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FINANCIAL TIMES 




Europe’s Business Newspaper 


TUESDAY NOVEMBER 29 1994 


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Iberia crisis talks 
as dispute halts 
Spanish flights 

Airline management and unions were locked in 
crisis talks last night to stop Iberia, Spain's 
na t io n al carrier, from sliding into bankruptcy. 
Strikes in all domestic airports brought air traffic in 
Spain to a virtual halt, st randing tens of thmuands 
of passengers. The airport chaos highlighted a bit- 
ter confrontation over management plans to 
the airline's costs. The dispute threatens to disrupt 
Spam's ruling socialist government and to strain 
the country's relations with the European Commis- 
sion- Page 20; Lex. Page 20 

UK Tories face down rebels: Kenneth Clarke, 
chancellor of the exchequer, delivered an uncom- 
promising defence of Britain’s policy towards the 
European Union as the government faced down a 
threatened rebellion by its own backbench MPs 
over the Brussels budget. Page 20; Minister turns 
down House of Lords, Page Kb Joe Bogaly, Page 18 

Bayer, German chemicals multinational, is to 
re-focus its pharmaceuticals research away from 
more crowded market sectors and towards treat- 
ments for allergies, rheumatic ailments AnA Alz- 
heimer’s disease. Page 21; Lex, Page 20 

EU to Hft Syrian arms embargo: The 

European Union is to lift its eight-year embargo on 
sales of arms to Syria. The decision was immedi- 
ately condemned by Israel’s foreign minister Shi- 
mon Peres. Page 20 

China saves face on Qatt deadline: China 
said it would offer no new concessions in negotia- 1 
tions to rejoin the General Agreement an Tariffs 
and Trade If feUtu were not concluded by the end of 
the year, but indicated it would continue to negoti- 
ate after the deadline. Page 8 

dose Uruguayan poll to slow r efo r m 

Julio Maria Sangranetti 
(left) was declared presi- 
dent-elect of Uruguay, as 
his Colorado parly edged 
ahead of the governing 
Blanco party and the 
left-wing Encuentro Pro 
greslsta coahtian in the 
country’s closest ever 
election. The virtual 
three-way tie, mirrored 
in parallel congressional 
elections, will force Mr 
Sanguinetti to fbrge a coalition, which is likely to 
slow Uruguay's cautious reform process. Page 4 . 

Renault, the Flench state-owned motor group 
floated an the stock market earlier this month, 
should be privatised in the second half of next year, 
said French industry minister Jos6 Rossi. Page 21 

Chechnya threat to Russian lives: The 

breakaway Russian republic of Chechnya threat- 
ened to execute 70 Russian fighters it claimed to 
have captured unless Moscow admitted it was 
directly involved in trying to destabilise President 
Dzhokhar Dudayev’s regime. Page 2 

Kohl sots pace: Germany's Chancellor Helmut 
Kohl, easily re-elected as leader of the gove rning 
Christian Democrats, warned his party of the need 
to liberalise the economy and open itself up to the 
younger, and female, generation. Page 2 

Japan Airlines said its earnings would be 

by estimated losses on 1985 forward cur- 
rency buying contracts of Y17R3bn ($1.7bn) by the 
end of this accounting year. Page 21 

Republicans Jockey for 1996: The developing 
rivalry between two potential Republican presiden- 
tial candidates. Senators Robert Dole and Phil 
Gramm, could get an early airing this week as the 
party begins to choose senior congressional leader- 
ship positions. Page 4 

Mass murderer kflled: American mass 
murderer Jeffrey Dahmer was killed in an attack m 
a Wisconsin prison where he was serving 15 life 
reptoTtfws for. murdering 17 young men and boys. 

Taiwan concerned at pace of growth: 

Taiwan’s economy showed signs of overheating in 
October tor the second consecutive month, the 
country’s planning ministry warned. Page 7 

Ethiopia’s Moslems protest: About 100.000 
Moslem Ethiopians demonstrated in Addis Ababa 
against their treatment in the secular state. About 
45 per cent of Ethiopians are Moslems but Coptic 

Christians hold sway over most of the country. 

Chaoall suspects hold: Two well-known figures 
in the Paris art world have been held on suspicton 
of theft and receiving stolen pairings by Marc Cha- 
”11 Police said at least 40 paintings were taken 
from Chagall's studio after he died in 1985 and sold 
for about FFr50m ($10m). 

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West unites to call 
for settlement in 
former Yugoslavia 


By Laura Sflber in Belgrade, 
Emma Tucker in Brussels and 
David Buchan (n Paris 

The US, its European allies and 
Russia, struggling to avert a bit- 
ter international row over Bos- 
nia. joined forces yesterday to 
press for a ceasefire in the 
enclave of Bihac and a broader 
settlement in former Yugoslavia. 

Mediators from the five-nation 
contact group - comprising the 
US, Russia, Britain. France and 
Germany - held secret taika with 
Serbian President Slobodan Mil- 
osevic at a villa in a remote area 
north eg Belgrade. 

In a day of hectic diplomatic 
activity in former Yugoslavia, 
Washington and Brussels, the 
contact group also called for an 
imwiwtiate truce in both Bihac 
and Bosnia as a whole. 

Mr William Ferry, the US 
defence secretary, said Washing- 
ton would “seriously consider" 
any request for troops to help 
oversee the withdrawal of UN 
peacekeepers from Bosnia. But 
he hoped that no pull-out would 
be necessary, as the peacekeepers 
were playing an important role. 

His comments were welcomed 
in Europe as a sign that the US 
administration, unlike Congress, 
remained sympathetic to its 
allies’ concerns. 

In Bihac, blood-letting dragged 
on as two mortar rounds 
exploded within the notionally 
UN-protected safe area and one 
man, apparently a dyflian, was 
killed. Diplomatic recriminations 
over Bosnia also continued, with 
European Union foreign minis- 


Five-nation contact group in 
talks with Serbian president 


Large postal vote may favour the Yes side 

Polls see 
close 
finish in 
Norway 
EU vote 


ters angrily rejecting an attack 
by Mr Robert Dole, leader-elect of 
the US Senate’s Republican 
majority, on the stance of Britain 
and France. 

Mr Douglas Hurd, the UK for- 
eign secretary, said Mr Dole’s 
comments - raffing for an imme- 
diate UN withdrawal and arms 
deliveries to Bosnia - reflected a 
mistaken view about what out- 
side forces could do to end the 
fighting. Mr Dole said he hoped 
to narrow his differences with 

Union tries to agree line on 

enlargement Page 2 

Editorial Comment Page 19 

the UK over Bosnian policy in a 
trip to Europe starting today. 
“Nato's inability to respond to a 
war of aggression on southeas- 
tern Europe raises serious ques- 
tions about Nato's future plans to 
expand to central and eastern 
Europe," Mr Dole said before he 
left 

In a dear reference to US calls 
for tougher air action, Mr Hurd 
said peace in the Bihac area “will 
not be achieved by fostering illu- 
sions about what Nato air power 
can achieve”. 

The UN was continuing yester- 
day to work for a ceasefire accord 
between- Bosnia's MOslem-led - 
government - which favours a 
three-mouth truce - and the 


Serbs, who prefer any truce to be 
indefinite. British o fficials said 
the contact group mediators were 
briefing Mr Milosevic on the 
group’s latest ideas, which are 
reported to include a further eas- 
ing of sanctions on Serbia if he 
fully recognises Croatia. 

The group, in a significant con- 
cession, has also indicated that it 
will consider allowing the Bos- 
nian Serbs a “special relation- 
ship" with Serbia if they accept 
the intnmatiimal plan 

The idea of “confederal ties” 
between the Bosnian Serbs and 
Belgrade was firmly rejected by 
the Bosnian government last 
night, and western officials 
stressed that the issue could not 
even be raised unless the Serbs 
agree to the existing peace pro- 
posals. 

France, meanwhile, launched a 
fresh appeal to the UN and Nato 
to “ensure the respect” of safe 
havens in Bosnia. Paris called for 
a renewed effort to find an over- 
all settlement between Serbia, 
Bosnia and Croatia that took no 
account of recent Serb gams in 
the Bihac area. 

Despite the signs of improving 
international co-ordination over 
Bosnia, bitter arguments- were 
raging in several western capitals 
over hgw Jx^settie-tbe conflict, 
-and there wdre fresh wanungsrof 
the dang er to the Atlantic alii- 


w 



Hoping for a Yes from Mow Norwegians; Grb. Harlem Bmndthuyd, 
the country's prime minister, brandishes the envelope' containing her 
vote on European Union membership at a polling station in Oslo 
yesterday pscsuk neunr 


ABC owner joins Spielberg in TV venture 


By Tony Jackson In Now York 

Capital Cities/ABC, owner of tbe 
US television network ABC, is to 
join forces with the newly formed 
Hollywood trio of Spielberg, Katz- 
enherg and Giffen to create a TV 
studio. 

The joint venture, in which the 
two sides will initially invest 
2100m apiece, aims to produce 
and syndicate a broad range of 
TV programmes. 

The venture pots ABC in the 
vanguard of a general move by 
the US TV networks into produc- 
ing their own material, from 
which they were largely barred 
by government regulation until 
last year. 

It is also expected to increase 
the level of competition with the 
Hollywood studios, some of 


which plan to set up their own 
TV networks in retaliation. 

The partnership between the 
film maker Steven Spielberg, for- 
mer Disney production chief Jef- 
frey Katzenberg and the record- 
ing impresario David Geffen was 
set up in October to produce 
films, music, cartoons a nd inter- 
active entertainment as well as 
TV programmes. 

The trio's original intention to 
strike a deal with the Hollywood 
studio MCA has been thwarted 
by uncertainties over the rela- 
tionship between MCA and its 
parent Matsushita of Japan. 

Mr Katzenberg, whose recent 
resignation from Walt Disney 
was seen as a blow to the com- 
pany, said: “As the entertain- 
ment industry looks to the 
fixture, it is dear that one of the 


most important considerations 
will be the ever-evolving relation- 
ship between the Hollywood stu- 
dios and the broadcast commu- 
nity. When David, Steven and I 
formed our company, one of our 
initial goals was to build a strate- 
gic allian ce with a broadcast 
power." 

An ABC executive said tbe ini- 
tial 2200m investment was 
merely a start-up figure. “If it is 
working well and needs more, 
well be willing to invest more,” 
she said. While ABC had invested 
In its own production facilities 
and in other joint projects, this 
would be its largest production 
venture. 

The partners said the new ven- 
ture would produce programmes 
for TV networks and cable TV, 
and would also syndicate its 


material. Under government reg- 
ulation, the US networks are 
barred from domestic syndication 
until November 1995. although 
they are permitted to syndicate 
abroad. ABC said programmes 
from the venture are not expec- 
ted to be on air before 1996. 

The studio will be managed as 
a separate entity, with day-today 
operations controlled by a senior 
executive yet to be appointed. 


The venture illustrates a grow- 
ing trend in the US whereby the 
explosion in communications 
media has created a large appe- 
tite for entertainment material. 
Many in the industry believe 
most profit in the next few years 
will go to the providers of con- 
tent, rather than the owners of 
the distribution ^hannais. 

Lex, Page 20 


By Hugh Camegy and Karen 
Fossfl in Oslo 

Two election-day opinion polls 
last night predicted a neck-and- 
neck outcome in Norway’s vote 
on membership of the European 
Union in yesterday’s referen- 
dum. 

One poll on the state NRK tele- 
vision network forecast a 52.6 
par cent majority for the No side, 
while the commercial station 
TV2 predicted a Yes victory with 
a majority of 50.1 per cent Indic- 
ating that the race was neck-and- 
neck, alter 35 of 628 municipali- 
ties had been counted the Ye6 
side led by 52 to 48 per cent 

Both sides said the surveys 
were not eondnsive pointers. A 
crucial factor is likely to be the 
13 per cent of total votes cast as 
postal ballots in advance and not 
reflected in the opinion polls. 
This vote was particularly large 
in cities where fixe Yes side is 
counting cm a big majority. 

Officials said turnout yester- 
day had been high among tbe 
3.6m voters. They said It could 
reach 85 per cent 

Norway is the last of four 
countries from the European 
Free Trade Association to hold a 
referendum on whether to join 
the EU, which currently has 12 
members, next year. Austria, 
Finland and Sweden have voted 
to join. _ 

After Sweden approved mem- 
bership earlier this^tiumth, tbe 
Yes side m Norway began mak- 
ing gains as the Labour govern- 
ment. led by Mrs Gro Harlem 
Brtmdtland, tbe prime minister, 
urged Norwegians not to leave 
the country isolated. 

Mrs Brand tl and has made as 
her central political goal tbe 
reversal of Norway's rejection of 
membership of the European 
Economic Community In 1972. 

Despite the traditional reluc- 
tance of Norwegians to embrace 
Brussels - many fear it win 
erode the country’s indepen- 
dence and control of petroleum 
and other natural resources - 
Mrs Bnxndtland has sought to 

Continued on Page 20 


VACHERON CONSTANTIN 

Geneva, since 1755 


Campbell Soup adds hot 
sauce to spice up US sales 


By Richard Tomkins in New York 

Campbell Soup, the US food 
company best known for its con- 
densed soups, is to add same 
spice to its product line-up with 
the acquisition of Pace Foods, the 
world’s biggest maker of Mexi- 
can-style hot sauces, for Sl.lbn in 
cash. 

Mr David Johnson. Campbell’s 
chairman and chief executive, 
described Pace Foods as a “brand 
jewel” and said tbe acquisition 
would provide Campbell with, a 
“turbo-charged” new business 
category. 

The privately owned Pace 
Foods is based in San Antonio, 
Texas, near the Mexican border. 
Its imifri product is salsa, a hot 
sauce accompanying Mexican 
food and increasingly used in the 
US as a dip or condiment with 
other dishes. 

Salsa, consisting mainly of 
crushed tomatoes and chilli, has 
become popular with an increas- 
ingly health-conscious US public 
because it is low in fat and per- 


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reived as a healthy food. 

According to Campbell. US 
supermarket sales of salsa and 
other Merican-style sauces have 
grown at an annual rate of 13 per 
cent since 1988 and have now 
overtaken sales of ketchup in the 
US. 

Campbell is expecting further 
rapid growth in the category in 
the US and overseas. 

Pace Foods has 471 full-time 
employees, most of them working 
in two factories near its head- 
quarters. It is expected to end the 
current year with sales of S220m 
and operating profits of 254m. 

More than $lbn of the purchase 
price consists of goodwill, 
reflecting the fact that Face has 
the strongest brand name recog- 
nition among consumers of Mexi- 
can food products in the US. 

Campbell said the acquisition, 
expected to be completed in Jan- 
uary, would dilute earnings per 
share by 7 cents in 1995 and the 
same again in 1996, but would 
start adding to earnings in 1997. 
Its shares were up $1/8 at £43 7/8 


in early trading. 

Campbell's existing range of 
products includes soups, spa- 
ghetti, fruit and vegetable juices, 
frozen foods, salad dressings, 
bakery products, pickles, olives 
and chocolates. Apart from 
Campbell's, its brand names 
include Pepperidge Farm, Vlasic, 
Mrs Paul's, Prego, Swanson and 
Godiva. 

Tbe company has been handi- 
capped by the fact that its US 
market Is largely mature, but 
like other US food companies, it 
has been looking for growth 
through a combination of acquisi- 
tions and expansion overseas. 

It now gets about 30 per cent of 
its sales from businesses in 
Europe, Latin America and Asia, 
and the percentage is growing 

Since tbe arrival of Mr Johnson 
as chairman and chief executiv e 
in 1990, the company has shown 
strong profits growth. In its 
financial year to July 1994, net 
earnings rose by 16 per cent to 
$630m. or S&51 a share, on sales 
of £6.7bn. 


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CONTENTS 


The world's oldest watch manufacturer 


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Latin 

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19 

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Crosewni 

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17 

30 

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25 

Tadnotogy 

IP 

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22 24 

BuetnassLar 

11 

Hrtab 


Arts 

17 

CommotiBcs __ 

30 


FT Actuaries 31 

FT Worid Actuaries 40 

Foreign Behanflas __38 

Gold Mafeets 3D 

Equity Options 

Int Bond Sana — _■ » 

Managed Fun* .3435 

Money Markets 96 


Hecart Issues 40 

Shmmsmation 32£3 

TratflonatOpfarro.,,. 40 

London SE 31 

WtfSM* 37-40 

Bnurees 37.40 


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LONDON - PARIS - FRANKFURT - NEW YORK - TOKYO 





FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 


NEWS: EUROPE 


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By Emma Tucker m Brussels 

Only five of the European Union's 
priority transport public works have 
the necessary financing in place, and 
budgets for the other nine far are 
from complete, Mr Henning Chris- 
tophersen, the commissioner respon- 
sible for economic affairs, revealed 
yesterday. 

Presenting a report on the ElTs 
cross-border road and rail projects - 
part of the trans-European networks 
project - Mr Christophersea said 


only three transport schemes out of 
a list of 14 were completely ready, 
and a further two were almost there. 

Mr Christophersen was urging for- 
eign ministers meeting in Brussels 
yesterday to accept or reject plans 
for the 14 priority projects - valued 
at a total Ecu91bn (£7lba) - at the 
forthcoming summit for heads of 
state in Essen, Germany. 

The report, drawn up by experts 
from across the Union, also proposed 
the adoption of 10 international 
energy network projects plus pan 


European air traffic control mea- 
sures. Its recommendations amount 
to an updating of last December’s 
white paper on jobs, growth and 
competitiveness which is to be tack- 
led by the heads of state at Essen. 

The disarcay in the finances of 
most of the transport projects repre- 
sent a setback for the desire of Mr 
Jacques Delors. Commission presi- 
dent. to boost European competitive- 
ness. He had urged the use of 
socalled “Euro-bonds" to fund gaps 
in financing, but this has been 


resisted by some member states, 
notably Britain. The UK argues that 
four key sources of finance - 
national exchequers, private finance, 
loans foom the European Investment 
Bank and designated EU fUnds - 
should be sufficient to support the 
projects and that no additional fund- 
ing instruments are necessary. 

Yesterday. Mr Christophersen said 
no doors should be closed when it 
came to financing. The report 
included a recommendation that 
■‘measures will be taken, if proven 


necessary, in order that priority pro- 
jects do not run into financial or 
other obstacles which would jeopard- 
ise forir implementation". 

However, the British contributor 
to the report distanced himself hum 
suggestions that the Union could 
agree In the future to "new” forms of 
financial support. 

The three projects for which finan- 
cing is' complete are: development of 
Malpensa airport at Milan; the Cork- 
Dublin-Belfast-Stranraer rail link; 
and a fixed road and rail link: 


between Denmark: and Sweden. 
Finance is in place for devel- 
n pmMit of Greek motorways and a 
motorway between listen, the Poj^ 
fn grava* capital, ami the S panis h city 
of Valladolid. ■ ' 

The report stressed that the tag- 


works were administrative. It said 
g o v e r nm ents had to work to change 
regulations that differ from country 
to country and-to ensure co-ordina- 
tion to avoid basic problems tike dif- 
ferent electrical systems. 


Union tries to 
agree line on 
enlargement 


By David Gardner in Brussels 

The European Union was 
struggling yesterday to paper 
over its differences regarding 
enlargement to embrace east- 
ern Europe, and to assemble a 
package which EU leaders can 
endorse at their Essen summit 
on December 9-10. 

Still to be agreed are the 
amount of EU funding needed 
to assist integration of the for- 
mer communist states, the 
extent of EU reform in areas 
like agriculture before they 
join around the turn of the cen- 
tury. and the degree of trade 
access to the Union's single 
market they will be given in 
the interim. 

The hub of the strategy, 
designed for Hungary, Poland, 
the Czech Republic, Slovakia, 
Bulgaria and Romania, 
remains intact, however. This 
is to draw up a white paper 
detailing the changes the new- 
comers need to make to their 
legislative, regulatory' and 
standards regimes to bring 
them into line with the EU. 

“If this is not the actual 
Rubicon, then it’s very close to 
it.” one senior European Com- 
mission official said. “If the 
east Europeans sign up to the 
single market, then the only 
arguments you’ve got against 
integrating them are essen- 
tially internal, not very 
respectable ones.” 

But such arguments, over 
money, agriculture, and trade 
access, were on display yester- 
day when EU foreign ministers 
met to prepare the summit 

Brussels wants to commit 
EcuTbn (£5.5bn) in aid under 
its Phare programme for east- 
ern Europe in 1995-99. 
Southern and Mediterranean 
member states, however, want 
parallel commitments on the 
Commission's recently 
unveiled Ecu5-5bn aid plan for 
the Middle East and North 
Africa, before they sign up to 


the eastern strategy. 

Work is far less advanced on 
the Mediterranean strategy, 
however, and the German pres- 
idency of the EU yesterday 
secured a compromise which 
will get it past the summit 

Aid already pledged aid for 
next year CEcul.l6bn for east 
and central Europe and 
Ecu492m for the Mediterra- 
nean) will be minimum bench- 
marks for succeeding years, 
with the amounts by which 
they are to increase to be 
decided later. 

Under the Commission plan, 
the 1996 figures, for example, 
would be Ecul.23bn for the 
east and a sharper increase to 
Ecu710m for the Mediterra- 
nean. However, up to a quarter 
of this will be available for big 
infrastructure schemes in the 
east, including up to eight 
road, rail and gas pipeline pro- 
jects to be examined at Essen. 

On agriculture, the UK - 
strongly opposed by France - 
demanded a full debate on 
reform of the common agricul- 
tural policy, the cost of which 
would rocket if it were 
extended without changes to 
the east “That is a discussion 
we cannot avoid,” said Mr 
Douglas Hurd, UK foreign sec- 
retary. But Essen now looks 
certain merely to call for a 
Commission study on the 
impact of eastern enlargement 
on the CAP and other expen- 
sive EU policies such as aid to 
backward regions. 

Tomorrow, Brussels will try 
to resolve the trade access 
question, but only through 
what one official called “fairly 
modest" improvements in rules 
of origin for incoming eastern 
goods. These would probably 
allow an "accumulation” of 
rules of origin, with a product 
containing added value of at 
least 40 per cent from any 
three of the six states counting 
as an EU good and entering 
tariff-free. 










Mr Helmut Kohl: call to open up the party to more women and to younger generation 


Kohl cracks whip over CDU 

Judy Dempsey reports on Chancellor’s warning to his party congress 


Chancellor Helmut Kohl of 
Germany', who was easily re- 
elected as party leader yester- 
day, threw down the gauntlet 
to his governing Christian 
Democrats by warning them to 
liberalise the economy and 
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tion. 

If not. Mr Kohl warned, the 
coalition government, fresh 
from winning a fourth term in 
office but with a majority of 
just 10 seats in the lower 
house, would not be ready to 


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face the electorate in four 
years’ time. 

In a speech to the CDLTs first 
party congress since it nar- 
rowly won last month's federal 
election, Mr Kohl highli g hted 
the splits wi thin the party, par- 
ticularly on how far it should 
go in co-operating with the 
opposition, as well as moderni- 
sing its recruitment and pro- 
motion static tures. 

CDU officials yesterday 
openly admitted that the com- 
bined opposition of Social Dem- 
ocrats, GreensfBOndnls 90 and 
the reformed east German 
communist Party of Demo- 
cratic Socialism could no lon- 
ger be ignored by the govern- 
ment 

The opposition holds 331 
seats in the Bundestag, ten less 
than the governing coalition of 
the CDU, the Bavarian-based 
Christian Social Union, and the 
Free Democrats. The FDP’s 
seat tally was reduced by 32 to 
47. 

As a measure of the potential 
threat posed by the opposition, 
both Mr Kohl and Mr Wolfgang 
SchSuble, parliamentary leader 


of the CDU/CSU, yesterday 
refrained from criticising it, 
thus endorsing a strategy the 
latter hopes will keep the oppo- 
sition divided. 

Last week, Mr SchSuble said 
the Greens /Bun (inis 90 could 
join the parliamentary commit- 
tees which sit in secret on 
security issues from which 
they have traditionally been 
excluded. Earlier, the CDU 
voted for Mr Antje Vollmer, a 
Green deputy, as one of the 
four deputy speakers of parlia- 
ment 

The need to prevent any 
opposition alliance from 
emerging, and to break the 
growing influence of the PDS 
in east Germany is now seen 
as one of tbe main strategies of 
the CDU, senior officials said 
yesterday. 

On Sunday, the CDU party in 
the eastern state of Thuringia, 
which set up a grand coalition 
with the SPD at the weekend, 
said the Christian Democrats 
should open the party up to 
former east German commu- 
nist party members. 

But there is no stomach in 


the party to endorse this call 
officially. Mr Peter Hmtze, gen- 
eral secretary and a staunch 
critic of the PDS, yesterday 
said he opposed was com- 
pletely any cooperation with 
"the radicals”. mgnaflmg dis- 
sent about how the CDU can 
increase support in tbe eastern 
states without compromising 
its proelection rhetoric which 
labelled the PDS as a black 
party painted red 

The CDU is even divided 
over how it should be modern- 
ised. The more conservative 
rank-and-file would prefer, for 
example, no special quota for 
women, a system introduced 
by the Social Democrats and 
the Greens more than a decade 
ago. 

However, as more younger 
women In their twenties drift 
to the Greens, Mr Kohl said ft 
was time to open tbe doors. 
The CDU parliamentary group 
has only 13£ per cent women, 
the lowest percentage of any 
party. The overall average of 
the new Bundestag is 2&3 per 
cent 


Aid plan 
to back 
Irish 
peace 

By David Gantoer 

European Union leaders are 
expected to agree substantial 
new aid to bolster the North- 
ern Irish peace plan at their 
summit in Essen on December 
9-10, senior EU officials said 
yesterday. 

The “peace grants”, targeted 
mainly on creating Jobs and 
improving infrastructure, 
could total Eoa625m (£490m) 
in new money between 1995 
and 1999. 

Mr Jacques Delors, Euro- 
pean Commission president, 
briefed foreign min is ter s meet- 
ing in Brussels on tire shape of 
the peace package, put 
together for the whole of 
N orth ern Ireland and the six 
bordering counties of the Irish 
Republic. 

The Commission is expected 
to agree a ftnal proposal for 
Essen on December 7, and has 
been consulting widely at 
grassroots level in the pro- 
British Unionist and Irish 

wafiwwlid H H nmnnittec fn foe 

province. Senior officials in 
Tjny(nn anH Dublin say both 
governments endorse the ini- 
tiative. It’s virtually gift- 
wrapped for Essen,” one Irish 
official said. 

Brussels is suggesting an 
initial commitment of 
Eca300m from the EU. budget 
for 1995-97, with an extension 
of tbe same rate of new [hod- 
tog - EculOOm a year - for a 
farther two years if the 
scheme is working: About 90 
per cent of this would go to 
Northern Ireland and the rest 
to the bordering counties. - 

The UK and Ireland would 
contribute additional new 
money, worth 25 per cent of 
foe new EU funds spent within 
their territory, for a total 
potential package of EcoB25m. 

Britain, which has clashed 
with the Commission in the 
past about the normal legal 
requirement to “match” EU 
aid with “additional”, or genu- 
inely new money, says there 
will be no repackaging of 
already committed tending for 
the province. 

Mr John Major, British 
prime minister, gave a public 
commitment in Belfast late 
last month that the UK would 
put in new funding to match 
extra EU grants. 

The EU has already commit- 
ted EcnlJZ3bn to Northern 
Irela nd in 1994-99, under the 
structural funds aid pro- 
gramme, as well as Ecn20m a 
year to the multinational 
International Fund for 
Ireland. 


Breakaway republic warns that captured fighters face execution 

Chechnya threat to Russian lives 

was possible that former ser- 
vicemen had been hired as 
merce n ar i es by the opposition 
forces. Mr Grachev said that 
according to his information, 
mercenaries from the Baltic 
states, Afghanistan and Russia 
bad been hired by Mr Dudayev, 
Mr Ruslan Khasbulatov, the 
Chechen opposition leader, 
warned Grozny's population 
that they might soon be 
bombed and urged them to 
evacuate all children although 
the capital was reported to be 
quiet yesterday. Mr Khasbul- 
atov, the former speaker of the 
Russian parliament and one of 
the leaders of the tailed upris- 
ing against Mr Yeltsin in Octo- 
ber 1993, is now being backed 
by Moscow. 


By John ThomHn in Moscow 

The breakaway Russian 
republic of Chechnya has 
threatened to execute tbe 70 
Russian fighters it claimed to 
have captured in recent skir- 
mishes unless Moscow admits 
it is directly Involved in trying 
to destabilise President Dzhok- 
har Dudayev's regime. 

The threat will further 
inflame tensions with Moscow; 
some western diplomats sug- 
gest it could provoke the open 
hostilities with Russia about 
which the Chechen authorities 
have been complaining. Presi- 
dent Boris Yeltsin yesterday 
held an extraordinary meeting 
of his security council to dis- 
cuss Chechnya, which declared 


its independence from Moscow 
three years ago. 

Mr Pavel Grachev, defence 
minister, denied the Russian 
army had directly supported 
the Chechen opposition forces, 
which launched an assault 
against Grozny, the republic’s 
capital, on Friday. However, he 
added that if Russia did inter- 
vene "one airborne regiment 
would be enough to resolve all 
questions in two hours”. 

So Car, Russia has refrained 
from direct intervention fear- 
ing such a move would tarnish 
its image abroad and threaten 
to unleash a Chechen terrorist 
campaign within Russia. But 
the government has repeatedly 
urged Chechnya to come hack 
into the fold, and has recog- 


nised the provisional council of 
opposition forces as the repub- 
lic’s rightful government, pro- 
viding it with moral and finan- 
cial support 

Chechen officials said 300 
opposition troops had been 
killed and 200 taken prisoner 
in the latest fighting in 
Grozny- They said 70 prisoners 
were serving Russian service- 
men. “If Russia does not recog- 
nise these soldiers as prisoners 
of war they will be tried by the 
laws of the shariat {Islamic 
rale]. I will not lift a finger to 
stop this process,” Mr Dudayev 
said, indicating they could 
then be executed. 

Russian officials have denied 
serving soldiers were involved 
although they have conceded it 


VanMIert 



French EU 



ByMk&aaiSmftb \ V\. \ 

French proposals to alter 
significantly the Eorqpeah 
Commission’s proposed cBrec- 
. tive on lfoerahsing tiae electric 
-ity market -in the European 
Union -..were yest erday 
described as nn acceptable by 
Mr Kara Van Miert,. comspeff. 
tion ccanmisstpogr- , ■ 

Mr Van • Mlert the 

French proposals would, be 
contrary to existing commu- _ 
nzty roles, partly bec ause th ey 
would allow- power companies 
in same countries to presave a 
monopoly on imports and 
exports. ■ 

He was speaking ahead of 'a 
meeting to Brussels today of 
the council of EU energy min- 
isters which will counder the 
French “single buyer” propos- 
als along with: the Commis- 
sion’s plan to promote socaBed 
third party access. 

Third party aecesswould 
make it possible for power 
companies to Eeilelectricity 
directly to industrial paper 
users in another country by 
giving them access to.-:that 
country's transmission, system. 

Under' the single-. buyer pro- 
posals such deals ^roiild have 
to be conducted through a 
transmission system operator 
in the hubris Country. The 
operator, would be responsible 
for running; the system and 
meeting new demand for «teo- 
tritfty. 

Critics of the single buyer 
system, including the UK, say 
the single buyer concept would 
■ have httie practical impact on 
increasing competition. • 

Energy minis ters will today 
consider , several options, the 
most likely: of which is an 
inconclnQreoxitCQine in which 
they, will order' air investiga- 
tion into whether the single 
. buyer and third party access 
proposals are compatible. 

Ministers will- focus on pro- 
posals for the electricity mar- 
ket. Gas IS befog given less 
priority. 

Mr Van Mart, speaking at a 
Royal Institute of International 
Affair s conference ta London, 
said the Commission had a 
solid ; commitment to create 
international ene r gy marh»ts 
“He said. . the third party 
access anfl other proposals in 
the directive, first drafted two 
years ago, went no further 
than expressing existing rights 
in Union treaties. . 

He indicated that the Com- 
mission would press harder for 
the liberalisation of the mar- 
kets through the courts if no 
progress was made politically. 

Since the Commission 
launched its drive to liberalise 
the energy markets five years 
ago, it has rnaite only limited 
progress, with two previous 
directives having a relatively 
peripheral effect 

In discussions over the cur- 
rent directive, most member 
states have agreed on introduc- 
ing competition in generation 
and on the need to ^unb undle * 
the accounts of integrated 
power companies’ by separat- 
ing out production, transmis- 
sion and distribution costs. 

However, free market coun- 
tries argue that the electricity 
market will only begin to 
become competitive if third 
party access is agreed. 


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3 



Tapie tries to avoid riches to rags ending 


EUROPEAN NEWS DIGEST 


French talks on 
primary contest 


The French courts will soon decide the fate of the populist tycoon-politician, writes John Ridding 

The Tapie couple’s companies 

Shareholcfings (%) 

IllilllsSSH • Rnanddre -inry* Atata Cotas 

aBkl| Lj.|. ‘M bnmobO&re »■ TahW 

Bernard Tapta ' (Yacht Phoc6a) 


F or Mr Bernard Tapie, 
France’s populist politi- 
cian. tycoon and one- 
time pop star hopeful. it is 
time to face the music. A spate 
of legal and financial wrangles 
accumulated over the past few 
years are now before the 
courts. They threaten his polit- 
ical aspirations and could lead 
to a decline horn riches to rags 
for the French deputy and 
Euro MP. 

The most important ruling Is 
due within the next Tew days. 
A Paris commercial court is set 
to decide whether the remain- 
ing indebted companies in Mr 
Tapie’s business empire should 
be wound up. The case focuses 
on the financial health of 
FlBT, the holding company 
which owns Mr Tapie's home 
in Paris, on ACT, the manage- 
ment company for his luxury 
yacht, and on Croupe Bernard 
Tapie, which controls his com- 
mercial interests, principally 
his weighing ma chin g busi- 
nesses and health shop chain. 

Despite the complexities of 
the case, Mr Tapie's ordeals 
have captured public interest. 
For some, his image as an anti- 
establishment champion has 
been fuelled by his clashes 
with the law courts and Credit 
Lyonnais, the state-owned 
bank which is his principal 
creditor. As one Paris politics 
professor puts It “There is a 


vote garnered by his list in the ever, such calculations, are rulings and is suing Cr&dit 

European polls presents Mr premature. For amid his com- Lyonnais on the grounds that 

Tapie as a significant power plex legal tangles one thing is it is partly responsible for the 
broker. By running in June, he dear; he is not going to relent management of the companies 

drew support from the Social- without a fight “The match is he controlled, 

ist party, prompting a disas- not over until the whistle goes, Mr Tapie's prospects may 
troiis result and the ejection of and we are not even at half- also be helped by the reluc- 
Mr Michel Rocard as its leader. 

Mr Thpie argues that he should 
not be blamed for this. Rather, 
he claims: “They should con- 
gratulate me. I rid them of a 
candidate who was a sure 
loser." 

As for Mr Jacques Del ors, 
the head of the European Com- 
mission and widely touted as 
the Socialist standard-bearer in 
the presidential elections, the 
considerations are more com- 
plex. According to Ifop, the 
polling institute, Mr Tapie and 
reverse for Mr Tapie. He has Mr Delors could complement 
made no secret of his intention each other because they draw 
to run for mayor of Marseilles support from different age and 
in elections next year and has social groups, 
also indicated that he might In the absence of a Tapie 
tak e a tilt at presidential polls candidacy, Ifop estimates that 
due next spring. “If there is no only one-third of his support- 
one to represent the interests ere would vote for Mr Delore in 
of my supporters then 1 will do the first round of the two- 
so," he says, referring to the round poll At the same time, 

2.5m who voted for his Radical the populist businessman 
Energy list in June’s European could garner support for the 
elections, supporting his pro- left from his electoral strong- 
European, anti-racist and full holds. “The danger of splitting 
employment ticket. the vote of the left may not be 

The ineligibility of Mr Tapie a problem, particularly if Tapie 
could also hold implications for was to support Delors in the 
France’s other presidential second round," says one politi- 
hopefuls. The 12 per cent of the cal analyst To Mr Tapie, how- 


A joint group from France's ruling Gaullist RPR and Union for 
French Democracy (DDF) coalition parties is due later today to 
report on the feasibility of holding primary elections to select 
a single conservative candidate to contest next year's presi- 
dential elections, amid signs of falling public support for such 
a US-style innovation. 

According to a Sofres opinion poll. 65 per cent of French 
believe that the traditional first round vote, to be held next 
year on April 23. is sufficient to select the final two contes- 
tants - usually one from the right and one from the left - for 
the second-round vote on May 7. Proponents of primaries, 
notably Mr Charles Pasqua. the interior minis ter, have argued 
that the fortnight between the two rounds is not long enough 
to heal the deep divisions within the right. Bat, seeing prima- 
ries mainly as a device to corral conservatives into backing 
prime min ister Edouard Balladur from the outset, two of the 
prime minister's opponents, ex-president Valery Giscard d’Es- 
taing. who leads the UDF. and Mr Philippe S£guin, the 
National Assembly president who is backing Mr Jacques Chi- 
rac as the RPR candidate, have come out strongly against 
special early primaries. Doind Buchan, Paris 

Turkish foreign minister quits 

The Turkish foreign minis ter, Mr Mumtaz Soy sal. resigned 
yesterday over a dispute with prime minister Tansu Ciller on 
the appointment of his assistant. The Anatolian news agency 
said Mrs Ciller had accepted the resignation, but the foreign 
ministry made no announcement. Mr Soysal, a member of the 
junior coalition partner, the Social Democrat People's party, 
had resisted appointing Mrs Ciller's hand-picked candidate as 
his deputy since he was named foreign minister during a 


Mr Tapie, fond of football 
metaphors, is already two goals 
down, but he insists: The match is 
not over until the whistle goes, and 
we are not even at half-time’ 


Ha tel 

de Cavoye 
(Paris home) 


96.40% 


1 99.76% 

La Vie Claire 
(Health • 
shops) 


Terrafflon 

(Weighing 

machines) 


Teslut 

(Weighing 

machines) 


Seal me 
(Weighing 
equipment) 


time," he says, using one of his 
freqaent football metaphors. 

Mr Tapie, however, has just 
conceded two goals. Last week, 
a Paris court ordered him and 
his wife to pay FFr339 n: 
(£40.3m) to Credit Lyonnais, 
which funded Mr Tapie's busi- 
ness expansion in the 1980s. In 
a separate case, the Paris 
police tribunal ruled that Mr 
Tapie must repay FFi66.7m to 
the French customs office 
because he illegally registered 
his luxury yacht, the Phocea. 
as a commercial vesseL 

Mr Tapie’s rearguard action 
is based on a host of appeals 
against Ms adversaries. “There 
is no sanction which is not sus- 
ceptible to appeal,” he told 
L 'Express mag azin e. He Is 
already contesting last week's 


iance of the commercial court 
to move rapidly to wind up his 
businesses, partly because of 
the implications for the hun- 
dreds of employees involved 
and the political sensitivity of 
unemployment in France. 

As a result, a possible out- 
come is the opening of a pro- 
cess of judicial redressment for 
Mr Tapie's companies. This 
involves an exhaustive study 
of the possibilities for the res- 
cue or sale of the businesses - 
both of which are described as 
feasible solutions by Mr 
Tapie's lawyers. The process 
can last up to six months, buy- 
ing time for the embattled 
businessman. A more aggres- 
sive stance by the court, how- 
ever, would mean that Mr 
Tapie's time is running out. 


disillusionment with the politi- 
cal class, and a sense that it 
cannot respond to the big prob- 
lems of the day such as unem- 
ployment. So mavericks like 
Mr Tapie can play an impor- 
tant political role." 

His ability to do so is now in 
the balance. FlBT and GBT are 
unlimited liability companies, 
owned by himself and his wife. 
Should they be wound up. it 
could spell bankruptcy for the 
Tapie couple. And. under 
French law, bankruptcy would 
mean that Mr Thpie would be 
ineligible for elections to pub- 
lic office. 

This would present a serious 


cabinet reshuffle in July. Mr Soysal has also clashed with Mrs 
Ciller on the issue of privatisation and had pushed for an 


amendment in the anti-terrorism law, which gives officials 
wide latitude to declare writings and speeches terrorist propa- 


ganda. He had expressed his uneasiness over the increasing 
pressure from the west about Turkey’s poor h uman rights 
record. “I have been relying on my own reputation, which is 
not going to last long, to face the charges." Mr Soysal said 
recently. Mr Soysal. 65. spent more than 14 months in jail in 
the early 1970s under the military regime on charges of mak- 
ing Communist propaganda, and has been a university lec- 
turer on constitutional law and a deputy president of Amnesty 
International. His strong nationalist stance won him few 
friends in foreign capitals. Mr Soysal’s resignation came two 
days before the national security council, a supreme advisory 
body, was scheduled to discuss the use of Turkish bases by US 
aircraft enforcing the Iraqi Kurd's “safe haven" in northern 
Iraq. Mr Soysal has said that the force should leave. He has 
also been particularly vocal in the row with Greece over 
territorial waters in the Aegean Sea. AP, Reuter. Ankara 

Irish continue coalition search 

Ireland’s political parties were still in deliberations on the 
formation of a new government last night, raising fresh doubts 
on whether tomorrow's meeting of the Irish parliament will be 
able to resolve the uncertainty and vote in a new administra- 
tion. The Labour party leader, Mr Dick Spring, the kingmaker 
in any future coalition, held separate talks with both Fianna 
Fail. Labour’s partners in the outgoing government, and with 
the main opposition Fine Gael party in an attempt to break 
the deadlock, following the collapse of the 22-month coalition 
between Fianna Fail and Labour and the resignation of Mr 
Albert Reynolds as prime minister. A poll published yesterday 
suggested 63 per cent of people wanted a new Fianna Fail-La- 
bour coalition. Moreover 49 per cent of those polled wanted 
Fianna Fail’s leader. Mr Bertie Ahem, as prime minister and 
only 23 per cent supported Mr Spring. The result gives Mr 
Ahem a strengthened hand in negotiations with Labour. “I 
don’t think we’re a hundred miles away from reaching agree- 
ment,” said Mr Ahem before going into yesterday’s talks. 
Fianna Fail officials said Mr Ahem and Mr Spring had agreed 
to meet again. John Murray Brown, Dublin 

Italian terror suspects arrested 

Italian police claim to have made a breakthrough in nnmash- 
ing FalangB Annate, a right-wing group that has claimed 
responsibility for numerous acts of terrorism over the past five I 
years. This follows the arrest over the past week of three i 
policeman, two of them brothers, stationed in Bologna and the 
Frniiia Romagna region- All three are believed to be linked to 
some 15 unexplained killings and a series of violent robberies 
dating back to 1988. A pistol found in the possession of one of 
the arrested policeman has been matched by firearms experts 
to the killin g of a carabiniere and the murder of a prison 
educationalist Police are now checking whether the group 
was protected within the service and allowed to carry out i 
activities to destabilise Frnflia Roma gn a, the region controlled j 
by the former Communist party. The inquiry could also clarify ! 
still unexplained aspects of terrorist attacks in Bologna. | 
including the bombing of Bologna station in 1980 that killed 80 
people and left 200 injured. Robert Graham, Rome 

Craxi’s gold hoard confirmed 

The Swiss government confirmed yesterday that 15kg of gold 
it confiscated from a Geneva safe after an Italian request 
belonged to former Italian prime minister Bettino Cras. who 
was sentenced in absentia earlier this year in Italy to 8Y, years 
in prison for corruption. Mr Craxi. who has refused to return 
from his villa in Tunisia citing health problems, has consis- 
tently denied any links with the gold and said it was part of a 
nolitically-motivated vendetta. In a written statement issued 
through his lawyer in Italy, he reiterated those denials. He is 
the highest- ranked official charged so far in connection with 
the corruption scandals. A former friend of Cnud's. Mr Giorgio 
TradatL a businessman, said last month that be transferred 
about SFr2 Om (E9m) into banks in Switzerland. Mr TYadati 
claimed that once the corruption inquiry started, Craxi used 
some of the money to buy the gold upon the advice of an 
American Express Bank official, to try to cover the trad. AP. 




fhonomic watch 


East German output increases 

East German industrial 
Eastern Germany output rose sharply by 10.7 

per cent in September from 
August ^ increased by 142 

* nnua ^ per cent compared with a 

40 ■ year ago, the German eco- 

« nomics ministry reported yes- 

30 * A * terday. The ministry said the 

J \ end of the summer holidays 

20 . - - -f'" 1/ was a contributing factor, but 

A* J V several recent studies from 

VT leading economists have said 

10 J the recovery in eastern Ger- 

J many was “widening". Maim- 

0 T facturing. which bore the 

t , .i .1.1 brunt of the restructuring 

-10 94 over the past five years, rose 

1 16.3 per cent in September 

Source Maswwm from August and 19.6 per cent 

n vpar Construction output rose by 5.1 per cent in 
year-onjean and was up 11.4 per cent from a year 

September from rose by 15.1 over the same period, 
earlier- decline a by 10 per cent cm a year-on-year 

although it flj^psey. Bonn 

oompanson- inflation dipped from 2.12 per cent to 
■ Belgian Member, the Bret time it has been below 2 
L* December 1988. 

per *“5 orowth of Greece’s M3 money supply aggregate 
0 The annum ^ ^ September from 10.6 per cent in 

decelera1 ffljd 1*4 slightly accelerated to 10.7 per cent from 10 


m 


Wt Lii 


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NEWS: THE AMERICAS 


Re 


Sanguinetti wins close Uruguay election 

Ex-president’s opposition Colorado party edges ahead in country’s tightest poll, writes David Pilling 


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M r Julio Maria Sanguinetti 
was yesterday declared 
president-elect of Uruguay, 
as bis Colorado party edged ahead of 
the governing Blanco party and the 
left-wing Encuentro Progresista coali- 
tion in the country's closest ever elec- 
don. 

President Luis Alberto Lacalle 
called Mr Sanguinetti yesterday to 
congratulate him and Invited him to 
meet to discuss the March 1 transi- 
tion, the government said 
With more than half of the nearly 
2m votes counted, Air Saaguinetti’s 
Colorado party was only 19,000 votes 
ahead of the Blancos and 30,000 ahead 
of Encuentro. The Colorados bad XL5 
per cent of the vote, against 31.5 per 
cent for the Blancos and 30.3 per cent 
for Encuentro. 

Mr Sanguinetti himself - one of 
four Colorado presidential hopefuls in 
a system that combines primaries 
with national elections - was on 24.4 
per cent, 9 points ahead of his nearest 
rival from the governing' Blanco 
party. 

Mr Tabor€ Vdzquez, on about 30 per 
cent, was Efcely to end up with the 
most individual votes but will not 
become president because his Encuen- 
tro coalition foiled to win at party 
level 

The virtual three-way tie, mirrored 
in parallel congressional elections, 
will force Mr Sanguinetti to forge a 
coalition. The need for cross-party 
accords is likely to slow Uruguay's 
cautious reform process still further. 
Mr Sanguinetti, president from 1984 


to 1989, said yesterday be recognised 
that the narrowness of his victory 
would complicate bis ability to gov- 
ern 

“This has been the most hotly dis- 
puted election in our history ... our 
political system obliges us to make 
great efforts to achieve govemability 
nji/T to enable our democracy - as 
well as guaranteeing freedom - to be 
effective and functional'’ Mr Sangui- 
netti said. w 

The election, in which Blanco can- 
didates mustered less than a third of 
the votes, is likely to be see n as a 
rejection of the current Blanco admin- 
istration's curtailed reform attempts. 

President Lacalle tried to change 
the country from an inward-looking 
welfare state to a more liberal econ- 
omy competing in the international 
arena. But his attempts to privatise 
state corporations, to pall dawn tariff 
barriers and to cut social security 
costs have aroused public suspicion, 
notwithstanding partial success in 
bringing down inflation and produc- 
ing healthy economic growth. 

The very strong showing for 
Encuentro Progresista, a coalition 
ranging from social democrats to for- 
mer Tupamaro guerr illas , is evidence 
that many Uruguayans place defence 
of generous social welfare provisions 
ahead of any desire to adopt the neo- 
liberal policies sweeping across much 
of Latin America. 

Encuentro, which in the early 
stages of vote-counting seemed close 
to victory, won easily in Montevideo, 
the capital, but could not reproduce 



saw his mam task as re-establishing 
the country’s deep democratic roots. 

One of Mr Sanguinetii's principal 
challenges this time will be to fbige a 
new role for the country within the 
contest of Mercosur, the emerging 
customs union that will from next 
January integrate the Uruguayan 
market with its enormous counter- 
parts in Argentina andBrazD- 

Dnrmg the campaign, Ah* Sangui- 
netti expressed concern at some 
aspects of regional integration, partic- 
ularly its potential to expose fragile 
Uruguayan industry - and jobs - to 
fierce competition. He has spoken of 
the need for properly conceived 
export policies. 

Mr Sanguinetti has also criticised 
the Blancos for allowing the peso to 
appreciate as part of its inflation-heat- 
ing strategy. This has led to specula- 
tion - denied by Mr Sanguinetti - 
that he is rentroppigHTTg - a devalua- 
tion. 


Poll position: Sanguinetti and his wife as the results began to come in 


that result in the more conservative 
interior. 

Mr Sanguinetti, who campaigned on 
a social-democratic platform, will take 
the reins of a very different Uruguay 


from the one he led in 1984. Uruguay 
was then emerging from 11 years of 
military dictatorship and Mr Sangui- 
netti, now at 58 already considered a 
grand old man of Uruguayan politics. 


The president-elect has sa id that a 
too-strong c urren cy has been prejudi- 
cial to exports and has helped to fuel 
a trade deficit, expected to be $900m 
fhfa year. Mr Sanguinetti may well 
try to slow the peso's appreciation, 

Ehnrigh he win have to halunfo this 

against efforts to bring inflation down . 
from its currant 40 per cent a year. 

When Mr Sangmnetti left office in 
1989, inflation was more than go pm* 
cent a year and the go vernm ent was 
running la rgp budget /fafits-Kj leafing 
oppo si tion critics to question hfa com- 
mitment to fiscal rectitude. 


Senate Republicans start to jockey for position 


By Jurek Martin in Washington 


The nascent rivalry between two 
potential Republican presidential can- 
didates - Senators Robert Dole and 
Phil Gramm - could get an early air- 
ing this week as the party begins to 
choose senior congressional leader- 
ship positions. 

Mr Dole is certain to be elected 
majority leader by his peers on Friday 
but it is far from clear who will be his 
number two - Senator Alan Simpson 
of Wyoming or Senator Trent Lott of 
Mississippi. 

While both are conservative, Mr 
Lott has made no secret of his support 
for Mr Gramm’s candidacy for the 
Republican nomination and the Sena- 
tor from Texas has returned the com- 
pliment by openly preferring his Miss- 
issippi colleague to be Mr Dole's 
deputy. 


Mr Gramm's argument, which he is 
not shy in expressing, is that if Mr 
Dole is frequently going to be absent 
in pursuit of his national ambitions, 
Mr Lott would be a more effective 
deputy. 

Some political observers translate 
this into the belief that Mr Gramm 
would urge Mr Lott to undercut the 
majority leader on key policy issues 
relevant to the 1996 campaign. 

The Dole-Simpson connection is 
based more on a record of pragma- 
tism, plus a shared reputation for 
being ascertric. 

Both support abortion rights, unlike 
many party dogmatists, while the 
Senator from Wyoming, probably the 
leading congressional authority on 
immigration, is less farlineri to take 
the hard line against all immigration 
currently popular among right-wing 
Republicans. 


Mr Lott also has some history of 
accommodating party moderates, both 
In the Senate and as a House whip in 
the 1980s. 

In a recent interview Mr Lott urged 
the conservative forces lined up 
behind Congressman Newt Gingrich, 
who is due to be elected next Speaker 
of the House on January 4, “to cool 
their jets a bit” 

But he is also contrasting his “more 
extensive and personal” relationships 
with the new House leadership to 
those of Mr Dole and Mr Simpson. 

Mr Simpson told the New York 
Times in typically blunt language 
that he was the best candidate to 
combat what he described as the 
Republicans' “atavistic desire to 
clobber themselves when they begin 
to give each other the saliva test 
of purity.” 

The new Republican committee 


chai rmans hips in both houses will not 
be settled until early January. But, 
over the weekend. Mr Dole pretty 
much laid to rest flickering specula- 
tion that Senator Jesse Helms of 
North Carolina would not take ova- 
the foreign relations committee fol- 
lowing his extraordinary attacks an 
President Bill Clinton. 

“If you're going to start knocking 
down seniority.” Mr Dole said, 
“there’s going to be an avalanche.” 
This was taken as a dear wan ti ng 
that any challenge to Mr Helms could 
lead to conservative attempts to oust 
party moderates in line for committee 
chairmanships, such as Senator John 
Chafee of Rhode Island who is doe to 
take over the environment and public 
works panel 

Democrats also have some dose 
leadership contests to decide. The par- 
ty’s House members must decide 


tomorrow whether to remove two of 
the old hierarchy, Congressmen Rich- 
ard Gephardt and David Bazaar. 

They are the outgoing majority 
leader and chief whip and are under 
challe nge for both positions in the 
new minority from a pair of southern 
conservatives. Congressmen Charlie 
Rose of North Carolina and Charles 
Stenhohn from Texas respectively. 

A third er m test - for chairmanship 
of the party caucus, pits Congressman 
Vic Fazio against Kweisi Mftmwt, now 
head of the Mack caucus. 


On Friday, Senate Democrats will 
choose a new minority leader from 
between senators Tom Daschle of 
South Dakota and Christopher Dodd 
of Connecticut. 


Mr Daschle is the protege erf Sen 
George Mitchell, the outgoing major- 
ity leader. 


AMERICAN NEWS DIGEST 


US home 



up in October 


Sales of existing US homes rose by &5 per cent m Octt^, but 
dorowartlreSdons to statistics for 

the jamouncement offered Store evidesceof a slowdown fa. the 
housing market The National Association of Heattars said 
sales of existing single femfiy homes rase to a seasanaHy 
adjusted annual rate of 3Jlm InOctotetoawtelW 
of 3A8m in September. The figure is, however, a drop from toe 
337m »rmnai rate the association bad ongmallY- rep orted fo r 
September. Tf* association is predating sales of exhtong 
Hnmpq will reach a total of 3a97fa fa IMi ^ 

Home sales have shown increasfag signs of weaknesses 
recent months in response to the Federal Reserve's successive 
increases in short-term interest rates, which -had already 
p nfihpH average 30-year fixed-interest mortgage rates up by 2 
percentage points before the three quarters of a per ce nfage 
point increase the Fed derided on two weeks ago. Conge 
Graham, Washington. 


Low-smoke smokescreen? 


US cigarette manufacturer RJ. Reynolds Tobacco yesterday 
appeared to be playing down prospects for the launch of a new 
type of low-smoke cigarette called Eclipse, saying it did not 
know if or when the cigarette would be introduced because ft 
was still bring developed. 

Reynolds, part of RJR Nabisco, the US .food and cigarette 
group, has been testing the cigarette which walks by igniting 
a charcoal pjFranent at the. end and passing the, hot air over 
tobac co without bunting it A similar ntm-buming cigarette 
called Premier, launched by tim company In I968r flopped. ' 

- Yesterday Reynolds said testing indicated that Ecfips&had 
less tar and nicotine f fran 95 per cent of cigarettes carrautly 
cm the marketand eliminated 90 per cent of second-hand 
smoke. Richard Tomkins, New York 


Camel court case to go ahead 


The US Supreme Court yesterday refused, to block a lawsuit 
accusing R-J. Reynolds Tobacco and two advertising agencies 
of improperly targeting minors with & Camel cigarette adver- 
tising campaign. 

The lawsuit, filed hi California state court in l992, chatged 
that the promotion f eat uri ng a cartoon character caRed Old 
Joe Camel seeks to unlawfully make smoitas of-teenagers. 
The suit named Reynolds and amfitaf.the Interpublic Group 


which helped develop the campaign. Beater, Washington 


Argentina challenger picked 


Argentina's oppos i tion Radical party has picked Mr Harado 
MassaccesI, governor of Rio Negro province; as its chaBengsr 
to President Caries Menem in next May’s presidential elec- 
tions. The Frente Amptio, an opposition coalition, has post- 
poned no mi n ati ng its presidential candidate for next year's 
elections, expected to be won convincingly by Mr Menem. 

Mr MassaccesI defeated rival Mr Federico. Starani by a wide 
margin, partly as a result of hacking from forms* Radical 
president Mr Radi Alfonsfn, and from powaful COrdoba gover- 
nor Mr Eduardo Angelas. 

Mr MassaccesI now faces the task of fortifying a Radical 
party plagued by poor results in recent elections and 
riven by internal conflict “The next step is to create 
party unity” so that we “can offer Argentinians, alternative 
proposals to official policies of backwardness and social injus- 
tice,” Mr Massaccesi said in his victory speech- Zkoad PBBnff, 
Montevideo 


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Refugee zones 
scheme urged 


t 


for Rwanda 


I, The presidents of Rwanda and 
], neighbouring Zaire and 
Burundi called for internation- 
c ally supervised security zones 
to be set up in Rwanda to 
v encourage the return of hun- 
dreds of thousands of Hutu ref- 
s. ugees, Renter reports from 


Zairean President Mobutu 
Sese Seko, Rwanda's Pasteur 
Bizimungu azui Burundi’s Syl- 
vestre Ntibantuganya added 
that refugees remaining in 
Zaire would be relocated fur- 
ther from the border with 
Rwanda, according to a state- 
ment read on state television 
yesterday. “Refugees refusing 
to return to their country of 
origin will be moved away 
from the frontier," it said. 

The three men agreed on the 
need for the zones at a summit 
on Saturday at Mobutu's north- 
ern palace at Gbadolite. It was 
the latest of several meetings 
aimed at resolving the crisis 
caused by an exodus of more 
than 1m Rwandans who fled 
the advancing Rwanda Patri- 
otic Front (RPF) in July. 

The new Tutsi-dominated 
Rwandan government sees the 
presence in eastern Zaire of the 
refugees, discouraged from 
returning by the fbnner Hutu 
militia leaders, ex-ministers 
and army chiefs in their midst, 
as a serious security threat . 

Burundi, where there are 
escalating clashes between 
local Hutus and Tutsis, 
believes that an influx of 
200,000 Rwandans into its terri- 
tory is fuelling ethnic hatred. 



Mobutu: a great step forward 


Saudi loses asylum bid 


Mr Mohammed Masari, an 
opponent of the government in 
Saudi Arabia, is to appeal 
against a British decision not 
to grant him political asylum, 
he said yesterday, Onr Foreign 
Staff reports. 

Mr Masari, who arrived in 
Britain in April on a Yemeni 
passport, said he learned last 
week his application had been 
turned down. 

The British, government, 
which values its links with 


Saudi Arabia, has come under 
pressure from Riyadh not to 
allow Mr Masari to remain. 

A founder-member of the 
Committee for the Defence of 
Legitimate Rights, Mr Masari 
was imprisoned for six months 
in Saudi Arabia last year. 

On his release from prison. 
Mr Masari travelled to Ye m en , 
then on to London, where he 
has made repeated acc usatio n s 
against Saudi Arabia's ruling 
family. 


FINANCIAL TIMES TUESDAY 


. 'y t.'J •_ • , 


NEWS: INTERNATIONAL 


Thai police bend rule of law 

A catalogue of crime has stirred uneasy feelings, writes Victor Mallet 


N obody paid much 
attention when they 
saw a 20-year-old 
policeman demanding cash 
from passing motorists in cen- 
tral Bangkok the other day; 
Thai policemen, unmistakable 
in their too-tight brown uni- 
forms. routinely engage in 
roadside extortion. 

What gave Mr Thammarong 
Sricharoen away as an impos- 
tor and led to bis arrest was 
not his blatant money-grabbing 
but an incorrect salute to a 
passing police officer with his 
left hand instead of his right. 
He had stolen the uniform. 

Incidents such as this {Mr 
Thammarong' s mistake was 
explained at a news conference 
hF a Thai police chief) have for 
years been cheerfully accepted 
by the majority of Thais. They 
take it for granted their 
170.000-strong police force is 
corrupt But a lengthening list 
of recent murders and other 
tragedies in which police were 
implicated has aroused uneasy 
feelings among even the most 
cynical Thais, fuelling a debate 
about the pernicious effects of 
corruption. 

Earlier this year, seven Thai 
policemen were charged with 
involvement in the murder of 
at least nine visitors from 
Japan, Hong Kong. Taiwan and 
China; the victims were robbed 
and shot In July, a 15-year-old 
prostitute committed suicide 
by drinking poison in a police 
station in the southern town of 
Hat Yai; she had escaped from 
a brothel and gone to the 
police station to seek help, but 
the police sent her away. 

All prostitution is illegal in 
Thailand, and the government 


Zaire, a close ally of the 
ousted Hutu leaders, is deeply 
concerned about deteriorating 
security in the squalid camps 
along its border with Rwanda. 
Zairean troops shot dead at 
least is people and wounded 70 
in the Satale camp on Thurs- 
day and Friday after a soldier 
was killed in a quarrel over a 
refugee's car registration. 

Zaire on Sunday expelled 37 
Hutus from the teeming Goma 
refugee camp, handing them 
over to RPF troops at the bor- 
der in what an official said was 
a crackdown on crime. 

Mr Mobutu, hosting the Gba- 1 
dolite summit, was quoted as I 
calling the security zone idea a 
great step forward and saying 
he hoped it would win interna- 
tional backing. 


is waging a campaign against 
child prostitution. But under- 
paid policemen earn substan- 
tial sums in "protection 
money” from brothel-owners 
for turning a blind eye. and in 
some cases run brothels them- 
selves. Even if the credibility 
of the Thai police had been 
able to survive such scandals, 
it would surely have been 
destroyed by recent develop- 
ments in the case of the stolen 
Saudi gems. 


visas to Thai migrant workers 
and forbidden its own citizens 
to go to Thailand on holiday, 
depriving Thailand of millions 
of dollars a year in income. 

Several people connected to 
the case have meanwhile been 
murdered in Thailand. The two 
most recent victims were the 
wife and child of a jeweller 
who was an important witness 
in tbe case. They were blud- 
geoned to death, but the police 
forensic department initially 


"The law enforcement branch has 
broken its last bond with the 
people,’ a Thai columnist says 


In 1989 a Thai worker in 
Saudi Arabia stole $20m 
(£12.5m> worth of jewellery 
from the palace of a Saudi 
prince. He was arrested after 
his return to Thailand and the 
recovered Items were proudly 
displayed by the police. 

Triumph quickly became 
farce when the haul was sent 
back to Saudi Arabia, because 
most of the returned jewels 
turned out to be fakes copied 
from the originals. A police 
general’s wife was seen, and 
photographed, wearing what 
appeared to be one of the sto- 
len necklaces, although she 
and her husband later insisted 
this too was a fake. 

At first tbe saga was seen in 
Thailand as something of a 
joke, since tbe Saudis were not 
popular either as employers in 
their own country or as visi- 
tors to Thailand. But the mood 
has now changed. Saudi 
Arabia has stopped granting 


announced, to cries of derision, 
that they had died in a car 

accident. 

“The law enforcement 
branch has broken its last 
bond with the people,” wrote 
Mr Suthichai Yoon, columnist 
and editor-in-chief of The 
Nation newspaper. 

The embarrassed Thai gov- 
ernment finally acted: two 
police generals have been 
charged in connection with the 
killing of the jeweller’s family, 
and dozens of other police offi- 
cers are under investigation. 

Mr Mohammed Said Khoja, 
the outspoken Saudi charge 
d’affaires in Bangkok, remains 
understandably sceptical. He 
arrived in 1990 on what he 
thought would be a three- 
month mission to resolve the 
affair and is now in his fifth 
year in Thailan d 

“I’m glad that the public in 
Thailand are starting to have 
some sympathy,” he said in an 


interview, but added: “Any- 
thing can happen in Thailand. 
Today they arrest the generals; 
tomorrow they win say thee is 
no evidasce. The bag policemen 
here have a better life than the 
prime minister InmseK." 

Many Thai policemen are so 
involved in crime, rather than 
crime prevention, and so ded- 
icated to protecting the rich 
and powerful, rather than 
p pfnr rin g the law impartially, 
that it will be hard for any 
government to make them ! 
change their ways. j 

A recent study by Bangkok's 
Chulalongkom University 
found that some officers pay 
bribes of up to BahtSm 
(£125.000) to their superiors to 
be promoted to lucrative posts 
enjoying a steady flow of 
extorted money - in areas with 
plenty of brothels, far example. 

But the new wave of popular 

outrage at the latest police 
crimes may start to make life 
earner for the few senior police 
officers regarded as honest. 
Mai-Gen Seri Texntyavqj, one 
such crusader, recently 
arrested one of Thailand’s best- 
known "godfathers", in con- 
nection with an allegedly ille- 
gal land deal near the coastal 
resort of PaJttaya. 

Even if such prosecutions 
succeed, cleaning up the police 
force is likely to be a painfully 
slow process. 

"What we've been frying to 
do is to establish the rule of 
law.” says Mr Oman i-aafcpai, 
the pr imi> minister, “I think 
the situation wiQ improve as a 
result of the government's 
de to m in atio a, but in the short 
term it may not be so easy to 
perceive. 1 ’ 


fund 


By rffidd Taft to Sydney 


Tbe Australian Senate, the; 
federal parliament's upper 
house, yesterday referred the 
government's contentious 
Aboriginal laud Hand legisla- 
tion to a select committee for 
further examination. 

The move came despite 
warnings from Senator Gareth 
Evans, the governments Sen- 
ate leader, that this could trig- 
ger a “double dissolution", that 
is, a (SssoZotian of both houses, 
fresh - 

The legislation proposes to 
establish a A$l-4tm f£68flm) 
laud ftmd by 2004. through a 
series oSgownmoot payments 
over the next 10 years. By ' 
using the money to make land 
purchases, the fund would aim 
to help dispossessed Aborigi- 
nes who are unfikety to benefit 
from last year's Native Title 
legislation 

The proposed structure of 
the land ftmd and the rela- 
tively low level of financing 
have been criticised by some 
Aboriginal groups., fix recent 
weeks, the Senate, where the 
government does not have a 
majority, has made a large 
number of amendments to the 
frill. But the government 
refused to accept these and 
returned the legislation to the 
Senate. 

Yesterday, Senator Evans, 
Australia’s foreign minister, 
warned the government would 
treat a select committee refer- 
ence "as a failure to pass this 
legislation within tile nwmfag- 
of the Constitution, Section 
57”. This states that if fegisla- 


Ev&ns: ‘double dissolution’ 


thm passed by tbe House of 
Jtepreseritatwes ''1ft rejected or 
obstructed by foeSemate twice 
within certain time limits, Aus- 
tralia’s governor general may 
dj&cive bofo houses rsdmulte- 
neousfy. 

The notion that foe govern- 
ment will seek to can an eaxty 
election, before the economic 
outlook deads, has circulated . 
for some months, and foe land, 
fund hiatus cooler provide: an 
excuse. But, in issuing his- 
w anting. Senator Evans 
emphasised yesterday that foe - 
government was not looking 
foran "artificial tr igg er*. 

Meanwhile^ Senator Brian. 
Harradine.anihdependent 
whose vote was cnxsaF to sec- 
uring the committee trfemfl, 
pointed out that a double tttssh ■ 
iutkm trigger was already in 
place because of foe Senate's 
derision to refect certain imnd- 
gration-related legislation. - 


New Zealand Labour party moves up in polls 


By Terry Ha9 in Woffington 


Support for New Zealand's Labour 
party has improved with opinion polls 
timed to coincide with its annual con- 
ference at foe weekend showing it 
with 25 points against the National 
government’s 42. 

The change in Labour's fortunes 
has been dramatic: less than three 
months ago it came in fifth place in a 
a by-election in the Sozzth Island Sel- 
wyn constituency, a seat it nearly 
won in last year’s general elections. 

The polls suggests that the New 


Zealand political scene is set to return 
to its traditional dominance by its two 
old established parties. 

Labour’s resurrection has been 
' partly due to hard work by Ms Helen 
Clark, the party leader in distancing 
it from foe right wing policies that it 
followed in government between 1984 
and 1990 that caused its eventual 
landslide defeat Labour's unity has 
been helped by foe departure of both 
left and wing ring critics to join other 
parties. 

It recently unveiled populist eco- 
nomic policy featuring higher taxes 


lor foe well off, bigger fondly s upport 
payments, industry planning and a 
venture capital fund. 

However it has also benefited hand- 
somely from the surprise decision of 
Jim Anderton to step down as leader 
of the Alliance party, an • nyingnai 
grouping afleft and centre parties. 

A charismatic former president of 
foe Labour party, Mr Anderton broke 
away to form his own left wing party 
in 1988. This was promptly joined by 
some minor political groups favouring 
such disparate policies as monetary 
reform and Maori rights and also 


the (keen movement. 

Mr Anderton's consistent rating as 
pre ferre d prime minister helped the 
Alliance become foe country's second 
top poffing party. But his resignation 
saw foe Affiance s u pp o r t drop by 20 
per cent to 23 points, its lowest level 
this year. 

The Alliance is now led by an Bis 
Sandra Lee, who is considered too 
inexperienced to be able to revive its 
fortunes. 

The fourth political party now rep- 
resented in parhament. New Zealand 
First, led by Maori MP Winston 


Peters, has slunged badly in public 
support following a public spat over 

its flfrntttng v 

However, foe advent of a new elec- 
toral system, which will reduce the 
number of electorate seats from 99 to 
66, is causing concern among sitting 
MPs. 

They beHeve the.reduced number of 
seats means fewer of them can repre- 
sent the existing main parties, 
many are known to be considering 
joining or forming new parties, which 
they calculate will prosper under pro- 
portional representation. - 


Some companies say they’re 
Hiring forces to make intematic 
network communications si mi 



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FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 


7 


★ 


NEWS: INTERNATIONAL 


KMT makes sure the party is not over 

Taiwan’s Nationalists seek to continue enjoying fruits of power, writes Laura Tyson 


Taiwan’s 
long-ruling 
Nationalist 
party, the Kuo- 
minting, fear- 
ing that the 
opposition Democratic Progres- 
sive party may try to national- 
ise its vast business empire 
should it come to power, is 
consolidating its assets, con- 
verting them into more liquid 
form and investing profits off- 
shore. 

Accustomed to ruling by fist 
and fiat, the 100-year-old KMT 
has turned to its extensive 
business interests to keep its 
grip on power through the bal- 
lot box. 

So Tar the strategy, while 
costly, appears to have worked. 
The KMT is believed to have 
an edge over the apposition in 
elections to be held on Satur- 
day. However, the party, which 
has seen its mandate slip peril- 
ously' since the lifting of mar- 
tial law in 1987. is scrambling 
to protect its riches. 

It is coming under increasing 
pressure to disclose the true 
extent and origins of its assets. 
DPP legislators have drafted a 
law governing the activities of 
political parties, but the KMT 
has obstructed attempts to put 
the draft on the parliamentary 
a genda 

“There are a lot of unan- 
swered questions about how 
the party became so rich and 
how it started all its busi- 
nesses," says Professor Lu 
Ya-li, a political scientist at 
National Taiwan University. 
“The party’s main concerns 
right now are to make all the 
companies private so people 
will never know how rich the 
KMT really is, and to move 


assets offshore, both for eco- 
nomic and political reasons." 

The party is regarded as one 
of the island’s biggest and 
most diverse industrial con- 
glomerates. Its seven holrifog 
companies have investments in 
more than 100 enterprises 
spanning cement, electronics, 
finance, petroche micals , tele- 
communications, construction 
and trade. The total registered 
assets of those businesses, of 
which perhaps a dozen are 
listed. Stood at T$950bn (£23bn) 
and net assets at TSMObn at 
the end of 19%, the most 
recent figures available. 

"The KMT has managed to 
gain control of a large part of 
Taiwan's economy and accu- 
mulate a huge amount of party 
enterprises and assets, and 
through these can also exert 
control over domestic politics." 
says Prof Chen Shih-meng, an 
economist at National Taiwan 
University and co-author of 
Dismantling Party-state Capi- 
talism, published in 1991. “I 
doubt very much that Presi- 
dent Lee Teng-hui is trying to 
build a true democracy in 
Taiwan as long as he wants to 
hold on to the party’s wealth.” 

In the last year, the party 
has begun to invest offshore, 
mainly across south-east Asia 
where it ranks among the big- 
gest foreign investors in Viet- 
nam and Indonesia. It has 
invested or considered invest- 
ing in the US, Japan, Hong 
Kong, Burma, Russia, Para- 
guay and even China, though 
through circuitous <*-h»nnpi«; as 
it officially bans investments 
in the Chinese mainland. 

As democracy threatens to 
erode the longstanding privi- 
leges of KMT enterprises, the 


party’s new policy is to list as 
many of its companies as possi- 
ble on the stock exchange. Last 
week Fuh-Hwa Securities 
Finance, whose monopoly on 
finance for margin share trad- 
ing is being broken down by 
deregulation and is one of the 
party’s biggest earners, went 
public. 

According to a book just 
published by the party, The 
Evolution and Ideals of the 
Kuomintang of China, the pur- 
pose behind listing KMT com- 
panies is "so that all the people 
may share in their success”. 

Critics say it is 
so that the 
KMT can reap 
while they are 
still profitable. 
“Through list- 
ing, the party 
will be able to cash in assets 
very quickly and transfer them 
overseas if necessary,” says 
Prof Chang Ching-hsi, also an 
economist and the other 
author of Dismantling Party- 
state Capitalism. “That way 
the party can also use its 
assets more flexibly before 
elections,” he added in a refer- 
ence to alleged vote-buying. 

This weekend voters will for 
the first time elect mayors for 
Taipei and Kaohsiung, the 
island's two largest cities, and 
a provincial governor in what 
are the most important polls to 
date in Taiwan’s political 
reform. Municipal councils and 
a provincial assembly will ai«n 
be elected. 

A DPP victory would not 
pose an immediate threat to 
the KMT’s empire. Nonetheless 
a KMT loss would tilt the bal- 
ance in favour of the opposi- 
tion in crucial parliamentary 




elections late next year and 
first ever presidential elections 
slated for early 1996. 

Critics say that the KMT 
built its empire through its 
privileged position. The party 
bought land from the govern- 
ment at a fraction of market 
value, enjoyed monopoly mar- 
ket positions in certain sectors 
and preferential access to gov- 
emnient contracts, they say. 

KMT officials do not deny 
such charges but counter that 
party businesses have contrib- 
uted greatly to Taiwan's eco- 
nomic and cultural develop- 
ment and moreover many of 
them are marginally profitable 
or even loss-making. 

The advent of democracy has 
resulted in ever-tighter links 
among party members, busi- 
nessmen and politicians. 
“Party discipline is now a 
major problem for the KMT,” 
says Prof Lu. “In the old days, 
party leaders could impose 
their will on the rank and file 
but now they must use persua- 
sion, This has resulted in trad- 
ing of favours and widespread 
corruption." 

In addition, says Prof Chen, 
there are many enterprises 
that are only partially owned 
by the KMT “but in fact are 
completely controlled by the 
party, not in legal but in prac- 
tical terms”. 

Once transformation of its 
business empire is complete, 
the KMT should be well posi- 
tioned to withstand the rigours 
of democracy. Analysts esti- 
mate its annual expenditures 
at $200m compared with yfrn 
for the DPP. The KMT’s ability 
to out-finance the opposition in 
future elections looks likely to 
be assured for some time. 



Economic overheating approaches the danger level 


By Laura Tyson in Taipei 

Taiwan may be experiencing too 
modi of a good thing as its economy 
gains speed, the country’s planning 
ministry warned yesterday. The econ- 
omy showed signs of overheating in 
October for the second consecutive 
month, the cabinet’s Council for Eco- 
nomic Planning and Development 
said. 

The coonril’s coloured signal sys- 
tem for measuring economic health 
flashed a “yellow-red light”, indicat- 


ing fast growth bat danger that the 
economy may be overheating. Until 
September, a yellow-red signal bad 
not been used since August 1989. A 
green light, meaning steady growth, 
was posted for nine consecutive 
months before September. 

An October business confidence 
survey showed 65 per cent of manu- 
facturers taking part believed the 
economic climate would remain sta- 
ble for the next three months, 
unchanged from a month earlier. 
Businessmen who felt the economy 


would improve in the next three 
months fell from 23 to 21 per cent; 
those expecting it to worsen climbed 
from 12 to 14 per cent. 

Last week the government’s central 
statistics office said growth in gross 
national product reached 6.08 per 
cent in the third quarter of tins year, 
up from 5.62 per cent in the second 
quarter. The forecast for the fourth 
quarter was raised to 6-9 per cent 
from 6.44 per cent, based on 
Improved export performance and 
strong domestic investment. 


The statistics office forecast GNP 
growth would reach 6.1 per emit in 
1994 and 6J52 per cent in 1995. In 
1993 Taiwan’s GNP rose 6.02 per 
cent 

• Taiwan's negotiators blamed 
counterparts from their arch-rival 
China yesterday for failure of six 
days of bilateral talks in the eastern 
Chinese city of Nanjing, Reuter adds. 

Returning to Taipei’s international 
airport, Mr Shi Hwei-yon, Taiwan’s 
chief negotiator, isaid . the Chinese 
side had raised new questions that 


prevented final agreements being 
signed. "Both sides in principle 
agreed on the str u c tur e and resolu- 
tions for an agreement,” said Mr Shi, 
deputy secretary-general of Taiwan’s 
quasi-official Straits Exchange Foun- 
dation (SEF). 

“But (China's) Association for Rela- 
tions Across the Taiwan Straits 
(ARATS) raised many new questions 
and that led to the faflure of signing 
a final agreement,” the semi-official 
Central News Agency quoted Mr Shi 
as saying. 


INTERNATIONAL NEWS DIGEST 

Australian ‘right 
to strike’ row 


Australia’s federal government was yesterday at loggerheads 
with the powerful Australian Council of Trade Unions tActu) 
over the country's new “right to strike” law. as a 24-hour 
stoppage by aircraft refuellers and oil tanker drivers in sup- 
port of a 12 per cent industry-wide pay claim brought chaos to 
airports. On Friday, the Industrial Relations Commission ruled 
that by pursuing an industry-wide pay claim the union 
involved - the Transport Workers Union - was seeking to 
avoid “enterprise-bargaining’', and that its right to strike free 
from the threat of legal action should be withdrawn. The 
Labor government yesterday said tt su pported (his stance. But 
the Actu weighed in behind the TWU, whose appeal against 
the IRC ruling will be heard today. “If pattern (industry-wide) 
bargaining is good enough for politicians, judges, members of 
the IRC and the business sector, then it's good enough for 
transport workers,” said Mr Martin Ferguson, Actu president 
Nikki Teat, Sydney 

Malaysian politician on trial 

A leading member of Malaysia’s dominant political party 
appeared in court yesterday on corruption charges. Mr Abdul 
Rahim Tamby rank, until recently chief minis ter of the state 
of Malacca and head of the youth wing of the United Malays 
National Organisation (Umno), was charged with abuse of 
power and corruption hi relation to land deals in his state. 

In a case which caused widespread controversy In Malaysia, 
Mr Rahim was forced to resign from his official posts last 
month after it had been alleged that he had sexually abused a 
15-year-old girL The attorney general subsequently ruled that, 
although there was a strong suspicion about Mr Rahim in the 
case there was not enough evidence to bring charges. Mr 
Rahim had been considered a close ally of Prime Minister 
Mahathir Mohamad. Kieran Cooke. Kuala Lumpur 

Japan-Germany council set up 

Japan and Germany will proceed with long-delayed plans for a 
council to promote corporate co-operation in science and tech- 
nology. Mr Heinrich- Dietrich Dieckmann, German ambassador 
to Japan, said yesterday the joint council on high technology 
and environment technology would bold Its first meeting in 
Tokyo on December 12 and 13. William Dawkins, Tokyo 


Indian inflation rate is falling 


fcidte Inflation 

Annual 46 change to whofcnata prices 

14 . <«— — - - 


12- 


The Indian inflation rate is 
felling, anoording to data pub- 
lished this week showing that 
the annual rate of increase of 
wholesale prices in the week 
ending November 12 was 8.39 
per cent The inflation rate is 
well below its recent peak of 
13.7 per cent in 1991-92. when 
Prime Minister P.V. Nara- 
simha Rao, launched his eco- 
nomic reforms. It is also com- 
fortably below a recent high 
of more than 11 per cent in 
May this year, when the rate 
of increase was pushed up by 
- . rises in prices of government 

_ . controlled commodities 

sonsKa^.netratraam including fertilisers. A good 

monsoon, the seventh in succession, has helped limit. price 
increases. Stefan Wagstyl, New Delhi 


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FINANCIAI* TIMES TUESDAY NOVEMBER 29 1994 . 


NEWS: WORLD TRADE 


China spells I Fears grow over EU weapon’s safety 


out views on 


Some see trade proposal turning into unguided missile, says Guy de Jonquieres 


Gatt timing 


U S Section 301 trade leg- 
islation, which calls 
on other countries to 
open their markets or face the 
threat of retaliation, has long 
inspired fear and loathing in 
critics around the world. 

Few have spoken out more 
loudly than Sir Leon Brittan. 
Europe's trade commissioner, 
who has accused Washington 
of using "bilateral bully" tac- 
tics to extract trade conces- 
sions by force. 

But now Sir Leon has stirred 
up controversy by proposing 
an EU trade measure which, 
according to its opponents and 
supporters, could serve many 
of the same purposes as Sec- 
tion 301 actions. 

At issue is the Commission's 
plan for a so-called illicit prac- 
tices regulation. Submitted to 
the Council of Ministers 
recently as part of the Uruguay 
Round implementing legisla- 
tion. it aims to streamline 
existing EU procedures for 
tackling other countries' trade 
barriers. 

Sir Leon insists the regula- 
tion differs from Section 301 
because it would be used only 
to hold other countries to 
agreed international rules, not 
to pass unilateral judgments 
on their track! policies. 

His reassurances have not, 
however, convinced everyone. 
“The more Brussels tries to 
explain why the regulation is 
not like Section 301. the more 
s imil ar it sounds,” says a 
senior official of one of Asia's 
most successful exporting 
economies. 

The proposal has divided EU 
members. France and most 
Mediterranean governments 
support it, saying the EU needs 
to beef up its negotiating mus- 


By Guy de JorrquJdres, 
Business Editor 


China said yesterday that it 
would offer no new conces- 
sions in its eight-year-long 
negotiations to rejoin the Gen- 
eral Agreement on Tariffis and 
Trade if the talks were not con- 
cluded by the end of the year. 

However, Beijing said it 
would continue to participate 
in negotiations after the dead- 
line until its Gatt status was 
resumed, if it were asked to do 
so by the secretariat of Gatt or 
the World Trade Organisation, 
its successor. 

The message was conveyed 
to Mr Peter Sutherland, Gatt 
directo r-gene raL by Mr Long 
Yong-tu, Beijing's chief negoti- 
ator. who has led a Chinese 
delegation to Geneva to take 
part in further membership 
talks. 

Western diplomats said the 
statement appeared to be a 
face-saving acknowledgement 
that it may be impossible to 
reach an agreement on WTO 
entry terms by the end of the 
year, and that China may have 
no option hut to accept an 
extension. They pointed out 
that Beijing appeared to have 
softened Its previous line by 
dropping suggestions that it 
would walk away from the 
talks if the year-end deadline 
was not met. 

They also said China's insis- 
tence that it would not make 
fresh offers or seek bilateral 


negotiations with Gatt mem- 
bers after the end of this year 
need not prevent it from 
responding to demands by 
other countries that it make 
concessions. 

“To the extent that it is not 
useful to set artificial dead- 
lines, then so much the bet- 
ter," said one US trade official 
about Mr Long's statement 

The US and the EU have 
both told Beijing recently that 
they would be prepared to con- 
sider helping China to fulfil its 
ambition of becoming a 
founder member of the WTO 
by conferring such status on it 
even if it joined well into next 
year. 

However, China has balked 
at the offer, arguing that it is a 
device to enable the US to con- 
tinue spinning out membership 
negotiations indefinitely. Bei- 
jing blames the US for the slow 
progress of the talks to date, 
saying that every time China 
makes a concession, Washing- 
ton asks for more. 

The US, under strong pres- 
sure from American industry, 
has insisted that Oirna join the 
WTO as a developed country - 
a demand which Beijing has 
strongly rejected. Although the 
EU agrees with Washington 
that Beijing still has a long 
way to go to meet the require- 
ments of the multilateral trad- 
ing system, it is ready to be 
more flexible by allowing 
China an adjustment period 
after it enters the WTO. 


cle to compensate for cuts in 
its trade barriers required by 
the Uruguay Round. 

“When your market defences 
are coming down, it makes 
sense to switch to the attack," 
says an official of the Patronat, 
the French employers' organi- 
sation. "The regulation is a can 
opener. It is not Section 301. 


practices not already banned 
by Community rules. Though 
in existence since 1984, it has 
has been little used. 

The new regulation would 
make it more accessible by 
entitling individual companies 
- not just EU governments and 
industry bodies, as at present - 
to institute complaints against 


and in areas where WTO rules 
are lacking or Incomplete. 

EU government critics, how- 
ever, are worried by several 
aspects of the proposed regula- 
tion, which they say is not 
essential to implementation of 
the Uruguay Round. Their 
concerns are: 

• That its wording is too 


EU external trade 


1992, Sbn 



■■I Exports 
Imports 


100 200 


400 BOO 600 700 



Brittan: stirred up controversy 


but is in the same spirit." 

Such thinking troubles more 
liberal EU governments. 
Britain. Denmark. Germany 
and the Netherlands fear that 
the proposal could unleash an 
unguided missile which might 
threaten the authority of the 
new World Trade Organisation. 

The proposal is backed by 
Unice, the European industry 
federation. However, the BDI, 
the German employers’ body, 
says it supported the Unice 
line only out of European soli- 
darity, and has deep reserva- 
tions about the planned regula- 
tion. 

Formally, the proposal is a 
revision of the EU’s “new com- 
mercial instrument", which 
permits action against trade 


other countries’ trade barriers. 
The complaints would be dealt 
with by a new committee of 
member states and the Com- 
mission, and be chaired by the 
latter. 

Commission officials say this 
“third track” would give Euro- 
pean exporters the right to the 
same prompt investigations as 
EU anti-dumping procedures 
offer importers which face low- 
priced foreign competition. 

Brussels stresses that the 
proposal addresses trade prac- 
tices “incompatible with inter- 
national law” and would be 
used primarily to identify 
cases for adjudication by WTO 
disputes panels. However, they 
do not exclude using it against 
countries outside the WTO, 


vague and could lead to indis- 
criminate attacks on any trade 
practices used, by other WTO 
members, rather than only 
those which are actionable 
under WTO rules. For 
instance, French industry 
thinks the regulation should 
be used against countries 
which permit anti-competitive 
practices, such as cartels, 
in their hrwno mark^te These 
currently lie outside the WTO's 
jurisdiction. 

• That the procedures envis- 
aged could give the Commis- 
sion too much scope for action, 
without consulting closely 
enough with the Article 113 
committee, the body in 
which the Commission and 
EU governments co-ordinate 


external trade policy. 

• That there are uncertainties 

about how the regulation 
would fit with a recent Euro- 
pean Court ruling which says 
the Commission and the Coun- 
cil have “mixed competence" 
over trade in services. 

• That it is unclear what form 
of actions, other than reference 
to a WTO disputes panel, the 
EU might take against alleg- 
edly illicit practices, and 
whether such actions might 
in finite unilateral retaliat ion . 

Commission officials Insist 
nmt, unlike Section 301, the 
proposal does not provide for 
unilate ral sanctions and say 
they would not resort to th em . 
However, French officials say 
the regulation’s exact applica- 
tion in this and other areas is 
still under debate. 

Some observers suspect the 
Commission may have deliber- 
ately left details of the pro- 
posal unclear. They say that, 
for all Sr Leon Brittan’s criti- 
cisms of aggressive US trade 
tactics, his alternative 
approach of “quiet diplomacy" 
towards Japan has produced 
little. 

As a consequence, he faces 
growing pressure from Euro- 
pean industry to adopt stron- 
ger market-opening measures. 
In its presort form, the pro- 
posal looks sufficiently tough 
to satisfy these tWiandg, with- 
out committing the Commis- 
sion to taking specific actions. 

Even the regulation's liberal- 
minded opponents think Sir 
Leon would not abuse it. But 
that is not their main concern. 
Says one: "The problem is that 
he w31 not have the job ■for- 
ever, and a more protectionist 
successor might have fewer 
scruples.” 


seeks 
renewed 
oil right! 


US factions rally forces for today’s Uruguay Round vote 


By Nancy Dunne in Washington 


Opponents and supporters of the 
Uruguay Round global trade pact 
yesterday put on a huge advertising 
campaign and series of media events 
before today's vote on the pact in 
the House of Representatives. 

The vote on the legislation imple- 
menting the round is set to pass in 
the House, but Thursday's vote in 
the Senate is likely to be much 
closer. Mr Ralph Nader, the con- 


sumer activist and a leader of anti- 
Gatt forces, said neither side could 
claim enough votes in the Senate, 
where 60 are needed for passage. 

The battle, conducted when there 
is little else in the national news, 
received national attention on a par 
with the fight over the North Ameri- 
can Free Trade Agreement Oppo- 
nents maintained that polls showed 
the US public were against the deal. 

In an effort to counter the nega- 
tive messages, supporters, led by 


the Alliance for Gatt Now, poured 
funds into television, radio and 
print. Individual companies - Boe- 
ing, Merrill Lynch, and EDS - 
entered the fray and trade groups 
such as the Grocery Manufacturers 
of America called far "a vote of con- 
fidence in America's ability to suc- 
ceed in a fair world trading sys- 
tem". 

President Clinton held a rally 
with supporters, hoping to convince 
wavering senators. The president 


said: “It is not a Republican agree- 
ment or a Democratic one. It is an 
American agreement designed to 
benefit all the American people in 
every region of oar country and 
from every walk of life.” Three for- 
mer presidents - George Bush, Ger- 
ald Ford and Jimmy Carter - 
released a letter to the president 
calling the pact "a bridge from the 
post-war world of half a century ago 
to the post-Cald War world which is 
being forged today”. 


“Every nation in the world is 
waiting for us to pass fins agree- 
ment,” said Mr Sfitftey Kantor, the 
US trade representative. 

The US Business and Industrial 
Council, a protectionist business 
group, placed a large advertisement 
in the Washington Post listing 
names of 91 defeated and retiring 
senators and house members. "The 
Gatt vote will be very close,” it said. 
"This means that the defeated lame 
dock Congressmen and senators - 


many of whom wHL soon become 
lobbyists for special and. foreign . 
interests - wiQ get to decide OUR . 
economic future." 

All weekend CNN ran an adver- 
tisement with pigs - designated as 
members - at a trough. “Some call 
it a global trade deal, bat hidden 
inside is biOtons of special interest 
pork,” it says. “Call your senators 
today and tell them don't butcher 
the budget. Take the fat out of 
.Gatt."- ... 


japan has dsked Kuwait to 
renew, promptly Arabian Oil’s 
driffifcg rights in. oiIjfiads .Qff 
the Gulf emirate. ‘ 

Mr Ryularo Hashimoto, min- 
ister of international trade and 
industry asked Mr AMuhnofr- 
sen al-Mude], the visiting 
Kuwaiti oil minister, for an 
early decision. to-. exten d the 
wrfcHnff contract, due. to expire 
in 2003. Arabian OR is the only 
Japanese operator of oil fi e lds 
in- the Middle East, from winch 
Japan buys the bulk of its dll 
needs. Reuter. Tokyo 

■ Hyundai Precision and 

Industry, a unit of South 
Korea's Hyundai Group, has 
won a contract worth about 
$ 80 m to supply electric locomo- 
tives and rail coach® to Mai-, 
aysia. The deal with the Malay- 
sian government covers the . 
supply of 66 coaches and loco- 
motives by the second half of < 
1996. Reuter, Seoul . . _ 

■ S Megga International Hold- 
ings fras formed a telecommu- 
nications joint- venture with' 
China Electronic System and 
Engineering. Total investment 
is expected to reach, YnlOQm 
($U.75m). 

The venture, CESEC Tele- 
com Network System, will be 
responsible for sourcing, 
installing and itiainteming- 
equipment for Global Position- 
ing Systems 8O0Mhz trunking 
systems and cellular phone 
networks in a number of 
Chinese cities. Reuter, Banff . 
Bong 

■ : Wait Disney will launch its 
first overseas pay channel in 
Taiwan in March, 1995. The 20- 
honr-a-day, seven-day-a-week 
pay cable family service will 
feature Disney animation 
dubbed in Mandarin Chinese 
and subtitled family films. Dis- 
ney Channel Taiwan forecasts 
an initial audience of l -6m 
households in the first year. 
AFX, Taipei ' 

* Japan's. Electric Power 
Development said GEC Als- 
thom's unit, GEC Alsthom 
Moteure, has won a contract to 
supply two hydroelectric gen- 
erators for the 8MW Saitsunai- 
gawa river power plant AFX 
Tokyo . . 


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INTERNATIONAL ECONOMIC INDICATORS: PRODUCTION AND EMPLOYMENT 


Yearly data tar ratal sates wghsna and tockigtxfcri production pfas afl don far ft* vncmcy rate indteator ara kl Mac form wtth 196&.100. Quarterly and monthly date far rated sates 
and industrial production show the pv r mma g u changa over thn com ap omfriB ported In tha pravtaus year, and am poaUhra urtesa otharvriaa sttesd. The mampkynent rata Is shown 
as a perce n tage of the total labour tocca Rgtfro fty the compo si te Isadfag Indicator ara and-portod wflues. 


■ UNITED STATES 


JAPAN 

AW 


■ GERMANY 


ttetp- tenet CbismIi 


2.6 1008 
2 -8 913 


find Singapore 


2 a ioaa 

25 13SJ3 


7.1 100.0 

04 138.4 


Z2 147.Q 
2.1 148a 


&2 149.4 

R2 164.6 


2.1 144-2 

2.1 1242 


5-6 216.7 

4.8 261.1 


28 10W 


42 - 270.7 
4.8 2602 


58 198.5 


4th qtr.1993 
lot qtr.1994 
2nd qtr.1994 
3rd qtr.1994 


2.7 ioaa 
23 101.7 

2a 1029 


6a 1009 
05 194.3 

6.6 1888 
194a 


to their taste. 


Find out what 


Nove mb er 1893 

December 

January 1094 

February 

March 

April 

May 

June 

August 


2.7 111.8 

28 99.5 

2.7 979 

29 97.7 

29 110.7 

29 995 

28 1038 

28 105.1 

38 988 

3.0 1069 


6L3 180.1 

68 182.6 
6.4 1809 

65 1988 

65 185.9 

68 1928 

88 1878 

68 1859 

6L5 190.1 

65 193.4 

1998 
2078 


■ FRANCE 


■ ITALY 


■ UNITED KINGDOM 


you can chew on. 


4Ui qtr.1993 
1st qtr.1994 
2nd qtr.1994 
3rd qtr.1994 


The Food and Hotel Asia convention wasn’t the only successful one that showcased Singapore as Asia’s leading 
meeting destination. Each month there are new exhibitions, new conferences and new meetings where you can 
exchange the latest on your industry or products. Not to mention a whole new world of entertainment in the city 
where the best of the East and West come together. Convention City Singapore. It’s definitely food for thought 


Nuvembar 1993 
Dacambor 
January 1994 
Fabnwy 

llteinh 

TRSmCu 

April 


Juris 

July 

August 

September 

October 


CONVENTIONS 1995 


□ 14-16 Febnary 1995 
Trenchless Asia ’95 


□ 19-23 March 1995 

IUVDT World STD/AIDS 
Congress 1995 


□ 7-9 March 1995 

SEMICON/Test, Assembly & 
Packaging '95 


Plmc whet my Jpprtile far jour forthcoming 
events. 


□ 23-26 February 1995 
1 1th World Congress on 
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Gynaecology 


□ 24-26 March 1995 

2nd Singapore International 
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Golf Asia ’95 


PIcuvKnJne 

□ more mfambm about the Convent torn 

* Exhibition, Indicated 

□ the Singapore Coitvcnboa <k Bihibilma 
Calendar 


Nk aortas swaaonaOy afliwted. Staflatica to Germany apply only to waetam Germany. Date MaTOad by n~ 

a eycM a ceopt Japan and iwty (value *wta» deflated by OECD using CPU. Raters » total rets* sates accept France ms 
Industrial production: data from natural gowfimant sources, fndudas mrtng. manufacturing, gas, etocnictty ml ws 
only) and UK (also Includes construction Industries^- Unemployment note: OECD standardised rata which rfutts astv 
In ofaefai sources. Vacancy rate todkratar: ratevart vacancy measure cfivWed by total riv«an amptaym m . expressed 
advertising, Japan - new vacancies, Germany and Franca - d jobs vacant. Italy - no data evaflabte. UK - urffed v* 
tanfateaBon of sates. cycicai fluctajattona In which uwofly precede cycOcd feciuriono in generte economic aclMtp 


l trom naaon * BOvemmont 

— Japan (department stores onM. 
aa ^ manufacturing 

2 ™.°!°° “tea- ^ - hafa-wtrtsd 
^noes. Composite testing nticator OECO data Each is a 


□ 13-18 April 1995 

I (kb Asian-Pacific Optometric 
Congress 


□ 5-S April 2995 
Security Asia '95 


a 6-7 March 1995 
International Disk Drive 
Equipment and Materials 
Association Technical 
Conference 


□ 24-26 April 1995 
International Congress on 
Real Estate 


□ 6-9 April 1995 

Asia Apparel Machinery and 
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Textile Machinery 
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NEWS: UK 


Company hopes undersea tie with Scotland will follow restoration of connection severed by IRA 

Irish cross-border electricity link to reonei 


By John Murray Brown in Dublin 

The power link between Ulster and 
the Irish Republic, which was dam- 
aged by a series of IRA bomb attacks 
in the early 1970s, is to be restored, 
Northern Ireland Electricity, the pri- 
vatised power utility, announced yes- 
terday. NIE is the largest quoted com- 
pany in Northern Ireland. 

The rehabilitation of the North- 
South Interconnector is one of a num- 
ber of cross-border initiatives dusted 
off in the wake of the paramilitary 


ceasefires. The move will result in 
savings for both Nt£ and the Electric- 
ity Supply Board, the republic's power 
utility. 

The restoration also increases the 
viability of NfE's proposed £i75m 
($287m) power link with Scotland, the 
subject of a public inquiry which 
should be complete by February. 

An NIE official said yesterday the 
two projects were “perfectly comple- 
mentary and in line with European 
energy policy". 

The company’s link with the repub- 


lic mil Improve load-management effi- 
ciencies, allowing botb companies to 
cover temporary power shortfalls. It 
will also provide trading opportuni- 
ties for NIE to sell to ESB. 

NIE stressed they were "still 
talking about contracts". However, 
ESB estimated the project could 
result in savings of IE500.000 ($810,000) 
a year. 

Mr Geoffrey Horton, the Northern 
Ireland electricity regulator, is 
reviewing NIE's proposed undersea 
interconnector project with Scottish 


Power after a request from Northern 
Ireland's consumer cnmmtHpa 

As part of the review, Mr Horton is 
looking at alternative proposals 
including one from Meekathaxra Min- 
erals, the loss-making Australian min- 
ing company, to build a lignite power 
plant near its coal development near 
BaUymoney in County Antrim. 

NIE said yesterday the company 
had “nothing to fear" from the out- 
come of any review process. “Its not 
just a [powerj generation problem, its 
also a question of ending the prov- 


ince’s [Northern Ireland] isolation,” 
said Mr Jeff Rigby of NIE. 

The European Union has already 
given its backing to the project with a 
grant of £S1m for the interconnector 
with Scotland under EU regional aid. 
NIE said the north -south 
interconnector could be in service by 
next March. 

If the Scottish Power link up gets 
the go-ahead, both Irish grids, north 
and south, will for the first time be 
integrated into the European 
network. 


Pearson and BBC 
to launch extra 
satellite channels 


UK NEWS DIGEST 

Growth eludes 
newcomers to 
phone market 

The newcomers to the UK mobile telephone market, Mercury 
One 2 One and Hutchison Telecoms' Orange, are failing to 
make an impact in the business sector, says a survey of 
members of the Telecommunications Managers Association, 
which represents large users of telephones. It says the sector 
continues to be dominated by the traditional operators, Voda- 
fone and Cellnet One 2 One is a joint venture by Mercury and 
US West and the largest shareholder in Orange Is Hutchison 
Whampoa, the Hong Kong conglomerate. 

Vodafone remains the principle mobile phone operator with 
a 46 per cent share while Cellnet, a joint venture by British 
Telecommunications and Securicor, has 38 per cent Mercury 
One 2 One, which was launched last year, has a 2 per cent 
share while Orange, launched about six months ago, has 1 per 
cent 

Orange, however, is expected soon to overtake One 2 One in 
popularity in the business community. Asked which operators 
were most likely to meet business needs over the next two 
years, 31 per cent of respondents chose Vodafone, 21 per cent 
Cellnet, 14 per cent Orange and 1 per cent One 2 One. 

The survey, published at the annual TMA conference yester- 
day, confirms anecdotal evidence that Vodafone and Cellnet 
are taking the lion’s share of the current portable phone sales 
boom because their analogue systems are mature, well-tested 
and provide extensive coverage of the country. The newcom- 
ers, which offer only digital services, are still developing their 
technical infrastructures, and both are limited in coverage. 

Australian competitor arrives 

Telstra, the large government-owned Australian telecommuni- 
cations group, plans soon to launch an international telephone 
service for UK-based corporate customers. The group acquired 
a licence to operate in the domestic UK market in April, and 
was the second overseas carrier to do so. It suggested then 
that it would offer domestic voice and data services, and resale 
services to Australia. 

Its plans now envisage a broader international call service 
aimed at corporations and financial institutions. Telstra said it 
plans to start marketing the service immediately, although it 
will probably not come Into effect until February and will not 
be launched formally until March. The group feces increasing 
competition in its domestic market Its previous monopoly 
position has been eroded and it has been attempting to coun- 
teract this with international expansion. 

• Nynex CableComms, one of the largest cable operators, 
yestenfey launched new low-cost phone services for business 
customers, to include free local calls to multi-site subscribers 
with three or more Nynex lines per site. 

Police to keep helmets 

The Metropolitan Police, who patrol most of 
MB London, are to keep their traditional pointed 

fllfefli helmets for safety reasons, Scotland Yard said 
9 yesterday. The hebnet, introduced in 1863 and 
|SSjjgfl . 1 based on a military design used by the Prus- 

gfan army two decades earlier, is reinforced 
with plastic and provides protection against a 
blow to the head. The decision to allow the 
helmet to survive a review of police clothing 
will help identify officers from the increasing numbers of 
private security firms with police-style uniforms. Some police 
forces, Including the one in the northern city of Manchester, 
are switching to peaked caps similar to those used in Scotland. 

Row between rail companies 

One of the new state-owned train operating companies has 
accused Rail track, the owner of the national network s track 
and stations, of providing such a poor service that it has been 
unable to run its advertised, timetables. North Umdon Rail- 
ways said it bad held talks with RaiJtrack about urgently 
needed improvements. Mi- Chris Gibbard, retail manager of 
North London, told the local consumer watchdog committee: 
"We have all been as frustrated as yourself and all our 
customers at Railtrack’s apparent inability to manage the 

of Mr Gibbard’s comments were made public by Ms 
filenda Jackson, the actress who is now Labour MP for the 
Kfn SSEnr ^ Hampstead and Highgate. "This letter 
t£ows the damage being caused by the guvernmmiPsmr^pon- 
Shie fragmentation of the network," she aid. Raflteu* and 
Snrth Lrndon Railways are two of the units carved out of the 
fennarfttttab Rail in preparation for a sell-off of the network 
in the next few years. 

Racists blamed for attack 

A motive lay behind a beating with a brick which left an 

* ^hSSo^tosoSh Wales near death, senior police 

piiire believe young men staged a disturbance in 
< P era .f^J^ sSy to lure Mr Mohan Star* Knllar, 60, 
the early hmre ^th his family. Racist 

received threatening letters. 

f^r^r^tosuffered a double fractoreof the skull, was 
1 ? £ -critically ill" on a life support machine. “He 

said later to w? ^ a botrt the head; there was no rob- 
was cold-Uo«u»iy snji WjecBw chief Superintendent Phil 
bery or focal Labour MP, called in the House 

Jones. Mr ^ -the rising tide of racist and 

1 

Workplace discipline tightened 

W *■ r tightened disciplinary procedures for 

Many compamra ^ m raflge ^ *sdplinaiy offences 

employees and taj/e & aurvey from the independent 


in UBS r. n^nnrrm mL ““““ •«* 

Ubwir Rfea^JSnts covered in the survey were tiffet- 
14 7 procedure period. “The range of possible 

ewsd * a Wvarlety of Issues m* 

offences * of discipline inclufcng smotaog, sex and 

previously the ^^£ mpu ter-related offences," it says, 
race baraW®t ^° eV £aice to suggest that Mmpaofes have 
It has found someev^ lengtJienlng unemployment queues 
used the recession e - The proportion ofworiqilaces 

{Tighten up racial harassment as matters of gross 

1988 to 

Conduct by emptoye® 

16 per cent — 


Rentokil overtakes Glaxo in survey 


By Tim Dickson 

Rentokil, the highly profitable 
business services group, has 
replaced pharmaceuticals giant 
Glaxo as Britain's most 
admired company, a survey 
said yesterday. 

Queens Moat Houses, the 
debt-ridden hotel group, was 
least admired, although 
Lonrho and Eurotunnel were 
only just ahead in the poll pub- 
lished by Management Today 
magazine in association with 
Loughborough University. 

The survey covered the 10 
biggest quoted companies by 
stock market capitalisation in 
each of 26 industrial sectors. 


The .10 most 
admired companies 


1892 IBM ■ 


Company 

ftantokl 

Glaxo 

Maries & Spencer 
SmitftKBne Seachom 
Unflew 
Reuters 

Cadbuiy Schweppes 

Bo c frocomponanto 

Shell 

Bowthorpa 


The chairman, chief executive 
and five other directors from 
each of the businesses were 
asked to rate companies in 
their sector on a scale of one to 
10 on the basis of nine criteria. 


These ranged from manage- 
ment quality, financial sound- 
ness and ability to recruit and. 
retain top talent to innovation, 
community and environmental 
responsibility and use of corpo- 
rate assets. 

Sector analysts at 10 leading 
investment companies were 
also asked for their opinions. 

Apart from Rentokil and 
Glaxo - the latter topped the 
previous survey in 1992 - 
Marks and Spencer, Smith- 
Klme Beecbam, Unilever, Reu- 
ters and Shell were all well 
regarded and retained their 
places in the top 10. Among 
less familiar names Electro- 
components, the electronic and 


mechanical components distri- 
bution group, and Bowthorpe, 
the manufacturer of specialist 
electronics, were eighth and 
10th respectively. 

Companies making the great- 
est strides from 1992 included 
supermarket group Asda (up 
from 239th place to 198), Whit- 
bread (161 to 25) and British 
Steel (189 to 54). Among the 
biggest lasers were the exhibi- 
tions group Blenheim, which 
has been plagued by poor 
results, profit warnings and 
internal dissent (down from 80 
to 256), pharmaceuticals group 
Wellcome (11 to 108) and Enter- 
prise Oil, the unsuccessful bid- 
der for Lasmo (79 to 222). 


By Raymond Snoddy 

The BBC and media group 
Pearson yesterday announced 
thesr plans to push ahead with 
the launch in January of two 
24-hour European satellite tele- 
vision channels , one devoted to 
news and the other entertain- 
ment 

BBC Prime, a subscription 
service concentrating on 
drama, comedy, light enter- 
tainment, natural history and 
Children's prog ramming , will 
replace the BBC's existing 
European general program- 
ming. 

BBC World, to be financed 
by advertising, will offer news 
cm the hour backed up by cur- 
rent affairs, documentaries 
asnd factual programmes. 

Both «*hflnnala, aimed mainly 
at continental European cable 
television networks, will be 
launched on January 26. Nei- 
ther will be available in the UK 
although the BBC hopes even- 
tually to launch a 24-hour tele- 
vision news service for Britain. 

The launch is the first fruit 
of the strategic alliance 
announced earlier this year 
between the BBC and Pearson, 
owner of the Financial Times. 


The number of subscribers to 
cable networks is accelerating 
according to official figures 
from the Independent 
Television Commission. By 
October 1 a total of 779,461 
homes was connected to 
modem broadband cable 
networks, a 50 per cent 
increase over 12 months. 

Under the deal Pearson has 
agreed to meet the estimated 
peak finanring cost of the two- 
c fiannel venture of up to £30m, 
with the BBC contributing 
broadcasting expertise and pro- 
grammes from its Rh rary. 

At the moment the venture 
is a 50-50 one between Pearson 
and the BBC, but talks are said 
to be at an advanced stage to 
bring in one or more additional 
investors who would have a 
total of 20 per cent 

It is believed that a new 
potential partner is Cox, the 
Atlanta-based media group. 

Plans are already being 
drawn up to take similar chan- 
nels to both the Far East and 
north America. The smaller 
markets of Australia and 
South Africa are also being 
examined. 


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FINANCIAL TIMES TUESD • - i—LJ. 


NEWS: UK 


Crackdown urged on black market in milk sales 


A 


ftefl c 


By Alison Maitland 


The UK government, dairy industry 
and fanners’ leaders called yester- 
day for a crackdown on an emerging 
black market in milk sales. 

The Intervention Board, the pv- 
erament department that polices 
Common Agricultural Policy milk 
quotas in the UK, is investigating 
allegations that fanners are illegally 
selling milk to small processors. 

Under European Union regula- 
tions, all milk sold by farmers 


must be offset against their 
individual quota limit. It is 
illegal to sell the milk without 
declaring it. 

The deregulation of the dairy 
industry in Britain has helped push 
up prices to formers, encouraging 
them to produce more milk and 
boosting demand for quota. Euro- 
pean milk quotas, however, prevent 
British farmers from meeting more 
than 85 per cent of the domestic 
needs. 

Mr William Waldegrave, agricul- 


ture minister, said farmers were 
understandably frustrated about the 
EU quota constraints. But they 
would be “wrong and foolish” to 
break the rules. 

“They’d find themselves in very 
great difficulty at a time when we re 
rightly adding to the drive on fraud 
in the CAP." he said. “Any 
suggestions that was beginning to 
happen in the UK would be very 

damag in g .” 

The intervention board said more 
than half the 30 tlpoffs to its fraud 


hotline, set up on November 9. had 
alleged milk fraud. 

Milk Marque, the dairy farmers' 
co-operative that controls more than 
55 per cent of supplies in England 
and Wales, said “ a handful" of its 
members were being investigated for 
alleged fraud. 

Mr Neil MacFarlane, manager for 
the Midlands and north Wales, sai± 
“It's not a massive problem, but it 
gets emotions r unnin g high when 
people are seen to be cheating. It's 
another potential fraud and it could 


become large-scale.” Fanners face 
hefty penalties for producing milk 
without aquota. 

They could be levied 29p (40c) a 
litre by the Intervention Board and 
face an unlimited fine and up to two 
years in prison if the case goes to 
the criminal courts. 

Milk quotas are traded between 
farmers. However, the cost of buying 
or leasing the extra quota a former 
needs to cover increased output has 
soared, reaching a peak this year of 
21 p a litre for leased quota. 


Sir David Naish, president of the 
National Farmers’ Union of England 
and Wales, said quotas caused diffi- 
culties, but there was “no excuse for 
ft l ank market eering”. Milk Marque 
urged the intervention board to 
"stamp mi it** Breaches were ferny 
obvious, Mr MacFarlane said. Trs 
very difficult to hide a 16 or JLfrtoime 
tanker going on to your farm.” 

This year's overproduction of milk 
may push the UK over its Mbn-fitre 
quota. Milk Marque urged farmers to 
wind down production gradually. 



roU 


extent 
of asthma 


By Motoko Rich 


Replace CAP subsidies, says think-tank 


By Afison Maitland 


Agricultural subsidies to 
farmers in the European Union 
should be phased out and 
replaced by a “safety net" of 
social and environmental 
payments in rural areas, the 
Royal Institute of International 
Affairs will recommend this 
week. 

The radical proposals Cram 
the Chatham House think-tank 
are the Latest in a groundswell 
of pressure for further reform 
of the Common Agricultural 
Policy, intensified by the 
proposed entry of east Euro- 
pean countries into the EU. 

The institute calls in a 10- 
point programme of reform to 
be unveiled in Brussels on 
Thursday for a comprehensive 
policy for rural development to 
replace the CAP and take on a 
comparable political impor- 
tance. It says this would 
involve "organisational 
changes" in the European 
Commission and the Council of 
Ministers - a hint that farm 
policy would be better dictated 
by a wider range of ministers 
than farm ministers. 

The report is designed to 


coincide with the arrival of the 
new European Commission 
next year. It recommends that 
support for all CAP products 
should be reduced to near 
world market prices over five 
to seven years and that border 
tariffs should be lowered. 

Existing compensation paid 
to farmers for price cuts 
should be phased out, while 
compensation for reductions in 
support prices in as yet unre- 
forrned sectors such as sugar 
should not be related in any 
way to output levels in order 
to discourage overproduction. 
It should also carry specific 
time limi ts. 

The institute wants produc- 
tion quotas for sugar and milk 
to be transferable across bor- 
ders in the short term, and to 
be eliminated In the long term. 
But it says payments for adopt- 
ing environmentally friendly 
practices should be available to 
all farmers. It calls for member 
states to have greater freedom 
to introduce social and envi- 
ronmental schemes provided 
these are strictly controlled to 

prevent unfair competition. 



Lord disclaims 
earldom to 
remain an MP 


11 ii 


Farm leaders attack. Page 30 


Mr W illiam Waldegrave, the UK agriculture 
minister, said yesterday it was highly unlikely 
that his European Union counterparts would 
agree this year acceptable limits on journey 
times for animals being transported to slaugh- 
ter. 

He said he did not expect agreement, 
although the best hope lay with the German 
presidency or the EU, which will cone! ode at 
the end of this year. It was even less likely 
under the French presidency next year because 
France would be preoccupied with elections. 

Leading British ferry companies have stopped 
transporting live animals to mainland Europe 
following protests from animal welfare groups. 


The companies say they will reconsider their 
bans only if there Is EC-wide agreement on 
shorter journey times. 

Mr Waldegrave said in London at the start of 
the Royal Smithfield Show, the UK’s main live- 
stock show, that the government was ready to 
introduce its own code of practice for hauliers 
if no EU deal emerged, and would seek help 
from other member states to police it. 

While accepting there was genuine concern 
abont animal welfare, he condemned violent 
tactics by extremists, such as bomb thr e ats 
against ferry companies. “We will not allow 
policy to be dictated by those who use such 
methods," he said. 


Row over duty-free sales reaches High Court 


Ferries, airlines, goods suppliers and 
Dover Harbour Board yesterday asked 
the High Court to block the attempt by 
Eurotunnel, the Channel tunnel opera- 
tor, to put an end to duty-free shopping. 

Eurotunnel, which is not allowed to 
sell duty-free goods on its trains 
although it has duty-free shops at Fol- 
kestone and Calais, claims its competi- 
tors are enjoying an unfair and discrim- 
inatory advantage under European free 
trade laws because they can subsidise 


fares from on-board sales profits. 

Eurotunnel's competitors argued that 
its application for a judicial review of a 
1991 Customs and Excise decision allow- 
ing the duty-free trade to continue 
should be struck out because it was 
brought outside legal time limits. 

The Customs decision was based on a 
rating by the European Council of Min- 
isters that, despite the advent of the 
European single market, the trade 
should be allowed to continue until 1999 


because of the failure to harmonise 
rates of duty between member states. 

At the start of a five-day hearing, the 
ferry companies' counsel told Lord Jus- 
tice Balcombe and Mr Justice Tucker 
Eurotunnel was seeking to argue that 
its competitors had no sufficient legal 
Interest in the case, enabling them to 
seek a strikeout order. He said this was 
clearly a “blatant" attempt to stop the 
court deciding the question of delay. 

The ferries and the other operators 


obviously had an interest because they 
relied on revenue from duty-free sales 
and would be seriously affected if Euro- 
tunnel won its case. 

Eurotunnel, which says the duty-free 
trade represents a total loss to the 
Exchequer of £600m a year in excise 
duty and value added tax, is asking that 
questions of European law are referred 
to the European Court of Justice as a 
preliminary to the full hearing of its 
judicial review application. i 


The govern- 
ment’s chances 
of securing vic- 
tory in the vote 
on the Euro- 
pean Commu- 
nities finance 
bill were boosted yesterday 
after a minister renounced an 
earldom which he had recently 
inherited, James Blitz writes. 

Lord James Douglas- 
Hamilton, a junior Scottish 
Office minister and MB for 
Edinburgh West, announced 
that he would not adopt the 
title Earl erf Selkirk following 
the death of the 10th earl, his 
unde, five days ago. 

If he had not made the state- 
ment Lord James could have 
been barred immediately from 
the Commons chamber and 
unable to vote in tonight's cru- 
cial division. 

Lord James's current title is 
a courtesy title and he can 
therefore sit as an MP. 

He said yesterday that he 
would renounce the earldom 
under the provisions of the 
Peerage Act 1963. He had 
already submitted documents 
of disclaimer. 

He said he had been 
unhappy to act so soon after 
the earl's death, but added: “I 
owe it as a duty to my constit- 
uents whom I wish to continue 
to serve, and as a matter of 
loyalty to the prime minister 
and to the Conservati v e party, 
to support John Major in the 
voting lobby tonight” 

He had discussed the rrertfgr 


During last night’s critical 
d eb ate on Britain's contribu- 
tions to the EU budget Con- 
servative Euro-critic Sir Teddy 
Taylor said that an “enor- 
mous" number of MPs would 
vote for "what they think Is a 
load of rubbish”. 

He warned: “I know there is 
a substantial number on this 
side who are totally opposed to 
what is happening, who feel 
oUiged to vote for it" 

He could not walk down the 
street and face people 
"straight and open" If it was 
decided to pour more cash Into 
“tins wasteful, fraudulent and 
nan-democratte organisation”. 


with Mr lan Lang, the Scottish 
secretary, and Mr Malcolm Rif- 
kind, the defence secretary, 

ftrtftrw making iip his , mmd ■ •. 

Mr Lang said last night: 
“Lord James’s decision is 
greatly folds credit It reflects 

his Strong r* w nrnlhTMmi ft>-thp . 
welfare of his constituents.” 

The Peerage Act was used by 
Mr Tony Benn, the Labour MP, 
to renounce the title Viscount 
Stansgate in 1963. Mr Quintm 
. Hogg, the. farmer Lord Chan- 
cellor, and Sir Alec Douglas 
Home, the former prime minis- 
ter, also renounced peerages in 
order to sit in the Commons.: . 

Several MPs pointed oat-yes- 
terday that Lord James’s deci- 
sion was particularly signifi- 
cant because he bad a majority 
of just OT9 in Edinburgh West 
at the last general election. 


A bakery worker has received 

£27,500 (*4&100) in tt-.mM- 

court settlement Witt, his 
employer after claiming he 
had asthma from inhaling 
flour dost •■■■ 

The ■ settlement was 
announced yesterday ^ . as 
Britain's Health and Safety 
Executive released research 
which showed employees who 
inhaled chemical and natural 
irritants at work could become 
lifelong victims of ast hma . 

Mr Roger Atley of Shaw- 
field, Glasgow, winked for the 
Rutherglen plant of Greggs, 
the Newcastle upon Tyne- 
based bakery chain. A court 
had been due to sta rt he aring 
bis damages claim against the 
company today. • 

The settlement was reached 
without any admission of lia- 
bility by Greggs. The BSE said 
the case would make employ- 
ers realise the Importance off 
j he edin g warnings about the 
risks of asthma at work. 

Robin Thompson and. Part- 
ners, Mr Atley’s solicitors, 
said they ware already taking 
legal action on behalf .of other 
bakery workers who said they 
contracted asthma in similar 
circumstances. 

The BSE's research, jointly 
funded by the National 
Asthma Campaign, found that 
increased workplace exposure 
to such irritants is the most 
important factor in triggering 
occupational asthma. ; 

Previously, researchers had 
concentrated <m the predispo- 
sition of an tadividaiil to wards 
allergic reactions, rather than 
the intensity of exposure to 
the irritants, said Professor 
Anthony Newman Taylor, of 
; Royal Brampton Hartal, who 
canted out the research. 

;- He . estimates there are 
between L500 and 2,000 new 
cases each year.' 

Mr Murray Devine, a senior 
HSE health poHey official, said 
employers should install bet- 
ter air extraction systems, 
enclose the processes which 
expose workers to irritants 
and provide protective equip- 
ment Such as madnL 


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FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 ★ 

BUSINESS AND THE LAW 


French request on 
air routes rejected 



EUROPEAN 

COURT 


The president of 
the European 
Coart of Justice 
has rejected 
France’s applica- 
tion for suspen- 
sion of the Euro- 
pean Commis- 
sion’s April 1994 
decision on access to the Paris 
(Oriy)-MarseIlle and Paris (Oriy> 

Toulouse air routes. ' 

He sa id the alleged damage to 
Air Into:, the French regional air- 
line, and French air transport had 
not been established. 

The Commission's deHrffm said 
France could not rely on the 
exclusivity provisions of the 1992 
counci] regulation (2408/92) on 
access to Community air routes to 
refuse Community arres t s 

to the contested routes, in favour 
of Air Inter. 

In June 1993, TAT European 
Airlines had applied to the French 
authorities fin a lirenw* to operate 
on the contested routes. The ampli- 
cation was rejected on the basis of 
the 1992 regulation which pe rmit , 
ted exclusive concessions on inter- 
nal routes for a transitional 
period, when service could not be 
assured by other forma of trans- 
port. The French authorities 
claimed Air Inter, part of the Air 
France group, enjoyed exclusivity 
under a 1985 agreement 
In September 1993, TAT com- 
plained to the Commission, rely- 
ing on a number of grounds 
including breach of the 1992 regu- 
lation. It argued France had 
agreed in October 1990 to termi- 
nate the Air France monopoly 
over the contested Orly routes by 
March 1 1992. Since TAT served 
the same routes from Paris 
Charles de Gaulle, Air Inter did 
not have exclusivity as envisaged 
by the regulation. TAT claimed 
the consequent discrimination 
between TAT and Air Inter in the 
allocation of routes infringed the 
1992 regulation. 

TAT asked the Commission to 
adopt a decision under the 1992 
regulation, saying France could 
not continue to apply the measure 
in issue. The contested decision 
was adopted on April 27, giving 
France until October 27 to comply. 

In dismissing the French appli- 
cation. for suspension of the Com- 
mission decision, the ECJ presi- 
dent said the rules of procedure 
required two conditions to be sat- 
isfied: urgency and prana fade 


grounds for interim measures. 

To be urgent, it must he neces- 
sary for the Court to adopt intmlm 
measures to prevent serious ami 
irreparable harm resulting from 
the Immediate application of the 
chehenged derisio n. 

The president rejected France’s 
arguments that serious and irrepa- 
rable harm would result France 
ebrhrieri that Air Inter would lose 
35 per cart market share within 
one year. This would prevent its 
operation of allegedly unprofitable 
services on the contested routes. 
Consequently, it would have to 
grant state aids to Air Inter to 
maintain that service, but would 
not be able to adopt the necessary 
measures before the end of 1995. 

France also maintained the 
immediate application of the deci- 
sion would cause serious harm to 
the organisation of French air 
transport and the policy of territo- 
rial management And since the 
exclusivity provirions of the regu- 
lation would expire on January 1 
1996^. the main appeal would be 
without purpose and the alleged 
damage irreparable. 

The Commission's response was 
that the evidence on the market 
evolution and profitability of Air 
Inter, which was unchallenged, 
revealed that it was unprofitable 
on international routes and not 
Orly routes. Even if specific 
regional routes were to be given 
up by Air Inter, which was 
unlikely, it said there were other 
airlines with lower costs which 

could enter the martret wnri main- 
tain French air transport policy. 

The p resident ramrihulflri the pm. 
dieted losses were uncertain. EWn 
if French estimates were correct, 
the risk that Air Inter would aban- 
don certain loss-making regional 
routes was a hypothesis subject to 
innumerable unpredictabilities. 
And if that did happen, there was 
no reason to believe the French 
authorities would be unable to 
ensure continuity of those routes 
by inviting other airlines to ser- 
vice them or by imposing public 
interest obligations in accordance 
with the 1992 regulation. 

Since the harm alleged was not 
established, it was not necessary 
to deride if prana fade grounds 
for interim measures existed. 

C-174/94R, France v Commission, 
ECJ order of president, October 26 
1394. 

BRICK COURT CHAMBERS, 
BRUSSELS 


-^-uver LUH njaj'icsr ^ ^ 


C orporate America 
blanched in early Septem- 
ber when a jury in Calif- 
ornia awarded Ms Rena 
Weeks, a former secretary at Inter- 
national law firm Baker & 
McKenzie, $7 .2m for ba*iwi harass- 
ment by partner Mr Martin Green- 
stein. 

Ms Weeks, who load worked for 
Mr Greenstein for just 25 days, took 
on the might of the world’s largest 
law firm and won the biggest ever 
sexual harassment award In a case 
not involving sexual assault or 
rape. What, then, might someone in 
her position inflict on a corporation 
less well placed than Baker & 
McKenzie to defend itself? 

In the search to find a rational 
explanation for the size of the 
award In the days that followed, 
law firms and company executives 
were tempted to regard it as an 
aberration of America’s bizarre sys- 
tem of punitive demagog 
After all, the San Francisco jury 
had awarded Ms Weeks only fSOJKN) 
for emotional distress caused by Mr 
Greenatein touching her breast 
while patting sweets into her blouse 
pocket. The rest of the award was 
punitive damages. 

But those who kidded themselves 
that the Weeks case was a one-off 
were soon disabused of the notion. 
The jurors, who had heard testi- 
mony of aEeged sexual harassment 
from other Baker & McKenzie 
employees, told America’s Court TV 
they felt that a message needed to 
be sent not just to the law firm hut 
to all companies of the dangers of 
ignoring and covering up unaccept- 
able conduct 

The result of the Weeks case, 
according to US employment lawyer 
Mr Ronald Green, a partner of New 
York’s Epstein Becker & Green, is 
likely to be a big jump in the num- 
ber of sexual hargagment rlnima in 
the US. 

Last week, Mr Green, who is 
widely regarded as America's lead- 
ing employer defence attorney in 
sbtimI harassment and discrimina- 
tion cases, was in London to talk to 
UK companies about the rise in this 
type of lawsuit in the US and the 
risk this poses to UK businesses. 

He said the most obvious risk was 
to companies with operations in the 
US. His message to them was that 
their US investment would be 
imperilled by indifference to this 
problem and they should take 
action now, rather than waiting 
until they faced a lawsuit 
His advice was tire same as that 
to his US corporate clients: carry 
out an immediate risk assessment, 
look at the company’s prior history 
of complaints, check grievance pro- 
cedures, and train your staff. 

"The aim Is to have employees 
know enough to expand their 
rights” he said. But not too much - 
“you don’t want to create a flow of 


At risk from 
harassment 


UK companies cannot afford to ignore 
sexual misconduct, says Robert Rice 



AP 

Rena Weeks: a jury In the US awarded her $7.2m for sexual harassment 

grievances and complaints". work that it received last year rose 

by 58 per cent from 502 in 1992 to 


The second group most at risk 
comprises UK subsidiaries of US 
companies. These companies need 
to be aware of the problem, because 
the US exercises jurisdiction in this 
area over a US-owned or controlled 
employer anywhere in the world. 

US-owned rampnnipq in the UK 
could find themselves facing law- 
suits in the US from UK-based 
employees. There was a timely 
reminder of this in April, when 
three mate foreign exchange dealers 
at the London branch of Goldman 
Sachs, the US investment bank, 
were farced to resign following com- 
plaints of sexual haraawmff i t from a 

female colleague. 

Mr Green also believes the UK 
could soon face a wave of its own 
sexual harassment cases. 

Although awards in the UK are 
unlikely to reach US levels - 
because juries do not decide dam- 
ages except in libel cases, and puni- 
tive damages are not generally 
available - there are signs of an 
upsurge in sex-based employment 
actions. 


793. In the first nine months of 1994 
it had already received 552. 

Public awareness of the problem 
in the UK has increased through 
cases such as that brought by 
Samantha Phillips, an aviation 
insurance broker with Wmis Cor- 
roon. In August she was awarded 
£18,000 damages by an industrial 
tribunal after claiming she was 
sacked because she spumed the 
advances of a senior manager. 

T he biggest threat to UK 
companies from sexual 
harassment p-laim« will 
come if the UK allows 
actions to be brought an behalf of a 
whole class, or group, of employees. 
In the US, Mr Green said. Class 
actions in employment cases were 
well established. In April 1992, for 
instance, the Illinois-based State 
Farm Insurance Company settled a 
sex discrinrinatian eiess artinn for 
3157m. 

In May 1993, in the first class 
action for sexual harassment, a 
Minnesota District Court found the 
Eveleth Tacanite mining company 


creating a hostile work environ- 
ment for women. Damages are yet 
to be assessed. 

actions In tills area are 
potentially devastating. In tbs US, a 
' woman or a man who has been sex- 
ually harassed has theriaht to eo to 
the US Equal Employment Opportu- 
nity Commission, which will Inves- 
tigate «nri prosecute the complaint 
free of charge. If the complainant is 
unhappy with the result, he or she 
is- entitled to bring an action for 
damages before a civil jury. 

Unde* a new Federal statute, the 
damages for emotional distress and 
punitive da ma g es recoverable by a 
plaintiff proving sexual harassment 
before a Federal jury are capped at 
$300,000, although the cap does not 
extend to damages for lost prior or . 
foture earnings. 

In a single action, tills law would 
be of benefit to employers, but in a 
class action the picture Is different 
One employee can claim not Just on 
bis or her own behalf but theoreti 
cally on behalf of all members of 
the class - which could mean every 
woman who works for, or has 
worked for, an employer. 

With each member of a successful 
Federal class action entitled to , 
recover up to $300,000, the potential 
threat of such a case to a company’s 

is pnonwniff 

Under state law, however, things 
are even worse. No state has a cap 
on damag es far « m y )Hrmai distress 
and only a handful, such as New ; 
York State, has a cap on punitive | 
damages. Ms Weeks was able to 1 
recover $7.2m because she brought i 
her case under California state law. 
”006 large class action under state i 
law could wipe out a corporation,” 1 
Mr Green said. 

Where companies have offices in 
several states, there is also a poten- 
tial for forum shopping. fywnpJaiw- 
anht could choose to bring a sexual 
lwBwinwiirt class a ri a o n in a state 
such as Florida, Michigan or Calif- 
ornia, which traditionally produce 
the highest jury awards. 

Mr Ckeen earned Ins reputation j 
as an employers’ defenc e attorney 
through, tough cross-examination of 
claimants on their past sexual 
behaviour and personal history. 
However, that hard-nosed approach 
Is under threat from new federal 
laws, extending the a b fe ld given to 
rape vic tims to plaintiffs in sexual 
harassment cases. The new law pro- 
hibits indiscriminate use of a plain- 
tiff’s sex history- 

Mr Green «*id this would make it 
more difficult for employers to dis- 
prove plain tifly rlabrm that sexual 
advances .were unwelcome and 
unprovoked. “You win these cases 
by destroying the credibility of the 
accuser,” he said. 

Such cases look- like becoming 
harder for employers to win. Com- 
panies doing business in the US 
have been warned. - 


The UK Equal Opportunities 
Commission says the number of 
complaints of seteud -harassment at -guilty of sexual harassment for 


11 


LEGAL BRIEFS 



Companies liable 
for employees' 
price-fixing deals 


T he English Bouse of Lords - 
has overturned the Appeal 
Court’s 1992 ruling to the 
Smiths* Concrete case, in which it 
said companies were not liable for 
their employees’ breaches of 
competition law. 

to 1991 Smiths and three other 
ready-mixed concrete companies 
operating in Oxfordshire were 
fined by the Restrictive Trade 
Practices Coart far allowing their 
represent ati ves to enter into price- 
fixing market-sharing 
arrangements. On the basis that 
th» companies had wp y stl y _ 
instructed employees not to 
participate to anti-competitive 
arrangements, and were therefore 
“not party to the agreements”, the 
Appeal Court allowed their 
appeals. The House of Lords has 
now overturned those decisions. 

The Law Lords said that to rule 
otherwise would allow companies 
to benefit from restr ictive trade 
practices outlawed by Parliament if 
the arrangements were made by 
employees and had been forbidden 
by “higher management”. An 
employee acting for the company 
within the scope of Us or her 
employment was the company, they 
said. The Lords also described the 
fines of up to £26,000 as “derisory". 

Competitio n lawyers say the 
decision points up the need for 
companies to adopt effective 
competition compliance 
programmes or risk heavier , 
penalties fn future. 

Breast implants 

A n estimated 50,000 British 
women who had breast 
implants before June 1993 __ 
have two more days to regmter for 
a share of the $4J0m worldwide 
settlement by US manuf ac tur er 
Dow Corning. Foreign women who 
fell to register by December l will 
be excluded from the settlement 
and may lose the right to pursue 
claims to the US courts. 










12 






,N* ' 


FINANCIAL TIMES . TUESDAY NOVEMBER 29 IP94 


TECHNOLOGY 


t. . 

*r ' s %% 





IN THIS SERIES: 


DECEMBER 

Causes and prev'enLon. 
Smoking. Diet and feed 
supplements. Sunshine 
and skin cancer. 
Chemicals and other 
environmental causes. 
Vaccines against cancer- 
causing viruses. 
Antibiotics to prevent 
stomach cancer. 

JANUARY 

Diagnosis and screening. 
Genetic susceptibility. 
Scans. Identifying cancer 
markers in the bleed. 
Politics and economies of 
screening. 

FEBRUARY 

Chemotherapy. 

Drugs to kill rapidly 
dividing cancer cells. 
Reducing multi-drug 
resistance. Anti-nausea 
drugs and othp'- ways Qf 
reducing side effects. 
Hormone-based 
treatments. Photodynamic 
therapy. Herbs! and 
alternative remedies. 

MARCH 

Radiotherapy. 

X-rays. Gamma rays. 
Neutron beams. Heavy- 
ions. 

Magic bullets. 

Antibodies and fusion 
toxins aimed at cancer 
cells. 

APRIL 

Genetic treatment and 
o trier biotech approaches. 
Gene therapy and anti- 
sense. Ceil migration and 
adhesion. Apoptosis and 
cell suicide, 
inirnunostimuiants. 

Cell growth factors. 
Irnerferons and 
Jnterfeukfas. 


Cancer kills five people every minute of the day. 
In the first of a six-part series, Clive Cookson 
reports on the war against cancer and the 
encouraging trends behind the statistics. 


Closing in on a 
serial killer 


Causes off death 

In developed countries (1390) 


Canfiovascutsr 

5-38m 



- Other 



tops 



Cancer 

2_45m 


Dea t hs by cancer ~ 

in developed countries fOOOs) 


Accidents, 
murder and 
strode 
•<L87m 


C ancer continues to sink its 
claws deeper into man- 
kind. After two decades of 
“war on cancer", fuelled by 
billions of research dollars, the 
death toll rises inexorably. 

The disease - named after the 
Latin word for crab because of the 
crab-like pattern made by blood ves- 
sels on a growing tumour - will kill 
an estimated 2.5m people in the 
industrialised world this year. That 
amounts to almost a quarter of all 
deaths. 

The gloomy mortality statistics 
contrast with excitement among can- 
cer researchers, who have made 
more progress towards understand- 
ing the fundamental processes 
responsible for the disease over the 
past 15 years than in all previous 
history. The important question for 
present and future cancer patients is 
how quickly the new knowledge can 
be converted into better diagnosis 
and treatment 

At present there is a gap between 
doctors' continuing inability to pro- 
vide much more than palliative care 
for milli ons of cancer patients and 
the cascade of optimistic stories in 
the popular media about “break- 
throughs" in research, such as dis- 
covering cancer genes and inventing 
experimental drugs. 

There is an inevitable delay - typi- 
cally a decade or so - while an 
advance in medical science is devel- 
oped for commercial application. So 
no one should expect the latest dis- 
coveries to have made any clinical 
impact yet. But many people will 
remember “breakthroughs" from the 
1970s and early 1980s, such as inter- 
feron and “magic bullet" antibodies, 
which would have transformed can- 
cer treatment by now - if they had 
lived up to first expectations. 

Very few patients are treated with 
novel approaches derived from bio- 
technology. The vast majority still 
undergo the well-established proce- 


dures of chemotherapy (poisoning 
cancer cells with a drug cocktail) 
and radiotherapy (destroying them 
with radiation). Surgery is also used 
to cut out solid tumours. 

“We hear the word 'breakthrough' 
thrown around too much." says 
Nicholas Wright, clinical director of 
the Imperial Cancer Research Fund 
in London, “and we certainly get the 
impression that the public are a bit 
jaundiced by scientists talking about 
breakthroughs." 

Why are more people contracting 
and dying from cancer? The first rea- 
son is* an epidemic of cancers caused 
by smoking, particularly lung can- 
cer. “At least 30 per cent of all can- 
cer deaths are tobacco-related.” says 
Archie Turnbull, executive secretary 
of tbe Geneva-based UICC, an 
umbrella body for the world's cancer 
charities. 

A second, more fundamental, rea- 
son is that cancer is mainly a dis- 
ease of old age. As medicine becomes 
more successful at preventing early 
deaths from other illnesses such as 
heart attacks and strokes, more peo- 
ple are living beyond the age of 70. 
above which the risk of cancer rises 
rapidly. 

Despite the overall rise in cancer 
mortality, there have been substan- 
tial improvements in some areas. 
The most encouraging feature of the 
statistics since the 1970s is the prog- 
ress in curing cancers in children 
and young adults - particularly leu- 
kaemia. Hodgkin's disease and tes- 
ticular cancer - through new drug 
combinations. The number of chil- 
dren under the age of 15 dying from 
cancer has fallen by half. 

There are two principal reasons 
why young people are responding 
more readily to treatment. One is 
that youthful cancer cells in the 
blood or lymph systems are physi- 
cally easier to reach and destroy 
with drugs and/or radiation than the 
solid tumours of the middle-aged and 


elderly. Another reason is that the 
difference between proliferating can- 
cer cells and normal cells is greater 
in childhood cancers than in slower- 
growing adult tumours. Therefore 
chemotherapy and radiotherapy, 
which work by d amag in g DNA dur- 
ing cell division, can destroy more 
cancer cells without causing unac- 
ceptable side-effects. 

Prospects for curing the big killers 
- tumours of the lungs, bowels, 
stomach, breast, prostate and pan- 


Mouth and pharynx 

52 

■■ Cervix . • 

as 

Oesophagus 

62- ■ 

Other uterus, / r .‘. 


Stomach 

244 

Ovary: : ... . ; . '■ 

60 

Large intestine 

273 

Prostate' ' . . t 

."Ad 

V. •" - • . A ' 

Liver 

55 

Bladder- ; ' 


Pancreas 

118. 

Other & to-defined • 

- - 4f>6. 

Larynx 

33 . 

Hodgkin's disease - 

:■ -vl vs 

Lung 

‘ 530 

Other f^TSJhwna SumyetopjB "S3: 

Melanoma 

23 

Leukaemia - 

' - -. '-TS.. 

Breast 

177 

ALL CANCER 

••'r%4SO. 


Souck WHO, ICRF 


World market for cancer drugs 

Revenue (Sbn) 



1988 00 

5owb»’ Frost S Sdwsi 

creas - depend above all on develop- 
ing treatments that discriminate 
more effectively between cancer and 
normal cells than the drugs used in 
chemotherapy today. 

The discovery of genetic changes 
leading to cancer should make this 
possible, says Gordon McVie. scien- 
tific director of the Cancer Research 
Campaign. “These provide for the 
first time an absolute chemical dif- 
ference between the cells. Until now 
we have had to rely on qualitative 
differences - the cancer cells mak- 
ing rather more of some proteins 
and less of others." 

Scientists have identified more 


than 100 genes that can trigger the 
cellular processes leading to cancer, 
if they mutate. (Causes of mutation 
include carcinogenic chemicals, radi- 
ation. family inheritance, and 
random changes during cell divi- 
sion.) 

One dangerous type of genetic 
change stimulates cell growth. 
Another shuts down the protective 
"tumour suppressor" genes which 
normally prevent excessive prolifera- 
tion. The former has been compared 
with a car that has its accelerator 
jammed on. the latter with a failure 
in the brakes. 

New approaches to the p re vention, - 


. . ' -• ‘ rvr- 

diagnosis and treatment of cancer 
are being built an such differences 
between the genes of diseased and 
normal cells - and the correspond- 
ing differences in the proteins they 
produce. One possibility is to block 
the damaging effects of abnormal 
“growth factors" which sustain the 
proliferation of tumour cells, with- 
out harming healthy cell gr o wth. 

But cancer genes are not the only 
reason why researchers are excited. 
Another is their new understanding 
of the way the body’s immune sys- 
tem recognises and attacks cancer 
cells. This has led to experimental 
"cancer vaccines" to boost the 
imm une response. 

These novel “biotech" approaches 
to cancer diagnosis and treatment 
will be examined over the next six 
months on the financial Times tech- 
nology page. So will advances In 
more conventional chemotherapy 
and radiotherapy. 

The aim is to convey the real opti- 
mism that now prevails in the labo- 
ratories - a hope and expectation 
that cancer will eventually be 
restricted to a disease of the very old 
- without raising excessive expecta- 
tions about the speed and ease with 
which this will happen. 

After 50 years in cancer research. 
Sir Richard Doll of the ICRF Cancer 
Studies Unit in Oxford sums up the 
mood: "We are winning the war 
agains t cancer, aihm* slowly." — * - 


T he pharmaceutical industry is 
devoting huge resources to 
cancer research and devtf op - 
in relation to sales of existing 

drags. • 7 - • 

Although reHaWe figures, are not 
available, industry sources estimate 
that companies worldwide spend 
$3bn (£2bn) a year on cancer $*D. 
DS companies are responsible-for - 
about half the total 
Tbe cancer tiferapeutics.maiket is 
worth about $6.5bn.- this. year, , 
according to Frost & &dfivan, ftfi 
international market research com- 
pany: 38 per cent in fl» C5, 28 per 
cent in Europe and 36 per cent hi 
the rest <rf the world. • 

The leading suppliers are Zeneca 
of the UK (whose tamoxifen was the 
best seUlng-cancerdrug with 6556m 
in 1993) and Bristol-Myers 
Squibb of tbe US. 

“Devoting almost 50 per cent of 
sales revenues to" BAD is a very 
high figure indeed,” says David Bar- 
rett, Bristol-Myers Squibb’* strate- 
gic projects director. The industry's 
overall R&D expenditure is 15 per 
cent of drag sales. 

The main reason wby : . cancer 
spending is so high is that the dis- 
ease Is top of the industry's priority 
list of “unmet needs'*. Although 
deaths from heart disease are twice 
those from cancer, they are falling - 
and cardiologists already have a 
much witter range of effective treat- 
ments than oncologists. - 
At the same time, : scientific 
advances are giving mauy new leads 
both to traditional drag. companies 
and to the emerging biotechnology 
sector. The world now has more 
than 1,000 experimental cancer 
drugs in the BAD pipeline. 

Analysts, such as Decision 
Resources and Frost & Sullivan pre- 
dict continued growth of more than 
10 per cent a year in the cancer 
market into the next century. It is 
expected to exceed $l0bn by 1988. 

The industry's cancer RAD spend- 
ing is matched by a further $3bn a 
year from the world’s governments 
and charities. By far the largest con- 
tributor is the DS National Cancer 
Institute, which receives $2bn a 
year in federal funding. 

Tbe charitable sector is particu- 
larly important in the UK, where 
the Imperial Cancer Research Fund 
and Cancer Research Campaign 
spend £ 100 m a year between them - 
10 times as much as the state- 
ftntded -Medical Research Council. 


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BRITISH COAL CORPORATION 

Invitation to offer to purchase 
CRE Group Limited 


British Coal Corporation ("BCC*) is 
seeking offers to purchase CRE Group 
Limited ("CRE Group"). 

CRE Group 

CRE Group is a wholly owned 
subsidiary of 8CC into which have been 
transferred the technical consultancy 
services and laboratory scale research 
and development activities of British 
CoaTs Coal Research Establishment 

CRE Group offers a range of 
technical consultancy services and 
laboratory scale research and 
development activities to British Coal, 
funding organisations, such as the 
Overseas Development Administration 
and the Know How Fund, and industrial 
companies, both in the United Kingdom 
and overseas. CRE Group operates 
through five business groups: 
Consultancy. Appliances and Fuels; 
Biomass and Waste; Environment and 
Industry; and Research and Analysis. 
The main services provided are as 
fofows: 

• Consultancy 

This business group undertakes 
a variety of consultancy activities 
ranging from detailed technical 
evaluation of coal and energy 
utilisation processes to strategic 
consulting in relation to energy 
sector and environmental 
strategy issues. 

• Appliances and Fuels 

This business group provides a 
wide range of testing and 
investigational services, 

traditionally to the solid fuel 
industry, but recently also to the 
oil and gas markets. 

• Biomass and Waste 

The aim of this recently formed 
business grotto I s to use the core 
skills of CRE Group’s employees 
to develop business which is not 
related to coal, but which requires 

similar scientific and technical 
expertise. 

• Environment and Industry 

This business group offers an 
integrated energy and 
environmental service covering 
emissions monitoring, 

environmental consultancy and 
technical support 

• Research and Analysis 

In the United Kingdom, CRE 
Group is a major centre for 
laboratory scale coal research 
and development This business 


group's work is related to ail 
markets tor coal: power 
generation, industry, commercial 
and domestic, and carbonisation. 

In addition, it is intended that two 
subsidiaries of BCC, IEA Coal 
Research Limited and Combustion 
Systems Limited (“CSL”), will be 
transferred to CRE Group. IEA Coal 
Research Limited is the operating 
agent for the IEA Coal Research 
Programme, which undertakes studies 
to evaluate scientific, technical, 
environmental, economic and other 
data relevant to coal. It is also intended 
that CRE Group will become the 
operating agent for foe IEA 
Greenhouse Gas Programme. CSUs 
principal activity is the exploitation of 
certain patents and intellectual 
property. 

CRE Group employs 84 staff and 
operates from freehold premises 
located at Stoke Orchard. Cheltenham. 

Prospective purchasers of CRE 
Group are now invited to pre-quality for 
the sale process. Interested parties 
who do not pre-qualify may be 

excluded from the sale process. 

Applications should be made in writing 
to Samuel Montagu & Co. Limited 
(“Samuel Montagu*) at the address 
stated below enclosing the following 
information: 

- a brief description of the 

applicants activities and those of 
the group to which the applicant 
belongs, if applicable; 

- a copy of the audited annual 

company accounts, and the 

consolidated accounts of the 
group to which the applicant 
belongs, if applicable, for the past 
three years; 

- a brief description of the industrial 
and economic rationale for the 

acquisition; and 

- an explanation of foe way in which 
the acquisition will be financed. 

Appfications may be made by tax but 
should be followed by a postal or hand 
delivered application and should be 
sent as soot as possible and, in any 
case, so that they are received no later 
than Friday 9 December 1994. 

BCC will consider appfications to 
pre-qualify on the basis of the 
information requested above and any 
other factors considered appropriate 
and reserves the right not to pre-qualify 
any potential purchaser. Applications to 
pre-qualify should be made only by 
parties which are incorporated as 
limited companies. 

Those who respond to the tovitation 
to pre-quality w M be provided with a 
confidentiality letter which should be 
validly counter-signed by the applicant 


and returned to Samuel Montagu at foe 
address stated below to arrive no later 
than Friday 16 December 1994. 
Applicants who pre-qualify will 
thereafter be provided with an 
information memorandum issued by 
Samuel Montagu which will include 
information on CRE Group and on foe 
process of sale and timetable, it is 
envisaged that pre-qualifiers will be 
required to submit non-binding 
preliminary offers by on or around 
Monday 16 January 1995. 

General 

Neither this invitation, nor the receipt 
of any offers by BCC win create, with 
respect to BCC, any obligations or 
commitment to sell to any bidder and, 
with respect to any bidder, any rights to 
demand any performance whatsoever 
by BCC. BCC reserves foe right, in its 
absolute discretion, to withdraw from 
negotiations with interested parties 
without assigning any reason or 
proviefing any compensation for fees or 
expenses incurred. Brokers or agents 
of any kind must disclose foe identity of 
the company they represent 

This advertisement and foe sale 
process are subject to English law. 

This advertisement, for which BCC 
is respon stole, has been approved by 
Samuel Montagu, a member of The 
Securities and Futures Authority, for the 
purposes of Section 57 of the Financial 
Services Act 1 986. Samuel Montagu fs 
acting for BCC in relation to the 
pubiiration of this advertisement and is 
not acting for any other persons and will 
not be responsible to such persons for 
providing protections afforded to 
customers of Samuel Montagu or 
advising them as to any matter referred 
to nerein. 

appfteatkms **** 

SSSd'Mu.? !•“"» on 

owialf of British Coal, and marked for 

of Peter Jones, Director, 

in^S -r? nance Division, at 

EC3R°fiAP ft- am9 S Stre€ *. London 
cyan 6AE (telephone: 071 260 931A 

K?2“£' 623 wKwIS 

be 752EJ2 of them should 
Drtor SX? d ' reotls ' (w ' lhou! #» 

KbsT “ nseM of s*™*’ 1 


British 

COAL 


* 



3 


a i 



-j 



’X 


\ 





FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 ★ 


13 


: y-< \ ~ "... ■ ■. -s-. V ‘SMS# 

*<• r.- : .. . “.v -V .1 kS» •• ■ 



There is only one problem with a car designed by computer. 
It looks just that; designed by computer: functional, pre- 
dictable, soulless. That’s why we entrusted the design of the 
GS300 to Giorgetto Giugiaro. The result is perfection down 
to the smallest detail. Like the LS400, the GS300 is a per- 
fect union of aesthetics with technology. For instance, every- 
thing, from the headlights to the door handles, has been de- 
signed to create the lowest possible wind resistance. Inside, a 
choice of leather or velour upholstery, air conditioning and 


7 speaker CD player, defies the notion that beauty is only skin 
deep. Under the bonnet, the GS300’s 212 hp (156 kW), 
3-litre, 24 valve engine is mounted on its own sub-frame, 
before it is assembled on the body to absorb the slightest 
vibration. Its 4-speed automatic transmission adapts to the 
driver’s mood and its independent double wishbone suspension 
guarantees high speed stability, confident braking and precise 
cornering. For peace of mind, the GS300 comes equipped 
with a host of safety measures. Advanced electronic ABS 


brakes and seat belt pre-tensioners are standard, as are dri- 
ver and front seat passenger airbags. However, to truly un- 
derstand what we mean by ‘the relentless pursuit of perfec- 
tion’, get behind the wheel of the Lexus GS300. A test drive 
is worth a thousand words. 

©LEXUS 

THE RELENTLESS PURSUIT OF PERFECTION 



^ IDNj PL ease cam. : Austria : 0222/610 04 203, Belgium : 02 730 76 86, Denmark : 042 91 40 00, Finland : 9800 3663, France : (1) 47 10 81 15, Germany : 0130 4144, Ireland : 01 456 79 05, 

For ^ oR£ . 06 96 23 00, Netherlands : 01621 85900, Norway : 32 20 5420, Spain : 91 563 33 96 - 93 280 30 3 1, Sweden : 08 706 7 1 00, Switzerland : 062 999 91 1 , UK. : 0800 343434. 




* FINANCIAL TIMES TUESDAY r 

MANAGEMENT: THE GROWING BUSINESS 


I?! zj ; 


Italian | D 
borsino 
planned 


P lans announced last week 
to launch a pan-European 
stock market for entrepre- 
neurial companies have struck a 
chord in Italy, where banks, 
business federations and the 
stock exchange authorities are 
encouraging the birth of a baby 
stock market, or "borsino”. ! 

The plan ought to stand a 
good chance of success. Italy’s 
innovative small and medium* 
sized companies, particularly 
those in the north of the coun- 
try, are recognised as the back- 
hone of the Italian economy, and 
many are enthusiastic exporters 
bent on expansion. But manage- 
ment consultants say their 
development is being hampered 
by their inability or unwilling- 
ness to take on more bank debt, 
making stock market flotation a 
tempting alternative. 

Coosob, Italy’s stock exchange 
watchdog, baa invited consortia 
to submit offers to set up a sec- 
ond market, which would trade 
ordinary shares as weQ as bonds 
and warrants. Promoters would 
have to guarantee the presence 
of at least 50 companies with an 
overall market capitalisation of 
more than LSOOtm (£l98m) and 
the involvement of an adequate 
number of intermediaries to 
guarantee liquidity. 

The n«hi problem, however, 
will be persuading growing Ital- 
ian businesses - many of them 
family-owned - that they need 
to list their shares, after dp«dpg 
of relative prosperity as 
unquoted companies. To encour- 
age entrepreneurs cm to the sec- 
ond market, the government is 
offering Fiscal incentives to 
small companies which decide to 
float their shares, and to inves- 
tors who want to buy them. A 
further snag is that even the 
main equity market, in Milan, is 
relatively underdeveloped. 

As for the Europea n second 
market, advocates of an Italian 
version are sceptical about the 
willingness of investors in Roch- 
dale wanting to buy shares in a 
Rimini-based company. 
Although the second Italian 
market will be national, the 
emphasis is at first likely to be 
on local savers investing in local 
companies. 

Andrew HIH 


D uring the first holiday 
David Coulter took after 
founding his laundry 
business, Stalbridge 
T.inun Services, he read a book on 
management by Peter Drackar. 

To Coulter, a boot-strapping 
entrepreneur who began his busi- 
ness washing pub tea towels in Lon- 
don launderettes, D nicker was 
merely restating 1 he obvious. "You 
talk to the easterners and find out 
what they want and provide it And 
if it goes wrong, you find out why 
and sort it out” says Coulter. 

Without knowing it Coulter says 
be bad been applying much of this 
theory as he grew bis business in 
Dorset to £6m of sales and a work- 
force of 200 people. 

It was therefore a rude shock 
Whan he applied for Investors in 
People, a government-sponsored 
programme set up in 1990 to boost 
training and management develop- 
ment in the UK. Instead of sailing 
through to HP recognition. Coulter 
found his management team fell 
well short of the mark. 

The production side of the laun- 
dry - sorting, washing, pressing 
and packing - passed with flying 
colours. But in frank conversations 
with the consultant who helped 
implement the HP programme. 
Coulter was told his management 
relied on firefighter decision-mak- 
ing, rather than foresight and plan- 
ning; and that there ires consider- 
able scope for improving com- 
munication among the team. 

“We had senior managers who 
were relying on experience and 
know-how from the past and were 
not looking to improve themselves 
or inspire the people underneath 
them," Coulter says. “The attitude 
had to change.” 

Driving down a narrow Dorset 
lane shortly after starting the IIP 
programme. Coulter recognised his 
problem. Like the traffic building 
up behind two dawdling cars, the 
pace of Stalbridge’s progress was 
being dictated by its slowest manag- 
ers. 

He fired the entire managemen t 
team and made them reapply for 
their jobs. Nine months later, in 
May this year, Stalbridge won HP 
recognition. Most of its managers 
got Jobs back in different areas. But 
responsibility Is now more effec- 
tively delegated, training systems 
are better documented and the man- 
agement team has been allowed to 
grow now that it has been freed of 
the influence of managers who did 
not encourage personal develop- 
ment, Coulter says. 

His early scepticism about the IIP 
programme Is not uncommon. He 
approached the exercise thinking it 
would be a good marketing tool but 
otherwise with low expectations. 

The surprise at discovering that 
HP has real benefits is also not 
unusual. According to Mark Spils- 
bury, senior research fellow at the 



From autocrat to democrat ‘1 am having to learn to delegate/ says David Coulter 

A clean 
job of it 

Richard Gourlay on a laundry 
owner’s experience of working 
with Investors in People 


Institute of Employment Studies at 
Sussex University, a growing num- 
ber of case studies suggest the HP 
programme is achieving its aims. 

"Unusually in our evaluations of 
government initiatives, the 
response has been quite astonish- 
ingly positive,” Sp Us bury says, 
based on the early stage of an eval- 
uation he is conducting. “Employ- 
ers certainly liked it HIP] and 
thought It had made an impact on 
how they had done their tr aining 
and development and thought it 
would filter through and benefit the 
bottom line.” 

He believes HP opens up channels 
of communication and will eventu- 
ally increase businesses' chances of 


surviving and growing. “It gets 
them [managers] focusing on their 
business needs,” he says. “It goes 
all the way through from the mis- 
sion statement, the business plan 
and training plan linked to that For 
some companies that is quite new 
stuff" 

The IIP programme is funded by 
the department for employment and 
administered through the Tr aining 
and Enterprise Councils which mar- 
ket it to local companies. Some 
companies quality for a subsidy 
from the Tec. Dorset Tec paid about 
half the cost of Stalbridge’s IIP con- 
sultant but the expense of imple- 
menting the programme still came 
to £30,000, Coulter says. 


Companies that seek the standard 
must agree to training an employ- 
ees towards specified corporate 
objectives; they must regularly 
review t raining and development 
needs and identity the necessary 
resources in their business plans. 
They must train employees when 
they are recruited and evaluate sub- 
sequent training and development 
and revise their targets. 

The government's intention is 
that half the comp anies with more 
than 200 employees should have 
achieved IIP recognition by 1996. 
More than 350 companies are 
already recognised as Investors in 
People and 2,800 are on the way to 
achieving recognition - this Is 
about 35 per cent of companies with 
more than 200 employees. 

But is there any proof that HP 
works? "I would say there is plenty 
of evidence, though not proof, of 
improvements," says Mary Chap- 
man, chief executive of Investors in 
People UK, a government-support^ 
body promoting the HP programme. 
“There is reduced absenteeism and 
staff turnover and tangible 
unproved productivity, reduced 
waste and increased profitability.” 

Bringing in outside consultants is 
not easy for any entrepreneur, par- 
ticularly one like Coulter who has 
taken an unconventional route. 

Coulter and his then wife had 
decided to move to Dorset before 
they had any idea that they would 
start a laundry business. 
“We thought of opening a shop but 
we didn’t have enough capital and 
had to fall back on our experience 
and what we knew best," says Coul- 
ter. 

Having started and subsequently 
bought a local laundry business. 
Coulter proved it was posable to 
build a thriving business in an 
industry where t here were rela- 
tively low bars to entry. 

Coulter knew he had to Change 

fr om an p ntrpprr grt p ynj ff l to a profes- 
sional managgmmt style. But 13m 
HP programme exposed him to 
some blunt criticism. “A carttanar 
once said I was an autocrat trying 
to be a democrat,” Coulter says. 
The HP consultant was broadly of 
the same opinion. 

“1 em having to learn to delegate 
and by delegation I mean you have 
to train people to develop them- 
selves " Coulter says. 

He is also worried about losing 
his contact with customers, the 
basis for the growth of his business. 
“The process is supposed to be get 
ting us closer to customers,” he 
says. "Some people are getting' 
closer but others, like me, are get- 
ting more removed .” 

He is having to learn to let bis 
management team take the reins. 
No doubt, now Hut he has recog- 
nised this need he will read a man- 
a gement tract that tells him entre- 
preneurs need to let go if their 
businesses are to grew. 


Midlands 





In January, Aston. Reinvestment 
Trust, fhe wa<OT»tif- r-mnTnmrify 
bank for east Birmingham, will 
Imld its first board meeting. 
Among the tas tttnttaM to which it 
is talking about funding are 
Cooperative Bank and National 
Westminster. 

In February, the University of 
Central England win outline a 
project to help potential 


vehjnteofpartnershtoprovedto 
be the loan fond.- . 

The fact that organisations such 
as Tecs and Business rink barf the 
facilities and wflftngness to school 
potential bor ro w er a tfareu^itbB . 


senior managers, already in 
employment, axe seeking to break 
out an their own; behind it will be 

Midland Rank and Bi, the venture 
capital group. 

This intensity of clearing bank . 
interest at an end of the market 
whkh historically banks have 
tended to find difficult, 
txmocrmsunzhig and risky is not 

r mrfhwv t to fha Mlrtlatyte. Banka 
give local shape to national plans. 


that the banks could deal with the 
food cheats at one remova 

Thn hanlnt m hlrt jjnjfe tBT 

loans but they .were spared the 
thneconsnmhig task of giving 
pastoral care to borrowers with a 
negJlgiMfi busmess track record.. 
They had a comfort factor, ' 
somebody tolooksftethelr • 
money for them.. . 

Certainly, the banks are . 
unlikety to make much profit out 

nFtim-t hnda. Tftw ftrarik 

and the Arrow fund offer loans at 
l per cent above bank base rate, 
the sort of interest charged to. 

blue-chip mnltinatinnalit- 


BUSINESS OPPORTUNITIES 

HEADERS ME RECOMMENDED TO SOX APPROPRIATE PROFESSIONAL ADVICE BEFORE ENTEBNO WTO OOWfllVENTS 


Strategic partnership 

Major multi-disciplinary Danish consulting firm with 
sizeable international activities is looking for a strategic 
partnership with British consultants through acquisition. 

Relevant key areas of activity are: 

+ Structures, highways and railways, water and 
waste, environment 

Relevant size would be between 50 and 200 staff with 
reasonable geographic coverage including possible 
international activities. 

Our objective is to establish a platform for joint 
development of technologies for future expansion on 
the domestic market as wefl as in other countries. 

Interested parties are requested to contact 
Mr Steen Frederlksen, Executive Director. 

RH&H CONSULT 


■ f.v. > i i p re ' t. v 1. 1 i r v, t. * i ■ c* i him -iv 


Bredevej 2 DK-2830 Virum Denmark 


AMlkS Co. LTD 
Russia 

PROVIDES ASSISTANCE WITH 

manufacturing of various metal goods, placing of orders for 
metal-processing works according to your drawings, dimensions 
and demands with leading Russian enterprises in Chelyabinsk, 
in case of your own or your partners' interest contact uk 
BY FAX; +7 3512 66 52 70/+7 3512 66 68 72 
BY POST: PA 256454899 CHELYABINSK, RUSSIA 


Selling vour Business? 


Wb have the skills and experience to achieve the best price for your 
business and Structure tie deal to achieve maximum tax efficiency. 
If you are considering a sale and your turnover exceeds flm, 
we would like to laik to you. 

Our charges are based largely on remits, so you have little to lose. 
Fot a confidential discussion without commitment please contact 
Lance Blacks tone or Gary Morley at: 


Blackstone 

Franks 


liliK'k.uimc I ruik- * "i jx*j ;itf I irt.mu' 
2 1 1 - 3 4 Old Siu'ti. I .iindmi I CI V dill. 

I cl: UT 1 2f‘i t :i\: (IT I 25U 


NEW PRODUCTS WANTED 

Thermal & Acoustic Insulation Products Manufacturer 
actively selling to mains tream DrY & Builders Merchant 
sectors is looking for additional products to complement 
its existing range- Ideal areas would be Insolation or 
heating # p famhing - Highly efficient distribution and 
efectronic trading network already in place. 

Please forward details to Bax B3569, Financial Times, 

One Southwark Bridge, London SE 1 9HL 


Acquisitions in Clothing Sector 

Clothing companies sought by axparienoad team. Product areas: sepa rates , 
biimnwaff, bloom, ootonroar, dreams. Target companies should have 
good demgn/infling Operations, and must be making gtJgui a small profit 
Funding available to acquire ambitious companies who lack sufficient 
fimda Ear erpu n skin . corporate galea, noa-cona sabeidieriea and companies 
belonging to retiring entrepreneurs . Management participation 
encouraged, according to ta narniefauican . T urn u » w £Z6n>n£15.0m. 

Interested parties should write to; 
o/oMa C Condor oCCoofMm&Lyfmnd, 

Phnntzee Court, Loudon EC4A4HT Fax: 0X71-013-1330 (FC34S) 



UK Company seeks £750,000 equity investment for 
expansion. The company operates in the bnsinesa to 
business sector and is Government approved. 

Relocation assistance available if required. 

For further information contact Managing Director by 
Fax am- 044 202 715994 


TrTTTmTTTTTTTTTTTTr 


Experienced London-based Businessman seeks to advise, 
manage and/or invest In established company or new venture. 
Proven Sdto In the foKMng areas ot buafcieas expertise are offered: 
Team Management and Financial Control 

► Sale*. HaifieUng and CHant Support 

► Contract NegottaUon and Complaint Handing 

► Opport uni ty end Market Id enti fica tion 

Pisan repfy In confidence (a 

PO Box 717, 228 Gr e e n Lanes, London N13 5UD 


Top Quality Emulsion Paint 
for Interior and Exterior Use 

Available jo various pastel shades. 

£55 per 205 litre drum - £3,960 per container. 
N.B. This paint is NOT rubbish. 

Contact: ORION PAINTS LIMITED 
Tel: 0151 548 6756 Fax; 0151 549 1572 
Other paint available Overseas Agents required 


Merger/Sale in Germ. 


Distribution company for valves (sanitary diaphragm 
valves), pipe fittings and affiliated products. 

Please write to Box B3573, Financial Times, 

One Southwark Bridge, London SEI 9HL 


[Fog? ©aQ©j/ffiD©[?s]iu(? 

Long established Design Consultancy, 

Central London, Freehold Studio, Excellent Blue Chip 
Clients with good prospects for future growth. 
Write to: Box B3568, Financial Timas, 

One Southwarit Bridge, London SE1 9HL 


ESTABLISHED YACHT BROKER (20 
years) geda aeUttorai bort stock Hnones 
fully McunMt. Call Cart 07*4 477577 
(7 fiayd 


100 quality CONTROLLED Informal 
Investment aid JV oppcrtunttJo* Mcb 
monOl in T?W Capttaf Bocfiange QarodB. 
Par semffewpy ert 0433-343484. 


Do .you have a non-core 
activity which is absorbing 
valuable management time? 
Why not let ns manage it for 
you on an interim basis and by 
to ted a suitable home for it? 

Plant write to BarB3570, 
Finandti Times, OneSoutkwerk 
Bridge, Ixmdon SEI 9BL 


EQUITY FINANCE 

Fob trims KBSDamAL 

NEW BUILD DEVELOPMENTS 
W HAMTSantE/SuSSEX 

Experienced developer with track 

record seeks substantial joint venture 

partuer(s) for highly profitable 



■ WVag; 

' Tet044m2teO3MPi^W4W2a37»i; ' ; 


WELL KNOWN CONTEMPORARY ART GALLERY WITH 
PRIME LEASEHOLD SITES IN LONDON AND PROVINCIAL 
TOWNS. SALES IN EXCESS OF £2M PA. A MERGER IS 
SOUGHT WITH A SIMILAR OR RELATED BUSINESS. 

Our dkad b a rod efficient, profitable. Ugh quality fine ait bn rina a aperiafttmg in the 
work of a tinge of well known contwnpomy artists- The company now needs do expand 
its sales bans and would be interested m merging with a comp I flmMm i y operation. 

A0 replies wlH be Inatcd la the strictest inn ^ i i wief Principals only. 

Phase write tec Bmc B3SfiLPfattBcU Times, One SwAwarit Bridge, London SEI SOL I 


COMMERCIAL FINANCE 

Venture Capital available from £25,000 upwards. 
Sensible Rates, Sensible Fees. Broker enquiries welcome. 

Anglo American Ventures Ltd. 

Tek (0924)201365, Fax (0924)201 377 


Office Services 
Group 

a leader in its field, experiencing 
shaip increase in if* business and 
with an opportunity to expand seeks: 
e £250K-£350K 

• Secured against excefleot 
freehold property 

• £rif available vb sale of 
property after 3 years 

• Annual return supplemented 

by a majority share in recovery 
in value of the property 
If you arc interested, please contact 
Cfin Parritt at Baker Tffly on 
071413 51M 


Software Company 
Seeks Aluance 

Small software company seeks 
a merger or aUunue with 
“big brother”. The company has 


software. It now seeks an aunnec 
with a larger organisation, which can 
provide sales and marketing support 
and perhaps, a complhnealaty 
range of prorhxots. 



Plea* reply in confidence 
stating levd of foods available to: 
Box B3572, Financial lores, One 
Southwark Bridge. London SEI 9HL 


Electric Golf Trolley 

Manufacturer of an Established 
Golf Trolley is looking to divesL 




trade mark. Ideal add on product 
far business already distributing 
to the golf trade. 

Wrile to Box B3565, Fraaarial Tinea, 
Ou SoK&wart BtUp. Lwfan SEI ML 


Executive, 

25 years in Packaging 

strong sales/production background 
seeks partner with good financial 
skills and able to invest £175,000 
in opportunity NW England. 
Buriy decision essential 

Tel: 061 703 7197 


ROBERTS ROYAL WINDSOR 
Esl 1809 

Trade Mark Number 1013941 
In Clan 3 

In 1809 John Robots began sdUng Iris 
tend made taOet imp in the borough of 
Royal Windsor. By the mid Victorian 
m Robots was panciriscd by Brorpean 
Royalty os wefl as Queoi Victoria. 

Tie Robots Royal Windsor trade mark, 
together with tan- other aaodacod trade 
marks including an Ulostralion of 
Wbnhur Cmdcv is fix sale. 

Interested parties (p rin c ipal s only) 
abonkl apply toe 
The Company Secretary 
Burlington Holdings I rH 

Bnaincas Park. Gui&cid 
Road, Hampton, Middlesex TW12 2HD 


INDUSTRIAL LAND 
FOR SALE. 11.5 ACRES 

STRIATED BETWEEN 
WHITCHURCH, SHROPSHIRE 
AND WREXHAM, CLWYD. 
SUITABLE FOR 
DEVELOPMENT OF 
WAREHOUSING, COLD 
STORAGE, INDUSTRIAL AND 
OFFICE ACCOMMODATION. I 

PLEASE PHONE 082970172 
OR FAX 0820 70646 
FOR DETAILS. 


Genuine 

Conglomerate 

Partner 


patent rights (pat- applied far) 
rosm^eoguKdrisgiDventioi] 
in the pipeline and 
dvfl ®sM»s«sg field. 

Low value logh volume prodoct. 

Pfease write to Bat B3756, 
Raandil Times, Ono Sonrinratk Bridge, 
London SEJ 9HL 


ATT: QUALIFIED 


BEET SUGAR -A“EEC2 
JBtOPMTCff CANE SUGAR "A" 
S240PMT *E* S225PMT C&F 
ASWP. UREA S140PMT C&F. 
GCMJSA: 

FAX: 1 >71 3-783-0W2 


Docs jour bcriaaia need cqntty capital? 
rfrcfiVtt* BahEsibugbim nfcttpjhl 
^—ra/BDdoap«rUic to brat TdWPl 579599 


FOR SALE 

Offer for sale of revolutionary 
low cost motor vehtote 
security device, 
recently patented, 
fits at! types of vehicle. 

Please contact: Oenteon TIB 
Solicitors (Ref: AMMO f 
Qootaom House, infirmary Sheet, 
Leeds. LSI 2JS 
Tak 01X3 246 7161 
Fuk 0113246 7518 


A BARE FRANCHISE OPPORTUNITY - 
oujck pnumna - Pmaa ms. wvi 25 
coroparw-omiod qreek prim shops, b novr 
offarlng to share thalr success by 
ftancNstag to a law adeaea wed qudtad 
sppfcanm. Ybu must haw a bur*ig dsefc* 
tt> succeed in your own bueinons, sates 
ropedmcB end at tanst E35.000 avj*±to 
fcaida. For further inftann aB co write h* a 
M ar. Praam Prim Ltd.. 43 Motet Pirns. 
Hanlay on Thames. Omn RGB 2AA or 
phono 0481 674063 


CHANNEL 

ISLANDS 

Offshore Company Formation 
and Administration. 

Also Liberia. 

Panama & BVT etc 
Total offshore facilities 
and services. 

For dcnOs and appedanam write 
Qoy Trim LnL, Bebnau Boose. 

2+ Brians Bd. St Hd**; Jerary. CJ. 
Tofc 0334-78774, Ru 0534 35401 
H* 4192227 COFORM C 


| Top Class Racehorse 
1 FOR SALE 

WHl have a favomite’s chance of 
winning (he King George VI Chase 
at Kenqxon on Boxing Day. 
For details 

. Tel: 098122363 




OFFICE FURNITURE 


Wo have - direct from the manufacturer - 
new high quality executive and system ranges 
- conference and receptions. Large choice of veneers, 
malamlne and/or laminate finishes 


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


* — u London Showroom for viewing: 

Ariel House, 76 Charlotte street, London W1 Tel: 0374 741 439 
Full cam cad and planning services. 


UNEABURO LTD Tel: 0992 503313 



The Ftnanda, Times, i 

London SEI 9HL 

















£3 »■*>.’ 




for choS 

‘■ r, ance 


FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 





GARDEN MACHINERY/AUTOMOTIVE 


^litbear 


.i..--. _*\i *.& 'JSSaU . ' 


Hie Joint AAnMskaittfo Receive Nigel J Voogtt and TJmoJhy R Harris, oflw for sate he business and assets 
of he above Company based id Bephunl & Casks. London SE1. 

The folbwlng businesses are aval (able; 

Garden MocMoory Distributor 

• Importer ot high quotty movms wifli turnover of £1.100,000 per annum 
Automothre Products Dtetrt&ufof 

• Including eta audio equipment security systems and aerials with turnover of £370.000 per annum 
Lumetftfoo 

• producer of QpMnlc KBs tor car Ignition systems, urttt workhride turnover of £600,000 per annum 
Subskttnfss 

• Fianee (Garden Machinery - turnover £$900,000) Netherlands (Small Engine - turnover £600,000 per 
annum} 

• prominent property to London SE1 - 25,000 sq ft commeidalflndusWal bufidtogs. 

For tortw Information, please cotfoctSccB McDonald of MarthWrfgM at Coopeis & LybnnJ, HillgatB House, , 
26 OU Bailey. London EC4M 7 PL Telephone; (071) 212 6055. Fax; (071) 212 6000. A 

Coopca A Lybnad ii aatbarin) by etc Inuinnc of Chnwal AecooManca in Bsglniid nod HUcn to carry on Imrcsnwai /g 


BUSINESSES FOB SALE 

HOTEL FOR SALE 
LONDON, SW6 

37 en suite letting bedrooms 
Modem high standard of furnishings and design 
Restaurant (60) with Cocktail Bar 
Residents' Lounge 
Additional income from lease 
Potential to convert into additional letting space 
Convenient to Fulham, Chelsea and Kensington 

Freehold -£1,500,000 

Ref 20/228/FT 
Please contact 

Paul Newman or foci Goldman on 

0171486 4231 


CHRISTIE &. CS] 


SURVEYORS, VALUERS & AGENTS 


FOR SALE 



Switel International Hotel 

ANTWERP BELGIUM 

- Largest Business Hotel In Antwerp with 310 Rooms 

• Central Business Location in Betghim'a 2nd largest city 

• Possible future redevelopment or residential conversion potential 

For bother (Mats o' hspoesons. plcoso contact »» IfcNub^: 


Reran Hay -Brussels 

Telephone: 32-2-511-2506 
Facsimile: 32-2-511-5610 


Thao dark -london 

Tafephone: 44-171-629 6290 
Facsimile: 44-171-493 3734 


RichcrdEffis 

Inte rna tional Hotels Division 


FABRICATION AND 
ENGINEERING BUSINESS 


Hm Joint AdmMstraflve RscsJvhs offer tor sate the above company. 
Prindpa! features of tbs business Include: 

• based in South Woles 

• stool fabricators and genera! engineers 

• muffl-SMIed workforce 

• freehold property- 30,000 sq ft 

• turnover opproxtoKftfy £3 mfflton. 

For further Information, please contact Richard A Smart or Stephen 
J Hall d Coopers & Lybrand, Church HI House, Churcftffl Way, 

Conor CFl 4xa Telephone: (0222) 237000. Fax: (0222) 

Caapas & Lytnud is antlmised by the bottuic of Chancsol Acconotanu in j 
Eaglnd and Wiles m carry on Invrabnan Basimv Ik 


BUSINESS FOR SALE 

Franchise Motor Dealership For Sale 

The Directors offer for sale the business, assets and goodwill of 
Sparks Co Limited l/a Tandrfdge Motor Centre, an estabfished 
Ford Retail Dealership located at 159 Station Road East, Oxted, 
Surrey. It is envisaged that this wUt be an asset only sale. 
Principal features include: 

♦ Leasehold premises of approximately 10,800 square feet 

♦ Annual turnover approximately £3.4 mifflon. 

♦ Retal and servicing of new and used vehicles. 

♦ Retail of petroL 

♦ Dedicated and experienced workforce. 

For further Information Interested parties should contact 
J R W Kronfeid Esq on 0683-713223. 


BM a amsnu hotel lbsum * ucenmo HKyerrr iPtcuusn 

ROBERT BARRY & Co. 

I NORTH WALES COAST 

Successful 3 star hotel offering around 20% return 

• Especially successful bu s iness showing £263,461 profits 
on all year round net T/O £858,681 (Y/E 31 .3.94) 

® Central location In famous resort, fu&y licensed & well 
cared for under long standing family ownership. 

* 65 letting bedrooms (all en suite), bars, restaurant (200), 
conference room and mutt-purpose function suite (200). 
• Car parking. Purpose built leisure facilities including pool. 
Owner’s/Manager's flat. 

OFFERS AROUND £1.25 MILLION LEASEHOLD 
(nearly 2.000 years) COMPLETE. 

REF: CP. 9460. CONTACT: MERVYN CULLY 
TEL: CIRENCESTER OFFICE (0285) 641642 


GOLF CENTRE , N. KENT 

LEASE FOR SALE 

The J.LS. Golf Centre. Nr Gravesend, Kent, La for sale. The Centre has 
the following facilities, all built to a very high standard. 

30 bay Floodlit Driving Range. Superb 9 hole Par 3 Course. Large 
Floodlit Practice area. Fully fitted, largo Pro Shop. Private car parking. 

The remaining 36 yoar loan: is for sale and offers are invited in the 
region of £376,000, plus stock at cost valuation. 

Proof of financial status will ba required before entering into 
negotiations. 

For Further information please write to: 

“Robin F. Clark & Co, 4 Th® Parade, 

Wrotham Rond, Meopham. Kent DA13 OJL" 


PINK PACES 


P ROPERTY 

PAGES 


Fun, indexed wedJy to re's In bquMadon a lecetaersMp. co*s 
In traUiia. Insdwncy ouettans, businesses tor sols New Sections: 
Pnrinsofccncy & LPA ftxebertfvps. 

the UK guide to commercial property in receNerthtp and for sale - 
lOO's of property Dragons - Hotels, Nuralng Homes, Land, Offices. 
Retail & tnausMal promises. Denelocmem op uu r tir Sdi u i etc. 

taotanflM 

Tel: (0273) 626681 for. 688881 


CALL FOR EXPRESSION OF INTEREST 
FOR THE PURCHASE OF THE GROUPS OF 
ASSETS OF HYMOFIX HELLAS SA. 
of Athens, Greece 

‘ET1INTK1 KEPHALEQU SA, AdmiaisHaUon of Assets and T jahititieV. of I 
Skoukm'ou Sir., Athens, Greece, in its capacity oa Liquidator of “HYMOFIX 
HELLAS SA.", a Company with its registered office in A the ns, Q recce (the 
“Company") presently under special liquidation according to the provisions of 
Article 46a of Law I892/199Q by virtue of Decision 5104/94 of the Athens 
Court of Appeal, invites interested panics to submit within twenty (2D) days 
bom the publication of this Notice, non-bindinf; written Expressions of Interest 
for I he purchase of one or ail of the groups of assets described below. 

BRIEF INFORMATION 

The Company was established In 1958. On 7/11/94 it was placed under special 
liquidation according to the provisions of article 46a of Law 1892/1990. Its 
objects included the production of fruit juice, tomato paste, tomato juice, 
compotes, vegetables and whole tomatoes (tinned) and fruit puree. 

GROUPS or ASSETS OFFERED FOR SALE 

1. A factory, standing on a plot of 30,750 sq. m. located in Pella. Giunilsa, 
together with (be machinery and mechanical equipment, contained in iL This 
is believed Do be reeled by a third pony. The Company's trade name is also 
included in Ihis group of assets. 

2. A factory, standing an a plot of &530 sq. m. located in Tyrnavos. together 
with the machinery and mechanical equipment contained in it. 

3. A plot of land equal lo 2,695 sq. m. loaded in Thessaloniki, together with the 
buildings sanding on it (formerly a factory). 

4. Other Assets: 

a. Agricultural plots of land covering an area of 394 sq.m. in Xerokabos. 

b. Agricufama] plots of bud covering an area of 199,9 sq.no. in LenaaN.EHai 

c. Agricultural plots of kmd cove rin g an area of 241,1 m.iflSavalia.N. EHaa. 
The above agricultural plots of lend ore being rented by third parties. 

SALE PROCEDURE 

The sale of the assets of the Company shall take place by way of Public Auction 
in accordance with the provisions of Article 46a of Law 1892/1994, as 
supplemented by art. 14 of Law 2000/1991 and subsequently amended and the 
trams set out In the Call for Tbndeis for the purchase of the above assets, to be 
published in (he Greek and foreign press on the dales provided by the law. 

SUBMISSIONS OF EXPRESSIONS OF INTEREST -OFFERING 
MEMORANDUM - INFORMATION 
For the submission of Expressions of interest, as well as m order to obtain a copy 
of the Offering Memorandum for each of the above groups of assets, plow 
contact the Liquidator ‘ETHNIKJ KEPHALEOU SA. Administration of Assets ' 
and liabilities", 1 Sknuleniou Str., IQS 61 Athens Greece. Tel: +30-1-323.14.84- 
7, Due +30- 1-321. 79JQ5 (attention Mrs Martica Frangalds) or the L iqu i dato r 's 
agent, Mr Konstantmcs Kyriakis, 120 Solanos Str. Athena, Tel: +3M-381-6829. 


METAL FINISHING 
SUB-CONTRACTOR 
WEST MIDLANDS BASED 
Profitable, £ljm t/o with 
spare capacity and 
growth potential 

Directors willing lo 
stay on Cull/part time 
if required. 

Write HK Box B3571, financial Tones. 
One Sotahwaik Bridge, London 5BI 9HL 

Cash & 

Carry/Wholesale 

Long established profitable busines 
specialising in to Qeiries, drugstore 
items and some supermarket and 
household lines. Excellent blue drip 
client base and multinational 
supplier contacts. T/O £6m +. 
Serious enquiries lo London 
Fax: 081 961 6853 

BUSINESS MAGAZINE 

National monthly tide. 
Established subscription 
base plus news-stand sales. 
Sound advertising revenue. 
Genuine sale. 

Serious enquiries only. 

Write to: Bo* B3S67, financial Times, 
One Somtnreifc Bridge, London SGI 9HL 

NEWSLETTER TITLES 
FOR SALE 
Established publication 
covering IT & Marketing for 
the financial services 
sector are available. 

Plume write tec 
Bn B3S60. financial Thnca, . 
OaeSautbwadc Bridge, Loudon 5B1 9HL 


BUSINESS 

OPPORTUNITY LOG 

UlCs mos complete and up to dan: 
details an: 

* Receivership*/! Jqu Idatiora 

* Companies in Trouble 
'AwtiMf 

* Basbioscs For Sale 

Produced by experienced 
professionals with serious 
business people in mind 
Hundreds of Cos. and contacts 
in each issue. 

Tel: 071-353 5003 
Fax; 071053 5004 


FOR SALE 

Established 
Construction Company 
with good professional 
management Operates In 
southern England from wefl 
located offices near London. 
Turnover approx. £22m pa 
with good current 

OTder book. 

Please write to: 

Bax BUSS, financial Times, 

Ok SouAwadr Bridge, Loudon SE I 9HL 


FOR SALE 

Ski & Leisure shop in centre of 
major borne counties I own. 
Beautifully filled with fully 
equipped ski workshop. Gross 
sales £5 00k pa. Profitable, 
genuine reason for sale. 
Principals only. 

Write uc BJ5&L financial Times, 
tte Soottrwari: Bridge. London SE1 9HL 

ELECTRICAL 
ENGINEERING CO. 

Control Panel Builders 
Hardware/Software Design 
Installation and Commissioning. 

Working for Blue Chip 
Companies in the UK & Europe. 

T/o £1-2 million. 

Write to: Bos B3564, financial Times, 
One Southwark Bridge. London SE1 9HL 

FITNESS BUSINESS 
FOR SALE 

Fully proven blowmould 
tooling for aerobic 
‘step’ product 

Write uc Bax BDSU, Financial Times, 
One Southwark Bridge, London SE1 9HL 

100+ LIVE 

Businesses for 
sale and 

sales of assets fortnightly 

0712621164 
Fax: 071 7063464 


IERCIAL FINANCE , 


•L r -*.• -I- - *•' » * r ‘ ^ • 

... ■ «. ’ i r- ■*“ , 

1 fi-L . > ‘ 


ALE 








i ► ...a- 

Vfl 



dti 





Department of Trade and Indnscry 


THE LABORATORY 
OF THE 

GOVERNMENT CHEMIST: 
PRIVATE OWNERSHIP 

The Department of Trade and Industry intends to transfer the Laboratory of 
the Government Chemist (LGC) to private ownership by April 1996 cither by a 
non-profit distributing company or through a commercial sale of the business. 
The DTI s aim is to ensure that LGC transfers as a financially and scientifically 
viable organisation, retaining its statutory role and its reputation for independence 
and impartiality, and continues to support the National Measurement System and 
other major public sector programmes. 

The Laboratory 

LGC has been an Executive Agency within the Department of Trade and 
Industry (DTI) since October 1989. It employs abouc 30ft people and has a 
turnover of abouc £16 million. 

The Laboratory is the focus for analytical chemistry and related sciences 
in Government and the centre for the development of the chemical 
National Measurement System. It provides high quality services and advice to 
underpin the work of Government, commerce and industry related to forensic 
science, trade and revenue, the environment, food and agriculture, health 
and safety, and innovation and quality. 

Basis of a Sale 

An essential feature of rhe Laboratory’s work is its independence from 
influence by any other party. This includes in particular the statutory 
responsibilities of the Government Chemist and the Laboratory’s role to carry 

° Ut Thf renwhihJg ' work'of the Laboratory, including us commercial work 
for priv«c sector customers, makes use of the skills and facilities associated 
. responsibilities, while strictly observing the independence required 
^‘"cX-s. This position will need to be maintained the torn as 

neW While^ ° f Li,b ° rJ,0ry . “ .* ™ mpa 7 

W K nice ‘t would like ro hear from relevant organisations in the 

limited by S 11 *™ ’ er icnce of meeting a strong requirement of independence, 

r^"^r>n a commercial sale of the business. 

Expressions of Interest 

U likr a L-OPY of LGC’s Annual Report for 1993/4 and a note 
[f you would nlease write to Uob Collier, DTI Laborarories Unit, 

with farther inforn, ^r: h ^ m p a l aC e Road, London SW1W 9SS. (Telephone: 
Room 314, 151 uc in 

071-215 1989- rax: u -- purchasing the Laboratory as a business should 
Organisations inheres ^ than ?rh December 1991, setting out 

write to Bob C"l!icr a. ^D hc ^ ^ 

their initial quanncacio ^ nQt ZQ pursuc f urt hcr the commercial 

The Department ^ satisfied that .1 purchaser can remain free from any 

sale of the business it !t “ LC Cs independence and impartiality. If the 

conflict of interest and P * d h wi|J decide which intending bidders to 
Department can be so chein further details in an Information 

^ ra “d n umt"ebL:;.b r p reI »rin S bids. 


STATE PROPER IT AGETCT 


TENDER INVITATION 


The State Property Agency (SPA) invites an open, 
one- round tender for the sale of the state-owned 
shares of Balaton F0sz6rt Kereskedelmi 
R6szv6nytAraas6g (Balaton F0sz6rt Trade 
Pic.) (H-7400 Kaposvdr, FOredl u. 1.) 

Balaton Fusz6rt Kereskedelmi R6szv6nyt6rsas&g 
is a public limited company, its shares are listed 
on the Budapest Stock Exchange. Its main proffles 
are wholesale and retail trade of foodstuffs, 
household chemical goods and basic groceries. 
Balaton Fusz6rt has modem warehouse bases in 
two county scats, in Kaposvdr and ZaJaegerszeg 
and several discount and cash and carry stores 
and supermarkets. 

The registered capital of the pic. is HUF 
1,330,000,000, that is one billion three hundred 
and thirty million Hungarian forints, 54,68 percent 
of which is in state ownership. 

The SPA's primary aim is to find a strategic 
investor, skilled in trade, who, by capital increase 
and by the purchase of a block of the state owned 
shares will acquire at least 51 percent of the firm’s 
shares. The capital increase can only be 
submitted to and approved by the shareholders’ 
meeting following the announcement of the result 
of the tender. 

Each bidder will have to submit two bids: 

a) one for the capital increase (to the extent 
indicated by the Investor) and for the purchase 
of a share package from the SPA in a way that 
the shares acquired altogether ensure an 
ownership ratio of 51 percent for the Investor. 

b) and another for the purchase of 51 percent of 
the present share capital (HUF 678,300,000) 

The Tenderer prefers to offer the share capital 
increase as oppose to purchasing the shares. 

The price expected by the SPA is 1 15 percent of 
the nominal value of the shares (bids quoting 
lower price, however, are not void). The minimum 
extent of the capital increase is HUF 200,000,000 
and can only be performed in cash. In the bid the 
subscription rate of the shares issued in the 
course of the capital Increase should 
correspond to the buying rate of shares bought 
from the SPA. 


90 percent of the bid price must be paid in cash, 
10 percent in compensation coupons. Foreign 
investors must pay the total purchase price in 
foreign currency. 

Bidders must deposit HUF 30,000,000 as 
retention money. A certificate of deposit of the 
retention money should be attached to the bid. 

We hereby announce that the shares of Balaton 
Fuszdrt were admitted to the Budapest Stock 
Exchange in May 1994. The present ownership 
structure of Balaton Fusz6rt is as follows: 

SPA 54,68 percent 

Municipalities 13,51 percent 

Employees 17,83 percent 

Institutional and private investors 13,98 percent 

For further Information please contact 

AttflaT6th, deputy director (in Hungarian) 
telephone: (36-1)-267-0054 
Michael Stanton, advisor (in English) 
telephone: (36-1)-267-0084 
Gregory Martin, advisor (in English) 
telephone: (36-1 >-269-8600 

Bids should be submitted to the given address in 
a sealed, unmarked envelope, in three copies, in 
Hungarian. Foreign investors may submit their 
offers also in English or German, but the 
Hungarian copy win rule. 

pPdlygzat Balaton FQsatert” must be written on 
the envelope. 

The tender documents containing the detailed 
conditions of participation and the introduction of 
the firm are available at the Customer Service of 
the State Properly Agency. The price of the tender 
documents Is HUF 30.000 + VAT. 

Deadline for submitting bids: 

March 1, 1995. 

between 10.00 and 12.00 ajn. 

Place to submit bids: 

Auami Vagyon0gyndks6g (SPA) 

Room 804 
H-1 133, Budapest 
Pozsonyi 0t56. 


HUNGARY: PRIVATISATION GOES ON 


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Please refer to: I 

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Tel: 34-1-373.37.44 
Fax: 34-1-373.28.15 | 

MADRID - Head Quarters 


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Call USA 1-206-284-8600 
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Appear in the Financial Times 
on Tuesdays, FrfdavB and 
Saturdays. 

For fraiher information 
or to advertise fn this section 
pteass contact 

Kail Loynton on +44 71 873 4780 
or Lesley Sumter on 
+44 71873 3308 


. ,0? * Jitf -7,4 

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Investment Guide » Central 
£ Eastern Europe 

Published by Kensington Publications Limited 

in association with 


Chartered Institute of Bankers 




fefrjgss corrimunity has recently seen the emergence of a rtgity 
po 

of the possibility of free trade with many countries from Central 






ipment of banking and the training of bankers within. Central 
' and Eastern Europe. 

Due to theW^oUs interest from die international business and financial 
communities, the CIB and Kensington Publications are about to publish the first 
official guide to the business and financial environment in all the constituent 

countries of the region 

Editorial has been commissioned from government ministers, central bank governors 
and other influential figures to provide a unique insight into the benefits and 
problems that exist for potential investors in this exciting region. 


Please send me □ copies of The 
Investment Guide to Central & Eastern 
Europe at £95 per copy. Please find enclosed 



Europe at £95 per copy. Please, fold endos 
myoieque/steriing bankets draft Postage 
free UK; overseas airmail £15 extra 


Name: 

Address: 


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111 SauifnaarkSlreet 
LondonSEl OJF 
Tel *44 71-7170077 
7lxr 936012 KenpubG 
Fax +44 71- 717 1000 










city analysts and the environment 

a survey of environmental attitudes in the city of iondon 


the first detailed market research into how analysts view environmental issues 
and the impact of this on their assessment of companies 


Business in the Environment, S Stratton Street, London W1X 5FD 
Tel: 0171 (29 1600 Fa* 0171 629 1034 
Price £105.00 (inc p&p) 

(Muse onto* dept witt Aider} 




A member of the Financial Times Group 


A PEARSON COMPANY 


BUSINESS in the ENVIRONMENT 
A Bosses in the Community initiative 


FINANCIAL TIMES TUESDAY NOVEMBER 2S 

PEOPLE 


Davidson Kelly quits Lasmo 


Lasmo, the oil explorer which 
earlier this year repelled a hos- 
tile bid from rival Enterprise 
Oil. yesterday announced the 
surprise departure of its charis- 
matic corporate development 
director. Norman Davidson 
Kelly. 

Davidson Kelly, described by 
colleagues as possessing a “cer- 
tain bounce and flair”, is 
expected to receive a pay-off of 
less than £500,000. 

Davidson Kelly was widely 
acknowledged to have been the 
architect of most of Lasmo’s 
largest deals in the past few 
years. He arrived through Las- 
mo’s 1979 takeover of Oil 
Exploration Holdings and 
joined the board in 1986- 

Joe Darby, Lasmo’s chief 


executive, says Davidson Kel- 
ly’s departure came as a result 
of an organisational review fo8« 
lowing the Enterprise bid. 
“The bid helped ns to focus cm 
what we needed to-do in the 
future,” says Darby. This 
included “clarifying reporting 
lines and responsibilities’*. 

Davidson Kelly’s responsSrit 
Ides included finance, investor 
relations, and developing new 
business opportunities. Thee 
functions would now be 
divided between Paul Murray, 
appointed general manag- 
er, corporate finance, who wfli 
report to the recently 
appointed finance director, 
Dick SmermrfE, a new busi- 
ness team comprising Peter 
Nolan, general manager, and 


Tom King, director. 

Davidson Kelly fcept a tow 
profile during the bid, with 
many ' observers feeling he 
could have been a potential 
weakness in the target compa- 
ny's defence. He ha d been 
dosdy associated with, arrang- 
ing several of Lasmo’s contro- 
versial acquisitions, including 
Ultramar. ■ 

However,. a (dose associate 
says that, while Lasmo was 
acknowledged to have paid far 
too much for Ultramar, .its best 
assets are those which were 

acquired In the deal .. 

Davidson Kelly, whose 
flnnnai salary was in the 
regum of 080,000, was an a 
three-year rolling contract 



Winning post in Darby’s sights 


Gavin Darby is expanding his 
territory within the Coca-Cola 
empire. President of Coke’s 
northwest European division, 
he is picking up Great Britain 
and Ireland (north and sooth) 
at the turn of the year. They 
join France, Belgium, Luxem- 
bourg. the Netherlands and 
Denmark in his portfolio. 

He takes over from Penny 
Hughes. Coke's president of 
Great Britain and Ireland, who 
has decided not to return from 
maternity leave after her baby 
arrives in April. One of the 
highest flying female execu- 
tives in the UK, Hughes. 35, 
wants to concentrate for a 
while on family rather than 
business commitments. 

Darby, 38. is moving from 
Brussels to London to manage 
his expanded brief. This will be 
the fourth configuration of 


countries Coke had managed 
from London within 10 years, 
he said. 

“We often group divirions 
around thp experience cff the 
leader smrf I’ve spent of 
my 10 years with Coca-Cola in 
the UK,” he says. With strong 
teams of country managers, it 
is easy to make such shuffles, 
be Bom fax Ii Qratmr «n<9 

educated at Manchester Uni- 
versity, he worked in fire UK 
for Sp fliers Foods and S.C. 
Johnson before joining Coke in 
1984. 

Coke remains the largest sin- 
gle UK grocery brand with gro- 
cery sales of about £260m, 
according to Melsen, the mar- 
ket researchers. 

Darby says fire biggest task 
for him - and mripr»ri Coke any- 
where -is to get more people to 
drink its soft drinks rather 


U«m other beverages of any 
irinA. “Competing for the con- 
sumption occasion” is the 
phrase that gets Coke pulses 
racing. In per capita consump- 
tion terms, the UK and other 
European countries are. still 
virgin territory far soft drinks 
compared with the US. 

ArmHier ml wwaBn- irirtncfaig 
p hraa p mjght be Virgin Cola, 
launched recently by Richard 
Branson and Cott Corporation. 
But Darby says competition 
helps stimulate the whole mar- 
ket and any w ay Coke always 
gets the lion share of any 
growth. 

Wifii Branson likely to have 
a glass of his own in his hand 
in every picture, the competi- 
tion could be brisk. But Dar- 
by's hot bothered- “We always 
feature Coca-Cola as the hero, 
the star.” Roderick Oram 


The art of persuasion at TransTec 


Richard Carr, the former 
Tomkins executive who was 
appointed chief executive of 
TransTec just three weeks ago, 
has persuaded two of the 
unsuccessful applicants for his 
job to join the specialist engi- 
neering group. 

Peter Summerfield, 47. (far 
right) who is to be managing 
director of the newly formed 
manufacturing division, joins 
from British Aerospace, where 
for the past five years he has 
been managing director, 
operations, for the regional jet 
business at Avro. The other 
new director is Tony Kirkroan 



(near right), a 49-yeanold engi- 
neer who has held a number of 
senior positions at GEC's 
Avery subsidiary. % will bead 
up the new controls dfvirion. 

Carr, 4L said the pair took 
some persuading. "They are 
both highly q nalifwri mmiag ma 
with their own egos. But I 


managed to sell th*»m my 
visum of the group. It’s great 
that we have. got them so 
quickly - it could well have 
taken six mmtfha or more - 
and it puts us in a very strong 
position." 

Carr was brought in earlier 
*hi» month when TranSTec*s 
founder. Labour MP Geoffrey 
Robinson, agreed to spirt his 
role as rfrflfrmaii and - chief 
executive following pressure 
from institutional investors. 
Previously in charge of US 
acquiritians for Tomkins, Carr' 
picked up a £lOm bonus before 
be left. David Wfghton 


BUSINESSES FOR SALE 


■ Godfrey KBhgs(aboveX - 
formerly chief exEcutive of 
Fimbra and deputy chief 1: 

executive of PIA, at DBS ' 

management.; ; .. •. :■ 

■ Timothy Curtis, chief . 
executive of TetemetrtMt . .. 
DOBSON PARK IND U STRIES. 

■ mchardRoMnson,BHicf 
Forbes Schroder & Co,alThe 

KYLE AGENCY- ’ ■ . • 

■ Edward Harris, formerly . 
md, as chairman at 1J32DA. . 

■ Pbfflp Kaye hEriretiredfrom 

CITY CENTRE 
RESTAURANTS. -. 

■ David He witt h as. retired. - 
from OOLORVZSZQN. • • 

■ Philip Girle is retiring from 
SOUTHERN WATER. 

■ Robin Burleigh, senior V 
partner of Clifford Chance; at 
FIRST NATIONAL FINANCE . 
CORPORATION. . 

■ Peter Molony at ALLIED 
LEISURE. 

■ Ted IlOy, chief executive of 
the Consolidated and fhranaal 
Insurance Ofroqp, at . > • 
MARCHANT &EUOT;:- 
UNDERWRITING. 

■ Gerald Harris, former . 
commercial director ctf Ceartral 
Television, as <&akmah sit 
MORTON HODSON. V. 

■ Peter Everett at 
EDINBURGH JAVA TRUST. 

■ Bffl Gttey as deput y ;.- . 

ebainnanat S WAM rQWBXBU). 

■ Jttim PricehasTesigQedL • 
froroQUAYLE MUNR0 ; 


■ Michael Kranse, president of 

American Premier’s . . 

non-standard automobfle 
group, at its subsidiary 
INSDRANCBfC©). 

■ Philip Barth at 
ALEXANDERS HOLDINGS. . 

I Dsvtd.Unnell as chairman 
at YRM in succession. toTony 
Hunt who remains cn. the 
board but steps down to take 
operational responsibility for 
the structural engineering .. 
division. . 

■ Adrian Fort at HAMBROS 
CURRENCY FUND; David 
Gibbs has resigned. 


LEGAL 
OH 







REPUBLIC OF POLAND 
MINISTER OF PRIVATIZATION 

Invites Tender Offers 

Concerning Purchase of Shares in Share Capital 
of the Cosmetics Factory “Pollena - Uroda* 
Joint-Stock Company 

The Minister of Privatization, acting on behalf of the State Treasury of the Republic of 
Poland, in accordance with Ait 23 of the Law on Privatization of State - Owned Enterprises 
of July 13, 1990 (Dz-U. nr 51/90 item 298 with further amendments) invites tender offers of 
potential investors interested in purchasing shares constituting at least 10% of share capital 
of "PoUena - Uroda" Joint Stock Company- 

According to Art 24 of the Law on Privatization of State - Owned Enterprises a stake of up 
to 20% of shares in share capital of “Pollena - Uroda" JLA. will be offered to the Company 
emplyees. 

According to the Resolution of the Council of Ministers, no. 86 of October 4> 1993, a stake of 
5% of shares in share capital will be retained by the State Treasury as the State Treasury 
Property for reprivatization purposes. 

In addition, it is expected that a stake of shares will be rendered accessible to small investors 
by means of Public Offer. 

The Cosmetics Factory “PoUena - Uroda" Joint Stock Company with the seat in Warsaw, 
Poland is the leading Polish manufacturer of cosmetics, particularly skin and hair care 
products as weU as liquid detergents. 

Any requests and response of potential investors bang interested in proceeding with this 
offer should be directed till December 16, 1994, 4.00 pm to the Polish Institute of 
Management. Ltd. (PTM) acting on behalf of the Minister of Privatization in this project 
Address; Polish Institute of Management Ltd. (PIM) 

02-691 Warsaw, St Obrzezna 7 

phone 47 51 73; 47 55 61 ext 434-436; fax 17 50 53 

e-mail: pimplemaloka.waw.pl 
Transaction manager Krzysztof Trakul 

Information on the Company profile will be distrubted to potential investors after signing 
up the appropriate "Letter of Confidentiality". 

The Minister of Privatization reserves the right to extend the period allocated to offer 
submission, reject submitted offers or not to undertake negotiations without explanation. 




wm 




Rc£HJLS3/}WU 


*H*-Tnn frrtitr Jinuti imm il Tim jim.ii 






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“» reran rojnrwj the bob bj tto auhn- 

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DATED Ho 2»<%of»«a*er 19M 


BSSSZSSHBIEnS 





Rttshea Oil Co. Ld on behalf of the Govcnnncnl of Sierra Lcooe is pleased to 
invite bids tar coodacting seismic prospecting wi thin (be Off-Store root of 
Sierra Leone Territorial waters. 

Scope of Works: a) 4000 linear Uomctrca 

b) Work to Commence Feb/Mai *95 

Interested parties capable of semiiug high t]tntiiy wtnnir tfafa AmM coaaa 
the following for farther deoils: 

Rasbea Oil Co. LuJ. i 

UK Representative Office. 64 A Wailing St. i 

Rfldksn, Herts, WD7 7NP Fax 071-435 7615 j 

All tender bids should be submitted no later than 
, December 2 1st, 1994 12.00 bonis rsooo. J 


Everards Brewery 
limited 

NOTICE is hereby given that thr 
transfer books and register of Us 5% 
Comablm Preference Shares of 
the above named Compan j will be 
closed on lSlh December 1994, 
to facilitate the preparation of a c 
payment of die half-yearly dividend 
on 3 Is December 1994. 

By order of foe Board 
IfANbm 

HaanCiai Oeeacir A Company Secretary 


To Advertise 
Your 

Legal Notices 

Please contact 
Tina McGorman 

on -f44 71 873 4842 
Fax: -r44 71 873 3064 


: te 





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LEGAL 

NOTICES 






FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 

Drawn to the 
kitchen sink 

William Packer reviews the work of 
five artists in vogue during the 1950s 


ARTS 


G ive a dog a bad name - 
but with art it would 
seem that any name 
will stick. It was 
remarked in the mid- 
1950s that certain younger realist 
p aint ers and writers were firing 
upon the more unkempt and infor- 
mal features of domestic life; the 
lovely Mary Ure at the ironing- 
board, the irainarfc bed, t.hg lavatory 
bowl, the breakfast-table, the 
kitchen sink itself. And “Kitchen 
Sink" was taken up at onoe, and 
still stands, as the epithet by which 
to characterise much of the work, 
indeed the very mood, of the entire 
period. 

That it was only ever a partial 
truth would hardly disqualify so 
patently catchy and convenient a 
term. But it had its effects, even so, 
and not all of them benign. It might 
be all very well in relation to Look 
Back in Anger, or to John Bratby’s 
paintings of table-tops, or Jack 
Smith’s babies, prams and rink. But 
was it always quite so apropos? 
What about Lucky Jim or Godot! 
More to the point, what about the 
still-lifes and butchers’ shops of 
Peter Coker, the fields and streams 
of Edward MiddWut***!, the Italian 
farmyards and rooftops of Derrick 
Greaves? 

Give a dog a bad name: so when 
the mood of the moment li ghtene d 
with the turn of the decade , and the 
arch and ironical references of Pop- 
Art replaced a supposed realist 
gloom, small wonder that all these 
painters seemed suddenly so irrele- 
vant and passA, ripe for the rubbish 
bin. Greaves, Smith, Middleditch 
and Bratby had together repre- 
sented Britain at the Venice Bien- 
nale of 1966. By the mid-1960s, only 
Smith, who had since “gone 
abstract", still enjoyed any critical 
credibility at aH 

The critical rehabilitation, which 
at times amounts to mfiscovery, of 
the painting of the 1950s has been 
one of the most positive and encour- 
aging critical developments of 
recent years. For it reminds us that 
no critical orthodoxy is either per- 
manent or necessarily narrow, and 
suggests besides that good work 


eventually wfil receive its due. The 
process continues happily with this 
handsome show at the Mayra- Gal- 
lery, in which a considerable 
emphasis is placed upon the role of 
drawing in relation to painting. 

What emerges is that drawing as 
a discipline is no mere thing of 
indulgent self-expression, though 
inevitably the self is expressed. Nor 
is it simply a matter of teehidrart 
mastery or demonstration, though 
of course skin Is not to be sniffled at 
Rather it is a discipline quite as 
much of the eye and the mind as of 
the hand, of observation, under- 
standing and enquiry. The particu- 
lar subject is studied, the useful 
record of information made, the 
larger composition proposed and 
modified through variation. It is a 
practical and unseUConscdous busi- 
ness, out of which thing s of great 
power and beauty emerge. 

That we see all these artists as 
they were as young artists, is, how- 
ever, a shade dispiriting. For, leav- 
ing their painting aside for the 
moment, here Is drawing of a tech- 
nical quality and seriousness of pur- 
pose which in those days could be 
assumed even from the young, but 
which today is entirely foreign to 
the experience of almost any artist 
under SO. We simply never see it 
because it is not done, nor even 
thought to be relevant 


T he five heroes. Bratby, 
Smith, Middleditch, 
Greaves and Coker, are 
represented by substan- 
tial paintings of that 
period, inr.lnrirng r Smith’s epony- 
mous "Baby in Sink” of 1963, and 
they are joined in their draughts- 
man aspect by Henry inlander and 
Bruce Tippett. And of them all, 
what with Bratby, Middleditch and 
Inlander already dead, Coker sadly 
now an invalid, and Smith and Tip- 
pett both now abstract painters, 
only (leaves is still at work in the 
old way. He was always the aes- 
thete, even then as concerned with 
the elegant ran and sweep of the 
line as with his no minal subject of a 
pregnant woman, or a sleeping baby. 
John Bratby's r emains a powerful 



‘Study of a Baby Asleep - the artist’s son Simon’, c.1956 by Derrick Greaves 


presence, with some fine still-lifes 
and kitchen interiors and strong 
drawings. They offer a salutary 
reminder that a remarkable young 
artist has been too-long obscured by 
the reputation of the uncritical, 
self-regarding buffoon and carica- 
ture of hims elf he became in his 
later years. Certainly he is remem- 
bered by those who taught him at 
the Royal College in the early 1950s 
as still one of the most gifted 


draughtsmen ever to pass through 

the painting SChOOL 

But the star of the show is Peter 
Coker, with but one large painting 
of an apple tree, of 1956. and a 
sequence of ravishing drawings, of 
trees and landscape, of dead fish 
and hare and chickens, of butchers 
heaving carcases about, and of his 
baby son asleep - for they all drew 
and painted their children. And the 
young Coker's drawings, above the 


rest, make the very point that draw- 
ing too, and with a wonderful econ- 
omy, can aspire to the condition of 
true art. He is one of the great 
unacknowledged painters of our 
time, and It is time we put that 
right 

The Kitchen Sink and the Beaux 
Arts Gallery: Mayor Gallery, 22a 
Cork Street W1 until December 23, 
In association with Julian HartnolL 


Van Dam, Levine and 
the Philharmonia 


Recital/John Allison 


O pportunities of hearing 
the great baritone Jos@ 
van Dam in London are 
so rare that even the tur- 
gid account of Brahms’s Bin Deut- 
sches Requiem at the Royal Festival 
Hall on Saturday was worth catch- 
ing for his performance. Van Dam - 
undervalued, it seems, by Covent 
Garden - ought to be a regular visi- 
tor here, but at least he made a 
brief appearance with James Levine 
and the Philharmonia Orchestra, 
bringing a few minutes of musical 
sanity to an otherwise largely self- 
indulgent reading: 

Van Dam is one of the most musi- 
cianly of singers around today, and 
' he gave Brahms's vocal lines 
sculpted nobility. His contribution, 
and that of Barbara Bonney, the 
r adiant soprano soloist, contrasted 
starkly with Levine's bloated con- 
ception of the piece. Levine, chief of 
New York’s Metropolitan Opera, is 
the conductor who broke almost all 
records by adding an hour onto the 
length of the Ring at Bayreuth this 
year, and here bis Brahms was sim- 
ilarly distorted. 

The majestic funeral march of the 
second movement lacked muscular 


r&frsiwATi&mi 1 


■ BRUSSELS 

SS^aes Tel: (02) 511 90&4 
• Gainsborough to Ruskm: British 
landscape drawings ana 

ssssrsB*_ 

s-ssssrsss-. 

tan 15 (Not Mon) __ 


■ PARIS 

• British Art in RW*^ PUMC 

Gainsborough R^nfa«ed Tu0 . : 

Lawrence and Turner. 

to Dec 19 -w’ Ml 45 49 11 I 1 

others; to Jan 91 [N°t M 0 "* 

• 12 Dame SatHav 

Tchaikovsky. Director va»ry 


tautness, and seemed more like a 
musical picture of the throbbing 
engines on a slowly cruising ocean 
liner. The strong singing of the 
Philharmonia Chorus was under- 
mined at every turn by Levine’s 
square conducting, the fugal pas- 
sages in particular emerging as pon- 
derous exercises in counterpoint 
Fortissimos were all equally, unre- 
lentingly heavy. 

The concert was certainly a 
starry one: the soloist in Beeth- 
oven's Emperor Concerto before 
interval had been the young Yev- 
geny Kfadw, perhaps the outstand- 
ing pianist of his generation 
one already tipped to inherit the 
mantle of the Russian keyboard 
giants before him. 

His playing had all the stature - 
power and poetry in equal measure 
- fiwt suggests, hut Levine drained 
the music of dramatic vigour. Tins 
was a well-upholstered performance 
in the grand manner one had 
thought extinct, and would have 
appealed only to those who hanker 
after Karajan at his most porten- 
tous. 

John Allison 


at 7.30 pm; Dec 1, 2 

• La Khovanschina: opera by 
Mussorgsky at 7.30 pm; Nov 29, 30; 
Dec 3, 4 

• Sadko: Rimsky-Kbrsakov opera. 
Musical director Valery Gergiev at 

7.30 pm; Dec 6 

■ BERLIN 

OPERA/BALLET 

Deutsche Oper Tel: (030)3 41 92 49 

• Dialogues des CarmMtes: by 
Poulenc, In three parts. A new 
production directed by Gflnter 
Kramer. Conductor JiFl tout at 7.30 
pm; Nov 29; Dee 1 

• The Magic Flute: by Mozart 
Conductor FostetfLang-Lessing/ 
Softssz, production by Gutter 
Kramer at 7 pm; Nov 30 

■ AMSTERDAM 

CONCERTS 

Het Concertgebouw Tel: (020) 671 
8345 

• Bernard Haitink: conducts the 
Royal Concertgebouw Orchestra, 

with soprano Karen Huffetodt, 
mezzosoprano Hanna Schwarz, and 
baritone Csaba Ajrizer to perform 
Schoenberg and Bartdk at 8.15 pm; 
Dec 1» 2 

0 Moscow Philharmonic Orchestra: 
conducted by Vasslli Sinabkiptey 
Beethoven art Mussorgsky at 8.15 

[fet Muzfofctheater Tefc(020)551 89 
22 

m Die Bedermaua by Strauss. 
Conductor, Ralf WeHrert, producton 
Schaaf at 8 pm; Dec 6 

g£tfg^mTel;020 673 21 21 
W^^oBonlSOO-ISOftmalor 
"nter sxhlbiSon focusing on the 


L ast Thursday was Russian 
Opera Night In London: 
while the new production 
of Khovonshchina unfolded 
at the Coliseum, the great 
Russian mezzo Irina Arkhipova 
was holding her Wigmore Hall 
audience spellbound in a 
programme devoted mainly to 
Rimsky-Kbrsakov songs. 

Arkhipova, doyenne of Russian 
singers, is nearing the end of a 
performing career that has taken 
her throughout the world and made 
her a heroine in her homeland, and 
Thursday’s recital, latest offering 
in the Ktrov-Maryinsky Series, may 
wefi turn out to have been her final 
appearance on the London 
platform. She was in remarkably 
good vocal shape: though she of 
course no longer commands the 
powers of her prime, every phrase 
was song with warmth and 
dramatic intensity. 

Arkhipova’s programme was also 
an imaginative contribution to the 
150th anniversary this year of 
Rimsky-Korsako v* s birth. The 
composer's 80-or-so songs are 
scandalously undervalued. Ear more 
neglected even than those of 
Tchaikovsky or Rakhmanlnov, and 


Arkhipova and her protege 


they form an equally rich body of 
literature. Spanning most of 
Rimsky’s career, the songs reflect 
his stylistic attachments and - like 
artists’ sketches to finished 
paintings - contain the essence of 
ideas developed in the operas. 
Above all, with texts drawn from 
writers including Pushkin, 
Lermontov and Alexis Tolstoy, 
many of Rimsky’s songs are 
musico-poetic gems. 


W e heard 17 of them, 
and Arkhipova’s 
performances made 
dear their range of 
expression. With rich tone flowing 
effortlessly, the mezzo sounded in 
"Not a sound from the sea" like 
the proverbial voice of Mother 
Russia. 

Arkhipova traversed a range of 
feeling, from the melancholia of the 
"Hebrew Song" and sultriness of 
"Southern Night” to the gentle 
simplicity of "Quietly evening 
falls" and bursting happiness of 
"The lark sings louder". One 
savoured each equally, yet the 
exquisite "The clouds begin to 
scatter" was a highlight of the 
evening. I van Ilya provided 


masterfully characterised 
accompaniments. 

The programme’s scope was 
widened to Include music by two of 
Rimsky’s colleagues, Mussorgsky 
and Borodin, and to allow 
Arkhipova to introduce one of her 
proteges, the Bashkirian bass 
Askar Abdrasakov. Together they 
sang the duet for Haifa (one of the 
mezzo’s most celebrated roles) and 
Dosifey from Khovonshchina, 
before the spotlight was turned on 
Abdrasakov in his imposing 
performances of the Trepak 
from Songs and Dances of Death, 
Konchak’s aria (Prince Igor) 
and the Viking Guest's song 
(Sadko). 

AD revealed an instrument - 
dark, fbU-toned and focused - of 
astonishing maturity for a singer 
so young. Abdrasakov is 
undoubtedly a name to watch, 
and bis presence here was an 
indication of Arkhipova's 
gen e rosity and dedication to the 
future of her art. 

The Maiyins&y-Kirov Series is 
supp or ted by the Regent Hotel 
(London) and British Airways (St 
Petersburg). 


spiritual function of objects in the 
medieval period; to Feb 26 (Not Sun) 

■ LONDON 

CONCERTS 

Barbican Tel: (071) 638 8891 

• Gala Concert London Symphony 
Orches t ra with mezzo-soprano 
MarByn Home and conducted by 
Marvin Hamlisch. Includes 
HamJrsch'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 Many perform a 
variety of operatic pieces at 7.30 
pm; Dec 3 

Festival Hall Tab (071) 928 8800 

• PhiJharmonia Orchestra: with 
conductor Charles Dutolt and pianist 
Peter JaWonski ploy Tchaikovsky 

(piano concerto No. 2) and 

Shostakovich (symphony No.5) at 

7.30 pm; Dec 6 

Queen Elizabeth Hall Tel: (071) 928 
8800 

• The Fail of Icarus: Mufti- media 
event inspired by Bruegel's, 
'Landscape with Fall of loams’. 
Belgian cfirector Fr6d6ric Flamand 
collaborates with Italian artist 
Fabrbdo Plessi and composer 
Michael Nyman at 7.45 pm; Dec 2, 3 
GALLERIES 

Barbican Tel: (071) 838 8891 

• A Bitter Truth: a multi-media 
exploration of changes in attitudes 
towards World War 1 throughout its 
duration; to Dec 11 

Royal Academy Te!:(071) 439 7438 

• The Glory of Venice: a major 
survey of Venetian art In the 18th 
century, to Dec 14 
OPERA/BALLET 

English National Opera 


Tel: (071) 632 8300 

• Ariadne on Naxos: by Strauss. A 
Graham Vick production at 7.30 pm; 
Dec 1 

• Khovanshchina: new production 
of Mussorgsky's opera. Director 
Francesca Zambetlo at 6.30 pm; 

Nov 30; Dec 3, 6 

• The Magic Flute: by Mozart 
Originally produced by Nicolas 
Hytner, John Abulafia directs this 
revival with conductor Alex Ingram 
at 7.30 pm; Nov 29; Dec 2 
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 Chios by 
Ravel at 730 pm; Nov 30 

9 La Treviata: by Verdi. A new 
production by Richard Eyre. Georg 
Solti conducts for the first five 
performances, then Phillips Auguin. 
In Italian with English surtities at 

7.30 pm; Nov 29; Dec 2, 5 
9 Mixed Programme: includes 
Fearful Symmetries choreographed 
by Ashley Page, and Symphony in C 
by Bizet, choreographed by George 
Balanchine at 7.30 pm; Dec 1, 6 
9 The Sleeping Beauty, a new 
production of Tchaikovsky's ballet 
Produced by Anthony Dowell, set 
designed by Maria Bjomson at 7.30 
pm; Dec 3 (2 pm) 

THEATRE 

Barbican Tel: (071) 638 8891 
9 New England: World premiere of 
Richard Nelson's new play. No 
performance 12-1 5th Dec., 
otherwise at 7.15 pm; from Nov 29 
to Dec 29 (Not Sun) 


Theatre/Alastair Macaulay 

Raising Fires 


I t 21 behoves i&e to speak £D of 
a play that concerns farming 
folk near Manningtree, since 
the folk I myself come from are 
all farmers near Manningtree and 
since they present a valuable con- 
trast to the popular conception of 
"Essex person”. Indeed, Raising 
Fins, a new play by Jenny McLeod, 
is also about rural arson, and tn my 
time I have stood by flaming 
strawstacks ignited by arsonists. 

But Raising Fires Is not the play 
to raise Manningtree^»nscionsness. 
It Is merely a muddled melodrama, 
amii dismally close to wiimiriring the 
bygone witch-hunting depicted in 
Arthur Miller’s The Crucible. Set in 
Elizabethan (Manningtree Is 
mentioned In Shakespeare), it 
shows how young Marshall Loder 
has married one woman, Ruth, to 
advance his own political career, 
though having mads annthw girl, 
Tilda Hubbie, pregnant; and it then 
shows how the women of the com- 
munity make Tilda out to be the 
witching culprit of the mysterious 
local fires. The twist is that Tilda is 
black. 

Tilda Is conceived entirely as a 
p.c. victim - female, black, inno- 
cent, loveable, maligned. (“The first 
thing I remember is other people.") 
Men have used her for their various 
purposes all along ( Minis ter Hubbie 
In adopting her, his «« nania! and 

Marshall Loder in malting love to 

her); and now women pick on her 
too. “Women look, mw touch," ah** 
says. But it is peculiar how long we 
wait until Tilda's colour Is properly 
mentioned (nor is it ever seriously 
discussed); and yet that, in a trice, 
becomes the reason why she s 
picked on as a witch. 

The thumbscrews are tightened 
when Ruth Loder, aware that her 
husband has impregnated Tilda, bit- 
terly testifies that Tilda is both 
Witch and arsonist. Marshall Loder, 

a standard male hypocrite who 
wants political advancement 


through his wife's father and sex 
with Tilda, vacillates. What will he 
do? Actually, it doesn’t matter, for 
he proves as helpless in the face of 
mob hysteria as Tilda. Tilda is 
packed off to her death. Someone 
ends by saying "God - -we will 
answer for this.” A more serious 
play might have shown them 
answering for it, or might have 
made Marshall Loder's dilemma 

mm Interesting (by TwaMwg him a 

more interesting character), or 
might not kept zts focus more thor- 
oughly on Minister Hobble (who 
promises damnation or paradise for 
the pettiest sins or virtues, but who 
has kept Tilda irresponsibly pas- 
sive). 

But everything here is clumsy. 
The language commutes wretchedly 
between mock-period ("At such a 
sight the msifle me was so 

great", "Four babies 1 had In my 
arms") and naturalistic modernity 
(“This is not what I need", *T say 
'Bugger the father’”)- The conflict 
between Minister Hubbie and Judge 
Fury suggests a church v. law con- 
flict that is inadequately investi- 
gated. The roles that Daniel Hubbie 
and Grace Turvey play in the offs- 
tage action are insufficiently dear. 
And the names! Hubbie this. Wife 
that; Grace here. Fury there. I can- 
not imag ine why this play won a 

1993 London Weekend Television 
Flays on Stage Award. 

Dominic Dromgoole, directing, 
keeps it lively, but he cannot pro- 
vide depth. The same goes for his 
cast, which, indudes Robin Soans as 
Minister Hubbie, Julie Saunders as 
Tilda, and Gary Love as Marshall 
Loder. And there is too much 
unnecessary shouting In pub thea- 
tres, making the actors turn up 
their volume controls is the easiest 
way to achieve intensity, hut also 
the cheapest 

At the Bush Theatre, W.6. 


Qpera/Roderic Dunnett 

The Spanish Lady 


When Elgar died in 1934, one of the 
three major unfinished projects he 
l left was an opera. The Spanish 
Lady. Is it salvageable? Arguably 
not The surviving material is 
extensive but fragmentary, and 
almost beyond repair. But both 
Cambridge University Opera Club, 
and Dr Percy Young, to whose 
devoted scholarship we know, as 
much as we do, are to be congratu- 
lated on having a crack at it The 
Spardsh Lady was staged last week 
as part of the enterprising Cam- 
bridge Klgar Festival. 

The story is broadly based an Ben 
Jonson’s {day The Deoil is an Ass, 
on to which Elgar grafted texts 
from other sources, including Jon- 
son’s 77ie Epicoene (on which 
Strauss was already working inde- 
pendently for Die Schweigsame 
Frau). Elgar’s text is not merely 
eclectic, but butterfly-llke: part- 
masque, part Restoration comedy, 
mainly morality d la Volpone (with 
a satirical bite rather lost here in 
performance). 

This first full staging, in Young's 
conjectural completion, made for a 
mixed evening. What was badly 
needed was the kind of coherent, 
taut direction Joseph Ward brought 
to the Royal Northern College’s Pil- 
grim's Progress. There not a flinch 
or quiver was wasted. Here, Adrian 
Osmond (Trinity), unbelped by the 
cramping of on-stage orchestra and 
the set that gave none of the 
intended seise of place, failed really 
to surmount any Of the inherent 
problems. 

Most first-half stage entries and 
exits were loose, at worst abysmal 
Over -fussy or random crowd activ- 
ity muddied too many focal 
moments. Principals projected 


insufficiently, so that the intricate 
plot became further confounded. 
Character definition was weak, with 
the exception of Leigh Melrose's 
Meercraft and Keith Perry's foppish 
Manly, both admirably sung. The 
devilry of Pug (Susie Trayting) soon 
lost its initial promise. Even a mem- 
orably funny drag entry by Christo- 
pher Genz (Wlttipol) as the Spanish 
Instructress was blurred by poor 
Mocking . Blake Applegate supplied 
the tidiest cameo as Engine, dou- 
bling as the duenna. 

And Elgar's music? Young’s 
orchestral completion turned out 
attractive, but markedly "safe”. Too 
often, the music seemed to bare 
scant relation to what was happen- 
ing on stage. More risks needed to 
be taken. But where a salient fea- 
ture appeared, such as the brief 
prominence awarded to paired clari- 
nets and bassoon near the end, a 
momentary magic was unfurled. 

Conductor William Lacey (Kings) 
gave consistently clear leads, sur- 
viving one n ervou s Act II moment 
in the upper strings but engender- 
ing some needlessly awkward 
pauses that detracted from overall 
pace. IDs besetting fault was a 
monotonous dynamic, frozen 
between forte and mezzo-forte. (The 
leisurely Handelian pacings best in 
the stately Sarabande) often verged 
on the blind: the poise of a Lully or 
Rameau would have been a wel- 
come relief. 

The choreographer, Darren Roys- 
ton, seemed alone in sensing this: 
his dances (with chief accolade, 
undeniably, to the boys) were 
charming, lucid and inventive. 

Performance sponsored by Warren 
Insolation. 


National, Lyttelton Tel: (071) 928 
2252 

9 Out of a House Walked a Man: 
by Daniil Kharms. A Royal National 
Theatre and Theatre de Complicite 
co-production of a collection of 
musical scenes by the Russian 
absurdist writer at 7.30 pm; Dec 1 (7 
pm), 2, 3 (2.15 pm), 5 
National, Olivier Tel: (071)928 2252 
• The Devil's Disdple: play by 
Bernard Shaw, directed by 
Christopher Morahan. Sat and Tues 
mat at 2.00 pm; to Nov 30 (Not Sun) 
Wyndhama Tel: (071) 369 1736 
9 Three Tall Women: by Edward 
Albee, directed by Anthony Page. 
With Maggie Smith, Frances de la 
Tour and Anastasia HiKe at 8 pm; 
(Not Sun) 

■ NEW YORK 

GALLERIES 

Metropolitan 

9 Origins of Impressionism: 175 
paintings by Parisian artists of the 
1860's; to Jan 8 (Not Mon) 

Museum of Modem Art Teh (212) 
708 9480 

9 A Century of Artists' Books; 
Exhibition of 140 books from some 
of this century’s foremost artists; to 
Jan 24 

OPERA/BALLET 
Metropolitan Tel: (212) 362 6000 
9 Don Giovanni: by Mozart, sung In 
Italian at 8 pm; Deo 2, 6 
9 Lady Macbeth of Mtsensk: by 
Shostakovich at 8 pm; Nov 30; 

Dec 3 

9 Madama Butterfly: by Puccini at 

8 pm; Dec 1, 5 

9 Rigotetto: Italian opera by Verdi 
at 8 pm; Nov 29; Dec 3 

New York State Theater Tel: (212) 
870 5570 


9 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 

Gershwin Theatre Tel: (212) 307 
4100 

9 Show Boat by Harold Prince, 
choreog rap hed by Susan Stroman. 
Cast includes John McMartin, Elaine 
Strftch, Rebecca Luker and Mark 
Jacoby at 8 pm; (Not Mon) 
Promenade Theatre Tat (212) 239 
6200 

9 Three Tall Women: Edward 

Aibee’s Pulitzer Prize winning dr a ma 
about a 92 year old widow 
contemplating her life. Sim. 3pm, 
otherwise at 8 pm; (Not Mon) 

■ WASHINGTON 

CONCERTS 

Kennedy Centre Teh (202) 467 
4600 

9 National Symphony Orchestra: 
conducted by Eiji Oue play Mahler 
and Tchaikovsky at 8^0 pm; Dec 1, 
2 (1 .30 pm) , 3, 6 (7 pm) 
GALLERIES 

PMBps Collection Tot (202) 387 
2151 

9 Pictographs of Adolph Gottlieb: 

exhibition of one of the founding 

members of the New York School; 

to Jan 2 

OPERA/BALLET 

Kennedy Centre Teh (202) 467 

4600 

9 George Balanchine Series: final 
of a three part exploration Into the 
work of the choreographer. Led by 
prima ballerina Suzanne Farrell at 

6.30 pm; Dec 1 


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THE FT INTERVIEW: Jacques Toubon 


“My great 
desire is not to 
prevent the 
French from 
speaking what- 
ever language 
they 13 k," says 
the man whose name, Jacques 
Toubon, will for ever be 
attached to the law of August 4 
1994, regulating the use of the 
French language. 

“What 1 want is to make it 
just as modern, just as - dare I 
say it? - ‘fashionable’ to speak 
French as to speak English. " 

Had the minister of culture 
and “francophonie", now 
known to many of his compa- 
triots as “Jack Allgood", just 
broken his own law by using 
an English word while speak- 
ing in his official capacity and 
on public premises? That 
would be for the courts to 
decide, if anyone prosecutes. 

The official glossary of 
French words which Mr Tou- 
bon wanted to append to his 
law was struck out by the Con- 
stitutional Council as an 
infringement of the “free com- 
munication of thought and of 
opinion” proclaimed by the 
Declaration of the Rights of 
Man in 1789. This means that 
“you can still oblige people to 
speak French, but they can. 
speak whatever French they 
like - which obviously leaves 
it to the courts to decide, in the 
last resort, what is French.” 

Mr Toubon is a close ally of 
Mr Jacques Chirac, the Gaoll- 
ist mayor of Paris, former 
prime minister and now for the 
third time presidential candi- 
date. But he insists his lan- 
guage policy is part of a gen- 
eral strategy adopted by the 
Balladur government, aimed 
both at developing French cul- 
ture abroad and at strengthen- 
ing the links within the 
French-speaking world, of 
which the most important is of 
course the language itself. 

Indeed, he claims the loudest 
demand for action to defend 
French in France came from 
other French-speaking coun- 
tries, which are anxious to join 
with France “in proposing an 
alternative to the Anglo-Saxon 
model of the universe”. And he 
clearly relishes the task of 
defending this alternative in 
an interview with the Finan- 
cial Times, a newspaper seen 
by many French people as 
heading the Anglo-Saxon inva- 
sion of the continent 
“I'm a strong believer in 
learning foreign languages,” 
Mr Toubon declares. "What I 
don't want is a language which 
would be neither a foreign lan- 
guage nor my own. I want 


Mind your 
language 



Toubon: Tm a strong believer in learning foreign languages.’ 


French, English. Russian - but 
as languages, in the plural. I 
want the English of Shake- 
speare, not of Microsoft." 

His nightmare is that in 50 
years France would have a 
“tribal" linguistic structure, 
with executives speaking 
English, immigrants speaking 
their own languages, ordinary 
people speaking “the language 
of television - 400 words, with 
every kind of sloppiness", and 
“in the middle the language of 
the administration . . . and per- 
haps the language of intellectu- 
als and professors”. 

This, he says, would be “a 
catastrophe: it would mean 
that our society, already torn 
apart by so many other things, 
would not only tear itself apart 
but the fragments would be 
incapable of understanding 
each other”. 

Mr Toubon brushes aside the 
argument that language can- 
not be decided by law. In 
France, he says, “the state has 
always had its word to say", 
ever since the 17tb century 
when Richelieu instituted the 
French Academy. 

ft was in this spirit that he 
fought his successful battle 
last year to keep cultural prod- 
ucts, especially film and televi- 
sion, outside the purview of 
the Genera] Agreement on 


Trade and Tariffs, preserving 
France's right to subsidise its 
film industry and to reserve a 
part of its air time for Euro- 
pean products. In the same 
spirit he is now engaged in 
another battle, aimed at ensur- 
ing the European Union as a 
whole takes advantage of this 
“cultural exception” and acts 
to preserve the diversity of 
European culture. 


L argely thanks to 
French pressure Mr 
Joao de Deus Pinheiro. 
EU commissioner for 
culture, is now bringing for- 
ward plans to tighten Euro- 
pean broadcasting quotas and 
to ban advertising on new elec- 
tronic information services. 

Mr Toubon accepts that 
some countries, such as 
Britain, will choose not to 
implement the 1 989 “television 
without frontiers" directive, 
which says that a majority of 
TV programmes shown in 
Europe should be European- 
made. But, he insists, countries 
such as France which do apply 
the directive must be able to 
apply it to all TV signals the)' 
receive, as well as those which 
they produce. 

Otherwise, he says, someone 
like Mr Ted Turner, the US 
media magnate, can broadcast 


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FINANCIAL TIMES TUESDAY NOVEMBER 1994 ■ 


Joe Rogaly 


from UK territory by satellite 
■into Europe, including those 
countries which apply the 
TWF directive, whatever pro- 
grammes he likes, including 
100 per cent American car- 
toons". France has banned Mr 
Turner's products from its 
cable network, but the legal 
status of this decision is 
unclear. 

Mr Toubon wants the EU to 
ban such unauthorised cross- 
frontier broadcasts, and also to 
extend the directive to cover 
"new information techniques, 
namely those which are gener- 
ally called multimedia". He 
also want*? to expand the EU 
media programme to give 
increased EU and national aid 
to the production, and espe- 
cially the distribution, of Euro- 
pean films "and. by extension, 
to the films of countries linked 
to Europe, for instance the 
southern film industries in 
Africa, Mexico, Brazil, etc". 

His object, he explains, is “to 
maintain the diversity of film 
production in the world". He 
rejects the suggestion that “all 
you need to do is make films 
that people actually want to 
see", arguing it is up to states, 
and by extension the EU, to 
ensure that people can still 
enjoy a real choice of films and 
television programmes rather 
than being limited to ones 
which reflect “the same model, 
the same state of mind, the 
same aesthetic". 

In this spirit he wants to 
negotiate a convention with 
other governments to make the 
mutual recognition of high 
school diplomas conditional on 
their inclusion or a compulsory 
second foreign language, along- 
side the inevitable English. 
Obviously he hopes that in 
many non-French-speaking 
countries French would be the 
most popular choice, but he 
suggests that Spanish and Ger- 
man also have much to gain. 

Mr Toubon hopes to enlist 
the support of the German 
presidency for these ideas dur- 
ing the Franco-German sum- 
mit in Bonn today and tomor- 
row. which he will attend. 
After that he plans to use the 
French presidency to push 
them forward early next year, 
leaving his fellow-Latins from 
Spain and Italy to finish the 
job. He knows he has a fight on 
Ins hands with the UK govern- 
ment. but claims to have heard 
that even British delegates in 
Brussels are now adopting 
“more conciliatory” positions. 


Life raft for parties 


E A referendum 
on Britain’s 
continued 
membership of 
the European 
Union will be 
promised by all 
three national 
political parlies 
at the next general election. 
Sure it wilL Their respective 
leaders might deny any such 
intention, for the "in or out" 
question has not been tabled 
by any of them, not in so many 
words. It need not be. Circum- 
stances will decide that. The 
Maastricht treaty allowed spe- 
cific opt-outs for Britain (and 
indeed Denmark), but there is 
no guarantee that such jiggery- 
pokery will be possible when - 
if - there is a Maastricht H If 
the rest or the EU moves 
towards further integration 
and Britain stands back, that 
will be as good as an "out” 
vote. It would certainly be seen 
as such during the campaig n _ 
Support for a plebiscite 
based on an overtly more 
innocuous question than “stay 
or go" is accumulating. The 
latest platoon to arrive was 
heralded in an interview with 
Sir James Goldsmith on BBC 
Breakfast with Frost on Sun- 
day. Sir James offered to fund 
a new British political party 
“the purpose of which is only 
one item, to have a referen- 
dum”. Our European Perotista 
need have no fear. He will not 
be called upon to lavish mil- 
lions on a lost cause, as was 
Mr Ross Perot in the 1992 US 
presidential election. He 
should not go to the trouble of 
writing a cheque to a 30-day- 
wonder party that does not yet 
exist. He may not be a serious 
political figure, but he will 
have his referendum, gratis. 

We can count the reasons on 
three fingers. The Liberal Dem- 
ocrats have promised to con- 
sult the people if the intergov- 
ernmental conference of 1996 
agrees on significant changes 
to the constitution of the EU. 


The Labour party has formally 
left the matter open, hut its 
leader has placed himself in a 
position to promise a popular 
vote in much toe same circum- 
stances. This would not be 
expediency, you understand. It 
would be an expression of 
democracy, a means of educa- 
ting- the British about where 
their government is taking 
them. Meanwhile the Conser- 
vatives have moved from the 
prime minister's original flat 
rejection of extra-parliamen- 
tary decision-making towards 
Mr Douglas Hurd’s expedient 
“never say never" of recent 
days. 

Goodness me. What tricks 

the mind does 

play. Two long T . 

years ago, dur- At Oil 

mg the tense neceSSEU 
summer when - 

the passage of tWO T0IC 
the bill to rat- about 

ify the Maas- “V w 

tricht treaty UlITt 

seemed to be CUITenCf 
in question. . * 

the proposition 

was put, here S6COI 
as elsewhere, 
that a promise 
of a referendum on melding 
gtprBngr into a single European 
currency would not only be 
constitutionally correct, it 
might even reunite the Conser- 
vatives. Did I see the foreign 
secretary slipping that card up 
his sleeve, mumhffng the while 
that he would note its useful- 
ness? Sorely not. ft must be my 
fevered imagination. 

Let us move away from such 
phantasmagoria. It has beat 
objected that a vote on the sin- 
gle currency would destabilise 
the currency markets for the 
duration of the c ampai gn. The 
value of the pound would fluc- 
tuate. Titch. Sterling moves 
every which way. every day. 
Contemporary markets are 
destabilised by everything and 
anything. They were pretty 
jumpy over the "join or not” 
question recently posed in Fin- 


It might be 
necessary to hold 
two referendums 
about a single 
European 
currency, the first 
to say no, the 
second, yes 


)m* w Austria, Sweden and, on 
Sunday and Monday, Norway. 
The planet survived. 

Without such a popular vote 

the British polity might not 
survive - not. if our Parlia - 
ment, from which we feel ever 
more remote, took- us into a 
single European currency, 
before that asking bur permis- 
sion. As matters stand, the EU 
is a dub in which its members, 
all sovereign states, sit in con- 
stant negotiating session. It 
has the characteristics of a 
Gaullist union ' of nations- 
rather than those of a sapling 
superstate. Create a stogie cur- 
rency and the balance tips 
sharply the other way. That 

would be a con- 

- stitntional leap 

at TO fo the dark for 

to hold everyone. It- is 
co ouiu nofc only tog 

endums British people 

single * w °£ d 

“ . demand a refer- 

K!3£l endmh first 

the first The trouble 
with, "do you 
LO, the ‘ want to defend: 

I ves the pound?" is 
H 3 that mast peo- 

mmmmmmma pie's emotional 
response would be that they 
do. Believe me, Britain will 
eventually join a European 
currency, If there is erne. Busi- 
ness will see to that Bat it 
might be necessary to hold two 
referendums about it, the first 
to say no, the second, yes. lake 
the business community, the 
Truringtrftam political establish- 
ment knows it can more easily 
win the overarching "stay or 
go" type of question, as ft has 
everywhere In western Europe 
nearly every time it has been 
put When the Danes made the 
mistake of voting no, they 
were asked again. This type of 
question is the “rubber life raft 
into which we may all have to 
f-Hmh " as the then Mr Janies , 
Callaghan remarked when 
what became the British plebi- 
scite of 1975 was first dis- 
cussed. 


is increasing everywhere, « we 
are informed by Referendum 
around the wprhkjxi jg gte . 
able reform** wqrk ptjbasfcgr ; 
■by Macmillan and- edited by- 
David Butler and .Atsttzt toe 1 
ney., Referendums facilitated 
the overthrow of autocratic., 
regjnfos’iii Chile' and. South 
Africa. In New 2featend,Jardaad 
and Italy, the voters cboseetec-. 
total systems thattK. political, 
leaders of the time a^ed-tifom ' 
to reject, fri the US, statewide , 
voter initiatives are becomfiig 
as commonpfeua as national 


Switzerland. For the most part 
electorates are pretty conserva- 
tive. They tend to go with 
the established ■ co nsen sus, „ 

usually by a decisive majority.' - 
That is why Britain voted, 
two to one for membeaMp uf : 

the then Common Market in; 
1975. - - X . _ ; . 

Whatever type, of question is - 
chosen,- a referendum .On. 
Europe in 1996 nright sphl the . 
Conservative party. Wen. yen 
tax a way, sort oCYpu cannot 
properly divide what is already 
in smithereens. True, a prom- ~ 
ise of a popular. oonsoRatlon 
might not heal the wirimtis evi- 
dent In yesterday's debate on ‘ 
Britain’s contribution to She' 
EU budget. 'Mr' Kenneth 
Clarke, the dranceDor, merci- 
lessly thumped the sceptics 
behind' him, leaving none 
tmbruised. Bta we are tatting 
of a mere handful of Tory 
bitter-enders bare. Sorely toast _ 
of the party would come 
together on a promise to can-' 
soft the people. Asfo 1975, cab- 
inet solidarity might have to 
be suspended so that- ministers 
couldcampaignoiLopposite 
sides. So - what? “Hrey do that, 
covertly, nowX 
- In sum, a property managed 
r efe r endum A a awEd, if risky, . 
last-ditch device for getting 
parties out of-trouMe and per- 
suading us to vote the way the 
ehte of the day thinks best My 


LETTERS TO THE EDITOR 


Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Letters transmitted should be dearly typed and not hand written. Please set fox for finest resohitiou 


Bribery law change 
in EU would remove 


Universal private pension 
plan has powerful support 


blight on business 


From Mr Peter Eigen. 

Sir, Andrew Taylor writes of 
the European Commission's 
raft of court actions to outlaw 
unfair practices in the award- 
ing of public sector contracts 
within the European Union 
(“Brussels gets tough on public 
contracts”, November 23). 

Admirable though these 
moves are they overlook one 
particular anomaly: it is 
against the law if you bribe an 
official in your own country, 
but not if you do it in your 
next-door-neighbour’s. And 
you may or may not get a tax 
break for the bribe you pay to 
an official in your own coun- 
try, but you probably will do so 
if you pay it to an offic ia l in 
another. Ethics apart, this 
must surely be a wholly 
unacceptable states of aff- , 
airs. i 

The EU would do well to | 
implement the OECD recom- 
mendations of May 1994 and 
criminalise foreign corrupt 
payments and tax deductibility 


for fibril payments, at least as 
between the member countries 
of the Union. 

Then, companies across 
Europe could compete with 
each other on equal terms, and 
without those who hid an their 
home turf having to comply 
with norms from which others 
are exempted. 

Such a move would, at a 
stroke, harmonise the legal 
framework in these respects 
across the EU. Just as impor- 
tant, it would create an oppor- 
tunity for developing countries 
to be judged by the same rules, 
if they so chose. 

It would therefore represent 
a significant stqp towards tack- 
ling, in a positive way, one of 
the greatest blights on busi- 
ness of contemporary times. 
Peter Eigen, 
chairman. 

Transparency International, 
Hardenbergplatz 2, 

D-10623 

Berlin, , 

Germany 


BT free to choose on fibre 


From Mr Ian Wheeler, 

Sir, Regarding BT’s exclu- 
sion from entertainment ser- 
vices and the superhighway, I 
have yet to read such an Hi-in- 
formed debate as has raged 
over this particular technology 
in your pages and elsewhere. 

Fibre cables are cheap, pas- 
sive and they deliver unlimited 
“band width" - the measure of 
capacity for signals. The cost 
and speed of laying a fibre net- 
work is dominated not by the 
electronics connected at either 
end, nor the fibre itself, but by 
the construction of the under- 
ground ducting in which they 
lie. 

An entirely new network of 
ducts is being installed in the 
UK by the new “local delivery” 
franchisees. These ducts bring 
a fibre to within 60ftm of every 
residential home. Nowhere else 
in the world, to my knowledge, 
are fibre networks being cre- 
ated at this proximity to the 
customer, even in the birth- 


place of the “superhighway”, 
the US. 

BT does not have to dig- ft 
inherited its ducts free of 
charge. BT does not need a law 
or permission to install fibre 
into its ducts. BT has the free 
choice to bring fibre to within 
600m of each home and 
whether to connect Its new 
fibres to you or me. 

As an aside, BT is the local 
delivery franchisee for the City 
of Westminster. It operates a 
fibre-based entertainment net- 
work. hi this franchise fibres 
were laid in existing BT ducts 
several years ago. 

Strangely, in the City of 
Westminster residential cus- 
tomers have a single source of 
telephone line connection, 
guess who? Well, it owns the 
ducts, doesn’t it? 

Ian Wheeler r 
consultant engineer, 

28 West Drive, 

Ferring, 

West Sussex Btm SQY 


FromFrank Field MP, 

Sir, Ton report .("Pensions 
body wants saving to be com- 
pulsory”, November 18) the 
support the National Associa- 
tion of Pension Ponds has 
given to a reform which Mat- 
thew Owen and I proposed 18 
months ago (Private Pensions 
far AH Fabian Society). The 
initial reaction to the idea of 
instigating universal private 
pension provision was met by 
two substantial criticisms. 

Those politicians who ideo- 
logically opposed the idea 
never answered the question 
we posed. Large numbers of 
people are in private schemes. 
How then can we equalise 
opportunities? The only sensi- 
ble way forward is to have uni- 
versal private provision, and 
the only way to do this is 
through a compulsory scheme. 
We are pleased that this 
approach has been backed by 
the Social Justice Commission. 

Some members of the 
National Association of Pen- 
sion Funds made practical crit- 
icisms. Our 10 per cent com- 
bined contribution was too low 
for adequate pensions. We 
therefore proposed that 
employers and employees 
should contribute 18 per cent 
of the salary bill. Now the 
NAPF has backed our original 
figure. Why? 

To what extent is the 
NAPF's decision a soft-sell 
approach to employers, or a 
belief that a voluntary top-up 1 
would naturally occur? What 
range of pensions would be i 
produced from these savings j 
running alongside the state 
scheme? , 

Barry Riley highlights I 


("Waking up to the. pension 
scheme threats”, November 23) 
concern about the underfund- 
ing of pension schemes. We 
have fried to cover this point 
too. Taking Joel Joffe's idea for 
a new savings scheme, we 
suggested it should be made 
universal by establishing a 
National Pensions- Saving 
Scheme. This would he sepa- 
rate from the state, would form 
a new kind of collective action, 
and would allow savers to own 
their own savings. 

Our suggested reform could 
not lead to underfunding as in 
final salary schemes. In addi- 
tion, mobile employees would 
gain, a level playing field, 
knowing in advance the mini- - 
mum pension contributions 
they would be expected to 
make and would not, as many 
of them now do, enter drtailed 
negotiations -to see whether the 
pension scheme of the com- 
pany they hoped to join might 
produce pension benefits equal 
to their current scheme. 

Support for the idea, of unz- - 
versal private pension provi- 
sion to run alongside the state 
scheme, and to make contribu- 
tions to both schemes compul- 
sory, has won powerful. affies 
over the past year. But the. 
debate is not an academic exer- 
cise, I hope that before the 
next year is out your columns' 
will be reporting that both 
Labour and the Liberal Demo 1 j 
Crate are backing this proposal. 
Voters will then have a clear 
choice on reforming one of the 
big areas of welfare reform at : 
the next election. 

Frank Field, 

Bouse of Commons, 

London SW1A OAA. 


Who’s really in charge? 


From Dr J B Mulvey. 

Sir, According to Robert Pes- 
tan (“Treasury drops dividends 
probe after pressure”, Novem- 
ber 24), quoting a “senior gov- 
ernment official”, the Trea- 
sury's inquiry initiated by 
financial secretary Stephen 
Doreen fast year Into whether 
high dividend payments were 
responsible for inadequate 
investment has been aban- 
doned. The government official 


revealed that "ft became 
too much of a hot potato after 
Lord Hanson attacked 1 the 
review”. 

Can we he told who is the 
real First Lord of the Treasury, 
John Major or Lord Hanson? 

J H Mulvey, 
executive secretary. 

The Save British Science ’ . 
Society, .- : 

Baxm, ' ; 

Oxford OXl 3QQ , 


* - 

fi> A 




jllian 


UK arms exports at odds with ‘good governance’ objectives 


From Mr Tony German. 

Sir, The debate about entan- 
glement between arms and aid 
has to date missed an impor- 
tant point 

Some policy makers and 
opinion formers seem to be 
assuming that as long as there 
are no more explicit links 
between aid and arms exports, 
government policy 1$ quite 
coherent But last year, along 


with other OECD donors, 
Britain approved a set of policy 
orientations which, Inter alia, 
urged donors to examine con- 
tradictions between their aid 
and development cooperation 
objectives and other external 
policies, “including the promo- 
tion of exports of arms”. 

The UK has been in the fore- 
front of promoting “good gov- 
ernance", urging developing 


countries to reduce military 
expenditure. What steps has 
the government taken to scale 
down Britain's role as a lead- 
ing arms exporter, in a wav 
that wffl minimise the negative 
impact on exports and jobs? 

The foreign secretary's 
assurances that arms and aid 
J** tiriftd during 

ft *“2 welcome! 

The next step should be for the 


government to make', dear 
how, both domestically hnd 
multilaterally, ' it plans- to 
(jddress the gulf between foe 
good governance" aspect of 
foreign policy and Britain’s 
contin u ed promotion of arms • 
in developing countries^ . 
Tony German. 

OM Westbrook Farm, ' 


Somerset EA4 GDS 


I chai 

Hiiteh 




-V:'-. 


. ; 

-V/V 


X'**.. r . 




u* ! 





FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 


19 


* 


FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Tel: 071-873 3000 Telex: 922186 Fax: 071407 5700 

Tuesday November 29 1994 


Save the 
alliance 


The international community 
could not save Yugoslavia, and it 
has failed to save Bosnia. That 
failure has hovered like an evil 
fairy over the cradle of the Euro- 
pean Union. Along with the paral- 
lel failure in Somalia, it has 
blighted efforts to make a revived 
United Nations the centre of a 
new world order. And it now 
seems to threaten a death blow to 
the ageing Atlantic alliance. 

it is too late to save Bosnia as 
an effective country in its original 
frontiers. But Nato might still be 
saved - though it is desperately 
vulnerable - and it is worth sav- 
ing. 

Nato is vulnerable because, with 
the demise of the Soviet threat, it 
has come to be seen as a luxury 
rather than a necessity by many 
people on both sides of the ocean. 

That may not be such a bad thing 
if it leads Europeans to take Nato 
less for granted than they did In 
the past, and so to think more 
seriously about what they them- 
selves can and should do to ensure 
their own security. But it would 
be no less criminally irresponsible 
Tor Europeans to imagine that 
the; can easily do that without 
any assistance or co-operation 
from the US, than it is for them to 
assume that such assistance will 
always and inevitably be forth- 
coming. 

That is why tbe alliance is 
worth saving, even at the cost of 
some national pride and self- 
righteousness. No major power, 
after all, has any right to feel 
proud or self-righteous about the 
situation in Bosnia. Britain and 
France are much given to remind- 
ing the world that they, unlike the 
US, have troops on the ground. 

But the events of the last week 
have cruelly demonstrated, once 
again, that those troops are 
deployed not as an instrument of 
policy but as a substitute for one. 

Sorry mix 

The US is equally prone to 
accuse the Europeans of betraying 
the Bosnian government and 
appeasing the Serbs. But it has 
never shown convincingly that it 
was able or willing - to help the 
Bosnian government redress the 
imbalance of fores on the ground. 

US policy, like European policy, 
has been a sorry mix of indecision, 
rhetoric and gesture. 

Senator Robert Dole, to whose 
words the mid-term elections have 

All change in 
Whitehall 


given an authority equal to, if not 
greater than, that of President 
Clinton himself, has now called 
for the withdrawal of the UN pro- 
tection force (Unprofor), arguing 

that its presence serves merely as 
a pretext for Britain and France to 
oppose any effective Nato inter- 
vention from the air. Those pow- 
ers. and other troop contributors, 
will be sorely tempted to take him 
al his word. 

Undeserved blame 

The troops, whose mandate con- 
tains almost as many contradic- 
tions as it does Security Council 
resolutions, are getting a great 
deal of undeserved blame for not 
carrying out a task For which they 
are not equipped, namely holding 
back the Serb offensives and 
counter-offensives. They are cer- 
tainly not saving Bosnia They are 
saving an unknown number of 
individual Bosnian lives, but pos- 
sibly at the cost ol others if you 
believe (as many do) that tbeir 
presence prolongs ■ ie war. 

It is never the ri; ; ht time to pull 
the troops out. T'teir departure 
could easily provol j a resumption 
of fighting throughout Bosnia and 
even beyond - though there is no 
guarantee that this will not hap- 
pen anyway. It may also be vio- 
lently opposed by one or more par- 
ties to the conflict And it could 
easily be accompanied by even 
more bitter mutual accusations 
across the Atlantic than we have 
already heard. Those are all 
strong arguments against with- 
drawal now - except that the dif- 
ficulties are likely to get greater 
rather than less if more time is 
left to elapse. 

Only the risk of jeopardising a 
real hope of peace would be a con- 
vincing argument for keeping 
Unprofor in place. And the only 
ground on which such hope can 
now be based is the acceptance of 
the Contact Group partition plan 
by both the Bosnian and Serbian 
governments, and the pressure 
exerted by Serbia on the Bosnian 
Serbs to do likewise. If this pres- 
sure is not seen to bear fruit 
within days,, or at most weeks, the 
Serbs and their Russian protectors 
must understand that removing 
Unprofor and lifting the arms 
embargo will become unavoidable 
for the west irrespective of its 
effect on Bosnia, because it will be 
the only way to save the Atlantic 
alliance. 


though often disparaged at 
me for its unashamed elitism, 
i tain 's civil service used to be 
e envy of the democratic world, 
now faces an uncertain future, 
d could be seriously weakened 
the government fails to tackle 
oblems created by a decade of 
pid structural and cultural 
ange in Whitehall. 

[n -a report published last week. 
? all-party Treasury and Civil 
rvice committee of the House of 
immons questioned the ade- 
acy of existing mechanisms for 
holding the ethical standards or 
s civil service. The committee 
commended a statutory code of 
lies setting out tbe duties of 
dl servants and the responsibiii- 
$ of minis ters. 

[t also called for a reformed 
vil Service Commission with 
;mbers drawn largely from o id- 
le Whitehall: and for reforms in 
e relationship between parlia- 
»nt and the semi-autonomous 
ext steps" agencies which over 
e past five years have taken 
er most of Whitehall's service- 
livery responsibilities, 
rhese proposals are timely and 
ould be implemented. The com- 
irtee cited Gladstone’s dictum 
at the British constitution “pre- 
mes more boldly than any other 
aMod faith of those who work 
1 Recent events, notably the 
mission by civil servants to the 

nns for Iraq" inquiry that they 

afted inaccurate replies for min- 
ers have brought that good 
th into question, and support 
e rase for a code of ethics, 
rhe case is made well-nigh 
perative by the impact of 15 

S one-party rule. When par- 
falterwte regular)? m power 
manent officials have a strong 
r-entive not to mistake party 
nvenience for the national mter- 
l They are under far less pr®* - 

r/to separate tbe two when 
set of poimcal 
Sere for a protracted period. 


Unction between accountability, 
which cannot be delegated by min- 
isters, and responsibility, which 
can, is “uncxmvmdLng”. 

Chief executives of agencies 
should be directly and personally 
accountable to select committees 
of the Commons for the implemen- 
tation of tbeir annual performance 
agreements. It might be advisable 
to go Anther still and give select 
committees a role in the appoint- 
ment of agency chief executives 
and other senior members of 
quangos. Such a step could under- 
pin the political impartiality of 
senior officials in agencies and 
quangos, and do something to 
redress the unhealthy domination 
of government over parliament 
which is a prime cause of much 
existing unease. 

Contradictory signals 

However, current Whitehall 
reforms beg two larger issues. Is 
tbe government committed to tbe 
continuation of the career civil 
service? If not, how does it intend 
to ensure that the senior civil ser- 
vice is schooled in the standards 
and ethics which today's officials 
mostly accept from long training? 

Minis ters are sending out con- 
tradictory signals in response to 
the first question. On the one 
hand, they pay lip service to open 
competition for top jobs, and are 
pressing forward with “market 
testing" and cuts in the number of 
senior officials; on the other hand, 
they appear reluctant to advertise 
many top jobs outside Whitehall, 
let alone to adopt the New Zea- 
land practice of short-term con- 
tracts for senior officials inside 
mainstream departments. 

Ministers must make their 
intentions clear. The official-for- 
life mentality of most civil ser- 
vants has hitherto provided a crit- 
ical underpinning for the ethics 
and political neutrality of White- 
hall It has also limited - although 
not banished - the “revolving 
door" problem of officials anx- 
iously seeking outside jobs. 

If Whitehall is. by contrast, to 
provide short career stops for an 
elite of high-flyers who commute 
between the public and private 
sectors, then far more attention 
will have to paid to questions of 
recruitment, pay and conflicts of 
interest. A statutory code of ethics 
would only be a first step towards 
reform. 


All for a share 
in democracy 

Political uncertainty in Italy is not expected to halt the 
country’s privatisation programme, says Andrew Hill 



jpubfic offers 


Date Stake Amount 
add ■ raised 
(lira bn) 


Credito ttafiano . 

;..;Bwiking December 1993 67% -• 1,900 


January 1994 33% 2,400 


Sanca Commerci al e Itafiana 


■Banking 


Fabtuaiy 1994 54% 2JBD0 


June 1994 47% 4,500 


1996 


<«** 

>1 : -T Btecamminicat/ans 1995 


. Bw 

; .Enargy/chemtcab 7995? 


Lamberto Dior, treasury minister 


N obody ever said sell- 
ing off Italy's sprawl- 
ing public sector 
would be easy, and in 
the past eight months 
a change of government, political 
infighting, and stock market fragil- 
ity have complicated the task. 

However, it will be a bitter irony 
if tbe latest and most serious gov- 
ernment crisis dentils the pro- 
gramme, because in the last two 
months the momentum of the 
sell-off has picked up again. 

In late September. Mr Silvio Ber- 
lusconi, Italy's prime minister, bad- 
gered by institutional investors for 
a firm signal on privatisation, out- 
lined a revised timetable. 

The government has since finally 
found a buyer for the last morsels 
of SME, the state-owned foods, 
supermarket and catering group, 
which has taken nearly two years 
to dismember and selL It bus 
appointed an international adviser 
for the sale of further shares In 
Stet, the telecommunications hold- 
ing company. A committee of the 
upper house of the Italian parlia- 
ment last week agreed a framework 
for independent regulation of priva- 
tised I talian utilities. Most impor- 
tantly, ministers have proposed a 
two-stage privatisation of Enel, one 
of the world’s biggest electricity 
companies, from mid- 1995. 

A simultaneous effort by the gov- 
ernment to stimulate d emand for 
shares, by encouraging the estab- 
lishment of investment funds and 
pension funds, is raising hopes that 
the state-sector culture in Italy is 
changing. “Demand for 'real shares’ 
will come from Italian mutual funds 
not from small savers," says Mr 
Gianmario Roveraro, managing 
director of Akros Finanziaria, 
a growing financial services 
group. 

One reason for the hiatus in the 
privatisation programme was the 
inexperience of the new govern- 
ment Of the Treasury. Budget and 
Industry ministers, who are directly 
responsible for detail of privatisa- 
tion, only Mr Lamberto Dini, the 
Treasury minister, was at all famil- 
iar with the procedure of commit- 
tee, cabinet and parliamentary 
approval. It was he who signed the 
documents permitting the June pri- 
vatisation of Ina. the Treasury- 
owned insurer, the only public offer 
of state-held shares under the Ber- 
lusconi government to date. 

The delay was not particularly 
worrying. Mr Berlusconi’s predeces- 
sor. Mr Carlo Azeglio CiampL was 
also criticised for failing to imple- 
ment tbe July 1992 privatisation 
decree quickly - until late last year, 
when he initiated a flurry of share 
offers in state-controlled banks. 
Moreover, new ministers had the 
crucial 1995 budget to worry about 
and, as one analyst puts it. “it's 
better that the big privatisations 
should be done well, than that they 


should be done in a hurry”. 

What unsettled the markets and 
the managers of state-controlled 
companies was the way some in the 
new government put a party politi- 
cal spin on the debate when it came 
into office in May. 

This was partly because new min- 
isters and members of parliament 
wanted to stamp their mark on pri- 
vatisation policy, but also because 
of dear divisions wi thin the coali- 
tion. For example, the populist 
Northern League wanted to see the 
rapid break-up and sale of state 
companies, encouraging competi- 
tion that would benefit private 
industry and finan ce in tbe north of 
the country. The Car-right MSI/Na- 
tional Alliance resisted the rapid 
break-up of state monopolies, 
partly, opponents claimed, in order 
to install its own supporters in 
board or senior management posi- 
tions prior to privatisation. 

These factions staked out posi- 
tions at every level of policy, from 
the debate on regulation or share- 
holder structure to the choice of 
banks to co-ordinate tbe 
sales. 

Top managers in state industry 


now say they are being left to get 
on with preparing for privatisation, 
and advocates of a controlled and 
politically neutral reduction of the 
state’s presence seem happy again. 
“At the beginning and in tbe first 
months [of this government] there 
was strong pressure to go back to 
the old system,” says one manag- 
er."All of a sudden, that pressure 
has faded out” 

That may be a sign that disrup- 
tive elements in the new govern- 
ment are settling in, or possibly 
that they are too distracted by cri- 
ses to worry about shaping privati- 
sation policy to their own ends. 

The Treasury and managers of 
the state-owned companies do not 
believe current political turmoil 
will halt the programme. No main- 
stream party actively opposes priva- 
tisation. At issue has been its tim- 
ing and form. And both the 
government and IRL tbe state hold- 
ing company that controls Stet, 
need tbe proceeds to reduce debt 

But the replacement of key minis- 
ters, a change of coalition, or even a 
general election, could seriously 
delay the tough timetable set by the 
current administration. And even if 


Sourctt OonrpaMtei 

the existing coalition survives, the 
task is not easy. 

For example, although ministers' 
agreement on a plan for the sale of 
Enel was hailed as progress, the 
proposed structure of the group 
reflects an uneasy compromise 
between feuding coalition members: 
the Northern League wanted to 
break up the company and allow 
tariffs to vary across tbe country; 
and the National Alliance, with the 
support of Enel management and 
trade unions, backed an integrated 
group and single- tariff structure. 

Under the government plan, there 
will be a single tariff. But before 
launching a first tranche of Enel 
shares around the middfa of next 
year, the generating activities 
(accounting for 80 per cent of elec- 
tricity produced in Italy) will have 
been hived off into one or more 
wholly-owned subsidiaries, in prep- 
aration for the sale of production 
capacity within three years. 

This formula risks displeasing alL 
Enel unions staged a one-day strike 
last week and opponents could 
delay parliamentary approval of a 
single authority to regulate the sec- 
tor, setting back the timetable. 


Furthermore. Enel’s estimated 
market capitalisation of L20,000bn- 
L30,000bn (fll^bn) would make it 
one of the largest companies on tbe 
Milan stock market, which could 
mean small Investors find it diffi- 
cult to digest. Tbe other candidates 
for privatisation next year - Stet 
the telecoms holding company, and 
the AgjpfSnam energy activities of 
the state holding company, Eni - 
are almost as big. The government 
also wants to complete privatisation 
of IMI, the financial services and 
banking group, and Ina. 

The sale of shares in stale-con- 
trolled banks in late 1993 and early 
this year went well, but they were 
already quoted and the market was 
buoyant The sale of nearly 50 per 
cent of Ina, owned by the Treasury, 
was received less enthusiastically, 
and post-sale trading was sluggish. 

A solution would be to sell thin- 
ner slices of Stet and Enel, possibly 
only 10 per cent. But that would 
prolong uncertainty for tbeir man- 
agements - a particular concern at 
Stet and Telecom Italia, its operat- 
ing arm. as they need to give firm 
guarantees on future ownership to 
attract international partners. 

T he second problem with 
partial privatisation is 
that it could put a brake 
on the cultural change 
that the sell-off was sup- 
posed to stimulate. Already the pio- 
neers of shareholder democracy in 
Italy - small investor associations, 
employee shareholder groups and 
their advisers, for example - allege 
the government has not done its 
best to release former state compa- 
nies Into the free market. 

In tho rata* of in.-i , for example, 
they claim the insurance company’s 
board is still under the control of 
the Treasury, which appointed 10 of 
Ina's 13 directors, after privatisa- 
tion. They also claim that Medio- 
banca, the Milan merchant bank, 
has extended its influence over the 
former state-controlled banks, 
Banca Commerciale I tali ana, and 
Credito Italiano, to the detriment of 
small investors. 

The Treasury believes it can show 
its willingness to relinq uish control 
by removing Us direct representa- 
tives from the boards of former 
state companies, even partially pri- 
vatised ones, as it has done at Ina. 

But that is unlikely to satisfy the 
most zealous priva Users. For them, 
only a convincing attempt to diffuse 
ownership of Italy’s largest compa- 
nies will do. As one Italian invest- 
ment banker puts it: “Up to now, 
I talian industry has been managed 
by the Agnellis, De Benedettis, and 
Ferruzzis, and at the end of the day 
by Mediobanca - plus the state. If 
you don't have more players, you 
don't have a shareholder democ- 
racy, and that should be the main 
macroeconomic goal of the privati- 
sation programme." 


Bruce Clark argues that the UK could learn from French diplomacy over Bosnia 


Diplomatic baggage 


E vents in Bosnia have 
brought home how much 
Britain has to learn from 
France about foreign pol- 
icy presentation. 

The two countries have almost 
identical attitudes to the conflict, 
driven by an almost identical mix- 
ture of considerations. 

Both countries want to stop the 
war spreading; to wean the Serbs 
off chauvinism and reintegrate 
them into the European main- 
stream; to avoid looking bad in the 
eyes of an Islamic world concerned 
about the fate of the Bosnian Mos- 
lems; and to avert a humanitarian 
catastrophe. 

Unlike the US, both London and 
Paris are more concerned with con- 
taining the war than with “punish- 
ing the guilty” or imposing a fairer 
partition. 

Both would agree that the status 
quo in Bosnia gives a disproportion- 
ate advantage to the Serbs, but nei- 
ther believes that imposing justice 
is worth the tens of thousands of 
lives - and tbe breakdown of rela- 
tions with Russia - that full-blown 
war against the Serbs could cost 
From an identical mixture of con- 
siderations, an almost identical mix- 
ture of policies has flowed: the 


maintenance, as long as possible, of 
a small peacekeeping force in Bos- 
nia that eases suffering and frus- 
trates - both directly and indirectly 
- the outbreak of full-scale war; the 
exercise, by economic and diplo- 
matic but not military means, of 
pressure on the parties to compro- 
mise. 

Why, in that case, has Britain 
become the object of loathing 
among Bosnian officials and pro- 
Bosnian US politicians, while 
France is growing in diplomatic 
prowess? 

Asking this question is not just 
an exercise in petty cross-Channel 
bickering. At stake is Britain's 
long-term diplomatic credibility - 
its much-vaunted ability to “punch 
above its weight" in international 
affairs. 

The mayor of Bihac. the Bosnian 
town beseiged by Serbs, refuses to 
speak to British reporters. Senator 
Robert Dole, the new majority 
leader in the US senate, blames "the 
British and the French, particularly 
the British" for tbe situation in the 
Bihac enclave. 


General Sir Michael Rose, the 
British commander of UN forces in 
Bosnia, is a hate-figure for the Bos- 
nian government, while his French 
boss General Bertrand de Lapresle 
- whose thinking is virtually identi- 
cal - is not. 

How have the French done it? 

The answer, put simply, is that 
they are far better than Anglo- 
Saxons at holding two almost irrec- 
oncilable positions at once, and also 
at striking rhetorical poses that 
bear little relation to reality. 

Britain and France have made 
precisely the same analysis of the 
situation in Bihac. 

As both countries see it, it would 
be a bad turn of events if the Serbs 
were to overrun the Bihac enclave. 
Tbe fact that they may now do so is 
seen as an undesirable consequence 
of an ill-judged Bosnian government 
offensive. 

But the consequences of yielding 
to US demands for an all-out air 
attack on Serb positions around 
Bihac are judged even more unde- 
sirable in both London and Paris: it 
was felt there would be too high a 


chance of hitting the wrong people. 

So far, so much Anglo-French 
consensus. But when it comes to 
policy presentation, the differences 
between Gallic flair and 
Anglo-Saxon phlegm start to show. 

France staked out the moral high 
ground by proclaiming: “Bihac 
must not be allowed to fall!" Britain 
was true to its plodding, empirical 
self by making the - undeniably 
accurate, but gloomy - observation 
that Bihac might fall. 

If Bihac does now fall, the world 
will say that it was not for lack of 
French trying; if that outcome is 
somehow prevented, Paris will 
claim a share of the glory. 

As for the French penchant for 
holding two contrasting positions at 
once, it is demonstrated by Paris's 
ability to sound both more pro-Serb 
and pro-Moslem than London. 

In September, while British offi- 
cials were sternly stressing the 
absolute unchangeability of the 
existing peace plan for Bosnia, 
France floated the idea that the 
Bosnian Serb zone should have con- 
federal relations with Serbia. That 


idea - heresy at the time - has been 
resurrected this week. 

France has balanced the effect of 
these pro-Serb statements by mak- 
ing high-sounding commitments to 
the security of Bosnia's Moslem 
enclaves, which are music to the 
ears of Senator Dole. 

Mr Alain Juppe. French foreign 
minister, makes weighty pro- 
nouncements such as; "Europe can- 
not enjoy stability and peace in a 
context of confrontation with 
Islam... What is at stake in Sara- 
jevo is the possibility of an open 
and tolerant Islam.” 

With the gnat sweep of French 
strategic thinking, he “rejects the 
inevitability” of division in Europe 
between the Catholic, Orthodox and 
Moslem worlds. “France’s historical 
mission, from Richelieu to General 
de Gaulle, is to reject barriers 
erected in the heart of the conti- 
nent,” be has proclaimed. 

A British minister who said some- 
thing like that would be lampooned 
in satirical magazines. But to judge 
by the success that Fiance's lofty 
rhetoric seems to enjoy, London 
ought to be sending its brighter 
young diplomats off to the grandes 
Scales for a refresher course on Des- 
cartes and Voltaire. 


Observer 


Uneconomic 
in quotes 

■ Without wishing to proffer 
needless encouragement to 
garrulous economists on this of all 
days, non also happens to be open 
season for the FTs fame ratings - 
an exercise in its third year which 
ranks UK economists according to 
the frequency or their mentions in 
domestic newspapers over the past 
12 months. 

Surprise vaulter to pole position 
for 1994 is last year's number 12, 
Simon Briscoe, an ex-Treasury 
number cruncher at S.G. Warburg, 
whose mastery of the ready quote 
earns him 221 mentions. He has 
thrashed - by 70 plus points - the 
next placed economist, Gavyn “wise 
man” Davies of Goldman Sachs. 
Davies, third in 1993 and top the 
year before, put in a sturdier 
performance than other members of 
the chancellor's team of “wise 
men", with Tim Congdon slipping 
from first to ninth. Wynne Godley 
and David Currie - who both leave 
Clarke's panel at the end of next 
year - come in at 17th and 35th, 
down from fifth and 12th 
respectively. 

If the chancellor cared to run the 
fame metre over prospective new 
wise men, he would observe the 
needle flickering above Citibank's 
Nell Mackinnon, in third place from 
eighth, and Salomon's Michael 
Saunders, who climbs up 11 places 
to sixth. But watch out for HSBC's 


Ian Shepherdson, who has leapt an 
unheard-of 23 rungs of the ladder to 
fourth spot. By contrast, BZWs 
Derek Scott the new economic 
adviser to Labour leader Tony 
Blair, still seems to be having some 
difficulty getting his message 
across. He remains stuck at 48th, 
albeit one place above Colin Mowl, 
the Treasury's chief forecaster. 


Wisdom check 

■ Which still begs the question as 
to how Kenneth Clarke actually 
puts to best use the wise men he 
Inherited from his predecessor 
Norman Lament. 

The six have already been 
downgraded since the chancellor 
now only wishes to read two, rather 
than three, of their reports a year. 
At the same time, it is their 
misfortune that their sagacity was 
sought during a period in which the 
Treasury’s own forecasting record 
has improved from dismal to not 
too bad. 

Judging by the forecasts issued at 
Budget time last year, tbe wise men 
have not cornered the market in 
economic wisdom. Cambridge 
University's Wynne Godley, for 
instance, was forecastinggross 
domestic product growth at LB per 
cent for 1994, against a probable 
out-turn of 3.54 per cent. And 
Andrew Britton, director of the 
National Institute of Economic and 
Social Research, was predicting an 
inflation rate (minus mortgage 
Interest payments) of 4J> per cent 



Tm sorry you're being bullied 
at work' 


for the fourth quarter of 1994, when 
the equivalent figure for the 12 
months to October this year was 
actually a mere 2 per cent. 

Meanwhile, Observer’s own 
forecast is that the wise men will, 
wisely, be increasingly called upon 
to deliver their wisdom in the form 
of policy prescriptions rather than 
hard numbers. Much wiser. 


Unsound bite 

■ This is the tale that stops the dog 
wagging. As Observer reported last 
week, Beijing's city fathers are 
trying to bring in draconian laws to 
curt dog-ownership. 


But the dogs only have 
themselves to blame; last year in 
Beijing alone 52,000 people were 
bitten. Now The Workers' Daily has 
reported that in the past six years 
some 60,000 people have died of 
rabies throughout China. 

This suggests a dog-bites-humans 
problem on a fairly big scale, but 
then numbers in China are always 
mind-stretching. It seems there are 
more than 100m dogs in China, of 
which a mere 10m are pets, and the 
remainder are bred to be eaten. No 
wonder the; want to get then- 
retaliation in first 


Never say neigh 

■ Bad news for John Major - 
facing a possn h te challenge for the 
Conservative party leadership 
tomorrow if disgruntled 
backbenchers can rustle up 
signatures from 34 of their 
colleagues. Sir Anthony Meyer, the 
indomitable “stalking horse” who 
challenged Margaret Thatcher in 
1989, was spotted celebrating 
Albanian national day at a swish 
London hotel yesterday. Questioned 
on whether he fait up to another 
tilt. Sir Anthony seemed very keen. 


Plagued 

■ Already near the top of the list of 
those whom everyone loves to hate, 
Britain’s ftmdholding family 
doctors and their managers can be 
forgiven for feeling even more 


unloved after their annual 
' get-together at Stratford-upon-Avon 
last week. 

No politician would come near 
them. David Blunkett who had 
originally been scheduled to deliver 
the keynote speech, was moved to 
education in October's shadow 
cabinet reshuffle, and Margaret 
Beckett, who took up the health 
baton, was otherwise engaged. No 
substitute could be found to detail 
the party's implacable opposition to 
the concept of fundholding. 

And what of the Conservatives? 
They too were unable to find a 
substitute for the originally 
advertised Clive Froggatt, a 
Cheltenham GP and early 
proponent of giving doctors tbeir 
own budgets. He has other things 
on his mind nowadays, such as 
talking to the local constabulary 
about alleged drugs offences. 


Blacked 

■ British Coal may be out of 
business by Christinas Eve but it 
still seems to have a few scores to 
settle. Gerard McCloskey, the editor 
of several financial Times 
newsletters on coal, currently 
engaged in some acrimonious 
exchanges with RJB Mining, algo 
seems to have upset Neil Clarke, 
British Coal’s outgoing chairman. 
McCloskey has been dropped from 
the guest list for British Coal's last 
Christmas lunch for journalists. 
Come on lads, isn't it time to bury 
the hatchet? 



20 




■ *■, sr ■ ■ » • 
•vitf-.* • 








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Structured Networking Solutions 
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FINANCIAL TIMES 

Tuesday November 29 1994 


Carrying the 
nation's goods 


■ ■- 

. y r 


Israel condemns move as premature without a peace treaty 


THE LEX COLUMN 




EU lifts Syrian arms embargo ABC’s star 




By David Gardner and Emma 
Tuctor tn Brussels 


Hie European Union is lifting its 
eight-year embargo on sales of 
arms to Syria. 

The decision, announced by EU 
foreign ministers when they met 
a Syrian government delegation 
in Brussels last night, was imme- 
diately condemned by Mr Shimon 
Feres, Israel's foreign minister. 

Mr Peres, also in Brussels, said 
the embargo should be aban- 
doned only if Syria was willing to 
negotiate peace with Israel, 

“Before the Syrians move, why 
lift . . . the embargo? Let them 
move and maybe then there 
won’t be a need for an arms 
embargo,” Mr Peres said. The 
ban was imposed in 1986 after 


allegations of Syrian involvement 
is a thwarted attempt to smuggle 
explosives on to an El A1 air- 
liner. 

Ot he r sanctions, such as bans 
on low-level diplomatic meetings, 
were gradually lifted between 
1987 and 1990, when Syria sided 
with the West in the Gulf war. 

Mr Peres and Mr Yassir Arafat, 
r frairman of the Palestine Libera- 
tion Organisation, made some 
progress yesterday towards 
resolving differences over the 
Palestinian peace process. 

The two, visiting Brussels on 
the eve of an international donor 
conference intended to speed up 
aid flows to the Palestinian 
authority in Gaza and Jericho, 
emphasised that recent violence 
in the Middle East would not be 


allowed to destroy progress made 
so far. 

“We will make this peace pro- 
cess a success," Mr Peres said. 
“We will not stop en route." 

Neither side was particularly 
forthcoming on the issues divid- 
ing them, including IsraeU delays 
in withdrawing from the West 
Bank and its action in sealing of? 
Israel to Palestinian workers resi- 
dent in Gaza, or the delays in 
holding elections in the Palestin- 
ian territories. 

Referring to the recent bloody 
clashes between Islamic funda- 
mentalists on one side and Pales- 
tinian police and bis own Fatah 
faction, Mr Arafat said: “ l insist 
on very rapid elections to see 
who has the support of the peo- 
ple - Hamas or Fatah?*' He con- 


tinued: “In my opinion the 
Israelis understand our need for 
a quick election, but at the same 
time we have to understand their 
necessity for security, which is 
one of their main items.” 

Mr Arafat said that the most 
important thing for the Palestin- 
ians was that all donors should 
keep their promises, pointing out 
that they had so far only received 
a fraction of the total that had 
been promised. 

EU foreign ministers were last 
night meeting Mr Farouk al-Shar- 
a'a. the Syrian foreign minis ter, 
as part of their effort to expedite 
and widen the Middle East peace 
process. 

There were no signs last night 
of any direct contact between Mr 
Peres and Mr al-Shara'a. 


Norway seen 
to vote ‘no’ 
in EU poll 


Spain hit by air chaos as 
Iberia plan sparks strike 


Continued from Page 1 


By Tom Buns in Madrid 


persuade the nation that, after 
the Cold War, Norway must play 
a foil part in Europe's political 
and economic mainstream. 

Although she has staked much 
of her government’s reputation 
on winning a Yes vote, Mrs 
Bnmdtland has said she win not 
resign if the vote goes against 
membership. 

lhe Labour government is in a 
minority in parliament. But the 
opposition is splintered, with no 
other party tn a position to form 
a government and recent opin- 
ion polls bare shown support for 
Mrs Bnmdtland. 


The government faces a prob- 
lem in the event of a narrow Yes 
victory. The opposition Centre 
party and Socialist Left party, 
the leaders of the No campaign, 
have threatened to block ratificar 
turn of EU entry in parliament 
unless a large majority is in 
favour throughout the country. 

Mrs Bnmdtland suggested she 
will dissolve parliament and call 


Airline management and unions 
were locked in crisis talks last 
night in an attempt to prevent 
Iberia, Spain’s national carrier, 
sliding into bankruptcy. Strikes 
in all domestic airports in 
protest at proposed cost-cutting 
measures brought air traffic in 
Spain to a virtual halt, leaving 
tens of thousands of passengers 
stranded. 

The airport chaos hi g hli g hts a 
bitter confrontation over Iberia’s 
plans to slash costs. The dispute 
threatens to disrupt the govern- 
ment of Mr Felipe Gonzalez and 
strain Spain's relations with the 
European Commission. 

Iberia is struggling under the 
financial burden of an ambitious 
expansion into Latin America, 
where it has bought substantial 
shareholding s in three local car- 
riers, including Areolineas 
Argentines. Iberia has FtalSObn 
(SiJSbn) of accumulated losses 
and says it faces bankruptcy 
early next year unless it pares 
costs and receives fresh state aid 


of some Ptal30bn. However, any 
capital injection by the govern- 
ment requires authorisation from 
the European Union. In 1992. 
Iberia was allowed a subsidy of 
PtaZ20bn on condition it did 
not apply for more aid until 
2996. 

Last night's talks were dealt an 
early blow when representatives 
of the pilots union walked ouL 
The pilots fear they will bear the 
brunt of Iberia's planned salary’ 
and job cuts and are seeking the 
removal of its chairman. Mr 
Javier Salas, as a condition of 
any agreement 

Mr Salas said failure to agree a 
15 per cent pay cut would mean 
the immediate sacking of 5,000 
employees - 20 per cent of 
Iberia's workforce - and the 
break-up of the airline. 

“This meeting represents the 
last chance to maintain Iberia 
in its present form,” he 
said. 

The unions, representing cabin 
crews, ground staff, mechanics 
and other employees, said wage 
cuts should be limited to 8 per 


cent and strongly weighted 
towards the higher paid. They 
said they would continue to dis- 
rupt Spain's air traffic if manage- 
ment pressed ahead with the lay- 
offs. 

Some 500 flights to and from 
Spain were cancelled yesterday, 
including all of Iberia's and most 
incoming flights by other Euro- 
pean airlines. In the Canary 
Islands alone, 174 charter flights 
were cancelled. 

“Iberia has for far too long 
depended on hand-outs and 
believed it always bad a safety 
net." said a senior Madrid gov- 
ernment official. “All that is over 
now and these are not conven- 
tional talks about pay. they are 
about the survival of a big com- 
pany." 

In the absence of a restructur- 
ing plan based on the 15 per cent 
wage cuts. Iberia says it will be 
forced to sell off its more 
profitable business units to raise 
capital through dispos- 
als. 


See Lex 


Clarke defends Britain’s EU stance 


By PMUp Stephens 
In London 


Mr Kenneth Clarke, the UK’s 
chancellor of the exchequer, yes- 
terday delivered an uncompro- 
mising defence cl Britain's policy 
towards the European Union as 
the government faced down a 
threatened rebellion by Tory 
Eurosceptics over the Brussels 
budget 

But the debate on legislation to 
allow higher British contribu- 
tions to Brussels once again 
exposed the deep divisions tn the 
Conservative party over Europe. 

Mr Norman Lamont, Mr 
Clarke’s predecessor at the Trea- 
sury, called for Britain to rede- 
fine its relationship with Brus- 
sels even If that meant 
considering the option of with- 
drawal from the EU. 


A group of hard core Euruscep- 
tics was still threatening to 
abstain or vote against the mea- 
sure in spite of a threat of sus- 
pension from the parliamentary 
party. 

In a combative performance in 
which he accused Labour and the 
Liberal Democrats of colluding 


retical Commons majority of 14. 

Rightwing opponents of Mr 
John Major were also still seek- 
ing support for a challenge to the 
prime minister before Wednes- 
day's deadline for the start of 
such a contest 

But dissidents on the left of the 
party made it clear they were not 


Joe Rogaly: life raft for parties 


..Page 18 


with the rebels to wreck an 
agreement which they had 
backed when it was signed at the 
Edinburgh summit two years 
'ago, Mr Clarke said the govern- 
ment was “certain” of victory in 
last night's vote. 

But a decision to suspend - or, 
mure formally, remove - the par- 
liamentary whip from any rebels 
could reduce or wipe out the gov- 
ernment’s already tbeo- 


prepared to add their names to 
the list of those seeking a chal- 
lenge, leaving the rightwingers 
short of the required 34 names. 

Mr Michael Heseltine, the trade 
and industry secretary, had ear- 
lier flatly rejected any suggestion 
that he had any knowledge of 
claims from some in the anti- 
Major camp that a contest could 
pave the way for him to win the 
leadership. 


Mr Clarke strongly defended 
the government's decision to 
make passage of the legislation 
an issue of confidence on which 
tiie government would stand or 
EalL If parliament could not sup- 
port a deal in which a govern- 
ment had given “its solemn inter- 
national commitment" then “that 
government has lost the confi- 
dence of the House and it must 
fall". 

Insisting that the agreement 
would add only £75m ($L23m) to 
Britain’s contributions next year 
- rising to about £250m extra by 
the end of the century - he said 
the accord represented a “per- 
sonal triumph” for Mr Major. 

Mr Clarke's only concession to 
the rebels was to promise 
tougher measures by national 
governments and by the Brussels 
Commission to cut EU fraud. 


FT WEATHER GUIDE 


Europe today 


1010 1020 


High presstro over the North Sea with 

extensions to the Mediterranean and Norway 
will give settled and mainly dry conditions 
over western Europe. Low pressure over 
Russia wOt draw cold Arctic air with snow as 
far south as the Black Sea. In the wake of the 
cold front, the Battle region wifl have variable 
doud and isolated snow showers. Part of the 
cold air mass wffl surge Into north-west 
Europe, where te mp era t ures wil become 
seasonable. Fog patches and tow doud wttl 
be followed by abundant afternoon sun in 
Italy, France and the British Isfes. Western 
Scandinavia and Spain wifi have some 
showers. 


^mV^''1020^1010 100 ° ■ 




P* :•••••. - 8 ' 


Five-day forecast 

The high pressure system wfll slowly move 
towards Poland, maintaining a light to 
moderate cod northerly flow over eastern 
Europe. Central Europe will turn cooler. 
Western Europe wil be influenced by 
in cre a s i ng southerly winds which wffl 
promote sunny spelts and decrease the risk 
of fog. Light frost Is expected later this week 
in eastern Ranee, the Benelux and southern 
Germany. 


I V Ip 0 * 0 ' 









y '■ ’SSzlzJ l 22 . : • • ig 

»ana front uiLrk. CoM front' Wind spoerf lit KP» 


TODAY'S 


TUBES 


Situation at 12 GUT. Temperatures madman tor day. Forecasts by Mereo Consult of the NeAertancfc 


AbuOfwM 

Accra 

Algiers 

Amsterdam 

Athena 

Atlanta 

B. Aires 

BJvsn 

Bangkok 

Barcelona 


Maximum 

Beijing 

sin 

8 

Gances 

sin 

Celsius 

Belfast 

sun 

9 

CBTdtff 

sun 

sun 

30 

Belgrade 

sun 

8 

Casablanca 

sun 

1* 

32 

Balin 

fair 

8 

Chicago 

cloudy 

sin 

20 

Bermuda 

fair 

25 

Cologne 

fair 

f* 

9 

Bogota 

fair 

20 

Dakar 

aun 

sun 

14 

Bombay 

sin 

33 

Dates 

sin 

tok 

T5 

Brussels 

rat 

8 

Delhi 

sun 

cloudy 

24 

Budapest 

fair 

7 

Dubai 

am 

sun 

9 

dhagen 

fair 

8 

DubOn 

sun 

fair 

33 

Cabo 

doudy 

18 

Dufarovnfe 

fair 

doudy 

16 

Capetown 

sun 

29 

Edfnbwph 

fair 


Constant improvement of our service. 
That's our commitment. 


Lufthansa 


29 Faro 

9 Frankfurt 

15 Genova 
3 ObraJtar 
3 Glasgow 

28 Hamburg 
21 Helsinki 
25 Hong Kong 

30 Honolulu 
10 Istanbd 

16 Jakarta 
8 Jersey 

Karachi 
Kuwait 
L. Angelas 
Las Palmas 

Lima 
Lisbon 
London 
UKboug 
Lyon 
Madeira 


18 Madrid 
8 Majorca 

7 Malta 

18 Manchester 
B Mania 

8 Melbourne 
2 Mexico City 

27 Mian* 

28 Mien 

9 Montreal 
31 Moscow 
10 Munich 
31 Nairobi 
21 Naples 
24 Nsssai 
23 ItewYoric 
23 Nice 

15 Nicosia 
10 Oslo 
6 Paris 
9 Perth 
21 Rogue 


13 Rangoon 
17 Reykjavik 
19 Rio 

10 Rome 
31 S- Frsco 
23 Seoul 
22 Singapore 
29 Stockholm 

10 Strasbourg 
1 Sytfriey 

-5 Tangier 
8 Tel Aviv 

35 Tokyo 
16 Toronto 
29 Vancouver 

11 Venice 
16 Vienna 

14 Warsaw 

5 Washington 
1 Weflington 

27 Winnipeg 

6 Zurich 


fair 33 
ram 9 


cloudy 25 
I;* 16 

fair 14 
fair 11 
tiuid 31 
fair 4 

fair 4 


thund 25 
sui 19 


shower 18 
fgt 14 
cloudy 3 


anew -1 
fa k 12 


shower 3 
lair 8 
tab 15 
cloudy -5 
fair 4 


The big US broadcasters have beet 
kept out of television production, for 
several decades. Now theshacfcfes are 
being removed, it is hardly surprising 
they are rushing to get into the busi- 
ness. When there is an opp ortun ity to 
link up with media titans such as Mr 
Steven Spielberg, Mr Jeffrey Kaizen* 
berg and Mr David Geffen, the tempta- 
tion to do so must be irresistible. Capi- 
tal Cities/ABC clearly hopes for a 
string of hit TV shows from the trio, 
which it can then syndicate through- 
out the US. 

The deal may mate sense for ABC. 
But the commercial logic behind net- 
works building their own production 
capacity - rather than buying in pro- 
grammes on an anus-length basis — is 
not dear-cut On the plus side, vertical 
integration should allow cost savings 
in that a tied studio should not need 
its own syndication department Inte- 
gration ph mfl ri fllpp shift much of the 

risk Of Tnalring - p m gr am mpc f mm stU- 

dios to networks. Arguably such risk- 
allocation is efficient since networks 
have bigger balance sheets. If a dose 
relationship allows stndio and net- 
work to communicate more effec- 
tively. the risk of making dud pro- 
grammes might even be reduced. 

But there are negatives too. Tied 
studios, secure of an outlet for their 
programmes, could easily lose their 
commercial edge. ABC might akr> fmri 
it hard to rein in its three stars, if ever 
their programmes were not op to 
scratch or ran over budget. ABC 
mfg ht. note that in the UK there is 
something of a move away from verti- 
cal integration: in a drive to improve 
value for money, the BBC Is contract- 
ing out an increasing proportion of its 
production. 


FT-SE Index: 3047.1 (+13.6) 


WlHJams HobBng* 


Share pdconetaHv® In the 

FT-5&A ineftafridslralK : 



‘1980 ‘-.•I 
SoucttFT&apNtB, . 


yields caused by the ^ PtoPtatfmg 
of holiday 

of international iiansit^p^s* 
sengere. Its efforts to remedy tirfeJsjE 
expanding into Latau Aneito teHE 
proved unprofitable. ■ t--*-; 

Iberia mast raise capjW witfadut 

from the state, ft coaB keft 
and tease-back its aircraft, dft pgNi 
its European subsidiaries to ocsttofe 
mes such as BA re* Lufthansa, tom -oSt 
costs still further. If that>is^*fi|; 
enough, the group could tSsmaatir^ 
Latin American operations. Jbetia 
would be without an iniErccazfinoga) 
strategy but it could easily merge w$a* 
another airima. That might seem a teg 
blow to Spanish pride* b ut ft wwddhe. 
better than continuing large ca&h 
injix-HrmR from the taxpayer. -■ ■ ■' “ 


jiT* 

** eS * 




the group's 15 per cent target and syn- 
esgies with other fire businesses are 
exploited, ft may not be huge for a 
company with a £2.4bn market capital- 
isation, tint it demonstrates that Wil- 
liams is patting its shareholders’ 
money where its mouth is. Angus is 
case of the larger transactions in a 
string of - worth £250m in the 
past 12 months - which give credibil- 
ity to the strategy of growth, by bolt-on 
acquisitions. 

That said, Williams stin suffers from 
a r mrnh er of prohlens. Its cash-flow, 
though mm positive, is stfiL not luxu- 
riant Moreover, the recurrent need to 
write off goodwill following acquisi- 
tions means that shareholders’ fiwwfa 

are tiny for so large a group. This 
means gearing rises rapidly. And as 
yesterday’s cautious trading statement 
hinted, trading conditions are tricky. 
But Williams deserves its new-found 
credibility, and its rating 


Williams Holdings 

Williams Holdings yearns to be semi 
as a focused industrial group rating- 
than a blindly acquisitive conglomer- 
ate. The signs are that it is gradually 
winning the battle. Williams' shares 
command a premium rating of 12 per 
cent against the market and are op 
nearly a quarter against the diversi- 
fied industrial sector in the past 12 
months. 

Yesterday’s £80m deal helps show 
why. The purchase of Angus Fire on a 
multiple of 17 times last year’s after- 
tax profits is unlikely to dilute Wil- 
liams ’ gaming s jn 1995. This is despite 
the need for £&5m of restructuring 
charges to be taken above the fine. 
Thereafter it should enhanc e earnings 
as margins are brought into line with 


Iberia 

Yesterday’s chaos an the planes in 
Spain was nothing compared with the 
crisis that would grip the European 
Commission ff it allowed Iberia to be 
refinanced yet again by its state own- 
ers. Other airlines would cry foul 
gfagg the requested Ptai30bn (John) in 
refinancing would break Iberia’s 
undertaking not to Seek state aid unto 
1998. 

Iberia’s management has master- 
minded a strategy which generated 
losses of Ptal20bn since 1992 the 
gamp amount as the state bail-out in 
that year. While Iberia’s absolute casts 
have been kept low, revenues have 
stalled. The airline has been caught 
between the Spanish recession, low 


The results of being focused 
on the Nordic region. 


TJrt* OMWMM appears as • matter afrtconi only. 


Tte a m m mu Ment appmsas a matter cf ncorfmty 


6 


O Outokumpu 


5tadshypotE4< 


Primary offer ofVL7 million A shares 
and 20.72 million warrants 


Initial public offer 
and institutional placing of 


8CX5 million series A shares 


The institutional placing price 
valued the offer at 


SEK 7406 million 


Outokumpu Oy 

and secondary offer of 53 million A shares 
by 

The Republic of Finland 


Kleinwort Benson 


Kfeinwort Benson 


acted as joint adviser and global co-ordinator 


acted as adviser to The Republic of Finland 


November 1<W4 






Thb nummnerment ojtfran a matter ffm-anl mUy. 


The Government of Sweden, =3 
KF and Neste Oy y 

have sold 


OK 


Corral Petroleum Holdings 

for 

SEK 5-9 billion 


Kfeinwort Benson 


acted as financial adviser to fi 

The Government of Sweden, KF and Neste Oy 


MardiBM 




Kleinwort Benson 


F -r^rS^7.--v - ' - Jr?' 


Issued by Kleinwort Benson Limited, a member of SFA and ISMA 







IV-::: 


Bayer - V 

Bayer has yet again proved rjjsett a ' 
act Its 60 per cent rise foyear qa. 
year pre-tax profits during, the tetaf 
quarter was thanks to harf worfc as 
well as recovery. The cost-cuttingbas 
been impressive. Durihg; the .last four 
years staff numbers hav&beea catii 2 
per cent, while salaries have been kept 
under control- Turnover has bees 1 
almost static, yet sales per employee 
improved Lt per cent. Sot did Bayer 
stint an capital expenditure during the 
. recession: the group will have invested 
more than DM35bn ($8&m) between 
I960 and the end cf.this year..' . , 

Such careful husbandry dnring the; 
downturn is now befi^ rewarded. 
Saiga in all divisions haye ^arted to 
rise, driven by oariieretaitagic expan- 
sion into Asia, Latin America and the 
US. More is yet to code. The group is 
stai to benefit fully from recovery in 
BnTjpe,vrtmremoreih2mhalftt3tun> 
over &-generate(LYear an year, ^ ^prices' 
were actually down l ..percentage 
point, bat the group expects to push 
through increases,. 

Weaknesses remain. The pharma- 
ceuticals dfeiaon has not performed 
welL However,. management has. Ji^h 
hives fra- the new product 'portfolio 
and is following the example tif other 
groups by reorganising research and 
development to raise prod uctivity . 
Bayer has also addressed the. dyestnOk 
opera tio ns’ dflflcuZtias, placang them- 
in a joint venture with Hoechst The 
only problem is Agfa, its photographic 
business, which sits oddly wi thin toe 
group. Bayer should find some way of 
disposing of it The shares, which have 
underperformed more cydical stocks 
such as Hoechst and BASF, deserve a 
rerating. 


L S Vi 


H • , ... • 












• - h J 








Push-button service for 
measuring performance 

Page 4 


FINANCIAL TIMES SURVEY 

GLOBAL CUSTODY 


Russia: the challenges 
posed by the final frontier 

Page 9 


Tuesday November 29 1994 


Oil for the world’s 
investment machinery 

Global custodians have moved on from the task of 
merely keeping securities safe. They are now in the 
business of asset administration. Norma Cohen reports 



G lobal custody, once a 
sleepy backwater of the 
banking industry where 
clerks endeavoured to keep 
securities safe, is no more. 
Instead, it is a global multibfl- 
li on -dollar business which pro- 
vides the oil for the world’s 
investment machinery and the 
glue which holds the system 
together. 

Indeed, custodians say, their 
sector is saddled with a misno- 
mer. “We are really in the 
asset administration business," 
said Valentine Feerick, head of 
global trust and custody at 
Mellon Trust Europe. “We need 
to be able to play a role from 
the point where somebody 
agrees to buy a security to the 
point where somebody sells it 
For international banks such 
as Mellon, the core “master 
trust” business is relegated to 
a mere housekeeping activity. 
The real business is 
up-to-the-minute information 
provision for clients whose 
investments are crossing inter- 
national borders and time 
semes at an alarming rate. 

In addition to the traditional 
services of cash and foreign 
exchange manag ement, divi- 
dend collection, and monitor- 
ing corporate actions, clients 
want custodians to handle 
securities lending into esoteric 
markets, investment account- 
ing and performance measure- 
ment and attribution. 

“What our customers will 
look to us to provide is valu- 
able information that will help 
them make the right decisions 
about their asset strategies.” 
said Marshall Carter, chairman 
and chief executive officer at 
State Street Bank, one of the 
world's largest global custodi- 
ans. Competition in future 
years tor banks such as State 
Street may well came not from 


other banks looking for a slice 
of a lucrative new business but 
from teariiTig infor matio n pro 
viders such as Reuters and 
Bloomberg which already are 
adept at sending information 
around the world at low cost, 
Mr Carter said. 

Customers will want their 
custodian not only to collect 
mountains of data for them, 
but to distill it into a readily 
useable form. 

Charles Cassidy, who runs 
State Street’s European cus- 
tody business, points out that 
regulators' efforts to curb risks 
in securities settlement mean 
that clients need even more 
from their custodian. Earlier 
this year, the US Federal 
Reserve began to charge banka 
for their intra-day borrowings, 
a cost which has now been 
passed on to institutional 
investors. “Money now has a 
value daring the day and infor- 
mation about money now has a 
value during the day." he said, 
noting that chants want their 
custodian to monitor their bor- 
rowings minute by minute to 
cut the cost of credit 

While clients are demanding 
an increasingly sophisticated 
product, they have been able to 
exploit fierce competition in 
the business which is driving 
pricing down further. The long- 
envisioned shake-out has yet to 
materialise. However, there are 
signs that some institutions 
which provided their own cus- 
tody are now re-thinking that 
strategy - a move which could 
ease competitive pressures. 

Earlier this month, Pruden- 
tial, the US’s largest life 
insurer and a leading interna- 
tional investment manager, 
caused a rumble by quietly 

flaking JO infrflmfltinnal hanks 

to bid to manage its £40bn 
portfolio of UK and interna* 


tlonal securities which it han- 
dles in-house. 

It Is the largest single con- 
tract since the California Pub- 
lic Employee Retirement Sys- 
tem sought bids for its 
business in early 1902. 

David Hanson, director at 
Prudential Portfolio Managers, 
said the Pru simply made the 
decision that while it meets its 
own custodial needs perfectly 
well at present, the future 
requirement for investment la 
technology had caused a re- 
think. Custody, he said, is sim- 
ply not Prudential's core busi- 
ness and the insurer would 
rather concentrate on what it 
is good at - investment 

However, there are few signs 
that third-party custodians are 
retreating from what is for 
some a very profitable busi- 
ness. Robert Binney, head of 
Chase Manhattan's European 
custody business, says that 
custody is the single largest 
contributor to Chase’s profits 
for the Europe, Africa and Mid- 
dle East regions. 

M organ Stanley, one of 
the few investment 
banks to establish a 
significant toehold in custody, 
says that 19B3 was a “banner 
year" for profits in its custo- 
dial business, in 1994, profits 
are already up 60 per cent It is 
the fourth most significant 
contributor to group profits for 
the bank. 

“Everybody is talking about 
a shake-out in the custody 
business. But I'm at a loss to 
see who is getting out,” said 
Mr Cassidy. “But what we do 
see is a tiering of the busi- 
ness.” 

John Lee, a partner at Lee 
Schwartz Associates, says that 
a group of 10 international cus- 
todial banks now account for 


80 to 90 per cent of the busi- 
ness worldwide. A further 70 to 
80 banks may service signifi- 
cant parts of individual coun- 
tries or regions. 

Mchael Grass, head of global 
custody at Barclays Rank, pre- 
dicts that the degree of annual 
expenditure on technology and 
the number of new markets for 
which there is a demand for 
service mean that no bank can 
afford a comprehensive ser- 
vice. Instead, “we w£Q see alli- 
ances . B anks will say, ‘Look, 
you offer this service and m 
offer that service and well face 
the market together’.” 

Already, there are signs that 
Mr Grass's prediction is com- 
ing true. Leading custodians 
are reporting Increasing inter- 
est in so-called “white label- 
ling”, the provision of their 
service under the brand name 
of the end-client’s own custo- 
dian. The arrangement allows 
banks which cannot invest in 
the necessary technology to 
retain a long-time relationship 
with a client while providing 


high-technology custodians 
with an additional source of 


border investment particularly 
from the US which ha* tradi- 
tionally been reluctant to look 
overseas. That move abroad 
has taxed the abilities of custo- 
dians, particularly in emer ging 
markets where the flood of for- 
eign investments has swamped 
the system in some countries. 

According to InterSec 
Research, a US-based consult- 
ing firm, US pension funds 
sharply increased their inter- 
national holdings to 7.4 per 
cent of all assets by the end of 


that went into equities. 

And, significantly for the 
global custodians, there has 
been a considerable increase in 


bets where settlement systems 
and custodial services have 
often been rudimentary. 

Baring Securities is predict- 
ing that by 2010, roughly 45 per 
cent of the world’s stock mar- 
ket capitalisation wifi be in 
emerging markets. 

If there had been any doubts 
about the need for effective 
custodial services in these 
emerg in g markets, the exam- 
ple of India would have erased 
t hem- Earlier this year, custo- 
dians operating there had to 
close their doors to new for- 
eign investment and set limits 


Benchmarks, a publication 
which tracks the performance 
of custodians in each country, 
estimates that by the third 
quarter of 1994, three out of 
every four trades were still fell- 
ing to settle on time. “Simply 
stated, the situation in that 
market has reached a point 
where any prudent fiduciary, 
whether a money manager or a 
custodian, should be advising 
clients not to invest there,” 
GSCS said in its latest bulletin. 

India is not alone, GSCS 
says. Malaysia is showing 
signs of proving equally prob- 
lematic and even some mature 
markets, such as Japan, have 
relatively high levels of trades 
which fell to settle on time. 

Overall, the pressures on 


IN THIS SURVEY 

Man from the 
Pru galvanises 
the industry 

■ Outsourcing: implications 

of the Prudential contract 

■ ProfitabBtyrotativefy low 
risks and stable earnings 

Page 2 


■ Retail financial 
products: small investors 
offer big business potential 

■ DemateriaKsa&on: empty 
vaults win bring new 
opportunities 

Page 3 


■ Swift uncertainty over 
which way to expand 

■ Performance 
measurement new field for 
the future 

Page 4 


■ Securities lentting: a 
bolt-on service that 
generates cash 

■ Derivatives: fating 14 } to 
a rising demand 

Page 6 


■ Technology: getting the 
right message across 

Page 7 

■ Emerging markets: 
hazards encountered in the 
frontier areas 


■ kradfac antiquated 
procedures create a paper 
mountain 



■ Russia: where ‘dead 
souls’ and fake shares 
abound 

M Pacific Rim: unravetfing 
the nightmare 

Page 9 

■ Voting rights: the cost of 
making your voice heard 

Sub- custodi ans : New 
areas whore traditionalists 
' fear to tread"- 

Rage 10 


Editorial pnx&jctkxi: Floy Ttifry 
' MustrsUon: OaM Bromley 


for existing customers as the custodians to service -arcane 
1993, up from 4.7 per cent the paper-based system creaked to ' markets and meet iifcreastagly 
year before. And despite weak- a virtual standstill. * sophisticated needs is taxing 

ness in equities markets world- And despite the introduction the Industry's imag ination and 
wide, the trend oantinued into of a number of reforms its ability to finance further 
1994 with the value of US pen- Intended to ease the paper technological development, 
slon assets invested abroad rts- crunch, custody in India is still Long-term, only a handful of 
mg by a further $22hn in the threatening the ability of for- international - operators are 
first half of the year. Most of signers 'to invest there. GSCS likely to rise to the challenge- 


revenue. 

Meanwhile, if there is any 
trend which has shaped the 1 investment in emerging mar- 
business in the past year, cus- 
todians say, it has been the 
muse of expansion into cross- 





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N, 






II 


LiTiM-V, 


Outsourcing: Norma Cohen on the 


implications of the Prudential contract 


The Pru’s move 
galvanises the 
industry 


Earlier this month, the 
Prudential, the UK's largest 
institutional Investor, asked 10 
leading international banks to 
tender for its global custody 
business, thus setting off a 
burst of enthusiasm not seen 
in the sector in years. 

With £40bn of global assets 
to care for, the Pru's contract 
will be the largest single slice 
of new business since the Calif- 
ornia Public Employees Retire- 
ment System (Calpers) put its 
then $65bn portfolio out to ten- 
der in early 1992. 

For those in the global cus- 
tody business, the implications 
of the Pru's move are enor- 
mous. It is not simply the 
thought of a contract to service 
£40bn of assets, they say. but 
the broader question of just 
who ought to be in the custody 
business anyway. If. the Pru's 
vast assets are still too few to 
justify it being in the custody 
business, then surely dozens of 
other smaller fund managers 
in the UK and beyond will also 
need to consider outsourcing 
their asset servicing business. 

In making its decision to out- 
source its custody, David Han- 
son. a director at Prudential 
Portfolio Management, said the 
company looked long and bard 
at its core businesses and 
decided tbat custody was not 
one of them. 

“The players who are In here 
are in for the long haul,'' Mr 
Hanson explained. “They are 
investing $50m a year. Also, 
you really have to be part of 
the haniring business to do it 
well," he said. “A bank is capi- 
tal-hungry. Our core compe- 
tence is investment" 

And even if Prudential had 
decided to make a serious bid 
for the custody assets of others 
- giving it far greater critical 
mass than it has even now - 
“you're never going to say The 
Prudential - number one in 
custody',” Mr Hanson said. 

Once that decision had been 
made, the company, which is 
the UK’s largest life insurance 


company, retained a consulting 
Arm to help it find the right 
custodian - or combinations of 
custodians - to suit its needs. 
Significantly, the Pru has 
selected the same firm of con- 
sultants which helped Calpers 
achieve some of the finest pric- 
ing for custodial services ever 
seen in the business. 

However, the fact that a 
company the size of Prudential 
should have decided to out- 
source its custody operations is 
by no means an indication of 
how much critical mass a fund 
manager would need to remain 
In that business. 

Ms Elizabeth Corley, director 
in charge of custody and inves- 
tor services at UK investment 
bank SG Warburg and Co, says 
that her company has taken a 
different view. At Warburg, 
which is the custodian for its 
75 per cent-owned subsidiary 
Mercury Asset Management 
(MAM), "custody is a core busi- 
ness”. 

MAM began to invest heavily 
in its custody operations about 
six years ago mostly to meet 
the needs of its fund manage- 
ment clients for whom it offers 
a bundled service. 

However, because of the sig- 
nificant technology spend that 
effort required, MAM began to 
consider whether it could per- 
form the same service well for 
those who are not its fund 



Mk* Newmarch, PrudenttsTs ctiiel executive: global custody not a core I 


attracted the business of 
Invesco. the UK-based fund 
manager. 

But MAM'S recent emphasis 
on building its own stable of 
retail finan cial products has 
forced it to invest heavily in 
information technology not 
only for custody but for client 
record-keeping and other ser- 
vices. 


Dozens of smaller fund managers are 
expected to follow the Prudential and 
outsource their asset servicing business 


management clients. 

And, Indeed, some of its fund 
management clients, such as 
the GrandMet Group Pension 
Fund, ask MAM to additionally 
provide the custody for the 
portion of assets it does not 
invest Recently, it has begun 
to market its custodial capac- 
ity more widely - earning an 
added boost from consultants 
who rate it highly - and has 


“If yon are making that 
investment, you must ask 
yourself whether you are doing 
it just for yourself, or for oth- 
ers as well or should you not 
be doing it at all” Ms Corley 
said. MAM, which is spending 
£ 10 m to £12m on new systems 
each year, has decided it wants 
to do it for others in addition 
to itself. 

It has succeeded in winning 


the mandate to manage the 
new start-up unit-trust and 
unit-linked life insurance busi- 
nesses of the Halifax Building 
Society and for Leeds Unit 
Trust Ltd. the unit trust arm of 
Leeds Permanent B uilding 
Society. 

Also, MAM makes its propri- 
etary retail fund administra- 
tion system available commer- 
cially. 

“I actually t hink that out- 
sourcing is going to become 
more important," Ms Corley 
said. “People are saying ‘If I 
can't do something well and 2 
don't need to. why should I?'" 

John Lee, partner at Lee. 
Schwartz Associates, a consult- 
ing firm specialising in custo- 
dial business, agrees that if 
anything, the trend towards 
outsourcing is likely to con- 
tinue. While news of spectacu- 
lar new contracts such as the 
Pru's may still be rare 
instances, a far more common 
form of outsourcing is occur- 
ring under the description of 






“white labelling ”. 

In white labelling, or private 
labelling, banks which have 
traditionally provided custody 
services find they can no lon- 
ger afford to do so efficiently. 
They may then turn to one of 
the larger banks to do it for 
them, unbeknown to the ulti- 
mate client. The client, most 
likely a fund manager or insur- 
ance company, retains its 
direct relationship with the 
bank which will still be respon- 
sible for all reporting and the 
provision of administrative ser- 
vices. 

Ross Whitehill, senior 
vice-president global custody, 
at Morgan Stanley, notes that 
in Europe, where relationship 
h anking remains a key deter- 
minant of who does business 
with whom, such private label- 
ling relationships look particu- 
larly attractive. 

Other h anks were inritofiri to 
agree. “We're talking now to 
two European institutions who 
provide global custody. They 
cannot keep up with the tech- 
nology and the big Americans 
are pillaging all their clients,” 
said one banker. Although the 
banks are asking the custodi- 
ans whose services they will 
“white label” for non-compete 
clauses in their respective mar- 
kets, the bank believes such 
agreements will increasingly 
become a profitable activity for 
the largest operators and a 
hallmark of the custodial busi- 
ness on the European Conti- 
nent 


FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 


Profitability: John Gapper reports 


Relatively low risks 
and stable earnings 


The attractions of global 
custody for the dozen or so 
banks that are serious opera- 
tors In the market stem as 
much from what it does not 
involve as from what it does 
involve It Is not an activity 
like lending which requires 
the use of balance sheets and 
ties np capital, nor is it like 
securities and money mar- 
kets, which b profitable in 
good times but suffers from 
poor returns in bad times. 

After the lending problems 
of many banks at the turn of 
the decade, and the let-down 
from 1993's trading annus 
mirabiUs, these advantages 
are more firmly instilled than 
ever in most bankers’ minds. 
Larger banks regard custody 
as having an attractive com- 
bination of relatively low 
risks and a stable annuity- 
tike earnings stream for suc- 
cessful operators. 

Furthermore, custody has 
an obvious allure for many 
banks because it fits in well 
with other activities. Banks 
that are active in securities 
and foreign exchange trading 
see custody as a means of 
gaining captive business, so 
gaining more volume to pass 
through existing infrastruc- 
tures. All have the basic 
requirement of being able to 
clear and settle transactions. 

Within the different forms 
of custodial business, global 
custody is also more attrac- 
tive than domestic master 
trust and custody work in the 
US, and sub-custodianship in 
other domestic markets 
because of the growth in the 
market, and the potential for 
higher returns. Most global 
custodians argne that pros- 
pects are bright because of 
long-term investment trends. 

Ralph Mastrangelo, a man- 
aging director at JP Morgan, 
argues that the portfolio 
strategies of US fond manag- 
ers mean that their need for 
global custody services Is 
bound to grow. “The search 
for yield is pushing them into 
new markets,” he says. This 
not only means more call for 
central management of funds, 
bat the possibility of higher 
margin work. 

One custodian estimates 
that margins on the ancillary 
service of stock lending - one 
of the most attractive finked 
businesses - are only 25 basis 
points (hundredths of a per- 
centage point) in die London 
market, but range up to 300 
basis points in some emerg- 
ing markets. Only h anks with 
a strong presence in emerg- 
ing markets as custodians 
can achieve this return. 


Such factors would appear 
to make global custody a 
highly attractive business for 
afi banks. Yet the business 
remains one of the most 
highly concentrated of all 
banking activities. This is 
because of the Ugh harriers 
on entry, and the intense 
competition on margins in 
the forms of custody which 
new entrants might be able to 
perform relatively easily. 

Pressure on margins has 
been a constant of the past 
five years. Alex Jablonowski, 
managing director of Bar- 
clays' global services arm, 
observes that "custody is for 
the birds”. He says that the 
straightforward activity of 
bolding securities in safek- 
eeping and collecting divi- 
dends on equities and coupon 
payments on bonds produces 
miserly returns. 

The forcing down of mar- 
gins has been accelerated by 
the sophistication of the bid- 
ding process for the largest 
contracts. Fund managers 
have become nsed to banks 
making aggressive quotes for 
the simplest forms of busi- 
ness to be allowed to carry 
oat more profitable ancillary 
services. Basic custodial work 
is now done virtually free on 
the largest contracts. 

A listair Reid, director of 
custody at Barclays, 
argues that banks can 
“make good money by com- 
bining different themes” In 
custodial work even if the 
core product has been com- 
moditised. The more profit- 
able ancillary services 
include stock lending, foreign 
exchange contracts and all 
forms of de ri v ati v e s to reduce 
risk and enter new markets. 

Mr Mastrangelo says that 
most bids are “based on what 
a bank can get from die val- 
ue-added side. The clients 
know that they are giving 
some gravy to subsidise the 
basic custody”. Similarly, Mr 
Jablonowski says that the 
most profitable activities are 
“across markets and across 
products. The really horrible 
stuff is in a single product in 
a mature domestic market”. 

But the price of entry even 
to make such bids Is also sub- 
stantial, ami becoming more 
so. Banka such as Chase Man- 
hattan and State Street which 
have concentrated on custody 
and related businesses since 
the late 1980s have large 
technical infrastructures. At 
the heart of operations such 
as Chase’s Infoserre arm are 
proprietory telecommunica- 
tions networks. 


This has led to a tendency 
Tor consolidation among cus- 
todians, with smaller opera- 
tors to the OS selling busi- 
nesses to those with an 
established advantage. Fur- 
thermore, fund managers 
who have undertaken custody 
are contracting out, a trend 
exemplified by Prudential 
Insurance in the UK to seek 
tenders for its global custody. 

Despite the pressure on 
margins in basic forms of cus- 
tody, the large operators 
therefore face the possibility 
of becoming increasingly 
dominant in a growing mar- 
ket, and so being able to 
reduce their unit costs. The 
future of profitability for 
such operators is likely to 
centre on their ability to con- 
trol the risks of custody, 
which can be substantial. 

One form of risk Is credit 
Although there is relatively 
little credit risk involved In 
basic custody, custodians 
have introduced forms of 
credit risk in an effort to 
offer more sophisticated ser- 
vices. One example Is the now 
common practice of paying 
dividends or tax rebates to 
fund managers on set dates, 
whether or not the custodian 
has yet collected the money. 

One custodian argues that 
these forms of risk are not 
being priced properly at the 
moment Because custodians 
tend to deal with large credit 
worthy fund managers, they 
have competed for business 
without taking true account 
of the risk of loss. “The credit 
risk aspects of tins business 
are not getting enough atten- 
tion, and they are not being 
priced,” he says. 

Most enstodians believe 
that an even greater risk is 
operational: the chance of 
failing to complete trades 
tiwf a custodian has guaran- 
teed, and so having to make 
up the shortfall of funds 
because of movements in 
securities prices. Hie risk can 
be exaggerated, given that 
enstodians can also benefit 
from market movements, but 
it is particularly acute In 
emerging markets. 

Ms Vivian Eversole, execu- 
tive vice-president of Chase 
Manhattan, says that the big- 
gest risks “are definitely 
operational. It is blowing a 
transaction or valuing a fond 
improperly”. Sadi risks are 
likely to figure more strongly 
in enstodians’ thoughts if 
margins on business in 
emerging markets erode 
without corresponding 
improvements in market 
infrastructure. 



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FINANCIAL, TIMES TUESDAY NOVEMBER. 29 1994 ★ 

Retail financial products: Alison Smith reports 

Small investors offer 
big business potential 


GLOBAL CUSTODY 3 


Looking after the funds of 
small Investors is becoming 
increasingly big business for 
custodians as well as for organ- 
isations more directly involved 
in retail fh^anr^] services. 

In the US, for example, the 
mutual fund Industry had 
about $2 % 000bn in assets in 
1993, compared with just over 
$L,000bn in 1990. More th«m one 
quarter of US households own 
a mutual fond. 

Within the UK market, sales 
of unit trusts were the striking 
feature of retail savings and 
investments last year. The mitt 
trust industry attracted a 
record £9.i4bn of net invest- 
ment in 1993, and net of 
unit trusts for the first nine 
months of this year are higher 
- at £7.15bn - than for the 
same period last year. 

Many UK investment manag- 
ers say there is little difference 
between the services they 
require of a custodian for retail 
financial products compared 
with the characteristics they 
are looking for in a custodian 
for wholesale funds. 

‘There’s no difference in 
pure custody terms,” says 
Anthony Myers, managing 
director of Gartmore’s custody 
subsidiary. The factors he cites 
as important Include the 
extent of the network run by 
the custodian; the way in 
which it runs settlement its 
general efficiency and elec- 
tronic capability; and how 
good it is at providing reliable 
intelligence on corporate 
action. 

The differences are, instead, 
in tiie additional services pro- 
vided alongside custody. 

In the UK, Rnnnrinl regula- 
tion requires every unit trust 
to appoint an independent 
trustee- to' look after the inter- 
ests of unit-holders. This Amo- 
tion - which has no direct 
equivalent in other forms of 
investment — must be ftiiffflad 
by an organisation separate 
Sum the i n vestme n t manager, 
and it is common for the role 
to be carried out by the custo- 
dian. 

So, in appointing a custo- 
dian, a UK unit trust manager 
will look also at the trustee 
services available. 

Recent changes in unit trust 
regulation, increasing the 
responsibilities of trustees 
amid lead to some changes in 
trusteeship. 

At the beginning of Novem- 
ber, the Securities and Invest- 
ments Board, the City's chief 
regulator, replaced its list of 
approved securities and deriva- 
tives markets for unit trust ■ 
purposes with a duty on man- 
agers to ensure that the mar- 


kets where they invest meet 
certain criteria. 

The change allows unit 
trusts to invest in a much 
wider range of emerging mar- 
kets, but puts a greater onus 
on the trustee - which some 
are reluctant to accept - as 
well as the manager. 

It could see trustee services 
move either in favour of the 
more broadly-based custodians, 
which can offer expertise on 
any given market 
Alternatively, it could lead to 
fra g men t ation, so that a man- 
ager wanting to operate a fund 
in a particular market would 
go to a trustee with specialist 
knowledge of that area. 

hi America, while no trustee 
function exists in respect of 
mutual funds, the additional 
services are similarly impor- 


Wctfrin the UK market, 
sales of unit trusts were 
the striking feature of 
retail savings and 
Investments last year 


tant in differentiating custodi- 
ans. 

“In the US market, what is 
most difficult and time-con- 
suming Is the daily pricing of 
the portfolio: not that many 
a gwnt«t can do that as well as 
the auxiliary services, and by 
the time you include fund 
accounting as well, there are 
just a handful of custodian 
banks," says Wendy LaBoute, 
director of mutual fund mar- 
keting for State Street Bank in 
the US. 

The US market is much more 
highly developed than the UK 
market In terms of the auxil- 
iary services offered by custo- 
dians, but the UK market is 
moving in the samn direction. 

Last year, SG Warburg set 
up a new service offering unit 
trust managers a combination 
of trusteeship and administra- 
tive services using a single 
database. 

It has been appointed to han- 
dle the administration of the 
new nnit trust subsidiary to be 
Tmmohad in January by Hali- 
fax Building Society, the UK’s 
largest; and also acts for the 
newly-created retail financial 
products subsidiaries of Leeds 
Permanent Building Society 
and for the retail products 
badness of Invesco. the fund 
management group. 

Though that trend is grow- 
ing, the impression is still that 
the banks are keener to pro- 
vide the services than many 
UK Investment institutions are 
to receive them. 


One senior figure in the UK 
market believes that the rea- 
son the market has not 
changed more quickly is that 
UK banks are "probably a bit 
behind in tochnningimi devel- 
opment”, and US Han kg do not 
have a large existing client 
base where they can sell the 
additional services. 

The argument for placing 
administration and custody 
functions with a third-party 
provider is that it reduces 
costs. 

Efficient management of cus- 
tody and administration 
increasingly requires signifi- 
cant investment In technology 
which is much too large for aU 
but the largest groups, and 
expensive even for them. 

But the dilemma for the 
investment institution is 
whether the third-party la 
really going to manage the 
task better, and how far the 
task lies within or beyond its 
core competences. 

“It is hard to see a big Insur- 
ance company not regarding 
information technology and 
relations with policy holders as 
a cue pert of its role," one 
significant Investment man- 
ager says. "But a fund manage- 
ment organisation moving into 
retail services might take a dif- 
ferent view.” 

Barry Beale, relationships 
director of Warboig's custody 
and investor services division, 
draws a distinction between 
Warburg's services which are 
related to the underlying 
assets and rely on the same 
database - such as portfolio 
administration - and those 
which are more outward- 
looking such as dealing 
registration. It is up to the cli- 
ent institution to decide which 
hHiitiflg it wants, he empha- 
sises. 

While the provision of extra 
services poses a question 
which will have different 
answers for investment institu- 
tions, for custodians the pic- 
ture is more dearly positive: it 
is a way of getting further 
value out of information which 
they almost certainly have to 
have anyway, to carry out 
their basic functions. 

The extra services, then, are 
"added value” both because 
they can provide added value 
to the client, and because they 
provide a further source of 
income in an aggressive mar- 
ket 

. "Plain vanilla custody is 
very, very competitive,” says 
Mr Beale. “It’s very difficult to 
make a serious living out of it 
Yon have always to be looking 
to add value." 


I n less than two years' time 
Crest, the UK's electronic 

stock market settlement 
system which will largely do 
away with share certificates, 
at least for institutional 
investors, is due to begin its 
phasing-in process. 

Many other stock markets 
around the world, both In the 
developed world and in the 
emerging markets, are ahead 

of the OK In tntrodndng this 
so-called dematerialisatlon. 

With no share certificates to 
look after, are custodians 
threatened with the collapse 
of their business? Not a bit of 
It True, their vaults are liable 
to be empty. 

But the changes bring at 
| least the potential for a 
I significant expansion of their 
business opportunities. 
Plainly, though, custodians 
: will have to be prepared to 
adjust their techniques. 

“We are very bullish about 
the whole situation." says 
Terry Pearson, head of 
external relations at the 
Royal Bank of Scotland’s 
securities division in London. 

He draws a parallel with 
the developments seen in the 
US after stock certificates 
were immobilised - that is, 
were kept in a central 
depositary (the Depositary 
Trust Company) as a 
compromise measure falling 
short of complete electronic 
dematerialisation. 

“The US re s truc t uring was 
thought to be the death knell 
of custody, but tt turned out 
very differently,” he says. 
The OS custodians expanded 
into many other areas. The 
same thing will happen here." 

Thus the American 
custodian banks developed 
the Master Trust concept, 
which embraces many 
services Including trade 
reporting, foreign currency 
control and elements of 
performance measurement 
According to Richard 
Crampton, managing director 
of the Bank of New York, in 


Dematerialisation: Barry Riley looks at Crest, the 
electronic stock market settlement system 

Empty vaults will bring 
new opportunities 


London: “From a pure 
custody point of view, 
dematerialisatlon won’t make 
much difference." Already the 
UK system Is In Important 
respects effectively 
demateriallsed, he says, 
because certificates have no 
validity unless supported by 
entries on the company 

register. 

Regular tasks of the 

fiKjhrfinn | such 35 handling 

settlements, 

transferring 

m oney, “The US 

^£ ntae the death 

collecting 
dividends and 
monitoring 

corpor ate actions, will be 
essentially unchanged. “The 
bigger Impact will be on the 
registrars rather than the 
custodians,” he says. 

Andrew Douglas, a senior 
account manager with 
Citibank, offers a similar 
view. "Physical safekeeping 
of securities is now only a 
snail part of custody," he 
says. "As the business Has 
developed, the key has been to 
add on services.” 

In the UK, the original 
concept of Taurus, the Stock 
Exchange electronic 
settlement system which was 
expensively abandoned two 
years ago, was more worrying 
for the banks than Crest now 
is. 

Many of the big fund 
managers wore planning to be 
their own account controllers 


and might have t aken many 
processes in-house. 

Bat the failure of Taurus 
left them with burnt fingers 
and heavy cost write-offs. 
Moreover the successor 
project Crest is deliberately 
less powerful, because 
ambitions have been scaled 
down. 

Functions not performed 
within Crest will have to be 
added (m elsewhere. 


active in the UK investment 
markets will face tiie need to 
establish interfeces with at 
least four systems - not only 
Crest Ear equities, but other 
systems for gifts, 
money-market instruments 
and financial derivatives. 

The specialist role for 
custodians will therefore be 
secure, says Mr Reid. “Fund 
managers have their work cat 
out competing for their 
primary 


business, let 

restructuring was thought to be alone 
knell of custody, but it turned out *ffE£ 


very differently” 


Accord i ngly, some UK fund 
managers - many of whom 
have offered in-house custody 
to pension fund clients in the 
past - are now thinking about 
outsourcing. 

Strikingly, the UK’s biggest 
Institutional investor, 
Prudential Assurance, has 
thin month decided to phase 
ont in-house custody and put 
the portfolio administration 
of£40bnofUKand 
international securities out to 
tender. Dematerialisatlon is 
only (me factor behind the 
decision, bnt tt has played a 
part 

Arfnr ding to Alittailr jtind , 
director of custody at 
Barclays lfanir, 
dematerialisation will leave a 
number of inefficiencies to be 
tackled. 

A irt ns ti t ati o n wishing to he 


banks,” be 
observes. 

Around the 
world, Barclays covers some 
70 national market places, 
with two or three interfaces 
in each. That’s our job, not 
the fond managers'.” 

Settlement improvements 
within the UK are especially 
focused on increasing speed, 
and custodians are looking 
forward to the indirect 
benefits this will bring 
through the opportunities for 
expanding their business in 
securities lending. 

Already UK settlement of 
equity trades has moved from 
a fortnightly account basis to 
10-day roiling settlement, and 

the Stock Exchange recently 

announced a move to five-day 
settlement on June 28 next 
year. 

Eventually , when Crest is 
running smoothly, three-day 
settlement will be introduced. 


With time constraints 
becoming modi more 
pressing, London 
marketmakers will have to 
rely much more on stock 
lending to balance their 
books. 

“We expect that demand for 
stock lending will rise 
fourfold,” says Terry Pearson, 
of BBS- 

As a result, custodians will 
have a much greater 
opportunity to add 
responsibilities such as 
lending on an agency basis on 
behalf of clients, and looking 
alter the collateral 
' Mr Douglas, of Citibank, 
also sees plenty of scope here. 
“Demand will increase 
dramatically,” he says, and 
from a starting position at 
which demand for stock 
already for outstrips supply. 
Tending rates may have to 
rise If a broad balance is to be 
maintained. 

So there could be scope for 
expansion of Citibank's 
specialist lending desk, which 
controls stock borrowing and 
lending around the world. 

This is an example of how 
custodians can aim to develop 
their expertise In systems and 
move higher up the 
added-valne chain. 
Opportunities could multiply. 
For instance, data could he 
supplied directly to 
performance measurement 
specialists such as WM and 
Caps. 

At Barclays Bank, however, 
Alistair Reid displays a little 
more caution. “Crest does 
present lots of opportunities,” 
he says, “but the institutions 
may not wish to pay the 
appropriate price. Let’s wait 
and see." 

Terry Pearson is rather 
more forthright. “The Crest 
system Is deliberately simple 
and limited in functionality, ” 
he says. “Capability has to be 
added somewhere else. 
Custodians are the obvious 
ones to do it” 


A global custodian should 
look after the investor, 
not just the investment. 



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rv 


FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 


GLOBAL CUSTODY 4 


Swift: John G apper looks at the cross-border financial message network 

Uncertainty over expansion plans 


For global custodians, there 
are few more vital matters 
than being able to settle securi- 
ties transactions on behalf of 
clients safely, and quickly. 
Without an efficient method of 
doing so, custodians face not 
only high costs, but the finan- 
cial risks of settlement failure. 

The large US custodians 
might therefore have been 
expected to welcome a move by 
Swift, the Belgian-based cross- 
border financial message net- 
work, to provide a computer 
matching and reconciliation 
facility which can be used by 
all custodians and fund manag- 
ers to trade their transactions. 

It was not to be. Instead. 
SwiftAsset Reconciliation was 
criticised on its launch at 
Swift’s Sibos payments confer- 
ence in Boston last month for 
being an inappropriate ven- 

It is argued that Swift 
should concentrate on 
its core service 


ture. The idea of easy access to 
such a tool for all Swift's 4,000 
customers did not please the 
largest custodians. 

Ms Vivian Eversole. execu- 
tive vice-president of Chase 
Manhattan Rank, argued that 
Swift, which is owned by 2,230 
banks, should concentrate on 
its core service of delivering 
financial messages rather than 
producing “value-added" prod- 
ucts for market participants. 

The question of how it can 
avoid competing with its own 
shareholders has become cru- 
cial for Swift as it mounts an 
ambitious push into the securi- 
ties market, broadening its 
roots as a means for banks to 
exchange payments, foreign 
exchange and money mar kets 
messages. 

There is a clear logic to 
Swift's securities ambitions. 
Swift itself estimates that the 
growth in global investment 
means that there will be lbn 
securities messages exchanged 
annually by 1997. Yet members 
exchanged only 21m securities 
messages - a fifth of total traf- 
fic - during last year. 

Tony Kirby. Swift's director 
of securities markets, says that 
falling settlement times mean 
that it is increasingly diffi cult 


to exchange paper confirma- 
tions of trades. “You have to 
be connected electronically, or 
you can imag ine telexes and 
faxes blocking the world's 
financial arteries," he says. 

This has given Swift an 
opportunity which it might 
have found harder to capitalise 
on two years ago. The network 
then had a reputation for over- 
spending, and being unrespon- 
sive to its users. Although it 
had admitted fund ma n ag er s in 
1992, it was still levying rela- 
tively high transaction 
charges. 

Since then, the network has 
undergone a substantial 
reform led by top management. 
Leonard Shrank, the chief 
executive recruited from Chase 
Manhattan two years ago. has 
engineered cuts in the entry 
fees and tariffs for use of the 
network because of reduced 
expenses and higher volumes. 

Mr Kirby says there is no 
conflict between Swift develop- 
ing securities services and the 
interest of members such as 
large global custodians. He - 
says that if the maximum 
number of participants is con- 
nected electronically and can 
exchange information “it will 
reduce the risks for every- 
body”. 

Yet Swift now faces uncer- 
tainty over how it should 
develop its securities activities. 
Mr Kirby argues that it can 
play a pivotal role in lowering 
the automation costs of new 
operators. 

Some of this effect has 
already been seen in the rela- 
tive enthusiasm of smaller 
fund managers for the net- 
work. 

“The reason we are looking 
at added-value services is to 
attract newer participants. If 
the mflvimiTm number of par- 
ties is connected electronically, 
it will reduce the risks for 
everybody.” he says. It would 
also allow smaller f und manag- 
ers and custodians to provide 
sophisticated services. 

Mr Kirby points to two 
advantages for fluid managers 
in services such as SwiftAsset 
Reconciliation. First, he says it 
will improve the quality of 
information they receive on 
the their trades. This will 
“enable them to alert their 
bank” if there is a problem 


Securities messages on Swift network 

Mffion WSWZ 

3.5- - 



1930 


1991 


1992 


1993 


Debt capitalisation by country 

1982: US$ 14,800 bBBon 


1994 


GCjDftAL 

CUSTODY 



Equity capitalisation by country 

1993: US$ 12.700 bUKon 


aurnitt, 

CUSTODY 



rather than waiting to be 
informed. 

A second advantage, he says, 
is that “it is crazy for a fund 
manager to use every type of 
proprietary system that a bank 
comes up with”. If they use 
systems which are standard 
across the whole industry, this 
means that they will be able 
“to switch custodians fairly 
cleanly" if they wish. 


He combines this ambition 
with a clear statement that 
Swift does not want to “replace 
the banks' proprietary 
systems". 

Yet there is clearly a poten- 
tial for conflict with custodians 
that provide high margin ser- 
vices for customers by gather- 
ing such information through 
their proprietary systems. 

The scope for conflict in 


securities activities is greater 
than in some of Swift's poten- 
tial payment and foreign 
exchange services because 
banks wanted to act as an 
intermediary there. But plans 
such as centralised matching 
of securities trades by 1997 
could threaten the existing role 
of custo dians . 

In her Sibos speech, Ms Ever- 
sole argued that such val- 
ue-added products were not an 
integral part of its strategy of 
attending to the needs of its 
most Important customers - 
banks. Instead, she said Swift 
should be “focused on building 
the information autobahn of 
the financial world”. 

Yet the distinction between 
Swift's different categories of 
customers is likely to become 
increasingly blurred. Its move 
to admit fund managers in 1992 

Swift role is "to build the 
financial world’s 

information autobahn” 

may be followed shortly by a 
s imilar decision to allow lim- 
ited access to big corporate 
users, further diversifying its 
customer base. 

Furthermore, as global custo- 
dianship consolidates further, 
it may be diffi cult for the few 
large banks that specialise in 
the activity to exert a control- 
ling influence on Swift Small 
banks may in contrast be 
happy to see it develop val- 
ue-added services to lower the 
cost of entry for such activi- 
ties. 

Mr Kirby says that Swift’s 
managers “respect the position 
of the large global custodians" 
but points out that Swift's 
board decided on the strategy. 
He says that Swift wants to 
“work with global custodians 
to define exactly what we 
mean by valuer dded services" 
now the debate has surfaced. 

He argues that “today’s add- 
ed-value service is tomorrow’s 
commodity” in the fast-evolv- 
ing world of custodianship. 

This means that Swift should 
be able to focus on activities 
which do not conflict with 
global custodian shareholders. 
This is likely to be one of its 
largest challenges in the 
future. 


Performance measurement: Norma Cohen reports 

Push-button service 


Nothing has attracted more 
excitement than performance 
measurement in the search to 
find new valn&added services 
to package into global custody 
services. 

Traditionally the domain of 
independent professional ser- 
vices who glean i n for ma tion 
from custodians before trans- 
la ting it into mptiila form for 
clients, c us todi ans are moving 
into performance measure- 
ment with a vengence. 

“Custodians were fools ever 
to lei performance measure- 
ment go to third-party provid- 
ers,” one banke r said. 

Robert Ross, director of era- 
suiting at Frank Russell Asso- 
ciates in London, said: “In 
theory, it could all be done at . 
the push of a button. Custodi- 
ans have all the d a t a at their 
fingertips.” he noted. 

Frank RusseU, which is 
active in the performance 
measurement market itself, 
hfls wasted no itmp fo capital- 
ising on this latest trend. The 
company is providing a soft- 
ware package to Chase Man- 
hattan Bank, one of the 
world’s largest global custodi- 
ans, which is used by all its 
clients. The service will pro- 
vide mflggnrpmpnt and multi. 
currency performance attribu- 
tion, helping clients to pin- 
point which aspects of their 
investment strategy led to the 
out-performance or under-per- 
formance of a portfolio. 

Also, Frank Russell is pro- 
viding its performance mea- 
surement software to a group 
of other banks who make it 
available to selected clients. 

According to Ms Laurette 
Bryan, senior vice-president 
in cimiy of poformance 
analytics at State Street Bank, 
says that the role of custodi- 
ans in performance measure- 
ment is now so pervasive in 
the US that “the consultants 
are almost getting out of the 
business here because we are 

taking over. 

“We can do it modi fester 
than they can,” she said, not- 
ing that full repents can be 
prepared for clients within 
three to five business days of 
the end of each month. 

State Street’s performance 
measurement service has 
three elements; a pure calcu- 


lation of total returns, a com- 
parison of returns against var- 
ious benchmarks.- and perfor- 
mance attribution. Tie last of 
the three is particularly cru- 
cial to pension scheme c itents , 


Ms Bryan says that the par- 
ticular style of US .pension 

frmH r pa naggniAni- fends ttSSlf 
to the type of performance 
measurement which custodi- 
ans offer. For one tiling, 
US schemes are far more aris- 
ing to tee ’’specialist'’ ftmd 
managers and' may have as 
many as Sfr or -40; .different 
■ companies handling .hits . of 
their partftdw. These organi- 
sations ■ need to know, for 
instance, how their portfolio 
managers compare against 
each other as well as how 
they perforated against their 
respective benchmarks. 

A lso, a global custodian 
for a cheat's portfolios 
will be able to spot 
some key elements of perfor- 
mance attribution at a glance. 
“Sometimes a plan does well 
because aU fheir managers 
have moved in the same direc- 
tion at «twip tinrn and it 
turned oat to be the right 
direction,” she said. However, 
that sort <rf “tar in a Ghent's 
portfolio ought to be pointed 
out because it can lead to seri- 
ous underperformance In 
fixture years. Ms Bryan recal- 
led one former c&ent who had 
done exceedingly well in fee 
mid-1980s . with a portfolio 
tftted towards small jensrgy- 
related companies based in' 
Denver, Colorado, which not 
long a fter w ar d s coflapsed - 
What clients really want, 
she says, goes beyond pure 
performance measurement. 
“If yon can nwinnW and Inter- 
pret, then clients are wiHing 
to pay for it,” she says. 

In the US, fund manage- 
ment styles and the absence . 
of a single, universal perform' 
mance benchmark have cre- 
ated a more hospitable mar- 
ket .for custodial banks to 

malm inroads info that mar . 

fcpf Rot in the UK, the “bal- 
anced” pension fond 
where the ftmd manager, not 
the rfjgnt decides the asset 
allocation, is the norm. 

For this reason, consultants 


conjecture, .the UK ., has 
a performance mea- 
surement systemwhkfehas 
been able to develop broad 
b enchma rks covering, a high 
percentage of all market par- 
ticipants. Unlike the US, it is 
possible to gato a feirfy accn. 
r ate picture of the achieve- 
ment of - the “average" ftmd 
man ager in. total returns and 
the range of performance. 
However, there are few asset- 
specific b epnhmar ks ‘making 
it fttffia ilt fa learn. say r how 
the - .average international 
.bond portfolio manager per. 
framed. Thus, in ti» UK there 
has been little' sign of custodi- 
ans making significant 
inroads into performance 
measurement. ' Pension 
schemes simply do not need 
fee service custodians ate 


The UK market , is domi- 
nated by two organisations; 
Combined Actuarial Perfor- 
mance .Services . (CAPS), 
owned by the four largest pap- 
drm consulting firms, yud 
WM Company, owned by 
Backers Trod.. 

Kariiar this year. Bankers 
-Trust replaced the lorqj-time 
chairman of its WM-subskt- 
jazy.wifh a senior BT official, 
Charles Kiley, and said it 
would like to obtain better 
synergy between the service 
and - its global custody 
jppimfams. - 

T: Mr KSley acknowledges the 
differences between the two 
ma r k ets. “We seed to develop 
different products and ser- 
vices for the two markets. 
They want different things.” 
OS cheats “want to get down 
to the performance of the 
individual securities, aot just 
portfolio iM Mmr p n imt * They 
want to know what each 

stock or bond contributed to 
overall performance. 

: WM does have several speci- 
alised products, including its 
new PerFx product which 
-measures the «fo* T fh nHfm for- 


: mance. Also, in theGlobeMas- 
ter product; WM does the 
performance measurement 
side of the custody service 
ami WM markets its perfor- 
mance mwwiiTBniqnt. capabili- 
ties to other custodians as 
weR. 



We’ve added a few more facets 


Innovation is the responsibility of leadership. 

And so we have continued to polish and augment our 
Globe*Master service to fund managers and trustees 
through investment In the development of advanced 
computer technology. 

Globe”Master has set the pace in Global Custody 
ever since Its introduction as a modular service 
incorporating options for Trustee Services, Investment 
Accounting, Valuations, and Performance Measure-, 
merit - the latter through The WM Company, a leader 
in Its field. 

To this powerful selection of integrated functions, 
we now add International Securities Lending, 
Flexibie/Dedicatcd Foreign Exchange and Enhanced 


Cash Management All designed to Increase portfolio 
returns. It’s a pyramid of linked added value services 
from which you select the combination that suits your 
needs. Globe* Master is a flexible, individual, and 
above all, personal service. 

For more information, contact 
Dick Feehan on 071-982 1957. 

Bankers Trust 
Company 

I Appold Street. Broadgate, London ECZA 2HE 
Baden Truu Ccwfwnj fc a nwnkrr uf SFA 



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Few things are as secure as our 

PENSION FUND CUSTODY SERVICE. 

The Beefeaters have a pretty impressive record for their performance guarding the Crown Jewels 
(albeit with the odd aberration in the late 17th century). 

Whilst we cannot claim to be a tourist attraction, we do boast an unblemished record when it comes 
to safeguarding our clients' assets. In fact, you may be surprised to hear that Warburg has 
the largest and most successful service of its kind in the country. Despite our low profile, we saf 

assets of over £3 J billion for more than 650 clients. Of course, it's no coincidenoTtW 
we're the largest. For over thirty years, we’ve devoted ourselves to providing our dienes with the most 
dependable and efficient service possible. They know their assets are in safe hands * m<>St 
The reporting is prompt and straightforward and service standards everything you'd expect fro 
a bank with our expertise in this particular sector of the marker. It*s this kind of 
commitment chat has established us as the country’s foremost pension fund custody se 
For the full story, without the pomp and ceremony, please call David Batten on 071 280 2280 

S.GMrburg 

S.G.WARBURG & CO. LTD. 

CUSTODY AND INVESTOR SERVICES DIVISION 

ii KING WILLIAM STREET. LONDON EC4R 9 AS MEMBER OF SFA 

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IT'S HELPFUL TO 
HAVE A PARTNER WHO CAN 
DEAL WITH GREATER ASIA'S 
EMERGING MARKETS. 


Exciting, frightening, rewarding: ail these words describe 
my feelings towards investment in these developing securities 
markets. But when selecting a custody partner for these locations, 
just one word will do: expertise. 

Which is what Standard Chartered Equitor Group is all about. 
To help me minimise risks and so maximise my opportunities, 
1 count on the knowledge and information they provide. 

They have played an active role in cracking open securities 
markets in Greater Asia's emerging economies to foreign 


Their quality service is convenient because they give me a 
single point of contact in my own time zone. They’re always 
just a phone call away during my working day and 1 can easily stay 
up to date on changing trends. 

When it comes to choosing a custodian for Greater Asia's 
emerging markets, it's reassuring to have a partner who opens 
the way for me. 

For more information, call: Nicholas Menges, UK, 
Tel (44 71) 280 6510, Fax: (44 71) 374 2350/ Michael Lucas, USA, 


investors. Standard Chartered have been in Asia 
for more than 1 30 years, so their level of insight 
into what works best for me is not surprising. 


Standard g Chartered 

Equitor Group 


Tel: (1-312) 701 6940 OR (1 800) 654 6918, 
Fax: (1 3 1 2) 70 1 6975,- Linda Choi, Honc Kong, 
Tel: (852) 847 2783, FAX: (852) 521 5847. 





VI 


FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 


Securities lending: Norma Cohen on the value of this bolt-on service 


Cash-generating practice 


Of all the services global 
custodians provide, none 
causes as much interest as 
securities lending. 

This is the business where 
an efficient custodian can earn 
enough cash to be able to offer 
a new client a basic service 
almost free of charge. 

“There is only one bolt-on 
service which is of value to the 
provider and that is securities 
lending," said John Lee, part- 
ner at Lee Schwartz Associ- 
ates. a consulting firm special- 
ising In custody. “There is an 
increasing number erf custody 
contracts tendered for on the 
basis or ‘We will do the cus- 
tody for free IT we get the secu- 
rities lending bit'," Mr Lee 
said. 

However, some custodians 
are cautioning against linking 
pricing decisions too closely to 
securities lending. “Securities 
lending does influence pricing 
decisions,” said Dick Feehan. 
managing director at Bankers 
Trust's European global prod- 
ucts division. “But the struc- 
ture of a portfolio can change 
overnight," he warned. It may 
be reconstituted in a way 
which offers Ear less potential 
for lending than had been 
thought and the custodian 
could be underpricing his ser- 
vice. 

Securities lending offers cli- 
ents a chance to earn not only 
a rate of return on the loaned 
securities, but on the invest- 
ment of the collateral held 
against it 

Yet, custodians say. even 
after years of successful stock 
lending in the US which has 
enhanced returns and cut oper- 
ating costs significantly, many 
UK pension hinds remain wary 
of the practice. 

Demand for loaned securities 
- both equity and debt - has 
been driven by the growing use 
of derivative instruments by 
fund managers and securities 
houses. These encourage inves- 
tors to take short positions - 
that is, to sell securities they 
do not own - and there are 
times when investors need to 
borrow stock to fill a short 
position. 

Also, international stock 
tending has been driven by 
vastly increased interest in 
emerging and less efficient 
markets by US and UK inves- 
tors. Investors willing to lend 


Spanish securities, for 
Instance, may earn tip to 3 per 
cent of the value of securities 
loaned reflecting both market 
inefficiencies and the relnc- 
tance of domestic investors to 
lend in an environment of legal 
ambiguity about the status of 
the practice. 

Inefficient, paper-based mar- 
kets also offer great potential 


are rapidly increasing. 

However, in the UK clients 
are Ear more reluctant. “We do 
very little lending in the UK," 
be said. Partly, that reluctance 
might reflect the relatively low 
returns earned on domestic 
stock Lending. While margins 
are also low in the US, volumes 
are so large that investors who 
do participate earn quite 


Volume (K of 
total trades) 


Settlement index* 

Major markets 

Sotting 

rfconSD) 


AustraBa 

Belgium 

Canada 

Denmark 

France 

Germany 

Italy 

Japan 

Netherlands 

Spain 

Switzerland 

UK 

US 

Eurobonds 


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an SO) 

02 94 

03 94 

% change 

97.60 • 

9523 

9620 

1.12 

84.97 

6329 

7323 

-1128 

9624 

8925 

96.76 

8.41 

90.02 

8921 

8058 

-1028 

89.69 

79.72 

8429 


8926 

82.19 

8926 

828 

9329 

82.42 

9005 

926 

9426 

9045 

9520 

221 

8720 

9245 

66-11 

-28.49 

sa 80 

92-52 

8327 

-1124 

7924 


5626 

-3723 

9527 

9127 

9124 

022 

97.10 

92.63 

9724 

528 

8526 

6057 

6628 

1008 


for landing at hi gh margins. 

Brokers eager to sell shares 
to clients find they may not be 
able to obtain them outright 
and borrow them from inter- 
mediaries to make good deliv- 
ery. 

As more investors become 
w illing to lend, margins come 
down. In Japan, for instance, 
margins have falle n from three 
percentage points a few years 
ago to roughly 0.3 per cent at 
present 

“Securities lending has 
become a much bigger part of 
the business." said Charles 
Cassidy, senior vice-president 
at State Street Bank in charge 
of financial asset servicing in 
Europe. State Street has 
roughly $200bn in custody 
accounts which clients have 
given permission to lend. 

“That is a significant 
increase over the past year 
when we had about $30bn in 
total that rltent* were w illing 
to lend.” he said. About 25 per 
cent is out on loan at any one 
time, he -«i«i The bi g g est par- 
ticipants are the large public 
sector pension funds whose 
knowledge and sophistication 


attractive returns. 

Mark Weeks, marketing 
director at London Global 
Securities, an independent 
stock lending intermediary, 
notes that in the UK, the disap- 
pearance of more than £440m 
from pension funds formerly 
controlled by the late Robert 
Maxwell had tarnished the 
image of stock lending and 
given trustees a justification 
for avoiding the practice, “hi a 
relatively risk-free environ- 
ment, you can make a cer tain 
amount of money. So why 
would you turn it down?” Mr 
Weeks argues. London Global 
is one of the few lending inter- 
mediaries which acts as princi- 
pal In stock-borrowing agree- 
ments. a states which many 
pension trustees say gives 
them greater comfort. If the 
borrower disappears with the 
stock, London Global makes 
good any loss. 

Moreover, all stock lending - 
unlik e that allegedly carried on 
by the Maxwell-controlled pen- 
sion tends - is collateralised. 

London Global, an unusual 
Outfit in that it nnhnndle* the 
custody activity from that of 



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How hard are 
your assets 
working? 






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Securities lending improves 
fund performance by making 
your assets work harder 


nnun 


sum 

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stock lending, passes the col- 
lateral It receives back to the 
lender, who is then free to 
invest it as he sees fit 

However, the common prac- 
tice is for the global custodian 
to invest file collateral. This is 
not a totally risk-free activity 
as Chicago-based Harris Trust 
found out earlier this year. 

In the second quarter of 1994, 


Bancfluaric 





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Harris took a $33m writeoff to 
reflect more than $51m in 
losses stemming from a deci- 
sion to invest held a gainst cli- 
ent loans of securities in vola- 
tile collateralised mortgage 
obligations. 

While these offer relatively 
low counterparty risk, they 
face significant market risk 
and fell sharply in value when 
interest rates rose earlier this 
year. Harris, which says it 
ranks among the top US-based 
global custodians, “made 
whole” all of its clients which 
had sustained the losses. More- 
over, a spokeswoman said that 
Harris has revised its internal 
risk management procedures 
as a result. 

Typically, Mr Weeks notes, 
there are three types of coUat- 
. eral which instit utions regard 
as acceptable. These are ««li, 
letters of credit and Treasury 
bills. Mr Weeks says because 
client agreements usually 
promise an end-client a set rate 
of return, say 3 per cent, there 
is an incentive for custodians 
to try to earn an extra turn for 
themselves by. investing in 
modestly riskier investments. 



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needed to uphold positions. 

“The whole idea is to get afl 
your positions with one global 
clearing broker rather than 
with a multitude - of brokers 
round the world. You get all 
the information in one place,” 
explains Mr Dennis. “Without 





Continued on page 7 


■Be 
Wm 

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Accurate, timely data- 
your key to sound 
investment management 


In volatile and complex markets, sound investment management can only be 
based on accurate and timely information. Never before has the demand for 
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of the global asset management community. 


With fund managers under pressure to improve performance, every asset 
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and international securities, which allows you to increase the returns on 
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To find out more about our securities lending services call Clive Gande or 
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Providing information for: 

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Lm Adams: a universal language will save money 


Technology: Sheila Jones on a common language 

Getting the right 
message across 


The Holy Grail of the custody 
industry is a universal lan- 
guage that will enable opera- 
tors to talk to each other 
across the globe unhindered. 

Armies of people represent- 
ing custodians, fund managers, 
and a host of other groups 
have been meeting in Europe 
and the US in an attempt to 
establish common messaging 
standards in the way trades 
are confirmed and settled. 
They want a language to carry 
the billions of pieces of infor- 
mation. or messages, about 
transactions daily between cus- 
todians and their clients. 

Most people zh the industry 
agree that the need to speed 
processing through a universal 
language is urgent, particu- 
larly as settlement periods 
become shorter. 

“When 30 per cent of your 
messages are on free format 

A language is needed to 
carry the billions of 

pieces of information 
about transactions daily 
between custodians and 
their clients 

[unrecognised universally! 
and you're having to interpret 
them and then rekey them, 
that is what the urgency is 
about," says John Gubert, 
senior manager of group secu- 
rities services at HSBC Hold- 
ings. 

“A universal language allows 
you to receive messages and 
read them without human 
intervention. It takes out the 
time needed to manually load 
messages, and it removes an 
element of error when mes- 
sages are being rekeyed. It 
speeds processes at a time^of 
Easter and faster settlement.” 

Mr Gubert predicts that by 
the end of the decade, 5(H30 per 
cent of trades will be settled on 
the day of trade, and the rest 
within three days. 

Lee Adams, a vice-president 
at Citibank responsible for 
product development, echoes 
Mr Gubert's view: “A rand 
manager told me recently that 
they dealt with 40 different 
custodians - unless those 
custodians agree to use jhe 
same format,. JoortonA 
manager is going to be recei£ 
5 nnsslblv m 40 dii- 


1U£ r- ^ 

^ssra. wg*; 

ss-sst^S 

loop" in the industry’s automa- 
te main industry , body 

torumof reP^^bT ISITC 

US and Europe- 


works closely with Swift, the 
dominant message network 
provider, in looking at building 
on Swift messages, extending 
their use across the industry 
and creating new standards. A 
primary role is to develop for- 
mats far messages that can be 
used across a range of net- 
works throughout the global 
industry. 

The ISITC is making prog- 
ress, according to one analyst, 
“but it is a bit like watching a 
swan on water - it is serene on 
the surface, but its feet are 
working away underneath”. 

The ISTPCs work, and that 
carried out by other groups, is 
co-ordinated by the Securities 
Standards Advisory Board, 
which was set up two years 
ago to bring together the vari- 
ous strands of work already 
under way. 

Mr Gubert fears that 
attempts to create a universal 
messaging system are being 
hampered by the perceived 
need for consensus. He 
believes the industry needs to 
find a fast-track route, which 
means “in some ways being 
dictatorial”. 

“The trouble with consensus 
is that if custodian A wants to 
use eight characters as an ID 
code and B wants to use 12, 
there is no possibility of a con- 
sensus, so you need an arbiter/ 
dictator," he says. “Inevitably 
that will be the big boys, and 
people will squeal like mad. 
but they are the ones handling 
die bulk of messages. You 
have to do it with a small 
group of operators to get stan- 
dards on networks which are 
then used. That’s effectively 
what the ISITC is doing to a 
great extent" 

Many in the industry 
acknowledge there is much 
co-operation between the vari- 
ous bodies involved in creating 
messaging standards, but some 
also fear the process is bureau- 
cratic and slow moving, and 
that work on standards is 
being fragmented and dupli- 
cated Rivalry between differ- 
ent standards groups has cre- 
ated a “bugger’s muddle", 
according to one custodian. 

Simon Pilkmgton, chairman 
of the ISITC in Europe, says he 
beSeves some of the criticism 
stems from “misunderstand- 
ings and confusion" about the 
position of the various groups 
in the process and with each 
other. 

The ISITC agreed an equity 
and fixed income standard in 
September last year, and its 
working groups are now 
looking at the other main 
areas: reconciliation and corpo- 
rate actions, derivatives and 
foreign exchange. Lee Adams, 
at Citibank, sits on the ISiTC's 
corporate actions working 
group. He says a draft standard 
for a type of mandatory corpo- 


rate action should be agreed by 
the end of this year, before 
going to the implementation 
stage. 

Mr Gubert believes any one 
of three outcomes is likely by 
the end of the decade: the sta- 
tus quo; a technical solution 
that Is too technical for the 
users; or a fast-track solution 
dominated by the largest oper- 
ators. 

“World number one is the 
one in which there Is total con- 
fusion - as there is at the 
moment - as to what a precise 
standard is." Different custodi- 
ans communicating in their 
own, proprietorial, language is 
costing the industry “millions 
of dollars”, says Mr Gubert. 
Each message has to be trans- 
lated, by computer or manu- 
ally. For small operators, the 
big costs could come on the 
capital side as new standards 

Consensus, while hard to 
achieve, is the only way 
the industry as a whole 
can embrace new 
standards and make 
them work 

are implemented and systems 
have to be upgraded or 
replaced. 

“The second world is where 
we see the emergence of a mas- 
sive data dictionary - a bible - 
which people find very difficult 
to understand and to imple- 
ment So we will have a techni- 
cal solution but the solution 
will be too complex." 

Mr Gubert's third, and 
favoured option, is the emer- 
gence of a fast-track of a lim- 
ited number of operators that 
already handles most or the 
business. “It has to be a very 
prescriptive mechanism to 
implement standards that will 
cover the vast bulk of our mes- 
sage requirements." 

He acknowledges this could 
create culture and status prob- 
lems; “People don't like being 
left off the list.” But he 
believes it is the only realistic 
approach and the one most 
likely to satisfy the needs of 
the largest portion of the busi- 
ness. 

Yet others argue that con- 
sensus, while hard to achieve, 
is the only way the industry as 
a whole can embrace new stan- 
dards and make them work. 

“To make this work we need 
to get as wide an agreement 
and as wide a participation as 
possible," says Mr Adams. 
“Everyone’s got everything to , 
gain. If we don't do this, we , 
will be just right back where 
we started, so we tend towards | 
the 80-20 rule: If you try to 
automate everything you're , 
going to fail, and fail big-time. I 
You've got to concentrate on I 
what is really important." I 


Custodians face rising demand 


Contin ued ^ _ 

d-wt-rtss-si* 

in/flrst out basis, 

th _ industry has a 

the securities 
P^^JSTand there has 

harmonised the ose 


identification numbers. 

Unfortunately there are no 
comparable standards existing 
in the derivatives markets and 
this is partially because of the 
life span of derivative 
products. 

“With the addition of a 
variety of strike prices and 
delivery months there may be 
more than 50 different 
contracts available on the 
same underlying instruments 
at any given time. 


"Clearly the amount of time 
and effort required to 
winfritflin individual codes for 
such a universe would 
outweigh the benefits of 
standardisation,” points our 
Mr Dennis. 

“But the need to standardise 
the methods of communication 
remain as does the need to 
have a standard method of 
creating international security 
identification numbers," he 
adds. 


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Talk to the people 
who can. make Custody 
as individual as your 


Why Lloyds Bank Global Custody means service 

Kvery investment portfolio is unique. Differing investment 
objectives, time horizons and geographic asset allocations require 
the management of a portfolio to be a very personal process. 

To help you achieve your investment objectives you need a global 
custodian who can provide a service as individual as your portfolio. 

At 1 Joyds Bank we've developed new global custody technology 
which tailors custody, reporting and communications to your 
precise needs - not ours. And we will work al a pace which will 
give you the extra time you need to make crucial investment 
decisions or to respond to important corporate actions. In fad we 
think you will find our new technology to be a bonus not a barrier 
to doing business with us. 

U is not just technology, though. Behind our systems is a leam 
of experts with a level of experience, insight and care which 
could positively a/fccl your investment portfolio. 

To find out just how individual our global custody service can be 
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Securities Services 


GLOBAL CUSTODY AND UNIT TRUST TRUSTEESHIP 

I Juj.il-. | Link IV. 71 Ijuntanl Sinil ljirulun 1-C3P31JS. AMwnhfr of IMRO 



member aTSFA aihl IMRll 





A lthough the flow of 
funds into the world's 
emerging markets has 
eased in 1394. following a phe- 
nomenal burst of activity dur- 
ing 1993, their attractive ness as 
long-term asset investments 
remains undiminished. 

According to Standard Char- 
tered Bank the size of emerg- 
ing markets in terms of market 
capitalisation is set to double 
in five years, from its present 
level of around $2,000bn; while 
other commentators point to 
the fact that if the economies 
of the world's emerging mar* 
kets continue to develop at the 
rate of growth witnessed 
recently then, in about 20 
years' time, they could account 
for around half the world's 
equity market capitalisation. 

No wonder then that custodi- 
ans have, in general, not seen, 
a significant slowing in the 
generation of business, particu- 
larly as fund managers explore 
the possibilities of entering 
hitherto uncharted countries. 

While risks remain in many 
markets custodians note that 
in some cases settlement can 
actually be easier to execute 
than in some developed mar- 
kets. For instance, says Paul 
Bellamy, manag er in custody 
operations at Robert Fleming, 
some emerging markets are 
already Swift-orientated, par- 
ticularly in the Middle East, 
and have already moved to 
paperless trading systems. 

Nevertheless, it is clear that 
significant problems arise 
when investing in such fron- 
tier markets as Russia. Citi- 
bank raises a cautionary tale 
regarding Russia where 
demand is not necessarily sup- 
ported by the accessibility or 
availability of securities. There 
is no traditional equity market 
at present with a voucher sys- 
tem in operation. “The only 
way of ascertaining whether 
an investor owns vouchers is 
to obtain a photocopy of the 
investor list from the regis- 
trar," says the hank. “A photo- 
copy provides no comfort that 
one is actually the beneficial 
owner of the vouchers and the 
law is unclear on these issues. 
On the one hand, there are 
huge potential returns to be 
had. but these could prove to 
be worthless if the voucher is 
also owned by three or four 
other investors." 

Mark Mohius, of Templeton 
Emerging Markets Fund, notes 
that the question of risk alloca- 
tion and control has not been 
fully and completely 
addressed. 

"In the corporate arena the 
challenges are great indeed. 


Emerging markets: John Pitt on the risks encountered in some countries 

Frontier areas pose problems 


India: Naazneen Karmali discusses anti' 


Market capitalisation - emerging markets 


USSbfion 
: T.OOO 


G|SS&! 

CUSTODY 


1884 1385 1986 1987 1988 1989 1990 1991 1992 1993 


Allocations to emerging markets 

As a percentage of international investments 


CUStfcOY 


6% 

4% 


1989 

Sourcac Woman tntonznral 


The first difficulty is identify- 
ing the existence of those cor- 
porate actions, when they are 
taking place and what are the 
'ex dates’ and *pay dates'. 
Information flows about such 
matters are not ideal in emerg- 
ing markets so that the custo- 
dian's task moves to a hig h 
level of difficulty necessitating 
an extra degree of care not nor- 
mally associated with custodial 
responsibilities. 

"Co-mingling of client 
accounts by custodial banks 
presents another challenge to 
emerging market investors. It 
is clear that in many accounts 
in emerging country sub-cus- 
tody banks, assets of different 
investors are co-mingled so 
that in the event of mishap 
such as counterfeit securities, 
tracing the actual owner of the 
worthless securities becomes a 
major problem. Clients should 
demand separated accounts to 
ensure the viability of their 
holdings." 

Another important problem 
is the lack of foreign exchange 
convertibility. Venezuela is a 


typical example where there is 
no procedure for repatriation, 
while in South Korea, since the 
currency is not traded in Lou- 
don. for instance, conversion 
can only be done in Seoul, and 
custodians are dependent on a 
sub-custodian. 

Karen Janes, vice-president, 
regional network manager at 
Chase Manhattan Bank, also 
illustrates the example of 
Morocco. 

"Morocco is an old-fashioned 
physical market, and the main 
problem here is to do with for- 
eign exchange. For instance , 
settlement on the stock 
exchange is T+l but there is no 
way that an investor can get 
foreign exchange process in 
that time - it is more like T+4. 
The way round this is that peo- 
ple agree to trade a few days 
ahead, agree a price and book 
the trade for a few days later 
when the forex deal has been 
completed.” 

She remarks that growth in 
activity has been seen this 
year in eastern Europe and 
Africa, both north and south. 


in Africa the most prominent 
countries attracting invest- 
ment have been Morocco. 
Egypt, South Africa. Zimbabwe 
and Botswana. 

In eastern Europe there has 
been an increasing interest in 
Hungary and the Czech Repub- 
lic. The latter has not been an 
easy market to open, but hav- 
ing managed to get into place. 
Ms Janes says. Chase has seen 
a growth of interest, even 
though it will be some time yet 
before the country is ready to 
open for foreign investment 

C hase has been working 
with a local bank in the 
Czech Republic, 
although there are some basic 
problems in the way the mar- 
ket is structured. “For exam- 
ple," she notes, “the local sub- 
custodians are not able to have 
accounts in the central deposi- 
tory: it has to be the investors 
themselves. 

This means that you have to 
set up powers of attorney 
allowing the sub-custodians 
the legal right to settle the 
trade when they physically go 
to the central depository. 

“In the Czech Republic the 
majority of trading happens off 
market, with a few large 
trades. It is supposedly a scri- 
pless system, but to ensure 
that you are actually getting 
settlement you have to physi- 
cally go to the central deposi- 
tory and witness the confirma- 
tion. However, this process 
should change over time and 
there will eventually be on-line 
settlement.” 

India has long been a signifi- 
cant problem for institutional 
investors. Sanjit Talukdar, 
head of the India desk at For- 


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Hong Kong Marga Wulfgram 
London Hazel Lamb 

New York Mike Tierney 

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centers: Amsterdam Bangkok Barcelona Bombay Buenos Aires Frankfurt Geneva Hong Kong Jakarta 
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eign & Colonial, observes that 
problems with custody have 
been one of the biggest obsta- 
cles to the development of the 
Indian markets. 

This year, for instance, dose 
to $l00m has been turned away 
because of custody problems. 
International fund managers 
cannot use local custodians 
because often they do not meet 
international regulations. 

With deregulation of the 
market, foreign institutions 
and private sector mutual 
funds have become active, 
largely interested In block 
deals off market in B shares, 
which have a seven-day 
account cycle. 

Since these trades are not 
executed through the 
exchange, prices are not trans- 
parent. Paradoxically, there- 
fore. India is one market where 
transparency has fallen with 
the rise in turnover, he says. 

Another problem endemic to 
India is the sheer volume of 
paper work generated, the 
main reason why more and 
more trade has successfully 
moved off-shore into global 
depositary receipts GDRs, 
which the Indian authorities 
have been happy to see take 
place. 

There are vested interests 
ag ains t change, such as the 
establishment of a central 
depositary system. This would, 
in western, terms, be the best 
solution to the current difficul- 
ties. 

Next best would be instead 
of trying to get rid of the sys- 
tem as it stands, trying to 
tweak it at the edges. 

An attempt to do this has 
been the introduction of 
so-called “jumbo certificates”. 
Typically. Tndiar>Q d e al in qnan 
lots, that is 50 to 100 shares. 
The jumbo is a deal of at least 
1.000 shares, but because the 
retail market is not used to 
dealing in such large amounts 
a different price is fixed. 

Many custodians expect to 
see an increase in volume, 
since the allocation of funds to 
emerging markets is rising 
regardless of whether the mar- 
kets themselves are going up 
or down. Citibank, for 
instan ce, has plans to expand 
its custody network to include 
20 more countries by 1996. 
including the opening of a 
safekeeping facility in Moscow 
and custody services in a num- 
ber of African countries. 

Chase's Karen Janes sug- 
gests that investors have to be 
open-minded regarding invest- 
ment in new emerging markets 
and to work with them. Chase, 
she says, spends a lot of its 
time t raining sub-custodians. 


A paper 


Inadequate custodial capacity 
is a significant road block to 
foreign portfolio investments 
in India's stock markets. The 
value of such investments, 
which have been permitted by 
the Indian government 
January 1993, were SLTSbn at 
the end of September 1994. 
While this figure represents 
only a small percentage of the ’ 
total market capitalisation of 
SlOObn, It is expected to 
increase steadily. ft is esti- 
mated that portfolio invest- 
ments and Euroissues by 
Indian companies would 
amount to SStarSbn by Mmch 
1996. The number of foreign 
institutional investors regis- 
tered with the Securities 
Exchange Board on India 
(Sebi), the regulatory author- 
ity, has increased from 136 to 
229 January this year. 

The entry of these large 
investors tub put tremendous 
pressure on the few banks 
that provide custodial ser- 
vices. They find that their 
sophisticated sy s tem s cannot 
r foal with India's antiq uated 
settlement and transfer proce- 
dures. Transactions are 
heavily paper-oriented and 
require physical delivery of 
shams- F-flrh share certificate 
has to be individually signed 
along with a transfer deed. 
What makes it more cumber- 
some is nw i l w h iMo lots 
are gmaR The B o mba y stock 
Exchange, for mrampte , which 
accounts for 70 cent of the 
trading in the secondary mar- 
ket, recognises lots no largo: 
than 50 or 100 shares. 

“The problem in India is 
that there's paper, paper 
more papa-,” says Steve Page, 
wrinr m a nag pr securities ser- 
vices, Bnngfenng and Shang- 
hai Banking Corporation. “It 
is a retail system that finds it 
difficult to cope with the 
demands of wholesale inves- 
tors.” 

Last December, when for- 
eign portfolio Investment 
touched Slbn, custodians 
were overwhelmed by the 
masses of paper flooding 
through their doors. Con- 
fronted by a huge backlog in 
processing, they imposed 
strict trading l imi t s on their 
clients. New business was 
turned away. 

To cope with the increased 
workload, custodians have 
hpgn building capacity by hir- 
ing more vault space and 
s taff. Hongkong Bank and 
Citibank, the two biggest pro- 
viders of custodial services to 
foreign clients, have more 
than doubled capacity. Mr 


Page says that Hongkong 
Bank’s vault space is 200 per 
cent larger and the number Pf 
people in his department has 
increased ' from 40 to l&L 
Scene work has also been sub- 
contracted out ■ 

AH this has only been 
enough to meet. the demands 
of aviating clients. Trading 
limits have been revised 
u p war ds, but stiff exist; CuSr 
fexfians are hot open for new 
business as yet Mr Page sayfe 
that there is a dfrect carrel*-.; 
tion between foe number of 
shares and -the number of peo- 


- by flie thfrd qhsrtCT Of 1996-a 
new depository will jggfr 
greeted near Bombay wjffi hj 
capacity to bdfr SSQm sSaT 
certificates. HdswiShaveah 
automated storage. . . a ad 
retrieval system on a psfr wiffi 
international 8tandards.1he 


rate with Ya 
as that wiH i 


enstotefr 


The infrastructure costs of a 
custodial service in India are 
inordinately high and have 
kept other custodians away. 
Now service providers are 
slowly entering the market. 
Deutsche Bank*, began 

operations last month anH 
ABN Amro has announced 
that it wfll .be in business 
shortly. ; - 


S tandard Chartered 
Bank's Eqputor-Gftnto 
began in a limited, way 
last week. It now conce n tr ate s 
on servicing a small group «t 
15 important clients. The 
banks put a bar code on every 
share certificate to track ft at 
every stage of processing. 
Cohn Beattie, regional head 0C 
custody, sooth Asia, saySi 
“We had to put such innova- 
tions in place before wfa 
reached a" critical leveL Bring- 
ing off-the-shelf systems ate 
not any good fin: Bombay. . ■_ 

Twfian hanira and fmflnriat 

friKtitntinns such as file Unit 
Trust of India and the Hons- ' 
ing Development Finance 
Corporation, are keen, to 
establish custodial services. 
The State Bank of India, the 
country’s largest public sector 
b ank, has opened a securities 
services branch in Bombay 
that is custodian to same off- 
shore, country-dedicated 

funds 

The custodian with the larg-' 
est capacity is the stock Hold- 
ing Corporation of India, a 
company launched fay Indian 
financial institutions in 1988. 
ft could take on more busi- 
ness but is constrained by its 

CTnafl capita T base Of RsSnflm 

from seeking foreign clients. 
The corporation's custodial 
assets of $23bn belong to. 
domestic mutual funds and 
Indian financial institutions. 
Last year, it processed trans- 
actions worth &L3bn and Mr 
ft. Chandra aekarag, managing 
director, expects business of 
$5bn this year. He says that 


ley is a possible partner. / ; < 

Foreign. CTStodiana befievp. 
that solving problems is 
best a temporary measure 
does not address the more, 
systemic issues. One' way for - 
ward, they have suggested- li: 
to introduce institijttiofesi 
board lots of .1 fiOO or ni yffffc 
shares. While the Mai fib* 
favour with Sebi, Arad na g fr fr 
ers and brokers., have - beet* 
resisting it. They feartfiafc 
their holdings would become 
flhqoid and this .would result 
in. the additiona l headache of 
having to split -large certifr 
cates into smaHar.ones. 

To ease the paperwork, epfr 
todSans were aarifer aftoWed 
to introduce jumbo transfer, 
deeds that eovwedeaGh trans- 
action. Companies have also, 
begun Issuing, jumbo share: 
certificates, though the Bom- 
bay Stock Exchange does net. 
accept these as gbod deliv- 
eries. Sebi has recently 
approved the proposal that 
rTMtodta wg trade institutional 
board lots- between - them-: 


. This would. facing , down the 
risk factor relating tobad 
deliveries winch amount to 20 
per ceut at present Delays in 
settieznart. which occur eight 
times out of iff would get 
etinriwafnrt Mr Page says that 
in a few cases, shares are 
rejected. by registrars and 
have to -be sent back to the 
brokers. This increases risks, 
to investors trim have to waft 
six motitfas "before shares are 
registered' in their names,' A 
two-tier market would reduce , 
problems all around. Custodi- 1 
abs say that -If the, institu- 
tional market does kick off 
then it would lead to a papers 
less trading system, and a cen- 
tral securities depository. 

The government is expected 
to introduce lagiaigrinn ou a 
central depositary by the year 
esut The option of mufti-de- 
positories, , one for each 
region, is also being consid- 
ered. The stock-bolding corpo- 
ration . would like to be 
appointed as central deposi- 
tory and is working towards 
it. Fund managers do. not 
expect this to happen quickly. 


Every Minute Of 
Every Day, We Make 
Our Customers' 
Success Our Business. 


At State Street, our primary focus is 
helping institutional investors suc- 
ceed. That’s why we’ve developed a 
full range of integrated services 
designed especially to meet your 
needs, from investment manage- 
ment, domestic and global custody, 
and multicurrency accounting to 
cash management, foreign exchange 


and global securities lending. Our 
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meet today’s challenges, as well as 
tomorrow's. No rate how unique 
your objectives may be, we’ll put our 
eq*rience and expertise to vrarik to 
help you achieve them After ali, 
we’ve made your success our business. 


©t9949*SK«iHanfcsrfTnHtanpMr 


Boston • New York •!& Angles •Tbronb •Montreal 
Brussels • Luxembourg •Mu7ts£ • Dubai * Tokyo * HOfy 


MR® -Melbourne,*; 


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FINANCIAL TIMES TUESDAY NOVEMBER 29 1 994 


IX 


GLOBAL CUSTODY 9 


Russia: Nicholas Denton discusses 
the challenges of the final frontier 

Where ‘dead 
souls’ and fake 
shares abound 



Custody services tend not to 
be noticed when they work. 
They are the poor cousins of 
the securities industry, con- 
signed to the back office and 
out of the spotlight 

Only when safekeeping of 
securities and settlement of 
transactions are flawed does it 
become dear how vital they 
are to functioning markets. 
And In few places is custody 
less developed, and more of an 
Issue, than in Russia. Observ- 
ers call it "the single biggest 
deterrent” to western invest- 
ment in Rnssia. 

None of the usual assump- 
tions apply. Russia has no 
paper traded system because 
share certificates do not exist 
Instead, the evidence of owner- 
ship Is a name In a registrar’s 
book. For a share transaction 
to take place an agent, or 
agents, for both buyer and 
seller have to go physically to 
the company's registrar and 
re-register ownership. 

That Is easier said than 


There fs no paper-traded 
system because share 
certificates do not exist 


done. There are about 3,000 
registrars and those for many 
of the most attractive compa- 
nies, the energy giants, are far 
from Moscow and St Peters- 
burg. 

This logistical morass has 
given rise to a mini-industry 
in the sale of shares by bro- 
kers who do not actually own 
them. Apart from physically 
Inspecting a share register, the 
only evidence a purchaser has 
that he is baying shares from 
their rightful owner is an 
extract from the official share 
register. 

But, as a western hanker in 
Moscow explained, *if yon are 
wining to pay for an extract, 
yon can get as many as yon 
like”. So, although none admit 
to . haring been ..duped, them- 
selves, Russian bankers say 
that some businessmen, partic- 
ularly in the provinces, are 
doing a steady trade in fake 
extracts. The unfortunate buy- 
ers learn they have been 
deceived only when they try to 
add their names to the official, 
register and discover that 
their vendor does not appear. 

These fake extracts ore com- 
ing to be known as “dead 
souls” in a reference to the 
eponymous 19th century Rus- 
sian novel by Nikolai Gogol, 
whose hero bought np docu- 
ments establishing his owner- 
ship of serfs who were no lon- 
ger living. After the liberation 
of the serfs the Tsarist govern- 
ment compensated their for- 
mer owners, a scheme which 
Gogol's hero cashed in on, 
using his proofs of ownership 
of “dead souls". 

But even for careful inves- 
tors, who avoid buying fake 
shares by sending their agents 
to personally inspect the share 
register in Siberia, or wher- 
ever it happens to be located, 
the difficulties have only 
begun. A registrar is allowed 
to take up to three days to 
alter the books and the agent 
may have to hang around and 
queue. The official is allowed 
to charge a transaction tax 
and the rate can reach as high 
as 5 per cent of the value of 
the deal. 

That is. if the buyer is lucky. 
The official will sometimes 
decide that a piece of paper- 
work is missing and send the 
agent back to Moscow. Some 
companies snch as Gasprom, 
the Russian gas g* 8 ®**. 
obstruct by exercising bright 
of first refusal and offering a 
laughable price to the 

Getting hold of shares » d«£ 
flcult enough; 
them is a more faydaMJjg: 

problem. According ^Rnssfen 
law, any euteipnse witt 
than LOOQ S“™5*“2LS 

nhlieed to entrust its register 
to # “separate” organs*™; 

«r < of r»»S 

w the company ami 
SS.TLteite Ore compa- 
ny’s hcaddoarteis. , 

shares will “—^Lirjnflpeiiced 
record. A theory 

just say rpue registra- 

sold its shares. or 

tint lw* ore. "It coold 

dcstrOJ llrt todcfW“ <1 ' *° ,ie - 

s £* a 

assvfs- 

tan in Moscow- fc ij^an- 

That is PJ ec Sbased com- 

sworid, a Wnd^J the 

Russian metojs “£j£ noyarS k 
occurred ®*L me jt er one of the 


producers. Transworld alleges, 
and factory officials confirm, 
that a 20 per cent stake in the 
smelter (worth $300m) con- 
trolled by Transworld proxies, 
was deleted from the records 
by factory administrators. 

Officials at the Krasnoyarsk 
smelter say they deleted Tran- 
sworld holdings from their 
books because of irregularities 
in Transworld's initial pur- 
chase of the shares. But west- 
ern investors are troubled by a 
system whicb gives factory 
directors - who are often hos- 
tile to outside buyers - the 
unilateral authority to alter 
shareholder registers. 

This danger can be minim- 
ised by regular audits by the 
custodian of the registrar and 
confirmation of the sharehold- 
ing. But that does not prevent 
over-issue: whereby the regis- 
trar arbitrarily creates new 
shares and dilutes an existing 
owner’s stake. 

Regulators, rather than cus- 
todians themselves, ought to 
be dealing with abuses by reg- 
istrars but they do not One 
custodian says: "The regula- 
tory regime is appalling, it has 
as many holes as a piece of 
cheese. And the authorities 
don’t enforce any of it any- 
way." 

The problems do not stop 
there. Collection of dividends, 
a customary responsibility of 
custodians, adds a new layer 
of walk. Some Russian compa- 
nies, lacking liquid assets, 
offer their products as a divi- 
dend payment. A vacuum 
cleaner company would issue a 
dividend in vacuum cleaners. 

Money dividend payments 
are complicated by the inade- 
quacy of the banking system. 
A bank transfer does not gen- 
erally make dear the source of 
the dividend payment which 
can be confusing for an inves- 
tor with a varied portfolio. 

An investor, or its custo- 
dian, feces a challenge, too, in 
learning of shareholder meet- 
ings. The postal service Is inef- 
ficient and often notification 
arrives after the event takes 
place. Companies are obliged 
to publish details of share- 
holder meetings in a widely- 
read publication bnt many 
print the information in the 
local works newspaper and 
leave it at that. 

No wonder one custodian 
says: “You need a good sense 
of humour." But many serious 
investors are not laughing. 
Paul Greatbatch, of emerging 
markets fund manager Geue- 


TTie fear of western 
investors is that their 
shares will vanish 

sis, says: “We have chosen not 
to go into Russia on the basis 
that there is no suitable cus- 
tody. There Is no one there 
that can guarantee you title to 
the shares that you own.” 

Pension fund investors are 
even more cautious and US- 
based institutions have a legal 
requirement to ensure that 
custody and settlement are 
secure. “We clearly need 
proper custody for the big 
institutions to move in,” says 
Nancy Curtin, head of emerg- 
ing European markets for Bar- 
ings Asset Management 

The hunger of western insti- 
tutional investors for Russian 
shares, together with their 
concern about custody, give 
birth to a significant opening 
for providers of custodian ser- 
vices. CS First Boston, the 
leading international invest- 
ment bank in Moscow, has 
built its dominant market 
position on the comfort it pro- 
vides for western investors. 

But CSFB’s custodian ser- 
vices are secondary to Its 
broking operations and insti- 
tutions prefer to deal with 
independent custodians- Banks 

such as Chase Manhattan, Citi- 
bank and ING Bank are now 
responding to demand and 
exploring the establishment of 
asset servicing units. 

Costs will be high. Chase 
Manhattan expects to hire six 
staff just to fly to distant cor- 
ners of Rnssia and register 
shares. A flight from Moscow 
to Vladivostok can cost 9350 
and hotel bills for extended 
stays add up. Nevertheless fees 
will be commensurately above 
western levels. Custodians in 
any case say they are setting 
np Russian operations to pro- 
ride a frill service for interna- 
tional clients rather than to 
make fat profits. 

Then there is also the chal- 
lenge- Rnssia is the final fron- 
tier. Bnt Yvonne Rogers, of 
Chase, is not so sore that cus- 
todians, much-maligned for 
being boring, will find excite- 
ment in tbe east “Custodians 
are a conservative bunch. Tm 
not sore whether this tiring is 
good for their heart rale.” 


W hen Barton Biggs. 
Morgan Stanley’s 
global strategist, 
turned maximum bullish on 
Asian markets, he sparked an 
eastward-bound stampede into 
a part of the world which was 
ill prepared for floods of for- 
eign money. Paper-based 
systems buckled, bottlenecks 
expanded and, in some cases, 
custodians caught in the mid- 
dle were forced to dose their 
doors to new business. 

As Darwin Doo, director of 
institutional services with 
Standard Chartered Equitor 
Group, says: "The good fortune 
of markets turns out to be a 
nightmare for custodians.* 
Standard Chartered Equitor 
Group, like Hongkong Bank, 
operates in the region as a sub- 
custodian handling on-the- 
ground execution for the glob- 
als who do not themselves 
have an agency network, such 
as State Street. 

“If it is a paper-based mar- 
ket, then as a sub-custodian 
you are always vulnerable to 
sudden increases because those 
markets are less efficient. In 
other places where there is a 
central depository, such as 
Hong Kong and Thailand, it is 
relatively easy to absorb large 
volumes,” says Jeremy Davies, 
senior manager for Asia Pacific 
Securities Services at Hong- 
kong Bank. 

On the Kuala Lumpur stock 
exchange, turnover on April 15 
1993, just before the boom, was 
a typical US$0.96bn. Less than 
a year later, during the peak at 
January 5. it had surged to 
USS2.02bn - higher than Wall 


The Pacific Rim: Louise Lucas on the eastward-bound stampede 

Unravelling the nightmare 


Street 

Equitor Group was closed to 
new business in Malaysia for 
six months, after expanding 
the local staff base to 225 at the 
peak (in Mar ch this year) from 
45 at the beginning of 1993. 
Citibank, after dosing its doors 
in Malaysia, Is now open on a 
selective basis. 

Even worse problems were 
encountered in India, where a 
US$250,000 deal can translate 

Hie western institutions 
are the most demanding 
investors the Asian 
markets have met* 

into a truckload of scrip, bring- 
ing an “unduly high” degree of 
risk to the custodian and his 
clients. 

Says David Handmaker, 
vice-president at JP Morgan in 
Hong Kong: “The western 
institutions are the most 
demanding Investors the Asian 
markets have met. They Invest 
huge amounts of money, they 
come from mature markets 
and expect things to look as 
Hoar> and as easy through the 
global custodian on a new mar- 
ket as happens on the stock 
exchanges of New York or Lon- 
don. Their job is to seek 
returns and they cannot sit 


and wait for custodians to 
make the markets efficient" 

But the markets are becom- 
ing more efficient, as govern- 
ments - often advised by the 
custodians - seek to eliminate 
the problems of the past years. 
In the Philippines briefs have 
already gone out to tender and 
Indonesia plans to move to a 
central depository system 
starting from the middle of 
next year. In Kuala Lumpur 
automation 1s already under 
way. 

Other Asian markets were 
quicker off the mark, including 
Hong Kong, T hailand, Taiwan 
and Sri Lanka, which last put 
in fuDy automated and clear- 
ing systems before toe floods 
of money ramp rushing in. 

Among the emerging mar- 
kets, China scores highest in 
terms of efficiency as the coun- 
try’s two exchanges started life 
with scripless systems. Custo- 
dians such as Citibank worked 
with the stock exchange in 
Shanghai to derise processes 
and procedures when it set up 
its central depository. 

Christine Tam, vice-presi- 
dent of Citibank in Hong Kong, 
says: “In China we sat down 
with the stock exchange offi- 
cials and went through the pro- 
cedures with them and 
explained international inves- 
tors’ perspective and percep- 


tion of risk. Then we helped 
develop a system to box In 
those risks. This is the advan- 
tage of China over a paper- 
based system - it started with 
a blank piece of paper, so there 
was not masses of paper, regis- 
trars or existing processes to 
work with." 

A further demonstration of 
the global custodians’ role in 
weaning emerging markets 
towards maturity came when 
the Malaysian central bank, in 
a bid to quell speculation in 
the ringgit, insisted foreign 
banks with big ringgit deposits 
pay a reserve on those deposits 
- a move tantamount to telling 
foreign depositors their money 
would earn negative 3 per cent 
interest 

For the banks who were 
holding cash on behalf of 
investors waiting to buy stock 
this was a nightmare. Mr 
Handmake r says it was down 
to the global custodians to 
explain the situation to inves- 
tors, to absorb the 3 per cent 
levy, and to sit down with offi- 
cials of Bank Negara and 
explain that not all deposits 
added up to currency specula- 
tion, but were Instead a symp- 
tom of the settlement system 
then operating in Kuala Lum- 
pur. 

The flip side of greater 
sophistication automation 


in emerging markets is that 
new entrants are enticed in 
and customers expect to pay 
less for the custodians' ser- 
vices. 

Competition in Asia has 
grown, and custodians talk of 
pitches where the contract is 
carried off by thB manager 
quoting zero foes (looking to 
earn his living from added ser- 
vices such as stock lending). 

Mr Doo says: “From what 

The markets are 
becoming more efficient, 
as governments seek to 
eliminate past problems 

people are saying in the mar- 
ket place, there might be a big 
shake-out among the big global 
custodians in the coming two 
yeans. There are just too many 
competitors.” 

For the global custodians it 
has also become more competi- 
tive, says Mr Handmaker. 
“Any pressure the subcustodi- 
ans are seeing, the global cus- 
todians see first It is common 
for people to say to global cus- 
todians: 'You are just the con- 
duit, why am I paying you so 
much money? 1 So the global 
custodian goes to the subcus- 
todian and cuts him down. 
Both the global and subcusto- 


dians are always running to 
catch up.” 

Custodians are responding to 
this pressure by ensuring pric- 
ing is competitive and beefing 
up the services offered; both 
vanilla services such as infor- 
mation and trade settlement, 
and newer added valne ser- 
vices such as proxy voting (as 
pension funds, especially 
American ones, play a more 
active shareholding role), 
catering for Individual invest- 
ment decisions within pension 
funds, contractual income and 
settlement or stock lending. 
Demand for custody of fixed 
income instruments in the 
Asia Pacific regions is also 
expected to grow. 

State Street, like Citibank 
one of the world's top five big- 
gest global custodians, adds 
valne in the area of technol- 
ogy, which it uses to produce 
high value custody services 
such as perfonnance measure- 
ment and portfolio analysis, 
which looks at investment 
returns, risk, currency attribu- 
tion, trade execution (for exam- 
ple flg m pflring ' broker commis- 
sion against strike price over a 
period of time to see how effi- 
cient brokers are), soft dollar 
information, currency overlay 
management and universe 
comparisons. 

Robert Williams, managing 
director of State Street in Hong 
Kong; says: “Very few clients 
only use us for custody. That 
cross-selling is what tends to 
protect your margins as your 
product matures. But part of it 
also is to keep the product 
young; to keep enhancing it" 


Cedel custody 

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global service reinforced by 
effective local support 

They provide a secure home 
for over 60,000 securities 
through a network of 
carefully selected and 
top-rated depository banks 
around the world. 

Whether it is simply 
collecting coupon payments 
on time or undertaking 
more complex financial 
activities, GedeFs custody 
services are comprehensive 
and reliable - providing us 
with the secure and efficient 
administration we require.” 


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X 


FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 





I t is one thing for institu- 
tional investors to Hex their 
collective muscles under 
the gaze of companies whose 
shares they own, but it is quite 
another to deliver the knock* 
out punch that sends an 
entrenched, inefficient and 
profligate management into 
the history books. 

For that, investors say. what 
you need is a really good custo- 
dian, particularly if you are 
talking about making your 
voice heard at companies you 
own abroad. 

Since 1988, the US Depart- 
ment of Labour has interpreted 
the Erisa laws, setting out the 
rules under which US pension 
schemes are to be adminis- 
tered, to mean that there is an 
obligation to scheme members 
to exercise their rights at com- 
panies in which they have a 
stake. 

As a result, custodians esti- 
mate that US pension funds 
vote nearly all the time and on 
every issue which is laid before 
shareholders at domestic cor- 
porations. 

Investors in other countries 
are far less diligent about vot- 
ing their shares, but are 
increasingly interested. In the 
UK, the National Association 
of Pension Funds, through its 


T here are probably as 
many ways to spread the 
risk in dealing with sub- 
custodians as there are sub- 
custodians to share it, says 
Alistair Reid, of Barclays 
Global Securities Services. 

The question of who bears 
the risk and bow moch it 
should cost is provoking 
increasing interest among cli- 
ents, particularly as they move 
their investments into new 
markets where traditional cus- 
todians fear to tread. 

“In the area of risk, the 
question of subcustodian risk 
has taxed the market for some 
time," said Valentine Feerick, 
head of global trust and cus- 
tody at Mellon Trust Europe. 
"There Isn't another business 
in the world where you hire 
someone to do a job who isn’t 
responsible for the work of a 
subcontractor." 

For the UK's Prudential, 
which has excited the global 
custody Industry by deciding 
to outsource its £40bn portfo- 
lio of UK and international 
securities, there was only one 
answer to the question. 

"Subcustodian risk is some- 
thing we want nothing to do 
with," said David Hanson, a 
director of Prudential Portfo- 
lio Managers, the fond mnn - 


Voting rights: Norma Cohen looks at the procedures for shareholders 

The cost of making your voice heard 


Voting Issues Service, is call- 
ing shareholder attention to 
contentious items on corporate 
agendas at the annual general 
meeting. The NAPF says the 
incidence of corporate voting 
has risen dramatically from 
the less than 20 per cent level 

recorded just a few years ago. 

Voting on foreign shares by 
British shareholders, however, 
remains sketchy. 

In July, the US Department 
of Labour clarified the obliga- 
tions of US pension funds to 
vote their foreign proxies, say- 
ing that there is the same obli- 
gation to vote shares abroad as 
there is to vote them at home. 

“What do clients want?" 
asked Meade Reynolds, man- 
ager of global corporate actions 
in the global custody division 
of Mellon Trust. "BaslcaUy 
they want a vote in every sin- 
gle market and at every annual 
general meeting in every mar- 
ket they are in." 

Clients not only want to 
vote, they want to know the 


substance of issues they are 
voting on. For instance, Mr 
Reynolds said, if a new firm of 
auditors is appointed, clients 
want to know more about the 
previous firm. Also, clients 
want to see proof that their 
votes were actually cast 

Service of this type is dearly 
likely to be costly. 

Steven Davis of the Washing- 
ton D.C.-based Investor 
Research and Responsibility 
Center (IRRO, says the Depart- 
ment of Labour does offer one 
caveat "The Department said 

that ppiwinn plan pffjdds can 
properly decline to vote a 
proxy where they judge that 
the costs would outweigh any 
benefits," he said. 

However, because several of 
the large public sector schemes 
bad been actively - and suc- 
cessfully - prodding their cus- 
todians to cut the cost of over- 
seas voting for several years, 
there are few markets where it 
can be said there is no obliga- 
tion to vote, Mr Davis said. 


Global voting iiy US institutions 


Percentage of-bon-US proxies voted 

B0% - — — — 




60% — ; 


-.m 


. 1991 . 1992 

Sourco: ■nG.WfcMnsWi DC - ~ 

Indeed, Americans have been 
found to outnumber domestic 
shareholder voters in markets 
such as Australia and the 
Netherlands where locals do 
not have the instinctive urge 
to vote their proxies so consci- 
entiously. 

Among large schemes, the 
state of Connecticut has been 
successful in working with its 


. 1993 1894- 


custodian for the past few 
years and Is now able to vote 
in most markets in w hich it 
invests. 

An IRRC study found that 
the percentage of non-US 
proxies voted has risen dramat- 
ically in the past few years 
from 24 per cent of all shares 
held in 1991 to 71 per cent 

Mr Reynolds said that Mel- 


lon Trust, which operates in 43 
foreign markets, takes the 
view that corporate actions 
and proxy voting are part of 
the entire package of services 
which a subcustodian takes on 
when a contract is negotiated. 

Therefore, tome should not he 
ad ditio nal significant costs 
associated with it 

State Street Bank has also 
been successful in negotiating 
contracts with subcustodians 
which envisage no additinnni 
charges for proxy voting ser- 
vices. 

Mr Davis notes that until 
recently, many subcustodians 
had to be dragged "kicking and 
screaming" to perform the task 
of proxy voting abroad. How- 
ever, given growing client 
demand, some are now helping 
to alter rules in several coun- 
tries which make the costs of 
voting unacceptably high. 

Mellon Trust has compiled a 
list of the seven most expen- 
sive countries in which share- 
holders can exercise their vot- 


ing rights, with Sweden lead- 
ing the pack. There, an institu- 
tional investor most pay 9300 
to cast a proxy ballot at a 
meeting. 

Mr Reynolds explained that 
in Sweden, the authorities 
insist that the beneficial owner 
of shares be the actual voter. 
This requires the custodian to 
obtain a power of a tt orn ey to 

vote on the pension fund’s 

behalf. 

Also ranking pmnng high- 
cost centres is Greece, where a 
proxy vote costs 1214, Finland, 
where the cost is $213 and Italy 
where the cost is 8128. to Italy, 
physical representation at an 
AGM is required so the sub- 
custodian also incurs the cost 
of air fares and/or hotel bills in 
proxy voting. 

Other expensive countries 
are Argentina, Portugal and 
Venezuela where the cost is 
$100 each. 

“Only these seven countries 
appear to feature proxy voting 
costs high, enough to raise 


Sub-custodians: who bears the risk? Norma Cohen considers the options 

New areas where traditionalists fear to tread 


agement arm of the UK life 
insurer. 

In coming up with a short- 
list of 10 international banks 
to compete for the contract, 
Mr Hanson said it was made 
clear that a condition of win- 
ning the contract would be 
that the bidder assnme the 
risk of any failure to perform 
on the part of subcustodians. 
Any bank which was not pre- 
pared to go some way towards 
that goal was removed from 
the short-list, he said. 

Of course, the Pru, with one 
of the world’s largest global 
custody contracts to award, is 
in a secure position to demand 
exacting conditions of any 
bank. However, not all cus- 
tomers are in such an enviable 
position, nor are all of them 
sufficiently well-informed 
about the issue to make such a 
demand. 

At Barclays, Mr Reid said, 
the hank stood behind its sub 
custodial network, indemnify- 
ing clients against losses. Typ- 


ically. Barclays uses its own 
branch network where possi- 
ble. so that the number of sub 
wfchwHans is Hmtt wl. 

The most dangerous markets 
for investors are the emerging 
markets, where local banks 
which could act as subcustodi- 
ans may not be subject to suf- 
ficient regulation, or may not 
have the administrative capa- 
bility to handle client custody. 

Mr Reid noted that banks 
viewed some new markets as 
simply too risky to operate in 
successfully. They feel that cli- 
ents wishing to invest in those 
markets may do so but at their 
own peril, and must be respon- 
sible for selecting the subcus- 
todian, and live with any 
losses. 

Where a Barclays branch is 
used, the bank offers clients 
tiie opportunity to check their 
assets in the relevant country, 
he said. Where a subcustodian 
is used, Barclays asks that 
bank’s auditors to provide a 
"comfort letter" assuring Bar- 


Met equity capital flows worldwi de 


USS to* on 
175 





.1966 1987 1908 1989 1990 .1981 1982 1983; 

Soma. Bating* ’ • ” * 


days that it is fulfilling its 
contractual obligations. 

At Mellon, the bank will 
assume all the subcustodian 
risk with the exception of 
eve nt s foiling under the force 
majeure rfnnco "That means 
things like military coups,” 
Mr Feerick explained. How- 
ever, he notes, there is a price 
for assuming risk. "Ton 


might quote a slightly lower 
price for the service if the cli- 
ent assumes the risk.” 

Rank of New York, one of 
the world’s largest global cus- 
todians, stands behind the sub 
custodian for all operational 
errors, said Richard Cramp- 
ton, managing director at 
BONY. “We will see our cus- 
tomer harmless and sort it out 


with the subcustodian.” 

One of the big concerns 
about subcustodians is the 
local Jurisprudence - the 
extent to which local law gov- 
erning assets held in trust Is 
likely to be upheld by the 
courts. "Once a year we get a 
lawyer to opine on the predict- 
ability of the courts in any 
country in which we operate,” 
Mr Crampton said Mr Cramp- 
ton notes that the only law 
which forces custodians to 
monitor their subcustodians 
is Rule 17-S-5 of the US Mutual 
Fund Act. This stipulates a 
minimum capital requirement 
for subcustodians, insists 
that they operate in environ- 
ments where trust law is com- 
parable with that in the US. 
As a result, Mr Crampton said, 
"there are some central Afri- 
can countries where US 
mutual funds cannot invest”, 
because they cannot find 
appropriate snb-custod ial 
arrangements. 

However, he said, it would 


he unreasonable to expect 
BONY to guarantee the sol- 
vency of any sub-custodial 
bank. In any event, he added, 
most countries recognised the 
legal distinction between pro- 
prietary assets and those held 
In trust for others. Trust 
assets might not be daimed by 
a bank’s creditors or regula- 
tors in most jurisdictions. 

The only dang er to clients 
comes through their nwh bal- 
ances, which may be held at a 
h ank which s uddenly becomes 
insolvent, Mr C ram pto n says. 
However, he offers the com- 
forting thought that "in most 
of the really diabolical mar- 
kets of this world, you 
wouldn't have much cash on 
deposit anyway.” 

Moreover, he says, in the 
newer emerging markets - 
and Indeed, even in several 
mature markets — clients are 
at for greater risk from the 
clearing and settlement of 
securities transactions than 
they are from their local custo- 


questtons about whether the 
effort is worth the expense, 
tiie IRRC said. 

Other countries such as the 
UK. Australia and Hong Kong 
have made proxy voting easy 
and cheap, Mr Reynolds said. 

But. Mr Reynolds says that 
nowhere is it as difficult to 
exercise voting rights as in 
Japan. “In Japan, 85 percents 
all companies hold their AGM 
oh the day. Information 
Is girea out only two weeks in 
advance and instructions on 
voting must be lodged 10 busi- 
ness days before the meeting.” 

Given the difficulties of 
translating a large volume of 
documents, sending the trans- 
lations to shareholders and col- 
lecting the ballot cards, voting 

in Japan is a logistical night- 
mare. In June this year, on the 
day When most AGMs were 
held, Mr Reynolds said he trav- 
elled to Japan to hand-dehver 
the proxy votes and to attend 
one AGM. 

But Mr Reynolds says that 
US funds generally believe 
p r ^yy voting is worth it. "In 

Singapore and Malaysia, where 

companies pass these outra- 
geous compensation packages 
for former directors, the 
Americans are saying 'No 
way 1 ,” he noted. 


dten. The dangerous period is 
while a securities transaction 
is stm waiting to settle, rather 
than aft erwards. 

At Morgan Stanley, the issue 
of sub-custodial risk is a sig- 
nificant one, because the 
investment hank has almost 
no custody branches outside 
the US the UK. "We will 
indemnify clients against 
fraud, negligence and wilful 
misconduct,” said Ross Wbtte- 
trill, head of global custody. 
"If you don’t do that, you miss 
out on most of the larger man- 
dates.” 

Morgan Stanley says that, 
short of that, it will do every- 
thing it can to sort out opera- 
tional errors, some of which 
are the result of the client foil- 
ing to instruct the subcusto- 
dian on time. 

"We try to help,” Mr White- 
hill explained. However, the 
extent to which Morgan Stan- 
ley is prep a red to bear its cli- 
ents’ subcustodian losses is 
often a ftmetton of the value of 
the total account. "It gets 
down to how good the rela- 
tionship is,” he explained. For 
a client who had been squeez- 
ing toe fees and routing other 
business elsewhere, Morgan 
Stanley would be less willing 
to cushion the loss. 




i i 


World class in any market 

Primero er. su-dase e.~ :oocs ! os nercsoos 


Gar* Tie cie services ccmoietes 



aboration 


Largest European Global Custodian 


S230 billion under custody 


Covering over 90% of the world’s securities markets by value 


.vijSTSfx 

fi t i s | 


i % 'Z. 1 f % % 



If you’re talking global custody, 
we speak your language 


Barclays has been a leading force in global custody 
for over 60 years. Today, with assecs of more than 
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world's leading global custodians. 

Barclays provides custody services in 63 countries, 
with a proprietary network covering over 90% 
of the world's securities markets by value. With 
this rapidly expanding international network, we 
are constantly looking for new markets and new 
opportunities. We are, for example, the only 
recognised global custodian operating in the 
African continent. 

This extensive global capability is matched with a 
real commitment to partnership and innovation. 

We work closely with each of our clients to identify 
their particular needs and create solutions tailored 
to their specific business requirements. 

If you’re looking for more than just custody, we can 
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facilities for foreign exchange, cash management, 
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many other products and services. 

This strength, coupled with Barclays standing as 
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will help you to achieve the most effective and 
efficient administration of your portfolio. 

To talk global custody with someone who speaks 
your language, call 

UK- Robert Meyrick on +44 171 398 3192 
EUROPE - Martin Brennan on +44 171 398 3194 
USA - J Martin Burton on +1 212 412 3530 
ASIA PACIFIC - Guy Mason on +65 322 3997 



BARCLAYS 



Reaching a little bit higher has made us 
the leader in Global Securities Services. 


^1^^ CHASE believes that being a leader 
vr means continually seeking new and better 


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We are gratified that putting our customers first 
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Issued art corned bj Ihe dux Utfcrao &>*. HA. a mentor d SHI He 3* protects and 1 


Global Custodian’s annual Global Custody Survey. 
And Chase was #1 in Money Management Letter’s 
annual ranking of net assets gained. 

With today’s approach to investing, Chase is 
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ing markets worldwide. 

We mil continue to put our clients first. And 
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CHASE MANHATTAN 
PROFIT FROM THE EXPERIENCE* 

a fcatmd Awe n not onfable to prinM custom. 








*■•*-' 2 ' •-* 


. - ■ A ■ — 





Academic links with 
industry: strong 
ties .............Page IV 


FINANCIAL TIMES SURVEY 

BRISTOL 

Tuesday November 29 1994 


Development Corporation: 
evidence of regeneration 
efforts -Page VI 


City in search of a 
higher status 

Bristol has realised that it must take action if it is to 
improve its position in the league table of British 
cities. Roland Adburgham reports 


B ristol is a city in search 
of a new role. It is the 
economic hub of 
south-west En gland an d in the 
top 10 of UK cities in popula- 
tion. But two centuries ago. ft 
was the second city in 
England. For generations, it 
complacently lost ground in 
terms of status. 

The recession of the early 
1990s caused attitudes to 
change. During the 1980s, Bris- 
tol and the surrounding county 
of Avon benefited from busi- 
ness relocations from south- 
east England and a rapid 
growth in the financial ser- 
vices industry. But the recess 
sion not only curbed that 
growth but coincided with the 
impact of the peace dividend 
on the defence and aerospace 
industries, an Important part 
of the local economy. Only last 
week, another 550 redundan- 
cies were announced at British 
Aerospace’s plant at Filton, 
north Bristol. 

In consequence, the city has 
realised it must take action, if 
it is sot to slip further down 
the league table of UK . cities. 
There is a belated awareness 
that it has not fulfilled its 
potential 

That it has greater potential 
is undoubted. Mr Brian Leo- 
nard, director of the Govern- 
ment Office for the South 
West, one of England’s new 
integrated regional offices, 
says: “It should he a topflight 
national and European city. 
There is absolutely no reason 
why it can't be those things, 
because of its strengths -the 
stxwgths are enormous.” 

These inrinrie its proximity 
to the M4 and M5 motorway 
network, the existing Severn 
bridge to Wales and the second 
crossing, due to open in 1996. 
There are main-line railway 


links and a thriving port, 
although the local road system 
is inadequate. The maritime 
and trading history - the Soci- 
ety of Merchant Venturers, 
fo unded in 1552, is still influen- 
tial - gave the city six miles of 
quayside. Ther e are handsome 
Georgian and Victorian build- 
ings, even if the centre is 
despoiled by unsightly post- 
war blocks. And the county 
includes the world heritage 
city of Bath. 

For employers, Bristol and 
Avon offer a high standard of 
education with three universi- 
ties and a skilled workforce, 
especially in engineering and 
financial services. The west of 
En gland, according to an anal- 
yses by Coopers & Lybrand, the 
accountancy firm, is the larg- 
est UK regional centre for 
financial services in toms of 
employment A survey this 
year of 500 executives, carried 
out for Management Today 
magazine and Black Horse 
Relocation Services, showed 
Bristol was the most popular 
choice far relocation. 

The recession, however, 
showed up the weaknesses and 
caused Bristol to rethink its 
role. Perhaps because it offers 
an agreeable way of life, it is 
not a dynamic city -the only 
sense of ' urgency is at 5pm 
when people start heading for 
home. It lacks other qualities 
which make a great city. Its 
shopping is outclassed by Bath 
and although it is seen as rela- 
tively prosperous, it has been 
regarded as a city riven by fac- 
tionalism. 

The business community 
viewed the Labour-led city 
council as unwelcoming and 
obstructive. Partly in conse- 
quence, most recent develop- 
ment has taken place to the 
north of the city, in another 


local authority area. South 
Bristol, in particular, has been 
left with intransigent economic 
and social problems. There are 
other pockets of deprivation 
and many homeless people. 

Government showed its dis- 
dain for the city council by 
imposing a development corpo- 
ration in 1989 and rejecting 
two bids for City Challenge 
grants. Last year, the city 
failed to win European Objec- 
tive 2 funding for areas in 
industrial decline. 

The council, under local gov- 
ernment reorganisation, will 
benefit by regaining unitary 
status with the intended aboli- 
tion of Avon county council in 
1996. But the government has 
not accepted the argu- 
ment -which is supported by 
business groups - that the city 
should embrace more of the 
conur bati on 

Avon council, which never 
won popularity, is resigned to 
its fa te , but the city council 
has undergone a conversion in 
its attitude to the private sec- 
tor. “There has been a sea- 
change here,” commented one 
senior officer. 

T he change began with 
the sale of the port in 
1991 and has been fur- 
ther encouraged by a new chief 
planning officer, Ms Diana Ker- 
shaw, and chief executive, Ms 
Lucy de Groot, who was 
appointed in March. 

There is, Ms de Groot says, 
“a very genuine spirit of active 
partnership. There are real 
players to work with - we have 
a very good relationship with 
Bristol Chamber of Commerce 
and Initiative [the Chamber 
has merged with a business 
g tn gar group, the Bristol Initia- 
tive]. 

“What’s happened in the last 



year is a recognition that there 
are problems which cannot be 
solved by individual interests 
doing their own thing, or 
waiting for the next eyrie of 
the economy.” 

Mr Chris Curtis, director of 
the south-west Confederation 
of British Industry, comments: 
“We see at last local authori- 
ties realising that planning and 
land-use policies have a direct 
bearing on economic growth 
- at last, that is realised in 
Bristol" 

Part of the Government 
Office’s role is to ensure the 
south-west's case is given a 
fair hearing in Whitehall, 
which appears responsive to 
the evidence of changed atti- 
tudes in Bristol. This month 
£6 ,2m was granted to improve 
a deprived estate in Hartriifie. 

The city now has a sponsor- 
ing minister - Lord Astor, a 
national heritage minister - as 
a direct link with government 

The most significant, out- 
come or the spirit of co-opera- 
tion is the Western Develop- 


ment Partnership, a public and 
private sector forum set up last 
year to co-ordinate economic 
strategies in Avon and pro- 
mote the subregion. 

The partnership, together 
with similar bodies in the four 
neighbouring counties, has 
convinced t he Department of 
Trade and Industry to provide 
£100,000 initial funding for an 
umbrella agency to attract 
inward investment to the west 

Of En gland 

Within Bristol, another part- 
nership is the Harbourside 
project far what should be the 
city’s best water fr ont rite at 
Canon's Marsh. Typically, It 
had been allowed to decay for 
decades, apart from the nota- 
ble recent arrival of Lloyds 
Bank retail headquarters. 

The council is promoting 
Harbourside, with other land- 
owners and the chamber of 
commerce, as “the single most 
significant development in 
Bristol in the past 40 years”. 

The more positive attitude 
comes as the local economy 


shows some resurgence. Unem- 
ployment in the city's travel-to- 
work area has fallen to 8.1 per 
cent. The latest quarterly sur- 
vey by the chamber of com- 
merce showed 76 per cent of 
manufacturing companies and 
72 per emit of service compa- 
nies reported improvements in 
turnover, although fewer than 
40 per cent were operating at 

full capacity. 

“Undoubtedly there is a 
recovery taking place,” says 
Mr Curtis. “But the recovery is 
not spread evenly - it is only 
companies with a particular 
market position which are 
doing well, the others are 
static. Investment is certainly 
improvi ng, but employment in 
maiwifarf iwing in cnnHrming to 
decrease.” 

Mr D onald Merrylees, direc- 
tor of the Bristol and Western 
Engineering Manufacturers 
Association, says: “Things are 
looking better - tire majority of 
businesses are busier than two 
or three years ago. But there 
aren't long order books and 


margins are still fairly tight" 

Uncertainty about the recov- 
ery is reflected in the city's 
lack of clarity about its future. 
Manufacturing has become 
much less important than the 
service sector but, says Ms de 
(hoot “It can’t just be a pro- 
fessional city - there have to 
be thing s for the professionals 
to be doing." 

Mr Leonard comments: 
“Bristol can set its sights high 
-but it has to mobilise to be 
snc c^gf ul and that’s not easy." 
It needs, he believes, to look 
for wHipr and learn from the 
tactics adopted by other cities 
and regions. 

One new tactic is the Bristol 
Regeneration Partnership, 
formed by the public and pri- 
vate sectors to bid for project 
funding from the government’s 
single regeneration budget Its 
first objective is “to promote 
Bristol’s image as a vibrant 
European regional capital”. 

The city may not have that 
image yet, but at least it has 
the ambition. 


fli THIS SURVEY 


□ Financial centre: the 

headquarters of Lloyds 
Bank’s UK retail banking 
operations Is Bristol's Jewel 
In the crown Paged 

□ Professional services: 

Accountancy and law firms 
are wed represented In the 
city and the standard of ser- 
vice is high 1 Page I 

□ Economic development 
The need to respond to 
rapid structural change has 
caused (fie public and pri- 
vate sectors to devise a 
shared strategy Page IS 

□ Industry: a history of 

Industrial diversity has 
ensured that the city never 
became too dependent on a 
single Industry Page IV 



Nea Croucher, chairman of 
Bristol Tourism Forum, 
says there has been a turn- 
round on tourism Page V 

□ Transport Mnks: One of 

Bristol's strengths is its geo- 
graphical location. But it 
lacks an International 
regional airport Page V 

□ The port has been trans- 
formed since it was priva- 
tised three years ago. 
Together with the second 
Severn bridge K is a catalyst 
for development — Page VI 

□ Community enterprise: 

How an information ‘high- 
way* Is helping to stimulate 
regeneration of a deprived 
area — Page VI 

□ COMPANY PROFILES 
Colleagues Direct Marketing 
Badgertne 

Paragon Book Services 
GWR Group Page VB 


□ Production Editor: 
Philip Sanders 



* 


• i 




*“• 



7 - 

: xiL L..- ' .■ 





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We built the Spine Road, which provides a vital North-South Bristol link, in only 4 1 /? 
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• : 


FINANCIAL TIMES TUESDAY NOVEMBERS 



BRISTOL II 


Bristol as a financial centre 


Symbol of a resurgence 


Stand high on Brandon [fill, 
near the centre of Bristol, and 
look south over the impressive 
city panorama. 

This city, the successful, 
thriving business capital of 
Britain's south west in the 
L980s, has since suffered a 
painful recession and the 
decline of many of its tradi- 
tional Industries. 

Down below Brandon Hill, 
however, is what many Bristol 
people believe is a symbol of a 
resurgence In the city[s for- 
tunes; Bristol's “jewel in the 
crown", it is large and spectac- 
ular. sitting squat on the 
waterfront at the heart of the 
city’s docks - the headquarters 
of Lloyds Bank's UK retail 
banking operations. 

Lloyds’ decision to move its 
retail operations to the city 
- where it now employs about 
1,500 staff- in September 1991 
is seen by many as the final 
seal of approval of Bristol as a 
leading financial centre. It is 
on this role that Bristol people 
are pinning their hopes for the 
city’s future. 

"Bristol has suffered from a 
severe recession and from its 
switch from an engineering 
and merchant-type background 
to a more service-orientated 
economy.” says Mr John 
Burke, chief executive of the 
Bristol & West, Britain's elev- 
enth-largest building society, 
which has Bristol as its home. 
“But there are now positive 
signs of recovery and there is a 
growing realisation that its 
attractions now make Bristol 
second only to London as a 
financial centre." 

Bristol & West employs 
about 3,300 staff. 1,000 of them 
in Bristol, and has a network 
of about 170 branches, 64 of 
which are in the south-west 
region. 

The fact that many leading 
national and international 
companies have chosen to 
locate in Bristol over the past 
few years - Lloyds Bank and 
the Bristol & West are not 
alone in choosing Bristol as a 
home - is testament to the 
qualities the city has to offer 
as a financial centre. 

The insurance industry, in 
particular life Insurance, is 
strongly represented here. The 
most significant Insurance 
start-up in the past few years 



The futuristic Spectrwn buMng, near the city centra nctnc ipta «» <*» «*» 



John Burke; There are now positive signs of recovery* 


National Westminster Life 
- chose Bristol as its base; and 
the UK’s most successful direct 
marketing company. Direct 
Line, is shortly to open an 
important new operation in the 
city. 

According to a recent report 
on financial services in the 
west or England, by accoun- 
tants Coopers & Lybrand, 
about 55,000 people in the Bris- 
tol area are now employed in 
the financial services sector. If 
the professions that provide 
support for that sector - ac- 
countancy and the law - are 
included, the number rises to 
67,000. 

The insurance industry 
accounts for about 51 par cent 
of this total, the report finds. 


Hanking and Financ e, another 
important sector, accounts for 
23 per cent - the Bristol bank 
Tyndall, Lloyds' and Courts’ 
private banking operations and 
the merchant bank Singer & 
Friedlander can all be found 
within the city. 

Building societies account 
for 22 per cent; venture capital 
and other smaller sectors 
account for the remainder. The 
local Chartered Institute of 
Bankers has no fewer than 
1.454 members. 

Hie report finds that the 
total assets controlled by finan- 
cial services organisations 
headquartered in the west of 
England, with Bristol as its 
capital, is now in excess of 
£190bn. 


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The qualities that have 
drawn these companies to the 
west and to Bristol in particu- 
lar are numerous. Mr Michael 
Edwards, deputy managing 
director of the Insurance Ser- 
vice - the direct insurance arm 
of Royal Insurance - lists most 
of them: 

“We chose to set up business 
here because of the good qual- 
ity and largely underemployed 
workforce, the exceptionally 
good road, rail and air links, 
the pleasant environment and 
the excellent support services 
such as PR, marketing, design 
and print," he said. “The peo- 
ple here are fairly lively and 
optimistic,’* he adds. 

Tbe Insurance Service, 
boused in the futuristic blue 
Spectrum building, near the 
city centre, has been based in 
Bristol since Its start-up in 1987 
and now employs 500 people. 
The direct insurance sector, 
which first began in 1985, was 
hardly touched by the reces- 
sion. says Mr Edwards. By the 
end of last year it had a 20 per 
cent market share of the UK 
motor insurance market. “U is 
great for Bristol to have grow- 
ing industries such as ours 
here." he said. 

Add to Mr Edwards' list the 
strong links that exist between 
business and Bristol's two uni- 
versities and business school, 
and the large supply of skilled 
graduate labour these provide 
and it is easy to understand 
why companies are attracted to 
the city. 

“Bristol is an international 
magnet for the insurance 
industry and for finance," said 
Mr Edwards. 

Graham Bowiey 


T he quality of professional 
services is crucial to 
Bristol’s success as a 
financial centre, and from this 
point of view it is well placed. 
Accountancy and law firms are 
well represented and the stan- 
dard of service is high. 

“The accountancy profession 
is very healthy in Bristol. The 
big six national firms are here 
as well as some smaller firms," 
said Mr fan Robinson, manag- 
ing partner specialising in cor- 
porate finance at KPMG Peat 
Marwick, one of the largest 
accountancy practices in Bris- 
tol with 17 partners and 260 
staff. 

“This is a well-fished pond 
for file client and there is a 
very good choice of profes- 
sional advice available." he 
said. 

"Regional law firms are win- 
ning business from London 
firms. In Bristol, we are com- 
peting on quality and winning 
on price to the extent that we 
are now a force to he reckoned 
with," said Mr Jeremy Phillips, 
a partner at Eversheds Holt 
Phillips & Buck, a recent addi- 
tion in. Bristol to the Eversheds 
national network of legal 
firms. 

Mr .Phillips is optimistic 
about Bristol’s future and the 
role the professions have to 
play in it “Bristol has a bright 
future as a financial centre. 
There are some very encourag- 
ing signs and that is one of the 
reasons why it was so impor- 
tant for us to have a represen- 
tative In the city," he said. 

After years of lobbing, Bris- 
tol has recently been granted 
its own mercantile court, one 
of only two outside London. 
The hope is that it will provide 
an opportunity for Bristol to 
make further headway against 
London. 

Osborne Clarke is probably 
the leading law firm in Bristol 
- and probably also in the 
whole of the south-west region. 
It has a staff of 300 in Bristol, 
including 28 partners, and acts 
for, among others, the local 
independent television fran- 
chise holders HTV, the local 
electricity company SWEB and 
local health authorities. 

Osborne Clarke is in a strong 
position and is expanding -it 
has an annual fee income of 
about £12. 5m, almost double 
that in 1989. 

“The message nationally is 


G uests to lunch with 
Courts & Co’s bank in 
Bristol’s Com Street 
the historic business quarter 
of the city, are greeted by a 
frock-coated Mr Bruce McCoH, 
its manager, and asked to sign 
the visitors’ book with a quill 
pen. 

While this welcome sets 
Courts apart from the usual 
reception that customers 
receive at a ba nk , it is evi- 
dence more of traditional val- 
ues than its present-day way 
of conducting business. 
Coutts, founded in 1692, is 
anxious to show that private 
banking, for from being out- 
dated, is gaining appeal with 
people who want a more per- 
sonal service. In recent years, 
it has been opening branches 

ia several UK cities. 

The big banks -and Courts 
is owned by National West- 
minster - have been coming 
round to the same opinion. 
Lloyds Private Banking, sec- 
ond to Contis in terms of total 
funds under management, 
began as an adjnnct to the 
retail bank but adopted that 
name in 1992 to gain a distinct 
identity. It has 31 offices and, 
last year, moved its Bristol 
branch to new premises in 
Clifton. 

For Courts, Bristol was only 
its second branch outside Lon- 
don (the first was at Eton). It 
opened in 1976 and subse- 
quently a small office was 
established in Bath. 

The south-west is seen as 
having a big potential for pri- 
vate banking. Lloyds says that 
in the first half of 1994 it 
gained more than 600 clients 
at its offices in the south-west 
and south Wales and £145m in 
additional funds. This brought 
the total to more than 8,500 
clients and £1.4bn, accounting 
for a quarter of its national 
business. 

Private hanking aims to pro- 
vide a more personal service 
than the high street banks. It 


PRIVATE banking 


A more 





Coutts & Co's bank in Com Street, Ow cay's historic buskiess (Riarter 


is, Mr McCall says, about "get- 
ting close to people and under- 
standing their needs and we 
have the time to do this.” 
There is an increasing empha- 
sis on asset management, with 
the vast majority of clients 
opting to give the bank discre- 
tionary Trtgnagpmgwf: of thHT 

funds. 

Inevitably, many existing 
customers are elderly, but 
Coutts says new clients tend to 
be in their 40s and, often, have 
made large sums in s ailing or 
floating a business. 

Mr Nigel Richardson, man- 
ager of Lloyds Private Bank- 


ing in Clifton, says: “Bristol 
produces a very high volume 
oS new business. There is a lot 
of wealth in tine area. It used 
to be old ladies and widows, 
but is now tending to be 
younger people who have 
made their way In business 
but don't have time to look 
alter their own affairs.” Tbe 
branch has 1,400 clients with 
£200m under management 
In the case of Courts, which 
has 1,206 a ccou nt s at its Bris- 
tol branch, am average balance, 
of at least £3,000 most be kept 
in a c ur ren t account to avoid 
charges. Mr McCoH says: “Peo- 


ple are buy be ® 
and are not terribly exerted L,, 
what £3,000 wouMearnin tiw 
Halifax, after tax at 40 pet 
cent* • For Itad managenMst- 
the usual entry . point b 
£ 250,008 and cfcacgeaare nego- 
tiable. 

Lloyds turn a minimum Hr 
fund management of £75490 
in ftee assets. Ifr Geoffr ey BoT 

ley, chief manager of" invest- 
ment services, says: *Otie 
thing we don’t seals our ow 
products - if we didi they 
would have to - be better. We 
would .have a. Very! slim , 
defence if they didn't perform 
we£L” The foe Is determined 
by the value of the funds - In 
Lloyds 1 case, it is ton mmmi i 
per cent' and subscription 
charge of *140. 

Courts and Lloyds are both 

anxlons to stress that tbe per- 
sonal touch is '.not at the': 
expense of professionalism. - 
Coutts cwnmentsT "We haw a 
global expertise and depth of 
knowledge - wefte in. 17 juris: 
dictions around the world end 
have fund managers In five 
key locations Investing 
money." .,'v . 

Lloyds,' like. Courts, culti- 
vates an image to distinguish - 
it from ordinary retafi bank- 
ing. In. CBfton, it occupies a 
large Victorian: house, tody 
identified by a discreet brass 
plate. The, house, complete 
with conservatory, has domes- 
tic furni ture and rims to cre- 
ate an atmosphere in: which 
CHeuts fed at home. It is in 
dMirp contrast to most peo- 
ple’s main contact with their 
bank -a hole-in-the-wall cadi 
dispenser. • - 

Roland Adburgham 


Graham Bowiey on professional and business services 

Quality is crucial 


that we can offer clients supe- 
rior access to our partners, 
that we have a very high 
degree of technical skill and 
we offer value for money." said 
Mr Leslie Perrin, a partner spe- 
cialising in litigation . 

Second to Osborne Clarke in 
the region is Burges Salmon, 
nationally renowned for its 
expertise in agricultural law. 
Be van Ashford, Veale Wasbor- 
ough and Wansbroughs Willey 
Hargrave are the other leading 
Bristol firms. 

Most of the present growth 
in the legal profession in Bris- 
tol is being seen in litigation 
and corporate finance. 

Accountancy is also focusing 
on corporate finance. “We have 
seen a very substantial 
increase in corporate finance 
activity since the spring of 
1993.” said Mr Andrew Hill- 
man. a partner specialising in 
corporate finance at Touche 
Ross in Bristol which merged 
with BDO Binder Hamiyn in 
October. 

“Whereas in 1992 we were 
doing only two or three trans- 
actions, last year we undertook 
13 corporate finance transac- 
tions," said Mr Hillman. 

“Audit and tax are also 
growing, partly because of rela- 
tionships made through the 
corporate finance deals but 
also because of the ecoaomic 
recovery." 

He said; “For three to four 
years our clients have kept 
their heads down but now 
increasingly they are out 
looking for business.” 

“Business is coming to Bris- 
tol,” said Mr Hamilton of 
KPMG Peat Marwick. "Incom- 
ing firms can get a whole 
range of professional services 
including accountancy, legal 
advice, venture capital and 
stockbroking. AD of it is here 
and it is in good shape.” He 
estimates that this year his 
firm win be doing 50 per cent 
more business in transactions 
terms than in 1993. 

Solomon Hare is smaller 
than the "big six” accountancy 
firms but is nevertheless one of 
the largest of the Independent 


practices in the West Country. 
Its clien t base, says Mr Nicho- 
las Reeve, a partner at the 
firm, has tpndprf to be smaller 
public limi ted companies with 
a market capitalisation of 
about £50m “which are rela- 
tively plentiful in this region.” 

He said: “On several of our 
deals this year we have man- 
aged to persuade clients that 


The professions face 
important challenges 
over the comkig years 


the team should be Bristol- 
based and so we have attracted 
work to the other Bristol pro- 
fessions - lawyers, brokers and 
merchant banks." 

If there is a weakness In the 
financial support services in 
Bristol, it Is in stockbroking 
and merchant banking, which 
are relatively poorly repre- 
sented. 

“There is only one local 
stockbroker to speak of cater- 
ing for corporate clients and 
there is only one merchant 
bank," said Mr Hillman. “That 
is a real weakness in the 
south-west On the other hand. 


there is a high level of actuar- 
ial support” 

Singer & Friedlander,- the 
merchant bank, has an office 
in Bristol with a staff of seven 
covering the south-west and 
Wales area. 

On the stockbroking side, 
there are Time firms operating 
in the Bristol area. Probably 
two of the largest firms are 
Albert E. Sharpe and Laws & 
Co. Albert E. Sharpe, the Bir- 
mingham-based broker, took 
over the private client 
operations of Stock Beech in 
Bristol following the, demise of 
British and Commonwealth, its 
parent Laws & Co., part of 
Allied Provincial,' has a staff of 
34 dealing mostly .with private 
c lients in and around die Bris- 
tol area. - 

Rowan Dartington, of which 
Singer & Friedlander is the 
largest s h areholder, deals more 
for institutional corporate cli- 
ents - the split is 70 per cent 
institutional and 30 per cent 
private clients, according to Mr . 
Barrie Newton, managing 
director. He says the firm, 
which has a staff of 15 in Bris- 
tol has 20 corporate broker- 
ships and is dealing for 80 
mainstream blue chip institu- 


' tions such as pension funds 
and insurance companies. 

Despite their general healthy 
state, there is a wide consensus 
among those in tiie industry 
that the professions in Bristol 
face important challenges over 
the coming yeans.' . 

‘ "Historically, many large 
companies had their headquar- 
ters in Bristol and as a result 
used the city's financial ser- 
vices a great deal,” said. Mr 
Robinson. “But many of the 

i ferislmHnalrfln i have now dis- ■ 

appeared and been replaced by 
subsidiaries and their head- 
quartos in London use London 
services. In the last 12 months 
there has been the beginning 
of some return of locally-based 
companies and it is our job to 
convince them to use oar ser- 
vices here in the city.” . 

The professions’ success will 
depend critically on their con- 
tinuing ability to offer high 
quality services at competitive 
prices and with a high degree 
of accessibility compared to 
their London counterparts. - 
Mr Martin Warren, a partner 
at law firm Eversheds Holt 
Phillips & Buck, said: “The rise 
of the regional firms will con- 
tinue to depend on being com- 
petitive, providing quality ser- 
vices in specialist subjects and 
offering accessibility. Clients 
want accessibility, despite the 
age of the fax and the phone, 
and however big the London 
firms are they cannot, do that 
in the regions." 


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FINANCIAL TIMES TUESDAY NOVEMBER 29 1 994 


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BRISTOL III 


Roland Adburgham looks at economic development 


Shared strategy devised 


During the 1980s, Avon was 
seen as one of the more suc- 
cessful sub-regions in the UK, 
with an employment rise of 12 
per cent, the biggest increase 
for any mainly urban area. The 
county has 23,000 businesses, 
employing 400,000 people. 

The growth was led by busi- 
ness and financial services 
with companies relocating 
from London and the south- 
east This masked the decline 
in traditional manufacturing 
such as tobacco, transport, 
food, chemical and mechanical 
engineering. 

By 1991, flnawfifll and h»«ri- 
ness. services accounted for 16 
per cent of the workforce while 
distribution, hotels and cater- 
ing employed 21 per cent Man- 
ufacturing accounted for only 
18 per cent 

The recession braked inward 
investment from south-east 
England and jobs were shed 
from aerospace and defence 
industries. Between 1989 and 
1991, the census of employment 
shows, defence jobs fell by 10 
per cent tourism by 12 per 
cent and construction by 17 per 
cent 

An overdue awareness of a 
need to respond to rapid struc- 
tural change has caused the 
public and private sectors to 
devise a shared strategy for 
economic development In 1993, 
they formed the Western 
Development Partnership in 
Avon, an umbrella organisa- 
tion to pull together previously 
uncoordinated activities. 

Its partners Include all seven 
of Avon’s councils, Bristol 
Chamber of Commerce and Ini- 
tiative. the regional Confedera- 
tion of British Industry and 
Trades Union Congress, uni- 
versities and Avon training 
and enterprise council. 

The WDP, led by Mr Richard 
Brown, its chief executive, has 
had a big impact in stimulat- 
ing Bristol and Avon to be 
more pro-active. Taskforces 
have been set up for aerospace, 
high technology and financial 
services which are intended to 
lead to specific initiatives. 

A technology and innovation 
management team , with fund- 
ing from tiie European Konver 
fond, has been established to 
advise sma ll businesses to. 
develop new products and.- 
bring themtomarket .• 

In September, the WDP pro- 


duced an agreed strategy for 
economic development, includ- 
ing a target of creating 7,000 
jobs a year and of reducing, 
unemployment at a faster rate 
than the UK average. The 
strategy seeks to create a 
“marketable and recognisable 
region- in the west of England. 

One of the difficulties for the 
south-west in promoting Us 
case has been this difficulty of 
defining the region, and the 
multiplicity of development 
partnerships which sprung up 
during the recession. All seven 
counties have their own bodies 


rooting the city as a business 
location. 

Another initiative is a North 
American Business Club, set 
pp in February last year to pro- 
mote Bristol as a gateway to 
the UK and Europe. It has 
gained members from 100 com- 
panies and is the only UK 
member outside London of the 
British-American Business 
Council, based in Washington, 
DC. 

la the summer, the club 
hosted a conference on US gov- 
ernment procurement and, this 
month, a trade mission from 


training cultures. Among the 
rest of the business commu- 
nity, it was seen as a purveyor 
of government training pro- 
grammes and had not estab- 
lished its profile as a business 
support agency. 

The survey showed that 
most employers recognised the 
need for change if they were to 
grow. They saw the need to 
improve quality, raise skill lev- 
els of staff and managers, and 
improve strategic manage- 
ment 

But the report commented: 
“A considerable gap still 




^AMEC 


Jobs In the construction industry feJt by 17 par cant between between TOSS and 1891 neuKijdrwarMw 


with the result that they often 
appear to compete rather than 
cooperate. 

After much lobbying, the 
Department of Trade and 
Industry is providing start-up 
funding of £100,000 for a single 
new agency - the West of 
ttn gfand Development Agency 

- which will seek to win 
inward investment for the five 
comities of Avon. Dorset, Glou- 
cestershire. Somerset and Wilt- 
shire. Devon and Cornwall 
already have a government- 
fimded development bureau. 

A chief executive for the 
West of England agency, which 
is chaired by Sir Michael Lick- 
iss, who heads the Somerset 
Economic Partnership, is being 
appointed and it will be based 
in Bath. But it is not yet clear 
how the relationship between 
the new agency and the WDP 
and other county organisations 
will evolve. 

In Bath, the city council 
itself decided this autumn it 
must give more priority to eco- 
nomic development and to pro- 


the Bristol-Florida chamber of 
commerce. More missions are 
planned next year. Mr Richard 
Dennery, the club's president, 
comments: "The awareness 
within the US of Bristol as a 
business venue is growing 
enormously.** 

An Initiative Tor Avon’s 
indigenous businesses is the 
setting up of Business Link 
one-stop advice shops, as part 
of the planned national net- 
work. A bid for funding, 
backed by Avon Tec and the 
chamber of commerce, has 
been made to the Department 
of Trade and Industry and it is 
intended Business Link should 
be fully established early next 
year. 

This should help Avon Tec. 
set up in 1991 and now chaired 
by Mr Colin Green, managing 
director of Rolls-Royce Military 
Aero Engines, to become better 
known. A survey of 820 
employers in the county this 
summer, showed the Tec's 
main impact had been on large 
employers with well-developed 


remains between recognising 
the need to change and 
responding to it." Less than 
half of the companies with 
fewer than 100 employees had 
sought help in these matters. 

Although 68 per cent of the 
employers provided tr aining , 
the survey found that a third 
of companies - mostly those 
with 10 or fewer employ- 
ees - were unaware of the Tec. 
Only a small proportion of 
employers had “any real appre- 
ciation of the role of the Tec 
and a detailed knowledge of 
the activities it undertakes." 

The report concluded that 
the Tec needed to work more 
closely with other business 
support agencies through Busi- 
ness Link. “However, if this 
initiative is to make a real 
impact, it needs to develop a 
strong portfolio of services to 
meet the changing needs of 
employers, particularly small 
and medium-sized enterprises, 
which all agencies, not just the 
Tec. have largely foiled to 
reach to date." 


I n Avon House, a block of 
brutal architecture in Bris- 
tol which is the headquar- 
ters of Avon county council, 
the lifts have an automatic 
voice intoning: “Doors dos- 
ing.” 

Soon, the doors will dose on 
Avon council itself. Its aboli- 
tion is one of the few near-cer- 
tainties of the local govern- 
ment review In England. 
Subject to parliamentary 
orders, there wiU be shadow 
elections next May to four new 
unitary authorities, replacing 
the existing two-tier structure 
of six district councils and the 
county council, which wiU dis- 
appear in 1996. 

Bristol will then regain the 
unitary stains it lost 20 yean; 
ago in the last reorganisation 
of local authorities. 

While there is broad agree- 
ment this will benefit the city, 
there is disappointment that 
the government appears to 
have accepted the focal gov- 
ernment commission’s recom- 
mendation to confine the new 
council to the city’s historic 
boundaries. 

The conurbation has expan- 
ded well beyond those bound- 
aries. notably to the north. 
The dty council believes that, 
in strategic and planning 
terms, the new authority 
should have a wider remit. 

This view is backed by busi- 
ness groups. Mr Chris Curtis, 
director of tbe regional Con- 
federation of British Industry, 
says: “We believe the curtail- 
ment of Bristol to historic 
boundaries is a serious mis- 
take - a lot of companies will 
continue to face a confused 
planning process, and possibly 
worse. Services are stm con- 
tinning to move out of Bristol, 
and tin? wealth-creating poten- 
tial of historic Bristol is 
declining and its capacity to 
deal with deprivation is being 
curtailed.” 

Instead, the local govern- 
ment c ommis sion, chaired by 
Sir John Banham, has 
attached more importance to 
the views of residents in outly- 
ing areas who are opposed to a 
Bristol “takeover.” In conse- 
quence, Northavon district 
council will merge with King- 
swood to form South Glou- 
cestershire, Bath dty council 
will merge with its neighbour- 
ing district Wansdyke, to form 
Bath and north-east Somerset. 
Woodspring, which is based 
around Weston-super-Mare, 
will become North-west Somer- 
set on its existing boundaries. 

Uncertainties remain over 
the transfer of powers. Avon 
council is by far the largest 


GWENT 


’Newport 






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Chipping 


AVON 




'Chew Magna 


Q) Avwwnouth docks 

(2) Royal Portbury 

(3) Sevemrida 

(?) Cribba Cauaawny 
(shopping oantnQ) 


© Aaoc West (business psik) 
© EmBraona Groen 
(?) Bristol Zoo 

© COfion Suspension Bridge ! 
Ann Gorge 


SOMERSET 


Local government review is ready to axe Avon council 

Bristol will regain 
unitary status 


employer in the county, with 
the equivalent of more than 
21,000 full-time employees and 
a budget of nearly £600m. 
However, nearly all the staff 
are expected to transfer to the 
new authorities. 

In Bristol, there is anxiety 
that toe dty council wfll not 
be given adequate resources to 
cope with its new status. The 
council argues that its present 
standard spending assessment 
has been inadequate. 

I t points out that a govern- 
ment-commissioned study 
ranks the city as tbe 42nd 
most deprived district ont of 
366 district authorities. The 
combined assessment of Bris- 
tol and Avon councils this 
year is £697 per bead of popu- 
lation, compared with £817 for 
Coventry, which was ranked 
the 45th most deprived. 

Hie dty councdl, supported 
by many businesses and 
organisations, is lobbying for 
the assessment to be 
increased. One issue is that 


Bristol, by being toe regional 
capital, provides services 
which those living in outlying 
areas use but do not support 
through their council taxes. 

The Bristol Cultural Devel- 
opment Partnership says the 
city’s current assessment “is 
more akin to a minor district 
than a regional centre." It 
fears the situation could 
become even more worse when 
toe city takes on responsibili- 
ties at present funded by the 
county conndL 

It says the county council is 
spending £400,000 this year on 
supporting independent arts 
groups. Nearly all of these arts 
activities are Bristol-based. If, 
under the reorganisation, 
Avon’s budget is disaggre- 
gated on a population basis, 
then tiie dty would face big 
problems in supporting artis- 
tic and cultural activities. 

Avon council itself is 
resigned to toe fact that toe 
government is determined to 
abolish it. Although, in strate- 
gic terms, its creation in 1974 


made more sense than the 
restriction this time of Bristol 
to its historic boundaries, it is 
widely regarded as ineffectual 
and has foiled to generate any 
popular rapport For many 
years it has been a hung coun- 
cil -the present make-up is 
Labour 34, Conservatives 25 
and Liberal Democrats 17. 

While there is a danger of 
farther indecision in the 
period leading up to its aboli- 
tion, Mr Graham B adman, 
director of education who has 
been also appointed head of 
external affaire to oversee the 
handover, stresses that for 
months the council has been 
working with district councils 
to prepare for abolition. 

One of the internal notes 
refers to “wind-down to ensure 
clean handover.” Once that 
has happened, there will he 
few reminders of the old 
county except in such bodies 
as the Avon and Somerset Con- 
stabulary. ■ 

Roland Adburgham 


k-ye(0P men! 
500 acres 







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It isn't just the Avon that flows into Bristol. Thanks 
ro Lloyds Bank, millions in investment do too. 

As a sign of our. commitment to the area, we 
\ s t moved there ourselves in 1990. And since 1993 
we have been one of the partners in the Bristol 


> co* 


fj; pjarbourside development project. 


ol. Thanks A scheme which is set to turn a virtual wasteland porenrial f 

>o. in the heart of the City into a thriving business, cultural partners ic 

s area, we and residential centre. clearly the 

since 1993 The vision for the area includes a Centre for the If yoi 

the Bristol Performing Arts, and over 600 new homes. partnershij 

Not to mention an office development with a any of our 

THE THOROUGHBRED BANK. 

Lkj^k Rrtfc Me » a nrabn uJ IMUU jnJ ihr BjnJta, MnJuVttbf. &-1* m< jnJ j h*.*,. LUAiWll Hi PO Brt lli.CinmHwBf.Cu»oi«W.BnuJ RS*" 7UI Trfrfhar «B0 M7 W 


porenrial for 3000 jobs. Thanks to Lloyds Bank and their 
partners in the Bristol Harbourside development project, 
clearly the tide is starting to turn along the Avon. 

If you would like to work in T , , 

partnership with us please contact liluyQS 

any of our branches. islBank 





- i =• 'J£S 



Professor fl o e s : resporttBng tp growth In the financial services sector 


Graham Bowley takes a look at 
academic links with industry 


Particularly 
strong ties 


Bristol Is borne to two 
successful universities, both of 
which enjoy a close relation- 
ship with commercial life in 
the city, across the UK and 
abroad. 

The Univers ity o f the West of 
England, or UWE, the former 
Bristol Polytechnic which con- 
verted to university status in 
1992, has its main campus in 
the north of the city. 

This area, close to the M4 
motorway and Bristol Parkway 
railway station, is undergoing 
rapid development and anyone 
travelling to the university will 
pass through a dramatic land- 
scape dominated by cranes and 
the skeletons of new buildings 
- the headquarters of the Min- 
istry of Defence procurement 
operations, and headquarters 
for Sun Life. 

The university is quite com- 
fortable with such rapid 
change unfolding around it 

“Being a former polytechnic, 
we have always bad good links 
with industry," said Ms Linda 
Skinner, director of the univer- 
sity's Centre for Research. 
Innovation and Industry, 
which was set up IB months 
ago with the help of a £160,000 
grant from Department of 
Trade and Industry. 

Its aim is to promote 
cooperation between the uni- 
versity and industry, to help 
local business and to explore 


ways of putting the universi- 
ty's research to commercial 
use. 

“What this centre does is act 
as a middle man between 
industry and academics - the 
university is very good at com- 
ing up with ideas but we do 
not exploit what we do as well 
as we could." says Ms Skinner. 
“Our researchers also work 
with companies to develop any 
unused patents, which the 
company may have, into some- 
thing which is commercially 
viable." 

Ties are particularly strong 
between UWE and local busi- 
ness. A quarter of the universi- 
ty's students come from the 
south west and 41 per cent of 
graduates take up employment 
in the region. “We draw many 
of our students from the region 
and we place a lot of our stu- 
dents there, so it is in our 
interest to promote Bristol 
because a thriving regional 
economy is absolutely vital to 
this university,” said Ms Skin- 
ner. 

Hie centre has a small-busi- 
ness liaison unit which pro- 
vides advice and help to small 
businesses within a 40-mile 
radius of BrlstoL “We are con- 
tinually askin g ourselves how 
we can interact better with 
industry in the region and how 
we can help businesses to inno- 
vate." said Ms Skinner. She 


BRISTOL 


University of the 
West of England 


A University that means business 


UWE Bristol currently has 19,000 students studying at 
certificate, diploma, degree and postgraduate lewis across a, 
wide range of disciplines. Many of our programmes have been 
officially rated as excellent 

We work hard to ensure that our students get the most out of 
their study - quality programmes, good facilities and a strong 
student support service. Our study programmes aim to make 
UWE graduates competent versatile and self reliant 
The university considers it vital to maintain strong links with 
industry, commerce and the public sector to ensure that our 
graduates ready do mean business when they move on. At any 
one time we have a wide range of training, consultancy and 
research partnership initiatives underway. 

UWE Bristol aims to offer the very best to students, the dty of 
Bristol itself has mudi to offer too In the way of culture and 
entertainment 

UK and Overseas study enquiries: Bra Makepeace, Centre for 
Student Affairs, Tal +44 (0) 117 976 3817, Fax +44 CQ) 117 976 3819. 

Industry and Research enquiries: Linda Skinner. Centre for 
Research, Innovation and Industry, Td +44 (0) 117 976 3876, 

Fax +4409 117 9763833. 

UWE Bristol, Frcnchay Campus, CoMharbour Lane, Bristol BS16 1QY. 
fVomotfrig educational opportunity and the ayyffcatfon of fcn ow fec &o 



jm-* s. m v * m s s 


... 






FINANCIAL TIMES TUESP A Y 


BRISTOL IV 



Situated En the centre of the city: Bristol University Ptoum 1*3**™*** Mmw 


estimates that of the five busi- 
nesses a week the centre talks 
to. 35 per cent end up doing 
some sort of collaborative work 
with the university. 

Although it has ties with 
most industry sectors, the uni- 
versity works particularly 
closely with the aerospace 
industry and Bristol's new 
high-technology companies. 

UWE works closely with 
Hewlett Packard, the second- 
largest US computer company, 
which has its European 


Bristol Business School 
has 3£0O full-time and 
part-time students 


research and development cen- 
tre on a site adjoining the uni- 
versity. The two are part of a 
group developing a new 
high-speed communications 
network for Bristol -an infor- 
mation superhighway for the 
Bristol area, called the metro- 
politan area network, or Bris- 
tol Man. 

dose by the centre, and also 
part of UWE. is the Bristol 
Business School, which has 
3,200 full- and part-time stu- 
dents working for degrees in 
business studies, international 
business studies, accounting 
and finance and financial ser- 
vices. 

"The latter is particularly 
relevant, given the growth of 
the financial services sector in 
Bristol," said Professor Mich- 
ael Bees, dean of the Bristol 
Business School. 

Each year as many as 200 
students are placed with indus- 
try in the UK and abroad as 
part of their sandwich year 
out The school also offers spe- 
cial manag ement qualifications 
for people already at work who 
wish to take their training fur- 
ther. 

The fastest-growing area in 
the school - and where the ties 
with business are the stron- 
gest- are the "partnership pro- 
grammes” which the school 
offers; courses tailor-made to 
the needs of a particular organ- 
isation. In this area, the school 
works closely with Lloyds 
Bank - which takes about 100 
people a year -the Bristol & 
West building society, NatWest 
Insurance Services, and also 
Avon county council and Bris- 
tol dty countiL to provide, for 
example, much, of these compa- 


nies' early in-house training. 

Bristol University, one of the 
UK’s leading universities 
which can boast several top- 
class research departments, is 
situated right at the heart of 
Bristol. 

Mr Don Carleton. press offi- 
cer. sai± “The university has 
both long-term strategic rela- 
tionships with local organisa- 
tions, ranging from very large 
multinationals to quite small 
companies, and at the other 
extreme short sharp relation- 
ships of some commercial 
value.” 

He said; “Agreements are 
struck at the highest level with 
companies, ranging from large 
multinationals to small local 
businesses, in acknowledge- 
ment that our futures are 
intertwined and dependent on 
each other. Then, at the more 
specific level, we have 
exchanges of staff and of 
ideas." 

The university has recently 
won a £lm grant from the Min- 
istry of Agriculture of Fish- 
eries and Food to carry out 
research on applying process- 
ing engineering to food. 

The university is heavily 
Involved, along with the UWE, 
the University of Bath and 
commercial partners, with 
planning for a science park 

- called Emersons Green 

- which is to be located to the 
north-east of the dty. The aim 
of the park is to attract new 
high-technology industries into 
the area. 

“These would create jobs but 
they would also be consumers 
of what the universities do 
best -there would be a strong 
demand for our hig h quality ! 
graduates and research,’’ said 
Mr Carleton. 

In anticipation of the park, 
the university is working 
closely on a EcuSm project con- 
cerned with advanced comput- 
ing technologies with Inmos, a 
subsidiary of France’s SGS- 
Thomson- 

Bristol University offers its 
own business degree - an MBA 
in international business at its 
international business unit 
This graduate course was 
introduced in 1991 and is now 
on its fourth Intake of stu- 
dents. The students, who come 
from all over the world, can 
spend time on placements at 
businesses in Bristol and have 
the opportunity of visiting uni- 
versities abroad. 


42,000 to 
113,000 sq.ft. 


of Stunning 




New Offices 


B ristol, it was recorded 
by an encyclopedia pub- 
lished In 1813, “Is gen- 
erally esteemed the second 
city in England, for trade, 
wealth, and number of inhab- 
itants." 

The encyclopedia listed, 
among the "considerable man- 
ufacturers," brass, copper and 
lead works, turpentine and 
sulphur works, and the mak- 
ing of woollen staffs, cotton, 
sail doth and lace. There were 
sugar houses and no fewer 
tban 15 glassworks. 

Two thousands ships were 
annually cleared through the 
city’s docks, but the encyclope- 
dia noted that, apart fro m Lon- 
don, Liverpool had become the 
greatest sea port is England, 
"having exceeded Bristol con- 
siderably of late years.” 

The loss of trade to Liver- 
pool was one reason why Bris- 
tol steadily slipped down the 
league table of UK cities. But 
Charles Harvey and Jon Press, 
in Studies m the. Business His- 
tory of Bristol, published by 
Bristol Academic Press, com- 
ment that the city has been 
much more than a ma r itim e 
centre in decline. 

“On the contrary, Bristol 
has for a long time enjoyed a 
diversified economy which has 
proved adaptable, resilient, 
and responsive to national 
trends." 

Industries have waxed and 
waned in the city, notably cig- 
arette, chocolate and footwear 
manufacture. The Wills com- 
pany began in the city In 1786, 
and when it became part of 
Imperial Tobacco early this 
century, had a workforce of 
< 3,000 people. Today, Imps 
employs only 600 people at 
Bristol and Avonmouth, mak- 
ing cigars. 

Other industries, such as 
railway locomotive and motor- 
cycle manufacture, have come 
and gone. The defunct Bristol 
coalfield at one time produced 
Lm tons a year. Aerospace has 
long been an important indus- 
try. but one which has been 
contracting. However, the FU- 
ton and Patchway works of 
British Aerospace and 
Rolls-Royce still employ a 
total of more than 10,000 peo- 
ple. 

In keeping with the history 
of industrial diversity, other 
businesses have arrived and 
the city has benefited by never 
being over-dependent upon a 
single industry. The service 
sector, notably in financial 
and professional services, has 
helped to compensate for the 
diminution of manufacturing. 

In recent times, one expandr 
ing industry has been that of 
media-related businesses. Bris- 
tol is the home of the BBC 
natural history unit, of the 
commercial radio company 
GWR, and of Aardman Anima- 
tions, which in March won an 
Oscar for its fi lm The Wrong 
Trousers. HTV, the television 
company, has its west of 
England studios in the city. 

United Artists, the US group, 
has set up a base at Aztec 
West in north Bristol for its 
cable franchise. By late 1997 it 
will have invested more than 
£320m in a 4,000-mile fibre 
optical network, cabling Bris- 
tol and Bath and sarronnding 
towns. Its workforce of 350 is 





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INDUSTRY 


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Diversity ensures that 
economy is resilient 


expected to increase further 
next year. 

Another recent arrival at 
Aztec West is Anderson & 
Lembke, a busine&s-to-busi- 
ness advertising agency set up 
three years ago to serve the 
high-tech sector. It chose Bris- 
tol, it says, "because of its 
easy accessibility, valne-for- 
money office accommodation 
and local creative talent" Also 
at Aztec West is Spandex. the 
supplier of sign-making mate- 
rials and computers to the 
sign-making ind us t ry . 


D irect a«fl telemar- 
keting is a growing 
business - British Tele- 
com has a 24-hour call centre 
in BristoL Colleagues Direct 
Marketing of Bath has proved 
highly successful. In January, 
NatWest Ventures completed a 
£8m buy-out from ACT &trap 
of Braun Direct Marketing, 
based in Bristol and Cfrences- 
te. Brums has a turnover of 
about £I9m and employs 400 
people. 

Compatex^rel&ted companies 
include Systems Team, a 
systems house set up in cen- 
tral Bristol in 1982. It has 
become a leader in providing 
services to professional associ- 
ations and membership organ- 
isations. 

Hewlett-Packard, toe US 
company, has one of its chief 
European manufacturing and 
technological bases an a 163- 
acre site at Ffiton. Its H-P Lab- 
oratories there, employing 270 
researchers and scientists, are 
its largest research centre out- 
side the group’s Californian 
headquarters. 

“We believe that Bris- 
tol - with its excellent univer- 
sities- is an excellent place to 
conduct advanced research, 
and that Bristol has much 


more to offer in. toe. area of 
' value-added services than 
strictly a goodplace to manu- 
facture products,” . Hew- 
lett-Packard says. 

More traditional industries 
include a Courage brewery 
and two small regional brew- 
ers, Butcmnbe and Smiles. The 
• drinks company Hiram 
Walker, renamed as a division 
of Allied Domeeq, has -its 
world headquarters in BristoL 

There is also a sizeable 
printing industry. Oakley 
Press this year completed sub- 
stantial investment in a fully- 
integrated pre-press and. press 
operation. Bat one long-estab- 
lished company, J.W. Arrow-s- 
mith, width began printing in 
the 19th century, has become a 
modi smaller business. 

Arrowsmith was recently 
the subject of toe city's longest 
industrial, dispute, which 
ended this autumn, after 18 
months of pMn»Biig- The <fis~ 
prate began over pay and too 
plant was picketed after the 
company dismissed 120 work- 
ers and de-recognised their 
GFMU ration. .. . . 

A related business in the 
region is packaging, with com- 
panies such as DRG and ASSL 
which hw w a 230m plant mak- 
ing corrugated packaging at 
Tate in Avon. 

Other manufacturers include 
Kotarfc, the specialist engineer 
in Bath, which increased its 
overseas markets during the 
recession and exports to more 
than 00 countries. Engineering 
company Strachan & Hen- 
sbaw, part of Weir Group* 
designs and supplies handling 
systems for nuclear power sta- 
tions. Christies Panel Products 
makes fitted bedrooms. 

One long-established busi- 
ness is Bryan Brothers, 
founded in 1913, which has 


become one of the UK's largest 
jaiyat^jHawnedraotor groups. 
Its contract hire hnsfoen has 
a fleet of 3*000 vehicles. ■ - 
. A newer comp a u&fa an old . 
tradition, is Axcbttectaxal 
Castings, a managememt 
startup In 1992.K Is ptemzfog 
further expansion after as 
injection this summer of 
£200,000 of equity and loan 
finance by 81, toe investment 
capital groups : 

To complete the"-' picture. of 
div er sity , at least one indnstry . 
has had a renaissance since 
the days of thelfllS encyclope- 
dia: the mannlacliHeof hot-air 
balloons (which were piloted, 
the encyclopedia said, by 
"aenmants.”) . ; 

.. .Mr Don Cameron, head -of 
Cameron Balloons which be 
founded tu Bristol in 1070, bas 

seen the company become toe 
. world’s Targest maker of pro- 
motional andisports balloons, 
botohotruir andgas-flRed.Tlie 
company makes about one a 
day and exports to mare than 
30 countries^ With a turnover 
of JtoLSm, U employs 90 people. 
“We, have nevsr; had a. redun- 
dancy, ■ Mr Cameron? says, 
“and it . is our goal never to 
have one." 


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Roland Adburghan 


Lack of foreign investment 


More American companies are 
based In the Bristol area than 
any other foreign-owned busi- 
nesses, writes Boland Adburg- 
ham. An analysis of companies 
with a Bristol postcode and a 
turnover of more than £lm 
shows there are 20 from the US 
and five from Canada. There 
are 10 Swedishowued compa- 
nies and five Australian, but 
only four French, three Irish 
and two German. 

The analysis was carried out 
for the FT by Jordan and Sons, 
the Bristol-based company 
information group. It shows 
the relative lack of inward 
investment from abroad in the 
area. Out of the 664 parent and 
subsidiary companies with a 
turnover of more than £lm, 
only 61 are foreign-owned. 
Neighbouring south Wales, 
with the benefit of its govern- 
ment grants, has been far more 
successful in attracting over- 
seas companies. 

The paucity of quoted com- 
panies headquartered in the 
Bristol area is also revealed by 
the analysis. Of leading parent 
companies, there are only 16 
with a full stock exchange list- 


ing and another four on the 
unlisted securities market But 
in this category, there are 219 
privately-owned businesses. 

Leading quoted companies, 
in terms of net tangible assets, 
include Wessex Water, South 
Western Electricity and Bristol 
Water. 

Of the £lm~plus companies, 
there are for more engaged in 
wholesale and retail distribu- 
tion than in any other activity. 
The figure of 27 per cent of the 
total compares with 13 per cent 
in banking, finance and busi- 
ness services, 12JS per emit in 
e ngine ering and 10 per cent in 
construction. Chemicals, met- 
als, mining or plastics compa- 
nies account for another 8.5 
per cent 

Jordans also analysed toe 
overall performance of nearly 
500 of the largest companies (In 
terms of turnover) in the Bris- 
tol area . According to the lat- 
est filings at Companies House, 
sales year-on-year were up by 
only L6 per cent but pre-tax 
profits jumped.26.1 per cent. 

companies were helped by a 
big decline in interest pay- 
ments of 16.6 per cent and a 


reduction in total borrowings 
of 5.5 per cent Average gear- 
ing foil steeply from 70 per cent 
to 39 per cent 

Profit margins improved by 
LI percentage points to 58 per 
cent and return on net assets 
rose slightly by L2 percentage 
points to U.8 per cent The 
wage bin was up by 3.5 par 
cent, but numbers employed 
showed a slight decline of 0.4 
per cent 

Bristol's economic signifi- 
cance in south-west England is 
shown by the fact that, out of 
5,614 company formations in 
toe south-west in the first 
eight months of this year, the 
city's postcode area accounted 
for 2,491, or nearly halt The 
peak month for Bristol was 
March with 405 for mations, but 
this had fallen to 232 in 
August -or 2J per cent of all 
company formations in 
England, Scotland and Wales. 


BUSIME9 

LOCATII3 

5S 

N 

LOCATM 

LOCA.no 

LOCATIO 

LOCATIQ 

LOCATIO 

LOCATIO 

BRISTC 

N 

N 

N 

N 

N 

N 

ML 

l| Voted Top Cil 
II For Relocatio 
iBy UK Execute 

1 

,es j 

Source: research canted 0 
Management Today Ifagc 

Independent research rea 
Bristol as an area of exedfo 

buriiess in Ifw Wat of Engl 
the following reasons; 
•Superb communicaiioas- 
HeaSwoto fust sue tat hour 
'A vast pool of skated kdxx 
•First doss R&DfdcMes 

‘ The pm^sufaent financial 
outside London 

•AbeautmpkxetoSiKm 
So if yuu'te thinking oTexj 
or relocating your business, 
us at The Western Develop 

u rbf 
utne 

jgnises 
nee for 
landfor 

'sdriue 

r 

centre 

iWOftL 
erafing 
talk to 
nertf 

Contact Mike Wat 

Tel 0117929 88 
Fax 0117 929 91 

Or anacti foot bndnea can! la 
and mafl Jt io The Ufeson Deieft 
PMneoHU. PO Bcot 606. Bristol 

'rniaHKVBOfWr^Ml 

84 

66 

DAM 

apnent- 

SB95RE 

KHSOP 


Bristol 01 17 927 9797 


London 071 7039393 



INDEX OF FT SURVEYS 

July 1992 - July 1994 


This index has been compiled for researchers 
and libraries and those who require a sound 
briefing on national and international subjects. 


A useful crass index of all FT surveys published 
in the above period, listed in alphabetical 
order and subject 


To receive your copy, send a cheque for £3.00 
made payable to Financial Times to: 


Marketing Department, Financial Times 
Number One Southwark Bridge, 
London SE1 9HL 
Tel: +44(0)171 S73 3213 


BRUGES TOZER 

ARCHITECTS 


Avon and Somerset Pofice 

headquarters 

advisers on 

BRISTOL HARBOURSIDE 


Design , Management and 


— ■ ^wrauiHff l 

Ouaen 

"1™ Tar nr, ■a? 







BRISTOL V 



isut-es that 
iS resilient 


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-- • J "~ TV 

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£g. 

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■’ - ,1 FT 


Roland Adburgham looks at the tourism industry 

A change of attitude 


Transport links serve the city well 

More air services 


A. bronze statue of a craggy John Cabot on 
a Bristol Quayside shows Mm gazing west- 
wards, towards the American mainland 
which he discovered almost 500 years ago. 
If he could look over his shoulder, he 
would see a wharf where his ship the 
Matthew, m which he set sail from the 
city's harbour, is being reconstructed. 

The new Matthew, being built with oak 
and traditional materials at a cost of 
is at the heart of an overdue desire by 
Bristol to stimulate tourism. The ship, a 
square-rigged caravel of 21 metres, will be 
launched neat September and in May 1996 
will be the city's centrepiece of an interna- 
tional festival of the sea. Then she will sail 
to Newfoundland to take part in the prov- 
ince’s 500th anniversary celebrations. 

The festival, organised by partners 
including the city council and Bristol 
Chamber of Commerce and Initiative, is 
intended to be the biggest twM in the UK. 
It is hoped to attract 800 ships from 
around the world and as many as lm visi- 
tors. For four days, the quays win be alive 
with exhibitions, concerts, other events 
and visits to the moored boats. 

With its cost already underwritten by a 
property company, the festival is the most 
striking example yet of a change of atti- 
tude in Bristol towards tourism. Overshad- 
owed by Bath’s status as a world heritage 
city, Bristol has until recently appeared to 
disregard the industry. 

This was despite evidence of tourism's 
importance. The West Country Tourist 
Board estimates the city has 750,000 stay- 
ing UK visitors each year, contributing 
£55m to the local economy. In addition, it 
has a big number of day visitors and is a 
popular place for visiting friends and rela- 
tions. 

For visitors from overseas, Bristol is the 
tenth most popular UK destination - with 
Americans arid the French leading the 
way. In 1992, there were 209,000 staying 
visitors from abroad. In total, tourism Is 
estimated to contribute at least £100m a 
year to the local economy, creating 
directly or indirectly 10,000 or more jobs. 

A consequence of Bristol’s lack of inter- 
est in tourism was that the city, despite 
being internationally known because of its 
trading history, failed to invest in the 
industry compared with rival UK cities. It 
has no sports stadium, concert hall or con- 
ference centre of national significance. 

The Matthew project and festival of the 
sea is evidence of a change of mind. Mr 
Neil Croucher, chairman of Bristol Tour- 
ism Forum, says: “A few years ago the 
private sector was tearing its hair out and 
asking what the city council was doing to 
promote tourism. The answer is that they 
were doing nothing. It was not recognised 
as an industry, nor as an area of poten- 
tial-" 

In the past three years, he says, there 
has "been a total turnreund and the city 
council is nothing short of excellent in 


putting money, time and commitment to 
tourism.” 

The forum itself, with representatives 
from the council, chamber of commerce 
and tourist industry, has been reactivated. 
A new strategy has been adopted to tackle 
the weaknesses - visitors, for example, 
consider Bristol inhospitable - and build 
upon the city's strengths of location and 
maritime heritage. In particular, it is seen 
to have more potential as a year-round 
destination for short-break holidays and 
business tourism. 



■ » 1— - ■ „ , . | - 

onsxoi nos impresm tenaniBno 


"Now everyone is working towards one 
goal,” Mr Croucher states. "We have the 
big plus of water right at the heart of the 
centre. We would like to see Bristol as a 
major European city, closely linked to 
waterside development By the year 2000, 
we should be in the position to promote 
Bristol as one of the most beautiful cities 
in western Europe." 

Mr Croucher is development director of 
the Exploratory "hands-on” science centre 
which, with nearly 200,000 visitors a year, 
is the most popular city attraction after 
Bristol Zoo. The Exploratory, outgrowing 
its space at Brunei’s Temple Meads sta- 
tion, may move to Harbourside, a water- 
front scheme which is hoped to include an 
electronic wildlife "zoo” and centre for the 
performing arts. A separate project is for a 
museum of commonwealth and empire at 
Temple Meads. 


Bristol already has the advantage of 
Impressive landmarks, fnrhirting Brunei's 
Clifton suspension bridge over Avon 
Gorge, the cathedral and St Mary Reddiffe 
church. Less well-known is that, despite 
wartime bombing damage and consequent 
ugly office blocks, there are 3,600 listed 
buildings. The Old Vic's Theatre Royal is 
the oldest working theatre In Britain, and 
John Wesley's chapel, built In 1739, was 
the world’s first Methodist chapeL Outside 
the uah century Exchange are the mer- 
chants’ fiat-topped “nails", the origin of 
the phrase "paying on the naiL" 

A more recent survivor is Brunei's ship, 
the SS Great Britain, launched in Bristol 
in 1843 and salvaged from the Falkland^ in 
1970. Nearby, the Victorian buildings of 
Underfall Yard are being restored. Along- 
side the floating harbour, which retains 
permanent high-water in the city's docks, 
there is an industrial museum and Araol- 
fini art gallery. Events such as the 
balloon festival and regatta attract thou- 
sands or people. 

Visitors might well be deterred by the 
cost of car parking, at £1 an hour, and the 
variety of shopping can not compete with 
Bath. But one deficiency perceived by 
tourists - the restaurants - is less 
well-founded. The 1994 Good Food Guide 
lists 10, three more than Bath and five 
more than Birmingham. Outride the city, 
there are distinguished country house 
hotels such as Ston Easton, a Grade 1 
listed Paliadian tnan^nn 

The city is also dose to some of Britain’s 
finest countryside, including the Wye val- 
ley, Cotswolds and Mendips. In addition to 
Bath, it is within reach of Cheltenham, 
Wells and Glastonbury and the seaside 
towns of Weston-super-Mare, Burnham-on 
Sea and Ctevedon. 

With these advantages, Bristol should 
have captured more business tourism. 
Despite having 2,000 four-star hotel beds, it 
is not among the top 50 UK cities for the 
conference trade. This autumn, an initia- 
tive was launched to correct this. Twen- 
ty-seven hotels and venues have formed a 
marketing consortium called Conference 
Bristol to promote it as a destination and 
provide a central point for bookings. The 
aim is to bring the city into the top 10 
conference destinations within three 
years. All the big hotels have also joined 
Bristol Hotels Association In what Mr 
Michael McGahey, chairman of the West 
Country Tourist Board, has described as 
"a new spirit of co-operation.” 

One area where there should be more 
co-operation is with Bath. The two cities, 
only 12 miles apart, could promote a com- 
plementary appeal for tourism. But there 
has been mitfijai suspicion and little com- 
mon interest, exacerbated by poor trans- 
port connections. Bath, In its cultural 
identity, has traditionally looked east- 
wards towards London. Bristol, like John 
Cabot, has looked westward. 


A strength of Bristol is its geographical 
location near the motorway crossroads of 
the M4 and MS. One can drive directly by 
motorway to London, south Wales, the 
Midlands and north, or to the far 
south-west, writes Roland Adburgham. 

Bristol also has two mainline railway 
stations. Parkway and Temple Meads, 
with a journey time to London of an hour 
and 20 minutes. 

It has a flourishing port, which is dose 
to the Severn bridge and to the second 
crossing which is being boQL The one 
obvious weakness is fts lack of an interna- 
tional regional airport 

While Bristol airport, south of the city 
at Lulsgate, has established itself as the 
south-west's leading airport, there Is an 
irony. The transport links, which other- 
wise serve Bristol so well, serve Lulsgate 
badly. It has no railway. The road into the 
city is a single carriageway. 

The airport is only a few miles from the 
MS motorway, but the roads to it are 
tortuous. 

It is this issue of location which hovers 
over a public inquiry being held to the 
Department of the Environment. British 
Aerospace wants to develop the airfield 
next to its FUton works in north Bristol 
into a commercial airport, with freight 
and scheduled services. 

It has all the transport links which 
Lulsgate lacks. 

Although, under the terms of BAe’s 
application, FUton would not be a fuDy- 
fkdged regional airport, business groups 
such as the regional Confederation of 
British Industry regard it as an essential 
step forward in the region’s economic 
development 

The inquiry was called after Northavon 
council, the planning authority, foiled to 
rale on BAe’s application within the stat- 
utory period. In recent years, thousands 
of houses have been bunt near FUton, and 
the council has been put under pressure 
to residents worried about noise. 

Northavon is now opposing BAe’s plan, 
even though the company argues that it 
must make better use of its airfield to 
safeguard the Filton works, where more 
than 5,000 people are employed. 

Bristol city council is also opposed to a 
FUton airport because it owns Lulsgate, 
which plans a new £14m terminal capable 
of handling 2m passengers a year but 
needs private investm ent. 

It is the success of Lulsgate, despite Its 
handicaps, which proves the demand. It 
had 1.2m passengers in tire year to March 
31 and made record pre-tax profits of 
£3. 6m. While most of its passengers are 
for charter flights, scheduled traffic is 
growing. In its winter timetable, Lulsgate 
1ms 170 scheduled departures a week, 
including (lights to Amsterdam, Brussels, 
Parts and Jersey. Although long-haul 
flights are restricted by it* runway, a 
daily Aer Ungns service has started to 


New York. Bryraon, the British Airways 
subsidiary, uses the airport as its hub. 

BAe proposes not more than 350,000 
passengers a year at FUton and contends 
that the two airports could coexist, with 
Lulsgate handling charter traffic. Bristol 
council says that FUton, If restricted to 
BAe’s announced limit, would do little to 
meet projected demand of about 4m pas- 
sengers to 2010. This demand would 



Cffton suspension bridge PWuraKt^fcmiArJWbor 


therefore have to be met at Lulsgate, but 
the council warns that the necessary 
investment might be frustrated by a sec- 
ond airport 

What does seem certain is that any 
investment will remain on hold until the 
outcome of the inquiry, due to end in 
January. 

While this is the most contentious 
transport issue in the region, it is by no 
means the only one. The construction of 
the Batheaston bypass, north of Bath, 
drew national attention this year as objec- 
tors camped out in tents and trees to try 
to stop toe contractors. 

While the protestors ultimately foiled, 
they highlighted, the dilemma Of striking 
a balance in satisfying two opposing pres- 
sure groups which are particularly vocal 


needed 


in the west of England. 

On one hand, there are the environmen- 
talists and, on the other, business groups 
calling for road improvements. 

Where there would be agreement is on 
toe need to upgrade rail services, espe- 
cially by the electrification of tire London 
line. There are no through passenger ser- 
vices to the Channel tunnel, although 
there Is a firm proposal for a freight ter- 
minal at Avomnouth which would link 
with the tunnel. 

There is also general agreement that 
Bristol, where the road network is over- 
crowded, needs a rapid transit system, 
despite the collapse of a previous sc heme 
for a metro tram system. Avon county 
council is the lead promoter for what it 
calls the Westway network. It is prepar- 
ing an application for a government grant 
to ffnanro most of the estimated £202m 
cost for the first stage. Private sector 
funding would also be required. 

The first line would run from math of 
the city to the south. Dr Roger Newport, 
the project manager, hopes operations 
will begin by 2002 and the network could 
eventually include other routes. While the 
type of vehicle has yet to be decided, the 
council envisages vehicles using electrical 
overhead flues. It believes two thirds of 
the passengers would otherwise be using 
cars. 

A “people-mover” system is also pro- 
posed by Bristol Development Corpora- 
tion to connect its Quay Point scheme by 
light tram to the city centre. The HDC, 
which has complained of "a lack of 
urgency” in transport policy, opened a 
spine road this summer which keeps some 
traffic out of the city centre by connecting 
the M32 motorway and A4 Bath road, hi 
contrast, the county council says a pro- 
posed extension of toe Avon ring road, 
badly needed to help to regenerate sooth 
Bristol, Is only in its "longer-term ambi- 
tions.” 

The local authorities have been critic- 
ised for seeking to discourage vehicles in 
Bristol while doing little to provide an 
alternative other than cycle-ways in what 
is a particularly hilly city. A more bal- 
anced policy has begun to emerge, with 
bus and taxi priority lanes and the start 
of park-ondride schemes. 

Mr Trevor Smallwood, chairman of 
Badgerline, which operates the City Line 
buses in Bristol, says the first parit-and- 
ride scheme, which opened this year, is 
being used by L000 people a day, "in 
advance of expectations." 

One imaginative project being promoted 
by Mr Smallwood's company is an Avon 
Gorge expressway, which would use an 
old single-track railway as a guided Uns- 
way between Portishead and toe city cen- 
tre. Linking with two park-and-rlde 
schemes, it could run as many as 60 buses 
an hour in the peak-hour direction of 
traveL 




... > . 




An investment in Bristol 


that spans 


140 years. 


The Bristol & West Buildinc Society 
was founded in 1850; before the Cliflon Suspension 
Bridge was opened, in focu 

Since then, both the Bristol & West and the 

City of Bristol have seen many changes. 

Yet some things remain just as they were. 
Brunei’s mighty bridge still symbolises the 
ambition and daring of the age, whilst the Bristol 
Sc West’s commitment to die prosperity of the City 

is as unwavering as ever. 


n office; Bristol & West 
HEAD U f r 



With good reason, too. Today Bristol is 
very much a City in resurgence, now die largest 
financial services centre outside London. 

Asa traditional Bristol company with a national 
reputation, we welcome the new generation of 
financial institutions that have made Bristol dieir 
home in recent times. 

Indeed, we have underlined our commitment 
to the City by recently opening a branch in the new 
Galleries shopping centre, as well as undertaking 


B u t r. u i n <; Society, Pi) Box 27, 


a comprehensive redevelopment programme of 
tho 50 plus branches we have in the Bristol area. 

These are exciting times for both the City and 
the Building Society. 

As John Burke completes his first year as 
Chief Executive, the Bristol & West continues to 
strengthen its financial position through focusing 
on its core building society business and its 
commitment to excellence in customer service. 

The Society also supports the Bristol 


Broad Quay, Bristol, BS99 7 


Chamber of Commerce and Initiative, the Greater 
Bristol Foundation and the Western Development 
Partnership, underlining the close links between 
the Bristol & West and the City. 

Hie overall aim of the Bristol & West is to 
strengthen its national position, yet with its roots 
firmly in Bristol. 

Our 144 year investment in the City is as 
much emotional as financial, and it will long 
continue to create a prosperous future for all of us. 

Bristol rfi 

Er WEST V A 

AX. TELEPHONE: (0272) 294271 




"JIlEaPI 




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A Korean ship departs from Royal Portbury Dock after unloading cars 


ncam(jK«*t«idarMMr Royal Portbury is the second-biggest UK port for car imports and exports 


otorists surging down Roland Adburqham on Bristol port and Sevemside 

the M5 motorway — - - - — g 1 


towards Somerset can 


hardly fail to notice, as they 
drive past the Avonmoatft 
industrial complex beside the 
Bristol Channel, that some- 


A transformation 


thing big is happening. 

While the steel structures 
and vapour clouds of large- 
scale chemical processes are 
still evident, there are also 
gleaming white buildings, the 
size of aircraft hangars, next to 
acres upon acres of parked new 
cars. 

The transformation is caused 
by the expansion of Bristol 
port since it was privatised 
three years ago. Its success “is 
the best thing that has hap- 
pened to Bristol in SO years," 
says Mr St John Hartnell, 
chairman of property consul- 
tant Hartnell Taylor Cook, 
which manages the docks* 
estate of 2J5Q0 acres. 

While Mr Hartnell would 
declare an interest, others 
have been equally impressed. 
The port, together with the sec- 
ond Severn bridge which is 
under construction, has 
become a catalyst for develop- 


ment plans around Avon- 
mouth. The biggest scheme, 
being promoted by ICL covers 
no fewer than 1,500 acres, an 
area stretching for more than 
4km. 

Even before the new bridge 
opens in 1996, the docks have 
the benefit of direct access to 
the MS motorway, near to its 
junction with the M4, and of a 
recently-upgraded link to a 
main-line railway. “It is a very 
well-placed strategic port,” 
says Mr Hartnell. 

The port, which straddles the 
river Avon, took over from the 
old city-centre docks, where 
commercial trade died because 
of the difficulties of navigating 
the river and restrictions on 
the size of vesseL 

On the north side of the river 
is Avo n mo nth dock, which is 
used by container and general 
cargo ships, and where Bell 
ijtiBs opened a £3 .5m container 


terminal in December last 


Coopers 
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year. 

On the south side is Royal 
Portbury. completed as a deep- 
water dock in 1978 and capable 
of handling ships up to 130,000 
dwt 

Bristol city council, the then 
owner, was burdened with debt 
by its construction and could 
not win enough trade to be 
profitable. 

In consequence, the council 
sold the port in 1991 for £36m, 
free of debt, on a 150-year lease 
to First Corporate Shipping, a 
private company run by Mr 
Terence Mordaunt and Mr 
David Ord. They are chairman 
and manag in g director of the 
operating subsidiary, Bristol 
Port Company. The council 
retains a 12.5 per cent preferen- 
tial stake and h as a spat on the 
board. Since the takeover, 
£150m has been invested by the 
port and joint venture partners 
in new facilities. 

“Everything that happens 
here, happens at break-neck 
speed.” says Mrs Julie Gough, 
of Bristol Port Company, 
which has a permanent work- 
force of 172 including appren- 
tices. Since 1991, tonnage has 
increased by 2m tonnes to 6. 6m 
tonnes and profits have risen 
each year. Revenue in the last 
financial year grew from 
£21 Am to £32.7m. 

To date, most of the expan- 
sion has been at Royal Port- 
bury which has become, after 
Sheerness, the second-biggest 
UK port for car imports and 
exports. These have doubled in 
three years to about 300,000 
vehicles. 

Honda, Mitsubishi, Proton, 
Rover, Toyota and the Fiat 
company Walon have parking 
space which totals 282 acres. 
Computerised systems enable a 
car’s arrival to be processed in 
less than 40 seconds. 


In May last year, an £80m 
investment in a bulk handling 
terminal was made by a joint 
venture with National Power. 
Although in its first year the 
terminal only handled about 
lm tonnes of coal, compared 
with a capacity of 5m. it is a 
common-use facility which also 
carries fertilisers, aggregates 
and grain derivatives. 


T his year. Agricultural 
Bulk Services, a joint 
venture between the 
port and United Molasses, 
invested £6.5 m in doubling 
storage for animal feeds , only 
a year after the facility opened 
at Royal Portbury. New sheds 
have been built for a forest 
products terminal. Lafarge 
Plasterboard imports gypsum 
for a factory which it opened at 
the port in 1989. 

On the dock estate, infra- 
structure is nearly completed 
for Portbury West, a joint ven- 
ture with Bryant Properties for 
a 30-acre distribution park, 
intended eventually to have 
more than lm sq ft of indus- 
trial space. Further south. 
Woodspring council has given 
approval for a 52-acre business 
park uear Weston-super-Mare 
and outline consent for a 1.6m 
sq ft business park at Weston 
airfield. 

North of the river Avon, 
another distribution park 
called Severn Gate is being 
developed on a GO-acre green- 
field site by AMEC Develop- 
ments and RTZ Estates. 

RTZ is promoting a scheme 
to build nearby an intennodal 
rail-freight terminal which 
would link to the Channel tun- 
nel. 

At Severnside, north of 
Avonmouth, ICI intends to 
develop 1,500 acres around its 
fertiliser works and Avion 
plant, owned by Zeneca since 


Contact*. 

Ray Burton, Coopers & Lybrand 
66 Queen Square, Bristol BS1 4JP 

TetOll 7 929 2792 Fax; 01 17 930 7008 


Coopeo ft LytHaod a outtartod by tie Mttute of Chartered 
AccoujIotJj n y&ona am} V**» to cozy on mjsfrnert toaEwa 


Solutions 
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Your Route to Success 


There’s an exciting new business opportunity that's 
fast coming to fruition dose to Junction 21 of the 
MS. At its core is a new £25 million motorway link 
road, on schedule to open in October ’95, which is 
transforming communications and creating some of 
the ripest conditions for industrial and commercial 
development you’ll see anywhere. 


For a full information pack, just pick up 
the telephone and call Phil Merrick, 
Woodspring District Counci! now on: 



© (01 934)634 599 
Fax: (01 934)612 006 




Bristol 

Business School 


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For many years we have helped companfa and pubfic sector agencies in Bristol and 
the region to meet their organizational needs through professional are! 
management develo pm ent- Partjgjtar benefit has axrrn tfrcugfi f ar tn e rtfife 
Programmes which uflor nationally recognized qualifications (at Certificate. 
Diploma and MBA ImQ to organizational needs. 


Clive Radford 
Tel: 0117 9292565 
or your usual FT representative 


Forfuftturli tf oniMttcnp te wtonact Or Rodney Oat ■ifetaIBwifc'— SdwaC Wh en U r oT Iha 
Wert of Fnencfay Campui GohnwtXMr Lane, BriBdBSISJQY'. T«l 0117 9S5 S2S1^ 


University of the West of England. Bristol 


FT Surveys 



BRISTOL DEVELOPMENT CORPORATION 




the demerger. At present, ten- 
ant farmers use the land for 
grazing, but the land has been 
held as a strategic reserve and 
ICI has bad outline planning 
consent since 1957 for indus- 
trial and commercial use. 

ICI has realised it will never 
require the land itself although 
the fertiliser plant, where 230 
people work, remains open and 
Zeneca is keeping some acre- 
age for planned expansion. 
Instead, it has decided the time 
has come to unlock its value. 

That value, it believes, is 
enhanced not only by the port 
but also the M49 approach road 
to the second Severn bridge, 
which crosses the land. Id is 
applying for an intersection to 
give direct access. 

One hitch is that agreement 
has yet to be reached with the 
highway authorities for the sit- 
ing of the slip roads, which 
will be partly funded by the 
private sector. In consequence, 
the junction is unlikely to be 
ready when the new bridge 
opens. 

ICI. with King Sturge as 
property adviser and planning 
consultant, has begun to mar- 
ket the land under the name 
Western Approaches and is 
holding meetings with local 
people on mitigating the envi- 
ronmental impact 

P lanning consent is being 
sought for a first phase - a dis- 
tribution park of 23m sq ft of 
warehousing on 130 acres of a 
landscaped 200-acre site. 
Future development could be a 
mixture of distribution space, 
industry including high-tech 
and research activity, and pos- 
sibly a leisure complex and 
some housing. 

The company estimates that 
over a 15-year period, between 
5,000 and 7,000 jobs could be 
created. 

“The capacity for economic 
development is enormous," 
says Mr Andrew Sturt. ICTs 
group property manager. 

“It will be a major contribu- 
tion to the industrial and 
employment base of the 
region." 


Many of the people flocking 
this autumn to a 14-screen, 
3,600-sest Showcase Cinema at 
Avon Meads in Bristol will, be 
unaware that only a year ago 
the Site was derelict 

The American-style develop- 
ment of a 26-acre site at Avon 
Meads and Castle Court is, as 
yet, file most striking evidence 
of the regeneration efforts of 
Bristol Development Corpora- 
tion on 900 acres near the city 
centre. Alongside the Show- 
case Cinema, opened in 
August by National Amuse- 
ments of the US, there is ten- 
pin bowling, Cast-food restau- 
rants and a parade of stores. 

This month, an 85,000 sq ft 
Cargo Club was opened by 
Nnrdin St Peacock, its third 
UK membership warehouse, in 
which goods are sold off pal- 
lets and racks at low prices. 
More than IZjOOQ people had 
paid the animal membership 
fee of £25 by opening day. 

Avon Meads and Castle 
Court, which have been devel- 
oped for the BDC by Wfison 
Connolly, have free parking 
and, because of a new spine 
road, can be readied without 
driving through the congested 
city centre. The road Itself, 
named St Philips Causeway, 
was opened in July and finks 
the M32 motorway with the A4 
Bath road. 

While the leisure and retail 
complex has won popular 
approval, the BDC itself has 
been, in some quarters, highly 
unpopular. One of 12 such cor- 
porations in England, it was 
created by the government in 
1989 with planning powers to 
regenerate land goffering from 
dereliction and poor access. 
The Labour-controlled city 
council failed in a court action 
to stop ft. 

The BDCs aggressively mar- 
ket-led strategy did nothing to 
improve relations with the 
counriL Critics of the govern- 
ment's concept of the corpora- 
tions argue they have a high 
cost per job created -and 
poorly targeted benefits. 

Relations between the BDC 
and the city council, niWmn gft 
still uneasy, have Improved 
over the past year and the 
council’s Labour leader, Mr 
Graham Robertson, has joined 
the board. Recently, however, 
tensions have resurfaced with 
the BDCs plans for its flag- 
ship site. Quay Point 

Mr Mfles Collinge, the BDCs 
pugnacious chief executive, 
makes no apologies for the 
corporation being a commer- 
cial organisation driven by 
market forces. He does not dis- 
guise his frequent impatience 
with the city authorities. 
“Bristol of all cities has a 
capacity to emit negative mes- 
sages,” is a typical comment 

The BDC concentrated on 
i nf r astru cture first - notably 
on St Philips Causeway, which 


cost £4Tm. The design-build 
contract was completed by v 
Balfour Beatty ahead of sched- 
ule and on budget Mr CoBinge 
describes the road ; as of 
“mega-significance” and says 
the area ft serves “didn’t hove 
a future without it" - 

One scheme, intended to 
complement the spine road, is 
for a weir to improve the 
appearance of the river Avon, 
which becomes a muddy , ditch 
af low tide. But although a 
parliamentary bffl to build ft 
was unopposed, funding has 
yet to be found. 

Development which has pro- 
ceeded includes, in partner- 
ship with Nationwide Building 
Society and five national 
housebuilders, an urban vil- 


The BDC says 2,250 jobs 
have been created, with 
many more forecast 


lags called Avon Riverside. So 
far, about 300 houses, out of a 
plumed total of nearly 1,000, 
have been completed. The 
twain office, relocation has 
been by NatWest life, which 
has taken a headquarters 
building an the wate rfront 

The BDC says 2,250 jobs 
have been created, with 
another 1,000 expected from 
schemes in pr ogress, ft ton- 
casts there vrin be, eventually, 
18300 direct and. indirect jobs 
and predicts that private 
investm ent af£820m wlQ be- 
seemed. 

In May, the BDC, due to be 
wound up in December next 
year, published an exit strat- 
egy. together with a reviewby 
EPMG Management Consult - : 
ing. KPMG said the recession . 
had caused developments to 
come onstream later than orig- 
inally forecast, hut “despite 
tfpg background the BDC has 
successfully brought about 

dew V q nn * 1 **' and laid Hm> gmm- 

dations for strengthening 
interest as . the economy and 
the property market recovers.” 

The review said the BDC had 
identified opportunities which 
had not hea seen by the couni 
cfl. The potential had been 
transformed by impww iwiiewte 
to the fnftgHt* T»n»inH» mid envi- 
ronment Twelve sites already 
had some development aid a 
further 13 were being mar- 
keted. “There is no evidence 
that this turnaround. . . could 
have been achieved with the 
BOG’S activities,” KPMG said. 

The most grandiose project 
is for Quay Point, which the 
BDC believes will be a gate- 
way to the city of interna- 
tional status. It is a triangular 
site of 23 acres next to Temple 
Meads railway station, the 
city’s ring road and on the 
waterfront The BDC, with 
Wilson GbnnhBy as, preferred 
developer, hopes to have a 2m- 


UNICORN 


FACT 


NOT FICTION 



WE AR.E LEADING THE WAY 
IN BUILDING 

AND PROPERTY CONSULTANCY 



UNICOR.N CONSULTANCY 


HEAD OFFICE 

BURG HILL ROAD. WESTBU RY-ON -TRY U, BRISTOL RS10 SMh 
TELEPHONE Otn 7(,4000 FACSIMILE Oltl 764*49 


OTHER OTHCES, LONDON READING PORTSMOUTH PLYMOUTH CAJUMPP 
MANCHESTER CAMBRIDGE LEEDS GLASGOW 



Badgerline Group ♦ 


One of the U.K.’s 
largest bus and coach 
operators 


Badgeriine Group pic. 

Badger Manor. Edingworch, Weston-super-Mare B524 GJA 


sa ft commercial , centre, 
attracting £400® of invest-. 

addition to offices, flto 
BDC Wants a quality iotel, lei- 
sure attractions and, nwstcon- 
froversiatty, 350,000 sq ft rf 
shopping hK^odlng a depart- 
ment store, and mafi. The 
scheme is attacked by those 

co ncerned about the impa ct on 
the city’s Broadmead shopping 
centre, and on a proposed Har- 
bourade development on the 

waterfront 

The council’s view is that a 
strategy for central Bristol 
should be by devised by agree- 
• not- competition. Mr Col- 
linge's view is. that the real 
threat to the city centre comes 
not from Quay Point, but from, 
out-of-town development. 

Despite Qqajr Point having 
been marketed for some .time, 
no deal has yet been struck for 
a department store. Mr Col- 
lingo, while saying that 
remains the preferred option, 
indicates the scheme could he 
adapted to have less retail . 
space, mare confined to sup- 
port shopping for office .work- 
ers. But he comments: “We dp 
not believe in mono-c ultu ral 
development, whether retail, 
leisure or office. A develop- 
ment blossoms mare in a city 
if it has a mix of uses. . 

“This corporation wants to 
do nothing but strengthen the 
heartbeat of Bristol. Why 
allow this rite to continue to 
mpuddec? It is the most acces- 
sible site and why not recog^ 
nise that, and say it b the cen- 
tral business district?" 

Mr CoUinge co mme nts: “My 
peat sadness is that the virion 
of the - BDC has not been 
shared. There has beat squab- 
bling argu ment with third-di- 
vision politico trying to kill 
the' BDC- Cities. l&e Birming- 
ham and Manchester have had 
a strategic vision in harmony 
with the private sector.” 

; -.fie adds: “Potentially we're 
a very .com petitive dty and, if 
we got our act together, we 
could knock spots off other 
dries;* ‘ 


Before you 
make a move 
talk to the 
pro-business 
authority in 
Somerset 


Scdgemoor s a pro-business 
cnviroomaiL It also bqipens to 
be owoflte best beams for 
business in tfaecoan&y^ - with 
prime sites located on die M5 
Motorway. And its 2 beautiful 
part of England. 

Before yon make a move, talk 
tons. WH6nd well bend over 
backwards to help. Ora 
information pack includes tsefol 
and ptacdcai adrierflo a wide 
range oTmponantissiies, such as: 



- A list of companies an the num 
estates and wist they do. 


- lists accountants, bulks, 
sobdm, surveyois, estate 
agents, etc. 


We can abo teU you all you need 
to know about: 


•Sites •Construction 
• Premises • Local Economy 
•lia i son •Finance 


• Edocation and recreation. 
Scdgemoor's Economic 

Development Unit 
hjsj VTgoroasfy pro-business 


Cal/ Mike Frenciion 

0278 435300 

for the foil fact*. 

Alternatively Fax 0278 444076, 
send coupon below or attach yum 
business card to fob ad and mri 
to die ^address Mow 


^e deje tnoor 


IN SOMERSET 


I Ta Mic French, 

I Economic Development Officer, 
I ^cmoorDtstrktCoonefl, 

I Bndgwate, Somerset TA63AR. 

i Please send m> 


I jfe«”>dmetfe6reon 

t -wgemttjrrn Somerset as a 
I business location 


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FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 


BRISTOL VII 


Businesses are moving out of town, reports Roland Adburgham 

Cify centre versus outskirts 


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When John Lewis, the 
department stores group, 
announced this year it would 
dose its Bristol store in 1997 
and move to Cribhs Causeway, 
an out-of-town regional shop- 
ping centre, it sent shock 
waves through the city. 

It reinforced fears that Bris- 
tol was in danger of succumb- 
ing to the “doughnut” effect, 
with retailers and companies 
moving to the dty fringes and 
leaving a hollow centre. 

To the north of Bristol, in 
particular, there has been sub- 
stantial development 
This includes a £254m pro- 
curement headquarters being 
built for the Ministry of 
Defence. At more than lm sq ft 
and designed for 5,700 staff, 
this is said to be the UK's larg- 
est current office development 
Another big project nearby, 
on the Pathway b usiness park, 
is a 600,000 sq ft headquarters 
for Son Lift! which will house 
2,400 staff. The staff will relo- 
cate from separate buildings in 
the city centre, reinforcing the 
“doughnut” fears. 

Cribbs Causeway itself is 
north of Bristol, next to the M5 
motorway. A development by 
Prudential Assurance and JT 
Bayliss, it is planned to have 

650.000 sq ft of retail space, 
with John Lewis and Marks 
and Spencer taking a total of 

230.000 sq ft. 

After two public inquiries, 
the shopping centre was 
approved by the environment 
secretary in 1991, before bis 
department’s tardy awareness 
of the effect on town centres of 
out-of-town stores. 

John Lewis’s Mas tin g store is 
a mainstay of the city's princi- 
pal shopping centre. Broad- 
mead. It fs a post-war centre, 
showing its age, with a dreary 
environment and poor access. 

As a result, it is calculated 
that Bristol attracts lower 
retail spending than should be 
expected of a regional capital 
What John Lewis’s derision 
has achieved is a concentration 
of minds. This has been Anther 
encouraged by the retail aspect 
of Bristol Development Corpo- 
ration’s proposed Quay Print, 
which is also perceived as a 
threat to Broadmead. For its 
part, the BDC argues that 
Quay Point, by improving the 
city’s range erf shopping, will 
help to arrest* Broadmead’s 

ripf-bng 

There is now a positive 
intention to improve Broad- 
mead by the council, which is 
the landlord, the retailers, and 
Bristol Chamber of Commerce 
and Initiative. “Broadmead is 
not dead but it is side -it 
needs revitalising," says one 







Edward Cussem ident ifi e s a positive spirit of co-operation between the pubic authorities and private sector 


leading chamber member. “But 
I think with co-operation 
between the chamber and city 
it can be solved." 

A new retail occupier is 
being sought for the five-storey 
John Lewis building. 

One improvement already 
has been the Norwich Union 
development of the Galleries’ 
enclosed shopping centre near 
Broadmead. Although it 
opened during the recession, it 
has let reasonably well. 

For companies, the attrac- 
tions of being north of Bristol 


BRISTOL 
city centre 

w • oiartrtS'SI : 


phase. The £lim scheme is 
described as one of the largest 
speculative fundings in the 
Bristol area for five years. 

Longer-term, there is the 
prospect of commercial devel- 
opment on 400 acres at Emer 
sons Green. 

In contrast, companies have 
complained of transport and 
parking difficulties in the city 
centre and, at least until 
recently, of an unhelpful atti- 
tude by Bristol council 

Hartnell Taylor Cook, the 
property consultant, describes 



Cl b- 




» T) 

* ' /War tem 


have bem the liberal planning 
policies of Northavon district 
council plus access to the M5 
and M4 motorways. 

For example, toe long-estab- 
lished Aztec West business 
park, managed by Arlington, 
has more than 80 companies. 
Pearce Developments has 
started infrastructure work for 
a second Parkway business 
park on 40 acres. 

At Bristol Business Park, a 
38-acre site in north Bristol, 
contracts were exchanged this 
month between Bristol & 
England Properties and Bar- 
clays Bank Pension Fund for 
the funding of its second 


the council as having hitherto 
taken a regressive attitude 
towards office development. 
Car parking was restricted to a 
ratio of one space per 5,000 sq 
ft. “This policy has proved 
commercially unacceptable,” it 
remarks. 

Under its draft local plan, 
the council has revised that to 
one space per 2,000 sq ft 

Mi* Edward Cussen of King 
Sturge. comments that there is 
now a positive spirit of 
co-operation between the pub- 
lic authorities and private sec- 
tor. “Coupled with this are 
some outstanding development 
opportunities and signs that 


Hgmanrt is increasing.” 

The doughnut effect may 
prove to have been exagger- 
ated. Demand for space in the 
centre has not dried up, as 
indicated this year by Midland 
Life taking 30,000 sq ft of 
offices and Direct Line, the 
insurance company, occupying 
a 50,000 sq ft block. 

“Instead of the city centre 
vacuum which was feared, big 
employers have moved in ibis 
year, bringing hundreds of new 
jobs with them,” says Mr Mike 
Hemy, of Chesterton, toe prop- 
erty consultant 

King Sturge reports rents 
r emain below £20 per sq ft but 
incentives to tenants are disap- 
pearing. In fact, there is a 
severe shortage of large, good 
quality offices in toe centre. 

One plan is for Stonecutter 
Court, where Chesterton seeks 
an occnpier for a proposed 

113,000 sq ft building. 

Eaglebrook Properties has 
consent for Marlborough Gate, 
with 47,000 sq ft Helical Ba- 
bas a speculative scheme at 
Venturers House, funded by 
Norwich Union. And Courage 
has applied for planning con- 
sent for 93,000 sq ft of offices 
on a disused part of its brew- 
ery. 

One deal just completed is 
the sale of the 26,000 sq ft 
Armourers* House for nearly 
£3J2m to clients of Henderson 
Property Fund. 

While Quay Point is a heavy- 
weight project, it is rivalled in 
its ambitions by plans - pro- 
moted by the council - for Har- 
bourside, a mixed-use scheme 
on the waterfront The site is 
potentially one of the finest of 
any British city but has 
remained largely derelict for 
many years. At long last, 
agreement has been reached 
among the landowners and 
English Partnerships, toe gov- 
ernment's regeneration 
agency, has indicated support 


A t first sight, the elec- 
tronic world of the infor- 
mation “superhigh- 
ways'* is ter removed from the 
unemployed of Bartellffe, a 
deprived part of south Bristol 
which gained national notori- 
ety in 1992 because of rioting, 
writes Roland Adburgham. 

Hartcliffe is not a typical 
inner-city suburb. When its 
post-war housing estates were 
built by the local authority, 
the planners might have 
believed they were creating a 
desirable environment. Set 
within sight of fields and hills, 
Hartcliffe has wide streets, 
green spaces, houses with gar- 
dens and only a handful of 
high-rise blocks. 

In common with many other 
imposed ideas, it was badly 
flawed. Hartcliffe lacked shops 
and community facilities. It 
was Isolated by several mil e s 
from the dty centre with no 
raD service and poor road con- 
nections. Crucially, there was 
no social mix of housing; 

There was also overdepen- 
dency upon a single employer, 

I a Wills tobacco factory. When 
that closed four years ago, 
about 4,000 people lost their 
jobs. No alternative use for the 
factory has yet been found by 
Wan-Bnn, the owner. Despite 
the establishment of a busi- 
ness park in Hartcliffe, 
attempts for large-scale job 
creation are handicapped by 
the inadequate transport 
links. Unemployment is above 
the Bristol average and rates 
of economic activity are tow. 

It is a gwtiwgt thW background 
that an innovative project has 
been Launched as a stimulus to 
regeneration. The South Bris- 
tol Learning Network (SBLN) 
intends to develop a cable- 
based telecommunications 
infra st ructure not for commer- 
cial but ffftmwnnit y gum. 

The concept is that cable, by 
linki ng houses, businesses, 
schools and other organisa- 
tions, helps to circumvent 
transport problems and pro- 
vides access to local, national 
and international information 
sources. 

The network has potential 
for use as a billboard, for 
interactive TV programmes, 
public access broadcasting and 
teleworking. The hope Is that 
H will improve the skills of the 
labour force, encourage life- 
long learning and help to 
rebuild a sense of community. 

Funding of £750,000 has 
come from Avon training and 
enterprise council, which 
secured the money last year 
under the government’s Tec 
Challenge competition. The 
partnership project, developed 
jointly with South Bristol Col- 
lege, is using a cable network 
laid by United Artists. 

Mr John O'Hara, the evange- 
listic project leader, sees the 
network as a prototype which 
can be replicated across the 
country. Considerable interest 


COMMUNITY ENTERPRISE 

Information ‘highway’ to 
stimulate regeneration 





A group from South Bristol CoBege attend a 'cyberskjBs’ workshop 


has already been shown in the 
US. He emphasises how the 
SBLN contrasts with the usual 
“top down” development of 
information superhighways, 
with little involvement at com- 
munity level. “The potential 
for cultural change is 
immense,” he says. “While the 
first responses of local people 
are usually negative, subse- 
quently they become more pos- 
itive as they see how they can 
shape the technology for their 
own ends.” 

Staff for the SBLN have been 
recruited locally from among 
the unemployed, who mostly 
lacked skflls in new technol- 
ogy. More than 50 employees 
have been trained, more than 
half of whom had been previ- 
ously out of work for at least 
six months. They come from a 
variety of backgrounds and 
ages, ranging from 19 to 60. 
An assessment of the project 
for Avon Tec reported: “They 
have set about their tasks with 


enthusiasm, drawing on previ- 
ously untapped energy and 
expertise.” 

This month, the SBLN 
started “cyberskins” work- 
shops at ICL’s offices In Bris- 
tol to create a city-wide aware- 
ness of the potential of 
multimedia. Mr Malcolm Nap- 
ier, ICL’s business develop- 

‘ Community influences' 
will see how to use 
Internet, e-mail, CD-flom 
and video-conferencing 

merit manager responsible for 
tiie company’s lifelong learn- 
ing strategy, describes the 
workshops as “giving first- 
hand experience of what the 
superhighway means.” 

The workshops are being 
run by SBLN’s staff and under- 
graduates from the computer 
science department of Bristol 
University. They are spon- 


sored by ICL in association 
with Avon Tec, BT, Compu- 
Serve and South Bristol Col- 
lege. Over the next few 
months, the workshops will 
demonstrate to 1,000 people, 
identified as “community 
influencers”, how to use the 
Internet, e-mafl, CD-Rom and 

video-conferencing. 

In job-creation terms, the 
SBLN will have limited impact 
on Hartcliffe, at least in the 
short-term. But It Is indicative 
of a realisation that there is no 
single or simple solution to 
toe area’s problems. 

A separate partnership 
crhonip to raise the Hartcliffe 
skills base and Improve the 
community is the Gatehouse 
Centre. This £l-5m building, to 
open next year, fs being 
funded by the government 
with a £500,000 urban partner- 
ship grant, the dty council 
and the private sector, which 
has so for donated £350,000. 
Initiated by Hartcliffe & Wtth- 
ywood Ventures, it will 
incbide a training centre with 
a nursery, light industrial 
units, meeting room, cafe- and 
shops. 

Another local community 
project, to help young people, 
is Hartcliffe Leisure. This is a 
company set up in partnership 
with the Bristol Chamber of 
Commerce and Initiative to 
organise a range of after- 
school activities. One of the 
grants which helped to estab- 
lish it came from the Greater 
Bristol Foundation. A' charita- 
ble trust set up in 1987, the 
foundation provides a profes- 
sional service for donors who 
want to s u ppor t local causes 
but who need advice on identi- 
fying potential beneficiaries. ’ 

The foundation now has an 
endowment fund of more than 
£2m, contributed by a wide 
range of companies, organisa- 
tions, charitable trusts and 
individuals. It has distributed 
more than £700,000 to more 
than 300 schemes and groups. 
The priorities me projects for 
young and disabled people, the 
homeless and those disadvan- 
taged by isolation. 

Penny Johnstone, the direc- 
tor, says that the outside view 
of Bristol as a prosperous city 
does not tally with toe evi- 
dence of areas of deprivation. 
But within the city, she says, 
there have been large strides 
to the past few years in the 
willingness of people to collab- 
orate in supporting such pro- 
jects. 























± The only way to to develop and improve pubttc transport? 

COMPANY PROFILE: BADGERLINE 


Fknnc Tony Andntm 


Set for expansion 


The headquarters of what has 
become Britain's second-larg- 
est bus operator might be 
assumed to be utilitarian 
offices neat to a noisy depot 
Instead, it is to be found in a 
renovated farmhouse six miles 
from Weston-super-Mare, sur- 
rounded by fields and 
approached across a cattle 
grid. 

Badgerline employs 10,700 
people and runs 3,900 vehicles. 
But at the headquarters - re- 
named Badger Manor after the 
company moved there in 1989 
- there is only a dozen staff. 

From this modest base, Mr 
Trevor Smallwood, the execu- 
tive chairman, and his fellow 
directors saw the company 
floated on the stock exchange 
in November last year, raising 
£35HL 

The company was estab- 
lished in 1986 when it was 
bought out by its management 
and employees - Mr Small- 
wood was the managing direc- 
tor -Cram National Bus Com- 
pany as part of the 


government's privatisation 

programme. 

Badgerline then had an 
ann ual turnover of £15m and 
400 vehicles. 

For the half-year to June 30, 
it reported a turnover of 
anrt pre-tax profits of 
£&4m, up from. £?..fim in the 
same period last year. 

The flotation, with the Bris- 
tol offices of EFMG Peat Mar- 
wick and Binges Salmon, the 
law firm, as advisers, was 
intended to provide funds for 
expansion and acquisitions. 

As a result, PMT Group, 
based in Staffordshire and 
Cheshire, was bought for £23m 
and the Yorkshire-based Rider 
Group for £38m. 

The two companies, which 
have a total fleet of nearly 
1,600 vehicles, have already 
boosted profits. 

Mr Chris Carr, marketing 
director, pronounces the com- 
pany as “very satisfied” with 
its decision to float 

In Bristol, Badgerline is 
known for its City line subsid- 


Roland Adburgham 



Beyond a certain point. 
Courts is the 

soundest investment of all. 


The greater your assets, the more challenging the 
task of looking after them. Especially if they exceed the 
£250,000 mart. 

Are you getting the one-to-one service 
you deserve? Can you depend on your manager to make 
the right decisional Above all, are you getting the returns 
you’re looking for? 

Courts investment Management Services aim to 
provide all this and mow. 

At die outset, we'll establish a dear understanding 
of your particular needs and financial goals- Then well 
fine-tune your portfolio accordingly, monitoring and 
adapting it as your needs change. You cam, of course, be as 
little of as much involved In decutavraalriDg as you wish. 

It goes without saying that you’ll get exceptional 
levels of individual attention. And because the Courts 
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Established 1692 

A HISTORY OF FORWARD THINKING 




GWR GROUP 


RUISHS 


Taking stakes in 
other companies 


iary, which has 1,000 staff, a 
fleet of 353 vehicles, and a 
turnover of some £23m. 

Mr Smallwood says that, 
since deregulation, the number 
of buses in the area has risen 
Cram 207 to 319 and operating 
miles have increased greatly. 
More than half the fleet has 
been replaced in the past four 
years. 

Overall, Badgerline has 
bought 370 new vehicles this 
year. 

This summer, it placed 
orders for 900 vehicles at a cost 
of almost £60m, believed to be 
the largest order yet placed by 
a non-publicly -owned bus com- 
pany. 

Mr Smallwood, whose career 
began with Yorkshire Traction 
in 1966, comments: 

“There is public recognition 
that we cannot continue in 
urban areas to use the car ad 
infinitum -tba only way la to 
develop and improve public 
transport” 


Few radio listeners in the west 
of England will not have beard 
the slogans "Better music 
mix" and "No rap, less chat," 
writes Roland Adburgham. 
Remorselessly, they are 
repeated on GWR-FM, the 
commercial radio station. Mr 
Chris Scott, station director in 
Bristol, describes them as 
"positioning statements.’' 

Zn terms of position. GWR 
Group, based in Bristol and 
Swindon, has established itself 
as the UK’s biggest commer- 
cial radio company after Capi- 
tal Radio. Earlier this year, it 
took over a clutch of Midlands 
and Bast Anglian stations and 
now holds the permitted maxi- 
mum of 20 radio licences. 

While lobbying the govern- 
ment to raise the limit, it has 
been taking stakes in other 
radio companies. It holds 17 
per cent of Classic FM. the 
national commercial station, 
and has shareholdings in vari- 
ous companies from Plymouth 
to York. 

In July, GWR, which is 
quoted on the unlisted securi- 
ties market won Price Water- 
house’s award for the West of 
England business of the year. 
In the six months to March 31, 
It had a turnover of £7.8m, an 
increase of 90 per cent on the 
same period last year. Pre-tax 
profits nearly trebled to 
£930.000. 

In the west. GWR-FM, 
together with its sister AM 
station Brunei Classic Gold, 
lifted the combined market 
share to 30 per cent this sum- 
mer, based on Radio Joint 
Audience Research, compared 
with 20 per cent in the same 
period last year. 

Mr Simon Cooper, area 
director for GWR South, 
stresses the group’s policy of 
“listener -responsive radio” for 
increasing audiences. Output 
is heavily influenced by tele- 
phone interviews, in which lis- 
teners are asked to rate songs 
on a scale ranging from 
“haven’t heard it” or “dislike 
it" to “I really like the song." 

The format of news bulletins 
is also Influenced by listener 
research. There is strong inter- 
est shown in local and UK 
news, but very little in reports 
about the royal family. Mr 


Tbevriueoflnv 


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Simon Cooper stresses pricy of 
‘tetener-rejsponsive radio' 


Simon Cooper, area director, 
explains that this is because 
royal stories are mainly visual 
in appeal. 

The group’s ambitions now 
include expansion in eastern 
Europe. In Poland, it has 
taken a stake in Inforadio hi 
Warsaw, in partnership with 
BBC World Service. It has also 
a 48 per cent holding in Radio 
FM Plus in Sofia, Bulgaria. 

Back in Bristol, at GWR’s 
studios at the Watershed 
media centre, a “positioning 
statement” jingle has been 
recorded for the Sofia station. 
In Bulgarian, it means “Only 
hits." 



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★ 

FINANCIAL TIMES 

COMPANIES & MARKETS 

©THE FINANCIAL TIMES LIMITED 1 994 Tuesday November 29 1994 


21 










IN BRIEF 


BK Vision wins 
UBS injunction 

BK Vision, the investment fund controlled by Mr 
Martin Elmer's BZ banking group which is chal- 
lenging the management of Union Bank of Switzer- 
land, has won an injunction preventing the hawir 
from converting its registered shares into bearer 
shares until an appeal against the plan is heard 
Page 22 

Salvesen to focus on core units 

Christian Salvesen, the UK distribution and special- 
ist hire group, is looking to sell its pollution control 
and brick manufacturing divisions by the end of 
this financial year, raising about £60m (593.6m) to 
invest in its core businesses. Page 22 

Eurotunnel attacks Klesch 

A furious row has erupted between Eurotunnel and 
Klesch & Company, the London-based bank debt 
trader, over a report issued by Klesch called “Euro- 
tunnel Interim Results - Disaster Ahead". Page 22 

BHF Bank's account trading hit 

BHF Bank yesterday blamed the collapse in world 
bond market prices for a sharp slide in profits from 
trading on its own account in the first 10 months. 
Page 22 


Akzo Nobel’s hydro-power side tor sale 

Akzo Nobel, the Dutch-Swedish nheminais group, is 
planning to sell its hydro-power operations to 
Stockholm Energi, Sweden's third-largest energy 
producer. Page 22 

Mellon Bank takes $130m charge 

Mellon Bank of the US said it would take a $130m 
after-tax charge to cover investment losses of cus- 
tomers of its stock lending business following the 
fall in bond prices this year. Page 24 

HNV closer to control of Heron 

Mr Steven Green's HNV Acquisition yesterday 
cleared the first hurdle to gaining control of Heron 
International, Mr Gerald Ronson's property group, 
by getting substantial support from ordinary share- 
holders for his offer. Page 28 

ChefsfieM forms property venture 

Chelsfield. the property company run by Mr Elliott 
Beraerd, has formed a joint venture to buy some of 
central London's most expensive residential prop- 
erty for SABAm ($79m). Page 28 


Barr fetid continues 

The family feud at Barr & Wallace Arnold Trust 
Oared up yesterday as rebel shareholders rejected a 
last-ditch agreement with the board of the motor 
and leisure group. Page 28 

SKflaw on target with 33% rise 

Sidlaw Group, the Scotland-based packaging, oil 
services and textiles company, yesterday revealed a 
33 per cent rise in pre-tax profits, lifted by a full 12- 
month contribution from the flexible packaging 
businesses acquired from Courtaulds in late sum- 
mer 1993. Page 27 


Companies in this issue 


Abtrust Emerging 
Akzo Nobel 
Angus Hre 
AoW 

Asahi Ufa 
BBA Group 
SHF Bank 
BK Vision 

Ban WaBace Arnold 
Bayer 

Burmah Castro! 

CRH 

Campbell Soups 
Cantab Pfiann 
Capita) Cities/ABC 
CavoftJale 
Chelsfield 
CHyoda Life 
Christian Salwesen i 
Coca-Cola 
Coles Myer 
Crecfito Itallano 
Grecfito Romagnoto 
DaWcbi Life 
Drayton Chip 
Edinburgh income 
European Motor 
Eurotunnel 
Ferranti 
Held 

Ford Motor 
Glaxo 

Golden Eagle 
Goldman Sachs 
HaSelgh Industries 
Hams (Phlfip) 

Heron 

Hogg Robinson 
Iberia 

Independent Parts 

Indotood 

JAL 

JU 

Joseph (Leopold) 


28 

Kalamazoo 

28 

22 

KJalnwort Benson 

26 

21 

Klesch & Company 

22 

23 

Lafarge Copp6y 

22 

23 

Lasmo 

18 

21 

LlmaHght 

26 

22 

Marflng 

28 

22 

Martin Curie Europe 

28 

26 

Mejji Ufa 

23 

21 

Mellon Bank 

24 

28 

Merrydown 

28 

27 

Mitsui Ufa 

23 

1 

Moore Corporation 

24 


N Ireland Electric 

8 


NCC 

22 

28 

National Gypsum 

22 


Nippon Lite 

23 


Novo Nordisk 

24 

18 

2S 

22 

22 

23 

28 

27 

28 
22 

OEM 

Ocean 

Paco Foods 

Pearl River Tyre 

Pearson 

Prospect Inds 

Prudential Soc’ttes 
Queens Moat 

Renault 

Rentoka 

27 

28 
1 

23 

9 

28 

23 

28 

21 

9 


Rotiimo 

27 


Samcor 

23 

9 

Shield Diagnostics 

27 

22 

Siam Cement 

23 

24 

Sidlaw 

27 

27 

Spring Ram 

27 

28 

Sumitomo Life 

23 

28 

7R Far East Income 

27 

28 

Ttwaites (Daniel) 

28 

20 

TransTec 

18 

27 

UBS 

22 

23 

United Carriers 

27 

21 

Westin Hotel 

23 

27 

Williams Holdings 

21 

28 

Yasuda Life 

23 


Market Statistics 


^Annual reports sente 32-33 

Benchmark awt bonds » 

Bond fufums and options 
Bond prices and yWds 
tonmotfitfPSPrtos 
Dividends announced, IK 
BBS currency rates 
Eurobond prices 


FT-A worti to* ^ 

FT Gold Wes in** « 

RflSMA mu bond* » 

FT-SE Actuaries Imfces M 


Foreign exchange 
Gilts prices 
Uffs equity options 
London share sendee 
London trad) options 
Managed tends service 
Money markets 
New tell bond Issues 
New York share service 
Racan issues, ux 
Short-term ht rate 
US Interest rates 
World Stock Itatots 


SB 

31 

32-33 

31 

34-3S 

36 

25 


31 

36 

25 

J7 


Chief price Changes yesterday 


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224 » 

2ZJt + 
203 + 

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372 + 


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KW 

BMpab 

2050 

+ 

120 

8.3 

Credit Local 

410 

* 

105 

Radkttdm 

500 

* 

19 

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(JFB Located 

420 

A 

14 

ii 

Uokn boob Fr 

447 

+ 

15 

ti 

106 

FaUn 

CapGemMS 

18L2 

- 

9J 

m 

TOKYO (Yon] 
(Bees 

jpaUBs&CIm 

495 

+ 

24 

fH 

KMdMto 

1500 


70 

MppcnSMyo 

923 

+ 

40 

IK 

S*#usmJu& 

415 

+ 

24 

IK 

1 

Palls 

Awam Torino 

2120 

- 

230 

ZH 

Japan Arteo 

881 


29 


TSB 

227 

+ 

aa 

a 

Tcdottw Htsp 

138 

r 

15 

V 

Won 

W 

* 

0 

12 

114 

VldNLotfc 

31b 


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449 

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MenydNtf 

85 

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iw 

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172 

~ 

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11 

ual Cartel 

79 


15 


Bayer looks for less competitive sectors 


Profits rise 32% as German group turns from established 
research areas to innovative drugs writes Christopher Parkes 


Bayer, the German chemicals 
multinational, is to re-focus its phanna- 
ceuticals research away from crowded 
market sectors and step up spending on 
the hunt for treatments for allergies, 
rheumatic ailments and Alzheimer’s dis- 
ease, according to Mr Manfred Schnei- 
der, group chairman. 

Budgets Tor established areas of inter- 
est such as heart and circulatory disease 
therapies would be reduced in favour of 
those offering greater possibilities for 
discovering and exploiting innovative 
drugs, he said yesterday. 

Reporting a 32 per cent increase in 
pre-tax profits for the first nine months 
of the current year, forecasting full-year 
earnings up from DM2.4bn to DM&2bn 
f$2bn), and hinting of an increased divi- 


dend, Mr Schneider said he bad no plans 
for any further acquisitions in the phar- 
maceuticals sector. 

However, Bayer was in other takeover 
negotiations and was planning a major 
co-operative venture. He expected nego- 
tiations to be completed during the first 
quarter of the new year. 

The group has recently spent DM2.1 bn 
in the US on acquiring ChemDesign. a 
stake in the Schein generic drugs group 
and the self-medication business of Ster- 
ling Winthrop. Mr Walter Wenninger, 
the director responsible for pharmaceuti- 


cals said the group had six promising 
new drugs in the final stages of clinical 
testing. 

Although some might not malm it to 
market, they had a combined annual 
sales potential of up to DMSbn, he said. 
Among products, the antibiotic 

Cipro bay is expected to turn over more 
thaw DM2bn this year. He added that the 
Adalat high blood-pressure treatment 
bad the potential to reach this level, 
while Gluxobay, already achieving sales 
of DMSOOm, would bring in more than 
DMlbn once approved in the US. 


The group as a whole had the poten- 
tial to incrftaqA earnings to more than 
DM4bn a year within two or three years, 
Mr Schneider said. This year's result 
had been achieved with plant running at 
85 per cent of capacity compared with 75 
per cent last year and 90 to 95 per cent 
in the peak year of 1989. 

Forecasting sales of around DM43bn 
for the current year, Mr Schneider said 
he expected foreign markets to grow 
more than Germany, where sales had 
risen only l per cent in the nine months 
to the end of September, and now 


accounted for less than 20 per cent of 
group turnover. Sales in north America 
had so far risen 8 per cent to DM7-8bn 
while sales in the for east were up 15 per 
cent at DM4.7bn. 

The German market showed distinct 
signs of improvement in the third quar- 
ter, when sales increased 4.6 per 
cent 

Among sectors, the highest growth 
rates in the nine-month period were 
recorded in polymers and industrial 
products, both up 8 per cent in sales 
terms thanks to lively demand in the 
automotive and building industries. 

Health care sales rose 5 per cent, 
although the Agfa business managed 
only a 1 per cent increase. 

Lex, Page 20 


Industry minister says privatisation should proceed after election 


Salvesen to sell units 


Renault sale likely next year 


French government has said that 
Renault must conclude partner- 


By John Ridding in Paris 

Renault, the French state-owned 
motor group which was floated 
on the stock market earlier this 
month, should be privatised in 
the second half of next year, Mr 
Jose Rossi, the French industry 
minister, said yesterday. 

“Today Renault is quoted on 
the bourse and has stable share- 
holders ... It should prepare 
itself for a new step, that of pri- 
vatisation," Mr Rossi told the 
Senate, the upper house of the 
French parliament, while pres- 
enting his ministry's budget for 
1995. 

The remarks by Mr Rossi are 
the first indication of a timing for 
the full privatisation of Renault, 
a subject which is rendered sensi- 
tive by the company's status as a 
former trade union stronghold. 

During the company's flota- 


tion, in which the government 
reduced its holding from 80 per 
cent to just over 50 per cent, Mr 
Edmond Alphandery, the econ- 
omy minister, said privatisation 
was "not the order of the day". 
The government has previously 
refused to comment on the possi- 
ble tuning of a foil privatisation. 

Officials sought to play down 
differences within the govern- 
ment They said Renault was on 
the list of 21 public sector groups 
scheduled for privatisation by the 
centre-right government and that 
its sale was therefore expected. 
But some expressed reservations 
about Mr Rossi's remarks, argu- 
ing that it was not advisable to 
predict such an operation so Car 
in advance. 

Mr Rossi's comments will, how- 
ever, reinforce the assumption of 
most industry observers that the 
French government will move to 


reduce its holding to a minority 
relatively quickly after next 
spring’s presidential elections. "It 
always seemed likely that they 
would go below 50 per cent once 
the elections are out of the way,” 
said one motor industry analyst 
at a French merchant hank. 

The partial privatisation, 
which was completed on Novem- 
ber 18, drew strong demand from 
employees and from institutional 
investors, who subscribed for 
more than 15 times the number 
of shares offered. 

However, the issue was less 
enthusiastically received by indi- 
vidual investors, resulting in a 
subscription rate of 1.4 times the 
shares on offer. Strong institu- 
tional interest has pushed Ren- 
ault's shares above the FFr165 
offer price. Yesterday, the shares 
dosed at FFr181. 

Before a frill privatisation, the 


ships with other industry groups 
to secure its future as a private 
company following the collapse 
of merger plans with Volvo at the 
end of last year. 

Volvo retains just over 11.3 per 
cent of the shares in its erstwhile 
merger partner, but Mr Soren 
GyU. the chairman of the Swed- 
ish motor group, said yesterday it 
planned to sell its remaining 
holding when market conditions 
are favourable. 

Mr Rossi also confirmed the 
government’s intention to open 
the capital of France Telecom, 
the state telecoms operator. The 
proposal, which prompted strong 
resistance from mrirms last year. 
Is aimed at cementing ainannps 
with international telecoms 
groups. These include Deutsche 
Telekom and Sprint of the US. 


Williams stokes up fire protection 


By Peggy HoDinger in London 

Williams Holdings signalled a slowdown in 
its hectic acquisition campaign as it 
announced plans to purchase the fire protec- 
tion arm of BBA Group, the UK automotive 
components company, for £80m (Sl31mi. 

The deal brings the total spent on acquisi- 
tions by the British diversified industrial 
group to almost £25Qm in the past 12 months. 

Mr Nigel Rudd, Williams' chairman, expec- 
ted the pace of acquisitions to slow. “We have 
got to digest these businesses first. " he said. 
Wffliams has bought four other businesses 
since December, some of which were funded 
by a £267m rights issue in ApriL 

Angus Fire, which makes hoses, foam and 
foam equipment for the fire industry, will 
propel Williams into the world number-one 
slot for fire hoses with 21 per cent of the 
£11 0m global market Williams will also rank 


second after Monsanto of Italy in the manu- 
facture of foam and foam equipment with 
roughly 20 per cent of a market estimated at 
about £300m_ Last year Williams fire protec- 
tion division returned operating profits of 
£48m on sales of £249m. 

Mr Rudd said there would be considerable 
industrial synergy and cost savings from 
merging Angus's operations with Silvani of 
Italy, the foam fire protection group acquired 
for £16 Jm in October, and the company’s 
Kidde subsidiary. Hie expected that within 
two to three years the business would be 
achieving a return on sales of about 15 per 
cent, against the 8 per cent. 

Williams is expected to incur costs of 
between £3m and £5m for reorganising 
Angus. 

For BBA, the disposal marks a step towards 
completing the restructuring launched last 
year. So for. the group has raised roughly half 


of the promised £200m in disposals. 

Mr Roberto Quarta, BBA chief executive, 
said of the Angus sale: It is a good fit for 
Williams and a good price for us." BBA expec-. 
ted a profit on disposal this year of about 
£22m. 

Williams accompanied the announcement 
of the acquisition with a trading statement 
described by analysts as “rather dull". The 
company reiterated its comments at the 
interim stage that it expected to achieve its 
1994 expectations. “That’s not enough for a 
stock trading cm a 12 per cent premium to the 
market,” said one analyst 

Angus reported operating profits of £7m, on 
sales of £76. lm for the year to the end of 
December. Net assets were £27.4m. 

Williams will pay £69 .9m in cash and 
assume £iOm in debt The consideration will . 
be subject to a net asset adjustment 
Lex, Page 20 



AsHqrAtfMDod 

Chris Masters, chief executive of Christian Salvesen, the UK 
distribution and specialist hire firm, hopes to sell two divisions to 
concentrate on core businesses. Story, Page 22; Details, Page 28 


JAL says Y176bn currency 
losses will not hit earnings 



QynGflnm 

Aircraft depreciation charges have taken account of losses, JAL says 


By Wtttam Dawkins In Tokyo 

Japan Airlines said yesterday its 
earnings would be unaffected by 
estimated losses on 1985 forward 
currency buying contracts total- 
ling Yl76Jbn ($l.7bn) by the end 
of this accounting year. 

The size of the figure, uncon- 
firmed by JAL, caused a 4 per 
cent drop to Y681 in the share 
price, although analysts have 
long known that the airline is 
working its way through a huge 
Idle of currency losses caused by 
the dollar’s sharp fell against the 
yen. 

JAL said the losses had already 
been accounted for in past and 
future aircraft depreciation 
charges. While unable to confirm 
the exact loss, calculated by the 
Asahi Shimbun newspaper from 
currency contract records, JAL 
said it was based on correct data, 
covering the decade to March 


By Gerard Baker In Tokyo 

Japan's financial institutions 
will be required for the first time 
to disclose information about 
their derivative holdings, the 
Finance Ministry said yesterday. 

Hie disclosure rule is expected 
to foens on the type of deriva- 
tives contracts and their value, 
and could be enforced as early as 
next March, according to minis- 
try officials. 

The market in derivatives, 
securities such as futures and 
options contracts, developed in 
Japan in the late 1980s. TYading 
in many widely-used instru- 
ments is highly circumscribed by 
the Finance Ministry, but Japa- 
nese banks and brokers have 


Last month JAL announced 
Y43.9bn of unrealised currency 
losses for the two years until 
March 1997. It was JAL's first 
such announcement, a conse- 
quence of a change in Japanese 
disclosure rules to give investors 
more information about compa- 
nies' currency exposure. 

Others to have disclosed cur- 


been active in developing a mar- 
ket in those derivatives that are 
pennitted. 

Id the last year regulators 
watched with alarm as the high- 
ly-geared nature of derivatives 
increased the exposure of compa- 
nies to heavy losses. Earlier this 
month, one Japanese broker, 
Tokyo Securities reported that it 
had lost Y32bn ($324m) from con- 
tracts on currency options, a 
sum equivalent to more than a 
third of the value of its share- 
holders* equity. 

The authorities have expressed 
deepening concern about the 
market, as Japanese companies 
previously were required to give 
only sketchy details about their 
derivatives portfolios. 


rency losses in their half-year 
reports include All Nippon Air- 
ways, with a Y10.7bn shortfall - 
also on forward dollar buying 
contracts - and 10 companies in 
the construction and electronics 
sectors. 

JAL's currency shortfall comes 
from forward contracts to buy 
dollars for yen, at rates agreed in 
the mid 1980s, when the dollar 
was worth more. JAL needs to 
buy dollars every year, because it 
pays more than $lbn annually for 
fuel and aircraft, but earns most 
of its revenue in yen. Forward 
contracts allow it to calculate in 
advance the full yen cost of buy- 
ing aircraft, even at the risk of a 
costly miscalculation. 

The company used to take out 
long term futures contracts, run- 
ning up to 10 years ahead, to 
fund its aircraft buying pro- 
gramme, Alarmed by the growing 
currency losses. Mr Susumu 
Yamaji, the president, earlier this 
year asked his finance depart- 
ment to buy dollars on shorter 
and less risky forward contracts. 

JAL reported a tumround with 
a Y20.6bn recurring profit on its 
operations for the six months to 
September and is expected by 
equity analysts to make a small 
profit for the full year, turning 
the corner after three years of 
losses. 


1995. 

Finance Ministry orders 
derivative transparency 


*• -VI, . 



ftst 1972^ 

Sebpiter To&ya'n -j. % . 


ScfcjK>de£ Japanese S^Gos> 




Sfcfcrofe V: 

4sf ajode IaiiuC&iff-J990 -It 

^ 

r — * 


Schroders. 

A world ahead 
in performance. 


Such unit trust performance will raise 
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After ail. a reputation such as Schroders* 
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impressive short term results. The Imih is, 
Schroders have consistently delivered 
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Nor is it an achievement that has 
gone unnoticed. Wc now have over Lb 
billion under management** in unit trusts 
from those who already know about our 
track record. 

Of course, you may wonder how 
such an accomplished performance is 
maintained so consistently. 

The reality is that Schroders have 
resources above and beyond those of most 
comparable organ isations. The Schroder 
Group has over 3000 staff in 20 countries. 
Through them we obiuin the in-depth 
research and local knowledge which hus 
produced lop performing unit trust funds. 

So our results over the Iasi three, five 
and ten yean will come as liule surprise. 

All of which begs one question. 
Wouldn't you be better off with Schroders? 

You can invest with a minimum of 
only £{.000 in any one unit trust and our 
regular savings plan costs as little as £25 
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For more information on our 
world-class unit trust performance. 


Schroders 

Schroder Investment Management 


jusl call us free or return the coupon 
below. Alternatively, contact your usual 
financial adviser. 




Call 0800 002 000 




! TO; SCHRODER UNIT TRUSTS LIMITED. 

1 00787 FREE POST. LONDON EC4B4AX 

i Please send me a fowettpy of “How to Invest in 
I a Schrader Unit Truss - , including informal ion 

I on Schroders 1 range of funds. 

lair particularly iniere&icd in: UK D USD 
• Japan □ Far East □ Europe □ 

I Emerging Marked Q All nfifmc O 

| Name 

. AAlr&s 


. Postcode. 


I TeL No. . 

1 'Source: Uurapal haying price to srlling yetee in I 

I relevant seclur i rlih net income reinrexfed to I 
14.11 *4. 5 year figures from 01. 11.99. Schroder I 
t UK Equity Fund sitter 03 0! 72 (first date I 
I recorded on Mieropul) III! tuul arer 5 years I 
i HS2. Schroder Tokyo Find saw 02.03 31 III l . 
I and orrr$ rears SfTO. Srhroder Japanese SmtBer] 

I Companies Fund since Ol.02.R4 1126 imd orer . 
S years 1170. Schroder UK Enterprise fundi 
■ since 01.08.83 1110 6 and over J vrarj , 
I 211 18 Schroder US Smaller Companies Fund ( 
. »uirr 01.0} W 11106 “Source: httesimeni , 
{ httefligeturai Of. 10.94 J 

I Past performance hi not necessarily a guide to ' 
fume performance. The value of hnesunena tmd\ 
the income from them rat go domt i anvil us up* 
j and the investor may not get hack the } 

originally infested I 

J Sdsroda Unit Trusts is regulated by IMRO and J 

“■ "j 


> 





22 


FINANCIAL TIMES TUESDAY NOVEMBER 


INTERNATIONAL COMPANIES AND FINANCE 


Italian bank set to lift bid for rival 


By Andrew HB in Milan 

Shares in Credito Romagnolo 
(Rolo), were suspended yester- 
day morning' amid growing 
speculation that Credito Itali- 
ano (Credit), the Milan-based 
bank, was preparing an 
improved offer for its Bolo- 
gnese competitor. 

Credit revealed a month ago 
that it was planning a L2,Q00bn 
($L24bn) bid for a 48 per cent 
stake in Rolo which would give 
it control of the bank. 

Rolo has reacted defensively, 
reviving plans for a merger 
with CAER, parent of the local 


savings bank, Cassa dl Rispar- 
mio in Bologna (Carls bo). 

Credit’s shares fell by more 
than 4 per cent yesterday on 
speculation that the bank 
might have to pay as much as 
L23,000 a share for Rolo. 
against Friday’s closing price 
of LI7.098, and bid for a larger 
stake. 

In its original plans, Credit 
said it was prepared to offer 
L19.000. 

Consob, the Italian stock 
exchange watchdog, suspended 
the Rolo shares after Italian 
newspapers reported at the 
weekend that Credit was plan- 


ning a new bid in an attempt 
to win over Kola’s sharehold- 
ers before December 19. when 
they must vote on the merger 

plans. 

Mr Enzo Berlanda, Consob 
chairman , yesterday told Ansa, 
the Italian news agency, that 
work was under way on the 
Credit-Rolo dossier at the 
authority's Milan offices. 

Credit's promised bid has 
still not been approved by the 
Bank of Italy, which supervises 
the Italian banking system, 
that puts the Milan bank at a 
disadvantage, because the cen- 
tral bank has already given the 


gu- -ahead to the Carisbo-Rolo 
merger. 

The Bolognese hanks have 
laid great emphasis on preserv- 
ing their regional roots, which 
suggests that extra cash would 
not be enough to win over 
local Rolo shareholders to the 
Credit offer. The Milan bank 
might also have to make cer- 
tain guarantees of shareholder 
rights. 

However, advocates of the 
Credit bid point out that the 
main shareholders of Rolo are 
not closely linked to the region 
and may be more willing to 
sell to the highest bidder. 


Lafarge 
rales out role 
in US deal 

By John Ridding in Paris 

Lafarge Coppfee, the French 
building materials group, has 
ruled out a plan to cooperate 
with Golden Eagle Industries 
in its $940m bid for National 
Gypsum, the second-largest US 
plasterboard manufacturer. 

The French group, which 
holds 10 per cent of the shares 
in National Gypsum, said it 
had rejected the idea of a joint 
bid, and was studying what to 
do with its stake. 

The decision complicates the 
task of Golden Eagle, which 
holds 19 per cent of National 
Gypsum and is leading the bid 
by a group of North Carolina- 
based investors. 

Golden Eagle, headed by Mr 
C. D. Spangler, non-executive 
chairman of National Gypsum, 
may also face barriers to any 
hostile bid. These were agreed 
by shareholders of the plaster- 
board company last week. 

Industry observers dis- 
counted the idea that Lafarge 
Copp&e would make a rival 
offer for control of National 
Gyspuro. 

Although Lafarge is one of 
Europe’s largest plasterboard 
manufacturers, and has a 
strong presence in the US 
building materials market, 
analysts say it probably c anno t 
afford to be part of the 
National Gypsum acquisition. 

Lafarge declined to comment 
on whether it would vote 
against the bid offer, or what 
it planned to do with its 
stake in the US plasterboard 
group. 


BK Vision wins injunction 
against UBS share plan 


By Ian Rodger 
In ZUrfch 

BK Vision, the investment 
fund controlled by Mr Martin 
Elmer's BZ banking group 
which is rhanMig in g the man- 
agement of Union Bank of 
Switzerland, has won an 
injunction preventing the bank 
from converting its registered 
shares fritn bearer shares until 
an appeal against the plan Is 
heard. 

UBS shareholders narrowly 
approval the conversion plan 
- with 57.8 per cent of regis- 
tered shares in favour - at an 
extraordinary meeting last 
Tuesday, following a tense 
proxy battle between BK 
Vision and the UBS board. 

BK Vision, the largest share- 


holder in UBS, claims the plan 
is illegal because it does not 
offer compensation to 
registered UBS shareholders 
for the loss of the extra voting 
weight attached to their 
shares. 

The registered shares have a 
par value of one-fifth that of 
the bearer shares, giving an 
investment in them much 
greater voting power than a 
similar investment in bearers. 

A Zurich district court judge 
yesterday accepted BK Vision’s 
argument that it would be diffi- 
cult to reverse implementation 
of the plan if an appeal court 
ruled much later that it was 
illegal. 

The two sides will now pres- 
ent their arguments to the 
judge on a suitable deadline for 


BK Vision to submit its appeal 
case. 

By law, the latest possible 
date is January 22. but UBS 
will argue for an earlier 
deadline so that the case can 
be decided as quickly as possi- 
ble. 

The UBS board wants to 
implement the conversion 
before the next annual general 
meeting in April. 

At that meeting. 10 of the 22 
directors’ terms expire, and BK 
Vision is trying to rally a 
majority of votes in support of 
substantial changes to the 
board. 

If the conversion goes 
through, the voting power of 
BK Vision and other large reg- 
istered shareholders will be 
substantially reduced. 


BHF Bank’s account trading hit 


By Andrew Frsher 
in Frankfurt 

BHF Bank yesterday blamed 
the collapse in world bond 
market prices for a sharp slide 
in profits from trading on its 
own account in the first 10 
months. However, it said this 
was almost entirely offset by 
earnings from normal cus- 
tomer business. 

Operating profits at the Ger- 
man bank were 0.7 per cent 
lower at DM265m (3170m), after 
a 22.5 per cent rise In partial 
operating profits (which 
exclude own-account trading in 
securities, foreign exchange 


and other financial instru- 
ments) to DM375 sl 

The h ank managed to 
increase its interest earnings 
by 16 per cent to DM598m. with 
commission profits up 43 per 
cent to DM298m. Operating 
costs were held to a 55 per 
cent increase at DM521m. 

Profits on the bank's own- 
account trading were 85 per 
cent lower at DM 14m. continu- 
ing the decline of earlier 
months which reflected write- 
downs on BHF's bond portfo- 
lio. It increased its bad-loan 
provisions by 13 per cent to 
DM149m. The bank is exposed 
to both the Schneider property 


and Balsam, Procedo factoring 
collapses. 

Two months ago, the bank 
announced plans to tom itself 
into a joint stock company and 
strengthen its asset manage- 
ment and corporate finance 
business throughout Europe. 

The costs of the reorganisa- 
tion will weigh on next year’s 
result, and probably that of 
1996, but should eventually 
lead to increased returns on 
capital. Munich Re, the world's 
largest reinsurance company, 
recently’ disclosed a 5 per cent 
holding in BHF. The Allianz 
insurance group and DC. Bank 
also own stakes. 


Eurotunnel 
in row with 
UK bank 
debt trader 


By Robert Peston 
in London 

A row has erupted between 
Eurotunnel and Klesch & Com- 
pany, the London-based bank 
debt trader, over a report 
issued by Klesch called “Euro- 
tunnel Interim Results - 
Disaster Ahead”. 

The channel tunnel operator 
has written to Fimbra, the UK 
financial regulator, saying 
that the report is “seriously 
mis l eading and is plainly the 
product of serious negligence”. 

The letter by Mr Graham 
Corbett, the group's chief 
financial officer, says: “There 
appears to me to be the plai- 
nest indications of a breach of 
your rule requiring reports of 
this sort to be fair and not 
misleading and consequently 
clear grounds for an investiga- 
tion." 

Mr Gary Klesch, founder of 
the debt- trading firm, said 
there was “nothing wrong 
with the report . . . We stand 
by it”. 

He complained that Euro- 
tunnel had consistently 
refused to co-operate with his 
firm's analysts when they 
were preparing reports and 
that there is “no hint that 
Fimbra is taking the com- 
plaint seriously”. 

Mr Klesch urged the com- 
pany “to use the courts” if it 
believed the report was seri- 
ously in error. 

Mr Corbett believes that the 
report is in part responsible 
for Eurotunnel's bank debt 
being quoted in the secondary 
market at 60p in the pound. 

A number of Eurotunnel’s 
200 bank creditors have 
become concerned about the 
low market price for these 
loans. As a result, Mr Corbett 
bas also written to Mr 
Anthony Jarrett, who co-ordi- 
nates Eurotunnel's relation- 
ship with Its banks, asking 
him to inform them it has 
“filed a formal complaint” 
against Klesch & Company. 

The Klesch report, written 
last month, forecasts that the 
group runs out of cash next 
year and has a £423m defi- 
ciency at the end of 1998. 

Mr Corbett says this is “fun- 
damentally wrung”. 

Heron vote, Page 28 


Akzo Nobel’s 

operations put up 


By Christopher Brown-Mines - 
n Stockholm 

Akzo Nobel, theDutcbSwedish 
chemicals group, is pfenning to 
sell its hydro-power operations 
to Stockholm Energi, Sweden’s 
third-iargest energy producer. 

Analysts said the deal could 
be worth mare than SKr2bn 
(S16Q.7m) on a debt-free basis. 

The move will end a century- 
long involvement by Nobel in 
flip pnwgy business and is in 
line with its strategy of focus- 
ing on core businesses. 

Akzo Nobel, formed this year 



through the merger of Swe- 
den’s Nobel Industries atnd 

Akzo of the Netherlands, has a 


which owns four : _ 
and throe smaller hydropower 
plants in Sweden with a com- 
bined production capacity of 
940 gigawatt hours. The plants 
have traditionally met about 50 
per cent of the group’s Swedish 
energy needs. 

The remaining Njordkraft 
shares are held by financial 
investors, mainly pension 
funds and insurance groups. 
Akzo has options to purchase* 


these siexir^ 

enabling Stockholm Ehfir_ __ 
gain fiifl.castrol 

. Mr Dag StiCtoqvM, .msjt&jg- 
ing director of Ste.Ndtatj|te 

ness. We are in'tfe 
business." -He dedbu$ 
afosfiKtesnSr sajfiug.iaSi'TOre 
at an eariy stage. ■ . 

Stockholm EnergL produces 
around IS* terawatt hours#! 
alectridtpa year. Half JUS too- 
put is generated by nuclear 
power and 35 per cent. by.. 
'hyffit^eteciiklpowa , . . 


Steel stake disposal helps NCC 


By Christopher Browm-Humes 

NCC. Sweden’s second largest 
construction group, said yes- 
terday that a SBrl 2hn capital 
gain from the sale of its 222 
per cent stake in Avesta Shef- 
field, the Angio-Swedish stain- 
less steel producer, had given a 
sharp boost to profits in the 
first nine months. 

The sale helped the group to 
compensate for the continuing 
recession in the Swedish con- 
struction market It reported a 
SKrl.45hn ($ZAL2m) profit after 
financial items for tile period, 
co m pared with a SKrS46m sur- 
plus a year ago. ff one-off items 
are excluded, income improved 
to SKr262m from SKitiSm. 

NCC sold its holding in 
Avesta for SKr22bn in Septem- 


ber. British Steel picked up a 
big portion of the shares, lift-' 
mg its stake is Avesta to 49J9 
per cent from 40 per c eat 

NCC said its main construc- 
tion operations continued to be 
hit by difficult market condi- 
tions, which lowered group 
sales to SKr 12.10m from 
SKHSAbn. 

But Mr Jan Sjflqvist, group 
president, said there- were 
“clear signs that the market 
trend is reversing”. He said 
orders received by tire group’s 
Swedish construction busi- 
nesses had been 30 per cent 
higher than last year at 
SKi9.7bn. Total orders rose to 
SKrii-ti hn from SKriUbn. 

The group is predicting a 
full-year profit of between 

RBXMiniri an ri SRuHn Thfn k 


: after incltkOng writedowns of 
between SKrSOOm and 
SKr400m in ^ the full-year 
accounts, primarily- linked to 
properties - held ' for future 
development outside -Sweden 
Last year, the group achieved a 
SKrl75m profit • 

- NGC’S civil ■ engineering, 
b uilding pud production units 
reported nine-month prefits of 
SKrtOTm, down from SKWMa 
last year. - 

The group's real estate dfaf- 
mon remained In the red, with 
a SKriSlm loss, only shghtiy 
down on last year’s SKrl99m 
deficit - . 

NCC Invest lifted profits to 
SKrl.37bn from- SKr44Sm- 
Excluding one-off items, the 
unit swung to aSKrlSlm profit - 
from a SKr33m loss. 1 . : 


Salvesen to focus on core units 


By Sanon Davies in London 

Christian Salvesen, the UK 
distribution and specialist hire 
group, is looking to sell its pol- 
lution control and bride manu- 
facturing divisions by the end 
of this financial year, raising 
about £60m ($93Sm) to invest 
in its core businesses. 

The disposals would almost 
halve its £12Sm of net borrow- 
ings and Salvesen is looking at 
acquisitions in European dis- 
tribution. after the success of 
its £84m purchase of Swift, the 
industrial distribution 
company. 

The group’s results, how- 
ever, were Iks upbeat Pretax 


profits for the six months to 
September rose 1 per cent to 
£4Lfrn in spiteof the impact of 
Swift, which was purchased in 
October 1983. . . 

Salvesen issued a profits 
wanting last February,, after a 
rapid downturn from Aggreko, 
its specialist plant hire busi- 
ness l Aggreko’s latest figures 
reveal a t u m round in the US, 
which achieved. 23 per bent 
growth. Generator hire Sir the 
World Cup helped, but it also 
benefited from large cost cuts. 
However, Aggreko’s European 
businesses offset most of this 
improvement 

Light & Sound Design , 
acquired for £7.6m in 1991, . 


. slumped into loss, and Salv- 
esen plans to trim its' 
operations. This could lead to 
secondhaff writedowns, whfch 
will -offset fikeiy profits from 
the sale df the brick business. 

. The . specialist hire division 
saw oparating' profits fell -4*5 
percent to £Z4Am. Distribution 
now accounts tor almost half 
of Sahresea’s £31&3m (£262&n) 
turnover, ami the division’s 
profits -jrose: 20 per , cent 1 to 
£ZL€m, bobsted by a EfoTm oozf 
tribatian from Swift. . 

. The company is paying a 
3-4p dividend, up from 3.3p- 
Earnings par share were 10.5p 
<10.29p). . 

Detafls,Page 28 


We take pleasure in announcing the admission 
of the following General Partners, effective 
November 26, 1994: 


Paul M. Achleitner 

Oki Matsumoto 

Armen A. Avanesians 

E. Scott Mead 

Joel S. Beckman 

EricM-Mlndich 

David W. Blood 

Steven T. Mnuctdn 

Zachariah Cobrtnik 

Thomas K. Montag 

Gary D. Cohn 

Edward A MuM 

Christopher A Cole 

KtopM. Nelson 

Kevin J. Conway 

Christopher K. Norton 

Henry Cornell 

Robert J. O'Shea 

Robert V. Delaney 

Kflet H. Pot 

Joseph Della Rosa 

Jack L. Salzman 

J. Michael Evans 

Eric S. Schwartz 

Lawton W. F!tt 

Michael F. Schwerin 

Joseph D. Gatto 

Richard Sharp 

Peter C. Gerhard 

Richard G. Sheriund 

Nomi P.Ghez 

Michael S. Sherwood 

David T. Hama mote 

Cody J Smith 

Walter H. Haydock 

Daniel W. Stanton 

David LHenle 

Esta E. Stecher 

Fronds J.lngrassia 

FredricE. Stack 

Scott B. Kapnlck 

Bytxm D.Trott 

Kevin M. Kelly 

Barry S. Volpert 

John C. Klemert 

Peter S. Wheeler 

Jonathan U Kolateh 

Anthony G. WIBiams 

PeterS. Kraus 

Gary W. Wflfiams 

Robert Litterman 

Tracy R Watatencroft 

Jonathan M. Lopatin 

Danny O. Yee 

Thomas J. Madrowski 

Michael J. Zamkow 

Peter G.C. MaDInson 

Goldman, Sachs & Co. 

Mark A. Zkirocfc 


Bffna Bason Cheapo Dates FranMuri 

Hong Kong Houston London Los Angeles MemoMs Menu 
MUOI Montreal Moscow New Yah Osaka Parts PhiaOetptm 

San Francisco SUgapcre Sycnev Tokyo Toronto Vancouver ZwkJi 





Alex. Brown & Sons 

INCORPORATED 

is pleased to announce that 
former Securities and Exchange Commissioner 

J. Carter Beese Jr. 

has rejoined our Jinn as 
Vice Chairman of Alex. Broom international. 

135 East Baltimore Street 
Baltimore, Maryland 21202 
(410)727-1700 • (800) 63B-2596 




U.S. $34,000,000 
BRNCn SB¥M,S.R. 


Floating Rate Notes 
due 2004 

For tea Interest period Iran Novanw 
20, 1994 to May 30. 1995 (Da rate 
ha» been dmmkwcf tf 7.31 25* par 
annum. The amount payable on 
May 30. 1995 per U S. 5500,000 
pmCipeJ amount ol Notea wll be U.S. 
518,484 .38. 

ByiUiamMtfMMBiAM. 

lrta,AgM8a*k Q 

November 29, 1994 chase 


£ - V :.. 

astiSaiit 

• . ■ ■*trattay •» 

■ ■■■■jmsnstm : ui 

-•■v*- ' .! A* • . J ■ 


FT 

WORLD 

ACCOUNTING 

REPORT 


: !N.\NC!.\1 TIMES 


FT WORLD 

ACCOUNTING REPORT 
provides comprehensive and 
authoritative monthly 
coverage of changes in 
financial accounting 
worldwide. 

It reports and analyses: 

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international accounting 
committees and regulatory 
bodies - including the IASC, 

FEE, IFAC, OECD and UN. 

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developments in accounting 
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WMootn 


Internationale 
Nederlanden 
Bank N.V. 

EuabBihed in Amsterdam 

US. $100,000,000 

Subordinated Collared 
Floating Rate Notes 
due 2003 

For the interest pcrx.d 28th 
November. l^M m Wth May, 
1995 the Notes mill carry an 
interest mteufti.ObiVfc per an- 
num, die interest amount pay- 
able per U.S. 1.000 Note will 
be U.S. 510.82, and for die 
U.S. $10,000 Note will be 
U.S. $308. 18, nnd lor the 
U.S. 5250.000 Note will be 
U-S $7,704.41, payable no 

JOrh May, IQQ5 

LiMnl un ihr iuranKnin Sn J. Eictuw 


QBankenTrutt 


Company, LoaAw A*ntBa»k 


ONnyaCnfM 

DMt 

Decades ef heamxal Eatora paces 
jad lludMicaU Bton&nJon 
luwnHflwr l y a yam fiflggtiptl By 
eretyllang jw need a oae ruy K>-| 
CRB Inf oToci bdpa Jtm perform 

amijstetaebeufag. 
nw d flhf . IMCW H iti omanlloainBnL. 

35 YEARS OP HETORICAL PRICK FOR 
CASH. FUTURES, OmOTC AND 
INDEX MARKETS. 

» YB4BSOFRMMMOTAL WTOBMA3 WI 
on over noaMOCKB. 

g j~ n ** irr Hr Pi f f i n ni- *m i Bmml In rtr *~PR 
Qsmnodiiy Year Book, Be 'Nhfc' of the 
M hu iai ad q . b p 

blanical ifats. CXB UOixli abepnoidesdUy 
price updoes via KR-Qaote, Km^t-Rlddo's 
jpeofieslly des^gead la 
ikwakad oad taper! cod-gf-dsy prices 

rii mrih r retO TCV dateheee 

[NTORMAT»N: Vksatin Viki 

Flea SBTS*,L«ta BOY 1HY 
Tet e44 (D) Tt MS 400 


This annmauarunt appears as a matter of record only. 


November 1994 


GLENCORE 

INTERNATIONAL AG 


has acquired 

the remaining 25%. of its shares held by 
Marc Rich + Co Holding AG 


The undersigned acted as 
financial adviser to Glencore International AG 


Union Bank of Switzerland 



■“ALLIANCE 9 LEICESTER 
Affiance k Ltecdter BmUiag Soday 
£200,000,000 
Floating Rate Notes 
due 2000 

For the interest period 25th 
November, 1994 to Z7ch Feb- 
nary. 1995, the N«w will 
catty a taw of interest of 
6-2125% per annum with inter- 
est amounts of £159.99 per 
£10.000 and £1,599.93 per 
£(00,000 Note, payable an 
27th February, 1995. 

UmJieiHwLsmnteimBSaKfcEirfm^- 


gBankmalhar 


Comp a n y. London A imBsnfc 


THE BUCKS 
START 
HERE. 


At 


your newsagent every Friday. 



THE CITY INSIDF. Oi rr 


ROYAL BANK OF CANADA 

U-S - Roaring feta ’ ' 

D^tiemuroi due 2005 — . 
accordance whh the Tame tod 
of the Debenture* the 
Wtt for the period 30* 

fbcad Bt S%% per -Dtwm. 
on 30* Dacambar, ktowt o t 

?W39583 per ILS. SinOD nonAwT 
of dw Debentures w» lie 
r* fo* 1 Poyment. Tha rate of 4mr«n 
“ **• Parted c o mmencing '30* 
1394 be determined an 


Asent Bank end ■ 
PrtndpeiPsyaniABwf .= 

ROYAL BAf« OF CANADA 
EUROPE UMTTEt> 






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FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 


23 


INTERNATIONAL COMPANIES AND FINANCE 


Ford returns to Samcor with 45% stake 


By Mark Suzman In Johannesburg 
and Kevin Done In London 

Ford of the US, the world’s second 
largest vehicle maker, is re-entering the 
South African market through the pur- 
chase of a 45 per cent stake in South 
African Motor Corporation (Samcor). 

Ford divested its equity interest in 
Samcor in late 1987 as part of a series of 
withdrawals by US companies from 
South Africa in response to pressure 
from anti-apartheid groups. 

Samcor assembles Ford vehicles and 
some Mazda and Mitsubishi models. 
Fond will hold an equal stake with 
Anglo-American Industrial Corporation, 
buying 31 per cent of Samcor’s equity 
from Amic and a further 14 per cent 
bum the Samcor Employees Trust. This 


mil leave AMIC and Ford both holding 
45 per cent with the remai ni ng 10 per 
cent staying in the hands of the trust 
Mr Jim Miller, director of eastern 
Europe and export operations for Ford 
of Europe, is to become Samcor group 
managing director and chief executive, 
The deal, which has been expected for 
several months, in effect marks a 
return to the situation that existed 
prior to Ford's disinvestment from 
South Africa. 

Samcor was formed is 1565 as a joint 
venture between Ford South Africa, 
which had been founded by Ford Can- 
ada in 1933, and Anglo-American’s 
existing automotive interests. 

Mr Wayne Booker, Ford executive 
vice-president of international automo- 
tive operations, said he hoped the US 


group's direct Involvement would prove 
to be a spur to improved production 
and new export initiatives by Samcor. 

"When I say Ford will reestablish its 
presence in South Africa. I mean It," he 
said. “This is not only an investment 
Our action symbolises Ford’s commit- 
ment to the South African market and 
the success of Samcor." 

Mr Booker declined to disclose the 
financing of the transaction, saying 
only that it was a combination of new 
cash, new equipment and product 
Investment. It was revealed, however, 
that the Employees Trust had received 
R50m (514.1m) for the 14 per cent of 
Samcor equity it bod sold to Ford. 

Samcor is currently In fourth place 
among South Africa’s seven main 
vehicle makers. It has monthly sales of 


around 2,200 vehicles, trailing market 
leaders Toyota, Volkswagen and Nis- 
san, bat ahead of Mercedes-Benz, Delta 
{which manufactures Opel models) and 
BMW. 

South African producers currently 
manufacture about 320,000 units a year, 
of which passenger can account for 
just over two-thirds. Almost all produc- 
tion is for the local market 

The industry is under intense pres- 
sure, however, as South Africa begins 
to dismantle Its high tariffs an imparted 
motor vehicles, currently about 100 per 
cent, in line with Gatt requirements. 
Manufacturers, organised labour and 
the government are in negotiations to 
find an acceptable schedule for phasing 
out roost of the industry’s protection 
over the next eight years. 


Pearl Tyre 
offering takes 
ASX closer to 
‘Asian board’ 

By NMcf Taft fn Sydney 

Efforts by the Austr alian Stock 
Exchange (ASX) to secure 
enough foreign listings to form 
a special “Asian board” within 
its local stock market took 
another step forward yesterday 
when Pearl River Tyre, a Chi- 
nese tyre business, announced 
plans for a A$4£k2m (US$33.4m) 
share offering. 

Pearl River is a Bermuda- 
based company formed to hold 
a TO per cent interest in Guang- 
zhou Pearl River Tyre. GPRT, 
in turn, is based In Guangdong 
province and makes tyres for 
bases and other commercial 
vehicles. The remaining 30 per 
cent of GPRT is owned by 
Guangzhou city, which was 
formerly the sole ultimate 
owner of the tyre business. 

Pearl River is planning to 
sell 452m shares at A$1 each. 
This stock will represent 86 per 
cent of the company’s issued 
capital, and the balance will be 
held by the government of 
Guangzhou and professional 
advisers involved in the trans- 
action. A group of Malaysian 
businessmen has already 
agreed to subscribe for some 
18.4m shares, and a similar 
amount has been placed with 
international institutional 
investors. This leaves about 
10m shares available for the 
general public. 

The money raised will be 
used to double the company's 
production capacity by 1997, 
from about lm tyres a year at 
present 

Sales in 1594 are expected to 
be about Aj60m. 

The listing, which is expec- 
ted to take place early in 1995, 
will mean that about half a 
dozen “China concept” stocks 
trade an the ASX, with Pearl 
River being the largest 

Correction 

Pioneer 

In a recent report of Pioneer’s 
interim results it was incor- 
rectly stated that the compa- 
ny's consolidated sales were 
down to Yl29bn from Yl302bn. 
This should have read down to 
Y245.6fan from Y255-5bn. 


Poor returns for Japan’s life groups 


By Bnlko Terazono 
ht Tokyo 

Japan's Leading 
■ 2S»Gfi life assurers 
.. A ^ saw an 
T-Vii- increase in pre- 
mium revenues 
Insurance but suffered 
low returns on. 
their investments during the 
first six months to September. 

Combined premium revenues 
at Nippon Lite, Dai-Icbi life, 
Sumitomo Life, Meiji Life, 
Asahi Ufa. Mitsui Life, Yasuda 
Life and Chiyoda Life rose 13.4 
per cent to Yl2.076.4bn 
($122.7bn) due to higher premi- 
ums from April. But a sluggish 
domestic bond market and 
smaller interest ftnrt dividend 
income amid low interest rates 
hint returns on Investments, 
and the top eight assurers saw 
aggregate income from these 
sources fall 9.7 per cent to 
Y2£S2£bn. 

Investment returns were less 
than 4 per cent on average, 
sharply lower than the compa- 
nies’ prospective dividend pay- 
out rates for policyholders. 
Investment yields have not 
stopped falling since peaking 
at 62 per cent in 1969, and a 
Anther decline may force the 
companies to cat their divi- 
dend payments for the fifth 



Interim results to September 1994 (Ybn} 


' 1 - . - • 

Insurer 

Not premium 
Income 

Chtmga on 
KMrfW) 

Return on Chengs on 
ftnestment jw f%) 

Norr-pertomdng 
loans _ 

. He*ywr 
ch*ngr{%)- . 

Wppon 

2.918.8 

+8.0 

752-0 

■4 JO 


228- 

■ . '+7V6 \ 

Dal -ten, 

2,173.1 

+12JZ 

548,0 

-7.0 


44.8 

.-106 

Sumitomo 

1,951.6 

+10.3 

447.0 

-28.1 


45H 

-8.4 

MeQ 

1.424-4 

+143 

304.9 

-102 


13.7 

. ‘-03 . 

Asahi 

1.1083 

+17.3 

264.9 

-5.9 


. ig.a 

. .+124 ' 

. Mitsui 

927.1 

+18.4 

214.2 

-0J2 


201 

' +142 

Y«uda 

82&Q 

+19.2 

197.6 

-1.7 


8.1 

+24 

Chiyoda 

648.6 

+31.2 

162.6 

-08 


1925 

* -27 : 







Scwme 

conywp nioMI 


consecutive year. Officials at 
the companies said they were 
still considering the possibility. 

While the leading companies 
have the unrealised gains on 
stocks to support them, declin- 
ing investment yields, bad 
loans and slowing growth in 
new contracts are affecting the 
financial soundness of some of 
the industry’s amaliw compa- 
nies. Analysts reckon some of 
the bigger groups may be 
forced to support the financial- 
ly-troubled smaller companies 
following the industry's liberal- 
isation scheduled in 1996. 

Insurance benefit payments 
for the top eight companies 
rose 22.1 per cent, with many 
policies maturing or being can- 
celled. Meanwhile, the com- 
bined balance of non-perform- 
ing loans fell 3.6 per cent to 
Y364J?biL 


The companies have been 
selling their long-term share- 
holdings to cover for the 
declines in investment returns. 
Profits from stock safes rose at 
all eight companies except 
Sumitomo, with combined 
gains up 4.7 per cent to 
Y293.9bn. Profits from, stock 
sales surged by four times at 
Nippon to Y22-7bn while Yas- 
uda’s gains doubled to Y2fi5bn 
Total unrealised gains from 
stocks, which have tradition- 
ally acted as a buffer against 
losses on investments, totalled 
YU. 068b n at the end of Sep- 
tember, up 2.4 per cent from 
the end of March due to a 
slight rise in the stock market 
However, the figure is still 
insufficient to absorb further 
losses on high-risk investments 
and asset allocations of the 
companies are expected 


to remain conservative. 

During the first half, compa- 
nies allocated Binds to the 
domestic bond markets and 
loans, while reducing foreign 
currency exposure. At Nippon, 
the industry leader, bond 
investments at the end of Sep- 
tember rose 2.4 points from six 
months earlier to 15 per cent of 
total investment assets, while 
overseas securities invest- 
ments fell 0.8 points to 6 per 
cent Sumitomo's band invest 
meats rose 2 & points from the 
end of March to 1&2 per cent of 
total investment assets white 
funds in deposits fell 2.4 points 
to 4J3 per cent 


USPru’s 
stockbroker 
unit to quit 
Tokyo SE 

BY Gerard Baker to Tokyo 

Prudential Securities, the 
stockbroking arm of Pruden- 
tial Insurance of the US, is to 
join the lengthening list of far- 


ing the Tokyo Stock Exchange. 

The company announced 
yes terda y that it had notified 
the TSE of its plans to relin- 
quish its regular membership 
of the exchange, transferring 
it to a third party. 

The decision reflects Pruden- 
tial's plan to “substantially 
downsize" its operations in 
Japan, including Japanese 
equity business, as port of a 
wholesale review of the par- 
ent's worldwide operations, 
the company said . 

Sale of Its TSE membership 
wili enable Prudential to cut 
operational expenditures and 
divert funds for other busi- 
nesses. Bat It said it planned 
to continue to trade US securi- 
ties in Japan, as wefi as Japa- 
nese government bonds. 

In the last few years foreign 
brokers have been leaving 
Japan as business in the Japa- 
nese securities market has 
dried up. Equity trading vol- 
umes reached a peak of more 
titan Ibn shares a day fn 1969 
but then fell to less than 300m 
shares a day test year. After a 
iiigh* increa se in the first half 
of 1994, volumes have slumped 


Foreigners flocked to Tokyo 
in the 1980s as the market was 
liberalised and equity trading 
increased exponentially. The 
total of subsidiaries and repre- 
sentative offices grew from 
112 in 1984 to 280 in 199L But 
since the slump, many brokers 
have been leaving the TSE. 
Prudential’s departure takes 
the total to below 230. 


Aoki sells stake 
in Westin Hotel 
group for $561n 


By ErnBoo Terazono In Tokyo 

Aoki, a Japanese construction 
company, has sold its share- 
holdings in the Westin Hotel 
group for $561m to US real 
estate Investors Starwood Capi- 
tal Group and a subsidiary of 
Goldman Sachs. 

Aoki sold its shareholdings 
in two Westin group compa- 
nies, Westin Hotel and Westin 
International Europe, which 
operate 63 hotels in 11 North 
American and European coun- 
tries and the Westin trademark 
rights in South America. 

Aoki is another company on 
the list of Japanese corpora- 
tions struggling with overseas 
Investments made daring the 
economic “bubble” of the 


1980s. The construction group, 
together with a group of OS 
investors, bought the Westin 
hotel chain at 80 hotels in 19 
countries In 1988 for $l-35bn. 

Immediately after the pur- 


chase, Aoki and the investors 
sold off the Westin Mauna Kea 
in Hawaii and the Plaza in 
New York for more than 
STQQm. Since then the Japanese 
company has faced mounting 
interest payments on its debts 
and last February attempted to 
sea the hotel chain to a Mexi- 
can investor. 

The company said it would 
use the income from the sale to 
repay the group's outstanding 
loans of about Y52bn ($526.5m), 
which includes funds borrowed 
far the initial purchase of the 
hotel group. The proceeds will 
also be used to cover the Y34bn 
in loan guarantees by Aoki to 
its resort subsidiaries. 

Westin will own the trade- 
mark in North America, South 
America, Europe, Africa and 
the Middle East In Asia, Aoki 
wDl maintain ownership of the 
Westin trademark and enter 
into partnership with Westin 
there. 


Siam Cement increases 
third-quarter profit 34% 


By WHBam Samos 
to Bangkok 

Siam Cement, Thailand's 
biggest manufacturing con- 
glomerate, said that robust 
growth in all its five main 
business areas enabled it to lift 
consolidated net profits far the 
first nine months by 52 per 
cent to Bt391hn ($156.4m). 

Consolidated profits in the 
third quarter surged 84 per 
cent to BtU38bn on sales 18 per 
cent higher. 

Cement and construction 
materials, which account for 
more than half the business. 


were surprisingly strong in the 
rainy season third quarter; 
cement sates alone rose 11.3 
per cent over the year-ago 
figure. 

Several Bangkok analysts 
said they would revise 
upwards their full-year profits 
forecasts for the company in 
the light of the latest 
figures. 

MiSS SirilUlch Th a rm a p omp i- 
liw, at Jar dfn e Fleming Than- 
akom, said she now expected 
foil-year net profits of around 
Bt5-2bn, 10 per cent higher 
than the firm’s earlieT 
forecast 


Coles Myer in property sell-off 


By Taft 

Coles Myer, the large but 
troubled Australian retailer, 
said yesterday It had arranged 
to sell more than A$5QQm 
(US$370 .3m) of retail property. 
The move is part erf a plan to 
rationalise its A$1.5bn property 
portfolio, offset the current 
A$4.1bn capital investment 
programme and prevent it 
becoming “overweight" in 
property . 


Coles is selling its 50 per 
emit interest in the WestMyer 
Trust, which owns shopping 
centres in Adelaide and South- 
land. to the Australian Mutual 
Provident Society, the Ufa 
office. The deal values the two 
properties and development 
costs to date at A$580ihn - or 
Cotes’ share at A$290.4m. 

In addition, a joint venture is 
being established with the 
Industry Superannuation Prop- 
erty Trust, which mil take in 


All 13.8m of properties from 
Coles, mai nly s hopping centre 
interests. ISPT will have a 75 
per cent interest in the ven- 
ture, and Coles, 25 pa- cent 
The disposal of a variety of 
smaller property interests 
makes up the balance of the 
A|500m. 

Cotes’ gearing has risen sig- 
nificantly recently, as result of 
buying back the 21.45 per cent 
of its shares held by Kmart, 
the US retailer. 


Indonesian noodle maker’s profits soar 


Nine-month earnings at 
Indofood Sukses Makmur, 
Indonesia’s largest noodle 
maker, almost trebled com- 
pared with a year ago in spite 
of press reports about food poi- 
soning, denied by the com- 
pany, during the period, Reu- 


ter reports from Jakarta. 

Net profits for the nine 
months advanced to 
Rpl45.61bn ($66.9m.) from 
Rp50.04bn a year ago, on sales 
of Rp07&93hn compared with 
Rp809.05bn. 

Indofood, part of the Salim 


group and 50.1 per cent owned 
by Indocement Tunggal Frak- 
arsa, is said to have told ana- 
lysts that, as a result of the 
food poisoning reports it had 
revised Us full-year profits 
down to between Rp200bn and 
Rp220bn from Rp255J22bn. 





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24 



INTERNATIONAL COMPANIES AND FINANCE 


— --tv 


Mellon Bank takes $130m 
charge over stock lending 


By Richard Waters in Now 
York and Nwma Cohan 

Mellon Bank of the US said it 
would take a $130m after-tax 
charge to cover investment 
losses of customers of its stock 
landing b usiness following the 
tail in band prices this year. 

The move is the latest sign 
that some banks, ambitious to 
develop their global custody 
and stock lending businesses, 
have bought unsuitable securi- 
ties with cash which was 
deposited by their customers 
as collateral. 

In June, Harris Trust, a sub- 
sidiary of Bank of Montreal, 
said it would absorb 951.3m. of 
investment losses for stock 
lending customers, leading to 


an after-tax charge of 933m. 

Mellon said the charge 
anno one ed yesterday sprang 
from its intended purchase of 
interest rate swap contracts to 
change the characteristics of 
investments under its control 
These swaps would be used to 
tie the investments to 
short-term floating rates, the 
bank said. 

Mr Frank Calumet, Mellon’s 
(•h air man and chief executive, 
said that the bank had decided 
that “the interest rate sensitiv- 
ity of certain client portfolios 
is not appropriate under cur- 
rent conditions for the unique 
requirements of the securities 
lending business”. 

Mellon did not provide 
details of its investment strat- 


egy, but its plan to use interest 
rate swaps suggests that it had 
invested the cash in longer- 
term bonds, prices of which 
have Men steadily this year. 

The returns from investing 
collateral have become an 
important source of income in 
the global custody business. 
Custodians, which hold securi- 
ties on behalf of institutional 
investors, lend the securities to 
brokers and others for short 
periods, receiving collateral in 
return. The broker is generally 
paid a return on the collateral 
equivalent to overnight inter- 
est rates. Any additional 
investment return Is usually 
kept by the custodian. 

Global Custody Survey, 

Section HI 


Novo Nordisk adapts its 
strategy in changing market 


By HBary Barnes 
(n Copenhagen 

The shine has been knocked 
off Novo Nordisk's shares this 
year. The Danish pharmaceuti- 
cals and industrial enzymes 
producer has been bit by a 
rapid rise in costs, contributing 
to a 7 per cent slip in nine- 
month profits to DKr934m 
($153m) from DKrlbn; prob- 
lems meeting demand for insu- 
lin in the US; and the resigna- 
tion of an important member 
of the management board fol- 
lowing a reorganisation of 
responsibilities. 

The share price fell by DKrl5 
when the interim results were 
announced earlier this month. 
They have picked up since, but 
at DKr€54 yesterday the price 
is a long way from the 
12-month high of DKr748. 

Mr Mads Ovlisen, chief exec- 
utive, said: “We are trying to 
adapt our strategy, our organi- 
sation, to the huge changes 
taking place in the market 
place. We are also adapting 
to increased regulatory pres- 
sures* 

The shortfall in insulin sup- 
ply to the US. where it com- 
petes with Eli Lily, the world's 
other leading supplier, was 
caused by a production stop- 


page in Denmark. This was 
compounded by a delay in 
bringing a new production 
plant on stream in the US. The 
delay, Mr Ovlisen said, was 
caused by the need to ensure 
the plant met the US Food and 
Drug Administration’s strin- 
gent regulatory guidelines, “a 
tremendous task”. 

The supply problem is now 
over, and he hopes the US 
plant will go into production 
early next year. 

The market situation in the 
US is changing because the 
large pharmaceutical produc- 
ers are buying up healthcare 
provider groups in order to 
gain a captive patient base. 

“Buying decisions are made 
by the healthcare provider 
organisations. The medical 
doctor is no longer king,” said 
Mr Ovlisen. 

The key to survival for a rel- 
atively small company such as 
Novo Nordisk, with turnover 
last year of about DKrl2.16bn, 
is to be able to innovate and to 
supply value-added products 
which the healthcare providers 
will continue to need, he said. 
With this in mind board of 
management responsibilities 
were changed last spring, to 
make decision-making faster. 
However, Mr Erik Sorensen, a 


long-standing board member, 
found the changes did not suit 
him and he resigned this 
autumn. 

The company also wants to 
co n ce n trate on new products, 
partly by releasing resources 
from other areas. This was 
reflected by its recent decision 
to sell its bulk penicillin pro- 
duction unit 

The obverse of this disposal 
is the DKr6bn-plus which has 
been invested in new plant 
over three years, with five new 
international plants in 
enzymes and pharmaceutical 
production due to start up in 

craning m onths This, said Mr 
Kurt Anker Nielsen, finan ce 
director, was one of the main 
reason why costs, up 16 per 
cent against a gains increase of 
12 per cent at nine months, 
had soared. 

Staff for the plants have 
been recruited, although the 
plants are not yet contributing 
to sales. Depreciation costs 
have also risen. 

The group has a stated aim 
of increasing profits by 15 per 
cent a year, he said. Viewed 
over the 1991-94 period, the 
average increase will be about 
13-14 per emit in spite of this 
year's slip, “so we are not that 
far off”. 


Sheinberg 
steps down 
at Goldman 
Sachs 


By Nonna Cohen, 

Investments Correspondent 

Mr Eric Sheinberg, the 
Goldman Sachs partner from 
whom Mr Robert Maxwell’s 
I former employees are seeking 
I restitution of some of their 
pension assets, has resigned. 

From the beginning of the 
1995 fiscal year, Mr Sheinberg, 
Goldman Sachs' longest- 
i tenured general partner, will 
become a limited partner, the 
status accorded those who are 
no longer pursuing fall duties. 

He will continue to work as 
a proprietary trader - buying 
and selling shares for the 
firm's own account A spokes- 
man for the firm said Mr 
Sheinberg had asked to 
become a limited partner to 
give himself more time to pur- 
sue his personal interests. 

Goldman Sachs partners 
may not withdraw their capi- 
tal from the firm in full upon 
retirement, but withdraw it 
over a period of years instead, 
usually in the form of interest 
on the sum they have built up. 
Mr Sheinberg became a gen- 
eral partner iu 1971 after 10 
years with the firm. 

An internal memo credits 
Mr Sheinberg with having pio- 
neered the concept of “24-hour 
trading” in international secu- 
rities markets and for introdu- 
cing US-style block share trad- 
ing to the European markets. 

In April, lawyers for the 
Mirror Group Newspapers 
Pension Scheme Trustees and 
the Maxwell Communications 
Corporation Works Pension 
Scheme filed lawsuits in New 
York each seeking S57m from 
Goldman Sachs and Mr Shein- 
berg personally in connection 
with the alleged diversion of 
scheme assets. The lawsuits, 
which are continuing, also 
seek unspecified damages. 

The writs centre on the pur- 
chase of £55m (290.20m) of 
MCC shares from the pension 
schemes by two Swiss trusts . 
Serves and Yakosa. which 
were transacted through Gold- 
man Sachs and for which the 
schemes were never paid. 

Both Goldman Sachs and Mr 
Sheinberg have said they will 
vigorously contest the 
charges. 




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Moore transforms its apj 

New chief executive is spearheading shake-up, writes 






. I?-' 


T he occupants of Moore 
Corporation's executive 
suite atop one of Toron- 
1 to's tallest office towers would 
have felt quite oat of place lit- 
tle more than a year ago. 

The ll&-year old company 
was coasting on its long record 
as the world's biggest supplier 
of paper forms used by almost 
every business. 

A balance sheet with virtu- 
ally no debt and a steady flow 
of revenues from products as 
varied as credit-card slips, 
cash-register receipts and train 
tickets had lulled Moore into a 
complacency not uncommon 
among well-entrenched market 
leaders. 

This month it reported nine- 
month net profits of OSgffl.2m, 
or 83 cents a share, up from 
$60. 6m, or 61 cents. 

In spite of being one of Cana- 
da's biggest companies, with 
22.000 employees and annual 
revenues of $2J3bn, Moore saw 
no need for a public relations 
department Staff turnover was 
exceptionally low. The chief 
executive had been with the 
company for 34 years and the 
chief financ ial officer for 43. 

However, the leisurely atmo- 
sphere has evaporated since 
Mr Reto Braun took over as 
chief executive in September 
1993. 

“This year, more things are 
happ ening than in the past 20,” 
says Swiss-born Mr Braun, 
who spearheaded a top-to-toe 
shake-up at Unisys, the US 
computer and defence electron- 
ics company. 

He has hired a new chief 
financial officer from Northern 
Telecom, the Canadian tele- 
phone equipment maker. The 
new head of the business 
systems division is a former 
McKinsey & Co consultant who 
also worked for Mitel, another 
Canadian phone equipment 
supplier. 

Recruits from the computer 
and tplura mmuniratinns indus- 
try give a clue to an even big- 
ger change. While paper will 
continue to play a role in buri- 


Moore Corporation 


Share price (p$) 
32- — it: — 






Ignore 

A -coming from aflialtrafi 
p s $cg^tiQnf bw 
hdriamt 7 ' V >: -v 



SowcKFrQaphtta ' 

ness records -and transactions 
for the foreseeable future, 
many traditional business 
forms now comprise words mid 
lines on a computer screen. 

The speed and accessfoEttty 
of electronic data allow compa- 
nies to use the information on 
these forms for an increasing 
number of purposes. Labels, 
another Moore staple, are 

being transfonned by bar-codes 
into part of elaborate data 

managpnnmt systems. 

Companies are demand- 
ing a wider range of services 
from suppliers. "The customer 
doesn’t just want a product 
any more,” Mr Braun says. “He 
wants a solution to his 
problem." 


... A V-lSrP'gw 

. A 11 - •• -a: ivV-K *."• 


tt will concentrate on three 
businesses: forms and forffl- 


■' per r 3gnt stake tjx 'Seffiohn ; 
*<Xrvm^ B3i Gtiasrajased 
specialist in rifidtreqic forias 


;■ - Earlier this month, Moot* 
formed an alliance Witb Date^ . 
rna-x _of Orlando, Florida, to 
develop s! thermal hatf-opoe 


M r Braun’s credo is 
that if a chief execu- 
tive needs to inflict 
pain, it should be done quickly, 
but fairly. In the 14 months 
since he took over, Moore has 
chopped about 2,000 jobs and 
closed six plaids. A $229m 
restru ctur i n g charge, taken at 
the end of 1993, drained away 
14 per cent of the company’s 
equity. 

The long-term aim is to 
transform Moore from a sup- 
plier of business forms fotn a 
provider of a much wider 
range of infonnafion-hazidllng 

products and services. 


systems, including bar-codes; 
and customer communications, 
such sb direct mafi. 

fit each case, Mr Braun is • 
targeting only a haaddfbl of sec- 
tors. For . instance, -the cus- 
tomer fflynmiTniwtiiinB . divi- 
sion wfil aim primarily . at 
publishers and retailers. The 
labels business wifi be.dfrected 
mainly at iwmufitcta rer s , the 
transport sector and retailers. 

"We have to sell earlier and 
higher fit the sales cycle,” Mr 
Braun says. Instead of dealing 
with purchasing managers, he 
wants the company to do more 
of its with finan- 

cial officers -and marketing 
executives. - "/'• 

For example, Moore jias 
helped SNCF, the Frem&Tafr- 
way group, design a new reser- 
vations system withafiiapaet: 
ic-strip ticket, fit add-on to. 
being a tra vel voucher, earn : 
ticket provides real-time 
matinn rat a passenger’s move-. , 
meats. SNCF uses tins datato, 
adjust routes, trains, seeds and 
fires, Onlhe costomercfinmit 1 / 
mcatioos ride, Moore has- wafr 
a contract from a US hotel 
chain to produce a odour bro- 
chure, wfth a com mo n ‘ thane' ! 
but a di fli gn a i t. v w pdMi for each 
hold. .;C. 


;■ - Another sign of the -“new^ 
Moore is a gfim two-way dad: 
with EDS, thp US conp utcgfr 
Services and management cou- 
sultancy. EDS is. designing, 
and wDl later ep&ate^Jtooiefe 
internal date-processing sys- 
tem. For tts part; M»re 7 wfll 
manage EDS’s own printing 
and other information han- 
dling r eq u ir ements. 

T he risk, however, is that 
same products 'and ser-. 
vkes may be- ahead of 
their a™*. Qua Moore execu- 
tive says that “a lot off custom- 
ers know tbey_want it, but. 
they're not certain how they’re 
going to useitA But people no 
longer hang sadi epithets as 
"stodgy" or "“venerable” on 
Moore these days. ■ 

The transformation is set to 
advance further^ Moore plans 
to raise WDtar to - $500m . in 
debt, fitting 3» deWstoequity 
ratio from an; ultra-conserva- 
tive 6 per baft to about 25 per 
peat ... 

It is p reparing a pt&Hc offer- - 
ing of shares' ih Ihppah Moore, 
the teg Japanese': forms com-, 
.panywbich Moore owns jointly 
with Toppan Printing. , 

._ - Mr Braun 1 tobk ritothra step 
tirisnmntiiyrij^TOfuldhave 
been unthinkable under the . 
dd guard, fie hired Moore's 
.first; vicopresidHit af c dmmn - 
mratloBs to' help get the mes- 
sage acrbss&ata leopard can 


change its spots. 


. ‘‘ . _ . . . ■ % 1 ... 

US investors use foreign voting rights 


By Nonna Cohen 

US institutional shareholders 
are increasingly exercising 
their voting rights at non-TJS 
companies in which they have 
a stake, according to a new 
survey. 

Washington-based Investor 
Responsibility Research Center 
(IRRC). an organisation which 
monitors shareholder activity, 
said US institutional investors 
now vote at 71 per cent of all 
foreign companies in which 
they own a stake, compared 
with just 24 per cent in 1991. 

The survey was conducted 
among the 40 or 50 institu- 
tional investors who have 


more than $250bn under man- 
agement. 

Ms Cortona Arnold, d eputy 
director in charge of Global 
Shareholder Services at IRRC, 
said she believed the client 
base was fairiy representative 
of US institutional investors, 
although IRRC clients are 
likely to he more concerned 
with corporate governance 
matters than other share- 
holders. 

During the summer, the US 
Department of Labor con- 
firmed that US Erisa funds - 
corporate pension schemes 
covered by US pensions legis- 
lation - have the same fidu- 
ciary duty to vote an matters 


at non-domestic companies, 
unless the costs of voting are 
prohibitive, as at US compa- 
nies in which they have 
invested. ! 'A 

US public sector pension 
schemes, among the largest 
such schemes, are not covered • 
by the Erisa legislation, hut 
have taken their voting respon- 
sibilities seriously. 

Ms Maryellen Andersen, 
director of investor and corpo- ; 
rate relations at the State of 
Connecticut Retirement and 
Trust Funds, said that in 1993, 
the scheme voted at L395 of 
the 2^00 foreign companies in 
which it holds a stake, 

Ms Andersen said . the 


schema has been able to vote 
in most markets because of the 
willingness of .its custodian 
banks to help with the paper- 
.Voik. . 

'/'•'“We found the most effective 
-way to ensure voting was! to 
put pressure an the custodian,” 

Rhp said, 

Ms Andersen said US pen- 
sion schemes hold a relatively 
small stake in foreign markets, 
but they aremaking an impact 
<m local boards of directors. 

"They want our money. We 
have made it clear that we are - 
interested in investing but we 
are also interested in voting: 
We don't really want to do one 
without the other,” she said. 


Santiago seeks regional finance role 

Chile has its advantages but obstacles remain, writes Stephen Fuller 

C hile boasts Latin America’s most exchange rate to uncompetitive levels. bility, economic stability, a broad ccnsen- 

advanced capital market. The Mr Aninat said, however, that “the capi- sub overpolicy - and we have a reputation 
country’s high savings rate, the tal gains tax is more comnlex”. although for inteeritv” 


C hile boasts Latin America’s most 
advanced capital market. The 
country’s high savings rate, the 
development of its private pension funds 
and more than a decade of uninterrupted 
economic growth have combined to bring 
this about Nowhere else in Latin America 
can companies raise 10- or even 20-year 
finance. 

The country's leading financial institu- 
tions and its two stock exchanges want to 
use this head start over their neighbours 
to develop a financial centre servicing the 
rest of South America. To promote the 
idea, they formed a capital markets insti- 
tute six months ago. 

“We have been advocating the idea of 
transforming Santiago into a finanHai cen- 
tre,” said Mr Hern an Somerville, the head 
of Chile’s banking association. 

Bat for the likes of Mr Somerville, the 
government has been moving too slowly 
on the issue and at least two important 
obstacles are blocking the idea. 

The first is the rule which demands that 
foreign investments remain in the country 
for at least a year, inhibiting financial 
market trading. The second is the coun- 
try’s capital gains tax. 

Government officials say lifting the one- 
year rule would not be difficult. The 
finance minister, Mr Eduardo Aninat, said 
this month in London that “at an oppor- 
tune moment, we could consider amending 
it by law . . . but that doesn't mean in the 
short term”. For now. the government is 
concerned not to encourage inflows of vol- 
atile hot money which make managing 
money supply difficult and raise the 


exchange rate to uncompetitive levels. 

Mr Aninat raid, however, that “the capi- 
tal gains tax is more complex”, although 
the issue was under study. The govern- 
ment is worried that relaxing the tax 
might lead to a redefinition of a tot of 
income as capital gains in order to evade 
tax. 

Mr Somerville says banks are bring hin- 
dered from developing a regional role 
because they cannot lend money outride 
the country, except for trade. “We should 
also be able to lend money outside Chile to 
Chilean companies,” many of which are 
expanding into other countries in the 
region, be says. 

From the government’s point of view, 
developing the financial services sector 
would - like increasing manufacturing 
capacity - be one way of developing an 
economy which, in spite of its success, is 
still over-dependent on production of raw 
materials. 

Still, while some financial experts 
believe Santiago has advantages in certain 
areas, for example in custodial services, 
there is widespread scepticism that turn- 
ing the city into financial centre is a seri- 
ous project 

Chile may have the expertise, and a - 
deregulated telephone system that allows 
for relatively cheap communication, but it 
is geographically remote and the economy 
smalL Sceptics wonder whether there is a~ 
critical mass of local business to encour- 
age tiie establishment of a regional finan- 
cial centre. 

Bfr Somerville argues: “Look at Luxem- 
bourg". adding that “we offer political star 


bility, ec onomic stability, a broad consen- 
sus over policy - and we have a reputation 
for integrity:" 

Mr Pablo Yrarrazavll , ch ai rm a n of the 
Santiago Stock Exchange, points out that 
for an “emerging market” the country 
already has a highly-developed financial 
system. , ' . . 

With a gross domestic product of about 
¥46bn, Chile’s stock market capitalisation 
is $60bn, banking assets total $35bn. the 
assets of pension funds are approaching 
$20bn and insurance company affyyfo $5bn. 


N onetheless, .Mr Yrarraxavil 
acknowledges that he has a prob- 
lem - currently most Chilean 
companies prefer to raise share capital in 
New York and not on his exchange. Chil- 
ean financial business Is migrating to the 
US, where investors are willing to pay 
more than in the Chilean market, partly 
because of the one-year role. 

But Chilean financiers are not only wor- 
ried. about New York. They are also, con- 
craned not so much about the develop- 
ment of finance in Sao Paulo if the 
Bra zi lian amtirinflation plan succeeds, but 
mat Argentina is malting teg advances in 
fin an c ial sophistication. 

Promoting Santiago as a fltianrfai 
has, for some of its. proponents, a defeat 
sivemotive and a desire to avoid a dridn- 
Chilean talent and Chilean financial 
companies to Argentina. 

“Chileans love Buenos Aires. Many, 
would like to live there, and if it developed 
as a financial centre, they would move,” 
said one financier. ' r 


Yrarrazavll 


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26 


FINANCIAL TIMES 


TUESDAY NOVEMBER ;» Jg* 


INTERNATIONAL CAPITAL MARKETS 


Strong Thanksgiving retail sales hit Treasuries 


By Lba Bransten In N«w York 
and Conner MkfcMmann and 
Martin Brice in London 

US Treasury prices fell 
yesterday morning amid 
reports of strong retail sales 
over the Thanksgiving week- 
rad - traditionally one of the 
best of the year for retailers - 
and the early morning release 
of figures showing growth in 
home sales for October. 

By midday, the benchmark 
30-year government bond was 
down & at 9414, yielding 7.979 
per cant At the short end of 
the market, the two-year note 
was down a at 99%, yielding 
7.301 per cent 

Early in the morning, the 
yield on the long bond briefly 
hit 8 per cent before the price 
increased si ght ly, p ushing the 
yield back below that by mid- 
day. 

Reports of a busy weekend 
Grom shopping mads across the 


country reignited traders’ fears 
that recent interest rate 
increases by the Federal 
Reserve mig ht not be enough 
to cool the economy. If so, the 
Fed might have to raise inter- 
est rates again in the near 
term, thus undermining bond 
prices. 

GOVERNMENT 
BONDS 

Adding to such concents 
were figures from the National 
Association of Realtors show- 
ing sales of existing single- 
family homes increased by 0.5 
per cent from September to 
October. 

Although the head of the 
real estate association called 
the increase “a vote of confi- 
dence in the economy", he 
added that he expected rising 
interest rates to dampen home 
sales in the near future. 


Bonds posted declines across 
the maturity spectrum in the 
wake of gains in most stock 
inriirPfi For most of this year, 
the stock market has taken its 
cues from increases and 
decreases in the bond market, 
but last week's plunge in share 
prices created optimism among 
bond market players that 
investors would move assets 
from stocks to bonds. Yester- 
day’s rising stock prices, how- 
ever. slowed the development 
of any such trend. 

■ UK gilts put in another 
strong performance, buoyed by 
hopes for a market-friendly 
Budget containing significant 
cuts in government spending 
and public-sector borrowing, 
apd ebbing political worries. 

Gilt market participants 
expect chancellor Mr Kenneth 
Clarke's Budget speech today 
to wmW" good news on all 
fronts. 


The market has got geared 
up for a good Budget, includ- 
ing a cut in spending, a reduc- 
tion in the [public sector bor- 
rowing requirement!, a cut in 
the inflation forecast and an 
upward revision of the GDP 
forecast," said Mr Nigel Rich- 
ardson, head of bond research 
at Yamaichi International 

Dealers reported last-minute 
buying by institutional inves- 
tors keen to catch any post- 
Budget rally. However some 
warned that good news may 
already be discounted and a 
package in tine with expecta- 
tions could prompt only a 
muted reaction or even some 
profit-taking. 

“Clarke will have to deliver 
something pretty spectacular 
in order for the market to go 
higher," said a gilt dealer at a 
large London house, pointing 
to supply as a factor that could 
cap gilts' upside. 

The Bank of England yester- 


day announced sales of £80Qm 
in tranches of existing gilts; 
moreover, on Wednesday it is 
due to announce the terms of 
next week's auction. 

The December long gilt 
future on Liffe rose by about % 
tol03g. 

■ German bonds fell in thin 
volume. The December bund 
futures contract on Liffe ended 
at 9L31, down 0.17 on the day. 
One analyst said the next data 
that might move the market 
would be the US non-farm pay- 
roll figures due at the rad of 
this week. 

■ The market in Italian gov- 
ernment bonds outperformed 
other European markets yes- 
terday as the yield on the 10- 
year benchmark bond fell 13 
basis points to 1L33 per cent 

Analysts said the rise in the 
price of bonds was doe to lads 
of negative political influence, 


and Mr ftrmnn Maggg at ZBJ 
said ft suggested that investors 
now felt the budget was likely 
to be passed. 

■ The yield m the 10-year Nor- 
wegian benchmark band rose 
from 8.4 to 8.416 per cad, Mr 
Graham McDevttt at Paribas 
Capital Markets said Investors 
were now focusing <m the ref- 

py rnthrm ft n WHnlwritlji rfBw 

European Union. 

He said: “A ‘yes’ would come 
as a Mg surprise as .the .“no* 
camp has consistently been in 
front." He added that if there 
were a majority in favour of 
EU membership,, the currency 
would probably rise and bond 
yields 

However, opposition parties 
had said they would try to 
block membership if there 
were no decis ive result, so a 
small majority in favour would 
probably lead to a parliamen- 
tary str u ggl e , he said. 


Solid European demand for 
Exim Bank of Japan issue 


By Graham Bowley 

Exim Bank of Japan yesterday 
launched a $300m offering of 
10-year bonds priced to yield 30 
basis points over US Trea- 
suries. 

Lead manager Bank of 
Tokyo said that more than 70 
per cent of demand came from 
European investors - UK 
investment funds and banks, 
Swiss pension funds, German 
and French insurance compa- 
nies, and Swiss and Belgium 
retail investors. 

The remaining bonds were 
sold to central banks and pri- 
vate H anks in Asia and the 
Middle East, it said. 

In the floating-rate sector, St 
George Bank, a New South 
Wales-based regional bank, 
launched a S250m issue of five- 


year notes, offering 30 basis 
points over three-month Libor. 

The launch coincided with 
the announcement of a 54 per 
cent increase in the bank's 
after-tax profits to A$1 02.6m 
for the year to end-September 
and a Call in the charge for bad 
and doubtful debts to A$&2m 
from Ag4&3m. 

INTERNATIONAL 

BONDS 

UBS, which led the offering, 
said the brads were sold to UK 
banks, UK investment funds 
and other European institu- 
tional investors. 

St George Bank is the latest 
in a sales of Australian banks, 
such as Bank of South Austra- 
lia and Challenge Rank, to tap 


the euromarkets in recent 
weeks and to favour the fioat- 
ing-rate dollar sector. 

There is strong demand for 
floating-rate dollar notes, deal- 
ers said, and this offering rep- 
resented the tightest pricing 
yet of the recent issues. 

Ford Credit Europe launched 
a $2Q0m issue of three-year 
fixed-rate bonds priced, priced 
to yield 40 basis points over US 
Treasuries. 

Lead manager ABN Amro 
said the offering met firm 
d emand from Swiss and Bene- 
lux retail investors, who were 
attracted by the 8 per cent cou- 
pon and the pricing spread. 
Institutional investors were 
also attracted by the relatively 
high yield offered by the short- 
dated band, ABN Amro said. 

“The dollar yield curve has 


NEW INTERNATIONAL BOND ISSUES 


Amount 

Cotton 

Price 

Maturity 

Faaa 

oproma doqk Rmr 

Born war 

US DOLLARS 

m. 

% 



% 

bp 

Exm Bank ot Japan 

300 

825 

99.46R 

D 0&2004 

(L32SR 

4dO(7MM)fl Bank of Tokyo CapLMda. 

St George Bank* 

250 

la] 

99.7SR 

Ja*i2000 

020R 

UBS 

Ford Credit Europe 

200 

600 

99460 

Dec. 1397 

022 SR 

+40(7**r97) ABN Amro Bar* 

Banco fater-Adandco 

50 

1125# 

99 063R 

Dec.1997 

I.OOR 

+410f7W%-97)HS8C Madota 

YH9 

CommarzlMnfcCb)* 

20bn 

345 

loaosR 

Mar. 1997 

0.1 5R 

DKB iMematoad 

Korea Development Bank 

lObn 

3-85 

0949 

Jan.1998 

undscl 

Yamakii feat 44 ^ 

ITALIAN URE 

Oepfa Bardic) 

150tn 

1040 

101.05 

Jan. 1997 

1.12S 

- Banc* a Data 

AUSTRALIAN DOLLARS 







Now Stlt. Wales Traaaurv Carp.* IOO 

4^0* 

B613S 

Oac.1837 

1475 

Noraus bnemoaoDta 

Dresdner Austrafie 

75 

10.00 

101455 

Jan.1998 

140 

Draedner Bank 

PEffiTAS 

FdTH UO 1, Class A(d1)t 

ia025bn 

tffi) 

99.9675 

SepL2017 

now 

Baooo Santapdad Lehman 

Final tonne and norv-coBeble unless stated. The yield spread (over relevant tfOnemment bond) N feonch ta auppfcerl by the lead 
manager. *untaaed. SHbmMbb rate note. aSemi-annial coupon. R- had re-tritar price: faaa rev iftoen at fire w dBm laweL fl SanVi 

Libor +30bp. bj Shod let coupon, cl Long 1st coupon, di) Fondo da TituOzscion Hpotacaria. Average Mr 4 vie. cJZ) 3-can Ubor 

*27hp. 03) Class B. 0.4?5bn 3-mBi Lfaor 

* 1 lObp, avAta 63 yrs. Lehman sole lead 



flattened recently and inves- 
tors can now get a yield at the 
short-end close to that on lon- 
ger-dated maturities,’' an offi- 
cial said. Ford Credit Europe 
came to the three-year dollar 
sector in September with an 
issue offering a coupon of 6% 
per cent 


However, traders said the 
bonds were priced around 
three to five basis points 
tighter than similar outstand- 
ing three-year paper and they 
struggled as a consequence. 

Market sources said that the 
proceeds were swapped into 
floating-rate sterling. 


The European Investment 

Rant is expected to a 

two-tranche mffwing of doDar- 
(iwiiinii i iah»ii bonds w ithin thp 
next few days, dealers said. 
The issue is said to be of a 
gSOOm tranche of five-year 
hrmrig and a $30Qm tranche of 
lb-year brads. 


Reset 




By Rfaharil Upper ' 

NMBottBdnld&Sras,theUk; 

hank, fe tO <uj£DgB 

an innovative five-year Joan 
farftify fte- John Lewis, the UK 
retailing group. ■- • 

The structure - known as a 
- fleriMe partici pation 
- replaces an existing 
loan signed in 1990 and pbo 
both leaders and the borrower 
g pp q fw flgnHlity than' a stan- - 
dard revolving credit 
It allows the borrower to 
lock into markeHaicsd finance 
at various times during the life 
of the loan through a socSlled 
'‘reset mechanism* - a kind rtf 
gnrfftm which fe managed by 
Rothschild, In its roile as agent. 

The loan is split into a core 
facility of £35zn - priced at 25 
points over Libra with, a 
commUiDflttt fee of 10. basis' 
points — and two tranches of 
£45m. The trains of one of 
rtww tranches can be reset in 
mid-1996 and mkW998; those of 
the other in mid-1997. ... 

Banks are being- asked to - 
participate with individual 


; cOTunttmente of be£ween£l&n 
and £ 20 bl. ‘ 

Commitments, for the cere 


wiH be secured when. finer dtid 
is si&ud in timntet few w^s 
but banks can Md to ferifes&e 
thfifr shares c€-the two' sfSiff 
tranches, _with thiB a mount ^ 

prepared 

more competitively, to incro&e 
' their stakes in lte dea&.'fhe 
borrower 7 dan obtain ‘-a sedra- 
tion in its cost & funds, ft 
could, also increase the.sfzs vS 
the ferifity if bids received 

for a greater - aggregate 
amount ■■ 

At the sametJm^hbwever, 7 
the banks are obliged to pro- 
rate Jmance at the iTWXftimm 
rate: of 25 baste. points over 
Libor. - • 

Hr Paul TucfcweO, director, 
of NM Rothschild, said: *!Tha 
facility provides borrowers 
wttiicratainty andflrarihiltty of. 
funding and pricing at. a., 
capped cost and banks with the 
opportunity to actively manage 
their balance sheets.” 


London SE expects more 
emerging market GDRs 


By Richard Lapper 

The Stock Exchange 

expects more companies from 
the emerging markets to -list 
global depositary receipts in 
London - despite a recent lull 
in activity. 

Five companies - four from 
India and one fr om Argentina 
- have fisted GDRs on the Lon- 
don exchange since the rules 
were modified in AugusL The 
most rwiwit Hating — of India's 
B ajaj Auto - was in early 
November. 

Mr Robert Murtfin, he ad of 
capital markets at the 
exchange, said a number of 


other issues were "in progress 
and would become public in 
file near futur e.” 

- Potential new issues could 
come .from the Pacific. -Rim 
countries, Africa, especially 
South Africa, Latin America, 
Russia, China -and the Indian 
ji| nff^wrrt_ . . . a z '" m . * ' * 

The GDR llketheAmeri- 
can Deposits# Receipt, a 
proxy fra a comp my^ underty- 
ing share allows companies 
to avoid potential problems 
linked to settlement foreign 
exchange and restrictions on 
foreign, ownership. . " . 

It is also cheaper to register 
thai> n Ml fisting of shares. / _ 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 

Rad Day’s 

Coupon Data Price change 

Yield 

Week 

090 

Moreh 

■SP 

Aus&aBa 

9.000 

0S/D4 

914400 

■*0.400 

1024 

1669 

10.48 

Belgium 

7.750 

10104 

960800 

^0210 

822 

640 

8.48 

Canada* 

6£O0 

0&/D4 

83.6000 

-0200 

9.12 

615 

606 

Danmark 

7.000 

12/D4 

865500 

46160 

840 

682 

846 

Franca BTAN 

8.000 

0508 

1024600 

-*0060 

721 

7A7 

745 

OAT 

8.750 

10/04 

82.1200 

+0150 

723 

619 

627 

Germany Bund 

7400 

11/04 

1014100 

46200 

728 

746 

748 

Italy 

6500 

00/04 

819400 

46220 1146T 

1148 

1148 

Japan No IIS 

4400 

06/99 

1034050 

-0210 

345 

428 

4.12 

Japan No 164 

4.100 

12/03 

962490 

-6480 

4.69 

4.74 

4.74 

Netheriande 

7250 

10/04 

984200 

-0030 

7A2 

741 

748 

Spain 

60 00 

as/04 

422600 

-a 130 

11.10 

1122 

11.14 

UK GSM 

6000 

08/99 

91-10 

- 

628 

636 

848 


6750 

116)4 

89-01 

-*4/32 

640 

844 

667 


9.000 

IttOB 

104-31 

*7/32 


654 

684 

US Treasury * 

7475 

11/04 

- 

-5/32 

745 

8.02 

741 


7J500 

11/24 

- 

-1/32 

748 

614' 

747 

ECU (French Govt) 

6OQ0 

04A14 

861600 

-*6210 

633 

680 

687 


Italy 

■ NOTIONAL ITALIAN GOVT. BOND (BTP) FUTURES 
(UFFEJ* Ura 200m lOOtfta of 100% 



Open 

Sea price 

Change 

Hgh 

Low 

ESL vot 

Open InL 

Dec 

10a 70 

10148 

-*692 

10140 

10682 

41067 

42808 

Mar 

9695 

10047 

•*092 

10040 

9945 

3966 

18113 

Jun 


9667 

*692 



0 

0 


■ ITALIAN GOVT. BOND (BTP) FUTURES OPTIONS (UFFE) Ura200m 100ms at 100% 


Strifes 


CALLS 


PUTS 


Price 

Mar 

4ai 

Ma 

Jun 

10060 

2.14 

140 

147 

143 

10100 

1.92 

681 

225 

2.14 

10160 

140 

045 

2M3 

2.46 


London dontno. 1ta» York odd-day 
t t>o»» Jhdkritog rMhcUHg tax j 
i US, UK ki a&riu. oOwr* In 


YMdK UxW nfetst ttmxSmO. 


Sobck MW Manrifantf 


Eri. voL total Crib MS Pm> SOS. Prwtous day** open ml, Coti 9026 Puts 7735 


Spain 

■ NOTIONAL 3PAMSH BOND FUTURES (MEFF) 


US INTEREST RATES 


UncMkoe 

Prtotord*. 


Trewiy Bta and Bood YMUs 


& 

a 

One madi 

461 

522* 

728 

- 742 

One year 

5j48 

60S 

665 

Ffea 

Shear 

7.73 

765 

749 


FaUari* ri Mntds- 

BOND FUTURES AND OPTIONS 
Prance 

■ MOTIOMAL FRBICH BOND FUTUBE3 (MAUF) 


Dec 


UK 


Opsn Settprics Change Htfi Low EsL voL Open fed. 

87.78 87.79 -606 87.97 87.88 29,113 78,107 

87.00 87.06 -0X6 87.00 86*6 1,180 7.2S3 


m NOTIONAL UK Gfl.T FUTURES (LTFFEj- £50,000 32nds of 100% 



Open 

Settprics 

Change 

High 

Lot* 

Eat vd 

Open int 

Dec 

103-02 

103*18 

-*0-11 

103-2C 

103-00 

57122 

88671 

Mar 

Jui 

102-12 

102-27 

101-27 

+0-12 

+0-12 

102-30 

102-11 

30173 

0 

37728 

0 


C LQNQ OAT FUTURES OPTIONS QJFFS) £SO JO0 64tha at 100% 



Open 

Srttprloe 

Change 

High 

Law 

EsL woL 

Open Int 

Strike 


■ CALLS 


- PUIS — 

Deo 

11240 

112.74 

+622 

11340 

11246 

143434 

112457 

Price 

Mar 

Jun 

Mar 

Jin 

Mar 

111.70 

11144 

+624 

11220 

11148 

11471 

99407 

102 

2-15 

2-47 

1-26 

2-57 

Jun 

11040 

11144 

+624 

11128 

11040 

174 

g^an 

103 

1-43 

2-18 

1-53 

3-28 









104 

1-13 

1-57 

2-23 

4-03 


ESL «t total. Crib 1760 PH* 6MB. FYwvku dqrt opw» tot. CM* 10162 Pun 11161 


B LONG TBTM FHBtCH BOND OPTIONS (MATTF) 


SMka 

Price 

Jan 

— CALLS 
Mar 

Jun 

Jan 

PUIS 

Mer 

110 

- 

244 

. 

624 

0.70 

111 

- 

144 

248 

648 

143 

112 

042 

128 

- 

047 

141 

118 

0/40 

049 

- 

1.43 

144 

114 

615 

048 

- 

- 

247 

B*L wl tatri. Cafe 13604 

Fife 30,1GB . 

Awtou* day’s cp*n tot. 

cafe 1194 s 1 


Jun 


ZOO 


a ECU BOW FUTURES (MATTQ 


Oermany 

■ NOTIONAL GERMAN BUND FUTURES QJPFW DM2SO^OO IQOlhS of 100% 


Dse 


US 


Open Settprics Change 
8Z10 8222 +0.12 


8Z38 


Low 
82 *8 


Eat. voL Open Int 
3.664 8440 



Open 

Settprics 

Change 

high 

LOW 

Dec 

81.41 

9148 

-622 

9145 

9140 

Mar 

9048 

9055 

-0.17 

9090 

9650 

Jun 

9048 

8940 

-0.17 

9008 

9048 


Eat vof Open ht 
123983 137146 

20247 73613 

68 2 


Open 

Latest 

Change 

Mtfi 

Low 

Eat vot 

Open bit 

99-00 

98-08 

-0-23 

98-00 

88-08 

101401 

323.067 

98-11 

97-12 

-0-23 

97-21 

97-21 

14487 

105435 

97-16 

87-06 

-0-13 

97-18 

97-06 

2400 

12465 


a BUM? FUTURES OPTIONS HFFQ PM2S0J0P points of 100% 


Strife 

Price 

Jen 

Feb 

CALLS — 
Mar 

Jw 

Jan 

Feb 

PUTS 

Mar 

Jun 

9080 

046 

049 

1 . 1 a 

128 

040 

044 

1.18 

146 

9100 

0.43 

(L7S 

044 

1.06 

088 

140 

149 

246 

9160 

048 

055 

073 

087 

141 

140 

148 

247 


■ US TREASURY BOND FUTURES (C8T) 5100,000 32nds of 100% 


Dec 

Mer 

Jun 


Japan 

a NOTIONAL LONG TBW JAPANESE QOVT. 
(LffTq YIQOm IQOtha of 100% 


BOND FUTURES 


Eat vot tatt CM* 75B0 PUB 10522. Pmtas d*/* opai m, CM* 128181 PuB 81207 


Open Close Chengs fafli Low EsL vol Open ht 
Dec 10&S0 10Z67 10050 614 0 

Mar 107^3 107.38 107^2 2181 0 

* UFFE cor* acta tredsd on APT. A> Opn kawnt Ogt srs for pwiicm dsy. 


I UK GILTS PRICES 1 

-Itaf- _1«W_ 

Itofai ht M MceE +er- Mgh law 

-ned_ _f9M_ 

ttata* u fed MeaC+or- to) Law 

— 1994 _ 

few (I) (QMreE +or- Htp low 


StaB" |M*Bh Bnr 1*an) 


TmelSpcIS 
Mi3pc8HlflB6-95. 
10Vpc1996. 


Ti»12kpc1BS6tt. 
Mpcur 
isStfei 


1138 
304 
11100 
1205 
1209 

rme#. 1375 

BcftlSUpcIQQBtt 12JH 

COOBOtoa 10pc 1996 UO 

TBMCw7pc199W— 7.11 

Tibbs iai«6l997B — 113 9 

EufilOfecUSr SUB 

ftwUijKlttftt &SB 

ecfl1Spc1997 1Z1B 

■VpciSH 036 

TtaB7Wl»ia»tf 7.44 

TIMS Wipe 1895-98#-. 1M 

14pc 1888-t 1137 

Trees ISiffcVSft 1206 

&ril 12pC I9B8 1089 

Tress SImc ISBBtt 9.12 


STB 101* 
576 8&V 

638 mg 
8.45 10523 
674 107U 
7.11 110% 
7.18 106A 
738 104d 
735 sea 
7T5 I1( 
7.77 1 
737 101 
810 117, 
218 


ais 

6.15 


GEh12t^e1B» 10.75 

1)9N lOltfB 1999 9.73 

Tress 6pc 1999#-. — &S7 


117fi 
IMA 
S7B 

329 11613 
623 123U 

631 11»» 

627 104% 
633 lim 

632 1073 

628 91A 


Rw Id mass nan 

ConmlanKHHBlsae. 

Tins nb Mb 1999 ‘ 

* icttH 

Ow Sue 2000# 

Trees 13|IC 2000 

iDpcam. 


E2001 tt_ 
:3002„ 


8pe3003tt 

an w-revri 

TnBllUapeJSOl-* — 


934 

611 

675 

1065 

634 

755 

H4 

624 

619 

1613 


638 107S 
- 99W 
628 98% 

an mss 

647 USE 

648 107A 
638 92§ 

652 1066 
640 97>aN 

653 10® 
666 U3A 


mviyc i888-s_ 

1014 Gatmrige9 1 2jK2004— 
,55 T»M*«M:a»4tt 

S BS » c2ros 

B Jw«kWW5 

Tim 12>2I)C 2003-5 __ 

1 0BA 71rt»2O0Btt 

8sc 2002-044 

gS Tim 1 Hoc 2003-7— 

1104 Tlaasttapc 2007** 

104*2 13^pC 2004-8 

1002 TlW 9pc 2006 

ins mnapcaow 

102S 

w. 

938 
USB 

1104 O btRBUmTmb 

ion! tenBiMwraa 

mg Con* flue in 201 ift — 

1B54 Tina 9*2012** 

88H Tim5%c2D0W2**_ 

IMS^C 2013*3 

7\PC2012-1S» 

Trees 9\gc 2017# 

Enfi12pc 2013-17 

+& 121 jB 1048 

1®* 88% 

*i BBSs 96 
+& vBi m .. .. . 

ais asat 

*& 113H 5% TN«3peV8«I 

+il 127i 104fe D»6S2^C 

*i 1293 K&B Trees. 2ijps — 


— 107A 
98U 

1073 

— lift 
1174 

— ma 

— 117B 

-A 121ft 
-4 u« 
110,', 
+4 131B 
♦A 114B 
JO 6& 
102 

* 131i 

1404 

ua 
+A 118A 
+& 128A 
♦4 1214 

+M iota 


4A8 

881 

758 

644 
686 

1618 

614 

658 

1005 

645 
1041 
658 
620 


7.15 794 
647 10ft 

639 89 
638 loan 

643 187& 
673 12235 

637 8ft 
844 98fl 

677 lift 

640 10ft 

678 129ft 

638 104% 
637 8GB 


*3, 864 
1264 
■ft Wft 
■»* 100H 
+3> 1B% 

ft 143i 
+& 11215 
♦* lift 
136i 
+4 119* 
+£ 151* 
4* 124ft 
UOfi 


684, 

1018 

8® 

W 

toft 

lift 

90% 

Bill 

112 % 


2peV6 (87§ 

4%P6W»_{136« 

Z^gctn . . . {7L3) 
2*2*10 062} 

ac*09„ .pog 

Swcva {76® 

ftDe*u (74W 

2*29Cia M 

2*2S»18 {BIjQ 

2*jjjb*20 «3A 

ihK-sm — H7j) 


242 358 201% 

269 354 107ft 
329 672 Wd 

3^1 675 163d 
344 379 100% 

151 677 18ft 
aa 660 i5ft 

681 351 lift 

6a an 1308 

668 663 12ft 

6® 684 133% 
668 3J1 111% 
17l 695 lift 


19715 

106 s . 

18ft 


749 

844 

EA 


984 

773 

& S3 

846 

1 tsa 

+4 

129fl 

mu 

641 

948 

WSS 

♦A 

127 % 

100 % 

7.28 

011 

754 

ta 

B3 % 

71 % 

82i 

829 

874 

♦4 

1I7S 

82 

819 

829 

94 % 

♦a 

114 % 

894 

847 

823 

1944 

■ft 

12B % 

994 

fttt 

8411 

22&tS 


15ft 

1264 


t — (1361) 

Praapactlw real redempdoi ms an pratactsd 
and ft) SK. (b* Nguns h p swnriw *^ 
Maxfeig 8s 8 menftoprior to taaue) and Im 
reflect reP s a i nq of RP1 to 100 h FBxuary 
tarter 3345. RPI for Uadi 1994: 1425 and 
146L2. 

Other Fixed Merest 


+% 203% 

+% 113 
♦% 171 _ 

4% 17ft 159* 

ft 111% 107% 
*rl T»fU 1S5A 
ft 18U 14ft 
ft 17ft 164% 
' 148% 128% 
157* 134% 
. 15® 12ft 
ft UU 106% 

ft 1283 105% 
WlaBonaf(1) 10% 
■w RPI base far 
been abused to 
1967. Con s arston 
lor October 1994: 


3. 


847 

- 47% 

+4 

59% 

831 

- 4244 

ft 

MB 

594 

- 56B 

ft 

71 

854 

- 35% 


44% 

848 

- 294 

ft 

3ft 

MO 

- 29% 

ft 

37% 


44» 

m 

S5% 

83S 

26* 

27JJ 


/WWOw1O%dc2O09_ 

Ran 11 4*2012 

W*d CM 84**10 

9*0*1998 

U* ■87-g 

HgrWB Oosbes ISpc 2011 _ 
Loris 1ftBc200a_ 

l*cpodftflcln«t — 

LCCSpcTOM. 

Na«J«B-1l4jK2007- 

KUll'.WV— - 

RBUeA^3%pE2021. 

4%JKL2IE4 

UfeUn SUB 16%PC 2008 


— TtafcJ ^J894_ 

J< Had Weat«.g~ Hgfa 


138% 107* 
♦1 142 115 

ft lift 8ft 
— 10ft 99% 
ft 115% 108 

41* 199J1 137JJ 
4l% 149% IS 
ft 44% 33% 

40% 28% 


614 

698 

684 

684 

■U-88 

16« 

165) 

883 

60s 

660 

427 


1121 



ft 136% 111% 
ft 78 86% 

ft 1S0% 129% 
ft 145% 123% 
41 199% 134% 


FT- ACTUARIES FIXED INTEREST BONCES 

Pnoe Indices Mon Doyt Fri Aoened «3 adj_ 

(JK 061a Noe 2S drenge 99 No* 25 interest ytd 


— LowooivonjfMd-~ -MsJ u ta ctBpOn >M1- w- 

Nw38 No* 25 Vlr. ago Nw 28 Nw25 Vf. ago Nw2a Mow 25 Yr. ago 


1 Up to 5 yearn £24) 

2 5-15 years £22) 

3 Over IS yeas (8) 

4 Irredeemabtes ® 

5 M stocks (GO) 

tad s * Bnfesd 


120.68 

141^2 

15639 

17958 

13668 


40.08 

4027 

4047 

4064 

4024 


12059 221 

14124 2.18 

15664 6 06 

17083 1.15 

13634 235 


833 5 yr* 
11.49 15 yr* 
1037 20 yrs 
1347 kred-t 
1033 


631 a35 630 

830 835 633 

828 833 . 833 

637 &42 7.04 

5%- 


837 

641 

641 


841 

648 


625 

834 

607 


831 «m 

838 . - 670 . 7.14 

839 833 7.15 




Noe 28 Now 25 Yr. ago 


6 Up to 5 years 0 

7 Over 5 years (11) 

8 Afl stocks £13) 

187.46 

175.18 

17S55 

. +613 
+628 
*025 

187^1 

174.70 

175.11 

67B 

1i4 

1.19 

607 
• 436 
441 

Up to, 5 yrs 3.77 682 2.14 . . 2J58 . 2JB1 ’ 1i9 ‘ ; ■ 

Over 6 yrs 3*1 . 68S 610 • ■ 682 - 3*4- . 692 . ’ 

Debentures and Loans 






Now 28 Now 25 Yr. ago Nov 28 Nov 25 Yr. ago Nat 28 Now 25 Yir. ago 

9 Debs 6 Loons (77) 

12064 

+050 

12920 

2-03 

1047 

643 9*7 7*8 640 944 7*4 636 641 .6*8 


Awnfli bos* iB do npUon |Md* w Mown Mere, Coupon Band*: tree 0%-IWfc MMwt 91540 THfc 11W sad am. f RatiWd. y*d Yswto dM*. 


FT FIXED INTEREST INDICES 

Nov 28 Now 25 Noa 24 Now 23 Now 22 Yr bqp Kptr Low* 

Govl Secs. (UK) 9246 9239 9233 9237 0138 10334 10734 8654 OK Edged 

Hasd Merest 10830 10839 10835 10838 10833 12434 13337 10630 Mb 

•fat see*. Gowrensw Seort— *lnee rnnare * «L .i 1274Q WU3» law 4B-IS<371^» Fared barest Mca 
2S and Ftod IntaroB 1BBB. 3E sMMy kvfce* ratBMd 1874 


LT EDGED 


ACTIVTTY INDICES 

Now 25 Now 24 Nov 23 


Now 22 Now 21 


1507 1843 1404 . 1265 1523 ‘ 

1413 1404 1473 . 1413 1344 

13337 91NA0 , taw reuse pn/rg . Be* 10Ct OsniraM 8ecvMMiV1W 


FT/ISMA INTERNATIONAL BOND SERVICE 


Uried m trie Mret Uanriknri 


bands fer vMch 6ms b an 
si Od Offer Chg. Yfeld 


t pdcM at 700 pm on Nsmnte2B 

Bd OBSr Chg. Wriri 


feauad BkJ Oder Ch» YtaU 


ua DOUM STHMOHTS 

Attrey Nri Trareuy 6% 03 1000 

Prortra 7% 98 WOO 


66% 

98% 


1000 93% 


AM 8% 00 

fa* Ned Gmaotan 7 99 

400 

1000 

Briokm5% 03 


nKTP7%w 






OwngKong Rn 5% 98 _ 
a*H6%04 

900 

1000 







EaaJapaiMaferft04 000 



9 7% 99 

BB 8% 97 

250 

1000 


89% 

98% 

10 % 

MB 

88 % 

8«% 

100 % 

105 

9ft 

06% 

100 % 

101 


Bee (to Franca 9 98. 
BaMma 9% 99 . 


Bt-fei Btrt Japan 8 IB _ 
EqwtOevCerp9%9B_ 
Fadaref NW Mol 740 M . 
FHn16%97. 


Fad MolB CMS 6% 98 . 
Gan Sec Cfepfel 9% 96 _ 
GMSC9%9B. 


- 200 MBH 

- 100 10ft 

- 900 88% 

_ 190 104% 
. 1900 95% 
3000 97% 

1500 94% 

_ 300 102% 


fed Bk Joan Ri7% 97 . 
Her Amr Dev 7% BB _ 
UyB%23. 


88 % 

99 

1IB 

9ft 

W1% 

W% 

MB% 

Hft 

10ft 

88 % 

W% 

Wft 

MB% 

94% 

8ft 

101 % 

W1% 

lot 

W3% 

Wt 

Wft 

9ft 

104% 

95% 

97% 

9ft 

10ft 

MB 


Japan Dw Bk 3% 01 

KnMSacPt*rt099 _ 
Koras Sac Pww 6% 03. 
LTC8Rn8 97 


. 200 101 % 

200 99% 98% 

.200 100% 

77% 


;7%(B. 


f7%97. 

Ontario 7% 03 

Qsfer KnnKBtonk 8% 01 . 

PatahOanada 7% 98 

Polled 5% 03 

Qurixc 8% 96 

QutfeacPtarOSe 

8ansbuy9%ge 

sASioa 

WCF9%98 

Sprin6%39 . 


1000 


1000 


SUB A NSW 8% 98. 
3Md«5%S6. 


Seedrit Bent 8% 98 _ 
Td%n Bee Poeer 6% 03 
Toly) IMspria ft SB . 

Toyota Mofcr ft SB 

Urriad (bottom 7% 02 _ 

Wortj Bark 8% 90 

HMdBa*B%97 


-SCO 100% 
-350 103% 
1350 85 

- 230 6ft 

«% 
ngl. 

- 3000 94% 

_ 200 101% 
-300 99% 
-1TO 69% 
_ 150 104% 
-200 101% 

- 150 102% 
-200 103% 

- 150 104% 
.1600 93% 
-200 101 % 
.2500 96% 
_ 700 101% 
. WOO 96% 
-200 101 % 
. 1500 83% 

.3000 aft 

. 1500 MB 
. 1500 MB% 


M»% 

W% 

100 % 

103% 

8ft 

10ft 

95 

99% 

94% 

101 % 

MU 

* 

104% 

10ft 

raz% 

104% 

104% 

94 

101 % 

08% 

101% 

aft 

»1% 

9ft 

9ft 

«ft 

103 


OBnscHE marc snuans 

Austria ft 24 

tea fade- ft 03. 
DariBkftBB. 


2000 83% 83% 


D&a Finance ft 03 _ 
DeudBBkft?7%03 . 

SC 6% 00 

BBftOO 

FHanOftW 

tor 7% SB. 


.2000 97% 
98% 
92% 


2000 


,1500 


2000 Sft 
.2900 97% 

.im aft 

,3000 10ft 
5000 100% 


U© Beden-RUertt 5% 00 2250 Sft 

Nawyftn 1900 98% 

OnibiaftOi 1500 sft 

Speti 7% 03 4000 97% 

5h*i897 2503 


97% 

9ft 

8ft 

9ft 

97% 

BB 

101 

Wft 

Bft 

m 

9ft 

97% 

KB% 


-% 

-% 

-% 

-% 

-% 

-% 

♦% 

-% 

-% 


-% 

-% 

-% 

-% 

-% 

-% 

-% 

-% 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 

ft 


ft 

ft 

ft 

ft 

ft 


ft 

ft 

ft 

ft 

ft 

ft 

ft 


(to d (todn 7% 97- 
649 Vo9oMganMRn703. 
804 World Be* 0 15 , 


an MMBa*5%03 

600 WoddBa*a%00 

7J1 

840 SMSS FRANC STRNGHT3 


.5500 W% 
- W00 86% 
.2000 21 
.3000 8B% 
.1250 110% 


W7% 

95% s% 
*1% 

89% 

111% 4% 


778 ArinOavBs*610 

683 Anfa4% 00 

722 Couvi Bnpe 4% 68 

927 Oanwrttftffl 

929 B8 8% 04 , 


- WO 
.1000 


-250 

.1000 


747 Bee de Ranee 7% 06. 
604 Rrtand7%99. 


741 Hyudd Uakr Fh 8% 97 . 

843 fc*nd7%00 

728 Ncfae6%D1 

750 Crtato 6% 03 

737 Qcbec Hjdra 5 08 

743 SNCF704 

604 WaMBa*6Q3 

740 WOMBM701 

619 

603 YEN SI1WGHTS 

827 Bdgun599 

745 BBG%00 

628 Finland 6% BB 

75E feMAmsrDa*7%00 

740 to 3% 01 


100 
97% 
3ft 
98% 
.300 108% 
.100 MB 
.300 107% 
.100 MB 
.100 MB 
.240 104% 
.400 MB 
.100 88 % 
.450 MB 
.150 98% 
.600 109% 


-75000 102% 
.100000 110% 
-50000 104% 


-30000 113% 
■ 30000 0 92% 
.100000 103% 
.120000 110 % 
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COMPANY NEWS: UK 


Full contribution from former Courtaulds business swells profits 

Sidlaw on target with 33% rise 


By Peter Pease 

Sidlaw Group yesterday rev- 
ealed a 33 per cent rise In pre- 
tax profits, boosted by a flail 
12-month contribution from the 
flexible packaging businesses 
acquired from Courtaulds in 
late summer 1993. 

The profits for the year to 
September 30 were in line with 
estimates at the time of its 
£24m rights issue in October. 

The Courtaulds acquisition 
cost £78m, partially financed 
by a £5Sm cash call; the recent 
rights - from which the Scat- 
landrbased packaging. oK 1 ser- 
vices and textiles company will 
have access to about £32m - 
was to fund a two-year reor- 
ganisation and capital expendi- 
ture programme for the pack- 
aging side. 

Group turnover swelled to 
£289.4m (£172 3m). Operating 
profits grew 50 per cent to 
£l8.7m (£l2.5m), but sharply 
Increased interest charges of 
£4.1 8m (£L54m) led to a more 
modest pretax rise to £14. 7m 

(211.1ml. 

Mr lan Bodie, finance direc- 
tor, said that awfl iiBHng rules 
stipulated tbe iwoinyipn of dis- 
counted bills in the balance 
sheet. This meant gearing 



Digby Morrow: shortages in packaging raw materials 


climbed to 82 (79) per cent; oth- 
erwise it would have f allen to 
64 (73) per cent. Pro forma 
post-rights gearing will be 
about 30 per cent 

The packaging side made 
operating profits of £ll.lm 
(£4.7 2m) on turnover of£16L2m 
(£54.1 m). 

Raw material prices for the 
division continue to rise with 
basic resin up 70 per cent over 
the year and polypropylene up 
40 per cent Mr Dlgtry Morrow, 


chief executive, said shortages 
were being experienced but he 
was unsure if price peaks had 
yet been readied. 

Profits from ofi services fell 
to £&£3m (£7.25m) on turnover 
of £102.7m (£94.5m) after 
increased losses of £472,000 
(£342^00) from the Supplylmk 
joint venture. 

Textiles lifted profits to 
£723,000 (£564,000). after the 
recovery erf a bad debt previ- 
ously written off. Turnover 


was 25.4m (£243zn) and the 
division remains up for sale. 

Earnings edged ahead to 
203p (20.3p) per share and the 
fig*! divide nd of &5p lifts the 
total to lip (lfrSpX 

• COMMENT 

While the oil services side is a 
good business giving steady 
growth - albeit at the mercy of 
the oil price - the packaging 
side is a much riskier proposi- 
tion with potentially greater 
rewards. Analysts now believe 
too much was spent on the 
Courtaulds businesses and 
their reorganisation, but Oat 
is history and there is no doubt 
the' packaging side had to 
expand or wither. The capital 
expenditure will not show ben- 
efits for about 18 Tnnrrtbfl and 
the 10 per emit margin target 
for the division by 1997 is 
ambitious, if achieved, how- 
ever, that would give earnings 
of about 30p, giving the shares 
considerable room for improve- 
ment. The jury is out on 
whether Sidlaw can follow its 
script, but more are optimistic 
than not. flat profit s Of CTftn 
(after an interest fall) are fore- 
cast for earnings of about l£p 
and a p/e of 11, well below the 
market 


Rooney denies Spring Ram stake sale 


By Paul Taylor 

Mr Bill Rooney, the former 
cfrflhmfln of Spring Ram, yes- 
terday denied reports that he 
was looking for a buyer for his 
13.5 per cent stake in the 
kitchen, bathroom and furni- 
ture group. 

Mr Rooney, who unveiled a 
£6.6m deal last week to take 
control of Atreus, tbe bath- 
room goods supplier, said he 
had no plans to sell the Spring 
Ram stake. However he 
acknowledged that he would 
sell, if offered the right price. 


He said he had received sev- 
eral inquiries, “but no serious 
approaches” , following newspa- 
per reports that he was seeking 
a buyer for his shares. At cur- 
rent prices, his stake in Spring 
Ram is worth about gaam. The 
shares were unchanged yester- 
day at 43p. 

Mr Rooney was forced off the 
Spring Ram board by institu- 
tional investors 14 months ago 
following revelations of false 
accounting at its Baiterley 
Bathrooms subsidiary and 
three profit warnings in eight 
months. Before this, the group 


had enjoyed 13 years of rapid 
growth. 

Spring Ram announced on 
Friday that it was continuing 
its recent expansion with the 
£4.fim cash acquisition of 
Pland, a maker of stainless 
steel sinks. 

For the year to September 30 
Pland reported pre-tax profits 
of £676300 (£570300) on turn- 
over of £10-8m (£103m). Net 
nftggta at the *md of the period 
were £4.7m. 

Mr Roger Regan, who took 
over as Spring Ram chairman 
last year, said: “The acquisl- 


$20.8m glass buy for CRH 


By John Murray Brown in DubOn 

CRH, the building materials group, has 
expanded its interests in the US through the 
acquisition erf Tempgjass Group, a glass fabrica- 
tor, for $20-8m,(£12.6m) cash. 

The acquisition through OMcastle, CRH’s US 
holding company, will allow CRH to expand its 
market and product range, nuking it the largest 
independent glass fabricator in North America 
with total sales of 8160m. 

It will provide increased purchasing leverage 
with glass suppliers, and a wider product range 
for the North American markets, where Old- 


castle already has 14 plants in 12 states. 

Tempgiass operates four plants in Ohio. 
Texas. Florida and California, producing tem- 
pered, insulated an d laminated glass, mostly for 
the non-zesidential construction sector, in 
1993 were $54m and was expected to break-even 
in 1994. 

Tempgiass. originally part of RTZ, was bought 
out by its managament - On tha death of the 
largest partner earlier this year, CRH bid for the 
shares of the other two partners, who will be 
retained as managers. 

The purchase brings CRH's total global acqui- 
sitions in 1994 to l£120m £118m). 


Hadleigh 
£324,000 
in the red 

Pre-tax losses of £324300 were 
announced by Hadleigh Indus- 
tries Group, the USM-quoted 
storage tank and trailer manu- 
facturer, for the half year to 
September 30. Last time there 
were profits of £332,000. 

The result included a loss of 
£490,000 on the disposal of Lyn- 
ton Commercial Units in Sep- 
tember and an operating loss 
from that company of £325300. 

Turnover improved to £15. 7m 
(£14.7m), with £2m (£2. 66m) 
Bum discontinued operations. 

Losses per share emerged at 
3p (3 jp earnings). The interim 
div idend is doubled to lp- 

Shield Diagnostics 

Stupid Diagnostics Group has 
reported its first pre-tax profit 
since coming to the market m 
June last year. Helped by the 
acquisition of Porton Cam- 
bridge, profits for thzs in-vrtro 
diagnostics company were 
£19309. In the period June to 
end-September 1993 losses were 
£160700 gn d £28,300 for the six 
months to March 3L 
^Turnover in the penod unto 
review was £235m for operat- 
ic 8 Losses of £41300. Porton 


NEWS DIGEST 


contributed turnover of 
£804,100 and operating profits 
of £189,700. Net interest receiv- 
able was £62,700. Bantings per 
share were Clip. 

Edinburgh Income 

Edinb ur gh Income Trust, the 
split capital investment trust 
formerly known as EFM 
Income Trust, reported net 
asset value per ordinary share 
of 4L2p at October 31 against 
50. 7p a year earlier. 

The net asset value per zero 
dividend preference store rose 
from 488p to 5L7p. 

Net revenue for the six 
months fell to £306,000 
(£404,000) for earnings of 2p 
(2-7p). The second quarterly 
dividend is held at lp, far 2p bo 
for, and the directors expect to 
pay an unchanged 4p totaL 

TR Far East 

TR Far East Income Trust 
raised net asset value per 
share by 15 per cent from 
157.5p to 181.8p in the year 
ended August 3L Fully diluted 
figures grew 14 per cent from 
14S3P to 169.9p. 

The company has applied to 
have its shares listed on the 
New Zealand stock market 

After-tax revenue rose to 
£236m (£2J27m) and earnings 
per share were 537p (438p). A 
fourth interim of 1.4p makes a 
total of 53p (5p) and dividends 


totalling not less than 53p are 
forecast tins year. 

Cantab Phannac 

Cantab Pharmaceuticals, the 
biopharmacentica] company, 
said it had met a significant 
milestone in the three months 
to September 30 with the open- 
ing of a pilot manufacturing 
facility on budget at £13m. 

In the nine rnnn thg to end- 
September pre-tax losses were 
£2.71m (£2m) on turnover of 
Sl.llm (£837,000). Losses per 
share were 27p (33p). 

OEM losses 

DEM, the property company, 
incurred pre-tax losses of 
£232,000 in the year to Jane 30, 
compared with profits of 
£263,000, which included 
£679,000 from the office equip- 
ment business sold last year. 

Turnover was £744,000. 
against 5£L27m, which included 
£139m from the discontinued 
activities. Losses per share 
were 33p (L5p). 

Independent Parts 

Independent Farts Group, the 
vehicle components company 
which came to the market in 
April, made profits erf £1.04m 
pre-tax for the five months to 
September 30 on turnover erf 
£7.1m. Earnings per share were 
6.42p. 



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FT Surveys 


tion is further evidence of 
Spring Ram taking opportuni- 
ties to make strategic bolt-on 
acquisitions. 

In June, Spring Ram 
acquired a furniture company 
and in August announced a 
£5m investment to start a cabi- 
nets business. For the six 
months to July 2 it reported a 
pre-tax loss of £lJm (£34.4m) 
after an exceptional charge of 
£2.5m for the closure of its 
Artisan TUe factory. 


JLI shows 
31% growth 
to £1.73m 

By Peter Frankfln 

Despite the continuing 
“difficult trading environ- 
ment", JLI Group, toe food 
processing and snacks com- 
pany, reported pre-tax profits 
up by 31 p tar cent from £L32m 
to £L73m for toe six mouths 
to end-September. 

The advance was achieved 
on turnover of £54.3m 
(£523m), mWIndiTig gl.Rm from 
acquisitions, with each of toe 

three divisions making a 
"solid contribution”, accord- 
ing to Mr Toav Gottesman, 

f tpriwinwi- 

Within food services, which 
achieved operating profi t s of 
£931,000 (£877,000) on turn- 
over of £20.5m (£i&Am), Jack 
L Israel had further strength- 
ened its position as a supplier 
to the r uim ing Industry, the 

riwlwnan crii^ 

The reorganisation in toe 
grmrfrc division M afco been 
successful, he said, with oper- 
ating profi ts up from £310,000 
to £784,000 cm turnover down 
from £l5m to £l33m. 

Kernels Snack Products, the 
nut processing business 
acquired in April, had met 
expectations and was now 
fully Integrated. 

The food ingredients side, 
helped by contributions from 
Turban and Frozen Herbs, 
turned to £887,000 (£660,000) 
on t u r no v er up £2m to £19JSm. 

Earnlngs emerged at 23p 
(2-lp) and the interim dividend 
is 1.65p (1.6p). The shares 
closed down Zp at 92p. 

Mr Gottesman said the 
impact of the three cash acqui- 
sitions wiadw in the past 12 
months, coupled with the sea- 
sonally high stock and debtor 
levels, bad increased gearing 
in the short term. 

Analysts are forecasting 
profits in the region of £8m for 
the year. 


Utd Carriers warns again 
as too little is now too much 


By David Wighton 

Events at United Carriers took 
a surreal turn yesterday as the 
parcel delivery group issued its 
second profit warning since 
going public in February. It 
blamed tbe first setback on too 
few parcels; toe second an too 
many. 

Yesterday’s warning was 
accompanied by a boardroom 
shake-up which sees Mr Mich- 
ael Howe resign as group manr 
aging director and Mr Allan 
Binks step down as chairman 
while remaining chief execu- 
tive. 

Mr TBp ira «aricj - "We have 
made a right mess of our 
return to the stock market and 
none of us can completely 
absolve ourselves.” 

The company warned that 
profits in the second half 
would be below toe first half s 
£L2m. The shares fell 15p to 
79p, half the flotation price 
of 153p, as analysts cut full 


tottnieniten 

aja»price(panaj. 



SORS pr.On*WW ■ 

year forecasts from £3 5m to 
gam. 

In May, when forecasts were 
£43m, toe company warned it 
had suffered a sharp fail in 
parcel volumes in April. In 
response it started an aggres- 
sive selling campaign. “In 
the space of a few days a toe 

b i \i) of Rflp iomhA r m lirniM shot 


up and we were unable to 
introduce new resources 
quickly enough," said Mr 
Binks. 

Operating costs rose sharply 
as the company was forced to 
hire new vehicles and take an 
temporary labour to dear the 
backlog. 

Compensation has yet to be 
agreed for Mr Howe, who has a 
two year rolling contract on a 
salary of £95300. He will con- 
tinue to manage the parcel 
business until his unnamed 
replacement arrives in Janu- 
ary. 

Mr Binks said his own 
£140,000 salary would not be 
cut in line with his reduced 
responsibilities- The new chair- 
man is Mr Doublas Rogers, 
chairman of Newman Tanks. 

The company said it would 
pay a final dividend of 33p “in 
toe absence of unforeseen cir- 
cumstances". The flotation was 
sponsored by Lazard Brothers 
with brokers UBS. 


Rodime losses deepen while 
US courts hold key to future 


By James Buxton, 
ocotusn uorresponoem 

Rodime, the Scottish (fisk drive 
pioneer whose business is the 
Upongmg of its 83 inch, disk 
drive technology, has reported 
a sharp drop in revenue and a 
big increase in losses, while its 
forme is heavily dependent on 
lawsuits awaiting judgment in 
the US. 

i/»y« before tax deepened 
from 12,1 4m to $7fi2m (£4J28m) 
in tbe year to September 30. 
became of administrative costs 
associated with lawsuits. 
Rodime has increased its 


revolving credit with. Bank of 
Scotland to (14m. 

The shares were unchanged 
at lip yesterday, having 
peaked at 51V4p earlier this 
year. Operating income 
amounted to $333300, against 
$4J8m last year. 

Running royalty itnxyq na fell 
because no new licence agree- 
ments were reached, and all 

gristing apiwnflnte are with 

east Asian manufacturers 
whose business was reduced 
by intense US competition. 

Rodime suffered a setback in 
April when a Minnesota judge 
declared invalid certain rfafrns 


in its principal disk drive 
patent in a suit with Quantum, 
the US disk drive maker. 

Rodime now hopes to hear 
within three to six months tbe 
outcome of its appeal, heard 
earlier this month by the court 
of appeals in Washington DC. 

If the appeal succeeds it win 
resume its action against 
Quantum. If Rodime loses, toe 
wii^ a gains t Quantum would 
fail and the scope of infringe- 
ment by other dink drive mak- 
ers, including Seagate, would 
be materially reduced. 

Losses came out at 5 cents 
(13 cents) per share. 



Si if#" 



$ 

S Nestle S. A. 

m 

IIP 

Odfjelf Drilling & Consulting 

s 

f 

it 

• : 

Company A/S 

% 

^ Joint venture with 

£ Goplana S.A. (Poland) 


US$55 million 

Disposal of oilfield rental tool 
assets to . 

£ 


Weatherford International Inc 

> Advised by 

i. 


OdfjeU advised by 

- ; Samuel Montagu 

ar 

ill 

Samuel Montagu 

■ January 1994 SWITZERLAND ( 

•> » 


Jw* 1994 NORWAY 


isii 







Pi 

EniChem Synthesis SpA 

h) 


Rizla Group 

i 

$ £60 million 

% Disposal of Rubber and Plastic Additives 
? businesses to 

■V 

: ¥ Great Lakes Chemical 

£ Corporation 

tgg-m 

mm 
• s - v 

Management buy-out 

Term Loan and 

Working Capital Facilities 

Emchem advised by 

gm 

Co-underwritten by 

1 Samuel Montagu 

mm 

Samuel Montagu 

i 

^ April 1994 ITALY 

^2 

May 1994 BELGIUM 








jf-- 












28 






- -%L 


FINANCIAL TIMES TUESDAY N< 


-VVf-: l taijg£Aaateft 


COMPANY NEWS: UK 


Green’s Heron offer 
clears its first hurdle 


By Simon Davfes 

Mr Steven Green's HNV 
Acquisition yesterday cleared 
the first hurdle to gaining con* 
trol of Heron International. Mr 
Gerald Eonson’s property 
group, by getting substantial 
support from ordinary share- 
holders for his offer. 

Acceptances were received in 
respect of 54 per cent of ordi- 
nary shares, while a farther 38 
per cent are held by Heron’s 
banks, which are understood to 
have agreed to support the 
offer. 

The Animal Meeting was 
held yesterday, and all the res- 
olutions were passed by more 
than 95 per cent of voters, 
j firinrflwg changes to the com- 


pany's articles of association, 
which remove a number of 
standard shareholder rights. 

However, the key to Mr 
Green's success remains in the 
support of the senior and 
junior bondholders, who will 
meet tomorrow. 

Swiss Bank Corporation, 
which is advising HNV A, said 
that “voting instructions indi- 
cate substantial support for 
these bondholder resolutions”. 

A sufficient number of votes 
have been received to ensure 
that there will be a quorum at 
the bondholders’ meetings. 

Heron's investors are being 
offered a value that repre- 
sents 45 per cent of the nomi- 
nal value of senior bonds, 6 per 
cent of the value of junior 


bonds, and £7.50 per 1,000 ordi- 
nary shares. 

Parties who looked at Heron 
when it was auctioned earlier 
this year, have suggested that 
HNVA was offering a full price 
for the company. 

Mr Gary Klesch, a dissident 
bondholder, said last week that 
there was another interested 
party who might present a 
package which would offer a 
lower risk means of participat- 
ing in the future recovery of 
Heron. 

No buyer has emerged, and 
Heron is adamant that the only 
alternative to HNVA is liquida- 
tion, which would bring in less 
than Mr Green's cash offer, 
while involving far longer 
delays In payment 


Field Group advances to 
£7.26m at halfway stage 


By Geoff Dyer 

Field Group, the carton maker 
which went public in July last 
year, increased pre-tax profits 
from £2-04m to £726m in the 26 
weeks to October 2. 

Compared with the pro 
forma figure for the previous 
half year, which assumes that 
flotation took place at the 
beginning of that period rather 
than in July, pre-tax profits 
rose by 7 per cent from £6. 79m. 

In a tough market environ- 
ment of rising raw materials 
costs and fierce competition in 
the food and household sector, 
total sales nudged np 3.5 per 
cent to £77.7m (£75m) and oper- 
ating profits were up 5 per cent 
at £7Am (£6J97m)- 

Operating margins were 
slightly higher at 9.4 per cent, 
against 9.3 per cent the previ- 
ous year. Mr Keith Gilchrist, 


Field Group 

Share price {pence) 


280 . 



Jul 1993 94 

SOteOK FT Graphfts 

chief executive, said: "We have 

tried to maintain the margin 
rather than go for increased 
volume.” 

Field, which has a 14 per 
cent share of the UK market, 
saw raw materials prices rise 


by about 25 per cent. The most 
diffic ult sector in which to pass 
these on to customers was food 
and household products, where 
there was tough competition 
among supermarket retailers. 

In the international and 
branded sector, which consti- 
tutes 52 per cent or group sales, 
Field has recently won two 
important single supply con- 
tracts - a five-year deal with 
United Distillers, worth some 
£6m to £7m a year in sales, and 
another long-term contract 
with William Grant & Sons 
Distillers, worth £l-5m a year. 

Helped by a lower tax charge 
of £1.67m (£1.77m) and a 
reduced interest bill of £48,000 
(£176,000), pro forma earnings 
per share improved by 12 per 
cent to 9.4p (8.5p). The interim 
dividend is 2.5p (2.3p). The 
shares rose 3p to 232p. a gains t 
a flotation price of 250p. 


Normand helps European 
Motor to advance 48% 


By Peter Pearse 

European Motor Holdings, the 
motor retail and services 
group, lifted pre-tax profits 48 
per cent from £2.64m to £&89m 
in the six months to September 
30. The shares rose 3p to I24p. 

In July the group bought 
Normand Motor Group in a 
deal worth £11 .75m, doubling 
its size. In two months, the 
acquisition contributed £1.2m 
to group operating profits of 
£&86m (£2£6m). 

Mr Richard Palmer, EMH 
chief executive, said benefits 
deriving from the integration 
erf tiie 20 Normand dealerships 
— includ in g greater manage- 
ment controls, shrinkage in the 


workforce, the introduction of 
a used car business and facility 
improvements - would come 
through within 18 months to 
two years. 

Reorganisation costs of 
£425,000 and a £106,000 provi- 
sion for a non-core disposal 
took a large bite from the 
£778,000 profit made from the 
sale of Norman's Mercedes- 
Benz dealership in Bristol. 

Growth in the pre-Normand 
dealerships was modest at 
£2.07m (£lJ36m), though Mr 
Palmer said that August was 
"a little better than last year” 
and had started with a robust 
order intake, which fell off 
slightly. 

He said he was confident of 


“the market for the types of 
cars we sell" - premium and 
prestige cars - would be mov- 
ing forward and cited the 
strong January order book as 
an indicator of the upturn. 

Group turnover rose to 
£126 .2m (£81.5m) with Nor- 
mand pitching in £40.3zn. 

Operating profits on the 
motor services side slid to 
ElUMtai (£l.38m), partly as a 
result of some customers of 
Wfioomatlc, the automatic car- 
wash subsidiary, deferring pur- 
chases into the next financial 
year. 

Earnings grew to 6.6p (4£p) 
per share and the interim divi- 
dend Is raised from 1.725p to 


Schroder invests in Limelight 


By Andrew Taylor, 

Construction Correspondent 

Schroder Venture Advisers on behalf of 
institutional investors has paid £35m for a 26.9 
per cent stake in Limelight, which inte nds to 
seek a listing on the London Stock Exchange. 

I limelight, which sells and installs fitted 
kitchens, bathrooms, bedrooms and conser- 
vatories, claims to be the largest privately^ 
owned company in the UK home improvements 
market 

The investment by Schroder values the com- 
pany at visflm. Limelig ht is forecasting after-tax 


profits of £2L2m, operating profits of £13m, and 
sales of £220m for the year to end-Decamber. 

Its brand names include Moben and Kitchens 
Direct (kitchens); Dolphin (bathrooms); Sharps 
and Limelight (bathrooms); and Portland (con- 
servatories). 

The company expects to have more than dou- 
bled its number of showrooms from 185 at the 
end of last year to more than 300 by the end of 
this year and to about 500 by the end of 1996. 

NM Rothschild and Apax Partners have acted 
as financial advisers to Limelight, which is 
owned by its management led by Mr Stephen 
Boler its founder and principal shareholder. 


This advertisement ia Issued in compfionce with the requirements of The International Stock Exchange o( the 
United Kingdom and the Rapubte of Ireland Limited (the “London Stock Exchange' p ). It does not constitute an 
(nviteflon to the pubSc to Butwcrtoe for, or purchase, any securities In British Assets Trust PLC (the ’‘Company”). 
AppteaBon has been made to the London Stock Exchange tor the 61 ,440,000 growth shares of 25p each In the 
Company (“Growth Shares”) and the 76JJOQ.OOO warrants ot the Company ("Warrants") in Issue hnmediatBiy 
(blowing the Company's proposed capital reorganisation to be admitted to the Official List It Is expected that 
admission of the Growth Shares and the Warrants wS become effective, and that dealings in the Growth Shares 
and the Warrants wfO commence, on Friday. 23rd December 1994. 


BRITISH ASSETS TRUST PLC 

(Incorporated In Scotland under the Companies Acta 1862 to 1890 regtsftrod number 3721) 

Proposed 

Revision of investment Objective, 

Capital Reorganisation, 

Adoption of New Articles of Association 
and 

Amendment to Memorandum of Association 
sponsored by 

S.G. Warburg Securities Ltd. 


Datate of the proposals referred to above are contained In the doc u ment dalad 2fflh November 1994 which has 
been approved by the London Stock Exchange as Bsbng partfcutors relating to British Assets Trust PLC (the 
“Listing Particulars'), Copies of the Listing Particulars may be obtained during normal business hours on any 
weekday (Satwdays and pubfic hoBdaya excepted) up to and Including Wednesday, 30th November 1994 (lor 
collection only) from the Company Announcements Office, London Slock Exchange Tower. Cape! Court Ofl 
Bartholomew Lana, London EC 2 N 1 HP and during normal business hours up to and indudfng Monday, 12th 
December 1994 ftwn: 

British Assets Trust PLC fvoty&Simepta 

One Charlotte Square 14th Floor 

Ednburqh EH2 4DZ One Angel Court 

Threpnorton Street 
London EC2R7HJ 


29th November 1994 


Barr feud 
continues as 
deal terms 
rejected 

By Richard Wotffe 

The family feud at Barr & 
Wallace Arnold Trust flared 
np yesterday as rebel 
shareholders rejected a 
last-ditch agreement with the 
board of the motor and leisure 
group. 

The rebels, led by brothers 
Nicholas and Robert Barr, 
rejected the deal which had 
been settled at the end of last 
week. They also voted down 
the board's proposals to 
reform the company's two-tier 
share structure. 

The deal would have paved 
the way for tbe brothers to 
join tbe board and for their 
uncle. Mr Malcolm Barr, to 
resign as chairman. 

However, the brothers, who 
speak for more than 50 per 
cent of ordinary voting shares, 
said the board had rejected 
“compromise proposals”. 

Mr Nicholas Barr said: 
“Serious concerns were 
expressed by management 
within the company's two 
main divisions and the 
company failed to finalise 
essential elements of Friday’s 
deal.” 

Tbe board had wanted to 
enfranchise the non-voting A 
shares, owned almost entirely 
by Institutional investors, at 
an extraordinary meeting in 
Leeds yesterday. 

It said that the brothers had 
made unreasonable demands 
including the appointment of 
an additional non-executive 
director and the payment of 
their independent adviser 
bills, thought to amount to 
£245,000. 

The rebel shareholders, who 
want to demerge the 
company's two divisions, have 
requisitioned a farther EGM 
on Thursday to remove Mr 
Parker and Mr Brian Small, 
finance director. 

The ordinary shares rose lOp 
yesterday to 543p, while the A 
shares rose Sp to 266p, before 
news of the enfranchisement 
vote was released. 


QMH’s debt 
plan in time 
for AGM 

Queens Moat Houses, the 
hotels group, plans to publish 
proposals for its £2-3ftn debt 
restruct u ring in the next three 
weeks. 

Tbe group said it hoped to 
announce the principal terms 
of the restructuring before the 
annual meeting, now set for 
December 21. The announce- 
ment is likely to come days, 
rather than weeks, before the 
AGM because of continuing 
objections by just one of the 
more than 70 debt holders. 

This is thought to be Trust 
Company of the West, a US 
debt trader which bought its 
stake in the secondary market 
Any restructuring deal needs 
the approval of all l raiders. 

Meanwhile, a group of rebel 
QMH shareholders is 
proposing a rescue rights issue 
instead of the restructuring 
plan which is expected to 
dilute substantially existing 
stakes. In a letter, Mr Dennis 
Woodhams of the QMH 
Shareholders' Action Group, 
urges fellow investors to 
consider his draft proposals 
and projections to be 
presented at a meeting soon. A 
rights issue would be “fairer 
to shareholders” and satisfy 
bankers, says Mr Woodhams. 


Chelsfield buys Belgravia 


By Simon London 

Chelsfield, the property 
company run by Mr Elliott Bar- 
nerd, has formed a joint ven- 
ture to buy some of central 
London’s most expensive resi- 
dential property for £48£m. 

The 17 buildings on the 
Chesham Place Estate, 
between Eaton Square and Bel- 
grave Square in Belgravia, are 
being acquired from the execu- 
tors of the estate of Mr 
Eric Hopton, who died in 
1991. 

Chelsfield is taking a 50 per 
cent interest in a new joint 
venture with Olayan, tbe Saudi 
Arabian investment institu- 
tion, to buy the portfolio. 

The Chesham Place Estate 
comprises 121,000 sq ft of resi- 
dential accommodation. Includ- 
ing some of the capital's most 
exclusive addresses, and 85,000 
sq ft of offices. 

Chelsfield said that the port- 
folio had been valued for bank- 
ing purposes at £53 .5m. 

Most of the houses and 
apartments are let on occupa- 
tional leases at rents far lower 
than could be achieved in the 
open market 

The estate generates an 
annual rental income of £L3m, 




Chesham Place Estate: 17 bafldmgs being acquired for £«L5m 


against an estimated £3m 
which could be achieved if ail 
the property was let at today's 
rents. 

The majority of the leases 
expire in September 1995. 
Chelsfield wifi then be free to 
either negotiate new leases 
with the occupants or to sell 
the properties. 

“The estate has been well 
looked after hot there are stone 
development opportunities for 


us,” commented Mr Bemerd, 
Chelsfield chairman. “We 
envisage a gradual realisation 
of the portfolio over a number 
of yeare.” 

Knight Trank, and Rotiey, 
the survey or s, estimated that 
tbe break-up value of the 
estate could be as high as 
cflOni 7 

Mr Btonerd added that long 
leaseholds offered for sale 
would have rarity value; 


because up d ohif-' 

mated by ^^ tJadogant ah3 
Grosvenor, Estates, whfett 
tend to gxi&fc •shorter tee- 

. see.' J " ‘ - .>'£.*1 -'■■p 

The jointiyrafeie^KHDp«ar 
will fund \the icqulsitioi 
through 

Chelsfield ^ . m anag e fee 

properties fofir a matt 

agement ^ to the 

. investment; pvtoisaMe of the 
portfolio. J" *?:&.* 


Salvesen plans distribution growth 


By Simon Davies 

Christian Salvesen has made 
no secret of its desire to bnfid 
itself up as a business services 
group, getting rid of some of its 
disparate operations and 
spending proceeds on distribu- 
tion and specialist plant hire. 

Mr Chris Masters, chief exec- 
utive, said yesterday: “We are 
concentrating the business cm 
distribution and Aggreko,” and 
he described the sale of Salv- 
esen Bricks and Vfkoma as a 
sensible move towards 
cleaning up its corporate struc- 
ture. 

In the short term, however, 
analysts expect this strategy to 
reduce earnings per share, as 
the mamgpTngnt will be chal- 
lenged to find an equally prof- 


itable home for the cash. 

The bricks division was 
expected to make operating 
profits of more than £7m in the 
year to March 1995, while 
attracting a sale price of sot 
much above £50 ul 
S alvesen is expected to chan- 
nel the proceeds into expand- 
ing its industrial distribution 
business Into Europe, probably 
through acqtdsxticHis. 

Mr Masters said yesterday 
that industrial distribution in 
Europe was like UK food retail 
distribution 20 years ago, and 
offered enormous potential 
Following the successful 
integration of Swift, Salvesen 
is now looking to broaden its 
distribution interests in both 
Europe and the US. 

In April this year, the com- 


.»7*: v » 

mu 


Share price (pence) 
400 -e- — ^ 


. ■ .V I'Jvi. •' 




, . . i -‘Wafts.. 


SoitaEFr&apMt* ' 


pany paid FFr57in <£8-77m> for 
a French frozen good distribu- 
tor. Further purchases are 
expected. 


Kleinwort in French move to 
win more privatisation work 


By Nicholas Denton 

Kleinwort Benson, the UK 
investment bank, is to team up 
Its Paris corporate finance 
department with French execu- 
tives and shareholders in an 
effort to win more privatisa- 
tion work. 

Kleinwort will put its exist- 
ing corporate finance team of 
five professionals into the ven- 
ture, capitalised at FFrSOm 
(£7.15m), in which it will have 
a 51 per cent stake. 

“We can no longer confine 
ourselves to the UK,” said Mr 


Michael Martin, head of Klein- 
wort Benson France. The 
minority shareholding win be 
placed with French institutions 
as is customary For French 
merchant banks. Four insur- 
ance companies have already 
committed themselves to tak- 
ing stakes. 

Another key element in 
Rleinwort's effort to present its 
venture as a domestic French 
merchant bank is the appoint- 
ment of Mr Christian Giacom- 
otto. Kleinwort has lured Mr 
Giacomo tto, who will chair the 
board, from Groupe Lagar- 


daire, the diversified conglom- 
erate, where he was ebafrman 
of Banque Aqil, its investment 
banking subsidiary. 

Kleinwort Benson said it 
hoped the appointment of a 
“well-networked” Frenchman 
would give it a “French 
patina” and contribute to 
greater success in winning 
French privatisation mandates. 

In UK privatisations, Klein- 
wort has established a name as 
one of the most active houses 
but Fiance has proved a diffi- 
cult market and KMnwort has 
only acted in subsidiary roles. 


• ; cd - V: 

Given SatvBBOfSjS^pose revs* 
latknxlast FtoaxiSy difficul- 
ties tti its pfeut Sg&4Msines£ 
combined with 

tion fcutJK .iiTlaSon, these 
restate wtete roughly In 
with - expectations.: Disposals 
will help frmd the' group's 
ftv panltirtg dfctrflnrtlfm bust 

ness, but investors 1 win stffi 
want to be persuaded'tbat the 

under cbhtrot Problems fir 
Europe ahd'ht Iight & Sound 
Design, suggest Hat further 
reasshranc OfWfll ; be required. 
On a parflfite'foretoBt tif about 
£8L5m, Salvesen's shares are 
trading -oft ‘ a : jjfe of 12:9, 
bat thte tHsctnmfc.to the sec- 
tor rating looks set to' rem- 
ain. -T’-' 


Darnel Thwaites 
ahead at £3.84m 

Dazriel Ihw&rtes, the brewer, 
wine- merchant -and public 
house and hotels operator; 
lifted pre-tax^ profits from 

£3.17m to £L84m In the half 
year to Septanber 30. 

Last time-: there was an 
exceptional £585, (WO loss on 
tiie sale of properties and 
related plant and the result 
tins time was also .helped by 
reduced Interest charges of 
^£2 .92m (£2J8m). 

Turnover improved to 
£40 An (£38m). Earnings per 
share emerged at 12£p (9.9p) 
and the interim dividend Is 
raised to I.3p (l.2p). 

The company’s shares trade 
under Rule 535 (2). 


GEC acquires last 
large Ferranti division 


j DIVIDENDS ANNOUNCED 


Cares - Total Total 

Currant Date ot ponding for last 

payment payment dvidend year year'. 


By Paul Taylor 

GEC-Marconi is acquiring 
Ferranti International's civil 
airport and emergency systems 
business from the administra- 
tive receivers, terms of the 
agreement, which is subject to 
contract, were not disclosed. 

The deal comes almost a 
year after the joint receivers, 
Mr John Talbot and Mr Mur- 
doch McKillop of Arthur 
Andersen, were appointed and 


marks the disposal of the last 
sizeable chunk of the Ferranti 
businesses. 

Ferranti Information & 
Response Systems is based In 
Wythenshawe, Manchester and 
employs about 150 people. It 
designs, develops and main- 
tains systems for airport infor- 
mation, baggage reclaim, flight 
information and displays, 
flight message switching and 
emergency services command 
and control. 


Christian Sanwi — int 

EcSnbuiph Income Int 

European Motor int 

FteW Group int 

naaHwgn mass — jm 

Harris (PhBlp) lot 

Hogg Robinson int 


3 A 

Feb G 

1* 

Jan 12 

*r 

Jan 12 

2JS 

Jan 20 

1 

Jan 13 

2J2 

Jan 23 

2.95 

Jan 19 


Joseph (Leopold) int 

Katamazoo bit 

Marfing Inds Jnt 

Manydown — Int 

Prospect bids — fin 

Skftaw — fin 

Thwattee (p) Int 

TR Far East fin 


Dividends shown 
Increased capital. 


Tliit aihertitemeM is issued in ctxnpnance wttfa the ngubriom. of the Wemm l orwi Stock 
Exchange of tfw United kingdom and tfie RepATic ot Irebnd limited Mie London Stock 
EadungeT h does not constitute an offer or on invitation to subscribe for. or purchase, 
any securities. Application has been matte to tin London Stock Exchange far aO tiw 
Chtflnaiy Shares and Warrants ot Asset Management Investment Company PLC (the 
Cmumijn hated and to be tacued pursuant tome Placing to be admitted to the Official 
Ur. Ris expected that admission to the Official list viffl become dfcctive and that dealfag* 
In the Orfnwy Shares and the Warrants will commence on 7« Decarabar, 1994. 

ASSET MANAGEMENT 
INVESTMENT COMPANY PLC 


T,. J.X!. 


per snare net except where otherwise stated. tOri 
stock, te Second quarterly making 2p (same) so ter. 


This advertisement is Issued In compfianca with the requirements ol The International Slot* «r tnA 

United Kingdom and the Repubfic of Ireland Limited (t^ “l^^ Stock EXSTftdS 
Invftatfon to the oubbe to subscribe far. or etmdw*,. 





Oacorparjtrd in 


Regis t ered Humber: 291 


ksAas 1905.1989 


PLACING 

by 

SINGER & FRIEDLANDER LIMITED 

at 5m 7,000 Onfinaiy Skate ol 25p each at I OQp per sh« payable In fofl on apfSadaa 
(fagedier with Warrants to Hdacribe far shares In die proportion of 
one Warrant far ewety fire stated 


SHARE CAPITAL 
Ordinary Shares of 25p 


Nominal Value Number 
2^00000 10,000,000 


hwedand fate Issued foDy 

Nominal Vatue Nunber 
1^250 S^H 7,000 


dte Rnandal Scrvlca Ad 1986. am available far ooHeetian only duriw normal buinos 
noun ip to IxDeamber, 1994 from dteCbtrfiany Anoouncemsiti OfflCBor the London 
Stock Exdwrgp, London Stock Brchatioe Tower, Cape! Court entrance, off Bartholomew 
^tlmjdonKaNMd up to and ImAAg 1 5* Dtumbcr, 199* fam the Cotrpany'» 
rastercdofficeutidtHotv, UwneHouK WHtgh Helbonv London wavfits and ftom 
inefollBwmp 


SfagtrA Medlaniter 
21 Now Street 


29di November, 1994 


Brakes to die Radnor 
Rowan OattiMpn & Cfc Ucnfted 
The Cobtoo Centre 
Bristol BS1 4XE 



wintocome leflet^ve, and^ mat separate dealings En the Growlh Shares resulting from the 

INVESTORS CAPITAL TRUST PLC 

(incorporated In Scotland under the Compardaa Acts 1862 to 1890 with ngbiter^numlm 81^ 

Proposed 

Revision of Investment Objective, 
Capitalisation Issue 
of 247,392,000 income Annuity Shares, 

Adoption of New Articles of Association and 
Issue of Warrants to Growth Shareholders 

sponsored by 
de Zoete & Bevan Umited 


Details of the caprtaUsabor issue and other proposals referred to above rainti™ 

are contained In the document dated 28th November 1894 which w lnv ° 8 tors Coital Trust PLC 

Exchange as Hating particulars relating to tiie Company (the "Ustinn ** tondort Stock 

Parflculars may be obtained during normal business hours on anv Copie3 »» Ltetofl - 

excepted) up to and indutflng Wednesday, 30th November 19&4 ftor^SLS ? urtlay8 ^ P 4 *® 0 fwfidays 
Announcements Office, London Stock Exchange Tower, Capet Court our!? {rom the Company 
1 HP and during nomtaltxisjness hours up 10 and Including Monday 12th Lano ' London ^C 2 N 

Trust PLC L ' Beam oor 1994 from: 

One Charlotte Square Ivory & Sma pic 

BJnbwgh EH2 oOZ 14ih Floor- 


cX=CU T ;0li 0 Hi. Y 


Z8th November 1994 


Ivory A Sma pic 

14lhFJoor- 

On? Angel Court 
Thro^norton Straw 
London EC2R7HJ. 


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FINANCIAL TIMES TUESDAY NOVEMBER 29 1 994 


29 


COMPANY NEWS: UK 


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Absence of exceptional gains this time has impact on interim results 

Hogg Robinson falls to £7.9m 


By Paul Taylor 

Hogg Robinson, the travel, 
transport and financial ser- 
vices group, yesterday reported 
sharply tower first half pre-tax 
profits refecting the absence of 
exceptional gains. 

Pre-tax profits In the six 
months to September 30 fell to 
£7 .91m, against £14.3m when 
the results included a £6. 7m 
exceptional gain from the sale 
of the leisure travel business to 
Airtoure for £25m last year. 

However, excluding excep- 
tional items, all three core 

Hogg Robinson 

Share price (pence) 

900 - 



businesses showed significant 
growth over the period, helped 
by the performance of the five 
acquisitions reported earlier 
this year. 

Turnover grew to £95.Lm 
(£7&&n) including £5.05m from 
acquisitions and operating 
profit increased to £7.48m, com- 
pared with £6.75m last time 
when discontinued operations 
contributed £L2 ql 

The interim dividend is 
increased to SLSSp (2.75p), pay- 
able from earnings of 7J25p 
(I7.28p) per share. The shares 
closed down Kp at 201p. 

Mr Brian Perry, chairman, 
commenting on the results, 
said progress so for had been. 
In line with plan” and added 
that the group was, "looking 
forward to a traditionally 
strong second half with attrac- 
tive contributions from the 
successful integrations of the 
acquisitions made earlier in 
the year.” 

Underpinning the strong 
operating performance, the 
business travel division 
increased its profits by almost 
50 per cent to £2.41m (£LB2m) 
on sales which grew from 
£16.im to £19 Jm. 

Transport improved Its mar- 



Brian Perry: progress so for had been in line with plan 


ket share in its European 
trailer operations and posted a 
35 per cent increase in profits 
to £3.8m (£2. 5m) aided by 
healthy contributions from its 
two new acquisitions, Nippress 
and Snel coupled with a recov- 
ery in the Shipping Services 
business, which mainly under- 
takes cargo movements 
between the UK and the Falk- 
lanifa islands. 


Meanwhile the flnnnniai ser- 
vices division reported a 15 per 
cent rise in profits to £2.7m 
(£2.35m), aided by contribu- 
tions from the acquisitions of 
Skillbase and Claybrook. Mr 
Perry said the recent acquisi- 
tion of Bain Hogg’s financial 
services business from Inch- 
cape positioned the group, “as 
one of the leading Independent 
financial advisors in the UK." 


Kalamazoo rises 19% to £3m 


By Paul ChNMright, Midlands 
Correspondent 

Kalamazoo, the computer 
services and printed systems 
group, continued its profits 
growth with a 19 per cent rise 
in pre-tax figures in the six 
months to September 30. 

Pre-tax profits were £3m, 
a gains t £2. 53m in the same 
period last year. This turned 
Into earnings per share of 4.98p 
(4.2p), and prompted an 
interim dividend increase from 
0.85p to lp. 

Group turnover, however. 


was slightly lower at £28J26m 
(£29.56m). 

However, Mr Mike Lang- 
more, chief executive, 
explained that in the computer 
services division, new products 
bad been introduced which had 
led to £3m of firm orders with 
a further £3m under negotia- 
tion. The results would come 
through ta the se cond fo»if 

In the printed systems divi- 
sion - lossmakmg in 1992-93 
but profitable after restructur- 
ing - Kalamazoo has been cut- 
ting back the range erf products 
and moving into higher value 


new lines like security print- 
ing. 

During the second half, Kala- 
mazoo expects a contribution 
from its newly acquired ET Hi- 
Tec and W1S Computer 
Systems, both bought to 
expand the computer services 
division. During the first half, 
new acquisitions accounted for 
E1&000 of operating profit of 
£2. 77m (£Z52m). 

The group holds net cash of 
£7.4m. “We can do small acqui- 
sitions without going to the 
market for cash,” said Mr 
L angmore. 


Philip Harris jumps to £0.95m 


Philip Harris, the laboratory eq ui pm ent maker 
and pharmaceutical supplier, announced a 
jump in pre-tax profits from £378,000 to 
£947,000 for the six months to the end of Sep- 
tember. 

There was a tnraround in the education and 
scientific division from losses of £148,000 to 
profits of £344,000 with improved sales in aH 


the division’s areas. 

Group turnover rose by 13 per cent to £50.2m 
(£44»3m). Earnings per share came through at 
5-77p against 2.42p and the interim dividend is 

nurtntfltarari at Z2p. 

Mr Bob Jordan chairman, said the general 
Imp rovement in all areas of activity pointed to 
an impro v e d outcome for the fall year. 


Leopold 
Joseph 
at £ 1.09m 

Leopold Joseph Holdings, the 
merchant bank, turned in pre- 
tax profits of £1.09m for 
the six months to September 
30, against tha background erf 
a volatile financial environ- 
ment 

Mr Robin Herbert, chairman, 
cautioned about the future. He 
predicted a “satisfactory” 
result for the year, but did not 
at this stage, expect an 
improvement on last year's 
£2. 35m, “unless financial mar- 
ket conditions became much 
easier”. 

Operating income for the six 
months was £432m and earn- 
ings per share came to I4.7p. 
The interim dividend has been 
raised to 3.4p (3J25p). 

The figures were prepared in 
accordance with new account- 
ing rules for banks and 
because of the different report- 
ing basis, no comparatives are 
available. 


Marling 

unloads 

lossmaking 

subsidiary 

By Geoff Dyer 

Marttog industries, the 
industrial textiles company, 
yesterday announced a 25 per 
cent increase hi interim 
pre-tax pr ofits and the sale erf 
its fossmakhUT German 
industrial webbing subsidiary. 

Mr David Abel Smith, chief 
executive, said that the 
disposal of Oppermann was 
part of the strategy of 
c o n c entra ting on higher 
margin products. “We have 
now completed the task of 

rifantnpthig the prnhtenis of 

the past.” 

The original owner, Mr Haas 
Dieter Oppermann. has 
acquired the company - which 
lost DM363,000 (£148,000) in 
the six months to September 
30 - for the nominal 

consideration of DML 
Oppermann will retain debts 
of DM810,000. 

Marling Is keeping 
Oppennann's seatbelt webbing 
business, which has been 
transferred to its Netherlands 
factory. It incurred a £jL24m 
loss on the disposal. 

Mailing’s pre-tax profits for 
the six months to September 
30 rose to £L14m - after the 
£L24m charge -compared 

with £910,000, which Included 
£485,000 losses on disposals. 
Turnover advanced 8 pa- cent 
to £32m. That compared with 
£29 -5m - including £4. 04m 
from discontinued operations. 

Operating margins on 
continuing businesses rose 
from 7 per cent to 9.8 per cent 
despite higher raw materials 
costs. 

Mr William RoRason, 
finance director, said that all 
the group's businesses had 
shown improvement The main 
business, seatbelt webbing, 

benefited from increased 
demand in the UK and 
continental Europe. 

Gearing foil from 95 pa cent 
to 83 per cent Mr RoQason 
said the ratio would be 70 to 
75 per cent at the year end. 

Earnings per share foil to 
0.08p (0-29p). The company 
said that an continuing 
operations, and before 
charges, earnings rose to 0-78p 
(0.36p). The interim dividend 
is oiq> (0.2p), payable as a 
foreign income dividend. 


Prospect Inds rises 2% 
in difficult conditions 


By David Mfighton 

Prospect Industries, the power 
st atio n gn gnwwfag main- 
tenance group, saw profits 
edge up 2 per cent to £5.l7m 
before exceptional items in the 
year to September 30. 

mV Philip Wflbraham, chair- 
man, said that tr ading condi- 
tions in the UK remained 
“extremely difficult” with no 
immediate prospect of 
improvement 

But he added: "Competitors 
such as Babcock and Senior 
have both tost money in our 
sector and I don’t see manage- 


Merrydown 
recovers 
with £0.34m 

Merrydown, the Sussex-based 
dder «wri soft drinks maker, 
returned to the black with a 
pre-tax profit erf £340,000 for the 
half year to September 30. 

The figure represented a 
marked improvement on the 
outcome for the year ended 
March 1994 when, after excep- 
tional costs of the com- 

pany was left with a deficit of 
£2.79 ul 

At the halfway stage last 
time there was a prefox profit 
of £932J)00. 

Turnover for the period 
under review amounted to 
EULlm, up from £lL3m in the 
1994 first half 

framing s name out at 2J»p 
(5.72p) per share and the 
interim dividend is maintained 
at lp. 

Merrydown’s shares fell 4p to 
85p. 

Burarah Castrol 

Burmah Castrol, the lubricants 
and chgmicala group, is form- 
ing a joint venture in Jordan 
as part of a &L5m expansion of 
its construction chemicals 
business in a number of emerg- 
ing markets. 

The Jordanian joint venture, 
in which Burmah’s Fosroc sub- 
sidiary has a 70 pa cent stake, 
is btdldmg a factory in Amman 
which will also supply the Leb- 
anese, West Bank and Syrian 
markets. These are expected to 


merits of their quality allowing 
that to continue.” 

Group turnover rose 15 pa 
cent to £67.4m but margins 
slipped, partly reflecting the 
costs of expansion overseas. US 
profits foil to £128400 (£333400) 
on turnover of £&5Sm (£5.1m). 

Last month. Prospect 
acquired Whessoe's lossmakmg 
piping systems division for 
£11.7m in shares with the aim 
of accelerating its interna- 
tional development 

Its UK-based business is now 
being integrated with Prospect 
at a cost of between £750400 
and £lm. prospect’s gearing. 


NEWS DIGEST 


grow rapidly as a result of the 
Middle East peace process. 

Meanwhile Fosroc is increas- 
ing its stake in its Indian joist 
venture from 40 pa cent to 74 
per cent 

It is also building two new 
factories in Koqea and Indon- 


Caverdale boy 

Caverdale, the motor retailing 
and industrial products group, 
has acquired GE Harper, a 
Volkswagen amt Audi deala, 
for £2.4m in cash. 

The acquisition will be 
financed from existing 
resources and from the sale of 
a stake worth £146m in United 
Dutch Group. 

Harper made pre-tax profits 
of £130,000 in 1998 on turnover 
of £4.8m. Caverdale now holds 
16 vehicle franchises in 25 loca- 
tions. 

Drayton Blue Chip 

Drayton Blue Chip Trust suf- 
fered a feU in net assets pa 
share to B3.4p at September 30, 
against 80.7p six months ear- 
ner. 

Net revenue for the six 
months however, improved 
from £503,000 to £551400 and 
earnings pa share were 4^59p 
CMSlp). 

The interim dividend is 
maintaine d at 2405p. 

Ocean Group 

A syndicated loan arranged by 
Lloyds and WestLB banks for 
Ocean Group, the freight and 
transport company, has been 
oversubscribed and increased 


which was 108 per cent at the 
end of the period, has been cut 
below 50 pa cent following the 
acquisition and share issue. 

After exceptional items, 
including a profit of £738400 
on the sale of the final 
tranches of the Graystone loan 
note, pre-tax profits rose 
to £5.91m (£4. 02m). The 
company’s brokers. Peel Hunt 
forecast a rise to £&5m this 
year. 

Adjusted earnings per share 
were lOlp (L93p) and the final 
dividend is 056p giving a total 
for the year of 055p (04p) - up 
6225 pa cent 


from £7Qm to £1 0625m- 

Thie money will be used to 
pay off an existing £7Qm loan 
and other loans. 

The 5% year, multi-currency 
deal, which was priced at 30 
basis points ova Libor, was 
targeted at banks which 
already had a relationship with 
the company. 

Banks in the deal are: 
Lloyds, WestLB, Rabobank, 
Bank of America, Sumitomo, 
Toronto Dominion, Crddit 
Lyonnais, Deutsche, Midland 
and First Chicago. 

Abtrust Emerging 

Ab trust Emerging Economies 
Investment Trust had net reve- 
nue cf £393,472 for the period 
to September 30. 

Undiluted net asset value pa 
share amounted to 101. 84p, 
compared with 95.92p at 
launch and S8.06p at the 
interim stage. 

The trust, which was incor- 
porated on September 24 last 
year, had earnings pa share of 
0.79p. The board has 
announced an ordinary divi- 
dend of 0.2p and a special divi- 
dend of 0.4p. 

Martin Currie Eur 

Martin Currie European 
Investment Trust had a net 
asset value of 117 Sp pa share 
at end-October against U7.7p a 
year earlier and 127-8p at the 
April 30 year-end. 

Net revenue for the six 
months jumped to £228,000 
(£99400) for earnings per share 
of 0.99p (0.43p). 

The trust does not pay 
interim dividends. 



I 

I 


CREDIT NATIONAL 

OSS 250,000,000 Floating Rate Notes due 1997 

In accordance with the Terms and Conditions of the Notes, no- 
tice is hereby given that for the Interest Period from November 25, 
1994 to February 24, 1995 the Notes wfl cany an Interest Rata 
of 5.9375 % per annum. 

The Coupon Amount payable on the relevant Interest Payment 
Date. February 24, 1995, w*be US$ 15.01 per USS 1,D00 prin- 
cipal amount of Note, US$ 150.09 pw 

US$ 10,000 principal amount The Agent Bank 

of No® and US$ 1,500.87 per ffTTfn KmtSotbmd i 
US$ 100,000 principal LuMnrfttig 

amount of Nota 




i 

I 


Kingdom of Denmark 


USD 250,000,000 
Boating Rate Notes due May 1985 

tn accttdanoe with the Description of the Notes, noboe is hereby 
raven that for the Interest Period from November 25. IBM to 
May 25. 1995 the Notes swffl cany an Interest Rate of 10% per 
annum. 

7Tie interest payable on the relevant Interest Payment Date. 
May 25. 1995 against coupon Na 20 

wffl amount W USD 502.78 TTm Agent Bank 

per USD tO.OOO No»- £f>7fYn KndBetbank 

^Luxembourg 



ECU 1, 200,000400 

Euro Mecfium Term Note 

and 

Eiko Depositary Receipt ProgFwnme 

ol 

lamro Bank Owrseas N.V. 
ggnea Nazkmaledel Lavoro S-p-A. 

Series N°5 


; terms or the Series N" 5 DepoateiyRecsipe 

27. 1995 the Recap* wH 
^ *62375' ft. per annum. 
ggflV an Interest m the relevant Interest Payment 

Tfw Calculation 

1.000, US$162.87 amm 


US$ 16107 

P®* _ . —m* eo nor Receipt 


Ttm Cekutetion 
Agent 

KretBatbank 

Luxembourg 



SCHRODER INTERNATIONAL SELECTION FUND 
SncUti d’iovestfasentent i capi ta l variable 
Registered Oftke: 13, roe Corbie L-1637 Luxembourg 
ItC Luxembourg 8202 

EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS 
of Scbrodet bnexnariooal Selection Find will be held at Its legfatcrcd office at 15. roc 
Goethe. Luxembourg on Wednesday, 7lh December lWMu 10 ut toe Ibc purpose of 
considering and voting upon the following matter. 

AGENDA 

L Agcndmrm of Aidcia 16 of Hk Artidea oT Incorporation at rho rompany. replacing 
>) the wonting of puipqib 3 of tins oniric by the {oOowtagKXE 

"In dm dm imi t at i o n nri naplc m cntstjon of the btvesanent policy the board nay 
cause dte assets of my d*ss of dates bj be invested in scenario! lined an* stock 
exchange o* alba regjitaod marka nfaidi opemes icgalady «nd ii tecogniied and 
open to the public fa "Regnlaied Market - ; within the European Union and in 
nansfenM a or deah m on a atncfc tuknigr or Other Regnlucd Mattes 

Hu a lifying as aa Eligible Marfa* - ; 

b) the wonting of puagnqrb 4 and 5 or this ankle by the following text: 

“An Eligible Marfa* means any nock oxefcaage of Reprinted Market in Europe, 
Aria, Oceania, the American uto Abka"; 

d the wntdng od paragraph 7 of dussnicle by die following tejJ: 

-The eo mp any may bather invest up to 100 per cent of ih net assets in tniwfcnbk 
securities hsned or gaanateed by ■ Member State of the European Union, by is 
local nnhorirics, by a member slate ol the OECD m by public knanMkma) bodes 
ot wfakh one or note Member States of the European Union arc na a tt bea. subject 
to investing in sis Afferent tales tod securities from any one tare nts accounting 
dor mote than 30 per cent of the total amoant - . 

2. App o i n t m e nt a« snpphnn e n taty direciCTS ro the company of: 

- Keith M. Niven, Otahmu of Schroder Unit Trust* Limited and Director of 

SrfWfflVr ClWTTffVWtt! (* i ■» Landnn; 

- Steen Svcndsen, Managing Director of Schroder Investment Management 
(Scmufinavia) A/S, residing in Copenhagen; 

- u.n tdaosgiog DirecUK of Schroder Investment Management f t HiHiA n u tyJ 
SA» etmendy residtug in London. 

VOTING 

Resolution on the item of ibc agenda of tire EmnonUnary General Meeting will require 
, quorum ol SO% and a majority of 213 share holders present or represented ol the 
meeting voting in favour. 

Registered shareholders who cannot attend the meeting in penoo are invited to send a 
duly oompbaed sad signed proxy form to the regjsiered office of the company to atrfvc 
not later than December 5th, 1994. 

Prosy forma win be sent to registered shareholders with a copy of this notice and can be 
obtained by bearer shareholders at the registered office oT the ewnpaiiy. 

The Board of Directors J7(b November IW4 


To Tlw HoMars Of 
Banco Central rie Costa Rica 

US S86A11.115 Series A hrtnsMt 
Ctahna Bands Due May 21, 2005 

US 57M35£29 Series B Interest 
Ctrims Bonds Doe May 21, 2005 

NOTICE IS HEREBY BIVEH that the mm ol 
bssfssl tremNewmbwat. ISM msugti and 
Including Fobiuaiy 2Q. 1995 is 6. 75 it par 
annua. Iniarast coupon payable on 
February 2t. 1DS5 vrit amouni to Si J2S.7S 
par steo .000 nemtaat feea aottaait 


By Bant rim ari ca Mta u l Twat Company 
nsHxriAsta 
Datwt Nouambar 2i. IBM 


m 


U.S. $53,000,000 
BRNCR 5ERHN.5.R. 


Floating Rate Notes 
due 2000 

For ins lowest period trom November 
29. 1904 to May 30. 1895 the ran 
has bean determined at 7-3125*. per 
annum Tha amount payarie an 
May 30. 1995 pet U.S $500,000 
principal amount of Notes tad bo U S. 
S1B.4B4J& 


By; ha Owl 
Uaden,«9MBMt 

November 29. 1994 


o 


DO YOU WANT TO KNOW A SECRET? 

The LD.S. Gam SoRunar wl show you how the marinate REALLY work. The amazing 
tradhg tadriquBS of the togomtary WD. Qarr wn Increase yowpit** and contain your 
lossaa. How? TftaTs secrat Hhg on en OOBO o book your FREE place 




CITY 

INDEX 


BOO. 

^Sit 

The Masker Lcadn in iprad boring - finantiil tad Sports. For a 
txurim and u> BEscunl appEcatioa term eeH 071 281 U67 
Acoounu are nofinaSy opened nrithln 72 bonne. 

Sen our op-td-demprieei ke U oa Ttiuen papeeos 


A REUTERS lOOO IT? 

B 24 hours a day - only $100 a morRhl l / *v 

UVV WM ANC IAJ. DATA DB1RCT TO YOUR WC taps 

i - f m t ar rf fHf — .r 

nan uk gum man "**—■***— ew*4d«fiPTO 



HICNkEL 

LAURIE 

Tet DTI 493 TOO 
Fa* 071 499 4279 


We arrange loans up la 90K Lam to Value. 

Men emperitta; and fteohlr tern* fcr 
qualby UK cnmmereial piopeny A 

devriopmenb ttpwanh (if dm. 

Comacr Rfdwri mn Gdtua 


PROPERTY 1 

FINANCE 

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3245 

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2063 

32*6 

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2840 

3245 

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28*3 

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BJJ1 

022 

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0530 

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0*1 

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022 

9*0 

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0030 

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27*6 

30.16 

0700 

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35*2 

31.14 


3ZJB4 

27.78 

30*0 


33X7 

30.03 

32*8 

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DOW 

37413 

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1000 

37 M 

32.77 

35*0 

1030 

3 74TI 

3278 

36*0 

1100 

3320 

3278 

85410 

1130 

33.73 

3278 

85*0 

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32.74 

45*2 

48.75 

1230 

8U3 

48*2 

48.76 

1300 

32.08 

45*1 

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1330 

32j66 

3277 

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1400 

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1430 

30*3 

3270 

3857 

1600 

3083 

32.7B 

3S4S7 

1530 

30*7 

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3858 

1000 

334» 

32*8 

3874 

low 

75.74 

47*0 

92*5 

1700 

14080 

«*9 

EXL4T 

1730 

107*7 

100*4 

111*9 

1800 

138.78 

07*1 

107*3 

1B30 

73A4 

82.82 

68*5 

tan 

4B33 

4233 

53.15 

1030 

41J05 

48*1 

49*1 

2000 

38*0 

46.71 

48*7 

2030 

38*1 

38*0 

414B 

2V3D 

31JM 

32.46 

36*7 

2130 

31*3 

30*0 

33*1 

2200 

31*3 

3050 

33*1 

2230 

28*6 

30*0 

3231 

2300 

3040 

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1004 

2400 

8*0 

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up 15% 

off electricity 


0121 423 3018 

Powerline 





Sovereign (ForaxJ fid. 

24hr Foreign Exchange 


r Fax Service 
fct 071-431 9188 
Fac 071-931 7114 
42n taUegirem Mare Rkad 

leaden SNOW 0E 


CONTRACTS & TENDERS 


Cftnyeniine ^Republic 
SeneraJ fyidministraiion oj U^oris c5.(5. 

WIMPING UP PROCESS 
PUBLIC BID N g 494 

NATIONAL AND INTERNATIONAL 


TO SELECT A COMPANY OR AN ADVISORY CONSORTIUM in 
order to prepare a "PRINCIPAL PLAN" and a Project of "A 

PASSANGERS’ RIVER/SEA TERMINAL" for North 
Dock Area, Buenos Aires Port, Argentine Republic. 

PLACE TO OBTAIN AND TO RECEIVE 
INFORMATION OF SPECIFICATIONS: 

In the Manager's Office for Supplies (Acquisitions Division), 55, 
Esmeralda Street, 6th floor. Office N® 601, City of Buenos Aires, 
Argentine Republic, every work day, from 11 am to 15 pm 

SPECIFICATIONS PRICE : $ 1,600.00 

PLACE TO SUBMIT OFFERS: 

In Acquisitions Division, Office 601 of the above mentioned address. 

OPENING OF THE OFFERSs 

On December 16, 1994 at 11 am, at the Openings Bureau of the 
Manager's Office for Supplies, Office Nf® 602 of the above mentioned 
address. 


APPOINTMENTS ADVERTISING 

ajypeaisfo tffo UK edition every VfcdBesday & Thursday and in the hfrarnatfopat edition; 

evtery Fritfey?- ’. • • 

Andreiv Skar^oskf , on -1^47187^4854 * • . , ‘ 

■ • • ;• &51 •• J -“‘•T- .. -• 


PT PABRIK KERTAS 
TJIWlKfiVTIA 

us. $50400400 

Nofica i* hereby given ihcritfw 
Rats of Interest under the 
Interest Payment Certificate has 
been fixed at 6.5625% p.o. 
Together with the 1% interest 
under the Bond Certificate, the 
total interest payable on the 
relevant Interest Payment Dale 
May 30, 1995 in respect of 
U.5.$250,000 nominal of the 
two Certificate* will be 
U.5,$9458.16. 


November 29, 1994 

Of. Citibank NA Hong Kong, 

Agent Bank 

CITIBANC O 


INTERNATIONAL BANK 
FOR RECONSTRUCTION AND DEVELOPMENT 

US$250,000,000 FLOATING RATE NOTES DUE 2002 

toi accordance with the provisiona of the Notes, notice is hereby gtvan as 
talma: 

• Irterest pettad:Nkr«rnber 271^1^ to 30th, 1995 

• Interast Payment Data' May 30tti, T995 

• Interest Rata: 5.7825% per annum 

• Coupon amount US$294.53 per note of US $10,000 

USS244SJ28 per note of US $100,000 


Agent Bank 

























30 


f 




COMMODITIES AND AGRICULTURE 


Deficit forecast steadies 
London coffee futures 


By Richard Mooney 


A forecast from Colombia's 
National Coffee Grovers’ Fed- 
eration of a Mgger-than-expec- 
ted world supply deficit in the 
1995-96 season steadied coffee 
futures in London yesterday. 

The January futures position 
at the London Commodity 
Exchange, which last week 
dipped belov $3,000 for the 
first time since late June, 
closed $25 higher at $3,013 a 
tonne after touching $3,040 ear- 


lier in the day. 

Dealers said early buying 
had been encouraged by the 
Colombian forecast, which 
suggested that demand would 
outstrip supply next year by 
11m bags (60kg each). Higher 
green-coffee imports by Ger- 
many during August, com- 
pared with July, also helped, a 
trader told the Reuters news 
agency. 

Last week's $400-plus plunge 
to 52,870 a tonne Mowed news 
that Braz ilian coffee stocks 


were higher than most ana- 
lysts had estimated 
Over the previous two weeks 
the January price had slipped 
$320 after Brazil's issued an 
official assessment of its frost- 
and drought-damaged 1995-96 
crop that was broadly in line 
with market estimates. Specu- 
lators, confident that no fur- 
ther market shocks were immi- 
nent, began, selling their long 
positions; and the resulting 
lower prices attracted no sig- 
nificant roaster buying. 


Farm leaders attack set-aside delay 


By Alison Maitland 


British form leaders yesterday 
attacked the European Parlia- 
ment for holding up implemen- 
tation of a cut in the amount of 
arable land which European 
Union formers have to leave 
uncultivated as “set-aside” 
next year. 

Sir David Naish, president of 
the National Farmers’ Union, 
said that the procedural 
hold-up by the parliament in 
giving its opinion on the cut 
was causing farmers “delay 
and uncertainty”. 

Mr William Waldegrave, 
agriculture minister, agreed 
that the delay was “irritating” 
as it was becoming too late for 


fanners to make drilling deci- 
sions for next year. 

The reduction of 3 percent- 
age points to 12 per cent in the 
amount of land that arable 
formers have to set aside next 
year was agreed by EU agricul- 
ture ministers a month ago. 
But the parliament must pro- 
nounce on the -move before it 
can be implemented by agricul- 
ture ministers. 

Sir David said there was con- 
cern that the parliament might 
not give its opinion in time for 
the last agriculture council 
meeting of the year, in mid-De- 
cember. 

“Farmers and growers are 
consistently being exhorted to 
move closer to the market 


place.” he said. “But that can 
all too often turn into a night- 
mare in the business sense if 
the politicians indulge in ver- 
bal sparring of a kind which 
hears little reality to what is 
happening in the market 
place.” 

Winter wheat crops should 
mostly have been drilled by 
now, and many fanners are 
believed to have gone ahead in 
planting more land than last 
year on the assumption that 
the cut will be implemented. 

If they left the decision until 
late December or January, 
they would be restricted to 
planting lower margin variet- 
ies of wheat or crops such as 
barley. 


Gengold plans Oryx scale-down 


By Marie Suzman hi 

Johannesburg 


South African mining producer 
Gengold has said that it plans 
to scale down underground 
mining operations at its trou- 
bled Oryx gold mine pending 
further investigation of the 
reef. 

This follows the announce- 
ment earlier this year that the 
mine would probably need 
R950m (£l5Qm) in new capital 
on top of the R2fan already 
invested if it was to become 
commercially viable. 

According to the company. 


preliminary sampling has 
revealed unusual variability in 
the grade of the reef. In conse- 
quence, the mine will require 
an addition 2,000 metres of reef 
development to explore the 
area further and determine 
whether there is in fact an 
exploitable high grade channel 
within the main ore body. This 
development is expected to be 
completed by December 1995. 

As a result of the move, the 
mine's workforce will be scaled 
down from 3,200 to 1,200 
although Gengold plans to 
offer mast of the workers alter- 
native employment on other 


mines in the group. 

Gencor, Gengold’s parent 
company, has agreed to under- 
write the adiilH / miaI explora- 
tion at the cost of Rl2m a 
month. However this excludes 
financing costs and Gengold 
says it will seek further consul- 
tation with Oryx’s bankers. 

Meanwhile Gengold says 
that the initial R979m in inter- 
est-free loans provided by the 
mine’s major shareholders - 
Gencor, mining bouse 
Anglo-American, Investment 
group Genbel and financial 
group Saolam - will be capital- 
ised in the near future. 



FINANOAL TIMES TUESDAY NOVEMBER 29 19 * 4 


Australian coal industry faces ■ 

David Lasceiles reports on efforts to raise productivity and improve labom relations*;^^ , ; 

M 


A* 


t Bob Humphris, the 
chairman of the Aus- 
tralian Coal Associa- 
tion, describes this as “a criti- 
cal year” for the world's 
largest coal exporter. 

The industry, long hampered 
by poor labour relations and 
low productivity, is trying to 
shake off the past and protect 
its share of the booming 
Pacific rim coal market 

In the next few weeks, a 
joint govermnent-industry-la- 
bour council will receive the 
report of Mr Rae Taylor, a for- 
mer civil servant who has been 
studying the impediments to 
the growth of the Australian 
coal industry, and particularly 
to its exports. He is expected to 
highlight high production 
costs, poor labour relations, 
and other obstacles such as the 
government monopoly of the 
railway system. 

The employers and mine 
owners hope that this report 
will finally clear the way for 
the industry after years of 
labour confrontation. In their 
submission to the inquiry, they 
said: “Coal industry manage- 
ment has been trying for years 
now to break ont of these 
inherited shackles and atti- 
tudes, and to transform the 
industry into one more befit- 
ting the competitive environ- 
ment of the 1990s”. 

The submission pointed out 
that nanadfl and the US had 
higher productivity rates for 
thermal coal than Australia, 
and were raising it at a foster 
pace. At the same time, new 
producers are entering the 
market, notably Indonesia 
whose most expensive mines 
are lower cost than Australia's 
cheapest In coking coal, Aus- 
tralia has a stronger position. 




Australian minewarkers have threatened to 
disrupt export coal supplies unless companies 
wring a significant price increase out of the 
Japanese steel and electricity industry custom- 
ers in the annual round of price negotiations 
now getting under way in Tokyo, writes Nikki 
Tait in Sydney. 

The threat could herald a repeat last year’s 
experience when mfavew o rk e rs walked out for 
sevoul days in protest at the coking coal con- 
tracts and then held a second 48-boar stoppage 
over steaming coal price agreements. Their 
action prompted the federal g o v er nment to 
agree to an inquiry into the industry, conclu- 
sions of which are due to handed down shortly. 

yesterday, Mr John Maitland, president of the 
powerful Construction, Forestry, Mining and 
Energy Union, said that Australian producers 
“should not think of settling for anything less 
than [a] US$10 per tonne {increase]” and that 
be would not be prepared to guarantee the 


supply of export eoal if company 
fives could not negotiate a good price. - 

There have been some rumours that produc- 
es would be witting to take a rise of US$6 a 
tonne, but Mr Maitiafid said, that tins "would 
repre se n t no real increase at all in Australian 
dollar terms”. _ 

Last year, producers accepted prick ea ts of 
about 8 -per c art in US dollar terms - with 
prices of hard coals . fidttK by US$4 a 
tonne. However, the Australian do llar has 

gained' grou nd affhat the PS emtowy over the 

past £2 mantes. 

Coal is Australia's largest export category, 
and toe price agreements with tile Japanese - 
negotiated annually - are used as a priOMetter 
for the industry. The cnts -agreed last year In 
the wake of big financial problems far the Japa- 
nese steel mfOs and. threats of undercutting by 
Canadian producers, represented the fourth 
successive year in which prices had faQen. 


producers $lv8d to 
tonne . 

Queensland, for "MchJ 

final go ahead Is L 

gtan unto, after the 

turn Rome out. One®. 






^ t 


---- - lf 




•vai AP 
rtf** 




but the submission warned: 
“The North Americans are ach- 
ieving big gains in productiv- 
ity, and are in the market 
looking to expand tonnage sub- 
stantially". 

The labour organisations, 
not surprisingly, dispute these 
claims. The mine workers 
union blames the Aust ralian 
industry’s high costs on poor 
management, and its tow prof- 
itability on the failure of com- 
pany negotiators to obtain the 
best prices for coal, particu- 
larly from the Japanese. Ear- 
lier this year, a dispute on this 
issue led to walk-outs by min- 
ers, and unions are threatening 
further disruptions in the lat- 
est round of price negotiations. 

Whatever Mr Taylor has to 
say. however, important 
changes are already afoot 

In a major departure, the 
special labour tribunal which 
has existed for the coal indus- 
try since the last war, is due to 

be Hnlrrai to the matnafrrflam 


industrial relations tribunal 
next July. Tbs old tribunal, 
from which there was no 
appeal, was widely seen as an 
encouragement to zolnewoik- 
ers to consider themselves 
“special*. 

Nor is the sense of crisis 
which the coal owners seem 
keen to foster reflected, closer 
to the ground. 


L! 


ast year, the industry 
produced a record ISQm 
'tonnes, and exports, at 
ia%m tonnes, were also toe 
highest ever. That marto coal 
the largest single contributor 
to Australia's foreign earnings 
with nearly $A8bn (£3JSbnj. 

The coal industry also 
some major evpnngiQ n plans 
afoot Shell, the third largest 
producer after BHP and CRA, 
is heading a consortium 
including Japan’s Marubeni 
and Showa that is investing 
jiffOw in a new onderground 
mine at Darfbrook in toe 


Hunter Valley. The wibm wjU 
produce about &5m tonnes a 
year, largely for export to fo r- 
eign electricity utitttias, begin- 
ning- in 1996. 

Shell stresses, [however, that 
heavy investment in Dartbrook 
is ordy possfoie because it has. 
a very thick seam (an average 
&8m> capable of being mined 
with the most. modem high- 
capacity, langwafi equipment 

“ Marg ins in coal raining are 
slim, investment in 

new jrArtpn difficult unless you 
have super geology. We have 
that at Dartbrook," says Mr 
Gordon Sommers, Shell's gen- 
eral manager for coaL , 

The mine is also strategically 
located on the railway con- 
nected to the modem coal load- 
ing te rminal at NeweasQe,. 
about 200km north of Sydney. 
The government of New South 
Wales recently agreed to open 
toe line to competition from 
private hashers, a move which 
it e st im ate d would save coal 


report has come out 
Moranbab, a coking " 
wiara^tonn^ayw«w 
fty, where an . investment 
j270m is foreseen. If 
started in esrfy j**!?*S 
be producing in MJk 
cadis Theodore, which worafl 
expert 4m tonne* of thenma, 

coat 

ironically, same tf the. new 

investment may have been 
triggered by the uncertainty 
s a r ro un ding toe future of the 
industry, ff tor changes are 
indeed on the way, they should 
create new opportunities Stir 
those who can seize thenL^-. 

Mr Humphris says; “Before, 
we all travelled at same rate 
because of .toe restrictions on 
toe industry. Now. toe smarter 
companies are going fo do bet- 
ter”. .’ • 

But there is also a se nse th at 
prices are recovering 1 from a 
three-year slump/which took 
them down by 20 per cent or 
more, and that long term 
demand prospects are good-in 
the region. Large purchasers 
like Japan, and Korea see 
Arrian rt growing, <and new..cns- 
tomers such as Thailand and 
India are stirring, s. 

According to Mr Hu mphris . 
there is no “Euro-styte swing 
away from coal" in the Far 
East and Asia. 

Were it not for concerns 
about “greenhouse* gases and 
the environment, he believes., 
that coal would be “on .the 
verge of most exdtingr axpatK 
skm in history*. * 


MARKET REPORT 


Nervous selling hits prices at London Metal Exchange 


A bout of nervous selling and 
liquidation hit ail Loudon 
Metal Exchange contracts yes- 
terday afternoon and only 
COPPER found support before 
the end of toe session. 


Three months delivery TIN 
lost more than $200 a tome, 
while ALUMINIUM was down 
$65 and ZINC 540. 

“They lost some of their 
upward momentum last week 


and this was mong ft to get 
anwiP investors to li ghten their 

load. . . it just snow-balled,” a 
trader explained. 

Ahmnnznm was tot in a thb? 
lunchtime inter-office market 


by US selling, which took, tire 
three months price. ; below 
$L880 a tonne, triggering stop- 
loss setting down to $L827. 

At the London Commodity 
Rrrhangfr COCOA fbtnres ran 


out aTsteahi to dose' toairfy 
-. lower us- trade setting to New 
York triggered - mixed selling 
and - stop-losses Ed London, 
dealers said. ■ 

CompfiedfromReniims . - 


COMMODITIES PRICES 


BASE METALS 


LONDON METAL EXCHANGE 

(Mobs from Amstgomsted Metal TracSnfl) 


Precious Metals continued 

■ pom CQMEX (100 Troy <ra Srtroy atj 


GRAINS AND OIL SEEDS 

■ WHEAT LCE £ per tonne) 


SOFTS 

■ COCOA LCE (SVtonne) 


MEAT AND LIVESTOCK 

■ UVECATTIfCUEHaOOOftKcanMW 


Sat* Daft 


Yd. 


SW» Oafs 


price dwige Klgb Urn 


opra 

H 


Yd 


am Deft 

price ctaBi Ifigb low 


Open 

M 


W 



Ceeh 

3 mttts 

Ifa* 

3829 

-1 3 

- 

- 39,668 

34534 

Jaa 

104*5 

-055 

1(5.00 

104*0 

1*41 

86 

One 

950 

■23 

973 

948 15*37 

963 

Dae 


Dec 

3829 

-1* 

3847 

382.7 

- 

taw 

106J0 

-040 

10775 

10570 

1*57 

52 

Mar 

961 

-27 

988 

958 42.499 2*07 

Mi 

O0M 

1833-* 

1850-1 

Jan 

3844 

-1* 

• 

- 53*11 

15794 

■My 

10570 

•540 

1097S 

10575 

1*49 

105 

May 

967 

-24 

9® 

964 15102 

878 

far 

Previous 

1872-3 

1887-8 

Fab 

3857 

-1J 

3855 

3855 13*45 

813 

M 

110*5 

-525 

• 

- 

1® 

- 

Jd 

974 

-2* 

1005 

972 8*00 

176 

Jan 

IfigMow 

1891/1830 

1912/1824 

far 

390* 

-1* 

391* 

390.7 18.437 

1*72 

Sw 

9«75 

- 

- 

- 

as 


Sep • 

985 

-25 

1015 

985 13*35 

1® 

ADD 

AM Official 

1830-905 

1902-2* 

Joe 

394* 

-1* 

3950 

394.4 11,1® 

18 

Nov 

9500 

+0*5 

9500 

9800 

787 

- 

Dec 

1002 

-24 

1020 

1003 10.174 

54 

Oet 

Kert> dose 


1828-9 

TOW 




T73,1» 56*17 

Total 






249 

Total 




112*74 4*87 

Total 


Open W. 258,110 

Total deity wnorar 66.884 

■ AmMNBJM ALLOY (S par tonne) 


■ PLATINUM NYMEXpOTtay ou MrayaeJ 


■ WHEAT CST (5,000txi irtn; centa/BOta bushel) ■ COCOA CSCE flO tomes; SrtonnesJ 


S«fl OajrV Opm 

price damp A* lev tat 

67.825 4US0 67 £0Q 18*67 

87.775 +OL100 SUED 67*00 25*81 
6X800 +0225 BU75 BBSS 17.385 
64*25 -*0050 64775 64X75 5*97 
82*75 -*0050 8X300 62730 2*79 
83*00 +0*25 S3J50 6X450 BOB 56 
78^787 15*8> 
■ LIVE HOQ8 Qyg (40 JOOtb^ cena/faa) 


5*18 

7*19 

1*56 

SO 

167 


Ctoee 

Previous 
Hghtow 
AM Official 
Kerb das* 

Open ht 

Total deny turnover 
■ LEAD $ per tonne) 


1805-10 

1840-5 


1835-40 


3,044 

789 


1838-40 

1873-5 

1875/1850 

1870-75 

1820-30 


6S2*-3* 

888-8 


8885-705 


CJoee 
Previous 
HigMow 
AM Official 
KartJ dose 

Open InL 44*10 

Total daBy turnover 12*55 
■ fSCKELff per tonne) 


870-1 

884-5 

8881880 

887-7* 

660-1 


7570-75 

7820-30 


7680-70 


Ctoee 
Previous 
Hgh/tow 
AM Official 
Kerb dose 

Open W. 87*08 

Total tWI y turnover 14*84 
■ TW $ per tonne) 


7885-700 

7745-8 

78107B10 

7795-800 

782543 


Jaa 

4152 

■22 

412* 

4®* 14*08 

1.1® 


414* 

-22 

416* 

413* 

82® 

294 

Jri 

4155 

-23 

4155 

419* 

1*64 

129 

Oct 

422* 

-22 

• 

- 

816 

283 

Jaa 

4255 

-23 

• 

- 

12 

- 

Tote 





75*® 

1*« 

■ PALLADIUM NVMEX (100 TioyouSriroycK.) 

Dec 

1S5B6 

-1^0 

154.75 

15325 

1*25 

242 

■tar 

15535 

-1-10 

158® 

15625 

*115 

334 

Jen 

15635 

-1.10 157.® 15675 

578 

1 

Sap 

157.10 

-1.10 157® 

157® 

98 

- 

TObl 





7*14 

677 

m SEVER COMBI (ISO Tray oz.; Cwrra/troy ozj 

Nov 

BIOS 

-57 

515* 

5160 

1 

_ 

Oao 

510* 

-32 

5160 

510* 33,454 19*82 

Jaa 

5157 

-4.1 

618* 

517* 

n 

- 

taw 

619* 

-LI 

SU* 

518* S6446 132® 

■w 

5261 

-4* 

531* 

S2B* 

5*32 

119 

Jri 

631A 

■4* 

*36* 

831* 

9*S5 

3® 


Dae 


♦2/2 380/0 38BID 12,185 1.721 

+»0 383/D 3800 35*86 4*01 

+2/0 387/4 385/6 5*59 

+04 33*4 337/4 11*18 

♦1/0 344/0 344/0 524 

+1/8 39*0 354/4 163 


387/8 
■hr 38212 

K»f 387/2 

M 33*4 

Sap 344A 

Dae 35661 

ratal 85*21 7,777 

■ MACE C8T (5*00 bumfci; cente/568> buahel) 


Dec 


649 

906 

59 

21 


1247 

-35 

1287 

1Z41 

950 

381 

Dec 

31*78 

-0475 32.100 31*25 11*02 

1*® 

1275 

-41 

1320 

1272 44*16 6*00 

ft* 

3*225 

-0*25 34*00 34100 IXS4 

1®B 

1302 

-a 

1343 

138 

0.4® 

345 


36250 

-0*75 35*60 ®*50 

61® 

3® 

1329 

-33 

13® 

1329 

3*75 

37 

Jm 

40*75 

-0*73 41®0 46475 

3.4S2 

209 

1353 

-33 

1370 

1370 

1*80 

11 

ta 

46825 

-0*50 <1*00 402® 

901 

60 

1383 

-33 

1415 

13® 

41® 

10 

oet 

36750 -0.150 33*00 38.758 

888 

81 





71*® 7.1® 

TOW 



®*Bt 

3*40 


Or 
TOW 

■ COCOA 0CCO) (SCR-a/tanna) 


■ PORK 8ELLIES CUE (4H*00bs; centa/IW 


212 12 
223 « 
230Q 
235/D 
2400 
24512 


■ 213* 2120 55,169 13*43 

- 2240 2230105*00 15*08 

■00 23m 2300 38*43 2194 

- 236/2 234/6 45*01 11® 

- 2410 2400 1977 BO 

4*2 2480 2450 22*08 915 

TMri 271*38 35,711 

■ BARLEY LCE (E per tonne) 


Wf 


Price 
- m 


dar 

m 


ft* 


■ COWS LCE (Sftoene) 


Total 


137*88 34*34 


ENERGY 

■ CRUDE 09. NYMEX (42*00 US flafla. S/baneQ 


Jan 102® +0.10 

_ 

- 4® 

Mar 10450 +025 

- 

- 13* 

■ta - 108*5 

- 

44 

tap 942S -073 

- 

30 

taw 95.16 -0.15 

- 

91 

Total 


749 

■ SOYABEANS tsr(5®Q8u min; nta/GOta tnriri) 


taw 

29® 

+68 

2980 

2950 

1® 

36 

Jae 

3013 

+25 

3040 

2990 

10807 

1*37 

taw 

2SS3 

+7 

2990 

2940 

8*87 

1.152 


2923 

+« 

29® 

2920 

4*60 

96 

Jri 

2900 

■3 

2830 

2900 

1*75 

73 

Sap 

2878 

-13 

2898 

2908 

2*19 

25 


Frit 


asjoo -flaoo 30200 35300 7*11 90s 

36*25 -0325 30325 35*00 1*92 51 

38*50 -0,425 37*08 30800 487 43 

38.150 -0.150 38*50 37*50 S» 34 

38*00 - 37*00 38750 111 3 

44*00 4**® 44*00 1 1 

S*B 1*® 


Of broking and jobbing UuPeUbDtZfmj, 

See haw srvectfy hepuls your word onto band. 

■.r.L, 9UOta»& 


JOTTER PAD 


CROSSWORD 


Tatri 


28*02 2*» 

*C* CSCE (37£OOfce; oanta/Bie) 


LONDON TRADED OPTIONS 

Strike prlo* 9 tonne — CaBa — — Puts-— 
■ ALUMBCUM 


No.8,623 Set by GRIFFIN 


Close 

PreMoua 

h90i/lm, 

AM Official 
Kert> ctoae 
Open htt. 

Total daRy Hanover 


8045-55 6130-40 

6125-35 6205-10 

6150 8240/8030 

6160-80 6230-40 

8020-40 

23*35 

3*70 


Ctoae 

1109-10 

1137-8 

Previous 

1142S-3* 

1189-70 

rtgft/taw 

11466 

1177/1129 

AM Official 

1145-8 

117*5-4* 

Kerb dose 


1127-8 

Open Jnt 

109248 


Tetri daOy turnover 

21299 


■ COPPER, 0Mle A (S per tome) 


Close 

2858-8 

2883-4 

Previous 

2857-8 

2827-8 

Hlgh/tow 

2881/2380 

2850/2806 

AM OlOotai 

2880-82 

2842-3 

Kerb dose 


2817-8 

Open W. 

239.686 


Total daBy tunover 

68*71 


■ LME AM Official £/S i«tK 1*821 


LME Closing Vi rates 1*828 



SpaeT*B2S 3ntbsi*82l 8 ratal .5810 8nBee1*597 
■ IWI GRAPE COPPBUCOMEX) 




ten 

orm 



Qua 

ataega Ugh lew 

H 

W 

tea 

13170 

+1® 133*0 131® 

332 

1® 

Dao 

131® 

+085 134® 129.70 16,707 

8,848 

Jan 

130*0 

+1,45 130*0 (29® 

1*23 

59 

tab 

129® 

+1.7S 

7tt 

13 

Mar 

127*5 

+1® 129*0 126® 20587 

6*21 

Hr 

128,00 

+1*5 1Z7*0 125*0 

679 

62 

To® 



54,174 15,770 

PRECIOUS METALS 



■ LONDON BULLION MARKET 
(Prices suppBed by N M Ro&wchfldJ 





Lriast 

Itafa 


opra 



■rice 

ritaage 


law tat 

Vd 

Jan 

18.11 

-084 

18.19 

1806101*20 47*89 

FM 

18.10 

-0*5 

1816 

1804 »*81 

20*23 

Mr 

16*9 

-004 

1815 

1884 31*96 

8710 

ter 

18.11 

0 

1812 

1806 17,714 

1*5D 

taaj 

ib*6 

-0*1 

1809 

1805 15*06 

1.753 

Joe 

lana 

+801 

13.06 

18® 27*00 


Trial 




379*83 32*43 

■ CRUDE CNL IPEfStearraQ 




LriBri 

nqri 


Of* 



■rice 

■ten 


taw U 

W 

Jan 

17® 

-087 

17.17 

17® 90731 

12J57 

Fab 

1684 

-087 

17® 

1890 37*77 

8<84 

Mr 

18uB5 

-087 

1889 

1879 15*63 

681 

ter 

1877 

-007 

1879 

1673 6*40 

98 

»ta» 

16JS 

-aw 

1877 

1873 4*BB 

248 

Jm 

1873 

-0*8 

W.73 

1871 8(71 

- 

Total 




189*82 18*01 

■ HEA1MG OH- NV1CX (42*00 US grita; c/US gata) 


UM 

D*/a 


to* 



ptfca 

cteagc 

H* 

lew tat 

Vri 

Pao 

a 45 

-ac 

50® 

5030 18750 20,138 

Jan 

50*0 

-044 

51*6 

50® 48578 20*92 

frit 

51.48 

■0® 

51® 

57*0 2S.7S6 

S*40 

■tar. 

61® 

-031 

51® 

61® 18426 

3.487 

fa» 

50*0 

-aw 

50.70 

5850 9*13 

819 

“»T 

50.10 

-0*1 

50.10 

50,10 5,172 

219 

TOW 




180*04 58327 

■ GAS OR. PE (Mama) 






Sett 

IfayV Op® 



P*» 

riraapa iftta law M 

vet 

Dae 

151® 

•1*5 1S1JS 151*0 31*89 

4*14 

Jaa 

15850 

-t2S 154® 15325 24,787 

2*51 

M 

155*0 

4.75 155.75 15100 15J2S 

2.195 

■tar 

166*5 

475 158*0 1SJ5 10*78 

518 

ter 

154.75 

450 155*0 154J5 3*57 

75 

taW 

194® 

450 - - 944 

- 

Total 


94*82 

9*68 

■ NATURAL GAS WNEX (10*00 BHAu Sffinffita} 


Jm 

S73M 


578*4 

568/8 54962 10219 

(tar 

68341 

+5/4 

568/0 

578/0 30*20 

2,130 

«te» 

5BW 

+M) 

593/D 

58641 15*09 

881 

Jri 

596/4 

+4ffi 

997/0 

591/0 ZL779 

1*41 

*■8 

697/4 

+4ft 

598/0 

594/4 1*05 

91 

sw 

597/2 

+3/B 

GOOD 

594/4 1*63 

14 

T rial 




134*9 15*00 

■ SOYABEAN OB. CST (B0*Q0faK centa/89 

Oao 

29.10 

+438 

28*8 

28*7 22*52 

4*87 

Jm 

28.10 

+439 

28*8 

Z7JB 32*95 

5*94 

Mm 

27*7 

+444 

27*5 

2470 23*63 

2*31 

«a» 

2610 

+433 

28® 

26.75 16*B2 

1*20 

Jri 

25® 

+423 

25*5 

26.10 10,024 

996 

fata 

24*5 

+425 

26.10 

24® 2*66 

90 

Tatri 




m 713 15*29 

■ SOYABEAN NEAL CST (100 tans; S/ton) 


Hoc 

1600 

. 

1645 

169.7 18,194 

4*29 

Jm 

161* 

+41 

1624 

181* 27*53 

5*49 

mm 

1650 

- 

165* 

164* 22*91 

2*37 

■ay 

mi 

+42 

168* 

1848 11*29 

1*51 

Jri 

173* 

+43 

174* 

172* 11*35 

1*52 

A® 

ITS* 

+43 

178.1 

175* 2.426 

97 

Trial 




101*48 15,149 

■ POTATOES 1X6 (E/tonne) 



■tar 

pvi n 

-21* 

• 

_ 


Km 

265* 

.240 

289* 

265* 1*24 

253 

taw 

282* 

-215 

- 

2 

- 

Jm 

250* 

- 

• 

- 

- 

Total 




1|32B 

253 

m PRBQHT (B/FFEJQ LCE (SlCWnttox Point) 


Mar 

1910 

. 

1811 

1911 240 

12 

Dec 

1955 

+26 

1950 

1948 382 

18 

Jan 

1885 

+30 

1865 

1845 1,171 

177 

•W 

175S 

+20 

1756 

1760 1,110 

49 

Jri 

ISIS 

+11 

- 

- 148 

- 

Oct 

1638 

-12 

- 

17 


Trial 

Gtoaa 

fte* 


3*73 

w 

BR 

19M 

ms 





16025 

185.10 

167.® 

170*0 

171*5 

17215 


+1® 181*5 158*5 580 3® 

+!. 55 18840 161*0 17*57 0,764 

4-1*5 188*5 164*5 8*82 1*9 

+3*0 170*0 107*5 2*39 338 

+175 171*5 189*0 1*47 2® 

+2® - - 871 117 

Total 2MD2 8,187 

■ COFFffiflOT) (US atntatoeund) 


Genp.taflr 

15 1 


Price 
_ N/A 


. N/A 


Pre*. day 
WA 
HA 


■ NOT PREMUM RAW SUOAR LCE (esnu/ta) 


13*0 

1470 

1545 +OBB 
15*8 +0*5 


■ RWTE SUGAR LCE (Sfionnej 


9C 

885 

450 

1*® 


Od 


420*0 +10*0 422*0 408*0 11.1® 2*01 
413*0 +10.10 414*0 39640 4,448 562 

401*0 +820 400*0 388*0 3*55 628 

370*0 +8.00 384*0 357*0 1*55 77 

Bee 884*0 +4*0 354.40 353*0 1W 40 

Hta 364*0 +4*0 - 199 

T«ri 21*05 3*® 

■ SUGAR *11* CSCE (112*OObe; cents/toa) 


(98.786} LAC 

Fan 

May 

Feb 

May 

ireo 

128 

153 

48 

88 

1800. 

97 

157 

70 

111 

1850 

73 

105 

95 

138 

■ COPPER 





(Qreda A) LME 

Fab 

May 

Fab 

May 

2750. 

152 

124 

70 

151 


184 

104 

92 

180 

2890 

100 

88 

117 

211 

■ COFFEE LCE 

Jan 

Mar 

Jan 

Mar 

3000. 

131 

204 

118 

251 

3050 

125 

186 

148 

283 

3100. 

.120 

170 

177 

817 

■ COCOA LCE 

Mar 


Mar 

May 

950 

6 

48 

3 

36 

975 

• 

88 

22 

32 

1000.. 

118 

26 

93 

67 

■ BR6NT CRUDE IPE 

Jan 

Apr 

Jan 

Apr 

1600 

110 

122 

3 

43 

1860. 

67 

82 

18 

70 

1700 

38 

87 

32 

91 


LONDON SPOT MARKETS 

■ CRUDE OIL ROB (per barrel/ Jen) +or 


Oil 


15.16 +0*7 15*5 14*7100*5912*87 

1510 +0*0 1518 14*B 33*81 5*19 

14*4 +048 14.75 14*8 20*39 2*73 

1194 +042 11® 13*5 18*71 3*39 

>ar 1527 +023 1126 13*3 5478 323 

■tap 12*4 +0*7 1291 12*3 707 1® 

Total 180*9124*® 

■ CflTTOW MVC£ gftOQabS Mrtg'Ttej 


SI 588-6. CJ8z -0*25 
Brant Btand (dated) 918*2-594 -0045 

Brent Stand friar* 917.07-7.09 -0*95 

W.TX (1pm e»0 918*2-504z +0*2 

6 OIL PHOOUCTS NWE prompt dafivay OF (taring 


Rankin Saeoflrw 
QasOd 
Neovy Rial 08 


Dec 


Quid {fioy azj 
Close 
Openinfl 
Morning fix 
Afternoon ftp 
Day's High 
Days Low 
PmvfetacfcM 


S pries 
383.80-384*0 
384.70-385.10 
384.70 
384*0 

385.00-386.40 

383/70-884.10 

384*0-38510 


foq®r. ^ 


245287 

248*70 



lalari Day 1 * 


OP* 



latae ctaraga 

B* 

Low 1 tat 

9ri 

Jn 

1*57 JL015 

1*10 

1*51 32*70 

8*07 

Feb 

1.875 

1*10 

1*70 1*299 

3.488 

Urn 

1*40 -0*01 

1*80 

1*38 14,113 

BO 

A»r 

1290 -0*87 

1210 

1*85 7*39 

427 

■w 

1.795 -0*01 

1*05 

1.790 7*34 

234 

Jte 

1*00 +000? 

1*05 

1.79S 6*80 

ISO' 

Trial 



129*« 15*82 


7585 +3*0 77*5 7550 2*87 M2 
*w 7578 +2*0 7578 77J3 30*06 3*88 

Hta 79*3 +2*0 70*3 7920 8256 618 

Jri 80*3 +2*0 80133 79*0 5*02 332 

OR 72*8 +1*7 7510 72*0 877 

Dec 71*5 +0*0 71 AO 70*0 3*09 1® 

TOtri 58*19 8*81 

■ ORAMOE JUCE NYCE (ISJOOfcs; centeflbg) 

Jee 106*0 

Mar 11050 

Bar 113*0 

4 

77 


91 71-173 
9152-163 
998-101 
9179-188 
Jet Aral *171-173 

Diesel 9167-158 

ftMunAps r*L Lm*vr pm 358 ersz 
■ OTHER 



-as 

-a* 


■ UNLEADB) QMOUNE 


1 month , 


2 months 

3 months 
38eer Rx 
Spot 

3 months 
8 months 

1 year 

QoMCota 
Krugerrand 
Maple Leaf 
Now Sovereign 


A96 6 Mentha . 

4A7 

imex (42*00 118 gate; cflJS flBb) 


*.io 12 months 

6*2 


um 

Itafa 


Opra 


*,77 



Price 

efaege 

m 

Low lat 

VW 

prtroy 02. US eta eqriv. 

Dec 

55*5 

+028 

98.45 

55® 14*25 12*94 

330.70 

517-15 

JM 

5525 

- 

&75 

56*0 25*52 11*43 

335*0 

524*6 

Feb 

55*5 

-0*1 

55JS 

5525 12*02 

0*11 

349*5 

632*0 

■tar 

55*0 

+0.08 

50*5 

56.90 6*20 

2,157 

353.75 

551.75 

ter 

58*6 

•008 

59*0 

5820 8*05 

1*SB 

S price 

£ equfc. 

Hfay 

57*0 

-0® 

57® 

57® 2*80 

455 

389*0089.00 

247-250 

Trial 




73,180 3E383 

395.40-397*0 

• 







90to 

58-81 








tea 

The Tea Order's Association reports good 
denwid. Cdoury saaoms sold mB an d prices 
apprec iat ed 2 to 4 pence, hoeraw, planer 
North Indians wore tan to 5 pence lower. 
Bright raid cdouy East Africans eased 6 to 7 
ponce but medums remaned My Ton. Cey- 
lons. were weB supported with brighter types 
eteady and ptafcier teas often deser. F®V 
good convftiftn but M easier rates. Quota- 
tions; Bed antsUe 17Sfv*g. nom, good 138e/ 
Vg.. good modlwn 120pAg., medtum HOp/kQ^ 
low msdum «3t»1qj. TTw Wgtwsf price reafeed 
Ms week was l8Gp far an esam 


-1*6 108*5 105® 13*86 2 

-1® 11235 108*0 6,143 420 

-1*6 11550 112*0 1*12 3 

118.70 -0*0 115*0 116*0 1*30 

118*0 41*0 121*0 119*0 1,709 

-0*5 11510 11510 1*18 

a#* 


11510 


VOLUNE DATA 

Open Merest and touna data enawn far 
contracte traded on COMEX. NYMEX, CST. 
1WC& CM6, CSCE and PE CRids 01 are one 
day In arrears. 


INDICES 

■ REUTERS (Bese; 1UW31s10Q 


Aov 26 Nov 25 montti ago year ago 
2145* 2142* 2105* 1627.7 

■ cmfttaraes (Base: 1967»10Q 


Gold (par troy 
S»wr {per tray tiff 
PiattnuRi 4>er troy at) 
Pata&m ftwr troy ccj 

Copper (US prod) 

Lead (US prod.) 

Tin (Kuala Lumpur) 

Tin (New YoriO 
Cette (Sv« 

Sheep ftfcre weightft^ 
r«s(lve wetf<9 

Lon. day auger (raw) 
Lon day augw {wl^ 
Ta» & Lyte export 
Bariay png. feed) 

Maize (US N03 Yelow} 
Wheel (US Dafc North) 
Rubber 
R>faber(Jai)f 
RUXar (KLRSSN01 Jut) 
Coconut 08 PUS 
Pafcn 08 (MriayJ§ 

Copra (PW)6 
Soyabeans (US) 

Cotton OuttookW indw 
Woottops (04s Super) 


9384*0 

-0*5 

eiasc 

-*jo 

5409*0 

-1* 

5154*0 

-ats 

135*C 


40.75c 


15*flr 

-004 

281 *C 


1 1BJIp 

+1*8* 

107*8p 

+o*tr 

7S*1p 

+&S3* 

£309*0 

+220 

5420*0 

+3*0 

£346*0 

+2*0 

Ung. 


£lS2*r 


£185l0v 


OUJOp 

+1* 

90*0p 

+1* 

3506m 

+1* 

STZELOq 

+6* 

$7S2*U 

+17* 

5464*q 


£168* 

+1* 

79.10c 

+0.10 

464p 

+4 


ACROSS 

1 Film Elvis Presley with cross- 
word compiler 0,43,1) 

7, 20 He took part in one (3,7) 

9 Name district without a sta- 
dium (5) 

10 Cover man in train crash (9) 

11 A gas expert, yet Len is 
wrong (9) 

12 Unsuitable writer cones hat* 

in it (5) 

13 Tempts with diamonds an 

eccentric sent round CO 

15 long pole superfluous for a 
time (4) 

18 Deborah appears in i, 28, 29 
and “The Locker Room" (4) 
20 See 7 across 

23 Appropriate American to hold 
ringleader op (5) 

24 Has been a test sort of jollifi- 
cation 

26 Having transposed tone hunt 
round fix 1 singer <g> 

27 Play with a tot first {5> 

28, 28 Film Edna at broadcast 
with feeling <3£S) 


DOWN . 

1 KL 5® requires about 
baked Items (8) 

2 Even the new student entered 
date (8) 

® always goes around 

4 Understands modal girl's Into 

boastful teHrfrtg ft) 

5 Bloomers here tend to' be by 
tofosport system (7) 

6 opposed to give May a ring I 

designed©) - 

7 “re 2 wooded 

vauey turned up (6) • 

8 SSSSPLiff.wt.. 


14 

soWiKs©) .r 

le PPcfo re hint about man’s 


Nov 25 
231*5 


Nov M 


RMitfi ag 
234 AS 


W 


C par am wfara ottrawln tasari. p panotflB. C ran(M5 
r itateflia. m Uriwehri caraWta y talMw. v NtaDn. u 
OKrtaataUKf Ural* Ratasal SOFBtaw- 
dam. * ftreon mata does. 8 Swap fare welghl priwM- “ 
Change on we* O Prices ore tarprarigrt rira-t- MOV 
9* Cancarl flgwe tar WT1 $17*0-792 


it ifirn ten volunteers into sea, 
tomewhoe in France (8) 

18 . JSP* ““wound soring 

hack! (?) ^ * 

20 ^SS 01 ^ «*»wtag 

courage (7) 

21 <»Wle. ring ft about 

wo ft! 51 ® for toe audience C® 

22 hwa 8Sked ab °te »ticte 

28 Bored when served food th an 

reroplans? (a jtj 


Solution to Saturday's prize puzzle m, „ - 

Solution to yesterday’s 


i-- 


,s +* 

. : ,aii 




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jt- 


pivideii 

hope 

pecs 





- re* 


r- - 


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11?: • 


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:i.+A+ 

wfapta 

XW- 9- 


ir-5 HC rv NCI l IW9 

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27+1 

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cl a l H\ehan°e 

y 












FINANCIAL TIMES TUESDAY NOVEMBER 29 1994 ★ 


31 


LONDON STOCK EXCHANGE 


MARKET REPORT 

Equity market in good shape ahead of 


By Steve Thompson 

London market continu ed its 
re h a bil itation process yesterday, 
and was supported by renewed 
steadiness on Wall Street, where 
the Dow Industrial Average built on 
Friday's good performance. 

Aiding the domestic market's con- 
fidence was a growing feeling that 
the government would comfortably 
get its Eli contributions bill 
through the House of Commons last 
n ig ht . And with the political wind 
said to have shifted in the prime 
minister 's favour, there was a 
better feeling around the markets in 
terms of the Budget. 

Dealers were taking the view that. 
the market's recovery boded welL 
“Although you can never be sure, ft 
seems unlikely that there will be 
many downside shocks in the Bud- 


get, judging by the market's perfor- 
mance today," said one. 

The FT-SE IDO Index ended only 
marginally below the day’s best and 
a net 13.6 up at 3,047.1. There was a 
similarly strong showing from the 
market's second-line issues, the 
FT-SE Mid 250 Index settling 9.7 
firmer at 3,490.0. One area of disap- 
pointment was the level of business 
in the market, which remained 
depressed after the recent heavy 
losses and amid persistent fears of 
further big retreats by the market. 

Turnover, although boosted by at 
least two programme trades, one 
very small and the other of medium 
rise, reached 560 .6m shares. Non- 
Footsie turnover accounted for 
350 An, or 63 per cent of the total. 
The Stock Exchange revealed tiwt- 
customer business last Friday just 
about crept over the £lbn IeveL 


The Footsie began the session on 
a firm note, up 5.4, and moved 
ahead steadily as some of the more 
optimistic fund managers picked up 
what they perceived to be cheap 
stock ahead of the Budget 
Marketmakers, still traumatised 
by last week’s steep fells, ware said 
to have been running level to &ort 
books and ware quick to lift their 
dealing levels at the appearance of 
any meaningful dumar^ 

The early wave of buying interest 
drove the Footsie up to the day’s 
high. 3,049.5, over lunchtime, but 
interest subsided thereafter, as deal- 
ers began to manoeuvre their trad- 
ing books to mostly level positions 
in front of the Budget 
Wall Street extended last Friday’s 
recovery trend, moving quickly to 
record a 30-point gain on the day, 
before slipping off to show a rise of 


20 points an hour and a half after 
London had dosed. 

Although preoccupied with the 
Budget, equity trades is London 
will have to keep a weather eye on 
Wall Street, which has to deal with 
a long list of important economic 
data this week. The numbers 
Include a final revision of third- 
quarter gross domestic product, 
expected tomorrow, the highly 
regarded National Association of 
Purchasing Management index , due 
on Thursday, and Friday’s employ- 
ment report 

Strategists said that any rise 
much in excess of an expected 
increase of 225^00 in US non-farm 
payrolls could bring renewed pres- 
sure for a further tightening of the 
Federal Reserve’s interest rate pol- 
icy, which was seen as the i pf*™ 
cause of big falls across interna- 


Budget 

tional stock markets last week. 

The ever-present threat of a wind- 
fall profits taxation continued to 
unnerve soma investors in the utili- 
ties areas. There was, however. 
good support tor some of the elec- 
tricity stocks, with one of tee big 
European securities houses chasing 
issues such as Yorkshire Electric i ty 
and Northern Electricity. 

Nat West Securities sounded a 
note of caution ahead of the Budget 
hi Us latest Equity Market Com- 
mentary, tee stockbroker noted that 
equities have moved in the opposite 
direction to gilts ova the last week, 
and pointed out that this suggested 
that markets are worrying about 
tee outlook for growth. “In this con- 
text," NatWest said, "it is worrying 
to see downgrades outnumbering 
upgrades in November - for the 
first time since February." 


FT-SE-A AU-Stiare Index Equity Shares Traded 


■ ■ ■ 'rrw»«tewfcim*irn«flQ»4. e**s#ib; 

l.flgft -y— ■■■— .■ torfc-fTHrtfflC txntmn end auerasss turnover ■ 

- ■ ,1,000—- — 



Source FTCkapMa ■ 1094 ... 1904 


■ Key Indicators 



tmflcaa and ratios 



FT-SE 100 

3047.1 

+13.6 

FT-SE Mid 250 

34800 

+8.7 

FT-SE-A 350 

15286 

+02 

FT-SE-A AJhShare 151468 

+565 

FT-SE-A AH-Shara yield 

4.03 

14.0 5) 


But p i fo unt mi sectors 


1 Engineering, Vehldas +1.S 




+06 



+n.7 

5 

PharmaceutkaJa 

+0.7 


FT Onflnay Index 2335.1 +113 

FT-SE-A Non Rns p/a 1834 (1&27) 

FT-SE 1 00 FU1 Dec 30553 +20.0 

10 yr GOt yield 3.46 (8.50) 

Long gBl/equity yM ratio: 2.13 (2.13) 

Worst performing sectors 

1 Textiles & Apparel -0,7 

2 Household Goods 4X6 

3 Property -0 A 

4 Health Caro .-4X3 

5 Distributors -03 


Dividend 
hope for 
Rees 

Regional electricity companies 
(recs) advanced as the market 
looked beyond the Budget and 
to the forthcoming results sea- 
son, with its possibility of Mg 
dividend payouts. 

Analysts said worries about 
a possible windfall tax on 
excess earnings had been dis- 
counted. And, although all ears 
would be on possible com- 
ments about tee future of tee 


National Grid, Investors were 
beginning to concentrate on 
tee interims, which begin with. 
Seehoard on Thursday. 

Mr Stephen Doe of Hoare 
Govett commented: "We could 
see outstanding dividends of 
up to 40 per cent from some of 
these companies." Seeboard, 
which has been trading around 
its all-time high, eased 1ft to 
4QSp. Northern and Yorkshire, 
both bought actively by Swiss 
Bank according to dealers, rose 
22 to 809p and 10 to 721p. 

VSEL power 

VSEL continued to power 
ahead on rumours of an immi- 
nent increased offer for the 


submarine maker from elec- 
tronics giant GEC, riving is to 
1535p for an advance over the 
past two trading days of 40. 

The December 7 deadline for 
a decision from the Office of 
Fair Trading on whether to 
refer either of the two compet- 
ing bids for VSEL - British 
Aerospace is the other con- 
tender - to the Monopolies and 
Mergers Commission is just 
over a week away. 

The odds on Sir Arnold 
Weinstock and his team at 
GEC upping the ante before 
hand look to have shortened 
significantly in recent sessions. 
BAe added 3 at 455p, pushing 
the value of its all-share offer 
above 1500p. GEC, which 


improved slightly to 274ftp, 
has an all-cash offer of 1400p 
on the table and Is expected to 
lift this to act least ISSOp. 

RBoS rethink 

Reassessment of the pros- 
pects for Royal Bank of Scot- 
land abaari of figures on Thurs- 
day saw the Scottish clearer’s 
shares lose 7 at 416p. The 
change of heart followed disap- 
pointing comments from the 
bank's insurance subsidiary 
Direct Line. 

BZW, whose ardour has been 
cooling for mitip tune , finally 
put the stock on its sell list, 
saying Direct Line’s profits 
would peak in two years’ timn 


TRADING VOLUME 


EQUITY FUTURES AND OPTIONS TRADING 


Stock Index futures moved 
higher, but activity was low 
and there was Bttle reel 
attempt to lead the cash 
market in spite of the 


development of a comfortable 
premium during the afternoon 
session, writes Jeffrey Brown. 

The FT-SE 100 December 
contract had reached 3,055 at 


the dose of pit trading, up 19 
points. The premium to cash 
equities was around nine 
points, or a full four points 
above fair value. 

The steadiness of the 
premium over the cash market 
was no real guide to trading 
volume, with contract numbers 
again falling short of 10,000 In 
a day that could do little more 
than consolidate ahead of 
today's Budget statement 

There was a small amount of 
two-way trade during the 
morning, which pushed the 
premium to cash equities 
down to around two points, 
but this fizzled out aroteid 
midday. 

Wall Street opened strongly, 
but in the thin conditions the 
December Footsie future could 
only drift upwards, with most 
traders deciding to call an 
early halt to proceedings. At 
the 4.10pm official dose It 
was 11 points under its best 
for the day. 

Traded options volume was 
also flat, dipping to 17,732 
lots, from 21,025 on Friday. 

Cali and put volume was fairly 
evenly matched, while FT-SE 
and Euro FT-SE trades 
accounted for just over 10,000 
contracts. 


■ FT-SE tOO mPEX FUTURES (LffFQ E2S par full Index point 


(API) 



Open 

SeRprioe 

Ctwnga 

HU* 

LOW 

Eat vol 

Open in*. 

Dec 

30486 

30556 

+206 

3066.0 

3042.0 

10307 

48225 

Mar 

3064.5 

30896 

+20.0 

30686 

30646 

168 

10384 

Jun 


30916 

+206 



0 

145 


■ FT-SE APD 260 BtDEX FUTURES gJFFE? tfOptrkJt Max print 

D«e 34700 34600 4-15.0 3470.0 34700 200 

MW 3507.0 36253 +133 36200 3S07 J) 243 

■ FT-SE BOD 250 INDEX FUTURES (OMLX) £10 per tit Index point 

Dec - 34300 .... 

N opai kvenri fovea are tor pravfcut day. f Exact rtUna afxjwn. 


2653 

2504 


267 


■ FT-SE 100 SPEX OPTION (UPFE) *3047 CIO per OJ index point 

2660 2600 2850 3000 3050 3100 3180 3300 

CPCPCPCPCPCPCPCP 
Dec 215b B 171 aBhtZriiZPa m 36 BB S4fe 35b 83b 19 1Mb 10b 161 
Jm MO 27 200*2 3Pz IBS 51b 131b 67 B8b 75b 114b 53b 143b 38 17S 

Fob 257 34 220 46b MS 61 161 79 122 100 96 125 74 154 53b 166 

Hr 2Mb- 43 228b S3 tazb 78 1®b 99b «0 778 KB Tflb » 170 68b 2(0 

Junt 268 81b 206b 120 ISO 168b Wb223b 

0*3*8 Ml UK 

■ BUBO STYLE FT-SE H» B4PEX OPTION {UFfq E10 perftri Index point 

2875 2025 2975 3025 3075 312S 3175 3226 

Dee 188b 9b 1«b IB tBBb 27 74 44 47 67 27b B7b M 133b 8b 175b 

Jan 214b 28 177 40 142b S5b TO 74b B5b S7b ©b 125 45b 158b 21b «2 

ft* ISIb 47 133b SB 83b 134b « W 

I* 206 B4b 143b I® •* 148b 67b 210 

Juif 260b 00b 191b 127 140 173 99b 22B 

Cali 835 Mi 1053 - UrritehQ tadx toe. Atom Hem n end *i itomrnl priori, 
t ln "B (Mud opiry noahe. 

m EUBP STYLE FT-SE HP 2S0 IBEX OPTION (OtftXJ CIO per ftS Index pofcit 

3650 


3400 


3600 


3490 3500 3650 

Dec 32% 57V 54 35\ B2\, 

Gris 0 Fob 0 SeUteDMA roc* to wtaaa m Man « 430pm. 


3700 


3750 


FT - SE Actuaries Share Indices 


UK Series 


Oeye 

Nov 28 chgaBfc Nov 26 Nov 04 Mov 23 


Year 

■ 8 ° 


Dtv. Earn. 
ytakMfc ytskHfc 


P/E 

1*0 


Xd at*. Total 
yrd Hebvn 


FT-SE 100 
FT-SE IBd 250 
FT-SE Md 3BO « fcw Tntoe 
FT-SE-A 360 
FT-SE SotoCep 
FT-SE SmaKap a* to Trwto 
FT-SE-A ALL-SHARE 


3047.1 +04 30336 30336 30276 31356 
34004 +33 34806 34816 34386 34830 
34300 +02 3481.0 34835 34035 34846 

15039 +0-4 16227 15240 1321 6 1581.1 

176S65 +02 1762.70 178365 170275 173767 

173567 +02 17324S 1733.42 173363 171362 

161468 +04160303151028150766154327 


FT-SE Actuaries AH-Share 


Day's 

Nov 28 chgeM Nov 25 Nov 24 Nov 23 


422 722 

382 569 

37B 339 

440 392 

368 540 

367 566 

443 37B 

D*v, Earn 
yWdK ytekHfc 


1336 117.76 
2042 12464 
1960 12866 
17.14 5307 
2569 6267 
2317 54.78 
1766 5372 


115377 

130385 

130324 

118366 

137387 

TS6726 

118863 


P/E Xds*. Total 
ratio ytd Btaum 


IAL SCTRACnONftQ 
two industries**) 


tendon 3 PnadQll 

fAfft/FACTURBtSpffT) 


l & CwtemjcBonpa) 
t Matte 4 Mereh^aa 


ed mduetriatonQ 
ic 4 Sac# EqtapP4> 


27 Engkwotefl. totk*as(12) 

28 Printing, Papers 

7ft Tir* 1 — * A ff mre *° 01 


288161 

+02286027 266168263360 233860 

367 

6.14 

2460 

8963 

1074.60 

3778.74 

+04 3782.16 373045 37S3.48 330540 

340 

543 

22.77 

86.82 

104072 

2831A1 

+02 260367 2621.78 268005 2286.10 

3,70 

671 

2161 

98.44 

108868 

184760 

+06 1838.71 1B4862 184868 1774.10 

261 

t_ 

t 

3863 

108861 

186021 

+05 184164 184268 184008 1880.70 

+60 

529 

2260 

7167 

9+028 


+01 102262 102169 101095 1145.70 

361 

568 

24.02 

38.70 

00863 

182862 

+02 1821.88 182360 182267 1865A0 

468 

565 

22.83 

71.18 

887.04 

22+061 

22+045 2242.70 2230 TO 218160 

461 

4.70 

2867 

9167 

999.57 

1 7+3.72 

+06 1732.85 172869 1732.77 190820 

567 

528 

22.78 

82.02 

88868 

183667 

+08 1820.18 1634.73 183018 204460 

4.11 

8.84 

17.45 

8168 

90031 


+07 18056+ 180014 1787.70 16S8.10 

363 

5.42 

21.67 

58.97 

104094 

232087 

+16 229068 2300.48 228020 1066.80 

461 

1/*9 

80607 8264 

1135.18 


+04 278085 Z78769 278661 248560 

an 

5.65 

2068 

8165 

1102.97 

16+046 . 

-07 166068 165ft 78 1555v42 185460 

467 

045 

2069 

B3.82 

88065 


I GOOOSP7) 

a 4 CWersCIO) 

adurera(2£B 

SooctePS) 


273068 

219307 

272122 

228057 

228364 

168329 

309969 

370768 


+04 271342 272386 272463 279340 
+08 218356 217379 218466 210140 
+04 271141 273040 275463 278740 
+04225163226144 225350229240 
-0-8 230144 231389 231301 266350 
-04 158305 158319 157142 168380 
+07307322307383 3063303077.70 
+02 36996B 372066 368539 4351-10 
+04 189325 186021 1896.03 191370 
4)4 2S1344 252765 252766 270350 
+0.6208141 2053482051,45 183040 
+04 284246 284313 282S40 285330 
+04 174302 173862 173348 1601.70 
+04 168339 159548 180468 176350 
+03 150760 161269 1510.59 TS9S40 
+04 2245.09 224441 222768 238140 
9 191012 126141 124866 116500 


4.42 

767 

15.72 11463 

94018 

463 

761 

1567 87.40 

98083 

4.13 

7.10 

1660 10260 

91064 

466 

760 

15.18 9862 

95045 

368 

764 

16.18 8868 

82004 

363 

040 

41.40 48.70 

92368 

465 

865 

1585 133.07 

89461 

565 

967 

11.58 217.07 

B+562 


38 Tobaecofil 

40 8EFMCESB10) 

41 Olatrtoutorapm 

42 (jataua A tfct8is&5) 

43 MecBapS) 

44 MsUen. ft*** 1 * 1 

45 OetaSers, Gw+rsMSf 
48 Support Servk»e(41) 

48 7>ansportfie) _ t . 


190349 

2511.17 

207318 

2852-11 

175384 

158264 

151164 

225563 

125343 


369 

081 

665 

765 

1012 5000 
1869 9164 

83962 

87062 

041 

563 

2268 5769 

1025.99 

048 

569 

22.30 7090 

99269 

074 

966 

1364 6063 

105070 

366 

7.17 

1768 6263 

BS7.17 

263 

052 

1866 3008 

98361 

178 

668 

1003 7264 

880.68 

4.42 

125 

4568 28 03 

1079.07 



WAHCIALSPW8 

to**”* 

nauranccft fl 

Asem wwW., 

Hher HnancWP^ 



215248 

2851.70 

009.78 

233540 

278378 

1850.40 

139935 


+04 214268 215007 213748 229360 
+08 283011 2845.85 282242 2861.70 
_0 ! 1210.86 121048 1204.74 142260 
+082321622312-86231767 272060 
„ 2787X6 278869 278068 3024.00 
+0 4 184361 184447 184948 171240 
_n"a 140463 140448 140166 171860 
^^2702652894-45 2681 65 267460, 



T-S6-A ALL-SfWfl^ 8 ®® 
ourty moveme* 1 * 3 


151466 


+0.4 150963 161028 1507.88 154347 


24P 

463 


12.74 8266 65768 
11.50 11339 85748 
1149 8267 836.18 
1648 12742 80375 
1144 103.78 84840 
14.03 6743 994.69 
2391 5139 B03Z2 
6140 6948 91MB 


6.78 1746 6372 119383 


960 


KJfll JM*. 


1200 


1360 1460 1500 1310 Hj^Aky troj* 



3048.1 

34696 

162*6 


30474 

9tfS6 

15238 


3046.6 

34884 

15235 


30496 

34839 

15296 


30434 

34835 

15276 


3043.1 

34886 

15276 


3047.1 

3480.0 

1528.9 


3047.7 

3484.4 3^-9 

. r/jcQ 1529~i 

1 ,« iBMHte: 35203 Ml™ 78783(2481 

Netc I252pn» DbY**"* a3DBPl 

f*5f 100 . limljn 

350 Industry baskets 

r .cc Actuarfos W* 1J0 1260 

‘ open 960__ja»__11 960.1 9686 9576 0674 

30884 1773-4 

SB SS *■’ *’ 


30486 30338 

34802 3484.4 

16238 15256 


Cnstnai 


3088.1 

17796 

20686 


ia0 O 1400 1300 1310 Oo so PreHpm Ctangt 

068.1 -as 

3050.7 +21.4 

17635 +15.4 

28856 +216 


i of coramufM aa cmoM* tan Tha RrwniJri Tfcn— 

m Svvra, »«ctl co»m«ia>0B ol dKBvnki and p^w^ud 

under eMWtenl ate el ffuundirtw. 
l»4. c Tta FhmeW 7»n« IteW 

STrSSSw’ 0,1 r—UmttiTheFr^AauweSw™ 

m Malted w™ 


■ Major Stocks Yesterday 



VoL 

daring 

DWS 


om 

prim 

C*M04 

4&»areupt 

1600 

3,100 

33S 

05 

*2 

Mitny Natanrif 

2600 

jWyi 

<6 

AUsiBriw 

4.100 


+1 

4Bed Damecqt 

1600 

ffj 

410 

tegteittaa 

482 


46 


7M 

543 

44 


1600 

3,700 

IB 

550 

Atsoc. at. Pcn$ 

183 

201 


EMAt 

BAThda.t 

1600 

500 

40 

2600 

442 

41 

BET 

1600 

102 

-ib 

acc 

107 

335 

43 

BOCt 

222 

70S 



0600 

416*7 

4ib 

017 

207 

T? 

Bit, 

C-CTl 

372b 

-ib 

Bint 

7600 



BnkorScriUMt 

1600 


•9 

Bwcfiat 

4600 

507 

410 

8SU 

1600 

BIO 

sn 

207b 

43^ 

9oo*w 

10 

415 

40 

Bootaf 

VcmMtry 

’« 

403b 

450 


Qrtt. Atnxfcrf 

1600 

+55 

43 

Brttrii Akwarit 

70S 

376 

44b 

ftWi Out 

Brtbati Land 

1600 

290b 

41b 

211 

870 

-+ 

BMriiSarif 

11600 

158 

*8 

Bata 

864 

103 


BunnrilCBHItat 

Bir&n 

Cataaft Wfc+t 

519 

3600 

3600 

Si 


Cactauy semmppart 

1600 


Cnadont 

Carfnn Conra-t 

446 

202 


41 

41 

CotaaWytai. 

3600 

199 

-3 

Comm, unkavt 

1,100 

533 

«3 

Co otoon 

470 

243 


CoirtaUctet 

»• T ‘ < ■ 

432 


sreu 

WT] 

424 

007 

+5 

44 

Dtan 

■_j 

186 

♦1 

EostanBecLt 

'600 

781 

-ib 

EastMrindteo. 

232 

750 

+7 

Baonocorro* 

233 

*00 

-a 

EngQta+Ctoym 

BMcptmait 

423 

200 

pfl 

42 

EuoinalUmi 

+24 


-o 

RO 

2.900 

100 

-i 

TTaon 

2.100 

122 

43 

Foratai ft CaL LT. 

Fawf 

1,100 

1,100 

134 

228 

♦b 

42 

Om. Accidsnrt 
Qmm Badf 

1.400 

1.70Q 

638 

27+b 

-« 

♦b 

Gtot 


826 

45 

e»— +. 

4flS 

356 

41 

OrmUBt . 

1600 

521 

46 

ataifeit 

2,100 

380 

42 

OUST 

275 

552 

40 

QREf 

Ml 

180 

-*b 

QWJ 

365 

810 

40 

Gdnmart 

3,100 

453 

-3 

KSaCftapritat 

1,100 

717 

4fl 

Irirawaraon 

340 

329 

41 

Hnorrt 

12600 

231 

4+ 

NiAnCMri 

3,100 

1ST 

*3 

Hrift 

620 

202 

41 

Wdoan 

1.100 

187 


M 

000 

310 

42 

IncLapet 

1600 

4,100 

745 

431 

-2 

-2 

johMon M*etrwy 

6 

564 

42 

Kkatenwt 

315 

+65 

42b 

ItaASBva 

290 

569 

luferriwt 

3,800 

1S6b 

s 

LariBaortteat 

665 

600 

Lapona 

136 

«U 

-1 

LaeriftOvtarit 

7.000 

420 


LtoydaAbbM 

UoydiStofct 

LA8UO 

+ »fti 
5600 

335 

567 

140b 

-2 

43 

i«b 

London Bad. 

1.400 

ere 

+« 

Lorrto 

7600 

153b 


Luo 

BS7 

204 

43 

MB»Ct 

340 

400 

♦T 

W1 

9600 

138 

♦b 

HwnMb 

1.200 

778 

413 

MBlri ft Sponoarl 
MtatndsBact. 

1.700 

aao 

3W| 2 

751 

*ib 

4ft 

McoriMfMn.) 

661 

130 

41 

MFC 

4600 

m 

-3 

NHWtari Baifct 

3600 

004 

4+ 

NatanriPowart 

1.700 

408 

42b 

MM 

1600 

255 

40 

(MiVMMat 

713 

931 

>2 

Northern Beet. . 

+72 

BOO 

*22 

Northern FootWt 


203 

-1 

NoneoO 


783 

40 

rWeont 

567 

906 

*2 

PftOt 

782 

815 

4ft 



178 

-2 

Pn— nOent 

2600 

550 

*sb 

Pnx1nrrie(t 

2600 

315 

43 

BMCt 

290 

807 

412 

RTZT 

918 

B35b 

43b 

RM 

1«0 

229 

♦11 

RenkOftt 

783 

414 

43 

Ractttft Conwit 

+09 

551 

-5 

Hadtantft, 

1.100 

471 

4S 

HenlOLSt 

nuMf 

542 

334 

MO 

706 

236 

473 

40b 

43 

43 

SKAtat 

ftoyri tnamevi 

+600 

1600 

872 

178 

41 B 

287 

-7 

*1 

SSSA 

a inn 

1 

410 

1423 

43 

+13 

Soaneh ft Neo.t 

an 

507 

♦7 

Scot. Hydn-SML 

1.700 

315 

41 

Scotaah Powwt 

874 

352 

4+ 

Sen*t 

3600 

108 



500 

151 

♦1 

SMMta 

+02 

«» 

-lb 

Sewn Tienrf . 

837 

541 

40 

6r«e Tianeuwrt 

2,700 

BOO 


Sefaef 

829 

55B 

40 

Skugh Erie 

984 

220 


SrtairWH^ 

08 

448 


SmUi 3 Haphart 

91+ 

751 

-b 

Sneo Oeeciiant 

anMBeeatanUe.t 

1600 

630 

424 

880 

43 

42 

Srtta>Ms. 

405 

450 

-2 

8ouMm Bent 

030 

781 

42 

Soun Wries Bett 

229 

776 

40 

8oi4h VMM Wrier 

440 

+87 

48 

Soudi WaeLSM. 

30 

761 

42 

sounemwatw . 

645 

604 

-1 

Snratenf CTmit 

939 

277 

-2 

SOBrtMt 

1.700 

2f7 

42b 

Sun ABoncst 

077 

315 

41 

TftN 

52 

221 

43 

H Onxpf 

2600 

372 

40 

TBBf 

3,700 

227 

48b 

Tajmac 

2,100 

125 


irinftlrie 

To/tor W«rie 

37B 

147 

434 

122 

-1 

+1 

Tsscof 

26Q0 

24+ 

+1 

ThmWWerf 

givn 

488b 

4+b 

nnmS«t 

326 

ATS 

+5 

Torttairit 

3.100 

224 

+’b 

Tralrigar House 

16M 

70b 

-ib 

Lktfto 

SI 

343 

#1b 

Unkwert 

017 

1112 

40 

UmHd Bkouost 

1600 

312b 

*b 

UM. Niwtapwpai 

865 

GOB 

-+ 


MOO 

253 

103b 

0+7 

4ib 

-i 

Wuft;owwt 

1600 

000 

42 

Welsh Water 

75 

827 

+10 

NweiVM 

024 

300 

tfi 

WlritXMft 

801 

5+0 

43b 

•MBn® rtO^T 

030 

3+8 

VAuCaman 

+24 

1+7 

+b 

VHmpejr 

108 

135 


WbtaHrit 

572 

77S 

4b 

Varttain BacL 

1.7TB 

721 

410 

Ycx+zhirowaoi 

778 

SW 


Anecat 

042 

851 

4+ 


Baaad on eaang vahm tat ■ nteebort d naltt 

aetuMM itedt tteougn He SEW aymm 
j»ueiite> untt 4jppm Tmaaa el onv nrnen «r 
mm am reundM txnm. t Indotees on FT-SE 
100 Me* eoraauen 


and, as such, tee RBoS valua- 
dan was too htgti. 

The investment bank 
believes teat RBoS is at a cur- 
rent price to book value of 4.7 
times and sees the share price 
falling to 380p. It forecast a 
profit on Thursday of ES20m 
giving earningg per share of 
36.4p and a 135p dividend. 

Barclays moved ahead 10 to 
597p on switching out of' 
Lloyds, up 3 at S67p. 

A large block of TSB sold at 
above the prevailing market 
price, «nd via a marketmaker 
anxious not to go short ahead 
of the Budget, saw the underly- 
ing stock gain 8ft at 227p. 

Dealers himg fire cm Singer 
& Fried lander. The merchant 
hank confirmed it was in talks 
with Nordbankeo, of Sweden, 
over buying tee Carnegie bro- 
kerage but gave no further 
details. The shares held at 81p. 

Insurer General Accident 
dipped 3 to 536p, with institu- 
tions digesting a cautious note 
from Smith New Court which 
argued that the shares were 
now at an over-demanding pre- 
mium of between 28 and 30 per 
cent above net asset value. 

Northern Ireland Electricity 
rose 5 to 382 after agreement to 
restore the Republican power 
link, out of service since 1975. 

Historically one erf the Bud- 
get's more price sanative sec- 
tors. drinks shares showed no 
obvious signs erf nerves with a 
number of stocks putting in a 
steady showing. Bass gained 5 
to 53lp and GrandMet put on 2 
to 398p following a switch 
recommendation from Nomura 
Securities; 

The top Japanese house told 


NEW HIGHS AND 
LOWS FOR 1994 


lev MOHS (17). 

9UB (1) Ttemvy Bpo 3000. BULDQU ft 
cttsnw ro Poewm, usnwtirom 09 
rnfcf i.n. i. n fi-irnr inn 

ECMJP (1) Central TacA BNQMEBWO (a 
Intfe, Turofce. vsa. Conaonwn, 
HOUSEHOLD 00008 ft) Mpandtnt Pam. 
INVESTMENT HUH* 0} MMraM HM 2*0 
Dhr Pt Jotmao fty Evo Zm P* LBSUHB A 
H0TTGLS 0) Unfcm OuC«, OIL EJOnXMATTOM 
& PROP a CKMter. OteM Nahnl Rhl 
WtVCHT SBNS (I? BuHm— TEXULEB 

4 Amsa P) CMmtoaMn PMpp*. 
AMEMC4HS t>) kapkteteni. 
ranvuswsm. 

BREWERES (1) Vtounfl Oaw A BULDMG ft 
CNSmN m BB & EA. BLDQ HKTLS 4 MCHT8 
n HtaMBd VWtenw. Oo. P(U UtaM. Itayw 
MU Item*. GHBBOOS n WmM ftamya. 

vbrtvH™. ramsimns MOpiDm*. 

Hmdtan. Lot SMcfc Yavna W. OWBWWO 
MX6 (1) WONA BJECIIMC « B£BT BMH> 
P» CML Ukra. CHMfcta. SKwmkiw. 
BMB BXIW IO W BMni HI Clyda Ol a — . 
Loekv (TJ ^ EXTIWCTNe MM 0) MaNL 
msuramce re a snesnefr trusts 
tie LBSUflK I HDIU M OaStete. Nn 
LHu*. mu |3) OaU OmSM TmO. 3mW 
A MW V?R MCHWr BANKS f|) 

QpC 2nd M, 03 EXPLORATION 1 PROD (1) 
Oeptai Hm. OTMR nUHCUL (t) Qn*m A 

00. IWIN3 nu«R4 maco MAO, oappv 

M. Ryau. PROPERTY R) BMbgr, Brit tail Spc 
Bd Do. SHpc Art, HK Land ISdBft. Prep. 
tamlA RET4ILEH3 9000 (1) Otty Rrm. 

REnaaia obbial n Boob, upin ft 

SoHan. SPBK1S, WO A CtOBtS (|) 
htefydmQ, SUPPORT B0VS 0 OB IntL 

tepicte CK»a iwwbt—i 
spmna. 0 CauMdi tooSm. r«kswl 

TRANSPORT P) Untad Canten, CMUDMH8 
tOBCOm. 

clients to switch out of Guin- 
ness and jntn GrandMet given 
the way the stout producer has 
outperformed over the past 
m o nt h ar >d GrandMet* s weak- 
ness ahead of this week's inter- 
ims. Guinness shed 3 to 453p. 

Allied Domecq rose 10 to 
563p, partly in response to 
over-selling following last 
week's results but mostly on 
the perception that today's 
Budget statement will not pro- 
duce duty increases. 


Ahead of next week's Inter- 
ims and helped by positive 
comment from brokers James 
Capel, Scottish and Newcastle 
added 7 at 507p. 

Dollar sensitive stocks 
responded to the stronger US 
currency. Glaxo gained 5 to 
626p and Unilever 9 to 1112p. 

International conglomerate 
Hanson, which reports full- 
year figures on Thursday 
added 4 at 231p. 

Healthcare group Smith & 
Nephew eased marginally to 
151p following a strong perfor- 
mance recently. 

NatWest Securities issued a 
weighty review which argued 
inter a ^ n that riwruinri for oil 
was rising as OECD countries 
emerge from recession and 
Iraq oil was unlikely to return 
to tee market in significant 
quantities before the 1996 US 
election. The house maintains 
its forecast of $19 a barrel for 
Brent crude and focuses on 
stocks with “low valuations 
and high leverage to a still 
improving industry back- 
ground.” The choices include 
BP which rose lft to 41Bftp and 
Lasmo white improved 2ft to 
146ftp despite news that the 
company’s corporate develop- 
ment director. Mr Norman 
Davidson Kelly, is to resign at 
the pttH of the mrmth 

Shell Transport felled to get 
above 696p despite a recom- 
mendation on its Royal Dutch 
arm by Paine Webber. 

British Steel rose 3 to 156p in 
turnover of Urn shares, helped 
by US press reports of strong 
North American steel prices 
extending into 1995 and possi- 
bly 1996. 


Elsewhere among engineer- 
ing shares, SJebe recovered 8 to 
558p in advance of next week's 
interim resnlts. TI Group 
gained 6 to 372p while renewed 
focus on a big foreign partner 
for its Rolls-Royce cars busi- 
ness underpinned a again of 8 
to 184p at Vickers. 

Textile leader Coats Viyella 
fell 3 to 199p after Smith New 
Court shaved forecasts and 
Courtenlds Textiles shed 11 to 
443p in sympathy. Analysts are 
concerned that the unseason- 
ally warm weather will hit 
autumn sales, possibly forcing 
companies to discount prices. 

MEPC, which unveils 
interim results on Thursday, 
gained a penny to 400p but 
Land Securities had a less 
resilient day, tumbling 9 to 
589p ex the dividend following 
an unfavourable note about 
asset values from property 
advisers Sevilla. 

Diversified industrial Wil- 
liams. Holdings held steady at 
34Bp following the £80m pur- 
chase of the Angus fire equip- 
ment business from engineer- 
ing services group BBA. BRA 
gained 3 to 203p. 

Heavily dealt with 7.8m 
shares changing hands, BTR 
managed to hold steady at 285p 
despite weekend press sugges- 
tions of nervousness among 
some institutional sharehold- 
ers following last week's resig- 
nation of the group's chief 
operating officer. 

MARKET REPORTERS: 

Peter John, 

Jeffrey Brown. 

■ Other statistics. Page 26 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 




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aw % eftg M 
25 an 6*T 24 


aw 

23 


T mr 


0a m da 
jM A% 


621 

W 


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3128.18 -1J 
247865 +26 
143961 +22 


316762 314810 2814.15 
2*2961 2 * 41.77 229228 
HE 7.41 14*867 178769 


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099 

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rv+wMto«rw<B-inni(?ftaft 4 :dWtertw)Bac-fl 4 pufctaiyWB« 23 ai) 7 Rfclia 


RISES AND FALLS YESTERDAY 



Mbm 

Ftafe 

Same 


57 

3 

ID 


. n 


1 


... ..... .... 54 

S3 

89 


... _ .. .. 143 






110 

329 





9S 







1*7 

30 

308 

Othon — 

Bl 

25 

28 

Totals 

709 

360 

1484 


<Ma teud an tton aonjpantei toad a* «■ LondSn am Ba+te 


TRADfnONAL OPTIONS 

flra*Dea8n0ft November 21 Last Oedarattons Fstofuwy 23 

LaatPeatoga Decgrrtoer2 ForaaBteron Msreb 9 

Cate Amtaax, Bufaa Rat, Catena, Kunhric, NHLtPnAj, Prataus, 9enaL Spring Ram, 
VWaologle Put ArntnoK 


LONDON RECENT ISSUES: EQUITIES 


Issue Amt 
price paid 

P «4> 

MkL 

cap 

(EnvJ 

IBM 

I4(Fi Low Stock 

CftM 

Price 

P 


Not 

df*. 

w. as 
con. yU 

WE 

net 

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FJ>. 

16P 

a 

70 Attruet Latin Am 

84 


_ 

. 

- 

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132 

S3 

46 Da Vteranta 

48 


- 


— 

_ 

_ 

FP. 

IIP 

192 

160 $Adm Pnmg 

IK 


\Q28* 

91 

1 A 

113 

ISO 

FP. 

79.4 

149 

145 Arifeaum 

148 

♦1 

V0N1O 

91 

23 

196 

too 

FP. 

6&B 

S3 

65 BZW Oommxflss 

asb 



m 

- 


_ 

FP. 

6P4 

47 

37 0o. Wits 

SB 

+1 

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- 

_ 


FP. 

463 

104 

e&iCdkra 

BO 


- 

- 

- 

- 

280 

FP. 

303 

287 

280 Churdd CMia 

285 


RN9 M 

22 

43 

190 

ICO 

FP. 

2DA 

130 

101 Euddrin 

102 


- 

- 

- 

_ 

141 

FP. 

233 

143 

143 EURMabl 

143 


WN&2 

13 

54 

114 


FP. 

487 J) 

495 

485 FUri^y Spec Unts 

467 


- 

- 

_ 


- 

FP. 

653 

170 

108 FKranto CTrit 

156 

-2 

RMCL75 

2.6 

03 

523 

100 

FP. 

113 

101 

100 Fhsbuy Srnlr C 

100 


- 

- 

- 


100 

FP. 

293 

102 

98b For 9Cri Eng C 

IK 

+1 

- 

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100 

FP. 

303 

102 

99 torn GoMrit 1000 

101 


- 

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291 

100 

BO N/5SOO Korea C 

07 


- 

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180 

FP. 

1683 

223 

205 Mali pBnnauonl 

221 


<MJ) 

23 

54 

7.7 

216 

FP. 

093 

232 

229 JJB Sports 

231 


RN&O 

23 

39 

14.1 

120 

FP. 

699 

140 

120 SesPerfect 

140 


- 




115 

FP. 

2273 

128 

117 TUB 

128 

43 

WN3 3 

23 

34 

184 

170 

FP. 

194 

173 

165 Trie-One Csl 

165 


RN5-44 

92 

4.1 

114 

100 

FP. 

173 

102 

102 Wolrigton Un. 

IK 


- 

- 

- 



RIGHTS OFFERS 


Issue 

Price 

P 

Amount 

paM 

up 

Latest 

Ftenun. 

drift 

1994 

High Low 

Strok 

Closing 

Price 

P 

♦or- 

77 

Ml 

30T2 

3pm 

2pm 

Apc&o Metek 

3pm 


296 

NI 

671 

80pm 

34pm 

Late 



27 

Nfl 

88711 

3bpm 

2bpm 

Martin kri 

2bpm 


37 

M 

S71 

5pm 

3pm 

OK 

3pm 


85 

rt 

23712 

15pm 

6pm 

Preseac 

6pn 


285 


671 

5?bpm 

40pm 

Setcn Health. 

42pm 

*2 


FINANCIAL 

l 

TIMES EQUITY INDICES 

Nov 28 Nov 25 Nov 2+ Nov 23 Nov 22 

71-4BO 

•Ugh 

“Low 

Onlnary tot 

2335.1 

23293 

23263 

23233 

236S.1 

23853 

27133 

2240.6 

om <ftr.yMd 

448 

4.49 

448 

448 

438 

908 

431 

948 

earn. ykl MU 

636 

&61 

630 

631 

844 

447 

631 

332 

P/E ratio not 

17.82 

1744 

1747 

17.45 

1733 

2911 

3943 

1834 

P/E ratio rri 

17 20 

17jOZ 

1736 

1733 

1735 

2637 

8030 

1732 


■For IQS*. Onanwy am tKlM rim EonvflribK Mat! Z71XB 2fl»sa; tow 484 2SQA0 
FT Qdny am Mm pm <te» vrm 


Ordinary Stem hourly changm 

Opan 960 imp 11J0 1260 ttJO 1460 1&0P 1&0P High Low 
23276 2333.4 23336 23346 2334JJ 2335.7 2332.8 2331.7 23382 23386 23Z76 


Nov 28 Nw 25 Nov 24 Nav 23 Nov 22 Yr ago 


SEAO btfctalna 22.612 20,482 22688 27643 

EtpSy haraWBr (Endt - 1068.4 13066 1499.8 

Equity b a ^tena t - 22690 27647 29650 

9wn tradad (mltf • 475L5 5386 6816 

IfoouJng I n iB -nwriwt bualnm art amaeas uanovw. 


24684 

1331.3 

28680 

8406 


31,797 

1526.4 

38686 

805.1 


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5. - . - r 





FINANCIAL TIMES TUESDAY^ 


CURRENCIES AND MONEY 


zlsr/J) 


-.say/-:-* . .- -- r. 


MARKETS REPORT 


Markets give sterling the benefit of the doubt 


The pound traded steadily 
yesterday ahead of the impor- 
tant parliamentary vote last 
night on the EU Finance hffl, 
and the budget today, writes 
Philip Gawith. 

Markets appeared to take the 
view that Mr John Major, the 
prime minister, would weather 
his current difficulties. Sterling 
dosed in London at DM2.4453, 
from DM24366 on Friday, and 
6L5632, from JL563L 

Market activity was gener- 
ally very subdued, with UK 
investors sidelined ahead of 
the budget, and a preponder- 
ance of US data at the end of 
the week. 

One market theme was the 
reversal of last week's shift 
from bands into equities. Yes- 
terday equities were firmer, 
while interest rate markets lost 
ground. The longer dated con- 
tracts of eurodollar Interest 
rate futures lost 10-15 basis 
points. 

The dollar finish ed half a 
pfennig firmer at DM1.5643, 
from DML5591, and at Y9&575, 


POUND SPOT FORWARD AGAINST THE POUNt 


from Y9S.765. 

In Norway the krone finned 
as opinion polls indicated a 
possible “Yes’* vote In the ref- 
erendum on EU membership. It 
finished at NKr436/DM, up 
from NRA384 on Friday. 

The lira benefited from talk 
of it possibly re-entering the 
Exchange Rate Mechanism, to 
finish at L1.031 from L1.038, 
against the D-Mark. 

hi Israel, the shekel weak- 
ened against the dollar, but 
rose against other currencies, 
when short term Interest rates 
rose by L5 percentage points to 
1&3 per cent The shekel closed 
the daily tender at Shk3.053 
against the dollar, from 
fthksu ua. The basket of foreign 
currencies traded at Shk3JJ965 
per bask***, from Shk3JS984 on 
Friday. 

■ Poamri bi New York 


Her 28 

— tabs# — 

- Pnw. dnes- 

Eapot 

1.5640 

14630 

ima 

14B39 

14629 

3aa 

14637 

14628 

1 V 

15810 

14983 


■ Most of the movement in 
sterling occurred during Asian 
trading, but traders said it was 
significant that there had been 
no attempt to sell pounds dur- 
ing European trading. 

Mr David Cocker, economist 
at Chemical Bank, commented: 
“Sterling/D-Mark recovered 
well thanks to the perception 
that Major is going to win the 
vote. The market has taken the 
view that lie will still be the 
prune minis ter at the end of 
this week." 

He said if politics were 
removed from the equation, 
sterling had the potential to 
improve another 2-3 pfennigs. 
Mr Cocker predicted that ster- 
ling would probably benefit 
today from a rally in gilts 
assuming, as widely predicted, 
that the budget will reveal a 
sharp fail in the public sector 
borrowing requirement 

■ Analysts said the reversal of 
fortune in equity and bond 
markets reflected a re-ap- 
praisal of the likelihood of 


Norwegian krone 

Against the D-Mark {NKr per DM) 

428 


4£4 — 



4.36 ' V, 


Source- Datastream 

another interest rate rise in 
the US this year. 

Mr Cocker said that while 
underlying sentiment towards 
the dollar had clearly 
improved, he found it diffi cult 
to predict it moving much 
higher at the moment. “The 
interbank market is sitting a 
little bit long of dollars, and 
there does not seem to be a 
desire on the part of external 


buyers to buy dollars.'’ 

He said the dollar was Hkefy 
to trade in a fairly narrow 
range ahead of the jobs report 
on Friday. “In employment 
week, you rarely see the dollar 
do much in the first few days, 
unless other factors come into 
place. 

In the longer term, many 
analysts are bullish about the 
dollar. Goldman Sachs con- 
cluded a recent review, saying: 
“Current interest rate differen- 
tials are probably wide enough 
to support the dollar against 
the yen and D-Mark. And, the 
dollar is likely gradually to 
appreciate further as Federal 
Reserve officials tighten mone- 
tary policy further over the 
next several months.” 

“We continue to forecast a 
yen/S e x change rate of 103 and 
a DM/S rate of 1.57 cm a six- 
month time horizon,” said 
Goldman Sachs. 

Mr Mike Rosenberg manager 
of international fawi income 
research at Merrill Lynch, 
takes a more cautious view. He 


argues that the Fed is stall 
“behind the curve” in combat- 
ting inflating "and as long as 
that remans file ease, the dol- 
lar is still at risk of moving 
lower again.” 

He adds, though., that the 
recent rise in US rates has 
bought the Fed some time. *Tf 
the Fed uses fiat time wisely, 
and gets back aa the curve, fia 
dollar will eventually bottom 
and ultimately move higher. 
Until then, it is too early to he 
touring about a fundamental 
turn in the dollar's value.’* : 

■ In its daily money market 
operations, the Bank .of 
Wn gTanfl cleared a £250m short- 
age at established rates. Three 
month LIBOR eased to 6£ per 
cent from 6V4 percent 


Mir ZB E S 

How 171314 - 17Z0GB TB9L90 - 110L04D 

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MONEY RATES 

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weak ago 


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S. 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


Clostag Change BkVcflor Dqy*s Iffld One month Three mwttha One jeer Bank of 
mkHxMa on day agreed tiah taw Rata XPA Rata MPA Rate %PA Enq. kitten 


Closing Change Btd/offer 


One month Three months One yaer JLP Morgan 


fSch) 

17410B 

+£0588 

025 - 191 

17.2289 17.1784 

17.2065 

03 

17.1946 

£4 


- 

115.2 

Austria 

03ft) 

60.2569 

+£1455 

362 - 778 

503530 501080 

502269 

07 

501419 

09 

494519 

1 £ 

1164 

Belgium 

(DKiJ 

94793 

+£0362 

746 > 841 

9L5B65 94385 

94775 

02 

94842 

-02 

94712 

Ol 

1164 

Denmark 

(PM) 

74663 

+£0507 

571 -755 

74755 7.4900 

- 

- 

- 

- 

- 

- 

674 

Finland 

ffTr) 

83926 

+£0212 

891 - 965 

04022 03664 

03915 

02 

03828 

05 

031 

1.0 

1094 

France 

(DM) 

£4453 

+0.0067 

442 >483 

£4472 £4399 

£4442 

05 

2>W03 

08 

2.4068 

14 

1201 

Germany 

(Or) 

37a 777 

+1.115 

635 - 906 

370900 374.908 

- 

- 

- 

- 

- 


- 

Greece 

(E) 

1-0151 

+£0008 

143-159 

1.0183 1.0134 

1.0149 

02 

1.0146 

0-2 

1.0163 

-0.1 

104.9 

Ireland 

(L) 

252244 

-07 

111 - 396 

253026 2SZ1.11 

252094 

-33 

2539.94 

-24 

259046 

-2.7 

73.7 

Italy 

JLFr) 

502563 

+£1455 362-776 

503530 50.1080 

502269 

07 

501419 

09 

484519 

1 £ 

1164 

Luxembourg 


(HJ 2.7383 
tHKiJ 10.8687 


+0.0088 388 

-wise sit 

+1JJ37 970 


-387 2.7421 2.7303 2.737 

■ 783 70.7237 708340 106894 

■ 254 250254 240511 251442 


05 2.7328 08 28888 1.4 
0J) 108727 -07 105718 OO 
-03 2S5JK2 -74 


Belgium 

Denmark 

FMand 

France 

Germany 

GrceCfl 

Ireland 

Italy 

Luxembourg 

Netherlands 

Norway 

Portugal 

Spain 

Sweden 

Sw i tzer land 

UK 

Ecu 

SORT 

Americas 

Argentina 

Brazil 

Canada 


Auamfta 
Hong Kong 
Intfa 


Philippines (Peso) 374762 +02537 884-639 374600 307200 - - - 

Saud Arabia (SR) 54632 +0.0004 613-651 54648 54485 - - - 

Singapore (S$) 24888 -00018 672 - 888 02826 22BOO - - - - 

S Africa (Com.) (R) 54427 +00145 401 -453 54416 54228 - - - 

S Africa (Fn) P) 64576 +00209 403-748 64482 64353 - - - 

South Korea (Won) 124147 -OM 149 - 244 124027 1239.18 - - - 

Taiwan (IS) 41.0803 +00993 743-063 414978 409965 - - - 

Thailand (BI) 38.1428 +00531 188-662 39.1520 384860 - - - - - 

1SDH ras tar No* 23, BWfcJhr epraada In flm Potam Spot wble them erty 0» hot daea riednal placaa. Femad i«>aa ara no* dkacSy qpoM *o tha 

inMliat but anwaried by camel hornet iBtawSMtifl Mac criHMsd Iqr Oraflerit of Engleid8BM aiwage 1MB ■ lOOBM.OihrandlM+SMelnba8i 

Ow md ttw Oolar Spot Mlaa cWrtmd tram THE WM/neUISB CLOBBIB SPOT RAItS. Sana vriuw an munded by Ow F.T."Cen«eaan fcr 29.1184; Japan 

Ooatog cktpebe 15*375. BUOOw n»ad 311-438 


(Pta) 

204.115 

+0.B76 

024 - 206 

204480 203.734 

204.45 

-24 

205.09 

-14 

207.785 

(5Kr) 

11.7514 

+£0773 

405 - 622 

11.7622 11.6380 

11.7689 

-14 

114079 

-14 

114699 

(Sft) 

£0739 

+0.0096 729 - 749 

£0752 

£0691 

24706 

14 

24631 

£1 

£0198 


14830 

+04029 

624 - 835 

1.2850 

14793 

1483 

04 

14824 

04 

14749 

- 

0431788 

- 

- 

- 

- 

- 

- 

- 

- 

- 

(Paeo) 

14633 


628 - 638 

1.5650 

14610 

. 

_ 

. 

. 

. 

(W) 

14358 

-£0069 

348 - 369 

14489 

1.3295 

- 

- 

- 

- 

- 

(CS) 

£1538 

+0.0026 

526 - 545 

£1545 

£1443 

£1539 

-0.1 

£1526 

04 

£1525 

rPUo) 

54899 

+0.0028 

862 - 936 

54936 

54700 

- 

m 

- 

- 

- 

m 

14632 

+04001 

628 - 636 

14638 

14585 

14632 

0.0 

14629 

0.1 

14585 

1 EttWtfrlca 










(AS) 

24505 

-0.0066 

493 - 617 

£0544 

£0440 

£0526 

-14 

£0553 

-04 

£0692 

IHKS) 

124671 

+£0021 

836- 905 

124905 124593 

12.078 

09 

124737 

0.4 

124285 

W 

49.0415 

+04008 250-580 

494580 484370 

. 

- 

- 

- 

- 

(V) 

154.093 

-0282 

014 - 171 

154420 153420 

153473 

34 

152.698 

3.6 

147413 

(MS) 

34984 

+£0017 

965 - 002 

34992 

34804 

- 

- 

- 

. 

- 

(NTS) 

24086 

-00115 

069-102 

£5109 

£5064 

24133 

-24 

£5225 

-24 

£5424 

(Paeo) 

374762 

+02537 

B84 - 639 

374600 38.7200 

- 

- 

- 

- 

- 

(SH) 

54632 

+0.0004 

013-651 

54648 

£8495 

- 

- 

- 

- 

- 

(5$) 

22888 

-04019 

672 - 899 

9WM 

24B50 

- 

- 

- 

. 

- 

1 « 

£5427 

+04145 

401 -453 

54418 

£5228 

- 

- 

- 

- 

- 

W) 

05578 

+£0209 

403- 749 

64492 

64353 

- 

- 

- 

- 

- 

(W0f« 

124147 

-0X2 

149 - 244 

124247 1239.18 

- 

- 

- 

- 

- 

(TS) 

41.0903 

+£0993 

743-063 

414979 409965 

- 

- 

- 

- 

- 

m 

39.1428 

+44531 

189-662 

39.1520 394860 

- 

- 

- 

- 

- 


IScfi) 

11.0100 

+04385 

075 - 125 

114300 10.9970 

114025 

04 

10988 

09 

108883 

1.1 

(BFr) 

32.1500 

+£09 

450 - 550 

32-2480 32.1000 

32.1325 

£7 

32485 

08 

3146 

04 

(DKr) 

£1280 

+£0226 

265 - 29S 

£1373 

£1022 

£1273 

ai 

£1305 

-02 

6.1345 

-Ol 

IFM) 

4.8403 

+£032 

356 - 449 

44449 

J.6246 

44375 

£7 

44318 

07 

44248 

03 

(FFfl 

53690 

+0.0131 

£80 • 700 

£3800 

£3580 

54682 

02 

£4638 

04 


07 

P) 

1.S643 

+0 0054 

640 - 645 

14671 

14617 

14636 

04 

14614 

07 

14443 

14 

(Dr) 

241. 025 

+0-69 

000 - 050 

241490 240.080 

243.725 

-13.4 

240075 

-144 

280.775 

-114 

(K) 

14400 

-04012 

392 - 407 

14410 

14330 

1.5403 

-£2 

1440S 

-02 

14363 

02 

(U 

1013.70 

-34 320 - 420 

162140 1616.90 

1617.45 

-24 

1625 

-£S 

16612 

-24 

(LFO 

32.1500 

+£09 

450 - 550 

322480 32-1000 

32.1325 

£7 

32465 

08 

3146 

04 

(FD 

1.7517 

+£0054 

512 - 522 

1.7557 

1.7512 

1.7509 

04 

1.7486 

07 

1J317 

1.1 

INKS) 

£6256 

-00064 

218 - 293 

£8690 

£8218 

carwq 

-14 

64446 

-1.1 

£8526 

-£4 

(Es) 

160400 

+0.84 

950 - 050 

160.050 159.770 

160475 

-44 

1012 

-44 

16025 

-34 

(Pta) 

130575 

+£42 

550 - 600 

130470 130 370 

130.79 

-2.0 

13143 

-2.0 

133425 

-3.1 

(SKO 

7.5175 

+£0487 

125 - 225 

74220 

7.4450 

74287 

-14 

7453 

-14 

74715 

-24 

(SFr) 

1 3267 

+0.006 264 - 270 

14295 

1.3242 

14246 

14 

14201 

£0 

1296 

£3 

(3 

1.5632 

+£0001 

628 - 636 

15638 

1.5595 

14632 

0.0 

14629 

£1 

14585 

03 


14185 

-0.0026 

182 - 187 

14205 

12155 

14185 

04 

14188 

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-04 

- 

1.48738 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

(Peso) 

1.0001 

-04001 

000 - 001 

1.0002 

1.0000 

_ 

. 


_ 

- 

_ 

(FD) 

04545 

-£0045 

540- 550 

08630 

04520 

- 

- 

- 

- 

- 

- 

pa 

14777 

+£0015 

774 - 779 

1.3779 

1.3745 

14774 

02 

1477 

02 

14812 

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r Paso) 

3/M80 

in 

§ 

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465 - 495 

3.4550 

3.4380 

3.449 

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34582 

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term ncfica - roortl 


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Norway 

Portugal 

Span 

Sweden 

Switzerland 

UK 

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som 

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Argentina 

Brazil 

Canada 


USA (S) 

Padflc/Mkb9e East/Africa 
Australia (AS) 14118 -0.0043 

Hong Kong (WS) 7.7323 +00006 

IntSa (Rs) 31.3725 -00025 

Japan (Y) 98.5750 -019 

Malaysia (MS) 24678 +0.0008 


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Japan (Y) 98.5750 -019 ! 

Malaysia (MS) 24678 +0.0008 i 

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PNDppines (Peso) 239100 +0.16 f 

Saud Arabia (SR) 3.7508 -OOOOl 5 

Singapore (SS) 1.4640 -0.0014 ( 

S Africa (Cbm) (R) 05458 +0.009 t 

S Africa (Fin) (R) 4.1950 +0-013 ( 

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320 - 325 7.7325 7.7320 

700 - 750 314750 314700 
500 - 000 96.9500 98.4600 

573 - 583 25595 24573 

041 -064 1.6103 14041 

600 - BOO 24.0000 234000 
505 • 510 3.7510 3^05 

635 - 645 1.4679 1.463S 

450 - 46S 35465 35380 

850 - 050 44050 A 1850 

400 - 600 794400 794.400 
825 - 895 264100 264825 
300 - 500 254500 25.0300 


14126 -0.7 
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31.4425 -2.7 
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£5548 1A 
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37544 -1.1 
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34613 -54 
4423 -84 
7974 -44 
28306 -04 
254695 -14 


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7.729 02 7.7368 HU 

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14082 -04 14172 -04 

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9509 

8508 


onnn 

9508 

:• -1094' 

18382 



9£75 

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9548 

96.46 

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96.12 

96.11 

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95.12 

96,11- 

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3860 



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■■ AJFFQ Gartm polnte «MOOK 


; . * 

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Open 

Sail price 

Change 

High 

Low r 

£ab vat- 

Open Int 

5 • - ™ 


9408 

9449 

4L , 

94.11 

0446 

477 

7865 ~ 

- *• ■ — 1 


S3UB6 

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2647 -r 

Is- * . • 

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Jun 9846 K 

SB p ■ 9246 .85 

" LITE Utra taadad on APT 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 


lib 

Nov 28 

BFr 

DKr 

FFr 

DM 

K 

L 

H 

NKr 

Ea 

Pta 

SKr 

8ft- 

e 

CS 

S 

r 

Ecu 

8 

B 

Lot 

l[pi 

Betgkan 

(BFr) 100 

1906 

1£70 

4460 

gewn 

S019 

5449 

2141 

487.7 

4002 

2348 

4.125 

1090 

4285 

£110 

3064 

£553 

Danmark 

(PKi) S£46 

10 

£781 

2462 

1060 

2033 


11.15 

281.1 

21£1 

1227 

£164 

1044 

£248 

1032 

1604 

1439 

Wt 

Ranoe 

(FA) 5948 

11.41 

10 

£913 

1409 

3006 

£263 

1£70 

2880 

2434 

1400 

2470 

1.192 

2468 

1062 

1834 

1429 

Me 

Germany 

(DM) 2045 

3416 

£432 

1 

0415 

1031 

1.120 

4460 

1024 

8348 

4006 

£848 

0409 

0081 

0439 

6208 

0426 

Me 

Irriand 

OQ 4941 

£437 

£208 

£409 

1 

2485 

£698 

1050 

2464 

201.1 

1148 

£042 

£965 

£121 

1440 

181.7 

1264 

Mo 

IfSiailttiiifc 

(L) 1-982 

0480 

0433 

0.037 

0040 

10a 

aioo 

0423 

£917 

£093 

0488 

0082 

0040 

0085 

£062 

6106 

£051 

ter 


m 1846 

3^99 

£065 

0893 

0471 

921-1 

1 

£893 

8144 

7444 

4491 

0.757 

0485 

0.786 

0471 

5625 

£409 

tec 

Norway 

(NKr) 47.14 

8488 

7472 

£294 

0052 

2388 

2468 

10 

2340 

1914 

1102 

1045 

£938 

£020 

1406 

1444 

1204 

Pro 

N 

Portugal 

(Es) 2009 

3430 

3395 

0078 

0406 

1008 

1096 

4462 

10a 

9101 

4098 

£829 

0400 

£861 

0.626 

6148 

£513 

tec 

Spate 

(Pta) 24.02 

4483 

4.112 

1.198 

0487 

1230 

1441 


1224 

100. 

£757 

1016 

£480 

1065 

£786 

7345 

n«gQ 

25 

Swerian 

(SKr) 4£77 

£152 

7.142 

£081 

0084 

2148 

2430 

£072 

2120 

17£7 

10 

1.764 

£851 

1432 

1430 

181.1 

1092 

an 

Swttzeriend 

(SFi) 2444 

4421 

4448 

1.179 

0480 

1217 

1421 

5.142 

120J8 

9846 

5068 

1 

0482 

1039 

£754 

7449 

0019 

■Sa 

te 

UK 

® 8046 

9479 

8482 

£445 

1015 

2322 

£738 

10-66 

250.1 

204.1 

11J5 

2073 

1 

£153 

1463 

1540 

1283 

s® 

Canaria 

test 2344 

£449 

£898 

1.138 

0471 

1171 

1472 

4451 

11K2 

9400 

£458 

0063 

£484 

1 

£720 

7143 

0596 

IS 

US 

M 32-15 

£129 

S4B9 

1464 

0049 

1814 

1.752 

£820 

1800 

1304 

7418 

1420 

0040 

1477 

1 

9843 

£821 

■S 

Tor 

■Mien 

(Y) 32.63 

£220 

£449 

1488 

0059 

1688 

1.778 

£922 

1624 

1324 

7030 

1446 

£649 

1498 

1016 

10a 

£833 

Ecu 

39.17 

7.406 

£641 

1406 

£791 

1966 

£134 

8409 

1940 

1501 

£158 

1016 

£779 

1078 

1418 

12£0 

1 



Margined Foreign Exchange ; 
Trading 

Fast Competitive Quotes 24 Hours 
TfeL- 071-815 0400 or Fax 071-329 3919 


FINANCIAL TIMES 


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Futures * Options * Stocks * Forex* News *' Via Sardine 

LONDON +71 329 3377 

LONDON +71 3293977 NSW TOKK +212 205 486 FBANKTORT +0044101 


■ P-9WC HlllliHM (MU) DM 125400 per DM 


1 0MM) Yen 124 per Yon 100 



Op** 1 

Latest 

Change 

Hgh 

Dec 

£8398 

00396 

-0.0020 

£6403 

Mar 

£8400 

00407 

-00023 

£8408 

Jen 

£8428 

00428 

-OOQ25 

00428 

■ SOT 

SB FHANC RTTUHR8 QMM) SFr 12SOOO perl 

Dec 

0.7557 

£7550 

-00031 

£7562 

Mar 

£7589 

0.75B4 

-00031 

£7589 

Jut 

£7822 

£7828 

-00033 

£7828 


Low Eat voi Open InL 


Dec 

Mar 

Jin 

msrm 

Open 

10142 

10225 

10350 

LMQPUTUn 

Latest 

10166 

10282 

10383 

■BB (MM) 1 

Change 

+4)0021 

+00019 

+00021 

352400 per 

Htf) 

10186 

10252 

10368 

£ 

Low 

10123 

10222 

10360 

EeL vet 
15016 
801 
192 

Doc 

14608 

14826 

+00002 

14628 

14600 

£438 

Mar 

14800 

14614 

- 

14620 

14598 

795 

Jut 

- 

14620 

- 

14620 

14800 

65 


FUTURES 

&OPTIONS 

TRADERS 

FOB AN BFFIClEirr 

« f VkKPenTTVK SKRVJCK 


38 DOVER STREET, LONDON WH3EB 
TEL: 0171 829 1133 FAX' 0171 496 0022 


! > * 
?V--. 

» - 

“• 

5 *-• • 


| UK INTEREST RATES 1 

LONDON HONEY RATES 

Nor 28 Over- 7 days 

right notice 

One 

month 

JYtm 

manor* 

fflt 

monttii 

One 

year 

Wartoank Staring 5& - 3 1 * 

5*-4B 

6A-« 

84-0Q 


74-71* 

Staring CDs 

- 

S»1-S4 

58-5^ 

64-6A 

7*8-7 

Treasury Bbt 

- 

54-5% 

SH-Wi 



Bwtfc Bfe 

- 

52-58 

SI-5% 

63g-8^ 

- 

Lcael authority daps. 4H - 4& 

5&-4U 


8-5% 

84-04 

74-74 

Discount Market dope 4* - 4 

6~Ok 


- 



UK ctartag hank bass fandhg rate 5% par cent ton September f£ 1994 



UR to 1 

1-3 

3-6 


9-12 



mantti 

months 

month* 

months 

Cterts of Tex dap. (E3O0O00I 

l>* 

4 

3V 

3V 

sHa 


EUROPEAN CURRENCY UNVT RATES 

Ecu oen. Rate Change % +/- from % spread Dtv. 
tatee agahetEou on day can, rate v waahaet ted. 


LIVE FROM UFFE - 0839 35-35-70 

Dial now and hear the Footate move with tre co m me n tary from Ufle.ee ft happ 
For detalta ol all U&i flnea end owr fliwnri al talcrn wt lca serricej. call U71-895 g 
Calb e*e tharged at 39pMn dbeep rue. 49)Vhtek eB other thnea. 
Futurea PayrLtd. 1&21 Great Tower St. Lontk io EX3RSAQ. 

i" 'Ji'ffW.'M Futures Call 


TAX-FRFF SPECULATION 
f \ FUTLRES 


£16872 £14340 

402123 394817 

144964 141294 

0408828 0.794033 

643883 849914 

7/43679 7X9170 

192454 195410 

154250 189417 


+QOOI59 -£43 

+0421 -2.12 

+£00142 -148 

-0402038 -140 

+£00091 048 

+£00329 074 

+£224 148 

+£246 3.81 


£18 

548 IS 

640 

541 12 

£13 -4 

245 -5 

£20 -9 

040 -28 



jm.cn Mono i Hiij erBgeanteeen-aaaTKe oreaWe Dri 

ki oc c index »c. »ii r +inw.i. ii t; .iii ■,.[! , at xinn ^rou u 3 


^gT-FntiiTyView 


Carts of Tm dap. taidar EIOQPOD la l*ipa. Dmerib wl 
Am kndar rata of (Sacaunt S-Tiespa ECGD reed ek 
im Aiyead Ma tor period New 28, 1994 to Oac 25, v 
pwlodOctl. 1994 la Oct 31. 19B4,8riwmaalV3VSJ 

1. 1B04 


cmhlipa 

1 nwet. tteba ud day Oat SI, 
m B 8 » 743pt Mnma raw tar 
ice Hmwi Baaa Rria Opo tom Hoe 

400 potnta cfl 0098 


^ _ 7Jn . 
My 1793.19 197844 . -346 1036 -012 

UK 0788749 0782391 -04Q217S -OSS 4.19 

Era canttal reeae art by Bio Baepam ConmWoa Owamdae ere In ifcmmang ntaOwe atranath. 
PaKemga Cbangaa are tar Era; a poobhe manaa danotaa ■ woric aaraney. Dtaaraann ahOB* ttn 
mta babreaa two apeatee tie patentee dBwanra bataiean tba actari marie* aid Ecu taM naaa 
fcr ecwancy. end ere nradm a w p an teted pwcartenei leiitailai cr dm ciwency'amartow ate Beni e> 
EricaUate 

tiTWOB) Btarim rata Balm Lire euapandad from Sat /e fea tmant rricu bei d by Bie RnindM Ttaiat. 



Open 

Sett price 

Change 

H9h 

Lena 

Eit sol 

Open lr£ 

Dec 

83J0 

93.72 

+£01 

93.74 

93.70 

9965 

128601 

Mar 

9208 

93.01 

+002 

33.03 

9206 

12221 

92496 

Jim 

9247 

92.41 

+002 

9243 

9247 

2806 

55748 

Sep 

9101 

9106 

+004 

9107 

9101 

1831 

84429 

Ttedad on APT. AM Doan Harsrt Dos. 

we far preatoua day. 





I OTTKM5 (LfiTQ £600,000 points of 100% 


■ mun 

Sbrico 

Price 

■nunc 

Dec 

•onion 

— CALLS - 
Jm 

221450 Jra 

Feb 

mte per pound) 

Deo 

PUTS — 
Jan 

Feb 

1428 

£74 

4.22 

409 

£10 

£61 

1.10 

14B0 

140 

£51 

3oa 

040 

147 

107 

1JD6 

£58 

144 

104 

147 

£59 

3.19 

1400 

£11 

£82 

1.12 

344 

445 

443 

1425 

- 

£23 

£59 

601 

£44 

£77 

1450 

- 

£08 

£27 

842 

8.70 

nna 


Market-Eye 

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to vour PC ter j 'Ort- !i»i:d cci,*. 

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oxcunge r^te specialists (or over 2C years 


Anno Whitby 
o!. 01 7 i -73- 7 1 7c 
cx: C: 71 -3.39 J?6i 


stria 

Price 

Dec 

- CALLS - 
Mar 

Jun 

Dec 

— PUIS - 
Mar 

Jon 

•980 

026 

048 

£09 

004 

047 

1.18 

0375 

£10 

£03 

008 

£13 

£77 

149 

9400 

£02 

£01 

£03 

040 

140 

142 


Ita Eat wL totri, Cate GGGB Pula 2990 Prerioua d^te opan tau CMa 343288 Pula 244090 


Praalara dayli «0L QA £043 ftita 44T0 . Pmk. dqra open 1C Gab 892,168 Pub 361 405 


■ ti—k aaoami ■unopauum pvtM) sim poena of ioo% 

Opan Latest Change Ugh Low Est vd Opan W. 
Dee 9343 9349 -005 8343 8349 37426 377489 

Uar 93.40 99L29 -Oil 9140 9349 51470 461483 

Jun 9241 9249 £15 9241 9249 30823 319489 


$5$ 


COBRBCrMAMUSafDir 

CORPORA.TSOHPLC 
II Ota Jewry 
UaaknBC2RBDU 
Tet 871463 OW 
Pec 0714720910 


This quarterly directory lists for She first time 
over 3000 credit ratings of borrowers in: 

Argentina • Bahrain • Brazil 
Bulgaria • Chile • China 
Colombia • Cyprus 
Czech Republic • Egypt • Greece 
Hong Kong • Hungary • India 
Indonesia • Israel • Jordan 
Korea • Kuwait • Lebanon 
Malaysia • Mexico • Oman 
Pakistan • Philippines • Poland 
Portugal • Qatar • Romania 
Russia • Saudi Arabia • Singapore 
Slovenia • Slovakia 
South Africa • Sri Lanfeq • Taiwan 
Thailand • Tunisia • Turkey 
United Arab Emirates 
Uruguay • Venezuela 
The ratings of 30 international and local 
credit rating agencies are included 


'*■> Wv 


* 


RASE LENDING RATES 


Ahm 3 Company — 5.75 

Afed Trust Berk STS 

ABBn* 5.75 

•Merry Aretacher 575 

BaScafBamda 075 

Bonn BfeaoVbsqn- 075 

Bank of Cyprus — bjb 

Bankof Ireland 075 

Bnkaflnda 5.75 

BerkafScaOmd 073 

Barclays Bank — . — £75 
BdBk Of LM £&*.._ 5TS 
•Brawn £9i4ptay&CD Ltd 475 
CLBankNedartend... 5.75 
Cftbtek NA ..—....,.,4.73 
Qytteedate Bank .,-._S.75 
Iha CooperaAreBMk. 075 

COuSsiCa S75 

CtecBLyonnoft — -.5.75 
Oypna Poputar Bark -5.75 


% 

Duncan Lamia — 075 

Dater Bank Umled_ 6.75 
HnencUSOonBru*- OS 
•Ftotwl Ftaling 3 CO _ 6.75 

SMbank 5T5 

•G^meesM^nn 5.78 

Habte Bark AO Zurich. 075 

BHw rtWaBwk 075 

HaU*t&<3enVtrBk.ST5 

•HftSannL 575 

a HOOm & CD 075 

Hongkong A Shanghai. 075 
JutenHodga Baric — &73 
•Leopold Joseph &3 om 575 

Lloyds Bank — 875 

Meghraj EfericLfej £75 

UrtandBork 07S 

• Mount artchg 6 

NofWeebnMar 075 

•naaBrathere -...078 


■nodusTwOuaffintea 

Corporator! LMtod la m 
tnjpraantedtt 
abwHngMftjDon. 8 
Royal BkafScadend- 878 
•Srrin&WttunSaca . 075 

TSB —075 

•UrfMBkofKUM*- &75 
Uri^Tuat Bank Pfc- 578 

VtatranThot __075 

wnanawyl oUw 075 

YarioriraBark 075 

•Mdrriwredl Union 
Irrwstraari Barking 
AraodaBon 


■ lift TWI«UHYMLI.Pgnilgaahfl>fl 81m perlOOW 

Dae 9448 9442 -DM 9447 9442 

Mar 9441 9343 £10 9441 9343 

Jun 9343 9348 £13 9343 9348 

M Opm Hanot tgt ara tor prurioui day 

■ mwanmaf ormlft gjffQ DMIm prinb of 100W 


I486 11,782 

612 11430 

18 1,996 


Price 

Deo 

Jan 

CALLS - 
Fab 

Mar 

Dee 

Jan 

PUTS 

Fab 

Mar 

9475 

£06 

046 

£11 

£13 

043 

ais 

£16 

£18 

9600 

nm 

£02 

£03 

045 

021 

£32 

£33 

035 

9828 

D 

0 

041 

041 

044 

£55 

£58 

048 


Eat wL taM, Cdi S37S Rue 3«B. Previous day's open Ire, Cate 22ion Pub 203074 
■ BUBO WH96 WteUIC OPHO— gJFFg SFr im points of 100% 


Strike 

Price 

Dee 

- CALLS - 
Mar 

Jut 

Deo 

— PUTS - 
Mar 

Jun 

9678 

pan 

£17 

£12 

001 

£17 

£42 

9600 

046 

£07 

£08 

047 

£32 

£60 

9629 

041 

043 

002 

027 

£53 

£82 


EH. voL fcew. Crib o n« a. prwtoua rhgrs npm mu Gate ano Pun ibis 


•FOREX * METALS ‘BONDS ‘SOFTS 

Objediire analysis for professional investors 

0962 879764 

Fitnr.es H:jse. 32 Se j'hcate street. Vi.ncSester. 

Hants £023 5EH Fn 0424 77-1057 


Signal ™ Investment Software Exhfoftfon & Seminar 

See Che brat Stock, Fntnres & FX Marfcxt TntSng & Aaalyjfa sr^ware dot 
hrfagp pownfU analyris to your PC la jneaHhnel ■ 

ThaBateeaiuLm^Deel -e amjv^vajRaELEl 
Cal 071 231 3556 or tax 071 231 0448 now lor (totals. 


Petroleum Argus Daily Oil Price Reports 


?c er? Petrol&um Argus 

CALL NOW m r--r - i , 


FINANCIAL TIMES 

Newsletters 

For further details contact* 

Simi Bansal, Financial Times Newsletters’ 
Marketing Department Third Floor, Number One 
souftvrark Bndge, London SE1 9HL, England 
Tel; (+44 71) 873 3795 Fax: (+44 71) 873 3935 

ItataW-tea^p-te^taWtaa, ta 

■aglmmlOCr^PrBeriMeetenrt^,^^ M _ . . 

■^^iasaaaaii!*. 


b '*< ■ ..T.,. 

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(V - : 

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**v ?•. **m . ta 

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... . • • 


[indices 


Ibr Jta» 

25 23 


State ampMoi 
Ml Low 


M Of*arKB(l/li«l 

CnauWa&nMW 

iwtori tade»Cn/3fl 


t - . . . • " 

•> i » .-- 


hr 70 (1/1/911 

Brad 

Bneqja (ZVlI/83) 

f— -— - 

ME* **+(1979 

Qiqnfltoi ri97S» 
ftttttoSJWW 

am _ 

PG/Mtan pU12W> 




HEXGaiBS<ian2«» 

araopi/iaOT 
QIC 40(31^2/87) 


««8B1flt1T197jM2SCrM0 TG/2 

i9it.fi ifitao 1885.7 zmm sra 
SGOJB 958.4 9(4.4 1138.79 372 

388.14 387.18 3M.75 48026 2/2 

1032JJ7 10Z9J9 102428 t22225 1/2 

140052 138097 139286 ISCfiB 9/2 

M 439072 457340 5STHU0 13/9 

M 378426 374411 «OSUB 2010 
m 409030 406520 460BJ0 230 
M 2001.48 189600 218288 1/2 

M 58566 56323 575440 21/11 

34457 34440 34305 415JB 2ffi 

18586 18532 1B622 1B7M0 4/2 

.*001 128868 128366 1SB20 2E 
SS 194568 193468 2»M 2/2 


7857.10 23/11 
90460 55 


3K5M 2500 
KH1J8 6* 


JPCJto/ISTS) 

CBSmCK«nd83 

CBS M St 83) 

Cv-40(ium 


at 2485.17 243396 2BBt.1T 8/2 

07 4316 4326 45460 31/1 

Z2.1 2706 2716 29460 31/1 


200387 1S9222 990377 243864 3ffi 


40630 21/8 
25760 21* 


tt*>S8)ndJpn/B31 105567 104860 105030 121 L10 28/2 


Must* 370827 367463 387799 397B2B 339335 397866 

(Jtfll m 9WM 

Haro Banta 8177 9176 9176 10561 9175 10977 

(21/1) (21/11) (18/10*9 

Tnaseat 1423.18 1422.19 144062 18BZ69 1422.19 1*8229 

am (23/11) (2/2*4) 

Ufifle 17961 177 JO 17194 2Z76S 17364 25MB 

(371) (22711) (31/8*3) 

OJ Ina. OwH Hcta 372140 (ST&un ) Law 367S67 0012J* ) (TTwonfeta) 
Day's Wgh S71ZM 060560 1 Law 367&61 *33067 I (Actual 


IMA Comp (2/1*5) 267860 Z7TUJ6 273347 330B67 471 


29614 29512 29446 322860 18* 


S5 /*-S‘jW*(2M/75) 54260 54185 54263 B4I61 471 


ConposttB f 
IntaKitabf 


45228 44863 45099 


am 

53725 58116 


4384 3867 

(14*1 (22/11) 


jSEGotfpB/wrq 
JSEM paws 

Mba 

tanon«47i*ar 

Sta 

MM SE (30712*5) 


205B4V 2045.7 20678 2534*1 7* 

68374* B9292 89499 8BB4.U 22/11 

108968 107465 10B5.16 113828 8711 

30266 30262 30163 39861 31H 


I74U0 14/2 
544860 19/1 


24018 24032 2B7J1 

am 

432.40 438.14 4S7JB 


74262 73070 74121 


48260 460 

(4/4) (2/2S4) (1*733 

>1065 58118 362 

(21 M) pBn0/94 (2176*23 

3867 4040 864 

22 / 1 D grog gnagg 

W3.14 26721 468 

tW) CfflW) (2SMM2} 

E267 48769 2131 

PftE) (2/2/34) 0/12/73 

89U3 5467 

flOOW) (JI/MW3 


r , m'*\r 

. . i 




S£ovia« gg SS S3J5* 

amBri-W' 12 ' 5 * mi* ZKIjSZ 2B5M7 2271.11 IBS 

D«etfi2«rt 

STewnn — ” t " 1 ” W "" 

taA « 4132281 4017139 4B2LS7 1 M 

BSESMtfl+W ^ 

2J^D»82) «J4 48757 48850 612» S/1 

1** fflUB *■» 1W7J, ° 


122768 25/10 
182462 25/10 

74264 5/10 

213030 5/10 
198069 7/10 

MX 22 m 


SCUD 5/1 
44U2 12/7 


189114 1/7 


^nasrartKw fl/KP) 15008 14656 14996 180380 Jl/1 

StaRM P1/12tt| 121 176 120460 121041 142364 31/1 
SBC Genoa/ (1/4*7) 81510 912.76 81088 109129 31/1 

Titan 

WBtt*rf»-W&eer 835420 842162 634062 7ttL13 3019 

BBiJa* SET fttM/75) 13C.13 134969 1*5729 175173 4n 

Data 

Istettui Oqtta 1*5 

Z73SU3 ZJDOasr 2GG968 2S8BUO W 

(HAD 

MS G*M hr {1/1/70* tar 076 8005 B4B69 27)1 

CnOGMOKR 

Bnuck lOOCfifflVW* 139502 132077 132965 1540.19 31/1 

Euo Top-IQO (288*01 117064 117268 117260 131161 2S 

jcspcOrb pm2*« » 311.19 siiot aeon 5/1 

Beta a mprvxi 1&42 17000 isox/ uus 209 

■ CJIC-40 STOCK BaPBtfilT11HB»(MATF) 

Opt* SoB Price Change High Law 
Nov 1961-0 19500 *164 1965U 19416 

Dec 19706 19500 +16.0 1973.0 1351-0 

Jan 1977.0 1966.0 +1W 1977.0 19700 

Open Mweet flpum tor mrianB day- 


113&72 27/10 
87057 27/10 


Dow Jones Ind. Dtv. YWd 
S & P Ind. CHv. yield 

s a p w. ns ratio 


Nov 11 Year ago 
2.78 2.72 

Nov 8 Year ago 
2J39 260 

2093 27.14 


■ STAMUH) MB POORS 500 MDEX FUTURES *500 tones index 


■* 62721 eai7 SS ■5^.gsgL"gg.gg?g 

SSSSST 5» 1015fl ^ M Chang. 

«mn24 tmx 13* 17366MVI Nov 1961.0 19500 +160 

J86J1J 6 *|UI 1M 26822 4rt Dec 19700 19500 +18.0 

27416 .25 171073 13® 14*87 4fl Jan 1977.0 1966.0 +1&6 

S£(K SJSSSSl®®* 87 Open taiereo flpm tor pMlme day- 

2 na Sedtan (4/1*9 ^ OI44S sn BB33 4/4 

“ta** 1 __ 105623 7W 1 -® 1 p* inai^S. RflMwauasifi ll todoaewa lOOenapc Ausam « Onfiwy 

ASECBlWW® jndMk 6436.65: 1 SLml CMC 40. Bw Top-100. IBEO Ovec* Tirana Caito/M»teta_8 

. •« T**» "^^^SSdThb “JS iff-S*®' » Omnon » 

: ^s 7 '- .*«*»* -***->« 

Mtaeto " 


12860 5/10 
1U648 5/10 
29628 2V3 
MUB2W 

Bst wt Open irtt 
24,579 15^11 
12^83 20307 

3 503 


Open Lfitat Change 
Dec 453.80 452-40 -125 

Mar - 456.85 

Jill - 46050 

Open Mens figures ere tot pnwtoue dojr- 

■ IW YORK ACT1W6 STOCKS 
FridBf Stoda Owe Change 

price finder 


m. 

Tetatanos 

AT &T 

Gan tarn 

CUcorp 

WMta 

Mnoreb 

ex 

Onsiar 

Modi 


(atari price 

ijTtaao 34M 

1.495.400 51H 

1^92800 49V 

1,233,900 38 

1,205200 42 

1,147300 23V 
1JB5BOO 56V 
1JD7JD0 70S 
1,027/00 46H 

1.018.400 3EM 


Low EstwL OpenanL 
45&20 39.151 207J92 

2.050 46.481 

9 4.S11 


■ TmaM ACmVTTY 

• Vnfenm (tafionj 

Nor 25 Nw 23 Nw 22 
New Verk SE 113J21 430735 385249 
MB 7.715 23.108 10428 


dVSE 

tasues Traded 


Unchanged 

NtaKgftt 
New Lows 


2,720 1933 1933 

1y492 1.144 475 

584 1236 1,895 

664 553 663 

3 3 » 

54 344 325 


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FINANCIAL TLMES TUESDAY NOVEMBER 29 1994 


4 pm dose November 28 


NYSE COMPOSITE PRICES 


NASDAQ NATIONAL MARKET 


4 pm dosB November 28 


„ - ■ ™- W 5* HU— 

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EagySe 191516 12* 12* 1"* 

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Kekma K 6 14b 14b 14b 

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KWjy&d> ® 1179 17b 17* Wb 

KogiEd 30 1® 7* 7 7 


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51 33 12* 12* 12* 

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PM LD 024 16 3402 
PW»oy A 050 20 49 
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PMC DM 14 32 

PrcEktnA OlO 2 3502 


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Men Co O® 30 2 4* 4 * 4* 
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I® Prods i OJO 13 60 8* a* 8* 
Tet&Oaz 036 51 703 44* 44 44* -r* 
TThrmedB 43 2331 13b 13 13 -% 

Ttanahi 24 B6 29* 29b 28* ♦* 
Tism Da 13 14 13* 12* 12* J 4 

TownCnry 4 899 l d% % -b 
Triton 2 167 1* IA 1* ♦,* 

Tunas Me* 8 S 5 4% 5 

TtomrBrA* 0071S3 350 (5%tfT5* 15% -b 
TimUi 0XF71537 1957 15*d15* 15* -* 

(ASFoafeA 5 75 2,** 2 2 

Ukfax&B 020 40 40 3 .2 2 -b 

Utovtonb 43 X 6% 6b Bb -b 
1C Cftoi PU 51 31* 30% 31* 

VtawnA 115 1158 Mb 39b »*4 -b 
Vtacone 6634 38* X* 38 +b 

Wadhertd 36 8222 11* 9% 10* 
WIST i 112 12 57 12* 812 12b *b 
Wortcn DEO 10 72 27* 27* X* +* 

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rip 




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AcmsMfe 5 382 16b 15b 
Aedemta 30 <10 26% 26 
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ADCTeto 321105 44 % 43* 
Addington 5 422 9 dBb 

Ada Sen* 016 16 58 35* 35 

Adobe Sys 020 248305 33* 32* 

Aduanxe 9 ZW 12b 1>% 
AdyLope i® 30 <% 4* 
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AUBU 088 14 192 23b 22* 
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AM Cap 080 12 % 13b 13 

AtoeoeC 032 II 45 2b 2 
AtttGcM Ofl6E5 630 he hi 
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Am Barta, «072 7 924 JO 19* 
AaQtty 016 43 234 16b 16* 
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AmWP I no l£ 1i 

Amfffln , 236 6 33 47 46*4 

AmPwiCom 235260 16* 16% 
Am Tor Iff 17V 15% 18* 

Afflfetfh 024 12 98 20 19* 

Amgen he 19 6850 65b W* 
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Afflifh 5 65 9 8b 

Anatofpc 16 <94 19* 18% 
Aratyaa 052 16 V 19* 18b 
AranpiAm 1® 14 IS 15 15 

Andrew Qt 391232 50 47* 

AntacAn 10 116 15b M* 
Apogee En 032 35 691 ulBb 1?b 
APP BIO 42 674 5 64* 

AOMdAtol 2311400 52% SO* 
A HfeCt 048 14122M 38* 37 f, 
AWebeee 004 ® B58 i$* Mb 
AUK, Or 030 23 30 X* 21* 
Arana 019 17 2069 20 1»b 

Atgoratf 1.16 8 61 28* X* 

Amu Ale 064 18 59 21% 20* 

Amoks h 044 17 493 2Db 19 

ASDeHTd 182729 Xb Zb 

AswcCbrmn 315 20 26* 2S* 
AST Rsrcfi 94 4285 Mb 1* 
Aflttoscn 7 170 10*4 9* 
ADSEAk, 032 95563 15*d14l 2 
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Awntole 092233 10 7 7 


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BBkerHWt IX djj 

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BtofSodttt 052 9 388 17 16* 

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BaVUwry X 451 12* ll> 2 

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Bottom Sh.36 B1380 28% 28 
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books SB a«O0u2&*S* 

Bartend 101122 9* 9* 
Baton Bk 1 076 5 163 X> 2 »* 

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BmdyWA 080 17 152 47* 47 

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BmtaMtg 040 7 186 34 Xb 


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CadSdwps 099 14 61 X* 37 

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Catgena 2JS 4 2248 B 7* 

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CamkteL 19 96 2b «B* 

CrttifiS 1 147 1* dlb 

tann he 053 72 16 86% 86* 

CanaUe 35 110 5% 5* 

CentoDCm 053 X 4 27* Xb 

CfeCtafci 060 17 2 22 22 

CtonS 008 17 506 13b 13 

Cetgwc 5 237 7* 6* 

CSICd 16 3 11* 11* 

Centoae 8 2396 16>2 16* 

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CrtolSgi 16 12 10* 10b 

taarebr 11 43 4* 4* 

Chaffer 1 068 6 237 18* 18* 

CnrmSti 0® 10 3470 6* 6% 

Ctemfeto 16 10 13 13 

taempower 12 99 4* 3% 

CHpe&Te 31 1369 6 * 6b 

CWanCp 84 9438 <8* 77U 

Dm Fh UB 12 720 48b 47 

Cues Cp 017 ® 831 34» 2 33* 

Ckrusigc 117054 Z5*d24* 

CSTedi 3T 792 3 2% 

CcscoSts 2446075 X 32% 

Cn Brncp « i.« 13 21 X* 3i% 

Ckan Ht, is 52 6 ®b 

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DoOKStn 77 97 4% 3% 

CocaCoUB <1® IS 63 24* d24 


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CodeAtann 13 37 10* 10* 
CapmCp 28 471 23 22* 

Cognus 39 532 14* 13% 

CDtuert 14 605 14* 14 

CoBaom 015 35 2412 X* X* 
Cdrt Gass 158 11 24 19>, IB 

CtM&p a»17 » 32 31* 
Comatr 032 11 1377 17* 16* 
CmcMA v Offl 198370 16* 15% 
CmcaASp » 0.09 S1032B 16* 15?, 
CamaahsfQ® 10 10D 2^2 29 
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CemmC 16 919 X* X* 

CWTWtate 812 657 B* 7% 
taiBtua 250 65 12* ii* 

Comssdtf 15 1280 3 5 ; dZiJ 

COfEdrifn 5 61 6k 6* 
CortelCd 50 234 24* 24* 
CntrCas ISO 373 6* 6 

CoorsAt 0»® 303 16* 16% 
coRrae s 408 5x2 5b 
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Corn 01 A 34 558 15* 14* 

DadierB 032 J9 3C59 19*2 IB* 

Cray Camp 1 689 1% 

Crown Bes 25 157 5 4* 

Cytogm 2 627 3% 3% 


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16* 16* 
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29*<E8b 
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20% 19* 
17* 16* 

IS* 14* 

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X* 36* 
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29* 27% 
13* 12* 
8* 8* 
10* 9* 
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17* 17* 
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Ito (kg 

16* +* 
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20% •% 
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3ft -il 
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23 +% 
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W Eh 

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18* 18* 
50% 50% 
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11 * 11 % 
13* 13% 
1* 1* 
2* 2* 
4% 4% 
56* 56* 
7* 7% 
12 * 11 * 
21% X* 
5% 5* 
16* 15* 
X* 21 
12 * 11 * 


Fai Grp 

Foi Cp 024 
Faslend 004 
fflPM 

BftnThrd 1 J* 
RftyOCf 

figgwA oja 
Rent 

firetAm 1® 
FstBcONo * 1JD 
RdCdBk 060 
FstSedy, IM 
FstTaon IBS 
FedhdMc, 058 
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FtowH 

FootLA (US 
FooAB 0® 
FofBnod 1® 
Fondrer 
Foster A 

FfSiFkl UK 
FaFM 040 
FstKtoojx 1.18 
FdterlQ 058 
Fjetmfio 0B8 
firai 024 
FinmedADR 


- F- 

9 32 4* W* 

40 2 6* 6* 

47 970 41* 40* 

15 854 26* X* 

13 1468 X 49* 
12 148 4* 4* 
0 301 7 6* 

19 ®4 25* 24* 
7 BS8 28 27 

10 332 X* 22* 

16 285 Xft'19* 
9 2768 24*424* 

11 1048 42* 41* 

6 763 19* 18* 

10 rlOO X* 30% 

31 122 9 8% 

2316B2 X* 20% 
X 92 6b 6* 
15 782 5* 5* 
932038 S% 5* 

12 45 33* Mb 
91013 11* 10% 

11 42 3% 3* 
1) 165 30* 29* 

7 151 14% 14 

11 234 27 X* 

18 174 31* X 
11 BE 17*d18% 

17 SI 21*2 20k 
TO 17 2% 2* 


GHApp 

GSKServ 

GMbs 

6*mtlfc 

Gen Co 

Get, Bind * 

Gertyte 

GtrefePh 

tatoCp 

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GarcynB 

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Qdtorgtlr 

GttenA 

StoBtam 

Good Soya 

GaMsPmp 

tadcoSys 

Grartto 

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fttoflinafe 

GtndMv 

GT1 tap 
GDNVSeg 


31 SO 
007 X 27 
5 IX 

10 45 
018 9 167 
042 18 67 

9 5 

24470 
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232SB3 
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012 13 1043 
080 9 4 

12 X 

11 411 
06021 281 

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020 12 68 
024 13 6 

62 356 
16 17 

18 526 
4 422 


2* 1% 
18* 15b 

2ft 1% 

3* 3* 
6% 6* 
20* 16* 
3% 3% 
5b 4* 
21% 2D* 
B* 5% 
31 X 
14 13* 
14* d14 
14% 13* 
6b 5% 

12b 11% 
X 20% 
3% 3* 
20* a* 
18* IB* 
2* 2,% 
14 13* 
16* 15 

6b 7% 


tattoo A 78 732 
Harteeyvt 068 15 7100 
taper Gp 0X13 102 
HanaCngi 52 

WO 8 Co 016X2S31 
Heatocar 22 2542 
tettcre 0® 14 222 
HedSefyn 21 546 
teenager 016 15 2348 
HeWraj 17 X 

KetanTroy 10 160 
H»W 088 9 3348 
HogsnSys 015 14 368 
tknogt 16 368 

Home Bod *080 971® 
HonhOSi 044 15 386 
Homfiett 21 Ml 
HoaeMtos 044 38 IM 
Hurt JB 020 14 587 
Kmthgtn 080 8 1712 
HmcoCo O® 1 15? 
HuUIech 33 1030 

KycorBto 11 IM 


7* 8% 
22 * 22 * 
14* 14 

12 11 * 
Eft X% 
29% X 
11% It* 

8* 8b 
11 10 * 
9* 9* 
18 T7% 
17 16* 
5* 5* 
13* 12% 
I9*di9b 
xb a 
13ft 13b 
5 4% 
15* dlS 
16* 17% 
•* 3% 

26% 24* 
4b 04 


FRSys SO 3 9>i 9 B* +* 

OBCOnm 3 5958 6* 8* Bft -ft 

®mw a 83 a 2!2 3 

kreran, 52 M 6* 5% 5% -b 

knnamegen 2 812 4% 4b 4b -* 

Impel Be 040116 47 14 13% 14 

Indhs 024 56 5 11* 10% 10* -b 

MRes S5 970 15* 14 15* +1* 

H amii 2919434 27* 25* 27b +1* 
hpedMl OlEE 11 94 10b dIO 10 -b 

We?Oev 155220 27 X% Xb -% 

totgPSys 37 34 18* 15% 18* +* 

ngnw&t 10 380 3 ?* 2* -b 

ttd 02* M518SB6&27 82% 85* +)% 
htoS 111M8 2% 2* 2% +* 

h&iB 040 11 52SO 0*612% 12* -ft 
kferTel 13 338 7% 7* 7* -* 

Wffirtc&A 024 13 196 10% 10% 10* WL 

htgph 2 1357 ff* 7JS B -% 

TOrtes, 2 388 4% 4 t % 

Idente 7 628 17% 16% 18% +* 

htsme 331 XB 13% 13 13* 

MOuyOA 13 311 17% 16% 16% -* 

irate 0® 11 841 2* d2 2 -b 

trtloU 275 19 5% 5 1 2 5b 

kMcare 005 IB 233 3? 31 31* ♦% 

kmegoCp 3 801 3* 3ft 3Jz +ft 

Sanaa 13 233 16% W 76% ♦% 
uru aSO 1.14152 19 209 207X7* -* 


JSJSnxh 

JtBOntE 

JIG tod 

jrtvaonW 

Jones hi 

Jones Med 

JodjnCp 

JSBFfel 

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Juste 


- J- 

362 12% 11% 11% 

It 9 8* 9 

<19u41% 40 41* +b 
6? 20 QZD 20 

609 14 13% 13% 

219 8% 6% B% -% 
X X* XX*-* 
63 23% 23 23* 

267 *8% 18* 18% +* 
ZZ9 12% 12 12 -% 


K Safes 

toman Cp 
KrteyM 

Italy Or* 

Katouky 

KtaM 

Khdm 

lOAtosr 

Wedge 

KdBA 

Komagtoc 

KUidceS 


008 9 21 
044 11 370 
21031 
072171385 
071 33 J9 
084 14 1149 
X 21 

29 3902 
2 5<2 
1 463 
41 X3 
16 1882 


21* 20% 
10 9% 
5* 4% 
26* 25% 
6% 6 
24* 23* 
10 * 10 * 
50% 49* 
4 3% 

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X* 24* 
20% 19 


20% -* 
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10* 

49% 

3% 

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24% 

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18% -% 
50% Je 
19* J» 

4* -% 

11* 

tt% •% 
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2b -b 

4% 

56% Jg 
7* +% 
12ft We 
20% *% 
5% 

15* -% 
21* 


4* 

6* 

41 +* 
26* +* 
49% 


24* -* 
27% -% 

22% -ft 
19% Je 
24* 

42 -% 
19* +% 
30% 

9 

21% +b 


5* -b 
X* ♦% 
11b *h 
3b 

30* +* 


31 +* 
17* 


1% -* 
15* 

2 

3* 

6% +b 

19% +1* 

3% 

5b +* 
20* -1* 
6* +* 
30% +% 
13* -* 
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Mspa&p OX 101436 
IMBU 23 72 

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MFSCm 23 1729 
UetMF OX X 536 
WCHNQ® 2D0 5 260 
MktoHOi B 40 
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Mcrocom 561288 
Mkrgndx B 204 

Mcrpofe 3 799 
MlCSfl 31X539 

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MMW&afe 0X15 52 
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UoUeTrt 87 3848 
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uoacnm 004141 591 
MoafcweP 0J8 IB 18 
MTS Sye 056 9 30 

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Myctum 4 287 


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12 * 12 % 
32* 32* 
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17% 17* 
10% 10 
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41% 41 

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11 * 10 * 
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28* 25* 
27* 28* 
24% 24* 
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080 14 K 18% 18* 18* -b 

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11 213 5% tfi* 5% 

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OdeBcs A 19 37 
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OgUayNilX 5 10 
OHeCB, l-« 10 101 
OldKert 124 91752 
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OntuSuto 27 45 
OregenMei 031 12 1 03 
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30% 30% 
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38% 38* 
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206 2289 45% 42* 
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18 <52 5* 4% 
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012 104482 21* ZOft 
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Stock Otoi E Hfe Sgb toe Ifet Cam 
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Qrickafc 17 177 16% 18% 1B% +ft 

OICtK 44 083 43* 43* 43% -% 


Lftene 072 34 47 16* )9 16% +% 

LaddFum 012 22 140 8 5% 5% -ft 

tauten 223095 42 41 41% +1* 

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Lance Inc OS6 17 939 17*016% 17 ♦* 
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tatofrta 13 130 B 5% 5.77 -J4 

Laaerecw 23 286 4 3* 3* -% 

LiltHxS 13 1485 18% 16% 16* +% 

Lawson Pr 048 181187 25* S 25b 
LDOS 20 3652 21* T&2 2D > 2 -ft 

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UnearTec 028 X 2949 48ft 47 47* +% 

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loewoiGp OK » 566 25% 25* 25* -* 

lone Star 14 33 7% 7% 7* 

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Stepta 363421 

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SB Hero 131902 
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SrwYtta 1.10 10 26 
StracTflly 12 888 
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SunmacMUM X 250 


SunmtTa ® 1489 

Sui Sport 12 132 

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^nergen 210223 

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TCA Canto 044 24 X 
TacKMa 176422 
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West One 088 9144? 
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: -6-^4'^' few’- 




40 


WORLD STOCK MARKETS 


FINANCIAL TIMES 


- C -». 


Tuesday Ncyyea ifeeir/29.- $994 </ 


AMERICA 


EUROPE 


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All 


Retail stocks 
benefit from 
Thanksgiving 


Wall Street 


US share prices gained mod* 
estly yesterday morning as 
investors looked for good value 
amid the wreckage of last 
week's sell-off, writes Lisa 
Bransten m New York. 

By 1pm the Dow Jones 
Industrial Average was up 
18.84 at 3,727.11. The more 
broadly based Standard & 
Poor’s 500 rose 0.51 to 452£0, 
while the American Stock 
Exchange composite lost 0.46 
at 434J23. The Nasdaq compos- 
ite was up L77 at 74429. Trad- 
ing volume on the NYSE came 
to 150m shares. 

The Dow feD more than 140 
points in the first three days of 
last week and then posted a 33- 
point recovery on Friday in 
extremely low volumes. The 
market was closed Thursday 
for the T hanks givin g holiday 
Some analysts still believe 
there may be a traditional 
year-end rally but most are 
bearish about the longer term 
prospects for the market Sta- 
tistics released early in the 
morning showed sales of exist- 
ing homes had increased 0.5 
per cent in October, in spite of 
increasing interest rates, and 
many fear such data could 
prompt the Federal Reserve to 
raise interest again in the near 
term, thus depressing corpo- 
rate earnings. 

Prices of leading retailers 
were mixed with companies 
posting gains outpacing those 
showing losses after reports 
from shopping malls across the 
country of a busy Thanksgiv- 
ing weekend. 

Stores showing increases 
included Nordstrom S% higher 
at S46'/i, Gap 8% at 836, Ann 
Taylor $% at S39K. Dillard 
Department Stores S'A at 527%, 
Dayton Hudson $% at 878%, 
and May Department Stores S% 
at S36V«. JC Penney fell $1% at 
S46'4 and Sears, Roebuck was 


S Africa pulls back from high 


Johannesburg pulled back 
from early highs to finish lit- 
tle changed after worries 
resurfaced about the prospects 
for further declines on Wall 
Street later in the week. 

Traders said golds were 
attracting interest at current 
levels, but needed a higher 


bullion price before a sus- 
tained rally could be expected. 

The overall index collected 
2 JS to dose at 5,833-9, after an 
early peak of 5,850-9. Industri- 
als rose 4.9 to 6,934.2 and 
golds put on 1(L3 at 2,056. 

De Beers finished 50 cents 
weaker atR9&50. 


MARKETS IN PERSPECTIVE 


H d«na> In local camnqr t 

« cMnge ; 
■Mngt 

% dmgt 

In Wit 


1 DM 

4 (tonka 

1 Y«w 

Starter 
VMM 1 

Start or 

am 

sonar 

1904 

Austria 

+0.74 

+1X0 

-487 

-13X7 

-8.88 

-3.74 

Belgium 

+0.72 

+2.01 

-3.70 

-8X0 

-2.76 

+2.73 

Denmark 

-0-69 

+1.35 

-3X2 

-10.15 

-5X4 

+0.00 

Finland 

-4.1 B 

-5X4 

+25.14 

+22X4 

+39X7 

+47X2 

Franca 

+0.71 

+2.06 

-887 

-13.47 

-9.70 

-480 

Germany.. _ 

-2-14 

+0.44 

-Z68 

-10.97 

-6.13, 

-0.83 

Ireland 

-187 

-a 85 

+5X4 

-1X9 

+1.89 

+7.63 

Italy - 

-4X2 

-2X7 

+16X1 

+1.12 1 

+1X9 1 

+7X1 

Netherlands 

-1.04 

-1.76 

+1.00 

-5X8i 

-0X6 

+5X8 

Norway .. 

-0X4 

-0-96 

+5.00 

-1X6. 

+2X5 

+8X3 

Spain 

+0X5 

+3X4 

+0.01 

-7X2 1 

-3X7 

+1X6 

Sweden 

-1.19 

+1.44 

+15.41 

+7X4 j 

+13X8 

+19.48 

Switzerland 

-1.09 

+3.49 

-3.79 

-11.00 

-5X7 

+0X7 

UK — .. . 

-34J7 

-TA7 

-1.67 

-10X7 

-mss 

-5X5 

EUROPE 

-180 

+082 

-087 

-0X1 

-8X4 

+1X7 

Australia — 

+040 

-482 

-4.72 

-10X1 

-4.95 

+0.41 

Hong Kong 

-880 

-881 

-8X7 

-29.04 

-32X6 

-29.08 

Japan - _ _ 

-241 

-5.14 

+0X0 

+2.71 

+9.86 

+16.06 

Malaysia — 

-4X8 

-8.71 

+6.09 

-10.94 

-20.18 

-15.65 

New Zealand 

-3.48 

-5.70 

+1X9 

-4.08 

+088 

+6X6 

Singapore 

-5.78 

-682 

+9.86 

-7X6 

-4X4 

+1.05 

Canada 

-0.74 

-480 

-0.70 

-2X8 

-11.10 

-6.08 

USA 

-180 

-4X5 

-1X9 

-2X1 

-7.71 

-Z51 

Mexico 

+2X5 

-4.18 

+12.16 

-587 

-19.53 

-14X9 

South Africa 

-1-41 

+1.85 

+41.02 

+1988 

+16X1 

+22.77 

WORLD MDEX 

-2.17 

-3X6 

-081 

-3X5 

-382 

-3X3 


n&taM. CopyTtom it» naanefcl Tima UmBadl Gofcto-n, Sacfta a Co, 


FT -ACTUARIES WORLD INDICES 


Bourses search for inspiration amid dull trading 


off 5% at $47%. Wal-Mart was 
unchanged at $23%. 

Shares of RJR Nabisco Hold- 
ings fell $% at $6%, in spite of 
news from the consumer prod- 
ucts giant that it was develop- 
ing a smokeless cigarette. 

Campbell Soup shares were 
op at $43% after the com- 
pany announced that it had 
agreed to buy Pace Foods, the 
salsa mak er, for 51-lbiL Camp- 
bell said that the deal would 
probably dilute eamings-per- 
share in 1995 and 1996. 

Canada 

Toronto fell slightly in quiet 
midday trading as interest rate 
concerns and weakness in 
other markets sapped inves- 
tors' confidence. 

Declines in golds, financial 
services, and energy stocks 
outpaced gains led by conglom- 
erates and forestry products. 

The TSE 300 index eased 3 -S3 
to 4095.40 in low volume of 
19.1m shares. 

Among active stocks. Stelco 
class A topped the list, rising 
C§!4 to CS7% while Federal 
Industries class A traded fiat 
at C85%. 

Bank of Nova Scotia fell C$M 
to C$27% ahead of fourth quar- 
ter results due later this week. 

Brazil 

Shares were off 1.3 per cent in 
S§o Paulo by midsession 
although activity was slow. 
The Bovespa index was off 569 
at 43,418 at 1 pm In low turn- 
over of R$70m ($8L7m). 

Telebras preferred was down 
1.5 per cent at RS36.35. 

Venezuela 

Shares fell in Caracas as the 
forthcoming share subscription 
from Electricidad de Caracas 
weighed on sentiment 
The Merinvest composite 
index was off 0.60 at 116.64. 


The Continent's bourses 
mostly started the week with 
little d esire to move ahead. 

FRANKFURT struggled to 
make progress and the DAX 
index closed the official session 
a scant 6B3 higher at 2,058.45, 
losing this in the Ibis session 
to settle at 2.050.82. Turnover 
came to DM4bu 

In chemicals, Bayer, up 
DM4.30 at DM344.30. led the 
way after reporting a third- 
quarter profits rise of more 
than 30 per cent compared 
with the same period In 1993. 

The company said that it 
expected to see a continuation 
of performance throughout the 
rest of the year and might lift 
the dividend payment from the 
DM11 level of 1993. In common 
with the market, the stock 
drifted lower in the post- 
bourse, to close at DM342.10. 

Elsewhere, BASF firmed 20 
pfennigs to DM307.50 and 
Hoechst which releases figures 
tomorrow, rose 50 pfennigs to 
DM318.00. 

The car sector concentrated 
on Volkswagen, off DM10.60 
at DM441.20, and then to 
DM43.50 in the post bourse, as 
Deutsche Bank downgraded its 
1995 earnings per share fore- 

ASIA PACIFIC 


cast to DM24 from DM32. 

PARIS notched up an unim- 
pressive rise, while turnover 
was an unexceptional FFr3bn. 
'Hie CAC40 index added 6.49 at 
1.952.38. 

Rhone-Poulenc sank FFr280 
to FFr134. 50 following what 
was perceived as unfavourable 
comments in the local media 
by the company. 

Carrefour, which benefited 
earlier in the session from an 
upgraded opinion from Merrill 
Lynch, closed the day just FFrl 
higher at FFr2.150. Mr Charles 
Allen, European retail analyst 
at Merrill, said that he bad 
been positive on the company 
for some time, given its strong 
exposure to developing mar- 
kets and the prospect of 20 per 
cent earnings growth over the 
next five years. 

MILAN staged a broad 
advance, making the most of 
the calmer political situation, 
but Credito Italiano was a 
heavy loser as speculation 
grew that it was about to raise 
its bid for Credito Romagnolo. 
The Comit index finished 4.04 
higher at 627.21. 

The FIB 30 futures index 
made a reserved debut, 
although all three contracts 


I.FT.-SE Actuariss.Shs 

iTl 

dices 



□ 

Nov 28 

Hwijr changes 

Open 1030 

1100 

1200 

THE EUROPEAN SERIES 
1300 1400 1000 Ck» 

FT-SE Eurotra* 100 
FT-SE Eurotra* 200 

133010 133029 
139104 1391S 

133043 

laetoB 

133070 

138008 

133022 

139029 

1335JB2 

138731 

1333J6 133502 
138578 1387X4 


HW25 

NH 24 Hot 23 

Ito 22 

Not 21 


KriiahiNBift* 


FT-SE Eucotnck 100 13ZBJ7 132955 13053 133143 1351.17 

FT-SE Qrotradi 200 138081 138340 1370*1 mUS 141L82 

B09B W00 Gt/IOTC* HtfUCJr KB - 13SM; JDO - 13B1.71 lS*OS*f. KB - 13333* 3# - 138U0 1 MM 


quoted registered gains. 
Futures volumes were modest, 
but dealers said that this was 
to be expected as investors 
waited to see how the index 
fared before committing them- 
selves. 

Romagnolo, which rallied 3 
per cent last Friday, was 
suspended yesterday, pending 

an announcement 

Italiano fell L66 or 4 per cent 
to L1.572 amid expectations 
that it would raise its bid for 
Romagnolo, and also seek 
more t han the 48 per cent 
stake mooted when its bid was 
launched a month ago. 

C-ir, Mr Carlo De Benedetti’s 
industrial holding company, 
appreciated L32 to LI ,801 while 
Olivetti was L26 stronger at 
L.1,891. amid reports that Mr 
De Benedetti was willing to 


sell his 5 per emit stake in 
Romagnolo. 

ZURICH put in a firm early 
performance in response to the 
dollar and bonds, but edged 
back from its best levels an a 
lack of follow-through buying. 
The SMI TTiriPT finished 6.9 
higher at 2,575.4. 

UBS bearers dipped SFr5 to 
SFr 1,130. After the bourse 

dosed, the bank said that the 
Zurich district court had 
imposed a temporary liar on 
the registration of phang ps to 
by-laws, agreed by last week's 
extraordinary shareholders 
meeting, which agreed the cre- 
ation of a single category of 
charna The bank aiWwi that, it 

was not surprised by the deci- 
sion. 

Bearer shares In Von Roll 
picked up SFt 31 to SFr230 on 


• V** -•>, 

• • .. • ' . r 

•I 4 ?' • -tkidaoB on w am il p 

• * ■ V| • ■ ,, r""' (11 V ?• : • 

12P 

i"A ... 

.iot*"' • 


•"flQ: 


an* "'-od: ' ■■ teei'-'-Wi 


the View that the price had 
fallen too far last week after 
news that the technology 
group was cutting Its equity 
capital by 90 per cent 

A SFr35 advance in Bank, 
Julius Baer to SFr 1^280 was 
attributed to a buy recommen- 
dation. 

AMSTERDAM picked, up 
ground after Friday’s loss but 
activity was slack. The AEX 
index gained 1J99 to 408.44. 

Royal Duh& strengthened 90 
cents to FI 186.70 with Paine 
Webber of the US said to have 


raised its opinion on the stock. 

OSLO finished higher as 
unofficial estimates of very 
heavy turnout in the country's 
EU referendum, and the .last 
minute opinion polls, raised 
the prospect that supporters of 
membership might win the 
day. The All-share index dosed 
&J5 higher at 60552 In ton* 
overofNKiSOteL 
- Norsks Skog Tree, regarded 
r as having much to gain from a 
“yes”, vote, were qp NKr4 at 
NKrl77. 

' Dealers noted that a *yes* 
could, paradoxically, lead to a 
sharper market foil than a 
“no", since sl majority was 
unlikely to be wide enough, to 
secure automatic parliamen- 
tary ratification, leading to far- 
ther w eeks of uncertainty. 

STOCKHOLM strengthened 
in slow dealing, with- the result 
-from Norway dare way or the 
other unlikely to have a rignffi- 
cant . impact . an. prices.. The 
AffltrsvSrlden general index 
put on 7J2 to L50SLB. . 

MoDo B gained- SKz2 to 
SKr350.50, - following an 
upgrade. . • 

Written and edited bgr John- Pitt 
and Mehsal Morgan 


Arbitrage and public fund buying helps Nikkei rally 


Tokyo 


Arbitrage buying and pur- 
chases by public funds pushed 
share prices higher, and the 
Nikkei 225 average snapped 
out of weakness following five 
consecutive sessions of 
declines, i orites Emiko Tera- 
zono in Tokyo. 

The index ended 144.43 
firmer at the day's best of 
18,811-36 after opening at a low 
of 18,727.75. Activity, however, 
was slow and volume totalled 
184m shares, against 260m. 

A higher futures market 
pushed up stock prices, while 
public funds absorbed selling 
by overseas investors. But 
most investors remained 
absent due to continued wor- 
ries over share price move- 
ments on Wall Street 

Traders fear that a foil in US 
shares will prompt profit- 
taking in the Tokyo market by 
US pension tend managers, 
who have been active buyers 
since the start of the year. A 
further weakening of the yen 
could also prompt selling by 
overseas Investors eager to 
lock in foreign exchange prof- 
its on their Japanese stock 
investments. 

The Topix index of all first 
section stocks rose 7.40 to 
1,491.42, while the Nikkei 300 
put on L43 at 274.16. Rises led 
foils by 656 to 332, with 189 
issues unchanged. In London 
the ISE/NIkkei 50 index gained 
2.13 at L22639. 

In spite of the rise in the 
indices, 63 issues hit lows for 
the year. The lack of fresh 
news on the mam market trig- 
gered some buying of small- 
capitalisation stocks on the 
second section, the latter's 
index advancing 14.76 to 
2,069.10. 

Nippon Soda added Y17 at 
Y587 on reports that it was 
seeking to market a high-tech 
glass that cleans itself using 
ultraviolet sun rays. Specula- 
tors sold Ashimort Industry, 
winch fell Y3G to Y649. 

Japan Airlines lost Y29 at 
Y681 on reports disclosing its 
huge unrealised foreign 
exchange losses. The company 
said it had around Yl76bn in 
exchange losses stemming 
from 10-year forward rate con- 
tracts made in 1985 to 1986. 

Brokers, which have been 
weak on fears of poor earnings, 
rallied. Nikko Securities rose 


Y20 to Y1.Q20 and New Japan 
Securities Y15 to Y645. 

High-technology shares were 
higher, Oki Electric gaining 
Y14 at Y693 and NEC YI0 at 
Yl.150, but Sony slipped Y20 to 
Y5.14G. 

Privatisation issues were 
firmer. Japan Tobacco 
improved Yi.ooo to Y961.000 
and Nippon Telegraph and 
Telephone Y5.000 to Y834.000. 

In Osaka, the OSE average 
moved up 64.39 to 20.810.72 in 
volume of 168m shares. 

Roundup 

A lethargic mood afflicted 
much of the region. 

SEOUL extended early losses 
on aggressive selling by insti- 
tutions moving into cash, and 
the composite index receded 
1L97 to 1,069.48. Volume, how- 
ever, was a light 31m shares, 
compared with a recent daily 
average of 50m. 

Dealers said concern about a 
liquidity squeeze also cast 
gloom on the market, adding 
that some institutions had 
been forced to buy corporate 
bonds to limit recent yield 
rises as a result of tight 
liquidity. 

HONG KONG finished little 
changed, with sharp early 
gains foiling victim to caution 
about the future direction of 
US financial markets. The 
Hang Seng index ended 3.54 
up at 8,66287 after touching 
8,751.18. Turnover dipped to 
HK$2.2bn from Friday’s 
H K$2.7 bp_ 

HSBC topped the actives list 
and held steady at HK886, fol- 
lowed by Hongkong Telecom, 
which gained 30 cents at 
HKI15.35, and Hutchison, 
unchanged at HKS3180. 

Flayers noted that index 
futures had stayed at a dis- 
count to the spot index until 
very late In the day, adding 
further to market wariness. 

SINGAPORE followed the 
same course, dosing flat after 
trimming most of its early 
gains in a trendless market. 
The Straits Times Industrial 
index gained only 0.22 at 
2,237.97, after dropping from 
the day’s peak of 2,25483. 

Singapore Telecommunica- 
tion, which reported a 138 per 
cent rise in net earnings, shed 
3 cents to SS287. 

Analysts said funds were 
only likely to become inter- 
ested in the stock when it fell 


South Korea 

Seoul S£ Composite 
1800 — * 


1,100 


1.GOO 



900 1 * — 

Aug 1994 

Source: DUasirann 


Nov 


more in line with market val- 
uations. 

KUALA LUMPUR drifted for 
much of the day before pnriing 
weaker as investors liquidated 
holdings near the close to trim 
losses. The composite index 
slipped 629 to UX&23 in esti- 
mated volume of 798m shares. 


Country Heights, the prop- 
erty developement group, rose 
90 cents to MS680 on good cor- 
porate results. 

TAIPEI drifted down amid 
late profit-taking after rises in 
the previous two t rading days. 
Brokers said they expected fur- 
ther consolidation before the 
December 3 elections. 

The weighted index lost 5545 
at 6,384^0 after an intraday 
high of 6,475-22. T u rnov e r was 
TS348bn. 

Profit- taking focused on tex- 
tiles and steels, which had 
gained most in previous ses- 
sions: Shinkong Fibres 
retreated TSL60 to T83080 and 
steel group Kao Hang Chang 
T$L30 to TS2980. 

Low-priced fund shares 
which are expected to issue 
high dividends in early 1.9 95 
attracted some buying from 
institutional investors, with 
Core Pacific moving up TS(U0 
to TS1L35. 

President Enterprises rose 


TJCL50 to T$55 on news that 
five foreign companies planned 
to invest T$L9bn to buy 12 per 
cant of its unlisted affiliate 
President fitunn Store. Farm- 
ers Bank climbed by the daily 
7 per cent Unfit to T848.10: on 
its debut. 

wavtt.a foil sharply at Hur 
dose as i n ve s tors sold holdings 
in major issues, including 
Petron. The composite index 
lost L6 per cent. 

Petron was hardest hit dur- 
ing the market’s retreat, foiling 
4.6 per cent to 2080 pesos. .... 

Property shares, which in, 
early trade showed resilience, 
also fell: Filinvest Land 
declined 2J2 per cent to 980 
pesos and Megaworld Proper- 
ties dipped L5 par cent to 1625 
p esos. . 

SYDNEY was firmer but sen- 
timent remained cautious as 
investors looked to the start of 
trading in New York. The All 
Ordinaries index closed 1.6 up 
at 1,918.0 in turnover estimated 


at A$3l2m. The December 
futures contract was 7 ahead at 
1800. ' . 

Among banks, ANZ lost 6 
cents at - Ag888 following 
recent gains- on better than 
expected results last week. 
Other banks were also weak, 
-NAB losing 2 cents at AJ10.72. 

BANGKOK fell on a lack of 
incentives afte r gaining almost 
10 points irttbfi morning. The 
SET index, dosed 786 lower at 
1,342.13, after fluctuating 
Jbetween .1*33187 and 185886, 
inthtoturnovarofBtSjam. 

Profit-taking, particularly in 
.finance repuntors, . surfaced 
, after tiielnddxmbviBd dosed to 
the M59 Resistance level, 

' according to:hrakm& 

Buying interest em e rge d in 
■ bank and building materials 
stocks before i the close. The 
. bunding ; materials sector, led 
.lqr.SSanr Cement which jumped 
Bt24 to BU.360 on a 34 per 
cent rise in net profits, was the 
biggest gainer. 


Jointly compand by TTw Financial TTmaa Ltd., Goldman. Sachs & Co. and NatWea t Saeurtta Ltd. m confuneton wftn tha Institute of Actuates aid the Foody of Actuates 

NATIONAL AW 

REGIONAL MARKETS (TODAY NOVEMBER 25 18M THURSDAY NOVEMBER 24 1994 DOLLAR MDEX 

Figuos In pofc'tfiwraoa US Day's Pound Local Local Gross US Pound Local Yea- 

show number of Snas DoBa Chonpa Staring Yen DM Oarsncy 9C chg CUv. Doter Storing Yan DM Currency SB week 52 wed< eao 
at am* Indan W index indw bides Index on day Yield mdan hides Index tedax tedot Hk#i ba* (approx) 


Austria PH). 
Austria fl 65- 
Belfltum f35)- 
Brazfl (2Q- 


003). 
DerOTisrit (33). 
FMflndP4— 

France 002). 


GetmanyM- 

Hong Kong (66). 

Mori (14) 

itWW- 


.167^0 

-178.06 

.167.09 

. 163.35 

.. 127.53 

.^47^0 

.181.38 

-167.87 

.138.08 


Japan (46% 


m- 

(18J™. 

S “ Natiwtend (19)- 


-19935 

73.40 

-151.03 

—48995 

JQ2978 


_209.5e 


NewZaoSttdW- 
NorwaytMJ- 


.7223 


E Singapore fM)- 


-194^61 
-871 JO 
JSZI3T 

.141^2 


South Africa (SB). 

Spdn P® ^ M 

Sweden pq 

SwWokJ (471 

Thailand (4Q — .1»« 

untied Ktegdom (204) 19284 

USA (51^--— 18&1S 


1.4 

158X4 

104X1 

135X0 

148X8 

1.4 

3X9 

16022 

156X2 

102X1 

133X5 

144X5 

189.15 

149X8 

OX 

188X0 

111.18 

144X1 

144X8 

OX 

1.13 

177X2 

168X1 

11027 

143X7 

143X4 

198.89 

167.46 

02 

15049 

104X1 

13041 

132.10 

ai 

4.18 

16079 

158X1 

103.78 

135.11 

131X0 

177X4 

152.74 

-4X 

154X4 

101X8 

132X8 

258X8 

-3.7 

Q.BO 

170X1 

161X3 

108.16 

136X1 

20019 



ai 

120X7 

79.82 

103X8 

127.09 

ox 

2X9 

127X9 

120X2 

79X7 

103X0 

126X2 

146X1 

12054 

02 

234.48 

154X3 

200X5 

20027 

as 

1.43 

24072 

234.17 

153X1 

199.86 

204.73 

275.79 

23027 

-OX 

■^1 

11324 

147X0 

183X3 

-04 

076 

1B3X9 

173.78 

113X2 

148X2 

183.71 

20141 

116X5 

04 

159X3 

104X0 

13006 

141X3 

05 

3X4 

167.14 

15064 

104X0 

13640 

14033 

185X7 

159X4 

-02 

131X3 

86.83 

112.72 

112.72 

-OX 

1X4 

139X9 

132X1 

8073 

118X2 

112X2 

15040 

128X7 

08 

339.10 

216X6 

281X7 

344>4S 

ox 

348 

34540 

327X4 

214X2 

279X1 

342X8 

508X6 

341X9 

-02 

189.10 

124.48 

161X7 

182X5 

ai 

3X1 

190.75 

189X0 

124X9 

181X2 

182.16 

216X0 

172X9 

-1.4 

68X2 

45X2 

50.49 

88.07 

-IX 

1.78 



4033 


EEI 


■rm 

-03 

14028 

94X9 

122A0 

84X9 

0.1 

032 

151.44 

143.74 

64X3 

122X8 

94X3 

17010 

124X4 

03 

47028 

311X0 

404X8 

491X8 

ox 

1.71 

49742 

472.13 

309X1 

402X6 

49002 

621X3 

43071 

28 

1926X6 

1287X0 

1 

784065 

2.0 

134 

1989X0 

1888X3 

1237X0 

1811X8 

7484.70 

2647X8 

1696X8 

-0.1 

18880 

130X4 

189X8 

167X4 

Kim 

348 

209.73 

199X7 

130X0 

169X1 

187X0 

223X0 

187X3 

0.4 

68X1 

45.09 

58X4 

81X3 

04 

4.73 

71X8 

88X0 

Kiri 

5SX9 

M.P-tX 

KFF1 

Hril 

-0.1 

184X0 

121.49 

157.72 

180X2 

aa 

1.63 

194.79 

184X9 

121X0 

167X0 

18046 

211.74 

165X2 

03 

warm 

231X7 

301X1 

250X1 

02 

1.70 

37QX8 

351X5 

23046 

30005 

250X2 

401X8 

284X8 

-1.1 

311X9 

204.^ 

285X0 

289.78 

-0.7 

2.15 

331X9 

314.72 

20032 

268X1 

301X6 

342X0 

205X5 

05 

134X3 

8035 

114X9 

139X4 

08 

4.19 

14081 

133X5 

87X1 

114X7 

138.67 

155.79 

128X8 

-08 

ww 

14045 

19012 

2S9X7 

-04 

1X4 

238X6 

224X2 

147.19 

191X3 

280X7 

242.81 

175X3 

ai 

1S2X2 

10006 

129X8 

131X2 

01 

1X8 

16012 

151X8 

9083 

129.71 

131.11 

17058 

14071 

-04 

14038 

97.66 

128.78 

151X8 

-04 

2X9 

157.10 

149.11 

97.75 

127X7 

152X8 



-01 

182X2 

120X9 

156X9 

182X2 

-ai 

421 

192XS 

183.14 

120X8 

156X1 

163.14 

214X6 

181.11 

08 

175X3 

115X9 

150.06 

185.15 

0.8 

2X6 

184.13 

174.77 

114X7 

149.18 

184.13 

106X4 

178X5 


133.05 

23027 

119.71 
163.14 
m4i 

379.03 
173.40 

60.48 

137J8 

47122 

200835 

18837 

63X8 

170.72 

310X2 

22180 

132X1 

181.04 
148.71 



Opening Asian Finance 
to the World 

In two years Peregrine completed over 171 regional equity transactions 
totalling more than US$13.9 billion. 

With a proven track record and a wide range of capabilities and services, 
Peregrine stands for outstanding performance in Asia’s finanroa l markets. : ; 


Americas (062). 

Eurepa (70®-- 
Non*e{1i8) 


-17286 

.167.42 

-223.10 


Pacific Basin (793). 
a*o-PacBfc (1501). 


_169lS4 
-.16281 

North Anwfca plfl) 18188 

flrope Ex. UK (504) ..... 150.07 

Pocffic Ex Japan (323)..^ — 243^ 

World &- LB f1709) 18482 

Worfei Ex LKP018) 168X5 

Worid 6c. Japan (1764) .19282 


TUB World hdflK (2222). 170^2 


OX 

164.06 

107X8 

140.17 

143X6 

OX 

2X8 

172.10 

163X5 

107X9 

13942 

143.13 



-ai 

15081 

104X2 

135X8 

14070 

OO 

3.13 

167X5 

159X3 

104X5 

135.73 

149,75 

178X8 

156X2 

-ox 

211X2 

139X8 

18081 

21063 

-OX 

140 

22442 

213X0 

139X4 

181X0 

211.10 

233X1 

173.19 

-ai 

151.42 

89.88 

128X8 

104.10 

ai 

1.18 

169X3 

161.71 

3946 

12948 

103X4 

178X8 

134.79 

-0.1 

15443 

101X4 

131X5 

122X1 

ai 

2X3 

162X8 

i64.ee 

10141 

132X2 

121X2 

175.14 

143X8 

05 

172X4 

113X6 

147.18 

161.16 

05 

2X5 

180X1 

17143 

112X8 

146X1 

18019 

192.73 

175.67 

-ai 

142X5 

33X9 

121.83 

128X6 

0.0 

2X0 

16020 

142X7 

9046 

121X8 

129X4 

16012 


08 

231.02 

152.05 

197X8 

214.71 

08 

3X4 

242X2 

22071 

15Q59 

196X6 

21340 

296X1 


-ai 

16016 

102.77 

13342 

125.88 

ai 

2X3 

184X4 

15648 

102X7 

133X3 

12&S2 

17085' 


01 

158X9 

106X4 

136X8 



2.18 

188X3 

15949 

104X5 

13812 

139.70 



ox 

173.13 

113X5 

147X3 

17346 

03 

2X7 

182X4 

172.79 

113X7 

14747 

172X6 

195X0 

178X4 

01 

161X5 

106X9 

138.12 

143X3 

ox 

2X8 

17023 

161X7 

105X2 

137X0 

14060 

180X0 

158X5 


1568? 

178.72 
146. SO 
150.63 

184.72 
13688 
237X0 
152.04 
16084 
176X6 


Financial Services: 

Corporate Finance. Stock Broking, Fixed Income. 

Direct Investments, AsstA. Trading, Bond Trading, Darivathres Trading, 


Peregrine 


■ NaNRNG • GUANGZHOU • SHENZHEN ■ SINGAPORE • SEOUL • BOMBAY ■ MANTf-A • mwnrnr 
JAKARTA* KUALA LUMPUR • HANOI « RQCH1MINH CTTY • YANGQN * BRISBANE ■ LOfflXIN’^TOaCH .OTlpTOKX^lSmWN 


PnrtHjrL Tin HnawM TUnro Uirtat flodra. 8ati» Old Oa. 

^Stfpdcn warn iranlflbla far Ns MfiHon. 


and NBBflftrt Sroutete* UMtod. 


163.12 


He*d (Mas 23/FNtow Wodd Toww, 16-18 Queen’s RiL, C. Hong Kong TeL- (852) 825 1888 F«c (852] 845 94H 
uubpednOfficK 23/M Lovaa Lane, London BC3RSEB.UK Tab (071) 283 8888 Fmc (071) 283 0728 

Peregrine Securities (UK) Limited Is a member of the SFA- 




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