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Japan's 
adapt to change 


11 



Optimtott regained 

Brazil's industry . 
flexes its muscles 


P9S« IX 








FINANCIAL TIMES 


Europe's Business Wewsoaoer- 


WEDNESDAY NOVEMBER 30 1994 


D8523A 


scales back 
cost-cutting to 
head off strikes 

Iberia. Spain's lossmaking national airline, scaled 
back amb itions cost-cutting measures in the face or 
union strike action. Iberia, which bad wanted a 15 
per cent pay cut over two years as part of a viabil- 
ity plan to stem heavy losses, accepted the unions’ 
offer to cut wages by 8 per emit The settlement was 
welcomed by industry minister Joan M annp i Bguia- 
garay, who said it set the stage for the injection of 
fresh public subsidies to the airline. Page 14; Fm- 
nair raises FMBOOm, Page 16 

OECD compromise; A dispute over die 
leadership of the Organisation for Economic 
Co-operation and Development was set to be 
resolved with the renewal of the mandate rtf Jean- 
Claude Paye, French head of the economic institute, 
until June 1996. when he will be replaced by Donald 
Johnston, former Canadian finance minister. 

KMmvort to advise Code/co Chiles UK 

investment bank Kle inwort Benson this week 
begins advising Codelco Chile, the state copper pro- 
ducer, an the privatisation of its $500m Tocopilia 
power generating division- Page IS 

Changes at top of BP; David Simon, BP chief 
executive, is to become chairman on the retirement 
of Lord Ashburton. John Browne, head of the com- 
pany’s exploration arm, is to be chief executive. 

Page 15; Observer, Page 13 

Hungary to privatise energy sector; 

Hungary’s new socialist-led government announced 
sweeping privatisation plans for its energy sector. 
Page IB 

Sale of Nncloar Electric recedes: Executives 
at Nuclear Electric, the UK state-owned power util- 
ity, are close to abandoning hopes that the com- 
pany can be privatised before the next election. 

Page 8 

Worst over* for Japan e se broken: The slide 
in the fortunes of the “Big Four" Japanese securi- 
ties companies is over, a report by US credit-rating 
agency Moody’s says. Page IS 

Australia’s trade deficit narrows: Abetter 
export performance caused Australia’s trade deficit 
to narrow last month, brin g in g relief to the Labor 
government and lessening the chances of another 
interest rate increase before Christmas. 

Page 4 

American General, Houston-based life insurance 
group, is in talks to buy Franklin Life, a subsidiary 
of American Brands , in a deal understood to be 
worth about $L2bn. Page 18 

Cartsberg p rofit * Mb Danish brewery group 
Carisberg recorded a 10 per cent foil in annual 
group net profits to DKi885m ($145.1m) because of a 
foil in net financial income. Page 16 

Fresh equity for Goldman Sachs: Privately 
owned Wail Sheet investment bank Goldman Sadis 
secured $250m in equity capital from a Hawaiian 
institution in a deal that boosts outside ownership 
of the firm above 20 per cent Page 16 

Chinese “show lack of monetary restraints 

China’s high inflation rate is caused by lack of mon- 
etary restraint central bank deputy governor Dai 
Xianglong said. Page 4 

Restructuring at Grand Union: Struggling US 
supermarket chain Grand Union is being forced 
into financial restructuring by a cash crisis. The 
company has long-term debt of $L4bn. mostly in the 
form of junk bonds. Page 18 


NEC Invests further YlOObn in 

Japanese electronics group NEC is to invest YlOObn 
(tfLOlbn) in southern Japan to produce dynamic 
random access memory chips. Page 19 


Aristide warts US troops to disarm 

President Jean-Bertrand Aristide of Haiti asked the 
US government to allow its troops to disarm crimi- 
nal gangs anri renegade army ™itg which he fears 
pose a threat to the country’s stability. 

Pages 

TAN makes asb e s t os provision: T&N, 
formerly one of the UK’s largest asbestos supplier- 
announced a surprise £100m ($164m) provision 
against fixture asbestos-related claims. Page 1? 

BTB issues tracHng sta te m e n ts Indus^ 
conglomerate 8TR, whose shares have 
more than a quarter in three months. is*{“ a trad- 
ing statement which foiled to restore c< m a e nce - 
Page 15; Lex, Page 14 

Little Red Roadster: Volkswa^j b tosponsor 
a Rolling Stones European conc^ jour next year, 
following successes with Pink *** 

Genesis im to keeping recent tradition. 


UK budget cuts spending and borrowing 

Clarke paves way for lower taxes before election 


By Peter Norman, Economics 
Ecfitor, in London 

Mr Kenneth Clarke, UK 
chancellor of thq exchequer, yes- 
terday imnoiwiyi sharp cots in 
government spending and bor- 
rowing intended to pave the way 
for tax cuts nearer the genoal 
election that must be fought by 
early 1997. 

Delivering his second budget as 
chanceUor, Mr Clarke also 
announced a large package of 
measures, eventually costing 
£S80m (Sl.lbn) a year, to encour- 
age the long-term unemployed 
back to work and make it 
cheaper for companies to hire 
staff 

Mr Clarke’s promise to take a 
total of £28bn off general govern- 
ment expenditure over the three 


financial years starting next 
April and reduce the public sec- 
tor borrowing requirement to 
£2L5bn in 1995-96 from the previ- 
ous target of £30bn, met a mixed 
response. 

The chancellor ingisted that his 
aim was to avoid new boom and 
bust cycles in the UK economy. 
But his observation that the 
Tories "are tax-cutters by 
instinct" served only to remind 
analysts of past proelection give- 
aways. 

Mr Clarke sought to address 
many sources of discontent with 
the government in the ruling 
Tory party, among businesses 
and the electorate at large. 


Among the measures he 

annramcpri were: 

9 help for businesses and 
measures to promote investment 


wwr their fnwwne tax burden. 

9 a boost for health spending in 
real terms, both in this fin a nc ial 
year and next, as well as provi- 


THE UK BUDGET 


Jobs consensus 
Sam Brittan 


-Page 6 
-Page 6 


Budget reports 
Lex 


-PagB 7 


Editorial Comment Page 6 London stocks 


.Page 14 
.Page 25 


in growing companies. 

9 special treatment for pension- 
era to offset the effects of the 

ta pnri H n n of value »<Mwl tar on 

domestic fuel and power and to 


sion of more money for the 
police. . 

9 a crackdown an tax avoid- 
ance, estimated to yield £L5bn In 
three years. 


The purpose of the budget, Mr 
Clarice said, was to build on 
unexpectedly strong growth this 
year of 4 per cent ‘and the current 
low 2 per cent annual rate of 
underlying' inflation For next . 
year,, he forecast growth of -3% 
percent 

He warned that underlying 
retail price- inflation, which 
excludes mortgage interest pay- 
ments, was set to' rise slightly 
iw *t year. But after reaching a 
plateau of 2% per cent it should 
resume its downward band. The 
chancellor reaffirmed the govern- 
ment target of getting inflation 
into the .lower half of its i-4 
per cent target band by the 


Norwegian PM 
warns of tough 
times ahead as 
voters spurn EU 


Boutros Ghali will meet Bosnian leaders to press for a ceasefire 


By Hu^i Camegy and 
Karen Fossfi in Oslo and 
Lionel Barter to Brussels 

Mrs Gro Harlem Brundtland. 
Norway’s prime minis ter, said 
the country faced a tough eco- 
nomic and political future yester- 
day after voting in a referendum 
on Monday not to accept mem- 
bership of the European Union. 

“We are in a very serious situa- 
tion.” Mrs Brundtland warned. 


and eastern Europe. 

Mr Jacques Defers, president of 
the European Commission, said 
the No result would affect the 
future status of the European 
Economic Area, the halfway 
house he devised five years agn 
for members of the Europeans 
Free Trade Association leading to V 
frill EU membership. 

Mrs JSftmdtiand said a priority 
for her minority Labour gpvcsv 
merit was to ensure flat fbe BEA 


“it will now be mare-demandiHg — "N- 
for us to reach our goals, more . /Jw/fflfoEU members access\.. 


demanding to be beard interna- 
tionally . . . We wiD now havf 4 
to work even harder to secufc 
our country and safeguard $ur 
welfare society." 

Norwegians rejected EU Mem- 
bership by a majority cf 5Z2 per 
cent to 47.8 per cent, in vite of 
approval won in Anstrir, Finland 
and Sweden, its feflov applicant 
countries. It was thasecond time 
Norway had turned its back on 
Brussels, having ,*)ted No to 
membership of tie European 
Economic Commurty in 1972. 

Most EU leaders expressed dis- 
may at the resu 1 . as did Den- 
mark. Finland md Sweden, 
which had hop I to form a 
strong Nordic tint within the 
EU. 

A senior EUdStomat predicted 
that ItorwajrwQld have to wait 
until the net century for 
another chancext join the Union, 
probably a Ion; with the most 
advanced ecammies in central 


_^>9- iq nn aM I U C . U» i m j V.. 

.ttie Eu internal market; no^ 
applies only to Norway, Iceland 
and Liechtenstein. 

Financial markets reacted 
calmly to the vote, as they had 
mainly discounted a No result. 
But the result provoked a chorus 
df dismay and concern from Nor- 
wegian bus iness . 

Mr Rolf Saeth e r, chief execu- 
tive of the Norwegian Ship- 
owners Association, said the out- 
come had created “serious 
uncertainty”. 

Norake Skog, the country’s big- 
gest forestry products company, 
said it now had a weaker position 
than its Swedish and Finnish 
competitors in the forest indus- 
try. Frionor, a fish processing 
company, said it was comririaring 
moving some of its production to 
Denmark. 

Countiy that wait out into the 
-cold. Page 2 
Editorial Comment. Page 13 



UN chi ef 
in talks to 
salvage 
peace role 

By Laura SOmt in Belgrade 

Mr Boutros Boutros Ghali, the 
UN secretary-general, will today 
meet the leaders of the warring 
sides in Sarajevo to try to sal- 
vage the battered credibility of 
his organisation. 

In what a UN official decrlbed 
as a “critical, high-stakes” mis- 
sion. Mr Boutros Ghali will meet 
Bosnian president Alfja Izetbeg- 
ovic and Bosnian Serb leader 
Radovan Karadzic and lay out 
conditions for the continuation 
af the UN operation in Bosnia. 

He wHL try to broker a cease- 
fire in the war-torn territory, 
and, in particular, around Mime, 
the north-western Moslem 
enclave, where infantry riawhpw 
yesterday were reported to the 
west of the UN “safe area”. 

Mr Boutros Ghali is expected 
.to meet an angry reception in 
Sarajevo, where many resent the 
UN’s faflnre to Hit the 32-month 
Serb siege. 

His last visit in December 1992 
is remembered bitterly for bis 
remarks that he could think of a 
dozen places even worse than 
Sarajevo. His visit coincides with 

Continued on Page 14 


peace 


VW will produce a special P 


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Big surge in US consumer 
confidence alarms markets 


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By George Graham 

L. UfitnLtnrrtnn 

hi wasnmgiofi 

US consumer confidence leapt 
this month to its highest level tor 
four years, alarming stock and 
bond markets which had 
assu m ed that consumer spending 
and the pace of economic expan- 
sion would cool in the months 

nhoari 

The Conference Board, a New 
York-based business grouping, 
said its widely watched monthl y 
index jumped to lffL3 in Novem- 
ber. up an “imposing” 12 points 
from October. 

The index, based on a survey of 
5,000 households, showed sharp 
increases in confidence levels in 
all regions except the south, 
although even there confidence 
improved slightly. 

More households said business 
conditions were good and jobs 
plentiful, and expectations for 
the next six months improved 
markedly from October. 

Financial markets took fright 
at this signal of economic 
strength, which comes despite 
the Federal Reserve's decision to 


raise short-term Interest rates by 
an unexpectedly fierce % of a per- 
centage point on November IS. 
This had been expected to cool 
any overheating of the economy. 

Bond and share prices both fell 
sharply yesterday just after the 
board’s amxmncement, while the 
dollar rose. 

Most economic forecasts pre- 
dict a slowdown in growth nest 
year after the Fed’s 2% percent- 
age point increase in short-term 
rates so for this year. 

Mr Fabian Linden, executive 
director of the Conference 
board’s oousumer research cen- 
tre, said such a large jump in a 
single month was not unprece- 
dented but was hard to explain 
precisely. He doubted the result 
was greatly affected by the recent 
sweeping Republican victory In 
congressional elections. 

Mr Linden said the index level 
suggested that the economy 
would continue expanding in the 
months ahead.* The latest con- 
sumer confidence readings 
strongly suggest that fears of an 
imminent slowing of the econ- 
omy are unrealistic,” he said. 



of 47 economists pub- 
by the National 
of Business Econo- 
that gross domes- 
tic product woufe grow by 25 per 
cent in 1995, stowing from 3£ per 
cent thfe year. Similar surveys 
earlier this matih by Consensus 
Economics Chip Eco- 

nomic Tnrt kaggS CTgVw^on a JL8 
per cent grtntffi rate for this 
year, but expect growth toSslow 
to 2£ per cent and 2.7 per cent 
respectively in 1995. 

However, some Wan 
economists voiced caution about 
the reliability at yesterday's can- 4 
samer confidence si gnal- Mr 
Bruce Steinberg, manager of 
macroeconomic analysis at Mer- 
rill Lynch, warned that consumer 
confidence had not proved a very 
accurate predictor of 
spending trends or 
activity in recent years. 

“While it may reflect mood, 
shifts, it doesn’t necessarily t. 
anticipate spending shifts,” he 
said. 

Bonds, Page 28 
Wafl Street. Page 34 



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© THE FINANCIAL TIMES LIMITED 1994 No 32^37 Week No 48 


LONDON - PARIS - FRANKFURT * NEW YORK - TOKYO 




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end of the- current parliament 

The riiniwflnr and Mr Jona- 
than Aitfeen, Treasury chief sec- 
retary. took advantage of this 

year’s low Inflation to push down 
puhHc expenditure. The “control 
total” for 1995-96, which covers 
departmental expenditure but 
excludes most cyclical social 
security outlays and debt inter- 
est, was cut by £65hn to £255.7bn 
from the £265L6hn announced last 
year. Control totals for 1996-97 
and 1997-98 were pared by £85hn 
and £85ibn respectively to 
£26L5bn and £2721bn. 

At £2L5bn in 1995-96, the proj- 
ected PSBR will be in line with 
the Maastricht criterion of 3 per 
cent for government deficits. The 
Treasury expects the PSBR to fall 

Continued on Page 14 


: .W:-/ 

- 






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FINANCIAL TIMES WEDNESDAY NOVEM BER 30 1994 


NEWS: EUROPE 


The country that went out i nto the cold 

Hugh Camegy and Karen Fossli on Norway’s prospects outside the EU 


A cartoon In the popular 
newspaper Verdens 
Gang yesterday morn- 
ing captured the mood of Nor- 
way's defeated pro-European 
campaigners: As the big ship 
Europa steams towards the 
horizon, a rope towing a little 
dinghy snaps. Zn the dinghy, a 
jubilant Norwegian shouts 
“Hurrah!” 

The threat of isolation - of 
Norway being cast adrift hum 
its Nordic and European neigh- 
bours - was supposed to have 
been the trump card in the 
attempt of Mrs Gro Harlem 
Brundtland, the Labour party 
prime minister, to win Mon- 
day's referendum on joining 
the European Union. 

But the threat fell on too 
many deaf ears. Twenty-two 
years after Norway voted 
against jo ining the then Euro- 
pean Economic Community, 
the electorate again decided by 
only a marginally smaller 
majority - 52.2 per cent this 
year ag ains t 53.4 per cent in 
1972 - to go it alone. 

In many regions, an even 
bigger majority voted against 
membership than in 1972. Cru- 
cially. Mrs Brundtland foiled to 
deliver a clear Yes in her gov- 
erning Labour party and lost 
the women's vote. 

She failed in her strategy of 
winning over tbe vital north- 
ern fishing communities 


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through an agreement with 
Brussels on fish resources 
endorsed by Mr Jan Henry 
Olsen, the fisheries minister 
who previously had been a 
Euro-sceptic, and by obtaining 
for Norway the EU fisheries 
portfolio. 

Yesterday there was little 
doubt that the No vote had 
placed Norway in a more pre- 
carious economic and political 
position than it faced in 1972. 
This will be all the more diffi- 
cult for tbe government to 
manage now that its domestic 
political authority has been 
undermined by the referendum 
defeat. 

"This means that our econ- 
omy faces new and demanding 
challenges," said Mr Sigbjom 
Johnsen. the finance minister. 
“The situation calls for a con- 
tinued stable course in eco- 
nomic policy to strengthen 
confidence in the Norwegian 
economy.” 

In the short term, Norway's 
oil-dependent economy is 
strong, with growth of 4.5 per 
cent expected this year. But 
growth is expected to weaken 
to under 3 per cent next year. 
In tbe longer term, the prob- 
lems are much deeper. 

In 1972, the country was 
entering an oil bo nanza that 
was to make Norway one of 
Europe's richest countries and 
its biggest oil producer, now oil 
revenues are due to fall 
sharply from 1997 onwards as 
oil runs out 

Natural gas will take up a 
good deal of the slack, but the 
country, which relies on oil 


and gas for 16 per cent of gross 
domestic product, will have to 
depend increasingly os its 
hitherto weak onshore indus- 
trial base for employment and 
government revenues. Manu- 
facturing industry currently 
accounts for 15 per cent of 
GDP. considered a minimum 
level for modem industrialised 
economies. 

Norwegian industry, winch 
has its main markets in the 
EU, has the benefit of the 
European Economic Area trade 
accord with the Union. But 
now that fellow members Aus- 
tria. Sweden and Finland have 


Norwegian 
revenues are 
due to fall 
from 1997 as 
oil runs out 


elected for full EU member- 
ship, the EEA only applies to 
Norway, Iceland and Liechten- 
stein. raising a question mark 
over the EEA's long-term sta- 
tus. Norway will also stand 
outside the economic policy- 
making process in Brussels. 

Already yesterday. Norway 
was In the awkward position of 
being excluded from an EU 
energy ministers’ meeting, 
despite its predominant posi- 
tion in the energy sector. 

“The No we have gotten 
means that we lose tbe possi- 


bility to be in the place where 
the important economic frame- 
work conditions are made for 
the development of industry 
and value creation for Norway. 
The result will be uncertain 
jobs, reduced value creation 
and thereby weakened eco- 
nomic fundamentals for our 
welfare system.” warned Mr 
Diderik Schnitler, president of 
tbe Confederation of Norwe- 
gian Business and Industry. 

A big fear is that Norway 
will now lose out on invest- 
ment. Outside the oil industry, 
Norway already attracts very 
little direct foreign investment 
and foreign oil companies such 
as Shell, Esso and Mobil are 
diverting capital to new petro- 
leum provinces which offer 
better incentives. 

At the same time, local 
industrial giants Norsk Hydro, 
a diversified conglomerate, 
Kvaemer, the engineering and 
shipbuilding company, and 
Hafslund Nycomed, the phar- 
maceutical specialist, have 
warned that their tendency to 
invest overseas over the past 
decade will be reinforced. 

Politically, Mrs Brundtland's 
worst fears have been realised 
by the No vote. With Norway 
staying out of the EU while 
Sweden and Finland join Den- 
mark as members, a split has 
opened up within the ranks of 
the four principal Nordic coun- 
tries. Inevitably, the priority 
for Denmark, Finland and Swe- 
den now wQl be to co-ordinate 
first on EU-related issues. 

More seriously, Norway as a 
Nato member bordering Russia 



The face of failure: Mrs Brundtland yesterday 


will not be able to become a 
lull member of the Western 
European Union, which is set 
to become the new pillar of 
western European security pol- 
icy. Mrs Brundtland fears that 
Nato's commitment to Nor- 
way’s security will be down- 
graded or at least weakened. 

Domestically, the No vote 
has raised a question mark 
over the fixture of Mrs Brund- 
tland, who is in her third term 
as prime minister. Although 
she has pledged to stay in 
office, she may in the months 
to come have to consider 
retirement after failing to 


achieve what would have been 
her crowning triumph. 

Her government is not under 
immediate threat, despite 
being in a minority, thanks to 
the divisions within the opposi- 
tion parties. Ms Anne Enger 
Lahnstein, loador of the wain 
opposition Centre party and 
the principal winner of the ref- 
erendum campaign, made 
no serious play to unseat the 
government. But Mrs Brund- 
tland is likely to come under 
pressure from anti-EU ranks 
within the Labour party for a 
cabinet reshuffle to Include 
th ei r landing figures. 


Brussels faces hurdles on enlargement 


By Lionel Barber in Brussels 


Norway's No to membership of 
the European Union means 
that the EU win have to act 
quickly if it is to meet its tar- 
get of January 1 1995 for entry 
of its three other new members 
- Austria, Finland, and Swe- 
den. 

The immediate threat is 
Spain’s insistence that it 
receive unproved fishing rights 
won during accession negotia- 
tions with Norway last March, 
specifically entry into the Com- 
mon Fisheries Policy with Por- 
tugal V; Jawiar/'i'aJO* -+ . 


The negative result of the 
Norwegian referendum will 
also mean less money for the 
EU budget 

Preliminary calculations in 
Brussels yesterday suggested 
that the EU coffers faces a 
shortfall of Ecu378m (£297.5m) 
next year, rising to more than 
Eculbn by 1998. 

Norway's No also leaves a 
question mark over the future 
of the European Economic 
Area - the halfway house 
which links the EU and the 
European Free Trade Associa- 
tion. With Austria, Finland 
aeQ- Sweden, yafcii+lKE - 


EU club, the EEA looks a lot 
less robust with tbe remaining 
membership trio of Norway, 
Iceland, and Liechtenstein. 

In Brussels yesterday, the 
public mood was one of disap- 
pointment But most diplomats 
said they had already dis- 
counted a No vote, mindful of 
the Norwegian r ‘folic's nega- 


tive response if 
erenduminZ97 
can still be c 
cess,” said 
official, “be 
out of four 
EU ami 
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UKGasRe 


1 1 


C6MPBE1EHSIVE INTELIIBEHEE II Tli 
II US IHIBSTBT, EVEBY TAB HE»S 


UK Gas Report, published every two we 
Financial Tunes, is the premier source of ii 
analysis for the UK gas marfceL 



way to preserve its own conser- 
vation rights in its own waters. 

Spain's demands have r un 
into opposition from the UK 
and Ireland which are reluc- 
tant to allow the Iberian fleets 
into the “Western Waters” 
around the “Irish box” in the 
Irish sea. But the Spanish par- 
liament is refusing to vote cm 
the accession treaty unless 
there Is a legal guarantee on 
entry to the CFP. 

A Commission official said 
yesterday that the issue may 
have to be settled at the Euro- 
pean Council s ummi t in Essen 
on December 9 and 10. 


Balladur calls 
for a more 
flexible Union 


By David Buchan in Parts 


The French government 
yesterday fired its first salvo of 
proposals for constitutional 
reform of the European Union 
in 1996. calling for more flexi- 
ble integration in a non-federal 
Union and for reform of EU 
institutions to make them 
more democratic and efficient. 

The proposals, timed to pro- 
duce some German reaction 
during the Franco-German 
summit which began in Bonn 
yesterday, came in newspaper 
articles by prime minister 
Edouard Balladur and his 
European affairs minister, Mr 
Alain Lamassoure. 

Writing in Le Monde, Mr Bal- 
ladur set out views on Europe 
that will form part of his presi- 
dential campaign next year. He 
made clear that France would 
seek to retain Its central posi- 
tion in the new variable-speed 
Europe he envisages. 

He wrote: “To avoid being 
shifted off to the west, and 
therefore mgrgtnaHcpH by the 
enlargement of the EU to the 
north and east, France must 
set itself several objectives - to 
deepen further the Franco-Ger- 
man relationship, to develop 
cooperation with the UK par- 
ticularly in defence, and to 
ti ghten its links with Italy and 
Spain”, as well as promoting 
EU policies towards tire Medi- 
terranean. 

While he said a deepening of 
the Paris-Bonn axig mi ght jus- 
tify a new version of the 1963 
Elysee treaty between the two 
countries. Mr Balladur an 
enl ar ged Europe “could not be 
federal”, and warned some 
members of Germany's ruling 
Christian Democrat party 
against seeing in toe Brussels 
Commission “the beginnings of 
a federal executive”. A federal 
state “would mean that one 
would expand considerably 
majority voting. Therefore the 
five big states representing 
four-fifths of the [Union's] pop- 
ulation and wealth could be 
put in a minority”. This would 
be unacceptable for France. 

In comments that will appeal 
to Eurosceptics in the UK as 
well as In France, the French 


prime minster said enlarge- 
ment would require the Union 
to be more modest in its fund- 
ing and its calls on the 
resources of member states, 
themselves struggling to meet 
the Maastricht goals of debt 
and deficit reduction. He also 
complained that the European 

Court of Justice’s rulings were 
too expansive In extending the 
powers of the Union. 

Mr Lamassoure was even 
more specific. Writing in Le 
Figaro, the minister said “sub- 
sidiarity ”, or taking more deci- 
sions at national and regional 
levels rather than in Brussels, 
would have to be rewritten In 
1996 “in a more precise, more 
homogenous and more restric- 
tive way”. Bringing more 
states into the Union would 
“reduce the subjects of com- 
mon Interest” between them, 
he said. 

In an effort to meet France’s 
main worries about a bigger 
Union's decision-making effi- 
ciency with Germany's desire 
for greater democracy in the 
EU, Mr Lamassoure suggested 
hiving off the Council of Minis- 
ters’ management role from its 
legislative function. In an inno- 
vation that will appeal to new 
Nordic members, the Council 
should condact open debates 
and votes when it makes laws. 
If toe Council were also able to 
reduce the number of laws it 
makes, then the French minis- 
ter suggested that the Euro- 
pean parliament should have a 
right of “co4ecision n with the 
Council across the board. 

Mr Lamassoure broke new 
ground by suggesting a two- 
tier executive, along the Une6 
of German corporate structure. 
The Council would remain the 
Union’s supervisory board, but 
under it might come either a 
“directorate” (composed of big- 
ger states, plus some smaller 
ones on a rotation basis), or a 
“more personalised” system 
around the person of a sec- 
retary-general, as at the United 
Nations or Nato. Indeed both 
models could be tried, the 
directorate for internal Union 
business and a secretary- 
general to steer EU foreign and 
defence policy. 


UK Gas Report will update you thoroughly 
in such areas as: 


ters to you, so will 
Management of Sei 


■ exploration and production 

■ import and export 

■ transmission, distribution and storage 

I domestic, industrial and commercial fuel consumption 

■ power generation and energy supply 

■ equipment supply - upstream and downstream 
I project finance 

■ research and development 

■ contracting and marketing 

■ regulation and government policy 


5-17 March 1995 


UK Gas Report's news reporting is backed up by expen 
analysis of the market and the latest developments 
assessing how the present situation may change and ihe 
market trends over the coming year. Supponed with 
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UK Gas Report's often exclusive reporting has already 
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| Address 


Poiloxie 


.Country 


| Tel 

L- 


Fa* 


Ki|iliuu 1 OflScc FT Siam: bnavrsa Lid Nonpar On* ia tt hmak Bndgt. Lanin S£( WL 
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(to ft u trt tfn i Ace TfrrifeHraaenTanaawft^.'MlsMy 6* ia«<«>««»jm«*a(WKal 

FTpiBto-.rtBirthoeierafcart jio ur-jr* fc* "ainj 


Arnoud De Meyer 
Associate Dean 
Executive Education 


77m programme ran Jot the u-ry 
Jint time this year. The kmJ of 
companies it attracted are relevant 
to your business. The) - included: 
British Airways PU 
World Bank 
Hong Kong Telecom 
ABB Krajtwtrrlv ,tG 
Hewlett-Packard SA 
CNF .Assurances 
ICL (UK) LiJ 


One participant, the Chairman of 
ScJgtvtck l/K Limited, commenced; 


“The programme was rorv ixiitm- 
onentateJ. It will probably take 
abi'ut a year to know the full 
benJiLs - but l get lev ef ideas 
which t will be implementing, 
especially in the jkos of strategic 
marketing and human resources. ” 


What common factor distinguishes such successful organisations as 
McDonalds , Brr.ish Airways, American Express , Marks and Spencer 
and McKinsey? fhe answer is outstanding service. 

for a very practical approach has led us to 


Good nervier- creates a ‘virtuous Cjdc’ of 
loyal customers Icadhg to higher pr-jfits 
and ultimately satisftd employees wb+ in 
turn better scr«c (tier customers. 

Last year INSEAD ci-atcd an entirely 
new two week programme entitled. The 
Strategic Management of Services.- 

The programme integrates the three 
disciplines — Marketing, Operations and 
Organisational Behaviour - which have 
to link successfully to deliver faultless 
service. It also addresses other specific 
topics such as information technology*, 
strategic cost management, distribution 
and strategic alliances. 

The programme examines two 
essential factors. First, how to discover 
and understand what your customer 
expects; and second, how to organise your 
business to meet those expectations. 


include an integration exercise -based on a 
simulation which will run throughout the 
programme. As you are no doubt aware, 
at INSEAD we have pioneered the use of 
simulations. 


Knowledge you can apply immediately. 
Participants will be given the opportunity 
to develop an Action Plan. And the desire 


Who should attend? 
executives at the CEO level will find 
t ^ s Fogramme particularly Valuable , as” 
will gct-rai managers and business unit 
mana f> crs -£qu a f|y those who support 
general manL cmc n t will benefit - especially 
if during a Q f change they have to 

ensure customers wiw better value. 

Any company ommitte6 

to service 

will find it appropru e _ deluding 
manufacturing firms rfialise how 
important service is. 

If you wduld like to k., w mQrc 
please return the coupon belt. or 
Chantal Poget on 33 (1) 60 72 n 
She will arrange for a brochure 'foi^ 
sent to you. \ 




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FINANCIAL TIMES 


WEDNESDAY NOVEMBER 30 1 994 ★ 


NEWS: EUROPE 


EUROPEAN NEWS DIGEST 


Berlusconi seeks 
pact with Bossi 

ItoUan prime mmlster Mr Silvio Berlusconi was last night 

Set ^ ^ coalition partnerTSfi 

Lea ? ue ; ■ *y Urging agreement on a docu- 
™“ “* mam objectives of the six-month-old riffet- 

wlng coalition. u 

The move foUowed threats by Mr Umberto Bossi, the League 
leader, to pull out of the coalition once the 1995 budget had 
passed through parliament The document, prepared by Mr 
Berlusconi over the weekend and presented at yesterday's 

to _J Teate a more decentralised 
administrative structure, deferring to the League’s 

for greater federalism. Other elements included acceleration of 
the reform of public administration, a shake-up of the justice 
system and the introduction of anti-trust laws to avoid the 
prime minister’s conflict of interest with his Fininvest busi- 
ness empire. 

The cabinet session was also due to approve the govern- 
ment s line in talks today with the trade unio n s to avert 
Friday’s general strike, called to protest a gainat the 1995 
budget There were signs that the government might once 
again switch positions, swinging from a comp romise to a 
hardline stance on pension reform - one of the central cost- 
saving measures in the budget Robert Graham, Rome 

Moscow share offering 

Red October, a Moscow-based confectionery company, yester- 
day launched Russia’s biggest public share offering for cash as 
part of a broader government-sponsored effort to encourage 
industry to raise equity finance. The issue, which has been 
underwritten by Russian companies and financial jngtttntiooi. 
will raise Rbs70bn ($22m) for new investment Red October, or 
Krasny Oktyabr, is one of the best known c ompanie s in 
Moscow, occupying an imposing red-brick site on an island 
opposite the Kremlin. Its 250 confectionery iina« jndmBng 
Chunsy Bear chocolates and Lobster Tail sweets, have been 
popular with generations of Russians. 

The issue is being part-financed by the UK government's 
Know-How fund. Mr Richard Wilson, adviser to the fund, said 
the first stage of the Russian privatisation programme had 
created a large secondary market for trading shares but had 
not established a primary market for companies wishing to 
raise equity finance. 

Of the 3Jjm shares being offered, lm will be allocated to 
Russian retail investors, i-Sm to local institutional investors, 
with the rest being marketed to international investors in 
London. Unlike most Russian companies, Krasny Oktyabr has 
maintained stable production levels in the past few years and 
made profits of Rbsl6.6bn an turnover of Rbs7L2bn in the first 
sue months of 1994. John Thornhill, Moscow 

Belgium hit by strikes 

Belgian flights and train services were paralysed yesterday by 
a 24-hour strike over privatisation which affected public ser- 
vice companies. The national airline, Sabena, said strike 
action by air traffic controllers early yesterday and fire fight- 
ers later in the day grounded flights at Zaventem narinnat 
airport Some European flights woe diverted to regional air- 
ports, white some long-haul international flights left from 
Luxembourg with p asseng ers travelling by bus to the Grand 
Duchy. 

The strike, which is also hitting telephone and postal ser- 
vices, was called by unions to protest about the reorganisation 
of the companies, which they fear will involve job losses and 
greater job insecurity. Among the four public companies 
involved in the strike, the telephone company Belgacom is the 
first due to he partly privatised,- possibly in 1995, but plans to 
sell up to 50 per cent rtf the company have been held up by a 
reported dispute among top management and rows in parlia- 
ment Reuter, Brussels 

Gauloise sell-off set for 1995 

French state tobacco group SETTA, maker of Gauloise and 
Gitanes cigarettes. Is to be sold in the second half of 1995, if 
not earlier, budget minister Mr Nicolas Sarkozy said yester- 
day. Mr Sarkozy said the government had adopted a draft bin 
that would allow the sale of the 300-year-old monopoly whose 
products are a special part of French culture. He said the 
ipgfqiflrinn would seek to safeguard the labour rights of SEI- 
TA’s 6,00&strong workforce as they would no longer he civil 
servants. SEITA's labour unions staged a strike last month to 
protest against the privatisation plans. Mr Sarkozy said it was 
possible that some of the shares would be earmarked for 
employees. 

Financial analysts said SEITA could be worth FFrTbn 
($l.36bn). The government is expected to retain a 10 per cent 
stake. French economy minister Mr Edmond Alphandery 
announced last week th at Cr edit Lyonnais had been appointed 
as the state’s adviser. SEPTA could even be sold before the 
1995 presidential elections in the spring. A successful sale of 
the profitable company, coming after the sale of part of car- 
maker Renault, could boost the ruling conservative coalition’s 
chances. Reuter, Paris 

Ex-premier in bribes allegation 

Istonia’s last communist prime minister, Mr Indrek Toome, 
iow a powerful business figure, has been detained for aHeg- 
<Hy attempting to bribe a police officer, it was reported 
restarday. Mr Toome, 51, was arrested on Monday for 
illegedly offering $2,400 in bribes to secure fraud- 
ilent passports for Russian business associates. During a 
earch of his apartment an Monday, police also found a large 
iox of gun bullets, which, they said he possessed 

Uegafly. 

Mr Toome. who served as prime minister from 1968 to 1990, 
„ pYuected to remain in prison for 10 days while investigators 
atto evidence. If convicted of bribery, he feces a maximum 
wo-year prison sentence. Earlier this year, Tomne and 
SSSbusiness associates bought tbe 22-story VkoHrid for 
inTst a state-run auction. The sale price of the Viru. one of 
fctSmfe* most sought-after properties, was criticised for being 

oo low. AP, TaOim 

Spanish output surges 7.5% 

Spanish industrial production 
• • was up 7.5 per cent in Sep- 

* aln . . tern her against the same 

month last year, u n de r lin in g 
a than expected eco- 

nomic recovery. Over the first 
nine months of the year 
industrial output has risen 6.7 
per cent against 1993. The 
breakdown for September 
showed growth evenly distrib- 
uted between intermediate 
goods which were up by 7-2 
per cent, consumer goods 
which rose by 6.1 per cent 
and capital goods which 
increased by 6 per cent The 
main contributor was the car 
and car components sector 
eg Datasre™ L-jQcHon surged 20 per cent The govern- 

5ST5£--S -?■**£?£ ZJSM 

1 S™** of 33 par ant in consumer 



Russian leader threatens breakaway Caucasian republic as civil war intensifies 

Yeltsin issues ultimatum to Chechnya 


By John Lloyd In Moscow 

The Russian authorities 
yesterday sharply raised the 
stakes in the civil war In the 
north Caucasian republic of 
Chechnya - which has broken 
away from Russia - by threat- 
ening to use “all means at the 
disposal of the state” to quell 
the conflict if the republic's 
government did not disband its 
forces, hand over all weapons 
and release Russian prisoners. 

President Boris Yeltsin said 


yesterday the hope of an inde- 
pendent solution had been 
exhausted. He gave the 
Chechen authorities until 6am 
tomorrow to comply with the 
con ditions. 

In an Interview with the RIA 
Novosti news agency. Presi- 
dent Ozhokar Dudayev of 
Chechnya - who has claimed 
independent status for the 
republic since the end of 1991 - 
said the conflict which brought 
opposition forcss to the doors 
of his palace in the capital. 


Grozny, on Sunday had been 
quelled. He said that no 
“repressive action” would be 
taken against Fitssym soldiers 
captured in the fighting - 
which Chechen sources put at 
70 but which independent 
sources say number no more 
than 12. 

The Chechen authorities 
have claimed that Russia is 
supplying weapons and men to 
the opposition forces, one of 
whose leaders is Mr Ruslan 
Khasbslatov, former speaker of 


the Russian Supreme Soviet 
until its suppression by Presi- 
dent Yeltsin last October. 

president Dudayev said that 
there were no forces to disband 
- but that “there is only the 
people wife weapons, and only 
the people can give an answer 
to Yeltsin's statement". The 
Chechen foreign minister. Mr 
shamarBw Yuse£ rubbed the 
point home by saying: 
“Moscow is nobody now, but it 
wants to have another Afghan- 
istan...! think Yeltsin was 


drunk when he said this." 

However, most of the signs 
pointed to a cautious policy on 
Russia's part Though General 
Pavel Grachev, the defence 
minister, said Grozny could be 
taken “by a battalion of para- 
chutists”, be added that a solu- 
tion should be found through 
negotiation. The Interfax news 
agency, citing “reliable 
sources" in the minis - 

try, reported that no troops 
were being sent to fee area. 

Western diplomats in 


Moscow say any Russian move 
against General Dudayev, long 
a thorn in the Russian flesh, 
would not attract any interna- 
tional condemnation unless it 
was attended by atrocities or 
was of long duration. They also 
do not believe it would have 
immediate consequences in 
other Caucasian republics - 
except possibly in the Abkha- 
zian region of Georgia, where 
Russian units are already 
engaged in controlling a cease- 
fire and the return of refugees. 


EU close to deal on energy markets 


By Emma Tucker In Brussels 

European Union energy 
ministers yesterday edged 
closer to breaking a two-year 
deadlock on opening Europe’s 
energy networks to competi- 
tion, but there will be no final 
decision on how to proceed 
until at least the middle of 
next year. 

At a meeting in Brussels, 
energy ministers agreed to 
investigate whether a French 
proposal for liberalising energy 
markets would bring fee same 
benefits to consumers and 
industry as the Commission's 


plans for allowing power com- 
panies access to other coun- 
tries’ transmission systems, 
socaRed negotiated third party 
access. 

Although the idea of a study 
looks like yet another stalling 
tactic, it at least breaks the 
deadlock that has prevailed on 
energy liberalisation for two 
years. Mr Tim Eggar, the UK 
energy minister, said he 
detected a strong shift in senti- 
ment towards the idea of liber- 
alised energy markets. 

“There has been a very 
major change in the attitude 
tgiciwi by the Co uncil, " said Mr 


Eggar. “It was only about a 
year ago that it was only the 
UK and Portugal arguing for 
liberalisation and the other 
countries either being very 
strongly opposed or not taking 
a Arm stand.” 

Under the French proposal 
for liberalisation - known as 
the “single buyer” proposal - 
power companies would negoti- 
ate access to transmission 
systems in other member 
states via an operator in the 
buyer’s country. The operator 
would be responsible for run- 
ning the system amd meeting 
new demand for electricity. 


The idea was criticised ear- 
lier wee k by Mr Rai d Van 
Miert, the commissioner 
responsible for competition 
policy, who argued that it 
would allow power companies 
in certain member states to 
preserve a monopoly on 
imports and exports. 

However, fee French argue 
that it is intoortast to look at 
alternatives to liberalisation. 
and that there is no reason 
why its system should not 
comdst wife third party access. 

“The conclusions of the 
council show that there is a 
real desire on of mem- 


ber states to move ahead so 
there is no need for the com- 
mission to take matters into its 
own hands,” said Mr Pierre 
Mandfl, a senior French diplo- 
mat 

The ministers also agreed 
that energy companies should 
be required to “unbundle" 
themselv es by separating the 
financial accounts of their pro- 
duction, transport and distri- 
bution arms. This win make it 
harder for companies to sub- 
sidise loss-making parts of 
their businesses out of the 
profits from their monopoly 
over distribution of energy. 



Eggar: shift In sentiment 


Raising environmental 

STANDARDS IS NOT PART OF 
OUR JOB. 

IT’S OUR WHOLE BUSINESS. 


At Waste Management 
International pic, we have only 
one business. The environment. 

Across the world, our people 
do just one thing. Make it 
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We also put our money 
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So far, we've invested 
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Buying, and building 
and upgrading our plants 
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And whatever we 
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Waste Management 
International strives to do 
it better. Why? Because 
raising standards is the key 
to our success. 

Whether it's improving 
recycling techniques in Sweden 
or the Netherlands. 

Upgrading facilities to turn 
waste into power in Germany 


. .Restoring landfills for 
leisure use in France and Italy. 

Introducing more efficient 
household waste collection 



the world's most advanced 
chemical waste treatment 
centre for Hong Kong. 

Opening the first industrial 
waste treatment facility in 
Indonesia. 

Remediating contaminated 
land in Scotland, Finland and 
Singapore. - — 

Cleaning the streets of 
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China urged 
to deal with 
high inflation 


By Tony Walker In Bering 

rhina jg suffering from. lack of 
monetary restraint, according 
to a top Chinese bank official. 
Mr Dai Xianglong, a deputy 
governor of the central bank, 
has blamed this for contribut- 
ing to high infla tion and has 
urged the government to curb 
excessive money supply 
growth. 

In comments published by 
the People’s Daily, the Commu- 
nist party newspaper, he said 
Ml growth - cash in circula- 
tion - had risen by 32 per cent 
in the first nine months of the 
year compared with last year. 
This exceeded a target of 20-25 
per cent 

Mr Dai's warning about the 
need to curb excessive money 
supply growth is part of a con- 
tinuing public campaign by the 
People's Bank to reinforce the 
case for restraint Mr Dai has 
been at the forefront of this 
campaign. He warned last 
month M2 monetary growth 
fbr the September quarter of 
37.1 per cent was much too 
rapid and was fuelling infla- 
tion. This year's MS target is 24 
per cent 

“This shows that money sup- 
ply is accelerating.. .and infla- 
tionary pressure is growing." 
Mr Dai said. 

Consumer prices in China's 
35 main cities rose by 27 per 
cent in the year to October. 
This compared with a rise of 
27.5 per cent the month before. 

The largest increases came 
in several of China’s inland 
cities. Chongqing in Sichuan 
province registered, for exam- 
ple, a CPI increase of 3&2 per 
cent in the October 12 months. 

Mr Dai blamed unauthorised 
lending by non-state financial 
institutions for excessive mon- 
etary growth. The issuance of 
Yn500bn of corporate bonds in 
the first six months of 
the year had exacerbated the 
problem. 

Another factor was direct 
foreign investment, which had 
leapt by 55 per cent in the first 
eight months to S20.5bn 
(£l2.5bn). Wages to state 
employees had jumped by 41.34 
per cent in the year to October. 

Capital construction had 
continued to rocket ahead on 
the back of relatively easy 
credit from non-bank finan cial 
institutions. In the first 10 
months fixed assert spending 
had risen by 40.4 compared 
with a year earlier. 


China 


Foreign e xc hange reserves (Sbn) 

50 — — 



1982 93 94 

Source: Dat ast raarn 

Mr Dai sharply criticised lax 
monitoring procedures by state 
hanks which had failed to pre- 
vent loans for the upgrading of 
enterprises being diverted to 
real estate or stock trading. 

The bank official, who is 
close to Mr Zbu Rongji, China’s 
senior vice premier in charge 
of the economy, was highly 
critical of a wages blowout. 

“The central government's 
share of GDP is too low, its 
share of tax revenue is too low, 
so it is unable to provide extra 
funds to state firms,” he said, 

“Some of these firms hare 
lost control of wages and 
costs,” he said. Mr Dai called 
for a slowing of development 
and a reduction of funds 
devoted to fixed assets. 

China is seeking to calm an 
overheating economy without 
causing an abrupt slowdown 
which might add to unemploy- 
ment Chinese officials fear a 
“hard landing" and have thus 
been selective in applying 
credit restrictions. 

• Germany's Hoechst chemi- 
cals group has signed a con- 
tract to set up a $29m joint 
venture in Shanghai to make 
polyester products for the 
building industry, reports 
Christopher Parkes from 
Frankfort 

The group’s local holding 
subsidiary, Hoechst China 
Investment, based in Beijing, 
will take a 60 per cent stake in 
the new company. China 
Worldbest Corp of Shanghai 
will hold 25 per . cent and the 
remaining 15 per cent will be 
owned a Beijing company, 
China New Building Materials. 

A new factory, due to open 
in 1996, will produce 4,500 
tonnes a year of Trevira Spun- 
bond, a material used mainly 
as a base for bitumenised roof- 
ing and flooring products. 


Police charged in 
Thai gems case 


By Victor Mallet in Bangkok 

The Thai authorities said 
yesterday they had charged a 
police general and eight others 
with conspiring to kidnap and 
murder the wife and son of an 
important witness in a long- 
running scandal involving jew- 
els worth {20m (£12. lm) stolen 
from a Saudi prince. 

Those charged include police 
Lt Gen Chalor Kerdthet, who 
first headed the investigation 
into the theft of gems from a 
Saudi Arabian palace in 1989, 
and four other policemen. Gen 
Chalor has already been 
accused of embezzling some of 
the jewels. 

Thailand’s Office of the 
Attorney General also dropped 
plans to charge two other 
police generals of involvement 
in the murder. 

The office said there was 


insufficient evidence to charge 
a fourth general with possess- 
ing some of the jewels. The 
case has arouBed intense inter- 
est in Thailand because of 
growing frustration with cor- 
ruption in the country’s police 
force. At least 10 people are 
believed to have been mur- 
dered in connection with the 
case. 

Angered by the slow pace of 
the investigation, Saudi Arabia 
has refused to grant new visas 
to Thai migrant workers and 
stopped Saudi tourists from 

visiting Thailand. 

The Thai gardener who stole 
the jewels in Saudi Arabia was 
arrested after his return to 
Thailand, but the gems 
returned by the police to the 
Saudi prince turned out to be 
fakes copied from the originals. 
Most of the real gems are still 



GREASING PALMS NOT PALATES: Francis Kuok (left) outside one of his Chinese restaurants in New Delhi 


New Delhi restaurateur finds 
corruption put on the menu 

Shiraz Sidhva tells a story of enterprise and bribery in India 


F rancis Kuok, a second- 
generation Chinese liv- 
ing in New Delhi, 
thought he had mastered the 
fine art of bribery or, to put it 
more politely, getting around 
Indian red-tape when he 
decided to open his third Chi- 
nese restaurant. 

The 30-year old entrepre- 
neur, his elder brother Greg- 
ory, and two friends, Ms Anu 
Bakshi and Jerry Wong run 
two successful take-away 
shops in a middle-class Delhi 
suburb. 

They thought they knew the 
ropes well enough to start a 
small sit-down lunch and din- 
ner place. 

Mr Kuok and his team had 
already learnt that the best 
way to stay in the restaurant 
business was to keep the 
grease out of the noodles for 
the newly converted health- 
conscious middle classes and 
to .spread it instead on the 
palms of petty bureaucrats and 
police officials. 

But he claims that what they 
encountered when they started 
setting up a restaurant in the 
heart of the city was a web of 
institutionalised corruption 
that threatened to stall their 
enterprise if they did not bribe 
government officials every step 
of the way. 

"Once you get used to the 
broad daylight robbery, it's a 
dream," says Mr Kuok, whose 
restaurant started on Septem- 
ber 5 and is already doing well 
He says be has had to pay 
more than R5200.000 ($6,370) in 
bribes over the last three 


months, about 10 per cent of 
his Rs2m investment in the 
restaurant. 

“It's the initial shock of dis- 
covering how well organised 
the set-up is that throws you." 
he says. 

Finding a defunct printing 
plant in a stylish part of town 
and transforming it into a 
pretty restaurant in shades of 
green and white with gur gling 
water, swaying bamboos and 
soft piped music was the least 
of their problems. 


‘Once you get 
used to the 
broad daylight 
robbery it’s 
a dream’ 


The plant had not been 
painted in more than 50 years, 
and drastic renovation was 
required. The eight-year lease 
with the owner allowed for the 
tearing down of walls, but he 
alleges that municipal officials 
suddenly appeared in the mid- 
dle of construction work and 
told the masons to lay down 
their tools. 

“Permission" to renovate the 
plant was needed and this 
could easily be obtained by vis- 
iting Mr X, the official con- 
cerned, after seeking an 
appointment at his office. 

“There is a fixed price for 
each ’permission’ or licence 


needed, but 1 tell you it works, 
it's not money down the 
drain,” claims Mr Kuok. 
“Though there is no paper- 
work involved, and nothing an 
the record, it’s all very 
above-board when it comes to 
actually delivering what has 
been promised you for a cer- 
tain non-negotiable sum." 

The only time there could be 
a problem is when a particular 
official being dealt with is sud- 
denly transferred, and the brib- 
ing process has to be begun 
again. 

There is an acute water 
shortage in the area but he 
says the authorities allowed a 
tubewell to be dug - for a 
price. 

There was no toilet or con- 
nection to the sewer in the 
printing plant so the extra dig- 
ging called for a further bribe. 
The kitchen could be e x tended 
after still more money was 
paid. 

“They keep an eye on our 
every move, and there’s no 
option but to pay your way 
through.” says Mr Kuok. 

He is amazed at the apparent 
transparency with which deals 
are concluded, and the noncha- 
lance of officials accepting ille- 
gal pay-offs. They are often 
part of India's elite civil ser- 
vice and the system is so well 
entrenched, and involves such 
a lot of money, that even the 
gate-keeper at the door of a 
bureaucrat's office is part of 
the game and knows exactly 
what the boss inside will 
deliver for what sum. 

“I can bet there is no restau- 


rant in Delhi that hasn't paM 
all the departments con- 
cerned,” says Mr Kuok. 

A “fastidious'’ health inspec- 
tor coaid point out a cockroach 
in your kite-ton to dose down 
your restaurant if he vrere not 
paid. Health officials certify 
that kitehgn staff is not suffer- 
ing from a communicable dis- 
ease such as tuberculosis. 

A fire cer tificate is required 
and even a death-trap could be 
certified safe for a tee. Quite 
separately, the police will 
extract their pound of flesh fbr 
turning a blind eye to that 
small encroachment on the 
pavement, for allowing custom- 
ers to park where pedestrians 
are supposed to be walking and 
for registering the re sta urant 
in case of a law and order prob- 
lem. 

“We think nothing of police- 
men walking in on a daily 
basis, ordering nhiiw pfrido*™ 
and Cokes or whatever else 
strikes their fancy on the 
house," says Ms Bakshi, who 
was a journalist before she 
ventured into the food busi- 
ness. 

“It's a very lopsided value 
system here,” says Ms Bakshi. 
“These are no gentlemen you 
are dealing with, and yet, they 
keep their promises." 

An official once told them 
helpfully “We hold the gun to 
shoot you, but you have the 
bullet" The bullet of course, is 
money, and once you’ve 
coughed up, you’re home and 
dry - until you need to get 
your licence renewed next 
year, that is. 


Palestinian credit for $58] 


The World Bank has agreed to 
extend a $58m credit to Pales- 
tinian authorities to support 
self-rule projects, an official at 
the multinational institution 
said yesterday, Beater reports 
from Paris. 

Palestine Liberation Organi- 
sation. (FLO) officials, in Brus- 
sels for meetings with Israeli 
officials, the World Bank and 


wealthy donors, said there had 
been an agreement 
The deal will be signed in 
Brussels today by Mr Yassir 
Arafat, the PLO chairman. Mr 
Arafat and Mr Shimon Peres. 
Israel’s foreign minister, also 
in Brussels, said they would 
put pressure on donors, who 
are to begin a two-day meeting 
today, to pay out urgently 


money already promised to the 
Palestinians. 

The donors’ last meeting 
broke down In a row over the 
Palestinians' inclusion of Jeru- 
salem in projects to be backed. 

Palestinians consider Arab 
East Jerusalem the capital of a 
future state, bat Israel says 
that East and West Jerusalem 
are united and remain its 


agreed 

“eternal capital". 

In October last year, aid 
donors pledged more than $2bn 
over five years for projects to 
support Palestinian self-rule, 
with $700m to be paid out this 
year. Mr Arafat said only about 
$60m in credits had so far 
been received because some 
countries had not honoured 
their promises. 


fMTFRMAT?QNAL NEWS DKaEST f; 



narrow UN m ia pm e ~ — : T — . - • , 

and lessening the chances of anot her fnte wrt rate 
before Ctoistnas, The latest A««»es dwwed a curirat 
deficit for October of. A*L65hn 

sen higher than the A*L27tm seen in October 3M3,_with^w 
the ftorftertH nf AXliftm a~ J AMBflt 

re spec ti vely this year.. - Mi 

Exports rose 5 per cent seasonally adjusted fo October, ™ 
commodities such as gold, wool and coal COTteuromjfc 

strongly. Imports, same basis, “ 

Economists had been pr ed ict ing an Ol__ — . . 

ASLflta; as the prospect, of a further eariy interest rate it* 

Abed, the Australian dollar drifts*]®* 8 ^ 

A sharp in building approvals last mouth suggested 
the recent housing boom has peaked. Figures for business 
investment, were more complicated; new. capital expenditure 


for the qu arte r dedined overall, but spending an plaid and 
p gnfr nwn* was &A per. cent Ugher.CKi per cart above that 

seen a year ago}- • • • 

Mr T telpb WSIHs, treasurer, focused mainly an the . capital 
expenditure figures, cJantiihg these supported "a coatur 


ch-mg recover y in business investment". But some economists 
said they the full-year current account deficit to 

reach A$21hn-Ag22fru, wen above Mr Waite's AjaShn forecast 
Attention will now shift to the September quarter's GDP 
figures, to be released today, and expected to show growth 
running at 5u5 per cent annualised. ~ . 

. Mr Benue Fraser, gover nor of the. Reserve Ban ket Austra- 
lia, said the guvernment should consider raising taxes toi- cut 
its budget deficit, and . warned that lack of wage restraint 
would m*wn hig her i^ terpst rates. “If s time we facedup to the 
fact that trying to manage the budget without the .capacity to 
vary is not a winning strategy. There are always areas 
where government spending can be trimmed but possible tax 
increases should not be ruled out” • v. • 

Romp unions , had recently submitted big wage claims, bui lt 
was essential settlements should not run ahead of productivity 
gains. “Once a wage breakout has occurred, it beauties largely 
a matter of where the damage is sustained, in higher unem- 
ployment or higher inflation or both". A rese : existed for 
cutting the c ur r ent account deficit to around 3 per- cart of. 
GDP, against the 4-5 per cent sees! recently. That is not a 
target so much as a judgment about what fo comfortably 
sustainable over the long term." Nikki Toft, Sydney 

Mercedes in S Africa project 

Mercedes-Benz, the German car and commercial vehicle 
maker, {dans to invest DMXOQm (B4L6m) aver the next five 
years in its South African operations. It has entered its first 
collaborative vehicle output project with Mitsubishi Motor, the 


producing the Mitsubishi Colt pinknp this week, Mr Helmut 
Werner, Mercedes-Benz chief executive, said the company 
planned to build 8,000 Mitsubbihi padcups a year, with sales 
aiined exclusively at South Africa. Mercedes-Benz South 
Africa has assembled Honda cars urnfa- licence at the plant 
since 1982. Mercedes-Benz plans to produce 38JXX) care mid 
commercial vehicles in South Africa next year; Mr Werner 
added. MercedesHenz South Africa would play the . leading 
rale is expanding the German group’s operations in Africa. 

Ford of the US announced earlier tins week it was re-enter- 
ing the South. African market through acquisition of a 45 per 
ramt holding in South African Motor Corporation (Samcor), 
which at present assembles Ford vehicles and some Mazda and 
Mitsubishi models. Kerritt Done , t 

Japan joint venture in UK 

Tbr^ Industries, the Japanese textile maker, plans to set up a 
textile printing joint venture with Komatsu Seiren. a Japanese 
printing company of sythetic fabrics, it said -yesterday. The 
venture, with total capital r of Y4Abn (£2fL9m), will invest 
Yl.lbn in a polyester filament printing plant, to start 
operations in Nottingham by 1996. The plant will employ 50 
local workers and Japanese staff, Toray said. Emfko Terozono, 
Tokyo 

Nepal PM sworn in today 

Nepal’s Communist Party leader Man Mohan AdMkary said 
yesterday that King Birendra had appointed him as the Hima- 
layan nation's prime minister. “I will be sworn in tomorrow" 
Mr Adtdkary said as he left a meeting with the king. Mr 
Adhikary*s Communist Unified Mandst-Leninfot (UML) party 
won a majority in general elections earlier this month and 
staked a claim to form a minority go vernm ent UML general 
secretary Madhav Kumar Nepal said the party would 
announce the new cabinet today. 

Mr A rihikary arrived at the palace in Kathmandu in an old 
Toyota car which he had used during the general election 
c ampaign, and departed in a black Mercedes. Reuter, Kath- 
mandu 

Indian minister escapes blast 

Maoist guerrillas lulled nine, people, infdudtog seven police- 
men, with a la ndmin e in southern India yesterday but missed 
a state minister they were trying to asgaggfnate a police' 
official said. Guerrillas of the People’s War Group (PWG) 
detonated the mine when a lorry carrying the policemen 
approached Warangal Town, a Maoist stronghold in Andhra 
Pradesh. 

“They were ai ming at Mr Narasimha Reddy, following in a 
car," the official added. Mr Reddy, a staunchly anti-Maoist 
minister in the state government, is a candidate for Wa rangal 
in. the December 1 and 5 state assembly elections. The attack, 
the second by the PWG in four days, has forced Chief Election 

to COnsMer Postponing elections in 
the Maoist strongholds. Reuter, Hyderabad 


Alison Maitland finds the gap between white farmer and black smallholder as wide as ever after 15 years of ind ependence 

Zimbabwe’s hopes of equality have yet to take root 


I n Zimbabwe there is a say- 
ing: where you see a 
Mopane tree, there is no 
water. 

Mopane trees are plentiful in 
Masvingo province, in the 
semi-arid southern half of the 
country. Maize seedlings 
planted in small neat rows wilt 
in heat of more than 40 degrees 
and the few scrawny cattle 
feed on scrub as villagers wait 
for the next rains. 

Here the population is still 
suffering the effects of the 
worst drought in more than 
100 years. Some 60 per cent of 
Masvingo's oxen died In the 
1992 drought The poorest fami- 
lies, often headed by women, 
have less than two hectares of 
land and no irrigation. 

Three hours’ drive further 
north, in the rich, mainly 
white-owned commercial farm- 
lands around Harare, a healthy 
crop of young malte. flourishes 
under water sprinklers. Flow- 
ers and vegetables for export 
grow in greenhouses where 


plentiful irrigation is funded 
out of earnings from tobacco 
plantations extending over 
thousands of hectares. 

Fifteen years after indepen- 
dence, the gap between Zim- 
babwe's commercial forms and 
its poor rural smallholdings is 
as wide as ever, made bigger 
by draught and economic 
reforms. 

During the colonial period, 
the best land was reserved to 
whites while blacks were con- 
centrated in “tribal trust 
lands” - now known as com- 
munal areas - which are home 
to half the population. Scone 74 
per cent of communal area 
farms lie in the two poorest 
"natural regions”, where 
annual rainfall fo 60cm (24m) 
or less. 

By contrast, 4,800 predomi- 
nantly white commercial farm- 
ers own or operate 59 per cent 
of the land in the regions with 
the highest rainfall - and 
nearly 84 per cent of all irri- 
gated fond. This means that in 


a country normally self-suffi- 
cient in maize, the staple food, 
420,000 rural households still 
cannot be sure of producing 
enough to eat 

Government agricultural 
strategy in the post-indepen- 
dence 1980s was designed to 
change this, but yielded disap- 
pointing results, according to 
the World Bank. Yield 
improvements, greater crop 
plantings and better marketing 
produced sharp increases in 
output of cotton and maize. 
But agricultural growth did 
not extend much, beyond the 
commercial sector and the top 
20 per cent of smallholders. 

“The bulk of Zimbabwe's 
rural population has partici- 
pated minimally in the expan- 
sion of national output of food 
and cash crops," it says. 

The government has lifted 
most state marketing controls 
on agricultural commodities as 
part of the structural adjust- 
ment programme begun in 
1991. But this has benefited the 



ZAMBIA 


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rfv>V i " 

<V‘ ; HARARE 


Highly variable rainfall i 
of 35-eocms per annum ; 

i . 1 i 

r 




V BOTSWANA 


ZIMBABWE 


Blilawayo 


MOZAMBIQUE [ 


Was 


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jop \ 

30,1 ' '• \ ■ S«M«*toBm*aoha 

SOUTH AffigkV ■ TtoAgfaftrtOwewwBt ?£ 


well positioned commercial 
Sector most. While smallbnlH- 
ers have lost out in the parallel 
squeeze on public services. 

Land reforms, under which 
57,000 households have been 
resettled on land formerly 
belonging to commercial fann- 
ers, also failed to deliver the 
desired results, largely because 


restricted tenure and capital 
have prevented the beneficia- 
ries from taking a long-tom 
stake in their fawns , the hank 
believes. 

land redistribution remains 
a political football, especially 
with elections approaching 
next year. But not all black 
Zimbabweans are eager to 


force white farmers off the 
land. The commercial forms 
do the country a lot of good," 
said one. The farmers have 
experience, producing food on 
a large scale mid employing a 
lot of people." 

Instead, smallholders plead 
for fair treatment Solutions 
appear simple. By having an 
animal to plough, a small- 
holder can treble the amount 
of land tilled to as much as 
3£ba. 

But delivering is easier said 
than done in the current eco- 
nomic climate. For the past 
two years, 41 formers in the 
village of Binda, il5km 
south-west of Harare, have 
benefited from a credit scheme 
backed by the International 
Fund to Agricultural Develop- 
ment, a UN organisation. As a 
group, they were able to bor- 
row to buy fertiliser, seed and 
oxen to recover from the 
drought They are the envy of 
other villagers. 

But while the fund provides 


the government with soft in**™ 
at 0.75 per cent interest, the 
termers are still at the mercy 
of exorbitant domestic rates as 
the money Is on-loaned 
through the agricultural credit 
system. They had to pay 23.5 
per cent on their annual loan 
this year - well below commer- 
cial rates but still too 
high to borrow for the tractor 
that would transform their 
lives. 

The World Bank and donor 
agendes urge greater targeting 
of public agricultural services 
at smallholders, mahing credit 
more available and encomag- 
tog community-based irriga- 
tion schemes. The bank argues 
that long-term leases on laud 
or even grants towards land 
purchase, would encourage 
smallholders to resettlement 
areas to farm commercially - 
especially if they could pro- 
duce under contract to private 
sector farmers or agri-busi- 
nesses. 

Other solutions involve 


diversificati on . Many small 
tenners already weave or cro- 
chet, carve wood and soap- 
stone figures for tourists, or 
Participate in wildlife manage- 
ment schemes to supplement 
their incomes. Tie fast grow- 
tog horticulture sector offers 
opportunities to smallholders 
where there is irrigation: about 
200 are involved in three 
export projects producing 
tomatoes to paste and fruit to 

ca nn tog under contract to com- 
mercial terms. 

Where there is no water, tri- 
als are taking place of drought 
reastant varieties of maize, 
and of the tougher staple 
crops, sorghum and mfllet 


. — *wv, MJUI 

transportation remain 
harriers. But the net 
change fo widely recogni 
“tssot “The real poor a 
setting anywhere," sai 
white farmer. “We do 1 
conscience. It’s not nice 
to a place where the gap 
going to narrow." 



»Jto* o*Aj 








FINANCIAL TIMES WEDNESDAY NOVEMBER 30 1094 


i 8a P 0. 

VlStM* 


NEWS: THE AMERICAS 




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A - ■ ;^vi proj^i 


Easy victor Zedillo faces uneasy future 

T hroe months after his vv t m ^ m 

presidential election, Mr Damian Fraser on the Mexican president’s ‘chaotic’ inheritance 


T hree months after his 
easy victory in Mexico's 
presidential election, Mr 
Ernesto Zedillo prepares to 
take office tomorrow in a tur- 
bulent and uncertain political 
environment 

The infighting within the 
government that has followed 
assassinations of two senior 
politicians, continued unrest in 
the state of Chiapas and vola- 
tile financial markets have led 
some to conclude that the 
Institutional Revolutionary 
Party is facing its most serious 
crisis In 65 years In power. 

“The legacy of Salinas to 
Zedillo: a country in chaos, a 
political system in disintegra- 
tion, H declared Proceso, 
Mexico's weekly political mag- 
azine, in this week's cover 
story. 

Many businessmen, inves- 
tors, and government officials, 
although their confidence has 
been shaken by recent events, 
point out that the last four 
Mexican presidencies having 
all ended in turmoil, only for 
stability to return as the new 
president assumes control. 
They take comfort from the 
resilient economy and the 
recent return of Investors to 
the stockmarket, reckoning 
that the worst is over. 

Much will depend on Mr 
Zedillo’s actions in the first 
weeks. After being quiet for 
three months, he will over the 
next month have to establish 
leadership within government, 
set out his policy objectives 
and appoint ministers able 
both to Implement his pro- 
gramme and keep the party 
imifipd. 

His first task will be to heal 
divisions in the PRI that have 
arisen over allegations that the 



C ampaignin g Zedillo: now be most unite a party divided by allegations of high-level corruption 


REFORMERS FAVOURED 

Mr Ernesto Zedillo is this evening expected to name 
reform-minded politicians to many of the key positions in his 
cabinet, writes Damian Fraser. Rumours were circulating 
yesterday that Mr Esteban Moctexnma, a close aide of Mr Zedillo 
who has established good relations with the opposition, would 
be appointed to the powerful post of interior minister. Top 
positioas also seemed assured for pro-reform economists such as 
Mr Jaime Sena Pncfae, the current trade minister, Mr Uils 
Tellez, Mr Zedillo's main adviser on government policy, Mr 
Guillermo Ortiz, the deputy finance minister, and Mr Jos6 Angel 
Gama, the former debt negotiator. 

Mr Pedro Aspe, the finance minister, has decided not to accept 
a position in the cabinet for personal reasons, according to a 
report in yesterday's El Universal newspaper. 

After President Carlos Salinas, Mr Aspe was the leading figure 
in pushing for economic reform over the past decade. 

Expectations that many of President Salinas’s reformist 
government ministers would remain in office has contributed to 
the recent rebound in the stock market. Yesterday short-term 
interest rates fell by 10 basis points to I3JJ5 per cent 


two most senior figures of the 
ruling party, Mr Ignacio 
Pichardo, the president, and 
Ms Marla de Los Angeles Mor- 
eno, the secretary -general, con- 
spired with the attorney-gen- 
eral, Mr Humberto Benitez 
Treviflo, to block the investiga- 
tion into the assassination of 
Mr JosG Francisco Ruiz Mas- 
sieii, the number two official of 
the PRL The accusations, marie 
by Mr Mario Ruiz Massieu, the 
former deputy attorney-general 
and. the brother of the slain 
politician, caused a bombshell 
in Mexico, and have fuelled 
suspicions that Mr Ruiz Mas- 
sieu’s murder was ordered by 
senior figures in the govern- 
ment, who are being protected 
by those still higher up. 

The allegations could present 


Mr Zedillo with an awkward 
dilemma, if he does not push 
for a thorough investigation, 
then his own credibility would 
be tarnished and his proposals 
for legal and judicial reform 
would meet with cynicism. But 
if there is some truth to the 
allegations - so Ear strong evi- 
dence has been lacking - and 
if he moves against Mr 
Pichardo or Mr Benitez, he 
risks alienating a powerful 
political faction in the ruling 
party that has been among his 
staunchest backers. 

Mr Zedillo's cabinet appoint- 
ments, especially that of attor- 
ney-general, are likely to give 
some indication on his 
approach to the investigation, 
to political reform and his will- 
ingness to fight corruption and 


illegality within his own party 
and government 

Many observers are hoping 
that Mr Zedillo appoints to the 
attorney-general’s position a 
respected figure independent of 
the ruling party as a sign that 
he is serious about im pi«m»nK 
ing far-reaching legal reform 
that would subject everyone to 
the rule of law. 

The second critical test Mr 
Zedillo will face in December is 
in the southern state of Chia- 
pas, where the leftist opposi- 
tion and the Zapatista peasant 
rebels are seeking to prevent 
the PRI governor from taking 
office on December 8. The 
Zapatista rebels, who launched 
an armed uprising in January 
this year, have predicted war if 
the PRI governor is allowed to 


take power; the leftist opposi- 
tion has made political conces- 
sion in the state an important 
condition for talks on national 
democratic reform. 

However, the election result 
in Chiapas has been ratified by 
the local congress and Mr 
Zedillo is unwilling to follow 
President Salinas’s habit of 
deposing legally elected gover- 
nors as a way of consoling the 
opposition. Instead be appears 
ready to begin negotiations 
with both Zapatista rebels and 
the leftist opposition on local 
and national political reform. 

But it seems unlikely that 
such negotiations could pro- 
duce results in the time avail- 
able, raising the prospect of 
conflict in Chiapas over the 
next few weeks and casting a 


cloud over efforts to secure all- 
party consensus over the next 
stage of democratic reform. 

What is fortunate for Mr 
Zedillo is that the economy has 
recovered strongly from the 
recession of Last year, with 
third-quarter growth of AS per 
cent compared with the same 
period last year. 

If the economy continues its 
recovery, then Mr Zedillo can 
afford to push for a relatively 
conservative budget on Decem- 
ber IS without endangering his 
target of 4 per cent growth for 
next year. An orthodox budget, 
and continued commitment to 
pro-market economic reform, 
may help stabilise financial 
markets, and give Mr Zedillo 
more breathing room on the 
political front 


Aristide wants US troops to disarm crime gangs 


By Canute James in Kingston 

Mr Jean-Bertrand Aristide, Haiti’s 
president, has asked the US govern- 
ment to allow its troops to become 
active in disarming c riminal gangs 
and renegade army units which he 
fears pose a threat to the countr y 's 
stability. 

However, the request is unlikely to 
be entertained by the VS government, 
diplomats in Haiti said this week, as 
the move could bring the 12,000 
troops in the country in direct con- 
frontation with armed Haitians, lead- 


ing to US casualties and fatalities, 
and Increasing pressure for the 
troops’ withdrawal. 

Mr Aristide's request suggests 
growing concern about the security 
situation in Haiti, which fa as been 
generapy quiet since the president 
was reinstated last month after three 
years in exile. However, Senator Rob- 
ert Dole, who will lead the Republi- 
can majority in the new Congress, 
said disarming of Haitia ns should 
be done by the Haitian police. 

There is yet no adequate local con- 
stabulary to do this as the reorgani- 


sation of Haiti’s armed forces, one of 
the first tasks of (he recently rein- 
stalled government, will take longer 
than was first assumed. This has 
raised questions about public secu- 
rity and the timtng of the pullout of 
the US troops who are currently 
responsible for law and order. 

Haitian and US officials say the 
recruitment and training of the secu- 
rity forces, mainly a new constabu- 
lary, is already proving more difficult 
than first thought The unpopularity 
of soldiers and policemen, repeatedly 
accused of widespread abuses during 


the three years of the mffitary dicta- 
torship, is deterring many prospec- 
tive officers. 

With a likely rise in pressure from 
Republican legislators for an early 
pullout of US troops, Haitian officials 
fear a security vacuum in the country 
if the refashioned army and police 
are not ready by the time foreign 
troops leave. Such a situation would 
be “destabilising* as it could be 
exploited by “anti-government forces 
and bandits," said one official. 

A programme agreed by Mr Aris- 
tide will, see the dismantling of 


Haiti’s 7,000 member army, and cre- 
ation of a new militia of L500. The 
police force of 1,500, which is an arm 
of the military, will be placed under 
civilian control and increased to 
about 10,000 members. 

Concerns about security led Mr 
Aristide to bring forward the 
appointment of new chiefs for the 
army and the police. He appointed 
Brig Gen Bernadfn Poisson, the for- 
ma' head of the military’s fire fight- 
ing unit, as the army's new com- 
mander-in-chief. The fire services are 
part of tiie military. 


AMERICAN NEWS DIGEST 

New director for 
World Bank 

The World Bank yesterday named Mr Richard Frank to join 
tiie troika of managing directors who hold sway over its 
operations under the presidency of Mr Lewis Preston. Mr 
FTank, vice president for finance and planning at the Interna- 
tional Finance Corporation, the World Bank affiliate responsi- 
ble for private sector investment, will succeed Mr Ernest 
Stem, viewed as the most powerful figure in the Bank's 
hierarchy. 1128 World Bank’s president is traditionally an 
American, and the three managing directors are also, tacitly, 
divided geographically. Mr Frank will take the American slot, 
joining Mr Sven Sandstrom from Europe and Mr Gautam Kaji 
from Asia. Mr Trank's skill in tapping capital markets may 
prove useful in an environment in which donor governments, 
and especially the tJS Congress, are increasingly reluctant to 
provide new funds. 

[n a separate announcement, the International Monetary 
Fund named Ms Burke Dillon to be director of its administra- 
tion department, and Mr Alan Tait as its special trade repre- 
sentative in Geneva. George Graham, Washington 

Cavallo quashes rumours 

Argentina’s economy minister Domingo Cavallo, whose 
rumoured departure shook financial ma rkets last week, said in 
a radio interview he would stay on until 1998 if President 
Carlos Menem were re-elected next May. “If I had to make a 
forecast, nnlami my health fai ls me, I think I am going to 
accompany [Menem] until *98," Mr Cavallo said. 

He also said he was confident the Peronist leader would win 
a second term in next year's presidential elections. Early 
opinion polls point to a Menem victory, and the president 
himself is confident of a first-round win. Reports in the past 
two weeks that Mr Cavallo had threatened to resign over a 
spat with the Senate and with party and government insiders : 
about a postal privatisation bill hit stocks and bonds last 
week. Reuter, Buenos Aires 

Anti-war activist Rubin dies 

Former 1980s activist Jerry Rubin died from a heart attack at j 
the age of 56 in Los Angeles, two weeks after being struck by a 
car and critically injured. Mr Rubin was a founder of the I 
Youth International Party, known as the Yippies, whose mem- i 
bers played a major part In the bloody anti-Vietnam War 
demonstrations outside the Democratic National Convention 
in Chicago in August 1968. 

He became a household name across America when he was | 
charged, along with seven others including the late Abbie 
Hoffman and black activist leader Bobby Seale, with oonspir- i 
acy to incite violence at the Chicago convention. Conspiracy | 
charges against the group were eventually dropped and the 
group of antir Vietnam war protesters were convicted on lesser 
charges that were later quashed on appeaL Reuter, Los Angeles 

Venezuela mass jail breakout 

About 70 prisoners were cm the run from a Venzuelan prison 
yesterday, amid unconfirmed reports of deaths after a mass 
jail break, authorities and local radio said. Union Radio, quot- 
ing police sources, said between 30 and 40 prisoners had died 
in the escape and ensuing fighting with guards at Tocuylto jail 
in the eastern state of Carabobo, 160 miles from Caracas. Some 
100 prisoners escaped in the early hours of Tuesday morning 
when an electricity failure allowed them to dodge guards and 
crawl through sewage pipes. Police recaptured about 30 of the 
Inmates, many of whom were armed, within hours in the 
nearby city of Valencia- Reuter, Caracas 


ALFRED DUNHILL 


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, ftofrJtmtrtfc to/tA t/aarfz movemejtf. ify.rcrert /b/t&np c/enft. 


G’O’L’D'S’M’I’T’H’S £$* WA LK E R & H A LL 

THE MASK OF A RN£ JEWELLER 

M *y. Nottingham, WALKER Be HALL* Sheffield Meaduwhall, Thurrock, Altrincham, BRACHER 8c SYDENHAM; Reading, 
* NORTHERN GOLDSMITHS: Gatwhead Metro, GEO ATTENBOROUGHS: London Fleet Street, 

REID Be SONS: Newanl* CEO FARRER: Tunbridge Well*, BIGGS; FanUmm, GOLDSMITHS! Leicester. London Bishopsgare. 

_ c fo/ty/iS a/ict" xincc 


If only 

chancellor 

were as 

generous 


0121 423 3018 

Powerline 


Soverei(pi (Forex) tid. 

24hr Foreign Exchange 
Margin taxing Fod&y 
CnmpdKve Priau 
Dafy fax Service 
tt 071-931 9188 
fete 071-931 7114 

Mqaioal 

l*wfanSWWOBE 


COUPARKMPARANAEN$£ 

DEENERSA 


COPEL 


DATED: 25 November 19M 


M/IME5E3 15/pw 


MJ. Balfour 

Ctmlrman 


■ — ■■■ — ■ — ■— AH AdverttemmbooHngs arc accept 

PERSONAL srijreireuuraiireat'ttrmittd 

- Oom ft xxa. capita oT which are avaBiMc 

ssasBSsr-" 1 - “■■"aas"'" 1 - 

ftr 444 71 873 3064 


LEGAL 

NOTICES 


SALTO CAXIAS HYDROELECTRIC PROJECT 
IGUAgU RIVER 

INTERNATIONAL BIDDING C-201 
TURBINES AND GOVERNORS 
CALL FOR BIDS 

COMRANHIA PARANAENSE DB ENEROIA - COPEL, inform* that an interna- 
tional bidding ia open fot design, supply, shipment, erection sopcrvnton end operation 
start-up of four (4) ftands vertical type TtaMnea, 3(5 MW each, with Digital Type 
Oovcjhom, Electronic Devices and Main Supervisor Panda foe Uw Sato Carina 
Puwei phot, located at Capitao Lefltrides Marques and Nova Pratt do Ignapi country 
bolder, in tbe State at Parana - Brazil 

Tliia lowest price type tate ro attond bidding a open to infividoal co mp anies or joint 
vestures. 

The amount of casts related to (his supply will be covered by COPEL’a own resources. 
COPEL is asking for a crodti line for Salto Cnxias Powerplaur ban IntosAnwrkan 
Development Bank - (DB - which if allowed, will cover this supply. 

The Bui Documents will be available to bidden from Noveiribcr 23th, 1994 re January 
13th, 1995 against payment in brezBiao cmtcacy of RS 150,000 (am hundred fifty 
RsaisJ, at the following addresses: 

Saperireendcatna de Obres de Geropo 
Rus \Wma4rios da Pairia, ^33 - 5* andarab 504 
SOOaWMO -CSreWte- « 

TOefono (55-41) 322-1212 - Ramal 541 
TUefW (55-41) 331-3265 
or 

Bsoiforao COPEUSao Panto 
Alameda Santos. 1800 - 14- acuta - cooj. L4B 
01418-200 -Saa Paulo - SP 
Telefbnc (55-11) 289-1431 

At the time of Bid Documents purchase, aO companies shall p resen t a letter coomfo- 
mg their complete mailing address. 

The receipt of Pre-qualificadoti and Sid Documents is scheduled for Match 1st. 1995 
at 3dU pm, it COREL'S office meeting room hi Curitiba, 233 Vsfaiufoioi da Pitria 
Street, 5th float 

The Bidding will be ruled by Lew No- 8666, dated June 21. 1993. with ahttathms 
Introduced by Law No. 8883, dated June 8, 1994 and by other coadhioiis stated hero- 
in and in the Coturecr Documents. 

eng: JO AO CARLOS CAS CAES 
Director Presidenlc 


COMPANY NOTICES 


IM3 SECURITIES LTD 

(Registered No, 2124021) 

NOTICE Is hereby given, pursuant to Section 175 Companies Act 1965, 

that 

L The above-named Company Was approved o payment out of capital for 
the purposes of acquiring lb own shares by prodwse. 

2 . Tbe amount of the permissible capital payment fot the shares in ques- 
tion is £1000fo5ll and the resolution Approving «tch payment out of 
capital was passed cm 25 November 1994. 

3. TheSfetfittotyDedjradtjnof the Krechw and the auditors' report 
required by Section 173 of the said Ad am available for Inapeciton at 
the Company's registered office at IMI House, 8 Laurents Poutiwy H31, 
London EC4R0BE. 

4. Any creditor of the Company may at any time within five weeks imme- 
diately following 25 November 1994 apply to the High Court under 
Section 176 of the said Act for an order probating the payment 


No AM 139 of UM 

IK TH* HIGH COURT OF JUSTICE ' 
CHAWCHtY DIVISION .. ... . _■ 

COKMIUE2 COURT - 

IN TUK MATTER OF 
STORM GROUP PLC 
an d 

IN TUB MATTER OF 
THE COMPANIES ACT 19*5 

Mono: <5 KERHVy CtVBN Aar to Onler of 
the ltM Own of Junto lOnnj DMatau) 
dhrted26tfa day of October 1994 costuming Ibe 
reduction ot to rim euu|UNy a a tore prenrimn 
accnanr by &.45HOOQ war regwereJhy to 
B « B « Uat of Ctmuunaa on to 21U day of 
October 199*. 

Otaud to. 30A of Nwcrebei 1994 

EdpftBlimi 
IBA9 Snn hf rton Hate 


London WCtA 2AI 
RcGAWMUfi 

Soticitm hr to abow-wraed Compear 

F CWRJOHT H0UMN05 LUMTED 
r C WRIOHT INTERNATIONAL LIMITED 
WRtOHT CAMO SRVIOS LIMITED 
uiL ■ UMKsnunn aacsmwl 
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■riBiMinsar 
INTERCOM (UK) LIMITED 
NaSHinv uu aim, mourner no a« 

tones 6 HOOT OWN tut <« Mto Rated of RtoM 
Model. IfnCtokSuiaa Ate OmSj. Wto Store «HW 
1HT to Wkto Ml* BMm el Bofau Store IBS Or 
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to toMxuMd arew m it Nenetoa mt bt to 
Orito 

DflaUSNenab'i HM 

mob aujooac erf vmm tMSAV utxsiow 
idtUato) 


COMPANY 

NOTICES 

Quebec Ceatrai SnBway Company 
C ^tal Stock 

In ptnoratian for the payment of die haK- 
yratiy (fividend due Jannary 15 1995 oo 
the above stock, the transfer book* win be 
dosed at 3J0 p,m. on December 16 1994 
and will be re-opcoed on December 28 
1999 

D.R. Keaat 
Anfatam Serectuy 
152-65 Trafalgar Stfmre, 

London WC2N 5DY 

November 30 1994 

GENEVA 
SWITZERLAND 
Pun Service b our Bnsfaen. loternaireaal 
taw and Inca. MaUbo*, telephone, for- 
nistied ofGcxa and conCeitnce room for 
daily Of Monthly rental, telex and icle- 
copfer eenrfcc*. TVattdadon tad secre- 
tarial dervicca. Formttioo, dornktlwfon 
and admintsinboit of Swiss and Potdga 
companiet. 

FaU cooJWcdcc and dtsemion assured. 
BUSINESS ADVtSOfiY SEBVKXS&A. 
7 Rm Muzy, 1207 Genera 
T* 736 *548. THoe 413222 
Fuc 7866644 


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FINANCIAL TIMES WEDNESDAY NOVEMBER 30 . 19»4 



K 


V 


1994 will go down as a glorious year 
for the British economy. It trill not 
go down as the year of an equally 
b rillian t, budget But the combina- 
tion of unexpectedly high growth 
with unexpectedly low inflation has 
given the chancellor of fte exche- 
quer a wonderful story to telL It 
has also allowed him to relax pub- 
lic spending without being too obvi- 
ous about it Otherwise, what is 
noticeable 1$ the number of politi- 
cally astute and sensible gestures, 
particularly on employment and 
social security, a concern with busi- 
ness, especially small business, an 
absence of any overarching ideas 
for reform, and determination to 
control the running costs of the 
public sector. 

What has been left to later is the 
tax cuts that the prospects for pub- 
lic finance will apparently allow 
and politics will surely demand. It 
is, of course, absurd to raise taxes 
by close to £7bn in a few months 
only to lower them a year or two 
later. But politics are another mat- 
te. Inevitably, Mr Clarke chose to 
keep the bigger presents locked in 
his treasure chest until later. 

Instead, be ottered a number of 
relatively modest changes - many 
of them desirable. But he has also 
tolerated a large real increase in 
public spending this financial year, 
by comparison with what had been 


Financial Times 


Rewards of fiscal virtue 


measures oa radal somrtty and 
employment ’Wlriie inouest to#, 
are altogether wetatefc T he refo rm, 
of boosing benefit, for example, 
while certain, to be unpopular,, was 


W 


to this benefit 


expected, thus taking advantage of 
lower than expected inflation. The 
difference is substantial. The plan 
had been for a real reduction in 
general government spending of 0.1 
per cent in 1994-95. The reality is 
now expected to be an increase of 
IZ per amt For the “control total” 
(which excludes cyclical public 
spending), the plan bad been for a 
reduction of L3 per cent in real 
terns, while the reality is to be an 
increase of 1.4 per cent 

How plausible then is the strin- 
gency planned for 1995-96 through 
to 1997-%, during which years there 
is expected to be virtually no 
increase in the real control total, 
above the level that will have been 
reached this financial year? The 
real level of general government 
spending is also forecast to rise by 
a mere 2 per cent between 1994-95 
and 1997-98, less than the increase 
this year alone. 

This is a case of frugality post- 
poned. But the chancellor is still 


able to show a more than respect- 
able fiscal prospect. As a percent- 
age of GDP, the public sector bor- 
rowing requirement is forecast to 
come down from 5 per cent this 
year to 3 per cent in 1995-96 (down 
from the 4V. per cent forecast last 
year), 1% per cent in 1996-97 (one 
percentage point less than forecast 
last year) and balance by 1995-99. 
Gross general government debt is 
also forecast to peak at 49*', per 
cent of GDP in 1995-96. . 

Thus, on both the fiscal deficit 
and government debt, the UK is 
forecast to be within the Maastricht 
treaty criteria very soon indeed. 
With retail price inflation (less 
mortgage interest) also forecast at 
2Vi per cent in the year to the 
fourth quarter of 1995 and the same 
or less thereafter, that stout Euro- 
phile Mr Clarke has done what he 
can to position the UK for the third 
stage of any move to economic and 
monetary union, should his party 
be in office at the time and then 


permit it. 

What lies behind this happy pros- 
pect is the economy’s astounding 
performance. The chancellor is 
right to claim the combination of 
this year - economic growth at 4 
per cent (3*.'» per cent for non-North 
Sea GDP), a current account deficit 
of only l i per cent of GDP. exports 
of goods and services up 8% per 
cent (with imports rising only AY* 
per cent) and inflation at 2 per cent 
- as the UK's best for a generation. 
But one swallow does not make a 
summer and one annus mirabilis 
does not make a miracle. It could 
all too easily be another mirage. 

After all. as Mr Clarke pointed 
out. the UK has seen growth disap- 
pear in excessive inflation three 
times in the last two decades. The 
experienced observer wifi wonder 
how the UK will mess things up 
this time. The forecast is that 
growth will fall smoothly to 3 1 ., per 
cent next year. Notwithstanding 
the tax increases in the pipeline, it 


may take substantial interest rate 
increases to bring that about It 
would probably be better to avoid 
the widely expected tax cots alto- 
gether in future years and allow 
net exports and investment to drive 
toe economy forward. 

What them is to be made erf toe 
detail of toe budget? If inflation is 
kept this low, the proposed freeze 
on toe running costs of the public 
sector is perfectly sensible. Less 
attractive is some of toe fiscal tin- 
kering. The new Venture Capital 
Trust scheme, which will provide 
income tax relief at 20 per cent, 
looks like a tax loophole in the 
making: Such fiscal concessions are 
not the right way to promote eco- 
nomically gfffcigQt: small bCSEOesS. 

Equally, the chancellor missed an 
opportunity to combine the Tax 
Exempt Special Savings Accounts 
(TESSAs), the first of which mature 
this year, with Personal Equity 
Plans (PEPs). Instead, he has 
allowed toe latter to include corpo- 


rate bands and preference shares 
and proceeds of "toe former to be 
rfoprtgj +gri jn a jam account. Some- 
thing bnfrfe 1 * would have been for 
better. 

Downright peculiar is the pro- 
posal to spend £605m on transi- 
tional relief for businesses facing 
higher rates ftffls following revalua- 
tion of properties. That such large 
amou n ts of transitional relief are 
required so long after uniform busi- 
ness rates were introduced is at 
best straxzge- 

Whlte it is a welcome change to 
fee the wifltn personal allowances 
raised in line with prices once 
more, the dwifrfon to use available 
money to widen the lower rate tax 
b are! by £200 merely reminds rate 
how unfortunate tins notion was. It 
complicated the tax system and 
now prevents the more sensible 
change of raising tax thresholds 
altogether. 

InteHectiiany, at Least, the cerdre- 
piece of tiie budget most be fha 


^irrqn. gg family credit for ,-fbflfe hi 
felltone jobs, accelerate payment 
erf benefits to people taking Jobs, 


■ • j* 


credit for people without dnMnsn* 
reduce lower rate nation al tostt* 
contributions and introduce a 
rebate of the jmiionalinsurance 
contributions for the', long-term: 
Mtemployed (even though toe lat- 
ter axe defined as those - U irftH^ . 
ployed more than two year?). It 
would be rather better to nse t he, 
fixture fiscal room for manoeuvre to - 
a-rtond and develop such schemes 
tj pm merely to cut toe baric rate of 
income tax, as Toy baokbesdsra 
wfll demand- 

Air Hinrkg stands' revealed aa a 
sensible chap, full erf good into- 
tarns, but with limited flscal &nbi- 
lions. This is not a. budget with big 



ones. His really tag idea has 
to be sustaining toe expansion. Mr 
Clar ke showed cou ra g e hi raising. 
tar ** last year. But he wfQ. bow 
have to show at Least equal courage: 
to keep recovery under control. 


Samuel Britt an 


The public sector’s finances 


Chancellor points in 


right direction 



Revenue and expenditure (% of GDP)* 


— The move to a 
J \ unified Budget in 

f j late autumn has 

> already had one 
advantage. A large 
part of the speech 
dealt with public 
spending. In almost 
every other country 
national budgets are concerned 
mainly with spending and how it 
will be financed; now toe UK has at 
long last moved into line. 

The predictability of this year's 
Budget measures is all to the good. 
Treasury officials have been work- 
ing for decades to put the public 
finances on a medium-term basis. 
What came to their aid was the 
political shock of the high 1933-94 
public sector borrowing require- 
ment (originally overestimated at 
£50bn) plus the desire to correct 
gradually until recovery from reces- 
sion was secure. 

Thus it is not surprising that the 
main headline tax measures are 
simply a confirmation, of tax 
increases to which the government 
committed itself in the two Budgets 
of 1993. But because of faster-than- 
expected economic recovery and 
lower-than-expected inflation, the 
public finances are coining under 
control more quickly. 

There are several innovations in 
this year’s Financial Statement As 
reformers have long advocated, the 
Treasury now separates public sec- 
tor current from capital spending in 
its very first summary table, and 
draws up a “current balance”. In 
fact such reform has became inevi- 
table as the “private finance initia- 
tive” makes the total of public sec- 
tor net capital spending a somewhat 
misleading indicator. For much of 
what would have been called public 


capital spending is now disguised as 
private sector investment 

The net result is that the Maas- 
tricht guideline of public sector bor- 
rowing not exceeding 3 per cent of 
GDP is expected to be reached next 
year. The Treasury’s projections 
now show the current deficit disap- 
pearing around about 1997-98. The 
PSBR is due to disappear in 1998-99. 

The finaniriai mar kets were ini- 
tially disappointed that the Trea- 
sury maintain ed a cautious esti- 
mate for toe PSBR in the current 
financial year. The big change is its 
reduction by £8bn, compared with 
the projection in the last Budget 
Red Book, for both 1995-96 and 
199687. Much the greatest reduction 
has been in public spending in cash 


The most interesting 
aspect Is the 
improved incentives 
to take low-paid jobs 
and for employers to 
offer diem 


terms, due to lower inflation^ which 
- as widely predicted - the chan- 
cellor has allowed to be reflected in 
an improvement in the public sec- 
tor balance rather than an increase 
in real programmes. There are, 
however, some modest economies 
especially from 1996 onwards - 
reflecting the private finance initia- 
tive, housing benefit reform and 
lower spending on roads. 

Much the most interesting aspect 
of this Budget is, however, the 
widely foreshadowed measures to 
improve incentives both for poten- 
tial workers to take low-paid jots 


and for employers to offer them, (.if 
course, this is second best to high- 
skilled workers taking better- pa id 
jobs. But in a non-ideal world low 
pay is very much better than no 
pay. The chancellor has gone rather 
further than I expected that he 
would, given the departmental cau- 
tion of both the Treasury and the 
Department of Social Security. 

The thrust towards shifting bene- 
fit from the dole to top-up payments 
for those re-entering employment or 
working in low-paid jobs is most 
welcome. The chief measures here 
are the increase in family credit for 
those in full-time work, and the 
accelerated payment of housing 
benefit and family credit to those 
moving off toe dote. 

We also at last have a pilot 
scheme to extend family credit to 
people without children, who make 
up about two-thirds of toe long-term 
unemployed. The sooner it moves to 
a regular across- the-country basis, 
the better. The 0.6 percentage point 
reduction in employer National 
Insurance Contributions for the low 
paid is welcome, as is the one-year 
National Insurance holiday for tak- 
ing on the long-term unemployed. 

It is unfortunate, however, that 
the long-term unemployed are 
defined as people who have been 
without a job for more than two 
years. In most studies of toe ques- 
tion, one year, or even less, is the 
threshold. But if these measures 
work, they can be extended further 
by this or another government The 
Treasury has also been very cau- 
tious about the likely offsets from 
lower dole payments and higher tax 
receipts resulting from these mea- 
sures. If this caution is shown to be 
excessive, the way will be open for 
further extensions. 


Receipts 


Current expenditure 


Current balance 


Net capita) spending** 


Financial deficit 


Privatisation proceeds mid 
other financial transactions 


Public sector borrowing 
requirement-percent 



-£bn 34 h 211k 

* Coratttum. tans mty not sum to totals because df rowing 
—Capita spending net of dapraotadon and has capital ftansfer'Qoeqrts 


Two other detailed measures 
caught my eye. One was the 
changes to be announced by the 
Department of Trade and Industry 
to discourage creditors from putting 
companies into unnecessary liqui- 
dation. This plus the late payment 
of bills is probably the greatest 
curse of the small business sector. I 
was also attracted by the idea of a 
tax on landfilled waste, the pro- 
ceeds of which would be returned to 
industry in the form of lower 
National Insurance Contributions. 
The idea of putting more tax on 
environmental degradation and 
reducing toe tax on labour is a sen- 
sible switch and an intelligent use 
of the price mechanism. 

There were no innovations in 


monetary or macroeconomic policy. 
The most interesting aspect is that 
Kenneth Clarke r ea ffir m e d Norman 
Lament’s commitment to securing 
inflation within toe lower half of 
the 1 to 4 per cent per annum target 
range. The Treasury's projections 
do indeed show most underlying 
measures of inflation, such as the 
RPI excluding mortgage interest, 
producer prices and the GDP defla- 
tor, within a 2 to 2% per cent tun- 
nel. despite a modest upward blip 
next year due to the rebuilding of 
margins and higher commodity 
prices. If these projections are to 
remain credible, interest rates will 
have to rise again soon. 

As might have been expected, the 
Treasury has been quite cautions 


about upgrading its overall growth 
forecast Non-ofl GDP Is estimated 
to rise by 3’A per emit in 1994, which 
- although subs tantiall y up on pre- 
vious official forecasts •- is still 
likely to be an underestimate. From 
2995 onwards, the difference 
between GDP and non-North Sea 
GDP thankfully disappears. Both 
are set to grow at 3% per cent, 
which again looks cautious. For 
later in the decade the Treasury 
pots average annual growth at 2% 
per cent, which is still regarded as 
above the underlying growth trend 
and sufficient to reduce unemploy- 
ment and talm up slack. 

The longer-term projection is for 
a growth of Nominal GDP of 
slightly under 5 per cent per 


annum, of which 2 per cent would 
be the irreducible inflation mini- 
mum. . £C, however, recent supply 
side movements continue, and. the 
measures to encourage employment 
really work, it might be possible to 
envisage a somewhat faster rate of 
boto nominal and real growth with- 
out reigniting Inflation. 

But the credibility test will come 
very much earlier in making sure 
that demand does not grow at 
excessive speed in the months 
ahead. There is here an uncanny 
similarity with the D5, where tie 
Federal Reserve vice-chairman, 
Alan Blinder (a Clinton appointee 
and hardly a fanatical hard-money 
man), has just warned about the 
speed erf the upturn. 




Building the new jobs consensus 


Notice is hereby given that the Final Redemption 
Amount applicable upon redemption 
of each note will be : 


John Willman on incentives to create 
employment and to get back to work 


USD 93,870 per denomination of USD 100,000 


calculated by applying the following formula 
to each denomination : 


M r Kenneth Clarke made 
much in his Budget 
speech of the gull 
between the Conserva- 
tive approach to reducing unem- 
ployment and that he ascribed to 
the Labour opposition. 

The chancellor contrasted his 
approach of reducing the cost for 
employers of taking on long-term 
unemployed with what he described 
as Labour’s desire to load costs on 
to employers through policies such 

as the m'lTnimnm wage and the 

employee rights embodied in the 
European Social Charter. 

Yet apart from those few well-re- 
hearsed differences between the 
Conservatives and Labour, much of 

the package of measures announced 
to get the long-term unemployed 
back into work is common currency 
among toe main political parties. 

“There is a growing consensus 
that there is a problem in the inter- 
face between work and benefits ” 
said Mr Howard Davies, director- 
general of the Confederation of Brit- 
ish Industry. “What toe government 
is proposing is a set of interesting 
measures that together will have a 
reasonable impact on toe problem." 

Mr Clarke has shown himself will- 
ing to borrow good Ideas from 
sources that include his political 
opponents as well as the CBI and 
right-of-centre think-tanks. 

He has also quarried the final 
report of toe Social Justice Commis- 
sion of Sir Gordon Borrie on 
modernising the welfare state far a 
future Labour government 
Not surprisingly, Labour is 
unhappy at what it regards as the 
theft of Labour’s ideas published 
last week without the provision of 
toe funds needed to make them 
effective. Mr Gordon Brown, 
shadow chancellor, said last ni g ht ; 


(100 % + 10 (T.70 % - SPREAD J } x USD 100,000 
where "SPREAD" = 2.313 


Payment of principal will be made on 
November 30th, 1994 in accordance with 
Condition 6 "Payments" of the Terms 
and Conditions of the Notes. 


THE PRINCIPAL PAYING AGENT 

SOGENAL 

SOCSETE GENERALE PARES GROUP 
15, Avenue Emile Reuter 
LUXEMBOURG 



^he twice-monthly newsletter 
covering currant legal issues 


for lawyers advising industry in 
Europe. Easiness Law Europe 
combines up-to-date timely 
reporting with down-to-earth 
and practical comment, setting 
news in context and identifying 
the real meaning of events and 
their imp&cattons for European 
business. 


To receive a FREE sample 
copy contact: 

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Fax: +44 (Qj 81 673 1335 


“The chancellor is deluding the 
public if he is ciahtiiwg them mea- 
sures Krill be enough to tackle 
long-term unemployment. " 

Still, there is clearly a growing 
consensus on two assumptions: that 
helping toe long-term unemployed 
back into work is best done by giv- 
ing employers Incentives to offer 
jobs; and that persuading the unem- 
ployed to take work - especially in 
low-paid jobs - requires changes in 
the social security system to pro- 
vide incentives to come off benefits. 

The first assumption is behind 
the rebate of national insurance 
contributions for employers who 
take on someone who has been 
unemployed for more than two 
years. For low-paid workers, this is 
less generous than it appears, 
according to Mr Paul Johnson of 
the Institute for Fiscal Studies, 
because employers' NI contribu- 
tions are not very high at the bot- 
tom of the income ladder. 

“Employers’ NI is less than £10 a 
week for snployees earning up to 
£200 a week,” be says, "ft would 
probably need a further grant to 
make a real difference to employers’ 
hiring derisions." 

One attempt to provide such 
grants is the Workstart scheme, 
already being pioneered in four 
areas and now to be extended, in 
new -pilots. This pays employers £60 
a week for 26 weeks if they take on 
someone unemployed for more than 
two years, into £30 a week for a 
further 26 weeks. Such a costly 
scheme is being restricted to 5,000 
new jobs. 

The second half of the consensus 
job creation package is improving 
incentives for the unemployed to 
accept what job opportunities there 
are - even when they are low-paid 
or part-time. 





:£3£0Q. 


js.et83., .• v- -. , 

Rofitfcsrl^otr party 'member-^,' ~ 
Sakf yesterday "HO •" 

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tawe ffltecLHefs^t^J^iglhe; 

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. oft the.ofo«7 R Isn't benefirial to* 



One way to achieve this is by 
cutting social security benefits for 
those out of work. Tougher rules 
have already been introduced for 
claiming invalidity benefit, which 
many long-term unemployed were 
claiming because of the higher rates 
of benefit. Yesterday's budget 
announced toe end of the payment 
of mortgage interest for toe first 
nine months of unemployment 
“Around SO per cent of 30-year- 
olds are owner-occupiers," says Mr 
Alan Marsh of the Policy Studies 
Institute, the independent think- 
tank. “Maybe they will be prepared 
to take out insurance to cover toe 
payments, but it will be a powerful 


Incentive for tile newly unemployed 
to find a job.” 

For those who are prepared to 
accept the work on offer, however, 
there are better benefits. These 
include help for those returning to 
work after a long spell of unemploy- 
ment who may need to buy work 
clothes, tools, transport or child, 
care. 

“The chancellor is prepared to 
taridte toe hidden in-work costs that 
act as a serious disincentive to 
accepting jobs," s aid Mr Marsh. 

The biggest incentive to accept 
low-paid work is family credit, a 
benefit that tops up the income of 
more than 500,000 low-paid employ- 


ees with children. The chsmr+ j r^ 
^pounced a pilot to 
extend family credit to couples 

it £L5hn a year; 

u to© pilot is a success and the/ 
18 offered to everyone in. 
wori : U* UK welfare state 
win move closer to a negative 
2“*“® tax system in which the 
stoteroutoKly tops up the income 
on tow pay, and taxes those 
rartner up the mcome ladder. 

n.TilS?’ **"* result be to end 
ST!? 2*^ PeePk on benefits,”: 
said Mr Marsh, “a surprising out* 

men t*’’ * ^ 0ns8rva ^ ve govern* 



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FINANCIAL TIMES WEDNESDAY NOVEMBER. 30 1994 


BUDGET 94: News 


jj^ Spending cuts boost morale on back benches as chancellor hints at pre-election tax cuts 

Clarke revives sagging Tory morale 


By PfriBp Stephans, 

Political Editor 

Ministers and Conservative MFs last 
night grasped at the prospect of 
income tax cuts before the next gen- 
eral election as Mr Kenneth Clarke’s 
Budget drew a respectful but less 
than ecstatic reception on the govern- 
ment backbenches. 

The deep cuts in spending 
announced by the chanc ell or - and 
the parallel falls in his projections for 
public borrowing - did raise the 
morale c£ a party battered by its lat- 
est boot of infighting over Europe. 

But Mr Tony Blair, the Labour 
leader, signalled that the opposition 
would move quickly next week to try 
to kindle a Tory backbench rebellion 
over the imposition at the full rate of 


value-added tax on domestic fueL 
Mr Clarke’s emphasis on restoring 
order to public finances, building con- 
fidence in the economic recovery and 
reviving work incentives for the 
unemployed were applauded by senior 
Conservatives as a sensible medium- 
tom strategy. 

The chancellor also enhanced his 
own reputation as a politician with 
the confidence to shrug off short-term 
expediency and plan for the tnwriiiiwi 
tom. 

Amid widespread fears, however, 

that the Budget would do little to 
boost the government’s popularity in 
the short term, other cabinet minis- 
ters suggested Its success would 
depend crucially on reinforcing disci- 
pline on Hi p hfl ck b^ nrh^* 

Senior ministers are resigned to a 


crashing defeat in next-month’s Dud- 
ley West by-election, a result which 
could add impetus to a threatened 
Tory revolt over VAT on domestic 
fuel 

Mr Clarice’s announcement of extra 
help for the elderly to meet the costs 
of the increase in the tax from 8 per 
cent to 17.5 per cent next April Med 
to dispel disquiet over the tax among 
the government’s supporters. 

Some potential Tory rebels said that 
they would study the chancellor’s 
new proposals before forming a view, 
but others indicated the compensa- 
tion package would not be enough to 
persuade them to support the govern- 
ment 

Last night It appeared that MPs 
would have their chance to vote again 
on a Labour resolution to force a full 


debate on the issue as soon as next 
Tuesday. 

Confirmation yesterday that eight 
Tory Eurosceptics had been 
suspended from the parliamentary 
party after Monday’s revolt on Euro- 
pean Union finances was followed by 
a clear signal Mr Major wants to 
avoid another bruising co nf ront a tion. 

Despite the chancellor’s insistence 
that the increase in the VAT rate was 
an essential part of his overall tax 
package, Mr Major refused in the 
Commons to elevate it into an issue of 
confidence in the government. 

The prime minister said that a 
Labour's attempts to reopen the issue 
would lead to an “important" vote. 
But defeat Would not e ut< HwaH/»any 
lead to a general election as 
would have been the case had his 


administration lost over Europe. 

Mr Major’s enemies on the right of 
the parly appeared unable last night 
to would muster sufficient support to 
mount a chaBenge before the expiry 
of today’s deadline for a contest But 
the suspension of the Euro sceptics 
and a more widespread mood of sour- 
ness in the party after the recent 
infighting lute left members of the 
cabinet doubting that thp government 
will be able to delay an election until 
1997. 

The message to the chancellor from 
ministerial colleagues last night was 
that next year be must deliver the 
first substantial instalment of his 
promised tax cuts. 

Tories suspend rebel MPs, Page 8 
Ian Davidson, Page 12 


Defence 

ministry 

emerges 

virtually 

unscathed 


By Bernard Bray 

Britain’s Ministry of Defence 
emerged almost unscathed 
from tins year’s public expen- 
diture round, having suffered 
heavy losses in last year’s 
Budget 

Cuts of the order of £250m 
over each of the next three 
years are planned because 
inflation has proved lower 
than expected, but no large 
equipment programmes are 
threatened by yesterday's 
announcement. 

However, plans to privatise 
the Mod's housing stock were 
Still left in doubt 

Buoyed by a painless spend- 
ing round, tiie MoD announced 

new equipment orders for frig- 
ates ami miss iles for the Royal 
Air Force. Invitations to ten- 
der for a final batch of up to 
three mare Type 23 anti-sub- 
marine frigates will be issued. 

Fbvonrite to win the £450m 
frigate order is the Yarrow 
shipyard on the Clyde owned 
by GBC, which is currently 
vying with British Aerospace 
for con trol of the submarine 
maker VSEL. Yarrow has built 
nine of the 13 Type 23 ships so 
far ordered. 

Two new missiles were also 
confirmed for the RAF. A 
long-range attack missile will 
be ordered in 1996 costing 
about £750m. 

This will allow Tornados, 
Harriers and Eurofighters to 
attack targets up to 260km 
away with high accuracy. 

The idea for the missile 
came from the Golf war where 
US forces used advanced muni- 
tions to great effect, with their 
fighters able to remain at safe 
distances. 

There are several possible 
competitors for the contract. 
Leading contenders are the 
French company Matra with, 
its Apache missile, McDonnell 
Douglas of the US with its 
GrandSLAM and a UK team of 
GBC and BAe offering the Peg- 
asus missile. 

The other missile for the 
RAF is a £700m anti-tank 
weapon primarily intended to 
be launched from the Tornado 
and the Harrier. 

It is intended to knock out 
tanks and armoured personnel 
carriers in combination with 
the anti-tank helicopters the 
army is currently considering. 

GBC is offering its version of 
the US Hellfire missile while 
British Aerospace is offering 
an adaptation of its Asnuun 
anti-aircraft missile for the 
competition- ... 

The one issue wnlcn 
remained unresolved for the 

MoD in the Budget was the 

gap ta its funding for next 
year which would be caused 
bya failure to sell its housing 

fhp ipWiislr v is relying on 

eJtfng OP *> £50m for htrase 
15^ 1995-96 but to nm 
into technical difficulties. 


The man 

Kenneth Clarke 

• Bom Jtey 1940. the grandson of an engineering pattern maker 
and son of a'coUfary electrician who later owned a watch 
repair shop 

•- Educated Nottingham Vfgh School and Cambridge University 

• 1960s becomes lawyer and fate to become Conservative MP 

• 1970 elected Conservative MP lor Rushcfifte 

• 1974 Junior Treasury mWster 

• 1986 joined cabfeief as auptoyoient minister 

• 1968 health secretaiy: embroiled tn controversy about cuts 
in state health service 

• 1990 home secretary; enraged ppUce chiefs by supporting 
reforms that would have cut pay for some ranks while 

• ’abofehfog athera • 

• 1993 chancellor . 


The job . 

I often enviad rayfoteJgn geflaaguos fte comparative flgbtness of 
their ktad V . . ii fcjeUrilted States the Treasury secretory, (See most 
members cdfthe A ft i ft Bst rau dn,* was usuafly drawn from outside the . 
Copgfoss. ^ omertoanc»Trinlster carried so wide a range of . 


>- (fentelfeai^^abburchurcefor 1974-79} 

^nhe.cHaipiwr has hfe fhger to pretty wtf every pfeih 
", government. * - Asa result,' he can mart a a lyitf fc a n t infeisnoaon - : 
^ptSCtes whwh ara urmoiinced by other ministers and.whfch the ptfcfc. 

' does not associate wlift toe Tteasuty* 

- .-.I'fige* Lstwson (Gonsarvatfve chancellor 1983-89} 


•7\, 


• . The daybeKXK Ghahcetoc explains the Budget at one-to-one 
tt» Quean . 

^M'.hUpmhg-fa die O^.na-Badgat cabinet meeting' 

Aftaafeo^ wfth Budget box 

Boose Oommons 

• opposWorr leader ■ 

' ftfe* Mftf. on gongetvaftto' petty bac kb ench-finance 

•• ; 4 . - ' 

/r/;' Atef^xasa.’:-'; r. ■ 

■; V Cofctxate'iri it Oownfriff Street. 


•m'. . 

:.M; Treasury: ike. ndhfefly Snance - one of the smallest und most ■ • 

■ deptetrnenta 

. * [First .L&ftjV-toe Treasifly; fwnoraiy «te far the prime moifeter 
.'.1 ; mfecBog bis fang-fongopen rofe as head of board of the Treasury. 
•f It js WBO aver TOO years since .the board has met ragutarty, and • 

* me 1 prims' trurifeter remains a member of the House 
' i,’ - Lord, therefore, t» to not strictly 

:• /. s ; louf «t.eS” 

cWtaefeir oi ^e Qectwquer: chief finance minster - the nape * 

. ; ExcfiB<jiJBr fe tferitted front a chequered doth or board used for 
; ■ wa^:Ca*ada^ top finances of medlewal Hngs of 
v '• . fia^and. ChanMUor b, aiso. Second Lord of the Treasury and 



Traditional gesture; Keimeth Clarke holds aloft the red Budget box used by chancdlore since 1860 


•; •i.BuasdLbox -.tfwbox held aloft by Kenneth Ctarke yesterday was 
, * ' \ ftst Used io imp Etodget papers to fta House of 
C: •■•Obrorhoha bylfeerfi chapcaBbr WMam Oudstane in 1 860 


The ritual in which the chancellor holds up the 
box for the press photographers may appear 
faintly ridiculous, Philip Coggan writes. Bat it 
is historically appropriate; the word budget 
derives from an old French term bougette, 
meaning little bag. 

When he starts speaking in the House of 
Commons, the chancellor has a privilege denied 
to all other members: he is allowed to enjoy an 
alcoholic drink. Last November Mr Kenneth 
Clarice had a glass of whisky, as did Mr Nor- 
man Lament in March 1993, when he 
announced a standstill on spirits duties. 

The Budget speech can often seem to last an 
eternity, especially for analysts and economists 
with cheats to inform. 

But at least times have changed from the 
days when William Gladstone was Liberal 
party chancellor. He holds the record for the 
longest Budget speech - a mammoth i% hours 
in 1853. Beniamin Disraeli (Conservative), who 


delivered the shortest Budget speech at 45 min- 
utes, dismissed Iris great liberal rival as “a 
sophisticated rhetorician, inebriated with the 
exuberance of Us own verbosity”. 

Of modern chancellors, only Sir Geoffrey 
Howe for the Conservatives fin 1990) and: Mr. 
Dads Healey for Labour (in 1984) have tested 
their audience’s stamina hy reaching the two- 
hour mark. Last year Mr Clarke, presenting the 
first unified Budget for years covering spend- 
ing and taxation, managed to cram Us message 
into a brief 74 minutes. 

One legacy of Gladstone is the Budget box, a 
battered wooden receptacle covered with scar- 
let leather and hearing the monogram VR for 
Victoria Regina. Mr James Callaghan (Labour) 
tried to replace the box In 1965, substituting a 
brown leather item. His temerity in timbering 
with tradition may have beat partly responsi- 
ble for the cause of Us downfall - sterling's 
devaluation in 1987. 


Japanese and Germans face higher charges 


By Tony A6en 
and John Gapper 

German and Japanese 
companies face higher UK tax 
charges on the earnings of 
their British subsidiaries, as a 
result of changes in tax law 
announced by the chancellor. 

The changes, to the tax lia- 
bility of UK subsidiaries which 
have a higher ratio of debt to 
equity than the Inland Reve- 
nue deems acceptable, will also 
require British companies to 
re-examine the funding of their 
UK subsidiaries. 

Although the changes could 
be most disruptive to overseas 
companies, they may provoke 
protests from' large UK groups 
which have been free to create 
as internal capital structure 
without worrying about 
debt-equity ratios. 

Mr Jim Marshall, head of 
KPMG's international group in 


London, described the propos- 
als as “very significant" and 
said that German and Japa- 
nese subsidiaries in the UK 
would need to review debt pro- 
vided by a parent company 
urgently. 

The new rules change the 
regime for “thinly-capitalised" 
subsidiaries. One reason they 
have been funded predomi- 
nantly with interest-bearing 
loans rather than share capital 
is in order to gain tax relief on 
the interest paid. 

The changes may raise the 
UK tax charge or German and 
Japanese companies for new 
loans from today, and existing 
loans from April 1, because the 
existing tax treaties do not 
restrict tax relief on thinly-cap- 
italised companies. 

But parent companies from 
countries including Ireland 
and Korea may benefit because 
under the tax treaties with 


those countries, no interest is 
tax deductible. The changes 
will be neutral for subsidiaries 
of US and Dutch companies. 

The changes could affect UK 
inward investment because the 
m ann er in which the Inlan d 
Revenue interprets the rules 
will add uncertainty to Ger- 
man and Japanese companies, 
which have been among the 
leading investors into the UK. 

The rules replace existuig 
thin capital rules for payments 
to overseas parent companies, 
and impose thin capital rules 
for all UK companies paying 
interest to a company which 
owns 75 per cent of Its shares, 
or a fellow subsidiary. 

A change in the regime had 
have been expected for some 
time cm UK subsidiaries of for- 
eign companies, but the pro- 
posal will also apply to all com- 
panies in a UK group. This 
could create tax uncertainties 


and problems for some large 
UK companies. 

The proposals apply an 
“arm’s length" test to deter- 
mine the amount of debt a 
third party lender would have 
advanced to the borrower, 
given its existing financial 
postion, including particularly 
its level of share capital. 

To the extent that the 
amount of debt exceeds that 
which the Inland Revenue 
believe is appropriate, then the 
interest on the excess debt will 
be treated as a non-deductible 
distribution, increasing taxable 
profits of the borrower. 

• One of the tax loopholes to 
be closed by the Budget may 
raise the cost of issuing new 
shares in London. Perhaps 
most significant will close a 
means by which companies 
have avoided paying VAT on 
advisory fees incurred when 
raising new equity capital 


Unlike other advisory fees 
which also attract VAT, com- 
panies may not offset VAT 
charges incurred in capital- 
raising exercises for shares dis- 
tributed within the European 
Union against the VAT they 
charge their own customers. 

In effect, this 17.5 per cent 
charge is non-recoverable, 
notes Mr George Michie of 
KPMG Peat Marwick. But com- 
panies have been able to cir- 
cumvent the VAT charge by 
creating a tranche of shares to 
be sold outside the EU and 
allocating all the expenses to 
that tranche. Now, that loop- 
hole will he closed, raising the 
cost of Issuing new shares. 

Moreover, some merchant 
bankers said privately, the new 
rule is likely to increase pres- 
sure on advisers to moderate 
the fees they Charge. 

Tony Allen ft a partner m 
Cooper's & Lybnmd 


UK BUDGET DIGEST 

Cigarettes rise 
but drinks duty 
is unchanged 

BUSINESS: No change on corporation, tax 
Rise in rates (municipal property tax) paid by businesses 
limited to 10 per cent for large properties and 7.5 per cent for 
small ones; £605m to be available to transitional relief 
Export Credit Guarantee Department premiums down 10 per 
cent on average 

Tax incentives for investment of up to £100,000 to new shares 
in Venture Capital Trust 

Registration threshold for value added tax raised to £46*000 
PERSONAL TAXATION: Income tax rates nnrfiang»>d 
Personal allowances, higher rate tax threshold and income 
limit for age-related allowances to be indexed 
20p tax band widened to £3,200 

TOBACCO: Cigarettes up lOp for 20; duty on other tobacco 
products up by similar amounts 
DRINK: No change for duty cm beer, wine and spirits 
MOTORING; Car excise duty up £5 to £235; trucks unchanged 
Leaded and unleaded petrol up 2£p a litre; diesel up about 3p 
a litre 

JOBS: Employers to get foil National Insurance rebate for up 
to a year to take on long-term unemployed 
Further 0.6 per cent cut in lower-rate National Insurance 
contributions from employers 

Family credit to continue for first four weeks to those who 
take job; jobfinders’ grants to be expanded 
Housing benefit payments speeded up for unemployed people 
going into work 

SAVINGS: Personal Equity Plans to be expanded to take in 
more forms of investment 

Tessa tax threshold raised to £9,000; capital accumulated in 
Tessa at maturity can be reinvested straight away in new 
Tessa 

BETTING: New duty on amusement machines will extend to 
arcade video games 

HOUSING: Reform of housing benefit system from October 
next year to restrict payments of rents above local average 
New limits on mortgage support scheme 
£800m over three years for inner-city regeneration projects 

Scepticism on private finance 

The chancellor's announcement of ambitious targets for the 
government’s private finance initiative prompted a mixture of 
hope and scepticism to fiuanrial a n d civil engineering circles 
yesterday. Contracts for same £5 bn of private sector invest- 
ment are expected to be placed next year, said Mr Clarke. 

His remarks confirmed the government’s commitment to its 
private finance initiative, but indicated the long lead times 
which are necessary to get large projects off the ground. 

Reform for company rescues 

It emerged yesterday that the government is pressing ahead 
with reforms to company rescue procedures which have been 
fiercely attacked by the banks and the insolvency profession. 
In an attempt to reduce the number of viable companies going 
into receivership, the government is to introduce a 28-day 
moratorium to give insolvent companies time to reach volun- 
tary arrangements with creditors. 

The moratorium will be binding on all parties, including 
rrnnfamiRg* banks. Mr Malcolm London, president of the Insol-. 
vency. Practitioners Association and a partner of accountants 
Coopers & Lybrand, said that applying the moratorium to 
banks as well as unsecured creditors could be damaging. 

He called for farther consultation- “Banks are generally 
sensible anyway. This could influence their attitude to lending 
in future if they felt their freedom to manoeuvre will be 
limited.” 

Public borrowing slides 

The Budget presaged a much mare rapid reduction in the 
public-sector borrowing requirement than its 1993 predecessor, 
from £34.4bn this year to only £5bn in three years’ time. 
Lower-than-expected inflation explains the bulk of the 
improvement in public-sector finances. Mr Kenneth Clarke's 
first budget predicted a PSBR of £38bn in 1994-5, falling to 
ElZbnby 1997-8. 

Deficit expected to fall 

The Treasury predicts that the current account deficit, which 
was £103hn in 1993, win fen to £4bn to 1991 and to £&5bn in 
1995. It says this better performance is due to the feet that the 
improvement in the UK’s cost competitiveness, which followed 
sterling's departure from the Exchange Rate Mechanism, has 
been largely maintained. The UK’s cost competitiveness is 
estimated to be 10 per cent better than in the second quarter 
of 1992. 

Mercy for drinks industry 


AW Wfff lOBN’T 

UNX3iSttNJ> ME 
BUT I THINK TNE. 
CRAWCELUR. DOES 

mr 


Fierce complaints from 
Britain’s drinks industry about 
alcohol duties and the increase 
in cross-Channel shopping and 
smuggling of beer, wine and 
spirits were given lip service 
when Mr Clarke left the tax an 
drinks unchanged. But ahnihrr 
complaints from the tobacco 
industry received less sympa- 
thy. The chancellor’s commit- 
ment to a 3 per cent real 
increase in tax on tobacco to 
support the government’s aim 
of reducing smoking in Britain 
superseded concerns about a 
flow of UK purchasers to main- 
land Europe. The chancellor’s 
action on beer was expected as 
because a committee of MPs 
last week rejected a call by brewers for bee- duty to be halved 
in order to curb cross-Channel imports and stimulate flagsing 
UK sales. Mr Clarke said in his speech that cross-border 
shopping and smuggling had “meant a loss of duty to the 
Exchequer”. 




A 


In the real world it 
would be classed as 
a sound Budget 
with exciting politi- 
cal potential. It does 
nobody any harm, 
and it might do 
some important 
M --w r— groups of voters, 

sss 

fewSSSEK 

important bid one - 
VAT on domestic fuel hy 
STSBtf SS£* of an It 
chancellor in a position to 
'P ats ^IfrSStoDereonal taxation 
anno^^foT^one after 
next Novera ^ y^. ^ 

Msrtsstfft 


A shield to fend off the knives 


floated off the world as we know it. 
We saw them, and Mr Kenneth 
Clarke, in battle on Monday after- 
noon. They were squabbling about 
an extra £75m ($123m) contribution 
to the European Union’s budget 
Their unearthly shrieking shattered 
the party. 

The chancellor snarled over his 
ehn niiter at his opponents, all at 
that time recognised by the whips 
as Conservatives. He stood like 
Darth Vader, battling for the gal- 
axy- Improbable life-farms zoomed 
around his head. About seven or 
figw of them were banished by the 
Tory whips. The question was not 
whether the Conservatives would 
win again in 1996 or 1997, hut 
whether they could remain in office 
that long. 


Yesterday we saw a different 
chancellor. Back in humanoid form 
Mr Clarke droned for Britain, solid, 
dependable, wise, Captain Kirk. He 
had nothing to say, but he said it 
well. His perception, that the gov- 
ernment is in a hole, is matched by 
his strategy, which is that the only 
route to salvation is a period of 
good, solid, uneventful administra- 
tion. So he began his speech by 
describing the Conservative Wirt- 


Familiar it may be, but it still 
sounds miraculous. The economy is 
growing at 4 per cent a year, fastest 
in Europe. Registered unemploy- 
ment is falling; the number of peo- 
ple in jobs is rising. Exports are up; 
balance of payments trends are pos- 
itive; inflation is lower than it has 


been within the living memory of 
two-thirds of the population. Stick 
with the government for just a few 
more years and the budget wifi be 
back to balance, the huge borrow- 
ing requirement wiped out 

In the real world any chancellor 
describing such a golden set of 
numbers would simper as he did it 
The benches behind him would 
cheer, wave their order papers, or at 
least rumble “hear hears". Even 
yesterday afternoon, the House of 
Commons could not be described as 
the real world. 

Mr Clarke exchanged defensive 
and unscripted banter with the 
benches opposite, while behind him 
his colleagues sat stony-faced. As 
time went by, some of them feD into 
the arms of Morpheus. They should 


have sat up and paid attention. The 
other side did. Both the Labour and 
liberal benches were bemused, as 
they saw one stratagem of theirs 
after another emerge from the chan- 
cellor’s box, now to be used as a 
shield to protect the government 
and the prime minister from the 
knives aimed at their backs. It is an 
Intricate device. Some of its compo- 
nents have been borrowed from the 
opposition. 

What Mr Clarke called a "set of 
effective policies to tackle the big 
problem of structural unemploy- 
ment which feces the whole west- 
ern world” sounded not unlike the 
welfare- to- work proposals borrowed 
by Labour's advisers from President 
Bill Clinton’s coterie. The details 
may not Tnpfr.h, but the broad meth- 


odology is similar; adjust social 
security where it acts as a disincen- 
tive to take a job and subsidise 
employment where that might help. 

Another notion - for a landfill tax 
- elicited smiles of rerognition from 
the Liberals. The patent for Mr 
Clarke’s schemes to attract private- 
sector capital to support of public 
ventures was claimed, vociferously, 
by Mr John Prescott Yesterday’s 
closure of "tax loopholes” was 
recognisably lifted from Labour. 
None of this is quite fair, the gov- 
ernment, through the chancellor, 
has put to a lot of work in these 
areas. 

Even so, Mr Clarke is a star, and 
not only by the tfismai standards of 
those around him. His speech yes- 
terday was dull and long, yet as 


during Monday afternoon’s scrap, 
his delivery showed that he Is 
afraid of no one, that his self-confi- 
dence knows no bounds. 

The chancellor's career has not 
been without blemish. Those of us 
who would not hesitate to castigate 
~hHrt had he suffered had hick must 
give him credit for his handling of 
the blessings of fete. 

He has stuck to the prime minis- 
ter’s counter-inflation policy, rein- 
forcing it by allying fomaaif with 
the Bank of England. He has 
resisted calls to reduce taxes as if 
there was to be an election tomor- 
row, knowing well enough that this 
is a mid-term, not end-of-tem, 
financial statement At a time when 
the government seems to wake up 
every morning not knowing 
whether it will live exit the day, he 
haa persisted in playing it 
long. 


JoeRogaly 







sasii.. 


jHWNCIAi'nMES 


WEDNESDAY 


MOVEMBER30 


NEWS: UK 


Top fair trading regulator to quit 

** win ho tn ha vp convergence on policy. Sir Bryan appears 


By John Ridding in Paris 

Sir Bryan Carsberg, the UIvs 
senior competition regulator, is 
to step down as director' 
general of fair trading nest 
May, three years into his five- 
year term. 

Sir Bryan is quitting the 
Office of Fair Trading to 
become secretary-general of 
the International Accounting 
Standards Committee - the 
international flnanirfal report- 
ing organisation. 

Interviewed in Paris yester- 
day, he appeared relaxed about 
his decision. “There is less to it 
than meets the eye” he said. 
“It is not because of problems 
in my present job. I haven't 
had a row with ministers or 
an ything lifcp that The move is 
entirely because I was offered 


1 ^ S Sj^dBwWramaled School and Umbon School of 
Ecopcndcs 

I960 QuaBfifld as chartered account*! 

10W Rammed to LSE as accountancy 
economics lecturer ten Byatt, now ^ reg ‘ JaK * 
1068 VisMng tedurar. IWvwsity of 
18W Ptolessor of accounting. 

1074 Vising professor, thwwsdy of CaKtornbai 
imte&tx* carector, US Finandd ! ^? ard8 

BoeKt 1881 Amteree n professor 

1084 Director-general Office of T^cofnmuticatwns: txtr&& with Bmfch 
TWeutmiui un icaflons about pricing pc fcy ,,_*.-** 

to MonopoBas and ttergas Commteatan far wreshgabon 


9 r** 

r ? 

L 


a job which I want to do." 
pairing at a meeting on inter- 
national competition policy, 
Sir Bryan described his move 
as a natural progression. 

a. nn/imintinP 


only in March last year that he 
left the British Accounting 
Standards Board. 

For Sir Bryan, his next step 
is consistent with his present 


aSaSS BSSSssS 

ofmy career," be said. It was accepted, the more desirable it 


will be to have convergence on 
competition policy." he said 
“For global competition policy 
we need common accounting 
standards. I will be working 
with national accounting bod- 
ies and industry to see how to 
harmonise international prac- 
tices." 

For the next six months, 
however, it will he business as 
usual. At the top of the in-tray 
is the sensitive dossier of the 
rival bids from British Aero- 
space and GEC for control of 
VSEL, the warship builder. Sir 
Bryan is studying the competi- 
tion implications of the two 
bids, but will not be drawn on 
the timing of a possible deci- 
sion on whether to refer the 
proposals to the government 

With respect to the broad 
framework of UK competition 


policy. Sir Bryan appears to be 
satisfied. "1 don't think the sys- 
tem works at all badly.” he 
said. 

Setbacks - such as the deci- 
sion by the Monopolies and : 
Mergers Commission not to 
pursue his reference on alleged 
over-pricing of compact discs - 
were dismissed. 

He defended the establish- 
ment of regulatory bodies to 
monitor competition in newly 
privatised utilities. “I am a 
strong believer in specialist 
bodies which are necessary to 
manage the transition to com- 
petition," he said. But further 
steps were needed in UK com- 
petition policy, he added, 
including changes to the 
restrictive trade practices law. 

Editorial comment. Page 13 


Tories 
who d< 




iUi 


C UW iWJ 

State power group loses hope of being sold 

* . .. . u.. frw minis- her 30. Nuclear Electric made an ope rat- the company was showing underiy^ 


By Michael Smith hi London 

Executives at Nuclear Electric, the 
state-owned power utility, are close to 
abandoning hope that the company can 
be privatised before the next election. 

In spite of confident statements at the 
company's interim results presentation 
yesterday, executives concede privately 
that the chances of a sell-off being 
agreed as part of the government's 
nuclear review are small and declining. 

“Unless there is a significant change 
in government thinking in the next few 


weeks, there will not be time for minis- 
ters to steer through privatisation in 
Hits parliam ent." said one executive. 

However, the company, which owns 
most of the UK’s nuclear power sta- 
tions. still hopes that the government 
will accede to its request for a restruct- 
uring of the business, perhaps with 
Magnox stations being hived off into a 
separate company. 

That would increase the chances ot 
privatisation later in the decade. The 
review is expected to leave this possibil- 
ity open. In the six months to Septem- 


ber 30, Nuclear Electric made an operat- 
ing loss of £126m (8206.7m) (£118m in 
the first half of 1993-94) before adding in 
the nuclear levy on consumers. Includ- 
ing the levy, operating profits rose £2m 
to £499m. 

Part of the reason for the flat perfor- 
mance was the effect of a cap on prices 
in the electricity pool which Nuclear 
Electric estimates will reduce profits by 
about £100m this year, most of it in the 
first half. The cap was also responsible 
for an 11 per cent decline in turnover to 
£779m. Mr John Collier, chairman, said 


the company was showing its underly- 
ing strength by maintaining its forecast 
of being profitable before the levy next 
year in spite of the effects of the pool 
cap. 

He said the company had reduced 
uni t costs by 8 per cent to 3p during the 
half year and had achieved record pro- 
ductivity. up 20 per cent, as well as 
becoming the second-largest generator 
for the first time in any half year by 
capturing 25.2 per cent of the market, 
up from 23.3 per cent in the first six 
months of 1993-4. 



A new world of hotels for the 
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business worldwide, we couldn't agree more. 


The conse- 
quences of 
Monday night's 
mini-rebellion 
among Tory 
backbenchers 
T ’ T 'O over Britain's . 
contribution to the EU budget 
are likely to ramble on for 
months, Kevin Brown and 
David Owen write. 

Most of the IS Enrosceptics 
who signed, a motion opposing 
the European Communities 
Finance bill fell into line in the 
fan* of Mr John Major’s deter- 
mination to call a general elec- 
tion if the bill woe defeated. 

But Mr Richard Ryder, -the 
I government chief whip, imme- 
diately wrote to the eight MBs 
who abstained d nrfn g the cru- 
cial vote and withdrew the 
Conservative whip from them. 
That in effect suspends them 
from the Conservative party in 
parliament- 

withdrawal of the whip is a 
serious punishment which 
hang MPs from sitting on back- 
bench. Tory committees and 
from voting on party issues 
such as the election of a new 
leader. 

Tory MPs said it was the 
first masa withdrawal of the 
whip since the second world 
war. The coz&eqnences could 
be serious for the gove rnmen t, 
winch theoretically sees its 



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* TQM 
:«art*a 

Tnaj twiiy cut from 14 to zero. In 
practice, Mr Major can rely an 
the su pport af the rebels an 
most issues, and on the 10 
Ulster Unionist MPs, all^ 
whom voted with the govern- 
ment in both divisions last 
night However, the technical 
kxss of s u pport wifi, ma te the 
management of the govern- 
malt’s pgrfia»i«ia>tflry business 
more diffinhit. 

Last wight the lobbies of the 
Gammons were echoing with 
the sound af less, courageous 
Enrosceptics explaining away 


UK NEWS DIGEST .; 


that unwDHngbe»tojotoflte 

rebellion. The repentant rebels . 
an had cogent, reason s for 
backing down: sonrefearen 
deselection; othare accepted - 
the government's promfees flat . 
EU fraud; maw. wto kee«g8, 
their powder dry for t be-rw t 

inter-governmental confere nce* 

. Sir George Gardiner, 

Reigate and an influential 
right-wing organiser,- saMbW: 


have do pride: in my 
. meat or even, jot jnyijel 
doing.” 


Charter airline 
folds in wake 6 



Ambassador Airways, a charter anfine based. Londons 
Gatwick airport, went into Hqntd atin n yesterday because its 
parent company, Best Travel, could no longer give it financ i al 
support. A lrto ars, the UK's second-largest travel group, is 
believed to have had talks with Best TraveLthe seventWarg- 
est tour operator, about taking it over. Airtonraliad .no com- 
ment yesterday. 

The airline's four Boeing 757s and two 7S3S were -grounded 
yesterday, and its 350 staff are expected to Jose their jobs. 

immediately. . 

Ambassador Airways specialised in flying bdhdaymaters to 
Cyprus and Greece. Mr Nick Lyie, a partner with Touche Hass, 
the airline’s liquidator, said he believed “several hundred 
passengers" would be affected. The Gvfl Aviation AnBtority 
said yesterday that as Best Travel was full y bend ed, au pas- 
sengers who had lost money would be rehnbursed. 

Mr Lyle said all Ambassador Airways* pl anes were leased 
and Touch Boss would discuss thefr. future with, the lessors. 
Tbe airline was formed in 1392 by Mr Takis Shacafis, the 
owner of Best Travel. Best Trayel has been th e subject in 
recent weeks of press specu lation about its future.. 

Du Pont closures probed 

A report by chemicals industry consultants into the decision 
by DuPont, the world's largest nylon maker, to ctose recently 
acquired plants in north-east E nglan d, says it cannot detect 
any iTn«por*Pft change in market conditions which would 
have prompted the move. 

The report, by ribem Systems, says the recession from w inch 
the petrochemical industry is now emerging started well over 
two years ago, so nothing “new" had taken place. The 
research was commissioned by Cleveland County Council 
) yogn-ax nf the controversy over Du Pout's plans, announ ced in 
Jane, to shirt five plants and died 520 jobs. 

It wfll be submitted to the European Commission as part of 
its investigation into Du Pant's plans to drat down the Tees- 
side plants and invest in new adipic add production in Chal- 
ampS. France, in a joint venture with Ehdne Poulenc. 

Paris train breaks down again 

Eurostar, the high-speed train service which links London, 
with Paris and Brussels through the Channel tunnel, yester- 
day suffered its first breakdown since it began carrying fore- 
paying pass en g e rs. 

The morning train from London to Paris developed a techni- 
cal fault in northern France and stopped at Haute Picardie 
station. The 633 passengers were transferred to another train 
and arrived in Paris two hours late. They would receive a 
refund, French Railways said. The Eurostars began commer- 
cial services two weeks ago and, until yesterday's breakdown, 
had operated the services without incident. 


More Europe Inquiry into ferry mishap 


Swansea Cork Ferries last night started an inquiry into why 
its 8,797-tonne vessel Superferry, with 346 passengers and 
crew, was stranded on a sandbank in south Wales for more 
than four hours. A tug pulled the Greek-registered ferry from 
the sandbank in the Irish Sea a mile from Swansea harbour. 
Coastguards said there was no danger to passengers but life- 
boats and RAF helicopters were put on standby. 


OBITUARY 

Roy Wright: one of 
RTZ’s founding trio 

Mr Roy Wngbt, who with Sir funding for big resource pro- 

iecta * He also recognised 
SSL*^^*^®** Japan ’ s importance as an 
ttansformed the old Rio Tinto indnstrialisizig natinn and was 
Company into the RTZ Corpo- one of the main figures to 
ration, the world s biggest min- negotiate sales agreements 
mg Compaq, has died aged 80. with Japanese steelmflls. 

He joined Rio Tinto in 1552 Mr Wright was bom in 
as an overseas manager. Chelmsford, Essex, in 1314 and 
Impressed by the vision and died on November 23. He was 
enthusiasm of the then Mr educated at King Edward VI 
Drmcam foe reoirtly ^pointed School and then Faraday 

fi o«se College from which he 
him, Mr Wright became a lead- graduated as an electrical engl- 

neer - H 0 worked for Crompton 
divei'sificahonrfRaoT^to and Parkinson in the UK and for 
StSfS- 111 ^ ^ C<msoU ' Brush Electric in South Africa. 
a 60 1 ^.., m During the spnrmA world war' 

"”*** he served in the South African 
thinker, he was among the and Royal naviL lSrin7wrth 

availability of government mander. w 




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FINANCIAL TIMES WEDNESDAY NOVEMBER 30 1994 


MANAGEMENT 


US companies are finding that racial 
diversity among staff is a business 
imperative, writes loel K\h*™ 

Black to 

the future 


T he guest list of companies 
at the top table could have 
been culled from Fortune 
magazine's top company 
in the US. One by one they took 
turns at the podium to declare 
before the 3.500 dinner guests how 
much their company would be 
donating. The loudest cheer was 
reserved for the single biggest con- 
tribution - $188,000 {£202,500} - 
from Ford Motor. 

This was no run-of-the-mill fund- 
raising event or political gathering, 
in spite of an earlier video-taped 
greeting from Ron Brown, the US 
commerce secretary. For, like him 
almost everyone at the San Fran- 
cisco Hilton that evening in Septem- 
ber was black, and this was the 
closing banquet at the National 
Black MBA Association's 16th 
annual congress. 

That evening's donations to the 
NBMBAA’s scholarship fluid was a 
clear sign of the way US corpora- 
tions have started to embrace the 
issue of racial diversity among 
employees. 

Such moves began in earnest with 
the publication in 1987 of Workforce 
2000, a report by the Hudson Insti- 
tute. a think-tank based in Indian- 
apolis. Chief among the projections 
was that by 2000, only 15 per cent of 
people entering the workforce 
would be American-bom white 
males, compared with 47 per cent in 
1987. 

The figures took corporate Amer- 
ica by surprise, as many businesses 
realised they were ill-prepared for 
the labour market in the new mil- 
lennium. 

While labour force researchers 
say some of the Workforce 2000 
report's conclusions may have been 
exaggerated, attempts to recruit 
and promote minorities are gather- 
ing pace and growing more sophisti- 
cated. 

“There is no corporation in this 
country today that can afford not to* 
take the issue of diversity seriously. 
It is not only a moral issue or even 
a legal one. It has become a busi- 
ness imperative for the whole. of the 
US.” says Bernard Milano, partner 


in charge of recruitment and per- 
sonnel administration at KPMG 
Peat Marwick in the US. 

Milano speaks from experience. 
Two-and-a-half years ago "a very 
important client, let's just say a 
Fortune 100 company, told us they 
were not happy when we sent four 
white males to a meeting with 
senior management". He admits 
“we’d had messages in the past, but 
this one really hit us". With only 
seven black partners out of 1.500, 
KPMG has been forced to subcon- 
tract work to minority practices 
where clients have indicated a 
strong preference for dealing with a 
racially diverse team. 

The firm has now instituted a 
$4m diversity programme. A ttem pts 
to recruit suitably qualified blacks 
have met with little success, so 
KPMG's strategy is to hire people it 
can train for careers in accountancy 
and the finan cial sector generally. 
Scholarships have been extended to 
students from minority organisa- 
tions, which has encouraged tradi- 
tionally black colleges to accredit 
themselves with recognised indus- 
try bodies. 

A PhD project has been estab- 
lished by KPMG to help blacks in 
business move into academia - the 
first group of potential recruits is to 



Powerful message: Ron Brown, US secretary of commerce 


and Asian minorities. “What we are 
about is creating economic and 
intellectual wealth for the black 
community," says Antoinette Mal- 
veaux, executive director of the 
NBMBA Association. 

Apart from serving as a network- 
ing forum, its main goals ore get- 
ting African-Americans into the 
higher echelons of the US corporate 
sector and increasing the level of 
business education at all levels. 

Twenty eight per cent of NBMBA 
Association members earn between 
$50,000 and $75,000 a year, 18 per 
cent claim earnings of $75,000 to 


'What we are about is creating economic and 
intellectual wealth for the black community 1 


meet at a conference in Chicago in 
the middle of December - an initia- 
tive that KPMG believes should 
encourage black students to con- 
sider business and finance courses. 
Finally, a professional body has 
been created for African-American 
PhD students, designed to help 
them share experiences and avoid 
being isolated. 

Over the past few years profes- 
sional groups have provided one of 
the main points of contact for US 
companies. Organisations similar to 
the NBMBA Association, which has 
a membership of around 3.000. have 
also been established for Hispanics 


$99,000 a year and some 19 per cent 
earn more than $100,000 a year. 

This helps explain the presence of 
more than 150 corporate exhibitors 
at this year’s conference in San 
Francisco, among them Coca-Cola, 
American Airlines, Ford, Bank of 
America, IBM and Eastman Kodak. 

“We know that by being here we 
can pick np good qualified people 
who will suit our company and its 
aims." says Janet Maderious, vice 
president and manager at Bank of 
America, which hosted a reception 
at the start of the conference. 

"It's all about self interest", adds 
Keith Cooley, director of strategic 


pl anning and issues management at 
General Motors. "These are the type 
of top customers we must get if we 
are to succeed.” 

Over the past 15 years, companies 
have discovered that targeting prod- 
ucts and services to a particular 
racial group, using imagery and sig- 
nals commonly used by that group, 
can make a significant contribution 
to profits. 

“Wien we started marketing 
Pampers [disposable nappies) in the 
1970s, little or no attention was paid 
to inner city areas where many 
black people lived," says an execu- 
tive at Procter & Gamble. 

"The thinking was that these peo- 
ple would not be able to afford 
them. Not having blacks in the rele- 
vant departments and levels who 
knew about the lifestyle of many 
blacks meant that for a long time 
P&G missed out on big profits - few 
knew that although the product 
was expensive, many blacks had no 
washing machines at home. Thus 
they were an ideal market for such 
a product" 

Stephen Lewis, national president 
of the NBMBAA and associate 
director of new business develop- 
ment at Ford, says: "A person may 
look at a company like Ford and 
say: that company supports my 
community so I will support it with 
my dollars. Diversity is also about 
malting sure your products sell In 
all the markets.” 


Adding value to the 
UK’s tax system 

John Willman meets a civil servant who initiated 
a radical overhaul of the Inland Revenue 


a s e 


Public services 


Change manage- 
ment, partnership 
sourcing, empower- 
ment and bench- 
marking - terms in 
the argot of mod- 
ern management 
science that few 
would associate 
with Britain's civil 
service. Yet the Inland Revenue, 
one of the oldest government 
departments, is in the middle of a 
change programme to rival the 
most ambitious private-sector cor- 
porate re-engineering projects. 

It will turn upside down the 
assessment and collection of 
income tax and other direct taxes, 
totalling £77 bn in the last financial 
year, with the aim of hugely 
improving the quality of service to 
the public. 

In the 1380s, the department pul- 
led off one of the most successful 
large-scale computerisation pro- 
jects in Europe, without the dis- 
ruption to service normally associ- 
ated with such projects in both 
public and private sectors. It also 
cut staff numbers from 84,000 in 
1979 to around 63,000 today. 

Now the department is involved 
in a change programme that by the 
end of the 1990s will provide every 
taxpayer with a single tax office, a 
simple statement of tax paid each 
year, and access to high-street 
offices to sort out tax problems. 

“The aim is to create a flexible, 
efficient and responsive depart- 
ment that stands comparison with 
the best service organisations in 
the public and private sector any- 
where in the world," says Steve 
Matheson, deputy chairman of the 
Board of Inland Revenue, the de- 
partment's top management body. 

Matheson has been at the sharp 
end of the Revenue’s organisa- 
tional development since the late 
1970s when he devised a strategy 
for computerising the tax system. 
He implemented it during the 
1980s, and two years ago launched 
the current change programme. 

Until 1977, his Inland Revenue 
career followed a conventional 
civil service pattern, when he 
became a trainee tax inspector in 
1961, on graduating from Aberdeen 
University. After running a Croy- 
don tax district, he moved into pol- 



Branoan Cor 

Stove Matheson is aiming for flexibility, efficiency and responsiveness 


icy, working on the reform of cor- 
poration tax at Revenue head 
office. 

Like many promising young civil 
servants, Matheson spent two 
years in the Treasury working in 
ministerial private offices. Back at 
the department, he reviewed the 
Revenue's computerisation plans 
and managed what was then 
Europe's largest computer project. 

In 1989 he became director gen- 
eral of management effectively in 
charge of the day-to-day running of 
the department. He realised that 
improving the service to the public 
would have to be paid for from the 
existing budget 

Hence a root and branch reor- 
ganisation of the Revenue, with 
changes to the tax system to refo- 
cus the department on the tax- 
payer. Reforms such as letting tax- 
payers calculate their own tax bills 
and changes in taxation of the 
self-employed win end many cum- 
bersome procedures required to 
assess and collect tax. 

To make this possible, the Reve- 
nue has forged a unique outsourc- 
ing partnership with the private 
sector that will allow it to use the 
most up-to-date information tech- 
nology. Some 2,000 Inland Revenue 
IT staff will transfer to EDS, the 
US computer services company, 
which will take over responsibility 
for processing tax data. 

The plans are controversial 


because confidential tax data will 
be processed by a foreign com- 
pany. But Matheson believes that 
without private-sector skills and 
capital, it would have been impos- 
sible cost-effectively to make the 
changes needed to improve the ser- 
vice. "Our IT plans will empower 
the frontline staff so they ran deal 
with taxpayers’ problems on the 
spot," he says. “This requires 
chang in g from a culture that Is 
procedural and instruction-based 
to one based on leadership, delega- 
tion and empowerment" 

Despite recent criticisms of the 
use of management consultants in 
Whitehall, the Revenue has relied 
on consultants in change manage- 
ment “We couldn't have done so 
much without them," says Mathe- 
son. “They can clear blockages and 
help us to achieve what we want to 
do. You can't hand over responsi- 
bility to them, however - consul- 
tants have to be managed." 

With such a track record, it is 
hardly surprising that Matheson 
has often been headhunted by the 
consultants he uses. But although 
he sometimes gets frustrated, he 
has never been tempted to join the 
private sector. “It's the scale of the 
challenge in the civil service that 
is attractive." 

This concludes the series. Previous 
articles have appeared on October 
19. 26. November 2, 9, 16 23. 



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* FiNANOMi TIMES WEDNESDAY NOVEMBER - 30 . J 9^4 

BUSINESS AND THE ENVIRONMENT 


Green 

groups 

merge 

I nternational business is hop* 
ing to bolster its Influence 
on environmental policy* 
making with a merger between 
the two most active industrial 
lobbying groups - the Geneva- 
based Business Council for Sus- 
tainable Development (BC5D) 
and the World Industry Council 

for the Environment (Wice) in 1 

Paris, reports Frances WUHoms. ^ 
The new World Business 
Council for Sustainable Develop- 1 
merit, to be based in Geneva 
from January 1, aims to mobi- 1 
lise business behind “sustain- J 
able development” and promote 
high company standards of envi- 
ronmental management. Rodney 
Chase, a managing director of 
British Petroleum and chair- 
man- to-be of the WBCSD, says 
the new grouping will give 
industry a more effective voice 
on these issues in the future. 

• “Going green*' could create 
more than 700,000 jobs in the 
tJK over the next 10 to IS years 
rather than destroying busi- 
nesses and costing jobs as is 
generally believed, writes Debo- 
rah Hargreaves. 

According to a report pub- 
lished last week by pressure 
group Friends of the Earth, 
adoption of environmental pro- 
tection measures could save the 
government £3ba a year in 
unemployment benefit 
“One of the main reasons why 
government and industry won't 
go forward with environmental 
protection policy is because they 
believe it will cost money and 
jobs. We want to tackle those 
misconceptions and show that 
sustainable development can 
bring real economic benefits," 
says Charles Secrett, executive 
director of FoE. 

Secrett says the report’s find- 
ings were based on experience 
in other countries with a realis- 
tic, pragmatic approach. For 
example, the report suggests 
that if £500m were channelled 
into rail investment instead of 
road building, the net creation 
in jobs would range from 3 ,000 
to 8,150. This is based on 
research in Germany which 
shows that for every DMIOOm 
spent on public transport 
instead of roads lft to two times 
more jobs are created. 


B y early next century, if the 
government and a handful 
of private contractors fin- 
ish the job in time, Brazil 
will be ready to tackle its biggest 
public relations problem - a reputa- 
tion for abusing the Amazon. 

Environmentalists claim that ille- 
gal logging, delays in marking out 
Indian lands and environmentally- 
damaging mining are hkely to con- 
tinue. but the Brazilian government 
will have a tramp card to play 
a gains t any critical environmental 
lobbyists: Sivam, 

Sivam, or the System for Vigi- 
lance over the Amazon, is one of 
the most ambitious environmental 
projects in the world. Set to cost 
about $1.39bn <£840m) and take five 
years to fossil, it is a network of 
radars, satellites and ground sen- 
sors which will be linked to provide 
constant monitoring over Brazil's 
share of the Amazon basin, an area 
which accounts for nearly 60 per 
emit of the country and is about 10 
tirnas bigger than France. 

Sivam wffl, for the first time, pro- 
vide accurate and widespread infor- 
mation on the Amazon’s environ- 
ment and how it is changing. It will 
provide evidence to counteract 
what the Brazilian government con- 
siders exaggerated or misleading 
reports about sensitive subjects 
such as deforestation. It will also. 
thqnbs to improved air traffic and 
radar systems, help in the fight 
against drug smuggling and unlic- 
enced mining. 

These measures are likely to be 
welcomed by environmental groups. 
But Sivam's ultimate aim is more 
controversial. The information 
gathered by the system win form 
the basis for Brazil's development of 
the region into the next century. 

Brigadier Marcos Antonio de Oliv- 
eira, who will be appointed presi- 
dent of the commission overseeing 
Sivam. says that accurate informa- 
tion is vital if Brazil is to plan for 
the “sustained development” of an 
area as vulnerable as the Amazon. 
He adds that Brazil wants to match 
the wealth enjoyed by countries in 
the north, and it is not feasible to 
make the Amazon immune from 
development 

“The Amazon’s resources will be 
used sooner or later, whatever hap- 
pens. What we need to do is develop 
it rationally. But it must be left to 
Brazil to decide when and how to 
use these resources ” he says. 

The Sivam project, announced at 
the 1992 Rio Earth Summit, was 
designed partly to deflect criticism 
over Brazil's environmental record. 
Its supporters said better communi- 
cations could strengthen the gov- 
ernment's hand in the Amazon, 
where edicts to stop environmental 
damage were rarely carried out, 
mainly because of the region’s size 
and poor communications. Govern- 
ment. environmental and Indian 


Angus Foster reports on a project 
that provides constant monitoring 
of the world’s biggest rainforest 

Amazon’s 

saviour 


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Forest stump: Brad’s high-tech monitoring wffl assist conscientious development 


rights agencies were often blocked 
by local leaders involved in illegal 
activities. 

The tender for installing Sivam 
was won in July by a consortium 
led by Raytheon, the US group. Ray- 
theon will start work on a project 
plan with its main Brazilian part- 
ner, computer and control company 
ESC A, once the contract is signed 
with the Brazilian government. 
Antonio de Almeida Fflho, an ESCA 


director, said he hoped the contract 
would be signed this year, once fin- 
ancing is approved by the Senate. 

Sivam’s main weapon will be at 
least 300 monitoring stations - de 
Oliveira says the number could dou- 
ble - which will monitor up to 17 
characteristics such as air and 
water quality or humidity. The sta- 
tions will transmit regular readings 
via radio or fixed telecommunica- 
tions links to three regional pro- 


cessing centres, in turn coordi- 
nated in the capital Brasilia. 

Monitoring will have several 
immediate uses. Soil traces in the 
Amazon’s river systems could be 
analysed to track down illegal min- 
ing, and to measure damag e caused 
by legal excavation. Water and air 
pollution from large towns, such as 
Manaus, will be assessed. The Ama- 
zon's weather systems, which are 
still poorly understood, will also be 
recorded in detail for the first time 
and rihnatj p change across the area 
wfil be measurable. 

A network of long-range radars 
will be installed to watch Brazil’s 
borders and to improve air traffic 
control over main air corridors. In 
other areas, especially those dose 
to drug shipme n t sites near Colom- 
bia and the Brazilian stnfp of Acre, . 
air movements will be monitored by 
airborne radar likely to be installed 
on aircraft made by Embracr, the 
Brazilian manufacturer. 

Aerial detection will also be 
important for monitoring forest 
fires. Brazil currently uses satellite 
photographs provided by its space 
research institute. However, de 
Oliveira says three spotter planes 
will photograph fires so that infor- 
mation can be gathered and 
assessed more quickly to help pro- 
vide evidence against individuals 
accused of starting them. Fires are 
often used to dear an area of forest 
for agriculture or other purposes. 
According to some specialists. 05 
per cent of the Amazon basin is cut 
down or burnt a year. 

Government critics argue that 
Sivam will make only a limited dif- 
ference because, even when the gov- 
ernment has information about the 
Amazon, it rarely acts. For example, 
wildcat miners o pera t e illegally in 
several demarcated Indian areas, 
sometimes with the apparent know- 
ledge of local authorities. 

One environmental adviser says 
Sivam will be constrained without a 
government commitment to prose- 
cute illegal activities in the Ama- 
zon. and crack down an corruption 
in local justice and police depart- 
ments. 

De Oliveira argues this is not the 
case. The problem, he says, is that 
when the government does have 
reliable information, it is not coor- 
dinated within public departments, 
a failure Sivam will resolve. 
“Sivam, by prov i ding better infor- 
mation, will strengthen the public 
institutions in the Amazon. We 
want to strengthen the communi- 
ties bring there, not just the indige- 
nous people, but the wor k ers firing 
there and the immigrants who have 
settled there." he says. 

At the same time, facts and fig- 
ures for assessing how best to 
develop the area will be stored and 
analysed. “The Amazon will have to 
be developed, but what we have to 
do is respect its fragility,’* he says. 


Between a 


Jane Mardnsoii on one quany & 
fight for planning pennission 

n the heart of Dorset in The GPRE.hoWBV®'*^ 8 ?^ 



The lizards are.iXMhgenoas to an 
area extensavdy quarried by ARC; 
the Hass on snbsiffliiy and one oif 


fa Britain. ARC, akmg with a local 
c onservat ion group, daim the 
lizards are content to five in areas 
Of excavated sand created by „ 
large-scale extraction. 

The Council for the Protection 
of Rural England, however picked 
the ARC sites at Hyde Heath asd 
Portland as two c£ five quarries 

which fflustrated fee danger to 
tiie environment caused by 


<m 


■ .uni Mflfewiy CPRffs minerals 
campaigne^rCalls the proposals a 
‘yppjpa for meddle". “There are- - 


ora 1 what constitutes a sensory 

coaditfon and what shoidd be 

compensated." The aggregates 
industry enjoys better amfetrons 
over envinmmental regulation _. 


The government proposals are 


which claim they makB a 

T MHip q nffp of cost predictions at the 

start of construction. Thei British 


envir onmental ipg iwintittn pawaa 
in the 1980s. 

ARCs reaetkm to its inclusion - 
on the blacklist was both speedy 
and furious. The company's good . 
relations with the local wQdiife 
trust- ARC dabns it has handed . 
twofeirds ofJHyde Heafh, 
designated a site of special , 
scientific interest, over to the : 
trust -and its general restoration 
of quarried land were featured in 

the local media and trade press. 

But ARC’S resp uu se was based 
cm largo- national issues fean the 
plight of reptiles. CFRJS’s chief 
d emand, ge t out in its response to 
g government n wx-nifaHnn pnp«r 
on old planning permissions ... 
earlier tins year, is that such 
permissions should be updated to 

cnmjAy wfh mode rn standar d! 

Where a company foils to update 
the planning pexutissums 
should be revoked. Hie companies 
should pay for the updating or 
suffer the closure of the sites . 
without compensation. 

The issue of compensation is set 
to prove the most contentious 
before the paper is made tew. The 

^ nt w nm iwit Ic pM pnshy flwt 

compensation be paid where 
changes to comply with new 

planning rg gnlafora s affert assqt . 
valnes by restricting the scope for 
excavation. S says that there will 
be no compensation in some cases, 
where ohangpg are made to meet 
modem regulations. R saj® this 
would apply to "sensory" • 
conditions, such as noise levels at 
an wnwaHnn ntp, where the 
change does not affect earnings. •' 


says the cost of complying with 

the 1990 Enrironmenf^Protectian 
Act alone will be £UXka and that 
this can hanfiy be seen as special 
treatment. “How,"tt daks; "would - 
bousehoIdsrejfeeliftiB^r* 

planning - rjghtn smri ttmK their, 
bouses ware tatam^cway wttiuxtt 
compraiffirtfoar " tr - VpT-* 
At the heart at the issue Ses .ttijr 


from 2^to tonnes tn 1991 to 
between 830m and 36Sm. by 2806. 

R avi ra nm epteKri a s udh as the ; 
CPRE and Friends of the Earth ' 
argue thatfee government's : 
road-buildijig programine - which 


amount of that totaL They believe 
that more material could also be 
providedhyrecycfiug. - 
ARC seems to fiave won fee war 
locally - the Dorset CPRE 
mmp ftf gnor hsfy iq tptamhrf tha 


“the lizards are happy* according 
to the local pa per - bmt its sites 
are still man encviztannentel 

blacklist . .. . 

John ttofener, ARD group 


moves by groups sucfcssCFHE 
have a “dripping: tap effect" on 
go ver nme nt pottty and public 
opinion, howerorJIJie > 
govfflnmeut pqpffl rifl^yfe 
become-fewfo thenexf > 
par Bameate r yseaekm - win ■■■-' 
reveal how strong the drip is. 



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Conron puts wings on his heels 


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OR FAX RESPONSE TCh+44 71 242 2439 


John Conron. newly appointed 
director of p lanning and finan- 
cial controls at Merrary com- 
munications, clearly believes 
in his company’s products. 
Yesterday he was closeted for 
several hours in a videoconfer- 
ence with colleagues across the 
Atlantic as he put the finishing 
touches to measures to cut 
costs and Improve performance 
at British Telecommunica- 
tion’s largest competitor. 

Conran’s appointment is part 
of a shake-up at Mercury 
designed to cut up to 2,000 jobs 
in a bid to boost competitive' 
ness. Conron, 44, essentially 
replaces Jeff Phillips, director 
of finance, who in Mercury’s 


words: “is now bring consid- 
ered for other opportunities 
within the Cable and Wireless 
group”. C&W owns 80 per cent 
of Mercury. 

The telecoms operator has 
been suffering declining profit- 
ability with the entry of new 
competitors in the UK market 
and no longer enjoys privileged 
duopoly status with BT. 

Conron, currently vice-presi- 
dent of finance at Cable & 
Wireless Inc, worked for C&W 
in the US for 10 years and for 
Arthur Andersen, the manage- 
ment consultants, before that 
There has been no honeymoon 
period at Mercury. He arrived 
from the US last Sunday, went 


■yT | R i'TTi rrjT y - 1 ■, rn rr, 


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Improved infrastructure 
for Aerostructures 


The six-week hunt for a new 
chief executive for the troubled 
Aerostructures Hamhie ended 
yesterday with the appoint- 
ment of Christopher West 

Southampton-based Aeros- 
tractures, which makes air- 
craft parts, last month saw its 
shares collapse to 24p after a 
second profits warning follow- 
ing production problems. Andy 
Barr, the chief executive who 
led the flotation at 120p a share 
in June, took early retirement 
citing stress-related illness. 

West 46, has been acting as 
an independent consultant 
with a special interest in aero- 


space since leaving Westland 
Helicopters in 1992 after two 
years as operations director. 
Most of his working life has 
been spent in the aerospace 
industry. From 1968 to 1990 he 
was with British Aerospace, 
former owner of Aerostruc- 
tures and still its principal cus- 
tomer. 

At one time. West was flight 
test engineer for the Tornado. 
He eventually became manag- 
ing director of BAe’s Kingston 
and Dunsfold unit, responsible 
for marketing and developing 
the Harrier, wife a turnover of 
£400m and a staff of 5 .200. 


straight to his desk and has 
been there virtually ever since, 
working on fee details of the 
cost-cutting scheme which is 
expected to be announced ng*t 
week. He reports directly to 
Duncan Lewis whose appoint- 
ment earlier this month as 
chief executive was also part of 
fee shake-up. 

Bod AttwooH, group manag- 
ing director, has also left his 
post at Mercury and is looking 
for a new position within the 
group. AttwooII was a major 
force behind a progr amme of 
change and revitalisation at 
Mercury whose first phase 
"Ignition’’ finished in July. 
Alan Cane 


Lord King of Wartnaby, 
Aerostmcture’s chairman, says 
West, who takes up his post on 
January 2. has a wealth of 
experience, valuable "both, in 
terms of manufacturing tech- 
niques and customer relation- 
ships”. 

David Ring, who has acquit- 
ted himself well as acting chief 
executive since Barr retired, 
will revert to his role as com- 
mercial director. David Black- 
well 

ffl Vincent Nfegre, Of 

Untas France, and Terry 
Rosoi q nist, worldwide account 
director, have been app ointed 
president, and chairman and 
ceo, respectively, for UNTAS 

Europe, Middle East and 

Africa. ' 


F'-' 






promoted to chief executive; he 
succeeds Mike Warburg who is 
retiring as chief executive but 
remains deputy chairman. 
Fraser Cowie has been 
appointed sales director 
designate; he moves from DEG. 






















FINANCIAL times WEDNESDAY NOVEMBER 30 1994 


ARTS 


L ast week 86 playwrights 
wore to The Guardian 
(where else) with a letter 
they had sent to subsi- 
ded theatres in Britain 
asserting that there had been a 
drastic decrease in the production 
of new plays. This, they claim, has 
sent British theatres into a decline 
and irrelevance - their phraseology 
- which Is proved by the failure to 
attract audiences, and there must, 
therefore, be a return to new work 
if subsidies are not to be with- 
drawn. They ask each theatre to 
undertake to produce at least three 
new plays a- jear, two of which 
most be in the im»in house (rather 
than some small experimental area, 
presumably). They must be full 
scale productions of world premi- 
eres by living writers, must not 
include pantomimes or book adap- 
tations, and most run for at least 
18 performances. “It is very little 
to ask", they say. 

My first reaction was to wonder 
why the list of signatories - which 
contains such famous names as 
Arden, Pinter, and Wesker - lacks 
those of Lloyd Webber and Ayck- 
bon m. Co uld it be that the work of 
the latter pair attracts enough pay- 
ing customers to avoid the need for 


Television/Christopher Dunkley 

In pursuit of plays for tomorrow 


snbridies? If so, what does that tell 
us about the others? 

Next I wondered whether it had 
Gocurred to the playwrights that, 
until about 40 years ago, people 
had had to go out for their drama 
but that now virtually everyone 
has the means of watching drama 
in their own home every day. Can 
the writers not see that, in the age 
of television, to dema nd your 
work be done in the theatre is 
rather like demanding that, in the 
age of the car, we go back to the 
horse and cart: more traditional 
and charming, and possibly more 
enjoyable for those with the time 
and patience, bat impractical 
too expensive for most It would 
sorely have made better sense if 
the playwrights had written the fol- 
lowing letter to Alan Yenfcob, Mich- 
ael Jackson, Marcus Plantin, Mich- 
ael Grade, and David El stein, 
responsible respectively for the 
programming on BBC1, BBC2, ITV, 


Channel 4, and Sky. 

“There has been a drastic 
decrease in the number of new 
plays being produced by British 
television mid also in the propor- 
tion of your budgets spent on new 
plays. We believe this shows an 
unacceptable set of priorities. The 
loss of vitality caused by the aban- 
donment of new work and the 
increasing reliance upon stereo- 
typed 60-minute drama series about 
the police, firemen, criminals and 
so on, threatens to reduce British 
television, which had become one 
of the most important chann el a for 
the introduction and consideration 
of new ideas, to the level of a mun- 
dane medium of undemanding 
entertainment 

“It was not ever thus. In the 
1860s and 70s your predecessors 
nurtured our predecessors, in some 
cases the very people whose signa- 
tures appear below, for example 
David Edgar, David Hare, Mike 


Leigh, John MacGrath, Alan Plater 
and David Rudkin. Their names 
may be widely known now, but 
that was not so when they began 
working for television. Twenty five 
years ago there woe entire depart- 
ments at the BBC and in ITV 
devoted to finding and bringing on 
new talent. The result was what is 
now seen by many as a golden age 
of television drama. In 1368 one 
umbrella title alone - the BBC’s 
Play For Today - commissioned 
work from scores of writers includ- 
ing Dennis Potter, David Mercer, 
Simon Gray, Fay Weldon. Michael 
Frayn, John Mortimer, William 
Trevor, Peter Nichols, and Alun 
Owen, 

“Today the drama output of Brit- 
ish television must be two or three 
times greater than in 1968 and yet 
you have virtually turned your 
backs oo the sort of work done by 
the writere listed above. This is 
precisely the sort of work which we 


believe we should be doing and you 
should be making available to the 
public in addition to what televi- 
sion Is already providing. We have 
nothing against Martin Cfaaxleunt: 
Tom Wilkinson Is giving the perfor- 
mance of his life as Pecksniff, and 
when you notice that it is not only 
the roads which have been covered 


classic adaptations. The fact 
remains that Martin dnizzleurit was 
written 150 years ago. 

“We do not pretend that all your 
drama is that old. BBC^s Saturday 
night Terfornutnce’ slot has just 
given us a new production of 13. 
Priestley’s Summer Day's Dream 
which was much concerned with 
the interplay of ideas - soriaite m, 
mysticism, capitalism - and was 
written in 1949. A week earlier ft 
was a new production of Paddy 


Cbayefsky’s 1954 American TV 
play Mother, and three weeks ago 
in the same dot, Rattigan’s The 
Deep Blue Sea written in 1952. As 
playwrights we are of course glad 
to see that the work of some of our 
predecessors is not forgotten, yet 
we find it odd that yon should 


“True, your potboilers - Peak 
Practice, Soldier Soldier, Between 
The Lines - are mostly contempo- 
rary, yet even in the best of then - 
Cracker and Finney - tile greater 
degree of ambition is concerned 
more with creating a slicker prod- 
uct than with moving beyond the 
business of entertainment. Good 
though Cracker is there is nothing 
very unusual fat 1994 about shrewd 
psychological insights into the 
mind of the criminal; it fo** been 
standard fare in modern literatur e 
and Hollywood for decades. Finney 


choose to revive mediocre work 
in horse dung but also the hems of such as this rather than caxnmls- 
the ladies’ dresses, you realise that son new material, 
the BBC is paying as modi atten- 
tion to detail as it ever did in its 


is well enongh acted and nicely 
photographed; the funeral in the 
opening episode must surely be 
among the Top 50 filmed funerals 
in British television drama this 
year. But since the film not of the 
1940s, urban crime feuds of fids 
sort have became another staple of 
rfnema and television drama- 

“There is more thoughtful writ- 
tog by living authors in Channel 4 
films and 10 -minute “try-out” spots 
far new directors and writers on 
BBC2 and Channel 4, but those are 

rare outcrops. As a general rule 
you now seem to ignore the sort of 
work that we offer, work of the 
kind that used to create such inter- 
est among British viewers and gave 
British television such an extraor- 
dinarily high standing In other 
countries. If yon leave the seed 
corn to rot, and never develop new 
strains, your crops win grow weak 
and ML Live theatre has done an 
amazing job in keeping contempo- 
rary drama alive at a time when 
more modern media of communica- 
tion have acquired overwhelming 
popularity, but it Is sorely time for 
television, with its enormous bud- 
gets, to resume its vital role as 
chief p atron of living drama. 1 * 

Yours etcetera. 



■iner airline 
in wake of 
'<-'nt s trouble 













Fiona Sinnott, Michael Medwin and Gary Cady In the award winning musical “Stairway to Heaven!’ 

Fringe tfaeatre/Malcohn Rutherford 


Why the simple, wise and touching works 


S ome parts of Stairway to 
Heaven! are so good that 
one Is tempted to say it is 
among the most promising, 
certainly the wittiest, new musicals 
for years. Other parts are so deriva- 
tive of, and Inferior to. Cole Porter 
that they can be dismissed as stu- 
dent pastiche. Still, it is astonishing 
start for Thomas Morgan anti Kevin 
Metchear, whose first piederit is. 

The plot is plucked from a 
well-known movie which starred 
David Niven pnd Marius Goring. In 
the last week of the second world 
war a British airman bales out over 
the Channel without a parachute, 
having previously made radio con- 
tact with an American girl at the 
base. 

He should have cQed. Perhaps he 
did. The divine authorities had their 
eye off the ball and did not record 
the event. Thus he is stuck in 
limbo, torn between going to 
heaven or returning to earth with 
the girl. 

All sorts of jokes - legal ecclesi- 
astical philosophical, AngtoAmen- 
can - arise as the airman puts his 


case for going back to ground. 
There is a lot of Kafka in his trial. 

Morgan and Metchear have sup- 
plied the songs. If you Kke clever 
rhymes, here they coma- manage h 
qiiaire with Cleopatra, haikus with 
IQs, for examples. Best of all and 
entirely in context, is “running my 
department” with “what Descartes 
meant”. 

Conductor 7i, the role played in 
the movie by Marias Goring, here 
goes to Martin Connor who has a 
splendid French accent and terrific 
zest: a touch of Maurice Chevalier. 

The piece won this year’s Vivien 
Ellis prize for new musicals. At the 
King’s Head Dan Crawford directs. 1 
have noticed before that he has a 
fondness for the period: for instance 
in putting on Sir Terence Battigan's 
Flare Path . He also has a talent for 
putting a large cast on a small 
stage. 

Whether Stairway Is transferable 
depends on finding a bigger theatre 
where the words, especially of the 
songs, would all come through. It is 
worth a try. Meanwhile the King’s 
Head beckons. 


B esht Tellers is an itinerant 
Jewish company which 
made a marvellous London 
debut with Telling Tales in 
1991. It was an anecdotal episodic 
piece that combined pathos mid wit 
and appeared to go down well in 
any language and any tradition. 
Before London there was a hugely 
successful tour of the former Soviet 
Union, playing in Russian. 

Since then the company has 
moved an, not automatically for the 
better. Far Above Rubies is so eth- 
nocentric that one hesitates to rec- 
ommend it to anyone without a 
knowledge of rabbinical law. 

This is the story of Bruriah, who 
was both the daughter and the wife 
of a rabbi Male supremacy was the 
order of the day, whether in the 
bedroom or in the study. The rabbis 
made up the law as they went 
along. Bruriah stood up to them, 
putting new interpretations on the 
Old Testament. In so doing she may 
have been one of the world’s first 
feminists: clearly the piece struck a 
chord with the audience at the Tri- 
cycle. 


The trouble is that Rubies is not 
much of a play. It is performed in a 
statuesque Greco-Roman-Egyp tian 
style where actions seem scarcely to 
matter. 

One hopes that this is an aberra- 
tion, not a deliberate retreat into 
introversion, especially since tije 
original talents in Besht Tellers are 
still there. Rabies is written by 
Bobbie Gringras who helped devise, 
and performed in. Telling Tales. 
Danny Scheinmann. the co-star in 
Telling Tales, appears again now. 
Rebecca Wolmann, a co-founder of 
the company, continues to direct 
and does so with great confidence: 
perhaps too much. 

Rubies was commissioned and 
funded by the British Arts Council 
In a slightly disconcerting pro- 
gramme note Ms Wolmann writes: 
"Had Hinds been available, I would 
have cast 50 women watching 
silently from the back of the stage”. 
Such ambitions can be dangerous. 
Telling Tales worked because U was 
simple, wise and touching: Rubies is 
none of those. 


Ballet/Clement Crisp 

'Don Quixote' in Stockholm 


T he Royal Swedish Ballet 
has just acquired Nurey- 
ev’s staging of Dor Quix- 
ote, and is dancing it splen- 
didly. The company is not as well 
known here as it should be. Toms 
tote ft round the world, but not to 
London. It boasts more than 200 
years of tradition, and a fine school 
And rtw virtues of rtiia schooling 
provide a buoyant strength for the 
new Don Quixote. There was a 
verve and enthusiasm, to the perfor- 
mance I saw at the weekend which 
made the old ballet sparkle. 

The production was the more 
delightful by contrast with our own 
Royal Ballet’s exercise in corpse- 
washing which was passed off 
under the same title. The Nureyev 
text is crammed with dances which 
insist upon a happy bravura. The 
story is cleverly told. John Lanch- 
bery’s edition of the scare is jolly, 
and was driven spankingty along by 
the Russian conductor Renat Sala- 
vatov. Nadine Baylis's designs are 
fetchingly Hispanic. The production 
encourages its cast to fling any ves- 
tige of Nordic caution to the winds, 
and this the Swedes joyously do. 

Nureyev re-jigged the old ballet 
and inserted dances, yet never lost 


sight of the fact that though the 
piece is a theatrical war-horse, it is 
no spavined Rostoante, and can still 
gallop. So the first act bursts with 
toreadors, street-dancers, riaarfnal 
variations, knives, pas de deux, and 
every kind pimento-flavoured merri- 
ment The second act offers gypsies, 
puppets, a classical dryad scene - 
and a very good one, too - and a 
windmill The last act zips along. It 
is the most enjoyable of farragos. 

The Swedish dancers cope 
delightfully with all this, demon- 
strating a nice mixture of jokmess 
anrf academic good manners. Only 
the Kirov and Bolshoi know how 
much too far you can push the clas- 
sic dance in being wildly Spanish. 
But the Swedes know how to flash 
and dash , and their “school” means 
that movement is clear, generous. 
The ranks of soloists and corps de 
ballet are secure - variations were 
very well done, notably by Eugenia 
Zetterstrom as the Dryad Queen - 
and Madeleine Onne was a bright, 
endearing KitrL She set out the cho- 
reography with a beguiling vivacity, 
and she pouts and flirts delight- 
fully, striking sparks off 
and dances with prettiest ease. 

Her Basiho was Jan-Erik Wiks- 


trflm, who is astonishing. A danew 
in his early twenties, Wlkstr&n, has 
a physique rather like Nureyev’s, 
and he takes to all the devilish com- 
plications that Nureyev stuffed into 
the role as if specially made for 
Mm. There results a reading that 
Nureyev might have envied. Wiks- 
trdm lias a beautifully smooth tech- 
nique. Nothing is forced, everything 
is fully stated, and steps, poses, 
melt into the ground or into the 
next phrase. He offers a physical 
cantilena as serene as that in Jussi 
Bjorling’s singing. There is a bloom 
to what WikstrSm does, and a mas- 
culine grace devoid of mannerism. I 
thought at first he might prove too 
“quiet” as an interpreter for a role 
that is about showing-off; but when 
the dance seizes him, he is a mar 
vhI not least because of the ele- 
gance of his means. His reading has 
charm, and moments, as with 
Nureyev, when classicism is auda- 
cious, proud. WikstrOm’s is a rare 
and beautiful talent 
1 have reported before on the 
Royal Swedish Ballet, with plea- 
sure. This staging shows Its artists 
at their admirable bast We really 
must see the company in London 
soon. 


A t the weekend we had the 
26 -year-old Mozart's Ido- 
meneo conducted by Colin 
Davis, now almost venera- 
ble, with the London Symphony, 
and then Mozart’s lest work and 
Franz Schmidt’s last symphony 
conducted by young Franz Wdser- 
Mdst with the London Philhar- 
monic. It was curious to think (hat 
WelserJHflst is only a year younger 
than Mozart was when he wrote his 
Requiem - whereas “old" Schmidt 
was -considerably younger than 
Davis is now. 

First mention must go to W-M*s 
Schmidt; for the Fourth Symphony 
is a compact, strangely moving 
masterpiece, tat neither it nor the 
oeuvre that it crowned is familiar 
to any I ^nHnp audience. On Sun- 
day most of the well-fined house 
would have come for the Requiem, 
and found themselves unexpectedly 
gripped by the unknown Schmidt 
He was a deeply conservative 
Viennese composer (1874-1939, of 
mostly Hungarian forbears). Like 
Mahler - who demanded that 
Schmidt should play the cello solos 
whenever he conducted the Vienna 
Opera - be found his time for com- 
posing sharply constricted by his 
professional commitments. Except 
tn Austria, he was forgotten after 
the second world war; the music of 
Schoenberg and his disciples was 
what excited younger musicians. 


Concerts 

Mozart and 
Schmidt 

For this breakthrough alone, 
W-M deserves kudos. His reading of 
thq Fourth was Insistently speedy, 
of course, and tigfatfipped - never 
quite relaxed or spadons enongh to 
let his players expand with the 
music (though it was good to hear 
the Scherzo taken at a bristling 
Molto vivace at last, unlike any 
recorded performance I know). But 
it was intelligent, cogent, even soig- 
nSe; Schmidt’s grave tenderness 
made itself felt no less than Ms 
ingenious, old-fashioned formality. 
In these post-modern days, the time 
is ripe for discovering his radiant 
Third Symphony too, and some 
luminous chamber nmgin- 

Tbe time that W-M took for Moz- 
art’s Requiem broke all records. 
Instead of the elevated, slightly dis- 
embodied music we usually hear, 
this Requiem was pressingly dra- 
matic and spfltey: the “Dies irae" 
became a furious virtuoso exercise. 
The soloists and tbe London Phil- 
harmonic Choir rose bravely to 
W-M’s frenetic demands. Mozart 
cannot, surely, have meant quite 
that - but we were forced to ask 


ourselves whether the orthodox 
serene sanctity in this work may 
not he factitious, even sentimental 
* 

At the Barbican the night before, 
Davis conducted a noble Idomemo. 
It is a work close to his heart (he 
has recorded it twice), and here he 
had sterling soloists: above all 
Francisco Araiza’s ripely sensitive 
hero, Susanne Mentzer as his 
unlucky son (straight-backed, 
sober, affecting), and Marla Bayo’s 
verdantly pretty voice for Princess 
Hla. Nancy Gustafson, whom we 
know from gentler roles, flashed 
and snarled as Electro, and Robert 
Tear weighed in briefly but power- 
fully as the High Priest 
Davis seems untouched by the 
“early music” trend - he used a 
fairly opulent band, and let his 
singers Unger indulgently (and 
anadutmistically) over their recita- 
tives. His sympathetic grasp of the 
score, however, Is second to 
nobody’s. Simon Hattie’s memora- 
ble Smith Bank performance a few 
years bac k was meaner and leaner; 
but the gracious breadth of Davis’s 
reading told beautifully to its own 
tarns, hi Mozart it is always a spe- 
cial pleasure to hear the music sing 
with unforced naturalness, what- 
ever debate there may be about 
“period” manners. 

David Murray 





BRUSSELS 


*5 Tot (02) 511 90 84 
ghto Ruskin: British 
brings and 
t>m the Morgan 
York. Indudos 
onstable, Turner and 

19 th century artists; 
Mon) 


131717 
Bfrospeetiva 
i of art who 


jbfic 

Constable. 

aedTue.; 

5 48 11 11 
xn Cairo: 
by Ingres, 
auguin and 


OPERA/BALLET 

Champs Elysdes Tel: (1) 47 23 37 
21/47 20 08 24 

• La Dame de Piquet opera by 
Tchaikovsky. Director Valery Gergiev 
at 7.30 pm; Dec 1, 2 

• La Khovanschina: opera by 
Mussorgsky at 7.30 pm; Nov 30; 

Dec 3, 4 

• Stake: Rimsky -Korsakov opera. 
Musical director Valery Gergiev at 

7.30 pm; Dec 6. 7 


■ BERLIN 

OPERA/BALLET 

Deutsche Oper Tel: (030) 3 41 92 
49 

• The Magic Ruts: by Mozart 
Conductor Fbster/Lang-Lessing/ 
Sottesz, production by Gufiter 
K/Smer at 7 pm; Nov 30 


■ AMSTERDAM 

CONCERTS 

Hot Concertgebouw Tel: (020) 671 
8345 

• Bernard Haitink: conducts the 
Royal Concertgebouw Orchestra, 
with soprano Karen Huffetodt, 
mezzosoprano Hanna Schwarz, and 
baritone Csaba Airizer to perform 
Schoenberg and Bartdk at 8.15 pm; 
Dec 1, 2 

• Moscow PhHharrnonic Orchestra: 
conducted by Vassili Sinaiski play 
Beethoven and Mussorgsky at 8.15 
pm; Dec 6 

• Nikolaus Harnoncourt conducts 
the Royal Concertgebouw Orchestra 
to piay Schumann and Bruckner at 
8.15 pm; Dec 7 

Het Muaektheater Tat (020) 551 89 
22 

• Die Fledemaus: by Strauss. 
Conductor, Ralf Waikert, production 


by Johannes Schaaf at 8 pm; Dec 8 


■ LONDON 

CONCERTS 

Barbican Tel: (071) 636 6891 

• Gala Concert London Symphony 
Orchestra with mezzo-soprano 
Marilyn Home and conducted by 
Marvin Hamlisch. Includes 
Hamlisch’s, The Anatomy of Peace 1 
at 7.30 pm; Dec 1 

• Grand Operatic Evening: National 
Symphony Orchestra with soprano 
Susan McCulloch under the 
direction of Martin Merry perform a 
variety of operatic pieces at 7.30 
pm; Dec 3 

Festival HaH Tel: (071) 928 8800 

• Phifttarmonfa Orchestra: witfi 
conductor Charles Dutott and pianist 
Peter JaUonsId play Tchaikovsky 
(piano concerto No. 2) and 
Shostakovich (symphony No.g) at 

7.30 pm; Dec 6 

Queen Elizabeth HaH Tel: (071) 928 
8800 

• The Fall of Icarus: Multi-media 
event inspired by Bruegel's, 
'Landscape with Fall of Icarus'. 
Belgian director FnfidSric Flamand 
collaborates with Italian artist 
Fabrizk) Pfsssi and composer 
Michael Nyman at 7.45 pm; Dec 2, 3 
GALLERIES 

Barbican Tel: (071) 638 8891 

• A Bitter Truth: a multi-media 
exploration of changes in attitudes 
towards World War 1 throughout its 
duration; to Dec 11 

Royal Academy Tel: (071) 439 7438 

• The Glory of Venice: a major 
survey of Venetian art in the 18th 
century; to Dec 14 

Tate Tel: (071) 887 8000 

• James McNetD Whistler major 
survey of the Victorian painter 


and designer; to Jan 8 

• Turner Prize 1994: works by the 
shortlisted artists; to Dec 4 
OPERA/BALLET 

English National Opera Tet (071) 
632 8300 

• Ariadne on Naxos: by Strauss. A 
Graham Vick production at 7.30 pm; 
Dec 1 

• Khovanahchina: new production 
of Mussorgsky's opera. Director 
Francesca Zambdlo 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; 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 ChloA by 
Ravel at 7.30 pm; Nov 30 

• La Travfcsrta: by Verdi. A new 
production by Richard Eyre. Georg 
Solti conducts for the first five 
performances, then Philiipe Auguin. 

In Kalian with English sureties at 

7.30 pm; Dec 2, 5 

• 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, 7 

• The Sleeping Beauty: a new 
production of Tchaikovsky's ballet 
Produced by Anthony Dowell, set 
designed by Maria Bjomeon at ?J30 
pm; Dec 3 (2 pm) 

THEATRE 

Barbican Tel: (071) 638 8891 


• New England: Wo rid premiere of 
rechard Nelson's new play. No 
performance 12-1 5th Dec., 
otherwise at 7.15 pm; to Dec 29 
(Not Sun) 

Gielgud Tel (071 ) 494 5065 

• Hamlet by Shakespeare. 

Directed by Peter Hall, designed by 
Lucy Hall. With Stephan Dfflane, 
Michael Pennington, Donald Sinden 
and Gina Bellman at 7.15 pm; to 
Feb 4 (Not Sun) 

National, Lyttelton Tel: (07 1) 928 
2252 

• Out of a House Walked a Man: 
by DanHI Kharms. A Royal National 
Theatre and Theatre de Compflcrte 
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 


■ NEW YORK 

GALLERIES 

Metropolitan 

• Origins of Impressionism: 175 
partings by Parisian artists of the 
1860’s; to Jan 8 (Not Mon) 
OPERA/BALLET 
Metropofitan Tel: (212) 382 6000 

m .Don Giovanni: by Mozart, sung In 
Italian at 8 pm; Dec 2, 8 

• Lady Macbeth of Mtsenslc by 
Shostakovich at 8 pm; Nov 30; Dec 
3.7 

• Madama Butterfly; by Puccini at 
8 pm; Dec 1, 5 

• Rigotetto: Italian opera by Verefi 
at 8 pm; Dec 3 

New York State Theater Teh £12) 
870 5570 

• The Nutcracker by Tchaflcovsky, 
performed by the NY City BaHet 
Tue-Thu 6pm. Fri 8 pm. Wng for 
other times and matinees; from Nov 
30 to Dec 31 (Not Mon) 


THEATRE 

Broadhurst Theatre Tel: (212) 239 
6200 

• Kiss of the Spiderwoman: based 
on the Manuel PuJg novel Directed 
by Harold Prince with Vanessa 
Wlffiams playing the title role at 8 
pm; (Not Sun) 

Promenade Theatre Teh (212) 239 
8200 

• Three Tall Women: Edward 
Albee’s Pulitzer Pitre winning drama 
about a 92 yaar-tM widow 
contemplating her life. Sun. 3pm, 
otherwise at 8 pm; (Not Mon) 

Walter Kerr Tel: (212)239 6200 

• Angels in America: Tony 
Kushner's Tony-award winning play. 
Sun mat at 3pm. Wed., Thurs., Sat 
at 8 pm; to Dec 4 


■ WASHINGTON 

CONCERTS 

Kennedy Centre Tel: (202) 467 
4600 

• National Symphony Orchestra: 
conducted by Bp Oue play Mahler 
and Tchaikovsky at 8.30 pm; Dec 1, 
2 (1.30 pm) , 3, 6 (7 pm) 
GALLERIES 

National Gafiery Teh (20$ 737 4215 

• Roy Lichtenstein: A survey 
spanning four decades of the 
American Pop artist; to Jan 8 
OPERA/BALLET 

Kennedy Centro Tet £02) 467 
4600 

• George Balanchine Series: final 
of a three part exploration into the 
work of the choreographer at 6.30 
pm; Dec 1 

THEATRE 

Arana Stage Kreeger Theater Tet 
(202)554 9068 

• Misalliance: by Bernard Shaw, 
directed by Kyte DonneUy; to Jan 8 


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Ian Davidson 


After their 
inevitable de- 
feat over 
the European 
Union budget. 
Eurosceptics in 
the UK Conser- 
r i? vative party 
ul have decided to 
turn their attention to the 
mega-European conference 
looming in 1996. That is the 
first good news from that quar- 
ter in many a moon. 

This is not a joke. AH can see 
that the 1996 inter-governmen- 
tal conference will be a large 
and contentious affair. Not 
everyone yet sees that the 
agenda now being piled up 
ahead of the conference is lia- 
ble to raise the stakes over the 
future of Europe far higher 
than anything conceived of in 
the parochial anxieties of the 
UK Eurosceptics. So high, that 
there are real dangers it could 
go badly wrong, with long-term 
damag ing consequences, and 
not just for Britain. 

What is needed to contain 
these dangers is an effort at a 
public debate that will mobi- 
lise some serious forward 

thinking . Until DOW, this has 

been virtually impossible in 
Britain: partly because John 
Major’s government is ham- 
strung by scandals, sleaze and 
Its own weaknesses; partly 
because it is mercilessly har- 
ried by the Eurosceptics on its 

right If the Eurosceptics now 
concentrate on 1996, perhaps 
the government wifi have the 
room to map out a coherent 
strategic position before the 
conference. The dangers ahead 
cannot be wholly exorcised by 
forethought but perhaps they 
can be contained. 

One potential danger is of 
being taken by tactical sur- 
prise. Since the pound was 
blown out of the exchange rate 
mechanism two years ago, 
John Major has taken reflige in 
a posture of denial: economic 
and monetary union will prob- 
ably never happen, he says, 
and certainly not according to 
the Maastricht timetable. 

In fact, monetary onion is 
once more not merely a possi- 
bility, but may be feasible 
within the original calendar. It 
is conceivable that an an inner 
group of countries could decide 
to go ahead with monetary 
union in 1996, in the midst of 
the inter-governmental confer- 
ence. Britain has an opt-out, 
but the government would he 
uncomfortable if it had to use 
it, knowing that it is not in the 
UK's long-term interests to be 
outside the European currency. 


UK has 
to look 
ahead 

Forward 
thinking over 
the EU could 
prevent long- 
term damage 

The more serious danger is 
that of strategic surprise. This 
would be a logical consequence 
of Euroscepticism. which pre- 
fers to reduce Britain's Euro- 
pean dilemma to an ultra-sim- 
ple antagonism of “us” against 
“them": “they” want to create 
a super-state, but “we" want to 
preserve the House of Com- 
mons - that sort of thing. 

The issues in 1996, will be 
quite different The European 
Union was originally created 
for political and strategic rea- 
sons: to stabilise the western 
half of the continent Since the 

Bringing eastern 
Europe into the 
EU will pit north 
against south, 
east against west 

tell of the Berlin Wall, these 
political and strategic raisons 
d'etre have been reasserting 
themselves as never before, not 
least over what to do about 
eastern Europe. 

In principle, the European 
Union is co mmi tted to give 
membership to up to 10 coun- 
tries from eastern and central 
Europe, just as soon as they 
can meet the political and eco- 
nomic conditions. They have 
given this commitment, 
because Germany has derided 
- and the other member states 
have accepted, with varying 
degrees of enthusiasm - that 
this is a vital political and stra- 
tegic interest of the Union. 

There is just one problem: it 
is not obvious that such a 
large-scale expansion can, in 
practice, be negotiated on any 
terms that would be acceptable 
to the existing member states. 
The admission of so many new 
states that are relatively back- 
ward economically will require 


B razil's businessmen 
are rediscovering a 
long-forgotten mood 
of optimism. Foreign 
I investment is at record levels, 
some big car manufacturers 
are increasing their output. 
| industrial recruitment is ris- 
ing. and consumer goods pro- 
ducers are expecting a bumper 
Christmas. 

Part of the cause is the sharp 
fall in monthly inflation, from 
50 per cent in June to about 3 
per cent now, brought about by 
the introduction of the new 
currency, the Real, in July. 
The election as president from 
January l of Mr Fernando Hen- 
rique Cardoso, who played a 
leading role in planning the 
new currency, ? has also pro- 
vided a lift, as he is expected to 
press on against inflation. 

But perhaps the biggest 
source of hope is the minor 
revolution that has occurred in 
the country's private sector 
over tbe past four years. Faced 
with falling import tariffs and 
the threat of foreign competi- 
tion, companies have dramatic- 
ally increased productivity. 

“It’s been a big shake-up for 
Brazil's business, but it bas 
worked," according to Mr 
Carlos Eduardo Moreira Fer- 
reira, president of the Federa- 
tion of Sao Paulo Industries. 
Sir Patrick Sheehy. chairman 
of BAT Industries and of its 
Brazilian cigarette subsidiary 
Souza Cruz, agrees. The out- 
look for Brazil was “much bet- 
ter than for many years", he 
said on a recent visit. In the 
opinion of analysts, however, 
much remains to be done 
Contrary to international 
perceptions of Brazil as a 
mainly agricultural producer, 
the country's economy has 
been dominated by industry 
since tbe 1950s. Exports of 
goods such as soya and coffee 
are dwarfed by sales of 
mechanical equipment, cars, 
chemicals and textiles. Of last 
year's total exports of $38.8bn. 
less than a quarter came from 
unprocessed goods such as iron 
ore and agricultural products. 

Brazil's steel and vehicle 
industries are among the top 
10 in the world. Brahma, its 
largest brewer, is the biggest 
in Latin America and is 
expanding into new markets 
such as Argentina. Brasmotor. 
a consumer goods conglomer- 
ate, is the world's second larg- 
est manufacturer of compres- 
sors and over the coming years 
could surpass the leader in tbe 
field. Matsushita of Japan. Bra- 
zil's two biggest food process- 
ing companies. Ceval and 
Sadia, have combined annual 
exports of over Slbn, helped by 
the country's cheap land and 
benign climate. 


radical reforms in - perhaps 
even the abandonment of - 
wristiriF redistribution policies, 
such as the farm policy or the 
regional fund, because the cost 
will be too great. Undoubtedly, 
the poorer of the existing mem- 
ber states will try to hang on 
to their budgetary benefits 
from these policies; but if they 
try too hard, they may prevent 
expansion into eastern Europe, 

The dilemma for Britain is 
that such a large expansion 
would also require a radical 
strengthening of the Union's 
central institutions, starting 
with more and easier majority 
voting. This UK government is 
opposed to such political 
moves towards a quasi-federal 
Europe. On the other hand, it 
will want to increase its over- 
all voting weight in the Coun- 
cil of Ministers at the expense 
of the small countries, which 
enjoy a large voting premium. 

Bringing in the eastern Euro- 
pean countries will be an 
immensely complex problem 
that will pit the interests of the 
north against tbe south, the 
east against the west, and the 
large against the small. It 
would be a terrible error if 
Bri tain, with its pretensions to 
strategic importance, were to 
give some petty fixation on 
majority voting a higher 
importance than the larger 
geopolitical context. 

The Eurosceptics, and even 
the government, sometimes 
give the impression they wel- 
come expansion into eastern 
Europe, in the belief that this 
would help convert the Euro- 
pean Union into what it ought 
to have been all along: a sim- 
ple free-trade area. Such a view 
is only possible for those who 
totally discount what has been 
happening in Russian and US 
foreign policy. Both are quite 
difficult to predict, because 
increasingly erratic; but 
Moscow is obviously giving a 
lower priority to cooperation 
with the west than before, and 
the US is giving a lower prior- 
ity to the Atlantic alliance. The 
implication is that it would be 
very dangerous for Europe to 
disintegrate into nothing more 
than a free-trade area. 

The Eurosceptics and the UK 
government both need to come 
to terms with the fact that the 
outside world has changed, 
and with it the argument about 
Europe. If they both spend the | 
next 12 months thinking , 
ahead, and planning a strat- 
egy, perhaps the worst will be ! 
avoided. It's not likely, of i 
course; but it must surely be ! 
our best hope. 


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FINANCIAL TIMES WEPNESPAY NOVEMBER 


301994 


Falling tariffs and productivity gains mean bright 
prospects for Brazil’s industry, says Angus Foster 

A chance to flex 
some muscle 


Brazil’s economy: looking good 


Industrial growth (%) 
B 


VaHcfe prodttcHoD (TB0| 
1600 


Not foreign fcmmthM* gfarfl ' 



1989 90 91 92 03 04 

Soura Canted Bank ot Brazfl and finance Mnfaay 



I960 90 91 92 93 94 


Despite this industrial pedi- 
gree, however. Brazilian manu- 
facturers grew lazy in the 
19S0s. They had little to fear 
from foreign competition 
because the average import 
tariff was 51 per cent More- 
over. as inflation mounted, so 
did uncertainty, and compa- 
nies responded by cutting 
investment 

But this changed in 1990, 
when then -president Fernando 
Collor announced sweeping 
free-market reforms that 
included tariff cuts and a pri- 
vatisation programme to 
reduce the state's previously 
do minan t role in the economy. 
The reforms, criticised for lead- 
ing to increased unemploy- 
ment and rising imports, were 
unfinished when Mr Collor 
resigned amid corruption alle- 
gations. Even so, their impact 
has been keenly felt 

The steel industry, hampered 
by price controls and overman- 
ning. was sold to the private 
sector and government price 
controls were lifted- The big- 
gest steelmaker, CSN, which 
made losses of $729m in 1990, 
cut its workforce by a third 
ahead of privatisation last 
year. After introducing other 
productivity gains. CSN last 
year made a profit of 570m on 
sales of SlAbn. 

Average import tariffs have 
fallen to 14 per cent as the gov- 
ernment has prised the econ- 


omy opsi to foreign competi- 
tion. The process is due to be 
taken a step further next year 
when most tariff barriers wffl 
be removed in the Mercosnl 
free trade area comprising Bra- 
zil, Argentina, Paraguay and 
Uruguay. 

Falling t a ri ff have contrib- 
uted to a 25 per cent increase 
in imparts between 1990 and 
last year. Total trade with Mer- 
cosul countries, previously 
neglected by Brazil in favour of 
the US and Europe, has 

Mercosnl may 
become a testing 
ground for a more 
ambitious export 
effort by Brazil 

increased sharply, rising by 38 
per cent last year to $8.71 hl 
T he threat of foreign competi- 
tion worked wanders for Bra- 
zilian iniTii-nf r y 
Monark, one of the world's 
biggest bicycle makers, trans- 
formed its business as import 
tariffs fell from 85 per cent to 
20 per cent It spent 535m 
modernising its factories, 
halved staff numbers fac- 
tory space and started sob-con- 
tracting to reduce costs. Simul- 
taneously, it increased 
production by 45 per cent to 
L9m units between 1990 and 


-• -1980 90 „.M 


1993 and cut the retail price of 
its standard bike from 5320 to 
$ 120 . 

“We are now making bikes 
at internationally competitive 
prices,” according to Mr Daniel 
Galindo, ~ma Hiring director. “ 

Despite these encouraging 
signs, most analysts argue that 
economic refo rm and restruct- 
uring must be taken farther if 
Brazil is to dose the perfor- 
mance gap between it and 
more successful economies: 
They say Brazilian companies 
need to improve productivity 
further. In Brazil's priv a tised 
steel industry, for example, a 
recent study by the Mcfinaey 
Global Institute, the manage-' 
meat consultancy, suggested 
productivity was less than half 
fhat of qs steelmakers, which 
themselves lag behind world 
leaders such as Japan. 

Mr Antonio Corrida do Prado, 
economist at Sao Panto's 
Dieese institute, says industry 
still bears the scars of years of 
high inflation. During .that 
period, new investment was 
directed at protecting camp* 
nies from the effects of infia- . 
tion, through itnpm vfn g stock 
control for example, rather 
than at modernising produc- 
tion. As a result, Brazil has 
been slow to computerise in 
such areas as product design, 
he points out 

Private sector analysts also 
argue that the government 


should, relinquish,. control of- 
the substantial areas of the - 
economy it stm owns/. State 
controlled companies, Which 
include the oil monopoly, 
petrobrfs, and tbe electricity 
industry, have ammal sales 
equal to more tfaanlfl p er ca nt 
of GDP, yetare widely consul- : 
ered inefficient. - ■ • j.-v-.- . 

TelebrSs, the statocontiulled 
-telecoms company, fc protected 
from competition by a state* ■ 
Imposed monopoly. But -the 
government’s cash shortage 
over the last decade left Tiete 
Dr£s wittoutftmdstoinv®tln; 
network improvements.. .As a 
result Brazil bas only seven , 

. toitrphnnA lines per 100 inhabit- : 
a n*H, mmparad to -13 inArgea/ 
tteaamlM to Germany. 

M any politicians 
oppose breaking 
Tblebri^shmhpp.' 
oly, but compa- 
nies are pushing: hard for the 
development of improved com- 
munications and either infra- 
structure, to .aid their own ■ 
expansion. Brazil’s othe r infra- ! 
structure, especially its «Iuca> 
tion systemrbas- also suffered 
from years of under- invest- . 
meat which some economists 
say fonfrg the country's growth 
potential. 

Private sector companies 
■.that survived.- tbe: high r infla- 
tion yeans are ready to expand.: 
Among the 500 biggest private 
companies average debt to 
equity ratio tell -from Sf ?er 
cent to 1979 to 40 iper cent last 
year. Bankers say companies 
can now comfortably absorb 
'more debt to finance stew 
"tov«stment' : : . .. 

Brazil Is also in a strong 
position as the only country in 
South America with a devel- 
oped industrial base. Monark, 

- for. example, as many 

bikes to a day as Argentina 
produces to a mouth. 

This industrial muscle, com- 
bined -with trade stimulants - 
such as the Mercostd free trade 
area, should allow Brazfl to 
; expand exports to South Amer- 
- ica of products that are not yet 
internationally competitive, on 
quality, or that cannot yet 
Compete with Asian producers 
on price. Menoosul and other 
South American, countries may 
become the tearing ground for 
a more ambitious export effort 
i once farther productivity gains 
have been secured. 

' Brazil's businessmen, who 
made profits despite high infla- 
tion and erratic government 
pofiefes, used to promise they 
could make bumper profits if 
they.had a stable economy and 
political system. With both pre- 
requisites apparently to place, 
they now have the chance to 
prove it. 




, ..?YV - 


lie*' 

- the 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Letters t ransmi tted should be clearly typed and not handwritten. Please set fox for finest resolution 


Towards a 

monetary 

union 

From Mr Malcolm Levitt 

Sir, In the article “Debate on 
Emu timing hots up" (Novem- 
ber 28) it is said that, according 
to me, “it is already too late to 
contemplate Emu starting in 
1997" because of the long 
period required in the private 
sector to make the necessary 
preparations. 

In fact what I have argued in 
a number of reports is that it is 
too late for the single currency 
- replacing all national curren- 
cies - to come into operation 
to 1997. It is possible for Stage 
3 of Emu to start without the 
single currency. There are 
three possibilities: 

• Exchange rates are locked 
and nothing Is done to intro- 
duce the stogie currency; 

• At the other extreme we 
have a “big bang" where the 
stogie currency replaces all 
participating national curren- 
cies simultaneously; 

• Or we have a “dual-cur- 
rency" approach to which the 
stogie currency is used - for 
some purposes - alongside par- 
ticipating national currencies. 

The “big bang” is not feasi- 
ble for both technical and polit- 
ical reasons in 1997 but stage 3 
of Emu could - from a techni- 
cal point of view, leaving aside 
economic convergence and 
political considerations - be 
possible to 1997. 

I feel it is important to make 
this distinction between the 
start of stage 3 and the intro- 
duction of a single currency 
quite clear. 

Malcolm Levitt, 

European Union adviser, 
Barclays Bank, 

54 Lombard Street, 

London BC3P 3AH 


Mutual building 
societies good for 
corporate diversity 


From Mr David MOes. 

Sir, Your editorial, “Halifax 
and after" (November 28), sug- 
gests that if the proposed con- 
version of a merged Halifax/ 
Leeds to pic status were to 
mark the beginning of the mid 
of mutuality to the mortgage 
finance sector that would be no 
bad thing. 

You point out that the 1986 
Building Society Act imposes 
regulatory constraints upon 
societies. Rather than advocate 
a relaxation of these con- 
straints you appear to prefer 
wholesale conversion of build- 
ing societies. The main argu- 
ment in favour of this view is 
that “the accommodating 
regime of mutuality" creates 
an “absence of accountability". 
By implication, pics are made 
accountable by the need to cre- 
ate value for shareholders and 
the threat of takeover as a 
sanction against failure. 

There are two reasons for 
scepticism about this argu- 
ment. First, mut uals face a 
very real sanction from their 
members: building societies 
are obliged to repurchase at 
free value the claims that 
depositors have on them at 
short notice. Members c an 
withdraw resources from the 
management of a mutual and 
can do so independently, 
quickly and cheaply; no con- 
certed action is necessary. In 
contrast a pic is under no obli- 
gation to buy back its equity 
from dissatisfied shareholders 

at any price, let alone a fixed ! 
price. The operation of the sec- \ 
ondary market in company | 
shares leaves tbe assets of the i 


company under the control of 
the managers, save in the 
event of a successful, hostile 
takeover bid. 

Second, if it is through tbe 
discipline of the threat of hos- 
tile takeover that quoted com- 
panies are kept on their toes 
there are good reasons to 
worry. The evidence on take- 
overs in the UK does not sug- 
gest that bad performance is 
the most obvious cause of hos- 
tile bids (see Tim Jenkinson 
and Colin Mayer's recent Hos- 
tile Takeovers, McGraw Hill); 
nor does it provide much sup- 
port for the view that take- 
overs result ln efficiency gama. 
And dramatic ups and downs 
in share prices over short peri- 
ods justifies scepticism about 
whether stock market valua- 
tions reflect a cool assessment 
of the fundamental value of a 
company - surely a necessary 
condition for the efficiency of 
the takeover mechanism. 

The belief that all the 
resources devoted to intermedi- 
ation in the market for retail 
deposits and home loans 
should be under the control of 
management who must 
respond to the signals from 
equity prices suggests a faith 
in the operation of the stock 
market that is not justified by 
the evidence. There is a lot to 
be said for diversity in corpo- 
rate form. 

David Miles, 
senior UK econo mist 
Merritt Lynch, Pierce, Fenner & 
9mith, I 

Ropemaker Mace, \ 

25 Ropemaker Street, \ 

London EC2Y9LY 1 


Challenge 
for German 
students 

From Ms Veronika Both. 

Sir, Michael Lindemann's 
analysis of the German higher 
educational system presents 
perfectly the government's 
arguments for reform (Survey 
of Germany: “Expensive learn- 
ing curve”, November 21). To 
complete the picture I would 
add the a students' point of 
view. 

Many German students have 
to work to finance their studies 
(and most of the German star 
dents have to fi nd accommoda- 
tion in the private sector, 
which is much more expensive 
than a place in a hall of resi- 
dence w hich is guaranteed the 
English students). They also 
have to study under conditions 
which are quite different from 
Englis h universities - over- 
crowded lectures and tutorials, 
with an average number of 50 
students per tutorial instead of 
six as is usual at En gKah uni- 
versities. 

As long as students have to 
cope with these conditions it is 
no wonder that it takes them 
an average of seven years to 
finish their degrees. Tests after 
two terms and fines would not 
change the situation. On 
the contrary, students would 
have to work more to pay the 
fines. 

That said, the quality of a 
German graduate is not compa- 
rable to the English graduate. 
If you ^ have finished your 
studies in Germany you are in 
many cases on a level with a 
postgraduate En glish student. 
Veronika Roth, 

German exchange student, 

105 East Bead, 

Longsight, 

Manchester MI2 5GT 


Sir John, the Letts family and the Troubleshooter 


From Mr Anthony Letts. 

Sir, James Buxton's article, 
"Go away Sir John” (Novem- 
ber 11), is so imprecise in a 
number of details that, he is 
more likely to encourage the 
return of Sir John Harvey- 
Jones than to send him away. 
1. Sir John was not called in by 
the Letts family. The BBC 
approached the company to 
ask whether they could Include 
Letts In the second series of 
the Troubleshooter programme 
and after some deliberation the 
board agreed. 


2. The rent in the Battersea 
office was not Elm but about 
one third of tins figure. 

3. Sir John did not propose a 
diversification into business 
gifts but rather approved a 
course already adopted. 

4. The paragraph about the 
roles of the Letts directors is 
misleading Martin and Timo- 
thy Letts had agreed to retire 
well before the refinancing, 
and my responsibilities as 
chairman were formulated 
prior to the appointment of a 
chief executive. 


When assessing the contribu- 
tion of the Troubleshooter pro- 
gramme it should be borne in 
mind that the series was pri- 
marily intended to provide an 
entertaining and lively 
approach to business. 

Proposals inevitably were 
over-simplified and presented 
in a provocative manner. The 
main weakness of this 
approach was that it could not 
put across many of the 
changes taking place at that 
time. A particular example of 
this was the modest invest- 


programme 

“lent in a constraint related 
production control system 
which yielded significant pro- 
ductivity gains and enabled 
n J a nageinent to' control the 
plant during the seasonal peak 
activity. 

The unsung heroes of the 
“Unround are those who have 
put in many extra hours over 
~ e past two years to bring 
into effect a host of improve- 
“Ptas at tow investment cost 
Anthony Letts, 

56 Eaton Place, 

London SW1X SAT 




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FINANCIAL TIMES WEDNESDAY NOVEMBER 30 1994 


FINANCIAL TIMES 

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

Wednesday November 30 1994 


The Nos win 
in the north 


In the end. the Norse spirit 
prevailed. Norway’s rejection of 
the European Union on Monday 
reflected the country's sense of 
self-reliance and many Norweg- 
ians' fears of the disadvantages 
st emmin g from membership of the 
Brussels club. The result was vir- 
tually identical to that of the 1972 
referendum on European Commu- 
nity membership, but the longer- 
term impact on Norway will be 
much greater than 22 years ago. 

As Mrs Gro Harlem Brundtland. 
the prime mini ster, warned last 
week, Norway now risks a reduc- 
tion in political and economic 
links with its neighbours. The EU 
will be extended next year 
through the accession of Austria, 
Finland and Sweden, but without 
the northern-most member of a 
group of countries that can no lon- 
ger be termed the Nordic “bloc". 

Norway represents just 1.2 per 
cent of the Z5-member Union's 
population and 1.5 per cent of its 
GDP. The rebuff is not the serious 
setback for European integration 
that would have been caused by a 
No in Sweden a fortnight ago, but 
it is regrettable above all in the 
security field. Although Norway 
remains a member of Nato, rejec- 
tion of EU membership by a coun- 
try that shares a frontier with 
Russia leaves a gap in the EtTs 
embryonic strategy of building a 
common defence policy within the 
Western European Union. 

As for as Norway itself is con- 
cerned, the economy is robust 
enough to withstand any 
short-term repercussions. It con- 
tinues to benefit from access to 
the single market brought by the 


European Economic Area. How- 
ever, voters wishing to rescue 
Norwegian sovereignty may ulti- 
mately be disappointed. Alone 
among Nordic countries, Norway 

will have no pan in decision- 
making over single market rules. 
Additionally, the EEA's impor- 
tance will be diminished as its 
main members join the EU next 
year. By increasing longer-term 
uncertainty about Norway's eco- 
nomic links, the vote may deter 
foreign mam i Fa phi ring investment 
needed to shift the economy away 
from dependence on hydrocarbons 
and fishin g. 

Norwegian No campaigners 
have drawn parallels with Switzer- 
land, which in a still stronger 
rejection of European integration 
turned down the EEA and by 
extension the EU in 1992. How- 
ever, Norway's more fragile eco- 
nomic base ill disposes it to 
become the Switzerland of the 
north. In any case, many Swiss 
are having second thoughts about 
the 1992 decision. 

The EU must keep the door ajar 
for both Norway and Switzerland 
to reapply later in the decade. 
Meanwhile EU leaders need to 
heed an important message from 
all three Nordic referendum; this 
autumn: in no country has there 
been an enthusiastic endorsement 
of the EU. Addressing perceived 
shortcomings in the Union's deci- 
sion-making structures and its 
economic performance is now 
more crucial than ever. The EU 
can prosper only if it wins the 
loyalty of the citizens of Europe. 
At present, that condition is a 
long way from being achieved. 


Trading places 


The decision by Sir Bryan 
Carsberg to step down early as 
director general of fair trading 
next May, just three years into his 
five-year term, is to be regretted. 
He has carried out a difficult and 
important job well, and baa 
attempted to strengthen some of 
the more positive features of 
Britain's competition policy. His 
departure raises uncojnfortable . 
questions about how well these 
characteristics will survive. 

Sir Bryan has cast himself as 
the consumer's champion, and 
approached cases with the princi- 
ple that markets should be freed 
from anti-competitive restraints, 
unless such limits can be shown 
Co benefit the consumer. He took a 
particular interest in vertical 
restraints to trade, suggesting that 
examples in ice-cream, fine fra- 
grances and car dealerships were 
against consumers' interests. 

That approach increasingly put 
him in conflict with the Monopo- 
lies and Mergers Commission, 
which has been generally more 
sympathetic to the producer inter- 
sst. The MMC has tended to 
regard vertical restraints as toler- 
ible provided that competition 
exists in a market The onus of 
showing that a company's prac- 
tices are damaging to consumers’ 
interest lies on the shoulders of 
mmpetitors or consumers them- 
selves, in the MMC's view. One of 
he frustrations of Sir Bryan’s job, 
has been the MMC’s rejection of 
nis views in such cases which 
have been referred by the OFT. 


To an extent. Sir Bryan's 
approach also put him at logger- 
beads with the Department of 
Trade and Industry, which has 
shown itself more favourable to 
the MMC point of view. Maybe Sir 
Bryan should have struck an even 
louder and more discordant note. 
His ability to do so has been 
partly restrained by the steady 
shift of .responsibility for. competi- 
tion policy from national capitals 
to Brussels. This trend seems set 
to continue, as the development of 
the single market brings ever 
more cases within the jurisdiction 
of the European Commission. 

Nonetheless, national authori- 
ties will still have important work 
to do, notably in respect of merg- 
ers involving companies with 
purely domestic business or where 
an overriding national interest is 
at stake, in his final months, Sir 
Bryan must deal with several 
potentially controversial cases, 
such as the bids for shipbuilders 
VSEL by GEC and BAe, and the 
proposed merger of the Leeds and 
Halifax building societies. 

Competition policy serves the 
consumer. As often as not, this is 
best achieved by allowing compa- 
nies to pursue profitable activities 
within competitive markets. But 
the system also needs a gadfly to 
keep government and business on 
their toes. This is bow Sir Bryan 
worked: Mr Heseltine should seek 
a replacement with similar charac- 
teristics: no yes-men should apply. 
It may not be an easy job for the 
head hunters. 


Saudi squeeze 


of the past three 
ish chancellors of the 
would have happily 
ices with Saudi Ara- 
rs of finance when it 
wing up their annual 
m at the start of the 
oil revenues were still 
ilentifuDy that spend- 
ire decided principally 
irption limi tations of 
iy. What was left 
reserves. And such 
hion of reserves that 
year for oil revenues 
early policy response, 
the Gulf war cost 

■eserves and today the 

rs have for more in 
eh is battling to cut 
[6, in order to provide 
jntual tax cuts, which 
arsuade the electorate 
. government to con- 

er; the other, to avoid 
rhicb if introduced 
ersuade the public of 
representation. 

(Mastic action, has 
iced, if not fully acted 
the government in 
lis year’s budget, 
January, called for 
iding cuts of 19 per 
tar's, now under prep- 

3 to take another step 
eying a balanced hud- 
ive years, and green 

4 flatness in oil prices 
olve further sharp 

^the success so far 
ifficult because of the 
which Saudi Arabia 


has historically approached gov- 
ernment overspending. Instead of 
wielding the knife, the Saudi gov- 
ernment prefers to turn off the 
tap. Programmes and projects 
tend not to be scrapped, but pay- 
ments are delayed. Within the 
kingdom, this is causing mounting 
pain for many companies. Over- 
seas, credit insurance institutions 
have been reviewing terms or 
cover for exporters to Saudi 
Arabia, and in some cases refus- 
ing it on short-term contracts. 

Although oil prices have firmed 
as a result of the latest Opec 
agreement, there is little sign of a 
si gnific ant upswing to ease Saudi 
budget pressures. The fiscal deficit 
as a proportion of gross national 
product should this year have 
dipped below the 10 per cent fig- 
ure estimated in 1993, but is still 
nearly double that of the UK. 

Sooner, rather than later, the 
government will have to grasp the 
political nettle and increase its 
revenues by other means. A more 
ambitious privatisation pro- 
gramme is an obvious candidate, 
especially if it involves subsidised 
public utilities. There is, equally, 
scope for a range of indirect taxes 
aimed mainly at the kingdom's 
most affluent consumers. At some 
point, however, Saudi Arabia will 
have to act like most other middle- 
income countries and tax its citi- 
zens directly - a development 
with important political implica- 
tions for the royal family and for 
buyers of Saudi oil. The kingdom 
should begin preparing its citizens 
for this now. 


UK BUDGET LEADER PAGE 6 


J apan has long been crit- 
icised for excluding foreign 
companies from its markets 
by □ on-tariff barriers, such 
as allegedly cartel-like indus- 
trial groups and opaque dis- 
tribution systems. 

Its US trade critics say that one of 
the most powerful impediments to 
the entry of foreign companies into 
Japan's markets is the keiretsu sys- 
tem of corporate families. These 
bind together corporate Japan In a 
web of mutual protection, owner- 
ship ami alliances, and make Japa- 
nese companies all but impervious 
to hostile takeovers. 

Now, however, there is evidence 
that the web is loosening, as alli- 
ances that have lost their commer- 
cial value are discreetly severed and 
crossholdings of shares sold off. The 
keiretsu are reorganising to moke 
more efficient use of management 
and capital in the aftermath of the 
worst recession since the second 
world war. 

These diversified families of 
industrial companies are often built 
around banks and general trading 
houses like the so-called horizontal 
keiretsu, the three largest of which 
are Mitsubishi. Mitsui and Sumi- 
tomo. The other model is the verti- 
cal keiretsu, which consists of a 
chain of dealers and suppliers 
beaded by a manufacturer such as 
Toyota, Matsushita or Nippon Steel. 

They form a weighty elite in Japa- 
nese business life. The top six hori- 
zontal keiretsu employ nearly 5 per 
cent of the Japanese labour force 
and account for 16 per cent of corpo- 
rate sales. Because of their vague 
structure, their boundaries are hard 
to define, so their influence on the 
economy is much greater. 

The links between keiretsu family 
members are traditionally forged 
through mutual exchanges of 
finance, contracts . managers and 
technology. These are supported by 
multiple cross-shareholdings, with 
members typically holding small 
equity stakes of less than 5 per cent 
of each other. No single member 
has decisive control, but total hold- 
ings by members of the same keir- 
etsu can amount to an invulnerable 
90 per cent of an individual compa- 
ny's equity capital. 

Keeping it in the family is gener- 
ally recognised to have been a fac- 
tor in the postwar success of some 
of Japan's top companies. It has 
also contributed to the traditional 
stability of Japan’s capitalism, with 
its lifetime employment, loyal 
shareholders and cheap long-term 
hank finance. 

Foreign competitors argue that 
these qualities give keiretsu - by 
which they usually mean Japan at 
large - the advantages of being 
immune to hostile bids and less 
prone to bankruptcy than them- 
selves. They form cosy cartels at 
home and abroad and succeed in 
“keeping outsiders out and insiders 
in'*, complains a recent report for 
the US congress. 

Japan's keiretsu appear to have . 
something in common with conti- 
nental European conglomerates In 
countries such as France, Germany 
and Sweden, many of which share 
their belief in long-term relation- 
ships - and their aversion to hostile 
bidders. But the similarity is decep- 
tive: European conglomerates tend 


M itsubishi, the most 
tightly interwoven of 
Japan's keiretsu corpo- 
rate families, is a clas- 
sic example of how formerly cosy 
group ties are being subjected to 
market forces. 

It is an empire of 216,000 employ- 
ees, prominent in businesses rang- 
ing from banking to beer, shipping 
and shipbuilding, property, oil, 
aerospace and textiles. On average, 
the 29 companies at the heart of 
the group hold 36 per cent of each 
other’s shares, above the average 
for keiretsu corporate families. 

Mitsubishi companies exchange 
more directors than do other keir- 
etsu and have a long record of ral- 
lying member companies from dif- 
ferent parts of the group to 
co-operate on projects, one of the 
main competitive advantages of the 
keiretsu system. 

Tokyo's business district, Maru- 
nouchi, is dominated by the head- 


Power play 
at BP 

■ What does Rail track's Bob 
Horton make of the reshuffle at his 
old shop - BP? He could be forgiven 
for feeling a bit bitter at the sight of 
his old rival David Simon getting 
the chair, while his former protfege. 
John Browne, is promoted to chief 
executive. 

BP is a much happier ship than it 
was two and a half years ago when 
Horton lost his job after upsetting 
everybody. Even so. both men owe 
a lot to Horton. When Horton was 
given the job of turning round BP’s 
poor performing US affiliate. 
Standard Oil, Browne was his right 
hand man and encouraged to make 
his mark on Wall Street. 

As for Simon, he has followed 
most of the policies set in train 
during Horton’s controversial two 
and a half years at the top of BP. 
Simon has been rewarded with the 
chairmanship of Britain's third 
biggest company, while Horton was 
made the scapegoat for BP’ s\ 
problems and has been relegated to 
running Rail track. 

As for Horton's old boss at BP, Sir 
Peter Walters, he goes from 
strength to strength. Having 
exchanged the chairmanship of 
Midland for the deputy 
chairmanship of HSBC Holdings, he 
has just taken on the chairmanship 
of SmithKline Beechaxn and is an 
asset to any board of directors. Is 
there anybody out there in the 



Loosening of the 
corporate web 

Japan’s company networks - the keiretsu 
- seem to be adapting to changing 
conditions, says William Dawkins 


Keiretsu: Japan’s corporate network 

Safes and Intra-group relations 1933** 


to have a central bolding company, 
where strategy is formed. There has 
been no equivalent centre for keir- 
etsu since the abolition of the sai 
batsu holding companies after the 
second world war by the US occupy- 
ing forces (an attempt to eliminate 
the industrial groups that had 
monopolised the prewar economy). 

A consequence of having no hold- 
ing company is that the disappear- 
ance or weakening of a keiretsu 
member causes little damage to the 
rest of the group. It resembles a 
hydra, with no central brain yet 
equipped with many tentacles, each 
able to repair itself independently. 
The European conglomerate has a 
simpler and more vulnerable 
design, more like an octopus. 

Some of Japan’s trade critics 
argue that the banks and trading 
companies that tend to do business 
with most members of a keiretsu act 
as their nerve centres. Each keiretsu 
also holds a regular, usually 
monthly, presidential council, when 
the beads of member companies 
meet for a chat, another opportu- 
nity for co-ordination. 

But they are diffuse centres, and 
getting more diffuse at that. Japa- 
nese banks, unlike their European 
counterparts, exercise little board- 
room power, unless a company is in 
serious trouble. 

there is evidence that the keir- 
etsu system is adapting to the glo- 
balisation of its markets. The old 
corporate groups are becoming 
more open to doing business with 
foreign partners. Mitsubishi, for 
example, is expanding its ties with 
Daimler-Benz, the German automo- 
tive and aerospace group - these 
are designed to help Daimler-Benz 
gain a foothold in Japan and south- 
east Asia, while strengthening Mit- 
subishi's international competitive- 
ness. 

There are also signs of a watering 
down in the system of cross-share- 
holdings. Keiretsu members sold 
Yl,550bn (nobn) of shares in each 
other in the first eight months of 
this year, well on the way to beat- 
ing last year’s record Y2.148bn, 
itself more than doable the previous 
year, according to the Tokyo Stock 
Exchange. The reduction in mutual 
equity stakes has been strongest in 
traditional manufacturing indus- 
tries where keiretsu are strong, such 
as paper and pulp, cable, electrical 
machinery and transport equip- 
ment, says Nomura Research Insti- 
tute. 

Overall, the crossboldings that 


Mamtowr Emp toycea Turnover 
compaafee fOOOj (vuootrt 


Mitsubishi 

25 

C9J 

216.0 

3X6 

Mitsui 

22 

£6) 

248.1 

34-8 

Sumitomo 

16 

£20) 

125.3 . 

24.7 

Fuyo 

24 

(281 

2S4.2 

34.6 

Sanwa 

41 

{44} 

376JJ 

3Gk4 

DKB 

42 

(48) 

44&3 

80.1 

Total 

164 

(188) 

1 ,447.6 

201.7 


NRI has been able to track down 
fell marginally from 29 3 per cent of 
the total stock market to 2&9 per 
cent last year. But the institute sus- 
pects that the changes within indi- 
vidual sectors are much bigger and 
the overall figure itself may be 
larger because of unreported share 
sales. 

IT the keiretsu system is loosening 


Nat Aanats Ratio of Intra-^oup 
profits (V '000X1} Mragroop stock 





hokflnoafK) 

A B 

568 
226' ■ 

25-0 

2JUT 

‘Xfist 

1.81 . 

3841' 

679 

2.60* 

27.0 

2.1 T 

5.8 

1.34 

10.3 

167 

OjB4* 

15X1 

nr 

1W 

1,56 

. 28.0 

385 

1.48* 

26.6 

2.14* 

58 

1.29 

16.9 

658 

&52* 

' 33.0 
2.6S* 

oa 

1-41 

16.7 

585 

2L24* 

45.0 

382* 

4.9 

1.03 

14.2 

2,803 

1076- 

156-5 

1238* 

8l9 

■1.41 

22J2 ' 


up, it is doing so strictly under the 
control of its main players. Most of 
the cross-shareholdings sold 
recently were placed with friendly 
shareholders rather than in the 
open market, says Mr Keith Donald- 
son, director of equity research for 
Salomon. Brothers Asia. 

Another sign that the keiretsu are 
changing is that they are broaden- 


AU Japan 


37.262.1 1.465.1 26,054 1243.7 


” Hnsncsd year 
Rgures fn brackets tndudo ftnsrcfcd fans 
* ftanxntass anas of flnanetot dims 
A e Thn overage ratio o» intra-group stock holdings par group flfm. mcfcjtfng finandal Bmw 
B = The f&oo of total kitia -group nock hoidhgs. Inducting financial fans 


The six mayor companies’ share of . . . 

— — Hollo littn-n. 

,<,.101211 monca capnansanon 


... labour force 



4.5% 


iftriafqatoa 


Thesbt major 
companies 
Hast of Japanese 
Mad companies 



... not profits' 


Sourcw ToyoloKai Data Sank. Japan Fdr Trade Ccmnttaslon 


Mitsubishi's extended family 


quarters of 15 Mitsubishi group 
companies, known as Mitsubishi 
Village, a visual symbol of their 
central role in Japan’s industrial 
establishment. 

Intra-group co-operation can be 
taken less for granted since the on- 
set of recession in 1991 prompted 
management across the group to 
place profitability, rather than 
gaining market share, as the prime 
objective, says Mr Masayoshi Hay 
ashikawa, general manager of plan- 
ning at Mitsubishi Corporation, the 
trading company near the heart of 
the group. 

This new approach is best illus- 
trated by the recent decision of Nip- 
pon Ynsen, a shipper in the group, 
to boy South Korean ships for the 
first time, rather than from its 
usual supplier, Mitsubishi Heavy 


Industries. The yen’s rise has made 
Japanese shipbuilding costs 30 per 
cent higher than South Korea's. “A 
mutually beneficial relationship in 
steel and ships? That is a thing of 
the past,” says Mr Tsuda Yoshida, 
managing director of Mitsubishi 
Heavy Industries. 

Similarly, MHI recently decided 
to use Nissho Iwai, a member of the 
Sanwa keiretsu, to sen its own- 
heavy machinery in Indonesia. 

Mitsubishi group members also 
have no qualms about declining 
requests from Mitsubishi Estate to 
take space in one of the world’s 
most expensive buildings; the 
trader-occupied Y27Qbn, 80-floor, 
Lan dmar k Tower in Yokohama. 

However, family members still 
close ranks when business interests 
or opportunities are at stake. 


Landmark Tower, for example, is 
a classic example of the kind of 
mistimed property development 
that has brought many developers 
to their knees. The project was 
started by Mitsubishi Estate just 
before the spectacular collapse in 
inflated asset prices four years ago 
and completed in July last year, in 
the depth of the recession. 

An independent company might 
have been forced to dump the proj- 
ect Yet Mitsubishi Estate was able 
to carry on. confident that Mitsubi- 
shi Bank would continue funding 
the project through good times and 
bad. Landmark Tower may be a 
white elephant today, but even the 
most critical property analysts 
believe that any company that can 
afford to continue owning the 
tower will end up, in a few years. 


private sector who will give Bob 
Horton a second chance? Otherwise, 
he'll just have to stick around long 
enough to hope be can treble his 
salary on privatisation. 


Boot in 

■ Tony Underwood, a winger in 
England's current rugby team - 
brother Rory plays on the other 
wing - is joining another XV. This 
time it's Crosby Securities’ south 
east Asia stockbroking sales team. 
Underwood, who was born in 
Malaysia, was formerly at Lehman 
Bros. Michael Hanson-Lawson, his 
mana ging director, boasts: “I am 
sure Tony will prove a great asset 
to our sales team and, in particular, 
to our Hong Kong Professionals 
Rugby Sevens Team in 1995. ” Nuff 
said. 


Small matter 

■ Calling all “resting" actors below 
a certain height. With the 
pantomime Snow White proring 
unusually popular this season - 20 
plus productions around the 
country - there is an awkward little 
supply and demand imbalance 
relating to the long-tressed damsel's 
seven compact companions. Martin 
Brown, a spokesman for the actors' 
union Equity, highlights the 
problem: "We only have 37 persons 
of restricted growth on our register. 

“That’s not necessarily the Full 
list." he adds brightly, "because not 


Observer 



every performer of restricted 
growth wants to be pigeon-holed in 
that way." What, they’d rather be 
called a dwarf? 


Digging a hole 

■ Brazil's usually squeaky clean 
Workers Party, which treats most 
businessmen with ideological 
contempt, is frying to regain its 
virginity. 

Two of its candidates in this 
month's gubernatorial elections 
announced after winning that they 
received 40 per cent of their 
campaign funds from construction 
companies. Worse, the two biggest 


donors - Norberto Qdebrecht and 
Via Enge nhari a - were accused by 
party radicals of being involved in a 
Congressional corruption scandal 
last year. They were never 
investigated, but the mud stuck. 

The Workers' Party, Brazil's 
biggest leftwing group, is trying to 
"modernise" itself and some 
moderates say it needs to start 
appealing to business and to be less 
prurient 

The party’s hardline leadership, 
though, was outraged at the 
donations, and has ordered the 
money to be returned. Senator 
Laura Campos, who found out after 
he had been elected that he had 
unwittingly been funded from the 
same campaign budget summed up: 
"I am a Marxist and do not accept 
corporate financing." 


Odd type 

■ So what was Howard Davies, the 
CBTs director-general, doing in 
Lima last week? Well, mostly 
drawing imaginative parallels 
between "booming Britain and 
prosperous Peru" for the purposes 
of fostering two-way trade. 

Two soccer-mad nations, Britain 
and Peru had "chosen not to go to 
this year’s World Cup", Davies 
cheerfully pointed out 

In other words, both places were 
performing better in the economic 
than the sporting stakes - even if 
the margin in Peru’s case (growth 
rate: 10 per cent plus this 
year) was rather greater. 


13 


ing their purchasing patterns, buy- 
ing more of their materials and 
components outside their groups. 
According to the Fair Trade Com- 
mission. Japan’s anti-trust body, 
the average share of keiretsu mem- 
bers' sales to each other slipped 
from 7.64 per cent in 1989 to 6^5 per 
cent. in 1992 and is continuing to 
slide as the yen’s strength makes 
imports cheaper. 

The trend is especially strong in 
the car industry, which is more 
exposed than most to international 
competition. Toyota has been reduc- 
ing its dependence on its compo- 
nents affiliate, Nlppondenso, since 
instructing it to start making parts 
for Nissan four years ago. Last 

March, Isuzu, the truckmaker, and 
Suzuki, the producer of minicara. 
cut their business ties after 13 years 
of making each other's vehicles, on 
the grounds that they had outlived 
their purpose. 

Some believe this marks the 
beg inning of the end for the system. 
"In the next two decades, keiretsu 
will become a thing of the past 
They were good at rebuilding Japan 
and good at international competi- 
tion when it was advantageous to 
have a main bank at the centre of 
your grouping," predicts Mr Kazuo 
Chiba, counsellor to Mitsui, the old- 
est and most distinguished keiretsu. 
“That is now becoming irrelevant." 

Y et the pace of change is 
dictated by the keiretsu 
themselves, reflecting the 
instinctive Japanese dis- 
taste for uncontrolled 
competition. There is still a gulf 
between Japanese capitalism, where 
allegiance to customers, employees 
and other group members is what 
counts, and Anglo Saxon capital- 
ism, where shareholder value comes 
first 

Even if keiretsu were to vanish, 
that gulf would remain, since the 
values they embody are at the heart 
of Japanese capitalism. Much of the 
stock market value of Japanese 
companies - keiretsu Mitsubishi or 
non-keiretsu Sony - lies in unwrit- 
ten loyalties between management, 
shareholders, workers and a multi- 
tude of special business interests. 

That is why Japanese corporate 
culture remains resistant to hostile 
takeover bids. Such a bid would end 
up devaluing the company because 
it would wreck those valuable links. 

"Japanese companies are not to 
be treated as if they are commodi- 
ties,'' explains Mr Katsuhiro Naka 
gawa, a director-general at the Min- 
istry of International Trade and 
Industry, with long experience of 
lecturing US officials about keiretsu. 

As for the presidential councils, 
Mitsui's Mr Chiba swears that they 
have become blurred shadows of 
their former businesslike selves. 
“They don't discuss business per se, 
just information in a general sense. 
It was more dynamic in the old 
days,” says Mr Chiba. 

However, while keiretsu may be 
an ageing component of Japanese 
capitalism, they appear to be adjust- 
ing to a tougher new environment, 
in which Japanese business rela- 
tionships are becoming more sensi- 
tive to market forces. It would' not 
be the first time that Japan's adapt- 
ability has surprised its competi- 
tors. 


with one of the finest assets in the 
domestic property market 

But perhaps the most enduring 
quality of the keiretsu system, says 
Mr Hayashikawa, is its ability to 
pass information fast around the f 
corporate family. 

In Mitsubishi's case, the vehicle 
for this is the so-called "Friday 
Club” at which the bosses of the 
top 29 member companies meet for 
a chat over lunch on the second 
Friday of each month, on the top 
floor of the Mitsubishi Buflding in 
ManmonchL 

tt is at this gathering that intelli- 
gence can be shared, paving the 
way for group companies to work 
together. An example of how this 
team-work can still pay dividends 
is the co-operation between Mitsu- 
bishi’s trading, oil exploration and 
oU refuting arms in making , off the 
coast of Vietnam last June, the 
largest oil discovery by a Japanese 
company for 35 years. 


But there had been another, 
loftier purpose to Davies' Lima trip, 
namely to search out the British 
college, San Silvestre, where his 
Peruvian-born secretary had been 
educated. Having duly tracked It 
down, Davies came away still 
wondering what could possibly be 
meant by the school’s motto: "1 am, 
2 can. I ought, 2 will". 


Hoarse laughter 

■ They must be feeling pretty flat 
in Newmarket after seeing the 
latest official petit granted to South 
Africa's small but influential racing 
industry. Henceforth, the purchase 
of a racehorse is to be completely 
tax deductible. The capital cost can 
be written off against tax at a flat 25 
per cent per year depredation over 
four years. The new legislation even 
allows owners unhappy with their 
horses' performance to stay happy. 
When a racehorse is retired from 
active competition, its entire 
purchase price immediately 
becomes claimable against 
tax. 

A case of South Africa's Finance 
Department attempting to re-open 
the stable door after the w inning s 
have bolted? 


Nothing sacred 

■ Mad cows, friendless in Britain, 
might try Indonesia, where 
supermarket shelves carry a corned 
beef called GaGa. 



14 








MAiX -'I y Vi iiriiii."’ Iritrn.::: 


FINANCIAL TIMES 

Wednesday November 30 1994 


Japanese sell overseas 
to beat the rising yen 


Michiyo Nakamoto explains how a far-sighted 
circuit board maker is bucking the recession 


Iberia 
reduces 
cost cuts 
to head off 
strikes 


In Katsuta city, Just north of 
Tokyo, the head office of Suzuki 
Manufacturing, a medium-sized 
maker of printed circuit boards, 
is buzzing with activity. 

The brisk pace of business 
Suzuki has seen over the past 
two years contrasts with many of 
its fellow manufacturers in the 
industrial heartland of Ibaraki 
Prefecture. The region is domi- 
nated by subcontractors which 
have long depended on jobs 
created by Hitachi, Japan’s larg- 
est electric machinery maker. 

As Japan's economic slump 
and the 24 per cent appreciation 
of the yen against the dollar have 
squeezed profits at Hitachi, many 
of the region's smaller companies 
are forced to look elsewhere for 
work 

Unlike the majority of suppli- 
ers in the region which have suf- 
fered from tying their fortunes 
too closely to a Japanese parent 
company, which in turn has been 
hurt by the high yen, Suzuki is 
riding a wave of success by 
exporting most of its output 

Over the past few years Suzuki 
(no relation of Suzuki Motor; has 
reduced its dependence on Japa- 
nese customers to virtually nil 
and in spite of the high yen envi- 
ronment has sold 99 per cent of 
what it makes to overseas cus- 
tomers. “In the home market, 
business began to drop off about 
two years ago,” says Ms Man 
Ling Chang, manager of the over- 
seas sales section. 

However, Suzuki has been able 
to take advantage of strong 
demand overseas, specifically for 
the printed circuit boards for cel- 
lular phones that the company 
specialises in. Its main customers 
include cellular phones giants 
Motorola, the US company, and 
Ericsson of Sweden. The compa- 


Yen 


Against the dollar per SJ 
95 



Nov S3 

Source FT Graphite 


1994 


Nov 


ny's success in supplying over- 
seas customers has been such 
that, at a time when the majority 
of internationally active Japa- 
nese companies have embarked 
on wide-ranging rationalisation 
measures and have shift ed pro- 
duction to lower-cost countries, 
Suzuki has not had to cut its 
workforce nor move production 
overseas. 

“We manufacture everything in 
Japan," said Mr Yoshihiro 
Koyama, director of Suzuki’s 
Sawa plant. 

Suzuki has found strong over- 
seas demand even in the high- 
yen environment because it had 
a product and technology that 
few others in the world can pro- 
vide. The specialised printed cir- 
cuit board it makes through a 
demanding process “is something 
that can be made in no other 
Asian country yet," says Ms 
Chang. 

Four years ago Suzuki made 
hard disc drives and printed cir- 
cuit boards for computers and 50 
per cent of its business was 
domestic. These products, how- 
ever, have low value added and 


are very price competitive. With 
the yen’s appreciation Japanese 
makers of hard disc drives and 
PCBs for computers have been 
devastated by competitors: in 
Taiwan and Korea. 

Suzuki Manufacturing avoided 
the fate of many in the industry 
by shifting quickly to higher val- 
ue-added PCBs for the cellular 
phone market. 

Management also hnd the fore- 
sight to look outside Japan for 
growth at an early stage. 

“We decided to sell tu Moto- 
rola, which is the world leader in 
cellular phones because it was 
crucial to get the volumes." 
explains Mr Koyama. "We can no 
longer survive on the work that 
Japanese companies provide.” 

Another factor which encour- 
aged Suzuki to sell overseas was 
that unlike in Japan, where 
relationships are crucial, western 
companies will buy something 
"as long as the product is good 
and the price is right", said Mr 
Koyama. 

The shift to a higher val- 
ue-added product is not enough 
to beat the impact of tbe yen’s 
appreciation. Mr Koyama says. 
To remain competitive against 
Korean and Taiwanese manufac- 
turers it is necessary to make 
higher value-added products in 
volume, he says. 

With the yen’s rise forcing 
many companies to move produc- 
tion overseas, “Japan's manufac- 
turing industry is in chaos”. Mr 
Koyama says. 

But if the example of Suzuki 
Manufacturing is anything to go 
by. the challenge presented by 
the yen’s appreciation is forcing 
many Japanese manufacturers to 
become even more competitive. 


Loosening networks. Page 13 


UK budget 
brings cuts 


Continued from Page 1 


to £13bn in 1996-97 and £5bn in 
1997-98. 

Financial markets gave a luke- 
warm response to a budget, 
which was widely described as 
unexceptional 

Analysts cautioned, however, 
against attributing falling bond 
prices to the budget, saying that 
UK markets were taking their 
lead from Wall Street 

A stronger than expected OS 
consumer confidence report rea- 
wakened fears of higher US inter- 
est rates. 

UK government bonds fell by 
more than % a point on the day, 
while the FT-SE index rose 14 
points to close at 51061.1. Equity 
prices fed mar ginally after the 
budget announcement: brokers 
fear that UK interest rates could 
rise after the meeting 1 between 
the chancellor and the governor 
of the Bank of England a week 
tomorrow. 


Boutros Ghali in talks to 
salvage Bosnia peace role 


Continued from Page 1 


intense diplomatic efforts to 
overcome deep splits in die inter- 
national community over Bosnia 
and to resume the peace process. 

In a bid to get the Bosnian 
Serbs to return to the bargaining 
table, meanwhile, envoys from 
the five-nation contact group 
yesterday also travelled to Sara- 
jevo, for talks with the Moslem- 
led Bosnian government 

The representatives - from the 
US, Russia, Germany, France 
and the UK - were also due to 
meet Bosnian Serb leaders for 
the first time since they rejected 
a western peace plan - a parti- 
tion of Bosnia - in July. This 
meeting followed talks with 
President Slobodan Milosevic of 
Serbia in Belgrade on Monday. 

Despite diplomatic strains 
placed on die contact group by 
criticism from the US of the effi- 
cacy of the UN’s military role in 
Bosnia, the international media- 


tors appear to hold out hope of 
reviving their peace plan to 
divide Bosnia roughly in half 
between the Moslem-Croat feder- 
ation and the Bosnian Serbs, 
who control 70 per cent of the 
war-torn country. 

The peace process will get an 
additional boost when Serb 
rebels from Croatia sign an 
agreement on Thursday on 
restoring economic links with 
Zagreb, the Croat capital 

An associate of Mr Milosevic 
said Belgrade would maintain a 
link with . Serb-held territory in 
Croatia, which would step up 
pressure on the Bosnian Serbs to 
sign a peace deal 
• Mr Mirko Pejanovic, an eth- 
nic Serb member of Bosnia’s col- 
lective presidency, disclosed that 
he had been in touch with aides 
to Mr Andrei Kozyrev, the Ros- 
si an foreign minister, to put the 
concerns of the 200,000 Serbs 
who live In Bosnian govenunent- 
controUed ter ri tory. 


By Tom Bums in Madrid 


The management of Iberia, 
Spain's losstoahing national car- 
rier. scaled back ambitious cost- 
cutting measures yesterday in 
the face of fierce union strike 
action. 

Iberia, which had wanted a 15 
per cent pay cut over two years 
as part of a viability plan to stem 
heavy losses, accepted the 
unions' oiler to cut wages by S 
per cent. 

The company also agreed to 
make up back pay totalling 
PtalObn ($77.5m), owed under 
earlier salary agreements, which 
it had previously said it was not 
in a position to honour. 

As part of the agreement, two 
union officials who sat on the 
airline's board will also join its 
four-member executive commit- 
tee. Joint management and union 
committees have been set up to 
monitor the viability plan. 

The settlement was welcomed 
by Mr Juan Manuel Eguiagaray. 
industry minister, who said it set 
the stage for the Injection of 
fresh public subsidies to the air- 
line. 

The aid package, likely to total 
Ptal30bn, has to be authorised by 
a sceptical European Commis- 
sion. Brussels permitted Madrid 
to pay a “final" subsidy of 
Ptal20bn to Iberia in 1992 
but much of that has since 
been lost in ambitious but 
unprofitable acquisitions in Latin 
America. 

Analysts believe Iberia has 
now bowed to union pressure and 
failed to address Iberia's uncom- 
petitive cost structure. “The 
agreement looks like a climb- 
down.” said Ms Alexandra Pern- 
cone, analyst at brokers James 
Cape! in London. 

Wildcat strikes by the compa- 
ny’s 25,000 employees on Monday 
closed 40 domestic airports, 
stranded more than 100,000 pas- 
sengers and incurred Ptalbn 
losses for the airline. 

Air traffic returned to normal 
yesterday but Iberia, which has 
accumulated losses of Ptal50bn, 
is on course to lose Pta44bn this 
year. 

The agreement increases the 
number of redundancies, through 
incentives and early retirement, 
from 2,200 over two years to 3,500 
over three years. The cost of the 
lay-offs is estimated to be 
Pta30bn and the revised wage 
cuts represent estimated savings 
of PtalObn instead of the PtalTbn 
the management had wanted. 

The airline’s powerful pilots 
union, which was not parly to 
the agreement, was expected in 
talks with the management late 
yesterday to accept the settle- 
ment “It would be logical to do 
so,” said a spokesman. 

Iberia’s difficulties multiplied 
as its Latin American expansi on 
coincided with the deregulation 
of domestic air traffic. Two short- 
haul private Spanish airlines are 
competing with Iberia on regular 

internal flights. 


FT WEATHER GUIDE 


Europe today 


High pressure over central Europe and 
southern Scandinavia will bring a south- 
easterly flow to the British Isles. A complex 
■ low approaching from the Atlantic wffl 
produce cloud fn the western UK. Cloud wffl 
be Interspersed with sunny spelts in the 
eastern UK, the Benelux and much of France. 
Spain wffl have a mixture of cloud and sun, 
although sun wffl be dominant in the south. 
Italy and the Alps win be surety, although 
there wffl be some persistent tog. Germany 
wffl also be foggy, but the sun wffl break 
through in most places. Most of eastern 
Europe will be ctoudy. North-west Turkey wffl 
have thunder showers. 


Five-day forecast 

A southerly air flow from the UK across 
western Europe mil persist and It will remain 
dry iBitil the end of the week. Meanwhile, cold 
air wffl penetrate south-eastern Europe 
resulting in cloud and showers. As the 
weekend arrives, several frontal zones wil 
affect north-west Europe bringing rain to the 
UK, Benelux, France and Germany. The 
central Mediterranean wiV have a lot of sun 
and south easte rn Europe wffl become more 
settled 



TODAY'S TEMPERATURES 


SHuaOon at 12 GMT. Tunpontlums maximum for <*y. Fomcssts by Mefeo Const* of (he Noftwtonds 



Maximum 

Beijing 

Mr 

9 

Caracas 

doudy 

28 

Fare 

fak 

18 

Madrid 


CeMus 

BoKseS 

doudy 

10 

cardtfl 

fair 

10 

Frankfurt 

fak 

7 

Majorca 

Abu Dhabi 

Wr 

29 

Belgrade 

doudy 

4 

OwahtaHia 

fak 

20 

Geneva 

tag 

6 

Mafia 

Accra 

sun 

32 

Bertn 

sun 

6 

Chicago 

Mr 

6 

Gtarahar 

sun 

17 

Manchester 

Algiers 

sun 

20 

Bermuda 

fak 

26 

Cologne 

fak 

9 

Gbagow 

fak 

8 

Mania 

Amsterdam 

fak 

9 

Bogota 

drzzl 

19 

Qatar 

GW 

28 

Hamburg 

fak 

B 

Melbourne 

Athens 

fak 

16 

Bombay 

am 

33 

Dates 

Ml 

18 

HeMnM 

fak 

-3 

Merten City 

Atlanta 

sun 

17 

Brussels 

tag 

8 

DeM 

fak 

2S 

Hang Kong 

fak 

28 

Miami 

a Alms 

SU1 

27 

Budapyp 

Mr 

6 

Dufacd 

sw 

29 

HonoMu 

Mr 

28 

Mian 

B-ham 

fak 

8 

Ohagen 

fak 

7 

DUbfln 

doudy 

10 

Istanbul 

shower 

9 

Montreal 

Bangkok 

doudy 

34 

Cairo 

fak 

19 

Oubrovrak 

fak 

15 

Jakarta 

shower 

32 

Moscow 

Barcelona 

fak 

16 

Cape Town 

sun 

27 

Edinburgh 

fak 

8 

Jersey 

fak 

11 

Munich 


Constant improvement of our service. 
That's our commitment, 


Lufthansa 


Kuwtfi 

L Angelas 

Las Palmas 

Uma 

Lisbon 

London 

Luxboug 

Lyon 

Madeira 


sun 
sun 
swi 
for 
doudy 
(air 
fair 
sun 
sun 
shower 


24 Naples 
28 Nassau 
23 Now York 
23 Nice 
17 Nicosia 
10 Osfc> 

4 Paris 
e Penh 
20 Prague 


Ur 

sun 

Ur 

doudy 

Ur 

Ur 

shower 

tog 

snow 

snow 

sun 

doudy 

sun 

Ur 

Ur 

fair 

sun 


Ur 

Ur 

Ur 


13 Rangoon 
19 Reykjavik 
18 Wo 
8 Rome 
31 S. Fraco 
18 Seoul 

24 Singapore 
28 Stocfchobn 

10 Strasbourg 

1 Sydney 
-9 Tangier 
5 Td Aviv 

25 Tokyo 
18 Toronto 

28 Vancouver 
8 Venice 
15 Vienna 
18 Warsaw 

2 Washington 
7 Wellington 

33 Winnipeg 
4 Zutch 


fair 

fair 

thund 

sun 

Ur 

sun 

thund 

fak 

sun 

Ur 

Ur 

shower 

Ur 

Ur 

rain 

sun 

Mr 


Mr 

snow 

sun 


33 

3 

24 
17 
IS 
12 
30 

3 

4 

25 
20 

15 

16 
1 
9 
10 

7 

4 

11 

IS 

-4 

3 


THE LEX COLUMN 




Mr Kenneth Clarke’s second Budget 
ran easily be criticised as doll Bat, as 
far as financial markets are con- 
cerned, that may be no bad thing. The 
fell in public spending projections - in 
line with tower inflation - and conse- 
quent drop in the public sector bor- 
rowing requirement were widely 
expected. The Budget was ess e ntially 
neutraL This will not cause celebra- 
tion, but there should at least be some 
comfort that the ^hanreiinr has not 
done anything foolish. 

One hope is that the Budget win 
play well abroad. Foreign investors 
may focus on the feet that the US's 
public finances are in relatively good 
shape compared with those of many of 
its peers. That could lead to some fur- 
ther narrowing in the yield gap 
between gflts and US Treasury bonds. 
Nevertheless, with the yields an Trea- 
suries again rising above 8 per cent 
yesterday, gilts will be hard-poshed to 
make headway in the short run. 

The stock market should be mildly 
pleased that there were no measures 
to control dividend payments by 
reducing the tax credit received by 
tax-exempt investors. Nor was there 
any attempt to crack down on the 
potential tax breaks associated with 
share buy-backs. So regional electric- 
ity companies and other under-geared 
groups may still be able to hand bade 
cash to their shareholders in a tax-effi- 
cient manner. 

The big worry remains that this 
year’s fiscal prudence will be followed 
by profligacy next year. If economic 
growth is stronger than the &25 per 
cent forecast for 1995, the PSBR will 
drop more rapidly- Mr Clarke would 
then have a ready-made excuse to 
bribe voters with preelection tax cots. 
Nothing he said yesterday has reduced 
the likelihood of this course of action. 


FT-SE index; 3061.1 {+14.0} 



at the cipeftfeof cytf&afe. Botit may 
pFpine shorir^rod: remits from -Baas, 
and S&N nexfweek afelfcdy to high- 
light volume dfedine? an^jalena^; 
competition. Mower, low tafiation 
makes lt hard, lf not 
frree tluough price 


1970 78 80 

Sousa: Dm Rad Book 


nation, of government debt arrange- 
ments could result in a more stream- 
lined gilts issuing process: AS in alt- 
by tibe middle of next year, the UK 
vriH probably sport a thoroughly mod-, 
e m government bond market tailored 
to the needs of investors. . ... 

Such reforms carry possible- dan- 
gas. If the government takes risks 
with inflation. speculatarawfil find it 
qa s for to punish it by setting gilts 
short But provided a firm-line on 
inflation is maintained, the govern- 
ment will benefit by shaving a few 
barfs prurnfat off the COSt of jnhliff ftimi- 
tog. 


Breweries 


Gilt repos 

Some in the gilt market were expect- 
ing the Chancellor to announce tbe 
creation of an "open repo” market yes- 
terday. So there was mfld disappoint- 
ment when be only announced a con- 
sultation exercise. Even so, the Bank 
of England's consultation process 
looks a formality. Investors should 
soon he able to borrow and laid gov- 
ernment bonds freely. The gilts mar- 
ket will then enjoy greater liquidity 
and investors will find it easier to go 
short 

A parallel review by tbe inland Rev- 
enue is expected to lead to interest on 
gilts being paid gross of tax Mean- 
while, the Treasury's current exanri- 


The chancellor's decision to leave 
duty on beer and spirits unchanged 
was oof the best the drinks industry 
could have hoped far. A cut in duty to 
help breweries fend off the impact of 
cross-border shopping would have 
been ideal - but the government was 
never likely to yield to their special 
pleading. The outcome was at least 
better than the feared indexation in 
line with hrfl«Hon J which would have 
ariiferi appreciably to breweries’ woes. 
The sector perked up yesterday, with 
shares in Scottish & Newcastle and 
Whitbread rising by 2 per cent each 
and Bass by L5 per cent 
This follows a burst of ontperfonn- 
ance in the past few months which 
has ltft Whitbread and S&N standing 
on a premium to the market, despite 
expectations of lower than market- 
average earnings growth. The re-rat- 
ing reflects the higher valuation inves- 
tors are prepared to give the brew- 
eries’ retailing activities, as well as a 
general shift towards consumer stocks 


Venture capital' :l .-‘f r . 

Ffcr some years tbegovernraent bps. 
been trying, with limited effpctj.to 
- improve tire lot of thetJK$ 
talised small company sector. The 
changes -to the venture capital tn*£ 
schema announced ytestariay ataaUd 
goa to ag wuy to Improving- their pras- 
pects. The revised scheme goes ^further 
fa meet ti» interests ot investors, wear 
tore capitalists and the growing com- 
panies themselves. £s A result, -the 
government's target of attracting 
£&5bd investment into the sector over 
the next three year$' looks achievable. 

Ifar-toireista^ 

breaks offered , wifi prove attractive 
enough to ensure a study .flotoof 
funds. Such investi a a n ts wffl be risky, 
but the vBntore.capifal groups' exper- 
tiseandbroadpc^dioapprOTch 
shniiM fimft the' emgeis. As for th» 
companies, , the scheme should CH a 
widely recognisedi^a^m timir flmdmg 
requirements : Easf -growing groups 
without sjgnHtatm assets often find it 
difficult to bannwrftqm tanks, but are 
too small to approach ihe Efew of SL 
Now they will benefit not tost from 
urgently needed capital, but also from 
experienced venture capitalists' 
advice. •. • 


BTR 

Bill’s trading srateromt contained 
no information so startling as to bring 
the shares- hwhfc -into fe i rou r — that 
would be a tall order after three 
months during which they fell 28 per 
emit But the feet that It was issued at 
all is enemnagtog: it shows that BTR 

is iMconring responsive to investors' 

concerns about its communications 
policy, or rather lack of it Without 
such a statement there would have 
been an information vend between the 
interim statement in September and 
the ton-year figures next March- a 
trading statement alone is not enough^ 
however the group needs to find a 
way of improving day-today contact 
with Investors and analysts without 
infringing anti-insider dealing rules. If 
that helped to assuage tbe City’s anxi- 
eties about the group's future, it 
would be a worthwhile investment of 

management tnw* 


■y c^fji 



Businessmen throughout Asia Pacific, the world's fastest developing region, need speedy access to the major h wwWJ 
airports, no matter where thqr live - and distances can be vast. 

To meet these commuter needs IPTN, the Indonesian aircraft manufacturer; has just unveiled the N250, a twin-engined turbo 
prop aircraft with up to 68 seats. For maximum performance and reliability, it is equipped with a Misroi^Dowiy 
gear system and Dowty Aerospace propeUers and key hydraulic equipment - a components package worth some 
US$100 million over the expected life of the aircraft. Without Dowty, Asia PariBc businessmen would be slower off the mark. 
Dowty is one oI TI Group's three specialised engineering businesses, the others being Bundy and John Crane 
Each one is a technological and market leader in its field. Together their specialist skills enable 
TT Group to get the critical answers right for its customers. Worldwide 



TI GROUP 


WORLD LEADERSHIP IN SPECIALISED ENGINEERING 

Ry farther mfotmarkrn about die TT Group, con tag the Department of Public Affairs. TT Group pic, Lunboum Goutl Ahin grf m. Qj u>u qfl4 IUH. F- C i 1 






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22 

Acorn 

10 MY Holdings 

22 

Aeroshucts Hambte 

10 Macquarie Bank 

19 

Anglo American 

19 Maraton Thompson 

23 

Attwoods 

21 Memory Corporation 

23 

Avesco 

21 Mercury Comms 

10 

B DA Holdings 

23 Metan Mining 

16 

BP 

IS Mitsubishi 

13 

BTR 

IS Murray Enterprise 

21 

CF Fret Boston 

18 NEC 

19 

Cartsberg 

16 Neepsend 

22 

Codelco Chile 

15 NIkko Securities 

19 

Coles Myer 

19 Nomura Securities 

19 

Conrad 

22 SLP Consultancy 

22 

Daiwa Securities 

19 Serta 

16 

Dartmoor 

21 Severn Trent 

21 

Deutsche Babcock 

16 Shanks & McEwan 

21 

Du Pont 

8 Smger 4 FriecBander 

22 

Ftnnalr 

TS Steel Auto of India 

19 

Goldman Sachs 

16 T&N 

15 

Hampsoalnds 

23 Tops Estates 

21 

Hfaidafcw Inds 

19 TunataH 

23 

KJefnwort Benson 

IB Vmythai 

19 

Kode 

21 Yamaichi Securities 

19 


Market Statistics 

^Annual reports sendee a 
Benchmark Sort bonds 
Bond futures and options 

Bond prices and yieUs 
COTmrxftjes prices 
Dntdanda arewmced, UK 
B*S O^rancy rates 
Eurobond prices 
FUed interest Indices 
FT-A WWld mrSces Bar* » 
FT Gotd Mines Index 
FT/ISMA *nl bond ®® 

FT-SE Actuates Mflces 


26-27 

Foreign BWhange 

30 

20 

Site prices 

28 

20 

Life equity options 

25 

20 

London share sente 

28-27 

24 

London bad! options 

25 

21 

Managed funds sonta 

28-29 

30 

Money notate 

30 

20 

Now Ml bond Issues 

20 

20 

New ttirk share sarrics 

32-33 

( PSflB 

Becert Issues. UK 

25 

25 

Short- tern lm rates 

30 

20 

1 B Interest rates 

20 

25 

Worid Stock Markets 

31 


Chief price changes yesterday 


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lacrfedntQUC W-27 

Liinai 1134 - 32 

twcto(v«*>» 

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bum HUM 478 + 1* 

Mgcttda Pnarm 2013 + At 

Molt ScU 2260 + 120 

MtaalPaH 700 + 21 

SON MBfeiOT 

483+18 

FaB* 

kfetidta Qsp 1580 - 80 


Bar & WAT A 25* 

BerteteyOP 373 

BnAsnalUb 248 

HaytwtM* M® 

Lfitsr 22 

Magnum Power 1» 

Menton TbnRBn 292 

PBdngton 171 

TAH ! ® 

Tojta Woodrow 11? 

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For a wealthier Lusines 
and a keal tlner life 


jAune D.iviJ R.^ crSl , n „„ 293262 

Telferd. 


IN BRIEF 


Credito Italiano 
alters bid terms 

Credito Italiano last night promised to improve the 
terms of its proposed bid for Credito Romagnolo by 
offering further guarantees on the Bologna bank's 
independence, protection of minority shareholders' 
rights, and dividend policy, 

Credito Italiano did not say whether it would 
increase the price of L19.000 a share, proposed a 
month ago. Trading in Credito Romagnolo’s shares, 
suspended on Monday while the two sides discussed 
developments with the stock exchange authorities, 
will begin again today. Credito Romagnolo is worfc- 
ingon a defensive merger with another Bolognese 

Deutsche Babcock hopes to pay dividend 

Deutsche Babcock, the German engineering group, 
reported preliminary gross profits of about DM90m 
($57.7m), up from DM62m last year, and said it 
hoped to pay a dividend after a six-year break. Page 
16 

Cartsberg profits fall 10% 

Carisberg. the Danish brewery group, recorded a 10 
per cent fell in full-year group net profits, to 
DKrSSSm ($!45m). Page 16 

Anglo American ahead 

A broadly -based improvement helped South Africa's 
Anglo American Corporation, the world's biggest 
gold producer, to announce a 27 per cent increase in 
attributable earnings. Page 18 

American General confirms Franklin talks 

American General, the Houston-based life insurance 
group, confirmed it is in talks to buy Franklin Life, 
a su b sid i ary of American Brands, in a deal under- 
stood to be valued at about $i.2hn. Page is 

Moody's predict slight Japanese upturn 

The long slide in the fortunes of the “Big Four” Jap- 
anese securities companies is over, according to a 
report to be published later this week by Moody's, 
the US credit-rating agency. Page 19 

Walt Disney bond sees strong demand 

Walt Disney made a rare and successful appearance 
in a busy eurobond market yesterday, launching a 
$30Qm offering of three-year bonds which met 
strong demand from European retail investors. 

Page 20 

Attwoods reveals Cleanamay plan 

Attwoods, the UK waste management company 
fighting a hostile £39 lm (5641m) takeover bid from 
Browning-Ferns Industries of the US. has agreed to 
sell its UK business to Cleanaway, a waste manage- 
ment joint venture, if the BFI bid fails. Page 21 

Redundancy costs depress Severn Trent 

Severn Trent, the UK water company, has 
announced plans to cut 760 central office jobs. The 
exceptional charge depressed Severn's pre-tax prof- 
its by 26 per cent Page 21 

Waste services help Shanks & McEwan 

A strong performance by the waste services divi- 
sion offset further disappointing results from the 
Rechem hazardous waste business and helped 
Shanks & McEwan of the UK report a 5 per cent 
increase in first-half pre-tax profits. Page 21 

Companies in this issue 


. FINANCIAL TIMES 


COMPANIES & MARKETS 


©THE FINANCIAL TIMES LIMITED I9M 


Wednesday November 30 1994 


ANIXIiEl 

Global Provider of 
Structured Networking Solutions 
Tel: 01753 686884 


Chairman and chief executive appointed from within in first shake-up since 1992 coup ousted Horton 

BP board in big reshuffle 


By David Lasceiles, 

Resources Editor 

British Petroleum is to promote a 
new chairman and chief execu- 
tive from within its ranks in the 
first big reshuffle since the 
boardroom coup of 1992. 

Lord Ashburton, the chai rman 
who led the coup against the for- 
mer chairman and chief execu- 
tive Mr Robert Horton, is to 
retire next July L 

He will be succeeded by Mr 
David Simon, the current chief 
executive. He in turn will be suc- 
ceeded by Mr John Browne, head 
of the company's exploration 
arm. 

Lord Ashburton had always 
intended to step down after three 
years as chairman, and the 
changes announced yesterday 
were “an example of continuity'’. 
The timing of the announcement, 
on Budget Day, was dictated by 


the need to inform stall before a 
top-level planning session for 
1995 which begins tonight 

Those involved in the changes 
stressed that they did not imply 
any shift In the strategy which 
BP set itself after the ousting of 
Mr Horton. This is based on a 
drive to reduce the company's 
large debts, tighten the integra- 
tion of Its operations, and 
achieve “disciplined growth". 

All the executives involved in 
the reshuffle have been closely 
involved in managing BP’s recov- 
ery from the losses which 
resulted from Mr Horton's expan- 
sionist strategies. 

Mr Simon, who took over as 
chief executive in 1992, will 
become a non -executive chair- 
man, spending three or four days 
a week at BP. He said it was 
important to separate the role of 
chairman and chief executive. Mr 
Browne, who is 47, has held a 


variety of posts at BP including 
group treasurer. Most recently be 
beaded a successful expansion of 
the company's oil and gas 
reserves. 

The new head of exploration 
will be Mr Rodney Chase, the 
managing director with responsi- 
bility for the western hemisphere 
and corporate affairs. 

Mr Russell Seal, chief executive 
of BP Oil. the downstream arm, 
will take on a new set of respon- 
sibilities to oversee the further 
integration of the group. His posi- 
tion wifi be taken by Mr Rolf 
Stomberg who heads BP'S Euro- 
pean oil operations. 

The announcement of the 
changes comes at the end of a 
year in which BP’s finances have 
staged a solid recovery. 

In the first quarter, the com- 
pany paid its first dividend 
increase since the coup, and by 
the third quarter it had reduced 


its debts from SlGbn to around 
flObn. The company has also 
been boosted by substantial ofi 
discoveries in Colombia and west 
of Shetlands, as well as a recent 
gas find in Vietnam. 

Mr Browne intended to seek 
further growth for the company 
by emphasising the role of gas. 
He also saw opportunities to 
“deepen" HP’s position in the 
refining and downstream mar- 
kets, such as in eastern Europe 
and Asia 

BP’s chemicals business bad 
undergone expansion which 
would enable it to take advan- 
tage of the current upswing in 
chemical markets. 

Mr Simon said that BP’s divi- 
dend policy would continue to be 
reviewed on a a quarterly basis. 
“We would like to progressively 
grow the dividend if we have a 
sustainable financial perfor- 
mance,” he said. 



F 

CO* 


Ljdh van dar Mmt 

Just around the corner: John Browne and David Simon succeed in July 


UK conglomerate forecasts ’satisfactory’ result J&N makes £100m asbestos charge 

q BTR: yet to recover lost ground 

-®-V Av relative t 0 the FT-SE-A AU-Shm index By Simon Davies in London £100m of these claims, but T&N the OS Centre for Claims Resain 

to g m g m . ns — ~ — ... — -4-160 had now used most of its cover. tion, on behalf of 20 members 

AT iC/^r no /yVAiu. ili-140 T&N, formerly one of the UK’s The provisions will come as a and the share of costs is relate* 

kAr “ VVH Y.|iL m largest asbestos suppliers, yes- blow to the group, which was to the number of claims againsl 

10S ... -r y-. “7 "T'.| "lA "IK jnM 130 terday announced a surprise hoping to put asbestos behind it, individual companies. 

, 100 |-ryV /“ “ L “ — ) T'l — Jl-f 'rl 120 £100m ($i64m) provision against and move forward with the Since the group announcer 

DrOIlIh «UT~ ~ ' “I 1 |V 1 *Al ii° future asbestos-related claims, DM300m ($201m) acquisition of a interim results in early Septem 

AT 90 ... .IrViL. J A l/ t - - J 100 just three months after a US majority stake in components ber the number of cases had dra 

A ” It on court ruling that indicated a manufacturer Knlbenschmidt, a maticafly surpassed forecasts, 

p Afl AAl*!! ' * 80 declining trend in claims. MetaDgeseUschaft subsidiary. Mr Hope said this was a result 

vUllVvl MM bo 1 — • — 1 — 1 — 1 — 1 — 1 — 1 — J — 1 — L — 1 L - U i - L J - L - LJ -- 1 f- 1 -* 80 TAN’S share nrice fell 3Su to The £100m reduction in TAN’S of an Increasing number of case* 


M ~ 160 

l-M 120 


By David Wkjhtnn in London 

BTR. the industrial conglomerate 
whose shares have fallen by more 
than a quarter in the past three 
months, issued a trading state- 
ment yesterday which failed to 
restore confidence in the City of 
London. 

However it did reassure the 
market that trading has not 
turned down in the second half 
and the shares added 2p to 287p. 

BTR predicted a “satisfactory” 
operating profit in 1994 with 
price increases and buying poli- 
cies mitigating the impact of raw 
materials cost increases. 

BTR's high margins have been 
the focus of City worries since 
September, when the shares fell 
12 per cent on the announcement 
of disappointing interim figures. 
These showed margins foiling 
from 15.7 to 152 per cent. 

Yesterday BTR said operating 
margins in the second half would 
show some improvement over the 
first half, though analysts 
pointed out that this would be no 
more than its normal seasonal 
pattem. 

BTR has been putting pressure 
on its suppliers to cut their 
prices, in response to rising raw 
materials costs and pressure 


as 

B0 I ■ — I 1 * ■ » *- 

Jan 1994 

Sovee: FT Graphite 

from its own customers. 

In a meeting with analysts. Mr 
Norman Ireland, the chair man , 
stressed the company's commit- 
ment to improving margins but 
said it might adopt a more 
low-key approach to the issue. He 
said: “BTR will achieve 
[improved margins] but not by 
announcing its success with 
trumpets and drums, but with 
violins and clarinets.” 

However analysts remain con- 
cerned about the outlook for mar- 
gins in the more competitive 
1990s. “They are more likely to go 
down than up,” commented one 
analyst 

Analysts also complained that 
the company gave no further 
insight into management succes- 
sion following the announcement 
last week that Mr Bob Faircloth 
would be retiring as chief operat- 
ing officer. 

In its statement the company 
predicted increased earnings in 
the full year (hough it pointed 
out that earnings per share will 
be diluted by the exercise of war- 
rants which will increase the 
average number of shares in 
issue by 6 per cent. Analysts are 
expecting earnings per share to 


Nov 1984 86 88 90 92 94 


be little changed. 

This year BTR has decided to 
suspend the annual distribution 
of warrants which some institu- 
tions have criticised as a rolling 
rights issue that dihites earnings. 

The trading statement reported 
“buoyant order positions and 
profit performance” in a number 
of BTR’S US manufacturing com- 
panies, particularly Fasco 
Motors, Fexnord, Plastics Packag- 
ing and the Meter Group. But 
these have been partly offset by 
the problems of its Denver bag- 
gage handling contract, difficult 
market conditions at Weavexx 
and further rationalisation costs 
at AllsteeL 

In the UK, BTR has seen “slow 
growth" throughout the year but 
most of its industrial manufac- 
turing, automotive and construc- 
tions are up on last year. 

in spite of the upturn in conti- 
nental European car production, 
BTR reports difficult markets in 
automotive, valves and batteries 
but predicts “profitable growth” 
in 1995. 

BTR said it decided some 
weeks ago to issue an annual 
trading update at this stage. 

Lex, Page 14 


By Stmon Davies in London 

T&N, formerly one of the UK’s 
largest asbestos suppliers, yes- 
terday announced a surprise 
£100m (Si 64m) provision against 
future asbestos-related claims, 
just three months after a US 
court ruling that indicated a 

declining trend in claims. 

T&N*s share price fell 35p to 
186p by the close of trade, knock- 
ing £i76m off the company’s 
market capitalisation, as TAN’S 
asbestos-related past continued 
to overshadow its successful 
automotive components and 
engineering operations. 

Mr Colin Hope, chairman, yes- 
terday said that T&N had paid 
£25 Dm of compensation before 
this latest charge. Insurance 
companies had met around 


£l00m of these claims, but TAN 
had now used most of its cover. 

The provisions will come as a 
blow to the group, which was 
hoping to put asbestos behind it, 
and move forward with the 
DM300m ($201 m) acquisition of a 
majority stake in components 
manufacturer Kolbenschniidt, a 
MetaDgeseUschaft subsidiary. 

The £100m reduction in TAN’S 
shareholders fluids will increase 
its gearing from about 50 per 
cent to more than 60 per cent, 
increasing the likelihood that it 
will fund the Kolbenschmldt 
acquisition through a rights 
issue. 

The latest asbestos provisions 
relate to a rise in the number of 
asbestos-related injury claims 
before the August court ruling. 

These claimji are hanrffad by 


the US Centre for Claims Resolu- 
tion, ou behalf of 20 members, 
and the share of costs is related 
to the number of claims against 
individual companies. 

Since the group announced 
interim results in early Septem- 
ber the number of had dra- 
matically surpassed forecasts. 

Mr Hope said this was a result 
of an increasing number of cases 
from sectors where T&N had 
greater exposure, such as con- 
struction and process industries. 
He was adamant that this could 
not have been foreseen. 

In addition to the £100m 
charge, T&N is likely to carry an 
annual provision of between 
£30m and £40m, compared with a 
£2lm provision in 1993. How- 
ever, Mr Hope said this figure 
should decline from 1996. 


Kleinwort to advise on Chile sale 


By Nicholas Denton In London 

Kleinwort Benson, the UK 
investment bank, this week 
begins advising Codelco Chile, 
the state copper producer, on 
the privatisation of its $500m 
Toeopilla power generating divi- 
sion. 

The Toeopilla sale is set to be 
the largest electricity privatisa- 
tion in South America since 
Argentina completed its sell-off 
and competition between advis- 
ers was intense. 

Kleinwort emerged from a field 
of 17 investment banks and a 
shortlist of three that Included its 
UK rival on electricity deals, NM 


Rothschild, and CS First Boston 
of the US. 

Codelco and Kleinwort have to 
decide on the stake to be offered 
to outside investors, expected to 
he a majority, and the method of 
sale. The management of the 
Chilean state company are under- 
stood to prefer an offer for sale 
but a trade sale to an interna- 
tional electricity company is also 
a possibility. 

Kleinwort said it expected to 
complete a review of options by 
early 1995 with a view to a trans- 
action in the late spring or early 
summer. An international offer- 
ing would have to be timed to 
avoid clashing with the sale of 


William Dawkins reports on attempts at cheer in Japan 

lor Blur between a 


C orporate Japan lets its 
hair down this week for 
the start of annual bonen- 
kai, or “forget the year”, celebra- 
tions. 

Executives have less reason to 
forget this year than last, when 
they were at the bottom of a 
record tour years of profits 
decline. The Japanese economy 
started to pick up early this year 
as did corporate profits. 

However, elements of previous 
Japanese recoveries, a strong rise 
in capital spending and a sus- 
tained surge in domestic demand, 
are absent So beer rather than 
champagne is called for at this 
year's bonenkai. 

Results for the first half were 
slightly better than many compa- 
nies expected. Overall, quoted 
companies, excluding financial 
businesses, reported a 3 per cent 
rise in recurring profits, before 
tax and extraordinary items. 

This is the first time listed 
companies have managed to lift 
profits on falling turnover - 
down 2 per cent in the first half - 
for 40 years, according to James 
Capel Pacific. For the full-year to 
March, companies expect 8 per 
cent growth in recurring profits 
on a l per cent decline in turn- 
over. 

There are two reasons to be 
cautious. First, the recovery 
corns from a very low base, so 
earnings per share still languish 
at levels last seen 15 years ago. 
Second, it contains a large export 
component 

“On the strength of these 
results, it is not clear yet that the 
domestic economy has got itself 
into a self-sustaining recovery," 
adds Mr Jason James, strategist 
at James Capel Pacific. 

A look at the interim period’s 
winners and losers explains why. 
The best performers were the big 
integrated electronics firms, 
whose chipmaking profits have 
surged on demand from the US 
personal computer market Steel- 
makers saw increased losses but 
predicted a sharp re'eovery 
thanks to demand from China 
and Us Asian neighbours, while 


This onnouncrmenl appears of a matter of record only. 


shares in the UK’s national grid 
and generating companies, and 
several other ek£tridty privatisa- 
tions scheduled for next year. 

The valuation of Toeopilla 
depends heavily on the contract 
it strikes with Codelco, which 
consumes two thirds of its out- 
put. However the coal and oil 
fired power station's capacity of 
570MW points to a worth of about 
6500m. 

The outcome of the Toeopilla 
“beauty contest” between invest- 
ment banks reinforces the domi- 
nance of the electricity sector by 
Kleinwort and NM Rothschild 
since they worked on UK electric- 
ity privatisation. 


November, 1994 


shaky past and 
an uneasy future 


airlines were lifted by healthier 
overseas business travel. 

Losers were companies in com- 
modity-type businesses unable to 
put up prices, such as watchmak- 
ers and video game producers. 
Meanwhile, financial companies 
continued to be burdened by bad 
debts and declining domestic 
loan volumes. 


<zep 

PfcJNM TO FcfZfiET FORI 
OF LOlW &SULU 



For the most part, the purely 
domestic companies able to show 
high growth over this period are 
small, unquoted service busi- 
nesses - such as discount retail- 
ers, mobile telephone groups and 
business services - whose results 
are not generally published. 

The patchiness of Japan’s cor- 
porate recovery invites the ques- 
tion of whether domestic demand 
will pick up in time to compen- 
sate for an eventual US slow- 
down. 


The outlook for two big compo- 
nents of demand, corporate 
investment and consumer spend- 
ing, is not bright. Japanese 
industry, even in the upturn, is 
only running at 72 per cent 
capacity, the lowest since 1976, 
which does not bode well for cap- 
ital spending, now in its fourth 
year of decline. 

The moral of all this is that 
western fund managers, who 
have been pouring cash into 
Tokyo this year in the hope of 
getting in on the earnings recov- 
ery early, may need to be more 
selective than in the past, warns 
Mr Alan Livsey, strategist at 
Kleinwort Benson in Tokyo. 

The market's average price 
earnings ratio, of 70 times this 
year's earnings, a level last seen 
in early 1987, is more of a func- 
tion of low earnings than a sign 
of high profits expectations, he 
warns. 

At best, recurring profits could 
double over the next three years, 
but there will be a bigger than 
usual difference between leaders 
and laggards. 

Fast-growing niches in the ser- 
vice sector, high technology 
stocks and exporters to booming 
east Asian economies, can be 
expected to outperform, say ana- 
lysts. Hie traditional manufac- 
turers that used to be the pillars 
of Japanese industry will have a 
struggle to raise profits, as they 
face competition from iow-cost 
rivals. 

For maturing economies, it is a 
familiar pattern. For equity 
investors, it means a longer than 
usual read through piles of ana- 
lysts reports before deciding 
where to place their cash. 


FROGMORE ESTATES PLC 


£150,000,000 

Revolving Credit Facility 


Arranger 

BARCLAYS SYNDICATIONS 


Funds provided by 


Barclays Bank PLC 

Uoyds Bank Pic 

N M Rothschild & Sons Limited 


Dresdner Bank AG London Brandi 


Midland Bank pic 
The Royal Bank of Scotland pic 


Bayerische Landeshank Girozentrale, London Branch 
Bank of Ireland International Finance Limited Clydesdale Bank PLC 


Credit Lyonnais 


Kredietbank N.V., London Branch 


Na tional Westminster Bank Pic Westdeutsche Landesbank Girozentrale 

London Branch 


Agent 

Barclays Bank PLC 


: * ' 


i 




16 




" ... . 
• *r*- 2 ■<;•'• ... ' 


* FINANCIAL TIME S WEPNESPAYNOVEMBE^-y.^ .- 

INTERNATIONAL COMPANIES AND FINANCE : ~ 


Deutsche Babcock hopes 
to pay dividend this year 


By Michael Lindemann 
in Bonn 

Deutsche Babcock, the German 
engineering group which has 
been battered by the recession, 
reported preliminary gross 
profits of about DM90m 
(857.7m), up from DM62m last 
year, and said it hoped to be 
able to pay a dividend after a 
six-year break. 

“We have a profit which is 
more or less the required size 
[For a dividend payment],” 
Deutsche Babcock said after 
the company reported prelimi- 
nary figures for the year end- 
ing September 30. 

Ordinary shareholders last 
received a dividend, of DM650, 
in 1988. A final decision about 
this year’s dividend depended 


on the agreement of the super- 
visory board, the company 
said. 

Fierce competition in all 
areas of its business - which 
range from power-station tur- 
bines to environmental tech- 
nology - had put the company 
under intense pressure, the 
company said. 

Turnover for the year was 
unchanged at DM&2bn while 
new orders fell 9 per cent to 
DMkSbn, down from DM9.3bn. 

German clients, who are still 
feeling the effects of the reces- 
sion, ordered 16 per cent less 
during the review period. 

However, the company was 
able to keep its foreign orders, 
which represent 45 per cent of 
new business, steady at 
DM3.8bn. 


Deutsche Babcock said the 
new orders figures did nnt 
include a DMl.2bn contract for 
a brown coal fired power sta- 
tion in eastern Germany where 
planning approval has not yet 
been given. 

Deutsche Babcock said it did 
not know when work would 
begin on the project but said 
there was no risk that the proj 
ect would not go ahead. 

The company said it would 
be shedding a further 1,200 jobs 
over the coming year, bringing 
the workforce down to 35.000. 

Deutsche Babcock will have 
to spend a farther DMaOm on 
redundancy pay and other 
restructuring which has 
already cost the group 
DM355m over the past three 
years. 


Goldman secures fresh equity 


By Patrick Harverson 
in New York 

Goldman Sachs. the 
privately-owned Wall Street 
investment bank, has secured 
S250m in equity capital from a 
Hawaiian institution, in a deal 
that boosts outside ownership 
of the firm above 20 per cent 
for the first time in its 125-year 
history. 

The injection of fresh capital 
comes at a crucial time for 
Goldman. This year, its earn- 
ings have dropped sharply 
because of unfavourable condi- 
tions in investment banking 
and trading businesses world- 
wide. 


The bank has also seen a 
larger-t han - normal number of 
partners retire, including sev- 
eral senior executives. 

The bulk of Goldman's capi- 
tal comes directly from the 
pockets of its partners, so any 
dilution of its partnership base 
has serious long-term implica- 
tions for the firm. 

Goldman, like other Wall 
Street investment h anks and 
securities houses, needs a large 
reservoir of capital to conduct 
much of its business. Partly to 
shore up its capital base, 
Goldman named a record num- 
ber of new partners earlier this 
year. 

The S250m investment by the 


Kamehameha Schools/Bishop 
Estate, a Hawaiian educational 
trust, will entitle it to between 
4 per cent and 5 per cent of 
Goldman’s annual profits. 

The trust, which was estab- 
lished in 1884 on the death of a 
Hawaiian princess, mainly 
comprises land holdings 
throughout the Hawaiian 
islands. It made a similar 
investment in Goldman Sachs 
two years ago. 

The Kamehameha deal 
marks only the fifth time 
that non-partners have 
invested in Goldman, and lifts 
outside ownership of the firm 
to 20.5 per cent from 16.5 per 
cent. 


Metall buys back smelter stake 


By Bernard Simon in Toronto 

Metall Mining has bought back 
from Germany's Metaligesell- 
schaft. the Toronto-based 
company's former parent, a 35 
per cent stake in Norddeutsche 
Affmerie. which is Europe's 
biggest custom copper 
smelter. 

Metall will pay the ailing 
German industrial group 
CSI52m i US$1 10m), including 
CS40m in cash and the return 
of a CSll2m promissory note. 

The deal stems from Metall- 
gesellschaft's disposal earlier 


this year of its 51 per cent 
stake in MetalL As part of the 
sale, Metall was obliged under 
an agreement with Nord- 
deutsche’s other two share- 
holders to transfer its stake in 
the copper smelter back to 
MetaUgeseliscbaft. 

Metall said that the other 
shareholders. MIM Holdings, 
the Australian mining group, 
and Germany's Degussa. had 
agreed not to exercise their 
right of first refusal on Metall- 
geseHschafVs stake. 

Mr Klaus Zeitler, Metall's 
president, said yesterday that 


the repurchase of the Nord- 
deutsche stake '‘removes the 
last element of uncertainty 
arising from Metall’s former 
relationship with Metallgesell- 
schaft”. 

Metall's share price gained 
38 cents in early trading on the 
Toronto stock exchange yester- 
day to CS1150. 

Norddeutsche produced 
350.000 tonnes of copper cath- 
ode in the year to September 30 
1993. most of which was fur- 
ther processed into various 
shapes and rod for manufactur- 
ing copper products. 


Fall in net 
financial 
income hits 
Carlsberg 

By Hilary Barnes 
in Copenhagen 

Carlsberg, the Danish brewery 
group, recorded a 10 per cent 
fall in group net profits, to 
DKr885m ($145. lm) from 
DKr982m in the year ended 
September 30. 

The decline was attributed 
almost entirely to a fall in net 
financial income, to DKrl24m 
from DKr46om in the previous 
year. This reflected unrealised 
losses on holdings of Danish 
bonds and shares. 

The group proposes an 
unchanged dividend of DKr3 
per share. 

Operating profit rose 6 per 
cent - “slightly more than 
anticipated” - to DKrl.lobu 
from DKrI.08bn. on sales up to 
DKrl6.91bn from DKrl5.59bn. 

The group said total beer 
sales (which include the 
Tuborg as well as the Carls- 
berg brand) were up 10 per 
cent to 30m hectolitres, of 
which 82 per cent was sold 
outside Denmark. 

The market reacted by 
knocking DKrl7 off the Carls- 
berg A share, which fell to 
DKr263. 

Brewing associates outside 
Denmark - including Carls- 
berg-Tetley in the UK. and 
breweries in Germany. Italy. 
Portugal. Malawi, Malaysia 
and Hong Kong - showed an 
overall improvement in oper- 
ating results. Results from 
Danish operations were 
unchanged. 

The group anticipates “a 
very high level of activity in 
years to come”, as it consoli- 
dates its position as a leading 
presence in international 
brewing. 

Mr Poul Svanholm. group 
chief executive, said Carlsberg 
was still considering acquiring 
breweries abroad, but had no 
immediate plans. 

International sales are 
expected to continue to 
expand. Asian markets, 
including China, are particu- 
larly solid for the group. How- 
ever. it warns that substantia] 
investments will be required 
in marketing and distribution. 
“These investments are not 
expected to have a positive 
effect on earnings until a later 
stage,” it said. 


Rudloff group begins 




By Nicholas Denton 

Mr Hans-JOrg Rudloff, former 
head of CS First Boston in Lon- 
don and one of the founders of 
the euromarkets, said his new 
venture, MC Securities Geneve, 
would begin operations tomor- 
row in Geneva. 

It will conduct advisory work 
in Europe with a particular 
emphasis on the former com- 
munist states of eastern 
Europe. It will be pitted 
against CS First Boston, which 
dominates eastern Europe’s 
securities business, 

“We are no more vulnerable 
than before,” said Mr Ian Mol- 
son, co-head of investment 
banking in Europe for CS First 
Boston. Mr Rudloff said of his 
recruitment drive: “CSFB is 
not the target company”. 

However, the opening of MC 
group for business coincides 
with the disclosure that 
another leading CS First Bos- 


ton ex ec uti ve had joined the 
five or more that have defected 
to their forma manager and 
the MC group. 

Mr Charles Harman, head of 
investment banking for 
Poland, the Czech Republic, 
Hungary and other former 
Soviet satellites, wQl become 
head of corporate finance at Mr 
Runoff’s new company, which 
is backed fay Banque Bnnefles 
Lambert of Belgium. 

Mr Hannan’s move raises 
the prospect of further depar- 
tures from CS First Boston's 
east European operations. 

Mr Zdenek Bakala, former 
head of CS First Boston in 
Prague has left to set up Patria 
Finance, a domestic securities 
home; and Mr RodtafTsafeJ he 

=*wri gmrrp friends M backed 

the venture and taken a 25 per 
cent stake. 

Other east European execu- 
tives have strong personal loy- 
alty to Mr RucCofi, stemming 



the time, bnt axee mtiyes say 
the region. & cQhtrthating sig-' 
nificant profits tn near bt 
which faiHnp bond markets 
have hit the jgtBrnafifmalbgsi- " 


Hans-J3rg£mfia£fi ‘CSF’Bts 
not the target company 1 

from his role as the force 
behind CS First Boston’s move 
into eastern Europe. 

The strategy was derided at 


Hungary to privatise energy sector 


By Virginia Marsh in Budapest 

Hungary’s new socialist-led 
government has ann ounced 

sweeping privatisation plans 
for its energy sector. They wifl 
transform the sector from full 
state ownership to one of the 
most privately-controlled and 
liberalised in Europe over the 
next three years. 

The government is to sell off 
100 per cent - min us one 
golden share - of its five 
regional gas suppliers. It will 
also sell the non-nuclear elec- 
tricity generation and power 
supply companies held by 
MVM. the state electricity 
monopoly. 


MVM, which had a book 
value of FtSTLSbn (S6.67bn) at 
the end of 1993, wiQ retain frail 
control of the Paks nuclear 
plant and the national grid, 
but will sell off 50 per cent, 
mhuig one VOte, Of its rational 
distribution centre. 

in addition , it arms to sell Off 
30 per cent of MOL, the oil and 
gas monopoly, to strategic 
investors and to reduce state 
ownership to 25 per emit phis 
one vote. 

The government's decision 
marks a significant efranp* 
from the previous c o nse rv a tive 
administration, winch aimed to 
keep a majority stake in most 
companies in the sector. Hie 


government hopes the sales 
will help it raise between 
$1.5bn and (2bn over the next 
year. 

The gas companies, which 
together have registered capi- 
tal of FtatShn, are expected to 
crane up fra: sale first Hie gov- 
ernment, which . is being 
advised on the sale by UK mer- 
chant bank NM Rothschild, 
fljniB to sell 50 per cent, pins 
one vote, to strategic investors 
via an international tender due 
to be held early next year. 

The remainder would later 
be sold to institutional and 
local investors and floated an 
local, and international stock 


A *rfmffar strategy is expec- 
ted for -MVM. The first tenders 
for stakes te ste regional power, 
supply rampgriTpa are likely In. 
the first half of next year, 
according to Schraders, the UK 
merchant bank advising em the 
gate. ‘ 

- -While the derision: to sell off . 
majority stakes is expected to 
boost the price cf <xonpantey 
the government has. yet .to 
agree on politically sensitive 
price increases-fn the sector. 

Domestic electricity and gas 
prices are well below world 
levels and would need to rise 
nigirtfi, -gutt y to- make the com- 
panies c om p eti tive and provide 
funds itar modernisation. 


Seita sell-off next year I Finnair raises FM500m 


Seita, the French state-owned 
tobacco company which manu- 
factures Gauloises and Gitanes 
cigarettes, will be privatised 
next year, the government 
announced yesterday, AP 
reports from Paris. 

The sale will probably take 
place in the second half of the 
year “or even earlier if possi- 
ble,” Mr Nicolas Sarkozy, a 
government spokesman, said 
after the weekly Cabinet meet- 
ing. 

The cabinet adopted a draft 
law setting in motion several 


reforms necessary before Seita 
can be brought to the market 

The decision followed an 
announcement by Mr Jose 
Rossi, the industry minister, 
on Monday that the govern- 
ment intends to pri v a ti s e the 
Renault vehicle group in the 
second half of 1995. 

Seita is the world’s foremost 
manufacturer of dark-tobacco 
cigarettes and one of the lead- 
ing cigar manufacturers. It 
also makes pipe tobacco and 
mafrhps, its total revenues In 
fiscal 1993 were S&39bo. 


By Christopher Brown-Humes 
In Stockholm 

Finnair, the Finnish na tio nal 
carrier, plans to raise about 
FMSOOZn ($mam) through an 
offer of up to i2m new shares 
to domestic and mtemafimat 
investors. 

Proceeds will be used to buy 
second-hand McDonnell Doug- 
las MD-80 aircraft to replace its 
DOS fleet The five-year invest- 
ment programme is worth 
about FMLTbn. 

The state will not participate 


in the issue, cutting its holding 
to 809 per cant (57.5 per. cent 
after ‘Ml dfluifan} from. 7L5 
per cent <68.9 per (teat after 
dflutioo). Klemwort Benson is 
global co-ordinator for the 
issue. - • 

Neste, the Finnish oil and 
petitKhemical group. Is also 
selling part : of its stake in 
Finnair. ’ 

to t& half year to. September 
'30 the airiine reported a better 
than expected pre-tax profit of 
FM298_9m, up from FM95-3m 
last time. 




. Mr Rffifloff was moved to (5 
Holding, CS -first Btaftfagfe . 
parent,, and last . 
year. - ' 

However, fee most inexatire : 
area tif aE for CS first Boston c 
has been sedbritiea trad ing in ; 
-Russia, *md Mr Baris .Jordan, * - 
head of the Moscow office, fa. 
not thought to be dose to Jfr 
■jjndkift- ’ — 

Further defections, if any, . 
are only likely to take plane 
after execnfives : receive their 
annual bonuses early next 
yaar. Mr Hannah has ftsgcne 
his payment ‘ 

: Mr Rudloff said he would 
hire' about 150 - staff over 15 
months for offices fa Geneva, . 
fftifi jjx London, where MC is . - 
gfiwHng the relevant UcenfflE 



(USS million) 

ASSETS 


Liquid funds 

241 S 

Marketable securities 

2.450 

Placements with banks and 


other financial institutions 

4.909 

Loans and advances 

10.517 

Interest receivable 

258 

investments in associates 

66 

Other Investments 

139 

Other assets 

242 

Premises and equipment 

440 


19,262 

UAMUT1ES 


Deposits from customers 

8.007 

Deposits from banks and 


other financial Institutions 

7.742 

Certificates of deposit 

383 

Interest payable 

193 

Other liabilities 

361 

Minority interests 

242 


16,920 

TERM NOTES, BONDS AND 



002 

SHAREHOLDERS' FUNDS 


Share capital 

1.000 

Reserves 

364 

Retained earnings 

73 

Current period profit 

95 


1,532 


19.262 

(Reviewed by Ernst & Young, Bahrain) 



CONSOLIDATED 

BALANCE 

SHEET 

(At 3Qrh September 1994} 


(US$ million) 








(9 month period to 
00th September 1 994) 


INCOME FROM OPERATIONS 

Net Interest Income 
Other operating income 

TOTAL INCOME 
OPERATING EXPENSES 
OPERATING PROFIT 
BEFORE LOAN IO& PROVISIONS 

Loan lass provisions 

PROFIT BEFORE TAXATION AND 
MINORITY INTERESTS 

Taxation on foreign operations 
Minority Interests In subsidiaries 

NET PROHT FOR THE PERIOD 

(Reviewed by Ernst 6 Young, Bahrain) 


s 

u 

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FINANCIAL TIMES WEDNESDAY NOVEMBER 30 1994 


17 


★ 


Astronomical cost 
has kept the future of 

personal communications 

up in the air. 




Today’s market is clamoring for 
truly portable, global personal com- 
munications. But the costs of such a 
system - costs that will ultimately 
come out of the consumer’s pocket - 
have remained dauntingly high. Until 
today. Because today we launch the 
Odyssey™ system, a constellation of 
medium-earth orbit (MEO) satellites. 
In a world in which most people lack 
access to even basic telephone service, 
this satellite-based mobile communica- 
tion system will provide convenient, 
effective, consistent communications 
to subscribers around the globe. And it 
will do so at a price that compares 


MEO virtually eliminates the voice delay of geostationary 
(GEO) satellites and minimizes the shadowing effect of 
buildings and other obstacles that interrupts low-earth 
orbit (LEO) and cellular systems. 


A 


Directed antenna coverage concentrates service on land 
masses worldwide. Dual-satelite coverage provides even 
greater assurance of reliable communications. 


FROM URBAN CENTERS TO 
THE MOST REMOTE CORNERS 
OF THE GLOBE 

The Odyssey handset, essentially a 
palm-sized earth station, will operate 
in both cellular and satellite modes. 
Where terrestrial service exists, the 
Odyssey system will augment it, regard- 
less of regional or carrier compatibility. 
Where it is absent or interrupted, 
your handset will link you directly 
- and transparently - to an Odyssey 
satellite. 


JOINT VENTURE OF TRW AND TELEGLOBE 

For more than three decades , , TRW Inc. has stood at the forefront of space communi- 
cations, enjoying a worldwide reputation built on innovation , reliability and techni- 
cal excellence. Teleglobe Inc., through its subsidiaries, operates one of the world’s most 
extensive digital telecommunication networks and is a quickly emerging leader in the 
global mobile arena. 

Together, TRW and Teleglobe create the drivingforce befnnd Odyssey. 


THE BEST VALUE FOR THE USER 

Simpler technology and faster 
start-up are scheduled to bring Odyssey 
into global service in 1999, before any 
other system. Superior service and 
minimal user cost will attract sub- 
scribers worldwide. 

RELATIVE COST OF SATELLITE SYSTEMS 


10-YEAR COST 


Licensing authority for the Odyssey 
system is expected in early 1995. Unlike 
other systems, it will use frequencies 
already allocated for this type of service 


and components derived from proven 
TRW technology. Initial start-up costs 
will be 60 percent lower than for the 
two other major systems in a recent 
study. * And Odyssey’s constellation 
price will be fixed. Estimating over a 
10-year period, replacement satellites 
for the other systems evaluated will 
give Odyssey an even more dramatic 
cost advantage. Just as importantly, 
subscriber projections indicate that 
Odyssey will offer the best value for 
the end-user. 

Today, TRW and Teleglobe forge 
a new alliance to launch Odyssey. 
For more information, please contact: 

North America & South America 

(New York) Tel.: 212 903 4267 
Europe (London) Tel.: 081 247 0123 
Asia (Hong Kong) Tel.: 852 845 1008 


Weve just 
brought it 
down 
to Earth. 


• “A feamAioDon al Sefedsd MolJlo Somite Conuriuifcadww^/tWnw' 

199-. T fel^Q>n««»n 

« iflW Odipsw Bee iroifon'wte d TRW Inc. Tetojjtotw . 
hcensctf uw 1 ' 


the adventure 


is just beginning 


ODYSSEY 








18 


FINANCIAL TIMES 


INTERNATIONAL COMPANIES AND FINANCE 


American General 
in talks to buy 
Franklin Life 


Cash crisis forces Grand [ kewspioest 

Union into restructuring ^ 


By Richard Waters 
in New York 

American General, the 
Houston-based life insurance 
group, is in talks to buy Frank- 
lin life, a subsidiary of Ameri- 
can Brands, in a deal under- 
stood to be valued at about 
$I.2bn. 

The deal could be the first in 
a series of acquisitions by 
American General, which last 
month outlined a plan to dou- 
ble its market capitalisation by 
the end of the decade. 

Mr Harold Hook, chairman, 
said the company, which is 
currently valued at S6bn and 
has total assets of $44bn, 
planned "two or three" signifi- 
cant acquisitions. 

American General is already 
locked in a hostile $2.6bn all- 
cash bid for Uhitrin, another 
US life company. 

The proposed purchase price 
for Franklin - which neither 
company would comment on. 
but which was confirmed by 
one person close to the deal - 
would value Franklin at 
slightly less than its book 


value, which stood at $1.3bn at 
the end of 1993. At this level, 
the deal would be very attrac- 
tive to American General, said 
Ms Margaret Alexandre, an 
insurance analyst at Salomon 
Brothers. Other insurance 
companies have generally been 
sold at between 0.9 and 1.5 
times book value. 

Fr anklin, with assets at the 
end of 1993 of S7.lbn and oper- 
ating profits last year of 5 238m , 
is am o n g the most profitable 
and best-capitalised companies 
in the industry. 

At nearly 13 per cent at the 
end of last year, its capital/ 
assets ratio was ahead of most 
competitors, according to Mr 
Patrick Finnegan of Moody’s, 
the US rating agency. The 
average ratio for the life com- 
panies tracked by Moody's was 
&S per cent. 

If successful, American Gen- 
eral is expected to use some of 
FYankiin's extra capital to 
reduce the purchase price of 
the deaL This echoes its plan 
to take capital out of Unitrin, 
which is also heavily -capital- 
ised by industry standards. 


By Tony Jackson in New York 

Grand Union, the struggling 
US supermarket chain, is being 
forced into financial restruct- 
uring by a cash crisis. The 
company has long-term debt of 
$1.4bn, mostly in the form of 
j unk bonds. 

Grand Union, which was the 
subject of a $1.2bn manage- 
ment buy-out from the 
Anglo-French financier Sir 
James Goldsmith six years ago. 
said cash from operations 
would be insufficient to meet 
interest payments due early 
next year. 

Mr Gary Hirsch. chairman, 


said he expected the company 
to remain in compliance with 
its debt agreements until Janu- 
ary 15. by which time it would 
propose a restructuring plan. 
Goldman Sachs and BT Securi- 
ties have been engaged as 
advisers. 

Mr Hirsch said: “We intend 
to move quickly in our discus- 
sions with our debt-holders, 
but will endorse only a 
restructuring plan which pro- 
vides for continuing full and 
prompt payment to all of our 
trade creditors." 

Grand Union, which has sold 
a number of stores in recent 
years, still operates 246 in six 


states in the north-west In its 
second quarter to October 15, it 
made profits of SI7.7to before 
cash interest payments of 

S3l. 7m. 

There was a net loss of 
$35 .9m against a loss of S20.2m 
the year before, on sales down 
1 per cent at $557m. Same store 
sales were down 3.6 per cent 

The company said it was re- 
examining its capital expendi- 
ture programme and had 
reduced its forward buy inven- 
tory. It said these actions could 
have an adverse impact over 
time, but were necessary to 
m a i ntain liquidity during the 
restructuring process. 


Volvo Aero joins 
BMW Rolls-Royce 
in engine project 

Swedish auto moti v e group AB Voiro sedd its 
aero engines unit Volvo Aaro would partsti- 
paie in a new jet engine project by Germany’s 
BMW Rolls-Royce for Che BR7I5 engine 
tateadfid for use in passenger aircraft, reports 


,,-rit j , ; 


lam of so-called camnrisskffl. fee income, " he' 
«m. He said it would fate 
repair a history ofmimnanagejnait-Mifl w^- 
. a Moated arganisatHW-; ^ ‘ 

: . Thai's load actor climbed to SUTper. 
from 655 per cant Hbwwer, Sfr Jtt 
said tot the sis new aircraft dee- tor 
in fhe m* year would .dapregfr 

. . . . i r i I. , ,i fn *"ft inn- 1 — rtf 


Occidental to buy Placid Oil 


Occidental Petroleum is to 
acquire Placid OH for about 
$350m, consisting of S175m in 
Occidental preferred stock and 
the balance in common stock, 
reports Reuter. 

Occidental said the purchase 
would add to cash flow imme- 
diately. and would not dilute 
earnings because of current 
production. 

Placid, the oil and gas 


operations of the Hunt femily, 
has exploration and production 
properties in the US, Canada 
and the Netherlands. 

Occidental said the Placid 
properties had proven and 
probable reserves of about 17m 
barrels of oil and 270bn cubic 
feet of natural gas. 

During 1994, daily production 
from these properties has aver- 
aged 6.000 barrels of oil 


and 100m cubic feet of natural 
gas. 

Placid has an approximate 39 
per cent interest in a pipeline 
system in the Dutch sector of 
the North Sea, which includes 
270 miles of mam and feeder 
lines. 

Occidental said the transac- 
tion was expected to be 
completed by the end of the 
year. 


"The project is reckoned to give Volvo Aero 
sales of about SKrihn (paam) at tbs same 
time as 100 new johs are created. If the engine 
is suocesgnl, sales might be twice that volr 
ume.” the Swedish company said. 

It did not specify the time period over which 
it re tfcnfatart the { pig? - Volvo.wffl make cm 
component, the totennediate compressor case, 
for the BR715. 

The BRJ15 is Volvo’s first engine prefect 
since the 1980s, although between the Late 
1970s and 3989 the company was involved in 
right ci vilian engine programmes. 

Singapore group boys . 
Four Seasons hotel 

The S in g ap ore-based hotel group Hotel Proper- 
ties is to buy the Four Seasons hotel to Mexico 
City, for 337.9m, Renter reports. 

The purchase is through the acquisition of 
Zopar, a division of Banque Paribas subsidiary 
Zofipar. Through a wholly -owned subsidiary, 
Innaobffiara National Mericana. Zopar owns 
the 243-room hotel which was opened to March 
and is managed by the Four Seasons Hotel 
Group. 

The acquisition will be effected through a 
newly-incorporated joint venture in which 
HPL will own 60 per cent of the share capital 
and a private company the rest. 


.- Mr Luc Perron at brtimrs HG A^^* 
“TMs is. ntwimmstd - there S a^ definite 
improvement In efficiency ft jack-up la. 
ttaffic growtiL* '-r.y- :.r 

Ranger Oil sells North 
Sea block stake > j 


20 per cent stake to an undeveloped 
the central North Sea to Shdl UK *nd Esse 
Ezpforation for about DSJC^nu. writes Ben* 
ardSmon to Toronto- - f ' ' 

v The block, known , as 29/fib, contains 


. _ __ m - The acquisition will be effected thrw 

Argentina seen as an appetiser for Brazil SSS^S^ 

Foreign entrants in Latin America’s food sector are far from sated, says David Pilling Swire Pacific forms 

joint vpntnrF 

W i nroirm Mimnanloc arc AmonP nthpr rmnnrtant for- nomic stability has revived savs Mr Ecclestone. “Baelev advantages - esueciallv in 


F oreign companies are 
gorging themselves on 
Argentine food produc- 
ers. The purchase last week of 
Bagley, an Argentine biscuit 
maker, by French group Dan- 
one, is the latest in a series of 
foreign Forays into the Argen- 
tine food sector. 

“When foreign investors 
think of Argentina, they often 
think of food,” says Mr Marcos 
Devoto, a Buenos Aires-based 
analyst with Santander Invest- 
ment. “It is considered the 
sexy sector." 

The Danone deal, in which 
France's biggest food group 
paid S240m for a controlling 
stake in Bagley, comes only 
months after the S250m pur- 
chase by RJR Nabisco, the US 
group, of 70 per cent of Terra- 
busi. Between them, Bagley 
and Terrabusi control about 
half the Argentine biscuit mar- 
ket, the tenth largest in the 
world. 

In September, Cadbury 
Schweppes gobbled up 80 per 
cent of Stani. a privately- 
owned Argentine confectionery 
group. It plans to use the local 
company to distribute its own 
brands and as a foundation 
from which to attack other 
regional markets, notably 
BraziL 


Among other important for- 
eign entrants have been Kraft, 
part of the Philip Morris group 
of the US. which bought 
ice-cream manufacturer La 
Montevideana; Italy's Parma- 
lat, which purchased La Vas- 
congada; and Chile’s Ambro- 
soll, which took over the 
Bonafide confectionery and cof- 
fee company. 

Nestle, which had also been 
wooing Bagley, has joined the 
t ray with the purchase of La 
Serenisima, a powdered-milk 
company, and two local cheese 
producers. 

Part of the strategy of such 
foreign newcomers has bees to 
bring new products as well as 
modem management and mar- 
keting techniques to local com- 
panies that, until the start of 
the 2999s, had been accus- 
tomed to operating in a cosy 
world behind high tariff walls. 

Since the opening up of the 
market, Argentines have devel- 
oped a taste for high-quality, 
well-packaged items - trigger- 
ing fierce competition to 
upgrade local brands. 

Recent arrivals such as Dan- 
one and Cadbury will join the 
fight for market share to a sec- 
tor that has “exploded", says 
Mr Devoto. The end of hyperin- 
flation and the return of eco- 


CHUGAI PHARMACEUTICAL CO-, LTD. 

Node* of an adjourned Meeting of the holders of the outstanding 

U.S£220,OOCUX)O 
1% per cent. Bonds 1997 
with Warrant* 

tosohscrihe far shares of common stock of Ghngri Pharmaceutical Co^ Ltd. 

Natter a bar by grtra char a Meeting of the holders rf the obme Bonds (die ’Bonfuldm 1 ) 
oonirnedbyChufflPhannarroncalCo^Uid. Ithc’kmet”) on Z4th November. 1994 by the 
ponce publhboj in chc Financial Tima on 2nd Novco ilm ; 1 994 end in dir LuxemW^rWoct 
on Ini November, 1994 was adjourned through tak of a quorum and that the a^ourned 
meeUniiof BoodhoUcn will be held at the often of I lnklatr«* & Peine*, far ringnm Howe, 
5*07 Qnsftam Street London ECZV 7/A on fttdby I6A December, [994 at / l JO am. 
(London dine) (or (he purpose of amridatnfl and, if thought fit. passing die following 
rerokutoo which will be proposed as an Eumdinary Resolution In accodmce with the 
provMcni of theTnur Deed third Jtdjune, 1993 (the Trust Deed") made Imamu the laucr 
and AMh Bank Trow Company of New York (the Tiumee'). 

EXTRAORDINARY RESOLUTION 

Thu chit Meetfnr of the bakbt of the auafamfiqg USSUOjOOOfiOO 1% per cent. Booth 
1997 (the ’Bonds') with Wanran m n£*czibc for sham of common hocV of Quqpri 
Pbannaeeurical Co, LnL (‘the bluer') crannxed by a Trusr Deed dated 3rd Jtatr, 1993 (dvt 
Tnaf EVecT) node berween die barer and Asahl Hard: Trasr Gtmpany of New York {the 
•Redra* Trosw*') HHUEBY RESOLVES THAT:- 

I) the Jwmpraeiutf AntM Bank (Nodestad) MV. (the -NewTiuoec*) In pbte of the Rcdttty 
Trustee by ibe lamer jwnraor ro J Ovd of Appotncncnf and Rcttnanr of Tiufeee, 
Appouemem of Qunbn and A m e ndment of Tran Deed I the Deed*) m be dated an at 
dx*n ICeh D«wntci. 1994, aid mined raon( die bm. die Ream* Traaree. the New 
Turn and The .'\iohl Bank, Ltd. acting ihnotii ks London branch be appnweib 
u) the anmdnaau.d' the Treat Deed pmumi Chaw 4 uf the Deed be approve d; 

U0 the Uaier be mthorised to ennr toco the Deed; aid 

hi erery ahngaom. aire ft faoon. nrtamn, coetjawoBe re nrnmpnim c in respea of the 
rights of riw Boadhokkn and the hrUen of the Caepura rekulog to the Bomb agxuor tbr 
h«e( tnwobed in nr rendong Enm the reran of pancraphi IL U) an! ill) of data lesofatma be 
iiKKramul* 

AVAILABILITY OF DOCUMENT'S 

Copies of the Tnttt Deed, a dnft Deed of Appninrmewt and Retirement of Trustee, 
AnMnaneiu af Canodan and AmentEnem of T!iuat Deed, die ftying and Wsttau Agency 
Avectnent dated 3rd Jane. 1993. a draft Sef^demenod Agreement to amend the Paying and 
Warner Agency A&eement and draft legal optnkim of each of Do Bran, B li da w n 
WesdeneL, Link brers fit Paine, and Mitsui fanfa Ubni & Meabuuyfolmeciaiit. sod 
racing certificate* may be obtained from, the specified office of any of the Paying Agent* 
given below. 

VOTING AND QUORUM 

1. Bondholden' atnmtcn t. dnren m the cottrenti cf the notice pddhW in the Financial 
Tunes on 2nd November. 1994 and m the Lnaembaigcr Wort on 3id November, 1994. 

I. The lyraum required k the *4 aimed Meeting will be rwo or mote persons presauhoUk^ 
Bondi or voting cauAcua or being ptomm (whatever the [tinc^Ml smounr of ibe Bunch so 
held or represented). 

J, To be pared, the Eittnurdiuty R&okibon requites a reijorlty fa EmoorcmutingofniX 
leas than three quoter* of the vraei care. If pawed, the EmaoidiBary ReaolotiMI Will be (ending 
on all the Bondholden, whether or not [veaenc at such Meeting, an! upon all the holdcn of 
the CxgsoM relating m die Band*. 

Tnretec ~ 

Asahl Baal That Gnpaoy of New KxL 
One WorU Trade Cento. 

StdretS0l7, 

New Yak. N.K f0CW-O47« , 

Principal Paying Agon 
Thr SomkODu Sonic, Limked, 

Temple Com, 

1 1 Queen Wetorta Street. 

Lenta EC4N4TA. 

Paying Agena 

Asaiii Bank (fiefewm! 5/L, n-onche Bank Aidenpr^Jlniafr, 


21 Avenue Jra Ana, 

B 1040 Brooch. 

Tbe Lnnp-Tcnu Credtf BanJt of Japan. 
Umncd, 

1 25 Lundcai Wall, 

LmutaKrzXSAft 

Sixyan Cknranty Tn« Cruupaoy of New Yorfc; 
35 Avcnoe doArts, 

B- 1040 Brussels. 

Suetftf C^tatrsle, 

29 Btulnani Hauantna. 

75009 ram 


30th Rwemhv. I<W4 


Tmrwanhv 12. 

6000 Rraik&nt l. 

The Musut Trust and Banking Company, 
Unshed. 

6 Bcoadgatr. 

LondoB GC2M 2TB. 

Sakuni Bant (LuwmbouigJ SA, 

33 Boulevard duPHnocHciui, 

L-l724Luxemtnug. 

Swia Book OpoRKkn, 
Aeschenvonwh 1, 

CH 4002 Basic. 


Chugsl Pfunoaccntuad Co*i Lti 


nomic stability has revived 
purchasing power - especially 
for relatively cheap items like 
food - leading, for example, to 
growth of 125 per cent in bis- 
cuit and cracker sales since 
1991. 

Analysts say such rapid 
progress is tapering off, and 
that tiie sector will now grow 
more in line with general eco- 
nomic expansion. 

“The market has reached a 
point of equilibrium. One can’t 
hope to continue at those sort 
of rates.” says Mr Jorge Lor- 
enzo, general manager at 
Bagley. 

Mr Christopher Ecclestone, 
an analyst at brokers Interac 
ciones. sees the Danone deal as 
“a breakthrough in Argentine 
mergers and acquisitions”. 

Unlike other takeovers real- 
ised at bargain prices, he says, 
Danone's was fully priced, 
showing that Argentina is now 
viewed as moving towards 
greater economic maturity. 
The $240m price-tag valued 
Bagley at $4£0 a share, more 
than $i above the price being 
fetched before the sale was 
announced. 

“The Danone deal is part of a 
major restructuring of tbe food 
sector which w£Q, as a result, 
become much more efficient,” 


says Mr Ecclestone. “Bagley 
had run out of things to do and 
was shaking at the prospect of 
Terrabusi under Nabisco con- 
trol. This was a deal made in 
heaven for Bagievs owners.” 

Although the Argentine food 
market is big in its own right, 
the real prize for foreign 
entrants may well be Brazil. 
From next January, Brazil's 
150m consumers will in mar- 
ket terms, be integrated with 
Argentina’s 31m as the Mercu- 
sor customs union between 
these two countries - and Par- 
aguay and Uruguay - comes 
into effect. 

E asier access to Brazil 
will be bolstered by the 
recent success of the 
Real Plan which has, temporar- 
ily at least, strangled Brazilian 
hyperinflation and created a 
consumer boom. 

The plan has also fuelled 
farther appreciation of Brazil’s 
currency against Argentina's 
dollar-pegged peso, making 
Argentine goods more competi- 
tive. 

“Our feeling is that what is 
happening in Brazil today is 
what happened in Argentina in 
1991,” says Mr Devoto. 

Argentina's climate provides 
It with several comparative 


TAMURA CORPORATION 

Notice of an adjourned Meeting of the holders of the outstanding 

U^470^00,000 

3% per cent. Guaranteed Bonds 1995 

widi Warrants 

tu subscribe for (hares of common mock of Tamm Cotpocatioo. 

Nonce b hereby given ihai a Meeting of dwboUen of the above Bondi [dre-BonSwIdcrf) 
convened by Tknura Corporation (the ’tarn*) nai The Sunuromo Bank, Limited (the 
’Guarantor*) on 24th November 1994 by die notice piMahcd to d* Rnandal Timet an 2nd 
November. 1994 and fa die LuMtnbuno Won on Jid November 1994 wa# adjourned through 
ledc of ■ quorate wl dm (he adjoined netting of BooifioUa* will bchcUudvoAcaof 
Liotfa wn & Paine*. Bvnmggm Bceoc. 59-S7 O tei h a m Street Lcevdon ECZV 7]Aon ftfcfar 
l&h December, 1994 at 11-15 in. (London mne) for die putpoK of co rahfenm md. d 
dmght fit. posing <he foflovtqg ira n l n tic n which wiO be prepared » an Eatramdearr 
Rcrokdon <a oaantaoe with die pnrekioat of die Tran Deaf dated Ifth December, (991 
(the To* Deed*) made between tbe Iona; die Guarantor and Attiri Bonk Torn Company 
ofNew York (formerly Kyowe Sabama Banfc Tnax Company of New York) (the Tnraee*). 

EXTRAORDINARY RESOLUTION 

That (his Meeting tf the heUcn of tbe oonmndirg U&STOjOOO.OOO 3 7/8 pa cent. 
Gumnreai Bath 1995 (the ’Bandk*) with Wmannmiobgatbe for dram of common nod: 
oflbnuira Corporation (*die burr*) conremned by » Tire* Deed (heed 19th December, 1991 
(the *Tture Deed*) made betvroen die tarn; tbe Cuaanaor (die tantTamni*). and A»hl Bant 
Tiw Company of New YoA (fcrmedr Kyowe Sattmui Bank Tnaq Cnen p caiy of New York) 
(the Hetton* Tnaree-J HEREBY RESOLVES THAIi- 

l)ibe a^pomanenrof Aafo Bonk (Nokdaad) N.V (ibe *NewTiume' I mphee of (he Rranog 
Trunxe br the Inner pwmm ro i Deed of Appumnomr and Rrxunaent of Trance. 
AppHotmoN of Omodian jaad AraendmoM id Thm Deed (die Ttred*) ro be dated on or 
obnn I6dk Dmebre 1994, and entered among tbe hoes the Robing Tratree. tbe New 
Tt"**, die CW i w and Tbe Arafal Bank, LnL name dmugb Ire Ionian bench be 
■Wravod: 

b)drea mw» b n eacof«heTiracDeedpatMnaci»Ctnae4of>heDeedbecB TO »ed; 


i rod die boUere of (be Coepoo* I 


onangsnem n rerpm of die 
Mnt lo (be Bonds yevrav die 
• <*' poregnplu rt. ul md otioi 


AVAILABILITY OP DOCUMENTS 

Copies of the Tiuai Deed, a draft Deed of Appointment oral Retmmem of Tnaree, 
AppofettmaarofCmasdomand Amendment af Thar Deed, the ffeyiflg and Whtront Agency 
A^eeraetudrand 19d>Deevmbei, Lm.arkaftSuppteniencil Agrecroenru amend die Paybig 
and Wmrmt Agency Agreement and draft legal opuuotn of cedi of De Braust Btacknone 
WcmUmck, Linklatva & Puna stni Mitsui YatuJa Waoii & Meeda may be inspected at. and 
voting cerofi ares nay be obtained (rook (he tpeedied office of any of the Paying Ageno 
given beta. 

VOTING AtfD QUORUM 

I. BanrSukZeo' a ontrmn b drawn to die concents of die notice publnbed in dm Fbunctal 

TbnaanZndNovatilKL 1994 md m the Luxetubutger Won cn 3d Ncwembet. 1994. 

Z . The epeenm required at die adjourned Meeting will be two or more penoni promt hollkig 
Bondi ur »«uSg cenlflcatet or bang proxies (whatever the prinopal atnoont cf the Bcoi w 
field or repres ent ed). 

3. To be pawed, tbe fotnovdmary Renlutim requires a majority In favour oorareraig of not 
las than time ipianeB of die votes oat. If paned, the En».<nlinan Resotutson wiD be birdlng 
on aH die Etadhoiden, whether « not praent at wch Meeting, and upon all the holders, at' 
the Coupon* tefarwig ta the Bonth. 

Trustee 

Asabi Baalt Trust Company oi NewYok, 

(fonneriy KyowaSotarna Bonk Tnat Onpany of New York), 

One World Trade Centtr. 

Suae SJI7, New Yorit, N.Y. 100484)476. 

Principal Paying Aecnt 
The AsahJ Bank. Lrd., 

(fottocHyThc Kyowa Saiuma EWik Ltd) 

30 Cannon Street. 

London BC4M6XR 


The Bank (/Tokyo, Ltd, 

U-URtahuy Oian , 
London EC2M 7BT. 

The IntktarfaJ Book of Japan, Unbred, 
Bracken House. One Fikhy Street, 
LondonBC4M9]A- 

Motran CatiWty Tnm Company 

of New York, 

Avenue Jcs Ana 35. 

0-1040 Bneoek 


Paying Agena 

Bompic IWfeu LuacndmuR, 

Kb Bculevafll Royal 
L-2093 LaxcmJxug. 

The Mitwbufu Bank, Limited, 
hBradgatc, 

LonJun ECZM 2SX. 

The SumKumn Trow and talking Conqwny. 
Umlred, 

155 Bufuyqpne, 

Lmta EC2M JXU. 


advantages - especially in 
wheat and dairy production - 
which should enable it to take 
advantage of this situation, he 
says. 

Mr Neil Perry, head of Latin 
American research at Baring 
Securities, agrees that many 
foreign companies have come 
to Argentina with the Brazilian 
market in mind. ‘Danone 
clearly has not invested in 
Argentina for the Argentine 
market alone. This wffl defi- 
nitely be part of a Mercnsor 
strategy” 

Danone already participates 
in the Brazilian biscuits and 
yoghurt sector, leading to spec- 
ulation that it will try to create 
synergies between operations 
in both countries. 

Mr Devoto believes the best- 
run Argentine companies wiR 
have great success in Brazil. 
"They have had three years of 
stability that have enabled 
them to reach more sophisti- 
cated levels of production." 

As a result, they will be well 
placed to compete at the top 
end of the market, he says. 

“In this new. competitive 
environment, the Argentine 
companies that can adapt will 
have very strong sales,” says 
Mr Devoto. "But the ones that 
can't will fall by the wayside.” 


Swire Pacific, the Hong Kong-based property, 
aviation and trading group, has formed a joint 
venture to baSda Coca-Cola bottling plant in 
Zhengzhou to the central Chinese province of 
Henan, Renter reports. 

Swire unit EC Development and China state- 
owned Zhengzhou General Food Factory will 
build the $l8m fiadfity, which will employ 200 
people and produce Coca-Cola, Sprite, Fanta 
and other Coca-Cola soft drinks. BC Develop- 
ment will hold 80 per emit of the facility, with 
Zhengzhou General Food and Beijing Chong 
Yin Indastriai Trading Co fee remainder. 

Thai Airways ahead 
sharply in year 

Net profit for Thai Airways International 
singed 206 per cent in the year ending an 
September 30, riimhr ng to Bt3LU7bn (31245m) 
from BtLQZbn, writes WflEam Barnes in Bang- 
kok- The national carrier’s president, Mr 
Thazzmocm WangZee, said the improved profits 
showed that a campaign to improve efficiency 
was starting to bite. 

Earnings per share rose from Bt0.73 to 
BEL23. Mr Thamno on admitted that Bfc792m of 
that profit was derived by recognising die- . 
counts on aircraft purchases as income, 
although he said this widely-mticised method . 
of boosting profits would not he used again. 

He said next year's profits would not suffer 
because the company bad decided to extend 
the depreciation period on new aircraft from 
12 to 14 years. This “almost cancels out” that 


the Hgin field doe east of Aberdeen, ScctiaaaL 
. Mr Fred Dymeni, Ranger's cHrf executive, 
said the company was concentrating on pro- 
jects which. could be developed within toe next : 
five years with "an attractive, balance of risk 
and reward”. " . f. " V 

Proceeds will be reinvested to- Ranger's 
exploration and development, programmes, 
which are centred on western Canada^ it® 
Gulf of Mexico and the North Sea;’ However, 
changes to BE tax laws and the detifoe to 
world ml prices have made North Sea projects 

less attractive in the past 18 nwmtha^ 

Authorities dear Umou 
Pacific bid for Santa Fe ^ ; 

Union Pacific, one of tbe seven hugest US 
railways, yesterday appeared to be heading for 
victory with its $3£bn hostile takeover bid for 
Santa Fe Pacific, another of the big seven, 
railway companies, after the federal inflatory" 
authorities removed Santa Fe’s mafo objection . 
to the offer, writes Richard Tnmhins ta New 
Yoric. . . ' . 

The . Interstate Commote Commission, 
which regulates mergers to tbe US railways 
industry, said firwas prepared to accqptUnion 
Pacific’s plan to buy Santa Fe's shares immedi- 
ately and put. tiiem in an independent tnmt 
pending the ICCs consaderation of' the take- 
over. Earlier Santa Fe had 'rejected - Union 
Pacific's bid* saying it was not dear whether 
the ICC would accept the trust arrangement. 

The ICCs decision puts Union Pacific af an 
advantage over. Burlington Northern, the 
Friendly ladder for Santa Fe. because' Burling-' 
ton’s agreed $3bn bid would not take effect 
unless and until it had received ICCofearance 
- a process find could take s year^or more. 

. Santa Fe yesterday declared a two-week 
postponement of toe shareholder vote on the 
merger with Burlington Nbrfhan, announcing 
a new date of December 16. .- " 

Industrial demand lifts 
StateBankoflhdia 

The State Bank, of India GSM), the country’s 
largest eommardal bank, posted a H2 per cent 
rise in its net profit fbr the six months ended 
September-30 following a sharp rise In indus- 
trial demand, bankers said, Reuter reports 
from. Bombay.. ; . 

.At its board meeting in Bombay, toe SBJ 
announced net profit for the first half at' 
Rs3.08bn ($9Am) and a 5L5 per cent increase to 
total income to Rs57A2bn. 


LINTEC CORPORATION 

Notice of on adjourned Meeting of dw hold ers of the outstanding 

U-S470,000n00 

\ PER CENT. NOTES DUE 1997 WITH WARRANTS TO SUBSCRIBE 
TOR SHARES OF COMMON STOCK OF LINTEC CORPORATION 

Nock* n hereby gjvoi dw: a Mrcnagcf the hoUca at' tbe above Now (tbe *NauboUeo*) 
oonvme d by LINTEC Corporation (dc "Lows') go 24th Naraabec. 1994 by tbe ootfcr 
piihsticd in tfat Pfanncsl Thna an 2nd Novanhcr, 1994 and in the L mranh uraer Watt cn 
Jnf Nowmbec 1994 raw aJlwnned through faek af a qurawn and dm tfaa n dj ounitd tncetfcig 
of NorehoMen will be held at the office* of LlnUana & Pdno. Bjiiti igtan Houe, 59-67 
amtum Sum London ECZV 7AJ on Friday USA (taemta 1994 at UJX2 jlbl (Larata 
Uroc) for the putpoK of towidertnf and. If thought fit. posing due foUowtuj taohitVin vhta 
«Bfa|mp*dJim U»n u Bta tataBlnMoifaactwiihihc p i w i ua BiiftbeTiiat 
Deed dated 7tb CVtofac 1993 (the Tnat Deed’) node U tnw mi the issuer oral Asahl Bank 
Tnm Conoaany of Now Yotk (the 'Ttuarae"). 

EXTRAORDINARY RESOLUTION 

"Tha* this Meeting of the holder* af the aamndiiig US4 70,004000 7(S per ran. Note* due 
1997 (the "Notts') sriffi Wamam to tacribe for shares of oasmun stock af LINTEC 
CotpaatianCifae Ittuer*) ooamnital bf aTirat Deed dated 7ih Ootohet, 1993 (the Ttust 
Deed 1 ) made between the bluer and Asofaj Bark TiuttConqraiy of Nns Yotk (the Hetidnr 
Tnisax') HEREBY RESOLVES THAT:- 

i) (he appottnmtoiof Aofn BsnkQ4Edotad)N.V.(ihe"Ne«Tnisn’) 0ip1anofdvRrtrin« 
Tnsnv by the l«r pnm to a Deed of Appomattox and Rmnancnc of Truao. 
Appolrainan of Cirandbn atkl Amnskamt of Tnw Deed idr ’CW) mbedasd on a 
aboai Ifah DectnlHx. IW, and cnond nm onc (hr fan the Reratog Ttmroe. die New 
Tiubcc anl The Aahl talk. Lid. actkiR dwcwgh lo London beonch be^yurrad: 

U ) the onenibneni of ibe Tnnt Deed pneonr m Cbuo 4 of ibe Deed be suVRMni: 
nl] the liHcr be ouduntedra enter Inco die DeeiL and 

n) ewerr dxosnMn, modlbcaaon. nrtadon. oampromtae t* maDgemem Si aspret of the 

nqhaof die NoafkJdeo anl the hoidenof the Oai^ani ohtfai so (he Nucei atpltnt (he loutr 

fendral Hi ra rendung bom the eem of pmaca^h, iK 10 md ml of tha lemlutUm 

AVAILABILITY OF DOCUMENTS 

Capiei af the Trust Deed, a (baft Deed of Arpcenimenc and Reareroent erf Tnmx, 
AppointLi ie nr of Cuttodfaei and Amendment cf Tnat Deed, the Poytoy sroi Wnrraoi Agency 
AioeeroeM dated 7th October, 1993, a dndr Sup p lemental Apronmi to amend the Poyh^ 
and Wonant Agency ARieement and drab legal opinion* of each of De Brain* Bbckstone 
Westbmek. Unidacen & Panes oral Mima Yatuda Wanl & Meeda may he e qwi e l *. ami 
sating ccraBcaroa may be obtained (nan. the specified office af any of the Paying Agent* and 
die Ontasetaent Agent girai beta. 

VOTING AND QUORUM 

1. Notehaldea’ anennan O dram to the caaiena of the notice jaibUthed m die Rnancml 
■nme* on 2nd Novembet 1994 and Hi the UwerabwEer Vfoo on W Novemhet, (994. 

2. The qumm letynred at the akrauned Meeting will be two oc mote penan* present holding 
Note* at wtifigcatihateidf bttftg ppsaet (whatever the prtnopal aasamr of the N«es w 
held or frprejcntnd). 

I- To l* pmaed, the Extnatdinary ReaohMon requoto a ratjonq In favour coodsrtng of tut 
tern than three yranew of the vowa cam. (I'paueJ, the fottraonfa t a r y ResabiriotistiR be blndhti; 
onafl the Noccboklca. whetha or (*x present at Bich Mcenng, and upon aU the boUea of 
the Caupou retartag n» the Nota*. 


Bank of Tokyo (Curasao) Holding N.V. 

U5-$100,000,000- 

GUARANIGB) flQATB^G RATE NOTES DUE 1 997 

of*a pripota [of, and Moran on, tU Nate 
b unooncfiicinafl)* ond brovocaWy gu on a Haod by 

The Bank of Tokyo, Ltd. 

(KdsuMi Kadn M90 (radio) 

In oGGonJonai widi (he provisions of ihe Agent Bank Arammsnf bahtwan 
Bonk of Tokyo iCuropao) Holding N.V., Jhp Bank of Tohyo LlA, and 
Gtibank, NA., dated Novomber 27,1985, riofioB is hereby gWsn'lhcd ta 
Rote of intarasr hw boon (tad af 6.2X p«. and iha# tfn irtawf payable 
on the relevant Interest Ptiymanf Dote, February 28, 1995, against 
Coupon Nol 37 wiDU US$155.00. ■ . * ” 8 ™" r 


YOKOMAtJflA ASIA LIMITED 
t Incorporated in Hong Kong ) 

M , • ■ u.s.$ 100,000,000 . 

GUARANTEED FLOATING RATE NOTES DUE 1907 





Arahi Bonk TnM Company of New Ytak. 
One WotU Trade Center. 

Sulre 601 7. 

New Yotk. N.Y. 10048 - 0476. 

Diibuileuuni Agon 
Yanufa Bank and Trrar Company (USA.). 
666 Fifth Avenue, Suite 802. 

New Yotk. N.Y. 10103. 


hying Agents 


By Citibank. NA (taw Sendees). Aqbw Bank CITIBANK} 


U.S. $50,000,000 

40 ■ 

S , SfS, r „ D .l8™'aS2 

Undated Subordinated Step-Up Floating Rate NUaa 

'Sl 31 ' 1895 

oavabte on Mhv n io^^Ti. o^? p ® anmm - 7lieani0unt 

KSiJSe U W S.M^S. P * “*■ S,a00 ° amwnt of 

^ 7 7l ®9 ha * c MaDhftttan Sank, NA. 

Lond on. Agent Bank — CHARF 

November 30, 1994 ■ 


fun Sank (LurrabaiaK} SA, 
Centre Rnander 29. 
Avwuar de h Pane-Neuve. 
L-2227 Luaemfcotup. 

Mar^n Guantitv Trust Company 
cf New Yak, 

Avenue de* Art* if, 
9-1040 Bturaek 


kkfa Norember, 1994 


The Mlautaihi Bwk, Lkntad, 
Laadon ECZM 2SX. 


Nid» Bank (Lstemboatg) SA. 
16 Bmderaal Royal, 
L-2449 LumantwtiiJ. 


LINTEC Corporation 


30h Noswnher. 1994 "Hanta Corporation. The Stnntanft Bank, l =«™t~A 









►33* £>' 


S "■ ( . , 

1 -■ m - V V 




FINANCIAL TIMES WEDNESDAY NOVEMBER 30 1994 


INTERNATIONAL COMPANIES AND FINANCE 




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‘ W orst is over’ for Japanese brokers 


By Gerard Baker In Tokyo 

25? 5“* J 1 *?® “* fortunes or the 
Big Four” Japanese securities compa- 

to * repon to *» 
irablthed later this week by Moody's, 
the US credit-rating agency. But grow- 
ing competition, a lack of diversifica- 
tion by the brokers and a failure to cut 
cost s suffic iently sharply will continue 
to present difficulties in the next few 
years, the agency said yesterday 
“The worst is over" for Nomura 
Dalwa, Yamaichi and Nikko, Moody's 
said, and the ratings outlook is essen- 
tially stable. “The industry environ- 


ment has not deteriorated over the past 
two years, but it has not Improved 
either. Nor do we expect it to recover to 
anywhere near the levels experienced 
in the late lSSOs,” said life Deborah Kin- 
zer, a Moody's vice-president 
In 1989, the favourable operating 
environment enabled the brokers to 
oyoy ratings on unsecured debt as high 
as AAA, the highest, but the agency 

currently rates debt at the top-ranked 

broker, Nomura, at just Al- 
in that five-year period, the volume of 
equity trading on the Tokyo Stock 
Exchange, the brokers' core business, 
has fallen by more than two-thirds and 


the decline has hurt firms’ earnings. 
The four brokers' combined pre-tax 
profits have collapsed by more than 80 
per cent since 1990. 

The principal threat to the Big Four 
in the next few years is the arrival of 
the subsidiaries of Japan’s leading 
banks into the securities market Banks 
are now permitted to issue and sell 
bonds - an activity which has been one 
of the few bright spots in the securities 
market in recent years. They have 
already begun to erode the dominance 
of the leading brokers, and are expected 
to take an even larger slice of the busi- 
ness in the years ahead. 


Moody's also says the brokers have 
not yet adfusted to the decline in share 
trading volumes by cutting their costs. 
Personnel costs and staff numbers 
peaked about three years ago, but have 

fan*ri only nii g hti y since riura . return- 
ing to the levels of 1989, a year when 
equity trading volumes were three 
times their current level. 

Tbs report says the Big Foot also face 

risks associated with weak affiliates 
and closely-related companies. How- 
ever, the agency points out that the 
brokers are all well-capitalised. "In fact 
we view capital as their major credit- 
quality strength,” said Ms Kinzer. 


Accounting 
changes help 
lift Indian 
steel group 

By Kuna} Bose 
In Calcutta 


A much lower provision for 
depreciation following changes 
in accounting procedures has 
helped the Steel Authority of 
India, India's biggest producer 
of steel, to register a fivefold 
increase in net profit to 
Rs&53bn ($105m) for the six 
months to November 30. 

Gross profit rose to RsAllbn 
from Rs4£3bn, on sales up to 
Rs6L19bn from Rssibn a year 
earlier. 

Mr MLR.R. Nair, the chair- 
man, raid that SAIL had pTcn 
benefited from “an all-round 
reduction in costs, changes in 
the product mix and higher 


NEC invests further YlOObn in D-Rams 


By Mchfyo Makamoto 
In Tokyo 

NEC, the Japanese electronics 
group, is to Invest YlOObn 
($1.01bn) in southern Japan to 
mass-produce 256-megabit 
dynamic random access mem- 
ory chips (D-Rams). 

The move, the third substan- 
tial semiconductor capital 
investment by the company, 
strengthens NEC’s hid to beat 
the competition in the race to 
dominate the market for future 
generation D-Rams. 

In the past three months. 


NEC has announced an $800m 

inve s t ment in Scotland hi man- 
ufacture 64-megabit D-Rams 
and a $S0m expansion at its 
Roseville plant in the US. 

The latest announcement 
comes as NEC unveiled a new 
facility built at a cost of 
Y95Gbn at its plant In Kyushu, 
the southern Japanese island. 

The new investment will 
expand production at Kyushu 
and is expected to result in the 
most advanced facility in the 
world, which will start mass- 
producing 256-megabit D-Rams 
by 1997. 


These memory chips are at 
the lading edge of semicon- 
ductor technology, which will 
only become widely used 
towards the end of the decade. 

The new facility will have 
the capacity to produce 30,000 
8-inch diameter silicon wafers 
per month at the smallest 
width of drctdfry possible, of 
nos microns 

NEC’s aggre s s iv e move Into 
the higher pnri of the mark et 
reflects its need, which is 
shared by other Japanese man- 
ufacturers, to keep moving on 
to advanced technologies to 


maintain its position til the 

highly competitive semicon- 
ductor market 

NEC, which is the second 
largest manufacturer of semi- 
conductors in the world after 
Intel of the US, and its Japa- 
nese competitors face growing 
competition from Korean man- 
ufacturers, which have also 
been investing aggressively in 
wnniftfnufaiffto i* facilities. 

Korean companies ; have 
already overtaken Japanese 
manufacturers in production of 
current generation 4-megabit 
D-Rams. 


Coles Myer to continue property review 


Interest and finance charges 
fell to Rs853bn from Rs3.83bn. 

SAIL and other Indian steel 
producers have been able to 
raise prices as demand has 
strengthened, bnt Mr Nair said 
that much of this additional 
revenue had been swallowed 
up by dearer Aral and freight. 

A SAIL spokesman sai± 
“The richer bottom line is due 
to the improved operational 
efficiency and a higher degree 
of value addition.” 

The company's income rose 
to Rs6L19bn from Rs51hn. 

• Tata Chemicals, part of the 
Bombay-based Tata conglomer- 
ate, India’s largest business 
house, yesterday announced an 
increase of 1&5 per cent in net 
profits to Rsl.04bn for the 
half-year to: end-September, 
writes Shiraz Sidhva in New 
Delhi. 

The company, which is the 
country’s largest producer of 
soda ash and manufactures 
cement, detergents and fertilis- 
ers, reported a rise in net sales 
to Rs2.63bn from Rs235bn in 
the corresponding period last 
year. 

Gross profits increased to 
RsLl5bn from Rslbn last year. 
Interest and depredation fell to 
Rs2£L&n from Rs288m, and to 
Rsl05.6m from Rsll7.8m 
respectively. There was no tax 
liability. 


By Emffia Tagaza in Melbourne 

Disgruntled shareholders at 
Coles Myeris annual meeting 
yesterday were told by the 
Australian retailer’s rfirwrainn 
that the company would con- 
tinue to review its property 
holdings to improve earnings. 

Mr Solomon Lew told the 
Melbourne meeting that the 
yield on commercial property 
was only about 7 per cent, 

excluding capital gaing and 


that it did not add to earnings 
because it went directly to 
reserves. By comparison, the 
return on retail Investments 
was about 18 per cent 
The statement followed Mon- 
day’s annnwnffatnant that the 
group had sold A$5O0m 
(US$381. 6m) worth of retail 
property. Mr Lew confirmed 
that the proceeds would fund 
the A$L26bn buy-back of the 
more than 21 per cant of Coles’ 
issued capital owned by Kmart 


of the US. “Since these pro- 
ceeds were not expected, or 
indeed needed, to fund our 
ambitious expenditure 

programme, the company will 
have the option to use these 
funds to reduce debt incurred 
in the Kmart buy-hack - 

shnnlri it be deamaH dagirahla 

to do so," he said. 

Mr Lew faced questions 
about the company’s earnings 
and dividend performance. The 
questions mrjndpd the compa- 


ny's performance compared 
with Woohvorth. Its main rival; 
executive salaries; possible 
conflicts of interest arising 
from director-supplied goods; 
and the Kmart share buy-back. 
Organised shareholders, repre- 
sented by the Australian 
Shareholders' Association, que- 
ried the level of goods supplied 
to Coles Myer by companies 
controlled by Mr Lew and 
another director, Mr lindsay 
Fox. 


Macquarie Bank in 
talks on share issue 


By Nikki Tatt in Sytfriey 

Macquarie Rank, the Sydney- 
based inv estment bank in 
which HT11 Samiml of the UK is 
the largest minority share- 
holder, is in discussions with 
shareholders over a possible 
stock market flotation. A deri- 
sion will be taken next year. 

“We are in the process of dis- 
cussions with a number of our 
shareholders but no decision 
has yet been made,” said Mr 
David Clarke, chairman, in 
Melbourne yesterday. The 
bank is owned by more than 40 
institutions, although manage- 
ment and staff also have a sig- 
nificant minority interest 

Mr Clarke’s comments c ame 
as Macquarie unveiled a sharp 
drop in profits before tax for 
the six mnnths to end-Septem- 


U.S. $100,000,000 

Robert Fleming Netherlands B.V. 

Primary Capital Undated 
Guaranteed Floating Rate Notes 

guaranteed by 

Robert Fleming Holdings Limited 


Interest Rate 
Interest Period 


6%% 


per annum 


Interest Period 30th November 1994 

31st May 1996 

Interest Amount due 
31st May 1995 

per U.S. $10,000 Note U.S. $ 344.41 
per U.S. $50X100 Note US. $1.72ZQ5 


CS First Boston 

Agent 


U.S. $125,000,000 



V'--, ; ,;i. . v.- , 


BANK OF BOSTON 
CORPORATION 

Floating Rate 

Subordinated Notes Due 1998 

Issued 26th August 1986 

Interest Rate 6.05% par annum 

Interest Amount per 

US. $50,000 Note due ■ 

28th February 1995 *•*•*»• S75&2S 

@ CS First Boston 

'* mr Agent 


BANCO CENTRAL 

DE LA RffUBUCA DQMINICANA 
COUAfiSAlEB? DISCOUNT BObffiS DUE 2024 

hereby 8 h * n RdMk w£ o*»y on Mho* Sole erf 7.1 23* on. «id f» 

CITIBANK* 


ber to A$34.5m (US$26.3m) 
from A$43Jjm. A significantly 
lower tax charge of A$l_3m 
against A$12Jhn left after-tax 
profits at A$33.2m t up from 
A$3L2m in the same period of 
1998-94. 

Macquarie said the fall in 
pre-tax profits was due to the 
tougher conditions faced by Its 
securities businesses - declin- 
ing prices, less volatility and 
smaller trading volumes. It 
said the operations remained 
in the black but profits were 
modest 

Elsewhere, the bank said 
that there were “strong earn- 
ings contributions” from the 
non-securities businesses. In 
the corporate banking group, 
loan loss provisions were negli- 
gible. and offset by writebacks 
of previous loan losses. 


Lloyds 

Eurofinance N. V. 

^.bkdU« 
£ 200 , 000,000 
Guorcntoad Rooting Rota 
Note. Du. 1996 

For the three month* November 
SB, 1994. to Fehruar? 24. 1996, 
the ffocam will carry “ totarwc 
rate of 6.1876% 03. with ■ 
coupon unvnt of £77.18, in 
respect of £6.000 nominal of the 

Nous end 13B6.66. in reanect «T 

£25,000 nominal of the No tee 
payable on February 24, 1096. 

Cfeauk. HA. Ommr SerrkoU 

Laodsn, Agent Bank 


BANQUE NATIONAL E 
DE PARIS 
Ecumna,08o 

Ftoatlag Rats Rotas doe 199S 
Notice Is hereby 9» the rae oi 
■merest lor the period Iran November 
30th. 1994 lo Febniary 28th, 1995 has 
bean fixed at 5.875 percent per annum. 
Tho coupon amount due lor this period 
Is ECU M&68 per ECU KXOOO denom- 
ination and Is payable on the interest 
payment data February 28tti 1995. 

The Rscal Aflent 

Banque Nattonale de Paris 
(Luxembourg) SA. 


U.S. $400,000,000 

Bampie Frangaise 
Du Commerce Exterior 
Guaranteed Floating Rata 
Notes due 1987 

For the three months November 30, 
1 964lo February 28, 1995, the Notes 

-wB bear interest at 8.187$% per 
annum. U.S. $164.69 mil be payaHo 
on February 28, 1995, per US. 
$10£00 principal amount of Notes. 

Bri*«nnna»reiTMH*.XA. 

LaMse. AgntSaA Q 

1 November 30, 1994 se 


U.S. $500,000,000 

Lloyds Bank Pic 


Thai PVC 
venture 
in public 
flotation 


By Victor Mallet 
In Bangkok 

Viqythai, the Thai polyvinyl 
chloride (PVQ joint venture 
controlled by Solvay of Bel- 
gium m»d Thailand* * Rhum wi 
Pokphand group, is planning 
to raise about BtLSbn ($52m) 

with a public flotation of one- 
sixth of its shares on the Stock 
Rrp ha n g n nf Thailand 
Mr Thada SavetsHa, a senior 
Vtnythai executive responsible 
for marketing and sales, said 
the main reason for this latest 
initial public offering by a 
Thai petrochemical company 
was to refinance Vinythai’s 
domestic debt 
Some of the proceeds will 
also be used to fend Vinythai’s 
5200m second phase. This will 
produce chlorine and vinyl 
chloride monomer (VCM), a 
raw material for PVC, and 
should be completed by the 
end of next year. VCM Is cur- 
rently imported. 

Vinythai says its |300m first 
phase, completed two years 
ago, produces 150,000 tonnes 
of PVC a year and has a Thai 
market share tof 38 per cent 
Shares are being sold at 
about Bt30 to Bt35 each. Some 
75 per cent will be reserved for 
Thai buyers and the remainder 
for foreign investors. The com- 
pany is publicising the offer 
this week with a roadshow in 
Hong Kong and Singapore. 
Baring Brothers is interna- 
tional leader manager. 

Aiming the lenders to Viny- 
thai is the International. 
Finance Corporation, the pri-’ 
vate sector fending arm of the 
World Bank, which has pro- 
vided two loans worth a total 
of $45m and arranged a third 
loan for |70m syndicated with 

|T|t fnwtinnflI hanlre. 


Anglo American 
rises to R794m 
after six months 


By Mark Suzman 
In Johannesburg 

A broadly-based improvement 
in both trading and investment 
income helped Anglo American 
Corporation, the world’s big- 
gest gold producer, to 
announce a 27 per cent 
increase in attributable earn- 
ings to R79&n ($188m) for the 
six months to September, up 
from R629m a year earlier. 

Pre-tax profits rose 29 per 
cent to RL23bn from R959m 
mu! earnings per share to 341 
i«wih» f n>m 270 

The interim dividend was 
increased to UO cents from 95 
cents previously. 

Investment fn enm e remained 
by for the biggest contributor 
to earnings, tiring 20 per cent 
to R828m as thecompany bene- 
fited from higher dividends 

from mining flnanrial awl gold 

interests. 

At the same time, an 
improved export performance 
and good working cost contain- 
ment in coal mining subsidiary 
Amcoal helped trading income 
to improve by 24 per emit to 
R265m from R201m. 

The company also greatly 
improved its surplus on the 


realisation of investments to 
R149in, up 96 per cent from last 
year. This was a result of the 
combination of the purchase of 
the group's interest in Argus 
Newspapers by Irish publisher 
Mr Tray O’Reilly and the sale 
of some non-strategic gold 
holdings. 

Mr Julian Ogilvie Thompson, 

Anglo American’s chairman, 

said he was greatly encouraged 
by the current economic 
upturn in the. South African 
economy, noting that It was 
being driven by investment 
rather than consumption for 
the first time in decades, and 
expected the company to cost 
tinue its improved perfor- 
mance over the next six 
months. 

However, he warned that 
labour regulations which pre- 
vented work on mines on Sun- 
days and granted excessive 
public holidays could severely 
rinra^gp the industry's interna- 
tional competitiveness. 

“If South Africa is to be 
internationally competitive, it 
cannot at this stage of its 
development adopt the labour 
practices of the world’s richest 
and most productive coun- 
tries," he said. 


India metal groups ahead 


ByKtmaJBooe 

Strong growth in demand for 
aluminium a nd bi ghar prices 
mwiWihI Hindaipo industries, a 
-Birla group company, and 
Ttvtian Aluminium, the Tnriian 
associate of Alcan, to post a 
strong growth in sales and 
profits for the half year to Sep- 
tember 1994. 


Net profit at Hindalco rose to 
RsL3Sbn ($42.4m) from Rs546m 
an revenues which advanced to 
RsSJttbn from Rs326hn. At the 
gross level, ■ profits were 
Rs2.07bn compared with 
RsLOTbn. 

At IndaL net profits rose to 
Rs343m from Rssmrn on reve- 
nues up to Rs3.98bn from 
Rs3.26bn. 






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CHASE believes that to be successful in FX, you The consistency of these polls reflects our approach to FX. No matter 

m«gt under stand y™"- raadw** made and out. who our client is, or where the market is,we always get beneath the surface. 


Something our clients acknowledge, given dm result of three recent polls. 


For more information, please call in London, 71*962-5108; in 


Emwnoney Mogcopne namwd Chase Best Foreign Exchange Bank of New %dt» 212 p-* 552 «' 2241 ; in lokyo, 33*287-4049i in ihng Kong, 

The Year. Qtobol Investor’s poll placed Chase first overall, with #1 rankings 852-524-5431; in Singipore, 65-530-4256; and in Sydney, 2-251-3591. 


mcarporamsm 

udiMMioMW 


Primary capita undated I in five of the six categories. And the 1994 Euromoney survey ranked Chase 

lotting Rate Notes (Series 2) I 


ftr the three months. November 
30, 1994 to February 28. 1995 
toe Notes u® carry an Interest 
rate of 8.1875% pa. with a 
Coupon Amour* of UA. $154.89 
payabia on February 28, 1995. 

Br.Tta Oast UnMfe BMLLA. 
lota. MM Ink 


first in London and New Tfork, and #1 in Research and Advice. 


CHASE MANHATTAN. 
PROFIT FROM THEEXPERIENCE? 


law ed by The Chase Man ha nan Bank, N-A- ID iatriUuu IP The New Hat AcaJeaty of MeJaae L3mny 






20 


FINANCIAL TIMES 


WEDNESDAY NOVEMBER. 30 


1994 



INTERNATIONAL CAPITAL MARKETS 


Downward revision of UK borrowing hits gilts 


By Conner Mfddefmann and 
Martin Brice in London and 
Usa Bransten in Now York 

UK government bands fell by 
more than half a point yester- 
day as Mr Kenneth Clarke, 
chancellor of the exchequer, 
presented his 1995-96 Budget 

A heavy drag on gBts came 
from US Treasuries which fell 
steeply an a sharp rise in a 
consumer confidence index 
there. 

However, the chancellor’s 
ckranward revision of the pub- 
lic sector borrowing require- 
ment (PSBR) for the current 
fi na ncial year to £3ASm, from 

the earlier estimate of £36bn, 
also damped market sentiment. 
“Ibis was a bit of a disappoint- 
ment We had been hoping tor 
£30bn,” said Mr Huw Roberts 
at NatWest Markets. 

The Budget contained some 
market-friendly news, includ- 


ing plans to set up an open 
mar k et for gilt sale and repur- 
chase agreements (repos) and a 
downward revision of the 
PSBR in I9S5-S6 to £21.5bn 
from the current estimate of 
£28bU- The PSBR was set at 
£13bn for 1396-97 and at £5bn 
for 1997-98, down from original 
estimate for £2ibn and £12bn 
respectively. These forecasts 
gave giifa a Hft in after- 
hours dealings. 

GOVERNMENT 
BONDS 

However, dealers said so 
much good news had been dis- 
counted in the run-up to the 
Budget that the actual package 
provided no support 

“The market held in very 
well during the morning on 
hopes far a good Budget, but 
when it turned out to contain 


few positive surprises, weak- 
ness in the other markets pul- 
led gilts lower," said one 
dealer. 

He also said that supply, in 
the form of taps of existing 
bonds currently being mid by 
the Bank of England and next 
week’s gilt auction, was weigh- 
ing on gilts. 

The December long gilt 
futures contract on Liffe 
was down g at X02£ in late 
dealings 

■ US Treasury prices fell to 
their lows for the week yester- 
day morning in the wake of 
anther sign that the US econ- 
omy is continuing to expand in 
spite of efforts by the Federal 
Reserve to slow it 

By midday the benchmark 
36-year government bond was 
down ft at 93fi, yielding 8.043 
per cent. At the short end 
of the market, the two-year 


note was down % at 99l£, 
-yielding 7.421 per cent. 

A report from the Confer- 
ence Board that consumer con- 
fidence for November hit 101.3 
- a four-year high - sent the 
price of the 30-year Treasury 
down nearly three-quarters of 
a point, driving the yield 
higher than 8 per cent for the 
first time in three sessions. On 
Monday, the long-bond touched 
8 per cent briefly, but did not 
hold that leveL 

Economists had expected 
consumer confidence to be 
closer to 88 per cent, which 
would have been a slight 
decrease from the October fig- 
ure of 89.1 per cent. Some 
immediately wrote off yester- 
day's number as an inexplica- 
ble aberration. However, those 
p Q T UTn gn fo did nothing to calm 
investor fears that the Fed has 
not done enough to rein in 
inflationary pressures, even 


though it has increased inter- 
est rates six times this year. 

Early reports indicate that 
retail sales will be strong this 
holiday season, and several 
recent surveys have shown 
underlying economic strength. 

The Fed earlier this month 
reported that the US economy 
was using 84-9 per cent of its 
capital stock for the production 
of goods, the highest level 
since February 1980. Some 
economists fear that even 
though some figures, such as 
the producer price index, show 
the economy to be slowing, 
there is substantial pressure at 
points in the economy that 
could lead to inflati on in the 
near future. 

Also upsetting the market 
were comments by two Fed 
governors wbo did not rule out 
another interest rate increase 
in the near-term if there were 
continued signs of inflation. Mr 


John La ware and Mr Alan 
Blinder told Market News 
Service that, in spile of scene 
signs of stowing, they saw the 
economy as quite strong and 
would act to stem that if 
trends continued. 

■ German government bonds 
feU yesterday, pulled down by 
US Treasuries, and the Decern* 
ber bund futures contract an 

stded at 8038, down 038 
an the day. Mr Karl BaeB ngat 
Deutsche Bank in Frankfurt 
said investors would probably 
remain sidelined until impor- 
tant US economic data were 
released later in the week. 

■ Norwegian government 
bonds react ed positively to the 
referendum rejection of Enro- 
pgflii Union membership. The 
yield on the benchmark 20-year 
bond fell from around 839 per 
rynt to 836 per cent 


Strong retail demand for 
$300m Walt Disney deal 


NEW INTERNATIONAL BOND ISSUES 


By Graham Bowley 

Walt Disney made a rare and 
successful appearance in a 
busy eurobond market yester- 
day, launching a 8300m offer- 
ing of three-year bonds which 
met strong dwmanri from Euro- 
pean retail investors. 

The issue, which was 
increased from 8250m, was 
priced to yield 25 basis points 
over US Treasuries and offered 
a coupon of 8 per cent. 

Lead manager Merrill lynch 
said the bonds were bought by 
Benelux and Swiss banks in 
particular and by some Euro- 
pean institutional investors. 
However, syndicate officials 
said they expected the bonds to 
will rip in the hands of Euro- 
pean retail investors. 

“It is the 8 per cent coupon 
that is driving the strength of 
retail demand on this deal. 


even though the spread is 
aggressive," an official at Mer- 
rill Lynch said. 

“The success of this issue 
shows that the retail market is 
currently in a very healthy 
state," he added. 

INTERNATIONAL 

BONDS 

Walt Disney launched a 
Y30bn offering in the Samurai 
market earlier this year, he 
added. 

With the sterling market in 
effect closed for the UK Bud- 
get, most eurobond issuance 
yesterday was in dollar-denoxn- 
inated bonds. 

The Republic of Austria 
launched a $400m offering of 
10-year bonds priced to yield 25 
basis points over US Trea- 
suries. Lead manager JJ?. Mor- 


gan said the issue met demand 
from institutional investors in 
Asia, the Middle East and 
Europe. 

Retail investors provided 
some demand, “although they 
are still focused on the two to 
five-year area," a syndicate 

nfBr'ial will 

“Since the [US Federal 
Reserve] raised interest rates, 
there has been a better bid in 
the 10-year sector." a trader 
said. “The rise was seen to be 
anti-inflationary, which 
boosted the long-end of the 
euromarket There is now 
much more institutional 
money coming back into the 
10-year area.” 

Also in the dollar sector, the 
European Investment Bank 
launched its expected two- 
tranche offering of five- and 10- 
year bonds. 

The $300m tranche of five- 


Borrower 

Afflcua 

m 

Coupon 

96 

Price 

Maturity 

Fees 

% 

Spread Book namr 

US DOLLARS 

European towntment Bonk 
European Investment Bank 
HcpuUfc of Austria 

Waft Dsney Company 
GovLA38et Backed Seortti est 
Sptotabt 

Urban MtgeiBafe of Swederft 
Counci of Europe 

Eaple Pter C orp(<L9» 

Samra Auatotfa Rnence^rit 

300 

300 

JOO 

300 

200 

200 

200 

ISO 

200 

SO 

8.00 

825 

625 

8.00 

ta-Bj 

W 

K9 

7.50 

|dl) 

lelj 

S9.71R 
99.9690 
99L6SR 
100. COR 
99.790 
99.95 
99.8975 
09.B3R 
99.73R 
100.00 

Dec. 1999 
Dec 2004 
Jan20QS 

Dec. 1997 

Aug. 1999 
Sep.1996 
Sep. 1996 
Dee.1996 
002001 
Dec 2004 

02SR 

0225R 

0225R 

022SR 

027SR 

uxfscL 

URfisd. 

0.12SR 

025R 

030 

+7tr**-B$ Morgan Staday & CataB. 
+I5t7»96-0fl Morgan StacAay 8 CoM. 
+25(7^%-04) JP M<xgan Sccufetoe 
*2S(7H%-97] Men« Lynch feawnerinoSI 

UBS 

Lehman Diorhara tad. 

JP Morgan SnctaWaa 
+€/7V« 96-96) Swiss Sark Corp. 

Morgan Stanley & Coded. 
Sanwa Mandtad 

YEN 

Idtaubishi Corp. Finance^ 
Lendasbenk BMNintfrae 

20bn 

lObn 

4.30 

zero 

100.30 

9X50 

Mw2000 
Mar. 1997 

020 

tnSsOL 

Senara IHtudiud 

FRENCH FRANCS 

ERGOS No.1. Tranche m 

981.14 

7.10 

99.94R 

Mar 2005 

aioR 

re4Q GoMmwi PwtoCtttoAgrfcfee 

SWISS FRANCS 

THK Ca(g|*§ 

100 

22S* 

100.00 

Mar. 1999 

. 

UBS 

Hnal terms and nckvcafbtote unfess stated. The ytakl spread (over retevart government bond) a meeti a tof te toed 

manager. feUnfested. gCornertlbto. TFtoaong rate note. rSemi-annual capen R: fixed rweetar prie* lees are atxxan S toe M-Otar 
ievaL a) Smth Libor *l5bp. b) 3-rmfi Ubor .*5bp. O 3-mth Ltoor *i%. d) Issue bunched on 2S71U94 was inoreraad to S300 bl dll 
&mth Libor *25bp. «i Cetobto on i5f)2/97 as far. el? 5-mrii bbor «-5Ctop to 1502/97 end 94496 fctd enrol Bietaedw. 9 Backed bf 
personal loans. Monthly coupons. Expected matixity: Apr 09 Average Ms 1 A yrs Mezzanine tranche: FMHrn. 7096, 99UB8R, mIIk 
21 yrs. STAN's »130£p. g) Pricing: 5 fl2J9*. PufUUe on 31W97 at 10691.96. CaBabto cn 3V3«7 at 10696% taftnp setnhnra^r. 
Cadable from 31/3796 subject to 15096 rota. 8 Spread a aver sdotpotated May rtod Oct 1996 BTANTs. 4 « cot 4 m 


year paper was priced to yield 
7 basis points over US Trea- 
suries; the spread on the 8300m 
tranche of 10-year paper was 
15 basis points over US Trea- 
suries. 

Lead manager Morgan Stan- 


ley said volatility in the US 
Treasury market hampered ini- 
tial placement of the bonds but 
it expected the offering to be 
placed with investors over the 
coining days. 

The five-year tranche was 


likely to be placed with ret &Q 
investors in Switzerland. Bel- 
gium and Asia, while the 
10-year tranche would go to 
institutional i nv e st ors in the 
UK and Japan, Morgan Stanley 

said. 


Dealers in Russian 
trading i 


By Richard Upper 

international debt dealers are 

to form a trade association as a 

means of bringing greater 
mder ap*f stability to tire Bos* 
gfrm ^T] gr-ri*»rtrtminated bond 


Their initiative, which is 
linked to the broader New 


New Affiance Owp - m Jwk- 
iog the trading awooaiktt- 
paiiy volumes rose eanfer 
tins year to as modi as ftfton 

jn the rouble in eariy October 
leading to a surge to actntofc 
potting heavy pressure on the 


Traders Association, foll ows 
recent volatility to the market 
for so-called “Minfin bonds", 
$7-9fcn of which were issued by 
Russia's ministry of finance in 
May 1933. 

“Aft we are trying t© do is 
make it more investor 
friendly,” said Mr Peter Bart- 
lett, vice-preodant of France's 
Basque indosuez, which co- 
sponsored a confere nce cn the 


More recently vutoes h^® 
dipped to as Bttte as a 
dayrpartiaBy wQectfc® ejncae 


Mr Bartlett insisted that the 


c ffTcfan* but that it was now. 
necessary to bring greater 


Bancpie Indosuez, together 
with other institutions - 
mdnrtmg two which cospon- 
sored the conference, BCSN- 
Eurobank and the US-based 


“ nig h volumes mean that 
the system began in 

show signs of fatigue,” ssdd Mr 
Bartlett j/ 

Settlement ctf trades can a£® 

be awkward, as unlike man y 
hard currency bands issued 

from e me rgi ng economies, the 
Russian bonds must be held 
and transferred within Russia. 


Hillsdown Holdings steps 
up size of syndicated loan 


By Graham Bowfoy 

Hfflado wa Holding s, the UK 
find manufac t urin g group, is 
iwfWB Bii ng the of a syndi- 
cated loan arranged by Ktefo- 
wort Benson and Barclays 
from £60Qm to £7QQra due to 
demand from participating 
banks, Kfeamnxt Benson said 
y estgfiay . Tbe loan is expected 
to be signed on December 9. 

The loan is to refinance 
HOlsdown's existing £275m 
loan, launched to 1992, at 45 

Tincig p nftiis OVET the T/«Ain 
interbank offered rate (Libor). 
R also replaces a CgttQm facil- 
ity launched in 199L 

The facility fees on the 
are 12H basis points for. the 
first five years and 15 basis 
points for years six and seven. 


The znargto cc.tiie deal to 35 
baste pofcifa over Ubor for the 
first five yens and 17% basis 
points for the remaining two. 

• Finnish Export credit, to* 
state-owned export-financing 
vehicle, has launched a $18002 
three-year loan arranged by 
Chemical Bank. Tbs revolving 
credit to priced at XZ5 basis 
points ova: Libor and replaces 
a HOQm credit facility signed 
in January 1993 at a price of 55 
baste points over Libor. ... 

• Volvo, the Swedish motor 
group, has lannctaf a 9750m 
seven-year loan, arranged by 
KwdrtMg Corporate and Sven- 
aka HgrndPteJwrilrHM The facil- 
ity is priced at 15 basis points 
over Ubor fa years one to five 
and SO points ova Ubor fa 
years six and seven. 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 

Red Day's 


Coupon Date 


Pi** 


Weak Month 
orange YfaU ago ago 


Italy 

■ NOTIONAL ITALIAN GOVT. BOND (BTP) FUTURES 
(Uf?a Lira 200m 1«W» at 100 % 


FT-ACTU ARIES FIXED INTEREST INDICES 

Price En£oes Tin Day's Men Accrued 


UK Gets 


Ncv29 change % Noe SB lntaraa t 


ted adL 
JW 


•—Lour ooupon ytairi — — M ed ke n coupon ytaM- — H|_ 

Mar 29 Noe 28 Yr. ago Nor 29 Noe 2A Yr. ago No* 29 Nw» Vr. ago 


AusraGa 

Belgium 

Canada* 

Denmark 

■■ 

rfUfCS 


BaJy 


Netherlands 

Spam 

uk tern 


US Treasury ’ 


9.000 

QMW 

91.7200 

-aim 

1036 

1073 

1053 

7.750 

10/04 

96.4600 

-0.420 

828 

837 

8.49 

6000 

0504 

jpwnn 

-0050 

9L18 

9.14 

9.10 

7000 

12AM 

69.1700 

-0080 

a 68 

8J8 

809 

6000 

05798 

1010^0 

-aiao 

703 

707 

705 

6.750 

10/04 

910400 

-0280 

707 

8.16 

82B 

7000 

11/04 

1006100 

-0200 

708 

7.48 

704 

area 

08/M 

B20QOD 

+0.080 11051 

1107 

11.73 

4000 

0699 

1030040 

- 

305 

405 

4.10 

4.100 

12/03 

962500 

— 

400 

4.74 

4.74 

7250 

10/04 

98-3400 

-0.480 

7j49 

708 

701 

6000 

05/04 

810700 

-0010 

11.16 

11.17 

1125 

6000 

06/99 

90-31 

-11/32 

805 

837 

805 

6.750 

11/04 

88-14 

-18/32 

8 49 

803 

8.72 

9.000 

10/08 

104-08 

-23/32 

807 

804 

808 

7075 

11/04 

99-10 

-27/32 

707 

802 

704 

7reo 

11/24 

83-24 

-27/32 

806 

8.14 

800 

6000 

04/M 

840000 

-0060 

040 

806 

A RH 



Open 

Sea price 

Change 


Low 

Est wri 

Open tat 

Dec 

10100 

101.60 

-ore 

101.90 

101.46 

37175 

42481 

Mur 

Jut 

10050 

10005 

3900 

-0.12 

-017 

10005 

10045 

8954 

0 

17956 

0 


■ ITALIAN GOVT. BOND (HTP) FUTURES OPTIONS (UFFQ Lta200m lOOtha Q> 100% 


CALLS 


PUTS 


Sbfte 
Price 
10080 
10100 
10160 

Eb. wt ML Cm 1735 Pua leas. Pravtoua day* open kit. Cm 10427 P*a Bin 


1 Up to 5 years (24) 

2 5-15 years (22) 

3 Over IS yaars (B) 

4 irredeemables (6) 

5 AO stocks (60) 

todm-Untod 


12001 

-0.14 

12008 

224 

803 

5yt» 

809 

6L31 

596 

are 

807 

824 

808 

14104 

-041 

14102 

221 

lire 

15 yc 

807 

'800 

877 ■ 

848 

.841 

609 

874 

15808 

-005 

15039 

3.12 

1007 

20 yn 

80S 

028 

807 

048 

841 

801 

807 

17808 

-006 

17908 

1.19 

1347 

toad.t 

are 

..807 

800 





136.17 

-006 

19808 

209 

1009 










851 858 

858 759 

a» 7.10 


iB* 

Noe 29 Mae 38 Yh ago 


10 % 

Noe 29 Noe S Yr. ago 


Mar 

JUn 

Mar 

Jun 

6 Up to 5 yen ( 2J 

167.30 

-(LOB 

16705 

■ 000 

507 

Z05 

092 

200 

1.92 

7 Over 5 years (11) 

174.78 

-022 

17518 

128 

408 

1.78 

075 

223 

22S 

8 All stocks (13) 

175.19 

-020 

17555 

101 

<41 

105 

000 

2.50 

200 







are 

353 


S77 . Z1&.:- 

551 ■ -358 


252 

3JB4 


■ 258 
352 


1-27 

250 


London dating. He* Ymk Md-Oey 
t Owe IretoSnp tehbottng uw el 129 per cert P fe^ ta By ncreeeUenfcd 
Meat: U3. UK In 32m*. oems m dected 

US INTEREST RATES 


VWdEtacd mow nmum ■ NOTIONAL SPANISH BOND FUTURES 


SauwHIfiraiaW 


Undttm 


Ftofindl 

FalNaM a M awnUo u - 


Ra Two hd* _ 
month — 

- <ra»ra — 


Tmray Hfc am BcndVtaMs 
Ml Tfeoyaw. 


Open Sett price Oienge Htfi Low &L voL Open mt 
8758 87.48 -052 87.74 87.40 28.740 78539 

8888 8852 -028 8858 88.70 2531 7.782 


5S3 DmyK. 
534 Ftoyar — 
816 iCyra 
874 “ 


739 

75* 

751 

752 
un 


Dec 


UK 


■ MOTIONAL UK OR-T FUTURES qjFT^- E50.000 32ntta Qt 100% 


BOND FUTURES AND OPTIONS 
France 



Open 

Set! price 

Change 

Htfi 

Low 

Esl voi 

Open tat 

Dec 

108-12 

102-24 

-024 

103-18 

102-18 

58734 

75128 

Mar 

102-21 

101-31 

-0-28 

102-28 

101-27 

24398 

81390 

Jen 


10061 

*028 



0 

0 


■ LONG CULT FUTURES OPTIONS (UFFTJ ESQ500 84ths of 100% 



Open 

Sett price 

Change 


Low 

EsL tad. 

Open tat 

Sfeto 


■ CALLS — 


Dec 

11240 

11242 

-002 

112.76 

11204 

128038 

115004 

RlOB 

Mr 

in 

Mar 

Mar 

111.60 

11100 

-034 

11108 

11102 

4048 

3B042 

101 

2-19 

267 

1*21 

Jun 

11070 

11070 

-004 

11088 

11006 

are 

3071 

102 

1-47 

2-28 

1-49 









103 

1-16 

2-02 

2-18 


PUTS 


Jun 

258 

3- 30 

4- 04 


Etf- eo t ML cm 22B3 Pan isea PmIm ««*• opm M. Cafe 11383 Pirn ua ZB 


■ LONG TERM FRBNCH BOW) 0PTT0N8 (MATO) 


Stifca 

Price 

Jan 

- CALLS — 
Mar 

Jiat 

Jan 

— PUTS — 

Mar 

Jun 

110 

- 

240 

- 

008 

080 

_ 

111 

1-25 

1.78 

100 

063 

1.14 

214 

112 

005 

103 

- 

100 

100 

. 

m 

029 

079 

- 

107 

2.15 

- 

114 

an 

046 

- 

- 

- 

- 


Ecn 

■ ECU BOt«> FUTURES (MAHT) 


&t VOL tM CWa 11,789 Pm 18018 . ftwtaa da Y* epen tat. Cm taO/CtS Puts kkozi. 

Qo ra ia ny 

■ NOTIONAL anW N BUND nJTUHESgJFPq-OM290JI001008wo» 100% 


Dec 


US 


Open 

8250 


O ettprie w Change 
8150 -532 


Htfi 

«p?n 


Low 

8T52 


Esl «jU Open H. 
75T8 


■ US^ TREASURY BOW FUTUTC3 (OSH 8100500 32nd» of 100% 



Open 

Sett price 

Change 


Lew 

Est tte 

Open tat 

Dec 

91.15 

9006 

-040 

9108 

9084 

148101 

128357 

Mar 

9048 

9014 

-041 

9005 

9010 

16476 

82816 

Jin 

88.79 

8909 

-041 

89.79 

89.79 

160 

87 

■ BUND FUTURES OPTIONS PJFFE) 06650000 petals at 100% 





Open 

Latent 

Change 

High 

Low 

ESL voL 

Open tat 

Ok 

98-18 

98-07 

-0-10 

88-20 

08-04 

334,127 

312051 

Mar 

97-30 

87-20 

-0-10 

9600 

97-17 

68,168 

110095 

Jtto 

97-04 

87-02 

-0-08 

9705 

9702 

2439 

11,988 


Suite 


CALLS 


PUTS 


Price 

Jan 

Feta 

Mar 

Jun 

Jen 

Fdi 

Mar 

Jun 

9009 

are 

1.00 

1-20 

1.24 

054 

are 

108 

106 

9050 

are 

075 

090 

1.03 

000 

1.11 

102 

2.14 

QiOO 

027 

055 

0.74 

085 

1.13 

141 

100 

246 


Japan 

■ NOTIONAL LONG TOM JAPANESE 
(LFFg VIOOm TOOOa Of 100% 


GOVT. BOND FUTURES 


Eat *CL maL cm seaz Pue UB7. Prwtaue <w «P«1 Inu cm 130850 Pies 87311 


Open Cioae Change Hgh Low Eat vol Open Ire. 
Dec 10651 10051 10850 624 0 

Mar 10751 10751 107.79 2713 0 

■ UFPE csrtaete tadM cm APT. AB Qmp hmw Bpa. m ipr pmMm dot 


| UK GILTS PRICES f 

\ifrt — 199€^. 

Natal lit Mi MsE+or- W l— 

_YMI_ _1SM_ 

fete tat Had PticaE +cr- Htfi lew 

-YW4- -1994- 

W» (0 Pb PriaS ror- Mfe Lew 


sratr (Mm W N fat TWO) 

Traal2pel99S 1158 

BMi3pceaH9BD-9S_ 104 

lOVpeias 1050 

Treat I21*pc 1B95tt 125S 

14pc 1 90S — 12 09 

ICVpcIOBBtt 1175 

6t0is»pe I998tt — 1 223 
QmtnkalOpc iflffi — 859 

XkmGailb cmU— TM 

Tran13^0c1»m 1159 

61*10*3* T9S7 W 

TrasaVeci mu sm 

6cftl5pcrSS7 — , „ 1275 

940K1SBB 838 

naB74*pcfSB8tt 7M 

Tree* Wipe IfflWBft- 755 

14pe I8BS-J 1(59 

Tubs 1 Pape mH: 1258 

DW 12K10& 127> 

Tra«9^pc 1999ft 9-15 

BdllZhpCim 1078 

TRW 10<2pC 1999 879 

set 


RRtoFBMTan 


559 imi 
578 98V 
831 1Q2fi 
8 W 105S 
8» 1Q7H 
7.i4 nn 
732 Iflftl 
754 1M^ 
W7 S85 
752 IKPa 
tm usa 
005 10TS 
OT7 TITHi 
827 10% 
B7& 
824 95S 
8 37 IMS 
89 1234 
840 112 

857 103% 
US lift 
842 10TB 

83fi 91 


FB*fcB3»j(K 199M_ 470 

Kt1& OonreWn 9^2004 295 

Treat 5%pc20tKft 752 

I® 1 ? gijccTBGS— 849 

^ cwsbPcjram 

^2 Timl9tfc20O9-S 1022 

7 SOW B.18 

TOi teaODMtt 89 

se% n»1J%fF20B-7 1009 

1184 Tnai 6^200 2007 ft 899 

io4V u%pc aooHF raw 

1004 TWSpeJOOBft 853 

tf© Ttaa0pe2D09 831 


735 74H 
856 1064 
848 861! 
848 1064 
553 10BA 

855 1ZZB 

847 940 
854 864 

856 110!z 

850 100 

856 1264 

848 1Q4U 
846 66% 



New ff?3 

4HpeW««_(t35a 

2Vpcm (783) 

ZVgeTS. 

3*N. 

2fee88. 
zVicni. 

2%fe*U 092) 

vjtev aift 




2.47 

275 

88 

3.43 

847 

854 

U9 

883 

IBS 

358 

171 

188 

372 


133 an% 
350 107»i 
275 1663 

278 1623 

279 1W*e 
270 169% 

352 IS3& 
283 ISBji 

353 1394 
285 136% 
356 138% 
352 110% 
256 106% 


OtMntn10%pciaSB- 

857 

8A8 

107ft 

Tras FWftfe 1flB0_. 

- 

- 

•9%d 

8pcZXM 

814 

807 

88ft 

Qnrtocaneft 

878 

040 

102ft 

TraaslSpcZON 

1048 

as 

118% 

ICpcZOOT 

UB 

057 

lOGfl 

7pc20mft 

701 

047 

m 

M*t2Q02 

817 

BB1 

mi 

ape 3003ft 

827 

05B 

WfSA 

1 0pe 2083 

823 

803 

TOBtV 

TrtroiHjpc2tt)i-4 

1818 

074 

113ft 


-A TIE 953 

-A in* ttss 

-i 1404 122 _ 

-% 12M USA 0M»rO»mTBiui 

-V us* wia TresSiNpeano 

-4 1384 Illfi CBwflprtnanift — 

-4 1214 1054 Tran 9pc 2012ft 

-4 Ifllfl B8R Tra85^Ka00B-12tt- 

TMMSpC 2013ft 

7%jJcaH2-1Sft 

DwAr 2017ft 

Eacdi2pc 2013-17 

-% iaifi io« 

-4 1184 68% ^ ■ 

-fi laofl llflfi 

-4 1224 

-4 ice* affl — - 

-8 1234 102a QnVifcVita. 

-8 ii3H 82% nwapewfl# 

-S 1274 104% G»aofa2 , 2JS 

-% law 109B Tmn-shtc 


704 

033 

SIS 

ss 

96ft 

773 

858 

0 « 

I0W 

-tt 

JSStt 

lOOfi 

057 

044 

106ft 

-B 

127% 

100% 

701 

028 

na 

-9 

83% 

71% 

828 

038 

968 

-% 

117fl 

B 

028 

033 

BS% 


114% 

88ft 

043 

037 

103H 

-% 

128% 

soft 

013 

800131 %Bl 

-fl 

189% 

126ft 


Other Fixed Intecsst 


M M Mae «-sr> 


-1994- 


NtoPwffl dwl 

^^K9CS012 


857 

- «fl 

-B 

98% 

806 

- fl%N 

-ft 

MS 

&B4 

- 58% 

-ft 

n 

oa 

- 843 

-ft 

44% 

8.46 

. 29ft 

- 

38% 

846 

- 28ft 

-ft 

37% 


44B 

66 % 

33H 

2>4 

27 JJ 


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FINANCIAL times 


WEDNESDAY NOVEMBER 30 1994 


COMPANY NEWS: UK 


Attwoods to sell UK 
side to Cleanaway 


By Paul Taytor 

Attwoods, the mineral 
extraction and waste manage- 
ment company fig hti ng si hnp- 
tfle £391m takeover bid from 
Browning-F erris Industries of 
the US, yesterday said it had 
agreed to sell its UK business 
to Cleanaway for £i asm if the 
BFI bid failed. 

Meanwhile BFI announced it 
had received acceptances in 
respect of 120.6m ordinaries or 
42.6 per cent, including the 29.8 
per cent holding of Lai Haw, 
which agreed to the original 
offer. Of the preference shares 
it had acceptances for 48m or 
73.1 per cent, inch»fin C Laid- 
law’s 72 3 per cent 

The offer is due to at 
lpm on Friday. 

As part of its last-ditch 
defence, Attwoods has urged 
shareholders to reject the 
revised BFI bid - worth Il6.75p 
par ordinary and 92 p per pref- 
erence share — a n d opt j p p fead 
for its own break-up proposals. 

Under these proposals share- 


holders would receive a 
sum upon tbe sale of the UK 
and European businesses. 
Attwoods, which claims its 
proposals would deliver sub- 
stantially more value than the 
BFI bft, would then seek a 
potential purchaser or merger 
partner far its US activities. 

Attwoods said yesterday that 
it had signed an agreement 
with Cleanaway, a waste man- 
agement joint venture between 
Brambles, the Australian 
transport group, and GKN. The 
offer is conditional on the dis- 
posal of the UK quarrying and 
mineral assets. 

The agreement appears to 
preclude other bids for the UK 
business. Earlier this month 
Waste Management Interna- 
tional, the London-quoted arm 
of WMX of the US, confirmed it 
hoped to buy Attwoods 1 UK 
businesses if shareholders 
rejected the BFI bid. 

WMI had indicated that it 
would probably offer more 
than £100m for the UK 
operations. An independent 


surveyors’ report published 
recently as part of Attwoods' 
defence revalued the UK boa- 
ness from £97m to £13(L6m. 

Mr Ken Foreman, Attwoods' 
chief executive, said: “The 
oiler price, representing 1.9 
times sales, further l yi^iinw; 
our confidence that our 
break-up plan will realise 
greater value than the BFI 
offer and is achievable within 
the timescale we have set for 
ourselves. 

“We continue to urge share- 
holders to let the BFI offer 
lapse so that we can imple- 
ment our plan for the benefit 
of shareholders.” 

BFI, whose offer values 
Attwoods at 1.5 times revenue, 
had earlier criticised the 
break-up plan for failin g to pro- 
duce the names of potential 
buyers or offers for the busi- 
nesses. 

Mr Philip Angell of BFI has 
described it as “a very iffy pro- 
posal” and suggested share- 
holders could get as little as 
56p or 88p a share. 


Waste services behind 
Shanks & McEwan rise 


By Paul Tayfor 

A strong performance by the 
waste sendees division ofEset 
further disappointing results 
from the Rechem hazardous 
waste business and helped 
Shanks & McEwan report a 5 
per cent increase in first-half 
pre-tax profits. 

Pre-tax profits in the six 
months to October 1 increased 
to £9 -82m (£9_35m) an turnover 
up 10 per cent to £69.7m 
(£63 .2m). Earnings per share 
were slightly ahead at 3.6p 
GWpX 

The group, which announced 
a sharp reduction in its divi- 
dend in June after unveiling a 
Ml year pre-tax loss, is paying 
a Lip Interim dividend in line 
with its new dividend policy, 
down from SL24p a year earlier. 
The shares closed down 2p at 
89p. 

Mr Michael Averfll, who took 
over as chief executive after 
his predecessor, Mr Roger 
Hewitt, stepped down In Janu- 
ary, highlighted the group’s 
first half net cash receipts of 
£9m which enabled the group 
to reduce its net debt from 
£30. 9m at the year-end to 
£2L.9m. Gearing has fallen 
from 46 per cent to 30 per cent 

Overall operating profits 
increased by 8.2 per cent to 
£11. im (£LQ.3m) with a 49 per 
cent increase in profits from 
the waste services division off- 
seting lower profits environ- 
mental services and a £840,000 
loss (£722400) in construction 
services. 

Waste services, which mostly 
deals with the disposal of 
household, commercial and 
industrial waste, in c r eas e d to 



David Downes, finance director, left, and Michael Averill 


£lL4m (£7.69m) an turnover up 
20 per cent to £46m (£37 ^m). 
The profit improvement 
mainly reflected higher vol- 
umes and margins and the re- 
appearance of significant con- 
taminated spoil contracts in 
the Bouth of England. 

In contrast environmental 
services, including Rechem, 
which specialises in hazardous 
waste incineration, and techni- 
cal services, which concen- 
trates on the handling, treat- 
ment and disposal of special 
and diffic ult wastes, reported a 
fell to £L3m (£448m) on turn- 
over lower at £16.7m (£l9.8m). 


Rechem was responsible for 
the bulk of the decline with 
profits falling from £3.3m to 
just £200,000 and turnover 
dropping by 23 per cent Price 
pressures at Rechem’s Fawley 
and Pontypool incenerator 
complexes, reflecting both a 
lower level of higher margin 
imports and competition from 
cement kilns , were blamed. 

Mr Gordon Waddell, chair- 
man, noted that there is, 
“unfortunately no material 
improvement in prospect for 
either, despite the encouraging 
statements on government pol- 
icy”. 


Severn Trent falls 26% 
after redundancy costs 


By Peggy Hdtoger 

Severn Trent yesterday 
announced plans to cut 750 
central office jobs, bringing the 
total number of redundancies 
announced in the water sector 
in recent weeks to almost 3.000L 

Severn Trent Is taking an 
exceptional charge of sssm to 
pay for the job cuts and other 
moves to reduce central sup- 
port costs, such as investment 
in systems and technology. 

The news follows similar 
announcements from York- 
shire Water, Welsh Water and 
South West Water in the first 
reporting season after the sum- 
mer price review. 

The exceptional charge 
depressed Severn’s pre-tax 

result for the six months to 
September 30. On turnover 9 
per cent higher at £533.6m 
(£489 An) pre-tax profits fell by 
26 per cent, from £1464m to 
008m. 

Mr Roderick Paul, chief exec- 
utive, refused to disclose the 
level of annual cost savings 
Sevan expects to achie ve as a 
result of the rationalisation. 
However, he said he expected 
“quite a fast payback” on the 
£55m charge. ‘ 

The job cuts will occur in the 
2£00etrong central office staff 


in the utility division. over the 
next two years. 

Severn Trent's profits w ere 
also helped by an £lL5m reduc- 
tion in the Infrastructure 
renewals charge. This was off- 
set, however, by the decision to 
devote that hwnafft to mitigat- 
ing the gffactg of higher drain- 
age charges to domestic cus- 
tomers next year. Severn 
expects to set aside £23J3m in 
the Ml year for fids purpose. 
As a result, said Mr Paul, 
domestic bQls were not expec- 
ted to rise as Bhaxply next year 
as would have previously been 
tlip case. 

Severn also announced plans 


-front 

Sham price (panes) 



to spend £24m on rngfnmnw ser- 
vice improvements, particu- 
larly in sewerage. 

Ihe regulated water business 
saw operating profits fall by 23 
per cent to £12&lm as a result 
of the exceptional charges, on 
sales 7 per cent ahead to 
£421 .3m. 

Mr Paul said Biffa, the waste 
management company - pur- 
chased Ear eaiem in 1991, had 
performed weEL Operating prof- 
its woe 15 per cost ahead to 
£7 An (£6. 6m), on sales 25 per 
cent up at £74m (£59 Jm). How- 
ever, the division was still 
labouring under w i w vy finan- 
cing costs of about £24m a 
year. 

The dividend is tiffed to &23p 
(7J5p). Mr Paul said that, for 
the first time, Severn would 
not be h e ld to its traditional 
dividend policy of paying one- 
third of the total at the interim 
stage and two-thirds at the 
final. Earnings per share fell 
from 39.4p to 27.7p. 


i ? 

4ji 



I 


MitayMnood 

Roderick Paul: expects a fast payback on the £55m charge 


460 1 


WM 


Nov 


Sooner FT QkapNte 


It is a pity that Severn has 
tarnished good underlying 
results with what appears to be 
a determined effort to keep the 
market in tbe dark. The core 
water business is going well, 
and the cost-cutting is wel- 


come news. However, the 
charge seems excessive com- 
pared with Severn’s peers. 
BifEa, meanwhile, is estimated 
not to have improved on the 
second half of last year - dis- 
appointing in a business 
heavily exposed to economic 
recovery. Forecasts' are for 
annual profits of about £317m, 
before exceptionals, and a divi- 


dend of 24J)p. This would leave 
Severn with a yield of 5.7 per 
cent, slightly less than the sec- 
tor average of 6. Severn’s 
healthy dividend cover of more 
than 3 tunes could open the 
way for better than average 
growth in the longer term. Yet, 
so far, there is no dear indica- 
tion that this strength will be 
exploited in the near future. 


Tops Estates 
advances 62% 
to £1.34m 

By Geoff Dyer 

Tops Estates, the shop and 
office p roperly company, 
yesterday announced a 62 per 
cent increase in interim 
pre-tax profits from £825,000 
to £1 .34m. 

Rental income for the six 
months to September 30 
jumped from £&84m to 
£9.02m, including income from 
the two shopping centres in 
Lancashire acquired tn 
January and 14 weeks rent 
from the Bond Street shopping 
centre In Leeds. 

Net interest charges 
increased to £8.67m (£5.16m). 

Earnings per share fell to 
OJp (l.4p) after tax of £970,000 
(£175,000). The interim 
dividend goes up to 0.64p 

(O-Blp). 


Avesco losses higher 
after demerger 


By David B tac kwefl 

Avesco, the broadcast 
equipment and services group, 
yesterday announced an 
interim pre-tax loss of £7.94m, 
mainly reflecting the cost of 
spinning off VldeoLogic, the 
multimedia company. 

It also announced the acqui- 
sition of T nmtal , a TV anima- 
tion group trading as Excess, 
for £625,000. 

The group now consists of 
three divisions - television stu- 
dios producing programmes for 
both the BBC mad independent 
television; giant TV screens for 
use at concerts and sporting 
events; and video/audio sup- 
port systems for presentations. 

The pre-tax loss for half- 
year to the end of September 
was struck after charging 


£6.4m for' the demerger, and 
compares with a loss of vzaam 
p reviously. Total t u rnover was 
£lL7m (£L0fon). 

The pre-tax profit from the 
contnniing services operations 
was £250,000 on turnover of 
£6D3m, compared with £704^)00 
on £4.61m previously. 

Shareholders will vote on 
December 23 on the adoption of 
a new share option ffJwmn , an 
increase in the authorised 
share capital, and a reduction 
in fiie share premium account. 

Mr Murray said yesterday 
that he Had invested his own 
money in Excess because it 
was apparent that Avesco 
could not do* tfaa deal while in 
the throes of the spin-off. 

The loss per share fix* the 
half was 9J9p (237p loss), a 
and earnings were (L29p (093p). 


DIVIDENDS ANNOUNCED 


Corai - Total Total 

Corent Data of ponding for last 

payment payment dMdend year year 


AbtnmtUoyd’s 
Bo tUi wI efca 
Dartmoor Trust . 

Falcon — Jnt 

Hampson texts . 

Leigh I n te rests . 
Maraton Thompson _int 
Monks Invest . 

Murray Ent 
Newpim n d - 
Sworn Trent 
Shanks a IMwin -Jnt 
TurataH fln 



Tops Estates 


Jnt 


ZS 

0-5 

2.8 

ZS 

0.55 

2-46 

1.78 

2 

1A 

0.5 

BJ23 

1.1 

ZS 

0.647 


Dec 30 
Jan 27 
Jan 27 
Jan 20 
Fab 27 


Fab 1 
Feb 1 
Jan 24 


Feb 8 
Mar 24 


0£ 

ZS 

3 

05 

046 

1.8 

2 

1.505 

05 

7.55 

Z24 

5L25* 

0606 


2.1 


3A5 


ia 

11.8 

5 

2 

7.83 

SJ96 

7 

ISOS 

1-25 

22.75 

024 

05* 

2-206 


Dividends shown pence per share net except where otherwise 
Increased capital. §USM stock. "Adjusted tar scrip Issue. 


lOn 


Abtrust Lloyd’s 
turns in £1.06m 

Maiden interim pre-tax profits 
at Abtrust Lloyd's Insurance 
Trust were £L06xn for tbe 10 
months to September 30 and 
£557,000 for the six mont hs to 
tbe same date. 

Gross revenue was £L51m 
for the 10 months with franked 
investment income of £I.12m, 
and unfranked investment 

itmnime of 

Net asset value per share 
was 84.l5p. Earnings were 
2J£P per share and the in te r i m 
dividend is 2£p. 


Kode selling computer 
lossmaker for £1.5m 


By Gary Evans 

Kode International, which fell 
into the red in the first half of 
this year, yesterday announ- 
ced the sale of its lossmaking 
computer services division, 
DCM, for an expected £1.5m. 

Mr Stephen Day, chief execu- 
tive, said conditions in the 
computer maintenance market 
had been very difficult for 
more than a year. DCM made 
in terim losses of £881,000 this 
year after bring hit by a sud- 
den fan in prices in the third 
party maintenance market in 
the latter port of 1993. 

In August, Kode saw its 
market value halved after ft 
fell into pre-tax losses of 
£515,000 (£710,000 profits) - 
there was also an exceptional 
charge of £350,000 against its 


computer services side. 

The shares hit a low of 38p, 
but yesterday continued their 
recovery with a 9p rise to Tip. 

Mr Day said that the DCM 
sale would enable Kode to con- 
centrate resources on the 
development of its profitable 
printed circuit board busi- 
nesses “where trading contin- 
ues to be strong 11 . 

DCM is being sold to Taflns 
Holdings. Kode will receive 
£1.5m, of which £900,000 is 
payable in 18 monthly instal- 
ments, subject to a reduction 
of up to £250,000 following a 
review of completion accounts. 
The proceeds will be used to 
reduce bank borrowings. 

Kode plans a capital reor- 
ganisation to replenish hold- 
ing company reserves follow- 
ing the sale. 


Murray Enterprise 
net assets rise 

Murray Enterprise raised net 
assets per share on a folly 
diluted basis from 124.42p to 
125£5p in the year ended Sep- 
tember 30. 

During the year, the trust 
extensively changed Its portfo- 
liotn order to invest in UK 
smaller companies. 

After-tax revenue grew to 
£571,000 (£64,000) and fully 
diluted earnings per share 
were 2jsp (0J26p). The final 
dividend of L^p makes a total 
of 2.1p (L505p). 


Dartmoor net asset 
value slips to 93.7p 

Dartmoor Investment Trust, 
which in October won a hostile 
bid for Sphere Investment 
Trust, reported net asset value 
per share down from U4JBp to 
93.7p over the 12 months to 
October 31. At the April 30 
year-end it was ll&45p. 

Net revenue for the six '/ 
months to the end of October j' 
was CI.Blm (£933,000) far earn- 
ings per share of 5.18p (3J39p). 

A second interim dividend of 
2J6p is declared making a total 
so far of 5.6P (Sp). 


KLEINWOBT BENSON GROUP pic 
(formerly Kteinwort Benson Lonsdale pk) 
US$100 million 
Primary Capital 
Undated Floating Rate Notes 
US$125 million 
Primary Capital 

Undated Floating Rate Notes (Series Two) 

For the interest period 30 November 1994 to the 31 May 
1995 all the above Notes will cany a Rate of Interest of 6% 
per cent per n u mm with a coupon amount of US$338,09. 


^Chemical 


National Westminster Bank 

pnaxpandritoEngttwfthBmKri 

US$ 500,000.000 Primary Capital FRfte (Series “C”) 

In accordance wUhtbeferms and Core^onsoi the Notes, notice Is hereby 
Jjven that tor the Interest Period from November 30, T994 to February 28. 
1995 the Notes w# carry an Merest Rate ot 6.0625% per annum. 

■me Merest payable on the relevant Interest Payment Date, Fhbruenr 28, 
No.37, wBI be USS 151.56 per US$ 10,000 principal 
ggpaurjtof Note and USS 1.515A3 per US$ 100^)00 pfMpri amount of 

N0te ‘ The Agant Bank 

KredeibBik &A. Luxambourgeotee 


US$900,000,000 

Floating Rate Subordinated Loan 

- - rn rflu - a loe IHU ZlMJtf 


loan to 


J^The Mitsubishi Bank, Limited 

— - P h-riw avea that for the three months imerest period from 

CempooRateef 523438% per annum. 

rvrnoon payable on 28fo Hfomaiy j»5 will amount to: 

ussioowaoo Certificate and 
IS/sSS)^ USS1.000000.00 Certificate, respectre* 

Mitsubishi Bank (Europe) S A. 

A ~ Aim# Bunk 


U.S. $300,000,000 

Tbe Tofcai Bank, Limited 

Subercfinaied Roaung Rate 
Notes Due 2000 


028438% 

haw FWal StMiNtMwntarUM 

anMumu 

MnwtaMdui 

UiteiWYiK 

UE.3 IIUHOMoa USCIE7.il 

U&SIOUQDNan LLS. >1371.10 


CS FhstB,iSion 

A0M1 


ECU 200.O00JW0 

Cause Francaisede 
D&rdoppement 


CafaaeOntnle de Coopemlon Eamrdqne 
Floating Rate Notes due 2006 

For the period from November 30, BEM to 
February 28, 1306 tbe Notes vrfll carry 
an interest rale of bKft per annum 
with an Interest amount of ECU M3. 75 
par ECU »J)M> ami of ECU 1437m per 
ECU BO .000 Note. 

The referent interest payment date artil 
be February 28, BBS. 

Agent Bank: 

A 

Banque Paribas 

mumiK 



35 YEARS OF HISTORICAL PRICE5 FOR 
CASJt FUTURES. OPnO«SAM3 
INDEX MARKETS. 

SO YEARS OFRINDAMENT/U. BVTOfttWnCN 
ON 



alia ViU 
ndua ECSY IKY 
■fat 444(8)71842 4083 


U.S. $100,000,000 



Allied Irish Banks pic 

Undated Hoating Rate Notes 
Subordinated as to payment of principal 
and interest 


interest Rate 
Interest Period 

Interest Amount per 
U.S. $10,000 Note due 
31 at May 1996 


6.5625% per annum 

30th November 1994 
31st May 1995 


U.S. $331 .77 


CS First Boston 

Agent 


U.S. $50,000,000 



AUSTRIA 

Raiffeisen Zentralbank 
Osterreich AktiengeseUschaft 

Floating Rate 

Subordinated Notes Due 1996 


Interest Rate 
Interest Period 

Interest Amount per 
US. 96^00 Note due 
31st May 1995 


6 7 Ae% 


per annum 


30th November 1994 
31st May 1995 


U5. SI 62.73 


CS First Boston 

Agent 



European Investment 
Bank 

Yen Driit Issuance 
Progr a m m e 
Yen50,000, 000,000 
Floating rate notes due 2000 

The notes will bear interest at 


Nooember 1994 to 31 May 
1995. Interest payable on 31 
May 1995 tatil amount to 
Yen 1.718,888 per 
Yen 100.000,000 note. 
Agent Morgan Guaranty 
Trust Company 

JP Morgan 


Wells Fargo & Company 

US$200,000,000 
Floating rate subordinated 
notes due 2000 

The notes mill bear interest at 

5.75% per annual for the 
interest period 30 Nooember 
1991 to 30 December 1994. 
Interest payable on 30 
December 1994 will amount to 
US$4732 per US$10,000 and 
US$239.80 per US$50,000 note. 


Company 

JPMozgan 


First Bank System, Inc. 

US$200,000,000 
Subordinated floating 
rate notes due 2010 

Notice is hereby gioen that far 
the interest period 30 
November 1394 to 28 February 
1995 the notes mill carry an 
interest rote of S. 125% per 
annum and that die interest 
payable on the relevant 
interest payment date 28 
February 1995 will amours to 
US$153. 13 per US$10,000 note 
and US$383813 per 
US$250,000 note. 

Agent Morgan Guaranty 
Trust Company 

JPMorgan 


TSB Hill Samuel Bank 
Holding Company pic 

(Fonnerty Hffl Samuel Grwqj pkO 

US$75,000,000 
Perpetual floating rate 
notes 

For the period from 30 
November 1994 to 31 Uay 1995 
the notes ariU cany a rate of 
interest of 6JX25% per taxman. 
Interest payable on 31 Uay 
1995 wiU amount to US$331.77 
per US$10,000 note. 

Agent Morgan Guaranty 
Trust Company 

JPMorgan 


Correction Notice 

:Hansol 

HANSOL PAPER CO., LTD 


jIW 

irfdnHMMlft*MrGh,(kf 


UASX7J 

wSb Wonomi to mCmoSm I 
Notice « Kuroby oivwn that the Rate of Interns! for the trferesl Period 

November 38,1994 toMw 30, 1995, bos been fixed 6.8I25X 
and that the interest pawns on me relev an t Merest Payment Dale 
May 30, 1995 agaant Coupon No. 2wiB be US$3,463.02 m re 
of US$100,000 nominal of lbs Note*. 


i respect 


November 3ft 1994 '■ m m » 

By; CKbank,NA (Issuer Serwom}, Agent Bonk Cf»p/UiVO 



European Investment 
Bank 

Yen 35,000,000,000 
Floating rate notes due 
2008 

Notice is hereby gioen that die 
notes will bear interest at 235% 
per annam (mm 30 November 
1994 to 31 May 1995 Interest 
payable on 31 May 1995 tall 
amount to Yen 594,027 per 
Yen 50,000.000 note. 

Agent Morgan Guaranty 
Trust Company 


JPMorgan 


CREDIT COMMERCIAL 
DE FRANCE 

BOWS DUE 1997 

ISWCODE: 
XS0040688151 
Forthe period 
November 2& 1994 
to May 26, 1995 the new 
rate has been fixed at 
11,19028% PA 
Next payment date : 
May 26, 1995 
Coupon nr: 4 
Amount: 

FRF 553^0 forthe 
denomination of 
FRF 10000 
FRF 5 532^7 for the 
denomination of 
FRF 100000 
FRF 55 329,72 for the 
denomination of 
FRF 1000 000 

THE PRINCIPAL PAYING 
AGENT SOGENAL 
SOOETC GENERAIE GROUP 
15, Avenue Emile Reuter 
LUXEMBOURG 


CWAS WTBW nONALLMtTBl 
seres ovas is 

US.SOUOUOO 


Mmmi nun e.29% M Him 
teW MouoMm Sk 1804 k Ftfewy a 
ins. HM p^Hii m ustKOHO ih 


NMPrtrKHKimbi 
HiiCtoM».m.tHTiiniiM|, wi in,* 

^ fi 1 . 1 7 






22 


FINANCIAL TIMES 


WEDNESDAY 


NOVEMBER 30 


COMPANY NEWS: UK 


£ 24 m cash call will fund pharmaceuticals packaging expansion 

MY rights for £22m purchase 


By Stolon Davies 


MY Holdings, the acquisitive 
packaging group, yesterday 
announced the £22. lm pur- 
chase of ProphannaPak, a 
manufacturer of cartons for 
the pharmaceuticals industry. 

The deal is to he funded by a 
£24m rights issue which will 
increase MY’s market value by 
more than 50 per cent 

MY spent £2 4m on four 
acquisitions last year, and 
madp no secret of its desire to 
increase further its market 
share in niche sectors within 
the packaging industry. 


It is offering 47m new shares 
at 53p, on an 3-for-15 basis. 
This represents ozzly a small 
discount to yesterday's 55p 
closing share price. Malbak, 
the South African conglomer- 
ate which owns 65 pa cent of 
MY has agreed to take up 95.6 
per cent of its rights. 

About 70 per cent of Prophar- 
maPak’s sales are to the phar- 
maceuticals industry and the 
company has about a 12 per 
cent market share. MY already 
accounted for 6 per cent of the 
market, but there is only one 
overlapping customer between 
the two groups. 


Mr John Monks, chief execu- 
tive, said the takeover would 
provide improved purchasing 
power, a key factor as packag- 
ing materials account for 
almost half of costs. It would 
also benefit -from improved 
capacity utilisation and pool- 
ing funding for technological 
improvements. 

Following the acquisition, 
about 40 per cent of MVs reve- 
nues wiD come from the food 
and beverage industry, and 25 
per cent from healthcare and 
cosmetics. Four years ago it 
had minimal sales to the food 
sector and no healthcare sales. 


ProphannaPak made operat- 
ing profits of £2.6in in 1993. 
aided by some one-off items, on 
turnover of ElO.lm. MY is pay- 
ing a maTimnm £22. lm ion a 
debt-free basis), but £800.000 of 
this will be held in escrow, to 
be released if the company 
makes operating profits of 
£&Sm. MY said the purchase 
price represented less than 12 
times after tax earnings. 

Its net debt at the August 27 
year-end was £2.9m. gearing of 
16.3 per rent. 

The purchase is expected to 
have a neutral impact on earn- 
ings per share this year. 


Cherry 
picking by 
Conrad 


Singer sets up 55% 
offshoot to buy Cai 


Leigh Interests advances 3% to £5.2m 


By Geoff Dyer 


Increased earnings from ctry 
waste collection and landfill 
operations helped Leigh Inter- 
ests, the waste management 
company, to raise interim pre- 
tax profits by 3 per cent 
Profits rose to £5.2m, 
against £5.06m, in the six 
months to September 30. 
bat were held by falling 


margins in liquid waste dis- 
posal. 

Total turnover was also 3 per 
cent ahead at £58m (£56.4m). 

Profits were affected by an 
operating loss of £670,000 on 
two new waste plants in the 
Midlands. 

The Four Ashes incineration 
plant has now been completed 
and is expected to contribute 
to profits in the second half. 


Mr Arthur Kent, finance 
director, said that customer 
demand in the dry waste sector 
had grown and landfill prices 
at some sites in the country 
had increased by 2Q per 
cent 

Coal extraction and process- 
ing also showed “small but 
useful” increases in profitabil- 
ity and turnover. Margins in 
the liquid waste sector contin- 


ued to decline, because of 
greater competition. The com- 
pany hopes to benefit from 
tighter regulations, including 
the yet-tonbe implemented Elf 
Landfill Directive, which 
requires liquid waste to be dis- 
posed or at treatment plants. 

Earnings per share and 
interim dividend were both 
unchanged at 5.5p and 2.46p 
respectively. 


Conrad, the sports and leisure 
company, is strengthening its 
team, paying up to £l.D3zn for 
SLP Consultancy, writes Nigel 
Clark. 

The move adds the defensive 
capabilities of Mr Trevor 
Cherry, the former Leeds 
United and England fallback, 
to the attacking brilliance of 
Mr Bobby Charlton, the 
former Manchester United and 
England forward. 

SLP. of which Mr Cherry is 
managing director, is a 
marketing and corporate 
hospitality company which 
will link closely with Conrad's 
Bobby Charlton International, 
the soccer consultancy and 
promotions business. 

Mr lan Townsend, Conrad’s 
finance director, said there 
would be overlap where the 
two companies could help 
eachother. 

To help fund the transfer 
Conrad is raising £900,000 
through the placing of 25m 
shares at 4p. 

There is an initial signing 
on fee of £-450,000. satisfied by 
shares and £300.000 cash and a 
further performance-related 
payment up to £575,000. 


By Pater John in London 
and Christopher Brown-Homes 
in Stockholm 


Singer & Priedlander, the 
merchant hank, is settingup a 
new Swedish subsidiary. Sifrig, 
to takeover over Carnegie, the 
international broker owned by 
Nordbanken of Sweden. 

Singer will hold 55 per cent 
of Sifrig with the balance 
owned by Carnegie staff. 
Through Sifrig it will pay £45m 
for its share in the company 
and as Singer & Friedlander 
Group it will give an additional 
£8 .5m, payable over trine years, 
far the name and goodwill. It is 
not buying Carnegie's Swedish 
and Norwegian, bonds busi- 
ness. 

Mr Sven-Ake Johansson, 
Nordbanken' s deputy chief 
executive, said the bank would 
receive a total payment of 
SKrL23bn CElMm). "The kind 
of international stockbraking 
business in which Carnegie 
specialises is not a core busi- 
ness for us,” he stated. 

Singer is raising £49m to 
fund thp investment. It intends 
to make a £2Sm placing of 15- 
year convertible stock to quali- 


fying shareholders wtth an 

open offer cm the basis 
^mal for 19 ordinary. The 
stock carries an &5 per oern 
coupon convertible at i iz.s 
shares tor each £100 of stock. 

It has ah** takpn out a £2Qm 
multicurrency bank loan. The 
frnftrmtng and placing win be 
carried rot by Singer's broker, 
BZW. • , 

Mr John Hodson, Singer’s 
chief executive, said: "This is a 
continuation of the policy we 
have been building up of tak- 


art, the broking boos^J^d 
sizeable stakes m Associated 
Nursing graces, Edgar 
Hamilton, the 

don broker* .and Peoptes 
Phone, a provider of morale 


va Sa Fondkommission 
was established in 1932 in 
Stockholm to provide stock- 
broking to Swedish investor* 
It has 400 staff and offices 


The group already has a 
majority stake in Coffins Stew- 


uuuusuwu „ . 

Itwas acquired by Nordbannsx 

to 1988. • 

. ft wiwte operating profits of 
£2Qra in the fiat half, although 
the figures were inflated by 

*k i < 4i Horlinff vnL 


tunes In the first quarter. 


Neepsend expands by 7% 


Neepsend, the Sheffield-based 
(mgmMrmg group, lifted pre- 
tax profits 7 per cent, from 
£472,000 to £506j000; to the half 
year ended September 30. 

Turnover of cont i nuing 
operations was 5 per cent 
ahead to £94fitn (fiJLOlm) and 
the pre-tax figure was after 
lower Interest charges of 


£89,000 (£141,000). 

Earni ng s- per share came 
through at UJp (LS2p) and the 
ftiterirp dividend is held at 
ft®. 

Mr Nicholas Jeffrey, the 
chair man, said that white car- 
rent trading across the group 
remained uneven, recent 
orders had been good. 


V---& -J 


ANGLO AMERICAN CORPORA 
OF SOUTH AFRICA LIMIT 




VTi ’-77m 


mmuttwweMNiM ntfawoMiwiiiiMaMiiK viwn.nim 


Interim report and dividend announcement 

Unaudited consolidated results f © r s a o sin months ended 30 September 1 904 

■ interim dividend up 16% at 110 cents e Attributable earnings up 27% at R794 million n 
B Total net earnings up 18% at R1 560 million b Recovery in local and international economies boosts commodities B 

CHAIRMAN'S REVIEW | : 1 Polifitol and economic developments 



CHAIRMAN'S REVIEW 

Comment en results 

For the six months ended 30 September 1994, total net earnings amounted to RI 560 
million (670 cents per share) an increase of 18% from last year's restated earnings of 
Rl 327 million (571 carts per share) for the corresponding period Attributable earnings, 
which exclude the retained earnings of associates, increased by 27% to R794 (341 cents 
per share). The interim dividend was increased by 16% to 110 cents per share and was 
covered 3.1 times by attributable earnings and 6.1 times by total net earnings. 

In tbe annual financial statements for the year ended 31 March 1994, certain 
modifications to the Corporation’s accounting policies were introduced to harmonise 
more closely with Internationa] Accounting Standards, and to reflect the significant cost 
of unfunded post-retirement medical benefits. The interim statements have been 
prepared in accordance with these policies and the comparative figures for the six 
months ended 30 September 1993 have been appropriately restated. The effect of these 
changes was to increase the prior hall year's reported earnings by 4% from 549 cents per 
share to 571 cents per share. 

Income from investments Increased by 20% to R828 million mainly as a result of 
significantly higher dividend income from mining financial and gold interests, together 
with generally improved dividends from industrial, financial and other mining interests. 

Trading income increased by 24% from R214 million to R265 million. Trading income 
from coal was boosted by a higher volume of export sales and the containment of 
working costs. Tbe surplus on realisation of Investments increased from R76 million to 
R149 million from the continued sale of certain Don-strategic gold holdings, mainly by 
Anglo American Gold Investment Company (Amgoid), together with the sale of the 
Corporation’s Interest in Argus Newspapers. 

Other net expenses of R 9 million which included the provision for post-retirement 
medical benefits were lower than the restated comparative net expense of R20 million as 
a result of increased fee income, partially offset by higher prospecting costs. Taxation 
Increased by R31 million to R141 million largely because of Anglo American Coal 
Corporation's (Amcoal's) Increased profits. Outside shareholders' interest In net Income 
Increased by R76 million to R298 million reflecting their share of Amgold's Improved 
dividend income and surpluses on the realisation of investments, and Amcoal's 
improved earnings. Accordingly, attributable earnings increased by 27% to R794 million. 
Retained earnings of associates, which are transferred to non-distrlbutable reserves, 
increased by 9% from R700 million to R766 million. This increase reflects the improved 
earnings of industrial, mining finance an financial interests offset by a decline in 
Mlnorco’s adjusted retained earnings. Mlnorco reported large extraordinary surpluses 
from the sale of investments In its six months to 30 June 1993 whereas it incurred 
extraordinary losses attributable to closure and restructuring charges in the six months 
ended 30 June 1994. These items do not fall within the Corporation's more restrictive 
definition of extraordinary items and have been included In retained earnings of 
associates. 

The Corporation's net asset value at 30 September 1994, adjusting the carrying value of 
investments for the market or directors' valuation and after providing for tbe interim 
dividend was 19% up at R65.6 billion or 28 168 cents per share from 31 March 1994. 

As a result of Ford's decision to reinvest in South Africa, Samoor will now be held 45% by 
Ford and 45% by Anglo American and Amic and 10% by the Samcor Employee Trust. 

The Corporation's results for the year aiding 31 March 1995 are expected to show a 
similar pattan to those results recorded In the first six months. 



INCOME STATEMENT 




Sxmostfan 

Sra month* 

. Tfear 


. . ended 

ettded 

ended 


36.9.94 

309.93 

31*94. 


-famse , 
"* Investments 




. S28 • «S9 

-S»: > ’ 214- 

\ v m:: ■: i-. ’-n ■' 












'-PJ&S# 












In so far as any gmerwnent can estabBsb a track record in six months alter a sea change 
transition, the Government of National Unity under President Mandela has done 
remarkably weUL This is a tribute first and foremost to the excellent tone which the 
statesmanship of the president has imparted to South African society. 

But the achievement of a very large measure of political stability, one of the prime 
prerequisites for investor confidence, is also due to the high calibre leadership of the 
two deputy Presidents and of key members of the Cabinet There remain difficult 
challenges including the level of criminal violence and a culture of weak learning and 
entitlement which does not adequately stress obligations, duties, responsibilities and 
fflterprise. But the Cabinet appears to be mindful of these problems. 

The strides made towards economic stability, the second prerequisite for investor 
confidence, have been equally striking. The commitment of tbe Cabinet, and In particular 
the key finance and trade ministers, to strict fiscal and monetary discipline is not in 
doubt and has recently been reinforced by the belt tightening exercise announced by 
Deputy President MbekL The governor of the independent Reserve Bank, Chris Stals 
strongly supports these commitments and is also fully committed to the earliest possible 
abandonment of tbe financial rand mechanism. The whole issue of foreign exchange 
control Is dearly being handled responsibly. 

Businessmen understand that policies which require the addressing of the poor finandal 
legacy of the past, particularly the excessive fiscal deficit, rising levels of domestic debt 
and the balance of payments constraint to growth are politically difficult hi that they 
require patience from tbe electorate. That is why the acceptance of tbe principle of 
privatisation by the Cabinet is such an important and welcome development. It 
promises the ability to accelerate Implementation of the Reconstruction and 
Development Programme (RDP) in a financially responsible manner, whilst 
simultaneously helping address tbe deficit, debt and BOP constraints. But in order to 
extract the fuff potential from privatisation, Including widespread black economic 
empowerment aod the attraction of significant foreign investment a cartfuify structured 
and sequenced programme will have to Include the major parastatal organisations. 

Also encouragng has been the upturn in the domestic South African economy which has 
been led for the first time in decades by Increased private sector fixed investment. 
However, the fact that GDP growth for the year looks set to be closer to two per cent 
rather than the three per cent hoped for earlier in the year is a reminder of how little 
scope for error stakeholders (n tbe South African economy have and how high is the cost 
ol rectifying mistakes. The difference Is more than accounted for by strike activity and 
extra public holidays together with the necessary, bur painful, deficit reduction process 
which was aggravated by the election overspending and the consequent oneoff five per 


# 


;j$e lfl ; 

V* 


- , 




cent tax levy. 














AB stakeholders have an obligation to look for measures which could raise productivity 
in a mutually beneficial way. South Africa's mining industry, stiff the flywheel of the 
economy, is unique in facing regulatory restraints which prohibit work on Sundays, and 
In addition the new calendar of public holidays has been defined in a way which 
threatens to reduce further the number of working days for the industry, a measure 
which It can ill afford. If South Africa is to be tatematiooaliy competitive, it cannot at 
this stage of its development adopt tbe labour practices of the world’s richest and most 
productive countries. 1994 has demonstrated how adversely Interruptions to 
production processes affect economic growth and consequently government revenues 
and the achievement of key development goals. 


JOgflvie Thompson, 
Chairman 


29 November 1994 


Registered office: 
44 Mala Stmt 
Johannesburg 2001 


DIVIDEND 

Dividend No. 117 of 119 cents per share has been declared payable on Friday 13 January 1995 to shareholders registered at the close of business on Thursday 15 December 1994. The register of members will be closed from 
Friday Id December 1994 u Friday 23 December 1994 inclusive. The full conditions relating to the dividend may be inspected at the Johannesburg and London offices of the Corporation and its transfer secretaries. 

The fitll interim report has been posted to shareholders and is available from Consolidated Shan Registrar*, 1st Floor. Edura. 40 Commissioner Street. Johannesburg 2001 f P.0. Box 61051. Marshaihowt 2107} and from the Corporation's London office. 


London office: 

19 Charterhouse Street 
London ECIN6QP 



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FINANCIAL, t| Mes WEP NESDA\^nqvemBER 30 ^ 9 ^^^^ ^ ★ 

Rise in beer sales helps 
Marston to £12.3m 


By David Blackwell 

An Increase in beer sales 
volumes in spite of a fell in the 
overall market helped Marston 
Thompson & Ever shed, the 
Burton-based regional brewer 
to lift interim profits by 6-5 per 
cent 

For the six months to Sep- 
tember 24 pre-tax profits rose 
from £lL5m to £l£3m, while 
sales grew from £7(Um to 
£76£m. 

The latest figure was struck 
after charging a £43,000 loss on 
property disposal and £251,000 
costs for the share ownership 
scheme. 

The shares fell I2p to 292p as 
the group warned of volatile 
trading conditions. It was “rel- 
atively cautious” about second- 
half prospects. 

Volume sales of beer rose by 
3.3 per cent in the first half, 
compared with a claimed fell of 
1 per cent across the industry. 
Sales of the group's Pedigree 
bitter were 1.6 per cent ahead, 
while sales of the Low 'C brand 
erf low calorie bottled beer were 
up by 16 per cent 

Mr David Gordon, manag in g 
director, said the results 


■■areton, Thompson 
and Evarahod 

Share price (pence) . 

320 * — ; 


300 


280 1 



220 1 — U 1. 

1803 1804 

Source: FT Graphite 

showed “steady growth." The 
group was outperforming the 
market in beer sales, and the 
managed houses and food sales 
were doing well 
Sales In the 240 managed 
houses were 16.2 per cent 
higher, while food sales 
increased by 18 per cent How- 
ever, sales from the tenanted 
estate of 640 pubs were down 
41) per cent 

Net interest payable rose 
from £304,000 to £761,000. 
reflecting increased borrow- 
ings after the purchase of 46 



In addftkui to anatyskigtfie political and economic 
situation, the financial markets and the forestry 
Industry, this survey will -examine the 
consequences for Sweden of the vote on 
membership at the European Union, due to take 
plane on 13 November. 

For detals on advertising please contact: 

Bradley Johnson In Stockholm Liz Vaughan hi London 


Tot 448 S 781 2345 
toe 448 8 790. 7060 


T«t 444718733472 
toe *44 71 873 3428 


FT Surveys 


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TOP FINANCE (BERMUDA) H LTD 
(THE “ISSUER”) 
US$10,000,000 

9.26% GUARANTEED SECURED NOTES 
DUE 2000 

NOTICE OF REDEMPTION 


pubs from Bass in September 
last year. Gearing has risen 
from 83 to 102 per cent. 

The group said the results 
from the former Bass pubs, 
many of which had been closed 
for refurbishment, had. more 
than covered the cost of bor- 
rowing. So Ear three have been 
fully developed, and a further 
13 are expected to be com- 
pleted by the end of the year. 

Earnings per share rose from 
8. Tip to 9.9 lp and the interim 
dividend goes up from L6p to 
1.76p. 

• COMMENT 

While these results were at the 
bottom of City expectations, it 
was the cautious trading state- 
meat that knocked the shares 
back. Operating profits were 
up almost 13 per cent to 
£l3Am, reflecting the underly- 
ing soundness of the business. 
It has reciprocal agreements 
with the big breweries, a 
strong portfolio of managed 
houses, and it is probably 
ahead of the game in its 
■approach to the tenanted sec- 
tor, where it has a good Invest- 
ment programme. Profits for 
the foil year look like coming 
in at £25.5 m, giving a prospec- 
tive multiple of just over 14 - a 
little too high following the 
cold water poured on the sec- 
ond-half outlook. 


COMPANY NEWS: UK 

Hampson turns 
in £2.57m at 
halfway stage 


Tunstall advances 16% 
despite difficult markets 


By Paul Chaeseright, 

Mkflands Correspondent 

Hampson Industries, the West 
Bromwich-based group whose 
interests include engineering, 
furniture and cleaning, 
reported a 3.7 per cent increase 
in first hair profits and prom- 
ised further improvement in 
the second. 

Pre-tax profits for the six 
months to September 30 were 
£2 ,57m on turnover of £46-2m, 
compared with £2.48m on sales 
of £435m in the 199344 first 
half. Last year’s figures, how- 
ever, included losses of £97,000 
from discontinued operations. 

The results are in line with a 
company statement made last 
month, when Hampson said 
that although second-half prof- 
its would increase, they would 
be unlikely to meet brokers' 
expectations. Then market 
forecasts were that Hampson 
would make pre-tax profits of 
about £6 -5m in the full year. 

Brokers' predictions have 
since been reduced to about 
£5.7m, while Hampson con- 
tents itself with the comment 
that “there will be an increase 
In profits earned in the second 
half” compared with the those 
of the first half. 


But the directors have given 
what they can “an fruticatfon 
of our confidence in the 
future" with an increase in 
the interim dividend to 
OJiSp from 0.5p last time, 
when total annual payments 
came to 2p. 

First half earnings per share 
were 2J5p against 2£2p in the 
1993-94 first halt 

Operating profits In the 
period were static at £2jJ6m. 
Sluggish UK consumer spend- 
ing is hurting furniture 
operations, although the group 
holds Us market share. 

Aircraft refurbishment has 
been held back by falling 
defence orders, but Hampson is 
repositioning to obtain more 
civil orders; this could take 18 
months. 


By Peter Poerse 

Tunstall Group, market l*adw 
in emergency communications 
systems for the elderly, lifted 
pre-tax profits by 16 per cent 

from £6.47m to £7.53m in the 
year to September 30. 

Mr Michael Dawson, chair- 
man, said twg had be en a "sat- 
isfactory performance in diffi- 
cult markets”. T turnover grew 
12 per cent to £S(Um (£44Am) 
and operating profits rose to 
£7.21m (£6.24m). The acquisi- 
tion of a Dutch subsidiary con- 
tributed £L5Sm to the former 
and £5L000 to the latte. 

The core Tunstall Telecom 
supplies and maintains hard- 
ware, software and emergency 
systems to the public sector. 
eirw> the transfer of the Care 
in the Community programme 
from local authorities to social 
services. 

Mr Dawson was pleased with 


PiperNet, the group's manage- 
ment information systems 
which he sees as the main 
engine of growth in the UK. 
While Tunstall has competitors 
In the emergency communica- 
tions field, PiperNet - into 
which it has invested some 
£3m - is unique and under 
application for patents. 

Tunstall electronics used to 
make electronic devices - such 
as satellite decoders, test 
equipment for the telecoms 
industry and products for vir- 
tual reality systems - for 
external manufacturers. This 
company now only manufac- 
tures for other Tunstall compa- 
nies. while Mion Electronics 
was created as a contract man- 


ufacturing business. 

Mon and Tunstall Electron- 
ics up to January marin only 
£236,000 (£495,000 from the pre- 
vious Tunstall arm) after 
heavy start-up costs. Turnover 
was £5.85m (£358m). Demand 
increased for the non-UK com- 
panies and they turned over 
almost £llm. However Ger- 
many was the exception and 
manufacturing there is being 
relocated in the UK. 

Interest receivable slipped to 
£246,000 (£263.000) and the cash 
pile fell to £3.72m (£6.42m). 
Earnings rose to isip (135p 
adjusted for January's l-for-l 
scrip) and a raised final divi- 
dend of 2.5p (2J25p) gives a 
total of 3.85p <35p). 


Provisions leave BDA 
with deficit of £545,000 


Memory for market 


Memory Corporation, a 
Scottish company which has 
developed a new technology 
which will lowo- the cost of 
producing computer memory 
products, is coming to the 
Stock Exchange in December 
via a placing which will raise 
about £2m and value the com- 


pany at some £20m. 

The shares will then move to 
the Alternative Investment 
Market when it is launched 
next year. 

The pathfinder prospectus 
suggests that turnover will 
reach £llm in 1995, and pre-tax 
profits of£3£m. 


BDA Holdings, the property 
investment and development 
group whose forma: chairman, 
Mr Brian Duker, was ousted 
from the board in August, 
swung Into the red with a pre- 
tax deficit of £545,000 for the 
six months to July 3L 
The outcome, against profits 
of £28,000, was struck after 
provisions for a number of 
items Including professional 
costs in respect of an abortive 


merger and costs associated 
with the removal of Mr Duker. 

Mr Richard Wollenberg, 
BDA’s new chairman, said the 
group had achieved a 
break-even trading position. 
However provisions left an 
operating loss of £499,000. 

Turnover was £711,000 
(£1.03m) and interest costs 
were £46,000 (£47,000 credits). 
Losses per share emerged at 
3.01p (0.15p earnings). 


dated as of 

Secured Notes between the Issuer and Texas Commerce Bank 

hen*, bring oiled *»£*<**« 
Ns™®* 1 VT^ 'r .u,. on December 7. 1994, at par ph» accrued 

__ nsfe-med Note wfll cease accn,ing &xan ““ 

the redemption does not occur. FWJure to 
D ^ remb rtlw>i^on December 7, 1904 does not constitute an Event of 
redeem the 1 Note the Notes will continue to be 

Defend HWdeni of Bearer Note 

° ats£3nriil ££?^^ 

SiaEW 30ft 331, 334, 339, 3$ 383, 3®. 
2S5 '^^’SS6:4SSS749?SS600 1 507 1 6I5,E8 1 538,6«, 
401, 43a. jg- S? Sr M E8ft SR EfiQ, SB ,m 62ft 627. 64L 648. 
648, ®ft gg- S’ gS; nO 714, TO 732, 746, 74* 774, TOO, 

786, and 80ft are hereby requested tosanwdw the 

Mft be redeemed at 00 c or the following locada® 

Banquetetenuuionale a Luxc^ ourg,SA . 
N^Bnissete; or Union Bank or femtewtond, 

Zurich. ■ 


pc n't j 1 

INDEX, 


Tb. MAS Lr-h« 1" W e * ** ftp - ' 

brodMtl new 1667 

. 4ecoa^«mtiP«%PiWM4* w,a * allllul * 


THE 


WALPOLE 

v COMMITTEE 


British Excellence and Quality 


AN OCCASIONAL SERIES 


Holland & Holland 

Our reputation as Master Gun makers was founded upon unstinting 
devotion to innovation and outstanding craftsmanship. Since 1835, this 
proud heritage has nurtured the entire world of Holland & Holland to 
create products of unsurpassed refinement. Hand-built guns, classic field 
jackets, tailored tweeds, elegant luggage, cashmere knitwear and richly 
coloured silks, all celebrate our distinguished lineage. In London, and now 
in Paris, Holland & Holland is the convivial meeting place for all those 
who share our passion for fine traditions. 

Each and every one of our products embodies a commitment to quality 
without compromise. This is perhaps most finely expressed in the creation 
of a 'Best 1 London shotgun. So intricate and specialised are each of the 
processes involved that five years of apprenticeship and a lifetime's 
practical experience at the bench seldom allows any man to become 
master of more than one aspect of gunmaking. With each gun, over 800 
hours of painstaking handcrafting separate the first cut on a raw chopper 
lump forging from the final linseed buffing of the finished walnut stock. 
The outcome is a thoroughbred weapon of purest pedigree that will serve 
for many generations. 




2SSsjS*&3 sge&sp. , 





The Committee, which was established in 1992, aims to focus attention on British excellence, 
style, craftsmanship, innovation and service . These are qualities which all its members share 
and for which British products and services are renowned around the world . 

For further information, please contact: 

The Director, The Walpole Committee, 40 Charles Street, London W1X 7PB, England. TM: +44 71 495 3219 Fax: +44 71 495 3220 





24 


FINANCIAL TIMES 


WEDNESDAY NOVEMBER 


30 1994 



COMMODITIES AND AGRICULTURE 


World wheat production 
estimate reduced further 


By AUson Maftfand 

This year’s world wheat 
production estimate has been 
revised down again to 526m 
tonnes - aftn tonnes below last 
year - with stocks estimated to 
be at their lowest level for 15 
years, the International Wheat 
Council said yesterday. 

It pat global wheat output 
4m tonnes lower than last 
month's estimate, the latest in 
a steady downgrading since 
the start of the year, when it 
forecast a crop of 562m tonnes. 

The further fall is blamed 
mainly on reduced output in 
Russia and Ukraine. The Rus- 
sian harvest is estimated to be 
7.6m tonnes lower than last 
year’s at 35.9m tonnes. The 
planted area was down because 


of a chronic shortage of inputs, 
and harvesting was hampered 
by poor weather in central 
Russia and the Urals. Early 
frosts may have meant that 6 
per cent of the crop was not 
harvested. 

In Ukraine, the harvest is 
put at 153m tonnes, down 5.7m 
tonnes from last year, because 
of an itnnsmiiy hot summer. 

World wheat stocks are 2m 
tonnes lower than last month's 
estimate at 104m tonnes, the 
smalipst figure since 19W50. 

However, overall grain pro- 
duction for the year is esti- 
mated to be 42m tonnes higher 
than in 1993 at L39bn tonnes 
because of an increase in 
coarse grain production, 
mainl y in the US. Output of 
coarse grains is put at 864m 


tonnes - up 10m tonnes on last 
month’s forecast and 74m 
tonnes highe r thaw in 1993. 

The estimate for the record 
US maize crap has been raised 
again to 254.3m tonnes, up 
93.1m on last year. Coarse 
grain crops were also bigger in 
central Europe and the Bal- 
kans, India and Morocco. 

The IWC tentatively expects 
wheat production to recover to 
560m tonnes next year. Cereal 
growers in the European Union 
and the US have responded to 
higher prices resulting from 
tigh tenin g supplies and declin- 
ing stocks, it says. 

But it warns that continued 
eco n omic problems in central 
Europe, the Balkans and much 
of the former Soviet Union 
could inhibit growth in output. 


Indian alumina refinery planned 
to produce lm tonnes a year 


By Kenneth GoocBng, 

Mining Correspondent 

An USSSoom alumina refinery 
is to be built in India to pro- 
duce lm tonnes a year of the 
essential raw material for alu- 
minium production. 

Output should begin at the 
turn of the century, a time 
when a serious shortage of alu- 
mina “is a strong possibility”, 
according to the CRU Interna- 
tional consultancy group. 

The Indian plant will be 
located in the eastern state of 
Orissa, a region with plentiful 
reserves of bauxite, the raw 
material for al umina. 

At present ownership of the 
project is equally shared by 
Indian Al uminium Company 
(Indal). Tata Industries of India 
and Hydro Aluminium, part of 
Norsk Hydro. Norway's biggest 
industrial group. Indal. in turn, 
is 40 per cent owned by Alcan 
of Canada. The partners plan 
to widen the ownership by arr- 
anging a stock market floata- 
tion for Utkal Alumina Inter- 
national, set up to operate the 
plant Utkal will use technol- 


COMMODITIES PRICES 


ogy supplied by Alcan and Alu- 
suisse. 

A S5m feasibility study 
suggested that the refinery 
could produce superior grade 
alumina for $80 a tonne com- 
pared with the present world 
average or $142. 

UK mUtSHOUCT STOCKS ~ ~ 

(As a! Monday’s doss) 


AJurrortum 

-2SU2S 

to 1 .B42.SC6 

Mummuin alloy 

+900 

10 27.040 

Copper 

-1JSSD 

to 31S.7T5 

Lead 

-625 

10 358575 

Nfctol 

-S2Z 

ID 150.732 

Zinc 

-75 

to 1.206,700 

Tin 

+25 

JD28J25 


Most of the output will be 
exported, mainly to smelters in 
the Middle East and North 
America. 

Meanwhile, CRU. in its latest 
five-year outlook for alumina. 
suggests that construction 
must start on four or Five big 
new projects in the second half 
of the 1990s to avoid capacity 
shortages. 

However, in the short term, 
the outlook for alumina prices 
is not good. A price recovery 
from present depressed levels 


might not begin for up to 12 
months, says CRU. 

There are no signs that those 
companies that temporarily 
shut down primary aluminium 
smelting capacity following the 
international trade agreement 
early tins year are gearing up 
for early re-starts. Fixed prices 
for one-year alumina contracts 
have drifted down to S125 to 
S135 a tonne for 1995 delivery, 
while spot prices range 
between $110 and $120 fob. 
depending on origin. 

But CRU is forecasting 
strong demand growth for alu- 
mina - by 4 per cent a year 
starting in 1996 to the year 
2000, compared with only a 1 
per cent increase in refining 
capacity. It says this will lift 
al umina prices above $300 a 
tonne within three to four 
years. 

• London Metal Exchange 
al uminium prices yesterday 
recovered Monday's losses, the 
three months position closing 
$39.50 up at $1,88930 a tonne. 
Five Year Outlook for Alumina. 
from CRU, 31 Mount Pleasant. 
London. WC1X OAD, UK 


Pakistan sets out its stall for oil investment 




Farhan Bokhari on efforts to present a more welcoming aspect to foreign companies 

include armed rbbbert» «w 
d emand s for huge 


P akistan will try to 
attract new British 
investments in the petro- 
leum sector this week, stress- 
ing the benefits to investors of 
the country's recent reforms. 

Ms Benazir Bhutto, the 
prime minister, opens a Pakis- 
tan Investment conference in 
London today at which inves- 
tors in various sectors, includ- 
ing petroleum, will be urged to 
step forward with new invest- 
ment plans. 

Among the important devel- 
opments in the petroleum sec- 
tor this year, the government 
has committed itself to pro- 
cessing ail requests for explo- 
ration from foreign companies 
within three months. Previ- 
ously it could take more than 
two years before 3 company 
was granted an exploration 
licence. Foreign investors have 
also been assured foil freedom 
to repatriate capital and prof- 


its, and will be allowed fall 
ownership of local companies. 

Pakistan has an important 
stake in the success of this 
effort, in particular for the 
improvement of its balance of 
trade. Last year, the country 
imported oil worth over 
USSl.Sbn, about a sixth of Its 
total import bilL It requires up 
to 280,000 barrels of oil a day 
but produces just under 60,000. 

Aside from encouraging 
investors to become more 
active in exploration, new 
agreements have been signed 
recently for the setting up of 
six new oil refineries. At pres- 
ent Pakistan has capacity to 
refine up to 140.000 barrels a 
day at three plants. These 
plants, however, are in need of 
large scale repairs and modern- 
isation. senior officials say. 

The government estimates 
that it will receive investments 
worth over $1.9bn for oil refi- 


neries from private investors 
by the end of this decade: 

Its optimism over the suc- 
cess of its effort is based 
largely on estimates of over 
197m barrels of crude oil is 
reserves. These are mainly 
located in the south-western 
province of Baluchistan and 
the southern province of 
Sindh. “We hope to further 
accelerate these activities ” 
says Mr Anwar Sa Mafa Khan, 
minister for petroleum and 
natural resources. *We take 
weeks in taking a decision 
rather than years," he says, 
a ddi n g that foe new measures 
have given fresh encourage- 
ment to oSl companies. 


company also to be given 


M 


r Khan is encour- 
aged by recent agree- 
mfnte with Occiden- 
tal Petroleum and Union Texas 
to drill more exploratory wefls. 
He expects Shell and Omani cal 


frhftt in addition to the 18 for- 
eign oil doing bus- 

ness in Pakistan, at test 30 
more havfr shown an interest 
in examining foe possibilities 
of exploratory work. 

The petroleum minister is 
convinced that developments 
in this sector will be crucial for 
t he success of foe country’s 
effort to set up new power gen- 
eration plants, especially oil- 
fired thermal tmits. “With the 
up of all these thermal 
Traits you'll need s lot of ofl" 
he says. 

Despite foe government’s 
commitment, some analysts 
are stfli nervous aver possible 
setbacks. Concern to running 
high that law and order prob- 
lems c ou ld affect the work of 
oil companies, especially in 
remote parts of Sindh and 
Baluchistan. ■ These could 


mg 


decent reports that foe gov- 
ernment of Baluchistan and 
the Federal government m 


issues. sucM* 
the division of royalties, has 
added to such concerns. Mr 
Khan denies, however, that 
there axe any diaag re e m i art a- ... 

Nevertheless, - Mr W aar 
Ahmed Jogezai, a fong eroafr- 
uty speaker of the paniaiiKOt 
hi Islamabad and a politician 
from Baluchistan, warns that 
such “bottlenecks” must be 
removed before the aa wincgn- 
lives can succeed. “The foreign 

Investor has got tube given an 

assured law and ratter situa- 
tion. What would you do in the 

wilderness of Baluchistan iff. 
you have an area and you cant 
really get in there?" he a sks .:. 


Agricultural research group tackles financial crisis 

John Madeley on problems caused by £ a false complacency about food security! - 


A financial crisis affect- 
ing a world-wide net- 
work of 17 agricultural 
research centres is being tack- 
led by plans to make invest- 
ment in research more attrac- 
tive to governments and 
international banks. 

The centres are funded by 
the Washington-based Consul- 
tative Group on International 
Agricultural Research, which 
is made up of over 40 aid 
organisations and private sec 
tor investors. Most of the funds 
come from aid budgets: Britain 
last year contributed 89.5m. 

The 17 centres, which 
include the International Maize 
and Wheat Improvement Cen- 
tre in Mexico and the Interna- 
tional Rice Research Institute 
in the Philippines, account for 
only 4 per cent of worldwide 
spending on agricultural 
research. But they have devel- 
oped most or the high-yielding 
varieties of rice, maize and 
wheat, and are widely regarded 
as haring an influence on 
national research and agricul- 


tural development much 
greater than their size would 
suggest. 

In the past few years they 
have changed from being cen- 
tres concerned with increasing 
food output at virtually any 
cost and are now stressing the 
protection of the environment 


about S270m a year, in both 
years. This is $40m a year 

hi gher than gpwnod likely she 
months ago, when m a n y of the 

w» n tr p s were raaferag n r te , 

At the CGIAR's recent 
annnal meeting in Was hi ngt on 
the group's eh airman, World 

Rank Vipp-Pr pgirfam* Mr fcmafl 


Funds for agricultural research 
have declined in recent years, in 
line with cuts in aid from 
Western countries 


in our judgment, . 

But.be said foe financial cri- 
sis that had affected foe cen- 
tres had “unmasked some 
problems about how decision 
making had been done”. 

At present, donors give the 
centres both “care funding” for 
their general work and money 
for specific programmes. In 
future, donors will be able to 
chose to fund a project dr part- 
project, bat will have to bu3d 
in a airwmit for ovor- 


and the sustainable increase of 
food output. 

But funds for agricultural 
research have declined in 
recent years, in line with cots 
in aid from Western countries. 
In May this year, the World 
Bank, the CGIAR’s largest 
donor, offered extra funds for 
1994 and 1995 which reversed 
the decline, giving the centres 


Serageldin, p ointed to radical 
changes that were needed for 
the centres to secure funding 
beyond next year. 

Mr Serageldin the cen- 
tres had “a tremendous suc- 
cess record”, but bad suffered 
“from foe general redaction of 
attention to agriculture and 
agricultural research every- 
where in the world. There is. 


“It would then be clear 
where the money has crane 
from, and where it’s going, and 
this would be more popular 
with donors,” said Prof Eric 
Roberts of Reading University, 
who is chairman of the board 
of the International Crops 
Research Institute for the 
Semi-Arid TYopics in tafia. " 
Unde - foe revamped system, 
the international centres will 
also try to forge stronger links 
wttfr national agricultural pro- 
grammes. 

The centres have attracted 


criticism for not getting the 
results of their research into 
Farmers hands, Prof Roberts 
said that foe centres would 
now be trying to attract on to 
their boards more representa- 
tives of national research pro- 
grammes. '■ 

A new research agenda is 
said Mr Serageldin, ."to . 
address the pro ble ms of tomor- 
row. The changes &erae mak- 
ing are. to enable them (the 
centres], to be even more effec- 
tive". Thexcrntres-are broaden- 
ing their work to -take entire 
forming syste m s,' foe environ- 
ment and population pre ss u res 
into account be said:“bat they 
are not abandoning the effort 
to consolidate the gains of the. 
past as regards TWducfionV 
The CGJAR network will be 
streamlined at the start of l995 
when two international live- 
stock centres, hi Ethiopia and 
Kenya* toill integrate their 
activities into anew body, foe 
International .Livestock 
Research Institute, based in 
NairobL 


BASE METALS 

LONDON METAL EXCHANGE 

(Pnces font Ama l gama ted Motel Trading) 

■ ALUMINIUM, Wl 7 PURITY IS per tonne) 


Precious Metals continued 

■ GOLD CQMBC (100 Tngy oil: S/boy oz.) 


Dor* 


Open 



Cm* 

3 rnthe 

Close 

1863-70 

1889-90 

Prewjua 

1833-34 

1850-51 

HlghAow 


1897/1815 

AM Official 

18S1-S3 

1870-71 

Kerb ckne 


1880-2 

Open m. 

2S9.2S4 


Total daily turnover 

85,497 


■ ALUMINIUM ALLOT (5 per tome) 


Close 

1625-35 

1860-83 

Previous 

1805-10 

1836-40 

WtfVtow 


1865/1820 

AM Official 

1780-80 

1820-30 

Kerb dose 


1885-75 

Open tot 

3,085 


Total daay tunow 

472 


■ LEAD (S per tome) 



dose 

630331.5 

648-60 

PravkM 

6523-533 

570-71 

rtgfvfow 


880/520 

AM Offldri 

825-29 

6433-44.0 

K«b dkoft 


647-8 

Open InL 

46,038 


Total da8y hvnower 

15357 


■ MCKB.(Spertonnri 


does 

7BS6-7DS 

7820-30 

Plwlous 

7570-75 

7885-700 

MgWIOw 


7870/7540 

AM Offioal 

7700-7704 

7836-40 

Kerb doae 


7860-70 

Open InL 

69.483 


Total baity umw 

23,775 


■ -mtSpertumi 



C lose 

srus-aos 

5885-90 

Prevtaus 

8045-66 

813040 

WgMow 

5820 

0030/5860 

AM OTBda 

5828-30 

6915-20 

Karb dose 


5990-6010 

Open InL 

23.714 


ToU claBy tumarar 

7,768 


N 23NC, w>ecM Ifigti grade (S per torem) 

CkMM 

1102-3 

1130-31 

Prevfous 

1109-10 

1137-88 

H^Wkw 

1098 

1133/1117 

AM Offidol 

1098-99 

1125-253 

Kerb dose 


1130-2 

Open irtt. 

110.293 


Total d aBy Unover 

40.434 


■ COPPBV grade A fit per tonne) 


Close 

2896-98 

2854-65 

Previous 

2356-58 

2BZ3-24 

HgMow 

2880/2878 

2875/2805 

AM Official 

2876-79 

2842-43 

Kerb doss 


2887-8 

Open InL 

243,288 


Total drily turnover 

82313 



pries dongs Mgh ton lot WL 

Dsc JK1II -09 384.0 381.7 24.SJ4 31397 

£A 383.7 07 - ■ - ■ 

M> am 06 396.1 3860 61.439 25.470 

Apr mi -as mo mo u .837 ijo* 

Jon 394.1 -0.4 395.4 390 17.263 ZJ50 

tag 398.4 413 3960 3983 11,751 684 

TOM 163867 B4JB24 

PLATINUM WYMBC (50 Troy ozj Srtroy oz.) 


JM 

409.4 

■OJB 

4113 

4088 1+311 

1528 

Apr 

4119 

4U 

4180 

4133 

8329 

485 

Jri 

4182 

<3 

4203 

4182 

1364 

1S6 

oa 

«ZU 

+02 

- 

- 

816 

- 

JK 

4217 

+02 

- 

• 

12 

- 

TOW 





28832 

M49 

■ PALLADIUM NYMEX (100 Tray ozz S/troy ozj 

DK 

15435 

+070 

15800 

15325 

1390 

566 

Mar 

15810 

+075 

1S7J3D 

15825 

53W 

BIB 

Jm 

157.10 

+075 1S7JB 157.10 

HD 

42 

Sep 

15785 

+075 

- 

• 

« 

10 

Trial 





7388 

1333 

■ SLVB1 COMBC (100 Troy oz.; Cente/troy qzJ 

Dec 

SD45 

-83 

5143 

SQ20 

1 

2 

ten 

5089 

-58 

5185 

5100 28553 19,144 

Mar 

5102 

-88 

52343 

S11J) 

89 

a 

tear 

5103 

-38 

53a.p 

5180 54A53 15378 

3d 

S25.7 

-07 

5380 

snn 

8791 

317 

Ste 

5304 

•07 


6380 

BA 70 

300 


GRAINS AND OIL SEEDS 

■ WHEAT LCE <E per tonne) 

Sad Day's Open 

pries clangs Mgh Lon M ttri 

JM 105.45 +060 10545 10500 1.854 

Mar 107.15 +0.45 107.15 106.70 1,564 

toy 109.15 +045 109.15 108.70 1.681 

ted 111.00 +035 111.00 110.65 130 

Sup 85.40 +065 - 89 

Mbs 96.40 +0.40 96.40 9025 767 

Total 0066 

ri IWCAT C8T gjooau mfe; csrua/BOb HurtwQ 

Use 384(4 -30 3680 364U fl/972 4322 

tor 3790 -M 383/4 37 40 36319 BM 

tt>y 3640 -3rtJ 353/4 36410 1BS2 1.037 

Jri 335/B -2/6 338/0 335/4 11,767 1JB05 

Sep 342/0 -2A1 344/0 3420 512 21 

Use 351/4 -4/4 3SZ/0 351/0 184 19 

Trial 6«^17 13444 

■ MAIZE CflT (S.000 fau min; canta/56fc tHcheQ 

Dec 211/4 -06 2)2/8 211/2 46£44 32 471 

Mar 222/4 -OM 223/B 2220108,688 22,833 

ttqr 2290 -1/0 231/0 2280 36J0I 3*83 

Jri 233/6 -1/2 235/4 233/4 46m 6.198 

Sep 2380 -1A 240/5 2380 4/320 287 

DM 244/4 -0/6 24S/6 2440 22.483 1.142 

Tetri 387/044 OB/817 

■ BARLEY LCE (C per tonne} 


SOFTS 

■ COCOA LCE (Ertorme) 


MEAT AND LIVESTOCK 

■ UVE CATTLE CUE C4O000K)KCsraBto4 


Sea Day's 

pries charge Htgfa Law 


0p« 

M 


vbi 


Sett Dey*e 
price ctaope Agb 


Ion 


0PM 

U 


Vri 


17 

Dee 

915 

*34 

950 

911 

14364 

1321 

Dee 

67-300 

-0525 60025 67375 1&12 

4772 

35 

tor 

924 

-37 

966 

931 

42355 

8327 

Ml 

67.150 

-0825 67500 67550 2*308 

0610 

51 


929 

-38 

974 

929 

18317 13*7 

AW 

68375 

-0125 69300 88375 17316 

1369 

50 

Jri 

940 

-34 

984 

939 

7310 

494 

Jtn 

54375 

-0150 64750 64300 5395 

328 

- 

sw» 

951 

-34 

994 

950 

13.060 

638 

Aril 

62750 

-0125 82350 6Z375 2.138 

217 

33 

Dec 

970 

•32 

1010 

970 

10183 

502 

Od 

63380 

-0150 63300 63350 948 

87 

18E 

1W 




112,74412350 

Trite 


80478 11,997 


■ COCOA CSCE (10 tomes; SrtonrwBj 
DSC 


■ LIVE HOGS CME (4C,000n»; cencs/Ka) 


1197 

-50 

1259 

1190 

8 87 

177 

DK 

31-575 +0200 31J00 31.100 10266 

W5 

1225 

-50 

1285 

1208 4538410332 

Fte) 

34J50 +0525 3*800 34. WC 12389 

Z4S0 

1258 

-47 

1309 

1235 

0835 

872 

Apr 

35875 +0425 35.700 35.100 

63SB 

927 

1281 

-48 

1320 

1267 

3857 

773 

JBP 

40850 +0275 40875 40400 

3J94 

90S 

1305 

-48 

1350 

1295 

1380 

1 

Are 

40825 +0100 40825 <0600 

933 

168 

1335 

-48 

1360 

1325 

5,143 

18 

Ori 

388SD +0100 38800 30725 

m 

156 





7286212381 

TOM 


36890 

0233 


Jri 
«*P 
Dec 
TOM 

■ COCOA (ICOO] (SOR's/tonne) 


JOTTER PAD 


m PORK BELL BaS CME (4000®*; aenta/fce) 


MJ 


Mbs ner. Pay 
. 975JS1 888-61 


■ COFFEE LCE (S/tonoe! 


Tetri 


134*51 35/838 


ENERGY 


Am 

10280 

+030 10380 10275 

460 

70 

tor 

10175 

♦026 10175 10175 

134 

25 

toy 

10885 

-aio 

44 

- 

Stp 

9130 

+02S 9450 9450 

30 

2 

to* 

8525 

+010 

81 

. 

TOW 749 97 

■ SOYABEANS CST (5300x1 tten canteSOb busftaQ 


■ UUE AM Official */* rats: 1-5865 

LME Poring E/S rate; 1JS840 

SpattJ5&2 3ratteljB43 Brand .5838 9mhElJB28 

■ HHH GRAPE COPPER (COM EX) 




iters 

Opn 



Ona ebaaga fflgh km 

lot 

W 

Dec 

13 SAO 

+130 13800 13150 1450B 

0557 

Jto 

13130 

+130 13380 13285 

1,120 

187 

Feb 

13380 

+4JJ0 

766 

13 

tor 

13200 

+105 132,10 1Z380 24801 

8284 

Apr 

12986 

+385 

709 

31 

mat 

12020 

+115 128120 125.10 

2833 

468 

TOW 



53,793 19,184 




PRECIOUS METALS 

■ LONDON BULLION MARKET 
jPrtpas SRPpfled by N M BotfucM dj 

Odd (Tray az) $ pries 

Qoh 38120-38150 

Opening 38&&-383J0 

Morning fix 38170 24&207 

Afternoon fix 38120 244403 

Days High 38430484.00 

Day's Low 383.00-38130 

ftwnXHCfeea 383.80-38420 

Loco Uln Mean Gold Landtag Rates (to USS) 

1 month ...... .5. 12 6 months 162 



Uteri 

D «te 


Obee 



rites 

drill 

»b» 

Uri let 

W 

tea 

1789 

-813 

mis 

1789 96,106 28862 

Ffb 

1880 

-810 

1815 

1880 58730 13388 

tor 

1789 

-089 

18 10 

1789 SZ844 

1917 

Apr 

1880 

-806 

1886 

1880 17392 

1/79 

toy 

1880 

■884 

1806 

1980 15,494 

927 

Jri) 

1802 

- 

1802 

1800 26832 

1437 

Trite 




97180 582B4 

■ CRUDE OIL re {C/bcneO 




Uteri 

twt 


0PM 



pfca 


»Bb 

law M 

IM 

ten 

1785 

■ 8.11 

17.17 

1783 91383 16358 

Fab 

1689 

-811 

1899 

1988 38,495 

3827 

to 

18.78 

-087 

1885 

1878 15830 

1867 

Apr 

1875 

-801 

187S 

1BJ0 6306 

171 

toy 

1889 

-088 

1870 

1888 5850 

1.183 

Jrai 

1889 

-803 

1609 

1866 5307 

358 

TaW 




179,315 22/572 

■ HEATWQOO. NYMEX (42.000 US gtoL; PUS grisj 


Uteri 

tort 


Opew 



riV» 

rings 

Writ 

Lew tut 

to 

Dee 

5810 

-848 

5870 

5085 15/44 13388 

JM 

5035 

-080 

S8S6 

5030 50.176 12835 

Fsb 

son 

-855 

6180 

5085 28991 

5896 

tor 

6890 

-840 

5130 

5090 13304 

1112 

Apr 

5825 

-035 

SO, 75 

5025 9467 

967 

toy 

48» 

■045 

4A20 

4859 5,187 

43 

TOW 




148/38 36/42 

■ gas on. re (S/tooKt 




Sett 

Deyte 


Open 



price 

cbenge 

«9b 

law u 

N 

Dee 

14880 

-280 

15180 

14925 30893 

8860 

•tel 

161.75 

-1.75 15150 T31J5 2*m 

1438 

Feb 

15480 

-130 15580 153.75 18,406 

1/4TI 

MS 

15580 

-125 15680 ISLOO 10439 

1588 

Apr 

15428 

-060 1M80 15175 3457 

tat 

toy 

15380 

■050 

- 

- 944 

- 

Trite 




91996 12800 

■ NA7URAL QAS NYICT (lOflOD imBtn; S/trvtibi) 


Uteri 

tv* 


Op * 1 



Rice 

dap 

m 

low tet 

vw 

JM 

1810 

-0847 

1880 

1810 32,169 

9401 

ftb 

1820 

•0060 

1880 

1820 16/801 

1022 

Bar 

1805 

-0035 

1830 

1800 11865 

903 

Apr 

1.770 -8025 

1.790 

5/56 TfiSZ 

SSS 

toy 

1,750 

-0815 

1-790 

1.775 7533 

114 

ten 

1.775 

-0823 

1J9S 

1J75 8650 

102 


JM 

BOOK 

■3/8 

573/4 

587/4 51,114 30/021 

MW 

579/2 

-3« 

S83/0 

577/2 31,620 

5318 

toy 

686/6 

-3fl 

590/2 

585/0 16317 

2351 

Jri 

S91AJ 

-V4 

5BSQ 

5B#2 24338 

4673 

Are 

583/2 

- 4 n 

997/0 

5BU0 1394 

24 

Sep 

S9443 

■an 

507/0 

SW2 1.198 

105 

Triri 




137,128 42/79 

■ 8 OVABEAN OIL CST (SOJDOfaK cental 

Sec 

2922 

+0.TZ 

28 25 

2835 19,133 

9304 

Jto 

2825 

+0.15 

2828 

2737 34,591 

11367 

■er 

Z7.17 

+aio 

2720 

2635 25340 

7353 

Mey 

28.11 

+aoi 

26.15 

2636 17,357 

2386 

JH 

2581 

+001 

2537 

25.15 10326 

2394 

»re 

2197 

+042 

2530 

2188 2369 

300 

Tetri 




119389 35388 

■ SOYABEAN AEAL CST (10® Most S/tcri) 


Dec 

1572 

■47 

1593 

1563 19.442 

8324 

tea 

1584 

45 

1813 

1583 28445 

5,165 

tor 

1634 

-13 

1649 

1823 23384 

2471 

tew 

167-3 

-13 

169.1 

1683 11317 

1,145 

JW 

172J 

-12 

174JJ 

171.7 11390 

1317 

*re 

1718 

■03 

175.4 

1710 2327 

209 

row 




182326 20,192 

• POTATOES LCE f£/torri$ 



tor 

2304 

. 

. 

. . 


Apr 

2888 

+33 

2713 

2593 1322 

221 

•tor 

2824 

- 

. 

- 2 

* 


2500 

- 

- 

- 

- 

Total 




1/3M 

221 

■ FREIGHT (BFFEX) LCE $10/Msx pabiQ 


(tor 

1911 

+1 

. 

- 238 

. 

floe 

1968 

+17 

1968 

I960 380 

17 

Jen 

1877 

+12 

1B85 

1877 1,1*8 

132 

Apr 

1766 

+T3 

1770 

1751 1,126 

191 

tel 

■ 1522 

+0 

1530 

1522 148 

7 

Ori 

16% 

-3 

- 

17 

- 

Trite 

One 

ftw 


33BJ 

347 

m 

1919 

1911 





Itee 

2911 

-74 

29 m 

2960 

102 

140 

tee 

3006 

-5 

3055 

2981 

10.714 1373 

tor 

2948 

-5 

3000 

2B2S 

9/090 1394 

tor 

2915 

-8 

2965 

2899 

4383 

157 

tet 

2900 


2925 

2888 

14« 

24 

S*P 

2870 

-8 

2886 

2870 

23*4 

22 

Total 





bjm zjm 

■ COFFEE *C* CSCE (37.5009* cantaflbd) 


Dee 

15850 

-1.75 

16325 

158.75 

490 

104 

tor 

10220 

-230 16725 16135 17387 43% 

toy 

16145 

>3.15 

16930 

18120 

83B9 

726 

Jri 

16050 

-350 

171.70 

10B30 

2,441 

179 

S«P 

16750 

-3.75 

17325 

16730 

1,081 

72 

Dec 

168.75 

-340 

17230 

171.75 

914 

33 

Trite 





29/251 5,77* 


Fib 

33550 +0550 37.100 35300 

8326 

2315 

Us 

38600 +0675 3720 35750 

1348 

357 

toy 

38300 +8250 38450 37.150 

482 

60 

Jri 

38800 +0350 39.100 38150 

390 

53 

Are 

38100 +8300 38100 38700 

123 

18 

Feb 

Trite 

46300 +0000 48000 41500 

1 

18371 

1 

23D3 


CROSSWORD 


No.8,624 Set by CINEPHELE 


LONDON TRADED OPTIONS 

Strike pries S tore* — Cofla— — Puts — 
■ ALUMNUM 


■ COffg 0CQMU3 oenta/pound) 


Orri. driy 

ism* 


Mob 

. 155-51 
. 188.11 


Prs*. dor 


■ No7 PREMKE4 RAW SUGAR LCE (cents/fas) 

Jin ISLOO ..... 

tor 1492 +022 15.15 1492 90 394 

easy 1407 -0.48 880 

Jri 1473 4125 1492 1492 450 2S0 

Trite 1,400 S44 

■ WHITE SUGAR LCE (3/tonna) 

tor 41140 -9.40 42150 407/00 11.640 I.45S 

toy 40470 -8J0 41100 40050 4586 442 

4s« 39440 -a BO 401.00 39050 1940 158 

Oct 365.40 -490 37090 36150 1,567 129 

DSC 361 JO -120 386J0 35400 131 It 

tor 381.10 -12S - 199 

TWri 2Z.113 2,196 

■ SUGAR *11* CSCE (112J00Bje; centa/fca) 

tor 1470 -048 1&2D 1463100^8521174 

toy 1489 -0.41 1507 1467 34S821OB10 

JW 1443 -031 1472 1440 21028 4260 


(99.7%) LME 

Feb 

May 

Fafa 

May 

1800 

.130 

158 

56 

92 

1850 

102 

131 

77 

115 

1900 

78 

108 

103 

1*1 

■ COPPER 





(Grade A) LME 

Rsb 

May 

Feb 

May 

2800 

152 

123 

73 

169 

2860 

124 

103 

94 

167 

2900 — 

100 

86 

120 

218 

■ COFFEE LCE 

Jan 

Mar 

Jan 

Mar 

3000 

K/A 

. 

- 

_ 


N/A 

_ 

. 

_ 

3100- 

M/A 

- 

- 

- 

■ COCOA LCE 

Mar 

May 

Mar 

May 

950. 

N/A 

_ 

. 

_ 

975 

N/A 

m 

. 

_ 

1000 _ 

N/A 

- 

- 

- 

■ BRENT CRUDE IPE 

Jen 

Apr 

Jan 

Apr 

1800 — 

112 

123 

3 

48 

1650. 

71 

85 

12 

70 

1700 ... 

35 

71 

27 

98 


LONDON SPOT MARKETS 

■ CBUDE OP. roe (per tasrreVJsn} +or- 

tXOaf SlS97^7z -<U110 

Brant Send (dated) $16^6-6.98 +0.040 

Bfsrtt Bend LM Si 7.06-7.08 -OHIO 

W.T.L flpm as*0 $17^8-8.022 -0030 

■ OO. PBOOUCTS NWE prompt detvwy QF (Mron) 



Trial 

■ UNLEADH3 GM90UIE 
in«XWJOOU8gBlfc;rtSffalfcj 


1291910 14/812 


3 months 

SBosr Fb 

Sp« 

3 months 
6 months 
1 year 
Gold Cains 
ttygenwid 
Mapte Last 
Now SomWfpi 


.-520 12 mod 

-525 

fta — 6.05 


Uteri 

tries 

tor> 

draigt 

m 

opre 

Iteta M 

Vri 

pftrey on 

US ct3 equiv. 

Dec 

5575 

-023 

5060 

6550 12,719 11J04 

328.10 

51400 

Jen 

6805 

<23 

8SJ5 

5190 26462 

93«* 

332.75 

S2125 

fift 

55.16 

<18 

m65 

5190 11019 

Z540 

33800 

52835 

tor 

555S 

<18 

56.10 

6590 6484 

974 

350.35 

54840 

Apr 

8885 

+017 

58JS 

S&S5 B7S9 

HI 

t price 

E equiv. 

ten 

57.40 

<13 

57.40 

57 AO 2463 

on 

385-388 

248-249 

Triri 




73te11 233*7 

393^0-388^0 








90-93 

58-61 








MnorMstate 

Bropeen ftw maVat, from Metal BuBefia $ 
per b in waahouw, unless otherwise stated 
(JasJ weefc's ir brackets, irfwra Changed). AnS- 
nwny: 99 . 696 , S par tonne. 5 , 850 - 5 , 950 . Bl»> 
mit/C min. 08.9996, tome lots 3 . 60 - 3 , 90 . 
Catfcnhan: irtn. 99 . 6 %. 180-190 cents 0 
porndL-OoUb MB trae maricet 993 %. 25 . 00 - 
28.60 ( 26 . 30 - 2740 ); 993 %, 2430 - 25^0 
( 24 . 80 - 2 S. 75 V Memry. min. 99 . 99 %, $ per 76 
lb flask, 120 - 140 . Molybdenum: drummed 
matybdc ends, 9 . 00-1000 < 7 ^ 0000 ). Sote- 
nken: mh 905 %, 3 / 45 - 3 - 06 . Tungsten on 
standard n*L 66 %, 6 per tome uri (10^) 
WU* dr. «T 6 a Vknedum: mtL 96 %, off, 
1 . 80 - 2.00 ( 1 . 55 - 1 , 70 ). Urartunii Nuexce 
axchenge vdue, 7 JXL 


Oct 

1882 

■032 

1330 

1160 21/618 7,104 

tor 

13.12 

<15 

1128 

1111 

5337 1349 

toy 

1185 

<09 

1100 

1185 

948 

348 

Trite 




184 * 1047,491 

ri COT 

now NYI 

3 EC 50 J 


cbwm) 


Me 

7 U 5 

<10 

78.15 

76.70 

1,483 1,975 

tor 

7*05 

*0X7 

80.46 

7185 

30530 BABB 


HUB 

♦028 

aira 

7195 

B .704 

805 

Jri 

0080 

*033 

61.75 

8040 

5,481 

553 

Oct 

73.40 

+045 

7335 

7100 

724 

1 M 

nee 

7130 

+025 

71.70 

71 A 0 

1780 

614 

Triri 





51 , 1 * 10 M* 

■ ORANGE AECE NYCE ( 1 S, 00 Cfes; centaflb^ 

to 

10540 

- 1.10 107 jOO 10625 13,727 

2 

tor 

10045 

- 1.05 

11080 

10105 

6220 

4 a 

to 

11170 

<90 11330 11170 

1,940 

29 

Jri 

115 . 7 D 

-im 115.70 

11170 

1,030 

4 

to 

11&80 

-IM 

. 

- 

1X8 

77 

to 

11125 

+ 0.15 11125 11800 

1^18 

- 

row 





21730 

SS 2 


VOLUME DATA 

Open interest and Wofamie date shewn for 
c cntraeo traded on COMBC VYfcffiX, CST, 
NYC 6 , CME, CSCE and K Crude 01 ara cm 
day h araars. 


Prarnfewn Gaso»ne 

St 66-170 

-3 

QasOt 

£ 150-151 

-2 

Heavy Fuel 01 

£ 97-100 

>1 

NepHhe 

* 178-181 

-15 

Jet fuel 

* 189-171 

-2 

Diesel 

* 1^-168 

-2 

PtOdBUB Aigu s. Tat Loncbn pH) 3SB 5752 


■ cmra 



Gold (per tray az )4 

£38326 

<.86 

SOver (per troy aktf 

51150 

- 2<0 

Ptadnum (per tray gt) 

£41000 

♦050 

Peterium (per wy at) 

flieaoo 

<10 

Copper (US mdj 

1310 c 

+ 1 h 

Lead (US prod,) 

4 Q. 75 C 


Tin (Kuala lumpu) 

1 S.Hr 

</46 

Th Mww VtriO 

27950 

<0 

Crille (Owe vrigKtt 

11 B. 78 p 

+ 1 . 82 - 

Sheep pve weifltttfri 

10 W 7 p 

+< 11 - 

Pigs Hve arigW) 

aCLKSp 

+ 2 . 81 * 

Lon. day sugar (raw) 


+<40 

Lon. day sugar ^rfa) 

5433,00 

+ 9-60 

Trie & Lyta export 

£ 349 X 0 

+ 4,00 

Barley (Eng. feed) 

Unq. 


Mrira (US No 3 YelowJ 

snxLOi 


Wheal (US Daric North) 

2195 . 0 V 


Rritoer (Jan* 

9150 p 

+ 1 h 0 

Rrijfcer (Febjf 

SlOOp 


Rubber (KLRSSNol JuQ 

351 An 

+1 a 


INDICES 

■ REUTERS (Baste W8/3U100) 


Now 29 Neva month ago year ago 
2148.3 214&0 20995 1B28.0 

■ CRB Futures (Base 1987-100) 


Coconut 01 (PH)§ 
Palm Ot ^4atay.?§ 
Copra (Ph4§ 

Soytoeans (US) 

Qdten OudodCA" Index 
Wootops (849 Super) 


S72&0q 

S782AI 

S*J74.0q 

E16&0 

00,66c 

4640 


+ 5.0 

+IOO 

+100 

♦i as 


Now 26 
231.72 


New 25 
231 JS 


monte ago yoar ago 

233J0 220.00 


E per feme irten eomris moil p penra/kg. e sen/8». 
r rn jy i fln. in Mrinjihn esc / le y AnMr. v NatfDec. u 
Dee. t Jen. q Decun V Landsn Rryrieri. § OF Ftotrer- 
deiL 4 fitrion mrtet does. * Dtnep Pto «rigM ptaeri. * 
Ctonra on week C Prices m tor pnrign Oey. t - 14/1 V 
9t Corrected fem far wn Si7J>7^2 


All the across solutions are of 

no definition part 

ACROSS 

1 A very good article, to be can- 
died (8) 

5 Treat a gill roughly (6) 

9 Girls with beads holding me 
back (8) 

10 It seems to be born quickly or 
get old (6) 

IS Weapon for money-maker (9) 

15 Hearing the enemy I put my 
back into an article (5) 

14 A philosopher is a gentleman 
in part (4) 

16 Hot light object in wet brown 
staff (7) 

19 Little energy in organ when 
if b on its head (7) 

21 A deeds a blooming monkey 
(4) 

24 A hundred to nothing? (S) 

25 Swamp upper-class language 

27 Reprimand that may go far 

and fast (6) ^ 

28 French? Never many! (g) 

29 Painter has something to eat 
- horse? (8) 

30 Genuine return, about to sell 
in a bag? ($) 

DOWN 

1 He's for off again (6) 

2 Part of engine to obtain with- 
out request (6) 

8 Primate’s rendered the wall 

4 Strong string needed to tie 
unstable explosive (7) 

6 Writes off. when translation of 
love is set out (8) 


a kind: some of their does here 

7 Spring time? Ifs different in 
February <4,41 

8 Beliefs of communist concJu- 
sion in Central America (8) 

11 Irs vulgar to hit them, for one 
thing (4) 

IS A conflict requiring a vague 
sense of vigilance ( 9 ) 

17 Magician finds church In 
grievous errors (8) 

18 Was glad about Josephine 
taring a sweet coal (3) 

20 Rah comae in for feeding ( 4 ) 

21 Fellow almost put off by Nel- 
son (7) 

22 Insect had honey and com- 
plained (6) 

23 Increasingly crooked pin? (6) 

zs Born amid happiness of ben* 

fldal land (5) 


Solution 8,6*3 

[TIhIeIkIi llilnl aluInlTW 


im 


p a a d a □ n n 

nFfPH S3 n p]HOHaBQ 

@DQQQ(<]nn 

□aojoaaBag nasao 

aanuH@! asaa 0 B 
□ an Q n □ 

m n a R a S gGnanBm 
h q a an 
gaaaa osuasEnEij 
waasanrin 
saaaHQQQB qqdgd 
n a a Q a id □ □ 
SsSLoaHoiaaaaHtaa 






25 









FINANCIAL TIMES WEDNESDAY NOVEMBER 30 1994 * 


LONDON STOCK EXCHANGE 


Market report 


Shares make modest progress ahead of Budget 


By Steve Thompson 

The London market. in good fbni 
throughout yesterday's trading sea 
slon, was virtually unalteroc 
throughout the chancellor's Budge 1 
and settled a net 14.0 highs 
at 3,061.1. Immediately prior to the 
speech the index was standing somt 
16.4 up. The FT-SE Mid 250 fod® 
was 0.8 off at 3.489 JL 
“Shockingly boring," was the ini 
tial response from one senior mar , 
ketmaker, “at first glance, there it 

really nothing for the equity markel 

to get its teeth into." 

,, ^djhe head of trading at one ol 
the UK securities houses said he 
aspected the continued gyrations on 
Wall Street to play a much greater 
part in determining trends in th e 
market after the UK Budget 
“There were no chappy to ACT, 


the market got its gilts repo story, 
and the public sector borrowing 
requirement has been taken as good 
news by the debt products people, 
so there does not seem to be much 
in the way of bad news,” he added. 

Gilt-edged stocks, which were 
marginally firmer ahead of the Bud- 
get, began to fall away in the mid- 
dle of the afternoon, under the 
fafluenqe of US bonds and German 
bunds. The key US long bond saw 
keen selling pressure during the 
afternoon following a much higher 
than expected US Confidence Index, 
which burst through the 100 level to 
reach 101-plus per cent, against last 
month’s 87.6 per cent. 

That figure put the skids under 
US equity and hood markets and 
reignited fears that a rapidly 
expanding US economy may need 
another interest rate increase 


to cool inflationary pressures. 

Wall Street, up some 31 points on 
Monday, opened under pressure 
yesterday in the wake of the con- 
sumer index news, and was show- 
ing a fall of more than so points at 
one point, before staging a good 
rally and moving into positive terri- 
tory two hours after London dosed. 

Equity market strategists put on 
a brave face in view of the general 
lack of enthusiasm towards the 
Budget Mr Richard Jeffrey, equity 
market strategist and head of 
research at Charterhouse Tilney, 
the stockbroker, said the chancel- 
lor's Budget held out “a positive 
promise for next year". Mr Jeffrey 
said the Budget “provides a good 
background for the gilts market 
which, longer term, will help the 
equity market”. 

Answering the question as to 


whether the Budget w as disappoint- 
ing, he continued: “Who would 
want a Budget injecting more vig- 
our Into an economy expanding at 4 
per cent per annum?” 

Mr Edmond Warner, head of 
strategy at Klein wort Benson Secu- 
rities, said: “Financial markets 
must now focus on the next UK 
interest rate increase; the chancel- 
lor’s punchy inflation target will 
need higher base rates.” He added 
that the gilt-edged market may be 
disappointed by the Budget and 
said he was recommending a switch 
out of gilts and into equities, point- 
ing out that gilts have outper- 
formed equities by 10 per cent in 
the last three iwmtim. 

At Strauss Turnbull, economist 
and market strategist Mr Ian Har- 
nett described the chancellor's pro- 
posals as “a Budget for the future”. 


and said that by reducing the public 
sector borrowing requirement Mr 
Clarke would achieve two main 
things: “He frees cash for the insti- 
tutions to invest outside of gilts, 
and provides scope for tax cuts in 
the years ahead. You could say we 
needed more for the corporate sec- 
tor, but it was pleasing that the 
chancellor did not introduce any 
headline grabbing measures.” 

The Bridget brought a subdued 
tmding to an uninsp i rin g session. 
Earlier, dealers reported a barrage 
of bed and breakfast, or tax-related, 
trades estimated at around 100m 
shares and accounting for more 
than 18 per cent of the day's turn- 
over. This was 6Q9-5m shares, an 
encouraging figure for Budget Day. 
Turnover in non-Footsie stocks was 
about 400m. Customer business on 
Monday was worth some El.libn. 


FT-SC-A All-Share Index Equity Shares Traded 



Turtwor by VOftiWJ (mlBem), Expanding: • 



1804 


■ Key Indicators 
fendksas and ratios 


FT-SE 100 

3061.1 

+14.0 

FT-SE MM 250 

3489.2 

-08 

FT-SE-A 350 

1534^ 

+5.4 

FT-SE-A A»-Sham 

1520.09 

+5.11 

FT-SE-A AB-Share yield 

4.02 

(4.03) 


FT OrtSnary fncte 

2547 A 

+12L3 

FT-SE-A Non Rns p/a 

18.40 

(18.34) 

FT-SE 1 00 Fut Doc 

3068.0 

+1341 

10 yrGBt yield 

&56 

5*46) 

Long ^1/aqulty yld ratio: 

2.16 

(2.13) 


Best pteltorniiug aectora 

+2.Q 

2 


.™+1A 

3 


+1^4 



+ua 

5 


+0.0 


Worst poifraiidim s ectors 


1 

2 

Enotaoemg. Vahlctes 

.. -Z5 

... -nn 

3 


-05 



,JLa 

5 

Property 

-02 


Cash call 
worries 
hit T&N 

News of a jump in the cost of 
asbestos-related claims at 
motor parts group T&N pushed 
the stock market’s rights issue 
fears back to the very top of 
the agenda and sent the shares 
tumbling in heavy 7.1m turn- 
over. They closed 35 lower at 
186p, a drop of 15 per cent 
It also led analysts to down- 
grade profits forecasts. Nat- 
West Securities sliced back its 


T&N estimate for 1994 from 
£112J>m pre-tax to £10&5m and 
said the experience put 

a clear question mark against 
the group's earnings and divi- 
dend prospects for some years 
to come. 

The rise in maim provisions 
was totally unforeseen and it 
led to a clear deepening of 
the market’s rights issue 
concern. This surfaced init- 
ially in September when T&N 
took an option to buy 52 per 
cent of German pistons group 
Kolbenschmidt 

The worry for the market is 
that if taken up the option 
would cost some £118m, while 
an outright bid for Kolbensch- 
midt. including debt, could 


involve outlays of more than 
£350m - 35 per cant of T&N’s 
market capitalisation. 

BTR active 

Diversified industrial group 
BTR was the most active Foot- 
sie stock with 16m shares 
changing hands following a 
trading statement aimed at 
clearing the air after the com- 
pany's disappointing interim 
results. 

A dear two-way pull devel- 
oped as several lines of stock 
in excess of lxn shares passed 
through the market at prices 
ranging from 290p to 287Kp. At 
the close, BTR, which has 
underperfomed the market by 


23 per cent over the past throe 
months, was up 2 at 287p. 

The trading statement was 
modestly upbeat, with BTR 
expecting profits this year to 
Improve, but analysts said 
their briefing supplied little 
new information, with the 
company staying tight-lipped 
about potential management 
changes. 

A flurry of tax-related trades 
known as bed-and-breakfasts 
appeared on the trading 
screens ahead of the Budget. 
The trades were fronted by a 
large block of shares in insurer 
Legal & General A line of 6.7m 
shares were placed at 410p, sig- 
nificantly below the market 
price, which subsequently rose 


TRADING VOLUME 


EQUITY FUTURES AND OPTIONS TRADING 


Stock Index futures moved - 
higher for the fourth trading 
day in a row, but activity 
remained low and most traders 
dosed their books early In 


order to concentrate on the 
Budget writes Jeffrey Brown. 

The FT-SE 100 December 
contract was 3,068 at the end 
of pit trading, up 13 points for 


■ FT-SE 100 INDEX FUTURES {LUTE) 825 per tul index point 


(APT) 



Open 

Sett price 

Ctrange 

Hgh 

Law EsL vte 

Open !nt 

Dec 

3068A 

3068.0 

+134) 

3085.0 

30834) 

8873 

48300 

Mer 

30824) 

90834) 

+135 

30985 

3082.0 

1464 

1067B 

Jun 


3104.0 

+13.0 



0 

145 

■ FT-SE HO 230 MDEX FUTURES (LIFFE) £10 perftdl Index point 



Dec 

3500.0 

35000 

+iao 

3600.0 

3SOCLO 

150 

2653 

Mar 

3536.0 

36354) 

+iao 

3535J0 

3535.0 

150 

2747 


■ FT-SE tap aao INDEX FUTURES (OfcQjq 210 per fiti tadax point 

Doc - 348541 287 

M upon Nana tguu ere tor prerioue day. t Exact wkna a t w a rn . 

■ FT-SE tQO INDEX OPTION (*3061) CIO por fcJ Indus pofcX 

2900 2850 3000 SOSO 3100 3150 3200 3250 

CPCPCPCPCPCPCPCP 
Dec 181 11 13812 17 100 20 65 46*a « 73 21*? 107 11 149 5 194b 

Jen 288 33 m 47*? 137 82 IBB** 83 78*? 105*1 57^ 135 11 IBB 5 207b 

FW) ZSBh 44 194 58 ISO 1 ! 74*2 ISO's 95*? 101 107*2 19 145*257*2 178 44 213*2 

MV 237*2 SB 291 71*2180*2 90*2 141 111 118 135*2 91 164*2 75 194 B0 229*2 

Jurrf 275*2 78 213 114*a 155*2 159 113 21B 

Me *468 Me *540 

■ EURO STYLE FT-SE 100 MDEX OPTION (LUTE) CIO par ft* Index poW 


2875 2B2S 2*75 8025 3078 

Dec 198*2 7 196 18*2115*2 23 78*2 36*2 52 59 
Jen 284*2 25*218512 38 159*250*? 119 88 81 90 
Feb aa* 2 43 u»a ao 

Uv 215 80 151 94 

Junf 259 88 198121*2 

Cam 738 Pub 22S * Undertytag Max wkn Pnafanoa than ire bind on MUBmait prtem. 
f lung dated aqdry nrttK. 

■ EURO STYLE FT-SE HUD 250 MDEX OPTION fOMUQ £10 per ftp Mm point 


3125 3179 3226 

30*2 87*2 W* 12 7 163 
88 116*2 49 147 34*2 182 
» 127 51*2 1® 

99*2 14! 61 200*2 

148 166*2 183*2 220 


3400 


3800 


3450 3300 3550 

DM 83*4 31* 54*5, 53*4 334, 314, 

Cab 0 ft* 0 Sattment price* ml w*ros m ufcse at 430pnL 


FT - SE Actuaries Share Indices 


3880 


3700 


3750 


a four-day advance of 44 
points. The premium to the 
cash market was seven points, 
or two points over fair value. 

But dealers said the market 
was again mostly on hold, 
waiting for the chance to get 
to grips with the contents of 
the chancellor's Budget Box. 
Contract numbers again failed 
to breach 10,000. 

There was a certain amount 
of 'respectable” buying during 
the morning session, but by 
the early afternoon the local, 
independent traders had the 
market largely to themselves 
and little reel business was 
transacted. 

On balance, the Budget 
statement was thought by 
futures traders to be suitably 
neutral, and in late 
screen-based trading the 
December contract edged up 
to 3,072. 

Option trading Improved to 
25,991 lots from Monday’s 
17,732, with call and put 
volume evenly matched. FT-SE 
and Euro FT-SE business 
accounted for just under 
15,000 contracts. 

TS8 was the most active 
stock option, turning over 
1.050 kits, followed by Hanson 
(924 lots) and HSBC (881). 


The UK Series 


■ Major Stocks Yesterday 

VoL Chains toy's 




ktaoupt 

Attwy Muanatf 
Abort Hther . 
MledDamBcqt 
AncponWBM 
Argos 

rMOC. Bra. rtJOOHf 

fioeoc. BriL Ports 
BAAf 
BATNhfct 
BET 
BJCC 
“Ct 
BPf 

BPS Mb 

BT^t 

Bank al Sctxtendf 
BadMSt 
Blast 
BfuaCkdst 
Booker 
Bootof 
BDMtort 
BrtL Aonjopsatf 
aittt/iA*wayaf 
BrHWiQasf 
Britt* Lend 
British SaaTf 
Bund 

Bunrti C— o ff 
Buttm 

Cables Wlref 

Cadbury 8chi*ppoat 1POO 
CararJont 
Carton Comms.t 
Conta \Ayrfta 
Comm. Unkmt 
Cooketn 

CoutBuklst 

aru 

Dtxura 

Eastern Bed. t 
EaatMdand Baa. 
Becttocon*» 

Eng China cwye 
BmprioeOft 
BirotumlLHa 
Rtf 
Roma 

1AC0LLT. 


282 

33S 


MOO 

66 


1.100 

410 

-2 

5,700 

46 


417 

605 

<2 

370 

484 

42 

102 

345 

*2 

\jm 

272 


2,100 

261 

208 

554 

-6 

35 

281 


1,100 

503 

-3 

1,600 

443 

♦1 

2300 

101*2 

-*2 

383 

331 

-4 

2.100 

715 

♦10 

MOD 

422l 2 

*4 

1,100 

200 

<2 

7JDD0 

374 

♦1*2 

17/UO 

237 

+2 

on 

205 


2JOD 

605 

-2 

tjboo 

838 

48 

559 

301 

43*2 

24 

410 

+1 

2.100 

408 


ijxn 

458 

1.100 

448 

-7 

1,700 

377 

♦i 

0,100 

302*2 

40 

1J300 

36B 

-1 

Vtao 

155 


582 

IBS 


341 

MO 

-2 

2.100 

70*2 

X. 

1^00 

430 


834 

274 

+4 

380 

B72 

-3 

5J00 

203 

+4 

5p44 

633 


61 

242 

-1 

22)00 

435 

43 

S3S 

420 

42 

113 

809 

42 

844 

105 

-1 


Day's 

New 29 chge% to 28 New 2S Wow 2* 


Year Ov. 
mo yjajdK 


Earn. 

yWdtt 


P/E Xd a*. Total 
ratio ytd Return 



FT-SE 100 3081.1 

FT-Se MM 230 34B&2 

FT-SE Mkt 250 ax tnv Trusts 3485.1 

FT-SE-A 350 1S343 

FT-SE SmafiCap 1788.10 

FT-SE SmoDCap ax liw Trusts 1737.38 

FT-SE-A ALL-SHABE 1520.08 


+0l5 3047.1 3033.5 3038-6 

34900 34803 3481-2 

-4.1 3488.0 3481.0 3483JI 
+0X 192aB 1522-7 1524J 
+02 1765JJS 1782.70 17B3£5 
+0.1 173027 1732^5 1733*2 
♦03 151403 160003 151058 


■ FT-SE Actuaries AH-Sharo 


Day* 

Nov 29 chgaX Nov 28 Nov 25 Nov 24 


31868 450 

3484* 3*2 

34803 3.78 

1575J) 4.07 

1742.80 305 

1717.40 3-56 

1556.45 *J& 

Year Dtv. 
ago ytekfl* 


7.18 
5-39 
639 
680 
600 
656 
676 

Earn 

yteld% 


1644 117.78 
20.43 12434 
1699 129-95 
17 SO 5607 
2542 5297 
23.18 54.78 
17.61 5672 


1164.10 

1306BS 

1304.78 

1193.B1 

1373.41 

135692 

120298 


OiAnoat 

H3BC(75p« Wrt 

I tommomon 

Hansonf 

Haitecn* CrorttaJ 


KMcapst 

Jotnacn MnJthry 


P/E 

ratio 


Xd act total 
ytd Return 


10 MNBML EXTRACTIONtm 
12 Extractive taduWleeW 
15 08. Integrateap) 

19 OB Exploration 6 Prodfil). 


288653 +09 268101 2655-27 2951 98 237990 

3774-24 -0.1 377674 3762.18 3753.45 3335.40 

2662J1 +1 9 2631 A\ 282697 2821 .78 233990 
1881.87 +0JI 1847 JO 183671 184892 176320 


3^4 

5JJQ 

24.83 

89.83 

1084^60 

3*40 

5.44 

22.75 

9&B2 

1041.47 

3.66 

5.64 

22X17 

90.44 

1D99.51 

2.69 

t 

* 

38JJ3 

1077^4 


iSma 
LaAmket 
Land SeeuMast 


EH MANUFACTURERSt287) 

Ufcflng A CunstructfonPS) 
UBdtng MsOa A htorehepa) 
liamiwlapa} 

heralded lndueti1ab(1*9 _ 
lactronlc & Bed Eqtap(34) 
nolrwerinB(7lj 
ngkwertng. VeWctesfia 
Ming, Paper & fWqgPfl 
8 Asperated) 


29 Tenda 

30 CONSUME OOODSfarn 

31 BrowwMITJ 

32 spirits. Wines & CMarsOo) 

33 Food MenufactijnaraC23) 

34 Household Oooda(13) 

36 Heeflh CaraCri) 

37 PhanrocauficelstlZ) 

38 Tobaccod) 

40 SB««*9|2T8t 

41 OlatrftxJtDrsPQ 

42 Ldsue 6 Hotate(2S) 

43 l*x»a<39) 

44 Rataflera. Foodpg 

45 rwallera. Gan«alC4^ 

48 Support Sewlces(41) 


1863^2 

+02 1B50L21 1841.64 1842£8 182720 

4.19 

520 

2227 

71.47 

949^7 

101391 

-a9 1023.03 102ZU2 1021.99 1147.60 

3^4 

5.69 

2321 

36.70 

799.44 

1825.11 

-0.1 1B2622 182128 1B23-8D 196720 

4JM 

526 

22.62 

71.16 

868.48 

225213 

♦OJ 224091 2840L46 2242.70 219360 

4.19 

4.67 

28.70 

91.47 

1004J58 

1760.15 

♦09 1743.72 173285 172269 1899^ 

522 

523 

2297 

82.92 

905.33 

1837^3 

+0.1 1838J7 1826.18 1834.73 205&00 

4.11 

6L87 

1725 

eire 

90097 

182027 

+ai 181828 100534 1003.14 1709.80 

232 

543 

21.62 

58.97 

1040.09 

228329 

-25 2320^7 2290.88 2300.48 1S36.60 

4.42 

152 

BOJOOt 9294 

1107.01 

27K5B 

+0.1 275BL30 270Q.95 2787.58 2513.00 

3.11 

5.58 

2097 

B1.25 

1104.27 

1553.77 

+CLB 1540.46 1550^8 1550.70 1038.30 

4.34 

—640 

2026 

63. B2 

889.16 


Lagtl & Oanondf 

UoyrtaAtXMW 

UoyOa Benkf 

LASUO 

London Beet 

Lonto 

Lucma 

VEPCf 

MR 


Mark* & I 
lAdonde I 
Uunteun iWm) 

NFC 

NBlMBMf 

MtandPonMt 


2738,21 

222649 

273611 


2299.18 
1681.04 
3097 J5 
371637 

1909-95 

2522.22 

208616 


+0J 2731X58 271642 
♦1.4 219607 218155 
♦63 2721^2 271131 
+0i4 226657 2251 .43 
♦68 228654 230134 
-61 1583-29 158606 
-61 2099.58 307622 
♦62 3707.98 


272666 2817.40 
217678 2112.80 
2732^0 2817.40 
2281 34 2322 J90 
231189 2S8600 
1588.18 1693-90 
307683 307650 
3720-56 4397.20 


175648 

1587.35 

1311^4 

225677 

125607 


60 UIXiiteSM 
02 BeoWdtyOh 
84 

88 Teteuxrx nurta,1 * on8 *’’ 
Wnrarflffl 


23S5.10 

247240 

200617 

1B46S2 

178631 


+63 1903.48 189625 1B8921 1835-80 
♦64 2S1 1.17 251644 2S27A5 2701^0 
+64 207618 2061.91 205648 1852-90 
+0.6 2952.11 9842.06 2843.13 2888 00 
+65 1750S4 1743.02 1739^2 182120 
♦63 15S2.04 158639 1S8886 177610 

151 1J4 1507^0 1512^9 160680 

2255JJ3 2245X8 224431 238630 

-63 1253-23 12S612 1251.31 1165X0 
+64 234679 234622 2334.07 247330 
-65 2485^4 2474.78 2454X0 2143.10 
+2 JQ 1967X7 195607 1967X2 216600 


4.40 

4^7 

70 8 
7. BO 

lire 

1148 

11403 

6740 

046.82 

1000® 

Nartfwm Ben 
NartMm Foortxt 
Nonte 

4.11 

7.11 

1123 102.20 

919^4 

Paararert 

4^4 

7.77 

1124 

9622 

082.01 

PS Of 

PUHrtfm 

3.97 

7.89 

1128 

89.98 

832X2 

PowwGent 

PvucMWf 

3^4 

3.40 

41.35 

4970 

921.97 

4.36 

895 

1164 133.07 

99159 

sst 

RIZt 


_JL2L_ 

1191 217.07 

847.73 

3.28 

6.63 

1120 

5100 

94291 

ra* UB-T 

Roddn 4 CcXmant 

170 

7J2 

1118 

91.84 

88088 

nadtedf 

Reed At 

3J9 

521 

22.45 

57.® 

1029.® 

245 

5^5 

2221 

70.00 

981® 

nertoHSt 

Ptetat . 

3.72 

9.02 

13.61 

00.63 

1051® 

134 

2^3 

7.13 

051 

17 JO 
1100 

52.B3 

39.08 

8®.® 

923® 

3.77 

6-26 

1184 

7224 

890.97 

4.15 

128 

45.87 

28.63 

107135 

Sax»hSNe H .t 


FMANCIALatloq 

BariohC# 

tasurance(17) 

Ufa Aasunanceffl 
Marahant BonMS 
Other Rnencaesq 


1841XB 


♦61 178698 1771X7 1779.75 1BB1J0 
+64 163667 162653 1B3637 165667 


4Jb7 

1® 

1115 94.45 

91120 

3.78 

11® 

11.95 111® 

103192 

197 

t 

t 11B92 

942® 

4® 

8.09 

15.04 53.37 

829.04 

158 

13® 

TSB 8081 

090.43 


4.01 


653 1640 6663 11B738 h &te 


915688 +62 2162X9 2142X6 2150X7 2322.30 4X0 9.07 12.7B 92.06 85688 

— 4,23 9.95 11X0 11639 B57J4 

5X6 10 05 11.35 62.67 839.99 

5.43 132 IS. 39 127.82 91660 

3JJ7 8.B4 11-32 103.78 85903 

3.95 655 14.00 67.63 9965B 

229 1J6 61^0 59J8 921.87 


2851-58 2861.70 283611 284685 290600 

121630 *05 1209.78 121008 1210.46 143BJ0 

2352.63 +67 2335.20 2921.82 2312^8 2755.00 

2829 JB +1 5 278670 27H748 278699 308680 

ifUB.47 -62 155640 1843.61 1844£7 1732JW 




E 100 
E Mid 250 
E-A 360 


350 Induany baton 

W am tO® UM 1U0 

1100 

1400 

1100 

1110 

Ctaea 

Rravtaus Change 

up— 

„ X5A 
, 3075.6 

1792.0 
2887 -3 

962-5 

30816 

17918 

2892.7 

9618 

30962 

1T97.7 

2897.4 

9604 

3087.9 

17910 

2S9&3 

957 J) 
30882 
17918 
28072 

957.0 

30682 

1792.6 

28948 

9617 

3079.8 

1783.3 

2892a 

WWJB 

3077.7 
1784.1 

2890.7 

9519 

3071X1 

17852 

28815 

956J 

3000.5 

1785J9 

2W7.7 

967.5 

3072.1 

17819 

2887.7 

-11.8 

-tfl 

+14 

+0.0 


l(WXl 248 

h & Neehnrf 157 

IBeocnomt MOO 

SmW Bsecham Unf 2JX10 

Sl*n sines. 918 

Southern Oodt 6*7 

Soutii Wales 8 kl 2 

South VMM water 483 

South VWat. Beet 307 

Saxhorn Water ISO 

Standard Chond-t 1^00 

Stemhoaa , tag 

Bun AHsnoaf 2« 

T&N 7,100 

HGmupt 1700 

T38t 2.800 

TWnac 1^00 

TouALyle 306 

Taylor Wixxtnw 851 

Teacot iflM 

IhomaaWhtot 481 

Thom Hitt 

Totodnst 

TrsMgir Hw>e 
IW0M 
linioverf 

Uneadfitontat 
UU Hawpspwa 
Uodsftatrt 
WAsfauglSQt 


WHaiwenr 
Weaem Water 
WMtnadt 
Wa nw Hdgs -t 
VMo Conran 



Wiiiwieirt 
Yatfohim Bact 
TeikaUq Water 
Zsnecart 


a 100 
2*00 
163 
1.800 
1«0 
834 
6.100 
910 
783 
127 
296 
812 
7SB 
4500 
578 
113 
1490 
203 

sza 


4 Eg 
778 
774 
084 
793 
500 
278 
218 
321 
186 
378 
228 
124 
421 
117 
247 
488 
BBS 
227 
n 

345 

1118 

318 

BOB 

IBB 

658 


562 

391 

142 

132 

772 

713 

900 

849 


♦1 

-i 

+7 

-a 


♦i 

*2*2 


+*a 

+3 

+1*2 


♦3*3 


+3 

-*a 


+27 

♦10 

-3 


t9 

-35 

44 

« 

-1 

-3 

-9 

48 

-<a 

*7 

48 

* 1*2 

+2 

*3*1 

+9*2 

+11 

-1 

-4 

+12 

48 

-a 

-a 

-a 

-8 


Baaed on imdteg uofcene tor a eelac H o n at major 
eacwldes dadt ttxnugh dm BEAD system 
yestantoy uxi 4J0pm. Dudes of anenCBon or 
man moumM (toaat t WBctom an PT-SE 
100 mtox eonstiuwx 


10 to 430p on closing volume of 
8J3m. The sudden jump in turn- 
over prompted a flurry of 
rather spurious bid specula- 
tion. But the rise In the stock 
was mainly a reflection of 
recent underpeiformance, and 
some dealers said Robert Flem- 
ing Securities was discussing 
the company's prospects. 

Oil major BP was heavily 
traded after the company 

annmmrwl con I nr* nwn flgPrrnr+nf 

changes. The move of Mr 
David Simon from chief execu- 
tive to chairman and of Mr 
John Browne from head of BP 
Exploration to chief executive 
was not a dramatic surprise. 
But analyst Mr John Toaster, 
historically negative on the 
company, said it signalled ,a 
continuation of the trend of 
debt and cost reduction. And 
Mr Brendan Wilders of Hoare 
Govett said the moves repre- 
sented a “natural succession 
which ensured a smooth tran- 
sition of power”. 

Shell Transport responded to 
the strength of Its Dutch arm, 
which has been recommended 
by some fending us investment 
houses and has attracted retail 
demand in the US. The shares 
ended the day 10 better at 706p. 

British Gas rose 6 to 302Hp 
in spite of the chancellor’s 
refusal to back down on the 
increase in VAT in fueL 
Agency broker James Capel 
was said to be recommending 
the stock. 

The rest of the utilities were 
marked by profit-taking and 
continued nervousness as deal- 
ers and analysts waited to hear 
if the chancftllnr would m»1rp a 

much feared announcement on 


NEW HIGHS AND 
LOWS FOR 1994 


NEWHKMS (tq. 

BUBUHO A CNSTRH |f) AataM SyXta, 
MVH MU WP MU H MMtoMA Vtotoaoft. 
PI BIWWIM O TO V86L C onwlm 
•NSBTWiT TRUSTS (R AKnat PWmd Zmp 
D fe Pt BS Opbnm toe 2M Oh. SyMn Tk. 
Zwe ON ftt. St. PMtto ZU Dtv Pf . IB Taen 
23iro PrfL. (XL EXPLORATION A PROD 0} 
Cnmder. Scatato Ftoe. FNMUBKSITICMS 

(i) c«b« 6 8um»rraaws 0 ) ewA 

mao AM*PARB.(1)Chen«j«Mn PMpp*. 
TRANSPORT HJ P 8 O BWtXS Pti 
New LOWS m. 

■REWEMES (1)RAw&TA. BULDWQA 
CH8TRM 58 AME6 Onto! Metal. WWttajy, 
BUM MAILS A 1ICHIB n Haywood Wtam 
LtoM hteyar. CHBHtCALB ID YaM*« 
rtirmnrnTTmr rn rutiw, nr m n—nwn, 
ELECTRMC I SUBCT JBQUP CS BoWhorpe, 

CM. BBoo. Pimm. BMMBERIIIO (Q Cly«to 
Bbmo. Ooeper (Fij, Eade, UeBos, Triplex 
Uoyti. EMO. VEMCLE8 {!) TW. EXIRACIWB 
DOS n BtoqidA (ML EUMa Mtoomx 
RKtmood. SL Haiana. FOOO MAMJF (1) Acam 
A wadi. HEALTH CARS » 1 1— nata l . UJL 
um umctanv awaiMBirTRuna (i) 
Dunadn AyM WUa. Oarmwi 8n* Cos Mm, 
Moiaxy Worid WkH, Nth An Qh Mrtx.TR Frap 
Wite. ToopMan Uttn Amw. Do. Wrta. 
HUESTHEMT COIIP7UAB1 fij Singapore 
8EBOAO Fd LB8URE A HOTELS (R Bto 6 
WtaBM AraM TW, Do. A. Undtato OHmfe 
■■M n Owmy Oonra- Tiitay HL OB. 
EXPLORATION A PROD ffl Central PedBc, Rot 
AuMMtan Rh. (Mo Rh. OT+taR Sana A 
BU8NS ttj Leitfi IMA FRTH6 PAPSI A 
PACXO (D A6 PROFfflrr pj BHtoy. Bourn 
End Prop. Brit Land Epc Bd, Do. 8Hpe Cm ftt 
KK Land. Lnl 3»nm. London tnX 
RttWLBta, FOOD 60 0*» FWm. On*. 
RETAILERS, QENERAL (3| Bam 8 Jte»aon. 
IMotti Upton g, 8txxtiwn support sbws m 
H ogg Robtomx Jdmn CtaOMn, Mengtel, 
TBXIUB A APPAREL HI ColMMcte TcdBort. 
Ltoter, AMnl T1IAM8PORT (D Mnjoe 
NktoMB. AW8CANS ID Ouricar Oato 
CANADIANS «J BC QtaSI. 

imposing a windfall tax. 
Powergen surrendered 6 to 
544p, and Eastern Group gave 
up 8 to 783p. Midland eared 6 
to 745p, while Northern 
Ireland Electricity rose 4 to 
366p on reports that the group 
is to increase its supply in the 
province. With the threat of a 
windfall tax now removed. 


market watchers expect the 
recs to advance strongly over 
the next few sessions, as sev- 
eral companies in the sector 
report interim figures. 

Shares in regional water and 
sewage company Severn Trent 
reversed an earlier advance to 
end a penny lower at 540p, 
after it reported interim figures 
in line with market expecta- 
tions. 

Mr Douglas Falconer at Yam- 
aichi advised dlants to switch 
into North West Water, which 
last week cheered the market 
with an announcement of a 
link up with US group BechteL 
Shares in NWW gained 4 to 
535p. 

Hopes that the government 
would not raise excise duty - 
confirmed in the budget speech 
- powered the brewing sector. 
Whitbread, added 12 to 552p, 
while Bass advanced 8 to 539p, 
aided by a recommendation 
from SG Warburg. Highland 
Distillers put on 11 to 436p, 
and Scottish & Newcastle, 
which reports interim figures 
on Monday, closed 10 ahead at 
5l7p. 

Argyll Group advanced 114 
to 272p, ahead of today’s 
interim figures. 'Hifi range of 
market forecasts is between 
£l99m and £219m. 

Analysts took a gloomy view 
on waste disposal groups after 
the Chancellor said that he 
would be raising "several hun- 
dred million pounds” from a 
tax on Jam! fill. Doe analyst 
suggested the tax could add £5 
a ton to the cost of disposal 
which is sometimes as low as 
£15 a ton at present sniawfc« & 
McEwan fell 3 to 89p and Leigh 


Interests 3 to 174p. 

Yorkshire Chemicals suf- 
fered as a result of whet one 
analyst described as “muted 
comments" from the company 
on trading prospects. York- 
shire has been in the City 
talking about the effect of high 
raw material prices and the 
problem of passing on costs 
and forecast have been earning 
down to below £15m for the 
foil year. The shares fell 12 to 
362p. 

Eurotunnel fell 7 to 246p as 
news of a row between the 
company and a debt trading 
house served to focus attention 
on the apparent disparity 
between so-called debt and 
share price discounts. 

The channel tunnel opera- 
tor’s hank debt trades tn the 
secondary market at a discount 
of 40 per cent (60p in the 
pound) whereas the shares are 
within 30 per cent of tbetr 1987 
flotation price of 350p. 

Submarine maimr V ffkT. con- 
tinued to improve an hopes for 
an increased takeover offer 
from GEC, extending its three- 
day advance to 50 with a rise of 
10 to 1545p. GEC was margin- 
ally firmer at 275p, while rival 
bidder British Aerospace shed 
7 to 448p. 

News of the appointment of a 
new chief executive put fresh 
life Into Aerostructnres Ram- 
ble, lifting the shares 5 to 31p. 
They stood at 12Gp earlier this 
year. 

MARKET REPORTERS: 

Peter John, Joel IGbazo, 

Jeffrey Brown. 

■ Other statistics. Page 20 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


RISES AND FALLS YESTERDAY 


8enw 


British Funds . 


48 


Opkn 


JM Apr M 

JM 

Apr M 

Option 


Fail May Aug Fob May Aug 

Other FlMBri (nteraet . 

_ _. 0 

0 

70 

91 

OHOOMOl 

550 

23 36M44M 

12 

20 29 

Harem 

220 

17 20M23M 4M 8K 12 



(*565 J 

600 

5 15 22V, 

48 48M5BH 

(-234) 

240 

BM IBM OM 13M 18M 22 



38 

Aifflt 

260 13% MK 30 

6 

12 17M 

Laarao 

140 

13 17 20 4V4 GU B 



77 

cm i 

ASM 

280 

B 13 20 

17 

22 28M 

H47) 

150 

4 a 11 ISM IBM 18 



18 

60 

BM 8 « 

IM 


2D0 14M 2D MM 7 M12 14M 




CBS) 

70 

IM 4 514 

6M 

8 0 

1*205 ) 

220 

B11M15M 1B23H25M 

Ermstment Trusts - 

154 

23 


BM Nraoie 38Q Zr Wt 48 6 13M 21 

(-377) 390 1M 233B»2D27K36* 

SsMHhA 420 18 ST* 38* 11 22 Z7H 
r<» I 488 5 14 12 38H45H SOU 

BOOB 480 42 BSH HM 3 7 13H 

T4S5 ) 900 19 2BH 37 IBM 22H 30 

BP 420 1SH 2SH 34H 11 IBM 24H 

(*422 ) 460 3 10M 18» 38H 44 47R 

attftSM 140 18V) 23 28 1 3V4 6V4 

nsa) 160 5H> fl 18 8 1114 14 

Boss 500 41 48 54 Vi Tn 14 21 

(-538 ) S90 10M 28 Wi 33» tth 48 

Qtt&nt 3G0 25H38D 46 7H 15 22 
(*379 ) 380 10 33 3T 22 » 37 

Cmtafeta 420 23 37 44 10 IBM 25 

(*435 ] 480 8 19 25% 34 3914 48 

Conn URN 483 47 53 - 314 15 - 

1*532) 543 18 24 — 22 3SH - 

IQ 700 58M E7VV 77 5M 21H 27 

(*745 1 750 23* 37 48 22* 45 50* 

Kingfisher 480 22 39 4PU13H22H 32 

(*4®3 ) 500 7 1Sft2M3BH4Sta 85 

Laid Sour 560 44 58 BM 2» CM 15 
(-587 ) 600 12 304 3214 13* 24K 3SM 

tixta AS 390 21% 32VV 38H 5ft 10ft 16Vi 
1*403 ) 420 S»i T7H 23 71 24K 31 

MUteS 500 2416 35 4514 m 30 30 
C507 | 550 8 18 2SM 4SVV S2H GBM 

SHnataoy 390 IBM 41ft 4714 5H 12H 18* 
(*411 ) 420 11 24 XI 1715 2SM 32h 

SMI 11m. 700 23h 34K 43 13 2S 3ZM 
(-708 ) 750 5 13 22 45 BO 63 

SbxNxxM 200 19 2314 27H 3 5 8 

(*217 I 220 B 12 llllta 1314 17H 

TVaUgar BO 4 7 18V4 4M BM 814 

0*0 I BO 1 314 8V4 11M 12H 1414 
UrSmr 1100 4314 84 7714 14M 35 47 

HUB) 1150 IBM 3814 83 404 52 73M 

ZBnaca BOO 81 19M B4H 7 2214 29M 

1*848 | SO 28 44 58ft 24 44W 52 

Option ftti ttay *N8 fab May Aug 

Grand Met 380 38 42 47 8 1U4 ISM 

(*388 ) 390 1714 2SV4 3114 22)4 2SM 30M 

LstxoKa 160 W 15 IBM 8 14 14M 
(-180 ) 180 3 7M 11 21 26» 27 

UtdBtaatis 300 26 3114 36 6 14 17 

(*315 ) 330 10 18 21 19M 31 33M 

Optioa Dtc Ihr Joa Dec War J« 

Mo ns 120 BM 13 18 5 9 11M 

F12T ) 130 3 9 12 11 14M 17 

Option ftti Way nag ftti ifey feq 

WASH) 44B29M43M -21M34M - 

(-451 ) 487 13 2714 — 46 57 — 

MT tali 420 37M 4414 47M BM 20 26M 
(“442 ) 460 16 23 28 27 42 48 

BTR 290 19 2314 WM B 15 17M 
(-287 ) 300 ID 1414 1W4 IBM 26M 29 

MTetaan 360 20 28Vr 34 8 13 IWi 

{*374 | 330 BM 15 1914 27 30 36 

CBdbuySch 420 2414 31 3714 9 19» 23 

(*430) 480 mimohsm «4 tsh 

Enure BK 750 5414 7014 SB 24M 38M 48M 
(*783) 800 8 4SH GOK 49 5Qh 7314 

GJkness 420 43 4W S4 3 9 13 
r«55 ) 480 1814 13 3914 15M 25H30M 

GS 260 BM 25%3B» 4M 7H 1114 

(-274 ) 280 7M 14M 19 14 IBM 21M 


P 4 0 600 48 5114 8ZH 15M 31 35M 

(-919 ) 650 18 Z7U 3BM 41 58M B3 

PRfegtOO ISO 14M IBM 21 214 414 7 

nn ) 180 4M 8M 11M 13 14M 17 

RutadW 300 24M 29H 33H 6 14M 17 

f315 ) 330 B 14M IBM 20M 31 33» 

RIZ 900 57M 88 8214 1114 27H 34 

(*835 ) 850 28 42 B8 39M 5B 58 

Redknl 460 38 38 44 13 27 33 

1*471 ) 500 12 2014 28 35 S2 57 

Royol fcBGB 280 24H 3814 3BM 9 ISM IBM 

ran ) 300 14 Zt 2514 10M 27 29 

Testa HD Mi 2* 2* B 12M 75» 

[*247 ) 280 BK 11 M 1414 17 23H 20M 

Vbdatoae 183 21 - - 3 - - 

[*108 ) 200 » 17 2114 B13M1BM 

WEpras 330 2BM36K3BM 4 11M 12M 
rsso ) 360 11 IBM 24 16 28J4 27M 

OpBnn Apr M Jan Apr Jid 

BAA 500 IB 31 3BM 10H 16 22 

r505) 525 BM IB - 24M 29 - 

Hones Mr 460 38 98M S7 4J4 11 20 

r<88 ) 500 12142814 35 20K 28 40 

Opfloo fe» Hf Jra Bn tar J«i 


Others . 


33 


22 

14 

83 

416 

105 

318 

10 

211 

288 

35 


Ntbej NnD 

T4101 

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420 8 1814 24 15 28M 35M 

30 1M 2M 3M 1M 2M 3 
35 - 1 1M 6 8 8 

5S0 49 64 70M 1 T2M 19 

800 13 3214 42 UM 33 40M 
300 9M ZDM 26 8 15M Z04 

330 1 854 13M 30 34 41M 

300 8 18M 25 5M 10M 19 

330 M 8M 12 27H 30 38 
180 9M 15M21M 4 814 14H 
200 2 7 12M 18 21 28 

160 8 13W 17 1M 6M 10 

180 1 4M S13M16M22M 

140 T6 IBM 34 I 4M 7 
160 3H BM 13M 8M 13 16H 
460 35 48 BOM 2 10M IBM 
500 8 25M 37M ISM 28H 36 

330 M 3114 42 3 134 18 

390 BM 16 27 16 28 33 
IDO 7 1014 12M M 3 5M 
110 TM 5M TM 5 7M 10M 
220 12M 20 26 2M BM 12M 
240 3 OM 15 1ZH T6M 23 


PB7D > 


120 7 13 IBM 

130 2M 8M 11M 
950 43M U 84 
1000 12 33 54 

220 11M 17 21H 
240 2M 7V4 12W 
220 10 IBM 23 
240 1M 8 14 
650 34 SBM7ZM 
TOO 9M 3214 48M 
Jm Apr M 


2M 7 10 
8 1Z15H 
6M 18 29M 
30 41 52 
2» 11 14 
13M2S4 2SM 
3 B 12H 
14M20H23M 
1DM27M42M 
37 53 6814 
JM Apr At 


Etan GOO 42 59 8BM 12 23 36 

(*624 ) 650 77 31 CM 37 56 62 

kSCnptiB 700 38M56M 88 17 42M51M 
(-716 I 750 15M 33M 46 44 TIM 80M 

Itefen 460 82 4214 52 7M 17M 23 

(481 J 500 11K 22H 32H 26H 38 43 

Opdon Fat Bey Feb Hay 

Att-flopa 1B0 21M25M28M 2H B 8 
[*178 ) 180 8M 13M 1TM 9M UM 17M 

* iManyug seourty price. Pramtoma Nnwi an 
baaad on sMtiarmra prices. 

November 28,ToM commote: 2UU4 Cete 
11J938 Pur 14,028 


FT GOLD MINES INDEX 



Hex % cfag 
SB in day 

8M KW TMr 

asm 

Grass dli 
f«** 

82 teak 

MgO UM 

Gold MMM MsX (34) 

hooxi -ix 

1994X3 1915X7 19WJB 

£28 

236740 T7SUE 

■ RaOteete maces 

«fcs(18) 

fensnkp) 

North Anurtca (11} 

3131J8 +02 
2494.30 +16 
146128 -2-7 

aiaaia 3i67js smso 

247885 242191 228244 
149181 146741 1717.97 

4X7 

2-OS 

371147 2304.45 
301189 217166 
2D»j5S 1440JD7 


CoprtJhL Hw Rwndai Tlmaa Umlted 1®+, 

PtaewhteetateBhniiuffdRataxtipeiiteBBteUSDB ^tetaV^ 

Pwdaote^QeM Mm loan Nev 2ft Z30L8;dteY<tente*7JtxxntaYpereg»; 225.1 tWM- 
Lnet prtcM mm uneHteiie (or tNs edtion 


Totete 


552 


B22 


1502 


Dn booed on Mon a x o p B i i eB IM on Ow Lenten Stan Santee. 


TRADITIONAL OPTIONS 

FMDeefinge NoNtenborei Expiry 

Last PooingB DocomborZ Sattiement 


February 23 
Mnch 9 


Cate AB Ena* ABence Rae, Aram WL, Heemooefl, 
8Nrwt, Tulow OL Put TUtow 08. Puts & Cate tehra Plat, 

LONDON RECENT ISSUES: EQUfTTES 


htagiKon Power, 
WMcsr. 


saus Amt 
Jrice peU 

P up 

MU. 

«P 

(Bo) 

1894 

Hflh Low Stock 

Ctaea 

Price 

P 

W- 

Net 

dhr. 

D*v. 

cov. 

Gn 

y« 

WE 

net 

_ 

FJ>. 

IBP 

88 

70 Abtruat Latin Am 

84 


- 

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m 


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1.82 

B3 

48 Do Wtantnte 

48 


— 

- 

- 

- 

- 

FJ». 

IIP 

1® 

180 $Adera Pmtg 

192 


tQ28% 

ELI 

14 

112 

180 

FP. 

81-0 

161 

145 AsMxuno 

151 

+3 

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ai 

ZB 

. 13b9 

1® 

FP. 

618 

83 

85 BZW CommodUae 

B5* 2 


- 

- 

- 

- 

- 

F.P. 

5P4 

47 

37 Do- Wrta 

38 


- 

- 

m 

- 

_ 

IP. 

50.1 

104 

65 ^Odhma 

93 

+3 

- 

_ 

m 

. 

2® 

FP. 

SOP 

287 

280 Chudtil China 

285 


FNL80 

22 

4u3 

i ao 

IM 

FP. 

204 

IM 

.101 Euckfan 

1® 


- 

- 

- 

- 

141 

FJ». 

23P 

143 

143 Sewatn 

143 


WN0J2 

1-8 

54 

114 

— 

FP. 

407 JQ 

496 

485 Fktetty Spec Unts 

487 


- 

- 

- 

- 

_ 

FP. 

67P 

178 

108 FKranleCWk 

101 

♦6 

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ZB 

a 6 

54.2 

1® 

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11.1 

101 

IM Fktebuy 8ndr C 

101 

+1 

- 

- 

- 


no 

FP. 

37P 

625 

615 FM Ftusstan Fr 

625 


- 

- 

- 

- 

— 

FP. 

3P0 

276 

220 Do. Warrants 

275 


- 

- 

- 

- 

IM 

FP. 

29P 

104 

08*2 For & Col Brag C 

104 

*2 

- 

- 

- 

- 

IM 

FP. 

SOP 

102 

88 Hoare Gwen 10M 

1® 

+1 

- 

- 

- 

- 

- 

FP. 

29.1 

100 

90 INVE3CO Korea C 

97 


- 

- 

_ 

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180 

FP. 

lagp 

223 

205 Man Permanent 

223 

+2 

i#S.O 

&fi 

54 

7^ 

215 

FP. 

B9l3 

232 

229 JJB Sports 

231 


FMO 

2.4 

&£ 

14.1 

IM 

FP. 

42P 

84 

85 Madteson Uoyde 

85 


- 

- 

_ 

- 

— 

FP. 

2P0 

» 

23 Do. Warrants 

23 


- 

- 

- 

- 

120 

FP. 

704 

144 

120 SeoPariect 

143 

+3 

* 

- 

- 

- 

118 

F.P. 

231 5 

130 

117 TUB 

1® 

+2 

WNU 

2-0 

34 

ia.7 

170 

FP. 

114 

173 

165 Tte-Cbw MT 

165 


RN5L44 

22 

4.1 

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FP. 

17P 

102 

102 Waffinsfetn Un. 

1® 


- 

- 

- 



RIGHTS OFFERS 

Issue Amoutf Latest 
price peU Reran. 18M 
p up data Hpti Low Stock 


Ckwtag +cr- 
prica 
P 


77 

Ml 

som 

3pm 

2pm 

ApoBoMeteb 

2pm 

296 

M 

671 

80pm 

34pm 

UM 

43pm 

37 

MB 

3/1 

5pm 

3pm 

CM 

3pm 

B6 

M 

23712 

15pm 

5fxn 

riQlSBD 

5pm -1 

285 

Nl 

6/1 

57*2prti 

40pm 

SettnHBtitn. 

4ipm -1 


HNANCIAL TIMES EQUITY INDICES 

NmSB NanrSB Nw 25 Nov S4 Nov 2S YrlQO 


•Htfi -Low 


OnAnary Stnrtl 2347.4 233S1 23203 232&9 2323.8 2418J5 27106 224a6 


Ord. tev. yleid 

4j45 

4.48 

449 

4P8 

4-49 

3P4 

4P1 

343 

Earn. ykL 96 tul 

151 

8P5 

0.81 

are 

8.81 

4.42 

6P1 

3-82 

P/E ratio not 

17.71 

17P2 

17^4 

17.47 

17.45 

2138 

3048 

1194 

P/E ratio nl 

17.29 

17-20 

17P2 

17.08 

17.® 

21® 

SOL® 

izre 


■For 1094. CMmy Sin index teres oompiatoR Itifit 2J13JI sna/Hi low 484 28/BMO 
FT CMIney Sen Mae bees date 1/7/35. 

OrtBnary Stun iMUTfr chaign 

Open flJOO 10J0 11J0 12J0 13JOO UM 15J» IMP High Low 
233&5 2346.7 2348.7 2352-3 2353.1 2 352 . 0 23498 23800 2347.1 23S3.4 23303 
Hew 29 Nov 28 New 25 Noo 24 Now 23 ■ Yr n gr . 

SEAQ bargains 22£70 22,612 20492 22J388 27.343 28,168 

EquRy tumwsr (£rt^f - 11 15.6 1066.4 13066 ugas 12344 

EquHy tegahet - 2WM9 22^90 27^47 29.680 81^46 

Stwia traded (mOt - 541.7 476^ 639£ 8613 475J) 

teodudng bAa+RBtat buateaaa end oMtseea Benover. 


A Prime SrrE for your 
Commercial Property Advertising 

Advertise your property ft 
1 mitBon FT readers in 160 countries/ 

For details: 

Call Emma Mullaly on +4471 873 3574 
or Fax: +44 71 873 3098 











< ■! 




FINANCIAL TIMES 


WEDNESDAY NOVEMBER S W94; V 


LONDON SHARE SERVICE 


BurtBDwnd to 


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FINANCIAL TIMES WEDNESDAY KQVEMBBft 30 


1994 



. ti ’ 


CURRENCIES AND MONEY 


MARKETS REPORT 


Sterling stays firm after predictable UK budget 


Sterling traded steadily on the 
foreign exchanges yesterday 
after a UK budget in line with 
market expectations, writes 
PtatxD Gawith. 

Analysts said the budget 
which was described as can- 
tinas and prudent provided a 
marginal boost to sterling. The 
pound was trading around 
DM2.4535 at 17h30 GMT, com- 
pared to DM2.4470 before the 
budget It closed on Monday at 
DM2.4453. 

Elsewhere, the dollar was 
firmer, on the expectation of 
higher US interest rates, after 
consumer confidence rose to 
201.3 in November, up from 
89 1 in October, and the high- 
est level since July 2990. It fin- 
ished in London at DM1 .5612, 
but later rose to DM157, com- 
pared to Monday's close of 
DML5643. 

Earlier in the day the market 
had focused on Norway, with 
the initial response to the ref- 
erendum vote against Joining 
the European Union, positive. 
After touching a low of 


NKr&3850 against the D-Mark, 
from NKrf-36 at Monday's 
dose, it recovered to close at 
NKr&356. 

The krone’s upward move 
was a function of the removal 
of po li t i c?! uncertainty, and a 
belief that in the short term, a 
No vote could actually improve 
the state of Norway’s public 
finances. 


discounted." 

likely to be more Important 
be <p»d. was the forthcoming 
parliamentary vote on VAT. 
where the possibility of a gov- 
ernment defeat will reignite 
political uncertainty, and the 
December monthly monetary 
meeting. “The base rate out- 
look will still be the most 
imp ortant factor," said Mr 


Sterling 


Trade- weighted index, 1985=100 
83 


■ Sterling finned slightly dur- 
ing Asian trading, after the 
successful passage of the con- 
troversial EU finance bill, but 
then traded steadily unto the 
time of the budget 
Mr Jonathan Griggs, eco- 
nomic adviser at Barclays in 
London, described the budget 
as "reasonably positive" for 
sterling, but added that "an 
awful lot of it has already been 


■ Pound hi Haw Yoric 


No* 20 — Lsstast— -Prw. dosr- 

Ewot 1.5645 1-5610 

1 tath 15B41 1.5609 

3 nth 1-5644 1-5607 

1 jr 1-5BZB 1-5382 


Mr Avinash Persaud, cur- 
rency strategist at JP Morgan 
in London, said the chancel- 
lor’s co mmit ment in the bud- 
get to a low inflation strategy 
had “clearly heightened expec- 
tations of an early interest rate 
rise.” He predicted a 50 basis 
point rise, around the Decem- 
ber 7 meeting, and said this 
would support sterling- UK 
core inflation remains around 
the lowest hi Europe, so rais- 
ing interest rates would be 
favourably interpreted as a 
pre-emptive strike against 
inflation. 

Mr Persaud said he expected 
sterling to rise to DM2.46, “but 



1994 


Source; FT GrapHu 


a move beyond that depends 
on a further monetary tighten- 
ing.” 


■ Commenting on the Norwe- 
gian EU referendum, Mr Kjell 
Tangen, bead of trading at 
Christiana Bank in Oslo, 
stressed that the market’s 
response was a short term one, 
“because the short term out- 
look is even better with a No 


than a Yes." 

This was a function of a 
large issue of political uncer- 
tainty being removed from the 
market Also, the government 
had given indications ahead of 
the day t hat a No vote might 
require it to make enhanced 
effects at reducing the budget 
deficit Some traders also Celt 
that not being a EU member 
would mean Norway avoided a 
net drain, of financp 

Mr Tangen said that in the 
short term Norway’s good eco- 
nomic fundamentals - better 
external balances, an improv- 
ing budget deficit and low 
inflation - might support the 
krone. Good economic pros- 
pects were also seen as likely 
to attract Inflows of foreign 
capital, supporting the krone. 

For investors to be con- 
vinced that this was sustain- 
able. though, would require 
Norway to develop more of a 
track record of economic pro- 
bity, said Mr Tangen. 

In the longer term, he said, it 
was more difficult to assess the 


economic impact of staying 
outside of the EU. 

Mr John Torklet, senior cur- 
rency analy st at Den Ncffskfi 
bank in Oslo, stiri css factor 
lwhfnd the currency optimism 
was the expectation that inter- 
est rates would fall. He pre- 
dicted tfmt the prime minister, 
Mrs Gro Bnmttend, 

would anyway “soared in con- 
ducting a typical EU economic 
policy.” _ 

One tar±or which may cause 
the krone to weaken in the 

months ahnad will be the TX8T- 
rowing interest rate differen- 
tial with Germany. Currently 
around 175 basis points, in 
Norway’s favour. Mr Torklet 
predicts iftyg could shrink to 75 
basis points as Norwegian 
rates faO. 


UAE 


E 3 

T7Z.127 - T7Z33B 108316 - «MUJ 
275100 - 275800 174690 - 175300 
04H5-B4M, mSS-DSB 
376827 - 377417 34W08 - 24QJOB 
536438 - 508MB 32C03 - 324EL0B 
57398 - 57514 3*715-38736 


POUND SPOT FORWARD AGAINST THE POUND 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


Mov 29 


Ctarfig Cftanga Bttfefltar 
mld-potm on day 


Day* Md 
tow 


On* month Throe month* On® pare Bank erf 
Rale KPA Ram %PA Rata %PA Eng. Index 


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mkHxftii on day 


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spread 


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high tow 


On® month Thro® months Omjht UP Morgan 
Robb w>a Rasa %PA Ram %PA 


Europe 

Austria 

Bdghan 

Denmark 

Finland 

Frame 

Garmany 

Greece 

Ireland 

Italy 

Luxembourg 

Netherlands 

Norway 

Portugal 

Spain 

Sweden 

Switzerland 

UK 

Ecu 

SDFfr 


Europa 


(ScfiJ 1723SZ 
(BFi) 503507 
(OKI) 93904 
(FM) 7.5729 
(FFi) £3992 
(DM) 2.4476 
(Or) 377201 
(E) 1.0164 

(U 2524.00 

(LFr) 505507 
(F!) 2.7415 

(NKr) 10-6654 
(Es) 250213 

(Pta) 204239 
(SKr) 11.7810 
(SFi) 20703 
(B 

- 12840 

- 0933794 


400274 315 
400938 215 
400111 845 
40.0066 638 
400064 9G6 
400022 467 
4043 984 
*00013 157 
♦1.54 289 
400938 215 
40.0032 40S 
-00043 821 
40101 018 
*0124 088 
400298 713 
-00036 633 


449 172643 

796 505070 
962 8.6112 

619 7.6000 

017 84132 

483 2XS20 

418 370334 
170 10170 

626 2534.72 

798 505070 
424 2.7482 

667 107460 
410 250864 
389 204472 
907 11.8459 

713 20750 


172070 

503030 

B-57BS 

75470 

8.3BS5 

2.4417 

370304 

1.0139 

2521.12 

yi-trap 

27376 

106621 

MM 

203883 

11.6937 

20690 


1-01 G2 
253048 
503207 
27402 
10.6851 
251343 
204374 
11-7995 
2067 


*0001 833 - 


Argentina (Peso) IS 675 

Brazfl IRQ 13342 

Canada (CS) 21609 

Mexico (New Peso) 53899 

USA (S) 13678 


*00042 672-678 
-00016 324-359 
*00073 602 - 616 
- 867-991 
*00046 675 - 680 


t-5678 1.5670 
12406 1.3324 


5.3906 5-3760 
15685 1-5625 


Ausbafca (AS) 

HcngKong (HKS) 
bida (Hs) 

Japan (V) 

Malaysia (MSI 
Now Zealand (NZS) 
PlxSppmes (Peso) 
Saud, Arabia (SB) 
Sngapore (SS) 
S Africa IComl (R) 
S Africa (Fill) (R) 
South Kona (Won) 
Taiwan (IS) 

Thailand (BO 

1S0R MM lor Nor 28 
DM and Ore Otter Spot l 


20516 

121234 

492039 

154.729 

4.0060 

25134 

3759Q9 

£880? 

22915 

55568 

65062 

1245.03 

41.1547 

392486 


*00011 506-526 20557 20438 20537 

*00363 210 - 257 121281 120820 121143 
*01634 882 • 196 492200 49.0230 
*0638 665 - 793 154.783 154.160 1S4J09 
4.0070 36947 


*00076 050-070 
*0.0048 120 - 148 25181 25080 

*00147 930-888 37.7888 309925 
♦a 077 791 - B13 £8828 £8 609 

*00029 907 -923 
*0 0131 537 - 578 
-00514 805-229 
*3.06 476 - 531 1245-55 1241-33 
*00644 422 - 671 41.1975 416358 
*0106 345 - 627 392640 39.1340 


22940 22851 
5.5603 £5414 
65744 04663 


03 

17222 

04 

. 


115.1 

Austro 

(Seri 

10.9965 

-0.0145 

830 • 980 

>1.0180 109880 

0.7 

50-2357 

as 

49.7457 

12 

116.8 

Belgium 

(BFr) 

32.1165 

-00335 

030 - 300 

323400 32.1030 

02 

9.5953 

-02 

93822 

ai 

118.7 

Derensm 

(DK d 

6.1173 

-0 0107 

145 ■ 200 

6.1339 

£1145 



. 

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878 

Rrtand 

(FM) 

43304 

-4X0099 

254 - 354 

48572 

43315 

02 

83892 

0.5 

8.3163 

13 

1103 

Francs 

(FFt) 

5 3575 

-0.0115 

567 - 582 

537S5 

53567 

OS 

2.4425 

03 

2.409 

1.6 

126.1 

Germany 

(D) 

1.5612 

-00031 

609 614 

13665 

13605 


. 

. 

. 

. 

_ 

Greece 

d» 

240.600 

-0.425 

SOO - 700 

241.300 239.750 

02 

13158 

02 

13177 

-0.1 

1053 

intend 

(K) 

1.5426 

*0 0026 

418 - 433 

1.5444 

133S3 

-3.0 

2541.48 

-23 

259233 

-2.7 

73.7 

Italy 

IU 

161 0.00 

-37 

950 > 050 

161080 160000 

a7 

502357 

0.9 

49.7457 

12 

1163 

Luxembourg 

(LFri 

32.1165 

-410335 

030 > 300 

323400 32.1030 

05 

2.736 

oa 

2.702 

1.4 

120.8 


m 

1.7487 

-0009 

483 - 490 

1.7541 

1.7480 

ao 

10.6684 

-ai 

106675 

0.0 

882 

Norway 

(NKri 

63030 

-4X0226 

020 - 040 

6. 6655 

6.7995 

-03 

255.123 

-73 

_ 


_ 

Portugal 

(S3) 

159.600 

-0.4 

500 - 700 

160000 159300 

-23 

206314 

-13 

207309 

-1.8 

85.5 

Spam 

(PM) 

130275 

-0.3 

200 ■ 350 

130780 130300 

-13 

113375 

-13 

113995 

-1.9 

753 

Sweden 

(SKl) 

7 5146 

-0.0029 

096 . 196 

7.5684 

7.4692 

13 

23S9S 

2.1 

23162 

08 

1203 

Switzerland 

(SFf) 

13206 

-0.0061 

201 - 210 

1.3262 

13201 


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80.1 

IX 

(Q 

13678 

*0 0046 

675 - 680 

13685 

13625 

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1-2835 

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1276 

03 

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12210 

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205 - 215 

13215 

13172 

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1.46924 

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Argentina 

(Paso) 

0.9999 

-00002 

998 - 999 

1.0X12 

03998 

. 

. 

_ 

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_ 

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Brazil 

(BD 

03510 

-00035 

£00 - 520 

08550 

08500 

-0.1 

2.16 

02 

2.1598 

0.1 

853 

Canada 

tea 

13784 

*0.0007 

781 - 786 

13793 

13777 

. 

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Mexico (Now Peso) 

34380 

-0.01 

365 - 395 

14550 

1436S 

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1366 

ao 

13668 

0.1 

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(S) 

- 

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-15 

23564 

-09 

23703 

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Austata 

(AS) 

1.3087 

-00031 

062 - 091 

13120 

13074 

as 

12.11 

04 

123648 

05 

- 

Hong Kong 

(HKS) 

7.7330 

*4X0007 

327 ■ 332 

77335 

7.7323 

. 

- 

. 

- 

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_ 

India 

(Rs) 

313850 

*4X0125 

BOO - 900 

313950 31 3725 

3-3 

153334 

33 

148.149 

4.3 

1907 

japan 

(V) 

98.6950 

*4X12 

700 - 200 

96.7600 904800 

_ 

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Matoysa 

(MS) 

25553 

-00025 

550 - 555 

23570 

25542 

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23273 

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2-5472 

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(N2S) 

1.6032 

-00018 

026 - 038 

1.6057 

13026 

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PNBpptoes 

(Peso) 

233500 

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24.1000 233000 

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3.7507 

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17506 

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1.4617 

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614 ■ 619 

1.4640 

1.4810 

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1 P) 

33438 

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430 - 445 

15458 

15420 

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4.1500 

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41300 

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794.150 

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794.400 794100 

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282508 

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263850 263470 

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25-0350 

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9032 

ai3 BS44 

~9£29 ’ • V 

879r* 

6*80 


Sap 

95.12 

8101 

-010 ' 96.12 

9530 

-402':. 

3885 

X 

■ um 

■80818 

nnvn 

IS tm Eculn potota 0T1OM 


- - • 




Opan 

Settprioe 

CtMnga 

‘ H* 

LOW ^ 

• JEOtvol 

Opan tat 

Dac 

0435 

.0433 

-008 

0436 ' 

9102. 

. ,1124 : 

73t» 

Mar 

9330 

9SJS 

•007 

9331 

9173 - 

972 

8177" 

Jrai 

9351 

9327 

-007 

9132 

9324 - 

224 ’ 

4008 

Sop 

8231 

92.78 

-007 ’ 

9232 

SETS 

138 . 

2780 


- um tena ndKlauWr 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

Nov 29 Eft DXr Rt 

DM 

K 

L 

FI 

NKr 

Es 

Pta 

SKr 

SR- 

C 

CS 

s 

V 

Ecu 

Oalgtran 

(BB) 

100 

19.05 

1658 

4560 

2018 

5013 

£444 

21.17 

4965 

40S.B 

2140 

4.111 

1586 

4290 

1114 

3072 

2550 

Oarenarfc 

(DKr) 

5250 

10 

0758 

2552 

1559 

2632 

2-858 

11.12 

2605 

2125 

1258 

2.158 

1543 

2252 

1535 

1612 

1239 

Franc® 

(Ffi) 

6935 

11.42 

10 

2513 

1210 

3005 

0263 

1169 

2975 

2411 

1453 

2X85 

1.191 

2572 

1.887 

1842 

1.529 

Germany 

(PM) 

2058 

3319 

3432 

1 

0.416 

1031 

1.120 

4550 

1025 

8145 

4514 

0540 

0409 

0883 

0641 

fO.77 

0529 

hriand 

(E) 

4956 

9439 

8287 

2AO0 

1 

2484 

2-898 

1049 

2405 

201.0 

1159 

2537 

0584 

2.126 

1543 

1522 

1264 

tta(y 

W 

1395 

0380 

0333 

0097 

0040 

ICO 

0109 

0422 

9513 

£080 

0X67 

0562 

0040 

0088 

0062 

£129 

0551 


(H) 

1837 

3.499 

350* 

0.883 

0571 

9208 

1 

3589 

915a 

7450 

4288 

0756 

0385 

0788 

0572 

56.44 

0468 

Norway 

(Wr) 

4733 

8596 

7579 


0953 

2368 

2571 

10 

234.7 

1915 

1155 

1542 

0938 

2526 

1.471 

145.1 

1205 

Portugal 

(Ea) 

2012 

3533 

3557 

0978 

0408 

1009 

1-098 

4281 

100. 

8151 

4.708 

0827 

0400 

0863 

0.827 

6153 

0513 

Spotai 

(Ptri 

2430 

4398 

4.113 

1.198 

0488 

1236 

1542 

£220 

1225 

1GO 

£789 

1.014 

0480 

1558 

0.708 

75.76 

0629 

Sweden 

(SKr) 

42.74 

0141 

7.130 

2977 

0882 

2143 

2527 

9549 

212.4 

1735 

10 

1.757 

0849 

1534 

1531 

1312 

1590 

Mtzariand 

tSFt) 

2432 

4333 

4557 

1.182 

0491 

1219 

1524 

£160 

1205 

9656 

£691 

1 

0X83 

1.043 

0757 

74.73 

0620 

UK 

« 

5035 

0590 

6599 

2X47 

1516 

25Z4 

2.741 

1008 

2502 

2045 

11.78 

ZJJ7Q 

1 

2.160 

1568 

154.7 

1284 

Canada 

(CS) 

2131 

4440 

3588 

1.133 

0X70 

1189 

1263 

4535 

1155 

9454 

5X54 

0558 

0463 

1 

0726 

7152 

0504 

US 

» 

32.11 

0116 

5567 

1-561 

0848 

1010 

1.748 

0798 

1595 

1302 

7513 

1520 

0638 

1278 

1 

9856 

0819 

Japan 

M 

3256 

1199 

£429 

1582 

0557 

1832 

1.772 

£891 

161.7 

132.0 

7.075 

1538 

0045 

1596 

1.014 

100 

0530 

Ecu 


3921 

7489 

6541 

1-906 

0791 

1968 

2.135 

8508 

1945 

1895 

9.174 

1512 

077B 

1.082 

1221 

1205 

1 

DonUh tourer, 

Ranch Fane, Norete tourer, red tereteh tourer pv 1® Bdgire too, Yre. Eacudo, Um and Pren 

da par 100. 








■ D-8UBK PUTUMOt (OIM) DM 12S300 par DM 





■ JJ 

mum 

I1M fUIlMB (B5J) Yen 125 par Yen 100 





Open 

Uteat 

Change rtgh Um Eshacl Opta Int 



Open 

lateat 

Change Mgh Low Bsl vot Open kri. 

Dec 

OB388 

06405 

+00017 00409 06382 31354 

97588 

Deo 


15155 

1.0157 

♦0-0002 1.1070 1.0150 19206 

71 SX 

Mar 

06412 

08418 

*00017 06418 00412 3,159 

10525 

Mar 


15244 

15248 

*05005 15251 15242 2.483 

11564 

dun 

08438 

08440 

*00014 08440 06438 

150 

1X09 

Jun 


15368 

15386 

*00007 15365 15385 

45 

954 

■ SWIM IVAHC FUTURKS0MM)SFr12SjDaOpw SR 




■ SI 

mum 

2 RRUB (Mi) £62500 per C 






Dec 

M* 

Jun 


0.7535 0.7572 *03032 0-7577 £7833 14,450 56332 

0.7800 a7606 *0.0031 £7811 £7600 1359 4^09 

0.7660 0.7656 *03031 a7666 0.7860 58 823 


Dec 

Mar 

Jun 


13828 

13660 


13672 *00)60 13680 

13858 *03048 13678 

13660 - 13680 


13824 12310 

13864 2.479 

- 85 


60388 

£017 

122 


UK INTEREST RATES 


LONDON MONEY RATES 

Nwr 29 Ow- 


7 doya 
notice 


One 


Three Skt 
months month s 


One 


4%-8 S&-8 S %-« 6»<-« «%-6% 7 % - 7ft 

S*n*mCOa - - 5%-6A53'6%6&-8& 7%-7 

Treaniy BHs - - 5&-5% 5fl - 5% 

Bonk88s - UB-5B 8fl-6% «% - 6% 

Local KriKatty deps. 4fl - 4ft 6fr - 4fl S% - 5& 8 - 8^-8* 7& - 7 i 

Dtaount Moritet dope 4%-46-4% 


IK bearing bom boea tendhg trie 54, per cant tom aaptertwr 12. 1994 
Up to 1 1-3 SO 90 


9-12 


Ctett of T«c dap. 5C1OO000) 

Mi eTTta dap. mda Ciorwroo la 1 


1 % 

Da 


8 % 

ibreemkpo. 


8 % 


3% 


to tand* nm of dbcount &7ia2pc. B»D »ad ode 80» Bqiort ftnonca. IM» ip dv Key 30. 

1*4 Aar*d «!• tor piriod Die 2B, 199* as Jm 2*. 1MM. Sctamm Ian ZJSpc fteteranos mat far 

d rear 1, 1BB4 h> im» 30. ia9A3dnwre IV 6 V6.10HM. franca Houre Pare ltete %io bare Her 


1.1994 


1 FWirok (LffFg E500300 prim of 100)6 



Opan 

Sett price 

Change 

Hgh 

Lew 

Eat ref 

Open fro 

Dac 

9171 

9187 

-005 

9173 

9184 

16283 

125291 

Mar 

9296 

9281 

-010 

8353 

9286 

38112 

92064 

Jun 

t»3fl 

9229 

-012 

92X3 

9229 

6884 

55587 

Sep 

9159 

9152 

414 

9158 

9151 

3481 

84470 


Ttadad on APT. Al Opgn Moan flga. am tar pterimn day. 


■ worn a raw BWoimoMMTg ffioojoo poWs of 100% 













I 












Sr- 1 


Jun 

127 

130 

1.73 


Eft H3L Mat 08b 100U ftOi 8213. rtretoua day"* apart tat, Cala i 


l 24*880 


EMS EUROPEAN CtfflRENCY UNIT RATES 

7*0*29 Ecu can. Rrie Change H*/-frcm % 

rates egajnst Ecu on day 


can. rale 


Dtv. 

tod. 


Neteartonda 

219872 

214429 

*000089 

-230 

£07 

Detfum 

402123 

395772 

*00155 

-208 

£74 

Ireland 

0806828 

0793837 

-0000196 

-153 

£47 

OarereV 

154964 

191480 

*000158 

-150 

£44 

Hreice 

163883 

868900 

•4L0Q0QS 

0X8 

357 

Tlraanialr 

7X3679 

7X9678 

*000708 

053 

289 

Portugal 

19285* 

19S6B1 

*0581 

1X2 

209 

Spain 

154250 

151714 

-0103 

154 

050 

NON 0W MSUBS3S 





Qreeoe 

28*513 

285527 

*032 

1154 

-7.17 

OUf 

179119 

1973XS 

-5X9 

1005 

-552 

UK 

0786749 

0781480 

-0000911 

-067 

424 


15 

12 


-6 

-10 

-2S 


n art by *» Bwopaan Ctento Cawndaa a® fei « 

Pnam ^ abn n gre water tac apori dre etangai 


tor a cwrteKT. and me narinoan i 

tojoaMah. 

(17AM) Sterta* and Man Ura t 


i pamrtaga daatoOcn of tea ewrancya 

I tom BW. toaanart calatead fay 


BaFtandaThM. 


1 1/% OWMia 831250 (carte par pomcQ 


Sbfiaa 

Price 

1385 

1380 

1378 


Dec 

- CALLS - 
Jan 

Fed 

Dae 

— PUTS — 
Jon 

ft* 

428 

458 

£11 

004 

0X8 

093 

220 

258 

3X4 

041 

1.14 

1.73 

OTB 

157 

218 

1X8 

228 

284 

018 

07* 

128 

231 

358 

4X0 

• 

n 9p 

059 

653 

£92 

620 

- 

009 

033 

004 

013 

£35 


1380 

ftoiiouB d^a val. Oria 4371 Mi 4395 . Prea. dWa opm mu Cato snTte Pun 337^91 


QMM) Sim potato of 10016 


BAsl LEfffilNGRATES 

* * 16 

Acten& Company. — £76 bkncanUwts £76 •flggdiiagheGumntee 

ASadTIustBanfr STS Soar Boric Unfed— £76 CoponricaiUnteltoito 

AB Bait — — — a, 75 FtBndW&Om Barit _ 65 longer autiodeed as 

OHarayAntfaarimr £75 9Fiobart Herring 4 Co _5J5 atanM^rateAn. 8 

Bs*ri6aeda STS Gkotark £76 ftwriEkarScofari-£T5 

Banco BUjeoVScaya- £78 •Guknan Motion £75 «ai«h&vMmnr8ec3. £7S 

BanfcofOtprua.. £76 HriAB«kAG2lritfi.&75 TS8 £75 

Bar* of Intend £78 •HoriKsSft*-. £75 mvckBd 8k at Kum*- 573 

Barkaffrvte £75 Ha»«a&GantoirBk.£7S Ur%Th»t9»*Pfc_£7B 

BartcotSeatand £75 MlSaniuri 575 Weaten Trust £78 

Barries Bank £75 CNteraftCo..-. £75 WW0erayLridte»._ £78 

Bril 9t at IW Bast. £75 Hmtem&Sttetfei £76 Yakatea Baric £75 

9e«rtlShipl0y&CoUd37S JrianHodeaBar* — £7S 
CL Barit Nadartnd.„ £75 9UnpoUAaoph&8m£76 •MrniteariUMcn 

OtoarttNA 375 Lloyds Bntt --£78 Iw e a taa ri H teWlg 

CyiBadate Barit 6J5 MaghrafBomud £75 AasocUon 

ThoCcKawato Barit. £75 hkfland Barit £75 • tnadnMkrikn 

CouteftCo £75 *MoitBaritho —6 

OwMLyonnata _£75 WM W BEfrn toMy i £75 

Cyprus Poputa- Ba* _s.75 ARaeBraonra £75 



Open 

latest 

Change 

Mgh 

lew 

. Eat- ret 

Opan be. 

Dac 

9187 

8388 

-004 

8388 

9383 

79X72 

366565 

Mar 

9125 


•004 

9326 

9121 

160818 

466890 

Jm 

9253 

8158 

-004 

9263 

9258 

112832 

360848 


liNIWn |MM) Sim per 1009* 



Dec - 

94X8 

94X7 

-005 

94X0 

94X8 

2973 

10222 

Mar 

9186 

9184 

-004 

9186 

8354 

3553 

11290 

Jun 

8323 

n« 

-004 

9323 

MM 

318 

1501 


l Open kamot figs, am fer penow day 

LCrnOMtpjffQDMIm prints of 100)6 


Stria* 

Plica 

Doc 

Jan 

CALLS - 
Fob 

Mr 

Dec 

Jan 

iits 

Fab 

Mar 

9479 

006 

005 

008 

0.10 

054 

016 

019 

021 

9CO0 

051 

051 

053 

004 

025 

037 

OS 

040 

9628 

0 

0 

001 

051 

040 

061 

062 

062 

Eft. mL tab* Oris 10916 Puts 4790. ftwfaw days opan tt, cm 222333 

Ms 20081 



AMER GROUP LTD 

FINNLAND 


has acquired the main assets of 


ATOMIC FOR SPORT GMBH 

AUSTRIA 


We have initiated this transaction and 
acted as advisor for the buyer. 

ANGERMANN& PARTNER. 

International Business Consultants GmbH 


Hamburg • Berlin • Dresden - Frankfort/M 
Leipzig • Munchen - Stuttgart • New 
York • Paris - Tokio * Wien 


RENNGASSE I 


A-10X0 WIEN 


FUTURES TRADERS: 



“"1 

•Hot, pc bare mcoBBSstaedsales I 
stagNobntewfflcaByraiiiah I 
ta^igieaggaaKfalggB Became ■ 
ifyraBakejvaroinitnii^ | 

detisiouLia^a&iltaaHtissiaa 1 
Inker cosh yoahraaefeu | 


J ...No ife, aids, 


or blits 


® “Hoffdojoattoilf is a question we 

I h&rc ben ukedtnny times over the 

jeon ffi; m aotnipuNd becanse 

I oeiijoftteinRStoniriiocalosare 
Wyag £60 (aroare) per bade with 
■ ttairbtaBrasmfitara broker 
■ tbeycaont beliefs Oar cu get oar 
I eaqjfeterai^e «f q^ty instead 
" amKesfcrociySS/SSSarwmdbira. 

I Bsr dow (toil? In three ispertud 

■ 


jm need to spend. At IkKtW&Uock, 
you do flotpgyfiH’sdvkBjou 1 

do not need] 9 

’Second, weareiyeciaBsed, | 
Ls^Wakbck a &e«tskfB largest ■ 
fttoefi-«lybrokasge5cffl.Wedo | 
mthnetfae added easts taeefated ■ 

wtooffsHigsiBde range of in«st- I 

B^pr«toc& So «ecs!3swjw ■ 
non^- and pronde service tiat I 
H&stehssljfn^Btaadanl, ■ 
fiscotmt or M price. I 

"Third, with 18,000 c&stomas 1 

9QdMde,«eemt8keid«&dage Jj 
ofbo&keflkaaicies that bigs | 
wtoepw rid e a -aadpasstte 
SBria$dtngfi>70iL § 


RadootferyoonetfwfeytJai- | 
WaUockistteinBBber^mbroka’ ■ 
teiakpendeotfotarestoks | 
fraUride.Tdepb8Be wiule today. 


Nssl 


0800-262472 to 


I 


*ja wg - 


OriadBttetULalMlteBtviUfls 

““ c 018-118444 

tBUMl&tt 


ftlffgSBr 1m potato oMQW 


Strike 





— PUTS ~ 


Piles 

Deo 

Mar 

Jin 

Dac 

Mar 

Jun 

9675 

021 

Oil 

019 

052 


062 

9800 

003 


Oil ■ 


0*1 

079 

9829 

051 

002 

056 

032 

084 

099 


e&l «aL ml cam o Pun £ ftre fo u a «p« c«b sais Pue» uis 


Caste 


Hte.Ba(aiittoatD 


RMtMngbterifrtetelgritl 

tmm armrtiai teoritfrribr. nrimdtri- 

HncyteLihacLtenlna* •tanrajm. 



BBunuMUl l UaPO OBBtetl— I 
i-uwa-ww 


0*5*0- 


: 005-153176 

Odnol(171«(MTet,R!> 

tacon-scpom 

VtttointeadiiriagdferlWWM 
SCbapray. annteraiMSRt. 


I 

I 

I 

I 


ilSai 9Mt 


LCtD-WALDOCK fle COMRVITJ 


ttaiian Lire 100 , 000 , 000,000 
GREDIOP S.p.A. 

c— » io rat Laareteri iifO H d w 



Credito per !e Impmsee le Opere 
Pubbiiche Society per Aziorii 

Floating Rate f4otes Due 2001 . 


kt Kcoriance with iho pRNWm of ttw Notes, nodes Is hereby given 
&jaifartf»fr7tBysstPariDdftOfT>Ncwnber30.1994toMay31 f 1995thB 
Notes wfl cany an Merest Rate of 9.65% per anrnan. The amount 
of tetarest payable on May 3t. 1995 wffl be teSanUre48,t17^08 per 

tefanLM l.ooo.oayjoo princktel amourt of Nofes. 


By: TTMChaMNaohoUanB^RA. 

London, Afiteit. Bank. 


CHASE 


November 30,1994 


A 


i 

5 ' 


Bank Austria Aktieugesellsdiaft 

4 Kurraia itoftau fc, Who} 


US$50,000,000 
10 3/8% Bond doe 1995 
(file K Bonds M ) 

NOTICE or CHANGE OF PAYING AGENT 

BnfrAtetria M&ageaeUwdaB hereby gives aotkx to baUera cf dm Bondi that 
Vflrd £« m Oc*tw, 1994. Datwa Baopa Banfc pie to rewuM Pahva 
Europe N.V. as FajfagAflGri. 

The address of DaiwaEacpo Baric pic is: 

Coctelor Boose, 14 St. Pufs Qamiiyii rd, Loadoa EC4M SBO 

Br. Baafr Austria Attfcogracfhdtek 

rijji. hffrerr rrJteii 1WU 
IMAUiaa.ij iv 







#. £ 


■ -2 


K. 1 


Petroleum Argus Daily Oil Price Report; 


Petroleum Argus 


«c» 



BClinutaraapto 






London SV1X BHL 

Iht *712460099 
teaman . 
r8FA 


$32 


ROUND 

TRIP 


> 


DO YOU WANT TO KNOW A SECRET? 

7M Utfi. GaM Samhte wl show you hcrar In nvririta REN1.V mrak. Ilw renryton 

^“rssasasasP 5 




Den norske Bank 


Primary Capital Perpetual 
Floating Rate Notes 

Oric nr 1 M Interest Ported from November 30 l 1994 CO FebnLZ™ 
1995 dw Nock wtS carry an IntarcK Rate of a I87cv ^ 

Owpon Amount per USSKUtOO wg bt U-SSfelJW. *“■*“* ^ 


Mtor*ar7£ 1 99L(aadba 

By. tatericNA. (haw Sarricw). Agent fcnfc 


CITIBANK* 



OptionTrader 


( ? ptl l °. ns Software by IN DEXIA 


f, 



'V 





X 



















financial times Wednesday November 30 1994 


INDICES 




v As.* 


£W 

,• 1 - • 






^3 


i M 


2.7 

_ 

£3 


1.2 


22 


(U 

... 

3.1 


0L7 


1.8 

,,, 

(U 



OS 


2jS 

— 



1.1 „ 

Ui 


&2 


Id 


22 


1.8 


22 


U 

, 

2A 

— 


& 5f 



rr 




1 20 


I *2 


I 22 


i 70 


i A2 


1 40 


1 &£ 

: 


W 




1 

► 

Lm 

iw 

29 


«r 71? « 

_ 484 315 


MSO *t6Q 7J 



g 


US INDICES 



«g£igsr 




EE 


3= 


-At-U. ' . 


TJI 




The Future's History. 

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§1 • jgggr£kH$fP£ S iiiiimiiiiiiiiiimjinn mi 
















































I >- 




1 


w YU W Sta OOH Pm. 

Hgk Lm Stack Hr « E tOi flgt igaMCta 

17% 11$ A* 048 17 22 497 18* 12% 1ft +% 

184 IftALLabiA 018 1.1 38 78 174 17 174 +4 

734 574 AMP 108 2-4 2ZZ713 71 4 7ft 71% -4 

72% 484 AMR 1073972 51% 5ft 50% 

5 2hm 72 SS 3% 3% 3% 

5ft 3ft ASA j £00 40 29 669 44% 4d 44% 

33 2ft AttflL 078 £4 1713590 32 31% 32 +4 

154 114 AfiW Pr 050 441 1 1 55 12% 12% 1ft 

2ft 17% ASM Ind OS2 20 13 » ®% 20% mh +4 

18 11%Aqma(n IQ (74 1ft 134 13% +4 

31 21% ACEUd 


044 21 2D 2272 21 


9 ACM fill la 14)9 11.4 8 568 3% fl> 


12 J 2 9AOIann 1S9 11.4 
1ft ftACMGnQpo Ojaa IQLfl 
1ft 6% ACM &rt Sp 096134) 
12 7%AW0*Se 14)9 109 
11% 7% ACM Man 14)8117 
94 8ACMManagd072 8.7 
154 8% AaraCh 044 44) 
1ft 6% Acs* Beet 
2ft S3A«rfax OLSO £1 

13% 5%Adm 038 16 

1ft 11% Anson 


072 8.7 77 ft 

044 44) 22 6 1ft 

14 137 134 

an 11 14 a nss 

038 16 2 318 10 

25 633 1ft 


S s 

8% 84 
1ft 1ft 
13 1ft 
28% a 


64 4ft Aegon ADR 1.47 14 12 35 624 


65% 42%MrmL 
3ft 25% ASac 
22% 15% Attnasn 
4 l%Aftwibc 
5ft 3ft AKK 

S IBAirtmFrt 
19% Argaahc 
17 14% AHrkb 
3ft 21% AkTdi 
18% 13$«**sAlr 


2.70 03 51380 44% 
046 14 12 712 3ft 
068 5 l 4 S 2166 18$ 
1 26 1% 
on 12 21 3500 44% 
030 IS B 429 1ft 
32 230 2ft 
1*4 too 11 14 154 
118 6857 27% 


02S 141 30 1112 1ft 15^ 


1ft 1ft 
14 1 % 
44 444 
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2ft IftABCuB 028 11 16 40 2ft 25% 25% -% 

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2ft 19% AfcnAI x 030 1*131 4608 2ft 24 24% 4% 

55 >2 4ft Alma x 1.04 IS SO 1031 5ft 554 5ft ft 

8Q4 23% Mexflmn 070 2S 4 463 27% 2ft 27% ft 

22% HfltaMx 010 05145 350 19 ift ift 

24"t 17 Anagn Lul x 048 2S 79 323 19 16% 19 ft 


26% !9%AJtogP 164 70 11 MOB 21% 21% 21% +% 

2ft 1ft AMD Qon 015 07 21 BJ6 2ft 23 2ft ft 

30% ZOAtatpi 044 IS 17 1717 30 27% 29% +1% 

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274 17% AflnraCan 1.64 8.7 10 244 Ift 18% 18% +% 

1ft B%«tnS 018 2.1 68 8% dS$ 8$ 

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40% 3ftAkS« 067 II 12 4028 32 % 31% 32% -% 

11% B% Abase x 024 17 88 0% ft ft ft 

2ft 24A0&1 Crp 006 3.3 18 5044 28% 284 2S% ft 

74 ftflacaao 17 271 ft G% 6% 

35 21% Umax T3 967 2ft 25% 25% -ft 

90% 64% Aim 160 2.047G 3224 Of % 8ft 81 ft 

30% 17 Ata Co A 44 1728 19% 18% 194 +4 

11% 7 Amtolne 096 112 570 7% 7% 7% ft 

8% 6% AHftect; are 3J IG W 7% 7% 7% -% 

8% ftAmaxfid 008 IS It 706 ft flft ft 

3$ iftArcrasthd* 0S2 16 II 1033 20% 20 20% ft 

52$ 44 ArnfiaHs 0*0 1* 81 I860 46% 45% 46% ft 

9% 8% Ain Adj R 034 16 60 ft 9% ft 

31 204 An Bart* » 010 05 261371B 21% 21% 21% 

37% 2ft An£rcd 2.00 50 10 4343 34% 34% 34% 

25% 18% An 8(3 FTC 1 080 4.1 11 253 20 19% 19% 

B 6% Arc Cep Inc 065 9* 109 6% ft 6% 

204 IE Arc Cap Bd 1.54 BS 30 56 17% 17 17% 


OSO IS 61 1860 4ft 
034 16 80 ft 

OlO 05 261371B 21% 


*8 IS 


234 IB Arc cap cv ISa 50 0 8 1ft 18% 1ft +4 

374 27% A rSPu 2.40 73 11 3007 3ft 32% 334 ft 

33% 25% Am£xpr 090 30 11 7665 30 2ft 30 ft 

204 24% AmGeTC 1.16 45 20 7159 26 2ft 26-4 

9% 5% At. tort In 077110 777 64 6% ft ft 

27% 18% to HE) Pr 2*0 12* 45 Z79 1ft 18% ift ft 

204 164 Am HatIBB 066 17 10 35 17% 17% 17% ft 

6S% S^A-Tficrca 3 DO 46 13 5112 64% 63% 64% ft 

27, 2% Arc Hzntj 075 273 45 8 n2% 2% 2% ft 

96% 81% AiM 1 0.46 05 14 4116 93% 91% 93% ft 

11% 6% An Cp3 ft: 100 136 871 7% 7% 7% 

33 21% AxPier 0 88 33 11 199 234 22 22% ft 


65% 5ft Arson 200 45 13 5113 
27, 2% Arc lend are 27 s 45 a 
96% 81% AlM 1 0.46 05 14 4116 

11% 6% Arc On ft: 100136 871 

33 21% ArcRn 0 88 33 11 199 234 
24 *9 An FikCJ Oarj 1.8 9U32 

8% 7% Arc Real Es 044 60 4 193 
Z7% 21 Art Sir 043 IS II 1438 


23 21% 21% -1$ 
74 d7% 7% 


224 164 Arc Ittnr 5% IS 72 


048 IS 11 1438 2ft 2ft 2ft ft 


108 4 1 11 41 26% 


17 17% ft 
ft 26% 


<3% 36% Artitpi 192 4 9 IB 4S9B 3ft 38% 39% ft 

434 Sft&Wttbc ISO 33 5 GS 324 31 4 324 ft 

18% 11$ Am* 024 IS 67 311 18% 17% ift 


64% 50% Airara 
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34% 27% A.TX-.-TTI 
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26% ahsssbt 

25% 2 4% A'yCg 
55% 47%*:.3ftr 


223 36 16 6152 61% 60% 61 

010 1.5 8 114 6% 6% 6% 

0.12 £1 62 66 ft 54 ft 

1.52 54 9 855 28% 28% 28% 

17 2036 2% eft 2% 
G33 07 44 4550 41%fl40% 4ft 
25 2150 33% 33% 34 
094 37 17 33 254 25% 254 
160 IS 1222E8 43% 48% 43 


174 14A-rrt?!n 044 £7 IS 7 16% ift 16% ft 
35% 29% Ac. Cj 128 40 11 1016 31% 31% 31% ft 

2S% 2%fi3rt*0g 023 1 1 35 1116 25% 25 2ft ft 

tft 7$Ajcxl4rcF 072 03 434 8% 3% 3% ft 

S% 14% AW 29 GE3 23% 2ft 2ft -% 

7% ftA-pKMrtS 1 300 3% 3 3% ft 

25% 16% Art ?» A 012 OS 17 264 22% 21% 22 ft 

23% 21% A.xM2n 0.15 OS 182694 28 Z7$ Z7$ -% 

SI 43% AxsCrtert £00 50 16 22T 44$ 444 44% -% 

51$ «%Atck5*5P« 4 SO ID 1 2 44% 444 44% +4 

7% 4% Ann 1251865 6% ft 6% 

29 2DA.ra£lP* 110104 27 2ft 2ft 20% ft 

574 33% Arc-rtf 128 32 II !«6 33% 3ft 394 ft 

45% 22$Ane»Hee 121670 38% 35% 36 *% 

7% 3% Aria Grp 1 K 4 4 4 

33% SVrtnrtx 0.76 32 13 879 24% 23% 24% ft 


38% 23%A=»«Ga 
57% 48% AJ8T 
2534226% AO RWi 2 


21% lEAtoteEm 
112% 32% AfflWl 
10 2% Albs 


58% 47% AirtMa 
20% 13% Aram 
19 74 AM 
45 30% Amd 
63% 48$ Arafr 
14% IftAyACOp 
7% 5%Azur 


34% 21% Asara 


34% 21% Asms 040 1S320 48B0 25% 2ft 25% ft 
31% 22% AS£d Cod 046 IS 33 13 29% 29% 29% 

44!; 33% AsMJdx 1.10 12 11 2322 34% 3ft 34% ft 

25% iftAslaPaeF 027 1.7 377 15% d!5% 15% 

130 101 Asset far 032 160 5 326 2 1% 2 

38% 23% AnMtSas 0.12 03 30 1619 38% 37% 38% ft 

57% 48% AT&T 1S2 17 1635361 48% 048% 49% ft 

2634 226% AD RUi 2 2S0 1.1 Z100 2*64 246% £48% 

38% 2ft AOnU to 2S6 7.0 12 218 30% 29% 29% ft 

9% 5%ABsbS09 028 41 8 2 6% 6% 6% ft 

21% 16 AXntcEgr 1S4 8.6 9 651 IB 17% 17% ft 

112% 324 AdRcb 500 5S 61 1563 104% 103 103 ft 

10 2% Albs 1 1323 2% d2% 2% ft 

20% 16% AteBEngyx 092 52 18 20 17% 17% 17% ft 

12% 8% Hurts ADR 03433 60 404 9% 0 9 +% 

24% 16 AogS 016 09 13 2068 17% 16% 16% ft 

12% BtasBbM 010 12 82 B% d8 8% 

58% 47% ASMa 060 1.1 23 1684 56% 55% 56% ft 

20% 13% Anna 044 11 11 26 14% 14% 14% ft 

19 74 AM 004 04 18 181 9% 8% 9% ft 

46 30% tana) 060 1.7 13 378 38% 35% 35% ft 

63% 46% Anri* 100 12 17 2236 61% 60 81% +1% 

14% 10%Ay*lCDrp 10 32 11% 11 11% ft 

7% 5% Anar 12 181 6 5% 5% ft 


38% 31% BCE 172 
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g SBafcnco 020 
14 BAarfoS 030 
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27% 21%BaMora: 048 
30% 24% BSCpX OSO 
15% B4BMU 005 
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20% il% BSIBnhcpx 020 
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20% 20% BmcaiV 094 
12% 9% BtncaCwdK 072 
34% 24% BnpHsxMx 1S4 

1% %tadr«xM 

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50% 38%fcn*Ainx ISO 
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29% 22% BHEbtn 1SB 
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33% 2S BanMIT 120 
60% 42 BankAm A 125 

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28% 21% Baxter 1SS 
28% 22% Bey Stats 146 
22% 16%BdTri8» 1.72 
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48% 34% BecxiO 082 

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11 74 1108 28% 
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10 874 B 
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15 23 31210ft 
4S 817125 20% 

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33 347 1 

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BS 2 B24 

4.0 7 4162 26% 

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41 41 2634 25% 

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9.1 41' 19 

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1.4 23 242 29 

1.7 15 1469 47% 
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33% 33% 
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3% 4 

14% 14% 
16% 18% 


56% ft 

40% 

B2%+1% 


27% 28% ft 
642 42 

.71 71% 


23% 23% 

1B% 18 ft 

15 15% ft 
43% 43% 

33% 33% ft 



CORINTHIA PALACE 


When you slay with us 

in VALLETTA ( Malta ) 

stay in louch - 

with your complimentary copy of the 



g 13%Wh 

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a% 43% Beta A 
25% aft Ban* 

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167 7% 7% 7% 

386 7% 7% 7% ft 


16% 11% Acoson 25 633 15% 15% 15% 

10% 15%Adan3E«rx 0S8 4S 0 141 15%615% 15% ft 

64 46%MI«BTJt 100 15 5 54% 54% 54% ft 

31% 16% AMDs 10011S 85281 25% 25% 2% ft 

6% SAdWStEip 016 10 15 60 5% 5% 5% ft 

2D ISAdwinc 0.10 DL5 17 109 19% 18% 10% 


11 OBtuyw 

45 19 Best Buy 
28% 25% Banal 
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24% W% Bertffit 
53% 42% EMtZ L ■ 
16% 11%B«En( 

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10% BBGkKkTQl 




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26% 9% BndnOun 
18% 11 Bonbn 

24% ib% Bosk cel 
29% ZftHOMr 
38% 18% BnaSFnd 
34% 29% BHEPrapx 
45% 32%Brtg9x 
33% 17BMWU 


74% 54% BrAIr 
54% 39 Mbs 

85% 55% BP* 

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28% 21% BHjnU 
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49% 35% Burta Base 
19% 14% Bmftam Pc 


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040 IS 14 78 

176 S3 19 3549 

060 1i 17 254 
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004 5S 15 261 
046 £4 12 730 

77 200 
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1.44 IDS IS 357 


Hp Lae Omm 

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52% 52% 52% 
51% SO 51% 
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50% sa% 90% 
36% 35% 36% 
24% 34% 24% 

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44% 43% 44% 
25% 25% 25% 
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16% 16% 10% 
20% 31% 20% 
24% 23% 24 

19% 18% 19 

8% 8% B% 
6 % 6 % 6 % 
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23% 23 23% 

20% 79% 20% 
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22 % 22 % 22 % 
24% 23% 24% 
38% 34% 36% ■ 
30% 30% 30% 
33% 33% 33% 
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60% 59% 60% 
47% 47% 47% ■ 
79% 78% 79 

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56% 58% 58% 
22 % 22 % 22 % 
31% 31% 31% 
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29% 28% ZS% 
26% 25% 26% 
3% 3% 3% 

18% 17% 16 

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32% 032% 32% 
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48% 47 48 

36% 36% 36% 
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35% 20C8IX 046 12 W 6782 22% 20% 22% 

72% 50% CSS X 0.40 07 15 1346 56% 55% 55% 

25 19% CMS En 0 64 IB 10 127B 22% 22% 22% 

82% 59% OlAFn 16 130 62% 61% 63% 

54% 44% CPC 116 16 23 1232 52% 51% 51% 

21% 14 CPI Dap 0S6 19 26 1206 19% 19% 19% 

92% 65 CSX X t.79 16 12 1370 B9 67% 68% 

31 19% CIS On 040 1.4 13 11 29% 29% 29% 

24% 17% CdrieSMfac 064 16 16 1014 1ft 17% 17% 


S3 33Catlfeinxi 
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24 1598 48% 47% 48% 
056 11 13 341 26% 28% 20% 


leCatXHDSG 010 09421 239 


21% 10% CaKeOapi 
59 35% Caesars VH 


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2% 1% Cad Heal E 020113 1 20 1% 01% 1% 

15% 10% CalgonCbi 016 15 20 260 11% 10% 10% 


20 260 11% 10% 10% 

19*2 15% CaEnm 16 372 I6dl5% 15% ft 

15% 9% CrcFrt 0 972 10% 10% 10% *% 

S% 17% CMfcCatCo 040 11 30 247 19 18% 1B7g ft 

46 34% CrcpUS 114 09 16 068G 43% 4ft 43 ft 

12 % camptt ta 56 6:3 % 3, *A 

18% 14% Carta D32 II 40 331 15% 15% 15% +% 

85^3 60% CapOl 020 02 21 21B4 82% 81% 82% ft 


114 09 16 W86 43% 42% 43 

56 613 ,1 % A 

812 II 40 331 15% 15% 15% 

020 02 Z1 21B4 82% 81% 82% 


85% 60% CapOl 020 02 Z1 21B4 82% 81% 82% ft 

14% 10%CBSM116 116 IIS 294 11% 10% 10% ft 

37% 18% Caps* IS 1.60 BS 2 18% 018% 16% 

42% 20% Gnsffl Ufia 132160 6 740 21% 2D% 2D?4 ■% 

26% I5%Cansaikx 004 02 17 1890 18% 18 16% 

35% 30% CfflCo 060 £4 15 52 33% 33% 33% *% 

S*% l6%Cara*flO 11 BS5 22% 21% 22% +% 

13 B% UrohaFr 010 £.1 10 106 9% 9% 9% ft 

30 22% CarPSL 1.70 64 12 890 26% 26 26% ft 

a SS^Cpra-T £40 4 4 II 62 54% 54 54 

9% carnival 033 2S ?i sre ia% >3% 13% 

13% 12% Cue* HG 096 69 2D ICC t« 13% 14 ft 

21% IB% C2seCp 03 1.0 11 777 tg% 18% 19% t% 


7% Cadi Am 0(B 06 15 873 3% 8% 8% 


63% 50 cat* OSO 1.1 13 5820 54% 53 53% ft 

19 10% cm Carp :g 39 ift 17% 17% ft 

35% 20% Cedar Firtr £25 7S 10 in 28% 28% 28% -% 

13% 0% CedEn 083 9.1 1 1279 9 8% 8% -% 

45% 2Q%ca£B are 10 5 444 re% 20% 20% 

30% 22 7 a CmSTHCSs £08 6S 8 205 2*% £4% 24% 

25% 21% Centrlnd 146 66 11 E3 22% 22 22% ft 

IS 10% CeUtWWi 090 71 9 357 12% 12% 12% ft 

30 24% CarNinp 0-56 2.1 16 37 27% 26% 28% ft 

22 12% Cert# VhM 1.42109 9 205 13% 12% 13 ft 

30% 20% OriKW 1 70 &l 11 >133 £1% 20% 21 ft 

32% 21% Canny Tlx 032 1.1 18 2E0 30% 30 30 ft 

27% 18% Cert* 138 1250 25% 25 25 ft 

a 2Sannb are 06 34 1084 34% 33% 34 ft 

12% 7% Qapimf OJD 23 13 67 7% d6% 0% ft 

15% 5% Dart KM 20 167 10% 10% 10% ft 

40 30%QaseM ICO 44 54210 38% 35% 38% ft 
6% 1% OnraB 2 66 5% 5% 5% ft 

21% 10% ChOfijr 54 29 20% 19% 19% ft 

36% 30% Owned x £04 El 5 16 144 31% 31% 31% ft 

42% 33%DxffiOc 17B 4S 7639 36% 35% 36% *1% 

n% 7%aienwastaare 2220 413 o% 9% 9% ft 

35% 22%ttes*e*B 072 23 24 912 31% 31% 31% ft 

*7% 39% O&m 1J5 41 20 4571 43% 43% 43% +% 

56% 40% CMd Food 1.45 11 385 46% 45% 46% ft 


15% 5% Chart Ksa 
40 30% OaseM 
6% 1% Db»B 
21% 10% DckSy 
36% 30% DieraBdx 
42% 33%aeffiS( 


I CM* And 1.45 11 


19% 11% CUqBrx 
8% 5ChackFdl 
41% 320XM 

34% 24%{2aWtarei 
03% 43% Cbj* 
83% 68% Qlddl 
74 570PB 


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ISO 11 5 0075 48% 47% 47% 
1S4 £6 11 2236 72% 70% 71% 
104 43 8 1431 83% 62% 63% 


9% 6% Cigna HI x 090118 448 7% 7 

37% 28%Cfcmpkix 146 8.1 11 31 30% 30% 

20%15%amBSB OSO 46 20 47B 17% 17% 

27% 18% OMiX 036 1.6 33 3303 24% 22% 

4% 2%CtaamnO 41 1050 2% 2% 

Z7% 20% energy 041 IS 74 3411 22% 22 

30%25%CtoTO 100 7S 10 92 20% 20% 

27% 16%C»ndtCt OlO 04 16 2045 24% 24% 

40% 19% BmusCk- 133101 21% 20% 

47% 3B% Oftp 060 1.4 014303 41$ 41% 

20% 24% 0BXI9.12 120 9L2 22 24$ d24% 


27% 20% energy 041 IS 

30% 25%<*H£0 100 7S 

27% 16%CkndtCt OlO 04 

40% 19% OmuaCb 
47% 3B% Oftp OBO 1.4 

21% 24% OBqfl.12 120 BL2 

90 7D% OCpPTSta 600 64 

100% B3%dcpraM 7.00 63 

17% 12%Q2nUd A 
17% 12%CbnUIB 1S211S 

12% 7%C8y NaW 020 11 

12% 7%CXE OOB IS 

23% 9% CtakuSi 012 IS 

71% 50%CbrfCq 


100 7S 10 92 20% 20% 26% 

OlO 04 10 2045 24$ 24% 24% 

13 3101 21% 20% 21 

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120 9L2 22 24$d24% 24$ 

600 64 9 71% 71 71% 

7.00 63 6 04% 84 84 

17 182 13% 13% 13% 

1S211S 0 301 13% 13% 13% 
020 11 12 387 9% 9% 9% 
OOB IS 51 812 11A 7% 

012 IS 10 8» 12% 11$ 12% 
B 2338 55$ 53$ 54$ 


26% 15% Oqrtan Hm 006 05 131175 17 16% 1 
11$ gCbnenbG 0S7 64 187 9% dB% : 


11$ gCkmahG 057 64 
09 64OW07S0 7.58 IIS 

45% 34% QesCI ISO 17 
H 57 OnH B 7.40 IIS 
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20% 21% CM Mad are 12 


057 04 187 9% dB% 0$ ft 

7S011S ZlOO 65 05 K 

ISO 17 10 47 35% 35 35 ft 

7.40 IIS 3 04 02% B4 +1 

1S2 13 10 1744 67% 57% 57% ft 


13 ftawheoma 100 107 ire 
(%1i%Qnctnen 024 IS 8 116 


16% 11% 
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33% 24%Q*b0x 
53% 30$ Coca Cx 


032 23272 355 13% 131 
640 IS 13 2952 25$ 25> 
0.78 IS 27 8454 52 9l9 

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15% COenQitn 015 0S121 1388 17% 10% 


38% 25% Qdsaan 24 61 31$ 31% 

65% 48%Q*Pa 1S4 17 16 1946 m 59% 

11% 0%CDkntar 0S5 7.1 99 9% S' 

6% 0% Colonial Hx OSO 64 631 7% 

7% ftCBtaBhllx 670 IIS 38 6% 

8% SCttiMMx 056 63 373 6$ 6 

30% 21%QalBaa 132 9S 5 1430 24% 

45% 35% OoWCA 012 03 18 4061 37% 37 

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31% 25% Canaria ire 4S 8 B79 28% 38 

20% 12DBBbtttax 050 12 13 223 16% 15 

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zs% aoaxnnEdiS ISO 60 15 21% 

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42 24% Compaq 132Z7J4 40% 39 

1% %Oonvnheni IB 115 97% 0 

50$ 37% Cmptas ore 04 23 2000 45% 44 
48% 31% &apSd 24 577 48$ 4E 

10% 6%Ctaq*-retl OlO IS 3 43 8% 6 

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33% 29%Moa 083 17 10 1098 31% 30 

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9% 9% 9% 


6% 0% 
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37% 37% 
21 % 21 % 


ft CompfrTBtJ OlO IS 3 43 8% 8% 

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33% 23% (Wes ore 17 10 1098 31% 30$ 31 ft 

31% 22%QmactNG 1S8 05 12 59 23 22% 22$ ft 

re 19 comet En ISO 07 11 58 1D% 1B% 18% ft 

20% 10% amaiM 8 2470 12% 12% 12% 

71% S3 0onaE4B5 4S5 64 ZTO 55% 55% 65% 

32% 23CBnaEd 2S0 7J 8 2DSB 20 75$ 2Bft 

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15% 15% -% 
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a "s * 
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100 7J 0 2090 20 25$ 20 


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82% 41$ Qnftp ire £9 Z7 39 44% 44% 44% ft 

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tenants 080 10 887 20% 2D 2D% 
Merrily E 070 10 230 28% 28% 28ft 4 ft 
136 92448 27% 2B% 27 

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A 012 15 539 15% 15 15 -% 
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metre 44 3004 44% 43% 43ft 4ft 


- fl - 

122571 12% 11% 11% .% 
2 533 3% 3% 3% «% 
1 882 8% 2% 3% 4 ft 
12 259 18 16% 16% -1 

18 404 18% 1S% 17% 

21 725 23 22% 73 

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Sarettaon 030 13 332 20 iBh 20 +1% 

Sto*A 020 22 436 26% 25% 28% 4% 
SdUedL 2061613 49% 48% 49ft +ft 

17 351 18% 16% 16% 

9 MO 8% 0% «% -% 

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Score Bid 8107B 4% 4 4 

seafletax tans nm 33 % 33 % 33 % -% 

88479 24% 23% 84ft aft 
018 20 » 16% 18% 18% 4% 
036 TD 44 2% 2% 2% 

1.12 9 48 24% 23% 24% 

118 2066 19% 18% 18% 
41468 3% 3ft 3% 

5 82 6% 6% 6% 

18 3 4% 4% 4% 

Sawnrei x 022 12 15 17 16% 18% 

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MfflwHx 052 15 437 25% 2*ft 25% 4 % 
1728 28% 27 28% 41% 

15 13 14% 13% 13% -% 
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Modem CD 020 a 1748 7% 7 7% 

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tenth® 003 a 1050 33 % 32 % 

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122347 a 28% 2B +% 
4 233 0% d9% 91] 4% 


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CadnusCQTiO 20 


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873 5% Aft 5% 4ft 
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18 242 13% 13% 13% 
18 33 14ft 14% 14ft 
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Please call +482 644 5522 for more inforniatiofl. 


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Caere Cp 571661 16ft 15ft 16% 
CBlgthe 225 41475 8 7ft 7% 

Cal Item 2 3694 32% 30% 31ft 
CandctaL 18 215 2ft Eft 2% 

Code 1 412 1% tf1, T a 13 

Cm Inc OK 72 139 Eft B8ft Eft 
Conor* 35 a 5ft 5% 5ft 
CretxxOra OK XTKS 23% 27i* 27ft 
Cascade » 060 17 57 aft 21 22% 
CaseyS OK 17 407 13ft 13% 13% 
Otgerw 5 95 7ft 68 7ft 

OMQp 16 5 11% 11% 11% 

Cetocre 9B016 n\\ 16% 17ft +lft 
CrtDlHd 1.12 9 475 27d26ft 27 4% 

crenspr 16 1 ? 10 % 10 % 10 % 

Chanter 11 43 4% 4% 4% 

darter I OK 6 1068 18% 18ft 18% 4ft 
CtiraSh OK 11 8030 6% 6% 0% *ft 
QxflTtab 16 zlOO 12% 12% 12% -% 
Chmixiowr 12 no) 3ft 3ft 3ft 

ChpsfiTe 321124 6% Bft 6% 4 % 

d*m Cp 94 8139 78% 77% 77ft 4 ft 
Ctanfln 12B 12 320 *8% 40 « ft 

CKasCo 017 X 436 34% 33% 3«% 4ft 
QmoLpc 11 K99 25ft 24% 25% -ft 
OS Tech 31 506 2f£ 2ft 2ft 
QscoSys 25366B6 33ft 32ft 33 +A 

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dean H» 18 J4T 6 ^ 6 

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CMreson 80 237 4% 3% 4 4% 

CrraCnfcfl (100 IS 74 24% E4 24% 4% 
Cabfcnw 106 417 01* filj 6% 
CodeAbna 13 56 10ft 10% 10% 
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Capas 33 375 14*4 13ft 14% 
Coheran U 678 14% 14% 14% 
Cnagen 0 15 K 1347 21 2Dft 20% 

Cow Gas 1 126 II 51 19% 19 19% 4 ft 

Cow Grp 060 12 85 32ft 31% 32 
ComaK 032 II 1767 10ft 17% 17% 4 ft 
Cmntt* 009 194246 16% 15ft 16 -% 
CmcslASpr 009 551362 10% 15ft 16 -% 
DorenteniOa 10 88 29% 20 29% -& 

ConunQ 070 72 K 16% 161* 16% 4% 
CamrwC 192208 28*2 27% 29% +1% 
CnmprtWs 775 777 8% 7% 7% -ft 

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018 383537 33 30% 31% -ft 
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21 4M Bft 8ft 8% 

018 142968 10% 10 ID -% 

17 77 9% 9ft 9% 
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Hert* 088 9 1453 10% 16% 16% 4% 
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Hone Beni 080 9 35 20% 20% 20% 4% 
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tateEBua 080 14 236 18% 18% 18% 4% 
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112 15 19 2Bftd2B% fflft 
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StanaTuc 3 84 3% 3 3 

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StomaDM 321145 7 8% 6% 

StaBfflfc OK 18X100 11% 11% 11% 

242807 29ft a 20% 

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Smrttad 16 278 29 28 28ft 

SnmdaSf a 2555 14 13% 13ft 

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Sptagrt A 020 W6G24 10% 12% 1V« +H 

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MO 121420 3*» 31ft 313 -h 

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42 35 20% 19% 19% -% 
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17 237 13%d12ft 13% 4 % 
080 13 4 22ft 22ft 22ft 

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Sumac 1414110 33% 32% 33ft 

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106 2488 18% 16ft 16% 4lft 
Synrttoy 040 14 95 18% 17ft 18% 

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219050 Bf, 002 0J6 
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SytaSril 012 266402 15% 14ft 
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Tjumir OK 34 322 3% 29ft 29ft 
TBCCp 13 244 Bft Oft 9ft 

TEA Ota 044 25 440 23ft 22ft 23 
TecHta 17 1850 17ft 16% 16% 

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Tctatac 15 70 S 23% 23% 

Telco Sys 33 888 16ft 15ft 18% 

TatQnA 5B33XE6 24 23ft'23% 

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TabmCh am 60 515 

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TrtqvMar 034 34 328 57% 55% 57% 42ft 

Tom Brawn 354 309 10% Wft 10% -ft 

Tapps CD 026 121785 B% 5% Sft 4% 
TPIErtar 2 689 *'j d* 4ft 

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Untob 301297 4% 4ft Aft 

UCWisGbx 1JJ2 12 SB 15% 15ft 16% 

US TO 200 13 922 64 B3 64 + 1 

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Ihkogx OK 17 10 IBft 17% 17% -ft 

IHMn IK 2D ID 44% «% <3% -ft 

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114 <77 27 20% 26% -ft 

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26 371 2Sft 84% 24% 4ft 
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017 17 93 1B% 19 IBft -& 


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WartfadSl 084 719(5 17ft 17ft 17ft 4ft 
WattdAX 02 141916 20% 16 2Dft+1% 
iFU 034 IS 206 24ft 24% 24ft -ft 
WQ40 240 75, 57 42ft flft 41ft -ft 
4 435 Sft 3% Sft 4ft 
West One OK 6 572 28ft 28ft 28% 4% 
WtoBnc 058 10 304 39% 29% SD% +ft 
WtPU) 9 232 lift 10ft lift 

A 2 519 14ft 13% 14% 

WrtSertA IS 600 n5ft 4% 4% 
Write x 086 173425 42 41 42 

WtaSmm 4339(7 30ft 29ft 30 
MUHRlxOatt » 15% 18ft 15% 
Wtngt 040 201152 a 19% 20 

WPGnaii OK 21417 3ft 3,% 3 f t 
WjHfrfifcMO 1 91 5% 5ft Sft 


4% 

+% 

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4-1 


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■A 


-X- Y-Z- 

ntn 31 1705 00% SB% 60% +2 

Ktato 23100 3ft 3% 3& +A 

Yfe&rii 09(1731410 IBft 18ft 19% +ft 
VtfkRBta 115 188 4% 4% 4ft 4% 
ZUtaUtah IK 8 285 35ft 34% 34% 




■***“* 






WORLD STOCK MARKETS 


AMERICA 


Dow easier at 
midsession on 
consumer data 


Wan Street 


US share prices were mixed 
yesterday morning, bouncing 
back from deeper declines 
m»H p on the heels of failing 
bond prices, write s Lisa Bran- 
sten in New York. 

By 1230pm the Dow Jones 
Industrial Average was down 
3.36 at 3,736.20. The more 
broadly based Standard & 
Poor's 500 gained 0.49 at 454.65, 
while tbe American Stock 
Exchange composite lost 1.04 
at 432.55. The Nasdaq compos- 
ite was ahead 3.44 at 749.17. 

Trading volume on the New 
York Stock Exchange came to 
157m shares. 

For the first time in more 
than a week, the stock market 
acted in tandem with the bond 
market, which was off sharply 
alter a stronger than expected 
report on consumer confi- 
dence. 

The Conference Board 
reported that consumer confi- 
dence hit 101.3, substantially 
higher than economists' expec- 
tations of about KH. 

While some economists 
immediately wrote off the fig- 
ures as an aberration, others 
pointed to them as an indica- 
tion of strong inflationary pres- 
sures in the economy. Thus the 
market is worried that the Fed- 
eral Reserve might raise inter- 
est rates in the short term, 
causing an erosion of corporate 
earnings. 

Initial! y share prices fell as 
sharply as the bond market, 
with the Dow down more than 
20 points in the morning, but 
prices pushed back up towards 
the afternoon. 

The Dow passed briefly into 
positive territory before drop- 
ping back into slightly nega- 
tive ground. 

Santa Fe Pacific gained s% 
at $16 V« after the railroad com- 
pany put off a shareholder 
meeting in order to try to nego- 
tiate a better takeover offer 
from Union Pacific. 

Shares of Union Pacific also 
rose, up SVi at 846%, on the 


Canada 


Toronto stocks were mixed in 
sluggish midday trading, with 
a quiet afternoon session in 
prospect 

The TSE 300 composite index 
moved forward 13.33 to 4,101.73 
in turnover of 24.7m shares 
valued at C$349. 6m. Declining 
issues led advances by 292 to 
214, with 277 stocks 
unchanged. 

Of Toronto’s 14 sub-indices, 
eight sectors posted gains, Jed 
by precious metals, up 133.42 to 
9,037.32. 


Mexico gains 1.7% 


Equities advanced sharply in 
early trade, buoyed by an 
unexpected decline in domestic 
interest rates. The IPC index 
moved ahead 43.11 or L7 per 
cent to 2,605.94. 

The 28-day T-bill primary 
rate eased 10 basis points to 
13.85 per cent in the central 
bank's weekly auction. 

Traders said that more for- 
eign than domestic investors 
were behind the rise and that 
gains by Telmex had been a 
key factor. 

Telmex “L" shares appreci- 
ated a further 2 per cent, 
while its ADRs on Wall Street 
were $Vi higher at $54%. 


Argentina 


Shares on the Buenos Aires 
stock exchange gained ground 
in active early trading. 

The Merval index was 14.62 
or 3 per cent ahead at 500.48. 

Traders attributed the jump 
to a technical rebound follow- 
ing a recent bear run that 
brought the Merval to new 
lows for the year. 

The telecommunications sec- 
tor was among the biggest 
gainers, with Telefonica clim- 
bing 3.1 per cent to 5.40 pesos 
and Telecom advancing 16 
cents to 5.28 pesos. 


Johannesburg suffers fall 


South African shares saw 
sizeable declines as buyers 
steered dear of the market fol- 
lowing overnight selling of 
local stocks in New York and a 
fall in gold bullion. 

Traders said volumes had 
been low, indicating the lade 
of interest fn the market 

The firmer financial rand 
also impacted on rand prices 
of key stocks and helped to 
slow trade. 

The overall index shed 84 to 
5,749.9, the industrial index 


was 47.4 down at 6,886.8 and 
the gold shares index lost 98.5 
or 4.8 per cent at 1*957.5. 

De Beers relinquished R2L25 
at R91J25 in line with lasses in 
New York overnight, while 
Anglos dropped R4 to R228. 

Vaal Reefs tumbled R14 to 
R365 and Kloof moved down 
R2.75 to R56.75. Rusplats 
declined R2 to R109.50. 

SAB weakened R2 to R96 
and Sasol R2.25 to R31, but 
Engen rose 50 cents to R33.75 
and JEfiveld El to R3&50. 


FT-ACTUARIES WORLD INDICES 


FINANCIAL TIMES 


Wednesday November 301^4 


EUROPE 


Volkswagen slips a further 3.5% in 


news because it increased the 
likelihood that the larger rail- 
road would complete its bid. 

American Brands put on S 1 /. 
at $34% after the company con- 
firmed that it was holding 
"serious discussions" regard- 
ing the sale of its Franklin Life 
Insurance unit with finanriai 
group American General. 

Shares of American General 
shed SVi to $25% on the news. 

Shares of tbe aerospace divi- 
sion of General Motors gained 
$y, at S32% on news that GbTs 
Hughes had signed an agree- 
ment that would allow it to 
offer more than 400 profes- 
sional basketball games in 
the 1994-1995 season over its 
satellite television service 
DirecTV. GM shares were 
unchanged at $38%. 

Both National Medical Enter- 
prises and American Medical 
Holdings gained ground on 
news that a Congressional 
waiting period required before 
the two companies could 
merge had passed without 
requests for more information. 
National Medical firmed $% to 
$24% and American Medical 
rose S'A to S24%. 

Retailers posted another 
strong day. buoyed by early 
reports that consumer spend- 
ing should be up this holiday 
season. 

Dayton Hudson moved up 
SI Vi to S79v». JC Penney S% to 
$46%. the Gap $% to $36% and 
Dillards Department Stores S% 
to $28%. 


US consumer confidence data 
pad a marked effect on late- 
closing bourses across the Con- 
tinent. The “no" vote in Nor- 
way’s EU referendum was 
already la rgely discounted. 

FRANKFURT weakened in 
slow trade, the DAX index los- 
ing 14.17 at 2,044.2$. In the Ibis 
the index fell to 2.036.24. pres- 
sured by the US data. 

Volkswagen again came 
under selling pressure, drop- 
ping DM15.60 to DM425.60. 
even Himigh the vehicle manu- 
facturer said that its world- 
wide sales bad risen by 5.5 per 
cent in October. 

Smith New Court has turned 
positive on German retailers, 
arguing that while 1994 results 
were liable to be unexciting, a 
recovery in domestic consump- 
tion in the second half of 1995 
would trigger a rerating of the 
sector. The broker noted that 
the sector had underperformed 
the market by some 20 per cent 
since 1991. 

"Our preference within the 
sector is to stay away from 
food retail (too competitive) 
and department stores (declin- 
ing market shares) and prefer 
larger retail formats or special- 
ist retailers which have further 
scope for expansion or exhibit 
more cyclicality." 

In the sector yesterday. Asko 


Share price and Index 
130 


•:ET-5E 'Actuaries Share Indices 



Nov 29 TOE EUROPEAN SERES 

Hearty flags Open 1H30 1100 12JB 1X00 1400 tSflQ O QK_ 

FT-SEEurotntt ICO imOG 133531 1338.47 133758 1337.11 133548 ISSUE 1333*7 

FT-SE EbwtbcK SCO 138099 13«L91 139258 13BJ1 1381-53 HOMO 138138 1S8&44 

Nov 2S (tor 25 Mira (to 22 


Mr 2B (UrZ5 «a*« (tor 23 m 22 

FT -BE Euffltracfc 100 133332 132BJ7 132135 131X33 133T33 

FT-SE Eunlrack 200 1387.54 138031 138140 1370.41 W6U5 

6oa tOBB (OTMOK Hjfwip raff ■ imMiOO - HMJPMfcP 1»- J3E71 WM 


Dax Index 


Mar 1994 

Source): FT GnpKts 


rose DM10 to DM725. Douglas 
lost DM6 to DM409, Karetadt 
put on DM0.60 to DM550 and 
Kaufhof added DM2 at DM41. 

PARIS was also affected by 
the news from New York, and 
the CAC-10 index dipped 12.41 
to 1,939.97 in turnover of just 
under FFrflbn. 

Renault eased FFrl to FFr180 
as some investors took profits 
following the recent privat- 
isation. The government said 
the offer of shares to Renault 
employees had been 95 per cent 
oversubscribed. 

Cap Gemini Sogeti eased 
FFr8.30 to FFr180.90 following 
reports that Daimler-Benz 


might reduce its stake. 

MILAN was on hold, await- 
ing the outcome of yesterday's 
marathon session of the cabi- 
net. and the Comit index edged 
0-25 lower to 626.96 in a second 
day of very low volumes. 

Attention continued to focus 
on Credito Itaiiano. L12 off at 
Li.560, as the chairman met 
the head of the stock market 
regulator. Consob, amid 
mounting speculation that Itai- 
iano was about to make an 
announcement over its bid for 
control of Credito Romagnolo. 

After the market closed, Itai- 
iano said details of its proposal 
would be released once it had 
the go-ahead to proceed from. 
the necessary authorities. The 
Consob said Romagnolo's 
shares, suspended for the last 
two days, would resume trad- 
ing today. 

Ferruzzi picked up L39 or 3.1 
per cent to LI ,294 amid 


rumours that Serafmo, tbe Fer- 
ruzzl family holding, might 
renounce so pv* of the credits 
owed by Ferrara. 

AMSTERDAM could not 
maintain Monday’s progress 
and the AEX index receded 
L70 to 406.74. 

Unilever, up 90 cents to 
Fl 195 A0, attracted a positive 
note from James Capel follow- 
ing the company's recent third- 
quarter results. The broker 
commented that, “a belter than 
forecast underlying perfor- 
mance shr oud offcet the likely 
currency negative, and we 
have retained our full-year 
forecast of Fl 4.144bn net 
income". 

Ned&oyd firmed 40 cgnts to 
F15L60 ahead of today’s third- 
quarter results, which are 
expected to show net profits of 
b etwee n F130m. to Fl4Qm. 

ZURICH edged higher in 
quiet trade, with the market 


supported by demand for. 
heavily weighted index stocks. 
The SMI Index rose 5.3 to 
2,581.7, with 1 the easier dollar 
jmd lower bcEnd Mures acting 
as restraining influences. 

Roche certificates firmed 
SFr65 to S&5£40 and Nestifi 
added SEW at SFrt.215. Both 
were said to be .targets of large 
foreign buy octets. UBS bear-., 
ers continued to recoup same 
of their recent loss, rising SEr8 

MADRID was lower across 
the board and the general 
index gave up 3J0 or i per cent 
to 299-76. Repsol fell FtaQO or 
L6 per cent to Pta3,775, still 
suffering from reports earlier 
in the week that a Pta2 cut in 
petrdleum. products prices was 
still being considered by tbe 


Endesa ended Ptal20 lower 
at Pta5,860 amid local press 
reports that the state-run elec- 
tric utility was a candidate in 
the possible purchase of a 2D 
per cent stake in Cepsa from 
ppwfl o Central iBspano. 

OSLO finished slightly 
higher after the country voted 
a gainst joining the European 
Union in Monday’s- referen- 
dum. The All-share index 
gained 2.0 at 610.6 in brisk 
turnov er of NKr479m, after 
dropping early in the day in 


j ftwmadig te reaedbai toUteviifo 

Analysis noted that jaferest. 
rates slipped and thn crown - 
firmed against European cur- 
rencies as uncertainties van. 
ished and -the goverumeatsaH 
it would maintain a tight eco-" 

namic policy. 

A “ho" note had been largely 
factored into the market as 
opinion polls in recent montia. 

- bad shown opponent lead- 
ing comfortabl y, with support- 
ers apparently gaining .ground - 
only over tte last week.. 

Orkla “B" itise NEj 22£8 to 
N2&205 and- the “A”NKrU to 
NKI215. The company was 
among the few Woe dips to 
campaign against Et7 member- 
ship, because tbe heavily pro 
tected domestic food and drink 
market had a, particular impor- 
tance forit- 

STOCKHOLM was mixed, 
having, tried. to ; resist rising . 
debt market yields and a EaQ 
by Ericsson in late trading, 
The Affarsvariden index. fin- 
idled |ust L4 ahead at 1A012. 

. ASKrT^Ofen to SKr4TL50 in 
Ericsson "BT was attributed to 
the cancellation of a SKrtflQm 
contract to -supply a high 
capacity optical fibre transmis- 
sion network. 



Written and edited by . John fWt 

• ^ — ■ am, _ -i _• 

woo ■fncam Morgan 


ASIA PACIFIC 


Nikkei makes progress in subdued trading volume 


Tokyo 


Small-lot arbitrage buying sup- 
ported share prices In low vol- 
umes, and the Nikkei 225 aver- 
age advanced for the second 
consecutive day. writes Emiko 
Terozono m Tokyo. 

The index finished 115.13 
ahead at 18,926.49 after a day’s 
low of 18,826.37 and high of 
13,928.59. Overseas investors 
continued to sell larg&capital 
steels and shipbuilders, while 
individual investors, who had 
bought shares on margin, were 
also sellers. 

Volume remained subdued, 
at 160m shares against 184m. 

The life assurers’ half-year 
results released on Monday 
revealed that investments dur- 
ing the first six months to Sep- 
tember had remained conserva- 
tive, with assets allocated to 
bonds, and a decline in the 
ratio of assets in domestic 
stocks and foreign securities. 

Although the top eight life 
assurance companies, the lead- 
ing institutional investors, saw 
a 2.4 per cent rise in their com- 
bined unrealised gains on 
assets, analysts reckoned that 
their ability sharply to 
increase high risk investments 
remained limited. 

The Topix index of all first 
section stocks added 11.40 at 
L5Q2S2, while the Nikkei 300 
moved ahead 2.48 to 276.61 Ris- 
ing issues outpaced declines by 
655 to 299, With 210 stocks 
unchanged, bn London the 1SE/ 
Nikkei 50 index was just 0.19 
firmer at 1,238.06. 

Traders said worries over the 
December 9 Mures settlement 
were declining as an increas- 
ing number of investors were 
rolling over their positions into 
the March contract. 

Steel companies were 
actively traded. Sumitomo 
Metal Industries, the busiest 
issue of the day, dipped Y3 to 
Y320 on selling by overseas 
investors, while Nippon Steel 
put on Y3 at Y379. Mitsubishi 
Heavy Industries Improved Y3 
to Y729 in spite of selling by 
foreigners. 

Nippon Soda, a chemical 
company, appreciated Y7 to 
Y594 in active trading as indi- 
vidual investors were encour- 
aged by the company's glass 
which cleans itself using ultra- 


violet rays from the sun. 

Hoys. a contact lens maker, 
rose Y90 to Y2.570 on the liquid 
crystal display theme, while 
Nippon Paint, which is devel- 
oping liquid crystal colour fil- 
ters. climbed Y21 to Y700. 

Japan Airlines, heavily sold 
on Monday on fears over its 
unrealised foreign exchange 
losses, regained Yi9 at Y700. 
Sanyo Electric was Y14 higher 
at Y577 on hopes of strong 
earnings. Toshiba ended YS up 
at Y691. 

In Osaka, the OSE average 
rose 87.51 to 20.898.23 in vol- 
ume of 7.5m shares. Nintendo, 
the video game maker, moved 
forward YL30 to Y5.400. 


Roundup 


The Pacific Basin markets 
were mixed yesterday. 

SEOUL turned higher in cau- 
tious trading on the back of a 
strong rebound in blae chips 
and steady bargain hunting 
after the recent declines. 

The composite index 
improved 11.78 or l.l per cent 
to 1,081.26 amid hopes that 
overseas demand for blue chips 
would pick up after the ceiling 
on foreign ownership is raised 
tomorrow. 

Korea Mobile Telecom and 
Samsung Electronics went 
limit up to Wonl29,400 and 
Won523.000, gaining Won3,000 
and Wonl2,000 respectively. 

HONG KONG remained 
inhibited by the prospect of 
higher US interest rates, the 
Bang Seng index closing 4.11 
off at 8.65R26 after a day of 
narrow trading. Turnover 
picked up to HK$2.9bn from 
Monday’s HK$22bn. 

Companies being removed 
today as constituents of the 
index were lower. Jardine 
Matheson receded 50 cents to 
HK$52.25, Jardine Strategic 
HK&.10 to HK$23.80, Lai Sun 
15 cents to HKSll and Winsor 
10 cents to HK810.05. 

Their replacements were 
mostly higher. China-related 
Guangdong Investment gained 
15 cents at HKS4.50, Oriental 
Press put on 5 cents at HK&L20 
and Johnson Electric firmed 50 
cents to HKS2030, while Amoy 
was unchanged at HK$7-85. 

HSBC again dominated the 
most active list and put on 50 
cents at HK$86.50. Its Hang 


Seng Bank unit followed, 
adding 75 cents at HKS5S30, 
and HK Telecom was 10 emits 
higher at HKS15.45 after rising 
30 cents on Monday. 

TAIPEI drifted firmer in 
siowr trade amid caution ahead 
of elections this weekend. The 
weighted index gained 330 at 
6,388.10, after a day's low 
of &355.08. Turnover amounted 
to T$27.9bn. 

Food shares saw the best 
gains, with President Enter- 
prises strengthening T$2 to 
TS57 on news that the Invest- 
ment Commission had given 
approval for seven foreign 
companies to invest $l20.4m to 
buy r 20 per cent of its affiliate 
President Chain Store. 

Financials also rose: Fanners 
Bank was up by the daily 7 per 
cent limit to TS5L 

Slight profit-taking was seen 
in textiles and steels, while 


papers and construction issues 
were aisn easier. 

SYDNEY was weaker in good 
volume after October balance 
of payments data showed a 
narrowing in the current 
account deficit. 

The All Ordinaries index air- 
rendered 20.3 or UD6 per cent 
at LS9L3, after registering an 
intraday low of L8S42. 

Stocks finished mostly lower, 
with resources issues taking 
the brunt of selling pressure. 
Dealers said major mining 
shares were adversely affected 
by falls in base metal prices on 
the London Metal Exchange an 
Monday. Golds ended slightly 
softer after the bullion price 
weakened in New York. 

Industrials also lost ground, 
with transport, media and 
diversified industrial stocks 

slip ping the Tnnct 

BANGKOK made headway. 


although profit-taking surfaced 
during the day. The SET index 
finished LL21 up at 1.35K34, 
having touched L357JZ at one 
stage. Turnover was thin at 
B&SBtm. 

The index fell back after 
opposition parties submitted a 
no-confidence motion against a 
government mmigtor amri his 


bat with selective buying by 
foreign brokers s u p p ort in g the 
market in late trade. The com 
posits index ended l£i lower 
at 1,003.89 In. volume of 90m 


Tbe banking sector was the 
most active, rising L2 per cent 
in Bt804Jm turnover. 

MANILA was given a boost 
by strength in the US. The 
composite Index rose 1Z20 to 
2,691.19. Volume came to 7Khn 
shares worth aosfon pesos. The 
market is dosed today for a 
national holiday. 

Petron recouped Monday’s 
decline to dose 0.75 pesos bet- 
ter at 2L25 pe sos. 

KUALA LUMPUR was mar- 
ginally softer in light trade, 


KPJ Healthcare- made its 
' debut at M£L20 and finished at 
MJ5.75, against its offer price 
ofMILTD. ‘ 

WELLINGTON, after an 
early rally, slipped back on 
weakness in fores try sector 
shares. The NZSE-40 capital 
index was finally 2.18 down at 
2,00165 after opening 11 points 
ahead. 

Bnerco moved up 5 cents to 
NZ$2£5 after telling its 20 per 
cent teaks in E&ergy Direct to 
TransAlta Energy, of Canada, 
but EnergyDirect closed 3 
cents down at NZ$L7D on con- 
cern over the fate of its merger 
plans with Auckland-based 
Power New Zealand. 


■ ^ _ ri £ ^Ti 


For Gilt Repo, 


call 


NatWest Markets. 


Jointly comptfed by The Financial Times LM, 
NATIONAL AND 

REGIONAL MARKETS 

Ffrns In parcnthwas US Day's 

ahMr number of Knea Dofar Cham 

ol stack Index % 


Goldman, Sachs & Co. and NatWest Securities Ltd. In conjunction with the tnstltuta of Actuaries end the Fealty of Actuaries 


■ MONDAY NOVEMBBI 28 1984 

Pound Local Local 

Starting Yen DM Cwrency % ahg 

Index tadex Index Index on ctoy 


FWDAY NOVEMBER SB 1994 • 


Austria (16) 

B00km (36) 

Brazil (28) 

Canada (1G3|—„ 

Denmark f33) 

Hrtand (24) 

France (102} 

Germany (50) 

Kong Kong (56) 

Intend (14) 

taBy &Q.~~ 

Japan (468). 

Malaysia (97} 

Mexico (1® 

Netfwrtand (I9j 

NO* Zealand (14) 

Norway (23) 

Stagapore (44) 


168.13 

17106 

-168J2Q 

16&34 

12083 

J4«9 

181 SA 

~_16a07 

13839 

34820 

19962 

73J97 

132.17 

48853 


US 

DoRar 

Index 

Pound 

Stateig 

Index 

Yen 

Index 

Local 

□M Curency i 
index feidex 

16736 

16034 

10431 

13530 

14636 

17008 

168.90 

111.16 

14431 

14438 

167.09 

15048 

10431 

136-41 

132.10 

J 63.35 

15434 

10138 

13239 

ifsaaa 

12733 

12097 

79.82 

10336 

12739 

24720 

23436 

15433 

20035 

20537 


■ DOLLAR INDEX — 


aos 

15737 

15933 

104.80 

136.05 

14133 

133 

13838 

13133 

8633 

112.72 

112.72 

346 

347.04 

329.19 

21936 

28137 

344.48 

3.48 

18936 

188.10 

12446 

161.57 

18225 

1.77 

7S-K3 

8932 

45.82 

99.49 

6837 

031 

15133 

14836 

9429 

122.40 

9429 

1.79 

49835 

47338 

31130 

40438 

49136 

130 

2029-78 

192536 

126730 

1846JJ3 

764835 

3.44 

20938 

1983Q 

130.84 

16836 

16734 

439 

7233 

6831 

46.09 

6834 

6133 

132 

18431 

1B4.GQ 

121-49 

157 J2 

1BO.S2 


Switzerland (47) 

Thailand (46) 

United Kingdom (204) 
USA (513) 


141.11 

234421 

159.88 

... 157.18 

13162 

18868 


Americas (882) 

EutepepOT).. 

Nonfc(11ffl^.„, 


17X67 04 

167.75 02 

522.78 -Ol 


RacMc Basin (793) 18006 08 


Buro-Padfic (1301) 


North America (Big 18021 


-1633* 05 


Euupe 6 l UK (504). 


.130,19 Ol 


Patfflc Ex Japan (32S) 24X74 01 

ies > a6 W 

WWtaBt UKfJOIS) 16837 0.4 

WWd Bl Japan f1754> 1B3J8 03 


I^Wortd Index (2222). 1TT.14 04 1BL81 1Q6A4 139.18 144J8 


ftwndal ym oa mxwd. OeMnm. 


181-65 10039 138.12 14A93 180.80 


M .T? Ca - * ***** * Unted. 1B87 

» Mteyte nt raeMd le^enr kxacM. Lamt prion , 



188.15 

14936 

15337 

198.69 

167.46 

17030 

177.0* 

152.74 

15339 

14531 

12034 

13238 

275.79 

231.15 

23138 

201-41 

11635 

11A70 

16637 

15934 

T6330 

150.40 

128.37 

13034 

50636 

34139 

376.68 

21630 

172.09 

17239 

97.78 

80.17 

60 85 

170.10 

12454 

132.48 

821.63 

430.71 

472.71 

2847.08 

1B0838 

205636 

22330 

18733 

188.65 

7739 

6137 

6235 

211.74 

16532 

16832 

40138 

2B4.0B 

309.40 

342.00 

20535 

220.44 

166.79 

12838 

132.14 

24231 

17533 

18032 

17038 

14730 

14734 

21486 

1 81.11 

18530 

19634 

17835 

18838 

17838 

15639 

15639 

23331 

173.19 

178-12 

175.86 

13478 

14236 

175.14 

14338 

14836 

182.73 

175-67 

185.10 

1S8.12 

13636 

137.12 

29631 

23230 

23833 

17636 

14538 

14931 

17839 

15538 

16935 

19530 

17834 

17830 

16030 

158.8S 

16138 


For further details please contact 
Daniel Corrigan or David Lynes at NatWest Markets 
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