SSLSS?' 
the British charity OxSairi Fronbfe f es 

of hundreds of tlLuS Sa ™ lg 

unless Rwanda could rebifiM. 

in Rwanda struggles to reZld adl ™ tratKai 
and paper, EUd^elopment t S )es ’ cliairs » P 6113 

Ecu 159m (£i25m) " they P Sid slt ° n ** unspent 

ministers meeting hi developmeilt 

enable Rwanda to create cSh y * to to 

reconciliation and baste SteS n^> JUsh f- mtional 
ment says it cannot proDerto^J? * R T andan gPveror 
after the massacre of ud te i 118110,131 reconciliation 

civil war without intero^tion^iffl^^ * 






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Egypt forms 
gas-to-Israel 
venture group 


By Mark Nicholson tn Cairo 

Egypt lias taken the first steps 
towards the eventual export of 
8as to Israel by forming a 
5150m joint venture company 
with two oil companies. Amoco 
Of the US and ENI of Italy. The 
venture plans to build a gas 
pipeline from Pert Said, at the 
entrance of the Sues Canal, to 
the Israeli bonier. 

The state-owned Egypt Gas 
will own one third of the com- 
pany, with Amoco and ENI 
each holding a third. C ompany 
and Egyptian officials said the 
joint venture would build a 
series of gas pipes in Egypt, 
with the export pipeline to 
Israel a priority. 

At the Israelis* request, 
Egyptian and Israeli officials 
held a series of high-level talks 
about exporting Egyptian gas 
over the past year. Mr Hamdi 
al-Banbi, Egypt’s oil minister, 
then agreed in principle to the 
project, but said exports would 
depend on a substantial rise in 
Egypt's provable reserves. 

The announcement of the 
joint venture company follows 
a recent series of gas discov- 
eries in the Nile Delta, the 
Mediterranean basin north cf 
Sinai and the Western Desert 
These have lifted Egypt’s 
proven gas resaves to 2i,000bn 
cubic feet Egyptian officials 
said they believed that this 
would soon rise to 24,000bn 
cubic feet 

The leap in reserves, which 
stood at only 12,000bn cubic 
feet a year ago, will enable 
Egypt both to continue its 
long-standing programme to 
turn all the country's electric 
stations over to gas power 
while also allowing exports, 

officials Raid 

The new company, which 
must still win formal approval 
from the country's General 
Investment Organisation, is 
expected to start work next 
year on the proposed 250km 
pi peline to Israel at an expec- 
ted eventual cost of $S0 Qbl 

Egyptian nfflraate said they 
did not- -yet- know what vol- 
umes of gas might be exported. 


^•JaZEjpnj 

Xjo *# loo 


m T SYRIA S 


r. SAUDI : 
fp ARABIA \ 

j"__ Proposed | ■ 


However, Israeli requirements 
have been estimated at 200m 
cubic feet a day in 1998 rising 
to an eventual 600m cubic feet 
by the year 2000 - much of it 
for industrial use. 

However, Ur Wafik Meshref, 
a vice chairman of the state- 
owned Egyptian General Petro- 
leum Company, said the first 
pipeline would extend to 
“Israel, Palestine and even 
eventually Lebanon, Jordan 
and Turkey'*. Mr al-Banbi is 
understood to have told his 
Israeli counterpart in August 
that Egypt could be ready to 
start exports by 1998. 

Mr Meshref said the com- 
pany was also expected to 
build a long-awaited pipeline to 
link recent substantial finds in 
Egypt’s Western Desert to the 
eventual export pipeline. 

At first the export pipeline is 
expected to be fed from the 
North Port Said concession, 
operated by the International 
Egyptian Oil Company, an 
ENI/Agip subsidiary. The tract 
embraces a trio of gas fields 
with proven reserves of more 
than S,000bn cubic feet. 

He said the new company 
could begin building the pipe- 
line next year with completion 
expected within two years, by 
which tune recent gas finds in 
the Mediterranean should be - 
cnnilng on stream. 


contracts 

Turks call 
for straits 
radar bids 

Turkey’s TDI maritime 
agency has invited nine 
international companies to 
bid for a radar and commu- 
nications system to control 
shipping in the Dardanelles, 
Sea of Marmara and Bos- 
porus straits. 

Bids are to be submitted 
in January 1995. The compa- 
nies include Germany’s 
Deutsche Aerospace, Ray- 
theon of the US, Mitsui 
from Japan and the UK’s 
Marconi. Suppliers must 
provide their own financing 
lor the system, which is 
expected to take three to 
four years to install at an 
estimated cost of $50m- 
560m- 

The companies will also 
be asked to bid Cor a smaller 
initial phase of the project, 
limited to the Bosporus 
alone. Traffic in the straits, 
linking die Mediterranean 
and the Black Sea, has 
increased sharply since the 
collapse of the Soviet Union 
as newly independent states 
in the region increase trade 
with the rest of the world. 
John Barham. Ankara 

m Petronas, the Malaysian 
state oil and gas company, 
has signed an agreement 
with Korea Gas for the sup- 
ply of about $900m worth of 
liquefied natural gas (LNG) 
over the next five years. A 
sale and purchase agree- 
ment signed by the two 
companies says Petronas 
will supply up to 5.26m 
tonnes of LNG to Korea 
Gas. Under an earlier, sepa- 
rate agreement Petronas 
will supply 2m tonnes of 
LNG a year to Korea Gas 
far 20 years starting next 
i June. Kieran Cooke, Kuala 
Lumpur 

U Massload Technologies, 
of Saskatchewan Canada, 
will distribute its electronic 
weighing equipment for 
commercial vehicles 
throughout China in part- 
nership with Chinese inter- 
ests. An initial agreement 
covers C$40m (529m) worth 
of equipment. Robert 
Qibbens, Montreal 






NEWS: WORLD TRADE 


EU plans trade zone with S Americans 


By David Gardner in Bi n— els 
and Stephen Fkfler in London 

The European Union and 
Mercosur, the South American 
trade grouping of Argentina, 
Brazil, Paraguay and Uruguay, 
yesterday announced plans to 
negotiate a free trade zone 
between them. 

A proposal from the Euro- 
pean Commission to begin 
negotiations will be considered 
by EU foreign ministers next 
Monday. It is expected to be 
given formal approval by the 
EU s ummi t in Essen on Decem- 
ber 9 and 10. 

“The central idea is to work 
in a realistic and pragmatic 
way towards a common free 
trade zone,” said Mr Celso 
Amorim. Brazil's foreign minis- 
ter, in Brussels yesterday. He 
and his three South American 
counterparts met the bead of 
the commission, Mr Jacques 
Delors, and the commissioner 
In charge of relations with 
Latin America, Mr Manuel 
Marin. 

The EU has been the largest 
trading partner with the four 
countries since 1986. According 
to commission officials, the 
southern cone of South Amer- 
ica is by far the fastest grow- 
ing market for European 
exports. In 1992, the EU 
accounted for 27 per cent of 


Mercosur* trade 

Exports, $bn 
15 * 


EU 

-- --15 




1988 83 

Imports, Sbn 
US 




1888 83 





1988 83 


Sot*i» IMF OracflonoC Trade Statist lea 'Afpanfha. BrazS, Pngo^m) lM<ju*r 


Mercosur exports - against 21 
per cent for North America, 48 
per cent of direct foreign 
investment and 42 per cent of 
the group’s foreign aid. 

No formal timetable was 
given for a free trade accord 
with Mercosur. Informally, offi- 
cials have indicated a free 
trade zone could he in place by 


the year 2001. Detailed negotia- 
tions are expected to begin 
next year over trade liberalisa- 
tion in the short-term, with the 
ultimate goal of a formal free 
zone being cemented later. The 
EU wants to see a Mercosur 
customs tminn in place, and a 
Mercosur institution estab- 
lished with winch to negotiate. 


A Mercosur customs union 
setting a common external tar- 
iff for 85 per cent of goods will 
come into force on January 1, 
with the timetable for the most 
of the rest already negotiated. 

According to the Commis- 
sion proposal going to minis- 
ters on Monday, the aim is 
“the gradual establishment of 
a free trade zone in industrial 
goods and reciprocal and pro- 
gressive liberalisation of farm 
trade (taking into account the 
sensitivity of certain prod- 
ucts)”. 

“This is a bold strategy but 
we have to move quickly, even 
if the goal is long term,” said 
one Commission official The 
Commission calculates that 
with free trade in prospect 
European exports could be 
expected to grow at nearly dou- 
ble the rate of any other 
region. 

The Mercosur move is one of 
a number of trade initiatives 
being directed at areas outside 
Europe. It is also part of a 
larger package aimed at Latin 
America - containing a variety 
of new and existing policies - 
expected formally to be 
announced at the EU summit 
in Essen. 

The timing of the announce. 
Tnpnt - ahead of the Summit of 
the Americas hosted by Presi- 
dent Bill Clinton in Miami 


which concludes on December 
11 - is not accidental, says Mr 
Wolf Grade nrinrff of the Insti- 
tute for European-Latin Ameri- 
can Relations tn Madrid. 

He says the message is that 
Europe - having maintained 
strong economic relations with 
South America during the 
debt-distressed decade of the 
I9S0S - does not plan to aban- 
don the region to the US now 
that Lt is enjoying some eco- 
nomic success. 

The package also includes 
plans to enhance economic 
relations with Mexico, and to 
extend the generalised system 
of preferences arrangements 
with the Andean countries and 
central America. 

However, while the EU rhet- 
oric speaks of free trade, the 
practical difficulties for many 
South American exporters to 
Europe have increased over 
the last five years. 

In a speech this week to a 
conference in Rio de Janeiro, 
the B razilian ambassador to 
London, Mr Rubens Barbosa, 
said Brazilian exporters face 
non-tariff barriers, anti- 
dumping procedures, restric- 
tions arising out of the EU*s 
Common Agricultural Policy, 
and distortions caused by pref- 
erential treatment of countries 
with privileged relations to the 
EU. 


Improved outlook in customer countries and marketing drive lift prospects 

Caribbean tourism promises an upturn 


By Canute James in Kingston 

Caribbean tourism’s high season, which 
begins in mid-December, promises to be 
better than hoteliers were expecting. 
Consistently occupied hotel rooms in 
Caribbean resorts please not only hote- 
liers, but also finance ministers. Tour- 
ism brought $10hn to the region last 
year and Caribbean economies have 
become increasingly dep endent on tour- 
ism, particularly because of uncertainty 
in traditional commodity markets. 

Recession in the leading tourist mar- 
kets, particularly in North America, 
was blamed for a reduction in the 
growth rate of visitor arrivals. “The 
economic climate in these major mar- 
kets has improved, and with it the 
fortunes of Caribbean tourism,” said 
Mr Jean Holder, secretary general 
of the Caribbean Tourism Organi- 
sation. 


Hoteliers are now more confident as 
advance bookings for the forthcoming 
season are high. In addition to the 
improved economic outlook in North 
America and Europe, the Caribbean has 
laimrheri a very intensive marketing 
hrh p m mn tion campaign. 

initial feats that US military inter- 
vention in Haiti would adversely affect 
tourism have not materialised. The 
region was visited by 13m stayover visi- 
tors last year, and by 83m others who 
came on cruise ships. The tourists 
spent about $X0hn last year, according 
to the Caribbean Tourism Organisation. 
This repres ented a slight improvement 
in the n umb er of visitors and in expen- 
diture over 1992. 

Hoteliers, government ministers and 
other administrators of Caribbean tour- 
ism are, however, frequently reminded 
of the fickle nature of -the tourism 
industry. Prospects have been enhanced 


by currency fluctuations; Caribbean 
currencies are pegged to the US dollar, 
and the recent weakening of the dollar 
makes the region a better bargain for 
European visitors. For North 
Americans, a European holiday 
becomes more ex pensiv e than one in 
the Caribbean and two out of every 
three tourists visiting the Caribbean 
come from the US. 

Competition for Caribbean tourism is 
coming not only from other established 
resort regions, but also from the 
increasing efforts of several US states 
to offer cheaper and safer holidays as 
an alternative to the Caribbean follow- 
ing adverse publicity about crime in 
some Caribbean resorts, an issue nag- 
ging fhp tourism industry. 

Caribbean resort countries have 
implemented a multi-million dollar 
advertising programme to market-the 
region as a single destination to poten- 


tial visitors from North America. Pro- 
spective visitors make little distinction 
between countries. 

“Regrettably, geography is not a very 
strong subject,” said Mr Carlyle Dunk- 
ley, Jamaica’s tourism minister. “Many 
people believe you can take a stroll 
from Port of Sprin [Trinidad] to Port- 
au-Prince [Haiti], and it is not quite so." 
Despite the joint marketing of the 
region, there is increasing competition 
among several resorts which are seek- 
ing new markets. 

Sir Cohn Marshall, ahafnnan of Brit- 
ish Airways, recently warned of the 
dangers of price cutting. Competing an 
price and price alone dilutes the quality 
of the Caribbean tourism product. Sir 
Cohn told a meeting of tourism inter- 
ests. 

“Cut-price competition creates a spi- 
ral dive from which it is extremely diffi- 
cult to reoover," he said. 












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IRELAND. 

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FINANCIAL TIMES 



NEWS: UK 


Exchange’s 
secrecy rule 
is criticised 


By Nonna Cohen, 
investments Correspondent 

London Stock Exchang e rules 
which allow the prices of large 
blocks of shares to be kept 
secret for up to five days are 
anti-competitive, the Office of 
Fair Trading said yesterday. 

The exchange declined to 
comment on the criticism, 
except to say it is studying the 
OFT's report on competitive- 
ness in share dealing. But it is 
understood that the exchange 
will shortly approve changes to 
Its rules. These will limit the 
time during which trades can 
be kept hidden and force imme- 
diate disclosure of some large 
trades which are now con- 
cealed. 

Until now, the stock 
exchange and its large, 
maricft t -wiairing members, have 
argued that publishing each 
large trade immediately means 
that competitors can respond 
by instantly lowering the price 
they will offer for the same 
shares. This practice, they say, 
led to swingeing losses for 
maiketmakers in the late 1980s 
when immediate post-trade 
transparency was required. 

The OFT report comes as the 
Securities and Investments 
Board, the City's chief watch- 
dog, is also asking whether 
current trading rules are fair 
to investors. Regulators, 
including the Treasury, are 
concerned that London's stand- 
ing as a centre for interna- 
tional share trading could be 


damaged. The SIB is expected 
to deliver its review early nest 
year. 

Submitting the report to the 
Treasury, Sir Bryan Carsberg. 
director-general of the OFT, 
referred to the SIB review. He 
said he was Wrin g in g the OFT 
report to public attention now 
“in part in order to infor m that 
process”. 

“In deciding whether to 
direct the exchange to flnwnri 
its rules, you may therefore 
wish to consider the implica- 
tions of my report for SIB’s 
continuing work,” Sir Bryan 
said. 

The stock exchange's mar- 
kets committee win meet today 
to consider the report- The 
exchange is expected to alter 
the current rules to cut the 
time some large trades are 
kept secret to 60 minutes from 
90 minutes. 

In addition, trades which 
may in future be hidden will 
have to be at least five times 
Normal Market Size - the aver- 
age size of each transaction in 
that share for the previous 12 
months. This is an increase 
from the current threshold of 
three times NMS. Roles on 
trade publication only apply to 
marketmakers - securities 
firms which agree to buy and 
sell large blocks of shares 
through, all maArt MTT ^iHnns 

The OFT report maintained 
that allowing the trades to be 
hidden meant that some mar- 
ketmakers had an advantage 
over others. 


Tory right claims ‘slap in face’ for 



By Kevin Brown, 

Political Correspondent 

Rightwing Tory MPs claimed last night 
that a show Of support for a challenge 
to the chairman of the powerful 1922 
committee of party backbenchers 
amounted to a coded rebuke to Mr John 
Major's leadership of the party. 

Sir Nicholas Bonsor, chairman of the 
cross-party Commons defence commit- 
tee. foiled to unseat Sir Marcus Fox, 
who has held the chairmanship of the 
1922 committee for two years. In line 
with normal practice, voting figures 


were kept secret But rightwing critics 
of the prime minis ter said Sir Nicholas 
had achieved a "respectable" level of 
support, reflecting widespread concern 
about Sir Marcus's unswerving public 
loyalty to Mr Major. 

‘This can justifiably be seen as a slap 
in the face for Major, because Marcus 
was seen as a close and uncritical sup- 
porter," a senior rightwing backbencher 
said 

Sir Nicholas, a senior backbencher 
who is generally rightwing on economic 
matters but allied with the centre of the 
party on social issues, refrained from 


any criticism of the prime minister dur- 
ing the campaign. 

But his decision to stand followed 
attempts by Sir Marcus to put public 
pressure on backbenchers considering 
voting against the the European Com- 
munity Finance bill, which will have its 
second reading on Monday. 

Many MPs were annoyed by Sr Mar- 
cus's forthright support for the bill, 
which was interpreted by many as a 
reversal of the normal role of the 1922 
chairman in keeping Downing Street 
informed of backb ench opinion. 

Sir Nicholas said there had been “a 


focussed ana pledge, to make the prime 
minister more aware of backbench reel- 
ings, and to adopt a more private 
approach to liaison between MPs and 
Downing Street 

“Irrespective of the result, I- hp pe. it 
will encourage - much, stronger private 
links between. the backbenchoraand the 
government,” he said. 

Sir Marcus, described his. victory as 
“comfortable,” .but admitted that 
n][M»ftqa over the strength of his loyalty 
to Ore prime minister had been a key 
factor in the contest 


EU cash battle stretches MPs’ nerves 


By Kevin Brown 

The corridors of the House of 
Commons were yesterday buzz- 
ing with speculation about the 
outcome of Monday's vote on 
European Union finances. 

But as government whips 
anxiously counted and 
recounted their lists of loyal 
backbenchers, it became clear 
that the government's future 
rests on the willingness of 
Tory rebels to vote for a 
Labour amendment 

Mr Bill Cash, a leading 
Eurosceptic Tory backbencher, 
sought to set the agenda early 
in the day by drafting an 
amendment giving the Com- 
mons public accounts commit- 
tee powers to block Britain's 
EU contributions. 

The Eurosceptics know that 
the amendment is unaccept- 
able to the government, 
because it would set up a 
m echanism making it impossi- 
ble for the government to give 
the EU guarantees that pay- 
ments would be made when 
they become due. 

The intention was twofold: to 


THE SUN SAYS 



IT 


Majors political legacy »l „ 
that in four years be presided 
over the salT-destnictfoa of the 
party that transformed this nation 
I m the EighlM*. 



Friends abandon John Major: newspapers that usually back the Conservatives were sca thin g 


make the Eurosceptic view 
crystal clear, and to provide an 
opportunity for Labour, the 
official opposition, to maximise 
the potential vote against the 
government by adopting the 
rebels' tone and language. 

In the event, Mr Tony Blair, 
the Labour leader, tabled a 
toughly worded motion deplor- 
ing fraud and waste, but 
couched in terms that mak e it 


unlikely that most of the rebels 
will dare to support It 

When MPs decide the issue, 
at about 10pm on Monday, the 
Labour amendment will be 
voted on first. If it succeeds, it 
would delay implementation of 
the increased contributions 
until 1996 because no MU can 
be tabled twice in one year. 

That however, would be aca- 
demic because the success of 


the amendment would be 
regarded as a government 
defeat on an issue of confi- 
dence, prnn r p H np 1 an immedi- 
ate request by Mr John Major 
for a fHgfinhiftmi of parliament 
and a general election. 

More probably, the amend- 
ment will be defeated, and 
there would then be a vote on 
the second reading of the h3I - 
giving formal approval to the 


principle of the legislation. The 
division would be a sham 
because the failure of the 
^rppmhnpnt wr mlri have dem- 
onstrated that the rebels were 
not prep a red to defeat the gov- 

w mi'iflflnt- 

If that happens. Labour says 
it would abstain. Other parties 
might follow suit, presenting 
the government with a 
resounding victory- ' 

• Mr Patrick Nlcholls 
r esigned from his. post as Con- 
servative party vice-chairman 
after. making . an outspoken 
attack an the Ftench and Ger- 
mans in his local newspaper. 

The former minis ter said lie 
“hittedy” regretted any embar- 
rassment he might- have 
caused to the government, in 
the article, which was dis- 
owned by Conservative Central 
Office. 

Mr Nicholls Warned Ms hail 
hack for his tirade-. 

He said he had been “in 
agony” for more than a month 
and addadi Tf i had not had 
these health problems perhaps 
I would have gene less heavy 
on the French and Germans.” ' 


BT launches computer security probe after hacking claim 


By Alan Cane 
and Raymond Snoddy 

Britain’s Data Protection 
Registrar has called for talks 
with British Telecommunica- 
tions over a breach of security 
which has resulted in the leak 
of some of the most sensitive 
security telephone numbers In 
the UK. 


BT began its own enquiry as 
doubts grew last night over the 
existence of a mysterious 
“hacker” supposed to have 
penetrated the computers, 
removed sensitive telephone 
numbers and addresses and 
transmitted them over the 
Internet, the international 
computer network. 

The Independent newspaper 


yesterday said the hacker had 
sent thousands of confidential 
records including telephone 
numbers for security services. 
Downing Street and Bucking- 
ham Palace to Mr Stephen 
Fleming, described as a freel- 
ance journalist In its extensive 
coverage, the Independent said 
Mr Fleming had worked for 
three days at BT - without pay 


- to check the veracity of the 
information he was receiving. 

The information, it was said, 
was sent over the Internet 
from someone who claimed to 
have penetrated BT security. It 
was claimed BT computer pass- 
words were available to 
full-time and contract staff. 

The telephone company said 
last night Mr Fleming bad 


been an employee of the organ- 
isation for two months during 
the summer. It accepted that 
there had been a genuine 
breach of security and that 
sensitive numbers bad been 
taken from the database but 
said there was no evidence erf 
hacking - jargon for rigfaatmg 
computer security devices. 

It said last night its Cus- 


tomer Service System was 
secure, adding; “Despite an 
extensive and ongoing search, 
BT has found no evidence that 
the confidential information, 
has ever been available on the 
Internet” Experts said that the 
volume of traffic travelling 
across the Internet was so 
great that it would be unlikely 
for anyone to have been able to 


track the transmission. 

Mr Ian Hargreaves, editor of 
The Independent said the 
story had been thoroughly 
researched over several weeks. 
Mr Flemin g had not been paid 
for his story; his motive was to 
expose security lapses. 

Deutsche Telecom . decision 
soon. Page 15 







*.■ X 


‘wise men’ 

By Petot Norman, : 

Economics Ecfitor .. j'.rrv-" . 

Hr Kenneth Clarke, the W 
chancellor, ‘ yesterday? ; - 
appointe d the Treasury's six- 
man panel ofte^KudeBt cco; 1 
nomte forecasters formreyear 
while paving the way . for 
future changes, .’.t't. 

.. The Treasury announced' 
that two of the “wise mai*- 
Professor Davhf 'Cnrrie, . IiTOtf 
of economic forecasting at foe 
London Business Scha^aa! 
Prof Wynne Godley, professor 
of appHed economics at Cm*-, 
brldge University - would ' 
serve ' until the end- of .next 


The. other four: panel medfc. 
bars were appointed unfit the 
end of 1996. Thesfr are Mr 
Andrew Britton, -director' of; 
the National Institute of . Eto- 
nomicandSocialltesearch; 
Prof Tim Cortgrtorylmanaglng 
director of liOftbard; Street' 
Research; Mr Gavyn Davies, _ 
chief UK ecanomist for Gold- 
maw Sachs In'; Loudon, and 
Prof Patrick Minfurd, profes- 
sor of applfaklecoiromics at 
UverpooL r- v . - I 

In future, the panel wiH pro- 
dnee two reports a year-com- 
pared 1 .with throe a year since 
it was set up fo . December 
1992. This wifi bring it into 
hne wifirthe Treasury, which 
by law has to produce two eco- 
naraic forecasts a year. 

. .The Treasury said fire chart 
cellor’s goal was to change the 
membieraMp of the panel, oyer ■ 
thrift, with, appointments nor- 
mally lasting three years:' In ' 
practice a third of panel mem- 
bers will change every year. 
The names of the find two new 
members would be announced 
next year. . 

The two-year appointments 
announced yesterday would 
en sur e «wne c ontinuity ™mi 
fire ad of 1996, when there 
woald.be a, farther. change of 
membership. 

The p?ad- was set up after 
the debacle of sterling's exit 
from the European exchange 

rate mechanism as a move 
towards greater openness in 
eoanomie policymaking. = 


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FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 ★ 


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NEWS: UK 


Nadir makes tax arrears payment 


By Jim Kelly 

Mr Asil Nadir, the fugitive business* 
wan, was yesterday reported to have 
struck a deal with the government of 
northern Cyprus to regain control of 
two hotels seized this week. 

Administrators to Polly Peck Interna- 
tional said, however, that the govern- 
ment-appointed sequestrators were still 
w the hotels and that the deal had 
divided the coalition government of 
prime minister Mr Hakki A tun. 

Sources in northern Cyprus indicated 
that the agreement had prompted one 
government official to resign in protest 
and that the first instalment in an 


agreed tax repayment scheme had been 
in the form of a post-dated cheque. 

"Nadir made a first payment or his 
tax arrears yesterday. The amount is 
not disclosed. The government has 
agreed to a payment plan he proposed." 
said a finance ministry official in Nico- 
sia. "The cabinet discussed the situa- 
tion at a meeting on Wednesday. Asil 
Nadir was later summoned by [north 
Cyprus] prime minister Hakki A tun," 
the official added. 

Mr A tun was quoted by Turkish Cyp- 
riot news agency TAK as saying: “We 
have been given assurances that 
re maining ins talm ents will be duly paid 
and we are happy to have solved this 


problem." Mr Chris Barlow, a partner at 
Coopers & Ly brand and lead adminis- 
trator for PP1, the conglomerate whicb 
collapsed in 1990, said: “According to 
our information attained this afternoon 
the sequestrators are still in the hotels 
and we have heard that other govern- 
ment ministers are not agreeing with 
this proposal. 

“We are always keen to meet the gov- 
ernment and we have made it clear that 
if they assist us in getting possession of 
the hotels we will deal with the issue of 
outstanding tax." 

Mr Nadir's UK lawyer Mr Peter Kri- 
vinskas said his client had been two 
months in arrears on a repayment 


scheme agreed in 1993. “He is back in 
control," he said, adding: “I the 

payment was in cash. It could have 
been a post-dated cheque.” 

Since October 1990, the administra- 
tors have been denied access to Polly 
Peck assets in north Cyprus because of 
a series of injunctions and court orders 
obtained by Mr Nadir. 

Government tax officers had seized 
the revenues of Mr Nadir's Jasmine 
Court and Palm Beach hotels on Tues- 
day to recover SI. 5m in tack taxes and 
social security payments owed by a PP1 
subsidiary. Total tax debts for compa- 
nies under Mr Nadir's control are 
thought to exceed $l 0 m. 


Halftrack's miles of assets 

Track 

Route miles open for traffic 10.270 miles 

Passenger and freight 7,639 miles 

Passenger only 1.057 mHejs 

Freight only 1.374 mites 

Proportion of network electrified almost one third 

Stations 

Total number of passenger stations 2,482 

Stations opened or reopened since 1965 240 

Signal boxes and control centres at April 1994 1.1 60 

Bridges and tunnels 

Railtrack will be responsible lor 964 tunnels and some 
90.000 bridges. These include viaducts, listed buildings 
and national monuments 

Staff 

At Apr3 1994 12,000 


Companies fear 
being left out of 
trade with Iraq 


Details of 
Railtrack 
sell-off 
omit date 

By Charles Batchelor, 

Transport Correspondent 

The government yesterday 
announced plans to privatise 
Railtrack. owner of the 
national rail network’s track, 
signalling and stations, but did 
not give a date. 

The announcement provoked 
fierce criticism from the oppo- 
sition political parties and a 
warning from the Freight 
Transport Association, whose 
members account for 90 per 
cent of rail freight, that 
the rail industry must take 
more account of the needs of 
its customers. It said Railtrack 
should not boost profits by 
raising prices. 

Mr Brian Mawhinney, trans- 
port secretary, told parliament 
that at least 51 per cent of Rail- 
track's equity would be sold 
but the precise timing would 
depend on stoebnarket condi- 
tions. 

A government memo 
obtained earlier this week by 
the opposition Labour party 
mentioned a target date of the 
first three months of 1996. 

The sale of Railtrack is an 
important element in the gov- 
ernment’s rail privatisation 
programme alongside the fran- 
chising of passenger train 
operations and the auctioning 
of three sate -owned rolling- 
stock leasing companies. The 


Mr Robert Horton, Railtrack 
chairman, has spent 35 years 
climbing to the top at British 
Petroleum, only to be ousted 
in 1992 when a tough cost- 
carting programme failed to 
reverse declining profits. 
Barely installed at Railtrack, 
he was confronted with a sig- 
nal workers’ strike and the 
first public test of his manage- 
ment skills. For all his long 
experience of big-company 


government originally planned 
to sell Railtrack later in the 
rail privatisation programme, 
but franchising has taken lon- 
ger than expected. 

It is too early to estimate a 
precise value tor Railtrack, the 
assets of which have been 
nationally valued by the Trea- 
sury at £6.&bn (?10.7bn), 
though City estimates are 
closer to £4bn. 

Mr Mawhinney said the flota- 
tion would allow the greater 
use of private-sector skills in 
managing the network and 
would encourage investment 


management and his enthusi- 
asm for the railway, Mr 
Horton is a newcomer to the 
business. Industry expertise at 
a senior level is provided by 
Mr John Edmonds, Railtrack 
chief executive and a railman 
for 34 years. Below senior 
management comes a clutch of 
directorates for areas such as 
civil engineering and procure- 
ment as well as 10 zonal or 
regional directors. 


by Railtrack and independent 
providers of private capital in 
the upgrading of railway lines. 

Mr Michael Meacher, the 
Labour party's shadow trans- 
port secretary, said the sale 
had nothing to do with 
transport policy but was 
driven “entirely by the desper- 
ate desire ... to make 
a quick financial killing to 
finance Tory tax cuts in time 
for the next election.” Labour 
was committed to a publicly 
owned rail system and would 
fight privatisation “tooth and 
nail." 


By Jimmy Bums, Win lam 
Lewis and James Whittington 

In spite of the UK govern- 
ment's public support for the 
continuation of sanctions 
against Iraq, imposed in 
August J990, some British com- 
panies are now preparing to 
resume trade with President 
Saddam Hussein's regime 
when they are lifted. 

On Sunday, 17 British water 
treatment and engineering 
companies and several other 
Europe-based groups will 
exhibit at the Baghdad Trade 
Fair Centre. The British organ- 
isers of the fair, billed as cover- 
ing humanitarian aid, say it 
has been cleared by the UN. 

In January there is likely to 
be another delegation to Bagh- 
dad involving leading British 
vehicle and construction com- 
panies. Companies whicb have 
signalled their intention to go 
to Iraq include Ley land Trucks 
(trucks and buses), RB Interna- 
tional (cranes and construction 
equipment) and Angus Fires 
(fire engines). 

Ley I and said: “When sanc- 
tions are lifted there is clearly 
going to be opportunities tor 
new business. Our feeling is 
that our competitors are 
already preparing themselves.” 

British businesses' enthusi- 
asm for rebuilding links with 
Iraq comes against a back- 
ground of mixed signals from 


the Foreign Office and the DTI 
as to how tor business rela- 
tions with the Iraqis should go. 
Such confusion contrasts with 
the approach being taken fay 
the French government to 
resume contacts with the 
Iraqis. 

"French companies are free 
to talk about whatever they 
like to whoever they like," said 
a French foreign ministry 
spokesman yesterday, while 
insisting that his country was 
sticking strictly to the 
embargo. 

The French oil companies 
Total and Elf Aquitaine have 
held detailed negotiations with 
the Iraqis on developing the 
two giant oil fields of Nahr 
Umar and Majnoon, in 
southern Iraq. Both companies 
said yesterday that no agree- 
ments with the Iraqis had been 
signed. 

British companies are anx- 
ious that European competi- 
tors, led by France, have been 
moving faster than they have. 
Trade delegations from Spain. 
Germany and Italy have vis- 
ited Baghdad during recent 
months. 

Commercial support for 
renewing trade links has been 
growing. Some 100 companies 
from sectors including pharma- 
ceuticals. financial services, 
construction, and transport 
have expressed an interest in 
resuming ties with Iraq. 


UK NEWS DIGEST 

All-Ireland 
tourism 
drive starts 

Ireland is to be promoted as a single tourist 
destination under an J&8m (Si 1.2m) initiative 
unveiled by Baroness Denton. Northern 
Ireland economy minister in the UK govern- 
ment, and Mr Charlie McCreevy. tourism min- 
ister in the Republic of Ireland. 

Mr McCreevy said the initiative was “a pure 
marketing one led by the industry itself; it 
does not preempt, prejudge or predetermine 
any that might happen in the future." Tourism 
is one of the industries which may be given 
cross-border authorities under joint UK/repub- 
lic framework for a political settlement in 
Northern Ireland. 

Supporters in the north of union with the 
UK have often opposed any move that would 
give the republic an executive role in the 
north, even in non-controversial areas such as 
tourism. Cash for the joint initiative will come 
from the private sector, the International Fund 
for Ireland and the European Union. 

Treasury drops 
dividends ‘hot potato’ 

The Treasury has abandoned 
its review of whether compa- 
nies' dividend payments are 
too high, and there will be no 
measures in the Budget next 
RIIDCFT week aimed at controlling divi- 
dends. A senior government 

- * ‘ 1 * official said the issue was 

dropped after it had been 
attacked by Lord Hanson, chairman of the 
Hanson conglomerate. The official said: “The 
Issue became too much of a hot potato after 
Hanson attacked the review. No one wanted to 
pick it up." 

Mr Stephen DorreU. as financial secretary to 
the Treasury, initiated an inquiry a year ago 
into whether the tax structure encourages 
companies to allocate an excessive proportion 
of retained profits to dividends compared with 
funds for investment. 

Price survey adds to 
interest rates pressure 

The proportion of manufacturers planning to 
increase prices rose again this month, says the 
latest survey of monthly trends from the Con- 
federation of British Industry, the UK’s biggest 
employers’ lobby. 

Mr Eddie George, the governor of the Bank 
of England (thecentral bank), has in the past 
paid particular attention to the CBI prices 
findings, and today's result will fuel specula- 
tion that he will press for an early rise in base 
rates when he meets Mr Kenneth Clarke, chan- 


cellor of the Exchequer, on December 7. How- 
ever. the CBI survey did find that manufactur- 
ers are enjoying buoyant export orders and 
increases in output. The CBI also warned that 
over-aggressive tax cuts before the next gen- 
eral election might, if combined with a fall in 
sterling; threaten the government's target of 
keeping inflation at the lower end of the 1 per 
cent to 4 per cent band. 

Guidelines on 
derivatives change 

Far-reaching guidelines for UK corporate users 
of derivatives were published yesterday in the 
wake of a succession of write-offs inflicted by 
interest rate swaps and other complicated 
fir ^n qiai instruments. 

The Association of Corporate Treasurers 
argues that companies must guard against 
“the failure to implement and operate controls 
at a very basic level” that typically lies behind 
the worst losses. 

Mr Derek Ross, chairman of the association, 
played down the role of complex products such 
as “swaptions" and "captions” that have taken 
much of the blame for losses. The association, 
the professional body which groups corporate 
treasurer* and finance directors from the UK’s 
largest companies, laid responsibility on top 
management. 

Thomas Cook to shed 
almost 200 managers 

The Thomas Cook travel group, a subsidiary of 
Westdeutsche Landesbank, is to shed 200 jobs 
- mainly among middle and senior managers. 
Staff at the company's offices in Peterborough, 
central England, and London will be offered 
voluntary redundancy and early retir ement to 
minimise the need for compulsory job losses. 

The company said it wanted to simplify its 
structure and reduce overheads. Mr John Don- 
aldson, a Thomas Cook executive, said: “The 
decision to introduce redundancy programmes 
was not an easy one to make, but it is essen- 
tial. It is part of an overall programme to 
become a lean, focused company ready to meet 
the challenges of the 21st century.’' 

Agents at Lloyd’s 
protest at court action 

Regulators at the Lloyd's of London insurance 
market should stop preparing loss review 
reports while legal actions brought by Names 
are progressing, the High Court in London was 
told. Names are the individuals whose assets 
have traditionally supported the market 

Managing agents of syndicates 80 and 643 
asked for the loss reviews to be baited because 
they were prejudicial to the court cases in 
which Names are seeking damages for alleged 
negligence. The agents claim the Names can 
Obtain an unfair advantage because the tran- 
scripts of interviews with regulators can be 
Used as evidence in court 

The Regulatory Board of Lloyd's opposed the 
move, arguing that the loss reviews were for 
the benefit of all Names, not just those 
involved in litigation - about half the total 
number of Names. 





a#* 9 * 





3/95 

10/95 

10/97 

10/98 


MELNIK - PRAHA, a.s. 

intends to procure 

delivery and installation of a Flue Gas Desulphurization Plant for Power Station Melnik 1, Czech 
Republic. 

The main project objectives are: 

- to reduce SOx emissions from six North - Bohemian lignite fired boilers 55MW, 
each and to meet air - pollution control limits. 

- to produce environmentally friendly waste product. 

The limestone wet or lime semi-dry process will be used. 

The project will include but will not be limited to the following; 

data collection and verification, process proposal, design, procurement, fabrication, delivery, 
transport, construction, erection, documentation, personnel training, commissioning, 
guarantees and warranty. 

Anticipated Project Schedule: 

- submission of the Bids - first step 

- contract signing 

. provisional acceptance of the Work - l.stage 

- provisional acceptance of the Work - ll.stage 

Open international Bidding and the Two - Steps Bidding procedure will be followed. The 
Bidding Documents and the Bids shall be written in the Czech language accompanied with 
the informative translation into the English language. 

A Complete set of Bidding Documents may be purchased by any interested Bidder on the 
submission of a written application to the office mentioned hereinafter and upon the 
payment of a non- refundable fee of USD 500,- or equivalent fee of CK 15,000,-, on the 
account no. 359 103 0247/0100 of Komercru banka, a.s., branch office Praha 7, Czech 
Republic or upon payment of the same fee in place in CK 

This sum is the charge for one (1) set in the Czech language or one U) set in the 
English language. 

Interested Bidders may obtain further information from and acquire the Bidding 
Documents at the office of: 

Melnik - Praha, 

Mr. Peter Kusebauch 

Manager of Commercial - Technical Section 

Partyzanska 7 

170 05 Praha 7 

Czech Republic 

teL 02/ 66753205 

telefax 02/ 808211 

TTridine Documents will be available at the above stated address on December 15th 
ia00 a.m. - 4.00 p.m. local tune. 

later acquirement of the Bidding Documents has to be agreed with the 
^ ^Co^ciTSical Section. 


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FINANCIAL TIMES FRIDAY NOVEM BER 251^.. 


TECHNOLOGY 


Neural 
network 
fills gap 

N ext week the govern- 
ment publishes a survey 
which was put together 
using one of the biggest neural 
network systems - a computing 
technique loosely based on the 
workings of the brain - yet 
developed. 

The Department of Social 
Security has spent £400,000 on a 
neural system to help prepare 
the OSS's Family Resources Sur- 
vey, an exercise based on inter- 
views with 26,000 households 
which helps forecast and model 
benefit expenditure. The system, 
which uses 1,500 individual neu- 
ral networks, is the largest in 
Europe, according to Recogni- 
tion Systems, its Birmingham- 
based developer. 

The DSS statisticians turned 
to neural networks to fill in 
gaps in their data, where inter- 
viewees had failed to answer 
particular questions. Filling 
these gaps is important because 
bias would be introduced into 
the survey If the questionnaires 
were left incomplete. 

Although the adoption of neu- 
ral networks in government sur- 
veys had few precedents, their 
potential was obvious. Neural 
networks, which are trained by 
example, can pick ont patterns 
in large amounts of data. 

The results of a pilot study 
were enco ur aging. It suggested 
that neural computing technol- 
ogy was up to 40 per cent more 
accurate in estimating the miss- 
ing data items thaw placet rail sta- 
tistical techniques such as 
regression analysis. 

The neural network proved 
capable of Imputing results for 
70 per cent of the 46,000 items 
that were missing from the sur- 
vey's database, which totalled 
10m i tems . There were insuffi- 
cient examples of the other 30 
per cent of items, which 
involved unusual situations, for 
the neural network to handle. 

The system has won the 
enthusiasm of Cheryl Morgan, 
the Family Resources Survey’s 
statistician. Not only does it pro- 
duce more accurate results than 
conventional techniques, but it 
costs less to run, she says. 

Vanessa Houlder 


I f you thought the Internet was 
for "techno-nerds", think 
again. Over the past IS months 
a vast new array of informa- 
tion resources has been added to 
this global computer network that 
even a novice can navigate. 

The World Wide Web (WWW) Is 
the newest and fastest-growing 
neighbourhood in cyberspace; a col- 
lection of about 10.000 “servers", or 
database computers, up from about 
3,000 in August with more being 
added everyday - containing infor- 
mation an topics as diverse as fly 
fishing and home brewing to film 
reviews and electronic newspapers. 

The Web provides a set of stan- 
dards, or formats, that enable users 
to access information files on the 
Internet What marks it out from 
earlier efforts Is Its ability to allow 
users to move easily from relevant 
information in one database to 
linked infonnation in another one - 
which might be on the Ear side of 
the world. The Internet itself is the 
network of computers that 
exchanges information by using the 
same interconnection rules. 

The Web has a flourishing “com- 
mercial district" as hundreds of 
companies begin to promote their 
wares over the Internet's global 
links. Most Important, it is the site 
of the first “electronic commerce" 
on the Internet, which is expected 
to explode over the next year. 

The first filaments of the Web 
were spun in 1989 at Cera, the Euro- 
pean particle physics laboratory, in 
a project led by Tim Berners-Lee, a 
computer scientist who is known as 
the “fethar" of the WWW. 

“The WWW was conceived as a 
ranritefis world in which all infor- 
mation, from any source, can be 
accessed in a consistent and simple 
way ... on any type of computer, 
from any country, using one [stan- 
dard] program,” says Berners-Lee. 

His vision has come close to real- 
ity over the past year, largely as a 
result of the popularity of Mosaic, a 
software program that enables com- 
puter users to “browse" the data- 
bases and search swiftly through 
thousands of on-line documents. It 
simplifies the task - a click of the 
mouse on a link-word in one docu- 
ment aut omatically executes com- 
puter instructions to take the 
reader to another related piece of 
information, be it text, graphics, 
sound or video. 

This is a huge improvement over 
the bewildering mass of different 
computer protocols and languages 
that Internet users faced until 
recently. In effect, Mosaic has 
become a tour guide to cyberspace 
- a guide that speaks all the com- 
puter languages and knows the best 
sights. 

Developed at the University of Ill- 
inois' National Centre for Super- 
computing Applications, Mosaic is 
available to individual users, via 


A new cyberspace neigbourhood has 
joined the Internet and traffic is 
brisk, explains Louise Kehoe 

Caught in 
the web 






m 




Growth of Internet hosts" 
(mffionl 










W t 

w. 


. Traffic on the World Wide Web 
(data volume - gigabytes pot day). 

— - i 800 

■ - • — - ■■/- 700 

ft* 

- Fitf BOO 

- - /-A*, soo 

- - - /C 400 


1886 8/ 88 88 90 91 IB 93 W 89 1802 


Somvoc Marti NC Santas, Taos 

IntUTXiI Gfrtttaitlrxj. WtraRls 


- Nanbar as computes inked to mono, moat of wfidh 
save rwwortcB al u*« ratter man MvldHl uwra 


the Internet, at no charge. 

Since May. corporate computer 
users have purchased more than 
10m copies of an “enhanced" ver- 
sion of Mosaic from Spyglass, a 
company set up to commercialise 
the university's technology. 

Traffic on the WWW is growing 
so fast that it is difficult to keep 
pace. About 30m people are esti- 
mated to be using the Internet with 
about 1m new nsers logging on each 
month - man y of t hem drawn by 
interest in the WWW. 

Almost anybody can put up a 
“home page" on the WWW. The 


McBryan family of Boulder. Colo- 
rado, for example, claims to be the 
first home on the information 
superhighway. Dad. Mum and the 
three kids are all wired up to the 
Internet “What you will find here 
are prototypes of future infobahn 
users," they say. throwing in some 
family photos to illustrate their 
text 

Then there is Hillside Elementary 
School, in Minnesota, where Mrs 
Collins' sixth-grade cla ss proj ect is 
to create a site on the WWW. Last 
year, the third grade (ages 7-8) also 
participated. 


An Intel engineer proud ly show s 
off his contribution to the WWW - 
mock-up photos designed to make 
him look like a felon being booked 
into jail and some hyperlinks to dis- 
cussions of British cars, hi s hobb y. 

The friendly feel of the WWW is 
also, however, making it the ideal 
locale for businesses. You can find 
IBM, AT&T, Ford, Mitsubishi and 
the Bank of America on the Web, 
among many others. Search a bit 
further and you may find menus of 
restaurants in Palo Alto, California, 
a wedding planning service called 
“Bridesmaid for Windows", a fisting 
of homes for sale in San Francisco 
and hundreds of other businesses. 

Commercial “domains”, the Inter- 
net addresses for groups of users, 
have multiplied from about 9,000 in 
1991 to well over 20,000. Most are 
experimenting on the internet by 
posting public information and see- 
ing how much notice it gets. 

A fledgling industry of consulting 
groups and service org anisati ons is 
growing up around the WWW, help- 
ing companies to create an on-line 
presence. 

Business Interest in the WWW is 
rapidly shifting, however, towards 
electronic commerce. In Silicon Val- 
ley, for example, a group of elec- 
tronics manufacturers is building 
CommerceNet, an Internet market- 
place for electronics products. 

Intel, one of the participants, pre- 
dicts that eventually electronic 
commerce will eliminate the “mid- 
dle men” or distributors that today 
play a critical role in delivering all 
sorts of products to end-users. 

The Web is also a new medium 
for publishing groups, with several 
newspapers and ma gazin es already 
on the Web. HotWired, an electronic 
version of the trendy San Francisco 
high-tech magariri^ is a big attrac- 
tion on the WWW. The San Jose 
Mercury News, a pioneer in elec- 
tronic newspapers publishing with 
its “Mercury Center” on America 
Online, is also planning an Tnforufft 
version on the WWW. 

A s busin ess interests multiply on 
the WWW, it is be ginning to be seen 
as a competitor to commercial 
on-line services such as Prodigy, 
CompuServe and America Online 
for which users pay subscription 
plus fees according to how much 
time they spend on htm The trend 
on the WWW, in contrast, is 
towards free sendees supported by 
advertising revenues. 

For the average user with a per- 
sonal comp uter a nd a modem, 
access to the WWW is slow. Yet as 
the availability of highspeed com- 
munications lines increa ses, and 
prices decline, the WWW appears 
set to continue its exponential 
growth and to create the much her- 
alded “information superhighway” 
long before predictions of “movies 
on demand" and 500 TV channels 
come true. 


Worth Watching - Vanessa 


■gU 
0 C . 






Its Audittoner sys tem m atted 
from a nine-year researdb.proleck 
which focused on the acoustic f-J 
mo deling necessary to predict -V 
how sound travels and the signal 


pn«Hn signals in the same wayas 
rooms do. It cdnasts. of a desktop 
computer workstation, anahdfe- 


V'*- - 




Keeping angina 
off the beat 

A potential advance in the 
under s tandin g «nd tr eatmen t of . 
urtery narrowing has been . 
announced by researchers funded . 
by the British Heart Foundation. 

Angina, the chest pains caused 
by an inadequate supply of Wood . 
to the heart, Is usually 
successfully treated by 
angioplasty, a procedure which 
widens narrowed arteries. But a 
third of patients suffer 
complications in the form of . 
renewed narrowing of the arteries 
or, more rarely, from the 
formation of blood dots. 

Research carried out by King’s 
College School of Medadne in 
Landau, which is doe to be 
published in tomorrow's Lancet, 
found that a blood-clotting 
mechanism is activated during . 
angioplasty. Arterial narrowing ; ‘ 
appears to stem from the . . 
excessive activity of growth 
factors contained in white blood 
cells called platelets. 

The researchers found that the 
platelet activity was inhibited in 
a small group of patients who 
received an infusion of a nitrate 
medicine called S-oitroso- 
giutathione GSNO before the 
angioplasty. It is thought to cause 
nitric oxide to be released by the . 
platelets, which acts as a brake 
cm their activity. Further work - . 
will now be undertaken. 

British Heart Foundation: OK. " 
tel 071 935 0185; fax 071 234 1868. 

Now hear this: 
clearer sound / 

Designing the acoustic systems 
for public buildings can be a 
hit-or-miss affair, leading to 
inaudible announcements Or the 
need for expensive modifications. 

Bose Corporation, an audio 
equipment manufacturer, has j 
developed a computer model 
which allows acoustic engineers 
to hear what public places will - I 


apparatus for the listener.' 

Bose: DS, tel 508 87$ 7330; fin 508. 
$736541 ... j 

Drug detection • 
on the spot . . _ 

An engynmfrased drug detectio n 
system which can spot minute 
quantities of heroin and morphine 
has been developed by the 
Institute of Biotechnology far • 
Cambridge. ] 

The system uses an acetyl 
esterase enzyme extracted from a 
bacterium to convert heroin to ' j 
morphine, after width the . 
morphine Is oxidised using 
morphine dehydrogenase, another 
enzyme. These reactions generate 
a product that can be detected - ‘‘ 

using an indicator. • ' 

- The system is part ofa ' 

hand-held, air- samp lin g Tnnnitnr 
dasignedfor nttiiespot- •' ■ : 
screening. TheBrltish Technology 

Group, which has filed intents an 
iheudcromrganism aqidtiie . 
enzymes, is seeking commercial *• 
partners.. - . ... 

British Technology Group: UK. fel ~ 
OH 403 6m far 071403 7586L . 

Easy access . 
to Internet / 

The surge of intierestln the 
Internet has prompted 
manufacturers to launch 
equipment designed to give 
novices easier access. / • 

- Compaq, which believes it is the 
first large co mputer eompany to : 
launch an IntemetHraadyfC, will 

supply all its Presario computers 
with Easynet software, winch 
provides Internet access, from 
December L Pricesnmge from 
£1,399 to £1^799. 

I Carrera Technology, a UK 
company, baa already launched a' 
range ofIntemet-readyPCs.A 
modem, Easynet software and a 
year’s subscription to the Internet 
adds an addfthmal £349 to the 
cost of the computer. . 

Compaq: UK, tel 081 333 300% fax 
081 332 3440. Carrera: UK, tel 071 
830 0436: fax, 081 830 0286. 


■ ' 

Ain 


. I 3 ?Y- r -V - ■ 

■ pv-fr-: 

;f i ■ " 

• I ?**..*> ... 

I £r\: . •- ;r 
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The Government 
of South Australia 


SALE OF THE ASSETS OF THE PIPELINES 
AUTHORITY OF SOUTH AUSTRALIA 


Expressions of interest an: bang sought for the pcn±Me of i 
tbc assets of the Pipelines Authority of Sooth Australia i 
CTASAT 

The assets of PASA include the Moomba-Adclaidc 
Gas Pipeline System and associated laterals, ' 
the Katnook Gas Pipeline System and the associated ' 
operating assets. PASA's gas merchant operation 
(responsible for the monopoly purchase and sale of 1 
wholesale gas in South Australia) win not be indoded in 
the sale. 

The assets generate substantial revenues and coaid represent ' 
a key strategic asset in the future with scope for cousidenblc • 
further development. j 

Completion of the sale will be subject to *» acceptable price ' 
being achieved and appropriate arra ng eme n ts being put in 1 
place regarding tbc future operations and ownership 1 
structure of tile assets. 1 

A key condition of the sale is the novation of new gas 1 
transportation atrangememx which will replace the existing 1 
arrangements between PA5A and its customers, the 1 
Electricity Trust of South Australia and the I 

South Australian Gas Company Limited , 1 

Australian or international praties who wish to consider 1 
acquiring a substantial part or ail of RASA'S assets are invited l 
to formally express their interest 
Expressions of interest, from principals only, 
should outline the legal status of the interested party. 

indudfatg ownership suwurc. copies of tbepraty’s last three 

annual repents, together with details concerning the nature 
and extent of its interest. In determining the short list. 

ThtaahmnaM do a not r a in or in otter at nmuttoo to nj bw c i flx : 
So«di Amnia aid tat hem pioirol wfcty Car ihcpopMem# Seem S7 pi 
*“ sccmiiei odd rmjLi Auwiiy. 


consideration will be given to a number of 
factors tadudmg: 

■ expertise and experience in operating' hydrocarbon 
pipeline transmission systems; 

• the fin a nc ial strength of the interested puny; 

■ the iatracsted parry's objectives in the assets; 

and 

* the benefits which the interested party coqld provide in 
the South Australian economy. 

Tbe Government reserves theright to sban-lUt any party at 
its sole discretion. 

Short-listed parties will be provided with a detailed 
Information Memorandum before the end of 
December 1 994, sobjea to the execution of a Confidentiality 
Agreement. It is the intention to select a preferred purehaser 
by the end of April 1995. 

Tbe sale will be bandied by the Government's Asset 
Management Task Fora. Enquiries should be directed to 
tbc Director; PASA Sale Project Team, Asset Manapmenl 
Tusk Force, Mr I Hiflyard. The TBjfc Force is betng assisted 
by Bain Capital Markets Ltd. a member of the 
Deutsche Bank Group. 

Expressions of interest are required to be lodged 
by 4 pm on Friday, 9 December 1994 with 

Dr RN Sexton 

Chairman, Asset Management Thsk Force 
Level 27, 91 King WiUhnn Street 
Adelaide South Australia 5000 
Telephone + (61 8) 204 8900 

International Facsimile + (61 8) 204 8940 
i/or w; the Gra a— of 



(OVM 


SMILES FROM AROUND THE WORLD 
TO TAKE YOU PLACES 


-A-t Gulf Air, our international spirit is 
best expressed in our staff. People from 
around the world who understand your 
culture and needs, perfectly. From the 
moment you make your reservations, 
you'll see that international spirit at 
work, in the smiles and personal 
attention you'll receive. And with our 
unique style of inflight hospitality, 
you 'll experience the highest standards 
of comfort and international service. 


We've come together flora around 
the world to carry you across a network 
that spans 4 continents. We also have 
more regional connections in the Gulf 
than any other airline, to offer you the 
option, of a flight that fits in perfectly 
with your personal schedule. 

Wherever you're from, wherever 
ikfiX you're going, on Gulf Air you'll always 
I jprf find friendly faces, and a smile that you 
recognise. 


SWANSEA 

BEST RESOURCE PACKAGE FOR 


© Skilled Labour Force 
fif Grants and Loans 
Low Overbead Costs 

Ef Excellent 

Communications 


Quality of Life 

& IBA’s and Enterprise Zone sites still available 

To: M.CHAEL Burns. Swansea Cento 


For further advertisement Infonnation on 
these surveys please contact: 


Patricia Surrldge 

in London 

Tel: (071) 8733426 Fax: (071) 8733428 




$*f\i 


i am iiihrt’.snui in 


FLYING WITH STYLE 


FT Surveys 


(J FOOD PARK 
O OFFICES 




t'-V/Vm*; a, i t / nnwusc- 


O Factories O hi-tec premises 

D warehouses Dauubtme UNITS 








/ 





Dr “sa«te^ 

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Her, in ^>r 

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‘"“" n ^ri h f .^Lir o, *a 1 

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:h r r ^Sl 

;*»nsjN PB n«r a 

- .oaSJljJ 1 "^ j 

Wifed 

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Easy access 
to Internet 


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r.\ : >•;?:« ar : cs ■ 

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THE PIPELINES 
I AUSTRALIA 


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FINANCIAL TIMES 


FRIDAY NOVEMBER 25 1994 

PEOPLE 


Tiphook finds a new 
finance director 


Tiphook - soon to be renamed 
Central Transport Rental 
Group - yesterday appointed 
Richard Raine as its new 
finance director - part of a 
spate of senior management 
changes by newly-appointed 
chairman Ian Clubb. 

Jn the past year, four of 
Tiphook’s five executive direc- 
tors have resigned, leaving 
only founder and chief execu- 
tive Robert Montague with any 
long-term knowledge of its 
sharply diminished business. 
Indeed. Raine is replacing 
Andrew Chandler, who lasted 
only one year. 

He will be moving into a 
fairly hot seat. The company 
sold off its largest operating 
business - container leasing - 
last March. It is facing a US 


Class Action over bond issues 
in the US in 1992/1993; it 
remains saddled with £512J5m 
of debt, and two operating 
businesses which both lost 
money last year. 

However. Raine is likely to 
get firm assistance Grom Clubb. 
the former finance director of 
BOC, who has taken a 
hands-on approach to Tiphook 
that belies his non-executive 
status. 

Raine, a chartered accoun- 
tant, was finance director of 
Bloomsbury Publishing before 
Us recent Dotation, and has 
worked for a variety of other 
companies, in cludin g building 
materials group Wickes. 

He is also being joined by a 
new company secretary. Simon 
Enoch, who previously worked 


at Kingfisher subsidiary B&Q. 

Further reshuffling among 
Tip hook's non-executive direc- 
tors is expected to follow, 
which could result in a com- 
plete turaround of the board 
(except for Montague) within a 
12 -month period. 

Kenneth Dick, the 81-year- 
old former Rothschild director, 
and Rupert Hambro. the 
urbane merchant banker who 
took Tiphook's chairmanship 
for a brief but turbulent 
period, are both expected to go. 

The future or Montague him- 
self has been in. question, as he 
faced bankruptcy charges, 
which, if successful, would dis- 
bar him from holding a direc- 
torship. 

The hearing will be held in 
Oxford on December 22 but 
Montague is pushing for an 
Individual Voluntary Arrange- 
ment. This would provide a 
structure for partial repayment 
of creditors, while he retained 
his job. Simon Davies 


Fairclough to 
quit BTR 

■ Bob Faircloth, the American 
credited with turning ro und 
Hawker Siddeley following its 
acquisition by BTR in 1991. is 
to retire as BTR’s chief operat- 
ing officer at the end of the 
year. He will become a non-ex- 
ecutive director from April. 

His post will be scrapped - 
which will leave BTR’s five 
regional chief executives to 
report direct to group chief 
executive Alan Jackson. 

Faircloth, 58, joined the 
board in 1988 and was pro- 
moted to the new position of 


chief operating officer to han- 
dle Hawker Siddeley. 

Faircloth, who plans to 
return to the US. was not semi 
as a successor to Jackson, who 
is also 58. David Wighton 

■ Stuart Bridges, previously a 
directin' of Henderson invest- 
ment Management, part of 
fund management group Hen- 
derson Administration, has 
been appointed to the board of 
John 1 . Jacobs, the fledgling 
conglomerate. 

For the past three years 
Bridges. 34. has been a fund 
manager at TR Property 
Investment Trust. Now he 
joins Michael Kingshott. 47, 
who in May quit as chief exec- 


utive of Sally UK, the ferry 
operator that he founded, to 
become managing director of 
John L Jacobs. 

According to Kingshott, he 
and Bridges “have already 
worked closely together on a 
number of transactions”. 
Bridges brings “an expertise in 
corporate finance and invest- 
ment management to Jacobs, 
together with a detailed know- 
ledge of the property sector,” 
Kingshott says. 

Jacobs still maintains an old- 
established firm of shipbrok- 
ers. but there are plans to turn 
it into a what Kingshott calls a 
“broadly-based shipping, trans- 
port and property group". Wil- 
liam Lewis 


Coleman: PW’s World Leader 


SO how does an unassuming 
accountant become a World 
Leader? In one easy step, judg- 
ing from 45-year-old Andrew 
Coleman, partner at Price 
Waterhouse in charge of the 
European capital markets 
group, who has just been pro- 
moted to the position of World 
Leader of a newly formed 
global capital markets and 
treasury group. 

The move comes in the con- 
text of the international 
accountancy firm’s rearrange- 
ment of its activities along 
industry rather than geo- 
graphic lines. “I guess the idea 
is to harness the power of indi- 
vidual batteries to get a real 
charge." says the new World 
Leader, “rather than allowing 


[regional centres] to do their 
own thing ." 

The title itself, which he inti- 
mates is not of his own 
choosing, is designed to distin- 
guish between those running 
individual “industry” divisions 
- himself and others - and the 
chai rman of the world finan- 
cial services practice. Thomas 
Macey. 

The regrouping, which 
involves treasury being 
brought into the capital mar- 
kets fold, means that Coleman 
goes from manag in g a division 
of between 40-50 people to one 
encompassing between 400 and 
500. His customers comprise 
both the panoply of banks 
offering capital market and 
treasury services and corpora- 


tions, the would-be buyers of 
those services. The group will 
help the banks originate and 
structure products and manage 
the risks on their books, while 
advising companies on the 
likes of how to put risk man- 
agement frameworks in place. 

A graduate of the London 
School of Economics, Coleman 
has been with PW his entire 
working life, increasingly spe- 
cialising on the capital mar- 
kets side. A partner for the 
past 12 years, he has become a 
well-known face in the deriva- 
tives field, largely on account 
of his membership of the work- 
ing group which in 1993 pro- 
duced the Group of Thirty 
Global Derivatives Study. 
Katharine Campbell 


Constructive 

careers 

■ Philip Marshall. 34. 
currently production director 
of MARSHALL'S concrete and 
stone products, will succeed 
Keith Marshall os chief 
executive from next March 
following his father’s 
retirement. 

■ Rod Peck has been 
promoted to regional director 
for BICKERTON in Oxford. 

■ Peter Mantle has been 
appointed managing partner of 
the London office of JONES 
LANG WOOTTON. 

■ Helen Stone, formerly md of 
WS Atkins Structural 
Engineering, has been 
appointed md of CARL BRO 
Building. 

■ Rob Ewen. formerly 
divisional director of Boris 
Program Management, has 
been appointed md of TBV 
Schal, part of TARMAC 
Professional Services. 

■ John Morgan has been 
appointed chief executive. Jade 
Lovell marketing director, and 
Alistair Sloan finance director, 
of MORGAN SINDALL. 

■ James Wales, formerly md 
of Wates Integra, has been 
appointed marketing director 
of WATES Construction. 

■ Philip Reeder, chief 
executive of Expamet Building 
Products and Expamet 
Industrial, has been appointed 
to the board of EXPAMET 
INTERNATIONAL. 

■ David Lee. who is 
recovering from a stroke he 
suffered in April, has retired 
from his directorships with the 
MAUN SELL Group, but 
continues to act as a 
consultant 

■ Roy Adams (below), who 
has recently been heading 
BDP's joint venture in Paris 
with Groupe 6 and before that 
was London office c hairman 
for four years, has been 
appointed chief executive 
following the resignation of 
Roger Horn because of ill 
health. 



TO SAVE THE 
RAINFOREST WE 
PROVIDE TREES 
TO CHOP DOWN. 

By helping people 

in the muforrn co pins nets. WWF 
tst nothing to toUe tome of 
the proWera thx cuse ikfetMum. 

Where uen ae .hoppcJ 
iLfim for firrwoj. u.-e help plan fru 
growing saplings as i renewable 
swute oi'tud TJm n pvorabri; 
valuable in the Unpenetrable Fares. 

Upuxhi. wfarrr inAgennut 
hinheuafe uke up 10 run hundred 
years to mirmc. 

The -Uatiuett l&j trees WWF gne 
to the local tillage are 
ready for harvrmng tn only hie yean. 
Where trees are chopped 
down lor uk in roranucrion, as m 
Pakistan, we tuppk 
uu growing local pine species. 
The idea behind 

all our work n that rainfotcBs oseJ 
wnely can be used forever. 

Write to the Membership Officer 



, f f.. . 

.a- 3 .. • ..... 


D 

0 

N. 

f 

T 

C 

R 

A 

C 

K 

U 

N 

D 

E 

R 

pressure! 


*■ . sj w ■ v. . 



TAGHeuer 

swiss made since iatc 


FINANCIAL TIMES 

EAST EUROPEAN MARKETS 


Reliable, comprehensive and objective - East European Markets, the twice monthly 
newsletter covering the rapidly changing emerging markets of Central and Eastern Europe 
including Russia and the rest of the former Soviet Union. 

To receive a FREE sample copy contact: 

Simi Bansal. Financial Times Newsletters. Marketing Depan mem. Third Floor. Number One Southwark Bridge. 

London SE1 9HL. England. Tel: 1+44 7|) 873 3795 Fax: |+44 71 1 873 3935 


FT 


FINANCIAL TIMES 

Newsletters 

The informarioo you provide will be held by us and may be used by other select quality companies for mailing list purposes. 


SENIOR CREDIT OFFICERS/ANALYSTS 

c£70K + Excellent Benefits 

Our client, a leading City and Worldwide institution, is looking for an 
exceptional individual who will provide in-depth analytical reports on the 
banking sector. This position requires heavy duty research and the right 

person will either be a seasoned banker with approximately 10 years experience 

as a credit/lending officer, or will come from a regulatory body. 

The person should have excellent communication and written skills, coupled 
with fluency in French or German 

Please send your c.v. in strictest confidence to Michele MacPherson at the address 
betow. 

Jonathan Wren & Co. Limited, Financial Recruitment Co nsu lta nt s 
No. 1 New Street, London ECZM 4TP TeL 071-623 1266 Fax. 071-626 5259 


JONATHAN WREN EXECUTIVE 


Coopers 

SLybrand 


General Manager for an established 
CARIBBEAN INTERNATIONAL BANKING GROUP 


An established Banking and Trust Group located In the Caribbean is 
looking for an experienced and creative person to fill the post of 
General Manager. The successful applicant would combine a proven 
record In Banking and management of ancillary companies. 
Experience in foe Caribbean and sensitivity to the Caribbean culture 
would be an advantage. The General Manager wiH report to a Board 
of Directors and will be required to motivate a small management 
team and to create and actively promote the Banking group's new 
and existing services within its home territory and abroad. 

Direct written appRcatkxts only will be considered. Applications must 
include a r6sum6 of qualifications and previous work experience and 
be forwarded by December 5, 1994 to: 

Manager. Executive Recruitment, Coopers & Lybrand Associates 
Limited, PO Box HM 1171, HamSton, Bermuda HM EX. 

Telephone +1 (809) 295-2000, fax +1 (809) 295-1242. 

Rel/94/0265/LB 


Coopers & Lybrand 
Associates limited 


CaopM « LjMfld EMnan* 


Competitive 
Expatriate Packages 


Africa, especially 
East & Central 


This banking group has grown impressively and has an asset base of 
c$1 bn with operations in 20 African countries. It b a substantial 
competitor in its chosen market, wtth a concentration in retail and 
commercial credit and trade finance. It curently seeks to recruit 
experienced bankers in the fattowing roles far some of its constituent 
banks. 


Managing Directors 
General Managers 

Appointees win have overal 
respona&ary tor aB operations ot 
specific sutektiaries, and wfl be 
eiqiectBd to achieve set targets in 
terms of business growth and 
pro U t a b i ty. A rrininxm at 10 yeere 
senior management openerae is 
required. 


Branch Managers 
Managers of Advances/ 
Operations/! nspection 

Applicants should be 
professionally qualified with at 
least 5 years experience at a 
senior level in the respective 
field. Appointees wtli become 
responsible for a branch or 
department at a specific 
subsidiary. 


Previous work experience In Africa may be an advantage for any ot these 
positions. Fluency tn French as welt as English would be helpful but is 
not essential. All applcarts should have proven staff management skfis. 

Please reply with CV. covering letter and names of two referees to: 

Mrs Vivienne Buddand 
PH Recruitment 

3 Shortiands, Hammersmith. London WB 8AL 


BRITISH AEROSPACE PENSION FUND 

ASSISTANT FUND MANAGER - UK EQUITIES 
Attractive Salary plus Benefits 

We are a small team based in the City managing total assets of over £2Vz bn. 

We are looking for someone to make a significant contribution to the 
successful management of almost £1 Va bn of UK equities. 

The successful candidate is likely to be a graduate in his or her 20s, with an 
analytical background and at least two years relevant experience. 

We offer a highly competitive package and the opportunity for a young 
professional to develop skills in an informal but challenging environment. 

Please write, with a full CV including current salary to: 

John Gibbon, Managing Director 

British Aerospace 

Pension Funds Investment Management 

101 Cannon Street, London EC4N 5AD 


HEAD OF COMPLIANCE 


City 


c£65,000 + benefits 


London-based 
service company to 

independent oil trading company 

seeks 

Deputy Finance Manager 

Requirements: 

f gye yearn' experience within the trade finance area of a recognised oil and 
M, H?n ^nmncinc bank Ability lo construct fall range of banking instruments including all 
commooiiy mentaf y ^ ] e tj e rs of credit and guarantees. Ability to analyse 

relevant terms lroasactions Fully conversant with current banking interpretation of latest 
pre-export nna ^ Networ fc of contacts within oil financing banks. Experience of working in 
versions of l '“J' [TvironIT]en t, controlling/monitoring credit exposure. Languages: fluent in English 
oil trading eiw French, other languages an advantage. 

Salary: up to £30,000 a.a.e. 

retinas in writing, enclosing fall CV should be sent to Box A5006, 

^ SoiSwaA Bridge, London SE1 9HL 


O ur client is one of the leading UK. investment management groups with very substantial funds under management 
As a direct result of their consistent growth and ambitious plans for global expansion, they have identified the need 
for an appropriately qualified professional to manage their UK compliance team and supervise their compliance 
operations abroad. 

The role will report to the Group Company Secretary and will be responsible for monitoring and controlling the Group’s 
compliance function. The in cumb ent will play a key role within the company and will be expected to acquire a full 
understanding of the business and to work closely with senior management He/She will be responsible for the Group’s 
adherence to best practice as regulations and legislation change. 

Ideally, candidates will be aged between 30 and 45, and have a base knowledge of the financial services industry. 
Candidates will have to demonstrate proven management skills, and possess the drive and ability to progress in line with 
the anticipated growth of the Group. 

Remuneration and career prospects are excellent for die ambitious candidate who can demonstrate genuine 
commitment to the company’s growth both in the UK and globally. Interested candidates should send their 
curriculum vitae, including daytime telephone number and present remuneration package, to Carol Jardine, 

Whitney Selection, 17 Buckingham Gate, London SW1E 6LB, quoting WS/1442. 


WHITNEY 



SELECTION 








10 



MANAGEMENT 


FINANCIAL TIMES FRIDAY NOVBMBE^25_.^_ 


... 


A year ago this month a 
group of Scandinavian 
middle managers from 
Electrolux, the Swedish 
household appliances multinational, 
spent several days at a conference 
centre In Sigtuna, a town north of 
Stockholm. Officially, their purpose 
was to learn new marketing skills. 

But the debate kept turning to a 
much deeper problem: how to 
bridge the “functional" barriers 
that still bedevil the company, sep- 
arating its sales and marketing 
organisation from its product devel- 
opment and factory units - what 
Electrolux calls the “industrial" 
side of the organisation. 

This gulf has made the company 
slower, less innovative and less 
cost-efficient than it should be, 
hampering Its ability to beat arch- 
rivals such as Germany’s Bosch- 
Siemens and America’s Whirlpool- 
Philips. It is still suffering from this 
problem, in spite of the improved 
profits trend It reported this month. 

In one of the conference coffee 
breaks at Sigtuna, a couple of the 
managers sketched a diagram on 
the whiteboard entitled "how things 
should be done". In place of the 
company's current structure, they 
drew what they called an “inte- 
grated” organisation, in which 
sales, marketing and “industrial" 
were all merged into a set of inter- 
national product divisions, each 
with a full range of functional 
responsibilities. 

Electrolux's top management also 
feels keenly about the urgent need 
to integrate the two sides of the 
organisation. “It is an absolute 
necessity," says Leif Johansson, 
president of the group since 1991, 
when Anders Scharp moved up to 
the chairmanship. “It is the only 
way to achieve the necessary com- 
petitive speed." 

But in recent months Johansson 
has made It clear that he considers 
a structural merger impractical. 
Instead, he is trying to achieve the 
integration by various other means, 
both “hard" and “soft". 

Electrolux has thereby declared 
itself a dissident from a powerful 
movement that is emerging among 
multinational companies in indus- 
tries as diverse as engineering, 
information technology and chemi- 
cals. In a quest to increase competi- 
tive speed, and cut complexity and 
costs, most companies are stream- 
lining their organisations by shift- 
ing the internal balance of responsi- 
bility and power sharply towards 
their international product divi- 
sions or “lines of business". 

This is being done at the expense 
of the other dimensions of the com- 
plex “matrix" organisations which 
these companies used to operate. 
The other two dimensions were 
functional management, such as 
technology and production; and geo- 
graphic management (either 
national or regional), which in 


Electrolux is integrating, with a difference, as it tries to 
become more competitive, writes Christopher Lorenz 

How to bridge 
functional gaps 



Desperately seeking integration: Leif Johansson (left) and Anders Scharp believe such a move to be an absolute necessity 


most multinationals has been in 
charge of sales and marketing. 

In IT. IBM has been moving 
steadily in this direction since Lou 
Gerstner took over as chairman 
early last year. The American 
giant's latest step this summer pro- 
voked the defection of the German 
head of IBM Europe, disgruntled 
over the latest erosion of his own 
power, and that of his managers. 

In chemicals, Ciba and ICI are 
just two of a cluster of groups 
which have taken similar steps, 
again not without controversy. 

Only a minority of companies in 
any industry is following the lead 
set by ABB, the Swedish-Swiss engi- 
neering giant in maintaining a 
matrix in which the national sub- 
sidiaries retain considerable power 
over both sales and marketing. 

In moving so strongly to divi- 
sional structures, most other com- 
panies are running a twofold risk of 
swinging the pendulum too far 
towards divisional management: 
loss of touch with national market 
differences; and demoralisation of 
the very managers on whom that 
responsiveness depends. 


Electrolux is well aware of this 
risk. So, in the marketing and sales 
side of its European organisation, it 
is retaining a strong element of 
national management, in practice 
though not in name. 

When it abolished its powerful 
country managers in Europe in late 
1992. it gave about half their respon- 
sibilities to three pan- European 
“industrial" divisions, which now 
control product development and 
manufacture. Two. for "cold" and 
“hot" products, are based in Stock- 
holm. The “wet" one, covering 
washing machines and dish- 
washers. is - appropriately - based 
near Venice. 

B ut instead of transferring the 
country managers’ power 
over national marketing to 
the new divisions, these were given 
- as at Whirpool - to a central 
marketing unit based In Italy. 
Much-expanded under a top man- 
ager from Stockholm, Christer For 
strom, this unit now controls all 
European marketing and sales 
through brand “portfolio managers” 
in each country or sub-region. 


A number of Electrolux managers 
felt this should be only an interim 
step, and that a full-blown merger 
of the marketing and industrial 
sides should follow. Hence last 
year's backchat at Sigtuna. 

At top management level, “we 
talked a lot about merging the mar- 
keting and industrial sides of the 
organisation, but decided not to 
because it would actually cause 
much greater complications than 
what we have now - it would recre- 
ate a very complex matrix”, 
explains Aldo Burello, head of the 
“wet" products division. 

The reason for this is that Elec- 
trolux runs four different brands in 
most countries. It is enough of a 
challenge for the European market- 
ing unit to coordinate them, with- 
out adding all the difficulties that 
would arise if each product division 
had to run four brands. “It would 
mess up our account management 
completely.” says Johansson. 

Stressing the need for a unitary 
marketing organisation, Halvar 
Jonzon, brand portfolio manager for 
Scandinavia, says “trade customers 
expect you to be able to handle the 


full range of products from all three 
divisions - cold, hot and wet - not 
only by brand, but also by ail 
brands". 

These barriers to farther struc- 
tural Integration give an added 
urgency to the wide range of other 
mechanisms which Johansson and 
his team have unleashed over the 
past year. They deal partly with 
new processes, procedures and 
systems, but also with factors such 
as people's sense of sharing a com- 
mon set of goals, and thrfr w iTling . 
ness to co-operate with each other 
regardless of their spe cialisms and 
formal reporting 'Bm« “Integration, 
is very much a question of people's 
mindsets,” says Johansson. 

The initiatives represent an even 
greater challenge for Electrolux 

than for most wimpanlpa 

This is because of the fact, now 
recognised throughout the com- 
pany, that Electrolux's long era of 
growth by acquisition is at an end 
after the takeovers a decade ago of 
Zanussi in Italy and White (Frigi- 
daire) in the US, plus AEG's appli- 
ance arm this autumn. As a result, 
many of its past management atti- 
tudes, shills and practices are in 
need of urgent change. “In organic 
growth, the core compet e ncies you 
need are entirely different from dur- 
ing restructuring," says Forstrom. 

Among the new processes, two 
are particularly ambitious. The first 
constitutes classic “re-engineering”: 
a comprehensive “order-to- pay- 
ment” process which will span vir- 
tually thw whole of ydws, manufac- 
turing, logistics and payments 
operations across E ur o p e. 

Ulf Sodergren, who heads the new 
process, claims the first pilot pro- 
jects are cutting order-to-delivery 
times by up to 80 per cent, and 

ha Ti rin g stock levels. 

The second initiative is a mecha- 
nism which many re-engineering- 
minded rampanifts are «ignflTly fail. 
ing to introduce: an integrated 
reporting system. For the first time 
in Electrolux, this measures cross- 
border financial performance by 
product division and brand. In pro- 
cess terms, “we're starting to mea- 
sure end-to-end flows", says Johann 
Bygge, the group’s controller. 

Together with other new inte- 
grated information, measurement 
and reward systems, this will do 
much more than just stop the tradi- 
tional ha gpWwff over internal trans- 
fer prices. 

It will also anil each manag er's 

tendency to optimise his or tier own 
unit’s performance to the detriment 
of the overall European division, 
brand or process of which it forms 
part “But this is not happening 
overnight - it needs a long educa- 
tion process,” says Bygge. 

“Systems thinking " of this kind is 
hard to breed in any company. For 
one with Electrolux's strong func- 
tional, national and decentralised 
traditions, it will be extra tough. 


Carol Cooper looks at how best lot 
survive the Christmas festivities ^ 


Thanks to 
IfU - classical-.. 

experiments 
conducted by Holy 
:(• i / Boman Emperor - 

Frederick IE, it has 
v|/y been known since . 

7 the 13ih century 

— ^ ' that exercise . 

inhibits digestion; 

Frederick made twoslaves eat a 
big meaL Afterwards one rested 
while the other was made to . 
exercise vigorously. Both were 
then executed, which showed that 
the one who had exercised stiH 
had a fall stomach. 

More research to this area ; 
seems unnecessary. - . .s'- 

As the festive season 
approaches, more and more 
employees will get together and . 
indulge away from the office.. One 
“Christmas darner” may be fun, 
but there are often many such 
occasions every year. 

Over -indulging in food has 
obvious consequences, and there 
can be more immediate effects, , 
especially if the food is different 
from one’s usual diet Quantity 
matters, too. In company one 
tends to eat when not hungry,. 
gnri research c onfir ms that tiw 
amount consumed increases with 
the number of people at table. 

In a business context this ' 
matters most at lunchtime. The 
early afternoon is a soporific time 
of day anyway, and since the . 
normal response to a heavy meal 
is to sleep it off, a valiant ; 
struggle to get back to work may 
result in little getting done. 

A large lunch also potentiates 
the depressant effect of alcohol. : 
After a heavy meal, a short walk 
in the fresh air can help but, as 
Frederick’s experiments showed, 
brisk exercise, such as going to 

tho gym nr mnrmig in mtrh a . 

train, should be avoided. 

Leaving aside its long-term - 
risks, alcohol has weff- . 
documented effects on attitudes, 
concentration, reaction times and 
co-ordination. The risk of road .. 
traffic accidents is doubled by a 
blood alcohol concentration (BAG) 
of 80 mg per nrffffli tre and 
increases more or less 
exponentially at levels beyond 
tills. Those convicted of driving 
with a BAG of 200 mg per 
millilitre are considered high-risk 


^Oriecau often tell - if only wiffi 
hindsight - how many drinks wifl 
loosen, tohib iti^ and rEsnlt iii • 
saying or doing something . ' 


BAG to a certain level BA G ; 
depends not only on the quantity 
imbibed but on personal 
c haracter istics such as. size, age, 
ar| d the stete of one's liver. - 
About 90 per cent of alcohol - 


enzymes into acetaldehyde,, with 


sweat and urine: Acetaldehyde is- 
tiun' converted into' carbon • 
dioxide and water, and all one : 

win be reasonably sure about is - 
that the normal adult takes about 
an hour, to eliminate each unit of- 
a l^pi ini (one unit -corresponds 
roughly to one small measure of •• 
spirits, one . glass of wine, or half 
a pint of lager)* 

A BAG of 80 Jug per nent is 
often known as the "legal limit” 
because driving with a level 
above this is a statutory offence.. 
But a BAC as low as 30mg per 
millilitre can impair driving 
gtiTia, and within the Road 
Traffic Act there is a legal nicety 
worth knowing about. Section 4 
' warns that a person who when 
driving or.attempting to drive is 
unfit through drink' or drugs, is 
guilty of an offence. 

Wtifa care, ft is possible to enter 
Into ffie spirit of the festivities 
- without adverse effects. Eating 
with drinks can help delay 
absorption of alcohoL Diluting 
spirits (or even wine) and 
alternating alcohol drinks with . . 
mineral water are other ways of 
reducing intake. 

The usual pub measure is 1/B 

giTl in En gland and Wales, hut ‘ 
.drinks poured outside pubs can be 
more generous. If,- as In the case - 
of pondies, you are unsure of how 
much or even what you're 
drinking, be cautions and stick to 
something you know. 

. 'Extra-strength lager contains, 
nearly three times as much 
alcohol as ordinary lager, while, 
low-alcohol drinks vary 
enormously. Borne are almost - 
alcohol-free; others are up to half 
the strength of the average table 
wine. If you're only thirsty, have 
soft drinks. 


BUSINESSES FOR SALE 


PADDY HOPKIRK LIMITED 

IN ADMINISTRATION 

Offers are invited for the assets and business of this car accessory manufacturer 
• Annual turnover of business is in excess of £6 million 
• Blue Chip customer base • Market leading Brand Name 
• Option on fully equipped Freehold Premises 

Enquiries should be addressed to Paul McGuire at— 

Leonard Curtis & Partners, Chartered Accountants 

Peter House, Oxford Street, Manchester Ml 5AB 
Tel: 061 236 1955 Fax: 061 228 1929 


CD-ROM 

PimW COMPANY 

FBI SALE 

tor 11 Ufa 8iX + a umiaks 
ffdtfeh Hnfai fttottah agag: 

SHADE & 30 hi Raymond 

ARCHER 

Pasadena, 
California 9n03 

Jet 318-584-1 L50 
be 81 8-584- 1248 


FOR SALE BY PRIVATE TREATY 
complete rteg rated lace making facSty, 
sunny office and factory effects at tanner 
Aitawn Lace Factory. Co. Clare. Fergis 
Slattery "W: 010 353 i 6686444 


Mahiil Environmental Services 

The Receivers of Beckenham Ductwork Limited invite 
offers to purchase the ductwork manufacturing facilities 
of the company's MahiU Enwon mental Services 
Division located in Stourbridge. West Midlands. 

The Receivers of the following related design companies 
also invite offers for the businesses and assets of: 

• Air Technology and Acoustics Limited 

- noise control systems. 

• Induction Ah- Systems Limited 

- heating, ventJabon and as coreStjorung systems. 

• Displacement Air Systems Limited 

- displacement cooling systems. 

For further information please contact: 

SUE Hancock at Price Waterhouse, Bir min g h am. 
Teh 021 200 3000. Fax: 021 200 2464. 


Price ff&terhouse 

Pnce Waterhouse is authoneed by the hstture of Chartered 
Accountants m Engand aid Wales to carry on Rived ment busness 

” CORRECTION OF INVITATION TO TENDER 
FOR THE HIGHEST BID FOR THE PURCHASE 
OF THE GROUPS OF ASSETS OF 
“METALLURGIW HALYPS SA” OF ATHENS GREECE 

The above mentioned (nvuatlon to Dander tor the Highest Bid tor the Purchase 
of the groups of Assets of ■METALLURGIKJ HALYPS SA" which was 
published in the same newspaper on 4tfi and Stfr of November 1994 Is hereby 
corrected concerning the brief description of the 2nd of the groups of assets 
as follows: 

2. OTHER ASSETS. These indude the fadowing; 

a. A storage buUdtng of 1,500 m* and the 'A pro-lrxfivfeo of other 2 storage 
bufldrrtgs of 1,965 and 1,000 rrf, respectively, which are “separate vertical 
pro-intflviso p roperties" standing on a plot of land of 7,960 m* located in the 

Local Authority of N. Menement. ThessaJonDd. 

b. Agricultural plot Of land amounting to 12.875 rrf at Simandra Of Local 
Authorities of N. Moudanfa, ChaJWdUd, and 

c. Agricultural plot of land amounting to 4,312 rtf in the same area as plot (b). 


ON-LINE BUSINESS FOR SALE 

PC on-line information ;ind transaction business for sale 
6001) BUSINESS SUBSC RIBERS, 
wide range of services and well known brand name. 
Write to: Box 1)3553, I- inanciitl Times. 

One Southwark Bridge. London SCI 9HL 


GREEK EXPORTS S A. 

(Founded and owned by ETBA SA.) 

INVITATION FOR EXPRESSIONS OF INTEREST IN 
PURCHASING THE ASSETS OF AGRO-INDUSTRIAL OF 
F1ERIA - IGE.VL) SA. NOW UNDER SPECIAL LIQUIDATION 
CREEK EXPORTS SA. established in Athens al 17 PjncpBlim».m Sued, in ils 
capacity as special liquidator of AGRO-INDUSTRIAL OF PIER LA - iGILVJ.j 5 A 
(in accordance whh Decision No. 3210/1992 of the Thessaloniki Court of AppeaL 
by which GE.VI. 5 A has ben placed under special liquidation) and within [be 
framework of ancle 46a or Law 1892/90. as supplemented by article 14 of 
Law 2000/9 1 and complemented by artkfc 53 of Lau- 2224,94 combined wirfi 
Decision No. 2407(1994 of Ur Thessaloniki Court of Appeal 

INVITES 

interested buyers to express (heir ioicresi in purchasing the toal asscis of GE.V1 
SA now under special liquidation, by submitting a non-binding, written expression 
of interest within twenty (20l days from today. 

AGRO-INDUSTRIAL OF P1ERIA (GE.VL) SA was rounded in 1976 iGuvt. 
Gazette No. 2I46 I 9/T76) and set up a modern itidusrrul unit in the Mcihum region 
of Piena to processing, ca nn i ng and fre ezi ng fruit and vegetables In parallel, the 
company maintains a fruit sorting anil in ibe Nafplion area. 

The company's industrial complex is situated on self-owned land ‘*8.444 rn in area 
with a boih-over ana of 27,039 nr 1 on Ihc old Thessaloniki. Katerilii naliucial ruad. 
GE.V1. SA's assets far sale can he sold as a whale or as the fanmoiuJ units listed 
herebetow: 

a) Karerini industrial complex 

b) Fruit sorting and packing factory in the Nafphon area cm a plot of land 4jSm m- 
{buih-over area 2.112 nr’L 

cl A rwo-storcy building in ThosakHiild (22 Aeaopou Sued and Proanihcosi each 
floor with an area of 179.47 nr and a basement l3l.fiSnr in area. 

Details concerning toe public auction 

Prospective buyers, after signing a written un d ertaking of coqfidcoiialii;. may 
receive the Offering Memorandum from the offices of the liquidating company 
They will aho have a cc e ss to any other information they nay seek and may visit the 
premises of the company under liquidation. 

The Offering Memorandum will describe m detail tiw total assets of GE. VI. SA 
for sale and any other informal ion considered useful far the prospective buyer. 

The announcement of the public auction will he published within the prescribed 
time limbs ami in the same newspapers. 

For the Offering Memorandum any further details or information please apply ur 

1. af Athens * GREEK EXPORTS SA. 17 PteKpIsrimiou Street. (1st floor) 

Tel: +50-I-324JI II Fax: +30-1-323.9185. 
b) Thessaloniki - 7 Nikis Ave. TcL +30-31 -278^23 & +30-31 -239 J7I 

2. The bend office of ETBA SA Holdings Department. 87 Syngrou Avenue |Ath 
floor), Athens, Greece. Teh +30-1-929.461 1 and 929.4M3. 


NEWSLETTER TITLES FOR SALE 

Established publication covering IT & Marketing for 
the financial services sector are available. 

Please write to: 

Box R3560, Financial Tiros. 

One Southwark Bridge. London SE 1 9HL 


CALL FOR EXPRESSION OF INTEREST 
FOR THE PURCHASE OF THE GROUPS OF ASSETS 
OF 

LN. STASINOPOULOS AJLBJE 
of Athens, Greece 

“ETHNlKi KEPHALEOU SA Administration of Assets and Liabilities”, of 
1 Skoulcnlou Sic, Athens, Greece, in its capacity as Liquidator of “ LN. 
STASINOPOULOS AJLBJT, ■ Company with its registered office in j 
Athens, Greece (the “Company"), presently under special liquidation 
according to the provisions of Article 46a of Law 1892/1990 by virtue of 
Decision 5069/94 of the Athens Coon of AppeaL invites intmeszed parties to 
submit within twenty (20) days from the publication of tins Notice, non- 
binding written Expressions of Interest for the purchase of one or both of the 
groups of assets described below. 

BRIEF INFORMATION 

The Company was established in 1953. In 1978 it became bankrupt and on 
3.1 1.94 it was placed under special liquidation according to the provisions of 
article 46a of Law 1892/1990. Its objects included the production of pipes 
and racial constructions. 

GROUPS OF ASSETS OFFERED FOR SALE 

1. A factory, standing on a plot of 13.064 sq.m, located at “Vjono” or 
“Hamosicma" in the Moschato Mu nd parity between the following streets: 
Levidi, Xyno, Handri and 245 Piraeus Str. The plant's machinery and 
mechanical equipment, as well as the Company's trade name are also 
included in this group of assets. 

2. A factory, standing on a plot of 3,438 sqjn. also located in the Moschato 
Municipality, between Lcfkas, Handri and Cyprus streets, together with the 
machinery and mechanical equipment contained in iL 

It should be notud that both of the above factories are being rented by third 
parties since 1981. 

SALE PROCEDURE 

The sale of ibe assets of the Company shall take place by way of Public 
Auction in accordance with the Provisions of Article 46o of Law 1892/1994, 
os supplemented by art. 14 of Law 2000/1991 and subsequently amended and 
ihc terms set oui in the Coll for Tenders for the purchase of the above assets, 
lo be published in the Greek and foreign press on the dates provided by the 
law. 

SUBMISSION OF EXPRESSIONS OF INTEREST - 
OFFERING MEMORANDUM - INFORMATION 

Fur the submission of Expressions if Interest, as well as in order to obtain a 
copy of the Offering Memorandum for each of the above groups of assets, 

please contact the Liquidator “ETHNIK1 KEPHALEOU S.A. 
Administration of Assets and Liabilities" 1 Skoulcnou Sir. 105 61 Athens 
Greece. Tel.-30-l-323.14.S4-7. fox: +30-1-321.79.05 (attention Mis. Marika 
Frangakis) or Ihc Liquidator’s agent. Mr. George Grammatikas. I Eoonoouu 
Str. 106 S3 Athens, Tel.t 30-1 -330.08.74 






Appear in ihe Financial Times 
on Tuesdays, Fridays and Saturdays. 

For further information or to advertise 
in this section please contact 

Karl Loynton on +44 71 873 4780 or 
Lesley Sumner on +44 71 873 3308 


FINANCIAL TIMES 


FT CONFERENCES 

DOING BUSINESS WITH SPAIN 
Mackid, 23 & 24 November 1994 

The FTs *94 conference, to be arranged with Expansion and Actuefidad 
EcorWWnica, wffl take as ite theme ’Spain Competing In Europe', focusing an 
economic recovery, competttivily end IHreratelng markets. D. Narcn Seim l 
Sena. Deputy Prime Minister of Spain has Joined the distinguished panel of 
speakers to give the dosing address. 

FINANCIAL REPORTING IN THE UK 
London, 28 November 1994 

This year's conference mB provide essential guidance for preparers and users 
of accounts on Interpreting the complexities of exteMng and emerging ASS 
standards. Issues to be covered wil Indude: Accounting for off-balance sheet 
finance; merger and acquisition accounting; valuing intangibles and brands; 
accounting for derivatives. Speakers Include: Sir Sydney Upworth dc. 
Financial Reporting Council; Mr Chris Swinson, BOO Stay Hayward; Mr Nigel 
V Turnbull, The Rank Organisation pic; Mr John H Kellaa, KPMG Peat 
Marwick; Mr David H Calms, International Accounting Standards Comrrittlee; 
Miss Mary Keegan. Price Waterhouse In Europe; Mr Peter A Hotgate. Coopers 
& Lybrand; Mr Michael Birkin, Intertirand Group pic; Mr Michael 
Renshall j=inandal Reporting Review Panel; Mr Ken WBd, Touche Ross & Col 

VENTURE FORUM EUROPE *94 
London 1 & 2 December 1994 

Arranged Jowly by the Financial Times and Venture Economics, this annual 

meeting brings together recognised experts from Europe and North America to 

discuss key Issues fating the industry identify the investment strategies mid 
assess how InstSutlonal investors now view venture capital as an asset dess. 

WORLD TELECOMMUNICATIONS 
London, 6 & 7 December 1994 

Trends chan ging the shape of the telecommunications industry, inducting 
International alliances, the construction of ■superhighways' and the regutatfon 
ofwimpBtliion will be addressed by Dr Martin Bangemann, Europeaii 
Commission: Dr Michael Nelson, The US Office of Science and Technotanr 
Policy Mr Don Cruickshank, Office of Telecommunications (OFTEU: Mr 
Ronald T LeMay. Sprint Long Distance Division; S*r lain Vail once, BT. 

THE P OL ISH HIGHWAY PROGRAMME - OPPORTUNTTIE*, erw ■ • 
PRIVATE FINANCE AND INVESTMENT OPPORnjNmESFOR v 
Warsaw, 12 & 13 December 1994 

Thte Financial Times conference, arranged In association with The Institution 
the commoncemont of ttie fortficovTdag SOfon 
l^griway Construction Programme with this Wgtvisvel forum to expiorethe key 
chaJJengM - financial, technical, managerial and operatkjnalVfo^oLintfod 

ueeradzkl. Polish Minister of Transport and Maritime Economv Mr Rvrowd 

MIMr M i nlSt0r 01 Rnanc * Mr AnSlP^M^S’ 

=«SSs53SSS- 

K'JaKraSSss 

IN ™ E 

h Wotechaotogy.and ' 

raising the finance t&JCU5S chaItenfla ? * - 

Include: Carl Speakers wS 

Jurgen Drews, Hoffmann-L a Roc^c ^n?^?? ati0, I; . ProfeB8 ^ ** 
Roussel Udaf; Mr Strachan Heooeii cr' J’"* 83 ® 0 ' En »t-Gunler Afbnfc 
Agency; Dr Alan G WaltoT Evalua,k > fr 

SmUhKIIne Beecham Part ™^ : Dr John KeBer, 

hwovabona Pte Ltd. ** Te<,h Yon 9 Sea, Singapore J3fr 

ITS IfttERNA^ UK PROGRAMME and 

London, 8 February 1985 

w3l 1?^*“** Pratayfonejafc 

conference win also 

tB * WOJT 'municaLons. wkh n«wniiniiinni , and coo ’PaMion in International 
Co™***, the US PMM1 Commuftotkml 

the Swedish National Post and Telecom ^^ amniUT1,cat ' t5ns Directorate 

Conferences, PO Box, 


€IDh 


,p ARts 






•I 




% 


FINANCIAL. TIMES FRIDAY NOVEMBER 25 1994 


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ARTS 


T he Brils are the talk of 
the town. Not Just on 
Broadway - where 
Andrew Lloyd Webber's 
Sunset Boulevard h*« 
opened to respectable reviews, 
nanny on the strength of Glenn 
Close’s performance as Norma Bes- 
nu>od. Not just in the art world, 
which has been saluting two influ- 
ential British potters, Lade Rie 
and Hans Coper, to their first 
major American show at the Metro- 
politan Museum. Nor has the talk 
been confined to Manhattan’s many 
musical Anglophiles, who have 
been treated over the past two 
weeks to well-prepared perfor- 
mances of Nicholas Maw’s Odyssey 
and Rutland Bo ugh ton’s The 
Immortal Hour. 

No, the real buzz has centred on 
the New York debuts of Bryn Terfel 
and Graham Vide, Terfel, who rang 
in Le nozze di Figaro at the Metro- 
politan Opera and gave a recital 
with James Levine, was an over- 
night sensation. There have been 
chat-show appearances, a profile in 
Tone magazine and a spread in the 
New York Times, which crowned 
hta “the next Wotan”. The bass- 
baritone from rural north Wales, 
still in his 20s, seemed unspoilt by 
riches and stardom - which only 
added to the charm of a story tai- 
lor-made for the American public. 

Meanwhile, Vick’s uproariously 
sophisticated staging of Shost- 


The British take the Met by storm 

New York thrills to Graham Vick’s Shostakovich and Bryn Terfel's voice, writes Andrew Clark 


akovieh’s Lady Macbeth of Mtsensk 
turned the Hefs image on Its bead: 
for once there was real drama on 
stage and a sense of intellectual 
engagement among the audience. 
Add Maria Ewing's kittenish Kater- 
ina and a hair-raising orchestral 
performance under James Conloo - 
and you have a milestone in the 
work's history. 

This is the kind of “modern" rep- 
ertory one expects to be champi- 
oned by New York City Opera 
rather than the Met, where any- 
thing after Tunmdot is anathema. 
In fact, a touring production of 
Lady Macbeth of Mtsensk visited 
the Met for a single performance in 
1935 - a year after the St Peters- 
burg premiere - since when the 
opera might never have existed, 
judging by the reaction of New 
York's audiences, musicians and 
critics. 

So the new production has been 
blissfully cathartic, for the com- 
pany as much as Its public: 20th 
century opera is OK after all, it can 
be interesting and funny, it sells 
welt, and why have we waited so 
long for this to happen? Perhaps 


Levine and his board of directors 
can now be persuaded to take glas- 
nost an inch further, and open the 
Net's door to other artistic lumi- 
naries of our fast-receding century. 

Of course, it could all lave gone 
disastrously wrong. Vick’s decision 
to modernise the setting, to choreo- 
graph the orchestral Interludes and 
punctuate the drama with Pop art 
and construction-site machinery, 
was a huge risk. His courage was 
rewarded. The staging, a mixture 
of real and surreal, of macabre 
farce and absurd fantasy, bad the 
same perspicacious imagination 
that characterises Shostakovich's 
music. Here was a tale of passion, 
greed and brutality, mercilessly 
parodied. 

Paul Brown's permanent set was 
a painted skyscape, slung diago- 
nally across the stage in the shape 
of a room. The refrigerator, televi- 
sion and saloon car - not to men- 
tion the dated appeal of Katerina's 
rose-patterned dress - could have 
been 1960s middle America, were it 
not for the icon on the wall, the 
workers’ red scarves, the socialist 
tower-blocks and neo-Stalinist riot 


police. The beauty of it all was that 
the Images were never specific. The 
message was timeless, universal - 
and devastatingiy true-to-life. 

The wrestling and whipping, for 
example, were far more realistic 
than the tame expressionism 
served up in most European stag- 
ings. And the equally combative 
seduction scene bad a frantic aban- 
don reminiscent of The Postman 
Always Rings Twice - except that a 
giant rose wafted up (love blossom- 
ing) and the fridge door burst open 
at the climax, puncturing the ten- 
sion with laughter. 

T hat was typical of the 
whole evening - and the 
Met audience did not 
need Russian to get the 
jokes (there were no sur- 
titles). Vick's sense of comic timing 
was immaculate. 

His sense of tragedy was not so 
keen. The last act was an anti-cU- 
max, partly because the setting was 
a spotless contemporary gulag, 
partly because the action was 
reduced to naked convention. 
Where the staging sagged, Shost- 


akovich's music came into its own. 
Conlcm lent extra savagery to the 
brass batteries by having the play- 
ers Hue up in costume on a stage 
gallery. The impact was ehrwrig - 
even If the more private momenta 
were underplayed. 

That was entirely in keeping 
with a production which refused to 
caricature the minor characters or 
beatify Katerina. Ewing bore the 
sultry, sexy, sdf-caBsdaus look of 
the girl who cannot help attracting 
male attention. The voice is as 
problematic as ever - sometimes no 
more than a high-pitched wail - 
hut she was never less than audi- 
ble, and her whole performance 
was fftfli ra l Hw t n Vladimir Galouz- 
ine, a name new to me, was the 
perfect Sergei: macho and musical, 
with a rapier voice and the cheeky 
swagger that goes with a lack of 
scruple. Mark Baker made an 
impressive Zinovy, looking more 
like a workaholic prov in cial con- 
tractor than a wimpish husband. 
Sergei Koptchak was the foul- 
mouthed Boris. The smaller parts 
were strongly east 

The previous evening saw a 


revival of Franco Zeffirelli’s 1990 
production of Don Giovanni, stiffly 
conducted by Leopold Hager. Here 
we returned to the Met of Interna- 
tional repute - museum opera in 
all Its gormless, decorative inertia. 
Yon could almost read the produc- 
tion-book as the singers took up 
position for their arias. On one 
score alone, Zeffirelli deserves 
credit: he never forgets the giocoso 
element. As in Lady Macbeth, the 
audience had no need of surtttles to 
pick up the laughs. 

But this was hardly the environ- 
ment for deft ensemble or individ- 
ual imagination. The title role was 
song bY Janies Morris, one of the 
few world-class Wagner singers 
who can sing Mozart with author- 
ity. He made a tall, handsome, 
old-fashioned seducer. Sharon 
Sweet was the big, blowsy Donna 
Anna, Carol Van ess a refined 
Donna Elvira, Stanford Olsen a 

small-scale Don Ottavio. Odebrando 
D' Arcangelo made a subdued local 
debut as Masetto. 

The main attraction of the 
revival was to have been Terfel's 
LeporeUo - but he was forced to 


withdraw at the last moment 
because of back problems (Herbert 
Perry substituted). According to 
Terfel’s associates, he may have a 
slipped disc and require an opera- 
tion. Coining so soon after his Met 
debut this is a cruel blow. 

But it is surely no more than a 
temporary one, for his debnt per- 
formances have bntU a huge 
reserve of goodwill. Assessing his 
Figaro in glowing terms, the New 
York Times said there was “a bit of 
the rustic in Mr Terfel which he 
oses with the savviness of an 
urbanite". About his all-German 
recital, the paper said he had "a 
poet’s affinity for words and their 
underlying worlds of colour and 
emotion”. AH America now wants 
to hear him and there is talk of a 
Carnegie HaU recital 

It is now up to Terfel to decide 
how Cast he wants his career to 
move. He has the kind of once-ln-a- 
gene ration talent which Columbia 
Artists Management Inc, the Amer- 
ican music industry mogul, would 
love to get its hands on. If he is 
sensible, he will remain loyal to bis 
Cardiff agent and continue at his 
own steady pace. He has already 
agreed to sing Wozzeck for Ahbado 
and Stein at Salzburg in 1997, and 
he will record Wagner for Deutsche 
Grammophon. But contrary to New 
York’s expectations, let us hope he 
does not become “the next Wotan” 
- or the one after that. 


Theatre /Alastair Macaulay 

A bare, 
beautiful 


‘Landscape’ 


I n his poetic, haunting, 
and seldom seen master- 
work Landscape, Harold 
Pinter strips drama to its 
most enigmatic essence. 

The two characters, Duff and 
Beth, sit at either ends of a 
kitchen table, without ever ris- 
ing. Nothing happens but talk- 
they seem never to hear each 
other; she never addresses 
him. The play, new in 1968, 
lasts only 40 minutes. We, lis- 
tening, are baffled - and, 
finally, heartbroken. For heart- 
break is part of the subject of 
this beautiful play. 

Duff sits mainly in profile to 

Pinter has 
distilled the 
tensions between 
the sexes 


us, Leaning forwards to keep 
his hands on the table, like a 
C£zanne card-player. Beth sits 
Caring us, hands folded in her 
lap, like Cezanne’s mother. 
Man and woman: Pinter has 
distilled the age-old tensions 
between the two sexes so 
patently that the tragic divi- 
sion of gender has never 
seemed less bridgeable. The 
mysteries of the play lie in the 
dicho tomies between what she 
says and what he says. 

Beth sits there motionless. 
It is possible that she is 
in a coma or trance; certainly 
Doff addresses her as such. 
Yet the wonderful irony of 
the play is that her thoughts 
dwell entirely in sensuous 
contemplation of the lyrical 
past, while his thoughts 
ramble tensely. He is prose, 
she poetry. He talks oE 
mundane facts, she of delicate 
feeling. He thinks about only 
home and work, she about 
would-be children and art He 
speaks of sex as struggle, she 


as intimacy. 

And, though she speaks 
frequently of "he" an ^ "him", 
it is by no means clear if she is 
referring to Duff; we wonder 
about their (ex-?) employer Mr 
Sykes. It is Duff who gives us 
most clues: we learn that he 
once told her of his infidelity 
to her, we learn that she 
once, at some other time, 
broke down by hammering at 
the gong. The clinching clue, 
I believe, to the identity of 
her lover lies in the word 
“grave". 

More important, however, 
and nearest to the play's title, 
are her words on the principles 
of light and shade in drawing. 
Or, rattier, fight and shadow. 
Pinter extracts beautiful 
nuance from the latter word. 
"Shadow is deprivation of 
light . . . Sometimes the cause 
of the shadow cannot be found. 
But 1 always bore in mind the 
basic principles of drawing. So 
that I never lost track. Or 
heart" 

Much more deserves to be 
said not only about this play 
but also about the performance 
it is being given, under Pinter’s 
own direction, by Penelope 
Wilton and Ian Holm at the 
Cottesloe. This is the staging 
that was the greatest 
revelation of the Pinter 
Festival at Dublin’s Gate 
Theatre in May; even without 
the festival’s other five 
plays, it is marvellous to have 
it here- 

7 am now more aware of the 
moments when Beth and Duff 
seem to draw near to each 
other in thought, and of the 
weight of grief that hangs over 
him- But the slightest nuance 
here - the slightest turn of a 
head, the connection of two 
consonants, the beat of her 
eyelids, the silence in the air - 
is ffctU of meaning. 


In repertory at the Cottesloe 
Theatre, South Bank. 



Prose and poetry: Ian Holm and Penelpe Wilton Aiastah-tanir 


Musical/David Murray 

Nagasaki without drama 


I f a hnrmanp mp ff Sa gff 

an expertly professional 
score were enough to put 
bums on seats, Out of the 
Blue mi ght keep the Shaftes- 
bury Theatre full for a long 
time. 1 fear it is dead in the 
water. This is a "musical 
drama" (no jokes, no light 
relief) about Nagasaki - or 
more precisely about five sche- 
matic characters, Japanese and 
American, who were there. It 
is sung all through, looks good 
in extremely economical sets, 
and takes just two hours; but it 
butters no parsnips. 

The show was "conceived” 
by Shun-ichi Tokura, a leading 
commercial composer, and 
then "developed” by its 
En glish director David Gil- 
more, with a libretto by Paul 
Sand. 1945 is the time of most 
of the story, told in flashbacks; 
the present day - 1970 - 
merely provides the occasion 
for telling ft, and for releasing 
old griefs. Somehow, in the 
course of the conceiving, devel- 
oping and writing, nobody 
noticed that in that form the 
story Is fatally low cm dramatic 
pressure. 

Back then, young Marshall 
was an American prisoner of 
war, roughed up by the officer 
Hayashi (whose parents had 


died in the Tokyo bombings), 
but kindly treated by Dr Ald- 
zuki and protected by Hayash- 
i’s sister Hideko. After the 
Nagasaki horror and the Allied 
victory, he married Hideko; 
bnt soon radiation sickness 
carried her off, and while he 
was visiting borne a letter from 
Hayashi told him (falsely) that 
their baby had succumbed to it 
too. Now. be has taken Holy 
Orders in America and never 
returned. Dr Akizuki, on a lec- 
ture tour for Peace, rum into 
Father Marshall and persuades 
him to revisit 

Meanwhile the flashbacks 
keep filling us in on 1945. The 
only “now” suspense lies in 
how Marshall will face his 
long-lost daughter Hana, and 
the revelation of Hayashi’s lie 
soon smoothes that By way of 
a late kick-start, we get 
another revelation: Marshall 
served seven years in prison 
for a certain mercy-killing 
(though the Church seems not 
to have minded). Ah so, that 
was why Hayashi was so cross! 
- but the drama evaporates at 
onc8 amid general reconcilia- 
tion. 

Except for the deceased 
Hideko and the ageless Doctor, 
each character is played by 
two actors, younger and older. 


The only Oriental in the cast is 
baby H ana, who grows up to be 
the co flee -co Loured Paulette 
ivory (pleasantly poignant). 
The "Japanese" men do, how- 
ever, wear their hair black and 
combed back. Like Michael 
McCarthy's Doctor, both the 
Marshalls boast fine mUSical- 

comedy voices; if James 
Graeme offers little more than 
stateliness-under-stress, Greg 
Elite mnkps something strong 
and affecting of his younger 
self. The Hayashis, David Burt 
and Simon Burke, fulminate 
nicely, and Meredith Braun's 
Hideko warbles sweetly from 
her hospital bed. 

The composer has assimi- 
lated the techniques of current 
American musicals with quick 
intelligence. If the often Sond- 
heim-ish score tends toward 
hlan<fTK><« - too many of the 
songs are about vague, wistful 
feelings - it does not lack vari- 
ety; there is, however, more 
genuine Japanese music in The 
Mitaufo. (Here Bernstein. Mus- 
sorgsky and even Faurd peep 
through.) Paul Sand’s succinct 
hoes rhyme and scan assidu- 
ously, and Tokura follows suit 
exactly. In the programme- 
book there is a heartfelt plea 
for nuclear disarmament from 
the Mayor of Nagasa ki . 


Dance/Clement Crisp 

Ballets Jazz de Montreal 


I t all depends on what you 
mean by "ballet", and by 
“jazz”. And, I must add, 
on how tiresome you find 
the combination of fliasw ele- 
ments. Les Ballets Jazz de 
Montreal are at Sadler’s Wells 
this week on a return visit. 

1 saw the first of two pro- 
grammes - or rather, as much 
of the first as I could bear to 
watch on Tuesday. It was an 
evening more catatonic th an 
jazzy, and hardly balletic at alL 
Three pieces of choreography; 
IS dancers; dull design; a tooth- 
less feel to it all - no bite to 
step or score. And the bland 
played on. 

The best came first: James 
Kudelka’s Ghosts, set to songs 
by the Beatles, with an eccen- 


tric edge to the dance which 
matched what was audible of 
the lyrics. A lot of brightness 
from the performers did not 
help, but KudeDca has an inge- 
nious way with their bodies. 
The succeeding Lovers, by 
Jennifer Muller, claimed to be 
"inspired by the paintings of 
■Gustav Klimt". This statement 
needed to be amplified by the 
announcement that Miss 
Muller is the rightful Grand 
Duchess Anastasia. We were 
treated to a tinkling piano 
score by Keith Jarre tt which 
proved as maundering and vex- 
ing as Miss Muller’s four duets, 
whose theme was He Needs 
Her And She Needs Him. The 
rest of the news was that the 
dances and the dancers looked 


anxious but uninteresting, and 
dragging Klimt's name into 
these goings-on was an insult 
to the fair name of Viennese 
painting. 

Mauri cio Wainrot’s Swing 
the Cat ended the evening. The 
title was promising - some- 
thing like tossing the caber? - 
but the dance was not A col- 
lection of musical nullities 
from Simon Jeffe's Penguin 
Cafe Orchestra found an exact 
counterpart in innocently 
awful little outings for a group 
of bathers. After four numbers, 
with not even a kitten having 
been swung, I left - a disap- 
pointed man. 


At Sadler’s Wells until Novem- 
ber 27. 


\\ international ^ 

Ap 

ill. 

> 

GU 

IT) 

E| 


PARIS 


3ys6es Tel: (1) 47 23 37 
)8 24 

■te de Pique: opera by 
kv. Director Valery Gergiev 
V Nov 25, 26. 27;'Dec 1, 2 

vantchlna: opera by 

<y at 7.30 pm; Nov 29. 30; 

Rmsky-Korsakov opera, 
rector Valery Gergiev at 
ec 6 


H 92 49 
k by 
cted by 


n),30 


BONN 


• II Guarany: by Antonio Gomes, In 
Italian with German surtitles. 
Conductor John NeGchttng, 
production by Wemer Herzog at 8 
pm; Nov 30 

• La Fandulla del West by Puccini, 
in Italian with German sureties. 
Conductor Eugene Kohn, production 
by GJan-Cario del Monaco at 7 pm; 
Dec 2 (8 pm) 

• La Traviata: by Verdi. A new 
production conducted by Eugene 
Kohn at 8 pm; Nov 26 (7 pm) ; Dec 
4 (7 pm) 

• The Sleeping Beauty: a new 
production of Tchaikovsky's ballet. 
Produced by Yourl Vdmos, 
conductor Michel Sasson at 7 pm; 
Nov 27; Dec 1 (8 pm), 3 


■ ROME 

THEATRE 

Teatro DefP Opera Tel: (06) 481601 
• L’Ariesiana: by Bizet at 7 pm; 
Nov 25, 26, 27 


■ AMSTERDAM 

GALLERIES 

RQ ks mu sc um Tet 020 673 21 21 

• Art of Devotion 1300-1500: major 
exhibition focusing on the spiritual 
function of objects In the medieval 
period; from Nov 26 (Not Sun) 
OPERA/BALLET 

Ket MuGdektheator Tel: (020) 551 89 
22 

• Rosa: new production of the 
opera by Andriessen. Directed by 
Peter Greenaway at 8 pm; Nov 25. 
28 


■ LONDON 

CONCERTS 

Barbican Tet (071) 638 8891 


• Gala Concert London Symphony 
Orchestra with mezzo-soprano 
Marilyn Home and conducted by 
Marvin Hamlrsh. Includes 
Hamlisch's, The Anatomy of Peace' 
at 7.30 pm; Dec 1 

• Grand Operatic Evening: National 
Symphony Orchestra with soprano 
Susan McCulloch under the 
direction of Martin Merry perform a 
variety of operatic pieces at 7.30 
pm; Dec 3 

• Mozart Idomeneo: Sir Colin 
Davis conducts the London 
Symphony Orchestra at 7 pm; Nov 
25. 27 

Festival HaU Tel: (071) 928 B800 

• Philharmonic Orchestra: with 
conductor Charles Dutoit and pianist 
Peter JablonskJ play Tchaikovsky 

( piano concerto No. 2) and 
Shostakovich (symphony No.5) at 

7.30 pm; Dec 6 

• Russia Old and New: Royal 
Philharmonic Orchestra with the 
Brighton Festival Chorus, London 
Choral Society and conductor 
Vladimir Ashkenazy perform 
Schnittke, Prokofiev and 
Rachmaninov at 730 pm; Dec 5 
Garrick Tel: (071) 494 5085 

• Koninklljk Concertgebouworkest 
with pianist Evgeny KJssFn and 
conducted by Sir Georg Solti, play 
Beethoven, Bartok and Koddfy at 

2.30 p.rrv, Nov 28, 29; Dec 2 
Queen Elizabeth Had Tel: (071) 928 
8800 

• The Fall of Icarus: Multi-media 
event inspired by Bruegel’s. 
'Landscape with FaH of Icarus'. 
Belgian director Frdddric Flamand 
collaborates with Italian artist 
Fabitdo PlessJ and composer 
Michael Nyman at 7.45 pm; Dec 2,3 
GALLERIES 

Barbican Tel: (071) 638 8891 


• A Bitter Truth: a multi-media 
exploration of changes in attitudes 
towards World War 1 throughout its 
duration; to Dec 11 

Haywanl Tel: (Q71) 261 0127 

• Romantic Spirit In German Art 
1790-1990: examines work of early 
Romantic painters. Includes section 
on German Expressionists; to Jan 8 
National Gallery Tei:(071) 839 3321 

• Allegory: selection of paintings 
from the permanent collection on 
the theme of allegory; to Dec 4 (Not 
Sun) 

Royal Academy Tel:(071) 439 7438 

• The Glory of Venice: a major 
survey of Venetian at in the 18th 
century; to Dec 14 
OPERA/BALLET 

Barbican Tel: (071) 638 8891 

• The Kirov Opera; director Valery 
Gergiev brings his entire company to 
the UK for just one night to give the 
first complete British performance of 
Rimsky-Korsakov's opera, The 
Legend of the Invisible City of Kttezh 
at 7 pm; Nov 28 

English National Opera Tel: (071) 
632 8300 

• Ariadne on Naxos: by Strauss. A 
Graham Vick production at 730 pm; 
Nov 25; Dec 1 

• Khovanshchina: new production 
of Mussorgsky's opera. Director 
Francesca Zambello at 6.30 pm; 

Nov 30; Dec 3, B 

Royal Opera House Tel: 071 240 
1200 

• An Ashton Celebration: The Royal 
Ballet Company pays tribute to its 
founder choreographer, who would 
have been 90 this year, with a short 
festival of his work consisting of 12 
ballets and divertissements. 
Performance Includes a new 
production of Daphnis and Chlofi by 
Ravel at 7.30 pm; Nov 28, 30 


• La Travtata: by Verdi. A new 
production by Richard Eyre. Georg 
Solti conducts for the first five 
performances, then Phfflipe Auguln. 
In Italian with English sureties at 
7.30 pm; Nov 25, 29; Dec 2, 5 

• Mixed Programme: includes the 
World Premiere of Michael Clark’s 
New Clarke Ballet, Fearful 
Symmetries choreographed by 
Ashley Page, and Symphony In C by 
Bizet, choreographed by George 
Balanchine at 7.30 pm; Dec 1, 6 

• The Steeping Beauty: a new 
production of Tchaikovsky's ballet 
Produced by Anthony Dowell, set 
designed tv Maria Bjomson at 7.30 
pm; Nov 26 (2 pm) ; Dec 3 (2 pm) 
THEATRE 

Gielgud Tel: (071) 494 5065 

• Hamlet by Shakespeare 
Directed by Peter Hall, designed by 
Lucy HaU With Stephan DU lane, 
Michael Pennington, Donald Slnden 
and Gina Bellman at 7.15 pm; to 
Feb 4 (Not Sun) 

National, OBvier Te£{071) 928 2252 

• The Seagull: by Chekhov, In a 
new version by Pam Gams. Sat mat 
at 2pm at 7.15 pm; Nov 25, 26 


■ NEW YORK 

GALLERIES 

Museum of Modem Art Tet (212) 
708 9480 

• A Century of Artists' Books: 
Exhibition of 140 books from sane 
of this century's foremost artists; to 
Jan 24 

OPERA/BALLET 
Metropolitan Tel: (212) 362 6000 

• Don Giovanni: by Mozart, sung in 
Italian at 8 pm; Nov 25, 28; Dec 2, 6 

• Lady Macbeth of Mtsensk: by 
Shostakovich at 8 pm; Nov 26, 30: 
Dec 3 


• Madama Butterfly: by Puccini at 
8 pm; Dec 1, 5 

• Rigoletto: Italian opera by Verdi 
at 8 pm; Nov 26, 29; Dec 3 

New York State Theater Tel: (212) 
870 5570 

• The Nutcracker, by Tchaikovsky, 
performed by the NY City Ballet 
Tue-Thu 6pm. Fri 8 pm. Ring for 
other times and matinees; from Nov 
30 to Dec 31 (Not Mon) 

THEATRE 

Walter Karr Tel: (212)239 6200 
41 Angels in America: Tony 
Kushneris Tony-award winning play. 
Sun mat at 3pm. Wed., Thura., Sat 
at 8 pm; to Dec 4 


■ WASHINGTON 

CONCERTS 

Kennedy Centre Teh (202) 467 
4800 

• Los Angeles Phflharmonic: 
Conducted by Esa-Pekka Salonen 
plays Lutoslawskl, Ravel and 
Sfoetius at 5 pm; Nov 26 
GALLERIES 

Phfflips Collection Tel: (202) 387 
2151 

• Pictographs of Adolph Gottlieb: 
exhibition of one of the founding 
members of the New York School; 
to Jan 2 

OPERA/BALLET 

Kennedy Centre Tab (202) 467 

4600 

• Le Nozze di Figaro: by Mozart 
sung in Kalian with English sur-tftfos 
at 8 pm; Nov 25, 27 
Wasixngton Opera Tel: (202) 416 
7600 

• Faust by Gounod. Director, Eton 
Douglas Schlaefar, conductor, 
Richard Bradshaw. Faust played by 
Jianyi Zhang. In French with English 
surtitles. at 7 pm; Nov 26 


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W arnings that the 
Israeli-Palestinian 
peace process 
could collapse 
any day are forcing interna- 
tional donors to consider a rad- 
ical overhaul of their aid strat- 
egies. It is now widely 
acknowledged that the aid pro- 
gramme in the Gaza Strip has 
been a failure. 

As donors prepare to meet in 
Brussels nest week, Mr Tefie 
Larsen, the United Nations 
under secretary-general for 
Palestinian territories, has 
warned that time is running 
out for peace in Gaza, as living 
standards fall and violence 
increases. “We are at the very 
edge,” be said. 

Disbursing aid by traditional 
means has proved almost 
impossible in Gaza, with only 
9140m distributed of the 9700m 
pledged for 1994 by interna- 
tional donors such as the 
World Bank, UN and the Euro- 
pean Union. 

One problem has been the 
difficulties donors have had 
dispersing money through the 
embryonic Palestinian admin- 
istration. Mr Yassir Arafat, 
chairman of the Palestine Lib- 
eration Organisation, has been 
criticised for refusing to dele- 
gate authority. He has even 
excluded officials of the Pales- 
tinian implementing agency, 
PECDAR, from the delegation 
to the Brussels conference. 

The Palestian administration 
has also been slow to develop 
clear procedures for 
distributing aid. 

But according to Mr Samir 
Houleila, senior Palestinian aid 
official, “donors have been con- 
sidering us as a classical case 
expecting us to have built all 
institutions and systems in six 
months . . . Without conceptual 
changes the peace process is in 
jeopardy." 

In designing the aid pro- 
gramme, western donors 
assumed that the Palestinian 
adminis tration would be able 
to collect sufficient revenue to 
function, and that long-term 
development projects, entailing 
pre-feasibility, feasibility and 
design studies over 18-24 
months would deliver eco- 
nomic gains sufficiently rap- 
idly. Both these assumptions 
appear to have been hawed. 

The peace process is no lon- 
ger on track: the Israeli trans- 
fer of the West Bank, with its 
greater revenue base, has been 
delayed. And Israel is refusing 
to change the agreement 
signed with the PLO to hand 
over the S10m-$15m a month it 
is collecting in customs duties 
in the West Bank, until Pales- 
tinian elections. 

The PLO c laims that Israel 
has also paid only ShkZOm of 


Aid 
in 

time 

The donors’ 
blueprint is 
failing in 
Gaza, writes 

Julian Ozanne 



Arafat poor aid response 

S hki ftOm in VAT payments due 
to the Palestinian treasury, 
although Israel denies this. 

Alone, Gaza-Jericho is not 
economically viable in terms of 
public finances, say donors, 
and it is suffering a serious 
shortfall in revenue. Total Pal- 
estinian revenue from taxes 
from October to the end of 
March is estimated at $7&9m, 
compared with total expendi- 
ture of $2315m. Only 936.6m of 

finanr.ing is available to cover 
the shortfall of 9124.9m. 

This lads of funds is making 
it increasingly difficult for 
Gaza to pay its police and civil 
servants, at a time when their 
morale and effectiveness is 
vital. The recent revival in 
Islamic wxt r M T n TBm has put Mr 
Arafat under even greater pres- 
sure to contain violence, for 
which a properly paid police 
force is essentiaL Expenditure 
for the police for the six 
months to March 1995 is esti- 
mated at 942£m. 

But efforts to get aid to help 
pay the police have so far met 
with limited success. Donors 
are traditionally reluctant to 
spend taxpayers' money finan- 
cing a police force or the sala- 
ries of a finance minis try. At a 
meeting in Gaza an November 


9, donors said they would pay 
salaries for no more than the 

9.000 policemen agreed 
between Israel and the PLO at 
the time of the peace deal, 
although Gaza now has 10.800. 

Gaza's economic position lias 
also been made harder by the 
Israeli closures of its borders, 
which have prevented tens of 
thousands of Pales tinians trav- 
elling to their jobs inside 
Israel. Mr Savir strongly 
defends Israel's closure policy, 
despite the cost to the peace 
process, saying it has forced 
Mr Arafat seriously to address 
Israel's security concerns. 

But the closure has height- 
ened the need for jobs to be 
created. In this area, too. the 
aid programme’s inflexibility 
has been much in evidence. 

“The situation in Gaza is 
more dangerous today than 
before the peace agreement 
was signed,” said Mr Larsen. 
“The gap between expectations 
and delivery is so large, so crit- 
ical and unless donors get 
together to deliver, the peace 
process will fail." 

And this is the message that 
is being conveyed to donors in 
Brussels. A covering letter to 
the meeting signed by Mr 
Bjorn Tore Godal, Norwegian 
foreign minister, in his capac- 
ity of chairman of the donors 
co mmi ttee, says: “lime is of 
the essence if we are to deal 
with the budgetary shortfall of 
the Palestinian Authority so as 
to implement the process of 
long-term economic develop- 
ment and political stability.'' 

Donors will be asked to 
make two strategic decisions. 
First to commit themselves to 
providing $120m-$L25m until 
March 31 1995 to pay salaries 
and r unnin g costs for police 
and civil servants and to 
finance the budget deficit of 
tbe Palestinian Authority. 

Second, they are being asked 
to divert up to 20 per cent of 
the grants and loans far 
long-term projects into 
short-term employment genera- 
tion, mainly small-scale public 
works. The World Bank and 
the UN Is appealing for donors 
to fund 9100m worth of public 
works projects that will create 

20.00040.000 jobs within the 
next six months. 

“What we are asking for 
from Israel and the donors is 
peanuts in global terms," said 
Mr Houleila. the senior Pales- 
tinian aid official. “But with- 
out the money and faster 
implementation, the impact on 
our side and on the entire 
region will be massive. The 
tension is very high and the 
Palestinian Authority desper- 
ately needs to build its credibil- 
ity by making visible economic 
changes." 




FINANCIAL TIMES 


FRIDAY NOVBMBER^SJ^t; 


Tl.-C- - 


A re the UK's telephone- 
based motor insur- 
ance companies that 
sell policies direct to 
customers running out of puff? 

The pioneering Direct Line 
company, set up by Mr Peter 
Wood nine years ago in con- 
junction with Royal Bank of 
Scotland, was doing all it could 
yesterday to dismiss sugges- 
tions that the current motor 
premium price war would jeop- 
ardise its future expansion. 

Nevertheless. City forecasts 
for Direct Line's profits next 
year were cut after the com- 
pany admitted the price war 
was having an impact, albeit 
“marginal”, on its profitability. 

Its admission was the latest 
sign that the UK direct private 
motor insurance market - sell- 
ing via the telephone, and cut- 
ting out brokers and their com- 
missions - is becoming 
increasingly crowded. With 15 
direct sellers in operation, 
competition is fierce: rumours 
of possible casualties in the 
next few years are growing. 

“There will be a shake-out 
among the 'directs'. The win- 
ners will be those that have 
got the mouey to stick with 
it . . . Anyone who starts to 
write [policies] now is not 
going to succeed unless they 
come up with a radically differ- 
ent approach.” says Mr David 
Campbell, insurance industry 
specialist at actuary Bacon & 
Woodrow. 

Bacon & Woodrow figures 
suggest that, between 1990 and 
1993, the private motor insur- 
ance sector only broke even - 
in spite of large increases in 
premium rates. “The market as 
a whole doesn't make money. 
It is a question of who makes 
money and who loses it,” says 
Mr Campbell. 

Motor premium rates are 
failing steeply as new “direct” 
companies cut prices to grab 
market share. The most profit- 
able will be those able to keep 
their claims plus expenses low- 
est as a proportion of premi- 
ums (operating ratios). 

Direct Line is well placed to 
ride out the current price war, 
with one of the lowest operat- 
ing ratios in the business. But 
Mr Wood acknowledges that 
the doubling in Direct Line's 
pre-tax profits, to £110.1 m in 
the year to the end of Septem- 
ber, is unlikely to be repeated. 

Hence Direct Line was eager 
yesterday to outline its 
long-term plans for a joint ven- 
ture to sell motor insurance 
directly in Spain and to 
develop new product areas - 
particularly mortgages, saving 
products and life insurance - 
as well as expand its portfolio 
of household property policies. 
Some other “direct" compa- 


Ralph Atkins on the prospects of a shakeout 

among direct-selling insurers in the UK 

A certain lack 
of drive 


sell insurance poKctesctfcai 
Have been imdenniee ^rafte g 
than policies that wtpsdly 
make a profit for thainstawu» 
company. 


nies are not faring so well, 
especially those new in the 
market that face large start-up 
costs, including the heavy 
advertising spending needed to 
build a customer base. Bacon & 
Woodrow calculates, for exam- 
ple, that last year the operat- 
ing ratio of Churchill, the 
direct selling company owned 
by Winterthur of Switzerland, 
was among the highest in the 
sector, possibly because 
aggressive pricing had cut its 
premium income. 

Some established insurers 
that still rely on broker net- 
works have also been able to 
undercut the operating ratios 
of the “directs'’ by using the 
same computer technology to 
improve their risk assessmen t , 
thereby increasing profitabil- 
ity. 

According to Direct Line's 
Mr Wood, some of his rivals 
have achieved only a lacklus- 
tre performance because of 
their failure to be sufficiently 
original in following his lead. 
With motor insurance policies 
now sold by telephone as if 
they were relatively simple 
commodities, the first into the 
market can quickly build 
brand recognition and exploit 
economies of scale. 

Some appear to agree with 
Mr Wood, and have tried to 
aim for a particular target mar- 
ket. Admiral, the direct selling 
arm of Brockbank, one of the 
largest agencies running insur- 
ance syndicates at the Lloyd's 
of Lon don market, has focused 
on higher-risk motorists pay- 
ing more than £300 in annual 
premiums. In a flattering 
endorsement of its strategy, Mr 
Wood has followed Admiral by 
setting up a new company, 
Privilege Insurance, for the 
non-standard motorist. 

But others which have set up 
“direct” operations in the pri- 
vate motor market have taken 
a more defensive approach. 
Commercial Union and Gen- 
eral Accident, two of the OK’s 
largest composite insurers, 
decided not to spend heavily 
on promoting CU Direct and 
GA Direct, which' remain 
among the smaller operators in 
the private motor market 

At first sight their stance . 


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appears to offer the worst of 
both worlds: the of set- 

ting up a direct operation with- 
out tbe benefits that a substan- 
tial presence can bring. But 
there is a logic to such a strat- 
egy: given the ferocity of tbe 
competition in. the private 
motor insurance market, there 
is little point in investing 
heavily now. But it may prove 
impor ta nt in the long ran to 
have built the expertise and 
capabilities needed to exploit 
the technology of telephone 
selling. 

“We don't believe it is oppor- 
tune at this time to push it 
heavily. Next year or after may 
be different,” says Mr Nelson 
Robertson, group chief execu- 
tive at General Accident. 

The critical factors that wfD. 
determine whether such cau- 
tion is wise are the speed and 
extent to which direct selling 
techniques spread to other 
insurance products. 

Already many direct selling 
insurers are expanding into 


1982 


399T* 


household policies. Direct line 
underwrote 523,000 policies in 
the past year, and the company 
believes there are substantial 
opportunities for selling other, 
financial products , by tele- 
phone. “People don’t like driv- 
ing down to the high street, 
waiting in a queue, getting a 
form as long as War andJPeace 
and having to take a day off to 
fill it in," says Mr Wood. 

Several companies are even 
studying the feasibility of sell- 
ing property and motor insur- 
ance to companies without a 
broker network. Mr David Ste- 
vens, marketing director at 
Admiral, says: “Direct selling 
can work for any Insurance 
product which doesn’t require 
a huge degree of perceived risk, 
or a huge perceived need for 
advice." 

Cutting out brokers allows 
companies not only to cut 
costs, but also to break the 
“winner’s curse” - that is. the 
tendency for brokers, if com- 
missions are roughly equal, to 


BUI OUiCiS aic Jims . 

about the .scope for expanding 

direct selling- • 

Many life insurance comp if 
nies reckon UK regulatory, 
requirements, desi gned ■, to* 
ensure consumers are uwpedy< 
informed before buying pcpd: , 
ucts, mean telephoning , 
views are suitable onfr fof : 
mating an initial contort.-: 
between seller and buy^ Stmt 
lariy, the comptedty..o£ ; nioto - 
products may make them 
inappropriate for. s elling ' by. 
telephone. ; v :- • • ■■ ' : 

oreover, Mr John ■ 
Carter, Commer- ; 
dal- Union’s chief 

exec«tive,argt»s 

it fe far from certain tfaatdkeet 
sellers can make the same , 
inroads into home and con-' 

tents insurance as they hare in 

motor. Much of these markets 
is linked to the mortgage- 
providing business, where the 
i gptin operators have the finan- 
cial clout to defend market 
share in any price war. -• 

“The opposition is not the 
high-street broker, it is the Mg 
banks, building societies and 
lending institutions that can . 
react to the pressure from the 
‘directs* and find ways of com- 
peting with it,” Mr Carter says. 

Similarly, the profitable 
underwriting of small commer- 
cial policies requires careful 
risk assessment based on local 
knowledge, he argues. In the 
US, growth in direct sales of:, 
personal insurance products 
has slowed recently (though in 
the US, “directs" includes corn- . 
patrimt using tied sales agents 
as well as those relying on tele- 
phone s elling ). 

But CU, along with most 
European composite insurers, 
nevertheless sees direct selling 
techniques becoming, an. 
increasingly important distri- 
bution. ftbannal: Though hesi- 
tant about joining the price 
war in UK motor insurance, 
CU Is.looMng'to build Its share . 
of the French private motor 
market via Eurofil, its direct 
selling operation, in that coun- 
try. 

Insurance companies such as 
these want to ensure that they 
avoid the worst consequences, 
of a shakeout in tire direct UK 
private motor market - hut not 
lose out to rivals as telephone 
s elling spreads into new mar- 
kets and products. Telephone 
sales in the motor, market may 
be becoming more difficult, but ; 
ffie direct sellers are unlikely 
. to. pause for breath for loug. • 



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LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

Fax 072 873 5938. Letters transmitted should be dearly typed and not hand written. Please set &x for finest resolution 


British Gas 
bills policy 
a dangerous 
precedent 

From Mr Keith Z OrtL 
Sir, The British Gas monop- 
oly has set a dangerous prece- 
dent in establishing a tiered 
price menu for its settlement 
charges on our gas supplies 
(“British Gas sets prices to 
reward good payers", Novem- 
ber 18). 

By discriminating price lev- 
els it seeks to channel pay- 
ments to the direct debit sys- 
tem, through the high-street 
banks, to the detriment not 
only of cheque payments made 
in good time but also to the 
detriment of straight cash pay- 
ments across their counters. 

People paying bills by cash, 
immediately, are penalised by 
5 per cent in comparison with 
direct debit customers. What is 
now to stop British Gas 
increasing this Hiffarwitiai, by 
say, 10 per cent and forcing 
payments through direct debit? 
Is it to be in its gift to control 
such matters? Will others now 
think this is a very good 
wheeze? Has cash payment 
ever been so forcibly deni- 
grated? 

The banks admit that a high 
proportion of their consumer 
complaints are concerned with 
mistakes originating from 
direct debit arrangements, and 
of course these problems will 
now increase. 

Good customers of British 
Gas, that is the majority, who 
pay their bills at the proper 
time either by cheque or cash 
and have done so for years, 
should not be set upon by 
schemes such as this. 

Wbat can the consumer do 
about it? Surely the thinking 
consumer might decide to 
change his policy too and, 
instead of paying his bills an 
time, delay them, keep the 
money in his building society 
to the last l eg al moment and 
use the interest so gninnri to 
claw back some of the 5 per 
cent penalty so unfairly laid 
against him_ 

And so, by its dangerous uni- 
lateral precedent, British Gas 
converts veteran blue-chip 
cash customers into payment 
laggards. The very thing it 
sought to avoid! 

Keith Z Onl, 

Arbour House, 13 The Mount. 
Fetcham, Surrey KT22 9EB 


EU confused on TV ownership 


From Mr Leslie HUL 

Sir, Your Brussels correspon- 
dent's reminder that the UK 
government stiH has the power 
under clause 13 of the Industry 
Act to prevent foreign take- 
overs of UK manufacturers 

un derlines the inconsis tency of 

policies which have a Euro- 
pean dimension (“Brussels 
tests Britain's power to block 
foreign takeovers". November 
18). 

It is ironic that the European 
Commission should be con- 
cerned to remove what It 
regards as an anomaly - 
which, so far as I know, has 
never been invoked - while at 
the same time allowing an 
unbelievably confused pattern 


of media ownership rules to 
apply throughout the Euro- 
pean Union. 

Mjmn^iiiriiig industry may 
be a theoretical no-go area for 
Britain’s leading EU partners, 
though BMW and others seem 
to hare been unaware of this. 
However, the broadcasting 
industry, one of Britain’s grow- 
ing international businesses, 
stands wide open to foreign 
takeovers. The 1990 Broadcast- 
ing Act permits 100 pm- cent 
ownership of an 1TV company 
by any European organisation. 
That makes the current UK 
commercial television owner- 
ship rules unique in Europe. It 
is impossible for a British com- 
pany to acquire 100 per cent of 


Confidence despite deficit 


From Mr Abdul Karim 
Al-Mudaris. 

Sir, Mark Nicholson has a 
journalist’s right to report cm 
Saudi Arabia (“Saudi budget 
may have to reflect some harsh 
realities”, November 18) as he 
saw it during his recent visit 
However, allow me to express 
an additional view as I and 51 
British companies saw it dur- 
ing the British Aerospace/Ar- 
ab -British Chamber of Com- 
merce joint venture mission 
which met 329 Saudi compa- 
nies in the kingdom earlier 
this month. 

There was no denial in any 
quarter that there is a budget 
deficit. But there is annoyance 
in private sector circles that 
this is being played up in the 
west as if Saudi Arabia was 
unique in this respect - Ger- 
many. the UK and the US are 
not exactly paragons of budget- 
ary virtue. This is especially so 
in the case of the US, which 
has been transformed from the 
world’s largest creditor to the 
largest debtor nation. 


Despite current short-term 
problems our mission mem- 
bers, in serious business dis- 
cussions with Saudi counter- 
parts, found large area of the 
private sector buoyant, liquid, 
and confident about the future. 
These were not naive people 
we met, but hard-bitten, expe- 
rienced Saudi businessmen 
investing in technology and 
the expansion of their coun- 
try's manufacturing sector. 

The British companies were 
not fools either, and the feet 
that three of them are at the 
stage of agreeing to joint ven- 
tures, 17 are now actively 
engaged in further discussions 
with Saudi counterparts, and 
seven more expect to achieve 
licence agreements - out of 51 
on the Mission - attests to the 
truth or what I write. 

Abdul Karim Al-Mudaris 
secretary general & chief' 
executive, 

Amb-British Chamber of 
Commerce. 

6 Belgrade Square, 

London SW1X 8P8 


Nutcrackers worth experiencing 


From Mr Victor Hochhauser. 

Sir, Clement Crisp draws 
attention to two simultaneous 
productions of The Nutcracker 
in London this Christmas sea- 
son (“The FT Christmas show 
guide", November 19). The 
necessity for this arises from 
the fact that both the Birming- 
ham Royal Ballet and the Lon- 
don Coliseum are only avail- 
able during this period. The 
alternative would be to deprive 


London audiences of experienc- 
ing Peter Wright's glorious 
production. 

Incidentally, Clement Crisp 
refers to New York City Bat 
let’s Nutcracker and omits to 
mention that the same ballet is 
being presented simulta- 
neoudy in New York by the 
American Ballet Theatre. 
Victor Hochhauser, 

4 Oak HOI Way, 

London NWS 7LR 


a television station in any 
other part of Europe. 

.National regulations vary, 
but the thrust of them, particu- 
larly in main markets such as 
Germany, France and Italy, is 
to make it impossible for a UK 
company to gain total control. 

Media ownership rules 
should be consistent through- 
out the EU, and the Camnus- 
sum should concentrate on this 
issue rather than concerning 
itself with an unused clause of 
the Industry Act 
Leslie HID, 
chairman. 

Independent Television 
Association, 

200 Cray’s Irai Road, 

London WC1X8HF ■ 

A proper 
pyramid 

From Mr Dcm Shuster. 

Sir, I am writing with refer- 
ence to the article. “Blueprint 
for two kinds of pyramid 
schemes" (November 19). The. 
article clearly and concisely, 
highlighted the differences 
between legitimate direct sell- 
ing or multi-level marketing 
schemes and unethical, pyra- 
mid selling schemes that are 
“dressed up to look like legiti- 
mate multi-level marketing 
plans or investment clubs”. 

Since 1992, Amway has been 
running the Business Aware- 
ness Campaign which is lobby- 
ing government to tighten the 
e xisting pyramid s elling legis- 
lation so it protects the con- 
sumer from these iraptirioal 
schemes. The campaign also 
aims to educate the public and 
opinion formers about the dif- 
ferent types of direct selling so 
that any dubious or fraudulent 
sphemes can be clearly identi- 
fied and avoided. The cam- 
paign is folly supported by the 
Oirect Selling Asso ciation and 
the Department of Trade and 
industry and by members of 
*“Tuament from all parties. 

The Direct Selling Associa- 
tion is currently drafting pro- 
Posed legislative amendments 
with the support of the DTI so 
it may not be too long before 
these much-needed changes* in 
“e aw are implemented. 

Dan Shuster, 
denerai manager 
Amuay (UK), 


Whtierhm, 
htilion Keynes J! ffiff 1AR 




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FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 


FINANCIAL TIMES 

Number One Southwark Bridge. London SE1 9HL 
Tel: 071-873 3000 Telex: 922186 Fax: 071-407 5700 

Friday November 25 1994 . 


Question of 
confidence 


The s mall world of British politics 
has still not fully accustomed 
itself, two and a half years after 
the general election, to the feet 
that the government has an over- 
all majority of less than 20. That 
makes parliamentary life more 
interesting. It obliges the govern- 
ment to deal carefully with its 
backbench supporters, and on 
occasion to take notice when even 
a tiny group of them feels strongly 
enough to consider voting with 
the opposition on a contentious 
issue, such as Post Office privati- 
sation. 

But it also obliges those back- 
benchers to weigh the conse- 
quences before carrying their 
independence into the division 
lobby. If they cause the govern- 
ment to be defeated more than 
once or twice, or on issues that 
are central to its programme, they 
not only reduce its capacity to 
govern (as Congress habitually 
does to US administrations) but 
also, since the UK is a parliamen- 
tary democracy, undermine the 
very basis of its existence as a 
government, which is the fact that 
it commands a majority in the 
House of Commons. That is why 
the government not only can but 
must can for a vote of confidence 
when it feces posable defeat on a 
substantial issue. It needs to know 
whether it still has a parliamen- 
tary majority or not 

In the present case, the govern- 
ment is clearly right to treat the 
European Communities (Finance) 
Bin as an issue of confidence. This 
bfll is required to give effect to an 
agreement Mr Major negotiated 
two years ago, at a summit meet- 


ing held under his presidency. The 
agreement was regarded at the 
time as a successful resolution of 
a difficult issue, and advantageous 
for Britain in that it involved a 
smaller increase In EC resources 
(to which Britain ts a net contribu- 
tor) than some other member 
states wanted. Some Conservative 
backbenchers do not share that 
assessment, but they should 
accept that negotiating such 
agreements is a quintessential 
government responsibility'. In 
such a negotiation, Britain expects 
its partners to deliver what they 
agree to, and they have a right to 
expect the same. A government 
that cannot rely on a parliamen- 
tary majority to implement such a 
commitment is not an effective 
government, or even a le gitima te 
one. The issue is Indeed me of 
confidence, and can only be 
treated as such. 

If a prime minister loses the 
confidence of the House, be has 
two options: to resign, or to go to 
the Queen and seek a dissolution. 
In this case he has clearly indi- 
cated his intention to do the lat- 
ter, and on Tuesday night Mr Ken- 
neth Clarke revealed that the 
cabinet as a whole had agreed on 
this course. In these circum- 
stances, and so long after the last 
election, it Is most unlikely that 
the Queen would refuse to follow 
her prime minister’s advice. The 
electorate would thus be the ftn? i 
arbiter - an arbiter with which, at 
the present moment, few Conser- 
vative MPs are eager for a prema- 
ture encounter. Mr Major can 
therefore await the vote of confi- 
dence with confidence. 


A sound message 


If Europe's competitiveness 
problems could melt under sheer 
outpouring of words, most of the 
continent's economic woes would 
by now have disappeared. In con- 
trast to many previous reports an 
the issue, including the European 
Commission’s own white paper 12 
months ago, yesterday's document 
from the European Round Table of 
Industrialists has the virtue of 
pithiness. By underlining struc- 
tural shortcomings compared with 
the US and Asia, and concentrat- 
ing on a few priority measures 
which even weak European gov- 
ernments might be able to deliver, 
the industrialists have made a 
sound contribution to the agenda 
for next months ’s European sum- 
mit in Essen. 

Their conclusions should help 
concentrate the minds of the new 
European Commission. First, 
Europe must use faster than 
expected economic recovery to 
correct imbalances in public sec- 
tor finances that are weighing 
increasingly on the private sector. 
Second, priority must be given to 
com ple tin g the single market and 
ensuring that it works. Third, a 
tougher attack on state aids, pow- 
erful deregulatory reform and sen- 
sible infrastructure investment 
are needed to lower costs in 
energy, telecommunications and 
transport. Above all, the Commis- 
sion and Council of Ministers 
should test their actions against 
the need to avoid unnecessary 
burdens on industry. 

The business leaders wisely 
avoid lecturing trade unions about 
flexible labour markets. Because 


recovery is generating so few 
extra jobs, employment rigidities 
are softening even in Europe’s 
most closely regulated economies, 
while real take-home pay for most 
people in work is still fallbig . Few 
bosses have had to face such 
sacrifices. 

Along with a willingness to 
share burdens, Euro-industrialists 
need to show more evidence of 
another virtue: humility. The 
Round Table's credibility would he 
enhanced if it drew attention to 
industry's own part in Europe's 
declining performance. Europe’s 
poor record in innovation, for 
example, cannot be blamed simply 
on failures In education. Along 
with, undue government regula- 
tion, lack of flexibility in the big 
businesses represented on the 
Round Table is partly to blame for 
Europe's low employment growth. 
A majority of 1,500 European busi- 
ness leaders in a survey last week 
termed as inadequate their own 
investment in research and devel- 
opment and in training. In areas 
like this, self-analysis would shed 
useful light on industry’s own ills. 

The Round Table’s underlying 
message, however, is clear. Fail- 
are to correct the continent's 
structural faults will drive 
Europe’s larger corporations to 
shift a growing proportion of capi- 
tal investment outside the EU dur- 
ing the next decade. If this hap- 
pens, Europe’s companies might 
continue to prosper, Europe would 
not As they prepare for their trip 
to the Essen summit, that is a 
sobering thought for the EU’s 
leaders. 


Wrong track 


It would be better not to have 
started from here. That la the sen- 
sible response to the government's 
proposed technique for valuing 
Rail track, which owns British 
Rail’s track, signalling and sta- 
tions. In formally announcing 
Rail track’s privatisation yesterday 
before there exists a sensible 
mechanism for valuing tt, minte- 


ters are putting their desire to 
raise funds above the need to 
ensure efficiency in the railways. 

Privatisation could bring signifi- 
cant benefits to passengers. Tfos 
summer's rail dispute might also 
have been concluded ®° Te 9“^* 
if Rafltrack had been free to nego- 
tiate without regard to the public 
sector pay freeze. Yet it Is doubt- 
ful whether the benefits wpl be as 
exeat as" they should be. The heart 
ofthe problem is that the govmn- 
ment has based the 
£Sn operators will pay Radtra* 

on an arbitrary valuation of Rail- 

track’s assets and 

arbitrary target rate of return for 

R f h Tp ro t ° P S'as S et value of 

rgffhn is more than just debatable 

Mr 
has 


-a 

lower 


J Sed. . -SEL— SS 2 


valuation is required 
be determined 
That valu appropriate 

by revenisHt ® 

level of future reve*^ 


What needs to be worked out is 
the revenue Railtrack would earn 
if it charged prices that ensure 
efficient use of the railways. 
Those calculations should take 
account of the demand for rail 
transport, the capacity available 
and the marginal cost of Increas- 
ing it They should also allow for 
social and environmental consid- 
erations, such as the desirable bal- 
ance between use of roads and 
railways. Given the uncertainties, 
it would be more sensible to value 
Railtrack only after the new sys- 
tem of franchises is working. 

• The proposed rate of return of 
5.6 per cent, rising to 8 per cent 
within four years. Is also unneces- 
sarily steep for a utility. Partly 
because of this, the odds are that 
track charges will end up too 
high. This would hinder the emer- 
gence of competitive, entrepre- 
neurial train operators and ensure 
socially inefficient underutilisa- 
tion of capacity. 

In principle, any overvaluation 
could be offset by higher subsidies 
from the Treasury. Yet the gov- 
ernment would then find itself 
taking with one band and- giving 
back with the other. In practice, 
however, subsidies on the 
required scale would not be forth- 
coming. The government would 
then take its money, perhaps to 
finance a tax-cutting bribe, but 
leave the railways underutilised. 
Not for the first time, the promise 
of a privatisation would be viti- 
ated by foolish decisions taken 
during the act of privatisation 
itself. The railways need to be put 
on a better track. 


?■-*■ 



* 


13 


The sweetening 
of one man 


Jurek Martin and Nancy Dunne analyse 
the political manoeuvres behind Clinton’s 
deal to ratify the Uruguay Round 



even with a number of Democratic 


R obert Strauss, the US 
trade representative in 
the late 1970s. once 
described his approach 
to negotiating trade 
agreements and getting them 
approved by Congress as “half a 
teaspoon of sugar here, hatf a tea- 
spoon there and pretty soon they 
are sweet". 

The business lire become more 
expensive - if not necessarily more 
subtle - since his heyday. Last 
November's successful battle to rat- 
ify the North American Free Trade 
Agreement linking the US. t >ryiHn 
and Mexico saw pork thrown 
around the congressional barrel as 
if all pigs were about to be slaugh- 
tered. This month’s - over Gatt - 
came down to the sweetening of one 
man. 

When Senator Robert Dole, the 
most powerful Republican In the US 
Senate, pronounced himmif satis- 
fied with the deal he had struck 
over congressional ratification of 
the Uruguay Round trade accords, 
more than President Bill Clinton 
breathed a sigh of relief. The eyes of 
the trading world had been focused 
on whether the US Congress would 
ratify the creation of a global trad- 
ing regime due to come Into being 
next January under the auspices of 
the new World Trade Organisation. 

Waiting on the US. only about a 
quarter of the more than 120 mem- 
bers of the General Agreement of 
Tariffs and Trade have completed 
the approval process. The endorse- 
ment of the European Union has 
also been delayed by a legal wran- 
gle, now resolved. International 
uncertainty has left even the choice 
of a head of the WTO up In the air. 

Now, even US opponents of the 
new order concede that Mr Dole's 
endorsement has turned the tide. 
Next Thursday the outgoing Senate 
ought to put Its seal on the Uruguay 
Round. The House of Representa- 
tives should have done Its bit two 
days earlier since the bipartisan 
leadership - Congressmen Newt 
Gingrich for the Republicans and 
Richard Gephardt for the Demo- 
crats - is committed to approval. 
Political chickens are being counted 
with care but the assumption is 
that the deal has been batched. 

Mr Dole is no mean riwalwiflltw 
himself, fond of squeezing the pips 
until they squeak. It must be 
assumed he knew exactly what he 
was doing in September when be 
announced that he was for from 
sure that consideration of Gatt 
should not he delayed until the new 
Congress convened in January. 
There were, he said, serious budget- 
ary issues and weighty questions of 
US sovereignty. 

This simple pronouncement made 
him the centre of the post-mid-tenn 
election political universe, even 
temporarily eclipsing Mr Gingrich. 
Nafta, not a perfect precedent but 
the best available, passed the Sen- 
ate last year by 61 votes (including 
his) to 39. This is only one more 
than the 60 votes the Uruguay 
Round needs to pass a critical pro- 
cedural hurdle - the waiving of 
budget rules - prior to a floor vote. 
White Mr Dote sat on the fence and 


T his week’s Washington 
compromise has relieved 
governments around the 
world, which feared that 
failure by the Senate to ratify the 
Uruguay Round this year would 
kill the global trade agreement 
stone-dead. 

But now that much of this uncer- 
tainty has been removed, a new 
concern is troubling US trade part- 
ners: could the price paid by Presi- 
dent Bill Clinton to secure congres- 
sional approval undermine the 
stronger multilateral trade system 
the round is supposed to produce? 

Concern focuses on the presi- 
dent’s acceptance of Mr Robert 
Dole's demand for a special com- 
mission of federal judges to review 
the operation of procedures for set- 
tling trade disputes in the World 
Trade Organisation, so as to safe- 
guard US interests. 

Effective disputes procedures are 
widely regarded as central to the 
WTO’s chances of gaining the inter- 
national credibility needed to 
establish its pre-eminence as police- 
man of international trade roles. 


converts from the anti-Nafta ranks, 
the White House was conceding cm 
Wednesday morning that It was a 
handful short of the magic 60. 

It was not merely the administra- 
tion. directed by one of its own bet- 
ter dealmakers, trade representative 
Mickey Kantor, that concentrated 
all its energies on Mr Dole. The 
anti-Gatt forces based their cam- 
paign in his home state headquar- 
ters in Wichita, Kansas, the 
"ground zero" of their campaign. 
Ross Perot, the 1992 presidential 
candidate, was in the city on Tues- 
day night addressing a rally urging 
rejection. The Dole office was 
receiving 2J100 calls a day against 
ratification before the phones were 
taken off the hook. Many of these 
were instigated by Mr Perot’s 
organisation and. by rightwing radio 
commentators. 

For public consumption, the lob- 
bying of the senator from Kansas 
was always more about pure poli- 
tics than the merits of free trade. 


WTO much stronger powers than 
those of the General Agreement on 
Tariffs and Trade. The biggest 
innovation is to require that dis- 
putes panels' reports be adopted 
unless there is a consensus to reject 
them - the reverse of Gatt practice. 
The mechanisms also cover new 
areas, such as services, and provide 
for a standing appeals body to hear 
challenges to panel findings. 

The VS has long advocated 
tougher Gatt disputes settlements 
procedures. Indeed, It has repeat- 
edly cited tbelr shortcomings to 
justify Its controversial Section 301 
trade legislation, which permits the 
US to retaliate unilaterally against 
other countries in trade conflicts. 

But now stronger multilateral 
mechanisms have been agreed, the 
Clinton a dminis tration has been 


though all the usual arguments 
were given full public airing. The 
administration naturally claimed 
that Gatt amounted to “the biggest 
tax cut in history”, that free trade 
created more high-paying American 
jobs, and that US leadership over- 
seas would be gravely damaged if 
the treaty went down the tubes. 

The opposition, encompassing left 

and right and with the Nafta experi- 
ence fresh in the memory, warned 
that the Gattrimplementing legisla- 
tion included “give-aways” for spe- 
cial Interests in the fine print of the 
revenue measures of the enabling 
legislation- One of the better stunts 
was pulled by Mr Ralph Nader, the 
consumer activist, who offered to 
give SHMIOO to charity if any mem- 
ber of Congress read the whole Uru- 
guay Round agreement and then 
answered 10 questions of his own 
design. Only Senator Hank Brown, 
the Colorado Republican and a Gatt 
supporter, has taken him up - he 
sits the test before next week's vote. 

But the essence of the deal that 


forced to appease anxieties In Con- 
gress that the new WTO will tram- 
ple on US sovereignty. 

In one sense, toe review commis- 
sion will make little difference. If it 
decided that WTO panels had rated 
against the VS unjustly in three 
disputes in five years, that would 
trigger a congressional vote on 
whether to withdraw from the 
organisation. However, Congress 
has always been free to vote to pull 
out of Gatt In either case, the pres- 
ident could veto such a move. 

More worrying is the risk that 
the commission could Impair the 
disputes panels* authority. Much 
will depend on the precise remit 
handed to the judges, and how they 
exercise it 

If they were to pronounce on the 
substance of disputes cases, they 
could simply become a pretext for 


was finally confected - some 
favours for the agricultural inter- 
ests so dear to any representative of 
the farm belt but, most Important 
the creation of a five-judge panel to 
ascertain if the WTO unfairly rules 
against US interests - was designed 
to give the senator the sort of politi- 
cal protection he craved. 

For there can be no doubt after 
tba mid-term elections that the old 
Republican support for free trade, 
so much a part of Mr Dole’s own 
political career, is weaker now than 
it has been since the 1920s. Suspi- 
cion is rampant of any global body 
threatening US sovereignty, espe- 
cially one with the menacing title of 
World Trade Organisation. 

It is generally recognised that Mr 
Dole has both a managerial and a 
political problem with the resurgent 
right which, without this week’s 
deal, could have been exacerbated 
by the Gatt. Not only would he be 
vulnerable to conservative charges 
of sacrificing US sovereignty to an 
unaccountable world panel, he 


which It disagreed. If, however, 
they focused strictly on whether 
panels have followed procedures 
fairly and correctly, their role 
would be more limited. 

Even then, they could find them- 
selves at tiie centre of political con- 
troversy. Expansion of WTO mech- 
anisms to cover trade in services, 
and other activities fagiife national 
borders, wfll require the panels to 
rule on what Gatt members have 
hitherto considered the ij wnahi of 
domestic policy. 

Some observers also expect a 
stream of early cases intended to 
test the extent of the panels’ juris- 
diction and set precedents in areas 
where WTO rules are sketchy. 
These cases could hand ammuni- 
tion to isolationists in Congress - 
and other national legislatures. 


would also. In the legislative pro- 
cess, have found himself voting for 
higher taxes. Under laws peculiar to 
the US, the loss of revenues from 
thB lower tariffs of the Round must 
be offset by higher taxes and user 
fees. Putting down bis marker on 
the right. Senator Phil Gramm of 
Texas, a likely rival of Mr Dole’s for 
the party presidential nomination 
in 1996, came out early and said he 
could not vote tor the budget 
waiver its higher taxes, what- 
ever he thought of the Gatt (after 
the Dole deal, he left the Impress km 
he would back the treaty). 

Mr Dole has more than Mr 
Gramm to worry about in looking 
ahead to 1996. It la going to be hard 
enough simultaneously to run the 
Senate and a national political cam- 
paign. Early finance and good 
organisation are imperative, espe- 
cially now that California and New 
York have moved their primaries 
up to March, front-loading and 
shortening the effective voting sea- 
son And tag business - Mr Dole’s 
potential underwriters - is pro-Gatt, 
white Mr Gramm, for one, already 
has plenty of money and political 
rbifa? in his campaign bank. 

S ometimes in the negotia- 
tions it seemed Mr Dole 
overreached himself. His 
attempt to link the Gatt to 
cutting taxes on capital 
gains - long on the Republican 
wish-list - got short shrift not only 
from the administration but also 
from business interests. Jerry Jasi- 
nowski, president of the National 
Association of Manufacturers, put it 
bluntly. “The consequences of kilt 
ing the Gatt because of last-minute 
political manoeuvring over a capital 
gains tax cot are too great." 

Even if the game is now over, the 
perception persists that the admin- 
istration should never have been 
forced into the comer of dealing 
with Mr Dote. According to Julius 
Katz, a trade official under Presi- 
dent George Bush, the lessons of 
foot dragging over Nafta should 
have been learned. The additional 
taxes needed to ofiket the lost tariff 
income should have been in the 
budget for the 1996 fiscal year. It 
was known as soon as the Uruguay 
Round was concluded last Decem- 
ber that such provisions would 
have to be made. 

Then, in the search for extra reve- 
nues, the administration lighted 
upon licence fees on the operators 
of the new broad spectrum radio 
wavebands. This gave jurisdiction 
to the commerce committee chaired 
by Senator Ernest Hollings, the 
South Carolina Democrat and pro- 
tectionist In October he invoked 
congressional privileges forcing a 
46-day delay in the Gatt vote. 

Even assuming all goes to plan 
neit week, the unintended conse- 
quences could be many. Other coun- 
tries may want their own watchdog 
panel of judges. The enti re d ispute 
settlement process of the WTO, one 
of the main US objectives in the 
launch of the Uruguay Round, 
could thus be put at risk. But to 
Bob Dole, playing for high stakes 
today, that is tomorrow's problem. 


Precisely for these reasons, how- 
ever, some WTO supporters take a 
more positive view. They argue 
that US monitoring. If conducted 
objectively, will give the disputes 
panels an extra incentive to meet 
the high standards of jurisprudence 
needed to command respect 

Furthermore, they say, if the fed- 
eral judges endorsed panel findings 
which went against VS interests, 
they could make them politically 
more acceptable in Washington - 
and might even help Improve the 
poor US record of implementing 
adverse Gatt disputes rulings. 

The federal judiciary’s reputation 
for independence from other 
brandies of government also offers 
reassurance. However, such opti- 
mistic prognoses might have to be 
revised If the US example were 
widely em u la ted - particularly by 
countries less scrupulous about 
divisions between judicial and 
executive power. That could only 
heighten the risk that tbe WTO 
would be torpedoed by members 
intent on taking the law into their 
own hands. 


The price of compromise 

Guy de Jonquieres on the concerns of US trade partners 


The Uruguay Round gives the 


the US to reject any finding with 


Observer 


Taking the 
Mickey? 

■.Guess who's coming to Disney? 
That grand old trooper Sidney 
Poitter, who has spent over 40 years 
in show business and starred in 
more than 40 films, has popped up 
on the board of The Walt Disney 
Company. 

Polder's reputation bas stood the 
test of time better than Disney’s. 
The first African American to make 
it big in Hollywood - be was 
knighted by the Queen In 1968 - 
Poitier has gone from strength to 
strength in his later years. Not so 
Walt Disney, which seems to have 
lost its stock market magic. Euro 
Disney continues to turn in hefty 
losses, attendance is sagging at US 
theme parks, and the death of 
Frank Wells and the noisy 
departure of Jeffrey Katzenberg put 
a big question mark over the 
group's top management 

Not surprisingly, Disney is 
keeping us in suspense about 
Polder's latest role. The nfftqa? 
release says that the 
academy-award winning entertainer 
win fill the unexpired term of the 
late Frank Wells, Disney’s 
president Does this mean that he is 
Wells’ replacement? 

And how old Is Poitier? Disney 
says 67, the history books say closer 
to 71. Disney chief executive 
Michae l Eisner was Enjoying the 
Thanksgiving holiday yesterday, 
Bke the rest of the US, so no one 


was able to elaborate on his odd 
comment that "Sidney’s talent is 
more than screen deep". 


Shadowy 

■ Wise move by Labour to unveil 
Its shadow budget yesterday at 
Church House, Westminster? It will 
be recalled that shadow chancellor 
Gordon Brown had earlier defined 
the terms governing the validity of 
tax and spending commitments 
made by Labour MPs. On BBC 
radio. Brown said: "Unless you can 
quote me chapter and verse about 
commitments made in the House of 
Commons, then they were not 
made.” 


Just rewards 

■ Warning - political gaffes can 
damage your career, unless you live 
in Brazil- Rubens Ricupero, who 
quit in September after a row about 
Brazil's inflation figures, is off to 
Rome as Brazil's next ambassador. 

Ricupero. a lifetime diplomat and 
Brazil's fifth finance minister in 
two years, is apparently looking 
forward to the less demanding 
lifestyle In the foreign service. 

His successor, Ciro Gomes, is also 
likely to be out of a job soon once 
the new president, the very same 
Fernando Henrique Cardoso, takes 
over on January l. Given that 
Gomes has spent most of his period 
in office bad-mouthing businessmen 
and making enemies in 





'Come Monday, we could be on the 
1922 Committee' 

government, not even Brazil's 
magnanimous diplomatic service is 
likely to find him a bolt hole. 


Crossed line 

■ Direct line, the Royal Bank of 
Scotland’s pushy phone-based 
insurance outfit, seems hell-bent on 
selling ever more complex products, 
such as life insurance and 
mortgages. But despite yesterday’s 
impressive increase in profits. 
Direct line's expansion plans have 
been met with scepticism. 

Hence, It will be hearte ned b y 
yesterday’s press release from 
another firm headed "Customers 


say yBS to phone-based mortgages”. 
Any concern that complicated 
flrun-iritai matter s hfcp mortgages 
can’t be properly handled over the 
phene has been dispelled by 
research, said the release. 

And who has Direct Line to thank 
for this timely observation? Tbe 
Household Mortgage Corporation, 
the UK’s largest centralised lender, 
which will be Direct line's number 
one competitor. 


Quavering 

■ What was that feint tremolo 
perceptible during the Vienna 
Philharmonic's otherwise 
exemplary performance at London’s 
Royal Festival Hall on Wednesday 
evening? With not a single Fran to 
be seen among the players, could it 
be that even this notorious bastion 
of male chauvinism Is quaking at 
the prospect of Austria joining the 
European Union band and hence 
being forced to play in tune with 
Brussels’ equal opportunities 
legisla tion? 


Honk for Oui 

■ Given the streak of reckless n ess 
that seems to possess your average 
Belg ian when, placed behind the 
wheel of a car, proposals by 
transport minister Elio di Rnpo to 
raise the speed limit by 10 kph to 
130 kph - to hring things in fine 
with neighbouring France - might 
seem academic in the extreme. 


Nonetheless, it is a notion upon 
which - surprise, surprise - tbe 
Flemings and the Walloons cannot 
agree. Quite why those pro the 
increase should be the 
Francophones, while the Dutch 
speakers all duly line up on the side 
of the nays, is less than clear to a 
non-Belgian. But there are more 
motorway accidents in Flanders. 
Which in turn is explained less by 
the fact that Walloons make yet 
crazier drivers, than by the 
existence of a different order of 
hazard - the regional police force. 
The latter installs nightly check 
points - which seem to have the 
reverse of their intended effect of 
cutting down the accident rate. 


Right on 

■ So much for the musings of one 
of the Conservative party's 
vice-chairmen on the course of 
European history. Patrick Nicholls 
resigned for his indiscretions, but 
no one seems to be getting upset by 
another outburst of 
Earofriendliness under 
Westminster's nose. The bunkered 
cabinet war rooms under Whitehall 
used by Winston Cfonrehill during 
the second world war have for some 
while been advertising themselves 

to London tube stations with a 

poster featuring Adolf Hitler and 
the slogan “Efn Volk, ein Reich, etn 
FBhrer”. It signs off sweetly: 
“Without the cabinet war rooms, a 
united Europe would have 
happened a lot sooner.” 



14 


Jv.iiSfe 



IVIoDo 


PULP, PAPER & 
PAPERBOARD 


FINANCIAL TIMES 

Friday November 25 1994 



UK MPs are advising 
group on trade with Iraq 


By Jimmy Bums, WHam Lewis 
and James Whfttkigfeon m 
London 

Two Conservative MPs, inducting 
the pariJamentary assis tant to Mr 
Malcolm Rifkin d, defence secre- 
tary, are advising a commer cial 
lobby group which wants to 
boost trade between Iraq and the 
UK. 

The MPs are Mr Henry Belling- 
ham, parliamentary private sec- 
retary to Mr Rifkind, and Mr 

Mirhael firihrin, rh airman of the 

Conservative Foreign Affairs 
Committee. They have been 
advising the Iraqi British Inter- 
ests Group, which in August 
organised one of the first British 
trade delegations to Baghdad 
since the Gulf War. 

“They have advised us on who 
to speak to in Whitehall," said Mr 
Edmund Sykes, secretary of the 
IBI, “if we want to seek advice on 
how to avoid breaking United 
Nations sanctions, how would we 
do so." 

Mr BeUmgham miri- “I have no 
regular contacts with the EBL” 


In a separate development, 34 
major British and European com- 
panies are to begin exhibiting in 
Baghdad next week in an attempt 
to win contracts from the Iraqi 
government 

Companies from Germany, 
France, Austria, Spain and 


Companies fear being left out 

of trade with Iraq Page 7 


Britain Involved in the health 
and water treatment sectors will 
be exhibiting at two separate 
trade fairs in Ba ghdad - 

One of the trade fairs is being 
organised from the UK by Orient 
Exhibitions, a Kent-based com- 
pany. 

Mr Andrew Maclean, a director 
at Orient, said the companies 
attending the fair would include 
Zeneca, the pharmaceutical 
group, Weir Pumps, the Glasgow- 
based engineering group, and 
Johnson & Johnson, a major sup- 
plier of medical products. 

In September, Mr Stephen 


Crouch, the IBl's director-gen- 
eral, travelled to Jordan with Mr 
Bellingham, the MP for Norfolk 
North West. The MP had an 
informal meeting with a senior 
official from the Iraqi foreign 
ministry on September 3. 

Mr Bellingham, who has been 
PPS to Mr Rifkind since 1990, 
gairi his visit to Jordan was pri- 
vate. “It was a private visit paid 
for myself as a backbench MP,” 
he said. 

Mr Bellingham said he was not 
told in advance that he would be 
meeting the Iraqi official at a 
social engagement 

He subsequently informed offi- 
cials from the Foreign Office and 
Ministry of Defence of the meet 
ing. “They were grateful that I*d 
informed them,” he s aid . 

In a letter obtained by the 
Financial Times. Mr Crouch 
states that with Mr Bellingham 
he met several Jordanian govern- 
ment officials and that “we also 
met with a delegation from the 
Iraqi Ministry of Foreign Affairs 
In order to listen to their point of 
view". 


Tanker liability crackdown 
threatens US oil supplies 


By Charles Batchelor, 

Transport Correspondent 

The threat of a US oil shortage 
this winter has increased in 
recent weeks in spite of urgent 
efforts by shipowners and the 
insurance industry to find a solu- 
tion to tough new financial liabil- 
ity rules on tankers. 

Pressure on the shipping indus- 
try and the US administration is 
intensifying with, little more than 
a month before the December 28 
deadline for tanker owners to 
prove they can meet the financial 
consequences of an oil sp3L 

The US Coastguard has 
approved the liability arrange- 
ments made by the owners of 
nearly 300 tankers. But that is 
only one-third of the number 
needed to wminferin off shipments 
to the US, shipowners said yes- 
terday. 

Intertanko, an organisation 
representing many of the world’s 
independent tanker owners, has 
written to Mr Federico Pena, the 
US transport secretary, calling 
for urgent action to prevent “pro- 
found economic disruption” to 
the international tanker commu- 
nity and to the US economy. 

Attempts to persuade the coast- 
guard to delay implementation of 


the deadline have been unsuc- 
cessful. Mr Miles Kulukundis, 
chairman of In ter tan k n, called 
upon Mr Pena to allow “a reason- 
able extension” to the deadhne. 

“The danger to the US is imme- 
diate,” Mr gnininiiiitig warned. 
“The maritimo supply-lines that 
provide the US with petroleum 
extend thousands of 
mfles . . . Voyage times run close 
to 40 days. The markets are 
already showing signs of disloca- 
tion.'’ 

Two insurance schemes to pro- 
vide additional cover to oil 
tanker owners have been 
accepted by the US authorities. 
But shipowners remain con- 
cerned that these are Tnsnffirten*- 
to cover the costs ofanoilspflL 

The problems follow a tighten- 
ing of rules governing financial 
HahiTit y in the wake of the Bnmn 
Valdez disaster off Alaska In 
1989. The coastguard has set 

hi gher limits on the "cw tifiialDx 
of financial responsibility” far 
shipowners from December 28. 

The limits have been increased 
to SL500 per gross registered ton 
per year, taut if a court finds that 
a shipowner or tanker captain 
guilty of gross negligence, the lia- 
bility could be imiiniTtPri- Inter- 
tanko fears that a minor act of 


negligence leading to an oil spill 
could be treated as “gross negli- 
gence" by the US courts. 

The coastguard’s National Pol- 
lution Funds Centre said it had 
issued a further 196 certificates of 
financial responsibility, bringing 
the total available to tanker own- 
ers to 296. Companies with certif- 
icates include Shell International 
Shipping for 44 vessels, Bergesen 
fur 40 vessels and Union Carbide 
Corporation for one vesseL 

The insurance schemes which 
have obtained approval are First 
Line, arranged by Stockton Rein- 
surance of Bermuda, which will 
provide cover of up to $150m 
(though a higher limi t Is being 
sought) and OPAClub, a mutual 
liability arrangement created b; 
brokers Willis Corroon and Sedg- 
wick Marine, which plans to pro- 
vide cover to $250m. 

A third arrangement. Shoreline 
Mutual Management, providing 
$300m of cover on top of the 
$700m available to shipowners 
through their protection and 
indemnity (P&D club, has yet to 

win approval 

The problem with the schemes 
is that shipowners fear a court 
might still be able to inn higher 
financial liabilities on them or on 
their P&I Club. 


EU rebels threaten to challenge Major 


Continued from Page 1 

required number, but they were 
claiming a gronndswell of anger 
against Mr Major. 

Advocates of a contest 
suggested that potential rebels 
could choose to hack the. govern- 
ment in the vote on the EU bud- 
get but then indicate they had 


lost confidence in the prime min- 
ister by backing a challenge. 

That brought acknowledge- 
ment from cabinet colleagues 
that a contest was possible. But 
one senior minister insisted last 
night the latest storms had 
strengthened rather than weak- 
ened Mr Major’s determination to 
stay. 


Mr Major drew comfort from 
the reflection of Sir Marcus Fox 
as <*h»irm^Ti of thp 1922 commit- 
tee of backbench MPs. He had 
been accused of not representing 
forcefully enough the views of 
backbench MPs to the prime min- 
ister. But he beat off a challenge 
from the Eurosceptic Sir Nicho- 
las Bonsor. 


Japanese 
party’s 
name is 
true to 
character 

By William Dawkins wi Tokyo 

It is not always easy to pack a 
message into a name . 

That is the moral of 'the 
national search for a new name, 
concluded after a tortured debate 
Last night, by Japan’s alliance of 
: nine political opposition groups. 

The alliance, due to transform 
itself into a mega-party at a 
mega-party on December 10, set- 
tled briefly on an English name 
only to change its mind twice 
before announcing the final ver- 
sion, the New Frontier party. It 
is imbued with more meaning 
than its apparent blandness 
might suggest 

Party officials had asked the 
public to flax to Tokyo headquar- 
ters suggestions for a title that 
would evoke “the newness and 
freshness of our group.. .and per- 
haps also imply such qualities as 
environmental awareness and 
international responsibility.’’ 

The winning offering, chosen 
yesterday from 100,000 sugges- 
tions seot in by party friends 
and supporters, was shin-shin-to, 
the literal translation of which is 
New-new party. 

It woo the most votes from a 
poll of the party's 213 upper and 
lower house parliamentarians, 
advised by a panel of 15 academ- 
ics, media folk and artists, 
including the shapely Ms Fumio 
Hosokawa, a former pin-up girl 
unrelated to the former prime 
minis ter of that name. 

It was, officials said, a demon- 
stration of the open style of 
democracy with which the new 
party hopes to challenge the 
backroom ways of the ruling lib- 
eral Democratic party's factional 
barons. 

The party's name could have 
been worse. Runners-up included 
the Party of Hope, the New Wind 
party, the Pnre New party and 
the Human party. Plain New-new 
party, while snappy, was 
thought an injustice to the sub- 
tlety of the kanji characters of 
which it Is composed, an exam- 
ple of how written Japanese can 
be as impenetrable to native- 
speakers as it is to foreigners. 

The second character of the 
name means something more 
than just new - something like 
progress, or advance, explained 
one of the NFP’s political advis- 
ers. 

So it was that the title started 
yesterday evening as New Pro- 
gressive party. Officials thought, 
on reflection, that sounded 
"odd” and changed the transla- 
tion a few hours later to New 
Frontiers party, before Ms Hoso- 
kawa's panel finally lopped off 
the *s" and called tt a day. 

Endearingly, one of the party's 
advisers confesses that the sec- 
ond, forward-looking, “shin” is 
not entirely appropriate because 
the NFP is dominated by conser- 
vatives - former members of the 
ruling LDP. 

Confused? That’s Japanese pol- 
itics. 



Europe today 


High pressure will continue to produce calm 
conditions over most of western Europe. 
Only Ireland and Scotland wffl have 
outbreaks of rain owing to a nearby frontal 
system. Elsewhere, It will stay mostly dry 
with cloud and some local fog. Southern 
Franco, Spain and Portugal w9 have plenty 
of sun, but also lingering fog patches. 
Central Europe w31 be mostly doudy with 
light rain. Only northern regions wil have 
sunny intervals. Cold rir across Russia wDI 
be drawn south and wffi reach the northern 
Balkans later today. As a result, eastern 
Europe wfll stay doudy with outbreaks of 
rain developing. Northern regions, will have 
snow. Italy and Greece wiD have a lot of sun 
wtth pleasant tempenatuBs. 

Five-day forecast 

On Saturday, a frontal system wiH bring ran i 
to the Benelux. This front wiB be foflowed 
by another high pressure system bringing 
cloud and rrest to western and central 
Europe. Eastern Europe wffl remain cold, 
and Turkey and Greece win be colder. 
Scandinavia be milder. Thunder 
showers wifi develop in the Mediterranean 
area from Sunday. 




3 1000 












•<£& B 


■\ 44 


44L . ■ * •* 


w*.. ••• .) 


AS % A. 18 ' iASR, l.-. 




V Jffl 

1020 h ’ 


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&.V *4 *‘r a, * ont ~ Colo front Wbtd spend (n KPM 




Skuatbnat 12 OUT. TatnperWjrts maximum for day. forecasts by Mateo COnsuft oi the H ethv b nte 


Maximum 

Cebkjs 


S Caracas 
12 CardftT 
12 Casablanca 
7 Chicago 
2* Cologne 
20 Dakar 
33 Dalas 
11 Defilf 
10 Dubai 
7 DuMn 
20 Efcbravnfic 
23 Edinburgh 


More and more experienced travellers 
make us their first choice. 


Abu Dhabi 
Accra 

sun 

Mr 

30 

34 

Belgrade 

Bom 

Afcpars 

sun 

21 

Bwmuda 

Amsterdam 

doudy 

11 

Bogota 

Athens 

Afenta 

fair 

Mr 

IB 

18 

Bombay 

Brussels 

3. Aires 

ihund 

28 

Budapest 

3 Jam 

doudy 

12 

CJagan 

3angkok 

ft* 

34 

Cdre 

Barcelona 

sun 

18 

Cape Town 


Lufthansa 


29 Faro 

12 Frankfurt 
20 Geneva 

6 Gfcrattsr 
9 Glasgow 

29 Kanbuig 
IS Helsinki 
26 Hong Kong 
31 HonoMu 

13 Istanbul 
19 Jdrarta 
11 J erse y 

Karachi 
Kuwait 
L Angeles 
Las Primes 
Lima 
Lisbon 
London 
LiKbourg 
Lyon 
Madeira 


sun 

21 

Matftld 

tar 

18 

Rangoon 

sun 

33 

doudy 

B 

Majorca 

sun 

20 

Reyfcjovfe 

rain 

6 

& 

11 

Malta 

fair 

20 

Ho 

tar 

25 

fair 

19 

Manchester 

drzzi 

12 

Rome 

tab- 

19 

rain 

11 

Mania 

tar 

30 

S. Frsco 

fair 

13 

doudy 

8 

Meiboune 

ctaudy 

21 

Seoul 

tar 

7 

doudy 

tar 

-1 

28 

Mexico City 
Monti 

tar 

tar 

23 

26 

Snoaom 

Stooram 

found 

doudy 

X 

5 

tar 

28 

Milan 

fog 

10 

Strasbourg 

fog 

8 

doudy 

11 

Montreal 

snow 

0 

Sydney 

shower 

27 

shower 

31 

Moscow 

snw 

3 

Tangier 

sun 

21 

fog 

11 

Munich 

rind 

8 

Tel Aviv 

tar 

19 

sun 

32 

Nairobi 

shower 

25 

Tokyo 

tar 

14 

stxnrar 

24 

Naples 

sun 

19 

Taranto 

doudy 

4 

SU1 

21 

Nassau 

tar 

27 

Vancouver 

rain 

7 

sun 

25 

New York . 

sun 

10 

Venice 

tar 

13 

tar 

23 

Nice 

<ak 

16 

Vtanna 

<frzri 

10 

tar 

19 

iDcoao 

tab- 

19 

Warsaw 

doudy 

S 

drzzi 

12 

Cdo 

tar 

4 

Washington 

dear 

11 

f°g 

8 

Paris 

doudy 

12 

Wellington 

fab- 

18 

doudy 

11 

Perth 

Shower 

23 

Winnipeg 

tar 

-11 

SUI 

22 

Pragua 

rain 

6 

Zurich 

doudy 

9 

j 


THE LEX COLUMN 


Privatisation on track 


Running railways, as the US railroad 
barons demonstrated in the late 19th 
century, can prove hugely lucrative. 
Whether Rail track, whose privatisa- 
tion was announced yesterday, can 
emulate them, or ends up a mere puff- 
ing billy, remains unclear. 

In theory, Railtrack should prove 
the former. On the cost ride it can. 
like the utilities, make substantial 
post-privatisation savings. Prospects 
are also promising for revenues. Rafl- 
i track should significantly increase 
yields on its £2hn property portfolio, 
currently at just 7 per coat It may 
also repeat BAA's trick of raising pas- 
senger spending at retail outlets at its 
! stations. 

Admittedly, Railtrack’s main jnmmB 
will Initially come from fees paid by 
train companies for using its network 
and their price will be set by a regula- 
tor. But if privatisation is successful 
in generating greater usage of the rail 
network, revenues from track fees 
could rise too. With petrol prices due 
to increase in real terms over coming 
years, Halting the long-term dacKna in 
rail travel may not prove the tall order 
that some think 

If the opportunities are considerable, 
so too are the risks. A brake van an 
the company's progress wfll be poli- 
tics. Labour, well ahead in tfv» opinion 
polls, remains implacably hostile to 
private ownership of the railways. 
Though a Labour government would 
probably not renationalise Railtrack, 
it might well interfere with its regular 
tory framework. 

By contrast, while the Tories remain 
in power, there will be doubts about 
their crrmrainngnt to subsidise heavily 
loss- making routes in the lang-tenn. 
Such concerns may not derail privati- 
sation, bat they could reduce the 

amnmrt RailtaurJt fetches. 

Direct Line 

The figures from Direct I.™ were 
splendid, a tribute to the company’s 
success in pioneering the telephone- 
based marketing which has revolu- 
tionised the personal sector of the UK 
in s u rance industry. But for all man- 
agement's confidence in the future, 
one can sense future stagnation. 

For one thin g, Direct Line failed to 
meet its target of 2m motor customers. 
Then there was a slight increase in 
the company s expense ratio, disap- 
pointing in the Tight of the 48 per cent 
growth in premium income. All this 
points to growing competition in the 
direct sector. This is especially the 
case in motor insurance, where premi- 


Stare price refctfve'tofott . tji - ' „■ 

Fr^&AA^Stamkrioc: =Ov.'' tfi-jjgf. 

: W. 




S»w*€T«tarii*»: 


... .... 

yj-f 


rims are coming under increasing pres- 
sure and riatmn levels are set to rise 
after an unusually favourable patch. 
Direct Tine remains well ahead of its 
competitors ia terms of cost manage- 
ment, but margins are set to foil . 

These factors alone will not stop 
growth in pre-tax profits to £160-£17Gm 
next year ami perhaps £200m in 1996. 
They point, however, to growing pres- 
sures which limit the scope for expan- 
sion thereafter. It is not yet dear that 
Direct Una’s new v en tur es in finan- 
cial services and life insurance wfll be 
able to ptek up the dndr Hence the 
drop yesterday in the shares of Royal 
Bank of Scotland, Direct line’s parent. 
The shares have performed better 
than those of any other hank in the 
past two years, chiefly because of 
Direct Line. But as doubts about 
Direct Line’s fixture growth intensity, 
it is likely that BBS will lose some of 
its p'r pmtiim r ating 

Market-making 

Sir Bryan Carsberg has caused 
another Trim nr storm in the (Sty. Last 
week, the Office of Fair Trading’s 
director-general published a report 
lambasting under w rit in g- commis- 
sions. Yesterday, it was the ability of 
market-makers to keep large share 
trades secret far 90 minutes - and in 
some cases five days - that attracted 
his ire. 

Such secreqy is typically justified by 
market-makers on the grounds it 
gives them time to off-load file risk of 
trading large blocks of shares; requir- 
ing them to be open is rather like 
ashing poker players to reveal their 
hands. 

But the OFT thinks market-makers 


who handle large trades gam valuable ■ 
^formation: from, which.' secret^ gives 
them, time to profitTwo alleged antf- 
OTmpetitive consequences' ^follow. 
Fnst,irig maritefrpakers -whfofa halt 
<Be most large trades have an unfair 
adv antag e over 'smaller rivals.- Second, 
market-makers are so worried that 
they may be hit by aJaige! trade, being 
unwound that they defimsivety widen 
the fowling spreads for normal-sized 
trades. Investors suffer through not 
getting the best prices for normal - 
sized deals.' ' . A .' 

The thesis is plausib le - enoug h put 
fuzzy. The. OFT is vague on ex actly i 
what information mariort-makers gain 1 
from handling large trades and how 
they profit from it Moreover, there is 1 
no compelling evidence that de allrig 
spreads for normal-sized trades are 
wider than ffiey need be. ff the OFT is 
to press ahead with its attack oh 
secrecy, it yniat be more ccmvifociBgin 
showing that there are victims, ■ 

Allied Domecq 

There Is no reason to doubt the stra- 
tegic logic of Allied Domecq’s pur- 
chase of Pedro Domecq earlier this 
year. But it is disconcerting to see the 
Mwrtean market ■- which accounts for 
half Domecq 's profits - turning down 
so sharply, so qcrickty. Why was Allied 
not able to see this coming? 

Confidence in the group's deal-mak- 
ing prowess has taken a dent, espe- 
cially as it is now dear that due dili- 
gence ahead of the Domecq deal did 
not dig so deep as to reveal in which 
part of the year the Spanish company 
earned thhbulk of its pnfits. 

There is little consolation, fix; share- 
holders in Allied's disingenuous pro- 
testation that there would be no earn- 
ings dilution fram the deal, but for Mr 
Ramon Mora-Figueroa's decision to 
exercise his "put option”. The option, 
obliging Allied to buy the outstanding 
shares in Domecq, is bring exercised, 
and the purchase will- dilute in the 
current year as a result. It is not sur- 
prising; muter fife circumstances, that 
Affied'a share pric e drop ped by more 
than 8 per cent yesterday. 

Across the group as a whole, operat- 
ing performance was poor, with only 
modest underiyhig growth in. spirits 
and retailing. The 9 per cent drop in 
Garlsberg-Te tley’s operating profits 
provided more evidence of difficult 
unnwHtinns in the UK beer, industry. 
The shares will struggle to matotain a 
market rating, given, fixe pedestrian 
outlook for earnings growth in the 
next few years. 


The leading edge in Asia Pacific 




International Container Terminal 
Services, Inc. 

fhmpvaud tn the HqaMcrfAr Ptt&fvlaa Mfc 

US$60,000,000 

5 percent. Convertible Notes due 2001 

Issue Prices 100 percent. 


Jardine Fleming 


Bankers Trust lotemarional PIC 


hazard Frftres 6- Co. 


Baring Brothers fir Co., 


Goldman Sachs International Salomon Brotheralptemational Limited 


Swiss Bank Corporation 


OoobaOWt 




ja rdine Fleming 

Hie lea ding rdy In Aria Pacific 


Exchange Capital Corporation Flemings 


Jardine Fleming Securities Ltd. 
Tel: (852)843-8888 
Fat (852) 810-6558 


Exchange Capital Corporation 

Tel- (632) 815-4886 
Fax:(632)816-1383 


Robert Fleming fir co. Umhed 
Tel: 144-71)6385858 
Fa* (44-71)3828414 


fssued by Robert FIardrg£rCo United, a mcmteafTtebon&n Slock aid ThtSear^ 










IS 



track 




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*ia Pacific 


terminal ; 


t- 1 r. 




Mercedes 

Rental 


Available from only 
£64 per day at your 
nearest dealer 


IN BRIEF 


MoDo upbeat after 
return to profit 


Bayer and Hoechst in dye merger 

Bayer and Hoechst are to merge their textile dyes 
operations into a joint venture in an at tem pt to 
revive profits and defend their market shares 
against low-cost competitors. Page 16 

Canadian bank doubles earnings 

'Toronto Dominion Bank, Canada's fifth largest, 
more than doubled earnings in its latest fiscal year 
to C$683m (US$497.5m). Page 16 


Direct Line suffers 

Direct Line, the UK's largest private motor insurer, 
admitted that fierce competition had led to a slight 
fall in its operating efficiency. Page 16 


Danone buys Argentine stake 

Danone, France’s largest food group, is paying 
$24Qm for a controlling stake in Bagiey, an Argen- 
tine biscuit manufacturer. Page 17 


Body Mows knock Alcatel 

Alcatel Alsthom is reeling from body blows that 
have rocked the French telecoms, transport and 
engineering group since the beginning of the year. 
Page 17 


Extra space helps Storehouse 

An increase in selling space helped Storehouse, 
owner of the BHS and Mothercare retail chains, to 
hft interim sales 7 per cent and operating profits 
from retailing by a third. At the pre-tax level, prof- 
its doubled to £24. 2m ($40m). Page 20 

Record term for Johnson Martthey 

Johnson Matthey, the UK precious metals technol- 
ogy group, has reported a record first-half perfor- 
mance and said there was every chance that this 
would continue in the second half. Page 21 


Babcock back In the Mack 

Babcock International, the UK engineering contrac- 
tor, materials handling and facilities manag em e nt 

group, returned to profit in the half-year to Septem- 
ber 30. Page 22 


‘Mini-GAP’ for E European farms 

Mr Rene Steichen, the European Union’s agricul- 
ture commissioner, endorsed a “mini-GAP* to help 
eastern European farm industries. Page 36 


De Boers digs into Namibian diamonds 

De Beers, the South African group that dominates 
the world diamond business, has secured its posi- 
tion in Namibia for the next 25 years - or until the 
diamonds run out Page 36 


Brazilian market recovers 

Share prices in Brazil recovered yesterday after a 
traumatic few days' trading which had seen the 
main Bovespa index down 12 percent from a week 
ago. Back Page 


US changes rules on one-off charges 

Tighter accounting regulations in the US are about 
to make the process of taking big restructuring 
charges less attractive. Such one-off charges have 
become the fashion as the country's biggest compa- 
nies overhaul their operations to make themselves 
more competitive. Page 8 


Companies fn this Issue 


ABB 

ACC 

AGH 

Alcatel Alsthom 
Allied Domaoq 
Amoco 
AsaN Bank 
Atias Copco 
Atrws 

Avasta Sheffield 

BASF 

BCE 

BCH 

Babcock IntemaH 


Bank of Tokyo 
Bayer 
BJftam (J) 

Cadillac Falrview 
CPL Aromas 
CSM 

Caledonia Invests 
Chamberialn PHppa 
China Evetbrighf 
dydeport 
Concentric 
Continental 
DaHcN-Kangyo 
Dawa Bank 
Danone 

Deutsche Telekom 
Direct Una 

an 


17 Forward 

18 Fufl Bank 
18 Hagemeyer 

17 Hilton Hotels 

15 Hoechst 

5 Hokkaldo-Takushoku 

18 Husfon-Teqran 

16 Hungamotete 
22 Hydro-Quebec 
18 ING 

15 fTC 

17 IWP International 
17 Japan Telecom 

9 John 1. Jacobs 
22 Johnson Matthey 

17 KJbckner Werka 
IB Mitsubishi Bank 

16 MoDo 

S» Monarch Resources 

18 Norsk Hydro 

21 Osborne & Little 

16 RPC 

21 Sakura Bank 

21 Sanwa Bank 

18 Scftwaftzer 

22 Scottish Investment 
22 Scottish Widow 
18 Secure Retirement 
18 Select Appointments 
18 Stated 

17 Sumitomo Bank 

15 Tfphook 

16 Total Bank 
5 TomWreons 


Market Statistics 


Benchmark Gwt tarts 
Bond futures and options 
Bond prices and jWds 
Ccraitodfles prices 
OMdands amuneeO. UK 
atS currency rates 
Eurobond prices 
Rirad Interest Indices 
FT-A world Mkss Ba 
FT 0*1 lines Wtt 
FTflSMA Ml bond me 
FT-SE Actuaries lndtees 


38-39 

Foreign sxcftanga 

42 

T9 

GSts prices 

19 

19 

Uffe equity opfiore 

37 

19 

Un ton share senics 

38-39 

38 

London trad) options 

37 

20 

Managed tonds sento 

40-41 

42 

Money matas 

42 

19 

New Inti tend issues 

19 

19 

DnMi 

Recant tomes, UK 

37 

raJB 

37 

Short-tum tat rates 

42 

19 

US Interest rates 

19 

37 

Worirf Stock Markets 

43 


Chief price changes yesterday^ 


FVUHnwrCMN 


Hdaasm t it 

oar** 2® * S 

StaffM 230 + 10 

SnPrf - 12c 

Mg*cM toas - 315 


hum FraM 
SjmDWWo 


Banr Omp 556 - 12 

TOKVOfltoi 


MrLMddB 

Caw fta 
OredFoDC 


713 + 

8tt + J! 
an + » 


Datmrnbc 

HBENOk 

JBJL 

iMSaCvp 

OMBk 


685 - 30 

974 - « 

667 - 39 

1710 - 1® 

666 - 31 


New York fik»a*l 


0Mf 40CM «- BH 
13 * * 

tefiefOV*» *g + « 

Baton* Post + 

aSwan* 25 * IS 

■bCtoUIttr A 70S * 30 

UWUUhwer « + 10 

ll-l - .lfl f 71 + ■ 

SES * ,5 

Md 261 * 10 

, 354 +® 


Mb 

fjOBODonaai sssh - 

BM(0 123 “ 

GNttfadSfti** 

naerwoi 1» " 

HancMsbr DU 625 - 

flOfNWScal 425 - 

annum * 


S5Sh - 19M 

123 - 19 

a® - zs 

138 - is 

825 -14 

425 - 17H 

447» - I*** 

732 -31 


mmw i ■ 


FINANCIAL TIMES 


DAROME Tele conferencing 


COMPANIES & MARKETS 


Conference calb: 
the key to improved 
business communications. 
For the best service all ... 


©THE FINANCIAL TIMES LIMITED 1994 


Friday November 25 1994 


oaoa YO 70 70 


Shares in MoDo, the Swedish pulp and paper group, 
rose 5 per cent after it announced that profits after 
financial items soared to SKrl.Oibn ($13&8m) from a 
SKr427ra loss, and it painted a bright picture of 
prospects. Page 16 


German chemicals group expects 50 per cent rise in earnings this year but presses on with cost cuts 

BASF trebles and expects more growth 


By Christopher Parkes 
in Frankfurt 


BASF, the German chemicals 
group, expects a SO per cent 
increase in pre-tax earnings to 
DM1. 6bn ($l.07bn) this year after 
profits more than trebled in the 
third quarter, Mr JQrgen Struhe, 
chairman, said yesterday. 

Forecasting further growth for 
the coming two years, Mr Struhe 
said he expected his main objec- 
tive - a 10 per cent return on 


capital - to be achieved in 1996. 

After that, he was counting on 
less pronounced expansion and 
increased competition in the dos- 
ing years of the decade. 

He announced a 99 per cent 
rise in earnings for the first nine 
months to DMlJJbn on sales up 
7.6 per cent at DM32.4hn. 

The sharpness of the recovery 
was gratifying. Mr Strube said. 
But he added that he was not 
satisfied with profitability and 
would press on with cost reduc- 


tions. This would entail a further 
4.000 job losses during 1996, fol- 
lowing more cuts this year. 

Mr Strube said fixed costs had 
been cut by DMl.4bn in the past 
three years, and further econo- 
mies worth DBHOOm had been 
made in the nine months to the 
end of September. 

Group payroll costs in the 
review period had fallen &3 per 
cent. 

The company would reinforce 
its less cyclical businesses includ- 


ing pharmaceuticals, natural gas, 
plant protection and fine chemi- 
cals, he added, complaining of 
continuing pressure on producer 
prices while raw material costs 
continued to rise. 

Pharmaceuticals sales are 
expected to rise by a third to 
DM3bn when negotiations to buy 
the UK Boots group’s drugs 
operations are concluded. 

Mr Strube expected the talks to 
be completed by the end of the 
year, and to be followed by an 


integration programme. 

Apart from the geographical 
synergies between the two 
groups’ drugs operations, he said 
Boots' blood pressure and diabe- 
tes treatments were especially 
interesting. 

Addressing workers' concerns 
over possible job losses In his 
first public remarks on the 
he said adjustments would be 
required on all sides. 

An interim report published 
yesterday showed higher operat- 


ing profits in all divisions except 
oil and gas. However, earnings 
were again reduced by extraordi- 
nary items, especially write-offs 
of plastics, fibres and consumer 
products plant in the US. 

North American sales rose 3 
per cent in the period, and while 
European sales increased &5 per 
cent, turnover in Germany fell 
0.6 per cent. 

Asian, Australian and African, 
sales showed the strongest 
growth, increasing 12 per cent 


Decision due on foreign role in Telekom sale 


By Andrew Fisher hi Frankfurt 


The German government will 
today end weeks of waiting by 
naming which US or European 
bank will play the main foreign 
role in the DMlSbn ($9.7bn) priva- 
tisation of Deutsche Telekom. 

The announcement by the 
postal ministry at a press confer- 
ence in Bonn follows several days 
of uncertainty about when the 
names would be made known. 


The decision was expected on 
Monday and then postponed. 
Because Deutsche Telekom 
intends to list its shares in the 
US, the position is almost certain 
to go to a New York-based bank. 

Merrill Lynch of the US is 
regarded as one of the strongest 
candidates, with Goldman Sachs. 
Morgan Stanley and Salomon 
Brothers also prominent among 
the 22 banks which made presen- 
tations in Bonn. Some bankers 


said the government favours Mer- 
rill Lynch, while it is understood 
that Deutsche Telekom's choice 
is for Goldman Sachs. 

Among UK banks hoping for a 
parallel or subordinate foreign 
role are Kleinwort Benson, S.G. 
Warburg and N.M. Rothschild. 
European banks have lobbied 
stxongly for one of them to play a 
prominent part in the issue, 
scheduled for the first half of 
1996. because of the experience of 


UK investment houses in han- 
dling large privatisation deals. 
They have also argued their case 
on political grounds. 

Dresdner Bank and Deutsche 
Bank are expected to be 
appointed joint lead managers of 
the issue, in which a quarter of 
Telekom's shares will be sold in 
the first privatisation tranche; 
the second will take place in 1998. 
Dresdner Bank is likely to over- 
see the domestic share side and 


Deutsche Bank the international. 

Like the recent privatisation of 
Lufthansa, the national airline, 
which raised just over DMlbn. 
the Deutsche Telekom issue is 
expected to be “ring-fenced” with 
banks restricted to consortiums 
covering broad geographical 
areas. Some banks have criticised 
this procedure as too inflexible. 

• The DM530m share offer by 
Hanover Re, the world's fifth 
largest reinsurance group, was 


subscribed twice ova: with for- 
eign investors taking more of the 
issue than expected, Commerz- 
bank, {fart manager, said yes- 
terday. 

The issue, which closed on 
Tuesday, was the seventh biggest 
on the German stock market for 
10 years. Foreign investors 
accounted for about a third of the 
shares, which traded unofficially 
yesterday at just above the offer 
price of DM75. 


Hungary 
hotel talks 
collapse 
amid row 


The fund manager’s ‘free lunch’ comes under scrutiny I Allied DomeCQ ahead 


By Nicholas Denton In London 
and Vfrgjnia Marsh in Budapest 


International investment banks 
In Budapest yesterday accused 
Hungary of scuttling the sale of 
Hnngarhotels, the country's larg- 
est hotel chain. They also cast 
doubt over the country’s commit- 
ment to privatisation. 

The row broke out as negotia- 
tions collapsed between Hunga- 
ry’s State P ro per ty Agency arid 
American General Hospitality of 
the US over the tender for 51 per 
cent in state-owned Hangar- 
hotels. 

Mr Ferenc Bart ha, privatisa- 
tion commissioner, said: “We are 
in negotiation . . . and the board 
win decide.” 

Western investors and their 
advisers have taken the deal as a 
litmus test of the socialist gov- 
ernment's Intentions on privati- 
sation. 

The controversy mars Hunga- 
ry's efforts to sell shareholdings 
in telecommunications, electric- 
ity and gas utilities and to raise 
?L5bn over the next 12 months. 

AGH bid $8lm for the stake in 
Hnngarhotels to better a rival 
offer of about $4Sa from Inter- 
continental Hotels of Japan and 
the authorities last week named 
AGH as preferred bidder. 

But the social security fond, 
led by allies of the socialist gov- 
ernment, has mounted a cam- 
paign to stop the deal. 

Intercontinental also lobbied 
against the tender outcome 
which would have left it without 
a flagship hotel fn Budapest 

The Hungarian negotiators 
demanded AGH pay a 25 per cent 
premium and investment bank- 
ers said they suspected the 
authorities wanted to force AGH 
to withdraw. 

The SPA board meets next 
week to decide on the Hnngar- 
hotels tender but it would 
require a climbdown by the SPA 
at the meeting next week to save 
the deal. 

Hungary insisted that AGH 
raise its bid although the US 
company emerged from a three- 
way competitive race. Deloitte & 
Touche, the accountants, con- 
cluded that the bid was 20 per 
cent over market value. 

The government has previ- 
ously promised to speed op pri- 
vatisation and foreign invest- 
ment The sale of Budapest 
Bank, a state bank, is in its final 
stages. But only one significant 
sale to western investors has 
gone through since the former 
communists returned to power 
after elections last May. 


S oft commissions, often crit- 
icised as the proverbial free 
lunch for fluid managers, 
are under scrutiny by regulators 
around the world. 

Last week Mercury Asset Man- 
agement, the UK’s largest fund 
management group, disclosed 
that, from next January, it will 
no longer deal under soft com- 
missions agreements. These 
arrangements (known in the US 
as “soft dollars") involve a broker 
paying for goods and services for 
a fund manager, in return for 
receiving a minimum amount of 
commissio ns from the manager. 

MAM is 75 per cent owned by 
investment bank S.G. Warburg, 
which itself is an active soft com- 
mission broker. The fund man- 
ager says its decision is largely a 
reflection of the growing resis- 
tance among UK pension funds 
to soft commissions. 

Critics claim that soft commis- 
sions lead to a subtle form of 
bribery in which fund managers, 
eager to obtain the free goods 
and services, “churn" client 
accounts to generate the requi- 
site level of income. Moreover, 
there is a fear that in order to 
meet the targets, fund managers 
direct business through brokers 
who may not offer the best prices 
for securities. 

“Softed" services typically 
include research provided by a 
third party, or information ser- 
vices such as Reuters or Bloom- 
berg screens - services which 
fund managers would normally 
have to pay for themselves. “If I 
didn't accept soft commissions, I 
would have to either lower my 
profits or raise my fees,” said one 
leading UK fund manag er. 

Fund managers say the softed 
services make them better at 
their jobs, and so benefit clients. 
And soft commission brokers say 
there is nothing much different 
between their activities and 
those of stockbrokers: in both 
cases, fund managers are paying 
commissions to receive services 
(research material, in the case of 
traditional brokers). “All we are 
doing is unbundling the sendee, " 
said an executive at one firm 
which executes all its business 
on a soft-commission basis. 

Many regulators are uncon- 
vinced. US Securities and 
Exchange Commission chairman 
Mr Arthur Levitt said the prac- 
tice “doesn't feel right, smell 
right or taste right”. This is 
despite the fact that, at around 
$750m in 1993. or 30 per cent of 
all commissions paid, the busi- 
ness is a large practice in the US. 

Regulators around the world 
are following a similar pattern in 
trying to control the business: 
first they have sought to restrict 
the range of goods or services 
available under “softing” deals, 
and then they have pushed for 
better disclosure. 

In developed markets such as 
the US and UK, the first steps 


Regulators start to 
take a hard line on 
soft commissions 




were taken in the 1980s, and 
attention has now switched to 
disclosure. The SEC is expected 
to publish proposals for greater 
disclosure of soft commission 
arrangements in January. Mr 
Ken Berman, an SEC staff mem- 
ber working on the proposal, says 
the result to likely to be a 
requirement for fond managers 
to produce “some kind of report 
to investors that deals only with 
soft dollars". For the first time, 
fund managers are expected to 
give details of the amount of soft 
commissions they engage in, and 
the services they receive. 

In many developing markets. - 
particularly in Asia, where soft 
commissions have soared on a 
wave of equity investment from 
the US - regulation is still at the 
first stage. 

In Hong Kong, regulators have 
proposed restricting the practice 
of giving fund managers cash 
rebates for minimum levels of 
business - a variation on softing 
which is already banned in the 
US and UK. According to solici- 
tors Lmklaters and Paines, softed 
goods and services in Hong Kong 
can include tickets to sporting 
events, and it is difficult to see 
how these benefit the end-client 


involve a fund manager’s own cli- 
ent capturing the benefit erf com- 
mission payments, rather than 
the fund manager. Clients ask 
their fund manager to arrange 
for pari of their commissions to 
be directed to a broker who will 
pay for services such as the cli- 
ent’s own performance measure- 
ment fees, or fees for investment 
consultancy. 

According to Greenwich Asso- 
ciates, the US consulting firm, 
around a half oF all US pension 
funds engage is directed commis- 
sions. As the practice spreads, it 
seems certain it will eat into fond 
managers' profits. 

“The real question we are 
debating is “Who does commis- 
sion really belong to?,” said one 
fund manager. “Increasingly, the 
fund manager’s chent is seeing 
commission as his asset, not the 
fund manager's.” 







Norma Coheo, 
Richard Waters and 
Simon Holberton 



,'MM 


BrandnCon 

Allied Domecq, the UK drinks and retailing group, increased interim 
profit 16J> per cent despite a setback in Mexico, Page IS; Lex, Page 14 


H ong Kong's Securities 
and Futures Commission 
is proposing to ban cash 
rebates unless prior consent of 
the end-client has been obtained, 
and to ban fund managers from 
accepting softed services that do 
not demonstrably benefit clients. 
It also proposes that transactions 
with “connected persons” - such 
as the stockbroking arm of a 
fund manager's parent company 
- must be conducted at arm’s 
length. 

Meanwhile, regulators say that 
the increasingly international 
nature of investment has made 
soft commissions more difficult 
to regulate. 

Indeed, critics of Hong Song’s 
efforts to crack down on soft 
commission abuses point out that 
local fund managers may be 
prompted to move their busi- 
nesses to rival centres such as 
Singapore or Tokyo to get around 
the regulations. MAM says the 
one part of its business which 
will still accept soft commissions 
is a small unit-trust operation in 
Tokyo. 

While soft commissions are 
just arriving in developing mar- 
kets, the practice is feist being 
overtaken in developed countries 
such as the US by an alternative 
practice. “Directed commissions” 



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Japan banks fail to arrest slide 


By Gerard Baker hi Tokyo 


The long earnings slump at 
Japanese banks showed no signs 
of abating yesterday as the lead- 
ing lenders reported sharply 
lower profits for the six months 
to the end of September, 

The gradual removal of the 
pile of bad loans accumulated in 
the collapse of the Japanese 
property market in the past few 
years was reflected in bigger 
write-offs of bad debts. The pro- 
visions for problem loans caused 
a farther slide In pre-tax profits. 


but they also began to make 
inroads into the outstanding 
total of disclosed bad loans, 
which now appears to have 
passed Its peak. 

Bnt the asset quality problems 
were compounded by rising 
interest rates and weak demand 
for lending which cut into banks' 
core business profits. Aggregate 
operating profits at the ll lead- 
ing banks fell fi per cent from a 
year earlier to Yi,092bn (£7bn>. 
Write-offs of bad loans cut pre- 
tax profits 41 per cent to Y233bn~ 

Between them the n banks 


wrote off Yl,341bn in non-per- 
forming loans, up 60 per cent. 
Tbe outstanding balance of non- 
performing loans fell by Y222bn 
to Y3,726bn. Bnt these figures 
inclnde only loans to bankrupt 
borrowers and loons on which no 
interest has been paid For at 
least fix months, niey do not 
include restructured loans, 
where interest rates have been 
pared to keep borrowers from 
going under. Real problem loan 
totals are thought to be up to 
double the disclosed figures. 

Full story. Page 18 


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INTERNATIONAL COMPANIES AND FINANCE 


Toronto i Bayer and Hoechst form 

Dominion 
doubles 


•/ 

textile dye joint venture 


earnings 


By Christopher ParKos 
in Frankfifft 


By Bernard Simon 
in Toronto 


Toronto Dominion Bank more 
than doubled anmingg in ItS 
latest fiscal year, and has 
raised its dividend. 

The bank. Canada’s fifth 
largest, lifted earnings to 
C$683m {US$497 Am), or 02.14 
a share, in the 12 months to 
October 31, from C$275m, or 82 
cents, a year earlier. The quar- 
terly dividend has been 
increased to 22 cents from 20 
cents a share. 

Fourth-quarter earnings 
soared to C$195m, or 62 cents a 
share, from C$82m. or 25 cents. 

The bank said it was espe- 
cially pleased with the 
improvement in its Wns port- 
folio. Loan losses, originally 
forecast at C$450m, totalled 
C$345m, in spite of an extra 
general provision of C$38m. 

As a result, fourth-quarter 
write-downs were only C$32m, 
down from C$l50m last year. 

Non-performing loans 
dropped to C$727m on October 
31 from C$L22bn a year earlier. 

The bank forecast a further 
improvement in 1995, based on 
continued economic recovery 
and momentum in new busi- 
nesses. 


Bayer and Hoechst are to 
merge their textile dyes 
operations into a 50:50 joint 
venture in an attempt to revive 
profits and defend their market 
shares against low-cost com- 
petitors in Asia. 

The new company, expected 
to be established in tmd-1995 
and with aggregate annual 
turnover of DM2bu <$l.3bn), 
will mark a further important 
step in the consolidation of the 
He rman chemicals business. 

It follows a series of cross- 
border and inter-company 
deals which started in the 
recent recession as German 
chemicals groups strove to 
regain competitiveness and 
reinforce their companies bet- 
ter to withstand future cyclical 
slumps. 


Hoechst said markets for 
dyes bad been subjected to 
deep-seated changes by new 
producers, notably in low-wage 
countries in Asia, which had 
led to losses. 

“It is to be expected that this 
situation will become more 
severe,” it added. 

The new company will be 
based in Germany, while US 
operations are expected to be 
joined in a partnership. 

Most of Hoechst's PVC busi- 
ness has already been merged 
with the German chemical 
group Washer's operations in a 
new company, Vinnotit, which 
is looking for a further partner 
to increase its critical mass. 

The group's plant protection 
business has also merged with 
that of Sobering into a so- far 
successful venture. AgrEvo, 
which recently forecast sales 
of DM3.35bn this year and 


profits of about DM270m. 

AgrEvo yesterday 
announced the purchase of a 
majority stake in Stefes. a pri- 
vate agricultural chemicals dis- 
tribution company with annual 
turnover of DM8Dm. 

• Net earnings at Henkel, the 
German chemicals and con- 
sumer products group, rose 15 
per cent to DM485ra in the first 
three quarters of the current 
year as restructuring measures 
started to pay off. 

Sales rose marginally to 
DM10.5bn. according to an 
interim report, but fell in 
Germany. 

Reporting sales increases of 
16 per cent in Asia and 12 per 
cent in the US. Mr Hans-Diet- 
rich Winkhaus. chairman, said 
he aimed to reduce the compa- 
ny's dependence on Europe, 
and improve Us position in 
consumer markets. 


UK drinks 
group shrugs 
off setback 
in Mexico 


MoDo shares rise 5 /o as 


higher prices fuel recovery 


By Christopher Brown-Humes 
in Stockholm 


By Roderick Oram in London 


Price fears hit Direct Line 


By Ralph Atkins and Alison 
Smith in London 


Klockner back 
in profit with 
DM5m for year 


By Michael Undemarm in Bonn 


Kldckner Werke, the German 
industrial group which shed its 
steel interests last year, yester- 
day said it was back in profit 

The group, now centred on 
its car parts division and bot- 
tling plants, made a DM5m 
($3m) profit following a 
DMlSSm loss last year, accord- 
ing to preliminary figures for 
tee year to September. Final 
results will be available in Feb- 
ruary. Operating profit rose to 
DMlOtim, compared with a loss 
of DM324m last year, while 
turnover fell to DM4.lbn from 
DM6.ibn following the sale of 
the group's steel works. 

The company said it would 
make “further significant 
improvements” next year. 


Fears about the Impact of an 
insurance premium price war 
hit Direct Line, the UK’s larg- 
est private motor insurer, yes- 
terday in spite of a doubling in 
its pre-tax profits. 

Shares in the company’s par- 
ent, the Royal Bank of Scot- 
land, fell 17Kp to 42Sp after 
Direct Line admitted fierce 
competition had led to a slight 
fell in its operating efficiency. 

Mr Peter Wood, the chief 
executive who founded Direct 
Line in 1985. emphasised the 
company's progress in building 


on customer base by selling 
personal loans and mortgages. 

Analysts were disappointed 
at lower-than-expected growth 
in the number of motor and 
household policies sold by 
Direct Line and suggested com- 
petitive pressures affecting all 
insurance companies meant its 
profits growth would slow. 

Pre-tax profits were £110.1m 
(3172m) in the year to Septem- 
ber - up from £5D.2m last time. 

The latest figure includes 
the £21.4m payment last 
January to Mr Wood after he 
was bought out by the Royal 
Bank of Scotland and placed 
on a salary. 


Several leading City securi- 
ties houses cut profit forecasts 
for next year to about £130m- 
£l40m. 

Direct Line said competitive 
pressures, marketing expenses 
and investment in improving 
accidental damage manage- 
ment. had led to a “marginal” 
increase in its expenses-to-pre- 
miums ratio. Total premiums 
written increased to £608.2m 
from £409.5m. 

Direct Line also announced 
plans for its first expansion 
outside the UK - a joint ven- 
ture with Bankinter. the Span- 
ish bank. 

Lex, Page 14 


Allied Domecq, the UK-hased 
drinks and retailing group, 
has shrugged off a setback In 
the Mexican spirits market to 
report a 1&5 per cent rise in 
interim pre-tax profits to 
£3 10m ($486.7m). 

With spirits, wine and retail- 
ing showing only marginal 
growth overall, financial items 
accounted for almost all the 
rise in profits, from £266m a 
year earlier. Finance charges 
fell £20m, to £80m. Disposals 
brought a £2m profit against a 
loss of £2im a year ago. 

Trading profits rose £lm to 
£388m on turnover up 5-5 per 
cent at £2.87bn. Mr Tony 
Hales, chief ex ec utiv e, said the 
group would make further 
progress in the second half 
because of underlying growth 
and a full contribution from 
Domecq, the Spanish drinks 
group Allied acquired earlier 
this year for £809m. 

Domecq, which contributed 
two months’ trading profits to 
the first half, s uffe red a 5 per 
cent fall in sales volumes in 
Mexico because of political 
and economic uncertainty. 
Allied said the local market 
should recover next year. In 
contrast, Domecq’s Spanish 
volumes rose 13 per cent Inte- 
gration of Domecq into the 
group was going weft. 

Trading profits from Allied’s 
existing spirits and wines 
businesses rose £lm to £i53m. 
In the UK. Teacher’s whisky, 
Beefeater gin and Harveys 
sherry all lifted market share. 
Lex, Page 14 


Shares in MoDo, the Swedish 
palp and paper group, rose 5 
per cent yesterday after it 
announced better-than- 
expected results for the " first 
nine months, and painted a 
bright picture of prospects. 

Profit after financial items 
soared to SKrLOlhn ($136 .8m) 
from a SKr427m loss in the 
same 1993 period, as rising 
prices and strong depiapd 
drove up capacity utilisation 
and sales. 

It upgraded its frill-year 
profit forecast to between 
SKrl.7bn and SKrLSbn. exclu- 
ding one-off items, mainly 
because of the higher prices. 
Last year, it suffered a 
SKr449m loss. 


The. company, also 
announc ed. SKrSbn worth of 
new investments, i nc luding a 
SKr2.1bn outlay on a. new 
newsprint machine at its Bra- 
viken plant. The machine wiH 
have a capacity of 270,000 
tonnes a year. ‘ . " 

MoDo’s results echoed the 
strong trend already displayed 
by Sweden’s other big forestry 
groups. Store. SCA and Assi- 
Daman. Group sales rose 15 per 
emit to SKrl4.4bn; operating 
profits increased to SKrLSSbn 
from SKr456m; and financial 
expenses fell to SKr638m from 
SEx883m. 

Mr Bengt Petteisson, chief 
executive, said: "Continued 
high capacity utilisation and 
the successive impact of price 
rises have led to strong growth 
in the third quarter. All our 


business areas stored .better 
results.'’ . ■ ;. ; y 

The biggest turaronna was 
at fife group's fine pap« : 3umi, 
MoDo ; Paper, wh ich sw ung 
from a SKr403 m ^qpt aalaiffiaas 
to a S&387m wafit . 

However, the Wl, 
packaging afrd paperboard 
units also staged a Stroup 
profits recovery- Foragtt TOffE 
where currency ractors .h^d; 
earlier hit competitiveness^ 
returned to profit m the flip 

quarter. ' ' 

MoDo has recently, agregga 
sell its packa g in g diviriOT&jist 
stakes in Swiss and Oan afflg g- 
operations. disposals w0 

awwiYiri SKrt 


ital Its B shares - briefly 
suspended before the restate. 
ann ouncement - closed • at 
SKr349. up SKrlfi. 


Atlas advances 44% in term 


By Christopher Brown-Humee 


Atlas Copco, the Swedish 
engineering group, yesterday 
announced nine-month profits 
of SKrl^lbn (5176m), up 44 per 
cent from SKr910m in the same 
1993 period. 

It reiterated its forecast that 
full-year earnings would be 
“considerably higher’’ than last 
year’s SKrl-32bn profit 

Sales rose 12 per cent to 
SKrl5-2bn, dne mainly to 
increased volumes. 

The group said it had 
achieved significantly higher 
sales in France, Germany and 
the UK during the third 
quarter. 


However, it said the trend 
in Japan, the Middle East 
and North Africa remained 
weak. 

Orders were 13 per cent 
higher at SKrl&Ohn. 

Mr Michael Tresdaow, presi- 
dent, «aid: “The level of orders 
received from the manufactur- 
ing industry and the mining 
sector is expected to continue 
to improve in Atlas Copco’s 
main markets." 

Compressor technique and 
industrial technique were the 
strongest divisions, both in 
terms of results and orders. 

The compressor technique 
division saw aamftig K rise 45 
per cent to SKrLQShn, mainly 


because of increased Volumes 
which lifted sales by 16 per 
cent to SKr752bnu ..- 
. Orders were 14 per cent 
higher at SKr750bn- 7 . - : 

Profits in the industrial tech- 
nique division also benefited 
from higher volumes., rising 
105 per cent to SKr3Q8m. 

A weaker trend was seen- in 
the construction and mining 
division, where profits fell to 
{ ■iKiflEm from SKr97m because 
of restructuring costs. 

The company said it planned 
to close its Bremen drilling 
equipment plant in Germany, 
switching production to Orehro 
in Sweden to '-achieve 
synergies. - ^ 


Norsk Hydro upgrades PVC sites 


By Karen Fossil 
In Oslo 


Norsk Hydro, Norway's largest 
publicly-quoted company, 
plans to invest NKrTOOm 
(5102.9m) to increase the capac- 
ity of its PVC plants in the UK 
and Norway. 

It is also scrapping plans for 
a new plant in Rallies, Norway, 
and wffl not expand output in 
Btenungsunri. Sweden. 

The company will strengthen 
its position in the UK market 


by upgrading capacity by 
60,000 tonnes at its PVC plant 
at Ayclifie, north-east England. 
The plant has annual produc- 
tion capacity of 130,000 tonnes. 

Hydro is the UK's second- 
largest supplier of PVC and 
commands about 25 per cent of 
the market 

In Heroeya, Norway, where 
it has a PVC plant with an 
expected lifetime of no more 
than three years, the company 
intends to lift annual produc- 
tion by 15,000 tonnes to 80.000 


tonnes. Production in Norway 
is aimed primarily at the 
Scandinavian market, where 
Hydro has a 40 per cent market 
share. 

The company believes world- 
wide consumption of PVC will 
rise by 5 per cent annually 
towards the year 2000. 

"Today. PVC production in 
Europe does not fully cover 
demand, and PVC prices are 
rising.” said Mr Haakon Lang- 
balle, president of Hydro's 
petrochemicals division. 


CSM advances 
11% to FI 164m 


A vesta Sheffield returns to black 


By Christopher Brown-Homes 


CSM, the Dntch food and 
ingredients group, said net 
profit rose by LI .4 per cent to 
FI 164.1m ($94m) in the year to 
September 30, on turnover up 
4.6 per cent at FI 2.64bn, writes 
Ronald van de Krol in Amster- 
dam. 

The company, traditionally 
the first Dntch group to report 
annual resnlts, said it 
would announce the level of 
its 1993-1994 dividend on 
January 3. 


Avesta Sheffield, the 
Anglo-Swedish stainless steel 
producer, said yesterday 
Increased sales, hf ghw prices 
and cost-cutting bad underpin- 
ned a strong swing into the 
black at the nine-month stage. 

The group, 49.9 per cent- 
owned by British Steel, had 
profits of SKr858m (5116.2m) 
compared with a SKr77m loss 
in the same 1993 period, after a 
strong third quarter when 
profits surged to SKr427m 


from a SKrfjRm deficit 
Avesta forecast a further 
improvement Id the final throe 
months. It said volume and 
productivity gains achieved -in 
the first half would allow 
higher prices to translate into 
stranger results in the quarter. 

Mr Per Molin, president, 
said: "The strength of Euro- 
pean and world dwrnand has 
been main tarn eri through the 
summer period and appears to 
be firm into 1995. Prices and 
margins continue to improve.” 
The group saw nine -month 


sales rise to SKrBL3bn from 
SKrtO-Thn. Third-quarter sales 
were up 13 per cent at 
SKr3.97bn, in spite of the sear 
sonal holiday slowdown. 

Avesta said the recovery in 
the European stainless market 
had continued. It noted that 
European producers had 
increased deliveries of cold- 
rolled flat products fay 27 per 
cent in the third quarter, while 
prices were 24 per emit higher 
than in the .first three, months. 
In tiie US and Asian markets, 
demand was also strong. 


TELE COM 

WmKMMM ITALIA SpA. 


Boyijtsred Office in Turin 
Share Capital lit. 7,165.448,535.000 paid < 4 > 
Registered at the Court of Turin No. 131/17 Register of Companies. 
Fiscal Code 00580600013 


NOTICE OF SHAREHOLDERS' MEETING 


NINE MONTH INTERIM 


REPORT 

1994 


Investor Group 


Investor’s net worth on September 30 amounted to SEK 40,496 m. 
(Dec, 31, 1993 : SEK 37,493 m.), or SEK 203 (206) per share.” On 
November 21, its net worth amounted to SEK 43,237 m, or SEK 
217 per share. 


The value of Investor's portfolio of strategic holdings, adjusted for net 
changes, was SEK 28,896 m. (Dec. 31, 1993: SEK 27,964 m.), a 
decrease of 1 % from the beginning of the year. On November 21, its 
value was SEK 31,685 nt, an increase of 9% from the beginning 
of the year. 

The Investor Group’s income before tax amounted to SEK 2^84 m., 
against SEK 156 m. in the first nine months of 1993. 


The Group’s net debt on September 30 amounted ro SEK 4,608 m. 
(Dec. 31, 1993: SEK 4,850 m.) 


Saab-Scania 


Notice it hereby given ro oil ordinary Shareholders that on 9th December 1994 at 9.30 a.m. an Ordinary and Extraordinary Shaieholdon r MMting w3l take 
place in Turin of Sala Congressi in Via BertoJo. 34 lor the first call and. if necessary, for a second calf on 12fh December 1994. at the same time and place, to 
discust and retolve the tallowing 

AGENDA 

Ordinary part 

!) Nomination of two members of the Board and o substitute Auditor (resolutions according to Art. 2364, no. 2 of the Civil Code). 

2j Completion of the contract with reference to the appointment for the auditing and certification of the Company’s balance sheet for the three years 
1994 1996. 

Extraordinary part 

? J Authorisation to reduce the reserve arising from the revaluation of ex Italian law 72/ 1983 for the payment of tax on the companies’ net assets lor 1994. 
2) Proposal to increase the share capital for a sum of tit. 956,593,744,000 through the issue of 956,595,744 ordinary shares of nominal value lit. 1,000 eadi , 
dividend 1st January 1994, to be assigned to 5TET • Societi Finanzictria Telefonica p.A., for the credit given by the latter to the former company JnlEL 
S.p.A. (and today, consequently, TELECOM ITAUA S.p.A.). according to Italian law 531/1993, at the unitary price of lit. 4,700 eodt, lit. 3,700 of which 
surcharge, with exclusion of ihe option right; relotive resolutions and variations la AH. 5 ol the Company by laws. 

With reference only to the above mentioned extraordinary part of the agendo, in the event that the Meeting is notable to reach the necessary quotum even 
ot the second colling, os retired by the Civil Code, there will be a third colling of Shareholders for on Extraordinary Meeting in Turin at 9.30 o jn. on 14th 
December 1994 at the Salo Congressi m Via Bertoio. 34. 

Shareholders shell hove the right to attend the Meeting provided that, at least five days prior to the date set for the Meeting, they hove deported their share 
certificates at the Registered Office in Turin (Via Son Dolmoxzo, 15). at the General Offices In Rome {Via Flaminia, 189} and at the fallowing authorised 
agents: 

In Italy: 

Banco Commerciale ttaliona S.p.A.. Credits Italrano S.p.A., Banco di Roma S-p.A., Banco di No pod S.p_A.. Banco dr Sirifia S-p-A_, Banco Nazionale del 
Lovaro S.p.A.. fstifuto Bancario San Paolo di Torino S.p.A.. Monte dei fti»ch; di Siena. Banco di Sardegna S-p.A., Banco Nanonole deirAgricottura S.p.A., 
Banco Ambrosiano Veneto S.p.A., Banco Toscana S.p.A.. Credito Romagnofo S.p.A., Deursche Bank ip. A., CredEto Commerciale S.p.A.. Credito 
Bergamasco S.p.A., Banco Agricola Milanese S.p.A., Banco Nazionale delta Comunicazionl S.p-A., Banco di ChJovori e della Rroera Ugure S-p.A., Banco 
Lombardo S.p.A.. Banco Sallo S.p.A., Banco C. Steinhauslin & C S-p.A., Banco fideurom S-p.A., Gtibanlc N.A., tstftuto Central* cBBan<dteeBcmchieri5.p^. 
and its associated Banks, Banco Papolare di Novara, Banco Popolore di Milano, Banco Popdare dl Bergomo-Credito Vacedno, Banco fiapolare di lean 
S.p.A., Banco Popolore Commercio e Industria, Banco Popolore di Sondrio. Banco Anton iano, Associate Bonks of litituta Centrata delta Banche Popolari 
Itofione S.p.A., Cariplo-Cessa Ot Rriparmio delta Provineta Lombardo S.p.A„ Bonco CRT S.p.A., Banco Carige S-p.A.. , Cxmo di Khpomtio in Bologna 5. p_A., 
Casta di Risparmio di Triejte-Bonco S.p.A., ICCftf-kMutodi Credito delta Casse di Rispormlo Italione S.p.A., Caste di Rbparmm and the associated Monti di 
Credito w Pegno. htiiuto di Credito delta Casse Rurali ed Arrigione S.p.A., Monte fitoll S.p.A. for the shares they administer. 

Abroad: 

London; Banco Commerciale Itoikmo S.p.A. - 42. Gresham Street • EC2V 71A 

Credito Itahano S.p.A. - 17, Mootgote - EC2R 6HX 
Banco di Romo S.p.A. ■ 87, Gresham Street • EC2V 7NQ 
New York: Banco Commerciale Kaliano S.p.A. ■ One WtWiam Street • N.Y. 10004 

Credito lioliano S.p.A. - 375, Pork Avenue - N.V. 10152 
Bonco di Roma S.p.A. - tOO, WoH Street • N.Y. 10005 
faris. Banco Nazionale del Lavora S.p.A. - 26, Avenue dei Champs Etysdes - 75008 

Franklurt/ Main: htituto Bancario San Aaoia di Torino S.p.A. - Eschershelmer londttrou* 55 • D60322 

Zurich- Lavora Bonk A.G. • Tcdocker, 21 • 8001 

Buenos Aires: Bonco Nozionota del Lavora S.A. • Florida, 40 - 1005 

Th« report of the Board of Directors, of the Statutory Auditors ond the Independent Auditors, as wet! as the swam expert report ordered by the Chairman of 
the Turin Court, relative to the propose! of an increase in share capital, will be made available to Shareholders from 23rd November 1994 at the offices In 
Turin (Via Son Dalmazzo, 15) and Rome (Via Flwminia, 189). 

The file containing the above said infarmaKdn w[8 be sent directly to those Shareholders who normally attend the Meeting or to those who moke an 
immediate request using the following telephone numbers: +39 6 36001273, +39 6 36001274, +39 6 36001275. winch will remain open until 7th 
December 1994. 

Furthermore, horn the morning ol 28th November 1994 the aforesaid file can be collected in penotl front the above named offices in Turin and Rome. 


✓ - 
>"1 


tfoer 


i butt 

r of & 


Saab-Scania’s order bookings rose by 45% to SEK 24,700 (17,000) m. 
Sales amounted to SEK 22^08 (17,623) an increase of 26%. 

Saab-Scania’s operating income after depredation amounted to SEK 
2,318 (108) m. Income after financial items was SEK 2,182 
(-362) m. 

Saab-Scania’s income during the second half of die year is expected to 
be sig mfi ca n dy better than during the first half. 


NOTICE TO BEARERS OF “SIP 1991-1994" WARRANTS 


Notice if hereby given 10 beoren of "SIP 1991 • 1994" warrants, now known ai "TELECOM ITALIA 1991-1994" warrants, that the k»t day of quotation an the 
Stock Exchange of the aforementioned warrants will be 22nd December 1994, became 31st December 1994 hat been fixed as the deadline lor acceptance of 
requests to exerriwihe warrant!, in accordance with Art. 2 first comma ond Art. 3 of the relevant issue regulations. The next day the Stock Exchange Council 
fCondgJio di Bona) will see to cancelling the trflei from the official lias. 

Rome. 15 November 1994 


ON BEHA1F OF THE BOARD OF DIRECTORS 
THE CHAIRMAN 
Umberto S1IVESTW 






11 Investor’s net worth with Saab-Scania at an EBIT value was SEK 54,198 m., 
or SEK 272 per share. 








This is a summary of Investor’s nine month interim report 1994. The complete report can 
be obtained from Investor AB, S-1Q3 32 Stockholm, Sweden. Telephone +46-8-614 20 00. 


DO YOU WANT TO KNOW A SECRET? 

The IDA Gam Semtar wfl show you how the nance s REALLY woric. The otazhg 

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Technical Analysis Software 


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■ (0442) S7S015 * Fox 


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FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 


INTERNATIONAL COMPANIES AND FINANCE 


c ° v e^ t Danone acquires 
controlling stake 
,n Argent'ne group 


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French champion is left reeling on the ropes 

Alcatel Alsthom has been shaken by shifting markets and corruption probes, reports John Ridding 


By John RMding (n Paris 

Danone, France’s largest food 
group, yesterday took a signifi- 
cant step in its strategy of 
expanding in South America, 
announcing it was paying 
US$240m for a controlling 
stake in Bagley. an Argentine 
biscuit manufacturer. 

Under the terms of the agree- 
ment, which gives Danone its 
first foothold in Argentina, the 
French group is to take a 
shareholding of just over 50 
per cent in Bagley. 

The Argentine company, 
founded in 1864. has more than 
30 per cent of the country's bis- 
cuit market. It has an annual 
turnover of about USS300m, SO 
per cent of which comes from 
biscuit sales. 

The company's principal 
brands include Criollitas. Tra- 
viata and Kesitas. It has two 
production sites, in Buenos 
Aires and in San Luis. 

According to Danone, the 
Argentine biscuit market is the 
most dynamic in Latin Amer- 
ica, expanding by 1 1 per cent 
in 1993. In terms of size it is 
second to Brazil, where Dan- 


one is present in biscuits and 
yoghurt products. 

Yesterday's deal is the latest 
in a series of acquisitions by 
the French group, which is 
seeking to expand its presence 
in Asian and American 
markets and in fast-growing 
sectors. 

In May. when the group said 
it was changing its name from 
BSN. it announced that it was 
taking a 49 per cent stake in 
Campineira dc Alunentoa, the 
Brazilian biscuit group, estab- 
lishing a dairy Joint venture In 
Russia, and raising from 24 per 
cent to 100 per cent its holding 
in San Miguel, the Spanish 
brewer. Danone has subse- 
quently expressed Interest in 
acquiring the Col man's food 
and drinks businesses of Reck- 
itt and Colman of the UK. 

A spokesman Tor the group 
said that it was not necessary 
to raise fresh capital for the 
acquisition of Bagley. He said 
that the gearing level of the 
company was about 25 per 
cent, based on net debts of 
FFrllbn (S2.06bn> at the end of 
June. Annual cash flow at Dan- 
one is about FFr3.5bn. 


Bologna banks plan a 
‘merger of equals’ 


By Andrew Hill in Milan 

Credito Romagnolo and Cassa 
di Risparmio in Bologna yes- 
terday claimed their planned 
merger would eventually real- 
ise commercial and efficiency 
savings of more than L700bn 
($435. 6m) before tax over 10 
years, and improve customer 
service. 

The two banks, both based in 
Bologna, announced a merger 
at the beginning of this month, 
shortly after Credito Italiano 
(Credit) of Milan revealed it 
was planning a L2,000bn bid 
for control or Credito Romag- 
nolo (Rolo). 

Yesterday the groups’ chair- 
men refused to take questions 
about the promised hostile bid 
from Credit But they contin- 
ued the policy of stirring up 
local pressure against the 
Milanese bid by underlining 
the strong regional identity of 
their own banks. 

The merger, which will be 
submitted to Rolo's sharehold- 
ers for approval on December 
19. has a head-start over Cred- 
it’s plan because it has already 
been approved by the Bank of 
Italy, which supervises the Ital- 


ian banking sector. Credit has 
remained silent about its bid 
plans, while the central bank 
continues to examine the pro- 
posals. 

Rolo, whose shares are 
quoted in Milan, will merge 
with CAER, the unquoted par- 
ent of Cassa di Risparmio in 
Bologna (Carisbo). 

The banks yesterday 
described their plan as “a 
merger of equals'*. The founda- 
tion which controls CAER will 
have a 30.7 per cent stake in 
the enlarged group, and former 
Rolo shareholders will control 
64*3 per cent 

The two companies plan to 
protect minority shareholders' 
interests with a list-voting 
system allowing them to nomi- 
nate board members. Rolo's 
limit of 10 per cent on voting 
rights will also be maintained j 
at all ordinary shareholder | 
meetings. 

Together the two banks will 
have assets of L61,056bn, and 
more than 500 branches, mak- 
ing them the 10th largest bank 
in Italy’s fragmented financial 
sector. They also claim they 
would be the fourth most effi- 
cient bank. 


L ike a punch-drunk 
boxer. Alcatel Alsthom 
is reeling from a series 
of body blows that liave rocked 
the French telecoms, transport 
and engineering group since 
the beginning of the year. 

Since Monday, Mr Pierre 
Cuicbet. head of Alcatel CIT, 
the group's telecoms equip- 
ment subsidiary, has been 
j detained in prison by an inves- 
I ligating magistrate probing 
! alleged overbilling of France 
l Telecom, the state telecoms 
operator which is one of the 
1 company's largest clients. 

(n July, Mr Pierre Suard, the 
i company chairman, was placed 
under investigation on charges 
he used company funds for use 
on his private properties. 
Alcatel Alsthora's engineering 
joint venture with GEC of the 
UK has endured a strike which 
has halted production at sev- 
eral factories at the Belfort site 
in eastern France since the 
beginning of the month. It has 
Issued two warnings concern- 
ing its expected profits for the 
year, while its share price has 
collapsed, falling by more than 
50 per cent since its January 
high of FFr913. 

The blows are all the more 
spectacular given the compa- 
ny's previous rise to the top of 
French industry. After taking 
the helm in 1986, Mr Suard 
built the company into one of 
the country's most profitable 
and most respected business 
groups. In 1993, it racked up 
profits of FFr7.1 bn ($1.33bn), 
more than any other private- 
sector French group. 

This year, net profits of 
about FFr4bn are expected - 
still a tidy sum. but tbe fust 
fall since tbe company's rapid 
expansion was launched in 
1987 with the acquisition of the 
European telecoms equipment 
operations of ITT of the US. 
Combined with its otlier woes, 
this has left investors shaken 


and rivals with a sense of 
Schadenfreude. 

“It Is quite a reversal,” says 
one Paris banker. “People are 
now asking whether the giant 
has feet of clay.” That is one 
important question. Others 
concern the reasons behind the 
company's change in fortunes 
and whether it can respond to 
such setbacks. 

The company's ordeals 
partly reflect two fundamental 
trends confronting French 
Industry; a campaign against 
corruption launched by an 
increasingly assertive judi- 
ciary, and the weakening or 
traditional ties between Euro- 
pean state monopolies and pri- 
vate-sector suppliers. “Alcatel 
is a symbol of the challenges 
facing some big French indus- 
trial groups," says one elec- 
tronics analyst. 

On the first count, Alcatel’s 
legal woes are among the most 
intractable of a series of cor- 
ruption investigations which 
have hit several French busi- 
ness leaders. Although little 
has been heard of Mr Suard's 
personal case since July, when 
he was placed under investiga- 
tion, the probe into Alcatel 
CIT, the company's telecoms 
equipment subsidiary, has 
broadened. 

Mr Jenn-Marie D'Huy. the 
magistrate pursuing the case, 
is assessing whether the com- 
pany established a system of 
overcharging France T&l&com 
for equipment. He has widened 
the investigation from trans- 
mission systems to alleged 
malpractice in the supply of 
switching systems. 

Alcatel firmly rejects any 
wrongdoing with respect to the 
ongoing probes. Mr Suard lam- 
basted the failure to observe 
judicial secrecy in his investi- 
gation and has attacked the 
high-profile methods used by 
the magistrate. Mr Gerard 
Dega. vice-chairman of Alcatel 


Alcatel Alsthom 

Share pitas (FFrf 
900 | 


660 — 1 

600 1 


— l.— i.— j — 

IBM 

Source: Company 4 FT Graphite 

CIT, said on Tuesday that “this 
claim of overbilling is aberrant 
and absolutely does not apply**. 

The Implications, however, 
are potentially worrying. “It Is 
serious," says Professor Elle 
Cohen, director of CNRS, a 
research institute. He claims 
Alcatel, like other European 
telecoms suppliers, has enjoyed 
a privileged relationship with 
the state telecoms monopoly 
but that such close ties are 
unravelling. This trend is a 
result of deregulation and 
increasing emphasis on profit- 
ability by national operators 
preparing for privatisation and 
increased competition. “The 
big problem for Alcatel is that 
this change in the relationship 
is now taking place in a poi- 
soned climate," says Prof 
Cohen. 


Nat profits (FFr bn) 
8 



: -M 


^ r ¥4 


^[Pien^luani, c halnnani «*> 1991 1992 1993 ° 


A lcatel does not break 
down Its sales figures 
with respect to clients, 
but France Telecom is esti- 
mated to account for half 
Alcatel CIT's annual sales of 
FFri4bn. Contracts for the 
next two years are being nego- 
tiated. 

Moves towards liberalisation 
in the telecoms equipment 


market have cost the company 
dear in Germany. The shift by 
Deutsche Telekom towards 
international specifications 
and tenders for its supplies has 
prompted a sharp fall in prices 
for companies such as Siemens 
and Alcatel. The average price 
of switching equipment has 
fallen by about 15 per cent in 
Germany this year. 

At Alcatel SEL. the compa- 
ny's German subsidiary, the 
effects have been devastating. 
Mr Gerhard Ziedler, the chair- 
man of Alcatel SEL says losses 
are DMlm ($643,500) a day. 

Losses in Germany are one 
of the principal factors in the 
forecast reduction in profits at 
the group and have prompted a 
significant restructuring. This 
month Alcatel SEL said it 
planned to cut 5,300 jobs - 
almost one-quarter of the 
workforce - by the end of 1995. 

Industry observers have wel- 
comed the move. “They are 
finally biting the bullet in Ger- 
many," said one electronics 
analyst at a French securities 
company. But he expressed 
concern that Alcatel had taken 
so long to realise the extent of 
the problem. 

The bigger question is 


whether Mr Suard's group can 
respond to the threats facing 
it. The chairman believes it 
can, arguing that 1994 will bo 
the low point of the group's 
fortunes and next year will see 
an improvement. 

Mr Suard will be helped in 
his struggle by several positive 
factors. In particular, Alcatel 
Alsthom is buttressed by its 
diversity, in terms of products 
and geographical spread, and 
by its strength in new technol- 
ogies. While the European tele- 
coms market is proving an 
Achilles' heel, the company 
has made significant progress 
in emerging markets, particu- 
larly China. This year it 
expects to supply the Chinese 
market with about 7m lines of 
switching equipment, more 
than for the whole of Europe. 

Several operating divisions 
are also performing strongly. 
The acquisition this year of 
STC Submarine Systems from 
Northern Telecom of Canada 
has strengthened the cable 
division. In the US. Alcatel 
Network Systems has won sig- 
nificant broadband and switch- 
ing equipment contracts from 
Pacific Bell, Bell Atlantic and 
other US telecoms groups. 


BCE warns that 22-year run of 
dividend growth may be ending 


BCH cuts payout after 
profits tumble 37.6% 


By Bernard Simon in Toronto 

BCE. the Canadian tele- 
communications group, has 
raised its dividend for the 
twenty-second consecutive 
year, but warned that the 
increase may be the last for a 
while. 

The quarterly dividend, pay- 
able to shareholders registered 
on December 15, will rise 
by one cent a share to 68 
cents. 

The Montreal-based com- 


pany, whose subsidiaries 
include Northern Telecom and 
Bell Canada, the country's big- 
gest phone company, said that 
it planned to review its divi- 
dend policy next year “in the 
light of widespread changes in 
the telecommunications indus- 
try, which are creating growth 
opportunities for investment in 
new technologies and in new 
businesses”. 

Separately, Bell Canada 
International, BCE's offshore 
arm, named Mr Robert Kear- 


ney, a former chief executive of 
Bell Canada, to spearhead its 
expanding UK interests. 

Belfast-born Mr Kearney, 
who was due to retire at the 
end of this year, will become 
deputy chairman of Bell Can- 
ada International Management, 
based in London. 

BCE has a 20 per cent stake 
in Mercury Communications 
and a 42 per cent interest 
in Bell Cablemedia, the UK's 
third-biggest cable-TV 
operator. 


By Tam Bums In Madrid 

Banco Central Hispano (BCH). 
Spain's second biggest bank, 
yesterday cut its interim divi- 
dend by 31.8 per cent from 
PtallO to Pta75. 

At the nine-month stage 
BCH posted a 37.6 per cent foil 
In its pre-tax profits to 
Pta45.3bn <$349m) after putting 
aside Ptal06.6bn in provisions, 
33.7 per cent more than in 
January-September last year. 

The dividend move, which 
was welcomed by analysts and 


Why history has a habit of repeating itself at Hilton Hotels 

Chief executive Barron Hilton is once again considering a sale or break-up of the group, writes Richard Tom kin s 

H ilton Hotels, the US to a charity set up to support Hilton Hotels Hilton Hotels' past financial Hawaii. Mr Harold Vogel an hotel business tl 

hotel and casino Roman Catholic nuns. performance has not been par- analyst at Merrill Lynch, says: family name, 

group, has enjoyed Conrad’s son Barron, chief ^ ^ ^ ticularly impressive. Net “The brand name alone must Mr Terry Bivei 


H ilton Hotels, the US 
hotel and casino 
group, has enjoyed 
threequarters of a century of 
independence since Conrad 
Hilton went into business with 
his first hotel in Cisco. Texas, 
in 1919. Now, however, that era 
may be coming to an end. 

Last week Hilton Hotels 
announced that it had 
appointed Smith Barney, the 
Wall Street investment bank, 
to explore the possibilities for 
“enhancing shareholder 
value". Top of the list of 
options was a possible sale or 
break-up of the company. 

It was an unusual move: 
companies quoted on the stock 
market are more often seen 
resisting bids than inviting 
them. But Hilton Hotels’ his- 
tory helps explain why. 

When Conrad Hilton died in 
1979 - after a colourful life 
which included three mar- 
riages. one to the actress Zsa 
Zsa Gabor - he left nearly 
everything, including his 28 
per cent stake in HU ton Hotels, 


to a charity set up to support 
Roman Catholic nuns. 

Conrad's son Barron, chief 
executive of the company since 
1966. spent 10 years challeng- 
ing the will, arguing that his 
father had wanted the com- 
pany to stay under the family's 
control. 

Within weeks of triumphing 
and taking most of the chari- 
ty’s shares, he was inviting 
offers, saying he was only 
doing what his father would 
have done if he had seen the 
prices people were paying lor 
prime hotels. 

The expected rush of buyers, 
however, did not emerge. Some 
potential US buyers were out 
of action after the collapse of 
tbe junk bond market in 
autumn 1989. Japanese inves- 
tors stayed away because of 
the controversy aroused by 
other recent Japanese acquisi- 
tions in tbe US; and other for- 
eign buyers may have been 
deterred by the fact that Hilton 
Hotels had largely removed 
itself from overseas markets by 


prica® 




ISM 86 SS 90 92 93 IBM 86 68 90 92 

Sfluroc tX aa abo am 


selling its HUton International 
division in 1966. 

In the end, only two offers 
were received, both worth 
about STC a share - less than 
Mr Hilton was prepared to 
accept But it was perhaps only 
a matter of time before he 
returned to try again. 

The company today has 


more than 200 hotels in the US. 
mostly trading under the Hil- 
ton name, and a handful over- 
seas. mainly trading under the 
Conrad name. More than half 
its operating profits - 64 per 
cent last year - come from Us 
gaming interests, consisting 
mainly of its Nevada hotel-casi- 
nos. 


Hilton Hotels' past financial 
performance has not been par- 
ticularly impressive. Net 
income has moved sideways 
for a decade, fluctuating 
around the $100m mark (see 
graphic): last year the com- 
pany made SHXS.lm. 

This year, however, profits 
have been picking up. 
Although the gaming side has 
been suffering from the effects 
of increased competition in Las 
Vegas, the hotels have been 
benefiting from the strength of 
the US economy, which has 
brought beLter occupancy lev- 
els and rising room rates. Net 
income in the quarter to Sep- 
tember rose by 32 per cent to 
$27 m. 

Stock market analysts say 
the company should fetch at 
least $80 a share, or $3.8bn. in 
an outright sale. Mr Bruce 
Thorp, an analyst at PNC 
Bank, points out that the com- 
pany has some very attractive 
assets, such as the Waldorf-As- 
toria hotel in New York and 
the Hilton Hawaiian Village in 


Hawaii. Mr Harold Vogel, an 
analyst at Merrill Lynch, says: 
“The brand name alone must 
be worth $300ro to $400m.” 

One company cited as a pos- 
sible buyer is ITT, the US 
finan cial, leisure and manufac- 
turing conglomerate. ITT 
recently put its ITT Financial 
subsidiary on the market at an 
asking price of $3bn to $4bn, 
saying it wanted to use the 
proceeds to expand in leisure 
and entertainment. ITT 
already owns the Sheraton 
hotel chain and has been plan- 
ning to enter the Las Vegas 
gaming market 


A nother possible buyer 
could be Ladbroke, the 
UK leisure and enter- 
tainment group; Ladbroke 
already owns Hilton Interna- 
tional and has been seeking to 
expand its gaming interests. 

Stiff, Mr Vogel thinks Mr Hil- 
ton may consider alternatives 
to an outright sale: for exam- 
ple, he could spin off the gam- 
ing interests and keep the 


hotel business that bears the 
family name. 

Mr Terry Bivens, an analyst 
at Argus Research, agrees. “Mr 
Hilton has some very definite 
tax considerations at this 
point," he says - meaning that 
if Mr Hilton were to sell his 
245 per cent stake in the com- 
pany for cash, virtually all his 
profits would be taxable. Some 
other kind of deal - for exam- 
pie, a spin-off involving a stock 
swap - might give him the 
opportunity to take his profits 
over a longer period. 

Not surprisingly, the uncer- 
tainty has led to caution in the 
stock market. Last time HUton 
Hotels was put up for sale, 
many investors got their fin- 
gers burned: the company's 
share price plunged from 
$115% at the peak of optimism 
about a deal to $49% when the 
auction was called off. On 
Wednesday, the shares closed 
at $69%, well below what ana- 
lysts think an outright sale 
could fetch. Wall Street, it 
seems, has a long memory. 


Ironically, the profitability of 
GEC Alsthom - which manu- 
factures power generating and 
transport equipment - has 
been a factor in the strike at 
several of its plants. 

Trade unions, which are 
seeking to press companies to 
raise pay against a background 
of economic revival, claim that 
the company's financial posi- 
tion justifies their demands for 
a monthly salary increase of 
FFr1500 - even though weak- 
ness in markets for some of its 
products, such as the 
high-speed train, the TGV, has 
prompted a cautious outlook 
from management. 

The dispute is now winding 
down following a vote on Tues- 
day in which the majority of 
workers favoured a return to 
work and a call yesterday by 
the communist-led CGT union 
for the removal of pickets. 


A s for new products, tbe 
group reports strong 
success in its ATM and 
SDH systems. AIM, the latest 
generation of switching and 
transmission systems, is expec- 
ted to play a strong role in the 
upgrading international tele- 
communications networks and 
the shift towards information 
superhighways. 

Similarly, the SDH. a digital 
transmission system, is enjoy- 
ing strong demand, particu- 
larly in the US. where the com- 
pany expects to book orders of 
$700m this year, $200m more 
than expected. 

Many industry observers 
concur. “Alcatel is in a solid 
position for the medium term," 
says Mr Jean Danjou. an ana- 
lyst at Societe Gftteraie. 

The problem, however, is the 
short term. The group is pre- 
cariously positioned, con- 
fronted by a downward trend 
in profits and an increasingly 
complex legal tangle. It has yet 
to demonstrate it can respond. 

ABB merges 
robotics and 
paint units 

By Andrew Baxter 

ABB, Europe’s largest 
I electrical engineering group, is 
merging its robotics and paint 
finishing businesses into a sin- 
gle company with 3.700 
employees worldwide and 
expected sales this year of 
$l.ibn. 

The new company, ABB 
Flexible Automation, will 
account for about 10 per cent 
of ABB’s industrial systems 
and products segment. 

It represents another step by 
Zurich-based ABB to simplify 
its structure, save on adminis- 
trative costs and boost its mar- 
ket presence. 

The former ABB Robotics 
claimed to be the world's larg- 
est supplier of robots and the 
paint finishing business was a 
leading supplier in the automo- 
tive paint systems market, 
worth about $25bn a year. 

Both have been expanding 
through organic growth and 
acquisitions of companies such 
as Trallfo and Hamburg. 

Mr Stelio Demark, president 
of the new company, said yes- 
terday that, by merging the 
two businesses and exploiting 
their synergies, “we are in a 
good position to improve the 
overall profitability of our 
businesses". 

The merger will not lead to 
any job cuts, said Mr Roland 
Nordstrom, chief executive of 
the UK arm of ABB Flexible 
Automation. 

But savings could be made 
by merging administrative and 
other functions, and co-operat- 
ing in research and develop- 
ment. he said. 

The new name is seen by 
ABB as better reflecting the 
real capabilities of the busi- 
ness. 


institutions, is an unusual step 
for a domestic bank. 

Ms Anna Macdonald of bro- 
kers Smith New Court said the 
cut had been expected. “When 
a bank is losing deposits and 
loans it has no option but to 
strengthen its balance sheet” 

BCITs decision comes as it is 
improving its core banking 
business. At the end of Septem- 
ber it had raised operating 
profit by 17.5 per cent to 
Ptal04.9bn and net interest 
income by 4.1 per cent to 
Pta235-3bn. 


HHgifAN?* 



Presidenza del Consiglio dci Minislri 
Regione autonoma della Sardegna Provinciu di Cagliari 

Comunc di Carbon ia Cornune di Gonnesa Comunc di Ponoscuso 

Concession for the operation of the Sulcis coal mine and the construction 
and operation of an associated coal gasification heat and power plant 

Notice 

The Steering Committee responsible for the awarding of the concession for the completion, operation and 
maintenance of the Sulcis coal mine and the design, construction, operation and maintenance of an associated 

. . J lu huilt • n rh., G.llnic VAldLMantd ..M>. in C..n4lni.. i — r. - ftk., Knnl 


maintenance — — 

al gasification heat and power plant to be built in the Sulcis-Iglesiente area in Sardinia informs that the final 
date for the submission of the requests to participate in the international tender procedure is extended until 
January 16, 1995 and that visits to the coal mine will also be permitted during the pre-qualification period. 

Further information on the concession and the procedure for pre-qualification is available at the following 
address: 

Comitato di Coordinamento 

c/o Prcsidcnza della Giunta della Regione Autonoma Sardegna 
Vialc Trento 69, 09123 Cagliari - ITALIA 
Tel. (39 70) 6062223 - 6062406 
Fax. (39 70) 6062454 TELEX 790344 PR EG I R I 


Chris tiania Bank og Kreditkasse 

I'liKJrporaitJ in ith- Kingdom o) Nitvsty vuh Smiled huhilily) 

U.S.$ 100.000,000 

Floatina Rale Subordinated Notes Duo May 1 995 
(of which U.S. *75.000. 000 has been issued as friiliol Tranches/ | 
Notice is hereby given that the Rate of Interest has been fixed at 
10.5% and that (he interest payable on (he relevant Interest Payment | 
Date May 25, 1995, against Coupon No. 20 in respect ot 
U5$ 1 0,000 nominal of (he Notes will be USS527.92 andin respect 
of US$550,000 nominal of the Notes wiH be USS1 3,1 97,92. ! 

aycGfifeil^N /Lfbsuer^vicesl, Agent Bonk Cj I IBANtiG) J 


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the rate ot interest on the Notes will 
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Principal Paying Agent 

■ ROYAL BANK 

§03 OF CANADA 


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£250000,000 

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In accordance with the terms and 
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FINANCIAL TIMES 


FRIDAY NOVEMBER 


251994. 


INTERNATIONAL COMPANIES AND FINANCE 


Bad loans continue to hit Japan’s banks 


By Gerard Baker In Tokyo 


Rising interest 
rates, falling 
demand for 

bank kadiae 

and the con- 
BanMng tlnuing need to 
write off bad 


loans combined to produce 
another grim reporting period 
for Japan’s leading banks in 
the six months to the end of 
September. 

Aggregate pre-tax profits at 
the 11 “city" banks, the coun- 
try's main retail banks, fell by 
more than 40 per cent from the 
same period a year earlier. 
Operating profit from the 
banks' core business activities 
declined by 6 per cent 

During the period both 
short-term and long-term inter- 
est rates ended their three-year 
decline and since the summer 
have been rising steadily. The 
structure of the city banks' 
assets and liabilities means 
that their borrowing costs 
change more quickly than 
the rates at which they lend. 
As rates began to rise, there- 
fore, their already wafer-thin 
margins were squeezed 
further. 

Worse, in spite of gradual 
economic recovery, damand for 
bank lending remains 
depressed as companies con- 
tinue to adjust their balance 
sheets to rid themselves of the 
over-accumulation of capital 
investment in the late 1980s. 


Interim results to September 1994 (Ybn) 

Bank 

Operating 

revenues 

Change on 
y*ar(%) 

Recurring 

praflts* 

Change on 
year {%) 

Net 

profits 

Change on 

year (%) 

Non-perforntihg 

loans 

Change on 
year (%) 

Sumitomo. 

1,359.9 

+1.9 

41.1 

-35.6 

24.5 

-19.1 

1.196 

+83.4 

DaMchUfangyo 

1,169.8 

• ^8.5 

25.5 

+-23.9 

16.2 

+0 2 

1,278 

-4SL3 

Mitsubishi 

1,431.6 

+G.7 

7.9 

-83.1 

16.4 

-39.0 

555 

-17.4 

Sanwa 

1,284.6 

-2.7 

34.4 

-49.0 

30.4 

-23.6 

SOI 

-10.9. 

B4 

1,297.3 

-3.0 

15.0 

-53.0 

13.0 

-49.6 

1.107 

-1.1 

Sakura 

1,289.0 

-6.3 

40.6 

+15.0 

16.2 

-7.3 

1/447 

-12J 

Bar* of Tokyo 

7075 

-9.5 

30-8 

-37.3 

34.6 

+14.7 

231 

-36 JO 

Taka' 

697.1 

-22 a 

10.0 

-18.3 

9.6 

-15.7 

766 

-2.0 

Oalwa • ... 

554.8 

+22J3 

10.5 

-48.6 

7.4 

-1 3-0 

310 

-53.4 

Aaahi 

586.0 

-14.6 

15.3 

-60.1 

10.4 

+3.0 

479 

-20.0 

Hbktekia-Tataishoku 

224.0 

-10.2 

2.4 

-70.5 

2.6 

*42.6 

495 

-13L2 


■anaw awaanewy nw 


Soiw: emery nfipcrfu 


Total lending by the main 
banks has been registering 
consistent monthly falls for the 
last six months. The slump In 
demand caused a fall in com- 
bined operating revenues of 5 
per cent from, a year earlier to 
Y10,6Q2bn (JlOSm). 

At the pre-tax level, banks 
continued to suffer sharp falls 
as a result of their belated, but 
increasingly aggressive, provi- 
sioning for bad loans. Write- 
offs of non-performing loans 
were Yl.34fl.8bn, up by 35 per 
cent on a year earlier. 

The total of disclosed out- 
standing non-performing loans 
was Y8.726bn, down by Y222bn 
from the end of March. How- 
ever, these figures include only 
loans to bankrupt customers 
and loans on which no interest 
has been received for at least 
six months. They do not 
include restructured loans. 


where interest rates have been 
cut to keep borrowers afloat. 
Many analysts believe that if 
these figures were added to the 
disclosed bad loan figure, total 
non-performing loans would 
double. 

Most banks continued to off- 
set the damaging effects of the 
write-offs on their profits by 
selling part of their substantial 
holdings of equities in other 
companies. The largest six 
banks sold stocks on average 
to the value of two-thirds of 
their write-offs of bad loans. 
Without such sales profits 
would have been substantially 
lower. 

Against the trend, and ana- 
lysts’ expectations, two of the 
city banks managed to report 
increases in pre-tax profits. 
Sakura Bank, which has one of 
the highest proportions of non- 
performing loans on its books. 


saw pre-tax profits rise by 15 
per cent to Y40.6bn. 

However, two factors helped 
the bank's performance: it sold 
the largest amount of equities 
of any of the banks - a total of 
Y153bn - and at the same time 
wrote off a smaller proportion 
of its bad loans. As a 
result the bank's disclosed bad 
loans, at Y1.44€bn. are still 
above 4 per cent of its total 
loans. 

Dai-Ichi Kangyo Bank, which 
saw pre-tax profits rise by 24 
per cent to Y25.5bn, also wrote 
off a relatively small amount of 
non-performing loans. 

The unique treatment of bad 
loans by Japanese banks was 
challenged in the wake of the 
mid-term results by a senior 
managing director at the larg- 
est bank. Mr Yoshifumo Nishi- 
kawa, of Sumitomo Bank, said 
it was time for banks to be 


more open about their non-per- 
forming loan totals and to 
move in to line with interna- 
tional practice by disclosing 
the real totals including 
restructured loans. 

S umi tomo has been the 
quickest of the banks to 
acknowledge the scale of its 
bad loans, and yesterday 
announced, that it had written 
off Yl96.7bn in the six months 
to September, and planned to 
write off an additional Y300bn 
in the second half of the year, 
compared with Y228.4bn for 
the whole of the previous 
financial year. 

The depressed lending mar- 
ket forced most banks to fore- 
cast substantial falls in operat- 
ing, pre-tax and net profits for 
the full year to next March. 
The backlog of bad loans is 
Likely to take several years to 
clear. 


Japan Telecom slips 42% to Y6.16bn 


By Our Financial Staff 
in London 


Japan Telecom yesterday 
announced a 42 per cent slide 
in Interim unconsolidated 
recurring profits - before 
extraordinary items and tax - 
to Y6.16bn ($63m) from 
Y10.63bn a year ago. 

JT is one of the leading 
domestic long-distance 
telecommunications concerns, 
and listed on the second 
section of the Tokyo and Osaka 
stock exchanges in September 
this year. 

At the net level, profits 
declined by 29 per cent to 
Y4.05bn, compared with 


Y5.66bn, on sales 36 per cent 
higher at Y149.75bn. compared 

with Y110.38bn. 

JT attributed the rise in 
sales largely to long-distance 
domestic phone services and 
its personal handyphone 
system (PHS), launched with a 
Tokyo Electric Power 
subsidiary. By products, 
domestic long distance and 
public telephone line service 
sales grew 36 per cent to 
Y132.77bn, lease line service 
sales grew 5-4 per cent to 
Yll^Obn. and PHS sales were 
almost three times higher at 
Y5.78bn. 

There was a steep drop in 
operating costs to Y33.15bn 


from Y51.14bn as a result of 
sharp cuts in retail, 
advertising, personnel and 
management costs, JT 
reported. However, the 
operating profit advanced only 
0.1 per cent to Y16.29bn 
because of a YEL71bn access 
charge paid to Nippon 
Telegraph & Telephone (NTT) 
to connect JTs lines to NTT’s. 
Previously, the access charge 
had been added to customers' 
bills instead of being paid 
directly by Japan Telecom- 
Japan Telecom also reported 
an Y5.47bn fee for listing on 
the Japanese equities market 
in September, affecting 
earnings growth at pre-tax 


and net profit levels. 

For the full year to 
end-March 1995. Japan Telecom 
is forecasting recurring profits 
of Y17bn. against an earlier 
forecast of Y16.02 and last 
year’s actual Y16.23bn. net 
profits of Y9.2bn (Y8.54bn, 
Y8.42bn) and sales of Y309bn 
(Y325.47bn. Y250.75bn). 

In Tokyo yesterday, Japan 
Telecom's share price closed 
Y18.000 lower at Y965.000. 

In August, Japan Telecom 
and Nissan Motor announced 
they would establish a joint 
venture company, called 
Digital Tu-Ka Chugoku. to 
provide a mobile phone 
business in western Japan. 


ITC plans move 
into food and 
power sectors 


ITC. the Calcutta-based 
conglomerate which includes 
India’s largest tobacco com- 
pany, said it planned a diversi- 
fication into the food and 
power sectors in order to grow 
faster and achieve group turn- 
over of $6bn by the turn of the 
century. Renter reports from 
Calcutta. 

“Our strong finances and 
managerial strengths will help 
us in our diversifications and 
make us a growth-oriented and 
profit-driven company within 
the next few years,” ITC's 
chairman, Mr Krishen Lai 
Chngh, said yesterday. 

Today, the company is due to 
announce half-year results to 
the end of September. It 
reported sales of Rs23.88bn 
($761m) and a net profit of 
Rs2.06tm for the year to last 
March. ITC has 60 per cent 
share India’s cigarette market. 


Optus threatens to drop plans 
for national cable-TV network 


By Nikki Tait in Sydney 


Optus Vision, the recently- 
formed joint venture involving 
Mr Kerry Packer's Nine Net- 
work, Continental Cablevision 
of the US and Australia's 
Optus Communications, yester- 
day threatened to drop its 
plans to build a national cable 
network for Australia after the 
federal government said it 
would allow duplicate cabling 
by rival provider Telstra. 

Telstra, better known as 
Telecom in its home market 
has recently linked with Mr 
Rupert Murdoch’s News Corpo- 
ration to develop a cable infra- 
structure, primarily for the 
provision of pay-TV. The Optus 
Vision network, by contrast, 
would be used for pay-TV and 
interactive services, but 
would also aim to carry 
local telephony faculties. 


In a long-awaited statement 
yesterday, Mr Michael Lee, the 
federal communications minis- 
ter, said that monopolies in 
cable infrastructure would not 
be allowed, and that the gov- 
ernment would not act to stop 
duplication of cable networks 
being laid by the Optus Vision 
and Telecom/News Corporation 
consortia. 

“I see no merit in either 
myself or any regulator draw- 
ing lines on maps to give carri- 
ers monopolies over this infra- 
structure,” he said. 

Optus Vision had proposed a 
mechanism by which the two 
network providers would not 
build rival cable networks in 
any area before one cable was 
built to all populated areas of 
Australia. After Mr Lee’s state- 
ment, it noted that if it pulled 
out of the infrastructure race, 
Telecom's monopoly over local 


telephone services would be 
preserved. “The prospect of 
local phone calls becoming 
cheaper will effectively disap- 
pear," said Mr Bob Mansfield, 
chief executive of Optus. 

However, Mr Lee said he had 
no intention of backing down. 
“If the price of Optus entering 
this market to compete is that 
they have to be given a monop- 
oly over part of the country, 
then that’s a price the govern- 
ment is not prepared to wear," 
he said 

Optus Vision said that, if the 
government stance did not 
change, it would seek to 
become a pay-TV service pro- 
vider on the Telecom infra- 
structure “provided it obtains 
assurances from the govern- 
ment that the same carriage 
rates will be available to it as 
are available to the Telecom/ 
News joint venture." 


Everbright 
buys stake 
in insurance 


By Louise Lucas 
in Hong Kong 


China Everbright group, a 
diversified mainland conglom- 
erate with activities ranging 
from financial services to 
property development and 
trading, is to pay HK$555m 
(US$72m) for a 5 per cent stake 
in National Mutual Asia, the 
Hong Kong listed arm of the 
Australian insurance group. 

The National Mutual Group 
will take an 8.7 per cent share- 
holding in China Everbrigfat- 
IHD Pacific, which is con- 
trolled by the Hong Kong 
listed China Everbright Inter- 
national, for HK£l68m. 

The deal is designed to far- 
ther National Mntual's plans 
to penetrate the mainland 
insurance market, which is 
gradually opening up to for- 
eign groups. Securing 
a China partner will help 
National Mutual enter the 
market and develop business 
there. 

Mr Wang Take, the vice- 
chairman and chief executive 
offic er of China Everbright- 
1HD, will join the hoard of 
National Mutual Asia. A for- 
mal deal is expected to be com- 
pleted next month. 


NEWS DIGEST 


Hagemeyer to 
acquire 25% of 
Schweitzer 


Hagemeyer, the Dutch-based trading gr oup, is 
to acquire a 25 per cart stake in Schweitzer, 
the Austrian electro technical materials distrib- 
utor, as a first step to wards acquiring majority 
control later in the 1990s, writes Ronald van 
de Krol In Amsterdam. 

The Austrian company, the largest of its 
lcfTiri in the eastern part of the country, has 
turnover equivalent to more than FI 150m 
($S5m) and a workforce of 200. It is bang sold 
by Bank Austria Handfilsholding- Fi nanci a l 
details were not disclosed. 

Hagemeyer described the Schweitzer deal , 
which must stiQ be approved by Austria’s car- 
tel authorities, as giving it an important gate- 
way to markets in eastern Europe, to reeent 
yeans Hagemeyer has made a series of electro- 
technical acquisitions In Germany, the UK and 
Ireland, taking its turnover in electro- 

technical distribution to about FI 25bn. 


would not reveal details.* win be.coni^fflBd 
Song with bids from other grw®&. 

Rouse of the US add the Ret c hmaim ftnriQy of 

T Tbgetiffir the creditors hold. 
Ca^STong-term debt; 
acquired thissdmmerby<^>^Sacfc^r 
mo posted a 1993 to® 
heavy write-downs, and ^ s _^ n 
Structure about C$3ta of praise™ 
eomty and sell assets. ' 

Cadillac was acquired fromtkeMontreat 
jjronflnan family in 1987 by a group of US 
pension funds. 

Continental hit by 19% 
rise in rubbber price 

Cw ^ wHit .• 


Strong demand lifts 
Hydro-Quebec net 


Hydro-Quebec, one of Canada’s two biggest 
electric power utilities, posted nine-month net 
profits of CS405m (OS$295m), up 43 per cent 
Grom a year earlier, with stronger domestic 
rimwand and a rate increase from May, writes 
Robert Gibbons in Montreal 

Revenue from power sales was C$5.4bn, up 
4.7 per cent Expenses rose 2.9 per cent mainly 
because of high depredation, amortisation and 
taxes. Interest expense rose 8.6 per cent due to 
the lower Canadian dollar and heavy equip- 
ment commissionings. 

Capital spending will be C 53 . 4 hn for all 1994, 
against an earlier estimate of C$3Abn. 

In the first nine months new borrowing 
totalled C$2Sbn, completing the 1994 financing 
programme. 


Continental the Ger- 
man tyre maker, yes- 
terday said growing 
: competition and' a 19 
per cent rise In the 
-price of natural rubber 
meant that turnover 
rose only slightly to 
the first nine months, 
writes Michael linde- 
m«nn in Bonn.- The 
group said its pre-tax 
naming s for 1994 were 
likely to be higher than 
the DM65 Jm ($41.9m) 
reported last year, but 
would give no further details. Turnover, in the 
period rose H6 per cent over the yeaMgo ton. 
Including new acquisitions, among them 
Barum, the Czech producer, sales rose 7J. per 



.>904': 


cent. 


Indian cement producer 
improves at halfway 


Sales of passenger and commercial tyres, 
which represent about 40 per cent of group 
turnover, rose 2.3 per cent to DM£58bn. How- 
ever, the company hopes to boost sales next 
year with a new range of summer and winter 
tyres •made with gflirst, a compound which- is 
said to reduce petrol consumption by about 5 
per cent “ - 

■ General Tire, the US subsidiary, is likely to 
report a loss for the fUQ year because of con- 
tinuing restructuring costs. ContiTech, the 
non-tyre division, saw sides rise 2&2 per cent 
following new acquisitions. 


A revival in demand for cement allied with 
firmer prices, helped ACC, India’s biggest 
cement producer and part of India's Tata 
group, to post net profits of Rsffilm ($27m) for 
the six months to end-September, up from 
Rs357m a year ago, writes Kunal Bose in Cal- 
cutta. 

The company's income rose nearly 22 per 
cent to Rs9.3bn as cement safe* rose to 46m 
tonnes from 4m tonnes. 


Management review 
under way at Statoil 


Restructure of Cadillac 
Fairview proposed 


A group of creditors led by New York invest- 
ment bank Goldman Sachs has proposed a 
financial restructuring of C adilla c Fairview, 
the troubled Canadian property group owning 
si gnifican t downtown office buildings and 
shopping centres and assets of about C$4. 5hn 
(US$3 .3bn), writes Robert Gfbbeus- 
Cadillac said it welcomed the proposal but 


Mr Harald Narvik, chief executive of Stated, 
the Norwegian state oil company, has initiated 
a review of top management which could lead 
to sweeping changes among senior executives 
and a new organisational structure, writes 
Karen Fossli in Oslo. 

A resource group Comprising Ms Randi 
Grong Olsen, senior vice-president for person- 
nel Mr Peter MeUbye, president of the natural 
gas division, and Mr Henrik Carlsen, senior 
vice-president for StatSjoid field operations, 
has been selected by Mr Norvik to assist in the 
structural review, which is to be completed in 
February. 

The aim to reorganise the jobs of senior 
executives with operational responsibilities in 
Norway and to look at new opportunities for 
Statoil at home and abroad in all its business 
areas. 


Correction 

Ammeberg Mining 


The price range for the offering 
of shares in Ammeberg Mining 
by its parent. Union Miniftre. is 
SKrH2 to SKrI30, not SKrl03 
to SKrll2 as stated yesterday. 
This values Ammeberg at 
between SKrl.26bn and 
SKrI.46ba ($I70m to $197m). 


Dutch financial group climbs 


By Ronald van de Krol 
in Amsterdam 


ING Group, the Dutch 
financial services company, 
reported an 18.7 per cent rise 
in nine-month net profit to 
FI 1.65bn ($943m) from 

FI 1.39bn, as faith banking and 
Insurance operations recorded 
strong gains. 

The nine-month perfor- 
mance, which exceeded ana- 
lysts’ expectations, prompted 
ING to forecast that net profit 
per share in 1994 will be higher 
than the E1&04 posted fn 1993. 
Previously, ING had predicted 
that per-share earnings would 
at least match those of last 
year. 


In the third quarter alone, 
net profit rose by 18.4 per cent 
to FI 580m from FI 490m a year 
ago, the company said. 

In insurance, pre-tax results 
for the first nine months rose 
by 26.0 per cent to FlL25bn, 
with Dutch operations in par- 
ticular contributing to the 
strength of the increase. life 
insurance showed a 23.2 per 
cent increase, while non-life 
insurance jumped by 96.3 per 
cent, though this was due 
partly to the deconsolidation in 
April 1993 of Orion, ING’s UK 
subsidiary. 

FNG noted that non-life 
results zn the US fen into loss 
because of extreme weather in 
the early part of the year. 


piMMOlMMottf POOUpnl 



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PMI 


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«•« 

urn 

BMWtl 

BMWr 

OD30 

925 

1004 

too 

0100 

9-68 

1043 

192C 

0190 

an 

<034 

43.12 

0200 

BjBO 

4034 

4012 

0230 

927 

192G 

22JM 

0300 

gjB 

1043 

183C 

0330 

021 

1043 

1920 

0400 

930 

1021 

1008 

0430 

9.13 

1021 

1095 

0500 

ana 

HUB 

1002 

QUO 


1008 

18.48 

0600 

9.09 

ion 

194« 

wno 

925 

ion 

21JS1 

0700 

902 

2019 

sags 

0730 

2943 

2089 

3137 

oaoo 

33-43 

2096 

3IJ4 

0890 

35.75 

2970 

32.48 

0900 

33.75 

32.14 


OKJQ 

40.11 

4230 

4538 

1000 

48.11 

4981 

45^2 

1030 

4911 

4280 

4041 

1100 

3522 

4237 

4038 

1130 

35.75 

3056 

4138 

1300 

35.75 

3057 

4138 

1330 

35.75 

3055 

413< 

1300 

33.74 

32.12 


1330 

30JK 

32.11 

3AJJ9 

1400 

3982 

3000 

32.78 

1430 

3007 

3000 


1500 

SWJ7 

3000 

32.78 

1530 

30.07 

3000 

3270 

iaoo 

30.18 

1060 

1050 


3B.7B 

4002 



4081 

37,94 



62.78 



1800 

0042 

6913 

8434 

1930 

4485 

6035 

5074 

1900 

4!J8 

5142 


1930 

3027 

4000 

4005 

son 

9528 

4951 

4&32 

2030 

31.74 

3334 

3012 

2100 

31.74 

32JJQ 

3437 

2130 

2025 



2200 

2932 

zaaa 

31.74 


994 

2233 

3911 

2300 

084 

2&83 

31-87 

2330 

0J7 

2919 

3088 

2400 

020 

1083 

71-01 



. Pretax hanking results were 
up 19.4 per cent at FHJL4bn for 
the first nine months, 
reflecting improved interest 
margins and expanded busi- 
ness volumes. 

ING’s banking aim was also 
helped by the recent recovery 
in the price of Latin American 
bonds. In the first six months, 
sharp price declines caused the 
group’s results from financial 
transactions, securities and 
participations to fall into a loss 
of FI 8m from a profit of 
FI 566m. 

However, at the nine-month 
stage, trading results were 
bad; in the black at FI 404m, 
though still well below last 
year’s FI 777m. 


NoHca of Radornptton 

European Coal and Steel Community 

US$100,000,000 SX% Bonds Due 1996 


NOTICE IS HEREBY GIVEN that pursuant to Bw tarns and oondWona oi the 
Bonds, Citibank, N.A. as Principal Paying Agont. has selected by lot lor 
redar p Bon on Januay 23. 1995 USSBMOftOOO principal amount at said Bonds, 
at Ota redemption price at 100% c 1 the pmapal amount In satisfaction ot ma 
January 2a 1995 mandatory redemption. Bonds selected by lot tor radentptm am 


Band Denomination USS5300. 


Outstanding Bonds bearing serial numbers ending m any of the toOowvvj two 
<Sgha> 


01 02 09 10 11 15 20 36 39 47 

60 656577780182358790 

Payment wta be made ijMn surrender of Btwis together wBi aB coupons maturing 
after the data fixed lor redemption, at the offices of ffw Paying Agents as shown on 
the Bonds. Coupons maturing on January 23. 1895 should be detached and 
presented tor payment In the usual manner. On and after January 23. 1995 
Interest on Die Bonds wE cease to accrue and unmatured coupons wfl become 
void. 

Outetanctng altar January 23. 1995 USS2O.O0O.O0a 


NwembarZS, 1994 
By: Citibank, NA (Issuer Services) 
London, Prtnopal Paying Agent 


CmBANCO 


I IN \\< iau times 


EAST EUROPEAN 
BUSINESS LAW 


FT EAST EUROPEAN BUSINESS LAW is a monthly account - 
concise gad empirical - erf new laws affecting tastiness in lbe cooosics 
of Central and Eastern Europe as they adapt to the free market. It covers 
s9 the legal issues of which business needs to be aware both in setting 
op business ventures in the region and in operating there. 


To receive a FREE sample copy contact: 


FT Bast European Business Law, Financial Times Newsletters. 
PO Box 3651. London SW1 2 8PH 
Tcb -HU ip) 81 673 6666 Fax: +44 (Q) 81 673 L335 


FINANCIAL TIMES 
/Vcmtauox 

IhaynllillMMlIlllkc 


Q». 3 w*»wfcBit 4 r . I « * ■ «!**■ 


U.S. $250,000,000 



BANK OF BOSTON 
CORPORATION 

Subordinated 

Floating Rate Notes Due 2001 


Issued IQtti February 1986 


Interest Rate 
Interest Period 


6.125% per annum 
25th November 1994 
27th February 1995 


Interest Amount per 
U.S. $50,000 Note due 
27th February 1995 U.S. S799.65 


CS First Boston 
A gent 


U.S. $250,000,000 



BANK OF BOSTON 
CORPORATION 

Subordinated 

Floating Rate Notes Due 2001 

Issued 10th Fetoruaty 1986 


Interest Rate 
Interest Period 


Interest Amount per 
U.S. $50,000 Note due 
27th February 1995 


ai25% per annum 

25th November 1994 
27th February 1995 


US. 3799.65 


CS First Boston 

Agent 


This announcement appears as a matter of record only 

Turkish Electricity Generation and Transmission Inc. 
(Turkije Elektrik Uretim Iletim A.S.) 


Financing of the Austrian portion provided by Austrian Energy 
and a part of the T uridsh portion for the 
Thermal Power Plant Cayirhan 
Unit m and IV 


ATS 1.780.000.000,— 
Export Credit Agreement 
under a Guarantee provided by 
Oesterrcichische Kontrollbank AG 


ATS 650.000.000,— 
Commercial Loan Agreement 


Arranged and managed by 
Bank Austria Aktiengesellschaft 


Agent 

Bank Austria Aktiengesellschaft 

Funds provided by: 

Bank Austria Aktiengesellschaft 
Creditanstalt-Bankverein 
Die Erste Osterreichische Spar-Casse-Bank-AG 
Bank for Arbeit and Wirtschaft AG 
GiroCredic Bank AG der Sparkassen 
Kamtner Sparkasse AG 

Under a Guarantee provided by the 
Republic of Turkey 


represented by the 

Undersecretariat of Treasury and Foreign Trade 


November 1994 


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FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 


19 





agt-ment review | 
r " a > at Statoi] . 

• •• • . .. ““ITuBpi 

. ' tttflsa 

• . • - . ' _J V '-~ 57SS 


— jr - -era 


★ 


INTERNATIONAL CAPITAL MARKETS 


Irish SFrl50m issue enlivens a quiet day 


NEW INTERNATIONAL BOND ISSUES 

Amount Coupon Plica Maturity F*m Spraod Booh runnar 


COFim ML (CoyraanHatL 

too 

la) 

100. OR 

Dec. 1999 

020H 

tat asu 

YBI 

MTBC Finance (AiubaXb)* 

25bn 

5<M 

1003 

Mar 2005 

M 

MtacfaiaN Tsl ML 

GUtLDERS 

Borfc MocforiandSA Gomeonlan 

500 

7.75 

9S.B75R 

DOCJ20O4 

Q.325H 

*31 (7N®4-04) RatMbonk 

SWISS FRANCS 

PoetsparKa»e(c) 

250 

562S 

103.625 

Mov20O2 


UBS 

Nat Tusk. Mnnagonwnt Acy. 

150 

5375 

102.50 

Jon. 1999 

- 

UBS 


Final larma and non-cafabia unhua staled. Tho yield spread (aver relevant BQwxrvnenx bend] at bunch b suppBed by the Mad 
manager. ftllnHotod. SCarwsrUbie. 4>Wttn equity warrants. tTHoatlnQ rate note. •Semi-annual coupon, ft find ro-offer price; toes are 
enoun ol mo ra-ottor kncL n) Dragon bona (Hruntti Ubar * <I23bp. b) Coupon pays 535* from f/. 3.3000 Foes imdbdoesd. Short 
firsi coupon. CaUabto on 17.3.2000 .a par, c] Short firat coupon. FunqMe with outaundeig SFiCOOm issue, launched 263.94. 


market lolls again,” said one 


BIS survey finds sentiment 
switching to euronotes 


By Graham Bowley 

New issuance In the eurobond 
market virtually ground to a 
halt yesterday with the US 
dosed for holidays. 

Only the Swiss franc market 
saw any degree of activi ty with 

INTERNATIONAL 

BONDS 


two deals prompted by the 
rally in the Swiss government 
bond market this week, 

"There is a flight of hot 
money out of equities and into 
bonds, which is boosting most 
bond markets, including the 
Swiss market ” said one trader. 
“Lower Swiss short-term 
money rates are also forcing 
Investors in Swiss francs 
farther out along tho yield 
curve.” 

Ireland's National Treasury 
Management Agency launched 
a SFrlSOm issue of four-year 
bonds offering a coupon of 
5.375 per cent 

Lead manager UBS said the 


By Martin Brice 

UK and Italian bond markets 
were overshadowed by political 
worries yesterday although 
they took their lead from 
Germany where prices rallied 
on the better tone for bonds 
after Wednesday’s market shift 
in the US. 


GOVERNMENT 

BONDS 


Dealers and analysts believe 
investors will be waiting to see 
if US Treasuries continue to 
benefit from a switching out of 
equities today after yesterday's 
Thanksgiving holiday when 
the US market was closed. 
Volumes across Europe were 
light • 


bonds were placed with Swiss 
retail investors. Sources said a 
funding level of 10 basis points 
below Libor had been achieved. 

Mr Adrian Kearns, bead of 
foreign borrowing at the 
NTMA. sold the offering was 
port of Ireland's borrowing pro- 
gramme for 1995, when it 
planned to raise about I£l.4bn 
to replace maturing debt He 
said the proceeds from the 
offering were not swapped. 

He added that Ireland was 
still considering coining to the 
euroyen market within the 
next few weeks with an offer- 
ing of around Y30bn. “prefera- 
bly in the id-year area”. 

Posts parfcassc, the Austrian 
state postal authority, 
launched a SFr250m issue of 
eight-year bonds offering a 
coupon of 5.625 per cent and 
fungible with a SFrSOOm issue 
launched in September. 

In the Dutch guilder sector, 
BNG launched a FI 500m offer- 
ing of 10-year bonds priced to 
yield 31 basis points over 
Dutch government bonds. 
Joint lead manager Rabobank 


Mr Mark Cliffe, international 
economist at Midland Global 
Markets said: "There has been 
a lot of talk about tbe switch 
out of equities into bonds but 
not a lot of action, ft is difficult 
to believe there will be a rally 
in the US bond market even if 
stocks Call. If the Fed is raising 
rates it is not the time to be 
rushing into US bonds.” 

■ German government bonds 
rose yesterday as investors 
moved to pull out of short 
positions. 

The December bund futures 
contract on Liffe ended at 
9L29. up 0.39 on the day. 

Trading was quiet in the 
morning but lower-than- 
expected inflation news in the 
states of Nortb-Rhine 
Westphalia and Baden- 


said the bonds were placed 
with domestic institutions. The 
proceeds from the offering 
were not swapped out of Dutch 
guilders, market sources said. 

Dealers reported some buy- 
ing of eurobonds in the dollar 
sector by investors keen to 
exploit the recent widening of 
spreads. 

“They think that now is the 
time to buy while spreads are 
wide and before they close 
back in when the Treasury 


WOrttemberg led to buying. 
The Bundesbank council 
meeting left rates unchanged. 

Mr Bob Tyley at Paribas 
Capital Markets said: “Nothing 
has happened in core European 
markets to create a change this 
week. But because of what has 
happened in the US, people 
have been covering themselves 
in case there is a change here. 
But a pull out of equities need 
not be positive for bunds, it 
might be for cash ” 

■ UK government bonds 
started the day by slipping, 
largely due to the fall in 
starling due to political worries 
over talk of the Conservative 
government resigning if it was 
defeated over legislation on the 
UK contribution to tbe 
European Union budget. 


dealer. 

There are rumours that 
Spain is considering a euroyen 
offering around the 10-year 
area over the next week. Exim 
is rumoured to be coining to 
the eurodollar market with a 
long-dated offering. 

Traders said that the EIB 
was also considering a 
eurodollar offering around 
the 10-year area, although EIB 
officials were unable to 


However, gilts shrugged off 
those worries and perked up 
on the back of bunds, and by 
the end of the day the 
December long gilt future had 
moved up £ of a point to trade 
around 103 A. The yield spread 
over bunds had moved out 
from 123 to around 123. 

Mr Mark Reckless, UK 
economist at S. G. Warburg, 
said: “We are getting used to 
these crises. They come and 
go.” 

Mr Cliffe at Midland said: 
“Considering the 

pre-occupation that political 
problems are in other 
European markets it is 
remarkable how sanguine 
people are in the UK. They are 
working on the assumption 
that the threat from the 
government will work, but the 


confirm this yesterday. 

• IBCA. the European credit 
rating agency, is reviewing tbe 
AA credit status of Sweden. 

“Sweden has a very high and 
rising debt to GDP ratio and it 
is important to assess the new 
government's plans to stabilise 
and reduce it,” IBCA said yes- 
terday. 

Sweden's rating is also under 
review by Moody's, the US 
credit rating agency, from 
which it has an Aa2 rating. 


implications of the bill not 
passing are rather disturbing. 
One wonders if the market will 
pay this more attention later.” 

■ The yield on Italian 
government bonds fell 
yesterday as bond prices 
followed the positive tone on 
bunds. The yield on 10-year 
Italian government bonds fell 7 
basis points to 12.07 per cent. 

However, Mr Pio de Gregoria 
at NatWest Markets said: 
“Until the political situation is 
clear and the budget is passed 
there is very little scope for the 
bond market to recover. There 
is enormous uncertainty and if 
the political crisis becomes 
even worse than it is now fchgn 
it could hamper the pace of tbe 
recovery because confidence 
could be damaged.” 


By Conner Mfdddimmn 

Difficult conditions for 
borrowers in the international 
bond markets have benefited 
other sectors, such as euron- 
otes and syndicated loans, 
where issuance has risen 
sharply this year. 

According to the Bank of 
International Settlements' lat- 
est quarterly report on finan- 
cial market trends*, the euron- 
ote sector, which includes 
short and medium-term notes, 
has seen record volumes of 
supply. In the first nine 
months of this year, net issu- 
ance under all types of facili- 
ties amounted to glZl^bn, 
compared with $47.9bn in the 
same period of 1990. 

The bulk of euronote issu- 
ance has been through euro 
medium-term note pro- 
grammes (EMTN). This 
enables borrowers to Issue debt 
with varying maturities, cur- 
rencies and volumes under the 
same master documentation, 
and makes them cheaper and 
more flexible than interna- 
tional or domestic straight 
bond issues, which require sep- 
arate documentation for each 
deal. 

The bulk of new euronote 


A SLlbn syndicated loan for 
Spain's Telefonica Interna- 
cional (Tisa), a subsidiary of 
Telefonica de Espafla, has been 
launched into general syndica- 
tion, Reuter reports. 

The seven-year loan, which 
carries a spread of 27.5 basis 
points over London inter-bank 
offered rate (Libor), is a refi- 
nancing of a $ibn seven-month 
bridging facility signed in May 
to buy two Peruvian telecom- 
munications companies. 

Arran ger s of the syndicated 


drawings was denominated in 
currencies other than US dol- 
lars, with borrowers taking 
advantage of the flexible struc- 
ture of EMTN programmes to 
select the currencies offering 
the highest absorption capacity 
and best foreign exchange 
prospects, the report states. In 
particular, Japanese investors' 
preference for domestic cur- 
rency assets prompted the issu- 
ance of a heavy volume of yen- 
denominated paper, which 
accounted for 38 per cent of 
total market expansion in the 
first half, according to the BIS. 

Meanwhile, the syndicated 
credits sector, which is pre- 
dominantly of a floating-rate 
nature, remained buoyant, 
with a total of S5S.3bn of new 
facilities arranged during the 
third quarter, on top of 
$118Jbn in the first two quar- 
ters. 

“The high volume of loan- 
able funds stimulated competi- 
tion to win business: the aver- 
age maturity of loans was 
increased, spreads charged 
over inter-bank rates were 
reduced and covenant clauses 
were further relaxed,” the BIS 
reports. 

Moreover, institutional 
investors' reluctance to corn- 


loan are ABN- Amro Rank and 
Banco de Negodos Argentaria, 
together with underwriters 
Rank of Tokyo, Fuji Bank, 
Banque Nationale de Paris and 
Bank of America. 

• An 3850m revolving credit 
for Saga Petroleum, the Nor- 
wegian energy group, has also 
been launched into general 
syndication, writes Martin 
Brice. Arrangers are ABN 
Amro, Deutsche and Barclays, 
with co-arrangers Christiania 
Rank and Den norskfi Bank. 


mit funds at fixed Interest 
rates for long periods led an 
increasing number of lower- 
rated or lesser-known borrow- 
ers to turn to syndicated loan 
credits to take advantage of 
Msiu p market conditions. This 
led some market participants 
and regulators to caution 
against the risk of a reversion 
to the low credit standards 
which prevailed in the late 
1980s. 

Loan facilities provided to 
US borrowers continued to 
reflect merger and acquisition 
activity there, while various 
“jumbo’' loans were launched 
for financing or refinancing 
purposes. These include tbe 
Ecuebn revolving facility 
arranged in September for 
Spain with a spread of only 4J5 
basis points above tbe London 
inter-bank offered rate (Libor). 
Outside the OECD, Asian bor- 
rowers raised some $7.7bn 
through syndicated loans, 
while new facilities arranged 
for Latin American entities 
amounted to SIBbn, according 
to the BIS. 

* International Banking and 
Financial Market Develop- 
ments, by the Bank for Interna- 
tional Settlements, Basle. 


The seven-year loan is priced 
at 30 basts points over Libor 
for years one to five and 35 
over for years six and seven, 
with undrawn facilities at 15 
basis points for years one to 
five and 17% for years six and 
seven. 

• Underwriting for the 
Kingdom of Sweden's $5bn 
syndicated loan should be com- 
plete by the middle of next 
week, said Ms Christine Holm 
of the Swedish National Debt 
Office. 


Investors harbour concern over political moves 


Tisa loan in general syndication 


s ;!• out 

V 

-T-ra 
-• • «<rsa 
■ 3. 

■ '^j 


>up climbs 


. - . rv 






BENCHMARK GOVERNMENT BONDS 

Rod Day's Week Month 

Coupon Dais Price change YtaU ago ago 


Italy 

■ NOTIONAL ITALIAN GOVT. BONO (BTP) FUTURES 
(LIFFE)" ura 200m lOOttw of 100% 


AtratraRa 

9.000 

08/04 

91 .4400 

+0.170 

1041 

1089 

10.45 

Belgium 

7.750 

1IMM 

966700 

+0.140 

825 

837 

051 

Canada * 

5500 

06/04 

83.9000 

+0.150 

9.08 

921 

9.11 

Demerit 

7.000 

12334 

09l37OD 

+0.070 

0.62 

830 

930 

France BTAN 

6.000 

06/98 

102.0000 

+0.130 

731 

7A7 

730 

OAT 

6.750 

10434 

910700 

+0360 

7.95 

831 

032 

Owroany Bund 

7JSOO 

IM34 

101.3100 

+0410 

731 

734 

7.83 

Koiy 

6.500 

06AM 

81-8200 

+0380 11.721 

11.79 

1138 

Japan No 119 

4.800 

• 06(99 

103J130 

+0.490 

330 

437 

4.14 

•lepton No 164 

4.100 

12703 

96.7060 

+0340 

4.82 

4.76 

4.77 

Nattwlaneta 

7250 

10A34 

980500 

+0390 

7.41 

731 

731 

Spain 

6.000 

05AM 

824100 

+0080 

1137 

1131 

11.19 

UK GBts 

6000 ■ 

08(99 

91-10 

— 

A JR 

043 

838 


6.750 

11AM 

88-29 

+3/32 

Ml 

839 

8.77 


9.000 

1GG6 

104-24 

+5732 

Mt 

060 

8.72 

US Treasury * 

7 STS 

11AM 

- 

- 

- 

003 

737 

7300 

11/24 

— 

— 

— 

014 

005 

ECU (French Govt) 

6.000 

04AM 

840500 

+0270 

837 

838 

8.70 



Open 

Se« price 

Change 

HW« 

Low 

EsL MOl 

Open ht 

Dec 

10045 

10038 

+O.S4 

10120 

10043 

28999 

43858 

Mar 

9935 

99.88 

+038 

9932 

9035 

1884 

14621 

Am 


9088 

+038 



0 

0 


■ ITALIAN GOVT. BOND tBTV) FUTURES OPTIONS (LIFFE) Lira200m 100th* of 100% 


Strike 

ftlce 

Mu- 

■ CALLS 

Jun 

PUTS - 

Mu- 

Jun 

9950 

225 

135 

137 

137 

10000 

2.00 

1.15 

2.12 

237 

10050 

1.77 

037 

239 

2.59 

Gd. voL total. Cato 3016 Put* 1E25. Prevtou* day's open hL. Cato S3S0 Pun am 



Yield* Lord martae tnsndanl 


Spain 


t Oroas IbKJudktg wMihoCdhB tax at 123 pw a 
Prices Uft UK to 32nds. athua to decimal 

■nt peyebla by rxmratodMinl 

StwPK UUS twnatoni 


Open 

Sett price 

Change 

Wflh 

Low 

US INTEREST RATES 



Dec 

8735 

87.90 

+003 

88.05 

87.73 

4pHl (Mw23) 

Oaeuanli — 

Treasury BBto and Bond Yields 
LSI Tea jeer 

7.18 

Mar 

87.10 

8728 

-0.07 

8720 

87.01 

Prime rale 

fbbknr taad ntifl 

8% Teomontt — 
fit* (in —"ur» 

5*J Rmifnr .. 

7.42 

734 

UK 






pdifrfMii .... 

0% 5ta menBi 

VO 10-jear 

731 






Fedinds Jt Uenranbn- 

5% ftw war 

SL58 30-yrw 

7.85 

■ None 

INAL UK Gl 

LT FUTURE! 

S(UFFQ"£ 

50,000 321 

ids of 10 


EsL vaL Open inL 
38.262 80.432 

668 7.176 


BOND FUTURES AND OPTIONS 
France 

■ NOTIONAL FRENCH BOND FUTURES (MAUF) 


- . ■ . *‘"1 


Open 

Sen price 

Choige 

Wgh 

Low 

... f : J- 

Dec 

112.12 

112j44 

+028 

11238 

11132 


Mar 

11134 

111.82 

♦028 

111.70 

111.12 


Jun 

11048 

11072 

+038 

11080 

11044 


Est voL Open InL 


&2T4 

210 


32.755 

3.154 



Open Sen price 

Ctiange 

Wgh 

Low 

Esl vol 

Open M. 

Dec 

103-04 103-09 

0-02 

103-14 

102-26 

28486 

88653 

Mw 

102-15 102-18 

(Hr 

102-23 

102-08 

4129 

30779 

Jun 

101-18 

- 



0 

0 

■ LONG GILT FUTURES OPTIONS (UFFE) 530,000 64tha ol 100% 


Strike 


J. 



mi hi __ 


Mar 

LS - 

Jun 


Mar 

rUIH 

Jut 

Price 

102 

2-OS 

2-21 


1-33 


2-49 

103 

1-34 

1-58 


1-82 


3-22 

104 

1-08 

1-34 


2-34 


342 


Eat. wL total. Crib BS2 Putt 3366. Pmvtaua day-* open hL. Cato 9033 Puts KKS 


■ LONG TBW FRENCH BOWP OPTIONS (MA7IF) 


Strike 

Price 

Dec 

- CALLS 
Met- 

110 

2.44 

2.45 

111 

1.44 

1.82 

112 

044 

1/30 

113 

- 

083 

114 

- 

050 


PUTS 


134 


Dec 


0.56 


Jun 


Mar 
084 

1.17 2.1 B 

tas 


Ecu 

■ ECU BOND FUTURES (MAT1F) 

Open Sett price Change 
Dec 81.70 B2.02 *026 


Hfeh 

82.10 


Low 

81.62 


Est vof opai <nt 
3.902 8.042 


EoL vcL tuat Cobs Z7.304 pw* 2«*7i . Pravtaie <ray"a open mt, Cera 318084 Put* 

Germany 

■ MOTIONAL GERMAN BUND FUTURES (LIFFE)" DM250,000 IQOths of 100% 


US 

■ US TREASURY BOND FUTURES (CRT) 5100,000 32nct» of T00% (Nov 23) 


Dec 

Mar 

Jun 


Open 

saw 

90.12 

99.20 


Sett price Change 
91.29 *039 

00.48 +035 

B9.73 +053 


high 

91-41 

0062 

89.50 


Lew 

90.82 

90.03 

Hawn 


Eat vat Open InL 
98424 148846 

12415 58141 

2 0 



Opart 

Sett price 

Change 

High 

Low 

Esl v bl 

Open M. 

Dec 

97-09 

98-25 

♦1-20 

99-01 

97-09 

194.463 

372,291 

Mar 

97-00 

08-06 

+1-20 

08-12 

97-00 

15,021 

71.287 

Jrai 

97-00 

97-20 

+1-20 

97-27 

96-28 

1.171 

12.479 


■ main FUTURES OPTIONS 5JFFE3 DM25QJM0 polnte jrf 100% 


Strike 

Price 

9000 

0050 

9100 


Jen 

0.94 

006 

0.43 


Feb 

GALLS — ■ 
Mar 

Jun 

Jan 

Fab 

PUTS — 
Mar 

Jun 

1.26 

098 

0.75 

1.45 

1.17 

093 

1.48 

1.21 

ISO 

046 

068 

0.95 

0.78 

ISO 

1.27 

097 

1.18 

145 

1.73 

1.98 

2^7 


Est- W*. ***- 18322 1 


UK GILTS PRICES 


Motes 


_ Yield- 

H Mod 


i day's span Ini. CMS 120881 Puts 70011 


_ MM.. 
PdwE+or- Woh lira 


Japan 

■ NOTIONAL LONG TERM JAPANESE GOVT. BOND FUTURES 

(LIFFE) YIQOm lOQtha of 100% 

□pen Ctoee Change High Low EsL voi Open InL 
Dec 10063 106.85 10873 335 0 

Mar 10015 108. T 7 10004 IS?! 0 

" Lff*E oomreaa nadod on APT. Al Opon Interwit Dp. am tar previous tmv 


_yw- 

M Red Pries t* a- im 


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14*1998-1—-- 



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11.88 

599 

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886 

793 

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7 a 

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1106 

7.71 

HOB 

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995 

795 

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868 

794 

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12J4 

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744 

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705 

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630 

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839 

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487 

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7.58 

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067 

10.17 

414 

627 

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US 

1042 

459 

838 


7.18 74(1 

860 106% 

641 BD%d 
840 100% 
645 1074 

678 122% 

839 954 

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677 116(1 

642 1004 

679 129* 

640 104% 
640 98% 


+A 88* 69% 

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105% 840 

+A 100% 97 

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+A 112)1 80% 
+,i 111% 910 

♦A I38J, 112% 
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1514 124JI 
>% 1240 900 

+& 1154 910 


MB-UntaN 

2pc*. 


M 

JSTn 


4%pt-aft« (1356) 

2%1C , 01__ (763) 


2.45 

2.72 

131 

3.4J 

146 

363 

359 

352 

354 

167 

371 

359 

172 


193 201% 
158 107% 
3.75 166U 

178 1620 

179 1094 
179 169% 

352 153,*. 
182 158% 

353 I3»a 

354 1380 

188 133 

3 S 3 110 U 

35s loan 


790 

628 

82* 

+* 

98* 

77,1 

655 

639 

IDS* 

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126(1 

looy 

tss 

(US 

105* 

** 

127% 

100% 

739 

617 

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+% 

93% 

71 U 

625 

633 

MI 

♦% 

tire 

62 

832 

631 

WL 

*% 

IM% 

89* 

638 

632 

104* 



128% 

99* 

908 

655 137 AN 

+* 

150% 

128* 


Other Fixed Interest 


MM 


..VWd.. 

In tod Price C *cr- 


. 1994.. 
«S7i low 


650 

- 47* 


59% 

44U 

631 

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+1» 

MU 

3811 

605 

- S8B 



n 

55% 

854 

- 35% 



44% 

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636 

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644 

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AstwOw I0%K2009— 
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923 

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975 

9.41 

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115 

663 

- 

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93% 

604 

- 

100% 


101% 

9W» 

1197 

- 

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MM. 

10G 

1054 

978 

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rsaii 

I77Ii 

1661 

- 

177% 


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125 

946 

- 

37 



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334. 

9 23 

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1144. 


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603 

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TIB** * 1 

w on «***»« AecMn bra%- «d E* «d«L 

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CtoNna nttHMM ori shown m pound* 


FT-ACTU ARIES FIXED INTEREST INDICES 

Price traflees Thu Day's WU Aecnied 

UK Guts Now 24 change K Nov 23 Manet 


ml adj. 

y W 


— Low coupon yield— — UaAn ooraton yield — — Ugh coupon yield — 
Now 24 Nov 23 YT. ago Nov 24 Nov 23 Ylr. ago Nov 24 Nov 23 Yr. ago 


1 Up to 5 yean (23) 

2 5-15 years (23) 

3 Over 15 years (8) 

4 tradeemabies $) 

5 Al atochs (60) 

mdax-tfaikM 


130.61 

+0.01 

120*9 

2.08 

ft83 5 yra 

832 

832 

0.03 

838 

838 

828 

851 

850 

0.40 

14108 

+0.08 

141J6 

2X5 

11.49 IS yra 

832 

B33 

630 

843 

844 

7.01 

807 

838 

720 

168.93 

+0.10 

168.77 

2.94 

1087 20 yra 

639 

830 

731 

843 

844 

73S 

850 

859 

721 

179.79 

+0.08 

17B.64 

098 

13/47 tma.t 

837 

837 

7,12 







138.46 

+0.06 

13838 

32J 

10S3 


— ■ todtalh 

hi SK — 



HUH 

in 10% - 

- 



Nov 24 Nov 23 Yr. ago 


Nov 24 Nov 23 Vr. eflo 


6 Up to 5 years (2) 

7 Over 5 years (II j 
B Al stocks (13) 

Debentures and Loons 


187.10 

♦806 

161731 

0.73 

807 

Up to 6 yra 

3.B2 333 

2.18 

239 

239 130 

174.57 

+0.03 

174.61 

1.18 

438 

Over 6 yra 

883 883 

3.13 

334 

333 2.9S 

174.99 

+033 

17433 

1.14 

4.41 











— 

— 5 year yield — 

‘Irareeie 

15 year yield — 

— 20 yraar yield 


9 Debs 5 Loans (77) 12034 

Awrago gnraa raddmpBon yWd* ar* 


+0.07 12925 2.10 1027 045 9.47 7^3 ft 42 944 7J3Q 

above. Capon Bandit Una; OK-7VK: Medun: eW-10%%: Hgtr UK and ora. t yWd. ytd VMr to dan. 


a aa 


9.40 &15 


GILT EDGED ACTIVITY INDICES 

Nov 23 Nov 22 Nov 21 


Nov 18 New 17 


FT FIXED INTEREST INDICES 

Nov 24 New 23 Nov 22 Nov 21 Nov 18 Vr ago Ugh* Low" 

Govt Secs. (UK) 9233 92.37 91.86 91.74 91.59 103.64 10704 8ft54 Gilt Edged bargelna 1404 126a 1509 145J) 174.4 

Fined Interest 10805 108.68 10803 108.15 108.15 1244K 13387 108.50 5-day average 147.8 1418 134.4 11&9 1088 

•tor «9B4. Coirenvnant SdcuVhn Agli stacn canaWadnt: 12740 (Sft/33. tow 46 18 (30/7®, ftnd MvnHt fi%B **»ar oompfliflon: 18357 pinf04) , In* 9053 ftM/7% . BoOa 14ft Annum* Ssartfes ISftOT 
2B and Fbea kilarmi 1028. GE octMiy IndtoM rebased 1974. 


FT/ISMA INTERNATIONAL BOND SERVICE 


liaed ana tfnbdestlrdanakiHl bond* tor wNcfitfiavb on adeqtoia secondary maitat Latest pries* nf 700 pm aol 

famed BU Oder Cbg. Yield leaned BM OBnr Chg. 


YWd 


tawl BM oner Chg. Yield 


US. DOLLAfl STTWOlfTS 
Afctoey NaB Treesuy t* 03 - 
Mxna Acuvna 7% 98 — — 
Austria 8% 00 . 


Bank Ned Goneerten 7 99 . 

flenkaf Wqo8%88 

Bdgun 5% CO 

BFC8 7% 97 

British Gas 021 

Can*u996 , 


Ownp hong fin 5*j 38 

O*na&1.-OA 

Cand Euope B 96 

CrwJt Ftroer 9*2 *1 — 
Derenart>5%93 


East Japai ftdnoy 6% 04 . 

KSC8%96 

SC 8% 96 

aa 7i 95 

SB 9% 97 

Seeds France B 98 

BnAma9% 36 . 


BMmBa* Japan B 02 - 
Expert Dw Cop 9*? 58- 
Federal N*8 Meat 7.40 04 . 
Finland 97. 


Fan Unr Oet 6*e 96 . 
*nBacCapM9%86- 
GUMC9%96 


hd Bk Japan Fh7% 97 . 
her Amer0w7%98 _ 
Italy 6* 


Japan Dev BL 8% 01 — 
Kansa Sec Pw 10 96 _ 
Kaea Bsc Power 6% 03 . 
LTCHfin8 97 


7%IB. 


*,*. 203% 1973J 

^ 1,3 A iobA 


z%pc 03 (7851 

4%0CU4«.._f135^ 

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2'«eT3 (863 

2%pe'rt (816) 

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2>2|lc-?4« 797.71 

4%t*‘30tt. — (136 1) .. . . 

ProspecUm roar redemption raw on protected Infa&on of (1) 10% 
and (2) 5%. (16 Bgwee In ps-raiifieaea shtnw HPi base lor 
(ndadng 0e 8 month* prior lo Issue) and haw been JC%jsr«J lo 
reflect raCeahn of RPt to 100 In February 1987. Conversion 
taefcr 3*45. RPI far March 1994: 14S.S and lor October 1994: 
1462. 


, 176% 163% 
+iV 173% 159A 

118% 107% 

184JJ 16SA 
168/. 149% 
*,*. 175% 154% 
148% 125% 

til ft 134% 

. _ 152)1 >28% 
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nan tos% 


Ncneay 7% 97 . 

Ontario 7% 03 

Ck» KtjiDr4bar* a% 01 . 
PeWvCarada/'tge — 
Posugsl5% 03 — ... - 
Quebec 9% 98 — 

QuebecPrtw996 — 

Sainstxiy 9% 86 

SAS 10 99 

SNCF 9% 98 

SpatiSkSa. 


Swb Bk NSW 8% 86 . 
Sweden 5% 95 . 
Sw**i&ponB%fl6_ 
Toeyo Bsc Rarar 6% 03 , 
Tokyo Msbtpfe 8<« » - 

Toyota Mcaor 5% 98 

Lhted Kngdcrn 7% OS _ 

MbrU Barfc 8% 69 

WcrU Sank 8% 97 


O&freGHE I4AAK STRAIGHTS 

AUBtrti 8% 24 

CretB Fender 7% 03 _ 

DmmaLS's'B 

Depto France 6% 03 - 
D«*fia»ffti7%03. 

306*2 00 

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UvB Baden-WUera 8% 08 . 

NWJy Wj 99 

Orttam 6% W ... _ 

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WOO 

88% 

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647 

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101% 

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uno 

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737 

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731 

1000 

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100 

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7.72 

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102 

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7.47 

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601 

1000 

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780 

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101% 

101% 


733 

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101% 

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742 

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1000 

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7.7B 

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102% 

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99 

99% 

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104% 

106 

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736 

1500 

95% 

95% 

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824 

3000 

97% 

97% 

♦% 

730 

1600 

95 

95% 


are 

-300 

102% 

103 


745 

-200 

101% 

W2 


7.71 

.200 

90% 

100 


au 

-200 

100% 

100% 


7.44 

3500 

77% 

78% 

♦% 

025 

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100% 

101 

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623 

-360 

105% 

103% 


742 

1350 

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1000 

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102 

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102% 

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105 

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1500 

94 

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634 

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101% 

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739 

2500 

98% 

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101% 

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743 

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736 

1500 

102% 

103% 


734 

2000 

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2000 

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99 


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UMed Kngdom 7% 87 ^ 
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Wold Bar* 8% 00 


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. 1000 94% 

.2000 20 % 

.3000 69% 

■ 1291 110*2 


SWISS FRANC STRAHHIS 
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Iceland 7% 00 

Kobe &% 01 

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. 1000 97% 

_ 560 09 

. 10CO 96% 
_ 300 106*2 
_ 100 109% 
-300 107 

_ 100 107 

.loo in 
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- 160 96% 

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4% 

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YBI STRAIGHTS 





50000 

tatai Ana Dw 7% 00 

30000 




Nppcn Tel Tri 5% 9B 

■ .. 50000 


mmn 

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Wtadd BraK 5% 02 — 

250000 


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110 % 

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102 


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439 

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441 

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Abbey MdTtaxMy 8 03 e. 


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1 703 FI _ 1500 

Aberaftorince 10% 98 C9 500 103% 

Bd Canada 10% 99 CS 150 i(W% 

Britah Cotntia 10 SB CS 500 102% 

BB 10% SeCS 130 105% 

Bra da Ffance 9% SB CS 275 102% 

Gen Bra Cacfc* 10 06 CS 300 102% 

KMTtatFta 1001 CS 400 


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808 C| . 


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1500 91% 


Atome Ufcs 11% 97 C 

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104% 

104% 


880 

110% 

110% 

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108 

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937 

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93 


664 

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966 


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.125 102 

.1125 104% 
. 500 105% 
.1000 108% 
1000 102% 



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COMPANY NEWS: UK 


Extra space boosts Storehouse 


By David Blackwell 


An increase in selling space 
helped Storehouse, owner of 
the BHS and Mothercare retail 
chains, to lift ritfft ftn sains by 
7 per cent and operating profits 
from retailing by a third. The 
dividend is raised Aar the first 
time in seven years. 

Mr Keith Ede lman , chief 
executive, said the group had 
added 80,000 sq ft to its BHS 
sales space in the halt equiva- 
lent to adding three stores. The 
group was aiming to add at 
least 20 new BHS stores to the 
present 125 in the next three 
years, including nine this 
financial year. 

While the spread is national 
the group feels there is poten- 
tial for at least 200. 

Sales for the 28 weeks to 
October 15 grew tram £4St9m 
to 2519.2m. Uke-for-like sales 
were up 5 per cent 

At the pre-tax level, profits 
doubled to £24 2m, against 
£ULGm struck after an excep- 
tional charge of £6.4sl Operat- 
ing profits from retailing rose 
from £L7.lm to £22 Sm. Earn- 
ings per share increased from 
I.4p to <L9p, and the interim 
dividend is 2.7p (2J5p). 

The shares closed yesterday 
down 5p at 214p. 



verted to a new format, dou> 
bled operating profits from 
£2.lm to £4.2m on sales ahead 
from £140-9m to £155m. Mar- 
gins unproved from 1.5 per 
cent to 2.7 per cent. 

The loss at Blazer was 
halved from £400,000 to 
£200.000 on the back of a sales 
increase from £l7.1m to £22.8m. 


Scottish 
Widows 
acts to 
cut costs 


By AUson Smith 


MriayAtiaraod 

Dick Steele, left, with Keith Bdetman in the Oxford Street store: 
an extra 80,000 sq ft of sales space was added to BHS in the half 


The group is cash positive, 
with ffgu sm. Mr Dick Steele, 
who joined as finance director 
from Lloyds Chemists early 
*hi« year, -sa id it was the first 
Knw the group had not had net 
borrowings in the run op to 
Christmas. 

Total costs rose by 5 per 
cent “We could have held the 
increase below 5 per cent, but 
we are in an investing phase,” 
said Mr Steele. 


The group has reduced the 

nnmhpr of its suppliers from 

1.000 in 1989 to 300. 

At BHS. which has benefited 
from a TV advertising cam- 
paign, operating profits rose 
from £15.4m to £18.8m and 
sales from £337 2m to £356iftn. 
BHS retail marg ins improved 
from 4.6 per cent to 5.3 per 
cent 

The Mothercare stores, 
which are rapidly being con- 


• COMMENT 

The fall in the share price 
probably reflects disappoint- 
ment that the results were a 
little below the market's best 
hopes. Nevertheless, these are 
encouraging figures, showing 
that the recent good house- 
keeping is starting to pay off. 
Both BHS and Mothercare 
have a lot of catching up to do 
in the retail sector, but the 
returns are Improving and the 
balance sheet is good. Better 
buying and better stock man- 
agement are being coupled 
with rebuilding the strong 
Mothercare brand and sorting 
out a firm identity fbr the BHS 
brand as a value-driven family 
clothing chain. Pencilled in 
profits of £105m for 1995-96 put 
the group on a prospective 
multiple of 12.5 - not that 
demanding for a retailer with 
the rare combination of both 
growth and recovery prospects. 


Business Post rises sharply to £3.8m 


By Simon Davies 


Shares in Business Post, the 
express parcel delivery com- 
pany, rose 15p to 15^> yester- 
day. after it revealed that the 
recent expansion of its net- 
work of hobs helped achieve 24 
per cent sales growth and 
improved profit margins. 

Pre-tax profits rose 74 per 
nmt to £3 -81m iQm) in the 
six months to September 30, 
well ahead of analysts' expec- 
tations, and the company said 


the momentum was continu- 
ing. October sales rose 26 per 
cent 

The group sustained average 
price rises of L6 per cent in 
April, despite what remains an 
extremely competitive market, 
given the existence of about 20 
competitors with national net- 
works. 

In addition, it was now reap- 
ing the benefits of increased 
capacity and a more efficient 
network, following investment 
in the expansion of several 


regional “hubs”. 

Turnover rose from £19. lm 
to £23.6m and operating profit 
margins increased from 11.7 
per cent to 15.6 per cent This 
partly reflected the high level 
of fixed costs within the busi- 
ness. 

The trend should be more 
pronounced in the second half, 
as the business has a season al 
bias because of the summer 
lull. Last year, 55 per cent of 
Business Post’s revenue came 
in the second ha if 


In addition, UK Mail, its 
door-to-door mail delivery ser- 
vice was suspended in March, 
after contributing losses in the 
second half of 1993/1994. 

Capital expenditure peaked 
in 1993, falling from £224m to 
£l.73m at the interim stage. It 
is likely to stay at about that 
level in the second half 
It is increasing the dividend 
by 58 per cent to 1.9p (1.2p>, 
roughly in line with earnings 
per share, which rose 56 per 
cent to 5.1p (3.3p). 


Fenchurch 
advances 
to £7.79m 


Bakyrchik 
faces delay 
at gold mine 


Barr rebels likely to claim 
first blood in family feud 


By Geoff Dyer 


By Kenneth GoocSng, 
Mining Correspondent 


By Richard Wotffe 


Bakyrchik Gold, floated in 
London last year to invest in a 
mine in Kazakhstan, yesterday 
reported a two-month delay in 
commissioning its stage 1 sul- 
phide ore processing plant 
This would hold back the fore- 
cast fattfal animal rate of out- 
put - 30,000 troy ounces of 
gold — nntfl January or Febru- 
ary next year, said Mr Kevin 
Foo, managing director. 

In the meantime, however, 
following the recent placing 
and open offer which raised 
£25.1m, operation of the Bak- 
yrchik gold mine, on Kazakh- 
stan’s north eastern steppes, 
was being transferred to the 
Bakyrchik joint venture in 
which the London-quoted com- 
pany has 40 per cent 

The delay in QomudsBtanxng 
the process plant was caused 
by the failure of (he associate 
oxygen plant and an Imposed 
closure by the Kazakh authori- 
ties, who insisted on compli- 
ance with practices followed 
within the former Soviet 
Union. The Redox sulphide 
plant itself operated effec- 
tively when it had been run at 
design temperature and pres- 
sure. Recovery rates of 90 per 
cent of the gold were achieved. 

In line with expectations, 
Bakyrchik repor ted a pretax 
loss of $726,000 (£442,682) for 
the half-year to September 30, 
com p ared with a $67,000 defi- 
cit previously. 


The rebel shareholders of Barr 
& Wallace Arnold Trust were 
ready to claim first blood today 
in the family feud over the 
future of the motor and leisure 
group. 

Mr MflimTm BaiT, chairman 
seemed likely to lose the vote 
on the board’s proposals to 
reform the two-tier share struc- 
ture at its EGM in Leeds. 

The compa ny i s understood 
to have received proxy votes 
representing more than 50 per 
rpnt rrf ordinary voting sharpy 
from the rebels, led by Mr 
Barr’s nephews, Nicholas 


and Robert Barr. 

They have pledged to vote 
down the board's plans to 

pnfranchiHfl the non-vo ting A 
shares, owned almost entirely 
by institutional shareholders. 

Hie Barr brothers have 
called on their uncle to step 
down as ctom-man, as part of 
their strategy to run the 
group’s two divisions as stand- 
alone businesses. 

They have also requisitioned 
their own EGM next week to 
rmsaat Mr Brian Parker, the 
chief executive and Mr Brian 
Small, the finance director. 

Negotiations between the 
warring parties failed to arrive 


at a compromise yesterday, 
despite an earlier offer from 
Malcolm Barr to resign as 
chairman. The brothers yester- 
day announced they had 
changed the trustees holding 
their own shares, after discov- 
ering that their previous 
trustee also held shares for Mr 
Parker and Mr Small. 

Nicholas and Robert Barr, 
who are the sons of the late 
managing director Stuart Bair, 
speak for almost 30 per cent of 
ordinary shares. Malcolm Barr, 
who is also the outgoing chair- 
man of Leeds Permanent 
Building Society, owns 16 per 
cent of the ordinary shares. 


Quadramatic maintains its 
programme with Kestrel deal 


By Pater Pearee 


Quadramatic, the coin- handling and optical 
group which came to market In July 1993, has 
continued its promised programme of acquisi- 
tions with the purchase of Kestrel Injection 
Moulder s, a maker of precision plastic injection 
mouldings, for up to £6.65m. 

At the time of the flotation, Mr Tony Gar- 
tland, chairman, said he wanted to build a spe- 
cialist enginee ri n g group by acquisition. 

The initial net cash consideration for Kestrel 
is £4.4m, after the Elm sale and leaseback of a 
Kestrel freehold property to certain, of its ven- 
dors. An additional deferred amount of up to 
£225m, in cash or shares, is profite-related. 

Plymouth-based Kestrel made pre-tax profits 


of £855,000 on £4. 19m turnover in the year ended 
May 31. In the six months to March, Quadrama- 
tic made pre-tax profits of £3. 72m on turnover of 
£17.6m. Quadrama tic's flotation was followed in 
November 1908 by the £1125m acquisition of 
Quota, a private holding company for two high- 
tech businesses. 

Mr Glenn Powers, finance director, said origi- 
nally the group wanted four divisions - hence 
its name - but that now the building of an 
equally weighted three was going well Coin 
handli ng remained the biggest, followed by 
instruments and then plastic moulding. 

The group would think about a fourth when 
the market capitalisation approached the £150m 
mark. The shares rose 3p yesterday to 168p for a 
valuation of about £6&5m. 


TWs advertbenrenc is issued in accordance with the regubtfcxu of the International Stock Exchange of the United 
Kingdom and the Republic of Ircfand Umtocd (the ‘London Stock Exchange - )- Apptkadon has been made far the gain 
of penatestaam trade on the Unfiswd Securities Marta* on the uandcct Stock Exchange ta the existing Ordinary Share 
of Edmond Holdings pfc and in the new OrcUnoiy Shares to be bsued pursuant to the proposed acquisition of Unden 
PLC. It is emphasised that no application has been made for these securities to be admitted to listing This 
adwrtfaetnem does not constitute an ofieror an Invitation to any person to subscribe fbr or to purchase securities of 
Edmond Holdings pic n is expected that dealings wffl commence in the Ordinary Shares on 20 December 199*. 


City of London PR rises 22% 
to £394,000 at interim stage 


EDMOND HOLDINGS pic 


(incorporated and Reg i st e r ed ft t England and Wales. Re&sterv d Na 1550213) 


Proposed Acquisition of linden PLC 
Admission to Trading on the Unlisted Securities Market 


City of London PR Group, the 
USM-traded specialist investor 
relations and market research 
company, yesterday announced 
a 22 per cent rise in interim 
pretax profits and said the sec- 
ond half should “at least 
match” the £394,000 just 
announced. 

On sales of £ 1.36m (£129m) 


in the six months to September 
30, operating profit was 39 per 
cent up at £172,000 (£124,000). 
despite some softness in the 
market research business. 
Profit on disposal of invest- 
ments came to £50,000 (£23,000). 

The interim is increased to 
1.4p (l.27p) on earnings per 
share of 3.71p (3.17p). 


DIVIDENDS ANNOUNCED 


Following completion of the acquisition of Linden PLC the authorised and issued share 
capital of the Company shall be as follows: 

Allotted, issued and 

Authorised Share capital fully paid 

Number Amount Number Amount 

176,000,000 £17,600,000 ordinary shares oflOp each 129,680,783 £12.968,078.30 


Share capital 


Following the proposed acquisition, the Enlarged Group will be a housebuilder 
operating principally in Surrey, Sussex, Cheshire, the East Midlands, East Anglia, 
Humberside and Yorkshire. 

Copies of the USM Particulars relating to Edmond Holdings pic may be obtained during 
normal business hours on any weekday (Saturdays excepted) (i) from the Company 
Announcements Office of the London Stock Exchange, Stock Exchange Tower, Cape! Court 
entrance, off Bartholomew Lane, London EC2 (for collection only) up to and including 
28 November 1994, and 00 up to and including 20 December 1994 fronv 


Edmond Holdings pfc: Coopers & Lybcand Corporate Finance 

The Old Vicarage Rumtrer Court 

Number One, Main Road tendon EG4A4HT 

Duston, Northampton NN5 #8 

Dated 25 November 1994 


deZocce ft Sevan limited 
Ebbgate House 
2 Swan lane 
London EC4R3T5 


ABedOomocq int 

Atreus -fa t 

Buifcmw Post ..Int 

Caledonia tnvs - Jnt 

CtiVbbi Pttipps Int 

Cfty London Pfi§ Int 

Conce n t ri c — fin 

GPL Aromas bit 

Dart -.int 

ranclmch fin 

Fleming High Inc Int 

For war d Group § frit 

IWP W 

Johnson Matthey int 

BTdonald Mart A __ Jnt 

M’donald Mart B int 

MLHoWStgs kit 

Osborne & Utile — int 

RPC 

Scottish Inv Tat — fin 

South West Water Int 

Storehouse .Jnt 

Tontidnsons Jin 


Currant 

payment 

Date of 
payment 

Cones - 
porefing 
dividend 

Total 

far 

year 

Total 

last 

year 

7.7St 

Feb 24 

72 

. 

22.2 

nil 

- 

0264 

. 

0.75 

1.9 

Jan 23 

1 2 

- 

3.7 

5.7 

Jan 19 

5.4 

_ 

182 

2.7 

Feb 2 

• 

_ 

. 

1 A 

Jan 16 

127 

- 

4 

4^9 

Jan 19 

4.09 

6.15 

5.86 

1 i 

Jan 10 

- 



U 

Jan 13 

1.3 

_ 

3.7 

5.4 

MarlO 

. 

8 

_ 

1.1 f 

Jan 3 

1.1 

_ 

4.4 

as 

Jan 8 

2 

. 

5 

3.6X 

Jan 20 

3.25 

. 

8 

42 

Feb 6 

14 

_ 

11.4 

2 JS 

Jan 13 

2.266 

_ 

9.68 

125 

Jan 13 

1.133 

_ 

4.84 

(L3t 

Ape? 

- 

_ 

0.35 

3A 

Jan 25 

2.5 

_ 

6Ja 

1.1 

Jan 13 

1 

_ 

32 

2L39 

Fab 10 

32 

5.15 

43 

9.1 

Apr 6 

8 A 

. 

2&5 

2.7 

Feb 9 

2 A 

_ 

5.5 

8 

Mar 2 

8 

11.5 

11.5 


Dividends shown pence par share net accept where otherwise stated. tOri 
increased capital §USM stock. *Wsh panes. ^Second interim, making 22p 
so far. 





FINANCIAL TIMES 


8.3% dividend increase 
from South West Water 


By Peggy Hoffinger 


Scottish Widows, a life insurer 
which sells largely through 
independent advisers, 
yesterday became the latest 
company in the sector to move 
to cut costs, announcing the 
closure of 12 branch 
processing offices and the loss 
of 143 jobs. 

At the same time, It took a 
farther step in rhang in g hs 
product range, launching a 
new set of life insurance 
policies with a choice of bow 
commission is paid to the 
advisor. Mare changes to its 
pension plans are expected 
early next m onth. 

All life companies are faring 
increased pressure to reduce 
costs before next year, when 
new regulations will force 
them to give customers more 
infor mati on about charges and 
commission. 

Widows’ job losses mean 
that the clerical staff 
supporting its service to 
independent advisers will be 
almost halved. It cannot rule 
out compulsory redundancies, 
but hopes the target number 
can be met through voluntary 
arrangements. The sales force 
will remain broadly the same 
size. 

The company says that 
operating from six regional 
processing centres outside 
Edinburgh will enable it to 
offer advisers a more efficient 
and reliable service. 


South West Water yesterday 
announced a better-than- 
expected dividend increase, 
despite reporting fiat pre-tax 
profits for the first ball 

The &3 per cent increase in 
the dividend from 8-4p to 9 J.p 
compares with expectations of 
about 6 per cent This helped 
the shares resist the worst of a 
2 per cent decline in the sector, 
fuelled by fears of a general 
election. South West fell by 
just over 1 per cent, from 486p 
to 48lp. ed 

South West announced pre- 
tax profits of £5Q.6tn for the six 
months to September 30. 
against £50 An last time. - 

Sales were 14 per cent ahaad 
at £143m, while Barring * per 
share fell by 0.5 per cent to 
382p. 

The pre-tax figure was 
depressed fry a SSLSm rational- 
isation charge and a £7 An 
increase in interest payments 
to £L2An. 

The return was also hit by 


charges of £3(XM)6o to cover the 
costs of South West's appeal to 
the Monopolies and Mergers 
Commission over the price Jim- 
its set by the industry regula- 
tor for the five years between , 
1995 and 2000. 

Mr K«m TUB, financ e direc- 
tor, would not specify how 
much, the appeal was tikdy to 
cost South West, hot said a ftfr- 
ther charge was expected in., 
the second baft A decision on 
the appeal is expected in 

March. 

The regulated business 
returned pretax profits 4 per 
cent fewer at £49m because of 
the rationalisation . costs. 
About 140 jobs had been cot, 
leaving 2400 employees in the ’ 
utility opera tion. Mr HQ1 said 
that, grindin g the additional 
treatment works, costs had 
Wn lipid at levels similar to 
last year’s. 

South West’s rum-core tfivt- ' 
start, which includes waste 
haulage, construction and 
environmental - businesses, 
returned pre-tax profits of 


£1 fini against a foss of £700,000 
last time: 


cbm ran. 

Satik West has come ant wftti 
the fewest dividend increase so 
far in the sector’s reporting 
season and, given 'the .nncer- ; 
tainties it faces, this is no great 
surprise- T3» -MMC appeal ^ - 
to cast a shadow -over 
the shares for another 'six 
months. The' company also 
faces fiat to minimal earnings 
growth oyer the next few 
years: S<v to provide me a nm— 

gul dividend growth, its rover 

will have to be eroded more 
quickly than that of tts .peers.;. 
This would not be u problem, 
except that its peers wfflT>e 
m c raflgfag their earnings whfle . 
trimming dividend cover. Tore- ' 
casts are for about £96m this-' 
year. In the shorter term, the 

stock wffi be buoyed by ite sub- 
stantial yield of more than 7 
per cent. However, there may 
be others where yield s are 
almost ‘as attractive but . pros- 
pects far growth aie better. .'= 


Macdonald Martin up 22% 
to £2.63m as output rises 


By Roderick Oram, 
Consumer industries Editor 


F ench urch, the insurance 
broker which gained a stock 
market listing in November 
last year, reported pre-tax up 
from £456m to £7.79m tnthe 
year to September 30. 

The result was helped by 
lower interest charges of 
£284,000 (£1.59m) and £58,000 
profits (£875,000 losses) from 
discontinued activities. 

Pro forma pre-tax profits on 
continuing operations, 
assuming the flotation took 
place at the beginning of the 
financial year, showed a 15 per 
cent increase to £7 .93m 
(£8-Sm). 

Earrings per share were 15p 
(10.6p) with the pro forma 
figure rising 16 per cent to 
14.1p (l&2p). The proposed 
final dividend of 5-4p makes 
8p for the full year. 

Mr Roger Earl, chief 
executive, said: “We want to 
continue this good and 
consistent growth.” Market 
conditions were difficult, 
however, and would continue 
to be tough during the next 
year. 

Turnover rose to £32.3m 
(£31 -2m) with £679,000 (£3.1m) 
from discontinued activities. 
OK retail turnover increased 
5.5 per cent to £ 12.6m 
(£11. 9m), including a 25 per 
cent increase from the 
Protection House Insurance 
Services division, despite 
competition from direct line 
insurers. 

Since August Fenchurch has 
acquired a specialist insurer, a 
financia l consultancy and a 
minority stake in a provider of 
health risk management 
services. The reinsurance 
business continued to grow, 
with turnover up from 
£923,000 to £2m. 


Higher distillery output and 
bulk whisky sales helped Mac- 
donald Martin Distilleries 
achieve a 22 per cent increase 
in pre-tax profits from £2.16m 
to ras3m in the six inrmthg to 
September 30. 

Turnover was up 25 per cant 
at £16.4m (£13Jm). 

Sales of f? lAmnnrgrigtft 1 the 

company’s leading malt, rose 
15 per cent in volume farms 
and 19 per cent in value 
because of strong overseas 
demand, particularly in the US 
and F ranco, Shipments in the 
UK were flat, but retail sales 
increased. 

In blended whisky, sales 


were up 7 per cent in volume, 
but down 7 per cent in value 
terms. Bulk sales of blended 
whisky increased, but bottled 
salt* were down 10 per omit 
overall. 

The do wnturn was marked 
in the UK, where volume sales 
of bottled blends fell by 25 per 
cent The grotto lost a luge 
own-label order from a super-. 
waArf chain after it declined 
to lower its price. 

Distillery production doubled 
in the first b»lf, mainly to- 
increase the group's stocks. Mr 
James Fyfe, deputy managing 
director, estimated tfa* capac- 
ity utilisation would average 6B 
per pgn* this year, a grinat 48 
per cent previously. . . 

Sa fes cS Cribtie’s Green. Gin- 


ger Wine, acquired a year ago, 
were in line with forecasts and 
its market share bad increased, ; 
bat the . profit contribution 
“was modest" 

The exceptional item of 
£440.000 included just , over 
£300.000 in compensation to- Mr 
Neil McKerrow who resigned 
as managing director in June. 
The balance was start up costs 
of an Indian joint venture, 
which will begin bottling High- ~ 
land Queen next month. 

The board declared a 10 per 
cent 'rise in the interim divi- 
dend to 2£p (2^06p) on the A 
shares and to L25p (Li33p) cm. 
the B shares. Earrings per 
-share were 12.73p (10.46p) and 
&38p (&23p) On the respective 
classes. • 


Porton shareholders say 
yes to £65.5m French bid 


By Paul Taylor 


Porton International’s 
institutional shareholders yes- 
terday backed a £85 An recom- 
mended bid for the UK biotech- 
nology company from 
Beaufour Ipsen, the family- 
owned French pharmaceuticals 
group. 

Shareholders controlling 88A 
per cent of Portoris shares, 
which are traded under the 
Stock Exchange’s Rule 4.2, 
agreed to accept the French 
bid worth £13.40 in cash or 
notes by the 3pm deadline yes- 
terday. 

Under a separate deal Spey- 
wood. a company set up by 
Beaufour and Portoris manage- 
ment to make the acquisition. 


has also agreed to acquire an 
additional 5.7 per cent stake in. 
Porton. 

These shares, together with 
the valid acceptances of the 
offer, lifted the total number of 
Porton shares being acquired 
to 6.69m or 94 j 6 per cent of the 
outstanding capital, comfort- 
ably above the 90 per cent tar- 
get As a result, the offer has 
became unconditional and will 
remain open for farther accep- 
tances. 

The French group, advised 
by Lazard Brothers, held Irrev- 
ocable undertakings covering 
66.2 per cent of the equity, 
inchiftmg a 36.6 per cent stake 
held by Mr Wensley Haydon- 
Baillie, Porton’s founder 
and ex-chairman ahead of 


the deadline. 

Victory had looked increas- 
ingly certain after institutional 
investors, disappointed by For- 
ton’s financial performance, 
backed the rid which was rec- 
ommended by Kleinwort Ben- 
son, Portion’s financial advis- 
ers. Meanwhile a potential 
rival offer for Porton from 
Scotgen Pharmaceuticals, the 
Angio-US drugs company, 
failed to materialise. 

The acquisition has been 
structured as a leveraged buy- . 
out with Portoris management 
taking an initial 22 per cent 
stake in Speywood on comple- 
tion. Subject to the company's 
performance, trig management 
stake could could rise as high 
as 35 per cent 


ML lifted 13% to £2.33m 


ML Holdings, which designs 
and manufactures electrical 
systems for the aerospace and 
defence industries, had pre-tax 
profits of £2J3m for the half 
year to September 30, 13 per 
cent ahead of £2.06m last time. 
Turnover was 7 per cent ahead 
at £46.3m, compared with 
£43. lm. 

Earnings per share rose to 


L2p (Lip) and an interim divi- 
dend of 0.3p (nil) is declared. 

Mr Howard Grant, chief 
executive, said German subsid- 
iary Schopf Maschinenbau's 
operating loss had “masked the 
good progress” of the group as 
a whole. The outlook contin- 
ued to improve and this woold 
be reflected in the full-year 
results. 


Kiln Capital 
raises £25m 
In placing 


By Ralph AMdns 
Insurance Correspondent 


Linden in £16m reverse 
takeover of Edmond 


Linden, an unquoted 
housebuilder which operates in 
Surrey, Sussex and Cheshire is 
acquiring Edmond Holdings, 
the housebuilder. In a reverse 
takeover worth £l6.1m 
Edmond, which operates in 
east Midlands. East An g lia , 
Yorkshire and Humberside, is 
issuing 78.8m ordinary shares, 
representing 60.7 per cent of its 
enlarged share capitaL 


Mr Andrew Sells, Linden's 
chairman, will become non-ex- 
ecutive chairman of Edmond 
and Mr Philip Davies, Linden's 
chief executive, will become 
chief executive of Edmond. 

Dealings in Edmond have 
been suspended and as T.fndpn 
does not have a three-year 
trading record, application will 
be made for Edmond’s admis- 
sion to the USM. 


Kiln Capital, a planned new 
listed company investing in 
Lloyd's of London, has raised 
£25m via a share placing. 

Kiln plans to invest exclu- 
sively in insurance syndicates 
manage d by the BJ Kiri man- 
aging agency, unlike many 
other Lloyd’s i n vest m ent com- 
panies which have spread 
funds across a range of syndi- 
cates. Dealings are expec t ed to 
start on December L 

The company him also wiede 
an offer to some Names to sub- 
scribe for up to 2m ordinary 
shares at lOOp each. 

Plans for corporate invest- 
ment in Lloyd's have been 
affected this year by the lack- 
lustre performance of gristing 
corporate vehicles and bad 
publicity surro unding the 

insurance market 


Mit 7 ** ' ■ • 






tn addWon to analytag the poUtol and economic sttmrtfon, the martcaj 

trakistry, ttts sumy w]H aianrfn, tftc oohm^mic for Swwton of m, vote on owmlMisHp of the Esromn 
Unkm, due to take place on 13 November. 


Fur (MsBfl on adwartUng please contact: 


BradBay Johnson h Stockholm 
Ta£ +46 8 791 2348 
PNC «4S 8 791 7960 


FT Surveys 


LfcVauffwi, in London 
T«fc +44 71873 3472 
+44 71 873 3428 


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FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 


21 


COMPANY NEWS: UK AND IRELAND 


Strong performance expected to continue in second half 

JM upbeat after jump to £45m 


By Kenneth Gooding, 

Wninfl Correspondent 

Johnson Matthey, the precious 
metals technology group, yes- 
terday reported a record first- 
half performance and said 
there was every chance that 
this would continue in the sec- 
ond half. 

Pre-tax profits increased 28 
per cent from £35.2m to SASJ>m, 
well ahead of analysts' fore- 
casts. However, the share price 
fell by 7p to 550p because of 
market concerns about JM's 
intentions following its 
recently aborted merger talks 
with Cookson, the specialist 
industrial materials group. 

Mr David Davies, JM chair- 
man, described the negotia- 
tions as “a worthwhile exer- 
cise'" , but “we were two 
successful companies looking 
into the future, so it was not 
surprising we had differing 
views about what our values 
are." 

JM was now seeking selec- 
tive acquisitions and looking at 
eight or nine potential pur- 
chases in the electronics field, 
mainly in North America. The 
first should be completed 
before the end of 1934. 

Mr Davies said that JM's 
determination to reduce costs 



Tnwtx Hurriphrie* 

David Davies; potential purchases in the electronics field 



was bearing fruit 

Net revenues from continu- 
ing operations in the six 
months to September .30 rose 
by 12 per cent to £201 5m. 

To underline its confidence 
JM is lifting the interim divi- 
dend by 24 per cent to 42p 
(3.4p) on earnings per share of 
I6p (I4.6p). 


On a divisional basis, operat- 
ing proGt rose 36 per cent to 
£ 18.3m in materials technol- 
ogy: catalytic systems 
increased 20 per cent to £i5.9m; 
precious metals' input was up 
by 7 per cent to 10.8m; and 
profit in colour and print 
(now merged into Cookson 
Matthey Ceramics) advanced 


by 25 per cent to £6.4m. 

• COMMENT 
It must have been frustrating 
for Mr Davies to have reported 
record interim results, prom- 
ised a similar performance in 
the second half and then seen 
Johnson Matthey's share price 
fall. But he must take some of 
the blame. First carpp bis com- 
ments in bis annual statement 
last year about wanting JM to 
become a FT-SE 100 stock and 
then there were the recent 
Cookson capers. So the market 
is understandably nervous 
about the possibility of a big 
acquisition that would require 
a substantial issue of new 
equity. Mr Davies was telling 
analysts yesterday that there 
would not be a hostile bid from 
either side while the present 
JM and Cookson management 
teams were in place. He indi- 
cated that JM would return to 
Its old style - getting bigger 
via friendly acquisitions and 
organic growth. But it will 
take time for the market to 
regain confidence. That aside, 
there is no doubting JM's 
potential. The group will prob- 
ably earn at least £90m before 
tax for the full year and last 
night's share price represented 
16 times earnings. 


Chamberlain Phipps rises 
fourfold in maiden interims 


By Peggy Hofflngor 

Chamberlain Phipps, the shoe 
components and footwear 
group, reported maiden 
interim results showing a 
fourfold increase in pre-tax 
profits, and announced its first 
acquisition since it returned to 
the market in August 

Pre-tax profits for the six 
months to October 1 jumped 
from £l.05nt to £4.5m, on turn- 
over doubled from £3L2m to 
£66.6m. The profits figure 
included an £800,000 reorgani- 
sation charge and, for the first 
time, results from Chamber- 
lain’s French operations 
bought just over a year ago. 

Mr Dan Sullivan, the US- 
born chair man, said that, on a 
like-far-like basis, pre-tax prof- 
its for the half-year rose by. 
about 21 per cent to just over 
£5m. Sales on a like-for-like 
basis, excluding disposals, bad 
been flat. 

Tbe materials division, 
which includes the footwear 
components business formerly 
owned by Erode, improved 


Chamberlain Phipps 

Share price (pence) 

185 -- 



160 L - 


Aup 1984 
Source: FT Graphae 


Nov 


operating profits from £1.32m 
to £1.62m, on sales 23 per cent 
down at £19 .6m. Mr Sullivan 
said trading in tbe UK contin- 
ued to be difficult although 
the division had enjoyed 
strong export growth of about 
15 per cent 

The footwear business, 
including SAC and Thierry 
which were not consolidated 
into the group’s results at flo- 
tation, increased operating 


profits from £391.000 to 
£4. 19m. Sales jumped from 
£8J>9m to £47m. 

Chamberlain also announced 
a conditional agreement to 
acquire Ouest Parts, the larg- 
est supplier of components to 
tbe French shoe industry, for 
about FFr74m (£8.79m) in 
cash. Last year tbe group 
returned profits of abont 
£i.4m and had net assets of 
about £2. 2m. Mr Sullivan said 
he expected to expand further 
in continental Europe, and 
Chamberlain was currently in 
discussions about a second 
purchase. 

Chamberlain finished the 
first half with net debt repre- 
senting almost 90 per cent of 
shareholders’ funds. This was 
expected to fall to about 60 per 
cent by the year-end. 

The group declared a maiden 
dividend of 2.7p. Earnings rose 
from 6.7p to 7.9p. On a pro 
forma basis earnings rose to 
7.7p. 

Chamberlain's shares, 
floated at 165p in August, 
closed 3p up at 183p. 


Strong sales growth lifts 
CPL Aromas to £930,000 


By David Biackwefl 

CPL Aromas, the fragrance 
and flavour manufacturing 
company floated in June, 
boosted interim profits by 
almost 35 per cent on the back 
of strong sales growth. 

Pre-tax profits for the six 
months to the end of Septem- 
ber rose from £690,000 to 
£930.000. Sales, which are split 
40/60 between the UK and over- 
seas markets, grew from 
£&43m to £9.76m. 

The shares, which were 
placed at 150p. closed up lp at 
201p yesterday. 

Mr Terry Pickthall, the 
founder and chairman whose 
famil y still holds 36 per cent of 
the shares, said the group had 
experienced organic growth 
across the board in Its mar- 


kets. “It’s nice to see that our 
existing operations can achieve 
this organic growth before our 
Aromachem operation starts." 

The group, which raised £4m 
in the notation, is investing in 
a new aroma chemicals facility 
on Teesside. It is expected to 
start production next summer, 
and contribute to profits in 
1996-97. 

Margins remained flat at 10 
per cent in spite of raw mate- 
rial price increases. Mr Pick- 
thall said the group had been 
able to find alternative sources 
of supply to offset some of the 
rises. 

Net cash at the period-end 
was £1.18m. Interest payable 
foil from £148.000 to £55.000. 

Earnings per share were 6.6p 
(5.9p). and the interim dividend 
is lip. 


Osborne & 
Little rises 60% 

Continuing recovery in the UK 
coupled with a 28 per cent rise 
tn US sales enabled Osborne & 
Little, the wallpaper and fur- 
nishing fabrics group, to hoist 
pre-tax profits by 60 per cent 
from £947,000 to £1.5lm in the 
six months to September 30. 

With turnover up 28 per 
cent at £ ll.7m (£9.im) contin- 
ued cost controls helped oper- 
ating margins rise 2 percent- 
age points to 12.8 per cent. 
Earnings were I5.15p l9.33p) 
and the interim dividend is 
raised to 3.5p (2.5p). 

Sr Peter Osborne, chairman, 
said the second half continued 
to perform well. Although the 
company would incur the ini- 
tial costs of setting up its 
French operation and an addi- 
tional UK warehouse, he was 
“confident of an excellent out- 
come for the year." 


. . 4 


This notice is issued in compliance with the requirements of The International Stock Exchange of tbe 
Un ited Kingdom and the Republic of Ireland Limited (“tbe London Stock Exchange”). It does not 
constitute an invitation to any person to subscribe for, or purchase, any ordinary shares in Kiln Capital 
pic (“the Company"). 

Application has been made to the London Stock Exchange for all of the ordinary shares in the 
Company issued and now being issued, to be admitted to tbe Official List. It is expected that dealings 
in the ordinary shares will commence on Thursday, 1st December, 1994. 

Kiln Capital pic 

( Incorporated in England and Wales under the Companies Act 1985. Registered No. 2971967) 
^ Placing 

by 

Morgan Stanley & Co. International Limited and Cazenove & Co. 

of 

up to 27,000,000 ordinary shares of lOp each 
at a price of lOOp per share 
payable in foil on acceptance 


Authorised 
Amount 
£3,600,000 


Number 

36,0 00,000 


Share capital following the Flaring: 


ordinary shares of lOp each 


Issued and fully paid* 
Amount Number 

£ 2,700,000 27,000000 


. . ^ ial fa placing and the separate Names Offer by Cazenove & Co. of up to 2 million 

‘Zrffrary shares are fully subscribed. 

. V stina particulars relating to the Company may be obtained during normal business hours 
Copies of the __^ nnfMincements office at the London Slock Exchange, London Stock Exchange 
from *e Cmnpan p ff Bartholomew Lane, London EC2N 1HP (for collection only) on 

Tower, Cap* , 7S(h November 1094 and on ami weekdav. Saturdays and mihlir 


Tower, November and Monday. 28th November 1994 and on any weekday. Saturdays and public 
Friday, 25™ ^ including Thursday, 8th December. 1994 from the registered office of the 

^ I ^^ s ^ Unto,,EOM5AL ' odta ' : 

* C °- *“ l8mali0nal Limtad 

25 Cabot Square 
Canary Wharf 

London El* 4 ^ A 

Friday, 25ih November. 1994 


registered i 

Cazenove & Co. 
12 Tokenhouse Yard 
London 
EC2R7AN 


Scottish Investment 
net assets dip 6 % 

Net asset value per share of 
Scottish Investment Trust fell 
by 6 per cent from 280p to 
263.2p over the year to October 
31. 

For tbe 12-month period, net 
revenue edged ahead to £i4.2m 
(£14. lm). Gross income totalled 
£29.8m (£27m). 

Earnings per share Improved 
from 5.48p to 5.49p and a final 
dividend of 3.39p (3.2p) is rec- 
ommended for a total of 5.15p 
(4.9p). 


Strength in 
Netherlands 
helps IWP 
to I£7.6m 


By John Murray Brown 
in Dublin 

IWP International, the Irish 
household and personal care 
products and packaging group, 
reported a 69 per emit increase 
in pre-tax profits from I£4J52m 
to l£7.64xn (£7 .5 4m) for the 
half year to September3a Lev- 
endaal, the Netherlands-based 
toiletries group, acquired in 
October 1993, made a signifi- 
cant contribution. 

Mr Joe Moran, chief execu- 
tive, said: “The performance 
was better than we expected.” 
He pointed to the 20 per cent 
rise in earnings per share to 
14.53p (L2.11p). 

Turnover grew 49 per c eat 
to l£72m d£4A3m), with the 
Netherlands accounting for 43 
per cent. UK sales fell in the 
period, while Irish turnover 
rose slightly. 

The group, which is listed in 
Dublin and Loudon, has about 
20 diversified subsidiaries in 
tbe UK, Ireland and the 
Netherlands. 

Levendaal’s performance 
more than m ade n p for a static 
UK market. IWP paid I£5Im 
for Levendaal. As a result 
gearing had risen to 76 per 
cent at the end of tbe period. 

IWP also announced that it 
was “wi thin two weeks” erf fin- 
alising a management buy-ont 
of Questel, its UK-based loss- 
making television company. 

IWP is reviewing marketing 
strategy to target European 
countries, particularly Ger- 
many and Scandinavia. It is 
appointing Mr Neil Popham, 
formerly with BP’S nutrition 
subsidiary, as director In 
charge of household products 
and personal care. 

The interim dividend is 
raised to 3.6p (3.25p). 


Caledonia Investments 
declines to £22.7m 


By David Wighton 

Caledonia Investments, the 
holding company controlled by 
the Cayzer family, saw pre-tax 
profits fail from w.swi to £22.7m 
in the six months to September 
30 and warned that it would be 
“challenging” to improve on 
last year’s record £45.2m 
annual profits. 

The shares fell 25p to 6S0p. 
compared with set assets of 
645p. down from 68lp at the 
start of the year. 

Operating profits, which 
exclude disposal gains, edged 
up to £23m (£22m> helped by a 
strong improvement 3t Exco, 
the recently floated money bro- 
ker where Caledonia retains a 
27 per cent stake. 


But Exco has warned of sub- 
dued trading in the third quar- 
ter. while Bristow Helicopters, 
Caledonia's other large associ- 
ate. is suffering from increased 
competition and reduced activ- 
ity in the North Sea. 

In addition, Caledonia has 
made two significant invest- 
ments recently which will not 
contribute to its results until 
next year. 

It has spent S44m (£26.8m; on 
a one-third interest in Sun 
International Investments, 
which owns the Paradise 
Island resort in the Bahamas; 
and It has paid £20m for a 29.9 
per cent holding in Ivory & 
Sime. the Edinburgh-based 
fund management group. 

After a higher tax charge. 


earnings per share dropped to 
16p (Z8.Sp), but the Interim div- 
idend is raised by 03p to 5.7p. 

Of the 36p drop in assets per 
share over the first half. 20p 
represents the write-off of 
goodwill on the Ivory & Sime 
acquisition. Caledonia has 
written off a total of 60p a 
share of purchased goodwill. 
“By any objective yardstick it 
is hard to regard this write-off 
as necessary," the company 
said. Assets per share have 
also been affected in tbe period 
by the fall in value of Caledo- 
nia's stakes in The Telegraph 
and Close Brothers. 

Trading profits rose to £2 8m 
(£2.3m) reflecting progress at 
Amber. Abacus and, particu- 
larly. Clan Asset Management. 


Continuing problems at 
ASME hit Billam shares 


By Nigel Claris 

Continuing problems at its 
Aircraft and Sheet Metal Engi- 
neers subsidiary are expected 
to lead to J BxUam, the preci- 
sion engineering company, 
reporting a loss for tbe calen- 
dar year. 

The shares fell I9p to 123p 
yesterday. After the company 
warned of a downturn at 
ASME 12 months ago the 
shares fell 50p to 21 9p and they 
ended lOp down at 134p in Sep- 
tember after reorganisation 
costs at the offshoot contrib- 
uted to lower interim pre-tax 
profits. 

Tbe Sheffield-based company 
also announced that it had 
appointed Mr Barry Truman, 
as group chief executive, to 
help sort out ASME and then 
return Billam to growth. Mr 
Truman, has been a nonexecu- 
tive director for almost five 


years and has served in senior 
management positions within 
the industry. 

Mr Stephen Ingram, chair- 
man. said the problems at 
ASME were irritating and frus- 
trating. “We have not lost any 
customers, but the disruption 
caused by the restructuring 
and the state of the aerospace 
market have left tbe company 
in losses. 

“We are paying the 
short-term price for longer 
term benefits.” 

He added that the restructur- 
ing was almost complete and 
1995 should see a return to 
profits. 

BQlam's other activities were 
performing satisfactorily, but 
were not making enough to 
cover the ASME losses. How- 
ever. the company expects to 
he able to hold the final divi- 
dend at 3.1p for an unchanged 
total of 5.3p. 


Kleeneze 
warns of only 
small profit 

Kleeneze Holdings’ shares lost 
12 per cent yesterday after the 
home shopping concern 
warned that it expected only a 
small profit for the year to 
August 31, compared with 
£l.0Gm. 

However as a mark of Hs 
confidence in its prospects, it 
said the full year dividend 
would be not less than l-5p, 
against lp. 

The shares fell I8p to I38p 
yesterday. 

The company blamed weak 
control over the recruitment of 
new agents daring 1993 and 
1994, which had led to the 
need for a bad debt provision 
of abont £lm. 

This was in addition to the 
previously announced adverse 
impact of operating losses and 
losses on the disposal of The 
Leading Edge, estimated at 
£1.5m. 


EH© 



* Johnson Matthey has had 
an excellent first 
half across all its divisions. 
Our prospects for the rest 
of the year are most encouraging. 


99 


DAVID DAVIES, CHAIRMAN 




KEY FIGURES 

1994 

1993 

change 

Net revenues 

£201. 5m 

£179-6m 

+ 12% 

Profit before tax 

£45.2m 

£35. 2m 

+28% 

Earnings per share 

l6.0p 

12. 6p* 

+27% 

Interim dividend 

4.2p 

3.4p 

+24% 




ms 


* Excluding rax saving on scrip dividend 


Johnson Matthey 

WORLD LEADER IN PRECIOUS METALS TECHNOLOGY 

For a full copy of the Interim Results, please contact: The Secretary, Johnson Matthey Pic, 2-4 Cockspur Street, London SW1Y 5BQ. 

Tbe conirnt* ■’( rhb aJvtrmsniem. (urwlnch rfic Directors of Johnson Mi (they rL arc solely responsible. ha»< been approved for the purpose of section J? of The Financial Services An 1 986 by on authorised person. 

The (iswcul information given above doet not constitute statutory accounts. 




If"** 


FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 


COMPANY NEWS: UK 


Babcock back in the 
black with £2.83m 


By Andrew Baxter 


Babcock In ternatio nal 


Babcock International, the 
en gineer ing contractor, materi- 
als handling and faralitiaa man- 
agement group, returned to 
profit in the half year to Sep- 
tember 30, but is again omit- 
ting its interim dividend. 

'Hie group, which is in the 
first few months of a three- 
year restructuring plan, made 
pre-tax profits of £2fi3m, com- 
pared with losses of £9 Jflm. 

Mr John Parker, chairman, 
said the modest profit was in 
line with the corporate plan, 
which was on schedule, and 
profitability would improve in 
the second halt 

However, higher then expec- 
ted losses in the group’s main 
problem area, its energy divi- 
sion, caused analysts to down- 
grade fall-year profit forecasts. 

Turnover fell from £413m to 
£349m, partly reflecting the 
contraction of the energy divi- 
sion and reduced revenues 
from Babcock’s Drax flue gas 
desulphurization contract for 
National Power, now approach- 
ing completion. 

The group order book fell 
from £GQ8m to a H satisfactory” 
level of £569m, which excludes 
the £100m-plus refit contract 
for HMS Superb, to be handled 
by the Rosyth Royal dockyard. 

The loss at the energy divi- 
sion was reduced to £6.B5m 
(£13.7m), on turnover down 
from £l78m to £108m. Its 


Sham price (pence} 
40 



Source: FT GrapHta 


where profits were £5.2m 
(£42m) on turnover of £98. lm 
(£lOlm). Babcock is the sole 
bidder for Rosyth dockyard, 
where it has a management 
contract until March 1996. 

Mr Parker said Babcock Ros- 
yth Defence, as the dockyard 
operator, could end up leasing 
the facilities from Rosyth 2000. 
a consortium of which it is a 
member. The consortium is a 
separate initiative from the 
proposed privatisation. 

Net cash at September 30 
was higher than expected at 
£53.7m (£10m debt). Earnings 
per share were 0.17p (1.59p 


Concentric 
maintains 
growth 
with 9% 


increase 


By Paul CheeSeright, Mdands 
Cotres port dent 


restructuring was proving to 
be tough and demanding, said 
Mr Parker, and had required 
wider management changes 
than originally envisaged. 

Additional costs have been 
identified on some older con- 
tracts and there was no gross 
margin on about £25m turn- 
over elsewhere. Also, tendering 
costs were heavy, as winning a 
large power plant order 
remained a priority. 

Babcock is awaiting deci- 
sions on 14 big power plant 
tenders, and - in consortium - 
is one of four groups bidding 
for National Power’s Pembroke 
FGD contract That would be 
worth about £l00m to Babcock, 
said Mr Nick Salmon, chief 
executive. 

The best performing division 
was facilities management. 


• COMMENT 

This was always going to be a 
transitional year for Babcock, 
with its new management 
team and strategy. The more 
optimistic full-year forecasts, 
of as much as £2Sm pre-tax - 
against a £41 .2m loss - implied 
that the energy division would 
break even, which Is clearly 
wide of the mark. House bro- 
kers Smith New Court have 
revised their forecast down 
from £17m to £13m, giving 
earnings of ip and a prospec- 
tive p/e of 26. Shareholders, 
however, should focus on pros- 
pects for the following years, 
where the groundwork for a 
solid recovery in profits and 
dividends h as been laid. The 
dividend question will be 
reviewed at the year-end. 


Forward edges ahead 
and makes £3m sale 


Pressure on 
margins hits 
Tomkinsons 


By Gary Evans 


Forward Group, the USM- 
quoted specialist circuit board 
maker, yesterday reported a 
small increase in interim prof- 
its and the £L96m sale of its 
Chemical Express offshoot to 
its management 

Pre-tax profits rose by 
£10,000 to £940,000 in the six 
months to July 31, on turnover 

Of £10.9m (£10_2m). Earnings 
per share dipped to 7.5p (Bp), 
but the interim dividend is 
raised by 25 per cent to &5p 

(2p>. 

Mr Ray Chamberlain, chair- 
man, said the result, thoug h in 
line with expectations, was 
affected by temporary disrup- 
tion which occured at Forward 
Circuits’ Tam worth factory, 
while a large-scale Investment 
programme in new inner layer 
manufacturing capacity was 
undergoing commissioning tri- 
als. 


Margins fell temporarily as 
certain sub-contract services 
had to be purchased, he 
explained. This situation 
would also have an impact on 
second-half results, he said, 
but trading prospects “remain 
very positive.” 

Chemical Express together 
with its subsidiary, the One 
Stop Chemical Shop, makes 
and markets a range of 
cleaning, maintenance and jan- 
■ itorial products. But because it 
is no longer considered part of 
the group’s strategic plan, it is 
being sold in a cash deal, 
which will in the short term, 
substantially reduce paring 

However, Mr Chamberlain 
said: “We are currently canrid- 
ering a number of business 
opportunities and should nego- 
tiations he successfully con- 
cluded, than a substantial pro- 
portion. of the proceeds will be 
reinvested in businesses which 
strengthen the care activities." 


As forewarned in September, 
Tomkinsons, the carpet manu- 
facturer, reported a 36 per emit 
fall in pre-tax profits in the 
year ended October 1 from 
£1.13m to £718.000. 

Sales in the period fell to 
£19.5m (£20.5m), but margins 
suffered from tough market 
conditions, including “severe 
price cutting" and came 
through at 4 per cent, against 
5.5 per cent previously. 

Mr Lowry Maclean, chair- 
man, said yesterday that Tom- 
kinsons had experienced only 
five months of reasonable trad- 
ing activity in the 12 months. 

On the day in September 
that the company warned on 
tr ading , its shares declined 
from 240p to 215p. yesterday 
they added 2p to 216p. 

The final div idend is main- 
tained at 8p, making an 
unchanged total of 11.5P. Earn- 
ings per share were 7.7p 
(1*2PX 


GLOBAL VISION -EUROPEAN FOCUS 


-t,. -a.. 


Thla announcement appears 11 a manor of record only 





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is well qualified to structure complex deals and raise capital internationally. 
If we can be of assistance to you please contact David Tate on 071 623 8711. 



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West Merchant Bank is a member of the WestLB Group and a member of the Securities and Futures Authority. 


Former Spring Ram chief makes City comeback in £6.6m deal 

Rooney takes the helm at Atre 


By Richard Wofffe 


Concentric, the West 
Midlands-based engineering 
group with B0 per cent of its 
! sales in automotive markets, 
continued its earnings growth 
with a 9 per cent rise in profits 
and predicted farther gains in 
1994*95. 

The group yesterday 
announced that pre-tax profits 
far the year to September 30 
were £i0-24m, compared with 
£9 .36m previously. This puts 
earnings comfortably above 
the level of 1990, the peak year 
before recession. 

On earnings per share at 
12.73p (12.03p), Concentric is 
lifting the dividend by 5 per 
cent from 5.86p to &l5p, with 
a recommended final payment 
ofdJEp, 

“We are able to be 
competitive in most countries 
and our products and 
technology are considered to 
be attractive. It is from that 
secure base that we expect to 
make farther progress this 
year.” said Mr Tony Firth, the 

chairman. 

Helped by expanding sales 
in North America and East 
Asia, with a stranger domestic 
market - “Europe has been an 
economic non-event for years,” 
according to Mr Firth - 
Concentric's turnover rose to 
£127 3m (£116,4m). Exports 
accounted for 32 per cent of 
sales. 

But like other engineering 
groups, Concentric is 
experiencing sustained 
pressure on its margins. It is, 
as Mr Firth pot it, “the pig in 
the middle” of rising raw 
material prices and the 
demands of customers to hold 
selling prices. “We did quite 
well to hold our margins,” he 
said. 

The pressure on margins led 
both to further res t ruct u ring 
which cost £0.4m and to 
continued capital invest- 
ment 

Concentric last year spent 
£7m on investment compared 
with £8m in 1992-93. and 
expects spending to be 
maintained aro und thin level 
in 1994-95. “If you don't spend 
a lot of money, you're out of 
the Tace,” commented Mr 
Firth. 

The group ended the year 
with net cash balances of 
£&3m, which is £0.4m less 
than a year before. 

The sbares were unchanged 
at 178p. 


Mr Bill Rooney, former chief 
executive of Spring Ram, yes- 
terday returned to the City to 
announce a £6.6m deal to take 
control of Atreus, the bath- 
room goods supplier. 

Mr Rooney, who will become 
chairman of the recently 
floated company, beads a con- 
sortium which is investing 
£4. 8m in Atreus shares and 
convertible loan notes. 

His family trusts are also 
underwriting an open offer of 
18m new shares to sharehold- 
ers at lOp, on a one-for-two 
basis. 

Atreus shares dosed up 4p at 
I3p yesterday. 

The investment comes 14 
months after institutional 
investors forced Mr Rooney off 
the Spring Ram board. 

His departure followed reve- 
lations of false accounting at 
its Balter ley Bathrooms sub rid - 
iary and three profit warnings 
in eight months. Before this, 
the group had enjoyed 13 years 
of spectacular growth. 

Mr Rooney is joined at 
Atreus by Mr Alan Bell, former 
chief executive of Spring 
Ram’s kitchen division. Mr 
Ron Farr, former chief execu- 


tive of Spring Ram’s special 
products business. 

Mr Rooney said: "We saw 
ourselves coming back to the 
City in three or four years* 
time, after the dn$t had settled, 
but Atreus approached us. 
With our expertise and cash, 
they felt we had a nice partner- 
ship." 

Tlie subscription and open 
offer is expected to raise about 
£6.4m net of expenses to fond 
new products and acquisitions 
in related sectors of the home 
improvement market. 

Alongside the takeover 
Atreus annnTmppd the acquisi- 
tion of Samson Stairs, which 
manufactures wooden balus- 
trade systems, in return for 2m 
ordinary slumps 

Mr Ben, the new chief execu- 
tive of Atreus, said: “If we can- 
not treble what we have in two 
or three years, we might as 
well go home. 

“It is very exciting to go into 
the 1990s with a dean sheet, 
but it is unlikely we will be . 
budding too many large facto- 
ries in the next few years.” 

Atreus gained an official list- 
ing in March 1993 by a reverse 

takeover Of the mmpany 
URS International. The group 
had a market value of £7.76m 



>£- " y -'t ’ 

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r*. 


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Bill Rooney: envisaged a return after the dust had settled 


after a placing arid public 
offer of 27.5m shares at 20p 
each. ... 

At the time the board said It 
wanted to grow by expandin g 
its product range. However, 
the company issued a profit 
warning, last January, saying 
the company had suffered 
pressure on mar gins. 

Atreus yesterday reported 


RPC edges ahead to £4.4m 


Secure Retire 
rises by 21% 


By Geoff Dyer 


Despite an increase in the cost 
of raw materials of np to 60 per 
cent, interim pre-tax profits at 
RPC Group, the rigid plastic 
packaging manufacturer, 
edged ahead from £4 .24m to 
£4. 4m. 

Turnover from continuing 
operations slipped to £35 .9m 
(£36. 5m) for the half-year to 
September 90. However, acqui- 
sitions took total sales to £37m. 
The accounting period was one 
week longer in the previous 
half-year. 

Shares in RPC, which ramp 


to the" market in May last year, 
firmed 5p to close at I44p. 

Mr Ron Marsh, chfpf execu- 
tive, said trading for the period 
had “gathered pace after a 
slow start”. Demand for paint 
containers was depressed at 
first, but activity had picked 
up well in the quarter. 

Operating margins rose from 
12 per cent to 12£ pm* cent 
despite rising costs for plastic 
polymers of between 30 and 60 
per ramt Mr March gairi the 
group had been able to pass on 
those costs to customers. 

Operating profits on continu- 
ing operations rose 5 per cent 


to £4. 6m (£4J9m). Interest pay- 
able rose to £281,000 (£154.000), 
following the a cgnuatinh of the 
industrial containers business 
of Lawson Mardoh and 
McKechnie’s UK packaging 
business. Gearing increased 
from 14 per cent to 42 percent 

RPC had negotiated a . num- 
ber of long-term contracts, 

vru-lnHinp Rmw 7 firihnfln anri 

ICL Some had “secured the 
group’s supply position well 
into the second half of the 
decade”, Mr March said. 

Earnings per share slipped' 
(Up to 5.3p. The interim divi- 
dend is Lip (lp). 


Selecting a steady growth path 

Andrew Bolger reports on the recruitment agency’s expansion plans 

S elect Appointments proportion had now nearly 
(Holdings), the UK-based doubled, 
recruitment agency “The process is more 


S elect Appointments 
(Holdings), the UK-based 
recruitment agency 
I which was rescued from finan- 
I rial collapse three years ago by 
I a group of Swiss investors, has 
renewed its ambitions to 
become a leading international 
group. 

The USM-quoted company 
has made seven acquisitions 
this year and now operates in 
12 countries. Its market value, 
which slipped to £540,000 
before the 1991 takeover, now 
stands at £77m. following a 
£44m rights issue in August 
Select is backed by former 
managers of Adia, the Swiss- 
based recruitment agency. 
Floated in 1987, the agency bad 
seen its profits and share pries 
collapse after a period of debt- 
financed overseas expansion. 

Mr Tony Martin, a former 
Adia director who became 
chairman and chief executive 
of Select in 1992, said: “We are 
trying to take the cyclicality 
out of the business, which has 
been the weak point of recruit- 
ment.” 

Mr Martin said the aim was 
to build a group which was 
diversified both geographically 
and sectorally. Currently more 
than half the group's turnover 
is in the US, but expansion 
into continental European is a 
priority. 

Mr Martin believes that com- 
panies are realising the need to 
manage their payroll actively - 
often their biggest single cost 
“The days of everyone working 
from nine-to-five, five days a 
week are over. Most companies 
now have core workers, sur- 
rounded by contract workers 
and then temps,” he said. 

The increasing involvement 
of women was also leading to 
more flexible working patterns. 
Mr Martin said that In 1992, 

1 per cent of the US workforce 
was placed in temporary jobs 
by private agencies - and that 


proportion had now nearly 
doubled. 

“The process is more 
advanced in the US, but we 
expect to see a similar rate of 
progress in the UK About 15 
per cent of the UK workforce is 
now temporary or part-timers, 
and that proportion is expected 
to rise to about 25 per cent 
over the next three to four 
years,” he said. 

His clients were starting to 
restructure their staffing lev- 
els. “More and more of our 
business is planned, long-term 
contract labour.” 

Select also points to a skills 
shortage, which has emerged 
unusually early in the recov- 
ery. In the UK the agency has 
jobs for 100 heavy goods 
vehicle drivers and for word 
processor operators, if they can 
handle a broad range of soft- 
ware packages. 

Mr Martin commented: “If 
we really are in for several 
years of steady growth, as the 
politicians suggest, these short- 
ages will become really acute.” 

The Swiss investors in Select 
launched a £7.5m rescue, 
injecting £2L5m in exchange for 
90 per cent of the equity, £2 Am 
to cut debt and £2Am for work- 
ing capital Operations in the 
US, Australasia and France 
were sold. 

The Swiss have so far 
Invested a total of £35m in 
Select, although their share of 
the equity fell to 80 per cent 
following the August rights 
issue. The investors intend to 
keep their money in the group, 
but want institutional inves- 
tors to dilute the Swiss equity 
stake to about 50 per cent as a 
result of farther acquisitions 
and rights issues. 

At the time of the takeover, 
Select had 30 branches for sec- 
retarial and a dminis trating 
staff in the UK mainly in the 
south-east of England. It now 
has 51 branches in the UK 


.cjf '• 2'** ' **•' \ -*y ' 



w 






Tony Martin: trying to take the cyclicality out of the business 


spread from Newcastle to Bris- 
tol, and has moved into com- 
puting, accounting and tight 
industrial vacancies, such as 
drivers. 


S elect also has small 
operations in Switzer- 
land. Hungary and 
Greece - but acknowledges 
that it must get into the Euro- 
pean heartland of Germany, 
France and the Netherlands. 
Other operations are in Austra- 
lia, Canada, Hong Kong and 
Japan. 

Mr Each Miles, finance direc- 
tor, said the agency sought 
businesses with further growth 
potential run by experienced 
local managers, who knew the 
country and culture and kept 
an equity stake in the busi- 
ness, the local name of which 
would be retained. 


The group is not just expand- 
ing by acquisition - it has 
started up new ventures in 
Hungary, South Africa and 
Singapore, it is also prepared 
to franchise operations and 
inject cash into businesses. 

Since acquiring a C alifornian 
accountancy agency for £ 42m 
last year, the number of 
branches has grown from eight 
to 12 . 

Select suffered a pre-tax loss 
of £600.000 in 1993, but is fore- 
cast to make £2 Jim this year 
and £7.5m next year. 

Select claims to be building 
its network with an eye to the 
bad times, not the good. Mr 
Martin said: "We are prepared 
to forego some profi tabilit y in 
the good times to avoid the 
expense of laying off staff and 
closing branches when next 
there is a downturn." 


Clydeport placing 
gives £55m valuation 


Monarch Resources 
back in the black 


By James Buxton 


Trading in shares of Clydeport, 
the privatised part operator on 
the river Clyde, will begin on 
December 8, following the plac- 
ing with institutions of 43 per 
cent of the company's issued 
share capital The placing, at 
133p per share, values the com- 
pany at £5L9m. 

Some 14.1m shares were sold 
on behalf of existing sharehold- 
ers, while a further 3.76m 
shares were issued by the com- 
pany. raising £4.1m net of 
expenses to redeem preference 
shares and provide cash. 

Montagu Private Equity has 
reduced its stake in the com- 
pany from 28 per cent to 6 per 
cent and the stake held by the 


company's management, 
employees and their families 
has fallen from 67 per cent to 
45 per cent 31 is retaining its 5 
per cent stake. 

hi the 40 weeks to October 7 
1994 Clydeport made pre-tax 
profits of £3Jm, including an 
exceptional gain of £1.45m 
from property transactions, on 
turnover of £ll38m. Pre-tax 
profits of £4.lm (before the 
exceptional item) are forecast 
for the full year. 

Earning s per share for the 40 
week period to October 7, 
excluding the exceptional gain, 
were 7.66p. 

Net dividend to- the 40 week 
period was 1.86p and the 
notional net dividend for 1993 
would be 3u51p. 


By Kenneth Gooding, 

Mining Correspondent 


Monarch Resources, the 
London and Toronto-listed 
group that mines gold in Vene- 
zuela, has reported net income 
in the third quarter of *317,000 
(£133^92) compared with a loss 
of Jl-25m in the comparable 
period. 

The improvement reflected 
an "e x ce l l en t" performance at 
the troublesome Rev emin pro- 
cessing plant and the start-up 
of the low-cost La Comorra 
mine during the three months. 

The company has decided to 
change its primary stock 
exchange listing to Toronto 
from December 31 and has 
advised the London exchange 


of this decision. 

La Comorra, which started 
up in the second half of 
August, produced 3,440 troy 

ounces of gold at a cash cost of . 

5292 an ounce. There was an 
operating profit of *270,000 
from the mine. 

In the quarter the Revemin 

SSEwFE? 1 ® 61 * 3,103 ounces of 
gold (4,699 ounces in 1993) at a 

oncost of *334 an ounce 

Monarch's net income for the 
nine months to September 30 
was $835,000 (net loss of 

production 
reached 27,066 ounces (134)95 
ounces). The average ^ 

EE!*. receiv * ^ “toe 

535““ was *384 an ounce 


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pre-tax losses of £331.000 
(£551,000 profit)- on turnover of 
£2.94m (£3.78m) in the six 
months to September 30. 

Mr Charles Gillams. chair- 
man, said the losses reflected 
the cost of an overhead reduc- 
tion programme and weak con- 
sumer spending. 

The board did not declare an 
inter im dividend.' . 


Secure Retirement, which, 
floated in April, achieved pre- 
tax profits of £254,000 for the' 
half year to September 30, a 21 
per cent improvement on 
£210,000 last time. - 

Turnover of the company, 
which builds sheltered hous- 
ing for the elderly, edged 4 per 
•cent ahead to ai .ggm (£L17m) 
for the period. .. 

j Earnings per share were 
24»P(2-09 p). 

No interim dividend is 
declared. However, the board 
hopes to be able to. consider 
payment of a dtvMeod at the 
year-en<L 


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FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 

PROPERTY 


23 


Quote, unquote 


F rom an international 
perspective, the struc- 
ture of the UK prop- 
erty market is 
unusual. The quoted property 
sector is valued at £l3.5bn. 
with assets of perhaps £i6bn 
held in stock-exchange listed 
companies. No other country 
has such a large number of 
quoted property companies. 

But are investors right to 
support such a large quoted 
sector? 

Between 1970 and the end of 
1993, the Investment Property 
Databank index showed an 
average annual total return of 
12.4 per cent, excluding devel- 
opment and trading activity. 
This is the return available to 
a passive investor owning 
properties directly. 

Over the same period, the 
quoted property sector also 
showed an average total return 
of 12.4 per cent 
In other words, property 
companies have - in aggre- 
gate, over the long term - 
added nothing to the perfor- 
mance of their underlying 
assets. 

In theory, property compa- 
nies should add value in two 
ways: through management 
expertise and gearing. The per- 
formance of the shares sug- 
gests these features are, at 
best, mixed blessings. 

Management expertise costs 
money, which means that part 
of the investors’ income is 
eaten away by executive sala- 
ries and administrative costs. 
According to an analysis by 


Are listed companies good 
value, asks Simon London 

about 60 per cent, low by his- 


Gof dmnn Sachs, the US invest- 
ment bank, on average 8 per 
cent of property companies’ 
gross rental Income is 
absorbed by administration 
costs, over and above the cost 
of maintaining the buildings. 

This average figure hides a 
wide variety of performance. 
The most costly companies to 
run (usually developers) spend 
up to 20 per cent of gross rents 
on administration. 

“There are too many prop- 
erty companies and too few 
with the necessary skills to 
outperform over the long run. 
There should be 40 larger prop- 
erty companies rather than 120 
smaller ones. The savings in 
terms of expenses alone would 
enhance investment perfor- 
mance," said Mr Marc Gilbard, 
analyst at Goldman Sachs. 

Gearing also cuts both ways. 
During the upturn sharehold- 
ers see the value of their com- 
pany rise Ear faster than an 
ungeared investment. When 
property values are falling, 
though, shareholders’ funds 
can be rapidly eroded. 

In an ideal world, property 
companies would borrow going 
into recovery and repay debts 
as the market started to peak. 
Yet the sector has a nasty 
habit of becoming over- 
geared at the wrong point in 
tiie cycle. 

For example, average gear- 
ing across the sector is now 


toric standards in spite of the 
early stage of recovery. Yet as 
the market peaked in the late 
1980s, average gearing rose to 
more than 100 per cent 

In practice, gearing makes 
the performance of the shores 
more volatile than the underly- 
ing property market. 

This volatility Is a disadvan- 
tage. Most institutional inves- 
tors are interested in the risk- 
adjusted return from their 
assets. Volatile assets have to 
work harder to justify their 
place in the portfolio. 


T 


here are two main 
arguments In defence 
of property compa- 
nies. First, just 
because property companies in 
aggregate do not outperform 
their underlying assets does 
not mean that individual com- 
panies cannot deliver spectacu- 
lar returns. 

One of the best performing 
property companies over the 
past 20 years has been Helical 
Bar, the developer run by Mr 
Michael Slade. The shares have 
provided an annualised total 
return of 66 per cent over that 
period, outperforming both the 
property market and the wider 
equity market by a streak. 

(Incidentally, the company 
also has one of the highest 
ratios of expenses to rental 
income.) 


Second, and more important, 
quoted property companies 
provide Investors with liquid- 
ity. This allows fund managers 
to Increase and decrease their 
exposure to the market at 
speed and low cost 

In contrast, buildings are an 
illiquid asset which are expen- 
sive to trade and only available 
in large packages. Smaller 
investment institutions and 
private investors, without the 
expertise to buy and manage a 
portfolio, rely on property com- 
panies to do it for them. 

If used effectively, the liquid- 
ity of property shares should 
help fund managers achieve a 
better performance than from 
a passive portfolio of proper- 
ties. A fund which cleared out 
of the sector in 1989 and 
bought again in 1992 will have 
seen impressive gains. 

Yet fewer, bigger property 
companies would provide bet- 
ter liquidity at lower adminis- 
trative cost than the frag- 
mented quoted sector now In 
evidence. Against this back- 
ground, it is surprising that so 
many property companies have 
managed to nourish. 

If the underlying property 
market is in for a dull period, 
as many forecasters predict, 
companies which are low on 
management expertise and 
high on expenses will struggle 
to justify their existence. 
Without a buoyant property 
market to fall back on, the 
lacklustre performance of their 
shares will be all the more 
obvious. 


IPD monthly index for October 

Total return (quarterly movecnentj % 



Oct Cnange over f- 


Afl Property 
Ratals 
■i ■ Offices 
Industrials 


1994 

test month 

221.83 

051 

21&57 

120 

16895 

038 

31031 

1.22 


Oct 1992 


&B8. 




F or the first time since 
December 1990, rental 
values for all properties 
have shown a positive move- 
ment, achieving a growth of 
0.1 per cent in October, 
according to Investment prop- 
erty Databank, a research 
group. 

The improvement has been 
led by a rental growth of 0.2 
per cent in the retail sector. 
For the second consecutive 
month capital values have 
shown a downward move- 
ment; by -0.2 per cent 
This capital-value decline 
has fed into the all-property 
fzrtal return which, although 
still positive, continues to 
slow, recording 0.4 per cent 
for October. 

The all-property equivalent 
yield has stabilised at 8.1 per 
cent, although the undeityfng 


yield shift continues to move 
outward, standing at 0.02 for 
October. 

The rates of both capital 
growth and total return have 
continued to slow. 

Year-on-year total return 
has declined by 1.6 per- 
centage points, achieving 22.0 
per cent for the year to Octo- 
ber. 

Capital growth has slowed 
across all sectors with an all- 
property capital growth of 
12.6 per cent for the year to 
October, compared with 13.9 
per cent for the 12 months to 
September. 

Retail continues to be the 
best-performing sector with a 
return of 0.6 per cent, while 
industrials and offices lag 
behind returning 0.4 per 
cent and 02 per cent respec- 
tively. 



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duction organizations. Hr at 
F I N M E C 


WITHOUT MOVING AN INCH 
WE SEE THE SUN RISE 
70 TIMES A DAT. 




1 119! TIT PITH Tllllf IKTIT10I 

C A N I C A I R 


Arualdn are irarld leaders in 
deetrvnuchnnics. We know haw 
to combine advanced design and 
constructional ability , flexibly. 
7 hat V how we are able to supply 
specific solutions for industry, 
power anti transportation. Fields 
united by a common strat- 
egic vision, basal on advancetl 
technology, research, and the 
quality of uur human resources. 
Stop. now. and think: at this 
instunt, somewhere in the mrrlcL 
the sun is rising on Ansuldo. 
G R O U P 


COMMERCIAL PROPERTY 


0 

STOCKERHOF 

Central Location-Timeless Elegance 





In the centre of Zurich, a short walk from the Lake and 
from the Congress Hall, and in the immediate vicinity of 
the Bahnhofstrasse and the Paradeplatz, the ultimate 
residential and office complex, the STOCKERHOF, is now 
taking shape. It comprises: 

8600 m 2 Office/Sales Area 

2000 m 2 Warehouse/Archive Area 

128 Parking Spaces 

Magnificent architecture and superb materials typify the 
image of the STOCKERHOF. which, when it is comple- 
ted in Spring 1996, will be one of the most pres- 
tigious addresses in Zurich. 

■For further information, detailed brochures and a video 
are now available. 



Annual rental income DM 1, 124,260.- 
6-story commercial addition possible 
Prime central location • Subway (5 lines) 

For details please contact owner: Fax -++49-30-2 163085 



. & 


Where 

will vour 

J 

cats get 
a life? 

In their own 6,000 sq ft 
j|| self contained office 
" • building on one of 

. Mot fair's premier 
ffd- Squares. 


Wi ilv to li.i* n;4:. - o rm.iLii.ijl limn. 
Oil. SmjiIiv. ji l. Uriiliic. SKI Ulil. 


^VENICE 


jL 


Mrs. U. Meyer. Tel. ++41 - 1 -3669837, will 
be pleased to answer your questions on 
this unique subject. 


Albis Bau und Vferwaltungs AG. Hofwiesenstrasse 135. 8057 Zurich 


SOHO, Wl 

FREEHOLD 
for SALE 

G.LA- 21,000 sq-ft- 

DEVEIDPMENT 

POTENTIAL 

SOLE AGENTS 

Y/7\& A71-499 0866 


TAX SHELTER PROPERTY 
INVESTMENTS 

Comm ercia l properties in 

ENTERPRISE ZONES 

throughout the UnBed Kingdom now available 
PraJet and Renta) Guarantees offered 
100% Capital Allowances 


St Qu i nt in 

071-499 8(526 


Contact Michael Tracey 


C*A 9 R 9 D m I 9 F 9 F 

WOODSTOCK 

BUSINESS PARK 

J 3 2. M -1 CORVTON 

Up to 250,000 sq.ft of City Centre 
Style Offices at the Junction of 
Wales’ Two Premier Business Routes 

Prestigious High Specification Offices 

Direct access onto M4 Junction 

Generous Car Parking 

A development by Contact l>.»vid Mullins 


'LAND- 



FOR SALE 

Land within Holyhead Marina 
development with outline planning 
consent for 27 residential units and 
associated marina facilities. 
Contact Michael Bakcwril on 
TO: (0407) 764242 
Fax: (0407) 769152 


FROM AS 
UTILE AS 
£120 + VAT 

(£40 per singe column centime cm; 

You could reach 
119,000* 

key property cfecfekm roaket* 
WOnUMMDE. 

Available only from 
THE FINANCIAL TIMES 

The Co mmercial Property 
Section runs evecy Friday. 

For further dataBs, contact 

SopMoCaAn 
on OTL 8733223. 

reametra 


ITALY 


V 


IMPORTANT INDUSTRIAL COM- 
PANY 

Sells 

Prestigious Property in the 
Centre of Murano 
22,000 SQ.M. 




For information please call 
+39 873 348323 


PUBLIC NOTICES 


HANG SENG INDEX 
ANNOUNCEMENT 

"Hare Sena tadet* b a name used as a wide marl and service mark ol Haag Swig OiU Soviets United 
("USDS') in respect of an Index of selected Hong Kong Mods pubfehrd. umnrut e d and compiled by 
H9 Sendee* United [*HSrj infer Icence from USDS as owner of d proprietary rights (induing 
copyryjfa) tithe safcftnddi The mart -Hang Sene fadex* a registered or subject to ^pficaluni (or 
reghtation as a tide marie (n various ocertrics wr ipecficufcw of good) and service induing 

accoutring services, busmen appraisals, provision odnfamaflon idaUng tn Bode exchange, Snaneul 

service*, (efecommuikation services and die pubishlng of primed mailer retiring to Be Hong Kong 
SexfcMtta. 

K5DS has a arid poky legarring tfve puWcjeon and me ol die uid Mn whidi B Intended ior 
nttmatoi only and no rriance is to he placed on ft far any «her purpose. Firiunmit die process 
and bash ottonipuBtaiad cn iiTlaton of d* aid tide* aid any ollhe related fawtda or lormiiae. 
coBduoiMtodo and haws my ai any fime be charged or aimed by H5DS or HS widest notice. 

A! the At hm( neither ffiOS nor HSi hate Boemed, endorsed or oteshi i 


J tong tnder v by reference tt be said index and Tin* Sent Wen* Mme. hto 

r yy oreiJry or EathQty b accepted by HS, HSDS or any associated conguny in fegwa of d« use 
or reference!) the said hdes or "Hang Seng Met" name la owmedtmvridiwdidefiadM products 

or for any kucondes. renMom, msaakes or errors in die computation of the said index or fa, aw 

economic or other loss which may be dredV or ndrecdy sustained by any broker, tatter of or ate 

person deling with such gradual. 

NO CLAIMS, ACTIONS OR LEGAL PROCEEDINGS pa CONNECTION WITH SUCH DBSVATM 

PRODUCTS BROUCHT BY ANY BROKER, HOUXR OR OTHER PRSON DEAUNC WTIH SUCH 

PRODUCTS WRI BT ENIISTAWED BY HSOSt HSI OR ANY ASSOCIATED COMPANY. 

NORTON ROSE, 

Bbcfchiari Horne. PO Box 57U. 19 New Bridge Steel London EC4V 6DH England 
Lueytrt far Kir* Seng QiO Services Umicd and HU Spmck Imi&xl 

Dated 15 Nmembct 1994 


.ic ■. : 


















FXNANCIALTIMES FRIDAY NOVEMBER 2? 


RECRUITMENT 


Jobs: Longer 

B y US standards the £205,000 

rise in basic annua? salar y 

awarded to Cedric Brown, 
the chief executive of British Gas, is 
nothing to write home about. In the 
UK however, a 75 per cent rise for 
the head of a former public utility 
could hardly go unnoticed on the 
weekend of the first national lottery 
draw when a large proportion of the 
country’s adult population was 
dreaming of sudden riches. 

Postal chiefs, in particular, must 
have been weeping over what might 
have been theirs but for a few recal- 
citrant Conservative MPs bent on 
keeping the Royal Mail in public 
hands. 

Michael Heseltme, the industry 
secretary, appeared to defend the 
rise when he said that the former 
state-run utility had been trans- 
formed into a “world class com- 
pany, winning in the market places 
of the world.” By 1998, after Its reor- 
ganisation is complete, the com- 
pany will have shed some 40,000 
jobs out of its UK gas business. 

The British Gas remuneration 
committee concluded that its direc- 
tors were underpaid compared with 
other UK-based international com- 
panies of a similar size. While reten- < 
tion would not be expected to Ik an 
issue with Brown, who at 59 has a 
39-year career in the industry ; 
behind Him, the company pointed 


term performance-related share bonus schemes are a stiffer test of management . bil. : • 

Cutting the head count and cashing in 3§gSJ| 


out that were he to fall under a bus 
tomorrow it would need to have a 
competitive salary and bonus pack- 
age in place to attract potential suc- 
cessors. 

Gordon Brown, Labour’s Industry 
spokesman, has responded by assur- 
ing us that he will remove the tax 
benefits for executive share options 
which have bumped up directors' 
pay for so tong. It seems that the 
Conservative Party is working on 

rfmilar lines. 

As pointed out here previously, 
however, removing the income tax 
exemption is unlikely to make 
much difference to the popularity of 
such schemes for the simple reason 
that the top marginal rate of 
income tax from which the realised 
options are exempt is the same as 
that of Capital Gains Tax from 
which they are not 

The biggest toss in any change 
would be the annual £5,800 tax free 
allowance for CGT and the ability 
to delay the tax liability to the point 
at which the shares are sold. The 
differences made by such a change 
in tax treatment could not be expec- 
ted to deter companies from run- 
ning executive share option 
schemes. 


David Tuch. a tax partner at 
KPMG Peat Marwick, argues 
against removing the income tax 
exemption if options are to be used 
as a way of keeping a director’s 
financial interest in the company. 
Income tax could force their sale, in 
part, to pay the tax that would 
become due at the point the option 
was exercised, he says, thus reduc- 
ing the financial interest which 
remuneration committees are seek- 
ing to retain. 

In a new survey into executive 
share option schemes, KPMG has 
found that some £7bn of the £10.5bn 
in publicly quoted shares allocated 
to executive option schemes in the 
UK are without reference to the per- 
formance of the company. 

While the situation is changing, 
says Tuch, slightly more than half 
the companies introducing schemes 
since 1988 have provided perfor- 
mance targets for their schemes. 

Tuch is unimpressed by the vari- 
ous targets linked to earnings per 
share which he says have not 

S d very demanding in most 
He suggests that regulations 
be introduced. Imposing 
restrictions extending the period 
that executives need to hold onto 


their options after they have been, 
granted. This would reduce the 
temptation to cut and run. Such 
restrictions already exist in the US 
and France. 

At least British Gas is m aking its 
executive pay more visible and 
replacing its existing executive 
directors' share option scheme with 
a long-term incentive arrangement 
similar to that operated by Reuters. 
This will align the interests of the 
executives more closely to those of 
the shareholders. 


A suggestion by the MSF 
technical union this week 
that chief executives should 
have part of their pay related to 
their performance was timely, if 
also mischievous, particularly when 
the union added that it could be 
apportioned on the basis of an 
appraisal by subordinates. 

The point that the MSF seemed to 
be making was that if you are going 
to introduce certain types of human 
resource medicines such as perfor- 
mance-related pay you should be 
prepared to take them yourself. 

For some reason big companies 
seem to treat their directors on a 
different basis than their other 


employees. General pay rises to the 
mass of the workforce seem to be 
awarded using the principle that 
asks: what is the least we need to 
pay them while keeping them moti- 
vated and in post? In contrast the 
approach to the board and other 
higher management often seems to 
be: if you cut costs and maximise 
profits you will reap handsome 
returns for yourself. 

This has led to what CK Pra- 
halad and Gary Hamel described in 
their book, Competing for the 
Future, as an obsession among US 
and British management with 
improving their ret u rn on invest- 
ment by reducing each or all of four 
elements: investment, net assets, 
capital employed and head count 
As Prahalad and Hamel observe, US 
and British managers can downsize, 
declutter, de-layer and divest better 
than any others. 

The result in Britain during the 
mid 1980s, they point out. was man- 
ufacturing productivity increasing 
faster than that of any other large 
Industrialised country except 
Japan. While they cut their work- 
forces, however, British companies 
did little to create new markets 
either at home or abroad, according 


to Prahalad and ffpmal- In effect, 
they say, British companies surren- 
dered global market share. ■ 

“One almost expected to pick, up 
the Financial Times- and find that 
Britain had finally matched Japan's 
manufacturing productivity - and 
that the last remaining person at 
work in B ritish manufacturing was 
the most productive son of a gun on 
the planet," they wrote. 

So who has reaped the financial 
benefit for this profitability at the 


are the most expendaMe.-assefc." 

Restructuring seldom -results in 
fundamental business Improve- 
ments, they write. At beat it'tags 
time. What ft may have also bought 
is tiwfl for smaller competitors ben- 
efitting from growth fed partly by 
the expertise of those employees 
cleared out in the recession^ 

In the meantime consultants "con- 
tinue to wrestle with' the' most 
appropriate ways erf rewarding aid 
retaining higher management. If 
the British Gas pay package bad 
been structured to encourage its top 
managers to come into the .com- 
pany, restructure, then take the 


who m nrfp it ha pp en? Is that what Brown s pay nse might have lad 


executive share options have dose - 
awarded big bonuses to people who 
have learned how to get more out of 
fewer people? 

These are the people who have 
employed equations similar to that 
quoted, somewhat cynically, by 
Charles Handy, the business writer 
- % x2 x 3: half as many people in 
the core of the business, paid twice 
as much, producing three times as 
much. 

Prahalad and Hamel, however, 
warn against too vicious down- 
sizing. They write: “What employ- 
ees hear from such companies is 
"people are our most important 
assets’. What they see is that people 


Brown’s pay rise might have had 
more validity. ■ : 

Unlike many other companies . 
as the KPMG report revealed - Brit- 
ish Gas has tried, to -link pay and 
performance in a meaningful and 
transparent way. 

Hi so doing it appears to have 
overcome the iniquities of simple 
holt-on share options where perfor- 
mance is related more to the level 
of tiie market The real performance 
test now will , be whether manage- 
ments of slimmer, restructured 
companies can produce the growth 
to match productivity gains. 

Richard Donkin 


MANAGER 

SALES AND MARKETING - NIGERIA 


A leading tobacco manufacturer is seeking 
an experienced professional to join its 
dynamic, expanding business activities in its 
Nigerian operations. 

Reporting to the Managing Director, this 
high-profile line position involves managing 
combined Marketing, Sales and Distribution 
functions of the company with a view to 
developing overall performance and increas- 
ing the market share of its local and world- 
famous trademarks. 

Responsibilities Include reorganising, train- 
ing and motivating sales and marketing 
management teams with accountability for 
the creation and execution of marketing 
plans, selection and control of agencies and 
the strategic planning of sales and distribu- 
tion patterns. Additionally, this position 
manages overhead and marketing expenses, 
sales pricing, trade terms, credit limits and 
the establishment and achievement of sales 
objectives. 


The successful candidate will have: 

• solid track record in sales and marketing 
for over ten years, preferably in an inter- 
national FMCG environment 

• exposure to developing countries 

• experience in management of a sales team 

• proven leadership skills and the ability to 
build organisations 

• Fluency In English (knowledge of other 
languages an added advantage). 

Preferred age range 35 to 45. 

The company offers excellent career oppor- 
tunities. a highly attractive package and first 
class employment conditions. 

For full details write or fax with full curricu- 
lum vitae to: 

L Rauschenbach. Consultant in Executive 
Search 

13 Chemin des Chamuses 
CH-1234 Vessy-Geneva 
Switzerland 

Tel: 41 22 784 32 82 or 784 35 61 
Fax: 41 22 784 33 87 


APPOINTMENTS 

ADVERTISING 

appears in the UK 
edition every 
Wednesday & 
Thursday and in 
the International 
edition every 
Friday. 

For information 
on advertising in 
this section please 
call 

Philip Wrigley 
on 

+44 71 873 3351 

Andrew 

Skarzynski 

on 

+44 71 873 4054 




V. w- : 



STOR RELATIONS 





feast Mad jour ul 
aodacomiug letter 
b Annette McArthur, 
QSbaAILA, 
Huron lesounti, 
POBac7B, 
336 Sinn!, 
London WC2K1HB. 


Competitive salary + car 4- benefits 

Citibank Global Asset Management is the investment arm of Citibank, one 
of the world's leading, financial institutions. An important area of our 
business expansion is the development of investment products and -services 
marketed through our consumer banking business and distributed 
throughout 22 countries in Europe and Asia. 

Effective communication and investor relations are key to our retail business 
strategy. We have therefore created this new role, the focus of which is to 
develop a world-class programme of practical, user-friendly market reports 
and economic analysis for brandies and management around the world. 
Combining scheduled publications and ad-hoc projects, original writing and 
editorial work, you will produce, affective communications con sis tent with 
the strategic objectives of the business. 

You will need on in-depth knowledge of economics, a broad understanding 
of the financial markets and around five years' experience gained in fund 
management, marketing or possibly financial journalism. A strong team 
player and almost certainly a graduate,- you will have a first-doss analytical 
mind and the communication skills to deliver lucid and succinct reports. 
Professional credibility and excellent presentation skills ore essential. 

We offer an attractive remuneration package and career prospects are 
excellent. 


Citibank 

Global 

Asset 

Management 


CITIBANK 

We b* mm «|Nl ■pp nlwllh r le pl r yi 




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Michael Page’s 1994 half-year profits rose 177%. The result of our success in 
Finance, City, Sales & Marketing, Legal, Technology and Public Sector recruitment. 


What other reason do you need to join us as a Recruitment Consultant? We can offer plenty of scope for progression, opportunities at ail levels and packages to 
attract the best. But you’ll need to be of graduate calibre with a record of success in one of the above areas. Find out more, call Jonathan Williams on 071 242 8555. 

Michael Paoe Group flc, Page House, 39-41 Parker Street, London wc2b 5lh 


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FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 


TOP OPPORTUNITIES 


SENIOR POSITIONS IN GENERAL MANAGEMENT 


General Manager 

Moscow 


Our client is n well known multinational 
electronics company, manufacturing and 
marketing leading brands of professional 
communication products. Represented 
worldwide, the company has had a presence 
in the Russian market over the past two years. 

The General Manager will be responsible for 
developing a rapidly expanding sales and 
service network within the CIS and a 
headquarters for support functions located in 
Moscow. He/she will manage the entire CIS 
operations and will be the 
acting head of the Moscow . = - ■ 


branch. 


The successful applicant will have a 
technical educational background, several 
years of sales and marketing management 
experience, including responsibility for 
business units, and in-depth knowledge 
of the Russian market. Candidates should 
speak fluent English and good Russian. 
The position offers a unique opportunity 
for personal development within a 
multinational organisation. 

If you are interested in this 
iX. exciting, international 


GKR NEUMANN II opportunity, please apply to: 


H. NEUMANN INTERNATIONAL 
Management consultants 
POSLYEDNY UNDE 26. IOJ045 MOSCOW 


The Top 
Opportunities 
Section 

Advertise your 
senior manage- 
ment positions 
to Europe's busi- 
ness readership. 
For information 
please contact: 
Philip Wrigley 
+44 71873 3351 
Joanne Gerrard 
+44 71 873 4153 
Andrew Skarzynski 
+44 71873 4054 


BANKING FINANCE & GENERAL APPOINTMENTS 


CORPORATE FINANCE 

The continuing success and expansion of N M Rothschild’s corporate 
finance activities have created career opportunities at Manager, Assistant 
Manager and Executive level for high-calibre individuals with development 
potential and experience. 

The work will focus on mergers and acquisitions, new issues, buy/sell 
mandates, privatisations and financial advisory work for corporate clients. 
Training and development is first-class, and career progression can be rapid 
for high performers. 

All candidates will need to demonstrate a consistently excellent academic 
record including a good honours degree and first-time passes if professionally 
qualified. Applicants for Manager and Assistant Manager posts will have had 
relevant mainstream corporate ^ nani ' 1 * experience. 

Communications skills and a strong commercial orientation are essential, 
together with a proven ability to work as part of a team. 

Salary packages and personal development prospects are excellent. 

In the first Instance, please send a personal r6sum£ detailing your 
education and experience, in the strictest confidence, to Rodney Lonsdale, 
Personnel Director, N M Rothschild & Sons Limited, New Court, St 
Swi thin’s Lane, London EC4P 4DU. 



N M ROTHSCHILD & SONS LIMITED 



Qatar General 
Petroleum Corporation 

n . T .„ c EMEKA1L. PETROLEUM CORPORATION (QGPCl fa the national otf company oTQaiar wftft il- head office 
in the capital city ofDoha. QGPC is a large progressive organization with a successful Mstor? In the hydrocarbon 
^JTJaewillnB programme of developments tadudurg Ibc moM's largest proem gas resent 'The North 
JSjj^Thcse development plans now call for a number of high caShrc profcedonals Co IfD the fbffixrinft key pnsMlons.- 


MANAGER CORPORATE FINANCE 


ThHuccessful applicant will report io the Director Finance and will manage ihc activities of IS MaiT 

■ "rtonnuicr modelling of the long-term capital requirements of the Corporation's mu Hi -billion dollar 

I and die projects, joint ventures und investments: identifying sources of finance including revenue. 
h! k loans and export credits: structuring and negotiation of packages with financial institutions: 
Effacing with financial advisers: monitoring and controlling drawdowns: and checking, approving 

repayments, and 

■ Consolidation and analysts of group accounts. 

Qualifications university degree < ordinary masters or doctorate) in economies, accounting or a 

accounting ..am* .chance or cemfiedi is durable. 

Experience ^ in ma nagemenL major project financing, the oil and gas industry, and energy 
A strong baettgro __ ^.^ssful candidate will have worked for an oil and gas mujor and/or a major 
accounting an j cas project financing at a senior level for 10-15 years. Ret FINOI. 

bank involved m large on * 

THE COUNTRY 

H peninsula projecting into the Arabinn Gulf, with a warm coastal climate. Whether you 
Geographically- Q»«“ . ^ ^ joining in a range of sports offered id our clubs or just savouring the 

arc playing golL wny n f nrc. you will find that Qatar is the undiscovered pearl of the Middle 

warm welcome and t * J s1Jlc usonv of the must accommodating to the western culture where 


imvuunim 

is a peninsula projecting into the Arabian Gulf, with a warm coastal climate. Whether you 
Geographically. Q®**“ . ityr beaches, joining in a range of sports offered id our clubs or just savouring the 
arc playing g oll > t-fayable wa y n r life, you will find that Qatar is the undiscovered pearl of the Middle 

warm welcome and f ' independent suite us ore of the must accommodating to the western culture where 

East. This forward pFOg " ounr ri i 10 panicipute fully in the community. This lugcthcr with die very obvious 
wives and families are f .u,. attractive packages currently available in the Middle East, 

financial rewards, add up M» one o 

EMPLOYMENT package 

.. es> arc substantial. All posts otter tax free suluries on long term contracts, free 
The rewards, like the *raa ^^ 1 ^. five medical and dental care, ch'ifdren's education assistance, gener- 
spacious air-conditioned ^ i ran spon ullowunce and heavily subsidised spurting and social facilities. 

‘ luavet'vithpnid a , .. , „ . ,, 


spacious air-eonditiorted transport allowance and heavily subsidised spurting and social facilities, 

ous annual Icaw 1 appropriate qualifications and experience to be considered should send ibelr 

Candidate* who must thJT lowing how Ibey meet the spedfie requlranenls or the position applied 
resumes with a covering riali . Reference Number, details of current salary, date of birth, availability and 
for. They shouW ^‘^^Tpliearions should be sent U> our Representative at the following address: 
contact telcphonc/hi*” 

Dennto DavkUon. QGPC Adverdcmment. 

L H MI leTfl lU JU I fioustabout PubBeattona Umttaci, Suite 5. International Bose. 

^ ICATIONS LTD. Green w*rr Road, Aberdeen AB1 4AX. United KMpdom. 


EXETER INVESTMENT GROUP 


INVESTMENT MANAGEMENT 
EXETER 

Exeter Asset Management Limited, a member of Exeter 
Investment Group, acts as investment manager for four 
quoted investment trusts and for the seven authorised unit 
trusts marketed by our sister company, Exeter Fund 
Managers Limited. Funds under management currently 
exceed £300 million. 

Following a period of rapid expansion we are seeking an 
experienced individual to join the existing four person 
investment team. 

A competitive salary will be offered together with a range of 
other benefits. 

F tease apply <*> wiling with a full CV tc CJ WhiUingstaw, Extier 
Asset Management Limited. 23 Cathedral Yard, Exeter EX I IHB. 

Exeter Asset Management is an equal opportunities employer. 
Excier Asset Management is a member of IMRO. 


knmmia-ij- 
SftftJfe : O > ¥ > 

HModtn 1 . if»ii + w 

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ECl‘4:t 

WV.4 Ill'll t GilicViSIl fit'. 

H..X A 5003 
I'inancial TittiL-> 


UNIVERSITY 


OF DUBLIN 


lam. 

ilia S. IntamaUonal Base. 
. United Kingdom. 


TRINITY COLLEGE 


Director of IS 
Service 

Applications are Invited for the 
past of Director of IS Sente The 
appointee will carry overall 
responsibility for the strategic 
direction and management of the 
College’s information systems 
service, which has recently been 
the subject of major review arising 
from which an integrated overall 
system is being developed. 

There are currently about 40 staff 
in the information systems centre; 
the annual budges is over IR£2m. 
The appointee wffl be expected to 
take the lead in the 
implementation of a number of 
strategic information systems 
initiatives to sente academic and 
administrate users. 

Candidates should be graduates or 
hold equivalent professional ' 
qualifications and should have 
substantial management 
experience in the planning, 
organisation and delivery of 
computing and related services m 
a complex user-centred 
environment. The leadership 
qualities and communicadon 
skflb necessary to manage change 
will be vital attributes. 

A seven year contract will be 
offered to the successful 
candidate- Salary will be within 
the range lR£37,57+injM7437 
per annum. 

Further particulars available from.- 
Michael Gleesoo 
Sec re t ar y to the College 
West Theatre 
Trinity College 
Dublin 2. 

Teh +353-1-702 1159 
Fax: + 353-1-671 0037 
E-malL- secretary^ todJe 
Closing date: Monday 19th 
December 1994. 

Trinity CoEege is an equal 
opparfunfttes mptoyer. 


APPOINTMENTS 


ARE YOU A DYNAMIC 
EXPORTING COMPANY? 

I am 25. Grad, member insL 
of export conversant with the 
lechn. of export multilingual: 
French/Span ish/German. 

I am ready 10 meet the 
challenge & work for you. 

Apply Mr. L. Voiiy, Riverside 
House, Learide Road, 
London ES9LU 


FX OR DERIVATIVES 
29 years old MSc. 
(Economics) is searching for a 
new challenge. 3 years experi- 
ence in Fuad Management and 
propriety trading m FX. 
Multi-lingnal: Scandinavian 
languages & German. 

Fax: 081-675 3009 




The FT can help you 
reach additional business 
readers in France. Our 
link with the French busi- 
ness newspaper, Les 
Echos, gives you a unique 
recruitment advertising 
opportunity to capitalise 
on the FTs European 
readership and to further 
target the French business 
world. For information on 
rates and further details 
please telephone: 

Philip Wrigley on 

+44 71 873 3351 


LOTHIAN 




-;r 


GENERAL MANAGER 


A manager of wide experience and outstanding calibre is required to direct one 
of the leading health authorities in the country 

Lothian Health has a revenue allocation of in excess of 1400m and carries 
responsibility also for general practitioner services and other community 
services with a spend of some £1 00m each year. 

Based in the City of Edinburgh, a city renowned for its high quality of life, 
Lothian Health plans and commissions healthcare services for a resident 
population of some 750,000, led presently by some 500 general practitioners in 
the community and six NHS Trusts ; a number of supra-an?a and national services 
are also provided in the area. 

It works in dose collaboration with one of the leading medical schools in the 
country at the University of Edinburgh, and has long established dose 
relationships with local authorities and numerous voluntary organisations. 

The Secretary of State for Scotland has approved a major restructuring and 
rebuilding of acute hospital area services including the establishment of a new 
campus on the fringe or the city for the world renowned Royal Infirmary of 
Edinburgh. Much leading edge medical research is carried out in Edinburgh arid 
a great deal of innovative development is occurring throughout the service in 
Lothian. 

The post of General Manager is an exciting and challenging one leading an able 
and committed executive team to deliver a very extensive programme of major 
strategic change across the whole range of services, while ensuring the 
maintenance of the high quality healthcare services for which the area is well 
known. 

The remuneration package for this post, which carries executive membership of 
Lothian Health Board, will be commensurate with its scale and importance to 
Lothian Health. 

An information pack is available from the Chairman of Lothian Health, Or John 
BaynHam, CBE, who will be happy to discuss the post with prospective 
candidates. 

Prospective candidates should contact: Dr J W Baynham, CBE, 
Chairman, Lothian Health, Deaconess House, 148 Pfeasance, 
Edinburgh EH8 9RS, TeL 031-536 9002. Fax. 03 1-536 901 1. 

Closing date for receipt of applications: 7 December 1994. 


cN -.j' 


BRITISH VIRGIN ISLANDS 
Increasing the scope and focus of Offshore 
Insurance Services 

Insurance Services 
Adviser 

The British Virgin Islands (BVI) has emerged os a major player in the provision of 
ftnancoJ services to die global market Ibc combination of recently enacted legislation 
and genuine govern ment-industry partnership and collaboration has fuelled the process. 
To ensure that ofishorr financial services continue to make a substantial, long-term 
contribution to the BVJ economy, the Government is committed to diversifying the 
services available in the sector, which currently accounts for c.40% nf direct government 
revenues. 

A comprehensive new’ act, due to become bw in early- 1995, will pordcuiarly enhance the 
attractiveness of BVI to insurance companies, including those involved in Captives, Life 
and Reinsurance. As a result, die Government is now looking tor a seasoned insurance 
specialist ro work doseiy with and report to the Director of Financial Services. As 
Supervisor of Insurance, you will establish and implement new procedures for the vetting, 
monitoring, regulation and supervision of all activities in the insurance sector. The 
strengthening of links regionally and internationally with regulatory authorities and law 
enforcement agencies wDI be a key feature of the role, os will the provision of advice and 
input on a range of issues from the promotion of offshore services to staff training and 
development. 

QUALIFICATIONS 

The role demands at least ten years' experience in the insurance industry, with regulatory 
experience of insurance sea or compliance work. A formal insurance qualification would 
add weight to your application. Overseas experience either in North America or Western 
Europe would be preferred- Applicants should richer be nationals of a Member Scare of 
the European Community, nationals of a European Economic Area Member State (i.e. 
Austria, Finland, Iceland, Norway or Sweden) or Commonwealth citizens who have an 
established righr of abode and right to work in the United Kingdom. 

TERMS OF APPOINTMENT 

You will be on contract tn the British Government for J year, in service to the 
Government of the British Virgin Islands. Salary will be cjG 35,000 p-a- - £40,000 pj. 
(UK taxable). Additional benefits will normally include variable tax-free overseas 
allowances, children's education allowances, free accommodation and passages. 

Closing date for receipt of completed applications is 14 December 1994. 

For farther details and application form, please write to Appointments Officer, 

Ref No AH304/MMcC/FT, Abercrombie House, K a gfrsham Road, Blast Kilbride, 
Glasgow G75 SEA, or telephone 0355 843434. 

ODA is committed to a policy of equal opportunities and applications for tins post ore sought 
from both men and women. 


CCA 


OVERSEAS DEVELOPMENT ADMINISTRATION 

BRITAIN HELPING NATIONS TO HELP THEMSELVES 





banking recruitment consultants 


Operations Consultancy Ropulatory Control 

To CM.OOO To E4ILOOO 

Oar cheat B a leading Mqpher of Wly integrated sjWcma fur lading Cay taamuten »ctto 10 ireniB «□ trpalcfflctd ladMttaal 
Hanitit providing complete aalniloni for ikeix trade «Bh m enznshc buwiedp of both rief* money and tele custody 
suppon/pmeeasag, itsk management and tamce requirements. wiuiMwhtpu. Puma far ttua demanding and hfci pmffle ndr »a 
One to the sunaeM qt ihetr pceduds they require Ugb ceUtn Include renewing and deedoptag poUOe* Be aev aad eatattw 
operation* managers tnlerested in nUliaing their elulla la SccuntXa and Dcrttainea martatt. traamg ami mqa et m m at 
consul taut?. canOgmatJon. mUttg and product developme nt , existing rales and maikethig of procedures. B™-»w pmaneds 
Strong busuese and snatydeul skiDa gslncd hum a treasury ealai far the Hictesafid candidate. Ifukamn ui amdd hfctih be 
■ctUemeaia or Used meaneapendtem anaafq higp bank are 2&-3S yeamr. 

Joslin Rowe Associates Ltd Bell Court House 1 1 Bio infield Street London EC2M 7AY 

Telephone 071 638 5286 Facsimile 071 382 9417 
A Member of the Bhrmfietd Group 








Property Finance 

Excellent opportunities for talented property financiers to join expanding London based team of British bank.- Active in the 
property market throughout the recession with positive deal flow and extensive portfolio. Clear strategy for growth, wefl. resourced. 


Marketing Manager 

Performance Related Package 

THE POSITION 

+ New business development for the investment property portfolio. 

+> Responsible for h alting every aspect of transactions: marketing* negotiation 
and execution. 

+ Build relationships with property companies at senior levels. 

QUALIFICATIONS 

+ Highly motivated, entrepreneurial and ambitious property finance marketer. 

+ Minimum three years’ relevant experience with tup property team. 

+ Fust class communicator, pc literate with initiative, creativity and flair. 


Ref: CN4603 


Account Manager 

To £40,000 + Benefits 

THE POSITION 

♦ Manage client relationships. Liaise with clients, lawyers, valuers and other 
professionals. 

♦ Undertake credit reviews and negotiate legal documentation with dieni accounts. 

♦ Provide high quality client service. 

QUALIFICATIONS 

♦ Proven account manager from established property investment team. 

♦ Strong credit and pc skills. Prior exposure to all aspects of transaction 
management important. 

♦ Genuine customer commitment and exceptional professional standards. 

Ref: CN4604 


Administrator 


To £25,000 + Benefits 

THE POSITION' 

♦ General administration role supporting property finance team. 

♦ Broad remit including insurance, monitoring loans, legal support, providing 

management information and day to day correspondence. . ■ . > 

♦ Opportunities exist for career development into account management. 

QUALIFICATIONS „ : - 

. , L , n <wvd pirhrr nmncrtv finance or other asset nance team. 

♦ Relevant experience gamed worn enner pn*«>y v» . . . 

♦ Strong interpersonal and coramumcarion skuls- . _ j \ . • , . t 

♦ Hands-on style, team player. Computer Ktcrate, femilianiy wait sprca<3shetfs 

essential. _• • 

Re£ CN460S : 


Please send full cv, stating current salary and appropriate reference number, to NB$, 10 Arthur Street, London EC4R 9AY 



N B SELECTION LTD 
4 BNB Resources pic company 




■’ cmr 071 623 1520 

Aberdeen 022 * 6J8080 * Birmingham 02 1 233 4656 
Bristol 0272 291142* EJinburshOJl 2202400. 

Glasgow (HI 204 4334 •Leeds 0532 453100 
Manchester 0625 539953 • Slough 0753 81 9227 


Senior Executive 


CIS Specialist 


Highly Attractive Salary Package 


City of London 


Rare opportunity to join established specialist investment banking 
team at senior level, focusing on the CIS. Involvement in the most 
significant and fascinatin g advisory and financin g work in the region. 


THE COMPANY 

♦ Prestigious and profitable UK based investment 
banking group. Outstanding reputation. 

♦ Strong track record in Russia and CIS. A leading 
regional financial advisor. 

♦ CIS focused team in London liaises closely with 
colleagues in Eastern Europe office network. 

THE POSITION 

♦ [.cad transaction teams on work across the banking 
product and service range. 

♦ Provide advisory and execution services to clients on 
corporate finance and M&A, project finance, 
privatisation and capital markets products. 


4b- Travel frequently to region. Act as flexible, expert 
resource within skilled, dedicated team. 

QUALIFICATIONS 

♦ First hand experience of doing business in the CIS 
over several years. Network of existing relationships 
and intimate knowledge of the region essential. 

♦ Experience gained in bank or corporate. Preferably 
familiar with one or more of the following sectors: 
telecommunications, oil & gas and defence 
conversion. 

♦ Fluent Russian helpful. Energy, resilience and 
passionate interest in the region. 


Please send fMJ cv, stating salary, ref CN47I2, to NBS, 10 Arthur Street, London EC4R 9AY 


N 8 SELECTION LTD 
>1 BNB Resource pic company 



CITY 071 423 1520 
Aberdeen 0224 638060* Birmingham MI 2334656 
Bristol 0272 291142 • Edinburgh 031 2202400 
Giogow 041 204 4334 * Leeds 0532 453830 
Manchester 0625 539953 * Slough 0753 8 1 9227 


The DJT Group Limited 

London Based 

Actuarial and pensions 
Related Experts Required 

The DjT Group Limited, the well established Pensions and HOPI I M I? NTATIOM 

Rmnrhl Plsnnlna grm nfl nnHm Mtfrinnr Rsnlr R« Rmriur. V# !▼! I^VI I XsT Ivl 


The DJT Group UmlGed. the well established Pensions and 
Financial Planning aim of London Merchant Bank Rea Brothers 
Group pic, is seeking to supplement its strong team of 
prowIndaUy based specialises by the establishment of a City 
office to cater for growth in London and the South East. 
Working in a high business ethics environment, successful 
applicants wUI enjoy an attractive remuneration package and 
excellent prospects for personal development within this 
dynamic and wdl led organisation. 

Applications are Invited from suitably qualified and 
experienced specialists, male or female, for the foflowtng 
positions. 

Actuarial 

There are openings for two senior Actuaries: 

1) Essentially, candMates should be wefl qualified to provide 
In-house expertise in all aspects of costing, design, operation 
and computerisation of Seif Administered, Final Salary, 
Director and Personal Pension Schemes. It Is antici p ated that 
this position will also carry the added responsibility of 
representing the new team at DJT Group Board level. 

2) This past will suit a qualified pro-active Actuary having 
sound experience of both Final Salary and Small Self 
Administered Pension Schemes. A high degree of dfent contact 
is envisaged in this role, both for business development and the 
provision of technical services. 


Candidates for this position must be experienced In the design 
and production of all pensions documentation to a high 
standard for both large and small schemes. "The ability to 
communicate effectively with clients and their advisers is 
essential to ensure that tailor-made strategies are the optimum 
for each situation within the prevalent legislation. The 
successful appficant wffl further be expected to make a 
significant contribution to the development of the Group's 
Independent Trustee activities, (both statutory and no n- 
statutory) 

Marketing 

Must possess extensive knowfecfga of both Company and 
Personal Pension schemes and be experienced in the 
progressive structuring of customised s tr at egie s to cater for all 
aspects of a efients affairs. Significant personal and 
communication skills wffl be required to develop and maintain 
strong financially related affiliations with efients and their 
advisers. As with the second actuarial position, a major feature 
of this role will be to foster effective long term relationships 
with the professions (including independent financial advisers) 
In the South East. 

Applications, in writing, with foil details of your experience and 
qualifications, quoting reference DJT 1 1/94 to: George 
Hopwood, The DJT Group Limited, Deakins Mill, Egerton, 
Bolton, Lancashire BL7 9RP. 


ANALYST/TRAINEE PROPRIETARY TRADER 

A small proprietary trading group recently established at a AAA bank is looking to recruit. 

Initially, the position is for an analyst to undertake a wide variety of quantitative research projects, from which they 
will derive a training in analytical techniques used in proprietary trading. It is intended that the role will develop to 
Include risk taking at a later stage. 

Candidates with all of the following interests and qualifications will he considered; 

• A 1st class or 2:1 quantitative degree. 

• Strong statistical skills. 

• Fluency In one other language 

• 1-2 years work experience within a financial institution, with exposure to a number of capital market products. 

• A strong interest in, and experience of computing, and related technologies. 

Interested individuals with the relevant sldSs should contact either Alison Phillips or 
Rupert Harding-Batt enclosing a full Curriculum Vitae to the address below: 

Michelangelo Associates, International Search and Selection, 

Austin Friars House 2-6 Austin Friars, London EC2N 2HE 
Tel: 071 972 0150 Fax: 071 972 01S1/2 


Michelan g elo 


London 


RISK MANAGEMENT 

Equity /Derivatives Market 


£ Excellent 


Our client is the equity markets subsidiary of one of the 
world's premier banking organisations. Continued 
expansion, diversification and increased trading 
activity has created an exceptional opportunity for an 
experienced Risk Manager to join its stockbroking and 
securities division. 

The successful candidate will be responsible for all 
aspects of risk monitoring which arise from the 
underwriting, trading and sales of equity and 
derivative products. The individual will report to the 
Head of Market Risk, managing a small team of 
experienced staff. Initially their main area of 
responsibility will lie in the further implementation of 
the Groups new systems and procedures to ensure that 
all aspects of risk are properly assessed, managed and 
reported. 

The candidate should be familiar with> 

• Equity and equity derivatives 

• Risk Monitoring controls and procedures 

• Trading/ Hedging strategies 

• Risk measurement parameters/techniques 

• Trading/Securities environment 


Candidates o! interest are likely to be numerate 
graduates with 2 years direct experience in a risk 
department as well as several years experience within a 
leading securities house. A knowledge of 5FA 
regulation and in particular Position Risk Requiremcnt 
would be an advantage. 

All applicants should exhibit strategic awareness, 
strong interpersonal skills and a superior degree of 
professionalism to be considered for . this high profile 
role. 

This is an outstanding opportunity, with excellent 
long term career prospects in a middle or front 
office capacity. The rewards include a compet- 
itive remuneration package, commensurate with 
experience. 

For further information, please contact our retaped 
advisors, Guy Townsend or "Brian Hamill of Walker 
Ha mill Executive Selection on 0171-839 4444. 
Alternatively; forward a brief resum£ to their London 
office at 103-105 Jernayn Street, St James's, London 
SW1Y 6EE, quoting reference GT 1569. 


WALKER HAMILL 

EXECUTIVE SELECTION 


• \<i>tr.ili:i • Iti-feinm 


MARKETING MANAGER 
CORRESPONDENT BANKING 

Spearhead international business development 
within a well-established City organisation 


This newly-created pioneering role within the UK operation of a leading European banking group oilers a unique career 
challenge to a strong-minded, marketing-orientated banker with a proactive approach to new business development who can 
grow with the jab. Salary will reflect the level of competence and experience required. 


The role The person 

• build bank’s international profile as a leading player • aged 30-40 with u least five years* marketing experience 

in correspondent banking in business-to- business banking 

• devise, develop and implement a marketing plan • good knowledge of large international banking networks, 

• seek out and develop new international niche their cu kures ***d specialities 

market opportunities € conversant with international money markets, 

• enhance existing close senior-level contacts within transactions, treasury and cash management 

European/global banking networks and major • understands electronic banking systems, 

financial organisations especially CHAPS 

• lead, motivate and develop small professional operating • self-stancr and man manager with board-level negotiation 

team to achieve goals. experience and ability to set own goals. 8 

Please write with full career details. Indicating current salary, to David Wallder. Executive Search and SeWri«„ 
Ref: G236/DW/FT. PA Consulting Group, 123 Buckingham Palace Road. London SW1 W 9SR. Selection, 


lO7i)7JO9U0O Bknbvhan (021)454 J79I 
Bridal (OZ72) XMHI 


Consulting 
Group 


• Sinj-jip.uv 


V" AmIiuk) 


Ncilu r 


** 11 836 45 11 ntmrtb (031)2234481 
G *“**»» (041)221 J934 


I .U \i‘mho!ii" 


OPPORTUNITIES 

IN 

STOCKBROKING 

Milan 

Highly Competitive Salaries 
+ Bank Benefits 


Ban'que Paribas 


f '/cell Ri'imhlit • Dvnm.irk • I m|.in>l • I i ,im . e 


Banqire Paribas Is globallyrepresented with 60 offices worldwide 
with a strong presence within Europe. In Italy, it has established 
itself as a major player in the international capital markets 
through foe recent acquisition of a leading MHan based stockbroker 
Gamba Aazom. This has given rise to two opportunities which ' 
are essential to the strategic development a^grovJ^^L 
activities in Italy. The positions can be summarised as follows^ 
FUTURES SETTLEMENTS SPECIALIST 

InpreparatSon for die launch of a new futures market on the Italian Stock 

rol « V™ «■ be responsible for carrying out futo£ 
settlements and wiH provide resuLatoiv inform.!,;™ .u/. ^ 


wSUffow to embrace other equily derivatives. This position moSSS 
on Italian equities, therefore knowledge inftis area vriUbe 

HEAD OF ACCOUNTING & REGULATORY REPORTING 

A i?^I? n S and !? ,ad role With 'fSP°"«bilHy far sfetotoryand finarSal 
accounung. feu wdl manage a small team an d will produreWlato^ 
management and financial reports far Directors in both Milana™? S 
Knowtedg of Italian law and taxation is essential ' 

suit individuals possessing erther the Economia e CommerdocM 
qualifications. Again experience of 

These ^present unique opportunities to join one of the wot Id's leadino 
services institutions. Career prospects remain excellent Fn* mancnl 

in /tafian and totfish is essential and candidates should Snonstr^f”* Bu ^ 
self assured and professional approach. strate a proactive. 

Interested applicants should contact 

our retained recruitment advisors, B~| A D D I C K i 

Jonathan Astbury or Tony Marshall on I O VJ |\ 

071 629 4463 (eveningsfweekends 1A / I | i ■ c 

071 702 9672) or fax your resume to them I L L 1 D 

on 071 491 4705. Preliminary interviews 
will be conducted in London and Milan. 





a * 1 


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»i]S 


O* 


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FINANCIAL, times FRIDAY NOVEMBER 25 1994 



VWwse, a US mulU./urionaJ corporation. b a leading toad 
Packaging manufacturer in Europe with tocadofu In UK, France, 
Gemxany. Italy. Spain and Ru»ia- 

Applications ate Invited tor a key position of BUSINESS MANAGER 
based at our Swansea plant which manufactures our multi-layer 
Snrtnk barrier films for meat, poultry and cheese products. 

Reporting lo the C-E.O. Europe you will be responsible for Uie 
profitability of this product line and will co-ordinate, develop and 
Implement business strategy for Europe. This will be achieved by 
direct Involvement with the production, distribution and financial 
organisation at Swansea and by close liaison with the ami late 
companies throughout Europe. 

The Ideal candidate will have a minimum of: 

• Four years' exposure at European level in an equivalent 
management position. 

- Be proficient In at least one other language. 

- Educated to Graduate level. 

A competitive remuneration package is available. 

If Interested, please send your CV, explaining bow you meet 
the Job requirements and quote ref. no, FT I id: 

I P Joynes. Homan Resource Manager, VbJurac UtL. Sabers 
Lane, Sedge Reid. Stockton on Tees, Cleveland 1521 3EA. 


Emerging 

Markets 

Global Investment 
Bank 


Competitive Remuneration Package 
London & New York 

Rare opportunity for outstanding 
individual to make career move into 
key trading role with one of the world’s 
leading emerging markets teams. 


THE COMPANY 

♦ Premier European investment bank with 
extensive global network. 

♦ Successful global emerging markets team. 

♦ Active In all aspects of emerging markets finance 
including new issues. Excellent distribution 
capability. 

THE POSITION 

♦ Eurobond trader within global emerging markets 
team. Make primary markets and support sales 
team. 

♦ Trading global emerging markets eurobond 
book, working with counterparts in other offices. 

♦ Top class training and exceptional career 
development opportunities in growing team. 

THE PERSON 

♦ At least two years’ relevant knowledge of 
emerging markets interest rate products, possibly 
in an analysis or research role or with previous 
relevant eurobond trading experience. 

♦ Ability to market the product through trading 
initiatives and dose liaison with dedicated sales 
team. 

♦ Outstanding quantitative, interpersonal and 
communications skills. 


Please send hill cv, stating salary, ref I CN4582, 
to NBS, 10 Arthur Street, London EC4R 9AY 

Teh 071 623 I5Z0 






f : «ir. y -y 


RECENT GRADUATES 

Applications are invited from recent graduates with good 
degrees in Economics, Finance or Accounting, from rep- 
utable universities, to assist directors in the areas of invest- 
ment management and marketing and corporate finance. 
The candidate would be required to have up-to-date knowl- 
edge 0 f the Indian Stock and Security Markets and financial 
regulations, as well as Indian language skills. 

Application, including CV. to: Margaret Elliott. 

AMAS UK Ltd. 16 Charles II Street London SW1Y4QV 


Sales-Capital Markets 

European Merchant Bank 

Opportunity for experienced, energetic salespeople to join the active dealing teams in London and Singapore. 
Both new roles are vital to the growth of this important European merchant bank's highly profitable, global 
distribution team. It specialises in selling niche capital markets products to institutional investors. 


Salesperson 


Excellent Salary & Package City 

THE POSITION 

♦ Kvy member of small distribution team. 

♦ Primary responsibility to sell non Latin American emerging markets bonds to 
institutional investors in Europe. Spot new opportunities. 

♦ Also sell structured products.- FRN&, loans, bonds, swaps, currency and equity- derivatives. 

QUALIFICATIONS 

♦ Graduate calibre. Sell-motivated, energetic, tenacious team player. Able to develop 
European investor base. 

♦ 2-3 yean experience in capital markets sales. Multi -imerumau knowledge. 

♦ Fluency in German or French desirable. 

Ref: CN4607 


Senior Salesperson 

Excellent Salary & Package Singapore 

THE POSITION 

♦ Spearhead Far Eastern sales effort. Create client base in Asia Pacific. 

♦ Specialist product range: FRNs, high yield debt, emerging markets fixed income, 
asset swaps and equity derivatives. 

QUALIFICATIONS 

♦ Highly motivated professional with excellent communication skills. Previous 
management experience preferred. 

♦ Suit Far East national with relevant sales experience in London. 

♦ Fluent English essential and Mandarin or Japanese preferred. 


Ref: CN4608 


Please send full cv, stating salary, quoting relevant reference, to NBS, 10 Arthur Street, London EC4R 9AY 


NB SELECTION LTD 


y*y?/ / brail : BN ft RoMjrcrs j4c cutupun) 


N-B-S 


CITY 071 623 1520 
Aberdeen 0224 638080 ■ Birmingham (Cl 233 4636 
Bristol 0272 Z9l 1 42 ■ Edinburgh 03 1220 2400 
Glasgow 041 204 4334 ■ Leeds 0532 453830 
Manchester 0625 539953 • Slough 0753 819227 


An opportunity 
for an ambitious 
salesperson to develop 
a successful product 
within an innovative 
environment 


Michael Page City 

Internal i imjl Recruitment Consul rants 
London Paris Frankfurt Hong Kong Sydney 


Institutional 
UK Equity Sales 


Prime US Brokerage House 

Our client, a leading US financial institution, is 
continuing to strengthen ns growing presence in the UK 
and Continental European Equity marketplace. It is at the 
forefront of the move away from traditional stockbroking 
activities towards a more dynamic and efficient brokerage 
service. As a result of the success of this approach, the 
business requires an additional EQUITY SALES 
PERSON to develop further che UK INSTITUTIONAL 
MARKET. The successful candidate will posers: 

• A minimum of 2 years experience selling to UK 
Institutions. 

• A developed diem base within che UK investment 
community. 


Package to £70,000 

• An innovative and entrepreneurial approach to 
achieving success in a highly competitive market. 

In addition, it is essential that candidates can 
demonstrate an exceptional degree of drive and the 
ability to succeed in a professional fast moving 
organisation. This is an excellent opportunity ro join an 
established and accomplished sales desk providing clients 
with clearly developed products and services. Interested 
applicants should write to Gavin Starling or Peter Istead 
at Michael Page City, 39-4 L Parker Street, London 
WC2B 5LH, quoting reference 189390. Alternatively, 
telephone on 071 831 2000 for an initial, confldentlol, 

discussion. 



plays a key role in the regulation of the City. The 
activities of our 1400 member firms are as wide ranging 
as they are complex and embrace all die primary and secondary 
markets in the UK. The responsibility attached to the oversight 
of such business is correspondingly demanding and, with this in 
mind, our Surveillance Division has recently undergone 
significant restructuring. The aim has been two fold: fine, to 
create an environment which is more able to meet the challenge 
posed by die ever increasing complexify of the markets and, 
second, to ensure that we continue to discharge our regulatory 
respormbiKDes to die very highest standards. 

As pan of this process we have created a small Group of 
dedicated professionals who have particular responsibility 
for the regulation of some of our larger members. The 
activities of these Firms are diverse in the extreme; they 
demand of us a regulatory approach which is undaunted by 
complexity, capable of distinguishing the significant from 
the trivial and sens live to die dynamics of the market place, 
while always keeping firmly in mind our basic purpose of 
ensuring the integrity of all we oversee and upholding high 
standards of dealing. Such a challenge is not for the faint- 
hearted, but we demand from those employed ia this work no 
more than we do from all our staff; commitment, 


THE SECURITIES AND FUTURES 
AUTHORITY 

professionalism, an enquiring mind, unrivalled 
communication and inter-personal skills and a sense of 
judgement of the highest order. Wc look too for a sound 
undemanding of a wide range of financial instruments, a 
facility with numbers, at least a basic grasp of the principles of 
accounting and a willingness and ability to understand and 
evaluate systems of all kinds. A familiarity with techniques for 


REGULATION OF MAJOR 
INVESTMENT HOUSES 


evaluating and controlling market and credit risk is also essential 
Asking too ranch? We think not, but we do recognise that 
the people we seek are quite exceptional and likely to possess a 
range of skills which is not at all common place. If you believe 


you have the qualities and abilities we are looking for it is 
unlikely you wiD conform to any stereotype. You may be 

• a trading or risk analyst who has gained a good 
understanding of swaps, futures and options; 

• a mathematician who does not wish to pursue further an 
academic c a reer; 

• a qualified accountant with relevant financial services 
experience; 

• a professional with direct industry experience perhaps 
gained within a large investment house. 

Whatever your background, if you recogpise che value 
of fi na n cial services regulation and believe both tbar you 
are able to meet our exacting standards and that you have a 
contribution to make to our work, we would very much 
like to hear horn you. In return, we are able to offer not 
only che challenge of viewing our members’ operations 
from a uniquely privileged position, but also a flexible 
compensamin package based upon previous experience. 

Please write providing full career details and stating 
your current salary to; the Personnel Department, The 
Securities and Futures Authority Limited, Cottons Centre, 
Cottons Lane, London SE1 2QB. 

Closing date for applications: Friday 16th December 1994. 



Lloyds Bank 

International 

Private Banking 


Portfolio Managers 

Europe, Japan and Asia ex-Japan 


Geneva Based Competitive Package 

T vestment Management Services (IMS) is the central investment unit 
f TJovds Bank International Private Banking, headquartered in Geneva. 
Th unit is responsible for managing and advising private client assets 
™ _ 0 ^vestment trusts. We seek to hire three additional portfolio man- 
ners to cover markets in Europe, Japan, and Asia ex-Japan. 

* these positions, candidates should be aged 30-40, university gradu- 
to . P omics or Business Administration, team players with mini- 
ates in Econ - ence in fund management. English is our working lan- 
mum 5 given to candidates with good track records in 

^dmanagement. 

Interested candidates should send CV to: 

Ms N. J. Simpson, 

Personnel Department, Lloyds Bank Pic., 

Case Postale 5145, 1211 Geneva 11, Switzerland. 


HEAD OF UK 
CORPORATE BANKING 

Six Figure Salary 
Plus Benefits 

As one ot the world's most prestigious banking groups, 
our clients global reputation is matched only by the 
calibre ol stall it employs As part of its ongoing and 
continued commitment to trie UK marketplace, the bank 
has created a role lor a highly professional 'hands on' 
Head of UK Corporate Banking 

The successful applicant will take faff strategic 
responsibility lor raising the bank's profile amongst 
major UK Corporates. He/she will be a respected and 
credible figure within the London banking commimlty, 
who currently has active business relationships at Group 
Treasurer, CFO or CEO Levels with prime name UK 
corporates. 

This role will appeal lo candidates with drive, 
determination and vision who now seek a new career 
challenge within a demanding environment 


RELATIONSHIP RANKER 
UK CORPORATES 

Salary Negotiable 

As one of Europe's more innovative banking institutions 
our dient has an enviable reputation tor excellence. Now 
due to increased activity in the UK marketplace they are 
seeking lo enhance their coporate banktog lean with 
the appointment of a high calibre, professional Relationship 
Banker. Candidates should be graduates, aged 27/40, and 
be tote to demonstrate a track record of maintaining and/or 
developing quality relationships with major UK or European 
corporate entities. 

PRIVATE BANKING 

£ 40 -£ 45,000 

Our client, a leading European Bank, is seeking to appoint 
an additional team mamba- to its Private Banking unit 
Candidates will be able to demonstrata a successful track 
record in Fund ManagemerflAnvestmen I Administration. havB 
strong technical skills and a thorough understanding of 
Fixed Income and Equity products. The capability to create 
and implement new investment ideas Is highly desirable as 
is a European language skid. 


ACQUISITION FINANCE 

£ 40 -£ 50,000 

The highly respected bank is now seeking to strengthen its 
structured finance unit With the appointment of a further 
team member. In addition to having a proven track record 
to Identifying and transacting MBO/Acquertion financings, 
the candidate w® also be an original and creative thinker 
capable of designing bespoke solutions to client needs. 
Preference will be given to graduate candidates with a 
banking or professional background who can demonstrate 
an understanding of the tax issues related to this area. 

PROJECT FINANCE 

£3 5 ^£ 45 ,000 

This tearing UK institution, an increasingly active player in 
the project advteory/ttoandng marketplace, now series to 
enhance its team with tire appointment of an experienced 
project financier. The rote win cover a variety of sectors and 

wfli appeal to gra d uates with 34 years relevant cross border 
experience. Strong anafyticaJ and cash flow modelling skills 
are a pre-requisite as Is the abBity to negotiate at aU levels 
wttfi both internal and external contacts. 


Please contact 

Richard Lyons or Sean Can- 

Can* Lyons Search and Selection Ltd 


Astral House, 125-129 Middlesex Street 

London El 7JF 

Tel: 071-623 9493 Fax: 071-626 1263 


Carr» Lyons Search & Selection Limited trading as Williams Wingfield Executive 










• :v-\i 

■ ' ' ‘ . * ~ ~ ' 

• v.^ •. ■ 


28 


FINANCIAL TIMES FRIDAY NOVEMBER 25.199^ 


m 




ssx-diPif 

London 

A major participant in the global energy sector our client is 
one of the most pro-active companies in sophisticated treasury 
mana ge ment In order to exploit opportunities in the emerging 
markets, they are expanding their activities globally and this has 
lead to a substantial increase in project finance activity. 

You will be responsible for leading a team in the provision 
of structured, limited and non-recourse finance for a variety 
of projects in a number of different emerging markets. Your 
involvement will embrace the identification and analysis of 
complexities, devising solutions tough the use of innovative risk 
mitigation techniques and implementing the financing. You will be 
required to lead negotiations with financial institutions and host 
governments. Overseas travel will be involved. 


■ ■ 

To £60,000 + Car 

You will be a numerate graduate, banker or lawyer with at least 
three to four years experience at a senior level specifically in 
structured, limited and non-recourse project finance relating to the 
gas and/or power generation sectors. You should be knowledgeable 
about the current practices of ECAfc and MLA!$. 

This is an outstanding opportunity to make the transition 
into an innovative, international corporate treasury 
environment. Career development prospects are excellent and 
remuneration will be dictated by quality of experience. 

For further information in the strictest confidence, contact Anthony 
Cook or Tim Musgrave on 071 240 1040. Alternatively, send your 
resume quoting reference number 1846/02 to Morgan & 

Brett enham House. Lancaster Place. London, ' 

Fax No: 071 240 1052. 


Banks PLC, 

7EN. 



Mor gan 6 t3 anfs 

international 


From consultancy 
to management. 

Business development for Europe 
or Middle East/Afirica/Central Europe 


The world’s 
largest 
diversified 
corporation 


General Electric is a $60 billion global company generating 40% of its sales 
outside the USA. GE focuses on 1 2 key businesses ranging from aircraft engines 
to broadcasting, and in each sector there is a commitment to growth through 
technological leadership and total customer satisfaction. We are currently 
looking for a small number of highly accomplished consultancy professionals to 
join us in a unique business development role and go on to make the key' career 
shift from consultancy to line management. 


Located in 
Europe 


The European roles have a primary emphasis on process improvement, and as 
internal consultants you will work within operating businesses to boost 
profitability and enhance growth. Projects include accelerating the order-to- 
remittance cycle, improving the new product introduction process and target 
costing. You will work as full members of cross-functional teams where your 
expertise will help to address complex business issues and where your impact 
will be highly visible - and invariably decisive. The pan-European nature of the 
role means you can live in any European city. 


Located in 
Saadi Arabia 


The Saudi-based position covens a diverse and complex region which encompasses 
the Middle East, Africa, and Central and Eastern Europe. This is an externally 
focused rede with the emphasis on identifying business opportunities that could 
include market development, joint ventures or mergers and acquisitions - 
principally in the emergent markets of Central and Eastern Europe. Although this 
is very much an autonomous role, you will be part of a strong team of 
professionals in Saudi and work closely with peers in other GE businesses. 


Two years on. 


In either role, you will soon be ready for promotion into a line management 
position. Having worked closely with business leaders at the most senior levels, 
your move into a key leadership role will be underpinned by a track record of 
achievement and a sound understanding of the GE philosophy. While the 
business development role offers a uniquely smooth transition from consultancy 
to line management, the diversity of the GE businesses offers an exceptional 
spread of career development opportunities. 


The highest of 
high flyers 


We are looking for people of exceptionally high calibre who have carved out 
impressive careers with one of the premier management consultancies, and 
dearly have the potential to progress to the most senior levels of business 
management. Your excellent academic record will include a technical degree and 
an MBA, and you will also have the high-level analytical powers, communication 
skills and personal credibility to operate successfully at every level within major 
companies. You should also be bilingual, committed to hands-on involvement 
and willing to travel extensively in the course of your work. 


Rolling the ball 


We want the very best people in the market and we will reward them well. 

But ultimately the people we need will join us because they recognise the 
unique scope for personal and professional development with one of the world's 
premier corporations. If you think you could be among them, please write or 
fax your application with a full cv to Catherine Edwards, Reference 1021, 
Bernard Hodcs Advertising Ltd, 161 Hammersmith Road, London W6 8BS. 
Fax: 081-748 4272/4603. 



-USA 


General Electric Company 


An Equal Opportunity Employer 

■Not connected vrth the English Company of sfrrtfar name 


Our client, a leading US Investment 
Bank, is seekingan experienced 
Salesperson to provide secondary 
research coverage on South East 
Asia Equity markets to Institutional 
investors in Europe. Research 
coverage includes strategy, 
economics and company 
recommendations. Responsibilities 
also include sales of South East Asia 
Equity New Issues. ' 

Successful applicants must 
demonstrate knowledge of South 
East Equity markets and have 
strong institutional contacts. In 
addition, they must be able to 


Associ 


respond positivdyfon fast-moving 
and constantly changing market 
environment 


fi^aleadingbusinessschooland- 
fluency in at least one Chinese dialect 

Please apply in writing: with- a 
compr^ensiveCV, to: Alasten" 
Jyon, Confidential Reply Hanging 
Service, Ref li5. Associates in . 

Advertising, 5 St John’s Lane, 

London ECIM 4BfL . 


m 




client J 

rititk yourdetails skoMidnot be smt. 



TISING 


to- 


rn 



Impact the future, 

AROUND THE WORLD. 


Electronic banking is the future for both 
the business and consumer worlds. As - 
competition for this emerging market 
intensifies, Visa will be at the forefront 
in the development and implementation 
of products and services that impact 
consumer payment systems around the 
globe. You can personally impact how 
we meet these dynamic challenges in 
one of the following opportunities. 

■ Managers, Produgt ■ 
Development 

Technology innovations bring to Visa 
the opportunity to build on our prod- 
ucts and services. We need individuals 
with strong product development and 
electronic banking or consumer finan- 
cial services experience. Your skills will 
be applied to strategic development and 
creation of new products, new product 
support programs, as well as adding 
features and enhanced functionality to 
existing products in the debit card and 
ATM/EFT arena. A minimum of 5 years' 
retail banking, electronic banking 
and/or marketing experience in a finan- 
cial service environment is essential. 
Strong presentation and communication 
skills are a must. International marketing 
or banking background is a plus. Some 
navel will be required 


' Product Develwers - 

Working within a product team, you’ll .. 
rifiwgn and implement new features to- - l ' 
our leading-edge products and'services 
in: etearonJc banking ; con sumer 1 dec-, 
ironic products^ ATM/EFT m arket i ng 
programs arid products; and merchant :• .- 

services in debit POS cards, YbuTI also . 
develop the required product support - : 
programs for your product area. A 
; minimum, of 3 _ 

product dewJopmenr or marire&n&' - - 

experience is required; tate nrarion ajU 
experience andmulti-ktnguage skills 
would be advantageous. Some travel 
will be requlred. 

Make your impact •• 
TODAY. 

Visa offers the dynamic environment 
you'd expect from an Industry leader, • 
including an excellent compensation 
and bctKdta package. We Inyire Inter- 
ested and qualified candi date s to mail 
or fox their resume to: VISA USA., 

Human Resources, Dept- JL/FT, P.O. 

Box 8999, San Francisco. CA 94128. 

FAX: (4153 432-3273. We are an equal 
opportunity employer. 





§m // M i// / 


CAPITAL MARKETS - ATHENS 


High profile local positions with one of the world’s 
most prestigious iutemataoual banks. 


y7 

0 




The bank enjoys a global reputation for the range and 
quality of its products. Already a major player in Athens 
in the foreign exchange and money markets, it is 
expanding its activities in local bonds with the intention of 
becoming a leader in the Greek securities market: 

Head of Marketing & Sales 

You will be responsible for devising a marketing and 
distribution plan for Greek government securities, FX and 
other treasury products, for both offshore and local 
markets and for building a small team of professionals to 
implement this strategy. 

Head of Securities Trading 

You will head a team of traders making markets in 

Contact Tony Tucker 

Fax 

071-626 9400 


government securities and will devise and implement 
strategies to ensure a strong presence in both primary and 
secondary markets. 

To be a candidate for either position, you will require 
sound relevant knowledge and experience, together with 
strong leadership abilities and fluency in the Greek 
language. 

Prospects for career development are excellent, either 
within the growing local operation or elsewhere in the 
bank's international capital markets division. Aggressive 
local salary and bonus packages will be attractive to 
candidates of the required calibre. 

in strict confidence 


Willi 


deary Court, 21-23 St, Swxthm’s Lane 
London EC4N BAD 

nrandd HacniUnunt Coremtanta 


Telephone 
071-626 1161 


SHEPHERD LITTLE 


THE CONSULTING GROUP 

(INTERNATIONAL) LIMITED 

Private Banker/Finandal Advisor 
Middle Eastern Foods 

Full service American investment firm located in London seeks experienced 
private banker/financial advisor (Series 7 and Series 3) with management 
experience to increase the level of retail Middle Eastern business done out of 
its West End office. The successful candidates will have a good relevant first 
degree and an MBA from a recognised school and a first class track record in' 
private banking/brokerage sates in this sector 

Successful candidates will have considerable experience of living and woiW 
in the Middle East and in the USA (and/or UK) with a sophisticated 
understanding of both societies, and complete fluency (written and anohnA in 
both Arabic and English. ^ ; m 

Preference will be given to candidates who can demonstrate proven abflitv to 
generate commission revenue on a scale consistent with the level of assets 
under management from their own new accounts, particularly Kuwait. Saudi 
Arabia, Egypt, Jordan and Turkey (minimum levels $25M in assets, $3 qqooo 

revenue). Remuneration commensurate with commission revenue earned. * 

lb apply, please write enclosing CV to: 

Mr Peter Evans, Managing Director, 

The Consulting Group (International) Limited, 

98 Cannon Street, London EC4N 6EU. 


LONDON 


NEW YORK 


HONGKONG 


SINGAPORE 




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— 4 •■; 


FINANCIAL TIMES FRIDAY NOVEMBER 25 1994 


EUROPEAN EQUITIES 
RESEARCH EDITOR 

Our client is a leading UK-based international investment bank with an excellent 


ine editor works closely with analysts in London and on the continent and the 
quality an,S WOridwide to produce research material of the highest professional 

The successful candidate is likely to be a graduate with a degree in finance or 
economics, good English language skills and experience in financial publishing or 
investment. Computer literacy is essential, along with good organisational skills 
and the ability to communicate well with other members of the research team. 
Knowledge of another European language would be an advantage. 

The bank offers a competitive salary and attractive package of fringe benefits. 
Contact Tony Tucker in strict confidence 


Fax 

071.026 9400 


Cleary Court, 21-23 St. Swi thin’s Lane 
London EC4N SAD 
RnancHX Roauttmonl CtmauUonta 

SHEPHERD LITTLE 


Telephone 
071-4526 1161 


____ HEAD of FIXED INTEREST 

£NEC + CAR + BONUS + BENEFITS + RELOCATION BASED HALIFAX 


Substantial expatriate 
package 


JacdOne Fleming Unit Trusts 


Hong Kong 


Marketing Director 


Jurdlne Fleming Is the leading merchant bank In Asia. Its unit trust subsidiary (jfutt) is one of the fastest 
gnawing mutual fond companies in the world with over S4 billion under management, 200 staff and plans for 
significant growth in the coming years. A first-class, fund management marketeer is now sought to take 
charge of all product development, launch and marketing communication, capitalising on an outstanding 
brand franchise. Unique opportunity to contribute to the success of this fast-growing business os a key 
member of the senior management team. 


THE ROLE 

■ Responsible to the [long Kong -based Chief Executive 
for developing and implementing an overall 
marketing strategy that supports the attainment of 
stretching business objectives. 

■ interpreting market needs to fund managers, 
identifying opportunities and guiding the product 
development process through to successful launch 
and on -going marketing. 

■ Act as senior spokesman, positioning the Arm with 
the investment community in co-ordination with 
other jardine Fleming business divisions Key 
member of global management team with input on 
longer term strategy. 


Leeds 0632 307774 
London 071 493 1230 
Manchester 061 499 1700 



THE QUALIFICATIONS 

■ High calibre graduate, with between 3-7 years' 
successful track record of developing and marketing 
unit trusts in world-class institutions. Previous 
experience in the Far East and knowledge of cither 
Mandarin or Cantonese a distinct advantage. 

■ Proven skills set In the process of developing mutual 
fund products, with in-depth understanding of 
market, legal and regulatory Issues. 

■ An inspired and credible spokesperson, with excellent 
communication skills and the ability to build and 
develop a first-class team. A self-starter with Hair and 
initiative. 


l *Wt« repfr mMl BJ lot 

Selector Europe. Rot rMlOIMt, 


^ 1 IS'NG 


I1RE, 

ORLD, 

* T ilr\EL»"»I*ER> 


I \*.’y :« j.Ml'XC.T 


<; GR 01 P * 

Y r : - 

icial Advisor 
Focus 




Already the clear market leader in savings and 
lending, the Halifax is now building its unit trust, life and 
pensions business - committed to becoming die UK's 
biggest and best personal finance group by the year 2000. 

With our own-brand insurance operation on 
schedule Tor bunch iu January, wc arc now completing 
senior appointments to Halifax Fund Management Limited 
- set up to invest the assets of our new and existing financial 
services business. 

As Head of Fixed Interest, you'll enjoy a higit-prolilc 
role in what promises to become a major financial-sector 
success story. Heading up a team of investment specialists, 
you’ll manage all fixed interest and cash portfolios, co- 
ordinate bond market research and take full responsibility 
for risk analysis. 




You'll also be a member of the high-level 
Investment Strategy/ Asset Allocation team -the kind or 
decision-n taking involvement guaranteed to test your 
market expertise. Naturally, you’ll need a proven record of 
success in the fixed interest sector - with at least 5 years* 
experience of insurance portfolio management and, 
possibly, an actuarial qualification. 

In return, you can expect a highly attractive salary, 
plus performance-related pay. subsidised mortgage, bonus, 
car, private healthcare and, where necessary; assistance with 
relocation to Yorkshire. 

To apply, please write with full career details quoting 
ref: 95A to Barkers Response & Assessment, 30 Farringdon 
Street, London EC4A 4EA. 

H alifax is fully committed lo equal opportunities for all. “jAgf 


T* / V 


Senior Manager - 
Entertainment Finance 

Guinness Mahon is a major player in certain niches of the media 
sector. We are currently looking to further strengthen a small and 
highly committed team with the addition of another first rate 
banker. 

The successful candidate will report to the Director, Entertainment 
Finance and will be responsible for credit assessment, 
documentation, managing client relationships and assisting in 
business development. 

We require an experienced banker aged 30-40 who has had formal 
credit training and several years experience of corporate/commercial 
banking. Strong analytical skills and a good knowledge of 
spreadsheets and databases are essential prerequisites. Previous 
experience of structured and project finance would be useful. 

The company offers an attractive salary and ba nki ng benefits 
package. 

If you feel that you match the criteria above, please send your CV 
(including current remuneration package) with a covering letter to: 


Julie Allan, 

Personnel Manager, 

G uinn ess Mahon & Co Limited, 
32 St Mary at Hill, 

London EC3P 3AJ 



GUINNESS MAHON & CO. LIMITED 


International Regional 
Managers 

required by worldwide retail 
and finance company. 

Solid experience with blue-chip 
international retailer, large financial 
services organisation or at the sharp 
end of banking. Aged 35-45, 
energetic, enthusiastic and willing lo 
travel or relocate, if necessity. 
Languages a definite advantage. 
Rcmuneraooo package commensurate 
with poMtion. 

Write to ref. LA, Box A5005, 
Financial Times, One Southwark 
Bridge, London SEt 9HL 


STOCKBROKERS 

REQUIRED 

Young City based comp, requires 4 
S.F.A. registered individuals to 
service our existing dieiu base of 
private investors. Basic & 
commission package. If you arc 
between 25-35 yrs have min 3 y» 
exp. enjoy a hardworking 
environment call 
071 403 3212 
for more information. 


Conscientious GERMAN BROKER 
UnL degree, Am EogL, 

Fr. A Gena, to me Dutch & Japanese. 
Great institutional cooucia <& City 
experience. Seeks new challenge ia 
taksAndmg or bind mgL environment SFA 
icufeL & NaSD/N YSE/CfTC rr (s.3 ► 
s.7). Straog desire la profitably trade 
derivatives and/or forex for top 
(mvesuneoi} hank. 1 juemboorg-based, 
relocation possible. 

Serious emiujrie& only, please lo: 

Box A5002, Financial Times. 

One Southwark Bridge, Loudon SE1 41 IL 


Emerging Markets 

City Trading Company 


the company 

• Recently formed, and already probably the leading 
player in trie Brazilian bond market In London. 

• Active In all aspects of Latin American debt, 
including new Issues. 

• Regulated by the Sf=A - 


the position 

. Eurobond trader in small market-making team. 

! fading Latin Amerctan debt, focussed on Brazil, with 
* counterparties in Europe and New York. 


Please send full cv, 


Including salary and benefits, to: 


Tradeway 


THE PERSON 

• At least one year's relevant knowledge of Latin 
American debt 

• Extensive contacts with counterparties In emerging 
markets trading operations. 

• Ability to market debt products through own initiative 
in conjunction with our other offices. 

• SFA Registered Representative. 

• Team player in a small team. 

THE BENEFITS 

• Competitive salary. 

• Performance related bonus. 

• Non-contributory pension, Ufa Assurance, BUPA etc. 

The Managing Director 
Tradeway Securities Ltd 
Cleary Court, 21-23 St Swithina Lane 
London EC4N SAD 


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Turning 

the 

international 

| In international finance, you a 

V* (X challenge it. At Cedd, wc a 

I M JL X. XV ^^y W development of new products a 


SIT UO 


| In international finance, you can cither follow the market or you can 

I (X 1 challenge it. At CedcL wc arc challenging it with the continual 

t X. XX ^^y W development of new products and services far our customers. 

Our 550 multi-national staff operate from regional offices in the key 
financial centres of the world and from crur headquarters in Luxembourg. Wc operate as a clearing house for 
international securities, providing settlement and custody services for financial institutions worldwide. 

With our dynamic growth-driven culture, we arc looking for people to provide analytical 
expertise in the following business areas: 

♦ Securities Lending * Securities Database 

* NewIssues * Custody Services 

The focus in each role will be to assist the Product Manager in the strategic development of 
products and their management through each stage of the life cycle. This wifi involve providing a 
comprehensive research and information service for strategy development and sales presentations, 
and assisting with a wide range of activities within the launch process. 

We seek people with a detailed knowledge of global financial markets, coupled with vision, 
commercial flair, computer literacy and the ability work effectively as part of a team. Fluent spoken 
and written English is essential, while a second language would be an asset. 

In return, wc offer the opportunity to work in an exciting and innovative international 
environment. The remuneration packages arc extremely attractive. You will be based either in 
Luxembourg or London, although some international travel is to be expected. 

To apply* please send your CV along with covering 
' V TT" T" letter and recent photograph, quoting reference FT 16/11, to Ccdel 
y luX Human Resources Department, 67 Bd Grande-Duchesse Charlotte, 

I L-1331 Luxembourg. 

UO SoSo cedel 


Our people make the difference 





Credit Risk Managers 


Two kev roles with sector responsibility for corporate portfolios 


Excellent salary + performance bonus and full banking benefits • London 


As one of die world's leading international investment 
banks, Swiss Bank Corporation has recently won a host 
of awards for excellence, not least Euromoney's 'Best Bank' 
for 1994. 

In a strategic move of major importance, Swiss Elan It 
Corporation’s European Credit Risk Management 
portfolio is being transferred from Zurich to London. Two 
exceptional opportunities now exist at senior level for 
dynamic credit specialists, one to cover Norway and 
Finland, the other responsible for the Netherlands. 

In each ease, the role will involve managing the 
existing portfolio, with specific responsibility For analysis, 
negotiation, structuring and execution of cash credit, and 
treasury facilities. 

As this will be a creative and highly entrepreneurial 
role, you will need to be a graduate, probably in your 30's, 
with formal training in credit, ideally acquired in a large 
US or European institution. Vour technical expertise in 
negotiating, structuring and documentation, along with 


your broad knowledge of capital markets, swaps and equity 
derivative instruments, must be complemented by 
excellent interpersonal skills, a flair for managing others 
and real strength of character. Whether you are now 
operating as a Credit Account Officer, a Relationship 
Manager, an Analyst with a rating agency or an investment 
bank, you must be prepared for extensive client contact 
within your geographical area, and capable of steering 
complex projects through front inception to completion. 

Whilst relevant linguistic and regional knowledge 
would be an asset, this is not considered essential. Of 
greater importance is your credibility, capability, 
assertiveness and ambition in an investment bank that sets 
the very highest standards. Succeed, and the future career 
options are unlimited. 

To apply please send your cv, quoting ref; 888, to our 
consultant for this assignment, Niali Macnaughton, at 
BBM Selection, 76 Wading Street, London EG4M 9BJ. 
Telephone: 071-2483653. Fax: 071-2482814. 



Swiss Bank . 
Corporation 









30 


FIN ANCIAL TIMES 


FRIDAY 


i Far Eastern Fund Manager 4 


Excellent Salary + Benefits 

Our client is one of the leading Investment Management Houses in the City, with around «£lbn in 
Japanese and Par Eastern Funds under management 

The department is looking to strengthen its existing team by appointinga further Fund Manager whose 
primary responsibility is to manage Unit Trusts. Pension Funds, and International Equity Funds. The 
successful candidate should be mid to late 20’s, educated to degree level and have at least 3-5 years’ 
experience either as an Analyst or Fund Manager within the relevant markets. This challenging and 
demanding role presents a unique opportunity for an individual wishing to further develop their career 
in Fund Management 

Fora confidential discussion please contact Patrick Morrissey. Tel: 071-236 2400, Fax: 071-236 0316 or 
apply in writing to ShefUetd-fiaworth Limited, Prince Rupert House, 64 Queen Street, London EC4R LAD. 


Consultants in Search and Selection 


rf§ 


IBCA 

EUROPE’S LEADING RATING AGENCY 


CORPORATE ANALYSTS 

We require analysts, preferably ACA or with a relevant 
degree, to cover European (primarily, but not exclusively, 
UK) corporates. Language skills, particularly in French, will 
be a strong advantage. 

Candidates should have some prior analytical experience, 
which is likely to have been gained in stockbroking or 
banking. Ideally, they will demonstrate evidence of a logical 
and enquiring approach, backed by commercial and 
accounting awareness. 


BANK ANALYSTS 

Analysts with fluency in one or more European language are 
sought. 

Our banking coverage is worldwide; preference will be given 
to analysts with linguistic skills, with particular emphasis on 
the Italian, German and Eastern European languages. Prior 
experience of bank analysis is not essential, and we are 
looking for both senior and junior analysts. 


IBCA is the leading European rating agency, currently covering 350 banks worldwide and over 100 European corporations. 
As a result of expansion we are seeking additional analysts. The positions involve travel, contact with senior officers of banks 
or corporations, preparation of high quality credit reports and advising clients on the credit status of rated entities. IBCA's 
growth offers candidates the ability to become acknowledged experts in the field of rating assessment. 

Successful applicants will be those able to communicate well both orally and in writing and will be capable of confidently 
representing the firm in a professional manner at meetings with senior management of rated entities. Salaries will be 
competitive and commensurate with qualifications and experience, and the company offers a generous range of benefits. Write 
in confidence with foil CV. to the Managing Director. 


% 


IBCA Limited 

Eldon House. 2 Eldon Street London EC2M 7LS 
Telephone: (071 ) 247 5761 




Economist 

c. £35,000 + Bonus + Benefits 

This client is 3 leading specialist fixed interest 
investment manager with an excellent portfolio of well 
established blue-chip clients. The Company is small, 
emphasises client service and has an impressive 
performance record. 

Reporting to the Investment Director, the incumbent 
will join a small team and focus on generating a macro 
economic view on key G7 countries including the USA. 
This view will primarily be from a monelary standpoint 
It will be critical to investment decisions and maximising 
performance. The role encompasses preparing weekly 
policy reports, developing the research function, 
presenting views especially to the Policy Committee and 
supporting all client handling areas of the Company. 
There is the opportunity lor broader involvement and 
increased responsibility. 

Candidates will be economics graduates in their 
mid to late 20s. They will be team oriented, pragmatic 


THORNTON FAHEY 


Central London 

■ and must have an in-depth and . 

of bond markets throughout the . 

least four years' «P»"f r " ^ t f rest investment 
role as a principal advisor on fixed environment, 
decisions, preferably in a multi curr fY ___ stock 
They must come from a top mv^men '^d . 

broker, treasury function in mdusbY, H Mi 

relevant experience in the Bank of "8 • wi! j 

Treasury. Srrong Interpersonal 
be combined with the ability to » 

A .Mri* appKach. 

responsibility and the proven ability to p 
cut advice are essential. 

If you have the requisite experience. ^ 

please reply in confidence by quoting Ret- 6-3 ano ^ 

Resume ro Michael Fahey - «•* ’ 

1 Matron Place, London SW7 SLT. Tel. 071 584 6028. 

Fax. 071 823 7688. ‘ 1 










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SENIOR OPERATIONS MANAGER 

£65-75,000 + Banking Benefits 

Our client has a challenging opportunity within their International Operations area. The goals set for the successful 
individual will be to continually develop and improve the operations process through the use of modprn 
management methods. The identification of key areas for improvement and the implementation of change througj) 
re-engineering techniques will be primary responsibilities. Through strategic reallocation of resources you win 
strive to streamline and automate many aspects of the operations areas and seek to put in place continual quality 
initiatives. •. T : 

This highly rated Global Investment Bank is without doubt one of the lead nig participants in the investment field. . 
Due to the diverse nature of our client's business and their complete commitment to the development of their . 
staff, they are able to offer unrivalled career opportunities forlfie successful Individual. • 

The suitable candidate will possess a very special Combination of skills and experience. You should be. aged. to. 
35 and have a wide ranging knowledge of the recognised banking products le bonds, equities and dertvatbes. > 
Your track record to date will show positive career progression within a leading financial institution. You must be 
confident and outgoing with a creative flair and a sense of humour. . 

For further details regarding both the company and the actual role, please send your 
Curriculum Vitae In confidence to Antony Regamey and Rupert HarrfingBartt at 
Michelangelo Associates, International Search and Selection, . . 

Austin Friars House 2-6 Austin Friars, London EC2N 2HE 

Tel: 071 972 0150 Fax: 071 972 0151/2 ' “ " 


Michelang elo 



Mercedes-Benz 

Finance Ltd. 

To further assist our treasury activities we wish to ap paint a: 

TREASURY ANALYST 
Milton Keynes 

■ 

The successful candidate will join our Treasury team and assist the Treasury 
Manager in securing the cheapest cost of funding and optimise the use of cash 
across Group companies. In particular, the position will be responsible for 
ensuring the loan portfolio is tightly administered and that reporting is timely 
and accurate. 

We are seeking a graduate, AC A/ACC A/CIMA qualified, aged 25-30 who Is 
prepared to study Tor the ACT examinations and would welcome a great deal 
of responsibility and progression within the Daimler-Benz organisation. 

This is an excellent opportunity, offering good salary and benefits, to someone 
with drive and personality to make a real contribution to a growing company. 

Interested? Then written replies only please, to: Janina Pownall, Personnel Manager, 

Mercedes-Benz Finance Ltd, Marlborough Court, Sunrise Parkway, Linford Wood, Milton Keynes MK14 6YR. 


Mercedes-Benz Finance Ltd., part of 
Daimler-Benz AG, provides a wide 
range of finance and leasing products 
to the benefit of Daimler-Benz clients. 

Launched in October 1990, with a 
business strategy based on 
information systems, the Company has 
successfully built np a portfolio of 
£800 million and is continuing to 
expand apace. 




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INVESTMENT MANAGEMENT 
UK Institutional Marketing 

City Attractive Package 

Our client is amongst the World's most respected asset management groups 
with funds In excess of US* 120 billion under management. The London office, 
established 16 years ago, manages approximately LESS 4 billion and Is 
responsible lor all marketing within Europe. 

As part of the ongoing development of their European business they wish to 
recruit a marketing professional to assume responsibility for the UK Institutional 
market. This will involve developing and Implementing the marketing strategy, 
directly targeting corporate and local authority clients whilst liaising with the 
consulting actuaries. The Job requires commitment, the ability to meet light 
deadlines and considerable travel throughout the UK. 

The successful candidate will have a minimum of 3 years relevant marketing 
experience with a sound understanding of Investment management. He/she will 
be an excellent communicator, with well developed presentation skills who Is 
capable of working under pressure, enjoys contributing as an individual to a 
team effort and seeks the opportunity to see tangible results from their work. 
The significant career development potential will be reflected In the 
remuneration package that will Include an incentive bonus structure. For an 
Initial discussion In confidence, please contact us quoting reference 4913 at 
20 Cousin Lane. London EC4R 3TE. Telephone 071-236 7307 or Fax 071-489 1 130. 


\ 


Management 

Trajnee 

Long term 
development and 
growth in private 
limited company 
expanding in Central 
London. Individuals 
aged 23-35 seeking 
opportunities in 
financial markets. 

Potential to progress to 
senior management, 
with full profit 
participation. 

Call: John KilburnTopping 
071 240 4942 


STEPHENS 

SELECTION 




: A STEPHENS CHOU* CONSULTANCY; 
I Lowloa HWwxti New Yo* Hoag Kong I 


CCY/Interest Rate Swaps & Options 
Marketer Required 

AA Rated Bank with global derivatives team 
require energetic professional with 
3 years experience & strong technical 
skills. German speaking essential. 

Salary negotiable. 

call 071-330 5946 for more information 


m 


OPPORTUNITIES IN ASIA 

HEAD OF EQUITY RESEARCH - KOREA 
and 

SENIOR EQUITY ANALYST - SRI LANKA 


A leading Internationa] securities house with a high ranking in the 
Far East equity markets is currently expanding within . the region. 
This has created two opportunities for analysts from any market 
who want to pursue their careers In Asia. 

Candidates for the Head of .Equity Research position in Seoul 
should be over 30 with a minimum of 5 years investment research 
experience plus proven leadership, marketing and management 
skills. The role will involve working alongside otherreglonal teams 
whilst building the depth and quality of the Korean product 

The Sri Lanka position Is based In Colombo and requires strong 
accounting skills together with at least 2 years equity research 
experience. The successful candidate would be a senior member of 
a strong local research team and would play a key role in Its 
development. 

For further Information about these opportunities, which offer 
generous packages and housing, please write in confidence 
enclosing a CV quoting reference 5118 to 20 Cousin Lane, 
London EC4R 3TE, UK Tel: 0171 236 7307 Fax: 0171 489 1130 



STEPHENS 

SELECTION 


( A STEPHENS GKOUP CONSULTANCY 
Ibu&ai Utotaqk IhoM Bom Ia-( 7*p> 



I 


paMdre 

cordon:. 


& CO. ! (Ml I FI) 


ECONOMIST / MARKET STRATEGIST 
Salary + benefits - £ negotiable 


Parunure Gordon's increasing presence in the area of Market Strategy has 
given rise to the need for an Assistant Strategist This role will support the 
Chief Economist/Strategist across a broad range of Economics and Strategy 
activities, but will focus especially on the development of new and existing 
products relating to the UK Equity Market 

Candidates will typically have a good degree in Economics. Ideally aged 25- 
35, he/ she is likely to be currently working in a similar rede in a UK financial 
institution. Good writing and presentation skills, together with PC literacy are 
essential. 

Written applications including a contact telephone number should be sent to: 
Valerie Peachey, Panmure Gordon & Co. Limited, 35 New Broad Street, 
London, EC2M 1NH. 

Marker nf SPA aatifa- Lundm Sari-Fn-lmy 


ARE YOU INTERESTED 
CAREER AS AN ANALYST 
rOP STOCKBROKING HOI 


THE BROKERS 


YOU 


One of the City's leading stockbroking houses. * Young, dynamic, self motivated, self starter 

• Two to three years experience in the City 

or industry with an enthusiasm for research. 

* Have analytical skills. 


* First class research reputation. 

* Entrepreneurial. 

* Flat management structure. 

* Encourages and rewards success. 


* Ambitious, determined to succeed. 




P 


If you match the qualities above but your current work environment does not 

send your CV with a covering letter to: 

Box No. A5004, Financial Times, No. 1 Southwark Bridge, London SE1 9HL. 


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ACCOUNTANCY 

Tidying up the US corporate landscape 

Richard Waters reports on proposals to tighten restructuring and other one-off charges 


T he fashion among US compa- 
nies for taking big restructure 
mg charges may be drawing to 
an end. 

In recent years, such one-off 
charges have become a familiar part 
of the corporate landscape as man y 0 r 
the country’s biggest companies have 
sought to overhaul their operations to 
make themselves more competitive. 
Often, this work has been carried out 
under the broad-ranging (and fashion- 
able) banners of “reengineering’' and 
"downsizing". 

Tighter accounting regulations are 
about to make the process less attrac- 
tive. Last week, the Financial 
Accounting Standards Board's emerg- 
ing issues taskforce agreed on a 
stricter set of rules to govern this 
area of financial reporting - though 
they do not go Car enough, according 
to the securities regulators. 

The problem until now has been a 
lack of definition. What future costs 
should a company recognise in its 
current accounting period? F»fng by 
definition a prudent breed, many 
accountants like companies' accounts 
to reflect certain future liabilities, 
otherwise their current earnings 
would not reflect the reality of their 
business. 

However, drawing the net too 
widely allows companies to bundle up 
costs that should properly be charged 
against future earnings. That leads to 
bigger up-front charges and flatters 
future profits. (Perhaps for that rea- 
son, it is not uncommon to see the 
biggest charges being taken by com- 
panies that have recently had a 
change of management at the top.) 


The FASB has edged its way 
towards an answer piece by piece. In 
May this year, it came up with on 
answer to how the costs of planned 
redundancies should be handled. Last 
week. It reached a consensus on the 
more thorny subject of other, non- 
redundancy costs associated with 
restructurings. And early next year 
the board will conclude its thinking 
on a related area: the write-down in 
the value of assets, which often 
occurs in connection with a corporate 
restructuring. 

The title of its paper on the first 
two aspects of this work, due to be 
published an 6 December, gives a fair 
idea of how the emerging issues task- 
force's thinking has developed. It is 
called, rather long-windedly: "Liabil- 
ity recognition for costs to exit an 
activity (including certain costs 
Incurred in a restructuring)". 

As this untile i»g clear, taking a one- 
off charge in future will be limited 
largely to where companies are shed- 
ding businesses. Only those costs “not 
associated with, or {which] do not 
benefit, activities that are continued” 
will count. 

At one sweep, this appears to wipe 
out many of the opportunities for tak- 
ing restructuring charges that compa- 
nies have used this year. Among the 
clearest examples (and ones high- 
lighted in this column in March) were 
the series of restructuring charges 
taken by US regional telephone com- 
panies last winter. Nynex, for 
instance, said a $400m charge it took 
included "retraining employees, relo- 
cation expenses [and] systems reengi- 
neering”. BellSouth, which took a 


$l-2bn charge, said 3550m of the cost 
was related to “Implementing new. 
staLe-of-the-art systems". 

Clearly, these items would not meet 
the new taskforce rules. There are 
many other examples around. In a 
speech earlier tills month. Mr Walter 
Schuetze, chief accountant at the 
Securities and Exchange Commission, 
said a review by his agency had 
turned up “restructuring” charges 
that Included: "future expenditures 
for equipment such as computers, 
software for those computers or com- 
puters already on band, relocating 
and retraining employees, advertising 
and legal services, consulting ser- 
vices, expected adverse factory over- 
head variances on future production 
runs, expected increases in returns 
and allowances on future sales, 
increased warranty liabilities on 
future product sales, and the like”. 

T he rum emerging issues task- 
force regulations lay down a 
tighter set of rules for the cir- 
cumstances in which charges can be 
taken, and the types of cost that can 
be included. 

Those one-off charges that still 
qualify can only be taken after a com- 
pany has committed itself to a 
restructuring plan (which normally 
means getting board-level approval). 
Also, the plan cannot simply be a 
vague expression of a future inten- 
tion: according to the FASB, compa- 
nies will have to have identified the 
method by which they are going to 
dispose of the businesses concerned, 
as well as the expected date they will 
complete the exercise. The expected 


completion of the plan has to be soon 
enough far it to be unlikely that a 
company's manag ement will change 
its mind about the idea. 

Also, restructuring costs can only 
be taken if they meet one of two tests: 
they must either be extra costs that a 
company faces as a result of the 
restructuring plan, or contractual 
costs that it cannot get out of (an 
example of the latter would be the 
cost of terminating a lease on prop- 
erty which is no longer needed in the 
business). 

There are those who think the rule- 
makers have not gone Ear enough - 
among them Mr Schuetze at the SEC. 
Speaking earlier this week, he said: 
“In my opinion, they have allowed for 
the recognition of liabilities that do 
not meet the FASB's definition of a 
liability, and which are more in the 
maimer of contingencies.” 

Liabilities should only be recog- 
nised when there is some contractual 
or legal obligation to make a pay- 
ment, he says. “Obligations do not 
arise because a board of directors 
decides something.” 

Mr Schuetze concedes, though, that 
the FASB has at least reduced the 
scope for abuse. Before the account- 
ing regulators began their work early 
this year, "the ingredients and 
amounts included in restructuring 
charges ran from A to Z". Now, he 
says, “they’re reining it in: it runs 
from A to G. or maybe A to r. 

Whether the SEC win be satisfied 
with this, or whether it will push the 
matter further, remains to be seen. At 
this stage, Mr Schuetze refuses to be 
drawn on the question. 


In theory, some big restructuring 
charges already taken - including 
those reported by Nynex and Bell- 
South - could be open to challenge by 
the agency. 

The new taskforce regulations, 
though they come into force before 
the end of this year, are not retrospec- 
tive. That means they apply to 
charges ta kwi during the final quarter 
of the year, but not those reported in 
earlier accounting periods. However, 
the SEC has the power to force com- 
panies to r a sforf' A figures included in 
earlier regulatory filings. It is a power 
the agency is most likely to use when 
vetting prospectuses issued by compa- 
nies in connection with the sale of 
new securities. 

In the meantime, the emerging 
Issues taskforce is getting ready to 
issue its thoughts on asset write- 
downs. Here, again, there is a tempta- 
tion for companies to take big one-off 
charges to reduce future amortisation 
charges to earnings, whether from 
tangible assets or intangibles like 
goodwill. 

The taskforce’s approach is based 
on the use of discounted cashflow 
analyses: when the book values of 
assets, or groups of assets, are higher 
than the present values of the fhture 
cashflows the assets are expected to 
generate, they should be written 
down. 

This, at least, is one area where the 
SEC is likely to go along with the 
FASB. Unlike an expected restructur- 
ing cost, an asset represents "a prior 
expenditure, not a fhture expendi- 
ture", says Mr Schuetze. “That is a 
vital distinction.” 


> FT/ms 'V. 

ECHOS 

The FT can help you 
reach additional business 
readers in France. 

Our link with the French 
business newspaper, 

Les Echos, gives you a 
unique recruitment 
advertising opportunity to 
capitalise on the FTs 
European readership and 
to further target the 
French business world. 

For information on rates 
and further details 
please telephone: 

Philip Wrigley 
^ ON +44 71 873 3351 ^ 



Michael Page’s 1994 half-year profits rose 177%. The result of our success in 
Finance, City, Sales & Marketing, Legal, Technology and Public Sector recruitment. 

What other reason do you need to join us as a Recruitment Consultant? We can offer plenty of scope for progression, opportunities at all levels and packages to 
attract the best. But you’ll need to be of graduate calibre with a record of success in one of the above areas. Find out more, cidl Alan Dickinson on 071 242 8555. 

Michael Pace Group plc, Pace House, 39-41 Parker Street, London wc2b 5lh 



Executive 

Resourcing 



^ O turnover of £60 minion. Ws raM 

™ D has enjoyed dramaUc growth over tt» lad few yea*. 
9W ** - ttiek strong mortal position. 


e$5P,O0O 4-CAR 


gig group has ambitious plans lot tutihet expansion and a 
, in the medium tenn. 


Rcmortlnp la the Chaltntoii you wIR have total ^cnelblltly 
»ance and accounting functions atross the group. 
ST^y he to ensure llghl dnandal control al 
renames. Fundamental to mis win bet he 

^^Zaemant mfoimotion systems to support the 
^Z^ftSness. As on integral member of file 

wiu be required to provide on Intomed 

ESS^-e"-"- — « — — 


A graduate qualified accountant you should have a proven 
track record of achievement In the implementation and 
stewardship at tight financial control gained in a 
cammerdaty strong, market led and Ideally mutfi-stte 
retailing business. A highly sett motivated Individual with 
good communteaflon skills, you must be equally capable of 
ftineflontog at bath strategic level and In the detail necessary 
to drive operational Issues and control associated costs. You 
will also have the obfflty to manage change and cope with 
the pressures at growth. 

Please send full personal and career details including cunent 
remuneration level and daytime telephone number, in strict 
confidence to Angela McOermottroe, Coopers & Lybrand 
Executive Resourcing Ltd.. Albion Court, 5 Albion Place, 
Leeds LSI 6JP, quaffing reference 295AM on both envelope 
and letter. 



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The Royal College 
of Surgeons 
of England 


The Royal College of Surgeons of England fulfils its 
responsibility for maintaining the standards of surgery in 
England and Wales by training, educating and examining 
surgeons and dental surgeons. The College, which is a 
leading charity employing 180 staff and with an annual 
income in excess of Ell million, requires an experienced 
and enthusiastic finance professional to take up the post 
of Finance Secretary. 

As Finance Secretary you will manage the College's 
accounting and financial control function and advise 
Council (the College's governing body) on all financial 
matters, working closely with a nominated Member of 
Council. You and your team of 12 staff will implement 
agreed accounting policies, maintain controls and 
prepare management information, budgets and long term 
plans. You will also liaise extensively with Government 


C. London 
£ 45 -£ 50,000 plus benefits 


departments, the Charity Commission and external 
advisors. 

You should be a qualified Accountant, probably in 
your forties, with broad financial management 
experience, some of which may have been gained within 
a professional body or similar environment. You will be a 
strong communicator and motivator and be able to work 
effectively with a wide diversity of people. 

To apply please send a cv with salary details quoting 
ref. 1744 to Joan Coulter (071 489 6050) Binder Hamlyn 
Fry, 20 Old Bailey, London EC4M 7BH. 

Binder Hamlyn Fry 

Arthur Andersen worldwide organisation 





FINANCIAL TIMES 


FRIDAY NOVEMBER 


25 1994 


Finance Director 

Major Listed Multinational FMCG Group 




Provinces 

With interests spread throughout the world, our client is 
a high profile UK pic, producing and distributing a range 
of branded and own label products through lending retail 
outlets across Europe. A strong customer focus, a sound 
investment strategy, product innovation and a 
commitment to quality ail play a part in achieving 
continued success, and the group is well placed to 
achieve substantial growth both organically and by 
acquisition. 


Package to £150,000 + Benefits 

Candidates should be graduates, qualified accountants 
and currently Finance Director or deputy of a listed 
company, preferably in the consumer goods sector. 
Experience of working in a complex, multinational, 
customer-focused business is vital, ideally with 
exposure to the City. 


The Finance Director must be commercially astute, 
combining first class strategic and analytical skills with 
a resu lb-oriented, pragmatic approach. A team player 
and leader, he/she must be energetic, creative and 
committed. 


The Finance Director will be closely involved in the and leader, he/she must be energt 

strategic management of the group, with a particular committed. 

emphasis on America and Europe. The company is u , ... _ . 

decentralised and the successful candidate will manage a The remuneration pa. kage will reflect the 

small head office team, providing financial leadership international growth potential of the group 

across the entire group. Ensuring that finance continues 

to cater for the needs of a fast moving, CKRS ' t meaddres' 

®^^5££i ifeTK-raesn 

focus, liaising with City institutions and J 

advisers. * 

SEARCH & SELECTION 

CLAREBFU. HOUSK. 6 CORK STREET. LONDON Vt’IX IPB. TKI.:I»7I 2H7 28’IJ 
A GKR Group Company 


Please send a full CV in confidence to 
GKRS at the address below, quoting 
reference number 348) on both letter 
and envelope, and including details of 
current remuneration. 



INTBTUATPNAL 


Group Finance Director 

Andover c* £75,000 + Benefits 




, 'rr */£*•• 


■ CBE International Pic is die holding company hr a 
broadly based group of companies operating In the 
specialist areas of process and precision engineering. 
The company is known world-wide for its excellence of 
engineering, design, production and marketing. The 
group's turnover for 1993 was approximately £40m 
which has been further expanded in 1994, with an 
encouraging order book hr 1995. 






-Si 



* Supported by a small head office function, the Croup 
1 Finance Director will lake overall responsibility hr the 
group's financial affairs. These will embrace die 
provision of high quality management reporting, 
maintaining tight financial control, operational and 
strategic treasury management and providing a strong 
and focused commercial input to die business 
operations. A key aspect of the role wilt be 
considerable ■ interface with the group's bankers, 
brokers, shareholders etc. 

■ Candidates for the position will need to possess a i 
strong hands-on approach to the individual businesses, . | 
have first hand experience of working within a Pic m 


hr a environment and ' be we//, versed in investor 
the relations A background nran engineering/contract 

■ing. oriented business is essential. Personal at 9^ >tes 
> of should include strong :communication skills, a 
he . commercial outlook, demonstrable drive together 

m with a pragmatic approadr to problem solving. It is 
n considered unlikely that candidates under the age or 
■ 40 will possess the necessary experience. . 

* The basic salary will ■ be 'supplemented by an 
appropriate rang?. of benefits, to indude. a substantial 
performance related bonus scheme, car, share options 
and, in appropriate prcumstances, relocation assistance. 

• Interested applicants should write; outBning their 
suitability .for 1 he appointment, enclosing a detailed 

curriculum vitae with current salary and quoting reference 
CA591 to Carrie Andrews, ' Ernst & Young Corporate 
Resources, Rods House, 7 Rods BtrikSogs, fetter Lane, 
London EC4A1NH* 


Financial Controller 

ATTRACTIVE PACKAGE POLAND 

Reebok International Is a leading world-wide designer, marketer and distributor of sports and 
fitness footwear and apparel. Last year Reebok International worldwide achieved revenues of $3 
billion. Reebok’s products are sold in more than 100 countries around the world, combining a 
unique blend of Innovation and energy with an over-riding ambition to be number one in the worid. 

The establishment of a new subsidiary in Poland has generated the need for a Financial 
Controller. Based in Warsaw and reporting to the Administration and Operations Director - 
Reebok Poland, the appointee will be primarily involved with the entire financial management of 
the company. 

Spetffieaify, this wifl encompass overseeing the production of monthly US GAAP reporting, 
forecasting, planning and analysis, as wefl as taking care of afl local fiscal requirements. 

You will also be expected to contribute to the development of the company through a 
com m ercial and practical approach. 

This opportunity will appeal no a results orientated, qualified accountant, aged 25+ with a 
minimum of 2 years post qualification experience gained within a commercial organisation. The 
abificy to speak fluent English Is a pre-requisite. Some knowledge of Polish would be advantageous, 
although not essential Applicants should be capable of demonstrating a record of achievement to 
date, and possess the ability to Influence at senior levels. 

Benefits indude an attractive remuneration package, foil relocation assistance, company car, 
and the opportunity to develop a career within this dynamic organisation. 

Interested candidates should contact our advising consultant Jonathan Jones quoting Ref JJ6012 at 
Maria Satan Financial Recruitment Consultants, Sackville House, 40 Piccadilly, London WIV 9PA 
Teh 071 434 4455 (eves/weekends 081 464 0927). 

Any CVs submitted direedy to Reebok will be forwarded to Marks Sattm. 

Closing date for applications: Monday 5th December 1994. 


O 1994 Reebok Inthuwionac Lwim Au bights resbwedl REEBOK amo the 

ABE REGGTEHED THADOWIUU Of REEBOK iNTTWiATlONAL LlMrTH). 




A HIGHLY INFLUENTIAL ROLE 

Sheffield 


Salary Package Negotiable 






Abbey National Shareholder Services commenced operations in 
early 1994 from purpose-built Headquarters on the ouskins of 
Sheffield. 

Initially set up to manage the service to Abbey NationaTs 23 
million shareholders, it operates in a modern, open plan 
environment with excellent communications and plenty of room 
for growth. 

It b within this forward looking business, that we now require a 
professional with wide experience and a thorough knowledge of 
Share Registration, particularly in the area or stock events and 
capital issues to assist the team in the next phase of development. 
This includes enhancing the system to provide a commercial 
service to major companies throughout the UK. 

You will provide guidance and support to the development team, 
particularly on operational planning and procedures, review 
design documentation and be responsible for ensuring that the 
design agreed, meets the future business requirements. 

To ensure the smooth running of the operation, you will also 
participate in the design of test material and programmes, the 
writing of detailed operational procedures and provide support to 
the staff. Additionally, the role will involve assisting in preparing 
business proposals. 


With at least 5 years experience in a financial environment, yon 
will be able to demon s trate abroad range ofbuslness experience, 
including knowledge of registration procedures, company 
notations and events gained at a senior leveL Having worked 
successfully as part of a project team you vriQ be able to ' 
demonstrate exrcllent communication and leadership skills. The 
ability to design and doenmetu effective op era tional systems Is oF 
paramount importance. . . «- 

Initially for a period of 1 year, this position offers the" right person 
a superb opportunity to contribute to the shaping of the future of . 
an already successful operation. Salary Ls negotiable and b 
accompanied by a range of benefits, 

Tosupponahealdiy environment. Abbey National has a no. . 
smoking policy. . . . 

Please telephone or write for an application form: Shareholder 
Services Personnel, Abbey National pic, Cathrodk House, 

5 Carbrotik HaQ Bond. Sheffield S9 2EG. Tel 0742 563 1 75. 

Closing date for receipt of applications is 9th December 1994. 

fn pursuingourpetky of equality of opportunity for aU, Abbey • 
National positively welcomes applications from every section of 
the community. 


t ABBEY 
NATIOr 


NATIONAL — 

Promoting Success Through Equality 


Bice Waterhouse 


EXECUTIVE SEARCH & SELECTION 


Managers - Group Internal Audit 

Leading banking and financial services group 

Up to £35,000 + benefits London based 


BicefHtterhouse # 


EXECUTIVE SEARCH A SELECTION 


This major international banking and financial services 
group is at die forefront of banking developments. Activities 
include retail banking and wholesale banking, life insurance, 
investment management and stockbroking. 

Its Internal Audit department works closely with 
management to improve efficiency and control within the 
business. They now require more qualified accountants 
to further strengthen the existing team on the development 
and implem e ntation of innovative audit methods. 

Reporting to a Senior Manager, you will work in a small 
team conducting fin a n ci a l and business audits across the 
widespread activities of the organisation. These roles will 
require creative and constructive thinkers to assess business 
risks and provide effective recommendations for 
improvement in control. 


This is an ideal opportunity to join a leading blue chip 
fina n cial institution with the prospect of moving into other 
financial roles throughout the group. 

We are recruiting at two levels. You will need to be a 
graduate and qualified accountant. At the more junior Level 
you will have up to 2 years pose qualification experience in 
a financial, operational or audit role in banking or financial 
services. For die more senior role 3 years experience is 
required. You will be ambitious to progress, whilst making a 
major contribution to this organisation. Travel will be 
required in the UK and overseas. 

Please write with lull CV, quoting reference J/I5Q3, to 
Judith Richardson ac Executive Search 6/ Selection, 
Price Waterhouse, No l London Bridge, London 
SEl 9QL. Fax: 071 403 5265 


European Internal Audit Manager 

International Construction Materials Group 

c. £45-50,000 + car + benefits London 


-.g aity i r . ■■■ W-c -• . : .Vfc „ p , 





Coca-Cola 




mm i»5 mmmmm 



With a significant history of growth, this major 
international organisation has operating subsidiaries 
throughout Central and Eastern Europe,' and the 
Middle East Products include building and construction 
materials. 

The continuing success of these operations means the 
need has arisen to appoint an Internal Audit Manager to 
develop a pan-european audit department. With a strong 
audit culture within the Group, this is an ideal 
opportunity to establish a team that is geared to the 
commercial aspects of the business as well as the 
financial procedures. 

Based on the outskirts of London, you will also be 
expected to travel to the operating subsidiaries. For 
the right candidate there are excellent opportunities 
to progress to a line financial role within the Group 
in due course. 

You will have significant audit experience in a multi.' 


\G€ A 



Amatil 




site, international company or may currently be working 
within die profession and. seeking your first commercial 
move. Ideally, you will be a Chartered Accountant and 
you will certainly be computer literate. You should have 
at least one other European language (preferably 
German). Your personal characteristics will be vital to 
the success of this role: you must be able to lead a 
to generate and implement the ideas to build an effective 
Internal Au d i t function, co-ordinate audit projects 
throughout the Group and present the conclusions at the 
most senior leveL 

If you have the combination of experience and talent 

that we seek, please send a fell CV and a covering letter 

demonstrating your suitability for this role to 
Jane Rhodes, quoting reference number E/1506, at: 
Executive Search & Selection, Price Waterhouse, 
No 1 London Bridge, London SEl 9QL 
Fax: 0171403 5265 


W f v 


*6* + £ .'■* ‘t : 


rrTTTrrrmr 


CHIEF FINANCIAL OFFICER 1 

| '/ -i v 1 1 

1 COMMERCIAL | 


FINANCE DIRECTOR 1 


Executive Package and Expatriate Benefits 


Prague 


Coca-Cola Amatil, is a global leader in the manufacture, marketing and distribution of a portfolio of premier branded 
carbonated soft drinks, mineral waters and other non alcoholic beverages. The Company’s position has been further 
strengthened by an agressive and successful expansion programme across Central and Eastern Europe typified by 
ourstanding increases in safes, performance and profitability in the Czech Republic. 

The success of Coca-Cola Amatil Czech Republic, the local franchise holder for Coca-Cola branded products, is 
underpinned by substantial investment in new manufacturing and distribution facilities, creative marketing and 
forward thinking manag ement- Further growth is anticipated and the selection of a new Chief Financial Officer is seen as 
a key appointment for the business. 

Reporting to the General Manager; the position will assume executive responsibility for directing the company’s 
commercial strategies and growth orientated investment programs as well as overseeing 60 staff in F i nance , 
Adminis tration and Information Systems functions. As part of the Executive Management team in the C ze c h Republic 
the CFO will also be a key participant in the management of the Global business. 

A Qu alifi ed MRA/ Arymnntan t^ the ciinreegfwl randiclate will demonstrate a proven track tPOOrd In an 

international business environment, ideally Eastern Europe, where you will have developed strong |b|^n| 
»nei mana g fi w n t <k»)?g arvi a approach- A connection with the Czech Republic will ^RS9 

be a distinct advantage. It is expected that you will have fully-developed Czech language skills. HBvH 

Interested candidates should contact our advising consultant Kean August, in strictest confidence, at ESifl 

FSJS Europe, Charlotte House, 14 Windmill Street, London W1P 2DY, UK. Tel No: (44) 71 F S S 

209 1000 (days) or (44) 71 385 3886 (eves) Fax No: (44) 71 209 OOOL EUROPE 


| FINANCE DIRECTOR | c£ 35 , 00 * 

■f Car 


Commercial ACA, (mid 30s), 
RetaVSenrice Industry baCkgrouid, 
FD at both small (£2m) and large 
(£300 m) companies seeks 
contract work in the London or 
Thames Valley areas. Strengths 
include: 

□ System design, development 
aid Implementation 

□ Staff motivation and 
management 

a Efficiency programme 
management 

□ Problem sohring 

For further details ring 
or fax: 0734 341567 


+ Substantial 
Performance 
Related 

Benefits 

IHOMK COL’NTilCS 


Our diem is an expanding and dynamic international enrineerirw 
company, embaitmg on the next exciting phase of its devetopment 
Waking closely with the MD, providing support on a wide range of 
commerad and operational issues, you will be responsibfefOT dl 
aspects of finance dedicated to achieving m*™,,.*, — m 

in all areas and to fully 

Accountant with strong business awareness, and exedfem “ 
knewtedge ideally with experience m 

To be considered for this apppointment, please _ 
send your full CV, to Anthony Lewis, EBBi 
Consultant to the Company at FSS Financial WB I 

Selection Services, Charlotte- House, 14 Ufl 

Windmill Street, London Wlp 2DY or Elfl 

alternatively telephone on 071-209 3000 or fox FSS 

on 071-209 0001. «... 


Le 

earning* to £*S 




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financial TIMES 


FRIDAY NOVEMBER 25 1994 


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V J t 


H '2 


Group Finance Director 


£ 1 00,000 Package + Benefits 


South Midlands 


A challenging role to run the finance function of a major pic 
and contribute to the strategic development of the business. 


THE COMPANY 

i " dualrial service* group. Sales exceed 
£500m. 3,000 employees. 

♦ Strong balance sheet. Profitable. Broad ranging 
finance rote with 50+ staff - . 

♦ Diversified and with scope to streamline operations and 
cn “ anct ‘ performance, particularly in core businesses. 

THE POSITION 

♦ Report to Chief Executive. Manage aH accounting and 
audit, financial planning, pensions, co secretarial and 
investor relations. 

♦ Lead role in corporate planning, budgeting and 
acquisizian/divcstmenr strategy. 


♦ Key task to represent company to City and contribute 
to maximising shareholder value. 

QUALIFICATIONS 

♦ Qualified accountant with experience of full financial 
control from large pic or significant pic subsidiary. 

♦ Hands-on, with previous involvement in major 
restructuring and with corporate strategy 
development 

♦ Excellent communicator. Logical thinker with highly 
commercial, pro -active approach. Age 35-50. 


Please send full cv, staring salary, refBN4606, to NBS, Berwick House, 15 Livery Street, Birmingham B3 2PB 



N B SELECTION LTD 
t BNB tcsoira pic company 


\ 


BIRMINGHAM 021 233 4*56 
Aberdeen 0124 638080 • Brian! 0272 291142 
Edinburgh 031 220 2400 • Glasgow »I 20* 4334 
Lee* QU2 453830 ■London 071 493 6392 
Manchcwer 0625 539951 • Sough 0753 819227 


Finance Director 


Leading Edge Multimedia Products 

Earnings to £45,000 + Benefits & Share Options Potential 

First finance appointment in new business at forefront of 
technology. Pic backing. Aggressive strategy for growth. 

THE COMPANY 

♦ Autonomous subsidiary of fully quoted, ambitious pic. ♦ Provide commercial and strategic input. Perform ad 

Enormous growth potential by acquisition and organic hoc projects, including joint venture and acquisition 

expansion. evaluation. Manage systems development 

♦ Breaking new ground in innovative multimedia fMTAT rPTrATTOVC 

pubhshing products for UK and international markets j ........ _ 

p urMuiumiawuunuiuiiircu. <+> Graduate young accountant. Preferably from fast- 

management team. Culture of moving orgaSon, such as IT services Experience 

empowerment. 0 f international markets, especially US, an advantage. 

THE POSITION Exposure to cross-functional teams essential. 

♦ Real opportunity to impact performance and growth ♦ Flexible, forward thinfemg team player with hands-on 

plans. Shirt aieeves involvement Contact across all areas approach. Strong systems orientation. 

of the business. ♦ Commercial outlook with keen eye for detail. Potential 

♦ Full responsibility for financial management and to grow with the business, 

control Report to MD. 


London 


Please send full cv, stating salary, ref N47I7, to NBS, 54 Jermyn Street, London SWIY 6 LX 



LONDON 071 493 6392 
Abodeoi 0224 638080 • Birmingham 021 233 4656 
Brinof 0272 291 142 • Edinburgh 031 2202400 
Glasgow 041 204 1334 ■ Lend* 0532 453830 
Manchester 0625 539953 ■ Slough 0753 819227 


Fast Track Entry into IT Consultancy 

Computer Assurance and Risk Management Consultants 

Outstanding Opportunities for Ambitious Accountants 


London 

Touche Ross is a leading world-class management 
consultancy in the UK with over 650 professional staff and 
with a client portfolio which includes many of the world's 
leading businesses across the private and public sector. 

The Control Audit and Security division is a major part of 
the IT consulting practice and is experiencing unprecedented 
growth. As a result we can offer outstanding career 
opportunities for ambitious, recently qualified chartered 
accountants with computer audit experience who wish to 
progress into mainstream IT consultancy and who can 
demonstrate an innovative approach, flair and energy. 

We can guarantee an exciting range of world-class IT 
projects using the latest methodologies and most advanced 
service delivery tools. Against the backcloth of this dynamic 
environment we seek commercially minded individuals, with 
the capacity to thrive and adapt to a constantly changing and 
challenging environmenL 

You are likely to be 25-35. possess a CCAB recognised 
Accounting qualification, a good degree and a minimum of 


Competitive salary package 

1-3 years relevant post qualification experience gained in 
public practice, the private or public sec l or. You are an 
excellent communicator and can already identify with the 
fast track. 

We would also welcome applications from seasoned 
computer audit specialist, with blue chip experience, seeking 
a move to an organisation where their skills will be valued. 

If you are keen to work in a stimulat ing environment where 
there are no constraints on progress call our retained 
consul uni Christine Try bus on 0442 231691 days or 0923 
270455 evesAvkends. Alternatively write io her at Executive 
Recruitment Services, Boundary Way, Hcmd Hempstead. 
Herts HP2 7RX. Fox 0442 230063 


Inche 




c.£30K + car 


Spalding, Lines 


TanrUfrost Frozen Foods Umited is one of the UK's leading suppliers of frozen 

322532 and tea wholly owned subsidiary of Christian Sabesen pic Packing 

into customer's own brands the Company holds a significant share of the 
STrStfcte aShSepwdent retail sectors as well as supplying the UK food service 
and food manufacturing markets. 

A recent reorganisation has led to the creation of the position of Fmancjaf 
roster reporting to 'the Managing D.reaw. Through a team of five people the 
Controller. wi n responsible for all management and financial 

SUCC ‘^o , ? ntom“ion and foresting, ensuring that a high standard of 
accounting^ practice is maintained which meets company, group and statutory 
requirements. 

_ •« he Qualified to CIMA or equivalent and must be able to demonstrate 
of managing standard costing systems In a manufacturing 
their essential that the Financial Controller possesses strong analytical 


«f managing standard costing systems In a manufacturing 
their axp*"®" c j^t the Financial Controller possesses strong analytical 

environment « e jmnwdiate contribution to both the financial and general 

indudmg company car and relocation package where appropriate. are 
horn a large organisation. 

iSStoS vm* »*■* Road - l,to 

PE112BE. 


fib y? 


CHARTERED 

ACCOUNTANT 

Over 10 years 
experience at 
FD and 

Controller level. 

Systems, year ends, 
budgets, business 
plans, taxation 
due diligence, 
strategic planning. 

Just finished 
large contract; 
seeks short term 
contracts. 

Teh 0242 228880 
Fax: 0242 228810 

Refi D Murray 


HEAD OF INTERNAL AUDIT 


London 


£ Excellent + Bank Benefits 


Out client is a wholly-atoned subsidiary of a major UK Clearer dealing in all aspects qfbancassurance 
including Life Assurance, Insurance Broking & Trust, Investment, Unit Trusts and Stockbroking. 

A new, key senior role has arisen to manage the infernal audit function of this expanding 
sector of the (Hearer's business. The team will be responsible for conducting audits with a 
full assessment of business risks, critically assessing existing internal controls together with 
producing and implementing recommendations. This is an exciting opp or tunity that will 
challenge those with personality and ambition. 

The successful candidate will already have proven managerial experience of the financial 
services business in an audit, financial or operational role and will have an understanding 
of regulatory requirements- A graduate qualified accountant and currently carrying out a 
senior managerial role, the job holder will be IT literate, a strong and innovative leader, have 
excellent communication skills and the flair to apply lateral and in-depth thinking in a 
neccessarily structured environment 

Please send your c.v. to Helen Highet at the address below. 

Jonathan Wren & Co. Limited, Financial Recruitment Consultants 
No. 1 New Street, London EC2M 4TP Telephone 071-623 1266 Facsimile 071-626 5259 


JONATHAN WREN EXECUTIVE 


Head of Finance & 
Accounting 


■fy Saudi Arabia 


cUS$l 20,000. 
(tax free) + 
Executive 
Benefits 


INTERNAWOi 


Our client a highly successful Saudi-owned 
business, is a major force in die FMCG market, 
with a number of leading brands. To 
consolidate its dominant position and sharpen 
its competitive edge throughout the Middle East 
region, the company has recently undertaken a 
significant restructuring of its organisation 
involving the recruitment of a top international 
management team. 

As part of this process, this new post has been 
created which reports to the Chief Operating 
Officer and carries full responsibility for the 
creation and management of an effective 
corporate financial management function. 

Your role will entail the establishment of new 
company-wide financial systems and controls, 
including new IT systems and detailed 
accounting functions, together with die 
recruitment of staff to provide a professional, 
high quality accounting service. The substantial 
Introduction of manufacturing means that cost 
accounting will assume increasing importance, 
and you will also advise on the financial 
implications of joint ventures and acquisitions. 


Probably in your mid 30s • mid 40s, you will 
be a professionally qualified accountant with a 
good degree and, ideally, an MBA Your well 
rounded finance and accounting skills will 
have been gained in a senior position, ideally 
within a progressive FMCG company where 
you will have had experience of introducing 
new financial systems. Commercially aware, 
you wifi be used to working in a rapidly 
changing environment and must possess the 
strategic vision and hands on ability to deal 
with a dynamic, market driven organisation. 

■ International trading experience will be useful 
and a practical knowledge of the Middle East 
would be a distinct advantage. 

In return you will enjoy an attractive salary 
and a generous package which includes 
performance related bonus, executive housing, 
car, assistance with school fees, medical care, 
paid holidays and renewable contract. 

Please write, in confidence, with full career 
and salary ttetails to Ghassan Yazigi, MSI 
International Limited, 32 Aybmok Street, 
London W1 M 3JL. Please quote Ref: 351 75. 


*’*'*«'<■*- EXECUTIVE RECRUITMENT CONSULTANTS 

LONDON BIRMINGHAM GLASGOW LEEDS MANCHESTER 
071 487 5000 021 454 8864 041 248 7700 0532 4S4757 0161 835 1772 




Coopers 

&Lybrand 



*- *« 9 «* •- '1 '* 

5 ' s % 


•v!’.' " * ' ■■ W-’. • ' 


.... 




Having succosstulty completed me tendering process, RJB Mining PLC has been annouiced as “preferred bidder* for Briish Coal's mining 
operaitorataCBnkdSorditertfrairforihandtoeNorftEast. Sutler to firm! negoWlorelhBysh^ 

7934 fa create (tie largest coal mining business operating fn ffw UK 9,000 emptoyees and a mmow ffloseedho £1 Man. 


Group Treasurer Financial Accountant 

Your role vrffl be to mcnogeihe group's funding requkamerts to Responsibility te to all hood office accounting Including 

minimise casts whilst maintaining an occsf^able aid ds&Kd risk stojitfDfy reporting, consolidations, mortfbty monoBemmU 

exposure praJiB. You wiD menage heir rdafonshlpswtBiflw banks accounting, preparing budgets and plans and undertaking 

whfla reporting to and waking rfosetyvtfftttw Group Ftoance varied ad hoc assignments tor the Group Finance Director. 

Director. Therein be adcfltlondrespans&ilUhr <9 head oflee tar cadi Emphasis is on ensuring Ugh) control omj Jhot effective flnanckti 

handing and fie employee payment taction m Ms wry targe group. systems are hi [ton. 

You should have at lead five yeas' treasury experience wtti partaiar A chstered accountant, you wfl have retevtvtf experience (rtlhe 

Srengtfis In cash and interest rale risk management. Perhaps now cento of a pic. Of great importance btfiBpotenBal to accept 

number hro to a pfctreasutytacttavm must be capable o( escdalngrasponsfii^andmdeabioadcommaiddaswenas 

estabfertng the fixture and in a treasuiYunfi and managing an accounting cortritadon. Ret D493 

edecdvelydalrmdsubstaradcho^aidgn^ Ret D482 

Both tme sartor posttons vAB report Id Ihe Group ftionce Director as Influential members of Ws management town. They are based at 
group headquarters at Harworlh, souffi of Doncaster, and offer on excepfland opportunity to be in at the start of Ms exerting aid Ititfi 
profile business venture. Remuneraflor is negoBabte. 

Please send tort personal and career Odafis, Indutfing carent remuneration level and doyttme tetephone nanba, In confidence to David 
Owens, Coopere & lybrond Executive Resourcing Umfled, 43 Tempfa Row, Birmingham B2 5JT quoting toe app ro priate reference number 
on ball envelope and tetter. 


APPOINTMENTS WANTED 


FINANCE DIRECTOR/OFFICER 

ACA, Investment Analyst (I1MR), 

SFA REGISTERED & MSI(Dl?)-33 

Pour acquisitioa, corporate finance fDoationsX finance manag e m ent and 
strategy planning Broad experience of business and diverse business 
cultures. Exposure to UK, Amer ican and Japanese companies. Seeking 
position within an Investment or growing tmupany, indudn^g start-ups. 
Willing to re-locate. Background Investment Management/ 
Siockbroking Company. 

Fax: 071-^380214 or 
write to Box A5007. Finandai Tunes. 

One Southwark Bridge. London SE1 9HL 


Non-Executive Chairman 

REQUIRED 

for a relatively small but ambitious service-related 
group of companies. We wish to appoint a Chairman 
with a strong financial background and preferably 
with service company experience. 

You will be required for a minimum of 
2 or 3 days per month. 

It you are intsmsted, please write to: 

Mr RJ Unger 

1 Broom HIB, OaMands, Welwyn, Hurls ALjS OSF 















•- -■ -■* SrV* w-. 1 * 


FINANCIAL TDMDES FMDAY 



34 


K-': 






Financial Director 

West Midlands c £50,000 + Car + bonus potential 


Our client is an international market leader, supplying products to 
the O.RM. automotive market. As a “World-Class” manufacturing 
business, the company ascribes it’s to success to an on-going 
commitment to quality engineering, underpinned by positive and 
forward-looking management and astute financial control. Having 
experienced vigorous growth over recent years, the company has 
embarked on an ambitious growth strategy, which will enhance its 
status and position in the industry worldwide. 

In order to strengthen their financial and commercial expertise, the 
company is now seeking to recruit an ambitious Financial Director 
to assise the management team in driving the business forward. 
Reporting to the Managing Director, rhe position will be a key 
appointment in a young and dynamic Boardroom team. Principal 
areas of responsibility will encompass the management of the 
finance function, including ail group reporting, commercial 
accounting, budgets, forecasts, strategic planning and analysis and 
the management of MIS. In meeting the demands of a modem 


business, rhe position will have an extensive comnK-rcial/operational 
brief to fulfil, in being the focal point for issues beyond the remit of 
pure finance. 

Prospective candidates must be qualified accountants ot graduate 
calibre (probably in their late 30s) and able to demonstrate a 
significant track record of achievement in a reputable manufacturing 
based market-led business. Of equal importance are personal 
qualities such as drive and determination in addition to strong 
organisational and leadership skills. Above all, candidates should be 
able to demonstrate energy and commitment and are likely to be 
motivated by the prospect of significant management responsibility 
in an exciting and rapidly expanding business. 

Interested candidates should apply in writing, quoting reference 
202825, enclosing a full CV (including a day-time telephone 
number and details of present remuneration) to 
William Green well at Michael Page Finance, The Citadel, 

190 Corporation Street, Birmingham B4 6QD. 


■-.‘I 


Michael Page Finance 

Specials} m Financial Recruitment 
London Bristol Windsor St Albans Leatherftead Birmingham 
Nottingham Manchester Leeds Glasgow Edinburgh & Worldwide 


ASSISTANT FINANCIAL 
CONTROLLER 


A HIGH-PROFILE INTERNATIONAL RGi-h 


ernr 

Our dient is a leading professional 
services organisation with a reputation, 
for quality and a strong international 
presence. 

Through continued expansion of its 
overseas operations die firm seeks to 
appoint a commercially aware accountant 
co provide financial control and business 

management support to die network of 

international offices. Key aspects indude 
the implementation of consistent and 
effective financial controls throughout the 
organisation as well as die provision of 
high quality financial and management 
information. In the broader context the 
role will involve working dosdy with 
overseas management to assist with the 
opening of new offices as well as to 
provide advice on a wide range of 
business, organisation and financial issues. 

The appointed candidate wffi also support 

D IG BY MORGAA T 

C 5" N S . U L T. 1 N li A,' 'V . 



• c£35K 

[ -.7". • 

i- " 

• . ,:aj 

the Rnandal Controller on wtous .. r-\.\ 

* • * • 


London related projeas. > 

U W . ^ 

* ", . s >4» 1*|i 

Applicants, aged 27-33. shtxdd be 

k.*:. • 


graduate Chartered Accountwits'wlth' at 1 

y • 

. 3 

lease 2 yeara* pose quaJWcattori experience .... 

i : 

C - - 

~ -4 

..ideally gained widi a m^or iritenwttonal 



organtsadoa Proven comiutatication and 

. “ * 

. .... 

team working abifides are essendal as is 

" * ’ . • * 

" " ' ’7 - ' * 

the ability to esrablish qidddy strong 

.-'••• • 

working relationships with management 
at alf levels. Above afl, the position calls 

-.7 . : 

.. 

.... MS4W 

. '.nfwWi 

.- for a high d^ree of eiergy, enthusiasm. 

'7 

and self-motivation and candidates must 

- - ; 


be free to work abroad for short periods. 

•V ■ ; . 


In the first instance please write- 


. -.hr *4 

in confidence, endoring your cv, to 



John Maxted at Djgby Morgan Consulting, 



London House, 53-54 Haymarket 

London SW1Y4RP. Tel 0171 321 0640. 

Fax 0171 930 4261, 

• ' 



Executive Search ■ Selection - Human Resources 







Special Projects Accountant 


West London 


£32,000 + Car 




UK Project Accountant 


M 


Our client is a highly acquisitive c£100 million turnover pic 
with a full London Stock Exchange listing, operating in die 
manufacturing and engineering sectors. Trading in a number 
of International markets, the group has extensive interests 
throughout the UK and USA. The business is profitable with 
a corporate culture that blends large company stability with 
chc dynamism and Hair of entrepreneurial joint ventures and 
strategic alliances. 

Continuing growth throughout its operations in conjunction 
with progressive management has led to the creation of this 
new position within the Head Office. Reporting to the 
Director of Special Projects with dotted line through to the 
Group Financial Controller, your responsibilities will include: 

• Financial audit and operational review of the Operating 
and Group companies. 

• IT systems reviews. 

• Participating in the Group budgeting process. 

• Involvement in the Group consolidation process. 

• Ad-hoc special projects driven by the Operating 
companies or Group. 


The position will enjoy a high profile at Ix.it h Group and 
Operating company level with financial and general 
management. 

Aged late 20's to early 30's, rhe successful candidate will be a 
qualified accountant, probably 2-3 year* post qualification, 
with experience of the manufacturing or engineering sectors. 
He or she must possess both the high level of technical and 
commercial awareness required in this key pivotal role. 
Enthusiasm, drive and excellent communication skills, in 
addition to a willingness to travel, <uc all qualities which will 
determine the success of your application. In return you can 
expect a challenging and demanding environment with the 
prospect of progression through to a Finance Director role 
with one of the operating companies within two to 
three years. 

Interested applicants should send a comprehensive curriculum 
vitae including salary details and day-time telephone number 
to Simon North at Michael Page Finance, Page 
House, 39-41 Parker Street. London WC2B 5LH, 
quoting reference 2 1 1 503. 


TOR 


Central London 

Wirh excensive interests in the UK and Overseas our 
client is an established leading pr opert y investment 
Group with net rental income in excess of 
£100 million and property assets of around 
£1.5 billion. The Group is pursuing an active 
investment policy which has led to the acquisition 
of a number of prime properties within their retail 
and office portfolio. 

Following a detailed review of existing resources the 
UK Finance Director wishes to appoint a Project 
Accountant whose wide ranging responsibilities 
will include: 

• Preparation of detailed financial appraisals of 
proposed acquisitions/developments. 

* Performance monitoring and capital 
expenditure appraisal. 


c £30,000 + Car 


• Business planning and forecasting- • 

• Review of quarterly management accounts and 5 

preparation of monthly Board reports. ; ■ 

• Selection, implementation and development of . 
new accounting systems. • 

The successful candidate is likely to be a graduate 
qualified accountant, aged 26-30, having gained 
2 years experience in a commercial environment. 
You will possess strong analytical skills, have , 
experience with common PC packages and.' dhe . 
ability to communicate effectively on all levels. 

interested candidates should send a comprehensive 
curriculum vitae and daytime telephone number to 
Nfgel Milford, at Michael Page Finance, Page 
House, 39-41 Parker Street, London - 
WC2B 5LH, quoting reference 210267. \ 


CENTRA!. 

LONDON 

c £45.000 

-FsIK 

expensed cut 
-Benefit* 


CM < 




Michael Page Finance 

Spccralno in Fi nan ci a l Recnnmicnf 
Loudon Bristol Windsor St Albans Lcathcifaead Birmingham 
Nottingham Manchester Leeds Glasgow Edinburgh & Worldwide 


Michael Page Finance 

Spedabss in Financial Recruitment 
I nwAiw Bristol Windsor $t Albina Ur ilwiiMil Birmingham 
Nottingham Manchester Leeds Glasgow Edmbmgb & Worldwide 



% 




Divisional Director 
Finance 


Based in the Thames Valley, our client is a major 
UK engineering services company, part of a US 
corporation, with a worldwide customer portfolio 
and an annual turnover of £500 million. 


Financial management Is a priority and a well- 
qualified and experienced accountant is required 
to control the company’s Financial and Project 
Accounting operations. 

As Divisional Director, reporting to the Group 
Financial Director, the successful candidate will 
head a team of 50 and take full management 
responsibility for financial accounting and 
reporting across a wide range of financial 
activities. 


An engineering or construction industry background 
is essential, as is a minimum of 1 0 years’ commercial 
accounting experience at senior level, preferably 
gained with an international organisation. 

Degree educated and CIMA/ACCA or ACA qualified, 
you must possess excellent managerial, 
communication and presentation skills. 

The rewards will fully reflect the importance of this 
key position and will include an executive company 
car and other benefits associated with a highly 
successful, quality-driven operation. 

To apply, please write with a full CV to: Moxon 
Dolphin Kerby, 1 78-202 Great Portland Street, 
London W1 N 6JJ, quoting reference 4594. 

MOXON -^DOLPHIN 


EXECUTIVE SEARCH A SELECTION 


KERBY 


POWERFUL ROLES IN 
CORPORATE FINANCE 


NORWEB 


Package to £40k 

NORWEB bane of the leading eorepmies iu dre North Wear of England and one of ibe highest ranked rcgtand efearidiy cornpanies. As a remit of ment devdofmenta 


- reeking to recruit a numb er af sui abiy qualified ramfifhtrs to the fcfiowing roles> 

Corp orate Finance 


Already dm financial year NORWEB hm lalcen a SOX Hake ai * Wge US power 
project, become die 6re* UK electri ci ty company to be listed in the US and 
c om pleted a major shore buyback p i ugiaiuuic . There are many more challenges to 
be heed in die sphere of corporate finance and we are looking for a young, 
cruhnsiasifo self^nothared kxfividari aith vfsopriate aldH who abo poosema the 
maturity and darity of ca pr ow oo to common Icore at the highest levels, both 
insemaBy and when representing NOhWfch. 


Cor p orate Audit 

The recently upgraded Internal Audit function carries out h*h kvri bmr-n 
reriewa arrow the whole ofNOKWEBS activities which include Reas. CbntaoiQg 
Generation and Telecomms or wefl as the core riearicity boriness. We arc seeking 
fakfiridnsb with highly developed opeuhe in business and ana lytical tedtniqntz 
who ran demonsnme emefent interpersonal and presentation skOs and tire ahffity 
BO influence management «t the most senior level. Appofotees shodd expect to 
move on » ocher roles in the otganisarion within three yem. 



The Candidates 

Cancfidaees (or both the above ides are Badym be grsdoaies with highly developed financial and business cldBs. 

Please apply in writing, enclosing you » curriculum vitae with detada of relevant experience and current salaiy/package 
RJC. Financial Selection. DenzeU House, Da nh a ia Road, Bowdow. Cheshire WAH 4QE. 


Eqa*l caatidtndoa wS be grita to afl ippAa riui j meycarie of tex. acc. ami or dtuiStf. 

R.K. Financial Selection 


NORWEB 


<V*^*NoSnoL^KW 0 d : p 0 E eF 



THE UNIVERSITY 
^MANCHESTER 


The University of Manchester want you to look beyond 

the figures 

Director of Finance 

From c.£50,000 

change and your appointment will be the next step. 


The University of Manchester has a superb reputation 
for research and teaching, offering an extensive range 
of undergraduate courses, and has academic staff of 
international repute. 

The environment of education has altered considerably 
in a very short space of time. Changes in funefing, 
greater emphasis on accountability and the subsequent 
need for a cost effective approach have meant that 
every organisation in the sector must change its 
outlook. 

We have responded very positively to the need for 


Your vision and imagination will give U9 innovative 
financial strategies, directly linked to our objectives. 
Your opinion will influence our strategic plans, while 
your technical expertise will underpin new management 
information systems, which are vital to our strategic 
planning, and ensure careful monitoring and control. 

You will need to be a natural leader with extensive 
experience of senior financial management, and a 
talented manager of change to achieve toe kind of 
results we seek. 


This role is a demanding one but the rewards both personally and professionally are excellent 

For further details and an infomation peck tel: 061 275 2442. 

To apply, write with your career details to Bernard Kellett, Director of Personnel, 
University of Manchester, Oxford Road, Manchester, M13 9PL, by 12th December 1994. 

As an Equal Opportunities Employer, the University welcomes applications from suitably qualified 
people from all sections of toe community regardless of race, religion, gender or disability. 


Paris 






;\tv 

r ’ r • - -ic 


Chief 

Management 

Accountant 


West London 

<^50,000 plus car and 
substantial benefits 


Our client is a significant force In thp r n t a .i . i.. . . , 

turnover of c£8so mjOJJon. n “** Entertainment Industry with a 

has arisen as the 

of 40 people your responsibUWes will be very broad and 

SSSiaaSMjffiJSE-W-d P'aoBtog 

• liaison with Operational areas including thetr Finance teams. 

• Involvement in the achievement or the 
objectives as wefl as ad hoc projects in *id! 

To effectively respond to the above h. 7^^ dwdo P ment 
OTgantearion you wSl be a Ojialified AccoiiSnr ' SS ftlIther within the 
financial management back grou nd obtalnS? 1 ,, h. u? a hroad 

AddWoiwlly you must dearly diSKme enVb ° nm, ™^h^^ 

• Personal and commercial maturity and credibility 

• Tbeabmtywacefoei^issuesKv^^^ . 

• commun ia‘itm sHib. ■ lev<i 

addldoa to welhdevdaped “* 

“<fol ’ 




uow * rimx, 4 i names AVCnUe. wlnrtc’xl ii.j . *1 

.QP, enclosing a recent CV 

EXECUTIVE SEARCH AWD~igT^^ 



> ' 


( 


^ndon 






N 


1 

















Business Consultancy 

Outstanding opportunities for recently qualified ACAs 


6 3 A.... V' 3 * 

■-.-8 1-. S*****A 


... 




-^N 


untant 

’> 0 . 000 + Car 


* Our London practice is looking ro recruit top calibre chartered ncciHintante in the three areas detailed below. You should be highly motivated; have strong intellectual skills; be able to coraraunicace complex ideas to people from ail backgrounds and at all 
levels; and inspire confidence in others. 

* At Arthur Andersen we believe our approach is different- Our people are business sidvlsers, providing creative ;ind innovative solutions to client problems. 

* We appreciate that uur people make the difference, which is why we will pay some of the highest salaries in the profession and ensure your salary’ progression is rapid. All rewaids - salaries and benefits - are linked to performance. Furthermore you will receive 
UK and internationally based training which is second to none, and the freeilom and responsibility to manage your own career. 


Financial Markets 

This specialist division operates in three main sectors; Bunking and Capital Markets; 
Insurance and Pensions; and Ticasury and Asset Finance. You can expect to lead 
teams performing assignments across the financial services sector. Our clients 
include leading UK and International Financial Institutions with whom we work on 
a broad range of business, strategic and technical issues. Assignments can include 
investigations, financial risk management, strategy reviews, treasury reviews and 
technical and regulatory advice. 


In addition to the opportunities in London we are actively recruiting in Rending, 
Cambridge, Bristol, Birming/urm, Nottingham, Leeds, Manchester, Htltiihurg/i and 
Glasgow. 


Financial Consulting 

Tlie Financial Consulting group is experiencing rapid growth. You will work on a 
range of projects in areas including litigation support, company valuations, business 
planning and advice on regulatory and competition issues. Our clients operate in a 
number of industries (in particular utilities and the media) and many of our projects 
require work overseas. 


Arthur 

Andersen 

Arthur Andersen &Gq SC 


Business Computer Services 

Business Computer Services covers advice to companies on the secure and effective 
use of information technology to gain competitive advantage. Our work falls into 
three main areas, namely: Audit, security and control; Data analysis techniques; and 
related systems advice. Clients cover a broad range of industries. You will be London 
based but cun look forward to overseas travel to work on projects worldwide. 


FINANCE MANAGER 


CENTRAL 

LONDON 

c £45,000 

+ Fully 
expensed car 
+ Benefits 


Our client is one of trie U K.‘s largesr publicly quoted companies with an annual turnover in excess of E 10 bilhon and Duiiness interests 
spread worldwide. The company is strongly customer focused and continues to exploit new high growth markets overseas where the 
prospects for prolonged growth are excellent. 

They now wish to appoint a high calibre qualified accountanr to manage a small team whose responsibility is to provide advice and financial 
support on mergers, acquisitions, disposals and joint venture proposals. Repor Dng to the Group Financial Planning Manager your varied 
and high-profile role will include providing detailed briefings to the Board of Directors, whilst assisting the project team with their evaluation 
and undertaking specific responsibility for due diligence. 

The successful candidate will therefore require the following key attributes 
Qualified graduate accountant with first time passes. 

® At least five years posr-qualificabon experience some of which gained within a Merchant Bank. 

large international company or corporate finance department of a top six firm. 

•S- 1 Detailed understanding of the acquisition process and exposure to a wide variety of deals. 

■ Strong commercial focus. 

' i ~ Outstanding inter-personal skills combined with the ability to liaise at the most senior levels both internally and externally. 

Your role will necessitate working as part of a small, highly committed team addressing key business issues. You will be required to 
undertake overseas travel, often as the sole finance representative. Career prospects within the group are outstanding with opportunities 
for progression both within the UK or overseas. 


Interested applicants should write in confidence to Andrew Lhresey. quoting reference number 2101 at Nicholson 
International (Search and Selection Consultants). Bracton House. 34-36 High Holborn. London WCIVfiAS. Alternatively 
fax your details on 071 404 8f 28 or telephone 071 404 SSOI for an Initial discussion. Our client is an equal 
opportunities employer. 


m 


Nicholson 

International 


Germany Belgium 


Czech Republic Hungary Romania 


UK — 


Australia 




International Tax 
Manager 


Paris 

Our client is a recognised leader in the field of global 
telecommunications and information processing 
applications. The Company operates one of the 
world’s largest private data communication networks. 

An outstanding opportunity has now arisen for a 
brighr intemarional tax adviser to join the 
company's dynamic Group Tax Affairs team located 
in Paris. Reporting to the Group Tax Manager, the 
successful candidate will be expected to work 
autonomously and be a self-starter. As a manager 
responsible for the tax matters of a range of projects, 
your key responsibilities will include the ability to 
work on a wide variety of tax issues, 
including both direct and indirect taxes 


£ Excellent 

worldwide. Candidates should be graduates with 
three to five years post qualifying international tax 
experience in an accountancy firm, international 
law firm or in commcrce/industry. in addition to 
strong analytical and technical skills the successful 
candidate must have a confident and direct 
approach and an ability to work well within a small 
team. Knowledge of French/ocher languages would 
be an asset. 

Interested applicants should forward a 
comprehensive CV and salary expectation, quoting 
refi TM 10869, to Thierry Mon t^ca tine, Michael 

Page, 3 boulevard Bineau, 92300 Levallois- 
Perret, Cedex, Paris, France. 


Michael Page International 

Inrenwkinsi Recruitment O x u uln uiM 
London Pluii Amsterdam Dimektorf Frankfurt Hong Kona Sydney 



PERSONAL ASSISTANT 
TO FINANCE DIRECTOR 


London 


*30-35,000 + car 


A household name with brand-leadli* food products worldwide, out client has an exceptional 
orowth through innovation and new product development. Increasing market shore In 
rSSv«mP«Wve environment With an exceptionally welhstabltohed martaUngbuc, die 
wJSng ftirthcr expansion through a programme of strategic ocqubtiona. The Finance 
SolStaB of *0 acquisitive process, seeks a hlghfy motivated young accountant to 
become Involved In all aspects of his work. 

An umnuallv varied and Wgbl>roflte rote the Assistant wffl work akxigskk the 

cranpantaand (olnt venture opportunities, carrying our pre- and post-oequteitian 

10 d ^^noto^^dhtMh^HP pocc * aca - Working with quality action icwith, the rote will offer 

Uivohemen Directors In the UK and the US parent company. 

^ presentation skills Mid excellent Interpersonal ubtllty are vital 

COrtfldc ^^-^ I* 'Ikdy to be a newly or recently-qualified ACA. probably 

\S.hnrttdme passes gained in a Ws 6 practice. Applications from outstanding 

«*ed BvWcncc ,rf “P ccUd P"* 5 ™ woril wl " * an 

ml oncer rcaml m «mlW. 

**"""? nr exposure ofltawl by this position provides the opportunity to move an 

The Icvdaodvanciy o^xiwntor finance role within the group after IH-2-1 month*. 

.to other buai - 971.329 4649 or during evening* or weekends OKI-407 140R 

EE5B5SK1 CT 


;\l Pl RWK K 
(ONSFl/MM. 


MARCH A NKUCnON 

LONDON RC4M TNSmmtQNIli 07 M® 4649 PAX* 071-329 4677 


APPOINTMENTS 

ADVKRnsaNG 

. appears in the .. . 
; UK edition . 
every . , • • , 
. Wednesday 
* Thursday' • 
and ih.the. 
International edition 
every Friday / 

For further . ‘ 
information 
please call: 

Andrew Skarzynski 
oh 

+44 71873 4054 

Philip Wrigley. on 
+44718733351 

Joanne Gerrard on 
071 873 4153 


APPOINTMENTS WANTED 


EXPERIENCE , TENACITY, ENERGY 

Commercially astute Financial Executive with 
international experience and 20 years background 
in Financial Services, IT and Consulting. 

Lateral thinking change agent. 

Available to take on challenging new assignments. 

Write to Box No. A2I92, Financial Times, 

One Southwark Bridge, London SB! 9HL 


Business Consultant, MBA 

10 years experience in Acuuuntancy/Financial Analysts. 
European & E/Europo experience. 
Systcms/PC literate. Seeking VC/VO position 
In company start-up or small growing company 
(T/O £5m). Willing to relocate. 

PIcaN WllK n»ai AJIM 
PlnneMI Tlnuii, Uni Snqihmrk Brld|0 
i4iiihMi hh i uni- 


COMMERCIAL F.CA 

For Acquialtian/Dlapoaul, Refinancing 
and investigation Asa ion men to. 

QuoUkI He Board tovwl expertaneu. 

(food communicator, flexible bunds on style, 
Avallnble poitfibl) time bnria In linden A South BuuL 
Phone/Fax 0737 833176 


Interested applicants should contact Matthew Leedham at Michael Page Finance, 
Page House, 39-41 Parker Street, London WC2B 5LH, or telephone him on 
071 331 2000. 





INTERNATIONAL FINANCE 
OPPORTUNITIES 

The world's most powerful trademark and the world's only truly global soft 
drink production and distribution system. The Coca-Cola Company is 
headquartered in Atlanta, Georgia, U.S.A. 

Several exciting opportunities have arisen for qualified Chartered 
Accountants, or the equivalent, to join their dynamic international finance 
team. Assignments vary from approximately one to three months in length, 
and consist primarily of audits and integrated business process reviews. 

These are varied roles which involve travelling, usually in teams of 2 or 3 
to : 

• Europe (Diisseldorf, Vienna, Zurich, Paris, Rome, Milan, Warsaw, 
Istanbul, Prague, Moscow, Budapest) 

• Africa ffohaxmesburg, Nairobi, Abidjan) 

• The Far East (Tokyo, Bangkok, Hong Kong) 

• The Middle East 

• Australia (Sydney, Melbourne) 

• South America (Rio de Janeiro, Santiago, Buenos Aires) and 

• North America (Houston, Atlanta) 

You will need ; 

• 4-8 years' business experience in public accounting or commerce 
(finance, manufacturing or marketing) 

• Fluency in English and at least one other language 

• Strong technical, analytical and organisational skills 

• Previous leadership and team building experience and the ability 
to coach and train staff 

• Strong written and oral communication skills 

• Ability to work in a dynamic and cross-cultural environment 

• Ability to commit to 100% international travel for a minimum of 
three years 

If you can meet the requirements of this challenging role, please telephone 
or write to Jeremy Williams, quoting reference JW/CC. 

All enquiries are confidential. An Equal Opportunity Employer. 


L L O y D MORGAN AMoo Homo 64-76 Bnqs w oy London WC2B 6AH 
~ — T ~— — — ; — ’ Telephone : 44.7 L404JS91 Fax: 44.71.430L2393 

flMIuUI MHl omhUH nwulMlM iMWlmta 


Relationship Manager 

Asia/Pacific Securities Custody Services 


One of the largest international banks, 
our client is now looking for a 
Relationship Manager to maximise 
the growth and profitability- of its 
Asia/Pacific securities custody 
services throughout the UK and 
Europe. 

It is a role that calls for initiative, 
creativity, commercial acumen - 
and the ability to develop business 
relationships with senior executives 
in the world’s largest banks and 
securities houses. 

■Based in London, you will Identify 
the needs of prospective and existing 
customers and match those needs 
with appropriate solutions and 
services. In addition to providing high 
standards of customer care, you will 
continually monitor and assess 
competitors' products and services * 
using your expertise to anticipate 
market developments and develop 
strategies to take advantage of them. 


Along with sound banking and 
sates expertise, you must have 
a background in relationship 
management and a thorough 
knowledge of the securities custody 
sector - ideally relating to the 
Asia/Pacific markets. You must 
also be able to act independently, 
using your own initiative and 
judgement in our client's dynamic 
and increasingly competitive 
environment. 

For the right person a competitive 
package will be offered including 
full banking benefits, and the chance 
to contribute to one of the fastest 
expanding services within nur client's 
organisation. 

To apply, please write with a full GV 
to Moxon Dolphin Kerby, 1 78-202 
Great Portland Street, London WIN 
AJJ, quoting reference 4595 and stating 
any companies to whom you do not 
wish your CV forwarded, 




KXMVnvil IMRSFI A MUOTKW 









36 


miVANniAl.TIMES 


FRIDAY NOVEMBER 


25 1994 


COMMODITIES AND AGRICULTURE 



Steichen backs ‘mini-CAP’ for eastern Europe 


By Deborah Hargreaves 

Mr Rene Steichen, the 
European Union's agriculture 
commissioner, set the scene 
yesterday for a heated debate 
on the future of the common 
agricultural policy when he 
endorsed a “mini-CAP” to help 
eastern European farm indus- 
tries. 

He told a conference that he 
favoured extending some farm 
price support mechanisms to 
countries in eastern Europe to 
revive their agricultural sec- 
tors and enable them to join 
the EU. 

But Mr William Waldegrave. 
UK agriculture minister, said 
that such a plan “would be fly- 
ing in the face of reality”. He 
said It would be unwise to 


encourage eastern European 
countries to taka decisions 
based cm the fact that the ElTs 
pricing policy would eventu- 
ally be extended to them. 

Mr Steichen said that by Ax- 
ing price supports at fairly low 
levels, a so-called “mini-CAP” 
for eastern Europe could be 
accommodated within the EITs 
current farm budget guide- 
lines. This could Involve firing 
support prices at $5 a tonne 
above world rates - lower than 
EU internal prices. 

Speaking at a conference 
organised by Reading Universi- 
ty's Centre for Agricultural 
Strategy, Mr Steichen said that 
price supports would allow 
farm industries in eastern 
Europe to converge with those 
in the EU over the next 10 


years. 

"Without a certain price sta- 
bilisation, there is no certainty 
that it would be possible to cre- 
ate a stable environment allow- 
ing farmers to plan far the long 
term or to encourage them to 
invest and produce for the 
market,” he said. 

Mr Steichen does not believe 
the EU will ever find the politi- 
cal will to abandon the CAP In 
order to enlarge to the east. 
But he suggested that there 
could be a progressive lower- 
ing of internal EU price sup- 
port over the next decade as 
EU farms become more effi- 
cient and increase in size. This 
would allow convergence 
between east and west within 
the framework of the CAP. 

However, his suggestions are 


unlikely to satisfy some of the 
CAP’S harsher critics. Even 
within the commission there 
are differing views over the 
evolution of agricultural policy 
in a huger union. 

Mr Waldegrave called far a 
“root and branch" reform of 
the CAP to make it possible to 
extend a slimmer version of 
the current policy to eastern 
Europe. 

“We need to establish the 
right framework for a CAP 
which would be appropriate to 
the needs of an enlarged EU. 
The pressures are compelling. 
And the status quo is not an 
option," he said. 

Mr Steichen said that a 
" mini CAP” for eastern Europe 
would not cost much more 
than Ecu700m This could be 


funded by the existing Phare 
programme, which channels 
around Ecu20Dm a year in aid 
programmes to eastern Europe. 
It could also be met from 
money saved on the current 
Ecu36bn farm budget, which 
Mr Steichen said will be under- 
spent by around Ecu3.6bn this 
year. 

"If we pay for the whole 
plan, the EU would have to 
Increase Its aid, bat l can imag- 
ine a joint venture with these 
countries with a lowering of 
our support and a raising of 
theirs,” he said. 

He implied that cost objec- 
tions were short-sighted: “If we 
want to have peace in the East, 
It has to cost us something”. 
Mr Waldegrave agreed that if 
price support for eastern 


Europe could be met without 
additional - spending, it might 
be possible to agree it, but he 
said It would be extremely dif- 
ficult to justify any increase in 
spending in coming years. 

Mr Waldegrave said there 
would he extreme pressures far 
reforming the CAP again over 
the next five to 10 years. “It is 
likely the current MacSharry 
reforms won’t automatically 
run into the buffs* in. th» next 
IS months.” But he said 
mighty pressures for reform 
would be building in 1996. 

Mr Steichen also wants the 
EU to advise eastern European 
co untries on setting up Tar|rf 
banks In order to establish a 
proper market for farmland as 
a way of modernising their 
agriculture industries. 


De Beers and Namibia reach accord on diamond operations 


By Roger Miaray In London 
and Marie Suzman 
bi Johannesburg 

De Beers, the South African 
group that dominates the 
world diamond business, yes- 
terday secured its position in 
Namibia for the next 25 years 

— Or Until Hm riiflmnnrfa nm 

out - by effectively handing 
over to the government there 
50 per cent of its subsidiary, 
CDM. 

The company will be recon- 
stituted as Namdeb Diamond 
Corporation in which De Beers 
amt the Namibian government 
will each own 60 per cent The 
government will not be putting 


Russia continued to “undermine the delicate 
equilibrium and confidence necessary for the 
diamond industry,” said Mr Julian Ogilvie 
Thompson, De Beers' chairman, last night. 
“Competing interests Iin Russia] have not 
adhered to the necessary disciplines and have 
been leaking diamonds on to the open market 


in contravention of the contracts with the Cen- 
tral Selling Organisation,” he complained. This 
placed Russia "in the role of competitor with 
the other diamond producers”. Bnt De Beers 
bad dealt with similar problems in the past 60 
years “and on each occasion the CSO and the 
industry have emerged stronger than before”. 


any capital into the new organ- 
isation. 

Mr Sam Nujoma, Namibia’s 
president, said yesterday that 
his country would, via tax and 
dividends, collect additional 
revenue from the country's 
diamond operations. For the 
present financial year Namibia 
has buifaetted to collect 
US$56m in taxes and duties 


flrom these operations, based 
on depressed 1993 earning s. 

Nevertheless, the signs are 
that De Beers is pleased with 
the deal, completed after two 
years of tough negotiations 
and similar to its arrangement 
with the Botswana govern- 
ment 

The accord signed in Win- 
dhoek gives De Beers: 


• The assurance that it will 
be able to continue to exploit 
its existing on and off-shore 
assets in the country and that 
its renewable prospecting 
licences will protected; 

• A guarantee that all of 
Namdeb's output will be mar- 
keted through De Beers' Lon- 
don-based Central Selling 
Organisation, which controls 


80 per cent of world trade in 
rough (uncut) diamonds; 

• Retained control of De 
Beers Marine, the company 
that provides the technology 
and equipment for off-shore 
riiamnriri mining . Deb marine, 

which last year, in terms of 
carats, accounted for about one 
quarter of the diamonds CDM 
produced, will have only a con- 
tractual relationship with 
Namdeb. 

Also, COM’s part-interest In 
the Navachab gold mine, near 
Karibib, will be retained by De 
Beers under the accord. 

Revenues from diamonds 
account for 11 per cent of 
Namibia's gross domestic prod- 


uct and 34 per cent of its 
export earnings. 

Mr Nujoma said yesterday: 
“No longer will Namibia’s dia- 
mond industry lurk in the 
darkness of suspicion and 
strike; we are now forging an 
equal partnership subject to 
the disciplines of both public 
scrutiny and the . private 
market” 

CDM, which moves huge ton- 
nages of beach sands to find 
most of its diamonds. Is by no 
means De Beers' largest pro- 
ducer. Its output, down from 
1.5m carats in 1992 to Llm last 
year, is overshadowed by Bot- 
swana’s 14.7m carats, down 
from nearly 1fi m 


European potato prices double as production falls to five-year low 


By Deborah Hargreaves 

European potato prices have 
doubled in recent months as 
production has fallen to Its 
lowest level for five years, 
according to a survey by the 
UK’s Potato Marketing Board. 
Output for 1994 is forecast to 
be 5m tonnes lower than fas t 
year at 42.3m tonnes following 


dry weather in the summer 
growing season. 

The drop in production and 
poor quality of part of the crop 
has taken prices in the Nether- 
lands to the equivalent of £185 
to £192 a tonne for processing 
quality potatoes - up from £55 
a tonne fast year. 

The board’s provisional fig- 
ures show that all European 


Union countries have seen a 
drop in production except for 
Ireland, Spain and Greece. The 
dry weather also affected qual- 
ity of 40 per cent of the crop in 
the Netherlands, Belgium ami 
parts of France. 

Quality problems could lead 
to an even greater reduction in 
the crop as potatoes fail to 
meet storage standards. Potato 


traders estimate that some 5m 
tubers could fail quality tests. 

In France, prices have dou- 
bled to £118 a tonne from the 
same period last year and in 
the UK the average price has 
increased to £146 a tonne from 
£69 a tonne in November 1993. 

“Consumers are likely bo see 
some increase in price, but we 
don’t know how much of these 


rises will be passed on and 
potato consumption is not usu- 
ally affected by higher prices 
as they are regarded as sta- 
ples," said Ms Diana Rees at 
thePMB. 

Potato futures prices have 
soared indicating traders’ 
expectation that wholesale 
prices will Increase farther. 
Futures prices in the Nether- 


lands are showing a price of 
£320 a tonne for April delivery. 

Britain's crop has not been 
so badly affected by the 
drought as almnst half the pro- 
duction area is irrigated, 
against 30 per cent on the con- 
tinent. Germany hmn hit 
particularly hard with output 
faffing from 12 Jtm tonnes last 
year to 9.3m tonnes. 


Australia’s biggest LNG project overcomes setbacks 

The North West Shelf plant’s major expansion is close after a year of delays, writes David Lascelles 


T he files and the gales 
have descended on this 
remote coastal settle- 
ment in the Australian north 
west as spring turns to sum- 
mer. 

The landscape is hard and 
parched: ridges of shattered 
red granite with the occasional 
gum tree and kangaroo are the 
only sights provided by nature. 
But amid the desolation stands 
a giant stack of shining tubes 
topped by bright orange flares: 
the North West Shelf liquefied 
natural gas plant. 

Just five years old, the site is 
the largest resource project of 
its kind in Australia, with 
Investment of over fAJLObn 
(£4.85bn), and it is about to 
undergo further expansion 
after a year of frustrating 
delays. 

The 6m tonne-a-year plant 
was built in 1989 to service the 
gas fields which had earlier 
been found 125km offshore. Up 


COMMODITIES PRICES 


tin now, only one field. North 
Rankin, has been operational, 
producing over 40m cubic 
metres a day. Fart of the gas is 
piped to Perth and other 
domestic consumers. But most 
of It is liquefied for export, 
mainly to Japanese electric 
utilities. 

The plant was expanded 
from two trains to three in 
1992. and over the past year or 
so, the bottlenecks in the pro- 
duction lines have been 
relieved. Output is now up to 
7m tonnes, and will eventually 
reach 7.5m when the overhaul 
is complete. An eighth LNG 
carrier is being added to the 
fleet of seven which ply the 
10-day route up to Japan. 

However, next January will 
see the completion of the major 
engineering feat that lies 
behind the plant's next stage of 
growth: the start-up of produc- 
tion from the Goodwyn field to 
the west of Rankin. 


Goodwyn was supposed to 
start last year. But It was 
found that the piling tubes 
which had been driven deep 
into the ocean floor to support 
the platform had buckled, pre- 
venting the piles themselves 
being inserted into 11 of the 16 
points that had been prepared. 
Special jacks had to be 
designed and forced through 
the 4ft diameter tubes to 
straighten than. The work was 
enormously expensive and 
time-consuming, but it was 
successful. The piles were com- 
pleted and the platform put in 
place. Most of the repair cost of 
(A330m was recovered i from 
insurance. 

Engineers now expect Good- 
wyn to start in January. It has 
the capacity to produce 25m cu 
m of gas a day. But just as 
valuable Is the 60,000 barrels of 
condensate which it is expec- 
ted to produce as welL 

The NWS LNG project is a 


complex joint venture shared 
equally between six compa- 
nies: Woodside. Shell, BHP, 
Chevron, BP and and a com- 
pany jointly owned by Mitsubi- 
shi and Mitsui. Since Shell also 
owns one third of Woodside it 
is effectively the first among 
equals in the partnership. 

T he confidence with 
which the owners are 
expanding the operation 
is based on forecasts of 
steadily rising demand in the 
Pacific area. But though the 
Japanese utilities have been 
willing to take delivery of addi- 
tional cargoes of LNG (espe- 
cially fast summer when excep- 
tional heat boosted demand for 
air conditioning) they are not 
able to absorb all the output 
The challenge for the plant 
therefore, is to find a dditional 
buyers for the surplus. 

So far, one cargo has gone to 
Korea, and several more to 


Spain. Woodside predicts that 
demand for LNG in the Pacific 
area will double from about 
50m tonnes a year to around 
100m tonnes by early next cen- 
tury. However, there is a grow- 
ing number of suppliers in the 
region, including Malaysia, 
Brunei and Indonesia where 
Bontang. the world's largest 
LNG plant fa about to undergo 
expansion as welL 

A further difficulty is that 
the Karra tha plant was origi- 
nally designed with $25-a-bar- 
rel oil In view. The fact that 
the price fa now languishing 
several dollars below that fa 
putting pressure on tha plant's 
margins, and delicate negotia- 
tions are currently proceeding 
with the Japanese to renegoti- 
ate the selling price. 

According to Mr Cyril 
Huljsmans, tha plant manager, 
the company is Dying to 
squeeze $100m a year in costs 
out of the operation in order to 


ease the pressure an margins. 
The HghtrwRR of the margins 
also means that the plant can- 
not afford to mfes a single ship- 
ment, each of which fa wrath 
810m. So far the regular three- 
day loading schedule has not 
been missed 

There fa a degree of caution, 
therefore, over talk of adding 
capacity to the Kanatha plant 
- the site was designed to 
accommodate two farther 
trains. Enlarged capacity 
would require a second pipe- 
line in from the gasflelds and 
other expensive infrastructure, 
which would boost the total 
cost close to (AL8bn, accord- 
ing to Mr Bill Brehaut, the 
technical manag er. 

The project would also have 
to firm up more reserves, 
though with an active explora- 
tion programme afoot and 
some promising finds already 
noted, that may already be 
happening. 


BASE METALS 

LONDON METAL EXCHANGE 

(men from Amalgamated Moral Ttacfn# 

■ ALUMINIUM, B9.7 PUWTY (* per ItaWj) 



Cadi 

3 lull is 

Ctaaa 

1942-3 

1948-9 

Previous 

1962-3 

1987-8 

hfigMow 

1886 

19605/1008 

AM Official 

19S5-6 

16505-60 

KoftJ dOM 


1837-8 

Open kit 

256.920 


Total daily turnover 

64.207 


■ ALUMINIUM ALLOY (t per tome) 

Ckae 

1866-70 

1897-9 

Previous 

1870-80 

1900-05 

Hgh/taw 


1910/1895 

AM Official 

1880-5 

1896-900 

Kerb ctosa 


1890-900 

Open int 

2 jaaa 


Total daty turnover 

797 


■ LEAD (S per tonnaj 


Close 

6725-35 

690-91 

Previous 

587.6-8.6 

885.5-8-0 

MgMow 


691/B8S 

AM Official 

671-2 

688-9 

Kara dose 


891-2 

Open Int 

44517 


Total daily turnover 

5^85 


■ NICKEL (S per tonne) 


Ctose 

7615-25 

7740-45 

Previous 

7675-86 

7700-05 

HlgMow 


7760/7680 

AM Offldal 

7615-25 

773040 

Kerb dose 


7755-60 

Open Em. 

66,765 


Total daBy turnover 

14^37 


■ TW (S per tome) 



Ctose 

6130-40 

6210-20 

Previous 

01KMO 

6220-26 

Hgh/tow 


62406210 

AM Offldd 

6135-45 

8220-2S 

Kerb dose 


6210-30 

Open Int 

23,380 


Total daSy turnover 

2575 


m zwe, special high pads ($ per tome) 

Close 

1155-6 

1181-2 

Previous 

1143-4 

117015-1.0 


1153 

1184/1187 

AM Offldal 

1152-3 

11 77-7 J 

Kerb dose 


1179-60 

Open InL 

111,411 


Total dafly turnover 

18,745 


■ COPPER, grade A (S per toms) 


Ctose 

2856-fl 

2828-6 

Previous 

28W-4 

2780-2 

HgMow 

2854/2850 

2838/2776 

AM Official 

2853-4 

2817-18 

Kerb dose 


2827-38 

Open InL 

236.769 


Total da9y turnover 

54^97 



Base metals continued 

■ LME AM OfficW C/S rate: 1.0825 

me Ctoatnfl £/» rate: 1.0825 

Spot 1A615 3nflK 1SS1B BdAx 1.3606 gatet 1.5607 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
(Prices supplied by N M RotftacMM) 


GRAINS AND OIL SEEDS 

■ WHEAT LCE (E per tonne) 


QcMProy col) 
Cfcoe 
Opertng 
Morning (be 
Afternoon fix 
Day’s Hfch 
Day's Low 
Previous cloas 
Loco Ldn Mean 

1 month 

2 months 

3 months 

SOvor Ffac 
Spot 

3 months 
6 months 
1 yw 
Gold Cotes 
Krugsnand 
Maple Loaf 
Now Sovereign 


S price E fx*iv. 

38430384.70 

384.60-385.00 

384.40 248.047 

384.30 245.883 

384.80-38820 
384.10-384^0 
384yB0-38S20 

Gold Lwxfttg Rotes (V* USS) 

4.88 6 m onth s 5.44 

5.09 12 months 5.82 

■__5.1B 

pftray oz. US as equfv. 
329.70 51&00 

334.56 522JS5 

33580 63055 

3 SZJS 5 549.45 

S price e equhr. 

386-389 246-2S0 

395-0S-3S7.50 

90-03 58-81 


ENERGY 

■ CRUDE OS. IPS 



Ss8 

Dtya 


PPM 



price itep 

Med 

Lm tat 

M 

Jaa 

17.18 

+OW 

17.18 

(7.01 93,459 11281 

M 

11S8 

-am 

1099 

1888 39,609 

2288 

Bar 

1689 

+004 

1086 

1072 10581 

1.693 

KM 

18.78 

. 

1078 

1063 0785 

331 

mt 

18J7 

+6.12 

ion 

1087 4,135 

813 

Jh 

10.72 

+004 

- 

- 0276 

- 

Total 




T70832 10464 

■ GAS 00. PE (Stan) 



One 

15223 

+073 

13225 15125 34JM0 

3.114 

tea 

154.75 

+050 

154.75 

15X75 25/47 

2/70 

Feb 

1S62S 

+050 mso 15050 10781 

983 

■a- 

156.75 

+030 

1S&73 1S6JW 10481 

417 

** 

i6uo 

+025 

15520 15000 3,478 

9 


15480 

+050 15480 18480 839 

5 

Total 




99/40 

7300 



Sen 

(tan 



Oam 



prtes ctaege 

"W 

LOW 

tat 

Vta 

Jn 

10050 

-030 

105.75 

10530 

1369 

15 

Mar 

107.45 

-050 10730 10730 

1351 

101 


109.45 

•055 

10935 10040 

1399 

38 

M 

11120 

■050 

• 

- 

130 

. 

tep 

95.15 

+095 

- 

- 

84 

- 

Rif 

9040 

- 

9630 

9030 

158 

- 

Total 





ora 

ore 

■ BAHLEY LCE |E per tonnta 




tee 

102.73 

-035 

10330 

10273 

473 

23 

Mm 

104J5 

mso 

105.00 

10476 

139 

It 

taw 

10635 

■045 

- 

- 

44 

- 

Sap 

S33S 

-025 

. 

- 

30 

- 

Hot 

94.75 

-035 

. 

- 

BI 

- 

Total 





787 

34 

■ POTATOES LCE (E/tonne) 




Star 

271.5 

- 

. 


. 

- 


276.5 

+63 

2800 

2743 

1.178 

184 

H<V 

283 3 

+53 


292.0 

1 

1 

Jon 

2500 

- 

- 

- 

. 

- 

TaM 





1,177 

185 

■ FREIGHT (BffTEX) LCE (SlO/Index point) 


Hov 

1908 

+17 

. 

- 

240 

. 

Dee 

1925 

+13 

1940 

1915 

378 

IB 

Jse 

1829 

+18 

1830 

1820 

1.132 

97 

** 

1733 

+14 

1735 

1725 

1.069 

82 

Jot 

1510 

+13 

1510 

1510 

148 

2 

Oct 

1G33 

+15 

- 

- 

17 

- 

Total 

CMa 

RW 



Mb 

198 

Bfl 

1898 

1(84 





SOFTS 






M COCOA USE (E/tarme) 





Sen 

Dan 



Oftad 



prim 


tan 

tat 

VU 

Bee 

988 

•8 

970 

965 16327 1,132 

Iter 

083 

-8 

985 

980 42.168 1321 

Mqr 

S81 

■4 

993 

967 18.015 

122 

tel 

1000 

-5 

898 

988 

8343 

20 

sw 

1008 

-4 

1009 

1008 12309 

23 

IMG 

1022 

4 

1023 

1823 10216 

70 

Total 




1124*8 2322 

■ COFFEE LCE(£/tonne| 





Softs continued 

■ Nor PREMMM HAW SUGAR LCE (centeflba) 

Sea Day's Otm 

Price change Ngh lw M W 

tea 13JJQ .... 

Mv 1470 » 

Me* 1479 - 880 

tel 1454 - 450 

Total 1,400 

■ WHITE SUGAR LCE grtonno) ___ 

MPT M +450 40850 40450 11.056 682 

May 40250 +4,70 40350 40040 4502 224 

Am 38250 +440 39100 38900 3786 140 

Od 362 SO +4.30 36100 358.00 15 n S3 

Ok 36050 *420 100 

Mar 36000 +400 . 199 

TOW 20,748 1,129 


LONDON TRADED OPTIONS 

Stiflae price S tonne 


LONDON SPOT MARKETS 

■ CRUDE OH. ro8 *>er bamol/Jsn) w- 


-Cate Pda— - 


■ ALUMMUM 


(907%) LME 

Fob 

May 

Feb 


lonn 

118 

142 

74 

115 

1950 _ 

91 

119 

98 

142 

2000- — . 

71 

99 

127 

170 

■ COPPER 





(Grade A) LME 

Feb 

May 

F(*j 

May 

2750 

158 

110 

70 

159 

2800 

130 

88 

91 

188 

2850 

105 

82 

118 

219 

■ COFFS LCE 

Jen 

Mar 

Jan 

Mar 

3000 

139 

207 

150 

259 

3050 „ 

119 

189 

150 

291 

3100 

101 

173 

212 

325 

■ COCOA LCE 

Dec 

Mar 

Dec 

Mar 


8 

64 

3 

29 

875 

- 

50 

22 

40 

1000 

118 

39 

S3 

54 

■ BREKT CRUDE PE 

Jan 

Apr 

Jan 

Apr 

1600 

- 

. 

7 

50 

1830 — 

- 

. 

19 

. 

1700- 

- 

- 

27 

- 


HM 

Jan 

Iter 

Bn 


Tetri 


2945 

+95 

2944 

2918 

167 

47 

2989 

+118 

2990 

2940 

10324 

1.131 

2948 

+85 

2881 

2920 

8387 

1313 

2824 

+81 

2935 

2906 

4J939 

464 

2906 

+83 

2915 

2898 

1.405 

219 

2890 

+110 

2905 

2880 

23M 

in 





20797 

3M 


Wool 

Prices at auctions tree week were genera* 
ten, and wool wea In fuffibartty good demand 
tor durances to the trade to bs good. Thera 
wea no dear rise In toe market, rammer, and 
wtthom thta Incentive burinesa Is wary quiet 
The usual pattern Is of better business In 
November, but this month has been quiet 
throughout Europe. Order boohs were (Bed 
quite tar ahead two or three months ago. also 
utetuely timed, so there Is no special anxiety 
about acMy at present 


Or tool 

S16.00-6.06z 

+ 0.12 

Brent Blend (dared) 

*16.99-7.01 

+0.13 

Brent Brand (Jan) 

*17.14-7.16 

+0.13 

W.TA ( 1 pm eat) 

- 

- 

■ OIL PRODUCTS NWE prompt daNvary CIF (taring 

Premium Gasoline 

*173-175 

-1 

Gas CM 

*163-155 

+1 

Heavy Fuel OB 

*102-103 

-1 

Naphtha 

*178-182 


Jet fuel 

$172-175 

+1 

Otaoal 

*150-181 

+1 

Mntaum Agui. TtL London (07!) 389 0782 


■ OTHER 



Gold (per troy raft 

*384.60 

-050 

Silver (par (njy aztf 

51616c 

- 1 J) 

Ptatbmm (per tray at) 

*410^0 

+015 

Modum (per broy ozj 

$163.75 

-1.25 

Copper (US prod) 

135.0C 

-3.0 

Lead (US prod.) 

40.75c 


Un (Kuala Lumpur) 

15.49r 

-020 

Tin (New York) 

28060 

-S.O 

Cattle (Sve waighQt 

naoop 

+0^7* 

Sheep (be walgMtt* 

lOS.BSp 

fiJr 

Ptga (live welghQ 

7&36p 

+056* 

Lon. day sugar (raw) 

$355.7 

+4.4 

Lon. day sugar (wte) 

S415J 

+3.0 

Tree & Lyle export 

23420 

+6X1 

Barley (Eng. teed) 

Unq- 


Mateo (US No3 YoSow) 

ei32J)v 


Whew (US Dark Nonty 

£1 65.0V 


Rubber (Dec)V 

M»ip 

+1.25 

Rubber yan)f 

' 8025p 

+ 1 J 0 

Rubber (KLRSSNol JuJ) 

346.0m 

+ 1.0 

Coconut 08 (PhK)S 

$71(L0q 

-5.0 

Pajrn OS (M*ay.)§ 

*720 Ou 


Copre(PM)§ 

S464.0q 

+ 10 XJ 

Soyabeans (US) 

£187.0 

+ 2.0 

Cotton CMtodCA' index 

TOOOC 

+0,60 

WooBwn (84a Super) 

46Qp 


£ pv tsnna wlra txhamlw ctated p pancaAg. 0 evnta/b 

1 unggtahq, m MUayatan cwitaflp. j tentatar. v NoriOnL. u 
Ora x tea, g Qaratan f Iordan Pfwiicd. § Cff HaBte- 
ram. 9 Busan markat dm. * Stoap pita wataht (drat). ’ 

Change an vm* 0 Pitc+a are for proteua ray. 


INDICES 



■ REUTERS (Bass 18/W31=»10C? 


Now 24 Nov 23 

montt ago yur ago 

21303 21208 

2104,7 1827b 

■ CRB Rrtus* (Bess 1967-100) 



Caribbeans defepd 
EU baniatoa 
against US criticism 


By-Canute James , .. 

In Kingston, Jamaica 7 

Caribbean banana producers 
have told the US trade repre- 
sentative that there isno merit . 
in riaima from US producers 
that the European Union's 
banana import regime discrim- 
inates against US companies 
and represents unfair trade 
practices. ‘ . • 

Responding to -charges from 
Chiqitita Brands International, 
which produces banana in 
Latin America, and I he Hawai- 
ian Banana Industry Associa- 
tion, the Caribbean producers 
said that, contrary to the 
claims, shipments by Latin 
American countries and US 
companies in that region bad 
hpon increasing. 

The charge of discrlminatioxi 
was filed under Section 301 of 
the US trade act, and was sup- 
ported by claims that the EU*s 
import regime, implemented in 
July 1993, discriminated 
against fruit from Latin Amer- 
ica. 

The import regime gives spe- 
cial access to exporters in the 
African, Caribbean and Pacific 
group, comprising about 70 for- 
mer European colonies, which 
has a trade treaty with the EU. 

“The message we are send- 
ing to the US trade representa- 
tive in reply to its request fra a 
response to the charges. Is that 
there is no merit In the claims 
wmtfe by the U&owned banana 
companies," said Mr Owen 
Arthur, prime minister of Bar- 
bados, and nhairwian 1 trf thi» 

Caribbean Community (Carl- 
cam). _ 

In what nffiriaifl described as 


a “detailed"' repty-to-the 
request of the tJS Trade Repre- 
sentative, Caricom dismissed 
the claims of the Hawaiian 
Banana Industry Assoriah^ 
saving the Hawaiian* did not 
produce enough bananas , to 

Satisfy their own. maraeL. and 

. did not export any fruit. "• 
The community said also 
that Cb^ta Brands and otfier. 

producers in Latin America 
had been enjoying growth'in 
the volume - of their exports 
over the past two' years, and 
were unaffected by the EU 
regime. “We have only to look 
at the situation in Ecuador, 
which will this year export 
over 3m tonnes of bananas - a 
reconi for this country," said a 
St Lucian government official. 

The intervention of the US 
trade representative in the 
banana dispute follows months 
of almost unrelenting attacks 
on the EU regime by several 
t j>Hn American governments 
and by Germany. Caribbean 
KarmriM exporters c laim that a 
loss of prefairencaa will destroy 
many island 'economies, 
mainly those in the four Wind- 
' ward islands ** Dominica, Gre- 
nada, fit Luxna mid St Vincent 
“The Caribbean producers 
simply 5 per cent of the world 
Tvmanfl market and for this the 
US government risks destroy- 
ing the democracies of small 
Caribbean states,” said Mr 
Edwin Carrington, secretary 
general of Caricom. Chiquita's 
calm; in 1992 were two and a 
half times the cumulative 
gross domestic -product of the 
four Windward Islands, 
reported another Caricom offi- 
cial. 



UK tin mine seeks cash 


By Kennath. Gooding, 

Mining Cofraspondont 

The new owners of South. 
Crafty, the UK’s fast operating 
tin minty are seeking between 
22m and £3m from investors to 
increase output from just oiter. 
2,000 tonnes this year to 2^00 
tonnes by the year 2000. . 

The mine has been, starved of 
cash because of the depressed 
tin price, according to Mr 
David Williamson, whose con- 
sultancy is arranging the fin- 


ancing. “Both the shaft system 
and the mina concentrator are 
capable of handling up to 40 
per cent more throughput if 
underground development can 
be accelerated,” he suggests. 

In August South Crofty 
raised about £L3m from 1,700 
investors after, the UK govern- 
ment and RTZ, the world's big- 
gest mini-ng company, said 
-they would agree to waive 
loans totalling £30m if the com- 
pany could raise a minimum of 
£lm to keep itself going: 


JOTTER PAD 


CROSSWORD 


No.8,620 Set by GRIFFIN 



Nov 23 

Nov 22 

morph ago 

year ago 

230,93 

231.15 

23330 

22053 


ACROSS 

1 Fool one with a straw? (6) 

4 Bills I have with a shrub (6) 

8 Caught one in shadow here 
(7) 

9 Fool left a tunic to be repaired 
CO 

11 Fool from northern school 
loves having a bite outside 
( 10 ) 

12 Fool student, haying nothing 
working (4) 

13 Pleasant street, tiny houses 

M Credit ruined once record in 
it's antiquated (8) 

16 After one pm reversing it's 
rarely lawful, understood? (8) 

18 Shabby Scottish banker races 

in® 

20 Fool with many to share (4) 

21 Lout left party, going back fa 
helicopter (io; 

23 It's not a new post (7) 

24 Companion in straw hat, not 
a lad repairer (7) 

26 A little number to croon 
when snooping (6) 

26 Stands around incredible ves- 
sel (6) 

DOWN 

1 Person from Riyadh in Pavar- 
otti’s audience? (5) 

2 Where nurse treats offspring 
with spreading Ike? (7) 


3 Mysterious and strange it 
came in around midnight (9) 

5 Fool close friend with very lit- 
tle money (5) 

6 Fool cleaner with story (7) 

7 Amity is no different from 
hostility! (9) 

10 Loathsome people very likely 
started on fungus (9) 

13 Fool unaffect^by weight <9) 

15 That court order fa cruel (9) 

17 Stories about child's under-. 

statement (7) 

19 Local pilot worried about 
accountant (7) 

21 canteen fa 
dejected (5) 

22 Quits flat and Is not the first 
person to (5) 

Solution 8,619 



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financial times 


FRIDAY NOVEMBER 25 1994 


I 



seeks cash 



i 



A 


yi 


LONDON STOCK EXCHANGE 


market REPORT 

Share prices rally in subdued trading session 


By Steve Thompson 

The big sell-off in the UK equity 
market was halted yesterday after 
Wall Street's late recovery over- 
night. But a promising rally in 
JjondoQ was showing ominous signs 
of running out of steam as the day 
wore on. 

Dragging on sentiment was an 
underlying worry about Wall Street 
and the chances of renewed weak- 
ness there, plus nagging concerns 
about Monday's EU vote in the 
House of Commons which has been 
turned into a government resigna- 
tion question by the prime minister. 

The ET-SE 100 Index, which had 
fallen 103.5 since the start of the 
week, moved ahead early in the ses- 
sion before slipping back to close a 
net 9.1 up at 3.036.6. The second 
liners, on the other hand, continued 


to suffer, with the FT-SE Mid 250 
Index finally 7.6 lower at 3.48L2. 
extending the fall over tbe past four 
sessions to 94.4, or 2.6 per cent 

Hie absence of any US influences 
- thB US was closed for the Thanks- 
giving Day holiday - was welcomed 
by traders throughout Europe, who 
said markets needed time to assess 
the big shift in market sentiment 
following this week's steep slide on 
Wall Street. 

There were renewed worries in 
the City with the not unexpected 
news that the Office of Pair Trading 
decided that Stock Exchange rules 
allowing marketmakers to delay the 
reporting of above-average sized 
trades for 90 minutes, and in some 
cases for up to five trading days, 
“restricted or distorted competition 
to a significant extent”. 

“The OFT report spells trouble for 


tbe existing system," said one 
dealer. “The process of change in 
the way we deal does seem to be 
speeding up." he added. 

Wall Street's recovery from an 
early 37-point decline to close only 
three points off, and the continued 
strength or treasury bonds, pro- 
moted an early mark-up for leading 
UK stocks. The FT-SE 100 opened 
some 10 points higher and gradually 
Improved to a day's peak of 3,044.7. 
up 17.2, in mid-morning. 

Although there was no real sell- 
ing pressure in London, buying 
interest simply faded away, with 
most marketmakers happy to close 
their books early. 

Turnover was a subdued 576.9m 
shares, with non-Footsie stocks 
providing around 57 per cent of the 
total. Customer business on 
Wednesday, when the market was 


In freefall, was revealed as reaching 
£L5bn. 

Marketmakers remained 
extremely cautious about 
short-term trends in the market, 
with some expressing increasing 
concern that the recent pressures 
on Wall Street, stemming from wor- 
ries about the impact of recent US 
interest rate increases on corporate 
profits, could rebuild when US mar - 
kets reopen today, albeit for a trun- 
cated session. 

“If Wall Street begins to wilt, 
then we are in trouble again, ” said 
a senior trader in London. “The 
feeling is that we will be testing 
3,000 on tbe FT-SE 100 and possibly 
2^80 in short order.” 

Electricity and water stocks 
caught the eye as the Labour part}' 
threatened windfall profits taxation 
in its Opposition Budget; and there 


was a hint that the chancellor may 
have prepared a lesser version of 
the same for Tuesday's Budget 

The day's big company news 
items failed to trigger much enthu- 
siasm. Allied Domecq was a sharp 
faller after releasing slightly disap- 
pointing interims, as was Storehou- 
sem where the performance of the 
Motbercare division was said to 
have disappointed analysts. 

Preliminary results from the 
hugely successly Direct Line tele- 
phone insurance company were 
more than doubled, but they disap- 
pointed some of the market's super- 
optimists. Consequently, Royal 
Bank of Scotland, Direct Line’s par- 
ent, attracted keen selling ahead of 
its preliminary figures scheduled 
for Thursday; dealers still expect a 
near 20 per cent increase in the 
bank’s dividend. 


FT-SE-A Ail-Share index Equity Stares Traded 



Tbmouer toy vobmw (mStanj. 
htoa-rarnliat business and overseas turnover 



1994 


■ Key Indicators 
Indices and ratios 


FT-SE 100 

3038.6 

+9.1 

FT Onfina^ index 

2326.9 

+3-1 

FT-SE Md 250 

34812 

-7.6 

FT-SE-A Non Fins p/e 

IB. 26 

(1&30) 

FT-SE-A 350 

1S24.0 

+ 2.8 

FT-SE 100 Fut Dec 

3034.0 

+iao 

FT-SE-A All-Share 

151028 

+2.60 

10 yrGUt yield 

8.48 

(8.50) 

FT-SE-A AB-Shara yield 

434 

H-04J 

Long gttt/equfty yW ratio: 

2.13 

C2.13) 


Best performing sectors 

1 HaaJtt Carts 

2 Banks 

3 Ofl, Integrated 

4 Telecommunications 

5 Transport — 



Worst performing sectors 





--1.7 

.. +0.9 

3 

Spirits. Wines & Cider 

...-03 



-.-0.7 

- +0.7 

5 

Retailors, General ... 

...-0.5 


Budget 
fears hit 
utilities 

Shares in the regional 
electricity companies (recs) fell 
sharply after the Labour par- 
ty's shadow chancellor reiter- 
ated plans for a tax on windfall 
gains arising from the sale of 
the National Grid. 

Sentiment was further hit by 
speculation that the govern- 
ment might actually introduce 
a watered down version of the 
tax in the Budget, although 


political jitters ahead of next 
Monday's crucial vote in the 
House of Commons on UK con- 
tributions to the EU budget 
were said to have been a more 
important factor. 

However, strategists also 
pointed out that part of the 
slide could be attributed to 
profit-taking after the recent 
strong performance of the sec- 
tor. One trader simply said he 
was “squaring the books" in 
calling the sector lower. 

The day's main casualties 
included East Midlands, down 
27 at 734p, Midlands, which 
also lost 27. at 740p, South 
Wales, 34 lighter at 760p. 
Southern, 21 off at ?65p, and 
South West, which surren- 


dered 31 at 732p. 

Mr Doug Falconer at Yam- 
aichi said that as a result of 
the statement from Labour “it 
is extremely likely electricity 
companies will feel under pres- 
sure to announce special divi- 
dends sooner rather than 
later". He remains positive on 
the sector, with Southern 
among his favoured stocks. 

RBoS concern 

Perception that the insur- 
ance arm of Royal Bank of 
Scotland was not a one-way 
bet sent a shiver through the 
Scottish clearer’s shares ahead 
of the bank's preliminary fig- 
ures. expected next Thursday. 


However, some analysts 
claimed that their rivals had 
“over-egged” their expectations 
for Direct Line's growth pros- 
pects. and the sell-off in RBoS, 
which fell 17'/* to 425p, was 
merely the reflection of a 
return to reality. The insur- 
ance team at Smith New Court 
said that although Direct Line 
was still a “high growth com- 
pany that benefits from higher 
margins than anyone else”, 
banking specialists might not 
have appreciated that the pres- 
sures on private car and house- 
hold insurance were not going 
to go away. 

NatWest Securities cut its 
forecast Tor the year to Septem- 
ber 1995 by £20m to £140m and 


EQUITY FUTURES AND OPTIONS TRADING 


TRADING VOLUME 


With Walt Street out of action 
for Thanksgiving, stock index 
futures drifted for most of the 
session, moving modestly 
higher in low trading volume. 


writes Jeffrey Brown. 

Activity dwindled to nominal 
levels, with Just 7,015 
contracts contrasting starkly 
with the near 20,000 notched 


up in the previous session 
following Tuesday's big sell-off 
on Wall Street 

The FT-SE 100 December 
contract was 3,034 at the 
dose of pit trading, clawing 
back nine points of the 115 
lost in the previous three days. 

There was a premium to the 
cash market of around 10 
points through most of the 
session, but in the final hour 
this shaded dramatically and at 
the official 4.10pm close 
December had swung to a 
two-point discount, or nine 
points under fair value. 

Traders were mostly 
disappointed by the day's 
performance. Many had 
expected the future to show 
more determined recovery 
given Wail Street's relatively 
neutral close on Wednesday. 

Traded options also paused 
for breath after the previous 
day’s excitement when a major 
securities house pushed 
through a record 20.000 
January puts. Total volume 
was 26,574 lots, down from 
80,984 on Wednesday. FT-SE 
and Euro FT-SE trading 
accounted for just over 11,000 
tots. Eastern Electricity was the 
busiest stock option, with 
1.600 contracts dealt 


■ FT-SE 100 INDEX FUTURES (L1FFE) E25 per tut index point 


(APT) 



Open 

Sen price 

Change 

Mgh 

Low EsL vd 

Open M. 

Dec 

3038.0 

3034.0 

+10LO 

3056.0 

3026.0 

7755 

52283 

Mar 

3053.0 

3046J 

+Sl5 

3067^ 

304 7.0 

TTflt 

«acm 

Jim 

3084.0 

307OQ 

+ 10 J) 

3084.0 

3084 J) 

21 

145 

■ FT-SE MD 260 BttlEX FUTURES (LJFFQ £10 per Ui Index point 



Dec 


3480.0 

-60 



0 

2853 

Mar 


351 7J> 

■55 



0 

2504 


■ FT-SE ISD 280 INDEX FUTURES (OMLX) CIO per til* fncfax pofat 


3.465.0 X4axn oagso 

r Sgusa era far TVnutni* ctay. f Exact warn stxmm 


267 


287 


m FT-SE 100 9PBC OPTION fJFFS) r3Q38? CIO per to Index point 

2860 2900 29S0 3000 SOSO 3100 3190 3200 

D6C 18ri2l2»z1W2 a£i 11»J 30*2 « 47 53*2 70 33 101 18*2 138 10*z ISO 

Jin 225*2 32 m 44 158*2 59*2 Ttlh <7 SZ 100 69 128 48 158 35 195 

Ml 238 41*2 207 53*2169*2 87*2 MB 88b 1H 109*2 02 138*2 67b 167 SB 202 

Itar 252*2 5612 tM 71% 183 88 ISSiz 109 124 128 101*2 156 80*2 185 83*2 218 

Jmt 252 SO 192 129 141*2178*: 99 Z3B*z 

C*> 4815 M* 4 fitl 

■ BUBO STYLE FT-8E 100 MDEX OPTION JJFFg rio per to Index port 

2879 2925 2976 3025 3075 3125 3175 322S 

Doc 173 14*a 1324 24 99>2 37*a SI 58 44 85 ®a 117 14 154*i Vj 196*2 
Jan 290*2 35 164 48 131*2 65 103*288*2 7*2 112 57*2139*2 41 173 30*2 211 4 
Ml 182 55 125 96*2 78 148 45*2 214 

MW 104 73 134 111 D IB 52*2 228 

Juft 238*298*2 180*2 137 132 185 92 212 

06S W4 rus 65? ‘ imfttag fete W**. PiBrtuna ■«* » Wsrt on Mterant prim, 
t Una dated erekf Hafts. 

■ EUBQ STYLE FT-SE MB> 250 MDBt OPTION (OMLX) E10 par tul Index point 


3400 3480 3500 3660 3600 

Dec BM 402 60.1 627 30.1 91.5 

Oft D Pus 0 Seatons* pdcas Md tores me teen * 4Mm. 


3700 


3780 


FT - SE Actuaries Share Indices 


Day's 

Nov 24 ehgo% Not 23 Nw 22 Nov 21 

ago 

Dfa. 

yWdN 

Earn. 

yUd% 

P/E 

ratio 

Xd adt 
ytd 

Total 

Ratoxn 

3036.6 

+04 3027 5 3078.7 3121.0 

3093.1 

423 

72S 

1631 

11623 115420 

3431^ 

-02 3468^ 3S453 356Bi 

344Sl2 


502 

20 ja 12252 1304.78 

3483i 

-02 34009 35400 3S70.5 

5444 -3 

3.78 

6.41 

1086 1273S 

130322 

1524.0 

+02 16212 1548.7 1B65J 

1542.4 

4n9 

094 

17.06 

5725 

1185.17 

176325 

1782.76 1782.19 1788.18 1736.19 

3J8 

5 05 

2436 

52J8 

1374.16 

1733.42 

— 173083 175050 1754.83 1711.89 

35B 

5.62 

22.7B 

6325 

13S6.1B 

15102B 

+02 1607 £6 153232 155001 1925.84 

4.04 

631 

1748 

5521 

118457 

hare 

Day’s 

Year 

Dtv. 

Earn 

P/E 

Xd ad). 

Total 

Nov 24 

chgaK Now 23 Nov 22 Nov 21 

ago 

yWdW 

yfaW* 

ratio 

ytd 

Return 


FT-SE 100 
FT-SE Bftd 3SD 
FT-SE Mid 250 ex lm Hunts 
FT-SE-A 350 
FT-SE SmaOCap 
FT-SE SmaOCap e* tow Trust* 

FT-SE-A ALL-SHARE 

■ FT-SE Actuaries All-Share 


. ExmAcnowat 

12 Extractive Udustrtestf) 

15 OB, tntegmu*83) 

16 OU Exploration 8 ProdQIL 


2651.28 +0.7 2633.50 2857.10 2708.10 2388.10 

3753.45 8753.46 382&04 3870.82 322&50 

2821.78 +08 259005 2627.57 2073.72 236080 

184832 +0-1 184638 1873,66 1878.82 1837 JO 


3.56 

5.18 

2421 

83.83 

107038 

342 

5.47 

22.62 

9862 

103674 

3.71 

573 

21.73 

9644 

1082.69 

22 S 

t 

t 

3603 

106041 


EN MANUFACTlJHER3tW7) 
UKfing & ConBttuction(3SJ 
ito&rq Matte & Merchsf32) 
hemfcata<23) 

hraretted IndustriafaflS) 
lectrontc 6 Sect Equpp4J 
n^naering(7l) 
nrfneeitm. VW0cfti(12l 
rinting. Paper & Pcfcg(2*9 

a AppawKgB 


29 Text! 

30 CONSUMER GOOOSfBT) 

31 Br o w ot teetlT) — 

32 Spirits, Wrote & CWeraPQ) 

33 pood Manufacturers^ 

34 Household Goods<13) 

36 Haaftt Garef2i) 

37 Pharmae«dfcatefT2) 

38 ToOaccoQ) 


194058 +0.1 184006 187088 1897.40 1809.10 

1021.90 +A2 101896 1033.51 1041.03 113070 

1823.80 1822S7 1856.62 188006 185X00 

2242.70 +0.4 2233.10 2277.84 2303.78 2137 JO 
<72058 -02 173277 1777.06 160054 105040 

1834.73 +02 1830.18 187255 1898.07 208X30 

1803.14 +03 1797.70 182a 18 1832.54 168130 

2300.48 +0,7 2235.20 232431 2352.79 1957.00 

278738 +0.1 278531 2864.15 2870.44 245730 

ifififl.78 +03 1555.42 1S73Q9 167520 186320 


4.18 

523 

22.67 

7099 

944.12 

088 

649 

24.00 

36.57 

805.71 

A09 

636 

2240 

7057 

865.56 

420 

4 89 

2659 

8987 

999.66 

5l30 

632 

2056 

82.82 

889.10 

4.12 

684 

17.43 

61.86 

899.40 

035 

5.49 

2129 

57.89 

1037.61 

425 

120 

8O0OT 

9054 

112520 

012 

5J56 

2095 

8125 

1101.12 

422 

BJ91 

17.78 

6323 

68125 


2725.06 

2179.79 

273230 

226134 

231338 

1666.18 

307633 

372036 


272433 275630 278100 7729 60 4.42 739 15.70 11239 94438 

-07 218436220634 222131 203040 436 737 15.15 61.47 976.65 

-03 275433 2782.43 2804.77 2S77.B0 4.11 7 07 1027 10230 919.96 

+03 225330 2278.00 231 \A2 2267. JO 436 730 15.19 94.55 95637 

-0.1 2316.01 2353.70 237034 259330 335 734 1537 8838 83735 

+03 157132 168333 159080 167630 123 339 41.46 49.70 92438 

+03 3066303088.60311435 3015.50 438 7.00 16.53 133.07 967.04 

40.7 3600^6 366737 415830 533 934 11.62 217.07 846.89 


40 8S»fCES(21Q 

41 CWrtbUorePG) 

42 Letews & Hotote(25) 

43 M*M39) 

44 Retailers, Food(ie) 

45 Rataflam, Genera«45) 

48 Suppcxt ServtaesMU 

49 -rvenapartne _ 

51 n- **™r**- a 


189931 +02 1808.03 1922.79 193637 1877.10 

2527.85 252736 2553.89 256134 287930 

2056.46 +03 2051.45 207433 2102.73 189930 

2643.13 +062826302878.69289032258330 

1739.62 +04 173X49 175230 1777.47 157130 
159536 -05 1604.68 162932 163236 170430 
151339 +0. 1 151059 1523.63 162737 1581 30 
2244.31 +07 222736 226232 2286.90 234230 
125131 +03 124836 126134 128831 1163.50 


030 

6.68 

18.06 

5b. BO 

S36J92 

075 

720 

1620 

89.19 

881.79 

043 

528 

22.18 

57.69 

1017.72 

2.45 

529 

22X0 

7014 

999.50 

075 

920 

13.43 

5044 

104664 

035 

7.16 

1743 

58.78 

86920 

2JT1 

051 

18.09 

3043 

92058 

079 

629 

1074 

87.01 

884.38 

4.43 

019 

«7J» 

28.63 

1077.42 


imunesps 

aectricttyt17) 

3os OtotiftMtonP) 
r«tectxnraur*3tifana(4) 
AtetemS) 


245430 -23 250546 253041 2657.17 2141.10 

196742 +03 195730 1873.82 199933 214130 

182536 +08 190930 197133 371532 2283.10 

1779.75 -1 .7 181131 183933 166130 189040 


4.80 

0.10 

15.02 91. 17 

905.78 

081 

10.08 

1128 105.79 1030.18 

OQB 

T 

t HBL82 

924.08 

4.42 

015 

14.92 5022 

621.05 

655 

1073 

732 8061 

695 12 


+630.37 +P1 1629.14 166X10 1672.56 163436 4JB 

+ae 213738 217433 2211.62 228630 431 

tOJi 282232 287054 2942.61 284040 
+05 1204.74 123031 1246,16 140330 
-03 2317.97 235638 238033 260530 
+03 2790.68 2856.12 2868.02 299830 
-03 1B49l38 197633 188433 169X80 
♦02 140136 141834 141642 1701.60 


058 

9.10 


1836 59.74 1159.74 
12.73 9034 856.17 


IALS(1041 


■ance® 

I Banks( 6 ) 
iancteK24) 


215037 

2848.85 

1210.46 

2312-86 

278839 

184437 

140436 


jBtrjSSlSSa- 


2694.45 

151038 


♦05 268135 273016 2782.97 2856.70 


*03 1607.68 153232 155031 152534 


424 

9.96 

11.48 T 1639 

85652 

661 

1008 

1130 

6135 

838.15 

653 

606 

1613 12732 

89610 

3.73 

1029 

1125 

97.76 

8*524 

086 

656 

1098 

87.63 

99140 

436 

4.62 

27.14 

4837 

80633 

228 

129 

50.74 

5044 

90616 

4n« 

681 

17.48 

5691 

1194.57 


AI3/-SHAREP9Q 

movements 

JS252 — r~r ~ — ^33 30423 ao«.i 30393 30402 30393 3044.7 3934.7 

3037.6 3007.7 JUW 3405,0 349*3 34993 3487V3 3485 3 348 ZO 34905 34813 

FT-SE MW 260 34802 3 495* 152 73 1527.7 16202 16253 1526.7 15233 15203 15206 


1030 


IIjDO 1X30 1330 1430 


1SJOO 16.10 WahM ay tMAte 
30402 


FT-SE 100 


FT-SE-A 350 


1525.0 




•-se in 1894 hvx «am 1 a«*6 c*^. 


■ FT-SE Actuaries 


300 Industry baskets 


open 


930 


1030 


1130 1230 i*no_ 


1030 10.10 Cloee Pnntixa Chenga 


9713 8809 


Water 


9683 

9660 

9683 

968.7 

9663 

985.8 

+2.5 

30463 

S047.9 

30472 

30*7.7 

30(63 

30*0.7 

+63 

18104 

18023 

17913 

17763 

17768 

18063 

-3T.7 

28873 

2887.0 

28900 

28844 

28843 

2857.7 

+27.1 


* 55? 55T 

fflTOT 2878.0 28733 

...njiarf n smuxmr >«m. lm* or omnma am m 

fl»n*e 3W«+ lnfl ‘Sfl ?. t ^£ yKwm Moaa Earmn Mrti arnii angi o* 

AOntkrat 9W- 13-17 Bi —ft 9>ar^ Uftte EC8A +OL 

Uiftad. On» 5 BUt«« 1 i teHiFMTi 10n ^ iu ago «MM 350 and m FT-£ 


Son, Tha FMieaol Am 


FT-SE Ateaertea Muey 
b 



■ Mftor Stocks Yesterday 



VOL 

doraig 



000 s 

_pncn 

efurgn 

art 

1300 

331 

«£ 

ASDAQrOLpt 

1300 

64 A. 

— *4 

Abbm Naiunatt 

2.700 

4091; 

-i S 


2300 

44 

Ateod Domrovt 

8300 

555*2 

/mctexi 

103 

483 

-10 


24S 

345 

-1 

SSL, 

5,000 
6, TOO 
48 

2GB 

281 

556 

% 

+1 





BAA+ 

1.200 

498 

*6 

BATtoCvt 

2300 

444 

+3 

BET 

1.000 

104 


BtC C 

339 

330 


BOCt 

921 

095 

•5 

BPt 

7300 

415*2 

«S 

BPfllnda. 

160 

302 

-1 

art, 

4.700 

372*2 

t3h 


7300 

284 


Brak at 3cc«ten<Jt 

2300 

205*2 

ft 


2.400 

588*2 

Braet 

1,100 

522 

-S 

BuaCMat 

947 

292 

-1 

Bookra 

1300 

414 



748 

49B 

-3 


i.ooo 

452 

<6 

Brtt. Afirotpocaf 

1,400 

443 

*9 

BrtesH Alnraysf 

2300 

373 

-1 

MM Oast 

4300 

296*1 

♦1*2 

BrtdsnLrad 

258 

378 


Brtten StaaTf 

3300 

1S3 

+1 


288 

183 

♦2 

SUnraft Carat*? 

346 

B26 

-8 

Bunn 

CfttoSMbaf 

298 

3.700 

£& 

•6*2 


Urn 

434 



BSD 

Z7Z 

*4 

Carton Convm-t 

308 

878 

♦2 

Coots VlyaU 

880 

205 

«2 

Ccnrn. Untont 

1300 

522 

♦3 

Cootaon 

2. TOO 

243 

*3 

CourtMtist 

5.100 

429 

♦4 

ECU 

288 

428 

420 

996 



367 

186 


Eastern BraLT 

1300 

790 

&** lAteun Bbcl 

283 

734 

-27 

Badracxxnps 
&H3 Chfria Cteya 

253 

488 

483 

340 

♦1 

-3 

EnrapnaaOtT 

79 

375 

•8 


633 

283 

♦16 


277 

183 



1300 

122 

-1 

Foraton A COL LT. 
Ferret 

1.100 

1.100 

132*2 

22b*j 

a 

Ora. Aradraft 
Oararte Boclt 

240 

3.700 

545 

277*2 

+2 

*2 

Qtexot 

3300 

617 

♦3 

GMnrad 

454 

3321} 

♦3*2 

Cronadst 

2.400 

518 


(krad MaLt 

8.400 

393 

-1 


1,000 

547 

-8 

QBFi 

3.500 

183 


GKVf 

429 

614 



1300 

457 


Hsacosp start 

B86 

717 

♦10*2 


411 


-1 

Hanson? 

9300 

226*. 

-llr 

tterrt«ra Cnwflald 

7400 

ISO 



1300 

!N 

♦3 

H^sdown 

1300 

168 

-2 


5+4 

317 

fO 

ert 

1,100 

752 

& 


3300 

437 

-2 

A+rrscn Maorwy 

244 

550 


Wnofianert 

ia« 

524 

483 

505 

♦8 

LaaonAst 

2300 

157 

♦ 1 

Land Sacunbet 

872 

597 

♦1 

Lspcrts 

161 

(*W 

-6 

Legal & Generait 

1300 

419 

-J 

Ltonte Abbot 
UowtsBanLT 

LASMO 

2JW0 

328 


1,100 

1300 

574 

145*2 

♦ 1 
-*2 

London BaeL 

1300 

5GB 

-21 


11.000 

153 

-2»2 

Lucas 

1300 

200 

-1 

LtPCt 

45 

399 

♦4 

MR 

127 

140 

♦ l 


2B4 

760 

-31 


2300 

404 

-a 

iwlancB Bed 

5 M 

740 

-27 

Momson CT/nv) 

i3oo 

135 

-1 

NFC 

22300 

172 

♦ 1 

Nmvteto Bankt 

3300 

506 

♦5 

Nononb Powwt 

1300 

405 

-3 


130 0 

250 

-J 

Nortti W<ra Waurt 

950 

520 

-12 


482 

77V 

-Si 

NortiemFoodst 

156 

2C4 

♦1 


181 

781 

-22 

Pesreont 

487 

806 



828 

BI3 


PAk^on 

2.400 

161 

♦1 

PomGant 

PruOBrttarf 

874 

3*3 

544 

311 

-4 

RMC? 

3 07 

STS 


FTTCt 

1300 

830 

♦1 

Roc* 

3300 

218 

♦*2 

(tonsoret 

719 

410 

iS 

ijoo 

560 

-1 

teiSandt 

618 

468 

♦2 

newtaaLt 

450 

787 

♦S 

8S9 , 

954 

'0300 

238 

470 

-1 

fJ 

notoBo*cst . 

6.100 

177*2 


RF Bh ScxMtondt 

BO)*! tosrasneor 

7300 

848 

428 

285 

-17'* 

«1 

fioWKKrt 

ScfwuieraT 

1.700 

18 

405 

1413 

-I 
♦ 10 

3octirai S Now.t 

828 

504 


Scot. Hirto-Bocl 

418 

317 

-6 

Scocrai Prawrf 

1X00 

JWS 

-7 


13.000 

108*2 

♦3 

SedgtrkA 

135 

151 

•4 


SIC 

408 

-8 


810 

541 

-to 

SMTrarapUit 

1.800 

6S5 

+4 

Sotat 

488 

553‘j 






Snnniw.Hj 

1JDO 

4 47*2 

-i4to 


8.700 

151 

♦A 


4300 

423 

♦2 

SnMBwtemUbt 

1300 

388 

•3 


57 

482 

tel 

Soutesni Sect-t 

1300 

7® 

-21 


573 

780 

-34 

Soum West Wra 

285 

481 

-5 

Soutti wra. Bees. 

1.100 

732 

-31 


207 

586 

-14 

Snrstert Chartslt 

2.100 

281 

.10 

Storehouss 

230Q 

214 


Sun ABoncef 





1300 




359 

364*2 

♦*1 

rent 

2.700 

218*2 

-1 


452 



TotoSLyta 

1300 

426 

-1 


588 

121 



4300 

2«3 

♦3*2 

Tlranaa Wntarf 

ssa 

461 




■73 


TomtJrwf 

4J00 

221*2 

-.1 

TrettoffsHouae 

2.300 

Si 

1103 

SKSt 

1300 

♦IS 

Ur«»d EBohI 

941 

317 

-1 


281 

510 


vodafcrraf 

5300 

104', 

-t 



848 


Weteorast 

1300 

868 


WaWiWaur 

90 

642 



112 

2W 


wrasomrt 
wsuran Hfagat 

1.100 

883 

•s 

-e'j 

k? 

MBs Conwir 





4IZ 

1* 



138 

171 






Y«w*«wra 

90 

514 

-14 




♦7 


Baaaa cn tmtr« wriumt tar a Mactan of mo|or 
■onwiWi nrai^i hw ££AO+ya<an> 
yaatMday uti * Morx Tn**r. oj one mVono, 
more era named iIoml t Mr— + on FT-SE 

too me* ceraataM 


S.G. Warburg was said to be 
arguing that the company 
would stop growing by 1996. 

Nevertheless, broker Credit 
Lyonnais Laing is confident 
that the Scottish clearer will 
achieve profits of £55 lm and a 
diridend of I3.5p - top of the 
range estimates - and was 
using yesterday's weakness as 
a buying opportunity. The 
two-way pull on tbe stock 
prompted exceptionally high 
turnover of 7.6m shares 

B&B activity 

Turnover in London was 
inflated late in the day by a 
spate of very large deals 
believed to represent tax-re- 
lated activity ahead of the Bud- 
get. Transport group NFC 
gained a penny at 372p in turn- 
over of 32m Volume in Reu- 
ters was boosted by a block of 
8.9m shares placed at 470p one 
minute before the close of trad- 
ing. The underlying shares 
closed 3 up at 470p. 

Tightly traded Smith & 
Nephew rose 4 to 15ip, one of 
tbe best Footsie performances. 
Shortly before the close, large 
blocks of shares were placed, 
sending turnover to 6/ftn. 

Engineering shares had a 
mostly negative day, overshad- 
owed by profit-taking and 
mixed results. Precious metals 
group Johnson Matthey was a 
clear victim of the former, clos- 
ing 7 lower at 550p, having 
jumped to 56lp immediately 
after strong interims. 

The results were ahead of 
analysts’ expectations and so 
was the 42p interim dividend. 


NEW HIGHS AND 

LOWS FOR 1994 


NEW MOHS tlft. 

00.18 pIMTHtUTonffl Mi Mm, 
eNOWEEWNC f 1 > Loot. EXTRACTIVE DOS 
tu Ramon. INVESTMENT TRUSTS M 
INVESTMENT COMRAMES PI Martiua Fd. 
MEDIA PI Baoc«r. OH. EXPLORATION A 
MOO PI CrjsaOer. OTHER SERV 8 A BUSNS 
(2) Benam. Qn«M|. 5PWJTH, WINES A 

crass pi uaxtma wm a. support 

SERVS PI Bumm Poc. TEXTUS A 
APPAREL p) CnNftwtui Rasps. 

new lows naq- 

BANKS (1) fis NX) Fnu 7pC Pt. BULDMQ 
A CMSTRN HI CAIA Eua. Pmutng. RagWiL 
BLDO MAILS A MOPS p) Altfm 
CHEMICALS pt Tortcnra. OtSTRBUTORS M 
CMMes srney. Hantags, Patry Orav. vatoy Fs. 
nVERSRCD MOLS {11 8 TR. Do. »At* 199M95. 
Do. -.via 19aS.V6. Da wre* 1997. Do. IMS 
199S, Saraelot tnea, Sunr Wits. B3CTRNC A 
ELECT EOUP W BowtKxp* CModde. 
3oumrra=s. TDS Cccuex. TatonoOw. 
ENOMtEBVNO a Ba— U U wn an . (LX 
EXTRACTIVE MS H FOOD MMAJF {R 
Acxoa S Huen. Hadomort JU. HEALTH CARS 
(6 SLaoaca VsL UnCnam. M 8 URANCE p) OneL 
INVESTMENT 1RUSIS INVESTMENT 
OOMnUKS m OuwgdBm Oev Fd. JF Pas wn 
Co. Oryx FinL LBSURE A HOTELS CE Alpta 
Aapom. Mmfem OnamN PM. Ptam ftaurp. 
MESU » On Demand Wo, PmmM. SunM A 
Vteo. OTHER FWANOAL 0 QoM A Ccx. MF. 
PfTTNQ, PAPS) A PACKS P| APL Bwraooe. 
Sen). PHOP EHt Y pg B+KOy. BUT Lam ttx Bd. 
Damn- DavoiopmoC Sacs. PSP. Fa«L Prior. 
Proo. Paatneunp. Propony Tnnt ffVT). Somm 
M wropoetan. Soi«P E«a UK EsbM, 
RETAILERS, OENBULia NnM. Ltely. 
SUPPORT SSWS Johnson Osms. (MM 
MolacUar. StoanesceVR, 
TWXOOMMUraCXnOHS P) t&pon TAT. 
TEXRLES A APPAREL <4J Larrtat MowMBL 
pex. RamcuL seer, transport p> md 
CWnere. WATS) P) SoUh Worn. AMBBCANS 
(D BMMehem Steal Honaywel. Oiraar On 
Tannaca. CANADIANS p) Araartcan Banka Rea 

BZW upgraded its full-year 
profits estimate, adding an 
extra £5m at £95m, where the 
propective p/e of 16.5 is what 
the investment bankas feel is 
a “fully justified" 20 per emit 
premium to the market. 

Energy engineer Babcock 
International, which has been 
bumping along within a whis- 


ker of its low for the year all 
this week, barely blinked when 
the interim results weighed in 
woefully short of brokers’ esti- 
mates. closing marginally 
easier at 26'Ap in turnover of 
less than lm shares. 

Analysts have been progres- 
sively lowering their sights on 
Babcock’s earnings since late 
summer and they were again 
hard at it yesterday. BZW 
reduced its hill-year estimate 
from £19m to £13m - a figure 
which compares starkly with 
the £56m Babcock notched up 
in 1991-92. 

A boardroom shake-up and a 
warning about full-year losses 
pushed precision engineer 
i. Billam down to U5p at one 
point during the day but the 
shares closed 19 down at 123p. 

High street retailer WH 
Smith Group fell 14% to 447y 3 p, 
after Cazenove, the company's 
broker cut current year profit 
estimates. The House was said 
to have reduced profit expecta- 
tions by £7m to £i38m and to 
have cited a lower than antici- 
pated pension credit and wor- 
ries about trading during the 
upcoming Christmas trading 
season. 

Those concerns about Christ- 
mas period trading were also 
heard around Storehouse 
which pleased the market with 
its full year results. Traders 
also said the figures had 
already been discounted and 
the shares ended the day S 
lower at 214p. 

Sears managed to resist the 
poor sentiment surrounding 
Christmas trading and the 
shares hardened 3 to 106‘Ap 


after heavy trading of 13m. 

The reduction of profit esti- 
mates by several brokers hit 
shares in Allied Domecq after 
the group posted disappointing 
interim figures. 

Profits rase from £ 266 m to 
£3I0m but fell short of market 
expectations and analysts were 
particularly disappointed by 
what one railed the “flat trad- 
ing performance". 

It was the second time this 
week that brokers had cut prof- 
its forecasts and the shares 
tumbled 19 to 555’Ap, after 
heavy trading of 6.6m. BZW 
reduced its 12 months forecast 
by £8m to £714m while Nat- 
West Securities by £28m to also 
arrive at a similar figure of 
£714m. 

The poor sentiment in Allied 
was said to have spread to sev- 
eral other stocks in the sector 
and Bass eased 5 to 522p. while 
Whitbread fell &‘A to 538‘Ap. 

BT added 3‘A to 372*4p helped 
by an upbeat presentation to 
analysts by the group's Cell- 
net, mobile phone joint ven- 
ture. Good increases in usage 
was the main thrust of Cell- 
net's message. 

Manchester United's virtual 
piimfnafuin from the European 
Champions Cup competition 
saw the shares slide 14 to 62Sp. 

News that the parent of the 
Telegraph had been buying 
back shares in the newspaper 
helped shares rise 8 to 354p. 

MARKET REPORTERS: 

Peter John, Joel IGbazo, 
Jeffrey Brown. 

■ Other statistics. Page 19 


LONDON EQUITIES 


tIFFE EQUITY OPTIONS 




— 

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— 


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15 

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390 

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140 

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360 

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420 

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493 

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390 

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650 

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700 

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200 

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220 

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70 

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1100 

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1150 

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800 

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140 

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160 

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300 

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330 

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120 

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130 

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to 

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409 ‘ 

48W 

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420 

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9 : 

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460 

18 

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28 

42 

48 

BTH 

280 

18 

a 

Z7 

9 

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19 

(-284 1 

300 

BW 

14 ■ 

IBV* 

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a : 

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360 

23W 

29: 

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390 

10 

16 ‘ 

1BW 

a : 

low 

38 

creursen 

420 

28W 

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460 

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750 

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260 

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to 

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— 

Cafe 

— 

— 

Puts 

— 

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fire 

to 

to 

Ftb 

to 

to 

Hanson 

220 

T3W 

MW 

19 

BW 

ii 

14% 

(*Z27) 

240 

5 

8 

10% 

18% 

22% 

26 

Lasrao 

140 

12 

16% 

19% 

5% 

8 

8% 

n*5 ) 

160 

8W 

7W 

10% 

17 

18% 

20 

Lucre tads 

200 

T3W 

17% 

a 

9 

13% 

IB 

(-200 ) 

220 

5V* 

9 

14% 

22 

75 

27% 

P 8 0 

600 

37W 

40 

88 

16% 

33% 

40 

<■£14 ) 

650 

MW 

2B 

37% 

44% 

K 

68% 

PBdrglita 

1B0 

9 

14 

16% 

7% 

9% 

12 

F181 ) 

200 

2W 

B 

BW 

aw 

22% 

24% 

Pntiwtiti 

300 

21W 

26 

29% 

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IB 

18 

raio) 

330 

7W 

1TW 

M 

24 

33% 

35% 

R7Z 

600 

&4W 

68 

7BV4 

15 

31 

37% 

rS2B | 

650 

27 

40 

54 

S8W 

5flh i 

62% 

Racsanfl 

460 

27 

35% 

40 

16% 

32 

38% 

T46* > 

500 

m* 

18% 

2SW 

40% 

58 

B1% 

final tasce 

230 

20*4 

2BH 

31 

(3 

79% 

22 

T2B4 i 

300 

11W 

18 

22% 

2* 

31 

33 

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2*0 

14 

a : 

21% 

7% 

1414 

17 

C243 1 

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5V4 

18% 

13 

20 

26 : 

28% 

vuaatone 

183 

17 

— 

— 

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200 

B 

13% 

17% 

13 

16% 

19% 

Wltiams 

330 

2514 

33%; 

3614 

S% 

13% 

IS 

(-345 ) 

360 

tw 

17%: 

aw 

19% 

28 

30 

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JM 

to 

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to 

to 

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BAA 

475 

am 

42% 

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4% 

9% 

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500 

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19% 

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460 

31 V4 

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52% 

7 

13 

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500 

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23 

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75 

32 

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Jun 

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390 

24. 

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4 

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20% 

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18 

24 

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30% 

37 

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30 

2 

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550 

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28 

87%: 

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46 

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280 

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300 

6% 

18 

21% 

12% 

19% 

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280 

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27% 

33% 

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12% 

rrar * 

300 

B 

15% 

22 

B 

14 

22 

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1B0 

10% 

16% 

22 

4% 

9% 

14% 

HBSi 

200 

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13 

18)4 

20% 

75 

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160 

12 

16- 

19% 

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5 

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ISO 

2 

B 

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11% 

14%: 

20% 

Uxvno 

140 

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19 

23 

1 

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4 

9 

13 

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14 

16% 

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460 

35 

47% 

59 

3 

11% 

19% 

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500 

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37 

18% 

74 

38 

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330 

23 

31 

41 

4 

13% 

19 

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360 

7 

18 : 

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28 

34 

Sean 

100 

7 

10 

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6 

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110 

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5 

7 

8 

8% 

11 

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220 

10% 

18 

23 

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8 

14 

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9 

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19 

75 

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120 

7 

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7% 

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130 

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12% 

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Than Si 

950. 

35V* 

54 77% 

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(■972 ) 

1000 

9% : 

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60 

40 ■ 

49% ! 

59% 

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200 

20 

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5% 

8% 

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220 

B 

12 

16 

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18 

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220 

7 

14: 

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5% 

11% ■ 

15% 

(T21 ) 

240 

1 

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12 

19 

24 

27 


©0 

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S5V* 

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29% 

44 

f666 1 

700 

B 

32 47%. 

tow 

56 

77 

toon 


Jan 

to 

M 

to 

to 

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Gbu 

600 

38%: 

51% 

65 

15% 

at : 

»% 

(-616 1 

650 

13% 

29 

42 

43 : 

58% 1 

38% 

MSCTStfB 

700 

41 

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18% 

43 

52 

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750 

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45 

12 

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Reuters 

460 

a 

34 

46 

ii : 

22%; 

77% 


ri70) 500 BHK 28 34» 44* 49» 

Optm fdiiwr Aag ftb May H* 

ftSs-nojw 1E0 Z2» SH 26H 24 B 84 
pro I 180 Ifl « 18 10 15 17 

- undwtytng aeonnr me Ami art* 

based On artHsmonl press. 
flnwiM r-l. Total contracts.- ZB . 402 OtHac 
15453 Put* 10349 


FT GOLD MINES INDEX 


ftw % cbg Not NW T«r Grass ftr BsM 

n ratter 2? 21 age jftM* MB* *■» 


Gate Mtera teds* (34) 
■ feetes; fades* 

Atria (16) 

Audnttsto (77 
Nam Atetffca (ii; 


168U3 

-U 

19*834 198830 20*633 

227 

2387 JO 176202 

3140.19 

-3.0 

3235.66 326393 2875.50 

437 

3711X7 2304.45 

2441.77 

-32 

Z52IJ9 2624.59 2252.61 

106 

301X89 2171 £5 

I449J77 

-22 

1441. IS I51I7G 1781.69 

OJG 

2039165 1468.11 


CtmngnL Tha rt nano a Tirana Ltraod 'W. 

Dans hi BraChais ahrat nuts of ceni pa ra aa . Baaa U5 CkAan. BACft 
nstterasstf CkMMlnssteoacNcvM.-23R7;dVaCtan0« -® 1 Brans 
LSaal pneas »« isinvniaBte for ins sdtaon. 


vnusi looo-Qo smzsL 
Tor oga 23&B t FteraL 


FUSES AND FALLS YESTERDAY 





Ftfaes 

Fails 

Same 




31 



Otter «xadMan»t 



3 

0 

11 

Mineral Extraction 




80 

33 

83 

General Marxrfacturere — 




131 

100 

398 




42 
























125 

25 

315 

Others „ 



84 

20 

31 

Totes 



896 

353 

1528 

Dtta trend on owe convenm Mad on dw London San Santee. 



TRADITIONAL OPTIONS 





RretDealngs 

November 21 

Exphy 



Febnroy S3 

Last Dealings 

December 2 

Setifamers 



March B 


Calx Bk. Scotland, Cabin & WirtL, FMrotite. Mddfaasx HMofa, Ovoea R*te, Sgnad, 
Tulow Of Puts: dram & Wire, O+oca Rex, lUtaw Ofl PUs & CaUx Bk. Scotland, 
inUteai Ndgx. PradenU, WPP. 


LONDON RECENT ISSUES: EQUITIES 

Issue Amt MkL Ctoaa 


ptioa paid 

P tip 

cap 

tCm.) 

1904 

Mgh Low Stodi 

price 

P 

+/. 

Not 

Ar. 

ON. Cn 
cm. yld 

P/E 

IW 


F.P. 

IBS 

83 

70 Attnai Latti Am 

84 


_ 

- 

. 

_ 


FP. 

1.98 

63 

48 Do Warrants 

48 


- 

- 

- 

> 

- 

FP. 

11.6 

192 

180 $A<tem Plug 

192 

+3 

tQ2fi% 

ai 

1.4 

11 2 

150 

FP. 

7X1 

149 145*2 tehbowns 

145b 


WN3.Q 

XI 

2.8 

1X4 

100 

FP. 

efi* 

93 

85*Z BZW CommodHee 

85*2 


- 

- 

- 

- 


F.P. 

5.78 

47 

37 Da Wits 

37 


- 

- 

- 

- 

- 

FP. 

46.4 

104 

66 jjCdhsM 

68 

-1 

- 

- 

- 

- 

2B0 

FP. 

X3 

287 

280 ChuchH China 

285 


RN930 

22 

43 

1X0 

141 

FP. 

2X5 

143 

143 Eure+eln 

143 


WNX2 

13 

6.4 

11 A 

- 

FP. 

487 J) 

495 

485 FWaBy Spec Unta 

487 

+2 

- 

— 

- 

m 

■ 

FP. 

8&4 

178 

108 Rhone C'tA 

183 

♦10 

HN0.75 

ZS 

06 

543 

100 

FP. 

11.0 

101 

100 Faebury Smlr C 

100 


- 

- 

- 

- 

100 

FP. 

28L8 

102 

98*; For 8 Cd &ng C 

100*2 

+% 

- 

- 

- 

- 

100 

FP. 

303 

102 

96 Home Govctt >000 

10 1 


- 

- 

- 

- 

_ 

FP. 

29.1 

100 

90 INVESCO Korea C 

97 


- 

- 

— 

- 

180 

F.P. 

16X3 

223 

205 Irish Permanent 

2Z1 

«4 

iM9L0 

2 3 

6 A 

7.7 

215 

F.P. 

89J 

232 

229 JJ8 Sports 

231 


RNtO 

2A 

32 

14L1 

120 

FP. 

0X5 

131 

120 SeaPortect 

129 


- 

- 

- 

_ 

115 

FP. 

997.0 

12& 

117 TLG 

125 

♦1 

WN3J5 

20 

X6 

173 

170 

F.P. 

19.4 

173 

165 Tete-Ctno Cea 

165 


RN5.44 

22 

4,1 

11-4 

100 

FP. 

17.6 

102 

102 WtAngfan un. 

102 


- 

- 

- 

- 


RIGHTS OFFERS 


Issue 

price 

P 

Amaru 

paid 

IV 

Lawttt 

Renun. 

date 

1994 

hflgh Low 

Stock 

Ctostng 

price 

P 

+or- 

77 

Mi 

30/12 

3pm 

2pm 

ApoBo Metals 

2pm 


31Q 

M 

20/12 

4ipm 

16 pm 

Kenwood Appl 

16 pm 

-a 

295 

Nd 

5/1 

80pm 

35pm 

Lard 

35nm 

-a 

27 

M 

28/11 

3*7pm 

2*2Pm 

Marita Inti 

2*2 pm 

->2 

37 

1ft 

3 n 

5pm 

3pm 

OMI 

3pm 


95 

W 

83712 

15pm 

6pm 

Preroac 

8pm 


285 

ns 

an 

57*2Pm 

40pm 

Seton HeaWL 

40pm 

-a 


FINANCIAL TIMES EQUITY INDICES 

Nov 24 Now 23 Now 22 Nov 21 Now IB 

Yr ago 

■Mgh 

1 w 

Ordinary Share 

2326.9 

232X8 

238B.1 

23998 

2407.0 

23552 

271X8 

2240.6 

Ord. dhr. yted 

4.48 

4.49 

4X9 

483 

4.32 

386 

4JS1 

3.43 

Earn. ytd. 84 id 

X60 

B.B 1 

6.44 

6.35 

833 

456 

681 

X82 

P/E ratio net 

17.47 

17.45 

1720 

1X18 

1984 

2784 

33A3 

1684 

P/E ratio nU 

17.06 

17JO 

17i5 

17.90 

17.96 

25.54 

3080 

17JH 


-Fa IBM. Quinary Snars mdax sinco conpkata K MOh 27133 am W; tow «a« 2BA1/40 
FT Onteary 5»w« hOra Been data 1/7/35. 


OttAn m y Share hourly ti i a nga a 

Open 930 1030 TT30 1230 1330 1430 1630 1630 High Law 
2330.5 23303 2330.8 233a5 23333 23303 23302 2331.6 2329.3 23343 2326.9 


Nor 24 Nov 23 Nov 22 Nov 21 Nor 16 Yr ago 


SEAO basons 22388 27343 24384 24305 

Equity turnover p>n7t - 14993 13313 14483 

Equity baigainst - 29,950 25360 27307 

Shares traded tmqr - 6813 849.6 586.4 

TExcfextexi kiBs-mailtoi b ra toae a rad wiu e aa tanow. 


25.114 

12803 

28340 

5463 


27342 

1560.1 

32.731 

6233 



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-**■- 42 


FINANCIAL TIMES FRIDAY NO^EMEEB.25 1994 


CURRENCIES AND MONEY 


MARKETS REPORT 


UK political woes cause sterling to weaken 


Sterling came under some 
pressure on the foreign 
exchanges yesterday amid talk 
of the government resigning if 
it was defeated next week in 
legislation over Europe, writes 
Philip Gmoith. 

Mr John Major, the prime 
minister, confirmed that he 
would ask the Queen to dis- 
solve parliament if the govern- 
ment lost a vote on the Euro- 
pean Union budget 

The pound finished half a 
pfennig lower in London, at 
DM2.4339, from DM2.4394. 
Against the dollar, It closed at 
$L562l from SUNH. 

Although sterling was the 
issue on the minds of traders, 
the level of market activity 
was low. With the US market 
closed for T hanks giving, many 
investors took to the sidelines. 
“People don't want to do any- 
thing until we get full liquidity 
hack on Monday," said Mr 
Adrian Cunningham, senior 
international economist at UBS 
in London. For this reason, 
trading is expected to be quiet 


again today. 

Elsewhere, the lira was 
unchanged against the D-Mark 
at LI, 034. but sentiment 
remains nervous amid ongoing 
uncertainty about the political 
longevity of prime minister Mr 
Silvio Berlusconi and his gov- 
ernment 

With Wall Street closed, 
there was little impetus for the 
dollar, which traded sideways 
to dose at DM1.5582, from 
DM1.5537, and Y98.435 from 
Y9&335. 

■ With little market activity 
to co mment on, it was no sur- 
prise that analysts resorted to 
outdoing each other with 
Thanksg iving metaphors. Thus 
Swiss Bank advised its clients: 
“Better give some of that tur- 
key to the dollar as it is going 

■ Pound ta H— Yocfc 

Bov 23 — 0038 — - Pmv. do» — 

£*p<* 1-5700 13895 


to need every ounce of 
strength to stay at current lev- 
els for the remainder of this 
year." 

In fact, the dollar has been 
quite well supported in recent 
days, bolstered by the good 
performance of US treasuries, 
and lingering speculation 
about the possibility of a Ger- 
man rate cut. 

Yesterday, however, was not 
the day for lower interest 
rates. The Bundesbank council 
wasted little time In deciding 
to leave interest rates 
unchanged - the repo rate at 
A85 per cent, the discount rate 
at 45 per cent, and the Lom- 
bard rate at 6 per cent. 

There had been little expec- 
tation of a move in official 
rates, but some speculation 
about a return to a variable 
rate repo. Mr Julian Jessop. 
international economist at 
Midland Global Markets, said 
one reason why the Bundes- 
bank avoided this route was 
that the objective would be to 
let the repo rate fall ahead of a 


Sterling 

Against the doiiar (S per £) 

1.66 • 


1.82 



1.58 


Sep 1994 Now 
Source; FT Grapftte 

cut in the discount rate. 

At the end of the month, 
however, when banks need to 
meet reserve requirements, 
there is a risk of the repo rate 
being bid up by an accident of 
liquidity. 

Also, “the Bundesbank 
would only ease rates if it were 
confident that the bond market 
would benefit," said Mr Jessop. 
Given continuing uncertainty 


about fiscal policy and next 
year's pay rises, he said any 
sign of weakness would not be 
well received. 

■ The next few days are poten- 
tially turbulent ernes for ster- 
ling. Monday sees the crucial 
vote on EU contributions, 
Tuesday is Budget day and 
Wednesday is the deadline for 
any challenge this year to 
prime minister John Major as 
party leader. 

Mr Avinash Persaud, head of 
currency strategy at JP Mor- 
gan in London, commented: 
“The weakness of sterling is 
limited at current levels. Once 
the Wednesday deadline is out 
of the way, sterling will have a 
firm foundation for some 
future strength." 

Mr Persaud said this con- 
sisted of the unusual nature of 
the UK economic recovery: 
very low core inflation, com- 
bined with a pre-emptive rise 
in interest rates; and strong 
economic growth, alongside an 
improving current account 


No* 24 £ S 

HOBS 7 171330 - 171341 109700 - 168380 

fraa 274230 - 274500 174830 - 175030 
Km* 0.4871 - 04874 03991 • 02892 

POtnd 3722S3 - 272705 238353 - 238603 
FfcSSfe 501730 - 502230 321900 • 321000 
UAL 57288 - 07404 33715 - 33735 


Austria 

(Sch) 

17.1334 

-04)396 

257 - 400 

17.2064 17.1062 

17.129 

03 

17.1172 

0.4 

. 

Belgium 

(BFl) 

50.0903 

-0.0901 

744 - 081 

60-2620 500140 

50.0653 

0l6 

4S3803 

0.9 

49.5003 

Danmark 

(DKfl 

25305 

-0.0322 

274 - 338 

9.5802 

9.6151 

95287 

02 

B33S4 

-03 

9.5224 

FMand 

(FM> 

7.4683 

+0.0197 

583 - 772 

7A7BO 

7ASS0 

• 

- 

- 

- 

- 

Francs 

(RFi) 

843809 

-0.019 

588-630 

8.3939 

8.3424 

836 

ai 

83527 

04 

83905 

Germany 

(DM) 

2X339 

-0.0055 

331 -347 

2.4452 

2.4293 

24320 

05 

2.429 

OB 

23975 

Greece 

(Dr) 

3754)84 

-0.732 

826 - 202 

375.783 373.154 

- 

- 

- 

- 

- 

Ireland 

PQ 

14)111 

-0X007 

104 - 117 

1.0138 

10098 

1.0109 

03 

147105 

02 

1.0124 


500903 

-00901 

744 - 061 

502520 500140 

600683 

06 

49-9803 

OJO 

405003 

12 

117.0 

Luxembourg 

ILFri 

320670 

♦0107 

620 - 720 

32.1050 31 9700 

32.047 

0.7 

31397 

09 

31.757 

13 

2.7265 

-0.0059 

272 - 297 

2.7398 

2.7228 

27273 

OO 

27235 

0.7 

26919 

12 

1208 

Netherlands 

CFO 

1.7467 

*0.0051 

462 - 472 

1.7485 

1.7418 

1.7459 

03 

1.7435 

0.7 

1.727 

1.1 

10.6816 

-00174 

583-649 

10.7131 

106110 

106613 

OO 

106648 

-0.1 

10.6637 

ao 

85.7 

Norway 

(NKr) 

68254 

+0.0239 

244 ■ 264 

6.8367 

6.7908 

6. 6326 

-13 

63444 

-1.1 

63524 

-04 

248322 

-0281 

404 - 640 

340888 240874 

250252 

-04 

253.432 

-7-9 

. 

. 

_ 

Portugal 

(Ea) 

159.100 

*0.65 

050 

• 150 

1 59.270 158.070 

159.675 

-43 

1808 

-43 

16435 

-33 

203.059 

-0528 

987 - 130 

200884 202.725 

203.429 

-22 

204.084 

-20 

208.969 

-12 

85.6 

Spam 

(PU) 

129.995 

*033 

970 ■ 

020 

130.190 12a 700 

13032 

-2.1 

13064 

-2.0 

132.745 

-2.1 

113142 

*03203 

045 • 238 

113330 113606 

110327 

-lO 

11^707 

-io 

11.8327 

-12 

759 

Swaden 

(SKr) 

74352 

*0 051 

302 - 40J 

7.4475 

7 3738 

7.4464 

-1.8 

7.4707 

-13 

73892 

-2.1 

2.0631 

-0.0044 

624 - 838 

2.0719 

20591 

20589 

16 

20526 

20 

2.0106 

25 

1204 

Switzerland 

(SFrl 

1.3206 

*0.004 

205 - 210 

1.3220 

1.3175 

13186 

2.0 

13141 

2.0 

139 

23 

. 

- 


. 

re 

- 

- 

- 

- 

. 

. 

79.0 

UK 

(0 

1.5821 

-c.ooa 

618 - 623 

1.S710 

1 5596 

13622 

ao 

13822 

OO 

13589 

02 

13784 

-0004 

779 - 788 

13836 

1.2763 

12783 

0.0 

12788 

-0.1 

12718 

0.5 

- 

Ecu 


1.2220 

-0.0024 

217 - 222 

13259 

13208 

1322 

0.0 

13224 

-ai 

13258 

-03 


Italy 

Luxemboug 

Nothortands 

Norway 

Portugal 

Spain 

Sweden 

Switzerland 

UK 

Ecu 

SORT 


Argentina (Peso) 13610 -00079 SIS - 621 13650 13610 

Brazfl (RQ 13340 403057 322 - 356 1.3388 1.3295 


USA (S) 1.K 

PKfflc/Mddfl East/AMea 
Australia (AS) 23! 


Saucfl Arabia (SR) 5.1 
Singapore (SS) 2J 


-3.1 253232 


Europe 

Austria (Scry 10.9685 +<M»i 660 - 710 10.9630 10.9430 10961 

Belgium (Bfn 32.0670 40.107 620 - 720 32.1050 313700 32.047 

Denmark (DKr) 6.1013 40.0108 003 - 023 6.1085 6.0830 6.1006 

Ftriond (FM) 4.7811 40.0371 761 - 860 4.7900 4.7510 4.7783 

France (FFr) 5.3525 40.0153 520 - 530 53585 5.3420 53516 

Germany (D) 13582 40.0045 579 - 584 13605 13544 13574 

Greece (Dr) 240.110 +076S 060 - 160 240300 238.910 242.81 

Ireland {IQ 1 5451 -0.0067 443 - 458 1.5501 1 5426 1.5454 

Italy (U 1610.65 43.15 030 - 100 1611.60 1603.00 1614.6 


09 10847 

03 31.757 

-03 6.1078 

1 07 4.7650 

0.4 53185 

03 13382 

-13.4 26836 

-02 13414 

-2.7 1657.15 


-0.0081 

467 - 482 

2.1588 2.1450 

2.1478 

-0.1 

21465 

02 

21464 

ai 

861 

-00247 

788 - 852 

53900 53760 

- 

- 

- 

- 

- 

- 

- 

-0.008 

618 - 623 

13710 13598 

13622 

03 

13822 

OO 

13589 

02 

82.7 

-00085 

553 - 573 

2.0649 23640 

23584 

-12 

20811 

-0.9 

2375 

-03 

_ 

-0.0631 

746- 800 

12.1478 123606 

120683 

03 

12064 

04 

120188 

03 

_ 

-02505 

898 - 133 

492740 409350 

. 

. 


- 

- 

. 

- 

-0335 

697 - 824 

154300 153380 

153.331 

3.4 

152341 

27 

147221 

43 

191.1 

-00157 

941 -970 

4.0147 33906 

• 

- 


- 

- 

- 

- 

-00058 

158 - 188 

23214 23140 

23218 

-22 

25311 

-22 

2561 

-13 


-03954 

147 - 827 

37.1980 37.0000 

- 

- 


. 


. 

- 

-00303 

575 - 600 

53922 53510 

. 

. 


- 


. 

- 

-O011 

888 - 911 

23015 22840 

. 

. 


- 


. 

- 

-00276 

241 • 282 

53558 5.5203 

. 

■ 


- 


. 

_ 

-03257 

893 - 226 

63941 6.4850 

. 

. 


- 


- 

- 

-7.19 

147-203 

124937 124030 

■ 

. 


. 


. 

_ 

-02952 

582 - 854 

403927 403196 

- 

- 


- 


- 

- 

-01473 

BOB - 981 

302530 39.0360 

- 

- 


- 


- 

- 


SOP 

Americas 

Argentina (Paso) 0.9999 *0.0001 998 • 999 03999 03997 

Brad (Rl) 0.8540 *0.008 530 - 550 0.8570 0.8520 

Canada (CS) 13748 40.0019 745 • 750 1.3757 1.3738 1.3745 

Mexico (New Paso) 3.4465 *0.002 440 - 470 3.4550 3.4390 3.4465 

USA tS) ... 

Pjciffc/Kfldtid East/AfHcfl 

Australia (AS) 13164 *03007 160 - 188 13170 13130 13171 - 

Hong Kong (HKS) 7.7317 -0.0006 312 - 322 7.7328 7.7310 7.7297 

Ml (Rs) 31.3700 *0.0012 675 • 725 313725 31.3675 31.44 - 

JWI CO 38.4350 *0.1 100 - 600 983000 983500 88.155 

Malaysia (MS) 25579 *0.0031 574 • 584 25590 25560 25549 

New Zealand (NZ$) 1.6115 *0.0045 108 - 121 1.8128 1.6051 13125 ■ 

Phftpptoes (Peso) 23.7500 -0.13 000 - 000 233000 227000 

Saudi Arabia (SfQ 3.7507 -a 0001 505 - 509 27509 27505 27543 

Singapore (SS) 14860 *0.0005 855 - 655 13870 13642 1.4845 

S Africa (Com.) (R) 25378 *0.0005 370 - 385 25405 25360 3 -5533 ■ 

S Africa (Ffrv) (R) 4.1650 *0305 550- 750 43100 4.1500 4.193 ■ 

South Korea (Won) 794.950 -03 900 - 000 795.400 794.800 79735 • 

Taiwan fTS) 283295 -0.0535 250 - 340 263915 263200 263495 - 

Tha2and (Bt) 26.0245 *0.0346 230 - 260 253270 243700 25354 ■ 

1S0R rats tar Nov 23 BMArdar sp eoda fci Ow Dotar Spot tatfe alrew trty 9 m M One d B Ml pfc 
but we >ip ) «l by current taaraal mo. UK Hnl A ECU are cpioted In US cuieney. JP. Morgre 1 


- 1 .46738 *0.0026 738 • 738 


t5QR rang (or Nov 23. BUtoflw npreadg n On Pouvl Spat t*fc*s 9» ady On tret tnras daanrel ptacre. Forward rota* ani nx dractfy exjotad to me 
market but we (mpfed by cures tatteat ratM. 3Mng indrec catadaM by m« Bank ot Engand. Bare anrage 1BB5 - noted. Ohrid Mri+toaa In bah 
9*9 and the Defer Spot trete (toured tom THE WM/REUTBIS QJ3SMG SPOT RATES. Sane «kw> sra reuvM by 9m F.T. 


13741 02 13783 -03 

24463 -03 24557 -03 


13189 -03 13317 -13 89.1 

I 7.7285 0 3 7.7382 -0.1 

’ 31385 -2.7 - - 

97335 27 94.47 43 151.1 

23504 13 23784 -03 

13149 -03 1.6239 -03 

27611 -1.1 27757 -0.7 

1j461 13 13445 13 

25854 -5.4 27503 -20 

43375 -73 4.475 -7.4 

80135 -23 81935 -21 

263895 -0L9 - 

22145 -13 253485 -2.1 
. r ore si d rates are not efraeby quoted to Da natal 
ne) tacaaNo* 23. Baasaage 1990-100 


WORLD INTEREST RATES 


HONEY RATES 

M cn re ot u r 24 Ore 


»*.' s*-. : -2: ’X 


Despite short term difficul- 
ties over the EU bill, Mr Per- 
saud said it was arguable that 
political risk in the UK had 
actually felim. “Even tfwg gh 
there Is a significant chance of 
this government being 
defeated at the next election, 
the opposition does not appear 
to be offering a very different 
stance in terms of monetary or 
fiscal policy.’ 7 

■ The Rank of En gland pro- 
vided UK money markets with 
SlOOm of assistance at estab- 
lished rates, and £330an of late 
assistance, after forecasting a 
£650m shortage. Overnight 
money traded befcweei 4% and 
7 per cent Three month UBOR 
eased to 6 per cent from 6& par 
cent 


week ago 
Qmreqi 
we ak ago 


S w fao ri a pd 
week ago 
US 

weak ago 


;6*. - 


6Sfc-. 

■ .81': 


• ex 

m'- 


&2S : 

536 

525. U. 

330' 

- 

>*• 

‘Mr- 

■71 

.■Hr. 

...«T 

8- 

■«l. 

534 

5.73 

&3ir . 

SJB 

••'..44 ' ■■ 

4#. 

Hr 

.4. 

»•.. 


«i ■: 



21 


. 2 * 


*¥ 



834 . 

.888: 

aw/: 

634 

8» 

- 4' 

3% 

-.•■4 


730 830 

730 830 



■ JUBOR FT London _ •' -‘ iS-1-.^* '-V-'. 

WertMkHdng . - JJ 2 r SS : 4 ■ 5f - - - ' - 

wook a go • - 0 

us Dote CO - 537 - 538 634 .MB--.- - r . . 

WA6CM9 - 537 ■ 273 - 004- 634 . - - - 

SDRUMDt - aw r' V “ : 

week ago - 3% S* “ 

M oaoteed au tor 510m qaataf Id the naMbrto* ratorere barfed re* *"**8 

Ma T«A BakoCIMn Sbc^al MMIIIMiiMk . 

Md rate ZTihown lor tha doraeefic Man* feta, ,U8 S COB aid m Utod papa*. **. 

EimO CURRENCY INTEREST RETM . . . 

MOV 2* awl 7dw» One TWw . Sbi,, - One \ 

twm nodoa month rmodtre months yaw 


Brfgtan Franc 43 -4(2 43 - 4fl - 4» - * 5 5V= 8 - 5^ 

Dertsh Krone 5k- 5% - 6*2 -* / jj*t 

O-Morit 4B-4S 6-45 8-*V 

OtDch Glider 5-4% 6i - ^ SA - ; gl -ft . -5V ^ 

Ranch ftanc 5% -A M-Si 5S-6i : 5% - 5k 

PHWDtEA 83 -BH 83-83 V £rl& 

Spate Paste 7lj - 7% 71* -.7? 7A - 7A. . 7^ -7% .8^ - ft- jf* - j» 

State 4% -4^ 5V -5 43-511. 8 - 5B” 1 8Ac-8& : 7Y-7V 

S wtaRwc 3& - Sft 339-3h, 3%-3h 

Csl Date 53-6^2 5i - 5 1 * - fi?4 5k-5% . ; 7i- 74 

US Odor 5A-6i^ 5A-5& &A-5& 53 - S3 Bit- 8ft. .63 - 6fl 

MsnLta 9-th. S-tt 8^,-Bk 83-B& 9i-9i J3-J« 

” 21*-&.S-2V 2A-2V 2V-2A:««2-2i. 2B-2B 

MsiSSbO A-A 4-3% 4l« -4 <A- 4A 4% -4 J| 4k- 4% 


SNtosRnc 
CteDalv 
US Date 
Batei Lira 
Yen 


43-43 
5k- 5^ 
43-43 

5-4* 
A-A 
83 -B« 
Vz-7\ 
4%-4% 

5a-6i 
9 - 7*2 

21**24 . 
2k-2h 

» cal lor the 


AotaiSSbg 2\-ft 4'A 4*t - 4 ‘4% > .4 V J 4* - 4* 

Short ta re mm m eta frr ttw US Catered Van. odore awe dte* nrtfco. , ■ 

■ THWM»QI«TWrmonwmj»mig4A'nf : )Pari»(rttwbartco<fcf9drte ... 

Opm Sett price Change High Ixta ; EaL rel Open frit. 
Doc 9430 ‘ 9439 - 9430 -■ 9437 .'13371 S9330 

Mar 94.13 94.15 . *203 94.16 9439 ■' 22821 48865 

tel 9289 93.74 *006 9276 9337 5329 32B02- 

Sep 9234 9238 *005.. 9241 . 92??. 2*43. ; 22JJZ7. 

■ TWMMOWTM WIIOP4HiJIW(UFpg' Stan pofrite of 10078- ■ . •• 

Open Sott pries Change' H&t :. Low . EaL vol Open frit 
Dec 9295 -0.01 "0 2827 

Mar 9240 - 1 .0 . 1454- 

Jun 9234 •. ■- •-.... 0 "-389 

Sep 9235 -031 u 0 ■ 177 

■ T WM ■OMTH aunOMAiaC PUTURBS (UFfQ* DM1 m polnta of 100% 


Open 

Sett price' 

Change 

Hflh 

Low 

Eat Wl 

Open hit 

9435 

9433 

-032 

9435: 

94.81 

27544 

131510 

94.72 

94.72 

. 

84.75 

94.70 

32019 

18182S 

94.40 

9441 

*031 

94.44 

9438 

- 19911 

127187 

94.02 

9436 

*034 • 

9439 

9430 

11480- 

82378 


UWOUBawrjmTKIWWmStUFFQLIOOftnpdlnaiollOOW 
Sett price Change Wgh Low EsL wol Open frtt. 
91.14 032 91.19 91.12 .- 3191 30081 

9034 032 . 9050 - 9032 : 3063 34917 

8939 033 8933 8938 - 337 .10336 

8938’ - 004 8931 8935 233 21S81 

UB O JWB9 WMIIC WIIUIM (UFFQ SBrlm potte of IQOtt 


- 

Open 

Sett price 

Change 

Mflh 

Low 

Bstm 

Open Int 

. Dec 

9630 

9630 

-031 

9831 

9538 

. 970 

17385 

_ Mar 

8371 

95.78 

tins 

95.77 

' 95.70 

1973 

19128 

_ Jun 

9540 

9645 

034 

85.46 . 

9640 

428 . ■" 

6095. 

Sep 

9635 

85J1 

008 

95.13 

■ 9535 

44 . 

3053 .' 


| Eaxlm pdnts of 100% 



Open 

Sett price 

Charge 

Hflh 

Low 

EsL KOI 

Open fed. 

Dec 

94.10 

94.12 

0 

94.13 

94.10 

878 ■ 

.- 7887 

friar 

9279 

9834 

034 

9288 

93.77 

-1089 

7941 - 

Jun 

9329 


004 

9237 

8327 

332 

4124 

Sep 

9279 

9286 

036 

9286 . 

9279 

283 

2511 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 



.■ D4UIK nmiRES (IMM) DM 125,000 per DM (Nqy 23) 



■ JAM 

MESE YHI IWIIMBS OMfrl) Yen 123 per Yen 100 (Nov 23) 



Open 

Sea price 

Change 

High 

Low 

EsL vol 

Open fed. 


Open 

Sett price 

Change 


Low 

EsL yd 

Open W. 

Dec 

06438 

0.6439 

*00014 

06467 

06435 

30313 

97.720 

Dec 

13195 

13187 

- 

1.0230 

13186 

21.779 

75317 

Vhm 

08460 

0.6452 

*03014 

03474 

08474 

394 

0476 

Mar 

1-0300 

1.0274 

-0.0002 

13315 

13272 

1.084 

10338 

Jun 

06490 

03474 

*03013 

08490 

03490 

34 

1334 

Jun 

13413 

13385 

-0.0004 

1.0413 

13386 

19 

838 


■ 9WIWIWDRyn— »( BIM)3R- 122000 pre SB - (Nor 2$ 



■jraunnnwB qmm) £82300 per e (Nw 23) 


uec l-oore 1J6S2 +0.0018 13782 13B78 11330 

Mar 13730 13890 +03018 13760 13880 790 

Jun - 13682 *0.0018 13760 13890 39 

EMS EUROPEAN CURRENCY UNTT RATES 

Noe 94 Ecu con. Rale Chaim %*/-frran % acre 


m 


Margined Foreign Exchange 
Trading 

Fast Competitive Quotes 24 Hours 
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« i TOtrermrE seevicb 




38 DOVER STREET, LONDON WIX SKB 
TEL: 0171629 U83 PAX: 0171496 0022 


LIVE FROM LIFFE - 0839 35-35-70 

Dial now red freer tbe Footae mere with Bre commentary from UBe; as It happens. 
For detalh ol all LHte Bnea red oar frnmc tal I n lom ia tlon aenricea. c»H 071^95 9408 
Call* ore durged at 39p7min cheap rate, Op/mln all other Uses. 

Futures Pager Ltd. 19/21 Orel Tower St, London EC3R 5AQ. 


bitabrek Saertng 7 • 4* 5*, -4* 5A-6A 6A • 5H B& - 8* 7ft -7 i 

StalngCOa - - 5>a-5A 5S-S* 7£-7A 

Treasury B*3 4i-6l| 

BBs - - 

Local autfwrtty depe. 4fJ - 4ft 5,'« - 4& 5=8 - 6£ 8-5% 8,i - 6& 7A - H* 

Diacaunt Marita deps 8^ - 5 5^ - 4}J 


UK ctearng bank bare fcndng rare 5% par cent from September 12, 1994 

Up to 1 1-3 3-6 6-9 9-12 

month month months months months 


Certs ot Tax dep. £100300) 1>2 4 3\ 34t 3h 

Cana ot Tta dap imder CIOOJOO re llapo. Papoaaa ta tre—i tar cte Vpe. 

Are. tender rets ot (Ssoount S.SZMpc. ECGD Bnad rare Sfe. &port Rwic*. Mata today Oct 31, 
IBM. tered ife ta period Nov 2& 1994 re Doe 25. 1094. BchMiMa I A ■ 7.23pp. B Matenc a rare ta 
period OcM, IBM to Oct 31. igH.SctenM IV 4 VSMapaftem Moure Boa Rareripe ten No. 
1,1894 

■ HM MOWTM SIBUM FUTURES (LIFFE) ESOO^XW points at 10096 


Ecu can. 

rates 

Rale 

against Ecu 

Chare* 

on day 

H*/-trom 
cen. rata 

94 spread 
v weakest 

219672 

214272 

-000066 

-248 

833 

402123 

303451 

*03049 

-210 

5.70 

134864 

1.91208 

-000028 

-1.93 

5.45 

0308628 

(L794656 

*0000214 

-1.73 

5^4 

n.nww? 

636611 

-000408 

042 

299 

7.43879 

7A8Q07 

-030904 

066 

274 

192854 

195222 

+0135 

123 

217 

1542S0 

159528 

*0055 

242 

030 

48ERS 

284313 

294319 

♦0063 

1138 

-7.15 

1793.19 

197636 

-0.42 

1025 

-6.19 

0.786749 

0785804 

*0001503 

-0.12 

255 



Futures Call 



i:\X-FRFH SPECLX.ATION 
IN HIIKES 


ToottataypurtaeCMdrre bo* pn u rfe uw r rj 
Tta<taMldadMMByerbrUafeBia>i071«STa8 ar-te 
■ore IG fades Pic. 9-1 1 OraansarGvdere bndanSamrOBa 


^M&FutureView 




Open 

Sett price 

Change 

H(* 

Low 

EsL vd 

Open Int 

Dec 

9276 

9277 

-032 

9278 

927S 

7854 

128651 

Mar 

92W 

9337 

-002 

9336 

8203 

13124 

S4238 

Jim 

9248 

9249 

-0.01 

9261 

9245 

2662 

5581 B 

Sep 

8200 

9201 

-031 

9203 

9137 

1790 

64465 


»to(r 1793.19 107B38 -0.42 1035 -6.19 

WC 2786749 a 785804 *0301503 -0,12 335 

Ecu cental ares are by the Eurapare Cenvnteen Cwrenctos are « deaearteg ittere avengOL 
Pareareaga ebangee n ta Eon a paten tenge d eno te a ware cumrey. Dtega n c a tewa tw 
ratla bteare too apeads me pereretaga dltaence batwean the ackta mretat and Ecu oanbal roue 
ta a arwncy. and are madman p M i iOtal pa w arpa dto tal on ot me cwnaicy'm nurtegt rare from ta 
Ecu c a nte raw. 

p7/SriB) Srerfeg and Utei Ura au re andart bora ERM. AdutoM ctetaad by ttre RrencW Tbnea. 


I E31 250 (cents per pouxfl (Nov 23) 


Traded on APT. M Open Maran flga. m ta previous dtqr- 


■ short smura ornow gjFFE) ES00300pointaoM00N 


Sbfito 

Price 

Dec 

- CALLS - 
Mar 

Jun 

Dec 

— PUTS 
Mar 

9375 

0.12 

034 

035 

0.10 

0.72 

9400 

032 

031 

003 

02S 

094 

9425 

0 

0 

031 

048 

1.18 



A subsidiary o( the LGE 


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r r'od 0/ ■'iv ■“ rCl'^UT-* Al. 


Cik Anne Whitby 
T el 0171-734 7174 
0 71-439 4966 


WORTH EURODOLLAR 0MM) $1m points of 10096 (Nov 23] 


Eat wt Inal, Cte 3006 Pure 11M1. Pievtaut day's open W, Cte 343818 Puts 236051 




V.*" 0 


IRLL IOla\hi:\:i\AK 


071-S65 0800 




It Old Jowiy 


Tct 271463 9600 
Fie dll-9750970 


Adorn S Company — 275 

Afcd Trust Bat* 5.75 

AtBBank 275 

SHereyAn&baEher 275 

Ber*arBBndB — 275 

Banco Bfeao Vteeya. 275 

BarkotC)!pnia 275 

Bor* of fratanef. 275 

Bank of Inda 6.76 

BankofScoBand .273 

BaGtspBrefc — 275 

BrftSkcfMdEBSt..^ 2?5 
•emreSNpfey 5 Co 1315.75 
CLBonkNedsatand... 275 

after* NA .....5.75 

CyiescWoBaf* .275 

T1»G(K8»30ib Barit. 275 

C0Utt8*Co.. 275 

Cna* Lyonnais 275 

Cypms PopUar Bank -275 


Duncan Lawrio 275 

BxbtarBaALfrnftd— 275 
FtanddfrOmBM. 25 
•Robert Raring £ Co _ 275 

— 275 

*aJma»Mahai 275 

HttABankAGZwich .275 

•KRtibnaSank 276 

Hate* & Gen frwBk.5J5 

•W Samuel. 275 

C. Hcara&Co 275 

Hongfsmg&ShantfBL 275 
JufcmHor^eBet*..- 275 
•Leopcfd Joseph 4 Ste 275 

Lloyds Bar* _275 

Meghra) Bank Lid 275 

MUandBe* 275 

* Mount Barftfrig 8 

NeMtefriftetor 275 

•Rea Bothers 275 


* Raaufo Guarante e 
Corporaflon Lkndod to no 
longer Quantised ae 
a baling ineStutox 9 

Royel Bfr Scotend _ 275 
«8Mfi A Wimsn Sees . 275 

TUB... — 275 

•Unfed Bt of KjmH- 275 
UhBy Trust Bar* Pfc_ 275 

Western Trust 275 

Vllhfen yUfrtet... 275 
VorltSNre Bw* 275 

• Members of Union 
kMstmHlBBrMng 
A s ao dtt fcei 

* fnadmWntraflon 


Dec 

9457 

84.60 

*038 

9432 

9457 

1345 

13388 

Mar 

8293 

94.05 

*0113 

9439 

9233 

3,480 

11362 

Jun 

9246 

8248 

*013 

9248 

9245 

1508 

1,896 


flga. are hr prerim day 
K OFTIOM (UFF^ DMIm points Of 10094 


r*> -FOREX -METALS -BONDS -SOFTS 

'* y Objetfive analysis for professional investors 

;5> 0962 879764 , 

| ^ f \ [) Rennes Hoos:, 32 SojthiatcSt.’cet.W .-cnestcr. 

y ' - ■ .. Hants S023 9EH Fox 0424 7740S7 


Straw 

Price 

Dec 

Jtn 

CALLS - 
Feb 

Mar 

Dec 

Jan 

PUTS 

Feb 

Mar 

9475 

0.10 

039 

012 

014 

002 

012 

015 

017 

9609 

033 

032 

004 

005 

019 

030 

032 

033 

9525 

0 

0 

031 

OOI 

042 

053 

064 

054 


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To receive a FREE sample copy contact: 

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Wrwfram 

T cte tai fc B tote Utara SO WL 
VAT Rcpnadm Nuba; OB27S DTI 21 . 



BBL (Cayman) Limited 




Guaranteed Floating Rate 
Notes due 1997 
Interest Rate: 6.7375% 

Interest Period: from 25/1 U94 
to 25/05/95 
Interest payable per 
USD 250,000 Note: USD S.46&66 
USD 5<XM)00 Note: USD 16,93733 
By Fqji Bonk (Luxembourg) SA 
Agent Bank 



Eat ws. Bta Ote 8470 Pure «814. Ptetoua day's op« M. Cte 22Z718 PUB 20S2SB 
■ Bimo SWBS Rt*MC OPTOW JJFFE) St=r im points of 100% 


CITY I 


_ . TtoMreM Lredara in reread branas-Frereod red Spwt*. For ■ 

IN IlF-X 1 Iwxxfeirorad onacCTum npql ic rai aa fermoJQII 283 W+7 

-. 4j tawa ce ostmdty opered vritUa 73 ten. 

' --3a Set otx up-to-doic plica fcm to 9pm oalUelad page 603 


I 



TeL 071 4937050 
Fax: 071 49V 6279 


We arrange bare up to 90% Lou to Value. 

Mon competitive ud flexible terms for 

yalny UKftn naeidal property ft I FINANCE 
^opnwusnpiwdaofftin. 
Coa&etRldrenttaqGteoi » UK Q— tada t 



Weekly Petroleum Argus 

' WQue scares' far oil industr.’ 


Petroleum Arqus 

to !his newsist^- ( - - .-=- 




,5 Pi 














































1 






N DIA 

\\ S1NF.SS 

J 

t » I 5 H 


’’ 

-** I**” " 


^ IBO"’* - • 

', ."riT 1 ^ 

- ■ j .<*' 


rtV- ^ I 


, i w^T. i 




A*^ 5 . 

















XE W 


5ft £ft 






3.0 


30 


6.4 


14 


24 


24 

,,, 

24 

... 

24 

, 

24 

— 


1040 -GO 
247D -30 


an 14 _. 
aso 1.4 „. 
as z.1 _ 
86 3.2 _ 
U2 3.6 .„ 
7B _. _. 
108 5.4 _ 

105 5.4 _ 


INDICES 


US INDICES 














HW 

Uta 

24 

23 

22 


Low 


23 

22 

21 

160 1 


Bren* (28/12/77) 


w 1706154 1757757 3547040 16/2 1706154 33711 


M OntaWrt/UBQ 18B5J 1657.1 1B77J 234680 372 

MIMttVU&Q 944.4 SB07 9401 11*10 30 

GMIAMta<9VTaW9 364JS 38*37 38834 48636 2/2 

TMMl MWP/UBI) 1024BB 1BS2XE 103157 133225 1/2 


1857.10 23/11 
BMW 56 


37BM 25710 

vnus 8* 


BBjaonm 

Bnol 

Bongs (29/12*3) 

Candt 

Mot*UMr«lB79 

Qll|XMit (1075 

PatMto«tV1783 

CMS 

FGA fen (31/12*01 


133236 138405 1391.11 154285 92 133829 7/10 

435300 4494HO 557Y600 13® 880080 31 

U 371641 377B.12 427802 20(10 329866 207* 

M 40*890 405820 4BB890 2373 386940 24* 

00 197551 137246 218*40 U2 108848 26* 

OO 5601.6 5681 J 575840 21/11 3BBUD 4/4 


SSs^STLia 34335 3*156 34625 41538 2/2 337.19 8711 

SS»4PW2MJ) 18822 1«02 18826 W7M0 472 18M.W 37! 

SMJBI/lWffl 12810 8 1259A* 127158 WSJO 2fi 122736 2310 

SSSSj 19*68 189309 181141 23=33 M K8U2 25/10 

ST2nBVi2fiffl 77138 76848 78059 8EB27 16* 7034 5/10 

7i «Qft 210900 2223.10 248830 W 2TTBJ0 5/1 D 

K3^ 2*507 213331 207477 2Z7LH 1675 1HA 7/10 

SEspt/12/BO) 60811 B0844 80437 I1M> W MSI 2301 

SSStUrm 8M746 8578W B41W1 1220139 VI 639644 475 

g'swflSW 407539 402267 408226 492857 1279 MM90 5/1 

SSUlMWS) 48830 48231 49806 8tt» VI 44822 1277 

180730 179243 16=* 2082.16 2W 100814 1/7 

£5Lr»-, *4(1073 62866 SB- 64 K&27 817.17 106 SBUS 10/1 

StS^T SS 10103 «BB3 ttUUB «K 94486 1V1 

.w H 1B9B299 2!682*l 13/6 17MBM 4/1 

,iW i5252£! ’mo « Z7SiG 37131 IS® 24622 471 

MI« 300WMME) M p isota: nura ia* unai *n 

rnJSZinm S nmmamm nu«i 

“*** i«n40 UHB.1B OM4B 6/f 02BJ3 4/4 


PC (Nor 1979 W 241867 245136 288L17 8/2 

HUH 

CSSIUMn^nlSq 4323 4273 433.1 45U6 31/1 

CB3M Shr (End 83} 2713 20.4 271.7 29400 31/1 

Q(L 40 (1/7/86) 166817 195233 200881 243964 30 

DPo SEMK2/1783I 109030 103735 104895 1211.10 280 

Utttap (2/1/85) Z73847 272875 294630 330837 4/1 

***** 

HTA (1977) 29443 2&CJ 2942.7 322630 ISO 

SE&NL&taa&Vft 54233 54237 54935 64131 4H 

M*U 

JSE8DM (209/76) 20873* 20466 20923 2534* 7* 

JSEMl (2619/719 U494f BaQGJ E9B4.1 896419 22m 

Ss*b Nona 

XaraaCrnpB(4n/B0r 1085.18 109637 110670 113875 8/11 

kUHdGE (30/12*5) 301JB3 2B9J2 30237 35831 31/1 

AhmUm (10/37) 149930 147640 149600 100390 31/1 

SUB 8k 80 P1/13S9) 121041 120336 12M79 142331 31/1 

SOCGhbU (U4/B7) 61898 90397 01143 109329 31/1 

iriNn 

WBUMPr430MBT 834002 8371.46 634527 7191.13 3W9 


40830 21* 
75790 21* 

19*651 11/7 

98891 21* 

250733 9/3 

281 UO 20* 

32329 W 

1749*0 14(2 
6*4800 ion 

85537 W 

39895 2BH0 

13343V 67 

TI387Z 27/10 
87857 27/10 

5194JB3 19(3 

11BB59 4/4 


takaotab 367463 387789 378151 397838 359335 300839 4122 

01/1] m PVI/94) (UJ/ 32) 

ttam Bpnft 93.76 83.76 93.75 105*1 93.75 18877 54*9 

(21/1) (21/11) (1B/1US3) (1/10*1) 

rnKjnr (42219 144882 145845 (0BZ29 1422.19 186229 1292 

(2/2) CV11) 0/2*4) (8/7/22) 

Uttta 177 50 17394 17647 21746 173S4 2SU8 1850 

(3/l| font) (3178*3) W4733 

DJ *nd. day's Mtfl 37D4.B1 078794 I Low 98T2J1S 0GW98 I (T7l80reBc<*fc 
Day's l«0h 3&B5JB 07B8S1 ) Low 3K18.97 0877 20 ) (Actual* 

Stndad and Paara 

Cxitidk) i 44993 450.09 45830 482J00 *3882 48240 440 

an m 02I9Q (1*33 

MkODtabV 53631 53725 54818 563.18 51045 563.10 342 

(28/10) (21/41 {28/10*9 01*021 

FbOUl 40.79 3897 4040 46M 3947 4840 66* 

(14*) (22/11) BMW (1/10/74) 

mSE Conp. 24618 246J2 25058 2B7.71 243.14 297-71 64E 

dm wq d am dswa 

Am IBS IM 43240 43614 44148 48731 42297 49749 2941 

(2/a (28*1 (2/204 [9/i ana 

NASDAQ OBB 736.70 74141 757.74 80893 69339 80393 5687 

/1V9) 0«) (18/304) (31/10/73 


■ mmoa 

Dow Jcnas Ind. DO*. Ytekl 

5 & P (net Dtv. yteU 

6 8 P Ina P/E ratio 


Nov 18 Nov 11 Nov 4 Year ago 

2.79 2.7B 2.78 2-71 

Nov 16 New 9 No* 2 Year ago 

248 2-38 2 sn 248 

19.D3 2083 2085 2848 


BnstaK SET (SOM m 135749 133245 140281 7783.73 4/1 I1BB9 4/4 
IWqr 

UHW 014*001 IflBq 268864 268261 266062 aWBtWI t3fl 12980.70 ZV3 
WDflU) 

MSQpUHIWNK B067- 807J 6114 64890 201 B9140 4A 

Bmo* 100(26/10*0) 132985 131343 133143 154619 31/1 126646 500 

Bio ftp-lOO (ZQGSU 117240 115899 117657 131181 M 113648 5/10 

XNMbgm (31/12*3 CM) 30688 32081 39619 5/1 29028 21* 

BaitaOB Emg/7/USa M 1B9M 17146 WJJ» S6® M146 21/4 

■ CAC-4Q STOCK BPBX (MATIF) 

Open SMI Price Change high Low Esl voL Open InL 
Nov 18134 1834.0 *344 19404 1812.0 25.787 17425 

Dae 1823.0 10HS4 *840 1948.0 18214 4.702 35.496 

Jan 1831 4 18504 *33.5 19684 18314 101 337 

Cpan Mml floua* tar pmtaui day. 


■ STANDARD AMD POORS BOO H 

22 

Open Sen price Change 
Dec 446.00 45045 +3.40 

Mar 451.40 45345 +345 

Jun 45445 45740 +345 

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■ MBS/ YORK ACTOB STOCKS 
Watacsday Stacks Ctasa Cbanga 


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WORLD STOCK MARKETS 


FINANCIAL TIMES 


Friday November 25 1994 


EUROPE 


Strategists bearish as 
bourses stage recovery 


Bourses recovered yesterday, 
but strategists were not 
encouraging, writes Our Mar- 
kets Staff. Mr Nicholas Knight 
of Nomura raised the spectre 
of US mutual fund redemptions 
and forecast further significant 
downside distress. 

FRANKFURT extended 
Wednesday afternoon’s gentle 
recovery, the Dax index rising 
22.66 to 2,055.97 on the session, 
and by an Ibis-Indicated 15.74 
to 2,058.79 in the post bourse. 

Turnover fell from DM7 -5bn 
to DM5.ibu, Hie talk was of 
short-covering; above average 

gains by the end of the after- 
noon. for Deutsche Bank, 
Hoechst in chemicals and one 
or two engineers, were regis- 
tered mainly by the shares 
worst hit during the Calls of the 
previous two days. 

One of the main contrasts 
during the session was a 
DM7.10 gain to DM309.70 for 
BASF, on nine-month figures 
fax better than expected; 
Henkel at the less cyclical end 


FPSE >V-;.cV7v$ ir.-fc.:.:-. 


FT-SE Eurota* 100 
FI-SE SnMi 200 


BkrIOOO (BVHWCfc M0MW: M0- 1330 W: 200 - 138148 UMBar 100 ■ 132&1S 200- 137630 f MM 


US markets were closed for 
the Thanksgiving holiday 


of the chemicals sector, pro- 
duced a progress report in line 
with expectations, was totally 
outfhced by the BASF perfor- 
mance, and foil DM6 to DM576. 

Other tollers included Metall- 
geseUschaft. returning from 
suspension to an Intraday low 
of DM95, and a post-bourse 
close DM31 lower at DMlll. 

Mr Hans-Peter Wodniok, at 
Robert Fleming in Frankfurt, 
was still not attracted to the 
metals trader. Its planned capi- 
tal reduction, he said, meant 
an effective price for the 
shares of DM220, on which the 
company might be capable of 
earning DM10 a share at peak. 

MILAN struggled to keep 
pace with political develop- 
ments, the Comit index rising 
3.01 to 626.65 in a technical 
rebound after the 3.9 per cent 
slide during the previous two 
sessions. The mood remained 
tense, and trading was said to 
be exceptionally thin. 

Among the day's best gain- 
ers Was RAS, L285 higher at 
L15.Q73 amid arbitrage between 
the ordinaries and rights. 

Finin vest’s Standa rose LSO0 


to L35.000, but in very thin vol- 
ume of Just 1,500 shares, and 
Mondadori was L30 higher at 
Ll3£30 after Mr Silvio Berlus- 
coni, the prime minister, said 
he would sell his Fininvest 
companies. 

AMSTERDAM regained 
Wednesday’s losses, and saw a 
rise in the AEX index of 4.81 or 
L2 per cent to 406AL 

ING helped the market as 
the banking and insurance 
group turned in better than 
expected third quarter figures 
and the shares rose FI 1.80 or 
23 per cent to FI 80.00. 

Philips did even better on 
the day as some US funds 
returned as buyers. lifting the 
shares FI 1.70 or 3.4 per cent to 
FI 52.30. Analysts noted that 
the shares had been oversold 
following third quarter results 
earlier this month which were 
seen as being at the high end 
of forecasts. 

PARIS greeted the first day 
of the December account with 
a rise of 2.2 per cent, the 
CAC-40 index 

gaining 41.59 to 1,934.65 in 
turnover estimated at 
FFx3.6bn. 

During the October account 
the market rose 2.7 per cent, 
only the third time that it had 
risen during 1994. 

While activity was generally 
muted a few issues stood out, 
most uotably Eurotunnel, 
which climbed 6J5 per cent to 
FFr21.95, as some investors 
took the view that recent 
weakness had been overdone. 

Alcatel Alsthom, another 
stock which has suffered heavy 
falls in recent weeks, added to 
Wednesday’s gain with a rise 
of FFr20.60 to FFr44020. Dan- 
one, which said that it had 
bought a majority stake in a 
leading Argentine biscuit man- 
ufacturer, rose FFr8 to FFr774. 

ZURICH'S mood was 


Written and edited by William 
Cochrane, John PKt and Michael 
Mor g an 


Brazil rallies following 
weakness in bank sector 


By Angus Foster in S3o Paulo 


Share prices in Brazil 
recovered yesterday after a 
traumatic few days’ trading 
which briefly saw the main 
Bovespa index down 12 per 
cent from a week ago. 

By lunchtime yesterday, the 
Bovespa had regained 3.6 per 
cent at 45,539, compared to its 
Monday opening of 47,124. 

Analysts said the market 
was worried by domestic fac- 
tors, as well as the sell-off on 
global markets. The liq uidat ion 
early in the week of two small 
banks and a higher than expec- 
ted inflation figure for Novem- 
ber both pointed to the fragil- 
ity of the government's anti- 
inflation plan and the new 
Real currency. 

Analysts are also waiting for 
Mr Fernando Henri que Car- 
doso, the president-elect, to 
announce his plans for privati- 
sation and economic reforms to 
underpin the Real. Although 
the stock market is expected to 
do well under Mr Cardoso's 
presidency, uncertainty ahead 
of his January 1 inauguration 
has led to profit-taking. 


Brazil 


Bovespa kldex . 

50.000 — 

49.500 

43.000 — — | 

48,200 - 7 **—— f 
.48,000 # 

47.500 •"■'-I”" 

47.000 y|“7 

48.500 'l l— 
46fl0ttrW— 

45.500 

45.000 “ 

• ♦WOO**— - 


Nowartw1S94 
Soutom fTQsjpWte ■ 


Since his election, when the 
Bovespa index hit 54,840, the 
market has fallen some 15 per 
cent Even so, the index is still 
21 per cent up since the Real’s 
introduction on July L Among 
the constituents of the IFCs 
emerging markets index, Brazil 
has shown by far the best per- 
formance in dollar terms on 
the year to date, with a gain of 
more than 80 per cent 
Mr Cardoso is not expected 
to make any significant 


announcements until the mid- 
dle of next month. Markets 
may, therefore, remain ner- 
vous over the next few weeks, 
especially since some smaller 
banks are still rumoured to 
face liquidity problems. 

The new currency and a 
liquidity squeeze have seri- 
ously pressured some smaller 
fi nancial institutions, and the 
central bank has liquidated 
seven banks since the Real’s 
launch. Althou gh th ese banks 
are small, the market is wor- 
ried about the potential 
knock-on effect to bigger insti- 
tutions, especially the finan- 
cially troubled state banking 
sector. 

A central bank announce- 
ment, which said that it was 
slightly relaxing liquidity to 
support smaller banks, helped 
to lift sentiment yesterday. Mr 
Pedro Malan. the bank gover- 
nor, also told senators that the 
financial markets were exag- 
gerating the scale of the bank- 
ing problems. However, at 
least five more small banks are 
thought to he experiencing 
liquidity problems or seeking 
help from the central bank. 


FT- ACTUARIES WORLD INDICES 


Uncertain 
outlook 
for Oslo 


By Karen Fossil in Oslo 


No* 24 THE EUROPEAN SERIES 

Hpqrty ctggn Open 11X30 »■« 12.M 1H» W» TMO CM 

FT-SE Blttaek IDO 1386,10 1325S8 1326.77 1328,71 1328-71 1323.81 133028 132SLS6 

FT-6EBroto*i200 137850 137025 1380J50 138Z30 1361-07 1382.17 1381-96 1383.40 

Mm 22 8 « 28 21 Nh 18 Mn 17 


improved by stronger bonds 
and the stabilisation of the dol- 
lar, and the SMI index rose 22.5 
to 2,568.6. 

UBS bearers fell another 
SFr7 to SFrl.118. after a low of 
SFrl408, in further reaction to 
Tuesday's vote for a unitary 
share. The registered stock was 
down 5Fr4 to SFr248. By con- 
trast. SBC and CS Holding 
bearers both gained SFrlO, to 
SFr362 and SFr546 respectively, 
continuing to benefit from 
switching out of UBS. 

Von Roll bearers fell SFr235 
to SFrl90 after being 
suspended from trading on 
Wednesday when the company 
announced a restructuring pro- 
gramme which included a 90 
per cent capital cut The steel 
and engineering group's losses 
balloo ned la st year to SPr441m. 

STOCKHOLM recovered 1.6 
per cent, helped by a good 
nine-month package from the 
forestry products group, MoDo. 

The Affifrsvarlden General 
index closed 23-60 higher at 
1,499.00. MoDo increased its 
profits forecast for 1994, and 
said it intended to simplify its 
share structure. Its B shares 
jumped SKrl6 to SKr349. 
Trygg-Hansa, the insurer, saw 
its B shares gain SKr5.50 to 
SKr75.50 on a bullish newspa- 
per article. 

TEL AVIV offered only a 
token recovery, the Mfehtanim 
index rising 1.29 to 166.24. The 
blue chip index, by Wednes- 
day. bad dropped 31 per cent 
this year. At a conference in 
London yesterday fund manag- 
ers urged the country to 
broaden its shareholder base, 
noting that just 1 per cent of 
equity was currently held by 
foreigners. 


Norway 


Osto SE General 
700 



Source: FT Graphite 


would result in rapidly 
increasing volatility in the 
stock market Prices would be 
likely to fall even more than if 
there were a “no" vote, says 
the broker, which expects the 
market to test its all-time high 
within two or three months of 
the issue being resolved, irre- 
spective of the outcome. 

In the event that voters 
approve EU membership, rati- 
fication by the Storting needs 
a 75 per cent majority. But the 
main opposition, the anti-EU 
Centre and Socialist Left par- 
ties, have threatened to block 
ratification If they consider 
that a “yes" majority Is not 
large enough to be representa- 
tive of tiie whole country. 

Oslo’s all-share index 
reached an historic peak of 
688.23 on February 4. Since 
then share prices have been 
unstable and are currently 
around 11 per cent below their 
record, largely due to interest 
rates which have risen 
strongly since Augnst in 
response to Inflationary fears 
over consumer spending and 
the weaker krone against the 
Ecu. 

Yesterday the all-share rose 
6-78 to 603.07 in relatively thin 
trade. The US investment 
bouse, Goldman Sachs, 
believes that the market could 
rise 15 to 20 per cent over the 
next 12 months in the event of 
a “do" vote. If membership 
were approved, however, the 
investment bank reckons that 
the market could climb 
between 20 to 25 per cent, 
based on a favourable macro 
outlook, strong, earnings 
growth prospects and the 
scope for sustained profitabil- 
ity and competitiveness in the 
export industry. 


CANADA 

Toronto made gains at mid- 
day, boosted by stronger earn- 
ings from dnnaiiiyn hanks and 
firm gold stocks. The TSE 300 
index was up 29.25 at 4,077.85 
in volume of 19.1m shares. 
Toronto Dominion Bank 
moved up C®% to C820% after 
stating that its fourth-quarter 
1994 net income Jumped to 
C$195m, Cram C$82m in the 
same 1993 period. 


JoMfy comtfM by The Rranclal TVrwa UA. Goldman. Sacha & Co. and NdWMt Secutfea Ud. in corft i n c Mon wWi Ihe Institute <A Actuaries and Hie faculty of Actuaries 
NATIONAL. AND 

REGIONAL MARKETS WEDNESDAY NOVEMBER 83 1B84 — TUESDAY NOVEMBER 22 1894 DOLLAR MDEX 

Figures In parentheses US Day's Ton) Local Uxd Ckcn US Pound Local Veer 

show number at Ines Dofer Change Swing Yen DM Currency % chg Kv. Doflar Staring Yen DM Currency S2 week 52 week ago 
<rf Index % Index Indue Index Index on day Yield Index Indew Index Index Index low (approx) 


Australia (68) 16243 

Austria (16) 1 77 A* 

Belgium (3$) 16029 

Bred PB) 16&9B 

Canada film 12&55 

Denmark (33) 245^)0 

FWand (24) 182.40 

France fl 02) 164^4 

Germany (58) 13829 

Hong Kong $S) 34320 

Ireland (14) .198*1 

Italy m 74.44 

Japan (468) 15348 

Malaysia (97) 49S37 

Mexico (18) 1971.42 

Weftat a nd (19} 2O&06 

New Zealand (14) 70.77 

Norway £3) 19232 

Singapore (44) 36&S0 


14036 15095 

167.46 171.78 
152.74 152.62 


South Africa (59) 

Spain (38) 

Sweden (30) 

Switzerland (47) 

TtaBand (46) 

United Kkigdom (204). 
USA (513} 


.328.06 

14023 

234.88 

15091 

155.42 

18144 

184.13 


isi.li moo 

17185 187.52 


Americas 032} 171.97 

Europe (70S) 166-81 

Nonflc ( 116 ) 22281 

Ruffle Basin (783) 181.11 

Euro-Pacific (1501) 16152 

North America (816) 18Q56 

Europe Ex. UK (504) 14084 

pacific Ex. Japan (325} 239.08 

Worid Ex. US (1709) 18123 

World EX. UK (2018) 16128 

Worid Ex. Japan {1754} 10151 


ASIA PACIFIC 


US worries drive Nikkei 


Tokyo 


Norwegian share prices face a 
volatile period after next Mon- 
day's referendum on member- 
ship of the European Union, 
say analysts, irrespective of 
the outcome of the vote. 

“The most unsettling out- 
come of the referendum will 
not be rejection of member- 
ship, but a ‘yes' win so slim as 
to put In doubt the process of 
ratification,” says Enskilda 
Corporate in London. 

The official outcome will be 
known by Tuesday morning, 
and the Storting, or parlia- 
ment, will meet on Wednesday 
to set the agenda for a debate 
and the subsequent ratifica- 
tion vote which could take 
place one or two weeks later. 

Enskilda says that extreme 
political uncertainty is likely 
to follow a “yes” vote, which 


Moon ting concern over US 
share prices prompted arbi- 
trage unwinding and proflt- 
talting, and the Nikkei 225 
average lost 1.4 per cent in 
spite of active buying by public 
hinds, writes Braiko Terazono 
in Tokyo. 

After ranging between 
ia.877.0S and 18,688.74, the 
index ended 261.75 off at 
18,701.24, Its lowest since a 
18,648.36 close on January 25. 

Overseas investors took prof- 
its, while individuals who had 
bought shares on margin were 
forced to liquidate stock. A fall 
in futures prices prompted 
arbitrage-linked selling. The 
decline slowed in the after- 
noon. when share prices man- 
aged to recoup some of their 
loss thanks to buying by corpo- 
rations and fiwflnriai institu- 
tions, including public fends. 

However, selling continued 
throughout the day, »nd the 
Nikkei finally closed lower. 
More than 20 0 stocks hit new 
lows for the year, and some 
traders expect the next tech- 
nical support line to be around 
17.600. 

The Topix index of all first 
section stocks retreated 18.76 
or 1.3 per cent to 1,484.16, the 
lowest since January 7. The 
index fell through the 1,500 
level for the first time .since 
January 24. The Nikkei 300 
dipped 3.15 to 272.67. Declines 
overwhelmed rises by 982 to 93, 
with 103 Issues unchanged. But 
in London the ISE/Nikkei 50 
index rose 5.32 to 1,220.79. 

All sectors declined, with the 
retail group hit the most with 
a (hop of 1.98 per cent, and 
warehousing falling 1.84 per 
cent 

Steels were traded actively. 
Nippon Steel, the most active 
stock of the day, slipped Y2 to 
Y375, while Kawasaki Steel 
softened Y2 to Y41Q. Shipbuild- 
ers were also weak, wife Mit- 
subishi Heavy Industries down 
Y12 to Y727. 

Sony receded Y80 to a new 
low for fee year of Y5.030, post- 


ing its fourth consecutive 
retreat Other high-technology 
stocks were also weak,' with 
Matsushita Electric Industrial 
down Y80 to Yl.490; and 
Hitachi off Yl8at Y940. 

Privatised companies were 
down sharply. Japan Tobacco 
relinquished Y18.000 at 
Y98MXX) and Nippon Telegraph 
and Telephone declined 
Y14JJ00 to Y829JJ00. - 

Financials were down. 
Banks, which reported poor 
interim earnings yesterday, 
declined. Fuji Bank feQ Y40 to 
Yl.900 and Sumitomo Bank 
lost Y5Q at 71,670. Brokers 
were also lower, on feazs of 
poor earnings doe to fee weak 
stock market Nomura Securi- 
ties Ml Y20 to Y1.B90 and 
Nikko Securities dipped Y20 to 
YUMO. 

In Osaka, fee OSE average 
feed 31197 to 20.7$9£1 in vol- 
ume of 31.7m shares. 


Roundup 


The region's markets recov- 
ered from Wednesday's losses, 
although sentiment remained 
nervous. 

HONG KONG made a con- 
certed early attempt to move 
higher, after the sharp losses 
of the previous two sessions, 
but gains were subsequently 
reduced by profit-taking and 
futures-related selling. The 
Hang Seng index, which rallied 
2 pm- emit to a peak of 8,747.86, 
finished 7L83 ahead cm the day 
at £647.86. 

Turnover came to a provi- 
sional HKfrL38 bn, co mpared 
wife a revised HK$6A8bn on 
Wednesday. 

Analysts noted that index 
futures remained at a discount 
to few r- fljgh market throughout 
the day. helping to drag it 
down during the afternoon. 

Shut Hmg topped fee net 
gainers, rising 30 per cent to 
HK$13.05 in response to higher 
profits. Televisi on. Br oadcasts 
added HK$L at HKJ31, while 
Swire Pacific “A” rose HK62.95 
to HK35L75. 

SINGAPORE was helped 
ahead by bargain hunting in 


blue chips, although dealers 
noted feat a bearish mood soil 
prevailed. European and Bong 
Kong firnds were. said to be 
buyers, with US funds still not 
seUera,. 

, The StraitoTimesMustrlal 

index ended 1850 stronger at 
2436.40, hut was off a high of . 
224164. ; . 

KUALA LUMPUR also saw 
late buying of index stocks, 
taking tine composite index 5.74 
higher to iflfff.M.. 

Several foreign funds were 
said to be switching out of 
equities and unto the money 
market, however, and fee reba- 
lancing of funds' portfolios 
would continue, to dampen the 
index in fee-days q h«ui 

SYDNEY dosed higher on 
ba rgain limiting wife fee. All 
Ordinaries index moving for- 
ward 28.6 to 1,885.7 to finish 
just off its high for fee day 

of 3JB8&6. Turnover amounted 
to A$502m. 

Brokers said the cash market 
was led forward by strength In 
futures: the December futures 
contract advanced 35 to 1£70. . 

The banks sector firmed fol- 
lowing higher than expected 
profits from ANZ earlier in the 
week. ANZ shares climbed 18 
cents yesterday to A$3£3. NAB 
put on 18 cents at AglO.72 and 
Westpac strengthened 16 emits 
to AS428. ■ 

TAIPEI was Tmahla to main- 
tain its advance as profit- 
taking in textitea and papers * 
pushed the market lower. The 
weighted index dipped 3L46 
or 0.6 per cent to 6^40.02. Turn- 
over expanded to T$47bn from 
T539.fen. 

Among textiles, Shlrikong 
retreated 40 cents to T$8L80, 
but Hualon outperformed the 
market wife a rise of 60 cents 
to TJBSLSO. 

m spite of speculati on fe at 
the gn\ra mm«it Tnighi support 
fee stock market before fee 
December 3 elections, brokers 
believed that equities would 
consolidate around fee 6,400 
level. 

Manila was slightly stron- 
ger <m local buying; fee cam--, 
posite index firming 4.18 to 


2.730*7- Turnover improved to 

e v AOTwi TwumW 


The property sector fed-feg. 
advance, fee tufrfcwa adffiug. 
L44 at 10432, vmVB COOr 
mercfel and. industrial group 
receded 4.06 to 4JM&3Q. 

* ■ . UTrw, nf Bae. 


Sion’s high after bargain tarfr ■ 
■/tog accelerated in tbs after- 

"ft SET index put on 
or L85 per cent at l.357.29iB- 
turnover csf Bt6J5$bn- . '• 

• Local investors were "se«i V 
buying banking, property and 
■ communication stocks, espe- , 
dally in the aflanuwa period, 

. while foreign managers can- . 
oentrated. oh bine chips.. ' . 

- TdecomAsia appreciated Bt5." 
to Bt80.50, - while Bangkok . 
Bank- moved up Bt3 to Btl82 
pnH Bangkok Land added 
Bt4£0 at Bt57-50. • ... / 

SEOUL canferaed to rafl for. 
a sixth consecutive day,- in' 
spjte af some late institutional - 
biding <£ primary btae chips. 
The ccanpofitte index declined 
10 Al to UH6J&- • ■■ v. ■ . 

Brt&ere. commented feat toe 
continued ccrasofidaticaLitf blue 
/chips and concern about a- 
liquidity squeeze - had taken 
their toll cm the market The 7 . 
central bank soaked up. 
Woo3,50(Hm on Wednesday, jby. .- 
issuing. repos. 

Profit-taking. ■ by- foreign ; 


. the foreign stock ownership .' 
ceiling next month ^ "also" put,-., 
pressure on the market; 

. In spite of the broadly abased - 

faPfl, some shares wife good 
corporate- ea rning s pro spects 
continued to attract investors. - - - 
Amung Up Securities went / 
limit up, advancing Wanl,000 
to Won26j80a 

BOMBAY rose towards the . 
close on heavy buying by local 
Hrutual firnds and oar short-cov- / 
bring by investors on the last 
day of fee account. 

. The BSE-80 index closed - 
52.72 higher at 4,075^9 after 
funds finanrifli institu- 
tions picked up issues in fee 
specified shares group. . Foreign 
funds, which were net sellers : 
on Wednesday, were inactive. 


De Beers advances 3% as Namibia takes stake in diamond operations 


Equities finished firmer, alfeoQgh trade 
was cautious In the absence of a lead from 
the US. Brokers said most of the overseas 
buying bad crane from fee UK 
The overall index rose 67.4 to 5,866.6 
after a 109-point decline on Wednesday; 


industrials put on 88 at 6349.9; and the 
golds index was 20.4 higher at 2,067.7 
after a static afternoon performance. 

De Beers advanced R2.75 to R95.75 as 
the group announced that the Namibian 
g overnment had tainm a 60 per cent stake 


in its diamond mining operations ferae. 

Anglor was unchanged at R234 and 
BDnoroo moved ahead RL65 to R98J15. 
SAB recovered some of Wednesday's less, . 
improving R2 to R99, while .Barlows 
appreciated RX to JB34JS. 




OINT 


The Commerzbank report 
on German business and finance 11/94 


Has German industry missed 
opportunities in China? 


When the competitiveness of German 
companies is being debated, they are 
occasionally charged with neglecting the 
growth markets of Asia. Criticism has 
recently focused on the relatively weak 
presence of German firms in China. 
Their trading and investment activities 
are considered to be too modest, and to 
have been undertaken too hesitantly, 
since economic reforms began. 

But a look at the development of Sino- 
German trade helps to put such criticism 
in perspective. After Japan, China is 
Germany's most important Asian trading 
partner. In recent years, German exports 
to China have surged, amounting to 
DM 5 fa billion in the first half of 1994 
alone, which was roughly twice the level 
recorded for the first six months ofl992. 
Last year, German exporters succeeded 
in increasing their share of the country’s 
rapidly expanding market. 


Germany's strength: trade 


About 6% of China’s merchandise 
imports came from Germany in 1993, as 
against 1.5 to 2J % from each of the other 
major Western European countries, a 
tenth from the U.S. and just over a fifth 
from Japan. The prospects are good that 
German suppliers wfi] be able to raise 
their market share even further. At the 
same time, Germany is the fburth-largest 
customer for Chinese products. In the 
first half of 1994, imports from China 
totalled DM 7 x h billion. 


In September, Commerzbank 

opened a branch in Shanghai - 
its second outlet in China. 

Tel; 008621-374-7680; ficc 008621-374-7681 


However, although trade flourishes, 
it is only now that a broader range of 
German firms are considering investment 
in China. In 1992. the latest year for which 
figures are available, less than 1% of 
German direct investment went to the 
People’s Republic of China, while fee 
country attracted 7% of all foreign direct 
investment (FDI) worldwide in the same 
year. 

Three-quarters of the investment in 
China conies from within the Asia-Pacific 
region, above all Hong 
Kong and Macao. Ger- German 
man investments through ^ htPMMwn 
holding companies domi- f 

died in Hong Kong are | 

included here as well. AH | 

the same, German capital TS “| 
flows to China are modest 
compared with those from 
US and Japanese com- io 

panics. Their investment 
is ten times higher, due 
among other things to E 

the large number of over- 
seas Chinese in the U.S. 
and the geographical and 

cultural proximity of 0 

Japan. In addition, Ger- s«jnw: 

many’s overall ratio of 

FDI to foreign trade is comparatively low. 

When the market to be tapped is large 
and dynamic, as is China - which makes it 
attractive for German companies - exports 
initially tend to go hand in band with trade- 
related direct investment. Yet a stronger 
involvement in China is hampered by 
uncertainty about the reform process and 
the existence of unfamiliar administrative 
procedures. Geographical distance and 
the cultural gap add to tbe problems. 


Moreover, when. Western European, 
and especially German, firms are looking 
for new production sites, they tend to opt 
for Central and Eastern Europe, not least 
because these transitional economies are 
expected to join the European Union 
within fee next ferw years and thus become 
part of the single market. Their share of 
German FDI rose from 0.4% in 1989 to 
5.5% in 1992. 

China’s economic reforms have 
roused a sleeping giant: a market wife 


Germany’s trade with China 


1 

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1.2 billion people. German companies 
have certainly recognized and seized 
many of the opportunities in the People’s 
Republic, as the trade figures show. A 
parallel surge in direct investment wffl 
occur once fee reforms are perceived to 
be irreversible and deregulation has made 
me economy more open. The rapid 
conclusion of China’s GATT member- 

negotiations would be an important 
step m this direction. 


COMMERZBANK ■■■ #£/ 

German know-how in global finance 

VIEWPOINT a prcMflied u i servlet to lb* mioruttaul busiest* and DmukU ceantueliy by Cnaufink Ecaeaetlr Bamnii O fiuw i. r 

lumufMal pfMMfr: Alma-Ata. AMftcnkam. Antwerp, Atlanta. Bugkofc. Barcelona, fialjtog. Bombay. Bruauli, Bmiapest, Bueno* Aina. Cairo. Coracaj. Cbiq* " 


-pH wortt Index (2222 IfOBO -0.7 160.99 106J8 137.72 U3.62 -0,6 


171.68 162JJ6 100.44 188.07 144.46 18080 15085 183X4 Novosibirilc. Osaka. Pant. ftegM, Kb) de Jaacirc. S4e PSulo. Saoul 


Gibraltar, Grand Cajmoe. Hon* KoOf. btaobuL Jakaru, JeksiUwbuit, Kw». Leaden. Lee Aafdt*. UMmbeers. Madrid, Manama {Bahrain),' Uokl , Crty 'trT’f ^^* 8 “ , ’ DubUfl ' <Se " ev »- 
NovosUiinlc. Oaaka. Pan*. Prajae, Bio d. jucire. S4o hula. Seed. SfambiJ, Sfa*apore.-SL Wenbcr*. Sydney. Tehran, Tokjo. Terow, W^nmr. Zurtd,. Mw York, 


Owl**. The ntaidal Umas UMM, GoMman, s«la and Co. and N bMh Socutfea UtKKxL 1987 
tataat pik»9 m unavdaMs lor fida adBon Jopmaa m oi Wt ckn od 23711/GW. 


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