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KingHassaHH 

'Peace must have 
a content* ’ 

MmiHr f PagBi» 



OsSnqrSaeflor 

1 Shining bright in a 
blighted industry ; 



Portugal 


Europe's tiger or 
still a pussycat? 

Smef, Pages 11-14 



TT^ ARROW’S 

Weekend FT 

\The; history of . 
sleaze’ 



O';:-.' 


FINANCIAL TIMES 


Europe's Business Newsoaoer 


FRIDAY OCTOBER 2 S 1 994 





UAL seeks equity 
stake in Chinese 
domestic airline 

UAL, parent of United Airlines of the US, said it 
was interested in fetfrmg an equity position in China 
Southern, the country’s leading carrier. 

But UAL stopped short Of r-cm firming - tha t it had 
already held talks with the Chinese airitow an 
acquiring a stake. China Southern, based in Guang- 
zhou province, is one of two airlines Beijin g has 
selected to be among 22 enterprises traded on over- 
seas stock markets. British Airways is also believed 
to be interested in acquiring a stake in the carrier. 
Page 21 

Proct er & Gamble sues Bankers Trust: US 

consumer products group Procter & Gamble ffWL a 
lawsuit against Bankers Trust seeking damages of 
more than 1130m over losses stemming from a 
derivative contract Page 21 

Brazil may use troops to curb drug dealing 

Brazil may send troops 
into Rio de Janeiro’s 
shanty towns to combat 
the city’s drug traffickers 
amid widespread concern 
that the police there 
have lost control and are 
heavily involved in cor- 
ruption. Fernando Hen- 
rique Cardoso (left), who 
takes over as president 
on January L he 
favoured military inter- 
vention in Rio, which he described as being in a 
state of “undeclared civil war”. Page 20 

W co n f irms chemicals racc w r y i imperial 
Chemical Industries of the UK provided confirma- 
tion that the chemicals industry is on the upswing 
with thintquarter pre-tax profits up 59 per cent to 
£143m ($226m) after exceptional items. Page 21; Lex, 
Page 20 

Samsung pirns consolfdaitlon: Samsung , 
South Korea’s biggest conglomerate, is to consoli- 
date its operations by cutting the numbered its sub- 
sidiaries to 24 from SO through mergers and dispos- 
als. Page 26 

Shares In Japan Tobacco tall sharply: 

Japan's ministry of finance, sharply criticised over 
the partial privatisation of Japan Tobacco, ran into 
further embarrassment as the stock fell sharply on 
its first day of trading in Tokyo. Page 26 

Estonia picks Qresn prime minister The 

Estonian parliament backed environment minister 
Andres Tarand as prime minister. Mir Tarand, a 
leader of Estonia's Green movement, will take over 
from Mart Laar, who lost a confidence vote. Page 3 

Sweden noses Interest rates Sweden's central 
bank, the Riksbank, moved to counter inflationary 
pressures by raising its key short-term interest rate, 
the repurchase rate, by 20 basis points to 7.4 per 
cent. Page 3 

Allied Signal ahead after retrenchment 

Allied Signal, diversified US manufacturer which 
has gone through a lengthy period of retrenchment, 
reported record third quarter ea rnin g s of 5189m, an 
increase of 15 per cent Page 25 

TLG capitalised at £204m: TLG, holding 
company for Thorn Lighting Group, will be capital- 
ised at £204 .8m ($323-6m) when it comes to the UK 
market next week. Page 30 

Zimbabwe may expel (Mam workers: 

Oxfam workers face possible expulsion from Zim- 
babwe after an angry government response to a 
report by the British charity critidsmg the coun- 
try’s health policy. Page 4 

Record quarter tar Canadian airline: 

Canadian Airlines International, Calgary-based air- 
line which was on the brink of c ollaps e before a 
financial restructuring, reported record quarterly 
earnings of C$85.4m, up from C£&5m a year ear- 
lier. Page 24 

Axa profits beat trend: French insurance group 
Axa bucked the trend in the sector by reporting 
group interim net profits up 26 per cent to FFrL5bn 
($293m). Page 20 

IHInor Sacitor back In profit: Usinor SacOor, 
French state-owned steel producer, reported first- 
half net profits of FFr471m (889.03m) after losses of 
FFrS.7bn in 1993. Page 21 

Three Graces to stay In Britain: Antonin 
Canova’s The Three Graces will stay in the OK 
after the Court of Appeal in London rejected a chal- 
lenge by the Getty Museum of California, which 
paid £ 7 . 6 m ($ 12 m) for the statue, against a govern- 
ment decision to delay the granting of an export 
licence. The move allowed UK galleries time to 
raise a similar amount for the work. 


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Bologna bank set to fight $1.3bn Credito Italiano bid 


By Robert Graham In Rome 

Credito Romagnolo, the 
Bologna-based bank, is today 
expected to reject a L2,000bn 
($l.3bn) offer for 482 per cent of 
its shares by the recently priva- 
tised Credito Italiano. 

The takeover would create the 
largest privately-owned banking 
institution in Italy with deposits 
of over L65,000bn. Credito Itali- 
ano Is Italy's fifth largest bank 
and Credito Romagnolo the 15th. 

The offer, made late on 


Wednesday, is also the biggest 
made for a quoted company 
under takeover rules introduced 
two years ago. 

A special board meeting has 
been called today by Credito 
Romagnolo at which it will take 
a formal position on Credito Itah- 
ano’s proposal. Romagnolo man- 
agement, which is controlled by 
shareholders dominated by Ur 
Carlo De Benedetti, the Olivetti 
chairman has refused to make a 
formal comment on the o ffer . 

Ur Locio Rondelh, Credito Ital- 


iano’s pbaifinari , was quoted yes- 
terday as saying: “I don’t regard 
the offer as hostile. Indeed we 
think we can maximise the syn- 
ergies with a bank that is com- 
plementary to ours." 

However, a banker famil iar 
with Credito Romagnolo’s posi- 
tion said “Credito says the offer 
is friendly; but when the Soviet 
tanks went into Prague they also 
said they were friendly." 

Hie offer is for 105.5m shares, 
valuing tham at 1*19,000 against 
1*13,674 on Wednesday. Mr Ron- 


delli says the offer will cost 
12J)l0bn. 

Credito Romagnolo shares have 
risen sharply in recent weeks, 
rising more. than 20 per cent 
since mid-September. Credito 
Italiano admits to having been 
one of the buyers and already 
possesses 15 per cent of Romag- 
nolo stock. 

Credito Romagnolo’s statutes 
forbid any shareholder from pos- 
sessing more than 10 per cent of 
the hank ’s stock, in order to pre- 
serve a wide share-ownership 


base and retain a strong regional 
identity, rooted in the rich farm- 
lands of Emilia Romagna and the 
area’s thousands of dynamic 
small businesses. 

It is this strong regional iden- 
tity which is likely to become the 
main stumbling block to the 
takeover bid. Credito Italiano 
says the statutes on the size 
of shareholdings must be 
changed by February 28 nest 

Continued on Page 20 
Lex. Page 20 


Italian bank bM 

Shore (vices rebased 

140 — - 

Cnxfflo R 

120 



100 


Aug 1804 
Source: FT Qraordta 


Oct 


Chernomyrdin pledges tough monetary policy in 1 995 


Russian PM 
survives 
vote of no 
confidence 


By John Lloyd in Moscow 

The Russian government 
survived a vote of no confidence 
in parliamen t last night as Mr 
Victor Chernomyrdin, the prime 
minister, pledged to toughen eco- 
nomic policy next year to achieve 
the elusive goal of stabilisation. 

The country alsn survived the 
first part of a 24-hour strike 
called by the official trade unions 
with little apparent inconve- 
nience, and relatively small dem- 
onstrations in the main cities. 

However, the no confidence 
vote - 194 for, just 32 short of the 
majority needed - was closer 
than expected, and only 54 depu- 
ties voted against it The rest reg- 
istered abstentions or did not 
vote at afl. 

At the same time. President 
Boris Yeltsin named the conser- 
vative Mr Alexander Nazarchuk, 
a leading member of the pro-com- 
munist agrarian faction, as the 
agriculture minister. 

The nomination and its likely 
effect on the vital, but largely 
unreconstructed, agricultural 
sector contrasted starkly with 
the prime minister's reformist 
speech as he presented his tough 
1995 draft budget to parliament 
It appeared to point again to a 
widening split between Mr Yelt- 
gfn ftixi Mr Chernomyrdin. 

Mr Nikolai Travkm, the leader 
of the Democratic party and a 
minister without portfolio, said 
last night that “if before this 
nomination we couldn't move 
reforms through the (farm] lobby. 


then after it they will be entirely 
stuck”. 

However Mr Chernomyrdin, in 
a confident and vigorous perfor- 
mance before the Duma, made 
clear that the rally strategy he 
could see was to tighten mone- 
tary policy, squeeze inflation fur- 
ther and refuse further credits 
from the Central Bank. 

The budget commended by 
Chernomyrdin Is . exceptic 
severe, requiring real cuts in 
almost every sphere of the econ- 
omy and making a fan in produc- 
tion and fall in GNP inevitable. 

However, Mr Chernomyrdin 
said that only such a budget 
would “close the doors on the 
swamp of depression” and allow 
real growth. 

The leaders of the reformist 
parties were at best lukewarm in 
their support - though Mr Grig- 
ory Yavlinsky of the Yabloko 
group and Mr Yegor Gaidar of 
Russia’s Choice both made dear 
that their opposition was more to 
the president than to Mr Cherno- 
myrdin. 

Mr Yavlinsky, is a declared 
presidential candidate in the elec- 
tions called for next year - and 
Mr Gaidar, angered by the nomi- 
nation of Mr Nazarchuk as agri- 
culture minister, appeared to be 
on the verge of reversing his par- 
ty's vote foT the government. 

While the unions’ grievances 
about the backlog of wages owing 
to mffiVnna of workers are real 
and urgent, neither the old offi- 
cial unions nor the new indepen- 
dent ones have managed to gal- 



Rwphfltic Russian prime minister Victor Chernomyrdin mnfcec a 
point during Us confident speech to yesterday's meeting of the Duma 
at which his supporters defeated a vote of no confidence a p 


Forstmann pays 
$1.4bn for Ziff 
publishing group 


By Louise Kehoe In San 
Francisco 

Most of the assets of Ziff-Davis 
Publishing, a US leading pub- 
lisher of computer magazines, 
trade newspapers and books, are 
to be acquired by Forstmann lit- 
tle, a New York investment firm, 
far SL4bn in cash. 

The privately held publishing 
group is being sold by the Ziff 
family, which will retain a small 
equity interest. The three Ziff 
brothers, Dirk, Robot and Daniel 
have approximately a 90 per cent 
interest in the company. They 

annnnnrari plans tO Sell the busi- 
ness - built up their father Wil- 
liam - in June. 

The young men said their 
interests lie in investing, rather 
than publishing. Proceeds of the 
sale will go to Ziff Investments, 
an investment firm run by Dirk. 

The sale has attracted broad 
interest in the media industry 
because Ziff is on the leading 
edge of multimedia publishing, 
including computer on-line pub- 
lishing and CD-Rom titles and 
because computer publications 
are one of the strongest growth 
sectors in publishing. 

Other companies believed to 
have shown a serious interest in 
acquiring parts of Ziff include 
Anglo-Dutch publishing company 
Reed Elsevier, Japanese software 
distributor Softbank and German 
media company Bertelsmann AG. 
K-m Communications, McGraw 
Hill and Time Warner are also 
said to have considered mak in g a 
bid for Ziff. 

Forstmann will acquire Ziff’s 
business magazine group, which 


includes PC Magazine, its flag- 
ship magazine with a paid circu- 
lation of over one million copies. 

Also included in the deal is 
Ziff’s recently formed consumer 
m adia group, which hag launched 
two magazines for home com- 
puter users, the international 
media group, which publishes ll 
computer magazines, a market 
research group, and Ziff-Davis 
Interactive, which provides 
on-line information to thousands 
of users of services such as Com- 
puServe and Prodigy, and is 
about to launch its awn on-line 
service called Interchange Com- 
puting. 

Ziff's nearly $lbn in annual 
revenue and $l60m in operating 
profit come largely from its com- 
puter trade magazin es. 

Forstmann said it will Invest 
over 8900m of its own capital in 
Ziff-Davis. The investment “will 
facilitate the dynamic growth of 
this business as the PC revolu- 
tion continues to gather momen- 
tum," said Theodore Forstmann, 
senior partner. 

Ziff-Davis employs about 4,000 
people, most of them in the US. 
Employees yesterday expressed 
satisfaction with the sale because 
they expect Forstmann to take a 
hands-off approach. The invest- 
ment group said that it plans no 
changes in the management or 
operation of Ziff 

Not included in the transaction 
are Ziff-Davis' trade show busi- 
ness and Interchange Network 
and Information Access, a soft- 
ware group. These businesses 
will be sold by auction, with final 
bids due at the close of business 
yesterday. 


vanfae workers into action. The 
one exception, the miners, 
announced they would not take 
part in the protest because the 
government bad promised to 
meet their demands in an agree- 
ment estimated to cost abont 
Rbs4,000bn (Jl.lbnj. 

Radical reform, Page 2 


Israel attacks Clinton over 
outcome of talks with Assad 


By Julian Ozaime In Jerusalem 

US President Bill Clinton said 
yesterday he had made substan- 
tive progress in talks with Presi- 
dent Hafez al-Assad of Syria 
aimed at edging Israeli-Syrian 
peace forward. 

But Israeli foreign ministry 
officials described the dinton-As- 
sad meeting as a "great disap- 
pointment” and said Mr Clinton 
had boosted Mr Assad's prestige 
in the Middle East by his visit 
but had come away empty- 
handed. 

After four hours of talks with 
the Syrian president in Damas- 
cus, Mr Clinton said he had made 
progress hot said he was not free 
to dfoensa the details. 

The US president also cl a i m ed 
Mr Assad’s remarks yesterday - 
in which he pledged to seek ways 
to “hasten the march of peace” - 

went beyond anything he had 
said before. 

"Syria has made a strategic 
choice for peace with Israel. 
Syria is ready to commit itself to 


the requirements of peace far the 
long-term to transform the region 
from a state of war to a state of 
peace, and to allow Arab and 
Israeli to live in security, pros- 
perity and stability," Mr Clinton 
said in a speech to the Israeli 
parliament last night.. 

T believe something is chang - 
ing in Syria and its leaders 
understand that it is time to 
make peace, but there will be 
still a lot of hard bargaining 
before they are ready to sign a 
treaty ... we wifi walk with yon 
on tire road to Damascus for 
peace with security." 

Israeli officials, however, said 
Mr Assad had merely restated 
Syria's hardline position demand- 
ing a foil Israeli withdrawal from 
the occupied Golan H eight s ; had 
faded to spell out his vision of a 
“n or m a l peace”', and pad embar- 
rassed the US president by say- 
ing that no US official bad ever 
proved Syrian involvement in an 
act of international terror. 

“For us the visit would have 
been a success if Clinton had 


been able to broker direct talks 
between our foreign mnrigtor and 
the Syrian foreign minister,” said 
a senior Israeli foreign ministry 
official. “The least we expected 
was something firm abont terror- 
ism. 

Bat neither of these things hap- 
pened. It is a great disappoint- 
ment" 

Mr Cbntan. who has turned his 
Middle Eas t tOUT into a CTUSade 
against terrorism, said that in a 
private conversation Mr Assad 
had expressed his opposition to 
the killing of innocents. 

Diplomats said Mr Assad was 

happy that Mr Clinton had 
renewed US commitment to an 
Israeli withdrawal from all land 
occupied in the West Bank, Arab 
East Jerusalem, the Golan 
Heights and southern Lebanon. 

But the Israeli prime minister 
Mr Yitzhak Rabin warned: “The 
question of Jerusalem Is not open 
for negotiations. Jerusalem wQl 
be open for all those who believe 
in god, but will always be under 
the rule of the Jewish people.” 


CONTENTS 



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FINANCIAL TIMES FRIDA Y OCTOBER - S 1994 



NEWS: EUROPE 


BA presses for early admission to Orly 


By John Ridding in Paris 

The prospect of a fresh 
showdown over access to 
French air routes emerged yes- 
terday following the announce- 
ment by TAT European Air- 
lines, an affiliate of British 
Airways, that it would start 
services on two key routes 
before the end of December. 

The French government, 
which was ordered on Wednes- 
day to open the lucrative 
routes between Orly airport in 


Paris and Toulouse and 
between Orly and Marseilles, 
said that services could not 
start before January 1995. The 
routes are currently operated 
by Air Inter, the state-owned 
airline, which has a monopoly 
on many French domestic 
routes. 

The European Commission 
said that the two routes must 
be opened immediately follow- 
ing Wednesday's decision by 
the European Court of Justice 
to reject an appeal by the 


French government which was 
seeking to delay liberalisation 
of the routes. The French 
transport ministry accepted 
th e ruling, but said that the 
process of selecting carriers for 
the routes precluded the start 
of services before January. 

This argument was rejected 
by the Commission, which said 
that the French government 
could have begun the proce- 
dure of selecting carriers six 
months ago when it was origi- 
nally ordered to open the 


routes to competition. The 
French government appealed 
against the ruling, but the 
appeal was rejected by the 
European Court 
TAT, which is 49.5 per cent 
owned by British Airways and 
which filed the original suit 
demanding access to the 
routes, condemned the French 
government's attempt to delay 
services. It described the selec- 
tion process sought by the 
transport ministry as a 
“another stalling tactic" and 


threatened legal action against 
the French government unless 
its bid to operate the routes 
was approved within 24 hours. 

The latest clash follows the 
so-called ‘'battle of Orly” ear- 
lier this year in which TAT, 
British Airways and other UK 
carriers threatened to fly to 
Orly from London despite the 
refusal of the French govern- 
ment to grant landing permis- 
sion. As with the Orly-MarseQ- 
les and Orly-Toulouse routes, 
access to Orly from London 


had been ordered by the Euro- 
pean Commissi on. 

Other French airlines took a 
more conciliatory approach. 
Air Outre Mer, while critici- 
sing the delaying tactics of the 
French government, said it 
would start its planned ser- 
vices between Orly and Mar- 
seilles in January. Air Liberty 
cancelled its flights between 
Orly and Toulouse which were 
scheduled tor today and said it 
hoped to be selected to operate 
the route from January 2. 


Yeltsin was real target of 
no-confidence motion in duma 


Technically, yesterday's 
no-confidence vote in the Rus- 
sian parliament was aimed at 
the government of Prime Min- 
ister Victor Chernomyrdin. But 
it had a bigger target in its 
sights as well - President 
Boris Yeltsin. 

The government won the 
vote, but the relatively high 
figure of 194 deputies voting 
against the government - just 
32 short of a majority - shows 
that opposition to Mr Yeltsin 
has grown significantly. The 
impression is strengthened by 
the small number of deputies 
from normally supportive lib- 
eral parties - 54 - who voted 
against the no-confidence 
motion, with another 55 who 
cast an abstention (the remain- 
der simply did not vote). 

The opposition's hard core is 
the Communist Party of Rus- 
sia, led by Mr Gennady Zyuga- 
nov. The party, relatively disci- 
plined and normally able to 
count on the support of the 
Agrarian Party, has rejected 
any compromise with Mr Yelt- 
sin, refused to sign his (now 
somewhat tattered) Pact on 
Social Consensus and has said 
it will refuse to accept seats in 
the cabinet 

The other large anti-presi- 
dential group is the Liberal 


Democratic Party, led by Mr 
Vladimir Zhirinovsky - who 
yesterday confirmed his unerr- 
ing feel for the quotable 
remark when he warned minis- 
ters to resign when they could 
- or face arrest when he came 
to (presidential) power next 
year, to institute a dictator- 
ship. 

However, it lacks the disci- 
pline of the Communists and 


its members probably both 
abstained and as well as voted 
against the government 
The same is true of the 
Agrarians and the ramwninist . 
leaning Women of Russia 
Party - though Mr Yeltsin's 
naming yesterday of Alexander 
Nazar chuk, an Agrarian and 
chairman of the duma agricul- 
ture committee, as agriculture 
minister in place of Mr Victor 
Khlystun, may have swung a 
few votes the government's 


way. Mr Khlystun was no radi- 
cal - but he had angered the 
Agrarians and others on the 
left by going along with mod- 
est reform in the agricultural 
sector, and his successor is 
unlikely quickly to repeat the 
mistake. 

At the same time, however, 
the nomination showed on 
what a fine line Mr Yeltsin is 
now treading as he seeks to 


sway this way and that to 
retain his government On its 
announcement, Mr Yegor Gai- 
dar, lender of the mein liberal 
party. Russia’s Choice, com- 
mented sourly: It now makes 
it impossible to speak of any 
reform in the agricultural sec- 
tor at all” He threatened to 
change his party’s vote and 
oppose the government 
The Democratic Party, which 
had tried to keep to the shift- 
ing centre, is now split - with 


half of its 15 MPs rallying 
round Mr Sergei Glazyev, the 
young former trade minister 
whose pungent and informed 
attacks on the budget have put 
him at the bend of those in the 
Duma opposing the economic 
strategy. He knows from the 
inside die horse trading, heroic 
assumptions and guestimates 
which make up the Russian 
budget - and, with a burning 
conviction that a monetarist 
policy is destroying Russian 
industry, he has positioned 
himself to be high in the ranks 
of any opposition cabinet 
which might take over. 

But that will not be tomor- 
row. This opposition is com- 
posed of men and women 
whose inexperience of party 
politics, desire for Individual 
prominence and fear that they 
may have to take responsibil- 
ity for the economy was 
always likely to combine to 
undermine the no-confidence 
vote. 

Mr Zyuganov's bitter com- 
ment last night that “we did 
not get rid of the government 
because such a vote would 
require courage" had some 
truth - thoug h it is unclear 
how tor those who voted for 
the no confidence motion 
lacked courage, or folly. 


John Lloyd explains the political 
machinations behind yesterday’s 
vote on the future of the 
Chernomyrdin government 



Document reveals determination to try to create new economic climate 


Polish minister j 
quits in row 
over bank job i 


By Christopher Bobbiski 
In Warsaw 

Mr Andrzej Olechowski, 
Poland's foreign minister, 
resigned yesterday claiming 
his honesty had been ques- 
tioned by publication of a list 
of politicians’ directorships. 

Mr Olechowski, a former 
finance minister, said that Mr 
Wlodzimierz Gmoszewicz, the 
justice minister who bad pre- 
pared the list of senior govern- 
ment officials on the supervi- 
sory boards of state owned and 
private companies had “ques- 
tioned his honesty” by suggest- 
ing he had been improperly 
paid for a second job. Mr Ole- 
chowski had figured correctly 
on the list as the head of toe 
supervisory board of the state 
owned Bank Handiowy, one of 
the country's largest banks. 

By Polish law government 
officials are permitted to repre- 
sent the state on the boards of 
nationalised companies but are 
not allowed to accept pay from 
sources other than their post 
in the administration. The law 
has however remained a dead 
letter and contains no sanc- 
tions for transgressors. 

The list included 56 officials 
in such posts of whom a mere 
handful did the work for no 
extra pay. Mr Olechowski was 
stated to have received pay of 
three times the average wage. 

Mr Olechowski, who said he 
would stay in post until 
December, became foreign min- 
ister a year ago when he joined 
toe government as a nominee 
of President Walesa. Under 


Poland's constitution, the pres- j 
ident has special responsibility 
for the foreign, internal affairs j 
and defence ministries which 
are cabinet posts. 

The last year has seen : 
repeated turf wars over these 
three ministries between the 
president and Prime Minister . 
Waldemar Pawlak, head of the 
Peasant Party. The search for 
Mr Olecbowski's successor pro- 
vides the opportunity for a full : 
scale clash as Mr Walesa 
recently made clear he wants 
to co-ordinate foreign policy. 

Mr .Olechowski is a non 
party politician whom opinion 
polls show as being one of the ; 
country's few potential candi- , 
dates who stand a chance of 
w inning next year's presiden- 
tial election against Mr Pawlak 
or Mr Alexander Kwasniewski, 
head of the post communist 
Left Democratic Alliance. 

President Walesa is doing 
badly in the polls. One poll this 
week showed him to be the 
most mistrusted politician in 
the country with 48 per cent 
expressing this view. Another 
31 per cent however continue 
to have confidence in the erst- 
while Solidarity hero. Mr Ole- 
chowski in contrast is mis- 
trusted by a mere S per cent , 
and his confidence rating at 54 
per cent is high and comes just j 
behind Mr Kwasniewski and 
Mr Pawlak. 

Yesterday’s resignation gives ; 
Mr Olechowski the chance to 
put some distance between 
him and the president and pre- 
pare the ground for an election 
bid. 


Ukraine near to 
winning aid from 
western donors 


puts radical reform back on agenda 

eign investors - there is, again. 


Russia 


By John Lloyd in Moscow 

The Russian government is 
determined to try once again to 
pursue radical economic 
reforms, according to a docu- 
ment on economic strategy 
obtained by the FT. 

Written by Mr Yakov Urin- 
son, the first deputy economics 
minister, the document pro- 
vided the background against 
which Mr Victor Chernomyr- 
din, toe prime minister, gave a 
largely uncompromising 
speech to the duma (lower 
house) yesterday, it admits 
that “at the moment, economic 
and political instability, infla- 
tion. high-cost credits and mis- 


trust in the authorities make 
up a generally inhospitable cli- 
mate for investment”. 

Only by changing that cli- 
mate can the rouble be stabi- 
lised. And to change the di- 
mate. the report confirms the 
government's commitment to a 
monthly inflation target of 2 
per cent over next year, the 
eschewing of credits from the 
central bank and the funding 
of the deficit by the issue of 
treasury bills and borrowing 
from the International Mone- 
tary Fund and the World Bank. 

Mr Alexander Shnkhln, dep- 
uty premier for the economy, 
said last week toe government 
hoped for as much as $14bn in 


IMF and Bank credits next 
year - an expectation the Fund 
has been at pains to play 
down. 

The paper lays out an indus- 
trial strategy which gives pride 
of place to ending subsidies 
and credits to “hopeless" enter- 
prises and concentrating on 
existing or newly created busi- 
nesses which can attract a mix- 
ture of state and private capi- 
tal. It wants to “closely 
co-ordinate" the second phase 
of the privatisation programme 
with measures to stimulate pri- 
vate investment; and It wants 
to make investment attractive 
to individual savers. 

As for the long-suffering for- 


a frank recognition of the 
causes for their suffering, and 
of the urgent need to convince 
them that the government is 
on their side. If it can do so - 
Mr Urinson does not spell out 
how it might be done - then 
"we can expect for e ign invest- 
ment to run at around SSbn to 
$6bn a year from 1995". 

The document is equally 
frank in recognising that Rus- 
sian industry, its output still 
tolling, its technology archaic 
and Its work relations unrecon- 
structed, is in no condition to 
stand unprotected before the 
world market The government 
will thus continue its policy of 


“reasonable protectionism” - 
using an array of weapons, 
including tariffs, quotas, 
export credits and manipula- 
tion of the rate of the rouble. 

However upbeat its determi- 
nation to recommit itself to a 
harsh path - not yet consis- 
tently followed by any of the 
post-1991 Russian governments 
- its forecasts sketch an econ- 
omy still tumbling. GNP is 
expected to come out at 
between 92 per cent and 94 per 
cent of this year: production is 
set to continue toning, by 3 per 
cent to 5 per cent (compared to 
8-10 per cent this year). Ofi out- 
put wifi be 6 per cent down, at 
295m tonnes; gas a mere 1 per 


cent down at 600bn cubic 
metres; and coal 1 per cent 
down on this year, at 270m 
tonnes. 

These are rather better fig- 
ures, if they come to reflect 
reality. However big tolls will 
continue in engineering (expec- 
ted to be 12-14 per cent down); 
timber (13-15 per cent down); 
light industry products (15 per 
cent down); agricultural output 
(6 per cent down). 

The commitment is strong. 
But the edifice rests on the 
assumption that the deficit will 
be financed by a vast issue of 
treasury bills and a very large 
package of loans. Critics were 
questioning both last night. 


CONTRACTS & TENDERS 


REPUBLIC OF COTE D'IVOIRE 
Union - Discipline - Travail 

OFFICE OF THE PRIME MINISTER 

PRIVATIZATION COMMITTEE 


INVITATION TO TENDER 


PRIVATIZATION O F LA SOCIETE 
CAOUTCHOUCS DE GRAND BEREBY (SOGB) 

("THE RUBBER COMPANY OF GRAND HEREBY") 
ASmcl£,Lr.SVBJ£CL.QF THE JWYITAIIPN XO..I35HBEB 

Tbc subject or this invitation to tender concerns the privatization of (be 

SOCIETE DES CAOUTCHOUCS DE GRAND BEREBY. a rubber plantation and natural rubber 
processing unit located in Grand Bcreby. in the southwestern part of Cdte d'Ivoire. 

ARTICLE 2 - PARTICIPATION TO THE TENDED 

This [coder is open io any moral and physical person with equal opportunity. 

akhcle j t-VALiDiLmr of mbs 

Bids stand valid for hundred and twenty ft 20) days starting from the submitting date 
mentioned in article 6. 

AKPCL&lJEMEQBABXfiECIlBIDUfflEOSg 

Bidden must join a mandatory and remporary security deposit of SO mflfioos CFA. Fading ro do 
so disqualifies the bid automatically. I CFA CVmc = 0.01 French Franc. 

ARTICLE.?,;. BIDDING DOCUMENTS 

Bidding documents ore available at the following address*. 


COMMITTEE OF PRIVATIZATION 
6. BoulevanJ de Hoddaii 
01 BP 1141 ABIDJAN - PLATEAU 
Republic of Ctkc dTvohc (The Ivory Coast) 
Tel: 1225) 22 22 32/ 22 22 31 
Fas (225)222235 


Fur a non refundable fee of CFAF SOjOOO (Hfty thousand CFA Franc) addressed 
lo the Comirc de Priv at isa t io n . 

ARTICLE 6- SUBMISSION OF BIDDING DOCUMENTS 

Tbe bidding documents should be submined on or before November 30th, 1994 l&OO Hours GMT 
<u the address indicated above. 

AmaEZJJJEBttIlG.QF.BIPS 

Bids will be opened on Friday December 2nd. 1994 at 9:00 hours GMT 
at the Privatization Committee in Abidjan. Cfile d'Ivoire. 


REPUBLIC OF COTE DTVOIRE 
Union - Discipline • Travail 

OFFICE OF THE PRIME MINISTER 

PRIVATIZATION COMMITTEE 


INVITATION TO TENDER 


PRIVATIZATION O F LA SOCTETE 
MULTINA TIONALE DEBfTUMES 
(SMB) 

("MULTINATIONAL ASPHALT COMPANY") 

ARTICLE 1 - SUBJECT OE THE INVITATION TO TENDER 
The subject of this invitation to lender concerns the privatization of the 
SOCIETE MULTINATIONAL DES BI FUMES, an asphalt making comp a ny located in Abidjan 

AMICUS 2 - FAKnaPAHOM lQ THE TENDER 

Tina tender is Open to any moral and physical person with e<|ual opportunity. 

ARTICU5 3 ■ VALID 1UTY OF BIDS 

Bids stand valid For hundred and twenty (120) days starling from the submitting «W 
mentioned in ankle 6. 

ARTICLE 4- TEMPORARY SECURITY PETOifll 

Bidders mast join a naadslory ant) temporary security deposit at 50 millioBS CFAF. Fading to do 
so disqualifies tbe bid automatically. 1 CFA Franc = 0.01 French Franc. 

ARTICLES- fflHfflG DOCUMENTS 

Bidding documents are available at the fallowing address: 


COMMITTEE OF PRIVATIZATION 

6. Boulevard de lTnd6ni6 
01 BP 1 141 ABIDJAN - PLATEAU 
Republic of C&lc JWolre (The Ivory Coast) 
Tel: (2251 22 22 32/ 22 22 31 
Tdeeopkur. (225) 22 22 35 


Fora non refundable fee of CFAF 50.000 (fifty thousand CFA fames) addressed to the Comlti de 
Privatisation. 

ARTICLE 6 - SUBMISSION OF BIDDING DOCUMENTS 

The bidding documents f h ^ i/i be submitted on or before November 30th, 1994 18:00 Honrs GMT 
at tbe address indicated above 

ARTICLE 7 - OPENING Of MBS 

Bids will be opened on Friday December 2nd. 1994 at 9^0 boars GMT 
at tbe Privatization Committee in Abidjan, CCaz tflvoirc. 


By Matthew Kaminski in Kiev, 
B er na rd Simon in Toronto and 
Anthony Robinson in London 

Ukraine was last night dose to 
securing up-front financial aid 
from western donors and debt 
relief from its Russian and 
Turkmen energy suppliers at a 
Group of Seven-organised con- 
ference in Winnipeg. 

Mr Andrei Khozyrev. Rus- 
sian foreign minister, who is 
leading toe Russian delegation, 
said that Russia, which is owed 
$2.7bn (£L7bn) for oil and gas 
exports to Ukraine, was pre- 
pared to join the Paris dub of 
official creditors and resched- 
ule $825m of payments due in 
the fourth quarter of this year. 

Ukraine is seeking a total of 
$900m for the fourth quarter to 
cany out toe economic stabi- 
lisation agreement reached 
recently with the IMP, accord- 
ing to Mr Roman Shpek, the 
Ukrainian economy minister. 

In an attempt to ensure such 
assistance, the Ukrainian, 
national bank passed a decree 
on Tuesday to unify the 
exchange rate, one of the mea- 
sures urged on Ukraine by its 
international creditors. 

This will leave the value of 
toe karbovanets. the tempo- 
rary national currency, to be 
determined by the market and 
not, as hitherto, by the hard- 
currency priority committee. 

The government this week 
also announced bold price and 
export liberalisation measures 
which will cut subsidies on 
food, rents and energy, and 
remove bureaucratic limits on 
a range of export products. 

Ukraine’s President Leonid 
Kuchma, heading the Ukrai- 
nian delegation, told western 
donors the reform programme 


hinges on immediate western 
aid and a successful debt 
rescheduling agreement to 
cover its 3600m fourth-quarter 
balance-cf-payments deficit 

“We badly need help to get 
through the Tl«tt two months 
and restructure our accounts. 

We are staking everything on 
the visit to Canada,” Mr Oleh 
Rybachuk, international 
department head at the 
National Rank, said before toe 
conference began. I 

Ukraine asked Russia and < 

Turkmenistan, who are owed i 

over $3bn for oil and gas j 

exports, to conclude a resched- - 
uling agreement About $340m 
of the geoom financing gap for 
the fourth quarter is attribut- 
able to energy imports 
unmatched by exports. 

Russia, which faces its own 
debt renegotiation problems, 
was reluctant to reschedule; 

Mr Alexander Shohkin, Rus- 
sian minister for economic 
affairs, earlier suggested Rus- 
sia would prefer to exchange 
debt for former Soviet assets, 
including land, in toe Ukr aine. 

Before the conference, the 
European Union also dragged 
its feet, demanding repayment 
of past arrears of SlOOm and 
action to dose the Chernobyl 
nuclear power plant which EtJ 
members still consider a big 
hazard but which the Ukraln- * 
ians need to reduce their 
dependence on imported 
energy. 

The US committed $70m 
which It said it would raise to ~ 
SlOOm if the EU ramp up with 
similarly-sized balance-of-pay- 
ments aid. Canada pledged 
$25m. 

Ukraine, with a population of 
53m, has a total foreign debt of 
around $7bn. 


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FINANCIAL TEVCES FRIDAY OCTOBER 28 1994 


3 


NEWS: EUROPE 


EUROPEAN NEWS DIGEST 

Bosnian army 
drives out Serbs 

pie Bosnian Moslem army has pushed back Bosnian Serb 
forces in a major offensive in north-west Bosnia, forcing 
retreating Serb soldiers to abandon tanka and mortars. The 
UN said Bosnian army had attacked out of the Bihac pocket, 
capturing between 100 and 150 square kilometres. “They have 
caught the BSA [Bosnian Serb army] unawares and . . . [the 
Serbs’] normally effective eonrmawd and control structure col- 
lapsed and they withdrew in considerable disarray, ahandnn- 
ing equipment such as tanka and mortars," said military 
Spokesman Colonel Tim Spicer. 

Bosnian army fifth corps soldiers were celebrating in the 
streets of Bihac town while aid a gnnriaa reported several 
thousand refugees, apparently Serbs, flawing the fi ghting 
However, UN military officers in Sarajevo said the Moslem 
offensive had slowed and they believed they bad paused to 
consolidate their gains. 

Tbe Bihac pocket has been surrounded by Serb forces for 
much of Bosnia's 30 m onths of war. But gfry*a it suppressed a 
revolt by breakaway Moslems at the end of the summer, the 
Moslem Fifth Corps has turned its attention to the Serbs. “Our 
assessment is ' that the BSA is somewhat stretched at the 
moment," Col Spicer said. Hotter, Sarajevo 

Compromise in OECD job row 

France and Canada have reached a compromise that could 
settle a dispute over who should be the next secretary-general 
of the Organisation for Economic Co-operation and Develop- 
ment (OECD). Under their- proposal Fren chman Jean-daude 
Faye, who was seeking a third five-year term after his man. 
date expired last month , would be reinstalled as haad of the 
25-nation economic think-tank for two years. Donald Johnston, 
a fOrmCS 1 Canadian finance minister and the candidate h ark ad 

strongly by the US and most other ram-European members, 
would then serve a full five-year term 
The question now is whether the US win swallow the deal, a 
diplomat said. The US is keen that the Job should go to a 
non-European and diplomats said the OECD dilemma may not 
be resolved until the contest for the top job at the World Trade 
Organisation — flw successor to the General Agreement on 
Tariffs and Trade - is over. Washington is promoting Mexico’s 
President Carlos Salinas de Gortari, who leaves office an 
November 30, for the the WTO job. Reuter, Paris 

Schneider’s lawyers resign 

The defence lawyers of fugitive German p r o p e r l y tycoon Jtir- 
gen Schneider have said they will no longer represent him, the 
F rankfa rt public prosecutors’ office said yesterday. “The law- 
yers informed us that the; were resigning their mandate," the 
prosecutors* office said. Media reports raid the lawyers quit 
because all attempts to contact Schneider personally had 
failed. 

Schneider is wanted by police far alleged fraud. He and his 
wife disappeared in April leaving his property group to go 
bankrupt with more than DM5bn (J3JJbn) of debt to banks and 
trade creditors. His Geneva-based intermediary, described as 
an Arab with links to inteWgence services and arms dealers, 
had consistently blocked attempts to make contact with him, 
prompting speculation he may be dead, the media reports said. 

The lawyers doubted whether Schneider's signatures on 
documents giving them power of attorney were real But 
police have verified the signatures and said there were no 
VmHrgtirwig that S r.hngiriM - was ripari. Router, Frank fu rt 

Estonia picks Green premier 

The Estonian parliament yesterday backed environment min- 
ister Mr Andres Tarand as prime minister, averting the pros- 
pect of early elections in the Baltic republic. Deputies voted by 
63 in favour, with 15 abstentions and one against, in support of 
Mr Tarand, who had been nominated for the post by President 
Lennart Meri Mr Tarand, a leading light in Estonia’s Green 
movement, will take over from Mr Mart Laar, who lost a 
confidence vote last month because of what his critics saw as 
a highhanded,' secretive style of leadership. 

The appointment of Mr Tarand, a compromise candidate 
who does not belong to any party, reflected a lack of enthusi- 
asm among deputies for early elections. Earlier this month, 
parliament rejected the president’s first choice, central bank 
governor Mr Slim y«ib* s . Mr Tarand said given that elections 
were scheduled for next March he did not intend to initiate 
any major changes to government policy. Reuter, TuUxmL 

France curbs welfare spending 

The French government has made progress in its attempts to 
curb welfare spending, but the social security accounts may 
need extra funding to avoid cashflow problems in the first half 
of 1995, according to a report released yesterday. The report by 
the social security accounts committee forecast that the deficit 
on welfare spending, which includes health, p ensions and 
family benefits, should narrow to FFr50JSbn (£8bn) next year, 
from about FFr54bn in 1994 and FFr56.4bn in 1993. 

According to the report, however, the deficit would still 
exceed aviating borrowing condztians agreed with the Gaisse 
des Depots, the state financial institution. The government, 
which wrote off social security debts of an ac cum u lated 
FFrllOfaai last year by transferring them to the central state 
budget, has so-fer resisted a further injection of funds. Prior to 
the writeoff, the government implemented cost-cutting mea- 
sures in the state pension scheme and in health spending 
ainwri at haianring the social security accounts. John Bidding, 


Euro-MPs back bigger budget 

Bringing Austria, Finland, Sweden and Norway into the Euro- 
pean Union will mean the EU budget needs to be expanded by 
more than Jlbn next year, the European ParH amtai t said 
yesterday. The parliament proposed the draft EU budget for 
1995 be increased by EcuSOQm (£629m) to reflect the Imminen t 
enlargment of the bloc. 

Austria and Finland are due to join the EU on Janua ry ^1 
following successful raferendums. Sweden and Norway wul 
vote on membership on November 13 and 28 respectively. The 
figure was included in the parliament's first n*admg afthe 
draft budget for 1995, in which it proposed an overall budget of 
EcuSQJftn. Reuter, Strasbourg. 

ECONOMIC WATCH 

Sweden raises interest rates 

Sweden’s central bank, the Riksbank. yesterday moved to 
counter inflationary pressures by raising its key short-term 
interest rate, the repurchase rate, by 20 basis points to 7.40 per 
cent. It is i<v * m«a +\io want has lifted interest rates m 


iiu 11 IB U1C OIMI11U HUE — .. p . , 

te last three months and the first increase since t he So cial 
emocrats won the September general elections. Ana&ats isaW 
e increase bolstered the Social Demoaab 
ehWiHaIr following the appointment of Mr KjeH-Olof Feldt, a 
rmer Social Democrat finance minister, as chairman of the 
iksbank’s board of governors. The Mmbank wtt^dlaa 
eek that Swedish inflation might exceed the hank’s target of 
3 par cent t mrt year. Rising producer prices mid signs of 
ittlenecka in the manufacturing sector have already pushed 
> inflation to 2.7 per cent The hn* made its inovei teste 
te recent strengthening of the krona and a fell in long-term 
Onista]^ Stocfcfto&n ,,, w 
German, industrial output rose in August by I4lper 
mt year-on-year after increasing in July by 9.4 per c ent w est 
arman engineering orders rose by 1A pw cent m r^I terms m 
Member from a year ago. . , , 

Spanish industrial production rose by u.6 per cent in 
iigust, after rising 4B per cent in July , . 

Belgian inflation figures were much better than expected, 
nmp to 2.12 per cent in October from 2*46 par cent, in 
iptembesr. 


Cross-border shoppers discover cross-border fraud 

The single market is held back by lack of proper consumer protection, writes David Buchan 


W hy does cross-border 
shopping amount to 
only 3 per cent of all 
transactions in the famous 
European single mar ket? Mr 
and Mrs Roger Degraeve of 
Ypres can supply part of the 
answer. 

The Flemish couple were ini- 
tially delighted with their 
recent trip to Kortrijk, still in 
Belgium, where they made the 
equivalent of a cross border 
purchase after enming across a 
smooth-talking French sales- 
man who had organised a com- 
petition for a Limoges dinner 
service. The latter had set him- 
self up in a temporary stall in 
a local mall. The Degraeves 
won, only to he told their 
“prize" could not he delivered 
rmipgg and until they agreed to 
pay BFr64,000 (£1269) for the 


privilege of having their ini- 
tials carved In gold on each 
and every plate. 

Grudgingly, the Degraeves 
agreed to a BFr24,00Q downpay- 
ment. but then decided not to 
pay for their “prize” and con- 
tacted the European Consumer 
Information Agency (EC1A) 
office in Kortrijk which told 
then that under Raigiaw legis- 
lation they had a seven-day 
reflection period in which they 
pnniH change their mind and 
revoke their payment The 
Kortrijk office contacted its 
French counterpart in Lille 
and the French fraud rrffina in 
Paris who eventually got the 
Degraeves back their money 
from the Limoges-based nhina 
company, “La Table des C6s- 
ars”, which from subsequent 
complaints lodged with Kor- 


trijk and LDle still appears to 
be carrying out Its marauding 
raids cm Belgian consumers. 

Traditionally, these con- 
sumer bodies are dispensers of 
data such as the vast array of 
comparative beer prices in 
northern France, Belgium and 
Kent open to anyone dialling 
into the ECLA computer in 
Lille. Increasingly, however, 
they are also having to double 
up as trouble-shooters. The 
five “jurists" in the EdA office 
In Lille have, for instance, 
dealt with some 300 complaints 
in the first seven months of 
this year. 

Figuring high among the 
purchases which trigger 
French complaints about the 
Belgians are furniture, 
ready-made verandahs, and 
second hand cars. Mrs Mlreffle 


Leroy, the ECIA’s Lille direc- 
tor, says French furniture 
hunters tend to flock into Bel- 
gium “where the salesmen are 
good, warehouses are open on 
a Sunday, coffee and creches 
are provided and people are 
sometimes ready to sign any 
old piece of paper”. The upshot 
is that the Lille centre gets reg- 
ular complaints about goods 
that are misdescribed or deliv- 
ered late or not at all; one 
French buyer of a Flemish 
wardrobe found it was heavy 
in weight as well as style, 
being partly made of concealed 
concrete. 

What makes these cases 
harder to resolve than the 
standard consumer disputes or 
frauds occurring inside EU 
member states is precisely the 
difficulties inherent m 


to pursue a foreign company in 
a foreign language through a 
foreign legal system. Some- 
times the stake for individuals 
can be quite high- Mrs Leroy 
points to the case of some 
French in Alsace who, she 
says, “have landed themselves 
deeply in debt by taking life 
insurance mortgages from 
Commerzbank which carry a 
tax advantage in Germany, but 
not in France". Generally, how- 
ever, the sums of money 
involved rarely justify an 
aggrieved consumer nailing fn 
a lawyer in one country, let 
alone in two countries. 

The Brussels Commission is 
contemplating two measures to 
improve consumers’ access to 
justice and to regularise guar- 
antees. One is a plan for a stan- 
dardised complaint form 


which, when duly translated, 
judges and rnns nmw a ganrips 

around the EU will readily 
recognise and act on. The 
other is harmonisation of fh» 
different legal guarantees 
offered by EU members. This 
hasrir right of redress, distinct 
from additional commercial 
guarantees offered by specific 
manufacturers for specific 
products, only lasts for six 
months in Germany, but for 
six years in Britain and 
Ireland. 

This worry over what-hap- 

pens-if - it -goes- wrong is, accord- 
ing to consumer surveys, what 
most often deters shoppers 
venturing over borders. Until 
this concern is eased, the sin- 
gle market will remain unex- 
ploited. 


EU collective investment 
scheme laws ‘a failure 9 


Breakdown of Hefts assets authorised in 
Luxembourg only by natio na l hitweat 
Total assets: $ia07bn 


Round-trip UcHs by provenance of 
management group/pr om oter 


By Norma Cohen, 

Inve s tments Correspondent 

European Union legislation 
armor! at a pm- ri ng a panning 
cross-border market in collec- 
tive Investment schemes has 
largely been a failure, accord- 
ing to a new study. 

Upper Analytical Services, 
the US-based mutual fund 
research group, has concluded 
that just over a. third of 
so-called Ucits - “undertakings 
for collective investments in 
transferable securities” such as 
equities or bonds - are genu- 


inely marketed across Euro- 
pean borders. 

Roughly 38 per emit of the 
5,436 Ucits are marketed out- 
side the country of domicile of 
their promoters. A significant 
portion of Ucits are “round- 
trippers", Lipper Analytical 
said. This means they are 
domiciled in the low-tax cen- 
tres of Dublin ami Luxembourg 
but marketed exclusively into 
the co untry in which their pro- 
moter Is. dnrniftiTpfl , making 

them effectively low-tax 
domestic collective invest- 
ments or “round trippers”. 


Of the 937 Ucits which have 
been n fr f rfioH for marketing In 
only one country outside their 
country of domicile, 606 can be 
identified as “round- trippers". 
Promoters of Ucits have to 
notify authorities in the coun- 
tries they wish to sell but do 
not require their permission. 

“If the question is “has the 
Ucits Directive succeeded in 
creating a single market for 
funds?" then the answer must 
be “No", says the report. 
Despite the common legal 
framework, each member state 
retains control over local fiscal 



Franca 

&D% 



Italy 

2 . 8 % 

Ireland 

dew 


and marketing policies. “Tax 
efficiency and effective distri- 
bution remain th» major fac- 
tors in determining the use 
made of th«> directive to mar- 
ket a fund to the investors resi- 
dent In another state.” 

The report also found a large 


number of Ucits - 281 with 
total net assets of $13.1bn 
which are notified for sale in 
Luxembourg but are not sold 
in any other European coun- 
try. Luxembourg has a popula- 
tion of only 375JJ00 and Upper 
Analytical is sceptical that 


finroa 

17.3% 

Germany 

382% 


these are intended for domestic 
consumption, instead, they are 
likely sold outside the EU. 
European Fund Industry Direc- 
tory 1394, Speaal Beport Vats, 
Upper Analytical Services, 47 
Maple Street. Summit, New Jer- 
sey 07901. 



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INTERNATIONAL NEWS DIGEST 

Price Waterhouse 
case ends in HK 

Price Waterhouse, the international accountancy firm, 
yesterday settled out of court a HK$2bn (£L58m) civil negli- 
gence case brought against it by the liquidators of Carrtan 
Investments (CIL). the Hong Kong shipping and property 
group that collapsed in 1983 with debts estimated at HK$iCbn. 
Details are being kept confidential. A statement issued on 
behalf of both parties by the accountancy firm said: “In 
agreeing the settlement. Price Waterhouse deny any liability. 
But in cases of this complexity, it is often in both parties' 
interest to avoid protracted litigation costs”. 

The agreement, reached within four weeks of the opening of 
the Hong Kong High Court hearing, abruptly ends a case it 
was thought would run six months. The CIL company was 
once Hong Kong's seventh biggest Opening the case. Mr 
Christopher Carr, QC, representing the liquidators, alleged the 
auditors had failed in their duty to act as independent watch- 
dog. At the end of 1981. he claimed, Price Waterhouse passed 
accounts stating pre-tax profits surpassed HK$700m, when, the 
court heard, the reality was a toss of more than HK$270m. 
Louise Lucas in Hong Kong. 

Japan’s pensions bill moves on 

A bill to reform Japan's pensions system, to cope with the fast 
growing number of elderly, was yesterday passed by the Diet’s 
tower house. The scheme will raise pension premiums and 
gradually increase eligible pension age from 60 now to 65 in 
2013. By then, one in four of the population will be over 65, up 
from 12 per cent in 1990. Trade unions and pensioners' lobbies 
bod objected to the increase In pension premiums included in 
the hill, but the government agreed to increase the pension 
pr emiums it contributes from the national budget 

To ease the t rans ition, pensioners beneath the new starting 
age will get a partial hand-out equal to roughly half a full 
pension. The basic monthly pension will rise, from Y206.300 
(£1,305) to Y214.300 next year, to be funded by a rise in pension 
premiums from the present 14.5 per cent of salary to 17.35 per 
cent The bill gives the government a mandate to raise premi- 
ums to a 29.6 per cent limit William Dawkins in Tokyo. 

Pyongyang N-costs set out 

An international consortium will have to spend $4J>bn (£2.8bn) 
to dismantle North Korea’s nuclear programme and replace It 
with new energy supplies and safer light-water reactors. South 
Korean officials said yesterday. Seoul is expected to support 55 
per cent of the cost, with the rest split among the five UN 
Security Council members, and Japan, Canada. Australia and 
Germany. 

Mr Han Sung-jao, South Korean foreign minister, said the 
project will include $33bn for light-water reactors, 5500m for 
dis mantling North Korea’s nuclear reactors, S30Qm for interim 
heavy fuel oil supplies and $l00m to run the consortium, the 
Korea Development Energy Organisation, in the next decade. 
South Korea is expected to finance its share from the national 
budget, with funds raised through sale of government stakes 
in listed companies or privatisation of state-owned companies. 
John Burton in Sami. 

Bangladesh crisis deepens 

Bangladesh's parliament was 
summoned to meet on 
November 12 as the Common- 
wealth-brokered talks 
between the government of 
Prime Minister Khaleda Zia 
(pictured left) and opposition 
leaders resumed yesterday. 
Sir Ninian Stephen, a Com- 
monwealth emissary, joined 
the talks aimed at ending the 
impasse created by opposition 
demands for fresh elections 
under a non-partisan care- 
taker government. All 154 
opposition MPs have boycot- 
ted parliament and staged ral- 
lies and general strikes since 
March to press for Mrs Zia’s 
resignation and fresh elec- 
tions. Mrs Zla, who came to 
power in 1991, was elected in polls which observers judged 
mostly free and fair. But the opposition parties, led by Mrs 
Sheikh Hasina’s Awami League, claim they were rigged and 
say the government has interfered in subsequent local and 
by-elections. Sir Ninian, who arrived here a fortnight ago, has 
held a series of meetings with government and opposition 
leaders to aimed at narrowing their differences and ending the 
crisis. On Wednesday, he averted a breakdown of talks 
between government mid opposition leaders. AP in Dhaka and 
Stefan Wagstyl in New Delhi 

Cambodian hostages 'dead’ 

A Cambodian who bad spent two months translating for three 
Westerners held hostage by the Khmer Rouge said yesterday 
they were killed last month by a mortar round while on their 
way to be ransomed. Earlier, In Sydney, Australian Foreign 
Minister Gareth Evans said he had credible but unconfirmed 
reports that the Australian, Frenchman and Briton had been 
killed by a commander of the Khmer Rouge guerrilla group. 

Australian David Wilson, 29, Britan Mark Slater, 26, mid 
Frenchman Jean Michel Braquet, 27 were seized on July 26 in 
an attack on a train in southern Cambodia. The Khmer Rouge 
had demanded S150.0GO (£93,700) for their release. The transla- 
tor. Mr Hem Ncn, said that a week after the transfer was to 
have taken place, guerrillas coming back from the front lines 
told him tbc hostages had been killed. “I investigated and the 
exact information is that the three hostages died,” Hem Nen 
said. “But l don’t know where they put the bodies. I didn't 
dare to ask them." In London, a British Foreign Office spokes- 
man said there was no proof of the hostages’ deaths; the UK 
government was doing its utmost to establish the foots. AP in 
Chankar Dong, Cambodia. 



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Problems left after HK airport deal 


By Pater Montagnon, 

Asia Editor 

The Imminent agreement 
between China and Hong Kong 
on the territory’s new airport 
will be an important symbolic 
breakthrough, but leaves a 
number of questions unan- 
swered, according to officials 
who have followed the talks 
closely. 

The outspoken optimism of 
Mr Chris Patten. Hong Kong 
governor, in London on 
Wednesday night means there 
is little likelihood of a last min- 
ute snag, but signature of the 
framework agreement must be 
followed by specific subsidiary 


arrangements allowing the 
project sponsors to raise much- 
needed debt finance. 

Mr Patten argued that these 
subsidiary agreements, which 
cover the relationship between 
the Hong Kong government, 
the Mass Transit Railway and 
the provisional airport author- 
ity would follow automatically. 
Some officials privately fear, 
however, that China could turn 
them Into a new set of bargain- 
ing chips in discussions over 
Britain’s handover of Hong 
Kong in 1997. 

Nor would an airport deal 
necessarily imply a sudden and 
significant shift in China's 
underlying approach to Hong 


Kong. Mr Patten’s offer earlier 
this month for Hong Kong offi- 
cials to collaborate with the 
preliminary working commit- 
tee, which China has set up to 
prepare for the handover of 
power, has met a stony silence 
from Beijing. 

It would only become clear 
in the follow-up to a frame- 
work agreement on the airport 
how far the underlying climate 
has changed. 

One view in Hong Kong Is 
that the uncertainties gener- 
ated by the ill-bealth of Mr 
Deng Xiaoping. China’s 
supreme leader, make it diffi- 
cult for Beijing to undertake 
any serious policy initiatives. 


If so, the timing of the airport 
agreement would mostly 
reflect the need for China to 
distance the move from the 
passage of Mr Patten’s democ- 
racy legislation through the 
Legislative Council earlier this 
year. 

It has been clear for some 
time that obstruction of the 
airport agreement would not 
lead to additional concessions 
from the UK. Beijing is also 
thought to have come under 
pressure from the business 
community to settle a dispute 
which has cast a shadow 
over the territory’s credit 
rating. 

Without the delay, debt 


finance for the project could 
have been raised when interest 
rates were lower. Hong Kong 
officials say. Instead the gov- 
ernment has continued to fund 
construction of the project so 
that only about HK$23bn 
(£l.8bn) of debt finance will 
now be required. 

The final ratio of debt to 
equity will now be about a 
quarter compared to around 
half when the project started. 
But to raise this finance, the 
project sponsors need the 
subsidiary agreements which 
demonstrate to lending banks 
that they will be repaid out 
of project revenues after 
1997. 


UN in frantic effort to save elections 

Renamo withdrawal l 
confuses voters 


By Peter Stanley in Maputo 

Mozambicans went to the polls 
yesterday in the country’s first 
multi-party elections in a state of confu- 
sion after the former rebel Renamo 
movement withdrew only hours before 
ballot stations opened. 

A grim-faced Mr Afonso Dhlakama. 
Renamo leader, flew into the capital 
Maputo from the central port of Beira 
last night and announced that “the 
elections are false”. 

The elections had been intended as 
the culmination of a two-year peace 
process following the 1992 Rome Accord 
between Renamo and the Frefimo gov- 
ernment which ended Mozambique's 16- 
year civil war. Just two days ago United 
Nations officials, who are supervising 
the exercise, expressed confidence that 
the Mozambican peace process was on 
the verge of producing an African suc- 
cess story. 

Renamo’s withdrawal did not prevent 
hundreds of thousands of Mozambicans 
from queueing up in order to cast their 
votes. In Maputo many voters expressed 
dismay at Renamo '8 actions, and feared 
the boycott could lead to violence. 

Renamo has been alleging for weeks 
that the Frelimo government was plan- 
ning to rig the vote, but few expected 
such drastic action the night before 
polling stations opened. Renamo offi- 
cials said Mr Dhlakama had “come to 
the conclusion that free and fair elec- 
tions are not possible until certain tech- 
nical difficulties are addressed". 


In the frantic hours which followed, 
Mr Aldo Ajello, the head of the 6,000- 
strong United Nations peacekeeping 
mission in Mozambique, as well as the 
Mr Brazao Mazula, president of the 
National Election Commission, pleaded 
with Renamo officials not to withdraw. 
They foiled, and when the polls opened 
at 7am national radio was announcing 
Renamo’s withdrawal 

In Maputo, thousands of people 
waited to vote in a subdued but calm 
atmosphere. Mr Mario Machungo, 
prime minister, described Renamo’s 
actions as “undemocratic and regretta- 
ble". Voting is due to end today. 
Renter adds from Cape Town; South 
Africa was in touch with all political 
parties in neighbouring Mozambique to 
ensure elections there stay on track. 
Deputy President Thabo Mbeki said yes- 
terday. “What we are trying to do is to 
ensure that everybody stays in the pro- 
cess and everybody recognises the out- 
come of the election," Mr Mbeki told 
the senate. 

"We are hoping that we will succeed 
in that because clearly as a country, we 
cannot afford to have another Angola 
on our doorstep.” 

In Angola. Unita rebels resumed their 
civil war two years ago when they lost 
elections to the government of Presi- 
dent Jose Eduardo dos Santos. Ren- 
amo’s Mr Dhlakama maintained, how- 
ever, that the last-minute boycott by his 
party did not mean a return to guerrilla 
war. . 

See Editorial Comment 



Mo zambican women in the northern town of Nampnla line up to vote yesterday ap 


South Africa takes hard line on rent strikes 


By Mark Suzman 
In Cape Town 

In an attempt to ensure its 
national programme to build 
lm houses over the next five 
years will be financially viable. 
South Africa’s government has 
warned that people who boy- 
cott rent or mortgage pay- 
ments will be evicted from 
their homes. 

Addressing a national forum 
on housing in Botshaheto, near 
Bloemfontein, Deputy Presi- 
dent Thabo Mbeki and Mr Joe 
Slovo, housing minister, said, 
housing targets would not be’ 


met unless rent and service 
boycotts, which started as a 
way of opposing apartheid in 
the 1980s, were ended. 

"Those of you who continue 
to think positively of the boy- 
cotts are stabbing in the back, 
not what you can call the 
enemy, but your brothers and 
sisters,” Mr Slovo said. 

The decision is politically 
controversial as it may require 
the African National Congress- 
led government to act against 
many of its political support- 
ers. 

But it is regarded as essen- 
tial if the government is to 


have any hope of meeting the 
huge backlog in formal hous- 
ing. estimated at L5m houses. 
At present, only about 30 per 
cent of township residents 
meet their bond or rent pay- 
ments. 

Mr Slovo used the summit to 
launch a national housing 
accord calling for a partnership 
between the private and public 
sector to help increase capacity 
in the construction industry 
and recommending that the 
government increase the Hous- 
ing Ministry’s share of the 
national budget from its 
present level of 1 per 


cent to 5 per cent 
The accord was endorsed by 
a broad range of township civic 
associations, trade unions, big 
banks and construction compa- 
nies, as well as representatives 
from local, regional and 
national government 
The declarations follow the 
announcement last week that 
the government had struck 3 
E2bn (£350m) deal with the pri- 
vate sector that will open up 
mortgage loans to the lower 
end of the bousing market and 
appears to signal the govern- 
ment Is at last ready to release 
its final blueprints for the 


housing programme, expected 
to be submitted as a White 
Paper to parliament shortly. 

Several regional ministries 
have vigorously promoted a 
policy of building four-room 
houses for the country’s home- 
less. Given its tight budgetary 
constraints, the government is 
expected to endorse a more 
limited “incremental 
approach” to the problem. 

The government will focus 
on building fully-serviced, sin- 
gle-room houses . that people 
can then expand by taking 
advantage of private-sector ini- 
tiatives. 


Zimbabwe 

condemns 

Oxfam 

report 

By Michael Holman. 

Africa Ethtor 

Oxfam. a leading British 
charity, faces possible expul- 
sion from Zimbabwe following 
an angry government response 
to the agency’s criticisms ol 
the country’s health policy. 

In a report* published this 
month, Oxfam accused the gov- 
ernment of being partly to 
blame for a reversal of post- 
Independence improvements in 
the nation's health by cutting 
spending and imposing user 
fees. 

In parliament Mr John 
Nkomo, social welfare minis- 
ter, condemned the Oxfam 
study as “misleading, unscien- 
tific. and deliberately mischie- 
vous”. The report's "Insinua- 
tions, distortions and 
deliberate falsification of fig- 
ures are not acceptable.” 

Officials from Oxfam’s head- 
quarters in Oxford are now 
seeking an urgent meeting 
with the Zimbabwe govern- 
ment in an attempt to avert a 
confrontation. 

The report also questions 
government claims that the 
country’s structural adjust- 
ment programme makes ade- 
quate provision for protecting 
the health of the poor. 

"Despite the mounting body 
of evidence showing a clear 
correlation between user fees 
and worsening health indica- 
tors, the government of Zim- 
babwe increased these fees and 
imposed more stringent condi- 
tions for their collection in 
January 1994," says the study. 

Spending on health as a per- 
centage of gross domestic prod- 
uct has fallen to 2.7 per cent, 
according to Oxfam, the lowest 
since independence in 1980. 
"Under pressure from the 
World Bank, the Zimbabwe 
government has increased ex- 
penditure since 1992," says the 
report, but notes “a nominal 
increase in the 1992-93 budget 
amounted a to a decline in real 
terms of around 20 per cent” 

According to government 
officials, Oxfam’s local repre- 
sentatives had earlier been 
summoned by Dr Timothy 
Stamps, health minister, to his 
office, where he is understood 
to have called for an apology 
and a retraction. 

There is an overwhelming 
case for withdrawing user fees, 
says Oxfam: “Unfortunately 
the Zimbabwe government's 
policy Is pulling in precisely 
the opposite direction, as wit- 
nessed by the sharp increase in 
user fees in January 1994.” 

Oxfam last night said it 
stood by the report “Our pri- 
mary concern is relief from 
poverty, therefore we cannot 
be expected to turn a blind eye 
to policies which result in the 
poor carrying the cost of mac- 
roeconomic adjustments, how- 
ever necessary they may be,” 
said Mr Stewart Wallis, the 
agency’s overseas director. 

•PtOAng tor Mh; Povortr ana Structural 
Aafuatmant m Smbabwn. fty Jean Lemoch. 
Odam. 374 Bantxry Read. Cbdbnd 0X2 rrc 


■pi«> 


Dependence on US leaves Kuwait few choices 

Little remains of the Gulf state’s policies from before the war against Saddam, says RobinAllen 


P resident BiU Clinton’s 
arrival in Kuwait today 
is designed to demon- 
strate the depth of US commit- 
ment to the Gulf state in the 
wake of the renewed military 
threats from President Saddam 
Hussein. But it also underlines 
the extent to which the latest 
crisis with Iraq has deprived 
Kuwait of what little freedom 
of choice it had left in Interna- 
tional affairs. 

In four years, Kuwait has 
passed from being a self-con- 
sciously assertive leader of all 
that was considered progres- 
sive in the Arab world, to a 
state whose survival depends 
on continuing US support 
The result has been a paraly- 
sis in policymaking on virtu- 
ally all Middle East issues. 
Officials appear to have no 
more original thoughts than 
would be expected were 
Kuwait's foreign ministry the 
Gulf branch office of the US 
State Department 
Far from regarding tbese 
developments as negative, 
Kuwaitis are basking in a new- 
found sense of security that 
officials are convinced is set to 
grow. The danger is that 
Kuwait's back-seat diplomacy 
will turn out to be as illusory 
as the image that It used to 
promote on the world stage. 

Before August 1990, Kuwait 
was foremost in championing 
political and human rights for 
Palestinians; it was a leader of 
the non-aligned movement, 
spending generous foreign aid 
to win friends: it was a decade 
ahead of its partners in the 
Gulf Co-operation Council in 
opening diplomatic relations 
with the Soviet Union. 

Today, little of there policies 
remain. The non-aligned move- 
ment is extinct as is the Soviet 


Union. Foreign aid money that 
might have bought goodwill 
has left Kuwait with billions of 
dollars of non-performing loan 
assets, still listed in the State 
General Reserve Fund "for 
book-keeping purposes only.” 
one government financial 
adviser says. As for the Pales- 
tinians, feelings against them 
run deep for what is still 
regarded as their “betrayal" in 
1990 for supporting President 
Saddam. 

Jordan’s King Hussein is 
dose behind. "If Saddam Hus- 
sein rates a five out of five on 
the barometer of mistrust. 
King Hussein gets a four," a 


senior foreign ministry official 
said. Others close to Kuwait’s 
Emir, say this antagonism 
could change quickly under US 
pressure following Jordan’s 
peace treaty with Israel. 

In mock seriousness, senior 
officials suggest Kuwait still 
has five levels of foreign policy 
options. It can call on: 

• Its own resources. 

• Security arrangements with 
Its five GCC partners (Saudi 
Arabia, Oman, Bahrain, United 
Arab Emirates and Qatar). 

• The wider partnership of 
the GCC. plus Egypt and Syria, 
through the socafied Damas- 
cus Declaration. 


• The United Nations and the 
coalition of countries that 
came to its aid after the Iraqi 
invasion of August 1990. 

• Bilateral defence agree- 
ments with the US and three 
other permanent members of 
the UN Security Council: 
Britain, France and Russia. 

In practice, only the last two 
count for anything; and these 
are wholly contingent on a sus- 
tained US response to crises 
such as the one Kuwait has 
just faced. 

“The deepest feeling among 
all Kuwaitis is their concern 
for survival" says Mr Abdalla 
Al-Nibari, a National Assembly 


member. “For this, we look to 
the US. It is unfortunate, but it 
is a fact" A European diplo- 
mat describes the way Kuwait 
has come to depend on the US 
as "first by necessity, now by 
conviction". 

But there is a price to pay. 
“Kuwait better come up with 
more dollars and more sol- 
diers,” US Senator John 
Warner shouted into the micro- 
phone at the end of a recent 
press conference in Kuwait, a 
reminder of US congressional 
priorities and an outburst 
which embarrassed foreigners 
and left many Kuwaitis humili- 
ated. 


Clinton supports Mideast bank 


By Julian Ozams in Jerusalem 

President Bill Clinton has committed the 
US to support the creation of a Middle 
East development bank and announced 
fresh US aid as part of an increasing pack- 
age of US financial support intended to 
underwrite Arab- Israeli peace. 

In a speech to the Jordanian parliament 
on Tuesday Mr Clinton gave Ids adminis- 
tration’s first public backing to the cre- 
ation of a regional development bank to 
channel new investment and capital to 
projects. 

Mr Clinton pledged that his government 
would take the lead in consultations with 
regional and other governments to ensure 
the development bank, which will proba- 
bly start with a capital base of $10bn 
(£6bn), was property structure d. 

Israeli officials who have promoted the 
idea of creating a regional bank said yes- 
terday Mr Clinton’s remarks would guar- 
antee its creation and In effect over-ruled 
objections raised by the US Treasury, 
which had instead proposed creating a 
special window in the World Bank 


for Middle East projects. 

Israel wants the US, Europe and Japan 
to provide 60 per cent of the capital of the 
development bank, with proportional rep- 
resentation on the board of directors, aid 
expects a US citizen to be the bank’s first 
president 

Mr Clinton also announced in Jordan 
that his government’s Overseas Private 
Investment Corporation is establishing a 
$75m regional fund to encourage Ameri- 
can private sector investment in joint pro- 
jects between Israel and Jordan. 

Mr Clinton said the US was committed 
to help Middle East peacemakers "write a 
real practical future of hope" and ensure 
that peace delivered real economic bene- 
fits to the citizens of the region. "If people 
do not feel these benefits, if poverty per- 
sists, breeding despair and killing hope, 
then the purveyors of fear win find fertile 
ground/ Mr Clinton said. 

An Israeli official said Mr Clinton’s eco- 
nomic announcements showed that the 
president understood the political rather 
than purely economic imperative behind 
creating regional financial institutions. 


Mr Clinton has underlined during his 
current Middle East tour the economic 
role the US is playing in the Middle East 
peace process. The US, Jordan and Israel 
have established a trilateral economic 
commission which has produced a master 
plan to develop the Israel-Jordan rift val- 
ley hrto a “Valley of Peace" with projects 
in energy, desalination of water, tourism, 
transport, environment and industry. 

Washington has begun writing off 
S700m of debt owed by Jordan to the US 
and Mr Clinton said in Amman he had 
pledged to forgive all Jordan’s US debts 
Mr Clinton said he had called on Jordan’s 
other creditors to do the same and would 
help Jordan upgrade its military to give 
“yon the security yon deserve-" 

Last night Mr Clinton was expected to 
tell the Israeli parliament the US would 
maintain economic and military aid 
worth an a n ua l $3bn and loan guarantees 
worth ?Zbn a year. He was also expected 
to announce a speeding ap of additional 
US military transfers granted to Israel 
because of its recent peace efforts, includ- 
ing a shipment of 50 F-16 fighter jets 


European diplomats argue 
that Kuwait has become dan- 
gerously sucked into the US’s 
“personalisation" of policy, 
which implicitly rules out hav- 
ing to deal with an Iraq con- 
trolled by Mr Saddam. 

“We are small and cannot 
even protect ourselves against 
Iraq’s power, so we cannot 
have any views about the 
internal structure oE Iraq,” said 
Mr Sulaiman Majed al-Shah- 
een, foreign ministry under- 
secretary. 

Periodic talks with Iraqi 
opposition groups such as the 
London-based Iraq National 
Council (INC) and the Wash- 
ington-based Free Iraqi Council 
(FIC) have got nowhere. A 
senior official conceded that 
some members of the INC are 
“articulating a policy based on 
a constitutional monarchy in 
Iraq”. 

But Kuwait, he said, “doesn't 
care If Iraq’s constitutional 
monarch is an Indian guru or a 
Hashemite, so long as their 
intentions towards Kuwait are 
peaceful". 

Under US protection, Kuwait 
can afford the same detach- 
ment concerning Iran. “Iran 
does not have any claim on 
Kuwaiti territory. Iran only 
wants to be number one apmng 
equals. Kuwait says we are ail 
equal regardless of size.” one 
official said. “We want the Gulf 
to be what it U: number one in 
the strategy of the big powers." 

So Kuwait is content to leave 
its future in US hands. This 
back-seat policy is based on the 
assumption that the US is able 
and willing to provide 
open-ended guarantees for the 
security of Kuwait and the 
other members of the GCC. But 
m politics, as Senator Warner 
made clear, nothing is certain. 




r-T. 


.vs* 




FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


IT 




NEWS: WORLD TRADE 


K> 

■Port 


‘Bio-piracy’ costs Third World $5.4bn a year 


By Francos WHftams In Geneva 

“Bio- piracy" is cheating developing 
countries and their indigenous peo- 
ples of $5.4bn a year, a UN-commis- 
stoned report*, published yesterday, 
claimed. This is the amount they 
would be entitled to in royalty pay- 
zneots if wii i food. ateH 

companies paid for their plant variet- 
ies and local knowledge. 

The report puts the value of Third 
World plant species to the pharmaceu- 
tical industry alone at more than 
$30bn a year It says that while more 


than 90 per emit of the earth’s remain- 
ing biological diversity is located in 
Africa. Asia and South America, 
indigenous c ommuni ties receive no 
reward for the material and local 
knowledge taken from them. 

This inequity is exacerbated by 
growing use of patents granting 
exclusive protection to companies 
researchers in industrialised coun- 
tries for material and knowledge com- 
ing from the developing world. Citing 
the example of patented «wi varieties 
derived from varieties bred by farm- 
ers, the report says “indigenous farm- 


ers are fin ding themselves paying for 
the aid product of their own genius”. 

The report, by Ottawa-based Rural 
Advancement Foundation Interna- 
tional (Rafi) for the UN Development 
Programme, urges changes to rules 
governing ownership of biological 
materials and knowledge about them 
Ms Sarah Timpson of UNDP says 
the UN body has begun consulting 
indigenous peoples' organisations on 
strategies to preserve traditional 
knowledge and prevent exploitation. 

The report cites more than 100 
examples of developing country con- 


tributions to agriculture, food process- 
ing and pharmaceutical development 
in the rich nations. 

They include Bayer’s synthetic aspi- 
rin, the most widely used drug in the 
world, which is derived from a tradi- 
tional Arab medicinal plant. Spiraea; 
steroid hormones made by Syntax 
derived from barbasco roots from 
Mexico; and a streptomycin-based 
antibiotic isolated from Argentinian 
soil which Mitsubishi has pa tent e d as 
an additive for animal feeds. 

Admitting that piracy by develop- 
ing countries of chemical and phar- 


HK tycoon plugs in to subcontinent 

Wu mothballs China plans and signs $19.5bn power deals, writes Louise Lucas 


T he man who has taken 
up the World Bank’s 
invitation to switch the 
lights cm in India amt Pakistan 
has been forced west by the 
prospect of d iminish ing 
returns in east Asia. 

In a matter of weeks, Mr 
Gordon Wu, one of Hong 
Kong's more flamboyant 
tycoons, mothballed his; plans 
to build and manage power sta- 
tions across China and signed 
agreements for power projects 
in India and Pakistan worth 
about $lfl.5bn over ten years. 
He is already scouting the 
Indian subcontinent for more. 

The Harvard-educated busi- 
nessman had China firmly in 
his sights last year when he 
raised HK65.94bn (5769m) with 
the flotation of the Consoli- 
dated Electric Power Asia 
(CEPA). This company, which 
was hived off from Mr Wu’s 
flagship company, Hopewell 
Holdings, was sold to investors 
as a play on C hina 's massive 
power requirements - a need 
on which China will spend 
some $120bn over the next 
decade to satisfy. 

At the time of its December 
listing, CEPA boasted two 
China power plants, Shajiao B 
and Shajiao C, the latter of 
which is stQl under construc- 
tion, and letters of intent for 
another 14. Of more impor- 
tance to the investors who 
swooped on the new scrip, 
CEPA had the visionary Mr 
Wu and his “cookie cutter” 
approach to power plants - 
building a string of generators 
with the same design, thus 
bringing economies of scale, 
across China. L. 


Mr Wu favours the buQdnp- 
erate- transfer (BOT) model 
whereby CEPA builds the 
plants, operates them for a 
specified period, and then 
transfers ownership back to 
the government. The anxieties 
of government (especially com- 
munist governments) are 
allayed by the fact that owner- 
ship ultimately returns to the 
state, while the company bene- 
fits from playing a raft of mon- 
ey-making roles; civil engineer- 
ing, project development and 
project management. 

However, these plans were 
scuppered earlier this year 
when it became clear China’s 
reform-minded officials were 
starting to baulk at foreigners 
ex t rac tin g robust profits from 
strategic industries and that a 
cap was to be placed on 
returns which could be netted 
on power projects. . 

tn rtip absence of eiesn- guide- 
lines from Raffi n g , bankers «wd 
other industry players (not 
least those at CEPA) are still 
wneiflflr as to the nature of this 
cap, which initially stood at 12 
per cent but is now believed to 
have been lifted to 15 per cent 
For example, it is not clear 
whether the . rate of return 
referred to is on equity or capi- 
tal employed. 

CEPA promptly switched 
tack, and this year prefaced 
the deals in the Indian subcon- 
tinent with two in the Philip- 
pines and Indonesia. It is still 
pursuing a project in China, in 
the southern coastal city of 
Shenzhen, for four units of 660 
MW. Mr Wu hopes to have a 
power purchase agreement 
from the Shenzhen authorities 


by early next year. 

But the China experience 
has induced a wariness amnng 
the company’s managemenL 
Although the India and Pakis- 
tan projects announced earlier 
in the month triggered a share 
price rally, directors are taking 
an un typically low-key stance. 

For all the potential of the 
latest projects, they remain at 
the memorandum of under- 
standing (MoU) stage. As one 
CEPA executive says: “An 
MoU could stay an MoU for- 
ever. This is what we have in 
China. We have lots of letters 
Of intent, which are Similar to 
MoUs elsewhere, and they are 
just paralysed and have been 
for almost a year." 

The India connection was 
brought about through the 
World Bank, and followed a 
visit in which Mr Wu put for- 
ward an initial proposal to 
build power stations. The 
World Rank had been ur ging 
CEPA to assess power station 
projects for some time, accord- 
ing to the company, but it post- 
poned action because of the 
anticipated workload in China. 
Last month the Invitation was 
taken up in style: an entire 
team of technical and commer- 
cial chiefs met Mr P.V. Nara- 
gimhfl Rao, prime minister, as 
well as representatives from 
the ministries of finance and 
power, and an MoU was issued. 

However, CEPA is upbeat 
about opportunities for the 
power industry in the Indian 
subcontinent On a per capita 
ha sis, India has a Still lugger 
requirement than China. 

In India, where there are a s 
yet no stated guidelines, CEPA 




We higher rate of return 

reckons it can squeeze an 
internal rate of return of dose 
to 20 per emit, while in Pakis- 
tan the limit has been set at 18 
per cent The projects in Shen- 
zhen, Ind ones i a and the Philip - 
pines are also erpented to give 
returns over IS per cent 

Assuming the proposed 16 
units of 660 MWs in India go 
ahead funding will com e from 
a variety of sources, including 
the intemiiHniiai Finance Cor- 
poration, which is affiliatfd to 
the World Bank, commercial 
hank loans and global equity 
markets • ultimately, each of 
the company's power projects 
is likely to be spun off as a 
separate listing, creating a 
string of CEPA subsidiaries 
and raising additional funds 
from shareholders. 

At this stage, funding is a 
long way from being one of 
CEPA’s most pressing con- 
cerns. The nature of power 


plants menng spending wifi be 
spread over 10 or 12 years. 
Meanwhile, there is the 
HK$5.94bn raised from the 
CEPA flotation - much of 
which was earmarked for the 
China projects. 

That listing was Itself contro- 
versial. as it in effect stripped 
the China and Philippines 
power station projects out of 
Hopewell Holdings, which was 
then on a price-earnings ratio 
of around 16 times (slightly 
higher than the Hong Kong 
market as a whole) and sold 
them back to investors pack- 
aged as CEPA, cm a p/e ratio of 
around 39 Hmwi (tn part a mea- 
sure of the time lag before the 
power plants could start to pro- 
duce big earnings). 

However, the Hong Kong 
market at that time was awash 
with both liquidity and b ullish 
sentiment, especially fix- any- 
thing with the word “China” 
prominent in the prospectus, 
and the HK$L17bn public ele- 
ment of the ramfmw»H offering 

was 45 times oversubscribed. 

CEPA blames itself for fail - 
ing to communicate better 
with these shareholders now 
that they complain they 
bought into a China stock that 
failed to materialise . Mr Ricky 
Lau, assistant to director Law- 
rence Ifiao, says the reasons 
for CEPA’s recast focus were 
not well communicated to 
investors, but he believes this 
has now been rectified. 

Moreover, he says, the Shen- 
zhen project is still very much 
on the cards, a testimony to 
the growing autonomy of pro- 
vincial governments in the 
southern coastal provinces. 


maceutical patents may cost the 
industrialised world as much as 
62.71m a year, Rafi says this is far 
outweighed by the amount the Third 
World would be owed if it received 
just 2 per cent in royalties for global 
seed industry sates or J15bn, and 20 
per cent for pharmaceutical products 
derived from indigenous plants. 

* Conserving indigenous knowledge: 
Integrating two systems of innovation. 
Available free from UNDP, Division of 
Public Affairs, One UN Plaza, New 
York, NY 10017, tel (212)906 5322 fa 
(212)9065367. 


Textile 
exporters 
hit at pace 
of reform 


First steps in a 10-year 
p rogr amm e to liberalise world 
textile «nd do tting marke ts 
agreed in the Uruguay Round 
of global trade talks will do - 
little to open rich-country 
markets. Third World textiles 
exporters said yeste rday, 
writes Frances Williams. 

Tbe International Textiles 
and Clothing Bureau, which 
groups 21 developing country 
exporters, noted “with 
dismay” that the three biggest 
textile and clo thing importers 
- the US, European Union and 
Canada - had decided to start 
with products not currently 
subject to import restraints. 

They “have hardly 
liberalised any significant 
MFA restriction on any 
developing country, 1 ’ the 
bureau said, referring to the 
Multi-Fibre Arrangement that 
now allows quotas on most 
Third World textiles and 

clothing wpnr fai tn ftp 

I n dnat riaHaad 

• Under the Uruguay Round 
accord, MFA importers mist 
bring 16 per cent of textiles 

and rln thing tr ade under 

normal world trade rules next 
January and another 17 per 
cent in January 1998. 

The bureau calculates that, 
with more than a third of US 
and EU textile and clothing 
imparts now unrestricted, they 
would be able to delay real 

liberalisation until Hip third 
stage of tiie MFA phase-out to 
seven years’ time. . 


WORLD TRADE DIGEST 

Genentech loses 
patent suit 

A patent infringement suit filed by US biotechnology company 
Genentech against Sumitomo Pharmaceuticals, a unit of Sumi- 
tomo Chemical, has been rejected by a court in Osaka, accord- 
ing to Sumitomo. Genentech filed the suit in 1989 alleging 
Sumitomo copied the wmp genetic engineering techniques 
used to develop a tissue plasminogen activator (TPA) used to 
treat heart attack patients. 

The court said techniques used by the two companies were 
not Identical and It did not constitute a patent infringemen t 
Sumitomo said it was unable to provide details of the ruling. 
The court and Genentech in Japan declined comment. 

The controversy concerns amino add sequences used to 
produce TPA by Genentech and Sumitomo. Sumitomo said its 
TPA was developed by Sumitomo Itself before Genentech's 
genetic engineering techniques were made public. In 1992, 
Genentech won a similar suit against the Japanese company 
Toyobo over the same product. The court ordered Toyobo to 
stop producing its TPA. Reuter, Tokyo 

Venezuela, S Korea in iron deal 

South Korea’s Hanbo, an important steel producer, has signed 
a letter of intent with Venezuela’s CVG heavy industry group 
covering a $400m investment in new facilities fix producing 
concentrated iron ore for export Mr Alfredo Gruber, president 
of the government-owned CVG (Corporadon Venezolana de 
Guayana), said the two companies will study the construction 
of two plants in Venezuela, a $100m installa tion for concen- 
trating iron ore and a 6300m facility for converting the concen- 
trated ore into pellets. 

Venezuela, which has large reserves of iron ore, has been 
building its export capacity for pre-reduced iron ore in the 
form of briquettes and pellets. Sivensa, tbe country’s largest 
private steel producer, is already the world’s largest producer 
of hot briquetted iron. Joseph Mann, Caracas 

Wartsila in Jamaica power pact 

Finland’s Wartsila Diesel Development is building a $96m 
floating power plant in southern Jamaica, and will sell the 
power to the national grid's state-owned operator. Construc- 
tion of the 72MW plant begins next month and is scheduled for 
completion in September next year. The plant will be managed 
and the power sold by Jamaica Energy Partners, a WartsDa 
subsidiary. An explosion at the island’s main power plant in 
June destroyed 120 MW of capacity, about a quarter of the 
island’s needs. Canute James, Kingston 

Intel in China accord 

A unit of US diipmakw Intel has si gnal a co-operation pact 
with Jitong Communications an information and teiemm ven- 
dor under China's gi«*mniwi ministry. Under the memoran- 
dum of understanding, signed by Intel Architecture Develop- 
ment of Shanghai. Jitong wOI open an exhibition centre in 
Beijing to show Intel networking and personal conferencing 
products this year and later will be contracted as an author- 
ised dealer for those products. Intel indicated the Jitong pact 
would lead to lucrative contracts in China’s rational data 
network development. 

■ China hag sealed hank an order that all fixesgn-fimded 
companies must set up state-controlled trade unions by the 
end of the year, but said those companies in flourishing 
coastal areas must still meet the original deadline. C hina ’s 
catenet decreed in June that every fbreign-owned or foreign- 
funded enterprise in C hina had fn eK iahHsh an affiliate vf the 
federation before 1995. Reuter, Beijing 



i 



FINANCIAL TIMES 


FRIDAY OCTOBER 


2S 1994 


NEWS: AMERICAS 


Gallup poll shows president’s fortunes recovering as vote nears 


Clinton rating gives 
boost to Democrats 


By Nancy Dunne 
hi Washington 


US Democrats yesterday had 
some good news in their strug- 
gle to retain control of the US 
Senate and House in hotly con- 
tested mid-term races across 
the country. 

A new Gallup poll showed 
President Bill Clinton's 
approval rating rebounding by 
8 points to 48 per cent. How- 
ever, it is unclear whether this 
will translate into support for 
Democrats on November 8. 
Many have been trying to 
avoid the president during 
their campaigning. 

In New York state, support is 
slipping for Mr George Pakalti, 
r unnin g to unseat Governor 
Mario Cuomo. Before leaving 
for the Middle East Mr Clinton 
campaigned hard for the gover- 
nor. who got another boost 
from the endorsement earlier 
this week of New York City's 
Republican mayor Rudolph 
Giuliani, who is unhappy with 


his own party's candidate. 

In Massachusetts. Senator 
Ted Kennedy, in the tightest 
race of his 32-year Senate 
career, surged ahead of his 
rival Mr Mitt Romney after a 
television debate on Tuesday. 

Meanwhile in California, 
support has been ebbing for a 
controversial anti-immigration 
initiative, strongly supported 
by Republican Governor Pete 
Wilson and Congressman 
Michael Huffington. Both are 
in tight contests, Mr Wilson to 
keep his post and Mr Huffing- 
ton to move to the Senate. 

Proposition 187, the so-called 
“Save Our State" provision, 
will be on the California ballot 
According to an independent 
poll published by the San Fran- 
cisco Field Institute, support 
for the measure has dropped 
from 64 per cent in July to 53 
per cent. 

Immigration has become a 
“hot button" political issue in 
California and Florida. But 
many voters appear to believe 


Proposition 187 goes too far. It 
would deny non-emergency 
healthcare and social services 
to illegal immigrants and pro- 
hibit their children from going 
to California schools. 

Mr Clinton has spoken out 
against the law, as has Mr Jack 
Kemp, a popular Republican 
conservative. Mss Janet Reno, 
attorney general, said yester- 
day it would probably he found 
to he unconstitutional. 

“It doesn't make sense to 
turn school teachers and 
nurses into border patrol 
agents," she said. “It doesn't 
make sense to kick kids out of 
school or not give them immu- 
nisation. " 

Mr H uffing ton yesterday con- 
tinued a published report that 
he had employed an illegal 
immi grant as a nanny for five 
years, even after he was sworn 
in as a congressman in 1993. 
Two appointees for attorney 
general in the early days of the 
Clinton administration were 
forced to withdraw their nomi- 



Govemor Mario Cuomo (left) has been boosted by the backing of 
New York City mayor Rudolph Giuliani ap 


nations because of similar 
accusations. 

This was good news for Sena- 
tor Dianne Femstein, Mr Huf- 
fington's opponent, who has 
been moving up on him in the 


polls. Yesterday a spokesman 
for the Republicans accused 
Mrs Feinstein of the same vio- 
lation. It was denounced as “an 
outright lie" by Mrs Feinstein's 
campaign manager. 


Tax vote turns off Philadelphia suburbs 


George Graham on an account which Montgomery County’s wealthy aim to settle 


Even before 

\ Congresswoman Mar- 
. (A. \ jorie Margolies-Mezvin- 

sky cast the 218th and 
deciding vote for Presi- 
JjgSgJ? dent Bill Clinton's bud- 
get in 1993, she was the 
Republican party's top 
fSfiP target for the November 
TCiiJwQfir 8 congressional elee- 
tions. Two years ago, 
she became the first 
US MID-TERM Democrat since 1916 to 
ELECTIONS represent her generally 

Novembers conservative district in 
Montgomery county, 
west of Philadelphia, winning by just 
1,373 votes. But “the 218th vote" for a 
budget that raised taxes on high 
incomes seemed sure to doom her in 
these wealthy Philadelphia suburbs, 
where registered Republicans outnum- 
ber registered Democrats two to one. 

Sure enough, Ms Margo lies- Mezvin- 
sky is trailing in her battle for re-elec- 
tion. But she is ecstatic about a local 
opinion poll that shows her winning 32 
per cent of the vote against 39 per cent 
for Mr Jon Fox, the Republican county 
commissioner whom she defeated in 
1992 and who is her opponent again this 
year. 

"I should be 40 points down," she said 
after a raucous public debate with Mr 
Fox and two independent candidates 


near the county seat of Norristown this 
week. 

The results show that even in the 
most hopeless of districts a good Demo- 
cratic candidate with a strong cam- 
paign can stay within reach. They also 
show that, despite the Republicans' con- 
fident predictions that they are on the 
verge of taking over both the Senate 
and the House of Representatives, the 
Democrats' weakness is not the Repub- 
licans' strength. 

“I voted for Marjorie last election and 
she was a total letdown. She didn't rep- 
resent me on any of the issues 1 was 
concerned about," complains Mr Chris 
Zabala, who was particularly outraged 
by her vote to ban assault guns. 

But Mr Zabala plans to vote for the 
Libertarian candidate. Mr Lee Hustead, 
who wants to abolish most of the US 
government, starting with the Federal 
Reserve, the Department of Health and 
Social Security and the Department of 
Education. 

"Republicans and Democrats - I’ve 
had it with them," he scoffed. 

Mr Bob Sambrick of Norristown also 
plans to vote Libertarian. Tm looking 
for a candidate that’s going to be for the 
people, and I haven’t found one yet I’m 
going Libertarian - any other vote 
except Republican or Democrat," he 
said. 

Yet the howls of anger against the 


political status quo seem unlikely to 
translate into solid political results. 

There are surprising numbers of 
self-proclaimed Libertarians on the 
streets of Norristown or Conshohocken, 
old industrial towns along the Schuylk- 
ill river with many of the problems of 
urban decay faced on a larger scale by 
nearby Philadelphia, but more scientific 
polling shows Mr Hustead winning just 
4 per cent of the vote. 

Nevertheless, 22 per cent of those 
questioned in this week’s poll for the 
KYW radio and television stations said 
they were still undecided, and 40 per 
cent of those who expected to vote for 
Mr Fox were still not certain they 
would do so. 


I n a surprisingly large number of 
districts across the country. Repub- 
licans have chosen candidates who 
are poorly positioned to exploit the 
Democrats* weakness. 

Some, like Mr Fox, are professional 
politicians ill-equipped to capitalise on 
voters' general frustration with politics 
as usuaL Ms Margolies-Mezvinsky’s 
television advertisements hit hard at 
the fact that Mr Fox has run for office 
10 times in the past 15 years, and has 
run for four offices in the past four 
years. 

Others, like Mr Rick San to rum, the 
Republican congressman who is trying 


The National Rifle Association’s 
endorsement of Mr Fox carries more 
weight further out in semi-rural areas 
like Skippack and Whitpain, where 
walled condominium housing develop- 
ments with guards at their gates are 
sprouting among the horse paddocks 
and pumpkin fields. 

But Ms Margolies-Mezvmsky still 
faoas an uphill struggle if she is to 
confound the Republican congressmen 
who chanted "Goodbye Marjorie" as she 
cast the “218th vote" for Mr Clinton's 
budget last year. 


Prudential Securities settles fraud charges 


By Patrick Harverson 
in New York 


Prudential Securities 
yesterday concluded as agree- 
ment with US government 
prosecutors to settle charges 
that it defrauded hundreds of 
thousands of investors in the 
1980s who bought high-risk 
limited partnerships from the 
Wall Street firm. 


The investors claimed that 
they were sold the partner- 
ships by Prudential Securities 
brokers who did not Inform 
them folly of the risky nature 
of the investments, many of 
which subsequently soared 
leaving investors nursing bil- 
lions of dollars in losses. 

Prudential has already 
agreed to pay compensation to 
the investors. Yesterday the 


firm agreed to deposit another 
S330m into the existing settle- 
ment fond, and the overall 
cost to the Ann of the scandal, 
including legal fees, is 
believed to have topped Slbn. 

Under the terms of yester- 
day’s deal, Prudential has 
agreed to continue to co-oper- 
ate with the government over 
settlement of investors’ 
claims, and has admitted 


wrongdoing. In return, federal 
prosecutors agreed to dismiss 
criminal charges against the 
firm if Prudential Securities 
refrains from similar viola- 
tions for the next three years. 

Prudential Securities also 
agreed to take a number of 
steps to improve its internal 
supervisory procedures. 
Including appointing a new 
outside director to the firm’s 


board who will act as an 
ombudsman and provide quar- 
terly compliance reports to the 
board’s audit committee and 
the US government The long- 
running scandal at Prudential 
Securities has cost the firm 
dearly. Aside from the money 
spent on legal fees and inves- 
tors' claims, over 1,000 of its 
best brokers have defected to 
other firms. 


US deaf 
to Cuban 
pleas on 
sanctions 


By Pascal Fletcher in Havana 


to unseat Mr Harris Wofford, Pennsyl- 
vania's Democratic senator, are suffi- 
ciently extreme in their views to alien- 
ate a good number of voters in the 
middle. While Mr Santorum’s opposi- 
tion to even the most minimal controls 
on assault guns may play well in parts 
of the state, he stands well to the right 
of Republicans who have in the past 
won statewide elections in Pennsylva- 
nia, such as Senator Arien Specter. 

In Montgomery county, too, the two 
candidates are divided by gun controL 
Ms Margolies-Mezvinsky’s support for a 
ban on assault guns wins her votes in 
wealthy suburbs like Narberth and 
Bryn Mawr, clustered along the Main 
Line railway into Philadelphia, and 
among Republican women who were 
crucial to her victory in 1992. 


Cuban demands for 
| Washington to start unravell- 
ing US transport, financial and 
trade sanctions against the 
| island fell on deaf American 
ears during direct talks in 
I Havana thi s week on immigra- 
tion issues. 

In a tactic that clearly exas- 
perated the Cubans, the US 
firmly stonewalled all Cuban 
efforts to make the embargo an 
issue at the talks, which 
reviewed a September 9 bilat- 
eral immigration accord. 

“I don't see how you can 
really proceed to an expanded 
programme of normal immi- 
gration if you have reduced 
flights and other restrictions,” 
said Cuba's chief negotiator, 
Mr Ricardo Alarcftn. He was 
referring to curbs on flights 
a nd d ol lar remittances to 
Cuba introduced ou August 20 
by President BUI Clinton to 
tighten Washington's embargo. 

The US wants Cuba to intro- 
duce political reforms, such as 
legalising opposition parties, 
and to improve human rights. 

The talks in Havana ended 
inconclusively on Wednesday 
night after three days. Both 
delegations said they were sat- 
isfied with the progress made 
in some areas, such as the US 
commitment quickly to intro- 
duce accelerated visa proce- 
dures to grant a minimum or 
20,000 entry visas to Cubans 

naf-h year. 

The US delegation leader, Mr 
Dennis Hays, said Washington 
had reinforced its consular 
staff at the US Interests Sec- 
tion in Havana to speed the 
visa processing. 

Mr Alarcdn said the talks 
had identified some problem 
areas that still needed to be 
resolved. He gave no details 
but differences had emerged 
during the discussions over 
exactly how to deal with 32,000 
Cuban refugees sheltering at 
US safe havens at Cuantfinamo 
Bay in eastern Cuba and in 
Panama. 

Washington has said toe ref- 
ugees, who fled Cuba in boats 
and flimsy rafts In August and 
September but were barred 
from entering the US, can ben- 
efit from the expanded visa 
opportunities, but only If they 
return home first 

Both sides were clearly anx- 
ious to avoid any moves that 
would trigger a repeat of the 
dramatic refugee exodus halted 
by the September 9 accord. 

Meanwhile, Wednesday's 
overwhelming but widely 
expected United Nations Gen- 
eral Assembly vote against the 
US economic embargo on Cuba 
was being hailed by the 
Havana government yesterday 
as a diplomatic triumph. 

It was the third consecutive 
motion of Its kind by the world 
body. It was passed by 101 
votes in favour and two 
against, those of the US a nd 
Israel There were 48 absten- 
tions. 

“The vote is a reminder 

to the Clinton administration 
of just how isolated it is in this 
policy,” Mr Alarcdn said. 


AMERICAN NEWS DIGEST 


Travel agents 
row diffused 


The anti-trust division of the US Department to 

announced an agreement which would end a Ow®* ** 
agents to boycott airlines, car rental agencies ana otnerser 
vice providers which do not agree to pay specific Jo™*® 
commission levels. The Association of Retail Travel. Agents, a 
group representing 2,000 travel agents, had adopted a set or 
“objectives” which included minim um commission levels ana 
other demands, according to the Justice Department. The 
association said it would cease doing business with travel 
providers who did not agree to the "objectives." 

The Justice Department, which instituted legal action 
against the proposals, filed a proposed settlement in a Virginia 
court this week which would force ARTA to drop the threats 
and require it to conduct periodic reviews of anti-trust require- 
ments with its officers and directors. ... 

Ms Anne Bingaman, head of the anti-trust division, saia: 
“Trade associations of competitors can and do serve many 
useful pro-competitive purposes, but they may not act as joint 
bargaining agents for their members to coerce suppliers or 
customers.” In the US travel agents are paid commissions by 
airlines, hotels, car rental companies, cruise lines and other 
travel service providers. Nancy Dtrnne, Washington 


Overseas forces to be cut 


The US will end or reduce military operations at an additional 
27 facilities overseas, mostly in Germany, as a part of continu- 
ing post-Cold War defence cuts, the Pentagon said yesterday. 
The cuts are at 24 sites in Germany, two at Lajes Field in 
Portugal's Azores islands and one at a radar site in Iceland, 
according to the announcement 
The announcement of 21 closures and six reductions brought 
to 871 the number of US installations in Europe where 
operations are being ended, reduced or placed ou stand-by 
status. The latest reductions will affect nearly 2,000 US mili- 
tary personnel 900 US civilian employees and 1,700 local 
workers at the 27 facilities. Reuter, Washington 


IMF, World Bank reform talks 


The House Banking Committee and its subcommittee on inter- 
national Institutions yesterday sand they would host a meeting 
of foreign parliamentarians on reform of the World Bank and 
International Monetary Fund. The parliamentarians invited on 
November 21 will be those who oversee the international 
institutions in their own legislatures. Acceptances have been 
received thus for from the UK, Ireland, France, Germany. 
Argentina, Costa Rica, Venezuela, Canada and Australia. 

Mr Michael Bruno, chief economist at the World Bank and 
Mr Jeffrey Sachs, Harvard economics professor, will be 
included an a panel of experts invited to discuss current 
efforts to open the IMF and World Bank to public scrutiny. 
The meeting will also consider the institutions' effectiveness, 
particularly in alleviating poverty. The reform effort has been 
led in the US by Congressman Barney Frank, a Massachusetts 
Democrat, who has pushed through legislation requiring US 
executive directors to make a borrowing country's observation 
of international labour standards a lending condition. Nancy 
Dunne. Washington 


Haiti election delay likely 


Elections of more than 2,000 state and local officials originally 
planned for December will probably be delayed until January. 
Mr Louis Dejoie, Haitian Commerce Minister, said yesterday. 
Mr Dejoie, head of the centrist PAIN party, said there would 
be no time to organise and plan the balloting for mayoralties, 
local councils, all 83 members of the Chamber of Deputies and 
nine of the 27 members of the Senate. 

“I doubt they can be held in December," Mr Dejoie said 3fter 
talks with President Jean-Bertrand Aristide and other political 
leaders. "They don’t have the time put things together." Mr 
Dqjoie and heads of 16 other political parties met the president 
at the National Palace yesterday. A further meeting is sched- 
uled for November 3. R enter, Port-au-Prince 


Chretien warns of break-up 


Canada could fall apart as a country if Quebec votes for 
independence in a referendum next year, according to Prime 
Minister Jean Chrftien. Mr Chretien has in the past tried to 
Tpiphnisp the potential fallout if the separatist government in 
French-speaking Quebec wins a referendum on independence 
from Canada promised before the end of next year. 

“Canada will have a big problem to survive," Mr Chretien, a 
native French speaker, said in an interview broadcast late on 
Wednesday from Vancouver. The separatist Parti Quebecois 
won the provincial election In Quebec in September, but with 
less than half of the popular vote In the Interview, Mr Chre- 
tien also repeated his often stated belief Quebeckers will vote 
to stay in Canada. Former prime minister Joe Clark also 
warned recently that the rest of Canada could break up if 
Quebec separates. Reuter, Ottawa 


Back on its feet, Argentina casts aside its financial props 


I n seeking to explain why 
Argentina had recently 
turned down International 
Monetary Fund loans worth 
$400m, President Carlos 
Menem chose the image of a 
baby finding its feet “You've 
seen how a child is given a 
walker to help him learn to 
walk. Welt Argentina is 
already up and walking," he 
said. “We simply did not need 
these credits." 

Other commentators, how- 
ever, have speculated that 
Argentina chose to cut off IMF 
assistance In order to avoid too 
close scrutiny of its public 
accounts, particularly In rela- 
tion to the recent emergence of 
a budget deficit. 

“The withdrawal from the 
extended facility agreement, 
due to the impossibility of 
meeting the goals for the pub- 
lic sector fiscal surplus, 
revealed /brusquely for some; 
that, in the economic arena, a 
new era has begun,” says a 
recent report from economic 


Menem’s administration has certainly transformed the economy but the emergence 
of a budget deficit is causing some concern, writes David Pilling in Buenos Aires 


Argentina 


Budget surplus (Pesos bn)* 
ZO 1 


consultant Mr Rodriguez Gia- 
varini y Asotiados. 

After more than two years of 
being in the black and a 1994 
first-half primary surplus, 
excluding privatisations, of 
SSAbn, Argentina's fiscal posi- 
tion has begun to deteriorate. 
Earlier this week. Mr Domingo 
CavaHo, the economy minister, 
announced that the third-quar- 
ter primary surplus had 
shrunk to just $9.7m, repre- 
senting a deficit of $665m after 
interest payments. 

The announcement contrib- 
uted to a one-day foil of 3.15 
per cent on the Merval selected 
share index. “There are clouds 
on the horizon. What was a 
surplus of nearly $5D0m a 
month is probably going to be 
a deficit throughout the whole 
second half," says Mr Javier 
Fraga, managing director of 


the Argentine Institute of Capi- 
tal Markets. 

Much, though not all, of that 
weakening is related to social 
security spending. But Mr 
Cavallo denies that monthly 
revenue shortfalls of about 
$l80m a month - provoked by 
the recent shift of 2m workers 
from a pay-as-you-go system to 
a private capitalisation scheme 
- are to blame. 

This funding gap was bud- 
geted for, he says. What has 
come as a surprise has been a 
series of court rulings in 
favour of retired people 
demanding higher pensions. 
The court derisions, which Mr 
Cavallo believes may open the 
floodgates for thousands of 
other claims, could add hun- 
dreds of millions of dollars to 
government expenditure. They 
have also undermined the gov- 


erning Peronists' attempts to 
limi t the pensions bill, which 
accounts for nearly half the 
federal budget. 

“If this spending continues 
we will have problems," says 
Mr Cavallo, who has sought to 
curb judges' generosity by rais- 
ing the spectre of renewed 
inflation should expenditure 
get out of hand, “We have been 
using the surplus of the first 
half to finance the $600m defi- 
cit of the third quarter." he 
says, 

Mr Cavallo may find his 
efforts to put a lid on spending 
particularly difficult given that 
general elections are only 
seven months away. Provincial 
governors are not likely to 
curb their demands for exten- 
sive, voter-friendly, public 
works programmes. 

Difficulties have been com- 


pounded by a drop In the col- 
lection of value added tax and 
customs revenue, partly as a 
result of tax rebate measures 
intended to help exporters. In 
September, total tax collection 
fell by 3.4 per cent against the 
same month in 1993. 

Mr Cavallo is again unrepen- 
tant, saying that lowering pay- 
roll taxes is essential to boost 
competitiveness. "Of course it 
may look a hit risky because, 
just on a purely fiscal evalua- 
tion, it could be safer not to 
reduce tax rates and collect 
more revenue. . . . But we are 
convinced that every time we 
create a surplus there will be 
more pressure to spend it" 

Nevertheless, the combina- 
tion of falling income and 
higher expenditure has forced 
Mr Cavallo to ast Congress to 
amend the 1994 budget, 


authorising extra spending of 
91bn-$18bQ. He will also push 
for measures aimed at limiting 
future pensions payouts, forc- 
ing “an interpretation of the 
law that is in line with what is 
Jeasible from a financial point 
of view". 

Says Mr Daniel Artana, eco- 
nomic consultant at the Foun- 
dation for Latin American Eco- 
nomic Investigation: “It is the 
first time that Cavallo has ret- 
roactively changed the budget 
This is a bad sign, but he has 
little alternative." 

Mr Artana believes, however, 
that the government's difficul- 
ties are temporary and not 
structural. “We are in a more 
fragile situation than we used 
to be, especially on the fiscal 
side. But everyone tends to 
'exaggerate, including Cavallo." 

Mr Miguel Angel Broda, head 



93 

5 cxcfijdtng prreaUrotiort 
Sowx MNMry at economy 


of the Broda economic consul- 
tancy, agrees that it is impor- 
tant to keep things in perspec- 
tive. Argentina is moving from 
one of the strongest fiscal posi- 
tions in the world to a slightly 
weaker one, he says. The break 
with the IMF was almost Inevi- 
table, given that "everybody 
looking at the fiscal goals for 
1994 [a total primary surplus of 


?3Abn] knew that it was going 
to be difficult to meet the sec- 
ond-half targets." 

Mr Fraga goes one further “I 
congratulate the government 
for seeking a reasonable fiscal 
position and not the exagger- 
ated one asked for by the IMF." 

Mr Cavallo is not overly wor- 
ried by the emergence of a defi- 
cit. “We had planned a half per 
cent surplus in 2994, but now 
we think that we will have a 
balanced budget for the year." 

Mr Menem, too. displays con- 
fidence. "We have only 
received congratulations from 
the IMF." he says. “We are 
now a country that is growing, 
pro duci ng and progressing.” 

Certainly, few would dispute 
that Mr Menem's administra- 
tion has successfully hauled 
the country out of the eco- 
nomic ditch of instability and 
hyperinflation. But now that 
Argentina is on its feet - and 
walking on Us own - all eyes 
will be watching to make sure 
that it does not stumble. 


Where you’ll hear the words profitability siiernsi&younc 


and tax in the same sentence. 


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FINANCIAL TIMES 


FRIDAY OCTOBER 28 1994 ★ 


Opel is going global. 

So now we’re the best way 
to travel from A to B , 

3T to 

A to E , 

tntoiiJ, 

a to p , 

I to 
to Wfi , 

and to a&fc . 


Wherever your travels take you, don’t 
be surprised when you see an Opel. 

Because Opel-developed cars are 
now being made and sold throughout 
Eastern Europe, Africa, Asia, and 
Central and South America as well in 
our more traditional markets (as if being 
number one in Western Europe with the 
technically identical Opel/Vauxhall range 
wasn’t enough !) 

In recent years, we’ve opened manu- 
facturing or assembly plants in such 
diverse places as the former East 
Germany, Hungary, Turkey, and Taiwan. 
A joint venture with Indonesia has just 
become operational and our plant 
in Brazil is working flat out to meet 


demand for the Opel-developed cars 
which it produces. 

In Poland, the countdown has begun 
for the opening of our new assembly 
plant there on November 5th. Looking 
further ahead, we plan to begin produc- 
tion in Mexico next year and in India 
the following year. 

Meanwhile, in Europe, we are capital- 
izing on the increasing awareness of 
Opel by synergising the name under 
which we operate. Thus, in all contin- 
ental European countries, we will be known 
as “Opel” followed by the name of the 
country e.g., Opel France, Opel Spain, 
etc. This will make us instantly recogni- 
zable to consumers everywhere,. 


and further strengthen the Opel brand 
name. 

We believe that this type of globalization 
is necessary if a major company is to 
prosper in today’s markets. 

And, of course, it all goes to show 
that top quality products and ideas will 
succeed anywhere in the world. 

Especially if those products are devel- 
oped by Opel. 



t 







Accord on N Ireland 
in doubt, says minister 


BT ready to sell cable-laying unit 


By David Owen In London and 
James Murray-Brown in Dublin 

The government yesterday 

warned it might be unable to 
agree with the Republic of 
Ireland on a document to form 
the basis of a durable political 
settlement In Northern Ireland. 

The note of caution came 
from Sir Patrick Mayhew, 
Northern Ireland secretary, as 
a senior Sinn F&in figure 
warned the peace process 
could break down if London 
insisted on paramilitary groups 
surrendering their weapons 
before agreement on political 
structures was in sight. 

Mr Mitchel McLoughlin, 
Northern Ireland chairman of 
Sinn Fein, the IRA’s political 
wing, said such a stance would 
threaten the “very fragile con- 
sensus." 

He was speaking on the eve 
of Sinn F61n’s first meeting 
with the republic's main politi- 
cal parties in the Dublin-based 
Forum for Peace and Reconcili- 
ation. 

Adopting a conciliatory tone 
in a speech in Dublin last 
night, Mr Gerry Adams. Sinn 
F6in president, said the forum 
should be used to “convince 
the unionists that they have 
nothing to fear, that peace 
need not be unobtainable, or 
impracticable and war need 


A small piece of history will 
be made in Dublin today when 
Sinn Fern, the IRA ’s political 
wing, meets the Irish Repub- 
lic's mainstream political par- 
ties for the first time as the 
Forum for Peace and Reconcil- 
iation gets under way. 

The 35-member forum will 
include Northern Ireland’s 
moderate nationalist Social 
Democratic Labour party and 
the province's small, non-sec- 
tarian Alliance party. But 
with no formal representation 
from Ulster’s majority union- 


not be Inevitable.” Sir Patrick, 
speaking in the first House of 
Commons debate on the prov- 
ince since the IRA and loyalist 
ceasefires, said he “greatly” 
hoped London and Dublin 
would reach agreement, but “it 
is not certain." 

His tone was less upbeat 
than that of Mr John Major, 
the prime minister, after talks 
with Mr Albert Reynolds, his 
Irish counterpart, on Monday. 
Mr Major said after the talks: 
“No one is dragging their feet 
and we are both confident of 
being able to reach agree- 
ment" 

Sir Patrick reaffirmed the 
UK government's readiness to 
hold preliminary talks with 
republican leaders by the end 


tsts. the forum has already 
been dismissed as a 
pan-nationalist front If there 
is to be a reconciliation it will 
be between the fractured par- 
ties of Irish republicanism, 
rather than Ireland’s two reli- 
gions traditions. Mr Albert 
Reynolds, the Irish prime min- 
ister. Is the key mover behind 
the foram. He sees a real 
urgency to rehabilitate the 
reformed hardliners of Sinn 
Fein and a danger that the 
peace process could unravel If 
this Is not achieved. 


of the year if London could 
continue “reasonably” to 
assume Sinn Fein was “estab- 
lishing a commitment to exclu- 
sively peaceful methods.” 

They would “embrace the 
republicans' proposals for 
depositing and decommission- 
ing their armaments,” he said. 

Sir Patrick sought to reas- 
sure unionists by saying there 
were no circumstances in 
which security measures 
would be reduced to a level 
below that needed to counter 
the threat of “terrorist crime." 
He hinted that the British 
army would not leave the prov- 
ince even if violence ended for 
good. “There are garrison 
towns and stations throughout 
the UK." 


By David Gootihart, 

Labour Editor 

British Telecommunications is 
expected next week to 
announce the sale of its off- 
shore cable-laying division - 
BT Marine - to Cable & Wire- 
less, one of its main interna- 
tional competitors. 

The deal is likely to have 
implications for C&Ws indus- 
trial relations policies. 

BT Marine, which employs 
about 450 people, owns six 


ships, and has a record for 
technical innovation in the 
field of cable laying; is fully 
unionised and covered by col- 
lective bargaining. But in 
many of its worldwide 
operations C&W does not 
recognise trade unions. 

The twain union in BT. Hie 
National Communications 
Union, opposes BTs policy of 
selling off peripheral busi- 
nesses and is not likely to be 
happy about a sale to C&W. 

However, C&W Is currently 


seeking to improve its image 
with trade unions as it 
attempts to establish more 
joint ventures with many of 
Europe’s national telecommu- 
nications groups, 

AH of those groups are 
strongly unionised and in 
many countries the unions 
have considerable influence 
over corporate decision mak- 
ing. Last year the Communica- 
tion Workers Union in Ireland 
lobbied hard to stop Telecom 
Eireaxm si gning a joint venture 


with C&W. Mr David Begg. the 
Irish union's general secretary, 
said yesterday that the deci- 
sion to oppose C&W was taken 
partly on strategic grounds 
and partly because of the com- 
pany's world-wide record on 
union recognition. 

A spokesman for C&W 
rejected the allegation that 
C&W was anti-union. "In 50 
per cent of our GO companies 
around the world we recognise 
a trade union or staff associa- 
tion." 



Walkers set out along Hadrian's Wall, the barrier erected by the Romans to mark the boundary both of their empire and of its 
province of Britain. The government yesterday approved plans for an 81-mile trail alongside the wall In the face of protests that a 
“pedestrian motorway” would be created through a World Heritage Site full of archaeological treasures 


Head of central bank says inflation threat is being exaggerated 

Markets reproved for pessimism 


Employers’ group worried by 
pay rises in manufacturing 


By Philip Gawith 

Financial markets are too 
pessimistic in their outlook on 
Inflation, Mr Eddie George, 
governor of the Bank of 
England, said yesterday. 

Speaking first to a financial 
markets conference in London, 
and later to a group of busi- 
nessmen in Birmingham, Mr 
George stressed the message 
that markets were exaggerat- 
ing the inflationary threat, and 
the likely interest rate rises 
needed to combat it. 

He said: “There are a 
number of reasons for suppos- 
ing that the effect of the eco- 
nomic expansion on inflation 


could be less in the present 
upswing than it has been in 
the past.” 

Analysts said the governor's 
comments suggested that the 
Bank's quarterly inflation 
report, to be released next 
Tuesday, was unlikely to con- 
tain any unwelcome surprises 
about inflation pressures in the 
economy. 

The likelihood of a rise in 
interest rates after the 
monthly monetary meeting 
between the governor and Mr 
Kenneth Clarke, toe chancellor 
of the Exchequer, next 
Wednesday would also appear 
to be reduced. 

Mr George lent substance to 


this view in his Birmin gham 
speech, delivered last night He 
said: "There are relatively few 
immediate signs that inflation 
is about to pick up strongly." 
He stopped short, however, of 
ruling out another increase in 
rates. 

Short sterling futures, which 
reflect the market's view on 
prospective interest rates, 
firmed yesterday, showing less 
pessimism about the extent to 
which rates would have to rise. 

The governor received some 
support from Mr Kenneth 
Clarice, the chancellor. He told 
parliament during question 
time: “We will be able to keep 
interest rates down ... if we 


act in good time, if our fiscal 
policy Is sound, and if we keep 
on the course that we have 
now set” Mr George's speeches 
trod a careful Une between 
stressing the Bank’s willing- 
ness to act early to curb infla- 
tionary pressures while also 
making clear that toe markets 
were too bearish in their infla- 
tion outlook. 

In his London speech the 
governor tackled the issue of 
why global bond yields had 
risen so far this year. He con- 
cluded that the “most impor- 
tant influence" had been toe 
increasing evidence of recov- 
ery and expansion in the 
industrial world. 


By David Goodhart 

The Confederation of British 
Industry, the largest UK 
employers' organisation, yes- 
terday reinforced its recent 
warnings about the upward 
drift in pay settlements. 

It said Britain was no longer 
matching the pace of efficiency 
improvements in the US and 
Germany, which are experienc- 
ing unit labour cost falls of 2 
and 3 per cent per year. 

The CBI said its research 
showed that UK manufactur- 
ing pay awards had risen to 2.9 
per cent in the third quarter of 
the year. 

The latest figure compares 


with 2.6 per cent in the first 
quarter and 2.8 per cent in the 
second, but comes against the 
backdrop of a 10 per cent-plus 
award over two years for most 
workers at toe Rover car com- 
pany and the rejection of a 7.5 
per cent offer over two years at 
Jaguar. 

Pay awards in service com- 
panies also rose slightly from 
an average of 34 per cent in 
toe second quarter to 3.4 per 
emit in the third quarter. 

But the CBI says that just 
under one in five manufactur- 
ers and one in nine service 
companies are operating pay 
freezes for periods of up to 12 
months. Mr Howard Davies, 


the CBI's director-general, 
warned: “While toe increase in 
pay awards is marginal, the 
slight upward shift over the 
last six months gives cause for 
concern." 

Productivity expectations 
suggest that unit labour 
costs are continuing to fall 
with an average increase in 
productivity of five per cent 
expected over the coming 12 
months. 

He said the latest figures 
showed the importance for 
managers of curbing the 
“upward creep" in pay awards 
in the coming year while keep- 
ing tight control of all other 
employment costs. 


Big Mac 

creators 
turn to 
humble pie 


By Richard Donkin 

One of the world’s 
companies yesterday admitted 
to making a big mistake when 
it unveiled a secret weapon to 
take on the UK’s supermarket 
chains. 

McDonalds, the hamburger 
chain that brought the world 
the Big Mac, thought it was on 
to another winner when it 
announced the new product to 
its expectant staff. 

Enter the McPloughman s. a 
cheese, pickle and salad sand- 
wich launched in central Lon- 
don three years ago. Mr Paul 
Preston, president of McDon- 
alds in the UK, said at a con- 
ference of the Institute of Per- 
sonnel and Development that 
the Me Plough man's was 
devised to compete in the cold 
sandwich market with super- 
market chains. 

Instead of applauding this 
marketing innovation, how- 
ever, staff were unimpressed. 
Mr Preston admitted: “If wo 
had done our homework we 
would have found that our 
customers didn't want the 
product and our staff were 
embarrassed even to have to 
say McPloughman's. let alone 
to bare to sell it to our cus- 
tomers." He added that if the 
company had carried out some 
market research with custom- 
ers “we would have found that 
this was not a highly desirable 
product." 

When it did survey customer 
attitudes, it found even more 
shocks were In store. Custom- 
ers. he said, told them they 
were “Loud, brash, American, 
successful, complacent, uncar- 
ing, insensitive, disciplinarian, 
insincere, suspicious and arro- 
gant" 

“We thought we knew about 
service - get the order Into the 
customer's hands in 60 sec- 
onds - that was service. Not 
according to our customers. 
What they told us we were giv- 
ing was horrifying." 

He said: “What we had failed 
to see was that our customers 
were now veterans in the 
quick service market and their 
expectations had gone through 
the roof. What was revolution- . 
ary in the 70s was ghastly in 

frliA Mrlncr QAo B 





•■i 

•‘ti 

si 

’ i 




t 


Some companies say they’re 
joining forces to make international 


network communications simple. 




FINANCIAL TIMES FRIDAY OCTOBER 2S 1994 


9 


NEWS: UK 


,v . . 

■ 1 . 1 1* 


Flagging tourist trade resorts to tea 


UK NEWS DIGEST 


Qy Michael Shapaikar, Leisure 

to*«*™* Correspondent 


Where the tourist spending comes from 


Sell Britain as a modern 
society and the Americans will 
stay away. Stress tea parties 
ra ther t han castles if you want 
to attract the Japanese. And do 
not mention the word 
“Britain" to the Irish. Urge 
them to come to England, 
Wales or Scotland 
These are scone of the con- 
clusions reached by the British 
Tourist Authority, which 
been conducting market 
research into bow to reverse 
the faH in the UK's share of the 
world tourism market 
Although a record 19.2m for- 
eign visitors ganw to the UK 
last year, Britain's share of 
world tourism earnings fell 


-Mddte&st 
£61 Oct 


Total 

■E&glgM 


Far East 
£91 2m - 


Total Europe 
E4512m 


Austra&tfNZ. 

E472m- 


Lath America 
E 1 S 3 nr . 


than one steeped in history. 
The answer was a categorical 
•no*. Americans told research- 
ers that Britain conjured up 
images of bobbies, banisters in 
wigs. Big Ben and Westminster 
Abbey - and they wanted it to 
stay that way. 

British hooliganism has 
apparently made little impres- 
sion on the US pnblic. One 
respondent said he found the 
prospect of visiting the UK 
daunting because he would 
have to be on his best behav- 


fitorth America 

£ia61m 


horn 6.7 per cent in 1980 to 4J3 Angeles, Miami and New York 
per cent in 1993. in an attempt to decide 

The authority interviewed whether it should project the 
people in Chicago, Los UK as a modem society rather 


lour. 

Research in Japan found 
that Britain’s image was too 

magraiHiw making it it diffi- 
cult to attract the growing 
number of Japanese women 
travellers. Mr Keith Beecham, 
manager of the authority's 


Tokyo office, said that in' sell- 
ing Britain to the Japanese, 
the BTA was concentrating on 
afternoon tea. 

He said: “The Japanese tend 
to associate Britain with 
heroic, masculine castles. Our 
campaign is designed to create 
a softer and more feminine feel 
- quaint country house hotels; 
green landscapes. Afternoon 
tea is the ideal vehicle." 

The authority placed a two- 
page advertisement in a Japa- 
nese newspaper inviting people 
to a British tea party. Despite 
tuning thum they would have 
to pay for this privilege, the 
authority received 18,000 
replies. It selected 1,000 win- 
ners by lottery. 


Getty Museum 
loses appeal 
over sculpture 


The Getty Museum of Malibu, California, 
yesterday conceded defeat in its efforts to 
acquire and display Canova's sculpture, the 
Three Graces, which has been held in the UK 
since the museum bought It for £7.6m (512.0m). 
Mr John Russeil. a representative of the 
museum in Louaun. said a ruling yesterday by 
the UK Court of Appeal was “the end of the 
line" because there was no right of appeal to 


the House of Lords. The court rejected an 
. . . attempt by the 

M museum to challenge a 
decision by Mr Step- 
hen Dorreil. heritage 
secretary, extending 
time for raising pur- 
chase money in the 
UK. The museum has 
been waiting since 
1989 to take possession 
of the sculpture. Suc- 
cessive ministers have 
delayed granting an 
export licence in the 
hope that the work 
' could be kept in 
- Britain. Yesterday's 
court decision opened the way for the Victoria 
and Albert Museum and the National Gallery 
of Scotland to make a matching offer. 

“We are naturally very disappointed.*' Mr 
Russell said. Everybody knows the museum 
has been treated unfairly. ' He added that the 
museum would now review its policy on the 
buying of works of art in the UK. 


Lex, Page 20 


Lloyds chief 
says bank staff 
face upheaval 


Minister backs unleaded fuel 


.tit 


By Charles Batchelor, 
Transport Correspondent 


By Richard DonJdn 


Britain's financial services 
industry is faring an upheaval 
on the scale already experi- 
enced by marnifarthm-rng indus- 
try. Sir Brian Pitman, chief 
executive of Lloyds Bank, said 
yesterday. Some 160,000 jobs 
had been, lost in financial ser- 
vices in the past five years, 
and the competitive environ- 
ment was going to become 
tougher stall, he warned. 

Banks would be unable to 
award automatic pay rises if 
they were to survive in the 
increasingly competitive mar- 
ket. He predicted further 
rationalisation among bank 
branches that was likely to 
cause unrest among employ- 
ees. “We have to be prepared 
in top management for massive 
resistance in this change," he 
said. Sir Brian was speaking at 
the annual conference of the 
Institute of Personnel and 
Development. 

“It is vital that top manage- 
ment is completely honest with 
employees,” he explained- 
"You have to dampen down 
their expectations.” Sir Brian 
said that. Jow, inflation would. 
mean low demand for loans. 
inflati on would no longer bail 


A 


out poor advances on property, 
so that banks would need to 
manage their business more 
rigorously. 

“Many people have grown 
fond of inflat ion," he said. 
“Annual pay rises »nH rising 
house juices make people feel 
good, even if they mean little 
in reality. In fut ure the only 
good reason for a pay rise win 
be an increase in a firm's pro- 
ductivity or the performance of 
an individual team." 

Widespread overcapacity at a 
time of low growth, he said, 
might produce unprecedented 
levels of competition in which 
only the most productive com- 
panies would survive. That 
would bring mormons change. 

“Having joined banking in 
the expectation of job security 
and steady career progression, 
many are now faced with 
branch network rationalisa- 
tion, job losses and general 
uncertainty,” he added. 

The Bifu trade union critic- 
ised Sir Brian. Mr Ed Sweeny, 
deputy general secretary, said: 
“Be should stop, look and lis- 
ten to what his staff and custo- 
mers are saying. The oppro- 
brium heaped on the banks 
during the last few years show 
they are out of step.” 


The government yesterday 
reaffirmed its advice to motor- 
ists to use unleaded petrol 
despite criticism from MPs. 

It also said there was no evi- 
dence that super-unleaded pet- 
rol contributed significantly to 
total levels of benzene, which 
can cause cancer, though it 
would keep Its use under 
review. 

This sets the g o ver n ment in 
conflict with the transport 
committee of the House of 
Commons and with the Royal 
OonanMan on Enviro nmental 
Pollution, which reported on 


Wednesday. Both urged bans 
cm the use of super -unleaded 
because it contains high levels 
of benzene. 

The government and the two 
reports draw different conclu- 
sions from research mto the 
impact on health of the constit- 
uent parts erf unleaded fueL Mr 
Robert Atkins, environment 
minister, said In the House of 
Commons yesterday that the 
government advised motorists 
to switch to unleaded petroL 
Those already using unleaded 
should continue to do so. 

“There is no credible evi- 
dence of any significant differ- 
ences in imigrifHifl of benzene 
between non-catalyst cars run- 


ning on leaded and premium 
unleaded petrol," he com- 
mented. 

Nor was there evidence that 
use of super-unleaded petrol 
contributed significantly to 
total concentrations of ben- 
zene. Super-unleaded com- 
prised 5 per cent to 6 per cent 

Of the marke t, an d its shar p 
was declining, he added. 

Mr Atkins said benzene lev- 
els in the UK were below the 
five parts per billion recom- 
mended by government 
experts. 

The committee of MPs said 
on Tuesday that the sale of 
super-unleaded petrol should 
be banned. 


m 


Heaviest coin may go 


Exam reform given go-ahead 


By John Anthers 


Sir Ron Dearing, the govern- 
ment's chief adviser on the 
school curriculum, yesterday 
received the go-ahead from the 
government for a sweeping 
review of the system for grad- 
ing GCSE ffcnna, taken by all 
16-year-olds in England and 
Wales. 

He has unveiled a range of 
measures to be implemented 
by the end of the present 
school year, when the next 
GCSEs are to he taken, and is 
also examining more radical 
measures for the fixture. 

The immediate measures are: 


• Ensuring that the rules for 
determining grades are dear, 
consistent and robust 

• Improving communications 
between pvainining groups. 

• Producing national sets erf 
candidates' work to help define 
grade standards in key sub- 
jects. 

• Introducing piloting of any 
major changes to awarding 
schemes. 

Sir Ron was given leave to 
investigate GCSE marking by 
Mrs Gillian Shephard, the edu- 
cation secretary, after discrep- 
ancies e m erged In the marks 
different examination boards 
required to gain B and C 


grades in mathematics and sci- 
ence. Sir Ron also suggested 
that in the longer term a 
national archive of GCSE 
papers should be set up to 
guarantee greater consistency 
in marking between examina- 
tion boards. 

The Southern Examining 
Group - one whose results 
showed a change in the propor- 
tion of B and C grades in 
maths and science - said: “We 
already have the most closely 
monitored exam system in tie 
world. But there is nothing 
wrong with taking a Rolls- 
Royce and patting an even bet- 
ter stereo system in it" 


The Royal Mint yesterday launched a consulta- 
tion programme to poll views on producing a 
smaller SOp coin and introducinga £2 coin for 
general use. The only £2 cotes now available 
are commemorative issues. More than 1,000 
organisations have been asked to comment by 
the en d of the year on changes that might 
even involve withdrawing the 50p and 2p 
coins. 

Mr Roger Holmes, chief executive of the 
Royal Mtet, said: 'The 50p coin is simply the 
heaviest coin in Europe and uses the most 
metaL But we are not making any proposals 
about it or the £2 coin as such: we are just 
looking to see what the public wants.” 


Censor delays film 


Distribution in the UK of the film Natural 
Bom Killers, directed by Oliver Stone and star- 
ring Woody Harrelson, is being held up by 
scrutiny by official censors. So far no decision 
has been taken an whether to ban the film, 
which tells the story of a couple committing a 
series of murders and then being lionised by 
the media. 


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Hie film has been showing in the US for 15 
weeks and has become the centre of a fierce 
debate, with Stone defending it as a satire on 
the media's obsession with violence. But the 
film has been blamed for “copycat” murders in 
the US and France. Mr James Ferman, 
Britain's chief censor, said the British Board of 
Film Classification would continue to debate 
the flhn even though its original UK release 
date of November 18 has had to be postponed 
until next year. “Media speculation about such 
cases is not conducive to objective decision- 
making, and the board will announce its own 
decision on the film in due course." The Irish 
Republic has banned the film without giving 
reasons. 


Media rules criticised 


Sir Frank Rogers, chairman of the European 
Publishers' Council, called for radical liberalis- 
ation of media rules in the UK which bad “the 
most regulated media in the European Union.” 
Sir Frank is also chair man of the Newspaper 
Publishers Association, the lubby group for 
publishers of national newspapers. He warned 
that outdated rules were putting publishers at 
a great disadvantage in investing in the multi- 
media revolution. 

Sir Frank was speaking at the launch of a 
study on media regulation in the UK produced 
by consultants Hydra Associates - the first of 
a series looking at the issue in a number of 
European countries. He said UK newspaper 
publishers were prevented from owning more 
than 20 per cent of a television company. Yet 
there were no special restrictions on computer 
companies, which were increasingly entering 
the media using PCs which doubled as televi- 
sion screens. 

“We are currently excluded from profitable 
areas simply because we are involved in the 
printed word,” said Sir Frank, who said he 
wanted to see liberalisation across the Euro- 
pean Union. The study argues that rapid 
changes in technology have thrown up a wide 
range of anomalies. For example, the owner of 
a newspaper controlled within an EU country 
other than the UK can buy a British commer- 
cial television company but a British newspa- 
per publisher cannot 


Scrutiny for tax system 


The Institute for Fiscal Studies has set up an 
independent watchdog to scrutinise Britain's 
tax system in response to growing public con- 
cern about the efficiency and complexity of 
recent tax legislation. The Tax Law Review 
Committee, financed by the Bank of England, 
clearing banks, leading public companies and 
City law and accountancy firms, will meet for 
the first time today. 

Its task will be to examine existing and 
prospective tax laws to see whether the system 
is working as intended. The institute says the 
complexity of recent Finance Acts has pro- 
duced a barrage of criticism. The volume of 
primary and secondary tax legislation has 
grown steeply. The 1993 and 1994 Finance Acts 
contain more legislation than was produced in 
the whole erf the first Thatch er government, 
which held power from 1979 to 1983. 

Lord Howe, the former Conservative deputy 
prime minister who was chancellor of the 
Exchequer from 1979-1983, will be president of 
the committee. 


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PROPERTY 


FINANCIAL TIMES FRIDAY OCTOBER 2S IW 

PEOPLE 


U K government pol- 
icy on urban devel- 
opment has come 
forward in leaps 
and bounds over the past two 
years. The most vivid symbol 
of the new approach Is plan- 
ning policy guidance note 6, 
issued by the Department of 
the Environment in July 1993 
and subsequently refined by 
ministerial speeches. 

PPG6 marked a new inter- 
ventionist approach after the 
market-led years of tbe 1980s. 
Mr John Cummer, environ- 
ment secretary, has since tried 
to stimulate debate about how 
the man-made environment 
can be improved. 

The latest idea vying for tbe 
minister's attention is the 
urban village: mixed -use. 
mixed-tenure developments 
where people could work as 
well as live. 

The urban village movement 
already has friends in high 
places. The idea was first pro- 
moted by the Prince of Wales 
at the end of the 1980s. A semi- 
nar to Launch a report on the 
economics of urban villages 
was held this week at St 
James's Palace. The campaign 
also has allies close to the seat 
of power. The report was spon- 
sored by English Partnerships, 
the government agency set up 
to co-ordinate urban regenera- 
tion policy. 

Many of the tenets behind 
urban villages seem to be in 
tune with government think- 
ing. Planning policy is already 
moving away from broad, sin- 
gle-use areas towards a more 
diverse approach. Urban vil- 
lages might also cut down on 
traffic by allowing residents to 
work locally. 


Idea with 


big backers 


The urban village is gathering 
support, say Simon London 


But turning the urban vil- 
lage blueprint into reality will 
require more than warm 
words. The report makes two 
main policy recommendatioDs: 

• the DoE should issue a 
planning policy guidance note 
encouraging local authorities 
to designate specific sites for 
urban villages. 

Once a site was designated, 
the hope is that land values 
would be low enough to allow 
a private sector developer to 
provide all the extras of an 
urban village - such as com- 
munity facilities - and still 
make a return on investment. 

• government funding should 
be made available where such 
intervention through the plan- 
ning system was not enough. 

In cases where urban village 
sites had negative development 
value - because they needed to 
be cleared or cleaned - up to 
10 per cent of the total cost 
might have to come from the 
public purse. 

This second proposal is 
hardly controversial. Govern- 
ment funding for urban devel- 
opment projects has tradition- 
ally been used to “lever in" 
private sector cash. Under the 
City Challenge programme £1 


of public money typically 
attracts about £4 of private sec- 
tor funds. 

Given the interest of English 
Partnerships in the urban vil- 
lages campaign, it would be 
the obvious source of funding. 
Such investment would be in 
line with the agency's stated 
desire to use its £250m a year- 
budget to take equity stakes 
rather than simply disbursing 
grants. Last week, English 
Partnerships announced an 
£8m investment in an urban 
village-style project at Barking 
Reach, Essex, promoted by 
Bellway Homes. This invest- 
ment is expected to lever in 
private-sector funds totalling 
some £24m, suggesting a fund- 
ing ratio of about 1:3. 

If changes In tbe planning 
regime allowed this ratio to be 
raised to 1:9. as the report sug- 
gests, urban villages would 
become an efficient use of 
scarce resources. 

Mr Trevor Osborne, chair- 
man of the Urban Villages 
Forum and former chairman of 
Speyhawk, the developer 
which went into receivership 
last May, takes the argument 
one stage further. “Society has 
to decide whether it is getting 


social value for money out of 
its current patterns of urban 
development," he said. “Areas 
which display urban village 
characteristics show lower lev- 
els of crime and deprivation. 1 " 

Mr Osborne envisages up to 
20 urban villages under devel- 
opment by 2000, at an average 
cost each of £10m. If govern- 
ment support was required for 
each, that would imply £L8bn 
of private sector investment 
and £200m of public sector sup- 
port. 

But using the planning sys- 
tem to promote a particular 
style of development is more 
controversial The free- market 
approach was argued this week 
by Mr Patrick Minford, profes- 
sor of applied economics at 
Liverpool University, at a con- 
ference run by the National 
Federation of Housing Associa- 
tions. Although he did not say 
so, Mr Minford might have 
noted that the grand estates of 
London's West End admired by 
the urban villages movement, 
such as Marylebone, were built 
without planning intervention. 

The message of PPG6, 
though, is that this laisser 
faire view is no longer main- 
stream in government. 

The wider danger is that the 
urban village movement 
becomes a Trojan horse, in 
which volume housebuilders 
smuggle development into 
green-belt areas. 

The report concedes that 
urban villages built on edge-of- 
town or green-field sites would 
require little or no public sec- 
tor financial support. Neither 
is it clear how many 100-200 
acre inner-city sites would be 
suitable for urban village 
development 


Evans to take his own pension 


John Evans, 59, one of 
Britain's most successful pen- 
sion fund managers, is step- 
ping down as investment man- 
ager of the £l-2bn CourtauLds 
Pension fund. 

He hands over to his deputy, 
David Brief, 41, at the end of 
the year. 

Evans, who once taught 
finance at London Business 
School, is not as well known as 
his two predecessors, Alastair 
Boss Goobey, who runs PosTel 
and Matthew Oakeshott, who 
set up Olim. a money manage- 
ment firm. 

However, he has been 
around longer than both of 
them. He first managed Court- 


aulds' pension money in the 
mid-1970s before joining Oliver 
Marriott - author of The Prop- 
erty Boom - in the property 
business. He returned in 1988. 

During his 28 years with 
Courtaulds, Evans has done 
several jobs, including that of 
chief economist. However, he 

is best known for providing 
Courtaulds pensioners with 
above average investment 
returns. 

In an industry which wor- 
ships the average, Courtaulds 
in-house pension fund has 
always been the odd man out 
Tt has prospered by not follow- 
ing the herd and under Evans 
has outperformed its peer 


group by an average of l'/» per 
cent per annum. Part of Evans' 
skill bas lain in his knowledge 
of the property market 

Evans will be 60 next month 
when he reaches Courtaulds' 
normal retirement age. How- 
ever, he does not plan to quit 
the City completely. He is 
chairman of one of Foreign and 
Colonial’s smaller investment 
trusts and also chairs Quin- 
tain, an unquoted property 
company which he hopes will 
come to the stock market at 
some stage. 

David Brief joined Court- 
aulds pension fund in 1991 
from Citibank. 

(See Observer) 


Paula Vennells 
puts on her 
running shoes 


Warburgs slims its structures 


I PD monthly index for September 


Total return (quarterly movement} % 


T he all-property rate of 
total return continues 
to decline, recording 0.5 
per cent for September, 
according to Investment Prop- 
erty Database. 

Although the published 
equivalent yield remains at 
8.1 per cent for the month, 
underlying yield trends show 
further signs of lengthening, 
with a small outward shift of 
0.01 points. This resulted in a 
fall of 0.1 per cent in capital 
values, the first time since 
May 1993 that capital growth 
has gone negative across the 
whole IPD Monthly Index, 
taking the index down to 
128.77. Rental values fell by 
0.04 per cent in September, to 
give an index value of 136.4 
for September, compared with 
136.45 the previous month. 
For the three-month period 


Indox of monthly returns Sep Charge over 
based at Dec 86 = 100 1994 last month 


All Property 220.92 
Retails 21237 
Offices 19839 
Industrials 309.03 


Sep 1992 


of the tbird quarter, the rates 
of both total return and capi- 
tal values growth continue to 
show marked decline in com- 
parison with the first and sec- 
ond quarters. 

The rate of all-property 
total return was 1.8 per cent 
for the three months to the 
end of September, compared 
with 3.9 per cent for the sec- 
ond quarter. 7.8 per cent for 
the first quarter and 8.3 per 
cent for the fourth quarter of 
1993. 

Capital value growth for 
the three months to Septem- 
ber was -6.1 per cent against 
L8 per cent for the quarter to 
June. However, rental value 
decline has continued to slow 
in the past three months, to 
record -0.3 per cent against 
-0.4 per cent for the second 
quarter. 


S.G. Warburg, smarting from a 
steep drop In profitability dur- 
ing the first half of its trading 
year, has slimmed down its 
internal manageme nt commit- 
tees. Warburg insiders say that 
no fewer than nine internal 
memos have been circulating 
infor ming staff of new report- 
ing lines and committee struc- 
tures. 

However, a spokesman says 
that planning for the changes 
had begun two months before 
the profits warning and are 
“completely unrelated to trad- 
ing conditions". 

Most significantly, the 
Investment Banking Manage- 
ment Committee has been 
trimmed from 18 to eight It 
now consists of Derek Higgs, 
chairman of S.G. Warburg and 
Co, Nick Verey, chairman of 
S.G. Warburg Securities, 
Simon Leathes, group finance 
director. Lord Cairns, chief 


executive and chairman, and 
Piers Von Simson, head of 
European operations, Michael 
Gore, chairman of Warburg 
Asia/ Pacific, Tom Wyman, 
chairman of S.G. Warburg and 
Co in the US and Rodney 
Ward, group director in the 
Hong Kong office. 

Gone are Rod Steel, head of 
information technology, Mich- 
ael Sargent, head of equities, 
Peter Twachtmann, joint head 
of fixed interest Penryn Pock- 
ney, head of market-making, 
John Trueman, head of group 
risk, David Hobbley and Mark 
Nicholls, who were joint heads 
of corporate finance, and Kent 
Haeger, head of equity deriva- 
tives. 

“The purpose is to sharpen 
the focus of responsibility and 
accountability of individuals," 
Warburg explains. “Things 
were taking too long to be 
decided." 



■ John Spence (above left) has 
been promoted to bead of 
business banking at LLOYDS 
in succession to Mike Shaw 
who becomes regional 
executive director for the 
Thames Valley and East 
region. 

■ John Lee (above right), 
personnel director, has been 
appointed to the board of 
HALIFAX BUILDING 
SOCIETY. 

■ Lynn Soper and Terence 
Wong have been promoted to 
directors of PRICOA Capital 
Group, a London-based 
subsidiary of the Prudential 
Insurance Company of 
America. 


Marketing is a fast-moving 
business but some marketing 
directors move faster than oth- 
ere. Pizza Hut (UK) put out a 
press release saying Uutt Paula 
Vennells, 35. would be joining 
as marketing director from 
Dixons, the retailer, where she 
was retail marketing director. 

Now it turns out tliat she is 
not joining Pizza Hut after all, 
but is instead going to Sews 
Sports & Leisurewear, where 
she is to be general manager 
for Sportsworld, the group’s 
out-of-town sports chain. 

Pizza Hut this week said 
they were now looking for her 
replacement but otherwise did 
not want to discuss the mat- 
ter. “We are surprised and dis- 
appointed, but these things do 
happen," said a Pizza Hut 
spokesman. 

It seems that Vennells was 
tempted by the offer from 
Sears, which came along later 
in the day on learning that she 
was scouting round for a move 
from Dixons. Scars has con- 
tacted Pizza Hut and apart 
from normal competitive dis- 
appointments, fences appear to 
have been mended. 


■ Alan Reeve has been 
appointed to the board of 
JOHN WADDINGTON with 
responsibility for the group's 
paper and board packaging 
interests. 

■ Ronald Swift, formerly uid 
of Anglian Windows and 
chairman of New England 
Windows, has been appointed 
chief executive of ANGLIAN 
GROUP on the retirement of 
William Hancock. 


David Snedden to chair Trinity International 


It has not taken long for Trinity 
International's double act to get back in 
harness. David Snedden will take over the 
non-executive chairmanship of the Ches- 
ter-based newspaper group from Simon 
Mosley on December l, renewing his part- 
nership with Philip Graf, the deputy who 
succeeded him as chief executive after 
Snedden's retirement 19 months ago. 

Snedden, 62, and Graf 47. have been 
working together since the 1970s, when 
Graf was Snedden's protege at Thomson 
Regional Newspapers. Snedden brought 
Graf into Trinity two years after he moved 
to the Liverpool Daily Post & Echo - as 
Trinity then was - in 19S2. This announce- 
ment is no surprise, as Snedden stayed on 
the board as a non-executive after retiring 
and quickly became deputy chairman. 

Trinity - formerly a close company with 


one management share held by each of 12 
directors - enfranchised its shareholders 
last year. This has encouraged wider own- 
ership, with new institutional buyers 
including the Prudential and M&G. Sned- 
den, Graf and finance director Mike Mas- 
ters - the key people in driving the change 
- now occupy the three top seats in the 
boardroom. 

Snedden now splits his domicile between 
Edinburgh and a riverside flat in Liver- 
pool’s Albert Dock complex. Since he also 
recently became chairman of Norcor Hold- 
ings, the Norwich corrugated packaging 
company which floated this year, he will 
certainly not be under-using his company 
car: the acquisitive Trinity's 50or-so news- 
paper titles are spread throughout Scot- 
land, north-west England, North Wales, 
West Yorkshire and the south-east 



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COMPANY NOTICES 


LEGAL 

NOTICE 


Insurance Companies Act 1982 (as amended) 

The Royal London General Insurance Company Limited 
Transfer of General Business 


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Cbanccry Diririaa 

INTI1E MATTKR OP 
INNKRCrrY ENTERPRISES 
PUBLIC LIMITED COMPANY 
and IN THE MATTER OF 
THE COMPANIES ACT I98i 


Notice is hereby given that application will be made on I November 1994 
to the Secretary of Stale for Trade and Industry under Pan II of Schedule 
2C to the Insurance Companies Act 19K* by Hus Royal London General 
Insurance Company Limited for approval, pursuant to Part IX of Schedule 
2C to the Insurance Companies Act 1982 (as amended), of the transfer of 
all its rights and obligations under all the policies of commercial lines 


general insurance business written by it through provincial brokers, prior 
to I November 1994, to Economic Insurance Company Limited. 



1 


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II 

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1 

III 

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MERRILL LYNCH & CO-, INC 
Fries :S 1,700^00 


BLOCKBUSTER CORPORATION 


30.000 square feel offices 
Suitable for development 
Freehold, adjacent to Civic Centre. Bridgetown 

SMITHS GORE REALTORS 

ikwcmi limited LIMITED 


: Merrill Lynch & Co., tnc, 
the work! trader m brokerage 
end laveswteoi jdvicei 
Sha re h old er's equity (1993): 
over! 5.5 billion 
: 10 yearn 

NET (operating etna paid by 
tenure) 

: S 150,605 pj. for yean 1-5 
Yield S.9 % 

5 163.50} pj. for pure 6-10 
Yield: 9.6ft 


: Blockbuster Corporation, the 
umrtd leader in home video 
(Mailer 

Star dul Jen’ equity t.1993) - 
over! 2 billion 


6,500 sqft 

approx 


: !0 yen 

NET (upciaUng o*su pail hj 

Icnanl) 

: 5 200 625 for year* I-S 
YkttUSKi 
5 224.700 far yean 6-IU 
YIekfc 10.4 * 


FREEHOLD 
FOR SALE 


NOTICE IS HEREBY GIVEN Uni tbe Order at 
the High Conn at talk*. (Chancery Division] 
dated Ox 1‘Jlh dry o t October. 1994 confirming 
OK redaction of Ihc capbal at Ibr above named 
Company firm I lOflOOjwt) to £9,1261X10 and ihc 
Minnie approved by the Conrr ihoalng with 
raped m ue capiat at tbe Company n aUcrcd 
ibe several puticaian required by Ihc above- 
marooned Acr were reganaJ by ihc Aegbtmraf 
Gmpudai an ZDUl October I TO. 

DATED lUr 2Sth day of October 1994 
Dedal IU11. Five Ctemry Lane 
Claw, tan. London EC-1 A IBU 
Reft MPK (78110 
Tel: 071 242 1212 

SWiaWrv fur ihc ibwc-narnrd C a a ga ar 


A copy of a statement setting out particulars of the proposed transfer is 
available for inspection cm request at Ihc office, of The Royal London 
General Insurance Company Limited, Roval London House. 
Middlefaoraugh, Colchesier. Essex CO l IRA on Mondays in Fridays 
between 93U am and 5.00 pm until 30 November 1994. 


Written representations concerning the transfer should he sunt to ihc 
Secretary of State for Trade and Industry, Department of Trade and Industry. 
Insurance Division. 10-18 Victoria Strom. London SW1H ONN before IN 
December 1994. The Secretary of Slate will not determine ihc application 
for approval of the transfer until alter considering any such representations 
mode to him before that dale. 


Please Reply to 
Box Number B2462 
Financial Times, 
One Southwark Bridge, 
London SE1 9HL. 


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FINANCIAL TIMES FRIDAY OCTOBER 28 


The economy: tough battle 
ahead to cut deficit 

Page II 


The belief among economists that 
Portugal could do better reflects a 
feeling that the government has 
lost its nerve. Peter Wise reports 

Europe’s 

reluctant 


tiger 


Portugal is weighing itself in 
the balance as it prepares to 
enter its 10th year as a mem- 
ber of the European Union and 
to mark a decade of centre- 
right government under Prime 
Minister Anlbal Cavaco Silva. 
The prevailing judgment is 
that reasonable expectations 
have not been f rus trated, but 
neither have dreams been ful- 
filled. 

Gross domestic product per 
capita grew from 5L4 per cent 
of the EU average in L985 to 
645 per cent at the end of last 
year. In the decade to the aid 
of 1995, Eduardo Catroga, 
finance minister, estimates the 
economy will have expanded at 
an average of 3.17 per cent a 
year, compared with 229 per 
cent for the EU and - an 
important comparison for Por- 
tugal - 2.75 per cent for Spain. 

In effect, Portugal has been 
catching up with the rest of 
Europe at a rate of 0.88 per 
cent a year above the average 
European growth rate sinre it 
joined the EU. That represents 
the strangest era of growth in 
Portugal's modem history and 
compares with a 32 per cent 
decline in GDP per capita over 
the previous decade, a period 
marked by the overthrow of 
the Salazar dictatorship In 1974 
and several years of revolu- 
tionary upheaval. 

At its present -- 


rate of growth, 
Portugal^will 
take another 40 
years to reach 


7fw ; hopes that Portugal 
would be enjoying living 
standards comparable 


, a ™ a ?S with those of most other Hi***? 1 !: 


economic 

strength of its Europeans by 2000 have hypermarkets 
ED partners, since been written off as on Sunday 
not allcwing wholly unrealistic afternoons to 


mUe closing of 
hypermarkets 


for the adjust- 
ments to be ^ ■■■ 
made after the admission of 
new member states. From an 
historical perspective, this 
seems like reasonable progress. 

The hopes raised in Portugal 
a decade ago that the country 
would be enjoying living stan- 
dards comparable with those of 
most other Europeans by 2000 
have since been written off as 
wholly unrealistic. But were 
these hopes unrealistic? Some 
economists believe Portugal 
may be missing a unique 
opportunity to attain growth 
rates of 5, 6 or even 7 per cent 
a year - becoming a sort of 
European tiger. 

“There is no reason why we 
should not achieve rates of 
growth similar to those in cer- 
tain parts of Asia," says 
Antonio Borges, a former depu- 
ty-governor of the Bank erf Por- 
tugal and now daan of Insead, 
the business school near Paris. 
“All the favourable conditions 
that we see in such fast-grow- 
ing, emerging countries are 
also to be found in Portugal.” 

These conditions include an 
open economy benefiting: from 
access to the European market 
an d a High level of public and 
private investment Portugal is 
to benefit from at least 
Es4,450bn in EU aid over the 
next six years, more than dou- 
ble the funds received from 
Brussels in the previous six 
years. 

Portugal suffers no balance- 
of-payments difficulties and 
enjoys a high level of savings 
and investment Above all, the 
labour market is flexible to a 
degree that "would be the 
dream of most other European 
countries", according to Mr 
Borges. Given these advan- 
tages, he and like-minded ana- 
lysts ask why Portugal has 
been satisfied with rates of 
growth not much different 
from those in the rest of 
Europe. 

The reason, according to 
analysts, is an economic policy 
often directed at guaranteeing 
the survival of inefficient com- 
panies and sectors, even 
though this slows down 
long-term growth and restricts 
ecflnnmlr development to the 
pace of the slowest movers. EU 
funds, they say, are freq uentl y 
applied to nyriwiaiwinff a status 
quo already proven to be inad- 
equate. As examples, they 
point to the troubled agricul- 
tural sector, to a Esl80bn aid 
package for the loss-making 
state airiinft TAP af| d to large 
subsidies for the ailing state- 
owned steel company Sider- 
urgia National. 

The conviction held by sev- 
eral economists that Portugal 


defend small 
shopkeepers. 

In a recent speech, Mr 
Cavaco Silva dismissed his 
political opponents as “proph- 
ets of doom” and “defeatists". 
He said the gnra mmgnP g deci- 
sion not to agree to trade 
union demands for a 5 per cent 
wage Increase in 1995, an elec- 
tion year, showed he was pre- 
pared to sacrifice short-term 
political Interests for the 
long-term good of the country. 
He defends PSD as a prag- 
matic party that gets things 
done, while the opposition is 
limited to rhetoric. 

Opposition voices, rhetorical 
or otherwise, have grown 
louder over the past two years, 
mainly as a result of recession. 
A period of negative growth 
from mid-1992 to mid-1994 
abruptly ended the euphoria 
Portugal enjoyed in the late 
1980s. Competition within the 
single European market and 
reform of the Common Agricul- 
tural Policy have exposed Por- 
tugal to less benevolent 
aspects of EU membership 
than previously experienced. 

Recent eruptions of discon- 
tent - from the blockading of 
the April 25 bridge in Lisbon 
because of a ton increase to the 
blocking erf a train importing 
Italian mflk - have their root 
in economic concerns caused 
by the recession. The flagging 
economy Has also drawn atten- 
tion to issues less closely 
examined during the boom 
years, such as rural poverty, 
illiteracy, «Hfld labour, slums, 
shanty towns and deficient 
P fto^aHrm and health services. 

The recession has made a 
strong impact in Portugal, but 
by international standards was 
relatively mild. GDP fen by 1 
per cent in 1993 but growth has 
already resumed and wifi reach 
LI per cen t this year and a 
forecast 2J3 to SJ> per cent in 
1995. Unemployment has risen 

but is still low at CL8 per cent 
There has been no devastating 
fonport on the financial sector, 
no property crisis, no wave of 
bankruptcies. Business confi- 
dence is weak but recovering. 

In this climate, Portugal's 
medium-term objective is to 
secure fall participation in the 
ED’S plans for economic and 
monetary union, particularly 
now that the community is 
expanding and the possibility 
of a multispeed Europe has 
been raised by politician s in 
Germany and France. An elec- 
tion next October will decide 
who leads the country towards 
that goaL Mr Cavaco Siva may 
lave lost some support But it 
is not dear that Mr Gutems 
has yet gained enough credibil- 
ity to replace him. 


FINANCIAL TIMES SURVEY 

PORTUGAL 

Friday October 28 1994 


Lisbon’s new park is a 
launching pad for innovation 

Page IV 





-■■-ztijy r v 


could do better reflects a more 
prevalent sentiment that Mr 
Cavaco Silva's government Haw 
lost the reforming zeal of its 
early years - when important 
e cono mic and legislative 
advances were mate - and has 
grown steadily more averse to 
risk and conservative. 

A view widespread in the 
badness community is that the 
governing Social Democrats 
(PSD) have lost their nerve and 
are not prepared to accept the 
political discomfort that more 
radical industrial restructur- 
ing, resulting in an economic 
leap forward, would involve. 

Antonio Guterres, leader of 
the opposition Socialists CPS), 
has a harsher view of what he 
perceives to be the govern- 
ment's deficiencies. "The PSD i 
has created a vast network of 
chants, partly through the way 
it distributes EU funds and 
other subsidies,"' he says. “The 
government inter- renea in the 
economy in the interests of 
these clients, who are political 
supporters, rather than on the 
basis of dear policies.’* 

The accusation, not unfeudl- 
iar in other countries, is ech- 
oed by smaller opposition par- 
ties to the left and right As 
evidence, critics point to the 
government's recent veto of a 
hostile bid by Banco Comardal 
Portuguds, the fifth largest 

— : . bank, for con- 

_ trol of Banco 

it Portugal Portugufes do 
lying living Atlftntico, the 
mroarable second biggest. 


six? Q-. *li a 

US-;, \¥SSiH gif •: •' 







Capital images feeding the pigeons ta a city square; binftteye view at Lisbon; Santa Justa Eft, deeigned by Ataxamte Gustave I 



ftauor un dw i 


This announcement appears as matter of record only 


September 1994 


Banco Santander, SA 


PTE 15,000,000,000 


Floating Rate Subordinated Bonds due 2004 

Lisbor + 0.15% 


Banco Santander de Negocios Portugal 

Banco Pinto & Sotto Mayor Caixa Geral de Depositos 

Banco Portugues de Investimento 
Deutsche Bank de Investimento 
Banco Nacional Ultramarino 
CISF Banco de Investimento 
Banco Totta & A 9 ores 




Santander Investment 




12 


> T TTItlCC 


FRIDAY OCTOBER =8 W 



PORTUGAL II 


P rime Minister Anlbal 
Cavaco Silva's govern- 
ment, proud of what it 
considers assiduous efforts to 
discipline the Portuguese econ- 
omy, has been stung by propos- 
als for a variable-speed Europe. 

“We don’t like the idea of a 
two- track Europe,” Fernando 
Faria de Oliveira, trade and 
tourism minister, told foreign 
bankers recently. "Experience 
shows that once you drop 
behind the pack , it’s difficult to 
catch up a gain, " 

The possibility raised in Ger- 
many and France that some 
European Union countries 
could move towards monetary 
union ahead of others is almost 
cer tain to strengthen Portu- 
gal's deter mina tion to try to 
achieve nominal convergence 
- the lowering of inflation, 
budget deficits, public debt and 
interest rates to meet the tar- 
get for monetary union set by 
the European Commission. 

Mr Cavaco Silva gave an 
indication of Ms resolve on 
this issue in October when he 
refused to agree to a trade 
onion demand for a 5 per cent 
national wage increase in 1995 
as the starting point for a five- 
year social pact between gov- 
ernment, employers and 
unions. More indulgence would 
have been understandable, 
considering the government’s 
re-election next October is Ear 
hum assured. 

But the prime minister drove 
the point home in a speech to 
trade unionists immediately 
after the negotiations on a 
social accord collapsed. "If we 
lose the battle to reduce our 
budget deficit. Portugal will 
forfeit the political weight 
required to defend its interests 
within the European Union,” 
he warned. 

Added to the risk of a multis- 
peed Europe that would inevi- 
tably leave Portugal behind the 
leaders, the government also 
has to consider that from this 
year the provision of EU aid 
from the Cohesion Fund, to 
help poorer member states 
catch up. is being linked 
directly to the attainment of 
budget deficit targets as delin- 
eated by their convergence 

p lans 

The budget deficit is the area 
of nominal convergence where 
Portugal faces the most diffi- 
culty. Good progress was being 


The economy: nominal convergence is a priority, says Peter Wise 

Tough battle ahead to cut deficit 


$o * 

’V 




SPAIN 


: r : :y- 


Oasa 


Ctuwa 


Brtwanc* 


Guknaraesy 

fc g.fi* 

vna Roei 



1 KEY FACTS 1 



91 ,949 sq km 






. Mirio Soares 


....Portugese escudo 

Average exchange rate — — 

1993 S1=i16a80 escudos 


1994 51=172.52 escudos 

ECONOMY 





1993 

1904’ 

Total GDP (Sbn)* 

74.9 

76.0 

Real GDP growth (%)* 

-1.0 

1.1 

Annual average % growth in 



Consumer prices (%). 

6.5 

5.3 

Industrial production {%)* 

-4.0 

1.7 

Share prices (%)“. 

59.6 

16.9 

Unemployment rate (%) — 

5.5 

7.1 

Discount rate (%). 

13.7 

12.0 

Government bond yield (%).._ 

18.7 

12.5 

Reserves minus gold (Sbn). 

15.8 

14.7 

1 1M4 liana m imw oxapt wtmxMnd. 2. 1BB4»gu re l t OECD tonoaL 1 

< 3 Annual pmmvagtt^wngeta and Dxanii^ iBOX aid Btptertitr 

1 


made until 1993, when the pub- 
lic sector borrowing require- 
ment jumped to 7.2 per cent of 
GDP from 3.3 per cent the pre- 
vious year. The onset of reces- 
sion in the second half of 1992 
contributed to the increase, 
but the main cause was a vir- 
tual breakdown of the tax-col- 
lecting machine. 

A deficit of 6.9 per cent of 
GDP was originally set for 
1994, but higher than expected 
tax revenue has enabled 
Eduardo Catroga, finance min- 
ister, to cut this to 6.4 per cent 
The budget for 1996 tables a 
deficit of 5-8 per cent This is 
based on forecast GDP growth 
of 2JS to 3.5 per cent up from 
LI per cent this year, and aver- 
age arrmial inflation Of 35 tO 
4.5 per cent down from an 
expected 53 per cent in 2994. 

“The 1995 deficit target is at 
the absolute top end of what is 
allowed under Portugal's con- 
vergence programme," says 
Sally Wilkinson, London-based 
southern Europe economist 
with Union Bank of Switzer- 
land. “The government could 
have set a lower target but by 
being pessimistic, they are giv- 
ing themselves leeway either 


to outperform expectations or 
to grant an interim pay 
award." Such an award would 
be made shortly before the 
election. 

Portugal is making more 
rapid progress in cutting infla- 
tion. The average annual Tate 
will have fallen by about 3.6 


points in the two years to the 
end of 1994, to 5.3 per cent The 
year-on-year rate will then be 
about 45 per cent, a 26-year 
low, and is already equal to 
that in Spain. Hie Call is due to 
a relatively strong currency, 
depressing the inflationary 
component of Portugal’s high 
level of imports, combined 
with a cut in real disposable 
income and depressed demand 
dining the recession. 

Miguel Namorado Rosa, an 
economist with Banco Comer- 
rial Portugugs, is less confi- 
dent that the government's 
more optimistic Inflation target 
for next year can be met An 
Inflation rate of 35 per cent is 
virtually unknown in Portugal 
and would be lower than that 
forecast for Spain. He sees 
str ong er domestic demand 
wage rises placing increasing 
pressure on inflation, with 
strains on industrial capacity 
beginning to be felt by 1996. 

A stable escudo and falling 
infiatinn have enabled the cen- 
tral bank to begin a cautious 
lowering of interest rates, an 
important factor In helping to 
relaunch economic recovery. 
Overnight rates are about 170 


basis points above those in 
Spain although there is no lon- 
ger an inflation difierentiaL 
Antonio de Sousa, governor of 
the P«nk of Portugal, says the 
bank will continue to be pru- 
dent in lowering money mar- 
ket rates, keeping exchange 
rate stability as its priority. 

“Reductions in interest rates 
have to be gradual and the 
market has to lead the way not 
the central bank." he says. 
“Rates are at an historic low in 
Portugal and moving down- 
wards. The tendency is what is 
fundamental for the competi- 
tiveness of companies.” Efforts 

A stable escudo and 
falling inflation have led 
to a cautious lowering of 
interest rates 


are under way, he says, to 
improve the financial reporting 
and accounting of the small 
and medium-sized companies 
that dominate the Portuguese 
economy to reduce risk premi- 
ums on bank loans and thus 
lower their financial costs. 

Concern over nominal con- 


vergence is a political and 
face-saving issue for govern- 
ments as much as an economic 
one. Vi tor ConstzLocio, a former 
finance minister and formerly 
leader of the opposition Social- 
ist Party, believes that, in eco- 
nomic terms. Portugal need 
not be overly concerned about 
the targets. He considers the 
level of public debt, 675 per 
cent of GDP in 1993, and the 
budget deficit to be compatible 
with Portugal's long-term 
effort to achieve real conver- 
gence, that is. to catch up with 
the output level of the rest of 
Europe. 

That effort will receive an 
important mipproc m Decem- 
ber when AutoEuropa, a 
Es450bn joint-venture by Ford 
and Volkswagen, begins pro- 
duction of a new multipurpose 
vehicle at a plant in Palmela, 
30km south of lisbon. Mr Con- 
stftndo estimates vehicles pro- 
duced at the factory, which has 
directly created 5,000 new jobs 
and perhaps double that num- 
ber indirectly, will account for 
about 20 per cent of Portugal’s 
total manufactured exports, 
representing 1 per cent or more 
of GDP. 



1 -r •' 

• TV- 

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v, . 


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f >; ■ JbT-JL* : J JL -.mJLJ y^. 

... •• ‘ .!• y. ■ * *' •*- 

MEMBER OFllffi USRON V 
1 ' • STOCK EXCHANGE ? ' 


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t • i ■ i j rt 

•; - ’• ■ Contact; ; ; / 
jEQUITY - Francisco 
BONDS - Pedro Ferreira 

Goit^alo Gonedgaa 


M. Valores ; . 

Sodedade Financeira de Cbnttagem.SA:V 
Telephone 351-1-3953886 Dealing 351-1-3953935 
FBX35M-3953916/7 


A p»rtof MELLO GROUP- 



BUSINESS AND INVESTMENT CONSULTANTS 
LEGAL ADVISERS, ECONOMISTS 


R. Tomas Rlbdro. 45-7° 
Ftwnc35I.IS4 80 76 


1000 LISBOA - PORTUGAL 

Fa* 351.134 85 40 


A brightly-coloured van 
polls into a remote vil- 
lage in northern Portu- 
gal and a crowd gathers. A few 
years ago villagers would have 
been lining up to buy house- 
hold wares from a travelling 
salesman or to borrow a book 
from a mobile library. Nowa- 
days, they are checking on 
their investment portfolios. 

The van, run by Banco Por- 
tngnes do AtlSmtico (BP A), is a 
motorised bank branch with a 
satellite dish on the roof that 
establishes a link with the 
bank's computer systems. Cus- 
tomers who previously had to 
travel long distances to the 
nearest branch now have regu- 
lar access to a wide range of 
banking services on their 
doorstep. 

BPA’s mobile branches 
beaming transactions through 
the sky are an indication of 
bow competition has intensi- 
fied in Portuguese banking, to 
less than a decade, the sector 
has been transformed by the 
opening of new banks, the 
admission of foreign competi- 
tors and privatisation, propel- 
ling banks towards greater 
efficiency and productivity. 

Until the mid-1980s the 
financial system was heavily 
regulated and dominated by 
state-owned banks. But liber- 


Banking: the emphasis is on greater efficiency, says Peter Wise 

Financial system on the move 


alisation is steadily forcing 
hanlrs to compete On similar 
terms to their counterparts in 
most other European coun- 
tries, in terms of both market 
and regulatory conditions. 

In particular, banks have 
been under pressure to reduce 
their financial margins, the 
difference between the rate at 
which they raise funds and 
that at which they lend to cus- 
tomers. 

Hie average margin for Por- 
tuguese hanks has fallen to 
about 3 per cent from 7 per 
cent in 1989. Miguel Namorado 
Rosa, an economist with 
Banco Comercial Portugues, 
calculates revenue from finan- 
cial m arg ins for the banking 
sector at about Es600bn in 
1994. EslOObn less than last 
year. 

Because they enjoyed high 
margins, Portuguese banks 
have tended to waive commis- 
sions and fees. Now tighter 
margins are compelling them 
to bolster fee-based income. 
But, as Alexandre Vaz Pinto, 


vice-president of Banco 
Espirito Santo (BES), points 
out: “It’s not easy charging 
higher prices in a competitive 
market Banks will have to be 
very imaginative in conciliat- 
ing service quality with com- 
petitive pricing.” 

A joint attempt by banks to 


in squeezing bank profitabil- 
ity. As a result of recession, 
credit to the private sector is 
forecast to grow by 8.5 per 
cent this year, down from 133 
per cent last year. Non-per- 
forming loans are increasing 
as a proportion of total credit 
and deposit growth has been 


Mobile branches now link with computer 
systems via rooftop satellite dishes 


introduce a 1 per cent charge 
on purchases made with direct 
debt cards in March this year 
stirred consumer associations 
to organise a 24-hour boycott 
of bank cards. A parliamen- 
tary commission stepped in 
and the charge was indefi- 
nitely suspended. Mr Vaz 
Pinto says the “plastic money” 
revolt taught banks the dan- 
gers of not paying sufficient 
attention to customer rela- 
tions. 

Economic conditions have 
added to competitive pressures 


virtually stagnant for the past 
two years. Portuguese banks 
are estimated to have lost 
EsSObn as a result of this 
year’s drop in interest rates on 
government debt securities - 
although some banks do not 
register these losses in their 
accounts. 

“This year’s combined loss 
of EslSObn from narrower 
margins and lower bond reve- 
nue is equal to the sector's net 
profits in 1993," says Mr 
Namorado Rosa. The profits of 
most large banks are forecast 


Y ou can always tell the 
pioneer in Portugal, he’s 
the one with the arrows 
in his back. This was one of 
the unofficial finding s of an 
extensive study of the Portu- 
guese economy carried out 
under the direction of Michael 
Porter. Harvard’s leading pro- 
fessor of business strategy and 
national competitiveness. 

Mr Porter's consulting com- 
pany, Monitor, was sponsored 
by 47 of Portugal’s top compa- 
nies to spend a year investiga- 
ting the country's economic 
st ren gth s and weaknesses and 
to draw up a strategy for braid- 
ing competitiveness. One con- 
clusion of the hefty report, pro- 
duced earlier this year, is that 
Portugal needs action more 
than reports. 

Other findings by Monitor, 
which mobilised 500 people for 
the investigation throughout 
1993, overturn long-held con- 
sensus views on Portugal's 
problems and how to overcome 
them. If Mr Porter's assess- 
ment tha t anti-individualism is 
hampering progress is correct, 
business leaders who are 
already beginning to act on his 
proposals will find their backs 
becoming extremely sore. 

Brushing management jar- 
gon aside. Monitor investiga- 
tors describe the hierarchies 
and bureaucracies they believe 
are obstructing Portugal’s 
development as a “cover your 
ass" attitude. Attitudes have 
been moulded by a long history 
of autocratic rulers, they say. 


Industrial policy 


Action plan for 
business 


from the despotism of the Mar- 
quis of Pombal in the 18th cen- 
tury through Salazar to a brief 
flirtation with a dictatorship of 
the proletariat following the 
1974 revolution. 

Government in Portugal is 
still too big and powerful, 
argues Monitor, saying that 
the state's capacity to bestow 
patronage through the alloca- 
tion of European Union funds 
serves to strengthen autocratic 
tendencies. Fearing reproof, 
the Portuguese shy away from 
individual initiative and take 
refuge in committees and red 


cies are important but Insuffi- 
cient in themselves to improve 
living standards, says Monitor. 
Too much concern with them 
implies overlooking the need 
for business to “achieve supe- 
rior satisfaction of consumer 
needs, cost effectively”. 

The report challenges as 
“deeply flawed” views long 
cherished by many Portuguese 
politicians and economists: the 
view that the country needs to 
build high-tech industries such 
as robotics, computers and bio- 
technology; that resources 
should be directed to sectors 


Fearing reproof, the Portuguese shy away 
from individual initiative 


200 MILLION 


PEOPLE IN 
SPEAK PORTUGUESE 

P oriuguese ts important in commerce Industry and 
diplomacy. 

Portuguese is spoken in Portugal. Brazil. Angola. 
Mozambique, Cape Vferde. Guinea-Bissau and Sao Tom£ , 
and Principe. 

The experienced team of highly qualified Portuguese 
teachers at Cambridge School can provide die fink you 
need for communicating effectively in Portuguese. 

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that we have a course to suit your needs. 


THE WORLD 


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Av. da UbenfcKte. 173- 1200 LISBOA- PORTUGAL 
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Also Oporto, Coimbra, Almada and Funchal 



tape. People at the top of com- 
panies or civil service depart- 
ments become out of touch 
because those lower down are 
reluctant to approach them. 

Because of this emphasis on 
government and institutions, 
Portugal tends to “look for sup- 
ply-side rather than demand- 
driven reforms”. According to 
Ian Smith, managing director 
of Monitor's European division: 
“The result is a tendency to 
distribute capital that no one 
knows how to use. to build lab- 
oratories that conduct experi- 
ments that no one wants, or to 
plant trees that burn down 
because formers have no incen- 
tive to care for them.” 

Portugal may be relieved to 
know it is not alone. Monitor 
believes the World Bank and 
the European Union commit 
the same sort of mistakes. The 
message that Mr Porter wants 
to get across is that individu- 
als. not Institutions, create 
change. His tenet that “firms 
compete not nations” has par- 
ticular relevance to Portugal, 
the report concludes. 

Portugal gives too much 
emphasis to macroeconomic 
issues such as exchange-rate 
policy and financial markets, it 
finds, but neglects the concrete 
concerns of Individual compa- 
nies. “That is like a tennis 
player watching the scoreboard 
instea d of the ban,” says Mr 
Smith. Macro-economic poli- 


chosen as strategic; that big 
companies should be fostered 
as engines of growth; and, par- 
ticularly, that the economy is 
dependent on too narrow a 
group of industries, such as 
agriculture and traditional 
products, mainly textiles and 
footwear. 

Monitor advises Portugal to 
focus on seven “clusters" - 
groups of interconnected 
industries - which it identifies 
as: material and metals, forest 
products, petroleum and chem- 
icals. transportation, food and 
beverages, housing and house- 
hold goods, textiles and 
apparel, and tourism. These 
sectors already account for 
almost 90 per cent of exports 
and, according to Mr Porter’s 
team, represent important 
strengths on which Portugal 
can build. 

The finding that Portugal's 


future lies in its traditional 
industries has provoked criti- 
cism that the Monitor team 
mobilised vast resources - and 
received a large fee - only to 
arrive at a conclusion that is 
plain common sense. Mr Smith 
replies that few people were 
talking common seise before 
the repmt came out but were 
discussing moving into sectors 
such as sub-micro technology, 
automobiles and jet fighters. 
“We believe we have changed 
the debate for the better." 

The government has wel- 
comed Monitor’s contribution 
to economic discussion. But 
the report has received a 
warmer response from the 
opposition Socialist Party CPS). 
“Michael Porter has made a 
reasonable diagnosis of Portu- 
gal's problems and put forward 
positive proposals for the 
future.” says Antdnio 
Guterres, the PS leader. He 
says the government, on the 
other hand, has sought to 
devalue the report 

Monitor gives Portugal eight 
imperatives for becoming more 
competitive and suggests ways 
to implement them. The recom- 
mendations are: focus on 
sophisticated and demanding 
customers; formulate a compet- 
itive strategy; increase produc- 
tivity; co-operate with suppli- 
ers, distribution channels mid 
customers; create representa- 
tive associations; build a home 
base; develop a civil society; 
and invest in human capital. 

The largest section of the 
report is on how to mobilise 
people to work for change. 
Concerned that its efforts may 
be blighted by bureaucracy. 
Monitor has left behind a net- 
work of task forces that are 
already beginning to challenge 
existing policies. “Portugal has 
a lot of very good people,” says 
Mr Smith, “It’s up Efrem to pick 
up these ideas and run with 
them." They may have to 
dodge a few arrows on the 
way. 

Peter Wise 


FT SURVEYS INFORMATION 


For details of forthcoming FT surveys, call: ■ 

089 T 446 T 0 Oy 

Cate charged.at 39jpirtriin;^ 

arid 48p/mm ^.alldther.§r»9s~;. : > *' ' 
Overseas catecs* ringTIfC 71,202 200f ;? • 


to remain close to their 2993 
level or show relatively small 
losses. The outlook for next 
year is a little brighter and 
from 1996, the level of non- 
performing loans is expected 
to stabilise. As economic 
recovery takes hold, credit 
growth is forecast to make a 
strong contribution to profits. 

BES, like several other 
banks, is investing in 
increased productivity. The 
group, which expects to have 
320 branches and 5,500 
employees at the end of 1994, 
has reduced the number of 
workers per branch from 24 to 
17 ova* the past two years. But 
the h anking system as a whole 
has an estimated 15,000 to 
20,000 workers more than it 
needs to work efficiently. 

The regulatory framework 
for banks in Portugal is also 
moving towards European 
norms. From November 1, the 
compulsory cash reserve 
requirement will be cut from 
17 per cent to 2 per cent of 
customer liabilities. A deposit 


guarantee fnnd will be in 
place by January 1995, some 
provision requirements are 
being changed and banks are 
being compelled gradually to 
cover their pension liabilities. 

Banks are concerned about 
the additional costs these 
reforms could inenr. But 
Antonio de Sousa, governor of 
the bank of Portugal, is confi- 
dent the costs and benefits 
will cancel each other out in 
1995 and that the balance will 
evolve to the advantage of 
banks over the medium term. 
The estimated Es2.200bu in 
liquidity to be released by the 
reduction of cash reserves will 
initially be absorbed by certifi- 
cates of deposit <CD) with 
maturities of two to 13 years. 

Banks will be able to use 
these CDs to make all of their 
1995 contributions to the 
deposit guarantee fund, says 
Mr de Sousa. Banks will ini- 
tially contribute a total of 
Es20bu to the fond and the 
Bank of Portugal an equal 
amount -On the benefit side, 
Mr de Sousa says a planned 
redaction in the level of provi- 
sions required to cover mort- 
gage credit will be a substan- 
tial advantage for banks. He 
also envisages extending the 
1997 deadline for banks to 
cover pension liabilities. 



I 'll. I ! . \ i. ■ Hu.- •. rt,,’ r • -Ji I j-!j. ,-v.r .1 

r-.MOHU;'* M: :: l i.-uir. -'i i LS!h'j»f 


PORTU 

GUESE 

FOCUS 


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hn«In«K wfa nnahwi im 

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• business and equities 

• the real political scene 

• the personalities in control 

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i 












FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


13 


★ 


PORTUGAL III 


Politics: Peter Wise looks at the prospects of parties in next year's election 

Premier faces hard choice 


A nlbal Cavaco Silva, Por- 
tugal's prime minister 
since 1985, is faring one 
of the most difficult derisions 
of his career. Before next sum- 
mer he will have to determine 
whether to stand again as 
prime minister in the October 
1995 election or choose the 
easier but less-appealing option 
of running for the presidency 
in 1996. 

Mr Cavaco Silva readily 
acknowledges a taste for execu- 
tive power and would prefer 
the premiership to the presi- 
dent’s limited role as political 
arbiter and constitutional 
guardian. But he has a weak 
appetite for the constraints of 
minority or coalition govern- 
ment He is likely to run as 
prime minister again only if 
convinced that his centre-right 
Social Democrats (PSD) can 
win another overall majority. 

Most analysts believe that a 
third consecuti ve m ajority will 
be within the PSD's reach by 
mid-1995 enabling Mr Cavaco 


Silva to take the gamble. Given 
the lack of a successor to 
match his electoral appeal or 
dominance of the PSD, Mr 
Cavaco Silva will have to take 
into account that his own with- 
drawal as a candidate for the 
premiership could mean the 
difference between absolute 
victory, relative victory or 
defeat for his party. 

After nine years in office, 
much of the original popularity 
of Mr Cavaco Silva's govern- 
ment has been erected. The pro- 
market reform drive of the 
early years has lost momen- 
tum. The government is 
accused by left and right of 
bestowing patronage and 
favouring political supporters. 
What the British would «»n 
sleaze is undermining confi- 
dence In the public administra- 
tion as officials investigate sev- 
eral cases of alleged 
corruption. 

But the root of the govern- 
ment’s waning popularity is 
recession. Real wages have 


fallen by more than three per- 
centage points over the past 
two years after three years of 
strong expansion and unem- 
ployment has increased by 
more than two points to 6JS per 
cent. Recent eruptions of anti- 
gov eminent discontent, from 
attacks on trucks of imported 
Spanish fish to protests against 
a bridge toll increase, are 
symptoms of underlying con- 
cerns about jobs and living 
standards. 

However, the economic cycle 
is evolving In Mr Cavaco Sil- 
va's favour, as it has through- 
out his tenure as prime minis- 
ter. Antonio Guterres, leader of 
the opposition Socialist Party 
(PS), believes Portugal’s eco- 
nomic recovery, which began 


in mid-1994, will be too slow to 
have a strong impact on dis- 
posable income before the elec- 
tion. But the government will 
undoubtedly do everything 
possible to shape the pattern of 
growth. Some businesses say 
public works and the applica- 
tion of European Union funds 
are being delayed to mariwitw 

their influence on voters. 

The PS is largely fighting the 
PSD on its own ground, promo- 
ting itself as bring more effi- 
cient at running a market 
economy. The party Socialists 
have long left behind commit- 
ments to nationalisation anil a 
high level of state intervention. 
Mr Guterres has no complexes 
about not offering a radical 
alternative. "In a modern soci- 


ety, political ruptures gener- 
ally lead to disaster," he says. 
"Policy differences are today a 
question of degree.” 

I n fact, Portuguese parties 
tend to be more to the right 
than their names indicate. 
Mr Guterres says his party rep- 
resents a synthesis of tradi- 
tional European social democ- 
racy and a left-wing liberalism 
originating in the US. The PSD 
has been described as "liberal 
with an Inclination towards 
social solidarity”. Both parties 
are strongly committed to 
Europe and, with different 
n uances , liberalisation of the 
economy. 

Education is the priority 
issue for the PS. Portugal’s 


education system Is, in the 
words of an independent for- 
eign consultant, a "national 
disgrace”. Mr Guterres believes 
the government has wasted 
extensive EU funds in profes- 
sional training because no 
overall strategy or articulation 
with the traditional education 
system was devised. More pro- 
saically, the PSD asks how the 
Socialists will fund their edu- 
cation plans. 

On economic issues, the PS 
accuses Mr Cavaco Silva of 
engineering an excessive 
appreciation of the escudo by 
imposing high Interest rates. 
Mr Guterres believes Portugal 
had the possibility of fostering 
higher growth through lower 
interest rates without compro- 


mising nominal convergence 
with the rest of the EU. He 
says that despite a tough 
exchange-rate policy, the gov- 
ernment has undermined con- 
vergence by allowing a large 
budgetary overrun in 1933 and 
that the prime minister may 
now be prepared to let infla- 
tion and public deficit targets 
slip in the approach to next 
year's election. 

Dissatisfaction with the gov- 
ernment is widespread and a 
recent opinion poll put the PS 
ahead of the PSD. But the PS 
lacks unity and Mr Guterres's 
hold over the party is not com- 
parable with the prime minis- 
ter's dominance of the PSD. 
Hie Socialist leader is in a dif- 
ficult position. For some voters 
be lacks the proven techno- 
cratic prowess of Mr Cavaco 
Silva. For others, be lacks the 
heart and emotion tradition- 
ally associated with the left in 
Portugal. Several analysts 
believe he may be able to pre- 
vent Mr Cavaco Silva from 


winning another overall major- 
ity but will fell short of bis 
objective of winning a clear 
majority for the PS. 

One man who may not be 
sorry if no party gains an abso- 
lute majority is Mario Soares, 
the president and a former 
Socialist leader. He has ques- 
tioned whether single-party 
majority governments are the 
most favourable for Portugal. 
It was one or the provocative 
statements he appears to relish 
and which are often inter- 
preted as thinly-veiled attacks 
on the government. Mr Soares 
is prevented by the constitu- 
tion from standing for a third 
consecutive term in 1996. 

General Antdnio Ramalho 
Banes also served two consecu- 
tive tonus as president from 
1976 to 1986. But he is now 
eligible to stand again and 
looks increasingly likely to do 
so. He was a cornerstone of 
democracy in the turbulent 
period that followed the 1974 
revolution. 


Tom Bums examines the change in the relationship with Spain 

Neighbourly undertakings 


T he economic relationship 
between Portugal and 
Spain is undergoing a 
significant change. Cross-bor- 
der trade and investment 
between the two countries was 
once extremely limited, but it 
is now buoyant and, despite 
Portugal’s traditional nervous- 
ness about its big Spanish 
neighbour, it is set to increase 
further. 

"Before 1986 (the year when 
Portugal and Spain joined the 
then European Community) it 
was as if Lisbon and Madrid 
were looking in opposite direc- 
tions,” says Miguel Athayde 
Marques, executive chair man 
of ICEP, the government’s 
trade and investment board. 
"One of the most important 
consequences of 1986 was the 
rapid integration of the two 
economies.” 

Far from being back to back, 
the economies of Portugal and 
Spain are now interacting with 
each other and are mutually 
benefiting as a result Inevita- 
bly Spain, with a GDP that Is 
six times that of Portugal and 
a population that is four times 
bigger, is setting the pace, but 
Portugal, where per capita 
income is at best 75 per cent of 
that in Spain, is gallantly hold- 
ing its own. 

Nobody is claiming that the 
Iberian peninsula forms a trad- 
ing bloc similar to that of Scan- 
dinavia, or that Portugal and 
Spain can be grouped together 
as are the Benelux countries. 
There hasJbeen too. much his- 
torical antagonism for that, too 


many inferiority complexes on 
the part of the Portuguese and 
an overdose of superior 
machismo on the part of Spain. 

A merger between TAP and 
Iberia, the two national air- 
lines, far example, is ruled as 
"quite out of the question”, by 
a Lisbon official. "Even if that 
made economic sense, which It 
doesn’t, it would be unthink- 
able because it is a matter of 
natiiwai pride.” 

Similarly, Portugal is anx- 
ious, as far as it is possible, to 
keep Spain at armb length in 
Portuguese-speaking nations 
such as Angola, Brazil and 
Mozambique which Lisbon con- 
siders its natural stamping 
ground. Thus Telefonica, the 
acquisitive Spanish telephone 
operator which is rapidly 
building up a Latin American 
empire, could at best be a 
financial partner in a Portu- 
guese-run development of tele- 
communications in Angola. 

Echoing a similar sentiment 
to the one expressed by the 
Spanish embassy in Lisbon, a 
Portuguese diplomat said that 
"mentalities are the hardest to 
change”. Spaniards are viewed 
suspiciously by the Portuguese 
as over big, over aggressive- 
and. increasingly, as overhare. 

For all the self-evident reser- 


vations, the ice has neverthe- 
less been broken by the onset 
of European Union cash trans- 
fers. the volume of which can 
be mcdtiplied by the joint pre- 
sentation of cross-border infra- 
structure projects. The com- 
mon EU limhrpllfl haa put t.Vlfl 
foundations for shared eco- 
nomic strategies in place ami it 
is gradually overcoming Portu- 
guese misgivings. 

It is precisely because of the 
shared EU membership that 
bilateral trade has increased 
tenfold in the past decade. The 
value of Portuguese exports to 
Spain which stood at $187.5m 
In 1983 was $1.9bn last year 
and that of Spanish exports to 
Portugal has risen over the 
period from $429.6m to $4Jbn. 

S pain Is now Portugal’s 
principal foreign sup- 
plier and some 25 per 
cent of all imports from the EU 
are Spanish. Spain has, in 
turn, become Portugal’s third 
market after Germany and 
France and it absorbs 19 per 
cent of exports to the EU. 

The remarkable feature of 
the trading relations between 
the neighbours is the very 
large spread of similar items 
that are interchanged, and it is 
this trade pattern which points 


to the integration of two econo- 
mies that share a common 
industrial profile based on 
small and medium companies. 

The main Portuguese export 
to Spain is motor vehicles but 
this Item represents just 5 per 
cent of the total value of what 
Portugal supplies to Spain. 
Likewise, motor vehicles are 
the leading Spanish export to 
Portugal, representing 12 per 
cent of the overall value of 
exports, and the next two 
export items represent 5 per 
cent and 3 per cent of the total 
value of Spanish merchandise 
acquired by Portugal 

In the way that investment 
usually follows trade, the com- 
panies of both countries are 
setting up branches across the 
border. "Hie first place a Span- 
ish small company that wants 
to consolidate its export mar- 
ket thinks about is Portugal,” 
says Luis Bonhomme of the 
Spanish Embassy in Lisbon. 
“Portugal is what the Spanish 
entrepreneur knows best for it 
is the natural extension of his 
own domestic market and 
exactly the is true about 
Spain for the Portuguese busi- 
nessman." 

Again the figures, show a . 
remarkably rapid growth. 
Spanish investments in Portu- 


gal fffrn , scarcely totalled $2lm 
in 1965, the year before both 
countries became members of 
the EU, and they totalled 
$8 12m last year, a year when 
Spain displaced the UK as the 
biggest direct investor in Por- 
tugal and when 25 per cent of 
all Spain’s foreign investment 
was directed towards Portugal. 

The story is a similar one on 
Lisbon’s side of the border. 
Direct Portuguese investment 
in Spain between 1992-1993 
totalled $609m and it has gone 
from representing 50 per cent 
of the total value Portuguese 
foreign investment in 1991 to 
78 per cent last year. Close to 
60 per cent of the value of the 
foreign business projects 
approved by ICEP, in a pro- 
gramme aiding small and 
medium Portuguese companies 
to open up abroad, concern 
direct investments in Spain. 

Reflecting the wide spread of 
the trade pattern between the 
two economies, and again 
imiteriining the economic inte- 
gration between Portugal and 
Spain, the cross-border invest- 
ment flow is characterised by 
many eompanias making com- 
paratively minor outlays. 
There are . some 2^00 Spanish 
companies in Portugal but only 
10 appear tn the list of the top 


Trade by main de s ti na tion and origin (% of total) 


1988 

1989 

1990 

1991 

1992 

1993 


Exports fob 


EU 

71.6 

71.5 

74.0 

75.4 

743 

75.6 

of wtdcfr 







Germany* 

14.7 

15.7 

16.7 

19.1 

102 

19.7 

Spain 

11.2 

12.5 

13-6 

15.1 

14.7 

14.5 

Franca 

102 

15.1 

15.5 

14.4 

14J2 

15.3 

UK 

14.3 

12.3 

12.1 

10.0 

11 2 

11A 

Netherlands 

5.9 

5.7 

5.7 

5.7 

5.4 

52 

Italy 

4.2 

42 

4.0 

4.0 

3.9 

3.0 

Etta 

105 

10.3 

10.2 

9.7 

as 

7.8 

US 

5-9 

6.0 

4.8 

3J3 

3J5 

4.3 

■Japan 

08 

1.1 

1 XI 

0.9 

08 

OS 

Opee 

1.1 

0.7 

0.6 

0.8 

0.6 

IS 

Total Ind others 

1000 

1000 

1000 

1000 

1000 

100S 

Imports df 







EU 

07.1 

68.0 

69.2 

72.0 

73.7 

72.1 

ot which: 







Spain 

13.1 

14.5 

14.5 

15£ 

16.6 

17.8 

Germany* 

14.6 

14.5 

14.4 

14.8 

15.0 

15.0 

Franca 

11.5 

11.7 

11.5 

11.9 

12.8 

13.0 

Italy 

02 

9.1 

10.0 

10.3 

102 

8.7 

UK 

8.3 

7.5 

7.6 

7.5 

72 

7.5 

Netherlands 

4£ 

5ii 

5.8 

6.1 

6.9 

4.9 

ERa 

7.3 

03 

6 2 

6.0 

6.0 

8.1 

US 

4.3 

4.4 

3J9 

3.4 

3.0 

3.1 

Japan 

&6 

3.1 

2.6 

2^ 

3.1 

32 

Opec 

50 

6.1 

6.8 

4.8 

3.9 

5.0 

Total Ind others 

1000 

1000 

1000 

1000 

1000 

1000 


‘MMtamayerfyiml July 1900 Su*ai- NoUonal kaOuto ot Satfatta. t u fcadaw do ComerOo Ertcmo 


500 companies in Portugal and 
the biggest, the Cepsa energy 
group, is rooked 73rd. 

There have been daring 
acquisitions from both sides of 
the frontier. Among recent 
deals, Portugal's Clxnpor 
rwmpnt company has bought a 
producer In north-west Spain, 
Tafisa, Spain’s leading fibre 
wood company, has been pur- 


chased by Sonae, Portugal's 
biggest conglomerate, and the 
Colep packaging business has 
acquired a sizeable unit in 
Spain, Johnson and Wax 
Espafia. 

The most ambitious cross- 
border Spanish moves have 
concerned the financial sector 
and, in particular, the contro- 
versial Banesto assault on 


Banco Totta e Azores, the prof- 
itable fourth-ranked domestic 
institution. The four main 
Spanish banking groups are 
now all present in Portugal 
and together they are esti- 
mated to control just over 17 
per cent of Portuguese banking 
assets, nearly 15 per cent of 
hank deposits and dose to 16 
per cent of banking loans. 


In a country where liquid assets 
are known for maturing slowly, 
what would you expect from a bank 
that started only eight years ago P 



TOTAL ASSETS 
CUSS Million} 

OJ9B9 


1991 


1992 


‘ Despite 'ipe''fa<£ we'sfe.ori'ty . 

7t *» chan • • ; 

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Ancf' 6 n youth. - ~ ■ ...Vv;/. "• ■* 

.Th£ ay#rasre ; *sr£ $6;- 
nearly 'ouf-s&ufFf a«*._ ' 

. • V-. -2-V is. 1 *™ ! • . r--r: v"v • 


10368 


10809 


1993 


93 I -/ . :. it‘ap&r£,GP : 


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europe's fop SQ baigfts/fn ' v 

'More imporfhnifc 

vvri/cri. we’re ■ -£©£. ^maintain 'tfitei ' 

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'VpTOi^'safc Y„v£ ■ 

: rietWotfc aricl Si ■' ' V- 

©anktort our success.--. '■* 

■■ ■ , 




How to do business 
in our country. 

In the comfort of 
your own. 



Since Portugal became a member of 
the European Community, it seems the 
whole world wants to do business there. 

Are we seriously suggesting chat yon 
hesitate? Not really. 

But we do s ug gest that you drop in 
to your local branch of Banco Espirito 
Santo before yon dash off to the airport. 

In the comfort of your own country, 
we can advise on the best way to invest 
in ours. 

We can explain local procedures and 
suggest local contacts. We can clarify 
regulations and help cut red tape. We 
can assist with feasibility studies and 
forward planning. 

Once everything is in place, we can 
then provide all the commercial and 
investment banking services you'll need. 

From arranging foreign exchange 
and letters of credit to stock brokerage, 
venture capital, leasing and factoring. 

In short, when yon talk to Banco 
Esplrlco Santo outside Portugal, you 
gain access to Banco Espirito Santo's 
unrivalled network of branches, services 



and contacts Inside Portugal. (Not to 
mention the experience and resources 
of the whole Espirito Santo Group, in 
Portugal and elsewhere.) 

All of which means that, when you do 
get there, you can start doing business. 

With half the business already done. 



BANCO ESPIRITO SANTO 


Head Office; 


Aw. da Llbcrdadc 193. 1200 Lisboa. Portugal. 
Telephone: 31383 31 and 57 90 03. Fax: 77 49 24. 
KrwbcroCSfA. 








FINANCIAL TIMES FRIDAY OCTOBER 2S 1994 


PORTUGAL IV 


Tom Burns looks at preparations for Expo ’98 


Facelift for an anniversary 


Portugal has every right to be 
proud of its illustrious past, 
and the manner in which it 
recalls events in Its history 
that the rest of the world 
ignores is nothing short of 
endearing. 

Few outside Portugal, for 
example, are aware that 1991 
was the 500th anniversary of 
the first Portuguese mission to 
the kingdom of the Congo, or 
that 2000 will mark the the 
SOOth anniversary of the coloni- 
sation of Brazil, or that this 
year celebrates the 600th anni- 
versary of the birth of Prince 
Henry the Navigator whose 
intellectual stimulus and deep 
pockets made such milestones 
possible. 

The world outside Portugal 
may, however, become aware 
of the significance of 1998 as 
the year marking 500th anni- 
versary of Vasco da Gama’s 
voyage to India. If it does it 
will be because of Lisbon's 
Expo '98, an Internationa] 
exposition which hopes to 
attract 115 participants, coun- 
tries. multinational companies 


and international organisa- 
tions, and 10m visitors. 

Expo '98, has chosen an 
attractive theme: under the 
title The Oceans, a Heritage for 
the Future, it will focus on 
conserving the oceans and also 
on r ealising the sustainable 
assets that the two thirds of 
planet earth represented by the 
oceans can provide. The ques- 
tion is whether it can deliver 
this appealing package. 

Antonio Cardoso e Cunha, a 
former EC commissioner and 
now commissioner for Expo 
’98. brushes the doubters aside. 
The world fair will happen as 
planned because much more 
than being an occasion to wave 
the Vasco da Gama flag, more 
even than providing a platform 
for ecological correctness. 
Expo *98 is the excuse for a 
si gnificant urban facelift that 
Lisboa can no longer delay. 

Already the state-owned 
Expo *98 consortium is begin- 
ning to decontaminate and to 
level a 300-hectare industrial 
garbage area on Lisbon’s east- 
ern suburbs, upriver and 


alongside the river Tagus estu- 
ary, that was formerly occu- 
pied by a succession of petro- 
leum refineries and factories. 

It is an undertaking compa- 
rable to the renewal of Lon- 
don's Docklands or to Barcelo- 
na’s decision to uproot a 
similar rust belt to construct 

an Olympic village. Mr Car- 
doso believes that Lisbon, is not 
only “fit to meet" such an 

undertaking but “desperately 

needs to do so". 

The stimulus is all-impor- 
tant “If the objectives are not 
foolish, if they are reasonable, 
then societies need this sort of 
psychological challenge.” says 
Expo '98*s commissioner and 
his views echo those of Barce- 
lona mayor Pascual Mara gall 
in the run up to the 1992 sum- 
mer games. 

Expo *98 will not however, 
be a repeat of the Expo '92 jam- 
boree in Seville that marked 
the 500 years of Christopher 
Columbus's first voyage to the 
New World. That was a “uni- 
versal" exposition, a higher 
rank than the “international” 


exposition accolade awarded to 
Lisbon by the BtE. the Paris- 
based organisation which mon- 
itors world fairs. With hind- 
sight, Lisbon perceives Expo 
*92 as having been too costly, 
too ambitious and, ultimately, 
too wasteful. 

“One of our main concerns is 
not to be Seville mark two," 
says Mr Cardoso. The Lisbon 
event will be shorter - four 
months, June to September, 
fasted of Seville's six - the 
exhibition space will be much 
smaller and, hopefully, it will 
pay for itself by selling off its 
real estate to toe private sec- 
tor. 

If all goes as Expo ’98 plans 
it, Lisbon will be making a 
giant leap forward over the 
next three years. It will 
acquire: 

■ A second fixed link over toe 
Tagus, a 15-kSometre six-lane 
highway thrown across the 
estuary that will relieve pres- 
sure on the saturated existing 
suspension bridge, down river, 
which dates from 1966. 

■ A transport interchange 



>in.- 

uh 

» m 

VioK 

: ft* 


Antonio Cardoso • Cunha brushes 
the doubters aside 


1 ierft e ge for the tutura an a r ch ite c t's view of the gtant oceanar ium which will be Europe's biggest 


centre serving buses, the city’s 
metro system and toe main 
national railway traffic moving 
north-south and east towards 
the Spanish border. 

■ A big exhibition centre, a 
large multi-purpose indoor 
sports and music s tadium and 
the biggest oceanarium in 
Europe. 

■ •A new residential, office 
and commercial area, housing 
some 25,000 and. scemcally sit- 
uated by the Tagus estuary’s 


bulge, reminiscent in its loca- 
tion of lakeside Chicago. 

“Everybody has got his feel- 
ings at least a little mixed 
about such ambitions," says a 
Lisbon property developer. 
“Clearing all that needs to be 
cleared (toe Expo ’98 site 
extends along 5km of river 
front) and th en building all the 
complex things that are 
plann ed in under four years 
seems a bit far-fetched.” The 
doubters point to toe fact that 


Budapest has only recently 
scrapped its own plans to have 
an Expo *96 because of time 

and financing iflfflcuMM 

Mr Cardoso appears untrou- 
bled and he harks back to 
Vasco da Gama who was "not 
a navigator" but a 
clear-sighted businessman. 
Getting to India was a "trade- 
driven act” and by toe same 
token the world fair on the 
500th anniversary of that voy- 
age is a sound commercial ven- 


ture moulded to the city’s 
requirements. 

Indeed, Mr Cardoso seems 
intent on leaving nothing to 
chance as he preaches the need 
to be “hard, demanding and 
accurate" in the Expo ‘98 
quest. He hns a pester of Mur- 
phy’s Law - If things can go 
wrong they will - framed in 
his office and he says that he 
hne it hanging there to remind 
him and Ids staff that “every- 
thing has to be covered". 







Launching pad for innovation: view of the proposed Lisbon science and technology park 


P ortugal pioneered the 
application of science 
and technology to com- 
mercial endeavour in the 15th 
century when Prince Henry 
the Navigator created the 
School of Sagres. Leading 
astronomers, shipbuilders and 
cartographer were challenged 
to make scientific break- 
throughs that laid toe techno- 
logical foundation for the Age 
of Discoveries. 

Few such stimulating 
ripmflnffc are on Portu- 
guese researchers today. 
Industry, protected from com- 
petition and dependent on cap- 
tive colonial markets for most 
of this century, has made little 
effort to move beyond unso- 
phisticated , low-cost products. 
Scientists, lacking any chal- 
lenge from business, have 
turned to pure research or 
work for foreign companies 
with a greater capacity to 
apply their findings. 

The mistrust and misunder- 
standing that impair toe rela- 
tionship between companies 
and universities in Portugal is 
a marked disadvantage for a 
country now competing in a 
single European market, 
where technological innova- 


Science and technology 


New spirit of enterprise 


tion is crndal for success. A 
few notably successful collabo- 
rations between business and 
research institutes are excep- 
tions that prove the rule. 

Portugal invests only 0.8 per 
cent of GDP in research and 
development, compared with a 
European Union average of 2JS 
per cent Little more than a 
quarter of the total is invested 
in industrial research, com- 
pared with about three-quar- 
ters for the most successful 
European economies. 

Analysts have repeatedly 
highlighted the weak link 
between industry and aca- 
demia as a flaw in Portugal’s 
strategy to build more compet- 
itive companies. Efforts are 
now under way to rekindle toe 
spirit of Sagres. The most 
prominent development is 
Taguspark, a science and tech- 
nology park due to be com- 
pleted in 1997. It will create an 
educational, scientific and 


business community of about 
10,000 people and involve a 
global investment of some 
Es50bn (S3 21m). 


T he School of Sagres was 
toe Renaissance equiva- 
lent of Cape Canaveral, 
providing a scientific frame- 
work that helped launch Por- 
tugal into an era of expansion 
and wealth. Taguspark has 
decidedly more modest aims, 
but nonetheless hopes to build 
a bridge between science and 
enterprise that will foster 
development 

“On r objective is to contrib- 
ute to modernising Portugal 
by creating a new framework 
for interaction between educa- 
tion, research and business 
and by building an environ- 
ment that favours innova- 
tion,” says Jos6 Sucena Parva, 
chairman of toe Taguspark 
management board. Emphasis 
is being given to providing 


support for technological 
development by toe small and 
medium-sized companies that 
dominate toe economy. 

The first stage of Taguspark, 
begun in 1992, will occupy 114 
hectares overlooking the 
Tagus river at Oeiras, a few 
minutes by road from central 
Lisbon. Facilities will include 
a business and innovation cen- 
tre, designed as a small com- 
pany incubator, as well as a 
scientific and technical infor- 
mation centre, a congress and 
exhibition hall, a hotel, resi- 
dential areas and services. 

Strong emphasis will be 
given to education. The Lisbon 
Technical University (UTL), 
the Higher Technology Insti- 
tute (1ST) and the Systems and 
Computers Engineering Insti- 
tute (ZNESQ all plan to open 
faculties in Taguspark, which 
will initially cater for about 
3,000 university students. 

Jos6 Tribolet, president of 


ENESC, also wants the project 
to provide secondary school 
teaching and short-term pro- 
fessional training courses, 
which would make Portugal a 
pioneer in stimulating the 
practical application of aca- 
demic learning and research. 

Large companies are also 
installing research and devel- 
opment centres in Taguspark. 
The project's 19 shareholders, 
whose investments will be sup- 
plemented by considerable 
amounts of EU and govern- 
ment aid, include the state- 
owned power, telecommunica- 
tion and post office utilities. 

They have been joined by 
important private companies 
including Banco Comcrcial 
Portugues, Banco Portugues 
de Investimcnto and the Inter- 
Banking Services Society 
(SIBS), a European leader in 
automated banking services. 
Many other companies, includ- 
ing foreign investors, are sub- 
sequently expected to choose 
what promises to be a fertile 
new environment for the inter- 
change of ideas between sci- 
ence and industry as a launch- 
ing pad for innovation. 


-'-■va- »; 

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hf' £■'' 


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Peter Wise 






**t*ati 


AN EXCELLENT SHOT! 


Portugal's most experienced international bank 


Hi Li s J 







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FINANCIAL TIMES 


Linking 

up with 
schools 


E mployers wanting to bofld 
Unto with education now 
b ave a growing body of 
experience to tap for ideas. 

Companies based in rural 
areas, in particular, c a n use a 
close link with a school to 
improve the skills of children 
who will later form their main 

pool of recruits, as weD as to 
advertise themselves as good 
employers. 

UCB F ilm s, the Belgian-owned 
packaging manufacturer, has set 
up a link with the local second- 
ary school in Wlgton, Cumbria, 
where tt is the largest employer 
with a workforce of 800. Its 
three aims are to improve the 
attractiveness of careers with 
toe company, to aid understand- 
ing of industry among teachers 
and, unusually, to share 
resources and experience. 

That means that toe school's 
teachers provide foreign lan- 
guage tuition to company per- 
sonnel, and assist with outdoor 
activities intended to help with 
management training and devel- 
opment for graduates, senior 
managers and supervisors. 

Urn services UCB provides to 
the school are tailored to run 
throughout the curriculum. It 
provides work experience, with 
two weeks guaranteed for every 
child in year 10 (14- and 15-year- 
olds. Staff also help with Young 
Enterprise com panies - offering 
children management experi- 
ence - and with the Young Engi- 
neer of Britain awards - which 
allowed pupils to help design a 
vehicle warning device for use 
at UGB’s site. 

More Imaginatively, it pro- 
vides help with the history cur- 
riculum for 13-year-olds, with 
pupils visiting the site to help 
visualise the impact of the 
Industrial Revolution, and with 
GCSE geography, where pupils 
are allowed a perception of toe 
production process, and of 
the importance of wealth cre- 
ation. 

The link won this year’s Gard- 
ner-Merchant/ CBI Award for 
Excellence in Education Busi- 
ness Partnership, and is now 
recommended as an example for 
other companies to follow. 

- JohnAuthers 


F’RTOAY OCTOBER 28 1994 


I f the late spaghetti western 
producer Sergio Leone had 
made a feature film about per- 
sonnel management - and the 
likelihood of that was about as 
remote as the planet Pluto - he 
would probably have billed it The 
Job With No Nome. Its sheer fuzzi- 
ness and lack of hard performance 
measures are a constant source of 
frustration in management circles, 
as well as provoking suspicions 
among employees and scepticism 
among academics. The Trades 
Union Congress, for instance, 
recently wrestled with the meaning 
of human resource management - 
as personnel Is sometimes called - 
describing it as a “slippery concept" 
and questioning the motive behind 
some HRM practices. 

The formation earlier thin year of 
the Institute of Personnel and 
Development - the professional 
body combining the old institute of 
P erson nel Management and the 
Institute of Tr aining pnii Develop- 
ment - came at a tone when some 
companies were dispensing with 
their personnel departments com- 
pletely, choosing to assign the 
responsibility to line managers. 
Indeed at t his w eek's annual confer- 
ence of the IPD in Harrogate, which 
fi n i shes today. Sir Brian Pitman, 
the chief executive of Lloyds Rank , 
told delegates that removing the 
central personnel department at 
Lloyds was one of the most effective 

changes the h ank had made. 

He said: “Line managers now 
understand the pains of some of the 
decisions that personnel has to 
take." 

However, in spite of *hi« , there 
seems a sense among delegates that 

their Hma hag finally mmo 

Mike Bett, the IPD president, 
summed it up by pointing to a 
growing recognition that the sur- 
vival and success of organisations 
will increasingly depend an their 
ability to build highly skilled work- 
forces and to release the foil poten- 
tial of employees. There should be 
a professional personnel and devel- 
opment specialist on all top man- 
agement teams: in the boardroom 
and on the executive co mmitte es," 
he suggested, adding that personnel 
should be involved in developing 
front-line boardroom strategy. 

Betf s confidence in a rosy fixture, 
however, is not universally shared 
Earlier in the year a team hua^ 
by David Metcalf at the -London 
School of Economics described per- 
sonnel specialists as “big hat, no 
cattle" with lots of pretentions and 
few results. Its research suggested 
that the presence of a personnel 
manager was associated with 
poorer employee relations. 

Drawing from the same body of 
research as that used by the LSE 
team - the third Workplace Indus- 
trial -Relations Purvey - text taking 
a different definition of personnel, 
David Guest, of Bfrkbeck College in 


IS 


MANAGEMENT 


Does the human resource 
department have a future? 
Richard Donkin reports 

Personnel 

values 


IPERSCtfNQ- SAV THW HAVE h VAUABLsE 
tMZ T TO PLAV IN CORtofiATE STJSATEOV 
AND, SINCE THEYVe GOT fitU. OUR. 
PUSS, HM /MCUNED TO AG6£E It/ITW THSri 



London, and Kim Hoque, a 
researcher at the LEE, presented a 
more positive picture. Their study 
r*opelnded that ttom was producing 
superior performances in the work- 
place. The contribution of personnel 
specialists, said Guest and Hoque, 
had been difficult to identify 
because they often worked by exer- 
cising influence in partnership with, 
line managers. This sometimes cre- 
ated ambiguity about personnel 
responsibilities so that when thing s 
went wrong it proved expedient to 
blame the personnel specialist. 

Personnel’s influence on strategy 
-is equally<a subject of debate and 
contradictory research. Guest and 
Hoque quote earlier research which 


suggests that personnel depart- 
ments often have insufficient 
responsibility to influence human 
resource strategy. They noted 
another study, however, by Gran- 
field School of Management and 
Price Waterhouse International, 
which found that 43 per cent of per- 
sonnel directors claim to be 
involved in the formulation of cor- 
porate strategy from the outset 
The IPD’s response to personnel’s 
uncertain role has been to place a 
strong emphasis on sifting good 
practice from bad in an effort to 
position itself in Betts words, as 
’the preeminent professional body 
mfhienriwg and improving the qual- 
ity, thinking and practice of people 


management and development". 

On the one hand the IPD is prom- 
ising to extend training and support 
for often hard-pressed personnel 
professionals, on the other it is 
wedging open the door, malring 
Itself accessible as a consultancy 
service and provider of books, 
reports, seminars and conferences. 

Conscious of the jargon, Geoff 
Armstrong, toe IPD’s director gen- 
eral, has also committed the insti- 
tute to encouraging greater clarity 
of the personnel role. "By removing 
jargon and barriers to understand- 
ing, we must spread the message 
that the development and manage- 
ment of people is much more than a 
series of fashionable programmes,” 
he said shortly after the formation 
of the institute. He believes person- 
nel is “a systematically leamable 
discipline, with a wide range of 
explicit competencies which need to 
be applied appropriately by every- 
one who has responsibility for other 
people". 

The IPD warned against what 
Armstrong calls the promotion by 
gurus of "the wonders of human 
resource management" at the 
expense of collectivism, industrial 
relations and some personnel proce- 
dures. “Performance management, 
ghrjrio status aim indi v idually tai- 
lored payment packages are pres- 
ented as toe new snake oil which 
rem achieve miracles anywhere", he 
says. "Such dogma is misleading 
and dang erous 

“Useful tools have been packaged 
up under the banner of human 
resource management and sold as 
panaceas, to be applied at any time 
and place. Without proper regard 
for the organisation’s established 
culture and particular needs, most 
such flavours of the month prove 
deeply disappointing." 

The role of the personnel officer 
or manager, argues Armstrong, is to 
apply new practices where they are 
helpful and where they can be 
adapted to the specific needs of 
organisations. "We have seen 
recently the immense problems 
which arise when performance-re- 
lated pay, decentralised bargaining 
and commercial imperatives are 
imposed as though they, in isola- 
tion, provide all the answers in 
our schools and hospitals,” he said. 

He is distancing the IPD from the 
concept that HRM should be used 
as an exploitative tool of manage- 
ment What lessons can be drawn 
from human resource management? 
Will it be a distinct leamable disci- 
pline at the cutting edge of organi- 
sational and employee development 
in the Zlst century or will it fade 
away, remembered only as a brave 
attempt to bag up an elusive set of 
ideas? The challenge for personnel 
is to maintain its separate identity 
in the shifting wmphagia within rap- 
idly changing organisations. Lead- 
ing that shift could ensure that it 
has a bright future. 


How old is your 
boardroom? 

Tim Dickson on national age 
differences among executives 


T he US tends to have the 
oldest company directors. 
Germany's are marginally 
more geriatric than the French, 
while Britain vies with Sweden for 
the youngest boardroom blood. 

These are the main findings of a 
survey* by Accord Group, an 
international executive search 
firm, aimed at identify in g the age 
range erf those running top 
companies in five of the leading 
western economies. 

"If there was a surprise it was 
that the differences are not 
actually that great," observes 
David Dumeresque, a partner in 
London-based Tyzack & Partners 
which carried out the UK part of 
the research and which is a 
founder member of Accord. 

“The idea was inspired by the 
fuss about Lord Weinstock’s age 
over the s umm er which made us 
curious as to whether be is old in 
relation to directors of companies 
elsewhere." 

Accord looked at the 100 UK 
constituents of toe FT-SE 100 
Index, with the top 50 scrutinised 
in France, Germany. Sweden and 
the US. Baaed cm the most recent 
returns or repeat and accounts 
individual directors were placed 
into one of four categories: 
non -executives; senior executive 
directors (that is, executive 
chairman, chief executive, 
managing director); finance 
director, and “other” (all other 
executive directors whatever their 
responsibility). 

The conclusions by country 
were as follows: 

• UK. Senior executives tend to 
be in their 50s and early 60s with 
Lord Hanson (72) the most aged 
and Archie Norman of Asda (40) 
the most precocious. OK finance 
directors were among the 
youngest in the aampia, with half 
being under 50, the oldest 61, and 
the youngest (BTR's Kathleen 
ODonovan) a mere 86. 

Only about 10 per cent of UK 
ex e cut ive directors remain in post 
after their 60th birthday, but the 
majority of nan-executives are 
into their seventh decade. The 
oldest non-exec is Lord Forte (84), 
the youngest is 4D-year-old Louise 
Patten (Ladbrake). 

• US. While the average age of . - 
boards is relatively high, 
executive directors tend to resign 


earlier than in other countries. 

The majority of non-execs are over 

64, though the oldest (75-year-old 
John E Tate of WalMart) is a 
stripling by international 
standards. 

The majority of American senior 
executives are over 60, though the 
oldest CT Marshall Hahn Jr of 
Georgia Pacific) is only 68, 
younger than in both France and 
the UK. US finance directors are 
also somewhat older than their 
opposite numbers in other 
countries with a mean age 
of 60. 

• France. Most categories of 
directors are at about the 
mid-point on Accord's 
international scale. Although the 
oldest nonexec in France is 85 
(Gabriel Mathey of Casino) the 
majority are in their 60s. 

France has the distinction of the 
oldest senior executive - 
76-yeorold Antoine Riboud of 
Danone. 

• Germany. The country with 
toe oldest non-exec (88) and oldest 
executive director (an 87-year-old 
at Holzmann) in the survey. Over 
hair the non-execs were in excess 
of 64 and more than 25 per cent 
over 68. 

Senior executives tend to be in 
their early 60s, but they also retire 
early with only 10 per cent over 

65. German finance directors were 
the oldest in the survey after the 
Americans. 

• Sweden. Directors here are the 
youngest in every category, with 
half toe non-execs aged less than 
56 and 75 per cent under 62. 

Ninety per cent of senior 
executives are less than 59 with 
only a quarter more than 56. 
Fredrik Sanriehn of Ratos is the 
youngest finance director in the 
survey at 32. 

As for lessons, Dumeresque is 
dubious. “There is no right age,” 
he says. “You can find someone 
completely past ft and burnt out 
at 60, but there are plenty of 
strong, vibrant 75-year-olds. " 

On the other hand, he adds, “it 
does help to be called Hanson" (a 
reference to the survey finding 
that the family also boasts the 
youngest UK executive director in 
38-year-old Robert). 

• Not ptibUdy available but details 
can be discussed on request 



fetiche 


& 


(In A dm inistrative Receivership) 


The Joint Administrative Receivers, j. B_ Atkinson and A. P. Peters, offer 
for sale the business and assets oT the above manufacturer of Higbi Pressure 
Zinc Diecastmgs. 

■ Situated in Birmingham, close to A45 and tbe motorway network. 

■ Established business wi th annual turnover of approx. £3. 2 million. 

■ Skilled workforce of 110. . 

■ Freehold factory orapprommareljr 60,000 sq. ft., with 10,000 sq. ft. of 
integral offices. 

■ Higjh pressure diecasting capability in the 50-250 ton range. 
Extensive machining facilities, chrome -plating plant, zinc dichromate 
facility and powder coating tine. Well equipped toolroom. 

■ BS Registered foundry to 1004A. 

for further information, please contact Joe Atkinson, Andrew Peters or 
Duncan Morris at Touche Ross & Co., Colmore Gate, 2 Colmore Row, 
Birmingham B3 2BN. Tel: 02 1 200 22 1 1 . Fax: 02 1 236 1 51 3. 


iische 

Ross 


a 


■ Based in South Wales. 

■ Principal business — steel fabricators and general engineers. 

■ Turnover approx. £.3 million. 

■ Approximately 75 employees. 

■ Freehold property - 30,000 sq. ft. 

For farther information please contact R. G. Ellis or C. Trigg at 
Touche Ross & Co., Blenheim House, FrtzaJan Court, Newport Road, 
Cardiff CF2 ITS. Tel: 0222 481111. Fax: 0222 482615. 


MuMhAO 





Touche 
Ross 


(In Voluntary Liquidation) 

The joint Liquidators, Ian Brown FCA and L. H. Gatoff BA(Econ), FCA, offer 
lor -ale the design and patent rights within the UK or the Durham 2000 

Stadium Scatini: System, comprising: 

■ Injection and blown moulding tooling held under care and maintenance 
agreements. 

■ A Luge quantity of finished component parts. 

■ A seating system which was designed to achieve: 

Safety - automatic spring closure j 

Comfort - ergonomic scat covers; ..... . 

Construction - engineered from polymers to withstand high impact; and 
Variable installation — simple thread or riser mounting. 

r „Xl r a 'co" 

NB. 6EA. Tel: 09. 26, +111. Emc:091 232 TO. 



BUSINESSES for sale 


Karl Loynton on 0718W 47EBOI 
Lesley Sumner on 071 873 3308 

fSisKE 





State Holding Company 

The AUami Vagyonkerefo R£szv£nyt£rsas&g 
(State Holding PLQ 
with the cooperation of the Dr. Hofner & Partner International 
Management Consultant Co. 

(hereinafter: the consultant) 
advertises 

the sale of the state-owned shares of 

the Hf8XAPKIAD6 Kiad6si 6s Hirdet&i R£sxv£nyt£rsasfig 
(H£rLAPS 3AD6 Newspaper Publishing Enterprise PLQ 
in the frames of a single-round, open tender. 

The registered capital of the advertised company is 198^48,000.-HUF. of which offers can be made 
for a 148 t 536,000.-HUF face value share package pert representing 75% of the registered capital. 
Ordinary shares representing 5% share of property shall remain Lastingly in the ownership of tbe 
State Holding PLC This includes one 10^XM.-HUF face value special ordinary share and the related 
special rights licences. 

Tbe State Holding PLC shall dispose over registered ordinary shares representing 20% property 
share, independently from tbe invitation to tender, and offer 10% for sale to employees, and reserve 
10% for compensation bonds. 

Hungarian and foreign natural and legal entities, business associations without legal entity. 
Employee Share Program Organizing Committees ami private entrepreneurs may participate in tbe 
tender. Consortium bidders shall have universal responsibility in the lender procedure and at the 
conclusion of the contract 

Minimum 20% of the purchase price shall be settled in cash, while the remainder by E-credit 
The offers be sent lo the below address in 5 copies by marking the ORIGINAL copy, in a 
dosed envelope free from any company name or logo, and with the following text "Pfilylzat a 
Hfxiapkaidd Rt jOlami tulajdonu r£szv£nyemek taegvisiriAsSxa". 

Tbe bidder should undertake to maintain the offer foe 90 days. 

The deadline for receiving the offers: 

S=lft o'clock on BBatoE3ajgl 

Tbe place of banding In toe offers: 

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Tbe State Holding PLC reserves the right to call the tender unsuccessful. 

The precondition for submitting the offers is the purchase of the tender information material - 
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For further information please contact 

Pfter Bddonfiu, Afiami Vagyookezelo Rt tel j: (361) 267-6600/217 exL . 

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CONTRACTS & TENDERS 


r Apio 

AUTHOR ITV 

ADDITIONAL SERVICES LICENCE 
INVITATION TO SUBMIT SYSTEMS FOR ASSESSMENT 

Under Sections 1 1 4- 120 of tltc Broadcasting Act. the Radio Authority i* empowered lo 
advertise *sdt5tkaal servient* tiemna, 7110 Authority has leceody awarded one sad) 
licence using spare capadiy within tbe RDS sabetnier of iBlNRl heence. 

Aware test a second FM suborner could hi principle be transmitted with the INR1 
signal to provide for a farther additional services hence, (be Authority now wishes to 
identify and define which a ub c a n toi systems, if any, would be technically acceptable 
In It. prior a mvitiag applications for sach a Keeper. Such appl i cations win only be 
admissible if using a uibcanier system previously tested and accepted by the 
Authority. Technical acceptability relates particularly to Section 119 of the 
Broadcasting Act, and is to came that the toe of the second gnbeanier system wiS 
pn$ufic» reception neither of the parent PM transmissions, nor of other PMsereica. 

Work already earned out by the Radio Authority has identified a small number of 
systems whid) it intend* to red in the near Altaic. Any party wishi n g to nflr» a system 
for evaluation md tearing should write with a fan geha»g«l ^ 

of the nvafcbiliiy of equipment to be tes te d, n the Head of Engineering, The Vfit^ 
Authority. Holbrook Howe. 14 Great Queen Street, Bottom, London WCZB SDG, 
before iSth November 1994. 


— 4 ' 







.7 


/ 



16 


TECHNOLOGY 


W hen Kansai Interna- 
tional Airport opened 
on a man-made island 
in the middle of Osaka 
Bay in central Japan, it was greeted 
by the typical chorus of disapproval 
that attends most large civil engi- 
neering projects; it was too expen- 
sive, it was sinking , it was not large 
enough, it was a white elephant 
It cost more than n.SOObn 

(£9_5bn) to build, SO per cent more 

than projected when work began 10 
years ago. Since the first aircraft 
touched down on September 4, just 
110 arrivals and departures take 
place a week, compared with the 
planned-far 454. 

But if there is a success story, it 
is to be found in the architectural 
and technological achievements of 
the ambitious project Nearly 2km 
long and occupying more than 
300,000sq m, it is the world's biggest 
airport terminal. It sits, wings out 
stretched like a great gull, on a 
520ha artificial island, 5km offshore, 
joined to the mainland by a double- 
deck road and rail causeway. 

A project of that size brought 
unique challenges to its engineers, 
a British-Japanese collaboration of 
Ove Arup and Nikken Sekkei. 

The principal difficulty arose 
from that scale. The number of 
flights the airport would be 
required to handle meant it would 
be Japan's first 24-hour facility. But 
the Kansai region is a flat, densely 
populated plain, flanked by moun- 
tains to the north and sea to the 
south. 

A 24-hour airport on such 
crowded land would require the 
kind of tolerance of late-night 
flights for which the Japanese are 
not renowned. It was decided 
faatoari to hmM aw island in Osaka 
Bay and put the airport there. 

In normal circumstances that 
would have presented few unfamil- 
iar problems. Landfill reclamation 
Is a local speciality in Osaka Bay - 
there were already half a dozen 
sites in the bay reclaimed for port 
facilities when the project started. 
The initial plans involved building 
the airport 1km out to sea, like 
most of the other artificial islands 
in the area. 

But the Osaka Bay’s fishing com- 
munity, which was courted assidu- 
ously for permission to build the 
airport, objected to the idea of a site 
so close to land within their waters. 
After a prolonged wrangle, it was 
agreed to build the island 5km from 
the shore. 

That decision created the princi- 
pal difficulties for the construction 
of the island and the terminal build- 
ing. As John Batchelor, in charge of 
Ove Arup’s Japanese operations, 
puts it: "The difference between pla- 
ting something ikm and 5km from 
land was enormous. Five kilometres 
Into the bay the water is much 
deeper and the soil much softer. 


Building an airport on a man-made island presented 
special engineering challenges, writes Gerard Baker 

Japan’s flight 
of fantasy 



KansaPa Island airport and (inset) the departure wing: the conjunction of form and content makes the buftfing unique in Japan 


The volume of landfill on such soil 
meant the island would settle con- 
siderably over a period of a few 
years." 

To minimise the effect of settle- 
ment, the subsoils immediately 
below the seabed bottom, composed 
of soft alluvial clay, had to be 
strengthened. This involved drain- 
ing the clay layer by iqjecting sand, 
increasing the density of the soli 
and hardening it In total lm sand 
d rains were installed in the clay, 
four times as many as have been 
used in the past 25 years in Japa- 
nese offshore construction. 

The site was then completed with 
landfill reclamation. The water 
depth at the chosen site required 
soil reclamation of about 33m in 
depth - a total of 180m cu ft of fill - 
some 50 per cent more than had 
ever been used in the construction 
of similar islands in Japan. Yet the 
whole process - improvement of the 
foundations and full reclamation - 
was completed in less than five 
years. 

But although the strengthening of 
the foundations had gone a 
considerable way towards limiting 
the settlement it had not been 
aiiminatof completely. 

This posed a new problem for the 


construction of the terminal 
building itself. The engineers* 
calculation was that following the 
improvement the total settlement 
would be more than 2m. but would 
be at an exponential rate, with 
rapid sinking at the outset, 
gradually Himiiiighhiy towards zero 
in the future. 

If the settlement occurred to the 

‘This is a work of 
grace and style. It 
uses technology to 
perform its basic 
function’ 

same degree all over the building, 
there would be little structural 
problem, but the iiangw was that 
different parts of the building would 
sink at different speeds, threatening 
to break the back of the structure. 

Ove Arup and Nikken Sekkei 
opted for a technique that had been 
tried in smaller buildings on 
reclaimed land, but not on file scale 
of a vast airport ter minal . They 
built a system of computer- 
controlled hydraulic jacks that 
actually raise and lower the 


building’s 900 columns. Pipes 
between the pillars contain 
advanced spirit levels that measure 
precise movements of the building. 

Every two months the building's 
maintenance engineers wheel a vast 
computer around the basement of 
the building and plug it into each 
pillar. The computer provides a 
series of readings of the differential 
movement of each of the pillars. 
They can then calculate precisely 
which pillars need to be raised and 
which lowered. Deep in the 
foundations, the pillars are then 
moved up or down by removing or 
inserting shims - metal wedges 
that sit beneath them. 

The more mundane consequences 
were also tackled. Over the next 10 
years the building is expected to 
settle by as much as lm. The 
jacking system ensures that only 
the ground level will actually move, 
while the rest of the building 
remains intact, but the fact that the 
settlement is differential means 
that one side of the building could 
fall, creating difficulties for walls, 
doors and staircases. 

As Batchelor explains: "The roof 
and outer walls are fixed but the 
hydraulics allow the floor to move 
around like water in a choppy sea. 


This could create difficulties such 
as walls with gaps at the bottom as 
the ground moves." 

So, at the ground level all the 
walls and staircases are longer than 
they initially need to be. As the 
floor descends or rises with each 
jack movement the walls slide out 
of panels and “stretch". The 
staircases contain an extra two 
hidden steps to allow for this 
movement, and the plumbing 
systems are all built with flexible 
pipes. The overall effect is that the 
passenger does not notice that one 
side of the building could be lm 
lower than the other. 

While in the foundations modem 
applications of the primitive jack 
keep the bunding secure, in the roof 
a new concept keeps it comfortable 
A problem that confronted Ove 
Arup in constructing the interior of 
the terminal was that Renzo Piano, 
the Italian architect who designed 
the building, was concerned that 
the structure should, from both 
inside and out, maintain the pure 
simplicity of its curves, unimpeded 
by any obtrusions. 

Unfortunately the demands of 
human comfort require most 
buildings to have large air 
conditioning units in their celling, 
involving complex and usually 
unprepossessing pipes and boxes 
which Piano was anxious to avoid. 

Ove Arup’s solution was the 
creation of what they call "open air 
ducts”. Seventeen vast blue nozzles 
pump air at high speed from the 
ground level of the international 
departures floor to the ceiling. The 
air Is then conducted along 
Teflon-coated strips of fabric 
following the curve of the roof, the 
shape of which had been 
determined by the profile that 
would carry air most effectively 
across the space. The conducted air 
then falls, losing speed and 
circulates back along the floor, 
producing a cool breeze at 
passenger level. 

The design of the roof also helped 
facilitate the engineers’ safety 
plans. Japanese regulations require 
fire-resistant compartments of no 
more than 500cu m. The Kansai 
terminal forms a continuous 
volume of more than lm cu m. Ove 
Arup convinced the regulators the 
high curved roof would allow smoke 
to rise and stay trapped in the 
ceiling area for long enough to 
allow passengers to escape the 
building. 

According to Batchelor, the 
conjunction of form and content is 
what malms the building unique in 
Japan. “Buildings form an 
essentially practical purpose in 
Japan." he says. “They are simple, 
they work and they are boring. This 
is a building that departs from that 
tradition. It is a work of grace and 
style that uses technology to 
perform its basic function." 


FINANCIAL TIMES FRIDAY OCTOBER 25 1 


Worth Watching • Vanessa Houlder 

of Queensland, who conducted the 
study. He found that 
breast-feeding mothers could 

raise the Omega 3 content** their 
mi lk by eating the HeartSmart 

eggs. 

University of Queensland: 
Australia, tel 61 7 365 3573. 



Building blocks to 
saving energy 

The Un iv ers ity of East Anglia is 
building a lecture theatre and 
office block, which is designed to 
consume a fifth of the energy 
used by a conventional building. 

The 3.000 sq metre building is 
expected to have the lowest 
energy consumption of any 
comparable building in the UK. 
when it opens next January, 
according to Fulcrum 
Engineering which designed it 
with John Miller & Partners, 
architects. It is expected to use 
fewer than 50kW hours per 
square metre per year. 

The building, which relies on a 
high standard of insolation, is 
designed to require no beating in 
winter, except for unusually cold 
periods. It will be cooled by using 
the exposed mass of the structure 
to absorb heat during the day, 
while at night the floors will be 
cooled by circulating air through 
the floor slabs. 

Fulcrum Engineering 
Partnership: UK tel 071 837 6637; 
fax 071 833 4201 


The eggcellant way 
to a healthy heart 

The risk of developing heart 
disease can be lowered by eating 
eggs from hens fed on a special 
diet, according to Australian 
scientists. 

The ‘HeartSmart’ egg tastes tike 
an ordinary egg but is rich in 
Omega 3, a group of fatty adds 
believed to help cut heart disease. 
It does not, however, cot the level 
of cholesterol In the egg, which 
many scientists believe is 
implicated In heart disease. The 
eggs are being marketed in 
Australia by University 
Partnerships. 

The Omega 3 fatty adds, which 
are found mainly iu fish, are 
thought to be important in the 
development of babies, according 
to David Farrell of the University 


Filter system for 
diesel emissions 

Renault, Europe's second largest 
diesel engine manufacturer. Is 

developing a filtering system to 
cut emissions from diesel engines 
In conjunction with 
Rhone-Poulenc, the French 
chemicals company. 

The programme will bufid on 
work by Rhdne-Poulcnc, which 
has developed a catalyst derived 
from cerium. When this is added 
to tiie fuel, it lowers the 
combustion temperature of 
carbon particles to about 200°C, 
allowing the particles to be 
burned off. Diesel engine 
emissions of nitrogen dioxide and 
carbon particles are highly 
pollutive. 

RhOne-Poulenc France, tel 4768 
1234: fax 4763 1911 


A quicker lease of 
life for batteries 

A common complaint From users 
of equipment such as laptop 
computers is the time it takes to 
recharge batteries. Most chargers 
take several hours, while those 
that work more rapidly usually 
shorten the batteries' life. 

MB Special Batteries, a 
Sussex-based company formerly 
owned by Duracell Batteries, has 
introduced technology which cats 
the charging time for nickel 
cadmium or nickel metal hydride 
battery packs to less than 30 
minutes, while extending the 
battery life by around 50 per cent 

Hie DSB system uses a charge 
control chip, developed by 
Integrated Circuit Systems of the 
US. which avoids shortening the 
life of the buttery by stopping the 
process before It is fully charged. 
It speeds up the charging process 
by including a discharge pulse in 
every charge cycle which prevents 
crystalline deposits from forming. 
The discharge pulse also 
overcomes the “memory” effect 
whereby batteries that are not 
fully discharged before 
recharging lose their capacity to 
become folly charged. 

DSB: UK tel. 0293 611930; fax. 
0293403396 


'A * 

;u l 


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17 


★ 


ARTS 


Theatre / Malcolm Rutherford 

Rambling 

through 

history 

that will give them a homo 


D avid Edgar’s new 
play could be a 
thriller about art 
and the work of art 
historians. It could be about 
the plight of asylum-seekers in 
south-eastern Europe. It might 
be comedy, satire or melo- 
drama In fact, Edgar ha« flung 

in a bit of every thing 
Pentecost is at times literally 
a babble of voices, Christian, 
Moslem, Jewish, agnostic - a 
collection of people who have 
been displaced by the end of 
cammunian in Europe and the 
hostilities in the former Yugo- 
slavia Yet the play does not 
start like that. 

The set, designed by Robert 
Jones, is an abandoned church 
near the border of an unnamed 
country in the Balkans. The 
mural behind what must have 
been the altar is a slice of 
socialist realism. It is what lies 
underneath that matters. 
Could it have been Giotto or, 
even more tantalisingly, a 
work that foreshadowed Giotto 
about a century beforehand? 

A female local curator tries 
with increasing success to con- 
vince a visiting British art 
expert that it is the latter, 
though he is careful to say that 
his subject is contemporary, 
not pre-Renaissance. Still, it 
looks like one of the biggest art 
discoveries of ah time. Then an 
American arrives to dispute 
tbe findings. 

Meanwhile the local Catholic 
and Greek Orthodox priests are 
quarrelling about repossession 
of the church. The minister for 
restoration in the new regime 
is suspicious of all Foreigners 
who might want to claim the 
painting. 

All that would be enough for 
a play in itself, even one - like 
Pentecost - lasting three hours. 
Just before the interval, how- 
ever, there is an intemiption. 
In storms a group of refugees, 
taking hostages and demand- 
ing safe passage to a country 


The second half is largely a 
v ehi cl e for letting the refugees 
exp la in their various origins, 
as well as the affinity that etm 
develop between captives and 
captors. I shall not say how it 
ends, though it is with a bang. 

Tbe common thpmo is that 
in this part of tbe world pop- 
ulations have shifted through- 
out the centuries as invaders 
came and went The end of the 
Soviet empire is only one mare 
change. Yet the price of all 
that shifting ha« been inrv 
of a defined identity. 

With the collapse of commu- 
nism and Soviet rule, some of 
the characters would like to 
join the “European dub”, but 
are not sure what the dub is, 
nor whether Europe wDl have 
them. 

In its present form, Pentecost 
is a slightly rambling piece. 
Nevertheless, Edgar writes 
well, as usual, has some fun 
with the linguistics and has 
clearly dime his research on 
art history as well as the Bal- 
kans. He is good, without being 
obscure, at having characters 
discuss ideas on stage. 

Sometimes, too, he comes up 
with a surprise. The most stri- 
king character in Pentecost is 
the American art academic 
who enters like a freelance 
photographer looking for a 
war, but turns out to have con- 
siderable expertise - and 
humanity. This is an 
performance by Unal Haft 

I Hked Jan Ravens with her 
funny English as the local 
curator. On the other hand, 
Charles Kay as the British art 
expert is a little too much 
stock En glishman. Direction is 
by Michael Attenborough; the 
piece should he cut by about 20 
minutes before it comes to 
London. 


The Other Place, Strat- 
ford-upon-Avon. Pentecost is 
financially s up ported by JBA. 



AIMtlU 

Jan Raven as the local curator in David Edgar's 'Pentecost': UteraDy a babble of voices 


Ballet/ Clement Crisp 

Bastille a witness to dancers’ pride 

Four Temperaments still 


T he Palais Gamier is 
closed for 

refurbishment, and tbe 

Paris Opfra Ballet has moved 
for this season to the Bastille 
Opera. I think tbe Bastille a 
wonderful bouse: habrtttes 
complain about the constant 
need to go up and down stairs, 
but it Is an airy, grand and 
welcoming place in which to 
see the lyric arts, and 
magnificently planned for its 
public. 

To marie the start of the • 
ballet season in its new home, 
the first programme - 
Balanchine and Robbins 
choreographies - begins with 
a Grand DtfQi. Impossible to 
reproduce that sense of 
infinity we know with a dffiU 
at the Palais Gander as file 
cohorts of school and company 
process from the chandeliered 
and mirrored depths of the 
Foyer de la Danse - theJine 
may not stretch to the crack, of 
doom, but it goes back, 
symbolically speaking; 
to the age of Louis XIV, 


founder of this temple. 

But Francoise S£guin has 
devised a setting which 
cleverly echoes the Bastille's 
architecture to provide a 
comparable idea of a long 
tradition. A carved perspective 
leads down a ramp on to the 
stage. There we first see a petit 
rat, who takes a simple pose 
and leads on the girls from the 
school as the march from Les 
Troyens rings out There 
follow the female ranks of the 
company, each led by an tootle, 
then the boys of the school, 
and tbe mm of tbe troupe, 
each grade led by a star. 

Masses of applause, and 
splendidly stellar behaviour 
from the 6toiles as they reach 
the front of the stage at 
slightly hastened pace to greet 
their adoring public with 
smiles and glances imperious 
or beguiling. It is irresistible 
as spectacle, and how _ 
revealing about the pride of 
the dancers and of the French 
public - and the French public 

purse ~ in the Opira as a 


spiffing example of a nation's 
art. Would we could fed the 
same about our national 
ballet its funding and its 
popular image. 

The parade over, we had the 
joys of two Balanchine works 

- Le Palais de Cristat and Four 
Tempera me nts- and Jerome 
Robbins’ GlassPieces. Le 
Palais de Cristal is tbe Opera’s 
very own Balanchine, made in 
1947 when the choreographer 
was resident in Paris. It is 
known elsewhere as the white 
and sparkling Bizet Symphony 
in C. But at its creation in 
Paris it bad a highly coloured 
and complex design by Leonor 
Uni, and was danced in a 
manner more - shall we say? 

- temperamental than wb 
know nowadays with New 
York City Ballet (Its 
original east included 
Tamara Tomnanova in the 
adagio, Lycette Darsonval, 
MfeheTtne Bardin, MaHftMne 
Lafion - each a vivid 
personality.) 

Their example, the Fhd 


costumes and the original 
Balanchine text Unger on. At 
Tuesday night’s opening of the 
season, Mouique Loudteres 
gave a most begmting account 
of the second movement 
adagio, deploying the complete 
baHerina battery of technique, 
personality and a femininity 
that coloured every movement. 
It was an irresistible and 
pnrfism ftn p perfo rmance, the 
epitome of a particular charm 
and grace of maimer. The 
piece looked very good in this 
Parisian version. The 
g raywttng r Pntr Te mp e rame nts 
was no less fine on the 
absolute and uncompromising 
terms of New York’s 

BalaaeMm, 

As if to prove her 
versatility, MB* Loudteres 
danced the “Sanguine" duet 
with ideal clarity, weD 
partnered by Jean-Yves 
Lormean. Kader Belartri as 
Melancholic, Patrick Dnpond 
as Phlegmatic, Carole Arbo as 
Choleric, caught the style well. 
After nearly half a century, 


looked inevitable and 
prophetic in tins performance. 

Robbins’ Glass Pieces, which 
closed the biH, might have 
been made for the BastiBe 
stage. The graph-paper setting 
matches the house's 
architecture. The mechanical 
crossing and re-crossing of the 
stage that start the piece are 
matched by the crowds an the 
Place de la Bastille or In the 
Metro. It is an oddly heartless 
and urgent work, and Robbins 
gives the driving repetitions of 
Philip Glass' music a human 
intensity. 

It is a ballet I admire rather 
than like, but the Op£ra cast 
are superb, robot-like or - in 
tbe pas de deux weD done by 
Marie-€laude PietragaDa and 
Jean-Marie Didifire - 
hieratically moving. Vaut le 
voyage. 


The Paris Opera Ballet repeats 
the progra mm e on October 81, 
November 1,4,6 matinee, 
8 , 10 , 12 , 18 , 18 , at the Bastille. 


Theatre/Alastair Macaulay 

Hopkins reigns over 
impressive Chekhov 


W hen you see 
Anthony Hopkins 
on stage, you 
realise that he 
has a force of temperament 
(also of physique and voice) 
that is rare in our theatre: and 
that this is coupled to a gener- 
ally surprisingly low level of 
energy. The effect makes him 
seem, much of the time, like a 
dormant volcano. He does not 
come on and electrify or gal- 
vanise; what fires he reveals 
have already been long smoul- 
dering w ithin 

Re is currently appearing at 
Tfaeatr Clwyd as a Welsh Uncle 
Vanya, or Uncle Ieuan (pro- 
nounced Yuyan, rhyming with 
Guy-an) in August, Julian 
Mitchell's new adaptation of 
Chekhov's classic; and , thnng h 
he has assembled an ex- 
cellent troupe of coactors with 
hhw, ft is easy for him to domi- 
nate. 

This is not to say Hopkins 
out-acts the others. Everything 
he does has weight and inter- 
est; and you can only admire 
the way he has kept finding 
new roles to pytmd himsAlf 
His Ieuan is a shambolic, tot- 
tering study in despair, a gen- 
erous mind caustically embit- 
tered by unrequited love and 
unacknowledged toil, a sturdy 
type crumbling as he perceives 
the end of all his hopes. He is 
always impressive; entertain- 
ing, too; and he can maltp him- 
self by turns absurd, pathetic, 
infuriating. The way his voice 
combines leonine power and 
dolcisstmo tenderness is rivet- 
ing, and the wavering off-bal- 
ance deportment he gives to 
Ieuan acutely sums up the 
character. He is not, however, 
invariably persuasive. The big 
tirade explosion of Act in is 


too blustering, the shambling 
antics sometimes overdone, 
and he too frequently inter- 
rupts or undercuts other act- 
ors. 

This version of Uncle Vanya 
- Hopkins’ first venture as a 
director - is connected to one 
of several (1) Vanya films at 
present - for example, Louis 
Malle’s Vanya on 42nd Street. 
Hopkins has already directed 
August for Granada Film, 
using several of his current 
cast, filming it near Theatr 
Clwyd. Maybe he will seem 
even more the star of the 
movie version. 

On stage, however, I wish he 
had cast himself against, in 
particular, a stronger Astrov 
(or. here. Dr Lloyd). Gawn 
Grainger, who plays this role, 
is an excellent actor in the 
wrong part: he has more ele- 
gant detachment and ironic 
languor thaw this virile role 
needs. 

B ut Hopkins knows that 
this is an ensemble play. 
He certainly gives 
Grainger full scope to brand 
Lloyd on our minds, and he 
has produced sharp character 
studies all round. His way with 
Chekhov is basically in the 
Stanislavky tradition: full of 
realistic detail, and a succes- 
sion of evocative off- 
stage sounds (birdsongs, 
chinch bells, piano music). 

With the help of handsome 
designs by Eileen Diss (sets) 
and Dany Everett (costumes), 
he anti his adaptor, MitchpH 1 
have placed the action cm a 
large Welsh estate during the 
1890s - to take away bogus 
Russian mystique. 

There are still times when 
Chekhov's thought remains 


unalterably Russian, but 
mainly the effect is adroit. 
Especially in the very English 
moans of Professor Brathwaite 
(Serebryakov) against Wales 
(“Wales! It’s tike living in 
exile ... I feel as if I’ve fallen 
off the earth on to some undis- 
covered planet” "Wales," here, 
is what, in Chekhov, is simply 
“the country”; the Professor 
will retire to Chelten- 
ham. 

As the urbane, testy, selfish 
professor, Leslie Philips gives 
one of the two sharpest char- 
acterisations. The other comes 
from Hugh Lloyd as a down- 
trodden mouth-agape, shuffler. 
And no one gives a poor perfor- 
mance - however, vocal protec- 
tion in general is not strong 
enough, and several soliloquies 
were slightly dull. 

Lisa Orgolin is Helen/Yelena, 
utterly convincing as an Amer- 
ican beauty (even if I am not 
convinced that any American 
beauty in 1890s Britain would 
regard herself as "always a 
minor character”); and Rhian 
Morgan, is tou ching as Sian/ 
Sonya. 

Everyone reacts to one 
another with such accord that 
the stage world acquires the 
strange multi -dimensional real- 
ism of the best Chekhov. At 
tbe end, while Sian speaks of 
present work and future peace, 
Ieuan - seated beside her - 
crumbles before our eyes, Pros- 
ser plays his mouth organ, and 
the two old women - Gwen / 
Marina (Menna Trussler) and 
Mair/Marya (Rhoda Lewis) - 
sit motionless on either 
side.in the evening still- 
ness. like a pair of Whistler's 
mothers. 


At the Theatr Clwyd, Mold. 


Concert/Paul Driver 

Clarity and intensity 


N o sooner had pianist 
Mitsuko Uchida 
begun her South 
Bank series of solos 
juxtaposing Schubert's and 
Schoenberg's music, than pia- 
nist Andri s Srhiff and friends 
la unched their little Intimate 
Letters festival (underwritten 
fay Mrs Jackie Rosenfeld) at the 
Barbican Centre in which 
Schubert was paired with a 
composer who seems no more 
likely a bedfellow, LeoS Jan&- 
Sek. 

They woe bom within a few 
hundred Austro-Hungarian 
miles of each other, Schubert 
in 1797 and Janfr&k in 1854, 
but the gentle LOndler influ- 
ence on the first and wilder 
Bohemian influence on the sec- 
ond are not very comparable, 
just as Janfrfiek’s compressed, 
elliptical, nuggety way of writ- 
ing contrasts starkly with 
Schubert’s serene lyrical 
expansiveness. 

Schiff, who tried out the idea 
at his 1991 chamber music fes- 
tival in Mondsee (near Salz- 
burg), believes, however, that 
the two “strong individual” 
voices “work beautifully 
together” and be is probably, 
though indefinably, right 
Tbe concert he gave in Bar- 
bican Hall with violinist 
Yuuko Shiokawa and cellist 
Miklds Pertnyi interwove Jan- 
fifiek’s Pohddka (“Fairy Tale") 
of 1910 for cello and piano, 
Schubert's melodious Nottumo, 
D897, for piano trio, Jankfiek’s 
violin sonata (1922) and Schub- 


ert's E flat piano trio, and was 
deeply satisfying- That is 
almost an understatement: 
their account of the great 
Schubert trio with its vastly 
sustained finale was a mirarfp 
of ensemble intelligence, a lad- 
der leading straight to musical 
heaven. The stray slow move- 
ment of D897 was no less of a 
joy: here, as in the large-scale 
work, Schiff perfectly caught 
that sublime diaphanous qual- 
ity so notable in Schubert's 
writing for piano-with-ensem- 
ble. But he showed an equal 
sensitivity to the far other 
idiom - taut, nervous, abrupt, 
turbulent - of Jan&ek’s piano 
writing; his flurries of notes 
had a wonderfully decisive 
clarity and both his duet part- 
ners played with searching 
intensity. 

S chiff took a modest part 
in the concert given ear- 
lier the same evening by 
James Wood's admirable New 
London Chamber Choir and 
the G uildhall Cham ber Ensem- 
ble over the water at St Giles, 
Cripplegate. We heard Jand- 
fiek’s three works for female 
chorus, all composed in 1916 
when men had better - or 
worse - things to do than sing. 

They proved tntriguingly 
diverse in texture, the grim 
narrative of The Wolfs Trail 
calling not just for the piano 
obbligato which Schiff supplied 
but for a tenor who intermit- 
tently shrieks; tbe gently patri- 
otic Songs of Bradtxmy subtly 


coloured by flute and harp; the 
pacey ballad of KaSpar RuckQ 
stirring up a sonorous devil’s 
brew. The best item was the 
sequence of 19 pithy nursery 
rhymes, RAkadla (1926). for 
small mixed chorus and a 
bright ensemb le hudiiding oca- 
rina and child ’s drum. If the 
ea rlier choruses were unusual, 
this was oddity running riot, 
and the result a masterpiece. 

Schubert is rarely if ever 
odd. Two of his piano-accompa- 
nied. female-voice part-songs 
opened the final concert of the 
mini-festival last Wednesday at 
Barbican Hall. Wood’s New 
London ladies with Schiff s 
exquisitely weighed accompa- 
niments found the full measure 
of limpid classical beauty in 
Psalm No. 23 (D706), Gott in der 
Nairn (D757) and, with soloist 
Sarah Walker, in StOndchen 
(D920), which was at once 
repeated. 

That relaxed gesture only 
confirmed the resemblance of 
this programme - greatly 
altered by the indisposition of 
Ann Murray and Philip Lan- 
gridge, who should have been 
giving Janfifiek’s Diary of One 
Who Disappeared - to a Schub- 
ertiad. 

Schiff offered pellucid perfor- 
mances of two Schubert sona- 
tas, and if be missed the massy 
raptness of the G major (D894) 
- the molto moderato first 
movement being taken almost 
trippingly - he brought to the 
A minor (D784) a most moving 
simplicity and restraint 


I INTERNATIONAL \ 

1 A ~ 1 

Af 

ITS 

GU 

IDE 




Potter’s Animals 

The first survey ever devoted to 
the work of the Dutch painter 
Paufcis Potter (1625-54) opens 
early next month at the 
Mauritshuis in The Hague- It w* 

bring together 30 paintings and 
more than 20 drawings. tacHtainS 
loans from museums and prorate 

collections throughout the 

world. 

The exhibition aims to 

demonstrate Potter's vereaSHy 
and the ingenuity with whtah he 
depicted rural Holland. White 
animals had figured prominently 
in the work of earlier artiste. 
Potter was the first to specra^ 3 ® 
in animals. He was the son of a 
painter and very precocious > - n» 
first works are dated 1640. and 
We most famous picture, the 
monumental “Young Bull . ’ 
completed when he was zz. ne 
<Sed aged only 2& . ^ 

Potter's precise randeifogw 
detail heightens the famffiority 

everyday scenes: bones, muscle 

and hide are dearly . 

distinguish ible in his rendenng or 


cattle, and his paintings always 
specify the climate and time of 
day and year. 

In addition to animals and 

repres e ntations of cattle in 

pasture, farmsteads were a 
favourite sdJject “The Large 
Farm" (1649), on loan from the St 
Petersburg Hermitage, 
su mma rises Potter’s entire 

oeuvre. More than 90 animate and 

10 figures are grouped together 
ln a balanced composition rich 
with anecdote- He also painted 
landscapes and genre pieces, 
never shying away from crude 
details such as urinating cows 

and homes, defecating peasants 

and ribald hunters. 

The exhibition, sponsored by 
Unilever, runs from November 8 
tin February 5. 


EXHIBITIONS 


turn Odilon Redon 
I works exploring 
(6 nature and 
Is of Redon’s work 
etween 19th 
asm and 20th 
m. Ends Jan 15. 

nt Asger Jom 
first retrospective 
ist for many years, 
js and a large 
igs from museums 
ctions. Ends Nov 

-emandLAger 
-a than 100 exhibits 


private collections. 

Ends Nov 27. Closed Mon 
Museum tOr Qegenwart sk unst 

Gary H® (b1951): a series of new 
installations and videos by the 
American artis t Ends Jan 29. 
Closed Mon 
BERLIN 

BrOcke Museum Early Kandinsky: 
a survey of a Utile-known period in 
the German Expressionist's 
development before he made his 
first abstract painting in 1910 at the 
age of 44. Ends Nov 27. Closed 
Tues 

Altes Museum Bdorado: 
pre-Columbian gold treasures from 
South America. Ends Jan 8. Closed 
Mon 

Kunstgewerbemuseun Gianni 
Versace: retrospective of the Italian 
fashion des&ier, including sketches 
and theatre costumes. Ends Nov 
25. Closed Mon 

CHICAGO 

Art Institute Karl Friedrich Schinkel 
(1781-1841): 100 drawings and 
prints by the influential German 

architect, on loan from public 
collections in Berlin. Ends Jan 2. 
Daily 

DRESDEN 

K mjfo r a ti ch Kafainett James 
McNeill Whistler a rare German 
showing of etchings and 
lithographs. AH 62 exhibits were 
collected in Dresden between 1882 
and 1919, and are befog exhibited 
for the first time. Ends Nov 25. 
Closed Sat and Sun 
Albertmum Christian Friedrich Gffle: 
the most. comprehensive exhibition 
yet devoted to the 19th century 
German landscape painter. Ends 
Nov 27. Closed Thus 
FRANKFURT 
JucEsche Museum The 


Rothschilds: an evocation in 
painting of the 256-year history of 
the famous Jewish dynasty. Ends 
Feb 27 

Schtin KunsttaBe Nicholas de 
Stael (1914-55): retrospective of the 
Russian- bom. artist, documenting 
his intense but tragically brief 
career. Ends Nov 27. DaBy 
JahrhunderthaSe Hoechst 

Contemp or ary Art from Ihe • 
Collections of Frankfut Banks. 

Ends Nov 20. Daily . - 
Deutsches ArcWtekturm upoum 
Contemporary Architecture in Brazil. 
Ends Nov 6. Closed Mon 
GLASGOW 

Hunte ria n Art Gallery Five 
Centuries of Colour Woodcuts: the 
aesthetic and technical history of 
the colour woodcut from the earty 
16th to the 20th centray, including 
a magnificent .set of 18th century 

examples by the En^sh artist John 
Baptist Jackson. Ends Dec 17. 
Closed Sun 

HAMBURG 

Kunsthafle Rembrandt and his 
Century: Netherlandish drawings 
from the 17th century. Ends Jan 15. 
Closed Mon 

DeichtorftaBen Keith Haring 
(1958-90): 100 large-scale paintings 
aid ceramics by the 
poUticalty-motivated American artist 
Ends Nov 13. Closed Mon 
LONDON 

National Gallery The Young 
Michelangelo. Bids Jan 15. Daily 
Tate Gafiery James McNeil! 
Whistler the largest collection of 
the American-born artist's work 
since the memorial exhibitions held 
after his death In 1903. Ends Jan 8. 
Rebecca Horn retrospective 
(coinciding with another Horn show 
at the Serpentine Gallery). Ends Jan 


8. Daly 

Hayward Gaflery The Romantic 
Spirit In German Art 1790-1990. 
Ends Jan 8. Dafly 
Royal Academy of Arts The Gtory 
of Venice. Ends Dec 14. Italian 
Renaissance Book EDumination. 
Ends Jan 22. DaBy (advance 
booking 071-240 7200) 

Royal Festival HaB KSthe KoUewitz 
(1867-1945): a collection of the 
German artist’s powerful and 
emotive prints- Ends Dec 4. Dally 
MADRID 

Rndad6 la Catxa Kandfosky and 
Mondrian - Two Roads Toward 
Abstraction: this exhibition marks 
the 50th anniversary of the deaths 
of two great pioneers of modem 
art Ends Nov 13 (after which it wfll 
transfer to Barcelona). Closed Mon 
Fimdadon Juan March Treasures 
of Japanese Art 110 works from 
the 17th to 19th century, on loan 
from Tokyo’s Fuji Art Museum. 

Ends Jan 22. Dally 
MUNICH 
Kunsthafle d*r 

Hypo-Kuftursfiftung Edvard Munch 
and Germany. Ends Nov 27. Daily 
Haus der Konst Roy Lichtenstein 
retrospective. Ends Jan 9. Closed 
Mon _ 

Lenbachhaus Tanzania: 400 
masterwortes of African scripture. 
Bute Nov 27. Closed Mon 
NEW YORK 

Motropoflton Museum of Art 

Origins of Impressionism: a 
landmark exhibition of 175 paintings 
by Parisian artists of the 1860s. 
Ends Jan 8. The Armen berg 
Coflection of Impressionist and 
Post-Impressionist Masterpieces. 
Ends Nov 27. William de Kooning’s 
paintings. Ends Jan 8. The 
Photographs of Edouard Bald us 


(1813-1889). Ends Dec 31. 

Closed Mon 

Museum of Modem Art Cy 
Twombly (b1929): retrospective of 
the American artist who moved to 
Italy in 1957. Ends Jan 10. The 
Prints of Louise Bourgeois. Ends 
Jan 3. Mapping: paintings, 
drawings, photo-composites and 
sculptures by around 20 modernists 
who have made map Imagery a 
principal focus of their work. Ends 
Dec 20. Closed Wed 
Guggenheim Museum The Italian 
Metamorphosis 1943-1968: a 
survey of visual, arts In the postwar 
period. Ends Jan 29- Japanese Art 
After 1945: a comprehensive history 
of Japanese avant-garde art over 
the past 50 years (at So Ho). Ends 
Jan 8. The mam musewn is closed 
on Thurs, the SoHo site on Tues 
Brooklyn Museum Indian Miniature 
Paintings: 80 jewel-like paintings 
from the 15th to 19th centuries, all 
from the permanent collection. 

Ends Jan 8. Closed Mon aid 

Tues 

PARIS 

Grand Palate Poussin: 400th 
armivarsary retrospective. Ends Jan 
2. Gustave CaHlebotte (1848-1894): 
retrospective of the painter and 
patron of art Ends Jan 9. Closed 
Tues, late opening Wed 
Mus£e cTOrsay Forgotten 
Treasures from Cairo: a surprisingly 
rich collection of works by Ingres, 
Coutret, Monet, Rodin and 
Gauguin. Ends Jan 8. Closed Mon 
Louvre British Art in French Public 
Collections: paintings by 
Gainsborough, Reynolds, 

Constable, Lawrence, Turner and 
others. Ends Dec 19. Closed Tues 
(Hall Napoleon) 

MusOe Camavaflet The English in 


Paris in the 19th Century: le style 
anglais in the aftermath of the 
Napoleonic wars, comprising 
French caricatures of the English 
milord and English painterly 
evocations of Parisian excesses. 
Ends Dec 11. Closed Mon (23 rue 
deS6vign6) 

Instftut du Monde Arabe Delacroix 
in Morocco: Delacroix's visit in 
1832, when he was 34, made a 
lasting impression on his art Ends 
Jan 15. dosed Mon (1 rue des 
Fosses Saint-Bemard) 

Petit Palais From Baghdad to 
Isphahan; 70 Islamic manuscripts 
evoking the ancient dvtOsatjon of 
central Asia, on loan from the 
Institute of Oriental Studies In St 
Petersburg. Ends Jan 8. Closed 
Mon 

ROTTERDAM 

Museum Boymans-van Beunfogen 
Van Eyck to Bruegel: 98 Dutch and 
Flemish paintings from the period 
1400-1 55a Ends Jan 22. Aiaxej 
Jawtensky (1864-1941): 
retrospective of the Russian-bom 

artist who was a member of 
Kandinsky's circle in Munich. Ends 
Nov 27. Closed Mon 
VIENNA 

Kunstforum Herbert BoeckL 
centenary retrospective of the 
Austrian Expressionist, with a 
representative selection of 
landscapes, figures and religious 
subjects. Ends Dec 4. 

Daily 

Kunsdertnus Egyptomanla: 300 
exhibits showing the influence of 
Egyptian art on European painters, 
sculptors, authors and architects 
from the baroque period to the 
present day. Ends Jan 29. 

Dally 



is 


FINANCIAL. TIMES 


FRIDAY OCTOBER ,ljgj 


T here was a time when 
one of the world's saf- 
est investments was a 
bond issued by the 
government of Canada. With a 
stable political system, a solid, 
sophisticated economy and a 
reputation for prudence, Can- 
ada was among a handful of 
sovereign borrowers that could 
boast a trlple-A credit rating. 

Canadian bonds are no lon- 
ger such a safe bet Together 
with Sweden and Italy, Canada 
is now at the top of the list of 
industrial countries where pub* 
lic-sector profligacy has 
reached dangerous propor- 
tions. “We are in hock up to 
our eyeballs,” finance minister 
Paul Martin bluntly told a par- 
liamentary committee in Ott- 
awa last week. 

The federal government’s 
debt will reach C$550bn 
(£250bn) early next year, bring- 
ing the ratio of debt to gross 
domestic product, a common 
measure of a country's ability 
to service its debt, to 74 per 
cent More than a third of Ott- 
awa's revenues is now chan- 
nelled into interest payments, 
up from 11 per cent in 1974. 

But this is by no means the 
full extent of the problem. The 
10 provinces and public utili- 
ties, such as Ontario Hydro 
and Hydro-Quebec, are also 
heavy borrowers. Ontario, for 
example, is among the most 
active non-sovereign borrowers 
in the euromarkets. At the end 
of the current fiscal year, the 
provinces will have a combined 
debt burden of more than 
C$200bn, or 28 per cent of GDP. 

“The sheer magnitude of 
Canad a’s foreign debt in rela- 
tion to the size of the economy 
means that Canada has be- 
come excessively vulnerable to 
the volatile sentiments of 
global financial mar kets," was 
the warning in a document dis- 
tributed by Mr Martin's depart- 
ment last week. "We have suf- 
fered a tangible loss of 
economic sovereignty.” 

Such warnings do not appear 
misplaced. The proportion of 
Canada’s total debt held out- 
side the country is now equiva- 
lent to 44 per cent of GDP, with 
more than a quarter of the fed- 
eral government's debt in for- 
eign hands. According to one 
senior Toronto banker, it 
would not take much, in such 
a finely balanced situation, to 
engulf Canada in a full-blown 

financial crisis. 

Investor confidence appears 
to be holding up. but it is frag- 
ile. The gap between Canadian 
and US bond yields has 
recently narrowed, with the 10- 
year spread down to 1.27 per- 
centage points from more than 
L6 points in July; This would 
normally indicate favourable 


Loss of 
prudence 

Bernard Simon on Canada's 
big government debt burden 

Canadas a fate worse than debt 


Federal government gross public defat 
As % Of OOP . 

70 



40 .**•;**. '■ BTjip a*. . ; ar, 

Ten-year^encftmadt p&tyjkM' i ■ J ‘ 

to% — — ~ 




9% •• 

li/ 

r 



r 


7 %. 


6%L 


1983 


Sc**-*®: Croten Opawwntof Franc* ftrtaKrwam 


1994 


investor sentiment. However, 
with inflation virtually non-ex- 
istent in Canada, real returns 
are extraordinarily high. The 
real return on Canadian bonds 
is more than 9 per cent, 
against about 3.3 per cent on 
comparable US treasury bonds. 

Some warning shots have 
been fired across Canada's 
bows. The triple-A rating has 
gone. Moody's, the US credit- 
rating agency, has downgraded 
half of Canada's 10 provinces 
over the past three yeans, and 
upgraded none. The agency 
has also warned that “high 
public-sector deficits and 
uncertainties regarding the 
new Quebec government’s sov- 
ereignty goals could further 
agitate the debt markets". 

High deficits are certainly 
agitating Canadian business 
leaders, who charge that they 
constitute the most serious 
drag on the country's long- 
term economic prospects. 

The Business Council on 
National Issues, which repre- 
sents 150 chief executives, 
recently noted that the “fiscal 
crisis” had given Canada “real 
interest rates that are among 
the highest in the industria- 
lised world, a devalued cur- 


rency, an alarming amount of 
foreign indebtedness, declining 
confidence among Canadian 
and foreign investors in the 
management of Canada’s pub- 
lic finances, the export of capi- 
tal, and the expectation that 
taxes will rise even higher to 
deal with bloated deficits.” 

p-awfl<tian politicians’ record 
on fiscal policy is dismal. The 
former Progressive Conserva- 
tive government, which held 
office in 1984-93, missed almost 
every deficit-reduction target, 
and the budget shortfall in its 
final year in office was a 
record C$42biL 

M aking matters 
worse. Ottawa 
has little control 
over the prov- 
inces’ fiscal policies or borrow- 
ing activities. Yet transfers to 
the provinces, to help fund 
health, welfare and education, 
consume about 23 per cent of 
federal spending, excluding 
debt-service. The federal gov- 
ernment and most of the prov- 
inces have so far avoided 
spending cuts in social pro- 
grammes. although these 
account [or almost 60 per cent 
of federal spending. 


Weary of carrying one of the 
world's heaviest tax burdens, 
Canadians appear willing for 
the first time in decades to 
accept public service cutbacks. 
The Conservative government 
in Alberta Is one of the most 
popular in the country, despite 
closing schools and hospital 
beds, and privatising many 
public services. Thanks partly 
to rising oil revenues, Alberta 
is on track to achieve a bal- 
anced budget in fiscal 199637. 

Mr Martin has now put bis 
Liberal government's credibil- 
ity on the line by promising to 
chop the federal deficit from 
C$42bn or 5.4 per cent of GDP 
last year to about CS25bn or 3 
per cent in 199697. "It is a tar- 
get we will meet, come hell or 
high water,” he said last week. 

He plans to outline specific 
deficit-cutting measures in 
next February's budget 

He will be helped by acceler- 
ating business activity, which 
has begun to boost tax reve- 
nues. While federal and provin- 
cial deficits were fuelled by 
overspending during the 1980s, 
stagnant revenues have since 
been the main reason for the 
failure to achieve deficit-reduc- 
tion goals. 

However, there will also 
have to be cuts in social pro- 
grammes. Mr Uoyd Axworthy, 
minister responsible for over- 
hauling the social-security net 
has yet to convince the busi- 
ness community that he is will- 
ing, or able, to maka substan- 
tial savings. 

Fearful of a political back- 
lash, Mr Axworthy published a 
paper earlier tins month which 
raised numerous options, but 
contained no firm proposals. 

He aims to introduce legisla- 
tion next spring. But the time- 
table could slip as special inter- 
est groups and the provinces 
resist change. And Mr Axwor- 
thy has avoided the thorny 
issue of pensions, which the 
previous Conservative govern- 
ment tried, bat foiled, to tackle 
almost a decade ago. 

In February's budget, there- 
fore, Mr Martin is likely to foil 
back on tax increases and the 
closure of tax loopholes to 
reach his target. 

For financial markets, an 
austere 1995 budget would be 
no more than a start in tack- 
ling Canada’s debt problem. A 
C$25bn deficit in 1998-97 would 
stabilise the debt-toLJDP ratio, 
but not reduce it significantly. 

Mr Martin has given no time- 
table for achieving his 
long-term aim of a balanced 
budget. In view of the broken 
promises of the past, he and 
his provincial counterparts 
will need to build a track 
record before holders of Cana- 
dian bonds ran relax. 


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THE AMERICAN EXPRESS CARD IS WELCOMED BY CLUB EUROPE. THE ULTIMATE IN SPACE TRAVEL. 

British Airways 

The worlds favourite airline ^ 



High 

Just as he was 
beginning to 
get a grip on 
the conduct of 
our affairs, Mr 
John Major had 
to go and mess 
it up. One min- 
ute he was the 
new John Major, confident, in 
command, of well-modulated 
voice and upright mien; the 
next he was the familiar old 
John Major, improvising in a 
crisis, fumbling, blustering, 
cornered, on the run. The new 
PM, on display in Belfast last 
week, glowed with that special 
authority that comes from 
experience, survival, and, over 
Ulster, possible success. He 
looked as if he might well van- 
quish Mr Tony Blair, the 
young man who has come from 
nowhere to lead the Labour 
party. The old PM. back in the 
House of Commons this week, 
dangled and danced on the 
political stage, once again the 
puppet of events. 

It is enough to bring tears to 
your eyes. It is not Mr Major’s 
fault that by the time he 
became prime minister four 
years ago his party had already 
won too many elections in a 
row for the country’s good. As 
we have seen in Japan and 
Italy, parties that govern for 
too long turn corrupt. The 
cases are different: the known 
and alleged instances of greedy 
or careless acceptance of 
favours or cash by British 
elected officials are, by com- 
parison with what has been 
reported in Italy, Japan, 
France and elsewhere, pica- 
yune affairs in which reputa- 
tions have been lost, and 
offices forfeited, for the small- 
est of small change. Nor is it 
certain that every would-be 
purchaser of British govern- 
ment influence has received 
value for money. 

For honourable as some of 
them affect to be, not all 
Britain's Conservatives accord 
proper respect to the principles 


Joe Rogaly 

cost of baksheesh 


of baksheesh. The word, 
derived from the Persian “to 
give”, implies a return of some- 
thing to the giver. Some of our 
cheapskates take the bribe, but 
foil to deliver the goods. That 
appears to be the essence of Mr 
Mohamed Fayed's highly publi- 
cised series of complaints 
against various Tory MPs and 
ministers. If so. the Egyptian- 
born financier is not wholly 
correct. There is prima fade 
evidence to suggest that other 
large-scale contributors to Con- 
servative funds have received 
whatever dividends the dis- 
creet use of patronage or influ- 
ence can provide. The chair- 
man of Harrods ought to have 

appreciated 

that you can 
always trust 
the ward of a 
Tory gentle- 
man, if you 
have a receipt. 

This is not to 
aver that an 


The accumulation 
of news about 
quick one-night 
stands, be they at 
the Ritz or in a 


ers are all, to a man. Tories. 
What the prime minister terms 
“public disquiet about stan- 
dards of public life”, is not 
that; it is public disquiet about 
standards of Conservative life. 
The Tories are perceived to be 
the source of connections, 
influence, trading in favours, 
the worship of money - the 
living embodiment of the 
excesses of the 1980s. In the 
report of Labour’s Commission 
on Social Justice, published on 
Monday, there is a reference to 
a phrase used by an American 
economist, Robert Kuttner, to 
wit “every business relation- 
ship is a one night stand”. 

So, it would appear, are 
many contem- 
porary Tory 
political-busi- 
ness relation- 
ships. Every- 
one can see 
that The accu- 
mulation of 
news about 


absence of pro- Commons bar, has t l uick one-night 
buy is a Coo- _ * - , stands, be they 

servative Severely damaged at the Ritz in 
monopoly. It the government Paris Or in a 
was the liber- ° Co mm ons bar. 

als under Lloyd has severely 

George who introduced mod- damaged the government. 


era marketing methods to the 
sale of peerages and honours. 
Past Labour governments have 
harboured villains of one sort 
or another. Certain Labour 
local councils are notoriously 
rotten. If the next government 
to be elected in Britain is a 
Labour one, and if it remains 
in office for two or more terms, 
then as sure as Lord Acton 
walked this earth, the continu- 
ous exorcise of power will turn 
the heads of some of even the 
saintly Mr Tony Blair's blessed 
colleagues. 

That said, it is the Conserva- 
tives who have been running 
the government since 1979. The 
ministers, MPs and party asso- 
ciates who have fallen from 
office, or come under suspi- 
cion. or squirmed under the 
pointing fingers of their accus- 


Nobody trusts the Tories any 
more. Last Friday it was 
argued here, as elsewhere, that 
if Mr Major is to regain the 
confidence oi the electorate in 
the good faith of his govern- 
ment he must make it his over- 
riding purpose to do so. He 
must understand the depth of 
mistrust, and respond accord- 
ingly. In this he Has foiled. 

He has in foct done the mini- 
mum possible, and that as 
camouflage. An all-party com- 
mittee that will sit under Lord 
Nolan will draw up rules for 
the future behaviour of holders 
of public office, hut it will not 
investigate existing charges; 
nor will it ever inquire into 
what individuals may have 
done. Some files have been 
assessed by Sir Robin Butler, 
the secretary to the cabinet 


Sir Robin has many excellent 
qualities, but he 1S . not , au 

inquisitor, and he does his 
business in private. Hearings 
will be held by the parliamen- 
tary committee of privileges, 
but Labour, rightly, insists 
that it should sit in public. Mr 
Major says this would be 

against precedent: so is the 
establishment of the Nolan 
committee. He says open inqui- 
ries would be contrary to natu- 
ral justice: as Mr Blair said 
yesterday, courts operate in 
public. Justice must be seen to 
be done. 

In any case, Mr Major's con- 
cern for natural justice is lim- 
ited by political expediency. He 
has retained two ministers 
against whom various allega- 
tions were deemed by Sir 
Robin to be ‘'unsubstantiated'' 
but dismissed one, Mr Neil 
Hamilton. I hold no brief for 
Mr Hamilton, but Mr Major's 
treatment of him is. to put it 
politely, inconsistent. Yester- 
day a new report appeared, in 
which Mr Jonathan Aitken 
was accused by The Guardian 
newspaper of lying to Sir 
Robin about a hotel bill. Mr 
Aitken has denied this, and Sir 
Robin has backed him up. 

The denials of such people, it 
Is intimated, must be taken on 
trust. Very well. But are we to 
take on trust the findings of 
the Nolan committee if it is not 
to investigate the finances of 
political parties? Mr Major has 
resisted this; another dodge. 
Mr Blair, whose sweetly rea- 
sonable approach is not always 
a match for the prime minis- 
ter's street-fighting, should not 
let this one go. Dubious money 
flows to parties, and notably 
the Conservative party, as well 
as to individual politicians. If 
Lord Nolan is as sharp now as 
he was on the bench he will 
interpret his terms of reference 
to include the consequences of 
political donations from sus- 
pect sources. Fate continues to 
play cat-and-mouse with Mr 
Major. 


LETTERS TO THE EDITOR 

Number One Southwark Bridge. London SE1 9HL 

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

Debt crunch round the corner 


Pressure on 
Canada to 
make cuts 

From Mr and Mrs R L SiUcox. 

Sir, We applaud you for your 
editorial “Canada’s debt 
dilemma" (October 25). which 
points out that Canada must 
run a primary budget surplus 
of 2.8 per cent of gross domes- 
tic product before its debt can 
begin to stabilise. Canada’s fed- 
eral and provincial debt totals 
100 per cent of GDP and to 
keep this from increasing, a 
budget surplus is now 
required, even assuming eco- 
nomic growth of 4J> per cent 

What most taxpayers here 
fail to understand is that very 
large spending cuts are 
required now - not tax 
increases. In a free country, if 
taxes are increased, there will 
be a flight ctf capital from Can- 
ada's high tax regime. 

Canadians hope our prime 
minister and bis cabinet have 
read and taken heed of your 
fine editorial - and do not 
increase taxes. 

R L and S SiUcox, 

RR 3. King City. 

Ontario. 

Canada LOG 1KO 


About right 

From Mr David Pollard. 

Sir, Geoffrey Martin, head of 
the European Commission. 
London, has strongly refuted 
press allegations that Britain's 
membership of the EU has cost 
£235bn, and added that public 
debate needs to be based on 
accurate information. A "back 
of the envelope" calculation 
(the Common Agricultural Pol- 
icy, ERM, handing-over of fish- 
ing zones, business losses 
through over-regulation, reduc- 
tion of Commonwealth trade, 
Brussels’ cut of taxes . . .) sug- 
gests that £300bn may not be 
for wrong. Does anyone know 
where accurate information 
can be found? 

David Pollard. 

Nelson & Pollard Publishing. 
Folly Bridge Workshops. 
Thames Street 
Oxford OX1 1SU 


From Mr Andrew Shouler. 

Sir. I hope your readership 
took the trouble to read Mr 
Jonathan Buffer's article on 
bond yields in an historical 
perspective (Personal View. 
October 25). Otherwise we may 
have to wait still further until 
there is a collective awakening 
to the peculiarly nasty debt 
crunch sitting round the 
comer. 

That the “real yields now on 
offer may... prove completely 
unsustainable to service" is 
not only a pointer towards a 
tendency to default, but is a 
reason to anticipate a vicious 
circle leading in that direction, 
as markets retreat accordingly 
and real rates rise further. 

Moreover, the fear that will 
produce a self-fulfilling proph- 
ecy may do so also on the fur- 
ther count of Inflation, as gov- 


ernments ultimately choose to 
reflate out of the deepening 
hole. The vicious circle may 
thereby be given both momen- 
tum and durability. 

It would be as comical as it 
is predictable if it were not 
deadly serious. Clearly, the 
dilemma is by no means con- 
fined to Canada, spotlighted by 
your editorial on the same day. 
America could be blamed for 
not hiking short rates fast 
enough to protect long rates, 
but perhaps it can smell the 
problem on its way. 

No, the most farcical non- 
sense is that perpetrated for 
the past five years in Europe, 
where the collective public 
debt/gross domestic product 
has reached a staggeringly 
high 72 per cent On the manic 
and indefensible pretext of try- • 
ing to convert Europe into a 


single state, a needless degree 
of slump was imposed with 
mindlessly protracted mone- 
tary tightness, and the error 
compounded with fiscal indul- 
gence. (When will the UK 
authorities admit out loud that 
the European dream is the 
most naked of emperors? This 
idiocy is something to rebuff 
outright, not slide towards sul- 
lenly.) 

This is a self-imposed night- 
mare. We have been paying a 
heavy price, and we will keep 
paying it until we rid ourselves 
of the statist, social democratic 
vanities of the political elite. 
Since they cannot see beyond 
the end of their noses, truly, 
we ain't seen nothing yet 
Andrew Shouler, 

155 Conway Gardens. 

Grays. 

Essex RM17 6HS 


A picture of the UK being 
increasingly marginalised 


From Mr Amcry Ball 

Sir, Joe Rogaly’s column, “A 
royal pipe-dream" (October 18), 
was excellent in drawing atten- 
tion to the decline, moral and 
otherwise, that Britain has 
sadly allowed itself to succumb 
to. As an ex-pat for the last TA 
years in the US, l have wit- 
nessed the UK’s increasing 
marginalisation with growing 
anxiety. 

While other European coun- 
tries get widespread coverage 
In US print and broadcast 
media with their trading, 
industrial and technological 
achievements, Britain’s cover- 
age seems limited to the latest 
folly about the royal femily or 
the government. Meanwhile. 
UK companies, advertising to 
US audiences, seem to perpetu- 
ate the stereotype of the Brit- 
ish class system. 

The full extent to which 
Britain has failed to get its 
message across about the role 
it can play came home to me 
the other day. An American 
friend was discussing renewed 
tensions in Kuwait and recal- 
led the Gulf war. “I think the 
best troops, apart from the 


Americans and the Israelis, 
were the Jordanians and the 
French," he said. He was 
unaware of the SAS raids on 
the Scuds (although John 
Major has since commented on 
them), or of the RAF low-level 
strikes against the Iraqi air- 
fields, or, indeed, of any British 
participation. 

The good things that Britain 
can do get overshadowed by a 
whole lot of absolutely trite, 
Irrelevant imagery that por- 
trays the country as a museum 
run by patronising dodderers 
for the benefit of a few capri- 
cious duchesses. I have 
noticed, with reference to your 
comments on the minennium 
commission, that many 
Americans are unsure that 
Britain truly knows which cen- 
tury Is about to close around 
its ears. Something must be 
done - unless Britain is to 
return to its pre-industrial sta- 
tus Of an ins ignificant island 
somewhere off the north-west 
coast of Europe. 

Amory Hall, 

c\o 420 Lexington Avenue, 

12th fir. 

New York. NY 10017. US 


Good start 
on cuts 

From Sir Nicholas Faxrbaim 
MP. 

Sir. I have received two par- 
liamentary answers, which 
might interest the taxpayer. 

The first Is that £7m per 
annum is currently spent on 
sports facilities for civil ser- 
vants, mostly in London. 

The second is that the spe- 
cial unit at Barlinnie Prison, 
which is intended to redeem 
recidivist criminal psychopaths 
was opened on February 5 1973. 
To date. 36 prisoners have been 
located there for varying peri- 
ods of time. 

The staffing costs alone run 
at about £300.000 per annum , 
or £6m since its opening, 
which works out at £300,000 
per prisoner - with almost 
nothing to show for it. Could 
they bring the costs of their 
little school a bit closer to the 
£5,000 a year at Eton, or half 
that for a state pupil. 

There, chancellor, is your 
chance to cut taxes and cut out 
waste. 

Nicholas Fair bairn. 

House of Commons, 

London, 

SWlA OAA 


More like nationalisation 


From Mr Terry Arthur. 

Sir, Mr Digby Jacks (Letters, 
October 27) resorts to 
Newspeak in his anti-privatisa- 
tion drive. He attributes pen- 
sions mis-selling to “the head- 
long rush to privatise 
everything, including occupa- 
tional pension schemes”. 

If my memory serves, occu- 
pational pension schemes had 
already been “privatised" for 
many a long year, and it was 
increasing regulation which set 
personal pensions alight. In 
particular, the regulation of 


private employment contracts. 
Including the unilateral void- 
ing of existing contracts, made 
it possible for an employee to 
leave an occupational scheme 
without leaving employment 
Sanctity of contract is a sine 
qua rum of private enterprise, 
and regulation is a close rela- 
tive of (indeed it is a form of) 
nationalisation not privatisa- 
tion. 

Terry Arthur, 

23 St Mary's Street 
Stamford. 

Lincolnshire PEg 2DC 


Fine service for real people 


From Mr Bryan Cassidy, MEP. 

Sir, The media (including the 
FT) has been reporting glee- 
fully on delays to the Eurostar 
Channel tunnel trains (“Chan- 
nel train delayed again", Octo- 
ber 26). 

For regular travellers 
between London and Brussels, 
occasional delays of 10 min- 
utes, or even an hour, such as 
those experienced by Eurostar 
would be acceptable compared 
with the discomfort and con- 
stant unpunctuality of travel- 
ling by air. London Heathrow 


now has the added inconve- 
nience of buildings collapsing 
into access tunnels. I will be 
abandoning the airlines for 
Eurostar once regular services 
commence on November 14 . 

1 suppose that one should 
take some comfort from the 
foct that these Eurostar delays 
have not affected real people - 
only journalists 1 . 

Bryan Cassidy. 

The Stables. 

White Cliff Gardens. 

Blandford Forum, 

Dorset DT11 7BV 


i 





19 



\ 


FINANCIAL TIMES FRIDAY OCTOBER 28 1994 




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FINANCIAL TIMES 

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

Friday October 28 1994 


Good news 
from Ukraine 


Credit where credit is due. Bads; in 
Jnly, the election of a new Ukrai- 
nian president offered a chance 
nothing more, that the country's 
government might finally start to 
get things right President Leonid 
Kuchma promised a radical pro- 
gramme of economic reforms to 
reverse the dismal economic 
record of the previous three years 
Whereupon, the Group of Seven 
leading industrial countries 
pledged $4bn to help him. So far, 
Mr Kuchm a is delivering on his 
promise: so must the G7. 

Mr Kuchma was in Winnipeg 
yesterday to argue the case for 
receiving $900m to fill the gap in 
Ukraine’s fourth-quarter balance 
of payments. His claim is that, 
with the promise of International 
Monetary Fund support arranged 
late last month, the country is 
now set on a programme of 
rtf arms which will turn it around. 
But it needs help to ease the p»in 
of this “shock therapy*. 

Mr Kuchma is not the first 
leader to make such claims, but a 
number of steps taken in the past 
few weeks provide reasons to taka. 
him at his word. Taken together, 
these measures begin to tackle the 
heart of Ukraine’s economic prob- 
lems: the trade balance. 

Yesterday’s unification of the 
exchange rate removes a sizeable 


tax on all exporters’ activities. At 
the same time, the announced 
reform of many agricultural prices 
should, if implemented, begin to 
encourage a recovery In the area, 
which is (he country’s best hope 
for export success. 

Weighing heavily, as ever, on 
the import side of the ledger is the 


country's chronic reliance on 

imported energy supplies. In the 
medium term, this will continue 
to be a problem, but plana are now 
In place to bring domestic energy 
prices up to world levels by the 
middle of next year. This trill at 
least encourage more eff ic ien t use 
of energy, although ul timat ely t he 
bulk of improvements in the trade 
balance will have to come fr om 
exports. 

For all the encouraging si g ns, 
much could still go wrong with 
the Ukrainian economy. Many of 
the recently announced measures 
stOl require parliament’s approval 
if they are to be So 

for. however, parliament has been 
less obstructive than many feared. 
The bigger question marks are 
external. 

In the medium term, the coun- 
try will not be able to stay afloat 
without help from Russia. A will- 
ingness to help Ukraine, by offer- 
ing a grace period in the repay- 
ment of its hefty arrears, has 
rightly been seen as a test of Rus- 
sia’s acceptance of Ukraine as a 
truly independent state. On Tues- 
day, President Yeltsin expressed 
himiiflif willing, in principle, to 
consider a three-to-seven year 
grace period. 

In truth, it is in Russia’s own 
interest to see success in Ukraine, 
since an unstable Ukraine risks 
destabilising Russian politics. 
Helping Ukraine is In the GTs 
interest too, but it is in a better 
position to help. The IMF has 
decided to bet on Mr Kuchma. The 
G7 should back it up by pledging 
to help Ukraine pay its ofl bills 
now, not merely next year. 


Leading the WTO 


Regionalism and protectionism 
are the greatest threats to the 
multilateral trading system. Inevi- 
tably, they are also creating the 
chief dangers to ratification of the 
Uruguay Round outcome, and to 
selection of a suitable first bead of 
the World Trade Organisation. 

Ratification has not proved as 
eg^y ps was-' w’ied when the round 
Was finished in Marrakesh last 
April So for only 30 nations have 
ratified. The decision to set 
December 8 as the date for the 
formal implementation conference 
rests on the assumption that the 
US, the European Union and 
Japan at least will have done so 
by then. 

In the US, however, the lame- 
duck Congress will have to return 
for a special session after Novem- 
ber’s midterm elections. But Ross 
\ Perot, the Texas billionaire, has 
already called fix' delay, while pro- 
tectionists of left and right are on 
fee attack. Meanwhile, EU ratifi- 
ution has been delayed by a dis- 
Pke over the powers of the Euro 
Pten Co mmiss ion to speak for 
®*uber states, to be resolved by 
tha European Court of Justice on 
N «*nber 15. 

Th US administration believes 
tfi&t>possibly bitter international 
dispute over who should lead the 
WTOtauid threaten ratification. If 
so, ratification must come first, 
since figure could mark an end to 
oommonlal diplomacy at a global 
leveL 

That &£[' sele ction of the head 
of the Wtq should ideally happen 
this year, g the organisation is to 
get off to a good start next Janu- 


ary. Unfortunately, however, an 
inter-regional combat has now 
emerged between President Carlos 
Kalina of Mexico, Mr Renato Rug- 
giero of Italy and South Korea's 
trade minister, Mr Kim Chul-su. 

This is a destructive way to pro- 
ceed, as has been demonstrated by 
the stalemate over who should be 
the next secretary general of the 
Organisation for Economic 
Co-operation and Development. 

One problem with so public a 
combat is that, in the absence of 
an accepted electoral procedure, 
any one region will find it humili- 
ating to abandon its own candi- 
date Gw the candidate of another. 
Consequently, compromise will 
become difficult, if not impossible. 
More important, however, is the 
feet that the regional origin of the 
new head is quite unimportant Or 
do the combatants fear that Mr 
Ruggiero would be more sympa- 
thetic to the European Union, Mr 
Salinas more friendly towards the 
US, or Mr Kim more supportive of 
Japan? If that were indeed so, a 
quasi-] udi dal body like the WTO 
would be dead. 

What is required is a person 
dedicated to global liberal trade, 
who also possesses high intellec- 
tual attainments and diplomatic 
skills. After ratification, the major 
players should get together qui- 
etly to decide who would make the 
best job of the WTO (and they 
need not restrict themselves to 
one of the three candidates). They 
have the best possible reason for 
doing so as objectively as possible. 
The WTO is their baby. They 
should want it to succeed. 


Mozambique poll 


First Angola, Ww - it seems - 
Mozambique, orhe last-minute 
decision by Mr^fonso Dhlakama, 
leader of the fonaer rebel Renamo 
movement, to boycott Mozambi- 
que’s first multi-party elections is 
a potentially devastating setback 
to hopes for a lastfijg peace In the 
country, as well asS blow to the 
wide- virion of a stable southern 
Africa. 

Mr Dblakama's claim that “mas- 
sive fraud" left him with no other 
choice is for from contoncing. The 
Presence of a 7,000*ti«Dg United 
Nations monitoring force, as well 
as some 2JM0 mtemattonal observ- 
ers, may not be enough to guaran- 
tee an election entirely free of 
abuse. Bat It should be enough to 
detect irregularities on a large 
scale. 

Yet the proper response to Mr 
Dhlakama unit his party is not 
suppression. Renamo, dismissed 
by many as no more than a cre- 
ation of white Rhodesia and subse- 
Shentiy adopted by minority-ruled 
Soitth Africa, has proved surpris* 
resilient Us support cannot 
sjmtfy be explained by totimHa- 
tion, notwithstanding its atrocities 
“tfing the civil war. 

It has been able to exploit ethnic 
and regional differences and, not 
least, hark back to the dismal 
record of the ruling Frelimo party, 
now led by President Joaquin 
Chtaano, in its early years in gov- 
ernment FreUmo's nationalisation 
Programme proved disastrous, its 
approach to government authori- 
tarian until it accepted 
multi-party elections two years 
ago, and its own human rights 


record for from dea n . 

If pressure from southern Afri- 
can states and western govern- 
ments r-»n make Mr Dhlakama. 
change his "find, the election can 
be put back on track by extending 
voting over one or two more days. 

The chances of Mr Dhlakama 
chan g in g his mind seem slim, 
however. Mr Chissano, the likely 
winner even had Renamo partici- 
pated in the poll, should seek to 
defuse Renamo 's challe nge by 
making dear that irrespective of 
the outcome of the poll he will 
term a coalition administration. 

There Is no significant ideologi- 
cal difference betwen the two par 
ties. Any conceivable government 
-would have to carry on with 
reconstruction of the country 
under the World Bank’s structural 
adjustment programme. Further, 
such is the country’s acute short- 
age of skills, it simply does not 
have the personnel now to sustain 
a conventional opposition. 

Allocating an appropriate share 
of government posts to Renamo 
will be difficult, especially since 
Ur Dhlakama has deliberately 
removed the only reliable way of 
qrtgh-ig his support Distaste at 
bis t ac*jg« should not, however, 
deter his opponents and the west- 
ern donors on whose support 
Mozambique depends from seek* 
jog gome accommodation. 

Renamo possesses the capacity 
to destabilise post-election Mozam- 
bique as the rebel Unite move- 
ment did Angola. Accepting it in a 
government of national unity 
would be a small price to pay for 
averting a renewed civil war. 




An "economic sum- 
mit” In Morocco, 
over a thousand 
miles away, may 
seem a cruel irrele- 
vance to relatives of 
those killed or 
maimed by last week's bus bomb hi 
Tel Aviv, or to Palestinians thrown 
out of work by the indefinite 
sealing off of the Gaza Strip. But 
King Has san H, who will open the 
Middle East economic summit in 
Casablanca on Sunday, believes it is 
highly relevant. 

“Peace is not just a paper that 
you sign,” he says. “Peace must 
have a content. It must forge com- 
mon Interests which put it beyond 
the reach of a new flare-up. The 
peace process has no meaning or 
reality unless it is accompanied 
by an economic development pro- 
cess." 

This is not, he adds, a purely the- 
oretical or long-term vision. He 
believes the Casablanca conference, 
to be attended by executives from 
leading multinational companies as 
wed as heads of state and govern- 
ment, can and must “provide 
answers in the short term which 
will chang » the everyday life of peo- 
ple In the region”. 

It must, he says, “get across to 
political and business leaders both 
that this region has a formidable 
potential once peace is established, 
and that it has a desperate need 
for capital and jobs, which alone 
nan m ak e the peace process mean- 
ingful to the great majority of Its 
people”. 

The 63-year-old king, who granted 
the Financial Times an Interview in 
the slightly incongruous setting of 
his royal stables and stud form. Is 
no newcomer to the Middle East 
peace process. He has acted as a 
discreet intermediary in contacts 
between Israel and its Arab neigh- 
bours, ami notably between Mr Yit- 
zhak Rabin, Israel's prime minister, 
and Mr Yassir Arafat, leader of 
the Palestine Liberation Organi- 
sation. 

Last week. In a ground-breaking 
interview with Israeli television. 
King Hassan said Morocco had a 
special relationship with Israel, 
based on Its continuing Hnks with 
600,000 Jews of Moroccan origin 
“whom I consider my children even 
if today they reside in Israel”. An 
Israeli “liaison office” in Rabat is to 
be opened today, as a step towards 
formal diplomatic relations. 

Mr Rabin and Mr Arafat will both 
be in Casablanca on Sunday, 
despite the tengfan between them 
caused by the violence of Hamas, 
the Palestinian Islamic resistance 
group. Well aware of the threat this 
violence poses to the peace process. 
King Hassan says he was not sur- 
prised by the Tel Aviv explosion. He 


THE FT INTERVIEW: King Hassan 

The discreet 
intermediary 


thinks it may well be repeated, 
and both sides should be ready for 
that. 

But this, he says, is a reason to 
accelerate the peace process, not 
slow it down. A rapid move ahead 
to “the second phase, in which the 
Israeli army will be redeployed and 
the PLO’s administrative authority 
will no longer be confined to the 
Gaza Strip and the island of Jeri- 
cho”, would enable Israel and the 
FLO to work together more effec- 
tively to combat violence. 

“The longer you confine this 
entity to such a small surface,” he 
explains, “the more the dangers will 
multiply. It’s like a theorem in 
physics: if you have a pressure of 
1,000kg on a surface of one square 
centimetre, it’s more dangerous 
than the same pressure distributed 
over two square metres.” 

The agianHffe shnfig fe typical of a 
monarch who is determined to mod- 
ernise his country, seeing no con- 
tradiction in the fact that his 
authority derives from centuries-old 
tr aditio n and from religious faith. 
His only fear, he says, is that 
“change is waning too slowly”, and 
that “if we do not change, Morocco 
may foil victim to its own adminis- 
trative routine”. The younger 
Moroccan entrepreneurs look to 
him for support in taking on vested 
int ere sts «nd opening the co unt ry 
fully to foreign competition and 
investment 

Some say Morocco has actually 
benefited from the violent conflict 
between military repression and 
Talamic extremism in neighbouring 
Algeria: Moroccans are more aware 
(hat a liberal monarchy enjoying 
Islamic legitimacy is a precious 
asset All the king will say in public 
on this subject is that “Morocco 
is Morocco and Algeria is Al- 
geria”. 

In other contexts he stresses 
Morocco’s advantage In having 
“existed as a state for 1,200 years”. 
And he brushes aa'ite any idea of a 
rfagh of ri viliaa tions between Islam 
and the west. “On the cultural 
level,” he declares, “the west and 
the Moslem world have contributed 
equally to world culture ... We are 
just as cultivated as the west. 



King Hassan of Morocco: "ITris region has formidable potential after peace* 


and we will never clash with it on 
the level of culture or of civilisa- 
tion." 

Politically, however, King Hassan 
is for from satisfied with the cur- 
rent performance of western 
Europe. He says he is “very scepti- 
cal” about the latest grand design 
from Brussels for a Euro-Mediterra- 
nean Economic Area. 

*Tm a bit like St Thomas,” he 
says. “I like to Bee before 1 believe. 
We’ve had so many promises from 
Europe. But Europe is expanding. 
It’s trying to digest mentalities and 
social structures which are different 
from its own. It’s trying to deal with 
everything at once, and with itself. 
That?s why I don't feel so much 
resentment towards Europe: it is 
searching for itself.” 

Resentment shows through, all 


the same, and the irony gets heav- 
ier when he speaks of the different 
approaches the EU takes to its east- 
ern and southern neighbours - the 
former being identified as future 
members of the Union, whereas his 
own application in 1987 (which he 
now admits he himself “did not 
really believe in either”) was 
laughed out of court 

“That doesn't hurt me,” he 
claims, “because I think Europe 
remains an entity with a certain 
memory. They think of themselves 
as the whites, the colonisers, while 
we are the former colonies. We are 
not full citizens. We supposedly 
have no scholars - and yet we do 
have them. We have no great pro- 
fessors - and yet we do have 
them... 

“And so they look for allies more 


to the east because there people are 
white, . . . because it's one big fam- 
ily. And then they look across the 
Mediterranean and say: ‘Ah yes, it’s 
true, there are those poor Utile peo- 
ple that we colonised . . ” 

Religion, the king insists, plays 
no part in it “It’s still the memory 
of the European colonial past which 
Is at work.” In the last century, he 
points out, Europe produced a gal- 
axy of scholars “who had a perfect 
knowledge of Islam and of Moslem 
civilisation”. If Europe now fears 
Islam and associates it with 
violence, that is due to “a regres- 
sion on the European cultural 
level”. 

Y et he admits that "there 
are faults on both sides", 
and he is hoping to 
improve matters through 
Ifrane University, Moroc- 
co's first private university, which 
will open its doors to Moroccan and 
foreign students in January. 
“Inspired by American teaching 
methods”, this will be “open to all 
revealed religions”. But the stu- 
dents, paying a maximum fee of 
$5,000 a year, will be expected “to 
specialise in an Islamic subject”, as 
well as study technology and sci- 
ence, including economics and busi- 
ness studies, at the highest interna- 
tional level. By the end of a 
three or four-year course they will 
“look at Islam in a new way", and 
will spread its “real image” on 
their return to their own coun- 
tries. 

The languages of instruction at 
Ifrane will be English and Arabic, 
and the choice of English in prefer- 
ence to French is significant One of 
the colonial legacies King Hassan 
and his countrymen are most anx- 
ious to escape from is what they see 
as a constricting tete a tete with 
Latin European culture. 

Perhaps for this reason, he is dis- 
appointed at the lack of official UK 
interest in the Casablanca summit 
France, Italy, Spain, Portugal and 
Austria will be represented by their 
heads of government and the US by 
secretary of state Warren Christo- 
pher. Britain is sending only Mr 
Douglas Hogg, minister of state at 
the Foreign Office, rather than 
Prime Minister John Major or 
foreign secretary Mr Douglas 
Hurd. 

*T should have liked Mr Major or 
Mr Hurd to come in person," says 
King Hassan wistfully. “After all 
Great Britain has always been pres- 
ent in the Middle East, and it was 
with us in Morocco that she had her 
first commercial treaties.” 


Edward Mortimer 
and Francis Ghiles 


Europe looks for southern comfort 


E uropean Union leaders are 
expected to bless a plan to 
embrace North Africa and 
the Middle East fax a free 
trade zone, at their next summit at 
Essen in Germany this December. 

The EU is tantalised hr the pros- 
pect of peace between Israel and its 
Arab neighbours, and terrified of 
social and political collapse in 
Algeria, which conld trigger mass 
emigration and spread to the rest 
of the Maghreb. At last, therefore, 
the EU is beginning to think strate- 
gically about the southern and 
eastern shores of the Mediterra- 
nean. 

The ambition - and it certainly is 
ambitions - is to create a Euro- 
Mediterranean Economic Area, 
helped by more thaw doubting EU 
aid to enable participants to 
restructure their economies. 

The proposal, launched by the 
European Commission last week, is 
akin to the European Economic 
Area, set up with the European 
Free Trade Association (Efta) this 
year. Over time, Enro-Med would 
increase the intensity of EU rela- 
tions with its southern neighbours 
to a level approaching that now 
reserved for the states of eastern 
Europe. 

The obvious difference is that up 


David Gardner on links with N Africa and the Middle East 


to four of the Efta partners (Aus- 
tria, Finland, Sweden and Norway) 
are set to join the Union next year, 
and the central Europeans should 
start coming to around the turn of 
the century, led by Poland, Hun- 
gary and the Czech Republic. There 
is no question of EU entry for the 
Union’s future Euro-Med partners. 

But there is another vital differ- 
ence: the she of the wealth gap 
between the EU and its southern 
neighbours. According to the Com- 
mission, average per capita income 
in the Union in 1992 was $19,942; in 
the countries of the Maghreb 
(Morocco, Algeria, Tunisia and 
Libya) and Mashraq (Egypt, Jor- 
dan, Lebanon and Syria) it was 
$993. This gap is for wider than, for 
instance, that between average 
incomes in the US and Mexico, 
which were joined early this year 
under the North American Free 
Trade Agreement (Nafta), the first 
attempt to yoke developed and 
developing economies. 

Even if output in the Arab Mid- 
dle East and North Africa doubled 
between now and 2010 - the target 
date for a frill Enro-Med free trade 
zone - the income gap would have 
widened much farther, and possi- 


bly doubled, because of Ugh popu- 
lation growth, according to the 
World Bank. 

It has taken Europe inordinate 
time to wake up to this, but now 
that it has, it is unsurprising to see 
the Commission’s proposal loaded 
with adjectives such as argent, 
fast, vital, rapid. “At present, polit- 
ical, economic and social conditions 
hi a number of these countries are 

The ambition - and it 
certainly is ambitious 
- is to create a 
Euro-Mediterranean 
Economic Area 

sources of Instability leading to 
mass migration, fundamentalist 
extremism, terrorism, drugs and 
organised crime,” says the Commis- 
sion's document 
Thus, at one level, what is being 
advocated is a strategy of contain- 
ment 

In intra-EC terms, a signal is 
being sent to Mediterranean mem- 
ber states such as France, Spain 
and Italy, which will succeed each 


other in the rotating presidency of 
the EU from January. These are the 
countries most exposed to migra- 
tory pressure, but they are also the 
countries that most fear that 
expansion to the north and east 
will shift the Union's political cen- 
tre of gravity and exacerbate its 
north-south divide. 

“If s important to get something 
settled now,” argues Mr Mannel 
Marin, the EU commissioner 
behind the Enro-Med initiative, 
“otherwise it will be used as a hos- 
tage to block negotiations on 
enlargement to the east” 

The Union wants putative Enro- 
Med associates to see an irresistible 
offer to modernise and achieve 
rapid economic take-off leading to 
sustained growth. Aid, leaving 
aside soft loans, would rise to a 
total of Ecu5.5bn to 1995-99 under 
the Commission plan, near par 
with planned outlays for eastern 
Europe over the same period of 
Ecn7tou Last year, all mra-EU Medi- 
terranean countries got Ecn407m, 
against Ecul.04bn for eastern 
Europe- 

In the short term, the Union 
would quickly conclude “associa- 
tion agreements” already under 


negotiation with Israel, Morocco 
and Tunisia, analogous to existing 
treaties with the east Europeans on 
everything except eventual EU 
membership. 

The Commission hopes this will 
have an exemplary effect, encour- 
aging Enro-Med nations to deregu- 
late and liberalise their economies 
as the Moroccans and Tunisians 
have done. Domestic reform and 
greater market access to the EU 
helped lift the share of manufac- 
tured products in Moroccan exports 
to the Union from 24 to 66 per cent 
between 1979 and 1993, and from 
40 to 77 per cent to Tunisia's case, 
one Brussels study points out 

But the study also reveals that 
liberalisation has benefited EU 
exporters for more than it has ben- 
efited Maghreb and Mashraq 
exporters - something that Spain, 
Portugal and the eastern Euro- 
peans already know to be a 
by-product of drawing close to the 
Euro-club. 

For this reason, the future mem- 
bers of Enro-Med are likely to want 
to see not only the colour of Brus- 
sels's money, but real commitment 
to market access in sensitive areas 
such as textiles and agriculture, 
before they commit themselves to 
such a scheme. 


OBSERVER 


Slow start to 
the season 

■ Alan Rothenberg, the ambitious 
Los Angeles lawyer and chief 
organiser of this year's US football 
World Cup, probably has a few 
mixed feelings right now. 

While he can glory to the feet 
that the tournament earned a profit 
of$60m - twice the original 
estimates and by for the most 
money ever generated by a World 
Cup - and bask in the approval of 
Fife, international football's 
governing body, not everything is 
going to plan. 

Fife gave the tournament to the 
US in the hope that it would spread 
the gospel In the last great territory 
tmeonquered by the game. 

That evangelism has been cast on 
stony ground. Fife wanted the US 
World Cup to boost a new US 
professional outdoor football league, 
known as Major League Soccer. The 
MLS is due to kick off in April 1995. 
But so far only seven dries have 
agreed to host an MLS team, 
leaving five of the spots unfilled. It 
seems big investors and corporate 
sponsors are shying away, and MLS 
may not have enough money to 
make its debut Rothenberg has 
hinted that MLS’s opening may be 
delayed until 1996. He has to make 
his mind up in the next 10 days. 

If MLS fails to appear to 1995 the 
US Soccer Federation - president, 
Alan Rothanbetg - could be 
covered in embarrassment. Mind 


you, be can comfort himself with 
$7m in pay and bonuses, awarded to 
him last week for organising the 
1994 World Cup. 


Weighty matters 

■ T{Mrl Hip gmaTl print — always. 
The latest brochure - printed to 
English - fmm MaHf, the F rench 
ftnanrial futures market, concerns 
the new rapeseed market, which 
opens in Paris today. 

Unfortunately, it translates world 
production of “metric tonnes” into 
“tons”, without realising that they 
are not quite the same thing and 

that a conversion would be 
ffluminating. Still, whafs a few 
pounds - is that weight or 
currency? - between friends? 


High achiever 

■ The chattering classes in the CSty 
of London know all about PosTel 
boss Alastair Ross Goobey, 48, and 
Matthew Oakeshott, 47, co-founder 
of Ohm money managers. Both 
learnt their trade managing the 
Courtaulds pension fund. However, 
few have braid of the man who 
came before and after them - John 
Evans, 59, who steps down at the 
end of the year. 

Of the three, Evans probably 
turned in the best long-term 
performance. During his stint on 
the bridge, the fund has 
outperformed its peer group by 
about VA per cent a year. Might 



•What if they find those towels you 
stole from the RitzT 

sound peanuts, but it Is the 
equivalent of nearly £20m a year, or 
about a tenth of Courtaulds' profits. 
Rather than a gold watch for 28 
years’ service, perhaps Courtaulds 
should reward Evans with a 
performance-related pension? 


Currying favour 

■ What do ex-UK chancellor Lord. 
Howe and his former I ndian 

counterpart Ramaswamy 

Venkataraman have in common? 
Their published memoirs have 
caused political ripples. 

The two men exchanged a 
mischievous smile at the London 


launch this week of 
Venkataraman's autobiography, 
which has already caused a big 
Stink to Delhi- Venkatar aman, who 
- after a stint at the finance 
ministry - became president, is the 
first Indian head of state to go into 
the memoir business. 

Lord Howe slipped his friend a 
copy of his own memoirs, before 
recalling his letter of congratulation 
on Venkataraman's elevation to the 
presidency: “If a cat may greet a 

iring l flp m nflo minist er nan 

greet a president.” Baffling stuff. 


Noble Swiss 

■ Believe it or not; a former Swiss 

cabinet minister is refusing to 

accept the juicy SFrl90 ,000 pension 
to which he Is entitled. 

Rudolf Friedrich, who is best 
known for a 1982 lawthat bears his 
name and which restricts the sale of 
Swiss property to foreigners, says 
he does not need the money. The 
71-year-old Friedrich says he also 
feels uncomfortable because he had 
to resign for health reasons after 
hoing in the cabinet only 22 wmntha 
Not so much sleazing as pleasing. 


Evasive action 

■ Barber this year Andy Allan, 
chief executive of Carlton UK 
Television, raised eyebrows by 
refusing to let MPs see an 
im transmitted investigation into 
controversial parliamentary 


lobbyists Ian Greer Associates and 
then abandoning the programme. 

Allan Is out of luck again, this 
time over footage of MP David 
Mellor. Mellor was to feature in 
another programme as an example 
of an MP with considerable 
extra-parliamentary interests. Allan 
has supported Carlton TV 
managing director Paul Jackson’s 
decision not to use footage which 
Mellor feared might depict him as 
“shifty and evasive". 

The programme-makers 
threatened to leave a 30-second 
black bole where Mellor would have 
appeared- But Independent 
Television's network centre - has 
refused to broadcast a programme 
with a hole in it Carlton TV has 
now decided to show old footage of 
Mellor in the House of Commons. 
The programme-makers are still 

g ullring janri threa tening to have 

their names removed. 


Cut! 

■ No man is a hero to his barber. 
Terry Byland, the FT’S UK Stock 
Market Editor, called in at Khops, 
the Bow Lara barber who crops 
many well-known City heads, 
Including Sir Samuel Brittan’s. 
“Glad to see you, sir,” was the 
opening shot “Saw you on TV the 
other day talking about the dollar. 
Very interesting, sir, but if I may 
say so, you looked as if you needed 
a good haircut" Byland gave him a 
larger than usual tip. 


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THEM 


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Carrying the 
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For information call 0362 695353 


FINANCIAL TIMES 

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Russia admits oil spill 
threat to environment 


By John Thomhffl in Syktyvkar, 
the Komi Republic, and John 
Lloyd b) Moscow 


The Russian government 
yesterday admitted that an oil 
spill in the Arctic region of Komi 
was “potentially very dangerous" 
for the environment, though 
local officials insisted the damage 
had been limited. 

Mr Alexander Shuval, press 
director of the Environment Min- 
istry . said 14,000 tonnes of oU 
(130,000 barrels) had leaked Cram 
a ruptured pipeline in an oilfield 
near Uzinsk, in the north of 
Komi. 

In the Komi capital of Sek- 
tyvkar. Mr Anatoly Nyukin, head 
of the civil defence department, 
said he had not seen a single bird 
or fish affected by the oil spilL 
Officials also said that Komi did 
not need outside help in the 
clean-up. The US has offered 
assistance. 

Mr Nyukin said the effects of 
the oil spin had been confined to 
a 9km stretch of the River Kolva, 
which Sows into the River Usa, 
which in turn runs into the 
Pechora River and to the Barents 
Sea. 

He said very heavy rains had 
burst the dam in which the oil 
had been held, following the rup- 
ture of a pipeline, and had spread 



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the oil over 18 hectares of land. 
However, the spillage had been 
stopped, he said. 

US experts estimated that up to 
2m barrels (over 270,000 tonnes) 
of oil had leaked from the pipe- 
line, ten times tbe Russian esti- 
mate. They also claimed the rup- 
ture had not been properly 
repaired. 

Mr Sergei Shoigu, tbe Russian 
minister for emergencies, said 
the leak bad already cost 
Rbs62.2bn ($20 to contain. 

Bad weather has prevented a 
team of Russian experts from 
reaching the site of the spill, 
more than 1,000 km (700 miles) 
north-east of Moscow. 

The pipeline, which carries oil 
from producing areas in the Arc- 


tic to refineries in central Russia, 
sprang a series of leaks in 
August. 

Western oil experts, charging 
that 10 per cent of Russian oil 
leaks away each year, said it was 
a disaster waiting to happen. 

“Many of the (former Soviet) 
pipelines suffer considerable cor- 
rosion," said Mr Egil Bergsager. 
of Norway’s Rogalandsforskning 
Institute in Stavanger. “I would 
not be surprised if we get more 
accidents like this. " 

The environmental group 
Greenpeace claimed Russian 
companies pumped oil down (he 
damaged pipeline, although it 
had “as many holes as a Swiss 
cheese". The pipeline operator. 
Transneft denied the charge. 


Brazil may use armed forces 
to curb Rio’s drug traffickers 


By Angus Foster In Sdo Paulo 


Brazil is considering sending its 
armed forces into Rio de Janei- 
ro's shanty towns to combat the 
city's drug traffickers amid wide- 
spread concern that the police 
have lost control and are heavily 
involved in corruption. 

Mr Fernando Henrique Car- 
doso, due to take over as presi- 
dent on January 1, yesterday 
added to calls for the outgoing 
administration to act 

He said he favoured military 
intervention in Rao, which he 
described as being in a state of 
“undeclared civil war". 

Calls for troop deployments 
have been welcomed by Rio 
residents who are tired of the 
city's spiral of violence and cor- 
ruption. However, previous pro- 
posals have been blocked by Rio 


politicians, who fear losing power 
to the federal government 
Outgoing President Itamar 
Franco now appears ready to act. 
but may not have enough politi- 
cal backing. Putting troops on 
the streets would be controver- 
sial given Brazil's unpleasant 
memories of 21 years of military 
rule which ended in 1985. 

The latest proposal follows a 
shoot-out 10 days ago in a Rio 
shanty town in which police 
killed 13 people, including a two- 
year-old boy. Police said they 
were hunting drug traffickers 
who had attacked a police station 
a few days earlier. 

However, fights between police 
and drugs gangs are more often 
caused by competition for control 
over drug networks. 

Following the incident, the jus- 
tice ministry and armed forces 


Credito Romagnolo 


Continued from Page 1 


year if the offer is to go-ahead. 
The largest shareholder in Cre- 
dito Romagnolo is France’s BNP 
with 6.8 per cent The De Bene- 
detti group has just under 5 per 
cent. 

Between 1984-88 there was a 
fierce struggle for control of the 
bank when a De Benedetti co-or- 
dinated alliance fought off take- 
over attempts by the Fiat group. 
However, there are also some 


28,000 small shareholders. 

Since privatisation earlier this 
year, Credito Italiano has come 
under the effective control of 
Mediobanca, tbe powerful Milan 
merchant bank headed by Mr 
Enrico Cuccia. It is hungry to 
establish itself as the leading pri- 
vately-owned bank and is in the 
process of raising Ll,52Qbn for 
acquisitions. Romagnolo has 
itself been trying to expand over 
the past three years by buying up 
smaller regional banks. 


delivered a confidential report to 
Mr Franco which is thought to 
have raised the possibility of mil- 
itary intervention. 

A spokesman said the presi- 
dent was still “analysing" the 
report and no action would be 
taken ahead of a scheduled meet- 
ing on Monday between the presi- 
dent and Mr Nilo Batista, Rio's 
governor. 

If Mr Batista requests interven- 
tion . the federal government is 
thought ready to deploy troops 
quickly. However, if he opposes 
the plan, the government could 
announce a “state of defence", 
short of a state of emergency, 
which would allow it to remove 
him from his post. 

The outgoing government is 
thought reluctant to take such a 
measure because it would require 
congressional approval, which 
might not be forthcoming so 
close to the government's end of 
its tenure. 

Military leaders are believed to 
favour intervention, although 
they admit it could be risky. Most 
of Rio’s drug traffickers live in 
the centre of the shanty towns. 
These are often perched on the 
top of hffi s and innocent bystand- 
ers would probably be caught in 
the crossfire if troops intervened. 

The military is also worried 
that a prolonged period of patrol- 
ling tbe shanty towns could lead 
to poorly paid troops being co- 
opted by drug traffickers, which 
is how corruption of the police 
force started- 


Minister 
denies 
lying in 
UK sleaze 
storm 


By PNftp Stephens, Kevin Brown 
mid Robert Peston 


The UK government’s bitter 
confrontation with Mr 
Mohammed Fayed, the owner of 
Harrods, erupted Into a new 
political storm at Westminster 
yesterday as Mr Jonathan Ait- 
ken. the Treasury chief secre- 
tary, denied he had tied to the 
cabinet secretory. 

With Mr John Major’s adminis- 
tration engulfed by new “sleaze” 
charges, the prime minister dis- 
closed that police were investiga- 
ting whether an intermediary for 
Mr Fayed had sought to “black- 
mail” the government 

The row prompted an angry 
dash in the House of Commons 
between Mr Mqjor and Mr Tony 
Blair, the Labour leader. Mr 
Blair called for public Investiga- 
tion of the allegations and 
demanded to know why Mr 
Major had earlier this week 
sacked Mr Neil Hamilton as 
Industry minister. 

Mr Blair was accused by the 
prime minister of descending 
into the “gutter” of public life by 
giving credence to unsubstan- 
tiated rumours. 

Opposition MPs in tnrn 
demanded that Mr Major order 
Conservative Central Office to 
return the £250,060 ($395,000) 
that Mr Fayed says he paid to 
the party during tbe 1980s. 

Mr Aitken's denial that he had 
allowed a business associate to 
pay some, or alL, of a bill for a 
two-day stay last year at the Ritz 
- the Paris hotel owned by Mr 
Fayed - was reinforced by a let- 
ter to the Guardian newspaper 
by Sir Robin Butler. 

Commenting on suggestions 
that Mr Aitken had lied to him 
daring an earlier probe. Sir 
Robin said: “For the record. I do 
not regard Jonathan Aitken as 
having lied to me or misled me.” 

In a reference to Mr Aitken's 
Ritz account. Sir Robin told Mr 
Peter Preston, the newspaper's 
editor: “1 am satisfied that, 
despite the discrepancies in the 
billing to which you have 
devoted so much attention. Mr 
Aitken and his wife paid their 
bill at the Ritz in fnlL” 

In the Commons, Mr Aitken 
accused the newspaper of “hys- 
terical, sleaze journalism”. 

But Labour continued to 
demand an explanation of why 
Mr Aitken’s account for the Ritz 
stay shows only a FFr4.257 
($804) payment towards a total 
MU of FFr8,010, transferred to 
toe account of Mr Said Ayas, a 
former business associate. 

Amid concern among Tory 
MPs that the government is 
being dangerously damaged by 
the stream of allegations of 
impropriety, Mr Fayed also 
attacked Mr Aitken’s explana- 
tion. 

Mr Fayed said he was * sur- 
prised that tbe Cabinet secretary 
had reached his decision without 
reference to me”. 


FT WEATHER GUIDE 


Europe today 


A nearly stationary area of low pressure 
dose to north-east Scotland win continue to 
promote unsettled conditions over most of 
the north-west of the continent Showers will 
occur in the UK, the Benelux and northern 
Franca Eastern France and the Alps will be 
overcast and rainy. Showers, some with 
thunder, win affect northern Italy. Spain will 
have some sun though rain wilf linger in 
eastern parts. Southern Italy and the south- 
west Balkans will have limited sun as 
thunder showers arrive. The south-east 
Mediterranean will have a lot of sun. The rest 
of central and eastern Europe win be dry 
with cloud interspersed with sun, 

Scandinavia will be mainly overcast 

Five-day forecast 

Low pressure over the North Sea will 
weaken as a new depression approaches 
from the Atlantic, causing unsettled 
conditions to linger over north-west Europe. 
South-east Europe will have thunder 
showers during the weekend but sun will 
return to south-western areas. Unsettled 
conditions over northern Europe will spread 
into Russia as high pressure begins to lose 
its Influence. 



TODAY'S TEMPERATURES 


Situation at 12 GMT. Temperatures maximum tor day. Forecasts by Metoo Consult Of the Netherlands 



Maximum 

Belling 

fair 

10 

Caracas 

doudy 

31 


Celsius 

Belfast 

shower 

10 

CareBff 

shower 

It 

Abu Dhabi 

sun 

32 

Belgrade 

fair 

21 

Casablanca 

fair 

23 

Accra 

fair 

31 

Berlin 

shower 

11 

Chicago 

shower 

17 

Algiers 

fair 

27 

Bermuda 

shower 

26 

Cologne 

shower 

12 

Amatthfem 

shower 

12 

Bogota 

doudy 

21 

Dakar 

fair 

30 

Athens 

8U1 

24 

Bombay 

fair 

35 

Dallas 

sun 

24 

Atlanta 

fair 

21 

Brussels 

Cloudy 

12 

Delhi 

sun 

33 

B. Aires 

fair 

19 

Budapest 

doudy 

15 

Dubai 

sun 

33 

B-ham 

fair 

11 

GJogen 

shower 

10 

Dublin 

shower 

10 

Bangkok 

fair 

32 

Cairo 

sun 

30 

Dubrovnft 

fair 

21 

Barcelona 

shower 

20 

Capo Town 

cloudy 

22 

Edinburgh 

shower 

10 


No other airiine flies to more cities 
around the world. 


Lufthansa 


Pao 

shower 

21 

Madrid 

doudy 

17 

Rangoon 

sun 

33 

Frankfurt 

show 

11 

Maforcs 

shower 

22 

ReMevik 

snow 

1 

Geneva 

doudy 

11 

Malta 

sun 

26 

Bo 

cloudy 

25 

Gibraltar 

thurd 

21 

Manchester 

shower 

11 

Roma 

lotr 

22 

Glasgow 

rain 

11 

Manila 

cloudy 

32 

S. Fraco 

Mr 

20 

Hamburg 

shower 

11 

Melbourne 

shower 

17 

Seoul 

fair 

16 

Helsinki 

doudy 

7 

MadcoChy 

fair 

21 

Singapore 

shower 

29 

Hong Kong 

fair 

27 

Miami 

fair 

28 

Stockholm 

doudy 

7 

Honolulu 

cloudy 

32 

Kffian 

cioudy 

13 

Strasbourg 

shower 

11 

btanbii 

sun 

20 

Montreal 

doudy 

11 

Sydney 

fair 

28 

Jakarta 

fair 

32 

Moscow 

rain 

8 

Tangier 

lair 

23 

Jersey 

cloudy 

12 

Munich 

drcz) 

12 

Tel Aviv 

fair 

29 

Karachi 

fair 

34 

feintf 

show 

26 

Tokyo 

shower 

21 

Kuwait 

sun 

34 

Naples 

9U1 

23 

Toronto 

fair 

13 

L. Angeles 

fair 

23 

Nassau 

fair 

29 

Vancouver 

shower 

10 

Las Palmas 

fair 

23 

New York 

fair 

18 

Venice 

fair 

15 

Lima 

doudy 

22 

Nice 

doudy 

17 

Vienne 

doudy 

12 

Lisbon 

doudy 

19 

Nicosia 

lair 

26 

Warsaw 

shower 

11 

London 

fair 

12 

Oslo 

doudy 

4 

Washiiqton 

far 

20 

Lux-bourg 

doudy 

9 

Paris 

shower 

14 

Wefilngtan 

shower 

13 

Lyon 

rain 

13 

Perth 

lair 

21 

Winnipeg 

fair 

11 

Madeira 

fas- 

24 

Prague 

doudy 

11 

Zurich 

ehower 

9 


THE LEX COLUMN 


Chemical attraction 


Fears that this year's strong demand 
growth for commodity chemicals was 
merely restocking were confounded 
yesterday by ICI’s third-quarter 
results. The figures were unusually 
strong, even for this stage of the cycle. 
Heady de mand in Asia and the US has 
led to a change in trade flows, reduc- 
ing imports into Europe and increas- 
ing exports. With rising world demand 
and limited new supply, prices should 
rise sharply. Spot commodity chemical 
prices have already increased, though 
IC1 is yet to benefit fully because con- 
tract price rises have only just started 
coming through. These trill be driven 
still higher when European domestic 
demand, winch has so far remained 
weak, really recovers. ICl’s down- 
stream businesses, such as paints, 
may suffer from raw material cost 
infla tion. But such pressures should 
be more than offset by commodity 

chemicals. 

The question remains whether TCI is 
fairly valued. The issue is one of tun- 
ing. When its earnings peak, ICI’s 
shares will stand at a discount as 
investors anticipate the cyclical down- 
turn. But with possible earnings 
growth next year of 50 per cent, sell- 
ing now would be a mistake. The 
chemical industry typically suffers 
from supply-driven not demand-led 
recessions. So the right moment to sell 
will be when capital expenditure 
reaches unsustainable levels. Four 
years ago, the group’s capital expendi- 
ture was £lbn compared with depreci- 
ation of just £525m - a clearly unsus- 
tainable ratio of nearly two. Last year 
ICTs ratio was 0B, suggesting there is 
a long way to go before over-capacity 
once again becomes a problem. 


FT-SE Index: 3029.6 (+29.7) 


IC1 


Share price relative to the 
FT-SE-A AS-Shara Index 
ISO - 



Italiano is issuing its own shares at a 
discount to net assets . while bidding 
for Romagnoio's at a premium. 

Observers detect the hand of Medio- 
banca. the powerful Milanese mer- 
chant bank. It effectively controls Ital- 
iano and is keen to extend its 
influence in the commercial banking 
sector. Mediobanca also controls 
Banca Commercials Italians, another 
newly-privatised bank that recently 
raised H.575bn for its own acquisition 
war-chest. Unsurprisingly, the market 
is betting BCI will launch its own 
h ankin g bid. Ambroveoeto being the 
favoured target With its shares now 
almost 40 per cent below the privatisa- 
tion price, BCI investors are also pay- 
ing for their management's excessive 
ambition. 


mean visitor numbers rising more 
than 50 per cent by 2001. However 
successful the efforts to tempt visitors 
to travel out of season to less con- 
gested areas, there must be some 
doubt whether the system will be able 
to cope. The answer may be to concen- 
trate less on numbers and more on 
increasing spending per head. For 
companies such as Forte or British 
Airways, it is quality rather than 
quantity that counts. The priority for 
the industry as a whole should be to 
improve the quality and range of facil- 
ities it offers. Due to the impact of the 
recession on room rates, British hotels 
are less uncompetitive than they were. 
But they still suffer from relatively 
high costs. For many, the best strat- 
egy may be to move further upmarket 


Italian banks 


UK tourism 


An industry where revenues grew 
by almo st 13 per cent a year between 
1983 and 1992 would appear to be in 
good health. But the British Tourist 
Authority is not satisfied. It points out 
that, while the UK is still sixth in the 
destination league, its share of world 
tourism has been declining steadily. 
Rather than accepting this as inevita- 
ble - since less developed destinations 
are likely to grow faster - the author- 
ity believes the loss of market share 
can be tackled with a little more pub- 
tic money. 

Given the jobs created by tourism. It 
might well be desirable if Britain 
could keep pace with world market 
growth. It is less dear that it Is physi- 
cally possible. At present levels of 
spending per head, such growth would 


Italy's fragmented b ankin g sector 
certainly needs rationalisation. But 
one wonders whether Credito Itali- 
ano's L2,000bn bid for 48 per cent of 
Credito Romagnolo is the right way of 
achieving it Recently-privatised Itali- 
an© is still suffering from its public- 
sector past Its return on assets at 1.39 
per cent In 1993 was much lower than 
Romagnoio’s Z2S per cent In a ratio- 
nal world, more efficient institutions 
would take over their less efficient 
rivals, not the reverse. 

Those who bought shares at the 
time of Itatiano’s privatisation last 
year cannot be too pleased. The share 
price had slumped following last 
month’s announcement of a Ll,520tm 
capital-raising. Yesterday, the shares 
fell further and are now nearly 25 per 
cent below the privatisation issue 
price. Investors may he puzzled why 


Japanese electronics 

Japan's electronics industry is 
enjoying a good year. Yesterday’s first- 
half results from a batch of the largest 
groups - NEC. Fujitsu, Hitachi, Tosh- 
iba and Mitsubishi Electric - were not 
only much improved on the first half 
of 1993; in most cases, they comfort- 
ably exceeded .expectations. But the 
overall progress hides two rather dif- 
ferent stories: profits from the 
“upstream” components businesses, 
notably semiconductors, raced ahead; 
but there was continuing disappoint- 
ment in the “downstream" markets, 
particularly audio-visual products. 

The upstream business is being 
driven by the explosion in sales of 
personal computers, especially in the 
US. Worldwide demand for chips 
should continue to grow strongly next 
year with the shift to more memory- 
hungry programs and multimedia gad- 
getry. Because of high operational 
gearing, the increase in demand has a 
disproportionately large effect on 
industry profits. Downstream, the out- 
look is less bright. Demand for con- 
sumer electronics products inside 
Japan is slack, prices are depressed 
and the industry is suffering competi- 
tion from cheap imports. 

The progress upstream more than 
compensates for the disappointment 
downstream. The quality of earnings 
from semiconductors is high: chip 
prices are fairly firm and the competi- 
tive advantage Of Japanese industry in 
the memory chip market looks sus- 
tainable in the medium term. The one 
concern is that the v -*s- 

keen not to repeat the 1990s mistaLJ m.- 
over-investing In new chip capacity 
that it may now be unable to satisfy 
the soaring demand. 


ACHIEVING STRATEGIC OBJECTIVES 

through a merger or acquisition 
requires an advisor with global industry 
expertise and transaction experience. 


sanofi 


Juu ozquirrd 

dtetduotiphzrnuzcevaati operations cf 


Sterling Winthrop Inc. 

frttfH 

Eastman Kodak Company 


TW, J uatd aiafi n a* <* t l Al m iar 

toSanefi an ihii mauocMi 


October tBM 


€d 

National Westminster 
Bank Pic 

has acquired 

Citizens First Bancorp, Inc. 


The w»Jotipudjqaij»J l a,»cicI.hfau«rtg 
the WutroU U'monnuta- 


JW 

The State of Bavaria 


ImtpynatitcdihTBU&iarenestif 
jubadiortstuipf its 58 JQ 4 , holding in 


Bayemwerk 

AktiengeselUchaft 


m exchange far a cadi tcpmlisarton 

payment a«J 2Sj\of 


V1AG Akriengesellschaft 


ThtmJtxmgnededtatrJlbe SluM c/ Baum* 
in tUi transuonn. 


Pharmacia 




has told 

Deltec Inc. 
to 

Smiths Industries PLC 


ThotnJers4|nB4dciadas/]nBnaalaavuar(o 
AB iu llu, tfMjenon. 


Pedro DomecqSjA 

has bem sold to 


Allied Lyons Pic 


TheimdCTuspvda tlc Jge/ mrt n rtH MjtieBrmlw 

•wn^ihirtMJni^IUnDiinafSA 

nAamnuaiM 


Advising a company successfully on its international 
corporate strategy requires significant investment 
in resources. It requires a global network of offices 
that can make a critical difference to any merger, 
acquisition or divestiture. It also requires experienced 
professionals who add detailed knowledge of com- 
mercial realities to the financial skills necessary to 
structure and complete successful transactions. 


Uiytm 


SI Electrolux 

and it* uAoQy au-ned fuiuidutyy 

White Consolidated 
Industries, Inc. 
have «oU 

Blaw-Knox Construction 
Equipment Corporation 


Clark Equipment Company 


The mlnsul acral tt/manctaLuJuiw 
Hrarniui and IVtaCwnWiini 
Wiumo, Inc. M rfua t« imndm 


We believe in assembling teams ivith the necessarv 
skills to meet a diem’s particular needs. Morel 
importantly, our dedicated teams arc committed to| 
seeing an assignment right through, from beginnings 
ro end. Our objective is to build long-term relation- 
ships with leading businesses around the world. 


A SUCCESSFUL APPROACH 


GLOBAL REACH, LOCAL EXPERTISE 


With 45 offices around the world, Lehman Brothers 
is ideally positioned as a local partner able to 
recognise and realise global opportunities. We have 
the highest quality industry specialists to provide 
clients with the strategic insights they require. We 
have the technical expertise to provide innovative, yet 
practical cross-border strategies and structures. 


As a result of this distinctive approach, ti-liman: 
Brothers advised on 70 completed mergeu. and 
acquisitions transaeri ons ivorld-widc in the first 
nine months of 199-1, with a combined value of, 
U.S. $26.1 billion. Over die same period wc 
also announced 44 transactions* with a combined 
value of UA $28.6 billion. If you arc interested in- 
harnessing our global experience, wc arc ready to 
work with you. 




Lehman brothers 



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21st CENTURY 
fjVAT £ R } A L S ANO ~ 

technology 

"T • O • D ■ A • Y 


BRITISH VITA PLC 


FINANCIAL TIMES 


COMPANIES & MARKETS 


©THE FINANCIAL TIMES LIMITED 1994 


Friday October 28 1994 


Overseas Mcwng 
by Michael Gerson 

1 OSt-446 1300 


..... — ^ 


IN BRIEF 


Firm recovery for 
Japan’s electricals 

Japan’s integrated electrical machinery 
manufacturers posted a Ann recovery in fmtf-haif 
profits thanks to buoyant demand for electronic 
devices and cost-cutting measures. 

Anothe r leading Japanese company, AH Nippon 
Airway s, reported a sharp drop in first-half pre-tax 
profits, despite a moderate recovery in passenger 
volumes. 

Meanwhile, the Japan's finance ministry suffered 
embarrassment over the partial privatisation of 
Japan Tobacco, whose shares made their Tokyo 
stock market debut The shares ended the day 23-5 
per cent below the public offer price, and wiped 
some Yl33bn «L4bu) off shareholders’ investaaits 
Page 26; World stock markets. Back Page 

Eurotunnel faces Investigation 

The Comm i s sio n des Operations de Bourse, the 
French market regulator, has launched an nffiriat 
inquiry into whether EuroTumiel, the fThanwoi 
Tunnel operator, fairly presented its financial posi- 
tion in its prospectus in May this year. 

Strong demand helps SKF 

SKF, the world's leading maker of roller bearings, 
a nn ou n ced a SKrl.Sbn ($297m) swing mtn the black 
at nine months, helped by strong demand from car 
and truck manufacturers in Europe and the US. 


Procter sues bank over derivatives 


Burlington raises Santa Fe bid 

The battle to create the largest railway network in 
the US intensified yesterday when Burlington 
Northern increased its bid for Santa Fe Pacific. 
Page 25 

Pul ral ar B una maintains growth 

Annual turnover at Daimler-Benz is expected to 
exceed DMioobn ($6&57bn) for the first trm/* this 
year, following a 9 per cent sales rise. Page 22 

Scotgen makes rival bid for Porton 

Scotgen Pharmaceuticals, the Anglo-US drug com- 
pany, made a rival bid for Porton Tntenurtimal, the 
UK biotechnology group which announced an 
agreed takeover this week. Page 24 

Derivatives lift G&N 38% to £14m 

Gerrard & National Holdings, the financial gr o u p 
yesterday demonstrated the success of its diversifi- 
cation into stockbroking and derivatives with a 38 
per cent rise in pre-tax profits. Page 28 

European Court rules against Ladbrofce 

The European Court in Luxembourg yesterday 
threw out an attempt by Ladbroke to break the 
French state-owned betting monopoly, the Pari 
Mutuel Urbain. page 30 


Companies In this Issue 


MG 24 

ANA 28 

.^sy. . — - •** ■* 30 

Aged 25 

Alcatel Aisthom 22 

Affied Domocq 28 

AUed Signal 25 

American Barrick 25 

Archer 30 

An 21 

BCH 22 

BS 20 

Bankers Thret 21 

BJogen 30 

Bnndcastle 30 

Biitn 20 

Burihgton Nttwi 2S 

CS*A 5 

Canada AWnes 24 

Cannon Street Inw 20 

Carrion 4 

Carrion investment 2* 

CNna Southern 21 

Clyde Petroleum 30 

Computer Peopfc 30 

fturtfyGasuata 28 

5 »wai*ta 10 

OutohaHono 1.20 

Outo Homagnofa 1. 20 

r* Uar D a re 22 

DMfcoPrintlng 30 

DovChemlcal 25 

Continental 30 

European 30 

ftwteSrfapaneae 30 

ton 30 

Foretrauq uttfe 1 

Fujitsu - 26 

Ganortofc 5 

General Ay-an vii 22 

Gerrard Afetfonal 20 

G4n4raie4iiEeuc 22 

GO demeietv 22 

HttacW 28 

J&SUXSmUr 30 

IBM 24 

tCt 21,20 

Oertwt Stufatdcs 

^naU laporta uuca 44-45 

Btedawk 6wt Ivmb 27 

Bond tore and oplns 27 

Bond prim and ytth 27 

CManflleB prloE 42 

Ohtonfa imamml, (fc 28 

H««*rancj rat« 48 

Gntand prion 27 

ftoJ tatawt tadksa 27 

FFA Woridtate Rack Peon 
ft GoUttnet Index 43 

raWtthHwdsR; 27 

ft-SE fctafas tadcea 43 


inchcape Estate s 

tnterfarew 

Japan Tobacco 

Kteert-e-ze Holdings 

Ladbroke 

London & Metro 

London St Lawrence 

L’QrW 

Ma|edto tav 

McGnlgn 

Mdnemey Props 

Martova 

MenvtavSwafri 

MBacton 

Mitsubishi Electric 
Mobil 
Munich re 
NEC 

New World Devdpmnt 
Placer Dome 
Porton 
Prassac 

Price WWerhouse 
Procter & Gamble 
SKF 

Saint-Louis 
Semauno 
Santo Fe 
Scantnxrk: 

Scottish Mortgage 
Scotts Holdngs 
Sears 

Sharper Image 

SWob 

Slebe 

Stanhope Properties 
7LG 

Tate & Lyle 

The Leading Edoa 

Tlphook 

Toshiba 

TteUeborg 

Trinity fart Hdgs 
UAL 

Usinor SacJTor 

Xerox 

Ziff-Davis 


Foreign exchange 
GWa prices 
liffe equity opttons 
London share service 
London tiadl ojSons 
Iterated tods amice 
Honey maVafc 
New | . *1 bond tenues 
New wm sham san*» 
Recam bane, U( 
Snort-terra W rates 
US interest rafis 
Worid SOdt Marines 


Chief price changes yesterday 


S"*»wr|Du 


«s + u 
2“ as + « 

y; 3i45 + m 

tod fid (y 7B5 - 16 

Wto 850 * 20 

toe. Z7B - 4i 

towTtNu cm 


52ft ♦ 1* 

am + 

73M + ft 

am * i* 

am - m 

104ft - 3ft 


tor York prices at 1230pm. 
UjMNpftto 

ton 148 * 9 

IKT tab 432 * 15 

GVOtoOtf 354 + 22 

Bwt — * 228 + 10 

tooFVMa 77+2 

toanfAM 454 + 18 

toto 155 + 10 

tot FI 158+7 

HUM 174 + 0 

tom 813 + 18 

taUnd 461 + 12 

Stnmb 20 + 2ft 

ton Hon 359 + 13 

taws Twit 658 + 15ft 


MAS pm 


SCtobflin 

UFBLnct* 

1WCWCM 


Brother W 
HortScH 
MR C&rp 

NMaB 


BKMmvya 

finest 


579 

+ 

3* 

772 

+ 

40 

SW 

+ 

270 

853 

+ 

15 

359 

+ 

14 

555 

- 

IS 

739 

♦ 

22 

828 

+ 

<2 

700 

_ 

2D 

2880 

— 

80 

919 

— 

21 

781 


19 

ate 

+ 

ID 

19 


71 

3S3ft 

- 

10ft 

lift 

- 

4 

ae 

- 

8 

182 

» 

7 

788ft 

- 

12* 

100 

- 

10 

1318 

- 

12 

(45 

- 

13 

118 

- 

9 


By RMiard Waters in New York 

Procter & Gamble has filed a 
lawsuit against Bankers Trust 
seeking damages of more than 
$13Qm over a derivative contract 
that caused a big loss at the OS 
consumer products giant 
The legal action is the second 
against Bankers Trust in recent 
weeks over losses stemming from 
derivatives, and marks a rare 
legal battle between one of the 
US’s biggest companies and a 
leading bank. 

In its lawsuit, filed in federal 
court in its horns town of Cincin- 
nati, P&G rlwimori thqf the Hank 
did not “accurately and fully* 

UAL aims 
to invest 
in China 
Southern 

By Frank McGurty in New York 

DAL, parent of United Airlines, 
said yesterday that it had an 
interest in taking an equity posi- 
tion in China Southern, the 
country's leading domestic car- 
1 tier. But the company stopped 
short of confirming that it had 
already held talks with the Chi- 
nese airline on acquiring a stake. 

China Southern, based in 
Guangzhou, province, is one of 
two airlines selected to be among 
22 enterprises traded on overseas 
stock markets. Goldman Sachs, 
the Wall Street investment bank, 
is completing arrangements for 
the {grime's listing on the New i 
York Stock Exchange. The Bei- 
jing government has placed a 35 
per cent ceiling on foreign 
investment in domestic air lines. 

British Airways, which 
already has established a joint 
engineering venture and com- 
puter services with China 
Southern, is also believed to be 
interested acquiring a stake in 
tiie carrier, ft has earned a repu- 
tation as one of the best man- 
aged regional airlines in China, 
with solid prospects for growth. 

UAL, winch operates the sec- 
ond-largest US airline after 
American, said its talks with 
China Southern were limited to 
discussions over a possible mar- 
keting agreement, which might 
also include join* training, main- 
tenance and technical sawices. 

The company, which already 

has scheduled flights into Bei- 
jing and Shanghai, denied pub- 
lished reports that the agenda at 
Its board meeting, held yester- 
day in Chicago, included a dis- 
cussion of its taking a stake in 
China Southern. 

UAL and Delta gains, Page 24 


disclose information about the 
derivative contract It is claiming 
$l30m in compensatory damages, 
and an unspecified amount of 
punitive riniwagpq 
“Bankers Trust called them- 
selves the experts and encour- 
aged Procter & Gamble to enter 
into a transaction we never 
would have accepted had it been 
fully and accurately presented," 
Mr Edwin Artzt, chairman, said. 
Contrary to the bank’s claims, he 
added, the contract “clearly 
wasn't" developed to meet P&G's 
needs, and a “safety valve" that 
it claimed was built into the 
agreement turned out to be “an 
iThwiirn" 


The most successful and ambi- 
tious of the US hawks in the fast- 
growing derivatives sector before 
the turmoil that hit markets ear- 
lier this year, Bankers Trust has 
struggled a gainst mount in g bad 
publicity in recent months. Last 
mouth Gibson Greetings sued 
over losses of 320m It sustained 
on derivatives bought from the 

hank 

Derivatives are financial 
instruments whose value is at 
least partly based on some under- 
lying asset or market 

The P&G suit stems from a 
complex interest rate swap con- 
tract under which the company 
and the bank had agreed to 


exch an ge payments in the future 
based on the interest rates pre- 
vailing at the time. The scale of 
the payments maife by each side 
would be based on the difference 
between the yield on five-year 
and 30-year VS government bond. 

P&G continued to maintain 
yesterday that it entered the con- 
tract as part of its normal prac- 
tice of using derivatives to cut its 
borrowing costs and reduce its 
exposure to changes in interest 
rates. The value of the swap con- 
tract plummeted in early Febru- 
ary, when US interest rates were 
increased for the first time in 
four years. Eventually P&G ter- 
minated the transaction, leading 


in part to after-tax losses of 
SlCCm reported in April. These 
include losses on a D-Mark swap 
contract P&G had also bought 
from Bankers Trust, though it is 
not suing over this instrument. 

P&G's treasurer was relieved of 
his title and put on special 
assignment in April, when the 
losses materialised. Although 
only 56. he later retired. P&G 
mainfainc that none of its offi- 
cers had been at fault “There is 
a notion that end-users of deriva- 
tives must be held accountable 
for what they buy," Mr Artzt 
said. “We agree completely, but 
only if the terms and risks are 
fully and accurately disclosed.'’ 


Axa bucks trend 
with 26% gain 


Brewer strengthens Its beer 


By Andrew Jack in Paris 

Axa, one of France’s largest 
insurance groups, yesterday 
backed the trend in the sector by 
reporting net group profits up 26 
per cent to FFrl^bn ($280m) in 
I Bw first six months of the year. 

Mr Claude B6b6ar, fhairmnn 
forecast that, in the absence of 
l “major catastrophes" in its insur- 
ance and reinsurance marirrtu , 
full-year profits would be higher 
than last year's FFWJMbn. 

“We are rather optimistic com- 
pared to the other insurance com- 
panies," gfl'ri Mr Hfanfjp T nnrifl , 
an Axa director. “We are the only 
mm to really make an operating 

rinri x 

(MIL 

Axa’s total consolidated reve- 
nues rose 10 per cent to 
FFr65 Jbn during the first half, 
while revenues toimffng uncon- 
solidated mutual companies 
stood at FFr71 -2bn compared 
with FFr6A8bn last year. 

Consolidated premium inrame 
from the group's life businesses 
rose by one third to FFiT^bn, 
while non-life premiums rose by 
just 8 per cent to FFr&2hn during 
the first half 

The company warned of a 
toughening market in the UK, 


driven by regulatory and Trea- 
sury pressure, which will force 
disclosure by insurance compa- 
nies of commissions. The com- 
pany said this could put the 
industry at a competitive disad- 
vantage and drive away potential 
customers who mad* a choice of 
premiums simply on the bw<p R of 
mice. 

Axa’s worldwide net group 
income from reinsurance 
increased nearly three-fold from 
FFr49m to FFrl43m, with a 13 per 
cent increase in financial 
services and property to 
FFi304m. 

The losses from holding 
company activities dropped from 
FFKJlm to FFrlOm. while losses 
from intra-group transfer fr om 
subsidiaries an d equity holdings 
increased from FFrl87m to 
FFr296m. 

Geographically, group consoli- 
dated net income from France 
rose 7 per cent to FFr393m, while 
that from the US rose to FFi224m 
(FFrtot) as Equitable, the insurer 
controlled by Axa, recovered. 

Net income from the UK 
dropped 22 per cent to FFr200m, 
while net income for the group's 
activities in the rest of the world 
fell 15 per cent to FFrSSm. 



European beer safes 

to* tow at ' 

2- DsnmlKronmboug 
‘4. Catttharg 


5 ?r(eri)rtnv 


MB ora of hec to Brea 
53.7 


(tones 
• OK. 
Denmark 


& to UK 1&A 

> % 7.’ •• £\''£ Gemawy • •. - BkO 

k M»orz Germany 8.7 

r?."v v • '•\ t> uk - ao 

West European' beer consumption versus 15-34 age group 


Beer consumption 


30 ■ ' • 


15-34 age group 


1307 88,83 90 31 82 S3 M 35 98 87 SB 33 3000 
aaiaw:*toi« » iw w8p«LCa etow ' 

Co ntinuin g the consolidation among European brewers. Interbrew of 
Belgium said it was negotiating to buy Allied Domecq’s Dutch 
brewing subsidiary, which produces Oraiqebooin. Details, Page 28 


ICI up 59% and sees ‘promising’ demand 


By Daniel Green in London 

Britain’s Imperial Chemical Industries 
yesterday provided confirmation that the 
chemicals industry is an the upswing with, 
thintquarter figures that showed operating 
profits more than doubling in some divisions. 
But it warned that while prices for many of 
its goods were rising, those “nearer the con- 
sumer", such as paints, “remain very compet- 
itive”. Its shares foil 12’Ap to 786%p- 
Sir Denys Henderson, chairman, said 
demand in most markets looked “more prom- 


ising than for same time. Activity in the US, 
UK and Australian markets remains gener- 
ally firm. Recovery in continental Europe 
appears to be under way and even the Japa- 
nese economy seems to have bottomed. 
Robust growth in the rest of the Far East 
continues.” 

Third quarter pre-tax profits, excluding 
exceptional items, rose 82 per cent from £72m 
to £131m (3214m). Sales for the same period 
rose S per cent from EU6bn to £235bn. 

Including exceptional items, such as the 
costs of dosing the Canadian paints business, 


pre-tax profits wets £L43m, 59 per cent higher 
than a year earlier. Earnings per share for 
the quarter were lLlp against 7.5p. 

ICTs polyurethane businesses were among 
the star performers in the third quarter. The 
company is to spend £UXhn on In a new 
Dutch plant to make methyl diphenyl dilso- 
cyanate. a component in polyurethane manu- 
facture. The UK group’s biggest division, 
industrial chemicals, which includes petro- 
chemicals and fertilisers, also performed 
strongly thanks to price rises. 

Lex, Page 20 



Toys for yuppies lose allure as age of frivolity passes 

Gadget r...A^i> thi? 

^ l PFVPUE'ficr ■ ) 

sellers > — 

feel the v gBB 

squeeze 

S hoppers are used to sales 
patter - autumn bargains, 
end-ofseason discounts and 
the wto But one UK chain has 
begun wooing customers with a 
different campaign, the “Take- 
over Clearance Sale”. aHP 

The Leading Edge, purveyors \ } \ I 

of gadgets and gimmicks, is saD- V| ) / 

ing off surplus stock in a farewell 
to tiie unrestrained consumerism 
of the 1980s, when demand e-TTir'R 

surged for useful but unneces- 
sary products such as talking 
pens, battery-powered sponges 
and laserguided golfing aids. 

Described by one retail analyst gltng to extract a profit from The handle s catalogues for Britain 
as a "requiem to the boom”, the Leading Edge, Sharper Image Science and Natural Hlsto: 
move follows the disposal of The saw its profits falter as consuat- Museums, where solar-powert 
i -parting sage by Kleeu-eze Hold- ers stopped busing products such clocks ami pocket “steDarscope 
rr \ mt ) the toie shopping gr ou p, as the Personal Lite Clock, which are more likely to find buyers, 
whfoh tried and failed to use its tirirs down the owner’s life expec- Sharper Image, meanwhil 

successful mail order operations fancy, “We found we could not acted to restore market coni 
to su pport a retail fh«m compete with the warehouse dence by buying bat* its ov 

As KLeen-e-ze found to its cost, stores, so we've moved into more shares in August Its shares ha' 
i m pulse purchases of executive practical products, particularly in risen 31 per call whila Kleen-e-: 
toys and gadgets have all but healthcare," said one Sharper shares fell 17 per cent since 
dried up. One only has to look Image executive. sold its r^afi outlets, 

around boardrooms to know the Even under the auspices of Mr Klein, however, has i 
age of the garig** is waning, say healthy living, the company still regrets. He is deter min ed to foa 
retail analysts. Rare is the execu- offers some bizarre accessories - on home shopping. "Manageme: 
tive whose desk now boasts a the wrist-worn Snore Control time and working capital cs 
clock “accurate to within one sec- System upsets the offender’s now be concentrated on oi 
cmd in a million years". sleep patterns when the noise growing business - Kleen-e-: 

In the US too, the disaffection readies unacceptable volumes. Homecare and Innovations." 
with rtomg such as watches that Kleen-e-ze and Sharper Image Sharper Image is also increa 
double as TV remote controls has have pursued different strategies ing its catalogue activities, whit 
forced Sharper Image, the San to overcame the problems facing ha ve go wn faster than orer-th 
Francisco-based gadget mannfac- gadget makers. counter operations, 

turer and retailer, to switch to The UK company decided to “Both companies have tried 
more practical products. withdrew from high street retail- tailor the product to being ma 

“We got over-confident and let ing after a two-year restructur- practical and less gadgety," saj 
our rataiftgiw and merchandise ing. It has focused instead on one analyst “But they still re 
get state,” said Mr Richard Thai- mail order and has captured a an impulse purchases for a lari 
heimer, the group’s chairman sizeable slice of the market for proportion of their profits, ai 
and self-proclaimed “P.T. catalogues offering everyday I'm afraid that era is over.” 
Barmnn of gadgetry". items ranging from cordless ket- — 

While Kleen-e-ze was strug- ties to thermal gloves. It also 11IH BUI 


Usinor 
returns to 
profit in 
first half 

By John Ridding in Paris 

Usinor Sacilor, Europe’s largest 
steel producer, has returned to 
profit in the first half after suf- 
fering losses of FFr5.7bn fSl.ibn) 
in 1993. 

Hr Francis Mer, chairman, 
said the French state-owned 
group, which is on the list of 21 
public sector companies slated 
for sale by the government, 
achieved net profits of FFM71m 
in the first six months, against a 
loss of FFr2u59bn in the first half 
of 1993. Sales rose from 
FFr39.74bn to FFr39 it-lbn. 

The return to profit by one of 
the biggest loss-makers in the 
French public sector partly 
reflects recovery In the interna- 
tional steel industry after two 
years of recession. The revival 
was one of the main reasons that 
the European Commission this 
week abandoned Its plan to cut 
steel capacity. Mr Mer forecast a 
continued improvement in 
demand and prices for steel and 
said that the full impact would 
be felt in the second half. 

Profits were also boosted by a 
FFr900m exceptional gain Aram 
the flotation of a 40 per cent 
stake in Ugine, the stainless 
steel division. Proceeds from the 
operation also helped reduce the 
group’s debt from FFr24. 41® at 
the beginning of the year to 
FFT2026bn at the aid of June. 
For the first time in four years, 
Usinor’s net debts are less than 
shareholders* equity. 

According to Usinor, operating 
results are now near break-even. 
But it said that losses suffered 
by Unimetal. which makes wires 
mid steel for engineered prod- 
ucts, continued to undermine the 
company’s overall performance. 

Usinor has been implementing 
a re str uc tu ring plan to cot its 
borrowings, eliminate loss-mak- 
ing activities, and achieve sus- 
tainable profitability. Earlier 
tins month, the company said it 
was negotiating the sale of its 
SAM steel reinforcements opera- 
tion to ASW holdings of the UK. 

Mr Mer also outlined plans for 
a special steels division which 
would group its Unimetal, 
Ascometal and CLI units, pool- 
ing research and development 
costs. 

The restructuring is aimed at 
preparing Usinor for privatisa- 
tion. A sale is not imminent, as 
Usinor needs to reduce its debts 
and other candidates, including 
the Assurances Gdntrales de 
France insurance concern and 
Seita, the tobacco company, are 
being primed for sale. 
Background, Page 24 


Management Buy-Out 

I 

EKCO P ACKAG ING 
LIMITED 

Acquisition finance & 
Working Capital Facilities 

Arranged by 


Management Buy-In 

DISCOVERYINNS 

LIMITED 


Expansion Finance 
Senior Debt 

Co-provkW by 


ACQUISITION 
FINANCE / 


ACQUISITION 
FINANCE / 


gling to extract a profit from The 
Leading Edge, Sharper Image 
saw its profits falter as consum- 
ers stopped buying products such 
as the Personal Ufa Clock, which 
ticks down the owner’s life expec- 
tancy. “We found we could not 
compete with the warehouse 
stores, so we've moved into more 
practical products, particularly in 
healthcare,” said one Sharper 
Image executive. 

Even under the auspices of 
healthy living, the company stfll 
offers some bizarre accessories - 
the wrist-worn Snore Control 
System upsets the offender’s 
sleep patterns when the noise 
reaches unacceptable volumes. 

Kleen-e-ze and Sharper Image 
have pursued different strategies 
to overcame the problems facing 
gadget makers. 

The UK company decided to 
withdraw from high street retail- 
ing after a two-year restructur- 
ing. It has focused instead on 
mail order and has captured a 
sizeable slice of the market for 
catalogues offering everyday 
items ranging from cordless ket- 
tles to thermal gloves. It also 


handles catalogues for Britain’s 
Science and Natural History 
Museums, where solar-powered 
dorks and pocket “steDarscopes" 
are more likely to find buyers. 

Sharper Image, meanwhile, 
acted to restore market confi- 
dence by buying bad; its own 
shares in August Its shares have 
risen 31 per cent, while Kleen^ze 
shares fell 17 per cent since it 
sold its retail outlets. 

Mr Klein, however, has no 
regrets. He is determined to focus 
on borne shopping. “Management 
time and working capital can 
now be concentrated on our 
growing business - Kleen-e-ze 
Homecare and Innovations.” 

Sharper Image is also increas- 
ing its catalogue activities, which 
have grown faster than over-the- 
counter operations. 

“Both companies have tried to 
tailor the product to being more 
practical and less gadgety," says 
one analyst “But they still rely 
on impulse purchases for a large 
proportion of their profits, and 
Tm afraid that era is over." 

Tim Burt 


Management Buy-In 

GATWTCK MOTORS 
LIMITED 

Acquisition Finance 

Arranged ty 


ACQUISITION 
FINANCE / 


Ongoing commitment 


Barclays Acquisition Finance is a team of professional 
and experienced managers committed to financing acquisitions. 

To find out more call 071-696 2804 


ACQUISITION 
FINANCE / 

MURRAY HOUSE, 1 ROYAL MINT COURT. LONDON EC3N 4HH 


( 1 C b i mwbntl MEG 


n 





FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Daimler-Benz maintains growth 


By Christopher Parkes 
in Frankfurt 

Annual turnover at 
Daimler-Benz is expected to 
exceed DMIOObn ($66-£7bn) for 
the first time this year, follow- 
ing a 9 per cent sales rise to 
DM73 -2bn in the nine months 
to the end of September. 

The factors which generated 
a 13.4 per cent surge in turn- 
over and a sharp profits turn- 
round in the first half had con- 
tinued in the third quarter, the 
group said in an interim report 
yesterday. 

These included international 
economic recovery, further 
cost cuts and productivity 
increases - the group work- 
force was cut by 7 per cent In 
the year to the end of Septem- 
ber - and new car models from 
the Mercedes-Benz subsidiary, 

Munich Re 
lifts payout 
to DM12 

By Andrew Fisher in Frankfurt 

Munich Reinsurance, the 
world's largest reinsurance 
company, is increasing its divi- 
dend and strengthening 
reserves after a rise in profits 
which benefited from a sharp 
cut in underwriting losses. 

The payment to shareholders 
for the year to June 30 1994 
will rise DM1 to DM12 a share, 
with the parent company’s net 
profit up by 23 per cent to 
DMSlm ($6lm). Full group fig- 
ures will be given early next 
month. In 1992-93, group net 
profits rose 3 per cent to 
DM287m, with group premium 
income 11 per cent higher at 
D&126 bn. 

Last year's underwriting loss 
was DM3 15m, about a third of 
the previous year’s figure. 

Munich Re, which owns 25 
per cent of Allianz, Germany's 
and Europe's largest insurance 
concern - which in turn owns 
25 per cent of Munich Re - also 
said it had added a further 
DM523m to its provisions for 
claims equalisation and for big 
risks, alter DM33m in 1992-93. 
In spite of lower profits on Its 
investments, It has also put 
another DM350m into its 
reserves for claims still out- 
standing, compared with 
DM450m last year. A further 
DM50 will go into its revenue 
reserves. 


which traditionally generates 
the largest share of sales and 
profits. 

The report, which contained 
no earnings data, said Mer- 
cedes sales rose 13 per cent to 
DM51bn in the period. Car fac- 
tories were working at full 
capacity, and deliveries of cars 
had increased 29 per cent to 
436,000 units. 

However, sales revenue from 
this division rose only 13 per 
cent to DM31bn, reflecting both 
the fierce price competition in 
the car market and the high 
proportion of sales attributable 
to the new C-class car, intro- 
duced last year at prices virtu- 
ally unchanged from those of 
its predecessor. 

Mercedes reported particu- 
larly brisk demand for cars 
and Freigfatliner trucks in the 
US, where turnover rose 22 per 


cent and helped increase group 
revenues there by 13 per cent 
to DMl3bn. 

Mercedes' sales in Germany 
rose 31 per cent, while in the 
rest of western Europe turn- 
over increased 37 per cent 

Meanwhile, the negative fac- 
tors which have long dogged 
Deutsche Aerospace (Dasa) - 
defence budget cuts and low 
demand from giriinps - contin- 
ued to depress the subsidiary's 
performance. Sales, which 
were down 5.6 per cent at half- 
way, were 9 per cent lower at 
DMiO.sbn at the end of the 
third quarter. 

While the introduction of the 
Domier 328 regional aircraft 
helped boost turnover in the 
aircraft division, it was not 
enough to offset the effects of a 
fall in sales at Fokker of the 
Netherlands. 


Dasa. which will in future be 
known as Daimler-Benz Aero- 
space, also recorded a 4 per 
cent increase in incoming 
orders during the review 
period. 

The electronics and electrical 
engineering subsidiary. AEG 
(recently renamed AEG 
Daimler-Benz Industrie) raised 
sales 6 per cent to DM7.4bn, 
due mainly to improved 
foreign operations which 
increased turnover 12 per 
cent 

At home, where sales rose 
only 2 per cent, the strongest 
push came from the railways 
and microelectronics divisions. 

The group’s services divi- 
sion, Debis, which includes 
financial, mobile communica- 
tions and software services, 
reported a 17 per cent increase 
in sales to DM7-9bn. 


Strong demand helps SKF back 
to the black after nine months 


By Christopher Brown -Humes 
in Stockholm 

SKF, the world's leading 
maker of roller bearings, yes- 
terday announced a SKrl^bn 
($2S7m) swing into the black at 
nine months, helped by strong 
demand from car and truck 
manufacturers in Europe and 
the DS. 

The Swedish group also ben- 
efited from cost-cutting, lower 
financial costs and a return to 
profit at Ovako Steel. 

Profit after financial items 
amounted to SKrl.I4bn, com- 
pared with a SKr709m loss last 
time. The result keeps the com- 
pany on course for full-year 
profits of SKrl.5bn as the 


fourth quarter is traditionally 
the company's strongest 
period. 

Sales climbed 14 per cent to 
SKr24.6bn from SKr21.5bn, 
driven mainly by a 12 per cent 
rise in volumes. However the 
company said it also benefited 
from price rises, particularly in 
the after-markets ‘segment, as 
well as from the weaker krona. 

Operating profits amounted 
to SKrl.43bn, after a SKr99m 
loss, while financial costs fell 
to SKx291m from SKrSlOm. 

The group's main unit, bear- 
ings and seals, achieved a 
SKrl.05bn profit, compared 
with a SKr422m loss, after 
sales climbed to SKr22.9bn 
from SKr20.G3bn. 


Sales to the automotive sec- 
tor, the company’s biggest cus- 
tomer, were nearly 20 per cent 
higher as it benefited from ris- 
ing demand and increased mar- 
ket share. 

Mr Mauri tz Sahlin, manag- 
ing director, said the North 
American trucks market had 
continued to develop strongly 
with no signs of weaker 

detnantj - 

The group’s two other seg- 
ments, machinery and after- 
markets, also showed positive 
sales growth. 

Ovako Steel reported a 
SKrl02m profit on sales of 
SKr2.73bn. In the same 1993 
period, it made a SKrtOlm loss 
on sales of SKr2.12bn. 


Trelleborg posts sharp turnround 


By Christopher Brown -Humes 

Rising metal prices and 
reduced financial costs enabled 
Trelleborg, the Swedish mining 
and metals group, to report a 
SKr534m ($75. 54m) profit for 
the first nine months. The 
result compares with a 
SKr884m loss in the same 1993 
period. 

The turnround came in spite 
of a Ml In sales to SKrl4.05bn 
from SKrl8.72bn caused by 
restructuring. 


A better performance from 
the group's four main divisions 
- mines and smelters, rubber 
products, metal processing and 
distribution - enabled operat- 
ing profits to rise to SKr615m 
from SKr64m. 

There was also a SKr296m 
contribution from associated 
companies, after last year’s 
SKrl73m loss, due mainly to 
higher earnings from Falcon- 
bridge, the nickel producer. 

The third element in the 
turnround was the fall in net 


financial costs to SKr377m 
from SKr775m, reflecting lower 
debt levels and interest rates. 

The best performance came 
from the mines and smelters 
division which swung to a 
SKrL37m operating profit from 
a SKrl91m deficit The unit has 
benefited from higher prices 
for copper, lead, nickel, gold 
and silver. 

Mr Kjell Nilsson, group pres- 
ident, said the positive trend 
continued for all business 


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5. G. Warburg 8c Co. Ltd. announce that Notes for the no minal 
amount of £3,800,000 have been drawn for redemption on 
30th November, 1994, in accordance with Clause 5(b) of the 
Terns and Conditions of the Notes. 

The distinctive numbers of the Notes drawn, are as follows:- 

12 33 55 79 102 123 144 1 66 187 208 

229 251 272 293 315 337 358 380 401 42L2 

445 4€< 1446 1671 1693 1715 1739 1764 1789 1812 

1835 1858 1879 1900 1921 1944 1970 1991 

On 30th November, 1994 there will become due and payable upon 
presentation of each Note drawn for redemption, the principal amount 
thereof, together with accrued interest to said date, at the office ofc- 

S.G.Warburg & Co. Ltd. 

2 Finsbury Avenue, London EC2M 2 PA 
or one of the other paying agents named on the Notes. 

Interest will cease to accrue on the Notes called for redemption on and 
after 30th November, 1994 and Notes so presented for payment should 
have attached all Coupons maturing after chat dace. 

£7 6 ,200 ,000 nominal amount of Notes will remain outstanding 
after 30th November, 1994. 

28th October. 1994 

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Payment wffl be made on Barclays Investment Funds (Luxembourg) on or after 
the 31st October 1994 (x-DMdend 31 si July 1994) at the fotonrfng rats per 
share: 

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The foflowing is a list of paying agents ter bearer certificates and coupons. 
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European Bank for 
Reconstruction and 
Development 

USS 150,000,000 
Collared floating rate notes 
due 2002 

Notice is hereby given that the 
rate of interest has been 
determined by Credit Suisse 
Financial Products os S. 75% per 
annum for the period from 28 
October 1894 to 28 April 1995. 
Interest payable on 28 April 
1995 will amount to USS29.0T 
per USS 1,000 note, 65X290.69 
p*?r USS ( 0,000 note and 
US$2,906.94 per US$100,000 
note. 

Fiscal agent Morgan 
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JP Morgan 


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£150,000,000 
Floating rate notes 
due 1996 

Notice Is hereby given that 
the notes will bear interest 
at 6.25% per annum from 
26 October 1994 to 26 

January 1985. Interest 

payable on 26 January 1995 
will amount to S157S3 per 
510.000 note and 51,575.24 
per 5J00.000 note. 

Agent: Morgan Guaranty 
Trust Company 

JPMorgan 


Gildemeister 
in talks with 
Milacron on 
sales deal 

By Andrew Baxter 

Gildemeister and Cincinnati 
MHacron, two of the world's 
largest machine tool compa- 
nies, are discussing a sales 
agreement which would 
strengthen Gildemelster's 
presence in the US and Mila- 
cron's in Europe. 

Hr Axel Kemna, chairman 
of Gildemeister, which is 
based in Bielefeld, Germany, 
said a deal wanld enable the 
company to lift sales in the 
US, where its market position 
Is weak. In turn. Milacron 
co old use the recently-formed 
Deckel Maho Gildemeister 
sales network in Europe. 

If the two companies reach a 
deal, it wonld be one of the 
most important co-operations 
between US and European 
machine tool companies, and 
strengthen the sales base of 
both companies as the fierce- 
ly-competitive machine tool 
market emerges from reces- 
sion. 

The discussions between the 
two companies come amid con- 
tinuing speculation that Mila- 
cron might buy a 25 per cent 
stake in Gildemeister. Mr 
Kemna, speaking in London, 
said the rumours were untrue. 

Gildemeister derives only 5 
per cent of its sales from the 
US market, and is keen to 
expand its sales outside 

Europe. 

A deal would cap an extraor- 
dinary period of corporate 
activity for Gildemeister. 

In July, it paid DM90m 
($60. 18m) for the main assets 
of Deckel-Maho, the ill-fated 
merger of two big German 
milling machine companies 
completed only in December 
last year, and called in an 
administrator five months 
later. 

The purchase gave Gilde- 
meister a strong position in 
milling machines to comple- 
ment its own range of turning 
machines. Gildemeister is rais- 
ing DM70m through a capital 
increase, of which DM40m will 
go as share capital for Deckel- 
Maho. 

Following the takeover, Gil- 
demeister would make a loss 
this year, may break even next 
year, and should make a profit 
in 1996, said Mr Wotnnn. 


Alcatel plans 20% stake 
in Generate des Eaux arm 


By John Ridding in Paris 

Alcatel Alsthom, the French 
engineering and telecommuni- 
cations group, said yesterday It 
planned to take a stake of 
about 20 per cent in the mobile 
telephones operations of Gen- 
erate des Eaux, the utilities 
and communications groups. 

Alcatel said its decision to 
seek a stake in Cofira. the 
mobile telecoms arm of G6n£r- 
ale des Eaux, follows the fail- 
ure of its bid to win the licence 
for Trance’s third mobile tele- 
coms telephone network. Ear- 
lier this month, the French 
government awarded the 
licence to Bouygues, the con- 
struction and communications 
company. 

The French government 
claimed Alcatel’s position as a 


leading supplier of telecoms 
equipment had prejudiced its 
bid to become an operator. But 
the company rejected the argu- 
ment and said It still intends to 
expand in telecommunications 
services. 

The planned investment in 
Cofira could involve the pur- 
chase by Alcatel of the 19.9 per 
cent stake currently held by 
Credit Lyonnais, the loss-mak- 
ing state-owned bank. Alcatel 
said it was in discussions with 
Credit Lyonnais, but that it 
was also holding talks with 
other minority shareholders in 
Cofira. 

The companies declined to 
comment on the possible 
amount of the transaction. 

The proposed alliance is the 
Latest step in the reinforcement 
of the mobile telecoms activi- 


ties of Generate des Eaux. Two 
weeks ago. the company 
announced that it had 
extended an alliance with 
Vodafone of the UK and that it 
was forming a new partnership 
with Southwestern Bell of the 
US. 

The various moves reflect 
the increasing competition in 
the French mobile telephone 
market and the rapid. If 
belated, expansion in the sec- 
tor. 

At the end of August, France 
bad about 730,000 mobile tele- 
phone subscribers, compared 
with 2J2m in Germany. How- 
ever, both G&terale des Eaux 
and Franco T6I£com. which 
operates the second mobile net- 
work, report strong growth in 
subscriptions following reduc- 
tions in tariffs. 


BCH drops sale of Azucarera 


By Tom Bums In Madrid 

Banco Central Hispano, the 
Spanish banking group, has 
dropped plans to sell its con- 
trolling stake in General Azu- 
carera, Spain’s second-ranked 
sugar company, to Saint-Louis, 
the French food and paper 
group, and to the UK's Tate & 
Lyle, after strong objections 
from the Spanish agriculture 
ministry. 

The bank has also refused to 
sell its 47 per cent stake in 
Azucarera to a consortium, 
backed by the ministry, which 
was led by Acor, a co-operative 
owned by sugar-farmers and 
the third-largest domestic pro- 
ducer. 

The stalemate Is a setback 
for BCH, which is anxious to 
reduce its industrial assets to 
inject greater liquidity into its 


core financial business. Before 
the ministry stepped in, the 
bank had an agreement to sell 
an initial 20 per cent of Its Azu- 
carera holding to Saint-Louis 
and Tate & Lyte, which already 
jointly own 20 per cent of the 
sugar company, for Pta20bn 
(8160m). 

The counter-offer, which 
matched the Ptas.100 per Azu- 
carera share agreed with the 
foreign groups and bid for the 
entire BCH stake in the sugar 
producer, was nevertheless 
unacceptable to BCH because 
it was supported by Banco Pop- 
ular. The bank would have 
bought 10 per cent of Azucarer- 
a’s equity and taken over Its 
banking business. 

The rival bid was also 
resisted by Mr Josfi Joaquin 
YsasL-Ysamendl, Azucarera 
chairman, who objected to 


being pushed by the govern- 
ment into the arms of Acor. 

The row over BCH’s aborted 
disposal has raised questions 
over whether a Spanish group 
can sell assets to whom it 
chooses, and whether foreign 
companies can buy freely into 
Spanish companies. 

The ministry argued that an 
Acor-led takeover of Azucar- 
era, which accounts for 23 per 
cent of the domestic sugar 
market would protect Spain's 
sugar quota in the European 
Union. 

The issue is a sensitive (me, 
for the sugar sector represents 
one of Spain's few triumphs 
over the common agricultural 
policy, the quota guaranteed to 
Spanish producers slightly 
exceeds domestic demand and 
has a support price somewhat 
above the EU average. 


L’Oreal sales surge to FFr 34 . 5 bn 


By Andrew Jack 

L'Oteal, the world’s largest 
cosmetics group, yesterday 
posted sales up 14.4 per cent to 
FFr3*L5bn ($6.74bn) at the nine 
months stage, based on aver- 
age exchange rates. This would 
be equivalent to FFr47bn based 
on exchange rates at the end of 
last month, the company said. 


The group said full-year 
profit would be up 20 per cent 
on ordinary activities before 
tax - excluding any significant 
changes in exchange rates. 

The third-quarter results 
were re-stated following con- 
solidation from July l this year 
of four new subsidiaries. The 
group announced a transfer 
and share purchase arrange- 


ment in September with Cos- 
mair USA, Cosmair Canada, 
Lorsa/Fagel of Switzerland and 
Procasa of Spain. 

L'Otfal said the sales under 
the old basis of consolidation 
would have been up 7.6 per 
cent at nine months. Mr Limi- 
say Owen- Jones, chairman and 
chief executive, called the 
results “very ^encouraging". 


r 


DANONE 


CONSOLIDATED SALES UP 
IN THE FOIST Nfftt MONTHS OF 1994 

Danone Group's consolidated sales for the first nine months of the year 
totaled FF56.2 billion, up 625% an FF52.7 billion in the same period of 
1993. 

Sales by division vm as foflaws: 

fri FFm S omJ 1993 1 994 


Europe 

Dairy products 16,567 17,043 

Grocery products and Pasta 9,741 9,556 

Biscuits 9455 9.531 

Beer 5,229 5,256 

Mineral wtrtar 4,434 5,588 

Containers 5,187 4,952 

totamcJiaod 3,358 5/01 


Intragroup transactions (1.328) (1,434) 


Grow TOW. 52743 56.193 


•International* business includes sales by non-European companies 
included in the consolidation. 

Oxnpnrisens of data from one /ear to fa next met be adjusted lor fa bflowing 
•henger first exocidoSon of subskfiartes Volvic in France (era of July 1, 1993) and 
Agues da tanjeron In Spain, both in fa Mineral water division, and of new 
QctprisiHans In fa Alia/PoaAc region included tn fa intemationed drriwsn. In 
addition, a of 1 994 tenrin de Masnifeu in fa Containers division is accounted 
Far by fa equity mefad. 

Restated for identical structures and exchange rates, sales by division 
show fa foflowing changes (ram the same period of last year. 

Europe 

Dairy products ♦ 57% 

Grocery products and Pasta -1.0% 

Biscuits + 0.6% 

Beer +03% 

Mineral water 4 8.1% 

Containers +5.7% 

International «■ 1 4.4% 




Sovereign (Forex) Urf. 
24hr Foreign Exchange 
fangm fending Facility 
Competitive Prices 
Da3y Fax Service 
fcfc 071-931 9188 
F«e 071-931 7114 

43o H ii rlrtng liq m Mora Bond 
tendon jWIWOCE 



UNBEATABLE 

INTEREST. 

INSTANT 

ACCESS. 

At >our newsagent every Friday. 


INVESTORS! 
IQ IRONIC I, FI 


THE CrtT INSIDE OUT 


INVITATION jg; . . 

Far the submission of Declaration or I&tmst 
for the Purchase of th* assets of Kasnndr* Mines of fa company 
‘HELLENIC CHEMICAL PRODUCTS & t 
FERTILIZERS COMPANY &A." OF ATHENS, GREECE 

"ETUNIK1 KEPI1ALEOU S.A. Administration of Assets end Liabilities’ lo its 
capacity as Liquidator uf ’I IELLENIC CHEMICAL PRODUCTS ft FERTILIZERS 
COMPANY & A." of 20. Amalias Avenue, Athens, Greece (the "Com petty") which 
has been declared by virtue of Decision No. 429V1992 of fa Athena Court of 
Appeal (in conjunction with Decision No. 7714/20.7.1992 of the same oowt, wWch 
approved fa separate sale of fa prodnenra umla of fa Company) under special 
liquidation, according to fa provisions of par. Ha of aidde 46a of Law 1892/1990 
(as supplemented by ankle S3 of Lew 2224/1994) 

in riles 

interested panics to submit within twenty (20) days from fa publication of this 
Notice Non-binding Written Declaration of Interest fbr fa purchase of the 
production unit of Kanandra Mines of fa Company at described below as well es 
for fa establish meat of a 03M plant. 

BRIEF INFORMATION: Kessandn Mines am located In the region of Stnuni 
and Olympias villages to fa ChaUddiH Peninsula (Northern Greece) and cover an 
area of 1,660/400 sq.ro. innl inting waiters' booses, three differential Rotation of fa 
o jt plants with an animal capacity of 700,000 tana fbr the Aral two plants and 
4DOJOOO urns for fa third one. There are proven mixed sulphide (Hs-Zn-Ag-Au) ore 
reserves amonniing to 10£ million tons (including 9J3 mi) I run tons of Auriferous 
ore) and 45 million tons of probable reserves (of which approximately 4.1 million 
mas of Amr&nms ore), as well as gold ore reserves os follows: U million tons of 
Pyrite, 4 mill ton tons of Clufcopyritc. L2 million mas of Pyroloosiki ft Rndodtrosite 
and 90 mill ton tom of poor porphjrre copper-gold. There are especially constructed 
shipping loading fad lilies directly into the Aegean Sea. The Company holds mining 
ooucesaiom over a total are of 314 a). Km. The min es are currently In operation with 
a pers onn el oF 916 employees. 

PROCEDURE: The sale of Kassandta Mines will take place by public tender in 
accordance with fa provisions of article 46a of Low 1892/1990 (as supplemented by 
article 14 of Law 2000/1991 and modffled by are. 53 of Law 2224/1994) and fa 
terms mentioned in fa relevant Invitation to tender, which will be published in fa 
Greek and Foreign Proas on the date required by Law. 

BUSINESS PLAN AND INVESTMENT PLAN: Offers submitted should be 
accompanied by: 

n. A Business plan related co fa development of Kaaaandra Mines and fa 
Installation of a gold plant, employing environmentally friendly technology. 

b. An Investment plan (amounr and type of investment, proposed time schedule 
for Its implementation). 

c. An Employment plan [number of employees, duration, time schedule of 
employment). 

d. A Proposal regarding warranties related do fa payment by Installments in — — 
of credit and the implementation of the Business, the Investment and the 
Employment Plans, as above. 

ASSESSMENT OF OFFERS: In assessing fa offers submitted, fa following 
points will be taken into account: 

♦ Offer Price 

♦ Business Plan 
Investment Plan 

♦ Employment Plan 

O The environmental implications of fa proposal production methods 
9- Warranties 

^ Investor's IrusTwonhincsa. 

ANNOUNCEMENT BY A THIRD PARTY 

The Liquidator has been uked by Ibc Deputy Minister of Industry Energy and 
Technology, acting on behalf of the Greek Government iu make the follow.™, 
announcements: ^ 

a- The installation of a gold plant project h» \<en mdnfcd in fa Oiutacsa Plan for 
Industry of the 2nd Commnaity Support Krametwwk already approved by fa 

t-Vi 

b. The Greek Government guarantees the granting of all necessary InmlUiion 
licenses, coikcssukh and other Slate approvals required by law. 

m “I! “T ,lK ah ° We *' Tcrf "« no1 bv ,hc Mlnkto ,n he given 

to all interested panics lugcilwr with fa Offering Memorandum. 

^ C w RAT,0NS 0I ' IN ,K8tsT ■ ™*™ K r 
INFORMATION: For fa Hibmratmnof Dcdaraik™ i nltml- M wn ■ . 

to ubiun fa Offering Memorandum anti any other Information iwuw.nin/fa 

Kuwomlra Mtoes. [upon execution of a cunfidentlsllty agreement) pka* uddjPM fa 

Liquidator or fa Company; "LTlINiKI KliPUAId-UU X a Admlmsirmion of 

Assets ami Liabilities-, address: 1 Sknufenfa fate, Athens 

+30-1023 14.84 fax; +30-IO2I.79.U5 (atm. Mrs Marika PfagaRfa 

aIT a k TU Jt,h,, DcHb ana Stmoi “Wfafckfc'M. Amalias 

Avenue, Athens 105 .17. IS recce, let; *X- \ 022.75.70. fss: +.VM .I22.u.ni. 



'I 

J 

4 * » 















23 




% 


a • <■ ,,J .* 








The idea that there’s no luxury car 
for anyone who loves driving will have 
to be parked outside the Lexus GS300 l 

For a start, the GS300 was designed 
by Giorgetto Guigiaro, the man behind 
some of the most exciting cars the 
world has ever driven. 

But that’s not all. The Lexus GS300 
manages to combine what would 
normally be regarded as oil and water. 
Real luxury with real driving pleasure. 
It’s a mixture which is summed up in 
Japanese rather neatly with the words, 
“hashiru tanoshisa” or “joy of driving.” 

To this end, under the bonnet there’s 
a purpose built 3 litre engine. 6 cylinder, 
24 valve. Twin cam. Fuel injected. 

As a consequence, under your 
right foot there’s over 200 bhp, with 
a potential 144 mph top speed. 

Advanced computer-controlled anti- 
lock braking can bring the GS300 to 
a halt reassuringly quickly too. From 
50 mph to 0 mph in just 23.8 metres. 


There are both driver and front 
passenger airbags fitted as well. 

The GS300 has a 4 speed automatic 
Electronically Controlled Transmission 
system which uses two computers to 
monitor events, memorise your driving 
style and anticipate your reactions. 

Depending on how you want to 
drive, you can also switch between 
‘power’ and ‘normal’ gear changes. 

Stabiliser bars check body roll. 
Double wishbone suspension keeps 
the wheels perpendicular to the road. 
Speed sensitive power steering helps 
keep cornering as accurate as possible. 

And yet, while you enjoy this real 
driving pleasure, you could be sitting in 
a limousine. You’re certainly sitting on 
soft, rich leather. And in seats which 
were designed in a rather original way. 

A variety of elegant leather chairs 
were placed around a conference room 
table. After months of meetings, every- 
one was asked which chairs they had 


found most physically and aesthetically 
pleasing. Their views then helped shape 
the GS300’s seats. (6 electronic motors 
can further change the shape of the seat 
to suit your shape even more precisely.) 

California walnut veneer graces the 
doors and fascia. And, to enhance the 
feeling that you’re now breathing rather 
rarefied air, an advanced climate control 
system responds to changes in the weather, 
automatically altering the heating, the 
ventilation and the air-conditioning. 

On board too, there’s a 9 speaker 
stereo radio cassette, multi-pilay CD 
player, capable of producing a more 
than adequate 225 watts. (As if the GS300 
doesn’t sound impressive enough already.) 

And there’s another luxury. A 3 year, 

60,000 mile manufacturer’s warranty. 

But back to the driving. The most 
persuasive argument remains, of course. 

Call Lexus on 0800 343434 to arrange a 
test drive. Any lingering preconceptions 
you have will disappear. Rather rapidly. 

©UEXUS 

THE LUXURY DIVISION OF TOYOTA 


' MODEL UUSIHATED LEXUS GS300 £32.995 INC. VAT BUT EXCLUSIVE OF DELIVERY CHARGE OF «30 (WC. VAT}, NUMBER PLATES. ROAD FUND LICENCE. -THE LEXUS INFORMATION SERVICE S OPERATED ON BEHALF OF TW LEXUS DIVISION OF TOYOTA (G81 LIMITED. 




24 


FINANCIAL TIMES FRIDAY OCTOBER 28 I" 4 


INTERNATIONAL COMPANIES AND FINANCE 


NEWS DIGEST 


Dyno Industrier 
doubles pre-tax 
profit to NKr476m 


Dyno Industrier, the Norwegian chemicals, 
plastics and explosives group, more than dou- 
bled nine-month pre-tax profits to NKr476m 
($73.2m) from NKr234m, w ri tes Karen Fossil in 
Oslo. 

The advance was attributed to improved 
profitability of methanol operations in the 
Netherlands, increased supplies to the automo- 
tive industry and expanded deliveries of explo- 
sives and resins. 

Group revenue rose by 20 per cent to 
NKr73bn while operating profit doubled to 
NKr597m. 

Mr AriJd Ingjerd, Dyne’s president, warned, 
however, that margins were coming under 
heavy pressure from higher prices for raw 
materials, such as me thano l arid amm o nia. 

Apart from producing methanol outside Nor- 
way, Dyno consumes 300,000 tonnes of the 
rfiemirai a year. It also expressed concern over 
rising prices for plastics raw materials. This 
effects its plastics division which, among other 
things, supplies fuel tank systems to the auto- 
motive industry. 

Norwegian insurer 
plunges into the red 

Vital, the Norwegian life insurance and pen- 
sion group, plunged to a pre-tax loss of 
NKritfm In the nine months to September from 
a profit of NKr2Jlbn last time, writes Karen 
Fossil. 

The reversal was caused by a sharp reduc- 
tion in gross financial income which sunk to 
NKrl.l7bn from NKr3.61bn. 

The weak results were due to the increase 
in interest rates which caused a sharp redac- 
tion in the value of the company’s bonds,” 
Vital explained. 

Bonds and shares account for more than half 
of Vital's total assets which rose to NKr42$ffbn 
from NKr3&12bn. It said the surplus value had 
been reduced by NKr882m during the nine- 
month period, compared with an increase of 
NKr825m last year. 

The value of Vital's securities portfolio was 
cut by NKri.TSbn, of which NKrl.68bn was 
ascribed to bonds whose effective yield rate on 
an annual basis was negative 3.8 per cent 
Premium income rose by 22£ per cent to 
NKriL84hn. 

Vital said because of an improvement in 
financial markets since the start of October it 
was optimistic about achieving a surplus for 
the year as a whole. 

• Saga Petroleum, Norway’s largest indepen- 
dent oO company, is to seek a listing on the 
New York stock exchange in spring of next 
year. 

Air Products in 
Spanish takeover 

Air Products, the US industrial gases group, is 
taking over Carburos Metalicos, the leading 
producer in Spain, under a Pta55bn ($443 .Sm) 
bid agreed with Banesto, the Spanish bank 
which directly and indirectly owns 39 per cent 
of the target company, writes Tom Burns in 
Madrid. 

Air Products, which has a 25 per cent stake 
in Carburos, will obtain outright ownership of 
the company over three stages in bids 
launched next month, next year and in 1996. 
Banesto, which wQl earn Pta28bn from the 


disposal, has undertaken to sell its equity in 
the second and third tranches. 

Banesto. which belongs to the Santander 
banking group, recently raised some Fta45bn 
through selling its assets in the battery pro- 
ducer Tudor, the wine company Badegas Age 
and the mining group Asturiana de Zinc. 

Tokyo Electric Power 
in YlOObo issue 

Tokyo Electric Power. Japan’s leading electric 
utility company, will issue YlOObn ($1.03bn) in 
20-year straight bonds for public subscription 

next month, writes Emiko Terazono in Tokyo. 

The Japanese government bond market has 
been affected by expectations of higher 
short-term interest rates and the issue could 
have a farther negative impact on the market 

Tepco, which has been forced to scale down 
the amount of the issue from Y150bn after 
su rveys of prospective investor demand, will 
launch the issue with a coupon of 5.05 per cent 
on November 28. Nikko Securities win serve as 
lead manager. Standard & Poor's, the US 
credit rating agency, assigned the bond a dou- 
ble-A plus rating, while Moody's Investors Ser- 
vice rated it Aaa. 

Newcrest Mining 
advances sharply 


Ne w cre st Mining 

Share price (AS} 

a-r 



1 963 ' M 

Soukok FT Graphite 


Newcrest Mining, the 
mining group which 
was formed when Bro- 
ken Hill Proprietary 
and Newmont Mining 
merged their Austra- 
lian goldmining subsid- 
iaries, yesterday 
announced profits after 
tax of A$35.5m 
(US$26.4m) for the first 
nine months of 1994. 
This represents a 223 
per cent increase os 
the same period in 
1993. Profit after tax 
for the third quarter alone, to end-September, 
was A$lL7m, up 16.4 per cent on the previous 
year, writes Nikki Tait in Sydney. 

The group's equity gold production In the 
three months was 166.641oz, some 7,0Q0oz less 
than in the second quarter. This reduction was 
due to lower grade production at its Teller 
mine in Western Australia. 

The cost of production was $393 per oz, up 
from $374 - an increase also blamed on the 
temporary shortfall in the oxide grade. 

The company said it planned to spend 
A$17.6m to develop the first stage of the Mari- 
ner project at Telfer. and that it had upgraded 
the resource at its Cadla Hill gold/copper proj- 
ect in New South Wales, to 4.6m oz of gold. 

Dofasco doubles its 
quarterly income 

Dofasco, one of Canada’s two biggest steel 
makers, nearly doubled pre-tax profits in the 
third quarter with higher prices and surging 
demand for flat rolled products for the car. 
appliance and pipeline industries, writes Rob- 
ert Gib bens In Montreal. 

Sales rose 12 per cent to C$565m and pre-tax 
profit was C$57.2m (US$42 .5m), against 
C$29.5 m. But after special tax factors, final net 
profit was C$53 .3m or 56 cents against $62m or 
70 cents a share a year earlier. 

At the nine-month stage, net profits rose to 
C$157.5m or C$1.66, up from 56 per cent or 46 
cents a share on sales of C$L65bn. against 
C$1.57hn. 


Usinor forges stronger case for sell-off 

State-owned French steel group is showing benefit of restructuring, says John Ridding 


M r Frauds Mer, chair- 
man of Usinor Sad- 
lor, has twice 
wrested Europe's biggest steel 
maker back from daunting 
losses - after 1986, when be 
took the helm of France’s 
sprawling steel concern, and 
over the past six months. This 
time he Is determined that 
recovery will he permanent 
keeps. 

Yesterday’s first-half results 
showed a remarkable rebound 
to a net profit of FFr471m 
(US$92m) after losses of a stag- 
gering FFrS.Tbn for all of 1993. 

The state-owned group's 
chairman is optimistic, If not 
yet satisfied. “We must he in a 
position to stay in the black 
through the next downturn in 
the industry cycle." 

There is much at stake. Evi- 
dence of a sustainable recovery 
will prepare the way for priva- 
tisation of the steel concern, 
which is one of 21 public sector 
companies already sold or 
scheduled for sale by the cen- 
tre-right government of prime 
irtmister Mr Edouard Bahadur. 

Privatisation would give the 
company access to the finan- 
cial resources needed for fur- 
ther expansion. “The state can 
no more be a good share- 
holder,” says Mr Mer. “It does 
not have the money for Indus- 
try” 

Tire first-half transformation 
is an important step towards 
Mr Meris objective. It partly 
reflects the impact of excep- 
tional gains, in particular the 
FFr90Gm received as a result of 
the flotation of a 40 per cent 
stake in Ugine, the stainless 
steel division. 

However, the recovery is also 
the result of the revival in the 
international steel industry fol- 
lowing two years of deep reces- 
sion, anfl of (he benefits of the 
company's restructuring and 
cost-cutting measures. 

Since 1986, when Mr Mer 
faced the fa»sv of merg^c the 
loss-making IMnnr aruf ftarilnr 
steel makers, the headcount 
has fallen steadily. The work- 
force has dropped from 95,750 
in 1989 to about 68,000 at the 
end of last year. Productivity 
has risen from 5.1 man hours a 
ton is 1986 to less than three 
hours a ton today. 


Usinor SacDor 



WwVtorce at the end of the year 

f^SFr-** □Oamwiy O H— t of worfd 



Workforce productivity in trance 
Worked houfVton raw steer 



fraocteMK- 


0 - 


teas 00 

SouctK VMnor fiader 


!J. HI U LU I I J.l I I 1 I -I Lit 0 
83 1873 30 85 90 03 

•Ex rxMna acUwBfce, costad ohMts and eubeontroctf ng 


For Mr Mer, the productivity 
and cost-cutting measures are 
set to continue. So is the recov- 
ery In profits. “We have experi- 
enced further progress in the 
Second half , and I think tha t 
1995 will be a good year.” 

Sustained recovery beyond 
the current upswing in the 
steel market, however, 
requires further reshaping. 
“Some parts of the business 
are really problematic,” says 
Mr Martin Doble, director of 
Bed flows & Co, a consultancy 
for the steel industry. He, and 
many others, believe the prob- 
lems centre on Usinor’s long 
products business, comprising 
wires and steel for engineered 
products. It is a fiercely com- 
petitive activity. 


A bigger burden lies in 
the group’s indebted- 
ness. A series of acqui- 
sitions In the late 1980s, includ- 
ing that of Jones & Laugh 1 in, 
the second-biggest stainless 
steel maker in foe US. saddled 
Usinor Sacilor with debts of 
FFr24bn at the aid of 1993. The 
threat is compounded by the 
recent rise in interest rates. 

These weak points are not 
lost on Mr Mer. While he 
defends his acquisition spree in 
the 1980s, which he says gave 
the group the necessary pres- 
ence in production and market- 
ing, he has been curbing debt 
The flotation of Ugine, and 
asset sales, have reduced debts 
to about FFtfObn. 

For the first time in. four 
years, debt stands below the 


value of foe company's equity. 

The Usinor chairman is alsn 
making progress at the compa- 
ny’s problem businesses. The 
long products division has 
undergone a substantial 
restructuring and is now enter- 

Productivity 
and cost-cutting 
measures are 
set to continue. 
So is the 
recovery in 
profits, says 
Francis Mer 


ing the final phase. A more 
plant has been con- 
structed, including a mini mill 
at Can drange in eastern 
France which started produc- 
tion in July. Last week, Usinor 
Sacilor announced it was nego- 
tiating the sale of SAM, its 
steel reinforcements business, 
to ASW of foe UK. 

The sale of SAM would mark 
an important step in reorganis- 
ing the group's activities, a 
process Mr Mer believes is 
nearing completion. “By mid- 
1995 we should be in the shape 
that we are seeking." he says. 

The shape of the interna- 
tional steel industry as a 
whole, however, is less certain. 
Just as Usinor was blighted by 
overcapacity and recession in 


1992 and 1993, so are its for- 
tunes still hostage to the 
broader environment 

Mr Mer believes progress has 
been achieved in the European 
Commission's restructuring 
plan, even though he has been 
a fierce critic of subsidies to 
Spanish, German and Italian 
producers. To a non-European 
it must seem like a crazy way 
of managing an industry, 
allowing subsidies to obstruct 
necessary capacity reduction." 

He is irked by subsidies 
because his company has 
reduced its own net capacity of 
laminates by 1.2m tons since 
1987 without the help of state 
subsidies. “I could have asked 
for subsidies of FFrSbn last 
year," he says. But he argues, 
that would have undermined 
his philosophy at Usinor and 
sent foe wrong signal to man- 
agers and workers. “Besides," 
he says with a grin, “the 
French government would 
have said ‘no’." 

In spite of his chagrin at 
state aid to rivals, Mr Mer 
believes Europe's restructuring 
efforts have yielded results. 
“We will probably see a reduc- 
tion of about 15m tons of 
capacity, rather than the 19m 
targeted. But that is still signif- 
icant” 

It is also, he believes, enough 
for now. “Capacity utilisation 
is very high. All of Europe’s 
big steel producers will report 
profits next year. So I don’t 
think it necessary to have fur- 
ther capacity cuts at the 
moment.” 

Whether more restructuring 


will he needed, he argues, will 
depend partly on foe policy of 
the European Union towards 
imports from eastern Europe, 
Russia and Ukraine. "At the 
moment, western Europe has 
net steel exports of more than 
10m tons a year. If this were to 
change, because of increased 
imports or reduced shipments, 
then capacity would be too 
high." 

It is Ukraine and Russia 
which are of particular con- 
cern. The scale of their capac- 
ity dwarfs the potential threat 
from eastern European coun- 
tries. In the latter case, he 
believes western Europe can 
cope with a gradual opening of 
the market, presently 
restricted by quotas, over foe 
nest few years. 

By then, Usinor Sacilor may 
be on the way to the private 
sector. Mr Mer is reluctant to 
suggest the timing for such an 
operation. But once the 
redressment is established he 
does not see obstacles to a sale. 

F or the Usinor chairman, 
such a move would have 
little impact on the 
management of foe group. “We 
are run like a private sector 
company. There is no interfer- 
ence from the state," he says. 

Nor should foe trade unions, 
which have sought to block 
other privatisations, pose a 
threat. “I think it would not be 
too hard to convince them, 
despite their basic instinct that 
they would like to remain 
under the umbrella of the 
state.” 

The complexities and size of 
such an operation suggest that 
privatisation remains some 
way down foe road. Of the 
routes already being mooted 
one involves selling stakes in 
various parts of the company, 
as was done with Ugine, or the 
possible flotation of separate 
activities. 

It is not an option which 
finds favour with Mr Mer. The 
flotation of Ugine, he says, was 
a one-off. Privatisation, when it 
comes, should be for the whole 
group. Having spent the past 
eight years forging a coherent 
whole from the rag-bag of 
assets he inherited, such a 
reaction is understandable. 


Scotgen in rival bid for Porton International 


By Tim Burt 

Scotgen Pharmaceuticals, foe 
Anglo-US drug company, yes- 
terday emerged as a rival bid- 
der for Porton International, 
the controversial UK biotech- 
nology group which earlier this 
week announced a £65.5m 
($103 .5m) agreed takeover. 

The California-based com- 
pany said it would tr ump the 


r pmmTnPTiripri offer from Beau- 
four Ipsen, foe French family- 
owned pharmaceutical busi- 
ness, by almost 50 per cent 
with a bid valuing the UK 
group at £96.3m. 

In the latest twist to the Por- 
ton story, Scotgen said its over- 
tures had bedh ignored by 
Kleinwort Benson. Porton’s 
financial advisers. 

It has offered £42m in cash 


and £54J3m in shares. 

On advice from the machant 
bank, shareholders with 66.2 
per cent of Porton have given 
irrevocable undertakings to 
accept the French bid, worth 
£13.40 in cash or notes. 

Of those investors, the larg- 
est stake is held by Mr Wert- 
sley Haydon-Baillie, Porton’s 
millionaire founder and former 
chairman, who stands to 


receive more than £20m for his 
33 per cent holding. 

Scotgen has written to such 
shareholders urging a rethink. 
“We see an opportunity to cre- 
ate a combined company with 
potential revenues of £20Gm 
and profit of £30m by the end 
of the decade,” said Mr Robert 
Fildes. Scotgen chairman. 

Kleinwort Benson was 
unavailable for comment. 



'•'STE.JJr iff •» 


Interim results and dividend 

for the six months ended 30 September 


announcement 

1994 (unaudited) 


Six months 

Six months 

Year 


ended 

ended 

ended 

(R million) 

30.9.94 

30.9.93 

31.3.94 

Investment income 

202 

151 

312 

Interest earned 

23 

27 

51 

Surplus on realisation 




of investments 

109 

63 

137 


334 

241 

500 

Administration expenses 

5 

4 

10 

Corf of prospecting 

12 

11 

22 

Grants - educational 




and welfare 

5 

4 

6 


22 

19 

38 

Net Income before taxation 

312 

222 

462 

Taxation 

2 

— 

- 

Attributable earnings 

310 

222 

462 

Retained earnings of 




associated companies 

(2) 

2 

4 

Equity accounted earnings 

30S 

224 

466 

framings per share - cents 

1,278 

929 

1.930 

Dividends per share - cents 

800 

625 

1.350 


DIVIDEND 

Dividend No. 93 of 800 cents per share has been declared payable on Thursday, 15 
December 1994 to shareholders registered at the close of business of Friday, 11 
November 1994- The register of members will be dosed from Saturday. 12 November 
1994 to Saturday, 19 November 1994. the full conditions relating to the dividend may 
be "inspected at the Head Office and London Office of the company and at the offices of 
its transfer secretaries. 

Copies of the full interim results are available from the Johannesburg 
and London Offices. 


Head Office 
44 Main Street 
Johannesburg 2001 
27 October 1993 


London Office 
19 Charterhouse Street 
London EC1H 6 QP 


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Delta and UAL post solid gains 
in third-quarter operating income 


By FTank McGurty in New York 

Delta Air Lines and UAL, 
parent of United Airlines, yes- 
terday offered mare evidence 
of a gradual return to financial 
stability for the US airline 
industry, as both posted solid 
operational gains in the third 
quarter. 

The encouraging results 
were released a week after 
AMR, parent of American Air- 
lines, the largest US carrier, 
announced details of its 
best three-month operating 
period in the past five 
years. 

Wall Street responded 
warmly to yesterday’s news 
from UAL and Delta, foe sec- 
ond and third biggest groups in 
foe industry, respectively. 

In early trading on the 
NYSE, UAL's share price 


added SY, to $86 and Delta’s 
stock jumped $1% to $48%. 

Delta’s performance was par- 
ticularly impressive. Operating 
income for the quarter climbed 
27 per cent from a year earlier 
to $l54m, on revenues of 
$32bn, up slightly from $3JLbn 
in foe 1993 period. 

The gain was held to a mod- 
est level as a result of a 3.6 per 
cent reduction in capacity and 
lower fores, as reflected in a 4.4 
per cent downturn in revenue 
per passenger mile. 

Nevertheless, underlying net 
income was up a robust 19 per 
cent at 572m. Including a one- 
time after-tax gain of $U4m, 
net income was $186m, against 
$8im a year ago. 

UAL’s results were more 
complicated- The third quarter 
was foe first to reflect an 
agreement under which 


employees would acquire an 
initial ownership stake of 55 
per cent in return for wage and 
other concessions. 

As a result of the transac- 
tion, outstanding shares 
decreased to 14.6m, from 28.7m 
a year ago on a fully diluted 
basis. 

The company took a $96m 
one-time charge to pay costs 
associated with foe buy-out. 
Excluding foe provision, prof- 
its were nearly 20 per cent bet- 
ter at $l78m, or $10.05 a share, 
compared with $149m in the 
1993 period. 

The improved profitability 
was struck on a 3.3 per cent 
gain in revenues to $3.4bm 

A 12 per cent increase in 
traffic was partially offset 
by a 2.4 per cent decline in 
revenue per passenger 
mile. 


u„, 15% 

off electricity 

Cl CCO W.T ttS'.'n ' - >: ty\ ■■z.-.c-.X;, 

021 423 3018 

Powerline 


Temporary halt 
to IBM’s OS/2 
Warp shipments 

By Louise Kahoe 
In San Francisco 

International Business 
Machines has been forced to 
temporarily halt shipments of 
its new personal computer 
operating system, OS/2 Warp, 
because of a software bug that 
interferes with loading foe 
software on to some PCs. 

IBM said the problem is 
minor and that retailers will 
receive shipments of OS/2 
Warp on schedule. People who 
have already purchased the 
program will be sent a new 
version. 

The incident is an embar- 
rassment for IBM, which is 
mounting a $50m advertising 
campaign for Warp in an 
attempt to win ground in the 
PC operating system software 
market which is dominated by 
Microsoft’s Windows. 

Microsoft has shipped more 
than 50m copies of Windows, 
compared with the almost 6m 
copies of OS/2 that IBM has 
shipped. 


Canadian Airlines posts 
record earnings for term 


By Bernard Simon In Toronto 

Canadian Airlines Inter- 
national, which was on the 
brink of collapse before the 
conclusion of a financial 
restructuring earlier this year, 
has bounced back with record 
quarterly earnings. 

The Calgary-based airline 
will take another important 
step forward next week when 
it implements a wide-ranging 
services contract with AMR 
Corpr the holding company of 
American Airlines. AMR paid 
C$246m fUS$l82m) for a 25 per 
cent voting interest in the 
Canadian carrier as part of foe 
restructuring. 

The contract which is val- 
ued at about US$llQm a year, 
includes a switch to AMR’s 
data-processing and yield- 
m anagement facilities and to 
its Sabre computer-reservation 
system. 

PWA Corp, Canadian’s hold- 
ing company, reported third- 
quarter earnings of C$85 Am, or 
11 cents a share, up from 


C*38.5m, or 78 cents. The latest 
per-share figure reflects a sig- 
nificant dilution as a result of 
a big debt-to-equity conversion 
which formed part of the 
restructuring, and which cut 
interest expense. 

Nine-month net profit was 
C$l9.5m, against a loss of 
C$199m a year earlier, includ- 
ing special charges. Operating 
income climbed by 8.3 per cent 
to C$ll0.6m, due to increased 
traffic and an improved yield 
per mile. The load factor was 
unchanged at 76.8 per cent 

Mr Drew Fitch, senior 
vice-president for finance, said 
the airline alms to achieve 
warnings of C$75m next year 

* d r£%L a ? w from °*»ra«oite 
of C$500m by 1997. 

Aflffis 20-year contract with 
Canadian reflects the US carri- 
er s efforts to expand the ser- 

IJE "^ch lt to 

other airlines. The two airlines 

. C0 ^Perating in 
marketing, including reciproc- 
frequent-flier 

programmes. 


International 
growth lifts 
US insurer 

By Richand Watero 
In New York 

Earnings at American 
International Group, the US 
insurer, advanced by more 
than a fifth in foe third quar- 
ter. reflecting its International 
expansion in both foe life and 
general insurance areas. 

Excluding accounting adjust- 
ments and capital gains, group 
net income jumped 22 per cent 
to $533An from a year ago, on 
revenues up ll per cent to 
S5.7bn. 

Mr Maurice Greenberg, the 
chairman, pointed to strong 
growth in both life and proper- 
ty/casualty insurance during 
the period. 

In general insurance, operat- 
ing income (before capital 
gains) was up 34 per cent, to 
$416m, in part reflecting $47m 
of catastrophe losses last year. 

Life insurance operating 
ea r ning s rose 19 per cent, to 
$180m before capital gains, 
with Asia performing particu- 
larly strongly. 

In the US, AIG saw 
“double-digit" premium growth 
in some specialty insurance 
areas, while rates on property 
insurance remained firm. 

Overall, reported net income 
for the period was $542 .5m, or 
$1.71 a share, up from $451. lm, 
or $1.42 a share, the year 
before. 


PennzoD to pa 
$454m extra ts 
on settlement 

By Richard Waters 

PenuzoiJ said it had nat 
agreement with foe US aul 
ities to pay $454m in additi 
taxes on a $3bn settlemei 
received from rival US en 
group Texaco six years ag> 

The amount is less than 
the 5957m tax assessnicn 
foe Internal Revenue Sei 
earlier this year. 

The taxes stem from the 
tlument of a dispute bet\ 
Pennzoil and Texaco over 
latter s takeover of Getty C 
^^86. 

The acquisition thwart, 
deal that had already 1 
agreed between Femnuil 

A Texas jury imt; 
awarded Pennzoil $io»b 
damages, forcing Texan 
Pratmion under Clc 
U ThA th h bankruptcy o 
laxes relafi 

of toe settlement, w 

was used by Pennzoil to 
snares in another US on 
group. Chevron. 





FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


25 


Higher gold prices help 
lift Placer Dome 38% . 


INTERNATIONAL COMPANIES AND FINANCE 


By Bernard Simon In Toronto 

Higher gold prices and reduced 
exploration costs helped boost 
third-quarter earnings at 
Placer Dome, the international 
mining group, by 38 per cent 

But the Vancouver-based 
company's share of output 
from its 13 mines was 4 per 
Cent lower in the first nine 
months than a year earlier, 
and it warned that total 1994 
production will be about 
100,000oz short of its i gm oz 
target 

Third-quarter earnings rose 
to US$18m. or 8 cents a share, 
from S13m. or 8 rants a share. 
Sales revenues dipped to $2i0m 
from $2l9m. but investment 
Income climbed to $l7m from 
SlOm. 


Cash production costs rose to 
$196 per ounce from $184. 

Placer earlier announced a I 
cent increase in its fourth- 
quarter dividend to 7 JS cents a 
share. 

The slip In production was 
largely due to lower average 
grades and to operating disrup- 
tions at the Porgera mint* in 
Papua New Guinea and the 
Golden Sunlight miri p in the 
US. Ground movement has 
halted operations at Golden 
S unlig ht sinra mid-June, 
production is not expected to 
restart until early next year. 

However, Placer said it still 
expects to reach its long-term 
annual production target of 
2.5m oz by the end of the 
decade. Much of the increase 
will probably come from its 70 


per cent-owned Las Cristinas 
property in Venezuela, where a 
feasibility study is due to be 
completed next spring. 

Las Cristinas' annual pro- 
duction is projected at 380,000 
oz at an initial cash cost of 
$210 per oz. The mine's capital 
cost is expected to reach 
$400m. 

Placer said it expects to add 
reserves at five wH sting mtnos 
In addition, it plans drilling 
programmes next year on 20 
properties in Argentina, Aus- 
tralia, Canada. Costa Rica, 
Indonesia, Mexico, Peru, the 
us and Venezuela 

Other exploration opportuni- 
ties are being sought in India, 
the Commonwealth of Indepen- 
dent States and south-east 
Asia. 


Burlington raises Santa Fe bid 


By Patrick Harverson 
in New York 

The battle to create the largest 
railway network in the US 
intensified yesterday when 
Burlington Northern increased 
its bid for Santa F6 Pacific to 
$3J2bn from $2£bn as its rival 
suitor. Union Pacific, refuted 
claims that its own offer for 
Santa Fe would never receive 
regulatory approval. 

Santa Fe has rejected Union 
Pacific's hid - valued at jost 
under $3J2bn - from the start, 
advising its shareholders to 
accept the friendly offer from 
Burlington. 

Shareholders are due to vote 
on the proposed merger on 
November 18, and yesterday's 
substantially higher offer from 


Burlington was clearly 
intended to cement approval of 
the deal at the vote next 
month. 

A spokesman for Burlington 
said the company was able to 
increase the value of its bid by 
25 per cent because it bad dis- 
covered since submitting its 
first offer in June that "the 
synergies [available Grom the 
mergerl are significantly 
greater than we at first 
thought they would be*. 

He said the two companies 
now believe that within three 
years of the merger being 
approved they should be able 
to generate about $Z.5bn in 
annual operating from 

their b usinesses 

The original estimate put 
combined yearly income 


at less t ha n Slbn. 

Union Pacific, however, is 
determined not to give up 
without a fight, and yesterday 
anno unced that five railway 
industry experts the company 
had hired to study its offer for 
Santa Fe concluded that -the 
merger between the two rail- 
ways would have good pros- 
pects of being approved by the 
Interstate Commerce Commis- 
sion, the government regula- 
tory of railways. 

Ever since Union Pacific 
launched Its higher bid for 
Santa Fe, doubts have been 
expressed over whether federal 
regulators would allow a 
merger between two railways 
whose prime routes are in 
direct competition with each 
other. 


Sales growth 
helps Dow 
rise 102% 

By Tony Jackson in New York 

Dow Chemical of the US 
reported a 102 per cent jump in 
net ea rning s to $288m for the 
third quarter. 

Sales in the quarter rose 15 
per cent, made up of 11 per 
cent extra volume and a 4 per 
cent rise in prices. 

Dow said it had increased 
capacity in chemicals and plas- 
tics by more than 2bnlbs, at a 
time of shortage for many of 
its products. 

The group’s performance 
was better than that reported 
on Wednesday by DuPont, its 
larger US rival 

Dow said its plastics division 
had increased operating profits 
by 177 per cent to $305m on 
sales up 23 per cent at 
$L9bn. 

The strongest volume 
growth came in the Pacific 
area, while new capacity had 
been added in polyethylene in 
Canada and polyurethane In 
China. 

The chemicals and perfor- 
mance products division 
increased profits 139 per cent 
to $182m, on sales up 13 per 
cent to SlJZbn. 

The strongest performer was 
vinyl chloride monomer (used 
to make PVC), helped by the 
opening of a new plant in 
Texas. 

The hydrocarbons and 
energy division raised 
profits by 77 per cent to $23m 
on sales up 15 per cent to 
$520m. 

A new ethylene plant with 
lJ2bn lbs of capacity was 
opened in Canada during the 
quarter. 

Profits at the consumer spe- 
cialities division fell 12 per 
cent to $L46m, in spite of an 8 
per emit rise in sales to $L4bn. 
Dow said this was chiefly due 
to pharmaceuticals and con- 
sumer products. 

As previously reported. 
Marion Merrill Dow, its 72 per 
cent-owned drugs subsidiary, 
had a 12 per cent fall in net 
profits for the quarter. 

Dow said in August it was 
looking at strategic options for 
the company. 


American Barrick 
details mining plans 


By Bernard Simon in Toronto 

American Barrick. the 
Toronto-based gold producer, 
has outlined plans to sell four 
mines in the US and Canaria , 
and to «rpanii the Latin Ameri- 
can operations which it 
acquired as part of its recent 
takeover of Lac Minerals. 

Mr Alan Hill, executive 
vice-president, said yesterday 
that Barrick plans to develop 
four new gold operations over 
the next four years. First will 
be a new min at the existing 
Tam h o irrinp in Chile, which is 
due to be commissioned early 
next year. 

This will be followed by the 
Meikle mine, which adjoins 
Barrick’s flagship Goldstrike 
property in Nevada; the Cerro 
Corona mine in Peru; and the 
Nevada mine, also in Chile. 
Tambo is part of the El Indio 
complex in central Chile, 
which was Lac’s crown jewel 
The Nevada property, also held 
by Lac, is 50km north of El 


Indio. Barrick also recently 
acquired stakes in two explora- 
tion properties on the Argen- 
tine side of the El Indio belt 
Drilling will start later this 
year on the 60 per cent owned 
Carmen property. 

The properties for sale are 
the Macassa and Golden Pat- 
ricia mine s fo Ontario, Bullfrog 
in Nevada and the Red Moun- 
tain deposit In British Colum- 
bia. Barrick will retain the 
Bousquet complex and its 50 
per cent stake in the adjoining 
Doyon mine in northern Que- 
bec. The two mines have a 
combined annual output of 
485,000 ounces of gold. 

Annual output from existing 
Barrick mines and the retained 
Lac assets is currently about 
25m ounces, making Barrick 
the biggest gold producer out- 
side South Africa. 

Mr Hill indicated that the 
company will outline more 
detailed plans for the develop- 
ment of its Latin American 
assets next February. 


Tractor unit 
boosts Agco 

By Andrew Baxter 

Agco, the fast-growing 
Atlanta-based, farm equipment 
company, yesterday announced 
record third-quarter net earn- 
ings of $3L9m, or $L72 a share, 
nearly doable the $16.2m, or 
$115 a share, reported a year 
earlier. 

The rise mainly reflects 
Agco’s acquisition of UK-based 
Massey Ferguson, (me. of the 
world's biggest producers of 
tractors. 

The $329m deal was com- 
pleted on June 29. 

Sales in the third quarter 
jumped by 183 per cent 
to $48L3m, reflecting the Mas- 
sey deal and the takeover last 
December of White-New Idea, a 
US farm equi p ment business. 

Mr Robert Ratliff, Agco’s 
Chairman and chief executive, 
said industry conditions in 
North America remained 
positive. 


acquisition 
to $31. 9m 

“Com production is forecast 
to be 46 per cent above last 
year and a bumper soybean 
harvest is also expected,” he 
said. 

In western Europe, Massey 
had benefited from improved 
market conditions, especially 
in the UK, France and Scandi- 
navian countries. 

Growth in markets outside 
North America and western 
Europe was also positive. 

Pro-forma for the acquisi- 
tions, net sales, earnings and 
earnings per share for the first 
nine months would have been 
$1.35bn, $88. 6m and $451, 
respectively. 

This compares with $Llbn, 
$49.4m and $2.70, respectively a 
year earlier. 

The company said it expec- 
ted to record a $195m charge 
in the fourth quarter for non- 
recurring acquisition-related 
expenses. This was within the 
range previously annonneed. 


Net income 
climbs 25% 
to $185m 
at Xerox 


By Patrick Harverson 
in New York 

Net income at Xerox, the US 
document processing com- 
pany, climbed 25 per cent in 
the third quarter to $l85m, or 
$1.60 a share. 

If a one-off tax benefit in the 
same period last year of $23m 
is excluded, earnings from the 
company's core document pro- 
cessing business jumped 48 
per cent 

With revenues in the latest 
quarter rising only slightly to 
$3.6bn, Xerox said the strong 
income growth was driven pri- 
marily by productivity 
improvements. 

During the quarter the com- 
pany’s workforce was reduc ed 
by 1,100 as Xerox continued 
with its worldwide re- 
structuring and productivity 
programme, which is aimed at 
reducing payrolls by more 
than 10,000 by early 1996. 

Since the start of the year, 
7,700 jobs have been elimi- 
nated at Xerox to take the size 
of the workforce worldwide to 
less than 90,000. 

The advances in productiv- 
ity and tight controls on costs 
boosted the ratio of selling, 
administrative and general 
expenses to revenues by 2.3 
percentage points to 295 per 
cent during the quarter. 

On the sales front, revenues 
from the sale of digital prod- 
ucts jumped 17 per emit, while 
revenues from black and white 
copiers, which represent 
almost two- thirds of total reve- 
nues, were flat during the 
quarto*. 

Xerox was aided by an 
improved performance from 
its Brazilian operation, 
where demand for the 
company’s products rose 
and foreign currency losses 
from balance sheet translation 
fdL 


Allied Signal 
earnings 
ahead 15% 

By Tony Jackson 

Allied Signal the diversified 
US manufacturer, reported 
record third-quarter earnings 
of $189m, an increase of 15 per 
cent 

Sales rose by II per cent, the 
first double-figure increase in 
six and a half years. 

The company, which has 
gone through a lengthy period 
of retrenchment, said this 
confirmed its return to 
growth. 

Net earnings In the aero- 
space division, which makes 
aircraft engines, components 
and flight systems, were up 14 
per cent to $64m on sales up 
less than 1 per cent 

The company said this was 
the first quarterly increase in 
aerospace sales in over three 
years. 

Net of acquisitions, sales 
were slightly down. 

Profits in the automotive 
division, which makes car and 
track components, were up 19 
per coot to $56m on a 13 per 
cent increase in sales. 

This reflected strong sales of 
cars and tracks in North 
America and continued eco- 
nomic recovery in Europe, the 
company said. 

The engineered materials 
division, which makes a range 
of products from carpet fibres 
to engineering plastics; pro- 
duced a 25 per cent rise in 
earnings to $84m on sales up 
24 per cent 

Operating margins rose from 
8.0 per cent to 9.1 per cent Mr 
Lawrence Bossidy, chairman, 
had set a target of 9 per cent 
for the year as a whole. 

The target for next year was 
now 10 pa* cent he said yes- 
terday. 

Productivity for the first 
nine months rose by 5.9 
per cent, just short of Mr Bos- 
sidy ’s target of 6 per cent 
annually. 


The COOPERATIVE BANK 


£75,000,000 

Subordinated Floating Rate Notes 2000 

Holders of Floating Rato Notes of tha above Issue 
are hereby notified that lor the interest period from 
26th October, 1994 to 26th January, 1995 the 
following information will apply. 

1. Rate of Interest 6.125% per annum 

2. Interest Amount payable on Interest 

Payment Date: £77.19 

Per £5,000 nominal or 
£771.92 

Per £50,000 nominal 


3. Interest Payment 
Date: 


26th January, 1995 


The Co-operative Bank pic 

(IncoqHUtMiln England under Pm C4mpoflMaArilM6lu 1880) 

Agora Bunk 

Bank of America International Limited 



USD 100,000,000 

KANSALUS- 
OSAKE -PANKK3 

Subordinated Floating 
Rate Notes due July 

1997 

Interest Rate 5.875% p a. 

Interest Period October 26. 1994 
January 26, 1995 

Interest Arnouu due on 
January 26, 1995 per 

USD 10,000 • USD 150.14 
USD 250,000 USD 3,753.47 


Banque G£n6rale 
du Luxembourg 


Mobil shapes up for next round 

Richard Waters meets Lucio Noto who says the cuts are not over 


L ucio Noto interrupts 
impatiently: "Chop. 
Chop. Chop.” In his 
bhmt Brooklyn way, the new 
chairman of Mobil leaves you 
in no doubt about how he 
plans to raise earnings at the 
US's second biggest energy 
group. 

It is a message Wall Street 
likes. On Tuesday, the day 
after Mobil had announced it 
was on track for another round 
of restructuring, its shares 
jumped $3 to $83%. 

The race to shrink the US’s 
biggest energy groups is on, 
and Mobil - a late starter - is 
trying to claw its way back 
from behind. Its return on capi- 
tal at around 9 per cent, lags 
that of its main competitors. 

“We have an asset base that 
we have to work on, we have 
to get more out of It," says Mr 
Noto. "We have to get our 
returns up by a point and a 
half, or two. IT we don't do this, 
we aren't going to be here.” 

His stork message, in an 
interview before this week's 
announcement, makes clear 
the cost-cutting at Mobil and 
other US energy groups is far 
from over. Mr Noto, who 
became Mobil chairman in 
March, has no comforting mes- 
sages to deliver to employees, 
only the promise of more 
upheaval 

Mobil has seeo its workforce 
riprirne by 6,000 people in the 
past two years, to 54,000. Since 
1991, the company c laim s to 
have taken $675m out of its 
controllable costs. Over the 
next three, says Mr Noto, they 
should fell by as much a gain 

His aim is to lift Mobil's 
after-tax profits by a half, to an 
atimiai $3bn, over ths hot* five 
years. Like other energy 
groups, Mobil is no longer 
looking to oil prices to bail 'it 
out 

.New projects are uow 
assessed against a range of 
assumptions for oil prices. “We 
haven't seen any projects that 
depend on crude at more than 



Lucio Noto: plans to lift profits by half in five years 


$15 [a barrell" says Mr Noto. 

The next slice of cost cuts 
may not be easy. Mobil has 
been focusing on shrinking the 
costs of each of its divisions 
(the most recent round, 
announced in July, will 
involve the loss of one in five 
of the jobs in its chemicals 
business). 

N ow, the company Is 
looking for ways of 
removing overlap 
across the group. For example, 
each part of the group has its 
own computing operations, 
creating duplication both 
between the divisions and with 
the group’s central computing 
functions. 

“There is a hell of a lot of 
duplication,” says Mr Noto. 
“Some of it Is natural but 
some of it is bullshit, some of it 
Is turl some of it is getting one 
up on the next guy. To take the 
next step down, you have to 
look at these shared cost pots.” 

While cost-cutting is likely to 
remain one of the main factors 
driving earning s in the short 

term, Mobil should also get a 


lift from the cyclical rebound 
in its petrochemicals business. 
After-tax profits, which slid to 
$44m last year from $558m in 
1988, bounced back to $l48m in 
the first nine months of tills 
year. 

Mr Noto, though, sounds a 
note of caution. “I think 
there's too much happiness in 
the chemical business today. 
It’s probably not going to last." 
The rebound in petrochemical 
profits is threatened by addi- 
tional production capacity due 
to start up in the coming 
months, he warns. Any 
long-term recovery in margins 
will not come until the end of 
the iiupprio 

In the longer term, Mobil’s 
spread of big international pro- 
jects. moderately successful 
exploration record (it has 
replaced 95 per cent of its pro- 
duction over the past five 
years) and extensive interests 
in natural gas are likely to 
place it among the more diver- 
sified and stable of the US 
energy groups. 

“It has a very well-balanced 
exploration programme," says 


Mr Paul Ting, an oil industry 
analyst at Oppenheimer in 
New York. Ten years ago, 52 
per cent of Mobil's oil ami gas 
production took place in the 
US. By 1993, that had fallen to 
35 per cent. 

This year, Mobil became the 
first US company to return to 
dr illing in Vietnam. It has been 
slower than other Western 
groups to enter Russia - 
though given the delays in get- 
ting projects there started that 
may not prove much of a hin- 
drance. 

Having a finger in a broad 
range of overseas ventures Is 
essential if Mobil is to main - 
tain its reserves. It will only be 
able to replace about half of its 
annual production of 600m bar- 
rels of oil from extending exist- 
ing fields, says Mr Noto. “We 
have to find 300m from new 
plays.” 

In the near term, the biggest 
addition to Mobil's upstream 
earnings is likely to come from 
two large liquefied natural gas 
projects in Qua tar. 

T he first, in which the 
company has a 10 per 
cent interest, should 
start production in early 1987. 
But the real pay-off will come 
from the second in which it 
has a far more significant 30 
per cent stake. 

In its downstream refining 
and marketing operations, 
Mobil is more exposed to Asia 
Pacific than most, and has suf- 
fered from the collapse of refin- 
ing margins in the area this 
year. 

Though a depressant on 
short-term profits, Mr Noto 
claims the collapse will help 
Mobil by discouraging rivals 
from building new refineries in 
the region. “The US is still our 
biggest market, it is still 
important to us: we are loyal 
Americans, we like to see 
America prosper,” he says. But 
adds: "The opportunities here 
are closing off and the opportu- 
nities abroad are opening up.” 





Kmcf* 


-UTyR=S i OPTIONS 3RCKSRS 


London SW1X0HL 
re *7i » ana 
TO: 471 335809 


$32 


ROUND 

TRIP 


Tokyo USA, Inc. 

Notice of a Meeting 
of tbe holders of the outstanding 
Japanese Yen 10,000,000,000 
6A5 percent Note (tee 1996 


Notice it hereby given that a Meeting of the holders of the above Notes (the 
"Noiehokten”} convened by Ibkyu USA, Inc. ml be held nt the offices of 
Linklaters A fens, at Barrington House, 59-67 Gresham Street, London 
EC2V 7JA on 21n November, I9M at IL-00 a.m. (London time) for the 
purpose of considering and. if thought Ei, passing the following resolution 
which will be proposed as an Extraordinary Resolution in accttdanoc with the 
pnjvtsiotK of the Fiscal Agency Agreement (the ’‘Fiscal Agent? Agreement”) 
dated 26th November; 1991 made bet we en Ibkyu USA, Inc., The Mits u bis hi 
Bank. Limited as Fiscal Agent mad tbe other frying Agents named therein. 

EXTRAORDINARY RESOLUTION 

(I) with effect from 8th December, 1994 (the "Effective Date"), the terms 
and conditions or the Notes as printed on the reverse of them and in 
Schedule I to the Fiscal Agency Agreement be modified as follows: - 

(A) The introductory paragraph of the Hams and Condition* shall be 
amended by: 

(0 (he deletion of the drat sentence and the substitution of the following: - 
"The fen 10,000,000,000 6.45 per cent. Notes doe 1996 (the "Notes") of 
Ibkyu USA, Inc. (‘Tbkyu USA") were Issued putsoant to a Steal agency 
agreement dated 26th November, 1991 between Ibkyu USA, Tbe Mitsubishi 
Bank, Limited ns fiscal agent and the other paying agents named in it. 
tbkyu USA as the original issuer of the Notes has been su bsti tuted by 
Tbkyu Corporation (the “Issuer”) as the primary obligor in respect of the 
Notes pursuant to an agreement dated &h December; 1994 between the 
Issuer, Tokyo USA, Tbe Mitsubishi Bank, Limited as fiscal agent and the 
other paying agent* named in it whereby the above-mentioned fiscal 
agency agreement has been amended (the fiscal agency agreement as so 
amended is referred to as the “fiscal Agmcy Agreement”)", 

(H) the deletion, in the thfari sentence of "the Issuer” and the sub stit u tio n of 
‘Tbkyu USA", and 

(Ei) the insertion at the end of mhii-imt of the following:- 

“and the transfer by Tbkyu USA. and the assump t ion by the Issuer, of 
the Cabffillcj under the Norcs were authorised by resolutions of the Board 
of Directors of Tbkyu USA and the Issues; respectively, adopted on 27th 
October; 1994". 

(B) In Condition 2, the definition or “Subsidiary** shall be amended by the 
Insertion, after the wort “means”, of 'Tbkyu USA, San Diego 109, Inc., 
San Francisco 109, Inc., Tbkyu Land Dcwtopmsu (Hawaii), Inc. and 
United Development Corp. (each a “Relevant Company”) and ”, and tire 
substitution for “the Issuer” of the worts “a Relevant Company”. 

(O C o ndit ion 4(b) shall be amended by:- 

0) the a mendmen t of refere n ces to “the United States'* to references to 
“Japan”. 

(H) the amendment of “Ztitfa November. 1991” to “8th Decembe r , 1994", 

Oil) the deletion at the end of line 7 of the words "on the Notes” and the sub- 
stitution of tbe fofiowing:- 

“(jt) In connection with payments due in respect of tbe Notes other than 
payments of interest on the Notes or (y) calcar latcd at a withholding tax 
rare (ignoring the effect of any double taxation avoidance treaty) wtdeh 
k higher than 20 per cent. In connection with payments of interest on the 
Notes," 

fir) the insertion after tbe words "Adtfinonal Amounts" in tines II and 17 of 
the worts “described in (a) or (y) above”, and 
(v) the deletion of the whole of the second paragraph. 

(D) Conditions 5(b) and (f) shall be amended by the insertion of the words 
“Japan or” before “the United States” in Bne 3. 

(E) Condition 6(a) shall be amended byr- 

0) the substitution for “the United States” of “Japan” in line 4, 

(u) the substitution for "a United States Alien” of "not a Japanese 
Resident”, and 

(in) the deletion 'of the second paragraph and the substitution of the 
fodowin^- 

“The term "Japanese Resident" means any person, corporation or entity 
who, for Japanese Income tax purposes, is treated as ■ resident of Japan 
or a Japanese corporation”. 

(F) Condition 6(b) shaft be amended by> 

fi) the deletion of “(I)" in line 2 of paragraph (A), 

the substitution of all re f erences to “the United Stales” by refere nc es to 
“Japan”, 

(in) the deferim at tbe end of paragraph (A) of everything after (but not 
teSnHhv^ nraMnhinrm th erei n* *, and 

(W) the ddethm in paragraph (F) of everything after (bat not including) 
"classes of nock of tbe Issuer”. 

(O Condition 6(c) shall be deleted and Conditions 6(d) and (e) Shan be 
redesignated accordingly and the lefenatcc in CoodSdon 3 to “Condition 
6(d)” shall be amended to “Condition 6(c)”. 

(H) Condition 7(j) shall be amended by the substitution for "Uniltd States” 
of “Japanese”, and the drfwrn« of ‘for** at the end of the paragraph. 

(I) Conditions 7(0 and (k) shall be deleted; and 


CD the giving by Tbkyu Corporation on tbe Effective Dale of the guarantee 
in respect of the Notes (the ‘‘Guarantee’! and, immediately thereafter; the 
assumption (the " Assumption") by Tbkyu Corporation on the Effective Due 
of faH liabcKiy as the principal debtor in respect of the Notes, including liabtb- 
ty in respect of any payments to have been made prior to the Effective Date; 
and of all obligations u n d er the terms and comfittanj of the Notes and the 
Fiscal Agency Agreement as fully as if Tbkyu Corporation had been named 
therein as the sole principal debtor in place of Tbkyu USA, Inc. in respect of 
the Notes, be authorised and co n firmed ; and 

(3) every abrogation, modi Or a tio n, variation, compromise or arrangement in 
respect of the rights of the Noteholders and the holdas of the Coupons relat- 
ing to the Notes against Tbkyu USA, Inc involved in or resulting from the 
lams of paragraphs (I) and (2) of this resolution be sanctioned; and 

(4) Tbkyu Corporation be released from its obHguioos under the Guarantee 
simultaneously with the Assumption; and 

(3) Tbkyu Corporation and Tbkyu USA. Inc be released, with effect ftom the 
Effective Dam, bum all obligations which each of them has to tbe holders of 
the Notes under the Keep Wdl Agreement and the Deed Poll (the "lostra- 
menu”) entered into by Ibkyu Corporation and Tbkyu USA. Inc on 14th 
November, 1991 In relation to the Notes and any termination, amendment or 
breach of the Instruments on or afte' 'he Effective Dote be sanctioned. 

The attention of NoteboWen is particularly drawn io the quorum required for 
the Meeting and for any adjourned Meeting which is set out in paragraph 4 
of “Ifodng and Quorum" below. 

AVAILABILITY OF DOCUMENTS 

Copies of the Fiscal Agency Agreement, a draft Supplemental Agency Agree- 
ment to amend the Fiscal Agency A g ree m e nt , a draft Deed or Substitution 
to be executed by Tbkyu Corporation and Tbkyu USA, Inc and draft legal 
opinions of each of Komatsu & Korea and Unkhtcrs A Paines may be 
inspected u, and voting certificates may be obtained from, the specified office 
or any of the Paying Agents given below. 

VOTING AND QUORUM 

1. A Noteholder wishing to attend and vote at the Meeting in perron most 
produce at the Meeting either for Norefa), or a valid voting certificate or 
certificates issued by a Paying Agent relating to the Note(t), In respect or which 
he wishes to vote 

2. A holder of Notes not wishing to an end and vote at tbe Meeting in person 
may either deflver Us Note(s) or voting certificated to the person whom he 
wishes to attend on Us behalf or give a voting instruction (on a voting instruc- 
tion form obtainable from the specified office of any of the Raying Agents 
given below; Instructing a Paying Agent to appoint a proxy to attend and vote 
at the Meeting In accordance with his instructions. 

3. Notes may be deposited with any Paying Agent or (to tbe satisfac tion of 
such Paying Agent) held to its order or under its control by Odd , soefefe 
jmonynse, or tbe Operator of the Euro dea r System or any other person 
ap proved by it, for the purpose of 0) obtaining voting certificates or (ii) giving 
voting instructions and requiring such Paying Agent to appoint prairies, not 
later than 48 bours before tbe time appointed for bolding the Meeting (or. If 
applicable, any adjournment of such Meeting). Notes so deposited or held will 
not be released until the earlier of (i) the conclusion of the Meeting (or, if 
applicable, any adjournment of such Meeting) and (3) the surrender to the 
relevant Paying Agent oT the voting certificated) or. not less than 48 hours 
before the time fixed for tbe Meeting (or; if applicable, any such adjournment) 
the surrender to the relevant Paying Agent of the receipt (s) issued In respect 
of the relevant Notes. 

4. The quorum required at the Meeting is two or more persons present bolding 
Notes or voting certifica tes or bring pmriesaud holding or repre sen t in g In the 
aggregate not less than three-quarters in principal amount of the Notes fbr the 
time being ontstancEng (as defined In the Fiscal Agency Agreement). If within 
15 minutes from the time fitted for the Meeting a quorum Is not present, ihe 
Meeting shall stand adjourned for such period, not being less than 14 days nor 
more thin 42 days as may be decided by the Chairman of tbe Meeting. At tacit 
adjourned Meeting the quorum shall be mo or more persons present holding 
Notes or voting certificates or being proxies and hohfing or r e pres e nting in the 
aggregate not less than one-quarter in principal amount of the Notes for the 
rim# being outstanding. 

5. Every question submitted to the Meeting will be decided, in the first 
instance, by > show of bands and thereafter. If a poll Is duly demanded 
by the Chairman of the Meeting or Tbkyu USA, Inc. or by one or more persons 
holding one or more Notes or voting certificates or being praties and twkfing 
or representing in the aggregate not less than oae-filtieth in principal amount 
of the Notes for the time being outstanding, by a pod On a show of bonds 
every peraon who is present In person and prod uc es a Note or voting certificate 
or is a proxy shall have one vote. On a poll every person who is to present 
shall have one vote in respect of each Note so produced or represented 
by rbc voting certificate in produced or in respect of which be is a proxy. 
In the case of an equality of votes the Chairman shall both on a show of 
hands and ou a poll hare a easting vote in addition to the rote Of rotes 
(if any) which he may tune as a Noteholder or os a holder of a voting certifi- 
cate or asa prosy. 

6. IT passed by a majority in fa vo ur consisting of not ka than three-quarters 
of the votes cast, paragraphs (1) to (4) of the Extraordinary Resolution will be 
biadiHg on all the Noteholder*, whether or nor present at such Meeting and 
upon all the holders of the Coupons relating to the Nates. Paragraph (5) of 
the Extraatt&flaiy Resolution arift be binding on those Noteholders who voted 
in -favour of the Extraordinary Resolution. 


Fiscal and Paying Agent 
Tbe Mitsubishi t hwirwi 
6 Broadggtq London EC2M 2SX 
Faying Agents 

The Industrial Bank of Japan, Limited, 

I B mdl 

Bracken House, One Friday Street, London BC4M 9JA 


Morgan Ov&ranty Trust Company 
of New Murk 

Avenue des Arts 33, 1 040 Brunch 


28th October, 1994 


Tbkyu USA, lot 



26 


FINANCIAL TIMES FRIDAY OCTOBER 2S 1994 


INTERNATIONAL COMPANIES AND FINANCE 


units 


By John Burton in Seoul 

Samsung, South Korea’s biggest 
conglomerate, yesterday said it would 
consolidate its operations by cutting 
the number of its subsidiaries to 24 
from SO through mergers and disposals. 
It is the third large-scale reorganisation 
to be announced by Samsung in the last 
three years. 

The latest shake-up follows the intro- 
duction of management reforms last 
year to promote autonomy among the 
group's main business areas, including 
electronics, machinery, chemicals, and 
trade and finance. 

The reorganisation signals the 
group's intention to focus on these core 
industries and rationalise their 
operations. But some analysts said the 
consolidation hardly represented a sig- 
nificant change in the group's corporate 
structure, since many of the subsid- 
iaries to be sold are of minor impor- 
tance to Samsung's operations. 


Moreover, domestic investors fear the 
planned mergers among some of Sam- 
sung's mein subsidiaries could depress 
profits for the enlarged units. 

Share prices for 11 of Samsung's 12 
listed affiliates fell sharply after the 
reorganisation was announced. Only 
the Samsung Aerospace share price 
increased, due to the perceived benefits 
from its merger with Samsung Heavy 
Industries, a manufacturer of ships and 
trucks. 

The corporate restructuring may 
have as m uch a political purpose as a 
business one, as Samsung tries to curry 
favour with the government and win its 
approval for the group’s plans to enter 
the passenger car industry. 

Samsung claims the reorganisation 
meets many of the government's goals 
for the reform of Korea's leading con- 
glomerates. including business speci- 
alisation and the dilution of ownership 
by the group's founding family. 

Ten subsidiaries will be merged. Sam- 


sung Corporation, the group's trading 
arm, will over several construction 
including ftanwmg ' Engineering 

and Construction. Samsung Engineer- 
ing and Samtech, and Cheil Industries, 
the textile company. 

Samsung Heavy Industries, which 
specialises in transport equipment and 
construction machinery, will absorb 
Samsung Aerospace, Samsung Forklift 
and Samsung Eloeckner Machinery. 
The recently-acquired Korea Fertiliser 
and Chemicals will be merged with 
Samsung General Chemicals, the petro- 
chemicals unit 

The property group Joong-ang Devel- 
opment will take over Yoopo Leisure, 
while Kwangjoo Electronics becomes 
part of Samsung Electronics. 

Samsung Watch will change its name 
to Samsung Precision, with semi- 
conductor manufacturing equipment to 
be added to its activities. 

Sixteen subsidiaries, which are 
mainly in the labour-intensive textile. 


food and service sectors, will be sold 
because their profitability is being 
eroded by higher wage costs. 

The companies to be sold include 
Cbeil Food & Chemicals, CheU Synthet- 
ics, Hicreation, Cbeil-Bozell Advertis- 
ing, Daekyung Building, Korea- Alaska 
Development, Cheil Frozen Food, Cho- 
sun Hotel, Taejon Station Business and 
Cbeil Futures. 

Others companies that will be spun 
off include Samsung Emerson and 
Korea Information Group in electronics, 
and Sbin-etsu-sllicone Korea. Cheil 
Ciba-Gelgy and Daehan Precision in 
chemicals. The Joong-ang Daily News, 
one of the country’s main newspapers, 
will also be sold by 2000. 

Although the sale of these units will 
reduce the group’s annual sales by 
Won3.000bn to Won40,000bn (SSObn). 
based on last year’s sales performance, 
they could help raise funds for the Sam- 
sung car project, which Is expected to 
cost at least $5bn. 


Chinese cling to share rollercoaster 

Market gyrations are not helping confidence, writes Tony Walker 

Chinas volatile times 


Indices rebased 
140 



Shares in Japan Tobacco 
slump on first day’s trade 


20 *- 


1994 


Dec 


A n official in Beijing 
responsible for regula- 
ting the stock market 
was this week reported to have 
said that recent market tur- 
moil was ‘'tugging at the 
hearts of hundreds of millions 
of Chinese”. 

Something of an exaggera- 
tion perhaps, but share indices 
have been rising and falling 5 
per cent to 10 per cent almost 
daily in recent months, and 
such volatility in China's 
infant markets is hardly engen- 
dering confidence among 
investors. 

The Shanghai index for 
A-shares (reserved for local 
investors) hit a low-point of 
328.85 on July 29. prompting 
panicky government interven- 
tion to halt the slide. 

The market then jumped to a 
heady peak of 1,057.31 on Sep- 
tember 12 before subsiding like 
a punctured balloon, to fall by 
about 40 per cent in ensuing 
days. Yesterday, it finished at 
703.72, compared with 686.31 
the day before. 

One factor creating the mar- 
ket's gyrations are continuing 
rumours about the health of 
Mr Deng Xiaoping, China's 
senior leader. The Shanghai 
market plummeted by about 40 
per cent earlier this month on 
reports that Mr Deng was near 
death, before recovering most 
of the lost ground after an offi- 
cial denial. 

Mr John Crossman of Jar- 
dine Fleming brokers in Shang- 
hai likens the Shanghai 
A-share market to a casino. “It 
is completely driven by small 
local investors trying to guess 
what the big investors [local 
securities houses] are doing 
and vice versa.” 

Mr Crossman believes the 
A-share index will bounce 
between 500600 until liquidity 
improves. He notes that while 
the market capitalisation of 
A-share companies is about 
U$40bn, only about U38.1bn of 
stock is tradeable. 

These are sbares held by 


Philippine media 
group gains 63% 
in third quarter 

ABS-CBN Broadcasting, tbe 
Philippines television and 
radio operator, said its 
unaudited third-quarter net 
income rose 63.1 per cent to 
735.2m pesos (S28.9m) from 
45Q.sm pesos in the same 
period last year, Reuter 
reports from Manila. 

Gross revenues grew 25.1 per 
cent to 2.h>9bn pesos from last 
year’s l,734.6bn pesos, and 
earnings per share rose to 2.83 
pesos from 1.73 pesos. 

Analysts noted the 
company's audience share 
continued to grow, and 
advertising revenues were 
expected to jump around the 
Christmas period. 


Jan 

Sarot Pataaftan 

individual investors, and 
amount to about one-third of a 
listed companies’ shares. The 
remainder are vested in the 
state or held by sooalled “legal 
persons", such as institutions, 
corporations and quasi-govern- 
ment bodies. 

The August jump in China's 
fledgling stock markets fol- 
lowed a government announce- 
ment that it was suspending 
all new listings. It also said it 
was considering allowing the 
establishment of joint venture 
security houses to trade in 
A-shares. 

This announcement galvan- 
ised a market starved of posi- 
tive news, but It seems the 
benefits of government inter- 
vention are diminishing in the 
absence of further develop- 
ments. “They ramped the 
[A-share] market to unsustain- 
able levels, but now it's run 
out of juice,” says Mr Cross- 
man. 

Western stock analysts in 
Shanghai say among problems 
feeing the A-share market is 
the lack of supply of newly- 
listed stock. They believe it 
was a mistake for the autbori- 


By Louise Lucas 
in Hong Kong 

New World Development, the 
Hong Kong property, hotels 
and Infrastructure group, yes- 
terday reported a 34 per cent 
rise in net profits to HK$A3bn 
(US$558m), from HK$3.5bn, for 
the year to June SO. The results 
were broadly in line with mar- 
ket forecasts. 

Gross income from property 
sales last year totalled 
HK$6.3bn, a 31 per cent 
improvement over the previous 
year. However, rental income 
edged up 8.5 per cent to 
HK$i.4bn from HKJLSbn. 

On a fully diluted basis, 


ties to halt new listings. 

Instead, they say, the govern- 
ment should have announced a 
schedule for newly-listed stock, 
which would have provided a 
clear guide to the future 
instead of tbe previous haphaz- 
ard approach which gave no 
real guidance of the timing of 
new issues. 

The Shanghai Securities 
News reported an (unnamed) 
official of the Securities Com- 
mission In Beijing, one of sev- 
eral securities regulatory bod- 
ies under State Council or 
cabinet, as saying the authori- 
ties were investigating the 
establishment “as soon as pos- 
able" of investment fends to 
stabilise the market 

C hinese officials have 
been trumpeting the 
need for mutual-type 
fends to bring weight to the 
market However, such a devel- 
opment is being held up 
because of delays in promul- 
gating a new National Securi- 
ties Law. After going through 
multiple drafts, the measure is 
lodged with the standing com- 
mittee of the National People’s 


earnings per share rose 18 per 
cent to HK&L57 from HKS2.17 
the previous year. 

The directors are recom- 
mending a final dividend of 78 
cents, up from 62 cents tbe pre- 
vious year, to be paid in scrip 
or cash. 

The group has 17 projects in 
the pipeline, which will pro- 
vide New World with a total 
entitl e ment of about 572,997 sq 
metres upon completion with 
about 92^50sq m to be com- 
pleted before the end of tbe 
financial year. 

New World boasts one of the 
biggest Iandbanks in China 
among the Hong Kong prop- 
erty developers, and believes 


Congress, China's parliament. 

Small closed-end funds are 
active in China's markets, but 
these can hardly be said to 
contribute to stability since 
they are speculative vehicles. 
About 70 of these fluids are 
operating in the Shanghai 
market 

While the behaviour of 
A-shares has been marked by 
extreme volatility. B-shares, 
traded in US and. Hong Kong 
dollars, are lawgiiichinp with 
the index finishing yesterday 
at 77.28, little changed from the 
day before. 

Mr Richard Graham, chief 
representative in Shanghai of 
Baring Securities, said manag- 
ers of China fends were preoc- 
cupied with negative economic 
news from China, including 
bad inflation figures. An 
adverse tax ruling denying for- 
eign invested companies tax 
rebates had also depressed sen- 
timent. “Fund managers these 
days are looking at actual 
earning s growth," he said. 

Local Chinese investors 
appear to have paused in then- 
purchases of B-shares. With 
the stabilisation of the yuan 
(the local currency has appreci- 
ated this year against the US 
dollar), there is much less 
incentive for locals to dabble in 
B-shares. 

Among the few bright spots 
has been the increased activity 
of Japanese securities houses, 
following the Japanese share 
dealers’ association's decision 
in March to allow investments 
in the Shanghai market 

Increased, albeit cautions, 
Japanese activity is reflected 
in the increasing share of 
trading in the B-share market 
of Japanese securities houses, 
with Nomura leading tbe way. 

Western analysts in 
Shanghai expect the B- share 
market to continue to be 
subdued for the rest of the year 
and predictions that the 
B-index would reach 100 by the 
end of the year have been set 
aside. 


this will allow it to benefit 
from reforms and economic 
development across the border. 

In Hong Kong, where govern- 
ment measures and bank curbs 
on mortgage lending have 
depressed property prices, the 
group is equally confident of 
its prospects. 

Mr Henry Cheng, manag in g 
director, said consolidations 
would nurture a healthier and 
more stable environment for 
future property development 
“The fundamental factor sup- 
porting long-term growth in 
property value has remained 
unchanged with the facts that 
the demand far exceeds sup- 
ply," he said. 


ANA drops 
79% despite 
increase 
in traffic 

By Mlcteyo Nakamoto 

All Nippon Airways (ANA) 
reported a sharp drop in recur- 
ring profits, before extraordi- 
nary items and tax, for the 
first half of the year, in spite 
of a moderate recovery in pas- 
senger volumes. 

The recurring profits 
declined 79 per cent to 
Yl.l9bn ($l&2m) from Y5.66bn 
a year ago, as revenues slipped 
slightly to Y401.6bn from 
Y404,4bn. 

Net income fell 40 per cent 
to Y7S8m from YL34bn last 
time. 

ANA, Japan’s second biggest 
airline, said Japanese travel- 
lers were returning to the 
market but the benefits had 
been overshadowed by a sharp 
decline in prices. “We are see- 
ing increases in passengers 
but with the rampant price 
sensitivity it hasn’t helped our 
revenues much." the company 
said. 

The yen’s strong apprecia- 
tion lured Japanese passengers 
back on to international 
routes, where passenger num- 
bers were up 5 per cent ANA 
said. European routes, in par- 
ticular, did wefl. 

However, revenues from 
international routes were up 
only 3 per cent If prices had 
not fallen, ANA would have 
added YSOOm to passenger rev- 
enues of Y24hn in tbe period. 

On domestic routes, passen- 
ger numbers were up only 1-8 
per cent 

“With Japan’s economy 
showing signs of recovery, the 
prolonged downward trend in 
air travel demand appears to 
have bottomed out," ANA 
said. Business class appears to 
be recovering, particularly on 
European and North American 
routes. 

ANA initiated a restructur- 
ing plan in February to cot 
costs by abont Y6bn and 
increase revenues by about 
YZObn by March next year. 
The plan includes a 10 per cent 
cut in its workforce through 
natural attrition and cuts in 
controllable costs. 

In the first half of the year, 
the company has been able to 
cut operating costs by T600m. 
It has started to hire cabin 
crew on a contract basis in a 
programme that is being 
adopted by Japan’s troubled 
airlines and which caused 
substantial controversy this 
summer. 

ANA does not expect a 
strong recovery, in spite of a 
promising outlook for interna- 
tional passenger travel, which 
is forecast to rise by nearly 10 
per cent in the full year. The 
company expects revenues for 
the year to rise 25 per cent to 
Y794bn and is “cautiously con- I 
fident of keeping the airline in | 
the black”. < 


By Emlko Terazono in Tokyo 

Japan's ministry of finance, 
which has met strong criticism 
over tbe unpopular partial pri- 
vatisation of Japan Tobacco, 
ran into further embarrass- 
ment yesterday as the stock 
fell sharply on its first day of 
trading on the Tokyo Stock 
Exchange. 

Shares in Japan Tobacco, the 
cigarette manufacturing 
monopoly, closed at Yl.lin, 
down. 23.5 per cent from its 
publicly offered price of 
Y l.438m and wiping Yl33bn 
($1.4bn) off shareholders' 
investments. After failing to 
trade during the first few 
hours due to the lack of buy- 
ers, tile stock finally changed 
hands at YlJSm. 

Matsushita Electric Works, a 
subsidiary of the consumer 
electronics groap, which 
bought 1,720 shares through 
the preoffer auction at about 
Y1.35m per share, said It would 

maintain its ho lding s for nOW, 


Mc>yu Japan's large 
comprehensive 
.. : .... electronics 
companies 
Posted a firm 
-JsjggfrgiigL- recovery in 
profits in the first six months 
of fiscal 1994 on the strength of 
cost-cutting measures and 
buoyant demand for products. 
The rebound for the 
manufacturers, who make a 
broad range of products from 
semiconductors and televisions 
to computers and heavy 
electrical machinery, ended a 
painful period of declining 
earnings lasting, in many 
cases, for three years. 

Fujitsu, Japan's largest 
computer manufacturer and 
parent of ICL, the UK-based 
computer company, bounced 
back into the black with 
recurring profits - before 
extraordinary items and tax - 
of Y22.l3bn (S227m) compared 
with a deficit of Y13.79bn at 
the sami* stage last year. 

NEC saw recurring profits 
nearly triple to Y2028tm from 
Y7.13bn while Mitsubishi 
Electric's recurring profits 
surged SO per cent to Y27bn. 

The turoround came in spite 
of what the companies 
described as persistent 
weakness in private capital 
spending amid a mild 
economic recovery in Japan 
and a strong rise in the value 
of the yen. 

Hie biggest boon for Japan's 
electrical makers was the 
strong demand this year for 
electronic devices, particularly 
semiconductors and liquid 
crystal display panels. 

Japanese companies are 
leading world suppliers of 
memory chips and LCD 
screens, which are seeing 
strong demand from the US 
personal computer Industry as 
PCs have been upgraded to 
advanced models which use 
more memory and as the PC 
market has grown. 

Fujitsu reported a 22 per cent 
rise in sales of electronic 


Other corporate holders 
include Yasuda Fire & Marine 
Insurance, which bought 1,120 
shares thro ugh the pre-offer 
auction. 

Brokers fear the sharp fell m 
the stock price will further hit 
sluggish retail investor confi- 
dence. Over 60 per cent of the 
small investors who were allot- 
ted the right to buy shares in 
the public offering forfeited 
their allocations due to con- 
cerns of the weak Tokyo stock 
market and the expensive 
offering price. 

The privatisation flop casts a 
shadow over future govern- 
ment flotations. “People will 
not trust the government in 
future privatisations,” said one 
Japanese broker. 

However, amid the criticism 
the ministry of finance put on 
a brave face, and said it 
intended to go ahead with the 
sales of the partially privatised 
Nippon Telegraph and Tele- 
phone shares during the cur- 
rent year to March, since it 


components, including 
semiconductors. 

Toshiba said semiconductor 
sales were up 14 per cent and 
sales in its information 
systems and electronic devices 
division were up 16 per cent as 
a result of strong demand 
for semiconductors and 
LCDs. 

Other information 
equipment, such as cellular 
phones and car navigation 


Michiyo Nakamoto 
in Tokyo reports on 
unproved results at 
some of Japan’s 
leading groups 


systems, enjoyed firm demand 
in Japan and are expected to 
support sales ahead. 

However, for the many 
integrated electrical machinery 
makers involved in consumer 
electronics, demand from 
consumers for audio-visual 
products remained sluggish 
overall, in spite of the income 
tax cut 

In addition, prices have 
fallen sharply in the consumer 
electronics market resulting in 
lacklustre profits even for 
companies which were able to 

maintain unit 

For example, Toshiba said 
that air condi t io n er sales rose 
50 per cent in unit terms but 
due to weak prices the 
benefit to profits was 
insignificant 

Meanwhile, sales of TVs. 
video recorders and audio 
equipment remained weak in 
the Japanese market and 
prices came under pressure 
from cheap imports. 

The weakness of private 
capital spending was reflected 
in the results of those 
companies’ with substantial 
heavy electrical and industrial 
machinery divisions. 


was included in this year's 
budget 

The transport ministry has 
taken a more cautious 
approach, and this week said it 
wo u l d review plans to list in 
February West Japan Railway, 
one of the six rail companies 
created by the 1987 break-up of 
Japanese National Railways. 

Meanwhile, the finance min- 
istry has started to review its 
pricing method of shares in 
companies to be privatised. 
Rather than choosing a mid- 
price achieved in a pre-offer 
auction. Japanese and foreign 
brokers are calling for the 
adoption of the book-building 
system used in the US and 
Europe, where an offering 
price is chosen after financial 
advisers sound out the leading 
potential investors. 

The Tokyo stock market 
shrugged off Japan Tobacco's 
woes, and the Nikkei 225 index 
closed marginally higher gain- 
ing 50.01 to 19,796.36. 

See World Stock Markets 


Hitachi, for example, saw a 
15 per cent decline in sales In 
Its industrial systems divirion. 

Toshiba suffered a 30 per 
cent drop in its heavy 
electrical machinery division, 
although that was largely on 
an absence of nuclear 
power plant sales in the 
period. 

The computer market was 
also, on the whole, a weak 
point for Japanese companies. 
While PCs have been in 
demand in the Japanese 
market, prices have fallen 
sharply. 

Fujitsu said it expected unit 
sales to rise about 28 per cent 
to 30 per cent but indicated 
that this would not translate 
directly into profit increases 
due to the price fells. 

Fujitsu saw consolidated 
sales in its information 
processing division fell 2 per 
cent due to the yen's rise and 
to a weak performance by ICL, 
which suffered from stagnant 
sales in Europe, it said. 

The companies have 
responded to pressures In then- 
business environment by 
cutting costs, shifting 
production overseas and 
procuring more parts from 
low-cost bases abroad. 

Toshiba, for example, began 
importing 14-inch TVs from 
Taiwan which it sells in Japan 
under its own brand in an 
original equipment 
manufacturing arrangement, 
the company said. 

Fujitsu said it would shift 
more production overseas. 
Currently 17 per cent of the 
company’s overall sales is 
manufactured overseas. 

The industry expects 
demand for semiconductors 
and LCDs to remain buoyant 
for some time ahead. 

On the back of expected 
strong semiconductor demand. 
NEC, Toshiba and Fujitsu have 
aQ revised spending plans to 
reflect greater expenditure on 
semiconductor facilities. 

See Lex 


. 1994 interim results and forecasts for year (Ybn) 

Company . . 

- 1994 

Sales ; ' 

'. I?** • 

ftoeuKtng profits* 
1994 • • 1993 

Nat profits 

1994 1993 

FuiBsu 

Forecast 

' 1^5t2S9 
'2.250.00 

•/ 9S&29.- ' 

/22L13 

7000- 

-13,79 

12^8. 

38.00 

-1249 

Hitachi 

Forecast 

1S72SG 

■ 3,650.00 

' 1,332.23 ' 

43.03 . 
-.88-00 

29.86 

2023 
. 52.00 

21-26 

MBsubtsU Etec - - 

Forecast- 

• 1,165.43 
2^440.00 ' 

1,139.02 

27-01 . 
6800 ' 

. 15.04 

14.31 

28.00 

4.87 

NEC . t , * 

Forecast ' . . 

1,3® S3 
3,030 JX) 

i;33&36 *’ 

‘ 2026 
60-00 

7.13 

10i26 

30.00 

5.13 

Toshiba 

Forecast 

1S21S9 

2,440.00 

1,535.71 

24,70 

65.00 

22.41 

17.20 

38.00 

17.01 



New World Development profits 
rise 24% to HK$4.3bn for year 


Fujitsu returns to black as 
electronics sector recovers 


X 

Mass Transit Railway Corporation 

i A coTporj&M established by the Ma» Transit 
Railway Corporation Ordinance of Hong Kony 

HKS3, 000,000.000 

(Or on eqvmtleiu iimnuiv in V. 5 dcllursi 
Medium Term Note Programme 

JHKS 160.000,000.90 Collared Floating Rate Notes doe 1996 

Notice is herrbv given that the HIBOR applicable to the subject notes 
for the period from October 25, 1994 to January 25, 1995 is 
5.625 pm. Coupon amount payable January 25, 1995 per HKS500.000 
note is HK$7,089.Q4. 

Morgan Guaranty Trust Company of New York 
Hong Kong 

As HK Reference Agent 

jPMorgan 



BANQUE RATIONALE OE PARIS 
USD 250,000,000 
FLOATING RATE DUE 1997 
Applicable interest rate for the 
{merest period from 26.10.94 up 
to 26.01.95 as determined by the 
reference agent is 5.875 per cent 
per annum namely USD 1501,39 
per bond of USD 100,000. 


Sudwestdeutsche 
Landes bank Girozentrale 

USS150.000.Q00 
Subordinated collared 
floating rate notes 2904 

Notice is hereby green that the 
notes will bearinienest at 5.75% 
per anmmt from 28 October 1994 
la 28 April 1995. interest 
payable on 2S April 1935 Will 
amount to USS290 69 per 
USSm,000note. 

Agent: Morgan Guaranty 
TVust Company 

JPMorgan 


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ULM c.««rm r «»« ni nvumi ni »nM. 


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The 'merest payable on 28th April. 
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FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


27 


★ 


INTERNATIONAL CAPITAL MARKETS 

Longer-dated Treasuries stage advance 


Kepco lists ADRs 
on New York SE 


By Rank McGurty fai New York 
and Conner MUdetanann 
in London 

Longer-dated US Treasury 
bonds staged a modest advance 
yesterday morning ahead of 
today’s data on economic 
growth. The improvement 
suggested the market had 
already factored an unfavoura- 
ble reading into prices. 

By midday, the benchmark 
80- year government bond was 
A better at 9S8, with the yield 
slipping to 8.039 per cant At 
the short end, the two-year 
note was unchanged at 99$, to 
yield 6-892 per cent 

The advance at the long end 
was not a reflection of any fun- 
damental shift In sentiment 
The tone remained marginally 
negative, with most traders 
merely squaring their positions 
ahead of the advance estimate 
of gross domestic product in 
the three months to the aid of 
September. Few were willing 
to make big commitments 
beforehand, even though many 
behave the market has estab- 
lished a bottom. 

Most economists had already 


By Marlki Brice 

The euromarkets saw a paudly 
of issues yesterday as borrow- 
ers stood on the sidelines 
awaiting the reaction to 
today's figures on GDP from 
the US. 


INTERNATIONAL 

BONDS 


The main deal of the day was 
Trans-Tokyo Bay Highway 
Corp, which brought a $200m, 
10-year deal with a 8% per cart 
coupon via Bank of Tokyo Cap- 
ital Markets. 

A syndicate manager said 


revised their forecasts 
upwards. The consensus view 
sees growth at 3 per cent dur- 
ing the quarter, as weaker ini- 
tial forecasts have fallen vic- 
tim to a series of stranger than 
expected economic indicators 
in recent weeks. Few were 
doubting the Federal Reserve 
was poised to lift short-term 
interest rates again. 

The same signals had sent 
bond yields to their highest 
levels in 2V4 years. With the 
return on the long bond hover- 
ing above 8 par cent all week, 
buyers were finally lured back 
into the market, though the 
activity was restrained, at best 
Improvement by the dollar 
against the yen and D-mark 
was a help, and a mildly dis- 
couraging economic report was 
mostly ignored. Twtuai {jafans 
for unemployment benefit - a 
snapshot of employment condi- 
tions - showed a small decline 
last week, against expectations 
of a sHgftt gain 
At the short end, uncertainty 
over the aggressiveness of the 
Fed’s expected move after the 
November elections was hold- 
ing back ac t ivi ty . 


demand for the deal was far 
stronger than expected. "This 
is a hot issue,” he said, with 
sales to Institutions in Asia 
and Europe. 

Yesterday's deal came at 38 
basis p flirih; over compara- 
ble Treasury, and did not move 
when freed to trade, said BoT. 
Other syndicates said the deal 
was fairly priced. 

Bayerisehe Hypo bank 
brought a A$75m, three-year 
deal with a 9K per cent coupon 
which lead-manager Hamhros 
said met retail demand in 
Europe. 

This was Hambros” 31st deal 
tMn year in the Australian dol- 
lar sector, and Bayerisehe 


■ European government bonds 
extended their early gains in 
late trading, supported by 
firmer US Treasuries and lifted 
by a break of key resistance on 
the German bund futures con- 
tract 

However, market partici- 
pants remained nervous ahead 
of today's release of US GDP 
data, and dealers said investor 


GOVERNMENT 

BONDS 


participation was minimal, 
with most of the activity tak- 
ing place in the fixtures pits. 

■ UK gilts rained by about a 
point, strongly outperforming 
German bunds. The December 
long gut fu t ur e on Liffe ended 
the day around 1Q0VS, up g. 
The 10-year gilt yield spread 
over bunds narrowed to 133 
from 142 basis points on 
Wednesday. 

In large par t, gilt s were lifted 
by comments from Mr Kenneth 
Clarke, chancellor of the 
exchequer, who said that UK 
interest rates would not have 


Hypobank’s second. Its first 
deal came in August with an 
8% per cent coupon and by yes- 
terday had tightened in by 35 
basis paints, said Hambros. 

Deutsche Bank Finance 
brought a $200m deal with a 7.5 


to rise much if a ti ght fiscal 
policy was maintained. 

“This may be a hint that the 
[November 29] Budget will be 
comparatively tight,** said Mr 

Chris Anthony, gilts analyst at 
ABN Amro Hoare Govett. 

The market was also relieved 
by ebbing supply concerns 
after Wednesday's gilt auction, 
which has left the funding 
pipeline clear of supply until 
December. 

A stronger currency also 
supported gilts and encouraged 
some foreign buying. Dealers 
reported overseas purchases in 
seven to 10-year maturities, 
while domestic investors were 
said to have been moving into 
longer maturities. 

■ German bonds rose by more 
than % point in largely techni- 
cal dealings. Early in the day, 
prices rose on hopes that the 
Bundesbank might revert to 
variable-rate securities repur- 
chase a g r ee m e n ts from the cur- 
rent regime of fixed-rate repos, 
which was seen to pave the 
way for lower shortterm rates. 
Although the Bundesbank’s 


excellent response from other 
syndicates, said lead manager 
Deutsche Bank, which brought 
this deal after seeing good 
demand fbr the three-year 


day left interest rates 

imriiangwi and aminnnrari two 
more weeks of fixed-rate repos 
at an unchanged 4J£ per cent, 
the market held on to its gains. 

In the afternoon, slightly 
firmer US Treasuries helped 
the December bund future 
breach key resistance at 89.00; 
it closed around its day's high 

of 89.25, up 0.62. 

■ Europe’s high-yielders con- 
tinued their recent rally. Italy 
again out-performed Germany, 
its yield spread over bunds 
narrowing to 422 from 437 basis 
points on Wednesday; Swe- 
den’s yield gap remained 
steady around 315 basis points. 

Swedish bonds were lifted by 
the Riksbank’s 20 basis point 
increase In the repo rate to 7.40 
per cent, seen as a credibility- 
bolstering move by the newly- 
appointed central bank coun- 
cil. 

Italian bonds rallied on 
Wednesday's cabinet agree- 
ment on amendments to pen- 
sion reform, the nomination of 
Mr Vincenzo Desario as central 
bank deputy governor and buy- 
ing by domestic investors. 


tranche of the Johnson Sc John- 
son deal this week. 

Dresdner International 
Finance opted for ABN-Amro 
Bank to handle its first visit 
thin year to the euromarkets 
with a FI 250m, five-year after. 


Cedel seeks 
approval to 
apply for 
bank licence 

By Norma Cohen, 

Investments Correspondent 

Cedel, the international 
clearing and settlement organ- 
isation, Is urging the nearly 
100 banks who own it to allow 
it to apply for a Lu xe mbourg 
banking licence in order to 
compete head-on with Morgan 
Guaranty's Eurodear system. 

The need for a banking 
licence has been p rompted by 
the Basle agreement mi inter- 
national bank capital ade- 
quacy rules, which require 
deposits against unsettled 
trades held at a corporation 
such as Cedel to carry a 100 
per emit risk weighting. 

However, settlement depos- 
its at Enroclear, which has a 
banking licence through Mor- 
gan Guaranty, carry a much 
lower 20 per cent risk capital 
weighting, making it much 
cheapo- to use it for interna- 
tional securities clearing and 
settlement 

Although the Basle guide- 
lines have been in effect since 
1989, it is only recently that 
Cedel has began to address 
their effect on its int ere sts . 

It has been reluctant to 
apply for a banking licence, 
partly out of concern at some 
of its shareholders that it 
could become their competitor. 

Cedel’s London-based Lib- 
erty subsidiary has recently 
launched a new electronic 
order-routing service for cross- 
border investment A Cedel- 
owned bank could easily 
become a custodial bank for 
users of the system, or a mech- 
anism for electronic transmis- 
sion of hanking payments.’ 

Cedel, which is based In 
Luxembourg, has been reas- 
suring shareholders that it 
does not intend to use the 
licence fbr activities which 
could compete with theirs. 


By Richard Lapper 

Kbrea Electric Power (Kepco) 
yesterday became the coun- 
try’s second company to list an 
the New York Stock Exchang e 
when it raised about S300m in 
a global equity offering of 
14.9m American Depositary 
Shares. 

The move by Korea's biggest 
company by capitalisation fur- 
ther signals a trend by Aslan 
and Latin American comp anies 
to raise capital through issues 
of either ADSs or global deposi- 
tary receipts - paper which 
represents underlying chawm 

Kepco issued 14,906,832 ADSs 
in its offer, which was coordi- 
nated by Lehman Brothers. 
They were priced at $20%, a 
premium of 5 per cent over the 
last local share price, but foil 
to 19% in early trading. Each 
ADS represents two shares. 

Pohang Iron & Steel Com- 
pany (Posco), the world's sec- 
ond largest steelmaker, was 
the first Korean company to 


Stadshypotek to 
price share deal 

By Martin Brice 

The board of Stadshypotek, the 
state-owned Swedish mortgage 
lender, meets today to decide 
final pricing of its SKrSbn 
domestic and international 
equity issue. 

Around 88 pea- cent of the 
shares have been taken up by 
domestic investors, who were 
offered free shares to encour- 
age them to participate In Swe- 
den's largest initial public 
offering, being handled by 
Klelnwort Benson of the UK 
and Alfred Berg of Sweden. 

Some 17m shares are likely 
to be available to fatornatirmal 
investors, suggesting a value 
tor the interna tional tranche of 
around yawim. 


Issue ADSs when it raised 
about $30Qm In New York ear- 
lier this month. Korean compa- 
nies were recently given per- 
mission by the government to 
list their shares in New York, 
London and Tokyo. 

Korean companies have been 
active in the GDR market, with 
seven issuing $473. 9m in GDRs 
this year (compared with three 
issuing $3 28 .2m in 1993). 
according to figures produced 
by Euromoney Bond ware. 

Total GDR issues by Hungar- 
ian, Tu rkish and a range of 
Asian and Latin American 
companies have amounted to 
more than $5.5bn compared 
with $2.1bn in 1993, according 
to the same source. Indian 
companies have topped the 
league of GDR issuance this 
year, raising about S2.39bq 

The listing of the two Korean 
ADSs opens up another route 
into Korea for individual US 
investors, who are currently 
dependent on a range of coun- 
try funds. 


Deadline for 
Benpres moved 

By Martin Brice 

Jardine Fleming has moved a 
deadline for holders of con- 
vertible bonds In Benpres, the 
Philippine media group, to 
swap them into global deposi- 
tary receipts in the company. 

The deadline has been 
moved from 5pm (New York 
time) today to 5pm on Thurs- 
day to allow Investors more 
time to convert the bonds. 

Jardine Is finnaning the GDR 
issue for Benpres, the largest 
broadcasting g ro up in the Phi- 
lippines, where there are legal 
restrictions on foreigners hold- 
ing mwtia shares. Jardine has 
constructed the $250m issue to 
allow foreigners to own GDRs 
but not underlying shares. 


Council at its meeting yester- 


Trans-Tokyo Bay offer 
sees strong demand 


NEW INTERNATIONAL BOND ISSUES 


Amount 

Coupon 

Price 

Maturity 

Fan 

Spread Book tunnar 

Oenaaar 

US DOLLARS 

OL 

* 


% 

bp 


Tnam-Tokyo Bay Hk^may Corp. 200 

EL376 

9B.6Q2R 

NOVJ2DM 

0525R 

+38(7% 96-04) Bank of Tokyo CapLMarkats 

Oautacta Bank FfaancaM 

200 

750 

100.1 BR 

fab. 1906 

OlIBTGR 

+22<B%%-07) Dautacha Btek London 

RtocaOW 

50 

1Z50S 

9930R 

NOV5002 

1.12SR 

♦d 16(871 56-37) CS First Boeun 

YEN 

Landaabank Rhainlwid PWz* 

16bn 

zero 

99.65 

Doc.1997 

isidbdL 

Norinchuldn IntamaBonri 

QUL0ER8 

Dreadnar Intamteonal Hnanca 

250 

750 

98J80R 

Doc.1899 

025R 

+25(7%%-99) ABN Amro Bonk 

AUSTRALIAN DOLLARS 
Ckraanaiand Tiwauy Cap. 

2SO 

95754 

99547 

Nov. 1996 

undad. 

Manta Lynch Wemaflorte 

D^wlidw Hypooartc 

re 

9.75 

101.15 

Dec.1997 

150 

• Hambros Bank 

SWISS FRANCS 

Aaroporta da Parts* 

70 

5.75 

10250 

Dec. 1996 

159 

Pwtas/ Swiss Bank 0*p. 

FM tarnn, nan-calahla untoaa stead. YMd spread mar ratowant government bond at launch suppled by toad manager. *Unfete& 
fSemt-amjei coupon, ft fined ta-oflOr prtca: feea shown ot ro-oflar leiraL s) Short 1st cctgian. b) Punatata on 4/11/97 at 99.1296. 


per cent coupon and a 39- 
month maturity. There was an 


| WORLD BOND PRICES 1 

BENCHMARK GOVERNMENT BONDS 

Red Db/b Week Month 

Coupon Data Prtoe changa Yield ago ago 

Italy 

■ NOTIONAL ITALIAN GOVT. BOND (BTPJ FUTURES 
(UFFE?* Lira 200m lOOths of 100% 

FT-ACTUARES FIXED INTEREST INDICES 

Price Indices Hu Day* Wed Accrued 

UKQOta Oct 27 chwva % Oct 28 Intorest 

xd at*, 
ytd 

— Low ewaxm yMd— -MatSoan coupon yWd — 
Oct Z7 Oct 26 Yr. ago Oct 27 Oct 26 Yr. ago 

— Mgh coupon yield — 
Oct 27 Oct 28 Yr. ago 


Aualnla 


9500 

08/04 

91.1900 

_ 

1046 

10.13 

1020 

Beitfuni 


7.750 

1004 

86.0400 

+0.480 

851 

855 

858 

Canntla' 


nmn 

08/04 

835600 

+0200 

9.11 

9.13 

AM 

Danmark 


7.000 

12/D4 

875500 

+Ol130 

950 

8 J7 

858 

Franca 

BTAN 

aooo 

asm 

101.1250 

+4X130 

750 

758 

7.48 


OAT 

6500 

04/04 

815500 

+0530 

EL32 

8.12 

an 

Germany Trtu 

7500 

08/04 

99.0800 

+0520 

7.63 

751 

758 

Italy 


8500 

08/04 

i».*wnn 

+1550 1159T 

11.78 

1126 

Jittwn 

No 118 

4500 

0S/96 

1025930 

-0580 

4.14 

409 

355 

Japan 

No 164 

4.100 

12/03 

96.7640 

+0590 

477 

473 

465 

Netherlands 


7350 

1004 

975400 

+0500 

751 

751 

750 

Spain 


9500 

05/04 

81.0900 

+4X390 

11.10 

11.15 

1158 

UK Gats 


8500 

08/99 

99-19 

+13/32 

859 

859 

954 



8.760 

11/04 

86-21 

+29/32 

8.77 

853 

854 



9500 

10/08 

102-07 

+35/32 

8.72 

852 

850 

US Treasury 

• 

7550 

08®* 

BBSS 

+1V32 

757 

7J7 

754 


7500 

11/24 

93-26 

+0/32 

855 

758 

758 

ECU (French Govt) 

8500 

04®4 

825700 

+0380 

8.70 

851 

853 


Open Sett price Chongs Wflh Low Esl wol Open Int 
Dec . Oft 80 10052 +0.97 10005 98.76 53427 59277 

mr 8958 99.73 +097 9ft50 99-33 215 5101 

■ ITALIAN GOVT. BOM) 08TP) FUTURES OPTIONS (LIFFE) Ura20Qm lOOthe Of 100% 


1 Up to 5 years (24) 

2 5-15 yeas (23) 

3 Over 15 years (9) 

4 tndMmHN M 

5 A1 stocks (61) 


11856 

+023 

11850 

123 

953 Syra 

R74 

856 

ais 

are 

858 

625 

854 

955 

449 

137.79 

+051 

13659 

157 

1150 15 yre 

854 

075 

753 

a77 

850 

7.17 

950 

9.12 

727 

15418 

+1.17 

15250 

224 

1057 20 yn 

ABB 

859 

7.14 

477 

850 

722 

859 

400 

729 

17226 

+0.77 

17153 

-0.14 

1357 meat 

858 

are 

720 







135.25 

+067 

13425 

155 

1055 











Strlka 

Mob 

Oac 

■ CALLS ' 

Mar 

Dec 

- PUTS 

Mar 

- mdta^moad 

G Up to 5 years (2) 

16952 

+0.05 

18554 

024 

657 

10050 

1.17 

AM 

1.15 

350 

7 Over 5 years fl I) 

1725S 

+059 

17150 

478 

426 

10100 

051 

251 

129 

328 

8 Al stocks (13) 

17268 

+4X08 

172.44 

are 

441 

"10160 

0.70 

152 

158 

3-5Q 







Inflation 5% 

Oct 27 Oct 26 Yr. sqo 


Inflation 10% 

Oct 27 Oct 26 Yr. ago 


<00 

am 


4P1 

am 


233 

3.14 


282 

3.72 


282 

3.72 


1.49 

298 


taten cfateng, -tew Turk mid-dw 
T OHM* gndjdng MMridhg aac St 125 
fWMK (JO, UK In State, Mhos ti 

US INTEREST RATES 


VWdK Lems msM mndatL 


a 125 par cant peytea fay nonratadantri 
dMfanri BouckMMS 


Em. voL total Cals WOO Put* 1BB7. Pnwtooa opon fait, Cafe 25178 Puto 28879 


Spain 

■ NOTIONAL SPANISH BOND FUTURES (Mfff) 


Debentures and Loans 


— — 5yaar ylald— — 15 jraar )Md 2S year yield ■ — 

Oct 27 Oct 28 -ft. ago Oct 27 Oct 26 Yr. ago Oct 27 Oct 26 Yr.ngo 


9 Det» & Loons (77) 126.19 +0.68 125-33 229 924 929 929 724 9.79 827 6.1 4 

Avenge gnaa redornpOon yfafcfc mv stain above. Cowan Bands: Lew: 0K-7WK; Ma rtian- Oft-IMM; Hpc UN and mar. t ftatt ytatt ycd Year to ibaa. 


9.70 9.77 


825 


Uichttm 


Fadinktf fatonoNnu 


7% Itoarmb — 

S bnanHUL. 
eudwb — 
- Onayoor — 


TbauyBHt and Bond YWfc 
4JM itoyair. 


525 ifanayaac. 
5.10 Rwya«_ 
5J0 IB-jcssr 
821 30-yaw 


7.11 

TAB 

757 

856 


Dec 

Mar 


UK 


Opon Sott price Change HBgh Low Eat voL Opon fan. 
8655 8624 +0-51 8824 0850 51292 73259 

8825 60 


FT FIXED I N T E RE S T INDICES 

Oct 27 Oct 28 Od 25 Oct 24 Oct 21 Yr 


CULT EDOED 


ago Ugh' Low* 


ACTIVITY INDICES 

Oct 26 Oct 25 Oct 24 


Oct 21 


Oct 20 


Qovt.Soca.MQ B0 l 68 9028 90.40 9024 9129 10265 107.04 9954 OK Edged 

Fixed kdaroat 10624 10728 107.46 10724 10826 12425 13327 10850 5-day 

- far 1004. GoMmmmi BacurMaa Htfi Once comptakn: 127.40 (WU3SL lea 40.1 B fVU 7Q. Rxad kiMtaat high Mica 
m nl Rxad band 1828. SE aetMy tatfacea isboaad 1974. 


902 672 642 012 888 

6<4 84.1 645 892 91.0 

W487 (tl/1/taq . law BOW (W7E) . Bate WOE Oomnanart Saautfa 1 571W 


BOND FUTURES AND OPTIONS 
France 

■ NOTIONAL FRENCH BOND FUTURES {MA.TIF) 


■ MOTIONAL UK QH-T FUTURES f ^FET CS0200 32nds of TOOK 

Opon Sott price Change H0h Low EaL wol Open Int 
Dec 99-15 100-12 +1-02 100-12 99-00 76687 101818 

Mar 96-26 96-15 +1-02 B8-26 98-28 1 46 


FT/TSMA INTERNATIONAL BOND SERVICE 


LMadanttwl 


■ LONG QH.T FUTURES OPTIONS jUFFE} £60,000 64th9 of 10096 


t teemtenri bonk tor aMdi two la an 

Bkl OBar Chg. YMd 


aa cun day what Lteatprteae at TMOpts an October 257 
laud Od OBar Chg. 1 


baued Bd OSw Chg. YMd 



Open 

Sett price 

Change 

Htf* 

LOW 

ESL WL 

Opm W. 

SHU 

Price 

Dec 

10064 

109.68 

+418 

1049* 

10928 

135563 

13421B 

Mar 

10850 

10858 

+418 

10408 

10470 

1645 

11584 


Jill 

10402 

10406 

+416 

10420 

10400 

808 

781 

102 
Eh. vd 


CALLS 


PUTS 


Oac 

1-28 

058 

034 


2-10 

1-45 

1-20 


Doc 

■MB 

1- 34 

2 - 10 


Mar 

2- 44 
6-15 

3- 54 


Ear. vcL total, Cato 7105 Pina 3K7. Previous day's open ML CMs 77040 Pitta 43483 


■ LONG TERM PUQtCH BOND OPTIONS (MATJF) 


Strike 

Price 

Nov 

- CALLS — 
Dec 

Mar 

Now 

— PUTS 
Dec 

110 

058 

151 

. 

432 

1.14 

111 

447 

1.03 

- 

122 

1.78 

112 

421 

474 

- 

- 

251 

113 

059 

- 

- 

- 

328 

114 - 

055 

- 

- 

- 

422 


327 


EsL voL total CaOa 21514 Pitta 29.191 . Piteous d W» open ML CMs 283533 Puts 322405. 


Ecu 

■ eCU BOND FUTURES (MAT1F) 


Dec 


us 


Open SMt price Changa 
79.70 78.78 +020 


High 

7926 


Low 

79.70 


EaL voL Opan Int 
606 6215 


■ US TREASURY BOND FUTURES (CB7) SI 00200 32nd» of 10036 


■ NOTIONAL GERMAN BUND FUTURES (UFFEJ- DM2S0.000 lOOths Ol 100% 


Open 

Latest 

Changa 

W1 

Low 

EaL voL 

Open Int- 

Open 

Dm 8473 

Mar 8859 

Salt price 
MM 

8446 

Change 

+460 

+461 

Hffx 

8925 

B443 

Low 

8486 

8851 

EsL wol Opm InL 
142501 179361 

303 5605 

Dec 

Mar 

Jun 

97- 08 

98- 16 
86-03 

97- 07 

98- 17 
95-31 

-441 

-442 

97- 15 
9428 

98- 04 

97-03 

96-14 

95-31 

332,494 

80S 

48 

384416 

27595 

11204 


■ BUND FUTURES OPTIONS flJflFQ DM2S0200 potota at 10096 


Strike 

Plica 

Dec 

Jen 

CALLS — 
Feb 

Mar 

Dee 

Jm 

pure 

Fab 

Mar 

8900 

0.08 

058 

1.12 

128 

478 

1.43 

157 

153 

8960 

472 

468 

490 

156 

059 

1.73 

125 

2.11 

9000 

051 

451 

472 

057 

128 

258 

227 

242 

EU m* taut 

cate 12758 PMa 12982. Pmfcus dVa open IK, OMi 272882 Pitta 2*147* 


■ NOTIONAL LONG TERM JAPANESE GOVT. BOND FUTURES 

qJFPq YlOOm lOOths of 100M 

Opan Ctoaa Changa Mgh Low Esl wol Opan bit 
Dec 10724 - - 10751 10728 1308 0 

Mar 10870 - - 10873 10659 80 0 

- UFFE nma stead on APT. AM Optn Maw tga. am tor i ten day. 


ULS. DOLLAR SIHUQHT8 

Abbay Nad Tnauy 8*2 03 1000 SB 

Atati Pnvhca 7% B6 TODO 9B% 

Aatria 8>2 00 400 KE% 

BmfcNad GortnSai 7 BO . 

Bar* rf Tulip ft 89. 

Belglun 5*2 C3 1000 

BTCE7%97 ISO 10ft 

BOataGaaOZI 150 ft 

Canada S SB 1000 Hft 

Cheung Kong fln 5% 96 500 88% 

O*iaft04 WOO 84 

OoundBaopa8n 
Coat Fonder ft 90 
Dtnmxk53|Sa 
East Japan Rainy ft 04 
H3C &*K 
BD&tX 
BB7l| 98 
380*4 97 


E»fen Bonk Japan 802 
Bqxxt Dev Cap 9^ 98 _ 
Meal M Mon 740 0* 
FUadAsr 

RsdUDkrOadi8 1 4.B8 

GenSaoCOpU 9% 98 
6WC8>eSB 
tad BiJ^oini 7% 87 
feftr Anw Dor 7% 96 
6% 23 


88*4 

«l 

toft 


1 UK GILTS PRICES 1 

Mat M IW BM Rka£+V- Hfil’^LoS 

Mote 

wd —lust- 
ra Rad Fitoa£+-sr- ngb la* 

Ham 

-VW— — 1994 — 

(1) RMat +w- Ngb ter 


TMaSpeimtf- 
12X7995. 


487 
1158 

&* 3K fiat ig»4E_ 104 

1«4PC18B5 1020 

1nninipciaB5ri— 125B 

Kpcisae 12JB 

1&PC 1990J* 1174 

eensitaciBoett iu< 

Can»eataBTOpo193B_ 324 
Ttt*sCw7pc1fi97tt-- ?.U 
-naeanupensm — 1ZC2 

M 1G%p 1887 1801 

1kmUuKl997H— U7 
501 5DC 1897 1253 

&4S 


TiWtTlipcnBBtt 754 

Tta»01riic189S-Bat$_ 7.13 

HpeUGB-1 1208 

TtellS^peWt; 1228 

EKfaltocim 1052 

Ttaai Kwc lOSBtt 228 



248 11 _ 
US 10SA 

BJSII^d 
1Z% 

a.74i ioan 
273 10ft 


RMtoi 

emuftpeis 

itmWtfelflBB 

Tnm6peiS09» l 

Onaaafan IDltpc 1998— 

TtawRDRBIDIM 

mta w 

(jipiii fytt 

■Ranispczno 

utaeaxn. 


850 112fi 
278 10W 


mas 
288 

200 

IS 122105409 


ie 


2001 

■2002-1 


HicCT W 

Mpearo 

T)MI11<tpc 2001-4. 


229 

291 

1123 

252 
7J9 

253 
249 
038 

1239 


273 9ft 
273 IO0U 
289 117B 
282 10U 
284 SO^td 
292 1(Mi| 
S5E Bft 
221 1064 
217 lift 



RokgvrpcwH-. 
1004 DM»nlMS>2PC3004_ 

1010 TMBtO^awti 

.52! •*ape2D06 

CsoeB 1 * PC20O5 

'SS* TNa*i2i|pe200S-« — 

rtucant* 

?oS * eS “ oa - a £b — 

3 Two IIVpc 2003-7 

jgp, Trass ZOK ft 

1104 13>a* 2004-8 

IIM 5 ! DWlOpeSOOBff 

1004 

nos 

ran 

Oft 

Oaar n BaaaYaa ta 

’3 Ttea8pe«09__ 

ttoA Tmaa6 1«pe2ffI0 

10TQ OwfljelnSOiltt — 
Haa*9pc20im 

Ttae ft^e 2006-12**.. 

UieaSK2013ti 

7\ga 200-13*4—— 
1118 Tttw*%i»0Df7t*— 

1054 6eh10PB 2015-17 

Mi 

104H 



851 

470 

9W 

+B 

IWfi 

91ff 

72Z 

855 

7«W 

+41 

984 

77H 

479 

866 

1028 

+*4 

IS® 

1MB 

474 

464 

m 

+14 

ift 

10ft 

761 

440 

734 

+43 

93% 

71L 

4tt 

858 

9ft 

+14 

1170 

92 

444 

85B 

BIB 

+14 

1U\ 

89ft 

4G9 

887 

101*i 

+1*i 

12Mi 

984 

430 

881 

ran 

+1H 

lift 

1SB* 


+4 20ft 1B7H 
+4 1134 1004 
+4 lift 16ft 
ft 17ft 1094 
— lift 1071, 
+4 loan 1054 
ft 1684 14ft 
ft 17ft 15ft 
ft 14ft 12ft 
ft 1574 13ft 
ft 162fi 12ft 
ft 1294 10ft 
ft 1285 10ft 
IMUIoneKUIOM 
and (Q 6K. 04 figures In parenthe se s Show RPI baw tar 
mdnkia Ba 8 mates pdor to tacua) and twira baan ad*jitte u 
mSsct rabaelng at RPI to 100 In FWaruary 1887. Commnkti 
tear 3545. RPI tor Faiauaiy 1BB4: 142.1 and far Stetontoar 
1894: 1455. 


2 I »c f 9D 179 352 1811, 

ZfaK-Htt PTJI 278 350 100 

ftWatS — (I95 lT) 350 19* 100 


Othor Fbcod Interoti 


_ 1984 __ 


+*2 1184 
— 1« 

iSf+sv. 

8J4 

- 45V 


6ft 

— mu 
+4 106ft 
mf, 
+K 1TJB 

^ WrtsiaS>slx# 

482 

807 

- 4ftal 

- Sft 


54H 

71 


850 

- 3th 


44% 



- mu 

+4 

3ft 

+% 12SB 

tfl« Ttee.3^ 

881 

- 2ft 

+4 

37* 


44B 

m 

5 ft 
33d 
284 

27« 


AdatOn 1D4ape2fl09— 

flrmi1itpeB7l2 

MtaBdOpB^pCIO 

RlC cap 1800 

13PCW-2 

HydDltadxxISpEZOII. 

btei1ftpc20Q6 

UMpoH3>2ia:feML 

LCC3*t‘20All— 

UiaeM)r11>29C20a7. 

Matte: ape's 1 

rtetaAnteftpemzT. 

44 UCL 2024 

IM fata SktoilB^ilc 2006 


U 

M 

Pitt £+ or- 

«d> 

Low 

938 

W8 

109ft 

+a isft 

1074 

imn 

472 

IIS 



1C 

ns 

88S 

m 

88 



lift 

Bft 

898 

— 

10ft 



iro*2 

9ft 

1284 

•m 

108 

„ ... 

nft 

108 

1MB 

1408 

140*1 

+18 1BBU 

1378 

1480 

— 

125 


14ft 

126 

959 

— 

3ft 


4ft 

331, 

938 

- 

32 

_ 

4ft 

2ft 

1028 

938 

mi. 

_ 

13ft 

lift 

4.44 

401 

6ft 


78 

Eft 

— 

467 

131V 

_ 

15ft 

12ft 

- 

455 

>29 


14ft 

12ft 

12.18 

- 

19ft 

— 

188*1 

Hft 



■h 

-h 

* 

-h 


-h 

-Je 


J. 

ft 


aaz 

755 
7 54 
752 

756 
243 

758 
210 
652 
aao 

OZ9 

7.18 

759 

758 
250 

757 
7.13 

757 

759 
7.70 

752 
234 
7.79 
834 
759 
750 

750 

758 

754 

7.16 
834 
218 

7.17 

214 

755 
950 
728 
855 
212 

751 
256 
210 
207 

753 
858 
778 

756 
751 
271 
7.10 
242 
1SS 
7m 

215 

754 
732 


Untod Ktagfcxn 7*i 97 _ 

5500 

Hft 

HI 


AM 

UoksMBBnkrifin7(Q- 

1000 

Bft 

Bft 

■^1 

411 

VfertJ Bank 015 

2000 

7ft 

20*2 

ft 

AM 

WaddBaBkft 03 

3000 

8ft 

Bft 

ft 

7M 

VtoddBBriiftQO 

1250 

10ft 

lift 

+V 

666 

SHB8S HUNG SIRNOHTS 





Asian Dn> Bonk 8 W — 

HO 

98 

8ft 


410 

Aosta ft 00 

WOO 

Bft 

95% 


&44 

Cttnd&npaftSB — 

250 

68V 

98 

ft 

5.18 

Dmtecft 99 

WOO 

Sft 

Oft 

ft 

534 

BBftOt 

300 

Hft 

H5 


413 

Bsc da Fiance 7*4 06 _ 

100 

10ft 

10ft 

ft 

632 

(Wand 7% 99 

300 

108*2 

H7*Z 

ft 

570 

HUnM Motor fin 8% 97 100 

105% 

10ft 


633 

tariand7*g00 - 

HO 

107 

Hft 


6.14 

Kobe ft 01 

240 

10ft 

10ft 

ft 

5l85 

CMsto ft CQ 

400 

«% 

10ft 

ft 

628 

CXabeo Hyde 5 03 ■ 

100 

83 

SB 


699 

WCF704 

460 

Hft 

1(7*2 

ft 

607 

WMdBa*503 

150 

Bft 

98 

ft 

5J70 

HMdBk*701 

COO 

Hft 

10ft 

ft 

579 

YEN SIRMGHTS 






Bdri»n5SB 

78000 

102 

102*4 


465 

FMorriftOS 

HOOOO 

50000 

10ft 

10ft 

10ft 

105 


LSI 

323 

Mar Anar Dw 7% 00 — 

30000 

lift 

113 


459 

fab ft oi 

_ 300000 

>1% 

«* *2 


5.11 

Japan DwBk59B 100000 

102V 

10ft 

ft 

446 

Japan Dor Bkft 01 120000 

10ft 

109% 


430 

MpponTriltaftSe — 

- 5DQ0Q 

Hft 

104% 


447 

Nontayft 07 

_150000 

10ft 

Hft 


368 

SNCFftOO 

anmn 

Hft 

110 


464 

Sptoft (S 

— 125000 

Hft' 

105% 


458 

flwadsi4%88 — — .... 

_ 158000 

ttft 

»1% 


480 

Won Back ft 02 

— 250000 

102V 

102% 

ft 

488 

OTHBt SIRNGHIS 






QtetamtLwftMlft. 

1000 

10ft 

Hft 


757 

KB Out tetattt ft 03 IFt _ 3000 

no 

HI 


649 

WOrU Bank 8 96 LR 

woo 

10ft 

U0% 


755 

ABNAnraft OOR 

1000 






ASenoe iotas Tft 97 E . 
BMWiL«>ft23S_ 

Dennwkft SBC 

BB10B7C. 


1ft WE. 


HSBC HoUtaga 1158 02 C . 

hafy tft 14 C 

Japai Dsv Bk7 DO £ 

Lend Sm ft 07 £ 

anteo ni| me. 


Fomgenft 03 £ — 
SaamDantlftnC — 
ItakycBtoFtamrll 01 £ . 
Mbey taitteO 96 NZS- 

TCNZ Ri ft 02 NZS 

QatS LOCK B 01 FFr. 


Bac da Ram ft 22 FR- . 
SNCFft 97FRr 


1000 

90% 

91 

ft 

BM 

-HO 

ws% 

108 

ft 

475 

_ 150 

87% 

87% 

+1% 

1060 

- 800 

93 

Bft 

+% 

898 

_ 637 

H3 

Hft 

ft 

445 

-too 

103*2 

103% 

ft 

862 

- 500 

103% 

Hft 

ft 

613 

_ 193 

UB% 

108 

ft 

1002 

_400 

105% 

W6% 

♦1% 

961 

-200 

91 

91% 

ft 

901 

_ 200 

80% 

97% 

+% 

993 

-HO 

HB% 

H7% 

ft 

063 

- 250 

95% 

98 

ft 

964 

-150 

107% 

H7% 

ft 

448 

-150 

107 

m% 

ft 

960 

- WO 

84% 

Bft 


428 

-75 

97% 

98% 

ft 

965 

7000 

87% 

87% 


439 

3000 

Bft 

96% 

ft 

410 

4000 

100% 

104% 

ft 

743 


FUM7M9 RATE NOTES 


Bate Ned Genwntan 7 03 R _ 1600 Oft 

NbetetatocalftaoCS 500 103*2 

Bd Canada 1ft 98 CO 150 lift 

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COMPANY NEWS: UK 


Turnround at Broadgate boosts Stanhope 


The position of Stanhope, the 
developer which is in refinancing 
talks with its banks, improved yester- 
day with the publication of figures 
which showed a healthy increase in 
the value of its main assets. 

Stanhope has been approached by a 
□amber of potential investors, includ- 
ing British Land, headed by Mr John 
Ritblat which bought a 30 per cent 
stake in February. 

Full-year results from Broadgate 
Properties, in which Stanhope has a 


SO per cent stake, showed that the 
valne of its five buildings in the 
Broadgate office complex increased 
by £46.7m, or 6 per cent, to £778m. 
daring the year to June 30. 

Hie valne of the Ludgate develop* 
meat, on the western edge of the City 
of London, increased by £74. 5m 
reflecting both higher property val- 
ues and additional development work 
carried ont during the year. Lndgate 
Is now valued at £224. 4m. 

With external debt falling from 


£799m to £788m, the valne of Broad- 
gate Properties to its shareholders 
increased to £232m (£148m). This is 
split between Stanhope and Bose- 
haugh, its partner wbich was put 
into receivership in 1992. Analysts 
estimated the figures would give 
Stanhope net assets of about £!0m at 
its year-end, against negative net 
assets of £l5.7m last year. 

Turnover fell from £87. Im to 
£69. lm. reflecting lower rental 
income following the sales of 175 


Bishopsgate and 100 Lndgate Hill, 
which raised £199m to reduce bank 
borrowings. 

Operating profit declined to £57.7m 
(£57 -2m) but after the release of £25m 
provisions to reflect the increased 
valne of Lndgate and lower financing 
costs, pre-tax profits were £28. 7m 
against losses of £72-5m. 

Despite additional lettings at both 
Broadgate and Lndgate, the company 
did not cover its cash financing costs 
from operational activities, the net 


cash inflow from operations for the 
year was £54.lm <£83m) against cash 
interest costs of £7L8m <£i 17.5m). 

Mr Paul Rivliu, finance director, 
said that while Broadgate now cov- 
ered its financing costs, rent-free 
periods for tenants at Lndgate meant 
interest was rolling up on some 
loans. 

The company has let 393.000 sq ft 
of office space since Jane 1993, leav- 
ing vacant only 81,000 sq ft at Broad- 
gate and 58,000 sq ft at Lndgate. 


Full-year results from Broadgate is now valued at £224.4m. £69. lm. reflecting lower rental did not cover its cash financing costs tag vacant only 81.000 sq ft at Broad- 

Properties, in which Stanhope has a With external debt falling from income following the sales of 175 from operational activities. The net gate and 58,000 sq ft at Lndgate. 

The negative aspect of trying to keep all the equity 

Stanhope needs a short-term financial fix to give its principal asset time to bear fruit, reports Simon London 


S tanhope's struggle for 
survival is perhaps the 
last great battle of tbe 
1980s' property boom. The com- 
pany, under its founder Mr 
Stuart Upton, was responsible 
for many of the decade's high- 
profile developments, includ- 
ing the 3.5m sq ft Broadgate 
office complex in the City of 
London. 

As Stanhope searches for 
ways of repaying the £l40m 
owed to Us 16 banks, its for- 
tunes are closely linked with 
those of Broadgate. The prized 
development is Stanhope's 
main asset, held through its 50 
per cent stake in Broadgate 
Properties, and the main rea- 
son why an outside investor 
would want to step in. 

As a working environment, 
there is no doubt that Broad- 
gate is an outstanding success. 
It has attracted 20,000 workers 
to an area of the City previ- 
ously considered a backwater. 

But as a financial structure, 
Broadgate already looks dated. 
It was funded almost exclu- 
sively with bank loans, using 
non -recourse financing tech- 
niques imported from the US 
by Mr Godfrey Bradman, chief 
executive of Rcsehaugh, which 
owned the other half of Broad- 
gate Properties until its receiv- 
ership in 1992. 

In a rising property market 
this style of finance was attrac- 
tive to developers. By keeping 
all the equity for themselves, 
they also hoped to collect as 
property values increased. 

Mr Bradman is reported to 
have said: “You can lose as 
much on a small development 
if It goes wrong as on a major 
project, but the upside is not 
nearly as exciting." 

Yet problems arose when 


property values started to fall 
Despite holding assets valued 
at over Elba, once debts were 
deducted, the value of Broad- 
gate to its shareholders fell to 
only £148m at June 30 1993. 

With few other assets and 
£140m debt of its own. Stan- 
hope showed negative net 
worth of £15. 7m at the same 
date. 

Yesterday's results from 
Broadgate Properties show 
that the position has improved. 
Stanhope should show positive 
net assets when its results for 
the year to the end of June are 
announced. 

Increasing property values 
also add weight to Mr Lipten's 
argument that it would be fool- 
ish to sell Broadgate into a ris- 
ing market 

A forecast commissioned by 
the company from Jones Lang 
Wootton, the surveyors, 
suggested that rents at Broad- 
gate could rise to £50 a square 
foot by June 1997, from per- 
haps £30 a square foot today. 

On this assumption, Broad- 
gate Properties' assets might 
be worth about £1.3bn in three 
years' time. If its debts 
remained at about the same 
level, its value to shareholders 
could quickly rise to £500m. 

Whilg some property profes- 
sionals regard this forecast as 
a little ambitious, most are pre- 
pared to concede that Jones 
Lang Wootton’s expectations 
for rental growth are not 
wildly aggressive. 

The shortage of prime qual- 
ity offices in core areas of the 
City of London means that 
space at Broadgate should 
command a pr emium price. 

In principle, Stanhope’s syn- 
dicate of 16 lending banks 
would probably agree that it 


The assets equation 


Debt £1 40m* 


Not assorts; ElOm* 


Not assets; negligible 
■WaffirffHouse . * 
Statfrop&lnterfoc. 

S&nbope Estates Managemewt . 



Stuart Upton 
chief executive 


Net assets: E232m Net assetac £10m* 
Broadgota - - Stacktay Park 58% 

Luxate' Euoftin 

•••••" London 


Net assets 
negligible 

Kings Cross 


Net swots: wan* Net assets: 
ChtewcfcParic negffetfate 

St Georges Court 


W ith the banking 
deadline looming, 
the outcome will be 
determined over the next few 
weeks. Stanhope's advisers 
still hope to find a way of res- 
cuing the company while at 
the same time buying the other 
50 per cent shareholding in 
Broadgate Properties from 
Rosehaugh's receiver. 

Such a deal would increase 
the value of the assets at a 
stroke, since the whole would 
be worth more than the sum of 
its parts. 

The point is not lost on the 
banks in Stanhope’s syndicate, 
which also made loans to Rose- 
haugh. Through the receiver 
they already own Rosehaugh's 
stake in Broadgate Properties. 
If Stanhope were to fail they 
would effectively have control 
of the development. 

The banks would rather 
avoid such an outcome. If Stan- 
hope can find a formula which 
offers them full repayment - 
or something close to it - there 
is every sign that the relatively 
small lending syndicate will be 
supportive 

For shareholders who backed 
Mr Lipton's vision in the 1980s, 
though, the choice is likely to 
be between accepting little or 
nothing. 


The Banks 


L_a 


Barclays Bank 
Credit Suisse 
Uoyds Bank 
Nippon Credit Bank 
Soctttt GArtdrate 
Bank Leu 


Rrat Austrian Bank 


Long-term Credit Bank of Japan 


Industrial Bank of Japan Mitsubishi Bank 


Sumitomo Bank 
Bank ol America 
DaHeN Kangyo 


Source: Company Accounts 

would be better to hold on to 
Broadgate. Bui while they are 
sympathetic towards Mr Lip- 
ton's position, their prime 
interest lies in having their 
loans repaid by the December 
16 deadline. 

Stanhope needs an equity 
injection to allow this to hap- 
pen, 

T he search for a partner 
willing to invest any- 
thing up to £l00m - cod- 
enamed Project Phoenix - 
started late last year. By Feb- 
ruary, Stanhope was close to 
agreeing terms with an east 
Asian investor, believed to be 
Singapore Land. The plan 
envisaged Singapore Land tak- 


ing a 30 per cent stake in Stan- 
hope through a £150m rights 
issue. 

Bankers close to the deal say 
there were even thoughts of 
buying the other 50 per cent of 
Broadgate Properties from 
Rosehaugh’s receiver. In which 
case the rights issue would 
have looked to raise anything 
up to £260m. 

The move in February by 
British Land, the property 
company run by Mr John Rit- 
blat, to buy 30 per cent of Stan- 
hope changed everything. The 
shares came to British i-and, 
via Bank of Nova Scotia, from 
Olympia & York, the failed 
Canadian developer responsi- 
ble for Canary Wharf which 


Sakura Bank 

Asahi Bank 

Bank of Tokyo 

"Analysts’ Estimates 

bought the stake in 1988. 

Stanhope waged a long but 
ultimately unsuccessful legaL 
battle to prevent British Land 
acquiring the shares. 

According to Mr Upton, the 
episode also scared off his 
white knight, which was not 
prepared to tangle with Mr Rit- 
blat. By the time the legal pro- 
ceedings finished in May, Proj- 
ect Phoenix was back to square 
one. 

In a statement earlier this 
month Stanhope said that it 
was talking to a number of 
interested parties, but that any 
offer was likely to made at less 
than the prevailing 26p share 
price. 

Among those rumoured to 


FINANCIAL TIMES FRIDAY OCTOBER 28 1994 

Allied to sell 
Dutch breweries 


have been in negotiations with 
Stanhope are Morgan Stanley 
aq d Goldman Sachs, which run 
substantial property funds, and 
Chelsfield, the property invest- 
ment and development com- 
pany run by Mr Elliott Bern- 
ard. 

Mr Ritblat, of course, still 
has a 30 per cent stake in Stan- 
hope and has made no secret of 
his desire to take control of 
Broadgate. 


By Roderick Oram, 

Consumer Industries Editor 

Allied Domecq, the UK drinks 
group, Is negotiating the sale 
of Its Dutch brewing subsid- 
iary, known for its Oranjeboom 
beer, to Interbrew of Belgium. 
A successful deal would mark 
a farther consolidation among 
European brewers. 

Interbrew, which brews 
Stella Artois, would become 
the second largest brewer in 
the Netherlands with almost 16 
per cent market share. Hein- 
eken has a 50 per cent shore 
and Grolsch has 14 per cent. 

Lnterbrew Is currently 
ranked fifth with 7 per cent, 
behind Allied Breweries 
Netherlands with just under 9 
per cent, according to C ana- 
dean, the drinks consultant 

“They will never beat Heln- 
eken in its home market, but 
being a stronger number two 
helps,” said one London ana- 
lyst. 

The deal, wbich the compa- 
nies hope to complete before 
the end of the year, could be 
worth about BFr4bn (£80 tn). 


analysts estimate. After the 
sale, Allied's sole brewing 
interest, once Its mainstay, 
would be Carlsberg-Tetley, its 
UK Joint venture with Carls- 
berg, the Danish brewer. 

Allied Is concentrating on 
spirits and wines. This summer 
it put its extensive food and 
beverage businesses up for 
sale. Analysts estimate they 
could be worth up to £900m. 

Dalgety. the UK food and 
agribusiness group, confirmed 
yesterday that It was inter- 
ested in DCA Food Industries, 
Allied's US food ingredients 
subsidiary, which could fetch 
between £200m and £300ra. 
Heinz of the US and Grand 
Metropolitan of the UK are 
thought to be among other 
interested parties. 

Allied moved into Dutch 
brewing In the late 1960s.Its 
main brewery now is in Breda, 
where a relatively modern 
plant produces lm barrels 
(l.63m hectolitres) of beer a 
year. It also has a small spe- 
cialist brewery in Arcen. The 
operations generated trading 
profits of about £7m in 1993-94. 


Derivatives broking 
takes G&N to £14m 


By Norma Cohen, 

Investments Correspondent 

Gerrard & National Holdings, 
the financial group that owns a 
discount house, yesterday dem- 
onstrated the success of Its 
diversification into stockbrok- 
ing and derivatives with a 38 
per cent rise in pre-tax profits 
from £10.4m to £14.4 m for the 
six months to September 30. 

The rise comes despite diffi- 
cult trading conditions in fixed 
interest markets, which form 
the core of the traditional dis- 
count house activities. 

Earnings per share were 
16£p. against 14.6p, reflecting 
the equity increase following 
the May acquisition of GNI 
Holdings. 

The company also 
announced the first increase in 
its interim dividend ~ from 6p 
to 8p - since 1990. There were 
no implications for the size of 
the final dividend, it said. 

G&N's shares rose 16p to 
close at 454p, with analysts 


saying the profits were some- 
what better than expected. 

For the first time, the com- 
pany has produced its profits 
on a segmented basis and ana- 
lysts said they had not expec- 
ted the sharp increase from the 
derivatives broking and fund 
management division. 

Pre-tax profits from the oper- 
ation jumped from £4. 44m to 
£10.6m. 

“This is a very major and 
very successful diversification, 
particularly into derivatives 
broking,” said Mr Philip Gibbs 
at Barclays de Zoete Wedd. 

The sharp rise reflects 
increased turnover on domes- 
tic and foreign futures 
exchanges, as well as the 
relatively high level of 
performance-related fees that 
derivatives fund managers 
such as GNI are able to 
achieve. 

However. G&N's discount 
house activities, where it deals 
as principal, fell 69 per cent 
from £4.09m to £l.Z7m. 




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IF the 


rainforests arc 


being destroyed at 


the rate of thousands of 


trees a minute, how can planting ^ 


just a handful of seedlings make a difference? 

A WWF - World Wide Fund For Nature tree 
nursery addresses sonic of the problems facing people 
that can force them to chop down trees. 

Where hunger or poverty is the underlying cause 
of deforestation, wc can provide fruit trees. 

The villagers of Mugunga, Zaire, for example, cat 
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fast- growing varieties to form a renewable fuel source. 

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two hundred years to mature. The Markhamia lotea 
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harvested within five or six years of planting. 

Where trees arc chopped down to be used for 
construction, as in Panama and Pakistan, wc supply 
orher species that arc fast-growing and easily replaced. 

These tree nurseries are just part of the work we 
do with the people of the tropical forests. 

WWF sponsors students from developing countries 
on an agroforestry course at UPAZ University in 
Costa Rica, where WWF provides technical advice on 
growing vegetable and grain crops. 



’irjgg^ 

j yp 




Unless 


help is given. 


soil is exhausted 


very quickly by “slash 


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to be cleared every two or three yean. 

This unnecessary destruction can be prevented by 
combining modern techniques with traditional 
practices so that the same plot of land can .be used to 
produce crops over and over again. 

In La Planada, Colombia, our experimental form 
demonstrates how these techniques con be used to 
grow a family’s food on a small four hectare plot. 
(Instead of clearing the usual fen hectares of forest .) 

WWF ticldworkcrs arc now involved in over 100 
tropical forest projects in 45 countries around the world. 

The idea behind ail of this work is that the use of 
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WWF is calling for the rate of deforestation in the 
tropics to be halved by 1995, and for there to be no 
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Write to the Membership Officer at the address 
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this generation does not continue to steal nature's 
capital from the next, ft could be with a donation, 
or, appropriately enough, a legacy. 


WWF VltoridWida Fund For Nature 

(formerly W.irU W&Jhfr Fund) 


Inteniation.il SecreLiri.it, 11% Gland, Switzerland. 


FOR THE SAKE OF THE CHILDREN 

WE GAVE THEM A NURSERY. 


-s,„. 




















FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


29 


■At 


COMPANY NEWS: UK 


Country Casuals 
drops £1.49m 
into the red 


Pressac funds buy with £10m rights 


By Andrew Baxter 

Pressac, the Nottingham-based 
manufacturer of automotive, 
tde canimmfcaticns and light- 
ing products, is buying McGa- 
vlgans, another big UK sup- 
plier of automotive 
components, for £9.53m. 

The acquisition is being 
funded with a i-for-2 rights 
issue of up to 12.3m new 
shares, priced at 85p apiece, to 
raise £9.7Stn_ Pressac shares 
fell lOp to loop fonowing the 

annmwii'ffTnpmt. 

The takeover of privately- 
held. Glasgow-based McGavi- 

pm« )s an iTii p fi rharit step for 


Pressac in broadening its com- 
pnntmfc range as the car indus- 
try moves to reduce its sup- 
plier base. 

McGavigans, established in 
I860, makes printed displays 
for dashboards, membrane 
switches for steering wheel 
horn pads and moulded 
three-dimensional displays. 
Sales and pretax profits were 
£74m and £937,000 respectively 
in the six months to August 3L 

"It’s an obvious fit,” said Mr 
Geoff White, Pressac’s chief 
executive. For trample, McGa- 
vigans makes the front panels 
for dashboard instrument clus- 
ters, while Pressac makes tin 


printed circuit board that goes 

mitaniMth. 

Mr White said Pressac would 
retain McGavigans’ Kirkintil- 
loch factory in Glasgow but 
may begin manufacturing 
some of lis products in the US, 
where the Scottish company's 
presence is relatively weak. 

Pressac also reported a 13 
per cent rise In pre-tax profits 
from £1.95111 to caaim for thft 
year ended July 81, and a 
raised final dividend of 248p to 
maim a total for th e year of 
243p CSL57p). 

It believes the acquisition of 
McGavigans will have a benefi- 
cial impact on earnings per 


share in the current year to 
July 1995. Earnings per share 
rose from 4.86p to S.6p in 
199391 Overall turnover rose 
15 per cent to £37 Am. 

The automotive business was 
the best performer, with turn- 
over up 33 per cent to £l&3m, 
reflecting improved market 
share and the Introduction of 
new products, notably a heated 
mirror circuit board. 

On trading prospects, Mr 
Whits said the first quarter of 
the current year had started 
extremely well, especially in 
the automotive business. Ana- 
lysts forecast pre-tax profits 
this year of about £4.4m. 


Tiphook chief gains time 


By Rtahani Woffle 

Shares in Country Casuals 
yesterday fell 6p to 82p - a 
record low since its 1992 flota- 
tion - after the women’s wear 
group reported interim pre-tax 
losses of £L49m. 

The group blamed the losses 
on the launch, of Elvi, its larger 
women’s brand, the expan- 
sion of Koto, its fashion chain 
for younger women. 

The results were the first 
since the d ep art ur e last month 
of Mr John Shannon, chief 
executive and nhalrman. Mr 
Shannon resigned the day after 
a profits warning led to the 
group losing more than a fifth 
of its market value. 

The deficit for the six 
months to July 23 compared 
with profits of £117,000 last 
time and w.K9in for the full 
year. This was despite a 20 per 
cent advance in turnover to 
£l&9m (£164m). 

Mr Mark Bunco, chief execu- 
tive, said: “We were too ambi- 
tious about the size and speed 
of the shop opening pro- 
gramme which, with our pru- 
dent attitude to pr o per ty risks, 
led to significant delays." 

Elvi reported an operating 
loss of £L59m, with the major- 


ity of its 52 stores opening in 
the second quarter rather than 
the first as planned. Mr Bunce 
said there had been “too short 
time a period in order to 
gather enongh data to project 
future sales growth." 

Koto, the repackaged chain 
of 11 stores which were first 
opened under the Wild Women 
name, suffered from leasing 
problems and incurred an oper- 
ating loss of £605400 (£235400). 
The company is now consider- 
ing its future. 

However, the core Country 
rannmfa brand oper- 

ating profits from £195,000 to 
£323400. 

Mr Tom Adam, fthairrrmTi, 
said that like-for-likB aalpq in 
the 186 shops rose 7 per cent in. 

♦ho first two TnnTithg offheno- 
nnrl half 

Lerose, the manufacturing 
division, increased operating 
profits fivefold to £261,000 
(£49.000) after attracting more 

Losses per share were 4.97p, 
a gainst earnings of (Ulp. The 
interim dividend, however, is 
maintained at L41p. 

• COMMENT 

(Vnrntr y flagnaia has rnirtor par. 

formed the sector for almost 18 



Tom Adam: core brand made 
strong start to second half 


months, in stark contrast to 
Moss Bros, the men’s wear 
retailer, which reported on 
Monday. While Country Casu- 
als has been forced to discount 
its EM and Koto stock, Moss 
Bros protected its margins and 
pursued a cautious expansion 
strategy. Pre-tax profit fore- 
casts for the full year range 
widely between £500,000 and 
♦bn house broker's { ««», the 
latter putting the group on a 
p/e of about 15 at yesterday's 
close of 82p. The risk seems 
more an the down side. 


Price 

Waterhouse 
settles over 
Carrian 

By Ralph AtidnS 

Price Waterhouse Hong Kong 
announced yesterday it had 
reached an out-of-court settle- 
ment with the liquidator of 
Carrian Tmim J mn#, -the con- 
glomerate placed in liquida- 
tion in October 1983 with 
debts of HKHObn (£792.7m). 

The accountancy firm was 
accused of professional negli- 
gence in failing to expose 
fraud within the group and 
was being sued for an esti- 
mated HK$2bn. 

The case, brought by liqui- 
dator Ernst & Young Hong 
Kong, had been expected to 
last for at least nine months. 
Both have A greed tfmt 

ftiimri»i details of the out-of- 
court settlement should 
remain 

fix a joint statement the two 
sides said: “In agreeing the 
settlement Price Waterhouse 
denies any liability. However, 
in cases of this complexity it is 
often in the inte re sts of both 
parties to avoid the costs of 
p ro tracted litigation.” 

The collapse iff Carrian, 
iff Wnwg Kong’s most promi- 
nent com panie s, was the sub- 
ject of a HKtlOOm investiga- 
tion by the Hong Kong 
government 


By Christopher Price 

Mr Robert Montague, chief 
executive of Tiphook, the con- 
tainer leasing group, y e s te rday 
staved off personal bankruptcy 
proceedings by winning a 28- 
day adjournment to *ha pretim- 
inary hearing due to begin 
today. 

Royal Bank of Scotland, 
which served a bankruptcy 
petition on Mr Montague last 
month, an debts totalling 
ggRiWj confirmed that bis solic- 
itors “bad made representa- 
tions to the court and that an 
adjournment haH been agreed 
while negotiations continue". 

Mr Montague h»« personal 


debts put at more than tanw, 
some of which are secured on 
his 1400-acre estate in Posey, 
Oxfordshire, and others on a 
139ft luxury yacht 

There had been speculation 
prior to yesterday's move that 
Mr Montague would seek an 
individual voluntary agree- 
ment, a move which would 
require +hft rq grftftwiant r»f Himtu 
quarters iff his creditors. Prom- 
inent among these are Bar- 
clays and Commerzbank, the 
German hrmHng group. 

An IVA would involve Mr 
Montague agreeing a repay- 
ment programme with his 
creditors, a move which would 
probably realise more tfwn if 


he were forced into bank- 
ruptcy. 

However, the situation is 
complicated by the question of 
which debts are secured on 
particular assets. This has so 
for divided Mr Montague’s 
creditors. 

Royal Bank iff Scotland said 
yesterday that It had received 
no notification f ro m Mr Mon- 
tague that he was seeking an 
IVA, although “the adjourn- 
ment period would allow time 
for further consultations 
between the parties." 

It is understood that Mr 
Montague will return to court 
to seek an IVA at the and of 
the adjournment period. 


Talks over BS 
expected today 

Talks are expected today in an 
attempt to resolve the uncer- 
tainty over the management of 
BS Group, the property and 
leisure company, writes 
Roland Adburgharo. 

Scotts Holdings, a Singa- 
pore-based property group, has 
agreed to buy a 26.97 per cent 
stake from three directors, all 
members of the Kerman fam- 
ily, for £3.1m. As part of the 
agreement, Scotts seeks to 
replace the Hermans on the 
hoard. 

Sir lan Rankin, BS chair- 
man, opposed the sale of the 
entire Kerman stake to Scotts 
and there Is speculation that 
he might he asked to resign. 


Menvier-Swain signals 
interest in Scantronic 


By Richard WoMa 
Menvier-Swain Group, the 

MHipyganry ti ghtiy)g otiH alaritig 

manufacturer, yesterday sig- 
nalled its interest in bidding 
for Scantronic Holdings, a com- 
petitor. 

Menvier-Swain purchased 
550.000 ordinary shares in 
Scantronic, raising its stake to 
L64n shares, or 4.48 per «mt 
of the security components 
company. 

Mr Roger Fletcher, chief 
executive, said: “Menvier- 
Swain has fatm this stake in 
good faith to demonstrate our 
gpmrinp inter est as a potential 
bidder for Scantronic. 

“At present wa are seeking a 
serious dialogue with Scan- 
tronic's board and we believe 
that both sets iff shareholders 
would welcome such a dia- 
logue.'' 

Scantronic Is hoping to raise 


£24m via borrowings and a 
placing and open offer of 16.1m 
new shares. Last week it fore- 
cast pre-tax losses of about 
£2.4m for the half-year to Sep- 
tember 30, against £1.4m prof- 
its previously. 

The company has been sad- 
dled with increasing debt from 

ar qniaWnnft. 

At the end of June it had 

gll .am of debt, A garngt fflj a 

in March 1993. Scantronic 
armnrmpftri the resignation of 
Mr Ray Dias, finance director, 
the following wirmth. 

The directors do not expect 
to make any dividend pay- 
ments, including preference 
payments, this year. The 
shares rose 2V4p to 20p yester- 
day. 

Menvier-Swain increased 
pre-tax profits by 23 per cent to 
£9.36m in the year to April, on 
sales of £70.3m. Its shares 
closed down 2p at 260p. 


CSI package expected 


By James Whittington 

Cannon Street Investments, 
the mini-conglomerate, Is 
expected to announce next 
week details of a restructuring 

panfeagw and an acquisition. 

The package is aimed at cut- 
ting debt and will include the 
restructuring of £25.7m of con- 
vertible preference shares. The 
planned acquisition would 
strengthen the core electronics 
business. 

1 he shares fsQ yesterday 
to 11 ftp. Earlier this month 


they declined lip to 15Vlp in 
one day when the company 
faflpri to announce the expec- 
ted package and reported lower 
sales and operating profit 

Bank of Scotland holds 98 
per cent of CSTs preference 
stock. Outstanding preference 
dividends amount to £4.4Bm. 

'Hie company plans to focus 
on its electronics division, 
which contributed £2.75m to 
reduced trading profit from 
continuing operations of 
£1.33m (£2 .88m) in the first 
halt 


Boilers in talks on rights issne 


Sailers, the giftware and 
mRftia gro u p, has announced it 
!s holding discussions on a 
rights issue to raise about 
il.3m, aimed at bringing in 
institutional investors and 


eliminating outstanding debt 
The group has undergone a 
substantial capital reorganisa- 
tion and debt conversion and 

annmmiBTnwit on the rights 

issue is expected soon. 


DIVIDENDS ANNOUNCED 



Currant 

payment 

Data of 
payment 

Correa - 
porafofl 
dividend 

Total 

for 

year 

Total 

last 

year 

Broadcasts § Int 

05 

Dec 22 

nos 

- 

1 

Country Casuals Int 

1.41 

Dec 15 

1.41 

- 

44 

Remine Japans— ... fln 

nH 

- 

045 

m 

045 

Garrard National tnt 

at 

Dec 15 

6 

- 

22 

l&S UK Smelter kit 

i 

Jen 6 

1 

- 

2JJ 


025 

Jan 6 

3 

025 

5 

Owes a« frw Tat ftn 

2.46 

Dec 19 

2J3 

as 

3.15 


2.08 

Dec 16 

1.82 

2.83 

2J>7 

Scot Mortgage -.-.—int 

1.4 

Dec 9 

1-35 

- 

4.1 

SNtoh int 

1 

Dec 2 

1 

- 

05 


Mdonds shown pence par aha* net except where otherwise stated. tOn 


capital 


pence 

SU3M 


stock- 


GOLDSTAR CO., LTD. 
U.S. $30.000,000 
Float ing Rate Notes Due 2000 

Unconditionally and irrevocably guaranteed by 

LUCKY, LTD. 

♦ 

Interest Rate: 6Vi% pa. 

Interest Period: , 

31st October, 1994 to 28th April, 1995 

♦ 

Interest Amount per US. $10,000 
Note due 28th April. 1995 
US. $310.76 

♦ 

Interest Amount per US. $100,000 
Note due 28ui April, 1995 
US. $3,107.64 

♦ 

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Baring Brothers & Co., Limited • 



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30 


FINANCIAL TIMES 


FRIDAY OCTOBER 2S 19*4 


COMPANY NEWS: UK 


TLG valued at £205m 
by float price of 115p 


By Christopher Price 

TLG, the holding company for 
Thom Ligh ting Group, is val- 
ued at £204 An at the flotation 
price of lisp, announced yes- 
terday. About £77m will be 
raised for the company. 

As with several recent 
issues, TLG's value is at the 
lower end of the company’s 
expectations at the time of its 
pathfinder prospectus two 
weeks ago. 

Institutional investors who 
had been approached about 
investing in the company 
suggested that the shares had 
originally been oEfered at 
nearer I25p. 

Mr Hamtah Bryce, executive 
rhairmaT^ said yesterday: “The 
pricing is realistic given insti- 
tutional sentiment and the 
market conditions." 

He added that the target for 
the amount of new money 
raised had been reached, the 
bulk of which would be used to 
repair the group's balance 
sheet 

Gearing of S3 per cent will 
drop to 23.6 per cent following 
the float. 

The Dotation involves the 
placing and public offer of 
7&3m shares, raising a total of 
£90m. Of this, £10m goes to 
Investcorp. the Bahrain-based 
investment group, and Thom 
EMI, which sold TLG to the 
management three years ago. 
Investcorp will stQl have a 44.8 
per cent stake, and Thom 6.5 
per cent. 

None of the management is 
selling shares, leaving its inter- 
est at 7.3 per cent 
Mr Bryce said the company 
would be pursuing growth 

Scottish 
Mortgage net 
asset value dips 

By Bethan Hutton 

Net asset value per share at 
Scottish Mortgage & Trust, 
managed by BaUlie Gifford, 
fen by 3.8 per cent to 245.6p 
during the six months to Sep- 
tember 30. 

Over the same period, the 
FT-SE-A All-Share Index fell ' 
3.3 per cent and the World 
Index fell 1.6 per cent The 
March 31 net asset value was 
restated at 255.3p - Z2p lower 
- in line with FES 4. 

Total assets grew from I 
£1.04hn to £ 1.081m, bnt bor- 
rowings also increased. i 
Earnings rose 13 per cent 
from 2.66p to 3p per share; the i 
Interim dividend is 1.4p, up 3.7 
per cent from the previous 
year. The board said the full- 
year dividend was likely to be 
“modestly up in real terms*'. 

The trust invests interna- 
tionally, with a UK bias, and 
remains overweight in conti- 
nental Europe and the smaller 
Pacific markets compared with 
the US and Japan, Its gilt port- 
folio has been increased from 
£57m to £126m. 



{famish Bryce (left) wfth Malcolm Robertson, finance director: 
hope the group will expand both organically and by acquisition 


through both organic and 
acquisitive means. 

“There are plenty of opportu- 
nities in both areas and our 
cash position means we are 
well placed." he said. In partic- 
ular, east Asia and Germany 
were two of the areas which 
were attracting the group’s 
attention. 

For the five months to the 
end of August, TLG achieved 
operating profits of £6.Im com- 
pared with £2.6m. Sales in the 
period were £136.5m against 
2131.3m- 

Although the directors are 
forsaking any share sales, the 
senior management team, 
numbering 16. are to receive a 
one-off bonus payment of 
£750.000. This will be taken as 
an exceptional charge for the 
year to nest March. 

Trading in the shares is due 


to start on November 10. 

• COMMENT 

Although institutional frosti- 
ness to new issues may have 
led TLG to lower Its sights, 
this may not be a bad thing. 
With the group likely to turn 
in fUH-year pre-tar profits in 
excess of £20m, the prospective 
p/e comes in at 12£ times. This 
is well below the likes of Men- 
vier-Swain, which has a decent 
track record, on a prospective 
17.5 times and the electrical 
and electronic sector’s 16.2. 
TLG must now earn a better 
rating. A fragmented European 
lighting market gives plenty of 
potential for expansion, while 
the group has an established 
product range, a committed 
management and a solid bal- 
ance sheet, giving it longer- 
term potential. 


Medeva wins patent 
case against Biogen 


By Tim Burt 

Medeva, the pharmaceutical 
company, yesterday scored an 
important legal victory against 
Biogen, its US rival, over the 
right to develop a hepatitis B 
vaccine in Britain. 

Its shares climbed Sp to 174p 
after the Court of Appeal in 
London overturned an earlier 
High Court ruling that Medeva 
had infringed Biogen’s patents. 

The move, enabling the com- 
pany to develop and manufac- 
ture the treatment in the UK - 
a market worth an estimated 
£12m a year - could prompt 
challenges against Biogen in 
other in European countries. 

Welcoming the court deci- 
sion, Mr Bill Bogie, Medeva 
chief executive, said: “They not 
only threw out the previous 
ruling but derided the Biogen 
patent was invalid. Thai opens 
a number of commercial and 
legal opportunities for us." 

A bid by Medeva to develop 
and sell its vaccine in markets 
such as Germany and France, 
however, could prove difficult 


following a European Patent 
Office's decision in July to 
uphold Biogen's hepatitis B 
patent. 

That meant Medeva had to 
persuade the courts to revoke 
the patent in each market 
where it wanted a presence. 

Yesterday’s court ruling sig- 
nalled Medeva’s first success- 
ful challenge against Biogen. 

"It's very exciting,” said Mr 
Bogie “It allows us to develop 
the vaccine here in the UK and 
export it to markets where Bio- 
gen’s patent does not apply, 
such as the Far East” 

Such opportunities could 
give Medeva a sizeable share of 
a market with an estimated 
global value of £500m a year. 

Biogen, meanwhile, said it 
was considering its options and 
did not rule out taking the 
legal action further. 

“This is of no material finan- 
cial impact,” said Ms Amy Hed- 
ison, head of investor relations 
at Biogen. “But we will vigor- 
ously defend our patent in any 
country where Medeva chal- 
lenges it” 






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European 
Court rules 
against 
Ladbroke 


By Michael SfcapMoor, Leisure 
Ind u strie s Correspondent 

The European Court in 
Luxembourg yesterday threw 
out an attempt by Ladbroke to 
break the French state-owned 
betting monopoly, the Pari 

Mutuel Urbain. 

In the first of several cases 
It has brought to the European 
Court, Ladbroke argued that 
the PMtFs monopoly restricted 
competition and was contrary 
to the Treaty of Rome. 

The hotels, betting and 
retail group argued that the 
European Commission had a 
duty to take up its complaint. 
The European Court of First 
Instance decided the Commis- 
sion was under no duty to act 
because the treaty's competi- 
tion provisions did not apply 
to betting and ga rro^g - 

Ladbroke said yesterday 
that the PMC’s monopoly over 
French raring made the UK 
group's betting operations in 
other European countries less 
competitive. 

Ladbroke has 6Q0 betting 
shops in Belgium, where it 
dal ms to be the biggest opera- 
tor. While Ladbroke shows 
Belgian and UK raring in the 
shops, the PMU prevents It 
from showing French races, 
which wonid be a popular 
attraction. Ladbroke’s compet- 
itor. the Belgian PMU, is 
allowed to show French rac- 
ing, Ladbroke said. 

The French monopoly also 
forced Ladbroke to close its 
only German betting shop last 
year. The shop was in the east- 
ern sector of Berlin. Although 
it showed German and UK rac- 
ing, Ladbroke said it needed to 
show French raring to survive. 

Had the shop been in the 
western sector of Berlin it 
wonid have been able to show 
French races. This was 
because the PMU had con- 
cluded an agreement with a 
West German agent in the 
days when the dty was still 
divided. 

Ladbroke said it would have 
been able to negotiate an 
agreement with the agent, but 
the agency agreement did not 
extend to the eastern sector of 
Berlin. 

Ladbroke said it had 
approached the PMU to grant 
it rights to French racing In 
east Berlin, bnt this had been 
refused. 

The group said it could 
appeal against the derision, 
hut had not yet decided 
whether it would do so. It said 
its other European Court cases 
were stffl awaiting a derision. 
These include a hid to increase 
competition in the Belgian 
market 


Broadcastle 
hit by 
exceptional 

Broadcastle, the USM-quoted 
financial services group, 
reported a fall in pre-tax profits 
from £224,000 to £121,000 for 
the six months to eod-June. 

The decline, the company 
said, was the result of reduced 
Interest receivable and an 
exceptional charge of £152,000 
related to its discontinued 
recruitment business. At the 
operating level profits were up 
22 per cent from £224,000 to 
£273,000. 

Earnings came out at 0£9p 
(L22p) per share; the interim 
dividend is doubled to 0.5p. 

The company also 
announced proposals to raise 
some £L9m before expenses via 
a placing and open offer of 
7.97m new shares at 24p on a 
l-fbr-4 basis, and a further £2m 
by way of a preference Issue of 
2m shares at Si apiece. 

Broadcastle intends to apply 
to move to a full listing. 

Clyde Petroleum 

Clyde Petroleum, in conjunc- 
tion With Dyas, Is to acquire 
Netherlands offshore produc- 
tion and exploration interests 
from Mobil Producing Nether- 
lands. The net cost to Clyde for 
Its share will be about SlOm 
(£8.1m) and will be funded 
from existing resources. 

The acquisition consists of 
producing Interests in blocks 
P/6 and P/12, and exploration 
interests in blocks P/4, P/Ba 
and P/9a, b and c. Clyde wQl 
take over Mobil's operatorehlp 
of these licences. 

Archer 

Archor announced yesterday 
that its planned acquisition of 
Co x Group, a rival agency in 
the London Insurance market, 
had been delayed. 

Archer said in July that it 
would finance the deal, which 
It expected conclude this 
month, by Issuing approxi- 
mately l,8m new shares to Cox 
shareholders. But yesterday it 
said tho process of due dili- 
gence had taken longer than 


US spur puts Siebe in full control 

Andrew Bolger looks at a £2.2bn group with a low public profile 


S iebe, the International 
controls group, is now 
one of the UK’s largest 
engineering companies, with a 
market capitalisation of £2.%a 
- bigger than better known 
names such as Rolls-Royce and 
British Aerospace. 

One reason for the compa- 
ny’s relatively low public pro- 
file is that almost all of Its 
products are used within 
industry or as components for 
other manufacturers* goods. 

Siebe’s output ranges from 
multi-million pound computer- 
ised process control systems, 
which manage petrochemical 
plants, to small, mass-produced 
components sold for less than 
£1 each. 

Another factor is that more 
than 90 per cent of group sales 
are made outside the UK. with 
nearly half in the US. 

Mr Allen Yurko, the 43-year- 
old American who became 
chief executive in January, 
said North American 
operations alone would cur- 
rently be number 233 in the 
Fortune 500 ranking of US 
companies. 

The Windsor-based company 
has started to publicise its 
name and activities through a 
press advertising campaign in 
the UK and the US. British 
journalists recently toured 
group factories near Chicago 
and Boston. 

The main exhibit was Fox- 
boro, the company bought for 
$650m (£41 lm) in 1990 which is 
now the star of the controls 
division. Named after the small 
Massachusetts town dose to 
Boston where it is based. Fox- 
boro makes Intelligent Auto- 
mation (I/A) systems, which 
have been gaining market 
share from larger US rivals in 
process control, such as Emer- 
son Electric and Honeywell. 

Foxboro has recently won a 
string of international orders, 
including an £llm contract to 
supply its I/A control system 
for a petrochemical complex 
in Ge rmany - the first green- 
field refinery to be built 
in Europe for 15 years. 


Stab* 

Share price rotath* to the 
FT-SE-A All-Share Index 

20 — 


160 

160 -.1 



1990 91 92 83 M 

Sazce FT GraffttB 

The Tnajn Foxboro plant is 
controlled by one of its own 1/ 
A systems and is completely 
computerised - a paperless 
system monitors, stories, work- 
flow and product certification. 
Direct labour costs have been 
reduced to 1 per cent of 
sales, and sales per employee 
exceed $600,000. This compares 
with a group average of 
£62£00. 

The acquisition of Foxboro 
has proved the deal of a life- 
time for Mr Barrie Stephens, 
chairman. The 66-year-old 
Welshman joined the company 
31 years ago and until the 
beginning of this year com- 
bined the role of group chair- 
man and chief executive 

The City of London was ini- 
tially hostile to the deal, it 
feared that Siebe, which bad 
expanded aggressively during 
toe eighties through a flood of 
rights issues, had over-reached 
itself by gearing up to take 
over a family-controlled com- 
pany in the US - the graveyard 
of so many British companies. 

What Mr Stephens realised 
was that Foxboro had devel- 
oped a good product - its I/A 
system - but was struggling 
under a bloated cost structure. 
Siebe, which has always had 
an aggressive record of cutting 
costs, found plenty of scope in 
an operation which employed 
ISO people in its public rela- 
tions department - a function 
now fulfilled by three. 


Allen Yurko: Foxboro was 
‘profit waiting to happen’ 

Mr Yurko. part of the acqui- 
sition team who looked over 
Foxboro said it was “a profit 
waiting to happen. Manage- 
ment was so sleepy. Gross mar- 
gins were running at over 45 
per cent, but by toe time you 
got down to toe bottom fine it 
was just breaking even." 

With the help of Foxboro, 
Siebe's controls division 
achieved sales of £646m in the 
year to April - a 22 per cent 
rise and accounting for 35 per 
cent of group sales. In recent 
years it has cut sales order 
lead times from several 
months to several weeks and 
improved production quality 
tenfold. 


A lthough investment 
analysts and journal- 
ists are intrigued by 
what Mr Yurko calls "the siz- 
zle” of the Foxboro operation, 
the chief executive regrets that 
this focus tends to overshadow 
Siebe's other activities - par- 
ticularly its temperature and 
appliance controls division, 
which contributes 38 per cent 
of group sales. 

A more typical Siebe opera- 
tion is the Paragon factory, 
which is situated north of Chi- 
cago on toe western shore of 
Tjticft Michig an 
Paragon, which was acquired 
in 1989. is a leading supplier of 
refrigeration and other appli- 
ance controls. Although it is 
moving away from electro-me- 


chanical components towards 
electronic systems, it still car- 
ries out a wide variety of 
operations in. this plant, includ- 
ing old-fashioned metal-bash- 
ing and paint-spraying. Some 
of the oldest products still in 
production - such as mechani- 
cal timers - have changed lit- 
tle In 40 years. 

It Is, however, the trend 
towards electronic controls 
which offers the group its 
greatest sales opportunity - 
both in the US and overseas. 

Paragon is a leading supplier 
of automatic defrost controls 
on fridges, which arc nearly 
universal in toe US but which 
feature in only " per cent or 
European fridges. 

Siebe's centre of excellence 
in electronics is the Simicon 
plant located on the other side 
of Lake Michigan, near Grand 
Rapids. 

Simicon, part of the Robert- 
shaw controls company, is 
located in a purpose-built fac- 
tory in which $7m has been 
invested. The plant makes elec- 
tronic controls for a variety of 
domestic appliance - particu- 
larly cookers. The company 
has recently completed con- 
trols which allow McDonald's 
to programme its ovens by 
computer. 

Each of these plants must, 
like all of its 133 manufactur- 
ing operations around the 
world, contribute to Siebe’s 
ambitious growth and produc- 
tivity plans. These include 
annual targets of a 5 per cent 
cost reduction, 10 per cent 
sales growth, 15 per cent 
increase in pre-tax profits and 
20 per cent improvement in 
cashflow. 

Mr Yurko said last week in 
Boston that he was still com- 
fortable about achieving those 
targets. The recent concerns 
about pressures on manufac- 
turers' profit margins had been 
overdone. He said: “We work 
in industries which are stable 
and well run, and which 
should enable us to make an 
adequate return on our capi- 
tal." 


APV issues statement to stabilise shares 


By Andrew Baxter 

APV, the producer of food manufacturing 
equipment, responded yesterday to the 
recent volatility in its share price by rei- 
terating that a restructuring of the group 
was bring planned. 

In an unusual move, APV issued a short 
statement that gave no new information 
about the company or its financial posi- 
tion. “It is just intended to pacify the mar- 
ket and calm things down," APV said. 

The company had said last month, when 
It announced interim results, that an 
unspecified charge would be taken in the 
second half to cover further restructuring 


in its liquid foods division. 

The planned restructuring - for which 
analysts' estimates range from £10m to 
£40m - has heightened City nervousness 
about APV and turnover in its shares has 
been heavy. 

The shares closed 2p lower yesterday at 
61%p, equalling their low point for the 
year. 

They were 118'Ap before the interim 
results statement when the company also 
announced it was halving its interim divi- 
dend and facing increasing pressure on 
profit margins. 

On Monday the company had to deny a 
weekend report that it was in danger of 


breaching banking covenants. It then said 
that, on current projections, it expected to 
stay within its covenants, but declined to 
detail what they were. 

APV has committed itself to announcing 
details of the restructuring by the end of 
December. Yesterday it would say only 
that, when the scope and size of toe 
restructuring was known and approved by 
the board, full details would be announced 
to the Stock Exchange. 

Last week, toe company ousted Mr Clive 
Strowger, its chief executive, following 
pressure from institutional shareholders. 
Mr Neil French, finance director, is acting 
as chief executive. 


expected and that changes in 
Lloyd's rules on corporate capi- 
tal had proved an added dis- 
traction. 

Mr Bryan Kellett, chairman, 
said: "We are still hopeful that 
the various matters which 
have caused the delay can be 
resolved and an agreement 
concluded over toe coining 
.months.*’ 

London & Metro 

Reduced pre-tax losses of 
£2. 14m against £3.45m were 
announced by London & Met- 
ropolitan, the property group, 
for the half year to June 30. 

The outcome was helped by 
a fall In interests costs from 
£3m to £lm as a result of last 
year’s restructuring. The UK 
side had performed well but 
progress had been hindered by 
the net running costs of toe 
Pont Royal golf resort in the 
south of France. 

Turnover of continuing 
operations dropped to EL.63m 
against a restated £10.3m. 
Losses per share were cut to 
4.7p (5.6p). 

Fleming Japanese 

Net asset value at Fleming Jap- 
anese Investment Trust rose to 
260.7p fully diluted at the end 
of the year to September 30, 
against 245.lp. 

Mr Patrick Gifford, chair- 
man, 9&id the trust had 
achieved "a significant outpar- 
forxnance" of the Japanese 
stock market. 

Net revenue fell to £53,000 
(£544,000) and earnings par 
share were 0.02p (0.48p). 

No dividend la declared 
(0.45P). 


Shiloh 

Shiloh, the textile spiffing, 
healthcare, protective clothing 
and packaging group, lifted 
pre-tax profits by 27 per cent In 
the half year to October L 

The advance, from £490,081 
to £622,355, was despite a 
£206,000 loss on the packaging 
side. 

Mr Edmund Gartalde, chair- 
man, said the group was 
urgently addressing the loss on 
packaging and was planning to 
withdraw from the loast 
profitable markets, for which 
some provision might have to 


NEWS DIGEST 


be made at the year-end. 

2h addition, an exceptional 
provision of up to £392.000 
might have to be made in 
regarding toe deferred consid- 
eration on the land sale made 
in October 1990. 

Turnover improved by 9 per 
cent to £14.6m (£13.4m). 

Earnings per share emerged 
at 7 J4p <5.75p) and the interim 
dividend is held at lp. 

I&S UK Smaller 

Net asset value at I&S UK 
Smaller Companies Trust 
edged ahead from 116.26p to 
120-llp over the six months to 
September 30. 

The modest rise of 33 per 
cent, however, compared with 
a decline of 5.4 per cent in the 
FT-SE SmallCap (excluding 
investment trusts). 

The trust had gearing of just 
under 24 per cent at the period 
end, having drawn down bor- 
rowings of £6m in August at a 
fixed rate of 932 per cent for 
five years. 

Earnings per share dipped to 
1.56p (i.76p) but the interim 
dividend Is maintained at lp. 

Domino Printing 

Domino Printing Sciences, the 
ink-jet printer manufacturer, is 
broadening its technology base 
with two acquisitions in the 
US. 

.The Cambridge-based group 
Is paying $2 ,4m (£l.51m) cash 
for Dlgl-Gear Systems, a pri- 
vate Illinois company supply- 
ing control systems. Its book 
value Is anticipated to be no 
more than 5250,000. 

In 1998 It achieved pre-tax 
profits of 8100,000 on sales of 
$l2m; sales and profits for 1994 
were at higher levels, Domino 
said yesterday. 

Domino is also paying an Ini- 
tial S2.84m cash for certain 
assets of Control Print, a trad- 
ing division of Avery Denni- 
son. which makes Ink-jet cod- 
ing and marking systems. 
Book value amounts to 51m; it 
made an operating profit of 
W61.000 In 1993 on sales of 
59.1m. 

Fleming Continental 

Fleming Continental European 
Investment Trust had a not 
asset value per Bhnro of 32*1,15 


at the half-year ended Septem- 
ber 30, up from 321.8p 12 
months previously. 

The trust, which aims at cap- 
ital growth through a conti- 
nental European portfolio, 
reported a 9 per cent increase 
in net revenue from £1.76m to 
£1.93m. for earnings of 2.93p 
(2.67p) per share. 

Flying Flowers 

Hying Flowers' pre-tax profits 
for the third quarter more than 
tripled from £83,000 to £287,000. 
Turnover showed a similar 
increase at £3.03m, up from 
£L02m. 

In the 39 weeks to end-Sep- 
tember, pre-tax profits at the 
Jersey-based postal flower ser- 
vice more than doubled to 
£856,000 (£395,000) on turnover 
Of £9 28m (£4.02m). 

Cumulative earnings per 
share came out at 3.47p (l-91p). 

Computer People 

Computer People has received 
valid acceptances In respect of 
I.95m (85.6 per cent) of the 
2.28m new ordinary shares 
available under its open offer, 
excluding 793,188 which were 
placed firm. 

The money is being raised to 
provide funds for the proposed 
purchase of VNG, the comput- 
ing services and consultancy 
company. 

At an extraordinary meeting 
today shareholder approval 
will be sought for the proposed 
acquisition and to authorise 
the Increase in the share capi- 
tal 

It is expected that comple- 
tion of the acquisition will take 
place on Monday, 

Inchcape Estates 

inchcape Estates, formerly 
Toier Kemsloy & Mlllboum 
(Estates), tho property arm of 
Tozer Kemsloy & Mlllboum 
(Holdings), the motor distribu- 
tor acquired by Inchcape at 
end-1991, reported a pre-tax 
loss of £8.2flm for the first half 

1994 against profits or 
£1.84m. 

roault, on turnover of 
p2.78m (£3, 39m), was after a 
loss or £354,000 (£25.000) on the 
sale of properties and nn excep- 
tional E8.4tu provision against 
a property sold after the 


period-end. Losses per share 
were 78-lp (lD.8p earnings). 

Mclnemey 

A strong performance on the 
Irish housebuilding side helped 
Mclnemey Properties cut first- 
half losses from I£i.77m to 
I£465,000 (£459,486) pre-tax, and 
the directors expect to 
announce a return to the black 
at the year-end. 

The Dublin-listed house- 
builder and property developer 
reported group turnover 19 per 
cent ahead at I£ 15.3m (lEhL9m) 
for the six months to June 30, 
with a trading profit of 
I£143,000, compared with a 
K998.000 loss. Losses per share 
were reduced to 0.7p (2.9p). 

Fleming European 

Fleming European Fledgeling 
Investment Trust reported a 
net asset value of I02^p per 
share at September 30, up from 
88L3p a year earlier. 

Attributable revenue for toe 
six month period improved to 
£373 >000 (£240,000) for earnings 
of 0.93p (0.6p) per share. 

L’don, St Lawrence 

The enlarged London & St 
Lawrence Investment 
Increased net asset value per 
Share to I80.4p at toe end of 
the year to August 31, ag ainst 
175.32p. 

Last November the company 
merged with Its associate. 
Practical Investment 

Net revenue came to £2.63m 
(£336,602). Earnings per share 
were 8.86p (4.39p). 

The company previously 
announced a second interim 
dividend of 3.l2p, to make a 
total of 6,24p for the 
year. 

Majedie Inv 

Mqjodiq Investments had a net 
asset value per share of Slfip ** 
the ond of the year to Svpfa®- 
bor 30, a 3 per cent increase 
from 221p last tone. The FT- 
SE-A All-Share Index rase 0.3 
por cant over the period. s 

Not revenue edged ahead 
from £2, Sim to £ 488m. Earn- 
ings per share were up at 5.B4p 
<5.35p) end a final dividend of 
aa ap la proposed, bringing tho 
total for the year to 5.25p (ftp). 


/ 


i 






FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


RECRUITMENT 


JOBS: Fast-track development programmes for high-flyers may need some rethinking 

Hothouse treatment or a spell in overalls 

A re managements doing understood little erf what was the future top managers said an organisation - the quiet one aspect of a person’s devel- ers have been Hong Kong a 

enough to identify and needed of them and their they needed help in managing workers who started as secre- opment,” S usan Bloch, a Singapore, reflecting executi 

develop the people who self-image differed markwStv non nip nnd the nmnnrtinns tariec nr nlnriml nedchmtc nn GHW ennciiKnnr nav anrarri? in hnth mnntri 


A re managements doing 
enough to identify and 
develop the people who 
may end up leading their 
organisations? A new study 
suggests that fast-track pro- 
grammes for hJgh-£tyers could 
benefit from a little more 
thought 

What GHN, the career man- 
agement consultant, calls a 
future top manager appears 
from the research to be typi- 
cally something of an idealistic 
beast who, rather than npwHng 
hot house treatment, would 
benefit far more from a bit of 
corporate “national service'’ in 
overalls on the production tins. 

The report compared the 
views of 204 personnel direc- 
tors and managers with those 
of 103 men and women, aged 
between 27 and 35, identified 
by management or their peers 
as high-flyers. All worked in 
companies with annual turn- 
overs of more than £80m. 

The report concluded that 
high-flyers needed to be 
brought down to earth. They 


understood little of what was 
needed of them and their 
self-image differed markedly 
from how they were perceived 
by personnel directors. 

Both groups agreed that 
three important qualities for 
potential top managers were 
leadership, communications 
skills and strategic t hinkin g 
However, the personnel direc- 
tors rated several other skills 
or qualities as equally impor- 
tant such as intelligence, entre- 
preneurial ability and presen- 
tational skills. The high-flyer.; 
did not mark these hi ghly . 

The groups disagreed widely 
over how much help or guid- 
ance the high-flyers needed, 
particularly in interpersonal 
skills. More than two-thirds of 
the personnel directors said 
that young mana ge rs needed to 
develop their skflia in manag- 
ing teams or subordinates, 
interpersonal relationships, 
c ommunicatio n and achieving 
flexibility in management 
style. 

In Contrast, less than half of 


the future top managers said 
they needed help in m ana gin g 
people and the proportions 
admitting they needed guid- 
ance in developing other skills 
were lower still - fewer than a 
third were worried about com- 
munication and only a fifth 
thought they needed to develop 
more flexible management 
styles or interpersonal relation- 


an organisation - the quiet 
workers who started as secre- 
taries or clerical assistants on 
the assembly line - who are 
not identified in the selection 
process. 


W hat then happens 
when the highrflyer 
gets to the top of the 
tree aged 39V*? How long will 
he or she stay there and what 
will they do when they leave? 
GHN says the high-flyers 
should be shown how to take 
responsibility for their own 
careers and to protect their 
future employment prospects. 

Rover, the car maker, seems 
to have understood the danger 
of promoting IE-prepared man- 
agers. Each graduate must 
work for a time on the assem- 
bly line to help them under- 
stand the production process. 

The GHN report concludes 
that development of high-flyers 
needs greater preparation and 
scope. “MBAs and traditional 
training techniques have their 
place, but they only represent 


The high-flyers appeared 
more motivated by pay than 
their personnel chfafa thought 
they should be, although both 
groups agreed that job satisfac- 
tion was important for retain- 
ing loyalty maintaining 
performance. Another finding 
was that women appeared to 
be getting a raw deal Those 
questioned were not getting 
the breadth of training oppor- 
tunities given to their male 
counterparts. 

One problem with the fast 
track or hothouse approach is 
that inevitably some people 
will fall by the wayside. 
Equally there will be people in 


one aspect of a person’s devel- 
opment,” said Susan Bloch, a 
GHN consultant 

“Much greater emphasis is 
needed on broader manage- 
ment skills, including commu- 
nications and interpersonal 
relationships which the survey 
asserts are positively received 
when delivered through coach- 
ing and mentoring." 

A copy of the fill report is 
available from GHN, price £30 
plus VAT. TeL 071 493 5239. 

• Employment Conditions 
Abroad, the trade association 
which provides international 
pay and cost-of-living statistics 
to help its member mmpaniaw 
fix local and expatriate pay 
packages in different parts of 
the world, has just published 
its annual executive pay com- 
parison. 

The graph on the right 
shows that, in terms of what a 
salary can buy, Hong Kong has 
leap-frogged Switzerland and 
Germany in the past year to 
head the league. The big mov- 


ers have been Hong Kong and 
Singapore, reflecting executive 
pay awards in both countries 
which have moved upwards 
well ah ea d of infla tion rates. 

Hong Kong companies are 
finding they have to pay high 
salaries to retain their best 
managers who may be tempted 
to leave for countries such as 
Canada to try to obtain a sec- 
ond passport. High pay is also 
needed to lure back those who 
have already acquired dual cit- 
izenship. 

Singapore's pay rates have 
been responding to the 
knock-on effect of companies 
seeking to expand their 
operations in response to pres- 
sures in Hong Kong. 

As well as earning high 
gross salaries. Hong Kong 
executives also have the bene- 
fits of a marginal tax rate of 15 
per cent 

For more information on the 
comparison contact Neo Ped- 
rithes at EGA tel 071 351 715L 

Richard Donkin 


Settlor managers: pay and buying power 

1994 league £*000} 


Hong Kong 
Switzerland 
Germany 
Singapore 


Betgkm 

Netherlands 



□ Gross 

ESI Net 

■ What Hut buys 


isc shart 


Quantitative Analyst 

Attractive Package 


PDFM, a subsidiary of UBS Asset Management London Limited, is one of the UK’s leading fund 
managers with over £37 billion under management and one of the best long term performance records 
in the industry. We are now seeking an additional Quantitative Analyst to join the existing team. 

You would be fully involved in (he work of the Quantitative Unit which includes: 

■ design of customised investment strategies; 

■ analysis of the key factors driving financial markets; 

■ monitoring, the performance characteristics of PDFM-managed investment portfolios; 

■ application of in-house investment policy to non-standard portfolios; 

■ extensive liaison with the marketing department, fund managers and the performance measurement team. 

This is a challenging position in an area which is of growing importance for the Company. It requires a 
self-starter with good presentational skills and the ability to express complex ideas succinctly. You will 
hold a statistical-based first or second degree, plus a minimum of two years experience in a similar role 
within the investment industry. Additionally, you will have good interpersonal skills and the ability to 
work effectively in a team-orientated environment. 

As welt as an attractive package and good career prospects, the position carries a comprehensive benefits 
package, including subsidised mortgage, a non-contributory pension scheme and private health care. 

You will also be eligible to participate in our discretionary performance award scheme. 

Please send full career details to: 

Linda Tottem 
Senior Personnel Officer 
PDFM Limited 

Triton Court; 14 Finsbury Square 

London EG2A 1PD 



Competitive Package 


Major Investment Bank 


Emerging Market Equity Sales 


New position for equity sales specialist to Join the emerging markets team of one of the premier 
South African investment banks. Its London subsidiary has grown significantly over the last two 
years and senior management seek to grow the equity sales force to complement the established 
equity trading team. Unique opportunity to make a move into emerging markets, focusing initially 

on South Africa. 


THE ROLE 

■ Develop and expand the investor base for 
Emerging Market equities, selling equity and 
equity-related products to institutional investors 
across Europe. 

■ Contribute to the product development process 
working with origination, syndication and 
trading providing constant feedback on investors' 
interests in specific markets. 

■ Build a strong reputation with investors for 
quality marketing liaising closely with equity 
research. 


THE QUALIFICATIONS 

■ High calibre graduate with a minimum of three 
years' equity distribution in mainstream or 
esoteric markets. Extensive contacts with the 
European investor base. 

■ Flexibility to sell across varying geographic 
regions and equity or other related product lines, 
including fixed income and derivatives. 

■ Independent mind with disciplined work ethic, 
capable of working in a small, close-knit team. 
A real interest in the Emerging Markets. 


Leeds 0532 307774 
London 071 493 I23» 
Manchester 061 499 1700 


* 

Selector Euro pe 

^ . . 

, spencer Smart 


McaacrcptyudthfcSIdotMla tot 
Selector Europe, MC FMI6I0U. 
16 Ctmogbt Ftmc. 

Landou W2 2CD 


Head of Profit Risk Management 


A new opportunity in . . . 


London Based 

The Role 

We require an outstanding individual to play a 
key role within our highly proactive middle 
office department 


The individual will be responsible for the 
income and risk analysis over the entire product 
range. In addition the person will be expected 
to manage and help develop their own team as 
the activity expands during the year. 


The role requires an individual who is 
confident, with excellent presentation skills and 
who can develop relationships with the trading 
desks and the overseas group companies. 

Career prospects are excellent. 


IN005UEZ CAPITAL 
SECURITIES (UK) LIMITED 



£ Excellent + Benefits 

Qualifications 

♦ At least 2 years' experience in a major 
investment bank or broker. 

♦ Graduate Analyst/Trader or qualified 
Accountant with Risk Income experience. 

♦ Must have had extensive involvement in 
structured derivative products. 

4k Highly numerate and PC literate with initiative, 
creativity and flair. 

♦ Exposure to emerging markets would be 
advantageous. 


To apply, please write enclosing your GV. and details of 
your current remuneration package to: 

Mrs. M. Spanner, Head of Personnel 
Indosuez Capital Securities (UK) Ltd 
122 Leadenhall Street, London EC3V4QH 


Banque Indosuez Group 


Specialised Finance 


Age 27-33 


Our client is a leading. City-based, 
international bank and a major arranger, 
underwriter and provider of senior debt for 
leveraged and structured transactions. 

In order to farther develop its profile in this 
specialist m arker they now seek an additional 
tra n s act or to join the established team . 

The id e al candidate 'Mil be a gr aduate with a 
minimum of 3 years corporate banking 
experience or equivalent in the accounting 
profession. Experience in the origination and 
execution of cash-flow driven acquisition 
finance to medinm/taege UK corpo rat es would 
be advantageous. 


Highly Competitive Package 

This should be allied to the ability to identify 
and exploit market opportunities thus 
facilitating the continued growth of the 
business. 

In addition to these technical sidOQs you will be 
a confident, competitive team player with the 
vision to capitalise on the Bank's strong 
balance sheet and commitment to this 
ag gr e ssi ve market. 

The Bank envisages this team growing rapidly 
in the medium term and seeks an individual 
who can also make an impact to the strategic 
d irection of the business. 


If you believe you have the technical and personal attributes to meet this challenge then submit a 
detailed, Curriculum Vitae to NuiU Mflcnoughtoit at BBM Se l ection to the address below. 

AS applications «utD be treated m the strictest confidence. 


76, Watting Street; 
London EC4M9BJ 



Teh 071-248 3653 
Fax: 071-248 2814 


RELATIONSHIP MANAGER 


Derivative 

Risk 

Analyst 

London, City 

£50-£70,000 

+ Banking 
Benefits 


Our client is a leading US Investment bank In the City with a high global presence and 
an unrivalled reputation fir Us progressive and innovative nature. Over the last year It 
has experienced unprecedented growth in trading volumes which has created an 
excellent opportunity fir an ambitious and dynamic individual. 

This front line reporting role will contribute directly to bottom line profits. Whilst 
assisting the head trader in the definition and application of hedging and risk 
management strategies, you will be expected to add value to die design of innovative 
new financial products, formulate and project your opinions on market movement and 
apply your commercial acumen within this fast moving environment 

Ideally you should have the following background: 


Advanced treasury and capital markets 
experience. 

Good degree and/or relevant quali- 
fication. 

Excellent presentational and report 
writing skills. 


Strong interpersonal and communi- 
cation skills are essential as the position 
requires extensive interfacing with 
senior banking colleagues and dents. 



Interested candidates should contact Sara Kenderdi n e-Davies on 
071-256 5849 - City Senior Division, Accountancy Personnel, 
36-44 Moorgate, London EQR 6EL Fax: 071-638 7509. 


Our client is a large private European bank with an ext e nsive international presence and a 
long established branch in the City of London, specialising in a broad range of services to the 
top 100 UK companies. 

Expansion has called for a Relationship Manager to handle his/her own portfolio and market 
the bank's services to Fund Managers (UnitTrusts, Investment Trusts and Pension Funds) and 
to Insurance companies in the UK. Tdeally. you will be a graduate and will have spent a 
minimum of 2 years developing strong marketing skills within a corporate banking 
environment, preferably European. Assertiveness and presence are important traits for 
consideration and any prior exposure to the fund manager sector will also be useful. 

The bank offers a competitive salary and banking benefits. 

Please send your cv, in strictest confidence, to Helen Highet or Michele MacPherson 

Jonathan Wren & Co. Limited, Financial Recruitment Consultants 
No. 1 New Street; London EC2M 4TP Telephone 071-623 1266 Facsimile 071-626 5259 





22 


32 


★ 


M&A/ CORPORATE FINANCE 

ARC Associa tes is a growing investment banking and corporate advisory boutique, specialising in the information 
technology, telecommunications and software industries- The Group undertakes a range of activities in the M&A, 
principal investment and corporate finance areas, differentiating itself through its sectoral approach and through its 
unique marriage of capabilities in investment banking and corporate strategy. 

Due to its continued growth, ARC Associates is now seeking to strengthen its junior-level professional staff, and 
applications are invited from candidates with at least one year of experience in a major merchant bank, investment 
bank or strategy consulting Era- Graduates who have completed a training programme with a respected investment 
bank are particularly encouraged to apply. 

Working in a smaller company environment requires successful individuals to assume a broader set of 
responsibilities and to progress faster than in a major firm. We are consequently looking for consistently high 
ach ievers in their early to mid-twenties, with outstanding academic and professional records. Experience in any 
high technology field would be advantageous, and a second European language, although not essential, would be 
preferred. For the right candidates, ARC Associates offers a highly competitive remuneration package, with 
excellent career prospects. 

Those Interested are asked to write, cnckwng a fall CV, to Will belin. ARC Assodarer, 26 fiesbury Square, London, EC2A 1 DS. 



ARC ASSOCIATES 


Investment Banking and Advisory Services to the Information Technology, Telecommunications and Sftware Industries 


AFPOirmffiMS 

ADVERTISING 

appears in the UK 
edition every 
Wednesday & Thursday 
and in the International 
edition every Friday 

For further information 
please call: 


Andrew SfcanjBdd on 
+4471873 4054 

Philip Wrigtey on 

+44 71 873 3351 

Joanne Gerrard on 
071 873 4153 



A KEY COMMUNICATIONS ROLE 



3i is the leading specialist provider of investment 
capital to unquoted businesses in the UK. We provide 
funds to help small and medium sized businesses in all 
sectors of the economy, encouraging wealth creation and 
business growth. We have recently achieved a listing on 
the London Stock Exchange and become a member of the 
FT-SE 100. 

The relationship we have with our investors is very 
important. We now seek a motivated Manager who will 
support the development of good relations between 3i and 
its shareholders, the financial press and analysts - through 
analysis, interpretation and presentation of information on 
the company’s strategy, polity and performance. This w31 
involve project management of the Annual Report and 
Accounts, the Interim Report and other presentation 
material as well as involvement in other ad hoc projects in 
Si’s Marketing and Corporate Affairs team. 


Educated to degree level and preferably MBA or ACA 
qualified, you will have a background in gepounring 
and/or marketing, plus experience of dealing with City 
institutions and analysts - possibly in the corporate 
affairs or communications team of a blue-chip company. 
The role involves considerable liaison with 3fs brokers, 
public relations advisers and merchant bank - 
outstanding verbal and written communication skills are 
an essential attribute. You will be able to establish your 
credibility quickly, aided by your commercial acumen 
and ability to understand figures and data. 

This key role will attract a highly competitive salary 
as well as a comprehensive range of financial sector 
benefits. 

To apply, please send full career details to 
Charles Richardson, Director Corporate Affairs, 

3i Group pic, 91 Waterloo Road, London SE1 SXP. 





Leading the way in the highly competitive financial services market, and 
with assets in excess of £37 billion. Standard Life's investment products are still 
growing at an enviable rate. Successful investment management plays a major part 
in driving us forward, which is why we're now expanding out team in order to 
exploit new investment opportunities. For decisive, self-motivated investment 
professionals who find the prospect of influencing a major company an exciting 
one, we offer outstanding career opportunities. 

As part of either our Pacific or UK Equities teams, you will be responsible for 
gathering and analysing information on specific countries, sectors and companies 
which will enable you to make key decisions on sector and stock investments. You 
will also use your communication and analytical stalls to the full as you meet 
regularly with companies and stock brokers and cany out independent research. 

PACIFIC EQUITIES (Excluding Japan) 

You should have 4-5 years' experience of stock analysis or portfolio 
management in the Pacific markets. Highly innovative, you should be able to 
demonstrate a track record of producing excellent investment performance. 

Please quote ref: 1138/FT 

UK EQUITIES 

For a highly numerate individual with at least 18 months' UK Equity 
experience, this key role in sector and stock analysis often the scope to progress to 
portfolio management responsibilities. Educated to degree level, you should 
ideally be studying towards or have gained an UMR qualification. 

Please quote ref: 1139/FT 

We'U reward your commitment with a competitive salary and a generous 
range of benefits including house purchase loan scheme, non-contributory 
pension and private medical cover. 

Please write with full cv, including your career achievement and details rrf 
your current salary, quoting the appropriate reference number, to Kenneth 
Notman, Recruitment Officer, Standard life Assurance Company, 40-42 George 
Street, Edinburgh EH2 2LE. 

Closing date for receipt of applications is 28 October 1994. 

STANDARD LIFE 


INVESTOR INPEWtH 





0 


MARKETING/ 
INVESTOR RELATIONS 


An executive is required for 
Schraders International Property 
Fund N.V., a European property 
investment company listed on 
the Amsterdam Stock Exchange. 
The company is associated with 
Schraders pic, the leading 
international merchant banking 
group. 

Applicants, preferably 
28 - 35 years old, must be fluent 
in English and one other major 
European language. 

Experience in the marketing of 
financial products to institutional 
investors is essential, as are 
excellent oral and written 
communication skills. 


Location - Amsterdam or 
London. 

Please apply in writing 
with CV to: 

Schraders International 
Property Fund N.V. 
Postbus 15542 
1001 NA Amsterdam 
The Netherlands 


Schraders 

International 

Property Fund N.V. 


MTV 

cudadc 

CUKUrt 


OPPORTUNITIES WITHIN NEW 
BUSINESS DEVELOPMENT 

.Established in 1987, MTV Europe has become 
the fastest growing cable and satellite 
channel In Europe and a pioneer of creativity 
in youth programming. MTV Europe Is 
received in over 61 million homes in 34 
countries, 24 hours a day. 

The channel now seeks to strengthen Its 
market position with the appointment of the 
following two positions. 

7Hen«aq&i, Heco Sudcttedd 
‘DeveiofiMtott 

Based in London Salary negotiable 

Reporting to the Director of Business Development, Planning 
and Research, this challenging role will focus on evaluating and 
developing new business opportunities in Europe in order to 
generate new revenue sources. It will involve working dosely 
with other senior managers to devise future business plans and 
determine the strategic implications of these ideas. 

Suitable candidates will be educated to degree level and should 
ideally possess an MBA. Experience in strategic planning and 
new business/ product development along with the ability to 
develop complex financial models is essential, as is the 
requirement to manage and develop a team. Proficient^ in 
German and at least one other European language is also 
desirable. 


Based in London Salary negotiable 


Reporting to the Manager, New Business Development, this 
position w ill research and carry out financial analysis of new 
business opportunities in order to draw up business plans and 
presentations. 


Candidates should have a minimum of two years experience in 
management consulting or investment banking and familiarity 
with the television industry would be an advantage. Basic 
accounting knowledge and the ability to build financial models is 
essential along with the requirement to work under pressure 
and to tight deadlines. Proficiency in tvw> European languages 
mouU be desirable. 


In return we offer an Interesting and challenging 
roles within a young, lively and international team. 


Please send your application In writing enclosing 
a comprehensive CV and stating your current 
salary to: 


Mark Allen, 

Deputy Director of Human Resources, 
MTV Europe, 

Hawley Crescent, London NW1 8TT. 

-IP- 

—mm— mm wacTBEvaor mmmm—m 


L.CJF 'Edmond cCc (RptdscfvUd 
Securities Ltd 

EQUITY MARKET MAKER 

LCF Edmond de Rothschild Securities Ltd, a leading specialist in 
emerging market country funds, is looking for another market- 
maker. The successful candidate will be expected to have at least 
two years experience although these need not have been in 
emerging markets. He/she will need to be SEAQ and SFA 
registered and have experience of dealing with institutional client 
orders. 

Applicants should send their CV.'s with a covering letter to Peter 
Regan, LCF Edmond de Rothschild Securities Limited, Orion 
House, 5 Upper St Martinis Lane, London WC2H 9EA. 

All enquiries will be treated in the strictest confidence. 


financial times 


FRIDAY OCTOBER 2S 1994 


PROJECT FINANCE SPECIALIST' 
UTILITIES SECTOR 

N M Rothschild & Son s Limited is a leading merchant bank with .in cnvuhh 
reputation for die quality of its project finance services, and is currently nd' i*u*l *i hfL'* 
number of prestigious international clients undertaking high-profile transaction, in the 
utilities sector. To help mcer the growing workload, on executive with proven 
finance advisory experience Is sought to join the Utilities team within the hank's 
Corporate Finance division. This specialise team advises private-sector and giwcmmeni 
clients on project finance, BOO/BOT procurement, privatisations, restructurings, 
acquisitions and related issues across the power, telecomms, pas and water industries. 

ri nJultrixi should have a minimum of four years’ project finance experience, pained 
in a lending or project-advisory capacity. Project experience in the electricity sector would 
be particularly useful-, exposure to other utility industries and infrastructure projects would 
also be advantageous. A willingness to travel extensively is essential. 

The competitive remuneration package is designed to attract candidates of the highest 
calibre for this important position. 

Please send your foil curriculum vitae, in the strictest confidence, to Rixlncy Lonsdale, 
Director of Personnel, N M Rothschild &. Sons Limited, New Court. Sc Swithin’s Line. 
London EC4P 4DU- 



N M ROTHSCHILD & SONS LIMITED 


Providence Capitol 


Providence Capitol Portfolio Managers Limited Is one..0f the fastest 
growing asset management companies, in -the 'GR,-- backed by.lhef - . '- ~ 
South Africa Mutual Ufe Assurance Society- Jdntite<d..C : Qld- Mutual').. . 
We manage £1.5 billion of assets in a yafjety bond,, 

deposit, property, managed and hedge funds." • ;7" . v v 

ASSISTANT jC,vV 
FIXED INTEREST MANfefcSF- 

In addition to money market exposure, PCPM manages fcohd 
investments in excess of £500m in value, including UK gflts anctribn 
gilts, international and emerging bond portfolio. We tow wish to *‘; 
recruit a high calibre Assistant to the Head of Fixed Interest.' In order _ . 
to improve our depth of coverage in these markets. • i * •’ • • •' , » . ; '. r -V 

1. ! • 

It is unlikely that a candidate without 5 years relevant experience : 
would be able to make the significant contribution- Required: • 
Expertise in non -gilts and the money markets would be 'parti crafty V 
useful although it is envisaged that the successful applicant w3l 
become involved in ail areas of bond investment. £■}. L Vj * •« ' 

This is a challenging opportunity to join a highly successful .arid L . 
stable team of investment professionals operating in a Col hie which . ; 
supports individual achievement. We offer a competitive total 
remuneration package including a significant perforrpance bonus ; 
element. ifi; • 1 /:■; 

• r> !*: i 

If this sounds Uke the opportunity for you please write,. including a i< * ; 

fuD cv, to U ; J L' 

Bob Attridge, Head of Fixed Interest ’ ; : ) > ; 

Providence Capitol Portfolio Manage^, limited; ’ 
Providence House, 2 Bartley Way, Hdol^v ? * * i ■’ • . - 
Basingstoke, Hampshire, RG27 9XA.L 1 - i ■; ) •” • 





INVESTMENT TRUSTS 
ANALYST/FUND MANAGER 

LONDON EXCELLENT PACKAGE 

Our client Is a rapidly expanding investment management division of a 
leading private client stockbroker. Due to continued growth they 
require an additional Investment Trust specialist to assume a key role 
within the division. 

The role will involve detailed analysis of Investment Trusts with 
responsibility for managing substantial funds invested In the sector. 
This will include building contacts with Investment Trust managers to 
ascertain their investment strategies. Identifying Investment 
opportunities and contributing to the further growth of the division. 
The successful candidate will be well qualified with a good 
understanding of the Investment Trust area and a minimum of 3 year's 
related experience. This may have been gained through Investment 
Trust research or sales or within a fund management environment. 
Strong interpersonal skills and the ability to communicate effectively 
both In writing and through personal presentation are essential. 

For an initial discussion In confidence please contact Stephens 
Selection quoting reference 4890 at 20 Cousin Lane, London EC4R 3TE. 
Telephone 071-236 7307 or Fax 071-489 1130. 

STEPHENS 

SELECTION 


\ 


! A STEPHENS GROUP CONSULTANCY : 

IUa*» (tor tat ttodtof IMy.1 









InteTs Legal Department, based in Swindon, Wiltshire, England provides 
legal expertise and counsel for Intel's activity across a diverse European 
geography including Israel and Eastern Europe. 

The requirement is for an individual with 3 to 5 years* experience in an 
international business environment either as an in4xjuse lawyer or in a legal 
practice; to provide timely legal support to Inters operating groups and 
business spanning manufacturing, sales, marketing and product 
development 

Specific experience is required in the area of contract inreflociuaf 
property, commercial, competition and EC law. 

Frequent contact with senior management, direct solos force and 
customers require a good business understanding, negotiation and 
communication skills. 

Fluency m English is essential, another European language would bo 
desirable. 

Send a full CV. including details oi currant remuneration to: Ray Wlihey. 
Human Resources, miel Corporation UK Ltd. Plpera Way, Swindon. Wiltshire 
SN3 1RJ. Phone: +44 793 696632. Fax; +44 793 613852. 







33 


\ 


FINANCIAL, TIMES FRIDAY OCTOBER. 28 1 994 


UK CORPORATE BANKERS 


EMERGING MARKETS FOCUS 


LONDON 


COMPETITIVE PACKAGE 


broad range of banking products and services 
through a welLestabfisbed global nctwotk. 
Maikering strategy focused on key UK-based 
multinationals with substantial cross-border trade 
aod investment flows, especially in emerging 
markets. 

• As a result of increasing levels in business activity, 
a number of corporate relationship professionals arc 
now needed to focus on a select group of top 

• You will have responsibility for mark e ting to 
existing cKr nt s as well as developing new business 
opportunities within wriOklefined industry sectors. 


• Experienced relationship officer from a first 
financial institution. Broad product knowledge and 
strong credit skills. Record of developing business, 
ideally with UK imiMiminnah with proven ability 
to negotiate and dose transactions. Alternatively, 
individuals with a strong corporate finance 
background will also be considered. 

• likely late 20s to mid 30s. Highly motivated and 
results-orientaied. Ability and stature to operate at 
the most senior levels, both internally and 
externally. 

• Exten s i ve opportunities for foreign travel and 
possibilities to be based abroad in the future. Career 
prospects within the Bank are excellent. 


Wcmc apply tn wmtqgqnodng reference 811 
wUi BoB circcr aod sattry dcafla ax 
UMkTOodbouc 
WUuixad Selection United 
45 Whrrlr mu, Uwtai WIM 7HF 
TtfcOTl 6378736 


Whitehead 

SELECTION 


The Top 
Opportunities 
Section 

Advertise your 
senior 

management 
positions 
to Europe's 
business 
readership. 
For information 
please contact: 

Philip 
Wrigley 
+44 71 873 3351 


m Dealer - International Equities m 


Excellent Salary 4- Benefits 4- Bonus 

We represent a major UK Investment Management House who have an 
outstanding track record in fund performance. Working with a very active 
group of professionals, you will be responsible for dealing in the 
international equity markets within a centralised dealing environment 

The candidate will be in their late 20’s to early 30’s with 3-5 years relevant 
experience. 

This is an excellent opportunity to join one of the fastest growing and 
most progressive Investment Houses in Fluid Management 

Fora confidential discussion please contact Patrick Morrissey. Telephone: 
071-236 2400, Fax: 071-236 0316 or apply in writing to Skeffield-Haworth 
Limited, Prince Rupert House, 64 Queen Street, London EC4R 1AD. 


4JLM 


Consultants in Search and Selection 


Italian Analysts, Equity Division 



Lloyds 

Bank 

Stockbrokers 



City Based : Competitive salary plus attractive benefits 


On the 31st January this year, Lloyds Bank Stockbrokers 
Limited successfully launched the Sharedeal Direct Service. 
This offers clients an efficient and competent Dealing 
Service, a Helpline for any associated problems and 
Investment Advice. 

We are now recruiting additional members for the 
Investment Advice Department to join a small team which, 
nevertheless, has considerable responsibilities in looking 
after the large and growing number of Sharedeal Direct 
clients. 

The ideal candidates will have the Mowing 
qualifications: 

* Membership of the Securities Institute. 

* Educated to a high standard, a degree would be 
preferred. 

* A minimum of three years’ experience dealing with 
Private Clients in a Stockbrokiug or similar Financial 


Institution and as a consequence, having a wide range of 
investment knowledge. 

• Outgoing personality with the ability to communicate 
articulately and dearly on the telephone, and in writing, 
and to generate new ideas. 

•Age 25 to 35 years 

• A working knowledge of computer applications including 
wordprocessing. 

These positions will be particularly attractive to 
motivated individuals who wish to pursue their career with 
a highly regarded, successful institution. We offer a 
competitive remuneration package with bonus and banking 
benefits. 

Applicants should write; in confidence, enclosing' their 
full curriculum vitae and current remuneration to 
Miss Joanne Philip, Personnel Manager, LMB Services 
Limited, 48 ChisweU Street, London, EC1Y 4XX. 


WOULD YOU LIKETO DEAL 
WITH THE WORLD? 


Imagine what it would be like 
if you were given the chance to 
work for a company char is a 
world player in electronic 
technologies, components and 
products and has an annual 
turnover of over 30 billion US 
dollars. 

Within Philips Finance in 
Eindhoven, the Cash and 
Foreign Ex c h a n ge 
Management group, as part of 
the Treasury Department, is 
responsible for hedging, short- 
term fi nancing activities and 
cash management for the 
various Business Units all over 
Europe. As such, the group is 
an important player in the 
international financial markets. 
Daily challenges include mini- 
mizing the group’s financial 
risk while caking advantage of 
market opportunities. 

To optimize performance in 


this exhilarating, international 
environment, the group is ac- 
tively seeking a highly qualified 
ceamworker to join as 


JUNIOR DEALER 


Your function 

As part of die team effort to 
raise the financial awareness of 
the entire Philips organization, 
you will primarily deal with 
and advise the treasurers of the 
various International Product 
Divisions and Business Units. 
After having gained appropriate 
experience, you will also be 
entrusted part of the Forex or 
short-term interest rate 
management. 

Your profile 

You have a relevant university 
degree and three years' dealing 
experience in a bank or a large 
corporation. You have worked 


with a range of products, 
including FX spot and forward, 
FX options, money market 
instruments, IRS and interest 
rate options. You are familiar 
with spreadsheets. You are 
fluent in English and at least 
one other European language. 
Above all, you are a self- 
motivated team player with a 
vivid interest in market deve- 
lopments. 

Your application 
If you dunk your profile 
matches the demands of this 
position, please submit your 
written application within two 
weeks to: 

Mr. GJvLJ, Smeding, Human 
Resources Department, 
Building VO-p, 

P.O.Box 218, 

5600 MD Eindhoven, 

The Netherlands. 

m PHILIPS 



CAP! 

Member of the Securities and Futures Authority 
and thr London Sock Exchange 

An opportunity has arisen for an individual to join a small Gty based stockbroking 
business which is now seeking to expand. The company offers a professional 
investment approach with availability of extensive research material. A fully 
computerised back office supports our own settlement: nominee and cash management 
facilities. 

The right candidate will be someone with an established client base who enjoys 
working alongside an existing team and who would be prepared ro contribute to the 
future development of the or g a n i s a t ion. 

A flexible remuneration package will be offered with the possibility of future equity 
participation. 

Applications including full CV and present remuneration details to be addressed to 
Michael Snyder, Cheviot Capital Ltd, Devonshire House, 146 Bishopsgare, London 
EC2M4JX. 


APPOINTMENTS 

WANTED 


BUSINESSMAN 

Professional • Diligent • 
Adaptable 

International Connections 
Prepared to assist Managing 
Directors) anticipating 
retirement or seroj-retiremeot. 
Bor A2183 Financial Times 
One Southwark Bridge, 
London, SE1 9HL 


CHARTERS AGCOOVTiUn/ 

GflUPUAHX/HMICUL 

SPECIALIST 

Long experience London and! 
international capital markets with: 

professional and Investment banking 

houses and regulatory body.j 
speaking French, Italian, German, 
excellent contacts. Available lor] 
assistance with regulatory problems 
or financial investigation work. 
Pham/fax 44 (0)171 435 4318 


Attractive Package 


City 


UBS, part of the AAA-rated Union Bank of Switzerland, is one of the CityV leading 
investment banks. Our Equities Division is renowned for the quality and breadth 
of its research. 

We now have vacancies for two analysts to work within our expanding Italian team. This 
is an exciting opportunity, offering you the chance to take part in establishing our Italian 
market strategy, to co-ordinate the efforts of our sector strategists, to analyse a broad 
selection of Italian companies and to support our successful Corporate Finance Team. 

Your background will be in equities analysis and research. Knowledge of the Italian 
market would be an advantage. You will also have excellent communication skills and 
a career of proven ability. Fluency in English is essential and a working knowledge of 
Italian would be an asset 

In return for your experience and enthusiasm, we offer you a varied, challenging career 
in a dynamic environment with a competitive remuneration package. 

Please send full career details to: 


Melanie Oink 
Personnel Department 
UBS limited 
100 Liverpool Street 
London EC2M 2RH 



CJA 


RECRUITMENT CONSULTANTS GROUP 

2 London Wall Buildings. London Wall, London EC2M 5PP 
Tel: 0171-588 3588 or 0171-583 3576 
Fax No. 0171-256 8501 



Challenging position in a cosmopolitan Middle East location 

OPERATIONS ADVISER 


MIDDLE EAST 


TO CHIEF EXECUTIVE Mfin nnn 

£1 00, 000-E1 50,000 

IMPORTANT LOCAL COMMERCIAL BANK TAX FREE 

Our client has appointed a new Western Chief Executive Officer to lead a major reorganisation of the Bank and 
the Operations Adviser is the first of a number of key senior management appointments from outside the 
territory. The successful applicant will review and recommend improvements to the operational procedures in alJ 
areas of the business and between branches and Head Office, advise on major changes in the structure of the 
organisation and the redesign of systems and work as the right hand to the CEO in implementing these changes. 
We invite applications from candidates with broad operations management and modem systems experience 
gained in an overseas bank using British banking systems. Experience of working in a foreign environment is 
essentia! and canddates must be professionally and personally self-sufficient. A two year contract is negotiable, 
including a salary of £100,000-£1 50,000 paid free of local taxes, bonus and generous expatriate package. 
Applications in strict confidence quoting reference OACE4997/FT to the Managing Director, CJA. 



CLIENT RELATIONS & BUSINESS DEVELOPMENT 

Attractive salary + banking benefits • London 


The Royal Bank of Scotland is undergoing a period of 
dramatic and exciting change, re-evaluating and enhancing 
all areas of the business in a drive to become the best 
performing financial services group in the UK. 

A major growth area is the Securities Services Division, 
which operates in a highly competitive marketplace and 
has become the UK's No. 1 in Unit Trusts, No. 2 in 
Registrars and, according to Global Custodian magazine, 
the top rated UK bank in the 
Custody field for the third year 
running. With business levels 
continuing to grow and a major 
investment programme under- 
way, including new technology 
and a recent substantial 
acquisition, the time has come to 
strengthen the team through two 
key appointments. 

CLIENT RELATIONSHIP MANAGER 

You will be responsible for co-ordinating all of our dealings 
for a group of clients with a portfolio value ranging from 
£50 m to £10 bn- As well as developing strong customer 
relationships through analysing and meeting their needs, 
you wfil identify and develop new business opportunities 
through foe provision of additional services. 

This is a pro-active role calling for a strong negotiator with 
good organising ability and excellent interpersonal skills 
enabling you to communicate effectively at all levels. A 
knowledge of specific business, which could include 
pension funds, investment and unit trusts, fund managers 
and overseas banks, will help you relate to the 
requirements of the clients. 


SECURITIES 

SERVICES 


BUSINESS DEVELOPMENT MANAGER 

You will help develop our market share of quality 
clients in the Global Custody /Trustee field and identify 
cross-selling opportunities for other areas of the 
Bank. Working within the agreed sales plan you will 
identify appropriate target organisations and their 
key influencers and decision-makers. In addition 
you will negotiate terms, arrange presentations 
and ensure clients receive 
appropriate training on in-house 
systems. 

A confident communicator both 
verbally and in writing, you must 
be able to demonstrate in-depth 
experience in the financial sector 
involving at least two of the 
following areas: domestic 
banking, stockbroking, custody, 
trustee administration and registration. 

For either position you must have at least five years' senior 
level experience in a Custody environment, whilst 
experience in a related area such as Trustee/ Registrars 
would be an advantage. 

Initially these positions will be based in Islington but will 
be moving to the Bank's new Corporate Headquarters in 
Holbom later this year. 

To apply, please write with full CV to Fiona Coles, 
Personnel Department The Royal Bank of Scotland pic. 
Regent's House, 42 Islington High Street, London Nl 8XL. 

Fax:071-8376221. 


yv 

The Royal Bank of Scotland 

Where People Matter 

Commuted to Equal Opportunities (& 














34 


FINANCIAL TIMES 


FRIDAY OCTOBER 2* I9M 


IN YES TORS 
CHRONICLE 


INVESTMENT STRATEGIST 

We are looking for an investment 
strategist to cover the world's big financial 
markets in equities, bonds and currencies. 
Working as part of a two-person team, the 
challenge is to develop coherent 
investment strategies and explain them 
clearly and entertainingly to readers who 
are not always experts themselves. 
Knowledge of the markets is an essential, 
as is an enthusiastic and flexible 
approach. 

Please send CV and hand-written letter to 
Ceri Jones, Editor, Investors Chronicle, 
Greystoke Place, Fetter Lane, London 
EC4A 1ND. 

7?ie FT Group Is committed to being an Equal Opportunity Employer 


jZ &X- ji-Th i'S v.vy»: *. ^ ‘...4c .* v; . 


■. rsaws', : 






Head of Money Market Trading 

Foreign Currencies £ Excellent 


Tokyo 

Our client ranks tnrcrrMcionally as one of Europe’s most prcsrleious bonking institutions with 
a major presence in the global bond and money markets. We have been retained by them to 
identify a highly motivated and ambitious individual to assume responsibility for their Tokyo 
money market trading operation, an appointment acknowledged us critical to the 
globalisation of their activities. 

The profile demanded for this key position is an exacting one- You are likely ro be tn your mid 
thirties to early forties with at least ten years relevant experience acquired in chc US or 
Europe. Reporting directly to the Treasurer, the successful applicant will head up a ream 
trading the complete range of money market instruments and their derivatives. These will be 
deposits, currency Swaps, FRAs, futures and short term interest rate swaps, all of which arc 
traded in both USD and chc major European currencies. 

Appropriately qualified individuals arc likely to have a strung track record in these 
markets and experience of trading positive and negative yield curves. You should 


also have an intuitive feel for risk reward ratios, the ability to think aK*ut die ^ 

and direction of the business, and ways in which market opportun 

exploited. 

For such individuals, this position represents a unique opportunity ro acqum- creator 
responsibility, trading flexibility and allow considerable career pn igresMi '»■ 

Remuneration, based upon a firsc rate salary and bonus package and eoiiipreiloioiie «■ qurruti. 
benefits, is highly attractive and indicative of the high calibre people w wish to .utrau. 

In the first instance, interested candidates should counter Karen Gay.it Michael 
on 071 83 i 2000 or send your resume to her at Page House, 39-41 Parker Street. London 
VVC2B 5LH, fax 071 405 9849. Alternatively for convenience, you can cmu:K< 
lan Bauer in our Hong Kong office on (852) 530 2000 or Scott Mewmg «' l> “ r 
Sydney’ office on (612) 235 1488- Please quote reference 208533. 

All replies will be treated in complete confiilence. 


Michael Page City 

Intcmation.il Rccmicment Consultants 
London Paris Frankfurt Hong Kong 1 Sydney 






POLICY EXECUTIVE 

Financial Regulation 


The Securities and Investments Board (SIB) is the central body 
empowered by the Financial Services Act 1986 ro oversee the 
UK regulatory system for investment business. A key senior 
position is currently vuranr in rhe department responsible for 
the system’s overall framework of financial regulation. The role 
of the department includes ensuring that capiral standards for 
investment businesses arc adequate, meet the UK's EC 
obligarions and tike account of wider international 
developments and eompetirinn. 

The succrwfol applicant will take responsibility for rhe 
development of policy relating to the financial regulation of 
branches of overseas firms seeking to engage in Investment 
business in the UK. The job will involve assessment of overseas 
regularory regimes, discussion and negotiation of agreements 
with overseas supervisors, extensive liaison with SRO’s and 
preparation of papers for discussion inside and outside SIB. An 
fractal task wilt be a comprehensive review of current policy 
(particularly in the light of EC directives). 

Gmdtdjtcs are likely ro be educated to degree standard. 


They may hold a professional qualification and are likely to have 
» City background including regulatory, legal, accountancy 
and/or documentation experience. Applicants should have a 
good grasp of burh rhe FSA foimervork and bunking regulation, 
together with a working knowledge of investment business 
gained (rum several years relevant work experience. 

The ability to express ideas fluently, burh orally and m wnring is 
imporranr as is attention m detail and rlie ability to analyse 
complex issues. Candidates should have negotiation skills, be 
practical, flexible and able to demons irate personal authority, 
tact and diplomacy. Fluency in a second EC language would he 
helpful. Some overseas travel will be necessary. 

Interested applicants should in the first msr.mce connict 
Anna Williams or Sue Lintem at Michael Page City, Page 
House, 39*4 1 Parker Street, London, WC2B 5LH, 
quoting reference 207930, for an information pack. 

Telephone 07 i 831 2000. 

Closing date Thursday 10th November IV94. 


Michael Page City 

Inccmational Recruitment C.HMulcunta 
London Paris Frunkfurt Hong Kong Sydney 



BARCLAYS PRIVATE BANKING 

Due co growing client demand. Barclays Private Banking is seeking a qualified professional to 
support Senior Private Bankers providing a wide range of advice to domestic clients with 
substantial personal assets. Candidates must be capable of developing skills across investment, 
tax, trust and banking and be committed to 4 career in Private Banking. 

Candidates should write to: 

Private Banking Director, UK 
Barclays Private Banking 
Barclays Bank PLC 
49 Grosvcnot Street 
London W IX 9FH 

Investment Services provided by BZW PML, 26/28 Mount Row, London VIA OKA. A member of the SFA. 
Barclays Bank PLC is an equal opportunities employer. 



BARCLAYS PRIVATE BANKING 

Barclays Private Bunking, one of the world’s leading Global Privace Bonking Groups, is 
seeking to recruit Professionals with 3-5 years’ practical experience of Private Client. Trust, or 
Offshore work, ro be based in various of its Offshore locations. 

Barclays Private Banking has subsidiary companies in Jersey, Guernsey, Isle of Man, 
Cayman, British Virgin Islands and Bermuda. 

Candidates should write to: 

Private Banking Director, Offshore Islands 
Barclays Private Banking 
Barclays Bank PLC 
49 Grosvenor Street 
London WJX9FH 


Barclays Bank PLC is an equal opportunities employer. 2 


Japanese Equities Salesperson 

Sutod by a Japanese Securities Company in London, subsidiary 
of a Tokyo 1st Section listed company established since 1933. 

A minimum of 2 years experience in the Japanese market 
is essential. 

C v. to So* A2im, Ftaanchi Time*. 0 m Soutfaw* Bridge. Loudon SEl 9HL 


SlQCEMARKET. 

Youiig dynamic dty baaed comp requires 
4 Fanfare n S-P-A- Qualified ladfriduals 
lo service oar existing client base of 
private lovcauHS. Dealing soJdy in UX 
Equine*- If you are between 25- JS year* 
old enthusiastic A enjoy a hard-working 
environment- Call 071-403-3212 Ref TR. 
Par an informal dificusifan. Trainee 
positions also available. 


Bank 

Credit 

Analyst 

Major international business 
information group 
launching financial 
information service in 
former Soviet Union wishes 
to recruit bank credit rating 
analyst to head own 
department. Preferably 
Russian speaking. Based in 
London but travelling to the 
region. Very attractive 
flexible package. Highly 
challenging and unlimited 
opportunity for energetic 
and talented individual. 

Write to Box A2 182, 
Financial Times, 

One Southwark Bridge, 
London SEl 9HL 


Italian Company 

" operating in the oil and ^ 
petrochemical sector is 
looking for 

SALES 

DIRECTORS 

for (he following areas: 

- U.K. 

- Middle East 

Multiannual experience in 
this sector rs requested. 




Please send yoar 
curriculum to 
fax No. +39^0-45545 


APPOINTMENTS 

WANTED 


General 

Banker 

Spanish Banker, 37 with wide 
experience of private and 
commercial banking in Europe, 
goal orientated, measured, a 
1) strong negotiator, wishes to 
develop his career in an 
international organisation that 
recognises results. 

Write to: Box A2185, 
Financial Times, 

One Southwark Bridge, 
London SEl 9HL 


Senior Director 

Private Client Portfolio Management 


Our diene is one of London’s leading private client 
investment management institutions. Their style of 
management is conservative, yet increasingly 
proactive and benefits from high levels of client 
retention, excellent performance and increasing new 
business growth. Due to this continuing rapid 
business expansion, a Senior Director is now sought 
to assist in the effective management and 
development of this growth. 

The successful applicant will be a member of the 
executive committee and as such, will contribute to 
both corporate and investment strategy. The 
individual will be expected to lead by example in 
managing their own bank of clients. 

Marketing and presentations to private clients, 
charities and pension fund institutions will be key 
functions within this role. A Familiarity 
with regulatory limitations is vital as the 


HP 


rule encompasses operational responsibility for 
compliance matter*. 

The successful candidate will have a proven career 
track record within a highly rated blue-chip 
organisation. The ability to demonstrate evidence of 
sound asset allocation decisions, with a good 
understanding of technical approaches to 
investment analysis is essential. The individual will 
be expected to have an authoritative but team 
oriented style of management ns the role 
encompasses the training and motivation of the 
portfolio management team. 

For an initial confidential discussion please contact 
Elizabeth Arthur or Paul Wilson on 07 i 831 2000 
or alternatively write enclosing a curriculum vitae at 
Michael Page City. Page House, 39-41 Parker 
Street, London WC2B 5LH. 

Pax: 07 1 405 9649. 


Michael Page City 

IntenuKtunnl Recruitment Consul tints 
London Pad* Frankfort Hong Kong Sydney 


"i 






CAPITAL MARKETS/STRUCTURED PRODUCTS 

Our client is a highly successful Capital Markets operation, jointly owned by its management and an established 
UK Merchant Bank. The firm specialises in financial engineering in the structured fixed income/derivari ves 
markets and Is renowned for its products’ technical innovation. 

As a result of expansion, the firm now wishes to recruit two technically able graduates, aged around thirty, with 
a strong knowledge of accounting and credit principles, and at least two years’ experience in derivatives 
structuring, project finance or securitisation. 

This opportunity should appeal to individuals keen to participate in a small, dynamic team, and offers a high 
base remuneration package with excellent bonus prospects. 


FOr a confidential discussion, please contact Stuart Clifford at 
The Bloomsbury Group. (Search Consultants) 

The Second Floor, Bedford Chambers, 

Covent Garden, London WC2E 8HA- 
Tel No. 071 379 U00. Fax No. 071 240 6362. 


THE 

BLGDMSBURY 

GROUP 


CORPORATE FINANCE 

TELECOMMUNICATIONS 


Highly Competitive Salary + Benefits 


CITY 


Leading International Investment Bank is seeking candidates with experience in 
telecommunications for two positions in Corporate Finance. The ideal candidate fat* the 
senior position will have: 

• Strong academic qualifications, preferably including MBA; 

• At least five years experience as an investment banker or management consultant focused 
on telecommunications, or in strategic planning/business development at a leleeoi.. 
operating company; 

• Proven record of accomplishment; 

• Fluency in one or more foreign (European) languages. 

The ideal candidate for the junior position will have a similar background, but less experience. 

The positions will include involvement in a wide range of projects (equity financing, M&A. 
advisory) and considerable exposure to clients and prospective diems. 

Interested candidates should send a curriculum vitae, in confidence, to Box No.A2l7<J 
The Financial Times, One Southwark Bridge, London SEl 9HL. 


or- 














X 


financial Times Friday October 28 1994 


went 


0 DUCTS 


Tlt» v ! 




UK Investment Management 

Private Client Liaison 


Opportunity to gain in-depth knowledge of specific and generalised aspects of the securities Industry 

and an overview of the UK Equities Markets in particular. 


The City 

Our Client, the investment management company of a B ritish 
owned merchant banking group, manages funds for UK and 
International dients. both institutional and private, as part of 
a global network. They are now launching a Portfolio 
Management Sendee For private individuals based on Unit 
Thist Investment, but not limited to in-hoose products. 
Repotting to senior management, the successful candidate 
will be involved in the initial launch of this service and wiD 
be the day-to-day contact for both existing and potential 


Mid 20’s 

Thist or Private Client area, you should have a good 
knowledge of Investment markets, administrative procedures 
and regulatory requirements. A detailed understanding of 
Unit Thist Investments is also important. This new role 
requires a sdf-motivating individual who has a tram focused 
approach with excellent communication skills. 

The position will offer a competitive starting salary plus a 
range of banking benefits, Including profit sh a r ing , and 
potential for career development. 




RECENT GRADUATE 

- CORPORATE CLIENT SERVICING 


V — — i g u/4 tfWUi faAUUUg Oliu ^UlOUkU putauinl 1UI UULU ULVOUpiUCUU 

dients, dealing with all resulting enquiries or nVFRTONI piease ta &st instance to Keith Fisher, 
requests. _ v Overton Shirley & Bany Limited, prince Rupert 

In your mid/late twenties, possibly a graduate and SHIRLEY House - 64 Queen Street, London EC4R 1AD. 
with at least three years experience in the Unit ;r— — - ■■■ ■ . TteL 071-248 0355. Fax: 071-489 1102. 

& BARRY 


CITY £14,000 - £17,000 

LEADING UK SECURITIES HOUSE 

We Invite applications from articulate graduates who should have high quality written English and presentation skills, be 
numerate and computer literate (Including using spreadsheets). As the selected candidate you wBi Join a small team 
supporting the corporate clients of a major division within the Company, specifically you will be responsible for the day to day 
production and editing of a high profile stock market Information product. There is also a strong administrative support activity 
In this role. You wfll need to make extensive use of MS Word for Windows 6 and Excel 5 and you should ideally be capable of 
programming and writing macros in these packages. Essential qualities are to have a lively personality, an analytical mind, an 
enjoyment of hardworfc, an eye for detail and strong organisational skills. You will also need the personal attributes required to 
develop and maintain client relations at financial director and company secretarial levels. Initial salary negotiable £14,000 - 
£17,000, generous discretionary bonus scheme, non-contributory pension, medical scheme, season ticket loan and 25 days 
hoGday. Applications in strict confidence, quoting reference RBG25630/FT will be forwarded to our client unless you 
list companies to whom they should not be sent In a covering letter marked for the attention of the Security Manager 

CJRA. 


INTERNATIONAL SEARCH AND SELECTION 


Banking Training 
Co-ordmator 

The Joint Assistance Unit of the Foreign and Commonwealth Office, which administers 
the Know How Funds, Britain's programme of technical assistance to the countries of 
Central and Eastern Europe and die Former Soviet Union, is seeking a Banking Training 
Co-ordinator. 

You will co-ordinate and arrange the implementation of the banking training 
programme, assist in the identification of training projects and w25 be responsible for 
thor det ailed preparation and arrangements including the selection of trainers. You will 
also monitor tfac progress of projects, including ensuring proper report in g and student 
evaluation and wQ] assist in more formal assessments of the project’s impact. 

The main countries in which you will be working are Poland, Romania, Russia, Ukraine 
and the Baltic States, in winch you will travel extensively. 

The contract will be for 1 year initially, and it is anticipated that you will be employed for 
approximately 120 days. 

Closing date for receipt of applications is 15 November 1994. 

Those int er ested should write, e n clo si n g a detailed eaxrknlmn vitae, to Mia Mary 
Jo Brady, Ref No AH367 / MJB/FT, Abercrombie Howe, Eaglesbam Road, East 
Kilbride, Glasgow G75 SEA. 

ODA is committed to u polity of equml opportunities and appUattions for this post art anight 
front both mat and women. 

CDV E 

OVERSEAS DEVELOPMENT ADMINISTRATION 

BRITAIN HELPING NATIONS TO HELP THEMSELVES 


Eastern European 
Trading/Sales Opportunities 

We are one of the leading institutions within Capital Markets and we wish 
to expand and develop our existing Emerging Markets operation in Eastern 
Europe. We require a Trading/Sales Executive with several years' relevant 
local experience, preferably gained in the region. The successful candidate 
will already possess extensive contacts in the region, especially with central 
banks and major financial institutions as well as a command of a range of 
Eastern European languages. 

The post will involve extensive travel to Eastern Europe and daily liaison with 
English speaking sales teams and syndicate desks on a global basis. 
Competitive compensation package. 

Confidential enquiries should be addressed to our consultants 
GMBM, 27 Floral Street, London WC2E 9DP. 

JAPANESE NATIONAL SALESPERSON 

Major Internationa! Broker seeks a Japanese National Salesperson with 2/3 
years experience in the Securities industry. Preferences will be given to 
candidates who have JGB/Fixed Income debt exposure. 

The salary will be commensurate with the successful candidates ability and 
experience for this challenging role in JGB sales. 

Write to Box A 2160 , Financial Times, One Southwark Bridge. London SE 1 9 HL J 

LIVE BUSINESS NEWS 

FINANCIAL TIMES TELEVISION fas expanding. Rom January next year it will produce 
more than six hours of financial news, analysis and comment for global markets. We are 
expanding our editorial team, and welcome applications from those with a strong financial 
news-sense able to produce or present breaking stories and other business trends to investors, 
decision-makers, executives and all those interested in money. We also seek technical and 
support staff. Specifically: 

Otrmrr editors Producers Refoktebs Researchbbs 

Directors PAs VTENTORS CAMERA CSSffS 

Tape Librarian Ewtorial Secretary Grambcs abxists Systems 

SOfTORT 

Arabic Speaking Presenter Junior Technk3an 

Send one page with evidence that you have a positive altitude to multi-skilling, that you can 
work in a team and that you can do the job. Applications for editorial posts should also give 
their views and ideas on financial programming in the current competitive environment 
Post or fax an up to date CV to Stanislaus Joseph, Financial Times Television, Teddington 
Studios, Broom Road, Teddington TW 11 9NT, England. Fax 44 - 81 - 614 - 257 L 

FT 

FINANCIAL TIMES 
television 

npportimiry mipkryerajvia division (^TkamesTelrvisuin Ltd 


Equity Sales 

South East Asian Region 
Aged 25-29 


Ourc&exs; a ™»j»w British-based mmunoml 
stockbroker with an amnsive range of ovatieas offices, 
has a number of vacancies for sales professionals to join 


The firm plays a major role in arising ctg«y and lo n gnctm 

fi i mm u wvj ( WiWK WWpMliM infMing lllfl«l! 

from Am and is su pp orted by a tridc range of research 
documents produced from our efientfr Asian offices. 

Candidates aged 25 - 29 should have a high standard of 
education and be comcmnt with at least three of the 
Aaan economies, one of which should be Hoag Kong. 
Ideally, they should have had an ■ceoanoney or reseudi 
Wft r g rn m vt, m mMi* riwti m lAtain maiiim m benefit 


This k a career apponmmy and cafls for confident; 
presentable, sdf-morivared individuals with first dass 
m m mii nira rinn «nd iti>» ability m mnrk in a 


Mm i»i w mMnn wif- 


Piease apply to Jock Courts, Career Plan Ltd, 33 John's 
Mews, London WC1N2NS-Tefc 071 242 5775. 

Far 071 831 7623. 


. Persmxnd-Cormiltants . 


FUND MANAGER 

Package to £45,000 
Berkshire has an enviable reputation for sound 
and prudent management of its superannuation 
fond investm e nts. This is an ideal opportunity 
to make a significant contribution to the future 
direction and performance of the Berkshire 
Superannuation Fund. 

In this demanding role, you will supervise a small 
internal investment team, personally manage 
an indexed portion of the UK equities portfolio, 
and m pnitg r external managers of the remainder 
of tiie UK equities and the overseas equities 
portfolios. Ideally, you will have experience of 
investment portfolio management and knowledge 
of international Markets. Reporting directly to 
the County Finance Officer and responsible for 
maintaining a continuous review t>f the Fund’s 
asset allocation strategy, yon will report and make 
recommendations to the Investment Committee 
as appropriate. 

For an informal discussion please ring 
Ian Thompson, County Finance Officer on 
0734234102. 

Application forms can be. obtained from 
Carolyn Barnard, Royal Comity of Berkshire, 
PO Box 900, Shire Hall, Shinfield Park; 
Reading, Berkshire RG2 9XA, telephone 
0734 234231 (24 hoar fox/answerphoae^ 
quoting reference 8513. jm ? 

Closing date: 14th November 1994. 

We offer a no smoMngwprkmcmnvra^^eg ^j 
AN EQUAL OPPOKftffijfcr EMHjKflgiSi ! 


Royal Co! 

BERKS] 


[MARKETING MANAGER | 

FINANCIAL SERVICES 
Luxembourg 


Lombard is a dynamic Pan-European life insurance company 
specialising in marketing tax efficient investment products in me 
upmarket sector, through independent financial advisors and 
private banks. 

Formed in 1991 to take advantage of the single European market, flu* 
company has now established a strong niche position in Germany, 
France, UK, Benelux countries and Sweden. 

A Marketing Manager is now required to take responsibility for aO 
marketing and sales support functions. 

Essential credentials for this key position indude: 

•Fluency in EngDsh, German and French. 

•A successful track record in marketing. 

•Experience in die financial servioes/in vestment industry. 

Tbs position offers an exceptional opportunity hi a highly sucess- 
ful marketing driven company. 

XgN Contact John Stone, Chief Executive 

f'Jvgf on (352)346191 or send CV to Lombard 
VJg International Assurance 5LA, Airport Center - 

LOMBARD 2 route de Trfrves -L 2633 Sermingerberg- 

:-,V.-.Y.': : ■ ; * GJ3. du Luxembourg 




\ 


ANALYST/FUND MANAGER 

"A rare and exciting opportunity Tor an experienced analyst to ace 
him/her ski Ho to focum on the growth markets of Asia" 

Our City based client Is an investment house managing international 
mandates for North American Institutional clients. The company has 
enjoyed considerable growth in recent years and In line with continued 
expansion an analyst/fund manager is now required to strengthen the 
Far Eastern team. 

The role will involve the detailed analysis of companies In Aslan 
markets which forms the basis for the key stock selection decisions for 
portfolios. In addition to regular travel to the region there will be client 
contact and potential Involvement In new business presentations. 

Candidates should be graduates. Ideally with a further professional 
qualification and several years experience of analysing equity 
Investment opportunities not necessarily within the Far Eastern 
markets. Language skills would be an advantage. Excellent 
communication skills are essential. 

An excellent remuneration package Including significant profit share 
potential Is available for the successful candidate. For an Initial 
discussion in confidence please contact us quoting reference 4966 at 
20 Cousin Lane, London EC4R 3TE. Telephone 071-236 7307 or 
Fax 071-489 1130. 

STEPHENS 

SELECTION 


I A STEPHENS GROUP CONSULTANCY I 
IMm Utta# few Ink Tokj* I 


TRAINING CONSULTANT 


Our client a leading international training consultancy, is seeking to expand 
it's training team. The role is a varied one, offering the individual considerable 
autonomy, intellectual challenge and extensive foreign traveL You will work 
as part of a small team and must be self motivated; have a strong academic 
background; excellent communication skills; a lively, outgoing personality; 
and a familiarity with computers. Additionally, you should have a sound 
technical knowledgeand understanding of capital markets and/ or derivatives 
and be prepared to present courses in this area. Although previous training 
experience would be of interest, it is not a pre-requisite. 

If you are interested in das challenging role, please send your c.v to: 

Helen Highet at Jonathan Wren Executive 

Jonathan Wren k Co. Limited, Financial Recruitment Consultants 
Na 1 New Street, London EC2M 4TP TeL 071-623 1266 Fax. 071-626 5259 


KQumr jf^o2vx> 



Primary responsibilities will Include the management of unit linked 
Life and Pension Funds with an emphasis on overseas markets. In 
addition input to strategy and asset allocation decisions will be 
expected. 

We require a graduate with sufficient experience and/or 
qualifications (UMR or equivalent) to hold threshold competence for 
IMRO purposes. He or she must be able to work on his or her own 
initiative but still be a team player in a small department. 
Experience of unitised funds would be a considerable advantage. 
The position would suit either an Analyst looking to move into 
Fund Management or an existing Fund Manager. 

Write with full C.V. and current salary package to Janet Greenland 
PREMIUM LIFE ASSURANCE COMPANY LIMITED 
Premium Life House, 37-39 P en y m ount Road. Haywards Heath. 
West Sussex RH 1 6 3BN 


+ 


lin PLUSPETROL is an Argentine-based oil and gas corporation 
engaged in exploration, production and refining operations, both in Argentina 
and Internationa fly. A continued growth in our international business activities 
has prompted the need for a Qualified Corporate Finance Specialist to fill the 
position of ASSISTANT TO FINANCE MANAGER. Successful candidates will 
possess the following attributes. 

- Outstanding academic background with a Degree in Economics. Finance or 
Accounting advanced mathematical knowledge, and PC literary. 

- Minimum of two Year's experience in an International Project Finance/Capital 
Markets/Corporate Banking environment. Relevant transactional experience in 
the above-mentioned areas, as well as a formal credit training (Including a 
thorough and broad knowledge of all financial instruments) is preferred. 

Strong analytical skills are also essential for the position. Qualified candidates 
should be able to carry out responsibilities with limited supervision. 

- Perfect fluency In English and Spanish is a must and working knowledge of 
French is a plus. 

- Excellent communication skills and ability to negotiate Project Finance 
packages with International Investment Banks/Multilateral Agencies are a pre- 
requisite. 

This position will be based in Buenos Aires, and a knowledge of the 
Argentine business environment will be an advantage. 

Qualified candidates should send resume, salary history and expectations to: 

PLUSPETROL. S A. -Hu m an Resources 
La Rioja 301 

(1214) Buenos Aires, ARGENTINA 
Fas (514)956 1441 
NO PHONE CALLS PLEASE 






36 


FINANCIAL TIMES FRIDAY OCTOBER 2S l W4 


ACCOUNTANCY 


A sector in turmoil needs a guiding hand 

A recent study into UK accounting practice has mixed feelings about the ASB. Jim Kelly reports 


T he publication today of Ernst 
and Young's massive inquiry 
into the state of British 
accounting marks the fourth edition 
of what is arguably the most 
comprehensive review of its 
kind. 

At 1,6X0 pages the book UK GAAP: 
Generally Accepted Accounting Prac- 
tice in the UK, does more than justice 
to the 500 large companies which pro- 
vide the raw material in the form of 
their published accounts. 

Originally designed to satisfy the 
in-house accountants at Ernst and 
Youn g wanting to know the realities 
of applying standards and rules to 
company accounts, it now has a wider 
audience. 

With a sales target of 10,000 - com- 
pared to 8,000 In 1992 - it will this 
year be taken to the university-stu- 
dent market. It is a standard refer- 
ence work - but it is also more than 
that, and therein lies its power. 

The detailed study of accounting 
practice on which it is based gives the 
authors a unique insight into what 
worries, confuses, or angers Britain's 
leading financial directors and their 
teams. 

The verdict of the authors is stark: 
“In spite of the best efforts of the 
Accounting Standards Board, finan- 
cial reporting in the UK remains in a 
state of some turmoIL” 

According to the authors, wrangles 
over issues such as goodwill and 
brands reflect a conflict of interests 
between preparers and users of 
accounts. 

“If the ASB is not able to find 
acceptable solutions to these issues, 
the possibility remains that the regu- 


lation of financial reporting will be 
taken out of the hands of accountants 
and placed with a body less sympa- 
thetic to the interests of the accoun- 
tancy profession.’' they wam. 

The book hardly promotes harmony 
by then attacking the ASB: its new 
standards are too complex to absorb, 
or too hastily drafted and over-simpli- 
fied. A gap looms between theory and 
practice - particularly for small com- 
panies. 

While the picture in terms of regu- 
lation seems dire, the authors find - 
oddly - that the accounts of large 
flom ps taj pg have hardly been better. 
Not only are statistical cores of finan- 
cial statements improving, but so are 
their accompanying narrative sec- 
tions. 

This state of affairs Is put down to 
the ASB’s development of the operat- 
ing and financial review (OFR). The 
Cadbury Committee on Corporate 
Governance adopted the OFR as a for- 
ward-looking assessment of a compa- 
ny’s health. 

It should contain analytical discus- 
sion and a review of trends, and be 
clear, succinct and understandable to 
the “general reader”. It was published 
by the ASB as a statement of best 
practice in July 1993. 

UK GAAP also considers the quest 
for a conceptual framework for finan- 
cial reporting. like the holy grail this 
is much sought after, particularly in 
the US, but rarely glimpsed. The 
authors ttank they have the measure 
of the ASB's own statement of princi- 
ples - and they don't like the look of 
it 

“What we see is an approach which 
is radically different from that applied 


by most companies at present one 
which focuses attention on the bal- 
ance sheet and measures performance 
by the total movement in equity.” 

The authors of US GAAP believe 
that the founding principle of UK 
financial reporting is historic cost 
accounting with current values sup- 
plied only as extra information. They 
envisage accounting centred on trans- 
actions in the past, not assets 
and liabilities on the balance 
sheet 

The authors believe the ASB does 
not realise how fundamental the dif- 
ference is between the two 
approaches and it urges the board to 
stop now and reconsider. “There is no 
point in adopting a framework on the 
basis of its apparent theoretical 
appeal, only to find that It then 
results in accounting standards that 
no one wants.” 

T he authors deserve some credit 
for not leaving the argument at 
that point They acknowledge 
that the ASB has done some coura- 
geous and valuable work. While they 
disagree with its statement of princi- 
ples, they suggest a hybrid set of the 
same should be produced, incorporat- 
ing more than one accounting model. 

This plan. a certain degance. 
Different sets of users would be pro- 
vided with differe nt accounts, tailored 
to their needs, «rt»»niy not contain- 
ing less information but rather the 
right info rmatio n in the right fo rm 

The data could be shown as “multi- 
column reporting" or “layered" 
accounts. 

Among the hundreds of other issues 
tackled in the book is the so-called 


“big GAAP/little GAAP" - the debate 
over whether small companies should 
have fewer rules, no rules, or different 
rules to those of big companies. The 
authors show that efforts to set up 
two sets of standards, such as a Cana- 
dian attempt in British Columbia, 
contain “insurmountable difficulties.” 

At present the UK profession is 
awaiting publication of a special 
working-group report on the issue 
chaired by Ken Wild of Touche Ross. 
AH the indications are that it will 
propose a draconian cutting back of 
regulations governing “ small ” compa- 
nies - those with an annual turnover 
of less than £2£m. 

The authors of UK GAAP think this 
is a mistake. They consider size an 
arbitrary criteria. Instead they see a 
division between large companies and 
owner-managed companies. After ail. 
they argue, small companies are not 
just simpler versions of big compa- 
nies. The users of their accounts have 
quite different needs to the average 
shareholder. 

“Companies with a limited number 
of [management] members, all 
involved in the day-to-day operations, 
should be able to incorporate under a 
different and specially designed lim- 
ited liability regime," says the book. 
The users of owner-managed company 
accounts are internal, bankers or the 
Inland Revenue. The accounts should 
be different to fulfil their needs. 

UK GAAP also reviews the progress 
of the various accounting standards 
introduced in recent years. The story 
of FRS 3 is instructive and a gain illus- 
trates the authors’ uneasy admiration 
for the work of the ASB in contrast to 
their impatience at the shortcomings 


of aspects of the code it produces. 

FRS 3 virtually abolished extraordi- 
nary items and brought all remaining 
SUCh Charges above the earnings line, 
as well as introducing new disclo- 
sures. It changed the face of the profit 
and less account. 

Unfortunately it appears that some 
companies are over creative within 
the new framework. “It seems that 
the market is often too easily misled 
by some companies' Innovative use of 
FRS 3’s layered approach to the profit 
and loss account to divert attention 
away from the overall total result for 
which management is accountable." 

The authors see this as part of a 
“jousting match" between the ASB, 
which wants the accounts to portray 
the overall picture, and parts of the 
financial community, particularly 
analysts, who still fell hungrily on a 
“magic number” in the accounts that 
they trust will reveal all. 

Finally the authors see in FRS 3 the 
first “manifestation of the ASB's bal- 
ance sheet approach to income recog- 
nition as outlined in the statement of 
principles." The standard, they say, 
focuses on changes in wraith rather 
than traditional historical cost 
accounting. They object to this con- 
cept being entrenched in UK practice 
without proper debate. 

The debate, wherever it rages, will 
be better for this book. But one has to 
spare a thought for the authors, 
already contemplating the gigantic 
task of writing the fifth edition in 
1996. 

UK GAAP: Generally Accepted 
Accounting Practice, by Mike Davies, 
Ron Paterson and AUisler Wilson, is 
published by MacmiUan at £4S.95p 





' . . . 


!r-. 


3 


News Programmes 

Management Accountant 

nnr Mmuc Pmomnimes is swking 


BBC News Programmes is swk»»M. » ■ * s -- 

Accountant to work in Its Television d finance * ;s 

The Sole: reporting to the 1,u5,n ■ ’ 1 ^. for the • 
Manager, the Management Accountant h .S, ulpnW , 
timely production of monthly operat n ■ * " p , fh " 

including commentary. This email' wguLu ’ 
programme management io ensure accur.u j .inu . 

completeness of information. f ‘?SS raiSS nV 

against budget and investigate and identify tl\ . .. * 

Smccs-Thc role also inchidcs Vision rfjjd A 

Information on Onanrial performance ami i : - 
preparation of budgets. News Programmes Is a . j '• . 

dSutmcm. and the ii»aM «*** M 

to woric In the Radio office at Broadcasting! liHlsC. 

Experience: Candidates should be qual'lM ‘ 

preferably with experience in the production ofm.in.igi nu l — 
StroSSon. Theyshould have a pro-active “jj -v 

only able to identify problems, but also w ' •JWgJJIJk. 
Implement solutions. An ability to communique » »rt> , 

at all levels, within the BBC and outside. Is key. •: j 

Experience of the broadcasting industry wu ’*, - ;» 

advantage, as would an Interest In News :tnd c unvitl ■ ■ ■ • - ' 

and anunderetanding of die editorial priorities oTpmiiranuMt 

ma SsSLy range is up w £27.3)2 p a. bm may be negotiable -T 

for the right candidate. London freed. : j 

For an application form send a postcard Iguou rer. ^ 
lfflaVF) by November 3th to BBC ; - 

PO Box 7000, London W12 7ZY. Tel: 081-749 .000 
ftfinlcom 081-752 5151. v , .... 

Application tonus to be retumedby ' 

WORKING FOR EQUALITY OF OPPOKTlWiTY 

-Li.— : 


An international leading diamond trading and manufacturing group 
has a vacancy located in Luxembourg for a 


Stock auditor 


The successful candidate will have the following profile. 

I] 25 -30 yea t\ old: 

2) University Degree. in Busincss/CommerCe with specialization in Finand.il 
accounting a Auditing: 

3] Experience or at least 5 years as a diamantairc with an international 
diamond company of which at least 2 years as stock auditor. 

4l Knowledge oF English and at least one Indian language is rccvssaiy. Enjoy 
travelling, he can expect to travel 6 months in Hie year for audit purposes 

Pol Wirtz & Partners. 

1 HI HUM X N HI sPliKlv t, rj\M. I 1 \H l N 

JJ Alice Scheffer. L- 25^0 Li/xemboun/ 


FINANCE DIRECTOR 

A key role in the acquisition and restructuring 
of a major service business 


The Company 

■ Major blue chip parent group with 
strong growth and profit record 

■ Engaged in the acquisition and 
development of a substantial service 
business 

■ High quality, service profile 

The Role 

■ To provide proactive finance support 
io the Chief Executive of a newly 
created business 

M To build and develop the finance 
function 

■ To become closely involved in the 
acquisition negotiations 

■ To take ongoing functional management 
responsibility for the resultant business 


Johnson W ilson ImornnrioiKil 

ni ‘tin'll ■ select itm ■ hiim.in ci'.winirc.s 


The Profile 

■ Qualified accountant with clear 
achievement record 

■ Experience in acquisitions and 
their integration into the business 

■ A high degree of commcrciaJ 
acumen 

■ Weil developed interpersonal 
skills and an open, devolved 
management style 

The Opportunity 

■ To join an exciting, high potential 
business at an early stage in Us 
development 

■ To become part of a highly 
successful group offering broad 
career prospects 


£ 65,000 
+ Car 
+ Benefits 

West London 


Please send 
JitU CV quoting 
salary and 
reference 454 TT 
to:JWI 

Clarendon House 
Hyde Street 
Winchester 
S023 7DX 
09623*4242. 



Project Accountant 


Major Media Group 

City 


To £40,000 + Benefits 


Our client is a prominent, progressive UK pic which occupies a dominant position in publishing and other 
media. Recognising lhe importance of management information in enabling it to drive forward its operations 
with maximum efliciency. the Group is introducing key performance measures throughout the business. 
Attention has recently focused on the production department, where current changes include the introduction 
of new costing systems and strengthening ot local llnancial support 

The magnitude of the project has created the need for an 'internal consultant* who will act as a focal point and 
provide the link between senior production personnel, the finance department and external consultants. The 
ability to facilitate fruitful collaboration between these parties will be a critical success factor. Upon completion 
of the production project, your skills will be deployed In other functional areas of the business requiring the 
introduction of performance measures. 

You must be a 'Big Six' trained graduate ACA, aged late 20's - early 30’s, who has subsequently spent at least 
2 years in the consultancy division ot a major firm. Media knowledge and familiarity with production costing 
systems, though useful, are less important than experience of developing performance measures, a thorough 
understanding of IT systems and project management skills. Success in this pressurised, highly visible role will 
undoubtedly lead to other opportunities within the Group. 

Please write, in confidence, enclosing full career and salary details, Io Tim Knight, quoting reference TCK/2710. 


kPMG 


Selection & Search 

1-2 Dorset Rise, Biackfriars, London EOIY 8AE 


C. £40.000 


West Bad 

~d' 


3D animation and production 

EXCESS Is the most advanced provider of Design. Graphics. 3D Animation and Digital Compositing In 
Europe. Following the opening of Its new facility In Dean Street we are seeking a qualified accountant for this 
new role as a key member of the board. The role carries responsibility for all aspects of financial 
management of the business and the candidate should have the personality to be able to deal with clients 
from the media industry. 

Practical experience of commercial management in an operating company within a service business is likely 
to be an advantage. Candidates should be computer literate and capable of setting up effective systems for 
controlling all aspects of a growing business. 

Applications taCA Maxwell, Venture House, Davis Road. 




Assistant Treasurer 


Major Financial Services Group 


To £65,000 + Benefits 


London 


Genuinely strategic level treasury role at the heart of one of Britain's largest financial 
services groups. Opportunity to develop innovative risk management concepts. 


THE COMPANY 

♦ Market leading, quoted British financial services group 
with subsidiaries worldwide. 

♦ Rigorous, analytical corporate culture. 

THE POSITION 

♦ Non-routine, project based rote embracing global 
balance sheer strategy, portfolio risk management, 
foreign exchange and interest rate management, 
funding and capital markets. 

♦ Reporting to Group Treasurer, with active 
involvement In banking relations. 


♦ High profile position with great personal responsibility 
and career development potential. 

QUALIFICATIONS 

♦ Aged 28-35. first class academic and professional 
qualifications. Exceptional numeracy, literacy and 
modelling skills. 

♦ Broad knowledge and experience of financial 
instruments, banking and markets. 

♦ Decisive, energetic, task-oriented self-starter. Strategic 
thinker with thorough analytical approach. 


Please send foil cv, stating salary, ref HN4255, to NBS, 54 Jermyn Street. London SWIY 6 LX 



NB SELECTION LTD 
i BNB R^socrces pic company 



LONDON 071 493 b392 
Aberdeen 022* 6JSSSQ • Birmingfum 021 2J3 4654 
Bristol 0272 291142 • Edinburgh 031 220 2400 
Glasgow 04] 20* 4334 • Leeds 05 ? 2 *53830 
Manchester CM5 539953 • Slough 0753 R 1 9227 



From computer 
audit/consnltancy 
to a major 
international group 

IT AUDIT 
MANAGER 

London 

c£45,000 + car 


Our client, Pearson pic, is the parent company of a 
worldwide media group whose principal operations 
are in the fields of book and newspaper publishing, 
entertainment, television and investment banking. 
The group will continue to grow both organically and 
through acquisition, which may be international. 

The IT Audit Manager will work as a member of a 
small professional team responsible for the audit of 
the group’s activities outside North America. Provid- 
ing constructive and commercial advice on IT, 
financial, operational and business systems and 
controls to both group and subsidiary management, 
he or she will carry out all aspects of assignments. Ad 
hoc projects might include IT strategy studies and 
acquisition reviews. The internal audit function is 
highly regarded and has established a track record of 
promotion to senior line management positions in 
the subsidiaries. 

Applicants should be graduate chartered accountants. 
In depth experience gained in either computer audit 
or systems consultancy is essential and ideally 
should include significant exposure to pc networks 
and mid-range based systems. 

Please write, enclosing a career/salary history and 
daytime telephone number, to David Hogg FCA 
quoting reference H/119/F. 



GERMAN SPEAKING 

financial Controller 

Experienced management accountant needed 
fer an assignment in Germany to act as Financial 
Conlrofter of a German subsidiary’ of a UK company. 

Candidate must speak fluent German ana' be fully 
conversant with modern accounting practices and the 
use of computer spreadsheets. 

Apply to: Mr D G Rogers, Managing Director 
Carbon Link Ltd.. Sterling House, 

2 Park Street. Wigan WN3 5HE, UK 




CHIEF 

ACCOUNTANT 

Chief Accountant (FCA or FCCA) 
required for a fashion retail and 
wholesale business, based in SW6. 
Age 35-45. Salary - £45k + 

Retail experience an advantage, 
initial replies to: 

R. Grant, 37 Stanmore Hill, 
Stanmore, Middlesex HA7 3DS 


b 


J 


JT- 






FINANCIAL TIMES FRIDAY OCTOBER 2$ 1994 


37 


Finance and 
Planning Director 


Wiltshire 


Attractive salary + car + benefits 


Swindon 


Council 


Since Its establishment in 1991. Wiltshire TEC has built a 
L?' e m cconamic development of the county, 
worlong with many partner organisations to deliver high 
9F a 'v ^ a ™ n & education and business support services. 
The challenge now faring the TEC is to build on its 

WilteWra 6 "* 5 ^ ***** drive for prosperity in 

Following a review by the Board of the TEC and its 
recently appointed Chief Executive, an outstanding senior 
manager is required to play a key role in developing the 
strategic direction of the TEC K 6 

Reporting to the Chief Executive and leading a team of 15. 
the Finance and Planning Director will be 
responsible for a broad range of activities 
which will ensure the TEC helps to sustain a 
dynamic local economy. These include 
strategic, business and economic planning; 


accessing European development hinds; managing ail 
aspects of the finance function, including MIS; and 
overseeing the quality assurance, audit, and health and 
safely aspects or the TECs work with 'client' companies. 
Probably aged in their 30s to mid 40s, candidates should 
ideally be qualified accountants or MBAs, currently at 
Finance Director level or in a senior strategic planning role, 
with broad-ranging finance and planning experience. 
Although financial services/ venture capital type 
experience would be useful, it is not mandatory, as we are 
more interested in the contribution candidates nave made 
at a strategic level in their careers to date. Strong 
leadership, planning and interpersonal skills wifi be 
essential, together with the flair and ingenuity to develop 
original approaches to the TECs role. 

Please send a foil CV in confidence to 
GKRS at the address below, quoting 
reference number 333J on both letter and 
envelope, and including details of current 
remuneration. 


SEARCH & SELECTION 

CLAREBELL HOUSE, 6 CORK STREET, LONDON WIX IPB. TEL: 071 287 2820 
A GKR Group Company 


• ■ < 


*:*.W 


S . 


-fi* 

;SH8 

3W§ 


tiffin 




.KSil 


i ■ -r * 

'tSV.sp » 

* *' -i ftiintiTV 


Finance 

Director 

Commodities 

Trading 

Multinational 

Based: London 


c. £90, 000 
Package 


An outstanding opportunity exists for a candidate of the 
highest calibre to join our client, a multinational company 
trading metals and chemicals across the globe. 

The successful candidate will possess: 

• Extensive trade and counter-trade finance expertise 
gained in established and emerging world markets. 

• Strong banking relationship management and 
negotiation skills including obtaining and expanding 
credit facilities. 

• A lateral thinking proactive and self motivated approach 
coupled with a ‘hands on’ style of leadership and 
management. 

• The ability and experience to oversee and direct all 
aspects of financial and management accounting and 
treasury functions. 

The position offers a unique opportunity to become an 
intrinsic influence on the continuing success of this 
progressive company. 

If you meet the above criteria and would enjoy the challenge 
of working in an environment which seeks and rewards 
excellence please contact: Deirdra Moymhan on 
071 5S3 0073 or fax your CV on 071 353 3908 or write to 
16-18 New Bridge Street, London EC4V 6AU. 

BADENOCH 8^ CLARK 

recruitment specialists 


Senior Financial Analysts 

Qualified Accountants for challenging new 
opportunities within a commercially driven 
International Bank 

To £36,000 Tax Free + Substantial Benefits 
Based Jeddah - Saudi Arabia 


The National Commercial Bank is one of 
Saudi Arabia’s leading financial instiru cions. 
They have a network of over 200 branches 
located throughout the Kingdom and also 
internationally which provide a 
comprehensive range of retail financial 
services. Major activities also include 
corporate banking, hind management and 
treasury services, dealing in an increasingly 
complex array of products. 

The bank is undergoing a period of rapid 
development which has faulted in a number 
of initiatives including an aggressive 
automation programme, an emphasis on 
business efficiency and the development of 
innovative new businesses. 

As part of this development they are seeking 
to appoint two Senior Financial Analysts in 
the following areas. 

MANAGEMENT AND 
BUDGET REPORTING 

There arc two elements to this role. First, the 
bank is developing a fully integrated MIS 
System from which you will extract and 
analyse a wide range of data including 
consolidated financial data and product 
profitability. Secondly you will deal with 
budget reporting for all profit and cost centre 
divisions. 


ACCOUNTING SYSTEMS 
DEVELOPMENT 

You will be responsible primarily for the 
ongoing development and testing of the new 
systems including the fully integrated MTS 
System. Further to this you will design and 
build derailed MIS reports. 

For both of these roles you will be a qualified 
accountant with at least 3 years post 
qualification experience, highly computer 
literate and ideally with exposure to a banking 
environment. 

In return for your skills and commitment, the 
bank is offering employment on a two year 
contract basis, renewable by mutual 
agreement. The package includes a rax free 
salary payment of all medical expenses, free 
family accommodation, provision of annual 
home leave air tickets and 30 days annual 
leave. 

For further details and to arrange an 
interview, please contact Tun SandweU at 
Barclay Simpson Associates, 

Hamilton House, 1 Temple Avenue, 

Victoria Embankment, London EC4Y OHA. 
Telephone 071 936 2601. 

INElWTIQnflLnHTRIKRQRLBRnK 



Qrca £ 60,000 + benefits + relocation 


Benelux 


Our client is one of the world's leading providers of logistical and air 

transportation services. Continued investment and growth has led to new 
position offering great potential for a high calibre, proactive audit 
professional within a dynamic entrepreneurial business. 

The appointment : 

■ Investigate and analyse all business areas. Audit sophisticated 
computerised and operational procedures. 

■ Monitor reporting procedures. Work with business units, on asset 
verification, minimisation of risks, errors and potential for fraud. 

■ Work dosely with Management Board and external auditors. 
Implement new working practices. 

The requirements : 

■ Well qualified and experienced internal auditor - preferably from 
technology intensive background In travel and/or logistics sector. 

■ Outstanding analytical and communications skills. Ability to present at 
highest level and win support for change. Aged 35 to 45. 

■ Highly self motivated with drive and motivation to develop new role 
within competitive fast moving environment 

■ Fluent in English + knowledge of French or Gentian is desirable. 


Please send your c.v. 
mentioning ref. 88-1 3-1 to 



K/F ASSOCIATES, 
Avenue Louise 523, bofte 25, 
B-1050 Brussels. 


K/F ASSOCIATES 


p|\ ISJON 4 »• M >R 


OKMIHH'i r \KIU (iKlUN INTl fiV U'H'A U 


FT/LES ECHOS 

The FT can help you reach additional business readers in France. 
Our link with the French business newspaper, Les Echos, 
gives you a unique recruitment advertising opportunity to 
capitalise on the FTs European readership and to further 
target the French business world. 

For information on rates and further details please telephone: 

Philip wrlgley on +44 71 873 3351 


BUSINESS 

DEVELOPMENT 

MANAGERS 

Innovation 
Breeds Success 

Nationwide 


Outstanding Benefits 
Package 


This dynamic UK pic is a major force within the fast moving 
retail market. Vision, commitment, determination, innovation 
are qualities that have transformed this long established UK 
retailer into the enviable position of a recognised market 
leader in its chosen field. Impressive progress to date has 
been based on the ability to implement new initiatives in 
technological advancement, trading and operational innovations 
and on its reputation for having outstanding career orientated 
professionals relishing the opportunity to contribute to 
change and impact on performance. 




Exceptional growth plans coupled 
with a determination to further 
improve operations and profitability 
has led to a number of Business 
Development opportunities 
across the UK. 

Specifically you will: 

- Provide value added financial 
support and guidance by 
identifying key trading issues 
and developing relevant 
strategic initiatives. 

- Be responsible for business and 
operational planning measurement 
and enhancement across a wide 
range of performance indicators. 

- Actively develop new business 
opportunities and project manage 
assignments to improve trading 
and operational results. 

Suitable candidates will have 
outstanding qualities. You will have 
a blue chip background as well as London - readlnc - guudford . st. albans 

r , ? . . I UXBRIDGE - BRISTOL • BIRMINGHAM 

a strong academic record including bologne - cologne • Lisbon • Madrid ■ paris 


ideally an MBA or Accounting 
qualification or similar. You wiii 
demonstrate high motivational 
qualities, a strong commercial 
outlook and be capable of 
inspiring confidence at all levels. 
You will be rewarded by a truly • 
progressive career. 

Interested candidates should write to 
Michael Herst or Charles Austin 
enclosing a full Curriculum Vitae 
quoting reference MH480 at 
Harrison Willis Search & Selection 
Partnership, Cardinal House, 39-40 
Albemarle Street, London WIX 3FD. 

HARRISON 
■*** WILLIS 


s l A H < H \ s F I F f 7 I () \ 


Moscow 


Package to 
USS8D,000 


Manager - Financial Analysis 



DIRECTORS 



SEEKING A NEW ROLE? 


Europe's leading outplacement and career management consultancy, Interface, 
has nearly 20 yeas' experience of managing career change for senior executives 
and many of Britain's largest companies. 

By accessing over 6,000 unadverdsed vacancies a year, mosdy at £40- 150,000 
pjL Interfile provides clients with Weal market intelligence AND Its subsidiary, 
InrerMex, makes recommendations from its candidate bank without charge. 


X E C 


Call Kdfh MKhcU 
on 07 1 930 5041 

19 Oaring Cro» load, London WC21 1 OfiS 


Saodra CoMdlo ,'cdOAj 
Od»l22$B4M ^ 

63 Conge Street Edinburg* ElETyG 


THF IKS LARGEST SO FRO: Of l_ \AI)VF R TISFl) VACANCIES 


ACCOUNTING SUPERVISOR 

Gradoatc/Part Qualified CEMA 
requited by a large Cily based US company 
dealing in FX settlements and Futures & Options. 

Would suit competitive go-getter looking for car e er advancement. 
Exp in financial services industry css. Age 23-27 yis. 
Computer literate, to advanced Macro level Lotus 123. 
Position requires extreme Initiative and sc I r motivation. 

Salary neg hac, Etc bens and study pkge available. 

Please send cv in strictest confidence to: 

Ms. Dawn Skinner, Personnel Manager, 4th Floor, Plantation House, 
Mincing Lame, London EC3M 3DX. Quoting rtfi D/303 


The Company 

A diversity of vision has taken this multinational corporation into many new and exerting markets 
worldwide. They have committed to numerous major projects in the former Soviet Union over the past six 
years. A US$ muhi-billion turnover puts them in the top 20% of Fortune 500 companies. They have focussed 
on developing telecommunication infrastructure and services for existing and new customers. A landmark In 
their long-term expansion of the F5U market has been considerable participation in developing three digital 
gateway switches improving international access immeasurably With extensive involvement in the 
nationwide 900 MHz GSM digital cellular service, this company will build on its profile throughout the region, 
and in so doing, enhance its global activities. 

The Position 

As Manager of Financial Analysis your role will be key in planning the development of business activities and 
evaluating opportunities. With a direct line to the Executive Director of Finance you will contribute in the 
areas of finanaal business planning for joint ventures throughout the FSU, you will analyse and assist in the 
negotiations of financial terms relating to the establishment of a new business unit, evaluate the 
contributions of the Joint Venture partner and coordinate the ongoing planning process between each unit 
and the corporation. 

The Person 

Ideally with an accounting qualification your experience to date will have been in an analytical function with 
exposure to 'what-if and multi-option decision making scenarios. With a background preferably gained 
within a similar technical environment, your brief is to further develop in a high growth potential, 
international arena. Complementary skills would be an understanding of this country's culture and an ability, 
however slight to communicate in Russian. Key personality characteristics are drive, motivation and a 
willingness to create method and order in an unsophisticated environment Few jobs offer such challenge 
and range of activities. 

Please send a full resume with covering letter to the address/fax below quoting reference FT2444 on all 
correspondence. Applications will be treated in the strictest confidence. 


Antal International 

Executive Recruitment 

8 Alice Court • 118 Putney Bridge Road • London SW15 2NQ 
Tel; +44 (0) 181 874 2744 • Fax: +44 (0) 181 871 2211 
LONDON • BUDAPEST • WARSAW 










38 


FINANCIAL TIMES 


FRIDAY OCTOBER 


2 S 1994 


Performance Improvement Consultancy 

London • Manchester • Birmingham • Leeds 

Consultants, Managing Consultants & Directors 


Price Waterhouse Management Consultants is a work! leading management consultancy Tkp CanHlflatp 
practice. The European firm is represented in all major commercial centres, linked into 
an international network of specialist sector and/or skill-based expertise. 


The Role 

Typically. Price Waterhouse consultants will undertake large scale, multi-discipline 
change management projects on behalf of major corporate clients, either on a national 
or international basis. The key product differentiator is the firm's ability to work wirh its 
clients to implement successful change, rather than just to identify the need 
and recommend an appropriate strategy. 

The prime remit of the consulting staff, therefore, is focussed on results 
delivery, rather than pure theoretical analysis or business development. 

Michael Page Finance 

Specialists in Financial Recruitment 
London Bristol Windsor St Albans Leather head Birmingham 
Nottingham Manchester Leeds Glasgow Edinburgh & Worldwide 


Definitive expertise in Activity Based Costing, Business Process Re-engineering or 
Financial Systems Implementation are important requirements in the immediate term. 
The potential to develop the ability ro influence, facilitate and enact change 
management in the broadest sense will be the key recruitment criterion. 

Aged up to 37, you should have an excellent academic crack record, a recognised 
professional qualification and a strong track record of professional success to date in your 
chosen field. Superb interpersonal and presentation skills, results 
orientation and high levels of drive will be prerequisite. Previous 
management consultancy experience, whilst advantageous, is by no means 
essential. 


As would be expected from a leading, international practice, the inuml 
remuneration package and future career development opportunities will be 
geared to attract the rntw outstanding individuals. Nvirhcr of rhesc {actors 
will be on inhibitor to the recruitment process. 

Interested applicants should forward a comprehensive curriculum vitae, 
quoting ref; 205076, ro 


Midlands & South 
Alan Dickinson FCMA or Diane 
Forrester ACA, Executive 
Division, Michael Page Finance, 
Page House, 39-41 Parker Street, 
London YVC2B 5LH. 


North of England 
Stephen Banks ACMA. Executive 
Division, Michael Page Finance, 
Clarendon House, 81 Mosley 
Street, Manchester M2 3LQ- 


3 L’l 






BONHAMS 

USNDON'S MOST ENTERPRISING AUCTION HOUSE 


Financial Director 
Designate 


London 

Bonhams was founded in 1793 and is one of the leading 
Auction houses. Its two London Salerooms and 
cwenty-cwo offices throughout the United Kingdom, are 
renowned for their innovative and friendly approach. 
Thriving in the time of recession, it has seen a 41% rise 
in its turnover. The Financial Director has played an 
important part in this success. 

The new Financial Director Designate will continue to be 
an integral part of a top quality management team taking 
an active part in business decision-making, leading to the 
continued growth of Bonhams. Reporting ro the 
Managing Director your role will encompass: 

• Day-to-day running of the accounts department, 
including a staff' ofl 2 . 

• Production of accurate management 
accouncs to tight deadlines. 


£33,000 + Bens 

• Implementation of a new accounting package. 

• Extensive liaison with department heads with regard to 
budgeting and cost control. 

• Full financial responsibility including dealing with 
Banks, Auditors, all credit decisions, and representing 
Finance at all top-level meetings. 

The successful candidate will be a qualified ACA, aged 
27-33, with a minimum 2 years hands-on experience who 
enjoys a challenging yet rewarding role. Enthusiastic, 
wich a diplomatic approach, you will fully utilise your 
excellent inrerpe/sonal skills within this "people 
orientated" business. 

Interested applicants, in the fiisr instance should enclose 
an up-to-date curriculum vitae to Laurence Pengelly, 
Michael Page Finance, Page House, 

39-41 Parker Street, London WC2B 5LR 


Michael Page Finance 

Specialist* in Financial Recruitment 
London Bristol Windsor St Alban* Leaiherbead Birmingham 
Nottingham M ane heater Leeds GbuRaw Edinburgh & Worldwide 




• € S3 SMBS 




M.I 

[%?: 


I CKf-if? 


Treasury 

Operations 

Manaser 


West London 


c-^3 5>o°o P a P lu s 
Substantial Bonus & Car 



Our client is a major l/K Pic providing specialist support services io 
industrial, commercial and public sector customers primarily In the 
UK, Europe and North America. 

This exdting opportunity has now arisen in the small Head Office 
Treasury ftinettan. Reporting to the Director of Treasury the key 
responsibilities of the role will Include- 

- Providing a dally liquidity management function For the UK 
“banked* operations. 

- All aspects of cash management and reporting (including policing 
the treasury operations of US and Dutch cash management centres). 

- Providing the Group's primary Interface with the financial markets 
anri l rinlntpinfas g elnsfr nnri fiyqm-nl contact with group relaBunabip banks. 

The role will Involve regular contact with the Finance function and will 
also be responsible for ensuring adherence to Treasury policies 
throughout the Group. 

In order to develop this role and thereafter move on, the successful 
candidate may be pursuing a mainstream Treasury career where the 
wider breath of this role and Its high profile exposure will add 
significantly. Alternatively this position may appeal to a Qualified 
Accountant who is keen to develop further Treasury skills as part of a 
more general Finance career (although In this case you must dearly 
demonstrate 3-3 years of Corporate Treasury experience). Whichever 
route the following skills arc csscntiaL- 

- Strong technical skills in both Treasury and Accounting. 

- Excellent communication, Intnpersonal and relationship building skills 

- A high level of commercial awareness. 

Any previous experience of documentation issues and legal 
interpretation as well as exposure to derivatives would be 
advantageous but is not csscndaL 

If you arc interested in discussing the above further 
you should write to Karen Wilson at Hqggea Bowers. 

George V Place, 4 Thames Avenue, Windsor, Berks, 

SL 4 iQP, enclosing a recent CV and a note of current 
salary quoting Rc£ WKW/jpas/FT 

Hog gett Bowers 

EXECUTIVE SEARCH AND SELECTION 



Head of Finance 


London c£55,000 


This UK company is a leading specialist in the insurance sector, with 
responsibility For significant dollar liquid assets and a headcount which has 
mare chan doubled in the last two years to its present size of approximately 
200 employees. Business volumes are set to increase significantly over tbe 
next five years and the company therefore seeks a Head of Finance able to 
men the challenge of planning for and managing future growth. 

Reporting 10 the Managing Director, the Head of Finance will be a key player 
in a recently-appointed senior management team. Working towards the 
achievement of ambitious company goals the role involves exposure to all 
aspects of the business, with particular emphasis on strategic planning and 
management. Responsibilities are for the total accounting and finance 
function, including MIS, actuarial and ad hoc projects as well as the 
production of financial and statutory accounts, balancing tbe need to manage 
growth and change with the importance of ensuring efficient and effective 
reporting and controls. 

Responsible for five managers and a current team of 40 staff, based in modem 


offices dose to London Bridge, the role involves extensive liaison within the 
company and externally with a range of professionals including auditors, legal 
and financial advisors. With substantial investment la both oew technology 
and recruitroem, die Head of finance also oversees die development of MIS 
systems, training and professional development within the finance (unction. 
Tbe ideal candidate will be a qualified accodntant - probably Chartered - with 
proven management experience. Whilst a background in insurance may be 
use (ul it is not a pre-requisite; more important are strong influencing, inter- 
personal and strategic skills together with a 'hands on' approach. Evidence of 
the ability to advise and provide direction in a dunging environment Is 
essential, together with good technical knowledge and familiarity with all 
aspects of corporate and financial p tanning, ft is unlikely that applicants bdow 
the age of 40 years wfll have sufficient commercial experience for this 
challenging role. 

Interested applicants should send, by post or fax, a full CV including salary 
derails and quoting ref 085, to the address bdow. 


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Alderwick 

CONSULTING 


SEARCH* SELECTION 

OLD HAILEY HOUSE. 7 OLD BAILEY. LONDON EC4M 7NB. TEL 071-3294649 FAX- 071-329 9677 


: x s . X-' , . 7 

- -it 


Consumer Brands - Major International Pic 

Financial Planning & Analysis 

Early 30s c*£S5,000 + Bonus + Car + Options London 

reduction opportunities, as well as strategic planning and related 
projects, In particular , this will be achieved through developing 
dose links with marketing, production and worldwide regional 
management teams. 

You will be a graduate, qualified accountant or financially 
orientated MBA, with previous "high-profile and disciplined* 
financial analysis/planning experience, gained in a marketing led 
consumer products business, ideally having both a distribution and 
production content With an analytical and commercial mind, you 
should possess strong computer modelling and effective 
communication skills. Preferably, although it is not essential, you 


Our Client is one of the UK's foremost ■quality" consumer 
brands businesses, with production, marketing and dislribuUon 
operations worldwide, and turnover in excess ot £2.5 billion. 

As part of a process oi change and development in its approach 
to financial management, il has recently appointed a Director of 
Financial Planning and Analysis for the global business, who now 
seeks to recruit a financial Planning and Analysis Controller to 
strengthen a small centrally based team. Overall departmental 
objectives are to play a key role in improving the quality and 
effectiveness of management information and to bring about a more 
pro-active, commercial, analytically orientated and disciplined 
finance culture. 

Working with a small team of financial analysis, your main 
Involvement will embrace improvements to management information 
and the review, analysis and provision of incisive commentaries on 
group performance, forecasts and business trends; with particular 
emphasis on the recommendation of profit improvement and cost 


either from an overseas or UK base. 

You should write enclosing a resume together with 
current remuneration details and daytlme/evsning 
telephone contact Bombers, quoting Reference 41Q/A on 
both envelope and tetter, to the address below: 


Chryssaphes Flammiger Associates, Bechtel House, 245 Hammersmith Road, London W6 8DP. 


PROJECT ACCOUNTANT 


Centra] London 


c. £35,000 + Benefits 



ur diene, a leading UK and international advertising and marketing Group, is 
in die process of growth and expansion, and as a direct result, the Group 
Finance Director is urgently seeking an assistant. The role will be varied and 
interesting, and will involve a number of different projects relating to the Group 
holding company and its subsidiaries. These projects will include systems work, 
financial analysis, working capital management, operational audit and conducting 
monthly management reviews. 

The Project Accountant will report directly to the Group Finance Director and will 
be expected co have sufficient self-motivation and determination to project manage a 
team, or work alone, as the task dictates. The role may also include the financial 
controUership for two of the Group subsidiaries. 

This is an outstanding opportunity for a recently qualified accountant, with two or 
three years experience of the service industry, to capitalise on their experience and to 
gain maximum exposure to the internal workings of a large and successful 
advertising group. Career prospects for the successful candidate are excellent. 

Candidates should be graduate ACAs, aged between 27 and 32. Interested 
candidates should send their curriculum vitae along with current 
remuneration and day time telephone number co Carol Jardinc, Managing 
Director, Whitney Selection, 17 Buckingham Gate, London, SWlE 6 LB, 
quoting reference number WS/ 120/2. 


W H I T N E Y 



S ELECTION 


WINDSOR 

Be DISTRICT 


2 Directors 
of Finance 

c. £40, 000 + car + benefits 


In Sjmnp f*<V5. following a wucmIii) bjllui nl'imaniv, the trailer r> planned of 
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qualified accountant, able ro prove that hr/vhv- ..an- 

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! £jSlt 2 j« < T T ^ "“T""* UnU “'f ** W«nwi 

- develop md implement «.md «i.u.u u | Mui tllKV 

• pun the IT vntet^- and sJvne upon wtteiuv; 

• n.-cnm and train a protewioiul team 



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CHAPMAN 

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ASSOClATtN 

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FINANCIAL TIMES FRIDAY OCTOBER 2$ 1994 


39 


FINANCIAL 


£27913 - £ 33,040 




DIOCESE OF LONDON 



CONTROLLER 


Tbe Diocese has a budget of over £30 million a ycac cxtensve 
property interests, 412 parishes and 580 Stipendiary Clergy. We 
tock to utilise oar resources to exercise pastoral care and support 
to these parishes which serve appro jcirreuriy 9,500,000 people in 
an ana roughly corresponding to the old County of Middlesex. 
Our recent relocation to new purpose buik accommodation has 
created the .opportunity of bringing together a number of 
essential support activities. This indudes finanaal management 
which has previously been handled by individual departments. 

Reporting to the General Secretary, the Financial Controller 
position b a new and challenging one and requires the 
consolidation and development of aO diocesan finances, ensuring 
the provision of a professional and top-quality accounting service. 
This varied central management role wiD be responsible for 
preparing annual reports, accounts and budgets, running an 
efficient treasury operation, carrying out finanaal transactions 
and providing financial management information to th e Boards 
and Councils oT the Diocese. Other dudes indude o vers eeing the 
administration of the Trusts department and effecting 
appropriate dispositions of investment and property assets with 
the help of die Diocese’s Asset and Treasury Management 
Review Groups. 

To meet the demands of the role you will n e ed to be a qualified 
accountant with proven financial management akilb ‘and the 
ability u> communicate effectively in the written and spoken word. 
Applicants should be communicant members of the 
Anglican Church. 

An application farm and Job description may be obtained from: 
Mr s D Bukncn, BA to (be General Secretary, IHncfte of 
loalon, 96 Street, Westminster, London, SW1P 4AU- 

(TW 071-992 II B0). 

Closing date for app li c at ion s girt November 1994. 


Bell Cablemedia pic 

Group Accounting Manager 


Watford 


fell Cablemedia is one of the UK's largest combined cable TV 
and telephone operations. The company was recently floated 
on the US Stock Exchange raising over $475m. This base is further 
strengthened by the company's three original partners. Bell Canada, 
Cable and Wireless and Jones Intercable. 

The company now has firmly established cable franchises across 
the UK and has developed an infrastructure ro enable ir to achieve 
ambitious growth. To support this plan great emphasis has been 
placed on developing commercial strength within Finance and 
Administration. An integral parr of this process is the key new 
appointment of a Group Accounting Manager. 

This role will report directly to rhe Group Director of Reporting 
and Accounting. Principal responsibilities cover the development and 
control of management reporting across all group operations. 


up to £45,000 + car + benefits 

The emphasis will be on creating consistent but innovative ways 
in which Finance can analyse and contribute to business issues as 
well as developing a function which ran monitor and control 
information in a rapidly growing environment. This will require 
building strong relationships with regional Managing Directors as 
well as management of a highly qualified Finance team. 

The successful candidate will be a qualified accountant, probably 
in their thirties, with strong man management capabilities. The 
organisation is growing and forward thinking, thus opportunities to 
directly impact on the business and for interesting career 
development are both substantial. 

Interested applicants should write, with a cv and details of current 
remuneration, to Mark Gilbert at the address below. 


Alderwick Peachell 


AUcrwidc Peachell Limited, Recruitment Consultant* 125 High Holbom, London WClV 6QA-Td:07I 404 3155. Fax: 071 404 0140. 


m 


BARCLAYS PRIVATE BANKING 

Barclays Private Banking, one of the world’s leading Global Private Banking Groups, is 
seeking to recruit Professionals with 3-5 years' practical experience of Private Client, Trust, or 
Offshore work, to be based in various of its Offshore locations. 

Barclays Private Banking has subsidiary companies in Jersey, Guernsey, Isle of Man, 
Cayman, British Vir gin Islands and Bermuda. 

Candidates should write to: 

Private Banking Director, Offshore Islands 
Barclays Private Banking 
Barclays Bank PLC 
49 Grosveoor Street 
London W1X9FH 


Barclays Bonk PLC is an equal opportunities employer. 





A KEY COMMUNICATIONS ROLE 



INVESTORS 

IN 

INDUSTRY 


31 is the leading specialist provider of investment 
capital to unquoted businesses in the UK. We provide 
funds to help small and medium sized businesses in all 
sectors of the economy, encouraging wealth creation and 
business growth. We have recently achieved a listing on 
the London Stock Exchange and become a member of the 
FT-SE 100. 

The relationship we have with our i nv estors is very 
important. We now seek a motivated Manager who will 
support the development of good relations between 3i and 
its shareholders, the financial press and analysts - through 
analysis, interpretation and presentation of information on 
the company’s strategy, policy and performance. This will 
involve project management of the Annual Report and 
Accounts, the Interim Report and other presentation 
material as well as involvement in other ad hoc projects in 
3fs Marketing and Corporate Affairs team. 


Educated to degree level and preferably MBA or ACA 
qualified, you will have n background in accounting 
and/or marketing, plus experience of dealing with City 
institutions and analysts - possibly in the corporate 
affairs or communications team of a blue-chip company. 
The role involves considerable liaison with 3fs brokers, 
public relations advisers and merchant bank - 
outstanding verbal and written communication skills are 
an essential attribute. You will be able to establish your 
credibility quickly, aided by your commercial acumen 
and ability to understand figures and data. 

This key role will attract a highly competitive salary 
as well as a comprehensive range of financial sector 
benefits. 

To apply, please Bend full career details to 
Charles Richardson, Director Corporate Affairs, 

3i Group pic, 91 Waterloo Road, London SE1 810*. 


jT 


BUSINESS MANAGEMENT 
OPPORTUNITY 


Coopers 

&Lvbrand 


Executive 

Resourcing 


// 


Citv based 


£ 10.000 Package + Benefits 


A dnriftwm qf m wta rtinriftnal frnaneuil services nr gnni«rtio n. onr client is a leading fond manager with a 
wide range of institutional and re<a0 clients and a substantial global presence. The rate of expansion they 
are experiencing, particularly in Europe, has created the need for a high calibre individual to evaluate 
business operations and internal control. This is an excitin g period for the org an i sa tion daring which 
career opportunities will continually develop. 

This is a high profile management role reporting directly to the Director of Finance. The successful candidate will be 
expected to very quickly gain a thorough understanding of the business and the regulatory environment in which it 
operates and, evaluate and assess b usiness opportunities. Responsibilities wiQ also indude the identification of controls 
necessary to limit exposure, ensuring that these are i mp le m e n ted. 

The successful candidate will: 

• be a graduate calibre, qualified chartered accountant 

• possess relevant post qualification experimee gained within either a financial services institution or regulatory body. 

• have outstanding communication skills and proven management abilities. 

• demonstrate the ability to operate at both strategic and opaatkmal leveL 

Promotion opportunities will be limited only by the successful individuals level of achievement In return a highly 
attractive package is on offer to include extensive bank benefits. 

For further information please contact Jon Vonk on 071-434 4455 (071-720 1527 Eves/Weekends). Alternatively 
submit a detailed CV to the address below quoting Ref JV1710. 








Our effonf is tfw European specfaQsf Insurance and reinsurance 
arm of □ major and well established international Insurance 
group, wtti openfikms spanning Asia the Pacific, Europe, file 
Antipodes and North America. Writing El 20m c* business last 
year, and continuing to grow, there is now a need to appoint 
an ambitious Company Secretary. 

In fills new post you wtil report to the Finance DtrectOT and be 
responsfcte tor tea full range of legal and secretarial matters, 
including; statutory compiance, Sfflvtdng tie Boaid, personnel 
and general offlee admWdratton. It Is dso partJaitarty important 
that you are rapkfly able to mate a ful contribution on Insurance, 
regutaflon/compTrance and European licensing issues. 

Candidates should be professionally qualified, of graduate 
calibre, and have already established a reputation of 


achievement In the company secretarial foneflon, perhaps 
currently In the number two position In a blue chip financial 
services arganteaflon, and have the enthusiasm and energy to 
match that of the existing young management team. 
Knowledge of the Insurance regulatory environment Is a 
prerequisite. You must also have the abfflfy to develop good 
relationships with UK and European regulatory bodies. 

A legal background would be particutaity appropriate. 

Please said fuH personal and career details. Including 
current remuneration level and daytime telephone number. 

In confidence to Tim Latham, Coopers & Lybrand 
Executive Resourcing limited, 1 Embankment Place, 

London WC2N 6NN, quoting reference TL1 06Q/F 
on both envelope and letter. 


Coopers 
& Lybrand 


Executive 

Resourcing 


MARKS ♦ SATTIN 


k\ i! i i i •< ii. •'!■ . i' 1 rk 


1 1\: si i\ w i \ 



Head of Profit Risk Management 


London Based 

The Role 

We require an outstanding individual to play a 
key role within our highly proactive middle 
office department. 

The individual will be responsible for the 
income and risk analysis over the entire product 
range. In addition the person will be expected 
to manage and help develop their own team as 
the activity expands during the year. 

The role requires an individual who is 
confident, with excellent presentation skills and 
who can develop relationships with the trading 
desks and the overseas group companies. 

Career prospects are excellent 


£ Excellent + Benefits 

Qualifications 

♦ At least 2 years' experience in a major 
investment bank or broker. 

♦ Graduate Analyst/Trader or qualified 
Accountant with Risk Income experience. 

♦ Must have had extensive involvement in 
structured derivative products. 

♦ Highly numerate and PC literate with initiative, 
creativity and flair. 

♦ Exposure to emerging markets would be 
advantageous. 


To apply, please write enclosing your C.V. and details of 
your current remuneration package to: 

Mrs. M. Spanner, Head of Personnel 
Indosuez Capital Securities (UK) Ltd 
1 22 Leadenhall Street, London EC3 V 4QH 


INDOSUEZ CAMAL 
SECURITIES tU« LIMITED 




Banque Indosuez Group 


With o budget of £1 2.5 mfflton, tills Further Education College 
is one of the largest Colleges of its type In the country. 
Employing some 320 full time and 200 part time start, the 
College has approximately 1 5,000 students Involved In a hill 
range of further education acflvtttes. The Coltege encompasses 
nine sties and Is a forerunner In community education on a 
regional basis. 

Reporting to the Director ot Finance aid Corporate Services, 
flie position of Finance Manager will assume responsfijinty for 
all financial operations of the College. Your biltfal task wifi be 
to develop and Implement planning and control systems to 
support the organisation In the new corporate environment. 
You will be a key member of fire corporate services team. 





A qualified accountant, you wfll have a proven trade record of 
managing and developing finance tactions, including 
computerised management information systems, in a progressive 
hdustrid or commercial organisation. An enthusiastic fndMduai, 
you will have a hands on approach. Strang communteafion and 
persuasive skflis together wllh fi» other personal qudffies needed 
to m ate a positive impact on an orgartisafion which Is hi an 
exciting period ot considerabte and stgntflcont change. 

Please send full personal and career details indurSng currant 
remuneration level and daytime telephone number. In strict 
confidence to John Elfiofl, Coopers & Lybrand Executive 
Resourcing Limited, 43 Temple Row, Birmingham B2 5JT 
quoting reference JE279. 


AITOINTMKNTS 

ADVERTISING 

appears in ibe . . 
. .UK, edition every . 
Wednesday & Thursday 
■and mihelatemaiional 
edition every Friday 

For farther information. 


Andrew Sfatfzyo&ki 4M 
+ 44 71 8734054 

: * Philip "Wrigfey on 

+4471 8733351 

. Joanne Grarard on. 

0718734153 


Head op Accounting 

£32-35K 

Dili posted ottos a rare opportunity to shape the future or an smenjlnn organisation at an sucking stage of la development 
CRy & Mngion Cofcgo to Lotion's must and fergset Furthar Education Colags wHi a tumour ot £24 mEon. Die Cotage 
to a recent magartpreadew 11 and ottos Further Education. SMh ftm ami A** Education ptwtetaLDiepMl 
provides an appertunKy Cora dynsrte quafiBed financial manager to develop a naw Unarm dspertmanL Answering to fin 
Director ot Finance and Coquette Smviees. »• challenges wi include buMng a new finance team, developing complete 
budget procedures, ensuring the high quality cMvoxy ot the ful tango ol financial senlcas. A imticrious, professfcmni hands 
anappre^toeBStsVi^astoBwai^tecoflimunicatoeftecAwlywilfifllstallttvoughouldwcelega. 
CtoUngdatK lltbHomaberlSM. 

For turCwde Me end to appfle«lfc» term pleaee contact SwHdBi8«h,CoiparatB^ rto nnei Sendees, 

Cky 1 tsUngton Collage, 444 Camden Road, London N7 081* (TU D71 700 BB37/F« 071 M7 Ml). 



CITY AND ISLINGTON 

COLLEGE 

CSy and Mhgton Outage aims lo bs an Equal OppouiffN Employer. 











40 


★ 


Finance Manager - Benelux 


Pharmaceuticals Holland Package £55.000+Car 


Our client, a pharmaceutical multi-national 
seeks to recruit a high calibre Finance Manager for 
Us sales and marketing operations in Benelux. 

Reporting to the Managing Director you will be 
a key member of the management team with 
responsibility for finance, administration, 
information technology and distribution as well as 
local treasury and tax. You will play an important 
role in developing the long term planning and 
strategy for these dynamic and highly competitive 
market places. 

You will probably be in your mid 30's, a 
qualified accountant, preferably with a degree or 
MBA and have worked with a major multi-national. 


Preference will be given to Dutch speaking 
candidates. A knowledge of French would be a 
further advantage. In addition, you should be able to 
demonstrate excellent interpersonal skills to manage 
the multi-cultural aspects of this diverse and rapidly 
changing business. 

This is a senior appointment based in Holland 
and career prospects are excellent. 

If you are interested in this appointment, 
please send your CV in confidence quoting 
reference number 3430 to Stuart Adamson FCA, 
Adamson & Partners, 10 Lisbon Square, Leeds 
LSI 4LY, West Yorkshire, England. Telephone 
0532 451212 Fax 0532 420802. 


Adamson & Partners 


International Financial Search & Selection 



The company ts part of one of the largest communications groups In the world providing advertising, direct marketing and 
sales promotion services to Its dlents through an extensive network of worldwide offices. An experienced ’hands-on’ 
Financial Controller Is now sought for a key area of the UK business. 


THE APPOINTMENT 

■ Report to the Group Finance Director working closely with 
the Chief Executive. 

■ Supervise a team of accounting staff 

■ Functional responsibility for divisional financial and 
management accounting. 

■ Ensure the timely and accurate presentation of budgets 
and forecasts to senior management. 

Please apply in writing with a full C.V and current salary 

details to Geoffrey Mather. K/F Associates. 252 Regent Street. IT' 


THE REQUIREMENTS 

■ Probable age range late 20's to early 30’s with a relevant 
accounting qualification. 

■ Several years’ post qualification experience ideally within 
an advertising agency 

■ Commercial acumen. 

■ Second European language a distinct advantage. 

London WIR 5DA. quoting ref; 90802/A. The closing date for 
applications is Friday. 18 November 1994. 




K/F ASSOCIATES 

Selection & Search 


Coopers 

&Lybrand 


Executive 

Resourcing 



Sondwell College, with over 7.000 fUH time equivalent 
students and an annual budget at £26 million, is one otitie 
largest further education colleges In the UK. With an enviable 
reputation for Innovation and the management of change. It is 
now building on a successful transition to Incorporation to 
create a truly student focused college. 

As a member of tfw Board of The College Corporation, you will 
report to the Principal with rasponsibBtty for financial 
management and Information systems. Priorities wW be to 
ensure tight control plus effective budgeting, planning and 
systems capable of supporting such a substantial 
organisation. Team leadership and development will be critical 
to achieving these objectives. As a member of the executive 
team, you will play a major role In formulating overall 
corporate strategy lor the college. 


A qualified accountant, you win have a proven track record at 
managing and developing financial functions wfih fin emphasis 
having been on establishing effective computerised 
management fnto/matton systems. Experience wffl have been 
gained m forward thinking commercial or industrial 
organisations and it you also have experience in a further or 
higher education estabBshment then so much the better. 
Pereoncri qualities sought will include decisiveness backed by 
strong wmmuntation and team bufidng skills. The rtUfly to 
mate o brood ronfributtoo to o mcnogeraertf team b esssnflaJ. 

Please send full personal and career (Molls, Including current 
remuneration level and daytime telephone number. In 
confidence, to John Elliott, Coapas & Lyfcranct Executive 
Resourcing Limited, 43 Temple Row, Birmingham B2 5JT 
quoting reference JE281 on both envelope and tetter. 


FINANCIAL CONTROLLER 

An unusually wide-ranging role in a dramatically successful business 
for a qualified young accountant 

c £30,000, bonus and car allowance 


Sussex 


Many companies will aspire to double their turnover in the next five years - but very few can. realistically 
claim to have done so in the last ftvel An enviable record for product quality and innovation has given this 
business a substantial share of die UK market, but its spectacular growth has been achieved overseas - more 
than 90% of sales are outside the UK Proven technological strength, combined with the opening of new 
market sectors, suggests that future growth will be equally rapid. The company's financial management is 
to be reinforced by the appointment of a Financial Controller; who will be expected to make a broad 
contribution. Accountancy strength will facilitate the core reporting role, with a small, well-established 
team providing support, bur our best candidates will relish the opportunity to work on a much broader 
front with a generally young and unfailingly forward-thinking team. A formal qualification, almost inevitably 
ACA and probably gained with a major practice, is taken as read; but the proven ability to resolve business 
issues in an international context will be even more important. We want to hear from candidates with at 
least two years post-qualification experience who clearly demonstrate the ambition and the ability 
to flourish in the bi gge r jobs to which this one could easily lead. Pleqse send frill career details, quoting 
reference WE 4182 on both letter and envelope, to Dave Denny, W&rd Executive Limited, 4-6 George Street, 
Richmond-upon-Thames, Surrey TW9 1JE 

WARP EXECUTIVE 

LIMITED am 

Scorch S' Seitoion ■> 


APPOINTMENTS WANTED 


German Qualified Accountant 

years experience in England as financial/ 
[anagement Accountant, 2 years contract work for 
ish companies in Germany, seeks new assignment 
international company. Short/long term. 

Please contact: 

0272 780688 CEngUmd) 


CHARTERED ACCOUNTANT 
SOUTH AFRICA 

CA. based in S-A. with 15 years experience. Looking for 
financial position with company or to cany put 
specific projects. Company start-ups/rclocations 

Faxi 27 11 787 3765 


FINANCIAL TIMES FRIDAY OCTOBER K 1994 



Royal insurance is a household name in the provision of general and 1,f ® 

Sin the UK. As one of the UK's leading composite irewew l ^ Gl ^ u f h a, ” e F ^^ 
A- „ & whole range of specialist and commercial insurance lines. With operations 

H Royal Insurance worldwide, the Group had a premium income of £4.9 billion Jn 1993 and asse s 

^ under management of over £11 billion. The Group are now looking to recruit a hiqh 

quality candidate within the Group Internal Audit Department. 

Responsible for management of a team of professional staff undertaking reviews of 
the UK general insurance business. 

Senior member of the internal audit team expected to contribute to the manage- 
ment and development of the department 

Qualified accountant with a minimum 5 years PQS end a strong interna i/exiemjl 
audit and management background. 

Excellent communicator at all levels with strong inter-personal and management 
skills, able to manage, develop and build a strong and effective team producing 
high quality results. 

Must be able to demonstrate a potential for development to senior management 
rotes within the Royal insurance Group. 


Audit 

Controller 

North West 


c£35,000 plus 
Benefits package 
including car 



This assignment Is being handled exclusively by Accountancy 
Personnel. For further Information please contact our 
Recruitment Adviser Tom Manger on 05? 236 3530 or write to 
him at Accountancy Personnel, 16b Cook St, Liverpool L2 9Rf. 


Hays 


The Nooing Hill Housing Group combines one of [he largest housing associations in London with 
one of die most successfiU producers of shared ownership housing and four ocher smaller companies, 
to oar 30 yean, we have housed more than 30.000 people and we complete over 700 homes a year. 
We are currently raising £33 million private loans to finance new homes for the next twelve months 
and are engaging in appraising various innovative methods of landing hocusing in the future. 


Deputy Group 
Finance Director 

Salary up to £44, 755 per annum 
(pending review) Ref: FD12. 

This new post has been created to combine the 
responsibilities of managing and leading the 
Finance Department of Noning HUI Housing 
Trust together with the prevision of high level 
assistance to The Group Finance Director in 
strategic financial issues. 

Holding a recognised accounting qualification 
with rive years post-qualification experience, 
you will have strong management skills with 
the ability to lead and motivate a team of 35 
people. You will have strong numeracy and 
literacy skills and a maturity of approach which 
enables you to communicate with senior 
management on financial issues. You will have 
good financial management skills and the 
experience of working in a variety of 
computerised financial environments. In 
addition, you will be a highly capable financial 
Accountant with the responsibility to oversee 
the production of complex group accounts. 


• *■ 



Group 

Management 

Accountant 

Salary up to £36,277 per annum 
(pending review) Ref: FD15. 

This key position provides high level assistance 
to the Senior Management team ra Corporate St 
Business Planning and the budget process. 
Responsible for providing managers 
with monthly financial information, advice and 
risk assessment, the position heads a small 
team of skilled staff responsible also for 
financial systems. 

You will hold a recognised financial 
qualification with 3 years post-qualification and 
5 years practical experience of management 
accounting. Holding strong communication 
skills, you will understand how to plan and 
prioritise tasks as well as managing and 
motivating staff. You wilt have considerable 
experience of computerised financial system* 
having been responsible for an implementation 
process and you will hold concise analytical 
skills in order to contribute at a senior 
management level on strategic issues. 






F OWN AMD UAMAGf ID.M0 DENTED AMD I.S00 5MAMO OWNtRSM* MOMf S 




Financial Director Designate 

South Coast Package to c.£40,000 + car 

Our client is an established, privately owned, automotive component manufacturer. Its impressive customer 
base includes a larga number of blue chip clients and the company exports its products throughout Europe 
and the Middle East. Founded over 100 years ago, the company has a well deserved reputation for 
innovation, quality and customer service. With current sales volumes standing at £6m p.a and an enviable 
profit return, the organisation is well placed to achieve its strategic objective Of turnover in excess of ElOm 
p.a. by the end of 1996. 

The company now seeks a graduate calibre, qualified accountant to take responsibility for the finance and 
administration function. Key responsibilities will include compilation of financial and statutory information; 
definition of existing financial systems and controls; development of management Information systems to 
reflect the future needs of the business; provision of detailed management reports to include analyses of Key 
performance indicators; and continuing enhancement of computer systems in order to provide a sound 
platform for future development. Additionally toe postoofder will be responsible for appropriate company 
secretarial duties. 

Interested candidates should send a comprehensive CV, highlighting relevant experience and including 
remuneration details to Karan Paige at KPMG Management Consulting, Richmond Park House, 15 Pembroke 
Road, Clifton, Bristol BS3 3BG. Telephone (0272) 464042. 

IcM^Selection & Search 



FINANCE DIRECTOR 

£ Salary Negotiable + Benefits North West 


Proteus International pic is a group of companies which are 
engaged in the discovery and development of 
pharmaceuticals using computer aided molecular design 
techniques. Based at MacdesfieJd, Cheshire, the Group has 
operational interests in the UK. Europe; USA and Canada. 

With the expansion of its activities Proteus now seeks a 
Chartered Accountant as Finance Director for its main 
operating subsidiary, with the prospect of a Group board 
appointment in due course. Reporting to the Chief 
Executive, the successful applicant will be responsible for 
ail aspects of the Group’s financial management, including 
financial planning, budgetary control, and treasury 


operations. Applicants should be able to demonstrate 
previous success in an equivalent senior position. This is 
an opportunity for a self-motivated individual to assume a 
role of major responsibility within a senior management 
team. Experience or a formal qualification in a scientific 
discipline would be an advantage. 

It is unlikely that the position will be of interest to applicants 
aged under 35 or currently earning less than £35, 000 p.a. 

If you believe yon could fill this challenging rdle, send 
your detailed CV to Mrs. Gillian Wych, Personnel 
Manager, Proteus International pic, Lyme Green 
Business Park, Macclesfield, Cheshire, SK 11 0JL. 

""" * 


Penzugyi vezetot, fokonyvelot keresunk 
xnultmacioQ&lis szorakostatoipari t&rsasdg reszere 

BUDAPEST 

Egy 4 milliard US dollar 6ves forgalmt'i bonyolitd tarsasag penzugyi megbizottat 
keres rnagyarorszagi fidkjinak vezetesSre. 

A sikeres jelentkezonek - akdr terfi, akfo no - tokcletesen kepzett konyvelonek kcll lennic, 
aki mind magyarul, mind angolui folySkonyan beszel es ir. 

A jelentkezonek megfelelo bizonyitv£nyokkal keil rendclkeznie 
a penzugyi vezetgs ter£n szeizett gyakorlatardl. 

A megallapodSs kitiino alapfizet6st, pr&niumot, valamint a szokdsos nemzetkdzi 
kedvesmfoyeket foglalja magiba. 

Az alkalmaztatasa erdekeben frjon reszletes ondletrajzzal 6s fizel&i ig€nnyel a kovetkezo cunre 
Mr Stephen Gottlieb, 31 Villiers Street, London WC2N 6ND 


*5 




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****** 

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j=*f "»*F BUI 

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N 


FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


41 


FINANCIAL CONTROLLER 


c.£35K Package + Benefits 

CapoEast, a subsidiary of Cape PLC. Watford based, has a 
wwanwg reputation for providing quality products and services 
to the construction industry throughout the Middle and Far P«*t 

In tftln K# A>< ui& ■■■ ■ 


In mis key role, you will be responsible for managing the overall 
Jw finance function in the UK artdkfiddte East 
wffl s P 8dfic taste wffl include maintaining 

SLSE®*! 8 f ys ^ m 01 •nte'nal controls, providing financial 
atpeitee to local management and preparation of monthly 
consolidated accounts. 


Preterabjy A.CA qualified, you wN have gained experience ideally 

to a mutfinatKKial contracting environment You should be able to 
achieve a good balance between a strategic and hands-on 
approaeh. possess excellent communications skills and have the 
ability to thrive in a constantly changing environment 

The position wtfl Ideally suit a young ambfttous Accountant seeking 
promotional prospects within an expanding group of companies. 

To apply, please write with fun C.V. to Margaret Robertson, 
Personnel Director, Cape East Limited, Cape House, 
Exchange Road, Watford, Herts WD1 7EG. 

Closing date to November 1994. 

We are an equal opportunities employer. 



YOU CAN ADVERTISE 
YOUR SKULLS IN HIE 
FINANCIAL TINES 
RECfllflmBfr PACES 
FROM AS LITTLE AS 
£90 + VAT 


Looking for 


a Career 


Change? 


For further detjuls 

PLEASE CONTACT 
ANDREW SOUtZYKSn OX 

Tel: + 44 71873 4064 
Rue +44 71 8734331 

OR BY WRJTO8 TO MM AT 

Fbmboal Tnss, 
Rechwtheht Aovemawa, 
Number One 
SomwAfu; Bridge. 
London SE19HL 


OmS 


bitwmi 


b.v. 


HC1 is a privately owned multinational group of companies 
involved in the distribution, storage, trading & shipping of 
industrial che mi ca l s throughout The Americas & Europe. With the 
promotion of the present incumbent, we now need to fill the 
position once again of - 


INTERNAL AUDITOR 


HC3 considers this function to be an important part of its overall 
fimmriai controls, as well as being an ideal entry point for future 
Financial Managers. Responsibilities will include detailed reviews 
at all Group locations, as well as various ad hoc assignments. It 
may be expected that this will require periods of between 2-4 
weeks in each location. 


Candidates, who ideally will be recently qualified accountants with 
one of the major professional bodies, should have the following 
attributes: 


- solid auditing experience preferably with a "Big 6* company. 

- ability to communicate with ALL levels of staff both veibaliy as 
well as via concise written reports. 

- an open & enquiring mind. 

- be able to both speak & read Sp anish, as well as being Quoit in 
Fj glhh- 


An excellent expatriate remuneration package win be offered A it 
is envisaged that success in this position will result hi a move into 
financial managem ent at any One of OUT locations. 


Resumes, including day & evening phone numbers, should be 
mailed or faxed to: 


David F Jordan 
Corporate Controller 
HCI (Services) Inc 
PO Box 701069 
Houston TX 77270-1069 
USA 

Fax 713 880 2667 


FINANCIAL CONTROLLER 

London £25-30k + Benefits 


LORNAMEAD LTD is a growtog International personal care 
business Trading with over 50 countries worldwide In Its 
own branded cosmetic and toietry products. 


Repotting to the Group Rncmce Director card supported 
by a small team, the financial controller wilt be 
responsible for all management and financial 
accounting, treasury and other cxlminfetrcitive functions. 


The successful carxSdate wi be a quetiffed accountant 
able to demonstrate a brood range of experience wtthto 
a fast moving company envtonment, and wfll be highly 
computer iterate. 


Written application with fufl CV shoiJd be sent to: 

LORNAMEAD UD. 

Lomamead House, 

1/5 Newington Causeway, London SET 6H> 
for the peraond attention of the Group Financial Director. 


CHIEF ACCOUNTANT - 
GENEVA 


The World Council of Churches, Geneva. 
nwtni f!htef Arr mmtant. - 
fully QuaBfled and expe ri enced in comp ut e ri sed 
accounting and sympathetic to the 
Council's ecumenical calUng. 

Monthly salary range from fifty £1210. 


Further details from the D ir ector of Personnel. 
WCC. 150 Route de Fentey. PO Box 2100. 
121 1 Geneva 2. Switzerland 
(Fax: 022 791 0361). 


Cloning date will be December 31, 1994 


when you can be 


International ? 


Use the FT 


Senior business people all over Europe use 
the FT throughout their working week. 


They use it to keep up with the news, views, 
issues and most importantly the opportunities. 


So for key national and international appointments, 
using the FT gives them a wider choice of the top jobs. 


Today Europe is the job market and the FT, 
Europe's business newspaper, is where to find it 


For more information please call Stephanie Cox-Freeman on +44 71 873 3694 




FINANCIAL TIMES 

EUROPE'S BUSINESS NEWSPAPER 


I s ! 


A 


SENIOR FINANCIAL ACCOUNTANT 


frond 

Qldflur 



PIMA& 

GORDONS 



DRY GIN 


To £35,000 + car 


London Wl 


Guinness PLC n one of the UK's leading consumer goods companies with a 
market capitalisation of over £Bba, 23,000 employees worldwide and a 
turnover in excess of £4bn. It has the most outstanding portfolio of premium 
drinks brands in the world, i Deluding Johnnie Walker, Bell's, Gordon's Gin 
and, of course, Guinness itself, the world's mast celebrated stout It is one of the 
few truly global beverage businesses. 

As a result of the Group’s ongoing commitment to career development, a 
promotion within Group Financial Control has created the opportunity to join 
this young, committed and professorial team. 

The post holder will report to the Head of Group Reporting (and where 
necessary deputise for him). The role wfll focus on the preparation of the 
Group’s consolidated monthly management accounts and the half year and 
annual published accounts together with flail year estimates and analytical 
reviews. 


The position harries a high profile bringing the post bolder into regular contact 
with the senior management of the Group. 

Suitable candidates wifl be either ACA or CIMA qualified and will have 
trained in a ’big 6’ practice or major PLC. With at least three years' port- 
qualification experience, yonr achievements to date wfll have equipped you 
with the requisite technical skills to succeed in this role. You should also possess 
strong communication skills and the ability to liaise effectively at all levels. 
Interested candidates should apply in writing enclosing a CV to our 
consultant, Matthew Den wood at Executive Connections, 43 Eagle Street, 
London WC1K 4AP (Tfefephone 071 242 8103 - Fax 071 831 4571). 



TIIB 

GUM EAGLES 
IK1TKI. 


BELL'S 

(lUSrol.hUlMk, 



FillHii ml 


and. of course... 




GUINNESS PLC 


GUINNESS 


RECRUITMENT CONSULTANTS GROUP 


2 London Wall Buildings, London Wall, London EC2M 5PP 
Tel: 0171-588 3588 or 0171-588 3576 
Fax No. 0171-256 8501 



Opportunity to gain valuable bank audit experience 

INTERNAL AUDITOR 


CITY 


NEWLY/RECENTLY QUALIFIED ACCOUNTANT 

£25,000-£30,000 
+ BONUS 


LONDON BRANCH OF MAJOR EUROPEAN BANK 

Our client's business in London has expanded rapidly and this is a new position within their small 
Compliance/Intemal Audit team. We invite applications from qualified Chartered Accountants who 
have trained with a leading practice and gained experience in banking/financial services industry audit 
The emphasis will be on the audit of trading activities, calling for a knowledge of modem treasury 
products. This is an exacting position with scope to develop the role and the successful candidate will 
either have relevant audit experience in the City or be a confident individual making a first move out 
of the profession. Initial remuneration is negotiable £25,000-£30,000 + Bonus and bank benefits. 
Applications in strict confidence quoting ref. IA241/FT, to the Managing Director, ALPS. 



CLIFFORD CHANCE 


DIRECTOR - FINANCE AND ADMINISTRATION 


MOSCOW 


OiffoidChanceisalradmginier n atiD ri al l aw f um w i i h 21 inte rnational gf&aa w h ic h han d le all aspects ofb nsinew and 
finance ffrmrafrinnrinrat rliVnts and finanrtnlnvmrnTtnm 'T^ff MnwmwnffirrTOhirh k continuing to expand currently 
employs 12 Russian and Western lawyers and is relocating into modern new offices. CHfibrd Chance is seeking to 
appoint a Director — Finance and Admtmsiratkta to assume overall responsibility far all son-legal service functions. 


As bead of finance the role will predominantly be ccruzoQingall aspects of the financial operation including advising 
and assisting the resident partner and providing periodic management accounts and forecasts to partners based in 
London and Moscow. In particular your team will be responsible for all re po rt in g, budgetary control, internal systems, 
baling and credit control, returns to the relevant tax authorities and liaising with the external accountants. 


Why think national j 


You will also be dedicated to the effective running of the personnel and adnrinistratioQ functions, human resources, 
pr emis e s and supplies indudiag negotiations with external suppliers. 

Ideally aged in your 30’S or early 40’s you will be a fluent Russian and English speaker and have 
experience of international finance and management. Ybn wfll bcriipkanatic and have theabflity to 
hdp manage and develop a growing business. 

Wit farther infor mation "" *>«« o nntf anding career opp or tunity with a nwjnrmigniatinMl law firm 

please contact our advising consultant Kean August an 44 71 209 1000 or send a curriculum vitae 
in confidence to FSSEnropeyCJiarlotteHoiMe, 14 Windmill Street, London W1P2DH; UK 
or fax to 44 71 209 OOOL AH applic at ions will be forwarded to FSS Europe. 


■ 


FSS 

FUROPE 


airjQmaica® 


AIR JAMAICA LIMITED - 
CHIEF FINANCIAL OFFICER 


A Chief Financial Officer is required to coincide with the imminent privatisation of 
this National Carrier to be based at the Airlines’ Head Office in Jamaica. 


A CPA or similar qualification is essential and airline experience would be an advantage. 
An attractive salary and benefits package will be offered to the successful applicant 


Applications, together with full curriculum vitae, should be submitted in writing to 
the Chief Executive Officer, Air Jamaica Limited, 72-76 Harbour Street, Kingston, Jamaica, Wl 

or by fax to (809) 967-3125 


VENTURE 
FUND MD 


A Midlands based Regional 
Fund seeks a Managing 
Director. Key elements are 
Fund-raising, Deal Making, 
Staff supervision and 
achievement of a Deal Flow. 


You will need empathy with 
SMBs, a knowledge of 
Accounting (probably 
qualified), toe ability to spot 
a winner; the personality to 

tie np the deal, supervise 
due diligence and monitor 
performance all at Board 
leveL 


Attractive Salary and 
Carried Interest 


CVtar. 

■Boa Ann, 

FtaudUTfeus, 
One Southwark Bridge, 
London SE1 9HL 


Marc am 


The European Headquarters of one of the leading US software companies is expanding its already successful finance department 
with two tey positions. These oppartwanes are based in either the European HQ in ParisorUKopcraSioa In Warwick. 


Business Controller 


■ THE POSITION: Reporting to the European Financud Director, this operational job wi II provide you with a highly visible 
role in wtock you wifl be ezpected to take an amovatm approach a change the (xuroen across Europe. As well as urqming 
cash flow and implementing coa refaction ptiynmnes. you wiU also tram in comma negotiations, and be mpenntiefor die 
management ttpaning processes for the repon. 


I THE CANDIDATE: Benefiting from at least six years in industry, you possess ex rdteitf conmaieotum stilb and an 

(rtf. 1751 i 


Financial Analyst 


■ THE POSITION: Reporting to the Sadness Controller, you will be responsible for preparing the monthly cotaoHdariaus. 
coanhuaing budgets, qaaterh plans and management reporting across Europe as well as pnrruBng technical support to the 
European finance lean mepenmng unto. 


■ THE CANDIDATE: After some 3-5 years' practice within accoutring, you are hating a develop your skills in an 
aaemariontd eimranntent. (ref. 1750) 


For both posidtas, candidates shoohl be basinets school graduates or toil a professional mourning qaalifimm. speeding 


Please contact Etisa DIMITRI an (33 I) 42R9D9J7 or tend a full curriruhtm vitae, quoting the relevant reference, to 
NORMAN PARSONS, Ehsa DIMITRI, 6 mr Pad Baadry, 75008 Paris. France. 


vA&sman &astk?nd 


GROUPE R05ERT HALF 


-V O 31 D LEADER IN FINANCIAL RECRUIT M 5 T WITH OVER 160 0 r F ! C e $ I N 3 CONTI M E N T L 














FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


COMMODITIES AND AGRICULTURE 


Russian claims aluminium 
exports will fall this year 


Norway to close Statfjord platform 


Barbados seeks force majeure on sugar for EU 


licensing arrangements, plat- 


way for new fields 


an attempt to stimulate activ- 


fonn operators are obliged to 
remove the massive structures 
from the field once production 
ends. But the parliament has 
postponed discussion of a gov- 
ernment White Paper on plat- 
form removal guidelines until 
nest spring, so it remains 
unclear what platform aban- 
donment requirements will be 
made of the oil companies- 
Production from the North 
East Frigg field ceased last 
year and work is currently 
uprfp r way to close down the 
Odin field. In addition, the 
Frigg field will soon end pro- 
duction as Phillips Petroleum 
completes plans for the closure 
of several platforms in the Eko- 
fisk field. 


direct state interest of up to 75 
per cent In Reids and implies 
that the oil companies have to 
cover a larger share of explora- 
tion costs than is indicated by 
their shareholdings. 

The policy changes also call 
for the state to relinquish 
rights to participate in fields 
with less that 50m tonnes of oil 
equivalent assumed discovered 
reserves. 

The state will also consider 
reduction or disposal of Its 
shareholdings in small fields 
and for the 15th licensing 
round may decide not to partic- 
ipate in new licences which are 
due to be awarded next year. 


By Kenneth Gooding, Minting 
Correspondent, in Atlanta 

Russian aluminium exports 
will Call from the record 2.1m 
in 1983 by between 200,000 and 
300,000, according to Mr Igor 
Prokopov, president of Concern 
Aluminiy, the co-ordinating 
organisation for the Russian 
industry. 

Exports would continue to 
fall in 1995 but only slightly, he 
added, during a briefing at the 
Alum! tech. '94 conference here. 

Analysts greeted Mr Proko- 
pov 's prediction with some 
scepticism. Mr Stewart Spec- 
tor. of the Spector Report, 
pointed out that, according to 
the Russian Foreign Economic 
Ministry, by the end of Septem- 
ber aluminium exports already 
had reached 1.65m tonnes com- 
pared with I -26m in the same 
months of 1993. Mr Prokopov’s 
forecast suggested that in the 
final quarter Russian exports 
would be about 60 per cent 
down from the corresponding 
period blast year. 

Mr Prokopov said Russia had 


By Canute James in Kingston 

Jamaica's bauxite (al uminium 
ore) output grew to 8.77m 
tonnes in the first nine months 
of this year, 5 per cent higher 
than in the corresponding 1993 
period, mainly as a result of 
higher demand from refiners 
that have expanded capacity. 


By Nikki Tatt in Sydney 

Renison Goldfields, the 
Australian mining company in 
which Britain's Hanson group 
holds a 40 per cent stake, has 
signed an exclusive agreement 
covering exploration for tita- 
nium mineral deposits in 
Ukraine. 

The agreement has been 
signed with Ukraine Joint 
Stock Company “MFS”, which. 


CUt its annual ainwilnhiro pro- 
duction by about 360,000 
tonnes since the international 
trade agreement was reached 
in February by bis country and 
Australia, Canada, the Euro- 
pean Union, Norway and the 
US. Although Russia under- 
took to reduce output by 

500,000 tonnes, Mr Prokopov 
hinted that further cuts were 
unlikely because he said that 

1995 production would be 
about the same as this year's. 

He suggested that some 
“adjustment" might be made to 
the terms to the trade agree- 
ment when delegates from the 
six producing regions met 
again next month in Novem- 
ber. However be did not expect 
any move to re-start produc- 
tion capacity recently shut 
down. Mr Prokopov said Rus- 
sia’s own consumption of alu- 
minium could not be expected 
to improve before the mid of 

1996 at the very earliest 

Be said Russia would be con- 
suming three or four times as 
much aluminium in packaging 
as it was at present two or 


Production of alumina (alu- 
minium oxide) grew by 13 per 
cent to 2.44m tonnes in the 
nine months. 

The inland's largest refiner, 
Alumina Partners, is expand- 
ing its capacity and is produc- 
ing at a rate of 1.45m tonnes a 
year, against i-2m tonnes in 
1993, said Mr Parris Lyew- 


in turn, has been authorised by 
the Ukrainian State Committee 
on Geology (Goskom), to repre- 
sent Its interests in the 
development of deposits in the 
area. 

Certain tailing deposits, 
associated with gristing Ukrai- 
nian heavy mineral production 
operations, are also covered by 
the agreement. According to 
Renison, these “appear to con- 
tain commercial quantities and 


three times as much in trans- 
port and twice as much in con- 
struction. This was not a fore- 
cast of what would happen but 
only a “wish list" for when the 
industry revived. It would not 
takp much capital to provide 
the extra products, just enough, 
to modify some existing plants. 

Mr Prokopov said privatisa- 
tion of the Russian aluminium 
smelters was virtually com- 
pleted and “certain parties" 
including western trading com- 
panies had built blocks of 
shares totalling between 20 and 
30 per cent of the capital of 
some smelters. He suggested 
that big western aluminium 
groups eventually would regret 
not buying some of these 
shares. Western companies 
were showing little interest in 
investing in the smelters in 
any way, he said. 

Analysts pointed out that 
this was understandable 
because, to attract risk capital, 
Russia’s political system had 
first to be stabilised and reli- 
able laws for the protection of 
investments introduced. 


Ayee, executive director of the 
Jamaica Bauxite Institute. 
Other refiners have also 
increased their productivity, 
he said. 

The institute is forecasting 
total bauxite me production for 
this year at 12m tonnes, 
against actual production of 
11.22m tonnes last year. 


grades of flmenite”. 

RGC, which started to look 
at the potential for developing 
Ukrainian mineral Mndu last 
June, said there were "a num- 
ber of prospects, previously 
explored by Goskom, which 
show the potential for large- 
scale commercial develop- 
ment”. 

A drilling programme is 
scheduled to start in the 
December quarter. 


Chinese 
output 
surge seen 

By Kenneth Gooding 

China’s aluminium production 
would grow by nearly 50 per 
cent by the year 2000, at which 
time It should have caught np 
with the country's booming 
consumption of the metal, Mr 
Henglong Li, a director of the 
China National Non-ferrous 
Metals Industry Corporation, 
said in Atlanta yesterday. 

However China's production 
of alumina (aluminium oxide) 
woald not be able to keep pace 
with this growth and imports 
would continue at a high level. 
Last year China produced l-8m 
tonnes of alumina and 
imported 970,000 tonnes, said 
Mr Ii. In the first half of this 
year imports probably reached 
more them lm tonnes. 

Speaking at Alumttech *94, 
Mr Li said China’s shotintna 
output last year was 1.22m 
tonnes while consumption, 
after many years of growing at 
an "tiunflt rate of 10 per emit, 
was 1.35m. He pointed out that 
to reach Us production target 
China would have to Increase 
al uminium smelting capacity 
by about 100,000 tonnes a year 
untfi the year 2000. 

Present firm plans included 

fiypanfltug nrmtinl capacity at 

the Qingtongxia smelter from 

100.000 tonnes to 220,000 and 
at the Baiyan smelter from 

50.000 to 100,000. Mr Li said 
his gr o up also hoped to bufid a 
new smelter with annual 
capacity of 125,000 or 250,000 
tonnes, together with a coal- 
fired power station, at Shanxi. 


News of the Ukrainian agree- 
ment came as Renison told 
shareholders at its annual 
meeting that most of the com- 
pany’s operations had contin- 
ued to trade profitably in the 
current financial year - the 
exception being Renison Tin, 
which had a production short- 
fall. Renison moved into the 
black in the second half of 
1993-94 after two years of 
losses. 


By Karen FoseQ in Oeto 

Statofl, the Norwegian state oil 
company, says it plans to close 
one of three platforms in the 
prolific North Sea Statfjord 
field by 2003 in a hid to avert 
early closure of the entire field 
in 2007. This announcement 
comes while several other oil 
companies are in the process of 
eithe r doting or planning to 
close platforms. 

The Statfjoni field comprises 
three frilly integrated produc- 
tionjprocessing platforms but 
the company says that by de- 
co mnristioning the A ' platform 
in 2003 the remaining B and C 
platforms could c ontinue full 
operations beyond the 2009. 


By Karen Fossa 

Recent changes to Norwegian 
oD policy have cleared the way 
for three new North sea field 
developments for which more 
than NKriObn will be invested 
to boost domestic crude oil pro- 
duction. 

Saga Petroleum, Norway’s 
largest independent oil com- 
pany, is seeking approval to 
develop the NKrSbn <£470m), 
180m-bartel Vigdis oil field and 
for a NKr45bn extended devel- 
opment of the Snorre till field, 
tor which the company has 
upgraded recoverable reserves 
to Ibc barrels from 717m. Stat- 


By Canute James 

Barbados is seeking to declare 
force majeure* on it sugar ship- 
ments to the European Union 
because of the drought-hit 
island’s inability to fulfil its 
1994-95 quota. Because of the 
dry weather the 1995 harvest 
will yield less than 40,000 
tonnes of raws, according to 
Mr Rawle Eastmond, the agri- 
culture minister. 

“Barbados will not be able to 
satisfy its sugar quota with the 
European Union of approxi- 
mately 54.000 tonnes, as pro- 
duction is projected to be possi- 


They would face closure in 
2007 if the A platform 
remained in operation beyond 
2003 and the field’s overall eco- 
nomics would, under this sce- 
nario, deteriorate substan- 
tially. 

“Compared with other 
options, this solution should 
boost the residual net present 
value of the field by NKrl.frlbn 
<£L55m)m 1995 money, before 
tax.” estimates Mr Morten 
Krogh. head of the team in 
charge of the decommission- 
ing. 

Statfjord’s daily average pro- 
duction has reached 650.000 
barrels, exceeding the 1993 pro- 
duction plan for 600,000 bar- 
rels, but the rate win plunge to 


oil, the Norwegian state oil 
company, also plans to develop 
the tiny (aim-barrel) Yme field 
in the southern part of North 
Sea. 

Because fewer and. smaller 
commercial oil discoveries 
have been made in Norway in 
recent years the government is 
anxiOUS to maintain a high 
level of exploration activity, 
which could contribute to 
extending the duration of peak 
oil production, expected to 
drop sharply hi the next few 
years from a current average 
daily production rate of 2.6m 
barrels. 

The policy has been eased in 


bly below 40,000 tonnes.” be 
stated. 

The government, which is 
raising USS22.5m to restruc- 
ture the industry, is preparing 
to apply for force majeure 
under the relevant provisions 
of the Sugar Protocol of the 
Lome trade and aid conven- 
tion, the minister said . If this 

application is accepted the Bar- 
badian quota will not he 
reduced in subsequent years. 

Barbados produced 51,400 
tonnes 0 f sugar in the 1994 har- 
vest, 5,000 less than in 1993. 
according to official figures. 
The island has been unable to 


about 26,000 barrels a day by 
2009. 

By the end of this year about 
3-9bn barrels of the field's 30bn 
barrels of recoverable reserves 
will have been extracted and 
output is expected to foil to 25 
per cent of today’s level within 
five years. 

The Statfiord A platform pro- 
duces 170,000 b/d but processes 

320,000 b/d. 175,900 barrels of 
which is derived from the adja- 
cent Snorre field, operated by 
Saga Petroleum. Processing of 
Snorre crude will have to be 
undertaken by (me of the other 
two Statfjord platforms when 
the A unit is dosed. 

According to Norway's field 


ity off Norway, Europe's big- 
gest oil producer, which feces 
stiff competition from regions 
elsewhere in the world for oil 
company investment, which 
was set to plunge next year 
from an average annual 
NKr30bn. In response the gov- 
ernment has scrapped the 
so-called sliding scale arrange- 
ment, which allows toe state to 
increase Its direct shareholding 
in all licences that may con- 
tain undiscovered resources 
and for all discoveries in the 
Barents Sea. 

The top level of the sliding 
scale arrangement allows a 


fulfil its US quota of 7,500 
tonnes of raws for “several” 
years, because of declining pro- 
duction, and is supporting pro- 
posals from its colleagues in 
the Caribbean Community 
(Caricom) for a joint US sugar 
quota, Mr Eastmond said. 

Caricom is seeking a com- 
bined quota from the US so 
that shortfalls by any one 
member can be met by others 
within the group. “If such a 
proposal is agreed to by the US 
officials, then Barbados sho uld 
still be able to benefit from this 
quota system when we return 
to our production target of 


between 65.000 tonnes and 

70,000 tonnes per year,” the 
agriculture minister said. 

The money being raised for 
the financially troubled indus- 
try will come from bonds 
floated by Citibank of Trinidad 
and Tobago, and from a loan 
from the Caribbean Develop- 
ment Bank, said Mr Owen 
Arthur, the prime minister of 
Barbados. He said the industry 
needed at least $30m. 

The present restructuring of 
the sugar industry might well 
be the last said Mr Arthur. “If 
this fails, the consequences 
could be dire." 


Jamaica lifts bauxite production 


Renison in deal to explore for titanium in Ukraine 


Policy changes clear 


COMMODITIES PRICES 


BASE METALS 

LONDON METAL EXCHANGE 

(Prices (ram Amalgamated Maul TracHnfl) 



Caeft 

3 rathe 

Close 

181 W0 

1841.5-2.0 

FVuvtaua 

1794-5 

1817-8 

Wgh/taw 

1825 

1853/1830 

Mi Official 

182&5-8.D 

18488-7J) 

Kafb dose 


1848-7 

Open Int 

860333 


Total dafly iumwr 

71^15 


■ AUJMNOJM AL10Y [S per toraw) 


Ctow 

1785-96 

1820-5 

Pravioua 

1750-60 

17S6-9B 

ttgMaw 


1825/1815 

AM Official 

1790-800 

1825-30 

Kerb dose 


1820-30 

Open mt 

2.794 


Total daHy turnover 

318 


■ LEAD (S per tonne) 



Ctosa 

668-9 

671-2 

nevloua 

6605-7.5 

6705-15 

l-Bgh/knr 


674*71 

AM Official 

657J5-05 

872-25 

Kerb cto» 


671-2 

Open Int. 

45.823 


Total Cady turnover 

7J79 


■ NICKEL (S per tome) 


Ctosa 

7235-48 

7355-80 

ProvtoUa 

7205-15 

7320-5 

rtghrtow 

72BS 

7430/7316 

AM Official 

7200-5 

7380-6 

Korti done 


7315-20 

Open kit 

68850 


Tori da*y turnover 

12^47 


■ TIN (S per tonne) 



Ctoao 

5820-30 

5900*10 

Previous 

5660-70 

5745-50 

Hl^Vtow 


5370-3770 

AM OffidaJ 

5690-700 

5770-60 

Kert] dose 


S955-85 

Open Int 

10293 


Tori duly turnover 

7JS84 


■ 29NC, special Wgn grade (1 par tome) 

Close 

1107-8 

1129-30 

Previous 

1099-1100 

1121-2 

High/tow 

11088 

1132/1117 

AM Omdal 

11005-7.0 

1128^0JI 

Kerb dose 


1132-3 

Open kit 

102,017 


Tori da/y turnover 

iasi9 


M COPPER, grade A (S per tonne) 


Ctosa 

Zeai.6-2J5 

28425-35 

Previous 

2621-2 

2638-9 

WgMorr 

2S8&C2864 

286O»30 

AMOfficri 

2682-4 

2844-6 

Kerb dose 


2644-5 

Open kw. 

217^56 


Total daey turnover 

80814 


■ LME AM Offldal E/8 me 1.6371 

LME Ctoebig E/S rater 183S6 


5pr*18379 3m9tt1.fi368 B/»Bre!8343 9fflff»rJ8306 

■ HIGH QHADC COPPB1 (COMEX) 


n*» 


qp*» 

Ctosa ctawge 

tot Mw 

M Vtrf 

Oct 12480 +185 

12*80 12280 

877 133 

Nor 12385 +185 

12200 12280 

1.465 130 

Deo 12035 +1.35 

12350 121.00 40778 4,117 

Jm 12285 +185 

- 

808 17 

Feb 12185 +1-35 

12080 IISLS0 

574 4 

Mar 121.10 +135 12180 119.00 

8,591 £133 

Tori 

60410 7831 


Precious Metals continued 

■ GPU) COMEX (too Troy «g,-»troyoz.) 

sn Off'S Qpso 

price donga Mg* MUM 

Oct 38X7 -06 3000 3890 34 29 

Nm 3888 -08 ... 

0« 3902 -08 3328 3888 00 319 31.451 

M 383.7 -08 3914 3914 1£744 712 

Apr 3978 -08 3988 3078 1588 1,382 

Jnn 4018 -07 4027 4018 0585 963 

Tot* 04809 31088 

■ PLATINUM NYA£X(S0 Troy at; S/troy oz) 


Oct 

Jm 

TaW 


GRAINS AND OIL SEEDS 

■ WHEAT LCE fl? per tonne) 

ua Day's Opea 

lake dam Mgk Lm M 

Her 105.10 +006 1D525 1GS25 1837 

Jm 107.15 • 1885 

Mar 10920 -O0S 10885 10820 1883 

M*| 11180 +025 11180 11180 1873 

JM 11285 -005 11325 11225 200 


SOFTS 

■ COCOA LCE (gitocwaj 


MEAT AND LIVESTOCK 

rn UVE CATTLE CteE flOJXXMia; owiaAbta 


w 


Sae Bar's 

price carp i Iflgfe Low 


0p«» 

M 


M 


sw nay* 


Law W M 


Sap 

Tate 


9820 


40 

8251 


58 

0k 

969 

+10 

888 

950 20715 1531 

Dec 

89825 +0100 70150 89525 

7 

2 

- 

Urn 

987 

+7 

997 

981 43.138 £80* 

to 

60825 +0125 50975 00250 30700 

0467 

24 

to 

997 

+8 

1005 

902 14,414 355 

to 

80850 +0 225 8&350 80700 201B5 

£559 

11 

JM 

1011 

+8 

1019 

1019 £305 4 

JBO 

60525 +0050 85800 B037S 

1£957 

714 

5 

to 

1024 

+« 

1031 

HU! 12.485 5 

A"B 

04.400 -0075 64350 64.400 

4X14 

332 

- 

to 

1039 

*7 

10« 

1038 &B15 18 

Oct 

8Sl3SD +0050 65500 60350 

1X88 

133 

108 

Total 




11L221 0509 

TOW 

80307 

0200 



4278 

+08 

4298 

4205 20430 

£065 

DM 

394/2 

<311 

+08 

4334 

4314 £717 

83 

ter 

<05/7 

4308 

+08 

- 

- 1251 

252 

ter 

381/6 

441.3 

+08 

• 

- 445 

100 

JM 

351/0 

4444 

+04 

- 

- Z 

• 

to 

354M 




25488 

£533 

to 

385/0 

MNUM NYMEX (100 Troy OK4 S/lray azj 

TMM 



Dae 

Mar 

tear 


oec 

18140 

+075 

18145 

15020 

4480 

310 

Mar 

16015 

+380 18X00 18080 

1459 

229 

Job 

184.15 

+080 

- 

- 

375 

1 

TMM 





£414 

840 

■ 8H.VER COMEX (100 Troy oza CentaAroy col) 

Oct 

5*24 

+38 

. 


138 

38 

to 

542.4 

+08 

- 

- 

- 

- 

to 

5*4.7 

+38 

5474 

5304 74407 224*0 

Jm 

5*73 

+08 

5454 

5454 

80 

£096 

to 

5503 

+08 

5558 

5400 17420 

34 

to 

5804 

+08 

5804 

5500 

4492 

630 


■ WHEAT CUT foOOCbu min; oanta/E0(b buaheQ ■ COCOA CSCE (10 temea: tteonw) 

-M 401/0 393/4 3B801 11,717 

-5« 41 I/O 40SO 24831 4830 

-Sffl 385/0 381/2 *877 508 

-1/2 3530) 35QO 10810 1,138 

■V0 3S5H S*M 237 5 

- 366/4 36MJ 148 3 

77,708 17899 

■ MAIZE C8T ftQOQ bu nto; cents/58t> bushel) 


■ UVEHOt»CME(4MQabe;canta«i«* 


1SS 

♦17 

1365 

1343 Z7J57 4438 

Dec 

34750 +1400 34400 30350 

14 

6 

1387 

+18 

1408 

1387 23/482 £*19 

to 

3775 0 +0850 30000 30650 10330 

0619 

1427 

+16 

1437 

1419 

£185 

284 

to 

37.700 +4875 37400 36450 

7470 

682 

MS3 

+16 

1458 

1455 

£031 

1 

Jm 

4£875 +0600 *2875 41475 

4416 

501 

1480 

+18 

- 

- 

1483 


Mb 

40100 +0350 <2.100 41400 

14 85 

235 

1507 

+18 

1510 

1505 

4488 

1 

DM 

30850 +0100 30000 30575 

341 

5 





70226 74*8 

TOM 

83418 

£1« 



Tate 

■ COCOA 0CCO) (SOfTs/lanne) 


nw 


172,151 28,770 


ENERGY 

m CBUOeOILim4EX(4£OroUSsaftit/banwl) 


Sri! Oafs 


tew ke M 

1415 40 10 1525 1707103072 54858 
1885 +0.13 18.18 1781 68,160 «Mp S 

1785 +0.10 1888 1780 32822 10,199 

1787 4006 1882 1787 23825 3.407 

1781 +883 1784 1780 17827 95» 

• 17.78 4802 1781 1780 11048 2.171 

390422109,121 

■ CHUM OH. 1P6 (S/buri) 


Dae 

Jm 
to 
It me 
•tr 

Tote 


PRECIOUS METALS 

■ LOfffiOM BULLION MARKET 
(Prices euppted by N M KottechCcfl 

GoW (Tray ot) * prtca 

38880-389.00 
38986-38985 



UtaM 

to* 


Opaa 



take 

atom 

to 

tew tot 

te 

Dec 

1088 

+an 

1743 

1847 87480 30118 

Jan 

1077 

+000 

1043 

1088 41409 14427 

Fad 

1083 

+045 

1071 

1037 13428 

£787 

tor 

103* 

♦043 

1068 

1048 10104 

1,748 

Apr 

1044 

• 

T0SZ 

1044 3487 

383 

toy 

104Z 

+048 

1090 

1041 2469 

6S? 

Tori 




171,155 80381 

■ WEAUNG 00 WYI0X (*£00Q US pfc; oUS gtoj 


SMI 

to* 


Opwi 



prio* 

crisea 

to 

tear W 

VM 

Ore 

4040 

-008 

4940 

4020 12558 

£210 

DM 

4942 

-007 

6050 

4940 44,728 144*6 

Jaa 

9042 

•047 

5080 

5020 32,717 

3452 

FM> 

50*7 

-002 

51.40 

3075 18401 

1,484 

tor 

5062 

+043 

31.10 

5080 11,100 

810 

to 

4187 

+003 

5030 

5010 7,112 

738 

Tori 




W4n 30192 

■ QA8 OB. K (UgnraJ 




Sen 

to* 


Opan 



prtea duoge 

to 

Um U 

VM 

ter 

153.75 

+060 

r5549 15050 29470 

0380 

Dec 

15540 

+050 

1E025 

154.75 20284 

070 

Jan 

15060 

*050 

15750 15050 21,265 

34W 

ft* 

157 JO 

+050 15025 15775 £105 

828 

Mar 

157-50 

+050 15023 

15749 7,141 

930 

Apr 

15540 

+045 

18850 15050 2475 

121 

Tefal 




104499 17428 

M NATUW-OASinwEXpoiOOOoiaBteStawMtiq 


Sett Bar's 


£ equiv. 


Ipenfaig 
taming fix 
flamoan fix 
oy’s Hgh 
a/a Lew 
revious dose 
eco Ldn Mean 

manta 

months 

months 

tverFbr 

pot 

months 

months 

yo* 

old Coins 
ugenand 
acte Lea/ 


230209 
38015 237.721 

290.10-390.40 
33& 70-389. 10 
38880438820 

Odd Lending dates (VS USS} 

_407 6 months 8 -12 

_4.6 7 12 months —MS 


Oae 

Jm 

to 

Urn 

HK 

ter 

Tote 


2808 -0823 
2896 -0808 
2833 -0.014 
1873 -0818 

1810 -0819 

1811 -0019 


to 

£035 

£110 

2850 

1890 

1825 

1825 


OpM 
Law tat 

1882 31,725 
2080 1A337 
2819 12317 
1882 11821 
18D0 6883 
1.903 6828 
134892 


VM 

17253 

£733 

1823 

968 

418 

382 

25 , ni 


■ UNLEADED GASOLINE 
NTMEX (4Z8O0 US gtfK e/US gafej 


-481 


p/troy 02 . 
328.80 
333-40 
33&60 
352.16 
S pitas 
391-394 
399.70-402-20 
91-94 


US eta cote. 
538.75 
64585 
553-35 
67280 
£ eatir. 
239-242 


Sad Oar** Opaa 

pdas tbwga Ugh In U M 

No* 5*88 -003 5580 5400 10026 14809 

Dec 5505 -0.73 58.45 58J» 34037 15292 

Jm 5B.14 -023 50.75 5580 13261 <417 

to 5486 4(106 5585 5480 8845 1,117 

MV 55.15 40.18 5520 5480 3,777 449 

far 5085 4028 5H-7TJ 5040 4,487 1,110 

Triri 6M55 38882 


Ok 


218/D 

22V* 

237/4 

243/4 

2*8/4 

2S3A 


to 
to 

TaW 

■ MW LCE £ per tamaf 


+2/8 *19/4 215/4 120,911 14816 
+2* 2305 2274) 59.653 4,142 

*OA 239*1 236/2 20313 1010 

+2/4 244/4 241/D 298« (859 

+2/8 248/4 245/6 £617 14G 

+2/2 253/0 250/4 1£233 514 


Data 

Mr- 


Mn Aw. to 

.99072 97868 


LCE (Vtorme) 


252839 23890 


No* 

101.40 

. 


- 148 

. 

Jan 

10340 

020 

- 

- 416 

- 

taw 

10015 

•013 

re 

- 1» 

- 

May 

10015 

-025 

. 

48 

- 

to 

9340 

•015 

- 

5 

- 

TMM 




W7 

- 

■ SOYABEANS £B7 (£000bo nfin ewita/BOta feoriaO 

to* 

532/4 

+4/4 

554* 

548/4 30785 20843 

Jaa 

584/2 

♦4/2 

S67A 

5»0 44/B79 

0134 

taw 

574® 

*AM 

577/D 

570 ft) 20254 

4JB4 

May 

583a 

+WJ 

584/4 

577/0 10834 

1488 

JM 

588/0 

+-W 

581/0 

584/8 17464 

1,424 

Al* 

seen 

+4* 

580/4 

S8S/0 1454 

227 

Total 




1408(8 377*2 

■ SOYABEAN (ML COT (BO.OOQBas: centa/Rfi 

Oec 

20*8 

+058 

2087 

2000 344QB 

7436 

Jwt 

2051 

+043 

2549 

2115 10419 

£838 

Mar 

2547 

+044 

2025 

2448 13481 

2444 

M»7 

24.72 

+042 

24.80 

24.40 11,822 

£740 

JM 

2440 

+042 

24.70 

24.15 7408 

1418 


2445 

+040 

2445 

2440 £196 

S3 

TMM 




87,788 

17,108 

■ SOYABEAN MEAL CST (100 tome 


Oec 

1811 

+02 

1634 

1824 41,715 

£539 

Jaa 

1644 

+02 

184.4 

1834 17.01* 

1438 

■w 

167.7 

+02 

167-3 

167.1 13475 

1475 

tey 

171.1 

+04 

1714 

1705 0111 

1418 

JM 

175.1 

+04 

1754 

174A 0128 

1,158 

Al* 

1706 

+08 

1774 

1784 1,115 

93 


to* 

3553 

+42 

3550 

3482 

4450 1.326 

Jm 

3558 

+45 

3565 

3460 10757 J092 

tor 

3615 

+62 

3500 

3415 

0101 

834 

to 

3470 

+32 

3447 

3405 

£128 

178 

JM 

3 435 

+20 

3449 

3405 

1030 

2* 

Sap 

3415 

+7 

3393 

3380 

1.408 

S3 

Total 





2S4W 4408 

■ COFFEE "Cf CSCE QJjSOOtos; oenta/Bs) 


Me 

18940 

-1.40 19C40 

1801O 12040 4487 

Mar 

19450 

-125 197.75 

191.10 12083 1468 

to 

19655 

-1-15 19940 

19440 

4083 

474 

JM 

197.45 

-105 

201 00 

19600 

1074 

125 

to 

10840 

-200 20100 

197 JS 

884 

47 

ore 

20000 

-140 55140 

19075 

846 

1 


■ COFFEE 0CO) (US certa/JxwS 


oct a 

Qarp.16% — 

15 maps 


Price 
18083 
• 16424 


33829 8802 


18483 

18053 


90 

300 

450 


■ POTATOES LCE {E/torwaJ 


94812 108a Tite 


■ Nc7 PRBriUM RAW 8UQAH LCE (centa/ta) 

Jm 1300 .... 

Mar 1382 +010 

ter 1X15 +005 

M 18,10 +005 

TaW MO 

■ WMTB SUGAR LCE (Mom*/ 

Dae 35280 +020 33380 38080 3,199 480 

Mar 34880 +£90 3(780 34580 8823 1,131 

to 3*400 +Z 7 U 94580 340.4C £194 348 

to 34180 +180 34280 33740 £578 163 

Oct 31980 +080 31090 31980 695 25 

31780 +080 4 

178» 2,149 


1508 

1058 

2248 

2400 

1078 


-05 2200 2248 1.439 


Trial 

M FRBQHT QMFFBQ LCE (810/kndax petal} 


■ 9UQAR *11* CSCE fU2J03fc>s; centa/Pta) 

•a 1289 +003 1289 1289 98868 9,150 

Ha? 1281 +007 1286 1288 23,425 1,268 

Jri 12.77 +007 1282 12J5 14820 1813 

0C< I £56 +004 12.40 1233 13,440 70S 

Mar 1186 +003 1282 1130 1855 

to 1186 +003 - - 44 1 

Trial 1504T71Z038 


Oct 

1873 


1870 

1870 

341 

4 

■ COTTON NYCE OWJJOOtbo; cents/ba) 

ter 

1800 

-15 

1830 

1790 

253 

103 

Ok 

7203 

+092 

7245 

7100 23067 £124 

Ok 

1713 

-22 

1738 

1700 

145* 

114 

Mar 

7445 

+090 

74.15 

7£70 14059 £387 

Jka 

1648 

*3Z 

1682 

ieso 

003 

197 

May 

75.10 

+043 

75.IS 

7342 £805 533 

Apr 

1608 

-32 

1640 

1802 

142 

49 

JM 

7545 

+OJ2 

7095 

7400 4479 388 

JM 

1432 

-38 

1440 

1440 

4« 

8 

Oct 

71 J5 

+030 

71.15 

7100 553 57 

TaW 





£178 

472 

DM 

7050 

+036 

7000 

8070 2000 301 


Ctaaa 

Tree 





TeH 




8£3801£798 

w 

1874 

1873 





■ ORANGE JUICE NYCE (15400*81 centa/fee) 








Hot 

10S25 

045 

10060 

10440 £873 1,189 








Jan 

100.70 

•025 1I10S 10900 12008 1002 








Star 

11030 

- 

11445 

11200 0158 210 








to 

11600 

+OZ5 


- 1431 27 








M 

uasQ 

+425 

- 

- 875 10 








to 

121.75 

+025 

- 

- 543 1 








Total 




25433 3J22 


Wool 

The wori priw rise continued and occetaraed 
this week. Superfine merino, now coning up 
far auction more widely in Auabtata, met with 
good de mand (ram Ray. tin tari ng worid 
operator in Ms field. Prices (or liner merino 
■me throu ghout the wool market recovery, 
now imB w s y nr aU. torn dean relatively 
more tan other categories, end show no rigtt 
of toafag ground. With the wool market raeev 
ering headriy after a brief setback towards the 
end of September, sales al Austntan stodrpfie 
wool fane also Improved, and tnw schedria 
fixed by the govern me nt to filed wri Into 1995. 
Buying interaei In fto wooHBtrg Industry Is not 
at present srid to be buoyant thoo^i steady 
business wid good rates of actMty continue. 
The Austratm Eastern states market Motor 
dosed « 602 corns s kp, coppered with 7S3 s 
week ago. 


VOUIIIE DATA 

Open Interest and Volume data shown far 
contracts traded on COMEX. NYMEX, CUT, 
NYCS, CMC, CSCC end IPE Crude 06 are one 
day In arrears. 


INDICES 

■ REUTERS (BasK 18/9/31 *100} 


Od 27 Oct 20 month age year ago 
2104.7 20998 20902 1805,4 

CMB Putaroa (Base: 1887-100} 


Oct 28 
233.30 


Oct 25 
232-25 


month age 
23088 


year ago 
21060 


■ PORK BBJJES CME j40O3O63a; canta/taa) 

to 41800 +2800 41800 39890 8,733 18<n 

ter 42825 +2000 4282S 3a 400 1,008 139 

Hay 42875 +2800 42875 40800 321 38 

■M 41700 +2800 43JOO 4T8» 302 4 

Aug 42875 +1875 42700 42600 06 2 

Total 10430 1,178 


LONDON TRADED OPTIONS 

Strike price S tonne — -Cato—- -—Pete — 
■ AUIMB0UM 


P9.794) LME 

DM 

Mar 

Dec 

Mar 

1800 

74 

113 

36 

66 

1825 

81 

100 

46 

78 

1880 

48 

88 

98. 

89 

M COPPER 





(Grade A) LME 

Dec 

Mar 

Dec 

Mar 

2600 

108 

123 

54 

102 

2660 

81 

1D0 

7S 

127 

2700 

69 

80 

104 

157 

H COFFEE LCE 

Jan 

Mar 

Jen 

Mar 

3600 

280 

359 

222 

344 

3830 _ .. 

256 

340 

348 

375 

3800 ________ 

238 

323 

278 

408 

M COCOA LCE 

Dec 

Mar 

Dec 

Mar 

323 

43 

93 

9 

31 

960 

27 

78 

18 

41 

975 _ . 

16 

84 

32 

52 

■ BRS4T CRUDE IPE 

Nov 

□ec 

Now 

Dec 

1600 

101 

113 

e 

113 

1650 

82 

80 

19 

80 

1700 

32 

53 

41 

50 


LONDON SPOT MARKETS 

■ CRUDE OH, FOB Ifterbenet/DecJ +or- 


DubM 

$1067-6.722 

+0.176 

Brant Stand (dated) 

J17.13-r.18 

+0205 

Brent Stand pod 

S10906.99Z 

+OJI05 

W.TJ. (1pm eaQ 

$10134182 

+01225 

■ OS. PRODUCTS NWE prompt defray OF (tonne) 

Premium Gastrins 

$183-186 


Gas Ok 

$156-157 


Heavy Fuel Ol 

$83-94 

+10 

Naprtha 

$171-173 

+1 

Jd tod 

$132-133 

+2 

DtesM 

$162-133 

+1 

Predawn Aji* W Uwton tSTIi 9® STBS 


M OTHER 



Gold (per troy oz)$ 


-020 

Stiver (jtw troy aj)4 

5390c 

+3,0 

Ptafirram (per troy ozj 

S4202S 

+1.25 

PsBadhaw (per troy oz.) 

$15925 

+20S 

Copper (US DrodJ 

1200c 

+30 

Load (US prod) 

4025C 

+1.1 

7in (Kuala Utrrpur) 

1£37c 

+0-34 

Tin (New YortO 

2750C 

+80 

Cattle (Bve welqfiVT 

1103Op 

-0.90* 

Sheep (8ve weight* 

903Sp 

+1.12* 

Pigs pve wdtfifi) 

74, dp 

-1.42* 

Lon. day sugar (raw) 

$32200 

♦5-1 

Lon. day sugar (wto) 

$35700 

+8.0 

Tata S Lyle export 

£30000 

* 3.0 

Barley (Eng. feed) 

Ung. 


Mato (US No3 YaBow} 

$13£0y 


Wheat (US Oak North) 

£1®.0u 


RU*er(DBOf 

807Sp 


Rubber (Daej? 

8025p 


Rubber (KLRSSNol JM) 

3440m 

-1.S 

Coconut 04 pt*§ 

S8550V 

+15 

PMrn 09 (MMayJ§ 

$S420t 

+7.5 

Copra P»M)§ 

$4oaou 


Soyabean* (US) 

£1 52-Ov 

-00 

Cotton OJJook*A’ index 

7503c 

+020 

Wootttpa (84a Suow) 

451 p 

+11 


C par twma item omaretM ara»0 p poncoto. c mrite 

r SL**^* 1 " «n®k9. > OcVOoc. » HoWOoc-u 

Ofl/f&r. r to X Nor. f Undon Ptynai. } OF FMtJt 

^|Bribortwkrtdore.*ShreppjweaVa«icaA- 
Chanpa w> O fttcee are tar prerbua owT 


CROSSWORD 


No.8,596 Set by VIXEN 



ACROSS 

1 They fees op to work with 
models (8) 

5 The woman hit back - taken 
in charge (6) 

9 Ranges in order people's 
incomes (8) 

10 To stop some controversial 
parades is thought best (6) 

12 3 left to make a stand (5) 

13 Most injudicious - in America 
anyway (9) 

14 The floor is of stone in ani- 
mal-housing (Q) 

15 A stoppage a compulsive 
worker finds very hard (7) 

19 Stood up and scoffed, looking 
somewhat pink (T) 

21 May 2 dance (3-3) 

23 A speculator - quite possibly 
he tries to acquire gold (9) 

25 Father giving a light slap 
with little hesitation (5) 

26 Sum for which a doctor's been 
let in by a relation (6) 

27 Ql-written screed - It makes 
one wary (S) 

28 A great city in ancient times, 
though not quite the greatest 
(6) 

29 A soldier's going around the 
art-gallery causes alarm (8) 

DOWN 

1 Having nothing to write, a 
journalist expanded (6) 

2 Hangers-on mounting a strike 
over places offered (9) 

3 A good man. not flt yet f5) 

4 Like the queen getting allerev 
treated (7) 


6 Contemplates exercise for a 
personal problem (36) 

7 The absentee's excuse (5) 

8 Making an admission about 
feed appeal (8) 

11 A gaol-bird turning up for a 
celebration (4) 

15 Give a new set back - a vari- 
ety of items (9) 

17 Meant to transform the exte- 
rior of some home (9) 

18 Continue with professional 
dissertation (8) 

20 The point will be seen in 
time, as this shows (4) 

21 Sport for twisters? (7) 

22 Free rag - it’s not charged for 

(§) 

24 The day before Is about all 
right to call up (5) 

25 A bit of embroidery can tonrf 
a firm in a hole! (5) 

Solution 8,595 


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aaoBGUijaaaQ qe 
_ a D Q B 
□aisaa anHQBE 

a s n q 
0HOQEJO130 QQQE 
13 Bam 

Dana BaaaaaQE 
a a o q q 
□□naana dbdde 
a □ a sh 
_B aaDao bsbbo 



New Sovereign 










FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


LONDON STOCK EXCHANGE 


MARKET REPORT 


fit* 


Bonds lead the stock market to a strong close 


R-SfiAAIKSharaimlax 


By Terry Byland, 

UK Stock Markets Editor 

The London stock market yesterday 
turned In Its first ctmv lTwtegiy posi- 
tive session this week as good per- 
formances from US and European 
bonds set the scene for the US gross 

domestic product data due from 
Washington this afternoon. The 
FT -SB 100 Share Index comfortably 
regained the 3,000 mark, trading 
volume remained poor and there 
were hints that a leading UK Invest- 
ment bank will cut staff today. 

A strong lead from the stock 
index futures market and from Brit- 
ish government bonds drove the 
stock market to the day's p ea k at 
the close. The final reading showed 
the FT-SE 100 Index at 3,029.6, with 
a net gain of 29.7. 

The rebound was something of a 


surprise. In d ee d , the market was 6 
points off on the Footsie scale in 
early deals as traders shied away 

from any continuation of the weak- 
ness at the close of the previous 
session. The mood turned as Ger- 
man bunds turned hi g her after the 
deputy president of the Bundesbank 
suggested that the German central 
bank might soon return to variable 
rate repos. 

Although warned not to do so, 
markets took this as a bullish si g n, 
and were not put off by the expec- 
ted decision at the Bundesb an k's 
policy meeting to leave key rates 
unchanged, nor by the announce- 
ment that this week's repo would be 
at a fixed rate. 

The stock market climbed 
steadily during the first half of the 
session, with individual companies 
providing a number of features. 


Good results from 1CI had been well 
discounted in the marketplace and 
profit-takers cot into the share mice 

following the boardroom announce - 
ment. 

Bat the impending flotation of 
BSkyB continued to help shares in 
the stakeholders and the flow of 
higher corporate profits from US 
companies continued, with Shell 
Transport and Trading very firm 
following the trading statement 
from -Shan OIL 

The final boost came when the US 
Federal bond market opened higher, 
taking the Dow Jones Industrial 
Average up by 12 points in UK trad- 
ing hours. The gain in the Footsie 
was quickly extended from 16 
points at mid -afternoon to its dos- 
ing gain of nearly 30 points. The 
final hour of trading saw share 
prices rising rapidly as marketmak- 


ers faced an unexpected demand for 
stock and honied round the mar- 
ket, searching topping up their own 
trading books which have been kept 
on very tight reins for the past few 


The FT-SE Mid 250 Index more 
than recovered its Call of the previ- 
ous gffg s wm , /*lftgfng 12.9 higher at 
3,480. L While pleasantly surprised 
by the market's resilience in recap- 
turing the Footsie 3,000 mark so 
convincingly, analysts remained 
cautious ahead of today’s US GDP 
number. US third-quarter growth is 
expected to be around 28 per cent, 
according to UK based strategists; a 
hi gher figure will inevitably revive 
concerns about inflation, the dollar 
and the attitude of the Federal 
Reserve, and revive speculation in 
London regarding flw timing of the 
next base rate hike. 


The wider concern of the UK 
stock market is the lack of equity 
business and yesterday’s volume 
figures emphasised the dearth of 
business. Seaq volume of 507.2m 
shares showed a further fall of 
around 3 per cent. The day’s total of 
bargains booked In shares, at just 
over 21 , 000 , remained barely two 
thirds of the average for the past 
two years. 

Low turnover is taking its toll not 
only of confidence at stockhrokmg 
firms, where commission income is 
at risk, but also in the daily market- 
place. Volatility in share prices has 
reflected unwillingness of market- 
makers to run positions in such a 
thinly-traded market. This has 
increased the influence of the stock 
iTiffay fu t ur es arena, which is often 
accused of driving the underlying 
stock market 



Equity Shares Tratfod 

Tumonrfay wlumpfaiMon}. Ebmfcjdtng; 
mn-maricat buttiaaa and owncaa tumw 
1,000 


Aug Sap 

Source FTOncMs 181 

■ Key Indicators 
buncos and ratios 



FT-SE 100 

FT-SE Md 250 
FT-SE-A350 

FT-S6-A Al-Share 

FT-SE-A Afl-Share yield 

3029.6 

3480.1 

15212 

1508.35 

4.00 

+29.7 

+12.9 

+12.8 

+11.75 

(4-03) 

FT OrcSnary Index 
FT-SE-A Non Fins p/e 
FT-SE 1 00 Ful Dec 

10 yr GBt yield 

Long gBt/eqUty yld redo; 

23103 

1054 

3042.0 

085 

099 

+12L3 

(18.40} 

+4ao 

(9.02) 

PL23) 

Bast performing aectora 

+3.6 

Worst performing sectors 

1 Enataaerlna. Vshictaa 

,-<L8 



+1^5 

2 Hausahald'Qooda 


.„..-0.3 

H Rnnlni .. 


+1.5 


.-03 



+1.4 



„„.-a3 

5 Baa DtettfbUtVon 


-... +13 

5 Chemicals 


-02 


for El 


mo 

fc BI 

Till 

1* 

y ! 

ill' 

i ■ >' 


*:$ 

m 

;iS* 


Hints of 

Hydro 

move 


Rumours swept the market 
late yesterday that Scottish 
Hydro Had caned a meeting of 
analysts for this morning, trig- 
gearing speculation that It may 
announce it will accept the 
terms of the recent regulatory 
review rather than ask for a 
referral to the Monopolies and 
Mergers Commission. 

Hydro shares underper- 


formed the rest of the electric- 
ity stocks as tbn rumours cir- 
culated, rfroring unchanged at 
313p, contrasting with a 7 gate 
to 349p in Scottish Power and 
good gains in the English gen- 
erators. 

Hydro shares have underper- 
formed the market by 10 per 
cent since the Offer review last 
m onth , as some analysts have 
adopted the view that the pack- 
age would damage Hydro's div- 
idend growth prospects. 

ICI lower 

Ghfirmirals giant ICI came up 
with some very solid figures 
yesterday but the market 
wanted something extra and 


EQUITY FUTURES AND OPTIONS TRADING 


Stock index futures pushed 
ahead stiong/y to reverse a 
four-day run of declines but 
activity remained low, writes 
Jeffrey Brown. 


The FT-SE 100 December 
contract was 3,042 at the 
official 4:10 close, up 49 
points. This was a 14-point 
premium to the cash market 


■ FT-SE 100 HOEX FUTURES (UFFE) E25 per fid indflK poM 



Opan 

Sett price 

Change 

High 

Low 

Ett. voi 

Opan InL 

Oaa 

3006.0 

3042.0 

+4&0 

3047.0 

3006.0 

12825 

83821 

Mar 

- 

3062-0 

+48.0 

- 

. 

0 

3820 

Jun 

3065.0 

30655 

+305 

3055J) 

3052X 

60 

0 


■ FT-SE MD 260 B8DEX FUTURES (UFFE} CtC par US Indaat port 

Dec 3465.0 34701) *62 34668 3460.0 

■ FT-SE HD 260 MOEX FUTURES (OMLX) CIO per M Mm point 

Doc - 34700 - - I 

M com Mbm flgum ore tor prauioa dqr. t Baa warn atom. 


FT-SE 100 RtOEX OPTION I 


| f30M) DP par Ml hub* point 


2850 2800 2850 3000 3050 3100 31SO 3200 

CPCPCPCPCPCPCPCP 
NO* 187*2 11 IB 18 115 25% 79% 40% HS% 61% 29% 82% » 130 8 174b 

Dec Ztf% ZB 17S 37 142% 82 111 89 01% 00% if 119% 42 151 9 1881a 

Jan Ml 38 286 51b T70 66 140% 58% t18 107% 58% 134% 61% 183% 47 183% 

Feb 255% 50% 210 03% 183 79 164 » VS 119% M2 146% « 17B%01%2O0% 

Junt 2B5%80% 295%128% 136% 177 118 235 

m it* UB& / ■ 

■ EURO 3TTIE FT-SE m MDEX OPTION (UffFq DO pw Its Me* pabA 


■ EURO STYLE FT-SE WO MDEX OPTION tUffE) DO par MMnde* point 

2B75 2823 2078 3029 3079 3128 ' 3179 3225 

He* 178 12 133 19 95% 31% 88 50*2 40 75* 23 106 12 147 5% 191 
Dec W4% 29 W%40%122% 56 03 76% W% 101 40% 130% 32% 164% 10% 201 
Jan 179 61 H0%9O 75144 44 211% 

Mar 218% 77 161 114% 191163% 84% 223% 

Junt 264 100 1M%136% US 1B1 WI 235 

out BB ft* 4225 * ltod«t)*0 Mr rata Mm toorai ma tow) tm soanet print 
t ire® (Ned •e*y none* 

■ EURO STYLE FT-SE 90D 280 MDEX OPTION (OMLX) DO per Indent point 

3400 3460 3500 3860 3800 3880 3700 3780 

Oct 129% 62V 100% 84% 77% 110% 

pee o ftm 0 C e —iK prfcw and wtonaa aw Wfcan 3 OQpw. 


FT - SE Actuaries Share Indices 


reacted accordingly when It 
didn't get it 

Analysts had expected the 
profits between £120m and 
£145m. The final figure was 
£143m accompanied with a 
meeting generally acknowl- 
edged to be positive. Analysts 
upgraded forecasts but market- 
makers had generally been 
long of stock and the surplus 
saw the shares fall 13% to 
786%p with 4Jkn traded. 

The reaction was much as 
anticipated following strong 
outperforxnance against the 
broad market over the past six 
months. But there were 
divided views afterwards. 
James Capel, which has a top 
of the range forecast of £S30m 


and right In line with current 
fair value. 

The upsurge mostly followed 
the rafly fri German bonds and 
the better tone on Wall Street, 
and traders have begun to 
speculate on an Immediate 
move for the contract above 
3,050. 

The best of the day was 
3,047, reached towards the 
end of business. Some of the 
more optimistic traders were 
beginning to see the recovery 
as an overture to the long 
awaited Christmas rally. 

The disappointing aspect of 
the day was the lack of 
genuine business with 
Institutional activity negligible 
and most of the day's turnover 
generated by locals, 
independent traders. 

There were 11,044 contracts, 
broadly in line with the 
previous day's 10,594. This 
was substantially below last 
week's average of 13,500. 

Traded options fed 
significantly short of the 
previous day with 20,877 lots 
agakist 53,080. FT-SE and 
Euro FT-SE tracing accounted 
for just over 11,000 lots. 

British Airways was the most 
heavily traded individual stock 
option with 1,377 Iota. 


The UK Series 


Dm 1 * Yaw ttv. Eton. PTE Xd M*. Total 

Oct 27 chgett Oct 26 Oct 26 Oct 2* ago yMd% yield* radio ytd Return 


FT-SE 100 3029 

FT-SE MU 250 3480 

FT-SE MU 250 a* bar That* 3479 

FT-SC-A 380 1521 

FT-SE SmaBCap 1774.1 

FT-SE BmaE C ap a* few Trust* 1T40A 

FT-SR-A ALL-SHARE 150BJ 

■ FT-SE Actuaries All-Share 


+1.0 2989.9 30009 3029.1 3103J0 4.19 7.17 

404 3487.2 3474.8 35002 35304 3.60 5J8 

+04 34001 3474V 34906 36323 3.78 034 

+03 16004 16006 18200 15702 435 087 

1774.18 177097 178020 130330 034 5.01 

174TA4 1748.79 176834 178740 334 537 

+08 148080 1497,74 1S107B15B232 430 074 


Daqr'a Year «v. Eton 

Oct 27 eftgett Oct 28 Oct 25 Oct 24 ago yWX yield* 


10 MMEHAL EXTHACTlONflB) 

12 ExtaocOua hduabtaatO 
15 08. WBOmtadP) 

18 08 Btataadort * Prodfll) 

20 OEM MAMUFACTURERSfllBT) 

21 Buikftig 4 Cora0rucJtan<33» 

22 BuHng Motto & Mareh*32) 

23 Chemtcate&3] 

24 Dhmntted tnduotrtatoflB) 

28 Bectntoto & Bam Equlp(34) 

28 Biglnaarlngpl) 

27 Enomaarins. VWiMaa(12) 

28 mmke. papar & Pckgpe) 

2B TaxMaa a AoparalOT 

so consiimbi aoooam 

31 Braw a ri — fT7) 

32 Spfefta, Mnea & CfctereflO) 

33 Food Manufactumra(23) 

34 Household Qooda(13» 

38 Haaflti Cara(21) 

37 Pl»miaceiitfcataC12) 

38 Tobaccoffl 

40 ssnncGspiBi 

41 DMtftutorapq 

42 Labura i HotalsW 

43 Medtapfe 

44 Ratottra, Rnad(l« 

46 Rotators, Qan«a((4$ 

48 Support Sarvtoaapi) 

48 -Rtowporttia 

61 Other Sanfcea 6 BUahauP) . 

80 UTUiTIESm 
82 EtoctrUtyflT) 

94 Gas DtetrttuUonR) 

88 TatocaranunteaBonaW 


70 FWANCtALB(104) 

71 BankatlQ 

73 kWV»a(17} 

74 LHa Aawanoaff 

78 Mamhant BanKa(Q 

77 ottw RnwwUCH) 

78 PrpBtoM41} 


89 FT-SB-A A L L 91 IAMB8B1 


+1.1 2882.10 2B4B34 288087 2*4230 
+13 380332 3B33.10 388008 317030 
+1.1 282538280044281001 2417.10 
+03 187033 1B6034 1B7&1B 107030 
+04 183137 183431 184081 192020 
-0.1 104088 1041.18 106138 118030 
+07 1784.78 178073 1812J58 1B7&B0 
-02 2204.14 228842 231738 223530 
+13 172041 172010 173093 200080 
-03182631 1840181 95074 213000 

177238 177010179032 1BB930 

-08 223241 2231.07 220028 184030 
+07 275831 274338 275027 246330 
+03 164731 168832 157050 196330 
+1.1 2668.17 267634 269937 264040 
+06 221003 221242 221037 207440 
+13 27*7-06 PM- K 

+04 i mo w 1 741.10 

+03 197034 187076 189339 189730 
+13 246737 246008 2480^204030 
+08 202731 203937 2083.17 102730 
+08 278938 278236 277932 2600.10 
+03 106730 167238 169837 166030 
-03 1833.18 183071 164736 1703.10 
-O4im w ig07rum 3 2igoa o 

+13 234631 236013 287238 251730 
+13 244067 2474.D 248073 221&10 
+13 186020 184338 1B7B49 224230 
+14 197048 197739 199933 2318.60 
*13 164233 184013 1869.19 180*30 
+08 1617.16 1619.71 163239 1672.1I_ 
+13 211007 210848213830 293730 
+13 278438 278031 278338 288130 
+06 121231 120018 122746 1484.10 
+1.1 263730 223836 2913.77 2902.70 

+01264732 269031271138328080 

+1 J 17923* 178M1 16IM.11 179330 


+06 148630 1437.74 1810.79 188232 


342 009 

333 832 

336 637 

231 t 

4.15 633 

330 533 

4.16 040 

435 431 

023 027 

4.13 092 

022 on 

432 149 

aio 038 
434 087 

446 743 

434 7.70 

431 096 

431 7.74 

084 733 

3.13 336 

436 734 

099 949 

339 649 

8.78 734 

340 430 

230 841 

336 932 

334 838 

236 084 

080 072 

439 Q1 6 

443 731 

3.72 1000 

034 * 

4.13 737 

021 1237 

3JM 646 

433 9.17 

430 1016 

086 936 

041 739 

332 1246 
4J>1 080 

433 430 


1847 11039 114830 
2068 10090 128943 
1018 11337 129040 
1737 53-77 118033 
2018 4038 138014 
2236 5071 138236 
1737 S2JS0 119040 

P/E Xd W*. Total 
ratio ytd Ratum 

2436 8233 1083.78 
2338 8062 106018 
2137 8088 109138 
* 3003 108832 


108610733 932.78 
1078 61.10 99074 
104710133 98832 
1636 8439 9*931 
1068 B93B 881.71 
42.00 4834 83739 
1099 13028 04846 
1132 21737 62068 
1080 61.78 92078 
1010 8028 B7D31 
2434 6739 100730 
2138 0942 06831 
1239 6230 1007.70 
1077 44.06 87239 
1008 3832 90139 
2026 8938 88079 
4731 2082 108032 

1088 8137 91733 
1138 8046 102436 
* 11738 88730 
1647 8032 85236 
830 8938 03237 
108* 8832 118011 
1238 BOBS 88036 
113011039 84342 
1138 8131 84232 
1848 12732 91430 
638 87.78 79838 
1331 8131 97438 
27 37 4338 8243* 
8039 84.18 808.11 
1737 8230 119040 


■ Hourly movw ionf^ 1MB 11JM imp iqpo i*jo imp 1010 n+Hvumm 

..... MU. 30007 30007 30123 30103 30163 80202 80208 MM 

S?7 MB7J 34883 84804 34702 34793 347443 34712 84783 84801 3481.7 

SSJfaT !Sm S5t wS iffl 18101 18107 18100 16104 18203 18H3 16083 

Urn* d FM1 100 Nil* 4 JHBB D*Ta to* 83Mm ■ FMi 1* H8< Mflhi SBBUK WI 13* 1 >8786 84/ft 

■ FT-SE Actuaries MO mdutur b«ahrt> 

onto, 930 1030 1130 IMP tO M 

ITT T:' - arr» OTOO 9701 8708 WOB *«3 8702 8708 I7M *02 

9dg 6 Onatron 8702 8708 9773 pSj, a0 mm 29103 28202 2903 29073 4813 

fr y™ 0 *** “*£5 Si 5£l SS iSS IlSS 1*803 18807 1881.7 18643 THU 4«.T 

tato JgJS SI Sol JB 28243 282T.7 2«03 2MOB 88400 2*403 97904 4409 

MdUond W m ma iiu i a ijhi IT 3 I W wMJBwaWfctortl 
uau. OM teahwtoh IMHi iMMM.Nn MO. MF74I 


<h mm S*iefc43rt5jar_®toie^iitoiaba^» «toiihlygo^Wi#^nenUj^T9Tato 



aaMutom 

SudnUa. 


for the foil year, reiterated its 
view that “the market is 
already discounting very 
strong profit growth". 

Airways active 

British Airways was the 
most actively traded Footsie 
constituent, turning over 13m 
shares and falling steeply in 
the wake of a placing of a large 
line of stock and persistent 
bearish comment on the out- 
look for 25 per cent-owned 
USAir. 

BA shares tumbled 11% to 
352%p for a two-day decline of 
some 5 per cent. The interim 
statement is due on November 
8 and worries about a possible 


TRADING VOLUME 


■ Major Stocks Yestenftqr 

VOL Ooatog 
ooob prica eftanoa 


J&Manjpt 
Abbay Naaonrif 
Abort Fitter 
AMad Donwcqt 


Amoc. M.Food*t 
Aaaoa Brit Rbmb 

SArlidB.t 

SSo 

BOCf 

Elam. 

S£f _ 

Bar+cal Scodsndt 

BuaCkdst 

BtoMto 

Bbetof 

BQMtort 

BHL Aomapacat 

8AtohAfewa«at 

O lB il i Oast 

BWdi Land 

Ekttiah Staolf 

Dural 

Bknnah Caamaf 
Burton 

Cauaft Whaf 

CoHMyS chwppaaf 

C*rtonCc«™™.t 
CotoaMyaM^ 
Conan. Urtont 
Cookaon 

comaitot 


00 La Boat 
Obm 

EaatamBaett 

Q a aMU to A lB aaL 

Baarucnaa 

1 impm iat 
Bntumd UMB 
fW 


Owl Accktorat 

QanaUBaoLT 

©asst 

Oymrnd 

Oanratot 

Grand Mat| 


Dtoawt 
HSBC (rap dart 


JWnaonMaOhay 

sas; 

land BaoaMaaf 

Lapona 

LapalAQwartof 


London BaA 
Lonbo 


Bar 4 

Montosn fMnJ 

NR! 

fWWMBMkt 
Ntotand P owart 


PlOt 

ruibm, 

IV wQwit 

PnMaatotf 


363 31B +£>3 

aaoo n% 

ISOO Aiz'j <0% 

3*0 44 

587 +13 

635 +11 

32S +1 

2^0 290 4S 

Z300 203 *7 

118 330 +12 

4M 272 +1 

1.100 60S +11 

4J00 «32 +15 

A30D IIS -2 

341 +0 

881 +2 

7200 415** M 

456 SO* nh 

3.100 3 ^ 44 % 

1.100 186§ +1 

2,100 SIS 40 

1,600 547 4« 

1900 278 +8 

15 405 

622 

448 43 

2300 473 +8 

1 S 5S 

m w -i 

IOjOOO 156% 

n iK 4 

178 B40 *2 

4800 87 -% 

2*» 300 47 

1300 431 46 

130) 288 - 44 

«5 850 43 

E500 104 +3 

1400 533 40 

05 233 +1 

1300 450 43 

843 432 42 

375 074 -3 

1.300 185 t% 

868 787 +14% 

5B4 084 48 

ISS 460 -2 

1,700 384 422 

1JX» 380 46 

500 228 +10 

M 188 -1 

2*00 118 

B37 131 4% 

878 228 +2 

M B62 +8 

81800 270% -9% 

3,1 DO EOT 40 

IK 320 -4 

383 512 +4 

1*00 400 46 

1,500 540 -7 

431 186 43 

2100 aoi -a 

1400 468 +3 

1«0 711 +11% 

62 330 -1 

MOO 224% 42% 

743 182 43 

1,000 275 42 

eso iso +i 

1,000 280 to 

4*00 735% -12% 

1JDO 434 +16 

62 554 

418 477 44 

0 648 +1 

1JB0 148 

B7S 800 -4% 

04 BOB 43 

1,400 43B 43 

074 3*4 48 

T,R» 682 43 

ASM MB ♦% 

0*4 883 43 

2» 183% 42 

421 102 

UWJ 425 -2 

387 187 -1 

2JB 703 43 

4300 417 -3 

251 783 +15 

1JWJ 134 +1 

MOO 178 -8 

*.*00 438 44 


BOO 532 410 

811 301 43 

354 201 +1 

103 750 +1 

382 815 +M 

1,300 813 +11 



1,200 543 

MOO 312 


1SDO 408% 43% 

S03 571 -S 

EH 481 412 

1*0 747 +3 

333 225 -3% 

447 -3 

1.700 171 

UU) 425 42 

1,000 232 42 

1.700 3U 47 

40 1512 -12 

015 *1 

313 

5*8 +7 

100 +1 

146 -a 


414 43 


taMnBaett 
DauHi KMaa Baca, 
(South WwK W#ar 
SouBi waaL BaoL 

SsSSSSKkt 

8BMDUM . 

KT 

Sa*... 

Ttfurmomm 

Taaoot . 


888 143 43 

770 787 41 

788 48 


781 207 -3 

470 an HI 

MOO 117% 4* 

4,100 IB -4^ 

_ *87 138 



Moo m 

1AOO 818 


S l 

1111 18 

BOO M 

BOO 48 

s $ 

a « 

« 4 

884 *8 

a s 

H *• 

718 *1 


je x 


write-off of part of the group's 
£275m investment in loss-rid- 
den USAir are likely to con- 
tinue to the run up to the 
results announcement. 

The big problem for BA yes- 
terday thoug h was block trades 
of 4.4m and 2.7m shares at 
346Kp and 349p respectively 
winch crossed the screens in 
mid-afternoon. Talk In the 
market was that S.G. Warburg 
imH handled the deals and 
been left holding a large line of 
stock. 

Position-taking in BA was 
also reflected in substantial 
traded option business. 

Irish debut 

The transformation of Irish 
Permanent from Ireland’s big- 
gest building society to a bank 
was completed yesterday, with 
shares in tte group making a 
sparkling debut simulta- 
neously in DnbEn ami T^mrinn 

In a move almost a mirror 
image of that carried out some 
years ago by Abbey National. 
Irish Permanent shares were 
given to borrowers and lenders 
and priced at 180p in the 
Republic of Ireland, the equiva- 
lent of L80p sterling. 

The flotation was organised 
jointly by Riada, the Irish 
Stockbroker, and Hoare GovetL 

After opening at 208p the 
shares raced ahead to touch a 
high of 217p before closing at 
215p. Turnover reached 6.1m 
shares with dealers reporting 
aggressive demand for the 
shares from Ireland and the 
UK 

Excellent third-quarter fig- 
ures from Shell 00, the Royal 


NEW HIGHS AND 
LOWS FOB 1994 

NEW MOHS [tel 

01331 (u DULUM 3 CN0IRN p) tonreo. 
VWBpkto. DM . TW B UTOB1 pj MwB Hr*—, 
a emu it » n rrrmr p| ikpnm rminr 
taua. HEALTH CAHE (1) Basn HaakKm. 
HOUSEHOLD OOOOS (I) ONxmie & LJdto. 
MVESTtotofT TRUSTS <1} IBS Opemanlna. 
ZtoD DM. 00. EXPLORATION 3 mOO 01 
M— i nuiw Canada. OTHBI 
RHANCIAL 0) Edtobwgh Fuid Mwogn. 
Jupte iy«WL otHSR sows a bums m 
~n(Ai raw mm* . rrmri rnnm ■ rwnm 
(1) Jmto talar, BUPRORT SEMIS (I) Sana. 
transport o] onr. 

Mew lows (114). 

0CJ8 w BANKS w MHwtMW. BulWomo. 
BULOWO A CNSTTIM M AUEC, BtoatocIL 
Rtow. BUM MATLS 3 MCHTS (9 Caradon 
TUp PH, FtodttlA Rqnw. CHBNCALS 0) 
EngaPtod. KtlOft. UBlWBUr OHB B QtfVto. 
CMdto Oereto Motor Auutoo*. EWFact 
Mima Hmaan VWwtarai* ratiga, VUng «. 

lam nnian uni n irirm. 

Carol Stoat Knamw A8 B, EUCTMCITY (I) 

scoit iMbOb U0nMD« escr bmjf h 

CMt*. QBC. Jodnaon Bac+to, Pnnn Syitama. 

UIU08 1 liaai P) Bwa, VB0CLSS Q1 B8Q 
tan. RX» MANUF 0) Bwaons CriMM, 
HEALTH CARE (Q AAK 9k»m HOUSEHOLD 
00003 0) Rna Daocr. IMURANCS n 
wwBsimr trusts (i2| mwmneiT 
COHPAMB 88 LEBUK 3 HOTV R 
AHnnBHpfl. LkBotIol 8hcWr|WnH UFB 
AHUMMCE (1) Uneoin TtoCL Cop- MEMA » 
BMAP. fesmuapa TWi, MUhnd ktoL Nmh, 
PortMTOUti & SmdHtond. Stoepy Kkto. 

mcHAirr bams co whml oimbr 

FWAMCULpi Ekcol kibun JuatHa, Unton. 
OTHBI0C9WS A BUSHS 0) Caps Rsnoa. 
PHARMACEUTICALS 0) CMmdraa. PRTTRI, 
PAPER 3 RACHB CD) Bamae, Britten. Lauson 
Ltoatoa Plysu. Wac« »e PrL. P RO P ER TY 0) 
Chmtorttn HT. Donurt UAy, London & 
MatrapaBBn. SinOf. SkMOh Earn. 8Mp Prt. 
RETAILERS, POOD 0) Starts. RETALBtS, 
OBBUL n BNdto Lalnra COirtry Oaarak. 
Italy. MMMt SUPPORT sanm M ACT, 
Mdtonnc* Hcu Non, litaoc. TEXTILES 3 
APPAHH- H Atontoa WOtanr. Coats 
VV*2*. HatottnL UMto. SMolL TRAHSPaKT 
ID M«ni Nekton. AmcAM m- 


Dutch/Shell subsidiary, trig- 
gered a bout of strong support 
for Shell Transport stock from 
both sides of the Atlantic. At 
the close Shell were 11% higher 
at 711 %p after turnover of 19m 


shares. Analysts moved to 
upgrade forecasts for Shell 
Transport after the Shell Oil 
numbers, its best third-quarter 
results since 1985. 

"We’re upgrading our recom- 
mendation on Shell from hold 
to buy," said Mr John Toalster 
at Strauss Turnbull. “There is 
a feeling of confidence about 
Shell; they're tackling the 
problem areas, such as chemi- 
cals, and the recovery in the 
group is gathering momen- 
tum,” the Strauss analyst said. 

BP was rather left behind by 
Shell, the shares edging up 
only 2% to 415p on 7.2m traded. 

Airports group BAA rose U 
to 5Q3p following a reassuring 
note from NatWest Securities 
which attempts to put the 
Heathrow subsidence problems 
into perspective. 

Heathrow accounted for 59 
per cent of passengers handled 
by BAA last year and 68 per 
cent of operating profits. Nat- 
West says the disruption is 
squeezing spending levels but 
sees higher spending at other 
BAA airports as a cushion as 
traffic switches. 

Second quarter results are 
due November 7. 

Media conglomerate Pearson 
was a strong performer on the 
back of broker presentations 
regarding the impending flota- 
tion of satellite broadcaster 
BSkyB, in which Pearson has a 
significant stake. The shares 
jumped is to 6I3p. 

Renters Holdings slipped 3 
to 447p ahead of third-quarter 
revenue figures due today. 

Inte rnatio nal advertising 
group WPP jumped 4 to 109p 
on heavier turnover than nor- 


mal of 7.Bm shares with 
S.G. Warburg recommending 
the stock. 

Medeva jumped IS and 
closed 9 better at 174p after 
announcing it had won the 
right to continue development 
of its hepatitis B vaccine fol- 
lowing a judgment by the 
Court of Appeal that Biogen’s 
patent is invalid in the UK. 

Drinks group Allied Dotnecq 
advanced 13 to 587p following 
the announcement of talks 
aimed at selling its Dutch 
brewing operations helped 
refocus attention on the poten- 
tially much bigger disposal of 
Allied's food manufacturing 
business. 

Best known for its Tetley 
tea-bags, the food division 
accounted for more than a 
tenth of group trading profits 
last year. 

A number of potential buy- 
ers ate being pencilled in by 
the stock market, notably the 
Dalgety and Irish group Kerry 
which is said to be keen to 
acquire DC A, Allied's US sup- 
plier of bakery mixes and 
equipment 

Elsewhere in the drinks sec- 
tor, Bass continued to gain 
ground, adding 6 to 547p for a 
three day gain of almost 4 per 
cent. In contrast, Greenalls 
shed 4 to 405p. High street 
fashion chain Next rase 5 to 
24lp as Morgan Stanley rater- 
ated its strong buy stance. 

MARKET REPORTERS: 

Steve Thompson, 

Peter John, 

Jeffrey Brown. 

■ Othar statistic*. Page 27 


LONDON EQUITIES 


LiFFE EQUITY OPTIONS 


— Cab Pta — 

QpCon Jw Apr Jd Jan Apr M 

«UDMBq HD 48 8BH 8*Vi 8 18 25M 

(*SB7 ) 800 19 SOU MU 33 36 &1 

*1B* 240 2BH 32V4 38 7 TO 18 

nSO) 2S0t3tt21H a 18 21 28 

ASDA BO 8 7H 0 4 4H BVi 

P81 ) 70 1H SH SH 10M 11M 12H 

M Aimes 330 3SU 43 49H mi4M21H 
(-353 ) M It 9 B H 9 S 

feflMBA 390 27 * 4ZH IS 23 2fl 

pen > 4aimBn a bsm s 

Boob 500 34W 47Ji B4H T2 18 Z7M 

(■521 ) 850 H2SK30H 42 48 M 


0*9 PUB 

■a* FW> Nff Hw R* UW 


V 

P415) 

MHM 

n») 


390 3m 43 40 9 14 18 
420 17 asm D 27H 32 
140 a a a a sh ra 

180 M IB 77 1IM 1M Id 

boo BMomamimiSH zm 

550 21 Vi am IBH M38M4SM 

no am am am m 131 M 

390 X «BZH 18HMS2H 
420 34M 44 SO IS 17 a 
480 14 2(M 30 34H38K 47 
483 84 Bm - 8M ISM - 
543 & 31 - 27 42 - 

750 62 74 83 14H 3Z99H 
BOO BMM 37 M 65 
400 >8 81 ■ 14 13 30 
BOO IBM am 38M 33M 4M 61 


Land Bmr HO a mimbmbk w 
PS 88 ) BOO 28H tt am 27 38 
Hats as 380 3I4IK 83 SH 11M 13 
p<17) 420t7H27H a 17 a a 

IMHM 400 48BZHI9H 11 Z9H 25H 

P486 1 soo am a a 45 4bm 

BaMny 390 B 38 41 17H 2M 81 

S ) 420 0 am Wi 3BH 41H 48H 

Dam. 700 34H 44 S2H 10H SOM 36H 
[*710 ) 780 1111 a aH 47 BOH H 

BMDSH 200 a an an sh sh th 

p210) 220 12 10HSH 11 18H 13 

TnMBV 00 B10H 13 5 BH BH 

a | 90 4 I ■ 11H 13 14H 

IV 1100 BZH 71 H a 2Bi43H 54 
Pill* 1180 27H 4BH » 54H 70H 81 H 
ZtoMCt 300 am m BH 13H 28H 33H 
(*844 ] BOO 37 B1H BOH 33H B2H B7H 

opoai m mm ** T 00 * 

8nad Mat 390 18H 39 3BH 7 20H23H 

E I 4a bh 14 a a »40H 
to 140 IfH T8 22H 2H BH 10M 

P140) in 3 9H IS IS 17 B 

uu Bub 300 nmm ih 14 bsh 

P900 ) 330 Bt 10H 14 32H 3* 44 

opttoo Paa War Jaa Pm Ms Jan 

Hu 110 « 1I9DH BH B1IM 
pi 16 ) IB 711H13H11H 14 1BH 

opuon m m m hn we m 

Br« Aaro 400 a ■ 33 1EH M S3H 
P47Z > B0013H « 41 41 B1 01 

mtm « nm a in ntn 

(*43Z } 480 I 13 83 3S3BHB1H 

ITU 300 11 BH H BH1M1M 

1*308 ) 330 tH IH14H27H 31 31 

HTton 3B0 a tt II I a 13 
pan ) 300 7H14HBM 13 M27H 

Dm Ml <30 UH 31H V 813HOH- 
P430 ) 400 I11H II » 36 4B 

MnBN 780 B BH 71 38 48 B1H 
PTE) HO I 31H 43H SBH 74H 77H 

Q*nM oo am umih u 11 

NE) «0 l» 34 ■ HIM H 

an ho hum n a imiih 
POT) ED 4H fflllHIM 19 8 


220 1*Vi 18 18 4M 10H 14H 
240 2 8 0 17H 22H a 

134 IB ~ - 2-- 

154 4H - - BH - - 

180 . 10 22K » ZH 7 10 
200 S 11H n 12 1BH 20H 
600 2BH45H 87 11 21 SBH 
BSD 7 23 33H 43 48H 88 
180 17 2DH BH 2 8 0 

200 4H 8 13H 11 1BH 1BH 

n 17 am « m ith 

330 3H 13 16 21H 20 34H 
850 BH 82 B2H16K31H 49 
000 BH a » 50 80H77H 
400 IB 3J 41 » 22 3BH 
BOO 3H II 24 4ZM 47 S3 
280 13 toSM B1BH23M 
300 I 14 21 23 28H 35 
220 1M 83H am 3 BH 12H 
240 4H 1ZH 181ZH 17 22H 
200 IH 1BH 21 BH13K18H 
217 3 BH -1BH23H - 

3Z5 22H - - 3 - - 

354 5 - - 15 - - 

Jm %r to An Hr JJ 

BOO 21H a 41 13 23 27H 
526 tt 21H -S3H37H - 
BOO S 45H 03 17 23 a 
550 11 a a 47H 51 H 81H 
Paotoar Jm Due Mr Jib 

380 38H44H 0 B 15H 21 
420 WMH31H17H30H 38 
25 4H 8 BH IH 2H 3 
SO 2 3 4 BH B 6 

S60 41H BBB3H 11 23H30H 
BOO UH 28H N 35 80 B7K 
280 MH 22 37 13 17 S 
300 8U 1IH UH a 28H 87H 
280 WH 0 0 7H 13 TO 

an I14HUH1BH asm 

180 SH 27 U 4H SH 13 
200 1DH18H31H 13 10 9 


C341 ) 

open 

BAA 

«021 

ItobNWr 

psiaj 

Optton 


SO. 

P57S ) 

BkM CMt 

P278) 


RISES AND FALLS YESTERDAY 


Brtttah Funrta i — 

Ot/vr Rxnd Wtowt — 
Mkwral Barotaion — _ 
GananB Manufactwara . 

Conaumer Qooda 

StoVlCM 

UtOttea 

FlnancWa 

Inveatinsnt Trusts 

Oman 


Rteaa 

FaBa 

Btona 

62 

1 

6 

2 

0 

12 

46 

61 

BB 

112 

138 

360 

31 

31 

12S 

71 

83 

341 

29 

4 

12 

76 

88 

201 

102 

46 

317 

40 

37 

38 

574 487 1529 


Para band or rhoaa rrmpant— I 


I on 0w Lemon Shn asrvto*. 


TRADmONAL OPTIONS 

Cato: Mr Lon, Aapr+y. Astva Pat. BTR Wt* *07, Do. 08\ BNMnch. Bdtof*. 
Craaaroada 08, U lanov. KantoM Wta, Hbomta. MR Data, Marina A Mara, 748*4, 
NHL PL. Owes Raa^ PAP, TMhw. W* Craaaroada OO, Htoamta, MR Data, 
A lait ia 6 Mac, N8M, Oiom Has, MnprlH Fib A Cato, Min Raft, IAL Enragr 

LONDON RECENT ISSUES: EQUmES 

baua Ami MkL Ooaa 


price prid 

cap 

(Cmj 

IBM 

price 

+/- 

Nat 

ON. Gra 
cov. aid 

WE 

not 

_ 

FJP. 

0.75 

8% 

4 APTA Write. 

8% 

+% 





- 

FP. 

668 

73 

63 Artesian Eate. 

68 


- 

- 

- 

- 

100 

FJ>. 

178LO 

89 

OS BZW CumoMaa 

m 


- 

- 

- 

- 

— 

FP. 

18-U 

47 

42 Da Wrta 

46 


- 

- 

- 

- 

- 

FP. 

130 

1% 

1 Conti Food* Wrto 

1% 


- 

- 

- 

- 

63 

FP. 

122 

68 

86 Enramtx 

87 


RNQ.71 

5J 

12 

M 

- 

FP. 

50.4 

124 

106 Fffltwto Clak 

120 


RMQ.76 

2Z 

02 

404 

115 

FP. 

89.1 

12B 

115 Gamas Workshop 

126 


RN4JB 

22 

4 2 

IIP 

ra 

FP. 

224 

35 

27 Group Dv Cap Wla 

27 


- 

- 

- 

- 

- 

FP. 

gan 

02 

66 Hambras 8m Mm 

U 


- 

- 

- 

- 

- 

FP. 

2.70 

30 

27 DoWterarai 

27 


•> 

- 

- 

- 

130 

FP. 

163.7 

21B 

206 Hah Farmanart 

216 


unsj> 

« 

as 

12 

180 

FP. 

17P 

109 

179 MmM* M 

188 

+1 

RNfflC 

22 

4 JO 

72 

130 

FP. 

*ia7 

ID 

180 Man ED & F 

ID 


RMSJJ 

in 

6.7 

OB 

- 

FP. 

3353 

488 

476 PraDBo !na 

479 

-1 

- 

- 

- 

- 

138 

FP. 

68.7 

140 

136 8anbalr 

146 


RN3J 

12 

S3 

23.7 

- 

FP. 

mn 

378 

356 TteiaMon E New 

178 Daltt. 2004 

359 


ra 

m 

- 

- 

- 

FP. 

110 

212 

178 

fl 

- 

- 

- 

- 

- 

FP. 

8.14 

61 

67 MMduitii 

81 


RN1J28 

3.0 

22 

12J 

- 

FP. 

S&2 

300 

338 WrmhtoO Wtosr 

338 


a- 

- 

- 

- 

- 

FP. 

4.74 

330 

320 Da NV 

320 


- 

- 

- 

- 


P473) 

Boat tow 
PS40J 


ISO 12M 17H mi 
in 4 w n 
130 11H 1I1BH 
140 BH1DH1IH 
480 31 4IB4H 
BOO 12 94 33 
330 30HMH4BH 

aoo UH n s 

100 11 U 1>H 
110 3 0 11H 

230 13 a n 

aw BH tH 19 
120 UH UH tt 
130 BH 11 14H 
on 84«m n 
iooo ■ «i n 

2D0 33H37Hmi 
220 11 1IH tt 

mimmm 
220 • 11H II 
8Q0 4IHKH77H 
IS0 31H 41 n 
Jaa Apr JM 


5 i Wt 
17 10H2SH 
BH 11 12 
11H 1BH 17H 

12 10H tt 
33H40H 50 

B17H 22 
24H33H » 

2 4 BH 

a a it 
n m it 

10H 21 27H 
BH 0H13M 
1ZH1M II 
1SH31H 40 
tt B0B3H 

3 I 11 

11 II 21 

8H 18HUM 
17 2ZH 28 

13 31 ASH 
4BH B7BBH 
JM Apr M 


RIQHTS OFFERS 

iaaua Amount Latest 


Ctottia +or- 


paid 

Ranun. 

1964 


prtM 


up 

date 

HOh 

Low 

atook 

P 


m 

2/12 

2pm 

%pm 

APTAHaaBi 

%pm 

♦% 

M 

28/11 

20pm 

9pm 

Cattaa 

9pm 


M 

Nl 

28/11 

9/12 

%pm 

15%pm 

%pm 

8pm 

Dragan 08 

%pm 

7pm 


NO 

Ml 

29/11 

1B/I1 

5E1 

ttpm 

%pm 

6miaff (J) 

{Union Squsa 

28pin 

i*pm 

-3 


FINANCfAL TIMES EQUITY INDICES 

Oct 27 Oct 26 Oct 26 0024 Oct 21 Yr i 


Hflh lew 


Onteiary ttwni 

281 OJ 

22X2 2301 ,B 

23202 

2333.7 

2303.5 

*7114 

22404 

Old. dhr. yWd 

4.46 

4A7 4AT 

4A1 

441 

348 

441 

343 

Earn. ytd. H M 

8^4 

6X7 6J7 

B21 

6X9 

440 

•PI 

842 

WEmOo net 

18,16 

16.06 1&06 

IBM 

1(L30 

2&00 

046 

1644 

P/E ratio nil 

17.70 

17JT1 17J2 

17.79 

1744 

2642 

• 090 

1749 

tow IBP*, ommy BMra I* aim aranpastanr Hgh Z718J BflMMi law 4M 80OM0 
FT Onfin*>y Mara Mm baa* data 1/TAB. 



MET* 8a 

P710) 


OaMar IT Ibd o«W 


880 >1 TtilH 14I6H tt 
800 31 44HIM 38 BO MH 

700 II N77H30M 84 B3H 

780 ttH43V| H6BHDMBU 
CD CIOH 0 II 17 EH 

«1TH HIM H tt 41 

Ml m m Hw Ml Mto 

IN IIIMtSH a 0 10 
IN 3H1BHHH13H II E 
laiautvpiMbFMiiflimi moan bn 

Mfl WraT PflOMa 

Tbw oonMta rm mb mm 


Ordtowy flhant heiMy B U ng n 

Qpan HOD 10BQ 11J0 13J0 IBjOO 14J0 HJO 1«A» Htfi Uw 
220BJ 2303JI 2297J 2200X 2297J 23002 2303.1 2303^4 230H6 2311JJ 2282J 
Ool27 Ootffl ON 25 ODI24 Oot21 Yraoo 


BEMlMWlni 21,112 21 JOB 24^73 22*64 22*20 3&490 

Equity unavar (Gnflt 9O0J2 1211JJ 947J 042J 18406 

ImMf bvgalmr • 24JS7 27.112 MJ7» 24J34 85,721 

Sham meted (rnflf 434,7 487,1 4700 437.0 71M 

Iteidudeg w nH ra to l I m Wii ate mm Mnsuar. 


APPOIMTWIE N IS ADVHRTI S \ M (-» 


FT GOLD MINES INDEX 


HHHbHrN 


M Htt| fat M Jm few m iwt 
m mm n u nt W% m um 

mm >47 BET? HEJ7 INflJfl Ufl 3M7401NUI 




{ID 934473 -01 9834J0 9T7.79 287IM 171 I711J7SM4I 

Ntom mm *u btmi oum ns.i? i m min im.ir 

Ml til] 174047 -1.1 17RE 171041 17BOB3 077 WON 148011 

wen looauo mm 

toar agn amo t mk 



(..tiHh vlonf, on i -M / i ii/'l 
Andrew ! .It;n .'V'n'.ki on . .J.1 ,' \ J t /' { i 


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22 


FINANCIAL TIMES FRIDAY OCTOBER 2S 1 W4 










































































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[• / 


Please call 


Jeremy Nelson on 

— ■ 

071 873 3447 


for information and a brochure 


or fax him on 071 873 3078 



























































22 


FINANCIAL TIMES FRIDAY OCTOBER 28 1994 


CURRENCIES AND MONEY 


MARKETS REPORT 


Markets watch krona after Riksbank raises rates 


WORLD INTEREST RATES 


MONEY RATES 

Octobortf Qw On* TCns Six 


The Swedish krona was again 
in the spotlight yesterday after 
the central bank's decision to 
lift interest rates by 20 basts 
points, writes Philip Gaurith. 

The decision to raise the key 
repo rate to 7.4 per cent, which 
had been well Sagged, had a 
mixed reception, and fin* krona 
finished lower on the day. It 
closed in London at SKr-L74l 
against the D-Mark From 
SKr4723. The trading range for 
the day was SKr4.729Q- 
SKT4.7510. 

Elsewhere, there were few 
surprises when the Bundes- 
bank council decided to leave 
its official rates unchanged - 
the discount rate at 414% per 
cent, the Lombard rate at 6 per 
cent - and to fix the repo rate 
at 485 per cent for a further 
two weeks. 

The dollar had a quiet day 
ahead of today's closely 
watched third quarter GDP 
release. It closed in London at 
DM1.4972 and Y96.895, from 
DM1.4953 and Y97.035. The US 
currency is now experiencing 
increasing difficulty breaking 


POUND SPOT FORWARD AGAINST THE POUND 


above the DMLGO level again. 

Sterling rose by more than a 
pfennig to close at DM2.4523 
from DM2.4412. Against the 
dollar it finished at $1.8377 
from $1.6326. The trade 
weighted index finished at 80 A, 
np from 805. 

■ The pjkftmnk last increased 
the repo rate, from 6.92 per 
cent to 7.2 per cent, on August 
LL A combination of surprise, 
and the announcement being 
linked to currency weakness, 
then caused the market to sell 
the krona down to SKiS, from 

SKr4-94. 

The krona has recently been 
firmer, mainly as a result of 
market optimism that the 
Swedes will vote “yes" to join- 
ing the European Union in a 
referendum on November 13. 
Signs that the government 


Od 27 

— latest— 

-Pray. «*»•- 

Espd 

13379 

1838S 

loth 

13373 

1.8378 

3 nrti 

1.6368 

18373 

IF 

1.6262 

18285 


intends to rein in spending 
have also helped the currency. 

Contrary to the August 
move, when the market was 
not sure why rates were being 
increased, Mr Jeremy Hawk- 
ins, chief economist at the 
Bank of America in London, 
said this time “the justification 
for raising rates is certainly 
there.” Capacity utilisation fig- 
ures are on a rising trend, and 
producer prices are growing at 
a 5 per emit year on year rate. 

Mr Hawkins said the rate 
rise was potentially a dou- 
ble-edged sword, because 
higher interest rates mean a 
hi ghe r interest bill for the gov- 
ernment patting further strain 
on the public sector borrowing 
requirement which the market 
is already worried about 

“The Swedish krona is going 
to have to go through a poten- 
tially protracted period of 
undervaluation until the bud- 
get is addressed," said Mr 
Hawkins. 

Mr Peter Luxton, interna- 
tional economist at MMS. said 
the Riksbank's decision, com- 


New Zealand dollar 

Against tha USS (USS per NZS) 
0-B5 


Moi-r 



1990 91 92 93 94 

Some Dutaihaam 

mg soon after its recomposi- 
tion. was "astute". In Sweden, 
the make-up of the central 
bank board reflects the distri- 
bution of political power in the 
country. There had been some 
concern that with a social dem- 
ocrat government replacing a 
more right-wing outgoing gov- 
ernment, monetary policy 
might be more lax. 


Mr Luxton, however, said: 
“This latest move reinforces 
the independence and credibil- 
ity of the Swedish central 
bank." 

■ Part of the "Kiwi” dollar’s 
strength is attributable to the 
firmer Australian dollar which 
has been strong In recent days 
on the bade of interest rates 
being raised earlier this week. 

The currency also has inde- 
pendent strength, however, as 
a result of buoyant commodity 
prices, one of the best growth 
performances in the industria- 
lised world and a centr al bank 
with considerable market cred- 
ibility. 

The Reserve Bank last 
month raised the effective 
exchange rate index celling to 
60, up from 59.2 in March and 
57.5 before that The exchange 
rate is the anchor of monetary 
policy and short-term interest 
rates are set at levels consist- 
ent with these targets. 

Lifting the index is an 
acknowledgement by the cen- 
tral bank of potential price 


pressures, with an appreciation 
in the nominal exchange rate a 
way of countering them. 

Mr Hawkins said the stron- 
ger currency was probably in 
part due to the market antici- 
pating higher rates, in the 
wake of the Australian move. 

■ Overnight money traded 
between 3 and 6 per cent as the 
Bank of England cleared a 
£1.55bn daily shortage in the 
UK money markets. Three 
ynrtpth LIBOR was unchanged 
at 6 per cent 

In the futures market, prices 
finned across the board follow- 
ing bullish inflation comments 
from the chancellor and the 
governor of the Bank of 
E n glan d, The March short ster- 
ling contract closed at 92.66, 
from 9280. 


Belgium 

4ft 

week ago 

4ft 

Franca 

st 

week ago 

5ft 

Omnaqr 

468 

wood ago 

435 

Inland 


weak ago 

<8 

Italy 

8V4 

week ago 

86 

Nettoftfexto 

-LS4 

week ago 

434 

Switzerland 

aft 

wreck ago 

ss 

US 

4fi 

weak aoo 


Japan 

2 * 

weak ago 


■ % UBOR FT London 

Mwlreik Fixing 

- 

week ago 

- 

US OoBar CO* 

- 

weak ago 

- 

soft Linked Dm 


wreak ago 

- 


*96 SIS SS0 SB7 


One 

Lon*. 

a*. 

Repo 

yww 

tetar. 

tm 

rata 

6 Vi 

7.40 

550 

. 

Bi 

7.40 

4.50 

- 

6ft 

5.00 

- 

876 

08 

500 

- 

675 

585 

600 

550 

4.85 

5H 

8.00 

450 

4.85 

7ft 

_ 

- 

Z25 

74 


- 

625 

101* 

_ 

750 

630 

104 

- 

7.50 

620 

5.74 

- 

555 

- 

S87 

- 

535 

- 

4ft 

8.625 

3.50 

- 

4 a 

6625 

3.50 

- 

Oft 

- 

4.00 

- 

61 

- 

4.00 

- 

2ft 

28 

: 

1.75 

1.75 

— 

64 




6ft 

- 


- 

531 

_ 

- 

- 

6.25 

- 

- 

- 

4 

- 

- 

- 

4 

- 

- 

- 


0*27 £ S 

HOOT 172X3 • 173AM 105250 - T0S250 

tea 2857 AO - 2360.00 174800 • 175000 

KiMdt 04852 - 0.4861 0296 3 - 02968 

PofexJ J7SK7 - 3783841 22SBOO • 2MB10 

ftasO 501485 - 5021-20 306000 - 306100 

UAE r.nrm - 00142 36715 - 36735 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


Closing Change BUfoffer Day* a Md dm month Dm months On* y nr Bank of 

mid-point on day spread rtgh low Rate %PA Sata %PA Rata MPA Eng, tedax 

(Sch) 17.2453 +0.0382 38S - 520 17.2633 17.1809 17.2409 03 172281 04 - - 115.4 

(BFt) 503987 +0.1716 828- 146 50.4710 50.1860 503687 0.7 503137 0.7 483587 1.1 1173 

(DKr) 93803 +0347 763 - 842 93853 93289 93755 06 05943 -03 9.6238 -03 1173 

(FM) 7.4428 +0.0381 335 - 516 7.4600 7.4040 - - - - - - 893 

(FFr) 83917 +03368 879 - 9S4 83968 83498 83923 -0.1 83852 03 8318S 03 1107 

(DM) 24519 +0.0108 510-526 24539 24395 24507 03 2447 08 24137 1.6 1285 

(Dr) 377.692 +1307 552 - 831 378.405 376.190 - - - - - - 

(iq 1.0161 +0.0051 144 - 157 13162 1.0119 13148 02 13145 02 13164 -0.1 105.7 

(U 2503.15 +9.06 196 - 435 2505.74 249520 2509.05 -2.8 2520.05 -2.7 25682S -2.8 743 

(LFr) 503987 +01716 828 - 148 50.4710 501860 503687 07 503137 0.7 493587 1.1 1173 

(H) 2.7483 +0.012 471 - 495 2.7495 2.7328 2.7471 05 2.7431 03 2.7076 13 121.1 

(NKr) 106570 +03462 529-611 106647 106072 106565 Ol 10.6598 -0.1 106606 0.0 86.5 

(Es) 250397 +1.106 277 - 517 250334 249335 252.127 -83 255.307 -73 

(Pta) 203380 +0619 791 - 988 204.018 203312 204325 -23 209385 -103 207.4 -1.7 88.1 

(SKr) 11.6214 +03818 116-312 113449 113096 113424 -22 11.6894 -23 113774 -23 78.7 

(SFi) 2.0487 +0.0089 476-498 23499 23339 23456 1.8 2339 13 13968 23 1223 


Eimcrpe 

Austria (Sch) 173453 +03382 385-520 173633 17.1809 

Belgium (BFt) 503987 +0.1716 828- 148 50.4710 501860 

Danmark (DKr) 93803 +0347 783 - 842 93853 93289 

Finland (FM) 7.4428 +00381 335 - 516 7.4600 73040 

France (FFr) 83917 +03368 879 - 9S4 83968 83498 

Germany (DM) 24519 +0.0108 510-528 24539 24395 

Greece (Dr) 377.692 +1307 552 - 831 378.405 376.190 

Ireland (IQ 1.0161 +0.0051 144 - 157 13162 1.0119 

Italy (U 2503.15 +9.06 196 - 43S 2605.74 249520 

Luxembourg (LFr) 503987 +01716 828 - 146 50.4710 501860 

Netherlands (H) 2.7483 +0.012 471 - 495 2.7495 2.7326 

Nonray (NKr) 106570 +03462 529-611 106647 106072 

PwtU9* (Es) 250337 +1.106 277 - 517 250334 249235 

Spain (Pta) 203380 +0619 791 - 988 204.018 203212 

Sweden (SKr) 11.6214 +03818 116-312 113449 113096 

Switzerland (SPr) 2.0487 +0.0089 476 - 498 23499 23339 

UK B - 

Ear - 12851 +03039 844 - 858 12862 12805 

SORT - 0912102 - - - 

Americas 

Argentina (Peso) 1.6371 +0.0048 367 - 374 1.6416 1.6355 

Brad (HI) 12929 -03021 918 - 939 13973 13914 

Canada (CS1 22069 +03096 080-097 22132 22053 

Mexico (New Peso) 5.6131 +00224 097 - 164 5.622S 5.8076 

USA (S) 1 6377 +03051 374 - 379 13416 1.6354 

Padffc/MkfeSa East/ Africa 

Austria (AS) 22034 +0.0042 023-044 22109 22005 

Hong Kang (HKS) 123552 +0.0396 524 • 579 12.6843 126384 

India (Rs) 51.3977 +0.1846 SIS - 137 513220 513070 

Japan (Y) 158.680 +0265 615 - 74$ 158380 158.110 

Malaysia (MS) 4.1785 +0.0134 770-788 4.1868 4.1877 

New Zealand (NZS) 26655 +03035 829-680 26736 26815 

Phfippinu [Peso) 40.7775 +0.1269 894 - 656 403700 403875 

Saxfl Arable (SR) 61433 +03195 419 - 446 6.1575 6.1349 

Singapore (SS) 24074 +03034 062 - OSS 2.4132 24051 

S Africa (Com) (H) 5.7314 +0.0186 293-335 6.7407 5.7190 

S Africa (FlnO (H) 6.5281 +03638 087-434 63442 6.4790 

South Korea (Wbn) 130537 +332 501 - 573 130836 1303.90 

Taiwan (13) 426788 +01223 690 - 886 427765 423276 

Thefland (Bt) 407619 +0095 483 - 755 403530 40.7110 


1285 03 12791 03 


2208 

OS 

22064 

OA 

21997 

0.4 

87J0 

1.637 

06 

1.6364 

02 

1.6255 

0.7 

60.7 

opma 

0.0 

22047 

-02 


-02 

_ 

126481 

06 

126411 

0.4 

126708 

67 

- 

1562S 

23 

157255 

28 

1512 

42 

1892 

28894 

-1* 

26772 

-1* 

26995 

-12 

- 

• 

- 

- 

• 

. 

■ 

- 


South Korea (Wdn) 130537 +332 501 - 573 130836 1303.90 - - - - - 

Taiwan (IS) 426788 +01223 690 - 886 427785 426276 - - - - 

Thefland (Bt) 407619 +0.095 483 - 755 403530 40.7110 - - - - 

1S0B ran lor Oct 26. Bdtotfar spreads In the Pound Spot Bbe show arty Ihe I ra t h ee dacwal placaa. r ere a d raft are net dracMy quoted to Ora 
UmlnpM by ovram iirara raw. Di m In drara taflttad by the Bek el D ead. Bar oureagt MBS ■ tOOBd. Oflir aid litl rare ki both i 

me Defer Spot tatfes derived ban THE WMfflEUTERS CL03NQ SPOT RATES. Sam mum ora rounded by me F.T. 


Oct 27 Ctooing 

nrid-poira 

Europe 

Austria (Sch) 10.5305 

Belgium (BFr) 307750 

Denmark (DKr) 5.8500 

Hniand (FM) 4.5447 

France (FFr) 5.1242 

Germany (D) 1/4972 

Greece (Dr) 230330 

Ireland (IE) 13134 

Italy (L) 152830 

Luxembourg (LFr) 30.7750 

Netherlands (FI) 13782 

Norway (NKr) 65075 

Portugal (Ea) 152900 

Spam (Pta) 124496 

Sweden (SKr) 7.0964 

Swftzartmd (SFr) 12510 

UK (E) 1.6377 

ECU - 12743 

SORT - 1 .49083 

Americas 

Argentina (Paso) 0.9997 

BrazS (PI) 03505 

Canada <CS) 13168 

Mexico (New Peso) 33273 

USA (S) 

Padflc/Mkkfle Eesf/AMca 
Austria (AS) 13455 

Hong Kong (HKS) 7.7276 

India (Rs) 313850 

Japan (V) 963950 

Malaysia (MS) 25515 

New Zealand (NZS) 13276 

Pnftpptnes (Peso) 24.9000 

Saudi Arabia (SR) 3.7513 

Singapore (SS) 1.4700 

S Africa (Com.) (R) 3.4998 

S Africa (Fir.) (R) 33850 

South Korea (Won) 797.100 

Taiwan (TS) 280610 

Thailand (Bt) 243905 

160ft «e far Oct 28 ekttofer sprree 
but aa bnpfed by ewant ntsrast rata 


Change BuUOHtr Day’s mid One month Three montha One year J.P Morgan 
on day spread high tow Rate 56PA Rate ftPA Rata %PA Index 


-0.0095 280 
+0309 700 
+0.0105 485 
+00082 398 
+0.0065 227 
+03019 969 
+038 580 - 
-0.003 126 
+0.77 800 
40309 700 
+03021 777 
+0308 050 
+02 BSO 
-031 460 
+0328 915 
+0.0015 SOS 
+0.0051 374 
- 738 


330 103410 
800 30.7950 : 
515 53S15 

495 45510 

257 5.1295 

975 1.4980 

680 230.700 1 
141 13177 

900 152925 
600 30.7950: 
787 1.6787 

090 63120 

950 152.950 

530 124330 
013 7.1013 

515 12515 

379 13416 

748 12772 


102305 

oo 

102303 

0.0 

10.4S5S 

07 

30.775 

60 

30745 

04 

30675 

03 

52642 

-09 

52815 

-08 

5.897 

-OB 

4248 

-02 

4.5407 

04 

4.5457 

OO 

5.126 

-04 

61242 

OO 

5.1177 

Ol 

1.4873 

-Ol 

1/4954 

05 

1.4849 

08 

23092 

-12 

231.455 

-12 

232605 

-1.4 

1.6133 

OO 

1.6135 

0.0 

1.6004 

02 

153275 

-23 

1S40 

-20 

1580 

-3.4 

30.775 

OO 

30745 

04 

30.675 

03 

1.6783 

-Ol 

1.6764 

0.4 

1.8659 

07 

65107 

-0.6 

66736 

-1.0 

65672 

-08 

153 475 

-42 

154.6 

-4.4 

15665 

-28 

124.78 

-28 

123.77 

23 

127295 

-25 

7.1106 

-24 

7.1384 

-24 

72724 

-25 

12487 

12 

1248 

1.6 

12284 

12 

1.637 

05 

1.6364 

03 

12255 

07 

12736 

0.7 

12733 

02 

12708 

02 


438 5.35 5.71 631 
4.88 527 5.64 823 


ECU IMad D* nM ta w: i n9K 54. 3 n»». 5%. 5 mOw Si. 1 yaw. 04. 5 UBOR WHbw* totog 
ram era ofercd Mas lor SlOra onotad to 8» ureter by Iw rawnca banks re mm mui 
day- lira banfe re* BreWara Trust Bra* at Tbkyo. BsrUfeS and Natorri Wsstmkmw. 

MU was srs rixmn torlhs Omdc Money Rum. US 3 CDs and 50R LiM Ospnta 0M. 


EURO CURRENCY INTEREST RATES 

Oct 27 Short 7 days One Thrai 


Belgian Franc 
Danish Krona 
D-Mark 
Dutch G iridar 
French Franc 
Portuguese Esc. 
Spanish Peseta 

StotSng 
Svrtss Franc 
Can. Defer 
US Defer 
Italian Ura 
Van 

Adenssms 

Snot tarn rasa ■ 


Short 

7 days 

One 

Thm 

Six 

One 

tarn 

nooco 

montfi 

months 

mantra 

year 

4?, - 4j| 

41} • 4}| 

5 - 4* 

5*« -5*g 

5& - 5»i 

EA - Si 

5*4-5 

5*-3»i 

5* -5* 

6*: -6*4 

6* -8* 

7* -7* 

4H - 4,‘i 

4 

4Q-JI1 

Si - 5 i 

Si - 5i 

5)} - Si 

5 - 4* 

5-4* 

5-4* 

S5-5*i 

5* - 5*4 

Sit -5\ 

-5*4 

5A - SA 

sA - 5A 

5* - 6*j 

57, - 5* 

8* ■ 0*4 


9 - 8ft 
7*1 -7a 
5*-S* 
3*S - 3 
5*8 -4S 
4* - 4* 
9-71, 

2A - 2,’, 

1* -14, 

1 cril tor the 


7*a - 7A 7,; - r& 

st* - 4% sa - sa 

3 a - 3;. 3,; - 3/. 

Si-4* 5A-4S 

4(2 - 4B 5 - 4* 

BV - Bis &*• - 8*, 
2i ■ 20 2,’* - 2*4 

1% - 1 1, 2.; ■ 2\ 

US DoBw and Van. amors: 1 
FUTUITO (MATIF) Pans 


711 - 712 6* - 8A ’ All 
6 ■ 5* flA - 8,1 J\ - 7«+ 
311 - 311 4& - 4\ 4h - 41, 
5*1 - 8* - 511 6% - 5* 

5fi - 5A 6 ’ 5s 6ft - Cii 

8U - 8ft 9,’. - Sft 10* - ID 
2% - 2*1 ■ 2.1 211 ■ 2 l + 
3A - 34 3* - 3», 4 - 37, 

wo days' naOcd 
1 mtsrtnnh offered rale 



Open 

Sea price 

Change 

Wgh 

Low 

Esl ml 

Open Int 

Dae 

9423 

9427 

+006 

9427 

9420 

21.403 

54.003 

Mar 

9274 

9279 

+007 

83.61 

93.71 

12240 

37,539 

Jun 

9323 

9296 

+006 

9328 

9232 

9.143 

29.484 

Sap 

92.95 

92.97 

+007 

9227 

9220 

3,646 

19318 

■ THR 

■1 MONTH KUROOOUJU1 (JJFFQ* Sim points 0 * 100ft 




Open 

Sen price 

Change 

High 

Low 

Esl wd 

Open mt 

Dec 

9297 

9328 

+0.01 

9297 

9297 

9 

2529 

Mar 

S324 

9326 

+023 

9354 

93 54 

1 

1368 

Jim 

9207 

9209 

+002 

9207 

93.07 

50 

300 

Sap 

- 

92.74 

+0.03 

- 

- 

0 

56 


I mmOMAHK PUTURBS (UFFQ* DM Im points ol 100% 


-03003 996 - 997 0.9997 03995 - - 

-0304 500 - 510 0.8530 03500 - - 

*0.0016 485 - 491 13493 13460 1.3468 0.0 13464 0.1 

+0.003 260 - 290 3.4230 3.4260 3.4285 -04 1*303 -03 


1.3536 -04 
3.4377 -03 



Open 

SsR price 

Change 

Ugh 

Low 

Eat. wu 

Open tot 

Dec 

9423 

9424 

+004 

94.88 

94. BO 

32197 

156326 

Mar 

94.47 

94.55 

+0.11 

9426 

94.45 

45664 

156036 

Jun 

9427 

94.14 

+aii 

94.14 

94.04 

29749 

105600 

Sep 

9826 

9275 

+0.11 

99.76 

9264 

15528 

78694 


I KUItOUilA OTTJIATK FUTUnM (UFFE) UlOOOm polnra of 100% 


-0.001 B 450 - 459 
+0.0001 271 - 281 


13492 1.3450 
7.7281 7.7270 


+0215 800 - 900 31.4050 313725 

-0.14 700 - 200 97.0300 96.6000 

*0.0002 510 - 520 2.5520 23475 

-0003 283 - 239 1.6337 132G3 

- 500 - 500 24.9500 243000 

+0.0002 510 - 515 3.7515 3.7S10 

-0.0025 695 - 705 1.4715 1.4695 

+0.0005 990 - 005 33005 3.4965 

+0.045 750-950 33950 3.9600 

-0.15 000 - 230 797.400 797300 

-0.0065 590 - 630 26.0655 260550 

-0.0195 8S0 - 950 24 8950 243860 

1 In Bis Mhr Soot Mfe show anty m lest tnra 
. UK. kstand & ECU srs quseid to US euraocy. . 


- 

- 

- 

■ 

- 

928 


Open 

Sett price 

Change 

Wgh 

Low 

Est vol 

Open kit 

-02 

1,3465 

-03 

1.3538 

-06 

85.4 

Dec 

90 85 

9034 

+017 

9094 

9080 

6544 

32548 

0.1 

77263 

0.1 

7.7361 

-0.1 


Mtr 

9010 

9022 

•020 

9024 

9008 

7547 

26598 


31.615 

-2.9 




Jim 

B9l59 

89.66 

+0.18 

88.68 

8957 

799 

16166 

2.7 

96.095 

23 

9245 

26 

1503 

Sep 

8924 

8928 

+018 

6927 

B9.1A 

301 

19068 

42 

2531 

32 

28045 

-2.1 

- , 

m 7HK 

SB MONTH MUNO SWISS FRANC FUTURES (UFF£) SFrtm poWs of 1 00ft 

-07 

1.6304 

-07 

1.6357 

-05 

- | 


Open 

Sa« price 

Change 

Hfch 

Low 

Esl ml 

Opon ML 

-04 

27567 

-06 

27753 

-06 


Dec 

95.84 

95.86 

+004 

9288 

953J 

3409 

30147 


1.4668 

09 

1j46 

0.7 


Mar 

95.48 

9552 

+007 

95 52 

95.47 

3500 

17530 

-5.3 

25436 

-5.0 


-24 


Jim 

95.08 

95.10 

+007 

95.09 

95.05 

214 

5345 

-102 

4.0775 

-93 



- 

Sep 

94.73 

94.73 

+008 

94.74 

94.71 

27 

1768 


aoai -43 803.0 -33 822.1 -3.1 

26081 -0.9 26121 -0.9 

24063 -3.5 25.0905 -33 253705 -2.7 


■ THRU MONTH BCU PUTUIOS (UFFE) Ecu In points of 100% 


JLP. Morgan nominal tefees Oa 24. 1 


1 cftscOy quotod to e* msrtiat 
m waraps 1080.100 



Open 

Sett price 

Change 

*flh 

Low 

EsL vol 

Open frit 

Dec 

93.84 

9287 

+0.07 

9286 

93.80 

911 

7590 

Mar 

9235 

9238 

+0.07 

93.41 

9232 

643 

6800 

Jim 

9281 

9228 

+0.09 

92.86 

9279 

355 

3933 

Sep 

82-33 

9237 

+008 

9237 

9231 

431 

2336 


• UFFE Uuaa sadsd on APT 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 


Oct 27 


BFr 

DKr 

FFr 

DM 

!£ 

L 

R 

Mtr 

Es 

Pta 

SKr 

SR 

£ 

C$ 

S 

Y 

Ecu 

Betoken 

(BFr) 

100 

iaoi 

16.65 

4264 

2014 

4867 

8453 

21.14 

4987 

404.4 

2206 

4264 

1285 

4282 

3251 

314.7 

2250 

Denmark 

(DKr) 

5280 

10 

8758 

2258 

1.056 

2613 

2268 

11.12 

2612 

2127 

1213 

2138 

1244 

2305 

1.710 

1652 

1241 

Renee 

(FFr) 

6005 

11.42 

10 

2221 

1-210 

2983 

8275 

1288 

2883 

2429 

1885 

2441 

1.192 

2631 

1252 

1882 

1231 

Germany 

(DM) 

2058 

2909 

2424 

1 

0.414 

1021 

1.121 

4246 

1021 

8815 

4.741 

0836 

0409 

0901 

0668 

64.71 

0224 

Mend 

PE) 

49.85 

8.438 

8287 

2415 

- 1 

2466 

2707 

1049 

2486 

2008 

1125 

2018 

0285 

2175 

1.614 

1562 

1266 

Italy 

<U 

2013 

0283 

0235 

0098 

0041 

100 

0110 

0425 

1000 

8142 

0464 

0082 

0040 

0285 

0.065 


0051 

Netherlands 

CFO 

1834 

2486 

3.053 

0882 

0369 

9108 

1 

8876 

81.08 

74.16 

4229 

0745 

0384 

0203 

0298 

57.71 

0.468 

Norway 

(NKr) 

4721 

8995 

7279 

2201 

0953 

2360 

2280 

10 

235.0 

1912 

1091 

1223 

0939 

2273 

1238 

1489 

1207 

Portugal 

(Es) 

20.13 

2827 

2352 

0979 

0406 

1000 

1288 

4255 

100. 

8122 

4242 

0218 

0400 

0282 

0.854 

6326 

0213 

spt*> 

(Pta) 

24.73 

4.701 

4.117 

1203 

0498 

1228 

1248 

8226 

1228 

100. 

8702 

1205 

0481 

1283 

0204 

7722 

0.631 

Sweden 

(SKl) 

4236 

8244 

7221 

2109 

0273 

2164 

2385 

8165 

215.4 

1784 

10 

1.782 

0861 

1200 

1210 

1382 

1.106 

Swttndand 

(SFr) 

24.60 

4278 

4.097 

1.197 

0496 

1222 

1242 

5200 

1222 

9921 

5274 

1 

0488 

1.078 

0600 

77.44 

0627 

UK 

ra 

5028 

8580 

6291 

2451 

1.015 

2503 

2748 

1065 

2502 

2032 

1122 

2048 

1 

2208 

1238 

1588 

1285 

Canada 

PS) 

2282 

4239 

2800 

1.110 

0460 

1134 

1-245 

4.823 

1184 

9220 

8293 

0228 

0453 

1 

0.742 

7123 

0582 

US 

(S) 

3076 

5.848 

2123 

1.496 

0.620 

1528 

1.678 

6202 

1528 

1242 

7.094 

1250 

0211 

1248 

1 

8883 

0784 

Japan 

ro 

31.77 

8040 

2291 

1245 

0240 

1678 

1.733 

8715 

1572 

1282 

7227 

1291 

0631 

1292 

1.033 

100 

0210 

Ecu 


3021 

7.456 

6230 

1.907 

0780 

1948 

2138 

8288 

1942 

1586 

8043 

1294 

0778 

1.718 

1275 

1284 

1 


FT 


ml 


DsnWi Krensr. Fiancft Franc. N on ragls i i Krona*, and Sm a sh Kronrx 1 
■ D-MARK RIT1MS QMM) DM 125300 par DM 


: 8+kfen Franc. Yen. I 


I VMM) Yen 123 per Yen 100 



Open 

Latest 

Change 

Hfgfi 

Low 

Eat vol 

Open frit 


Open 

Lata# 

Change 

Ugh 

Low 

Ea vol 

Open tnL 

Dae 

06710 

06685 

-00019 

02712 

0.6651 

32.462 

88307 

Dec 

1.0370 

1.0364 

-02002 

1.0392 

1.0351 

17,454 

60242 

Mar 

0.6723 

0.6701 

-00018 

OB723 

06896 

130 

4286 

Mar 

12468 

12452 

+02001 

12470 

12452 

209 

7.000 

Jun 

- 

0671 B 

- 

- 

02718 

1 

615 

Jun 

- 

1.0554 

- 

- 

- 

279 

718 


■ SWISS FRANC FUTURES QMM) SFr 125300 per SFr 


■ STBRLBM FUTURBS (IhM) 082300 par £ 


Dec 

08058 

0.6020 

-0.0034 

0.8067 

08015 

17280 

41225 

Dec 

12370 

12360 

-00004 

12378 

12338 

12296 

44205 

Mar 

00070 

0.0056 

-00034 

0.8070 

08055 

13S 

1227 

Mar 

1.6340 

12390 

-00006 

1.6380 

12330 

100 

528 

Jim 

06100 

D.8100 

-0.0030 

021 00 

0.8098 

25 

150 

Am 

- 

12310 

- 


1.6300 

1 

9 


UK INTEREST RATES 


LONDON MONEY RATES 

Oct 27 Ower- 7 days One Three Sx One 

nlghl notice month months montha year 

Interbank Sterling 6-3 5 *t - 5 5*2 - 5 * 6 - 5 % 6,*. - B,', 7A - 7ft 

SteritooCDi - - 5 JJ-SB SB- 5 JJ eft -eft 7ft -7ft 

Treaswy B«s - - 5% • 6ft 6^ - 5ft 

arakBOs - - 5 , 5 , - 5 ft 512-512 63,-8>4 

Local authority dopsL 5 '+ -5^ 5'+ - 5*i 5 ft - 5 ft 5 ^- 5 % Bft - 6 ft 7ft - 812 

Oscount Market deps 5ft - 3 U 5 >g - 5 

UK dsartig bank base lending tats 5ft per cent from September 12, 1994 

Up lo 1 1-3 3-0 6-8 9-12 

month mortl i monels monl la months 

Cans ol Tax dsp. (tiOQOOO) 1*3 4 3?* 3ft S*i 

Carts of Tardsc usfer D0IUI00 Is tIjdc. DepoaQi wKhdraan tor cash tpic. 

Am tondtr ran ot daenn &*Z2Spc ECOO Itoad rata SSg. E>pon Ftoreos. Malta i+> day Sap 3D. 
7904 Agreed rale tor period Oct 28. 19W so Mov 25. 1994. Sc h amas P«C rjJSpo. RMknnca rats tor 
period Sxi 1. 1994 to asp 30. 1984. Schamas IV s V S.73SPC. nranoa Hcum Bare Rare fee tram Oct 
1. 1984 

■ THW MONTH STraUM FUTURSS (UFFQ £500300 pdnts Of 100% 



Open 

Sett price 

Change 

High 

Low 

Eat vol 

Open M. 

Dee 

93.45 

93.54 

+012 

9325 

83^42 

24400 

1423B7 

Mar 

9228 

9226 

+013 

9227 

0221 

29591 

74234 

Am 

91.93 

92.02 

+0.13 

9223 

9128 

11017 

66910 

Sap 

9120 

9127 

+0.11 

9127 

81.44 

6184 

52769 


EMS EUROPEAN CURRENCY UNTT RATES 

Oct 27 Ecu cen. Flats Charge % +V- from 


BeJgturn 403123 364380 -0.0006 -133 539 14 

Wetsnd 0308828 0.793693 +0.000901 -1.8S 530 12 

Gerarav 134864 131686 +600049 -1.68 5.13 

Ftenoe 633883 636128 -030083 034 3.01 -3 

Denmark 7A3879 7^8183 +030999 0.74 2.80 -5 

Portugal 192354 195.787 +0.026 132 1.81 -10 

Spain 1543S0 150431 -0.181 336 0.00 -23 

NON ERM UaCBS 

Greece 284313 295482 +0.193 11.70 -7.47 

Baiy 1783.19 195737 -0.86 9.16 -531 

UK 0.788749 0.783071 -0300507 -047 334 

Ecu central rates sat by lha Birepe wi Ccmm iaal c o. Cwrandaa are In dascanang ratoflaa abw\fh. 
Fercatrag a chig— «» fcr Ecu: a posters change danotaa a wator aarancy. P+arpanc e ahowa die 
ratio batman two spraada: tfw pareamgadSennca bataaan Sm actual marital and Ecu canm rases 
tot a war ier, and me nrednami par w aad paraa nug e dartetei cf ma cwrengra raanra rare Sam Sa 
Ecu carnal ran. 

07/area Snreig end IttOan Ura arepandad hem SIM. Adtoshrant cascUtead by me Ftoanaal Tlmaa. 


■ PHBLAPBtfWA SN C/S OPTIOWS £31 350 (cents per poind) 


Traded an APT. Al Open nrarset Sgs. are to previous day. 


■ SHORT STERLING OPTIONS (UFFE) £500.000 points ol lOtW 


Strifes 

Plica 

Nov 

— CALLS - 
Dae 

Jan 

Nov 

— PUTS — 
Doc 

Jan 

1250 

846 

850 

865 

- 

Oil 

0.37 

1275 

801 

831 

863 

nno 

035 

077 

1200 

3.87 

421 

4.79 

Oil 

024 

120 

1225 

1.76 

227 

326 

085 

127 

224 

1260 

057 

123 

2.14 

125 

o » 

3.69 

1276 

010 

078 

120 

322 

425 

622 


Strike 

Pries 

Dec 

~ CALLS - 
Mar 

Jun 

Dec 

— PUTS - 
Mar 

Jim 

9360 

0.18 

0.08 

009 

014 

0.90 

127 

9378 

0.07 

003 

026 

028 

1.12 

1.79 

9400 

0.02 

0.01 

003 

048 

125 

221 


Prevtoua dayto msL. CMm B32S Puts WHO . Prev. day's epan It. Cafe <33328 Puts 386,792 
■ HWI MONTH ■UWOPOUAB (9-94) 81m pofrita of 10096 


European Oil Refining and the Market to the Year 2000 
15 & 16 November 1994 - Amsterdam 

This year’s meeting, timed to coincide with the PetroTech 94 Exhibition, will examine 
the European product market and prices and review refinery activity. Environmental 
issues and new refinery investment will also be discussed. 

ISSUES INCLUDE: 

• Current and Future European Refinery Capacity 

• The European Markets and The Middle East Refiners and Producers 

• Russia's Oil Product Market: Current Patterns and Outlook 

• Cost Effective Approaches to Heavy Oil Conversion 

• Environmental Protection and Fuel Quality 

• The Cost of Meeting EU Environmental Regulations 

SPEAKERS INCLUDE: 

• Mr Tomihiro Taniguchi • Mr Gilbert M A Portal 

Director, Office of Oil Markets Secretary General 

& Emergency Preparedness European Petroleum Industry 

International Energy Agency Association 

• Mr Phil Trimmer • Mr Chris Baxter 

Manager - Strategy and Forecasting Vice President 

BP Oil International The Chase Manhattan Bank, NA 

• Mr Mohammed Saleh Shaikh All • Mr James J Degnan 

Chief Executive Chief Executive Officer 

The Bahrain National Oil Company M W Kellogg Limited 


"‘'-Bijjjfeate 


EsL ML tod. Cafe 8819 Pub 5480. PRaXXB Oofs open kit. Cafe XB124 Pun 180661 


BASE LENDING RATES 


Adam 8 Compaiy 5.75 

AfetfTnat Barit -67S 

ASBank 5.75 

NHonyAnshacber 5.75 

Barit of Banda 5.75 

8snoo Bibao Waaya_ 57S 

Barit of Cyprus.— 6,75 

Bank of Ira&nd .......... 5,75 

Barit of tela — 675 

Barit of Scottand .575 

Barclays Ba* -575 

aft Bk erf MJ East..- 675 
•Bosn SHpfey & Go Lfcl A75 
CL Barit Nsderiand... 675 

CNbankNA 3.75 

OydeadriaBank 675 

Tte CtKjparahe Bark. 6^ 

CoUIbSCd ,.m.-675 

Cradl Lyonnab — 675 

Cyprus PopUar Bank .3.75 


□mean Lawria — 675 

ExMX Bonk Lknaed _ 675 
FinancieiS Gen Bank- 05 
Mobart Ftering & Oo - 675 

Gtabank — 675 

«QU*ie»Maten 675 

H 0 M> Barit AG . 675 

H a n teu a Banfc 675 

HeriBUo & Gan Im Bk. 675 

•HISamueL. — — 675 

C.H0BI9&CD 673 

HongtongashN^Mt 575 
Jifen Hodge Barit. — 575 
•Leopold Jcsarii & Stxn 675 

Uoych Baric — 675 

Maghraf Baric Lid 575 

Mtfand Bank 575 

*MoutBaridng 6 

NNWasbrinatar 575 

•Rea Btonera 675 


* Boxtogho Quantee 

OoparNian Urited • no 
kmgorauBntaedaa 

a balking insttuDoa s 
Royal Bk of SooSand- 575 
•SmlBi 6 WWnvi Sacs . 5.75 

TS B - 575 

•UnMBkofMjwNt- 675 
Unity Trust Bank PIC — 675 

Western Trust — 575 

Wte w i Hi y LaMar 575 
YoriorireBaik 575 

• MenftmsafUnkxi 
bKObnamBaridng 
AssooMon 

• friarirtnWr Nto i 



Open 

Latest 

Change 

High 

Low 

Est vd 

Opan InL 

Dae 

8327 

8887 

- 

9899 

8898 

81283 

427.786 

Mar 

8323 

9325 

+021 

9327 

8923 

112.118 

398211 

Am 

9326 

9327 

■ 

93.10 

9806 

75226 

296,720 

■ UfmeAStlRrBftLFUTUIinS(]MM)$1m per 100ft 



Dec 

9427 

9428 

4001 

9429 

9427 

613 

17,940 

Urn 

94 JOT 

64.06 

+001 

34.09 

8427 

347 

10,605 

Jun 

93.80 

9321 

- 

93.63 

Qltfl 

1284 

5239 


There are some excellent marketing opportunities attached to this conference, please contact 
Lynette Northey on 07 1 8 14 9770 for further details. 


Aa Open tatarest flgs. are tor prevtoua day 
■ BJUP—ABK OPTIOW8 (UFFE) DMImpotorta of 1009k 


Strifes 

— 

— 

CALLS - 


— — — 

PUTS — 


Price 

Nov 

Dec 

Jan 

Mar 

Nov 

Dec Jan 

Mar 

9475 

Oil 

016 

009 

013 

002 

027 029 

033 

9500 

001 

004 

003 

006 

0.17 

Q£G 048 

021 

95B5 

0 

001 

021 

022 

041 

042 071 

0.73 

Eft voL ML Crib 5951 PUx 1173a Prevtoua 4 m* opan H. CA 205305 Putt 183338 

■ HURO SWISS FRANC CPTfOKStUTE) SFr IrapoWe Of 100ft 


Price 

Dec 


IlNkU ~ 

Mar 

Jun 

Dec 

raia — 

Mar 

Jim 

9575 

016 


0.11 

006 

nnc 

034 

073 

8900 

004 


004 

004 

015 

n *7> 

094 

9625 

021 


0.02 


040 

0.75 



, Mai CWto 100 Puts a Prwtoue day* ■ op+n hi. Cafe 1970 Puts 848 


THE NINTH EUROPEAN PETROLEUM AND 
GAS CONFERENCE 

Please lick relevant boxes. 

□ Conference information only. 

□Cheque enclosed for £77530. made payable lo FT Conferences. 

□ Please charge my Mastercard/ Visa with £775.50, 

Crnino □□□□□□□□□□□□□□□□ 

Name of cord holder 

Exp. date.. Signature 


Please return to: Fmandal Times Conference Organisation 
PO BOX 3651. London SW12 8PH.Td: OS I 673 9000 
Fax: 081 673 1335. 

The Ninth European Petroleum and Gas Conference <660 + Vat 


Name Mr/Mre/Miss/Ms/Olher . 


Job Title Dept , 

Company - 


Address . 


.-..PostCodc. 



t 





Il 


tl 


1 

__ 

10 

— < 

M 


26 

__ 

10 


24 

. 

15 

__ 

34 

-I" 

17 

__ 

20 


2-2 


74 

__ 

7.7 

— 




3-D __ 

U “ MBI 

3.1 = ** 
ai _ 

£0 _ 

SA _ 

U _ 

16 _ 

3.0 „ 

2.1 _ 

2 2 __ 

13 _ 





1030 13 B4 
13 08 „ 
134 U _ 
2-48 02 „ 
442 05 _ 
9 18 _ 
11 13 — 
sjs oa _ 

1040 13 _ 

1110 13 _ 
3.14 03 _ 

3.1 B 33 _ 

388 1.7 _ 

046 26 _ 



Uii. 







84 



1J 



24 

MM 

44 

MM 

26 

MM 

10.1 

.... 

ftO 



17 

_ 

14 

MM 

20 


CL7 


34 

— 

34 


24 

_ 

26 

__ 

54 

MM • 

82 

- J 

70 

__ 1 


5,150 +5 

9.700 +50 

1150 -10 

oaoo -loo 


TT 


2820 —40 

2JM0 +10 


10» +*1.140 

1B00 +101370 

■4 
-«> 



INDICES 



SM. >>• 

-11 
sr£ w. 




m 




SE5 


nr 


fit 


US INDICES 






Mflb 

low 


it i 


ft Otfhsrtnft/l/3C( 

MMMtfVUBQI 

Qrtff*N(3tff2M) 

lbUhk«nAl) 

Baail/UT) 

m 

Bn— £9712/83) 

MuTiM^igni 

COBWttt 0875) 
FWttb§§ (4/1A8) 
CM* 

PGA Gai (H/12/SQ 

Dnok 

tof ** tf* a EQnm 

FMm* 

KXQnmtWZWI 


18100.1? 1683545 1906751 3MKMD 102 

9B&3 20175 2021 5 236160 3 C 
ms 10602 10713 mow 372 

37975 U 3768* 46006 02 
10SO1B « 101259 12222 1/2 

.1357.11 135450 134025 154265 90 

470875 460375 45*340 91400) 1» 

421252 422097 4159L04 427002 2000 
i g am p gwinn 42*230 4MU9 230 
308117 205B.1B 2051 71 2HU9 1/2 

5915 36122 5511-3 867926 197T0 

34390 34478 34259 CUUO 2)2 

194&9 19229 19105 187299 472 

124352 123177 122756 OTUO 28 
iaSa.1T 1831-54 153442 8 BU8 28 


mZ«SM<31/t2/5St 78X27 78X32 75102 *627 im 

COUoMn/1253} 21694 21695 21365 MUD 215 

awpanswa max anau® wabs 22Ttti iss 

Mob 6831/1060) 62256 91849 82644 119458 W/1 

Hon Kaon 

/MgSatfftfflVft 930*53 SE3244 934850 12SBUB VI 

M| 

BSEsrajMTO 432674 43S744 43559 49857 12fl 

Wkaih 

Mm CBRV4WMQ) 51756 51232 51453 9258 3/1 

EEQOmaVUSS) 181006 17983* 179034 2B8U6 2071 

Mf 

SBaQranttOCT 61273 81041 0073 817.17 105 
■ Gnri|4M4| 9820 9885 8845 Wlt» 10S 

NMrt Z& (1BIS/46) 1876658 197*635 1873215 2TO5J 13ft 


GBF 2S0 pi/126)Q 
OC 40(31/1087] 


2517 JO 27/10 
80450 8/5 

37094 23/10 
101138 Bfi 


32BB56 20H 
385950 24/5 


WBUO 3/1 


7C54 S/10 
21189 sno 
19689 7/M 


PC QM 19 78) 

OSIS— nftnlBa 
css ft area 65 


M BSOlOO 257838 26BU7 80 VBJ3 20/4 


495 495 *253 4M9 3V1 
2705 288.1 267.1 X9U0 31/1 


011 40 ti/raq 209042 208033 2DB154 msm a a 

■an m 

OtoSEMpW* 1054.13 1055.18 105433 tZILIO 28ffi 

IMi comp (2/UB5) 300075 307829 308934 339837 4/1 


*0838 ZUB 
2879 ZUB 


Mil ZUB 


28805 2866.7 29874 322860 ISC 26129 2018 i^hHiMiT 


SES M-S1XM0V75} 5909 5819 38036 6*19 4/1 


JGE SOU CM/78) 

JSEMCBW4 


22985? 2600 23020 289*50 779 
85880? 66705 85305 818709 15* 


174850 HB 
541050 19/1 


H8M 300 (1/1 080 
1C?« (VI/68) 
2M9gdbi(VUEq 


287.14 28800 29882 3071 13ft 
156044 156004 186040 171223 «« 
219*74 219406 219052 25088 07 


845*9 5/1 

44872 12/7 


1738071 VI 
28022 VI 
14*517 4/1 
187133 VI 


NmCa*B<tvi/*V- hxmjt 109253 109152 tma ie/iO 

39* 

IWdd SE I30/12H9 29151 26865 29630 86831315 

LhMR (1/3 87) 14889 14669 14489 WUO 3VI 

SmBkhd (31/12159 113872 1151.05 115BXB 142X94 31/1 

SBC Gmnl (1/4487) H7BJS7 884.16 B88L4B 109X29 31/1 

TUMM 

M—ftfO/BHr 859*97 688507 H 7WL13 309 

TkafaDd 

BmCMST (306/75) 1501.73 151457 180100 119373 4/1 

IMMOoiMJBDUM 2*5584 249095 2473*7299X9 W 

MU 

HSC*pUU(t/U7V B32JT 630LG 8302 04(08 2ft 


MUttfe 3675.15 3M823 385008 SUB 3S9X35 307838 4U2 

(51/1) |Vft pi/UBft (2/7/321 

HomBdo* 95.16 95.16 9504 10551 95.16 18977 5*9 

(21/1) (2B7H0 (1 VIEWS) (t/URI) 

Itmort 149502 147087 147*13 UBS 143800 UBE2B 1232 

ot (wtj vm 2 wrasj 

UBfea 173.16 17754 17763 2279 1739 2889 109 

on) cam pwwft (8M9) 

OJ tod Day's i**> saaao pg bimt ) Low 3894X4 psiasi ) (mnoa*a*n 
Day** Htfl 3075-16 (3870.10 > Low 38*853 (3837X7 ) fteMtft 

Canpafto t *6534 48252 46103 MZO <3662 409 49 

(212) (4/4) 02/94) (193a 

— f 5549 55113 54*73 58063 5109 8951 362 

(ISA) (21/ft (IHAft (21992) 

FtanM 4261 429 422S 4864 4109 469 864 

(14W (4/ft EMM) (1/10/74) 

USE CBM 25557 25X61 25X01 *7.71 218.14 2071 4*6 

0a l*/ft PfflBft P5M/42) 

AmxIttVri 4SS9 45X53 4529 48759 42207 4879 2901 

pa pva pzftft pi2wa 

MSOU CM 7679 76304 75X20 8939 89X79 9X9 5467 

(189 (24ft) (IflOftft pUW?a 

■ RATIOS 


113X32 27/10 
8957 27/10 

519*83 1913 


□cm Jones hd D/v. YMd 

3 S P Ind. Dtv. yUd 
S & P bid. 1VE mdo 


Oct 7 Year ago 
Z7S 2.79 

Oct 12 Year ago 
237 2X2 

2001 2&S1 


XARP AMP POORS BOO— PU1MISB 1500 Umw hdB 

Open SMt price Change Htfl Low EstVOC Open W. 
Dec 48305 46720 +085 46700 46300 73007 222X8* 

Mar 48706 47040 +300 47045 4ML60 500 12.267 

Jun 47200 47405 +400 474X0 47200 99 3096 

Opm kaanM figuna an lor ptavfcw Of. 


Enntnck lOOpfi/IMQ 13020 130021 129850 159.18 31/1 12889 VIO 

BnTte-WBl—m 115*9 114902 11469 tMUl 20 TIM48 5/W 

JQsAga (31/1285 M 333X5 33118 38L19 5/1 2909 21ft 

Dartnui EownUVUBa 16X9 18X77 181.18 ItLM 20ft 1419 21/4 ■ 

■ CAC-40 STOCK 3WPRX FUTURRS ft4AT7F) 

Open SaB Price Change Ugh Low EaL voL Open H. 
Oct 18480 18680 42S5 1BS90 18370 40038 17088 

Nov 18580 18860 *260 19680 18480 17/05 15038 

Dae 18840 18740 +2S0 1B72JS 18530 8088 26013 

Opm hbMS IpMa far tMMb» dp. 


■ MWr YORK ACIWE 8TOCK8 

Tluadqr SUSt* CKn Bangs 
Md erica on Mr 


■ Twain ACTI1Y 


HSOnsfMftE) T16I-74 HUM* 110223 J3NL9 M »»» W4 
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Thr L-.rq.--it provider of d^dir.ited financial ultimo'.v 1<nanri:d (33g«>r on the mnrtet. T, v 
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n:X. S it 0n M d a i ; St ' TS Call 0800 28 28 26 Ext. 1 34 today. 



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FINANCIAL TIMES FRIDAY OCTOBER 28 I *9* 


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AMEX COMPOSIT E PR ICES 4 pm ctose October 27 


Stock 


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Boom 038 7 
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100a Mob LowCkia Gng 

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862 14% 13% 1 
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064 11 Z100 31 31 31 



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IMMA 44 21 0^ 6% B% ♦% 

248 B73 32% 31% 32% +% 


US CUM 




VflRET 

Worthen 

xytrenb 


*A 4& 4A 



Gain the edge owr your competitors hy having the Hnandal 'nines delivered to your home or office every working day. 

Hand delivery services are available for an subscribers who work or IWe in the business centres of Aix en Provence, Bordeaux. Cannes, 
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AaaacCran 318 87 25% 23 25% 

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BeterHVIl 40 i Hi i 

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BantoGn 052 141688 30% 29% 30 +% 

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BEAMS 20 74 9 8% 8% 

BeanUGs 042 32 58 14% 14% 14% 
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fltamt 20 3031 11% 11% 11% +% 
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BMC SQftw 145B51 46% 44% 45% +% 
Bertrams 136 8 3528 29% 29% 29% 

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Baton Bk 078 5 49 30% 30% 30% +% 

Boston Tc 722B12 18% 15% 15% +% 

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BnademT 20 151 11 % 11 % 11 % +% 

BurBnm 47 271a14% 13% 13% +% 

BHtaaafl 68 400 35 34% 35 -% 

BuUartng 040 B 389 34% 33% 34% +% 


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tan 139 144 15% 18% 15A +% 

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Drag Eopo 00841 134 4% 4% *% 

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Egghead 

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BPaaoB 

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11 1518 16 15% 15% 


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FbrrCp 024 39 10 6% 6% 8% 

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fWM 181853 29 28% 28% +% 

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Rtenat 35 882 25% 24% 25% +% 

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MTem 128 10 901 48% 45% 48% +% 

mWMn 038 7 40 0% 9% 8% +■% 

PSfedWc 05B S 363 21% 20% 20JJ 

FhaBar 1M 8 13 32% 31% 32 -% 

Fhabtots 55 39 0% 9% 9% -% 

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FkMH 17 347 6% 6% 6% +% 

FoodLA OOB 142188 5% dS% 5% 
FOOdLB 0095501023 5% 5% 5% -% 

FhremaM 10B 10 4 32% 32% 32% -% 

tenter 10 158 11% 11% 11% -% 

Footer A 39 124 3% 3% 3A -A 

FMbFtl 104 12 206 31 30 31 +% 

FXFH 040 7 891 14%<14% 14% 
FtoHrate 118 11 294 27% 27% 27% 
fUar»k OU 21 204 34% 33% 33% -% 
Flitarlte 008 10 33 19% 19% 19% 
ram 024 28 0I0h 21% 20 20% 
RibnadADR 11 29 3 2% 2% -% 


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Butina 0 150 2% 2% 2% +% 

Garnet Rs 9 151 3% 3% 3% -% 

Get* Co 018190 184 7% 7% 7% 

BartBhd 04022 38n21% 20% 21% +% 
andyte 17 5 4% 4% 4% 

tateA 12825 5 4% 4% 

tadaxCp 400 41 1574 24% 23% 24% +% 
Genwlnc 2121364 6% 8% 8% 
Ganzyme S82151 32 31% 31% +A 
GtasteBt 040 18 702 15 14% 14% 

GkktegiL 012 11 SBU 15% 15 15% +% 
GfentA 060 15 17 14% 13% 14 
QtabBtan 12 6 5% 5% 5% -% 

flood Buys 15 410 11 % 11 11 % +% 

QtortWtep 080 19 50 21% 21% 21% 
OredraflfS 400 353 irt 3% 4 +% 

Grata 020 70 74 21% 21% 21% 

Groan AP 024 11 240 18% 18 18% +% 

GlMdlPIt 02247 15 A A -i 

aossim 01303 2 % 2 % 2 % -A 

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SIKtap 12 858 17 18% 18% +% 

GkNVfeg 5 765 9% BH SR -ft 


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Hateryto 088 8 23 23% 23% 23% -% 
Harper Bp 020 121068 13% 13% 13% +% 
tterisdnp 1585 12 % 11% 12% ♦% 

HOT A CD OIB 25 8527 30% 28% 30% +% 
Heertrar 24 7548 27% 25% 28% +% 

teamen 006 20 118 12 % 11 % 12 % +% 
HeaBtam T2 952 B% 7% B% ■% 

HacMnger x 0.18 18 3730 11% 11 11 -% 

ftkfcf 132 9% d9% 0% -% 

tetonTray ID 28 18% 17% 17% -% 

tertfx 068 11 8205 17% 18% 18% -% 

Hogan syx 015 186221 8% 8 6%+% 

Hoiogta 60 747 15% 14% 15% +% 
temaBarf 080 8 5 20% 20% 20% -% 

Hoi Inda 044 19 50 26% 28% 20% 

Hotnbeck 15 1533 15 14% 14% -% 

MraaAfln 044500 138 5% 5 S -A 

Hurt JB 020 W 422 n 1B% 18% 

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term Co 008 1 104 4 3% 4 

HtaftTecb 147 1 043 28 28 28% -1% 

ftcor Bo IB 220 5% 4% 5 +% 


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5H8ys 48 24 8% 7% 7% +% 

DG Count S26C3 8% 8% BA -A 

EIM 2 2775 3% 2% 2Q -A 

hmxjcor 33 119 8% 5% 5% 

teimro g iM 1 59 3% 3% 3% -% 

taped Be 040 30 12B 18% 15% 15% -% 

Mbit 024171 12 12% d12 12 

MRS! 177501 14% 13% 14% -% 

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bigbrtit 00815 13 11 11 11 +% 

Hegrfter 3416088 28% 28% 28 +1% 

ISglh&ys 33 488 14 13% 1^1 +U 

totgUMt 7 33 2% 2% 2% -% 

latex OM 1131430 60% 50% 60% +% 
totei 8 68 2 % 2 % 2 % +% 

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later TH 18 660 8% 8% 8% -% 

interfeaA 024 14 5B5 11%tf10% 10% -% 
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146 8 

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ftaptoSH 040 14 581 14% 14 14£ +£ 

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PbosUTcn 373144 117% 7 7% +% 

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Plante 407624mo% 17% ib% + 1 % 
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PtanaaM 068 22 SOSO 33% 32% 33% +% 

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Ftastok 1545016 49% 39% 41% +% 
P0Coto 2311274 16% 14% 15% •% 

Pride P« 37 BOO 5 4% 4% 
Primate 39 339(23% 21% 22% +% 
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Ratal B 012 14 1824u28% 25% 28+% 
PynoU 65707 11 10% 11 +tt 
DtateLng 10 84 B% 6% eft +A 


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Unm 2 453 5% d4% 4 % 

UCUksGs 100 13 sa 18% 18 IB 
USTto 200 143284080% 50% 60% +1% 
ItetedSt 040 B 285 10% 9% 9% 

Urtong OOB 14 53 18% 18 18 -% 

Item 100 2* 198 45% 44% 45% +% 

US Bancp 100 88850 23% 23% 23% -% 
UBEnoty 5 27 4 4 4 

mean 1.12 7 io 11% 10% 10% 

Utah Mad 14 T45 9% 8% 8% •% 

UM Tatar 12 147 53 51% 51% 

UUX 12 314 4% 4 4 


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Vottooa 24 1236 ZIA 4 21 % 21 % +% 

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Vtenfegk: 314 2748 22% 21% 22+1% 

WL91WI SO 4921 1£% 11% IZA -A 

Vbh«0 01718 OM 20 19% 18% 


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WamM 91 374 5% SA 5% +A 
MtoMkEBXUB 62245 18% 18% 18% -% 
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WtoWndA 022 S 315 24% 23% 23% -% 

WaiHMI PM 024 14 848 2* 23 23A -A 

WMO 2.40 18 64 42% 41% 41% -1 

WMak 4 109 3% 3% 3% +% 

Vhteflna 008 11 872 27% 27% 27% +% 

MOmBnc 068 27 60 32% 31% 32% +% 

WUPtto 101009 12% 12% 12% +A 

MtpSM 2 351 15 14% 14%+% 

WdSeW 10 454 3% 3 3% 

HMtt 098 23 437 47% 48% 47 •% 

HBmSMoM 75 831 33% 32% 33 4 % 

VMDhnL 028 IS K 17% 16% 17 -% 

WBingl 040 292381 23 22% 23 +% 
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- X - Y - Z - 

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tom Carp 2 838 3A 2% 3 

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ZteteM 120 9 300 30% 37 38% +1% 



WORLD STOCK MARKETS 


AMERICA 


Dow recovers 
in advance of 
economic data 


Wall Street 


After five losing sessions is a 
row. US share prices improved 
yesterday morning, as the 
bond market firmed ahead of 
today's economic data, unites 
Frank McGurty in New York. 

By 1 pm. the Dow Jones 
Industrial Average was 14.47 
higher at 3.862.70, while the 
more broadly based Standard 
& Poor's 5 DO was up 2.13 at 
464.74. On the NYSE, advances 
had an 11-to-eight edge on 
declines by early afternoon, in 
fairly heavy volume of 197m 
shares. 

In the other leading markets, 
the American SE composite 
was LQ2 better at 45-155, and 
the Nasdaq composite was up 
3J27 to 766.48. 

Bargain hunters were finally 


NYSE volume 


DaSy (million) 
350 



rwL 1933 
0.100.000 


13 14 17 IS 19 20 21 24 25 26 
October ISM 


lured into the market after five 
days in which the Dow indus- 
trials retreated by about S3 
points. But the advance was 
modest as many investors pre- 
ferred to wait until after 
today's initial estimate of 
third-quarter economic growth 
before making fresh commit- 
ments. 

In general, the tone 
remained negative, with most 
economists having revised 
their forecasts upwards for 
gross domestic product in the 
three months to the end of Sep- 
tember, to a moderate 3 per 
cent. Expectations of a mid- 
November move by the Federal 
Reserve to lift rates again, and 
a cautious mood in bonds con- 
tinued to restrain any enthusi- 
asm among equity investors. 

Yesterday, the Treasury mar- 
ket showed half-hearted signs 
of life, with traders squaring 
their positions ahead of the 
GDP data. But the gains, sup- 
ported by slight improvement 
by the dollar against the yen 
and D-Mark, were modest, at 
best 

The day’s only economic 
news was a dip in last week’s 
initial claims for unemploy- 
ment benefit. The data - a 
snapshot of conditions in the 
employment market - had 
some inflationary implications, 
but it was not particularly con- 
vincing when viewed in isola- 
tion. 

A fresh batch of earnings 


Canada 


Toronto stocks were slightly 
higher at midsession with 
Placer Dome shedding C$% to 
C$30% after reporting a slight 
improvement in third quarter 
profits. 

The TSE 300 composite index 
was up L41 at 4^61.36 in vol- 
ume of 45.7m shares valued at 
C$634 ,3m. 

Advances led declines by 308 
to 262 with 284 issues flat 

Falling precious metals 
shares muted solid gains In 
energy, conglomerates and 
consumer products. 

The gold and silver group 
fell 155.50, or 1.5 per cent to 
10,204.08 as gold prices fell 
back. 


Mexico 


Equities were lower at midday 
on a fan in Telmex shares on 
New York. 

The EPC Index was off 27.73 
or 1.08 per cent, at 2£50.65. 

Volume was low at 33.3m 
shares, with Telmex account 
mg for almost 16m, 

Telmex was down $1% at 
$56% on Wall Street while in 
Mexico its L shares were off 2 
per cent and Its A shares were 
off 1.8 per cent 


S African golds gain 


Shares in Johannesburg were 
firmer with strong gains seen 
particularly among gold sector 
stocks. 

Hie overall index finished 28 
higher at 5,735, the industrial 
index was 15 points better at 
6J>88 and the gold index was 
18 points firmer at 2JE98. 

Brokers remarked that 
Investors remained positive on 
gold stocks believing that the 
price of bullion would move 
above the $400 an ounce level. 

Industrials were also attrac- 


tive at current levels, said one 
trader, given that prospects 
for the economy remained 
encouraging. 

The market shrugged off a 
rise in the inflation rate which 
came in aronnd forecasts, up 
to 10.Z per cent in the year to 
September from 9.4 per cent 

Gencor gained 40 cents to 
R15.00, Barlows picked up 70 
cents to R32.70. In golds Drie- 
fontein ended 75 cents up at 
R66.75 while Kloof closed up 
25 cents at R69.75. 


FT -ACTUARIES WORLD INDICES 




FINANCIAL TIMES 


Friday October 28 1994^ 


EUROPE 


Milan excited by L2,000bn Romagnola bid 


news provided some grist for 
the mill, allowing most stocks 
to grind higher as the morning 
progressed. 

Airline stocks were in 
demand, amid more signs that 
the US industry may have 
turned a comer in the third 
quarter in Its quest for finan- 
cial stability. 

UAL. parent of United Air- 
lines, climbed $1% to $87%, 
while Delta Air Lines was 
marked up $1Y« to $48%. both 
on better-than-expected perfor- 
mances. AMR, parent of Ameri- 
can. added $1% to $52%, having 
posted strong results earlier in 
the reporting season. 

By contrast, Dow Chemical 
added just $% to $73%, even 
although third-quarter sales 
had climbed to their second 
highest level in the company's 
history, and net income of 
SL04 a share was 25 per cent 
better than Wall Street had 
anticipated. 

Allied-Signal, a diversified 
industrial group, receded $% to 
$81% after matching the con- 
sensus forecast of 67 cents a 
share. 

Xerox, down $3% to $104%, 
suffered a setback even though 
its results were much better 
than analysts had expected. 

Pitney Bowes, the world's 
largest manufacturer of postal 
meters, dropped $1% to $32%. 
Its results statement included 
details of a restructuring plan 
which would eliminate 2,000 
jobs. 

In banking, Citicorp gained 
$1% to $46% on a published 
report which commented 
favourably on the stock's 
growth potential. 


Unchanged interest rates at 
yesterday’s Bundesbank meet- 
ing were no surprise; and they 
were in character frith a day 
which, for once, let individual 
corporate stories make their 
mark on share prices, unites 
Our Markets Staff. 

MILAN was excited by the 
L2.000bn bid launched by Cre- 
dito Italiano for the Bologna- 
based Credito Romagnola. 

The Comit index improved 

232 to 612.73. 

Credito Italiano said that it 
would pay L 19, 000 a share for a 
48.2 per cent stake in Romag- 
nola. which would take its 
stake above 50 per cent Ana- 
lysts at James Capel com- 
mented that while it was a 
hefty price to pay. and would 
be earnings dilutive, strategi- 
cally the move made sense. 
Credito Italiano, the broker 
said, was historically exposed 
to the large corporate business 
sector, and lacked a customer 
base in which it could cross- 
sell its products. This would be 
provided by Romagnola which 
had a very rich customer base, 
manag in g a lot of assets off- 
balance sheet 

The takeover could make 
Credito Italiano the country's 
largest retail operation, adding 
Romagnola ’s 400 branches to 


FT-SE Actuaries Share indices 


Oct 27 
Hntof ehangea 


THE EUROPEAN SERIES 
1100 MOO 1&00 One 


FT-SE EBrarack 100 
FT-SE Enn»*±a» 


130323 1300.95 1301.05 12S&23 130030 130132 130187 130328 
13M.7B 1357.69 1358J6 13S729 135M3 136033 1381.16 1361.02 
Oct 26 OB 25 0B 2* 0B 21 OB20 


FT-SE Enobicfc 100 
FT-SE Bronek 200 

Sum 1000 BWOW* Mg 


1300.71 1290.00 131X32 1304.75 132422 

1350.10 135047 137156 136124 1381.88 

r too- i3oi3saiD. raewsuwMriw- ustjosbo- mr.iztrmt 


its 850 outlets. 

The takeover offer would be 
conditional on securing the 
agreement of other minority 
shareholders, which included a 
4.9 per cent stake held by Cof- 
lde, controlled by the De Bene- 
detti group, and BNP, the 
French bank, which holds 6.8 
per cent. 

Credito Italiano feD sharply 
on the news, losing 1.5 per cent 
to LI ,592, but off a session low 
Of LL540. Credito Romagnola 
rose sharply, up L2.390 to 
L16.100. The news affected 
other banks: Ambroveneto 
soared 1L4 per cent to 14332 
on suggestions that it could be 
the next takeover target, while 
Bd los t 23 pe r cent to L3.3S0. 

FRANKFURT eased a little 
after the Buba meeting and the 
Dax index closed the official 
trading session 7.30 lower at 
2,013.20, but the real measure 


of the day's trading was in the 
post-bourse where the Ibis indi- 
cated Dax eventually ended 
16.92, or 0.8 per cent higher 
over 24 hours at 2,02637. 

Turnover eased from 
DM5. 5b n to DM5-2bn. Nine- 
month turnover figures from 
Daimler and Linde helped the 
carmaker and engineer up by 
DM1L5G to DM75350, and the 
forklift specialist by DM23 to 
DM886. 

Mr Adrian Phillips at Klein- 
wort Benson said that Daim- 
ler’s figures were much as 
expected but that the slightly 
better dollar might have given 
it some encouragement; Linde, 
he noted, had produced good 
figures on Wednesday after- 
noon but the stock tended to 
move little in Ibis trading, gen- 
erally reserving its reactions 
for the official session. 

Major session moves 


included a DM24 rise to DM800 
in Philipp Hnlmmno, the con- 
struction group, after Deutsche 
Bank said that it might sell Its 
25.8 per cent holding; Hochtief, 
Holzm ana's fellow construc- 
tion group, has takeover ambi- 
tions. Meanwhile Weru, the 
window frame manufacturer, 
had another setback yesterday; 
its shares, hit severely by bro- 
ker downgrades last week, fall 
DM21 to DM820; brokers said 
that an analysts’ meeting bad 
been cancelled. 

PARIS rallied on stability in 
the currency markets, 
although turnover was low as 
some investors began to wind 
down ahead of the long week- 
end holiday. The French finan- 
cial markets will be dosed on 
Monday ami Tuesday. 

The CAC-40 index rose 26.57 
or 1.4 per cent to 1,858.11 in 
turnover estimated at under 
FFr3 bn. L’Oreal, which 
reported a 6^ per cent rise in 
first-half consolidated pretax 
profit to FFr2.6bn, slightly 
below expectations, rose FFr33 
or 3 per cent to FFr1,064. 

Eurotunnel showed an 
improvement in performance 
following recent bad publicity 
surrounding the start of its 
Eurostar service as it 
announced that it had won 


Nedfloyd 


Share price and Index rebesod 

140 — a- 


AEXftidaac 


SauoK FT GraoWe 


approval from the authorities 
to extend operations to the 
weekend. The shares improved 
3 per cent to FFr19. 

AMSTERDAM saw Nedlloyd 
shares make further forward 
progress following the recent 
wave of selling and ahead of 
expectations for strong third 
quarter results next week. The 
transport group’s shares rose 
FI 2.60 to FI 54.80 while the 
AEX index rose 4.72 to 403JS7. 
Nedlloyd said yesterday that 
its shipping division, together 
with Malaysian International 
Shipping was to take over the 
French Corapagnie Generate 
Maritime's share of Europe to 


Far East shipping traffic from 
next month. 

Philips was the day's most 
active issue, gaining 80 cents 
to FI 52.50, with third quarter 
results due next week. 

ZURICH'S SMI index fall 
another 18.6 to 2,458.6. Mr 
Michael Clark of Robert Flem- 
ing Securities said that the 
strength of the Swiss franc 
against the dollar threatened 
painful currency translation 
effects on corporate earnings; 
many of the country's multina- 
tionals had large portions of 
their sales in the US currency, 
Switzerland itself offering a 
small domestic base. 

tn pharmaceuticals, Roche 
certificates tumbled SFrllO to 
SFr5,38fc In banks, the reduc- 
tion. in the UBS registered pre- 
mium continued: this class fell 
SFr7 to SFT275 while the bear- 
ers fall SFna to SFrl^ll 

One bright spot was the 
insurance sector, where Win- 
terthur Insurance rose SFrt to 
SFrfil5 on bargain hunting; 
another was the watchmaker, 
SMH, which recovered SFrfLSO 
to SFri57 after Goldman Sachs 
upgraded it to a trading buy 
from market performer status. 


Written and edited by WMam 
Cochrane and John Pitt 


ASIA PACIFIC 


Commodities lift Sydney as Japan Tobacco plunges 


Tokyo 


The market was unaffected by 
the sharp fall in Japan 
Tobacco, whose shares were 
listed yesterday, and the Nik- 
kei average closed marginally 
higher on arbitrage buying, 
writes Emiko Terazono in 
Tokyo. 

The Nikkei 225 closed up 
50.01 at 19.796J6 after a high of 
19,919.88 and a low of 19,724.44. 
Dealers bought shares on the 
first trading day for November 
settlement, while overseas 
investors also supported prices. 

Volume was 210m shares 
against 215m. The Topix index 
of all first section stocks 
gained L50 to L568.44 and the 
Nikkei 300 inched up 0.54 to 
287.14- Advances led declines 
by 479 to 461 with 221 issues 
unchanged. 

In London, the ISE/Nikkei 50 
index rose 2.30 to L292J0. 

Japan Tobacco plunged 23.5 
per cent from its public offer- 
ing price to Yl.lm. Early in the 
day, the stock failed to trade 
due to lack of buyers, but it 
changed hands in the after- 
noon at YLlOrn. Traders said 
investors who had bought 
stock at the lower end of the 
pre-offer auction were trying to 
take profits. Investors who had 
bought the stock on margin 
were also forced to liquidate 
their holdings when the offered 
price fell below YLSm. 

Traders said the focus for 
market participants was on 
corporate earnings and the cur- 
rency market now JT was 
listed. “We can now detach 
ourselves from JT." said Mr 
Yasuo UeM at Nflsko Securi- 
ties. 

Buying by overseas investors 
supported Nippon Telegraph 
and Telephone, which rose 
Y6.000 to Y892.000. But East 
Japan Railway, the railway 
group privatised last year, lost 
Y3.000 to Y480.000, and Japan 
Telecom fell Y70.Q00 to Y2L68m. 

High-technology stocks were 
supported by prospects of 
strong profits. Sharp rose Y10 
to Y1.790 and Toshiba Y6 to 
Y764. However, some issues fell 
on profit-taking, with Matsush- 
ita Electric Industrial down 
Y10 to Y1.580 and Mitsubishi 
Electric losing Y2 to Y723. 

Steel shares were firmer 
Nippon Steel rose Y2 to Y394 
and Sumitomo Metal Indus- 


tries added Y10 to Y354. Mitsu- 
bishi Oil lost Y40 to Yl.020 on 
profit-taking. The stock had 
been supported by speculative 
buying on hopes of its oil dig- 
ging project in Vietnam 
In Osaka, the OSE average 
rose 1327 to 2L96&36 in vol- 
ume of 25.3m shares. Nintendo, 
the video game maker, rose 
Y140 to Y5290. 


Australia 


All Ordinaries/; 
2,400- V 


A AS Resources 
V - 1.500 


Roundup 


Commodities-based gains in 
Australia and a continued buy- 
ers' strike in the embattled 
Taiwan equity market were the 
main features in the region 
yesterday. 

SYDNEY followed Austra- 
lia’s largest company, BHP, 
which reached an intra-day 
record high on the rosy out- 
look for mineral ores after the 
bull-run in base metals found 
new impetus on the London 
Metal Exchange on Wednes- 
day. 

BHP rose 42 cents to AS20.50 
after peaking at AS20.56. The 
All Resources index rose 18.4 
to 1.42&9, towing the All Ordi- 
naries to a gain of 14.6 at 
2.Q32JL Turnover was strong at 
A$538.im. 

The copper price, which 
jumped US$41 to a four-year 
high of US$2,627 a tonne, was 
said to be the source of BSP's 
strength, but other large min- 
ers were firmer on the back of 
much stronger base metals 
prices, and on support from 
domestic investors. GRA rose 
32 cents to A$18.90, Western 
Mining climbed 13 to A$&37, 
and ACM advanced 5 to A$?.,90. 

HONG KONG achieved a 
technical recovery but activity 
stayed thin, the Hang Seng 
index closing up 52.14 at 
9-304^8, well off its 0,341.40 ses- 
sion high as turnover 
improved marginally from 
HK$2.Q2bn to HK$?.27bn. 

Wednesday's successful test 
of 9.200 on the Hang Seng and 
Wall Street’s ability to avoid a 
heavy sell-off overnight, com- 
bined with news that Britain 
and China might be close to a 
financing agreement on Hong 
Kong’s new airport boosted 
flag gin g sentiment. 

Overseas buying boosted 
Hongkong Land, which rose 55 
cents to HE319.10. Other prop- 
erty stocks also gained, with 
Henderson Land up 40 cents at 
HK$48J3Q and. Cheung Kong by 



— 1300 


1.900 1 11 11,1 
1994 

Source Ort ati — b 


30 cents to HXJ35.90. 

WELLINGTON thanked Tele- 
com, once again, for a 12 cents 
gain an continuing demand to 
NZS5.62 which accounted for 
around 13 points of a 21.10 rise 
to 2,090.42 in the NZSE-40 


Index in turnover of NZ$47m. 

Fletcher Challenge also per- 
formed well, rising 5 cents to 
NZ$4.36, and Fletcher Forest 
closed up 1 cent at NZ$2.10 
amid speculation about foreign 
demand. 

COLOMBO'S all share index 
recovered for the first time 
after Monday's assassination of 
an opposition leader, wide- 
spread blue chip buying taking 
it up 9.41 to 1,087.56. Turnover 
rose from Rs47.2im to 
Rs 187.36m. 

TAIPEI reversed small early 
gains to close sharply lower for 
the fourth consecutive session, 
and brokers expected the mar- 
ket to remain depressed. The 
weighted Index lost 90 JO or 1.4 
per cent to 6,59437 in turnover 
of T$44.4bn. 

Financials led the fall with 
China Bills losing TS2.70 or 5.6 
per cent to TS45.90. 


Food and polyester shares 
performed relatively well, with 
Shinkong Synthetic Fibre* 
gaining 30 cents to T$26.90. 
President Enterprises 
rebounded after Wednesday’s 
fall, gaining T$1.50 to TS58. 

Hualon fell T$1 to T$18.70 
after the prosecutor's office 
started to investigate a 
T$3.35bn share payment 
default related to the group. 

MANILA declined margin- 
ally ahead of a four-day holi- 
day weekend, with Philippine 
National Bank leading the 
declines. 

The composite index finished 
18.01 lower at 3.060.25 In vol- 
ume of 2.95bn shares worth 
lJ34bn pesos. 

PNB, the country’s largest 
commercial bank, fell 4.35 per 
cent to 385 pesos on news of a 
28 per cent drop in its net 
profit to 1.2bn pesos in the first 


nine months against 1.67bn in 
the same period fast year. 

Gainers were led by Jollibee 
Foods which advanced S3 per 
cent to 15.75 pesos followed by 
Bacnotan Cement which rose 
4.6 per cent to 34 pesos. 

BANGKOK retreated but 
brokers expected the market to 
make headway today after the 
Bank of Thailand announced 
that Inflation was under con- 
trol and stringent monetary 
measures were now unneces- 
sary. The SET Index slipped 
1234 to 1,501.73 after fluctuat- 
ing between 1.495.41 and 
L518.90 in turnover of Bt8.1bn. 

Bank of Thailand officials 
said the bank was sticking to 
its earlier estimate of a 4.8 per 
cent growth in the consumer 
price index for 1994. 

The finance sector was the 
biggest loser, falling 2.1 per 
cent on Btl-2hn turnover. 


Die Fundus-Gruppe 


Real Estate Investment Management 



=rcr -jt 


• . • iv. 





M w uJiJlIOLir ml imM 


JiLJIL 




An exclusive offer for a share of Germany: 
HOTEL ADLON 

Berlin, Unter den Linden, at the Brandenburg Gate 


Jointly compiled by The finance Times Ltd. Goldman. Sachs & Ca and NatWes t Securities Ud. fci conjunction wflh the Institute ol Actuaries and the Faculty at Actuaries 
NATIONAL AND 

REGIONAL MARKETS WEDNESDAY OCTO BE R 88 1994 TUESDAY OCTOBBl 26 1994 DOLLAR INDEX - 


REGIONAL MARKETS 
Figures In parentheses 
show number of Inee 
of stock 


□ay's Pound 


Local Local Qoss 


TUESDAY OCT OB ST 26 1994 

US Pound 


Australia {66) 

Austria (IQ .. 

Baigun (35) 

Canada (103) 

Danmark (33)_ 

Maid 134) 

France (101) ...... 

Germany (68) — 

Hong Kong (56).. 

Inland (14) 

Italy (59) - 

Japan (488) 

Malaysia (97) 

Mexico (IS) 

Natneriand (19),.. 

Naw Zealand (14) 

Norway (23) 

Singapore (44) 

South Africa (59) 

Spain (38) 

Sweden (36) 

Switzerland 

United Kingdom (204)... 
USA (515) 


171 JO 

179.98 

188.08 

13821 

267.03 

198.71 

16038 

142.98 

37B.14 

207.18 

77.06 

161.94 

644.50 

2124.00 

21029 

7433 

— 208.09 

396.82 

.339.40 

139.87 

.241.76 

162,98 

19SL23 

IBS. 84 


Change 

K 

Storing 

Index 

Yen 

Index 

DM 

Index 

Currency 

Index 

% che 
on day 

Dtv. 

Yield 

Doflnr 

Index 

SWrtnfl 

Index 

Yen 

Index 

03 

15535 

105.07 

133.17 

153.47 

-03 

332 

17041 

15427 

10434 

-03 

163.44 

110.40 

13992 

140.08 

02 

1.15 

18022 

18323 

11023 

02 

153.54 

103.71 

13134 

12829 

03 

420 

16075 

15236 

10322 

04 

123.78 

6331 

105.97 

13238 

02 

2.55 

135.79 

123.00 

83.14 

0.5 

£33.41 

157.86 

19931 

204.14 

0.7 

1.45 

255.76 

231.88 

15629 

0.9 

180.45 

121.89 

154.46 

189.15 

08 

0.74 

19731 

17a 45 

12062 

0.1 

151.07 

10234 

129.33 

13336 

03 

325 

188.16 

15022 

101.73 

13 

12934 

87.70 

111.15 

111.15 

1.7 

1.86 

14088 

127.80 

8024 

0.1 

341.57 

230.72 

292.42 

373.17 

0.1 

323 

37591 

34023 

23018 

0.7 

188.12 

12737 

18135 

180.60 

07 

320 

205.68 

18032 

12533 

03 

6997 

4726 

5990 

8792 

0.4 

1.78 

78.79 

8928 

4732 

-0.3 

147.06 

9933 

12530 

99.33 

-0.1 

0.77 

162.38 

14739 

99.42 

-02 

494.46 

33338 

42330 

535.02 

-Ol 

127 

545.78 

494-40 

334.18 


DM i 
Index 

Local 

Currency 52 week 52 week 
Max l-Rgh Low 

Year 

ego 

(eoprox) 

132.19 

15330 

189.15 

14928 

155.01 

140.02 

14008 

198.89 

167.48 

17723 

13039 

12733 

17734 

14923 

16024 

10523 

13238 

14521 

12024 

131.15 

19829 

20238 

275.79 

23027 

23825 


JAGDFELD HOTEL ADLON 
FUNDUS FONDS 31 KG 

Securities identification number 9S1361 


-2-4 192B.49 

03 196.41 


0.6 67.80 

-02 187.14 


-0.1 380.17 

0.3 309.21 


-Ol 126.83 

0.3 219.54 


-0.9 148.00 

-03 18091 


130028 1651.79 795080 
132.es 16014 16046 
4559 S7.79 84.38 

12041 18021 18121 

24328 30034 209.14 

20018 263.85 29228 
85.87 10058 131.74 
14829 18725 252.98 

0497 12070 12626 
12220 15428 18021 

11623 14620 18084 


217B29 1971.68 133065 
215.73 195.42 132.00 

7092 8098 4620 

20044 107.00 126.39 

38091 359.56 24332 

338.46 30069 207.23 

139.83 12067 85.61 

24125 21036 147.59 

184.47 14829 10070 

199.60 18028 12233 

18833 17060 11631 


152.81 18736 200,40 11635 

12088 133.17 16537 16934 

10028 10926 15040 12037 
29130 37234 50636 34129 

15934 17931 21060 171.68 
5056 87.60 97.78 5738 

12095 99.42 170.10 12434 

42338 535.68 821.63 430.71 
168832 815737 284728 169628 
16734 16430 219.75 187.01 


Limited liability partnership capital 

425,000,000.- DM 


Basis for participation issuance is the brochure. 


For discriminating investors: 

FUNDUS FONDS are available in all German cities. 
Please ask for information at your local bank. 


EUROPE (707) 

Morale (116) 

Pacific Badn (747) 

Euro-Paafa (1454).., 

Norm Amoks (818) ........ 

Europe Ex. UK (503) 

Pacific Ex. Japan (279) 
World Ex. US (1634) 

WOdd Ex. UK (1945) 

World Ex So. Al. (2090) 
World Ex J^xn (1681) „„ 


171.48 

23328 

171.04 

■*.—171.10 

__1B5.se 

15234 

25980 

173.07 

175.15 
-,—.17622 
— I — 107.51 


11O01 -o.l 
124.74 0.1 


230.44 -0.1 
12831 0.1 


FUNDUS FONDS- VERWALTUNGEN GMBH 
Hohenstaufcnring 57 • 50674 Cologne 


174.99 02 


-OttVMd Index gi4q 17727 0.0 160.98 108.73 137.81 147.05 


G®*** 1 - ssclt* and Co. and twww Swurttos Luted. 1S07 
uout prion won unaatme tar ma Mten Auafen mate) dosed arum 


158.85 189.38 


AACHEN . BERUN . BONN ■ DRESDEN . FRANKFURT ■ HAMBURG . K0..N . LEIPZIG . MUNCUFN . MUNSTER -STUm. 


SrUTYUMtl ATLANTA