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FINANCIAL TIMES 


THURSDAY OCTOBER 27 1994 


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some 

nions 


Ford Motor soars 
to record $1.1 bn 
profits in quarter 

The US's second biggest carmaker, Ford Motor, 
reported record after-tax profits for the third quar- 
ter. Overall, after-tax prefits jumped to SLlbn, two 
and a half times their level of a year ago. The big- 
gest factor behind the increase was a $245m 
improvement in profits from vehicle sales in North 
America, which reached $529m. A 17 per cent rise In 
sales and lower discounts offered to customers 
drove the improvement Page 17. Lex, Page 16; Nis- 
san Motor loses appeal. Page 9. 

Moscow seeks way of limiting oil damage: 

Russian o ffi cia l s have flown to ths northern region 
of Komi to head the operation to control an oil spin 
t h a t environmentalists say could have a disastrous 
impact on the fragile Arctic environment Page 16 

DuPont chemical profits rise 97%: The 

world's largest chemical company. DuPont of the 
US, confirmed the strength of the cyclical upswing 
in its industry with a 97 per cent jump in third 
quarter net earnings from its chemical operations 
overalL Page 17 

Oarzarelli resigns from Lehman: New York 
market strategist Elaine Garzarelli has resigned 
from Iiehman Brothers Holdings. An industry 
source said she was asked to quit as part of cost- 
cutting measures. She is credited with accurately 
predicted the 1987 crash. 

Britain urged to curb road transport: An 

environmental commission sponsored by the Brit- 
ish government has recommended a donhiing of 
petrol prices in real terms, a halving of spending on 
main roads, and a big increase in subsidies to buses 
and trains. Page 16 

Cash-fo (--questions row grows: Opposition 
leaders in the UK stepped up the pressure on the 
government as prime minister Mr John Major 
sought to draw a line under the cash-for-questions 
controversy by meeting Lord Nolan, chairman of 
the nascent s tanding co mmittee on standards in 
public life. 

Bounctaig cheques rack Taiwan: For 

Taiwan’s underground financiers and aboveground 
brokers, yesterday's bounced cheque ratio 
Bnnm mc pm ant was bad news - a 10-month hi gh xt 
0.58 per cent Page 16 

Saab Automobile recovery continues: The 

Swedish carmaker has announced a SKi284m 
($39.4m) pre-tax profit for the first nine months and 
said it was on course for its first ftiH-year profit in - 
igy. years. Page 17 . _ . . 

Banco Santander is heading for record profits 
this year after its Pta281bq ($&2bn) acquisition last 
April of troubled bank Banco Espafiol de Crtxbto. 

. (Bauesto)Pagei7, 

Brussels in tougher stance on trade: The 

European Commission Is poised to drop its inhibi- 
tions about using countervailing duties as part of a 
tougher approach to tackle illicit trade practices by 
third countries. Page 4 

UK gifts fall sharply: UK gilts prices lurched 
sharply lower after the Bank of England announced 
the results erf the auction of £L5bn 8 per cent gifts 
due 2005. The December long gilt futures contract 
lost jg point to 99&. Page 24 

France tightens Saudi export terms: France 
has confirmed that it has toughened terms for 
export credit guarantees with Saudi Arabia in the 
last few weeks in the light of a reassessment of the 
Middle Eastern government's ability to pay 
promptly an its guarantees. 

Hijacker frees two crew members: Two 

crew members were freed from a hijacked plane in 
southern Russia, leaving only the captain and the 
hijacker on board, according to the c ommer cial 
radio station Fkho Moskvy. The hijacker, believed 
to be acting alone, ~has already received $ St . 3m ran- 
som in exchange for releasing 23 hostages and is 
believed to want another $2m. 

Sharp ahead 55% at six months: Sharp, the 
Japanese consumer electronics manufacturer, 
increased non-consolidated recurring profits - 
before extraordinary items and tax by 55 per cent in 
the first six months to the end-September. Page 23 

Competition hits Chinese airlines: Chinese 
airlines are rep o rti ng heavy losses in the face of 
s tiff competition from foreign carriers and a s harp 
rise in operating costs. Page 6; Iberia tries to avert 
strikes. Page 3; Anstralia-NZ ‘open skies’ cloud 
over, Page 4. 

Anheuser record: Anheuser-Busch cemented its 
position as the top brewer in the US duri ng foe 
third quarter, reporting record sales and profits as 
its Bud Light brand became the country’s second 
most popular beer after Budweiser. Page 20 


France ordered to open two internal air routes 


By Paul Betts in London, 

John Ridding in Paris 

and Lionel Barber hi Brussels 

The European Court of Justice 
yesterday ordered the French 
government to open up immedi- 
ately two of the country's busiest 
and most lucrative internal air 
routes, ending the monopoly of 
Air Inter, the domestic partner of 
Air France. 

The decision is the second 
defeat in five months for the 


French government which has 
been attempting to delay liberali- 
sing its domestic air transport 
market while it seeks to restruc- 
ture its loss-making flag carrier. 

Last night the government was 
still seeking to avoid the immedi- 
ate opening of the routes. 
Instead, it said it would open 
them from January next year. 

France was forced in June to 
allow British carriers to fly to 
Orly airport in the south of Paris 
after a confrontation with the 


British government and the 
European Commission. 

After losing the "Battle of 
Orly", it appealed to the Euro- 
pean Court against another Brus- 
sels ruling ordering it to open up 
the Orly-Marseilles and Orly- 
Toulouse routes by October 27. 

But the court rejected the 
Ftench request to delay liberali- 
sing the two profitable routes 
until later next year and said 
France "must open the lines... 
and take the necessary measures 


to allow this decision to take 
effect on October 27". 

The French reaction could set 
Paris on a collision course with 
Brussels over EU air transport 
liberalisation policy. 

Mr Marcelino Oreja. the Euro- 
pean Union transport commis- 
sioner. yesterday called on 
France to comply fully with the 
court ruling. Mr Oreja is under- 
stood to be adamant that France 
cannot be allowed to delay open- 
ing up landing rights until Janu- 


ary. The EU is a community of 
equal rights and obligations 
before the law," said one Brussels 
officiaL "France is not respecting 
this principle," he added. 

Member states and airlines 
committed to liberalisation are 
also angry at the Commission's 
decision to allow the French gov- 
ernment to grant FFr20bn 
<$39bn) in fresh subsidies to Air 
France, as weil as approving 
state aid to Olympic Airways of 
Greece and TAP Air Portugal. 


Hussein and Rabin signal new era of co-operation in desert ceremony 

Israel and 
Jordan end 


46 years 
of hostility 


By Juflan Ozarme on the 
IsraeFJardan border 

Israel and Jordan signed a formal 
peace agreement on their barren 
border yesterday in a desert cere- 
mony with blessings taken from 
the holy books to mark the end of 
46 years of hostility. 

"It is not just the end of war 
but the beginning of new 
co-operation." Mr Shimon Peres. 
Israeli foreign minister, told the 
5.000 guests.- “Let's —dream - 
together. We’ve got the licence." 

The treaty demarcates the two 
countries’ borders, resolving dis- 
puted water claims and fixing 
security and environmental 
arrangements. The two nations 
will exchange ambassadors 
within a month and begin ambi- 
tious joint economic projects. 

President Bill Clinton, who 
attended the ceremony, praised 
King Hussein of Jordan and Mr 
Yitzhak Rabin, the Israeli prime 
minister, and said the treaty had 
broken the chains that had kept 
the two countries in the shadow 
of strife and suffering. 

"Here in this region which is 
the home of not only both your 
faiths but mine I say: Blessed are 


the peacemakers, for they shall 
inherit the earth," said Mr Clin- 
ton, who signed the treaty along 
with Mr Rabin and Mr AbduL 

Salarn aLMajali 

Mr Rabin said: The peace that 
was born today gives us all the 
hope that the children bom today 
will never know war between us 
and their mothers will know no 
sorrow." 

Symbolic gestures of reconcilia- 
tion between former wa rriors , 
dominated the open-air cere- 
mony. One Israeli in a wheel- 
chair, wounded by Jordanians in 
the 1967 battle for Jerusalem, 
wept as Israeli and Jordanian 
marching bands rubbed shoul- 
ders and played their respective 
national anthems. An Israeli girl 
and a Jordanian girl, whose 
grandfathers were killed in the 
1967 war, gave flowers to Mr 
Rabin. King Hussein and Mr Clin- 
ton. The Israeli and Jordanian 
chiefs of staff together with com- 
manders of the air force, navy 
and southern fronts shook hflndg 
and exchanged gifts. 

But even as the ceremony took 
place, Jewish settlers claimed 
that Arab gunmen had kid- 
napped an Israeli youth in the 



Smoke signal; King Hnssein of Jordan (left) informally seals his country’s peace deal with Israel by 
sharing a cigarette with Israeli prime minister Yitzhak Baffin after the official signing ceremony 


West Bank, as Palestinians 
opposed to the treaty held rallies 
across the West Bank and burnt 
pictures of King Hussein. The 
Lebanese Islamic extremist Hiz- 
bollah group sent mortar fire 
crashing in to northern Israel 
and denounced the treaty as “a 
grand crime and treachery”. 

Mark Nicholson adds from 
Cairo: Earlier yesterday. Mr Clin- 
ton held talks in Cairo with Pres- 
ident Hosni Mubarak, the Egyp- 


tian leader, and Mr Yassir Arafat, 
chairman of the Palestine libera- 
tion Organisation, after which 
the US president said he was sat- 
isfied with Mr Arafat’s undertak- 
ings to combat Hamas, the mili- 
tant Mamie Palestinian group. 

Calling this a "matter of great 
urgency”, Mr Clinton told report- 
ers that he received a “very firm 
and unambiguous response" from 
the Palestinian leader. "Chair- 
man Arafat said he would con- 


tinue to do all that he could to 
combat terrorism, specifically 
Hamas, but other groups as 
welL" 

Mr Clinton added: "I believe 
that he understands that Hamas 
is his enemy now and that once 
you become a partner in the 
peace process, you have to fight 
for peace." 

Clinton aims to ease Israel-Syria 
deadlock. Page 7 


The British government and 
seven European airlines filed 
actions in the European Court 
this month seeking to annul the 
EU approval for the Air France 
state aid. 

The French Transport Ministry 
said in a statement that the gov- 
ernment was committed to “grad- 
ual and managed liberalisation" 
on domestic routes. 

Austraha/NZ 'open skies’ cloud 
over, Page 4 


Sweden’s 
Securum to 
seek $2.8bn 
in debt 
package 

By Christopher Brown-Humes 
In Stockholm 


Securum, the Swedish 
state-owned company set up to 
liquidate Nordbanken's bad 
loans, launched a SKr20bn 
(SLStrn) refinancing yesterday in 
one of Sweden's biggest non- 
government debt issues. 

The funds will be used to repay 
most of the loans Securum 
received from Nordbanken, the 
state-owned bank, when it took 
over SKr67bn in sour credits 
from the bank last year. 

The move allows Securum to 
widen its borrowing base and 
assists government efforts to pri- 
vatise Nordbanken, the biggest 
casualty of thp Swedish banking 
crisis, by reducing its exposure to 
a single client Privatisation is 
expected next year, after formal 
approval from the newly-elected 
social democratic government 

Mr Anders Nyren, Securum’s 
chief financial officer, said the 
company wanted to "position 
itself in the international mar- 
kets for future business transac- 
tions”. He stressed there would 
only be “a very marginal" 
increase in the company's fund- 
ing costs, even though the loans 
from Nordbanken were granted 
on a “cost of funds" basis. 

Nordbanken will remain Secu- 
rum's largest creditor, but out- 
standing loans are expected to 
fall to between SKr5bn and 
SKrlObn from nearly SKr23ba 

The two tranches of the pro- 
gramme are backed by the Swed 


Continued on Page 16 


Tokyo minister under pressure 
to quit after war comments 



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By WBBam Dawkins in Tokyo and 
Tony Walker in Beiflng 

Japan's government was plunged 
into a rillamma yesterday over 
whether to sack one of its most 
valuable cabinet ministers or risk 
a serious row with China. 

Mr Ryutaro Hashimoto, inter- 
national trade and industry min- 
ister, came under pressure from 
China to resign over recent 
remarks about the second world 
war. 

Mr Hashimoto had told the 
Japanese parliament, in response 
to an opposition party question, 
that it was a matter of 
delicate definition, whether Japan 
had committed aggression 
against its Asian neighbours dur- 
ing the war. 

China’s official Xinhua news 
agency said: "Hashimoto's 
remarks thrust him infa fhp cen- 
tre of controversy over Japan's 
continued reluctance to accept 
responsibility for the war, an 
issue that has ended the careers 
of two ministers this year." 

South Korea said that Mr 
Hashimoto’s remark was regret- 
table. 

If he is obliged to step down, 
the government will lose a senior 
figure in holding together the 
three-party coalition of the con- 
servative Liberal Democratic 
party, left-wing Social Demo- 
cratic party and the small centre- 
left New Harbinger party. 


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Hashimoto: under press u re from 
China to step down 

Mr Hashimoto, a senior mem- 
ber of one of the LDP’s mam fac- 
tions, is the government’s tough- 
est trade negotiator and an 
important influence in economic 

policy. 

If he stays, the risks of a row 
with China are intensified when 
relations between the two are 
already difficult China's rela- 
tions with Japan became sud- 
denly precarious several months 
ago, when they woe dra wn into 
a protracted wrangle over the 
presence of senior Taiwanese offl- 


CONTENTS 


dais at the recent Asian Games 
in Hiroshima. 

Mr Hashimoto irritated China 
again only last week by meeting 
his Taiwanese counterpart, 
Japan’s first formal ministerial 
meeting with Taiwan in 22 years. 
The 31 health of Mr Deng Xiao- 
ping, the Chinese leader, contrib- 
utes to inflexibility among Bei- 
jing’s leaders, unwilling to step 
out of the official line when a 
power Struggle may be imminen t. 

Mr Tomiichi Murayama, 
Japan's socialist prime minister, 
has sought to defend Mr Hashi- 
moto's war remark, while Mr 
Kozo Igarashi, the chief govern- 
ment spokesman, maintained 
yesterday that the comment had 
been misreported. 

The growing queue of Japanese 
ministers to lose their jobs for 
their views on wartime history 
(four in the past eight years) is a 
testament to Japan’s continuing 
internal divisions over whether it 
was aggressor or victim. 

Mr Hashimoto, 57, an the right 
wing of the LDP, represents an 
important minority that feels 
that Japan's recent wartime apol- 
ogies should not diminish the 
honour of its war dead. 

He heads an association of 
bereaved war families and leads a 
controversial annual visit of LDP 
colleagues to the Yasukuni 
Shrine, where war heroes, indud- 
ing some convicted war crimi- 
nals. are remembered. 


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.vrm^AMrru. TIMES LIMITED 1994 No 32.508 Week No 43 LONDON 


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« PARIS - FRANKFURT - NEW YORK - TOKYO 










I 


FINANCIAL TIMES THU RSDA Y OCTOBER 27 .-W4 


NEWS: EUROPE 


France ponders superhighway gamble 


By Join Ridkflng in Paris 


F rom the network of 
trains a grande vitesse 
to the construction, of a 
new national library, France 
has a penchant for grands pro- 
jets. Today, the government 
will consider a project which 
could rank with the grandest - 
the creation of a national auto- 
route d’information. a gallic 
information superhighway. 

Ministers from the relevant 
departments of Prime Minister 
Edouard Balladur's govern- 
ment meet this afternoon to 
discuss a long-awaited report 
from Mr Gerard Thery, a for- 
mer managing director of 
France Telecom and an archi- 
tect of the Minitel project, the 
teletext system which now has 


more than 23,000 services. 

Like Minitel at its launch in 
1979. Mr Tilery's new project is 
ambitious. His report proposes 
the establishment of a network 
of fibre optic cables linking 
every household by 2015. The 
aim js to build a national infra- 
structure allowing the French 
public and businesses to con- 
nect to a network of Interac- 
tive television, telephone enter- 
tainment and data services. 

According to Mr TU&ry, the 
cost of the Infrastructure alone 
would be between FFrlSDbn 
(£18bn) and FFr20Gbn (£24bn) 
by the year 2015. Much of the 
investment, he argues, should 
be borne by France Tfel&com. 
which should switch resources 
from copper telephone lines to 
the fibre optic cables needed 


for the superhighway. 

“We are behind not only the 
US, but also our main partner, 
Germany," he says, citing the 
Opal project, which will pro- 
vide fibre optic connections to 
L 2 m east Germans by 1996. 

The message strikes a chord 
with the French government. 
But it has yet to decide how Car 
Mr Ttafcty’s ambitious propos- 
als will be transformed into 
reality. 

In his letter ftninmiKs in rring 
the report, Mr Bahadur asked 
Mr Tbtry in February to “elu- 
cidate" the objectives for 
France in the area of informa- 
tion superhighways. Officials 
say the study will lead the 
debate but that It is not a blue- 
print for legislation. 

But Mr Thdry’s proposals 


have also drawn criticism. 
“There is little analysis of the 
role of competitors," says one 
industry analyst “Telecoms 
markets are in the process of 
liberalisation, but there is no 
mention of any other players 
except France Telecom.” 

The report also skirts the 
issue of how France's pro- 
gramme should relate to that 
being- studied by the European 
Commission. In particular, Mr 
Martin Rangemann . the indus- 
try commissioner is proposing 
that private companies rather 
than governments should take 
the lead in the development of 
a European information super- 
highway. 

Some EtJ member states are 
pressing for national operators 
to surrender their monopolies 


over their national infrastruc- 
ture. In France, communica- 
tions and utilities groups such 
as Bouygues and Gtadrale des 
Eaux are pressing for 
increased access to the tele- 
coms market 

More serious, given the cen- 
tral role it has been prescribed 
by Mr Thery, are the reserva- 
tions expressed by France Tele- 
com. The state operator is 
wary of such a bold investment 
in infrastructure. Mr Marcel 
Roulet, chairman, says: 
“Rather than pot in place 
immediately a colossal infra- 
structure, let us focus on the 
contents, namely the pro- 
grammes, which we will be 
able to offer our future cli- 
ents." 

Behind such sentiments lies 


Italy’s ex-communists drawn into corruption probe 


By Robert Graham in Rome 


Italy's former communists, the 
Party of the Democratic Left 
(PDSj. is facing a major corrup- 
tion investigation for the first 
time. The investigation, which 
the PDS says is government- 
inspired, centres on public 
works contracts awarded in 
Sicily during the 1980s to com- 
munist co-operatives. 

Over the last two years mag- 
istrates in Sicily have arrested 
hundreds of businessmen and 


politicians on corruption 
charges relating to distribution 
of lucrative public works con- 
tracts. But this is the first time 
the PDS has been targeted. Mr 
Massimo D'Alema, the PDS 
leader, accused the govern- 
ment of orchestrating a cam- 
paign to discredit Italy’s larg- 
est opposition party. 

Milan magistrates have 
undoubtedly singled out pre- 
mier Silvio Berlusconi’s Fin- 
invest business empire in their 
anti-corrnption inquiries. 


Nonetheless, the PDS has 
always defended the magis- 
trates' independence against 
accusation of political bias. 

The Sicilian investigation 
has unusual aspects. It stems 
from an anonymous denuncia- 
tion and is being pursued by 
the carabinieri rather than the 
judiciary. On Friday the cara- 
binieri asked PDS headquar- 
ters in Palermo for a list of all 
officials dating back to 1980, 
and cooperatives’ offices for a 
list of ail public works con- 


tracts in the same period. Ear- 
lier, Mr Cesare Previti, defence 
minister, bad hinted the judi- 
ciary would soon be turning 
their attention to the “red 
trail". And at the weekend Mr 
Giulio Maceratini. head of the 
neo-fascist MSI/National Alli- 
ance in the senate, invited the 
carabinieri to search the PDS’ 
Rome headquarters. 

The Berlusconi government 
believes anti-corruption inves- 
tigations since 1992 have 
focused little on the PDS and 


its predecessor, the Communist 
Party of Italy. Ms Tiziana Par- 
enti, now a parliam entar y dep- 
uty for Mr Berlusconi's Forza 
Italia, left the Milan magis- 
trates' anti-corruption team 
because of a disagreement on 
this issue. 

The matter is one of the 
complaints against Milan mag- 
istrates now being Investigated 
by a special team of inspectors 
from the justice ministry. 
These complaints mainly con- 
cern the handling of inquiries 


into the Fininvest group. 

Several members of parlia- 
ment said yesterday in private 
they did not doubt that most 
public works contracts in 
Sicily had been subject to 
irregularities. But they 
suggested the move against the 
PDS was an attempt to ensure 
government and opposition 
were seen to be equally entan- 
gled in corruption inquiries. 
This would increase pressure 
for a political solution to end 
the investigations. 


1984 



1994 


THE “CB” BANK CAKD: 


10 YEARS OF INTERBANKING 


It was in 1984 that the French banking 
community, without posing a threat to the 
autonomy and personality of its individual 
members, decided to construct an interbank 
system for the withdrawal of cash and payment 
by cards: the “CB" system. 

Today, only close technical and financial coope- 
ration enables each bank to offer its customers 
a universal bank card which is growing ever 
more reliable: the “CB” card. 


With cards from all banks being accepted in 
ail stores and by all teller machines, both con- 
sumers and merchants are free to choose their 
own banks. 


Each and every one thus benefits from compe- 
tition between banks which remain fully in 
control of their own commercial policies. 


It is this balance between cooperation and competition 
which lies behind the success of the "QTBank Card. 


10 YEARS OF SUCCESS 



1984 


1994 


(prior to interbanking) 

(after 10 years of mfeifcanJdjQg) 


3 incompatible networks 

1 perfectly interbank 
system: 


Carte Bleue 

Credit Agricole 

Credit Mutuel 

the system 

Number of cards: 

5 million 

7.5 million 

1.3 million 

22 million “CB” cards 

Affiliated merchants: 

275,000 

140,000 

10,000 

530,000 

(including those equipped 




with EPTs): 

14,000 

13,000 

6,000 

380,000 

Number of payments: 

124 million 

22 million 

4.5 million 

1.6 thousand million 


Automatic teller machines: 


3,700 


2,900 


19,000 


Number of withdrawals: 


60 million 81 million 


17 million 


600 million 



GROUPEMENT DES CARTES BANCAIRES «CB» 


EUROPEAN NEWS DIGEST 


a worrying precedent - the 
Plan Cable. Launched in 1982. 
the plan committed FFr25bu to 
create a state of the art cable 
network. But competition from 
more terrestrial and satellite 
TV broadcasters, the high cost 
of subscriptions and the lack of 
services have all limited 
demand. France still has one of 
the lowest rates of cable pene- 
tration in Europe. 

“France made just about 
every mistake in cable that it 
was posable to make,” says Mr 
Gerard Eymery. chairman of 
the multimedia operations of 
France Tfitecom. 

The task for ministers today 
is bow to plot a path so that 
the next grand projet of the 
information era is not such a 
grand failure. 


Berlusconi eases 
pensions pain 


Berlusconi ppyprnmenL yesterday agrerd on a new decree 

StSV aft 

would be LOTObn (£240m>. The expense would be mot from a 
treasury contingency fund. The cost of the amendments is 
fow^than first projected: this is largely because the 
ment has shifted the biggest burden ofthedba totta 
1996 and 1997 budgets. The government dectfrf to s 
aspects of pension reform in the wake of the huge nationwide 
demonstrations organised by the trade unions. 

The main hardship cases concern those who retired early 
hoping to collect more generous pensions next >^ r 
mg expected benefit cuts. They risked tarns trapped .hi ■ a 
government decision to stop paying pensions for the first s« 
months of retirement to people who retired between Septem- 
ber and February 1995. Now those with 37 years contributions 
by July will have uninhibited access to their pensions. Toe 
government will also remove the penalty applied to thtKe 
retiring early if their retirement is postponed to 1996 or m the 
rasj- of less than 30 years’ contributions to 1997. Robert Gra- 
ham, Rome. 


Confusion over rouble support 


The deputy chairman of Russia's central bank yesterday said 
it would no longer intervene on the foreign exchange markets 
to support the rouble - a policy it followed for much of this 
year at great cost “The reserves of the central bank are 
sufficient only to support five or six days of interventions on 
Moscow's Interbank Currency Exchange." Mr Alexander 
Kbandruyev told an international conference in London. "In 
August, foreign exchange reserves were $5.2bn. Now we have 
S1.7bn-fUbn left What do we do next?" However, his com- 
ments contradicted those made earlier this week by Tatyana 
Paramonova, the new head of the central hank, who succeeded 
Mr Victor Gerashchenko when be resigned after the rouble 
collapsed after the central bank abandoned its support. She 
pledged: “Foreign currency reserves, of which the Central 
Bank of Russia is not the only holder, will be used to defend 
the rouble rate." 

The rouble's 21 per cent plunge against the dollar on Octo- 
ber 11 sent that week's inflation rate to a one-year high. 
Inflation jumped to S.S per cent, the highest rate since Septem- 
ber 1993, up sharply from the previous week’s rate of 2.7 per 
cent. Our Forvign Staff, London. 


Prize-winning law students 




The final interviews for the Financial Times-Freshfields 
European Prize for the Best Business Law Student of 1994 
were conducted in Frankfurt on Monday. Pictured from left to 
right are Mr Robin Pauley, managing editor of the Financial 
Times, (vice chairman of the panel of judges); Mr Okko-Hen- 
drik Behrends, Germany, joint first prize winner Professor i 
Guido Rossi. Professor of Law, Milan University, (chairman of j 
the judges); Mr Vincent Coq, France, third prize; Mr John 
Grieves, senior partner of Freshfields; Mr David Chijner, 
France, joint first prize. The panel of 14 judges assessed the 
candidates on their knowledge of national law, international 
private law and European Union directives. 


Zeiss workers fight job cuts 


Thousands of German workers chanting "out with the man- 
agement" yesterday protested against job-cutting plans by 
optical equipment maker Cad Zeiss and demanded that the 
company's board quit. Mr Edwin Michler, head of the loss- 
making company's works council, told 4.500 jeering demon- 
strators at the Zeiss Oberkochen plant in the southern state of 
Bad en-Wuittem berg the board was not providing enough 
information about Its plans. Zeiss, once renowned for its 
paternalistic management, wants to shed 3,000 out of 15.900 
jobs in plants in east and west Germany by withdrawing from 
unprofitable business areas to save about DM250m (£l02m) by 
1996. Mr Michler accused the board of making contradictory 
statements about the future of various factories. 

Zeiss management board chairman Mr Jobst Herrmann 
announced last week he planned to resign. The group lost 
DMlfiOm in 1993/94 mainly in east Germany’s Jena branch. The 
management says further losses would endanger the compa- ; 
fly's existence once funds provided to the Jena company by 1 
the Treuhand privatisation agency dry up in 1995. Reuter, 
Oberkochen. 


Tapie in courtroom battle 

Mr Bernard Tapie, the controversial French b usinessman and 
politician, yesterday renewed his legal battle against Credit 
Lyonnais, the troubled state-owned bank to which he owes an 
estimated FFrl^bn (El 40m). In a packed courtroom of the 
Tribunal de Grande Instance in Paris. Mr Tapie’s lawyers 
argued that Credit Lyonnais should be forced to stick by the 
terms of a deal it reached with him in March this year to 
repay his loans over five years. Credit Lyonnais argues the 
agreement is void because he did not supply the necessary 
expert opinions in time to support the high value he riximri 
for the assets against which the accord was secured. The bank 
already has custody of many of Mr Tuple’s assets, including 
55®®* collection, his yacht and his house in 

. s V ggest ^ “ay be worth substantially less 
thantos debts, with one putting them at FFriSOOm. Judgment 
is expected in several weeks. Andrew Jock, Parts. 

ECONOMIC WATCH 


German inflation falls to 2.8% 


Western Gorman*: Inflation 

Annual « change In CPI 


3.0 — 



aS Uu - l . LJ .M I. , 

1993 

Source: Daias»s»n 


Inflation in west Germany 
cased to 2J$ per cent a year in 
the month to mid-October 
from 3 per cent in the previ- 
ous “oath, according to pre- 
“buaary data from the fed- 
eral statistics office. Prices 
u^reased just 0.1 per cent in 
the review period, when rents 
and the cost of services eased 
and seasonal food bills rose 
by less than expected. The 
outa should soothe market 
fears of any monetary tight- 
ening by the Bundesbank, but 
did not pave the way for an 
automatic reduction in inter- 
est rates, said Mr Richard 
««fl, senior economist at the 

lntrni>4 a 


Union bank of Switzerland’s economist at the 

tot the ^ -ofeS 

from import prices, expected upwards pressure 

After hitting 2.3 per cent In janlS!!?* 1 ? 1 continue foiling, 
by late suSmer. January * ^ reach 2 per cent 

DKnLOebn tr * de surplus was 

July. The unadjusted in 

to DKr23.7bn compared to feU 

m Portugal's retail sales Sdexm?? f° r previous y®** 

mmths to Ji ™. NMoXStti- iKTiii the 12 


Clr 






financial times 


THURSDAY OCTOBER 27 1994 


NEWS: EUROPE 


Challenge to Russian democracy on the waterfront 


T hey drive through the 
streets m Japanese 
four-wheel drive 
vemcies, groups of tough 
young men with cropped hair 
and leather jackets - the uni- 
torm of the gang enforcers. 
Welcome to Vladivostok, Rus- 
sia’s famed port on the Pacific, 
where organised c rimq nanw 
are hugely powerful and are 
battling it out for control of 
port fa cilit ies, companies an d 
retail outlets. 

In the elegantly restored Ver- 
sailles Hotel, in the town cen- 
tre, visiting businessmen speak 
of all deals having to go 
through one or other of the 
local crime families: of nightly 
shootings; of a wholly c orr upt 
police force. 

This is the menacing setting 
for a drama of great impor- 
tance in the development of 
Russian democracy. 

The governor of the Pruno- 
rye region, of which Vladivos- 
tok is the capital. Mr Evgeny 
Nazdratenko, has been accused 
of corrupt and dictatorial rule 
- by- local people, by those 
claiming to be his victims n~nH 
by external experts. These 
claims have not, however, been 
tested in court they remain a 
vast, but unproven, indictment 
of the effectiveness of Russian 
regional and central 
government. 

On one night last week, Mr 
Ale x a n der Sviridov, whose Sab 
corporation was about to open 


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a diamond exchange in the 
city, was killed in what the 
Interfax news agency «rid was 
probably a mafia lonifryg - Ear- 
lier on the same day, Mr Vladi- 
mir Cherepkov, son of Mr Vic- 
tor Cherepkov, Vladivostok's 
former mayor, was sontepra fl 
to seven years in prison for the 
theft of a computer from his 
school. 

According to opponents to 
his rule, t hese disparate events 
are connected to the central 
actor in the drama of Vladivos- 
tok, Governor Nazdratenko. Mr 
Nazdratenko was to have stood 
for election as governor on 
October 7 (he is presently 
appointed by President Boris 
Yeltsin): but the vote was can- 
celled by a decree issued by Mr 
Yeltsin last month. 

The vote was called off 
immediately after the receipt 
of a report, written by experts 
from the Russia’s Choice party 
fled by Mr Yegor Gaidar) 
which said that Primorye was 
“in the grip of Gear”; it alleged 
that Mr Nazdratenko had ter- 
rorised political opponents, 
closed opposition newspapers, 
taken shares with associates in 
the bulk of the privatised 
enterprises and - in his ven- 
detta against former Mayor 
Cherepkov - tramped up the 
theft charges a gainst his son 
after dismissing the father 
from office an false charges of 
accepting bribes. 

According to Mr Igor San- 
achev, a forma: official under 
Mr Cherepkov, "Nazdratenko 
had all the moans to ensure 
that he won the election”. This 
is a judgment shared by others 
who would not give their 
names. This assumption of 
intended ballot-rigging or 
intimidation was the reason 
the opposition pressed for a 


John Lloyd reports from the Pacific port of Vladivostok, where 
both organised crime and the local governor appear out of control 



Vladivostok: Crime families are battling for control of port facilities as well as many of the city’s companies and retail outlets 


postponement of the election 
for governor. 

Mr Sanachev goes further: 
cancelling the election 
deprived Mr Nazdratenko of 
his only chance to survive - 
the chance of gaining the peo- 
ple’s mandate. Now, he 
believes: “He has served his 
purpose and he has to go.” 

That purpose, according to 
Mr Sanachev and the Russia’s 
Choice report, was to provide 
an administration which would 
allow the directors of the large 
plants to get rich through pri- 
vatisation «mri through misuse 


of government funds. For the 
past three years, according to 
Mr Sanachev and the Russia’s 
Choice investigators. Mr Naz- 
dratenko and his allies in a 
group named “PAKT", had so 
dominated the privatisation 
process as to ensure that the 
largest single portion of shares 
came to them as directors of 
tbe enterprises privatised. 

The i nves tigators claimed 
the “PAKT" group had also 
gained control of the regional 
administra tion trod systemati- 
cally suppressed opposition; 
had, through the administra- 


tion, threatened to declare 
“autonomy” as a Far Eastern 
Republic in order to cajole 
more support out of Moscow; 
and diverted and misused state 
funding so efficiently that ser- 
vices are only sporadically pro- 
vided and workers go up to six 
months without pay. 

Mr Nazdratenko was too ill 
to be interviewed: his deputy 
governor, Mr Nikolai Pimenov, 
insisted that corruption waa 
not a problem in the adminis- 
tration and that “autonomy” 
was simply a desire to agree 
with Moscow on a special eco- 


nomic status for the region, of 
the type other regions and 
republics enjoyed. 

But according to the former 
mayor. Mr Cherepkov, the 
administration is ruthless. 
Elected as mayor last year on 
an anti-Nazdratenko ticket, he 
was physically removed from 
his office in May and a substi- 
tute mayor put in his place. 
His son was arrested and 
charged with the theft. Last 
Friday, he received seven 
years' jail - a savage punish- 
ment which, his father said, 
“all agree was a punishment 


not for him but for the Cherep- 
kov family”. Mr Cherepkov 
says that the judge is a close 
ally of Mr Nazdratenko and 
squarely blames the governor 
for manipulating the case. 

He is, however, fighting 
back He has already collected 
20,000 signatures in protest 
against the sentence and says 
he will take tbe case to 
Moscow, to President Yeltsin. 

But among the crime, cor- 
ruption and violence, business 
grows. Mr Sergei Frank is the 
finance director of Fesco, a pri- 
vatised shipping line which 
operates a fleet of more than 
160 merchant ships. He over- 
sees a company which, he says, 
is “free of debt with the capac- 
ity to improve the quality of 
the fleet and the efficiency of 
our operations”. Its shares 
trade at {90. giving it a market 
capitalisation of {146m (com- 
pared with an implied valua- 
tion when first privatised of 
$i.4m), and he expects a net 
profit of around S90m this year. 

Some 15 per cent of his com- 
pany is now held by foreign 
investors, of which Credit Sui- 
sse First Boston (CSFB) and 
Citibank are the largest: 
CSFB’s research note on the 
company says its prospects are 
“inspiring*. 

Mr Frank will not be drawn 
too far into comments on the 
region's administration: by 
most accounts, Fesco has 
remained free of the “PAKT” 
network and of the organised 
crime groups. “The mafia is 
concerned with cash busi- 
nesses: we work with bank 
accounts. The administration. I 
would say. is neither very com- 
petent nor incompetent: we 
pay taxes, it doesn't interfere.” 

Mr Frank's cautious view 
that the administration allows 


business to develop is con- 
firmed by Mr Andrew Fox, a 
young British financier who 
came to the region two years 
ago. He has created two invest- 
ment funds, set up a company 
which trades on the stock 
exchange and is investing his 
own and his partners' money 
in local enterprises. 

“There are some extremely 
profitable companies here 
whose shares are increasing in 
value very rapidly indeed," he 
says, citing a huge cement 
plant whose output is greater 
than that of Australia's. 

Mr Fox acknowledges the 
pervasiveness of the mafia and 
of violence but, making the 
same point as Mr Frank, says 
he runs a cashless business 
and avoids trouble. “People tell 
me we could make a lot of 
money opening restaurants or 
laundries. We could, but then 
you're in the mafia territory." 

Mr Nazdratcnko's continued 
rule in the region may now be 
in doubt: the members of 
“PAKT”, bosses of the big local 
enterprises, are now mainly 
rich men though man; of their 
workers have no work and lit- 
tle wages and the organisation 
is riven with infighting. 

In the short term, however, 
disillusion with democracy, 
perhaps even encouraged by 
Mr Nazdratcnko's hold over 
the region, may further 
empower him. Last weekend 
an election to the Primorye 
parliament failed when not 
enough people turned out to 
vote. Only 20 deputies were 
elected to the 39-seat parlia- 
ment, six fewer than the quo- 
rum required. Now, Mr Nazdra- 
tenko will be able to run the 
region without a legislature 
until new parliamentary elec- 
tions, probably next year. 


Iberia tries to avert strikes as financial crisis grows 


By Tom Bums in Madrid 

Management of Iberia, die Spanish 
state-owned airline, meet unions 
today ami on Friday in a final effort 
to avert strikes planned for next 
month at the financially crippled 
flag-carrier. 

In the midst of the strike negotia- 
tions, Iberia is seeking to assure its 
future viability through a drastic 
cost-cutting programme and by 
injecting fresh public funds into the 
airline. Iberia wants to lower sala- 


ries by an average of 15 per cent 
over the next two years and the 
Madrid government is due to ask 
authorisation from the European 
Union for the provision of new capi- 
tal for Iberia totalling at least 
Ptal25hn (flbn). 

An Iberia spokesman said yester- 
day that unless agreement was 
obtained over tbe salary cats and 
the capital injection, the airline 
would be technically bankrupt by 


for strikes over a separate issue that 
is linked to Iberia's refusal to make 
up bade pay that is due at tbe end of 
thin month under the terms of a 
salary agreement dating back to 
August last year. 

Twenty-four hour strikes, which 
could ground the airline, are ini- 
tially scheduled for November 3 and 
11 . 

Iberia is on course to lose Pta44bn . 
thin year, up from faftiai estimates 


the spring of next year. r~ -. -of PtaSOhn. The salary reductions, 
Unions have nevertheless called along with additional measures. 


which include shedding 2,120 jobs 
from the company’s 24,466 labour 
force, seek to save Pta32J3bn. The 
back-pay agreement, which Iberia 
says it is no position to honour, 
represents an additional cost of 
Ptal7bn. 

In an effort to stem its losses, 
Iberia has renegotiated with Airbus, 
the European aircraft manufactur- 
ing consortium, the PtaiOSbn pur- 
chase of eight A-340 long-range air- 
craft which were due for delivery 
over the next three years. Under a 


recent agreement Iberia win lease 
four of tiie aircraft and will delay 
tiie acquisition of the other four. 

The airline is now negotiating the 
cancellation of a second contract, 
worth PtaSSbn, involving the acqui- 
sition of eight A-321 aircraft, a 
smaller, short-range Airbus. “We 
can't buy them because we can’t pay 
far them, it is as simple as that,” an 
Iberia spokesman said. 

Iberia says that phImb it has first 
managed radically to- overhaul its 
spending, the government will be 


unable to negotiate new funds for 
tiie air fine in Brussels. The com- 
pany was last recapitalised by INI, 
the public-sector holding company, 
in 1992 when Brussels authorised 
subsidies totalling Ptal20bn on con- 
dition that no more public money be 
made available to it until 1996- 
The company’s losses over the 
past four years, which have in part 
been linked to an ambitious airiine 
investment programme in Latin 
America, have effectively wiped out 
the 1992 capital injection. 



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FINANCIAL TIMES 


THURSDAY OCTOBER 27 19!M 


NEWS: WORLD TRADE 


Brussels reaches for a tougher trade weapon 


By Lionel Barber 
in Brussels 

The European Commission is 
poised to drop its inhibitions 
about using countervailing 
duties as part of a tougher 
approach to tackle illicit trade 
practices by third countries. 

The new policy steins from 
<maH but si gnifican t changes 
in European Union trade regu- 
lations which have been tacked 
on to rules to be adopted as 
part of the Uruguay Round, the 
General Agreement on Tariffs 
and Trade global trade accord. 


Jt also fits into a wider pat- 
tern of Europe slowly but 
steadily strengthening its trade 
weaponry', a process acceler- 
ated by the need to harmonise 
trade rules within the EU as a 
result of the single market and 
the Gatt agreement itself. 

Sir Leon Brittan, chief EU 
trade negotiator, outlined the 
changes last week in a speech 
to the toy manufacturers of 
Europe in which he claimed 
that Europe had been “too 
shy" in using countervailing 
duties to combat unfair trad- 
ers. 


“This is no longer the case 
and the Commission will react 
quickly to complaints lodged 
under the new countervailing 
regulation," he promised. 

In future, the Commission 
intends to adopt a US-style def- 
inition of subsidies which will 
focus on the "benefit" to the 
company concerned. Present 
European rules mean that the 
Commission assesses the "cost 
to the government" of provid- 
ing subsidies. Officials says 
this last definition is harder to 
calculate and usually leads to a 
lower valuation of damages. 


"We [the Europeans] were 
always hampered because the 
Americans had a tougher defi- 
nition of subsidies," a trade 
official said. 

However, other Brussels offi- 
cials acknowledged that the 
EU had rarely used counter- 
vailing duties for fear of pro- 
voking retaliation against 
Europe's heavily subsidised 
farm exports. The Uruguay 
Round agreement to cut export 
subsidies in agriculture meant 
Brussels would be less inhib- 
ited about using this line of 
attack. 


In similar vein, the Commis- 
sion intends to make it easier 
for individual companies to 
seek redress against unfair 
trade in goods, services, and 
intellectual property in mar- 
kets other than the EU. In the 
past, companies were asked to 
raise complaints through their 
umbrella industries. 

The Commission said the 
new measures were “abso- 
lutely categorically different” 
from the controversial Section 
301 trade weapon which the US 
has used to prise open mar- 
kets. 


It emphasised that the EU 
would resort to retaliation, 
only after exhausting the dis- 
putes procedures set out In the 
new World Trade Organisation. 
The WTO is due to come into 
force after the Gatt agreement 
is ratified, with the target date 
falling in December. 

As part of the Gatt deal 
reached last December, the EU 
agreed to strengthen trade 
weapons, allowing the Com- 
mission's preliminary deci- 
sions to use anti-damping or 
anti-subsidies to become defini- 
tive by a ample majority vote 


in the Council of Ministers. 
Previously, Commission action 
could be blocked by a minority 
of free-trade leaning countries, 
led by the UK and Germany. 

Also, minis ters made it 
harder for free-traders to block 
Commission use of safeguard 
measures against imports with 
which the EU has preferential 
trade arrangements. 

Blocking minorities are still 
required to invoke safeguard 
measures against countries 
with nan-preferential arrange- 
ments and in the area of tex- 
tiles. 


WORLD TRADE NEWS DIGEST 

Skoda unveils 
new family car 

Skoda, Czech subsidiary of Volkswagen, yesterday launched 
its first new car range since its takeover by the German 
carmaker in 1991. The Felicia small family car will replace the 
Favorit range, and conies as the Prague government appears 
close to allowing VW to take a majority 50.5 per cent stake in 
Skoda. The German company, which bought 31 per cent in 
1991 for DM620m ($413m), is set to take 70 per cent by the end 
of 1995 with the investment of a further DMTSOm. VWs abrupt 
move last year to more than halve Its overall investment plan 
for Skoda by the end of the decade to only DM3.7bn has soured 
relations with Prague. However, Czech fears about VWs com- 
mitment appear to have been calmed by pledges to continue 
developing a second car range for Skoda, to be launched in 
late 1996. 

Mr Detlev Schmidt. Skoda sales director, outlined ambitious 
plans yesterday for expanding the company’s worldwide sales 
and distribution network. Dealerships were raised from 1,523 
at the end of 1991 to 2,100 two years later and are due to reach 
2,500 this year and 4,000 by the end of the decade. The number 
of markets in which Skoda cars are sold will rise from 20 in 
1991 to 57 by the end of this year, and around 36 new ones are 
under study, it has opened up markets above all in Asia, the 
Middle East and South America. 

The Felicia, developed over the past three years as a 
far-reaching modernisation of the Favorit incorporating 1,600 
new parts, will be the first to be offered with VW engines in 
some versions. Kevin Done, Prague 

Asia-Pacific zone confidence 

Senator Bob McMullan, Australia's trade minister, yesterday 
brushed aside reports that China had rejected the idea of 
setting a binding timetable under which the Asia-Pacific 
region would move towards "free trade", saying he was “mod- 
erately optimistic" a deal could still be achieved- The proposal 
will be discussed at next month's summit of Asia-Pacific 
Economic Co-operation forum leaders in Jakarta. Mr McMul- 
lan believed there was a "reasonable prospect” China would 
back the proposal, after discussions between the leaders them- 
selves in Indonesia. The proposal, as currently mooted would 
require developed Apec countries, such as the US or Australia, 
to remove trade barriers more quickly than less developed 
ones, but would see all barriers across the 18-nation grouping 
eliminated by the year 2020. Nikki Tait, Sydney 

Contracts 

■ Alcatel-Alsthom's subsidiary Alcatel Networks Systems 
Malaysia has signed a FFrl40m ($28m) contract for a high-vol- 
ume date transmission network to the private Malaysian oper- 
ator Time Telekom. The equipment includes land and under- 
water fibre-optic cables almost 5,000km long. It is due to start 
service in January and be completed in the first half of 1996. 
AFX, Paris. 

■ Ipco Constructors, part of Ipco International, has won a 
S64m contract to build natural gas pipelines in Thailand - 
105km of 28in and 5km of 36in steel pipe. Renter, Singapore. 


Australia-NZ ‘open skies’ cloud over 


By NHdd Tait in Sydney 
and Terry Had in Wellington 

A row has broken oat between 
Canberra and Wellington over liberali- 
sing the countries’ aviation markets. 
The Australian authorities are refusing 
to let Air New Zealand start a domestic 
service within Australia nest month. 

Under a memorandum of understand- 
ing signed by the two in 1992, Air New 
Zealand was to have gained access to 
Australia's interna} market from 
November l. It would have become the 
third national carrier, competing with 
Qantas, the government-owned airline 
in which British Airways holds a 
minority stake, and Ansett, owned 
jointly by Mr Rupert Murdoch’s News 
Corporation and TNT. 

However, Canberra is claiming that 


all the memorandum's conditions have 
not been met It cites the lack of agree- 
ment on “passenger facilitation" 
arrangements - the idea was that New 
Zealand and Australia would become 
borderless and visa and customs checks 
would be redundant - and on airline 
ownership and control issues. 

The Australian authorities said they 
were not abandoning the proposed lib- 
eralisation in principle, bat “freezing" 
the situation for the present 

In the short term, the raw could 
make life easier for Qantas, which Is 
due to be privatised nest year. 

Mr Jim Bolger, New Zealand prime 
minis ter, said he was surprised at the 
way Australia's aviation minister had 
told New Zealand the agreement was 
being suspended. "He advised us by 
fax. That is not the way to do busi- 


ness," he said. “The decision doesn’t 
stack up." 

Mr Bolger said that Australia had 
pressed for an open aviation market 
between the two countries, and there 
were signed undertakings to ensure it 
was carried onL 

Opposition politicians in Australia 
also condemned the move, arguing that 
the government had “unilaterally torn 
up" the agreement and that such 
behaviour would have broader conse- 
quences far Australia in international 
negotiations. 

Senator Warwick Parer, the 
opposition’s aviation spokesman, 
said: “Opponents within Apec [the 
Asia-Pacific Economic Co-operation 
forum] now have a new weapon to use 
to take Australia out of the game, or, 
at best, damage our standing as a cred- 


itable negotiator and reliable signa- 
tory.” 

The dispute means the Australian 
government's much-vaunted commit- 
ment to “open skies" looks increas- 
ingly hollow. Deregulation of the 
domestic market has prompted only 
one new national carrier to take to the 
skies, and it quickly went out of busi- 
ness. 

On the international front, 
passenger choices have also became 
more limited as big US and European 
carriers have pulled out of Australia, 
and no new Australian airlines have 
emerged. 

In addition, BA and Qantas are seek- 
ing to “co-ordinate" services on the 
important UK-Anstralia routes, 
although this deal has yet to win Trade 
Practices Commission approval. 


Japan gets taste for food from abroad 

Imports have reached record levels, writes Michiyo Nakamoto in Tokyo 


Japan said yesterday it would 
set up a network of informa- 
tion centres to deal with an 
expected surge in consumer 
inquiries, and even complaints, 
about the safety of foreign 
foodstuffs as food imports 
reach record levels. 

Even before Japan finalises 
international trade agreements 
tike the General Agreement on 
Tariffs and Trade accord, food 
Imports are surging thanks to 
a strong yen, poor grain har- 
vests in 1993 and a draught 
this summer. 

Three years after Japanese 
farmers finally lost a fiercely 
fought campaign to keep the 
country's markets closed to 
foreign beef and oranges, a 
vast range of agricultural prod- 
ucts from Kansas steak to Aus- 
tralian carrots and Chinese 
garlic are entering the country 
in unprecedented quantities. 

This year, Japanese consum- 
ers’ taste for imported meat, 
fruit and vegetables has been 
particularly noteworthy. In the 
first six months, imports of 
beef rose 23 per cent, that of 
citrus fruit 25 per cent, and of 
vegetables 71 per cent from the 
previous year, according to 


Japan’s growing appetite for foreign food 


Nat imports and exports of agriaStirfal 
products by leading countries, 1091 

Imports, Rn 


Exports; $bn 



Agricultural and ttstwy 
product Imparts 

Sbn 

- 80 


Japan 


Germany Netherlands 


Former USSR 


Its ly 


France 


Australia 


Argentina 



Source: WO 

Japan's external trade organi- 
sation (ETO). 

The trend is such that Japan 
has now become the world's 
largest net importer of farm 
products, the agriculture min- 
istry proudly proclaims. In the 
first half of this year, food 
imports rose by 18 per cent in 
dollar terms to $22.<flm, says 
the ETO. Grain imports rose 
by 62 per cent and vegetable 
rose by 29 per cent 
Last year, agricultural 


Safiplast 


Invitation to offer to purchase the assets and the business called 
"Safiplast 11 , operating in the moulding sector mainly used in the 


i 

s 


automotive industry 

Safiplast SpA (emiroly owned by EnrChem SpAJ, with authorized 
and subscribed share capital of Lit. 13,324 million, registered 
with the Matera Court, Companies’ Registry no. 3188, intends to 
receive and evaluate offers on behalf of a sole party for the 
acquisition of the assets and the business called ‘Safiplast* with 
facilities in Somaglia Lodigiana (Milan], Spinetta Marengo 
(Alessandria! and Pisficci Scafo (Maters!, which operates in the 
designing and manufacturing of plastic parts predominantly used 
in the automotive industry and in other industrial sectors. 

The assets and the business to be sold achieved a total sales of 
approximately Lit. 50 billion in 1993. The total workforce was 121 
employees at December 31, 1993. 

For the purpose of this transaction Safiplast SpA has engaged 
the services of PASFIN Servizi Finanziari SpA CPASFIN"), to 
whom interested parties should direct all enquiries. The relevant 
persons at PASFIN can be contacted at The following address: 

PASFIN Servizi Fmonziari SpA 

Largo Richlni, G - 20122 Milan. Italy 

TeL +39.2.58374362 

Fax +39.2.58314308 

Mr. E- Morpurgo 

Mr. R. Magnoni 

Mr. A. Giacobbe 

The present announcement is directed to limited liability 
companies which should register their interest in writing to 
PASFIN no later than November 11, 1994, by letter or fax, and 
apply (or an Information memorandum specifically prepared for 
the sale. 

Safiplast SpA reserves the right, at its sole discretion and without 
assigning any reason, to refrain from providing the information 
memorandum to any interested party. The information 
memorandum will be sent after a confidentiality agreement has 


been validly signed by an officer or legal representative of the 
company and returned to PASRN no later than November 25, 
1994. 

Together with the confidentiality agreement. Interested parties 
must send a copy of their awn financial statements of the last 
three years, a description of its activities and of the industrial 
and economic rationale for rhe investment 
Brokers or agents of any kind must disclose the identity of the 
company they represent and also provide the aforesaid 
information on the company they represent 

This represents on invitation to offer but does not 
represent either a public offer ex art. 1336 of the Italian 
Civil Code. Neither this Invitation, nor the receipt of any 
offers by Safiplaat SpA win create, with respect to 
Safiplast SpA. any obligation or commitment to sell to 
any bidder and, with respect to any bidder, any right to 
demand any performance whatsoever by Safiplast SpA 
(including, without limitation, the payment of any 
brokerage or advisory fees or expenses!. Safiplast SpA 
also reserves the right to terminate at any time and 
without any reason or explanation whatsoever any and 
all discussions regarding the possible sale of the assets 
and the business called ‘Safiplast", with absolutely no 
liabtoty to any third party regardless of the status or 
stage of such discussions. 

Whilst every reasonable effort has been made to ensure that this 
announcement accurately reflects the Italian text of the 
announcement appearing in “II Sale 24 Ore* and other Italian 
newspapers, on November 27. 1994, In the event of any discrepancy 
the Italian text shall prevail. 

This advertisement and the sale procedure are subject to Italian 
law. In case of controversy related to the above, the Court of 
Milan (Italy) shall have sole jurisdiction. 


imports totalled Y32.lbn 
($331m) and fishery imports 
$l4,7bn, according to finance 
ministry statistics. The US is 
by far the single largest sup- 
plier, with nearly a 30 per cent 
share of agricultural sales. 

Consumer attitudes have 
changed considerably even 
since 1991 when the opening of 
Japan’s market to foreign 
oranges prompted scare stories 
about excessive spraying, and 
foreign beef was labelled cheap 
but of poor quality. 

The strong growth in 
imports has come despite 
veiled but persistent resistance 
among the Japanese authori- 
ties, whether prompted by 
vested interests or genuine 
concerns about retaining 
self-sufficiency in food. 

Japanese regulations 
demand that cherries, for 
example, have to be kept under 
10 degrees centigrade for 12 
days before they can be 
imported into the country. 

Officials sometimes find 
more virions ways to obstruct 
increases in agricultural 
imports. Daiei, a big supermar- 
ket chain, has had whole ship- 
ments ruined by customs offi- 


Sourcc J ^panamMtatefayc/Rrianoo 

cials spraying insecticide on 
the grounds that an Insect was 
seen wriggling under a lettuce 
leaf. Such sightings did not 
happen when the retailer 
imported in much smaller 
quantities than it does today 
and tend to occur particularly 
when it complains in public 
about the difficulties it faces 
with the authorities. 

“We are importing foreign 
produce increasingly as regu- 
lar supplies and not just to 
supplement what is available 
domestically" says Mr Minoru 
Tamara, divisional merchan- 
dise manager at Daiei 

The growing difficulty of 
retying on domestic suppliers 
alone has recently encouraged 
Japanese retailers to look 
abroad increasingly for even 
basic vegetables such as 
cucumbers and tomatoes. 

Climatic changes, for exam- 
ple, are having a tremendous 
impact on domestic supplies. 
This year. In particular, the 
unusually hot summer took its 
toll of domestic vegetable sup- 
plies, leading to shortages and 
a surge in the prices of certain 
products. 

But one-off natural aberra- 


tions aside, the structural 
changes facing Japanese agri- 
culture are making it impera- 
tive that retailers look outside 
the country for supplies. 

The number of farming 
households in Japan has dwin- 
dled from 6.1m in 1960 to 3.8m 
in 1990, according to the agri- 
culture ministry. Domestic pro- 
duction, it says, has shown no 
growth in recent years. 

What is more, half of those 
engaged in farming are already 
more than 60 years old and 
many of them will not find suc- 
cessors to take over what is 
more often than sot the family 
business. Last year, only 3,420 
out of more than 665,000 new 
school-leavers took up farming. 

The greying or Japan’s fam- 
ing community and the fewer 
number of hands available has 
also meant that, in the words 
of Daiei’s Mr Tamura: "Japa- 
nese farmers don't like to grow 
vegetables that are heavy, like 
cabbage, and those that 
require intensive labour, such 
as tomatoes and cucumbers.” 

The benefits of increased 
agricultural imports to Japa- 
nese consumers have been tre- 
mendous. The shortage of cer- 
tain vegetables as a result of 
tins year's unusual heat would 
have led to a surge in prices 
but "imported fresh vegetables 
helped stabilise the market," 
says the ETO. More long-term, 
opening the doors to imports is 
helping to bring Japanese food 
prices closer to international 
market levels. 

Mr Tamura expects more 
agricultural produce to be 
imported into Japan as mar- 
kets are liberated and sees 
China as a particularly promis- 
ing source. Self-sufficiency in 
basic food products is impor- 
tant, he says, “But that doesn’t 
change our policy of buying 
the best produce from the best 
source.” 


Microsoft begins search for 
Windows partner in China 


Microsoft has begun courting 
local partners to help design 
and launch the Chinese ver- 
sion of its next-generation 
Windows 95 software, Reuter 
reports from Beijing. 

The effort to cultivate ties 
with software developers, 
industry regulators and the 
trade press also aims to 
smooth feathers ruffled during 
the US software giant's bhmt- 
edged entry to China last year. 

While Windows has emerged 
as the de facto standard for 
four out of every five desktop 
machines worldwide, Beijing 


regulators have refused - 
often indignantly - to accept 
the Chinese version of 
Windows as a standard for 
China. 

Microsoft executives admit 
having alienated key electron- 
ics ministry officials by rely- 
ing heavily cm managers from 
arch-rival Taiwan who looked 
down on China’s less-devel- 
oped market and by develop- 
ing the mainland version, 
nicknamed P-Wln, not in 
China but in Taiwan, which 
uses a different form of Chi- 
nese characters and highly dis- 


simila r methods of keyboard 
entry. 

The company said a Chinese 
partner would be selected by 
the end of the year to assure 
that Windows 95 was available 
in China within six months of 
the US version. 

It also said that Chinese reg- 
ulators appeared to have 
dropped their Insistence on 
protecting the mainland mar- 
ket long enough to allow a 
home-grown platform to 
emerge, a tacit acceptance of 
Microsoft Windows as a de 
facto standard. 


Italian 
leads the 
field for 
WTO job 

By Frances WTOtams hi Geneva 

Mr Renato Ruggiero, the 
European Union candidate to 
head the future World Trade 
Organisation, is leading the 
three-man field "by a length”. 
according 1 to diplomats. 

Of the 90-odd countries so far 
consulted, about a third back 
him. A quarter favour Mr 
Carlos Salinas de Gortari. out- 
going Mexican president, with 
Mr Kim. Chul-su of South 
Korea not far behind. 

Support follows broadly 
regional lines. Mr Salinas has 
central and south America sol- 
idly behind him. with Wash- 
ington giving support behind 
the scenes. Mr Kim, South 
Korea’s trade minister, has 
most of Asia, including Japan 
and Australia. Mr Ruggiero, a 
former Italian trade minister, 
has western and eastern 
Europe, with a sprinkling of 
Mediterranean, African and 
Asian nations. 

The decision has to be made 



Mr Renato Ruggiero: ahead 
“by a length" 

by consensus of the 123 mem- 
bers of the General Agreement 
on Tariffs and Trade. If the 
three regional blocs hold firm 
to their candidates, therefore, a 
decision could be delayed 
beyond early December when 
Gatt members are due to meet 
formally to endorse the final 
choice. The WTO is due to 
come into effect on January 1. 

Following last week’s consul- 
tations, conducted by Mr 
Andris Szepest. Hungary’s 
Gatt ambassador, the political 
battle has shifted away from 
Geneva. The diplomatic artil- 
lery is being trained, first, on 
the remaining 30 or so Gatt 
members, mostly small devel- 
oping nations with no diplo- 
matic representation in 
Geneva. Many have strong 
trade and aid ties with Brus- 
sels through the European 
Union’s Lome Convention and 
are likely to bade Mr Ruggiero. 

Another line of attack 
involves securing the second 
preference votes of trailing 
candidates. Both the EU and 
the Salinas camp have hopes of 
picking up Asian backing, on 
the assumption that Mr Kim 
will drop out of the race first 

EU officials believe the 
Asians would rather support 
Mr Ruggiero th an Mr Safinas, 
who Is vulnerable to criticism 
that he is too close to the US 
and too "presidential” to run a 
technical organisation. 

However, trade officials 
expect Mexico and the US to 
launch a big diplomatic offen- 
sive at the November 14 sum- 
mit meeting of the Asia Pacific 
Economic Cooperation forum 
to win Apec endorsement for 
Mr Salinas. 

• The EU and 46 developing 
African, Caribbean and Pacific 
nations are to ask Gaft's gov- 
erning council for a waiver 
from fair trade rules for the 
Lom6 Convention when the 
council meets on November 10. 

The long-resisted decision to 
seek a waiver follows two Gatt 
dispute panel reports which 
have condemned as discrimina- 
tory EU banana import quotas 
designed to favour ACP coun- 
tries. A recent Gatt working 
party report on the fourth 
Lome Convention also revealed 
deep divisions in the world 
trade body over its Gatt com- 
patibility. 

Though Lome members 
ma in tain the convention is 
consistent with Gatt rules, 
they are clearly worried by the 
possibility of further chal- 
lenges to the banana regime 
under tougher WTO dispute 
settlement procedures. 


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FINANCIAL TIMES 


THURSDAY OCTOBER 27 1994 


i: THE AMERICAS 


* ft 


, -• M.W: 


1 *■■*?*. 



■' Cdjwr. 


US orders 
show 
modest 
increase 


By Jurok Martin 
in Washington 

BS durable goods orders rose 
by a modest 0.1 per cent in 
September compared with 
August, mostly because of big 
new contracts in the flrfotiw 
sector. The month saw a 2L7 
per cent increase in orders for 
military ships and tanks, more 
than twice the 10.8 per cent 
advance of the previous 
month. 

Last month’s increase in the 
overall index, according to the 
Commerce Department, is the 
second in a row, the seventh 
this year and the 12th in the 
last 14 months. New factory 
orders are 14 per cent above 
the level of the corr e sponding 
month last year, while the 
third quarter result produced 
a 1-5 per cent increase on the 
Aprfl-June period. 

The volatility in defence 
orders has produced large 
swings in durable goods 
orders in recent months. The 
August performance was yes- 
terday revised upwards to a 
6.4 per cent gain from 8.1 per 
cent, while in July orders 
dropped by 3^ per cent. 

Defence buying meant that 
the transportation component 
rose 2.1 per emit in September. 
Excluding this sector, the 
index dropped 0.6 per cent; 
after a 24S per cent rise in the 
previous month, with orders 
for industrial machinery and 
equipment falling by 2J> per 
cent 

New orders for non-defence 
capital goods, a more reliable 
indication of the state of man- 
ufacturing, rose 0J5 per cent in 
the month, following a 3.4 per 
cent increase in August. 

• The modest rise in durable 
goods orders was in keeping 
with the picture of continued 
robust economic growth, US 
analysts said yesterday, agen- 
cies add from New York and 
Washington. 

“There is still a lot of 
momentum in the economy, 1 * 
said economist Ms Cynthia 
Latta of DRtMcGraw Hill, an 
economic forecarting company 
in Lexington, Massachusetts. 


Kennedy pulls back from abyss 

Reports of senator’s political death could be premature, writes Jurek Martin 




US 

ELECTIONS 

November 8 


A jubilant Senator Edward Kennedy 
after his debate with Mitt Romney 


to his s upp orte rs 


Suddenly it 
seems that Mr 
Edward Kenn- 
edy. in his 32nd 
year as a US 
senator, can 
look forward to 
another six in 
Washington 
representing 
his native Mas- 
sachusetts. He 
emerged rela- 
tively unsca- 
thed from his 
first televised 
debate with Mr Mitt Romney, 
his Republican challenger, on 
Tuesday night. Simultaneously 
two local polls gave him leads 
of 12 and IS points, a vast 
improvement on last month 
when his edge had all but 
evaporated. 

The prospect of liberal Mas- 
sachusetts voting against one 
of the great liberals in the Sen- 
ate had been unthinkable. The 
gtafe and the Kennedy namp 
have been indivisible for gener- 
ations, with his bold on office 
not even seriously threatened 
by the 1969 tragedy of Chappa- 
quiddick when he drove a car 
off a bridge and a young 
woman companion drowned. 

Yet, however improbably, he 
had appeared to be in trouble 
as the Republicans went after 
the three great liberal scalps 
they would love to remove 
from office - Mr Kennedy, 
Governor Mario Cuomo of New 
York, and, in the state of 
Washington, Mr Tom Foley, 
Speaker of the Ho u se 

The senator’s particular vul- 


nerability stems partly from 
his political longevity in a year 
when incumbency is a dirty 
word and, partly, because, at 
SI and overweight, his image 
as a tired and ageing satyr 
looked as if it were catching up 
with him. Mr Romney cer- 
tainly offered a contrasting 
candidacy. He is the whole- 
some 47-year-old venture capi- 
talist son of Mr George Rom- 
ney, former governor of 
Michigan who was well in the 
running for the 1968 Republi- 
can presidential nomination 
before he confessed to having 
been ‘'brainwashed" into sup- 
porting the Vietnam war. 

Though a political neophyte. 
Mr Romney’s policy prescrip- 
tions - more business and less 
government - challenged Mr 
Kenne dy’s belief in the efficacy 
of government. Conservative 
positions have, after all, taken 
root even in Massachusetts, 
with Governor Bill Weld, the 
Republican, not only popular 
but virtually cer tain of re-elec- 
tion next month. 

Thus, barely two weeks ago, 
the columnists had begun to 
foresee Mr Kennedy’s demise. 
From the right, Mr George Will 
gleefully proclaimed: “Massa- 
chusetts may be the Jurassic 
Park of American politics 
where the dinosaur of liberal- 
ism lumbers on oblivious to 
the fact that its era has long 
srnrg past But the Tyranno- 
saurus Rex is endangered." 

From the left, Ms Ellen 
Goodman found “a whiff of 
defeat in flip fall air" in a race 
“that locks more and more like 


a beauty contest”. She quoted 
a sad Kennedy supporter say- 
ing “be looks like a homeless 

man ip a thousand Hollar suit". 

What has happened is that 
Mr Kennedy has begun to fight 
- and with plenty of assistance 
from outside the state. Presi- 
dent Bill Clinton, whose rat- 
ings in M.qgsachnspflfl are the 
highest in the nation, has 
already campaigned with the 
senator once and plans to do so 
again. The Kennedy be knew, 
Mr Clinton said, was not some 
liberal ideologue but more 
capable than any Democrat in 
the Senate of persuading 
Republicans to come out of the 
bunker of eternal resistance. 

Mr Kennedy was certainly 
combative in a sharp and often 
rancorous debate on Tuesday 
night. When his opponent 
accused him of making profits 
on a Washington real estate 
deal “at the taxpayers' 
expense", Mr Kennedy shot 
back, invoking the tragedies 
that have visited his family. 
“Mr Romney, the Kennedys are 
-not in public service to make 
money. Wc have paid too high 
a price." 

Mr Romney gave as good as 
he got. When Mr Kennedy 
charged he bad refused health- 
care to part-time employees, 
the Republican said the Kenn- 
edy family had done the same 
at one of Us businesses. 

The post-debate scorecards 
mostly pointed to a draw, but, 
as one Boston political seer put 
it “If Kennedy didn't lose, he 
won, and if Romney didn’t win, 
he lost” 


Cuba reforms extend to consumer goods 


By Pascal Fletcher In Havana 

Cuba’s hard-pressed consumers, still 
digesting the novelty of farm produce 
markets opened on October 1, received 
a further dose of free market economic 
reform yesterday when the government 
authorised a similar system to sell 
scarce manufactured and consumer 
goods. 

Individuals and Local state industries 
wifi now be able to sell goods directly to 
the public with traders, not the state, 
setting prices. A government decree 
said the goods would be offered through 
a network of shops, street markets and 


other anthnri»»ri public vending points. 

“People win be able to sell absolutely 
everything;” a rmmnmtatnr on state- 
run Radio Rebelde said. He gave as 
tramples furniture, mattresses, house- 
hold articles such as brooms win- 
dow blinds, spare plumbing parts and 
clothes. 

As with the farm markets, vendors 
wiQ have to pay a tax on sales. 

The markets selling manufactured 
amj consumer goods — which, WV<» the 
form markets, will o pe r at e in Cuban 
pesos - jnrfi/wte a further easing of the 
state’s grip on economic production. 
They will also create more opportuni- 


ties for self-employed private manufac- 
turers and crafts people. These were 
authorised to operate on a limited scale 
late last year and had started selling 
their wares at a small number of street 
market sites, which are expected rap- 
idly to increase in number. 

Chronic shortages of even the most 
basic consumer articles have been a 
headache far Cubans for years. Prob- 
lems worsened after 1990 when local 
manufac turing was hit by the collapse 
of Cuba’s preferential trade relations 
with the former Soviet bloc. The con- 
tinuing US trade and financial embargo 
applied an additional squeeze. 


Cubans turned to the black market, 
where an army of clandestine seam- 
stresses, tailors, plumbers and mechan- 
ics sprung up. 

The form produce markets have been 
well received by Cubans. Not only have 
shoppers been able to stock up with 
food staples, but prices are well below 
those in the blade market 
Authorities say the farm markets are 
easing food shortages and have djalt a 
blow to the black market But they add 
it will be six months or more before 
they will be able to assess whether the 
markets have stimulated food produc- 
tion, particularly by small formers. 


AMERICAN NEWS DIGEST 


ID card warning 
for California 


All Californians would have to carry identification cards to 
prove their citizenship if voters pass a proposition to cut 
services to illegal immigrants. Governor Pete Wilson says. In 
an interview with the San Francisco Chronicle yesterday, Mr 
Wilson rejected the idea that people bom in the US might 
resent having to carry an ED card. “If you are a legal resident 
you have absolutely nothing to fear." Mr Wilson told the 
newspaper. “It has nothing whatsoever to do with eye or skin 
colour. You are reasonably suspect if you cannot provide 
documentation that you are in the country legally/' 

The card is not part of Proposition 1S7, a measure on the 
November s ballot that would deny illegal immigrants in the 
state public schooling and most health and welfare benefits. 
However, Mr Wilson said he believed it would be needed to 
enforce Proposition 157 if the measure were approved by 
voters. 

Mr Wilson, who has emphasised Proposition 1S7 would not 
affect emergency healthcare, has made support for the 
proposition a plank in his re-election platform. His Democratic 
opponent. Ms Kathleen Brown, opposes it. 

Mexico has protested over the proposition, saying its 
implementation would damage US-Mexican relations .IP. Sen: 
Francisco 

US emergencies turned away 

Some US hospitals are still refusing to treat emergency 
patients unable to pay for medical care, despite a federal but 
forbidding the practice of “patient dumping". A consumer 
group. Public Citizen's Health Research Group, reported 
yesterday that S6 hospitals in 22 states were cited by the 
federal government for refusing to treat emergency patients 
for non-medical reasons during 1993 and the first quarter of 
1994- 

Ms Joan Stieber. co-author of the report and n lawyer with 
the health research group, said the organisation believed 
many incidents of patient dumping went unreported and that 
no state or region was exempt. Under a law passed in 1958, 
hospitals are forbidden to deny for non-medical reasons 
treatment to any emergency patient or woman in labour. 
“Enforcement is only touching the tiniest tip of the iceberg." 
said Ms Stieber. “On the whole, we think this is a pretty 
consistent problem across the country.” AP, Washington 

Canadian inflation to stay low 

Canada’s economic growth appears to be continuing at a 
vigorous pace, but the underlying rate of inflation is expected 
to remain low, the Bank of Parad* said in its autumn review. 

“Economic activity expanded at more than 5 per cent in the 
first half of the year, and the economy appears to be 
continuing to grow at a vigorous pace." the bank said. "It is 
estimated that in spite of the rise in capacity utilisation, the 
economy has roam to expand at a growth rate above potential 
for some time.” 

The underlying rate of inflation had remained in the lower 
part of the Inflation-control target band” and was expected to 
remain there, the bank added. Excluding indirect taxes and 
movements in the food and energy components, the 12-month 
inflation rate had remained at about 1.7 per cent, the bank 
said, using data to September 23. Economic activity expanded 
at an annualised rate or 6.4 per cent in the second quarter. 
“Over the balance of the year, output should grow at a solid, 
although somewhat slower, pace.” Reuter. Ottawa 


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financial tuvtes Thursday October 27 iw 



NEWS: INTERNATIONAL 


INTERNATIONAL NEWS DIGEST 

N Korean army 
faces changeover 

The arrival in France for medical treatment of Marshal Oh 
Jln-U, North Korea's defence minister, may provide an oppor- 
tunity for Mr Kim Jong-il, the country's new leader, to assert 
his authority over the military and curb its possible opposition 
to his rule. It is believed that the visit of Marshal Oh, 77, who 
ranks second in the North Korean hierarchy behind Mr Kim, 
indicates his condition has become serious. He is the chief 
representative of the conservative old guard that created 
North Korea in the late 1940s. 

The North Korean defence ministry, in a rare show of 
independence last month, publicly rejected a US demand for 
special inspections of suspected nuclear facilities, which 
Pyongyang subsequently accepted as part of the accord signed 
last week. 

Marshal Oh would normally be replaced by General Choe 
Gwang, chief of the general staff. But Gen Choe is believed to 
be an opponent of the recent US-North Korean agreement to 
settle the dispute over Pyongyang's nuclear programme. Ana- 
lysts believe Mr Kim may appoint General Oh Guk-ryol as 
head of the military. Gen Oh, seen as Mr Kim's chief military 
supporter, advocates a more professional military by reducing 
the role of political officers. John Burton, Seoul 

Builder plans to replace bridge 

Dong-Ah Construction, the builder of the Seoul bridge that 
collapsed last Friday, plans to construct a replacement at its 
own expense. The offer of a new bridge, which will cost $190m 
(£U7m), is meant as a public apology for the accident that 
killed 32 persons, according to Mr Choi Won-suk, chairman of 
Dong-ab, South Korea's third biggest construction company. 
Dong-ah, which had a net profit of Won20bn (£15.4xn) on sales 
of Wonl,531bn in 1993, also plans to donate WonlObn to Seoul 
to maintain existing bridges in the city. John Burton, Seoul 

S Africa election reforms urged 

The Independent Electoral Commission, which managed South 
Africa's national and regional poll last April, has recom- 
mended to the government it urgently implement a set of 
electoral reforms. The move comes amid tiring concern that 
SOuth Africa's forthcoming local elections may have to be 
postponed because of logistical difficulties. In a formal report 
released yesterday the IEC admits that poor organisation and 
planning had forced it to jettison many of its safeguards 
against possible voter fraud and ultimately included large 
numbers of votes not properly verified in its final results. 
Mark Suzman, Cape Town 

Australian inflation at 1.9% 

Australia's consumer price index rose 0.6 per cent in the 
September quarter, bringing the annualised inflation rate to 
1.9 per cent The figure represented little change from the | 
previous quarter when the CPI rose 0.7 per cent, and the 
annualised rate stood at 1.7 per cent. It was also in line with 
market expectations, although some nervousness was gener- 
ated earlier in the week when the Reserve Bank of Australia 
increased interest rates by one percentage point. The move 
was interpreted as a pre-emptive strike designed to keep 
inflation under control 

Despite the reassuring figures, bond prices weakened yester- 
day. with some analysts suggesting the inflation figures may 
now deteriorate. They noted that the severe drought gripping 
east coast farm areas has so far been largely deflationary as 
fanners “de-stock", but could have inflationary consequences 
as produce supply tightens. Nik/d Tbit, Sydney 


Chinese airlines struck by bruising 


By Tory Walker in BeEJing 

Chinese airlines are recording 
heavy and unprecedented 
losses in the face of stiff com- 
petition from foreign carriers 
and the effects of a sharp rise 
in operating costs. 

The Economic Information 
Daily newspaper reported yes- 
terday that China’s airlines 
were in a “deep valley” with 
six out of the country's nine 
main carriers reporting losses 
in the first eight months of the 
year. 

The slide in Chinese airline 
fortunes risks slowing antici- 


pated surging demand for new 
aircraft, with Boeing and Air- 
bus having geared up to supply 
hundreds of aircraft over the 
next 15 years. 

Economic Information Daily 
quoted aviation officials as 
calling for stricter controls to 
be placed on new aeroplanes 
and new airlines, china had 
approved some 28 airlines by 
early this year, but has 
instituted a freeze foll- 
owing a series of crashes in 
1993. 

The newspaper said that in 
the fir st quarter Chinese air- 
lines operating domestic and 


international services from 
Beijing airport carried just 35 
per cent of passengers. An 
increasing proportion of Chi- 
nese preferred foreign carriers 
to local airlines. 

Chinese airlines suffered a 
serious drop in traffic on the 
lucrative Hong Kong route 
with load factors plummeting 
10 percentage points to 60 per 
cent in the first quarter com- 
pared with last year's averaga. 
Cbina's competitors were fly- 
ing near to capacity. 

“A historical change 
occurred in China's aviation 
market late in 1993 when a sell- 


er’s market that had lasted for 
two decades turned into a buy- 
er’s market” Economic Infor- 
mation Daily reported. 

China's airlines reported 20 
per cent increases in passenger 
traffic in the past two years, 
and this rate of growth was 
expected to continue for the 
next four years, slowing to 15 
per cent towards the end of the 
century. 

The newspaper blamed the 
unification at the beginning of 
the year of China's exchange 
rate resulting in an effective 50 
per cent devaluation of the 
yuan for some of the airlines’ 


woes. The devaluation added 
dramatically to costs, includ- 
ing leasing and fuel which rose 
by 25 per cent this year. Other 
factors included a credit 
squeeze instituted in mid-1993 
and aimed at slowing an over- 
heating economy. 

The paper also blamed the 
poor safety record of Chinese 
qjriiTies for the fall-off in pas- 
senger numbers. China experi- 
enced at least four serious air 
crashes in 1993 in what proved 
a disastrous year for Chinese 
aviation. 

Aerospace companies, which 
have made heady forecasts of 


losses 


demand, may now be obliged 
to revise their estimates. Boe- 
ing had predicted China would 
purchase some 800 aircraft at a 
cost of frWbn (£2S.abn) by the 
year 2010. while Airbus had 
estimated a more conservative 
630 aircraft- 

A slowdown may also affect 
foreign airlines’ plans to 
become involved in joint ven- 
tures in China. The world's big 
carriers have been scouring 
China for opportunities since 
Beijing announced early this 
year that it was opening its 
aviation sector to foreign par- 
ticipation. 



Sri Lanka’s prime minister, Mrs Chandrika Kumara tonga, (left) offers condolences to Mrs Sirima 
Dissanayake, widow of murdered presidential candidate Garni ni Dissanayake. The two women will 
contest the presidential election on November 9. rwmt 


Asian economic growth 
forecast at 7.3% in 1995 


By Jose Galang in Manila 

Asia will continue to outpace 
global economic growth next 
year, even though Its projected 
expansion in gross domestic 
product of 7.3 per cunt will he 
slightly lower than this year’s 
7 A per cent, according to latest 
estimates by economists at the 
Asian Development Bank. 

China is forecast to record a 
9 per cent growth rate, down 
from 1L5 per cent this year. 
That figure is topped only by 
Vietnam's 9.6 per cent expected 
growth. 

Collectively, the region’s 
newly industrialising econo- 
mies (Hong Kong. South Korea, 
Singapore and Taiwan) are 
expected to turn in a slower 


growth of 6A per cent, from 
this year’s 7.1 per cent. 

The developing economies of 
South-East Asia (Indonesia. 
Malaysia, the Philippines. 
Thailand and Vietnam) are 
forecast to advance by a higher 
average rate of 7.7 per cent 
from this year's 7.3 per cent, 
according to the ADB. 

Mr Malcolm Dowling, assis- 
tant chief economist at the 
Manila-based ADB, attributes 
the continued expansion 
mainly to “the modest recov- 
ery” in global production that 
will push up overall demand. 

Mr Dowling presented these 
forecasts at the opening yester- 
day of a three-day ADB work- 
shop on Asia's economic out- 
look. Representatives from the 


World Rank and the Interna- 
tional Monetary Fund also 
presented studies pointing to a 
“broadening” and “accelera- 
tion" of the nascent recovery 
in Industrial economies. 

Economists from the three 
institutions said the current 
turbulence in world financial 
markets will not jeopardise the 
continuing growth in Asian 
economies. Mr Dowling cited 
particularly the Asian econo- 
mies' strong savings and 
investment rates that have 
been instrumental in achieving 
steady growth records. 

The ADS study also noted 
the “phenomenal" rate of net 
resource flows (including grant 
aid) to the developing coun- 
tries of the region. 


Thai business chief named as foreign 

William Barnes reports on fears of conflict of interest 


Thailand's new foreign minister, 
whose appointment was confirmed 
yesterday as part of a cabinet over- 
haul, is an unelected businessman 
whose corporate involvements are 
prompting criticism that he Is 
vulnerable to conflicts of 
interest 

Mr Thaksin Shinawatra, aged 45, is 
one of the country's wealthiest and 
most dynamic businessmen. His tele- 
communications empire has thrived 
on his ability to win government con- 
tracts and franchises, and is expand- 
ing rapidly in Thailand and the 
region. 

He has been appointed because Mr 


Ghamlong Srinmang, founder of the 
Palang Dharma (Buddhist force) 
party, has risked seeing his political 
creation break apart by replacing all 
of his party's 11 ministers in an 
attempt to boost its popularity. The 
five coalition parties are permitted to 
fill their cabinet allocations largely as 
they see fit. 

Mr Vichit Surapongchai, former 
president of Bangkok Bank, picks up 
the important transport and commu- 
nications portfolio; this has caused 
less comment because he is seen as a 


professional business manager 
brought in to deal with a specialist 
field. 

Mr Chamlong himself takes up for- 
mal political office - as a deputy 
prime minister - for the first time 
since he was swept into power as a 
corruption-fighting governor of Bang- 
kok in the 1 380s. 

There are fears Mr Chuan Leekpai, 
prime minister, will have to use all 
his diplomatic skills to prevent the 
unpredictable Mr Chamlong driving 
the five-party coalition Into crisis as 


he tries to score political points over 
this government's final two years of 
its term. 

Mr Thaksin has resigned as chair- 
man of his Shinawatra group in 
favour of his wife. But each retains 25 
per cent of the holding 
company, Shinawatra Computer & 
Communications, which has a 
market capitalisation of $4.2bn 
(£240m). 

“If we interpret the constitution by 
the letter of the law. he is OR. But the 
spirit of the law is that you don't 


minister 

want a person to hold high position in 
order to benefit from it This is a 
problem that could explode at any 
time," said Prof Likhit Dhiravegindra 
of Thammasat University's political 
science faculty. 

Mr Thaksin's predecessor as foreign 
minister, the former intelligence chief 
Mr Prasong Soonsiri, is furious and 
vengeful after being dumped by his 
party leader for a fresh face. 

Diplomats, however, say that Mr 
Prasong foreign policy was often 
obscure if not muddled, and argue 
that Mr Thaksin has an opportunity 
to sharpen up Thailand's handling of 
foreign affairs. 




A 


Singapore 

suits golf amateurs 

to a tee. 


Airlines 

By Shiraz Sidhva in New Delhi 

Eleven airlines yesterday 
announced resumed flights to 
India after the World Health 
Organisation declared most of 
the country plague-free. 

Air India, the international 
carrier, has been allowed to 
resume its services to Dubai 
and Doha, while Emirates 
(Dubai's airline). Gulf Air and 
Kuwait Airways have also 
resumed their Indian services 
after nearly a month. 

But Abu Dhabi, Sharjah and 
other members of the United 
Arab Emirates, as well as 
Pakistan, Bangladesh and 
some Russian and central 
Asian countries, have yet to 


resume flights to India 


lift the ban on flights. 

The Indian government 
expressed relief when a team 
of WHO experts indicated no 
evidence existed that plague 
had been transmitted in Bom- 
bay, Calcutta. Madras or Delhi, 
and these cities could be con- 
sidered plague-free. But the UN 
organisation has recommended 
continued precautions while 
travelling to Surat in Gujarat 
and Beed in Maharashtra. 

The government has con- 
finned only 55 plague deaths, 
but health organisations hope 
authorities will beed it as a 
warning to improve India's 
inadequate health system. 

Worst hit by the plague 
panic are exports of fresh food. 


Officials admit that exports of 
perishables have fallen 
sharply, though no figures are 
yet available. India depends on 
the Gulf countries for 70 per 
cent of its exports of fruit, veg- 
etables, meat, and seafood, 
which last year totalled Sl77m 
(£118m), and were expected to 
reach 8200m this year. One 
estimate calculates the ban by 
Gulf countries has cost India 
more $6m a day. 

Last year, trade between the 
Golf states and India exceeded 
$3bn. including $2bn-worth of 
Indian exports. “We have lost 
over a month of business due 
to the plague scare," says Mr 
Bilal Lone, who Imports non- 
ferrous metal scrap from the 


Gulf to India. 

The Indian Commerce minis- 
try is optimistic that trade 
with the Middle East will 
return to normal with the 
restored air and sea links. “The 
specific impact of the plague 
scare on trade will be dear 
when the figures for October 
are released next month." a 
ministry official said. 

Travel experts estimate can- 
cellations of up to 40 per cent 
of tourism arrivals this year, 
the plague scare having coin- 
cided with the peak tourist sea- 
son. “India's plans to increase 
tourism arrivals from 1.82m in 
1993 to 5m by the year 2000 
have been badly hit," a tour- 
ism ministry official said. 


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NEWS: INTERNATIONAL 


Clinton aims to ease 
Israel-Syria deadlock 


Mark Nicholson in Cairo 
President Bill Clinton’s brief 

visit today to Damascus, only 
the second undertaken by a US 
leader m 20 years, is rich in 
symbohsm. But, as be stressed 
yesterday, it nay prove light 
on substantive moves to 
resolve enduring differences 
between Israel, s eeking a f np 
peace with its neighbour, and 
Syria, which wants a full 
return of the Israeli-occupied 
Golan Heights in exnhangp 

“1 expect we will m«kp .wm 
progress to narrow the gap” 
Mr Clinton said of today’s fe»ik« 
with President Hafez al-Assad, 
Syria's leader. “But I do not 
expect it to produce a dramatic 
breakthrough.” 

Expectations for Mr Clin- 
ton’s visit are running high m 
Damascus. “There’s a popular 
feeling here that this could 
unjam things. The average Syr- 
ian seems to believe this trip is 
about the most significant 
thing that could happen just 
now," a western diplomat in 
Damascus said. 

Diplomats say the Syrians 
hope Mr Clinton may come 
bearing some Israeli conces- 
sion on. the Golan, or may 
grant Mr Assad a long-sought 
bilateral concession, such as 


casing Syria from the list of 
states viewed in W ashingt on as 
sponsors erf terrorism. 

Mr Clinton hac indicated nei- 
ther is likely. “Terrorism is 
s£QI an issue between our two 
countries,” he said yesterday. 
“But the most successful way 
to end terrorism in this part of 
the world is to have a compre- 
hensive peace". IBs implicit 
message in visiting Mr Assad 
seems to be that such prizes as 
removal from the terrorist list 
and further improvements in 
DS-Syrian relations can come, 
but only once the peace with 
Israel is sealed. 

Mr Clinton's arrival in 
Damascus, a late addition to a 
regional swing built around 
yesterday’s Jordan-Israel peace 
ceremony, win be received in 
Syria as the greatest possible 
acknowledgment of Mr Assad’s 
regional stature and Syria’s 
importance to any lasting 
peace. “The symbolism of that 
cannot but help, even if it will 
not on its own produce the 
goods,” a diplomat said. 

The trip will also wn rigrihw 
what the tireless Middle East 
shuttling ctf Mr Warren Chris- 
topher, US secretary of state, 
has made plain: that the US 
win act as guarantor for any 
Syrian deal with Israel. Damns- 


US rivals clash 
over telecoms 
deal with PLO 


By Route Khatef 

Two US telecommunications 
giants both claimed this week 
they had clinched exclusive 
agreements with Palestinian 
officials to provide phone ser- 
vices in the West Bank and 
Gaza Strip, in a sign of disar- 
ray within Mr Yassir Arafat’s 
Palestine Liberation Organisa- 
tion, which has taken over 
administration of the areas. 

MCI said it bad signed a con- 
tractual agreement with 
Pa telco, a -private company 
implementing an exclusive 25- 
year telecommunications con- 
cession for the Gaza Strip and 
the West Bank, to provide 
international telephone net- 
work capacity. 

Mr Lawrence Kodacovi, 
senior vice-president of MCI, 
said Bezek, the Israeli telecom- 
munications company, had 
transferred the telecoms net- 
work to Patelco in a ceremony 
on Tuesday attended by Mr 
Arafat 

But Palestinian officials 
based in Tunis said Mr Arafat 
was to announce an AT&T deal 
to develop a telecommunica- 
tions nework in the same area, 
in an agreement timed to coin- 
cide with the visit of President 
Clinton to the region. 

Both American companies 
are insistent their agreements 
will give them exclusive rights 
to the Palestinian telecoms 
market. 

Patelco would run and oper- 
ate the telecommunications 
system in all Palestinian areas, 
Mr Kodacovi said, and MCI 
would provide the network 
capacity to irnk the Palestinian 
areas with the rest of the 
world. 

The agreements were negoti- 
ated without public bidding or 
monitoring by international 
consultants. 

The confusion between the 
rival accords reflects a scram- 
ble for contracts among senior 
PLO officials, and underlines 
concerns voiced by the US and 
international donors about the 
need for more transparency in 
awarding commercial con- 
tracts. 

The principal shareholder In 
Patelco is International Tech- 
nologies Integration, a small 
American telecom consultancy 
owned by a Lebanese engineer, 
which has- Joint ventures with 
MCI in Lebanon, Syria and 
Kuwait 

According to a contract seen 
by the Financial Tunes, TO last 
October won a 25-year conces- 
sion signed by Mr Arafat exclu- 
sively to build, operate and 
exploit the domestic and inter- 
national communications net- 
work in the West Bank and 
Gaza. 

But a rival group of PLO offi- 
cials based in Tunis said they 
had signed an agreement with 
AT&T Network Systems Inter- 
national, a subsidiary of AT&T 
based in the Netherlands, to 
“help develop and modernise 
the telecom network in the ter- 
ritories" under control of the 
Palestinian Authority. 

Mr Maher El Kurd. a senior 
PLO official in the office of Mr 
Parmik gaMnumi, chairman of 
Pecdar, the Palestinian institu- 
tion charged with monitoring 
and plannin g public-sector 
investments, said the AT&T 
agreement “will lead to an 
arrangement under which 
AT&T will bufld, operate and 
transfer a complete network to 


the Palestinian Authority to 
support 225,000 subscribers”. 

Mr Cees Stejjger. head of cor- 
porate communications at 
AT&T Network Systems, said 
the “co-operation agreement” 
would lead to a contract and 
AT&T and the Palestinian 
Authority would work together 
to set up feasibility plans to 
develop file project 

AT&T is now reviewing fin- 
ancing options requiring sev- 
eral hundred millions of dol- 
lars. . 

According to Mr Steqger, 
AT&T’s agreement will indude 
operating the international 
network, which is what MCI 
says its own agreement with 
Patelco stipulates. 

A senior western diplomat 
said Mr Ron Brown, US com- 
merce secretary, bad written to 
Mr Arafat expressing his con- 
cern over the award of the tele- 
cams contract, and asking Mr 
Arafat to institute a process of 
open public bidding. 


The confusion 
between the rival 
accords reflects 
the scramble for 
contracts 


The rival agreement by 
AT&T raises the stakes in the 
battle over the telecoms con- 
tract and will fuel further con- 
troversy. 

m says the contract it has, 
and the agreement with MCI, 
are irreversible; it had started 
on implementation of a multi- 
year expansion plan worth 
$l40m with more than S30m of 
improvements in the first year 
alone. 

Mr Pierre Rizk, a Paris- 
based businessman who has 
been a key negotiator of the 
ITI deal, insisted this week 
that the rivalry between the 
two US companies was now 
over and that the inter- 
national telephone business 
would go exclusively to 
MCL 

Mr Riak ttonjgff any financial 
interest in any of the compa- 
nies involved. 

Mr Rizk said the transfer 
from Bezek to Patelco meant 
that last October’s 25-year con- 
cession to ITI “was legally 
binding , on Israel, the Palestin- 
ian Authority and all the' tele- 
communications companies 
worldwide”. 

Patelco b«d now bought the 
transmission equipment, exist- 
ing switches, cables, carriers 
and network remodes from 
B fwk Bezek refused to com- 
ment 

Mr Rizk confirmed there had 
been US pressure on the Pales- 
tinian Authority about the 
award of the contract but said 
it was a private business mat- 
ter which should not concern 
Washington as the deal 
involved no foreign aid. 

AT&T’s Mr Stetiger said he 
was surprised by MCI’s 
ann o unceme nt this week. “1 
don’t know what to make of 
It," he said. 

“But the US government pol- 
icy as given to us for American 
comp anies doing business in 
the Palestinian territories lays 
down two princi p les: account- 
ability and transparency, and 
the vehicle -for implementing 
these two principles is Pecdar'" 


cus, ever wary of negotiating 
alone and directly with Jerusa- 
lem, has always needed this 
assurance, adding to it 
repeated demands that Wash- 
ington lean more heavily an its 
Israeli ally. “The US 
should-take stands that put 
more pressure on Israel to 
push the peace process,” Mr 
Farouk al-Sharaa, Syria's for- 
eign minister, said recently. 

Mr Clinton’s trip will affect 
the atmosphere surrounding 
the Syrian-Israeli talks, the 
real progress of which both 
sides, aided by the supremely 
tight-lipped Mr Christopher, 
have kept under wraps. It 
comes flinid ground-breaking 
gestures from Syria suggesting 
the climate for these talks is 
warming. Mr al-Sharaa 
recently gave an unprece- 
dented interview to Israeli tele- 
vision. He also met US Jewish 
leaders during a recent US trip. 

The most tangible result of 
Mr Clinton’s visit, diplomats 
say, could be for him to 
express Syria’s ultimate will- 
ingness to embrace a full peace 
with Israel, and what that 
peace would entail, more 
explicitly than Mr Assad is so 
lar prepared to do publicly. 
Possibly, Mr Httntrm may be 
able to announce plans for 



Assad: regional stature 


eventual direct falks between 
Mr al-Sharaa anti Mr Shimon 
Poes, his Israeli counterpart, a 
direct encounter long sought 
by the Israelis. 

Otherwise, the substance of 
Israeh-Syrian negotiations will 
continue under US auspices 
and through further US shut- 
tles in and out of Damascus. 
Egyptian officials and some 
diplomats in the region believe 
these talks may be only 
months away from a basic 
agreed deaL Egypt's President 
Hosni Mubarak has spoken of a 
deal by Christmas. 

If so, then Mr Assad and 
Israel’s Premier Yitzhak Rabin 
may be awaiting the most pro- 
pitious timing to make the 
political moves to ftiterh agree- 
ment Mr Assad's desire for a 
“durable, comprehensive 
peace” makes it unlikely he 
would commit himself to a deal 
with Israel if that with tbs Pal- 
estinians looked to be failing 


PLO-Hamas strikers revile 
peace treaty with Jordan 

Protests greet Hussein’s special role, Julian Ozanne reports 


T he Palestinian strikes and rallies 
held across the Israeli-occupied 
West Bank and in Arab East Jeru- 
salem yesterday were in protest at the 
Israel-Jordan peace treaty, which recog- 
nises Jordan’s historic custodial role over 
Islamic sites in Jerusalem. 

In a rare display of Palestinian pdliticaZ 
unity, Mr Yassir Arafat's Palestine Libera- 
tion Organisation called a strike jointly 
with the Islamic resistance movement 
Hamas, closing schools and businesses to 
moum yesterday's signing ceremony. 

In Hebron, up to 2*000 Palestinians took 
to the streets, shouting anti-Jordan slo- 
gans and burning pictures of Jordan's 
Kin g Hussein. Israeli troops fired tear gas 
and bullets to disperse Palestinians stone- 
throwers in the West Rank city of Nablus. 

Palestinians are outraged at the treaty, 
which recognises King Hussein’s special 
role In Jerusalem’s Islamic sites and in 
negotiations over the future of the Holy 
City sacred to Moslems, Christians and 
Jews. The king bases his claim* to Jerusa- 
lem on assertions that his Hashemite mon- 
archy is directly descended from the 
Prophet Mohammed, said to have 
ascended to heaven from Jerusalem's Tem- 
ple Mount The Dome of the Rock is said 
to mark the spot and is the third holiest 
site in Islam. 

The king opened a speech to the Jorda- 
nian parliament last Saturday defending’ 
the peace treaty by calling for prayers and 
peace "on the truthful Hashemite Arab 


prophet and on his household”. 

Jerusalem, he said, “remains a trust 
with the Hashemites who are resolved on 
its patronage and reconstruction and on 
the supervision of its holy sites.” The 
Jerusalem controversy is the latest 
sign of a long history of tension and 
animosity between King Hussein and 
Mr Arafat. King Hussein, whose country 
includes 2m-3m Palestinians, once 

The controversy is the 
latest sign of a long 
history of tension 
between King Hussein 
and Yassir Arafat 

c halle ng ed Mr Arafat for leadership of the 
Palestinian cause; the PLO believes the 
king has not yet given up his ambition to 
influence the West Bank. 

Under UN resolutions, Arab East Jerusa- 
lem, including the old city, is defined as 
occupied territory seized for Israel in 1967. 
Palestinians want Jerusalem as their 
future capital. They accuse Israel and Jor- 
dan of trying to de-politicise the fate of 
Jerusalem and believe King Hussein has 
become a willing partner erf Israel to main- 
tain its occupation. Israel claims Jerusa- 
lem as its “eternal and indivisible capital”. 

The PLO and Jordan last week made 


rival appointments to the post of Mufti, 
the highest Islamic authority in Jerusa- 
lem. In a speech last Saturday, which 
angered Palestinians, King Hussein said: 
“We will never relinquish our religious 
responsibilities towards the holy sites”. 

At the United Nations, the PLO also 
appealed for international support to over- 
turn the parts of the Jordan-Israel peace 
treaty relating to Jerusalem, saying it vio- 
lates UN resolutions and the Israel-PLO 
peace accords. 

For decades. Palestinians have accorded 
Jerusalem a special symbolic reverence. 
Photographs of the Dome of the Rock hang 
on the wails of almost every PLO leader. 
In spray-canned graffiti across the Gaza 
Strip the Dome is often depicted, symbolis- 
ing the long-held Palestinian dream of a 
return to their cherished homeland. 

Mr Arafat, who was not Invited to yes- 
terday’s ceremony by either Jordan or 
Israel, on Tuesday blasted the Israel-Jor- 
dan agreement “Jerusalem is the capital 
of Palestine, whether they like It or not If 
they don’t like it, they can drink Gaza sea 
water,” he said, quoting an Arab proverb 
meaning he did not care if his statements 
were accepted or not 

“I say to them: Jerusalem is not for 
sale,” he averred. 

Hamas, usually at loggerheads with the 
secular PLO, has joined Mr Arafat’s con- 
demnation of the deal, saying It opens the 
don* for Israeli domination. 


A Record of Success in 
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s 


Way clear for 
deregulation 
of gas market 


By Michael Smith 

The government seems set to 
introduce a bill to deregulate 
the domestic gas market next 
parliamentary session alter Mr 
Tim Eggar, energy minister, 
yesterday outlined proposals 
tor a pilot scheme in 1995 and 
hill competition in 1998. 

Although Mr Eggar said he 
could not confirm the inclusion 
of legislation in the Queen's 
Speech to parliament next 
month, the positive tone of his 
remarks left little room for 
doubt that he believes the cabi- 
net will support the tabling of 
the bill. The Queen’s Speech is 
used to set out legislation 
which the government intends 
to propose in the next session 
of parliament 

Asked by an MP in a com- 
mittee meeting if his deregu- 
lation proposals could be 
implemented on time without a 
bill in the next session, he 
replied: Theoretically yes. but 
you need a lot of theory and 
not a lot of practice to reach 
that conclusion-'* 

A likely cabinet decision to 
go ahead with deregulation has 
been assisted by a g rowing 
consensus, which includes 
British Gas and consumer 
groups, that competition would 
be beneficial. 

Independent gas suppliers 
have predicted that prices 
could fall by 10 per cent as a 
result of deregulation. Ms 
Clare Spottlswoode. gas indus- 
try regulator, told MPs at a ses- 
sion of the trade and industry 
committee of the House of 
Commons yesterday that any- 
one who paid a bill on time in 
the new regime was likely to 
be a winner in price terms. 

British Gas said it is likely to 
raise its prices, including 
standing charges, by about the 
rate of inflation at the turn of 
the year. This ends speculation 
that the standing charge, now 
just under £37, would rise to 
£42 to reflect costs. 

The company promised con- 
siderable discounts for con- 
sumers who agreed to pay bills 
by direct debit and hopes to 
doable the number on such 


Coal traders are to complain 
to the European Commission 
about government “support” 
for the gas industry which 
they say amounts to discrimi- 
nation and contravenes compe- 
tition rules. 

The Chamber of Coal Trad- 
ers, representing 2.500 mem- 
bers, highlights three areas of 
concern. It claims British Gas 
Is receiving about £65m 
($102. 7m) of support from the 
Department of Social Security. 
It says this is because the 
department pays gas bills for 
claimants of state benefits 
who are in arrears. 

The chamber says it is not 
possible for claimants who use 
solid fnei to get the same help, 
ft alleges that the market is 
distorted as a result 

The second complaint arises 
from a system of pricing under 
which householders pay the 
same amount for gas supplies 
throughout Britain. 

The chamber says this Is 
possible because of British 
Gas's near monopoly position 
and also distorts competition. 
British Gas is already plan- 
ning to change the system. 

The chamber is also con- 
cerned about the pricing for- 
mula used by Ofgas, the gas 
Industry regulator. 


schemes from sm Co nfirming 
plans for more cost-reflective 
pricing, Mr Richard Giordano, 
chairman of British Gas, said 
there would also be a change 
in the middle of next year to 
reflect transportation charges. 
This could increase or decrease 
prices in some areas by 2 per 
cant 

Mr Eggar told MPs that com- 
petition would start with a 
regional pilot “perhaps in an 
area the size of a county with 
500,000 people" in April 1996. A 
second pilot involving 2m peo- 
ple. possibly in several areas, 
would follow In 1997. 

Mr Eggar said he hoped to' 
encourage small suppliers as 
well as large into the market, 
suggesting for example that 
coal-bed methane gas could be 
provided to individual villages. 


VINAMriAI. TIMES 


THURSDAY OCTOBER 27 19» 


NEWS: UK 


Environment commission’s aim dismissed as ‘technically impossible’ 

Carmakers scorn efficiency target 

Traffic jam: the Increase on the roads 




Movement of peopte growth fa surface transport 



Road traffic growth 
(BHfion voWde-hflometraa/yoar} 

_ 900 

High forecast 



_ • — Actual growth 


1352 60 


90 2000 


The report was welcomed enthusiastically by 
environmental groups, which saw it as poten- 
tially a breakthrough in their campaign for 
greener transport policies. Greenpeace 
described it as “a watershed in the battle 
against subsidised pollution*, and the Council 
for tile Protection of Rural England said the 
report showed “vision”. 

The report was also welcomed by campaign- 
ers for cleaner air and a reduction in asthma. 


now widely linked to transport pollution. After 
some notorious battles over new road schemes, 
the report's emphasis on. the “best practicable 
environmental option” is certain to encourage 
green groups to take a more aggressive stance 
over future plans. The Royal Society for the 
Protection of Birds pointed out that 160 sites of 
special scientific interest were directly at risk 
from the gove rnme nt's road programme, and 
wildlife was suffering from polluting emissions. 


Irish Republic 
ready to shift on 
territorial claim 


By John Griffiths 

The motor industry, which is 
still recovering from one of its 
steepest recessions, yesterday 
rejected as “technically impos- 
sible” one of the main recom- 
mendations from the Boyal 
Commission on En yir t> nni e ntal 
Pollution - that the fuel effi- 
ciency of the typical family car 
should be increased by 40 per 
cent over the nest 11 years. 

It also insisted that the com- 
mission's depiction of roads 
jammed with up to 48m 
vehicles by the year 2025 - 
double the current number - 
was tnislftsfbr ic 

“We agree that car owner- 
ship will increase, hut this 
does not necessarily mean that 
usage will do the same. 1 ' the 
Society of Motor Manufactur- 
ers and Traders said. 

Mr Roger King, the society's 
public affairs director, said: “In 
the next century we will see 
more famili es with perhaps 
three cars for different reasons 
• an electric vehicle far city 
use, an inter-city car and a 
weekend leisure vehicle. But 
they will not be all on the road 
at the same time." 

The industry also expressed 
concern at the commission's 
proposals further to modify the 
Inland Revenue's new com- 
pany car taxation regime “to 
remove the incentives for envi- 
ronmentally damag in g behav- 
iour". 

Under the existing regime, 
the tax liability a company car 
driver incurs on private use of 
the car falls by a third if more 
than 2^00 business miles are 
travelled a year; and by a fur- 
ther one-third above 18,000 
business miles. 

Business cars now account 


for 70 per cent of the UK new- 
car market and their sales are 
entirely responsible for the 
current market recovery. Any 
significant shrinkage of the 
business car market could 
have adverse implications for 


Britain as a car manufacturing 
base, the industry says. 

There was less concern 
among vehicle manufacturers 
over the call both by the com- 
mission and by the pnramniiq 
transport committee for a ban 


on the sale of super unleaded 
petrol because of its high con- 
tent of benzene and other 
octane-boosting “aromatics' 1 
linked with cancers. 


Ford results, Page 17 


By Philip Stephens and 
David Owen at Westminster 

The government of the Repub- 
lic of Ireland has told its Brit- 
ish counterpart privately that 
it is willing to amend the most 
sensitive element of Its consti- 
tutional claim to Northern 
Ireland. 

But draft amendments 
suggested by Dublin to article 
2 of the constitution - which 
defines Northern Ireland as 
part of the republic's "national 
territory” - do not go far 
enough to meet the US govern- 
ment's demands. 

The amendments have been 
tabled as part of the intense 
negotiations on a framework 
document to provide the basis 
for a political settlement for 
the province. 

Mr Albert Reynolds, the Irish 
prime minister, has signalled 
that he is ready to submit to a 
referendum changes to the less 
controversial article 3 of the 
constitution, which also refers 
to the jurisdiction claimed by 
the republic. 

Publicly, the Dublin govern- 
ment has strongly resisted the 
suggestion that it might 
change article 2, which states 
simply: “The national territory 
consists of the whole island of 
Ireland, its islands and territo- 
rial seas.” 

British officials hope Dub- 
lin's private acceptance that 
article 2 is no longer inviolate 
will help break the deadlock in 
the talks on a framework docu- 
ment. 

Mr John Major, the UK 


prime minister, told Mr Reyn- 
olds earlier this week that an 
overall deal acceptable to 
Northern Ireland’s moderate 
supporters of union with the 
rest of the UK would be impos- 
sible without a radical revision 
of the constitutional claim. 

But it is understood the two 
possible revisions so far 
suggested by Dublin do not 
meet the central unionist 
demands that Northern Ireland 
must be recognised as outside 
the "national territory" and 
chat they no longer be defined 
as members of the "Irish 
nation". „ ^ , 

These indications of Dublin s 
position came on the eve of the 
first House of Commons debate 
on Northern Ireland since the 
republican and loyalist cease- 
fires. , . 

During the debate, ministers 
may be. pressed on last week's 
move by Mr Major to separate 
plans for a Northern Ireland 
assembly from wider talks on 
the province's status. 

The move appeared to irri- 
tate the government of the 
republic, although Mr Major 
said an Monday that it would 
be a “misreading’’ to suggest 
he was trying to detach one 
from the other. 

If questioned today on 
whether the “nothing is agreed 
until everything is agreed" for- 
mula governing political talks 
on the province still applies, 
ministers are expected to say 
that the basis upon which 
talks began in 1991 will stay in 
place unless and until the 
participants decide otherwise. 


Citicorp offshoot plans lifeline for Names at Lloyd’s 


The prospect of traditional Lloyd's 
Names becoming a rare - if not 
endangered - species heightened yes- 
terday. our Insurance Correspondent 
writes. Plans were unveiled that 
would allow increasing numbers to 
trade without being liable down to 
their last collar stud. 

Citibank, the subsidiary of US bank 
Citicorp, said it had devised an inno- 
vative scheme to allow existing 
Names to convert from unlimited to 
limited liability without breaking 


Lloyd’s rules. The proposals could 
lead to a further reduction in the 
number of traditional Names, the 
individuals whose assets have histori- 
cally supported the Lloyd’s insurance 
market but have been hit by heavy 
losses in recent year. The number of 
Names actively underwriting has 
Men from a peak of 32,000 in 1989 to 
fewer than 18,000 this year. 

Mr Peter Middleton, Lloyd's chief 
executive, said yesterday that most 
Lloyd's Names may well convert In 


the next few years - though the 
higher returns offered by unlimited 
liability would continue to attract a 
minority. 

“There will be a strong caucus - 
perhaps 3.500 - who will opt to 
remain exactly as they are, on unlim- 
ited liability.'' he said. 

Citibank's proposals await approval 
by Lloyd's but have been drawn up in 
consultation with members’ agencies, 
who look after the interests of Names, 
and officials at the ins, ce market. 


They will be considered by Lloyd's on 
November 4. 

Main features include a “reinsur- 
ance” agreement by which Names 
would transfer liabilities outstanding 
on policies they have underwritten 
previously to an individual company, 
or “NameCo”. That would not isolate 
them completely from past exposures 
but offer some protection. 

Lloyd’s has agreed that NameCos 
should hold a minimum of £100.0 00 at 
the insurance market compared with 


the £L5m required from companies 
who have been set up in the past few 
years to inject corporate capital into 
the market 

To make the scheme more attrac- 
tive, Citibank has arranged for some 
of those adopting it to buy a separate 
reinsurance policy which will have 
the effect of increasing their funds at 
Lloyd’s - allowing them to under- 
write more business. If many Names 
transfer to limited liability, the pro- 
cess could become unstoppable. 




* 


» 




If you think the Germans are fussy about their cars, 

YOU SHOULD SEE HOW THEY TREAT THEIR PLANES. 


h i the automotive industry. the world acknowledges Germany's technical and 
engineering prowess- But in the airline industry, Germany acknowledges South Africa's prowess, by 
entrusting the maintenance of their national carriers fleet to South African Airways technicians. 

Trust that was earned the hard way. 

The examinations which we require our technicians to pass (75% is a pass) put the successful examinees 
among an elite of the most qualified technicians in the world. 

Qualifications that also allow- us to maintain, overhaul and modify the fleets of every carrier using 


equipment from Airbus Industries or Boeing that touches down in South Africa. We are also contracted to do 
ail maintenance and modifications on several airlines, many of which would probably surprise vou 

You may consider it strange that an airline which prides Itself on inflight service devote an advertisement 
solely to operational technicalities. 

But look at it this way. If you know you're in the safest hands, aren't you 
going to enjoy the reasons why we’ve been voted “Best Carrier to Africa" for SQUTO AFRlCA^u^^ 
the last six years, even more? AFRICA'S WARMEST WELCOME. 


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i 






FINANCIAL TIMES THURSDAY OCTOBER 


27 1994 


I lovJ 


r m 


UK NEWS DIGEST 

US companies 
join N Ireland 
cable venture 

° f Ireland. TeleWest. the largest UK 

mS ataa * plamiIlg a M •» 

A consortium being put together by TeleWest - a 5 Q-S 0 taint 

3?™ ™ SLle 

1 “®i U ®' ?“*} 5 s West, the regional telephone company - is 
hlseJy to include both Mr Tony O'Reiny’s ludependenlNewspa- 
d 61 ^ am ^ the national broadcaster for the 

Hepublic of Ireland. Mr O'EeiHy’s Irish Independent newspapS 
“ al f ead y involved with a consortium. Princes Holdings, 
which operates cable networks in Cork and Limerick in the 
repubfic and a microwave broadcast service in the west of 
Ireland. The other shareholders are TCI and United Interna- 
tional Holdings, an American cable operator. UIH is also likely 
to be involved m the Northern Ireland bid. 

The TeleWest consortium win be challenged by a consor- 
tium that includes Ulster Television, the Independent televi- 
sion company for Northern Ireland. The company is believed ! 
to be talking to Comcast, the quoted US cable operator which I 
is the eighth-largest cable group in the UK. , 

‘Cottage’ holidays take off 

Big holiday companies are starting to market holidays in what 
t he in dustry calls ’cottages’ to customers outside the UK The 
‘cottage’ can be anything from a converted Tfti gtiKh bam to a 
Scottish castle, and such holidays have boomed among UK 
residents in recent years. 

In August Thomson, which owns the UK’s largest overseas 
tour operator, charter airline and travel agency, bought Coun- 
try Holidays, the UK’s largest holiday cottage letting company, 
for about £34m ($53.7m). The purchase could transform the 
holiday industry, bringing sharper marketing to a sector that 
has traditionally been poorly organised. Mr Geoff Cowley, 
marketing manager of Country Holidays, says nobody is sure 
of the size of the market for UK self-catering armmmnri^finn 
Country Holidays has 5,600 properties on its books while 
English Country Cottages, the second-largest company, has 
2300- Neither ‘cottage* company owns property. They take 
bookings and collect bills on behalf of private owners in return 
for commissions of between 21 and 25 per cent Customers 
from outside the UK account for only 5 per cent of the two 
companies’ business, and both companies are actively market- 
ing ’cottages’ overseas. 

First oil from new field 

BP and Shell said yesterday that they had produced the first 
oil from the Atlantic west of Shetland, a group of irianria to 
the north of Scotland. In a six-week extended test of their new 
Foinaven field, the well flowed at up to 20,000 barrels a day 
with an average flow of 17300 barrels. On completion of the 
test a cargo of oil was taken to BP*s refinery in Rotterdam. 

In addition to being the first ofi. produced and saved from 
the area, it was the first production from 500 metres under 
water, and the highest flow rate achieved in the area. Foin- 
aven and its neighbouring Schiehallkm field are among the 
biggest new oil and gas discoveries in UK waters. The two 
wells could account for 30 per cent of the UK's known 
reserves, with production amounting to a similar proportion of 
the UK’s total output when they are fully developed, to 
August Shell and BP placed contracts with a consortium of 
McDennott/GoIar-Nor for a floating production system for the 
first phase of Foinaven development 

Murder inquiry reopens 

Police have reopened their investigation into one of the most 
notorious murder cases of recent years. Rachel NickeH, aged . 
23, was stabbed to death in 1992 while walking with her 
two-year did son on Wimbledon Common, an expanse of public 
open space in the south London suburbs. The file an the case 
at Scotland Yard was closed last month after the collapse of a 
murder case brought against Mr Cohn Stagg. who lived near 
the scene of the crime. 

Police tactics towards Mr Stagg were described by the trial 
judge as "something without precedent and frankly a dis- 
grace”. An undercover policewoman sent Mr Stagg letters and 
a tape in an attempt to encourage him' to reveal sexual 
fantasies. 

Nissan Motor loses appeal 

Nissan Motor, the Japanese car manufacturer, yesterday lost 
its appeal against a ruling in the High Court that it should pay 
£6m (89.5m) to Nissan UK, its former importer and distributor. 
The Court of Appeal upheld the ruling made to the High Court 
in March last year that Nissan Motor had. entered into an 
agreement with Nissan UK to pay the £6m aaan incentive for 
taVfag 12,700 Bluebird cars shortly before they went out of 
production in .1390. Nissan Motor bad denied that such an 
agreement .iiad been negotiated with Mr Octav- Botnar, the 
Nissan UKcbainnan. 

Mercedes close to engines deal 

Mercedes-Benz is poised to sign an agreement under which it 
will become the official engine supplier for Mr Ron Den- 
nis’sMcLaren grand prtx racing cars next year. Subject to final 
detailed negotiations today, the deal will be announced in 
Stuttgart tomorrow. The engines, now supplied to the Swiss 
Rnniw - raring team, are designed and built in the UK by Dmor 
En gineeri ng of Northampton, to which Mercedes has a 25 pear 
cent >. 


London dockland 
railway to be sold 

By Charted ibartetielar, V V tato«l until then. 

Transport Correspondent ’ which 

carried its first passengers m 

The London 7 Docklands Light 1987, but its wily years were 
Railway, which links the City dogged by technical problems, 
of London with the East End, A new managaneot tem 
is to be franchised to a private- whUh joined m! Decemberl99l 
sector operator in 1396 before has modernised the railways 
being sold completely seven signal li ng , taprov ed relia bility 
years later and built a new extension to 

Announcing plans for priva- the east In the past 12 months 
tfeatfonafthe 15 -mile railway, the number of passengeishas 
Mr John Gummer, environ- risen by 40 per cent to 45,000 a 
ment secretary, said yesterday toy. to 

the government would also The “ “ESL*! 

seek bids from private consar- prove attractive tofrangnse 
tia to bufld an extension cost- bidders, including possfoly its 
tag between £U0m and £l3Qm own UnUke 

under the Thames to the south- routes which are to be sold 
east suburbs of Greenwich and from the najjaal Bntish Rail 
Lewisham. network. it wffl be flM jbj a 

The decision to franchise the fully-integrated rail way, own - 
railway before selling it mg its own track and operating 
reflects in part its large losses, its trains. 

’Hie railway expects to earn Bidder s for 

revenues ofonly £ 7 m this year sham extension ^ *2™? 

against operating costs of to 

£l8m, but ^expected to move oal journal ‘^.^Europran 
intopraflt during the period of Union early next mcarth and a 
the franchise. A declining level shortlist will be announced in 
of subsidy is likely to be main- January- 


NEWS: UK 


Municipal reform in 
chaos, says Labour 


Confijskm In the counties 

• : - . . A 


By John Authors 

Sir John Banham, chairman of 
the commission created by the 
government four years ago to 
review the structure of munici- 
pal adminis t rati on , yesterday 
announced the nhaijiiwimAn t 
of plans to abolish six county 
councils. They were Cam- 
bridgeshire, Cheshire, Cum- 
bria, Kent, Lancashire and 
Oxfordshire. 

Tht> announcement a 

decisive rejection of the gov- 
ernment’s original preference 

that COUnty shrams be 

replaced by unitary authorities 
combining the powers of coun- 
ties and districts to all but 
"exceptional” circumstances. 
At the moment county and dis- 


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'spUDdnO WBJririoflj I983v87'" 
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trict authorities exercise di£Cesr- 
ent powers over the same 
areas. District councils have 
lobbied hard for the end of the 
two-tier structure through abo- 
lition of county councils. The 
districts would then become 
unitary authorities with all the 
powers. Of the 17 counties for 
which proposals have been 


announced so for, 10 will keep 
the two-tier system - at least 
in part Proposals for all the 
other Rn gtfah will be 

given to the government by the 
end of the year. 

Opposition politicians 
claimed the government’s pol- 
icy was to chaos. Mr Frank 
Dobson, local government 
Spokesman for the opposition 
Labour party, said: "The pres- 
ent position is yet another 
monument to government 
incompetence. Turmoil and 
trouble, all for nothing - a use- 
less distraction.” 

However, the commission 
has proposed a change to the 
structure of Hampshire, with 
Portsmouth, Southampton and. 
the New Forest district cotm- 


Two-Uar caantfes rattened 
•1 Ce i tte hi tfHhgtt ■ 

‘ * ‘Cheshire 

a Cumbria " 

4 Heroptffta 
.5 .Kant' ; 

. . a La n c a s h ire ■ 

- r Urafrattre ' ' 
a North YcrtstoB •] 

Qxfcrdsteiw - ^ 

TO Somerset . 

MnumbriH 

.11 Awn ' ’ • 

ft Bedfordshke m -^§ 

BuejdnghamsttrB ' 

' 14 Cleveland 

"15 Hiinherskie 

■» We of Wight r"' 




am MWipotan 
SR TnMUh* • 
fc_ j Nwrentato* 

! ‘ ToboMtoiaiaBd 




■W 

- •. . • 


Bourn* tool OomanMia CeanMn tar Ensfand 


oils all given unitary status on 
their cur re n t boundaries. 

In Buckinghamshire and 


with both county councils 
being abolished and most of 
the lower-tier district councils 


Bedfordshire, Sir John recoin- being given unitary status on 
mended more radical change, their current boundaries. 


RAF wants Boeing helicopters instead of Westlands 


The Royal Air Force is 
pressing for its current fled of 
transport helicopters to be 
updated using only the latest 
version of the US-made Boeing 
Chinook, our Defence Corre- 
spondent writes. It does not 
want the mixed fleet of Chi- 
nooks and Westland EH1Q1 air- 
craft which was originally pro- 
posed. Tins is the latest of a 


series of military procurement 
decisions which pits off-the- 
shelf US products against 
European-developed alterna- 
tives. 

The European Future Large 
Aircraft is fighting the 
Lockheed C-130J Hercules 
for a £900m (3L42bn) RAF 
order, and the US Apache heli- 
copter is set against the Euro- 


pean Tiger to the British 
army's £2bn attack helicopter 
competition. 

The RAF will argue for the 
Chinook when the Elbn order 
for up to 40 support helicopters 
goes to the Ministry of Defence 
equipment committee next 
week. However, the army, also 
represented on the committee, 
is thought to favour a mixed 


fleet of helicopters to give ver- 
satility. 

The Chinook can lift 10 
tonnes against the EHlol’s 43 
tonnes, but the EH101 is 
smaller and more agile with 
better night operating capac- 
ity, making * it more suitable for 
some army mimriowL 

Westland, the helicopter 
maker owned by GKN of the 


UK, has been hoping for an 
order for about 25 EHlOls from 
the RAF. 

The order would be an 
important endorsement from 
the ministry which would help 
the helicopter’s export pros- 
pects. Westland is negotiating 
to sell the anti-submarine war- 
fare version of the EH101 to 
several Gulf states. 


Taiwan 
power bid 
decision in 
January 

Nn clear Electric, the 
state-owned generating com- 
pany, expects to receive a deci- 
sion by the end of January on 
its joint bid to build a power 
station In Taiwan, David 
Green writes. 

The bid, based on the design 
of the proposed Sizewell C 
plant In eastern England, has 
been made in conjunction with 
Westtogfconse of the US, which 
collaborated over the design of 
SizeweU B. 

The companies are being 
given nntU mid December to 
decide whether to revise their 
joint bid and are now carrying 
out a reassessment of costs. 

Executives are also answer- 
ing technical and commercial 
questions posed by Tai Power, 
the Taiwanese generating com- 
pany. 

Two other bids are being 
considered, from Asea Brown 
Boveri, owned by Combustion 
Engineering of the US, and 
from Framatome of France. 

Sizewell B, Britain’s first 
pressurised-water reactor 
power station, is expected to 
start generating electricity to 
mid December and to achieve 
its maximum output of 
1.I88MW by March. 


* 




- ■■Cim-s” by i* 



JO:1 Action I r.zt 


W.i'.hinj’tun DC. USA. 



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10 


FINANCIAL TIMES THURSDAY OCTOBER 21 1994 


TECHNOLOGY 



A vaccine for 
the common 
cold is a dis- 
tant dream but 
a cure may be 
closer to hand. 
Scientists have 
tried for years 
to fathom the 
mysteries of the many viruses 
that cause the cold. 

There have been several 
false dawns. The discovery in 
1985 of the structure of the rhi- 
novirus - of which there are at 
least 120 out of about 200 cold 
viruses - was heralded as the 
breakthrough that might pro- 
duce a vaccine. Some research- 
ers said at the time, however, 
that its very complexity meant 
a vaccine was probably impos- 
sible. 

Yet, it was a breakthrough. 
It meant scientists could begin 
to think about designing a 
drug that might stop the virus. 

Nearly 10 years on. there is 
□o new drug that does more 
than alleviate cough and cold 
symptoms. Drugs are becoming 
more sophisticated, but none 
prevents infection. 

Now. there is another break- 
through. In March this year. 
Agouron Pharmaceuticals, a 
small US company, announced 
it had discovered the atomic 
structure of rhinovirus 3C pro- 
tease (RVP). an en?vme that 
plays a vita 1 role in the life- 
cycle of the rhinovirus. The 
RVP enzyme helps the virus to 
do its work as it enters the 
body (through the nose, eyes 
or mouth), producing the 
symptoms associated with 
colds. 


Scientists are closer to finding a cure for the cold, writes Sheila Jones in a series on drug discoveries 

Research not to be sneezed at 


“It is probably the most 
important breakthrough since 
the structure of the virus was 
discovered in 1985.” according 
to Jeffrey Almond, microbiol- 
ogy professor at the University 
Of Reading, one of the main 
centres of research in the UK 
into the common cold. 

Agouron believes the discov- 
ery will enable it to design a 
drug, atom by atom, that will 
lock into the enzyme and 
inhibit or stop rhinovirus repli- 
cation. It sounds familiar, but 
there are some differences. 

first, every virus and rhino- 
virus would need its own vac- 
cine because each is minutely 
different; Agouron believes the 
enzyme structure is common, 
or similar, to at least the rhino- 
viruses. If it can design a drug 
to fit the RVP enzyme, it could 
reach half of all colds. 

Second, Agouron, in common 
with several other pharmaceu- 
tical companies, is working 
with computerised drug 
design. Computing tools can 
provide important leads in the 
search for the right atom to 
create a molecule that locks on 
to a virus. The chances of hit- 
ting the right combination are 
greater because scientists can 
try out any number of combi- 
nations more swiftly than they 


European cough medicine market 


Brand value 


Brand 

Manufacturer 

% 

Benyifn 

Warner Lambert 

30.0 

Covonta 

Thornton & Rosa 

9.4 

Boots own-label Boots the Chemist 

6-5 

Actifed 

WeOcoma 

5.3 

Sudafed 

WeUcome 

3.9 

Vicks 

Procters Gamble 

3.9 

Mottos 

Seton Healthcare 

3.8 

Thcyfix 

Intercare 

2.7 

Rototussin 

Whitehall Laboratories 4.6 

Vena's 

SmrthKUne Beecham 

2.0 


Acmm 

.SYRUP 



Manufacturers' shares 

Manutacturar 

% 

Warner Lambert 

19.X 

Mars 

12.7 

SmJtbKnne Beecham 

11JB 

Crookes/Boots 

aa 

Zyma Healthcare 

5.6 

Procter & Gamble 

3.4 

Marion Merrefl Daw 

B2 

WeUcome * 

4.3 

Reckitt A Cofman 


tntepcaga 

13 


Sousa Euromonaor Marvel Dktebon horn trod* eahmaiaa 


could 10 years ago. 

Agouron says it hopes to 
have a drug in the develop- 
ment phase by next year, 
although it will be “some 
years” before such a drug 
would be on the market. Drugs 
go through years of clinical tri- 
als before they are allowed on 
to the market, whether for pre- 
scription or over-the-counter 
sale. Initially, Agouron plans 
to develop agents for treatment 
of chronic obstructive pulmo- 


nary disease, such as emphy- 
sema and chronic bronchitis. 

Agouron is not alone in the 
race to design a drug to kill the 
cold. Agouron provided Eli 
Lilly, the US company, with 
the RVP structure in exchange 
for commercial rights to anti- 
HIV agents produced jointly by 
the two companies. 

Also in the picture are Japan 
Tobacco, the main contributor 
of fluids for Agouron's anti-vi- 
ral research, and Syntex, a US 


subsidiary of Roche of Switzer- 
land, which is also contribut- 
ing. JT has contributed S56m 
(£35m) to the collaboration in 
the past three to four years, in 
exchange for a licensing and 
profit-sharing arrangement. 
Any other company, Agouron 
acknowledges, could establish 
the enzyme structure and 
design a prophylactic drug. 

Yet all researchers are aim- 
ing at an extremely difficult 
target, says David Tyrell, a 


virologist who ran the common 
colds research unit at Salis- 
bury in the UK for 26 years 
until its closure in 1990. “You 
need to produce something 
that will kill the virus but 
won’t also damage the delicate 
nerves and tissue in the nose 
or cause irritation that is 
worse than the cold," says 
Tyrell. He points to the early 
optimism about interferon in 
the mid-1980s. The first experi- 
ments showed that it stopped 


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'ACTUATION SYSTEM • S ' > 



INTRODUCING THE 
NEW JAGUAR XJ SERIES. 

When the engineers at Jaguar designed the 
new XJ Series, they wanted to create a luxury car 
that was built like a fortress. 

in order to achieve this, Jaguar analysed 'real 
life' accidents, and (earned the best way to protect 
passengers in the event of a collision. Six energy 


absorbing crush tubes which collapse progressively 
on impact were built into the front and rear of 
the car. Energy absorbing blocks were built into the 
doors and a steel bulkhead placed between the 
fuel tank and the passenger compartment. And for 
added protection, high strength steel impact bars 
were welded into the sides of the car. 

Driver and passenger airbags, incorporating 
electro-mechanical crash sensors were installed 


as standard, together with an inertia switch which 
isolates the fuel tank in the event of a collision. 

With all these features, it's not surprising that 
a recent Department of Transport study found the 
Jaguar X}6 the safest car on British roads. 

We couldn't think of a better advertisement. 
For details or to arrange a test drive, 
contact your local Jaguar dealer. jAGUAr 
DON’T DREAM IT. DRIVE IT. 

033 


the cold hut It produced unac- 
ceptable side-effects, including 
nasal damage. 

As the world waits for a 
cure, the OTC coughs and 
colds industry is constantly 
upgrading and refining its 
products. Nearly two-thirds of 
cold sufferers seek self-medica- 
tion in a global market worth 
about £3.5bn a year. 

The trend in the industry Is 
to improve what Is already 
available. Most cough and cold 
remedies contain an analgesic, 
such as paracetamol or aspirin, 
plus one or more active ingre- 
dients to control specific symp- 
toms. These include deconges- 
tants such as ephedrine and 
pseudoephedrine and sedative 
antihistamines, such as 
diphenhydramine and pro- 
methazine. to suppress cough- 
ing and to dry a runny nose. 

The industry has sought to 
target specific symptoms, to 
improve tastes and delivery 
systems, to speed up and pro- 
long treatment effectiveness, 
and to produce better and safer 
packaging. 

The industry has also pro- 
duced new mixes with drugs 
coming off prescription and on 
to the OTC market. Two years 
ago, the antihistamine Tavist, 
developed by Sandoz of Swit- 
zerland, switched from pre- 
scription to OTC and is now an 
ingredient in the company's 
cough and cold remedies. 

Boehringer Ingelheim. which 
leads the German market, says 
it is focusing on switching 
more prescription-only drugs 
to the OTC market following 
the move to OTC of its Bisol- 
von cough treatment, which 
sells about DM245m (£102m) 
annually. DM45m of which is 
prescription-based. 

Crookes Healthcare, the UK 
division of Boots Healthcare 
International, launched ibupro- 
fen, the analgesic, anti-pyretic 
(lowers temperature) and anti- 
inflammatory drug onto the 
OTC market in 1983 as Nuro- 
fen. This year, the company 
produced a new formulation - 
Nurofen Cold & Flu tablets - 
the first specific cold treatment 
sold OTC containing ibuprofen. 
The product's other active 
ingredient Is the decongestant 
pseudoephedrine. P&G is also 
launching in the US a patented 
formula in its Vicks range 
which is ibuprofen-ba8ed and 
contains a decongestant. 

Procter & Gamble’s recent 
repackaging of some products 


is tvpical of moves under way 
elsewhere in th* industry. 
p&G’s new Accutip packaging 
for its cough products restricts 
the amount of liquid leaving 
the bottle, and SmithKline Bee- 
cham has recently repackaged 
its top-selling Contac line of 
cold remedies. Johnson & 
Johnson has introduced the 
Tylenol FastCap. a bottle cap 

tha t opens with a slight twist. 
It is aimed at elderly or 
arthritic people and house- 
holds without young children. 
Improved deliver)' systems in 
recent years include easy-ro- 
s wallow gelatin capsules and 
dav/night tablets of drowsy 
and non-drowsy cold formulas 
in one package. 

The market, dominated glob- 
ally’ by a handful of interna- 
tional groups, is also trying to 
produce better-tasting reme- 
dies. such as SmithKline’s 
range of Beecham powders for 
hot drinks containing honey 
and lemon. Reckitt & Column, 
of the UK. now produces a 
range of its leading Leras ip 
brand, with drowsy and non- 
drowsy formulas, capsules and 
flu strength. The company says 
more Lemsip products, with 
known pharmaceutical agents, 
are being developed. 

Leaders in the global coughs 
and colds OTC market are 
P&G, which has about a 15 per 
cent share, according to indus- 
try estimates; Warner Well- 
come, the Anglo-American 
joint venture between Warner 
Lambert of the US (which pro- 
duces Benytin) and Wellcome 
of the UK (which makes 
Sudafed) with 14 per cent; 
American Home Products, with 
about 8 per cent, and Smith* 
Kline Beecham. which has a 
4.5 per cent share (this is 
expected to rise to about 7 per 
cent when details of SB’s 
recent acquisition of Sterling 
Health are finalised). 

None of the leading pharma- 
ceuticals companies is betting 
on a cure, but all are reshap- 
ing. repackaging and remixing. 
“The goal is to get a cure,” 
according to P&G. "hut before 
you get there, you have to try 
to improve what’s available 
now.” 

A six-port series on cancer 
research will start on the Tech- 
nology Page next month. The 
drug discovery series will 
resume next summer. 


1 ■ Articles over 

the last six 

months have looked at phar- 
maceutical advances In the 

fo Bowing areas: 
Immunity — 

30 September 

Fungi 

29 July 

PainkiHera 

30 June 

Multiple sclerosis 

29 April 


New light on 
road safety 

European car makers are using 
pioneering techniques, 
writes John Griffiths 


E urope's motor industry 
has developed 
a system which could 
sharply reduce road deaths, 
according to European car 
manufacturers. 

The technology, which 
involves the use of ultra-violet 
light in headlamps, was 
developed under the 
Prometheus research 
programme and could be ready 
by the end of this decade. 

About 50.000 people are 
killed and around lm injured 
each year on Toads in Europe. 
With a view to reducing the 
toil, and solving another of the 
problems bedevilling Europe's 
roads - traffic congestion - 90 
cars and trucks fitted with an 
assortment of pioneering 
technologies were pnt through 
their paces at a Paris 
conference last week. 

They were demonstrating 
the fruits of Prometheus, the 
first pan-European 
collaborative research project, 
which involves 13 vehicle 
manufacturers and some of 
their key component suppliers, 
plus electronics and defence 
equipment producers, research 
in stitut es and universities. 

Prometheus - an acronym 
for Programme for a European 
Traffic with Highest Efficiency 
and Unprecedented Safety - is 
eight years old and has cost 
nearly Ecu 900m (£7 03m). 

The UY system, developed 
by Saab and Volvo, was 
demonstrated by Saab last 
week. At an unlit test track 
near Paris last week, the Saab 
9000 showed only a hint of UV 
light from two small lamps at 
bumper level. But for the 
driver, the UV transformed the 
view. White lines and road 
signs treated with 
UV-responsive paint shone out 
from hundreds of yards ahead. 

Apart from safety, there is 
another dimension to the 
programme. Europe’s vehicle 
makers are locked in a fierce 
race with rivals in Japan and 
North America to develop new 
technologies expected to 
transform vehicles and road 
infrastructure by the 2lst 
century. 

At stake are vast rewards 


for those whose technologies 
become the industry standard 
in areas such as vision 
enhancement, automatic 
collision avoidance, and data 
interchange between vehicles 
and roadside equipment for 
purposes such as route finding 
and automatic tolling. 

The Prometheus research 
has fallen into three 
categories: safer driving, 
mainly through autonomous 
on-board systems; 
“co-operative” driving, 
involving information 
exchanges between vehicles or 
roadside information beacons; 
and broader traffic 
management technology. 

The UV system fails into the 
first category. Jaguar, glass 
manufacturer Pilkington and 
GEC Marconi Avionics have 
taken a different approach, 
adapting military technology. 
A near-infra-red camera and 
filtered headlamps allow the 
driver to see into pitch-black 
countryside. Infra-red, unlike 
UV, can also cut through fog. 

Jaguar also demonstrated an 
"intelligent" cruise control 
car, developed with Philips, 
Lucas Industries, Alfred Teves 
and DASA. which measures 
the distance and speed of 
vehicles ahead, maintaining a 
safe distance by automatic 
braking and throttle. The 
driver can override the 
system. 

Lucas, and Oxford and 
Southampton universities, has 
joined Jaguar to develop a 
vision system using a video 
camera and radar sensors to 
scan the road ahead and 
predict collision risk. BMW, 
Matra, Renault and Jaguar 
have also developed systems 
which help the driver stay In 
lane using a camera which 
recognises lane markings. 

Collectively, the Prometheus 
technology stands to change 
driving and safety standards 
beyond recognition in the next 
two decades - if motorists are 
prepared to pay extra for 
safety features. 

ff Prometheus succeeds in 
its goals, the 50.000 annual 

ZOIO^ ^ be halved by 



FINANCIAL TIMES 


THURSDAY OCTOBER 27 1094 


II 


PEOPLE 


Peugeot's UK steering wheel to 
remain in British hands 


Geoffrey Whalen, who as chief 
executive of Peugeot Talbot 
ms overseen, a renaissance of 
the French car-maker’s UK 
subsidiary during the past 11 
years, Is to leave the company 
at the end of the year, though 
he will remain on the board in 
a non-executive capacity. 

The parting is said to be 
entirely amicable and the pow- 
ers- that-be at Peugeot's group 
headquarters in Paris are con- 
tent to leave Peugeot Talbot’s 
operations in another 
pair of hands. Whalen’s succes- 
sor is to be his long-serving 
aide Richard Parham (far 
fight), ten years Whalen's 
junior, who has been assistant 
MD at Ryton since 1981 - ini- 
tially under Whalen’s own pre- 
decessor, the late Sir Georse 
Turnbull. 

"The initiative is entirely 
mine," stresses Whalen (right), 
whose angular, bespectacled 
and often suede-ahoed appear- 
ance gives him more the 
de m ea n our of a university don 



than a motor magnate “There 
have been no rows, no disputes 
- we now have a good facility 
and a good future at Ryton (the 
car plant near Coventry); I'm 
nearly 59 and now is a good 
time to leave and go and do 
something different'’ 

What that something will be 
Whalen is not yet prepared to 
say - "except that I don’t have 
any intentions of going off to 
run a rival car company”. 

Whalen is such a motor 
industry institution - he has 
twice been president of the 
Society of Motor Manufactur- 
ers and Traders and is cur- 
rently its deputy president - 
that it tends to be forgotten 


that he cut his career teeth not 
on motor cars but in the coal 
industry. He worked in indus- 
trial relations for the National 
Coal. Board for seven years 
before joining first motor com- 
ponents group AC Deico. then 
British Leyland and - after a 
brief spell with food group 
Ranks Hovls McDougall - 
Peugeot Talbot, as personnel 
director, In 1980. 

The Peugeot Talbot Whalen 
joined was a very differ ent ani- 
mal from today’s. It was then 
mired in losses which would 

total nearly £400m over almost 
a decade before the financial 
tumronnd - a £3Jm net profit 
- came in 1984. 

Snce then it has been profit- 
able for all but one of the past 
ten years, with, its UK market 
share jumping from just over 1 
per cent to the current 8 per 
cent. Car production over the 
same period rose from 20,000 a 
year to a peak 100.000-plus, 
with around 90,000 expected 
Tiatt year. 


■ Mike Grant, 41, a former 
Laing & Cndckshank stockbro- 
ker, has taken over as group 
treasurer of Eurotunnel where 
he will be responsible for man- 
aging the group’s £8bn debt 
and relations with its 220 

hanlrg 

Grant, who joined Euro- 
tunnel in 1987 and is a member 
of the association of corporate 
treasurers, is taking charge of 
an expanded department fol- 
lowing Eurotunnel’s decision 
to merge its treasurer's and 
corporate finance departments. 

The former has been respon- 
sible for areas such as the 
management of the group’s 
interest rate and foreign 
exchange exposure and the cor- 
porate finance department has 
been concerned with bank 
negotiations, flnanrfoT annlyriq 
and equity issues. 

Now that Eurotunnel has 
raised the bulk of its capital, 
the group is consolidating its 
financial side under Graham 
Corbett, the chief financial offi- 
cer. Peter Ratzer, 55, currently 
director of corporate finance , is 
becoming a senior financial 
adviser before t aking early 
retirement towards the middle 
of 1995 and Patrick Fulhaber. 
48, who has been treasurer 
since 1991, is returning to 
France. 

Grant, who was corporate 
finance manag er, will also take 


over responsibility for the 
bank and investor relations 
department in his new role. 

■ Colin Fraser, 49, chief exec- 
utive of McGregor Cory, the 
contract distribution business 
of Ocean, has resigned, and 
will be leaving the group by 
mutual agreement at the end 
of the month. Fraser was also 
a main board director of 
Ocean, the freight, environ- 
mental and marine services 
group which has continued to 
disappoint the City. 

John Allan, who became 
chief exe c utive of the group 
last month, said yesterday 
that he would be taking a per- 
sonal role in McGregor Cory 
as executive chairman. Signifi- 
cant investments had been 
mad* iii the business, and he 
aimed to accelerate the rate of 
return to shareholders. 

Fraser, whose total emolu- 
ments last year were 01&000, 
was on a three-year rolling 
contract Compensation is still 
being discussed. 

Allan said there were no 
plans to change any other 
executive directors at the 
moment 

■ Saul Lanyado has joined 
GEC-Marconi as managing 
diragtnr of the company’s avi- 
onics division from STC sub- 
marine systems where he bad 


been manag in g director for six 
years. Before that Lanyado had 
worked for Marconi as a direc- 
tor of the instruments division 
in Scotland; he replaces Derek 
Dickinson, who has moved to 
GEC-Marconi’s Stanmore, Mid- 
dlesex, headquarters. Lanyado 
will report to Roy Gardner, 

manag in g riiTBrfaj r of GEC-Mar- 
coni and a main board director 
of GEC. 

GEC-Marconi avionics 
employs about 9,000 people at 
sites in Rochester. Edinburgh 
and Basildon. The company 
has a t u rnover of about £500m 
a year and manufactures 
radars, flight control systems, 
displays and power systems. 

Lanyado holds a first class 
BSc in electrical engineering 
from London University and a 
PhD in computer science from 
Manchester. 

■ John Hart, formerly 
vice-president Europe for 
Wran gler , has been appointed 
vice-president marketing and 
business development for 
REEBOK INTERNATIONAL. 

■ John Tan glands , formerly 
finance director of Edip6e 
Blinds, has been appo inted 
finance dir ector of BRITISH 
POLYTHENE INDUSTRIES. 

■ Paul Watkinson, group 
personnel director, has been 
appointed to the BRITISH 
RAILWAYS Board. 


Bodies politic 

Sir Paul Nicholson, chairman 
of Sunderland-based Vaux 
Group, is to become (he first 
President of the North East 
Chamber of Commerce. 

The Chamber, one of the 
country's largest with 3,000 
member companies between 
the Scottish bonders and North 
Yorkshire, hmwi into being on 
January 3 - the result of a 
merger of three chambers. 

One of the region’s leading 
businessmen. Sir Paul is a 
director of the Northern Devel- 
opment Company, Northern 
Electric and Tyne Tees Televi- 
sion, and nhalpnan of the Tyne 

and Wear Development Corpo- 
ration. He is a former chair- 
man of the CBI’s northern 
region and of Northern Inves- 
tors. 

■ Kenneth Caldwell, who has 
spent the past eight years 
working for Voluntary Services 
Overseas, has been ap point ed 
chief executive of SUSSEX 
Training and Enterprise 
Council. Caldwell, 89. whose 
early career was spent in 

ma nufacturi ng indns try, 

succeeds Malcolm Allen who 
has been appointed chief 
executive of Kent Tec. 

■ Simon Bnlam the owner of 
EJL Ransom & Co in 
Edinburgh, has been e lecte d 
president of the CHARTERED 
INSURANCE INSTITUTE. 

■ Stephen Tfc nlvm chairman nf 
fha pentland Group, h«s been 
appointed world president of 
the TEXTILE INSTITUTE. 

■ Roy Whhhear, formerly of 

ftww ng H Mnntag ii and 

recently secretary general of 
the Association far Child 
Psychology and Psychiatry, 
has become director of financ e 
and resources at the CANCER 
RESEARCH CAMPAIGN. 

■ Jonathan Fry (below), group 
chief executive of Bunnah 
CastrOl, iS appointed chan-man 

of the Asia Pacific Advisory 
Committee being set up by the 
ROYAL INSTITUTE OF 
INTERNATIONAL AFFAIRS. 





Your 

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FT 


CONTRACTS & TENDERS 


FINANCIAL 11 MLS 

C<>nh i\ 7?c o 


WORLD ELECTRICITY 


London - 7 & 8 November 1994 

This annual meeting - the eighth in a successful series arranged jointly with. Power in 
Europe - will examine how electricity utilities around the world are responding to a 
more competitive environment. 

ISSUES INCLUDE: 

• California’s Plans for Deregulation 

• Stimulating Greater Competition in Europe’s Electricity Markets 

• Cross-Border Purchasing of Electricity 

• The Nuclear Dilemma in Eastern Europe 

• New Fuels, New Technologies in Power Generation 


SPEAKERS INCLUDE: 

• Commissioner Norman D Shumway 
California Public Utilities Commission 

• Mr Hans Lundgren 
Adviser 
Vattenfall AB 

• Mr Ian Brown 

Senior Adviser 

Hungary-EC Energy Centre 


Mr Richard Coldwell 

Head of Government & Overseas Relations 

The National Grid Company pic 

Mr Michael Brown 

Secretary 

Cogen Europe 

Dr Gregory J Yurek 

President & Chief Executive Officer 

American Superconductor Corporation 


Financial Times Conferences in association with FT Newsletter Power in Europe 

For information about Business Development opportunities please contact Lynette Northey on 071 814 9770. 


WORLD ELECTRICITY 

Please tick relevant boxes. 

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□ Information on the FT Newsletter “Power in Europe". 

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Tel~... 


.-Post Code. 






KfMArcHkoDlqMby «•***, ftr™UBW *■>■«» 







.The Lebanese Company for the. Development and Reconstruction 


of the Beirut Central District, SAL ‘ •* 

* ►* ’ * . ' -T ■ • ♦. 

Praqiialific^tjon of contractors to design and build 

sea-frpnt defenses. in the Beirut Central District ! 


■ Established on ; T a hy.’5' \ 1994, sthe 
Lebanese GoftifiSny far 'the Development and 
ftoqorfttruction of the BbirijifCentnt! District; 
SOtiDERE, is, in 'charge of financing and 
;. executihg infrastructure and marine works 
'within die-. rtit/ 'center of lieirut and of 
.-developing this area. Spreading out ewerjifr 
million sqbare meters. . 


t . 


providing ah ' unobstructed view of the, sea. 
A marina Will he constructed at each end of 
the sea-defense structures. 

.* ■*' ‘ 

SOUDERE, wishes to develop a 
bidders' list far the Design and Construction 
of the sea-protection works highlighted 
above, international contractors who -have 
already executed similar: works, and who hove 
access to the appropriate type of equipment, 
are. invited to submit a pre-qualification 
document to {he' address ■ below, to 'be 
received' not later than November 1 5, 1 994. 


- -ic 


- 1 ■ • - - - ’ Yl 

, - • , - Contractors , who have . . .already 
submitted - J an Expression •*' of Interest 
document for these works do not need to 
take furthenaction, unless they wish to add to 


Based on the information received 


-. SOUDERE will . also' treat a dumping 

* site of 25_0jQ00 square meters, ‘created on.the 
waterfront, daring the war'm the absence of 

‘an alternative -site far refuse. Disfiguring* the 
^fagade of the efty, this rerfoe local and. 

■ regional 6nyjrcHT?hehtaJ .problem, will be 

* treated, transformed, rand. ’ expanded ' into 
^-development ... and ,, pubfle ' land?-* - of 

* approximajeefy . 600,000 square *meters to 
.indtide a Vtist greei parka seaside^oulevariJ. o* tft® information already provided, 
tree-fined , -promenades, '"and residential* 

coiiuiwxjaJ^nd-officq. spaces. ^ \y-. ;* - from contractors’, SOUDERE will establish a 

- The redahnea land wHl‘ be protected short list for mvitation to tender. - * - 

-.•-against ‘.stoops,, by sea-front ■ ’defense ‘ “ -■ . ' 

structures extending o^er a distance of more^ 

* than i 000 metere.THe structures form part of. "* 

: a dcfable line of defense.cqn^ rising a- raw of ’ 
submerge^- caissons, some ‘reaching 19000 

, tons each, a lagoon and* a seriesSof quays' and 
. • promenade* The caissons will be in water 

- depths! of abbut 20. ringers with a crest' level 4 * Riyadh dSolh Street 

at jr 0.5 meters *sa that they Will f ■ . . Industry and labor Bank Building 

■ * remain invisible from’ the shoreline, * * ■ RQBcpc 1 19453 -■ Beirut - Lebanon 

' . ' :> if' 


Address: . 

The Lebanese Company for ^ 
the Development and Reconstruction 
of -Beirut Central District, SAL 
Development Division - 


>? 





SOLID ERE 


u 


> {for necessary documents and fordiar Inform a tion, pleu»*contact I mad DANA, 
- m 6 ^ 6 ^ 28 / Cetkibr f( 2 l 2 )* 47 B 3915 . Fxx. 646133 / Catofar 1 ( 212)444 8165 


I 



12 



i 


FINANCIAL TIMES THURSDAY OCTOBER 37 1 


MANAGEMENT: MARKETING AND ADVERTISING 



Top prizes; Agency WCRS wen the oueraB award for its BMW ads; aid Bertie Bogle Hegarty placed ftat In the new launches category tor Rs Bodcflngtons campaign 

The hunt for a classic 

Diane Summers on this year’s UK Advertising Effectiveness Awards 


Audit 

rivals 

contest 

T he normally peaceful 
world of auditing maga- 
zine circulations, the key 
currency for advertising, is 
being disturbed by the first stir- 
rings of serious competition. 

BPA International, the OS- 
based body responsible for 
auditing the circulations of 
more than 1,600 magazines, 
mostly in the OS, is increasingly 
moving into Europe, and the UK 
in particular. 

The organisation already 
serves 67 magazines in the OK 
but has now set up a European 
sales and marketing office, 
much to the irritation of the 
official British audit body the 
Andit Bureau of Circulations. 
Both BPA and the ABC are non- 
profit making bodies. 

Joseph Foley, BPA’s interna- 
tional director, believes he is 
bringing extra choice and 
higher standards of verification 
to the UK marketplace, at a time 1 
when publications are becoming 
mare international. 

BPA says it provides detailed 1 
Information on who a magazine 
goes to in terms of job title, 
something that is not part of the 
standard ABC andit 
John Beadell, chief executive 
of the ABC, says his procedures 
are among the most stringent in 
the world, certainly comparable 
to those of the BPA and that 
more detailed information was 
introduced with the ABC Profile 
in 1991. 

“There's not going to be a 
war. It would damage tbe integ- 
rity of circulation audits,” he 
says. 

Organisations such as the 
Periodical Publishers Associa- 
tion believe advertisers, agen- 
cies and publishers want a sin- 
gle currency for comparing 
magazine circulation in the UK 
and it should be the ABC. 

“Two competing currencies in 
the same marketplace must 
devalue both through undermin- 
ing confidence,” Ian Locks, chief 
executive of tbe PPA, says. 

He fears the next stage In the 
competition will mean players 
having to boy both sets of data 
- thereby doubling the cost 

Raymond Snoddy 


A new advertising campaign 
is launched and, as a 
result, sales surge. Barely 
is life that simple, as this 
year's winning entries for the UK's 
Advertising Effectiveness Awards, 
unveiled on Tuesday, demonstrate. 

The awards, unlike the thousands 
of other trophies the advertising 
industry loves to bestow on itself 
each year, are not for creative excel- 
lence, artistic merit brilliance of 
execution or originality of concept 
Instead, the biennial awards, 
organised by the Institute of Practi- 
tioners in Advertising, are given for 
case histories, often laden with dry 
statistics, which succeed in demon- 
strating how an advertising cam- 
paign has contributed to a product 
or service's commercial success. 

This year’s overall winner - Tim 
Broadbent at WCRS, for his study of 
the agency’s advertising for BMW 
over the last 15 years - illustrates 
the complexity of evaluating effec- 
tiveness when there is no “big 
bang” of a new campaign. 

As Broadbent points out; “New 
advertising can give a sudden 
twitch to the needles of research 
dials, which makes It easier to dem- 
onstrate how changes in consumer 
attitudes coincide with changes In 
sales." By contrast his job was to 
convince the judges that consis- 
tency of message over time was the 
essence of the agency’s success in 
Its advertising for BMW. 


When BMW (GB) was established 
in 1979 to take over from the previ- 
ous distributor, it set objectives of 

m aintainin g high profit marg ins 
while trebling sales by 1990 from 
13,000 new cars a year to 40,000. 
These objectives have been 
achieved and BMW in Britain has 
outperformed the market, thanks 
partly, argues Broadbent. to 
WCRS’s “ultimate driving machine’' 
campaign which has ran through- 
out the whole period. 

By using comparisons with 
BMW’s performance in other Euro- 
pean markets, he picks off factors 
such as price, distribution and prod- 
uct improvements which could have 
accounted for BMW’s outstanding 
sales growth in Britain. Broadbent s 
calculation is that advertising 
expenditure of £91m since 1979 has 
helped to generate approximately 
£3bn in extra sales during that time. 
“The value of BMW’s brand-build- 
ing campaign seems beyond ques- 
tion." he concludes. 

The essence of the advertising 
has been a consistent tone of voice, 
with the car as the master of each 
ad. Says the case study: “There are 
tow humans or signs of humans, 
because humanity can suggest falli- 
bility, whereas BMWs are shown as 
precise, cold, technical icons with 
jewel-like perfection." There are no 
contrivances “to add superficial 
glamour, such as stately homes, 
sunsets or glamorous blondes". 


It is difficult to imagine an ything 
further from the BMW world than. 
Boddingtons, the beer billed as the 
“cream of Manchester”. The case 
study of Boddingtons' advertising, 
by Guy Murphy at agency Bartle 
Bogle Hegarty, won the category for 
products or services which are new, 
or have no significant history of 
advertising. 

When Whitbread bought the Bod- 
dingtons brewery in Manchester in 
1989 It was faced with the task of 
transforming the bitter into a 
national brand without alienating 
its existing regional drinkers. 
Exploiting Its attribute of being 
creamy-looking when poured, BBH 
focused on the product, rather than 
the user - a more common tactic in 
the advertising of bitter brands. The 
agency also avoided the traps of 
regional stereotyping. The cam- 
paign that was developed strongly 
linked product appearance to prod- 
uct delivery ~ the creamy appear- 
ance to smooth taste. 

The agency rejected television 
advertising to launch the campaign, 
deciding, instead, on targeted press 
advertising which would reach 
“premium" beer drinkers. The out- 
side back covers of magazines, in 
particular, were used to build up 
awareness. It was only after two 
years that TV advertising was 
added, as Whitbread gradually built 
up its advertising spending on Bod- 
dingtons from £1.8m in 1991 i:o 


£4.5m last year. 

The brand, which includes 
Canned Boddingtons. as well as 
Boddingtons Bitter, has grown 
three-fold since its acquisition and 
is now the UK's fourth largest bitter 
brand. Like the BMW case history, 
the Boddingtons study works 
through the factors which have had 
an effect on the brand's growth and 
attempts to single out and value 
advertising’s contribution. 

This value emerges as 6.1 per cent 
of total sales, which Whitbread con- 
firms more than clears the cost of 
the campaign in the short term, 
while laying the foundations for the 
long-term success of the brand. 

Chris Baker, planning director of 
agency Bainsfair Sharkey Trott, 
who was convenor of the judges, 
says the BMW and Boddingtons 
campaigns were “major marketing 
successes in which the decisive role 
of advertising has been clearly dem- 
onstrated" and both were character- 
ised by a high degree of originality 
in strategy and execution. 

BMW won the day because of its 
“sustained success and consistent 
implementation" over 15 years, said 
Baker. The cream of Manchester 
win have to wait until the end of 
the millennium to see if it has 
achieved classic advertising status. 

A pull-out with all the award win- 
ning case studies was published with 
yesterday's FT. 


Advertisers neglect the reality of 
home life, says Matthew Batstone 

Men on the 

on norm a rV&t cVlplf 


T he reality is a nation with 
the highest divorce rate 
in the EU, 31 per cent of 
births outside marriage 
and a fifth of children raised by 
single parents. 

Yet despite the fact that men 
are forced to run their domestic 
affairs as never before, images of 
smiling, 30-something British 
housewives still dominate 
advertising for grocery products. 

Men living alone represent 11 
per cent of UK households, and 
even within the family the 
conventional role of woman as 
housewife is being eroded. 

While women continue to do 
most of the household tasks, men. 
no longer escape the chores as 
they used to, according to a 
survey carried out by the Henley 
Centre for the supermarket group 
Asda. Men shop for an avenge of 
two and a half hours a week, 
against an average of four tor 
women. 

The Henley survey suggests that 
38 per cent of men claim to have 
personally selected more than half 
of the items they had bought from 
supermarkets. Twenty six per cent 
of men claim actually to enjoy 
shopping and a stereotype-defying 
46 per cent say that cooking is a 
real pleasure. 

When men shop they are more 
likely to buy brands and spend on 
average 5 per cent more than their 
female counterparts - on the face 
of it a manufacturer's dream. 

Donald Kerr, planning director 
at the advertising agency J. 

Walter Thompson, believes that 
an opportunity is being missed 
because “conventional thinking 
views women as tbe housewife. 
Many companies still see women 
in their pre-new man role”. He 
attributes this partly to attitudes 
created by the recession, which 
have left a culture of caution 
among Britain's marketing 
community. But his 
contention is that “many 
marketers and advertising 
executives don't take their home 
to work". 

If they remembered the reality 
of their own homes while wearing 
their suits, many of Britain’s 
brands could have a very different 
orientation. 

Such suggestions are dismissed 


by Jerry Wright, marketing 
director at Lever Brothers, a 
company with a large portfolio of 
grocery brands. 

“The bulk of our brands are 
targeted at women, who still do 
the bulk of shopping," he says, 
“but we do pick up a lot of men 
with our advertising." 

Wright concedes, however, that 
men represent a valuable 
franchise for grocery 
manufacturers. “I think there 
is a feeling that men ore more 
likely to buy brands, because 
they have less knowledge and feel 
less sure of themselves than 
women.” 

Wrigjbt believes men can be 
victims of a kind of commercial 
Oedipus complex. "They are often 
tempted to buy the brands their 
mother used to use," he says. 

Even so Lever Brothers has not 
tried to develop a niche. 

When men shop 
they spend on 
average 5 per cent 
more than their 
female counterparts 

male-oriented grocery brand and 
the company has not even carried 
out any specific research into this 
opportunity. “The needs of men as 
consumers of washing powder, for 
instance, are not distinct enough," 
says Wright “although you might 
argue that young men would be 
interested in a heavy soiling 
product, because they play more 
sport." 

Wright believes most grocery 
brands are sufficiently accessible 
to men. “Most brands in this 
category don't say too much about 
you as a person, so buying one 
with a feminine image would not 
give the majority of men a 
problem." 

Lever Brothers’ rival Procter 
and Gamble is currently screening 
an advertisement showing a man 
cleaning the kitchen floor for his 
wife. A sign perhaps that 
advertisers must increasingly 
reflect life as it is, rather than 
recreating the kind of scenes that 
were looking dated even in the 
1950s. 




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*• 

















financial times Thursday 


OCTOBER 27 1994 


13 


★ 


ARTS 


Cinema/Nfgel Andrews 

Goodbye, Mr French Fries 



the next world? - as eerie as 


F ew in this isiw win 
have restrained a gig. 
gle at the vision of 
British boarding 
school life presented in the 
recent Smoking/No Smoking. 
Alain One (Resnais) hijacked 
Alan Two (Ayckbourn) to give 
ns what seemed a cross 
between P.G. Wodehouse and 
the wilder scenic fancies of 
Fragonard. For non-Britons, it 
was clear. Idiocy plus idyll 
equals the public school 
So naturally we turn to The 
Browning Version for realism. 
Produced by Ridley Scott and 
directed by Mike Figgis 
( Stormy Monday, Mr Jones), 
this stars Albert Finney as the 
unloved, dicky-hearted eiaa^ 
teacher of Terence Rattigan’s 
stage play. AH these chaps are 
British, so we should be safe. 

But wait Teh minutes into 
this tale of Andrew Crocker- 
Harris and the heartless, 
unpensioned retirement forced 
on him by his school end we 
are hankering for the docu- 
mentary exactitudes of Res- 
nais. This tweedy, stilted place 
see ms even more unreal than 
Resnais’ Franglais-flur-mer Col- 
lege. 

An hour hi - after we learn 
that the hero's wife (Greta 
Scacchi) is canoodling with the 
American chemistry teacher 
(Matthew Modine), who 
been hired on an exchange 
basis with Hollywood, and that 
Greta will never show Albert 
as much love as does the one 
grateful pupD who gives him 
the eponymous Aeschylus 
translation as a parting gift - 
and we fed that some serious 
surrealism is setting in. 

AH these odd Caribbean com- 
plexions. For this is a Para- 
mount-prod need film and no 
American (the studio's think- 
ing probably goes) will believe 
that public schools are actually 
filled with pole, spotty people 
who look as if they spent their 
formative years in a badger 

t unnel. 

And then time is that odd 
cricket match in which the 
fielders cry “HowzatT when 
someone is bowled. And then 
there is that orornr anltgri end- 
ing when the whole school 
rises to applaud Crocker-Fin- 
ney’s farewell speech as Crock- 
er-Scacchi stands at the rear of 
the hall shedding - yes! - a 
silent tear as the music by 
Mark Isham (A River Runs 


Through It) swells. 

Unbelievabte. In all senses. 
The only actor to stem the tide 
of implausibllity la Albert Fin- 
ney, bravely reaching out for 
moments of truth and uoezag- 
gerated poignancy from his 
toby-jug frame. 

The rest of the film wxon- 
gheadecQy updated from Ratti- 
gan's period-perfect original is 
made for the age of synthe- 
sised, fast-food foreign culture 
tasting. Goodbye, Mr French 
Fries. 


THE BROWNING 
VERSION (15) 
Mike Figgis 


RAPA NUI (12) 

Kevin Reynolds 


FEAR OF A BLACK HAT 
(15) 

Rusty Cnndieff 


MAJOR LEAGUE H (PG) 
David S. Ward 


LONDON FILM 
FESTIVAL 


Rapa Nui, a South Seas epic 
by Kevin Reynolds (director of 
the Kevin Costner Robin Hood, 
Prince of Thieves) speculates 
on how Easter Island may have 
become a treeless wilderness 
filled with statues. 

In the late 17th century, the 
film hazards, the Shot Ears 
tribe fought the Long Ears 
after the UBa' had spent many 
years forcing the SEs to build 
those rock figures topped with 
weird visages. Palms were fel- 
led to provide scaffolding and 
rolling tracks. Food ran out 
Natives got restiess. 

Things came to a head dur- 
ing the annual Bxr dman race, 
in which Noro (Jasotn Scott 
Lee, Long Ears) vied with 
Make (Esal Morales, Short 
Ears) to be the first man to 
swrm back from the neighbour- 
ing island and shin up the 
sheer efiffa wi t h an wnhrnfcen 
egg strapped to his forehead. 

The victor of this early, 


remarkable jeu sans Jmnt&res 

- we keep expecting the late 
Eddie Waring to burst out with 
"And a fine move there by the 
Long Eared team ...” - will 
win both power and the band 
of the beautiful Ramana (San- 
drrne Bolt). She has been in 
the Cave of the Virgins for six 
months, though spoiling the 
sacrificial effort by emerging 
pregnant 

Meanwhile the island’s 
absentminded ruler (Bru 
Potaka Dewes) frets over his 
multiplyizig statues - “One day 
well get these right," he waves 

- and the evfl high priest 


(George Henare) keeps sending 
islanders to a better world by 
bitting them with a paddle. 

I shouldn’t have, hut when 
not laughing I loved this film. 
Knee-deep in the ridiculous, 
Rapa Nui also keeps clawing 
its way to the sublime. I wish I 
had tape-recorded the press 
show reaction. We all began by 
giggling into our handouts. By 
the dose you could hear a pin 
drop. 

By the close the plot has 
become so surreal that It is 
worthy of Werner Herzog. The 
coda involves a Journey to a 
magically whitened island - 


anything in Aguirre or Heart 
Of Glass. It crowns a movie 
whose visual spectacle - it was 
actually shot an Easter Island. 
- keeps transcending its 
bathetic dialogue and pained 
plot ingenuities. And even 
those are not so pained as to 
have stopped 80 critics tnnhfng 
to the edges of their seats as 
the Birdman race entered its 
majestic delirium of seas, 

rocks, sharks and chfb. 

* 

The director, writer and cast of 
Fear Qf A Black Bat - broadly 
one and the same person. 


Rusty Cundieff - should be 
despatched to Rapa Nui imme- 
diately. It would be punish- 
ment for giving us 88 
of rapper phooey: a dismal 
spoof documentary in the 9pir 
rial Tap tradition in which 
Cundieff and pals, as the hand 
NWH (Niggaz With Hats), 
strum chords and crack jokes 
with all the elan of street busk- 
ers in Hell 

Major League n is worse. 
Charlie Sheen. Tom Berenger 
and the rest are back for fun 
and games in the world of 
baseball Since this sport is 
more obscure to British audi- 


ences even than the Great 
Frjxtfcr island Birdman Handi- 
cap, we are completely at sea 
even when we are on dry laud. 

In such a week you will wel- 
come alternative choices. But 
can one have too much choice? 
The 38th London Film Festival 
begins next Thursday and once 
more offers a powerful argu- 
ment for owning several sets of 
eyes and ears and an ability to 
sit in three cinemas at once. 

There are almost 200 feature 
films this year, but I have run 
out of ideas for being rude 
about the LFFs size. If London 
wants its main movie event to 

be an wyHarlminating qhfl rea 

let it. If it wants to fill up thea- 
tres and silt up minds with the 
detritus of the year’s other fes- 
tivals - what on earth are films 
like JM Menzel’s feeble Adven- 
tures Of Private Ivan Chonkbi 
and Mario Brenta's catatonic 
Barbabo Of The Mountains 
doing here? - let It 

As critics we can only stand 
between yon and the National 
Film Theatre, offering some 
aesthetic point duty as you 
swarm towards the celluloid. 

Here are my Top Nine. Atom 
Egoyan’s Exotica: a mazy 
mind-thriller about •**»* , mem- 
ory and identity. Ang Lee’s Eat 
Drink Man Woman: a ‘Three 
Sisters” with food, funny and 
poignant, from the maker of A 
Wedding Banquet Peter Jack- 
son’s Heavenly Creatures: art- 
fully OTT in its recreation of a 
New Zealand murder scandal 
Nanni More tti's Dear Diary. 
artfully DTT in its scenes from 
the life of the wry director/ 
comedian (Rome’s answer to 
Woody Allen). 

Louis Malle's Uncle Vanya 
On 42nd Street: eavesdropping 
on a heart-stopping readtogfre- 
hearsal by a Broadway stage 
company. Anna Campion’s 
Loaded: fine psycho-gothic 
from the sister of Jane {The 
Piano). Mika Kaunsmaki's 
Tigrero: inspired docu(mock- 
u?)mentary about filmmaking 
veteran Sam Fuller. Rith 
Panh’s Rice People : Hardy es- 
que tale of the land from Cam- 
bodia. Tsai Mlng-Liang’s Vive 
L'Amour. Venice Golden lion- 
winning puzzle picture, witty 
and erotic, about abstracted 
lives in semi-abstract settings. 

AH this and Kenneth Bran- 
agh’s Frankenstein to open the 
event. Book now while seats 
and stamina last. 


Theatre/AIastalr Macaulay 

The Prime of 
Miss Jean Brodie 


Recital/Adrian Jack 

Occasion to celebrate 


_ A nd she Is mfeefor Ufe.”_ 
We do not need to be “of 

A m an T pTprftRgifmqhlp age" 

- we do not even need to be 
female - to recognise that, in 
Miss Jean Brodie, Muriel Spark 
created a mythic heroine, 
absurd and disturbing, who 
embodies all the inspiring yet 
misguided teachers whose 
attention at school we once 
tried to win. 

On the one band, this Edin- 
burgh schoolteacher enjoying 
her prime in the 1980s, is an 
icon as camp and transparent 
and quotewartby as E.F. Ben- 
son’s Lucia - whom she so 
closely resembles, with her lin- 
guistic and cultural preten- 
sions. On the other, she is a 
pathetic martyr - sacrificing 
adult love for the sake of her 
teaching And "her girls”, intox- 
icating them with misplaced 
Romanticism, and wilfully 
m«Mng false predictions of the 
glorious futures ahead of them. 
What are those futures but pro- 
jections of the lives she herself 
might have led? 

Between these two extremes. 
Miss Brodie is “loveable” - a 
word that acquires crucial 
importance at the end of the 
play. Her girls love her, and 
two of her male colleagues are 
In love with her. She herself 


talks repeatedly of the impor- 
tance of love. Yet love is what 
she has placed on the altar of 
teaching. And it is in her pre- 
diction that Jenny will be a 
great lover, a DJL Lawrence 
heroine, that she most obvi- 
ously tries to make her stu- 
dents live her life by proxy. 
She errs more criminally, how- 
ever, In stuffing fesdstic pro- 
paganda into the girls’ heads: 
which leads to the death of 
poor, silly Mary MacGregor. 

Indeed, her only true predic- 
tion is that Sandy will be a 
spy. Sandy, the cleverest gbi 
in the class, becomes the Judas 
among the Brodie girls, 
because she sees that Miss Bro- 
die has been betraying them. 
This is one of the ironies in 
which Spark’s tale abounds. 
The play which Jay Presson 
Allen made of the book catches 
many of them, though it goes 
overboard at first on the Bro- 
die clicMs and campery. 


The role of the heroine was a 
vehicle in the 1960s for 
Vanessa Redgrave (onstage) 
and Maggie Smith (on film); 
and in the 1970s Geraldine 
McEwan starred in an excel- 
lent TV version. 

I t was time for a new Miss 
Jean Brodie, and it was 
possible that Patricia 
Hodge might be good in the 
role. She has the bite, the ele- 
gance, the element of frigidity. 
She is, however, neither love- 
able nor intoxicating: And, 
with Alan Strachan’s direction, 
her performance stays entirely 
on the surface. 

I do not mean that she 
makes overmuch of the role’s 
camp bravado, but simply that 
she never realty reveals a ner- 
vous system. There are psycho- 
sexual connections between 
Miss Brodie’s repressed love 
and everything most character- 
istic about her teaching, but 


here no one helps ns see them 
rmtf i the words spell them out 
late in the proceedings. Bodge 
has her moments, especially 
when speaking or behaving 
quietly; but moments do not 
make a role. 

The most persuasive perfor- 
mance is given tor David Yel- 
land as Teddy Lloyd, the mar- 
ried art master whom she 
loved and who Loves her, 
though Strachan has let Yet 
l and be too dour. lMfth Macar- 
thnr, as the headmistress Miss 
Mackay, lacks gravitas, and 
Simon Scott, as the music 
teacher Mr Lowther, gives the 
most superficial performance 
of aR The brief 30-years-later 
semes, which add such reso- 
nance to the story, are tepidly 
played here. Jackie Morrison 
as Sandy gives a very fair 
account of a tricky role. 

But Strachan’s direction fafla 
most obviously in his handling 
cf schoolgirl life. He makes it a 
kind of Mallory Towers; 
whereas the life of the Brodie 
girls, however funny, should 
be psychologically sharp and 
alarmingly real mir« Brodie 
needed to be revived, but here 
ghp and her world are too «fe, 
too light, too neat 


At the Strand Theatre, WC2 


J oanna Mac&egor devised a 
beautifully balanced recital 
programme for the Wig- 
more International Piano 
Season on Saturday and some- 
how charmed the hall’s notori- 
ously lusty Steinway into gen- 
tle manners. Sceptics might 
say she did not venture any- 
thing new, right down to the 
Thelonious Monk encore, 
Round Midnight, on which die 
lavished as wrarii colour as on 
Ravel's Mfroirs before the 
interval Still perhaps this 
occasion was something to cel- 
ebrate rather than an opportu- 
nity to experiment 
She began with Bach’s 
French Suite Number Five in 
G major - a fluent perfor- 
mance With lots Of li g h t and 
shade , and abundant effortless 
or namen ts in the opening AHe- 
irianda Each movement sa n g, 
though she took the Couraute 
very East The Loure, with its 
rhythmic intricacies, slithered 
along naturally, «nd the final 
Gigue raced at a speed which 
was exciting because it was so 
neatly controlled. 


In the first of Ravel's Miroirs 
- Noctuelles - she enjoyed 
caressing the most velvety 
sonorities, and in the second - 
Oiseaux tristes - she captured 
a vivid sense of tropical torpor. 
Une barque sur l'ocfian and 
Alborada del Gradoso brought 
out her sense of San and flam- 
boyance before the quiescent, 
dusky tolling of the final piece, 
la vallfie des cloches. 

MacGregor is never precious, 
and even though Schumann 
once said he hail put on big 
“frilly dress” to compose Kin- 
derszenen, she took a straight- 
forward approach to the cycle. 
That was all to the good - after 
aR, Schumann told his pianist 
wife Clara she must forget she 
was a performer when playing 
foe pieces - but if the title of 
Glftekes genog implies no 
extremes of feeling, MacGregor 
left it seeming rather ordinary. 
On the other hand, her free- 
dom with the pulse in Kind im 
Bmarhlirmniem made the pro- 
cess of dropping true to He, 
but unnecessarily elaborate. 

Seven of Chick Corea’s Chil- 


dren’s Songs made a nice 
sequel as well as a contrast 
Number Four, with its pHant, 
melancholy tune over rocking 
triplets, seemed tailored to suit 
MacGregor's sleds and limpid 
style, while the tangy harmo- 
nies and propulsive rhythms of 
Number Twenty sounded 
closer to Corea’s jazz-rock 

TTlUSifl. 

Which led neatly to MacGre- 
gor's more demanding final 
choice, the imposing Sonata 
which Bartok wrote in 1926. 
The rugged fistfuls of notes 
an d stamping rhythms In the 
first movement recall the 
mean, but not so lean. First 
Piano Concerto of the same 
vintage. The slow middle 
movement is spare and grim, 
while the finale becomes a 
frenzied dervish dance. 

It is possible to imagine per- 
formances which would have 
shaped the music’s angular 
features more acutely than 
MacGregor’s, but still it had 
plenty of zest and probably 
enough harshness for most 
people. 


Concert 

Tireless 
Solti 
fires 
up LSO 

N ot everybody is joining 
in the London Sym- 
phony Orchestra’s 
birthday celebrations. Re- 
flecting on last year’s bruising 
battle for cash, the managing 
director of a rival London 
orchestra recently observed 
sourly that only the ISO kept 
its mouth shut when the time 
came for the orchestras to 
stand up for fair play. 

Out of range of the firing 
line, the LSO had clearly 
decided its own interests were 
best served by keeping its head 
down. Alone of the London 
orchestras, it had not been 
required to present itself as a 
competitor for funds, to effect 
judged a winner before battle 
commenced. 

The LSO is certainly enter- 
ing its 90th birthday season in 
fine fettle. Unlike its London 
rivals, It is sot in debt, has a 
secure home, and Is in a posi- 
tion to plan for its future with 
confidence. 

On Tuesday it presented a 
gala concert to benefit the LSO 
Millennium Fund (such hubris, 
when the other Loudon orches- 
tras will be glad to survive as 
for as the millennium at all!). 
The event was also part of the 
“Great Orchestras of the 
World” series at the Barbican, 
which seems rather a cheat 
when the purpose of the event 
is to promote visiting foreign 
orchestras, but perhaps a point 
was being wmdp there, too. 

The LSO likes to see itself on 
a par with the leading orches- 
tras of Europe and the US. 
Tuesday's concert - an all- 
Brahms programme under 
Georg Solti - was not the best 
evidence to support that claim, 
but at least the playing was 
strong and vital 
Ironically, the main competi- 
tion recently in Brahms' First 
Symphony was at the Proms 
with the Dresden StaatskapeUe 
under Cohn Davis, the ISO's 
own music director elect, who 
performed the music with the 
utmost refinement 
In his LSO appearances over 
the past few years Davis has 
started to instil some of that 
well-bred finesse, hut Solti 
clearly prefers the LSO as it 
used to be. His Brahms was a 
high-octane drive down the 
symphonic fast lane, arteries 
pumping with tension, foot 
down on the volume control 
It is astonishing that Solti in 
his 80s still has this kind of 
energy. As the last movement 
powered towards its conclu- 
sion, he was bounding from 
side to side of the podium, 
arms jerking violently through 
foe air as thrm gh whipping the 
final chords info place. 

There was limited scope for 
the autumnal Brahms to show 
his face, either here or in the 
Violin Concerto. Itzhak Perl- 
man's view of the solo part as 
an outpouring of lyricism, 
unfailingly sweet to tone and 
generous with portamentos, 
really presupposes a different 
kind of performance. 

Apparently tireless, Solti 
ended the evening by throwing 
in the overture to Rossini’s U 
barbiere di Siviglia as an 
encore. Only a few years and 
he will be enjoying a 90th 
birthday season himself 

Richard Faixman 


Sponsored by JVC (UK) Ltd. 



■ ATHENS 

Mogaron Tonight Wolfgang 
GOnnenweto conducts a Mozart 
choral and orchestral programme. 
Tues: Arturo Sandoval jazz concert. 
Wed: Janos Starker ceBo recital 
New 4: Anna Tomowa-Stotow sings 
operatic arias (01-728 2333/01-722 
5511) 


■ BOLOGNA 

Teetro Co mmunMe Sat, Sun: Oahu 
Inbat conducts Orchestra of the 
Taatrb CommpnaJe In a symphonic 
pro gram me. The opera season 
opens on Nbv 26 with a new 
production of Rossini's H.turco In 

ita»8(Notetephone bookings. ■ 
Information: 051-529999) 


■ LONDON 

THEATRE 

• The Stating Process: after much 
speculation about whether he 'woJd 
direct a new play at the Royal Court, 
artistic director Stephen Daidry 
plumps for an almost unknown 
writer rather than one from the safe 


stable of talent associated with the 
Court His choice of Meredith Oates 
may prove to be visionary: her play 
The Neighbor received unanimous 
praise earlier this year, and her new 
work is a black comedy on the 
creative process in the publishing 
world. Previews start tonight, Press 
night next Wed (Royal Court 
071-730 1745) 

• Three Tafl Women: Edward 
Albee’s critically-aatekned Pulitzer 
Award-winning play stare Maggie 
Smith, Frances de la Tour and 
Anastasia ftiBe as the three tail 
women - ah ageing dowager, her 
carer and her lawyer. The play is an 
examination of different stages in 
the women's lives and of the young 
man, the dowager’s son, who has 
affected them afl. Directed by 
Anthony Page. Previews begin 
tomorrow, opens on Nov 15 
(Wyndham’s 071-369 1736) 

• The Prime of Miss Jean Brodie: 
Patricia Hodge takes on the rate of 
the formidable schoolteacher whose 
mix at romance and wBfutness 
Inspires her pupils. Jay Presson 
Alton's stage version of Muriel 
Spark’s novel has just opened in its 
first major London revival since the 
original production of 1968 (Strand 
071-9908800) 

• Romeo and Juliet: DusseWorf 

Schauspieffiaus comes to London 

next week for four performances of 
Shakespeare's ptay, directed by 
Karin Beier (Nov 2-5). This is foe first 
in a series of International 
Shakespeare wants at foe Barbican, 
Including an adaptation of King leer 
from Japan and Peter SeBars' 

Chicago production of The Merchant 

of Venice (Barbican 071-638 8891) 

• The Sisters Rosenswefg: 

Michael BJakemore directs Maureen 


Lipman, Janet Suzman and Lynda 
Bellingham in Wendy Wassersteto’s 
Broadway hit comedy about three 
American Jewish sisters who have a 
mid-life reunion to London (Old Vic 
071-928 7616) 

• Moscow Stations: a one-person 
play, starring Ton Courtney, inspired 
by Venedikt Yerofeev’s acclaimed 
modem Russian tale about an 
alcoholic who stumbles and dozes 
his way through a series of surreal 
adventures (Garrick 071-494 5085) 

• The Devfl’s Dtsdpto: Christopher 
Morahan tfrecte the National 
Theatre's production of Bernard 
Shaw's 1897 satire on melodrama, 
which features a romantic v8tain wtro 
comes good. The cast is headed by 
Richard Bonnevflle as Dick Dudgeon 
(National. Olivier 071-928 2252) 

• The Ch Wren's Hour Howard 
Davies directs the National Theatre's 
new production of Lillian Heilman's 
1934 drama, about a vengeful 
schoolgirl who accuses her teachers 
of having a lesbian affair and sals In 
motion the collapse of their world. 
The cast Is headed by Harriet Walter 
and Claire Higgins (National, 

Lyttelton 071-928 2252) 

• Arcadia: Trevor Nunn efirects 
Tom Stoppard's complex but often 
funny drama that won foe 1994 
OGvtor Award for Best Ptay 
(Haymarket 071-930 8800) 

• She Loves Me: the charming 
1963 Masteroff, Bock and Hamfck 
musical about two longtime pen pais 
who don't know they work to the 
same parfumerie. Rufota Henshafl 
and John Gordon Sinclair head the 
cast (Savoy 071-836 8888) 
OPERA/DANCE 

Covent Garden The Royal Opera’s 
new production of Gounod’s Rdmeo 
et Juliette, staged by Nlcoias Joel 


and conducted by Gtaries 
Mackerras, opens tomorrow with a 
cast led by Roberto Alagna aid 
Leonftoa Vaduva (repeated Nov 1, 4, 
9, 12, 15, 17). There Is a final 
performance on Sat in the current 
run of Die WalkQre, with cast tod by 
John Tomlinson, Deborah Potaski, 
Poul Bmlng and Ufta Gustafson. 
Gwyneth Jones stas in Turandot 
next Mon, Wed aid Sal and the 
Royal Ballet returns next Thurs with 
Anthony DoweB’a new production of 
Sleeping Beauty (071-304 4000) 
GoHseun English National Opera 
has ten Judge’s new production of 
Massenet’s Don Quichotte, with 
Richard Van ABan, Alan Opto and 
Louise Winter (tfll Nov 9}, Nicholas 
Hytner*s staging of Die ZauberflOte 
pi Dec 7} and e final performance 
tonight of Tosca with Rosalind 
Plowright, David Randall and Hank 
Srnit (071-836 3161) 

Sartor's Wefls American 
performance group Mo mix is in 
residence tin Sat French dance 
troupe Compagnie Angelin Pnrijocaj 
gives performances on Mon and 
Tues (071-278 8916) 

CONCERTS 

South Bank Centre Tonight: Mariss 
Jansons conducts the London 
Phflharmonk: In works by 
Beethoven, Bruch and Strauss, with 
violin soloist Julian Rachfin. Tonight 
(QB-I): Rians BriJggen conducts 
Orchestra of foe Age of 
Enlightenment in a Bach 
progamme. Tomorrow: Owaln Arwel 
Hughes conducts LPO in Dvorak, 
Bruch and Brahms. Sat Nikolaus 
Harnoncourt conducts Phffiiarrnonta 

Orchestra in the first concert of a 
Beethoven symphony series (the 
others are Oct 31, Nov 7, 10, 13). 
Sun afternoon: Nelson Goemer 


piano recftaL Sun evening: Adrian 
Leaper conducts RPO to 
Tchaikovsky and Rakhmaninov, with 
piano soloist JosS Fegali. Tues, 

Wed: Mariss Jansons conducts LPO 
in Schubert, Brahms and Boot h oven, 
with vtofin soloist Kyung-Wha Chung 
(another Jansons concert follows on 
Nov 6). Nov 5, 12: Maurizio Pol Uni 
(071-928 8800) 

Barbican Tonight Itzhak Perlman 
violin recital. Tomorrow: Leon Lovett 
conducts English Baroque Choir and 
Orchestra to Bach’s B minor Mass. 
Sure Joe Loss Big Band. Mon: 
Young Musicians Symphony 
Orchestra plays popular classics. 
Next Wed and Thurs: Mstislav 
Rostropovich conducts the London 
Symphony Orchestra in Balakirev, 
Shostakovich and Prokofiev. Nov 5: 
Gothenburg Symphony Orchestra. 
Nov 8: John Williams guitar rscHaL 
Nov 8 and 9: Seip Ozawa conducts 
LSO (071-638 8891) 


■ GENOA 

Teatro Carlo Pelice Tomorrow, Sat 
afternoon: Alexander Lazarev 
conducts orchestral works by 
ramsky-Koreakov, Prokofiev and 
Slbefius, with violin soloist Julia 
Krasko (No telephone bookings, 
information: 010-589329/010-5381 
225) 


■ MADRID 

Teatro Lirico La Zarzuela Tonight 
Victoria de k» Angeles song rectal 
(pi-429 8225) 


■ MILAN 

Teatro aBa Scata Tonight Georg 
Solti conducts London Symphony 


Orchestra. Mom Francisco Aralza 
song recital. Sal next Tues, Wed, 
Thurs: Ballet of La Scaia to works by 
Balanchine. Tudor and Lander. Nov 
5, 8, 9, 10: Kenneth MacMillan's 
Manon. Nov 6: Dmitri Alexeev piano 
recrtaL Nov 7: Jean-Claude Mai gore 
conducts Vivaldi Nov 14, 16, 17: 
Murray Perahto is piano soloist with 
the Scaia orchestra. Dec 7: opera 
season opens with Die WalkOre 
(02-7200 3744) 


■ PRAGUE 

Rudotfinum Tonight Robert 
Stankovsky conducts Czech 
Philharmonic Orchestra in works by 

■ Martinu, Hummel and Haydn, with 
trumpet soloist Hakan Hardenberger. 
Sun: Petr Vronsky conducts 
Moravian Philharmonic Orchestra in 
works by Dvorak (02-2489 3352) 
State Opera Sat first night of new 
production of Gottfried von Enem's 

Kafka opera Der Prozess (repeated 

Nov 3. 27. Dec 28). Repertory also 
Includes Tosca, Carmen, Jenufe. 
Aida and Nabucco (02-2421 5031) 


■ ROME 

LQ Jla conducts the Orchestra 
deTAccademla Nazlonale di Santa 
Cecflia on Sun, Mon and Tues in 
works by Tutino, Ravel, Brahms and 
Dvorak, with piano soloist Krystian 
Zmerman. The orchestra's 
programme to the pre-Christmas 
period features Vladimir Spivakov, 
Arturo Bonucd and Cecflia Gaacfia 
as soloists. All concerts take place 
at the Auditorlo dl Via della 
Conofliarione 0)6-6880 1044) 


ARTS GUIDE 

Monday: Berlin. New York and 
Parte. 

Tuesday: Austria, Belgium, 
Netherlands, Switzerland. Chi- 
cago, Wa s hington. 
Wednesday: France, Ger- 
many, Scancfinawfa. 

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

Friday: Exhibitions Gukte- 

European Cable and 
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TUESDAY 

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NBC/Super Channel: FT 
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Sky News: FT Reports 0430, 
1730: 






FINANCIAL TIMES 


THURSDAY OCTOBFR 27 IOT4 


14 


T he Philadelphia head- 
quarters of Scott 
Paper, the world's big- 
gest tissue maker, are 
a pleasant sight on a fine 
autumn morning: squirrels 
scamper by the pond and the 
flags of nations flap in the 
breeze. 

Mr A1 Dunlap, Scott’s new 
boss, bates it The success of a 
corporation, he says, is in 
inverse proportion to the size 
of its headquarters. Corporate 
HQs are monuments to the 
chief executive's ego. Scott's is 
up for sale. 

So is much of the rest of the 
company. Earlier this month 
Mr Dunlap sold its coated 
papermaking business for 
Sl.6bn. On Monday he sold its 
power stations for $350m. Still 
to go are its woodlands and 
pulp mills, bringing the grand 
total, he hopes, to S3ba. 

Since Mr Dunlap arfived as 
bead of Scott Paper in April. 34 
per cent of its worldwide staff 
- 11,000 people - have lost 
their jobs. He believes this is a 
record: IBM may have sacked 
more in absolute numbers, but 
their proportion was a mere 13 
per cent. He is particularly 
proud of the fact that 71 per 
cent of Scott's headquarters 
staff have gone, including nine 
of its 11-strong executive com- 
mittee. 

The result of all this, he 
says, is "one of the great sto- 
ries in corporate America 
today”. When he arrived, Scott 
was “a stodgy old company 
which had totally lost its way”. 
In six months, he has turned it 
round. The proof lies in the 
only criterion he cares about: 
the share price has risen more 
than 60 per cent. 

Mr Dunlap started out as a 
military man. and it shows. An 
ex-paratrooper with a parade- 
ground voice, he had his first 
taste of management running a 
nuclear missile site near Wash- 
ington in the early 1960s. After 
a career in industry which 
began with Scott’s rival, Kim- 
berley Clark, he spent the late 
1980s as chief hatchet-man for 
Sir James Goldsmith, the 
Anglo-French financier. Had 
Sir James’s bids for either US 
group Goodyear Tire or BAT 
Industries, the British con- 
glomerate, succeeded, Mr Dun- 
lap would have been sent in to 
run them. 

His admiration for Sir James 
remains unstinting: “Clearly 
the smartest person I ever met 
in my life, and the next was a 
footnote to him." In every- 
thing, he says, they thought 
alike. The alliance seems an 
odd one: Sir James, the pol- 
ished Old Etonian, and Mr 
Dunlap, the son of a shipyard 
worker from Hoboken, New 


Scott’s 

clean 

sheet 

Tony Jackson 
speaks to 
A1 Dunlap, the 
papermaker’s 
tough boss 



Dunlap: big disposals at Scott 


Jersey. But each is in his own 
way an outsider and nowhere 
is this more evident than in 
their shared contempt for cor- 
porate America. 

"Sir James and I coined the 
phrase ‘corpocracy’ - compa- 
nies run for the benefit of 
bureaucrats rather than the 
shareholders. I take the simple 
view that the shareholders run 
the company. They take all the 
risk. Show me the company 
which pays the shareholders 
back if things go wrong, and 
Til show you the company that 
can afford to ignore them. 

“Scott was a microcosm of 
that. Its shareholders would 
have been better off captured 
by terrorists. They’d have been 
treated better." 

The $3b n he is raising 
through the sale of assets, he 
says, is equal to $40 a share. 
“When I joined the company, 
the share price was $37.75. 
Back in the Goldsmith days, 
that would have been a god- 
send. You could have bought 
the world's biggest tissue com- 
pany for nothing." 

Those responsible have paid 
the price. “When you do a 
tumround, you must by defini- 
tion get rid of the top people. 
They're the people who got it 


★ 


wrong, and If they did It once 
they’ll do It again. Every corpo- 
ration has a culture, hi a cor- 
poration which is not doing 
well, you must eradicate the 
culture." He thumps the table. 

The problem about turn- 
rounds. he says, is that people 
dislike change and respond to 
It with criticism, “That's where 
managers fad. They succumb 
to criticism. I don’t have that 
problem. If you want to be 
liked, get a dog: In business, 
get respect." (He himself has 
two dogs. Sir James’s comment 
on this was: “1 see you’re hedg- 
ing your bets.") 

Now that the tumround Mr 
Dunlap hag engineered with 
such shocking suddenness is 
almost complete, where does 
Scott goes from here? Mr Dun- 
lap shrewdly recognises that 
he has an image problem on 
this. He is indelibly associated 
with the corporate raiders of 
the 1980s, of whom the stan- 
dard criticism was that they 
could cut costs, but they could 
not build. 

He is quick to reject the 
charge. It was never as true as 
people said, he claims. Sir 
James and he invested far 
more than people gave them 
credit for. and he is investing a 
lot in Scott now: in a new ven- 
ture in China, in Mexico, in 
Arizona. 

Ask him where the world 
leader in tissues goes from 
here, and he instantly says it is 
not the leader, just the largest 
“We’re not the best Our best 
competitor now is probably 
Procter & Gamble. They’re a 
good marketing company." He 
has just recruited an ex-Proc- 
ter man to run his marketing. 

Besides, he observes, much 
of the paper industry is more 
concerned with tonnages than 
with twa icing money. “I asked a 
guy here how much we made 
in a particular grade, and he 
said, so many tonnes. I said, 
what’s that in dollars? And he 
said. HI come back to you. 

“I thought, this guy’s a 
humorist I enjoy a joke, I was 
waiting to see what he’d come 
back with It turned out he was 
serious." It seemed superfluous 
to ask what happened next 

Since he joined the company, 
he has invested $4m of his own 
money in Scott shares. In a 
move calculated to cause a 
flutter in corporate America, 
he has decreed that all non- 
executive directors will be 
paid exclusively in company 
stock. 

The shareholders, he insists 
again, are all that matter. “If 
you’re paid to run the corpora- 
tion. then by God run the cor- 
poration. If you do your job 
and pay your taxes, the rest 
takes care of itself." 


A frequent criticism of 
policy groups is that 
their principles are 
fine, hat they are 
short on detailed proposals on 
how to implement them. 

The report of Labour’s 
so-called Commission on Social 
Justice - chair Sir Gordon Bor- 
ne - Is just the opposite. The 
principles vary between the 
platitudinous, the meaningless 
and the wrong-headed. But 
there are some good individual 
proposals, which needed to be 
rescued from the surrounding 
material with a greater exer- 
cise of charity and imagination 
t han the commission members 
were willing to extend to their 
own intellectual opponents. 

It is, however, unnecessarily 
difficult to carry out the neces- 
sary extraction. The Executive 
Summary is not that at all, but 
a party political pamphlet. 
There is no index. The book Is 
both insular and partisan. 
Every idea is presented as 
novel and utterly different 
Grom the government’s. Exam- 
ples from other countries are 
brought in for debating pur- 
poses. But there is little recog- 
nition that the problems it 
describes affect most western 
countries, irrespective of the 
party in power. 

To take one example, the 
British government is casti- 
gated for the low proportion of 
the population at work; but no 
mention is made of the fact 
that the proportion is lower 
still in most other European 
countries, whose degree of 
labour market regulation the 
commission so much envies. 
Above all. there is no costed 
programme or even a list of 
costed options of the kind that 
is standard, for instance, in the 
work of the Institute for Fiscal 
Studies. 

This is a great wasted oppor- 
tunity. For the potential value 
of a group like the Borne com- 
mission Is that it can put for- 
ward proposals which do not 
commit its political sponsors. 
Tackling the poverty and 
unemployment traps is an 
expensive operation, if benefits 
are not to be cut or more 
harshly administered. But 
there are more and less cost- 
effective ways of doing so. It 
would be better to give some 
honest estimates than an 
open-ended list of proposals 
and possibilities, with the half- 
hearted hint that they might 
be paid for by economic 
growth - as Ronald Reagan’s 
tax cuts were supposed to have 
been. Hardly a model to appeal 
to a modernised Labour party. 

J suspect that the first few 
chapters will be passed over as 
“gufT by numbers merchants 
of all persuasions. But bad guff 


Economic Viewpoint 


Awful ‘vision’ but 
some good ideas 






By Samuel Brittan 

The best of ‘Borrie’ 


Pension Guarantee to . help 
poorer pensioners 

. Easier access to Family Credit 

Higher earnings ‘disregards’ 
for unemployed 

End of Married Couple’s 
•Allowance 

■Higher rate taxation of Child 
Benefit : 


Sir Gordon Barrio, chairman of the Qorriralsslon on Soda) Justica 


gives political economy a bad 
name. We are given these alter- 
native prescriptions: (a) an 
“Investors’ Britain", (b) a “Der- 
egulators’ Britain” and (c) a 
"Levellers’ Britain”. As if these 
titles were not contentious 
enough, the first is identified 
with a “fair and prosperous 
Britain", the second with a 
“harsher Britain” and the third 
with a “kindly, poorer Britain”. 
Why did not the philosopher 
member. Professor Bernard 
Williams, apply the standard 
critique of “Persuasive Defini- 
tions" to this section? 

The labels, however, will not 
be persuasive to those with 
enough economic logic to know 
that investment is itself a cost, 
not a benefit, best seen as 
by-product of entrepreneurial 
search for new products, pro- 
cesses and customers. There is 
a hi ghl y misleading chart sup- 
posedly linkin g the growth of 
output per worker to the share 
of net investment in GDP. We 
are not told of the period over 
which the relationship is sup- 
posed to apply. The only 
source we are given is the New 
York Review of Books, without 
even an author. The chart fails 
to include the former commu- 
nist countries which had the 
highest investment ratios of ail 


and - as we now know - the 
worst economic performance. 

It was inevitable that the 
commission would support 

minimum wage liyislatinn In 
view of former Labour leader 
John Smith’s dug-in attitude. 
But the commission's own fig- 
ures show that it is an 
extremely ineffective way of 
dealing with poverty, which 
varies so much with family ctr- 


There is much 
casuistry to avoid 
using words like 
selectivity and 
means testing 

cumstances. Its main weapon 
is a number of studies purport- 
ing to show that minimum 
wages in some industries and 
countries do not destroy jobs, 
relying on the reader's igno- 
rance of other studies showing 
the opposite. 

The market economist is 
meant to applaud the commis- 
sion for proposing a minimum 
wage of £3.50 per hour rather 
than the higher sums 
demanded by union leaders, as 
if a perverse medicine can be 
defended by the moderation of 


the dose. Is the £3.50 minimum 
meant to apply to part-time or 
only full-time workers? If It 
applies to the latter, it will 
only increase the shift to 
part-time jobs. If it is to apply 
to any work done by anyone, 
then it means that a house- 
holder who cannot afford to 
pay that rate for a few hours' 
work by a jobbing carpenter 
win have to resort to do-it-her- 
self - even though this makes 
both sides worse off and is in 
contravention of one human 
being's right to make a con- 
tract with another so long as 
there arc no large adverse 
spillover effects. 

The most radical single idea 
is the Pension Guarantee. This, 
thankfully, abandons the 
Labour commitment to waste- 
ful across-the-board increases 
in state pensions. Instead there 
are to be more generous and 
more humane top-up arrange- 
ments than at present for pen- 
sioners with little or no other 
income. There is, of course, 
much casuistry to avoid using 
words like selectivity and 
means testing. Less happily, 
mandatory second pension 
schemes seem to be advocated 
- which is too near compul- 
sory saving for a liberal. 

Many detailed but important 


low cost improvements are put 
forward which might make 
Familv Credit more effective in 
topping up the incomes of fam- 
ilies with low earnings from 
employment. Another good 
idea, canvassed rather than 
firmly proposed, is that of 
merging Family credit with 
Income Support for the unem- 
ployed. At le:»st that is better 
than the Conservative Job 
Seeker’s Allowance, which 
puts an iron curtain between 

the two. . . 

The Borrie commission is 
also more favourable than the 
government to low cost propos- 
als to allow the unemployed 
some modest earnings from 
casual work without losing 
benefit. Furthermore, there are 
reforms in Housing Benefit, 
which could make it less of a 
work disincentive than it now 

ia ultian rnnlhilU’ti With Family 


O ne can also applaud 
the suggested phas- 
ing out the Married 
Couple’s Allowance. 
This was originally meant to 
happen when individual taxa- 
tion was introduced, but one 
rather important married cou- 
ple vetoed the idea. The allow- 
ance is now being partially 
phased out by Kenneth Clarke. 
But unlike the cha tied lor. I 
would also support tlic chan- 
nelling of the savings from 
ending it into children’s bene- 
fits. Children are more at risk 
from poverty than childless 
couples or older single people; 
and they did not ask to be 
bom. 

That does not mean sharing 
the Borrie enthusiasm for 
channelling everything saved 
into across-the-board increases 
in Child Benefit - still less Into 
nursery education whicli looks 
like vying with industrial 
training as the fad of the hour. 
I would prefer some of it to be 
channelled into income- related 
benefits. Most of all. I was 
pleased to sec the incorpora- 
tion. if only as a suggestion, of 
Hermione Parker’s idea of a 
modest Participation Income 
for all. which would be condi- 
tional not on seeking paid 
employment but on any kind of 
service for other people. 

Those of us who believe in 
Individualism with a human 
face (which means something 
less grudging and punitive 
than the government's ideas) 
should not hesitate to raid Bor- 
rie for ideas and dialectical 
support. But on no account 
should we allow it monopoly of 
insight, compassion, imagina- 
tion or any other aspect of the 
"vision thing”. 


Pensions Management 
is proud to announce the winners of... 

(Pensions Management 
g/lwards 1994 

- recognising excellence in British pension schemes 

in association with the and organised by 


The Pensions 
Management 
Institute 



TbfKSiimS 

MANAQEMEN r • 


The panel chose award winners in terms of excellence 
from within six categories. 


W A T S O N S 


THE WATSONS SCHEME OF THE YEAR AWARD 

THE MINEWORKERS PENSION SCHEME 



BARINGS 


THE BARINGS LARGE SCHEME AWARD 

THE P&O PENSION SCHEME 


C' o THE GARTMORE SMALLER SCHEME AWARD 

vjar imorc the independent television 

COMMISSION STAFF PENSION PLAN 


Schroder 

Investment 

Management 


THE SCHRODER INVESTMENT MANAGEMENT 
PUBLIC SECTOR SCHEME AWARD 

THE BRITISH RAIL PENSION SCHEME 



Sourish l-quirithlc 



HENDERSON 

Pension FunJ Management 


THE SCOTTISH EQUITABLE COMPANY SCHEME AWARD 
THE HARRISONS & CROSFIELD GROUP 
PENSION SCHEME 


THE HENDERSON INDUSTRY WIDE SCHEME AWARD 

THE SHIPBUILDING INDUSTRIES 
PENSION SCHEME 


LETTERS TO THE EDITOR 


Number One Southwark Bridge, London SE1 9HL 

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


Personal pensions: predictions, incentives 
- and now a compensation loop? 


From Mr R S Parian. 

Sir, I imagine that few tears 
are being shed for the life 
insurance industry as it con- 
templates the compensation 
bill for the personal pensions 
scandal (“The high cost of bad 
advice”, October 26). 

However, there is an unfor- 
tunate tendency in the media 
to talk about the "pensions” 
industry when reporting the 
issue. This risks further dam- 
aging the already somewhat 
tarnished image of occupa- 
tional pension schemes in a 
way which would be com- 
pletely unfair. 

It is very easy in these situa- 
tions to be wise after the event 
However, in this case - and it 
makes the scandal much worse 
- the pensions industry pre- 
dicted that this would happen. 
During 1986 and 1987 pension 
scheme trustees, employers 
and advisers fought a cam- 
paign to warn government of 
the consequences of unleash- 
ing a commission-hungry sales- 
force on vulnerable people 
faced with complex financial 
choices. Self-regulation never 
stood a chance, but govern- 
ment fired with ideology about 
personal choice and encour- 
aged from the sidelines by a 
life insurance industry smack- 
ing its lips, dismissed this cam- 
paign as paternalistic vested 
interest 

The rest as they say, is his- 
tory. While It must now be the 
responsibility of the life insur- 


ance industry to foot the bill, it 
is to be hoped that occupa- 
tional pension schemes will 
co-operate folly in the process 
of repairing the damage by re- 
admitting those who have lost 
out And may the UK working 
population then recognise who 
its friends really are. 

R S Parkin. 

White Holm, 

Pebble Hill Road. 

Betcluoorth, Surrey RHS 7BP 

From Ms Kim North and 
Ms Jo Smith. 

Sir, Lex writes that “the 
scale of the UK’s personal pen- 
sions scandal continues to 
shock” (“Pensions”. October 
26). The FT is being too mod- 
est* you blew the whistle on 
personal pensions more than 
four years ago. 

Our files show that on Janu- 
ary 6 1990, you published the 
view that Norman Fowler, the 
minister responsible for the 
new personal pensions, “has 
put the pension clock back half 
a century”. The article cor- 
rectly states that people buy- 
ing personal pensions “have no 
idea what benefits their contri- 
butions will eventually buy" - 
and was appropriately headed 
“Paying dearly for Norman's 
knighthood". 

Kim North, 

Jo Smith, 

The Pretty Technical 
Partnership, 

54 Artillery Lane. 

London E2 7LS 


From Mr Digby Jacks. 

Sir, your article, “The high 
cost of had advice", is apposite. 
I wonder when the real perpe- 
trator of the current imbroglio 
feeing the life sector will be in 
the dock? 

It was the government in its 
headlong rush to privatise 
everything, including occupa- 
tional pensions schemes, that 
created the personal pensions 
regime - which, in turn, led to 
the mis-selling. This was 
fuelled by the National Insur- 
ance rebate. Quite a scam 
really! Yet some insurers still 
give money to the Conserva- 
tive party. 

Digby Jacks, 

regional officer, MSP Union, 

50 Southwark Street. 

London SE1 LUN 

From Mr A E N Buckley. 

Sir, In the current debate on 
the sale of personal pensions to 
members of occupational pen- 
sion schemes, two important 
facts seem to be overlooked. 

First, at the time of the intro- 
duction of personal pensions, 
the government offered appar- 
ently significant incentives in 
the form of rebate of contribu- 
tions to the state earnings-re- 
lated scheme (SERPS). to 
encourage people to make their 
own personal pension provi- 
sion. It was this rebate, as I 
recall, which was a major fea- 
ture in the selling propositions 
of personal pensions advisers. 

Second, the “better value" 


offered by many occupational 
schemes rests hugely or solely 
on the fact that today the 
majority of companies which 
run their own such schemes 
still offer significantly higher 
remuneration (in the form of 
employer pension contribu- 
tions) to employees prepared to 
join the company scheme than 
to those who prefer to make 
their own arrangements. 

This anachronism can surely 
not be justified on any objec- 
tive or rational grounds. 

A E N Buckley. 
principal consultant, 

PA Consulting Group, 

6 Highfield Road. 

Edgbaston. 

Birmingham B15 3DJ 

From Mr Toby MicklethwaiL 

Sir, Insurance companies 
now face a compensation bill 
of up to £2bn for wrong pen- 
sion advice. Where are they 
going to get the money from? 
Surely they are going to clip 
all policies to pay the cost. 
They will doubtless find a jus- 
tification in the fine print. 

If so, then anyone who 
invested via an insurance com- 
pany suffered a risk of having 
their investment clipped to pay 
compensation. Were they 
warned of this risk? If not. they 
are entitled to compensation. 
We may be entering a compen- 
sation loop. 

Toby Micklethwait. 

Hamilton House, 

Uffle, Surrey KT16 0AN 


Super unleaded ban no solution 


From Mr Adam Seymour. 

Sir, The Commons transport 
committee’s proposal that 
super unleaded should be ban- 
ned (“MPs row with oil indus- 
try on unleaded petrol safety”, 
October 26) must be considered 
with the lessons of the past In 
mind. If the leaded versus 
unleaded gasoline debate has 
taught us anything, it is that 
banning is no solution. With- 
out clear guidelines as to wbat 
lead should be replaced with, 
industry naturally opted for 
the most cost-effective means: 
namely the replacement of lead 
in petrol with aromatics (of 
which benzene Is one). 

WUh what high-quality addi- 
tives could the oil industry 
replace aromatics if govern- 


ment decided as a result of this 
proposal that their use should 
be restricted? In the short run 
aromatics could be replaced by 
alcohols or ethers, imported 
Methyl-Tertiary-Butyl-Ether 
(MTBE) being the least-cost 
option. However, studies into 
the effects of adding MTBE 
have shown that the benefits 
of reduced benzene emissions 
may be counterbalanced by 
increased emissions of other 
toxic substances, namely form- 
aldehyde and acetaldehyde. 

In the long run, the govern- 
ment could introduce incen- 
tives for investment in differ- 
ent oil-processing technologies 
that do not produce aromatics. 
An alternative for refiners is to 
increase the level of olefins, 


another type of hydrocarbon 
used to boost gasoline quality. 
Again, research has shown 
that there is a tradeoff in this 
approach between reduced ben- 
zene and increased emissions 
with ozone-forming potential. 
Further, little is known as to 
the toxicity of olefin-related 
emissions. 

The proposed banning of 
super unleaded is not a solu- 
tion to the problem of benzene 
and aromatics. It raises the 
highly emotive issue of ben- 
zene without indicating any 
direction for the future. 

Adam Seymour, 

research fellow. Oxford Institute 

far Energy Studies. 

57 Woodstock Road. 

Oxford OX2 6FA 


Own answer 

From Mr OJW Rudwick. 

Sir. The answers to the ques- 
tions posed by Mr Jonathan 
Ruffer in the first paragraph or 
his article (Personal View, 
October 25) are surely given in 
the last. International bond 
markets which were drunk on 
excess liquidity in 1992-93 have 
now awoken to the cold dawn 
of rising interest rates, and set 
yields at level which discount 
likely future inflation rates. 
Only a dwindling bank of age- 
ing teenage scribblers believes 
that current low levels of infla- 
tion can safely be extrapolated 
into the indefinite future. 
OJW Rudwick. 

The Garrick Club. 

Garrick Street. 

London WG2 





FINANCIAL TIMES 

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

Thursday October 27 1994 


Misreading 

the road map 


A web of asphalt spreading over 
the green Gelds of England: that is 
one of the nightmare visions con- 
jured up by yesterday's report on 
UK transport policy from the 
Royal Commission on Environ- 
mental Pollution. Its authors, 16 
scientists and environmental 
experts, foresee a future where 
Britain builds miles of new roads, 
at ever-increasing cost, but fc»i« 
entirely to relieve the traffic jams 
choking Its dties and junctions. 

Many share those fears. Envi- 
ronmentalists have warmly wel- 
comed the commission’s warnings 
and most of its 100 recommenda- 
tions. Bat this congested report, 
two years in preparation, does lit- 
tle to dear the road ahead . 

That is unfortunate because it Is 
entirely right in starting from the 
principle that road users should 
pay the full environmental and 
health costs of the roads: pollu- 
tion. accidents, noise and Iras of 
amenities. It is indisputably right, 
too, in observing that it is hard to 
set such prices. Pollution and 
noise can be measured straightfor- 
wardly, but some health implica- 
tions are unclear. Medical 
researchers suspect that exhaust 
fumes are an Important factor 
behind the rising incidence of 
asthma, but have not yet proved 
the ltnlr 

But such difficulties should not 
deter calculations; they simply 
imply that the conclusions should 
be repeatedly reviewed. The com- 
mission provides a good example: 
it calls use of super unleaded pet- 
rol, portrayed for years as 
"green”, into question for causing 
emission of high levels of benzene. 

The figures assembled by the 
c ommissio n, if imperfect are illu- 
minating. It pats the environmen- 
tal coats of road use by all 
vehicles at between £4.6bn and 
£12 Jbn. Accidents add a further 


£5.4bn. After taking account of 
building costs, it estimates that 
revenue raised from road users 
ranges from 121 per cent of total 
costs to 61 per cent 

The estimates clearly portray 
heavy goods vehicles as the vil- 
lains, covering only between h»if 
and two-thirds of their unit costs. 
The commission is right to con- 
clude that measures should be 
taken to ensure they dose that 
gap. 

But it begins to veer off its route 
in addressing cars and light goods 
vehicles. The report suggests that 
these more than cover the total 
costs of their use of the roads. But 
it nonetheless wants taxes on 
these vehicles to be raised in order 
to protect the countryside - an 
environmental asset it considers 
priceless. 

That step reveals the weakness 
of the report an excess of moral- 
ity over economics. The authors 
assert that it can be morally 
wrong to trade environmental 
assets against the benefits of 
mobility. They exhort people to 
walk more and get fitter per se, 
Imtoari of driving. 

The conclusion the report 
should have reached is that, pro- 
vided road use is correctly priced, 
there is nothing intrinsically 
wrong with building more roads if 
needed. That is not to preclude 
more investment in public trans- 
port, one of the commission's 

mam rua wnngiMtatlnim In central 

London, for example, it is dearly 
wanted and needed. But through- 
out. the report portrays public 
transport as a better substitute for 
roads than it is capable of being, 

however we& mainfamwl 

The commission is right that 
government has done a poor job of 
assessing Britain's transport 
needs for the future. Its report 
does not, however, fill the gap. 


M 


Local sense 


The Local Government Com- 
mission is to be congratulated for 
seeing sense at last and drawing 
back from a wholesale reconstruc- 
tion of local authorities across 
En gland. Its recommendations Dor 
nine counties represent a broadly 
fair balance between the desire of 
a few towns and dties to break 
free of their county councils, 
and the antipathy of the electorate 
as a whole to further expensive 
musical chairs in local govern- 
ment 

The commission should apply 
the same principles as it makes 
final recommendations for the rest 
of England’s counties in the next 
two months. The duty will then be 
on Mr John Glimmer, environ- 
ment secretary, to abandon hopes 
for introducing single- tier authori- 
ties Where they are not strongly 
desired by the voters. 

Mr Gummer's decision this 
week to reject proposals from tbe 
co mmis sion to abolish North 
Yorkshire and Somerset county 
councils is a dear sign that he has 
already done so. He could go one 
better and reject any further com- 
mission proposals to abolish coun- 
ties outright On the basis of the 
public consultation, it is hard to 


justify abolishing any counties 
beyond the two - Avon and Hum- 
berside, both spawned by the last 
reorganisation in 1974 - which he 
agreed to scrap yesterday. 

Once the present review is com- 
pleted, several lessons need to be 
learnt for the future. On the posi- 
tive side, the effort made by the 
commission to gauge public opin- 
ion before publishing firm deci- 
sions was commendable, and 
appears to have been vital in 
avoiding a shambolic conclusion. 
The response to the postal referen- 
dums was for the most part deri- 
sory; but this itself reflected 
the absence of popular enthusiasm 
for reform. The wider use of 
local referendums is to be encour- 
aged. 

There is, however, a debit side. 
No review process was established 
before the government sought to 
impose single- tier authorities In 
Wales and Scotland. What do peo- 
ple think there? And in England, 
the review has done little to revi- 
talise local democracy. With 
resentment about government-by- 
quango growing, the malaise in 
local government will have to be 
addressed by the new commission 
an standards in public life. 


Citadel storm 


e apparent storm in a teacup 
ween the two main rightwing 
ltestants fur next year’s French 
grtrientlal election looks set to 
cture a great deal of Gallic por- 
flin for several months, antipa- 
r has been growing between the 

0 main figures in France's 
niiiat rpr party, Prime Minis- 
■ Edouard Ballad ur and Mr Jao- 
es Chirac, the party leader and 
lyor of Paris. This week the 
rabbling has burst into the 
m following Mr Balladur's accu- 
ion that Mr Chirac has been 
ng the Gaulllst party as a “cita- 
y in which to take refuge from 
j world outside. 

Uthong h this almost certainly 
s not his i n te n tion, Mr Balladur 
s publicly put his finger an a 
atral problem confronting 
lay’s inheritors of the mantle of 
sklent de Gaulle. Their inabil- 
to reconcile the doctrines laid 
wn In Us name with the 
inirements of France and 
rope af ter th» wwi of the cold 
r represents a crucial poli tic al 
□dicap for the right This feil- 
b encouraged disillusioned 
ultists to seek solace in fringe 
rties in the June elections for 

1 European parliament 
France's left wing is in a still 
on sorry state than the RPR, 
t the conservative infighting 
a only benefit Mr Jacques 
ksrs, the So cialist president of 
s European Commission. If, as 
pected, he runs for the presir 
acy next year, Mr Delors would 
y powerfully on his perceived 
Tactiveness to middle-ground 
ters - an appeal that Mr Chirac, 
particular, manifestly lacks. 

[he recent description of Mr 
lots as “the candidate of Ger- 
m Christian Democracy** b y the 
mer Socialist defence minister. 


Mr Jean-Pierre Chevdnement, was 
no doubt meant as a jibe, but it 
could have a prophetic ring. Chan- 
cellor Helmut Kohl owes his four 
successive election victories to his 
ability to maintain support across 
a broad swathe of conservative 
and centrist voters. No pres- 
ent-day French politician can 
mntrh this appeal. 

In one sense; the Bailadur- 
Cbirae duel reflects the inevitable 
frustration of like-minded politi- 
cians bidding for a prize they 
covet and suspect may be slipping 
away. But the squabble also 
reflects a wider feflure of adapta- 
tion. of the French political sys- 
tem. France badly needs an organ- 
ised form of preselection of 
candidates for the presid e ntia l 
elections to avoid a damaging 
abundance of rivals from the same 
wmp and give their policies clar- 
ity and coherence. 

Another conservative hopeful, 
Mr Valfery GIscard d'Estaing, 
leader of the centre-right UDF 
grouping. Has pointed out that the 
ri ght has three times fielded rival 
candi dates since 1958 mid won. 
However, the proliferation of 
wounded pride and wounded egos 
on the right contributed to Mr 
Francois Mitterrand's success in 
the 1988 presidential election,., and 
could conceivably presage another 
conservative defeat next year. 

Mr Charles Pasqua, the RPR 
interior minister, has suggested 
US-style primary elections to 
select the right’s prefared candi- 
date wed in advance of tbe presi- 
dential poll. The idea has been 
given only a lukewarm reception, 
yet the right needs to end quickly 
the rivalry in its own ranks. Mr 
Balladur and Mr Chirac would be 
wise to back Mr Pasqua’s pro- 


r Lloyd Bentsen, 
US Treasury secre- 
tary, thinks it is 
the best of times to 
hold his job. 

Td say that the economic num- 
bers are the best Fve semi In 20 
years. You see low inflation, good 
sustained growth in the economy, 
and major creation of jobs,” he said 
this week. 

But the economic statistics that 
Mr Bentsen finds so encouraging 
have tailed to bring political bene- 
fits to the Clinton administration in 
the battle over next month’s mid- 
term elections. 

They have also spread alarm on 
Wall Street that the US economy 
may still be growing faster than can 
be sustained without sparking infla- 
tion. Bond investors are now con- 
vinced that the Federal Reserve 
needs to raise shortterm interest 
rates in a hurry to keep inflation 
from breaking out 

This week they pushed long-term 
interest rates above 8 per e«nt for 
the first time in two and a half 
years, and the dollar fell to its low- 
est level against the yen since the 
second world war. New statistics 
published a week ago suggested 
that the 1% percentage points by 
which the Fed has already raised 
interest rates over the last eight 
mont hs h a s taile d to 
steam out of even the most rate- 
sensifive sector, hnnstng construc- 
tion. 

In July, when Mr Alan Green- 
span, Fed chair man , delivered bis 
half-yearly testimony on monetary 
policy to Congress, the accepted 
economic wisdom - broadly shared 
by the Fed, the administration and 
a consensus of private sector fore- 
casters - was that the economy 
would have a “soft landing". 

At that time, the economy had 
already begun to slow down from 
the unsustatnably high 4.1 per cent 
annualised growth rate of the sec- 
ond quarter this year. Even without 
further tightening of monetary pol- 
icy by the Fed, the economy was 
thought to be slowing into a “glide 
path” of steady growth - between 
2% and 2 % per cent a year - before 
inflationary pressures had been 
given a chance to build up. 

The problem wife the soft landing 
scenario is that policymakers have 
rarely been able to achieve it in the 
past Even If economists think it is 
a plausible outcome, it is not (me 
that investors are ready to bet on. 

“The soft landing story has a bet- 
ter shot this time than at any time 
in the last 40 years, bat It will take 
more than economic projections to 
convince the financial markets of 
the scenario in an investment 
sense,” says Mr Allan Sinai, chief 
global economist with Lehman 
Brothers in New York 

Pessimists say the signals suggest 
the economy is running full steam 
ah pari , rl fyy to or past the point at 


Haunted by spectre 
of inflation 

Despite the US Treasury’s cheerfulness, financial markets 
fear further interest rate rises, says George Graham 


which pressure starts to build up on 
prices. September’s housing starts, 
for example, were 4 A per cent up on 
August 

More significant is last month’s 
fan fn the unemployment rate to 53 
per cent There are doubts about 
the reliability of the unemployment 
statistics, because the Department 
of Labor changed its method of cal- 
culation at fee start of thia year. 
Nevertheless, fee unemployment 
level is now at or below the “natu- 
ral rate” at which most members of 
the Federal Open Markets Commit- 
tee, tbe Fed’s policy-setting body, 
believe the real slack in the labour 
market has been absorbed. Labour 
shortages «T>d pressure for hi gher 
wages have already shown up in a 
few sectors. 

US industry, meanwhile, was 
operating in September at 84.6 per 
cent of its capacity, according to the 
Fed’s calculations. That is a shade 
lower than in August, but still close 
to the peaks readied in early 1969, 
before recession set in. It is also 
above - perhaps by more than 2% 
percentage points - the rate at 
which some economists argue pro- 
duction bottlenecks will start to 
push up manufacturers' prices. 

GDP growth in the third quarter 
is due to be announced by the Com- 
merce Department tomor r ow. The 
market consensus forecast, accord- 
ing to MMS International, fee finan- 
cial information company, is for 28 
per cent annualised growth, a con- 
siderable slowdown from the second 
quarter’s 4.1 per cent pace. Esti- 
mates have been ed g in g up steadily 
over the last two weeks, and the 
financial markets are already 
worried about the possibility that 
growth has once again started 
to accelerate in the fourth 
quarter. 

“If the weak quarters are 3 per 
cent and the strong quarters are 
over 4 per cent, then the trend is up 
in the 3Vi per cent range, which is 
above what fee Fed would tike to 
see,” says Mr James O’Sullivan, an 
economist with bankers JJP. Mor- 
gan in New York. 

Despite the evidence of overheat- 
ing, all few gnvp mmpn t *s price indi- 
ces show inflation is still under con- 
trol Consumer prices rose by <12 
per cent in September for a year-on- 
year inflation rate of 38 per cent, 


US economy: prelude to a soft landing 


V*... . Annual » cf»nge.(CPi)] 



Source: 




wife care inflation (excluding vola- 
tile food and energy prices) also ris- 
ing 02 per cent At the wholesale 
level too, core producer price infla- 
tion readied only L9 per cent year 
on year in September. 

Employment cost statistics from 
fee Tahnr D e partment show no sign 
of acceleration in wage inflation. 
Wages and salaries have risen by 
just 28 per cent over the past year, 
the department reported this week, 
and wage increases in important 
collective bargaining agreements 
signed in privat e industry riming 
the past three months have 
averaged only 1.9 per cent a 
year. 

But tho financial markets fend to 
dismiss such inflation yardsticks as 
backward-looking measurements. 
They believe the Fed is “behind the 


»•* ■ » ■ - 

rood « nmos 

*==* Discount rats 

l 1 1 1 1 1 0 . 

1990 91 92 93 94 1 


curve” in its efforts to choke off 
Inflation before it picks up, and will 
be compelled to raise interest rates 
by at least half a parentage point 
at fee next meeting of tbe FOMC on 
November 15 - and probably by as 
much again before the and of the 
year. 

Not all fee members of the FOMC 
share this view. Mr Alan Blinder, 
the Fed’s vicechairman, argued this 
week that, although tbe economy 
was showing fewer ages of deceler- 
ation than he would have thought a 
few months ago, it had to be 
remembered that monetary policy 
works wife time lags. 

“I think it probably is a fair inter- 
pretation of recent movements in 
fee bond market that there are a 
number of people that trade bonds 
for a living that are in the 'behind 


the curve’ school . . . Tm not con- 
vinced that they are right,” Mr 
Blinder said. 

But other members of fee FOMC 
are more impatient Mr Alfred 
Broaddus, president of the Rich- 
mond Federal Reserve Bank, had 
wanted the Fed to raise rates at its 
July meeting instead of delaying its 
most recent move until August. 
More recently, he has sternly 
warned that it is not good enough 
for fee Fed to accept a 3 per cent 
inflation rate. 

One reason why fee Fed's five 
interest rate increases so Ear this 
year have failed to take the steam 
even out of sectors sensitive to 
interest rates, such as housing, is a 
steady loosening of bank credit 
Banks have made credit easier to 
obtain and have narrowed their 
lending margins, fairing some of the 
sting out of the Fed’s actions. 

T his Is a mirror image of 
the recession of 1991 and 
1992, when a “credit 
crunch” caused by 
banks’ tight lending poli- 
cies reduced the impact of the Fed’s 
efforts to stimulate fee economy 
through lower interest rates. Then, 
fee Fed was forced to cut further 
than it might otherwise have done. 

This time, the Fed may have to 
raise rates further than it might 
otherwise have done to offset these 
easy credit conditions - leading Mr 
Greenspan and other FOMC mem- 
bers to issue a stream of warnings 
in recent weeks about looser loan 
standards. 

“Now tbe chairman is worrying 
in public that banks are becoming 
overly lax in credit standards,” 
comments Mr John Lipsky, chief 
economist at Salomon Brothers. 
“By analogy wife his earlier action, 
it sounds as if he is setting the 
stage for more aggressive tighten- 
ing.” 

For the Clinton administration, 
there is little room to quarrel with 
the Fed over another increase in 
interest rates. “We share the same 
objectives as the Fed of low infla- 
tion and long-term economic 
growth.” said Mr Bentsen. 

Administration economists are 
even more convinced than the Fed 
that inflation is well under control. 
They argue that heavy investment 
in business equipment this year will 
raise the economy's capacity next 
year and ease fears of bottlenecks. 

But evetf congressional Demo- 
crats, who complained earlier in the 
year feat the Fed was trying to kill 
off the recovery, say that, because 
of the evidence that the recovery 
remains strong, they are unlikely to 
object to a November increase. 

No one in tbe administration, 
after all, wants to see the land of 
rapid growth that would inevitably 
be followed by harsh Fed tightening 
and a recession, just in time for 
1996’s presidential election. 


David Buchan argues that France regards virtually all tactics as fair in trade policy 

War by other means 


H 


alloween this year coin- 
cides with the ritual of 
fee Night of the Long 
Kni ves when newly 
appointed European commissioners 
carve up the portfolios - and them- 
selves. 

Mr Jacques Santer, the new Can- 
mission president who will allocate 
the jobs this weekend, has recently 
had a timely reminder of why 
entrusting Europe's trade and 
industry policy to a French commis- 
sioner would be widely considered 
as daft as putting a Briton in charge 
of farm policy. 

France has threatened to veto an 
international agreement to scrap 
shipbuilding subsidies painstak- 
ingly negotiated by the outgoing 
Commission wife other industrial 
countries. 

Mr Alain Lamassoure, France’s 
European Union affairs minister, 
has promised French MPs that he is 
ready to invoke “vital national 
interests” to block the agreement 
Yet the sector employs just 5880 
people out of a total workforce of 
nearly 20m. 

French presidential politics are 
partly to blame. Mr Jacques Chirac, 
who is rivalling Prime Minister 
Edouard Balladur to be the main 


conservative candidate in next 
spring's presidential election, has 
for reasons best known to himself 
made support for French shipbuild- 
ing an obsessional part of his cam- 
paign. for the Elyste. Mr Balladur 
believes he must Twatnh him fn thu 
obsession. 

But in fighting to retain subsidies 
for shipbuilding, both men follow in 
a long tradition of state lntervm- 
tionlsm that goes back to the 17th 
century and Jean-Baptiste Colbert, 
Louis XIV’s economic overlord. 

Colbert subsidised many ship- 
building and shipowning compa- 
nies, which all collapsed when his 
death brought the subsidies to an 
end. Some would argue this showed 
the pointlessness of creating such 
artificial companies in the first 
place. Others - including the pres- 
ent French government - seem to 
see the real error in putting a stop 
to subsidies. 

Yet the Colbertm sense of being tn 
a permanent economic struggle 
wife other countries still pervades 
modern French thinking to a 
remarkable degree. The only differ- 


ence is that France’s chief economic 
enemies today are the US and 
Japan; tn Jean-Baptiste’s day, it was 

Rn gfanri and Holland . 

Earlier this month, France’s 
defence and economics ministries 
sponsored a teach-in on “economic 
war” in Paris. This showed that the 
French - in a way that is both 
admirable and irritating - refuse to 

France believes that 
foreign competitors 
are waging total 
economic war against 
the country 

sit on the laurels of their undoubted 
achievements in foreign trade, 
which include last year's FFr30bn 
(ElObn) trade surplus recorded hi 
spite of a generally strong franc. 

France believes that foreign com- 
petitors are waging total economic 
war against the country, and there- 
fore regards virtually all tactics as 
fair in parrying these attacks. Gen- 


eral Francois Mennet, the retired 
bead of France’s DGSE intelligence 
service, which was once accused of 
spying on US industry, told the con- 
ference that France should have 
“no hang-upe” in mobilising all its 
resources in the battle for foreign 
contracts. 

The French sense that world 
trade is somehow unfair is 
reinforced in an area dear to Col- 
bert’s heart - luxury goods. Mer- 
cantilists such as Colbert believed 
that a country should run a pay- 
ments surplus to gain gold to pay 
mercenaries or bribe enemies in 
time of war. But Colbert added the 
refinement that the surplus sho ul d 
be in luxury goods which are, by 
definition, not essential to any war 
effort and might have the added 
benefit of rendering foreign con- 
sumers more effete. 

Three centuries later, France has 
half the world market in luxury 
goods, according to the aptly named 
Colbert Committee which repre- 
sents French fashion, perfume, 
wines and spirits companies. 

Many of these products are easy 


to fake, leaving the country exposed 
to counterfeiting. And France has 
taken draconian measures this year 
against counterfeiters. 

However, economic nationalism 
has become harder to justify wife 
international co-operation in indus- 
tries such as aerospace and defence. 
Their products commonly have 
components from several different 
European countries. 

The view increasingly proclaimed 
In France, therefore, is that in aero- 
space and defence, ail Europeans 
are on the same side. They face a 
common enemy in an American 
industry that is determined to offset 
fee sharp contraction in its home 
defence market by killing off 
European competitors, wife Wash- 
ington using or abusing political 
influence in US client states where 
necessary. 

Giving substance to this Euro- 
rhetoric, France opened last week's 
biennial navy equipment exhibition 
in Paris to other European defence 
companies under the name of 
“Euronaval". 

It is perhaps a pity that Mr Santer 
does not have a defence dossier to 
distribute, because there the 
French are certainly thinking Euro- 
pean. 


Observer 


Been there, 
done that 

■ B razilians could be forgiven an 
uneasy twinge of vu. While 
former president Fernando CoHor 
lives as a recluse in the capital 
Brasilia following his 1992 
resi gnatio n amid corruption 
charges, his younger brother is now 
following fn his footsteps. 

Pedro Collar, who felled to win 
election to the legislative assembly 
of tbe poor northern state of 
Alagoas in elections earlier tins 
month, has been given the 
consolation prize of Secretary of 
Industry and Commerce in the state 
government This Is precisely the 
same job which gave Fernando 
Collar his start In politics in 1976. 

There is Uttie chance of the two 
brothers teaming up. It was Pedro 
Who made the Initial, ruinous 
allegations against Ids brother, 
apparently sparked by a family row; 
they have apparently not spoken for 
some time. Fernando, meanwhile. Is 
still smarting from a court decision 
earlier this year to uphold an 
pjght-ypflr ban preve n ting him 
holding political office. 


Sunny side up 

■ Things are realty starting to look 
up for Kelvin MacSenrie, fee 
legendary former editor of The Sun. 
An admirer of Lady Thatcher and 
all that she stood for, MacKenzie’s 


departure from News Corporation 
via the BSkyB satellite company 
left him without any big pay-offs or 
share options. 

Fortunately, he has pnduri up at 
the Mima* Group which, despite its 
left-leaning stance, knows how to 
motivate its heavy hitters. 
Mackenzie has been showered with 
155,038 share options at 129p which 
moans that lie te aTraariy gifting on 

a £24800 paper profit 
Even so, how Kelvin must envy 
David Montgomery, his new boss 
and former chief sub on The Sun. 
Not only Is Montgomery younger 
MacKenxfe, but his entry in 
Who’s Who is more than five times 
as trig and he has 10 times as many 
share options at less than half the 
price. Should have jumped ship 

earlier, Kelvin. 


Boxing clever 

■ first it’s gnomes, now it’s 
coffins. Naughty Poland - whose 
garden gnomes were recently 
forbidden entry to Germany - is 
now exporting too many coffins. 
Germany’s coffin-makers are even 

1p*s happy than normal. 

The Germans complain that the 
quality of the Pohsh boxes Is not up 
to German standards; they used the 
same complaint to stop an invasion 
of Polish gnomes. 

The feet that Polish coffins may 
be cheaper has obviously impressed 
consumers - who spend DM12bn a 
year on the paraphernalia of death 
- but fee coffin-makers, like 



‘Even If you’re cleared, you’ll 
always be sleazy to me’ 

countless other producers in 
Germany, seem not to have noticed. 


Non-accountable 

■ The management jargon 
introduced by David O'Brien to the 
National & Provincial Bufldmg 
Society has unfortunately survived 
his abrupt departure as chief 
ex e c uti ve - but at least some of fee 
staff have turned to plain speaking. 

Writing to head office to report 
“opportunities to engage” - or new 
business contacts as other 
organisations might put it - fee 
branches in east Kent are 
refreshing in their 


straight-forwardness. "Relationship 
built wife HM prison; 30 accounts 
opened,” they say. "It should have 
been 31 but inmate Tom was busy 
shoplifting In Brent Cross.” 


Tunnel vision 

■ Cliff Walker, chief executive of 
BM Group, has seen fee light at the 
end of tunneL Afte - a year of 
desperate measures to reduce the 
engineering company’s £160m debt 
mountain. Walker has decided to 
make a clean break wife the past by 
renaming company Brunei 
Holdings. Apparently, the idea 
came to him when he was stuck in 
a railway tunnel near the 
company’s West Country 
headquarters - built by none other 
than the legendary en gineer 
Isambard Kingdom Brunei- Suppose 
anything’s better than re-adopting 
the old Blackwood Hodge name? 


Corporate largesse 

0 What do elderly business tycoons 
talk about at lunch? According to 
MeWyn Marckus, City editor of Hie 
Times, Lonrho’s Tiny Rowland and 
Hatreds boss Mohamed Fayed were 
lunching together last week when 
the conversation turned to the 
subject of penis transplants. 

According to a report in The 
Times, Fayed told Rowland that he 
had asked the Mayo clinic in the US 
whether he could have a “larger 
penis”. Since Melvyn Marckus used 


to work for Rowland as City editor 
of the Observer (before Lonrho sold 
it to the Guardian), presumably he 
would not misquote his former 
boss. 

Those who know Fayed well are 
not surprised by such a tine of 
c onv e rsation- However, one 
wonders what members of the 
Royal family and other patrons of 
Harrods make of such talk? Poor 
old Gerald Ratner only had to admit 
that some of his jewellery was 
"crap” and bis career was cut short 


Ritzy 


■ Heartened by the prompt 
response to yesterday's query about 
when Is a quango not a quango - a 
six-page briefing paper from the 
Cabinet Office had arrived before 
morning coffee - Observer is now 
seeking an official definition of 
sleaze. 

According to Cassell’s Concise 
En glish dictionary, it is anything 
which is squalid, distasteful, or 
disreputable. Since this could apply 
to the behaviour of most MPs, let 
alone members of the Tory 
government, Observer is looking for 
something more specific. What does 
fee word stand for? 

One reader has suggested that it 
is short for “stay literally 
everywhere at zero expense”. The 
best contribution will win a bottle 
of malt and be passed on to the 
Cabinet Office. Who knows, it might 
even find its way into another 
briefing paper. 


y 


16 


f. 



★ 


Networking? 

NetWare A, 
of course. 


FINANCIAL TIMES 

Thursday October 27 1994 


forte 

Travelodqe 


CELEBRATES ITS 
100TH OPENING 


Leakage may not be as large as early US estimates 

Russian officials to lead 
Arctic oil spill clean-up 


By Reuters in Moscow 
and Karen FossT in Osk> 

Russian officials dew to the 
northern region of Komi yester- 
day to head the operation to con- 
trol an oil spill that environmen- 
talists say could have a 
disastrous impact on the fragile 
Arctic environment 

Concern is growing that winter 
snow could soon prevent any 
clean-up of oil slicks blanketing 
vast areas of tundra. “If some- 
thing has to be done, it has to be 
done right now," said Ms Valen- 
tina Semyashkma, head of a con- 
servation group for the Pechora 
River. Oil has spilled into a trib- 
utary of the Pechora, Europe's 
richest salmon river, and may 
reach it 

She said oil leaking into the 
river, more than l, 000km 
north-east of Moscow, could pour 
into the Barents Sea. This has 
happened before,'’ she said. The 


By Laura Tyson in Taipei 

In Taiwan, where reliable 
financial indicators are hard to 
come by, the bounced cheque 
ratio moves markets. For the 
island’s underground financiers 
and above-ground brokers, yes- 
terday's ratio announcement was 
bad news - a 10-month high at 
0.58 per cent. 

It was a report of a brokerage’s 
bouncing cheque that prompted a 
14.7 per cent fall in stock prices 
earlier this month. And for a Chi- 
nese society with traditional 
regard for financial tangibles, 
defaulting on a cheque carries a 
social penalty and, until a few 
years ago, was a criminal offence. 

The ratio is compiled by the 
Central Bank of China, which 
measures the bouncing by num- 
ber of cheques issued and the 
total amount dishonoured. By 
value, September’s defaults 
reached 0.41 per cent of the total, 
the same as August, which was 
the highest since November 1993. 

Credit against post-dated 
cheques is the most common 
form of short-term financing in 
Taiwan. The instrument Is com- 
monly used as collateral for loans 
from underground financiers - 
black market moneylenders - 
especially for share purchases - 


Continued from Page 1 


ish government. Under the inter- 
national tranche. Chemical Bank 
and Enskilda Corporate will 
arrange a $1.4 bn 5-year syndi- 
cated term loan 
Enskilda Corporate and Nord- 
banken will also arrange a 
SKrlObn domestic financing pro- 


latest spillage occurred on Octo- 
ber l when heavy rains caused 
the collapse of a reservoir con- 
taining oil that had leaked from a 
pipeline near the town of Usinsk. 

Meanwhile, doubts grew yester- 
day over US estimates that the 
spill could be one of the biggest 
ever. There are all these Carry 
stories about a leak of 200,000 
tonnes of oil - that is what oil 
workers there produce in one 
month, ft is stupid," said Mr 
Nikolai Balin, head of the Komi 
state committee for environment 
The most plausible figure is 
14.000 tonnes." 

In Norway, which closely mon- 
itors Russian oil spills, officials 
said there were no plans to lend 
assistance to the area unless 
requested by Moscow. 

"We do not at the moment see 
any acute threat to the Barents 
Sea,” said Mr Per Antonsen, an 
adviser at the Norwegian envi- 
ronment minis try in charge of 


Prop o rt io n of number of cheques 
dishonoured to those cleared A 
Percent V 



1983 94 


Proportion of vahis at cheques a 
dishonoured to those cleared 

hence the correlation between 
stock market confidence and the 
rate of cheque defaults. 

This month's share payment 
default scandal was started by a 
T$200m ($8m) bounced cheque 
from Hung Fu Securities, a local 
brokerage firm, presented to the 
Taiwan Stock Exchange. The epi- 
sode set off a chain reaction 
among other brokerages, and the 
defaults over a couple of days 
were estimated at T$7.6bn. 

A US banker explained that a 
company’s bounce history is an 
important source of background 


gramme over 10 years. This will 
be split between a SKrSbn subor- 
dinated term loan and a SKrSbn 
subordinated private placement. 

Securum made a SKr6.3bn 
profit in the first six months, sur- 
passing initial forecasts with low 
interest rates and astute deals. 

it has moved from being a 
finance company to an invest- 


disaster cooperation with Russia. 
"We are alarmed by the spill, but 
we have to make our priorities. 
We have to remain calm and 
await further information.” 

Norwegian officials said yester- 
day they had received a report 
from Moscow estimating that 
between 14,000 tonnes and 60,000 
tonnes of oil had leaked from a 
pipeline over an area of 68sq km. 
They believed that 14,000 tonnes 
was not enough to cover such a 
large area and that the oil spill 
was probably closer to 60,000 
tonnes. One US estimate has the 
spill at 200,000 tonnes, but the 
Norwegians regard this figure as 
an exaggeration. 

Moscow told Norway yesterday 
that about 140 people from the 
Komi civil defence had been 
working with buckets and vac- 
uum pipes to contain the spill, 
but had to abandon clean-up 
work because of cold weather, ice 
and snow. 


Taiwan SE Index 
8,000 



Source: Contra! Bank of China. 

□afestmm 


information. Taiwan does not 
have an established credit infor- 
mation or rating system, and 
checking records for defaults is 
one of the few formal ways of 
assessing creditworthiness. 

The ratio, the banker said, is 
akin to the bankruptcy rate in 
the US and an index of “prosper- 
ity" in a society that has hoarded 
foreign reserves of $9039bn, as at 
the end of August 

In 1987, the law was changed to 
make bouncing a cheque merely 
a civil matter. But the power of 
the paper and the stigma remain. 


ment and real estate holding 
group after converting most of its 
sour loans into assets. 

The refinancing is seen as a 
significant vote of confidence in 
its future. “Despite the state 
guarantees, we would not have 
been able to carry out a refinanc- 
ing of this size without a sound 
balance sheet," said Mr Nyren. 


Britain 
urged to 
curb road 
transport 

By Chartes Batchelor, 

Transport Correspondent 
and David Lascdles, 

Resources EcGtor 

An environmental commission 
sponsored by the British govern- 
ment has recommended a dou- 
bling of petrol prices in real 
terms, a halving of spending on 
main roads, and a big increase in 
subsidies to buses and trains. 

The 300-page report of the 
Royal Commission on Environ- 
mental Pollution, published yes- 
terday, says present transport 
policies threaten serious damage 
j to the environment. Radical 
change is needed to preserve the 
quality of life for future genera- 
tions, the commission says. 

Sir John Houghton, commis- 
sion chairman said: “Ways must 
be found to make the longer-term 
development of transport envi- 
ronmentally sustainable." 

The report is the most funda- 
mental review of Britain's trans- 
' port policy for more than a 
decade. It makes 110 recommen- 
dations, the main thrust being to 
load costs on to road transport 
and encourage a shift to public 
transport and "green" modes 
such as cycling and w alking . 

Many of the recommendations 
run counter to government pol- 
icy. The government gave the 
report a guarded welcome. 

Dr Brian Mawhinney, transport 
secretary, said: “I welcome this 
report as an important contribu- 
tion to the broader debate which 
I want to encourage on how we 
are going to balance the eco- 
nomic benefits and personal free- 
dom tint roads can bring with 
the need for environmental pro- 
tection.” 

Motorists* and road haulage 
organisations criticised the 
report, but it was welcomed fay 
environmental groups. 

As part of its strategy, the com- 
mission recommends the setting 
of "demanding but achievable" 
targets for improving air quality, 
reducing road deaths and noise 
and switching travel from roads. 

They include a reduction in 
carbon dioxide emissions from 
cars and lorries to 80 per cent of 
1990 levels in 2020 and a 40 per 
cent increase In the fuel effi- 
ciency of new cars by 2005. 

It recommends a doubling of 
transport fuel prices by 2005, 
tighter EU emission limits for all 
new vehicles, heavy investment 
in making public transport more 
attractive, and an extra £2bn a 
year in fore subsidies. 

High-octane unleaded petrol 
should be banned, the report 
said, echoing a report yesterday 
from a parliamentary committee. 

Criticising yesterday’s report, 
the Royal Automobile Club said 
it was “wide of the mark on tar- 
gets and solutions" and “unreal- 
istic about the scope and time- 
tables for change." 

Environmental and pro-rail 
groups welcomed the findings. 


Carmakers scorn efficiency 
target. Page 8 
Editorial Comment, Page 15 


Why bouncing cheques rock 
Taiwan’s market confidence 

The trounced -cheque index 


Securum plans $2.8bn debt refinancing 



Europe today 

Low pressure just north of Scotland will 
feed cool and unstable air into north-west 
Europe. Showers will prevail in the UK and 
Ireland as well as along the Channel. 
Adjacent areas of France, Belgium and the 
Netherlands will have a lot of rain with 
temperatures staying around 10C-12C. a 
south-westerly flow wiH move mild air into 
Scandinavia, producing cloud over most of 
the Scandinavian countries. Showers will 
affect the southern Norwegian and 
Swedish coasts. The Mediterranean region 
vwJi see a lot of sun but there will be odd 
showers In southern Portugal and south- 
west Spain. Showers are also expected in 
western Greece. 

Five-day forecast 

Europe will stay unsettled for the rest of 
the week. The low near Scotland wiD 
weaken gradually while moving north-east, 
leading to fair conditions in most of Europe 
during the weekend. However, a new low 
will approach from the Atlantic. On 
Sunday, the frontal system with this low 
will reach the UK causing Claud and some 
rain. Southern France, Spain and Italy wall 
stay sunny and dry. 


FT WEATHER GUIDE 



THE LEX COLUMN 


Ford’s global drive 


FT-SE Index: 2999.9 (-1.0) 


Ford’s better than expected 
third-quarter results indicate bright 
domestic and overseas prospects that 
could eventually allow the company to 
outpace General Motors and Chrysler. 
The group only slightly lags its Japa- 
nese rivals in productivity and has 
become the US’s most cost-efficient 
indigenous vehicle maker. That its 
north American product mix remains 
weak explains why Ford’s US net prof- 
its per unit, grrfurfmg finan cial earn- 
ings, were just $575 compared with 
Chrysleris §1.013. But the gap should 
close over the next 12 months as Ford 
launches a string of new, high-margin 
vehicles. 

Ford may make progress at home, 
but its best prospects are overseas. 
The group should benefit from the 
upturn in Europe, where GM is strug- 
gling and Chrysler has minima? pres- 
ence. Ford is also positioning itself 
early in the fast-growing Asian mar- 
ket, with its 245 per cent stake in 
Mazda and recently announced ven- 
tures in India and China. The com- 
pany aims to speed up and cut the cost 
of new model development If it can 
amortise this investment by market- 
ing the vehicles across the globe, it 
could achieve large economies of scale 
similar to those achieved by Japanese 
manufacturers. 

Implementation will not be easy. 
The required internal revolution is 
starting at a time of increasingly bit- 
ter competition at home and abroad, 
as rivals add capacity in many of their 
markets. The temptation will be to 
respond by radically customising mod- 
els to meet regional tastes as hap- 
pened when Ford tried to make the 
Escort a global car in the 1980s. Ford 
must ensure such distractions do not 
deflect it from its current path. 

New issues 

The publicity surrounding recent 
flotation disasters has tended to leave 
the impression that investing in UK 
new issues has become a quick way to 
lose money. Yet analysis of all this 
year's flotations produces a rather dif- 
ferent picture. On average, they have 

outperformed the market, albeit by a 

whisker. But while the proportion of 
duds may not be abnormal, the scale 
of the losses on the flops has undoubt- 
edly done some damage. 

By putting bad apples into the mar- 
ket. sponsors have soured the institu- 
tions which are now looking much 
more carefully at the new goods they 
offer. And it is not just those involved 
in the disasters that suffer. Because 


US automotive ma n u factu rers 


Share pices relative to the 

SAP Industrial index 

500 



some sponsors have been less fastidi- 
ous than they ought, the prices of 
good quality flotations bave been 
forced down, raising the cost of capital 
across the market 

There seems to have been a specific 
problem with management buy-outs. 
This may reflect the feet that by the 
end of last year stock market valua- 
tions were so much higher than trade 
sale prices that venture capital back- 
ers floated businesses which were not 
cut out to be independent quoted com- 
panies. 

In addition to the pressure on prices, 
the disasters have resulted in some 
marginal floats being pulled. The feet 
that new issues since May have com- 
fortably outperformed the index may 
suggest that the market has already 
corrected itself. Sceptical institutions 
reply that problems take time to show 
through. But then they bave every 
interest in talking prices down fur- 
ther. 

UBS 

The battle over Union Bank of Swit- 
zerland's special voting shares could 
be moving in the board’s favour. Mr 
Martin Ebner, the Zurich financier, 
has accumulated a large position in 
the bank's registered shares - which 
have extra voting power - with the 
aim of forcing changes in UBS's strat- 
egy. The board has countered by push- 
ing for the abolition of the registered 
shares' privileges and their conversion 
into bearer shares. Yesterday, follow- 
ing the publication of the board's lat- 
est missive on the subject, the pre- 
mium enjoyed by the registered shares 
over bearer shares sank to 15 per cent. 
For most of the year, the premium las 


been over 25 per cent. UBS's desire for 
a single class of shares is all very well. 
But its method of achieving it flies in 
the face of natural justice. The change 
in share structure will be put to a 
combined vote by both bearer and reg- 
istered investors. That means the reg- 
istered shares could lose their privi- 
leges, even if most vote against the 
board's proposal at next month's 
shareholder meeting. 

UBS argues that the new share 
structure would benefit the registered 
shareholders because it would stop Mr 
Ebner forcing a change in strategy 
that would damage the bank. That 
seems implausible, since the premium 
enjoyed by the registered shares 
would vanish completely if the board 
carried the day. The least UBS should 
do is allow registered shareholders a 
separate vote on the proposals. If the 
beard is so confident in its case, it 
should have nothing to fear. 

Lloyd’s 

Citibank still has some work to do 
on its scheme for allowing Lloyd's 
Names to convert to Limited liability 
status. But it is the sort of arrange- 
ment that should appeal to many 
gristing Names. Those hardened gam- 
blers looking to get the most out of the 
market's recovery may want to retain 
their unlimited liability. This enables 
them to write business representing 
up to five times the funds lodged with 
Lloyd's. The Citibank scheme will 
offer gearing of only 2:1 though it may 
be possible to increase it to 3:1 
through the use of a reinsurance con- 
tract. But such returns may well be 
attractive enough for existing Names 
who are no longer prepared to put 
their last collar stud at risk. 

Similar schemes are less likely to 
appeal to potential new investors in 
the market even if Lloyd's reduced the 
limit on new limited liability members 
from the current £1.5m. Though the 
new breed of Lloyd's corporate 
vehicles have not proved particularly 
popular with private individuals, they 
should offer new investors similar 
potential returns as under the Citi- 
bank scheme. They also have the 
important advantage that investors 
can sell all or some of their interest at 
any time. 

For Lloyd's itself, such schemes 
should slow the loss of capital put up 
by Names. But they will do nothing to 
curb the market's high costs. Adminis- 
tering the affairs of thousands of tiny 
companies will be just as expensive as 
dealing with a multitude of Names. 




The Busiest 
Stations 
in the City. 



Sun SPARCstations. 

The Nol platform for shunting stock. 
And shares. 




<C a9 . ,.ijy f 
£1! f 



. rjj 




. . .itt. S 




) 


* ! 




TODAY’S TEMPERATURES 


Situation at 72 GMT. Temperatures maximum for day. Formats by Mateo Consult ot the Netherlands 



Maximum 

Be$ng 

sun 

18 

Caracas 

shower 

32 


Celsius 

Belfast 

shower 

3 

CardlH 

ram 

11 

Abu Dhabi 

Bun 

33 

Belgrade 

dr cd 

17 

Casablanca 

dowdy 

23 

Accra 

dowdy 

31 

Beilin 

cloudy 

11 

Chicago 

fair 

14 

Algiers 

fair 

25 

Bermuda 

shower 

28 

Cologne 

cloudy 

11 

Amsterdam 

shower 

12 

Bogota 

shower 

21 

Dakar 

cloudy 

31 

Afters 

fair 

23 

Bombay 

fair 

36 

Qatas 

fair 

23 

Atlanta 

fair 

25 

Brcsseta 

shower 

12 

Duffs' 

sun 

33 

B.Air» 

fair 

18 

Budapest 

rain 

12 

Dubd 

sun 

32 

BJham 

shower 

11 

C.hagon 

shower 

9 

Dud In 

cloudy 

10 

Bangkok 

shower 

31 

Cairo 

8U1 

32 

Dubrovnik 

shower 

20 

Barcelona 

far 

18 

Cape Town 

fair 

21 

Edinburgh 

shower 

10 


No other airline flies to more cities 
around the world. 

Lufthansa 


*... 
v -• « 


Faro 

shower 

23 

Madrid 

cloudy 

17 

Rangoon 

fair 

34 





Frankfurt 

cloudy 

11 

Malorca 

fan- 

21 

Reykjavik 

shower 

2 



L_" 


Geneva 

fas 

12 

Malta 

fair 

23 

Rio 

fair 

26 





Gibraltar 

shower 

20 

Manchester 

shower 

11 

Rome 

sun 

21 





Glasgow 

shower 

10 

Manila 

doudy 

32 

S. Frsco 

fair 

21 



V / 


Hamburg 

dowdy 

10 

Melbourne 

shower 

30 

Seoul 

sun 

18 



L t 


Helsinki 

rain 

8 

Mexico City 

Hot 

21 

Singapore 

shower 

32 





Hong Kong 

fair 

27 

Miami 

fc* 

27 

Stockholm 

fair 

9 





Honolulu 

Fair 

32 

Mian 

sun 

16 

Strasbourg 

drazl 

13 



*■ 1 

•l 


Istanbul 

Jakarta 

Jersey 

sun 

fair 

rain 

20 

32 

13 

Montreal 

Moscow 

Munich 

fair 

doudy 

fair 

12 

10 

11 

Sydney 

Tangier 

Tel Aviv 

fair 

shower 

sun 

26 

23 

33 




Karachi 

fair 

34 

Narrow 

shower 

26 

Tokyo 

cloudy 

13 




Kuwait 

aim 

34 

Naples 

sun 

22 

Toronto 

shower 

11 

Authorised Reseller 


" 1 . 


l_ Angeles 
Las Palmas 

fair 

23 

Nassai 

fair 

29 

Vancouver 

shower 

12 




shower 

25 

New York 

fair 

14 

Venice 

fair 

17 





Lima 

cloudy 

22 

Nice 

sun 

17 

Vienna 

rain 

12 





Lisbon 

London 

Lux.bourg 

Lyon 

sun 

IB 

13 

9 

13 

Nicosia 

fair 

29 

ft 

Warsaw 

Mlisehbwvhvt 

ram 

fair 

shower 

fair 

7 





CKXlcy 

doudy 

090 

Paris 

Perth 

shower 

cloudy 

fair 

Q 

14 

22 

wasronoon 

Wedngton 

Winnipeg 

16 

12 

12 

Morse Computers. 081-876 0404. 



- ^ ■ . 

Madeira 

shower 

24 

Prague 

doudy 

11 

Zurich 

drzd 

11 













17 



Your Swedish Telecom Partner 

UK Tel: 071 416 0306. UK Fax: 071 416 0305. 


FINANCIAL TIMES 


COMPANIES & MARKETS 



©THE FINANCIAL TIMES LIMITED 1994 


Thursday October 27 1994 


phone David Kngcrsw on 0952 293262 

Telford. 


IN BRIEF 


FTC agrees to 
$4bn Eli Lilly deal 

EHIiHy. toe US drugs company, has reached an 
outline agreement with the US’s Federal Trade 
Commission which will allow it to go ahead with 
the Planned $4bn acquisition of PCS, a pharmaceuti- 
cals distributor. Page 22 

LCDs lift Sharp 55% 

Sharp, the Japanese consumer electronics manufac- 
turer, increased nonconsolidated recurring profits 
by 55 per cent thanks to buoyant rig™*™* for Its Ha- 
ute crystal display panels and other electronic 
devices. Page 23 

ShwehoWers accept Packer’s memer plan 

Mr Kerry Packer’s plan to merge his two publicly- 
quoted media companies into a A$2bn (tJS$l.47bn) 
combined group was accepted without questions by 
shareholders yesterday. Page 23 

Lion Nathan expands Into China 

lion Nathan, the biggest brewer in Australian ana 
New Zealand, is planning up to three breweries in 
China as a way of diversifying from its mature 
home bear markets. Page 23 

Arco takes stake In Chinese refinery 

Atlantic Richfield (Arco), the US oil and natural gas 
group, has conditionally taken up 237.6m shares in 
Z h enhai Refining and Chemical Company, one of 
the biggest refineries in China. 

Page 23 

Packaging and construction lifts Tenneco 

Tenneco, the diversified US industrial group, 
its best third quarter in li years as its packaging 
and construction and farm equipment divisions out- 
performed expectations. Page 22 

US drugs groups post solid sales sprowth 

Marion Merrell Dow and Rhone-Poulenc Rorer, the 
US pharmaceutical groups, both showed solid reve- 
nue gains in the third quarter, but only RPR, a sub- 
sidiary of France's Rhdne-Poulenc, was able to 
boost its bottom line. Page 22 

Anheuser lifts toco me to record 

Anheuser-Busch cemented its position as the top 
brewer in the US during the third quarter, report- 
ing record sales and profits. Page 20 

Pro ct er & Gamble 18% ahead 

Accelerating volume growth produced a record 
quarter at Procter & Gamble, the US consumer 
products group, with net gamings up 18 per cent 
Page 20 

US BFI group warns Attwoods investors 

Browning-Ferns Industries, the US waste group 
stalking Attwoods, yesterday sought to steal a 
marrh qq the UK company by urging investors to 
be wary of promises made in fighting off the £364m 
cash bid. Page 25 

Sock Shop puts best foot forward 

Sock Shop, the 1560s UK retalfizig phenomenon 
which collapsed four years ago, amid come hack to 
the market Page 25 

Companies fa this Issue 


AT&T 

Abtrust Lloyd's 
Air France 
Apolo Metals 
Archer 

Atlantic Richfield 
Attwoods 

Austrin Cons. Press 
Aviation Metals 
BK Vision 
BM 

Banco Santander 

Banesto 

Barr & Waflece 

Boeing 

Bourne End Props 
Brtdport-Qundry 
Browrtng-Ferrfs 
Butte Mining 
CaHuna 
CentraGoMj 
Churchill China 
Contra-Cyclical 
Courtyard Leisure 
Davies pY) 

Dtekson Concepts 
DuPont 
B Ore Mining 
Stem 

Essex Furniture 
Eurotunnel 
Exploration Co 
Fanuc 

Fort It 

Fart Europe 

GEC-Marconi 

GKN 

Giewe 

Govett Oriental 

Market Statistics 


7 

Hansoi Paper 

23 

28 

Kramat Tki Dredging 

23 

1 

Kvrfk-Flt 

25 

26 

UonNathwi 

23 

25 

MCI 

7 

23 

Microsoft 

4 

a 

Midland & Scottish 

28 

23 

Motynaux Estates 

28 

28 

Murray Spot Capital 

26 

18 

Nine Network 

23 

25 

Nordbanken 

1 

17 

Ocean Group 

11 

17 

Olives Property 

25 

25 Peugeot Tatoat 

11 

9 

Porton International 

18 

26 

Prowling 

. 25 

26 

Prudential Corp. 

18 

25 

Rentokfl 

28 

25 

Saab 

17 

26 

Scott Paper 

14 

28 

Soaperfect 

28 

25 

Sacs Trust Scotland 

28 

28 

Sectxum 

1 

25 

Seita 

17 

28 

Sharp 

23 

23 

Skoda 

4 

17 

Sock Shop 

25 

28 

Stanhope 

17 

18 

Staton 

18 

26 Stylecraft 

28 

11 

TCI 

9 

26 

To! Power 

9 

23 

Time Products 

26 

17 

Trace Computers 

28 

18 

UBS 

1*18 

11 

US West 

9 

9 

Venturi hv Trust 

26 

26 

Woolwich Bufld. Soc. 

18 

28 

Zhenhai Refining 

23 


fAmual reports ante 
Benchmark God bands 
Band faCrea and options 
fend prices and jMds 
CmnaUes prices 
DMdsnds announced, UK 
B4S omsicy rates 
Eurobond prices 
Rod fewest Wees 
FT-A World ImScn Be 
FT Gold Hue Index 
FtflSMA kM bond an 
FT-SE Actuaries takes 


34-35 Foreign exchange 
24 CKsprlcei 
24 Ufte equty options 

24 London share ssnrlcs 

32 London bad options 

25 Managed funds sendee 
38 Money markets 

24 New inti bond Issues 
24 Now Yttk doe sendee 
kpsge tecant issues, IK 

33 snort-arm w rates 
24 US htawt rates 

33 WMd Stock Matas 


Chief price changes yesterday 


MRKjmf 


DetaWBoz 

Prauueg 

wa 

Mi 

DM : 

HMfYOAKtD 


Case Fcm Eq 

Mctbsn 

FttpUnrfe 

8m Lee 


BL* saw - i 

New vert prims at IMOpm. 


07 

fOMM 

ttcor 

645 


38 

ITS 

BC 

S25 

♦ 

11 

205 

a*Mrf 

4Z7£ 

♦ 

as 

11 

EuqRSCB 

580 

+ 

10 

13 

ne* 

Pwiqot 

750 

- 

10 

a 

spieBBito 

240 

— 

8.4 

li 

TOKYO (Van) 
RMS 

MdSM 

788 


36 

m 

Mpsno 

585 

+ 

22 

Stt 


500 


15 

19fc 

1H 

rwBm 

teaks 

SS7 

- 

19 

Bsa Ota 

m 


80 

1 

Taiau Land 

515 

- 

17 


LOtBOM (Mm) 


m 

Abbey Pmk 

fim 

8BWW 

to*ort Gne 

OaeeGM 

Cm 

UoFh»ey 

PSODM 


am + 3 

346 + 37 

541+7 

82+7 
ioi + e 

105 + « 

n + 4 

336 + 10 

eoz + a 

3Q8 + 10 

in* * t* 
738+13 


BdWWJ 38-4 

SadowodH Ft 19 - 2B4 


Caradcn 20-9 

GDtfWdi nt ei - 18 

Merichna 104 - * 

Estamfcp 742N - las 

IWOMI 395 - 16 

SfntorEnp tO - * 

UUFftndfB 483 - 15 


DuPont chemical earnings up 97% 


By Tony Jackson In New York 

DuPont of the US. the world's 
largest chemical company, con- 
finned the strength o£ the cycli- 
cal upswing in its industry with a 
97 per cent jump in third quarter 
net earnings from its chiming) 
operations. 

The upswing was partly offaot 
by a 5 per cent drop in earnings 
from its Conoco oil subsidiary. 
Net earnings before extraordi- 
nary items were up 86 per cent at 


The rise in chemical profits 
was driven by higher volumes 


and by reduced fixed costs, the 
company said, with the two fac- 
tors contributing equally. How- 
ever, selling prices remained flat 
despite sharp volume increases. 

The rise in group earnings was 
helped by a sharp tumround in 
DuPont's diversified businesses 
division, where profits jumped 
from 56m to S135 hl the company 
said this was due to the recovery 
in its coal Tninrng business, hit 
by strikes last year, and better 
profits in agrochemicals and 
medical products. 

In DuPont’s own narrowly 
de fjpwi t»hpmieaig division, earn- 


ings were up 126 per cent at 
$104m. Volume was rose 9 per 
cent, with a 4 per cent rise in the 
US and a 27 per cent rise in the 
rest of the world. Prices were up 
2 per cent 

In the polymers division, earn- 
ings were up 149 per cent at 
$177m. Volume was up 15 per 
cent, made up of U per cent in 
the US and 21 per cent elsewhere. 
Prices, however, were X per cent 
lower. Earnings in the fibres divi- 
sion were up 50 per cent at 
£L64m. Volume was 6 per cent 
higher and prices were static. 

Oil earnings were down 5 per 


David Buchan sees Seita stub out foreign hopes 

France 
lights up 
tobacco 
sell-off 


T he French government 
yesterday lit the match far 
an eventual sale of Seita, 
the French state tobacco com- 
pany - but privatisation of the 
183-year-old concern may, like 
one of Its own Gauloise ciga- 
rettes, he a Blow bum. 

Mr Bdmopd Alphandfery, the 
economy miwng tw, said yesterday 
he Was l yninf the tendering far 
French and foreign banks to 
advise the government on the 
sale of Seita, which has already 
chosen Credit Commercial de 
France and Socfote Gdnbrale to 
advise it 

Seita has thrown cold water on 
the enthusiasm of the world’s 
tobacco giants by saying it 
wanted “no foreign tobacco 
maker" to take a stake. 

It confirmed that it would like 
the state to keep nearly ID per 
cent of its 100 per cent stake, 
leave about the same for its 
employees, and award 25430 per 
cent to a core group of stahle 
gharehnlflurs who might inrindp 
foreign institutions. 

Foreign tobacco groups would 
otherwise he keen to taka a stake 
in a Seita, which distributes 
other companies' cigarettes and 
has the addprf cashflow bonus of 
being a collector of taxes, hi par- 
ticular, BAT Industries, the UK- 
based tobacco conglomerate, 
appeared to see its 1583 "finan- 
cial" investment in the Banque 
Nationals de Paris privatisation 
as smoothing its path politically 
to an “industrial” investment in 
Seita. 

The decision to keep foreign 
manufacturers out is not just 
because Seita considers itself. 



• Market atom by totooco type (%) • 




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tetnd- •- - 






,v _ • * *T ’ "| ‘ 

. \_Jir * « .• t r i •' t 


*• tWStfr .'98? 89. ; SD SI ' 92 . 83 1950 * 94 92 93 






with its Gauloises, Grtanes, its 
Alain Delon brand of cigarette 
and its Johnny Hallyday lighter, 
as much part of the French heri- 
tage as camembert eftees* 1 - 

With privatisation, Seita will 
lose Its legal monopoly on 
tobacco manufacture in France, a 
right that has become meaning- 
less with the free entry into 
France of cigarettes made in 
other European countries. But it 
intends to keep its de facto 
monopoly on distribution of ciga- 
rettes in France to the country's 
36,500 tnbacs, or tobacconists. 

Allowing foreign cigarette mak- 
ers into its capital would jeopard- 
ise the neutrality of its distribu- 
tion system, says Seita, while 
adding nothing in terms at exter- 
nal expansion. Seita already has 
production and marketing agree- 
ments with BAT in Germany, 
with Reamstma of Germany in 
several markets in western 
Europe and now in eastern 
Europe, and with Japan Tobacco 
in Japan. 


But Philip Morris, the US 
tobacco giant, recently threat- 
ened to break its distribution 
agreement with -forty if Hm» latter 
took in another foreign tobacco 
mm puny as a shareholder. Seita 
ripnips ceding under such pres- 
sure, but somfi industry analysts 
believe that Philip Morris, which 
h«g 29 per 1 rant of the French 
market (behind Seita’s 45 per 
cent), could have carried out its 
threat 

Distribution is certainly a mon- 
ey-spinner for Seita, whose prof- 
its rose from FFr447m in 1992 to 
FFr585m (5110m) last year on 
turnover that increased from 
FFrl3-9bn to FFrl4.1bn. 

Seita also collects the 75 per 
cent rate of state tax levied on 
total tobacco sales - FFr63bn last 
year - passing it on to the state 
with a two to three- week delay. 

The privilege of being able to 
play with the taxpayer's money 
for that period accounted for 
FFr200m of Seita’s profit last 


Saab on course for profit as 
sales of new model take off 


By Christopher Brown-Humes 
in Stockholm 

Saab Automobile, the Swedish 
carmaker, yesterday announced 
a SKrZ84m ($39. 4m) pre-tax 
profit for the first nine months 
and said it was on course for its 
first full-year prefit in six years. 

The result was a SKrl.34bn 
improvement on 1993’s figures 
and reflected cost-cutting, higher 
sales volumes and the weakness 
of the Swedish krona. 

The third-quarter profit of 
SKrl44m was the group’s second 
successive quarterly surplus, 
Saak's losses had dated back to 
1989, when General Motors of 
the US became a joint owner in 


the company, alongside Saab- 
fogrifa. in the third quarter of 
1993 the group made a SSx369m 
loss. 

Saab's tumround was reflected 
in higher sales for the nine 
months, which rose to 
SKrl3.06bn from SKrLL471m. 

Retail sales jumped 24 per cent 
to 65,700 units from S2£00. 

The success of the group’s new 
900 model, launched last year, 
was the most significant factor 
In the upturn. It accounted far 
40,600 sales in the nine-month 
potiod, compared with 25,100 for 
the older and biggs- Saab 9000. 

The company experts to sell 
about 92,000 cars tn 1994, com- 
fortably surpassing last year’s 


73,600 and the break-even level 
of 83,000. 

At one point the group hoped 
1994 sales might rffaih as Ugh 
as 95,000. A shortage of convert- 
ible and sdoor 900 models, par- 
ticularly in the important US 
market, is the main reason it 
expects to fall short of tills level. 

US sales are expected to reach 
23,000, compared with 18,000 
last year. The group’s other 
improving markets include Swe- 
den - where nine-month sales 
rose to 12,300 from 7.000 - 
Taiwan, Australia and Italy. 

The company said the weaker 
dollar would only have a limited 
impact on its 1994 figures, partly 
because of hedging: 


Stanhope to show net assets 


By Simon London in London 

Stanhope, the property 
development c om pany which is 
in last-ditch refinancing negotia- 
tions with Its banks, is expected 

to return to positive net assets 
when it announces full-year 
results. 

Such a result would strengthen 
the company’s position as it 
morohes far a partner willing to 
inject up to £100m (5168m) of 
equity an terms that will satisfy 
banks owed £14Qm. 

A refinancing most be agreed if 
its syndicate of 16 landing banks, 
led by Barclays, are to extend 
credit beyond December 19. 

Stanhope's main assets are 
held in its 50 per cent stake in 
Broadgate Properties, which 
owns much of the Broadgate and 
Ludgate office developments in 
the City of London. 

Broadgate Properties’ results, 
which are due to be published 
today, are expected to show a rise 


in net assets, including loans 
from shareholders, to more than 
£23Qm, from £148m last year. 

Analysts estimated yesterday 
that this would be enough to lift 
Stanhope into a position of posi- 
tive net assets, even though some 
of its investments - notably its 
joint venture with Trafalgar 
House in Chiswick, west London 
- may have fallen in value. 

Last published figures showed 
that Stanhope had negative net 
assets of £15.7m at June 30 1993. 

White a large rise in the value 
of Broadgate would be encourag- 
ing for Stanhope, Mr Stuart Lip- 
ton, chief executive, is still 
searching for an i nvestor wilting 
to make the n ecessary injection. 

Earlier this month the com- 
pany issued a statement which 
said that potential rescuers were 
unlikely to match the prevailing 
29p share price. Yesterday the 
shares dosed at 12p. 

British Land, the investment 
company run by Mr John Sttblat 


which bought a 29.9 per cent 
stake in Stanhope in February, 
has made no secret of its willing- 
ness to step in. 

But Mr ffitblatis main interest 
is acquiring Broadgate, which 
Stanhope is reluctant to sell 
while the property market is 
moving in to* favour, 

A forecast commissioned by 
Stanhope from Jones Lang Woot- 
ton, the surveyors, suggested 
that Broadgate Properties’ assets 
could be worth anything up to 
£1.3bn in three years time, 
against an estimated nbn today. 

If the hanks believe such fig- 
ures they may agree that selling 
50 per cent of Broadgate now 
would not be the best way of 
realising value from (me of the 
City's best office developments. 

Others understood to be inter- 
ested in investing in Stanhope on 
the right terms include Morgan 
Stanley and Goldman Sachs, 
which both nm substantial prop- 
erty funds. 


cent overall at 5172m, with a 23 
per cent drop in upstream earn- 
ings and a 22 per cent rise in 
downstream earnings. Upstream 
operations were hit by lower gas 
volume, lower crude oil volume 
in the US and higher exploration 
costs. Downstream earnings were 
helped by bigger US margins in 
refined products and higher turn- 
over at the group’s refineries. 

DuPont wiij that while chemi- 
cals prices were flat year-on-year, 
they were up modestly from their 
low point in the second quarter. 

A number of price increases 
had been ann^mvi-M for tiw third 


and fourth quarters. The com- 
pany said: “This is a period of 
some cost push, and growing 
demand". "My guess is that in a 
year’s time you’ll see prices up 
by a few percentage points at 
least” 

In the third quarter of last year 
DuPont made charges of 5L3bn 
to cover job cuts and other 
restructuring costs. 

In July, it said it was cutting 
1,200 jobs at its European nylon 
operations. Yesterday, the com- 
pany said the period of job losses 
appeared to he drawing to a 
dose. 


Banco Santander 
begins to reap 
Banesto benefits 


By Tom Bums In Madrid 

Banco Santander is heading for 
record profits this year after 
the Pta281bn ($SL2bn) acquisition 
last April of Banco Esjafiol de 
Cridito (Banesto), the troubled 
hank whose board was sacked 
fry the Bank of Spain late last 
year. 

Santander’s profits for the first 
Tima months of Ptal07bn, after 
including are t>w high- 

est result ever posted by a Span- 
ish hanking gr o up for tills period. 
Without Banesto, Santander’s 
pre-tax profits were Ptaioo^bn, 
5.9 per cent up on the same 
period last year. 

The consolidation of Banesto, 
formerly the fourth biggest Span- 
ish h ank , raised Santander’s 
average total assets from 
Pta9Jt70bn to Ptal6327bn, out- 
stripping those of Banco Bflbao 
Vizcaya (BBV), the not biggest 
domestic banking group, by more 
than Pta4J)00bn. 

Banesto was consolidated in 
August, after the formal comple- 
tion of tiie acquisition. Mr Fmflin 
Botin, Santander’s c hairman , 
said the subsidiary bank's 
performance ova- the past two 
months had “confirmed the 
favourable forecasts of Banesto’s 
future and vindicated a strategy 
designed to consolidate a wide 
and solid client base in the Span- 
ish market". 

San t and er's figures indicated 
that it had so far been able to 
absorb Banesto without apprecia- 
bly damaging its balance sheet 

Santander’s return on equity 
stood at 19.58 per cent excluding 
Banesto and at 19.73 per cent 
including it 

The group's return on assets 
was L01 per cent without Ban- 
esto and dropped marginally 


to 038 per cent with Banesto. 

Non-performing loans as a per- 
centage of banking group’s total 
amounted to 637 per cent against 
3.19 per cent if Banesto is not 
included in the consolidated 
results. 

Despite the higher figure 
resulting from Banesto’s inclu- 
sion, coverage stood at 79.14 per 
emit and at KXL61 per cent if real 
guarantees are taken into 
account 

Santander posted a net interest 
margin of Pta220bn including 
Banesto. Without Banesto, it was 
Ptal88hn, 6 per cent higher than 
last year’s third quarter. 

Without Banesto, Santander 
increased its operating profit by 
103 per cent to Ptall8bn. Ban- 
esto’s addition to the consoli- 
dated account lifted the group’s 
operating profit to Ptal26bn. 

The high totals posted by San- 
tander ramp, in spite of strong 
losses in treasury operations. 
Income from fixed income and 
currency dealings fell from 
Pta74bn in the first ntnp months 
of 1993 to Pta7_5hn, inducting pro- 
visions of Ptal&5bn. 

Banesto was the object of a 
large rescue plan which Included 
a PtalSOhn capital injection, the 
purchase of Pta285bn worth of 
damaged assets by the Deposit 
Guarantee Fund, and a zero-inter- 
est loan of Pta315bn to offset cur- 
rent losses. 

Yesterday’s results indicated 
that Banesto was already earning 
money for Santander. It added 
just over PtaSbn to the Santander 
group’s third-quarter net profits 
of PtaSObn although the over- 
whelming proportion, of this con- 
tribution was provided by Ban- 
esto’s 25 per cent stake in the j 
profitable Portuguese bank Totta 
& Apores. 


Ford soars 
to record 
$l.lbn in 
quarter 

By Richard Waters in New York 

Ford Motor, the US’s second 
biggest carmaker, reported 
record after-tax profits for the 
third quarter. It was lifted by 
strong demand for new vehicles 
in North America and a continu- 
l mg recovery in Europe. 

Mr David McCamxnon, trea- 
surer, said sales and profits were 
likely to grow for some time to 
come. “Unless interest rates go 
way up, this recovery will be 
sustained for three, four, five 
more years”, he said. 

There was no sign that the rise 
so far seen in US int e res t rates 
had stunted demand, he added. 
Ford’s results echo record earn- 
ings reported by Chrysler two 
weeks ago, though General 
Motors, the US’s biggest car and 
truck maker, saw Its recovery 
falter during the three months to 
September 30. 

Overall, Ford’s after-tax profits 
jumped to Sl.lbn, 2% times their 
level of a year ago. The biggest 
factor behind the increase was a 
5245m improvement in profits 
from vehicle sales in North 
America, which reached 5529m. 
A 17 per cent increase in vehicle 
sales and lower discounts offered 
to customers drove the improve- 
ment. The North American 
resnlts also reflected lower pur- 
chasing costs and the fact that 
advertising spending rose less 
rapidly than sales: 

Leaving aside losses at Jaguar, 
Ford earned $25m in Europe - 
the first time time it has not 
reported a third-quarter loss for 
five years. The summer period, 
with its model changeovers, is 
traditionally the weakest period 
of the year for carmakers. 

“In Europe, sales are still 13m 
[vehicles] a year below what we 
consider to be normal - there’s 
lots of improvement to come”, 
Mr McCammon said. Jaguar, 
which launched a model during 
the period, lost 953m, compared- 
with $43m (before a restructur- 
ing charge) the year before. 

Results were lifted by record 
earnings in financial services, 
which climbed 34 per cent to 
5523m. This partly reflected 
higher leasing and other financ- 
ing eamings linked to the sale of 
more vehicks- 

The financing business added 
$290 of profit for each vehicle 
Ford sold in the US during the 
quarter, taking the total profit 
per vehicle to $865. Earnings of 
51*04 a share, up from 40 cents a 
year ago, were recorded on sales 
of 530.61m, up from $243bn. 

Lex, Page 16; 

Ford of Europe, Page 18 


r appears as a mnrtrr of record oo/p. 


Pearson Sterling Two pic 

issue of Bonds unconditionally and irrevocably guaranteed by 

Pearson pic 


£125,000,000 

9 ] A per cent. Guaranteed Bonds due 2004 


NafWbst Markets Barclays de Zoctc Wedd Limited 


Cazenovc & Co. 


Deutsche Bank AG London 


HSBC Markets Merrill Lynch International U mired 


UBS Limited 


Rabobank Nederland 


Pearson was advised by 
hazard Brothers & Co., Limited 


\\-\t\Vln ] \liRki. I s 


hatjbjr National Pteaimur Ban! Pk. a Member of'lMSO. 


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1 

J 



IS 


FINANCIAL TIMES THURSDAY OCTOBER 27 1994 


★ 

INTERNATIONAL COMPANIES AND FINANCE 


Premium on 
UBS shares 
slides ahead 
of EGM 


Tumround aided by modest recovery in new car market 

Ford Europe arm posts $25m profit 


By John Griffiths In London 

The continuing modest 
recovery in Europe’s new car 
markets and further cost- 
cutting and restructuring 
helped Ford achieve a S25m 
net profit on ite European 
automotive operations, exclu- 
ding Jaguar, in the third quar- 
ter. 

This represents a sharp turn- 
round on its S2l7m loss in the 
same period of 1993 and contin- 
ues a trend apparent since the 
beginning- of this year. 

It follows a S3l0m tumround 
in the second quarter, when a 
net profit of $244m was 


achieved compared with a net 
loss of S66m in the same period 
a year ago. 

The result lifts profit for the 
first nine months to $378m 
compared with a $264m loss 
the previous year. 

Until this year. Ford’s Euro- 
pean operations, excluding Jag- 
uar, had suffered three consec- 
utive years of losses totalling 
$L5bn. 

“Europe is in the early 
stages of economic recovery 
and we expect to see continued 
improvements in most [Euro- 
pean] countries.” Mr Alex Trot- 
man, Ford chairman, said yes- 
terday. 


Ford expects Europe's total 
new car market to recover to 
13.3m units this year, up from 

12 .5 m in 1993. 

Its own car sales in the 
region in the first nine months 
of this year reached 1979913, a 

7.5 per cent rise on the year- 
ago level. Commercial vehicle 
sales were 3.5 per cent higher 

at 157997. 

Ford’s share of Europe's car 
and commercial vehicles mar , 
bets rose marginally in the 
third quarter, to 12.7 per cent 
from 129 per cent in the year- 
ago period. 

Mr Trotman made clear that 
the financial recovery is expec- 


ted to be maintained next year 
as the market recovery contin- 
ues and further cost-cutting 
benefits accrue. 

Capacity utilisation is expec- 
ted to increase within the next 
three years through the launch 
of a car smaller than the 
Fiesta, although so far no deci- 
sion had yet been made on a 
production location. It may 
receive a further lift if the 
go-ahead is given for produc- 
tion of small cars to be sold 
under the badge of Mazda, in 
which Ford has a 249 per cent 
stake. 

A decision is expected before 
the end of November. 


Porton International sold for £65m 


By Tim Burt 
in London 

Porton International, one of 
the UK's first biotechnology 
companies, yesterday closed 
the chapter on a history 
dogged by failure to deliver 
promised profits and block- 
buster products by agreeing to 
sell its business for £65.5m 
($107 9ml. 

The private group, founded 
in 1983 by Mr Wensley Haydon- 
Baillie - a reclusive multi- 
millionaire - has recom- 
mended an offer by Beaufour 
Ipsen. a family-owned French 
pharmaceutical company. 

As part of the deal, worth 
£13.40 a share in cash or loan 
notes, Mr Haydon-Baillie 
stands to receive more than 


By Alison Smith 

UK sales of life and pensions 
policies by Prudential Corpora- 
tion. the UK’s largest life 
insurer, fell in the first nine 
months of this year, with a 30 
per cent fhll in sales of single 
premium individual pensions. 

Figures for Prudential's new 
business published yesterday, 
showed generally subdued 
sales of regular and single pre- 
mium products, but sales of 
the more flexible products 
introduced by Prudential in 
the summer were more encour- 
aging. 


£20m on his 33 per cent holding 
in the company. 

Since he stepped down as 
chairman two years ago. the 
group has sold off non-core 
businesses and concentrated 
on manufacturing pharmaceu- 
tical products. 

Saying that the company had 
turned over a new leaf. Mr 
Tony Gover, executive vice- 
chairman and a long-time asso- 
ciate of Mr Haydon-Baillie. said 
the past problems bad been 
caused by “one or two products 
which did not come to frui- 
tion”. 

During the 1980s, institutions 
invested £76m in the group on 
expectations that its products 
would generate profits of 
£140.6m by 1990. In the event, 
its main anti-herpes medica- 


This is the first time Pruden- 
tial has released new business 
figures on a quarterly basis. 

Individual pension sales 
were particularly depressed. 
This reflected public concern 
about the standards of selling 
in the personal pensions 
sector. 

The concern was sparked by a 
report last year suggesting that 
nine out of 10 cases where an 
investor was transferring a 
lump sum from a pension 
scheme into a personal plan 
did not meet the regulators' 
standards. 

Concern is likely to be inten- 


tion proved ineffective and 
profits fell well short of tar- 
gets. 

At the same time, the 
company caused a stir by 
spending large sums on opu- 
lent Mayfair offices and execu- 
tive salaries. 

It also earned a reputation 
for excessive secrecy, with Mr 
Haydon-Baillie employing a 
former member of the crack 
Special Air Service as a per- 
sonal security adviser. 

Political concerns, mean- 
while. were aroused when MPs 
demanded to know why the 
government signed a deal with 
Porton allowing it to develop 
commercial uses for ideas pio- 
neered at the state-owned Cen- 
tre for Applied Microbiology 
and Research (CAMR). 


sified after a regulator's report 
earlier this week suggesting 
that h undr eds of thousands of 
people may have been wrongly 
advised to take personal pen- 
sions and leave, or not 
to join, their employers' 
schemes. 

Sales of annual premium 
individual pensions fell 6 per 
cent to £S8m ($139m), while 
single premium pension sales 
fell 30 per cent to £21 lm, dur- 
ing the nine months. 

The division of the insurance 
and savings elements of a con- 
ventional life insurance prod- 
uct - into Prudence Family 


While not commenting on 
Porton's past problems, Lazard 
Brothers, Beaufour Ipsen's 
financial advisers, said* “This 
is a company on a significant 
recovery trend." 

In the first half of this year, 
it reversed earlier losses with 
pre-exceptlonal profits of 
£l.85m on turnover of 
£25. 6m. 

The deal, financed with 
£58. 3m of borrowings and 
£7_2m of shareholder equity, 
offers Beaufour Ipsen manufac- 
turing and distribution facili- 
ties in Britain and the US. 

Porton's existing senior man- 
agement and staff will be con- 
tinue run the business as part 
of Speywood Holdings, a new 
subsidiary set up by Beaufour 
Ipsen. 


in UK 


Cover and the Prudence 
Savings Account - appeared to 
be paying off. 

The savings account 
attracted about £i3m of annual 
premiums and about £72m in 
single premiums. 

Mr Mick Newmarch, chief 
executive, said UK sales were 
“holding up well in a problem- 
atic market”. 

He noted advances in Pru- 
dential's Pacific operations. 
New business in Hong Kong 
and Singapore rose with higher 
sales of regular and single pre- 
mium products. 

Background, Page 25 


By lan Rodger in Zurich 

The premium of the registered 
shares of Union Bank of Swit- 
zerland on Its bearer shares 
tumbled yesterday to 14.6 per 
cent from 19.4 per cent. 

This is tts lowest level since 
September 29, when the bank 
announced its proposal to con- 
vert the registered shares into 
bearer shares, thereby reduc- 
ing their voting power. 

UBS is fighting an attempt 
by Mr Martin Ebner, a maver- 
ick Zorich broker-dealer, to 
swing a majority of votes at 
the annual general meeting 
next April in favour of strate- 
gic changes at the bank. 

An extraordinary general 
meeting will be held on 
November 22 to vote on the 
share conversion proposal. If 
accepted, it -would slash the 
voting power of Mr Elmer's 
BE Vision, a fond with 18 per 
cent of the registered shares. 

Yesterday, the bearer shares 
lost SFr5 to SFrI.230, but the 
registered shares, which have 
one-fifth of the bearers' par 
value, tumbled SFrl3 to 
SFr282. 

Some Swiss analysts said the 
premium slide indicated that 
investor sentiment was mov- 
ing towards UBS in the tense 
battle for proxies for the EGM. 

“I bave spoken to a number 
of large institutions, and it 
looks as if people are con- 
vinced that Mr Ebner has no 
strategy, so it is better to take 
the 15 per cent premium than 
get nothing.” said Mr Hans 
Kanfmann, head of Swiss 
equity research at Bank Julius 
Baer in Zurich. 

Analysts said UBS had been 
lobbying investors, and there 
was a suspicion that it has 
been supporting the premium 
to give registered shareholders 
an opportunity to limit losses. 

Other analysts said the pre- 
mium was hurt yesterday by 
the publication by UBS of tbe 
rules for registering shares 
before the EGM. New applica- 
tions may be accepted until 
November 17, but the bank 
reserves the right to reject 
applications after October 25. 
This increased the uncertainty 
over what could happen, an 
analyst said. 

Lex, Page 16 


Prudential pension sales suffer 


Statoil rises sharply after 
unrealised currency gains 


By Karen Fowl? in Oslo 

Statoil. the Norwegian state oil 
company, yesterday reported a 
sharp rise in nine-month pre- 
tax profit to NKrl2.85bn (*2bn) 
from NKrl0.42bn in the same 
period last year. 

The rise followed unrealised 
currency as a result of 
the weak dollar and came in 
spite of lower crude oil prices. 

While there are uncertainties 
over future currency and oil 
price developments, Statoil 
expects to achieve a substan- 
tial improvement in 1994 prof- 
its over 1993 when they hit 
NKrI2bn before tax. 

Group revenue rose 


JNKrl.7bn to NKr61.42bn as 
operating profit increased 
NKr700m to NKrl0.7bn. Net 
profits shot up NKr900m to 
NKri8bn. 

Net financial revenue rose 
steeply to NKr2.lbn from 
NKr374m as operating costs 
increased NKrl.lbn to 
NRr45.7bn. 

However, record crude oil 
production - 442,000 barrels a 
day versus 406,000 - failed to 
offset the effect of low prices 
and cut the exploration and 
production division's operating 
profit by NKrSOOm to 
NKr6.4bn. 

Statoil said the E&P division 
was likely to trim NKr2.3bn 


from planned annual opera- 
tional costs by the end of 1995. 

In addition, the Mougstad 
refinery is well on the way to 
achieving planned efficiency 
improvements of NKr375m 
annually. But the refining and 
marketing division suffered 
weak margins with operating 
profit cut NKr52m to NKr288m. 

Natural gas lifted operating 
profit NKr750m to NKr3.£bn, 
reflecting increased gas vol- 
umes and firmer prices. Oil 
trading and shipping lifted 
operating profit NKrl2lm to 

NKr553m, because of crude oil 
contracts secured during 
favourable rimes in a fluctuat- 
ing market 


Elkem improves to NKrl98m 


By Karen FossU 

Elkem, the Norwegian light 
metals producer, reported a 
sharp rise in nine-month pre- 
tax profit to NKxlSSm from 
NKrikm, helped by increased 
demand for its main products. 

However, the rebound in alu- 
minium prices failed to benefit 
the group because it had 
secured fixed-price, long-term 
contracts and forward hedging 
agreements in 1993 under 
softer prices. 

Primary al uminium prices 
shot up 40 per cent in 1994 and 
yesterday hit $1900 a tonne on 
the London Metals Exchange, 
thanire in part to cuts in capac- 
ity by western producers 
which has contributed to lower 
stocks and firmer demand. 


At the end of last year, when 
LME aluminium prices were 
$1,125 a tonne. Elkem signed 
contracts covering a large part 
of 1994 production, but based 
on 1993 prices. Elkem would 
not disclose contractual 
arrangements for 1994 sales. 

The company plans to cut 

al uminium output by 10,000 
tonnes from the fourth quarter 
and into 1995. 

Elkem intends to seek board 
approval for a four-year 
NK.r250m investment pro- 
gramme for its Lista alumin- 
ium plant in Norway, for 
which annual capacity will be 
upgraded by 10,000 tonnes and 
improvements to environmen- 
tal standards 

Nine-month group operating 
profit rose to NKr333m from 


NKr282m but the advance was 
stemmed by slightly weaker 
third-quarter operating profits 
compared with the previous 
two quarters. Elkem blamed 
this on a s easonal drop in sales 
during the summer and price 
reductions for ferrosilicon and 
manganese alloys. 

Elkem said Norway's diffi- 
cult energy market had con- 
tributed to unusually high 
prices for power supply during 
the summer and that it was 
disappointed by lower-than-ex- 
pected progress in improving 
productivity and cost savings. 
Operating costs rose to 
NKrSBbn from NKr52bn. 

The company expects 
demand for main products to 
continue to develop favoura- 
bly. 


Woolwich lifts stake in life unit 


By Alison Smith in London 

Woolwich Building Society, the 
UK's third largest, has moved 
to take decisive control of its 
joint-venture life Insurance 
subsidiary, of which Sun Alli- 
ance was the other share- 
holder. 

At the first opportunity for 
review of the arrangements for 
the company, Woolwich has 
increased its stake to 90 per 
cent from 51 per cent The cur- 
rent arrangements are also 
likely to be reviewed at some 
point 


The move is part of the 
unravelling of links between 
life companies and building 
societies, as the latter want to 
take fuller advantage of the 
powerful distribution opportu- 
nities in selling to their large 
numbers of customers and 
making use of their extensive 
branch networks. 

Halifax Building Society, the 
UK's largest, and Nationwide 
Building Society, the second 
largest, have announced plans 
to set up their own wholly- 
owned life subsidiaries, ending 
the arrangements by which 


they sold policies only of Stan- 
dard Life and Guardian Royal 
Exchange respectively. 

Of the 10 largest societies, 
only Alliance & Leicester, the 
fourth largest, and Northern 
Rock, the tenth largest, are 
still in tied relationships with 
life companies without having 
announced plans to end them. 

Mr Peter Robinson, Wool- 
wich managing director, said 
the society felt the broadly 
equal shares in the subsidiary 
did not now properly reflect 
the importance of the distribu- 
tion capability. 



“You know, it’s realty not that jar to the US. yield curve. 
W/iy, it's just across the pond.” 


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EFFICIENT WAY TO BENEFIT FROM SHIFTS IN THE HELD CURVE. 


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X 


FINANCIAL TIMES THURSDAY OCTOBER 27 1994 


19 


THE GERMAN 0 PFANDBRIEF 

SOLID VALUE FROM THE GROUND UP 


Understanding what makes good investment instruments tick is not always easy, but it's not 
hard to see why German Pfandbriefe - bonds issued to refinance mortgages and public loans - rank among 
today s top D-Mark investments. Consider these simple facts: First, Germany's K. || 26 private mort- 
gage banks pay Pfandbrief investors a daily average of DM 100,000,000 in interest, an 

amount generated by a time-tested system that accounts for 40% of all bonds m outstanding in 
Germany. Second, German Pfandbriefe usually provide higher yields than Ger- 
man Treasury bonds (Bunds) while offering equivalent safety. J f Third, no investor has 

ever failed to receive 100 % repayment on a 0 ' - German Pfandbrief held to maturity. 

The only thing complicated about Pfandbriefe in Germany are the regulations of the 


Mortgage Bank Act that are designed to ensure 
briefe are secured by 



asset quality for investors. For instance, Pfand- 
mortgages or by public-sector loans. They must be 


covered by separate fi^~s with at least identical yields and 
maturities. What's more, Pfandbrief issues are monitored by a state- 
designated trustee. And the banks are fully hable for each issue. 

These and other legal requirements make Pfandbriefe attractive to 
investors seeking safety. And they are easy to buy. Pfandbriefe can be 


purchased at any mortgage bank or commercial 


bank in Germany, or their correspondents abroad. I maintain a well-functioning secondary market. 


I 


German Pfandbriefe are officially quoted on 
German stock exchanges. Issuers actively 


WE PAY PFANDBRIEF INVESTORS AN AVERAGE 
OF DM 100,000,000 IN INTEREST. EVERY DAY. 


GERMANY'S MORTGAGE BANKS 

DEPFA-BANK, WIESBADEN 
BAYERISCHE VEREINSBANK AG, MUNCHEN 
HYPO-BANK, MUNCHEN 

DEUTSCHE HYPOTHEKENBANK FRANKFURT AG, FRANKFURT 
RHEINHYP, FRANKFURT 

DEUTSCHE GENOSSENSCHAFTS-HYPOTHEKENBANK AG, HAMBURG 
FRANKFURTER HYPOTHEKENBANK AG, FRANKFURT 
DEUTSCHE CENTRALBODENKREDR-AG, KOLN 
BAYERISCHE HANDELSBANK AG, MUNCHEN 


WESTHYP, DORTMUND 
BERLIN HYP, BERUN 

SUDDEUTSCHE BODENCREDITBANK AG, MUNCHEN 

MUNCHENER HYPOTHEKENBANK EG, MUNCHEN 

HAMBURGHYP, HAMBURG 

WORTTEMBERGER HYPO, STUTTGART 

NURNBERGHYP, NURNBERG 

HYPOTHEKENBANK IN ESSEN AG, ESSEN 

DEUTSCHE HYPOTHEKENBANK [ACT.- GE5.), HANNOVER 


BRAUNSCHWEIG-HANNOVERSCHE 

HYPOTHEKENBANK AG, HANNOVER 
ALLGEMEINE HYPOTHEKEN BANK AG, FRANKFURT 
RHEINBODEN HYPOTHEKENBANK AG, KOLN 
L0BECKER HYPOTHEKENBANK AG, LUBECK 
NORDHYPO BANK, HAMBURG 
BFG 1 HYPOTHEKENBANK AG, FRANKFURT 
WL-BANK, MUNSTER 

HYPOTHEKENBANK IN BERUN AG, BERLIN 


f. 








20 


INTERNATIONAL COMPANIES AND FINANCE 


Anheuser lifts income to record 


By Patrick Harverson 
in New York 

Anheuser-Busch cemented its 
position as the top brewer in 
the US during the third quar- 
ter, reporting record sales and 
profits as its Bud Light brand 
became the country's second 
most popular beer after Bud- 
weiser, the company’s flagship 
brand 

With Bud Light’s ascendance 


to the number two spot among 
all beers - it overtook Miller 
Brewing’s Miller lite brand in 
the process - Anheuser-Busch 
became the market leader 
in the regular, light and non- 
alcohol beer categories. 

This performance helped 
push the company's share of 
the domestic beer market from 
43.4 per cent to 44 per cent at 
the end of the quarter. 

The St Louis-based brewer 


said beer sales to wholesalers 
and retailers rose 2.7 per cent 
during the quarter, boosted by 
the successful debut this year 
of two new brands in the Bud- 
weiser family - Ice Draft and 
Ice Draft Light 
The introduction of new, 
derivative labels like “ice" beer 
is part of an attempt by lead- 
ing brewers to compensate for 
the recent decline in the mar- 
ket share of big-name brands. 


Anheuser-Busch said overall 
sales climbed 3.9 per cent to 
$3.7Sbn, which helped lift net 
income to a record 5329m, or 
$1.24 a share. 

In the same quarter a year 
ago. the company recorded a 
net loss of 575m due to 
restructuring and tax-related 
charges. 

Without the special items, 
third-quarter net income last 
year was 5311m. 


UTC ahead 
24% in third 
quarter 

By Tony Jackson 

United Technologies, the 
diversified US manufacturer, 
reported double-digit profit 
increases in four of its five 
divisions in the third quarter, 
but further profit falls in parts 
of its aerospace business. 

Net earnings for the group 
were up 24 per cent at 5194m, 
or 51.35 a share, and chief exec- 
utive officer Mr George David 
said the company was still on 
track to increase annual earn- 
ings by more than 30 per cent, 
or by $1 a share. 

The Pratt & Whitney aircraft 
engines division improved 
operating profits by 90 per cent 
to 5110m, on a 4 per cent 
decline in sales. 

The company said “the bene- 
fits derived from aggressive 
restructuring and cost reduc- 
tion programmes, including 
lower research and develop- 
ment spending, continue to off- 
set weakness in the aerospace 
industry”. 

However, profits from the 
flight systems division, which 
includes Hamilton Standard 
flight controls and Sikorsky 
helicopters, were 37 per cent 
lower at 557m, on sales down 
14 per cent The company said 
Hamil ton reached break-even 
in the quarter and was expec- 
ted to be in profit for the rest 
of the year. 

Operating profit in the Otis 
lift business was op 11 per cent 
at a record $lllm. 

The Carrier air conditioning 
and heating division increased 
profits by 11 per cent, to a 
record 5127m, underpinned by 
strong demand in the US and a 
recovery in Europe. 

Profits in the automotive 
division were up 20 per cent at 
531m. 


Boeing has flat third quarter 


By Patrick Harverson 
in New York 

Boeing, the world's largest 
aircraft manufacturer, yester- 
day reported third-quarter 
earnings and sales virtually 
imnhangftd from a year ago. 

The group blamed a fall in 
commercial aircraft deliveries, 
increased debt expense and 
lower corporate investment 
income, which offset the posi- 
tive impact of a lower federal 
income tax rate. 

Although Mr Frank Shrontz, 
ch airman, forecast that com- 


mercial jet deliveries this year 
would be slightly higher than 
forecast at 285. he said that 
year-end sales would still be 
about 15 per cent below 1993's 
total. 

Mr Shrontz also warned that 
sales would remain at “rela- 
tively low levels” through next 
year, and until the global eco- 
nomic conditions and the 
financial health of the world's 
airlines improved. 

On a more upbeat note, how- 
ever, the Boeing chairman said 
there were already signs of an 
economic pick-up in Europe 


and Asia which, combined 
with the sustained recovery in 
the US, augured well for the 
group's future. 

He also said there was evi- 
dence that the Tnain travel 
markets of the world were also 
showing signs of recovery. 

For the third quarter, Boe- 
ing’s net income was 5185m, or 
54 cents a share, compared 
with 5189m, or 56 cents, in the 
same period of 1933. 

Sales during the three 
months totalled $5.1bn, against 
$5^bn a year earlier. 


Procter & Gamble 18% ahead 


By Tony Jackson in New York 

Accelerating volume growth 
produced a record quarter at 
Procter & Gamble, the US con- 
sumer products group, with 
net earnings up 18 per cent to 
$792m on sales up 8 per cent at 
S8-2bn. Earnings in the US 
were up 12 per cent, and out- 
side the US by 23 per cent 
Procter said unit volume 
worldwide in its first quarter 


had risen by 10 per cent or 7 
per cent net of acquisitions. 
This compared with 5 per cent 
growth for the previous fiscal 
year as a whole. US sales and 
volume both rose 6 per cent 

Outside the US, volume rose 
13 per cent but sales only 
8 per cent 

Procter said the slower 
growth in international sales 
was partly due to price compe- 
tition. and was not signifi- 


cantly affected by currency 

T D Qv prmpnts . 

The company attributed its 
better US earnings to its laun- 
dry and cleaning, paper and 
food and drinks sectors. It said 
this was primarily due to vol- 
ume growth and cost control. 

Earnings per share rose 18 
per cent to $1_12. The shares, 
which risen strongly in Hip 
past two months, fell $Va to $62 
In early trading. 


Bethlehem Steel declines to $10.3m 


By Richard Waters in New 
York 

Bethlehem Steel, the US's 
second-biggest steelmaker, saw 
after-tax profits fall to $l0^m 
In the third quarter, from 
530.7m the year before, as an 
overhaul of some of its produc- 
tion facilities added to costs. 

The figures come in the face 
of a 17 per cent increase in 
quarterly sales, to $l.2bn, 
reflecting higher prices and 
demand for flat-rolled steeL 


Bethlehem's results were 
held back by three projects, 
which added $6Qm to costs in 
the latest quarter, a rebuild of 
a coke oven, which is due to 
come back into operation in 
December, a reline of one of 
the plant’s two blast furnaces 
and construction of a new coat 
injection facility for one of the 
blast furnaces. 

The company's structural 
products business, meanwhile, 
was hampered by higher costs 
and weak demand. The com- 


pany plans to phase out the 
loss-making iron and steel- 
making operations in this part 
of its business by next year. 

At the pre-tax level. Bethle- 
hem's profits were 51L3m, up 
from $9.2m in the 1993 quarter, 
when it benefited from a tax 
credit. After the payment of 
dividends on preferred stock, 
the company reported a 
break-even position at the 
earnings per share level, com- 
pared with income of 22 cents a 
share a year ago. 


Wider than 
expected 
loss at Data 
General 


By Louise Kehos 
In San Francisco 

Data General reported wider 
than expected losses for its 
fourth fiscal quarter, but reve- 
nues increased as the mini- 
computer manufacturer con- 
tinued its difficult transition 
from proprietary computers to 
“open" systems based on 
industry standards. 

Bevennes for the quarter 
increased 5 per cent to 
5292.6m from 5278.4m in the 
same period last year. 

Net losses for the quarter 
were 56.2m, or 17 cents a 
share, compared with last 
year’s fourth-quarter loss of 
537.2m, or $1.06, when the 
company took a restructuring 
charge of 525m. 

“The fact that our revenues 
are continuing to grow is 
encouraging," said Mr Ronald 
Skates, president and chief 
executi ve. Open systems prod- 
ucts now represent almost 90 
per cent of total product reve- 
nues, he said. The company 
has achieved improved operat- 
ing results in quarter this 
year, he noted. 

The company said that it 
this week received a 553m pay- 
ment from Northrop Grum- 
man tn settlement of a copy- 
right infringement suit The 
gain will be recorded in the 
current quarter. 

“Looking forward, we are 
cautious for the short term. 
However, we believe that oar 
ability to continue to grow 
revenues, combined with 
aggressive management of our 
cost struct ur e, should result in 
achieving our goal of return- 
ing to profitability,” said Mr 
Skates. 

For the full year. Data Gen- 
eral reported revenues of 
S 1 . 12 bn, compared with 
$1.08bn in fiscal 1993 - the 
first year-on-year revenue 
increase since 1991. Net loss 
for the year was 587.7m, or 
52.45 a share, including a 
restructuring charge of $35m 
in the second quarter. 

In fiscal 1993, the company 
reported a net loss of $60 .5m , 
or $1.73 a share, which 
included a $25m restructuring 
charge. Data General shares 
fell 75 cents to $9% in mid- 
session. 



NEWS DIGEST 


MacMillan Bloedel 
held back by 
rising logging costs 


—cmlllmi Btoodol 

-Share price (C$ . 

24 : 1 



16 ' 


Mar 1994 

Source. Datastreem 


Oct 


Ma cMillan Bloedel, the 
western Canadian 
forest-products group, 
benefited from 
strengthening paper 
markets and favoura- 
ble exchange rates in 
the third quarter, but 
profits were held back 
by rising logging costs, 
writes Bernard Simon 
in Toronto. Earnings 
recovered to CS5S.lm 
(US$43 30) or 44 cents a 
share, from a C$20. 7m 
loss, or 19 cents, a year 
earlier. The latest fig- 
ure indudes an after-tax gain of C$20 8m from 
the sale of the Harmac pulp division. Sales 
advanced to C$l.04hn from C$S2Sm. 

Mr Bob Findlay, chief executive, said higher 
stum page fees, rising labour costs and the 
expense of implementing new, government- 
mandated environmental practices contributed 
to increased costs in the British Columbia log- 
ging operations. In addition, output at many 
sawmills was hit by summer holiday shut- 
downs an d Tnaintenanrp 

Mr Findlay predicted that earnings would 
climb slowly over the next year as newsprint 
and expected containerboard price increases 
are put in place. 

But he said a reduction in annual tree- 
cutting quotas in British Columbia had pushed 
up. prices of chipping and pulp logs bought 
from other producers, raising the cost of paper 
production. 

Employee shareholders 
in Ina boardroom move 

Employee-shareholders of Ina. the Italian 
insurer privatised in June, are trying to rally 
support for a list of directors, who would sit 
alongside the Italian treasury's nominees on 
the Ina board, if elected at next month’s share- 
holder assembly, writes Andrew Hill in Milan. 

Ina was the first state sell-off to involve 
guarantees of minority shareholder represen- 
tation on the board - three directors out of a 
maximum of 13. But Mr Lorenzo Pallesi, the 
company's outgoing chairman, warned this 
week that such apparent shareholder democ- 
racy could prove to be a sham, because larger 
minority investors may simply outvote the 
small shareholders. 

Imigest, an Italian fund manager, yesterday 
put forward its list of nominees, on behalf of a 
group of institutions. But Ina’4 employee 
shareholder association has not yet won the 
backing of the minimi im i per cent of shares, 
which it needs if the list is to go forward for a 
vote at the Ina assembly on November 7. Nom- 
inations have to made by the weekend. 

Tm trying to underline the importance of 


this development, in thecont^of Itelfofijm 
privatisation prog^m relations and 

the association. 

CSR to spend A$300m 
on timber operations 

CSR. the Australian »up.r and buildinyroi 

•fSK’i’ass T'ffi&gSSV- 

processing operation in the Obcron region 
doublingcapacity at its medium densitj fibre- 
iSKSS and constructing fl substantial 
sawmill. The project, costing »°re than 
A$200m, also involves development ot an 
inland container port. A further A$l00m _wdl 
be spent at Bombala on an integrated timber 

smvwsrul ten- 

der for exclusive rights to negotiate contracts 
for radiata pine grown in the area b> suite 
Forests. 'CSR said it expected to have access, to 
380,000 tonnes a year of softwood jogs around 
Oberon and 200.000 tonnes at Bombala. 

Pre-tax reverse 
at Jyske Bank 

Jyske Bank, Denmark's fourth-la rgest bank, 
suffered a fell in pre-tax earnings after nine 
months to DKrffim (fii.3m) from DKr495m last 
year, writes Hilary Barnes in Copenhagen. 

The hanfe, the only Danish bank to publish 
quarterly results, said its core earnings, which 
include net interest income and other operat- 
ing income less operating expenses, increased 
by 20 per cent to DKrS55m. 

Loss provisions were cut to DKr23Sm from 
DKr540m last year and non-performing loans 
have fallen by 40 per cent from last year to 
about DKrlbn - out of total lending of 
DKr28bn. But the pre-tax result was pulled 
down by unrealised losses on the bond and 
share portfolio of DKr467m. compared with a 
gain DKr513m last year. 

The bank said that for the frill year it expec- 
ted to achieve its profit target of between 
DKr200m and DKr300m. 

Elf Aquitaine sells 
Petrofina stake 

Elf Aquitaine, the French oil group, yesterday 
confirmed that it had sold a 2 per cent stake in 
Petrofina, its Belgian counterpart, to Groupe 
Bruxelles Lambert, the financial group headed 
by Mr Albert Frtre. writes John Ridding in 
Paris. 

The French company said the deal, done in 
an off-market transaction, was part of its strat- 
egy of disposing of assets to reduce debts. 

Mr Philippe Jaffrt, Elf s chairman, has set a 
target of raising FFr5bn (5940m) in 1994 
through disposals. 

Elf declined to specify the revenues relating 
to the sale. It now holds 2 J per cent of Petro- 
fina's voting shares. 


October 1994 



AIRMAUA 


ECU 60,000,000 

Export Credit Financing 
of 




AVRO 

InnafcmJ Aooi pm 


3 Avro RJ70 Aircraft 

Arranged by 

Bank of Tokyo International Limited 

Funds Provided by 

Bank of Tokyo International Limited 
Bank of America NT & SA 

Guaranteed by 

ECGD 

Agent 

Bank of Tokyo International Limited 


© 


Republic of Poland 

US£497D,214000 Due 2024 
CuBoWnlfitii Discount B o nds 

h Connection wHh I he 1 9PJ f w oi eh tg Proposoh oflfm fiepuWc of Poland 

Notice ii harebu gtvan that rfw Rate o 1 Interest (or the Irrterwl Period October 
77. 1994, Id Aprf 77. 1995 ha been fixed at 6.8123% and ihcnho intares 
pay ab le on the m i g r a nt Interest Payment Date April 27, 1 995 for the fir«l 
interest period wJ be USS34 44 in raped of USt 1,000 nominal of the Bomb, 

Hirer Sorvieml Agent Bar* CfTIBAN{€^ 


Republic of Poland 

USL5T37^i56XXX} Due 200? 

Mew Money Bondi 

•n Connection wdhJhe I 99* financing Acpuab J Ae Republic of Poland 

Ntfisoil hereby anon dint die Rote af Interest for die interest Ptoriod Oaobw 
77 ‘ ‘994. to April 27, 1995 ha been fired at 68123% and lhaMhe in tens! 
payable an the relevant Interest Payment Dale April 27, 1995 for the firsj 
g*annt period will be USS34 .44 in raped of USS1 .000 npmiiKil of Hte Bond*. 


25IW< 

N A | hregr Seneca). Apert talk 


CITIBANK 



imnKdutd)r at your fingertip*! By 
everythin* you ne ed In ooe eoy^o-j 
■once CUB lafelccii helps yon perform 
mlyte. te etorerln g, 
tooifcfos. pnrarmarilUB IflJ law more— 

JJ YEARS OP HISTORICAL PRICES POR 
CASA FUTURES. OPTIONS AND 
INDEX MARKETS. 

5) YEARS OF FUNDAMENTAL INFORMATION 
m nvEB mi mMMfrnips 
Simitar to teahnun fontxl in the CRB 
Commodity Yar Book. Or TAtf of the 
humes tedosoy. la wMiitm to 
historical don. CRB hfoTedi ato provides drily 
price updates via KR-Qbotc. KjrigH-Rifclef* 
aflttwm spcdficafly downed la 
download ami impart cnd-oC-da* price* 

dbroly mo ytxn database. 

INFORMATION: Mratifrr Vakil 
KA Hose. 78 Rod Sum. London EC*Y I NY 
Tefc 444(01 71 6424083 


This announcement appears as a matter of record only. 


FKI pic 


$120,000,000 


FKI Industries Inc. 


Guaranteed Senior Notes due 2002-2006 


Private placement of these securities with institutional investors 
has been arranged through the undersigned. 


Wertheim Schroder & Co. 


October 1994 


Momtyveawedm u i m i m ar — 
p uro em a » aw matay pooteg sad 


InE^M edtew 
FlMManoskr AaMmarlteMO 


EUROPEAN 
INVESTMENT BANK 

ESP 20,000,000,000 
Capped Floating Rate Notes 

Due 1999 

The notes wilt bear interest it 
7-36056% per annum For the interest 
period 20 October 1994 to IS 
December 1994. Interest payable on 15 
December 1994 will amount to ESP 
1.223 per note. 

Madrid, 18 October 1994 

BANCO CENTRAL HISPAIVO 
Paying and Calculation Agent 


APKMNTMEfnSADV^afKtNC 

appowiaUteUReAtee . x 
e^Writett4ay*Tban*y - " “ 
and fat to tattrantonta&iMi evew fTd*y ' 
„ Forjantet inrni 1 1 ititjii , 

pfcwa* ' 

Gantfcjeaeaen 
• • •' fmttBSnf ' 

** •' AstfraiSfcanyaeitM ’• 
erft C046S4 


SVENSKA SELECTION FUND 

SodM d'iavcsthseaieat h capital variable 

Registered office 146, boulevard de la M t r u ai e , L-2330 Luxembourg 

NOTICE 

Shsrchofclem of S raisin Selection Fuad are herein Informed (bat. with effect 
one oh mb fallowing tbe present publication, the investment mungement fee win be 
of maximum 25 per cent of the monthly avenge net easels of 1, 2, 3, 4, 6, 7 
and Sand maxmitun 15 percent of tbe monthly avenge net assets of classes S and 9. 

Further, m conversions of shares, a conversion fee of up to 3 per cent of die net 
earn value of the shares lo be converted may be levied Out of this charge. 15 per 
can will revert to the class the shares of which am convened, the remaining pan 
revetting to the distributor or authorised agent who may waive the fee in which be is 
emitted, in whole or in port 

A redemption fee of up id 1 per ceur may be levied on redemption of shares, this 

fee being psyabte to the distributor or atuborised agents. 

Shareholders may during a one month's period following this publication 
redeem their shares at tbe respective net asset valued, without cost. 

Shareholders are further informed that the Sylvia Shares dess h discontinued. 

The updated prospectus dated November, 1994 is available and may be obtained 
free of cos front [be registoied office of lite Company. 

The Board of Directors 



Weans 

ntuui 


Port 

*04 

Par) 

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|MMN 

IMWM 

■tel 

Itetol 

pm 

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nm 

CAim 

0030 

1004 

068 

9*8 

0100 

2029 

9.88 

9*8 

0130 

m 7, 

908 

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2129 

11-24 

12*3 

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1022 

1124 

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19-22 

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12*3 

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1014 

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068 

068 

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1002 

BA7 

OB7 

0900 

1002 

087 

OB7 

0830 

1004 

14J2 

1041 

0700 


1087 

10*7 

0730 

2028 

1067 

18*7 

0000 

2028 

1091 

2002 

003D 

2007 

?niw 

27.16 

0800 

3010 

2007 

27.19 

0930 

3UB 

2008 

27.19 

1000 

32.79 

2008 

27.18 

1030 

32.79 

22*3 

23.94 

1100 

32.74 

22*2 

23*3 

1130 

32.74 

31.80 

32.71 

iaoo 

32.78 

3000 

3012 

1230 

32.71 

39J» 

son 

1300 

32JK 

34*8 

3009 

1330 

3010 

19*4 

20*4 

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28.71 

16*8 

1748 

1430 

2003 

1037 

17.47 

1900 

«mn 

1037 

1747 

1930 

33.02 

18*7 

1747 

1900 


1038 

1748 

1830 

32471 

3011 

31*1 

1700 

7044 

3012 

31*3 

1730 

8082 

3012 

31*3 

1800 

8132 

3010 

31*1 

1830 

74.70 

1838 

1748 

1900 

6082 

32.49 

30*7 

1830 

44*3 

33*6 

34*7 

3000 

3012 

33*9 

34*8 

2000 

3010 

3042 

fa 

2100 

re»oa 

1037 

1746 

2130 

27*8 

1029 

17*9 

2200 

2006 

1036 

1746 

Z230 

2028 

16*8 

1737 

2300 

2026 

1007 

17.16 

2330 

2028 

tore 

16*7 

3400 

1004 

14*2 

1541 


u„,15% 

off electricity 

11 y cir ci'os'vr.'.Uicn noc-rds arcuixf 
ZKCZ o-:r rrsnl “ cr moreen 

’.viy not doc 'or a C'JO’.C? 

021 423 3018 

Powerline 



U.S. $75,000,000 


CREDITANSTALT 


Creditanstalt-Bankverein 

ttacatparaed Vi Bw RvmtMc or Sustnj 

■rtn tonwo Dswfltv) 

Inverse Floating Rate Notes 
Due 1998 

NoUco Is hereby given Dul lor the 
interest period ham October 37 . 1994 
m April 27. r995 the rate nns been 
determined at 5 875\, per annum. 
The amount payable on April 27. 
1995 per U.S. Sl.000. U.S StO.OOO 
and U.S. SlOO.OOO principal amount 
of Moles will be US S29 70. 
U.S S297 01 and U.S. £2.970 14 
respectively 

By The Chase Manhattan Baft, mi 
Untaa. Aged Bask Q 

October 27, 1 994 chase 


U.T.G.B. International 
(Jersey) Limited 
U.S. $40,000,000 

Floating Rate Guaranteed 
Notes due 1996 

Fnr the lnwr«t Period 2brh 
October. IW to Ibrh April, 
1995 thv NuU- 4 will carry a 
Rate oflnreresrot 7.4-175 rt u per 
annum, the Coupon Amount 
payable per U.S. $5,000 Note 
will be U.S. SISS.OO. and for 
the U.S. $100,000 Note will 
be U.S. $3 , 760.0 r. payable on 
26th April, 1995. 

LnitJumV UiuW-ra.rg^nv.i.EAihaiw 


□ 


BmltcnTnui 
Company, London ArrurBan* 


FLEMING FLAGSHIP FUND 

Sociefe d'layesttacemcnt 
45 rue dei SdUas, L-2529 Rowald 
Grand Duchy of Lanemboorg 
R.C. Luxembourg No. B&478 

TTk diareiioMen of FLEMING FLAGSHIP FUND are hereby convened b> m 

EXTRAORDINARY GENERAL MEETING 

fate bdd on Wednesday 16 November! 1994 ai 14.15 houre u the European I 
Busmen Centre. 6. mate deTitves. L-^633 Seaminsiheiy with the mirering. 

1 “ f 1 *■ * 

4. To complete Article 21 of the Aiiido of incorporation. 

gSlS" ,8 ” da requiTC “ ‘ ,U0nun nf of H* «hsrei m 

t order io be canfcd to aneod tbe ma-U^ ufon beanri dwin mint dcr» 
bearer *a n crrtfta ies fiue itaye prior to the meenng with the folkmingmiim^ 
Krrdi»tba«k^Ui^hTO« Re ^4J,t M «l^ 1 ^R^ 

Grand Duchy of Lnxetnboutg 
a* Cedri Deporiuuy 

Sb«*MWeK Who canot penmuUy attend the meeting aie requested rowlhtpr. 
tare OfffOsy sadTeture h « tarn 7 ™^ day, prior loThe dote .if ihe S 

!?E8fi ESS? ^ ,0n ■ 00 FBnd MaM *~ 

By Onler of Tbe Board of Oirretare 
Henry C Kcfty, Secretary 





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1 





22 


FINANCIAL TIMES THURSDAY OCTOBER - 


INTERNATIONAL COMPANIES AND FINANCE 


Packaging, construction 
results boost Tenneco 


By Laurie Morse in Chicago 


Tenneco, the diversified US 
industrial group, had its best 
third quarter in U years as its 
packaging and construction 
and farm equipment divisions 
outperformed expectations. 

Mr Dana Mead, Tenneco's 
chairman, said the strong 
quarter demonstrated the effec- 
tiveness of the company's 
restructuring: 

Net income amounted to 
$15lm, or 32 cents a share, 
compared with Siilm. or 64 
cents, for the same period last 
year. Sales rose to £L3bn, from 
$3.1bn a year ago. Operating 
Income rose to $363m, from 
6273m. 


As expected, Tenneco yester- 
day also said it had agreed to 
purchase German automotive 
components make r Heinrich 
GiDet for 5113m In a deal that 
will close by the year-end. 

The company's Packaging 
Corporation of America, 
boosted by rising prices for its 
containerboard output, saw 
operating income jump 24 per 
cent, to 563m, from 551m last 
year. Sales improved to 5562m, 
from 5513m. 

For the first nine months of 
the year, Tenneco had net 
income of 5376m, or 22.04 a 
share, on sales of 510bn, 
compared with $256m, or $L55, 
on sales of $9.8bn last year. 

• Tenneco's JJ. Case farm and 


construction equipment subsid- 
iary saw third-quarter operat- 
ing income jump to $73m. from 
last year's $5m. 

Tenneco sold 29 per cent of 
its stake in Case in a public 
offering in June. 

Case, which reported earn- 
ings separately yesterday, said, 
its third-quarter net Income 
was $29m. or 39 cents a share, 
on sales of $lbn. Pro-forma 
comparative figures for the 
same 1993 quarter were 528m, 
or 38 cents, on sales of 5841m. 

For the first nine months of 
the year, Case had net income 
of 5119m, or $L23 a share, on 
sales of $3.2bn, up sharply 
from last year’s 518m. or 19 
cents, on sales of $2L9tm. 


US drugs 
groups post 
solid sales 
growth 


Tandem Computers recovery 


By Louise Kehoe 
in San Francisco 


Tandem Computers reported 
record fourth-quarter revenues 
and earnings, signalling a turn- 
round after last year’s restruct- 
uring. 

Net income was S7lm, or 62 
cents a share, on revenues of 
5604.4m. This compares with 
net income of 53.2m. or 3 cents, 
on revenues of 555119m in the 
same period last year. 

The performance reflected a 
strong return to growth, said 
Mr James Treybig. president 


and chief executive. The com- 
pany shipped a record number 
of computers during the year, 
he said, and orders grew by 20 
per cent in the second half 
compared with the same period 
a year ago. 

“These results validate our 
d ecisi ons last year to build and 
sell powerful computers at 
much lower prices with open 
software products," said Mr 
Treybig. Like many computer 
companies, Tandem is making 
a transition from proprietary 
technology to lower-priced 
“open systems” products. 


Shipments of mid-range com- 
puters grew 66 per cent, while 
sales of high-end computers 
almost tripled over last year, 
and sales of Unix servers were 
up 42 per cent 
For the fiscal year, revenues 
were $21bn, up from $2.0bn. 
Net Income was 5170.2. or SL50 
a share, incl uding a one-time 
gain of 20 cents a share from 
the sale of Applied Communi- 
cations, a subsidiary. This 
compares with a loss of 
5517.7m, or $4.61, for fiscal 
1993, which included a 545 lm 
restructuring charge. 


Productivity 
improvements 
benefit CSX 


Chief executive quits at 
Continental Airlines 


By Patrick Harverson 
in New York 


By Frank McGurty 


CSX reported its second 
consecutive quarter of record 
earnings, as the US transporta- 
tion company continued to 
reap the benefits of productiv- 
ity improvements, tight cost 
controls and a buoyant eco- 
nomic environment in its main 
domestic and foreign markets. 

In its third quarter. CSX 
earned 5177m. or 51.68 a share, 
on operating revenues of 
$2.47blL 

In the same period a year 
ago, the group earned 5117m 
(excluding tax-related charges), 
or $1.13 a share, on revenues of 
$2Mra. 

Operating income at the 
company’s railway unit CSX 
Transportation jumped 40 per 
cent to $224m in the quarter. 


Continental Airlines, the fifth 
largest US carrier, said that Mr 
Robert Ferguson had resigned 
as chief executive and vice- 
chairman. 

The move comes as the air- 
line Is struggling to correct 
operational problems with its 
low-cost Continental Lite 
flights. The service, modelled 
on Southwest Airlines' success- 
ful route system, was launched 
last year by Mr Ferguson as 
part of a strategy to return 
Continental to profitability. 

The airline said it was mak- 
ing progress on improving reli- 
ability, but admitted that the 
service was still not breaking 
even. 

Mr Ferguson's departure was 
announced as Continental 
revealed a 9 per cent downturn 


in third-quarter operating 
income to 582-Bm . from $91m in 
the 1993 quarter. 

Revenues were down 6 per 
cent at gl-5bn. Fare-cutting 
during the quarter was 
reflected in a 2.6 per cent 
decline in the average yield per 
passenger mile. 

However, net income more 
than doubled to $30.6m, or 
$L03 a share, against 512.4m, 
or 53 cents a year earlier. But 
the improvement was mostly 
attributable to a $lL3m income 
tax provision taken in the 1993 
period. 

Mr Gordon Bethune, the 
company’s president, will 
assume overall direction of 
both strategic and day-to-day 
operations. Mr Ferguson, 45, 
will stay on as a director and 
consultant on overall strategic 
planning. 



REPUBLIC NEW YORK CORPORATION 
SAFRA REPUBLIC HOLDINGS SJL 


Consoli date d Statements of Condition 
and Summaries of Results 

These statements and summaries represent the consolidated accounts of Republic New York Corporation and its 
wholly owned subsidiaries and of Safra Republic Holdings S.A. and its wholly owned subsidiaries. Republic 
New York Corporation owns 48.8% of Saha Republic Holdings SA, which is accounted for by the equity method. 


REPUBLIC NEW YORK 
CORPORATION 


SAFRA REPUBLIC 
HOLDINGS S.A. 


Assets 

Cash and due from banks 

Interest bearing deposits with banks 

Precious metals 

Investment securities 

Trading account assets 

Federal funds sold and securities purchased 

under resale agreements 

Loans, net of unearned income 

Allowance for possible loan losses ...... 


atember 30, September 30, 

1993 1994 1993 

(In thousands ofUS$ except per share data) 


$ 638,380 $ 

9,530,875 
1,577,081 
11,777,082 
3,062,180 


557,003 

6,130,430 

745,681 

13,875,719 

1,225,570 


60,731 $ 
4,754,683 


52,123 

3,376,354 


5,881,392 

49,617 


5,650,486 

59.930 


838,621 

9,383,733 

(319578) 


Loans (net) 

Other assets 


9,064,155 

4,721,359 


1425,694 

9,031,447 

(281,193 ) 

8.750,254 


1,287,237 

(122.798) 


1,183,678 

(96.981) 


1,164,439 

457,127 


1,086,697 

335,398 


Total assets . 


$41 ,209,733 $ 37,962,045 $ 12,367,989 $10.560,988 


Liabilities 

Total deposits 

Trading account liabilities 

Short term borrowings ...... 

Other liabilities 

Long term debt .. 

Subordinated Jong-tcnn debt and perpetual capital nores 


$22,226,145 $22,379,887 $ 9,140,280 $ 7,153,245 


2,763.022 

4,486,868 

4,069,514 

2588,991 

2,405,843 


225308 

2 , 886,001 

5367307 

2,643363 

2,130,635 


974332 

377331 

648,600 


1356,775 

229,101 

650,000 


Shareholders 1 Equity 

Cumulative preferred stock — 

Common stock and surplus, net of treasury shares 

Retained earnings 

Net unreal ired depreciation on securities available 
for sale, net of taxes 


672300 

704,877 

1/401355 


556,425 

719354 

1,153,765 


903360 

407316 


902304 

269,663 


Total shareholders’ equity .... ..... 

Total liabilities and shareholders' equity 

Book value per share 

Client portfolio assets in custody 

Net income, for the nine months ended 

Net income per common share (primary) 

Average common shares outstanding (primary)..... 


(109382) 

2,669350 2,429,444 

$41309,733 $ 37.962JH5 
$ 37.79 $ 3536 


(83,430 ) 
1327,446 
$ 12367,989 


1 ,17 1, 867 
$ 10360,988 


69.21 

5,604354 


$ 66.19 

$ 5,014,627 


$ 250,624 $ 221,278 

$ 438 $ 3 .82 

52,738 52390 


119,771 

6.75 

17,739 


$ 85,029 

$ 4.80 

17,701 



Republic New York Corporation Safra Republic Holdings SA 

Fifth Avenue at 40th Street 32, coulevard Royal 

New York, New York 10018 ftantring 1 /w.rvros 2449 Luxembourg 

Copenhagen, Geneva, Gibraltar, Guernsey, London, Lugano, Luxembourg. Milan, Monte Carlo, Moscow. Paris, Zurich. Beverly Hills, 
Cayman Islands. Los Angeles. Mexico City. Miami, Montreal, Nassau, New York, Buenos Aires, Caracas, Montevideo, Punta del Esse, 
Rio de Janeiro, Santiago, Beirut, Beijing, Hong Kong, Jakarta, Singapore, Sydney. Taipei, Tokyo 


FTC agrees to $4bn Eli Lilly deal 


By Frank McGurty in New York 


Marion Merrell Dow and 

Rh on e-Poulenc Borer, the US 

pharmaceutical groups, both 

showed solid revenue gains in 
the third quarter, but only 
RPR, a subsidiary of France’s 
Shfine-Poulenc, was able to 
boost its bottom line. 

At MMD, a 10 per cent 
improvement In sales, to 
5783m, largely reflected two 
acquisitions completed over 
the past year. Tne company, 
controlled by Dow Chemical, 
bought the Rugby Group, a 
generic drug manufacturer, 
late last year and ifndaina' a 
Japanese pharmaceuticals 
group, in early 1994. 

Excluding their contribu- 
tions, revenues would have 
showed a 6 per coat decline 
from 5709m a year ago. 

Sales of Carttizem, a cardio- 
vascular medication, were 
down 1 per cent, although a 
strong performance by the 
lower-margin Cardizem CD, a 
once-a-day formulation of the 
product, helped to offset the 
loss. Sales of Seldane, an 
allergy remedy whose patent 
expired last April, were down 
10 per emit 

RPR credited robust sales of 
its prescription products, espe- 
cially in North America, for an 
8 per cent rise in revenues to 
$1.04bn. Profits were np 45 per 
omit at 5102.5m, or 76 cents a 
share, against 57lm, or 51 
cents, a year ago. The 1993 fig- 
ure reflected a pre-tax charge 
of 527m, or 13 cents. 

The results, which were 
slightly better than Wall 
Street had forecast represent 
a tumround of sorts from the 
second quarter, when earnings 
had come in well under expec- 
tations. In early trading on 
Wall Street yesterday, RPR's 
share price added 5% to $36%. 

Although MMD suffered a 12 
per cent slide in profits to 
5126m, or 45 emits, the result 
exceeded analysts’ forecasts of 
36 cents. The stock made a lit- 
tle headway as a result, app- 
reciating 5% to $25% during 
the morning. 

For tiie first nine months of 
1994, MMD posted earnings of 
5330m, against 5375m, exclu- 
ding a $180m pre-tax charge. 
Revenues were np 9 per cent 
at S2-3bn. 

At RPR, net income for the 
nine months was $168.8m, 
against $284jjm, on revenues 
of $2.88bn, virtually 
unchanged from a year ago. 


Eli Lilly, the US drugs company, has 
readied an outline agreement with the 
US's Federal Trade Commission which will 
allow it to go ahead with the planned 54bn 
acquisition of PCS, a pharmaceuticals dis- 
tributor. writes Richard Waters in New 
York. 

The deal full details of winch have yet 
to be finalised. Is expected to act as a 
model for how two other drugs companies 
- Merck and SmithKline Beecbam - oper- 
ate similar drugs distributors that they 
have acquired in recent months. 


Ully, while refusing to confirm that it 
had reached a provisional deal with the 
anti-trust authorities, said it believed a 
final agreement would be completed by 
next Thursday. This would open the way 
for completion of the PCS acquisition 
before the end of i he year. 

The deal with the FTC is believed to 
require PCS to continue to offer drugs 
mart a by companies other th an Lilly. It 
will also establish arrangements to pre- 
vent Lilly from gaining access to 
information about the prices at which 


Learning lessons the difficult way 

Richard Waters examines the issues raised by yesterday's ruling 

U S anti-trust authorities prices for consumers. 

may have put a span- Although the deal with the 
ner in the works of FTC applies only to Lilly, It is 


U S anti-trust authorities 
may have put a span- 
ner In the works of 
one of the biggest reorganisa- 
tions to bit the country’s phar- 
maceuticals industry. 

Fifteen months ago, Merck 
tinned industry cm its 
by buying Medco Containment 
Services, a big distribution 
company. The deal sparked a 
race amnng di ngs manufactur- 
ers to secure their distribution 
lines. 

The Federal Trade Commis- 
sion (FTC) has now put a ques- 
tion mark over this vertical 
integration strategy. In partic- 
ular, it raises doubts about the 
wisdom of the three compa- 
nies, which between them will 
have paid H3hn to buy distrib- 
utors, once Eli Lilly’s 54bn pur- 
chase of PCS is completed fin 
the other deal, SmithKhne Bee- 
chain paid $2J3bn for Diversi- 
fied Pharmaceutical Services). 

The commission, has yet to 
outline publicly its concerns 
about the Lilly deal Indeed, 
until it publishes the full 
details of the compromise it 
hm reached with the company, 
it will not even confirm that it 
lias held an investigation. 

The outline of the deal, how- 
ever, suggests that the FTCs 
concern is that control of dis- 
tribution by a -small number of 
manufacturers could limit the 
ability of other drugs makers 
to sell their products. The 
result, in the long run, could 
be less choice and higher 


prices for consumers. 

Although the deal with the 
FTC applies only to Lilly, It is 
likely to have a bearing on 
how Merck and SmithKline 
operate. Both companies 
cleared a review by the agency 
when completing their own 
purchases, but the FTC says: 
“Theoretically, the commission 
can go back and re-examine 
thing s on which it has passpri 
before." 

Two issues lie at the heart of 
the Lilly investigation. The 
first is whether other drags 
manufacturers will have fair 
access to PCS’s distribution 
system once it is acquired; in 
general, the deal will require 
the company to offer all other 
manufacturers' products for 
sale alongside its own. 

Pharmacy benefit managers 
such as PCS generally reduce 
costs for buyers of drugs by 
offering only a limited range of 
products, known as a formu- 
lary. The drugs included on 
this list are those on which the 
distributor can negotiate big- 
ger discounts, or which are 
cheaper than rival products. 
The benefit managers encour- 
age doctors to prescribe these 
formulary drugs through direct 
telephone contact 

However, PCS will have to 
offer the option of an “open” 
formulary - one which con- 
tains any drug the customer 
wants - which could reduce 
the competitive advantage to 
the company of controlling the 



Randall Tobias, Ell Lilly 
chairman and chief executive 


distributor. Lilly, however, 
argues that this requirement 
makes no difference to the 
attraction of owning PCS, and 
that it was planning to offer 
the option of an open formu- 
lary anyway. 

Both Merck and Smi thKline 
say they already offer open for- 
mularies to their customers. 

The second issue of concern 
to the FTC is the potential mis- 
use of competitive pricing 
information. The regulators 
fear that Lilly could gain 
access to details of the prices 
at which other drugs compa- 
nies are selling their products 
to PCS, and use this to under- 
cut competitors. To prevent 
this, it has required Lilly to 
agree to a “firewall” to keep 
the information confidential. 


AH of these securities having been sold, this announcement appeals os a matter of record only. 


New Issue 


Espirito Santo Financial Holding S.A. 


8,699,338 ADSs or Shares included 3,655,819 ADSs or Shares offered separately 
by the Company in a concurrent direct offering to its principal shareholder and 
two of its core shareholders and 5,043,519 underwritten ADSs or Shares. 


5,043,519 American Depositary Shares Representing 
5,043,519 Ordinary Shares, nominal value $ 10 per share 


Global Coordinator 

Merrill Lynch & Co. 


1,755,000 ADSs 

The above ADSs were underwritten by the following group of International Underwriters. 

Merrill Lynch International Limited 

Salomon Brothers International Limited 


UBS Limited 


Amhold and S. Bleichroeder, Inc. 
Credit Lyonnais Securities 


Deutsche Bank 

AkriengeaeUacbnft 


S.G.Warburg Securities 
Daiwa Europe Limited 
DUion, Read Securities Limited 


3,288,519 ADSs 

The above ADSs were underwritten by the following group of US. Underwriters. 

Merrill Lynch & Co. 


Salomon Brothers Inc 


UBS Securities Inc. 


Amhold and S. Bleichroeder, Inc. Bear, Steam, & Co. Inc Dean Witter Reynold, Inc 

Dillon, Read & Co. Inc Goldman, Sach, * Co. J.P. Morgan Securities Inc. 

Morgan Stanley & Co. „ r , 

incorporated . rat ne Webber Incorporated 

Prudential Securities Incorporated 

Smith Barney Inc. 

N M Rotluchild and Smith New Court S.G.Warburg & Co. Inc Werthelm Schroder & Co 

Sanford C. Bernstein & Co., Inc Fox-Pitt, Kelton Inc Janney IlK 

CJ ' L ^SfSS£^ eBank Raymond James & A^ociates, Inc! 

Stifel, Nicolaus & Company t _ 

iMorporeted . Wheat First Butcher Singer 


V* bBTIl WUWVikV UQ 

Securities Corporation 

Stifel, Nicolaus & Company 

Incorporated 


, ill 


,;icl 


other compand sell their drugs to PCS. 
\Stoday. Lilly sought to play down the 
of both aspeeLcoftbeagT^ 
* ( However, concern that the deal 

would limit its ability to e ‘JJ“J h t G h ! 0l l c *J 
nroflts it had hoped for from the PCS 
a^ffion wiped SI’, off the 
share price yesterday moromt,, to S5S\. 

torck Sid that it had also been asked 
for information during the FTC investiga- 
tion into Lilly, though it refused to say 
whether the Viators were exammmgita 
dealings with Medco. its own distributor. 


This again, is an arrangement 
that' all three companies say 
they can live with. 

If the drugs companies are 
right in their claims that the 
Lilly consent decree will make 
no material difference to their 
businesses, why are the regula- 
tors showing such interest? 

One possible answer is that 
the FTC is acting politically. 
With the new spirit of anti- 
trust zeal under the Clinton 
administration, it could not 
appear to be taking no action 
amid such a significant indus- 
trial restructuring. 

Alternatively, the deal with 
Lilly may have more teeth 
than the manufacturers yet 
realise, or are prepared to 
admit Either way, they still 
have a long way to go to prove 
to shareholders that buying 
distribution companies will 
support profits in the long 
term - and past experience is 
not encouraging. 

The biggest previous attempt 
to pursue this strategy in the 
healthcare field - the $4bn 
acquisition of American Hospi- 
tal Supply by Baxter Interna- 
tional, a hospital supplies and 
healthcare company, in 1985 - 
proved a failure. Last year, half 
of Baxter’s sales in the US 
came from hospital supplies, 
but only a quarter of profits. 
Nor has the deal lifted the com- 
pany’s market share. It is a 
lesson that the drugs compa- 
nies could yet learn to their 
cost. 




■ m.t 


. ! 1 \ \ 


' HI - 


-a. 1 , 


*— ‘^i 1 1 ll■ilnTl i i in i i i 




f 


t 




X 


FINANCIAL TIMES THURSDAY OCTOBER 27 1994 * 

INTERNATIONAL COMPANIES AND CAPITAL MARKETS 


* 


5 


f 


Sharp ahead 55% at six months 


Lion Nathan in 
move to expand 
into China 


By Mlchiyo Nakamoto 
in Tokyo 

Sharp, the Japanese consumer 
electronics manufacturer 
which is a dominant maker of 
liquid crystal displays, 
increased non-consolidated 
recurring profits - before 
extraordinary items and tax - 
by 55 per cent in the first six 
months to end -September, on 
the strength of buoyant 
demand for its LCD panels and 
other electronic devices. 

The company said that in 
spite of persistent weakness in 
corporate capital investment, 
demand for its goods, com- 
bined with rationalisation mea- 


“ Anyone know any good 
jokes?” quipped Mr Kerry 
Packer, the Australian busi- 
nessman, as yesterday’s 
unquestioning acceptance by 
shareholders of a plan to 
merge his two publicly-quoted 
media companies into a A$2bn 
(US$1. 47bn) combined group 
necessitated a lull in formal 
proceedings. 

The complex series of share- 
holder votes had been sched- 
uled at appropriate intervals to 
allow for discussion. So oblig- 
ing were the investors in Aus- 
tralian Consolidated Press, the 
Packer-controlled magazines 
business, and Nine Network 
Australia, which runs Austra- 
lia’s leading commercial TV 
network, that business from 
one meeting was completed 
early, and shareholders left to 
twiddle their thumbs before 
the next could start 

Under the circumstances, Mr 
Packer’s cheeriness was 


sures, helped it to achieve a 7 
per cent increase in sales to 
Y615.3bn ($6.35bn) compared 
with Y575ibn a year ago. 

Operating profits more than 
doubled to Y25.2bn from 
YlL9bn, while recurring prof- 
its surged 55 per cent to 
Y31.1bn from Y20.2bn. Net 
profits rose 24 per cent to 
Y15.Sbn from YlILSbn. 

Sharp, which has a leading 
position in the market for LCD 
panels, has benefited from 
strong demand, particularly 
from US personal computer in 
the US. LCD sales totalled 
Y1132bn in the first half, com- 
pared with Y187.5bn for the 
whole of fiscal 1993. 


of the day, he had won approv- 
als from A CP and Nine share- 
holders for the creation of a 
new three-pronged media 
group, and now requires only 
court sanction for the transac- 
tion to go ahead. 

With the deal being effected 
by a share swap arrangement. 
Consolidated Press, the private 
Packer company, will emerge 
with a 45.7 per cent interest in 
tbue new group - to be known 
as Pu blishing and Broadcast- 
ing-in contrast to its 47.9 per 
cent stake in ACP and 415 per 
cent of NNA. Mr Packer will 
become chairman of the new 
entity, with Mr Brian Powers, 
managing director of Cons- 
Press, taring on the same role 
at P&B as wefl. 

The new group will be made 
up of three divisions: televi- 
sion, magazines, investments 
(this will include Nine's inter- 
est in John Fairfax, the Austra- 


As a result, its electronic 
components division saw sales 
rise 23 per cent to Y207.3bn 
from Y168.4bn. 

In contrast, the television 
and video equipment division 
reported a 4 per cent decline in 
sales to Y122Jttra on continu- 
ing weak demand. 

Mr Haruo Tsuji, president, 
said recently that he expected 
the company's LCD operations 
to continue providing growth 
for the company for some 
time. 

Sharp is b uilding the world’s 
largest LCD factory in Japan, 
which is expected to begin 
operations next year and has 
expanded its gristing facility. 


ban newspaper publisher, and 
the potential stake in Optus, 
the telecommunications 
group). P&B is likely to have 
a market capitalisation above 
Ag2bn, revenues of more than 
AJlbn, shareholder funds of 
AgL7bn, and immediate bor- 
rowing facilities of A$1.3bn. All 
this, it is argued, will make 
acquisitions much easier. 

The deal will also take some 
immediate pressure off the 
ma garina interests, which have 
been battling against highly- 
campetitive conditions. 

The big question is what 
acquisitions the merged group 
wDl pursue. The prospectuses 
make clear that on the maga- 
zine Grant, the focus will be an 
Asia, where ACP has already 
picked up a stake in the Viet- 
nam Investment Review, 
rather than the more mature 
Australasian markets. 

Nina, meanwhile, has 
already been edging into the 


Sharp expects LCD sales of 
Y2A5bn in the full year, against 
forecast overall industry sales 
of Y540bn_ 

Sharp is whiffing the manu- 
facture of some products over- 
seas and procuring a greater 
volume of parts from abroad in 
order to combat the adverse 
effects of the high yen. As a 
result, it expects to increase 
sales by 6 per cent in the hill 
year to Yl,240bn on the 
strength of continued demand 
for devices. 

Sharp is looking for a 41 per 
cent rise in recurring profits to 
Y64hn in the year to March, 
and a 31 per cent increase in 
net profits to Y33.5bn. 


multimedia industry. Aside 
from the Optus connection, for 
example, it has joined forces 
with Village Roadshow, a cine- 
mas group, to run “out-of- 
home" entertainment centres, 
including indoor theme parks 
in shopping centres across 
Australia. Nine was also one of 
the vehicles through which Mr 
Packer pursued his abortive 
bid to build Sydney's new 
casino. 

The price, for ACP share- 
holders, win be some dilution 
of earnings per share, but 
Nine's stronger growth pros- 
pects mean that it is already 
more highly rated, and if the 
acquisition opportunities look 
good enough, the shares of the 
new company should trade on 
a higher multiple that those of 
ACP. Such thoughts, at least, 
seemed to be buying peace 
from shareholders yesterday. 

Nikki Tait 


Bugs Bunny 
set to lead 
invasion of 
Hong Kong 

By Louise Lucas 

Dickson Concepts, the Hong 
Kong based luxury wholesaler 
and retailer, is bringing Bugs 
Bunny and Batman to Hong 
Kong through a franchise 
arrangement with Warner 
Bros Consumer Products. 

Dickson, which is putting 
more than HK$150m 
(US$19. 4m) into the project, 
plans to open Hong Kong and 
Singapore flagship stores sell- 
ing exclusive clothing, jewel- 
lery, accessories and memora- 
bilia of Warner Bros' cartoons 
and superheroes around the 
middle of next year. Further 
outlets will follow. 

This is the first time Warner 
Bros has taken a partner to 
open and operate stores. Out- 
lets in Europe and the US - 
which will total HO by the 
year-end - are company- 
owned, but it was felt local 
expertise would be important 
in developing the Asia market 
Dickson Concepts will pay a 
royalty fee to Warner Bros. 

Mr Dickson Poon, chairman 
and controlling shareholder of 
the group, believes the project 
will become a si gnificant con- 
tributor to company profits - 
although he said it was too 
early to say if Tweety Pie 
T-shirts and Daffy Duck mags 
could he taken to China, where 
he has already taken Ralph 
Lauren clothing. 

Dickson will be financing 
the deal from its cash 
resources. In spite of opening 
50 stores throughout Asia in 
the past 12 months, the com- 
pany - which also owns the 
Harvey Nichols store in Lon- 
don - is in a net cash position, 
and wiR remain so after the 
latest investment 

Mr Barry Gilbert, a senior 
vice-president with Warner 
Bros in California, said the 
consumer products arm 
wanted to expand worldwide 
as rapidly as possible. 

He was unperturbed by the 
prospect of problems with 
counterfeiting in Asia, in spite 
of being temporarily based In 
Tsim Tsa Tsui, the heartland 
of copy watches and clothes 
depicting Walt Disney and 
Warner Bros characters with 
varying degrees of skill and 
accuracy. 


By Terry Hafl 
in Wellington 

Lion Nathan is planning up to 
three breweries in China as a 
way of diversifying from the 
mature Australian and New 
Zealand beer markets. Mr 
Douglas Myers, Lion chief 
executive, said yester- 
day. 

The announcement mttip as 
Lion Nathan, the biggest 
brewer in both countries, 
reported a 45 per cent rise in 
profits to NZ$204m (US$124_9m) 
in the year to August 3L Its 
brands include Castlemaine 
XXXX, Tooheys, Swan and 
Stemlager. 

Mr Myers said the first of its 
Chinese investments, a joint 
venture in Shanghai, was 
likely to be confirmed in 
December. He said that 
because of the risks involved, 
Lion Nathan wanted to be the 
leading partner. It was consid- 
ering “green field” develop- 
ments because of the vast over- 
manning in Chinese breweries 
which used 300 to 400 per cent 
more staff than was required. 

He hinted that the initial 
investment would be around 
NZJiOOm and would stem from 
the company's strong cash 
flows of NZ$230m. 

Mr Myers showed frustration 
at analysts' criticism that the 


By Emiko Terazono 
in Tokyo 

Fanuc. a Japanese maker of 
machine-tool equipment, said 
profits for the first six months 
to September increased sharply 
due to cost-cutting measures 
and streamlining of operations. 

Unconsolidated recurring 
profits - before extraordinary 
items and tax - for the first 
half rose 13.4 per cent to 
Yl&2bn ($136m) in spite of a 4 
per cent foil in sales to Y54bn. 
Orders for the first six months 
rose 172 per cent to Y6i.6bn, 
and after-tax profits rose 8.3 
per cent to YTbn. 

Operating costs fell 9.6 per 


Lion Nathan 


Share price (NZ$) 
45 



ZJS ' 1 1 *■ ■* 1 

Nov*S3 94 

BouHcDAttim 

company is burdened with 
“mature” products and intense 
competition in world markets: 
a view that has caused Its 
share price to perform poorly. 

He said that the company 
had done everything analysts 
had demanded, and yet its 
share price was lower than 
when it was deep in debt Its 
balance sheet had been 
strengthened by asset sales 
and high cash flows w hich ha d 
reduced net debt by NZ$27lm 
over the past year. The debt to 
equity ratio was 38.62 at 
August 31, compared with 47 A3 
the year before. 

The dividend is being lifted 
to 15 cents a share from 13A 
cents last year. 


cent to Y43.6bn resulting in a 
rise in operating profits by 292 
per cent to Y10.4bn. 

Non-operating profits fell 26 
per cent and non-operating 
costs foil by 533 per cent Sales 
in Fanuc's factory automation 
division fell 4.1 per cent to 
Y33.6bn, and its robot division 
fell 113 per cent to Y15bn. 

The company said it would 
raise dividends for the current 
business year to Y20 a share 
from Y18, due to the profit 
growth. 

Fra- the full year to March, 
the company expects a 63 per 
cent rise in sales to Y1133bn 
and a 24 per cent rise in recur- 
ring profits to Y283bn. 


Arco takes stake in Chinese refinery 


By Louise Lucas 
in Hong Kong 

Atlantic Richfield (Arco), the ire oil and 
natural gas group, has conditionally taken 
up 237.6m shares in zhanhwi Refining and 
Chemical Company, one of the biggest refi- 
neries in China which will next month 
launch a public offering in Hong 
Kong. 

The stake will give Arco some 93 per 
cent of the registered capital of Thtmhai. 
The stock has not yet been priced, but the 
company is understood to be aiming to sell 
its shares on a multiple between 102 and 


12.5 with an issue price range between 
HKJ2.05 and HKgvsn 

Arco’s interest is a vote qf confidence in 
a company which is perceived - in Hong 
Kong at least - to have problems. In May, 
Beijing reimposed controls on the pricing, 
import and distribution of crude oil and oil 
products and, in spite of attempts by Zhen- 
hai’s parent, Srnopec (China Petrochemi- 
cal Corporation), to smooth the impact of 
this, the company is seen as being in effect 
unable to control the pricing of its prod- 
ucts. 

While analysts see the introduction of a 
foreign partner as a positive sign, many 


caution there is no direct corollary with 
this and expansion in overseas markets. In 
July 1393 Tsmgtao Brewery, the first main- 
land company to list in Hong Kong, sold 5 
per cent of its shares to Anheuser Busch, 
the US brewer, but appears to have had 
little help in building markets abroad. 

Zhenhai Is due to release its prospectus 
early next month, with the initial public 
offering pencilled in for November 15. It 
plans to issue 600m shares, or 25 per cent 
of the company, to raise HK$12bn 
(US$155m) to HK$L5bn. It will become the 
12th mainland company to have its pri- 
mary listing in Hong Kong. 


Packer finds his investors obliging 


scarely surprising. By the end 


Fanuc enjoys sharp 
rise following shake-up 


THE CHINA FUND 

(Ah exempt company incorporated fa tbe Cayman blonds wUb Umbsd Uabfflty) 

1994 INTERIM RESULTS 

(Unaudited) 

REVIEW AND OUTLOOK 

The renewal of Chins':. MFN status for another year by- the US Government and 
general improvement? in the SI no-OS relationship benefited international 
investors' sentiment towards China. The Chin esc go vernm ent's temporary 
credit casing in tbe second quarter of 1994, together with the rescue plans 
announced by the China Securities Regulatory Commission tor the battered *A" 
share market*, prompted a rebound In the U’ share market. During the period 
under review, the CLSA China "B" Index row by 16.05* in US dollar terms. 

Against jl background of deteriorat i ng Inflation, the Chinese government h 
unlikely to case credit In the short term. There is also expected to be 
a substantial supply uf new issue stores which may restrain the China *B" share 
market. -H* shares and other Hong Kong listed companies with significant 
activities In China ctmemly offer better opportunities than many *B* shares. 
The I n ve st ment manager wfll continue to focus on shares with above-user age 
earning;, growth prospects and attractive valuation with an emphasis on 
Infrastructure and consumer related companies. 


r*l,1 IBghlljhU 

Net Assn Value 

Net Asset Value per stare 

30th September 1994 

uss 

58.524.353 

10.94 

50 September 1995 

USS 

48.515368 

9.70 


Half-year catted 

ended 


3tHI? Seplouitt J924 

Jodi September ISfiS 


USS 

uss 

larant 

Dividend Income 

533.976 

553.614 

(merest on deposits 

17.750 

48,148 


551.726 

601.762 


Operating expenses 

1621.606) 

(69&216) 

Net toss tor the period 

(69.880) 

(94,454) 

Ion per share 

(00131) 

(0,0189) 


LOSS PER SHAKE 

Tbe calculation of loss per ottBnary share is based on tbe loss tor the period of 
U5J69.8SO (1993: USS94.454) and weighted average of 5,314,956 0993: 
.OOO.OOO) ordinary shares In issue during the period. 

DIVIDEND 

The Board of Directors does not recommend tbe payment of an Interim 
dMdeod. 

EXEROCS8 OF WARRANTS 

During the period. 203.420 warrants were exercised and converted into 
3)3,420 oidbury shares of USS0.01 cadi tor an aggregate cash consideration of 
U5S2, 034,200. On 30th April 1994. subscription enthtanaKS attach ed to t he 
balance of 648,125 unexcreised warrants lapsed and thereafter the warrants 
erased tu he valUl tor any purpose. 

DIRECTORS’ INTERESTS 

At 30th September 1994. none of the Directors had an interest, either 
beneficially or non-bencflciaUy. in the share capita! of the Company. 

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES 

OF THE COMP ANY 

During the period, the Company nether purchased, sold nor rtdeanedany of 
Its own listed securities. No pre-emptive right* exist under Cayman bloods law 
m refaifon to hsucs of new tacd securities by the Company. 

By order of tbe Boon* 

JMee&Ffercon (Cayman) United 
26 th October 19*4 SaavLary 

.4 copy of tbe interim report and any further tofiamattun 1 

Assistant Semiar. MrrtrtWwm Management (Asm Limited.-^ hobr 

Alexandra House, 16 -JO OmW Road, Central. Hang Kong. Contact: 


URS RIEDER 

vith sorrow announce his death on 
Tuesday October 25th 1994. 

lien Mass will be held on Friday October 
28 th at 

.30 am at St- James’ Catholic Church, 


9 


TNs notice appear* a* a matter of record 


Colgate Palmolive 

has acquired the 
Oral Hygiene Business of 

Ciba-Geigy (India) 

for 

13 Billion Rupees 


Arthur Andersen Corporate Finance 

acted as financial advisor to 

Ciba-Geigy (India) 


Contact: 

London 

Michael Oaten (44 71 438 3178); Maneksh Dattani (4471 438 32057 
Bombay 

WJay Sahnl 191 22 218 7824); Anwet Parikh 191 22 218 2929) 


JERSEN 

Arthur Andersen &Cd SC 


Arthur Aminwn is atahorfefd by to Itmlhttr of ChanewJ Acco u n ti mm i 
England and Wales io carry an Lmitm c n t borin&v 


The Property Finance Sourcebook 1994 

1 Avoid expensive fees - go straight, to the som c e . With this book you ore the I 
expert. The ultimate Property Finance Directory, indispensable Cor anyone] 
i UK property. Call 071 495 1720. 



DO YOU WANT TO KNOW A SECRET? 

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AMs! Bank 


Australia and New Zealand 
Banking Group Limited 

AiunuBon Company Number 005 357 522 
(Incorporated noth limited foixlicy m the State qf Victoria, Australia) 

U.S. $250,000,000 

Subordinated Floating Rate Notes due 2000 
of which U.S. $140,000,000 is being issued 
as the Initial Tranche and U.S. $70,000,000 
is being issued as the Second Tranche 

Notice is hereby given that for the. Interest Period 26th October, 1994 
to 26th April. 1995 the Notes will carry a Race of Interest 
of 6.4375 per cent, per annum with an Amount of Interest of 
U.S. $3,254.51 per U.S. $100,000 Note. The relevant Interest 
Payment Dare will be 26th April, 1995. 


Bankers Trust 
Company , London 


Agent Bank 


Central Hxspano Financial Services Limited 

U.S. S 100,0004)00 

Primary Capital Guaranteed Hosting Rata Notes duo ZOOS 
with a substitution guarantee on a subordinated basis of 
Banco Central HSspanoamericarto, SLA. 

In accordance with the provisions of the Notes the following notice 
Is hereby given: 

Interest Period: October 27, 1994 to April 27. 1!H5 (182 days) 
Interest Rate: 6,125% px 

Coupon Amount U-S-S 309.65 per U-S.S 10,000 Note 
Payment Date: April 27, 1995 

Frankfurt/Main, October 1994 

COMMERZBANK Jflt 


Citicorp Banking Corporation 
U.S. $250,000,000 

Guaranteed Floating Rate Subordinated Capital Notes 
Due July 10, 1997 

Unconditionally Guaranteed on a Subordinated Basis by 

cmcoRP o 


US$10,000 nominal of the 


4 against Coupon N 
Notes wiB be US$46. 


67. 


October 27, 1994, London , 

By: Citibank, hLA. (Issuer Services), Agent Bank Cl I IpAmO 


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teuton mam 



Kramat tin 
in share swap 
with AOI 

By Kferan Cooko 
In Kuala Lumpur 

Kramat Tin Dredging, the 
listed subsidiary of Malaysia 
Mining Corporation (MMC), 
plans a share swap with 
Artika Optima Inti (AOI) of 
Indonesia tn a deal estimated 
to be worth US$145m. 

Kramat will gain a 32 per 
cent stake in AOL while AOI 
will hold about 25 per cent of 
KrsniflL 

The Kramat/AOI deal is sub- 
ject to approval by both tbe 
Kuala Lumpur and Jakarta 
stock exchange authorities. 

MMC was once one of the 
world’s biggest tin conglomer- 
ates but in recent years has 
diversified away from mining. 
AOI is part of the Djajanti 
Group. <me of Indonesia’s big- 
gest timber companies. 

Analysts say the deal allows 
Kramat to focus its attention 
on the potentially lucrative 
timber industry, while giving 
AOI the opportunity of a 
“back door” listing on the 
Kuala Lumpur exchang e. 

Earlier this year AOI was 
refused approval for a public 
offering on the Jakarta stock 
exchange after the Indonesian 
government said that the com- 
pany had failed to abide by the 
terms of its forestry conces- 
sions. 

AOI has announced plans to 
build a large cement plant in 
eastern Indonesia. 

In June PT Bari to Pacific, 
me of Indonesia's largest com- 
panies, entered into a complex 
shares and cash deal with Mal- 
aysia's Construction and Sup- 
plies company. 

Analysts said that deal, still 
subject to approval from the 
Malaysian securities authori- 
ties. would allow Barito to 
raise funds on the hi g hl y liq- 
uid Kuala Lu m pur market. 


Seoul paper group 

buys bank stake 

Hausol Paper, South Korea’s 
biggest papa: maker, said it 
would buy a 15 per cent stake 
in Donghae Merchant Banking 
for WonlT.lbn (521.4m) in an 
attempt to secure a controlling 
stake in the bank, Reuter 
reports from Seoul. 

Seoul-based Han sol and a 
local businessman are cur- 
rently the biggest share- 
holders in the Pusan-based 
bank, with each having a 10 
per cent stake. 






23 


Matif 
ready to 
launch 
rapeseed 
futures 

T oday, just a few cleaners 
and electricians are qui- 
etly carrying out their 
tasks around a nondescript 
polygonal desk at the Bourse 
de Commerce building in Paris. 
From tomorrow, in their place 
will be traders and officials 
noisily getting to work on the 
first day of a new derivatives 
market 

The latest product from 
Matif, tbe French financial 
futures market, is rapeseed 
futures - only the second in 
the world after Winnipeg, 
Canada. 

"After two years' hard work, 
we've done it!” says Mr 
Charles- Etienne de Cidrac, 
business development 

manag er 


DERIVATIVES 


Rapeseed production began 
in earnest in Europe in the 
1970s, in response to agricul- 
tural policies designed to make 
the continent less reliant on 
US soyabean imports for vege- 
table oils and animal feeds. 
The crop's yellow flowers are 
now a familiar sight, with 
1993-94 production in the EU 
running at 6.2m tonnes, or 
nearly a quarter of the world 
total. In France alone, last 
year’s crop was 1.6m tonnes. 

However, for many years the 
price of rapeseed was con- 
trolled through the EU*s com- 
mon agricultural policy and 
was only deregulated in 
reforms in July 1992. 

French farming syndicates 
approached the Matif at the 
time to ask for a way of hedg- 
ing against the volatility of the 
product 

C ontracts on the new 
market will he avail- 
able for between 4 and 
13 months from tomorrow - 
the deliberately high maxi- 
mum expiry date reflecting 
interest by the rapeseed indus- 
try in understanding long-term 
price trends. 

Mr de Cidrac says a number 
of features distinguish the mar- 
ket from others operated by 
Matif. It mil operate using tra- 
ditional brokers who operate 
across the range of its prod- 
ucts, but also with physical 
brokers trading only in rape- 
seed. 

It wfll use the “open outcry” 
system, but also have “order 
book officials”, or Matif staff 
to buy and sell for others. It 
will be quoted in D-Marks, the 
strong currency in the conti- 
nent from where most demand 
is expected- Foreign exchange 
forward contracts, to hedge 
into US dollars and French 
francs, will also he offered. 

Mr Gfeaid Pfauwadel, presi- 
dent of Matif, says rapeseed 
represents one of the few new 
types of product into which his 
organisation can diversify. It 
already offers most of the 
financial products it believes 
are viable; commodities deriva- 
tives represent a remaining 
area of growth - and one he 
sees as attractive in France, 
given its strong agricultural 
roots. 

A lmost 1,000 people have 
attended Matif training 
sessions on the rape- 
seed market since the start of 
the year. When it opens tomor- 
row, there will be 15 traders at 
tbe 17 available spaces around 
the table. 

“The question is whether the 
interest will turn into trading,” 
says Mr de Cidrac. 

“It’s a new contract for a big 
number of participants. As 
long as it is traded we will 
continue, and do more market- 
ing if necessary. We are 
obliged to operate the markets. 
For us it's a strategic move. 
We are looking to provide a 
service to customers rather 
than find a source of 
prone. 

Mr Pfauwadel says: “Rape- 
seed is a new product and a 
test for others. It is dearly not 
a big contract If we had more 
than 300 contracts a day I 
would be extremely happy. We 
are rich enough to support a 
low volume for a certain period 
- certainly the first full season 
and probably several years.” 

If things go well, Mr de Cid- 
rac says there is the possibility 
- not yet under serious discus- 
sion - of options in rapeseed, 
and futures in related products 
such as sunflower oiL More 
generally. Matif is considering 
contracts in wheat and other 
commodities as their prices are 
liberalised. 

On the other hand, there is 
no guarantee of success. Coffee 
futures were dropped in April 
this year through lack of inter- 
est. More poignant still, the 
very trading room in which 
rapeseed fixtures will be based 
has been empty for two years, 
since Matif abandoned its 
cocoa futures market 

Andrew Jack * 



FINANCIAL TIMES THURSDAY OCTOBER 


27 1994 


INTERNATIONAL CAPITAL MARKETS 


Gilts lurch lower after auction disappointment 


By Conner MiddeJmarm 
In London and Frank McGurty 
m Now York 


Most European bond markets 
drifted lower in a narrow range 
yesterday, rem ainin g in the 
thrall of US Treasuries, where 
all eyes are on tomorrow's 
release of third-quarter GDP 
data. 

New supply In the UK, Ger- 
man and US markets, amid 
continued investor abstinence, 
also damped market sentiment 


■ UK gilts weakened on the 
day, with the December long 
gilt futures contract on Liffe 
shedding & point to 99£. 

Prices lurched lower after 
the Bank of England 
announced the results of the 
auction of £2£bn 8 per cent 
gilts due 2000. The biggest dis- 
appointment was the fact that 
the auction was only L 2 times 
covered - the lowest bid-to- 
cover ratio this year, and well 


below the L5 to 1.75 cover most 
market participants had fore- 
cast Ihe tail - the difference 
between the highest and the 
average accepted yield - was 
in line with forecasts at two 
basis points. 

Dealers were also disap- 
pointed that 93 per cent of the 
bids were allocated at the low- 
est accepted price of 96.01, 
yielding 8.84 per cent. The 
highest accepted price was 
S&24. 

Dealers cited various expla- 
nations for the disappointing 
result. ‘This is not an area 
favoured by overseas investors, 
who prefer the 10-year sector " 
said Mr Don. Smith, UK econo- 
mist at Midland Global Mar- 
kets. UK life insurers and pen- 
sion funds, which tend to go 
for longer maturities to match 
their long-term liabilities, also 
showed little interest in the 
issue, said one dealer. 

Increased fears of another 
near-term tightening in UK 


interest rates also put a 
damper on the auction’s perfor- 
mance, said another dealer. 

Moreover, "the Bank has 
issued a lot of tranchettes and 


shift in interest rate 
polity. 

This sparked speculation 
that the Bundesbank will soon 
revert to variable-rate repos, 
its favoured way of co n du cti ng 
open-market operations, after 
14 weeks of fixed-rate repos, 
paving the way for lower 
short-term interest rates. 


GOVERNMENT 

BONDS 


the market has had to absorb a 
lot of supply in recent weeks,” 
said Mr Adam Chester, econo- 
mist at Yamaichi Interna- 
tional This, on top of the pre- 
vious supply, tipped the 
balance against the market.” 


■ German bonds ended the 
day slightly lower, but bund 
futures staged a smart rally in 
after-hours trading on remarks 
by Bundesbank vice-president 
Mr Johann Wilhelm O flrMuw? 

He cautioned against infer- 
ring too quickly that a change 
in the terms for the Bundes- 
bank’s weekly securities repur- 
chase agreements signalled a 


■ US Treasury bond prices 
held fairly steady yesterday 
morning despite weaker-than- 
expected economic news, as 
dealers adjusted their positions 
ahead of an afternoon supply 
auction. 

By midday, the benchmark 
30-year gov e r nment bond was 
down & at 931, with the yidd 
rising to 8.052 per cent. On the 
short end, the two-year note 
was unchanged at 991, to yield 
6.875 per cent 

The long end opened firmer, 
due to a mildly encouraging 
reading on durable goods last 
month. The Commerce Depart- 


ment reported that factory 
orders had risen CU per cent in 
September, alter a big gain the 
previous month. Analysts had 
forecast a 0.6 per cent 
Increase. 

But the market made scant 
progress on the data, with 
' most traders awaiting the 
year's sixth boost in short-term 
Interest rates sometime in the 
next month. In add i tion, many 
were concerned that Friday's 
estimate of third-quarter gross 
domestic product would sug- 
gest the economy was acceler- 
ating as it entered the final leg 
erf the year. 

However, bonds across the 
board were hovering close to 
their opening values in spite of 
a mixed performance by the 
dollar on the foreign exchange 
markets. 

But some marginal weakness 
set into the long end just 
before midday, as dealers set 
up positions ahead of the Trea- 
sury's auction of 511 bn in five- 


year notes during the early 
afternoon. Although the previ- 
ous day’s sale of two-year 
notes had generated tepid 
demand, there were positive 
expectations before yesterday's 
action. 


Setback for CME 
chief as members 


reject merger plan 


• Russia’s first issue of 12- 
month zero-coupon Treasury 
bills yielded an average of 
450.05 per cent at auction, 
according to the Moscow Inter- 
bank Currency Exchange. Ren- 
ter reports. 

The flnawrp ministry set the 
minimum price at 22.56 per 
cent of par white dealers* bids 
ranged from 9 to 50 per cent 
Demand was for Rbs274.3bn 
against Rbs200bn on offer, but 
only Rbs60.5bn worth of the 
paper - 30.25 per cent of the 
issue - sold. 

The average price totalled 
25.53 per cent of face value. 
One-year T-bills were issued 
with a face value of 
Rbslm. 


By Laurie Morse 
in Chicago 


A plan to merge the two most 
powerful divisions of 
the Chicago Mercantile 
Exchange, the CME and the 
International Monetary Mar- 
ket. failed to obtain the 
required two-thirds majority in 
a membership referendum this 
week. 

The dereat was a setback 
for Mr Jack Sandner. the CME 
riiairman . and the exchange’s 
board of governors, who 
had recommended the merger 
as a way to give the 
IMM’s bank members a 
broader voice in exchange gov- 
ernance, and to bring new 
blood into the CME’s low- 


volume agricultural pits. 

With 90 per cent of tne 
exchange's membership voting. 
3,307 voted in favour and 2,439 
against. 

The measure failed to win 
the required majority in part 
because of aggressive cam- 
paignin g against the merger by 
MrLeo Melamed, who founded 
the IMM more than 20 years 
ago, but for the past three 
years has not been active m 
CME affairs. . . .. . 

Mr Melamed contended that 
a merger of the IMM and CME 
could bring unexpected conse- 
quences. and that there were 
other. less intrusive ways to 
give IMM membership greater 
representation at the 
exchange. 


James Capel 
gains London 
listing for fund 


Borrowers target deals at retail investors Italian SE to launch 


By Martin Brice 


By Norma Cohen, 

Investments Correspondent 


James Capel. the UK 
stockbroker, has obtained a 
listing on the London Stock 
Exchange for its HSBC China 
Fund Investment trust, in 
order to boost liquidity in the 
shares. 

Its shares have been trading 
on the Hong Kong Stock 
Exchange since June 1992. 
However, they are trading at a 
discount of 20 per cent to net 
asset value, the largest dis- 
count of any similar vehicle. 

The HSBC China Fund will 
be the first London-based 
vehicle to offer direct access to 
investment in China. The man - 
date is to split investments 
equally between listed and 
unlisted Chinese companies. 


The euromarket saw a 
selection of carefully targeted 
deals yesterday, following the 
trend of short-dated issues. 

Poland is planning its debut 
eurobond, believed to be a 
$200m five-year deal for next 


INTERNATIONAL 

BONDS 


spring, and the Spanish prov- 
ince of Andalusia is believed to 
be bringing a five-year deaL An 
AAA-rated borrower is 
rumoured to be preparing a 26- 
year peseta deal. 

Bayetische Yereinsbank 
came to the market for the sec- 
ond day r unning . Lead man- 
ager Hambros reported “a very 
good first-day response” for the 
A$100m five-year deal with a 10 
per cent coupon. Other syndi- 


cate managers praised the pric- 
ing on the deal, which followed 
offerings for NAB and Com- 
merzbank this year. Hambros 
said the spread on those deals 
had tightened in since launch. 

Also in the Australian dollar 
sector, Nomura handled a 
three-year A$100m deal for 
New South Wales Treasury 
Corp with a 4.5 per cent cou- 
pon and a price of 88561. Other 
syndicate managers said the 
coupon and price suggested It 
was aimed at Tokyo investors. 

CSFB also targeted the DSL 
Finance DMSOOm four-year 
deal with a 7% per cent coupon 
at a strong lead order out of 
Switzerland. 

J.P. Morgan used the same 
currency and maturity to bring 
a DM2S0m four-year deal with 
a 7‘/« per cent coupon for 
J.P. Morgan & Co aimed at 
retail demand on the European 
continent Investors pick up 36 


basis points by moving one 
year out along the curve to the 
four-year area. Morgan said the 
10-year bund contract was trad- 
ing around 8855 at launch but 
fell back to 88.63. The bonds 
came at a spread of 14 basis 
points over and Morgan said 


they were trading at between 
14 and 17. 

Wood Gundy handled a sev- 
en-year C$1 65m deal with a 9 
per cent coupon for the Euro- 
pean Investment Bank which 
received positive comments 
from other houses. One said: 


‘This deal will work well” 
Manhattan Card Co brought 
a 8200m offering guaranteed by 
credit card-backed assets in 
Hong Kong and lead-manager 
Chase Securities said most 
rigmami for the had come 
from Europe. 


options on MIB index 


By Richard Lapper 


NEW INTERNATIONAL BOND ISSUES 


Amount 

Coupon 

Price 

Meturfty 

Fees 

Spread 

Book runner 

Dot tower 

D-MARKS 

m. 

% 



% 

bp 


DSL Rnancsfa) 

300 

7.126 

990OR 

Nov. 1938 

O02SH 

>7C5Htt-g8l 

CSFB-Blectan&ank 

JP Morgan & Co^ 

230 

705 

10a 1258 

Nov. 1338 

0225ft 

♦14{514%- 90) JP Morgan 

ITALIAN URE 

Oithnhnili tel *— An_ifi 

HaoooanK rMcenanc 

150bn 

1106 

101.23 

Deal 99 7 

1075 

- 

Btaica Commerdala ttatana 

CANADIAN DOLLARS 
European Investment Bank 

185 

9.00 

99.778 

Dec20O1 

0J3GR 

>iow 

Wood Gundy 

AUSTRALIAN DOLLARS 
Bewrische VeromeDank 

100 

1000 

10097 

Deal 989 

200 


Hambros Bade 

New Sth.Waiee Traeaury Corp.* IOO 

4.508 

88081 

Nov. 199 7 

1075 

- 

Nomura Intamatlonal 

LUXEMBOURG FRANCS 
Frfeica TalecomW 

2 bn 

8.00 

102.40 

Fetx2000 

105 

. 

CtadR EuropOen 

Final terms end non-calable unless stated. The yield spiced (over relevant government band) •* launch to suppBed by the lead 
manager. *UnSsted. fSemi-ennuto coupon. Ft fixed ire-otfer price; tees are shown el the re-offer level, a) Long let coupon, w Over 

Interpolated yield. 









The Italian stock exchange is 
planning to introduce a range 
of options contracts over the 
next year, including new 
options on individual shares 
which make up the MIB index. 

Mr AttUlo Ventura, chair- 
man of the exchange, said that 
there woe also plans to intro- 
duce options contracts on the 
exchange’s new stock index 
fixture which is based on the 
MIB index. Trading in the 
stock index future itself is set 
to begin on November 28. 

The new options on individ- 
ual shares will be exercisable 
any time during the life of the 
option. The options on individ- 
ual shares quoted on the Milan 
bourse, known as prenti, are 
typically of short duration and 
are exercised at maturity. 


Mr Ventura said the new 
derivatives products were 
being introduced as part of 
efforts to increase liquidity fol- 
lowing a big increase in inter- 
est from overseas investors. 
Daily trading volumes in Milan 
have increased sharply in 
recent years. 

Trading in all the new deriv- 
atives products will be screen 
based. The exchange is also 
planning to introduce a second- 
ary market for small and medi- 
um-sized companies. 

Earlier this week NatWest 
Markets introduced a market 
in warrants related to each 
constituent port of the MIB - 
made up of the shares of 30 
leading companies - and said 
it would create a liquid second- 
ary market by publishing 
“live” two-way prices on Reu- 
ters. 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 



Coupon 

Red 

Date 

Price 

Day's 

change 

YMd 

Week 

ago 

Month 

ago 

Auatralta 

9.000 

09104 

91.1800 

-1.150 

10.45 

1001 

1030 

BetgVjm 

7.750 

10104 

945600 

- 0.020 

858 

832 

8.45 

Cerada * 

8000 

06HD4 

835500 

-0.150 

9.14 

9.11 

807 

Denmark 

7000 

12/04 

860200 

-0.400 

902 

8.75 

9.96 

France BTAN 

0.000 

05/98 

1010000 

- 

7.88 

733 

7.43 

OAT 

5.500 

04/04 

81.7200 

- 0.120 

836 

804 

805 

Germany Trou 

7500 

09AM 

985600 

-0.060 

7.71 

7.41 

752 

Italy 

8500 

08/04 

81.0000 

-0030 1153t 

11.71 

1138 

Japan No 119 

4500 

06/99 

1020750 

- 

4.12 

407 

383 

Japan No 164- 

4.100 

12/03 

95.8720 

-0.150 

4.78 

409 

4.49 

Netherlands 

7050 

10/04 

97.0400 

-0.020 

708 

7.41 

7.45 

Spain 

8.000 

05/04 

813000 

♦0.130 

1107 

11.14 

ias7 

UK G*ts 

5000 

08*99 

89-08 

-9/32 

a bo 

8.43 

a62 


8.750 

11/04 

85-24 

-14/32 

8.82 

859 

082 


9.000 

10/08 

101-04 

-15/32 

806 

857 

a?8 

US Treasury " 

7050 

08/04 

95-24 

-5/32 

7.88 

707 

756 


7500 

11/24 

93-22 

-8/32 

ara 

709 

700 

ECU (Bench Govt) 

6.000 

04AM 

825900 

-0070 

a.77 

8.48 

859 


Italy 

■ MOTIONAL ITALIAN GOVT. BOND (BTP) FUTURES 
CUFFET Ufa 200m IQOlha o I 100 % 

Open Set! price Change High 
Dec 99-25 99.55 >0.41 100.17 

Mar 9590 98.78 +0.41 99-20 i 


FT-ACTU ARIES FIXED INTEREST INDICES 

Price intScaa Wed De/s Tim Accrued xd ad}. 


% Oct 25 interest 


— Low coupon yield — ■ — Merflum coupon yMd — — High coupon ytaid — 
Oct 26 Oct 85 Yr. ago Ocl 28 Oct 2S Yr. ago Oct 28 Oct 25 Yr. ago 


EsL vat Open kit 
49672 60362 

385 4796 


1 Up to 5 years C24) 118.40 -0.16 11559 1.20 903 5 yre 


■ ITALIAN GOVT. BOND (BTP) FUTURES OPTIONS {UFFQ Ura20Qm IQOlha of 10034 

Strike CALLS ~ PUTS - 

Price Dae Mar Dec Mar 


2 5-15 years (23 

3 Over 15 yen ( 8 ) 

4 biedeemitafes ( 6 ) 

5 Al stocks (60) 


136.69 -0l39 137.22 

152.40 -0.41 153.04 

171.03 -039 171.89 

13435 -032 134.77 


11.00 ISyre 
10.57 20 yn 
13.47 trredt 
1065 


{filiation 6 % — 

Oct 26 Oct 25 Yr. 


- — Inflation 10% — 
Oct 26 Oct 25 Yr, ago 


Dec 

Mar 

Dec 

Mar 

8 Up to 5 years f2) 

185.54 

-ai 2 

185.78 

033 

607 

130 

205 

105 

209 

7 Over 5 yearafll) 

17100 

-a45 

17208 

0.77 

438 

1.04 

204 

1.49 

308 

8 AS stocks (13) 

17^44 

-0.42 

173.18 

0.72 

4.41 

002 

1.84 

1.77 

358 







10000 1.04 004 1.48 

10090 082 1.84 1.77 

Ear. VOL tow. CMs 4413 Puts 3230. Previous <toy« span Irtu Caflt 23605 Putt 28841 


302 3.88 3.14 


2.82 2.75 1.45 

3.72 3.63 236 


Debentures and Loans 


s vow yMd is year viekl— — 28 year yield — - 

Oct 26 Oct 25 Yr. ago Oct 26 Ocl 25 Yr. ego Oct 26 Oct26 Yr. ago 


9 Dabs & Loena (77) 125.33 -0-23 125.70 208 904 9.99 903 7.72 9*7 9.79 8*4 9.77 9.75 8.17 

Avenge grata redampOca ywkto are jhown above. Capon Banda; Love 0H-7VH; Mafrere BK-10WK; Ms* 11 % aid over, t Rat ytakL yta Yaar to dm. 


London dosing. -Nov* York mid-day 
f Oran finchicSng vwWioMm lax at 125 par 
Pncas: US. UK in 32rm odm in dacanal 


VWda: Loca martiet stanttad. 
cent payable by ncrreafcJona) 

SoutX UUS I n ternational 


US INTEREST RATES 

tUKfflblM 


Tmsvy BUs and Band Yields 


Spain 

■ NOTIONAL SPANISH BOND FUTURES (XffEFF) 

Open Sett price Chengs Hfigh Low Eat voi. Open kit 
Dec 88.40 88.43 >008 8078 86.35 44,379 75.779 

Mar 86.40 8530 *090 88.40 86.40 50 50 


FT FIXED INTEREST INDICES GILT EDGED ACTIVITY INDICES 

Oct 26 Ocl 25 Oct 24 Oct 21 Oct 20 Yr ego High' Low- Oct 25 Oct 24 Oct 21 Oct 20 Ocl 19 

Govt Sees. (UK) 8008 9040 9094 9129 91 JO 10208 107.04 89.54 Git Edged bargatna 87.8 64.8 91.9 860 89.4 

Fixed Interest 107.08 107.48 107.94 108.05 10031 124.83 13307 10050 5-day avenge 84.1 84.5 88.9 91.0 94.4 

• tor 1994. Govarameiri Securitas Mgn dace c refetotare : 127.40 (3IV35). ton **-lB cyi/73). Rod fataraai Ngh atece canpIdtoK 1SJ07 (2171/M . to* 6053 (W79 . Bash 100 ; Owammant Seeuflha ISnW 
20 and Fbad Merest 1828. SE actnnty nden rabaaad 1974. 


Prime rata 

Broker loan rate . 

Fed. (undo 

FedJInfe it fakr 


— 6 % Vim mrt 

4% Smart* 

W_ - Om year- 


478 

Two year 

807 

546 

Dm year 

7.12 

016 

fttejsor 

752 

574 

10 -ytete- 

706 

601 

30-yaw 

aas 


BOND FUTURES AND OPTIONS 


France 

■ NOTIONAL FRENCH BONO FUTURES (MAT7F) 

Open Sett price Change High Low Eat voL Open tnL 
Dec 109.68 108.50 4X22 110.00 10038 180.481 138,092 

Mar 10092 10O7D - 1 X 22 10098 10088 429 11,488 

Jun 10014 107.92 -022 10014 10014 2 781 


■ NOTIONAL UK GU.T R/TURCS (LIFFE)* CSO.OOO 32rxfa ot 10096 

Open Seit price Change High Low Eat vd Open M. 
Dec 09-28 99-10 -0-13 100-06 99-08 80001 100754 

Mar 98-30 98-13 -0-13 98-30 98-30 5 48 


FT/fSMA INTERNATIONAL BOND SERVICE 


LWed as aw Most i 


■ LONG GOT FUTURES OPTIONS (LIFFE) £50,000 640w of 10016 
Strfce CALLS PUTS 


floral bantli far ref** fwe fa *i adequate secanday marfceL latest prioae at TOO pm on Oetabm 28 
Issued 8 M Offer Chg. YMd Issued BU Oder Chg. 7 


toaued ad Oiler Chg. Ytakl 


Ear. vol. total. Cdta 18708 Pus 2705. Previous day's apart taL. Cate 70019 Put* 42448 


■ LONG TERM FRENCH BONO OPTIONS (MATIF) 


Strike 

Price 

Nov 

— CALLS - 
Dec 

Mar 

Nov 

— PUTS — 
Dec 

Mar 

110 

005 

0.78 

138 

058 

109 

2.63 

111 

112 

113 

114 

001 

0.42 

001 

Q.09 

0.02 

100 

0.70 

0.47 

150 

1.93 

209 

358 

451 

332 


Ecu 

■ ECU BOND FUTURES (MA7TF) 

Open Sea price Change High Low Est voi. Open tm. 
Dec 7904 79 £6 -028 8006 7058 1394 0540 


EsL <roL total. CA 21.880 Put* 20200 . l*utoua day 1 * opon teL. Ctaa 280429 Put* 330£Se. 


Germany 

■ NOTIONAL GERMAN BUND FUTURES (UFFET OM25Q.OOO IQOths of 10096 

Open Sen price Change High Low Est voi Open P. 
Dec 88.70 68.63 4X05 89.08 6954 147790 182558 

Mar 8900 87.84 4X08 88.04 67.77 884 4743 


•006 88.04 


■ U 8 TKEA 8 URV BOND FUTURES (C 8 T) $ 100,000 32nds of 10064 

Open Latest Change Fflgh Low Est voi Open kx. 
Dec 97-10 97-11 * 0-02 97-21 97-08 383021 394,798 

Mer 96-22 3922 XHJ2 97-01 96-20 2008 27,496 

Jiai 98-06 984)2 >04)8 96-08 96-02 109 11234 


■ BUMP FUTURES OPTIONS fljFFB DM260.000 points Of 100% 


Strike 

Price 

Dec 

CALLS — 

Jon Feb 

Mar 

Dec 

Jan 

PUTS 

Feb 

Mer 

8880 

8900 

aaso 

op 0 

*2 2 S 

088 1.10 

0.86 a 90 

050 0.72 

104 

1.02 

004 

0.82 

108 

138 

152 

102 

2.16 

1.78 

208 

238 

1.90 

2.18 

250 


Est vaL total. Cate 22310 put* IS329. Previous day's opart InL CM* 26*349 Purs 217900 


Japan 

■ NOTIONAL LONG TERM JAPANESE GOVT. BOTffl FUTURES 

(LIFFE) YlOOnt IQOtha of 10076 

Open Ooee Change High Low Eat. voi Open Int 
Dec 107.56 107.58 107.44 2204 0 

Mer 10981 10981 10981 6 0 

’ UFTE coriMcta mood on APT. Al Open tarereat ftg*. at tar previous d ay. 


UK GILTS PRICES 


1994 _ 

tod Price! > or- Hpi Low 


-Rtf- 1894 _ 

fat rod Meat >cr- H» Low 


u -Arid- _19M_ 

flea* ft) G 9 l»rfcaE >tr- Hsu um 


Sharto" (Urea op ia Rw Y**re) 

HetaSpcl»4tt &S7 

12BC1895 11 S3 

EiKtl 3pc 6 m 1900-85 304 

IDLpe 1996... W9 

Tnw* 12 VpclWS£t 1208 

14PC1W8 1209 

ISLpo igeeft 13.76 

BtdllttipcISMtt 1225 

COtwtrtor ICOc 1996 069 

Treat Dw Tpc 1907£t 721 

Tran iSLpe 1987*t„ 1204 

&di ioijpe leer nun 

Treat B*pelS97t* 808 

Ettfl 15pc 1887 11M 

9\0C 19M- 9^7 

Treat 7Lpc 1998# 755 


Treat 8Xpc1B95-«8$t_ 7.18 


l*OC 1BB8-1 12.12 

Treaiiaijpc'Setl 12.78 

EhJi line 1388™ law 

Treat Siipc isastt 929 


-lOOiW 
883 101U 
974 Mila 
858 102,*, 
703 IQSVti 
728 107^ 
758110Ual 
7.82108^*1 
atniow* 

919 871* 
918 UOA 

920 1041# 
943 100(1 

965 nag 

988 103 

964 98 

981 94JJ*J 

985116*3 al 

873 

9M110%a 

982 1021c 


— 103JJ 

-i 1W« 
-/« 113 s * 
-*• H7A 
12111 


->I M70 
-* 112* 
-A 100*, 
-»* 121ft 
-H 11V. 
-A TIM 


-M 131H 
-A mfi 
-ft 108* 
-4 102 

-4* 1314 

-A l«M 
V. 1231 
-ft iieft 


Fwfl*93>ipc 1809-4 

■ 00 ft ConwratosatacSOO*— 

Tree. (P, pc 200*4$ 

,25 8»»C2005 

]®i* Goar9 <ipe2005 

frso 12*3 pe 2003-8™ 

ma 

1084 *^7002-844 

TtatalHipe 2083-7 — 

B6J# Treat Blanc 2007 44 

1104 I3«9PC 2004-8 

104lj Trees epc 2008 14 

100 ft 

118$ 

102 ft 


7.77 Tit* 
903 103ft 
993 8 St 3* 
990 OTt 
900 103ft 
8321l9ftgd 
900 91ft 
986 03ft 
932 113ft 
989 97ft 
931 12% 
989 101i« 


-H 884 
-ft 12SA 
-ft 105** 

-ft IDQft 

-H 1231a 

-ft 1«A 
-H 112ft 
-h HIH 
-ft 136ft 
-ft 1194 
~h 1«ft 
-ft 12«H 


MwUM 80 

2BeV8 (874 

4t*pC9844 — (1*51 

Pjpcvi (793) 

2*ipc-o3 paa 

4^*V444 — (1385) 
acW- (899 

qijpena pare 

2lapC-13 (892) 

2topcTB (815) 

21^-20 gun 

Z>apC'24t± (87 J 

OIjOC'W — (T33.1 


2.77 4.18 180% 

254 358 107** 

144 357 168*4 

354 189 161 **al 

1» 352 107% 

353 359 167ft 
358 350 131 re* 

3L7Q 350 tcere 
172 351 126U 

976 352 138ft 
ITS 183 131*1 

977 351 108% 
351 a* 107% 


-4 203% 197ft 

-re 113* 1064 

-A 176% 163% 
-ft 173% 1694 

-A H8% 107** 
-% 184ft 163ft 
-ft 166ft 149% 
-ft 175% 184% 

3 146*1 *28*. 
157ft 184% 
1B2U 128% 
-ft 129ft 106% 
-H 128ft 105% 


"TT — i — — lUt-C l . lUJ'J 

Roepeetree reft redemption rate on projected Wlafan of ( 1 ) im 


OrorFStoto Years 

,22ft 

.?5- - 


and {2} 8M. M Ffera to pawriheaaa Show RPI base lor 

<ndw*ig pa 8 maratn prior ta leeuN end hew been eiquBtBd to 

resect rabaahtoof RPi to 100 fa Febritay 1987. Comentan 
rector 3549 PPi tar Fabrwy 1994: 142.1 end hr S epta all y 
1904; 145.0. 


ILS. (XXJLAR STRAIGHTS 
Ahbay NaD Ttaaeuy 6 % 03 _ 

Mberta Perinea 7% 98 

AusSia 8 % 00 

Bo* Ned Gnmnen 7 99 > 

Bata of T 0 i 4 a 8 % 98 

Belgun 5 % 03 

BFCE 7% 97 

BOthGtaOZI 

Ctaadieoe 

Chang Kong Hn 5% 38 _ 

Oita 8 % (M 

Ctanfl B*cpa 8 96 ■ 

CRiit FcitCta 9*2 99 

Dnradt 6 % 98 

taJhaiRrita^H- 
aac8%98 

SC 8 % 96 

SB 7% 96 

BB9%97 

Becda Fwrca 9 96 

BjrcrimH 9% 96 

Er-kn Ba* Jrpan 3 02 

Bent Ota Oori) 9% SB 

Fedofl Nfll Mert 750 04 ^ 

Htand 6 % 97 

Ford Motor Ocdt 6 % 96 

Gan Bk Cepd 9% 96 

GM4C9%98 

fad Japat Fin 7% 97 

Mr Am Dm 7% 96 

My 8 % 23-- 

Jtaan Dor Bt 8 % 01 

KarariBae Per 1096 

Korea B«c Poser 6 % 03 — 

LTC 8 Fh 8 97 

MriMttaSee7%02 

Norway 7% 57 

create 7% m 

Otter Kancftata 8*2 01 

Mre-Canst* 7% 96 

ftrtjgd5%03 

Octree Kytts 9% 98 

Qu*eePiW998 

Srinriuy9% 99 

SAS 10 99 

9SF8*z 90 

SptaiB*2B9 

Stato 6 k NSW 8 % 98 

Sweden 8*2 99 

Seed* BOOR 8 % 96 

TUgoBocPoo*rB%03 — 

To%*> Mtaopoh 8 % 98 

Tbyota Uctar 5% 96 

UnBed Kfagdam 7% 02 

Wert Beta 8 % 99 

Watt Bata 8 % 97 


- 1000 88 

-looo eore 

— 400 102*4 

- 1000 96*2 

— 100 101*4 

- 1000 82 

- 150 100% 

- 1500 9% 

- MOO 102% 

-500 88 % 

- 1000 84 

_ 100 101 % 
-300 106% 

- 1030 94% 

- 600 88 % 

- 193 101% 
_ 100 101 % 

- 290 100 % 

- 1000 104% 

- 200 103% 
_ 100 102 % 
-SOD 96% 

- 150 105% 

. 1300 95 

.3000 98 

. 1600 96*2 

-300 133% 

- 700 102 

- 200 100 

— 200 100 % 
.3500 77% 

- 500 100% 

-350 103% 
. 1390 84% 

- 200 100 % 

. 1000 94% 

. 1000 99% 

. 3000 94% 

- 200 101 % 

- 200 MO 
. 1000 83% 

- ISO 105% 

- 200 KB% 
-150 W 2 % 
-200 104% 

- 150 106% 

. 1930 94% 

-200 101 % 
.2500 98% 

- 700 101% 
.MOO 68 % 
-200 101 % 

. 1600 94% 

.3000 94% 

.1500 102 % 

. 1300 1 ( 0 % 


-% a a 

755 

754 

759 

757 

843 


Unfed Kingdom 7% W - 
IMsaagen M Hn 7 03 . 

YAWJ B**0 15 

World Bata 5% 03 

Watt Beta 6 % 00 


.5500 100% 
. 1000 93% 
.2000 19% 

.3000 87% 
.1260 109% 


100 % -% 
94% -% 

20 % -h 

57% -% 

XB% *% 


859 Attrey Nod Treasuy 8 (B E 1000 90% 90% -% 873 


sues nunc sthughts 


852 AtoiceLacs 11%B7£ . 
757 Brifeh lend 8 % 33 £ — 

751 Dmrak6%9B£ 

656 SB 10 97 E 

Hdtac 10%87£ 

Hereon 10%97£ 


. ioo «»% 105 % -% am 

. ISO 88 % 86 % -% 1053 

. 800 92% 93% -% 908 

.637 102% 103% -% 951 

. 100 103*2 103% -% 982 

. 600 103 103*2 -% 9-18 


-% 

708 

Attnt Dta Bs* 8 10 

100 

99 

«% 


810 

HS 8 C HaUngs 1109 02 £ 

153 

108% 

108% 

-% 


aio 

Ara&ta4%00 

— MOO 

«S% 

95% 


544 

kttyl0%14£ 

400 

M4% 

105% 

-% 


802 

Couid fenpe 4% 98 

250 

90% 

99 

-% 

525 

Japan Dev Bk 7 00 £ 

200 

90% 

91% 

-% 

-% 

802 

Denmk4%99 

1000 

98% 

95% 


537 

Land Sees 3*2 07 £ 

200 

96 

86 % 

-% 

-% 

909 

58 8 % 04 

— 300 

104% 

105 


8L13 

Ontario 11 % 01 £ 

M0 

M9% 

107 

-% 


7.19 

Bee da Frtree 7% 06 

— 100 

107 

108 


636 

Powsigen 03 £ ... — 

250 

95% 

95% 

-% 

-% 

708 

Ffatott7%99 

300 

107 

107% 

> 1 % 

55B 

Severn Ttat 11% 99C — 

ISO 

107*4 

*07% 

-% 


703 

HyindttMoft>rRn8%97— . 

— MO 

106% 

106% 


533 

Tokyo Bee Rom 11 01 £ . 

150 

109% 

107 

-% 


848 

krited7%00 

— 100 

107 

107% 

i*7 

514 

Abbey NaknflO 96 NS — 

100 

84% 

85% 



737 

7 13 

Kobe 8 % 01 
fkffrafcitfL m 

— 240 

_____ 400 

102 % 

□q!L> 

M3% 

im 

JL 

501 

atf 

TCNZHr9%Q2N2S 

Pnvtf Ifltsl A m PfV 

75 

inm 

98 

fVTtre 

99 

«V 

-% 

9 

-% 

s • vaJ 

7 . 1 s 

748 

Oirebec Hydro 5 08 

urctm 

100 

400 

83 

106 % 

IUU 

84% 

108% 

w 

>% 

809 

514 

u*w** LAArii 0 u 1 n 1 — - 

Bee de France 8% 22 FFr - 
ANCFril^riTnV 



3000 

. . 4000 

36*4 

103% 

TOdlfi 

■T 

-% 

J- 


7J1 

Wortt Ba*503 

— 150 

95% 

98 

«% 

586 




0 



703 

Watt Be* 7 01 

— 600 

100 

M6% 


503 

FLOXT94Q RATE NOTES 






-% 8 a 

-% 7J9 


-% 932 

753 


758 
751 
-% 759 


754 
7.17 
-% 934 


-% 918 

-% 7.17 


-% 912 

-% 755 


-% 848 

-% 753 


YEN STRAIGHTS 

Begum 6 99 

BB 6% 00 

Stand 6% 96 

Her Ante Dw 7% 00. 

Btty3*2 01 

JerenDwBk5B0 — 
Japan Ow Bk 6% 01 - 
Nppre Td Tel 5% 98 . 

Navrey5%97 

WCF6%00 

Spate 5% 02 

StadBT4%B6 

WoridBe4cS%02 


8U Offer Oopa 


. 75000 MB 
100000 109% 


.50000 104% 
.30000 112% 


102 % 

K&* . 
106 th 


.30X00 91% 

.100000 102% 
.120000 108% 
_ 50000 104% 


113 

91% ♦% 


102 % 

4% 


160000 103% 
-30000 109% 


125000 105% 
150000 101% 


.290000 102% 


104% 

103% 

110 

105% 

101 % 

1CB% 4% 


-% 935 

-% 912 


751 

954 

aw 

907 
-% 7A6 


-% 7.78 

752 


751 
970 
7.11 
-% 940 


-% 759 

759 


-% 915 

-% 754 


] 10 ft Ttaas8Uffic2010 

101(3 Cow Spc In 201 1 # 

T1«M Me 2012 # 

Taas5ljpc2009-12tt-. 

Tree* fee 20,3# 

7%pe2012-1S# 

Ttaffl H\pe 201TJ7 

11113 Ml (fee 3013-17 

105ft 

B8U 

104JJ 

am 

00% — u 

1 1Bfl 

103 b " — — — — 

88ft UfeUH3%pcn 

IffiH Cow 3%p4 *81 Mt — - 

83% tne fee WM— 

IH*f COSKtt 2%BC 

I00a TW»2%pe— 


ntataRBeeeYMn 

£WI12%pe19B9 

Tret* I0%pe IBM 

TtvesSpc 190933 

Cooeettan io**bc ibsb- 

neoiRttMklBas 

contpeanm 

Tria I3pc200o 

Ifee 2001 

TKJOOItt 

9%pg2002 

feC200W 

1 0pe 2003— , — — 
TtaMl,*zpe 2001-4 


1094 900 IIS 
951 989 imp 

972 851 89% 
an 98210SA* 
- - aofl 

998 857 VIBU 
11.10 907 117% 

9? 904 104% 
7.78 998 BOtttt 
S.J0 988 103ft 
851 952 94ft 

9.47 958 103ft 
1058 952 110% 


-A 128ft 
-A «1 A 
-ft iwii 
-ft 17*9 


-ft I ISA 
-*2 138ft 
-A 122ft 
-% 108ft 

-% iaX 

-% ii» 
-A 127ft 
-ft 129ft 


959 988 93% 
751 971 TOM 

988 982 101ft 

984 980 lOlft 

759 955 72ft 

858 a75 93ft 

654 973 90% 
972 973 100% 
941 998 127ft 


-il 115ft 
-11 98ft 
-A 196U 
-% 1 ZTH 
-% 93% 
-ft 117H 
-% 114% 

-A 128% 

-A 163% 


Otfaw Ffand Intomt 


-ttatt- 1994—. 

Matte tat fed Wea£*or- Mgb im 


flsfe, Ota 10%pc 2009— 

BTttall fee 2012 

UndC 8 ) 8 %pcT 0 

fee Cfe 1998 

,3pfH7-2 

HjitriOMtetfecSOII- 


-A 89% 

-ft Sift 

— 71 

— 44% 
-A 38% 
-ft 37% 


lead* 13% pc 2009.. 
Lftaped 3% petted.. 


LCCJpcfeML 

M — * ettn i%pe taw. 

taetWr.feeV 

Pfatte J%pc 20 Zl. 

4% pc L 2024 

1MMttSBM1S%pc2008 


946 918 108% 
1900 972 115 

933 -98 

858 - 100% 

1254 - 108 

1078 1908 1S8ft 
1980 - 125 

989 - 38% 

988 - 32 

1029 959 111% 

M4 901 87% 

- *57 131% 

- CS 125 

1218 - 135% 


-2% 138% 107ft 
-8% 142 115 

-% 110% 83% 

-% 103% 90% 

116% 108 


1B9ft 137ft 
149% 125 


-% 44% 33% 
-% 40% 28% 

-0% 138% 111% 
-% 78 80% 

-% 190% 129% 


DEUTSCHE MMK SDUMHIS 

Auafeta B% 24 2000 80% 

Ore* Fonder 7% 03 2000 95% 

Dermic 6% 98 2000 07% 

Dapfe Ffaanea 8% 03 1500 88% 

DBUKtieBkni7%Q3 2000 96% 

SC 6% 00 2900 95% 

SB 6% 00 1500 94% 

FUn17% DO 3000 99% 

Of 7% 98 5000 99% 

USBKfevWtatt8%09 2250 88% 

NcmfeB*|BB 1600 97% 

Ontario 8% 04 1800 88% 

Sp*r%Q3 4000 95% 

Snd*i897 2500 HJ2% 


80% -% 930 

95% -% am 

07% -% 703 

89*1 -** tiff 

97 -% 60S 

96% -% 75S 

95% -% 751 

99% -% 707 


86% -% 910 

97% -% 855 

88% -% 908 

35% -% 705 


ormBtsnwnms 

Gorinenoe list 9% 99 Lfr 

KBDMhdLB«*fl%03Lfy_ 

Watt Betas 08 Ur 

ABI Anc 6% 00 fl — 

Sre* Ned Genreenttn 7 03 H . 
MretaPmtecelOHBBCS — 

6^ Crete 10% BSCS 

Btatti Cotanttla 10 90 C$ 

BB 10% BB CS 

SecdeBance9%99CS—. 

Gen BteCfeM 109SCS 

WW fat fte 1001 CS 

NfaponTelTM 10%99CS 

OcartaetBCS 

QrBBttHjAo 10% 99 CS 

Oetar Konedtaeta 10% 99 CS . 
Quebec Rfe 10% 99 C9 — , 

Betyum 9% 96 Ecu 

CauxS Bicpa B 01 Ecu 

CreAl^ennttsSSBEeu 

B8 1097 Ecu — 

Fenode)Stat1O%0BEoi — 

Rely 10% 00 feu 

State 9 96 Ecu 

unied ifegdan 9% 01 Ecu — . 

ADC 10 99 AS 

CamtBcAraftrie13%99A5 . 

S 7% 99 AS 

NSWTta*jya»o0 20«_ 

H8IBttK7% 03 AS 

3tte9iNSW9D2 AS 

SCi Aral Gott Fn 9 02 AS 

Utawet Au9bafe129BAS 

WetaraAuet'nus7%98AS- 


.1000 (04% 
3000 100 

1000 100% 
1000 

1500 94% 

-500 103% 

- 150 104% 

-500 10) 

- 130 105% 
-275 102% 
.30) ton 

-400 102% 
.200 104% 
1500 91% 

.500 108% 
. 180 104% 

.200 104% 
1250 102% 
1100 100% 
.135 101% 
1125 104% 
.500 104% 
1000 107% 
1000 102% 
Z7SC 102 
. 190 100% 
.100 112% 
.350 83% 

1000 7% 

■ 126 33% 

.300 91 

.150 90% 

- 150 105% 
. 100 93% 


105% -% 
101 -% 
100% ♦% 


94% -% 

108 % 


105% 

103% 

108% 4% 


103% 

103% 

103 -% 


105 

91% 

108% 

108 -% 


104% 

102 % -% 


45S AtttwNttITkMMy-ftBB MOO 9939 99.48 40375 

4 ^ Banco ftoma 0 99 200 9908 10002 S582S 

334 Brigtern ft 97 CW 500 10012 10023 91250 

408 BPCE-<UO» 330 99JB 6007 4.7300 

S.I 1 Bfemtaaiosec 150 9903 10003 8 MOO 

4*2 2™*-%* am 9924 8931 46250 

400 CCCEOOBfeu 200 9804 9918 50229 

347 Qetalyonrefa ftOO 300 9701 9802 50125 

309 Dinrrarit-%98_- MOO 9985 9965 60825 

454 Dvredier France £96 DM iooo 9833 t mrw 54938 

ASX Fttro del feri 91097 4J0 9996 10014 91000 

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FINANCIAL TIMES THURSDAY OCTOBER 27 I 994 


25 


COMPANY NEWS: UK 


BFI warns Attwoods investors 


By Peggy Hoflfager 

Browning-Ferris Industries, the US waste 
group stalking Attwoods, yesterday sought 
to steal a march cm the UK company by 
urging investors to be wary erf promises 
made in fighting off the £364m cash bid. 

The letter was sent to shareholders in 
advance of Attwoods’ second tteftww* docu- 
ment, which is expected this week. 

Attwoods is thought to be planning to 
publish projections on sales and profits 
which would show expectations of a sub- 
stantially improved pe rfor m ance in 1935. 
T he d efence is expected to reinforce 
Attwoods* argument that tha offer is too 
low. 

BFI said its own document “reiterates 
that the group has not lived up to its 
promises.” 

Sinc e 1992 operating marg ins and earn- 
ings per share had fallen, while debt as a 


proportion of shareholders' funds had 
risen. 

BFI quoted a series of statements made 
by Attwoods since 1992 to support its 
claim that the group had consistently 
failed to deliver on promises of improve- 
ments. “Don’t take any more chances,” 
BFI said. “Don’t gamble your investment 
and risk further disappointment. We urge 
you to accept the BFI offers." 

The statements chosen by BFI were 
excerpts horn annual reports and newspa- 
per articles. Attwoods responded last night 
by saying that the quotes had dearly been 
taken out of context. “This is complete 
nonsense,” the company said. “No one 
ever disputed those three years would be 

difficult" 

Attwoods published its own excerpts 
from annual reports dating back to IQQg, 
indicating substantial uncertainty over 
trading conditions up to 1994. 


However, Attwoods said it was grateful 
to BFI for reminding shareholders of 
recent confident remarks for 1995. It would 
shortly outline the specific factors which 
lmrierlrnarl that confidence 

BFI is offering shareholders lQ9p cash 
for Attwoods ordinary shares and 85p per 
preference share. 

At current exchange rates, BFI said this 
represented $9.20 per American Depositary 
Receipt, equivalent to five ordinary 
shares. 

BFI stressed that, if successful, it would 
pay the declared final net dividend of 

3.25p. 

It is today expected to publish Us full- 
year results showing profits for the first 
time in its recycling business. 

Meanwhile, Fidelity Investments yester- 
day disclosed that it bad sold virtually all 
of its preference shares to Salomon 
Brothers, the US investment bank. 


After-care service of a quick sell 

Alison Smith on the industry’s response to the mis-selling of pensions 


A s estimates of the total 
bill facing the life 
insurance industry to 
compensate victims of poor 
advice to take personal pen- 
sions soar to £2hQ, fife compa- 
nies are having to review their 
sums as well as their individ- 
ual cases. 

Almost all fife insurers have 
made some provision for possi- 
ble pension compensation in 
their accounts for 1993, on the 
basis of how bad the extent of 
mis-selling looked last year. 

In its role as prudential 
supervisor, the Deportment of 
Trade and Industry wrote to 
life companies in January to 
check what provisions they 
had made. Now it Is repeating 
the exercise, as the potential 
liability has grown shar ply. 

The original cause for con- 
cern last December was a pilot 
study by KPMG Peat Marwick, 
the accountancy firm, suggest- 
ing that in nine out of 10 cases 
sales of personal pensions to 
people transferring a lump 
sum from an occupational 
scheme did not meet regula- 
tors’ standards. 

Life companies emphasised 
that in many cases the advice 
would have been good though 
the record-keeping was poor, 
and played down the cost of 
compensating cases where a 
pension had been mis-sokL 
Now there aeem to be two 
areas of business which were 
not previously thought to be a 
si gnificant problem. 


Olives at 
£224,000 

Olives Property, the property 
investment and development 
company, reported pre-tax 
profits of £224,404 on turnover 
of £753,558 for the six months 
to June 30. 

The outcome compared with 
a pre-tax profit of £720,392 on 
turnover of £154m last time, 
although that was bolstered by 
exceptional income of £812£52 
relating to settlement of a legal 
dispute. 


Lite insurers thought the 
number of cases where some- 
one took a personal pension 
and left an employer's scheme 
to do so was relatively small, 
since there would dearly he a 
disadvantage to the investor in 
giving qp the employer’s con- 
tribution. They did not know 
how many had bought a pri- 
vate plan instead of joining an 
employer’s scheme 

A survey by actuaries Bacon 
& Woodrow for the Securities 
and Investments Board, the 
City's chief regulator, suggests 
about 300,000 people were 
advised to opt out of an occu- 
pational scheme and about 
500,000 were advised not to 
join. 

Advice to take either course 
is more likely to have been 
poor than advice to take a pen- 
sion transfer, and the cost of 
redress is likely to be higher. 
identify in g v ictims of mis-seH- 

in g hana will iterif ha an arpen- 

sive task for fife companies. 

There was little quarrelling 
from life companies yesterday 
about foe pros p ect that they 
would have to m«fa> more pro- 
visions in the tight of the new 
information. Only Prudential, 
the UK's largest life insurer, 
maintained that it did not need 
to make specific provision. 

Insurers emphasised, how- 
ever, that tha amo unts of com- 
peusation likely to be payable 
by most companies were 
“small change” in relation to 
their assets, »nd might have 


even less effect on policy- 
holders and shareho lders than 
poor investment performance 
or volatility in the markets. 

Legal & General, one of the 
UK’s largest life insurers, was 
the first to acknowledge it 
would have to raise provisions 
to take account erf administra- 
tive costs and the prospect of 
contributing - through the 
Investors’ Compensation 
Scheme - to redress for the 

clients nf indapandant financial 

advisers which had gone out of 
business. 

Bradford & Bingley ’Rnflding- 
Society, the largest organisa- 
tion to act as an independent 
adviser, «nd that having pro- 
vided £5m already, it would be 
setting aside a further £5m. 

Others, however, took a dif- 
ferent view. Pearl Assurance, 
for example, said it expected 
provisions to be “a bit higher, 
but nothing like twice as 
much”. 

S imilarly at BAT, which 
owns Allied Dunbar and 
Eagle Star, the expecta- 
tion was that provisions would 
have to Increase only slightly. 
Its earlier estimate for provi- 
sions across the two companies 
had been about £10m. 

It acknowledged, however, 
that it was in a somewhat 
unusual position because 
Allied Dunbar Had pro fe ss i onal 
indemnity insurance at 
Lloyd's, and the insurers had 
already been notified of a 


NEWS DIGEST 


Earnings per share came out 
at 0.46p (L2p). 

Rental income was running 
at £L88m a year, said My Tony 
Grant, chairman and joint 
chief executive, and toe com- 
pany was now achieving suffi- 
cient revenue to cover ongoing 
overheads. 

Net assets increased from 
£5 .51m to £15£m, principally 
because of the rights issue 
associated with the acquisition 
of Huby Estates, which raised 
a net £9.79m. 

A capital reorganisation has 
been approved by the High 
Court and the cancellation of 


DIVIDENDS ANNOUNCED 



CuTant 

payment 

Date of 
payment 

Cones - 
ponding 
dividend 

Total 

for 

year 

Total 

lest 

year 

BM fin 

na 

- 

rd 

nfl 

05 

Bourne End Props — kit 

o^t 

Jan 4 

0.75 

- 

1 

Bridport-Gundry fin 

1.75 

Jan 31 

1 

3 

ZJ5 

CentreGotd — fin 

1.8 

Dec 6 



m 

Essex Futjtitune§. fin 

2.5 

Dec 6 

2 


3.5 


0.5 

Dec 19 

nl 

“ 



0.4 

Dec 16 

04 

- 

1.15 

Murray Spfft fin 

2^5 

Dec 15 

2.65 

106 

10.6 

Sec Tst of Scot int 

1.08 

Dec 16 

1.08 

- 

3.25 

Trace Computers —Jin 

CL95 

Dec 28 

09 

1.5 

1.45 

Venturi hw Tot ..Int 

1.66 

Dec 2 

156 

- 



Dividends shown 
Increased capital 


stock. 


the capital redemption reserve 
and part of top shar p premium 
account had been effected. The 
board intends to recommend 
payment of a final dividend in 
respect of 1994. 

Courtyard Leisure 

Courtyard Leisure, the 
USM-quoted wine bar and res- 
taurant operator, is attempting 
to trace the ultimate benefi- 
ciary of an &S oer wmt stake 
taken by Gflland of Belgium. 

Mr All Safa, Courtyard’s 
chairman and largest share- 
holder with a 15 per cent stake, 
said: “We believe it is a 
friendly investment but we 
need to check.” 

Mr Safa said a number of 
overseas institutions had 
approached the company over 
the past month with the view 
to making an investment 

Archer 

Archer Group Holdings, the 
Lloyd’s agency, announced yes- 
terday that it may launch a 
“dedicated” investment trust 
to raise funds for the 1995 
underwriting year. 




& • 



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FT 


potential claim. 

The greatest concern wmubH 
to be the unknown ’ factors 
which could ultimately affect 
the amomita they would have 
to pay through the ICS. 

Mr Chris Brocks om, chief 
executive of AKA Equity & 
Law, said that in making provi- 
sions last year it fa»fc«n lit- 
tle account of what it might 
have to pay for compensating 
<rf independent advisers 
no longer to business. 

Both he and Mr Phlhp Scott, 
life and p«»nginm« general man- 
ager at Norwich Union, high- 
lighted how little information 
there was here, first, no one 

fcm na lwi w -many inHppwidpnf 

advisers will go out Of business 
anH so require the ffis to 
into play. Second, it has not 
yet been derided how that ICS 
bin should be divided between 
fife companies. 

For toe year to March 31, it 
will be allocated an the current 
hasi« for sharing out the cost 
of compensation across the 
retail financial services sector. 
But most claims will come 
later and no arrangement has 
been made for how the bill 
ahncld be divided then. Compa- 
nies which do most business 
through independent advisers 
mig ht have to pay more. 

With so much unresolved, 
the DTI letters may reach fife 
companies thin week but they 
are unlikely to get definite 
answers for many months to 
come. 


If successful. Archer would 
join a handful of other groups 
planning such v ehicle s, invest- 
ing in only a narrow range of 
syndicates at the London 
insurance market, for next 


Butte revises loss 

Butte Mining 's audited results 
for the year to June 30 showed 
pre-tax losses erf £351,000, giv- 
ing losses per share of 0.15p. 
The preliminary announce- 
ment gave pre-tax losses of 
£436.000. 

The improvement comes as a 
result of the company writing 
back certain provisions no lon- 
ger necessary. 

Prowtmg 

Prowting, the housebuilder, 
announced yesterday the con- 
version of 49.9m A ordinary 
shares of 20p each into ordi- 
nary shares of the same value. 

The conversion was to accor- 
dance with its articles of asso- 
ciation, the company said, and 
application would he made for 
the new shares to be admitted 
to tiie Official List 


New owner 
seeks to 
revitalise 
Sock Shop 

By Peggy HolEnger 

Sock Shop, the 1980s retailing 
phenomenon which collapsed 
four years ago, could come 
baric to the market following 
tts sale yesterday to Sheffield 
entrepreneur Mr Stephen 

ffinchHffe. 

Mr HrachltfTe has spent the 
two years since his abrupt 
departure from quoted compa- 
nies James Wilkes and Lynx 
Hol ding s building up a group 
of retail businesses. 

In August his latest com- 
pany, Salisbury Stores, 
acquired the lossmaking Salis- 
bury luggage chain from Sig- 
net, the jewellery group for- 
merly known as Rainers, for 
sutai 

Salisbury Stores is buying 
Sock Shop from Murray John- 
stone, the Scottish financial 
group, in return for a convert- 
ible equity stake believed to be 
about 10 per cent The pur- 
chase will create a private 
retailing group with sales of 
more than £100m. 

Mr HtochHffe said Salisbury 
aimed to come to the market 
in about two or three years 
when “market conditions are 
right and when our perfor- 
mance is good enough to give 
some credjMttty”. 

Sock Shop is believed to be 
breaking even on sales of 
about £30m. It collapsed three 
years after flotation following 
an ill-fated ex pansi on into the 
US. It was bought by a man- 
agement tpom hqpkod by Mur- 
ray Johnstone, which eventu- 
ally controlled the group. 

Mr David Mm»i4»n«n of Mur- 
ray Johnstone will join the 
Salisbury Stores board. 

Mr Htochlifre said be expec- 
ted to broaden the products on 
offer at Sock Shop, introduc- 
ing accessories and gifts. The 
enlarged business would enjoy 
“significant merger benefits, 
including cross-fertilising mer- 
chandise”, he said. 

hi September Mr Hmchfiffe 
separately acquired the Colibri 
cigarette fighters business. 


Barrs name 
their choice 
for chairman 

By Richard Wolffe 

Nicholas and Robert Barr, the 
brothers who lead the rebel 
shareholders at Barr & Wal- 
lace Arnold Trust, yesterday 
named a chairman designate 
to replace their uncle on the 
board of the leisure and motor 
distribution group. 

The brothers, who claim 
majority support among ordi- 
nary - voting - shareholders, 
announced that Sir David 
Rowe-Ham would be their can- 
didate as chairman to place of 
Mr Malcolm Barr. 

Sir David, a former Lord 
Mayor of London, is a nonex- 
ecutive director of Williams 
Holdings and Apta Healthcare. 

The brothers, who have 
called an EGM to unseat the 
group's present chief executive 
and finance director, also 
appointed NM Rothschild as 
their financial advisers. 

They plan to run the compa- 
ny’s two core divisions as 
stand-alone businesses, and 
enfranchise the non-voting A 
shares, owned almost entirely 
by institutions. 

The board has called 
another EGM to discuss its 
own plans for enfranchising 
the A shares. A document is 
expected hnmipmBr . 


PUBLIC WORKS LOAN BOARD RATES 


Quota loans* 


1 

m 

Mt 

614 

«a*t 

«tt 

654 

Over 1 up to 2 — 

7 

TV, 

8 

714 

714 

814 

Over 2 up to 3 — 

7 54 

734 

816 

734 

754 

814 

Over 3 up to 4 — 

8% 

8% 

8*4 

814 

854 

854 

Over 4 19 to 5 — 

834 

814 

8% 

814 

854 

9 

Over 5 up to B — 

8% 

844 

9 

814 

854 

914 

Over B up to 7 — 

854 

834 

914 

854 

854 

916 

Over 7 up to 8 — 

854 

8% 

914 

9 

9 

954 

Over 8 up to 9 — 

8% 

9 

9V4 

9 

814 

954 

Over 9 up to 10 _ 

9 

9 

914 

914 

914 

954 

Over 10 up to 15 , 

914 

914 

914 

954 

954 

914 

Over 15 up to 25 . 

9V4 

914 

814 

916 

916 

914 

nwrK 

9 

854 

854 

954 

914 

914 

■Waxgcai loea * — 

1 am eat UUicr and racquets bn B 2 par cm hUar h eeca 

gas tn 

at* am Jora. tSoaO k 

utwwne or p*dp»i. 

TT Rwm** by 

1— yae» maty (tad wept 

Mf-yaoty pesneia id incW* ptnc** “ n*""* 1 w*" « 

HI My. 


r BRITANNIA * 
BUILDING SOCIETY 


£150,000,000 
Floating Rate Notes 
Due 1996 

In accordance with the term* and 
conditions of the Notes, notice is 
hereby {teen chat for the three 
month interest period bom (and 
In cludi ng ) 2&h October 1994 to 
(but exSwfitig) 26th January 
1993 the Notes will carry a rate of 
interest of 6.1 per can. per 
amum. The raevam interest 
p a yment date will be 26th Jan- 
uary 1995. The coupon amount 
per £10X00 Note wffl he £153.73 
~ule against surrender of 
i No: 33. 

Hambros Bank Limited 

Agent Bank , 


r WOOLWICH 
BUILDING SOCIETY 


£150,000,000 
Floating Rate Notes 
Due 1995 

Id Dccofd an oe with the terms and 
coaditxxa of the Notes, notice is 
hereby given that for the three 
month inures period boo (and 
mctaflng) 2bth October W4 to (box 
exdudmg) 26th January 1995 the 
Notes will cany a rare of mures 
of 6.1 per ccnl. per annum. The 
relevant interest payment date will 
be 26th January 1995. The co u po n 
shook per £5.000 trill be £7&8S 
and per £100.000 will be D .537.53 
payable against surrender at 
Coupon No: 19. 

Hunbros Bank Limited 

Agent Bank , 


BM cuts deficit to £71. 5m 
and proposes name change 


By Richard Wolffe 

BM Group, the engineering 
company, yesterday reported a 
75 per cent reduction to bank 
borrowings *«ri a "»»»> change 
alongside its results for the 
year to the end of June. 

The group, which almost col- 
lapsed last year, sold 17 busi- 
nesses and 14 properties to 
reduce its borrowings from 
£l60m to £4Qm at September 30. 

Announcing new banking 
arrangements, the group also 
broke with its past by propos- 
ing to rfmng o its nflmp to Bru- 
nei Holdings. 

“Effectively, we are at the 
end of a massive and costly 
restructuring of the group,” 
said Mr Cliff Walker, chief 
executive. “The armnimpumm f 
of new banking facilities, the 
bulk of which are on a three- 
year term, enables us from 
now on to focus all our man- 
agement concentration on the 
development of our ongoing 
businesses.” 

Pre-tax losses were reduced 
from £11 7m to t n sm. The defi- 
cit was struck after £67.5m of 
exceptionals, w hich included a 
£5L6m goodwill write-off and 
£ 12.7m pension prepayment 
write-off, both relating to the 
dicpngni programme. 

At the operating level the 
company reported profits of 
£6.73m for the year against 
losses of £1.23m on sales of 
£408m, down from £S47^m. But 
interest costs still amounted to 
£lL6m (£14. lm). 

The company also 
announced recommended 
offers to acquire all prefer- 
ence shares of Blackwood 
Ho dge, the construction equip- 
ment distributor, for 6.57m 



Tony Andrews 

Moger WooDeyr promises return to dividends as soon as possible 


new BM ordinary shares, with 
a market value of £2JJ5m at 
last night’s close. 

BM, which already owns the 
entire ordinary share capital of 
Blackwood Hodge, intends to 
liquidate the company. 

The £60m acquisition of 
Blackwood Hodge in 1990 
was largely blamed for the 
difficulties which led BM 
to breach its covenants on 
interest cover and net assets 
last year. The company is 
still considering litigation 
against Hambros. the mer- 
chant bank which advised on 
the purchase. 

Blackwood Hodge reported 
reduced pre-tax losses of 
£8. 12m (£442m) for the year to 
June 30. Turnover fell from 
£267.7m to £235.6m after dispos- 
als including its lossmaking 
Canadian operations. BM has 


sold virtually all of the Black- 
wood Hodge businesses. 

BM is concentrating on its 
process engineering busi- 
nesses, including skid steer 
loaders, fasteners and wood- 
working machinery. More than 
50 per cent of its sales are to 
customers outside the UK. 

Mr Moger Woolley, chair- 
man, said BM would return to 
normal preference dividend 
payments this year, including 
arrears for the year to June 30. 
He also announced its inten- 
tion to return “as soon as pos- 
sible” to the payment of ordi- 
nary dividends, which were 
last paid at the interim stage 
to 1992-93. 

Losses per share declined 
from 109.1p to 63.4p. The 
shares rose %p to 45p yester- 
day. 

See Observer 


Churchill China raises just 
£7.5m in placing at 280p 


By David Blackwell 

Churchill China yesterday 
became the thir d Staffordshire- 
based china company to float 
fhi« year — but the state of the 
new issues market sharply 
curbed its ambitions of just 
three weeks ago. 

At the time of the pathfinder 
prospectus on October 5 the 
mmpany was arming to raise 
cism through a placing. Yes- 
terday Hoare Govett placed a 
total of 2£8m ordinary shares, 
fully underwritten, raising just 
£7.5iil 

Mr Peter Siddall, chairman, 
described the new issues mar- 
ket as “not very receptive. We 
took the view that we had got 
this far. and we wanted to go 
ahead." 


The shares were priced at 
280p to give Churchill a capi- 
talisation of £29.7m. Earnings 
are forecast at 25.4p, giving a 
prospective multiple of 11. 

Mr Siddall said that when 
the flotation process was 
started, the company had been 
looking at a “significantly 
higher” multiple. 

Of the shares issued, only 
1.25m are new, with the 
remainder being sold by the 
Roper family that controls the 
company. There are three 
Roper brothers on the board, 
and together with their fami- 
lies and family trusts, they 
continue to hold the bulk of 
the 10.62m shares to issue fol- 
lowing the placing. 

The family, which was 
planning to sell £10m worth of 


shares, has sold just £4m. 

New money for the company, 
net of expenses, is £2 -9m. This 
compares with the £5m origi- 
nally expected to help pay for 
on invest men t programme to 
improve capacity and quality. 

Mr Siddall said yesterday 
that the company would press 
ahead with the programme, 
although the reduction In 
money raised might lead to 
some rescheduling. 

Churchill is forecasting pre- 
tax profits, before bonuses to 
directors, of not less than 
£3.6m for 1991 This compaies 
with last year’s £2Jm, struck 
on turnover of £36m. 

The notional dividend is 
9.86p, giving a notional yield of 
4.4 percent 

Dealings begin next Tuesday. 


Kwik-Fit to acquire Superdrive 


By Andrew Bolger 

Kwik-Fit Holdings, the 
Edinburgh- based tyres, 

p-ghnnotc awri brakes fitter, baa 
agreed to buy the Superdrive 
chain erf 125 tyre and exhaust 
centres from Shell UK 
The deal, worth £2L5m, will 
increase Kwik-FIfs number of 
outlets to almost 800 and boost 
its presence in the south of 
England, where it has been 


under-represe n ted. 

The Superdrive chain, 
launched to 1982, made operat- 
ing losses of £3.4m on sales of 
£4L7m last year. Shell said it 
had decided to sell in order to 
focus on its core oil businesses. 

Mr Tom Farmer, chairman 


and chief executive of Kwik- 
Fit, estimated that it would 
take six to nine months to 
overhaul the Superdrive out- 
lets, although they would bene- 
fit immediately from a less 
onerous cost structure. 

He said: “The combination of 
Superdrive and Kwik-Fit gives 
us a tremendous opportunity 
to create an even stronger 
group, attract more customers 
and increase income.” 

Kwik-Fit has paid £9 5m in 
cash from its own resources for 
the chain and will assume 
£12m of debt on completion. 

The Superdrive fast-fit out- 
lets are located to the Mid- 
lands, London and the south of 
England, supplying and fitting 


motor vehicle parts including 
exhausts, tyres, brakes, vehicle 
servicing and MOT testing. 

A particular attraction of 
Superdrive was that it offered 
sites in southern towns such as 
Tunbridge Wells and Windsor, 
where there were significant 
planning obstacles to entry. 

Mr Farmer said that consoli- 
dating the two chatos would 
probably lead to the closure of 
about 25 outlets, although to 
some cases of overlap the new 
Superdrive outlet would be 
preferred to the existing Kwik- 
Fit site. He was keeping an 
open mind about the future of 
Superdrive’s MOT testing 
operations, which Kwik-Fit 
does not currently offer. 


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THURSDAY OCTOBER 27 1994 $ 



COMPANY NEWS: UK 


New issues defy ailing image 

Christopher Price on the more robust view from an FT survey 


J ust how sick is the new 
issues market? The recent 
spate of profit warnings, 
share price slumps and execu- 
tive departures would seem to 
indicate something terminal. 

However, a survey by the 
Financial Times reveals a far 
more robust picture. In fact, 
more thaw half of the indus- 
trial and commercial compa- 
nies which have come to 
the market this year have 
outperformed the FT-SE-A All- 

Share Index, while many 
of the underperformers have 
achieved parity or scored bet- 
ter than their sector indices. 

The survey covered SS issues 
made since the start of Janu- 
ary to the end of September - 
excluding investment trusts. 
Investment companies, demer- 
gers and non-UK businesses. It 
shows the All-Share was out- 
performed by 0.8 per cent. 

Thus for every high profile 
share price slide - such as 
Aerostructures Hamble, down 
74 per cent since issue; MDIS, 
down 60 per cent; Coda Group 
off 65 per cent; and DRS Data 
down 68 per cent - there have 
been several over-achievers. 

Shares in Waste Recycling 
Group, for example, have out- 
performed the market by 47 
per cent. Domnick Hunter 
Group by 41 per cent and 
Inspec Group by 40 per cent. 

The performance of various 
newly quoted companies 
against their sector indices is 
also revealing' with 58 per cent 
outperforming the field. 

For example, construction 
group Amey Holdings only out- 
performed the All-Share by 4 
per cent yet achieved a near 19 
per cent score against the 
FT-SE-A building and construc- 
tion sector. 

Likewise, Keller turned a 
deficit of 12.4 per cent into a 
gain against the same index of 
nearly 7 per cent 
There is also a divide 
between the first four months 
of the year and the latter 
period. Flotations since May 
have outperformed the All- 
Share by more than 5 per cent 
(up to Monday’s closing price). 


FT-SE-A Alt-Sbare 

index //& 



I960 87 

Source: OatcHtream. KPMG 


1994 NEW ISSUES: FT-SE BUILDING AND 
CONSTRUCTION SECTOR 


Performance! 
relative to: 


Company 

Issue 

Date 

Market 

Value 

(Em) 

Issue 

Price 

(P) 

Premium 

25/10/94 

Sector A0- 
Share 

Beazer Homes 

25/3/94 

463.39 

165 

-18.16 

5.69 -14.07 

Wainhomes 

30/3/94 

105.81 

170 

-25.29 

-6.44 -21.61 

Keller Group 

5/5/94 

72.80 

130 

-15.38 

6.65 -12.42 

Redraw Group 

17/5/94 

298.40 

135 

-1852 

-2.95 -15.11 

Amey Holdings 

10/6/94 

181.00 

181 

3.11 

18.78 4.39 


nwarrfc HcMnf BmwL Sourest D amn — m . 


But those joining the market 
in the previous four months - 
the index peaked at the end of 
January - have underper- 
formed by nearly 6 per cent. 

This partly reflects the vola- 
tile market conditions, which 
have led to a general decline 
since the start of the year. 

“A big proportion of compa- 
nies were coming to the mar- 
ket and being priced at a time 
when op timism was high and 
the index was at a record," 
says Mr Sandy Muirhead, man- 
aging director at Charterhouse 
Taney, the merchant hank. 

Lower interest rates and 
investment trust sales in the 
last quarter of 1993 coincided 
with increased institutional 
demand for equity, in particu- 
lar that of smaller companies. 
There had also been a high 
number of management buy- 
outs in the previous two to 
three years, and venture capi- 
talists were keen to exit. 

“A huge arbitrage gap 


opened up at the time between 
floating and trade sales” said 
one corporate financier, “and 
there were many eager takers". 

This meant that the supply 
of companies was swollen by 
those which under different 
circumstances might not have 
floated - for instance high- 
technology companies with a 
limited track record and high 
cash needs because of 
research. 

B ut institutional demand 
was soon exhausted by 
the flood of issues, par- 
ticularly against a backdrop of 
the falling equity market. 
About one fifth of this year’s 
floats have an electronic/high- 
tech background, sectors 
which have been hardest hit by 
the downturn in the equity 
market 

“The lack of demand for 
stock from the institutions has 
had an exaggerated effect on 
the shares for a number of new 


1994 INTERIM REPORTS 

The following STET group companies announce that Interim Reports for the 
first half of 1994 are available upon request at their respective registered of- 
fices and at the offices of the Consiglio dl Borsa (Stock Market Board). 




STET - Society Flnanzlarta Telefonica p.a. 

Registered capital Lit 5,281 ,212,121 ,000 fully paid 
Entered in the Tribunate di Torino (Turin Court) Register of Companies under no. 288/33 
Registered office In Turin - Via Bertoia, 28 (Tel: 011/55951) 

Head office in Rome - Corse tfltafla, 41 (Tel.: 06/85891) 


TELECOM 


UTALiASpA 

Registered capital Lit 7,165,448,535,000 fully paid 
Entered In the Tribunate dl Torino (Turin Court) Register of Companies under no. 131/17 
Registered office In Turin - Via San Dalmazzo, 15 (Tel.: 011/55141) 

Head office in Rome - Via Flamhnla, 189 (Tel.: 06/36881) 


JL 


SIRT1 Soctati per Aziont 
Registered capital Lit 220,000,000,000 fuDy paid 
Entered In the Tribunale dl Milano (Milan Court) Register of Companies under no. 17238 
Registered office In Milan - Via G.B. Pirefll. 20 (Tel.: 02/66771) 


★ **. 




24-monlh historical....^ ,~,....<-§J2f 

Momentum. GZf 

Relative Strength Index. .Jgf 

Price/Index Ratio . g2f 

Optimized moving average- — . — -Qf 
long and short moving averages,....^ 

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weekly tW charts. ^ 


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Issues," says Lord McGowan, 
head of corporate finance at 
Panmure Gordon. 

He adds that the situation 
has been made worse by the 
lack of liquidity associated 
with some new issues, which 
often involve placing a rela- 
tively small proportion of the 
shares. 

Mr David Manning, director 
of UK equities at Legal & Gen- 
eral, says the problem with 
this year's new issues has been 
one of numbers, rather than 
any other sort of failing. 

"The more new Issues there 
are, the more the likelihood of 
some unsuitable candidates 
Doming to the market Success- 
fully-run MBOs do not alway 
make successful PLCs - partic- 
ularly where a single product 
or single major customer is 
involved." 

Mr Andrew Parry, head of 
UK equities at Barings, the UK 
fund management group, is 
more critical. "There were just 
too many issues and I think 
the quality control on the cor- 
porate finance side slipped. 
There were quite a lot of com- 
panies that should not have 
come to the market" 

But the corporate finan ce 
industry has been quick to 
reject recent criticism. "Any 
merchant h»mir knows that its 
reputation, is at stake in bring- 
ing a company to the market," 
says Mr Muirhead. 

“If the float goes badly, 
everyone suffers, not just the 
investor," said one financier. “1 
don't believe for a moment 
there has been a lowering of 
standards. The whole situation 
has been exaggerated because 
of the Hamble shambles." 

Another corporate financier 
concluded: “Some investors are 
feeling a bit sore and are show- 
ing an unwillingness to partici- 
pate in new issues. But there 
are as many who are satisfied. 
These things go in cycles. A 
big privatisation will probably 
settle things down.” In other 
words, a comfortable profit 
would soon sweeten sharehold- 
ers' memories. 

See Lex 


CentreGold 
at £4m and 
makes £5m 
acquisition 

By James Whittington 

CentreGold, the electronic 
games publisher and distribu- 
tor, yesterday announced a 48 
per cent increase in annual 
pre-tax profits and the acquisi- 
tion of Core Design, an enter- 
tainment software publisher, 

for £5-34m- 

The company, which was 
floated in October 1993, 
reported pre-tax profits of 
£4. 03m (£2. 72m) for the year to 
July 31. New product launch- 
es, higher US sales and the 
growing popularity of per- 
sonal computer software in 
CD-Rom format helped the 
group to offset margin pres- 
sures. 

Turnover advanced by 34 
per cent to £9 1.3m (£68m). On 
the publishing side, sales were 
up 62 per cent to £50.4m 
reflecting an increase in com- 
pact disc-based products and 
the launch of the group's first 
Nintendo video games. 

Publishing sales in the US 
more than doubled, from 
£7.6m to £18.8m. Overseas 
sales accounted for 41 per cent 
(24 per cent) of divisional turn- 
over. Turnover in software dis- 
tribution moved ahead by 11 
per cent to £40.9m. 

Earnings per share 
increased, to 7.3p (5-63p exclu- 
ding new shares issued on flo- 
tation). A final dividend of 
l.6p makes a total of 2.4p. 

Mr Geoff Brown, chief exec- 
utive, said the acquisition of 
Core would help consolidate 
the group's position in soft- 
ware development It reported 
sales of £4. 74m last year. 

Some £2 .94m of the purchase 
price will be paid in cash, with 
the balance in 2.74m shares 
issued to Mr Jeremy Smith. 
Core's managing director. 

CentreGold shares, which 
were floated at 125p. gained 
16p yesterday to dose at lOSp. 
Mr Brown said that “most 
investors still don't under- 
stand what we do". 


Apollo launches rights to 
fund Aviation Metals deal 


By Paul CheeserigM, 

Midlands Correspondent 

Apollo Metals, the aluminium 
distributor and processor, is 
expanding into specialised 
steels with the £3 .55m cash 
purchase of Aviation Metals. 

The acquisition is being 
financed by a rights issue - 
Apollo's second in two years - 
underwritten by Granville 
Davies to raise a net £7.79. 

Aviation Metals is a private 
company specialising in sales 
of stainless steel to the aero- 
space and defence industries. 
Despite depression in these 
markets, it has raised turnover 
marginally over the last three 


New outlets 
lift Essex 
Furniture 

Essex Furniture, the 
USM-quoted retailer and manu- 
facturer, increased annual pre- 
tax profits by 29 per cent from 
£1.09m to £1.4lm on sales 
ahead 65 per cent to £17.7m. 

The company attributed the 
progress in the year to June 30 
to the success of its new show- 
rooms, combined with a signifi- 
cant comparable sales improve- 
ment from existing outlets. 
The hack order position at the 
year end was more than £4m. 

A final dividend of 2.5p 
makes a 4_3p (3.5 p) total Earn- 
ings were 8.05p (6JMp). 

Time sells Stylecraft 

Time Products, the luxury 
watch and jewellery distribu- 
tor, is selling Stylecraft, its 
watch strap manufacturing 
business in Montreal, Canada. 

However, the £600,000 sale 
will have a “negligible effect" 
on the profitability of a group 
that has in the pipeline a 
watch with a £500,000 price tag. 
Described as the “most compli- 
cated pocket watch ever 
made”, it has 11 hands and 
movements on both sides. 

Molyneox listing 

Molyneux Estates, the property 
investment concern currently 
traded on the USM, has applied 
for a full listing. 

Dealings are expected to 
begin on today 

Murray Split 

Murray Split Capital Trust 
reported a net asset value of 
136. 7p. per capital share as at 
August 31, an advance of 22.7 
per cent over the year. 

Total assets improved by 6.1 
per cent to £25.6m, outperform- 
ing a 5.8 per cent gain by the 
FT-SE-A All-Share Index. The 


years. Sales during the year to 
July were £8J51m, giving pre- 
tax profits of £1.4m. 

The rights issue of up to 11m 
shares is on a 3-for-S basis at 
77p; preference shareholders 
are offered 24 ordinary shares 
for every 29 preference. 

Apollo shares dipped Ip to 
95p yesterday. 

Apollo estimated pre-tax 
profits for the year to Septem- 
ber would not be less than 
£270,000, against £L.Q2m. 

The group lapsed into a pre- 
tax loss of £219,000 during the 
first half but said yesterday it 
was experiencing improvement 
in its trading environment. It 
intends to pay a 2.4p final 


total return on net assets was 
10.7 per cent, against 10J. per 
cent for the All-Share. 

Earnings per income share 
emerged at 11.3p (10-29p). The 
proposed final dividend Is 
maintained at 2.65p, holding 
the total at lO.Gp. 

Bourne End Props 

Bourne • End Properties 
achieved a return to profit in 
the first half of 1994, with 
£231,000 before tax. The figure 
would have been higher but for 
professional costs of £300,000 
connected to its planned joint 
venture to acquire a large 
property portfolio. 

The previous first half car- 
ried a £145.000 loss, but a small 
profit in the second half 
resulted in a reduced pre-tax 
deficit of £55,000 for 1993. 

Rental income in the six 
months advanced to £7.44m 
(£2. 19m). 

The company said that a 
£103m portfolio acquired last 
December had been fully con- 
solidated and a further £30m of 
property had been purchased. 

Earnings per share were 
0.42p (l-25p losses). The interim 
dividend is reduced to 0.5p 
(0.75p) to reduce disparity. 

Secs Tst Scotland 

Net asset value per share at 
Securities Trust of Scotland 
slipped to 85.Gp in the six 
months to September 30, com- 
pared with 89.2p last time, and 
90-lp at March 31 1994. 

The trust, managed by Mar- 
tin Currie, had net revenue of 
£5.07m (£5. 48m). The tax 
charge of £L66m included pro- 
vision for a £293,500 advance 
corporation tax write-off for 
the interim period. 

Earnings per share came out 
at L57p, compared with l.7p, 
with the interim dividend 
unchanged at l.08p. 

Gieves 

Gieves Group, the Savile Row 
tailor which also has licensing 
and publishing operations. 


coming 


By Christopher Price 

Calltma, which designs and 
manufacturers miniature hard 
disk drives, yesterday 
announced it would raise 
£10.3m in a placing on the 
Unlisted Securities Market 
which will value the Scottish 
company at £35hl 

Nearly 17m new shares are 
to be issued at 65p each, repre- 
senting 32 per cent of the 
enlarged share base. 

Following the placing, the 
management's stake will Ml 
from 39 to 28 per cent, with the 
remainder being taken up by a 
variety of old and new institu- 
tional investors. 

Mr Norman White, manag in g 
director, said that neither the 
management nor current 
investors in the three-year-old 
company would be taking any 
money out. “All the proceeds 


from the placing will be put 
back into the company in order 
to fund our planned expan- 
sion," he said. 

The company’s prospectus 
issued yesterday contained two 
pages of “risk factors” - high- 
lighting the unpredictable 
nature of the computer compo- 
nent market with regard to 
intellectual property rights, 
developing new products and 
competition. 

Calluna incurred a pre-tax 
loss of £1.69m for the 12 
months to March 31 1994, com- 
pared with a £1.37m deficit for 
the 18 months to March 1993. 
The company made its first 
sales last year amounting to 
£301.000. Mr White said that he 
expected the company to make 
an operating profit by the mid- 
dle of next year. 

The company manufactures 
high capacity 1.8 inch remov- 


able disk drives which can be 
inserted into slots conforming 
to the PCMCLX industry stan- 
dard in the latest generation of 
personal computers. The drives 
enable users to increase then- 
storage capacity, move data 
and remove different sized 
amounts of data from PCs for 
security reasons. 

Calluna developed a revolu- 
tionary 1.8 inch hard disk 
drive, capable of storing more 
than 60 megabytes of data. It 
also makes 130MB and 170MB 
drives and will soon announce 
a 260MB product, all under the 
Calluna card name. 

It points out that a recent 
industry report forecasts the 
number of worldwide ship- 
ments of 1.3 inch hard disk 
drives will rise from 694,000 
this year to 20.6m in 1998. 

Dealings in the shares start 
on October 31. 


Seaperfect ready for market 


By Peggy HoUbiger 

Seaperfect, the world's largest 
controlled producer of shell- 
fish, Is coming to the market 
next month through a £27m 
placing and offer which will 
value the scallop and clam 
fanner at about £60m. 

The company, which was 
founded by an American com- 
puters entrepreneur, yesterday 
published a pathfinder prospec- 
tus setting out its reasons for 
coming to the UK market. 

In it, Seaperfect forecasts 
that losses this year will not 
exceed £lm. Last year the 
group incurred pre-tax losses 
of £2.69m. 


Mr Bill Lord-Butcher, the US- 
bom fthtef executive, said flota- 
tion would give Seaperfect the 
means to increase scallop and 
clam production 10-fold over 
the next few years to meet ris- 
ing demand. Currently the 
group processes some two 
tonnes of shellfish a day. 

It farms shellfish in Chile, 
Florida and South Carolina, 
producing seed in its hatch- 
eries and setting the young 
dams and scallops in protected 
coastal areas. The process 
takes 17 and 30 months from 
seed to harvest for scallops and 
clams respectively. 

Mr Lord-Butcher argues that 
controlled production will 


become increasingly important 
as wild shellfish stocks decline 
because of over-fishing, pollu- 
tion and poor reserve manage- 
ment Wild catch, mostly from 
Japan and China, still domi- 
nates the market for shellfish. 

The company warns in its 
prospectus, however, that the 
business does come with a cer- 
tain degree of risk, in spite of 
the controlled production pro- 
cesses. Where possible insur- 
ance had been taken out 
against factors such as disease 
and pollution. 

After the placing and offer 
directors will hold 21 per cent 
of the company and new inves- 
tors 44 per cent 


Rentokil $8m indoor plants buy 


By Andrew Boiger 

Rentokil, the environmental 
and property services group, 
has continued to expand its 
tropical plants business, which 
supplies and maintains decora- 
tive trees and indoor, plants In 
commercial settings', via an 
$8m (£5m) acquisition. 

Foliage Plant Systems oper- 
ates a tropical plant rental and 
service business in New Jersey 
and New York, with branches 
in Boston, Washington, Hart- 
ford and Philadelphia. 

It will be added to RentokiTs 
existing US tropical plants 
business, which is the market 
leader. Last year it poshed 
sales up 35 per cent to £40 Jm. 

Foliage Plant Systems had 
sales of $7.6m last year. The 
consideration is payable in 
cash, with Sl-5 million 
deferred, subject to the 
achievement of certain targets. 

Rentokil moved into the 
plants business in 1966 when it 
bought Plants at Work. More 
than 40 acquisitions later It 



Clive Thompson: pleased with 
progress of Securi guard 

claims market leadership in 
about a dozen countries. 

Mr Clive Thompson, chief 
executive, said he was very 
pleased with the progress of 
Securiguard, the UK security 
group bought for £76m last 
year. He intended to develop 


the security business in the 
UK, and perhaps In the US. 

Mr Thompson said the group 
was represented in all of the 
main developed countries. He 
had no intention of entering 
new countries. The only possi- 
ble exception was Mexico, 
which seemed a suitable area 
tor the core activities - tropi- 
cal plants, healthcare and pest 
controL 

Rentokil yesterday also 
announced five small bolt-on 
acquisitions, although the 
turnover and cash consider- 
ations Involved came to less 
than Elm for all five. 

Two of the acquisitions were 
pest control companies - Com- 
mercial Pest Elimination of 
Florida, and Servyrep in north- 
ern Spain. K&L Hygiene Ser- 
vices. in northern Germany, 
and Waterloo Services Com- 
pany, based in London, are 
both hygiene businesses. 
Allens Indoor Gardens of Bris- 
bane will be added to the 
group's tropical plants busi- 
ness in Australia. 


NEWS DIGEST 


yesterday reported pre-tax 
profits of £518,000 for the half 
year to July 31. 

The outcome, achieved on 
turnover of £9. 13m (£8.84m), 
compared with profits last time 
of £837.000. However, on a like- 
for-like basis, excluding the 
release of a £535,000 provision 
arising from the disposal of 
Redwood Press, the book and 
magazine manufacturing busi- 
ness, in 1992 the pre-tax line 
rose 72 per cent. 

Earnings per share dropped 
to l-5p (5.4p) but an interim 
dividend of 0.5p (nil) is 
declared. 

Bridport-Gundry 

Bridport-Gundry reported a 
more than fourfold increase in 
pre-tax profits for the year 
ended July 31, from £162,000 to 
£753,000. 

Sales at the technical textile 
manufacturer were flat at 

£27.1m (£27.4m), with the pro- 
portion of revenue from over- 
seas rising from 65.4 per cent 
to 68.4 per cent 

Operating profit from con- 
tinuing operations was 46 per 
cent ahead at £Ll9m (£813,000). 
Net interest and similar 
charges almost halved, from 
£603,000 to £318.000, as net bor- 
rowings were reduced to £18m 
(£3m). 

Earnings per share came out 
at 6.i6p (0.84 p). The recom- 
mended final dividend is L75p, 
bringing the total to 3p 
(2.5p). 

Midland & Scottish 

Midland & Scottish Resources 
achieved a further reduction in 
losses in the first half. After 
reporting a reduction to £48&n 
for 1993, the deficit for the six 
months to June 30 1994 was cut 
from £18.5m to £7J8m. 

Turnover fell from £35 .4m to 
£24.5m. Administrative 
expenses of £6.3m (£4.89m) 
included provisions related to 
an amount due from Mr 
Martyn Deaner, the former 
rhairman, which the company 
believes is unlikely to 


be recovered. 

Losses per share emerged at 
4p (9p). 

Abtrust Lloyd’s 

Abtrust Lloyd’s Insurance 
Trust had net assets per share 
of 8485p at the end of the six 
months to May 31. 

The trust, one of those set up 
to take advantage of the accep- 
tance of limited liability capi- 
tal, had a net asset value per 
share of 95-18p when it came to 
the market in November 1993. 

Net revenue was £296,316. 
Earnings per share were 0J9p. 

DY Davies 

DY Davies, the USM-quoted 
architect, moved nearer to the 
black in the year to April 30. 
Pre-tax losses of £56,000 com- 
pared with a deficit last timp of 
£793,000. 

Turnover of £5JS5m (£7. 63m) 
included £5.05m (£4J52m) from 
architecture and allied ser- 
vices. Operating profit rose to 
£278,000 (£128,000). 

Losses per share were cut to 
08p (H-5p). 

Venturi Iov Trust 

Venturi Investment Trust’s net 
assets stood at £9m at the end 
of the six months to September 
30, a fall of 2J5 per cent, com- 
pared with a 1.9 per cent 
decline in the FT-SE loo Index. 
The undiluted net asset value 
per ordinary geared share was 
12 per cent down at 27.47p. 

Earnings per income share 
were i.62p (I84p1. An interim 
dividend of l.66p il.56p). 

Trace Computers 

Trace Computers, the software 
specialist which has been 
restructuring its activities, 
doubled pre-tax profits from 
£211,000 to £410,000 for the year 
to May 31. 

Turnover edged up to £is.6m 
(£18m). 

Mr Robert Carefull, chair- 
man, said profits were still well 
below expectations. However, 


there was an encouraging 
resurgence in activity, he said, 
mainly because of the impact 
of the group's new products. 

Earnings per share jumped 
to 2.33p (Lip) and a final divi- 
dend of 085p is proposed for a 
L5p (1.45p) total. 

Govett Oriental 

Net asset value at Govett Ori- 
ental Investment Trust was 
437 -2p per share at September 
30, up from 397. Gp at the trust’s 
March year end and 341p at 
end-September last year. 

Attributable revenue 
amounted to £2.7m (£i.81m) for 
earnings of ljjp (lpl per share. 
To utilise tax credits on UK 
franked investment income, a 
“conventional" and unchanged 
interim dividend of 0.4p is 
declared - last year’s final dis- 
tribution was paid as a foreign 
income dividend. 

Exploration/El Oro 

The Exploration Company, 
which despite its title operates 
as an investment dealing com- 
pany. lifted first half profits to 
£ 1.04m pre-tax, against 
£827,000. 

The outcome, for the six 
months to June 30. reflected 
sharply higher profits from 
investments. This offset lower 
returns from associates, divi- 
dends. rents and interest 

Earnings per stock unit 
improved from -L89p to 6.0Sp. 

The associated El Oro Min- 
& Exploration - also an 
investment dealing company - 
«P°* ed Pre-tax profits of 
£<66,000 (£751,000) for the same 
Period, giving earnings of 
l2-06p ill.73p) per share. 

Contra-Cyclical 

Contra-Cyclical investment 
Trust saw a fall In net profits 
tor the six months to Septem- 
ber 30 from £508.000 to £311.000. 

Net asset value per capital 
snare dropped to 49.6p (52.4p). 

bantings per income share 
tell from G.35p to 3.8Sp. The 
interim dividend is 2.25p. 


i 



X 


FINANCIAL TIMES THURSDAY OCTOBER 27 1994 



FINANCIAL TIMES SURVEY 

MOROCCO 

Thursday October 27 1994 



The light shines 
more brightly 

David White and Francis Ghiles assess the 
country’s economic performance and 
its prospects for political 


I t is probably fair to say that 
Morocco has never been 
seen by the world in 
general in a more favourable 
light in ah its long and proud 
history than now. 

Contrast helps, of course. 
Compared with the brutal civil 
violence and near-anarchy of 
neighbouring Algeria. Morocco 
stands out for its stability, 
cohesion, economic growth and 
relative libe ralism 
This was not always so. 
Twenty years ago, the 
longevity of its monarchical 
system was open to doubt after 
two attempts OH King Hassan 
ETs life. Ten years ago, it was 
in deep financial trouble, 
leaning on the International 
Monetary Fund to steer it 
through a gradual adjustment 
process. 

The king, 33 years on the 
throne, has proved a shrewd if 
stem hehnsmnn - and also a 
statesman, through the role he 
has played over the years, 
mostly behind the scenes, in 
promoting Arab-Israeli concili- 
ation. It is an implicit recogni- 
tion of this role that the inter- 
national conference on 
economic development follow- 
ing the Israeli-Palestlnian 
peace agreements is being 
staged in Casablanca, starting 
this Sunday. 

As for the economy, annual 
growth has averaged 4 per cent 
over the past decade. This 
year, with abundant rain prod- 
ucing a bumper cereal crop, 
growth is expected to reach 10 
or ll per cent, after stagnating 
in 1998 in the second succes- 
sive year of drought Inflation 
is holding at around 5 per cent 
Morocco has come through 
its debt restructuring. and 
although debt servicing takes 
up 30 per cent of the annual 
budget the public sector defi- 


cit has fallen from 12 per cent 
of gross domestic product in 
the early 1980s to 2 per cent 
last year. This year the figure 
is expected to rise slightly to 
ZS per cent 

Starting last year, Morocco 
embarked on privatisation of a 
scope comparable only with 
that of some Latin American 
countries. Reservations about 
losing the state’s grip on public 
utilities and strategic sectors 
are progressively being over- 
come. The long-dormant stock 
market in Casablanca can 
today claim to be the biggest 
in terms of capitalisation, in 
the African continent outside 
South Africa- Foreign invest- 
ment is expected to reach a 
record level this year. 

Government planners say 
the country can count on aver- 
age growth of 45 per cent over 
the next few years. But for Mr 
Omar Kabbaj, a former IMF 
official who in the present 
interim government of non- 
party technocrats holds the 
wonderful title of "minister in 
charge of stimulation of the 
economy”, that is not enough. 
The country needs to step up a 
gear to keep pace with the 
demand for jobs. 

M r Kabbaj has set an 
amb itious objective of 
.65-7 per cent a year, 
mchidtng in that target a is 
per cent annual increase in 
exports of finished products. 
These expectations rely 
heavily on the private sector, 
although Morocco has few pri- 
vate sector companies of any 
size by international stan- 
dards. 

Around the beginning of this 
year, Morocco’s population of 
at least 27m is reckoned to 
have passed the threshold of 
being more than SO per cent 


change 

urban, the result of a secular 
process of migration from the 
Saharan regions to the rich 
Atlantic plains and from the 

w wntr ysida to the dties. 

Urban unemployment now 
stands at around 16 per cent 
In the terming areas the rate is 
sometimes more, sometimes 
less, depending on the vagaries 
of the climate. Population 
growth, although it has 
slowed, is running at 2 per cent 
annually. There are expected 
to be a quarter of a million 
new arrivals on the job market 
each year. 

Though subject to periodic 
manifestations of discontent 
Morocco has been shielded 
from the kind of radical 
Islamic movement that has 
tom Algeria apart and affected 
other countries In the region. 
Moroccan officials are over- 
anxious to TmdarHwp thg coun- 
try's “specificity" in this 
respect Essential to this “spec- 
ificity" are the religious cre- 
dentials of the king himself as 
a descendant of the Prophet 

Mohammed. 

As a symbol of this role as . 
“Commander of the Believers" 
sfamda the extraordinary new 
Hassan n mosque, dominating 
the Casablanca waterfront a 
lavish enterprise which took 

10.000 craftsmen six years to 
build, constructed an idles over 
the water, including a men's 
prayer area with room for 

20.000 and underfloor heating, 
and a sliding roof weighing 
1400 tonnes. Criticism over its 
extravagance has subsided; 
most people seem proud of 

having it. 

Privately, however, senior 
Moroccan nfflriaig admit deep 
COncem about the implications 
of developments In Algeria. 
Neither the emergence of a 
fundamentalist state in 



A vi aw of Casablanca harbour. An international conference foOowfng the (sraaO-Palosttnian peace agreements begins In the city on Sunday oyn oar*, 


IN THIS SURVEY 

□ Relations with the 
European Union: 
grinding of teeth in 
Rabat 

□ Privatisation: the big 
sales are lust beginning 

Page II 

□ Foreign policy: 
king's conciliation efforts 
pay off 

□ Industry: denim 
maker shows way ahead 

Pagelll 

□ Stock market: sleepy 
club comes to life 

□ Jewish community: 
protected by the king 

□ Agriculture: Gatt deal 
may hit exports Page IV 


□ Energy sector: 
shortages seem likely to 
persist 

□ Water resources: 

consumers must pay 
more Page V 


Trade and transfers in first eight months in millions of dirhams ($1=approx Dh8.9) 


Jan-Aug 1983 

imports 

40.484 

Exports 21,108 

Trade deficit ... 

19.37S 

Transfers from Moroccans living abroad 

...12,081 

Tourist receipts ... 

- 7,476 

Jan-Aug 1994 

Imports 

^ 44,444 

Exports — 23,361 

Trade deficit — . 

— 21,083 

Transfers from Moroccans living abroad .... 

-11313 

Tourist receipts — 

7,406 


Change 

+9.8% 

Change —+10.7% 

Change 

+8.8% 

Change — 

. -6.4% 

Change — 

Source: Finance 

-0.9% 

Ministry 


Algeria, nor the disintegration 
of Algeria as a wfinn, could 
avoid having a profound 
impact on Morocco. 

With its powerful interior 
ministry, Morocco keeps its 
own fundamentalist groups 
under fairly heavy-handed con- 
trol. Mr Abdessalam Yassme, 
leader of Justice and Charity, 

the chief radical Tslamin organ. 
isytion, is under house arrest, 
and no party would be allowed 
to contest elections under an 
Islamic banner. Religious 
causes are mostly represented 
on the political scene by 
btiqlal. the old national inde- 
pendence party. 

Moroccan sensitivity was 
shown up by the eruption of 
tensions between the two coun- 
tries in August after a shooting 


incident in Marrakesh, in 
which two Spanish tourists 
died. Rabat hastily imposed 
visa requirements on anyone 
of Algerian nationality or ori- 
gin. Algiers responded by clos- 
ing the border. The favoured 
theory in official Moroccan cir- 
cles is that Algeria’s secret ser- 
vice was behind the attack. 

The Algerian press has 
accused Morocco of turning a 
blind eye to weapons crossing 
into Algeria, destined for 
armed Tsiamir. groups crossing 
the border. Many Algerians 
feel deep resentment towards 
Morocco, suspecting it of 
playing a game to win the con- 
sent of a future Algerian 
Islamic g overnment to Rabat's 
sovereignty over the former 

S panish Sahar a. 


Senior officials say Morocco 
needs to strengthen its “anti- 
bodies a gains t contagion" from 
Algeria. These defences are 
twofold. One is economic 
growth and wider participation 
in the country's wealth. The 
other Is liberalisation of its pol- 
itics. The system that the king, 
now 65, will hand over to his 
heir, Crown Prince Sidi 
Mohammed, wfll be considera- 
bly less undemocratic than it 
was a few years ago. 

All the strings of authority 
continue to be controlled, 
ultimately, by the royal palace. 
But parliament - comprising a 
recondite collection of parties 
- has had its powers 
strengthened. It can send back 
budgets, question ministers 
and bring up issues such as 


human rights. 

More than 400 political pris- 
oners were amnestied in July. 
Foreign experts say there 
remain about 50 political 
detainees, mostly fundamental- 
ists. Newspapers these days 
sometimes show surprising 
freedom - the weekly L’Econo- 
miste being an example of a 
new era in the Moroccan press. 

Following a recent policy 
turnaround, the three Berber 
languages may now he taught 
in state schools alongside Ara- 
bic. something Berber cultural 
associations had long struggled 
for. Women’s rights, although 
more restricted than in Tuni- 
sia, have improved. 

Opening parliament this 
month, the king repeated an 
offer made twice before to 


left-wing and nationalist oppo- 
sition parties, which were 
strengthened in elections last 
year, to give them most of the 
cabinet posts and negotiate 
alliances to form a parliamen- 
tary majority. The parties had 
previously refused the condi- 
tions. This time the king, seek- 
ing “alternation" in govern- 
ment, added the offer of the 
premiership, held since May by 
Mr AbdeHatif Filali, a veteran 
diplomat A new government 
could emerge by the end of the 
year. 

Whatever its shape, the gov- 
ernment can be expected to 
press ahead with efforts to lib- 
eralise and modernise the 
economy. But real political 
change is likely to come at a 
slower pace. 



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and financial markets. 

Through its policies of innovation, 
specialisation and integration, Wafabank stands 
out in the banking and — 
financial markets of 
Morocco. This strategy 
has carried the institution 
to develop the latest in 
banking technology such 
as electronic banking and 
financial engineering. 

Wafabank's sense of 
initiative and anticipation has allowed it to 
rapidly become one of Morocco’s largest 
banks. 

Within a global and well orchestrated strategy 
to help Moroccan companies, Wafabank has 
created specialised subsidiaries in order to 
facilitate the integration of such companies into 

the Great Maghreb and the World markets. 

Wafabank and its subsidiaries make up the 
Wafabank group and hold a portfolio made up 
of client companies ranking among the best in 
their respective sectors. 


Head For 
Morocco with 
Wafabank 


Specialised Organisation and State of the Art 
Technology. 

A corporate bank was established within 
Wafabank with specialised departments by 
business sector and a 
central Foreign Trade 
Department 

Their objective is to offer 
national and intemationai 
clients efficient services 
that facilitiate investment 
and trade. 

Computer systems based 
solutions have been set up to speed up the 
processing of intemationai operations and the 
gathering of reliable information. 

Top level expertise for financial engineering 
and investment. 

In the areas of Merchant Banking, Wafabank 
offers expert consultancy services in corporate 
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Foreign and domestic companies wiii find at 
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David White looks at relations with the European Union 


There’s a grinding of teeth in Rabat 


Area 71 0,850 sq P ° P ^ g H^ 

Head of state Moroccan dirham 


Currency 1992 $1=Dh8.538 

Average exchange rate ©i _nhQ ocra 


The lack of progress in 
negotiations for a new and 
closer relationship with the 
European Union has become 
Morocco's greatest frustration. 
There is an almost audible 
grinding of teeth in the govern- 
ment offices of Rabat when the 
subject is brought up. 

Isolated for long periods of 
its history. Morocco’s economic 
and social aspirations are 
firmly fixed on the north, 
across the 14 kilometres that 
separate the country from con- 
tinental Europe. 

Most of its merchandise 
trade is already done with the 
European Union, which 
accounted last year for 55 per 
cent of Morocco's imports and 
63 per cent of its exports, with 
the balance heavily in Europe's 
favour. In some farm products, 
as much as 90 per cent of 
Moroccan exports are depen- 
dent on the European market. 
But for Moroccans, relations 
with the EU are not just a com- 
mercial affair, but also a 
strong political and emotional 
issue. 

Negotiations have stalled on 
a new “association" or “part- 
nership” agreement (the title 
being among the more minor 
of the questions to be settled). 
Morocco has had a series of 
commercial and co-operation 
agreements with the European 
community over the past 25 
years. In 1957, the year after 
Spain and Portugal became 
members, it lodged an applica- 
tion to join, in what officials 
now describe as “a political sig- 
nal". The application was 
turned down, with the commu- 
nity clearly unwilling to 
extend the geographical defini- 
tion of the EU to the other 


“! 5 £2 9° I 




.. "Klnltnr/ 

m&r ■ • 

•£ :*4 v^V.-vv ■■■ ’ 

IK a* 

vi. ~ i? K ‘ a ? • 


0° ErRachkfla - — 


ALGERIA . 


• -- 1: -2 r 

: m l Bi MlyU 


•' • ■*" v:I ' ■ -i'- * 


MAURITANIA 





Kz: 


shore of the Mediterranean. 

In 1992 Morocco launched a 
fresh initiative, seeking explor- 
atory talks on a new kind of 
agreement. Talks on detailed 
proposals began late last year. 
But Morocco was bitterly dis- 
appointed in its expectations. 
In Brussels, the Moroccans are 
criticised for a naive approach 
to complex EU procedures and 
for failing to mount an effec- 
tive lobbying campaign. 

“We do not understand this 


slowness," complains a govern- 
ment minister in Rabat. 
Morocco was to have set the 
model for other countries in 
their relations with the EU. 
but it has been overtaken by 
both Tunisia and Israel, and 
Egypt is now catching up. 

The frustration steams 
largely from the priority that 
the EU has given to the coun- 
tries of eastern and central 
Europe which are preparing 
for future accession. The last 


enlargement, taking in Spain 
and Portugal, came as a big 
blow to Moroccan agriculture. 
Now the attention paid to cen- 
tral Europe has squeezed finan- 
cial flows to Mediterranean 
partners. According to EU offi- 
cials. per capita grants to cen- 
tral Europe are four times 
those to Morocco. 

The officials concede, how- 
ever, that there are strong eco- 
nomic and social parallels 
between the two regions and 


M r Abderrahman 
Saaidi. Morocco's 
privatisation minis ter, 
insists: “We are not selling the 
furniture." But the country's 
plans for spiling state holdings 
are unparalleled in their size 
and scope anywhere in Africa 
or the Middle East. 

A law allowing the sale of 
state Interests in certain speci- 
fied sectors was first passed in 
1989. The earlier policy of Mor- 
occamsation, abandoned in the 
late 1980s, was being thrown 
into reverse. But the pro- 
gramme began cautiously, cir- 
cumscribed by evident political 
reservations. Activities such as 
the phosphate industry, public 
utilities, oil refining and the 
national dag-carrier Royal Air 
Maroc were at that stage 
clearly excluded. 

Privatisation did not get 
under way until 1993 with the 
sale of the government’s stake 
in a yeast producer to French 
and Moroccan interests. The 
first major operation was the 
takeover of majority control of 
the biggest cement company, 
Cior. by Holderbank of 
Switzerland. 

To date, state shareholdings 
in 24 enterprises have been 
sold, bringing in revenues of 
some Dh3-5bn. By the end of 
next year, the whole of the ini- 
tial list of 112 privatisable 


PRIVATISATION 


The big sales are 
just beginning 


interests - 37 hotels and 75 
companies - is due to have 
been transferred to the private 
sector, with proceeds expected 
to reach Dhl7bn, or almost 
$2bn. 

These are out of a total of 
some 800 state companies, 
in part dating from French 
policies during the protectorate 
of 1912-1956, and accounting for 
about a fifth of the country's 
gross domestic product 

A variety of formulas has 
been devised for the new 
balance of ownership, between 
foreign companies. Moroccan- 
based interests, employees and 
the stock market hi the sale of 
the CTM-LN bus company, a 
slice was reserved for Moroc- 
cans living abroad. 

In the distribution of 
petroleum products, the state 
has already sold all its 
holdings, with Shell and Mobil 
buying back the government's 


50 per cent stake. 

All the operations so far 
have been counted as suc- 
cesses. with stock market offer- 
ings heavily oversubscribed. 
The government is expected to 
have little difficulty with the 
remainder of its list, except 
perhaps in finding buyers for 
textile factories which have 
recently been starved of 
orders. 

Eleven state holdings are 
currently on the market Mr 
Saaidi, who recently went to 
London, Birmingham and Glas- 
gow to present his plans and 
glean the benefits of the UK’s 
experience in privatisation, 
says the big sales are just 
beginning 

The biggest is the state’s 
majority stake in Soctete Nat- 
ional d’lnvestissement a con- 
glomerate which was used as a 
vehicle for Moroccanisation in 
the 1970s and which embraces 


41 companies ranging from 
beer to banking and from con- 
sumer credit to chemicals. Mr 
Saaidi. a tax accountant by 
profession, says it would have 
taken too long to sell each 
interest individually. 

The government will place a 
further 16 per cent of the group 
on the stock market, where it 


A more ambitious phase 
is in preparation, 
opening up areas that 
were out-of-bounds, 
including public utilities 


is already traded, and is offer- 
ing the remainder of its 67 per 
cent holding to a consortium, 
setting a floor price for the 51 
per cent stake of Dhl.275bn 
($143m). 

The buyers will be 
committed to putting part of 
that stake on the market 
within three years, with the 
idea that they will have this 
time to make alliances to 


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Morocco is one of" the leajing examples 
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company efficiency, Morocco represents 
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markets. 


establish majority control. The 
intended result of this complex 
set of conditions is that 
between 43 and 48 per cent of 
the shares will be traded on 
the Casablanca stock ex- 
change, with the current 
private sector partners holding 
17 per cent and new partners 
35 to 40 per cent 

The new core shareholders 
must be companies domiciled 
in Morocco and must hold 35 
per cent of the group for at 
least five years. Within that 
period, they wifi be allowed to 
restructure hol ding s, but not 
sell more than 15 per cent of 
book value of the portfolio 
each year, and must then rein- 
vest at least 80 per cent of the 
proceeds in other non-real 
estate holdings. 

Also being sold, as one lot, 
are majority stakes in three 
sugar companies. Sugar pro- 
ducers’ cooperatives are given 
the first option but may be 
unable to muster the funds. 
Still to be sold in the net few 
months are stakes of 35 to 99 
per cent In Banque Marocaine 


the problems that arise on the 
ElTs periphery. “What you see 
on the Strait of Gibraltar and 
cm the German-Polish border is 
strikingly similar, you have 
illegal trade, illegal migrants 
and drug traffic." 

The future of the talks with 
the EU has now become linked 
to settlement of a fishing dis- 
pute. Morocco recently set out 
to halve a previously-agreed 
level of catches from its 
waters, claiming they had been 
overfished. Fishing is essen- 
tially a bilateral issue between 
Morocco and Spain, the coun- 
try in the front line of Moroc- 
co's dealings with Europe. The 
relationship between the two is 
dynamic - especially in trade 
and investment - but also 
troublesome 

The latest round of Euro-ar- 
gument coincided with fresh 
stirrings by the Moroccan 
authorities over the Spanish 
enclaves on Morocco’s north- 
ern shore. Ceuta and Melilla. 
Morocco is upset by Madrid’s 
unwillingness to set up talks 
on the future of the territories, 
which have been in Spanish 
hands for more than 400 years, 
and especially by plans to give 
the two enclaves new statutes 
conferring a limited degree of 
self-rule. 

Agricultural problems also 
have to do primarily with com- 
petition with Spain, Morocco's 
difficulties have increased as a 
result of the Gatt agreement 
signed in Marrakesh in April. 
Moroccan producers of toma- 
toes. for Instance, had invested 
heavily to supply the European 
market before minimum refer- 
ence prices come into force in 
the spring. But under Gatt 
terms, the price mechanisms 


du Commerce Extdrieur, the 
Sonasid steel products com- 
pany, newspaper distributor 
Sochepresse. gas storage com- 
pany Somas, and Simef, a 
maker of diesel and electric 
motors. 

Meanwhile, a more ambi- 
tious phase is in preparation, 
opening up areas that were 
specifically ruled as being out- 
of-bounds in the initial plans, 
including public utilities with 
multi-billion-dollar investment 
needs which Morocco is. in no 
position to cover without 
increasing Its debt burden. 

Technocratic ministers such 
as Mr Saaidi argue that there 
are no longer any taboos about 
what can or cannot be sold. 
“We have no complexes any 
more." he says. “Political and 
public opinion is ready to 
accept a widening of the scope 
of privatisation." 

These plans include privatis- 
ing the state telecommunica- 
tions authority, which has a 
four-year S2bn programme to 
finance, and introducing com- 
petition in mobile telephone 
services. 

The state will also subcon- 
tract part of its electricity gen- 
erating needs, almost certainly 
to foreign interests, with finan- 
cing requirements in the indus- 
try estimated at some $3bn 
between public and private sec- 
tors. The new entrant will be 
required to manage two sites 
and build two more, selling the 
electricity to the state com- 
pany which will remain the 
monopoly distributor. “That 
does not mean it cannot 
change in the future," says Mr 
Saaidi. 

Water supply is also a candi- 
date for privatisation, although 
probably not until later on. 
And Royal Air Maroc is no lon- 
ger considered off-limits. 

What is expected to remain 
firmly in state hands is the 
mining of phosphates through 
the Office Ch§rifien des Phos- 
phates, as a strategic export 
sector. But plans are under dis- 
cussion for hiving off produc- 
tion of phosphate derivatives 
to private concerns. 

At the same time, the gov- 
ernment is exploring other 
options for bringing in private 
sector management through 
contractors and concessions. 
The message about entrepre- 
neurship has sunk in deep. 
Even the running of the baths 
at the sumptuous new Hassan 
O mosque in Casablanca is 
being put out to contract. 


David White 


INDEX OF FT SURVEYS 

July 1992 - July 1994 


Fnr /w-durr m/ormdf/on nn Morocco, please contact Angus Blow or Karen Bradk-v 
at Boring* m LonJon: (01 7M 522-6516. 


This index has been compiled for researchers 
and libraries and those who require a sound 
briefing on national and international subjects. 



A useful cross index of all FT surveys published 
in the above period, listed in alphabetical 
order and subject. 


BARINGS 


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Marketing Department, Financial Times 
Number One Southwark Bridge, 
London SE1 9HL 
Teh +44(0)171 873 3213 


may be applied year-round. 
mamiy to the benefit of the 
Moroccans' Spanish competi- 
tors. 

The issue is a vital one for 
Morocco, where 500,000 people 
are employed in the farm 
export sector, with up to 3m 
dependent on it for their liveli- 
hood. Moroccan negotiators 
now have the task of trying to 
reconcile the Gatt conditions 
with the country's present 
agreement with the EU. 

Instead of improved access, 
say officials in Rabat. Morocco 
now has to fight to safeguard 
what it already has. 

If the two issues of fishing 
and sensitive farm exports are 
resolved, the officials say, “we 
can go ahead on a partnership, 
but it will fall far short of what 
we thought in 1992." Ministers 
have spoken of a “crisis of con- 
fidence" between Rabat and 
Brussels. 

However, it is foreseeable 
that under a revised negotia- 
ting mandate the EU may give 
ground on some of Morocco's 
requests, possibly including in 
the proposed agreement a pro- 
vision for balanced-payments 
support 

Moroccan officials see both 
France and Spain as “objective 
political allies” aware of the 
strategic and economic impor- 
tance of developments in North 
Africa for the EU itself. “But 
we find them in our way when 
it comes to sectorial or 
regional interests.” 

According to a EU official, 
“our current difficulty with 
Morocco is that because of the 
economic recession in Europe 
we are pressed to take Into 
account our short-term inter- 
ests, which are often in contra- 


B ' 1993 $1=Dh9.299 

1994 SI =Dh9.477 


toe economy 


Total GW* ($bn)_ 

Real GDP growth (%) 

Components of GDP (%) 

Private consumption 

Total Investment 

Government consumption 

Exports 

Imports 

Annual average % growth in 

Consumer prices (%) 

Wholesale prices (%) 

Ind. production (%) 

Mining production (%)— 

Energy production (%) 

Total external debt (Sbn) 

Reserves minus gold (Sm) 


Trade 

Current account balance (Sm).. 

Merchandise exports t$m) 

Merchandise imports (Sm) 

Trade balance (S m)....., 


Main trading partners (%) (1). 

European Union. — 

Ranee 

Germany. 

Italy. 

Spain. 

UK....- 

Japan 

US. 

Middle East 


Exports 

63.9 

31.5 

9.2 

5.9 

7.4 

3.4 

3.9 
3.1 

5.3 


Imports 

62.8 

27.9 

8.9 

7.1 

9.1 

2.9 

1.4 

6.4 

2.4 


(1) Percentage shares of trade In 1992. Sources: IMF, E1U 


diction with our long-term 
political and economic inter- 
ests." 

Last week the European 
Commission called on the EU 
to create a Euro-Mediterranean 
Economic Area with its North 
African and Middle East neigh- 


bours. thus establishing the 
world's biggest free trade area. 

As Mr AbdelLitif FiiaJi. tbe 
prime minister and foreign 
minis ter, said at a recent jour- 
nalists' lunch: “Tbe Mediterra- 
nean is a lake. Morocco is not 
the other end of the world." 


State to ease telecom links 


European and US 
telecommunications operators 
are getting set for the contest 
to break iDto Morocco, now 
planning to liberalise the sec- 
tor to bring it Into line with 
the standards of EU countries, 
writes David White. 

With a S2bn investment pro- 
gramme already under way np 
to 1997. the government plans 
to privatise the state telecom- 
munications authority and 
bring in competition for the 
first time. But it has not yet 
decided when or how far liber- 
alisation will go, with some 
evident differences of view on 
the issue among members of 
the government 

Telephone services have 
expanded rapidly but there 
remains a large potential for 
expansion and new services to 
be exploited. 

“We are seriously thinking 
about how to regulate tele- 
coms," says a senior govern- 
ment official. Services are cur- 
rently the monopoly of the 100 
per cent state-owned Office 
National des Postes et Tele- 
communications (ONPT). 
Plans are being drawn np for 
turning the state authority 
into a company that can then 


be privatised, and at same 
time foster competition at 
least in certain services such 
as mobile telephones. 

There are now just lm tele- 
phone subscribers in a country 
with an active population of 
10m. But the network has 
been growing rapidly, dou- 
bling in the last four years. As 
recently as 1986, Morocco had 
only a quarter of a million 
telephone lines and fewer than 
500 public telephone booths. 
By last year the latter had 
multiplied ninefold. Bring of 
recent vintage, it is an all-digi- 
tal system. 

Installation of automatic 
services in rural areas has 
been stepped np, along with 
the introduction of a public 
data transmission network 
and two mobile radio tele- 
phone networks. Morocco beat 
Spain, for Instance, in introdu- 
cing a cellular mobile service 
to the international GSM stan- 
dard. 

The ONPT has so for self-fi- 
nanced 45-50 per cent of 
investments, with the rest 
from loans including support 
from the World Bank and 
European Investment Bank. 
“Tbe authorities realise that 


without reliable telecommuni- 
cations the country cannot 
achieve Integration in the 
world economy.” says Mr 
Abdeslam Ahizoune, posts and 
telecommunications minister. 

In the nest four years tbe 
ministry plans to double the 
telephone network to 2m lines, 
introduce fibre-optic cables, 
and follow technology develop- 
ments closely in order to “give 
companies the same facilities 
as their competitors in 
Europe”. 

After studying other coun- 
tries’ experience in liberali- 
sing the sector, Mr Ahizoune 
says mobile telephones and 
certain other services will be 
opened to competition while 
shares in tbe stale authority 
will be sold off. 

But it is not yet dear what 
role the government will keep. 
Parliamentary approval is still 
needed for the conversion of 
ONPT. Privatisation could 
involve a strategic alliance 
with a foreign company, cou- 
pled with a public share offer- 
ing . Mr Ahizoune says “vari- 
ous models” are being 
considered and that the 
changes will be made “as 
quickly as possible". 


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MAG 


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FINANCIAL TIMES THURSDAY OCTOBER 27 1994 


MOROCCO III 


T he choice of Casablanca 
for nest week’s confer- 
ence of political and 
business leaders to discuss eco- 
nomic development following 
the Israeli-Paiestinian peace 
agreement is an acknowledge- 
ment of Morocco’s role in try- 
ing to promote reconciliation 
between Jew and Arab. 

It has played this role, 
mostly discreetly, over 20 years 
or more. Its efforts stem from 
the strong personal convictions 
of King Hassan II, whose con- 
ciliatory gestures in the past 
have provoked indignation 
among more hardline Arab 
nations, and are rooted in the 
country's own history of toler- 
ance. Not only has Morocco 
always had a Jewish commu- 
nity, with Jews now in some 
influential positions: almost a 
tenth of Israel’s population, 
some 600,000 people, are of 
Moroccan Jewish descent. 

Initially, the scope of the 
conference was to have been 
limited to the Middle East, but 
Morocco insisted It should be 
extended to cover North Africa 
as well. Morocco has taken a 
forward position in its rela- 
tions with Israel. Its agreement 
to exchange liaison officers in 


David White assesses foreign policy ahead of next week’s important conference in Casablanca 

King’s conciliation efforts pay off 


Rabat and Tel Aviv, a first step 
towards full relations, made it 
only the second country after 
Egypt to establish formal ties 
with Israel. - 

Senior Moroccan advisers 
warn against the risk of exces- 
sive expectations from the con- 
ference, whose participants 
will include heads of m ulti wa. 
tional corporations. "But it is 
essential to send an electric 
jolt to political and private sec- 
tor decision-makers, " they say. 
"Across the whole region, from 
Morocco to the Gulf, it will not 
he the same as it was before." 

The host nation is willing to 
support in principle the idea 
of a new development 
institution on the Iwm of the 
European Bank for Recons- 
truction and Development, as 
proposed by Israel, but only if 
it is demonstrated that if can 
play an effective and more 
than symbolic role, say 


Moroccan officials. 

The conference will look at 
prospects for region- wide pro- 
jects, less ambitious interna- 
tional ventures involving 
groups of nations, and national 
projects requiring aid. Morocco 
will bring specific proposals 
including posable involvement 
by Moroccan companies in 
building a Tel Aviv-Amman 
motorway, hotels in Jericho 
and agricultural projects in tbe 


Algiers may have wanted 
to show that Morocco is 
not immune to the threat 
of Islamic extremism 


Nile valley. It will also be seek- 
ing assistance for infrastruc- 
ture plans of its own. 

The idea of a vast new fron- 
tier-free zone, Moroccan offi- 
cials warn, "will not come 


about overnight". The prece- 
dent of the Arab Maghreb 
Union, set up amid much fen- 
fere in 1989 between Morocco, 
Algeria, Tunisia, Libya and 
Mauri tania , is hardly encour- 
aging. The pact came at a high 
point in relations between 
Morocco and Algeria, officially 
re-established the previous 
year. 

The one significant project 
that can be said to have come 
from this co-operation is the 
$L4m gas pipeline - on which 
work was officially inaugu- 
rated earlier this month - run- 
ning from Algeria's Sahara gas 
field of Hasst R'Mel some 1,100 
kilometres through Algeria, 
Morocco and under the Strait 
of Gibraltar before reaching 
the Spanish and Portuguese, 
and probably at a later stage, 
French markets. 

The Arab Maghreb Union 
was already considered mori- 


bund before Morocco and 
Algeria locked horns again in 
the aftermath of a shooting 
incident in August, In which 
two Spanish tourists were 
killed by gunmen in a Marra- 
kesh hotel. Morocco, possibly 
rashly in retrospect, Immedi- 
ately imposed visa require- 
ments on Algerian citizens or 
people of Algerian origin. 
Algeria reacted, not by recipro- 
cating with visa rules, but by 
closing the border completely, 
something which some believe 
it wanted to do anyway to try 
to stop gun-running. 

After initially suspecting 
Algerian fundamentalist 
groups of tbe hotel killings, 
Moroccan officials now point 
the finger at the Algerian 
authorities themselves. They 
believe Algiers may have 
wanted to demonstrate that 
Morocco was not Immune to 
the threat of Islamic extrem- 



Kfcng Hassan: has provoked Arab 
hardliners to Ind tgnat ion 


ism and to put a stop to alleged 
passive assistance to Algerian 
fundamentalists. 

One of the basic precepts of 
the UMA treaty was freedom of 
passage. "When the country in 


the presidency of the UMA 
closes its border I do not see 
how you have a zone of open 
frontiers, n a Rabat government 
official commented wryly. 
"The border is easy to close, 
but difficult to open. Up to 1988 
it stayed closed for 12 years.” 

Relations between the two 
countries have been strained 
for most of tbe time, ever since 
Algeria won independence 
from France in 1962. The ten- 
sion started with border dis- 
putes and built up after 1975 
when Spain decided to pull out 
of its Western Sahara territory, 
with the Intention of ceding it 
to Morocco and Mauritania 
(the latter subsequently drop- 
ping its clalmj. 

Algeria’s objection to what it 
saw as Moroccan expansion- 
ism, and its support for the 
Pollsario Front movement 
Fighting for independence in 
the territory, kept a wedge 


between the two nations. 
Morocco walked out of the 
Organisation of African Unity 
10 years ago over Us stance on 
the Sahara. 

More than three years after 
the formal ceasefire with the 
Pollsario, a UN-sponsored ref- 
erendum deciding between 
independence or attachment to 
Morocco is supposed to take 
place next February. But after 
many delays already, the date 
is expected to slip again 
because of difficulties in draw- 
ing up the electoral register In 
the region, which covers an 
area more than half as big as 
the internationally recognised 
territory of Morocco. 

However, there is every indi- 
cation that King Hassan wants 
to tie up the Sahara issue rap- 
idly. The general assumption 
now is that tbe referendum, 
when it takes place, is likely to 
go in Morocco's favour - and 
that, in any case. Morocco 
would not let it go ahead 
unless it was pretty sure It 
would win. That would put on 
end to a 20-year quarrel during 
which the Moroccans, not 
adept at handling their own 
propaganda, incurred wide- 
spread discredit. 


O n a gentle rise 
overlooking the p lain at 
Settat, south of 
Casablanca, stands an 
impeccable new factory 
producing half the denim 
needed by Morocco's clothing 
industry. 

The Spanish company Tavex. 
a leading European producer of 
denim cloth, built the $50m 
facility two years ago. The 
Moroccan branch now 
accounts for a third of the 
group's production. By 1996, 
under current plans, this 
proportion will have built up 
to almost half. 

With 260 employees, the ven- 
ture does some direct export 
business - it has a contract 
with Wrangler of the US - but 
is essentially geared to the 
needs of the local clothing 
industry, which accounts for 


The government's aim is to establish integrated industrial sectors 

Denim maker shows way ahead 


one in every four manufactur- 
ing jobs in Morocco and 
depends overwhelmingly on 
exports of finished products to 
the European market 

For Mr Driss Jettou, the 
industry minister, who himself 
is a businessmen with textile 
interests, the venture illus- 
trates one way in which 
Morocco can reduce its vulner- 
ability in a highly cost-compet- 
itive industry. 

"Before, we made jeans, 
importing the cloth. Now we 
make the material." The fac- 
tory, carrying out the whole 


process of sp inning , dyeing, 
weaving and finishing, is an 
example of the government's 
aim of establishing increas- 
ingly integrated industrial sec- 
tors. 

Textiles and clothing, Moroc- 
co's biggest industrial sector in 
value after food and chemicals. 
Is already suffering from com- 
petition from south-east Asia 
and other areas. Morocco cur- 
rently has a significant advan- 
tage in wage costs compared to 
EU countries - a ratio of as 
much as one to five - but Mr 
Jettou says the government Is 


conscious of the risk of count- 
ing too much on this differen- 
tial. 

“We want to avoid sur- 
prises,” he says. “Basing our 
industrial development on a 
low price of labour cannot last 
long. Someone will always 
come up who can do it more 
cheaply.” 

His department is placing 
am phagfa on training at all lev- 
els. quality and productivity, 
on integrating industrial activ- 
ities, attracting higher-technol- 
ogy industries (with companies 
such as Alcatel and Thomson 


The industry provides 15% of the country’s experts, writes Francis Ghiles 

A fishing line to Europe 


Fish accounts for 15 per cent of 
all Moroccan exports and the 
industry employs at least 
150,000 people. The fishing 
agreement between Morocco 
and the European Union is a 
key part of the kingdom's rela- 
tions with its northern neigh- 
bours, most notably Spain. 

Earlier this month the four- 
year agreement with the EU, 
which was due to run until 
1996, was renegotiated. It will 
now end to May 1996, to be 
replaced by an agreement 
which will run for three years. 

For all practicable purposes, 
it Is an agreement with Spain 
and, to a lesser extent, with 
Portugal. Indeed, 95 per cent of 
the 750 foreign fishing vessels 
which are allowed in Moroccan 
waters are Spanish. Although 
those rights to fish have not 
changed since tbe first agree- 
ment with the EU, after 
Spam's accession to the EU in 
1998, the idea of biological rest, 
introduced in the 1992 agree- 


ment, has reduced the amount 
of the catch by 20 per cent 

The European Union pays 
Ecul02m for the right of Euro- 
pean vessels to fish in Moroc- 
can waters. To this figure 
should he added licence fees 
paid by individual shipowners 
that are worth EculQm-l5m 
every year to the Moroccan 
exchequer. In exchange, the 
EU grants Morocco preferential 
access to its markets. Import 
duties on Moroccan fish are to 
decline from 8 per cent In 1993 
to 5 per cent in 1996, compared 
with normal EU duties on for- 
eign fish of 25 per cent 

However, the new Gatt roles 
will erode such preferential 
access as they cut import 
duties overall over a period to 
12K per cent, a situation about 
which the Moroccans are not 
happy. 

This month’s agreement 
with the EU entails scientific 
co-operation and allows Moroc- 
can inspectors on foreign ves- 


sels. There are to be talks on 
cuts in the amounts that 
Morocco will allow European 
vessels to fish after May 1996 
and more co-operation to con- 
trol and preserve fish stocks. ■ 

While the Spanish ships 
respect the two-month biologi- 
cal rest agreed in 1992, the 
Moroccans appear not to do so. 
They argue that any curb on 
fishing, notably by smaller 
boats, affects the income of 
fishermen, particularly in the 
north (people who work on 
small boats are usually paid in 
kind) and the absence of fish, 
albeit temporarily, pushes up 
the price of other foods in the 
markets. 

Shrimps and hake are found 
in the north, but a variety of 
fish is taken from Moroccan 
waters. Moroccan vessels tend 
to fish near the coast, Spanish 
vessels further out at sea. How 
much is fished Illegally by for- 
eign vessels or sold by Moroc- 
can ships to foreigners on the 


This announcement appears as a matter of record only 
Framlington Investment Management (Ireland) limited 

(incorporated in Ireland with limited liability, registered number 217071) 

is pleased to announce the est a bli sh ment of the 



FRAMLINGTON 


MAGHREB 

FUND 


(An investment fund constituted as a closed-end trust 
established by Trust Deed dated 10 August 1994 and authorised by 
the Central Bank of Ireland putsuant to the Unit Trusts Act, 1990) 

Minimum Subscription = US$300,000 (or the US Dollar equivalent of 
IR£200,000 whichever is the greater). Offering Price per Unit US$10.35. 

Lead Distributor and Placing; Agent 
L.C.E Edmond de Rothschild Securities limited 


high seas is impossible to telL 
Some observers believe its 
value runs to $10Qm. 

An estimated 550 foreign 
boats, mostly small fishing ves- 
sels from Andalucia, fish off 
Morocco’s north and north- 
western shores but by far the 
most valuable catch is squid, 
caught further south. An esti- 
mated 150 Spanish vessels 
based in Las Palmas fish off 
Morocco’s Saharan shores. 

The feet that Morocco’s 
administration of the Western 
Sahara is recognised by the EU 
but not its sovereignty over 
the former Spanish colony has 
never been an obstacle. In its 
agreement with the EU, the 
southern Moroccan fishing 
zone is deemed to start 
between Tan Tan and Sidi Ifni 
which have always been 
Moroccan and to extend to 
Mauritania, thus neatly side- 
stepping the question of sover- 
eignty. 

Squid is also important for 
the Moroccan fishing fleet 
which boasts 450 high sea ves- 
sels, 300 of which are in activ- 
ity, and 2,500 smaller coastal 
boats. The larger vessels fish 
an estimated 150,000 tons a 
year, 80 per cent of which is 
squid worth an estimated 
Dh2.7bn; the smaller boats taka 
450,000 tons, worth about 
DhL3bn. 

Of the 600,000 tons of fish 
and squid drawn from the sea 
every year by Moroccan boats, 
one quarter is exported, bring- 
ing in an estimated Dh4bn; (me 
fifth, mostly sardines of which 
Morocco is the largest world 
exporter, is canned and sold 
abroad, one quarter is con- 
sumed locally and the remain- 
der - mostly fish of mediocre 
quality or not kept In good con- 
dition because small fishing 
boats lack basic equipment, 
notably refrigeration - is 
turned into byproducts. 

A big effort is under way in 
Morocco to modernise the fish- 
ing fleet and improve equip- 
ment at the main ports: Safi, 
Agadir, Tan Tan and Larache. 

Morocco’s fishing grounds 
are exceptionally rich. The 
potential catch off the coun- 
try’s shores is Im to L5m tons 
a year, it is estimated. 

In 1962 Morocco extended its 
territorial waters and since 
1981 it has claimed an exclu- 
sive fishing zone. However, 
today the industry is in crisis. 
The infrastructure of the ports 
has not been completed by the 
stated time, thus forcing fleet 
owners to invest instead of the 
slate; the buying of boats has 
at times been rather specula- 
tive rather than rational and 
credits are becoming harder to 
extract from Moroccan banks. 
Spare parts are expensive. 

Another factor which has 
affected the profitability of 
ffohrng in the area is that the 
price of squid - dictated by its 
largest market, Japan - has 
declined in recent years. Costs 
win also rise because Morocco 
will have to conform to Euro- 
pean quality standards which 
come into force next January. 


already installed) and exploit- 
ing Morocco's proximity to the 
European market to ensure 
quick reaction and delivery 
times which Asian producers 
would find difficult to mfttr.h. 

Morocco’s manufacturing 
sector accounts for about 185 
per cent of gross domestic 
product a proportion that has 
Increased only gradually in 
recent years. The government 
has promised more support for 
the private industrial sector 
and a reduction in administra- 
tive red tape. It is counting on 
a boost from foreign invest- 
ment and privatisation of state 
activities, ranging from 
machine tools to canneries. 

Mr Abdellatif Fflali, the lib- 
eral-minded prime minister, 
said soon after his appoint- 
ment this summer that the 
government must “let the pri- 
vate sector play its role,’’ rec- 
ognising that the state “does 
not have the vision of a mod- 
em entrepreneur”. 

Many employers are ner- 
vous, however. Mr Ahderrah- 
mane Ouali, secretary-general 


Foreign Investment to July (In minions of dbHtams) 


4.909 


, J 


x1RR% 


iaa 




TrtW .lan-liriy 09 

1 097 





Souck finance Ministry 


of the CGEM business federa- 
tion based in Casablanca, is 
worried that many Moroccan 
companies are too small to 
take on world competition 
under the conditions of April's 
Gatt agreement Three out of 
four Moroccan manufacturers 
have fewer than so employees. 

Mr Ouali says he is counting 
on the establishment of a sec- 
torial restructuring fund 
backed by the World Bank, and 
tbe availability of more funds 
for expansion as savings move 
from property into shares. 
Family groups are likely to 
open up increasingly to new 
shareholders, he says. 

The predominance of small 
companies has Its advantages, 
according to Mr Jettou. insofar 
as they can adapt rapidly to 
changing conditions. “But that 
does not mean we are not seek- 
ing the development of compa- 
nies of European or interna- 


tional dimensions.” This 
implies encouraging companies 
to regroup. 

Industrial investment from 
abroad has risen sharply this 
year, Mr Jettou says, reaching 
some $200m by the end of 
August, led by France, Spain 
and Italy. Overall foreign 
investment in Morocco totalled 
$800m last year, compared with 
less than $10Qm five years ago, 
and senior government plan- 
ners say a target of Slbn a year 
by the year 2Q0Q is “not dream- 
ing”. 

F rance, which has kept its 
place as main investor as 
well as the main provider 
oF bilateral aid, has tripled its 
level of investments since 1988. 
Investments from Spain have 
multiplied 20-fold in the same 
period, and are now not far 
hphind those of France. 

Among the latest ventures, 


Indo, a Spanish spectacle and 
lens maker, is setting up two 
new plants In the Tangier 
industrial zone, employing 
about 100 people. 

The government has mean- 
while reached agreement with 
Fiat of Italy on production of a 
“people’s car” in Morocco. In a 
depressed new car market - 
distorted by the popularity of 
second-hand imports - the idea 
is to produce a car within the 
reach of the middle-ranking 
office worker, and at the same 
time boost the components and 
spares sector. According to Mr 
Jettou, it should cost about 
$6500 compared with a mini- 
mum of about $10,000 for cars 
currently assembled in 
Morocco. 

The Italian group, already 
present through the Somaca 
assembly facility in Casa- 
blanca, won the deal against 
Renault, Peugeot and Citro&n, 
which all currently have cars 
assembled in Morocco. The 
project will start next year 
with the existing Uno model 
but a new model Is planned 
from 1996. Under the agree- 
ment, half the components wdl 
be locally made. 

But Ifr Jettou has no chau- 
vinistic illusions. “It will be an 
Italian car," he says. 

David White 


Whether it's business 
with Morocco or in 
Morocco, 

BMCE will assist you in finding 

customers, suppliers, or joint-venture 
partners, and by providing information 
on the market or on the cost of 
investment and production. 

We will also arrange the most suitable 
financing, domestic or foreign, direct or 
by utilizing the various lines of credit we 
manage for several national and 
international specialized financial 
institutions. 




BMCE 4 


Morocco's foreign trade bank 

140, Avenue Hassan II, Casablanca 
ft 20 03 25/20 04 67/20 05 56 

Brussels : Place des Barricades 7 *2 19.00.45 
Madrid : Calle Diego de Leon 3 1 ft 56.34. 180 
Paris ;3 Rue, Boudreau ft 44.94.23.30 







FINANCIAL TIMES THURSDAY OCTOBER 27 l«M 


K ing Hassan's role as a 
bridge-builder in the 
Arab-Israel conflict is 
one which, for one generation, 
deeply angered many of his 
Arab peers and often puzzled 
western observers. 

Ten years ago the Moroccan 
Jewish community hosted a 
conference on Malmonides, the 
12th century Jewish scholar 
who wrote his famous Guide 
to the Perplexed in Arabic. It 
was the first such Jewish con- 
ference in an Arab country for 
decades and Jews came from 
around the world, including 
Israel. Some Labour and Likud 
members of parliament who 
bad been born in the kingdom 
attended, and a banquet to 
welcome the delegates was 
hosted by Sidi Mo hamm ed, the 
Moroccan crown prince. 

While re-asserting support 
for the Palestinian cause, the 
king reiterated his country's 
long-standing policy of pro- 
tecting its Jewish citizens and 
offered to mediate on talks 
between Israel, Arab nations 
and the Palestinians. Syria 
promptly withdrew its ambas- 
sador to Morocco but the event 
was a gesture to the Jewish 
community, a demonstration 
that Jews and Arabs could sit 
down and talk to each other. 

In the context of the Arab 
world the conference undercut 
hardline Arab states such as 
Syria and Algeria and bol- 
stered the moderate camp led 
by Egypt, which in 1978 had 
signed the Camp David agree- 
ment, recognising Israel. 

Those familiar with Jewish 
history in Morocco were less 
surprised by the move, though 
still impressed. Most of Moroc- 
co's Jewish community - 
which has declined from 

300,000 40 years ago to 8,000 
today - descend from families 
which fled the Spanish inquisi- 
tion after the Christian recon- 
quest of Granada in southern 
Spain in 1492. 

They are regarded as 
“dhimxni”, ie protected per- 
sons but first and foremost as 
tribute bearers. Christians 
laboured under the same sta- 


MOROCCO IV 


T he sleepy Casablanca 
stock market, accus- 
tomed to being an 
old-fashioned, clubbable place 
where nothing much went on, 
has come to life. 

New share issues, privatisa- 
tion, the arrival of foreign 
investment funds and radical 
reform of the bourse's organi- 
sation have transformed it in 
less than two years. 

According to Mr Adil Douirt, 
co-founder of Casablanca 
Finance Group (CFG), an 
investment bank set up in 1992 
and still the only institution of 
its land m Morocco, the Casa- 
blanca bourse has now estab- 
lished itself as the chief stock 
market on the African conti- 
nent outside South Africa, with 
a market capitalisation of some 
$5bn. 

The reform, approved in Sep- 
tember 1993 and still in the 
process of being implemented, 
is based on the current French 
system. 

Like the French Societe des 
Bourses Franceses, which is 
providing advice, it involves 
converting the market into a 
limited company in which the 
stockbrokers are shareholders. 

Among its aims are better 
company information, more 


David White finds that an old-fashioned clubbable place has been transformed in two years 


Africa’s second biggest stock market 


protection for investors and a 
broader range of financial 
instruments, ft brings in a new 
supervisory body, the obscure- 
ly-named Conseil D&mtologi- 
que des Valeurs Mobilises. 


Up to 

now. Morocc. 

CFG 25-share Index 

End-year change over 

previous 12 months 

1988 

. +29.15% 

1989 

+26.50% 

1990 

+39.45% 

1991 

+29.84% 

1992 

+ 2.35% 

1993 

+25.65% 


businesses have relied on the 
banking system rather than 
the share and bond markets to 
provide funds. Up to 1991, most 
of the activity on the bourse 
was in government bonds. 
Since then, however, equities 
have taken over and now 


account for 95 per cent of 
trading. 

Interest picked up last year 
with a series of share offerings 
- something not seen in Casa- 
blanca for a long time. The 

starting point was an offering 

of shares in the family-held 
Wafabank in December 1990, 

Foreign interest awakened in 
the form of US and UK-based 
portfolio managers specialising 
in emerging markets. These 
funds continue to dominate 
foreign investment in the mar- 
ket, with little showing from 
continental Europe. Their 
increasing involvement in the 
Casablanca market reflects an 
improved perception generally 
of the Moroccan economy, now 
that the IMF-led adjustment of 
the 1980s is completed and the 
country has resumed repaying 
its debts after a series of 
rescheduling agreements. 

In the past 12 months, some 
92 00m of foreign money has 


THE JEWISH COMMUNITY 


Protection by 
the king 


tus at the time In all Muslim 
states. 

The Koran clearly states 
that non-Muslims are to be 
humbled. In fee imperial cities 
of Morocco this injunction was ' 
respected for many centuries. 
The sumptuary laws were gen- 
erally enforced. In addition to 
distinguishing garments and 
restrictions on mounts, Jews 
had to walk barefoot in some 
towns, in others only when 
passing in front of mosques. 
They were often forced to do 
odious tasks as corvde labour- 
ers. 

In the 16th century Leo Afri- 
canus, the travel writer, bears 
ample witness to the contempt 
in which Jews in the cities 
were generally held. It would 
be wrong, however, to con- 
clude that they suffered more 
than the Christians and much 
more than the rest of the popu- 
lation - most ordinary citizens 
were frequent victims of pil- 
lage and rapine. 

However, as elsewhere in 
north Africa, there is no obses- 
sion with the Jews comparable 
to that found in medieval 
European literature, nor has 
there ever been the persecu- 
tion seen in Europe in modem 
times. Most traditional Moroc- 
can stereotypes of Jews may 
have been negative, but they 
were also peripheral 

The mellahs, or Jewish ghet- 
tos. were usually built next to 
royal palaces to make them 
easier to protect and the sul- 
tans frequently turned to the 
Jewish community to help 
raise fends for projects or to 
negotiate treaties wife foreign 
powers. This role as “tujjar a! 
sultan" was a corollary of fee 
knowledge of foreign lan- 


guages that many Jews had 
and their network of relations 
in the wider world. Such links 
were of particular importance 
in a country which for centu- 
ries turned its back on the 
Holy See and forced the 
ambassadors of foreign powers 
to reside in the port of Tan- 
giers. on fee strait of Gibral- 
tar, summoning them to the 
courts in Fez or Marrakesh 
only when their presence was 
required. 

King Mohammed V, father 
of the present monarch, 
refused to give the Vichy 
authorities a census list of 
Jews during the second world 
war. He ensured that in those 
difficult years his Jewish sub- 
jects did not go unprotected. 
After independence, for a brief 
while the government boasted 
a Jewish minister. That is true 
again today, since the appoint- 
ment nearly two years ago of 
Mr Serge Berdqjo, who heads 
the Jewish community in 
Morocco, as minister of tour- 
ism. 

Other Jews play an impor- 
tant role, none more so that 
Mr Andre Azoulay. whose 
career includes co-founding 
the newspaper Maroc Informa- 
tion after independence in 
1956 (it was closed by the 
authorities three years later), 
and a long spell in a senior 
position at Banque Paribas in 
Paris. 

He was fee founder of “Iden- 
tity and Dialogue”, a group of 
intellectuals which did much 
in the 1970s to bring together 
Jews of Moroccan origin who 
had emigrated to France, Can- 
ada and Israel, fens initiating 
better understanding of the 
2,000-year history of the 


dull 


BMCI 


Art'vCJr-ivLt.-iS- 


mm 


International business requires technical skills and specialists. This level 
of commitment and experience enables fee Banque Marocaine pour ie 
Commerce et ('Industrie to provide a range of services that heip its 
clients to cope wife complex cross-border transactions. 


Being part of the extensive network of group BNP established in more 
than 80 countries, BMCI is very attractive in doing business all over the 
world. 


Besides the three subsidiary companies (leasing, domestic financing, 
participations) BMCI has also a national network of 100 branches wife 
1 500 professional employees, offering daily, high quality services to our 
customers and contributing to fee development of our country. 



come onto the market, accord- 
ing to Mr Douiri, about 40 per 
cent of total volume. He 
expects fee foreign inflow to 
reach 9500m next year. 

Trading volume increased 

362 per cent last year to 
Dh2.44bn by CFG’s calculation 
(the figure differs from fee 
turnover total published by tbe 
bourse, which includes the sep- 
arate figures for purchases and 
sales). Volume this year is 
already well past 1993's full- 
year total. Market capitalisa- 
tion, again using CFG’s calcu- 
lation. showed an increase of 
44 per cent to Dh32J5bn at the 
end of the year, three times fee 
level of 1990. (This figure 
reflects the value of the whole 
capital of quoted companies, 
whereas the bourse uses a 
smaller figure based cm share- 
holdings placed on the mar- 
ket.) Prices last year rose by 26 
per cent, and had already 
exceeded that rate of increase 


Casablanca stodc market (figures in mlHions of dirhams) 



1989 

1960 

1991 

1992 

1993 

Turnover (purchases and sales] 

Capitafisation of shares traded - 

672 

5,043 

1,806 

7,768 

1.156 

12,449 

1,052 

16,975 

4,870 

25,993 

General Index 

122.65 

158.68 

161.09 

201.88 

256.07 

Number of quoted companies 

71 

69 

68 

68 

65 


Source: Bourse des Valeurs de Casablanca 


by mid-October this year. 

The boost in activity has 
been greatly helped by share 
placements made by the state 
as part of privatisation deals, 
starting with the CTM trans- 
port company in June last year 
and following by the Cior 
cement concern. Both were 
heavily oversubscribed. 

In addition, there have been 
private sector capital increases 
- notably by Omnium Nord 
Africain (ONA), the country’s 
largest company . Its Uhl£bn 


issue of common stock in May 
this year was fee biggest oper- 
ation ever made on fee bourse 
by an Industrial group. ONA is 
a wide-ranging conglomerate 
based largely on agribusiness 
but wife interests ranging 
from a television channel to 
car The king an 18 
per cent stake. (It is somehow 
typical of Morocco that an 
uninformed outsider could 
read fee whole of the 100 -page 
prospectus without becoming 
aware of this.) 


Another issue is awaited 
from General Tire of Morocco, 
half-controlled by Germany's 
Continental group. 

More shar es will come onto 
the market in the next few 
weeks and months as the 
government completes its 
initial list of privatisations. 
This will include 16 per cent of 
the shares of the holding 
company Socifitfe Nationale 
d’lnvestissement, which was 
fee best-performing stock on 
the market last year, wife a 


171 per cent price merraw. 

Tbe sell-offs have also played 
a role in increasing public 
awareness about the market 
through full-page press adver- 
tisements. and in bringing in 
new investors. Stockbrokers 
believe the market can absorb 
all the privatisation issues as 
long as Moroccan residents 
continue to be debarred from 
investing in capital markets 
abroad. 

There Is also hope that fee 
stock market reforms could 
lead Moroccan emigrants - 
there are some 800.000 In 
France alone ~ to channel a 
large part of their money 
transfers into industrial invest- 
ments instead of into real 
estate. 

The first significant involve- 
ment of Moroccan households 
as investors, in a market over- 
whelmingly dominated up to 
now by institutions, is expec- 
ted to come with fee launching 
of the mutual funds in the next 
two months. These will be 
open to foreign investors but 
are geared mainly to tapping 
domestic savings. 

Mr Douiri says mutual funds 
could bring in $3G0m. as a 
“conservative" estimate, in tbe 
first year. 


Moroccan Jewish community. 

Since 1991 Mr Azoulay has 
been King Hassan’s adviser for 
economic and fmawiai affairs. 
Born in Essaonlra, the port 
town from which fee family of 
Lord Hore-Belisha, the British 
politician, originated, Mr 
Azoulay has acted as the 
king's “sherpa" for the confer- 
ence which, later this month, 
will bring together Mr Itzhak 
Babin, the Israeli prime minis- 
ter: Mr Yasser Arafat, head of 
the Palestinian authority and 
hundreds of western and Arab 
businessmen. 

From “tnjjar al sultan” to 
“sherpa", the connection is 
quite obvious, as trade links 
are publicly established 
between Israel and Morocco 
instead of the discreet bonds 
that have existed for many 
years. 

The extraordinary diversity 
of Jewish life that existed in 
Morocco for centuries, with 
Jewish communities differing 
among themselves even more 
than fee Muslims, may never 
return. The spectrum ranged 
from the citizens of a coastal 
town who benefited from fee 
protection of a foreign power 
to Berber-speaking Jewish cob- 
blers settled in fee midst of a 
dissident Berber tribe, from 
fee prestigious descendants of 
re fugees from Spain to inhab- 
itants of mellahs in remote 
towns of the Berber heartland 
of Morocco in which cfaieftan- 
cies were elective. 

Important Israeli business- 
men, such as Mr Amiran 
Sivan, president of Bank 
Hapoalim; Mr Eytan CMchin- 
ski, president of Koor, Israeli’s 
leading industrial group; Mr 
Michael Freedman, president 
of the Dan hotel chain and Mr 
Itzhak Lendsmann. president 
of Tnuva, one of Israel's larg- 
est dairy producers, have 
started to pay visits to 
Morocco to discuss trade and 
investment opportunities. Mr 
Raphael Edery, fee vice-presl- 1 
dent of tbe Knesset and I 
Labour MP, is another 
recently visitor. 

The Omnium Nord Africain, 
Morocco's largest private 
group which is run by Mr 
Fouad Filali, the king's 
son-in-law and son of the 
prime minister, has set up 
Salam 2000 wife fee Spanish 
Banesto Bank. Koor and the 
Palestinian national fund. The 
group has a capital of US$60m 
and aims to invest in the Pal- 
estinian homeland. 

Israeli irrigation specialists 
are already working in 
southern Morocco and 10,000 
Israelis of Moroccan origin 
visit fee kingdom every year. 
Direct air links are expected to 
follow soon. 

Whatever the fu ture holds, 
the 10 years since Mr Babin 
came secretly to Morocco to 
visit the king and the confer- 
ence now being held in Casa- 
blanca have added an extraor- 
dinary dimension to nearly 

2,000 years of relations 
between Jews and the Moroc- 
can people. 


AGRICULTURE 


Gatt deal could hit exports 


Francis Ghiles 


The Gatt agreement signed last 
April in fee southern Moroc- 
can city of Marrakesh could, 
paradoxically, cost the king- 
dom as much as $700m in lost 
exports. 

Exports of farm products, 
notably citrus, tomatoes, pota- 
toes and cut flowers would be 
hit. A confidential report 
drafted last January by the 
Moroccan ministry of agricul- 
ture puts export losses in the 
farm sector at DhSOOm. a figure 
which was confirmed a month 
ago by a paper on “the Uru- 
guay Round and its effects on 
North Africa", presented at the 
annual conference of the 
French Association of Eco- 
nomic S cience in Paris. 

The reason for this state of 
affairs can be traced to the 
strategy adopted by Morocco in 
the run-up to the Gatt agree- 
ment. The kingdom's farm pro- 
duce has, since the first agree- 
ment signed with the 
European Union in 1967, 
enjoyed preferential access to 
European markets. Lower 
European import duties are 
charged on a range of produce 
exported by Morocco than on 
similar produce imported from 
countries which have not 
signed a partnership agree- 
ment with the EU. 

Preferential access was con- 
firmed in fee 1980s and was 
seen as a form of compensation 
for the trade diversion which 
Morocco was bound to suffer 
because of the access of Spain 
and Portugal to fee EU in 1986. 
Spain’s accession, in particu- 
lar, gave such produce as cit- 
rus and tomatoes from the Ibe- 
rian Peninsula much easier 
access to the markets of north- 
ern Europe. The EU granted 
Morocco quotas to help it over- 
come this. 

The new Gatt agreement, by 
changing fee pattern of Euro- 
pean protection, technically 
forced the EU and Morocco to 
renegotiate their previous 
agreement Morocco’s strategy 
during the Uruguay Round 
was to avoid including multi- 
lateral concessions on Mediter- 
ranean fruit and vegetables In 
the broader discussion in order 
to prevent the preferential 
access its products enjoyed in 
fee European Union being 
granted to all parties. This 
would have encouraged new 
competitors to try their hands 
in EU markets. 

There was always a risk, 
however, that Morocco’s strat- 
egy would backfire if only 
because of the reluctance of 
fee European Union to include 
Mediterranean produce in the 
free trade agreement which it 
was then In the process of 
negotiating with the kingdom. 

The Commission was under 
heavy pressure from S panish, 
Dutch and Belgian exporters of 
tomatoes, cut flowers and cit- 
rus fruit to use the Gatt negoti- 




26, Place Mohammed V, Casablanca Tel: 22.41.61/26.88.66 Fax: 26.57.57 




ation as a means of curtailing 
Moroccan access to EU mar- 
kets, to the detriment, in 
Moroccan eyes, of European 
consumers. Indeed, such 
Moroccan produce is of higher 
quality and som e what cheaper 
than its Dutch, Belgian and 
Spanish equivalents. Reducing 
Morocco's capacity to export 
and earn foreign income also 
rebounds on those European 
companies which export to fee 

kingdom MOTOCCO simpl y has 

fewer means to jay for new 
machinery and other goods, 
most of which it buys in 
Europe. 

The dile mma that Moroccan 
policy planners face today is 
all fee more acute because the 
country's forming sector is at a 
crossroads. The uncertainty 


from 1.1000 to 3,000 tonnes 
between 198849 and 1992-93. 
Overall this sector employs an 
estimated 300,000 people and 
14m Moroccans depend on it 
for their livelihoods. 

The potential adjustment costs 
if no agreement is brokered 
between Morocco and fee EU 
would be considerable, quite 
apart from lost exports. Writ- 
ing down capital would be 
expensive and technical know- 
how would be lost The social 
consequences in a country 
with severe unemployment 
would be heavy. 

A recent World Bank report 
on “agro-industrial develop- 
ment - constraints and oppor- 
tunities" estimates this sec- 
tor’s contribution to GDP at 5 
per cent, its contribution to 


The preferential treatment that Morocco’s 
farm exports have enjoyed will be eroded 


created by recent events could 
have serious consequences, in 
particular that of holding back 
investment both by Moroccan 
nationals and by the many 
European companies which 
have set up joint ventures in 
fee farming sectors in recent 
years. 

A steady flow of investment, 
whose aim is to improve both 
the quantity and quality of 
what is produced, transported 
and marketed. Is crucial if 
Morocco wishes to maintain 
fee competitive edge many of 
its producers have gained in 
recent years. 

These producers are mindful 
of repeating the mistake they 
made a decade ago when they 
did little to improve quality in 
the citrus sector while Moroc- 
can exports were rising at a 
comfortable 5 per cent a year. 
Their complacency was rudely 
shaken when they realised, too 
late, that ahead of Joining the 
European Union, Spanish pro- 
ducers had massively extended 
fruit groves, replanted many 
trees and, in fee process, virtu- 
ally doubled their country’s 
production capacity. 

Moroccan exports of citrus, 
potatoes, tomatoes and cut 
flowers have been buoyant in 
recent years. Exports of toma- 
toes increased from 80,000 to 

138,000 tonnes in the five years 
to 1993 and those of cut flowers 


industrial GDP at 25-30 per 
cent and to exports at 16-20 per 
cent The value added of such 
exports has grown at -8-14 per 
cent annually in recent years. 
“The estimates are likely to 
understate fee contribution of 
agro-processing." the report 
notes. 

The options for Morocco are 
twofold. Either fee EU can find 
a way of maintaining some of 
the preferential treatment it 
has afforded to such imports or 
the Moroccans will have to 
make, in the words of one 
expert, “a huge reconversion 
towards processed products 
which, though they enjoy less 
value-added than fresh fruit 
and vegetable exports, are less 
politically sensitive in the 
European Union." 

More broadly, were Morocco 
to aim for self-sufficiency in 
cereals, edible oils and sugar, 
where domestic production 
respectively meets 40-70, 30-35 
and 70 per cent of domestic 
needs today, such a policy 
would come at a very high cost 
to consumers and the coun- 
try’s natural resource base, 
notably water. Indeed, periodic 
drought puts a premium on the 
use of water, which, according 
to the World Bank, is today 
only charged Dhl a cubic 
metre, a price which repre- 
sents 36 per cent of recovery 
costs. 


To date, the European Union 
has used its financial muscle 
essentially to extend aid to 
Morocco rather than to allow 
free trade. This “aid rather 
than trade" policy, which is 
part of the logic of the Com- 
mon Agricultural Policy, has 
the perverse effect of doing lit- 
tle to ensure long-term stabil- 
ity in a key southern partner 
of Europe. 

No-one in Morocco disputes 
that the kingdom itself must 
put its house in order. The 
same World Bank report points 
out that "despite significant 
efforts by several government 
agencies to ensure quality, 
these efforts are unco-ordi- 
nated and, at times, incoher- 
ent." Credit to agriculture is 
another constraint Short-term 
loans are available. 

However, the report says, 
“scarce long-term finance is 
rationed among enterprises via 
high collateral requirements 
and Iran guarantees. This pol- 
icy militates against newer and 
less-established enterprises. 
Even for those with access to 
formal credit,' they have to 
finance long-term investment 
with short-term loans, which 
increases their financial vul- 
nerability." The banks, as in 
other sectors of the economy, 
seldom seem to act as promot- 
ers of economic activity. 

In the past decade, Morocco 
has switched from an inward- 
oriented and regulated 
approach of its economy to an 
outward-looking policy which 
relies on market me chanisms 
New technology, marketing 
structures and consumer pref- 
erences worldwide, however, 
are forcing fee pace of change. 

Morocco's food processing 
industry is still In its infancy. 
The full integration of Spain 
and Portugal into the Euro- 
pean Union the year after next 
will inevitably erode some of 
fee preferential treatment its 
form exports have enjoyed. 

As fanning and food process- 
ing provide the livelihood of 
half the kingdom's 26m people, 
its well-being is a key to future 
social and political stability. In 
the eyes of Moroccans who 
have a stake in these matters, 
fee sooner the uncertainty in 
its relations with the European 
Union ends, the better. 


Francis Ghiles 


OFFICE FOR INDUSTRIAL DEVELOPMENT 


Public institution for studies, support, consulting 
and industrial partnership, entrusted with the task 
of undertaking all actions geared to the promotion 
and assistance, from the initiation of the 
project to its realization 


ST MRF * 

Manufacturing of diesel engines. 

60 cc engines and their parts and castings 
Capacity; 60 cc: 60,000 - Casting: 2^00 tons 
Diesel engines: 2,600 
ODTs share: 100% 


C3M* 

Manufacturing of lathes 
and Biilli«%g W jAliin «i 
Capacity; ISO ms nh i nea/yet 
ODrs share: 51-89<T 



ICOZ* 

Industrie Cotonnifere de Oued-Zem 
(Oned Zem Cotton Industries) 
Spinning of 100 PC combed cotton 
Capacity 76.000 spindles 
Production: 7,000 metric tons 
0DI*8 share: 94.49% 


SETAFIL* 

Scttat Filature 
Spi nnin g of cotton 
Capacity 2JZO0 metric tons 
OCX's share: 44.23* 

IFCs shore: 10% 

SOMED's shaer: 19.23'* 


1 * » Some GDI's companies under privatization program. For more information, plena,, contact ODI. 
ODL M rue Ghandi - PO Bax 211 - Babat -Morocco - Tel 70 84 60 - Telex 320 78 - Fa* 70 7095 




MM SS If 


- ■-!!*£’! 


\SA 1 
'1 \KR 


.'Mm 






FINANCIAL TIMES THURSDAY OCTOBER 27 1994 


MOROCCO 


P ower shortages are noth- 
ing new in Morocco. 
Nor, for that matter, are 
power cuts. Throughout the 
1980s, however, power cuts 
affected factories and were all 
but Invisible to the public at 
large. 

In the autumn of 1992 the 
cuts took a turn for the worse. 
The National Electricity Office 
(ONE), which has a monopoly 
of electricity generation, and 
the municipal distribution 
compani es (Regies) were forced 
to cut off customers, often 
entire industrial zones, and 
stop television programmes 
between 2pm and 6pm. Such 
cuts hit the country's indus- 
trial production and under- 
mined the arguments put for- 
ward by senior officials keen to 
attract foreign investment to 
the kingdom. 

The i mme diate cause of the 
cuts was a drought. Hydroelec- 
tricity usually accounts for 15 
per cent of all electricity in 
Morocco, but its share two 
years ago was cut to 4 per cent 
However, the root causes of 
the persistent shortages are 
more deep-seated. They include 
a substantial build-up of 
unpaid bills and debts through, 
out the sector; a lack of auton- 
omy from government minis- 
tries which discourages 
management initiative; a lack 
of co-ordination among the 
enterprises within the sector 
the absence of an economically 
sound approach to tariff regu- 
lation and finally the lack of a 


Francis Ghiles looks at the problems of the energy sector 

Shortages seem likely to persist 


clear legal code and regulatory 
system. 

The sheer size of unpaid bills 
underlines the problem. As of 
March 1993, ONE clients were 
approximately $500m in 
arrears. Of that amount the 
Regies owed ONE about two- 
thirds. In turn, the Regies were 
owed substantial amounts by 
their customers, mainly In the 
public sector. 

Though ONE has for 40 years 
had a monopoly on the produc- 
tion of electricity, it hag never 
been able to manage ggjgHng 
and potential demand, because 
of political interference. 

In particular, ONE has had 
no influence on price setting, 
tariffs and distribution. Tariffs 
do not properly reflect eco- 
nomic costs. This explains, for 
instance, why peak demand 
represents ISO per cent of base 
demand and lasts only five 
hours every day. Low tension 
electricity is sold more cheaply 
than high tension electricity, 
even though it is more expen- 
sive to produce. Industrial 
users subsidise domestic ones. 

One balf of all pur chas es of 
electricity are conducted 
through local Regies, which 
are jointly controlled by local 


authorities and local represen- 
tatives of the state. The results 
are predictable. Funds and 
appointments have long been 
mismanaged. In some areas of 
Morocco such as Tetuan ONE 
and local authorities competed 
to build power lines and then 
fought for clients who could 
not afford to plug into the 
available power because the 
cost of doing so was set so high 
by the local authorities. The 
drought was thus, in the words 
of one senior Moroccan official, 
"akin to knocking a paralytic 
to the ground”. 

The panic buying of nine gas 
turbines at a total cost of 
$300m has enabled ONE to pro- 
duce an extra 300 megawatts 
but running costs are three 
times those of a coal-fired 
power station. Gas turbines, 
designed to run on diesel for 
short periods, have been run- 
ning continuously. So there 
has been inadequate time to do 
daily maintenance or clean the 
residue of the heavy diesel fuel 
from the turbines which have 
sometimes broken down. 

Installing new capacity in a 
hurry may solve the problem 
in the short term but senior 
officials accept that it will do 


Comparative dally electric load curves 

Standardised charges 



T 234 5 S T 8 3 10 11 12 13 1 
Sauce Nsiontf Etoeocify Oflea How Of ths day 


2Q 21 22 23 24 


little to avoid shortages at a. 
later stage. Demand is growing 
at about 7 per cent per annum, 
but it must be reduced in a 
systematic way, notably by dis- 
couraging it at peak times 
through special tariffs, encour- 
aging energy efficiency and 
building new capacity. The 
constraints imposed in recent 
years on spending have pushed 
the government into looking, 
for the first time, at the idea of 
private investment in electric- 
ity generation. 

There are three keys to a 
successful policy apart from 


new men - the leadership of 
ONE was changed at a stroke 
last March. 

□ 1 Morocco must allow for a 
rise in demand for electricity 
and double its present generat- 
ing capacity to around 5,000 
megawatts by the year 2000. 

□ 2 ONE. which has a heavy 
public service obligation and is 
handicapped compared to 
potential private investors, 
must be allowed a freer band. 

□ 3 A clear legal code for regu- 
lating the sector and the pre- 
dictable and sound caucus of 
rules governing tariffs must be 


adopted, which win allow ONE 
to address the needs of a mod- 
em economy. 

There are three ways in 
which power generation can be 
increased, all of which are now 
being pursued. Tbe first is to 
sub-contract primary power 
generation to private compa- 
nies. This is being done at Jorf 
Lasfar, south of Casablanca, 
where tenders have gone out 
for the management of two 
existing coal fuelled stations 
which produce 600 megawatts 
and the building of two new 
ones which will produce an 
equivalent amount of electric- 
ity. Leading western groups 
such as ABB, AJBS-GE, Els, 
Endesa, National Power and 
Bechtel are competing for a 
contract which over a 10-year 
period is worth $1.4bn. 

The second source of energy 
will be the transit fee in gas 
that Morocco will collect from 
the Maghreb Europe Pipeline 
(GME) which will carry gas 
from Algeria to Spain and Por- 
tugal. Construction has just 
begun. Gas from this pipeline 
will fuel two combined cycle 
plants, due to be built in Keni- 
tra and Mohamedia, which will 
produce 300 megawatts each. 


Electricity interconnections 
with Algeria, which allow 
Morocco to purchase up to 150 
megawatts, already exist. By 
1996 the planned interconnec- 
tion with Spain will enable 
Morocco to purchase 300 mega- 
watts. a figure which will rise 
to 600 by the year 2000. 

Recasting the institutional 
framework is the third chal- 
lenge Morocco faces. Political 
involvement at all levels 
reduces management auton- 
omy and effectiveness. 

Some examples illustrate the 
problem. ONE’S investment 
plan is developed and financed 
in a way which reflects imme- 
diate problems facing the gov- 
ernment Financial constraints 
have led to a preference for 
bilateral aid financing rather 
than commercial credits, 
which in turn leads to delays 
in realising projects. 

ONE must pay import taxes 
which amount to 50 per cent of 
the import value of fuel; in 
Tunisia and the Iberian penin- 
sula such taxes amount to 1.5 
per cent or nothing respec- 
tively. Individual electricity 
boards have a social role, thus 
connecting customers is some- 
times driven by political and 


social pressures rather than by 
the pursuit of commercial gain. 

Privatising local boards 
could well provide an answer. 
Tariffs must reflect economic 
costs, be adjusted to inflation 
and not penalise industry. 
Two-part tariffs for low voltage 
must be introduced, and more 
sensitive tariffs for all custom- 
ers are a must. 

Such changes, some Moroc- 
cans argue, are difficult to 
introduce because of metering 
problems. All customers pay- 
ing a peak tariff would need a 
new meter. Also, there is the 
problem of explaining to cus- 
tomers why there is a peak tar- 
iff. 

Changing bulk supply tariffs 
will be difficult politically if it 
entails a change from the pre- 
vious "no win no lose" policy. 
It is, bowever. fair to point out 
that the crisis of 1992 opened 
people's eyes. Those now in 
charge of the sector - Mr 
Abdellatif Guerraoi at tbe Min- 
istry of Energy and Mines and 
Mr Driss Benhima, the new 
head of ONE - are able 
hands-on operators. 

They know, as do their col- 
leagues in government, that 
the number of households in 
the countryside which receive 
electricity must be pushed up 
above the current level of 30 
per cent and that efforts to pro- 
mote tbe activities of local 
entrepreneurs and attract for- 
eign investment will come to 
little if there is no power to 
back up such activities. 


* 




I mproving the management 
of its water resources Is one 
of the key challenges that 
Moroccan planners face over 
the next decade. Morocco, 
where per capita renewable 
water resources are estimated 
at 833 cubic metres, is cur- 
rently, in the jargon of special- 
ists, “water stressed". By the 
year 2020 per capita water 
resources are expected to be 
halved to 411 cubic metres. The 
country would then qualify as 
“chronically water stressed''. 

D rinking water reaches only 
14 per cent of the rural popula- 
tion, while resources in a num- 
ber of important water basins 
are being exhausted as the 
infrastructure deteriorates. But 
much has been achieved, in 
contrast to neighbouring 
Algeria. 

Perched on the north-west 
tip of Africa, Morocco is sub- 
ject to diverse climatic condi- 
tions. The port around Tangier 
and in the Rif mountain range 
is very Mediterranean, the 
south is quite Saharan and the 
western coastal plains are sub- 
ject to Atlantic influences. 

Average annual precipitation 
levels vary from 750mm in the 
north to below lOOmm in the 
south. Total rainfall averages 
150bn cubic metres a year, 
30bn of which replenish sur- 



WATER RESOURCES 


Consumers must pay more 


17 St 


20 : 

1890. ‘2020 Year 

Sauw World Bank 

face and ground water flows, 
the rest being lost In evapora- 
tion. Uneven geographical dis- 
tribution of resources is ram- 
pounded by uneven and erratic 
rainfalls. Morocco is suscepti- 
ble to Jong periods of drought. 

Half of Morocco's 26m people 
live on the land, and agricul- 
ture provides the livelihood to 
40 per cent of the economically 
active population, contributing 
around 17 per cent of gross 
domestic product. Excellent 


rainfall last winter explains 
the 11 per cent expected 
growth in GDP this year; 
drought more often than not 
results in a decline in GDP. 

Barely 14 per cent of coun- 
tryfolk have access to safe and 
reliable supplies of water, for 
which they pay up to 10 times 
as much as in town. Contami- 
nation of water resources 
accounts for half of aU ill- 
nesses in such areas. 

Agriculture is by far the 
largest user of water, account- 
ing for 85 per cent of mobilised 
resources, a figure which is 
projected to decline to 77 per 
cent by the year 2020. D rinkin g 
and industrial needs account 
for the balance. 

The greatest challenge 
the authorities is that of the 
supply and demand balances. 
Shortages are already evident 
in a number of river basins. 
Moroccan water resources are 
unevenly distributed between 
basins. Almost 50 per cent of 
total resources and 93 per cent 
of current regional surpluses 


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are concentrated in the Sebou 
and Oum Er Rabia basins. The 
Casablanca and Rabat-Sale 
metropolitan areas, which 
account for 25 per cent of all 
residential and industrial 
water demand today, already 
supplement scarce local 
resources with water imported 
from the Oum Er Rabia basin. 

Reallocating water resources 
from irrigation to higher value 
urban «ud industrial custom- 
ers without unnecessary hard- 
ship to deprived rural commu- 
nities is a major Issue. Such 
transfers are inevitable but 
they need not penalise fanning 
if the efficiency of water use in 
agriculture is increased. To 
give but one example, a 20 per 
cent reduction in water 
requirements in the Doukkala 

Universities 


Message 
of the 
Prophet 

In 1990 an oil spillage off the 
Atlantic coast threatened to 
cause great damage. King Fahd 
of Saudia Arabia offered King 
Hassan of Morocco 850m to 
help contain it In the event 
strong winds averted a catas- 
trophe, writes Francis Ghiles. 

However, King Hassan used 
the money to realise a dream, 
creating a university Inspired 
by the Anglo-Saxon education 
system instead of the French 
one, which governs all the 
other universities in Morocco. 

Four years later, a new cam- 
pus has risen on the outskirts 
of Ifrane, a mountain station 
south of the old imperial city 
of Fez in Northern Morocco. 

The first students out of a 
total which will rise to 3,500 
started to attend classes in 
September 1994. They are all 
post-graduates in three facul- 
ties - business administration, 
h umani ties and social sciences, 
sciences and ongfrwwing 

It -is a private university, 
where all students pay fees. 
Donations have enabled schol- 
arships to be offered, as the 
king does not want the univer- 
sity to draw its students exclu- 
sively from the wealthy Moroc- 
can bourgeoisie. 

“A1 Khawayn" (the two 
brothers) is a revolutionary 
concept for Morocco. It aims to 
renew Its cultural past and is 
part of the king’s aim of tying 
the country to Europe while 
promoting links between Arab 
states. Palestinians and IsraeL 
The campus is built around a 
mosque, but boasts a syna- 
gogue and a church. 

The Moroccans have been 
advised by the Texas Interna- 
tional Education Consortium, 
which regrouped the 32 state 
uni7ersrti£& of Texas, on the 
curriculum. The degrees will 
be recognised in the US. 

The university has three 
research centres devoted to 
Islami c culture and the arts, 
natural resources and strategic 
studies. Researchers, drawn 
from all over the world, will 
form part of the teaching staff. 

The "A1 Khawayn" aims to 
encourage serious debate on 
Teiamip- values and how they 
relate to the modem world. Its 
success would show that Islam 
can modernise the message of 
the Prophet and avoid the nar- 
row interpretation of the 
Koran promoted by many fun- 
damentalist movements today. 


irrigation perimeter would 
postpone the need for alterna- 
tive resources for the Casa- 
blanca region until 2050. 

The creation of tradeable 
water rights in these circum- 
stances may provide a solution 
but it leads to some interesting 
questions. Could Casablanca 
contribute to improving effi- 
ciency in the Doukkala perime- 
ter in order to be guaranteed 
secure water supplies at a cost 
below such expensive alterna- 
tives as desalination? 

Another aspect of the chal- 
lenge is that, faced with higher 
water charges, farmers may be 
expected to substitute higher 
value and less water-intensive 
crops. However the market 
opportunities for these crops 
may be limited, thus raising 


doubts as to their viability in 
some irrigated areas. 

A deterioration in the qual- 
ity of water constitutes 
another challenge. Water pollu- 
tion from domestic, industrial 
and agricultural sources is 
approaching critical levels in 
the two most Important river 
basins. Drinking water sup- 
plies have been suspended sev- 
eral times in tbe Sebou basin 
and quality problems have 
occurred in Oum Er Rabia. 

The constraints on govern- 
ment spending argue in favour 
of shifting tbe costs burden 
more rapidly towards custom- 
ers. Until recently, the state 
budgets financed virtually all 
water investment. Senior 
Moroccans accept this Is no 
longer possible. 


Urban tariffs today cover 
operational and maintenance 
charges for water supplies and 
sewage, as well as the financial 
charges associated with the 
treatment, pumping and distri- 
bution of water. But they take 
no account Of ma rginal costs, 
most notably the construction 
of dams. An even greater 
imbalance lies in the difference 
between water tariffs in towns 
and irrigation, the latter repre- 
senting one fifth of the former. 

The deterioration of the 
infrastructure is yet another 
problem and the return from 
existing investment could be 
significantly raised by 
improved maintenance. The 
silting up of dams is a major 
concern, having already dimin- 
ished available capacity by as 
much as one quarter. Convey- 
ance losses in irrigation canals 
are believed to be as high as 25 
per cent Giving greater weight 
to efficiency and pricing crite- 
ria can thus be expected to 
yield considerable benefits. 

Government spending on 


mobilising and distributing 
water is projected to rise by 
350 per cent to 2 per cent of 
GDP by' the end of the decade. 

Some specialists question 
whether too many resources 
are being devoted to the expan- 
sion of large-scale irrigation. 
Some 80 per cent of the $4.8bn 
National Irrigation Plan bud- 
get up to tbe end of the cen- 
tury is earmarked for such 
expansion and a further $lbn 
to rehabilitating existing irri- 
gation systems. 

World Bank experts who 
have been actively involved in 
financing the development of 
Morocco's water resources 
believe that it remains to be 
demonstrated that the pro- 
posed expansion of irrigated 
areas will prove competitive in 
terms of economic, social and 
environmental returns on 
investment They believe the 
balance of investment should 
be shifted in favour of rehabil- 
itating existing investments. 

Francis Ghiles 



'Liuafl j A uaUJt CL-jJ jjJU k-xijJud 

SOCIETE MAROCAINE D’ETUDES SPECIALES ET INDUSTR1ELLES 
MOROCCAN COMPANY OF SPECIAL AND INDUSTRIAL STUDIES 


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and solid products 

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/ 






FINANCIAL TIMES 


THURSDAY OCTOBER 


27 1994 


COMMODITIES AND AGRICULTURE 


Metal profits down for fifth year 


By Kenneth Gooding 


The financial performance of 
the western world's non-fer- 
rous minerals producers deteri- 
orated for the fifth successive 
year in 1993, according to the 
annual analysis of nearly 200 
companies by the Metals & 
Minerals Research Services 
consultancy group. 

An improvement in the for- 
tunes of precious metals pro- 
ducers failed to compensate for 
further deterioration in those 
of the base metals businesses, 
it suggests. 

On two key ratios the indus- 
try recorded its worst result 
since MMRS started collecting 
these statistics lo years ago; 
operating profit margins were 
only 5.8 per cent and the aver- 
age return on capital employed 
was down to 4.8 per cent. 

On most other ratios last 
year’s performance was the 
worst since 1982. 

According to MMRS, the 
industry's aggregate operating 
profit has fallen by 71 per cent 
since 1989. Nickel producers 


Aggregate Profit & Loss Account of Sample 

(In mBIlona of US doBars) 

1981 1992 


Operating revenue 
Operating costs 


167,009 

(153,974) 


166,524 148,268 

(154,945} (139,728) 


Operating profit 
Other Income 

Net Merest payments 

Pre-tax profit 

Mining and Income taxes 


Profit after tax 


Attributable to minorities 
Share of net associate Incomes 
Preferred dividends 


Earned for ordinary shares 
Extraordinary post-tax losses 


Earned tor ordinary shares 
after extraordi na ry losses 


last year joined lead/zinc 
companies in recording an 
operating loss while the slide 
for aluminium producers hag 
also been greater than the 
average. 


However. MMRS says a clear 
ranking emerged in the miner- 
als industry last year, with 
gold and platinum producers 
leading profitability on all 
measures; copper and diversi- 


fied producers doing best 

am ring hasp metals; fl htttrlnhrm 

ranking sixth-best (or fourth- 
worst) overall and nickel, lead/ 
zinc and silver companies gen- 
erally in loss. 

The analysis suggests that 
the industry's operating reve- 
nue fell last year from S166bn 
to $M8bn but its net earnings, 
after all charges, rose from 
$42Sm to $673m. Nevertheless, 
this bottom line was the worst 
in real terms since a loss was 
registered in 1982. 

MMRS says the one bright 
spot in Its analysis is gearing. 
“ Although high for a number 
of individual producers and 
sectors, this ended last year lit- 
tle different from historical 
norms,” it say s. 

“T in like in the early 1980s, 
debt has been kept under con- 
trol in title recent market down- 
turn. New issues of equity 
have also helped." 


Recovery in iron ore prices 
forecast as steel output surges 


By Frances W3 Haros in Geneva 


1994 World Minerals Industry 
Financial Review; £850 from 
MMRS, 2 Henry Street. Bath. 
Avon, BA1 UT. OK 


Aluminium chief sees bridge to prosperity 


A recovery in iron ore prices, 
which have been severely 
depressed for the past three 
years, now seems imminent, 
according to government and 
industry experts meeting in 
Geneva to review iron ore mar- 
ket developments. 

The experts are predicting 
an upsurge in global steel pro- 
duction and consequently in 
the world market for iron ore 
next year, following strong 
demand hi 1994. World iron ore 
exports are expected this year 
to rise by more than last year's 
8 per cent, when they totalled 
398m tonnes. 

This has not been enough so 
for to prevent another collapse 
in iron ore prices, by nearly 20 
per cent over 1993-94. Prices 
remain around 25-30 per cent 
below the 1991 level, depress- 
ing' export earnings despite 
higher shipments. In 1993 iron 
ore trade transactions 
amounted to $7.55bn, the low- 
est value since 1989, and in 
1994 too lower prices are expec- 


ted to offset increased exports. 

In 1995. however, the market 
is expected to improve suffi- 
ciently to push prices up. Steel 
production is increasing all 
over the world, except in the 
Commonwealth of Independent 
States and Africa, scrap prices 
are soaring and demand for 
primary iron products is rising. 
The world supply of pellets and 
lamps remains ti ght 

The United Nations Confer- 
ence on Trade and Develop- 
ment, sponsor of the three-day 
meeting that ended yesterday, 
says low prices have not been 
conducive to new greenfield 
projects but companies axe 
continuing to invest in replace- 
ment and expanded capacity to 
assure long-term supply. 

Four major projects have 
started this year, in Maurita- 
nia, Brazil, Australia and 
Venezuela. Other projects are 
under way in Australia, Chile, 

China, Fniha and Sweden. 

Meanwhile, ownership con- 
centration in the iron ore 
industry is increasing, accord- 
ing to Mr Magnus Ericsson, of 


Sweden's Raw Materials 
Group. He told the meeting 
that the production share of 
the three biggest iron ore com- 
panies bad risen from 19 per 
cent in 1975 to 34 per cent in 
1993. da Vale do Rio Doce, a 
state-owned Brazilian pro- 
ducer, leads the field, followed 
by Broken Hill of Australia 
and Britain's RTZ. 

Mr Ericsson said this defied 
the trend to deconcentration in 
most of the renin non-ferrcns 
minerals and metals markets. 
He attributed the difference to 
the huge of the iron ore 
industry and the potential for 
scale economies, the presence 
of big deposits of high-grade 
ores and steep cost barriers to 
entry. 

Mr Ericsson noted that steel 
companies had weakened their 
grip on the iron ore industry, 
with only four steel companies 
among the top tan producers. 
The top 20 iron ore mining 
companies now included three 
Chinese, three Russian, two 
Ukrainian and one wawikh, he 
pointed out 


Parisian 

exchange 

studying 

wheat 

futures 


By Andrew Jack In Paris 


MARKET REPORT 


By Kenneth Gooding, Mining 
Correspondent, in Atlanta 


More than 200,000 bridges in 
the US are structurally defi- 
cient or functionally obsolete. 
If aluminium was specified in 
only one-third of all bridge 
repair or replacement projects, 
at least an extra 400m lb a year 
of the metal would be required. 

Mr Richard Holder, chair- 
man of Reynolds Metals, the 
world's third largest alumin- 
ium company, gave these sta- 
tistics yesterday in an upbeat 
presentation about potential 
future demand for the mate- 
rial 

He suggested that the infra- 
structure market offered the 
industry tremendous potential 
because many countries were 
faced with crumbling bridges 
and highways, leaking water 
and sewer lines and ageing 
mass transit facilities. Mean- 
while, many developing coun- 
tries were now creating infra- 
structure systems. 


Alusaf of South Africa said yesterday it would consider further 
expansion if the metal’s present price recovery was s u stained, 
but only once its Hillside project was up and running, reports 
Reuters from Johannesburg. 

The company was due to start bringing on stream an extra 
466,000 tonnes of aluminium from mid- 1995 at Hillside, but 
start-up had been brought forward by five months and there was 
no room to accelerate it farther, a company official said as 
aluminium climbed to a four-year high of more than $L800 a 
tonne on the London Metal Exchange. 

However, if the price recovery was sustained Alusaf would 
• accelerate its long-term plans to upgrade potrooms B and C at its 
existing Bayside smelter. 

That could produce an extra 40,000 tonnes of al umini um a 
year over current annnal output of 170,000 tonnes at Bayside. 


Speaking at Alumitech 94 in 
Atlanta, the biggest exhibition 
and conference about alumin- 
ium ever organised by the 
industry, Mr Holder also 
predicted that the use of 
aluminium in North American 
cars would grow by another 
two-thirds by the year 
2000. 

Having risen by 23 per rant 
last year to 2101b on average 
per car, it was expected to rise 


to 3501b by the end of the 
decade. “That projection may 
even be conservative because 
it does not count an a lot of 
body sheet applications which 
are looking more abundant by 
the day,” he added. 

Mr Holder said there were 
tremendous prospects for alu- 
minium beverage mm outside 
the US, a country where the 
metal now had 98 per emit of 
the market and where ship- 


ments this year would total 
more than lOObn cans for file 
first time. 

"Wi thin the next 25 years, 
the al uminium beverage can 
will have as great a presence 
within Latin America, the Mid- 
dle East and eastern Europe as 
it has today in the US,” he 
said. 

Reynolds predicted a 65 per 
cent growth in the global alu- 
minium beverage can market 
by the year 2000. 

Alumitech, sponsored by the 
US Aluminium Association, is 
designed to provide a forum for 
exchanges of information on 
the most important tw-hniwii 
environmental and market 
place issues faring the indus- 
try and has attract e d visitors 
from 30 countries to hear 120 
speakers at 50 discussion ses- 
sions. 

It takes place, as Mr Holder 
pointed out, when the alumin- 
ium industry is turning a cor- 
ner from the most difficult four 
years in its history. 


Copper soars 


COPPER prices soared at the 
London Metal Exchange yes- 
terday as US investment funds 
took up the baton from a 
strong European market prof- 
it-taking set in, as expected, 
but the three months delivery 
price still ended $49 up at 
$2,635 a tonne. Earlier it had 
readied a 4-year high of $2j650. 

Three months ALUMINIUM 
moved above $1,800 a tonne 
like a hot knife through butter 
and hit $1335 before specula- 
tors began to cash in profits. It 
ended at $1320, up $58. 

The investment funds also 
found time to push London 
white SUGAR futures to 1994 
highs, despite a dearth of fun- 
damental news. The funds 
wanted to push the market 
above resistance levels in order 
to set up potential profits, trad- 
ers explained. 


‘Super rice’ could boost 
harvests by 25 per cent 


By Deborah Hargreaves 


Compiled from Reuters 


A new breed of "super rice” 
that can produce 25 per cent 
more grain on the same 
amount of land ami help f ee d 
an additional 450m people a 
year has been developed by sci- 
entists at the International 
Rice Research Institute, the 
World Bank announces this 
week. 

The new strain is capable of 
yielding 5 trainee per acre on 
irrigated land compared with 4 
tnnnpfi for pristtog varieties. If 
widely planted, the World 
Bank estimates that the new 
breed of rice could produce 
100m tonnes more each year 
than is now grown. 

This extra rice could help 
feed a population boom expec- 
ted over the next 30 years 
when demand for rice is expec- 
ted to increase by 70 per cent 


COMMODITIES PRICES 


BASE METALS 


LONDON METAL EXCHANGE 

prices from Amalgamated Metal Trading) 

■ ALUMINIUM. 99.7 PURITY (5 per tonne) 


Precious Metals continued 

■ GOLD COMEX (100 Troy c&4 S/troy cej 


GRAINS AND OIL SEEDS 

■ Wf*AT LCE (E par mnna) 


SOFTS 

■ COCOA LCE CE/tanne) 


MEAT AND LIVESTOCK 

■ LIVE CATTLE CME HUjjOCKja; C*nta/tog) 


Cash 

Close 1794-5 1817-8 

Previous 17163-7.5 17*1-2 

Wgh/toW 1602 183GA7B5 

AM Official 1804-5 1827-6 

Kerb dose 1818-8 

Open kn. 256,842 

Teaal daly turnover 75.7*0 

■ ALUMINIUM ALLOY (5 per tonne} 

Close 1750-60 1785-95 

Previous 1720-5 1750-5 

HgWtow 180571780 

AM Official 1785-75 IBOO-IO 

Kerb dose 1796-805 

Open InL 2/62 

Total daily turnover 273 

■ LEAP (5 per tonne) 

Close 6505-7.5 6705-15 

Previous 644.5-55 659-85 

High/taw 674/669 

AM Official 655-6 669-95 

Kert> dose 871-2 

Open lot 41331 

Total dally turnover 10,155 

■ NICKEL g per tonne) 

Close 7205-15 7320-25 

Previous 6945-55 7055-60 

Htgh/Knv 7180 7370/7220 

AM Official 7190-5 7310-15 

Kerti dose 7335-40 

Open InL 66.861 

Total aaiy turnover 16.985 

■ TIN (S per tome) 


3 mtft* 

1817- 8 
1741-2 

183071785 

1827-8 

1818- 9 


1750-60 1785-95 

1720-5 1750-5 

1805/1780 
1765-75 1 B00-10 

1795-805 

2/62 



San 

Days 


tote 



Salt 

AWa 



to- 



Salt 

■tar's 


toan 


- 

San toy** 

to« 



priea 

cfcaaga 


tea to 

VoL 


priea 

■tonga 

Bgh 

law 

tal 

Vta 


pitas 1 

iliaiyi 

won 

Low tat 

M 


priea eteaga Mgb Law 

tat 

• Vet 

Oct 

3893 

-81 

3893 

3893 38 

8 

Hear 

10636 

+855 

10530 

10460 

1,150 

118 

Daa 

849 

+12 

955 

936 21302 

987 

Dae 

W7W . wire 80350 

29 

38 

llov 

3883 


- 

- 

» 

Jan 

107.15 

+060 

10730 10865 

1.9* 

39 

Mw 

980 

+10 

900 

969 42320 

1,788 

Fab 

88300 -0375 B&575 68375 30391 

7.704 

toe 

3913 

-02 

3813 

3892 83,136 

15/96 

MW 

10925 

+030 

10325 

10930 

1378 

8 

MW 

991 

+10 

995 

082 14.424 

103 

Apr 

08325 - 88350 88775 20357 

4,162 

ftb 

3943 

-02 

3943 

382.7 19329 

1381 

Mar 

111.15 

+035 

111.15 

11050 

1688 

32 

Jri 

1005 

+10 

1006 

996 6*49 

56 

JB 

68475 +8100 65300 88300 13303 

235B 

Hr 

3981 

-02 

3880 

3989 8139 

233 

M 

11330 

+075 

- 

• 

200 

• 

Sap 

1018 

+10 

1020 

1020 12.468 

67 

Aag 

64475 +8DSD 64350 64400 

8085 

568 

Jto 

4013 

-02 

401.7 

4082 9,708 

389 

to 

9820 

+005 

9835 

9835 

40 

• 

Dae 

1032 

+6 

- 

- 8615 

- 

Oct 

68300 +0350 *350 

1361 

47 

Total 




157354 17355 

Total 





8802 

282 

Total 




111.1Z7 3309 

Tow 


0WM 18281 

■ PLATINUM NYMEX {50 Troy oz.; S/troy azj 

■ WHEAT CBT (53QCBaj min; centa/BOlb bushel) 

■ COCOA CSCE flO tormoe: Stomas) 


■ LIVE HOQS CME (40300bKcenaAb4 


Oct 

4273 

+23 

4253 

4253 40 

3 

Doe 

401/0 

+1/0 

404/4 

387/2 38430 10322 

Dae 

1335 

+15 

1349 

1310 27,390 3327 

Dae 

33.750 +8350 33325 33250 

21 

9 

Jan 

4273 

+13 

427.4 

4233 28387 

1.450 

Mw 

411/3 

+08 

414/0 

40774 23375 

3360 

Mw 

1381 

+1B 

1391 

1355 22362 

1284 

Fab 

38900 +0350 38975 38575 18052 

4,182 

Aw 

4313 

+13 

4313 

4293 3348 

110 


385/4 

- 

388A 

383/0 

4397 

414 

Mar 

1411 

+18 

1419 

1405 8361 

122 

Apr 

37325 +8300 37.150 38350 

7/41 

1/15 

JM 

4363 

+13 


- 1345 

102 

Jrt 

352/2 

-OM 

354/4 

351/2 

9301 

836 

Jri 

1437 

+17 

1418 

1418 3327 

. 

J— 

42275 +8175 42325 41300 

4356 

666 

Oct 

4403 

+1.6 

- 

- 332 

50 

Sap 

358/4 

- 

357/0 

366/4 

232 

1 

am 

1484 

+17 

1442 

1448 1J82 

61 

Ate 

41.750 +8050 41.750 41300 

1371 

216 

Jaa 

4433 

+13 

- 

2 

• 

Dae 

3650 

>02 

3600 

3840 

13B 

20 

Dec 

1491 

+17 

1470 

1470 4.935 

5 

Del 

31750 +8100 38350 38300 

339 

48 

Tote 




284B4 

1398 

Total 





77204 18095 

ToW 




71,797 93C 

Tetri 


32341 

88<2 


■ PALLADIUM NYMEX (100 Troy oz^ S/troy caJj ■ MAIZE C8T (MOO bu mfcc cenra/56tt> taaheQ ■ COCOA (ICCO) (SOflVtonne) 


■ PORK BELLES CME (40JX)0K>e; centl/bs} 


Dec 158.15 *035 158.70 15750 4,322 

Mir 15945 +035 158.75 1929 1,732 

joe 18035 +035 - 378 

Total 8,433 


7320-25 

7055-60 

7370/7220 

7310-15 

7335-40 


5386 +84 - - 185 77 

5388 +92 . 

5412 +82 5420 531 H 73.144 10/01 

5438 +92 - - 60 9 

549.7 +82 6500 5408 18835 723 

5558 +88 5558 5468 4888 25 

111847 11,288 


273 

Dae 

2156 

167 

Mw 

228/B 

80 

Mar 

235/0 

480 

Jri 

241/0 

z.) 

Sri> 

24518 

77 

Dae 

Total 

2505 


a two 

Previous 
WgfvTow 
AM Official 
Kerb dose 
Open int. 

Total dairy turnover 


5660-70 5745-50 

5520-30 5606-10 

5830/5720 

5685-90 5770-5 

5780-70 

17.339 


■ ZINC, special high grade (S per tonne] 


ENERGY 

■ CRUDE Ott- NYMBt (42800 US gate. 

Sett Day* apt 

P»tae m a n ge ffigh law In 

Dec 1785 +037 1787 17801088 

Jan 1782 +021 1786 17.65 613 

M 1785 +027 1780 17.65 308 

Her 1781 +024 1783 1788 23,6 

Apr 17.78 +022 1785 1788 178 

May 17.78 +0.19 17.72 1720 11,71 


May 235/0 . 235/4 234/2 25,131 1828 

Jd 241/0 +02 241/2 24041 29,092 1881 

Sffil 246 ft ■ 24610 245/2 2.483 84 

Dec 2SW - 251/0 2500 12865 927 

Trial ' 252,132 SJ32 

m BARLEY LCE (E per tome] 

Mot 101/0 -026 101 JO 10185 211 12 

Jan 10480 -OlIO 416 

Mar 10030 - 130 

Mqr 108/0 ... ae - 

Sap 93.15 +0.75 92/0 92/0 2 5 

Trial 80S 17 

■ SOYABEANS GST ftJOOEu mill; canb/8C«i tawtej 


Close 1099-1100 

Previous 1065.5-6.6 

rtfltvTou/ 

AM Official 1092-3 

Kerb dose 

Open mi. 101.437 

Total dairy turnover 38893 

M COPPEH, grade A (3 per tonne) 


1099-1100 1121-2 

1065.5-6.6 1088-9 

1126/1102 
1092-3 1114.5-8.0 

1120-1 

101.437 


law Int IM 
1780108879 29.741 
17.65 61868 11837 
17.65 30876 4/38 
1789 23,648 3861 
1788 17816 889 

17 JO 11,707 606 

391860 60800 


CRUDE OIL IPE (Stand) 


latest Day** 
price Change 


Close 2621-2 

Previous 2562-3 

High/low 2655 

AM Otfidd 2656-6 

Kerb dose 

Open M. 211,982 

Total dally turnover 118,225 
M LME AM Outdo) E/S rate; 1.6339 
LME Closing C/S rate: 1.6333 


2636-9 

£669-70 

2652/2602 

2634- 5 

2635- 6 


prtea change Low to W 

16.75 +021 1879 1859 82202 19891 

1861 +818 1865 1845 34804 6297 

1682 +0.17 1855 1684 13230 2/03 

1837 +810 1841 1825 9228 1820 

1835 +81* 1835 18Z4 3,734 240 

1630 +815 1830 1820 2.442 230 

137809 34823 


■ HEAT1MQ OLimeC (42800 US gate cAJSpfcj 


SWC13339 3 mart 1.6337 6 imrs: 1.6301 9080x18255 
■ HIGH GRADE COPPBI (COMEX) 


Sort Bay's 
priea cfcaaga Rgh 
4830 +814 4095 

49.73 +822 5835 
5833 +080 5890 

50.73 +833 S125 
5843 +833 5180 
4088 +833 5030 



Ctosa 

Dafe 

cbaige 

Mgb 

low 

ton 

fat 

va 

Oct 

12335 

♦260 

12330 

12230 

*3 

203 

Iter 

12230 

+275 

12100 

12230 

1,473 

192 

Dec 

122.00 

+275 

12260 

12035 39371 

7,071 

Jan 

121.30 

+265 

121 70 

12130 

798 

15 

Feb 

12060 

+260 

120.10 

12800 

570 

- 

Itar 

11875 

+2.40 

12840 

118.95 

8752 

1348 

Tote 





58272 

8018 


um tat am 
4050 14268 8739 
4075 <3/53 11J33 
5840 32260 3.121 
9095 18284 1.112 
5870 11,090 940 

5020 8928 168 

157,116 26800 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
(Prices supplied by N M RottecftM) 


■ QABOa.ffiE(Sflg»w) 

Sett toy's Open 

priea cfcaaga Mgfi law tat Val 

Hm 15125 +2.00 15175 15280 28931 5/IB 

Dec 15480 +1.75 15825 15490 23J04 3210 

in 16800 +1.75 15850 15875 20854 1881 

Mi 15780 +1.75 15725 15875 7884 270 

Mar 16780 +1.75 15725 15780 7J5E 149 

Apr 15525 +180 15800 15525 2/61 93 

Total W1206 11886 

■ NATURAL QAS NYSE* (10800 SAmnOtl) 


Mw 

548/0 

-0/2 

5404 

64SD 43,741 


J— 

560/D 

+0/2 

581/4 

5570 39398 

9382 

Mw 

570/0 

- 

671/4 

587/2 22310 

2/49 

Mar 

5702 

- 

678/4 

575/4 

18187 

l.ia 

Jri 

584/8 

+0/2 

585(0 

5820 17332 

23* 

AOB 

587/2 

-0/2 

588/4 

5800 

1.15S 

113 

Total 




142/17 42/7B 

■ SOYABEAN 08. CBT (BOJJO0BW: oantsffi^ 

Dae 

2532 

+0.11 

2598 

25.71 

38*0 11,125 

J— 

2539 

+817 

25.10 

2435 

14357 

2355 

Mw 

2433 

+817 

2435 

24.40 13321 

2/S2 

Mar 

2430 

+818 

2432 

24.12 11339 

1.7* 

Jri 

2438 

+ai7 

34.12 

2333 

7.482 

1394 

Ama 

2435 

♦0.15 

2437 

2335 

2.146 

7 

rote 





97/98 38*8 

■ aonmnwi meal csr (too tans; s/iorii 


Dao 

1623 

-0L8 

1634 

1827 41/55 

5350 

JM 

164.1 

■OJ 

1843 

1619 17346 

1330 

Mw 

1673 

89 

1973 

1673 

14385 

13* 

Mar 

170.7 

•87 

1713 

1784 

8382 

879 

Jri 

174.7 

86 

1750 

174 A 

7397 

1,156 

to 

1783 

-88 

1703 

1783 

1.109 

14 

Total 





Bt/ta 1dS32 

■ per 

TATOES 

LCE {E/ 





Hot 

1503 



. 


. 

Mw 

1*0 

- 

- 

- 

. 

- 

*pr 

2243 

+8 8 


JMfl 

1/07 

97 

MW 

2400 

. 

- 

- 


. 

JO? 

1073 

. 

- 

- 

. 

- 

Total 





1397 

97 

■ FRSGHT (BlFPEX) LCE (SIQ/Mck pOtaQ 


Oct 

1873 

-7 

1875 

1875 

470 

12 

Mot 

1815 

-29 

19* 

1816 

231 

35 

Dae 

1735 

-53 

1900 

1733 

281 

40 

Jm 

1680 

-50 

1740 

1880 

1/84 

112 

Apr 

1640 

-25 

18* 

1935 

892 

24 

to 

1470 

-t3 

1500 

1500 

147 

5 

TOW 





3,m 

za 


Ctaae 

free 





OR 

1873 

1871 






M COFfg LCE (S/toma) 

■Of 3511 -68 3565 3485 5237 1220 

Jan 3513 -55 3540 3475 11801 1869 

Mr 3463 -45 3470 3425 82Z7 4» 

Hay 3438 -60 3450 3420 381* 158 

Jri 3415 -65 1230 

Sap 3408 -67 3410 3405 1/08 6 

Trial 30219 2879 

M COfFEE *C* CQCE (37,500t»; centalbs) 

Dec 19080 -485 MUR 18830 13887 4880 

Mar 19875 -475 19925 19800 12243 1239 

May 19720 -80S 20180 19725 4,737 309 

Jd 19800 -3.75 20220 19980 1.600 44 

Sap 20020 -220 203.60 20000 633 21 

Dec 20180 -220 - - 844 

Tote 38/88 8712 

■ CUH-US PCQ) (US canateomd) 


38800 +0.150 40.175 39275 8/94 1/96 

48025 +0250 40250 39250 996 109 

48975 +0200 41/50 40700 318 38 

417D0 +8300 41850 41200 301 47 

40700 0 48600 66 2 

10277 1,746 


LONDON TRADED OPTIONS 

8trike price $ torere — Cats Puts — 

■ AUMNUM 


(99-794) LME 

Dec 

Mar 

Dec 

Mar 

1800 

— 57 

98 

46 

75 

1825 

— 45 

84 

59 

87 

1850. 

— 35 

73 

74 

101 

■ COPPBI 
(Grade A) LME 

Dec 

Mw 

Dec 

Mw 

2600 

04 

112 

SO 

100 

2650. 

87 

89 

73 

126 

2700 

— 47 

70 

102 

156 


Oct a Priea Pret. toy 

COmp. toly 16423 18325 

15 (Hr Mangy 16853 18857 

■ No7 PREMIUM RAW SUOAR LCE (certelbs) 

J m 1380 - 

■far 1282 90 

May 1110 +813 - - 300 

Jri 1385 +0.14 - - 450 

fete 840 

■ WHTTE SUOAR LCE ff/tanne» 


Dec 34920 +120 34870 34720 1150 444 

Mar 34320 +160 34420 34060 8242 7Q2 

May 34220 +220 34270 34010 2/33 92 

Aag 339.70 +2.70 339.00 33800 2264 5 

Oct 318.20 +220 - - 696 - 

Dec 317.10 +220 4 

TONI 17,718 120 

■ SUOAR IT CSCE (112. OOOtos; canta/Oxs) 


■ COFFEE LCE 

ytpg _____________ 

3560 

3600 

M COCOA LCE 

925 

950 ■ 

trrs _ 

■ BHBTT CRUDE IPE 

1600 

I860 _____ 

1700 I_ 


Jan 

257 

237 

219 

Dec Mar 
36 87 

22 72 

12 60 
Nor Doe 
83 99 

50 73 

24 51 


Jan 

24* 

274 

306 

Dee Mar 
12 32 

23 42 

38 54 

Nov Dec 
12 99 

23 73 

61 61 


LONDON SPOT MARKETS 

M CRUDE OB. FOB (per twrreWDed +or 


Mar 1286 +0.18 1288 12.67 95,106 BJHS 

May 1284 +816 1285 1286 21161 1872 

Jd 12.70 +814 1174 1286 14819 722 

Oct 1282 +812 1233 1216 12937 419 

Mar 17-90 +811 - 1.784 45 

am 1183 +811 1180 1180 43 

Tefal 14789911800 

■ COTTON NVCE pO-POOfae: centatea) 

toe 7181 -086 7215 7135 2137811288 
Mar 7115 -810 7335 7281 14,428 4359 

May 74.17 -020 7435 7380 6,692 946 

Jd 7483 -057 7525 7480 4,114 278 

Oct 7135 +820 71.10 7830 545 17 

Dec 70.16 +815 7820 6840 2333 142 

TPM 5180618^29 

M ORANGE JIACE NYCE (IBJOOfcs; centm/tba) 


Etebd S1849-&5SZ +8305 

Brent Blend (dried) SI 893-895 +839 

Brent Stand (Dec) S1S.76-B.78z +0.33 

W.TX ft pm est) 517.fl4-7.95x +8375 

■ 08. PRODUCTS NWEprompt defray OF (kxma) 


Premium Gaaolne 

Gas oa 

Heavy Fuel 08 

Naphtha 

Jri fuel 

Diesel 


Si 83-186 
*1 56-167 
£71-93 
Si 70-172 
Si 80-181 
$151-162 


Ateun Aigul. Tat London pnj SOB 87B2 
■ OTHER 


Gold (Troy bl) 
Close 
Opening 
Mom mg foe 
Afternoon Ox 

□ay’s High 
Day's Low 
Previous dose 
Loco Ldn Mean 

1 month 

2 months 

3 months .... 

Silver Fix 

Spot 

3 months 
6 months 
1 year 
GoW Corns 
Krugerrand 
Maple Leal 
New Sovereign 


S price C eauiv. 

38880-36820 
3S& 80-389.20 

388.au 238104 

38890 237.758 

389 JO-389.70 
387.50-387.90 
3892O-389.60 

QoU Lending Rates (Vs USS] 

— 4.59 6 months ^.—5.14 

...4.86 12 months .5.43 

4.91 


Sett DayS ton 

priea ttarn g e Mgh Low kn 

2031 +8084 2915 1.917 31,434 

2103 +0.081 2095 2030 18103 
2.047 +8052 2040 1.965 12,499 
1-989 +0.047 ISM 1S55 12044 
1SZ9 +0.639 1920 1S00 6,710 
f-330 +0038 1-820 ISM *527 


105.70 +805 10180 103,10 1247 1/12 

10295 +83S 11025 10700 11,722 2051 

11130 +146 11130 11060 5228 205 

118JH +115 11810 11435 1398 4 

11825 +325 11900 11800 6S5 15 

121.50 +320 12100 121 SO 543 

34,137 19U 


Fab 2,047 +A03Z 2040 ISM 

Mb- 1S89 +0.047 ISM 1.05! 

Apr 1329 +0.039 1920 ISO 

Hay f-330 +0038 1JB0 1-90C 

Total 

■ UNLEADED GASOLINE 
WYMSC (42000 US patti; e/USgrita) 

sea toy* 

Pries cteage ffigfr Low 


Liverpool- Spat and shipment sates smounted 
to 463 tonnes ter the week ended 21 October, 
against nB In the previous week. Renewed 
ptachaalng In many specialist st/e* attracted 
mudi attention. Syrian quafitos as wefl aa 
Central Ad an. American, CIS and Israeli 
growths moved off freely. 


VQUB* DATA 

Open intarast and Vbfcirw data shown for 
contracts traded on COMEX, NYMEX, CBT, 
NYGE. CME. CSCE and PE Crude Ol are one 
day ki arreera. 


p/Troy oz. 

US eta ocpiv. 

Itov 

54.71 

+235 

324.60 

530.75 

Dec 

5938 

+030 

329.35 

538.05 

Jto 

5637 

+&4fi 

33*.45 

54535 

FSU 

SS37 

+1.17 

34&90 

56X95 

Mar 

5597 

+1.12 

S price 

£ equv. 

Apr 

5839 

+134 

391-394 

239-242 

Tetri 



399.65-402.1S 

. 




91-94 

58-61 





INDICES 

M REUTERS (Bane: 18/9/31 ^100} 

Oct 26 Od 25 month ego year ego 


4,468 65 

57238 27,732 


2099.0 20314 2 21082 15888 

■ CM Ftatraee [Base: 1967-100) 

Oct 26 Oct 24 month ago year ago 
iWJfi 23804 231.© 21720 


Gold (per troy oz}8 
S«vor (pgr troy osj4 
Platinum (per trey oz.) 
Pritotflum (per troy ozj 
Copper (US prod.) 

Lead (US prod.) 

Tin (Kuala Lumpur) 

Tin (New Yorid 
Cette (five vrrighQT 
Sheep give wdgftqtA 
Pigs (Bve weight) 

Lon. day sugar (raw) 
Lon. day sugar (wte) 
Tele & Lyie export 
Bsriey (Eng. leed) 

Make (US No3 Yefcw? 
Wheel (US Dak North) 
Rubber (DedV 
Rubber (Dec)* 

Rubber QCLRSS Nol JuQ 
Coconut 08 <PNQ§ 

Palm Ol (Mday.)§ 

Copra {PMg 
So yab ea n s (US) 

Cotton Outook'A* fridecr 
Wodtopa (B4s Super) 


E per Bnna ufato Attendee stated, p pence*®, c cwtoti. 
r itv/lq. m Mrto>rnm y ocWtae. v No note, u 

Oriffto*. z Daa t Nov. f Lonaon Riyabri. 5 CF Fta»- 

oam. $ Mrion nrefcat doaa. 4 Steep 4 U»b watate proas. * 

Change on weak O Price* in to padouv toy; 


to 350m tonnes. 

“It's not possible to step up 
rice production dramatically 
by planting on new land,” said 

Mr Tgmail Sflra gn 4 ri<n l chair - 
man of file World Bank’s con- 
sultation group on Interna- 
tional agricultural research of 
which the rice Institute is part. 
He points out that good rice 
land is being lost to expanding 
urban centres. 

The rice institute has devel- 
oped over 300 varieties over the 
last 30 years. It has managed 
to increase the yield of its new 
forced by improving the grain 
to straw ratio of the plant 

More tests need to be con- 
ducted on the new breed of rice 
before it can miter commercial 
production, but the rice 
researchers are already frying 
to cross it with other hybrids 
to improve yields further to a 
possible 6 tonnes per acre. 


Matif, the French futures and 
options market, is moving 
closer to developing a new 
market for financial deriva- 
tives in wheat, its president 
said yesterday. 

The decision to launch the 
new market would depend on 
liberalisation of the existing 
regulations controlling the 
price of wheat and Is unlikely 
to take place for a number of 
months. 

Mr Gerard Pfeuwadel, Matif 
president, said: “Wheat prices 
are not determined by the mar- 
ket but by technocrats in Brus- 
sels. They are still partially 
subsidised. We are waiting for 
volatility of prices. We need a 
market game". 

Tomorrow the Matif 
launches a market in futures 
for rapeseed. in response to 
deregulation of the price for 
oilseeds in 1992. It already 
operates markets for white 
sugar and potatoes. 

Market officials said yester- 
day they would also consider 
the possibility of developing 
futures products in related oil- 
seed products, such as sun- 
flower oil, and in rapeseed 
options or other derivatives if 
the rapeseed futures market 
proved successful 

Experts at Matif have been 
studying the possibility of 
developing wheat products, but 
are reliant on the planned lib- 
eralisation of the determina- 
tion of the commodity's prices 
through reforms to the Euro- 
pean Union's common agricul- 
tural policy and the General 
Agreement on Tariffs and 
Trade. 

Mr Pfauwadel said he 
believed that one of the few 
potential growth areas for 
developing new products at the 
Matif was in commodities, and 
particularly agricultural prod- 
ucts - reflecting the farming 
roots of French society. 


CROSSWORD 

No.8,595 Set by GRIFFIN 



ACROSS 

l A fellow student interrupts 
recess (6) 

4 Left out assorted candles to 
go up (6) 

8 Leaning over and showing 
one's appreciation? (7) 

9 Ask about Cleopatra’s killer 
befog irritable (7) 

11 Upsetting bits during broad- 
cast (10) 

12 Paddles round when circum- 
navigating backwater (4) 

18 Guide found one in parcel (5) 

14 Missing railway lorry's gone 
into railings here (8) 

16 Bewildered members found 
CSS awkward (8) 

18 Disappearing act depressed 
crowd (5) 

20 Prison in West (ran (4) 

21 Doctor Carey burnt his seat! 
( 10 ) 

23 Virginia left lake with her (7) 

24 Question expert about namp 
indirectly (7) 

25 Points to exhaust when com- 
plete (9 

26 Suspend without charge on 
leaving zone (6) 

DOWN 

1 Excuse to bafi out first person 

GO- 

2 Me a n s top Italian man's 
superfluous CD 

3 Looks up to see tavern col- 
lapsing®) 


5 Insult by toWng slanting can 
out (5) 

6 Go off with report (7) 

7 Princess taking pamphlet on 
board amuses (9) 

10 Shy theologian takes poor Fifi 
to hospital (9) 

13 Rotten sport to consider lying 
down (9) 

15 “Work with iron ore” said 
bully (9) 

17 Zealous adjudicator upset by 
topless event (7) 

19 Hug me on turning up to stay 
(7) 

21 Announcer caught five leav- 
ing river <5) 

22 Ruffle constabulary nvm (5) 


Solution &S94 


□□□□aoaa anmniDB 
H00DQQDB 
saaaa □□□□□□dbe 

□ annooBo 
□□SQOOQQO □□□SB 

0 Bn a s a a 
□□anno aBBSEnD 

□ a □ dqs 
□□□qqdh aBaniHD 
lj lj a s □ □ □ 
OOOQB QHHQOnnOB 
^ u ua □ □ □ q 

DdODQ 

□ □ H □□BOO 

QHDDBH BDOmnaBB 



J ani> lS 


: J 


:tS 

• -/WS 


. Ac . . J 6 




'•* H-J W 

***** ft*** 


M si-AiMr i 



ft 







FINANCIAL TIMES THURSDAY OCTOBER 



MARKET REPORT 


Early gains eliminated following gilts auction 


FT-SE-A All-Share Index 


By Tony Byland, 

UK Stock Markets Editor 

Strong selling of stock index futures 

at the dose of trading yesterday hit 
a UK stock market where early 
gains had already been almost elim- 
inated following a very poor 
response to the auction of £L 5 ba of 
five-year British government bonds. 
The FT-SE 100 Index slipped below 
the 3,000 mark again in the final 
minutes and traders expressed p^s - 
simism ahead of this morning's 
opening. -■ 

Equities were helped at first by a 
brig ht e n ing of the currency s^ne 
after the French Economic Minister 
professed readiness to join in any 
dollar support plans an d the gover- 
nor of the Bank of Japan rejected 
suggestions that the US was 
acquiescing in a weak dollar. 


With long-dated UK bonds firmer 
in line with other bond market^ on 
the improved dollar sentiment, the 
Fbotsie had: gained 2&8 points by 
nudmnming. But 3,029.7 proved to 
be the day's high point as first 
reports from the gilts auction 
reached the stock whtM 
The market’s advance was 
quickly rooted. A brief raSy as Fed- 
eral bonds responded to a gatn of 
only 0.1 per cent in US durable 
goods orders for September proved 
a false dawn and muring tu r*«pH off 
again in London and New York as 
interest rate worries resurfaced In 
nervous equity mark ets 
By the close, when Losses in OK 
gilts were half a point down on the 
day, the FT-SE 100 Share irate* was 
a net l point off at 2£99.9. The sud- 
den rush of selling in the fixtures 
market drove the December futures 


contract on the FT-SE Index down 
to 2J9E6L Same traders perceived a 
turn for the worse in futures trad- 
ing over the past few sessions 
r^mdnn dealers warned that the 
UK market could face a difficult 
opening this morning after the auc- 
tion of five year Federal notes over- 
night; the Bundesbank policy coun- 
cil meets today and tomorrow 
brings the gross domestic product 
statistics in the US. Tbe Dow Indus- 
trial Average was 9 points down 
when London dosed for the day. 

The withdrawal of baying support 
across the foil range of the market 
brought a further fall of 7.4 points 
in the FT-SE Mid 250 Index which 
closed 3,467.2. Business in non-Foot- 
de stocks made up around 60 per 
cent of the day's total of 517.fen 
shares through the Seaq electronic 
network, itself a dip of just over 9 


per cent from the previous session. 

The UK market faces Important 
trading statements today from sev- 
eral blue chip companies likely to 
provide a lead for the marfa* The 
insurance sector performed well for 
most of yesterday's session, with 
dealers taking the view that the 
generally negative report on pen- 
sion fund sales from the Securities 
Investment Board largely taken into 
share prices already. 

OH Shares also performed well as 
good results from the US oil firms 
outweighed any worries over the US 
currency. Recommendations from 
stockbroking analysts brought a 
number of firm spots across the 
range. 

Consumer and retail issues stood 
up well in spite of the warning cm 
inflationary pressures this week 
from the Confederation of British 


1.650 


Industry. The London securities 
arm of UBS warned clients that 
while the CBI survey took place 
against a background of continued 
strong growth in the UK economy, 
the recent gross domestic product 
statistics had suggested that the 
pace of growth was slowing. More- 
over, sai d UBS, the survey's refer- 
ences to capacity shortages and 
unit cost pressures suggested that 
the wiodinm term outlook for infla- 
tion could be “distinctly gloomy.” 

However, Paribas Capital Mar- 
kets, forecasting Fbotsie at 3,300 at 
the and of the year, believes that 
bas e rates will remain at current 
levels until l-hgn It nlalma that mar- 
ket perceptions that that significant 
increases in inflation and interest 
rates are threatened is “right in 
principle but likely— to be hope- 
lessly wrong in degree." 



Indices and ratios 

FT-SE in 2999.9 

FT-SE MW 250 3467.2 

FT-SE-A 350 150&4 

FT-SE-A Al-Share 1496.60 
FT-SE-A Afl-Share yield 4.03 

Best p e rf ormi n g sectors 

1 Lite Assurance 

2 Gas Distribution 

09, Integrated 


OO Exploration & Prod.. 
Printing. Paper & Pcfcg. 


Equity Shares Traded 

Turnover by vokiM {mdfon}. Exctudng: 
Hrb-rtatet bueintoa and overseas turnover 
1,000 



- 1.0 

-7.4 

- 1.1 

-1.14 

(4-03) 


+Z2 
. + 1.2 
+0.7 
.+ 0.8 
+05 


FT Ordinary index 2298.5 -3.3 

FT-SE-A Non Fins p/8 18.40 (18.43) 

FT-SE lOOFut Dee 2983.0 -16.0 

lOyrGJlt yield 9.02 (8.94) 

Long gilt/equRy ytd ratio: Z23 (2£2) 

Worst p erf orm in g sectors 

1 Electricity .-1.4 

2 Textfles & Apparel -1.4 

3 Merchant Bonks -i ? 

4 Tobacco -12 

5 Extractive Industries -0.0 


Market 
awaits 
ICI news 

There is still a conviction 
among London’s financial com- 
munity that ICI is the symbol 
of Britain’s industrial wellbe- 
ing and the market hung fire 
ahead erf the chemical giant's 
third-quarter figures today. 

The FT-SE 100 closed flat and 
Id were virtually unchanged 
at 799p as the stock market 
waited for what one dealer 


described as: “The most sensi- 
tive figures for three years, 
both for Id and for the mar- 
ket" 

The range of forecasts for the 
company's pre-tax profits is 
unusually wide reflecting the 
divergent views on the direc- 
tion of the UK economy. The 
bulls, who believe the company 
might produce profits as high 
as £145m, argue that the rise in 
commodity prices will be 
reflected in Id’s figures before 
being passed through down- 
stream companies such as BTR 
and Yule Catto to be reflected 
in the economy as a whole. 

The bears, who are looking 
for around flatten, believe that 
the pick-up in commodity 


prices has already been fac- 
tored into the market - ICI 
shares have outperformed the 
FT-SE A All Share Index by 
more 16 percentage points 
since the beginning of March - 
and the stock is due for a cor 
rection. 

Bass wanted 

Bass again stood out among 
brewers as a combination of 
yield buying and «wn<i finger 
crossing on the budget helped 
lift the shares 8 to 544p on 
turnov er of 2 ^m for a two-day 
advance of 12 . 

There were signs yesterday 
that yield-hungry buyers were 
moving in ahead of Bass's tra- 


ditional chunky final dividend. 
The 1993-94 results are due at 

Hip PnH rtf rw»r+ month awrf ana. 

lysts the flnai payment 
could be edged up to I5p a 
share. 

Bass is market leader with 23 
per cent of UK beer sales, and 
yesterday tentative hopes for a 
reduction in beer duty in the 
November budget showed 
w gwfl of gHtntog gnuniH How- 
ever, stockmarket opinion here 
is polarised. 

Resilience of Vodafone stock, 
19 a penny at 19Qp contrasted 
with losses in both BT and 
Cable A Wireless, was attri- 
buted by marketmakers to 
strong support from Hoare 
Govett, the stockbroker. 


TRADING VOLUME 


EQUITY FUTURES AND OPTIONS TRADING 


Stock index futures had 
another day of wide swings, 
ending the session back under 
3,000 in much reduced 
volume, writes Jeffrey Brown. 


The FT-SE 100 December 
co ntr a ct rose steadily through 
most of the morning but 
peeled off in the final couple of 
hours, diving steeply In the 


■ FT-8E 100 WPEX FUTURES (UFFq £25 per ftri inctex pofrrt 


(API) 


Open Sett price Chongs High Low EaL voi Open InL 
DOC 30230 2993.0 -180 30400 2992.0 12197 S4444 

Mar 30505 3014.0 -18.0 30585 30153 18 3831 

■ FT-SE MD 250 MDEX FUTURES (UFFE) CIO par M Index point 


Dec 


3465j0 


- 10.0 


4216 


■ FT-SE Mm 260 INDEX RITUHE8 (OMLX) CIO per IX Index port 

Oct - 3475.0 - 

pa open tafaraK Agues am far previous Mr- 1 End vohxns ahem. 


■ FT-SE 100 INDEX OPTION {LffFQ (3003 £10 perM Wax point 

2850 2900 2060 3000 3060 3100 3150 3200 

CPCPCPCPCPCPCPCP 

Hr 157 IB 117 3Sh 8 Uj 40fe St 61** 31 92 129 173 4 222 

1794 35*2 144^2 491* ITS 99 Mb 9112 ei 1 ® 110*2 41 151»i ZZh 1«»2 17 230>z 

awb 51*2 171*2 06 142 96% 113 108 135 B&j Vi 48 196>i 34 23fe 

221 KF* 195 79 iSf, 99 t29 iWz 103 746^81*2 175*2 92 208*2 41 245^ 

- 234*2 106 - 174fe!49>2 - 130 204 - 82 -289 

CMS 3J5B4 MS 14.149 

■ EURO STYLE FT-SE 100 H40EX OPTION (UFFE) CIO per Ml frxtax point 


Ok 

Jan 

fi* 

Junf 


2675 


2 S 2 S 2875 


Km 

177 

124 134 * 2 19*2 97 32 

Ok 

19 G 

29>2 199 

42 1202 57 

Jmi 

214 

3 Sh 

147 87 

liar 

M 6 

61 

19028312 

Junf 


222 117 b 


3028 


95 113*2 
126 137 
W 158*2 


3078 


3125 


57 infc 
02 191 
0*1 206 


3178 


• Uag Mad mfey warn. 

■ EURO 3TYLH FT-SE MD 2S0 WDEX OPTKJN (OMUQ ElD per hfl Intta point 


3400 3450 3800 3560 3600 

Oct 121 67*2 95^2 90^ 73 117^ 

Cafla 0 Ms 0 SoOtaraari pfcaa <nd astamoa ae token at 430pm. 


3700 3780 


dying moments of the day's 
trading. 

Agafost a 3,040 best of the 
day, the contract was 2J393 at 
the official 4:10 dose, down 16 
points. At this level the 
premium to the cash market 
was 10 points with fair value 
premium around 14 points. 

Activity was dull with 10,594 
contracts comparing bleakly 
with the previous day's 18,600 
contracts. Most of this was 
concent r ated into the morning 
session. 

Afternoon trading was left 
mostly to the whim of smaller 
deals but there was an 
upsurge of excitement right at 
the dose when two big sell 
orders from two major houses 
went through. 

Traded options activity 
edged ahead with 50,760 lots, 
against 49,676 lots on 
Monday. FT-SE and &ro 
FT-SE volume accounted for 
around 20,500 lots. 

British Steel stood out 
among individual stock 
options, tivning over 8,100 
lots, or more than twice as 
much as the second busiest 
stock option, Marks and 
Spencer (3,084 tots). 

Thames Water, Hanson and 
Salnsbury were also active. 


SE Actuaries Share 


ow* 

Oct 26 eftgaft Oct 25 Oct 24 Oct 21 


yam Otv. Ebp. 
ape ytofcflt yjajdft 


P/E 

ratio 


Xdaq 

ytd 


ToW 

Rahan 


FT-SE 100 2999-9 

FT-SE MM 260 348731 

FT-SE Mkf 260 8X Inv Duals 3468.1 

FT-S&A 360 15084 

FT-SE SmaBCap 1774.16 

FT-SE SreatCap ax fcw Truata 1747.44 

FT-SE-A ALL-SHARE 1498S0 

■ FT-SE Actuaries AH-Shara 


30009 3029.1 30328 3154J 

-02 3474.0 3500/2 3602.4 3537.1 

-03 3474.9 34963 35008 3537.4 

-0.1 15005 1823.0 1524.6 157S3 

-0.1 177SS7 178020 178058 180427 
-0.1 1748.78 175034 175048 178027 
-0.1 1497.74 151078 151229 156013 


423 

7^4 

1531 11569 113822 

3.81 

6.88 

2561 10590 

129402 

577 

558 

1511 113L37 1291.56 

4TB 

583 

17.11 

53.77 

117540 

533 

501 

2518 

4585 

138516 

354 

557 

2X98 

5571 

138349 

403 

579 

17J2 

5X50 

1181.13 


Dari 

Oct 26 chga% Oct 25 Oct 34 Oct 21 




□tv. 


Earn 

yield* 


P/E Xd reft. Total 
ratio ytd Raton 


10 MMERM. EXTRACTIONS 2662.10 

12 Bdmcttw MustowK) 380032 

15 00 tntapaMdP) 262038 

16 01 Exploration 0 Ptodfll) 1870-33 


+06 284834 268067 2681.91 2425.10 048 014 245B 6253 107157 

-08 3833.10 388008 388050 314000 037 040 2082 8082 104060 

+07 280044 261001 261252 2401 40 060 5-73 21.74 8858 108036 

+08 185954 187013 187753 1957.70 2*> ± t 3003 1082.14 


20 OB* MANUFACnrURBt3p67] 183157 

21 BuMng & ConatTucBonp3) 104058 

22 Bidding Malla 0 Marcfa<32) 1784.76 

23 CtMmdcri8C23) 2294.14 

24 awaited IndusafaWlQL 172041 

25 Bactranlc S Bact £ttfp(34) 162551 

26 EngktMringCTI) 177229 

27 Engineering, VW*tesf12) 223041 

28 PrMfcg, Paper & PcfagTO 275031 

29 Texffles A ApparelCT 154751. 


-Ol 183451 184081 185353 192350 4.17 55S 23.11 8087 93048 

1041.18105158105159117280 3.79 5.33 24.76 3006 82051 

-07 179073 161258 181757 188850 4.17 043 2251 8090 84055 

+02 228042 231758 231957 221750 4J34 44M 2750 7088 101006 

+05 1725.10 173093 174006201220 550 655 2247 82.75 88002 

-05 184018 186074 1857A4 211040 4.12 090 1758 8085 B9458 

-05 1778.10 179032 178042 188250 852 6.10 2352 4047 1015.11 

+O1223157228O28 226&01 1S3750 448 158 8050T 8254 109151 

+O5 274358 27SO272746.12246450 012 042 2158 7553 1087.17 

—14 156852 157550 168153 195050 455 099 1753 4959 87049 


30 CONSUMER 00008(97) 

31 8reweriaa(17) 

32 Spirt*. Wines 0 CtdenflO) 

33 Food Manufacturera(23) 

34 Houaahokl Qoodat13) 

36 Hoatti Cared t) 

37 F+rermBcautteafa(12) 

39 Tobaccod) 

40 SS1V»CE8<218) 

41 DMrttxjtacapCQ 

42 Laiaura & HoMa(2G) 

43 Mad^3Q 

44 Ratatere, Food{14 

45 Ratatere. Oaneraipq 

48 Swport Srevtoaapi) 

49 ThiriaportnO) 

SI Omar Setvtoaa & Budnnaff) 


2689.17 -05287554289957271151 2837.40 450 751 1559 10753 92255 

221003 +<L3 221242 221857 221654 207450 457 7.74 1087 61.10 99352 

2747.05 -05 278152 278353 279253 271950 458 757 1657 10153 92453 

yxqqr +852220712262.03 228098237450 455 750 1454 8459 94258 

23807 7 +0.1 238453 239854 240051 284350 353 751 1073 8958 88454 

160251 +0A 1SS653 160084 160658 174350 3.14 858 4153 4854 93351 

293078 -05 2842.79 2883.19 299453 3264A0 459 759 155712028 93958 

-U0H9K -153540.19380011 369053 403250 650 953 1058 217.07 79758 

187554 -05 1878.75 189359 189558 190450 850 051 1054 51.78 92271 

248757 246858 248053 348047288950 350 7.44 1550 6856 96957 

202751 -052030072053.17205057191040 3.42 452 2353 5759 1002.17 

276956 -0.1 278226 277952 27B458 2607.70 252 043 21 AS 6042 98031 

168750 -05 187258 189957 170061 172250 358 950 1257 6250 99858 

1638.18 -05163071184758164014169750 353 654 1852 4455 87483 

146358 +05 1478.77 148352 148008 183450 254 051 1012 3S02 90458 

219858 -03 220450 221032 221852 228010 352 078 2012 8958 88031 

■MUM -fl.4 124033 1*«g-ia 124757 1227.70 410 3.16_ 4750 2552 108076 


ao iniun&9(94 
82 EtactridtyfI 7 ) 

84 (tea DMrfbuUonCQ 

86 TaBeonvnunlcWarB(4) 

89 Waterf13> 


234021 -05 235013237258238038261450 

244057 -1.4 247481 2465.73 244258 2217.10 

188650 +15 184358 187049 188014 223850 

107045 -0.4 197759 190953 200152 230350 

+a*o aa -02 184013 1638.19 187055 192080, 


89 H0W-FeWICIAt8tBSn 

70 HNANCMLStloq 

71 Bankafiog 

73 lnaumnM(17) 

74 LNa e annca H 

75 Marehani BwkatB) 

77 OBMT Rnancfa«24) 

79 Prooanv441) 


1B17 1H -05 181071 KM2JM 1B3478 187043 


448 

501 

1519 

8147 

90558 

3.75 

1510 

1142 

8548 

101 498 

542 

t 

* 11748 

87542 

419 

746 

1525 

5022 

84028 

527 

1244 

849 

0948 

82148 

401 

843 

1540 

8642 

114546 


211657 +03 2106l49 213558 213351 232350 
278466 +0.1 27B051 279356 279155 286950 

121251 +05 120019 122758 122418 147750 

233750 +25 228058 2318.77 231856 279750 
2647.52 -15 288051 271158 272453 318440 

179234 +05 178091 180011 1797.72 179950 

144159 144138 1453.78 14BQ44 173050 


bo MVESTIJEMT TWensnae 2890 ^^ 4 ^ 1 268088 , 2717.79 27195 s 27 i 7 >!q 


89 FT-SBA Ali.*8HARQBBB 

■ Hourly mowmonh 

Opan 950 


149050 -0.1 1487.74 1310.76 151259 1580.13 


448 

028 

1240 8845 

842.14 

438 

1031 

11.10 11539 

83122 

548 

571 

11.78 6141 

837.14 

547 

748 

1548 127.82 

90446 


1245 

036 87.78 

79545 

404 

572 

13.72 8331 

98143 

422 

4.48 

2740 4348 

82504 

2J» 240 6053 6415 90507 

403 

579 

1742 6240 

1181.13 


, niw hjw 1250 1350 1450 1MB IMP jWW 

r": a-ai 302+5 iz2.4 30103 30108 30223 30100 30003 30207 2999.7 

_ Si 3U04 34785 34775 34785 8477.1 34701 34815 34875 

S 5 S isi&7 ifii<u 1CTao 1K15 ,60R3 

FT-SE Actuarkw 350 Industry bwWs 


Open 


MO 1Q50 1150 iftJQ t^OO 1450 isoo 1Q1Q. 


Pn 


Ch 


___ SreT 9795 8795 9795 9795 9795 978 3 9783 +25 

j semen 9703 OTfl.7 ^3 28355 29435 28204 29145 29 »5 29185 -85 

'"“*'** iSS 18553 18485 18407 18805 18485 1842.1 1»M -35 

* 2B035 »«? JsK 28127 28105 2812.7 28Z3.1 28005 2B025 27904 27905 +80 

i a iMii firm Urn rVwnrWnma 
i ol Wcocric M (HCerteMd 


•L London o^ZA 

SO. FT-8EAcaW»3W «Bd**fT9E4«*faa fariirey 
- -ferividBidawFT-8EJtearefaaW3hB«fadnli 

ItaA ef Mnate* indaraaMrind aal of Bond niaa. 
iltenuncfai Tlmre UbA“ ' 


rnttmltm HamcM Tfaua Ut *« 1 wn d MfapJ UiMri IBB*. •Tteftiwdal Urn- '»«: *■ 


Sanaa** 

Abbay NNtanart 
M»tHohar 

Atod Dcrmcqt 


Oaring Db/b 


erh 


Defffluat 


asndkfaLt 


Quknnt 

HsacpspriMt 


0400 


Legri&Qmrit 

SBP 

London Bact. 

LOrthO 

L ucre 

»ct 


a CMC 


NortMRi Foodat 


aoi»z 

eae ^ 


ajsoo 


781 


1,100 


741 


3 J300 *50 

3300 in 

ZBOO 423 
2.000 290 

£200 388 


217 


Swam imr 
awl pmjportt 


SnAVMH Bact 
SoufaWretlNriar 
Sou* Wrer. Bwx. 
SouSHDiWABer ^ 

9 HndBd cnareit 


Trial Ufa 
HBtar.Wbottnv 

Tteect 

ibmWMt 

nxwarit 

Tomfanrt 

ToriafawHeuM 

UBt W ireu pril 

ssas® 

VMtiWor 

MtreMnr 

VfltaTMlSdgMt 

WtaCnn 


ZarereT 1W «7 -1 

B— don wring mure torn ■rie ol l o n o/Mricr 
rearifc* dWt mputfi A+ SEM Britri 
iririadre irC 430pm Tririwnl cn» mrion or 
mere oa nuxtad dDHn. t fealcrins an FT-SE 
100 Max ( 


18000 21 

ZBOO IS 


*33 


Hoare’s telecoms team was 
said to have been promoting 
Vodafone shares on the view 
that the company will rvrmo up 
with a rapidly improving per- 
formance in Germany and fol- 
lowing recent excellent figures 
from US Cellular rwmpanigg 

The broker was said to have 
highlighted the expansion of 
Vodafone’s E Plus subsidiary 
in Eastern Germany and its 

highly munprit i t i gri tariff HCT PSff 

the whole of Germany. Voda- 
fone launched E Plus in May 
this year and is nipwifart to 
cover 60 per cent of Germany 
by the end of the year. Hoare 
was said to have put a valua- 
tion of $L3bn on E Plus. 

The bulls got the better of 
the long standing two-way pull 
in P&O, pushing the shares up 
8 to 6 Ct 2 p in t u rn o ver of 2.6m 
following a major assessment 
of the company by UBS. 

The securities house reiter- 
ates its buy stance, pointing to 
strong yield and the 85 per 
of operating profits that 
arise from tyiy to ffw other 
cross channel ferries. Accord- 
ing to UBS, P&O is the third 
highest yielding Footsie share. 

BTR was again the most 
actively traded Footsie share, 
gaining 1 to 3Q2p in tfan of 
turnover which compared with 
14m trades on Tuesday. Mach 
of the activity stemmed from 
the exercise of Mm warrants at 
288p each with substantial 
batches of the newly created 
shares said to have changed 
hands. 

The oil majors attracted solid 
support in the US overnight 
and again at the outset yester- 
day as institutions responded 


NEW HIGHS AND 
LOWS FOR 1994 

MWrW0H8(I5. 

BUL 0 NO A CMSTRN flj OnrtB Megs, 
fNSTfWUTOm CQ Acten & Harav. dad 
Hridwm. H 5 CntNC & ELECT COUP ( 1 ) 

NaMa Pit. EMQ. VEWCtEB ( 1 ) Mftay RanriB. 
BtllMCim IM)S CQ WmUOI AMM, L 8 SURB 
8 HOTBLS » DriM Lloyd. VO. MBMA tfl 
noosed. Od. EXPLORATION 4 FROO ( 1 ) Dm 
ExpfcsadQQ. SUPPORT SERVS ( 1 ) Sana Group 
10 p, TEXnua A APPAHB. p) Brtcfaat 
-Ounriy. 

NCW UMSCUBI. 

aura n onrwi nxeo iwrenssr ro banks 
n ANZ. MauUriA 8unriamo. BUROOta & 
CNrilRN P) AMEC 8Hp ftf, Britrindi, 
Brifrifay. BLOO MAILS 4 MCHT8 01 Cfafa. 
Efriar. Qrahara tesax IfariMt teffay Group, 
CIP riCMJ n> tefaa UMI H UIU T0B6 PI 
CriVw. Crefcri. PirerfaU. Cn farp rtre Oampafar. 
Bwri. Hariri. N IlB imi ftePL re a uumji 
MU TO BTR Nyire. BLHCTRMC A ELECT 
COUP n act. oaBa. Orewcrwr, tom. Conuri 
Satvri. Otto. EMOMBMNO 0) Brim (0. M 
•~1*. ~|iii i nnlm. ntifihui Tin a Hj ii i Ti. 
VldBite, Wagon tadl 7Wp M, Wharan. 
EXnUCTWE DOS m Mnreat, MMW St 
8artw% POOD HANUF P) EwBri. Urixnfa. 
HEALTH CARS R fariran, Kynadt Tagnri Ufa 
Sctoneaa. H0U8BMLD 00006(1) vynaa^ 
iMutANcc n MmMENr-musTim 
IIWIi>nri.NI COiHAHIkl 98 LEHIJWE 4 
HOTELS fag AfetouaSripc Pit. FkalLria. 
Wandtay, MBNA H) EMAP. Portvnoudi & 
Sunderland. WMQO, Do MMx. UBtCHANT 
BAMNB M OL EXPLORATION 8 PROD (1) 
RmeML OTHR miANCML P) Beery. 8bdl 
A NoUa. Cridafa, lyndri farik Opkm. 
OIMHI am* A BUMS ID PRTNa PAPER A 
RACNO M PMJIUII I ON RETAILS!* FOOD 
C8 UaiehBM Ratal. Nnria A Paaoocfc. Shoprts. 
RETAILERS, BENRALMBarida (9 A, Ba. 
u at M>win a ya .»umo n r «o w 5 WACr. 
Brooka Sanfaa, !£%«, Novo. TEXTILES A 
APPARB. n Oorie Vlyrita. Lanfaart Itarerth. 
Shanrixat TOOACCO fl) BAT IZNpe Una. 1 a, 
ANBOUWA 


to the encouraging numbers 
from the US majors and the 
prospect of good third quarter 
numbers from Shell Oil this 
afternoon. Dealers said the 
market was looking for “clean" 
profits in excess of $320m, 
against a comparable $239m, 
from .Shall. 


Shell Transport moved up 6 
to 700p, after turnover of &2m 
while BP settled 2'A up at 
4L3Kp on good turnover of 

R.am 

Mining group RTZ slipped 7 
to 847p as Pamnure Gordon 
reiterated its sell stance. 

Pharmaceuticals group Well- 
come shed ll to 622 p with trad- 
ers saying that Goldman 
Sachs, the US inves tment hank 
which reiterated its negative 
stance on the company earlier 
in the week, had a sizeable sen 
order on its books. 

Meanwhile Switthgiina Bee- 
cham improved 2 Vi to 405‘Ap in 
the ’A’s as reports in the US 
press gave suggested that the 
purchase of drugs distributor 
DPS would go ahead as 
p lanned. There had been sug- 
gestions that the US Food and 
Drug Administration was con- 
cerned about the acquisition. 

Motor parts services group 
Kwik-FIt put on 2 to 151p on 
news of a £9.5m takeover 
which in c reases outlets num- 
bers by more than a sixth to 
around 800. Among motor dis- 
tributor, Cowle gained 7 to 
212p with the shares bouncing 
from what analysts saw as an 
earlier oversold position. 

Prudential Corporation put 
on the best individual perfor- 
mance in the FT-SE 100 as the 
market responded positively to 
news of a 15 per cent upturn in 
worldwide new business fig- 
ures. Prudential shares jumped 
10, or 3.3 per cent to 308p, on 
turnover of 4£m. 

Elsewhere in life assurance 
stocks Legals edged up 5 to 
433p. Lloyds Abbey Life, given 
a rough ride by the market in 


the run up to the SIB report 
were heavily traded and settled 
10 higher at 336p. Britannic 
edged up 3 to 407p. London and 
Manchester eased 2 to 318p and 
Refuge dipped a penny to 275p. 
United Friendly retreated 15 to 

483p. 

In the composites area Com- 
mercial Union moved up 6 to 
524p, as did General Accident 
556p. TSB was the second 
heaviest traded stock in the 
market after Smith New Court 
the securities house bought a 
block of 5.7m shares at 2lOp 
and placed the majority at 

212p. 

The recent big buyer of Stan- 
dard Chartered made a series 
of fleeting appearances in the 
market, helping stabilise the 
shares which closed only a 
shade easier at 278p;tamover 
of i.im was well below recent 
levels. Dealers pointed to 
heavy options activity in HSBC 
whose shares moved up 4'/i to 
699Kp. Merchant bank SG 
Warburg took another tumble, 
foiling 14 to 600p reflecting 
uncertainty across the range of 
both global bond and equity 
markets. 

Supermarket chain J. Salns- 
bury was weak early in the 
day with dealers saying Mor- 
gan Stanley bad cut its fore- 
cast ahead rtf half-year figures 
next Wednesday. However, the 
shares rallied later to close 2 
firmer at 386p. 

MARKET REPORTERS: 

Steve Thompson, 

Peter John, 

Jeffrey Brown. 

■ Other statist ic s. Page 24 


LONDON EQUITIES 


L1FFE EQUITY OPTIONS 


QpHan 


— cat pus — 

Oct Jre Apr Dct Jan Apr 

«teq 

540 38K - - 

1 - - 

(*575) 

568 

1 - - 

16% - - 


240 

19 25 am 

1 7% 11% 

r»7) 

280 

TW 1214 19 

4 17 21 

ASUA 

80 

Z m 7K 

1 3% 4% 

rd) 

70 

12 3 

9% 9 11 

M Atioys 

360 

7V4 23 34% 

2 18 23% 

(3641 

390 

1 1 2114 

27 » 41 

SrtBdriA 

390 

18 30 3m 

I 13% 19% 

(*406 ) 

420 

1 15% 24 

15 29% 35% 

Boori 

500 

24 36 47% 

1 12 19 

r»i) 

560 

1 11 24 

30 42% 46% 

BJ> 

390 

28 35% 42 

1 8 14% 

r+ 13 ) 

420 

1 % i7 a 

8 22 28 

Brt»Sfari 

140 1814 222 m 

T 3% 5 

C-157) 

160 

1 9 15% 

3% 10% 13% 

Bare 

500 45* S3 5m 

1 12% 16% 

(442) 

550 

1% 19 29 

11 3m 41% 

CttLEta 

399 

S%27K4M4 

2 2t 28 

r3B2) 

420 

1 M% 27 

30 39 48 

Criitarida 

420 

13 27 3m 

1 1614 21% 

T431 ) 

480 

1 W% 21 

31 40V4 44 

OiaalMa 

493 33M 47 S3 

1 8% 19 

(523 ) 

543 

1 IS 29% 22% 32 46% 

IQ 

7S0SI»71» 83 

1 11% 27% 

(*783 ) 

900 

4 38% 53 

2 81 51 

KkCtriw 

480 

14 304 4m 

1 1B2S4 

(472) 

500 

1 14% J1 29% 38% 47 

Lari Sacut 

BOO 

3 22 33% 

1% 24 26% 

rsm) 

BSD 

i m 16 

63 6044 61% 

Marta & S 

42D 

% 19 29 

1 15 2144 

(**»] 

460 

1 S 131441% 4S 48 

MBWest 

480 

27 44 31 

1 12% 25% 

P484) 

500 

1 21% am 

10 31 47% 

SMtauy 

360 

27 37% « 

1 9% 14 

(388 ) 

390 

1% IS 31 

5% 22% 27% 

S»* Trent. 

700 

429% 38 

3% 20% 34 

(701 ) 

750 

1 m 18% 51% 53% 87 

Suntan 

200 

1923% 27 

1 3% 8 

rziej 

220 

1 10 15 

5% 12 14% 

Driaigar 

00 

5 m ii 

1 6 7 

rw) 

90 

1 4% ■ 

9 11 13 

Uriarer 

1100 

23 3214 71% 

1 27 43 

pllfl 

USD 

1 27% 47 

35 54% 70 

ZBnaca 

B00 4ZM 09 77 

1 14% 38% 

(837 ) 

650 

1% 38 48 13% 35 66% 

OpOor 


Mm ftbriky 

No* Fab Iter 

sand nt 

300 17* *7 34 

8 22 25 

(386) 

420 

• 13 Z1 27% 40 42% 

Irifareka 

140 UH 2BH 33M 

2% 8 9% 

H49) 

160 

3%WH 14 1334 18% 21% 

UUBbate 

280 

2231% SB 

3% 7 15 

(295) 

300 

mam at 

11 15% 26 

Option 


Bac Ha tea 

Ore Mar Jon 

Ham 

110 11H 1BMH 

a m im 

(IIS) 

120 

m 11 IS 

12 14 18 

Often 


Rw M May Nw F* M« 

Brit Am 

480 

27 47 SS 

18 30% 41 

r« ) 

500 n% 30 38 

48 54 84% 

BAT too 

300 

36 47% 53 

24 9% 16% 

r«i7) 

SO 13% 29 34 

12 22 33% 

SIR 

300 

IT 21 25% 

8 14 20 


ran ) ao 2 nt i»* a» xm 4«t 
at Trim 360 S9 30B 36% 2ft 9K 18M 
(*380) 390 miM 21 14 25M 28M 

CKtoySdi 420 16 31 33» 7M IS S 

pea) 480 m n m smsiM 

EMMBK.7W8ZH 99 89 UM2MS5K 
(*744 ) 750 19H4S54 83H 3151KS7K 

Una CO 38 « 54 2 9 13 

T452 ) 460 7H 22 2BK I4 21M 31 

SEC znm 23 29 2 7 9)4 

(*274 ) 2n BH 12K 18 98 18M 19K 




— cm 

PUS 

— 

OpdDR 


tev Fab Hay Nov Frii May 

Hanson 

220 

m u u 

5% 12 15% 

(222 ) 

240 

2 6 8% 

20 24% 

28 

1 Barm 

134 17% - - 

2 - 

_ 

(148) 

154 

4% - - 

OH - 

- 

lucre tore 

180 W% Z3 2BJ4 

2% 6% 

10 

(192) 

200 

611% 18 

12 16% 

20 

PA 0 

BOO 

22 41 51% 14% 25 

43 

(902 ) 

650 

5 19 29% 

5T SB 

73 

mfaetre 

180 

17 13% 24 

2% 6% 

9 

(IE) 

200 

4% 9 13% 11% 17 19% 

Piutonfad 

300 

15 25 29 

S 12 

19 

(308) 

330 

3 a 14% 24% 28% 

37 

RTZ 

800 

59 78 37% 

4 15% 

29 

(847) 

850 22% 4m 37% 16% 34% 

52 

Hedaed 

420 3m 51% SB 

3 10% 21% 

(451 ) 

460 11% Z7%31% 

17 26% 42% 

Royoi tore 

290 12% 22% 28% 10% 17% 

24 

(230 ) 

300 

4% 17% 29% 

24 29% 

36 

Tam 

220 

182m 28 

3 6% 12% 

(232 ) 

240 

5 1217% 

13 17% 

23 

Vodrisne 

183 

20 34% - 

2 S% 

— 

H») 

200 

8 15 2D 

7% 14 17% 

325 21% - - 

3% - 

- 

(338 ) 

354 

5 - - 

16% - 

- 

Option 


Bet Jaa Apr 

Oct Jin Apr 

BAA 

476 

22 3m 42% 

1 11 

15 

(492 ) 

300 

1% 18 27% 

9 23 

27 

■noaowv 

500 17% 304m 

1 18% 24% 

rsis i 

550 

1 9% 21% 37% 50 

54 

acta 


Oac Iter Jtai Oac Mr Jua 

AfeteyNril 

390 

31 40 4m 

6 18 23% 

(406 ) 

420 

13 23% 27 

22 34% 39% 

Aarired 

29 

4 9 B 

1% 2% 

3% 

(27) 

30 

1% s m 

4% 6 

6% 

Barctsyi 

550 37% 52 89% 

13 26 

33 

(*5») 

900 12% 2m 36% 36% 53% 

61 

Boa Ctrda 

260 

34 38 35% 

6 10% 

17 

(274 ) 

290 

12 19 25 

IS 19 27% 

Brian Gas 

290 2m 3m 37% 

3 7 

12 

(280 » 

280 

13 21% 25% 

9% 16 

21 

Ohm* 

180 

22 28% 31% 

5 S% 

13 

n«> 

200 10% 15% 21 13% 19% 23% 


MUmfl 160 12 17 IBM 5N 8 13 

(-168 ) 180 3% 8 10H 18 20* 28 

iMtri 130 11 14H 17H «H 11M 13 

(132 ) 140 6 9» 332 12M 17X 18» 

tel RDM 480 29 41 S2M 13 21 M SOM 

(*475 ) 500 11 2ZH 33 36 43 52 


Scat nmr 330 28 3BH 45 10 19 23H 

(*343 ) 380 TOk 21 to 33 2BH 35 39 

5am 100 12 15 WN 3 4 8 

(-108 ) 11Q 5H M 11 5M U 11M 

Rita 220 IE 22 25 3 10M 16H 

(*224 ) 240 6H 12 18 IBM 2TH 20 

Tarmac 120 11 * 17 21 8 9 13 

(*124 ) 130 B4 12 18 11M 14H IB 

Thom aa SS0 3Dtt«4K9ltt 17 34 43 
(V71 ) T0002TO 39 82 41 39K 87 

198 200 22 28 S 3H 8K 11H 

(514 ) 220 9K14H1SH 12 19 22H 


ran) 


200 ISH'Wi 25H 7 12 15 

220 5 1014 WH 19 24 2S1S 

BOO 4BM 87 79 17 30 43 
(•622) BSO ZD4C14 5443X 58 8814 
Optfan Oct Jm Apr Oct Jan M 

Sam 650 39 58 10 1 13 2714 

(-S84 ) BOO 1 20 43 17 3B4 52» 

tOCnpXa 6S0 3T54 7514 89 1 1614 3514 

r®8 ) 700 2 4514 3014 Z>4 3654 60 

ftamn 4S0 4 - - 4 - - 

(451 ) 403 1 - - 1414 - - 

Opooa Ew NO Mf m» ftp nay 

U+Aica 160 1514 21 24 2X 6 9ft 

(171 ) 160 4 11 14 12 IStt 20 

i recutty prtcri Piaitem ritown am 
I arir prtsaa. 

! 51^81 Cc*E 17,860 


PutC 33^31 


FT GOLD MINES INDEX 



Oct ft thg 
29 ta fey 

M W TNT 

» a 

Raapta* 
KM ft 

ana* 

U# Uta 

fl* Mm tate.ro 

226BJ7 -4LS 

Z2BE57 ZZ86J0 199936 

1.88 

2387.40 176002 

■ Raptaori bxScm 

Africa (16) 

3684J® -04 

367779 370053 2715.18 

170 

371137 2304.45 

AofrriBriiP) 

287089 ~Z5 

295149 2907.38 219753 

1-88 

301359 2161.17 

IM Anrtca (IT) ' 

176435 -03 

T789l4S 177354 1711.77 

078 

203SjB5 1 463.11 


Tha ntiuM Tmre Uritad 1004. 

Rguw to hnrtn— ritov nntw ol com u ri re. Barit US Datan. Bare Wtoaa: IOOOJX) StfiSBZ. 
Ptfatocrerer Grid Utore tadac Oat 20i 28EA : ifefe drevc pokm VreragK 2213 1 Part* 

Laaret ^riere ton tranMfa tar Ha a^faA. 


RISES AND FALLS YESTERDAY 


RlaM Falls Sana 




81 

13 

10 

1 


0 

Mnnl Extinction 

60 

52 

130 

48 

84 

404 

105 








13 







314 

32 



31 



Totals 

508 

583 

1489 


Data batrt on thoaa convaM aaaad oh ite London tore Sattca 


TRADITIONAL OPTIONS 

FhatOaaBnea October 24 Expiry Janurey28 

Last Darings November 4 Settlement February 0 

Cri to: Air London, Aatva Pat, Bite Rfa, BTR Wtta-W. Do. -88, Hanaon Wrt»^ 
KbflriTBai Rai. NaxL. Shoprtta, W n wacl o y Mng. Pite: Shoprtte. Wwariay Mng. Puts 
A Cola: Air London. Next 


LONDON RECENT ISSUES: EQUITIES 


taaua Amt MtL Ckm 


Price paid 
p to 

cap 

(bn) 

IflBI 

High Low Stock 

price 

P 

+7- 

Net 

<fe. 

Dir. Ore 
cov. ytd 

WE 

not 

re 

FP. 

068 

eh 

4 APTA Write. 

5 


_ 

_ 

- 

re 

- 

FP. 

088 

73 

83 Arterial Eata. 

68 


- 

- 

re 

re 

- 

FP. 

150 

1*7 

1 Conrt Foods Wrts 

1*4 


- 

- 

- 

- 

63 

FP. 

102 

68 

to PIHllX 

87 


RN071 

03 

1J 

8.4 

- 

FP. 

504 

124 

108 HRnxtic Ctck 

120 

+4 

RN075 

ZB 

08 

40.4 

115 

FP. 

39.1 

126 

115 Samoa Workshop 

128 


RN4.B 

22 

4jB 

11D 

- 

FP. 

224 

35 

27 Ctexp Dw Cto Wts 

27 


- 

- 

- 

- 

- 

FP. 

Jon 

62 

68 liambroa Sm Asian 

68 


- 

- 

re 

re 

- 

FP. 

2.70 

30 

27 Do Warrants 

27 


- 

- 

re 

- 

160 

FP. 

175 

195 

I7B Moddalnd 

185 

42 

moo 

22 

4.1 

7 JB 

160 

FP. 

413.7 

181 

160 Mon ED A F 

161 

♦1 

RN8.6 

1.8 

6.7 

09 

- 

FP. 

3300 

466 

475 ProSic Inc. 

480 

42 

- 

- 

- 

re 

138 

FP. 

507 

W9 

136 Sorvtsarr 

146 


RM1B 


13 

23.7 

- 

FP. 

111.0 

379 

355 Templeton £ Haw 

359 

42 

- 

- 

■ 

- 

- 

FP. 

103 

212 

175 Do. Wits. 2004 

177 


- 

- 

- 

re 

- 

FP. 

014 

61 

67 Whrtctwreii 

01 


RN1.25 

3D 

2D 

127 

- 

F.P. 

202 

380 

338 WnmhHn Wst» 

338 

-2 

- 

- 

- 

- 

- 

FP. 

4.74 

330 

320 Da NV 

320 


- 

- 

- 

- 


RIGHTS OFFERS 


taaua 

Amourt 

latmC 





Closing 

4CT- 

Price 

paid 

Renun. 

1994 



price 


P 

up 

date 

High 

Low 

Stock 


P 


17 

t* 

2712 

2pm 

’kpm 

APTA Hearth 


'♦pm 


118 

NB 

28/11 

20pm 

9pm 

Cattles 


9pm 


w P 

Nl 

2SM 

1 ipm 

15%xn 

Vpm 

Dragon Ol 


fapm 


180 

M 

9/12 

5pm 

Skiw 


7pm 

42 

Il330p 

M 

29/11 

SBpm 

28pm 

Smurfit (1) 


28pm 

-2 

5 

m 

18711 

2\pm 

to»n 

^Untan Square 


4ipm 

-h 

FINANCIAL 

TIMES EQUITY INDICES 






Oct 28 

Oct 25 

Oct 24 

Oct 21 Oct 20 

Yr ago 

•Ugh 

•Low 

Otonry Sham 

22905 

2301.8 

23253 

23307 23502 

23906 

27133 

2240.8 

Old. <fi». yiekl 

4.47 

4.47 

441 

441 437 

339 

4JH 

343 

Earn. ytd. 96 U 

037 

037 

031 

029 022 

431 

051 

3.82 

P/E rate net 

1008 

1008 

1024 

1030 1050 

2730 

3343 

1094 

WE rate til 

17.61 

17.02 

17.78 

17.84 1003 

25.73 

3000 

17JS 


"Far 1994. Ordnary Snare todax tinea canptefare Ngh 271 XB zmw, law <OA san/m 
FT Ordnrey Share We bare dare 1/7/35. 


Onflnary Sbare hourly c hregw 

Open OlOO IOlOO 1UOO 12JX) 13LOO 144» 15JW ItLOO Hltfi Low 
230EL0 23145 23159 2317.0 23131 23119 23142 23053 23041 2322.1 22952 


Oct 26 Oct 25 Oct 24 Octri Od 20 Vr ago 


SEAQ buyaJra 21225 24,873 22^54 22,025 

Equity Imowar [Em)t - 12115 9473 9429 

Equ3y tergoifUT - 27912 2M78 24254 

Sharoo tmdad Mt - 467.1 420.fi 437.0 

1&c to aao Wi > o iNfca t biriham and mobh nanorer. 


23405 

14072 

25288 

5551 


30281 

13055 

32258 

te72 



•terireanutrjure WlreMfriBRfHacriaiwIiaDdinicn. 5 

WraA«ri>(nwmbre 4 lyMri 9 Bterey&rtwUaiilBL P y f ia L illM. ft Oa Otf 

nocoanLannyiia am. otrihral ite laaAre Snft todnaonal IV iu V» Brefeomgo 






FINANCIAL TIMES THURSDAY OCTOBER 2? 1994 


LONDON SHARE SERVICE 


B«oaVtaRa_J3 


toS 




u 

toS ZZ 


80 27 

WZ8 833 

+4 1B7 85 

181 191 121 

UftaJ -1 169 139 


9U f i ‘Ut a 

ft Jj b a 


7b 

- 2 *. 


Airtwtot 

AnstxififTU^-VB 


YU 


1 Crt 

HE 

U 
i S3 

263 

1 45 

135 

53 

94 

i 7 A 

105 

\ 05 
5.1 

7 ! 

so 

18 

45 

75 

14 

109 

105 

— 

115 

— 

87 

122 

OS 


23 

_ 

41 

45 

25 


11.1 

m 

75 

_ 

04 

* 

4.4 

10.1 

44 

10.1 

S3 

117 

04 

05 

,41 

03 

241 

55 

105 

95 

on 

17 

* 

15 

111 

OB 

515 

05 


25 

05 

109 


05 

243 

05 

47 

10$ 

ae 

47.6 

07 

623 

27 

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15$ 

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143 

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57.7 . 

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311 J 

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170 

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1U 
24 7 JO 
80 U4 
SB ZU 
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122 
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■s ^ 

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Bib 6Z 

884 -10 BOB 

3C1K 481 

79 +1 177 

88 -1 141b 

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190 +2 240 

^ 

C18B £130 


2711, t-3 nil 

«( *W| 718 


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164 

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238 

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418 

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2007 

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1878 

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1510 

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498 

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55 



16b 

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FINANCIAL TIMES THURSDAY OCTOBER 


27 1994 






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WARNING 


It has come to our knowledge that unscrupulous 
middlepersons have been using the name of 
OMNI - COMMERCE SA. to promise sums of money 
supposedly provided by that Company to persons or 
businesses seeking funds. 

These middlepersons assure the would be borrower that 
they can obtain any appropriate guarantee for them to be 
granted such funds. Taking undue advantage of the 
borrowers, they request a commission of between 
USS TEN THOUSAND AND FIFTY THOUSAND (or 
the equivalent in local currency), payable in advance. In 
their urgent search for help the borrowers pay the 
commission and, needless to say, no guarantee is ever 
obtained and the funds never materialise. 

OMNI - COMMERCE S.A. ISSUES A SERIOUS 
WARNING TO POTENTIAL BORROWERS TO 
BEWARE OF SUCH OFFERS. OMNI - COMMERCE 
SA. wants it clearly established that any genuine offer 
shows explicitly that Us costs, as well as those of any 
middleperson duly appointed if any, must be deducted 
from the sums borrowed at the date of the actual transfer 
of funds to the borrowing party. 

OMNI - COMMERCE SA^ CH - LAUSANNE 
Paris Representative Office 
91 Rue de Comedies 
75017 PARIS 
Tel 33) 147 63 46 19 
Fax 33) 147 63 71 28 
Telex 651419 IKERMAN F 


WARNING 


































































FINANCIAL TIMES 


THURSDAY OCTOBER 


27 1994 


CURRENCIES AND MONEY 


MARKETS REPORT 


Optimism about EU poll helps Swedish krona 


The Swedish krona was the 
main mover on the foreign 
exchanges yesterday as the 
currency continued to benefit 
on optimism about a positive 
vote next month to join the 
European Union, writes Philip 
Gautith. 

The krona was also helped 
by details of a planned fiscal 
austerity programme to deal 
with the country's large budget 
deficit The currency rose as 
high as SEr4.71 t from Tues- 
day’s close of SKr4.728, before 
giving up so™*? ground to fin- 
ish at SKr4.723. 

In quiet trading conditions, 
the dollar moved In a fairly 
narrow range, untroubled by 
the day's data releases. It 
closed in London at DM1.4353 , 
from DM1.492, and at T97.035, 
from Y96-86. 

Sterling had an uneventful 
day, with the trade weighted 
index ringing at 80.5 from 80.7. 

The Bank of Portugal 
trimmed two money market 
rates, cutting its regular rate 
for dr aining funds to 8.5 per 
cent, from 8.75 per cent, and its 


POUND SPOT FORWARD AGAINST THE POL 


Day’s MU 
high low 


average repo rate to 8JJ7S per 
cent from 9 per cent The 
escudo closed unchanged 
against the D-Mark at ES102.1. 

In Greece the interest rate an 
12 month treasury bills fell by 
50 bass points to 19 per cent 
The rate on three and six 
month hills was cut by 150 
basis points to 16.5 per cent 
and 17.5 per cent respectively. 

■ Although the latest opinion 
polls show sentiment towards 
the EU to be evenly balanced 
in Sweden, markets have 
priced in a pro-EU vote at the 
November 13 re fer end um . 

Also supporting the currency 
is the new government’s appar- 
ent commitment to reduce the 
budget deficit The most recent 
development was the call by 
Mr Goran Persson, the new 
social democrat finance minis- 

■ hand In Km York 


Oct 28 

— Uteri— 

-nw. doaa - 

Eapot 

13340 

13380 

i teh 

1.8333 

13373 

Smut 

13327 

13388 

1 yr 

13213 

13261 


ter. for all government depart- 
ments to cut spending by 20 
per cent 

The government is also com- 
mitted to cutting SKrlSObn off 
the deficit by 1998, though 
there is some scepticism about 
whether lower interest rates 
and higher employment pro- 
vide a plausible basis for 
expecting the deficit to fall. 
The prime minister, Mr Ingvar 
Carlsson, is also on the record 
saying that if the Swedes do 
not vote yes at the referend um , 
then even greater policy cuts 
will be required. 

Other Nordic currencies 
were also firmer on the back of 
the krona, with the Finnish 
partita touching a high of 
FM3.Q25 to the D-Mark. 

■ The Bundesbank council 
meets today for the first time 
since the German elections, 
amid conflicting views on the 
policy outlook. Official rates 
were last moved on May 11. 
while the repo rate has been at 
4.85 per cent since July 27. 


Swedish kuwM 

' Againsf the D-Mark (SKr per DM) 

;css 



a reasonable prospect of the now equally vulnerable to 
Bundesbank announcing a fur- strong and weak economic 
ther fixed repo, but trimming data." He said strong data 
the rate by, say, five basis would fuel fears of higher 
points. She said month-end vol- rates, adding to concerns that 
atility made a variable repo the Fed had tightened policy 
unlikely, as this could result in too little, too late, while 
rates being hid up, confound- weaker data would reinforce 
mg the signals the hank may the view that the Fed would 


want to send. 

But y este rday evening, Mr 
J ohann Wilhelm Gaddum, the 
Bundesbank deputy president, 
fann ed speculation about a 


Source Deasbeesn 

20 economists surveyed, only 
three of the nine still forecast- 
ing further monetary easing 

expect this in 1994. On Tuesday 
economists at six leading insti- 
tutes said there shmiM he no 
more major reductions in offi- 
cial rates. 

Ms Alison Cottrell, interna- 
tional economist at indflar Pea- 


A Reuters poll found that of body in London, said there was 


that any switch in the form of 
the tender means a change in 
the fine on interest rates." 

■ The dollar bad a steady day, 
but sentiment remains reso- 
lutely negative. Mr Neil MacK- 
innon, chief economist at Citi- 
bank, commented: “DML50 is 
now turning out to be a resis- 
tance level, rather than a sup- 
port leveL" 

Mr George Magnus, interna- 
tional economist at S.G. War- 
burg, provided a counsel of 
despair, saying: “The dollar (is) 


0S 28 E * 

Hungary 172JW1 - 172238 10U80 - 1BW80 
ban 286LOO - ZffiaflO 17481)0 • 179000 
KuMt 0.4839 - 04850 02902 - 02870 

Mrt 374500- 374993 229600 - 228653 
Hi 500065 - 500830 306330 -306830 
IU£. 53878 - 19995 16715 - 33735 


Oat 26 


Closing 

mid-point 

Europe 

Austria 

pch) 

173071 

Bagfcnr 

(BFd 

S0JS27T 

Danmark 

(DKr) 

£5333 

Hntand 

fl®M) 

7.4045 

Franca 

(FFr) 

£3549 

Germany 

(PM) 

2j4411S 

Gkeece 

(Dr) 

376385 

Ireland 

pa 

1.0100 

Italy 

(U 

2494.09 

Ltixambourg 

£ft) 

603271 

Netherlands 

1H) 

2.7363 

Norway 

{NKit 

10.0108 

Portugal 

(Es) 

249391 

Spata 

(pat 

203361 

Sweden 

(SKr) 

113398 

Swtonrtand 

(SFr) 

2.0398 

UK 

(Q 

- 

Ecu 


13812 

SORT 

- 

£912839 

Amarieaa 

Argemina 

(Peso) 

1.0325 

Brazil 

<pn 

TJ3950 

Canada 

(CS) 

2.1993 

Mexico [Now Paso) 

£5907 

USA 

(a 

1.6326 

PacMc/MkMa Enat/Africa 

AustndU 

(AS) 

2.1982 

Hong Kong 

(HKS) 

123156 

Inda 

(Rs) 

513131 

Japan 

W 

156415 

Maiaytan 

(MS) 

4.1651 

New Zealand 

(NZ S> 

23620 

PMfcpinitt 

(Paso) 

40.6506 

Saudi Arabia 

m 

£1238 

Singapore 

(SS) 

23040 

S AMca (CotiL) 

(R) 

£7128 

S Africa (Fin) 

(R) 

£4323 

South Korea 

(Won) 

130135 

Taiwan 

OS) 

423585 

Thailand 

(BO 

403689 


One month Three months One year Bank of 
Rote %PA Rate %PA Rate %PA Ena. Index 


173353 17.1775 

173027 

03 

17.1909 

0.4 

_ 

- 

115-4 

Austria 

(Sch) 

105400 

*00315 

350 - 450 

105450 105100 

1034 

OO 

103398 

OO 

10485 

0.7 

1043 

50.4200 SO. 1810 

502427 

-04 

501421 

07 

49.7471 

13 

1173 

Belgium 

Eft) 

307660 

*0028 

520 - BOO 

303600 307340 

30766 

03 

30.736 

04 

30686 

02 

1001 


93260 

93286 

03 

93473 

-03 

9.5787 

-03 

117A 

Denmark 

(OKI) 

£8395 

*0313 

380-410 

£8524 

53295 

53432 

-03 

53515 

-03 

£8945 

- 03 

105.7 

7.4580 

73940 

. 


- 

. 

- 

- 

89.7 

Finland 

0*0 

43355 

-0001 

305 - 405 

43505 

43305 

43382 

-02 

4331 

04 

43355 

0.0 

833 

£3915 

£3502 

£3546 

0.1 

£3491 

03 

£2882 

03 

1103 

France 

CPft) 

5.1177 

+0.0085 

162 - 192 

5.1390 

£1118 

£1198 

-03 

£1177 

03 

£1115 

Ol 

1073 

£4497 

2^4400 

2.44 

0.6 

2.4385 

0.8 

2.4038 

13 

126.8 

Germany 

m 

1.4953 

*00033 

950 - 955 

13002 

1.4931 

1.4S54 

-Ol 

1.4336 

03 

1.4833 

08 

1073 

377.478 375326 

- 

. 

- 

- 

- 

- 

- 

Greece 

(Or) 

230350 

+03 

400 - 700 

231.150 230.090 

23034 

-13 

231375 

-1.4 

233325 

-1.4 

6£5 

1.0152 

1.0090 

13098 

02 

1.0005 

03 

13112 

-ai 

106.0 

Ireland 

0£) 

13164 

+0.0001 

156 - 171 

1.6172 

1.6100 

13163 

on 

1.0165 

0.0 

13034 

08 

- 

250538 249235 

250034 

-33 

251139 

-23 

256339 

-23 

743 

Italy 

W 

1927.73 

*033 

735 - 610 

153335 

1525.76 

153228 

-3.8 

1539.73 

-3.1 

158123 

-33 

75.1 


Luxembourg (Ut) 30.7660 
Nethartands (Ft) 13781 


-00089 

964 - 002 

22088 

2.1980 

2.1986 

04 

2197 

0.4 

2.1916 

04 

87.0 

-00199 

554 - 969 

5.8220 

£5850 

- 

- 

- 

- 

- 

- 

- 

-00041 

322 -329 

13388 

1.6310 

13319 

03 

13313 

02 

1.6206 

0.7 

60.7 

-03233 

980 - 004 

22202 

2.1380 

2.1992 

03 

22005 

-02 

22168 

-03 

_ 

-0032 

120 - 191 

123711 123039 

12.6147 

0.1 

123142 

ao 

123072 

0.1 

- 

-01302 

980 - 282 

51.4380 51.1690 

- 

. 

- 

- 

. 

. 

_ 

-0118 

340 - 489 

150970 168220 

157375 

32 

15636 

3.7 

151.646 

42 

1882 

-0006 

634 - 888 

4.1790 

4.1622 

. 

. 

. 

- 

. 

. 

_ 

-OOl 

592 - 647 

23784 

2.6590 

2.0869 

-1.8 

23737 

-13 

2396 

-12 

- 


Norway 

Portugal 

Spam 

Sweden 

Switzerland 

UK 

Ecu 

SORt 

Americas 

Argentina 

Braz 8 
Canada 


tHKr) £4396 
(Es) 152.700 
(Pta) 124.505 
(SKr) 7.0884 
(SFr) 1.2495 

(Q 1.6328 

- 1.2743 

- 1.49545 


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CROSS RATES AND DERIVATIVES 


td to the malar 
bibod) dta and 


Argentina (Peso) 1.0000 
BrazK m 04545 

Canada (C$) 13472 

Mexico (New Peso) £4245 
USA ft 

Padflc/MMcSa Eeat/AMca 
Austrola (AS) 13471 

Hong Kong (HKS) 7.7275 
bvfia (Rs) 31.3700 

Japan (Y) 973350 

Malaysia (MS) 23513 
New Zealand (NZ5) 1.6306 

PMBppHiea (Peso) 243000 
Saudi Arabia (SR) 3.7511 
Singapore (SS) 1.4725 
S Africa (Com.) (R) 3.4993 

S Africa 0=ta.) (H) 33400 

South Korea (Won) 797.250 
Talwoi (TS) 28.0675 

Thatend (8t) 2451 0Q 

fSDR«tetorCW2& BUfoOrn r^raaa 
but we «x*ad By curate omraet ratal 


403126 520 - 800 308600 30.7340 30.766 0.0 30.738 0.4 30.688 OS 

40.0024 757 - 764 1.6850 1.6734 1.6782 -0.1 1.6743 £4 1.6630 £7 

■*00095 960 - 010 £5247 £49«0 £5032 -0.7 £516 -13) £552 -08 

4036 600 - 600 1 53.750 152340 153.375 -53 154/45 -43 158.45 -£6 

-002 450 - 560 124.930 124310 124.78 -2.7 123.76 2.4 127345 -23 

400118 645 - 723 73871 7.0349 73831 -23 7.1159 -2.7 73809 -3.0 

403045 490-499 13543 13465 1348 1.4 13445 1.6 1327 13 

-03041 322 - 329 1.6398 13310 13319 03 1.6313 03 1.6206 07 

- 735 - 750 13750 13692 13736 07 13732 £3 13708 03 


-£0001 999 - 000 1.0000 £9999 - - - - 

400015 540 - 550 06550 03540 - - - - - 

-0302 469 -474 13485 1.3468 13471 0.0 1.3467 £1 1352 -04 83.6 

-00035 220 - 270 3.4310 £4220 34255 -04 3.4273 -03 3.4347 -0.3 

93.7 


-03 13481 -0.3 13554 -06 84.7 

0.1 7.7262 Ol 7.736 -Ol 

-S3 313 -23 - 

23 96315 3.4 93.58 33 1504 

43 23306 33 2.6043 -2.1 

-0.7 13334 -07 13387 -03 


-00108 466 - 475 13569 13466 13474 -03 13481 -03 13554 -06 84.7 

- 270 - 280 7.7280 7.7270 7.7266 0.1 7.7262 Ol 7.736 -Ol 

- 67S - 725 31.3725 313675 31.466 -S3 313 -23 - - 

*0.175 100 - 600 973200 96.9500 96305 23 96315 3.4 93.58 33 1504 

403028 508-518 23520 23462 23421 43 23306 33 2.6043 -2.1 

-0002 292 -319 13337 13292 1.6316 -0.7 13334 -07 13387 -03 

-03 500 - 500 CTy tnn 243000 - - - - . 

*00005 506 - 513 3.7513 £7507 £7524 -04 £7565 -03 3.7751 -06 

*03018 720 - 730 14740 1.4635 14712 1.1 1.4833 09 14625 07 

*03065 965 - 000 33095 £4900 33148 -S3 £5431 -S3 3.6198 -3.4 

-031 300 - 500 £9550 £9300 £9737 -10.3 4.0325 -94 - 

-1495 100 - 400 798300 797.100 80£2S -43 803.75 -£3 82235 -3-1 

*00147 650 • 700 263700 263400 263875 -09 26.1275 -03 

- 000-200 243200 24.6970 243625 -33 25.11 -33 2639 -2.7 

i *r tfw Qatar Spot able mow only On tear idea ctadmat pHea F orward at m are not drtefly quoted at ffi a marxet 
. UK Maid 4 ECU quoted n US Money. 4 P. Mragwi nominal tncScsm Oa2S. Bom taa mg a 1890-100 


EXCHANGE CROSS RATES 


Oct 28 


BFr 

DKr 

nv 

DM 

K 

L 

n 

Mb' 

Es 

Pta 

SKr 

SFr 

£ 

C$ 

S 

Y 

Ecu 

Belgium 

PR) 

100 

1838 

18.63 

4381 

2011 

4966 

£448 

21.13 

4982 

4043 

2298 

4360 

1391 

4370 

■lya 

31 £4 

2551 

Denmark 

(DKr) 

52.68 

10 

£783 

2561 

1359 

2818 

2370 

11.13 

281.4 

2132 

1209 

2139 

1349 

2307 

1.713 

1882 

1344 

nance 

FBI 

eaii 

1141 

10 * 

2322 

1209 

2985 

3275 

1270 

2983 

2432 

1330 

2441 

1.197 

2632 

1355 

1893 

1333 

Germany 

(DM) 

2037 

3306 

2422 

1 

0414 

1022 

1.121 

4247 

1021 

8324 

4.723 

0835 

0410 

0901 

0669 

8438 


Ireland 

Pti 

49.72 

9439 

8271 

2417 

1 

2469 

2709 

1050 

2407 

2012 

11.42 

2019 

0990 

2177 

1317 

1563 

1268 

Baity 

W 

2014 


0235 

0398 

0.040 

100. 

O110 

0425 

9302 

8.148 

0482 

0082 

0040 

0088 

0065 

£351 

0061 

Netherlands 

P) 

1828 

3484 

3353 

0392 

0389 

9113 

1 

3378 

91.08 

7427 

4214 

0745 

0365 

0804 

0597 

5739 

0468 

Norway 

0«0 

4723 

8385 

7374 

2301 

0.952 

2361 

2579 

10 

2343 

1813 

1087 

1.922 

0343 

2073 

1339 

1493 

1207 

Portugal 

m 

20.16 

3325 

3252 

0380 

0405 

1001 

1398 

4258 

100. 

8134 

4327 

0818 

0401 

0882 

0855 

6338 

0514 

Spam 

(PW) 

24.71 

4.891 

4.111 

1201 

£497 

1227 

1246 

5221 

1226 

100 

5374 

1.003 

0492 

1.082 

0804 

7735 

0.630 

Sweden 

(SKr) 

4336 

8268 

7245 

2117 

0376 

2183 

2273 

9202 

21£1 

1762 

10 

1.768 

0887 

1307 

1318 

137.4 

1.111 

Switcertraid 

(SFr) 

24.63 

4375 

4397 

1.197 

0485 

1223 

1242 

5204 

1222 

9ft 66 

6.SS5 

1 

0490 

1.078 

0801 

77.89 

0328 

UK 

(8 

6022 

9333 

£354 

2441 

1310 

2484 

2738 

1061 

2492 

2032 

1133 

2039 

1 

2188 

1.633 

1504 

1281 

Canada 

PS) 

2284 

4235 

2799 

1.110 

0459 

1134 

1244 

4325 

1133 

9241 

5243 

0927 

0455 

1 

0743 

7203 

0583 

US 

(S) 

30.75 

5338 

£118 

1.485 

0318 

1527 

1375 

£497 

1526 

124.4 

7381 

1248 

0312 

1347 

1 

9730 

0784 

4apan 

ro 

31.70 

6318 

6274 

1341 

0838 

1574 

1.727 

6398 

1573 

1263 

7278 

1287 

0331 

1388 

1331 

100 

0809 

Ecu 


3920 

7442 

8321 

1306 

0788 

1947 

2138 

£283 

1943 

1583 

9301 

1392 

0781 

1.717 

1275 

1227 

1 



uj m 

EQUITY AND INDEX OPTIONS 


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Open 

Latest 

Change 

rtgh 

Lora 

Eat vol 

Open int 


Op«1 

Latest 

Change 

M0i 

Low 

EsL vd 

Open tat 

Dec 

0.6632 

03889 

-00006 

08896 

08870 

47.110 

89.152 

Dec 

13387 

1.0359 

-00028 

13387 

13322 

29.196 

60341 

Mar 

0.0690 

08702 

-00016 

03702 

06690 

181 

4500 

Mar 

13436 

13442 

-00030 

13446 

13430 

664 

6371 

Jun 

_ 

06728 

- 

' 

- 

1 

614 

Jun 

■ 

1.0575 

- 

- 

- 

5 

441 

H SWISS FRANC FUTURES (MM) SFr 125300 par SFr 



■ SWUNG FUTURES (IMM) £62300 pte C 




Dec 

0.8035 

0.6022 

-00017 

05035 

079® 

191947 

40728 

Ooc 

13354 

1.8340 

-03034 

73388 

13308 

10333 

43,129 

Mar 

03045 

03060 

-00017 

03060 

08040 

153 

1.460 

Mar 

13320 

13330 

-00032 

13340 

1.6308 

28 

479 

Jim 

- 

03095 

- 

- 

08090 

5 

136 

Jut 

- 

13278 

- 

- 

1.6278 

1 

8 


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Futures Call ■■■ 


UK INTEREST RATES 


LONDON MONEY RATES 

Oct 28 Over- 7 days One Three Six One 

night notice month months months year 

Interbank Staring 5 ■ Sh 6% - 5»s - 5% 6-5^ 6,; - 8/, 7,i - 7 A 

StartngCOs - - 5A - 6J3 5U-6S 6*-6*t 71* - 7>i 

Treasury Bits - - 5* - 5A 5* - 5% 

Bank Q*» - 5H - 5& 6* - Sh Oh - 9h 

Local authority depa. S*t - 5^ 514-51! 5ft - 5A 6*4 - 5% «A - 7& - &U 

Karaite Market dapa 4h ■ * 5 1 * - 5 1 * 


UK daoino bank base landtag rata 5\ per cent from September 12. 1904 

Up to 1 1-3 £6 6-8 9-12 

month moral m o nths etontt! roqr ttha 

Certs of Tax dap. (£100300) It; 4 3\ 3>a 

Cota el T» dan. under C100JM0 4 1 l^pc. Oauoata wnhitewn tar cam Tipc. 

Aw. undw raw ol dtacoia SASSSae. BCOO taad ma Sdg. teat Rms. Mata up day Sap 30. 

1 994. Atpooa rata tar pwtad Oct 20. 1984 n Nw 25. 1994. Schamea RS 0 7-OSpc. Rafaranoa rata tar 
Btolod Geo l. IK M Sep 00. 1004 Schemes Itf 6 V S.73Bpa. Pr a nce Houaa Baas Rtoa Opo tram Od 
1, 1994 

■ two month smurannuns (uffe) csoo.ooo points of iQOft 



Open 

Settprice 

Change 

ngh 

Low 

EsL wrt 

Open M. 

Dec 

93.42 

3342 

-0.01 

93.46 

83.41 

13183 

143052 

Mar 

92.55 

92.53 

-O 03 

8230 

9231 

25241 

74578 

Jut 

91.94 

91.89 

-005 

9137 

9138 

7289 

56721 

Sep 

91.51 

91.46 

-0.06 

91.55 

91.45 

4092 

52382 


EMS EUROPEAN CURRENCY UNIT RATES 

Oct 26 Ecu can. Rote Change 96 V- from 


Nethertanda 2.19672 2.14771 *£00068 -233 £84 

Ireland £808628 0.792792 -0302977 -136 534 

Belgium 402123 394386 *00004 -132 531 

Germany 134964 1.91637 *£00099 -1.71 £27 

France 633863 636188 *030325 £36 £11 

Oermaric 7.43679 7.48164 *£00092 030 236 

Portugrf 192.864 196.751 +£177 131 134 

Spain 154350 159312 -£177 £48 £00 

NON ERM MEMBERS 

Greece 264.513 295.269 *039 1133 -730 

Italy 1783.19 1958.13 -33 £20 -634 

UK £786749 £783878 -£000619 -040 £99 

Ecu eenM rataa ear by Ow Euepaon Conaidraton. Cunondaa era In deacanteig ratarte m 
Paroantoee changaa are tar Baca patera change denote* awe* currency. Otvergeaoe a 
ratio between rwaeiraeda:1hapecan t a o egHei e i 4» be tw— i the acbelinehat and Ecu c 
kr «wmj. and aw maximum p wrnraed pa nraaig e d evteUgn a* Otecwrancy'a rnaakei ■ 
Ecu central rate 

C17/BTS3 SiaranQ and ttatan lira supandad bom BW. A<4uaanant cdcUMed by ttw Rnan 


■ PHKJUMLPHA M t/3 OPTIOWS £31350 (cents per pound) 


Change 
on day 

ft*/- from 
can. rate 

ft spread 
V weakest 

Civ. 

tad. 

*000088 

-2J23 

534 

_ 

-0302977 

-136 

534 

13 

*00084 

-132 

531 

74 

*000089 

-1.71 

£27 

. 

*000325 

036 

£11 

-3 

*0300® 

060 

238 

-4 

+0177 

131 

134 

-10 

-0177 

3.48 

OOO 

-24 

+039 

1133 

-730 


-33 

non 

-524 

_ 

-0000819 

-040 

£89 

- 



Tbcbcaia yoer tec Code 
you. rfPtatod Manx) 
naclG ledn He. 9-11 


cfta nc Mtetataraatdp 
One ae 071-028 7Z33 erne 
Gadrm, Inratna SW1WOBX 


FullerMoney - the Global Strategy Newsletter 

Covering tone's, sleeks, currencies 3 cemmod-tses. including v.no'o to 
invest. Fu!/e.’.*,fsney is written by Dev:d Fu :: cr To- intoiocitioncl -nvcslcrs 16 
pages, monthly. Single issue 215 c: L<55*2. cn;iu.':l £‘S£ -- UK i Eurcpc. 
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Haded on APT. M Open brnraat flga. am lor prmtaua day. 


■ SHORT STB£i»tqOPT1OICl(LJFnE)E50a000pohlt3 Of 100% 


Strike 

Price 

Nov 

- CALLS - 
Dee 

Jan 

Nov 

— PUTS ~ 
Dec 

Jan 

1350 

830 

£39 

£56 

- 

014 

040 

1375 

£88 

RW 

836 

003 

041 

081 

1300 

3.58 

428 

4.78 

018 

033 

138 

1325 

1.76 

2.67 

aon 

0.79 

130 

2.42 

1360 

0.61 

137 

2.16 

2.14 

£08 

339 

1376 

012 

082 

133 

4.10 

4.82 

534 


Strike 

Price 

Dec 

~ CALLS ~ 
Mar 

Jun 

Dec 

— PUTS - 
Mar 

Jun 

9325 

028 

a io 

012 

an 

0® 

1.48 

9390 

0.13 

£05 

008 

021 

1.02 

1.69 

9375 

005 

a® 

005 

038 

134 

131 


Pranto ue day’s «0U Ceta 6£33B Putt 17 JX2 . Pie». aayra open kn, CM* 430480 Pub 391977 


■ THREE MONTH EURODOUAK (IMM) STm points of 10094 


11 Currency or Bond Fax - FREE 2 week trial I 

■ also daily gold and silver faxes 

■ :rom C'rcrt Analysis Ltd 

Anne Whitby 

1 7 S.vsllo'.v Street. Lender WlR 7Hu>. UK - 

Tel: 0171-73*1 7 1 7A 

■ ci':haneeratci.pcci3!:sis tor over 20 y?;rs 

' - 

fax C’.71-JJ?3>76'S 


EaL wL UK CtU 9743 PUD 9189. Previous day* open H, Cala 334361 Pu» 197740 



Open 

Latest 

Change 

High 

Low 

ESL vol 

Open W. 

Dec 

9337 

83.98 

*031 

94.00 

9338 

110535 

432390 

Mar 

9333 

9334 

- 

9338 

93.53 

134,602 

393,748 

Jun 

8338 

8338 

*001 

8£11 

93.07 

96,711 

297333 


r ° , 'aen -,,0+ 


CURRENCY MAHAGSMKtfT 
CORPORATION PIC 
If OMfciwy 

LaataECatSDU 
•at 071-6630300 
Fac 071-9720970 


BASE LENDING RATES 


■ us TnsAsunr Bar putuhes cmm) Sim per ioo% 


Adam & Company ..... £75 

ABad Trust Bank 3.75 

AJBBOPk 5.75 

EHenyAntbadtar 5.75 

BankafBaoda 5.75 

Banco BSbao Vizcaya- £75 

Bar* d Cyprus £75 

Barkafkeiand 375 

Bank of beta .5.75 

BanhotSoottand _5.75 

Barclays Bank - £75 

BmBkofMUEaS — £75 
•Bram SWffcy & Co Ltd 3.75 
CL Bank Ngfertand ... £75 

OtbankNA 375 

QyttesdateBa* £75 

Thg Co-operaSva Bank. 5.75 

CcJlSACa £75 

Craft Lyonneb £75 

Cyprus Popular Bar* J£75 


% 

Qncan Lamta £75 

Beater Bank Umtod— £75 
Financi a l & Oen Bark — S3 
•flotartHon*iQ4Qo_£75 

Ghtaank £75 

•GUmjssMrton £75 

Habb Barft AG Zurich. £75 
•HortnosBenk ....... £75 

HartaUe&Ganby8k.£75 

•FflSamud. .£75 

C.HOSH&CD £75 

Hong k ong & Shanghai £75 
Jtian Hodge Bank.- £75 
•Leopold Joeeph &Sona £75 

Lloyds Bank £75 

MagmjBartcUtf £75 

MtflamlBank £75 

* Mount awftbfl £ 

Nafl/VarimbStor £75 

•ReaBrcttwra £75 


* Rmbughe Guaanuo 
Corpomn Limiled is no 
longer aUhoriaadaa 
atodihghrilufan. 8 
Royal Bfc of Scotland.- £75 

•SriHi & VWmsn Sera . £75 

TSB — £75 

•LWtad BkOl Kuartit-. £75 
IMy Trust Bank Pte _ £75 

Western Trust — £75 

WNtamay LaUnr ...» £75 
YotMAaBarfr ,_£75 

* MenOereoJ London 
ImRihiI BarUig 
AsaodaDon 

* batbMMon 


Dec 

SL57 

9£58 

+O01 

9L60 

94^7 

1,442 

17^15 

Mar 

34.11 

94.10 

*003 

94.12 

94.10 

1J543 

10550 

Jun 

93.64 

93.62 

- 

S3. 66 

93.62 

728 

4,683 


Al Open Kara* eps. aa tor pevttia day 
■ B8WUK OPTIONS {UFF§DMlm points of 100K 



Strata 

Prloe 

Nov 

Dsc 

CALLS - 
Jan 

Mar 

Nov 

Dec 

PUTS 

Jan 

Mar 

9475 

009 

0.13 

006 

010 

034 

038 

037 

041 

9500 

OOl 

003 

002 

005 

021 

023 

055 

061 

9 Eta 

0 

OOl 

OOl 

032 

045 

046 

032 

033 


OLets get Serious. Get Signal © 

Maybe yea need b xtfmaarfaf the G>y *irii tbe iralda am ppwraU danhed 7 
Pcrtaai 9ft ba linle hrataa 7 Talk to Sinai icatoora dm - becnae 


Ex. wjL m Gcfe 1707 Pm 837. Previous cfcy*i open «nU Cato 2W639 Pvt* 18T7S5 
■ EURO SWISS FRANC OFTtOKS(UFF9 SFr 1m poIrtaoflOOM 


SHce 

teJ 

rnc® 

Dec 

- CALLS - 
Mar 

Jun 

Dec 

— PUTS - 
Mar 

Jun 

9578 

0.14 

039 

036 

007 

039 

078 

9600 

003 

004 

003 

021 

039 

130 

9825 

031 

002 


044 

032 



Pctfaapa 9ft h Bltorie haring 7 Talk faSipal icabtea toto- bccnae 
m fi Evutvama - asd at gin yon cbe aupflcr borefi Oran k I 
O OH mm fa tob OccSgori InvestBicaa Software CaUe A price Est-O 
W Oil Loraloi 44 + rth 171 Z3I33S6 IT 


Weekly Petroleum Argus 

The unique source for oil industry ns-.vc. cernments nr.ci 
pdeed Petroleum Argus 


WORLD INTEREST RATES 


MONEY RATES 

October 26 Over 



Belgium d 8 

week ago 

Franco H 

weak ago SH 

Qannsny 4.75 

weak ago 4.8a 


delay a farther tightening. 

Mr Magnus concluded: "Hie 
dollar will be vulnerable either 
until confidence that inflation 
will be kept under control is 


weak ago 
Ita* 

WQjlC 090 
week ago 

ft altz a rimd 

week ago 

us 

weak ago 


4fl SVi 

8V4 m 

81 8H 


variable tender. He said: “One restored or until the currency 
should not rashly conclude forces the authorities' hand.** 


■ The Bank of England 
cleared a £l.35bn shortage in 
UE money markets at estab- 
lished rates. Overnight money 
traded between 3% and 5 per 
cent, and three month LIBOR 
was unchanged at 6 per cent. 


Saritzariand 3* 3fl 4J, 4V. 4<* 

weak ego 38 3a ** j4 

us q 4| w Si 6te 

weak ago 4fl 4| SW S« 8^ 

Japan 214 2ft 21 24 2ft 

waakago 2ft 2ft 2ft 21b 2fl 

■ SUBOR FT London 

knartMMtk Rilng - 6 6fl 6 61 

weak 8qo - 5 5ft 5H 64 

US Deter CO* - 439 £38 £74 632 

week ago - 439 £20 5.52 6.10 

SOn United Da 3H 3* 3» 4 

week ago - 3ft 34 3ft 4 

ECU Unkari Oa ted mac 1 mac 99; 3 <nPw on; « nvra: ftt 1 r 
rata* ora atorad ram tor SI Ora quoted U toe martcat by tour ratorer 
day; The brata anc Banton Thm. toaC of ToNye. Batelaya ad Ka 
MB rate* m ehotai tor Itw damaoOc Monoy Btaaa. US S CDs and 


Three 

su 

One 

Loo*. 

tnlhs 

mtha 

year 

inter. 

6 Vi 

54 

6 & 

7.40 

H 

Sft 

84 

7.40 

Sft 

6 % 

5ft 

£00 

5ft 

sa 

6 ft 

£00 

£15 

£30 

5.G5 

£00 

£15 

535 

£S8 

£00 

5« 

Sft 

7ft 


Sft 

6 ft 

1 n 

“ 

8 ft 

Sft 

104 

- 

8 ft 

Sft 

104 

- 

5-20 

£35 

£74 


5.17 

£30 

£88 

” 

4i 

4 ft 

4H 

toys 

4ft 

<4 

*8 

6.625 

5ft 

sa 

Sft 


Sft 

5ft 

6 ft 

— 

24 

Sft 

24 

2 ft 

2 « 

23 


68 

6 

64 

_ 

54 

5H 

64 

* 

£38 

£74 

632 

- 

£20 

£52 

6.10 

- 

34 

3ft 

4 

- 

34 

3ft 

4 

- 


nr 04. S ueon kwabarh taino 
pt Dura at Item aodl tmUng 
rand Waanrtnatot. 

SDR Lintod Dopeatta pg. 


EURO CURRENCY INTEREST RATES 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


Ctoabg Change B&otter Day’s mid One month Three months Ctaa year J.P Morgan 
mki-potnt on day spread high low Raw ftPA Rata ftPA Rate ftPA Index 


BN^an Franc 
Danish Krona 
D-Mark 
Dutch GuUar 
Franefi Franc 
PortuguoM Eso. 
Spnferit Peseta 
Storting 
SMaa Franc 
C*x Dolar 
USOotor 
Kafian Ura 
Yon 

AttoiSSiog 
Short tarai rataa a 


41* -4» 
51* - S 
4H-4H 
5-4^ 
5*1 -sk 
9-8% 
7^-7% 
V»‘5h 

3*1 

5-4 a 

4?,-4*a 
9-712 
2*4 - 2A 

■ an tar 0M 


43-48 
5^i -5*j 

5-4\ 

«l-S& 
9-8% 
7*8 - 7ft 
S*t - 5*4 
3H-3ft 
5,'a - 
4» -4ft 

8H-BV 
2ft- 2>i 
H-ift 

US Dolor to 


One 

Throe 

Six 

One 

month 

months 

months 

year 

5 - 

4% 

S\ 

-S*t 

5A 

•5,1 

ah 

-81. 

5% 

■P, 

64 

-9** 

(Pi 

• 8*i 

Th 

-75. 

4U 

-4H 

54 

-s\ 

SA 

-SA 

s a 

-SA 

5- 


54 

- 5** 

sh 

-5»« 

5* 

. 6 S| 

5A 


5*a 

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s\ 

-54t 

th 

-ah 

B*a 

-9»i 

lo^a 

.97, 

toil 

- 10 

10*1 

-101. 

7A 

- Th 

7H 

-7^ 

5% 

-SA 

8*1 

-821 

5)3 

-SB 

6- 

5% 

6A 

-«A 

7.1 

-7,\ 

3{i 

-3 & 

4 i» 

-3» 

4*4 

-41. 

4*« 

.4lj 

5 • 

4* 

£’« 

-6ft 

6- 

sh 

8% 

-ah 

5 - 

4% 

sa 

- SA 

6 - 


6A 

- 6A 

*2 

- a* 


-8^ 

9*4 

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10,1 

-10,*. 

2i» 

-2** 

2h 

-2A 

2*2 

-2A 

212 

-2h 

2A 

-2& 

Vt 

•a* 

3*1 

-3>2 

4 ■ 

3^ 


a Yen. abac m days' no 
(MAT1F) Paris Interbank 1 



Open 

Sett price 

Change 

High 

Low 

EsL unj 

Open InL 

Dec 

8431 

9431 

*031 

9433 

94.19 

8,080 

54.680 

Mar 

9£71 

93.72 

*001 

93.76 

93.71 

7342 

3731 D 

Jun 

9330 

9330 

- 

9135 

9339 

£605 

3£167 

Sap 

9231 

9230 

-OOl 

9236 

9230 

3357 

19319 


! MOUTH EUHOPOLLAH (UFFQ* Sim points of 100ft 

Open Settprice Change Ugh Low Est vea Open tat. 
9197 +0.01 0 2529 

33.53 -0.01 0 1386 

9337 +0.01 0 300 

92.71 • 0 56 

[ MOUTH EUjjOtllAMC rUTUMS (UFFE)* DMIm points of 100ft 


Open 

Settprice 

Change 

wgh 

Low 

Est. vol 

Open tat 

94.79 

94.80 

+002 

94.85 

94.79 

2SCS0 

152078 

94.44 

94.44 

*001 

94,49 

94.42 

23827 

151443 

9431 

94,03 

*002 

94.08 

9430 

19833 

104433 

9161 

9334 

*0.03 

93.88 

9330 

9486 

79627 


l NnJUTM niTURES (LUTE) LIQOOm poWs at 100ft 


Open 

Sett price 

Change 

Hgh 

Low 

Eat vol 

Open tat 

9070 

9077 

*0.11 

90.84 

9088 

8284 

32374 

8935 

9032 

*009 

9007 

8834 

3413 

26088 

59.41 

8048 

*0.09 

8932 

B9«41 

1214 

15900 

8938 

89.10 

*009 

89.13 

89.07 

1249 

18215 

MONTH 

■URO SWTS 

S FRANC FUTURSS (UFFE) SFrlm points Of 100ft 

Open 

Settprice 

Change 

H9h 

Low 

E8L MfS 

Open tat 

96.79 

8532 

*005 

9535 

95.78 

2886 

19525 

95.40 

95.45 

*004 

9537 

0£40 

1831 

17315 

9£06 

85.03 

*002 

9537 

95.03 

234 

5324 

94.70 

9435 

•0.02 

94.70 

9435 

71 

1758 


I (LiFFE) Eculm points oMOOH 



Op«l 

Settprice 

Change 

High 

Law 

EsL vol 

Open taL 

Dac 

9331 

9330 

+O01 

9333 

93.78 

611 

7450 

Mar 

9336 

9331 

*001 

9336 

9338 

870 

6829 

Jun 

9230 

92.77 

-002 

9233 

92.73 

208 

3896 

Sep 9233 9029 

* UFFE dauroo aaried an APT 

• 

8234 

9234 

275 

2238 


CONTRACTS & TENDERS 

CRUDE OIL PROCESSING 
IN ROMANIA 


I*L I 

GENERAL NOTICE 

RAFEROM SjL - Tbe Petroleum Holding Group of 
fom panina representing the Romanian Refining Industry 
is going to organize an international competitive bidding 
for processing about 130.000 nitons of crude oil per month 
during December 1994 - November 1995 to Its refineries, 
based on most competitive yields. 

International ail companies interested in participating in 
this competitive bMrifrig are Invited to register their interest 
not later than the 4th of November 1994 by writing to: 

FBTROUEZPQRT3MPORT SJL 
1-3 Magheru Btvd. 

Bucharest, Romania 
Phone (40-1) 613.30.45 
Fax (40-1) 615.65.50 
Telex 11519 PetexR 
Cable: Petrolexporttmport SJL 

The crude oil grades, the yields per each crude oil grade, 
the bidding documents and the qualification conditions 
can be obtained from PETROLEXPORTIMPORT SJi. - 
member of RAFZROM SJL 


COMPANY 

NOTICE 


CANADIAN PACIFIC LTD. 
flneorpo m ed la Canada) 
ONTARIO A QUEBEC RAILWAY CO. 

5 PER CENT DEBENTURE STOCK 
6 PfiR CENT COMMON STOCK 
In pr tp aratfcra Cor d» pajiacot of the half- 
yearly interest payable on December 1st 
oat, tbe dcbcnloK sock transfer books wfll 
be doKri at 330pm on Nov Is raid win be 
re-opened on Dec 2nd. 

The half-yearly interest on the common 
stock win be piid on Dec l« ro holders or 
leandotiNar 1*. 

«^&?U , Sr5375DY 

October 24* 1994. 


PUBLIC 

ANNOUNCEMENT 

UNIVERSITY OF 
CAMBRIDGE 

Centre lor European Legal 
Stucfies, FubHc Lecture by the 
nswly appointed Director of the 
Centre for European Legal 
Studies, Prof, elect of Eiropean 
Law. Alan Dastanod. Thursday 3 
Nciv 1994 a 5pm in the Lafrner 


LEGAL 

NOTICE 

criKiwrraor 

T1NTAWN CARPETS LIMITED 
and ■raojuTTO drum 
BBOUBRYACrutS 

4Fjera«Fo*toirata aemwe 
b "£? 1 ! W|,0 “ B * #0 * 1 ■* *»l tedra 

B-TMWK-- C.^1 1-. ... 1--T— rtm »I1IIIUI1I.I| !■ 

anBRsaoss&Ks 

" " rira dradwtaraa a 

ok « *« ibmIm K ran cmn maid the rad >4* 
tobtam«ewliadtrBto(«drrin*wtllwaiHta| 
Cf S?lNto»aatto»*ra ItXOhorajon tebutea 

Otad:> orator mi 
" H COQki mi I IACOI tea Mnunm 


To ADVERTISE 
YOU R 

Legal iVoncES 


Please contact 

Tina McGorman 
on 

+44 71 873 4842 
Fax; +44 71 873 306 4 


si . -P. - 


EflL vot Hte, Cato too Am a Prwdoui day’s opm tat. Cato 1070 Pita 645 



WORLD STOCK MARKETS 


- gr as ;»sis« 


AUSTRIA (Od 25 /SOI) 


— Jg£ i.reo 2-8 

— 605 14 

-.gi ®E^ 

= ’« ’«■? 

— 1 967 046 t £ 

— 1.050 885 £2 

— 488 385 £fi 

... a> mu 

... 1,150 874 Z. 

— «B BIST* 

— SW2i 

— 600 430 1.7 

— <5403,411 ,jj 


Baflwaia™uiiiiu,jDd2B/F re .) 



=970 -40 

szma -160 

CBNCkn 11.863 


gs r ■« 

Cobyt 7,1 1® 

ss 

BMC 2900 
Z/SO 
SMS 



jfanttM 2.00) 


. 2,120 

SGnAfV i 130 
2900 

1,510 

SDivw W900 
Tnatf a.700 
23950 


EfOctaB/Klf 


BIO 
182 
278 

tm 

1VS124 10X283 
SSI 
318 
155 
300 
570 

189 

jy*aR 3S2 

it&m 900 

NKTWS 320 

550 

480 

SMI 520 

Soph.® 513 

SUVft 300 

fiSba 342 

TopOKi BBS 


I (Oct 28/ Wo) 


1 TIC' 

^ ■ 1' 


iW.V *•> 




HUNCE (Oct 2G / Fts.) 


+3 358 287.70 _ 

71* 904 -L4 

814 655 10 

813 454 <8 

S37.80 —1.10 310 217145 
025 +11 718 570 44 

2*490 -JOriUJ 227 1 2. 

480 +1 08344410 £1 

2.748 -2V5)%731.U 

611 _ 750 503 12 

1,133 +18 1*80 1.033 42 

515 +11 1.165 794 4jB 
l 180 +240 22460 WBJB 55 
18290 +1.1021A2D1SA5D _ 
2209 —4 2J09 1.711 25 

16290 +290 20S13UM 45 
1.270 -a 1 970 lJJM 13 
42740 +950 485 540 2.1 
21030 -1 JO 30030 ail ZJJ 
732 +15 1,386 708 77 

461 +10 856 370 13 

390 *8 48815120 _ 

382 +2.10 737 370158 
5,480 -BID £180 6400 0.7 
700 +8 1j0O2 685 £3 

70S -4 830 ®10 — 

317 -11 JO 478 317 1J1 
V1B +2 877 78ffl 2J5 
440 +7 JO 740 418 18 
-8 740 609 21 
♦1 43535010 5.4 

300 -5 382 208 0.4 

243.10 +J50 282 151141 
607 +101.606 685 

10 866 050 &S 

830 636 1.7 

3*487 2.750 24 

1405 -302,560 1,700 44 

580 +16 734 650 25 
6J80 -.10 18.7D 8.15103 
101 -250 182 10070 12 
„ 039 500 17 
10 8.070 43*0 15 
_8 E7S 365 2-0 
£320 +90 1754 1970 07 
30400 +100 3S3 23Bl6D 24 
3000 +140 84535130 13 
418 +18040190 398 19 
537 -3 080 406 25 

451 -ID 716 422 5.0 
728 +1 1,078 m» BJt 

3950 -JO 110 3756 79 


INDICES 


N OntarioO/IAO) 

Mwmguvn 

(MAttwonaeq 
TadoO Ma4zn/si) 


240 -140 

£5 -31 

2920 +80: 


2920 +60 

135 -1 

31110 +290 
127 ++0 


— UFBtiX 345 

~ IMUI 440 

— UMmFr 415 


sis as 


140 BJ 

taiOgOlTM 14 
-130 1550 4.100 29 
+40 1685 2.750 54 

— 1200 1910 29 
-70 7.050 0.000 14 

— 6.400 5400 4.4 

HB 1430 1472 89 

— 0060 10.000 

+70 HUTS 1250 10 
-40 3980 2420 5.1 

_ sea 4M 17 
+10 1200 4460 44 

— 6480 4420 44 
+30 2438 2425 5 4 
2430 2415 54 
15.700 12450 64 
1476 1.450 19 
— T7JG0 13,750 44 
+2011400 9420 4.7 
-7E3&IOOZJ7QO 2* 
+30 2430 2.440 44 


— mens 23140 -40 356 227. ID 4.7 Z 

Z 8ancuy(0ct26/Dmj 



+1 480 302 32 
-1 071 782 19 

— laoMuo i j 
-5 801 TOO IT 
>10 1475 1400 11 
-8 1/137 1463 12 
-290 175 123 _ 
-1514601490 14 
-GO 6440 1600 _ 
_ 203 178 17 
-1614401401 — 
-1001394011.125 04 
-50 7470 6,160 S3 
+16 2400 1470 2.7 
+5 1.055 850 14 
+1 227 140 14 
+2 888 840 _ 
-TO 070 611 _ 
+2014501485 10 
-01.100 646 11 
-1 631 352 44 

-140 2G9 T73 44 
+8 BIS 3S4 14 
+6 770 BIO 19 

-6 1403 I486 ZB 
-IB 832 BB4 24 
-314151.125 14 


PACIHC 

JWM(0et2B/YH) 


_ men i.soa 
020 

__ nu 1,160 
_ MM2 319 
_ KsHoH 616 
_ XotSa 2480 
_ KUono 2400 


RmBuml <76 
Ktnfio 460 

’« 
1620 
7420 
421 
741 
854 
1440 


790 
411 

HIS 

1480 

■MaB 1.600 


SBS ’■£§ 

MMM 1,110 


-2014201400 _ — 
-7 737 4UB _ _ 
-101410 OBI 09 _ 
-101480 970 — — 


— 780 665 24 
+2 281 178 17 
+4 533 250 1.1 
+10 7433 5.300 Q4 

^flaa 

+4 427 307 34 
♦1 2D3J5 150 SJS 
-6 615 376 34 
_ 543 445 2.1 
-1 =76 100 14 
+9 429 330 11 
+125 1450 885 04 
+6 305 252 11 
+37KU1 468 07 

+11BB 737 418 19 
+8 016 4B7 04 
+1 E75 42S03 
-8 485 321 29 

-1 WITl SHU 

—5 1472 510 1.7 
+4 28720748 44 


Bn*W» 36440 
Bs»ar 34190 

as& 

430 

1.012 

Softer 2807D 
388 
833 
775 

U1AB 1445 
CnooM. 315 
Count 22t 


SR? 22540 

n«e/ek 71890 

145 

480 

DroMk 318 
DnA 39240 
ftt 

248 
822 

Si 

HMdBn 1469 
" ' “ 581 

321 

040 

BIB 

Hunan 774r 
Heater 20540 
2S6M 


+2 164 08 14 

_ 178 121 14 

-10 106 84 — 

-wSO 4940 35.00 14 
-1 233 141 29 
-.15 17.40 an _ 
_ 00 45 14 

42 706 sa 14 
_ 150 100 04 
•3 247 140 14 
+1 250 138 20 

-6 258 200 14 
+2 260 190 14 
+20 0R2 287 04 
-90 m 09 — 
— 104 58 1* 

-1 10Z 54.10 14 

_ 5740 41 „ 

-1 120 8490 1.1 

a 268 176 IS 
SS 14.5a _ 
-20 20130 12 _ 

+2.40 129 60 — 


Lam W u 

as s 

LilRtBI 186 

W 18290 


+90 18830 140 1.1 
+4 835 490 12 
-60 1448 1400 I X 
+67 2411 1122 04 

— 44040 575 J n 

-10 1.191 700 _ 

+10 1,026 619 14 

+640 SCUM 278 29 

— 510 *36 14 

+240 485 348 25 
♦1190*0*0033010 12 
+850 526 36050 17 

+17 S2B 839 1J7 
+1190 576 395 34 
+21.106 815 14 
+ JO 34050 238 2.1 
+1 628 374 16 

_ 061 790 1 4 

-6 1430 775 1 A 
■1019301.140 04 
+050 390 28240 18 

+3 290217.23 14 
-fl BOO 38050 05 
+2050 004 889 1.1 
+8 588 426 14 
+14028050 210 _ 
+8 887S0 B50L5D 25 
+1 188 131 18 

-7 607 478 24 
+3 337 280 1 4 
+06046150 346 14 
+1 816 488 14 
+3 307 245 24 
-3 825 500 1.7 
+1 245 ISO 11 

+4 14801,141 14 
+8 881 BB2 17 
+4 440 310 11 
+281499 857 14 
+10 S8UD 25*20 12 
+7 1415 787 17 
-50 253 206 29 
-3 313 265 19 
+7 433 33 24 
-1 10O 131 — 

+7 849 515 11 
+2 556 451 29 
16150 mio — 
179 10270 17 
-4 600 030 24 


SL ,!@ ** - w?sia 

gSETifalS -SiztSSmSIl 

Reran, B£=o -jdiuuo bitd s.* 

SSS 1 , SS*!!3899ail 

IMOp 198.40 -1 238170*0 34 

VHU 1762081 +20 20316*50 11 
VbOOpR 4540 -SO SOSO 45 2 2 
WHDpR 11610 -J0 13350 101 JO 15 

Monwr (Oct 28/ Kronen 


+90 112 88 17 

— 17S 180 07 

_ 1160115® — 
+1 188 125 1.1 

-2 m 69 — 

— 148 IDO 34 
-290 308 280 11 

— IliSO 81 37 
+90 27050 208 14 

— 206 1*0 16 

-1 30518850 11 

♦so mao iso ie 
_ 91 7240 27 

+40 91 70 18 


— 07 72 89 

_ 122 0590 14 
+1 151 114 13 


+1.10 8490 21 _ 

-2 89 56 94 


SHUfl(0et2B/Ptl) 


1170 
2.900 
BExtor 4920 
BPBpk- 15950 
BEnWS 6JB10 
Bnnto 833 
CS’SA 3.116m! 
CartM *.370 
Ciena 7.700 
Dradoa 1,780a 
1J55 


+io aso 640 14 
+0 BGC 830 14 
+3 410 311 14 
2186016740 _ 
161 14 
37B 19 
206 13 
368 1J 


148 -190 280 101 54 
2720 -2639171870 04 

22190 -90 282 210 — 
mtoilll 503 +1 530 493 34 

Poach 033 -7 950 022 0.4 

442 +11 501-60 410 13 

450JD +A50SB50 399 27 
383 +490 424 329 39 
1,310 +1019201730 14 

204 -390 372 254 27 

21890 +290 257 200 37 

23690 +270 31323180 16 
870 +10 IJMtt 888 14 

394 +8 438 350 14 

018 +89079150 807 11 
638 -4 095 810 19 

531 -8 580 480 1.1 

28120+770 32023060 2.1 
wm 314 +13 380 208 32 

Veda 487 +126090 «SS 2.8 

van 376 +8 400 317 2.0 

UkWM 323 +3 415 316 16 

MU 48790 +890 526 436 14 

VST 43440 +840 534 418 06 

VWPf 344 +150 443 337 04 

HR S ?3 


+10 8980 5,160 10 
-6 67004730 12 

— 3930 2780 2 A 
+15 39002915 74 

-6 4y*75a,aTS 4.1 
+40177801*900 &1 
+451321 4900 18 
-18 1935 7002*9 
-10 3380 1410 34 
+45 5.1103900 27 
+10 rtan 7.650 24 
+33 1715 1745 5.1 
+101,7751^10 14 
1380 +1037601300 39 
5920 +208,100 5,100 24 

714 -61,100 713 5j3 

<»* +65 124 41614.4 

+66 6,140 3930 34 
-4 1710 700 74 
+55 7^sn isoo uo 
+100 79W 4900 24 
-10 (L4SQ 3900 29 
-1OltSO09M 10 
-3612001400 _ 
+104400 3905 34 
-1 355 102 09 

+3 mo 351 119 

_ 815 605 ao 

+704950 2405 39 
-51185 1905 39 
—4 730 549 11 

-102900 950 OLE 

— 1.7101,130 54 
-53.1201480 13 

-100 39B0 1035 14 


McMG 1750 
617 
407 


3900 
cm* em 
C&c 717 
Canon 1,770 
CanooS 3.110 
Omuc 1780 
481 


2990 
ChOPtoi ijoso 

ass, ?&s 

OrWfcfa 783 


7BB 

MM 635 
ocSn i960 
D4WI 1910 
DNpTor 414 
Ofimf' 786 
OTMifll 733 

DataMB 1420 

OMmH 1960 
BafesaS 1480 
DHnJp 3760 
Dow aTM 840 


E«*>G 1.020 

Fanen 4930 
FtafeCR 


Z SMEDHI (Oct 2B / KraiM) 


= imLY(Qct26AM) 


BCaan i486 
BNazAg 1000 
BROm 1985 
Baa in 
Bnawi msoo 
Buto 9.000 
OR 1990 
1725 
1910 
CMFIn 035 
Or Bn 19209* 
DnM 1600 
Fflfrti 1,151 
Rot 6495 
RatPr 3955 
Ml 3915 
- - 10.030 

1786 

amtaa 30700 
GHH 1600 
BPr 23960*1 
PL 5,145 
9950 
1160 
9,800 

K i^ 

Uadbnc 11470 
MM 1.109 
1.752 
3940 
nspa 2726 
RAS 17750 


764 

srer 4905 
Sana* 4.486 


-86 6982 1460 37 _ 
+50 34852941 — _ 
+11 1450 1925 14 — 
75 — — 
+200 2BJB0 16J00 14 — 
+2201Z9ED 8.110 _ _ 
-ao 11 00 1904 34 — 
2912 17 — — 
'102905 1763 64 _ 
-25 1010 040 _ _ 
—42 1516 1JB11 12 — 
-100U774 9966 — — 
-33 IBM 1,123 _ _ 
+45 7930 4.071 17 _ 
164.620 1118 18 — 
+3611101101 54 — 
+13017*10.01 59 — 
♦11 IMS 1448 14 _ 
-1004472131633 14 _ 

+350 30700 15708 1.1 — 

+120 1560 6425 24 _ 
-30 kS6 0.170 _ _. 

-529302900 _ 

-lt» 13916 0962 1.0 — 
-60 6940 4.460 15 — 

12. WO 2.1 _ 

+2011713112710 14 _ 
+4 1940 ora _ _ 
-42 1140 17S2 — _ 

-2D 6.100 3,4*0 14 __ 
■10 3985 1470 — — 

- -T73D0 14 — 
+7011,168 1880 14 — 
—33 HIM 7700 27 — 
-18 1988 **> — — 
+55 1350 4466 13 - 
+85 7700 4,145 — — 


-90 93 68169 

_ 9578 67139 

_ 06® 289 14 
-3 685 438 14 
+90 197 15 04 

_ 194 144 04 
_ 10050 85 as 

+9010890 79 09 

+4 438 282 1.7 
+&5D44U0 330 14 
♦2 13* 87 17 

+90 134 88 29 

+90 110 7890 84 
_ *30 261 14 
+90 89 3890 24 

-« 311 137 10 

+1 812 178 14 

+40 660 IBS 29 
+90 215 152 24 
♦1 372 17 27 

♦1 155 14 17 

♦1 IB 100 17 
-40 IB 102 34 
-1 156 99 34 

+340 184 122 _ 
+1M 1« 12* 11 
+40 143 9150 14 
+90 142 630 14 
+1 73 3040 — 

— 1 UU0B74Q 14 
*390 233 129 11 
476 361 14 
-3 480 35® 14 
+1 144 85 27 

+1 110 88 12 
+290 1220290 14 
+1 128 78 54 

+2 151 106 GjS 
+1 175 1IH 54 


HBnHUW (pci 26 / FmJ 

AMI 212 — .292 191 — 
MuLBr 619 -13 721 388 10 
Mlflg BIB -18 713 507 2.0 

1380 -40 3488 2.173 19 

1450 -8 1948 1416 17 

202 — 200 FSB 14 

537 +7 747 GOO 34 

733 +2 070 702 2JS 

7£ +* 696 24 

332 +5 422 377 — 

34*0 +5 34601.960 14 

1.42b +10 1700 1480 24 

1255 -95 2432 1250 12 

930 -4 093 881 14 



HMnd 1700 



-101900 891 — — 

+10 1400 1970 _ _ 

— 744 583 17 _ 

+101700 940 

-2 KK W 17 „ 

-150BJ00 2410 _ _ 
-GO 64*0 *470 U — 
-201750 1420 — _ 
+1017501400 _ _ 
♦O 811 5533 17 — 

+10190014*0 _ _ 
+2 B2B *10 06 „ 

-« 513 380 17 _ 

+2 078 560 — 

-6 B8B 055 — _ 
+10 I960 1780 04 — 
+io aoi 4iG _ __ 

-30 34*0 2,*10 _ _ 

-B 1720 842 49 _ 
+4 741 436 — _ 

+10 1420 1430 — — 

— I,™ ZSBO 394 

-10 1/410 1420 14 — 

-9 811 816 __ — 
_ *62 337 14 _ 
+1 1.07 841 _ _ 

-3 603 *80 — _ 
+1014*014*0 06 — 
-4 7BO 571 1.1 — 

-20 2470 2/450 — — 
-10 1430 1450 _ _ 
-10 2.780 2400 _ _ 
+20 1400 1710 — _ 

+2 984 772 14 — 
-1 BBS 738 _ _ 
—4 825 *10 — — 

+8 691 397 _ _ 

+301470 090 _ — 
+20 1980 1450 04 _ 
-10 24601,700 — _ 
+10 1410 1.400 _. _ 
+101420 R0O — — 
+61720 777 — _ 
+10 010 SSI _ _ 
-1 570 *15 — — 
-10 1J70 003 _ _ 
-101020 1480 — — 

— 627 346 — — 

+861980 720 

-2 BBS 037 14 

+10 1.12H 951 _ _ 
+201.71019*0 —024 
-10 1470 1730 17 _ 
-40 4450 3400 07 _ 

— 705 54S 14 — 
+9 638 *80 — — 
_ 1410 1750 — — 

-101400 1990 — — 

-001,190 993 — — 

— 44SB3400 — — 

+1 TOO 521 04 — 

— 1460 1420 _ _ 

+4 BOS 446 — — 

2RB0 240Q 

-4 738 303 14 — 
+3 513 276 _ _ 
+4 685 380 — _ 
-0 1440 719 __ — 

+10 1779 900 _ — 
-B0240014SO - - 
+101.180 841 — — 
+4 738 SM — — 

+20lj»0 888 Z Z 

— 700 429 07 _ 

z'^'ftzz 
'1 SS z 

-2 525 438 — _ 

IS , JS x - - 

mil 

+61,120 012 _ _ 

si! H 

+6 75B 502 — — 
-2_599 «7 



_ 720 601 — 
+3 016 ns __ 
+1 070 014 09 
-3014361,563 08 
-fl 677 BO* _ 
+1017001.120 _ 
♦1 335 250 — 
+5 050 737 — 
-40 2^801700 __ 
-60 1760 1160 - 
.*1 807 732 — 
-s 7m ess — 
-a 963 B48 _ 
+5 767 Bn — 
-IS 573 425 14 
+5 523 318 — 

+101750 1410 

-6 6*5 408 

— 3400 2720 __ 
+20 74=0 6480 — 

-9 GEG 375 17 
-19 BOO 730 
+2 1460 90S __ 
+10 2465 2^20 — 
-9 702 S3S __ 

— 1730 788 — 

— 1940 BBS DJ 
_ 900 512 __ 

+30 2720 1.750 __ 
-9 580 438 — 
+10 SffiJ 732 24 
-1 463 321 — 

— 2410 1/420 17 
-20 243 1700 __ 
-IOI4COI9OO — 

_ 1720 090 1.1 
—10 34*0 Z6B0 — 

— 960 711 __ 

+2 6*8 307 — 

+3 me m — 

+10 732 557 — 
+7 792 582 0.7 

— 1440 1JS0 09 


SHOW 7,710 
fBnm 1780 
. . 2980 

Shtrntr 900 

ShSOi 1050 
arc®5 874 

»m4 1,180 

1,100 

474 


505 

3n*9lS 1900 
Skytar 2400 
3nw6rtl 77* 
Sony 5918 
SOUQ 768 
SmfiM 712 
Sumft* 1910 
Sandal 662 



—7 693 386 — _ 

—1730 790 04 .... 

MBMC 2/410 -20 3410 2980 — _ 

— mean 1770 _ 190 1420 _ 

— ” “ +1 736 BSD — _ 

-JO 1.300 905 — — 

—3 650 336 — _ 

+4 B33 B03 — „ 

-6 58* 304 

-3 1410 708 _ _ 

1480 -10 1730 84= — — 

740 +4 782 487 — 

-0 G60 407 — _ 

-8 484 318 — _ 

582 +1* BOB 3B9 _ __ 

-ID 1490 1,140 — _ 
+101410 1^50 _ 

+1 58* 42E — _ 

S 090 45S — _ 

♦4 BBS 872 — _ 

+3 *00 301 — „ 

+10 1/420 1420 04 — 
+12 990 723 04 _ 
433 -10 400 378 — _ 

413 -1 *63 337 _ _ 

906 +15 040 678 _ „ 

028 +10 9*0 770 0.7 — 

+4 *49 310 -.787 

1.130 +101/400 045 _ _ 

see * 81.110 790 „ . _ 

IlfcanB I960 -30 27301730 CU „ 

010 -4 782 MS ^ _ 

1420 -40 1710 B59 — . _ 

2410 -10 2400 1983 a* „ 
-a B24 486 04 _ 

2780 —2.780 2400 — 

Water 34=0 -TO 4.490 3.472 — _ 

1700 -101710 869 — . 

1410 —1.170 965 — __ 

1920 —19801429 — _ 

+3 03O39S— — 
-2 288 231— — 
+7 025 3B5 — _ 

ill 7D5 520 14 _ 

+fl 7B7 4B3 — _ 

+4 494 316 — _ 

+3 S3IO 811 — — 

050 +8 ,4*0 781 04 — 

501 -8 588 500 — _ 

NatHaa Mao +2024001410 — _ 
1970 - 201450,970 — — 

+2 816 000 — _ 

-6 810 028 — — 

-6 B« _ 

.... . . -6 861 579 — — 

— (Boat 442 +12 520 412 — — 

— MkSf 1,100 +1019*01460 08 — 



001 +161.140 865 — _ 
.160 -40 7900 64*0 — _ 


NtM 5,160 -40 7J 

MpOOk 638 
417 



toety 1970 

JBX 000 

JGC 1910 

JnSHaU 330 

■ML 728 



+r 0 |Sg? 5 S“ 


-31470 7a — 
-61.140 972 — 

-1 5E5 348 — 

-6 768 522 _ 

— 010 770 14 

z 

+1024701.730 — 

— 084 6ZB — 
-30 177014*5 09 

448 284 — 

-8 778 005 OJ 
+2 501 388 — 

es» aw — 

- 202.1201410 — 

-1 400 288 - 

-6 940 590 _ 
+10 716 +31 _ 
+ 10 19*0 822 m 

1470 ^ 08 
-81450 826 — 

— 1480 1780 _ 
+202462 1,700 _ 

-4 420 338 — 
-10 B2B 510 04 
-5 570 430 — 
-10 2470 2.420 — 
+2 006 425 — 
-1019101.140 — 
-3 300 338 _ 
+9 422 Z71 — 
464 303 — 


Otomaa BOB 

SE£ 

anon 4430 
OnMCaa 1900 




2900 
1/4SO 
SnaBk 2400 


89=0 
4400 
— 4.100 
sefaar 1970 

sSg 1|S 

SMOOT 1410 
Sattfaa 1490 


-1 402 810 — — 
2430 +10 2,130 1410 — — 

2,110 +10 2700 1730 — — 

— 1,110 037 — _ 
+14 802 003 14 _ 

+3 020 450 — — 

-10 1100 1950 0.7 — 
+1 050 no - - 

-5 795 *78 — — 

- 10 19»0 1480 U — 

:f X S z z 

750 +13 789 484 — _ 

1460 —17001420 14 — 

583 +22 617 +50 — _ 

1460 +10 1700 14» 09 _ 

+1 015 <41 — 

... —1,110 750 — _ 

1480 +1019*01980 — — 
70 _ ,910 1.1B0 — — 

302 307 302 Z Z 

406 _ 534 345 — — 

2+700 +6002770018408 04 _ 
B8G400 ++400 UnMTljjS - _ 

573 —a 630 364 — 

— +2 B67 521 _ — 

+3 BIB 305 — — 

1480 -40 1770 1450 09 — 

-0 634 348 — _ 

-8 934 727 _ _ 

IS z 

83* *14 002 701 _ _ 

+3 409 325 _ — 

-201770 813 — — 


+6^ 372 ^ 284 _ _ 

+4 80S 688 — — 
-18 773 602 _ _ 

tra s z z 

^3 i,m are 14 Z 

17*0 089 

_ 14001480 — _ 
-80 6910 4410 09 _ 
_ 1400 1.050 14 — 
+4 744 011 _ — 

-40 4920 2400 04 SOLO 
+1 S38 4QB _ _ 
+1 778 582 17 — 
-40 37*0 2410 — — 
-14 582 300 1.1 — 

-5 BIO 4*0 14 _ 
+21400 TBS _ _ 



+6 S12 381 17 _ 
+1089807.00 _ _ 

— 1910 1920 _ — 

-4029602980 - — 

-141.110 773 — _ 

-29301910 _ — 

+1 14*0 840 — _ 

— 17001,130 _ _ 

+10198014BO — _ 

+14 836 +33 1.1 _ 

_ 810 411 _ _ 
+3 386 256 — — 

+3 TOO 500 — — 
+10 823 481 

— 1900 1,110 — _ 
-40 l . ftTO 2.B50 — — 

• 1 828 TOO 04 _ 

*0064806.490 _ - 

_ 852 618 _ _ 
+1 747 428 — — 

-202780 1.700 - - 
+5 587 404 — — 

-71,100 887 — — 

— VS® 1730 — — 
+1 475 360 — — 

-8 4B5 288 — — 
+10 1430 851 09 _ 
+1 35® 252 — — 
+21410 884 _ — 

-10 573 432 — — 
-14 734 81, 1.4 — 
-271,1?® 815 — — 
14=01400 — — 

— 815 874 — — 
-30 19201/050 — — 
+00 5450 3780 — _ 

-8 749 610 — — 
-10 2710 1770 1.1 — 

+2 722 EGO _ _ 
_ 06= 070 09 _ 
-in 1,130 1,070 _ — 
+20 19*01,000 — — 
-12 1440 828 — — 
+1 EOS 400 _ — 
+12 S2B BIB 09 — 
-0 1,100 705 07 — 
-0 851 508 07 — 

-4 555 367 14 — 
—2 720 002 — — 
-5 093 570 _ _ 
-1 007 S33 _ — 
—100 21300 17JD0 — — 

—30 3730 2/470 — — 

- 1014201 .no — — 
+J 536 326 — — 
♦1 507 415 — — 

— 1489 1.120 07 — 
-6 SIS 421 — _ 

-SO 1,720 1.460 — — 
_ 2420 1.310 _ _ 
+10 27001970 — — 
-10 34«2900 _ _ 
-10 3.480 27*0 — — 

+3 570 426 — — 

— 70S 520 — — 
+20 2.750 2700 — — 


-5 780 453 — — 

+3 B2B 057 

+17 730 612 _ _ 
-10 I SM 1,480 _ _ 
+10 I960 1,100 — — 
+3 788 578 — — 

+7 678 B70 

+1 1.2SB 070 — — 
+* 770 *33 — — 
— £73 82295 60330 — _ 

— *35 283 — — 

-30 2400 1.400 — 

_ 305 421 14 — 
+10 24601.430 — 667 
4 * 764 516 _ _ 
+3 733 324 — — 
+10 3,460 £68® — — 
+20 £260 1,780 — _ 

*16 527 330 — — 
-001960 066 — — 
-0SO5 33O— — 
-4 600 432 - — 
-a ess 3«s _ _ 
-7 438 205 — — 
+4 418 272 — — 

+10 1.900 835 

+30 1.330 1400 19 — 

— 1/430 W® — _ 
-IS 068 820 — — 

— 1410 502 ,4 „ 
+30 2930 19*6 — — 

— 19101950 — — 

+301750 800 — — 
-1D19G01.11D _ _ 

— 2700 1940 04 — 

— 19 E 0 1410 — — 
+2 G84 350 14 — 
+0 BOO 70S 14 48.1 
-41430 734 — — 

— 1,120 rm _ _ 


1KT 297 
TMQpN 446 
WWW 840 
WMno 074 
DMM 690 
WsOTt 294 
WsfaOC 441 
Moan 544»i 
WMh 296 


•42 3.70 £48 69204 

-43 £74 191 — — 

+80 hot 39 — 

-46 048 8.10 47 — 

+45 690 870 14 — 

-46 £32 790 29 - 

+48 295 118 44 — 

+4* GJS *43 14 - 

S72 £70 19 — 
+45 £52 2.70 4.1 — 


- HOM KDM (Dct 26 / HJCS) 



KM Bus 1475 
ManlOr 0JBO 
NoaMd 2340 
RUM 34.10 
SHtPr 5675 
StereOr ML 10 
Shew £68 
SmaO 1043d 


S+taA 5590 


mtock 1873 
WfanOn 045 
Wtoanr lain 


-451590 895 44 84 

— 502890 £7224 

— 1570 1040 37 — 

-.10 52 3050 £8 — 

+70 57 87 SB 384 

-76 81 68 £8854 

— 14 £15 — — 

— 2770 1U0 17 — 

— iaiO 1690 39 154 

— 1070 10 09 — 

+45 045 4.10 £0 — 

— *6 2090 14 — 

—75 131 60 14 — 

+45 21401170 44 304 

— 6090 4776 64 204 

+.10 1390 840 37 £9 
-45 090 545 44 — 

+.10 8090 3290 54 — 

— 2*73 13 £5 204 

+45 1540 10.10 24 09 
+.10 5* 2a.se 34 124 

-.10 3590 2030 34 — 
+45 3175 1740 09 — 

— 30.23 18.10 39 20.1 

+45 1770 12 39 — 

— 1040 640 54 — 
+70*290 2790 24 — 
-.TO 3375 1975 *9 — 

— 13.10 740 0.6 — 

— 8*90 48.75 O* _ 

-,10 3090 2+90 04 — 
-45 25 1240 228 234 

+.10 1280 070 04 — 

-70429D 2070 34 — 
-90 30 30 3.1 83.1 

— 77 *190 £e 074 

-70 1890 ,1 £0 464 

-TO 5.1 B 310 +T 108 
-.101540 045131 327 
+47 545 340 07 — 

— 740 £98 89 — 

+76 71 GO £1 184 

— 1190 8 29157 

-.ID 3740 23 29 _ 

-.10 41 2540 29 — 

+45 2390 1475 27 — 
-.15 1B40 090 23 — 

— 1740 085 74 — 



SM -5 390 300 

IBi +tk*n% 1W» 


■14000 Sonora 
348200 SHTM 


13*1 Wi 15*» 
IWi +HSSH1M* 
17 +3 1712** 
114. +1. fllli 11b 
12b 12*1 

11*2 +**H1>i 11 


13b sm 13b 
20b +’»*»’! 29 
31b -bnUTIJ. 
31b -b mb Sib 
21*0 KlbZIb 
ISb +bX1Vil3>> 
11 Glib >1 

165 +b SIS 16b 
175 175 170 

18>2 16b 16b 

425 +: *25 415 
2Sb +b 826 25S 
fl -b »b 0 
21 b +bC 1 b »b 
1,5 115 110 

’|f+b« 

MO -6 300 380 
22b . »?. Kb 





152776 TitMC 
8300 IMP A 
BAS ucomx 


sill-. 

lib +b nov ■ 


|g 

St *»*• 

40*2 


MONTREAL fOd28/ConQ 
4 pin don 


36200 aamfal 

MbhXjT 

113150 OeacCI 


26480 IMS 
176* auar 

52000 BUOCl 
■1100 HaiSM 


— lMUnu(0ct2B7MVTq 


Bran £10 — 640 

Geon 23 -90 2575 1 
tCCmd 1590 — 19.10 1 

IHH 17.10 +.10 1040 1 
HtfUfa *42 *m 690 

MuPwp *9* -42 645 

Piffl 444 -4B 845 

ShnoO B45 +.10 £40 

Teuton 2000 +90 24.10 1 

Tanga u .10 -70 2040 1 


;(0ct26/SS) 


-,101170 
— IOlBO 

— 3*6 
_ £90 

-.10 6JS5 
-,101340 
+.10 1070 
+46 740 
-.10 15.10 

— 17.10 
+44 398 
+42 *78 
+40 690 

— 1190 


1090 14 04 
IS 04 — 
24* 39 — 
£46 S3 — 
492 59 — 
0 14 — 
11 19 — 
£75 04 — 
10.40 17 — 
13-10 14 — 
£14 04 — 
£16 £3 — 
348 17 _ 
£45 £6 — 


21b +bdb 
13 -b 113 

Bib -111 WB MPW 

ass 

15b SI 5b 15b 

ISJy+b^-S 

20 -b»b 

46b 47 4% 

IBb +b Wj ISb 
5b tSU 5 
lib — b STIb 11 

10 +b SIB 17b 

3 % E » 


13 b nb isb 

10 S18!» 10 

6b -b S8b 6b 
16b +b t+i 


+bKM 

a -a 


163784 BmtnS 

25*40 BtaCbP 
0050 Caaible 
23370 Cm?- 
1,00 Cnawc 
630 GTCB 
13170 JCnan 
4200 Mflfcli 
92578 MUSU 
85030 PntgD 
400 dcorA 
3000 UWm 


2 ib +# -as 



uSmSSul 

|7*U0 NatabOB 
1.1700 MomaA 
800277 MmaaFI 


-7 746 
900 -11 1,180 

+6 1,180 
+2 763 
+5 746 


ABS7HALM(Oct26/AustS) 


= NORTH AMERICA 

£1 CANADA 

Z TORONTO (Oct 26/ Can S) 
- 4 pm dose 




z Es^f « 


— 19401730 — 
-5 704 515 _ 

+20 1860 £110 a* 

— £160 1410 — 
-10=9701950 — 

+5 1400 883 — 
_ 609 416 — 
-81400 670 — 

— 7730 0950 09 
+70 9440 4.450 _ 
-30 4450 3970 — 

— 19201980 09 
+101900 ,400 — 
+*01,5101,180 — 
+21 1.160 0S6 _ 
+301/4001460 17 


SMttfcf 542 
SonQM 1178 
Sthe-p £86 


_ 545 £56 1 
+4711.12 £42 : 

- £10 £85 
-.10 114® 7MT> : 
-45 392 290 : 
+41 £72 £73 ! 
—42 47B £00 I 

— 295 1/41 I 

—.12 20LB6 18 

+42 390 23* ■ 
-47 492 £16 I 
-41 198 OS4 
-74 1548 1100 - 
+41 1.1 B 044 I 

_ £08 375 1 

— 6*6 <123 : 
-72 2090 1£80 I 
+45 £80 166 ; 
+43 £*0 160 : 
-44 1130 740 i 

- 5.70 3.S9 ■ 
_ £80 470 ? 

-43 096 690 I 
+41 192 078 I 

- 098 095 J 
-44 042 347 t 
-43 142 170 5 
-4, 1*0 (MB : 

— 3*5 2*4 : 
-42 39B 290 • 
-42 1*7 040 I 
+42 240 107 i 

- 390 112 ; 
+41 178 1.10 > 

— 178 173 I 

+ 295 2 I 

-43 10Z 1 . 12 : 
+42 242 195 
+901190 £78 i 
+45 490 243 I 
_ 1894 1570 1 
— £40 Z*5 : 
-43 399 Z5B 1 
-471044 04* 1 
-44 421 296 < 
+40 1840 047 I 
+43 790 575 1 
+43 IOlOO 7.72 1 

— 628 £70 ? 
+41 279 190 S 
-42 4.15 105 : 
-42 £0Q £90 l 
-42 116 19B 

— 2*3 193 
-45 1*8 160 ‘ 
+4* 470 140 ! 
+45 875 5l 6C t 
-.11 470 183 ! 
+47 848 +40 I 
-43 1.74 1.16 t 
-46 675 478 C 

„ £20 *42 
+45 4-52 398 I 
-40 7.10 640 , 
-.14 1110 610 < 
-45 390 246 I 


■ T7b + -b T? 

£0 I8b-bgbi»j 

HE iH+bm u 

MB Mb -bRSVMb 

nAI 3Bb +bSnHt3Sb 

Barr 33b -bB«i33b 

nC 13b Wi 13 

m Mb +b S25Mb 

'3=.’:^ “i 

[» 

HA 16 S1% 15 

0 a£ 11 b -b ?L:A: Hb 

Mont 25 +b S2524b 

(WiS 28b +b saa 28b 

lUEx 208 +0 208 200 

DM 21b +b 21b 

l-HOSTACTTVKflTOCKSE 


■31083 PtarfM 
3*4877 PomP 


13*50 PagmAl 
■ 2142 PandP 
10200 Pgeausl 
■14*52 PaCanl 


018*41 PXXvna 
32050 PgwrCn 


“Js+b% 

s % 

21b +bJZJb21b 
^ *** m ... 

,1b +b*11b 11 

IB +b SIB 17b 
a SB 7b 
13b »3t 13b 

10b +b»0b IB 
35 +2 35 33 
+b <8 rib 
+2 82 Oo 
-6 445 435 
+b 841 40b 


AFRICA 

soentAfwCA (Oct 2B/ Rand) 

*/- NR Laa W Iff 

10.10 -.10 IOlSS 670 49 _ 
2790 _ 201790 11 

121 __ 123 0390 2 8 _ 

200 _ 255 115 29 — 

23190 -1 20450 HP-50 17 _ 

473 -90 508 3*4 24 _ 
ted -1 1*0 102 14 — 

32 +.75 57 2090 .. _ 

2675 -75 31 20.75 10 — 

SO -1 00 42 61 _ 

340 -.10 490 £45 14 — 
5 _ 17175 97 6* _ 

8 -.101075 8.60 2 5 _ 
B -50 7390 48 34 _ 

11.76 _ 1*75 775 49 — 

30 >_ 35 2290 £3 

35 -75 *2 30 +.4 _ 

20 _ 2390 1090 £0 

6075 -175 80 53.79 S9 — 

Gencor 14.60 -.151675 7.9* 14 _ 

BFSA 126 — 130 8790 17 _ 

41 -75 47=375 — _ 

22 -60 26 75 1676 79 _ 
3125 -75 34 10 14 — 

4.71 -48 443 £15 19 _ 
9590 _ W 65 14 

100.50 -190 122 76 1.0 „ 

70 +2 B4.HJ 83-50 £0 _ 

0090 -75 75 41 24 _ 

8090 +50 100 7S 14 „ 

Uriah 17.75 -75 22 Tfc.S) _ __ 

Nedcor 3290 — 35 28 14 _ 

PlfabM 717S 01 5950 77 _ 

Promt*! £40 _ 7.75 4.75 £8 __ 

44 +90 5650 3790 £4 _. 
2B +.76 3675 2390 1* — 
1790 _ 2650 1650 14 _ 

11475 -78 126 72 1.4 „ 

SdRaa 1176 +761390 0.70 _ _ 
Samce 1676 — 20 16 =4 _ 

SAfiraw 55.78 +.7510450 79 17 _ 

BAWdWl 53.75 -75 602660 17 _ 

33 37 27 29 — 

127 -3 164 ICC 27 — 

47 _ 56 *0 19 

4£G0 —75 46.75 2375 19 _ 

4=6 -4 *00 358 12 _ 

W Ana 7840 +90 TU50 33 £0 

-2 230 151 29 _ 

-3 604490 £0 — 


Hriric 17.75 
Itodcar 3150 
PMriM 71 JS 
Promt*) £*0 

44 


ItMft 11475 
ElflfaB 1176 
SfafaCB 1676 
SAfiraw 01.78 

BAMnAtfl 55.75 

SUfa 33 
StM 127 
UgOH 47 
IteaHul 4£G0 
«M 4=6 
WAraa 7840 
WDaqi 






103900 Bapap 

aoiaoMM 

01648 
0218191 


114300 tayOri 
Wcd ru ndBy, October 26, 199* 


® FT mS ANNUAL REPORTB 8BWICE 
VuoaakWi banawamnaala •awiatay 

nnaaarOTabaalabi £ IMM (MM ta BM 
RtMLIWaOr 770 8770 nae M aonkxMn* 

VJ a*dwad4a>feaKI7N3K£«cri«feriae*bM 
To tKdu«44n77oanBwtBt44U770ria. 
Banteaa aa ■/« « aa afa aartfai aw. aafaa a 



Stocks 

Owing 

Change 


Stacks 

Cloring 

Change 


Traded 

Prices 

on dey 


Traded 

Prices 

on day 

HBacfti Zoson 

_ SJm 

538 

S 

NKK 

3.4 m 

ZT 

-2 

Shop Corp 

- 4 -5m 

1780 


Toyota Motor — 

3£m 

2100 

+20 

Nippon Stool 

.. 44m 

392 

+2 

Mppcn Paper - - - 

24m 

750 

+12 

Kawasaki Steel 

34m 

437 


NDdco Sacs .. 

2.8m 

1100 

+10 

Mitsui Co 

34m 

855 

+4 

Mtttubtohl 06 

£2m 

1060 

-10 


How do you keep up with 
an expanding Europe? 


us INDICES 


ifeusm+tivs) 
OmpoaRBf (1879 
fWfcfcffi IVW83) 

CM* 

PGA 6» 01/12/90) 


Oct Oct 

25 24 


H 1908741 1972563 28470*0 102 1779800 20M 

20,74 2D2LS 2037.4 234040 3/2 1SS740 27A 

10662 1D723 10B34 1WU 02 90400 5fi 

M 37604 380.7R 48068 212 370012500 

H 101200 102404 122275 172 lOriSI 6/6 

135400 134825 136*76 154295 9Q UK38 7710 

H 454340 4344148911100 1S9 300030 3f1 

U 41004 416201 40602 2010 329006 20/4 

U 0*200 428600 460800 23Q 306808 24/6 

H 2051 71 206240 218299 U2 1808*8 206 


MUM 

26 25 « Htft 

irejtof 197R M 257838 263302 2901.17 £2 

CSS m£an(End 83) 4260 4257 428.1 «U0 31/1 

CSS«Shr^d83) 283.1 267.1 2684 20(08 31/1 



40830 21* 
25700 21* 


Cap. 40(U7*6) 


206833 206144 


(UbSgbWUQ 2tESQ,T8 105(53 106642 12,1.10 ZSC 

Hridom 307826 306831 311115 330137 (fl 


PGA 6* 01/1207) M 55119 559(7 587*20 ISflO 300190 4M 

Onpn3!wpfiE(3/U83) 34476 34299 3(722 41179 2/2 . 33831 7n0 

WCQm«42V12l60| 16220 TBTOLO 194£1 W200 40 MLIO 3/1 


88 F 2G0 pi/12/BQ 1231 77 122706 1238.73 188U0 20 

CU 4001/1207) 1831 J4 182MZ M41JB 235U3 2/2 

F»2/Winf31/iai3> 78332 75142 76TM *!» 1K5 

OronKtarttViasj) 21085 21W 2«&* MJ650 2S 

OafOiaHJlt 202150 167*93 202538 2Z7L11 lfi® 

MhraSUn/taOQ >18*6 82144 83625 1W4S8 10/1 

tag fag 

Hang S««pl/7A^ 3252*4 924850 936429 1220140 4/1 

BSESmflSTS) 4357** 435558 432£S7 462857 12/9 

9 tari^nap/IO«B2) 51832 51(53 ST2.48 6t206 B/l 

Jnfaod 

GCQOMriiVUOa) 170834 176624 161058 TOBM avi 

araCtnnH(W2) 6WL41 B1S7B 

MB Gwanl (Vl/OQ 9BS0 90*4 10074 131840 1W 

NRWS23 (166/431 T974635 19732.^ 19^ 

*tai 300 (1/10®3 296B0 26892 »M0 W8 

Data M/MB) 158894 1588*0 1578.19 17ttM «W 

2Bd SI(ta(V1/6Q 219(89 219152 SWISS 25(205 8/7 


12Z74B ZS/10 
1824*2 25/10 

MZM 5/10 
2T1&X 5/10 
*96859 7/tO 


BTA (1977) 26867 2897* 26023 SBfl) W2 

^M^pcra(2M/7S 66192 58036 56334 B4LB, 4/1 

^QH^B/TB) 22850V 23024 23164 293(08 70 

JSE fad (26W7SI 657D4V 6S384 68034 675740 ISA 

Sawn Ram 

KonUnpBHAifflOr 103243 106142 1081 90 ttma IB/10 

38* 

yaUSEpa/BflS) 26845 28830 29334 35831 31/1 

MnwrtfiBfi (1/2/37) 145840 144840 14S740 NB340 31/1 

9riBttM(3tn2S8) 115143 1158*0 117154 14233* 3t/l 

SBC Gamri (1/4*7) 68(16 888*8 06697 W32B 31/1 

Dhri 

inMUBifTnrnmri- Geasar & btsob mta aao 

taSokSETPOM/79 151(07 1501JS8 0 175333 4/! 

feMri dwittn 1B8Q 248085 2(73(7 236050 20H860 13fl 

nu 

t£C*)Btftatn/1/roff 6302" 6302 6314 54*40 20 

OBBMDB 

Bndnck HXXS/1Q/EBI 13087! 129640 131242 154019 31/1 

BCD Tfe-lOO 08/Bflq 114832 1145*0 118017 tXfLfil 2/2 

JCririkmdVIUn M 332.10 33641 SOLID 5/1 

BBk^B bmtfjtntiB) M 181.10 18(118 19i» 2 BS 


174800 14/2 
644840 W1 


Mririri 

-nsnsq 

385590 

389190 

317896 

359335 

397396 

4122 





01/1) 

(W) 

01/1/84 


Hone 6aods 

8594 

9574 

9566 

1059, 

9594 

18877 

5(86 





(21/1) 

(25/10) 

(ion m3) 

(1/1001) 


W(13 

1476J6 

18)097 

mt?j« 

143890 

168790 

1292 





m 

&W 

wm 

wan 

inm 

T779J 

177*3 

17997 

22791 

17595 

2SK46 

1050 





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40 





THURSDAY OCTOBER 27 l‘M4 


4 pat dost October 26 



NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


hm w. Pf sb 

mu IftrStaek Hr * E in 

17% 12% AM* 0.48 19 20 155 12*2 IS 1 * 12% 

17% l&ALLab*Ax M8 1.1 38 224 18* 18% 18% 

nhBfiaW 1X8 £2 33 2051 77V 70% 

72% 48% AMR 89 1480 E 30% 

12 184 3% 3% 

200 4X 32 543 50V 49% 

0.76 25 1711478 31 30*8 

150 M 9 104 
152 25 177 

30 271 
144 20 ZB 280 
1 JB 11.7 *44 


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5 AN* 

561*38% ASA 

32 25*3*1*0. 

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10** 7MMGU0PP 16011.0 213 

10% 7 *04 tot $1 IBS 112 214 

12 B%*04totS« 1.09111 255 

11% 7% ACM Mm UB111 140 

8% BACH Itaragd 172 B6 212 

15% &% AaneCb 1*4 13 18 

13% 6% Awe Bad 9 

28% 23/tamfa 160 11 14 

13% 5%A»n 136 19 2 436 

17 11% ACUW1 126 1105 (6% 

10% 18*2 Mm 6qr 146 26 0 42 17% 

0* 48% Ad Wen 100 56 13 53*2 

100 112 ID 3481 2<% 
lie 10 8 150 6*2 
110 05121 107 1B% 

1.47 13 18 17 62% 62*2 62*2 

£76 01 61186 45% 44% 45% 

046 14 13 SOB 32% 32 32% 

088 4.7 13 3755 18% 18% 18% 

1 37 1% 1% 1% 

196 12 24 814 45 44% 44% 

130 1.6 11 6012 19% 016 18% 

49 43 28% 

1.84 11J 12 8 16 

5053 29 

120 11 25 402 1 
135 1-9 31 557 18 . 

020 13 ZtE 16% 

128 12 18 168 24% 23% 24 

028 12 17 251 22% Z2% 22% 

0.44 1-5 a im 29% 23% 29% 

130 1.11X6 8821 27% 27 Z7% 

1.00 1.7 4g 1051 58% 57% 57% 



31% i»% perns 
6% 5 Admt Grp 

20 lSAtimhc 
63% 49% Aegon ADR 
65% 44% AdnaLx 
38% 25% AUK 
22% 16% Atman 
4 1% Alien 6^ 
50% 38% AtaftC 
39% 16% Attne fit 
19% 19VAtgmhG 
17 T4% AMobsi 
30% 21%MtTa 
18% 13% AJasMAk 
21% 16%AOenyH 
17% 13% AB8Y1 
25% 19%AMBB 
23 17% AKatrr A 
30% 25% AHn 
28% 19%AJsnAl 
05*2 49% AlEOSl 


13 12% 

20 % 20 20 % 
16% 16% 1 
23d22% 2 _ 
0% <B% 9% 
7% U7 7% 
7% 7% 7% 

8*2 <8% 8% 
... 8% 8% 8% 
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68 13% 13% 13% 
123 12% 11% 1*% 
53 28% 28 28 

9 B% 
16 16*2 
17 17 

53 53% 
24 24% 
5% 5% 
17% 18% 



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24% 17 A6401 Lua 

28% 18% AfcpP 
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28 20Atayan 
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27% 17% AMCSOX 1X4 10 21 
10% 9 Alhce a 118 IX 

Z7% 21% MS tat 
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11% SABmr 
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35 21% Afunax 
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30% l7AtaCpA 
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6% 6% AmftflCt; 

8% 6% AiaaxGd 
25% 19% Amcadbd 
52 r 


30% 23% Itadmni 170 17 4 101 26% 25% 26% 
22% 14 Alexftl 110 15114 128 10% 19% 19% 

148 14 18 101 20% 20% 20% 

1X4 7X 11 404 21% 20% 20% 
115 OX 18 894 23% 23% 23% 
144 1.7 16 355 25% 3% 25% 

1 n 3 »S 2 

090 3X 14 *3 23$ 23% 22% 
067 1.0 7 4246 34% 34% 34% 
184 15 105 9% 08% 6% 

195 17 18 2495 26% 36% 26% 
25 592 6% 6% 6% 
15 2805 30% 29% 29% 
1X0 1.9499 4750 86 84% 85 

33 3524 18% 17% 

186 12X 302 7% 

125 3.4 25 4 7% 

108 1.1 12 552 74 
052 25 14 70 

160 IX 49 1513 
024 16 III 
110 14 33 9053 25% 

200 17 1021444 35% 

_ i Am BuaPiri 160 16 14 407 Z% 22% 22% 
8 6% Am Cap be 165 9.4 88 7 6% 6% 

20% 18% Am Cap Bd 1X4 10 30 27 17% 17>i 
23% 18% Am bp Wx 1.06 S.7 0 U 19 18^ 

99% 42% AmCjan 1X5 1X 57 9343 99% 

37% 27% ABB* 240 7X 18 2065 31% 31% 

33% 25%AnE*T 190 30 1213425 30% 29% 29% 
30*2 24% AnGri 1.16 4£ 23 3884 Z7 26% 28% 
8% 5% AmGontta 177111 225 B 5% 5% 

27% 20% Am MU ft x 23011.4 7 326 20% d20% 20% 
168 3B 11 28 17% 17% 17% 

202 4J 13 1942 62% 61% 61% 
175 216 9 6 2% 2% 2% 

148 19 15 2041 90% 88% 88% 
1X0 133 441 7% 7% 7% 

168 3.7 275 23% 23% 23% 

140 1.7 
144 17 
148 IX 


52% 44AmdaHs 
9% 8%AnA4R 



20% 16% Am Hankie 
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2% 2% An HoMa 
96% 81% Amtatt 
11% 7Affl0pphc 
30 22$ Aaftam 
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8% 7% AmRfdEa 
27% 21 AnStor 
22% 18AnMdr5% 1X5 72 
32% 26 An Wat x 

48% 38% Amrtdi 


43% 3 

1B% 11% Amatek 
61% 50% Amoco 
9% 8% AnaBoPU 
4% 3*8 Amine 
34% 28AttJ0C01 
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58% 42%Anadadn 
33% 23% Anatag 
28% 24%Angaaca 
55% 47% AnBscft 
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35% 30AoiCpx 
28% 22% ApachaCip 


275 23% 23% 

9 7D0 24% 24 24 
5 30 7% 7% 7% 
71791 26% 26% 26% 
15 10dt7% 17% 

26% 28% 

33% 38% 


1X8 4.0 11 176 26' 
1XS 4X 14 6328 



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32 Amend hex 1X8 16 S 42 35% 

124 1X181 219 1B% 13 

2X0 16 18 6573 81% 60* 

110 1.4 5 II 7% 7 

112 17109 240 4% 4 

1.40 4J 9 On 28% 28% 

10 205 2% 2% 

130 06 67 4002 47% 44% 

32 983 33% 32% 33% +1% 
194 3X 24 38 26% 28% 26% -% 

1X0 32 23 2092 51% 50% 50% 

214111 32% 31% 31% -% 

144 2X 17 6 17*4 17 17% 

1X8 «X 7 494 31% 

. 0X8 IX 38 8877 27% 

10% B% Apex ton F> 171 15 238 B% 

M% 14% APH 38 838 22% 

7% 3% AppMMag 0 329 4 

25% 16%An*PwA 112 OX 37 5B 23% 23% 23% 

28%21%A0lOn 0.15 OX 20 9036 28% 27% 28 

51 43% Arco Own 2X0 51 22 229 48% 48% 48% 

51% 45%Amim4XP 4X0 17 7 46% 48 48*4 

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140 IX 12 zlOO 30% 36% 30% 


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45% 33% Anew Eke 
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37% 26% Annan 
57% 49% AT&T 
263% 226% M Bell 2 
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21% ISAtMcEOT 
112% 92% AMI 
ID 3% 



1X0 £0 14 I32G 38% 37$ 38*p 


2% 


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128 11X 8 312 2% 2% 

112 OX 25 1047 37% 37% . 

1X2 15 18115 54% 53% 53% 

200 1.1 2 253 250% 2S0% +6% 

108 14 14 874 32% 32% 32% 

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1X4 8X 8 825 16% 16% 16% -% 

5X0 52183 4580 183% 104% 108*4 +3% 

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20% 16% Atm Engy 0X8 52 8 75 18% 16% 16% 

12% 8% AIMS AM 034 18 10 555 0% 8 0 

24% 17% Augn 118 18 22 1154 18% 18% 10% 

12% E Austria Ft! 110 IX 139 8% dB 8% 

50% 47% AuOab 1X0 1.1 25 1804 56% 56 66 

144 10 10 25 14% 14% 14% 

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060 IX IS 1328 36% 35% 3B% 

100 13 17 4981 60% 50% 60% 

8 154 10% 10% 10% 

20 767 5% 9% 5% 


30% 13% Amoco 
19 7% Mai 
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62% 48% AM** 
14% 10% Aydn Carp 
7% 5%Azar 


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30% 31% BCE 268 

9% 5% BET ADR 0X1 
5% 3 Borneo 120 

17% 15% Bttw FM 140 
22% 17 BdwH 0.46 

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30% »%fe«p 160 

15% 6%6U4d 005 

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25%20%BB#GE 1X3 

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38 26% BncOne 1X4 
28% 20% BeneoBI V 0X4 
12% 9% Bzncotemh 172 
34% 27 Benrtawai i.04 

1% % BancTma 

63*2 48% BrntaB 170 
50% 36% BankAa 1X0 
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28% 22% BMMn 1X8 
48% 44BkBoanP 104 
33% ZSBartMVx 1X8 
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53% 31% Bucn 198 
3% 21% Banter 105 
3% 23% Bay a Gn 1« 
22% 19%BdTr1S38 1.72 
23*2 15 Boar SOra 160 

50% 45% BesSAA 108 
37% Z7% BavtiBB 172 
32% 23 Badomt h 140 



TECHNOLOGY THAT W08X5 FOd 


Samsung 
8mm Camcorder 



8 Times Rjwer Zoom 
Palm-Size 




BEcraotecs 


48% S4%BkU7 
7% 50908* 

58% 4BBHA0 

2 * 13 % Win 
63% 61% 0e*SBi 
55 43% B* A 
25% 20% Barts 
B9S4%Band4XF 
44 34% Banal 
36% 24% BaneOon A 
1% VBnomB 
19% !3%BeniBrx 
1865815100 BeM 
10% 8 Beny Psfc 

28 % 28% Mai 

42% Bob L x 

^IUbES 

22% iSBbdkHFL 

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i&isr* 
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50% 42% 



30% 19 Bob 

1% 10MB1N 



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Oh I EM IK 

174 IX 16 696 47% 47% 

0X6 14 2 10 5% 5% 

176 5.6 1« 2204 Efl% ■«$£> 

140 2X 17 54 19% 19% 

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4X0 7X 12 64% 664% 54% 

1.72 44 12 459 40 38% 39% -% 

047 IX 15 13 26% 28% 26% -% 

0X4 4J 16 186 % Jj H 

048 13 19 1283 15 M% 14% 

53 Z80 10600 19550 16600 *50 

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23 8250 36 37 37% -% 

2X0 0X 21 27% 27% Z7% J 4 

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140 22 7 7872 18% 18% 18% 

1.44 10 23 107 48% 47% 47% 

33 1367 16 M' 

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140 1.7 24 6188 U24% 

1X2 16 12 38 20 

073 11 115 8 

17512X 1553 6% _ . 

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1X5 2X 2B 3448 45% 44 

112 1.8 25 6% 6% 

0X6 OX 9 202 16% IB 16% 

1.00 ZJ 11 5843 44% 43% 43% 

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108 04 34 2063 16% 16% 16% 

z 2.08 9X671 3121 23 22% 2~~ 

030 2X 17 5485 13% 13% 1 

1X5 5X 7 7 S3 22% 2 . 

160 2X 28 1089 27 26 26 

127 00 75B 33% 32% 33% 

240 70 7 100 30% 30% 30% . 

1X4 2.7 11 688 88% 87% 67% -1% 

17 5393 21% 20% 21 -% 

2X2 5.1 15 B438 57% 56% 57% 

1.77 10 74 2GB 60% 50% 59% 

2.40 5.1180 253 47% 4tf£ "" 

20 

0X2 1X 36 45225.—. — . 

3X7 11 18 712 62% 61% 01% 

1X5 5J 13 102 23% 23% 23% 

1X0 4.7425 79 34% 33% 34 

0X2 4X 4 noo 7 7 7 

0X5 3X 4 102 29% 28% 28% 

0.68 12 26 1663 31% 30% 31 

37 27 4% 4% 4% 

144 22 35 6042 20% 1 ' 

0X2 IX 42 36 17 16*g 16 

2X0 7,7 10 45 38% 38% — . 

0 1035 13% 13 13% 



34% 29% BUS Prop 

90% 66%Brtpa 
33% 19% Brt*ab 
50%50%MftSq 
74% 64% STAY 

54% SBftOBa 

81% 55% BP 1.78 2X 26 5185 u81 

27 18% BP Prufna X 1.74 18 6 205 20 
27% 1BBSM 
71% S3%BT 
28% 22% SMyidJ 
38% 32% BramGp 
8 5% BnmSh 
30% 26%Bnftas 
32% 24%EhfoTT 
4% 3% BUT 
25% 17% BmMK 
18% 13% Brash HM 
41 35% Buckeye Pt 
28% 12% Burt Cow 
66% 47% BMW 

49% 38% am Han — ^ 

19% 15%BMDtwaPc 1.44 9X 20 268 15% 15% 15% 




1X0 2.4 1 6 1 810 50% 49% 50% 
155 IX 20 8740 40% 39% 40% 


- c - 


35% 22% CO 
72% 50% CBS 
25 19% CHS En 
82% S0%DUFn 
54*2 44% CPC 
20*4 14CP1D&P 
02% 65% CSX 
31 ib *2 CIS Carp 
24% 17% CBHeUlIre 
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28% 24% CSDMC 
23% 17% CafiotQ&G 
20% 10% CadncaOsgn 
59 35% CananWI 
2% 1% Cal Red E 
15% 10*2 Caloan Cba 
19% 15% Ce&igy 
15% 8% CWFad 
25% 17% CUhtKGO 
42% 34% CnpUS 
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18% 14% CarPac 

85% 50% CapCS 

14% 12% Cpatd 126 k 1X8115 
37% 20CapmiX 1X0 8X 


148 2.1 27 4456 23% 23 23% 

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15 19 B1% 61 01% 

1X6 2X 17 2116 52% 51% 52% 

ISO 2.7 22 408 u20% 20 

T.76 2X 20 1244 69% 

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12 3338 
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356 540 19% 
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116 IX 22 327 II 
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140 2.0 54 67 19% 
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0X2 2.0 60 5518 15% 
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69 69% +% 
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27% 27% 27% 

17% 617% 17% 


42% 22% CqBU Hga 3X2149 6 


26% 15% Caramik 
35% 30% CartCn 
24% 16% Cdnnlce Cf 
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60% 50 caps* 

17 io% cor Cap 
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20 2253 21' 

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196 7.0 12 38 13% 13% 13% 4% 

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105 16 16 434 8% 8 6% +% 

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100 14 1 617 8% dB% 8% -% 

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020 IX 2155 13 

63 77 5% 

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X 


FINANCIAL TIMES THURSDAY OCTOBER 27 1994 ★ 


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Rain me edse over your competitors by havff^ tire Rnaidal Times delivered to your home of office every working day. 
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HaaBtx^n 121127 8% 8% 8% 

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Hett4 11 10% 9$ 10% +$ 

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LanchdcGpti 

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Legenl Qi 

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LHeTecn 

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LHPfins 

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LBjtndA 

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LhdrayMI 

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UnewTecx Oa a 1248 47$ 46$ 47 

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LquBot 

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LomnCp (UK 31807 24% 23$ 23$ 


Lura Star 

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6% 5$ 6% 

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Intiwfl 

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LTXCp 

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LVMH 

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MS Cart 20 3*7 23 22$ 22$ 

Mac Hi 060 41 » 13$ 13% 13% -% 
MartanGE 108 14 a 33% a 33% 
Magma P wt 163127 37 36$ 38{! +ft 

Magna Bp 07B 13 161 a$ a% 20$ -% 
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ManzmCp 23 348 9% 8$ 9 

Marine Dr 104697 4 3$ 4 

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Mamuest 2 30 1% 1% 1% 

ktetana 18 57 8$ 8% 8% 

Kta£n*AdM4 12 12 12 12 12 

Uarabal 060 10 1377 20% a 20% +% 

Haste 9 102 7% 7% 7% 

Maxim W 50 900u65% 64 65 

Maxtor Cp 01642 3$ 3% 3$ +% 

McGiaB Rx044 12 ai 15$ 15$ 15$ +% 

Metarule 048 152668 a 19% 19% -$ 

MBdKhC 01616 70 13 12% 13 

MedfcheS 048 13 285 23$ »% 23% 

Melandne 0» 67 474 9$ 9% 9% +% 

Mertor Cp OIB 57 565 17% 18% 17% +$ 

MenbG 024 2921381 13$ 11$ 13ft +1ft 

MtatartB 000 11 813 »$ 20 20 -% 

Mercury G OM 7 463 23 27$ 27$ 

Utrtfian 106 11 1924 a$ ffl% 20$ 

Mortal 92113 9% 8% 9 -% 

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MfchaeiF 020 22 Iffl 11$ 11% 11% 

MCh MalS x 200347 423 78$ » 76% +2% 

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Manage 83107 11% 10$ 11 -% 

Hanaro 62018 7$ 7$ 7ft +ft 

Hapafx 10 500 B% 5$ 6 +% 

Ucrpett 2 425 8% 7$ 7$ -% 

Halt 17S9870u81% 59$ 61 +lft 

UdAfM 24 8 » 27$ a 

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HdwBahxOS) 21 13 26*2025$ 25$ -$ 
Mtoai H 052 181274 25$ S% 25% -% 
HOcm 850 28% 26$ 27% -% 

Mbedeeh a 500 15% 15 15 

McUeTai a 2076 20$ 19$ 20$ +% 
Modem Co 02020 32 0% 7$ 8 +% 

Matte HI 052 21 309 30 29% 29% +% 

Mote OM 245 40% 39$ 39$ -% 

MoiH be 004 32 656 43% 42% 42% -$ 

Moecaai 004 15 748 8% 7$ 8% 

Washoe P 036 a 158 a%d2S% 27% -% 
MTSSys 008 fl 17 »% 22% 23 +% 

Utttod 13 1097 29% 28$ 29% -% 

Mycogcn 4 403 10% 9$ 10 


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NACRe 016 11 IM 25$ 25% 25% +% 
He* Fort Q7211 11 19%d15% 16% +% 
Net Cant 036116 11 14% 14 14 -% 

NtroSm aa 19 48 13$ 13 13 -% 

NartgaUr 600 6 3 15 15% 15% -% 

ICC 043107 a 82% 82% 62% -% 

Hb*ot 18 879 29% 23 29$ +% 

Hawk Gen 23 4268 19 16$ 18$ +% 

NettaS 90 230 6$ 6$ 6$ +% 

Nwrogen 8 15 8$ 8% 6$ -% 

HewEBua 000 21 794 10 16$ 19 +% 

New Image 34 EB6 6% 5$ 6% +% 

MxdgsMel 22 1414 30% 29>Z a 
NenprtCp 004 19 47 7$ 7$ 7$ -% 

NobtoOrt 21 9992 7 6% 6$ +% 

Nodson 056 a 81 55$ 54$ 55$ +1 

(team 040 a 3925 43lj 44% 45% +1 

Nostan) 14 3 2D 19% 19% 

NStarUn 3 EG 5 4$ 4ft -ft 

HDtUiTd 008 121141 36635% 35$ -% 


MN A# 

21 1217 20% 19% 23 +% 

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-0 

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Octal tan 

16 

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OdeftsA 

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OAtmLg 

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OgtatnyN 

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119 

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OrtiScnce 

45 

343 

18% 17$ 17$ 


Mated! 

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OrtMSupp 

6 

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OreganUel 031 12 

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Ostap 

14 

103 

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OsttSA 

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11$ 11% 11% 


onerta 

1-72 14 

122 

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PSdtantop 00211 

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102 16 

200 

25% » 24$ 

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FacUCra 

30 

488 

74$ 71$ 73% 

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Pranebc 

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Paydtexx 

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37$ 38$ 36$ 

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Payed Am 

21 

23 

8$ 8 8$ 

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Peaks 

050 57 

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13$ 12$ 13$ 


PemTrty 

9 

1» 

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PernVbg 

100 73 

10 

34 a a 

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Pertatx 072 182502 43% 42% 42% -1 

Penttch I 13 185 5% 5 5 -ft 

FencataL 02323 392 22 21 21 -% 

Peoples H 040 14 3a 14% 14 14% -% 

Petralto 1.12 16 a 30% 29% a% +% 

Ptaracy 42 294 14% 13$ 14 +% 

PttenfTdi 35 1791 u7% 6$ 7% +ft 

nectatt 048 3 2 8% 8% 8*2 


Pk&nto 

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Pinkston 

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47% fl 47 +$ 

PUMtlH 

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PtraUte 

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Mtost 

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Pride Pet 

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Moral 

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Pultun B 

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Pyrratt 

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Omfcatry 

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PT Sk 

Start Db. E Mi tort is- M O-g 

OMhaCnm 002 72 12 18 17% 18 

Qgel Food x 020 15 IBS 22 21% 21% 
Quantum 65 5651 14% 14% 14% +% 
Odds* a 573 16$ 18% 16% -% 
QVCInc 93654 43$ 43% 43$ +% 


- R- 

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Ralyl 3 530 4$ 4 4% ♦% 

RaOBrtpe 1 1565 4% 3% 4ft +ft 

Rttnond - a 127 a 18*4 20 +$ 

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HeUfe A a 1041 23$ 23,1 M% *% 

Repigen i 311 3 2$ 2$ 

FtopWaste 6 53 3*z 3% 3>z -ft 

Ftosdttd a 416 12$ 11% 13 +% 

Hautera 037 15 1044 44}J 43$ 44 -% 

Rewnhc 910E6 5ft 4$ 5 -% 

Urn Fit an io 2 33$ a% 33$ -% 

meows 1.4a ta 957 56% » 55$ 

HbHgrt 012 14 331 7% 6$ 7% +$ 

RochfivBk Ofl 41172 19% 16$ 10$ -% 

Ftooaanlt 044 2 2027 15% 15 15% -% 

RossStr 020 11 1172 14$ 14 14ft -ft 

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Reese 008 58 290 19 10% 10$ -% 

RPM me. x 056 a 3389 18% 17$ 18ft +ft 

RSFhx on 13 5 a 22% 22% +ft 

Ryan Fnly 113268 6% 8 6% 


- s - 

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Sanderoon 030 15 301 u20% 19 20% +% 

SdtonbgrA *030 21 361 2fl% 26$ 29% *% 
Sd Med L 123247 46*4 45 46 +$ 

SQSystai 14 vase 17% 17 17$ +% 

Seta 7 1033 5$ B% 5$ +% 

ScMexCp 052 10 7040 21$ M% 21% t% 

Scam Bid 6 249 4% 4% 4% +% 

SsafleM 120 43 10 36% 35% 35% -1 

S'gate ii flaai 24% 23% 24% *% 

sa Cp 016 a 238 20$ 20% 20$ ♦% 

SaBtasB oa 6 44 2ft 2ft 2i3 +ft 

SBtaOra 1.12 14 247 25*4 24$ 24$ •$ 

Seguert 87 3935 18$ 18% 18% -% 

sand 24 ai 3ft 3ft 3ft -ft 

Sen Tech 1* 9 9$ 9% 9$ +% 

Sen# tea 18 3 4% 4% 4% 

Srmnsen 022 17 42 19% 10% 19% +1 

ShrMed 004 a 4679 28$ ZB 28% +% 

SHLSysm 2 345 S% 5% 5% -% 

Stemmed 32 02 a% 19$ 19$ -% 

ShouMzP 7 536 B% 7$ B% +% 

Stone Oe 17 300 23 22% 22 

StamTue 4 MOO 3% 3% 3% +% 

StamN 033 10 1770 35>z 34$ 35% -% 
SigmaDes a 571 8 7% 7% -% 

StacdVBc OOB 58 433 11$ 11% 11$ -% 

SBoTBp 52 2242 1 8 17$ 17$ +% 

Stepson Ofl 15 176 13% 12$ 12$ -% 

SmSMd 40 447 29% 23 29% +% 

SnappleB* 3824072 15 14 14$ +$ 

SoRwaroP 1 451 4$ 4% 4$ +% 
Sonar 056 16 2058 22% 21% 22% *$ 
Southtst 000 94449 19% 10$ 16$ -% 
^togd Ax 000 314663 15$ IS 15 -J1 
SI JudeMd QAO 151530 35$ » 35$ +% 

St ParSc x OS 9 375 20% 20 20% *% 

StoyBI 1 864 1% d1% 1ft -ft 

Staples 493097 32% 31% 31$ -% 
StateSb 000 14 5218 33% 32% 33% +$ 
Sid Hoe 18 783 23% 22% 23% +% 
SMRetfa 008 12 36 17%Ct17% 17$ +ft 
Steel Tec 000 14 209 13% 013 13% +% 
StoMiUGA 020 34 62 9% 9% 9% 

5UW 141 23 19$ 19$ 19$ -% 
StBWbra 1.10 14 2 22% 22% 22% +$ 

StucSy 83161 4% 4 4%+% 

Stryker on a 1105 35% 34 35% +$ 
SHhoiD 21 27 14% 13% 14% +$ 
SuOtamoB 000 15 9U25% 23$ 25$ 

Suite Be 004 13 319 21% a$ a$ % 
Suite Te 331483 K% 31% 32 -% 

Sen Sport 10 182 4$ 4% 4% 
sumac 1710090 31$ 31 31% +% 

Stott Tro 48 173045% 44$ 45 -% 
Sybase he E015BS2 52% 48% 52% +3 
Syroattc 436991 10% 10 16% +% 
[ Synatty Ofl 19 92 20 19 19$ +% 
Synareom 102 319 5% 5 5% +% 

Synergan 14949 5$ 5% 5,1 +ft 
Syndic 07 a 16% 10% 10% 
SyetmSoR 012131091 12% 11$ 12% +% 
SystemSco 31 295 19% 19 19% +-% 
Sydemed a 280 6% 7$ 0 


- T - 

T-CelSc 4 918 2$ 2% 2ft -ft 

TjdwbPt 052 18 556 30$ 30 30% +% 
TBCCp 13 108 9$ 8$ 9$ 

TEA Carte 044 a a 23$ 23% aft +iV 

ToetData 11 1231 18 17% 17% -% 

Tecmnsdi 000 12 11 40$ 40 46% +% 

Tetete 161229 U25 20% » +4 

Tdco&n* 13 35311118% 17$ 10 +$ 

TatCUA 17720144 a% 22% 23ft We 
TatoM 7 991 4$ 4$ 4$ 

Tetats a 2720 49% 48% 48% -% 

TebraiCp 001 682727 13% 12% 12% -$ 
Taka Tec 71 648 8$ 8% B$ +% 
TertPMDR OIO Z7 869 Z7% a$ a$ -% 
TtneOxn B1 13672 41% 40 41% +1$ 

11 MOO 5% 6% 5% -ft 

TJht 022 a 1282 16% 17$ 17$ -03 
Tokos Med 5 800 7% 6% 7% +% 
Tokyo Mer 034 34 MOO 58 58 58 -% 
Tom Btom 67 3877 12$ 12 12$ +$ 

repps CP X 026281 891 5$ 05$ 5$ -% 
mate 23008 5% d4ft 5% -% 

TmnsUMd 25 12% 12% 12% -% 

Tromrick 100 10 IK 37% 37 37 -$ 

Trtcara 17 3 » 2% 2% 2% -% 

Trimble a S3 14ft 14% 14% +% 
TnatooBkC 1.10 10 287 a 19>4 1BJ5 -B 
Tseng Lab 020 11 775 6$ 6$ 6ft +ft 
TysWA D081821338 23% 23% 23$ +% 


- IJ- 

US Miter 084 1713003 47% 46% 47% +% 
Unite 2 843 5% 04$ 4$ 

UCUesSs 100 13 52 16% IB 16 
USTst 200 134217 o56 56$ 58$ +3$ 
UnSedSt Ofl 61622 10% 9$ 9$ 

Untog OOB 14 a 16% 17$ 18% +% 

(Jnftrfn 100 24 998 46% 44$ 44$ -% 

USBaacp 100 8 3422 23$ 23$ 23$ +% 

US Energy 5 27 4 4 4 

USTtan 1.12 7 121 11% 10$ 10$ -% 

Utah Med 15 46 9% 9% 9% -% 

UUTetov 12 a 51% 51$ 51$ 

IRb 12 9 4 4 4 -% 


- V- 

Vrtnud 030 a 604 17$ 18% 17$ +$ 
WOd Cel 102 1037 27 20% 20$ 

iVtottone ai444 zza%zi%+i% 

Vknr K 265 25 24 25 *% 

V&npR* ID B7B 17% 16$ 17% +% 

Hewtoefc 290 918 21% 20% 29$ -% 

VLSI Tedi a 5712 12% 11$ 12% *% 

VdraB 017 18 266 20% 19$ 1B% 


- w- 

ttemerBi OIO 19 809 a 24% 24$ -% 
Wtomuch 00 149 5,’ a 5% bft +ft 
WteUSBrara G 3764 18$ 18$ 18$ -% 
WaoWadSL 084 71245 18%d17$ 10 

wauhdA oa g 2a 24% a$ a -ft 

HtausarPUQH 14 521 24*2 23*2 23% -1 

WO-40 2fl 16 27 42$ 4l7 4 42$ +% 

Writ* 4 27 3$ 3% 3% -% 

Wad One 008 10 809 27% 2B$ 27$ +% 

wonmeona 31 32% 3T% 31% -$ 
WWnb 10 007 12$ 12$ 12ft -ft 

WSHjSIA 2 275 14$ 14% 14$ +% 

UtaGeMA 9 75 3ft 3 3ft +ft 

Wtette 096 01270 47% 46$ 47% -% 
MmSonoma 742214 33 32 S% +% 

weUanL oa 15 14 17% 15$ 17% 
WUmol 040 29 1284 22$ 22% Z% 

WT Group 003 a 1088 3ft 3ft $ r f +% 

WysM+OhOfl I a 6% 5$ 6$ 


-X-Y-Z- 

Xtonx a 3879 56% 54% 55% +% 

ten* tap 2 182 3 2% 3 

Teton x 004177 1174 19ft 19% 19% +$ 

TwkRSCS 03 436 3$ 3% 3ft +05 

Omum 120 9 S 38% 37 37 -1% 


WORLD STOCK MARKETS 


FINANCIAL TIMES 


Thursday October 27 1994 


AMERICA 


Early gains evaporate 
on interest rate fears 


Wall Street 


US stocks attempted to rally 
yesterday morning but the 
early gains evaporated amid 
nagging concerns over interest 
rates, writes Frank McQurty m 
New York. 

By 1 pm. the Dow Jones 
Industrial Average was 2.69 
lower at 3,847.90, while the 
more broadly based Standard 
& Poor's 500 was up 0.48 at 
462.00. 

On the NYSE, declining 
issues were holding an 11 -to- 
eight edge over advances by 
early afternoon, in moderate 
volume of 172m shares 

In the leading markets, the 
American SE composite was 
off 0.13 at 452.72, but the Nas- 
daq composite added 2.24 to 
760.50. 

Stocks opened solidly higher, 
with the market trying to 
reverse direction after four los- 
ing sessions. There was rela- 
tive tranquility in early trad- 
ing in the bond and foreign 
exchange markets, and the 
day's only piece of economic 
news failed to excite much 
Interest. 

The commerce department 
reported that factory orders of 
durable goods bad risen just 
0.1 per cent in September alter 
a big gain in the previous 
month. Analysts had forecast a 
0.6 per cent rise, but with most 
investors holding off on fresh 
commitments, at least until 
after Friday's reading cm third- 


quarter economic growth, the 
data had virtually no impact 

Concerns over an imminent 
move by the Federal Reserve 
to lift short-term rates, and the 
move in long-term rates above 
8.00 per cent were never too 
far from the surface. By early 
afternoon the jitters got the 
best of the market and most 
share prices were showing 
modest losses. 

The morning brought a few 
more pleasant earnings sur- 
prises. Most notably. Ford 
showed an Impressive gain in 
net income and revenues, in 
contrast with General Motors, 
which last week revealed 
details or a disappointing third 
quarter. But Its share price 
could only manage to inch $% 
ahead to $29%. GM was 
unchanged at $41%, and Chrys- 
ler added $% at $47%. 

Tenneco. a diversified Indus- 
trial group- posted net income 
which had nearly doubled from 
the year earlier and topped the 
consensus forecast of analysts. 
However, the issue, up $% at 
$43%, hardly budged. By con- 
trast, its Case farm equipment 
business, which reports sepa- 
rately. jumped $1% to $20% on 
strong results. 

Sara Lee, a food processor, 
also impressed investors with 
solid gains in net income and 
revenues in its first fiscal quar- 
ter. Its share price climbed $1% 
to $24. Borden added $% to 
$13% even though it reported 
another loss and slashed its 
dividend. Philip Morris gained 


Canada 


Brazil 


S African industrials make gains 


Shares on the Johannesburg Stock Exchange 
ended mixed with gold shares closing lower as 
buyers turned their attention to industrials. 

The industrial index turned around from a 
weak opening to close 34 points up at 6,572, 
offsetting a 21 point fall on the gold index to 
1L280. The overall index improved 5 to 5,706. 

Brokers said that buyers returned to industri- 


als on bargain hunting based on the view that 
the fall in recent days had been overdone. 
Among golds dealers said prices continued to 
drift lower as the price of bullion failed to 
recover above $390 an ounce. 

Barlows rose RI at JZ32.00 while the petro- 
chemical group, Sasol, finished 65 cents higher 
at R35.90. 


EMERGING MARKETS: IFC WEEKLY INVESTABLE PRICE INDICES 

Market 

No. Of 
stocks 

Dollar terms 

Oct. 21 % Change % Change 

1994 over week on Dec *93 

Local currency terms 

Oct 21 % Change % Change 

1994 over week on Dec W 

Latin America 

(208) 

737.13 

-3.0 

+13.3 




Argentina 

(25) 

938-10 

-0.fi 

-5.6 

575,643.77 

-0.4 

-5.6 

Brazft 

157) 

390.01 

-7.9 

+67.6 

1341.909392 

-5.1 

+1.122.1 

Chile 

(25) 

837.13 

+0.7 

+51.7 

1.37&14 

+0.4 

+44.6 

Colombia' 

(ID 

855.12 

-1.3 

+32-6 

1273.40 

-0.6 

+37.4 

Mexico 

(07) 

961.00 

-2.6 

-4A 

1.416.86 

-2.6 

+5.0 

Peru* 

(ID 

188.71 

-03 

+56.0 

256.64 

-03 

+61.4 

Venezuela 3 

(12) 

537 JO 

-43 

-9.2 

2,096.06 

-43 

+473 

Asia 

(557) 

279.48 

-03 

-4.0 




China* 

(18) 

102.09 

-1.7 

-31.0 

111.01 

-1.7 

-32-4 

South Korea 5 

(158) 

150.97 

-2.0 

+27.8 

15827 

-3.0 

+26.1 

PHippines 

(19) 

322.38 


S3 

392.46 

+33 

-113 

Taiwan, China 1 

(90) 

156.99 

+3.9 

+16.1 

15339 

+3.4 

+143 

India* 

(76) 

133.89 

-1.8 

+14.9 

149.20 

-13 

+153 

Indonesia* 

07) 

109.52 

-1.1 

-12.2 

12921 

-12 

-92 

Malaysia 

(104) 

307.38 

-13 

-93 

289.68 

-13 

-143 

Pakistan* 

(15) 

41538 

-1.7 

+72 

578.43 

-1.7 

+93 

Srt Lanka" 

(5) 

196.75 

+2-0 

+11.0 

208.88 

+1.5 

+9-4 

Thailand 

(55) 

450.47 

+23 

-5.7 

44537 

+13 

-73 

Eura/MM East 

(125) 

115.48 

-4.0 

-31.8 




Greece 

(25) 

224.87 

-03 

-13 

350.19 

-13 

-as 

Hungary" 

(5) 

183.72 

+2.9 

+103 

23325 

+1.7 

+153 

Jordan 

(13) 

153.80 

+0.4 

-7.1 

22435 

-03 

-a4 

Poland" 

(12) 

575.40 

+0-7 

-29.6 

828-52 

-02 

-25-0 

Portugal 

(25) 

128.37 

+-2.8 

+12.8 

135.00 

+03 

-23 

Turkey" 

(-W) 

108.13 

-10.3 

-49.1 

1.80935 

-8.6 

+24.4 

Zimbabwe 3 * 

(5) 

267.95 

+1.7 

+32.6 

328.14 

+1.7 

+53.6 

Composite 

(890) 

361.30 

-23 

+13 





Moot are c alaGttod at onrf - wea fc . and maty ctvngaa in pan» « ao u re ow am a nf from the prm*JUi Friday. 8m* dot* Oao tsea-ioo career Mn noted 
wh toftm-WW I 1991.- PJObc 3t I93Z (3Ujn 5 J9« WtecJ/ >995 ISUtn 3 I3B2; (BfJari 4 1981; (V+oe 6 1992: f9Sfrp 23 I860! (Sty f 1891: (10) 
Ooc 31 1995 fttJOoc 31 1985 (>30»: 31 1993 OJlflug 4 2 1900. 


In common with the Asian region in general the Philippine equity market has seen a 
rollercoaster year’s trading so far, although in recent weeks it seems to have regained 
some composure, writes John Pitt. After a gain of 150 per cent in 1993 the stock market 
index fell sharply in the early months of the year on a combination of profit-taking and 
alarm over the rise in US interest rates. Daring the summer a number of IPOs drained 
some $1.7bn or liquidity, depressing investor sentiment further, but confidence has 
returned recently on the back of strong first half company earnings and good economic 
prospects. 

Kim Eng Securities is optimistic on the future direction of equities in Manila and 
expects corporate earnings to grow by 53.3 per cent and 34.5 per cent in 1994 and 1995 
respectively. The broker forecasts a year-end index level of 3,600, compared to yester- 
day’s close of 3,068. 

• The IFC has launched three new tradeable indices, the IFC100, Asia50 and LatinSO, 
which comprise the largest and most actively traded stocks in the world’s emerging 
markets. The indices, calculated daily in dollar terms, are, says the IFC, “designed to be 
reliable indicators of day-to-day stock price movement in the overall asset class and in 
two of the major geographic regions”. 

The market capitalisation of the IFC 100 was $222.4bn at the end of September, 
compared to a market capitalisation of $501.9bn for the IFC investable composite. 


FT-ACTUAHIES WORLD INDICES 


EUROPE # j 

Decline in premium on UBS registered 


$17- to $63%. In pharmaceuti- 
cals, McKesson surged $5% to 
$105% alter Eli Lilly extended 
the waiting period for its ten- 
der offer for the company's 
shares until November 3. Lilly 
dropped $1 to $59%. 


Toronto stocks turned sour at 
midday after opening stronger 
on technical grounds. The TSE 
300 composite index eased L37 
to 4^24L40 in volume of 1795m 
shares valued at ,C$337m. 

Bight of the market’s 14 sub- 
indices fell, led by precious 
metals which dipped 66.06 to 
10,396.49. Among the winners 
the base metals group backed 
off from earlier highs, trading 
31.60 higher at 4,191.44 after 
4,210.49 with Inco up C$% at 
C$40% in busy trade. 

Other active stocks included 
Royal Bank of Canada, fiat at 
C$27% with lm shares traded, 
and Noranda Forest, up C$% at 
C$11 1 /, in 905,365 shares. 


Shares in Sao Paulo were up 
1.8 per cent in moderate mid- 
session trading as investors 
continued to look for bargains 
after the market’s recent £alL 
The Bovespa index of the 55 
most-active shares was up 845 
at 46,279 by 1 pm. Turnover 
was R$1833m (5214.4m). 

hi spite of the rally, brokers 
said that trading was still aim- 
less. 


The lack of sustained recovery 
in the dollar, treasuries and 
the Dow weighed inevitably on 
domestic bond markets and on 
bourses yesterday. Early 
rebounds in European equities 
were cut back hard, disap- 
peared altogether or turned 
into further losses, unites Our 
Markets Staff. 

ZURICH took a pragmatic, 
and painful look at the dollar 
and a weaker Wall Street, and 
dropped the SMI index by 175 
to 2,477.2. Sandoz registered 
fell SFrlO to a new 1994 low 
SFr612 after its news of a 3 per 
cent rise in nine-month sales, 
ammonal gain emphasising the 
way that dollar depreciation 
has hit Into European growth 
rates this year. 

At the same time UBS regis- 
tered fell SFrl3, or 4.4 per cent 
to SFr282 with the bearers 
down only SFrS at SFrl,230. 
thus reducing the premium on 
the registered from 19.4 to 14.6 
per cent; professionals said 
that this reflected the increas- 
ing prospect of the UBS board, 
which wants to create a single 
Hass of registered share, win- 
ning its power struggle with 
Mr Martin Elmer's BK Vision. 

FRANKFURT offered a 
futures-led, technical rebound 
on the session, the Dax index 
rising 45.87. or 23 per cent to 
2,020.50- About half of the 
recovery reflected post-bourse 
gains on Tuesday. 


FT-SE Actuaries Share indices 


Oct 26 THE EUROPEAN SSVES 

Hourly aanga Open 7030 1130 1230 13.00 14.00 1530 Qua 

R-SE IO0 13K30 130431 1303.35 1 304.10 1305.18 130232 1300-71 

FT-SE EjflBWtt an 136332 136836 1384J2 136232 1363.73 1384,74 13845? 1353.10 

OB 25 0B 24 Oct 31 0ct 20 Oct 18 


Ob 25 oaz< octal ob 20 octts 

FT-SE EumtOde IOO 1296.00 131232 130475 13242! 132221 

FT-SE Esratia* 200 138647 137238 136134 1381.88 1379.60 

Baa 1000 MTOWt HO - t3«2S Ml - I3SU3 larity 100 ■ 1300.71 200 - I3SB.10 f AM 


By the end of the afternoon, 
however, the mood was 
looking much less ebullient, 
with the Ibis-indicated Dax up 
13.60 at 2.009-45. The December 
Dax future moved from 2,030.0. 
up 13.5 at the session's close to 
Z0175, up a solitary point at 
the gnd of the day. 

Turnover eased from DM7bn 
to DM5 .5b el The share of the 
day was Mannesmann. up 
DM11 at DM28550 with a major 
foreign order reported after a 
period of weakness. 

Mr Michael Geiger at Nat- 
West Securities in London said 
that NatWest had estimated an 
earnings rise for Mannesmann 
from DM28.10 in 1995 to 
DM4460 in 1998, by which time 
more than half of group profits 
should come from the mobile 
telephone side of tee business. 

PARIS stayed in positive ter- 
ritory. the CAC-40 index finish- 
ing 7.12 higher at 1.S3L54 after 
a fall from a session high of 
L852. Turnover remained mod- 
est at FFr3bn. 


Accor was lifted FFr38 to 
FFr545 following an analysts 
meeting, and in spite of report- 
ing first half figures earlier in 
the week which were at the 
lower end of expectations. 

Paribas Capital Markets com- 
mented that it had provision- 
ally cut its forecasts for the 
hotel group, and thought it 
likely that the dividend would 
be cut in 1994 and 1995. How- 
ever, the broker concluded that 
ft was mildly positive on the 
stock, thinking that most of 
the bad news was now in the 
share price although it warned 
that a big rights issue was 
likely in the near future. 

The group said that it 
Intended to make divestments 
totalling FFr25 bn by the end 
of 1995, and to cut long term 
debt to FFr22.4bn by tee end of 
this year and to- FFr215bn by 
the end of 1995. 

AMSTERDAM wavered 
before the AEX index put on a 
marginal 0.95 to 399.15, after a 
high of 401.63. 


James Capel observed that 
Amsterdam had been one of 
the best European equity mar- 
kets in the third quarter, 
helped by better than expected 
half year results and optimistic 
management statements. But, 
the broker warned, following 
“a very strong period of pro- 
longed out performance within 

Europe, the equity market 
could gradually become the 
victim of profit-taking and 
asset reallocation by interna- 
tional investors". 

Foreign investors, particu- 
larly from the US and UK. 
turned sellers of the market 
during the second and third 
quarters. Capel concluded that 
while a rally was to be expec- 
ted in the short-term following 
the good batch of company 
reports, a pause in activity was 
likely in the first quarter of 
1995. 

Nedlloyd saw more bargain 
hunting following falls last 
week, up a further FI 3.00 or 6 
per cent to FI 5230. DSM rose 
FI 1.90 to FI 146.80. ahead of 
next week's third quarter 
results. 

MILAN fell back slightly in a 
dull session. The Comit index 
drifted down 337 at 610.41. 

Trading in Flat and Generali 
accounted for about 30 per cent 
of the day’s total turnover of 
LSOObn. with the former rising 
L5 to L5.995. and the insurer 
losing L413 to L36.700. 


Olivetti shed W2 to Ll.752; 
Goldman Sachs considered the 
stock fairly valued m the 
L1.S0Q to L8.1W range, said 
that it was maintaining its 

"market performer" rating on 
the stock and remarked that 
the prospects of a rights Issue 
were Ukely to put a constraint 
on long term performance. 


MADRID registered yet 
another low for the year, the 
general index falling 0.65 to 
288.65 in turnover of PtaSftm, 


There were winners, on the 
margin- Santander, in banks, 
and Endesa in utilities pro- 
duced nine month figures and 
rose Pta-15 to PtaS.010 and 
Pta20 to Pta5520 respectively. 
Santander on profits up 5.6 per 
cent excluding the Banesto 
acquisition and Endesa on a 
13.5 per cent gain at net level. 


WARSAW continued to 
mourn the imposition of a 0.3 
per cent transaction tax. and 
the Wig index fell for the 
fourth time in succession, by 
237.4 or 2Jj per cent to 8,259.7. 


Turnover dropped 17 per 
cent to 579bn zlotys. The steel 
trader, Stalexpovt. fell on its 
initial listing to 335,000 zlotys 
cum dividend from an issue 
price of 340,000. 


Written and edited by Wlfflam 
Cochrane and John Pitt 


ASIA PACIFIC 


Shanghai A shares decline by 8.1 per cent 


Tokyo 


Share prices finished slightly 
higher in subdued trading 
ahead of Japan Tobacco's list- 
ing today, writes Emiko Tera- 
zono m Tokyo. 

The Nikkei 225 index added 
1420 to 19,746.35 after a high of 
19,770.75 and a low of 19,70534 
Dealers, who had closed their 
positions for this month on 
Tuesday, remained inactive on 
the last day of trading for Octo- 
ber settlements. 

Volume remained flat at 
218m shares. Only some short 
term speculators were actively 
picking up small capital issues. 
Overseas investors remained 
inactive due to tee continued 
strength of the yen. 

The Topix index of all first 
section stocks fell 1.46 to 
1,566.94 and the N ikke i 300 
edged down 0.22 to 286.60. Los- 
ers led gainers by 509 to 426 
with 222 issues remaining 
unchanged. 

In London, the ISE/Nikkei 50 
index rose 0.68 to 1290.03. 

Strong interim earnings 
results from companies made 
no difference to their share 
price performance. Smith New 
Court Japan reported that 
equities had already dis- 
counted the fiscal year 1994 
results, adding teat this had 
been confirmed by the lack of 
response to upward profit revi- 
sions in September. The broker 
expected the Nikkei to rise to 
between 21,500 to 22,000 by the 
end of the calendar year. 

Nippon Telegraph and Tele- 
phone rose Y4000 to Y886.000 
on reports that a large number 
of employees had applied for 
the the company's early retire- 
ment scheme. 

Japan Telecom, which listed 
last month and is regarded as 
an indicator of investor confi- 
dence towards Japan Tobacco, 
fell to an intraday low of 
Y3.72m before closing 
unchanged at Y3.75m. 

Nippon Television Network 
jumped Y800 to Y24.200 on 
reports of a sharp increase tn 
profits doe to a recovery in 


Domestic institutional inves- 
tors sold Mitsubishi Oil, which 
fell Y10 to Yl.060. Ashimori 
Industry, an maker of air-bags 


JOnUy compiled by The Financial Times Ltd.. Goldman. Sachs & Co. ora NatWest Securities Uct m conjunction with the Institute of Actuaries and the Featfty of Actuaries 
NATIONAL AMD 

REGIONAL MARKETS - TUESOAV OCTOBER 25 1994 MONDAY OCTOBER 24 1994 DOLLAR NDEX- 


REGIONAL MARKETS 
Ftgves in parentheses 
show number of htes 
of stock 


■ DOLLAR N3EX- 
Ye 


AustnAa (68) 170.41 


Carada (103) 

135.79 





Germany ifrSj 

Hong Kong (SB) 

Ireland (14) 

nary (59) . 

Japan (466) 

Malaysia (97) _ 

140.86 

-37531 

305.68 

76.79 

16228 

— .545.78 


New Zealand (14) 

73.92 


306.44 

Singapore (44) ..... 

398.91 

Sctsh Africa (59)— 338.48 

Span (38) 139.83 


-241.05 

Switzerland (471 

184.47 


USA (515) ... 18833 

EUROPE (707)__ 

171 31 

NortSc (116) 

Paste Basin (747) 

23332 

1H. 38 

Euro-Pacific (1454) 

...—..17123 


..185.06 

Europe Ex. UK (503). „ 

152.44 


Change 

% 

Sterling 

Index 

Yon 

Index 

DM 

Index 

Currency 

Index 

96 chg 
on day 

OHr. 

Yield 

Dollar 

Index 

Staring 

Index 

Yen 

index 

DM Cumncy 82 week 52 week 
Msx Index Hfaft Low 

ago 

(approx) 

-0.8 

15437 

104.34 

132. IB 

15090 

-0.7 

300 

171.71 

15639 

10532 

133.54 

155.05 

168.15 

14638 

15439 

-as 

163.63 

110.53 

140.02 

14008 

-12 

1.15 

182 25 

18398 

11139 

14134 

141.79 

lean 

167.46 

17636 

-i.i 

15289 

103.32 

130.89 

127.93 

-1.4 

432 

170.66 

155.43 

10437 

13232 

129.75 

177.04 

14033 

15039 

-02 

123.00 

83.14 

10533 

132.66 

-0.6 

235 

13833 

12407 

80.71 

106.02 

13338 

14531 

12a 54 

13130 

-12 

231.88 

156.59 

196.30 

202.66 

-1.6 

1.46 

25a BO 

335.70 

15934 

201X2 

20635 

275.79 

23027 

23834 

-1.7 

178.46 

120.62 

162.81 

187.56 

-22 

0.76 

200.40 

18231 

123.15 

186.95 

19136 

200.40 

11085 

12S3S 

-06 

150.62 

101.73 

13839 

133.17 

-1.0 

3.26 

167.18 

15228 

102.73 

130.11 

134.53 

18537 

15934 

17135 

-1.9 

127.60 

86.24 

10920 

109.26 

-22 

138 

143.60 

130.78 

8834 

111.78 

111.78 

160.40 

12037 

13432 

-1.1 

340.53 

230.16 

291.59 

372.94 

-1.1 

333 

380.03 

346.11 

23333 

285.77 

37732 

61X36 

34139 

349.78 

-03 

186.32 

125.93 

159.54 

17031 

-1.5 

333 

20730 

188.58 

12731 

161.49 

182.03 

216.60 

171.68 

17230 

-2.4 

6966 

47.02 

59.56 

87.80 

-23 

1.79 

78.66 

7134 

4834 

61.22 

8932 

97.78 

57.88 

70.87 

-0.1 

147.09 

9942 

12S.95 

99.42 

-0.4 

0.77 

162.46 

147.96 

9933 

128.44 

99.83 

170.10 

12434 

15431 

-0.4 

494.40 

334.16 

423.36 

535.69 

-0.6 

137 

54731 

+8693 

338.64 

426.36 

53K 70 

621.63 

43071 

46032 


-2.1 1971.68 1332.65 1 68132 8157.87 

-0.4 196.42 13209 167.34 164.80 

0.0 66.96 4536 57.34 64.08 

-0.8 187.00 126.39 160.13 (61.85 


722323 2024.86 136623 173032 830725 3647.06 169828 186X50 


359.66 243.02 307.88 


30669 20723 262.53 29221 

126.67 6X61 108.46 131.91 


216.36 14759 
146.99 100.70 


iaa.se 251.81 

127.58 12695 


141.44 128.62 
241.37 219.63 


154.98 16099 
140.08 188.33 


155.19 104.S9 

21045 14224 


15526 10L34 
155.11 104 84 


13224 110.10 
132.82 12464 


Pacific Ex. Japan (279) 259.46 

World Ex. US (1634J 17322 

World Ex UK (1945) 175.02 

World Ex. So, A/. (2090) 176-16 

World Ex Japan {1681) 16720 


113.31 143.55 184.40 

3323 11824 125.82 

158.87 20128 230.57 
108.06 13428 128.45 

107.16 135.75 143.40 


17224 156.88 

18428 16636 


The World Index (2149) 17720 


168.58 11-1. 62 
160-52 106.50 


107.85 136.64 
114.62 14521 


171.12 


133.13 

16831 

165.92 

219.75 

187.01 

19439 

45.44 

57.55 

8408 

7739 

5022 

6538 

127.82 

16136 

16334 

211.74 

16532 

18038 

24530 

31035 

27030 

399.01 

294.86 

327.48 

208.66 

284.26 

295.01 

342.00 

202.72 

21432 

8632 

110.08 

133.78 

155.79 

mss 

144.41 

14033 

187.86 

25344 

24137 

17533 

201.95 

102.19 

129.43 

128.52 

170.56 

143.64 

145.90 

123.30 

156.16 

182.73 

21436 

181.11 

19137 

1 15.59 

146.40 

mil 

19604 

17836 

18920 

106.21 

13432 

14733 

17838 

154.79 

16235 

143.74 

182.05 

21037 

23331 

173.19 

19137 

105.49 

133.61 

110.63 

17836 

134 79 

16136 

105.72 

13339 

125.67 

175.14 

14388 

161.79 

11331 

14339 

18432 

192.73 

17537 

18530 

94.77 

12003 

12730 

168.12 

13534 

14323 

18034 

203.45 

232.41 

29821 

23033 

23023 

106.96 

136.46 

129.52 

178.65 

145.58 

162.40 

107.83 

13636 

14435 

i?a 58 

15536 

16822 

10835 

137.47 

14630 

18003 

15834 

170.12 

115.48 

14023 

17535 

195.20 

17634 

18064 

109.19 

13029 

147.00 

18030 

168.85 

17022 


Copyright. The Ftamul Tom Unfed. Ortftrm Sachs and Ca mu NtnWwt Securities Umted. 1987 
Latest prices uiswSaeto far ma erfbon 


for motor vehicles, rose Y16 to 
YG70 amid speculation that a 
large car manufacturer was 
buying its stock. 

Sega Enterprises rose Y70 to 
Y4.900, recovering earlier 
losses prompted by concerns 
over intensifying competition 
in the video game market 

In Osaka, the OSE average 
fell 65.46 to 21,952.09 in volume 
of 38.6m shares. Aoyama Trad- 
ing fell Y150 to Y2.890 and Shi- 
mano, the bicycle parts maker, 
declined Y100 to Y1.820 on 
fears of lower profits due to the 
higher yen. 


Roundup 


Shanghai's domestic equity 
market performed more acro- 
batics yesterday, but for inter- 


national investors the Pacific 
Basin was unusually subdued, 
lifted in places by demand for 
telecommunications majors. 

BONG KONG had the slow- 
est trading session since early 
July. Turnover dropped from 
HK£L37bn to a preliminary 
HK$1.96bn. the Hang Seng 
index gained 5.94 at 9,252.44 
but declines beat advances by 
250 to 180. A good reception to 
a flat sale by its property unit 
helped lift Swire Pacific A 75 
cents to HKSS5.50. 

SHANGHAI A shares ended 
8.1 per cent lower after a disap- 
pointing dividend from Shang- 
hai Lujiazui Finance and Trade 
Zone Development, regarded as 
the market’s most solid 
blue-chip. The index shed 62J24 
to 702.77 in heavy turnover of 


Yn2.91bn. Lqjiazui was the 
day’s heaviest loser, falling 
Yn3.60, or 13.1 per cent, to 
Yn23J0 in volume of 7.21m 
shares. 

SYDNEY'S All Ordinaries 
index foil 43 to 2,017.6 In spite 
of better than expected third 
quarter consumer price data. 
QBE, the insurance company, 
rose 9 cents to AS4.72 after it 
reported a strong rise in first 
quarter premiums. 

SINGAPORE The Straits 
Times Industrial index closed 
down 5.25 points at 2.357.29, 
with Malaysian OTC stocks 
and domestic property-related 
shares both in gentle retreat 
TAIPEI closed lower for the 
third straight day on foils in 
the food sector, the weighted 
index losing 56.52 at 6,68537. 


COLOMBO stabilised after 
Tuesday's sharp fall on the 
assassination of an opposition, 
leader, the all share index eas- 
ing a further 3.12 to 1078.15. 

KUALA LUMPUR ended 
mostly lower but institutional 
buying in the utility. Telekom 
Malaysia, helped push the 
KLSRE composite index up 
3.31 to 1,105.54. Telekom 
jumped 60 cents to MS20.S0. 

BANGKOK rebounded to 
close at the day's high, helped 
by technical factors and firmer 
sentiment in Bong Kong and 
Japan. The SET index closed 
12.49 higher at 1,514.07 in mod- 
erate turnover of Bt6.75bn. 
WELLINGTON recovered ear- 
lier losses to close with the 
NZSE-40 index 7.69 higher at 
2,069.33. 


Advertisement 


Spain - Economic Outlook 

The Central Hispano report on the Spanish economy 


1995 BUDGET: 

CONSOLIDATING PROGRESS 


Spain's 199S budget aims to continue the progress 
made this year in reducing the general government deficit, 
the most serious obstacle to meeting the Maastricht 
conditions for European Monetary Union membership. 
The deficit target is 5.9% of GDP, compared with an 
estimated 6.7% this year and an all-time record of 73% in 
1993. The target is part of the government's revised 
Convergence Programme of meeting the 3% maximum 
limit by 1997. 

The cut is small but positive because it will be 
achieved not only through the economy's upturn - which 
will boost tax receipts - but also by reducing the structural 
deficit by 0.6 percentage points of GDP, according to the 
Economy Ministry. The government needs to get to grips 
with the structural deficit if the overall deficit is to be 
substantially and permanently reduced in the future. The 
primary deficit - which excludes public debt interest 
payments - is officially forecast to foil to 0.4% of GDP 
from 0.6% this year. 

However, a greater effort could be made to move 
more quickly towards the 3% Maastricht requirement 
which the government had originally intended to meet by 
L99S. And the brunt of the reduction in the structural 
deficit is coming from lower productive investment and 
higher taxes, rather than reduced current spending. 

No substantial overshoots in this year's expenditure 
items, more realistic macroeconomic forecasts and tighter 
budgetary planning for revenue and spending have 
boosted the credibility of the 1995 budget. The state's 


spending this year is forecast to be only 1.1% higher than 
the initial target, compared with a 12% overshoot in 1993. 

indeed, some of the estimates for 1995 may be on the 
conservative side. For example, the economy could grow 
more strongly than the government's estimate of 2.8% 
Banco Central Hispano believes GDP growth will be 
closer to 3.3% because of a greater pick-up in domestic 
demand, both the consumption and investment 
components. If economic expansion is stronger the 
government could still meet its target even if spending is 
slightly higher than envisaged. 

Revenue is forecast to increase 7.2% over the 1994 
outturn. Hie most important change on the income side is 
the one point reduction in Social Security contributions 
(0.8 points for employers and 03. for workers). The loss 
of revenue will be offset by a one point increase in VAT 
rates and higher fuel, alcohol and tobacco taxes. This 
measure could cause headline inflation to accelerate in the 
first months of 1995 - by between 0.7 and a full point - 
but it has been well received by the business community, 
as it lowers labour costs and helps to stimulate 
investment U will also help to spur employment, although 
the stated jobless rate will only come down marginally to 
23.2% of the labour force. Revenue from privatisations is 
forecast at Pta. 300bn. 



On the spending side, the government has also been 
more realistic. Total expenditure is expected to increase 
3.8% over the 1994 outturn. Excluding the state's greater 
transfers to cover the loss of Social Security revenue, 
growth in spending is 2.6%. In both cases growth is lower 
than the increase in nominal GDP - which would be more 
than 8% - and this will begin to reverse the upward trend 
of public spending in GDP terms. 


While spending growth will be more moderate, 
investment in infrastructure will continue to increase 
(7.7%). Welfare expenditure is set to rise 5.7% and will 
account for 51.8% of total spending, up from SO. 7% in 
1994. The launch of a new financing system for health - 
whose surge in expenditure in recent years has been a 
major factor behind spending overshoots - will begin to 
tackle this problem. 


Although the general government deficit will decline, 
the reduction will not be large enough to prevent public 
debt from continuing to grow in GDP terms. Debt could 
reach close to 66% of GDP, up from 62.7% this year and 
higher than the Maastricht maximum limit of 60%. 


Consolidated assets of US S9lbn 
Brandies in 27 countries 
Eight mill ion clients 


Central Hispano 


Head Office: 

Plaza dc Canalcjau, I 
28014 Madrid 
tel: 558 mi 


Outlook is prepared by Banco Central Hispano' s Research Department. 
Subscriptions can be obtained by sending a fox to Madrid 622 77 70. 


, v k*- '" f * 

1 S 





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