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French corruption 

Steps to counter the back- 
, lash against business 

Page 13 




Banana split 


srflL EU’s import plans 
Jm run into trouble 


Page 14 



Beirut's revival 

Lebanon's capital 
back on the map 

10 & 15 



Usinsk spotlit 


Where oil spills are a 
wet)' of life 

Pages. 




FINANCIAL TIMES 


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Bosnian Serbs 
declare state of 
war after reverse 

Bosnian Serb leader Radovan Karadzic declared a 
full-scale state of war after Serb forces suffered 
their greatest setback since fighting began in Bos- 
nia. Bosnian government forces continued their 
offensive in the north-west of the country, raising 
fears of a Bosnian Serb counter-attack against 
Bihac, the Moslem enclave which is one of six UN 
safe areas in Bosnia, "if the pocket is attacked, the 
UN will have no choice but to request Nato air sup- 
port.” a UN spokesman said. Page 2 

US midterm election outlook: A few 

closely-watched races in the US midterm elections 
may be turning in favour of the Democrats, but the 
trend may not be enough to stop big Republican 
gains, including control of the Senate. Page 16; Bal- 
lot initiatives stir up voters. Page 5 

Deutsche Telekom: Germany is set to announce 
which banks are to play leading roles in the privati- 
sation of Deutsche Telekom, with Goldman Sachs. 
US investment bank, the most likely candidate to 
handle the international placing. Page 17 

US rail bid battle intensifies: Union Pacific. 

US railway company, raised its bid for Santa. Fe 
Pacific to $20 a share or about $S.Sbn. It said its 
revised bid was more than 16 per cent higher than 
Burlington Northern Inc’s latest offer, valued at 
817.13 a share or $&2hn. 

Frefimo heads for Mozambique poll win: 

Mozambique last night 
seemed within reach of a 
lasting peace when the 
country's former rebel 
leader. Afonso Dhlak- 
ama, the head of Ren- 
amo, indicated he would 
accept the outcome of 
the country's first 
multi-party elections. 
Early results suggested a 
comfortable victory for 
the ruling Frelimo party 
led by President Joaquim Chissano (above). Page 4 

White House shooting: The Clinton 
administration seized on Saturday’s White House 
shooting to underscore its arguments that President 
Bin Clinton was right to have pushed for bans on 
semi-automatic assault weapons. Page 5 

Union Bank of Switzerland: is again urging Its 
22.000 Swiss employees to vote their shares in sup- 
port of the directors in their proxy fight with Zurich 
_ broker-fund manager MarflnEbner overtiie'hank's 
strategy. - Page 17 

Search for OECD chief in disarray: The 

search for a new secretary -general of the Organisa- 
tion of Economic Cooperation and Development is 
again in disarray, with several new options being 
discussed by the 25 member countries of the Paiis- 
based research body. Page 5 

Abtfnes attack departure tax: The 

International Air Transport Association said the 
introduction from tomorrow of an airport departure 
tax in Britain was an example of government taxa- 
tion policies undermining the recovery of the air- 
line industry. Page 7 

Major supports cabinet colleague: UK prime 
minister John Major offered strong backing for 
Treasury chief secretary Jonathan Aitken as the 
government prepared for a confrontation in parlia- 
ment over allegations of ministerial sleaze. Page 7 

China shows confidence abroad: China’s 
leaders begin a series of foreign missions this week 
in a virtually unprecedented show of diplomatic 
zeal that underscores China's growing self-confi- 
dence internationally. Page 4 

Trade mark changes: British businesses will be 
able to register three-dimensional shapes, sounds 
and gropttc as trademarks for the first time today as 
new trade mark legislation comes into force. Page 7 

European Monetary System: There was no 
change in the order of currencies in the EMS grid 
last week, nor in their relative strengths, as the 
Bundesbank council held its interest rate policy 
steady. The Bank of Portugal trimmed two money 
market rates, with the regular rate for draining 
funds falling to 8.5 per cent from 8.75 per cent 
Currencies, Page 27 



EMS: Grid 


October 28. 1994 



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x change rate mechanism measured against t he 
wakest currency in the system. Most of the curren- 
ies can fluctuate within IS per cent of agreed antral 
ates against the other members of the mechanism. _ 
Vhe exceptions are the D-Mark and the guilder which 
novc in a narrow 2.25 per cent band. 

-avrsufts grow over Backings: Companies 
rith US operations are being hit by a_ spate of 
mployment discrimination lawsuits in the wake of 
tidespread corporate ‘‘downsizing’’. Page 5 

Htpe names 30 cardinals: Pope John Paul n 
tominated 30 new cardinals, broadening the intar- 
lational base from which a future pontiff will be 
hosen. Pages 


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Mark Thatcher deal supported by Tory backers 


By WHIiam Lewis in London 

Mr Mark Thatcher, the son of former 
prime minister Baroness Thatcher, 
secured backing for one of his biggest 
US investment deals from some of his 
mother's closest business support- 
ers. 

Hanson, the UK-quoted conglomerate, 
and Mr Li Ka-Shing, the Hong Kong 
billionaire - both of whom have been 
substantial donors to the Conservative 
party - invested in a US business con- 
sortium put together by Mr Thatcher 
and his then partner. Mr Bruce Leadbet- 
ter. 

Hanson said it has lost $130,000 on its 
investment of $400,000 made in the late 


1980s. Mr Martin Taylor, a vice-chairman 
of Hanson, said last week; “We knew 
that Mark Thatcher was involved when 
we agreed to make the investment It 
was the only time we invested with 
him." 

Mr Thatcher denied that he had 
exploited his mother's connections. He 
said; “If the whole thing was funded by 
the Who’s Who contributors to the 
party, then that would have been a dif- 
ferent game. But for them to subscribe 
to two-fifteenths of the investment. I do 
not regard that as significant” 

Other investors in Emergency Net- 
works. a Dallas-based home security 
company in which Mr Thatcher and his 
partners invested, included Mr Bruce 


Babbit currently US interior secretary, 
and Mr Jay Prtizker. one of the owners 
of the Hyatt Hotel chain. 

Meanwhile, in the first detailed inter- 
view on his affairs for several years, Mr 
Thatcher poured cold water on wide- 

The Mark Thatcher Affair Page 6 

spread reports that he is worth tens of 
millions of pounds. “It would, be signifi- 
cantly wrong to conclude that I am 
worth more than £5m,” he said. “There 
is just nothing to support it apart from 
Innuendo." 

Conservative party officials have 
pointed to his US interests as the main 


source of Mr Thatcher's wealth. They 
were rebutting allegations that he 
exploited his position as the only son of 
the then British prime minister to earn 
commissions from defence sales. 

A Financial Times analysis of his US 
business interests, based on company fil- 
ings and court documents, has found 
little evidence of significant earnings 
from his US activities. On the other 
band, these activates have been coloured 
by two corporate collapses. litigation 
and boardroom rows. 

In the interview. Mr Thatcher reiter- 
ated his denial that he received a com- 
mission from the S20bn AJ-Yaraamah 
defence contract signed in 1®» between 
the UK and Saudi Arabian governments. 


He confirmed that he is a friend of Mr 
Wafic Said, the millionaire businessman 
who acted as a go-between on the UK 
side of the Al-Yaraamah talks in the 
mid-1980s. However. Mr Thatcher said: 
“Merely because I know this man does 
not mean to say that he is going to pay 
me £l2m because I am a nice guy." 

He said his latest foreign venture was 
in Azerbaijan, the former Soviet repub- 
lic. Mr Thatcher said: "This whole idea 
that I have had tremendous success is 
just a myth. 

“If 1 had tremendous success 1 would 
not be running around trying to do the 
things that I am doing. I would be sit- 
ting on my own private island in the 
South Pacific, but I am not." 


UK commissioner considers resigning after loss of eastern Europe portfolio 

Brittan urged to stay in EU post 







Incoming European Commission president Jacques San ter (centre) is surrounded at the Sennigen Castle, Luxembourg, by the commissioners to whom he has given portfolios hm» 


By Lionel Barber in Luxembourg 
and Philip Stephens In London 

Mr John Major, the British prime 
minister, made a direct appeal at 
the weekend to Sir Leon Brittan 
to stay on as the senior UK com- 
missioner in Brussels after Sir 
Leon narrowly lost a battle to 
retain responsibility for eastern 
Europe in his portfolio. 

Sir Leon will decide in the next 
few days whether to resign his 
post, close associates said yester- 
day. He is said to be crestfallen, 
and is considering all options, 
including a return to British poli- 
tics. His aim would be to press 
the case for a more pro-European 
policy in Britain, associates said. 

But pressure is mounting on 
Sir Leon to stay in his job, which 
still includes responsibility for 
multilateral trade negotiations 
and relations with the leading 


■ Banter's choice packs a 
political punch 

■ Brittan falls victim to his 
own cleverness and power 

Page 15 

■ Editorial Comment 


Asian economies and the world's 
industrialised nations. 

Amid obvious irritation at 10 
Downing Street and private 
acknowledgement that the Brit- 
ish government's influence in 
Brussels had been diminished, 
Mr Major told Sir Leon that he 
was “disappointed” by the share- 
out of portfolios made by Mr Jac- 
ques Santer, the incoming Com- 


mission president. Mr Major 
added in a telephone conversa- 
tion with Sir Leon that his 
responsibility for trad? relations 
with the developed world, includ- 
ing Japan and the US. was “cru- 
cially important”. 

The conversation came as Brit- 
ish ministers echoed the implicit 
annoyance at Mr Santer's deci- 
sion. The early admission of for- 
mer communist countries to the 
Union is a central plank of Mr 
Major's overall strategy towards 
the development of the EU. 

Tory Euro-sceptics warned that 
the choice of Mr Hans Van dec 
Broek of the Netherlands to over- 
see enlargement to the East 
heightened the risk of a confron- 
tation between London and Brus- 
sels at the 1996 intergovernmen- 
tal conference. One, Mr James 
Cran, described Mr Santer's deci- 
sion as a “slap in the face” for 


those in the UK who wanted a 
wider rather than a deeper EU. 

There was also a suspicion 
among Tory MPs that Mr Santer. 
whose candidacy for the presi- 
dency was supported by Britain 
after Mr Major had vetoed the 
choice of Mr Jean-Luc Dehaene, 
the Belgian prime minister, had 
been under pressure to prove his 
“independence” from London. 

But Mrs Pauline Green. leader 
of the Socialist group in the 


European Parliament, accused 
Sir Leon of “behaving like a 
spoilt child” after he hinted he 
might resign. “Sir Leon Brittan is 
clearly motivated by personal 
greed and ambition. He is not 
prepared to be a team player,” 
she said. 

Arguments over the division of 
external relations responsibilities 
in the new European Commission 

Continued on Page IB 


Volvo to 
expand 
truck 
operations 

By Kevin Done in London 


Volvo, the Swedish car and 
commercial vehicle maker, is 
embarking on a far-reaching 
expansion of its truck operations 
in Europe and Asia. 

The ambitions moves, which 
include the development of a 
range of trucks to allow it to 
enter the European light track 
market for the first time, result 
from a fundamental review of 
global strategy started after the 
collapse of the group’s planned 
merger with Renault nearly a 
year ago. 

Volvo, the world’s second-larg- 
est heavy trackmaker (above 15 
tonnes gross vehicle weight), 
behind Mercedes-Benz of Ger- 
many, Is focusing corporate 
development on its automotive 
operations with the divestment 
of most other activities. 

As a key part of this strategy, 
it plans to: 

• Expand the capacity of its 
heavy truck operations in 
Europe by up to 20 per cent by 
mld-1996, with the investment of 
more than SKrlbn (8140m). 

• Develop a range of light 
trades (7.5 tonnes gross vehicle 
weight) to allow it to challenge 
established rivals such as Mer- 
cedes-Benz, Iveco, MAN, Renault 
and Daf In this segment of the 
European market. 

• Establish a joint venture in 
China with the aim of adding a 
production centre in Asia to 


Continued on Page 16 


Closure of West Bank and 
Gaza to be eased by Israel 


By Mark Nicholson, Julian 
Qzanrte and Francis GhSte in 
Casablanca 

Israel has agreed to begin lifting 
the closure of the Gaza Strip and 
West Bank from tomorrow, eas- 
ing the plight of more than 60.000 
Palestinians denied access to 
their Israeli workplaces. 

Yesterday's move came as 
senior Israeli, Palestinian and 
European Union officials started 
the Middle East and North Africa 
economic summit in Casablanca 
with an urgent review of the eco- 
nomic crisis threatening the Pal- 
estinian peace process. 

The move was the first practi- 
cal step taken at the three-day 
conference opened last night by 
King Hassan of Morocco. The 
gathering of 10 heads of govern- 
ment. 450 government officials 
and 1,100 business leaders from 
60 countries is aimed at evolving 
new regional, financial and eco- 
nomic institutions after Israel's 
recent peace agreements with the 


Palestinians and Jordan, while 
encouraging private-sector 
investment in cross-border and 
regional development projects. 

Mr Shimon Peres. Israel’s for- 
eign minister, said a gradual eas- 
ing of the Gaza and West Bank 
closure, enforced after the recent 
Hamas bombing of a civilian bus 
in Tel Aviv, was agreed after 
talks between Mr Yassir Arafat, 
chairman of the Palestine Libera- 
tion Organisation, and Mr Yit- 
zhak Rabin, Israel's prime minis- 
ter. 

From tomorrow, women. Pales- 
tinian men over 30 and those vis- 
iting hospitals would be permit- 
ted to cross into Israel. 

In later talks between Mr Jac- 
ques Delors, the European Com- 
mission president, Mr Arafat and 
Mr Abraham Shohat. Israel's 
finance minister, the EU agreed 
to examine the holding up of 
European funds for Gaza and the 
West Bank. 

The EU has so far disbursed 
only $20m of 8120 m pledged to 


CONTENTS 


the Palestinian Authority. 

The conference will close 
tomorrow with preparations for 
new regional institutions and 
steps towards the creation of a 
SlObn regional development 
bank. 

This would mark the start of 
what Crown Prince Hassan. head 
of the Jordanian delegation, 
described as a “Middle East com- 
mon market from the Atlantic to 
the Gulf" with a collective GNP 
of £580bn. 

Mr Warren Christopher. US 
secretary of state, said Washing- 
ton would call for the adoption of 
principles leading to the "free 
movement of goods, capital, ideas 
and labour” across the borders of 
North Africa and the Middle 
East, establishment of the devel- 
opment bank, creation of a 
regional tourism authority and a 
regional business council 

Moroccan privatisation. Page 4 
White House and Casablanca, 
Page 15 



THE LINK BETWEEN THE PAST 
AND THE FUTURE 


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nmr--HT TnviESUMrrta 1W 4 No 32.SH Weak No 44 LONPOH ■ PARIS • FRANKFURT ■ NEW YORK - TOKYO 



Q 

OMEGA 

The sign of excellence 


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financial times 


MONPAY OCTOBER 3 1 1994 



NEWS: EUROPE 


FT writers examine the line-up at the European Commission after the struggle to divide up portfohos 

Sir Leon felled in assault on his cleverness and power 


By Lionel Barber in Luxembourg 

Shortly after Mr Jacques San ter 
was appointed president of the 
European Commission, a senior 
Brussels diplomat delivered a 
friendly warning to Sir Leon Brit- 
tan. “Of all the Commissioners, you 
have the most to lose under Mr San- 
ter." 

Sir Leon was taken aback. One of 
the stars of the outgoing Delors 
Commission, he found it hard to 
believe that Mr Banter would not 
wish to make the most of his tal- 
ents. 

The diplomat agreed, but pointed 


out that Sir Leon risked being seen 
as too clever - and too powerful - 
for his own good in the incoming 
Santer Commission. 

On Saturday afternoon, the warn- 
ing came true. Sir Leon, chie f EU 
trade negotiator, found himself 
stripped of the plum portfolio of 
central and eastern Europe, and 
pondering resignation. It is a stun- 
ning turnaround for a politician 
who was acclaimed a year ago as 
one of the architects of the Gatt 
Uruguay Hound agreement and who 
had contemplated a hid to become 
C ommiss ion president 

Sir Leon's fall from grace may be 


viewed as an inevitable come-upp- 
ance for someone who has never 
been a team player in Brussels. His 
caustic comments, razor-sharp intel- 
lect, and appetite for work have 
prompted jealousy as much as 
a dmir ation among colleagues (with 
the exception of Mr Jacques Delors 
with whom be has much in com- 
mon). 

Sir Leon also misplayed his cards 
during negotiations over his new 
portfolio with Mr Santer. Colleagues 
such as Mr Manuel Marin, the 
senior Spanish commissioner, and 
Mr Padraig Flynn, Irish Commis- 
sioner. curried favour by offering to 


surrender portions of their fief- 
dams; but Sir Leon offered too little, 
too late. He also underestimated the 
Santer team's determination to end 
the division between economic and 
political affairs in the new Commis- 
sion. 

Thus, Sir Leon's opening offer 
was to give up the Northern Medi- 
terranean, Turkey, Cyprus, Malta, 
and economic relations with former 
Yugoslavia; then he upped it to all 
of Asia, excluding Japan. On Satur- 
day afternoon, he proposed giving 
up everything, including the power- 
ful trade instruments, if he could 
keep relations with central Europe 


and the former Soviet Union. 

Colleagues concede the gesture 
made little sense because it under- 
mined Sir Leon’s chief argument; 
that the eastern European dossier 
largely turned on economics and 
trade rather than politics and secu- 
rity, the speciality of Mr Haws Van 
den Broek, the Dutch commissioner 
who eventually won the day. 

Yet Sir Leon was also the victim 
of events beyond his control. The 
decision to reward Mr Van den 
Broek was driven by the need to 
compensate the Netherlands after 
France and Germany snubbed Mr 
Ruud Lubbers, the outgoing Dutch 


prime minister, in his bid to suc- 
ceed Mr Delors as Commission pres- 
ident 

Neither German commissioner 
supported Sir Leon on Saturday 
afternoon - a surprise since the 
Bonn government continues to 
admire his contribution to integrat- 
ing central and eastern Europe into 
the EU. Was it just an accident that 
Mr Wim Kok, Dutch prime minister, 
had paid a visit to Chancellor Hel- 
mut Kohl just days before the Lux- 
embourg meeting? 

Sir Leon also appears to have suf- 
fered from lingering resentment 
over the British veto of Mr Jean-Luc 


Debaene. the Belgian prime mims- 
STwbo was the Franco^Gennan 
candidate to succeed Mr Delore, at 
last June's European summit in 

^Tbe veto -won Mr Joh n Maj or. 
British prime minister, a reprieve 
within his ruling Conservative 
party It also propelled a reluctant 
Mr Santer into the top Commission 

^However, it left Mr Major little 
leverage when it came to pleading 
Sir Leon’s case with European allies 
- and Mr Santer. "Corfu was art 
without cost," said a colleague of 
Sir Leon. 


Santer’s choice packs a political punch 

Future president’s priority was a Commission that worked as a team, writes Lionel Barber 


N obody said it was going 
to be easy. But after a 
day of tough talking 
inside Seninngen Castle in the 
Grand Duchy of Luxembourg, 
Mr Jacques Santer emerged 
with a deal on the division of 
portfolios in the new expanded 
Commission. 

The agreement boosted the 
authority of Mr Santer, a last- 
minute compromise candidate 
earlier this year to succeed Mr 
Jacques Delors as president of 
the Commission; but the cost 
could prove high if a disgrun- 
tled Sir Leon Brittan carries 
out his threat to resign after 
being stripped of his most 
prized portfolio, eastern 
Europe. 

The question is whether Mr 
Santer - known as the man 
who never says No in his 
native Luxembourg - pursued 
an early deal at the expense of 
downgrading one of the few 
effective performers in the out- 
going Delors Commission. 

Supporters of Sir Leon leave 
no doubt that their commis- 
sioner was treated poorly, with 
little regard to his track record 
in championing closer rela- 
tions with central and eastern 
Europe, perhaps the most 
important task for the EU over 
the next five years. 

"On a conservative estimate. 
Sir Leon's workload drops 30 
per cent,” says one supporter. 
"It could be as high as 60 per 
cent.” 

Those more sympathetic to 
Mr Santer argue that the presi- 
dent-designate tried everything 
to broker a deal between Sir 
Leon and Mr Hans van den 
Broek, the Dutch commis- 
sioner who is the big winner in 
Saturday's share-out of respon- 
sibilities in external relations. 

“We went through all sorts 
of different options," said a 
senior Santer aide, "but the 
eastern European dossier 
turned into a beauty contest” 
Under the deal, Mr Van den 
Broek gains control of eco- 
nomic and political relations 
with central and eastern 
Europe, as well as retaining 
responsibility for the common 
foreign and security policy, 
subject to the authority of 
President Santer. 

Sir Leon retains control of 
his multilateral trade dossier, 
which includes the setting-up 
of the new World Trade Organ- 
isation, as well as relations 
with North America, Australia, 
New Zealand. Japan, China, 
South Korea. Macao and 
Taiwan. 

Mr Santer made clear on Sat- 
urday evening that his overrid- 
ing concern was to ensure that 
the new Commission works as 
a team when it moves into 
office next January, p ending a 
vote of approval from the Euro- 
pean parliament. 

He also sought to assert his 
authority by selecting three 
areas in which he intends to be 
primus inter pares: common 
security and foreign policy; 
preparations for monetary 
union; and institutional issues 
ahead of the 1996 inter-govern- 
mental conference to review 
the Maastricht treaty. 

Mr Santer said the need to 
end personal fiefdoms was 
even more urgent now that the 
Commission was expanded 
from the present 17 commis- 


UE FINANCIAL TIMES 
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4 41, Fa* 33 93 53 35. 



Efforts to curb 
sleaze have a 
hollow ring 

Corruption measures still leave 
loopholes, argues Emma Tucker 


Edhh Ctbssoh. 60 Martin Bangamann. 59 . "j,-# Mario Monti. SI 

Science & research, Industry, information *«■.« Internal market, fnandal 

trai ni ng, competitiveness /•’ technology, ; ‘ % sendees, taxation 

’"s' 1 -: telecommunications 


Manuel Marin, 45 
Latin America, 


I ■ " 

V. 
1 

m 

; Sr Leon Brittan, 55 
ys MiiSataral trade, relations -- 


Jacques Santer, 54 
President 



MecStenaneen, Mldtfe v “f;. with dev e loped countries ; 
Pam Asia 


• Yves-TNhaultdeSiguy.46 
• Economic & monetary 
affairs 


Monika Wulf-Mrthies, 52 ■+.£. Emma Bonlno. 46 
Regional aid 


Consumer affairs, 
: i": humanitarian aid 



Marcefino Oreja. 59 
Institutional affairs, 
•*v culture, media 


Nefl Kkinock, 52 
Transport 




!! V;p<A 1 ' "i ' ■ V=: 







The newcomers: Austria and Finland have voied to join, Sweden 
and Norway vote next month on whether to accede in January 


Karel Van Miert 52 
Competition 


j'ii. Rltt Bjerregaard, 53 
Environment 


_ 


; ".U= Padraig Flynn. 54 

Employment, social pofcy ■ ,1, 


ttVikiiiSSS r -:i: 



Christos Papoutais. 41 ' Hans van den Broek, 57 

Energy, smafl companies, ‘ . Cantral & eastern Europe 
tourism 


Joao de Deus PWieiro. 59 j ^ 
: . Retadora with developing ■ } 

. countries : -' 







55 


sioners to 21, assuming that 
Sweden and Nonray join Aus- 
tria nnri F inland in approving 

EU membership in next 
month’s referendums. 

Most Brussels insiders agree 
that Mr Santer - egged on by 
his influential chief of staff Mr 
Jim Cloos - was right to aid 
the artificial division between 
political and economic affairs 
inside the Commission’s exter- 
nal relations apparatus, and to 
adopt a division on geographi- 
cal lines. 

The divisions led to constant 
sniping between supporters of 
Mr Van den Broek and Sir 
Leon in Brussels. Abroad, it 
led to two commissioners land- 
ing in successive weeks in east- 
ern European capitals to talk 
policy. 

Yet the row over Sir Leon’s 
treatment risks obscuring a 
broader judgment about the 
new Commission, its organisa- 


tion and its likely future direc- 
tion. As Mr Santer noted on 
Saturday, even the harshest 
Euro-sceptics cannot accuse 
the new Commission of being 
packed with bureaucrats. It is 
highly political: a former prime 
minister (Mrs Edith Cresson of 
France) sits alongside a man 
who almost became prime min- 
ister (Mr Neil Kinnock, the for- 
mer UK Labour party leader). 
There are also five women, up 
from one in the outgoing 
Delors Commission. 

None of the women is a 
shr inking violet Ms Ritt Bjer- 
regaard, who wins environ- 
ment and nuclear safety in 
eastern Europe, enjoys a formi- 
dable reputation in her native 
Denmark; so too. Ms Anti G ra- 
dio. the Swedish diplomat, and 
Ms Monika Wulf-Mathies, the 
German trade union leader. 
Watch out for Ms Emma Bon- 
ino, the Italian abortion rights 


activist who will handle the 
hitherto neglected consumer 
affairs dossier. 

A second leitmotif is Mr San- 
ter’s calculated effort to win 
Yes votes in the referendums 
in Scandinavia. Norway is 
rewarded with the fisheries 
portfolio, a vital national inter- 
est. Sweden wins the increas- 
ingly important judicial and 
immigration portfolio. 

Mr Santer has also shown 
sensitivity to France which 
was worried about losing influ- 
ence with the departure of Mr 
Delors. Mr Yves-Thibault de 
Silguy, a technocrat, takes 
over the plum job of economic 
and monetary affairs, putting 
him at the centre of the plan to 
create a single currency by the 
end of the century. 

Mr Mario Monti, the distin- 
guished Italian economist, will 
take charge of the single mar- 
ket, including fiscal policy and 


capital movements; while Mr 
Kinwnrk, who has never held a 
ministerial post, is delighted 
with the transport portfolio 
which includes the planned 
multi-billion Ecu rail and road 
trans-European networks. 

At first sight the choice of 
Mr Franz Fischler of Austria to 
take over the agriculture dos- 
sier is surprising. Few could 
have expected a new member 
state to take charge of agricul- 
ture which accounts for more 
than half of the Ecu70bn 
(£55hn) budget 

But no-one showed much 
interest in taking on a job 
which is bound to involve fur- 
ther unpopular reforms in the 
next five years, partly to pre- 
pare for the entry of the cen- 
tral European countries at the 
turn of the century. So Mr San- 
ter handed the job to Mr fis- 
chler, an old political ally. 

Despite the call for coftegial- 


ity. it is possible to predict fric- 
tion in some areas. Mr Padraig 
Flynn, the wily Irishman who 
runs social policy, is uneasy 
about Mrs Cresson running 
training and education. 

Nor were some commission- 
ers delighted that the 10 social- 
ist and social democrat com- 
missioners met ahead of the 
Saturday session in Luxem- 
bourg. 

Yet the real test will be how 
Sir Leon intends to work with 
Mr Van den Broek, should he 
decide to stay on. Those who 
know him predict that Sir Leon 
would find it impossible to 
resist carving out a role in cen- 
tral and eastern Europe, using 
his commercial trade instru- 
ments. 

In that case, Mr Santer, who 
left most of the dirty weak to 
Mr Cloos during the portfolio 
negotiations, would have his 
authority tested to the full 


W ith the British House 
of Commons facing 
almost daily allega- 
tions of parliamentary dishon- 
esty, and corruption stories 
steadily from France 
and Italy, Europe’s commission 
and parHamant are addressing 
how best to avoid such accusa- 
tions themselves. 

The parliament is not In a 
promising position. Recent 
reports have tainted it with an 
image of generous ineffi- 
ciently-administered expenses, 
corporate goodies dished out 
by zealous lobbyists, and thin- 
ly-justified overseas trips taken 
at the taxpayers' expense. 

Mr Klaus Haensch. the par- 
liament’s president, says it 
needs to put itself in an ‘irre- 
proachable" position, and this 
week announced measures to 
slash expenses. 

“The situation has become 
untenable for cost reasons and 
for the image of the parliament 
abroad, ” he said, outlining pro- 
posals to cut the number of 
meetings parliamentary com- 
mittees can hold outside either 
Strasbourg or Brussels to one 
every four years from one 
every year. 

He has also proposed that 
the Size of delegati o ns vis iting 
non-EU countries be halved. 
The two measures, he says, 
wfll save EcuJLSm (£4B2m). 

But even if the parliament 
smartens up its image on 
expenses, socialist MEPs are 
arguing that arrangements for 
declaring interests are not suf- 
ficiently stringent 
There is a mandatory regis- 
ter of financial interests, but it 
is not published as a parlia- 
mentary document and is 
therefore not widely circulated. 
Any European who wants to 
check his or her MP*s interests 
has to travel to Strasbourg or 
to Brussels to transcribe infor- 
mation by hand. Photocopies 
are not permitted. 

Secondly, the Socialist group 
argues that not enough detail 
is mitered in the register. An 
MEP has to declare for whom 
be or she is working, but not 
what the work is. 

Further, according to Mr 
Glyn Ford, Socialist spokes- 
man on parliament rules, only 
direct financial interest has to 
be declared. Friendly associa- 
tions with foreign countries, 
which result in all-expenses 
paid holidays, for example, are 
not recorded. 

“I would like to know these 
thing* when evaluating mem- 
bers' speeches," says Mr Ford. 
“If someone is giving his opin- 
ion on what is going on in East 
Timor, then an all expenses 
paid trip to Indonesia is rele- 
vant” 

Meanwhile, the parliament is 
discussing how best to ensure 
that Europe’s 21 new commis- 
sioners, due to take office early 
next year, do not harbour polit- 
ical or financial co nflic ts of 
interest 

Commissioners have always 
had to take oaths ahead of 


their period in office, declaring 
their full independence and 
promising not to seek earnings 
from any other source. This led 
to certain commissioners relin- 
quishing obvious interests. For 
example, Mr Abel Matutes, the 
former Spanish commissioner, 
handed over control of his 
hotel group to his brother 
before going to Brussels. 

This time, the parliament is 
determined to use the extra 
powers granted to it under the 
Maastricht treaty, to vet thor- 
oughly the incoming commis- 
sioners. As a result, the 
appointees will be asked to 
answer questions in public and 
on the record for the first tuna 

Parliament points out in a 
set of recommendations 
adopted by its committee on 
institutional affairs that this 
process will be the "only demo- 
cratic dement" in chhosing the 
new commissioners, who are 
appointed by the governments 
of the member states. 

The vetting is likely to 
involve a severe grilUng by the 
appropriate parliamentary 
committees, “ft will not mean 
US-style teams of private inves- 
tigators," says Mr Julian 
Priestly, secretary general of 
the Socialist group. But fairly 
elaborate and even aggressive 
tactics are envisaged. 

The co mmi ttee on institu- 
tional affairs’ recommenda- 
tions says that particular 
importance will be attached to 
"guarantees of independence", 
including the need to ensure 
that the prospective commis- 
sioners are "genuinely Inde- 
pendent from the nafa'rmfli gov- 
ernments that nominated them 
and also, that there are no 
potential financial conflicts of 
interest". 

One recommendation states; 
"ft is highly desirable that a 
few key political questions - 
i.e. on two speed Europe, opt- 
outs, enlargement to eastern 
Europe etc - be posed to all 
the candidates in order to 
assess their views on the Euro- 
pean integration process.” 

As far as financial interests 
are concerned, the committee 
recommends that the parlia- 
ment should draw up a short 
and unbureaucratic list of 
questions to he submitted to 
all the candidates. 

As an illustration, it high- 
lights the type of questions 
raised in the US for completion 
by presidential nominees. 
These include such detailed 
points as financial transac- 
tions, investments, obligations 
liabilities, and any business or 
other relationships. 

In spite of the rigorous 
approach the parliament 
intends to adopt, the process 
rings slightly hollow, its extra 
powers do not extend to the 
right to veto individual com- 
missioners. All the parliament 
can do is mention its misgiv- 
ings to Mr Santer. Otherwise, 
it can veto the entire commis- 
sion. but this would be an 
unlikely step. 


Pope widens electoral base 
for choice of his successor 


By Robert Graham in Rome 

Pope John Paul II yesterday 
nominated 30 new cardinals, 
further broadening the inter- 
national base from which a 
future pontiff will be chosen. 

The most politically innova- 
tive of the choices are the 
appointments of cardinals 
serving in Albania, toe Bos- 
nian capital Sarajevo, Cuba, 
and Belarus, as well as the 
Lebanese patriarch, Nasrallah 
Pierre Sfeir. 

The move to increase the 
number of cardinals - the 
highest ranking members of 
the Catholic hierarchy with 
the sole right to elect a new 
pope - had been foreshad- 
owed. However, the decision 


was made earlier than expec- 
ted and comes against a back- 
ground of the 74-year-old pon- 
tiff’s declining health. 

Vatican watchers said the 
Pope bad tended to chose per- 
sons generally sympathetic to 
his conservative ethical views, 
within this, he had considera- 
bly broadened the geographi- 
cal spread, especially to for- 
mer communist eastern 
Europe, Latin America, Asia 
and Africa. Nevertheless, four 
new appointees were Italian 
and the Europeans still domi- 
nate the cardinals’ conclave. 
Britain gained a cardinal with 
the nomination of Mons 
Thomas Winning, Archbishop 
of Glasgow. 

The cardinals will be for- 


mally proclaimed at a special 
consistory in Home on Novem- 
ber 26. The precise number of 
new cardinals shows that Pope 
John Paul n is anxious to 
respect toe informal limit of 
120 electors under the age or 
80 set by his predecessors. 

At the time of the consistory 
96 cardinals will be below the 
age of 80, while six of the new 
cardinals will be over that 

In the event of a new con- 
clave 100 of the 120 cardinals 
would have been chosen by 
Pope John Paul n. Of the 
total, 55 would be from east 
and west Europe (20 of whom 
are Italian), S3 from the 
Americas, 16 from Africa, 14 
from Asia and three from 
Oceania. 


Bosnian Serbs bent on revenge 


By Lain SBber In Belgrade 

Bosnian Serb leader Radovan 
Karadzic declared a full-scale 
state of war at toe weekend 
after Serb forces suffered their 
greatest setback since fighting 
began in Bosnia. 

Bosnian government forces 
yesterday continued their 
offensive in the north-west of 
the country, raising fears of a 
Bosnian Serb counter-attack 
against Bthac, the Moslem 
enclave which is one erf six UN 
safe areas in B osnia. *Tf the 
pocket is attacked, toe UN will 
have no choice but to request 
Nato air support" said Mr 
Colin Murphy, UN spokesman 
in Sarajevo. 

In a sign of possible plans for 
a counter-attack, Mr Karadz ic 
also ordered a general mobili- 
sation in his self-styled Serb 
state. Over too past week, Bos- 


nian Serb forces have lost 
some 200 sq km in the 
north-west. 

The Bosnian Serbs are in an 
increasingly isolated position 
after being cut off three 
months ago by their patron. 
President Slobodan Milosevic 
of Serbia. There is even specu- 
lation that Mr Karadzic has 
engineered the stunning losses 
in a bid to force Mr Milosevic 
to abandon his blockade 
against the Bosnian Serbs. 

However, Belgrade’s state 
media has imposed a total 
news black-out on the losses. 

Renewed fighting erupted 
yesterday after the mostly 
Moslem government forces 
encircled Bosanska Kru pa, a 
Serb-held town on the River 
Una in the north-west In an 
unconfirmed report. Sarajevo 
radio said government forces 
had entered the town. 


Serb forces from Bosnia and 
Croatia have surroun de d the 
dense north-western Moslem 
pocket for most of the 31- 
month war. Last week, how- 
ever, the Bosnian Fifth Corps 
drove Serb forces from the Gra- 
bez plateau, strategic high 
ground above Bihac town. Up 
to 10,000 civilians have fled the 
area and Serb soldiers have 
abandoned tanks and other 
hardware to their foes. 

■ 111 Sarajevo, Mr Murphy said 
toe UN was considering dose 
air support against govern- 
ment forces in the demilitar- 
ised zone round the Bosnian 
japital who have been launch- 
ing attacks on Serb-held terri- 
tory. General Rose, British 
leader of the UN forces in Bos- 
nia, issued a similar threat ear- 

5** “onth, but it is likely 
toe US would protest a gainst ;*■ 
being carried out 


Also yesterday, the Bosnia] 
Serbs released four British U1 
soldiers who they Had detainer 
last week in toe Kupres regioi 
of central Bosnia on suspidoi 
of spying. 

• Russia would withdraw it 
peacekeeping troops from foi 
mer Yugoslavia if Nato gains 
ultimate control over whethe 
to use force, Mr Andre 
*^ oz yrev, foreign minister, sail 
yesterday. On Friday Nati 
approved a deal with the Ut 
on plans for joint bombinj 
operations in Bosnia. Though 
Nato officials stressed then 
would be no change in thi 
basic "dual key" com man 
structure under which Nab 
supports UN decisions. U 
Kozyrev said that if it wen 
abolished, "I would have ti 
turn to the upper house of pai 
umnent and ask to have ou 
peacekeeping troops removed" 






FINANCIAL TIMES MONDAY OCTOBER 31 1994 


3 


★ 


NEWS: EUROPE 


Resentment surfaces in Russia’s Arctic sea of oil sludge 

John Thornhill finds people are beginning to raise their voices in a region used to suffering pollution in silence 



T he remote Russian Arctic 
town of Usinsk is hitniring in 
bewilderment in the glare of 
international publicity. US claims 
that a recent oil spill nearby was 
several times larger than the 
world's previous worst disas ter in 
Alaska in 1989 have provoked out- 
rage from the local authorities, hos- 
tility from the local oil company, 
and a mood of b emusement among 
the local population. 

Some residents fust do not under- 
stand the fuss, given that s imilar 
spills have happened before Without 
stirring much, co n trov e rsy. 

Mr Philip Gorsky, a ruddy-faced 
pensioner, who lives in a 
rough-hewn wooden cottage by the 
Kolva river, says he has seen many 
oil leaks, blow-outs and burning 
slicks in the 40 years he has lived in 
the region. He ahra ge his sho ulder s 
at the latest incident after which 
scores of workers removed oil from 
the rive - outside his front door. “I 
am used to it," he says. 

Sadly. Russia is accustomed to 
such accidents, although it remains 
unaccustomed to the controversy 
they now arouse. 

A local environmental group 
claims that inte rnal documents 
obtained from Komineft, the oil 
company responsible for the faulty 
pipeline, reveal there were more 
than 1,900 leaks between 1986 and 
1991, with an alarming acceleration 
towards the end of that period. 

Envir onmentalists es timate Rus- 
sia may lose 1-3 per cent of its oil 


output each year through leaks in 
its 45,000 miles of pipelines. In an 
industrial culture that stresses pro- 
duction over the envir onme nt, man- 
agers prefer to pump oil rather than 
repair damaged infrastructure Mud 
shut and re-start wells. 

Mr Vyacheslav Bibikov, vice-pres- 
ident of Komi Republic - reputedly 
one of Russia's more reactionary 


regions, gives the official response. 
The situation is localised and con- 
trolled and we consider that exces- 
sive attention has been given to this 
accident Nothing terrible has hap- 
pened here,” he says. 

Mr Nikolai Ponomaryev, deputy 
general director of Komineft, 
reacted even more fiercely when 
questioned by western journalists 


and envir onmental campaigners. In 
a flash-back to Soviet-style atti- 
tudes, tfiw glowering Mr Ponomar- 
yev refused to discuss the compa- 
ny's pipeline capacity on the 
grounds of ‘'commercial secrecy” 
and suggested foreigners who had 
failed to win business in the area 
were exaggerating the affair . 

Perhaps no-one will ever know 


how much cdl has been spilled near 
TTairndr. Local government rrffiriaic 
and Komineft directors ridicule US 
Energy Department claims that 
270,000 tonnes of oil has leaked. But 
even accepting the minimum nfR . 
dal figure of 14.000 tonnes - which 
western oilmen in the region find 
hard to believe - the spillage still 
represents an appalling environ- 
mental blight. 

Mr Anatoly Nyukin, head of Komi 
Republic’s civil defence, says he has 
not seen one dead bird or fish as a 
result of the accident. But local resi- 
dents point out that pollution killed 
much of the local wildlife long ago. 

Mis Chesleva Popova, mayor of 
the 170-year old Kolva village, says: 
“There was a very big resource of 
fish here 10 years ago. But now 
there are practically no fish left.” 
She says those fish they do catch 
are used to make a traditional local 
dish. “But often the fish smell 
strongly of oil and it is not pleasant 
to eat," she says. 

More than 200 people have been 
working intensively to dear up the 
damage. Using vacuum pumps and 
bulldozers, they have cleaned up 
most of the black sledge that oozed 
into the Kolva and Usa rivers, 
where 7km-9km of river bank were 
heavily polluted. 

But removing the estimated 114)00 
tonnes of oil which remain in the 
flooded marshlands will be slow and 
laborious. So far the clean-up has 
been eased by the relatively udld 
weather. But temperatures can drop 


to minus 50 degrees in winter and 
the oil must be removed before the 
spring thaws threaten to spread a 
fresh ecological disaster. 

The 60,000 who live in and around 
Usinsk are hardly strangers to such 
hardships. The grim and grimy 
town, which clings to the edge of 
the Arctic circle, was built in a 
region infamous as one of the most 
terrible islands in Stalin's Gulag 

archipelago. Many “cri minals” from 
the nearby Vorkuta camp settled in 
the area after their release. There is 
an acceptance of hardship and a 
reluctance to moan found rarely in 
Russia’s bigger cities. 

Usinsk Itself was built 20 years 
ago by Komineft to support oil 
exploration. Like most Soviet indus- 
trial enterprises, the company cre- 
ated its own mini-welfare state, 
building eight schools, a kindergar- 
ten and a hospital Some residents 
fear Komineft will run these down 
now it is a privatised company with 
profits in mind. Unemployment is 
already rising alarmingly as the 
company sheds workers. 

The arrival of western companies 
is beginning to change the town. 
Conoco, the US oft group, has set up 
the Polar Lights joint venture with 
Archangelskgeologia. a Russian 
exploration company, bringing 
much-needed jobs to the region. 
Komi Arctic 00, a joint venture 
between Komineft, Gulf Canada, 
ami British Gas has also developed 
a field north of Usinsk and set up 
smart offices in town. 


That seepage of capitalism is 
already visibly transforming 
Usinsk. Snickers chocolate bars are 
on side in street kiosks; posters of 
scantily clad women straddling 
motor-bikes are displayed in the 
small shopping centre; BMW cars 
cruise the streets disgorging the 
local hard men clad in leather jack- 
ets, gold and shall suits. 

The after-effects of the spillage 
may speed further social change. 
Komineft’s managers, alarmed at 
the publicity and fast-falling share 
price, must appreciate they are now 
accountable to a far broader constit- 
uency than party bosses or central 
planners. Local government offi- 
cials know they now live in a trans- 
parent world and have responsibili- 
ties for a precious environment 
which Green groups claim is of 
international significance. 

And the townspeople of Usinsk 
are slowly understanding that as 
shareholders in the privatised Kom- 
ineft they are also part-owners who 
can influence the company's and 
region's development 

There are tentative signs that 
after years of silence local people 
are beginning to raise their voice. “1 
do not want to say that people were 
afraid by what has happened but 
they think about the future and 
want to make sure this is not 
repeated,” says Mrs Popova. One 
shop assistant raises a common 
plea: “Usinsk is my town. It is my 
home. I do not want anyone to spoil 
it any more." 


jBMDEW | 

Moscow tries to 
see the news 
in the oil leak 


RUSSIA 


By John Lloyd 


In the daily Robochoya 
Tribuna of last Wednesday, an 
item appeared in the front page 
brief news section, “In one 
paragraph”. The hgadfinp read: 
“Ecological catastrophe in 
northern Russia - and it seems 
it worries the Americans~nrare 
than us”. 

The story, citing the Voice of 
America radio station, said; 
“American officials say that, in 
a region of the Arctic round 
the town of Usinsk, a pipeline 
has ruptured, causing the hug- 
est ail spiR in history. Ameri- 
can representatives in Wash- 
ington. quoting information 
coming from Russia, say that 
2m barrels of oil has been 
spilled. The US deputy energy 
secretary says that the spin is 
an ecological catastrophe.” 

This says a great deal about 
coverage of the Usinsk oil spin, 
about the attitude of the press 
- and of official and civil soci- 
ety - to the incident, and 
about the state of ecological 
awareness in Russia. 

It also says much about the 
majority Russian view of the 
world as one ecosystem. For, 
with few exceptions, the Rus- 
sian press covered the incident 
if at all through the industr y 
and government sources cited 
in last Tuesday’s New York 
Tiroes, which broke the story. 

Only two leading newspa- 
pers, Isoestxya and Sevodnya, 
gave it wide coverage - though 
limited largely to news written 
in Moscow, not on-the-spot 
reports or analysis. By the end 
of the week, a Russian wire 
service was quoting the head 
of the company responsible for 
the spill as blaming western 
interests for blowing up the 
story for commercial gain. 

Yet the facts - the spill, the 
declaration of an emergency 
situation in the region and 
vast natural damage - were 
known to and published in 
newspapers In the Komi repub- 
lic weeks before the Times 
story. 

The region's Krasnoe Zna- 
mya (Red Banner) of Septem- 
ber 15 ran a splash hgnrffimg 
“Pipeline of Trouble - Usinsk 
region has become an area of 


ecological disaster”. The story 
gave details of streams run- 
ning with olL and roads cov- 
ered with lakes of ofl. It ended 
with the observation: “We 
don’t just have a state of emer- 
gency here: we have an ecolog- 
ical catastrophe.” 

The story - which the paper 
followed up throughout Octo- 
ber - did. not appear in the 
central press, nor on all-Russia 
TV. Not because of censorship - 
but because it was not seen to 
have more than local impor- 
tance. 

Western journalists who 
travelled to the inaccessible 
region to cover the story last 
week were met with hostility 
mixed with genuine bewilder- 
ment: Why come all this way 
to cover as common a thing as 
an oil and what has it to 
do with you? 

Izoestiya, the best of the cen- 
tral dailies, did best by the 
story. It ran a splash headline 
last Wednesday: “Why should 
Americans be more concerned 
nhrm t an oil spill in the tundra 
hhan Russia?” It slammed the 
Komi ofl company for attempt- 
ing to conceal the whole affair, 
saying it was a “saddening cir- 
cumstance" that the alarm was 
raised by the Americans and 
that a government commission 
was formed only after US Vice 
President A1 Gore offered assis- 
tance. 

The daily Sevodnya made the 
story its second front page lead 
- noting in an editorial com- 
ment with the story- "It's 
unde rs tandabl e and , alas, all 
too common that information 
on our ecological disaster 
should again come from the 
west.** 

But by the end of last week 
an ay piariatinn emer ged for the 
western concern: it was driven 
by tiie profit motive. Interfax 
news agency, quoting “experts 
of Moscow's leading broker 
and investment companies”, 
said the news had clipped 
between 61 and S2 off the 
shares of the Komi Oil com- 
pany. “Komi Oil director Gen- 
eral Valentin Leonidov told a 
shareholders' meeting on Fri- 
day that the rwmpatg n OD the 
pipeline accident was carried 
out in the interests of those 
who want to buy Kami Oil for 
a song,” it said. 


Longuet case to 
be investigated 


The French justice ministry 
has given the go-ahead to two 
formal investigations in a cor- 
ruption case which forced the 
resignation of Mr G6rard Lon- 
guet, then industry minister, 
earlier this month, writes John 
Kidding in Paris. 

The investigations, which 
are expected to be launched 
today, will focus on allegations 
of illicit financing relating to 
the construction of Mr Lon- 
ers holiday villa in St Tro- 
pez and on the management of 
companies linked to the former 
industry minister which are 
suspected of concealing pay- 
ments from business groups. 

Mr Longuet has denied any 


wrong doing . In a statement 

released on Saturday, follow- 
ing the decision by the justice 
ministry to authorise the new 
probes, he described tbs allega- 
tions against him as “base- 
less.” He said the new investi- 
gations would allow him to 
prove his innocence. 

The judicial authorities are 
investigating whether Mr Lon- 
guet received payments and 
preferential financial terms on 
bis villa In return for granting 
public contracts. The new 
probes will examine InvesteLa 
holding company created by 
Mr Longuet in 1989 and Avemr 
55, a consultancy firm for 
which Mr Longuet worked. 


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financial times 


MONDAY OCTOBER 31 1994 



NEWS: INTERNATIONAL 


China shows growing confidence abroad 


By Tony Walker m Bering 

China’s leaders begin a series 
of foreign missions this week 
in a virtually unprecedented 
show of diplomatic zeal that 
underscores China's growing 
self-confidence internationally. 

China's official media yester- 
day described visits by the 
country's three most senior 
leaders to neighbouring coun- 
tries over the next two weeks 
as part of a “new diplomatic 
drive'*. 

Xinhua, the official news 
agency, said it was “rare" for 
three top Chinese officials to 
“go abroad in quick succes- 
sion". It noted that the visits 
were “mostly in the Asia-Pa- 
cific region". 

Premier Li Peng, who ranks 
number two in the standing 
committee of the ruling Polit- 
buro. begins a five-day visit to 
South Korea today. He will be 
the most senior Chinese offi- 
cial to visit Seoul since Beijing 
established diplomatic ties 
with South Korea in 1992. 

Mr Qiao Shi, chairman of the 
standing committee of the 


National People's Congress. 
China’s parliament, leaves 
later this week on a five-nation 
tour of New Zealand, Austra- 
lia, Argentina, Brazil and Fiji. 
Mr Qiao ranks three in the 
politburo. 

President Jiang Zemin, who 
also serves as general secre- 
tary of the Communist party 
and chai rman of the powerful 
Military Commission, will visit 
Singapore, Malaysia. Indonesia 
and Vietnam between Novem- 


ber 6 and 22. He will attend the 
Asia-Pacific Economic 
Co-operation forum in Indon- 
esia in mid-November. 

Other senior Chinese offi- 
cials who will be engaged this 
week in high level diplomatic 
missions include vice-premier 
Li Lanqiug who will visit 
Washington to press China's 
case for admission to the Gen- 
eral Agreement on Tariffs and 
Trade. 

Mr Li, who is a former minis- 


ter of foreign trade, will seek to 
counter OS misigivings about 
China's progress in meeting 
requirements for Gatt entry. 
US trade officials say Beijing is 

still some distance from satis- 
fying market liberalisation 
requirements for Gatt acces- 
sion. 

Western officials in Beijing 
view China's diplomatic blitz 
as a sign of growing self-confi- 
dence in the international 
arena. “This indicates that 


things are going their way on 
the diplomatic front, n said one. 

The official noted that Bei- 
jing appears to have success- 
fully neutralised the worst of 
the international opprobrium 
that followed the June 1989 
massacre of pro-democracy 
protesters around Tiananmen 
Square. 

There are increasing signs 
that different countries are 
now prepared to put human 
rights down the list of priori- 


N KOREA TO RECEIVE JAPAN DELEGATION 


North Korea yesterday agreed to an 
official visit by the three parties of 
Japan's coalition government, paving the 
way for the resumption of an official 
dialogue between the two neighbours, 
writes William Dawkins in Tokyo. 

The accord, announced by Mr Yoshiro 
Mori, secretary general of Japan’s Liberal 
Democratic Party, is part of the general 
unfreezing in relations brought about by 
the recent North Korea-US deal. Under 
that accord, Pyongyang agreed to accept 
fall international inspections of its 
nuclear facilities In return for improved 
US ties and aid to replace its graphite 


plants - which can produce weapons grade 
plutonium - with safer light water 

reactors. 

The Japanese delegation, to arrive some 
time in November, will discuss Japanese 
participation in the conversion of North 
Korea’s nuclear plants and the possible 
resumption of talks, broken off two years 
ago, on opening diplomatic relations. 

Of the $4.5bn (£ 2 . 771m) required to 
instal light water reactors In North 
Korea, Japan is expected to contribute up 
to 20 per cent with 55 per cent from 
South Korea, and the balance from the 
five members of the UN Security Council, 


plus Canada. Australia and Germany. 

However, Mr Masayoshi Takemnra. 
Japan’s finance minister would like to see 
dear European backing tor the project 
before going ahead. The North 
Korean-Japan meeting testifies to the 
dose ties maintained with Pyongyang by 
tiie other two members of the coalition, 
the left-wing Social Democratic Party and 
the New Harbinger Party, a centre-left 
splinter group. Japan has shown more 
interest in Aslan affairs since the arrival 
of the current government in June under 
Mr Tmniicbi Mnrayama, its Socialist and 
pro-Asian prime minister. 


ties when dealing with China," 
he said. 

The visits abroad by China’s 
three top official s are the cul- 
mination of perhaps the most 
active year of diplomatic activ- 
ity in the history of the Peo- 
ple's Republic, beginning with 
a tour of Central Asia in April 
by Premier Li Peng. Mr Li 
went abroad again in mid-year 
when he visited Austria, Ger- 
many Romania. 

President Jiang went to Rus- 
sia, Ukraine and France in Sep- 
tember, and earlier this month 
Mr Zhu Rongji the senior vice 
premier in charge of the econ- 
omy, was in Madrid for the 
IMF-World Bank m ee ting . 

Xinhua said Chinese leaders 
would “try to alleviate fears of 
the so-called ‘China threat” in 
their discussions with regional 

counterparts. 

“Chinese leaders are expec- 
ted to explain China's position 
on the es tablishment of a new 
political and economic order,” 
Xinhua said. They will reas- 
sure their hosts that China bag 
no Intention of seeking hege- 
mony.” 


Hopes rise for Burma dialogue 


Victor Mallet 

on new meeting 
with democracy 
campaigner 

A second meeting 
between Burma's mili- 
tary rulers and Ms 
Aung San Suu Kyi. the 
detained pro-democracy cam- 
paigner, sharply raised hopes 
at the weekend that the junta 
and its opponents would soon 
start negotiating a political set- 
tlement after years of violence 
and human rights abuses. 

Details of the meeting are 
scarce. Lt-Gen Khin Nyunt, the 
powerful head of military intel- 
ligence and “Secretary One” of 
the State Law and Order Resto- 
ration Council (Slorc) - as the 
junta calls itself - met Ms Suu 
Kyi in the company of two 
other generals for three hours 
on Friday morning. 

Unlike the first such meeting 
on September 20. news of the 
latest encounter at an army 
guest house in Rangoon was 
given pride of place in the offi- 
cial media. 

Ms Suu Kyi, who has been 
under house arrest at her Ran- 
goon home for more than five 
years, was shown smiling and 
chatting with the generals in 
the lead item on the television 
news, and three photographs 
appeared on the front page of 
the New Light of Myanmar 
[Burmal newspaper. 

Burmese citizens, who voted 
overwhelmingly for Ms Suu 
Kyi’s National League for 
Democracy in a 1990 election 
whose results were ignored by 
the armed forces, were 
delighted but baffled. 

An official statement said 
merely that the discussions 
were “frank and cordial", that 
they covered Burma's political 
and economic situation, includ- 
ing reforms being implemented 
by the Store, and examined 
“steps that should be taken 
with a view to the long-term 
welfare of the nation”. 

No-one expects the talks to 
be easy. Indeed some Burmese, 
including government officials, 
dismiss the discussions as a 
ploy by the armed forces to 



Suu Kyi “an ant to be swept off 
the read”, are said to oppose 
the whole idea of negotiations. 

But the Slorc needs to be 
seen to be negotiating in good 
faith while it seeks the help of 
foreign investors and donors. 

An economic recovery in the 
last couple of years has begun 
to repair the damage caused by 
the army’s “Burmese Way to 
Socialism” after it took power 
in 1962. 

Even Singaporean and Thai 
investors sympathetic to the 
junta say they would like to 
see Ms Suu Kyi released, while 
the western nations and Japan 
want to profit from the eco- 
nomic growth in this country 
of 43m people at the same time 
as upholding their human 
rights principles; Mr Thomas 
Hubbard, US deputy assistant 
secretary of state for east Asia, 
is to visit Burma this week 
after a long period of frosty 
relations between the two 
countries. 


A; 


Aung San Suu Kyi; meeting with military rulers publicised 


improve their international 
image and head off a resolu- 
tion in the UN general assem- 
bly condemning Burmese 
human rights abuses. 

Such suspicions are 
reinforced by events which 
attract less publicity than the 
meetings with Ms Suu Kyi. 

Earlier this month, for exam- 
ple, five of her fellow-dissi- 
dents were quietly sentenced 
to between seven and 15 
years in jail on a variety 
of charges including spreading 
information “damaging to 
the state". 

“The Slorc is just using the 
meetings to get a breathing 
space in the international com- 
munity," said one Burmese 
businessman. “They don’t 
want to share power or give 
any role to Aung San Suu Kyi 
in creating our country's 
future." 

Others believe the meetings 
represent a genuine desire to 
negotiate on the part of the 
junta - Ms Suu Kyi herself has 
always said she is willing to 


talk - although they accept 
that the two sides remain far 
apart. 

“The only common ground, 
perhaps, is a desire for recon- 
ciliation," said one Rangoon- 
based diplomat. 

Ms Suu Kyi is aware of the 
sensitivities of the army and 
has gone out of her way to say 
she is not anti-military; her 
father Aung San was the Japa- 
nese-trained general who 
led Burma to the brink of 
independence from Britain in 
the 1940s. 

But she insists on the need 
for democracy and has called 
the National Convention - a 
Slorc-dominated conference 
that is drawing up a new con- 
stitution designed to ensure 
military control of future gov- 
ernments - “a farce". 

Slorc members, on the other 
hand , d emand continued mili- 
tary influence in politics. 

Some hardliners, such as 
Gen Tun Kyi, the trade minis- 
ter and former Mandalay com- 
mander who once called Ms 


s one Burmese dissi- 
dent noted last week. 

, the increasingly confi- 
dent junta is having some suc- 
cess in changing the interna- 
tional agenda. 

Foreign governments used to 
demand the instant release of 
Ms Suu Kyi and the immediate 
transfer of power to the demo- 
cratically-elected government; 
now they want a “meaningful 
dialogue" and moves towards 
democracy. 

The hard task facing the 
Slorc and Ids Suu Kyi is to 
agree on a definition of democ- 
racy. Brig-Gen Kyaw Ba, a 
member of the 21-man Slorc. 
commenting on the Suu Kyi- 
Slorc talks in an interview on 
Friday, declared that Burma 
already enjoyed freedom. “We 
have a democracy according to 
the Myanmar way,” he said. 
“Democracy must be a disci- 
plined democracy. It must not 
be a rowdy one.” 

Ms Suu Kyi would have 
sighed at these words. At a 
meeting with a US congress- 
man in February, she said: 
“Having imposed the Burmese 
Way to Socialism on us for so 
many years, I now dread the 
Slorc wanting to impose its 
idea of a Burmese Way to 
Democracy." 


US, UK top drugs market growth 


By Daniel Green 

The US and UK remain the 
fastest growing pharmaceuti- 
cals markets in the world, hut 
the gap is slowly being closed 
by other western European 
nations, according to figures 
published yesterday. 

Drug sales in the US for the 
first eight months of the year 
stood at $34bn (£21bn), 8 per 
cent higher than a year ago. 
This represents modest growth 
in the US by recent historical 
standards and was matched 
only by the UK where drug 
sales rose to S3.6bn, said IMS 
International, the specialist 
market research company. 

Both the UK and the US 
have been relatively lenient 
towards drugs companies. 
Other countries have imposed 
sometimes draconian price 
controls on drugs in an 
attempt to limit the growth in 
healthcare costs. 


PHARMACY DRUG PURCHASES 

January- Aug ust 1994 ($m) 


N Amor 

Japan' 

Germany 

France 

Italy 

UK 

Spain 

FTIand 

Belgium 

CardtovascUar 

5.570 

2.206 

2.117 

2.062 

1,138 

604 

516 

209 

213 

fifcnr ntnyflUnUihnll im 

5,580 

2.750 

1339 

1,337 

873 

703 

423 

249 

164 

Central Nervous System 

5,776 

715 

930 

930 

466 

480 

291 

133 

166 

Arrtl-infectrves 

3.138 

1.754 

555 

894 

586 

250 

314 

88 

116 

Respiratory 

3.424 

1.053 

B93 

584 

292 

549 

248 

155 

96 

Muscuto-SketetaJ 

1.493 

1380 

469 

353 

267 

237 

141 

49 

56 

Blood Agents 

1,541 

1,171 

336 

495 

285 

59 

148 

48 

43 

Others 

7.465 

3,096 

1,868 

1,363 

935 

694 

467 

201 

180 

Total 

3.987 

14.125 

8.705 

8,018 

4,844 

3576 

2548 

1.112 

.036 

% Change - 

8 

1 

8 

2 

-8 

8 

4 

8 

3 

TWrvflraptai nwfcw onfr bourne «cru*s airsntaa 

















Source IMS htamsaoraf 


The world’s second biggest 
market. Japan, saw sales rise 
only one per cent - to Si4.1bn 
- in the first eight months of 
1994 compared with the same 
period a year earlier. Drug 
sales growth in Japan aver- 
aged 6 per cent in 1933 but the 
government imposed wide- 
spread price cuts in April this 
year. Italy has seen the sharp- 


est turnaround in the fortunes 
of the drug sector. A January 
reform to the the system under 
which some drugs were paid 
for by the state has led to 
many widely-used products 
now sold at half or even full 
price. The latest figures show 
that drugs sales are running at 
8 per cent below a year ago. 

In Germany, drugs sales 


have recovered this year. 
August was a good month for 
the industry, and sales for the 
year to August were up 6% on 
1993. at $8-7bn. This is com- 
pared with a 5% rise recorded 
year on year in July. 

France recorded a 2 per cent 
increase for the first eight 
months of 1994 over the same 
period of 1993. 


S Africa plans action on privatisation 


The South African government intends to 
press ahead with privatisation as quickly 
as possible in an effort to raise new funds 
for its centrepiece Reconstruction and 
Development Programme. At the same 
tim e it plans to cut the size of the dvil 
service and the salaries of top government 
officials, writes Mark S u z m a n in 

Johannesburg. 

The speedy implementation of the first 
two proposals is regarded as crucial if the 
government is to meet its goals of cutting 


the size of budget deficit, currently at 6.6 
per cent of gross domestic product The 
third is a largely symbolic action 
designed to improve the administration’s 
public image. The government has come 
under increasing pressure In recent 
months over top officials' high salaries at 
a time what the country is being asked to 

accept austerity programmes. 

Malring the announcement over the 
weekend, deputy president Thabo Mheki, 
standing in for President Nelson Mandela, 


said the plan represented a “bold and 
imaginative shift" in policy. 

Under the plan the president and his 
two deputies will each take a 20 per cent 
salary cut while national ministers, 
regional premiers and the heads of the 
Senate and National Assembly wfi] accept 
10 per cent cuts. Further increases will be 
limited to 5 per cent a year. 

The proposals also call for the 
l.2m-strong civil service to be cut to less 

t han iiq . 


Frelimo heads 
for Mozambique 
election victory 


By Peter Stanley and Reuter 
in Maputo 

Mozambique last night seemed 
within reach of a lasting peace 
when the country's former 
rebel leader indicated that he 
would accept the outcome of 
the country’s first multi-party 
elections, and would accept a 
post in a government of 

national unify 

As early results in the three 
day election suggested a com- 
fortable victory for President 
Joaquim Chissano’s ruling Fre- 
limo party. Mr Afonso Dhlak- 
ama. head of Renamo said he 
would abide by the outcome if 
it were adjudged free and fair. 

Final results of the election, 
the final stage in the agree- 
ment signed in 1992 which 
ended the country’s 16 -year 
civil war, are not expected 
before mid-November. Over 90 
per cent of the estimated 6.4m 
electorate are thought to have 
voted in an exercise which 
internal observers endorsed as 
democratic. 

Apparently conceding defeat, 
Mr Dhlakama said: “We have 
to admit sometimes you win, 
sometimes you lose. It (democ- 
racy) is like football If the 
elections are fair we will not 


contest them .We would accept 
and recognise the results." 

He also called for an early 
meeting with President Joa- 
quim Chissano: “1 am prepared 
(to meet him) anytime so that 
we can discuss the future," Mr 
Dhlakama said. "We want to 
build confidence with our 
brothers.” The Renamo leader 
said he wanted to discuss with 
Mr Chlssann ways to ensure a 
peaceful transition after the 
elections. The president, while 
not ruling out a government of 
national unity, has not so for 
displayed great enthusiasm for 
the concept 

Some senior party members, 
however, are urging Mr Chis- 
sano to follow South Africa’s 
prampip The way forward is 
a unity government - that way 
we will avoid trouble by ensur- 
ing all Mozambicans are win- 
ners,” said Mr Alves Gomes, an 
influential and long-standing 
Frelimo supporter. 

"1 know my party wiD win 
but 1 want it to work with 
other parties," he added. Fre- 
limo is also coming under pres- 
sure from South African Presi- 
dent Nelson Mandela and 
Zimbabwe's Robert Mugabe to 
bring all main parties Into Ins 
government 


Moroccan sale 
oversubscribed 
seven times 


By Francis GhEtes 
In Casablanca 

Morocco’s largest privatisation 
passed one of its most impor- 
tant hurdles last week when an 
issue on the Casablanca Stock 
Exchange representing 16 per 
cent of the equity in the 
Sodjfitt Nationale dTnvestisse- 
manta (SNI) was seven times 
oversubscribed. 

The flotation forms part of 
the sale of 67 per cent of SNI 
under a programme to shed 
state assets started in 1992. 

In addition to the public 
shares offered on the stock 
exchange, a further 51 per cent 
of SNOTs capital is being sold to 
institutional investors which 
have been asked to bid for 
blocks of shares at a floor price 
of Dirham 325 per share (£23). 
Of this 35 per cent will go to a 
“hard core" of Moroccan insti- 
tutional investors who must 
hold the shares for at least five 
years, while 16 per cent wifi be 

sold to foreign and Moroccan 

institutions. 

SNI is a holding company 
with stakes in 41 businesses 
ra ng i n g from cement to food- 
processing. Three sectors domi- 
nate - cement accounts for 34 
per cent of SNTs assets, food 
processing and drinks another 
34 per cent and financial ser- 
vices for 12 per cent 

The exact value of SNTs 


assets is difficult to ascertain 
as many companies in its port- 
folio are not publicly traded 
and the accounts of those that 
are often not consolidated. But 
the minimum value of SNTs 
assets is estimated at £172m, 
which makes the holding 
Morocco’s fourth largest com- 
pany in terms of market value. 

Since 1992, the state has sold 
Dirham3.072bn (£266m) worth 
of assets. 

The privatisation of SNI will 
push this figure to £331m. A 
further boost will come before 
the end of the year when the 
state expects to sell part of its 
50 per cent stake in Morocco's 
second largest bank, Banque 
Marocaine du Commerce 
Exterteur and part of its 49 per 
cent shareholding in Credit 
Immobllier et Hotelier, the real 
estate financing agency. 

Direct foreign investment in 
Morocco has risen steadily 
since 1987 to £349m last year 
and is expected to top £ 61 dm 
this year. Trading volume on 
the Casablanca stock exchange 
increased more than threefold 
last year and volume in 1994 is 
already well up on last year's 
figure. The 25 Share Index set 
up by Casablanca Finance 
Group, an investment bank set 
up in 1992. showed a 35 per 
cent increase last year, this 
year’s increase is expected to 
be even larger. 


Casablanca stock market 


Turnover (purehasas and sates) 
Dirhams bn 
S 


Caprtaflsstisn of them traded 

Dirhams hn 
30 



_ W69 SO 61 se S3 . 
Source Bowse dn various Cm Cnob&nca 


1989 BO 


IWTERNATTONA^jBA^^GEST 

Brussels plan to 
cut EU airport 
service costs 

move that could sharply reduce airlines costa. Achoo to force 
competition in airport services will tackle the last significant 
element of air transport not in theory opened up to 
competition when the single European market came into force 
two years ago. The commission aims to present <fran 
lp gigifltirtn to EU transport ministers at a meeting next month. 

Airlines argue that at many European airports, (p-ouna 
handling services are controlled by monopoly suppliers- aj 
F rance, British Airways, KLM, Lufthansa, SAS and Spfluair. 
which have joined forces to support opening the market, say 
the monopolies typically charge 30-50 per cent more than 
suppliers who face competition at other airports. The services 
in question cover passenger and baggage check-in, loading and 
unloading of baggage, mail and cargo h a ndl ing, aircraft 
rii»a rung , towing, refuelling and aircraft m a intenanc e. Emma 
Tucker. Brussels 

HK confirms Jardine deal 

The Hong Kong government confirmed yesterday that a 
mmpary owned by trading house Jardine Matfaeson had won 
the contract to build a navy base for China before the British 
colony reverts to Beijing’s control in 1997. The HK$790m 
(£62£m) colonial government contract to build the base was 
awarded to Gammon Construction by the government’s 
Central Tendering Board, secretary for security Alistair 
Asprey said. Gammon is owned by Jardine Matheson, Jardine 
Pacific and British-headquartered Trafalgar House, in which 
Jar din e group company Hongkong Land has a 25 per cent 
Jardine, which moved its group headquarters to 
Bermuda in the mid-1980s, has been embroiled in a dispute 
with Beijing over its backing of democratic reforms in the 
territory. The actual contract itself Is a straightforward Hong 
Kon g government contract,” Mr Asprey said. China was not 
consulted, he said, but added it would be consulted on its 
requirements for design of the base. Beuter. Hong Kong 

Japanese party disbanded 

A symbolic step in the reform of Japanese politics was 
completed yesterday when the party that triggered the current 
upheavals disbanded itself to prepare to merge with 
Opposition allies. The Japan New Party of former prime 
minister Morihiro Hosokawa chose the occasion of its first 
national convention since its birth in May 1992 to announce its 
disbandment Mr Hosokawa, a former member of the ruling 
liberal Democratic Party, founded the JNP out of repugnance 
for the complacency encouraged by the comfortable links 
between the bureaucracy, politicians and business. That 
theme has since become central to the political reform 
movement and to the eight other potential members of the 
new opposition party, who are expected to follow the JNP’s 
example and ritually close down over the next month or so. 

The new party is expected to be created in December. 
Opposition parties are now attempting to dose ranks, in 
another attempt to put pressure on the LDP and eventually 
push it out of power. William Dawkins. Tokyo 

Italian businessman held 

French police yesterday arrested in Paris Mr Ferdinando Mach 
Di Palmstein. a Swiss-born Italian businessmen who has been 
on the run from arrest warrants issued by Milan 
anti-corruption magistrates for 18 months. He is one of two 
key remaining businessmen on the magistrates’ wanted list 
associated with Mr Bettino CraxL former Socialist leader and 
prime minister. 

At least five arrest warrants have been issued against Mr 
Mach Di Palmstein on various charges of corruption since 
early 1993 by Milan and Rome judiciaries. Earlier this month 
he was sent to trial with 43 other politicians, officials and 
businessmen on charges relating to alleged misuse of Italian 
overseas aid funds. Robert Graham. Rome 

Veto on Slovenia expected 

Italy is expected to veto the opening of negotiations between 
the European Union and Slovenia on an association agreement 
at a meeting of EU foreign ministers in Luxembourg today. 

This follows Slovenian government repudiation of an 
agreement readied two weeks ago at Aquileia in Italy between 
the Italian and Slovenian foreign ministers. Mr Lojze Peterle, 
Slovenian foreign minister and leader of the Christian 
Democrat party, is due to step down today, having resigned in 
protest at what he considers a tendency of the Liberal 
Democrat party, led by prime minister Janez Drnovsek, to 
monopolise power. The Liberal Democrats objected to a clause 
in the Aquileia agreement whereby Slovenia undertook to 
draw up a list of real estate formerly belonging to Italian 
citizens and now in public ownership, with a view to giving 
former owners or their heirs the right to buy it back. Edward 
Mortimer. Bled, Slovenia 

Impasse in Algeria conflict 

The 40th anniversary of Algeria’s revolution against French 
rule is being overshadowed by President Liamirw Zeroual’s 
admission that political efforts to end a conflict with Moslem 
fundamentalists had foiled. The army-backed president said at 
the weekend a political dialogue with Islamic Salvation Front 
(FIS) chiefs had gone nowhere. He accused one leader of 
ordering Is l ami c guerrillas to mount a new offensive. In a 
statement foxed to Reuters in Paris, the FIS urged President 
Zeroual yesterday to take part In a live television debate with 
the two leaders of the party. Reuter, Turns 

Israel eases currency curbs 

Israel yesterday announced a further step in liberalising its 
currency. From tomorrow Israelis going abroad on holiday will 

be free to take up to S7.000 in cash, instead of the present 

celling of $3,000. They will also have unrestricted use of credit 
cards for buying goods and services, though not for drawing 
rash. Previously, any credit card transactions were subject to 
the ® 000 limit A Bank of Israel spokesman acknowledged 

SSfidSTBrS SSW The average Israeli 

tourist drew only $1,500 when travelling. But it would affect 

the chmate and enhance the sense of a free currency. Business 
travellers already enjoy a ceiling of $9,000. which can be 
increased where justified. Eric Silver, Jerusalem 

Malaysia sect leader freed 

!f ad f a! “ tlamic sect called deviadonist by 
55 has ten frwd from jail In Kuala Lumpur. Mr 
Ashaan M uhamma d, head of the A1 Arqam sect had been 
jailed without : trial since early September. A1 Arqam, which 
daims more than 100.000 followers in Malaysia 
overseas, was banned in August. Mr Ashaari recently 
apr^ared on TV saying he regretted straying from the true 
path of Islam. But many A1 Arqam members say he was forced 
5**“’ to [aake his confession. Malaysian authorities say Mr 
Ashaari’s release is conditional it is believed hewdl 5S 
under house arrest Kienm Cooke, Kuala Lumpur^ 

FT wins Euro economy award 

nnancia 1 Times has won the 1994 Prix Stendhal for 
European economy - for its series last 
? fatled ^ Europe ^Pete?" The prize 

tbames dearly cud for 


FINANCIAL TIMES MONDAY OCTOBER 31 1994 


5 


NEWS: THE AMERICAS 


White House shots underscore case for gun 


By Jurek Martin In Washington 

The Clinton administration 
yesterday seized on Saturday’s 
shooting at the west wing of 
the White House to underscore 
its arguments that President 
Bill Clinton was right to have 
pushed for bans on semi-auto- 
matic assault weapons. 

Mr George Stephancpolous, 
the senior presidential adviser, 
noted that Mr Clinton had 


“talked all year” about the 
need to ban such guns and that 
the Chinese-made weapon was 
bought on the day the presi- 
dent signed into law the m - h n m 
bill that included bans on some 
types of assault weapons. 

The shooting attach on a 
clear Saturday afternoon was 
the second apparent assault on 
the White House in six weeks 
and has increased concerns 
about presidential security. 


Last month a pilot with a his- 
tory of mental instability was 
killed after crashing a small 
aircraft on the White House 
lawns. 

The weekend attacker, who 
was tackled by bystanders 
before being arrested, has been 
identified as Francisco Martin 
Duran, a hotel worker from 
Colorado Springs. He had been 
dishonourably discharged from 
the army In 1991 after being 


convicted of felony and 
assault. His camper van parked 
near the White House was 
emblazoned with pro-gun stick- 
ers. 

Mr Duran was indicted on 
two counts yesterday - damag- 
ing government property and, 
because of his criminal record, 
illegal possession of a firearm. 
A spokesman for the secret ser- 
vice said the charge of attempt- 
ing to assassinate the president 


was also being considered. 

Mr Stephanopoulos said that 
Mr Lloyd Bensten, the treasury 
secretary whose jurisdiction 
includes the secret service, 
would conduct a complete 
investigation into all aspects of 
White House security, with a 
final report in mid-January. 

The secret service, whose 
duty is to protect the presi- 
dent, has long wanted to close 
Pennsylvania Avenue, the 


broad street outside the north 
face of the White House, to 
vehicular and even pedestrian 
traffic. 

Mr Clinton, as Mr Stephano- 
pouios said yesterday, has been 
opposed to such curbs on the 
grounds that the White House 
is "the people’s house” and 
should, within reason, be 
accessible to the public. 

The president himself was 
watching a televised college 


curbs 


football game in the family 
quarters as the 22 shots were 
fired, shattering windows in 
the White House press room 
but hurting no one. 

He had returned on Saturday 
morning from a trip to the Mid- 
dle Cast in which security con- 
siderations were very evident. 
He made light of the Incident, 
quipping that he was glad “to 
be back in the safety and secu- 
rity of the White House”. 


Companies hit 
by lawsuits 
over sackings 


By Louise Kehoe 
in San Francisco 

A spate of employment 
discrimination lawsuits is tot- 
ting companies with DS 
operations in the wake of wide- 
spread corporate “downsizing”. 
While the hiring practices of 
US companies have long been 
scrutinised for bias, businesses 
increasingly face potential 
charges of violations of DS fair 
employment laws for the man- 
ner in which they shed work- 
ers. 

Statistical analyses of the 
number of workers fired, 
according to their race, sex and 
age are now essential defensive 
moves, according to legal 
experts. Increasingly, US com- 
panies are also also requiring 
employees to agree to settle 
any dispute they may have 
with their employer through 
arbitration. 

The latter move is aimed at 
avoiding potentially large dam- 
age awards such as the $89.5m 
award handed down last week 
by a Los Angeles jury against 
Hughes Aircraft, a General 
Motors subsidiary. In the case, 
which involves two former 
employees of Hughes - one 
white and one black - the com- 
pany has been found to have 
violated fair employment laws. 

Hughes called the jury ver- 
dict was "irrational, irresponsi- 
ble and outrageous”. Ihe com- 
pany said it will move to have 


the jury award reduced or 
overturned by the judge or by 
a higher court. 

Tjgal experts gairi that tha 
award will almost certainly be 
substantially reduced. The case 
has. however, sent a chilling 
message to employers. 

The award comes amid a 
rash of discrimination and 
harassment suits. In another 
high profile case the US Labor 
Department, which is supposed 
to be a watchdog against work- 
place fUgfrirntnatirm, agreed to 
pay an estimated $4Jhn to set- 
tle a suit that accused the 
agency of discrimination 
against its own black employ- 
ees. 

Businesses complain that 
despite their efforts to elimi- 
nate bias in the workplace, 
increasingly restrictive laws 
make it very difficult to com- 
ply. US employment laws pro- 
hibit many practices that are 
common in Europe and Asia. 
When interviewing prospective 
employees, for example, US 
employers are precluded from 
seeking information about the 
age, health or national origin 
of tiie applicant. 

Since the Americans with 
Disabilities Act became law in 
mid-1992, requiring businesses 
to make provision for workers 
who are physically or mentally 
disabled, for example, some 
27,000 claims have been filed 
with the Equal Employment 
Opportunities Commission. 


‘Solid growth’ forecast 


Mr Lawrence Lindsey, a 
Federal Reserve Board gover- 
nor. said at the weekend that 
Friday’s report on US gross 
domestic product provides 
"more evidence of solid eco- 
nomic growth” which could 
last for another "few quarters,” 
AP-DJ reports from Detroit 
He told reporters before 


addressing a conference on 
housing: U I don't see anything 
in my crystal ball to suggest a 
slowdown.” 

Data released Friday showed 
that GDP rose 3.4 per cent in 
the third quarter, which 
Mriindsey noted was a fester 
rise than most people had 
expected. 


Ballot initiatives stir up the voters 

George Graham reports on the midterm polls’ crop of state referendums 



US MID-TERM 
ELECTIONS 
November 8 


Voter turnout 
in the US mid- 
term polls on 
November 8 is 
expected to be 
low. in the 
absence of a 

yffi/jSiggj* presidential 
election, but in 
some states 
controversial 
referendum 
proposals on 
the ballot 
paper are 
expected to lure people to vote. 

Most controversial of all is 
California's Proposition 187. 
which would Han illegal immi- 
grants from receiving public 
education or social services. 
The proposal, which Justice 
Department officials say they 
believe to be unconstitutional, 
has sharply divided the candi- 
dates in California's elections. 
More people say they are being 
drawn to the ballot box primar- 
ily by Proposition 187 than by 
the elections for governor and 
senator combined. 

But California's anti-immi- 
gration measure is a rarity 
among the proposals on the 
ballot in the 24 states that 
allow legislation by plebiscite. 
Topping the ballot paper in 
other states are traditional 
measures on taxation, term 
limi ts and gambling . 

In the tax field, Florida, 
Missouri. Montana and Oregon 
are proposing to follow the 
example of Colorado and 
require voter approval for all 


future tax increases. Voters in 
all of these except Missouri 
will also decide on a separate 
measure requiring a two thirds 
majority vote for tax increases, 
as will Nevada voters. 

Oregon also has a sweeping 
proposal on the ballot which 
would repeal most state and 
local taxes, including the state 
income tax and local property 
taxes, and replace them with a 
2 per cent "equal tax” similar 
to a value added tax. Standard 
& Poors, the credit rating 
agency, said it would have to 
review Oregon's debt if the 


measure passes. 



Massachusetts, meanwhile, 
will vote on an alteration to 
the state constitution that 
would permit a graduated 
income tax. California pro- 
poses an additional tax of 4 
cents a gallon on petrol while 
South Dakota will vote on a 
measure slashing property 
taxes, similar to California’s 
Proposition 13 in 1978. 

California a Ten hag a num ber 
of tax measures, among them a 
payroll tax and a tobacco tax, 
included in a proposal to set up 
a statewide single payer health., 
system similar to Canada's. 
But after the defeat of the Clin- 
ton administration's efforts to 
carry out less radical reform of 
the health care system at the 
national level the measure is 
expected to be heavily 
defeated. But higher tobacco 
taxes to fund additional health 
services are thought to stand a 
better chance in Arizona and 
Colorado. 

California will take a differ- 
ent approach to smoking in 


Proposition 188, which was put 
on the ballot by a group called 
Californians for Statewide 
Smoking Restrictions. Despite 
its name, this group is heavily 
financed by P hilip Morris, the 
tobacco company. The proposal 
would, in fact, abolish the 
many tough anti -smoking ordi- 
nances passed by local govern- 
ments in California and 
replace them with much 
weaker statewide controls. 

Also attracting considerable 
attention is Arizona’s Proposi- 
tion 300, which would require 
the state to assess the costs to 
the private sector of any regu- 
lation it imposed. Supporters 
say the measure merely imple- 
ments the guarantee in the 
Fifth Amendment to the US 
Constitution that private prop- 
erty may not be taken by the 
government without compen- 
sation. But it is hotly opposed 
by environmentalists, which 
fear it will help lawsuits 
against environmental regula- 
tions. 


Limits on the number of 
terms elected politicians may 
serve remain a popular ballot 
initiative, appearing in at least 
eight states. In Colorado, vot- 
ers will get a second bite at the 
cherry with a proposal to halve 
the number of consecutive 
terms a member of the US 
House of Representatives could 
serve from six to three. 

Term limits on federal office- 
holders, however, remain 
under a constitutional cloud. 
The US Supreme Court Is due 
to decide on their legality this 
session. 

Proposals to authorise gam- 
bling are another staple of the 
ballot initiative process. This 
time, voters in North Dakota, 
South Dakota and New Mexico 
will get a chance to approve 
state lotteries. In Florida, 
Arkansas, Rhode Island and 
Wyoming, casinos trill be up 
for approval Missouri, which 
already allows river-boat gam- 
bling on games of skill, is ask- 
ing voters whether to allow 


games of chance, which would 
open up the lucrative slot 
machine market. 

In Colorado, a measure to 
allow slot machin es at airports 
is on the ballot, while Min- 
nesota is asking for approval of 
off track betting on horse 
races. 

Crime is a popular ballot 
measure this year, with pro- 
posals mandating long prison 
sentences up for approval in 
Oregon and Colorado, and a 
victims' rights measure in 
Alaska. Georgia voters will 
consider a constitutional 
amendment providing manda- 
tory life sentences for a second 
violent felony, while Califor- 
nians will vote on a “three 
strikes and out” proposal 
imposing mandatory life sen- 
tences for a third violent fel- 
ony. The proposal largely 
duplicates an existing law 
passed by the state legislature, 
but if approved by voters on 
November 8 it will be much 
harder to repeal in the future. 


Franco-Canadian proposal on new OECD chief under fire 


By Bernard Simon in Toronto 

The search for a new secretary- 
general of the Organisation of Eco- 
nomic Co-operation and Develop- 
ment is again in disarray, with sev- 
eral new options being discussed 
by the 25 member countries of the 
Paris-based research body. 

The US and Japan are understood 
to have rejected a compromise put 


forward by France and Canada in 
recent weeks to break the long 
impasse between their respective 
candidates. Mr Jean-Claude Paye 
and Mr Donald Johnston. 

Under this proposal Mr Paye, the 
outgoing secretary-general who has 
already served two terms, would be 
reinstated for another two years, to 
be followed by a full five-year term 
for Mr Johnston. 


The US, which insists the OECD 
post should be filled by a nan-Euro- 
pean, has rejected any extension of 
Mr Paye’s term. Japan is said to be 
unhappy that the Franco-Canadian 
plan would tie up the job for seven 
years. France and Canada are bank- 
ing on a compromise which, for in- 
stance, might allow Mr Paye to serve 
one year, and Mr Johnston four. 

Mr Jean Chretien, Canada’s prime 


minister, has telephoned the heads 
of several other OECD governments 
to revive support for Mr Johnston, 
whose chances were fading until the 
Canadians put forward the "two- 
plus-five” formula to French officials 
earlier this month. 

However, one European official 
predicted that the impasse over the 
OECD job may not be broken until a 
choice is made for secretary-general 


of the new World Trade Organisa- 
tion, which is due to come into being 
on January 1. The three contenders 
for the WTO job are Mexico's Presi- 
dent Carlos Salmas, Mr Renato Rug- 
giero of Italy, and Mr Kim Chul-su, 
South Korea’s trade minister. 

Mr Salinas currently appears to be 
the WTO front-runner. But some 
European governments have indi- 
cated that they will not accept North 


Americans in both the WTO and 
OECD jobs. One scenario being dis- 
cussed is that, if the WTO goes to Mr 
Salinas, Mr Ruggiero may end up at 
the OECD. 

While obstacles facing Mr Paye and 
Mr Johnston have again opened the 
way for a third candidate, the UK is 
understood no longer to be pressing 
the candidacy of Lord Lawson, for- 
mer chancellor of the exchequer. 


US warns 
Japan on 
economic 
squabbling 

The US. seeking to extract 
trade concessions from Japan, 
has issued a fresh warning to 
Tokyo underscoring the risks 
of continued economic squab- 
bling, Renter reports from 
Washington. 

Washington has been negoti- 
ating an agreement to open up 
Japan’s glass sector and has 
sought an accord on vehicles 
and parts - the single biggest 
component of the US trade def- 
icit with Japan. But the talks 
have proved tough going. 

Should no trade deal emerge 
in the glass sector by today, 
according to top officials in the 
Clinton administration, the 
allies would find themselves in 
"a difficult situation”. As for 
cars: "It is essential that we 
reach agreement". 

The warning was directed to 
Mr Rvutaro Hnshimoto, Japa- 
nese trade minister, in a letter 
dated October 25 from Mr 
Mickey Kantor. US trade repre- 
sentative, and Mr Ron Brown, 
commerce secretary. A copy or 
the letter, whose existence was 
first reported in a Japanese 
newspaper on Friday, was 
obtained by Reuters. 

"It was a direct letter. . . that 
will hopefully provide some 
results.” Mr Brown told US 
public television. “We’re very' 
anxious to re-engage the Japa- 
nese as soon as possible.” 

Mr Kantor and Mr Brown 
wrote to Mr Hashimoto in 
reply to two letters he had sent 
them earlier this month, 
thanking the Tokyo trade min- 
ister for his "candid com- 
ments”. Officials said Mr 
Hashimoto had complained 
about a recent speech by Mr 
Jeffrey Garten, commerce 
undersecretary and the chief 
US negotiator on cars, in 
which he had outlined the 
advantages of private-sector 
co-operation. 

“The Japanese took umbrage 
with that speech. This letter 
was in response,” said one offi- 
cial No reply to the latest US 
letter had been received by the 
weekend, another said. 

But the US side marip clear 
that a long-sought deal on 
automotive trade - which 
accounts for two-thirds of the 
$60bn bilateral imbalance - 
was vital to improved rela- 
tions. "It is essential that we 
reach agreement” they wrote. 
As for glass, under negotiation 
this week. Mr Kantor and Mr 
Brown both voiced "concern at 
the pace of discussions in 
Tokyo. There are many issues 
left to resolve before the end of 
the month." 

The two sides struck an 
agreement in principle on 
October 1 to open Japan's 
S4.5bn flat glass market and 
pledged to finalise the accord 
in 30 days. 

“We cannot conclude an 
agreement that does not result 
in substantial opening of the 
glass distribution system. Fail- 
ure to reach an agreement by 
the aid of the month would 
create a difficult situation,” Mr 
Kantor and Mr Brown said. 

They did not spell out what 
action the US team might take 
should no accord emerge and 
reiterated that the Clinton 
adminis tration was not seeking 
"numerical targets” over glass. 



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FINANCIAL TIMES MONDAY OCTOBER 31 .994 


NEWS: THE MARK THATCHER AFFAIR 


Harrovian Arthur Daley with a famous mum 


The son of the former prime 
minister tells Financial Times 
reporters he is not the wealthy 
fixer of media reputation 


The image of Mark Thatcher in 
newspapers and on television 
1$ of an extraordinarily 
wealthy arms industry fixer 
who shamelessly exploited his 
position as the only son of the 
world’s most powerful woman 
In the 1930s to amass a reputed 
fortune of £40m. 

It is an image created by 
rumour and speculation, how- 
ever. rather than by hard fact 
it has never been dispelled in 
part because Mr Thatcher has 
refused to comment in detail 
on the allegations. 

The Financial Times has 
decided to look behind the 
image to the real man. Pages of 
company filings and court doc- 
uments in the US and UK have 
been scoured. His close busi- 
ness associates have been 
interviewed, including some 
who have fallen out with him. 
For the first time in many 
years Mr Thatcher made him- 
self available for a lengthy 
interview on his affairs. 

What emerges is a subtly dif- 
ferent picture. There can be lit- 
tle doubt that he exploited bis 
mother’s connections, although 
he insists that everything he 
did would have been achiev- 
able even if his mother bad 
never become prime minister. 

With continuing speculation 
about why he was mixing in 
defence industry circles at the 
time of the £20bn A1 Yamamah 
arms contract between the UK 
and Saudi Arabia, the question 
of the propriety of his behav- 
iour as the then premier's son 
remains open. 

But the tales of his fabulous 
wealth seem a long way from 
the truth. Far from being a 
super-rich Mr Big of the arms 
world Mr Thatcher appears to 
be a relatively small-time 
wheeler dealer, a sort of Harro- 
vian Arthur Daley with a 
famous mum, who has 
attempted investments in a 
wide range of industries with 
limited financial success. 

In Texas, where he lives with 
his American wife and two 
children, Mr Thatcher remains 
an enthusiastic follower of his 
mauler's free-market entrepre- 
neurial philosophy and still 
hopes to join the ranks of the 
fabulously wealthy one day. 

As for his current net worth, 
he confirms that It lies 
between £3m and £5m. That is 
a highly plausible figure, on 
the basis of the value of his 
homes In Houston and London 
and details compiled by the 


Financial Times of his business 
interests and lifestyle. 

Mr Thatcher hims elf points 
to his seven-year-old BMW and 
denies reports that he employs 
a butler to travel with him. 

Mr Thatcher said: “This 
whole idea that I have had tre- 
mendous success is just a 
myth. If I had tremendous suc- 
cess I would not be running 
around trying to do the things 
that I am doing. I would be 
sitting on my own private 
island in the South Pacific, but 
I am not.” 

Certain questions remain 
regarding the exact source of 
the more modest wealth to 
which he admits. 

It may also be in his interest 
to understate his net worth at 
the moment, due to widespread 
reports that his wife Diane is 
seeking a potentially costly 
divorce settlement. Mr 
Thatcher denied this: “No 
divorce, and any speculation of 
it is just fanciful." 

Nevertheless there is little 
evidence to support claims that 


he hag made significant profits 
from the US business invest- 
ments he has developed since 
1987. 

Conservative party officials 
suggested that they were the 
source of a multi- milli on pound 
fortune. Instead his US busi- 
ness experience has been col- 
oured by a series of bitter 
boardroom fights and at least 
one big legal case. 

What was probably his first 
significant deal in the US was 
partly funded by his mother's 
closest business supporters. It 
has emerged from court docu- 
ments in a case involving Mr 
Thatcher that Hanson, the UK 
quoted conglomerate, and Mr 
Li Ka-Shing, the Hong Knng 
billionaire, were co-investors 
with him in a Dallas-based 


home security company, Emer- 
gency Networks. 

Hanson has given more than 
£500.000 to the Conservative 
Party since 1987 and Mr LI has 
also donated substantial sums. 

The deal was carried out in 
1987, the same year as his 
mother achieved her third con- 
secutive general election vic- 
tory in the UK, making her one 
of the most powerful politi- 
cians in the western world. Mr 
Thatcher helped put together a 
consortium of wealthy individ- 
uals and companies to invest 
in Emergency Networks in a 
complex business arrange- 
ment 

He did it with Mr Bruce 
Leadbetter. who was also his 
partner in the newly formed 
Grantham Company - an 
investment vehicle named 
after the birthplace of Mr 
Tbatcher’s mother. Mr Lead- 
better Is a long-time business 
associate of Mr Jay Pritzker, 
one of the owners of the Hyatt 
Hotel chain. 

Mr Thatcher described his 


role in putting the consortium 
together “Bruce and I sat 
down and worked out what we 
wanted to raise and wrote out 
a list of people and got on air- 
planes". 

They needed to find $1.5m. 
which Mr Thatcher said “is a 
very difficult number to raise 
because it’s a lot of money”. 

He said: “You can run 
around the golf club and raise 
a hundred grand - you can 
raise money from your dentist, 
accountant, a few friends and 
come up with a hundred grand. 

“Between one and a half and 
five million is the most diffi- 
cult because no Institution will 
look at anything where the 
minimum investment is less 
than five, they just can’t afford 
to do it." 


Among those who did agree 
to invest as limited partners in 
Xpart, an investment vehicle 
set up to buy more than 50 per 
cent of the share capital of 
Emergency Networks, were 
some of the biggest names in 
US finance and political cir- 
cles. 

A US subsidiary of the UK 
conglomerate Hanson and Mr 
Li each paid $100,000 for a 
Xpart stake giving them each 3 
per cent of Emergency Net- 
works. Others who invested 
were Mr Bruce Babbit, now US 
interior secretary, Mr Jay 
Pritzker, and Mr Joe Refsnes 
from Rauscher Pierce and 
Refsnes, the Dallas-based 
investment bank. 

Mr Thatcher also invested in 
Emergency Networks through 
Xpart and became a non-execu- 
tive director of Emergency Net- 
works. Mr Leadbetter, who 
became an Emergency Net- 
works director, was the sole 
director of a separate invest- 
ment vehicle which controlled 
the Xpart consortium’s invest- 
ment. 

Mr Thatcher denies having 
exploited his mother's position 
to put the deal together. He 
said the investment group was 
formed with a view to securing 
future reinvestment for Emer- 
gency Networks from the same 
companies a nd individuals. 

More money was indeed 
raised later on, according to 
Hanson, when another $10m 
was raised from shareholders. 
Hanson itself invested another 
$300,000 in an interest bearing 
debenture, of which all but 
$30,000 was subsequently 
repaid. 

For a time Emergency Net- 
works was successful By the 
end of 1391 the company had 36 
sales facilities nationwide and 
was installing more than 10.000 
home security systems every 
month, grossing more than 
$90m a year. 

Mr Thatcher's financial 
share in this success was lim- 
ited. He says that his share- 
holding in Emergency Net- 
works never rose above 5 per 
cent and in 1990 he sold out for 
an undisclosed sum to Mr 
David Wallace, currently his 
closest business associate and 
a former treasurer of Lady 
Thatcher's fund-raising organi- 
sation, the Thatcher Founda- 
tion. 

Grantham, the company 
jointly owned by Mr Thatcher 
and Mr Leadbetter, had a man- 


“If I had tremendous success I would 
not be running around trying to do 
the things that I am doing. I would 
be sitting on my own private island 
in the South Pacific.” 


CONTRACTS & TENDERS 



The Lebanese Company for die Development and Reconsmicdon 
of die Beirut Central Districts SAL ■’ 

Prequalification of contractors to desigri and build 
sea-front defenses in the Beirut Central District 


Established on May 5’, -1994, :die 
Lebanese Compahy fpr the Development and 
Reconstruction of the Beirut' Central District, 
SOUDERE, is in charge of financing and 
executing infrastructure and marine works 
within the "city center of feeirut and of 
developing this area, spreading out over 1 .8 
million sqtiare meters. 

SOUDERE will also treat a dumping 
site of 250.000 square meters, created on die 
waterfront during the war In the absence of 
an alternative site for refuse. Disfiguring* the 
coastal facade of the city, this 'major local and. 
regional environmental problem, will be 
treated, transformed, ‘ and expanded into 
development and public lands’ - of 
approximately 600,000 square ‘meters to 
include a vast green park, a seaside-boulevard, j 
tree-lined . promenades, 'and residential^ 
commercial and office, spaces. 

The reclaimed land will be protected 
against storms by sea-front 'defense 
structures extending oVer a distance of more 
than 1 000 meters.The structures form part of 
a double line of defense, comprising a row of 
submerged caissons, some reaching 19000 
tons each, a lagoon and a series*of quays and 
promenades. The caissons will be in water 
depths, of about 20 meters with a crest level" 
at 0.S meters so that they will 
remain invisible from the shoreline. 


• : ' r 



providing an ‘unobstructed view of the sea. 

A marina Will be constructed at each end of 
the sea-defense structures. 

SOUDERE. wishes to develop a ' 
bidders' list for the Design and Construction 
of the sea-protection works highlighted 
above, international contractors who -have 
already executed similar, works, and who have . 
access to 'the appropriate type of equipment, 
are. invited to submit a pre-qualification 
document to die address - below, to be 
received not later than November 15,1994. 

■* * , l 

. Contra c t o rs who have already 
submitted an Expression -■ of Interest 
document for these works do not need to 
take further action, unless they wish to add to 
the information already provided. 

Based on the information received 
from contractors, SOUDERE. will establish a 
short list for invitation to tender. ~ 


Address : 

The Lebanese Company for • 
the Development and Reconstruction 
of. Beirut Central District SAL 
Development Division 
Riyadh el So)h Street 

Industry and Labor Bank Building 
P.O-Box 1 19493 . Beirut - Lebanon 


. SOUDERE 

• • 

For necessary documents and further Information. pleasexomact Imad DANA, 
T4L 646 128/ Cellular I(2I2)*478 3915 . Fuo64« 1 33/ Cellular 1(212)444 8165 



agement service agreement 
with Emergency Networks. It 
was Grantham’s main business 
from 1987 to 1989. 

According to Mr Wallace, 
who was a paid member of 
staff at Grantham during this 
period, the company was also 
active in looking for invest- 
ment deals in a range of indus- 
tries including a record distri- 
bution company, two printing 
companies including one in 
Mexico, and a real estate devel- 
opment In Colorado. None of 
these yielded any substantial 
returns. 

Having sold his Emergency 
Networks shareholding Mr 
Thatcher remained on the 
board of Emergency Networks 
and in January 1992 Mr 
Thatcher and Mr Wallace 
agreed to provide a $Llm loan 
to the company, which had hit 
fmanrial difficulties a year ear- 
lier. They did this by partici- 
pating in a total $27-5m loan 
made to Emergency Networks 
by EDS, the computer services 
subsidiary of General Motors. 

It turned out to be a wasted 
effort as later that year, on 
September 15 1992, Emergency 
Network filed for protection 
from its creditors undo: Chap- 
ter 11 of the US bankruptcy 
code. It is now undergoing 
Chapter 7 proceedings in Dal- 
las, the equivalent of liquida- 
tion in the UK 


By the time of its collapse Mr 
Thatcher was no longer offi- 
cially connected with the com- 
pany, having been dismissed 
from the board in July 1992, 
according to Mr Thatcher him- 
self. His removal with Mr Wal- 
lace and other directors, fol- 
lowed a dispute with Mr 
Leadbetter. 

Mr Thatcher blames the fall- 
ing out on the dose relation- 
ship Mr Leadbetter had with 
EDS, Emergency Networks' 
main lender, while also acting 
as a director of Emergency 
Networks. 

An Emergency Networks 
board meeting was called to 
discuss the issue, but five days 
before it was due to meet Mr 
Thatcher and the other direc- 
tors were dismissed by Mr 
Leadbetter. He was able to do 
this through his control of the 
Xpart investment consortium. 

But Mr Thatcher refused to 
walk away. He and Mr Wallace 
were still owed $l.lm and they 
began legal proceedings 
against EDS last June in Hous- 
ton to get the money back. 

According to Mr Wallace the 
legal fight lasted just one week 
as EDS agreed to a secret out- 
of-court settlement 

Mr Thatcher said: "I did 
mai«» money out of Emergency 
Networks. I made in percent- 
age terms a reasonable return 
on my investment" But he 


refused to discuss the terms of 
the settlement with EDS. 

Hanson was not so lucky. It 
lost $130,000 when Emergency 
Networks collapsed, although 
Mr Martin Taylor, vice-chair- 
man of Hanson, believes most 
of that may still be recovered. 

In 1990 the Grantham com- 
pany which Mr Thatcher had 
formed with Mr Leadbetter 
was superceded by a second 
investment company, also 
called Grantham, half owned 
by Mr Thatcher and Mr Wal- 
lace through their respective 
companies - Bo mark Inc and 
Birmingham Investments. 

From Its formation the new 
Grantham company looked at 
a number of Investments in a 
range of industries as the first 
Gr antham company h a< i done. 
It was not until the end of 1992 
that it took on its first signifi- 
cant management role - in the 
Ameristar Fuels group, a Dal- 
las-based aircraft fuel organisa- 
tion which had been set up in 
June 1990 to sell jet fiiel to 
airline carriers. 

Mr Thatcher took a low pro- 
file but played a significant 
role in the company, helping 
Mr Wallace become a major 
shareholder and director. Mr 
Thatcher’s most direct involve- 
ment was through the manage- 
ment agreement the new Gran- 
tham company signed with 
Ameristar in October 1992. 


Through this Grantham was 
paid $33,000 a month by Amer- 
istar. , , 

At the beginning of 1993 Mr 
Wallace became a 20 per cent 
shareholder in the Ameristar 
group, later raising his stake to 
a controlling 50 per cent. Mr 
Wallace’s estimated $2.5m 
investment was funded partly 
by Mr Thatcher, partly by his 
own personal funds, and partly 
by a loan from a mysterious 
Jersey-registered company 
called Diversified Capital 
which Mr Thatcher introduced 
him to. 

Although not a director of 
Ameristar. Mr Thatcher 
attended a number of board 
meetings and had an office at 
the company's headquarters. 

Mr Thatcher plays down the 
extent of his involvement in 
Ameristar, but details of it are 
likely to be at the centre of a 
law suit to be filed next month 
by Mr Jay Laughlin, a former 
Ameristar shareholder. 

He is Intending to add Mi" 
Thatcher as a defendant to a 
legal petition which already 
includes Mr Wallace. Mr 
Laughlin will allege that Mr 
Thatcher and Mr Wallace con- 
spired to take control of Amer- 
istar and that Mr Wallace was 
just a “front man" for Mr 
Thatcher. 

Mr t aughlin claims Mr Wal- 
lace persuaded him to cede 
control of the company in 1993 
on the ground that additional 
investment was required. Mr 
Laughlin says he was then 
squeezed out completely tost 
January. Ameristar Fuels Cor- 
poration filed for Chapter 11 
Bankruptcy proceedings in 
August and has a deficit of lia- 
bilities over assets of more 
than $6m. 

Mr Laughlin’s lawyer is con- 
sidering bringing the law suit 
a gainst Mr Thatcher under the 
civil clauses of America’s anti- 
racketeering legislation which 
could result in Mr Thatcher 
having to pay $3m personal 
damages. 

Mr Wallace and Mr Thatcher 
deny Mr Laughlin's allegations 
and say they will be contesting 
any action. 

Meanwhile the search for 
riches goes on. Mr Thatcher 
has two major business ven- 
tures at the moment, one a 
substantial property develop- 
ment in Dallas and the other in 
Azerbaijan, the former Soviet 
republic, which is thought to 
partly involve the provision of 
high-quality paper. 

Lady Thatcher visited Azer- 
baijan two years ago but Mr 
Thatcher explained that his 
interest started when an Amer- 
ican woman familiar with 
Azerbaijan walked into his 
office. 

Mr Thatcher said: “She 
walks in one day and says: 
'Mark there are some incredi- 
ble opportunities down there, 
why don't we have a look at 
it?’. I thought I need this like a 
hole in the head, but I gave her 
a very modest budget about 
£20,000, and said: “Fine, go and 
have a look around'. 

“Now we have got a very 
modest but quite profitable 
business down there. From a 
standing start we have covered 
all our expenses and Tm com- 
fortable,” he said. 

Mr Thatcher said he was 
unlikely to “make millions” 
out of it “because the money’s 
not down there". But, he 
added, “it is bloody interest- 
ing". 


Arms payoff facts prove scarce 


By Robert Peston, WHHam 
Lewis and Jimmy Bums 

“Thatcher's millions from 
Saudi defence deal" is the UK 
journalistic equivalent of “Who 
shot Kennedy?”. 

An army of journalists has 
investigated the long-running 
allegation that Mr Thatcher 
exploited his position as the 
then prime minister’s son to 
take a fat commission on the 
£20bn A1 Yamamah military 
contract between Saudi Arabia 
and the UK 

A consensus has developed 
among the many Thatcher con- 
spiracy theorists that he was 
paid $20 m. 

Hard facts are scarce, how- 
ever. There Is one piece of doc- 
umentary evidence, authenti- 
cated as part of a US court 
case, that he played some role 


Al Yamamah deal 


in the deal This is a 1989 mem- 
orandum written by a US 
defence company executive, 
purporting to be an account of 
the executive's conversation 
with an employee of the US 
embassy in Riyadh about 
Saudi defence sales. 

It contains the tanking 
but obscure sentence: “This 4 
bil US was memoned In con- 
nection with M. Tha tiler’s (sic) 
son." 

A rather more comprehensi- 
ble account of his alleged role 
in defence sales is contained in 
another company's memoran- 
dum, although this has never 
been authenticated. It was 
passed by Mr Jeffrey Rooker, 
the Labour MP, to Downing 
Street for farther investigation 


- but the government has 
never commented on its verac- 
ity. 

Mr Howard Telcber, an 
adviser to the US National 
Security Council during the 
Reagan presidency, insisted 
two years ago that he saw 
intelligence and diplomatic dis- 
patches confirming Mr Thatch- 
er’s involvement in Al Yama- 
mah. 

More recently The Sunday 
Times newspaper reproduced 
transcripts of alleged conversa- 
tions between arms dealers 
and agents of the Saudi royal 
famil y which appeared to con- 
firm that Mr Thatcher had 
acted as an agent in that HpaI 

The Sunday Times has, how- 
ever. disclosed that it does not 
possess the original tapes - 
and anyway the transcript 
gives no detail of payments to 


Mr Thatcher. Officials and poli- 
ticians have privately con- 
firmed that in the mid-1980s Mr 
Thatcher was mixing in the 
circles of those who were 
involved in the negotiations - 
so the journalistic quest for 
this holy grail of alleged sleaze 
will go on. 

For his part Mr Thatcher 
says he is a Mend of Mr Wafic 
Said, the Syrian-born financier 
who acted as go-between for 
the British negotiators on Al 
Yamamah. 

But he insists that the rela- 
tionship with Mr Said is rooted 
in the close friendship between 
his wife. Diane, and Mr Said’s 
wife, Rosemary. 

Mr Thatcher said: “Merely 
because I know this man does 
not mean to say that he is 
going to pay me £i2m because 
1 am a nice guy." 


Dabbler 


By Jimmy Bums 

and Robert Peston 

The little bit of help which Mr 
Mark Thatcher received in his 
US investment business from 
his mother's corporate friends 
Is strikingly reminiscent of the 
affair which first drew atten- 
tion to his business career. 
This was his role as a consul- 
tant more than a decade ago 
working for Cementation. 

Cementation's owner, Trafal- 
gar House - like Hanson and 
Mr Li - is another substantial 
Conservative party donor. 


in a variety of sectors 


The career 


There was a political storm 
when his role for Cementation 
was disclosed, because Oman 
awarded the company a con- 
tract for building a university 
at about the same tiiwc as his 
mother visited the country. 

Mr Thatcher was at that 
period working with his friend 
Mr Stephen Tipping, a former 
racing driver, in a consultancy 
company called Monteagle 
InternationaL 

Mr Tipping said this week 


he remaineda fri 
mer prime minisi 
One of Mr Th 
visible bus iness 
in Hong Kong 
where he was pai 
television com: 
whisky and i 
Thatcher bad b 
thing of an in ten 
rity in his alterm 
rally driver, havi 
the Sahara deserl 


He has also dabbled in a 
variety of sectors as a “consul- 
tant" or middleman with 
mixed results. Mr Leon Walger, 
an Argentine businessman, 
this week talked of his "frivo- 
lous business relationship” 
with Mr Thatcher. 

Mr Walger said: "We wanted 
Jo sell electrical power stations 
to Peru and there was a project 
JJ Paraguay to build a railway 
from Asuncion to Paranagua 
port in Brazil for the shipment 
of soya." 

Additional reporting by 
Da*nd Pilling in Buenos Aina. 




^WiP*7J 




NEWS: UK 


Airline industry raps new UK tax 


By Paul Batts, 

Aerospace Correspo n dent 

The introduction tomorrow of a new 
airport departure tax in Britain was 
yesterday attacked by the International 
Air Transport Association (IATA) as an 
example of government taxation poli- 
cies undermining' thp recovery of the 
atHmp industry. 

Ur Pierre Jeanniot, director-general 
of the trade organisation that repre- 
sents more than 200 tntpmnfirma) air . 

tines, criticised the new UK tax in his 
annual report, prepared for IATA’s 
annual meeting in Mexico City today. 

At a time when the airKna industr y 
was finally showing signs of profitabDr 
ity, it was confronted with government 
proposals to impose fees on passengers 
to pay for a variety of activities such as 


supporting United Nations peace-keep- 
ing forces, paying membership-fee 
arrears to international bodies, upgrad- 
ing meteorological equipment, infra- 
structure development and reducing 
environmental pollution. 

“To single out international air trans- 
port as a means of funding such activi- 
ties is discriminatory.” IATA says in its 
animal report 

IATA confirmed that the industry 
had lost gtlbn an international sched- 
uled services alone last year and had 
accumulated losses for the past four 
years totalling $UL6bn. 

But things were improving, with traf- 
fic now growing more quickly than 
capacity. Mr Jeanniot said airlines' were 
expected to show a modest profit an 
international scheduled services of 
about $lbn this year. IATA is also fore- 


casting average annual growth of 6.6 
per cent for international passenger ser- 
vices between now and 1998 and aver- 
age annual growth of 9 per cant for 
freight during the same period. 

Although this was “good news", he 
warned that "profitability of $lbn 
would represent less than 1 per cent of 
turnover against a steady requirement 
for &6 per cent." 

Britain's new tax involves a levy of £5 
for travel to European destinations and 
£10 to other international destinations. 
However, airline expected the £5 levy 
to apply only to EU member states, and 
have been charg in g £1Q tax on tickets 
for travel after November 1 to European 
destinations outside the EU. 

But the tax for all European destina- 
tions has now been set at £5. and air- 
lines will be refunding passengers who 


have been overcharged' at check-in. 

Mr Jeanniot said: "Taxes simply 
increase airline costs at a time when 

consigners are demanding lower fares.” 

Hie new UK tax is at the middle of 
the scale of departure taxes elsewhere. 
In Europe, these include: £2.40 at 
Amsterdam, £4.80 at Antwerp, £14 at 
Athens, £9.50 at Brussels. £4.50 at 
Copenhagen. £12 at Faro, £2.60 at 
Frankfort, £540 at Rome and £120 for 
domestic fli gh ts anrf £2 for international 
flights at Paris. 

Airport taxes at US international 
gateways range from DSJ1S-USS21, 
while all Canadian international gate- 
ways charge C$19. 

The departure tax at Tokyo is £1320. 
while Hong Kong charges £420, Beijing 
£4.70, Bangkok £520, Auckland £7.75, 
Bombay £620 and Singapore £620. 


PM backs minister as I Trade mark law 


‘sleaze’ debate looms 


By Phffip Stephens, 

Political Edttor 

Mr John Major yesterday 
offered strong backing for Mr 
Jonathan Aitken, the Treasury 
chief secretary, as the govern- 
ment prepared for a full-scale 
Comm o ns confrontation over 
allegations of ministerial 
sleaze. 

The prime mons ter's stance 
came amid strong attacks by 
Tory MPs on Mr Peter Preston, 
the editor of the Guardian; fol- 
lowing ftp disclosure that his 
newspaper had used House of 
Commons notepaper to obtain 
a copy of Mr Aitken’s £1,000 
Ml for a stay at the Sits Hotel 
in Faria last year. 

Mr Aitken meanwhile dis- 
missed suggestions that he had 

broken pa rliamentar y rules by 

not declaring a company direc- 
torship. 

Mr Major's hacking for Mr 
Aitken followed renewed 
demands from Labour for the 
Commons' to hold public 
rather than private h paring s 
into allegations of financial 
impropriety. 

But Downing Street said Mr 
Major had not budged from his 
view that public hearings 
would prompt unfounded 
"smears" against innocent 
MFs. Senior Conservatives 
added that the government 
could not intervene in the 


Tfte members of the Noian Commission, set up by the 
British government to review standards in public life, 
were named at the weekend. They are: 

• Tom King, former Conservative Defence secretary; 

• Peter Shore, former Labour Trade secretary; 

• Lord Thompson of Monifleth, Liberal Democrat 
peer who was previously an EC Commissioner; 

• Sr Clifford Boulton, retiring Clerk of the House of 
Commons; 

• Sir Martin Jacomb, chairman of the British Council 
and deputy chairman of Barclays Bank; 

• Prof Anthony King, politics professor at the 
University of Essex and a frequent BBC television 
commentator; 

• Sir Wffiam Utting, chairman of fire National 
Institute for Social Work; 

• Dame Anne Warburton, former British 
Ambassador to Denmark and the United Nations, and 

• Diana Warwick, chief executive of the Westminster 
Foundation for Democracy. 


has the sweet 
smell of success 


work of the all-party privileges 
committee without challenging 
its long-standing tradition of 
independence. 

Labour, whose MPs are boy- 
cotting the present investiga- 
tions. has tablpd a motion for 
today’s Commons debate 

i tonaniting p ublic Tiparrng a by 

the privileges committee of 
charges against individual 
MPS. But a pw Bmnwjnt awipnii. 
men* says the committee fteetf 


must decide an its procedures. 

Despite today’s expected con- 
frontation senior Conserva- 
tives stressed that there was 
still scope for a compromise 
between Labour and Tory MPs 
on the committee. 

One suggestion was that 
individuals' evidence could be 
heard in private white the com- 
mittee held public sessions to 
debate wider points of princi- 
ple. 


By Robert Rice, 

Legal Correspondent 

UK businesses will be able to 
register three-dimensional 
shapes, sounds and even 
ctmTIb as trade warira for the 
first time today when the new 
trade marks legislation comes 
into force. 

The 1994 Trade Marks Act is 
designed to streamline and 
simplify procedures for protect- 
ing brands and bring UK trade 
marks law into Hue with the 
rest of the European Union. 

The UK Patent Office esti- 
mates the new law will save 
British b usiness up to Efiftni in 
the first year and £30m a year 
thereafter. 

Half the savings in the first 
year will come from the UK’s 
ratification of the Protocol to 
the Madrid Agreement cm the 
international registration of 
trade marim This wiTl allow 
UK companies to register their 
maiks in all countries which 
are party to the Madrid Agree- 
ment in a single application. 

The new laws have produced 
a welter of advice from trade- 
mark lawyers. London solici- 
tors Lewis SffVrn are adv ising 
all their cltants to regis- 
tration for their names, logos 
and packaging. 


Once branding has been pro- 
tected there will be no need to 
prove established goodwill and 
misrepresentation to establish 
passing off, or to fight infringe- 
ment of copyright or design 
right battles, it says. 

Some marks will still be 
excluded from registration, 
however. Names which are 
exclusively descriptive or geo- 
graphical, shapes which result 
from the nature of the goods or 
which give substantial value to 
the goods, national flags, the 
Red Cross and royal insignia 
are all excluded. This casts 
doubt an whether gnrh tilings 
as York Trailers, Dimple 
Whisky bottles and Jif Lemons 
will be registrable. 

In addition to making it 
easier to apply tor an interna- 
tional trade mark under the 
Madrid Protocol, the act sets 
out procedures for applying for 
a Community Trade Mark. 

Community trade marks, 
expected to come into force in 
1996, win allow UK businesses 
to get EU-wide protection for 
their mark with one applica- 
tion to the European Trade 
Marks Office in Alicante, 
Spain. At the moment compa- 
nies have to file separate appli- 
cations in each EU member 
state. 


UK NEWS DIGEST 

Milk row as 
dairy market 
is shaken up 

Britain's Dairy Trade Federation, which 
represents milk processing companies, is to 
complain to the Office of Fair Trading anJ 
European Commission about the shake-up of 
the UK dairy market which begins tomorrow. 

The market will undergo its biggest Change 
for 61 years when the Milk Marketing Board, 
the statutory buyer of milk, is ‘abolished and 
farmers become free to sell to any purchaser. 

The Dairy Trade Federation wifi make a 
for mal complaint to ft* Office of Fair Trading 
and the European Commission on the grounds 
that a regulated public monopoly is being 
replaced by an unregulated private one. 

The complaint is directed at Milk Marque, 
the voluntary farmers’ co-operative set up by 
the board to act as a milk broker. Milk Marque 
has secured 66 per cent of supplies in En gland 
and Wales - deregulation is taking place 
simultaneously in Scotland and is due next 
April in Northern Ireland. The rest of the 
£32bn market is fragmented among about 40 
dairy companies or small groups of farmer-pro- 
cessors buying direct from farms. 

The dairy companies say this gives Milk 
Marque the power to push prices up sharply - 
an unreasonable position when European milk 
quotas prevent British farmers producing 
more than 85 per cent of the domestic market’s 
needs. 

Move to save Post sale 

Mr Michael Heseltine, Britain's trade and 
industry secretary, has launched a last-ditch 
effort to rescue his proposed sale of a majority 
stake in the Royal Mail ahead of a cabinet 
decision this week on whether to drop the 
privatisation. 

With a dozen Tory MPs publicly committed 
to oppose the sale of a 51 per cent in the Royal 
Mail, Mr Heseltine was said to be considering 
a range of possible co mp r om ises to "buy off” 
the rebels. Mr Kenneth Clarke, the chancellor, 
is also determined that the sale should go 

ahparf- 

The two main cabinet supporters of privati- 
sation will seek to persuade Mr John Major 
that some at least of the Tory opponents could 
be persuaded to support a sale if stronger 
guarantees were given on the future of email 
post offices. 

But there were also suggestions among Tory 
MPs that, as a fall-back position, Mr Heseltine 
was ready to consider legislating initially for 
the sale of a minority stake or for a majority 
sale phased on over a number of years. 

The Treasury, however, remains strongly 
opposed to the idea that the Post Office be 
given much greater freedom within the public 
sector. Mr Clarke has argued that such a move 
would significantly undermine the present 
rules for public borrowing. 


Upbeat inflation view 

Britain will not experience a sharp return to 
wage inflation or an escalation in pay settle- 
ments over the next twelve months, says the 
independent industrial Relations Services in 
its annual review of pay prospects published 
today. The report believes "any upturn in pay 
awards will be small in the immediate future 
with settlements likely to rise by between 3 to 
32 per cent in the early months of 19895". 

IRS argues that the downward pressure on 
settlements of recent years - poor corporate 
performance and employers' inability to raise 
their product prices - remains strong. 

Meanwhile, a report by City stockbroker 
Goldman Sachs says that UK interest rates 
should rise soon to hold down inflation. 

The report says that analysis of the firm's 
inflation indicators provides "a strong case” 
for the rise if the government wants inflation 
to remain in its target range of 1 per cent to 4 
par cenL The wanting comes ahead of tomor- 
row's Rank of England third quarter inflation 
report and Wednesday's meeting between the 
chancellor of the Exchequer and Mr Eddie' 
George, the Bank’s governor. 

Minimum wage split 

Four out of ten UK engineering companies 
support the introduction of a statutory mini- 
mum wage, says a survey from the Engineer- 
ing Employers Federation. 

Although just over half those polled opposed 
the idea, the level of support for a statutory 
minimum wage among 100 engineering busi- 
ness leaders is surprisingly high. 

A similar number believed a minimum wage 
would have no effect on unemployment levels, 
while 51 per cent said the jobless total would 
rise. More predictably, two-thirds of companies 
said that accepting the provisions of the Euro- 
pean Union’s Social Chapter would lead to 
substantial job losses in the UK. 

The results are contained in the EEF Manu- 
facturing Matters Survey, conducted in the 
run-up to today's Manufacturing Matters con- 
ference in London. 

More than half of those polled said short- 
termism by the Government had contributed 
to the decline in British industry over the past 
decade. 

Safeway joins cola war 

Safeway, Britain’s third-largest food retailer, is 
joining the cola wars with the launch of an 
own-label cola called Safeway Select, putting 
further pressure on brand leaders Coca-Cola 
and Pepsi. 

Safeway’s product, on sale in all its stores 
from today, follows the high-profile launch of 
Classic Cola by J Sains bury, the UK’s largest 
supermarket group, of Mr Richard Bran- 
son’s Virgin Cola. 

Hie launch throws Britain’s three leading 
superstore chains into a head-to-head battle, 
since Virgin has signed a six-month exclusive 
distribution deal with Tesco. All three prod- 
ucts are made by the same manufacturer, the 
Canadian soft drinks company Cott, but each 
claims to have its own unique formulation 
with which to attack the UK cola market, said 
by Safeway to be worth £LSbn a year. 


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FINANCIAL TIMES 


MONDAY OCTOBER 31 1994 


MANAGEMENT 


Vanessa Houlder pvamines why Total Quality Management has been slow to take root in Europe 


Two steps forward, 
one step back 



T otal Quality Management, 
one of the most pervasive 
management doctrines of 
the 1980s, has lost some of 
its glamour in recent years. But its 
central idea - that quality should 
be applied to every aspect of an 
organisation - still commands pas- 
sionate support from its converts. 

"Quality is a way of life," declares 
Jan Timmer, president of Philips 
Electronics, the Dutch group. Total 
quality is not a passing business Cad 
but embedded in the permanent 
principles of human philosophy.” 
says Louis Schweitzer, president 
directeur general of Renault, the 
French car company. . 

These endorsements, made at a 
European Quality Management 
Forum in Amsterdam this month, 
reflect the strength of enthusiasm 
expressed by exponents of the qual- 
ity movement. Its advocates are elo- 
quent about its central themes, 
namely the importance of the cus- 
tomer, the case for empowering 
employees, the need to view busi- 
ness activities as processes and the 
goal of continuous improvement 
The rhetoric associated with TQM 
is underpinned by a serious debate. 
Is Europe once again falling behind 
on quality? If so, is TQM. which is 
no longer viewed as a panacea in 
the US, the best way forward? 

Europe's take-up of TQM remains 
well behind that of the US. which 
adopted TQM in the 1980s, and 
Japan, where TQM first became 
entrenched in the 1950s and 1960s. A 
survey by the European Foundation 
for Quality Management the Brus- 
sels-based body which organised the 
Amsterdam conference, found that 
30 per cent of European companies 
claim to have adopted TQM. com- 
pared with 55 per cent in North 
America and 53 per cent in Asia. 
Even fewer European companies - 
a mere 5-10 per cent - are actively 
pursuing TQM, it says. 

Champions of TQM view these 
figures with dismay. "European 
companies will fall short on quality 
if they do not participate in TQM,” 
according to Geert de Raad, the 
EFQM’s secretary general. The 
European Commission is also con- 
cerned. It has proposed a "European 
policy for the Promotion of Quality'* 
in a recent white paper. 

A particular concern for the pro- 
moters of TQM is to extend its 
reach into countries, such as Ger- 
many. where it has made little 
impact, although BASF, Siemens, 
Grundig and Volkswagen are nota- 
ble exceptions. 

"In Germany where quality has 
always been established, TQM is 
not as easily accepted as in many 


other countries,” says de Raad. 

The mixed reviews earned by 
TQM should not necessarily be a 
deterrent. When the Conference 
Board, a business membership 
organisation, reviewed a large num- 
ber of reports on TQM last year, it 
concluded that "progress in this dif- 
ficult area appears generally posi- 
tive". 

That said, many problems recur 
in implementing TQM. A particular 
challenge concerns winning the 
support of employees, especially in 
companies where morale is under- 
mined by redundancies or where 
the top management is seen to lack 
a "gut commitment” to quality. 


Middle managers, in particular, 
are often unenthusiastic about 
“empowering" their subordinates. 
“Middle management are going to 
find it hard to delegate the responsi- 
bility when their own jobs depend 
on meeting budget targets.” says 
Peter Herriot, director of research 
at. Sundridge Park Management 
Centre in the UK. 

Another common criticism of 
TQM is that it is too inward- 
looldng. An obsession with method- 
ology and standards can distract a 
company from chasing sales. Exces- 
sive red tape can make employees 
disillusioned. An early quality pro- 
gramme run by Philips Electronics, 


for instance, failed because of “an 
overemphasis on systems and pro- 
cedures and forms to fill", Timmer 
explained at this month’s Amster- 
dam gathering. 

Bat champions of TQM believe 
that it should focus the minds of 
managers on both external and 
internal factors. The model publi- 
cised by the EFQM, for instance, 
stresses business results, the impact 
on society, people satisfaction and 
customer satisfaction, as well as 
internal issues such as processes, 
policy, people management and 

leadership . 

One of the tasks facing promoters 
of TQM is how to increase the 


uptake of total quality in different 
types of organisation. Its most nota- 
ble successes have been concen- 
trated in manufacturing companies, 
primarily in large international 
companies. All three winners of the 
European Quality award sponsored 
by the EFQM have, so far, had for- 
eign parents. 

The relatively low number of 
quality accolades won by the ser- 
vice sector in Europe can partly be 
explained by their tendency to 
adopt TQM later than manufactur- 
ers, many of which were brought 
into total quality by adopting qual- 
ity s tandar ds 

Companies with a strong market- 


ing bias have also moved into TQM 
relatively late, partly because they 
found TQM*s emphasis on customer 
satisfaction “boringly bland", 
according to John Sharpe. chairman 
of Birds Eye Wall’s. He believes, 
however, that TQM can help compa- 
nies address neglected issues. 

Smaller companies have also 
tended to be slow to take up TQM. 
partly because managers may feel 
too busy to undertake the extra 
work and partly because they are 
often more closely in touch with 
their customers than larger compa- 
nies. 

Increasingly, however, they may 
be unitor pressure to fall in line 
with the demands of larger custom- 
ers. 

“Unless suppliers are in tune with 
the quality demands of their cus- 
tomers they will not be able to meet 
their demands," says Clive Capp, 
managing director of Howard UK. 
an IT support company that has 
enthusiastically endorsed TQM. 

Public-sector organisations are 
also begining to experiment with 
TQM The principles of TQM for 
non-profit organisations are no dif- 
ferent than from any commercial 
organisation, once they d efi n e the 
nature of their customers and their 
results, says Ian Raisbeck, director 
of quality at the Royal Mail. The 
EFQM is making efforts to bring 
more small companies and non- 
profit organisations into its fold. At 
the same time, it is working on pro- 
moting TQM in under-represented 
countries, notably Germany. 

T he attitude of German compa- 
nies may be changing, 
according to the findings of a 
separate report by the Conference 
Board. 

“As global competition intensi- 
fies, German companies are con- 
cluding that a narrow definition of 
product quality is no longer suffi- 
cient to ensure success,” it says. 

Evidence suggests, therefore, that 
TQM is gradually building up 
momentum in Europe, although 
progress remains slow in several 
sectors and countries. 'Hie promot- 
ers of TQM have a tough challenge 
in sustaining interest hi TQM in the 
notoriously fickle marketplace for 
management concepts. 

Enthusiasts, such as Schweitzer, 
are convinced that TQM will not be 
superseded by other management 
fads. 

"The principles of TQM are a 
matrix in which many other doc- 
trines fit,” be says. “The basic prin- 
ciples of total quality are perma- 
nent principles of good 
management" 


Satisfaction 


guaranteed 


D esign to Distribution (D2D), 
the ICL subsidiary which 
won this year's European 
Quality Award, attributes a 
f undam ental improvement in its 
performance to total quality 
management “Quality management 
satisfies customers, reduces costs 
and motivates people,” says 
Alastair Kelly, managing director. 

TQM has helped D2D, a contract 
electronics manufacturer, achieve a 
300 per cent increase in staff 
productivity since 1980 and save 
£2m a year from “getting things 
right first time." he says. 

But after 10 years of working on 
TQM, be emphasises that the 
technique is “no quick fix”. DSD has 


gone through several stages of 
using TQM, in which it 
experimented with different 
techniques and addressed a 
succession of issues. 

The company had to reappraise 
its approach at one point After 
many years of applying TQM and 
winning various awards. D2D had 
disappointing results in 1990 when 
it polled customers for their views. 
It found that many of their 
requirements had not been included 
in the company’s evaluation model- 


As a result it adopted the 
business model constructed by the 
European Foundation for Quality 
Management which encouraged it 
to take a more comprehensive 
approach to quality issues. As part 
of this, it tried to improve customer 
service by training staff and 
introducing a scorecard system to 
allow customers to specify exactly 
what they needed. 

The EFQM model requires a 
company to assess itself on nine 
issues, namely leadership, policy 


and strategy, people management, 
resources, processes, customer 
satisfaction, people satisfaction, 
impact on society and business 
results. 

Many companies use this model 
for their own assessment purposes 
without putting themselves forward 
for the European Quality Award. 
Those companies which do go 
forward for the award prepare a 
report which is scrutinised by a 
six-member team of assessors; 
companies that are short-listed 


receive a site visit 

The companies deemed to have 
demonstrated the highest standards 
of TQM are given a quality prize; 
the best is given the European 
Quality Award. This year's other 
prize winners were IBM SEMEA, 
which manages IBM operations in 
southern Europe, the Middle East 
and Africa, headquartered in Italy, 
and Ericsson of Spain, a Spanish 
subsidiary of the 
telecommunications company. 

All applicants for the award 


receive a feedback report 
hi g hli ghting 1 their strengths and 
weaknesses. For D2D, its 
assessment showed that It needed 
to improve its performance 
concerning its “impact on society” 
and “business results”. 

Winning the EFQM's award does 
not mean D2D can relax in its 
efforts to improve the quality of its 
business, says Kelly. “It is a 
milestone but not the end of the 
journey," he says. “The moment we 
stop changing we start to die.” 

Brochures for self assessment and 
applications for the 1995 atoard are 
available from EFQM, Avenue des 
Pleiades 19, 1200 Brussels, Belgium. 


Of fish eads, baked beans and cola 


T here are signs, say 
researchers, of a tilt in con- 
sumer sentiment away 
from cut-price, own-label 
goods and back towards higher- 
priced branded ones. But the 
“demanding consumer" - acutely 
value-conscious and sceptical about 
advertising claims - is now said to 
be a fixture of the retail landscape. 

That sounds correct to me, 
though 1 find myself moving in the 
opposite direction to the general 
mood. For example. I have boycot- 
ted own-label food products for 
years. This followed a visit, one 
freezing morning, to a scene from 
hell: a processing plant in Hull 
where fishwives working for a 
famous food manufacturer were 
gutting and filleting the catch. My 
fur coat made them giggle. 

I approached one of the women. 
She was placing each brilliantly- 
sliced fillet in a tray packed with 
ice and throwing the head, tail and 
bones into a bucket at her elbow. 

I said: “What’s the bucket for?" 
She replied that the scraps In the 


bucket were used by her employer 
to make own-label fish-fingers for a 
supermarket chain. I said I found 
that shocking. She said: “You’ve 
’ardly lived, my robin. There’s noth- 
ing wrong with "eads." 

After that I ignored own-label 
products, believing, in any case, 
what marketing folk told me: that 
the higher prices charged by mak- 
ers of branded goods reflected what 
they said they did: superior product 
development and quality as trum- 
peted. expensively, in their advertis- 
ing campaigns. Yet own-label prod- 
ucts have got better and better. 
Today, almost all my supermarket 
purchases of commodity-type items 
are retailers’ own-iabeL 

Some weeks ago I had lunch with 
David Sainsbury. chairman of J 
Sainsbury, Britain’s leading grocery 
chain. I discovered that we both do 
our supermarket shopping at the 
same branch of Sainsbury ’s, the one 
near Notting Hill. I find this 
supremely comforting because it 
strikes me that the ferocity of the 
price-cutting and the IQ of the staff 


MICHAEL 

THOMPSON-NOEL 



are likely to be most pronounced in 
the branch of Sainsbury’s round 
which the man who owns 17 per 
cent of the shares is wont to push 
his trolley. 

I asked Sainsbury about his pub- 
lic row with Coca-Cola over Sains- 
bury’s look-alike own-label cola. 
Coke bad claimed, crossly, that the 
look-alike's packaging imitated its 
own too flatteringly. 

Sainsbury was vivaciously unre- 
pentant. "Fifty-five per cent of our 
[packaged grocery] sales are own-la- 
bel," he said. “We have always been 
in the business of finding better- 
value products than the branded 
ones. For the first time a cola has 


been found that is as good as Coca- 
Cola. That is a new situation for 
Coke." 

And a worrying one, too. Today, 
every Tom, Dick and Harry has his 
own cola. To survive, owners of 
commodity-type brands (not Just 
grocery ones) will have to raise 
their game. The other morning I 
was round at Sainsbury’s, studying 
the shelf-space devoted to baked 
beans. What I saw was a continuing 
death-struggle between Heinz and 
Sainsbury s own brand. 

Heinz offers a few lacklustre vari- 
ants, including baked beans with 
bacon or with eight pork sausages. 
But nothing remotely hip. Why 


doesn’t Heinz give us baked beans 
with truffles, or with goose leg? 

The president erf Heinz is Tony 
O’Reilly. Next time you see him. 
ask him what he’s doing. 


Hugo Boss, Germany’s leading 
maker of “upscale” menswear, has 
a thrusting chief executive: Peter 
Littmann. 4& Lfttmann is astute, 
but he ought to study some of the 
promotional material pumped out 
by corporate HQ in Metzingen. It Is 
some of the wackiest stuff imagin- 
able - a terrifying example of what 
might emerge if you hooked up 10 
word processors in your marketing 
department to 10 word processors in 
your PR agency and let them get on 
with it 

Littmann ’s career has included 
broadcasting, film-making, carpets, 

porcelain. In March last year he was 
made boss of Hugo Boss, and five 
months later split the Boss range 
into three distinct brands. They are 
called HUGO Hugo Boss, BOSS 


Hugo Boss, and BALDESSARINI 
Hugo Boss, after the chief designer. 

HUGO Hugo Boss is for younger 
customers; BOSS Hugo Boss focuses 
on business-wear; and BALDES- 
SARINI Hugo Boss is positioned as 
a top-flight range of hand-tailored 
clothes. HUGO Hugo Boss man and 
BOSS Hugo Boss man are reason- 
ably exotic dudes. But the most 
exotic dude is BALDESSARINI 
Hugo Boss man. 

According to the word processors, 
BALDESSARINI Hugo Boss man 
has “charisma and sovereign 
ways ... He is cosmopolitan and 
conservative, whether he is an exec- 
utive or a successful artist with a 
passion for perfection ... He 
shows a marked interest in culture; 
his sports - golf, yachting, hunting 
- are as distinguished as his life- 
style." 

On and on it goes, indefatigably, a 
mish-mash of images, utterly sur- 
real. They call this marketing? Litt- 
mann should sprint round HQ and 
rip all the plugs out. Thine* need to 
cool down at Hugo Boss. 



PIONEERS AND 
PROPHETS 


Douglas 

McGregor 

Knowingly or otherwise, every 
western manager who Is 
applying the lessons learned on 
an organisational “change” 

■ programme of any kind has 
become a follower of this social 
psychologist-turned college 
president (1906-1964). 

His influence has reached us 
by two routes over the past 
decade: through the work of 
popular writers such as Tom 
Peters, Robert Waterman, 
Rosaheth Moss Kanter and 
Warren Bennis, the leadership 
expert who was a pupil of 
McGregor, and via his impact on 
modem performance appraisal . 
processes, reward systems and 
other personnel management 
techniques. 

McGregor’s main contribution 
came just four years before his 
death. In The Human Side of 
: Enterprise, a book which 
transformed into a convincing 
managerial theory the 
overworked and often cynical 
mantra that “an organisation’s 
greatest asset is its people". The 
theory was taken to extremes by 
the “human relations” school 
which followed McGregor: its 

- excessive emphasis on 
bottom-up management at the 
. expense of authority damaged 
rhls credibility. But the more 
■balanced practice of his 
-principles in recent years has 
rightly restored his reputation. 

McGregor’s creed will be 
familiar to every manager 
trying to operate in a flat, 
high-performance organisation 
in Europe or the US today; that 
most people, in most situations, 
are best motivated by being 
treated as part of a community 
where objectives and 
responsibility are shared. They 

will then exercise self-direction 
and self-control, and use their 
creativity to help. resolve the 
"organisation's problems. ' 

. This doctrine oF “intrinsic” 
motivation, which McGregor 
christened “Theory Y”, 
contrasted starkly with the 
traditional comxnand-and- 
conirol doctrine propounded 
earlier in the century by, among 
others, Henri Fay 11, and still 

■ practised by many organisations 
today. 

■McGregor called this “Theory 

- and lambasted managers for 
shbsoibiiigio its underlying 

■ assumption that most human 
beings are lazy, avoid work and 

' responsibility and need to be 
controlled, threatened and 

■ kicked in order to contribute 
even just adequately to 
organisational objectives. 

McGregor’s distinction 
between theories X and Y has 
become so influential in the US 
and Europe over the past few 
years that ft has been taken as 
being applicable around the 
world. Bnt this is open to 
question. In a speech last month 
Gem Hofstede, an expert in 
national cultures, argued that 
the distinction is irrelevant, for 
instance, in south-east Asia, 
where people’s attitudes to 
work, and to the groups of 
which they form part, are very 
different from those of 
westerners. 

As with so many other 
culture-bound management 
principles - eastern as well as 
western - the worst mista ke of 
all Is to think that McGregor’s 
approach constitutes the “one 
best way* of doing things in all 
circumstances. To embroider an 
accolade from Bennis. 
“McGregorian chant” may be 
“profoundly true” In the west, 
but not for. everyone 
everywhere. 

Christopher Lorenz 



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FINANCIAL TIMES MONDAY OCTOBER 31 1994 




1st -M 

TIH.' a.JJ 


lllllllllllllllllllllllllllllllllllllllllllllll 



, . : ' ni ^ias 




ns 

Kfr\ 


September 199 a 


IB'S # 1 

5 $?‘ 


Pesetas 45.000.000.000 
Underwriter* Agent 

Bm. . ■ Jr AVgm un 

ARCENTARIA 


Genefa&tat de Catalunya 

Covporackk 

daftteSolTaiavUA 


Pesetas! 3.000.000.000 


Underwriter & Agent 


Bcatcedr Krqurifn 

ARGENTARLA 


IQSA 


Pesetas a.ooaooo.ooo 


Underwriter & Agent 

Ba me Jr A’ltinn 

ARGENTARIA 


EMT 


Pesetas 1^00.000.000 


Underwriter 


Inn 1 ifr a 

ARGENTARIA 


January 1994 


(?) 


Pesetas 3a000.000.000 


Lead Manager & Agent 

Scat. o i tr .Vf p ve a 

ARGENTARIA 



Gobiemo Batear 
Pesetas I5.00a000.000 
Lead Manager & Agent 

torn dr Nrrwfcu 

ARGENTARIA 


ARGENTARIA 


2 Subonfinated Issues 
4 ibex Issues 

Lead Manager & Agent 

BaarvJf K/rfoma 

' ARGENTARIA 


U.S. Dotes 313.000.000 

Supplemental Agreement 
Underwriter & Agent 

Banco Jr ,'w-tM «« 

ARGENTARIA 


EHPUtAO&J 
Sjjjg GENBtALDE 
*■**'41 ARAGON 

Pesetas 15.000.00a000 
Underwriter 

Banco Jr Nt^uchm 

ARGENTARIA 


KINGDOM OF SPAIN 
ECUS 6i300.000.000 

Senior Underwrit e r Lead Manager 

toi»»*.W|e«ro. 

ARGENTARIA 


Canal de 
Isabel n 


$ 



Pesetas 12.OOaOOO.QCX3 


Underwriter & Agent 

Banco Jr Sr^ann 

ARGENTARIA 


SOCEFINSA 
Pesetas 12.000.000.000 
Underwriter & Agent 

ImuilrKium 

ARGENTARIA 



Regidn de Murcia 
Pesetas 7.253.000.000 

Underwriter & Agent 

Ram' Jr Nnttwi 

ARGENTARIA 



Pesetas 5.500.000.000 


Underwriter & Agent 

Banco Jr Nrftrtn 

ARGENTARIA 


Gobiamo Balear 

Pesetas 9.822.072.366 
Underwriter 

Bamo Jr Urturtct 

ARGENTARIA 


Generaltat de Catalunya 

CorpandA Catabna 
teRMftlTMmMii 


Pesetas 4.384.000.000 


Und er wri t er 

&z*TiJr.Vrnvvu 

ARGENTARIA 



' ' ’ ' Maeft 1994 

July 1904 

’* February ?904 



shbk 


eURDFIMR 

I/A 

EUROPEAN INVESTMENT BANK 

Pesetas 10.000.000.000 

Ba) tftfrhc Lamdcuoub 
lor AabaaSnaakdrraati 

Pesetas 5aooo.ooo.ooo 

Joint Bookrunner 

Pesetas 10.000.000.000 

Joint Booknawer 


Joint Lead Manager 

Boati-drftrvim 

Banco Jc SrfcOm 

Banco Jr Srpnnoa 

ARGENTARIA 

ARGENTARIA 

ARGENTARIA 


January 1994 


GeneraHtat de Catahaiya 

Convertible Term Loan 
Pesetas 25.000.000.000 

Lead Manager & Agent 

Bonce Jr Sieve ka 

ARGENTARIA 


T’ SevUanade 
Eiectriddad 


Pesetas 20.75a000.000 

Lead Manager & Agent 

BmoJr NrjroJm 

ARGENTARIA 


Convertible Term Loan 
Pesetas 1SOOO.OOO.DOO 

Lead Manager ft Agent 

torn * Sryn rui 

ARGENTARIA 


Gobiemo da Navarra 

Pesetas 8.000.000.000 

Lead Manager & Agent 

An.«i-«>MU 

ARGENTARIA 


Pesetas 1 5DOO.OOO.OOO 


Lead Manager & Agent 

dwni Jr MfTta 

ARGENTARIA 


BCL 

Banco de Cr&ffio Local 

Pesetas 3.000.000.000 

Lead Manager a Agent 


ARGENTARIA 


^ Banco de Negocios 

Qa ARGENTARIA 


Septambor 1994 


Cnrporotr hIb Rnnru 

ARGENTARIA 


French Francs 1.50a000.000 
Joint Lead Manager 

BcMtCv Jr .Vrvorkji 

ARGENTARIA 


KINGDOM OF SPAIN 

French Francs 6.000000.000 
Co-Lead Manager 

Bout Jr Sevan 

ARGENTARIA 


Beptambor 1994 


Banco de Negocios 

ARGENTARIA 


CAU.wAaiu.vrs 

MtandMi* 

INTEREST RATE SWAT 



June 1994 


Pesetas 34.450.000.000 

Co-Lead Manager 
Domestic Tranche 




I 


AUMAR 

Pesetas 1 4.31 0.000.000 

Co-Lead Manager 
Domestic Tranche 


Endesa 

Pesetas 167.703.612.000 

Global Coordinator 

Sodtxkul de Valores v Balsa 

ARGENTARIA 


March 1994 


fomento de 

CONSTRUCCIONES Y 
CONTRATAS, SA. 

Pesetas 48.000.000.000 

Co-Lead Manager 
Domestic Tranche 

Sociedad de Valores v Boisa 

ARGENTARIA 


January 1994 


Empresas 
La Modema 

SJLdeC.V. 




U.S. Dollars 344.655.350 


Co-Manager 
International Tranche 

tonUdr I An • M. 

ARGENTARIA 


June 1994 


Qrupo Iusacell, S.A. de C.V. 


U.S. Dollars 233.61 8.0B5 


Co-Manager 
Institutional Tranche 

Smtlmddr latam • Mu 

ARGENTARIA 


September 1994 


USIMINAS 


Usinas Sidcrurgias de Minas Gerais, S Jl 

U.S. Dollars 417.422.086 

Co-Manager 
International Tranche 

SmrJnJJi tdhw . to» 

ARGENTARIA 




June 1994 


Royal PTT Nederland N.V. 

Dutch Guilders 6.872.962.500 

Co-Manager 
R.O.W. Tranche 

S»H nhJ Jr liifcwn I Ww 

ARGENTARIA 


February 1994 


^ .S.pA. 

isTmrro mobiliare italiano 

Italian Lires 2.180.000.000.000 

Co-Manager 
Institutional Tranche 

SccmUIJ, ItolU 

ARGENTARIA 


June 1994 


Case Equipment Corporation 

U.S. Dollars 332.500.000 


Co-Manager 
International Tranche 


l.oilu/Jr I littl i to. r 

ARGENTARIA 


July 1994 


Istituto Nazionaie date Asslcurazkmi S.pA 


Italian Ures 4.536.000.000.000 

Co-Manager 
Institutional Tranch 


SamUifr i Rti 

ARGENTARIA 


Sociedad de Valores y Boisa 

Q ® ARGENTARIA 




























10 


FINANCIAL TIMES MONDAY OCTOBER 31 1994 


BUSINESS TRAVEL 


Calls from the air 



bosiiUMft-tilaM Mat off Ha 
long-haul Boeing 747s, 

Snd on waB-mountetf unite 
tatourist class. 

The afrfine wS use the 
hmandM l uH t e nefaroriG 
This permfts almost 
unrestricted caHs, os 
opposed to other carriers 
wMch use sdrcrafMo- 

ground systems, where • 

caBs are pos s i b le only 

within range of a ground 

station. CaUs wffl cost $9 
a minute, with a 
co n ne cti on fee of $8. 


mCinaJam 

In Hong tong, a daily 10-fninute 
traffic jam could be 'costing the' 
British colony huge sums, Hang 
Seng Bankltas csfcufatwl "if 
the time spent in traffic 
congestion [werej put to 
producfive use, a.lG-ntfrajts 
•dafiy detayfor each wetter ' 
would equal "f 24m working 
hours for the whole economy,” 
ft said. Traislated into money 
toms, this would frnply an 
additional output of HKSlSbn ■ 
(J2;3br^ 

Trgfflc conditions have 
deteroriated sharply in Hong ■ 
.Kong, with car ownership 
outstrppjng road construction. 

Ani rapkj expansion of trade 

wife Ctma has boosted freight . 
and passenger movements 
across the border. - 


Frankftirt tominaf. ' 

Franfcftgt afrpor^ B a nopeV 
number one cargo bob and 
se co nd only to London 
H ea t hro w tnpaa se nger 
number*, opened ite now 
TtnnfBsl2l9stwcek.lt 

hopes to siphon traffic 
away from crowded 
H ea throw, *W»Te eapocttng 
aund 4tn to Sm 
passe ngers t fa ro m ft 
Tarmlnd 2 next jmar,” a ' 
spokesman said. “It can 
hand* 12m passenger*: 
andean be expanded.” . *. 

F raiMu r t b ready in g to \ 
attract more international . 
p asse nger mdcwgo tBgto 
as H oa t auo w «d Oatw ricfc, 
London's cthermain 
airport, near saturatkm. . 
LuAhana, Germany's 


. notional irirtina, toW occupy 
hattoffhoMofs Terminal 
1 . t o ge ther wtitoatooutBO 
minor drfimi Abotit s ; . 
DM500ito has teen spent 
mutating tafthi i Htf* / 
laefiffes, wMcb wffl atao he 

used. by fts pataersj . Thai .. . 
Afrwaysasxf Oe ft adAhftaes. 
" Around flphilmtotiqnto 
aMtoea fnchrfng flifttsft - 
Assays, bdh Aktines, * 
Deutsche BA, Japan . 
AHnMjaditirRwc^Wi 
move to the Mer ttnuM,. 


Temrinaf tvtoan au tom a t ic, 
overhead raflwegr tomtiar to 
4 fa t w fcy>.:. 

Franktaorttes aiso spent • 


tagsanawai 
andecgromtd'liaflBage- 
handDng system. 



Bombay chaos - • • 

OwacTweSng, 
breakdowns 
and a shortage 
of furds have 
turnetirafi 
commuting in 
and around Bombay [Wo a daily 
nightmans. The 2,000 trains on 
Bombay's surburban network 
trunclB neafr 5m -people to 
work each day. frustration has 
turned to violence five tones' m . 
the past four months, with 
commuters wrecking property. 

The authorities plan to use 
longer trains and phase out 
fevsi-crassingsL.But rafeing 
fcrtcfe wfl be tfiftoft “Wb may 
teve to consider approaching 
the Esopaan mattate, through 
the finance ministry, for cheaper 
ftrids,* safd an dtiiciat 


AcropoHs^Hif again' 

Visitors hoping tor a dowr . 
took at the A cro po tt a fri 
Athens wsrecfisappoblted - 
yes ter day tolar an • 
unemployed man 
threatened to commit 
suicide. The Acropolis tab . 
been dosed since October • . 
3 because of a guards' 

Juice. 

The culture ministry . 
guards, who .want higher 
pay, decided on Friday to . 
open the site for three day* 

after a court tided ttakb. • 
wa&oat was JSegaL They 
wfii consider today whet her 
to resume their strifes. But. 
potiee s e eled off the 
momnwittflsra a» 
ended 'scaffolding amt 
thr eaten ed to Jump- . 


Likely weather in the leading business centres 

** 


Mon 



mv. 





& 26 

Paris' - ' #S 18 1 * 


13 <fS> 13 <£§* 13 
25 » ££ 20 

13.^14 




' ^ ■# 

MMftmm tupmlw. In Catta 


Revival of a ghost town 

The reconstruction of Beirut is under way, says John Westbrooke 

ever it was, it wasn't war. 


A fter years in the wil- 
derness, Lebanon is 
starting to put itself 
back on the map, and 
it would like the world to 
notice. This will not be easy. 
From 1975 to 1990 Lebanon was 
racked by a civil war involving 
an array of religious sects and 
interested neighbours; 200,000 
or so people died and lm fled 
abroad. And foreigners were 
targeted: Terry Waite was the 
best known of many hostages. 

The war was not won. It just 
wound down. But the shooting 
stopped and the hostages went 
free. A comprehensive Middle 
East settlement remains in the 
future, but Beirut is a city at 
peace, with much reconstruc- 
tion to be done. 

A $l.8bn company called 
Soli de re was Coated this year 
to rebuild downtown Beirut It 
has raised some 95 per cent of 
its capital from Lebanese at 
home and abroad, though for- 
eign groups have taken a big 
share of the contracts. 
Americans, however, are 
restrained by a state depart- 
ment ban on Beirut airport 
In the meantime, the core of 
Beirut is an eerie place. Sev- 
eral blocks near the Place des 
Martyrs and the Green Line, 
which divided east and west 
Beirut, have been cordoned off 
from traffic. Squatters have 
been thrown out 
The streets are lined with 
elegant stone buildings. 
Though windows and shop- 


fronts have been blasted away 
and walls pockmarked by 
sniper fire, the fabric is sound, 
for the area was spared the 
heavy shelling that devastated 
other parts of town. 

Solidere has pulled down 
300 of the most damaged build- 
ings - far too many, say 
critics of its mega-plans to 
provide marinas, reconstruct 
vanished souks and create 
a residential "Levantine vil- 
lage". Next comes a three- 
year rebuild- 
ing of the 
infrastructure. 

After that, 
the remaining 
buildings will 
be restored and 
the inner city 
brought back 
to life. Until 
then, the authorities hope the 
area will prove a tourist attrac- 
tion - morbid perhaps, but an 
authentic modem ghost town. 

Beyond the downtown area, 
Beirut is alive and bustling, 
though there are armed groups 
of soldiers and military police 
everywhere, some in tanks. It 
is by no means dear what they 
are for, and foreigners may feel 
that their presence makes the 
city look more of a militarised 
zone than it really is. 

Out in the countryside we 
heard a rattle of gunfire. 
"Shooting birds,” said our 
guide firmly. “Wedding cele- 
brations,” said someone else's 
guide, equally firmly. What- 


Many of the soldiers are Syrian 
peacekeepers, and there are 
more images of Syria's Presi- 
dent Hafez al-Assad than of 
Lebanon's own leaders. 

At ground level, Beirut - 
once known for its Riviera-like 
beauty - is dusty. From the 
mountains, it looks appallingly 
polluted, swathed in a dense 
brown cloud. The main reason 
is cars: one "statistic” we 
were given was that there 
were five for 
every house- 
hold. Real post- 
war Lebanese 
statistics are 
almost non-ex- 
istent, but pub- 
lic transport 
was one of 
the institutions 
wiped out. Everyone drives 
fhair-raisingly badly) and jams 
are common. Taxis are cheap, 
however, and drivers, like 
everyone else, are happy to 
charge in US dollars. 

Solidere's plans call for the 
construction of big hotels in 
town and the restoration of old 
ones such as the St George's, 
now a seafront ruin. Mean- 
while, there are a dozen or so 
comfortable upmarket places 
that offer reasonably prompt 
telecommunication services. 
The best are said to be the 
Coral Beach and Summerland 
on the water-front starting at 
around $160 a night 
Most international cuisines 


are represented in Beirut 
though the most enjoyable is 
Lebanon's own, based on me=zc 
- 20 or more small dishes of 
different dips, snacks and 
starters. After dark, some 
establishments lure customers 
with "top Bulgarian strip- 
girls”, but those of us who 
tried clubs found only so-so 
discos and beHy-dancers. 

Beirutis themselves seem to 
spend the evenings ambling 
along the comiche, chatting 
and drinking coffee. 

Dress codes are unrestrictive 
(men should wear ties for busi- 
ness meetings, which are apt 
to start slightly late), and the 
currency is all in paper, with 
about L£l,660 to the dollar. 
Bar gaining is widespread. 

If you have a spare day, try a 
trip to Baalbek, 50 miles inland 
in the lush Bekaa valley, 
which has ma gnificent Roman 
ruins. Those with more time 
may like to visit the rums in 
the 9,000-year-old city of 
Byblos, the 19th-century palace 
of Beit Eddine, or the forest of 
Lebanese cedars at Bsherri 
near Tripoli. 

A new airline, British Medi- 
terranean Airways, has started 
direct flights from London to 
Beirut five days a wieek (not 
Wednesday or Sunday), with 
return fares from £399. It joins 
the thrice-weekly service of 
Middle East Airlines. Be 
warned: formalities at Beirut 
airport can be time-consuming. 
See Observer 


Though windows 
and shop-fronts 
have been blasted 
away, the fabric 
is sound 



Hdflnff Rojvt 

Time moves on: a restored Ottoman clocktower in Beirut 


In S Korea, it is 
better to arrive . . . 


Bridges fall apart Boats catch 
fire. Aircraft crash. Trains col- 
lide. Ferries capsize. The past 
year in South Korea has been 
had enough to make any trav- 
eller nervous. But the fre- 
quency of disasters during 
“Visit Korea Year" is espe- 
cially grim news, unites our 
Travel Staff. 

The collapse of one of Seoul’s 
main river bridges, the Songsu, 
during the mo rning rush hour 
on October 21 killed at least 32 
people and cast a shadow over 
South Korea's reputation as a 
world leader in construction. 

As the embarrassed govern- 
ment expressed contrition for 
lax safety procedures, a plea- 
sure boat packed with local 
tourists caught fire on Chu- 
ngju Lake south of Seoul three 
days later, killing at least 25. 

Yet the combined toll from 
these two accidents pales in 
comparison with the numbers 
killed on the roads during an 
average long holiday weekend. 

The latest accidents have 
reinforced a widespread 
impression that travelling any- 
where in South Korea - by any 
type of transport - is excep- 
tionally dangerous. 

Ask Yoo O-kun, a bank 
employee who went to Chu- 
ngju lake to recover from the 
Songsu Bridge nightmare - he 
lost his closest friend - and 
ended up helping to rescue 
people from the burning boat. 

“I now reckon there’s no safe 
place in our country,” he said. 


"How could disasters take 
plats in succession like this? 
Tm too scared to travel now." 
The boat disaster happened 
just over a -year after a ferry 
capsized off the west coast, 
killing 292. 

Those who think that train 
or air travel might be more 
reassuring are wrong. In 
August, 160 passengers and 
crew aboard a Korean Air 
T.inug Airbus had a remarkable 
escape when it crash-landed in 
a rainstorm on the southern 
tourist island of Cheju. 

In July last year, 64 were 
killed when an Asiana Airlines 
Boeing crashed on the south- 
west coast And air force chief 
General Cho Kun-hae was 
among six people killed when a 
helicopter crashed south of 
Seoul last March. 

Two months ago, three were 
killed and 50 hurt when two 
express trains collided head on. 
A driver had ignored a signaL 
Last March, 79 were killed in a 
train accident in the southern 
city of Pusan. 

Observers blame lax safety 
standards, non-enforcement of 
regulations - and corruption - 
for many accidents in South 
Korea. 

Korea plans to spend SlOObn 
(£67bn) an infrastructure over 
the next eight years. However, 
MPs, the media and engineers 
warn of more bad accidents to 
come. The lesson is clear: in 
South Korea, it is always bet- 
ter to arrive than to travel. 



|j|jgptional cities. And we can fly 
|||||k 25 other destinations in fee 
ram without changing terminals. 

ipScious dates with refreshing, 
paora Savoured Arabic coffee; a choice 
free main courses, served on fine 
a, and the discreet- attentions of our 
istafL 

Ahlan Wasahlan. Welcome aboard. 


Proud to serve You 




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A positive 
a++itude 




It does «em as if India, the nation, has caught up with Ess At, the 
corporation. Our belief in a positive attitude is today th? preserve of an 
entire country. With good reason, too. 

India's recent economic surges have caupultcd it into ihe top 5 
investment market*. Stoking this interest further t> n» base of potential 
consumers, over 200 million strong. India's commitment to a market- 
driven economy indicates a spurt of Wo in corporate returns. 

At Essar, a S2 billion-asset company with quality professional 
management, we sew ourselves as rru^r contributors to. and henelinaries 
of, this ideal scenario. We’ve already achieved business leadewh.p hi 
steel shtpptng. oil & gas. power, finance. And a position among the 
world s urgest groups. As we explore further, our clients and affiliates are 
discovering that in India, we test positive. 

SY£Q."SHimNG«On. & GAS-POWEfi-F!!»IAJVCE-T,fR.VKEV PROJECTS «TKA DING 



ESSAR 


INDIA 


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FINANCIAL TIMES MONDAY OCTOBER 31 1994 


MEDIA FUTURES 


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SRI denounces superhighway claims 


By Raymond Snoddy 

SRI International, one of the world’s 
largest research institutes, has 
denounced the information 
superhighway as a myth created by 
media hyperbole, and as too vague 
and ill-defined a concept on which to 
make investments. 

The sceptical note comes at the 
of a $L4m, two-year study 
programme and as SRI — formerly 
the Stanford Research Institute - 
embarks on a further two-year 
research programme on 
dlgtial-video-multimedia. 

SRI is also incr easingly sceptical 
about the idea of a significant degree 


of convergence between the main 
communication industries, although 
several major Industries are becoming 
closer through alliances and 
involvement in each other’s marietta. 

“The notion that the computer, TV, 
videogame and telecoms industries 
are likely to merge into one gigantic 
full-service entity has no support, and 
much evidence to suggest that the 
industries win continue to remain 
separate,” SRI says. 

The organisation, which over the 
next two years plans large reports on 
company strategies in the emerging 
fnteracti vp -mcrfifl and digital-media 
markets, the latest technology trials, 
new medift b usiness Tnnripig and 


market prospects, warns that 
consumer acceptance and demand for 
the new services is “highly 
speculative". It believes that, thoug h 
the potential for change in digital 
video technology is vast, the rate of 
change for most applications win be 

much slower than expected. The 
problems range from the feet that 
most of the r eq uir ed infrastructure 
will not be in place before the end of 
the decade, a lack of agreed standards 
and that the cost of the technology’s 
initial deployment remains too high 
“A good example is desk-top 
video-conferencing. The value added 
to most users in increased 
productivity is not great enough to 


warrant s pending approximately 
$3,000 per desk-top,” SRI argues. 

More than 50 large corporations, 
ranging from IBM and Sony to 
Microsoft and Siemans, are 
sponsoring toe SRI research project 
With the exception of areas such as 
education and video games. - SRI 
believes there will be no stampede in 
the direction erf interactivity, and that 
watching video entertainment will 
remain a mostly passive activity. 

New services will also not only face 
competition against ea ch other but 
with existing media. In the face of 
advanced pay-per-view services and 
videoon-demand, video rental stores 
will not disappear “quietly, or 


quickly” but will probably lower then- 
prices and compete fiercely. 

SRI sees “packaged media" to the 
form of CD- Rom- based video games 
and video information products at the 
forefront of emerging new markets. 
Video CD will also, SRI believes, 
attain modest success during the next 
three years, but it will not reach the 
critical www in consumer markets 
necessary to elevate it to the same 
levels as CD audio or VHS video. 

The SRI Digital Video Multimedia 
programme costs £23,000 to sponsor for 
two years, including s e mina rs and 
consultancy. SRI International Europe 
Menlo Park House, 4Addiscombe 
Road, Croydon. CRO 5TT. 


US cable 
groups push 
into telecoms 


Where Packard Bell has the PC edge 

Alan Cane on why the Californian company has been so successful in the multimedia revolution 

W hile the battle cent). The implication is that systems “home appliances”, makes it simple for home t 

between Interna- In the US, at any rate, multi- Packaged in a single cabinet is to log on to the Internet, 

tional Business media services are more likely a multimedia PC which dou- world's largest computer 

Machines and -as jfi B £ 9SSif«BB8BajS5gi than not to be delivered to the bles as a comoact disc nlaver. a work. 


W hile the battle 
between Interna- 
tional Business 
Machines and 
Compaq for leadership of the 
personal computer business 
has been ho g gin g the lime- 
Kght a hitherto little-known 
player is threatening to 
upstage the giants of the multi- 
media indus try. 

Packard Bell Electronics, a 
privately-held Californian PC 
manufacturer which sells 
exclusively to home users 
through retail outlets, crept 
past IBM in the first six 
months of this year to take 
third {dace, after Compaq and 
Apple Computer, in the US PC 
market, and is now fourth - 
after Compaq, Apple and IBM 
- in the worldwide market Its 
projected 1994 sales are $&5bn 
and should be dose to $3bn 
next year, says Beuy Alagem, 
its chief executive. 

The significance of that rate 
of progress should not be 
under-estimated. Compaq, 
Apple and IBM are the "pre- 
mier league” PC makers, pio- 
neers of the Industry and own- 
ers of the most prestigious 
brand names in the business. 
But who goes out purposely to 
toy a Packard Bell? 

Packard Bell Electronics was 
founded in 1928 as aradio man- 
ufacturer and has nn connec- 
tion to Hewlett Packard, the 
OS electronics giant, or to the 
Bell tejtynmnwinlraHfwiR com- 
panies. Nevertheless, it seems 
to have got two elements of toe 








SfM' 5 


Beny Alagem: sales should be dose to S3bn next year 


multimedia revolution right 
First, multimedia services 
are hkdy to be delivered to the 
home through PCs rather than 
TV sets. A report this week on 
multimedia in European homes 
from the research company 
Inieco notes: “One of the most 
striking conclusions to be 
thrown up is that the PC 
rather than the TV set will be 
the likely focus for multimedia 
services in the home. . . a 


whole range of multimedia-re- 
lated equipment and activities 
are concentrated in Che same 
type of households, and PC 
buying is concentrated in these 
same busy households.” 

This year, as many comput- 
ers wifi be sold for use in the 
home in the US as for use in 
business. Packard Bell has a 41 
per cent share of mass retail 
sales in the US, ahead of IBM 
(13 per cent) and Apple (9 per 


cent). The implication is that 
in the US, at any rate, multi- 
media services are more likely 
than not to be delivered to the 
home on Packard Bell 

wiafthingg 

The company’s own corpo- 
rate goals “making the 

PC the centrepiece of the 
home”, “implementing the 
most efficient manufacturing 
model in the industry so every 
one can afford a PC” and “hav- 
ing at l nna Packard Re b 
PC in every home". 

Second, ease of use and 
maintenance is a critical factor 
in the home market Even IBM 
has been forced to this conclu- 
sion. “The PC industry has 
rinnp a b rilliant job of innova- 
tion and technology,” said G 
Richard Thoman, head of 
IBM's PC operations, last 
month, when Introducing a 
new, simplified PC range. “But 
in toe process we have lost 
touch with the majority of cus- 
tomers who are all dazed and 
confused by tha complexity in 
the technology, the array of 
choices, and toe level of sup- 
port." 

Packard Bell eiaftna to have 
been the first manufacturer to 
sell systems complete with a 
hard disc and pre-loaded soft- 
ware, and the first manufac- 
turer to build in a CD-Rom 
drive, creating a multimedia 
packaged gys te m it also claims 
to he the first PC manufacturer 
to introduce on-site mainte- 
nance to tha hnmft 

It calls its latest family of 


ARCHITECTURE 


David and the car goliath 

Colin Amery outlines Florentine designs for a second renaissance 

W hen 1 think of 
Florence, I still 
think of the 
Flood. On Novem- 


W hen 1 think of 
Florence, I still 
think of the 
Flood. On Novem- 
ber 4, 1966 the River Amo 
burst its banks and threatened 
- indeed destroyed - some of 
the art treasures and 
bufldiDgs of toe Waftm Renais- 
sance. 

In recent years Florence has 
been threatened and damaged 
by less obvious but equally 
damaging Hoods, those of cars 
and tourists. Any summer visi- 
tor to the city will know that it 
is now impossible to see 
through the barricade of back- 
packs and shorts to the pic- 
tures on the walls of the Ufflzi 
gallery. It is i mpn caihla to pen- 
etrate the city centre by car 
daring the day. and there is no 
rfi»nw> of a photograph of a 
Florentine architectural mas- 
terpiece without a foreground 
of massed cars. 

However, in London at pres- 
ent yon can see exactly what 
the authorities of Florence are 
planning to do for their trou- 
bled city in the next decade, 
flieir plans are on show at the 
Italian Institute in Belgrave 
Square until November 25 
(Mondays to Fridays, 10am- 
5pm). 

The problems of Florence are 
common to many historic 
towns and cities of Europe, and 
it seems fitting to look to the 
city that produced Dante, 
Giotto, Michelangelo, Leon- 
ardo. Galileo and Brunelleschi 

to see if it can now produce the 
right answers fin* the 21st cen- 
tury. 

For a start there is honesty 
In the admission of the Floren- 
tine authorities that the last so 
years have been ones of inac- 
tivity, indecision and interne- 
cine fighting between the dty 
centre, the shopkeepers, the 
hotel owners and the 111- 
Planned suburbs. This constant 
struggle has been enlivened by 
the daily arrival of 60,000 care, 
as well as the annual arrival of 
?m tourists. 



■’vv- - 

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Florence: Krier’s work revives the city’s architectural and planning traditions 


t 'TiiW 

mm 


fact, studied carefully, the Vit- 
to r lni plan is a gentle adoption 
of many of toe qualities that 
have made cities work in the 
past 

He appears to believe, t h ank 
heaven, in the value of mixed 

development 

All the best cities in toe 
world are an effective mix of 
homes, workplaces and cul- 
tural and leisure activities. The 
idea of strict zoning has long 
been discredited. 

Urban quali ties are hard to 
Arfing, but we recognise them 
when we see than. With its 
remarkable skyline and care- 
fully controlled scale within 
the surrounding bills, the cen- 
tre of Florence both works and 
Is beautiful. 

But it has a declining popu- 
lation. Only 400.000 people bye 
in the centre, and the predic- 
tion is that numbers w31 con- 
tinue to de cline . Hie problem 
fa to make historic centres 
attractive to residents as well 
as to tourists. 

Two important influences 


embarked on the expensive hut 
necessary provision of under 
ground car parks. 

The most significant diyi p* 
in the city are likely to be in 
an area largely owned by Fiat, 
known as Novoli, to toe 
north-west of the historic cen- 
tre. Under the master-plan it is 
proposed to devolve many of 
the city's services - 

town halls, libraries, smaller 
museums, banks and sports 
centres - to five new “bor- 
oughs". Novoli wSl be one of 
these, and the fact that a large 
part of it is in the single own- 
ership of Fiat - it was once a 
large components factory ~bas 
eased the planning process. 


T he Flat-Novoli plan 
has been prepared by 
toe toflnmtial urban- 
ist Leon Krier, who 
has planned a large area, about 
1,000 acres, dividing it into 14 
urban sections. Each of these 
sections will feature a rich 
mixture of uses, and will 
regenerate in an ima gina tive 


Nanning, announced the city’s 
approval of a completely new 
master-plan, produced by Max- 
cello Vittorini. Franchini 
showed a touching faith in 
rationalism and in planning 
Itself. But it is important to 
realise tha t toe master- plan fa 
not a ruthless grid of geometry 
thrown over a dying dty. In 


illlll *-* ■■ " 

far I'wdnn and other declining 
cities. Alarm at toe level of 
atmospheric pollution forced 
the passing of a law to ban 
cars that are not fitted with 

catalytic converters or carry- 
ing fewer than three people 
from the dty cent^ Second. 
realising the inevitability of 
some cars. Florence has 




the disastrous detritus of the 

iggOs. 

As toe centrepiece of the 
redevelopment, the plans show 
a 30-acre park and some 90 
acres of new buildings. Wisely 
it includes major new pubHc 
buildings for the university 
and the courts of justice 

Krler's work for Florence, 


which the city authorities 
believe las a touch of genius 
about It, revives the architec- 
tural and planning traditions 
of Florence, fix* each of the 14 
sections will have a central 
piazza. The ground and first 
floors of all new buddings will 
be given over to shops and 
uses, residen- 
tial premises will be on the 
upper Boors. 

Comprehensive building 
codes set out the guidelines fbr 
the city. No ordinary bull dings 
should be higher than four 
storeys, and the use of stone Is 
to be encouraged for toe 
ground Doors and for the 
entire facades of the more 
monumental public buildings. 
Fiat is an enlightened client, 
and it has instructed the 
Turin-based architects Gabetti 
and Isola to turn the plan and 
the codes Into real braidings. 

There is a sense of excite- 
ment and creativity about 
these plans, and they have won 
international support If they 
are followed comprehensively 


systems “home appliances", 
ftmfcaged in a single cabinet fa 
a multimedia PC which dou- 
bles as a compact disc player, a 
stereo system, a TV and video 
player, a telephoneanswering 
system and facsimile machine, 
complete with modem for 
attachment to the telephone 
network. All this for between 
£1,499 and £1399. 

The Packard Bell machines 
are designed to look good in 
the home. But more important 
is Navigator software devel- 
oped by Packard Bell to make 
using its computers easier. 
Navigator is based on pictures 
and operates by Interacting 
with Windows, Microsoft's 
graphical interface. Beny Ala- 
gem Tnabps it clear, however, 
that nithongh users need never 
go into Windows, Navigator is 
not a replacement for the 
Microsoft product 


T here are various ways 
to use Navigator. One 
method starts with a 
view of a hallway with 
rooms leading off it As toe 
cursor is passed over the door 
ways, the rooms are illumi- 
nated as if a light has been 
turned on. The rooms repre- 
sent the learning centre fall of 
tutorials and demonstrations; 
the workspace, a management 
system fbr applications and 
rinraimgntg; a software area for 
all the programs available; and 
a s uite of gamaa ca ll ed Kid - 
space. Next year the company 
will offer special software that 


makes it simple for home users 
to log on to the Internet, the 
world's largest computer net- 
work. 

Before its leap into the top 
tier of PC makers, Packard Bell 
attracted attention through a 
deal last year with Group e 
Bull, the French government- 
owned computer manufacturer 
struggling to return to profit- 
ability after several years of 
losses. The French company 
took a 20 per cent stake in 
Packard Bell to seal an accord 
through which the US com- 
pany would have access to 
Bull’s PC technology, while 
Bull would have the benefit of 
Packard Bell’s experience in 
selling in volume through low- 
cost retail channels (Groupe 
Bull's PC arm. Zenith Data 
Systems, was a pioneer In por- 
table computing). 

According to Alagem, the 
relationship is working welL 
The company is opening a new 
manufacturing facility at 
Angers to France, where Bull 
makes printed circuit boards 
and other PC com p on ents. 

Nobody can say with cer- 
tainty that Packard Bell's 
future is assured. Many compa- 
nies in the PC business have 
experienced false dawns. And 
the home market is quirky arwi 
unpredictable. But what Pack- 
ard Bell has achieved so far 
suggests that as multimedia 
Mc panda into the home , a P ack- 
ard Bell machine is likely to be 
at and of Hip information 
superhig hway. 


By Victoria Griffith 

US cable companies are 
resisting the Federal 
Communication Commission's 
(FCC) ruling allowing local 
telephone groups into the cable 
business, by mounting their 
own bids to break into 

telecommunications. 

Last week, cable group Time 
Warner applied for state 
permission to enter the local 
telephone business in Ohio. A 
day earlier, TCI. Cox and 
Comcast announced the 
formation of a joint venture 
with long-distance carrier 
Sprint to offer local and 
long-distance services, wireless 
communications and cable in a 
si n gle package to consumers. 

These forays win eventually 
result in the complete 
breakdown of barriers between 
the two industries, analysts 
predict. “In the long-term, 
cable will compete with the 
local exchanges and 
vice-versa," says Berge 
Ayvazian, sailor vice-president 
of Yankee Group. “These 
companies are wise to position 
themselves to act quickly once 
the barriers come down.” 

Earlier this month, the 
FCCs “video dial tone" ruling 
paved the way for local 
telephone companies to build 
the infrastructure for cable 
services. Long-distance 
providers like AT&T, Sprint 
and MCI do not benefit freon 
the r uling , sincp they do not 
provide wiring to houses and 
businesses. 

However, toe ruling did 
Impose restrictions on local 
telephone groups' adventures 
to cable. Although the 
companies are allowed to 
establish facilities for video 
si gnals they are so far 
forbidden Bum sending videos 
down those lines. Even so. the 
r uling was pnniig h to rile the 
cable and long-distance 
sectors. 

“It's very possible that local 
telephone customers will end 
up paying higher rates to 
finance a new video 
infrastructure", says Lisa 
Meredith, spokesperson for toe 
National Cable Association. 


But the FCC and local 
telephone groups insist federal 
and state scrutiny of rates will 
prevent this from happening. 

The Rochester telephone 
company, re-named Frontier 
earlier this year, will soon 
become the first to face 
competition in its market In 
January, Time Warner will 
offer residents in the up-state 
New York region an 
alternative service. The 
success of that experiment will 
probably help determine the 
speed with which cable 
companies gain access to other 
areas. Most states now 
guarantee a monopoly for the 
Baby Bell groups which split 
off from AT&T to the 1980s. 

Cable wires are generally set 
up to send one-way signals to 
households, and are not easily 
adaptable to two-way 
telephone signals. Time 
Warner will try to resolve the 
problem to Rochester by 
putting a telephone box to 
convert the signals next to the 
cable box to customers’ homes. 
The new Sprint, TCI, Cox and 
Comcast venture will try a 
more direct route, aiming to 
provide a wireless service to 
consumers. 

The sudden burst of activity 
in the cable-telephone 
cross-over has sparked 
renewed calls for sweeping 
Congressional legislation. 

“This cannot and should not be 
settled on a case-by-case basis, 
depending on what individual 
states decide," says Donna 
Lampert, special counsel for 
legislation and policy at the 
FCC. “We need comprehensive 
federal legislation." 

The FCC, for its part, can 
only interpret existing laws 
governing the sector. A nearly 
successful push for a 
telephone-cable bill was 
squashed by the local 
telephone companies earlier 
this year and observers are 
sceptical that the 1995 
Congressional session will 
produce any new legislation on 
the issue. Meantime, 
and cable companies will 
continue to test the limits of 
their involvement in each 
other's business. 




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renaissance that will make it a 
city for the 21st century that 
respects its finest architectural 
traditions. Once again Florence 
has become a dty to watch. 

• The Accademia Italiana 
has organised a public confer- 
ence on the Florence plan in 
London on November 23. Tick- 
ets and details, tek 071-235 0303. 


There he is. Fourth row, second from Everything they once had has been We're not even asking for money 

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Maybe not the unsavoury-looking And nothing is all they! ever have open mind. And a smile of welcome, 

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likely to be your average neighbour- We know you can't give them back refugee it can mean everything, 
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weekend’s stubble on his chin. organization funded only by voluntary 

And fee real refugee could justas contributions. Currently irresponsible 

easily be toe deaiKut fellow on his left. « yaw n for more than 19 million refugees 

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12 ★ FINANCIAL TIMES MONDAY OCTOBER 3 1 1 994 



More rooms at the Inns 

As the world’s biggest hotel company continues its breakneck expansion, president 
Michael Leven tells Michael Skapinker that he will match quality to quantity 





hen Michael 
Leven joined 
Holiday Inn in 
1990. he 
engaged the 
services of an Atlanta-based 
British woman who teaches 
Americans how to deal with 
UK companies. 

Holiday Inn had recently 
been taken over by Bass, the 
UK brewer, and Leven. who 
grew up in Boston, was wor- 
ried about committing some 
indiscretion. “Americans are 
scared to death of doing the 
wrong thing.” he says. 

His memories of what the 
consultant taught him are 
hazy. But whatever it was. it 
seems to have worked. Earlier 
this month. Leven. 56. was pro- 
moted from head of the Ameri- 
cas division to president and 
chief operating officer of Holi- 
day Inn Worldwide, giving him 
responsibility for the 
day-to-day running of the 
world's biggest hotel company. 

Over the past two years. Hol- 
iday Inn. which has more than 
1.900 hotels, has been opening 
new properties at the rate of 
one every two days. It plans to 
have 3,000 by the end of 1998. 

Much of the expansion will 
be abroad. Hotels outside the 
Americas currently provide 
Holiday Inn with 10 per cent of 
its profits, but Leven wants to 
see that rise to 33 per cent over 
the next four years. 

His anxiety about running 
an international, UK-owned 
business has disappeared, 
although he has made some 
adjustments to style. One of 
the things he does remember 
his consultant telling him was 
that UK companies were more 
formal than American ones. 

“She said that I had to 
remember that most British 
business people think that 
Americans shoot from the hip. 
She was right That was very 
helpful. When I wanted to do 
something I made sure I had 
all the documentation.” 

Leven says Bass has become 
less formal in the four years he 
has been there. In the begin- 
ning. however, he was struck 
by the manner in which Bryan 
Langton, Holiday Inn's British 
chairman and chief executive, 
conducted meetings. 


Langton began by noting the 
apologies, a procedure which 
was new to Leven. He says: “In 
the States, if a guy doesn't 
show up, he doesn’t show up." 

Other than that, he thinks 
the problems of working across 
national boundaries have been 
exaggerated. “People have 
made doing business interna- 
tionally into a mystique. It's 
easy when things aren't going 
right to make the excuse that 
it's because the people are dif- 
ferent. Oftentimes, things don’t 
go right when people aren’t dif- 
ferent." 

Everyone, he says, has been 
asking how he and Langton. 
who remains chairman and 
chief executive, are going to 
divide duties between them. 
Bass says Langton, 57, will 
focus on strategic issues, while 
Leven takes responsibility for 
hotel operations and sales. 

Leven says that companies 
often want their two top execu- 
tives to have different skills: 
for one to be strong in finance, 
for example, and the other in 
marketing. In the case of Lang- 
ton and Leven this is not so. 

They have similar back- 


grounds having specialised in 
the operational side of the 
business. And their personali- 
ties are not dissimilar; both are 
accomplished raconteurs. 

Leven says: "It's not the 
usual balance between the 
chief executive officer and the 
chief operating officer. But the 
real advantage I have working 
with Bryan is that he under- 
stands Bass and how to move 
through it" 

Before joining Holiday Inn, 
Leven spent five years as presi- 
dent of the US chain Days Inn. 
He has spent his entire work- 
ing life in the hotel industry, 
except for nine months in the 
late 1960s when he was 
employed at the Practising 
Law Institute in New York. 

HJs job there was to make 
hotel bookings for the insti- 
tute's meetings. He was 
appalled by what he saw. “I got 
to understand what a hotel 
was like from the customer’s 
point of view. I learned how 
badly customers were treated." 

Leven has also had a taste of 
life as a Holiday Inn franchise 
holder. While he was working 
as head of operations for a 


company which ran a Holiday 
Inn under a franchise agree- 
ment, there was a disagree- 
ment on how much to spend on 
refurbishing a hotel Leven suf- 
fered the indignity of being 
thrown out of the system. 

It is something he has done 
to many other hotel owners 
since. The company only owns 
about 10 per cent of the hotels 
that carry its name. The rest 
are run by franchise-holders. 
Bass found that many were 
run down, particularly in the 
US. and that the Holiday Inn 
name had been badly damaged 
as a result. 

Veterans in the company 
found it difficult to accept that 
this had happened. Holiday Inn 
had been launched in 1952 with 
the specific intention of provid- 
ing travellers with a guaran- 
teed level of quality and no 
unpleasant surprises. Kem- 
mons Wilson, its founder, buQt 
the first Holiday Inn in Mem- 
phis. Tennessee, after deciding 
that there had to be something 
better than the appalling 
hotels he had encountered on 
his travels round the US. 

Langton moved the compa- 


ny's headquarters from Mem- 
phis to Atlanta and cut head- 
quarters staff from 2,450 to 
1 , 000 . 

Leven’s first job at Holiday 
Inn was to raise the franchised 
hotels' standards. It is a task 
he says is not yet complete. “I 
am not happy with a piece of 
the chain where the quality 
and service standards are still 
behind what they should be,” 
he says. 

Leven estimates that about 
15 per cent of Holiday Inns in 
the Americas still have unsa- 
tisfactory standards. He would 
be happier if the figure fell to 5 
per cent - which he says 
should happen by the begin- 
ning of 1997. 

He insists, however, that 
much has been done to rescue 
the name since the Bass take- 
over. Of the 1,600 Holiday Inns 
in the Americas, almost 1,000 
have been fully refurbished. 

But how will Holiday Inn 
maintain standards if it 
expands as rapidly as it says it 
will? Over the past two years, 
the company has signed joint 
venture agreements with local 
partners to open 30 hotels in 
Indonesia, 47 in Thailand. 70 in 
India and 11 in NepaL 

It will also manage two lux- 
ury cruise ships in China. Over 
the next five years, franchisees 
and joint venture partners will 
build 60 hotels in Europe. 
Leven says: “We don't have 
quality problems with the 
hotels we open. It’s the older 
ones that have problems." 

The question that intrigues 
analysts in the leisure industry 
is whether, if the expansion 
goes smoothly, Leven’s reward 
will be the chairmanship when 
Langton retires. 

But the difficulty here is that 
executive directors on the Bass 
board have to leave at 60; 
though US Holiday Inn 
employees can continue until 
65, Leven is only a year 
younger than Langton and 
would be near the board age 
limit when langton retires. 

Bass insists that nothing 
should be read Into Leven’s 
promotion except that he has a 
job to do. Leven concedes that 
if he fails to meet Holiday Inn's 
targets, that sort of conjecture 
would be irrelevant anyway. 



Cosmopolitan 
adviser at 
Daimler 

AD change at Daimler-Benz, 
Germany's largest company, 
where Edzard Reuter steps 
down next May to be 
supplanted as chief executive 
by ffie boss of the aerospace 
division Jtlrgen Schrempp, 
writes Katharine CampbelL As 
Schrempp assembles his own, 
younger, team, the chief 
financial officer, 62-year-old 
Gerhard Uener, moves off the 
board in order to become the 
new broom's principal adviser 
on international affairs. 

The assignment is not 
inappropriate for the man once 
tipped to run the coIogsus 
himself. His role in teaching 
the local Swabians to think 
internationally has been 
seminal. The product himself 
of a solidly international 
background, Liener (below) 
studied extensively outside 
Germany, lived in nhiit* in the 
early 1960s before he joined 
Daimler, and has travelled 
very widely since. He is, for 
instance , honorary Mexican 
consul for the State of Baden 
WOrttemberg. 

The brains behind the 
co-operation with Mitsubishi, 
and fluent in English , Spanish 
and French, he masterminded 
last year’s New York Stock 
Exchange listing. He is also the 
progenitor in the last couple of 



years of the company’s move 
towards global sourcing. 

Now that Liener is relegated 
to an advisory role, however! 
who will pipe up at board level 
to ensure the company 
continues Its fight against 
provincialism? Instead of 
looking outside, perhaps for a 
non-Goman, the supervisory 
board is expected to confirm in 
the position Manfred Gentz, a 
42-year-old lawyer who has 
spent his working life at 
Daimler in se eming l y solidly 
domestic jobs. While he has 
run Debis, the service and 
computer software subsidiary, 
for the past four years, the 
company is unforthcoming on 
the subject of Gents’s 
ling uistic abilities. 

No firing over 
Japan’s smoke? 

If heads are to roll because of 
the flop last week of the Japan 
Tobacco flotation, then Jiro 
Saito, vice minister of the 
Ministry of Finance, is 
vulnerable. Regarded as the 
ultimate ministry of finance 
bureaucrat - shrewd and 
arrogant backed by astuteness 
and power - Saito is not 
known for apologising, writes 
Rmikn Terazono. 

All he has said is that he 
regrets the way tbe flotation 
turned out However, that may 
not be enough to mollify 
Japanese brokers unhappy 
over its handling at a time 
when average dally trading 
volume on the Tokyo stock 
market remains below 300m 
shares. With demand for 
stocks still fragile, they feared 
that extra supply would 
depress investor confidence. 

Saito has also come in for 
criticism over the method used 
for pricing the public offering. 
Rather than going through the 
“book building” process used 
in other leading financial 
markets, the ministry of 
finance offered tbe stock at tbe 
mid price of apre-offer 
anction. Both Japanese and 
foreign brokerages felt 
frustrated; the; could see the 
ministry ignoring their claims 
that the flaws of the method 
echoed those in the last year’s 
failed privatisation of the East 
Japan Railway. 

Saito says that his ministry 
would “humbly listen to 
opinions from the outside" 
about future privatisations. 
This sort of statement may be 
enough to curb calls for his 
head. But If UK and North 
American investors had seen 
the value of their investment 


drop by 23A per cent in its 

first day’s trading, they would 
not have let the man from the 
ministry get off so lightly. 

ISS goes for a 
local clean-up 

ISS International Service 
Systems, the Danish office 
r-Tpnninp group, has hired a 
local man to head its North 
American division, the market 
I porter in the US cleaning 
business, writes Hilary Barnes. 

Dennis Spina, 50. president 
and chief executive of 
Suburban Propane, the second 
largest retail distributor of 
propane gas in the US, has 
replaced Henrik Slipsager. 
Slipsager quit after he was 
pa ss e d over this summer in the 
battle to succeed the group’s 
veteran chief executive, Poul 
Andrehssen, when he retires in 
1996. 

Spina's arrival at ISS 
coincides with the Danish 
firm’s decision to get its shares 
listed on the New York Stock 
Exchange and raise $80m of 
new capital ESS's profits have 
grown rapidly over the past 
four years and North America 
now accounts for 44 per cent of 
the group’s revenues. Roughly 
45,000 Of ISS'S 120.000 
employees are based in North 
America. 

Suburban Propane is part of 
Hanson Industries which 
acquired it when the UK 
conglomerate took over 
Quantum Chemical in 
September 1993. Spina is being 
replaced by the group's chief 
financial officer Salvatore 
Quadrino. Quadrino. 47, will be 
based in Whippany. New 
Jersey. 

■ William Crosby, 73. one of 
the grand old men of the US 
life insurance industry, is 
stepping down after 27 years as 
chief executive of US Life, the 
New York-based insurance 
company which has $132bn of 
life insurance in force. Crosby, 
who entered the life insurance 
industry immediately after he 
was discharged from the US 
Navy, started in business as an 
insurance agent in Tennessee 
before moving to New York 
where he helped set up the 
state’s first life company. 

William Simpson, 55, who 
was chief operating officer of 
Transamerica Occidental Life 
before he joined US Life in 
1990, takes over as chief 
executive on January 1. Crosby 
will continue as chairman of 
the board and the executive 
committee. 









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FINANCIAL TIMES MONDAY OCTOBER 3 1 1994 


13 


BARBICAN, LONDON 

The first theatrical 
performance of the 
'Everybody's 
Shakespeare' 1 season 
opens on Wednesday 
when the Ousseldorf 

Schauspielhaus brings 
Karin Beicr’s 3 

controversial staging of j? 
"Romeo and Juliet" J| 
(right) to the main & 
Barbican Theatre. !£ 
Downstairs in the Pit, t 
the director John 3j 
Barton leads a week j 
of performance of ' 

'The Language of 
Shakespeare". 







• 

& 





OPENINGS 


ARTS 


MUNICH 

A year after Peter Jonas's arrival as intendant the 
English invasion of the Bavarian State Opera 
continues with a new production of Mozart's “Don 
Giovanni", opening tonight. It is conducted by Colin 
Davis, staged by Nicholas Hytncr and designed by 
Bob Crowley, with a cost including William Shimeil 
and Alison Hagley, 


ROYAL COURT, LONDON 

Stephen Daldry, director of the acclaimed 
current West End staging of An Inspector 
Calls, tackles a new play for the first 
time this week. The Editing Process, by 
Meredith Oakes, deals with 
the publishing industry. 

The first night is on 
Wednesday. 




LONDON SOUTH BANK 

The most modem jazz, leavened by dry 
humour and sprinkled with quirky 
quotations from all manner of 
'Americana, is guitarist Bill Friscll’s stock 
in trade. At the Queen Elizabeth Hall on 
Wednesday he applies himself to the 
live accompaniment of classic Buster 
Keaton silents in what should be a treat 
for fans of either or both. The Go West 
tour continues to Belgium, Italy and 
Germany, 


COVENT GARDEN, LONDON 

The Royal Ballet season begins on Thursday 
with the first London showing of the company's 
new production of 'The Sleeping Beauty". 


SAINT-ETIENNE 

Admirers of French 
composer Jules 
Massenet will be .jUr- A 
flocking to the 
city of his birth 
on Friday for a \ 

rare staging of ' 

“Panurge", his ■+*■ 

Rabelais- s 

inspired operatic { 

comedy. It forms/ i ’’/7 

the centrepiece 

of this year's 

Massenet 

Festival, which 

also includes 

performances 

of "Lo Cid", recitals by young 
French singers and 3 special 
Massenet exhibition. The 
driving force behind the 
festival is the conductor 
Patrick Foumillier (right). 





The truth 
behind 
Wonderland 

Jackie Wullschlager explores the 
dark side of Lewis Carroll as 
a new play opens in London 



Alice Liddell photographed by Lewis Carroll: a celebration of Victorian innocence or forbidden desires? 


Opera / Romeo et Juliette 

A night off for 
the intellect 


A hundred years ago, an 
Oxford don asked a mother 
if he might photograph her 
three daughters. “What I 
like best of all," he wrote, “is to 
have two hours of leisure time 
before me, one child to photograph 
and no restrictions as to cos- 
tume ... I trust you will let me do 
some pictures of Janet naked [but, 
if the worst comes to the worst, and 
you won't concede any nudities, I 
think you ought to allow an three to 
be done in bathing drawers, to 
make up for my disap po intment ]." 

This was Lewis Carroll, a 
respected academic, addressing the 
prim wife of another Oxford fellow. 
Was the famous children's writer a 
Victorian innocent, or was he a 
19th-century Humbert Humbert, 
driven by forbidden desires, draw- 
ing the guileless into his web? 

Tomorrow, Alice's Adventures 
Under Ground, a new play about the 
darker side of the great storyteller, 
opens at the National Theatre. Writ- 
ten by Christopher Hampton, 
author of the successful 1980s 
drama Les Liaisons Dangereuses, 
and directed by the radical choreog- 
rapher Martha Clarke, it is based on 
intimate letters and diaries and 
fixes on Carroll’s own dangerous 
liaisons with little girls. 

This is the most sensational 
aspect of Carroll’s life. Biographers 
have always fought shy of it, while 
passages in Carroll’s diary casting 
light on the troubled side of such 
friendships were altered or torn out 
after his death. But it is an issue 
which not only lies at the heart of 
the creation of the Alice books. It 
also raises topical questions about 
what makes adults write children's 
books at all. and about how adult 
fantasies mould a society's vision of 
childhood, and so condition chil- 
dren’s rights and lives. 

Carroll grew up in the 1830s, 
when the Victorian cult of child- 
hood was beginning to grip the 
nation. It was an En glish phenome- 
non - compare the simpering inno- 
cence of Dickens's girl heroines, or 
Tess of the dUrbervilles, or Little 
Buttercup with their worldly Euro- 
pean counterparts like Madame 
Bovary, Anna Karenina, Carmen - 
and it was rooted in Victorian 
repression of sex. 

This made pre-sexual girls an 
obvious focus. Many famous Victo- 
rians fan fin- them - Ruskin wrote 
love letters to a nine-year-old, the 


vicar-diarist Francis Elvert rhapso- 
dised about girlish thighs and but- 
tocks, and Lewis Carroll was fixated 
with little Alice UddelL 
In our post-Freudian age, the sex- 
ual undercurrents seem blatant and 
these friendships unhealthy. The 
troth was more ambiguous. A man 
like Carroll loved children instead 
of women because they were safely 
pure and thus sexually undemand- 
ing. He found in them a focus for 
emotional satisfaction which never 
threatened his ideal of chastity. His 
love probably had something of the 
sexual frisson of a schoolgirl crush; 
it fuelled the imagination but was 
never meant to be realised. 

Carroll turned his obsession into 
a new form of literature. Far Alice 
Liddell, he wrote Alice's Adventures 
in Wonderland, and gave it to her 
for Christinas 1865. It was a hit In 
the nursery because it was fimny, 
amoral and dismissive of adults. It 
was a hit with parents because it 
recreated the lost imagination of 
childhood. These two features made 
it the first children’s classic. Its mfir 
of subversion and nostalgia has 
shaped every children's book writ- 
ten since. 

C arroll was a stuttering bach- 
elor m ^tbrnnatirian whom a 
buttoned-up society pushed 
into real eccentricity. He was thin 
as a stick and stiff as a poker, he 
mid and ate little, and listed his 
faults as “indulging in sleep in the 
evening". He fled instantly from 
any ga theri n g where his childr en's 
books were mentioned, yet spent 
several weeks a year on the beach 
at Eastbourne, carrying a supply of 
safety pins with which to persuade 
pre-pubescent girls to hitch up their 
skirts and paddle in the sea. 

Carroll disciplined his emotional 
self into non-existence, then poured 
his vengeful frustration into fan- 
tasy. The Alice books, where an 
untouchable little girl keeps aloof 
from the threats of sensuous, vio- 
lent, uncontrollable figures like the 
Queen of Hearts and the Mad Hat- 
ter, depend on a distaste for sexual- 
ity. The dream of the Wonderland 
garden suggests a guilt-free Eden 
before the FalL 

After Carroll, these echoes began 
to sound through children's books 
and give the genre its mythic, last- 
ing appeal. By the 1900s Freudian 
undertones c ame close to the sur- 
face. Peter Pan is about the triumph 


of a sgyieaa boy over the masculine , 
virile Captain Hook, marked by the 
phallic symbols of twitching iron 
hook and fat cigar. Barrie, too, liked 
children, not women; his marriage 
was uncGnsumated and his Never- 
land, where no one grows up, is 
another prelapsarian wonderland. 
So i s the riverbank of The Wind in 
the Widows: Kenneth Grahame told 
president Roosevelt that the book 
was “clean of the clash of sex”. 

By the 1950s. the cult of children 
was being replaced by the cult of 
adolescence, but Carroll’s Victorian 

IriffflliRatinn of childhood Still held 

sway. A novel like Lolita is a teen- 
age descendant of Alice in the aura 
of innocence surrounding the 


abased heroine, in the surreal won- 
derland of American highways and 
motels, in Nabokov’s wordplay. 

After the Bible and Shakespeare, 
Carroll is the most quoted author In 
English. His letters to little girls are 
little-known, but their liquid flow of 
emotion and badgering sentiment - 
“I send you seven kisses, to last a 
week"; “Haven’t I a right to be 
affectionate if I like?" - complement 
the rigour of Alice. They suggest the 
link between adult fantasies and 
feaiS. and great children’s writing: 

Martha Clarke has long speci- 
alised in evoking the world of fan- 
tasy, and theatre, which «>n more 
effectively win sympathy for differ- 
ent perspectives, is perhaps a better 


place than biography to explore this 
touchy side to Carroll’s story. 

In Les Liaisons Dangereuses, 
Hampton staged a historical recon- 
struction which also reflected the 
pleasure-seeking, 1980s me-genera- 
tion. Alice's Adventures Under 
Ground - Carroll’s original title, 
rejected because it sounded like “a 
lesson book about mines" - is just 
right for the self-doubting; child-ob- 
sessed politically correct 1990s. It 
should provoke, as Liaisons did, lit- 
erary, historical and social debate. 

* Jackie Wullschlager ‘s book 
* Inventing Wonderland", about the 
Hues of Leans Carroll and Kenneth 
Grahame, will be published by 
Methuen next spring. 


W riting in this paper the 
week before last, the 
Director of the Royal 
Opera put up a spir- 
ited defence of the company's new 
Ring cycle. Among his arguments 
was the need for variety in a 
healthy opera company, the imme- 
diate instance at Covent Garden 
being the juxtaposition of that Ring 
with an imminent new production 
of Romdo et Juliette. 

The Gounod has now arrived. 
And different it certainly is. 
Whereas the Ring set minds whirl- 
ing on a wild roundabout of ideas, 
touring its audiences to cheers of 
enthusiasm and outraged booing, 
this miserably unimaginative pro- 
duction of a far from probing opera 
gives the thinking opera-goer's 
intellect the night off. To spend 
time and money on this Romto et 
Juliette one needs a good reason 
and the Royal Opera - fortunately 
- musters two. 

They are a Romeo and a Juliet 
who look as if they were bom to 
play their roles. A wicked photo in 
the programme reminds us of how 
thing s used to be. capturing Goun- 
od’s original Juliet Marie Caroline 
Carvalho, looking portly and frump- 
ish, “posing a problem for the cor- 
set manufacturers" as the caption 
naughtily describes her. At a time 
when even politicians are expected 
to have telegenic appeal, that is 
clearly no longer good enough. 
Today’s Romeo is the young and 
personable Roberto Alagna. who 
made such a fine impression in La 
Bohime two years ago. 

For a tenor bom in France of 
Sicilian parents, this opera, combin- 
ing a passionate Italian love story 
with music of Gallic elegance, 
would seem to be the ideal choice. 
Alagna declares his challenge to 
Tybalt with steel in the voice, and 
wraps his farewell to Juliet softly in 
whispers. Forceful but tender, his 
Romeo is a vivid personality 
vocally, even if his noting is vague. 

At the balcony window he is 
answered by the touchingly fragile, 
dark-eyed Juliet of Leontina 
Vaduva. As we know from her pre- 
vious appearances at Covent Gar- 
den, Vaduva is a singer who paces 
herself carefully. This means that 
the early scenes are tentatively 
sung, the famous Waltz Song, 
beloved by Melba, barely getting 
into its stride. But taking Friar 
Laurence’s potion stimulates her to 
give more from there to the end - a 
stylish performance, if less securely 
in her voice than the recent Manon. 

It is fortunate that they make the 
balcony scene so believable, as nei- 
ther Gounod nor the production 
does much to help. Turning Shake- 
speare into opera is work for a 
genius, as the only two indisputable 
successes (both of them by Verdi) 
show. 

It is almost painful to think back 
to the poetry that Shakespeare puts 


into Romeo's mouth as he gazes up 
at Juliet and then compare that to 
Gounod’s prosaic music, which 
turns a literary marvel into worka- 
day crotchets and quavers. 

Interviewed on television last 
week about his new opera at 
Glyndeboume. Harrison Birtwistle 
said he did not believe in just set 
ting a story to music. In Romio et 
Juliette, Gounod offers some memo- 
rable numbers - the two 
well-known arias and the Act 4 sun- 
rise duet - but they are purple pas- 
sages in an opera which takes sim- 
ply telling the story as its highest 
objective. 

All of Shakespeare’s main charac- 
ters are here. Sarah Walker man- 
ages to suggest something of the 
Nurse's fussiness, though Gounod 
leaves little of her character intact. 
Despite having to wear a tonsure 
that looks like a tea cosy. Robert 
Lloyd has the quietly-spoken 
authority for Friar Laurence. Anna 


Whichever way one 
looks at the set - as 


colour, as shape, as 
acting space - it is 
devoid of imagination 
and atmosphere 


Maria Panzarella makes a bright 
interlude of her little scene as Ste- 
phana Francois le Roux’s Mercutio, 
elegant and dynamic, is in his vocal 
prime and. Paul Charles Clarke 
makes a fearsome Tybalt The fight 
scenes have splendid dash under 
Charles Mackerras, who remains as 
vivid an opera conductor in all rep- 
ertoire as ever. 

As for the production, what can 
one say? When English National 
Opera put on Romio et Juliette they 
cannibalised an old set for Britten's 
Queen Elizabeth I opera, Gloriana 
(right for Shakespeare, if not 14th- 
century Verona). But even that 
looked better than what the Royal 
Opera has acquired here. A few 
building blocks, miserably lit, have 
to serve as monastery, palace and 
piazza. Whichever way one looks at 
them - as colour, as shape, as act- 
ing spaces - they are devoid of 
imagination and atmosphere. 

This non-production, by producer 
Nicolas Joel and designer Carlo 
Tommasi, originated in Toulouse. 
At a time when the UK still has a 
trade deficit with France, it was 
hardly a sensible import 


Richard Fairman 

Production sponsored by Goldman 
Sachs. Performance continue until 
November 17 



■ BERLIN 

OPERA/DANCE 

Staatsoper untar den Linden The 
nwfri event this week Is the first 
night on Sat of the new Daniel 
B^enbolm-Harry Kupfer production 
of Siegfried, with cast heeded by 
Siegfried Jerusalem, Falk 
Struckmarm, Graham Clark and 
Deborah Polaskl (repeated Now 9, 16 
®d 20). Repertory also includes 
Telemann’s Orpheus and Tosca 
fining Suzanne Murphy, Sergei 
Larfn and Sherril MBnes. Rend 
Jacobs conducts the Akademle fOr 
Ajte Musik and R1AS Chamber 
Chorus In tomorrow’s concert 
devoted to Bach cantatas (200 
4762/2035 4484) 

Deutsche Oper Hermann Prey gives 
0 song redtal on Wed. Repertory 
over the following 10 days includes 
a Balanchine evening, Alda, Der 
^®0ende Hollander and Die 
ZfafoerflCte. A new production of 
rafenc’a Dialogues des CarmAlftes 

opens on Nov 12 {341 0249) 
CONCERTS 

^bSfarmonie Tomorrow and Wed: 
B»nn Miller Orchestra. Tomorrow 


(KammermusiksaaQ: Freiburg 
Baroque Orchestra plays Bach and 
VivaldL Sat Haydn’s Creadon. Next 
Mon: Daniel Barenboim conducts 
chamber version of Mahler's Das 
Led von der Erde. The next Berlin 
Philharmonic concerts are on Nov 9, 
10 and 11 (2548 8132) 
Schauspielhaus Thurs: Estonian 
Philharmonic Chamber Chorus in 
music by Part, Kokkonen and Ugati. 
Fri; Paavo Jflrvi conducts Berlin 
Radio Orchestra and Chorus In 
symphonies by Tubtn and Sibelius. 
Sum Andras Ligeti conducts Berlin 
Symphony Orchestra In Bartok, 

Tam berg, Kurtag and S&efius (2090 
2156) 


NEW YORK 

EATfiE 

Uncommon Women And Others: 
mivai of Wendy Wasserstein’s 
y about friends at a small New 
jland women’s college, who meet 
tea mid then for a reunion six 
its later. Just opened (Lucille 
tel, 121 Christopher St, 239 

*Three Tall Women: a poetic play 
Edward Albee, dominated by the 
je performance of Myra Carter, 
j, Jordan Baker and the droll 
nan Sekles represent three 
orations of women trying to sort 
: their pasts (Promenade, 2162 
redway at 76th St, 239 6200) 

Angels in America: Tony 
rimer's two-part epic conjures a 
on of America at the edge of 
aster. Part one !s Millenium 
proaches, part two Perestroika, 
red on separate evenings (Walter 
r, 219 West 48th St, 239 6200) 

A Cheever Evening: A.R. 
may's play Intertwines elements 


from 18 stories by John Cheever to 
create a new work, paying homage 
to one of his Influences while 
showing Cheever’s work in a new 
light (Playwrights Horizons, 416 
West 42nd St, 279 4200) 

• An Inspector Calls: J.B. 
Priestley’s 1945 mystery in a 
stunning re-interpretation by 
Stephen Daldry, first seen at 
Britain’s National Theatre (Royale, 
242 West 45th St, 239 6200) 

• Show Boat Harold Prince's new 
production of the 1927 Jerome 
Kom/Oscar Hammersteki musical is 
the first show on Broadway to cost 
$75 a ticket It Is a huge hit which 
will run and run - but in her FT 
review, Karen Frfcker said that 
despite Its musical excellence, the 
production was emotionally empty 
(Gershwin, 51st St west of 
Broadway, 307 4100) 

• Jelly RollL Vemei Bagneris stars 
In a musical show about Jazz legend 
Jefiy Roll Morton (47th Street 
Theatre, 304 West 47th St 265 
1086) 

• Guys and Dons: a top-notch 
revival of the 1950 musical about 
the gangsters, gamblers and 
good-time girts around Times 
Square (Martin Beck, 302 West 45th 
St 239 6200) 

• Carousel: Nicholas Hytner's 
bold, beautiful National Theatre 
production from London launches 
toe 1945 Rodgers and Hammerstem 
musical towards the 21st century 
(Vivian Beaumont 150 West 65th St 
239 6200) 

+ Kiss of the Spider Woman: pop 
star and ex-Miss America Vanessa 
WBllams has taken ova- the title rote 
in the long-running Kander and Ebb 
musical directed by Harold Prince ■ 
(Broadhurst 235 West 44th St 239 


6200) 

• Blood Brothers: WDly Russell’s 
musical about twins who, separated 
at birth, eventually meet and fail in 
love with the same girl. The cast 
includes Carole King (Music Box, 

239 West 45th St 239 6200) 

• Stomp: a loud, aggressive and 
energetic show m which a troupe of 
performers dance, dap and 
generally bang on everything In 
sight Far more engaging than you 
might expect (Orpheum, 126 Second 
Ave between 6th and 7th Streets, 
307 4100) 

OPERA 

MetropoStan Opera This week's 
repertory consists of Tosca tonight 
and Fri with Ghena Dimitrova and 
Luciano Pavarotti, Le nozze di 
Figaro tomorrow and Sat with Bryn 
Terfel and Dawn Upshaw, Cav and 
Pag on Wed wtth Vladimir Atiantov 
as Canio, and Arabella on Thurs with 
Kiri te Kanawa and Marie 
McLaughlin. The first new 
production of toe season is 
Shostakovich's Lady Macbeth of 
Mtsensk, opening Nov 10 (382 6000) 
State Theater New York City 
Opera’s autumn season runs tfll Nov 
20. This week's performances, dally 
from Wed tiH Sun, feature La 
boheme, Meftstofefe, II barbiere di 
Shriglia and Die ZauberflOte (870 
5570) 

DANCE 

New York City BaOefs winter season 
runs from Nov 22 to Feb 26 at New 
York State Theater. The opening 
night gala will be followed by a 
week of repertory performances. 

(307 4100/870 5570) 

CONCERTS 

Carnegie Hall Rafael FrOhbeck de 
Burgos conducts the Vienna 
Symphony Orchestra tonight in 


works by Webern, Beethoven and 
Brahms, with piano soloist Rudolf 
Buch binder. Alicia de Larrocha gives 
a piano recital on Wed (247 7800) 
Avery Fisher Hall This week’s New 
York Philharmonic concerts are 
conducted by Leonard Slatkin and 
Charles Dutott. In tomorrow's 
programme, Slatkin conducts Kemis, 
Dvorak and Strauss, with vioOn 
soloist Pamela Frank. On Thurs. Fri, 
Sal and next Tues, Dutoit conducts 
Prokofiev, Rave! and Respighi, with 
violin soloist Glenn Dfcterow (875 
5030) 

Alice Ttdly Hall The Borodin 
Quartet s cycle of Shostakovich 
string quartets continues on Nov 2, 
13, 16 and 20 (875 5050) 
JAZZ/CABARET 
Algonquin Hotel Weslla Whitfield 
brings her droll wit and agile voice 
to bear on two shows, Including 
songs by Rodgers and Berlin (59 
West 44th St, 840 6800) - 

Cate Carlyle The Incomparable 
Bobby Short continues to hone 
respectful but incisive takes on 
every standard under the sun (35 

East 76th St, 570 7189) 

Michael's Pub Singer Hadda 
Brooks celebrates her first album In 
40 years Tues-Sat, while Woody 
Alien ’8 Ragtime Orchestra holds 
forth as . usual on Mon (211 East 
55th St, 758 2272) 


■ PARIS 

DANCE 

• The opening production of toe 
Paris Opera Ballet's 1994-5 season 
can be seen at the Bastflle tonight, 
tomorrow, Fri and Sun afternoon 
(continuing tiB Nov 17). it consists of 
a Balanchine-Robbins programme 
preceded by a grand spectacle with 


the entire company (4742 5371) 

• The Kirov Ballet gives six 
performances between Wed and 
next Mon at Theatre des 
Champs-Bys6es. The programme 
consists of Coppella and The 
Fountain of Bakchisarai (guest 
soloist Sylvie Guillem). The Kirov 
Opera follows from Nov 23 to Dec 
11 (4952 5050) 

• Trisha Brown Dance Company 
opens a 10-day residency on Thurs 
at Th«Kre de la Vfile (4274 2277) 

OPERA 

• The first of two cycles of the 
new Ring production at the Ch&telet 
begins tonight The conductor is 
Jeffrey Tate, the producer Pierre 
Strosser, and the cast includes 
Robert Hale. Gabriele Schnaut, 

Heinz Kruse and Kurt Rycfl. The 
second cycle begins on Nov 8 (4028 
2840) 

• The next opera at the BastiDe is 
a revival of Le nozze di Figaro, 
opening on Sat and running till Dec 
4. Ivan Fischer conducts a cast 
headed by Hakan Hagegard, Leila 
Cuberii, Andrea Rost and Ferruccio 
Furianetto (4473 1300) 

CONCERTS 

Salle Pfeyd Itzhak Perlman plays 
the Tchaikovsky Violin Concerto on 
Wed and Thurs with the Orchestra 
de Paris conducted by Semyon 
Bychkov (4563 0796) 

BastSle William Christie conducts 
Les Arts Florissants in a Purcell 
concert on Sun (4473 1300) 
JAZZ/CABARET 
American soul singer Mighty Sam 
McClain is In residence this week 
and next at Lionel Hampton Jazz 
Club. Music daily from 10.30pm to 
02.00am (Hotel Meridian Paris Etoile, 
81 Boulevard Gouvfon St Cyr, tel 
4068 3042) 


ARTS GUIDE 

Monday: Berlin, New York and 
Paris. 

Tuesday: Austria. Belgium, 
Netherlands, Switzerland, Chi- 
cago. Washington. 
Wednesday: France. Ger- 
many, Scandinavia. 

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

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 
(Central European Time) 
MONDAY TO FRIDAY 
NBC/Super Channel: FT Busi- 
ness Today 1330; FT Business 
Tonight 1730. 2230 

MONDAY 

NBC/Super Channel: IT 
Reports 1230. 

TUESDAY 

Euronews; FT Reports 0745, 
1315, 1545, 1815, 2345 

WEDNESDAY 

NBC/Supar Channel: FT 
Reports 1230 

FRIDAY 

NBC/Super Channel: FT 
Reports 1230 

Shy News: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News: FT Reports 0430, 
1730: 




■*•<**. Tte next ta the 
4 ' monthly round 

f of staged con ■ 

>• versazioni be- 

tween the UK 
;jpHWf chancellor and 
■ISm governor of the 
I aP^SB Bank of Eng- 
■ «i land takes 
place this Wednesday. The tam- 
ing of these meetings is a bit 
archaic, as they are loosely 
linked to the publication of the 
figures for MO (cash balances) 
which are out today, but which 
are now only one limited part 
of the jigsaw of indicators 
which the Bank and Treasury 
examine. 

This time, however, much 
light has been shed by the pub- 
lication of the flash estimate 
for third-quarter GDP. This 
estimate - for whose introduc- 
tion the Central Statistical 
Office should be congratulated 
- itself summarises a large 
range of indicators. The GDP 
estimate was followed by the 
CBI quarterly Industrial 
Trends survey, still the least 
bad forward indicator we pos- 
sess. 

In a speech in the West Mid- 
lands on Thursday, the gover- 
nor. Eddie George, came as 
close to disclosing his advice to 
the chancellor as he is ever 
likely to do before the event. 
As usual there is something 
for each side. To comfort the 
doves, be reminded the assem- 
bled businessmen - as he had 
earlier that day reminded a 
financial audience in London - 
that "markets are currently 
exaggerating the inflationary 
dangers and the extent of the 
rise in interest rates that 
might ultimately prove to be 
necessary to contain them". He 
detected some moderation in 
the output data and said that 
the personal sector might be 
less buoyant than it was in 
view of the flat housing mar- 
ket. 

He spoke of producers 
absorbing cost pressures in the 
early stages of the production 
process and of the intense 
retail competition, which was a 
powerful ally in keeping prices 
down. Last, but by no means 
least, he reminded people of 
the further fiscal tightening in 
the pipeline. Tobacco and road 
fuel duty rise this December. 
In April, not only does Vat on 
fuel more than double, but tax 
allowances for married couples 
and for mortgage interest are 
to be tr imme d even If nothing 
further is announced on Bud- 
get day on November 29. 

For the hawks, he referred to 
the re-entry problem - that is 
the eventual need to slow 
down the growth of output to a 
rate that can be sustained in 
tbe medium term. Moreover 


Samuel Brittan 


UK rates will 
need to rise 


UK non-oil GDP 


% cftanga 

S - - - 


TWo quarterly moving average, annualised 



1989 

Sara 090 


Capacity operation In UK manufacturing 


% of firms not working below capacity 
70 



1972 74 76 78 80 82 84 

Sowar ca MwMI Tran* Sunny 


88 90 92 94 


estimates of output growth 
tend to be revised upwards at 
this stage of the cycle. Any 
slowdown in consumer spend- 
ing. so far from being a bad 
sign, will be much needed "if 
we are to find room for stron- 
ger growth of exports and 
investment" of which he saw 
such encouraging signs. 

He was even more confident 
that the increase in base rates 
in September was right; and 
said “you wouldn't expect me 
then to rule out the possibility 
of some further rise in interest 
rates at some point ahead”. For 
good measure he added: “I 
don’t expect you to cheer 
exactly when rates do have to 
go up. But I don’t think you 
would thank us if we 
flinched . . ." 

The really tell-tale bits relate 
to his reasons for underlying 
optimism, such as the favoura- 
ble outlook in overseas mar- 
kets. British industrial compet- 
itiveness. and the historically 
high real pre-tax returns on 
capital. To a good central 
banker these are reasons for 
ensuring that things remain 
that way, rather than for sim- 
ple-minded applause. 

As a connoisseur of Central 
Bank Speak, my interpretation 


is that Eddie George will either 
ask for a moderate increase in 
base rates - say to 6 'A or 6 
per cent - at this week's meet- 
ing, or prepare the ground for 
such a request the following 
month. Further ahead I would 
guess that his crystal ball can- 
not so far see any need for 
interest rates above 7 per cent 
- compared with the 10 per 
cent over the next three years 
implicit in the yield curve for 
bond rates. 


L ooking myself at the 
third-quarter GDP, I 
cannot see much sign 
of any slowdown. The 
top chart plots a two quarterly 
moving average of this mea- 
sure excluding the volatile 
North Sea sector. It shows 
growth rising steadily since 
the end of the recession to 
reach an annualised rate of 3'/» 
per cent. 

There is some argument 
about whether the trend rate 
of growth is not much above 2 
per cent per annum, as the 
Treasury and Bank seem to 
believe, or nearly 3 per cent, as 
Christopher Dow, a former 
Bank of England economic 
director, argues in the publica- 
tion Leopold Joseph Economic 


FT 


DOING BUSINESS 


FINANCIAL TIMHS 

Conference.', 


WITH HUNGARY 


Investment Prospects Re- Appraised 
14 & 15 November 1994 - Budapest 

With a new government recently elected to office, this conference will provide a timely 
opportunity for a re-appraisal of Hungary's attractiveness as a location for direct and 
increasingly, portfolio investment. 


ISSUES INCLUDE: 

• New directions for privatisation in Hungary 

• Power sector privatisation and de-regulation 

• Investing in Hungary as a European base 


SPEAKERS INCLUDE: 

* Dr Gyula Horn 
Prime Minister, 

Hungary 

* Mr Laszlo Bckesi 

Minister of Finance, 

Hungary 

• Mr Ferenc Bartha 

Government Commissioner for Privatisation. 

Hungary 

• Dr Gyorgy Suranyi 


Managing Director. 


Central-European Internationa] Bank Ltd 


Mr Ernst Hofmann 
Managing Director, 

Opel Hungary 

Dr Lajos Bokros 
Chairman & Chief Executive. 
Budapest Bank Ltd 
Chairman of the Council, 
Budapest Stock Exchange 

Mr Andras Simor 
Managing Director, 
Creditanstalt Securities Ltd 


There are some excellent marketing opportunities attached to this 
conference, please contact Lynctlc Northcy on 07 1 814 9770 for 
further details. 


Lufthansa 


Number one to Fasten Europe 


DOING BUSINESS WITH HUNGARY 
Investment Prospects Re-Appraised 


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FINANCIAL TIMES MONDAY OCTOBER 31 1994 


Comments. In either case the 
margin of excess capacity is 
being quite rapidly eroded, 
which is confirmed both from 
the labour market figures and 
the CBI capacity utilisation 
survey. Michael Saunders of 
Salomon Brothers has pro- 
duced a chart showing capac- 
ity utilisation at a normal rate 
in Germany, well above nor- 
mal in the US and somewhere 
in between in Britain. 

Faithful readers will know 
the arguments for taking nomi- 
nal spending as the target vari- 
able for policy. Because of 
recent very low inflation rates, 
nominal GDP growth, when we 
get more recent estimates, 
might turn out to be at around 
5 per cent per annum, perhaps 
even less. 

In itself this is entirely satis- 
factory. But if there is an over- 
whelming proportion of Indica- 
tors pointing to upward 
pressures in the quarters to 
come, and moreover many of 
them come directly from the 
cost and prices component, it 
is time to sit up and take 
notice. 

CBI output expectations are 
the highest since October 1988. 
towards the peak of the last 
boom. Export deliveries 
reported are the highest since 
the series began in 1978. The 
balance of firms in the CBI sur- 
vey intending to Increase 
prices is now the highest since 
early 1991. before inflation 
began its plunge. The percent- 
age increase in earnings due to 
pay settlements has edged up 
by around % percentage points 
in both manufacturing and ser- 
vices. And - most difficult to 
take into account in policy - 
the Economist commodity 
price index has risen, admit- 
tedly from a low point, by over 
40 per cent in the last year 
measured in dollars, and by 
over 25 per cent measured in 
sterling. 

This last indicator points to 
the radical change in the inter- 
national environment Demand 
and output are rising vigor- 
ously from a varied series of 
starting points in the indus- 
trial, developing and post-com- 
munist worlds alike (apart 
from Japan). 

The UR has no painless way 
of escaping completely world- 
wide inflationary or deflation- 
ary forces. But every aspect of 
the conjuncture suggests that 
any movement in sterling 
ought to be modestly upwards, 
compared with the sideways , 
movement of the last two 
years. The exchange rate must j 
be a more important consider- 
ation in any base rate decision 
than the chancellor will find it 
politic to admit to his own 
backbenchers. 


E uropean Union specifi- 
cations for the bendi- 
ness of bananas have 
made irresistibly 
comic copy on the front pages 
of Britain's tabloid press 
recently. Most people are 
unable to take anything to do 
with bananas seriously. 

Not so a committed core of 
trade negotiators, officials and 
businessmen involved in an 
acrimonious dispute over the 
ED’S arrangements for import- 
ing the yellow fruit 
Opposition to the EU’s 
banana import scheme is run- 
ning high. In recent weeks, the 
US has launched one trade 
investigation and threatened a 
second: the German govern- 
ment has complained for the 
second time to the European 
Court of Justice; and Gua- 
temala has vowed to lodge a 
complaint with the new World 
Trade Organisation, successor 
to the General Agreement on 
Tariffs and Trade next year. 

While disagreements over 
bananas date back to the cre- 
ation of the EU in 1957, current 
divisions are so deep that the 
Union is finding it difficult to 
agree any action at alL 
The present source of fric- 
tion is the preferential access 
to the EU banana market - 
which accounts for 3.6m 
tonnes a year - granted to for- 
mer colonies of Britain and 
France in Africa, the Carib- 
bean and the Pacific (ACP) 
under the Lome trade conven- 
tion. 

In 1993. import rules had to 
be harmonised across member 
countries as part of the move 
towards a single market. 
Before this, Germany imported 
bananas from Latin America 
as a source of quality, uniform. 
Inexpensive fruit But the new 
rules placed a quota and a tar- 
iff on these so-called dollar 
bananas, while allowing in 
ACP country imports tariff- 
free. Under the current regime, 
80 per cent of import licences 
are allocated to traders on the 
basis of past trade in ACP 
bananas, 60 per cent on the 
basis of past trade in Latin 
American bananas, and 10 per 
cent to newcomers and traders 
in EU bananas. 

Germany was furious about 
tbe new rules, although, as one 
German former agricultural 
official recently roared: “Ger- 
mans are not emotional about 
bananas; it’s pure economic 
good sense." 

Germany consumes more 
b ananas - almost lib per per- 
son per week - than any other 
country in the EU, double the 
level of UK consumption. The 
fruit was seen as a first taste of 
freedom for west Germans 
after the allied blockade. It was 



Fruit wars: banana processing in Costa Rica 


Brussels in a 


banana split 


Deborah Hargreaves on a row 
over the EU’s import scheme 


also a potent symbol of west- 
ern affluence for east Germans, 
who cleared the shelves of 
bananas in west Berlin when 
the Berlin wail was pulled 
down in 1989. 

“Konrad Adenauer did a lot 
of good things for us Germans, 
but the best was the banana 
protocol,'’ said a German offi- 
cial with only a tinge of irony, 
referring to the deal hammered 

out by the first 

German chan- tv*** Ann 
cellor allowing lne ow] 
Germany to SO deep 
import as 


The UK and France remain 
firmly committed to the Lome 
convention. “We’re still as 
behind the banana regime as 
ever, but you can’t disguise the 
feet that it has rather a lot of 
enemies,” said one British For- 
eign Office official. 

UK officials, however, 
acknowledge that the US trade 
Investigation could present the 
most serious challenge yet to 
the EU's 

inns are* banana ar * 
tuns are rangements. 

hat the Mr Mickey 

IT„* „ Kantor. US 


tierman cnan- „„ oanana ar- 

cellor allowing The divisions are rangements. 

Germany to SO deep that the Mr Mickey 

many'bauanas European Union is trade°represen- 
as it wished, findin g it tough to tative, is 

Negotiating the a4nw anv 9r tinn lookin S into 

protocoL held a § ree 311 Y aCUOIl a com p laint 

up the signing by Chiquita 


of the Treaty of Rome, which 
originally created the Euro- 
pean Economic Community. 

Indeed, bananas have almost 
changed the face of the world a 
few times. A Franco-German 
dispute over bananas delayed 
the signing of the Uruguay 
Round agreement in Marra- 
kesh earlier this year. And 
Germany's second complaint to 
the European Court on the 
Issue could still hold up EU 
ratification of the Gatt deal 


7 artinn looking into 

f acnon a com p laint 

mmmmamme by Chiquita 
Brands International, a large 
US banana exporter, and the 
Hawaii Banana Industry Asso- 
ciation that the EU’s arrange- 
ments for importing bananas 
are damaging US companies' 
ability to compete in the 
$2.7bn-a-year EU market. Mr 
Kantor has said he will also 
investigate the quota on EU 
imports from Latin America, 
which has been set at 2.17m 
tonnes this year. 

Latin American countries 


have already had complaints 
over quotas upheld by the Gatt 
disputes panel, which has 
declared the EU arrangement 
illegal- The EU recently 
applied for a waiver to the Gatt 
rules for the LoraS convention. 
The Gatt council is due to con- 
sider the request next week. 

But Mr Kantor’s investiga- 
tions may be more difficult to 
ignore. If he concludes that US 
interests have been hurt by hu 
policy, he is likely to threaten 
retaliatory trade action. If he 
threatens to slap a large 
import tariff on Scotch whisky, 
for example, the UK govern- 
ment would have to decide 
whether it could put national 
interests at risk through its 
support for an altruistic policy 
towards former colonies. Under 
these circumstances. UK politi- 
cians' 'enthusiasm for the 
banana regime could fade fast 

Caribbean banana producers 

are aware of their vulnerability 
in these games of power poli- 
tics, but since bananas are one 
of their few sources of income, 
they must battle on. “We spend 
all our time fighting on the 
diplomatic front to preserve 
our markets - it’s unsettling. 
We need stability to develop 
our agriculture.” said Mr John 
Compton, prime minister of St 
Lucia, which derives half of its 
gross domestic product from 
the sale of bananas to the EU. 

Mr Compton feels embattled 
on all sides, after a tropical 
storm in September destroyed 
60 per cent of the Island’s 
banana crop. After the storm, 
Geest, the main importer of 
bananas from the Windward 
Islands, successfully fought to 
raise its quota of Latin Ameri- 
can bananas to make up the 
shortfall. 

Germany has suggested that, 
since bananas from ACF coun- 
tries are small and of variable 
quality, their producers should 
receive aid to help them diver- 
sify out of bananas. The St 
Lucia prime minister wants to 
encourage the production of 
avocado pears and citrus fruit, 
but since most bananas are 
grown by small, family farms. 
It takes time to put changes 
into practice. 

For now, the European Com- 
mission is stymied on bananas. 
Its current rules for quotas on 
Latin American bananas were 
due to come into force this 
month, but it has been unable 
to agree the technicalities of 
the regime with member gov- 
ernments. Mr Kantor’s investi- 
gation is likely to take about a 
year, and Germany’s complaint 
will be heard in the European 
Court next year. 

Anyone who thinks bananas 
are still amusing had better 
wipe the smile off their face. 


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 


Transport: plan on basis of sustainable 
development - or reverse development 


From Sir John Houghton and 
Mr Aubrey SilbersUm. 

Sir, We are sorry to find the 
Financial Times, of all papers, 
criticising the Royal Commis- 
sion's report on transport with- 
out taking the trouble to appre- 
ciate our arguments. The 
commission has not said that 
building more roads is “intrin- 
sically wrong” (as suggested by 
your leader, “Misreading the 
road map" on October 27). The 
whole basis of the report is 
sustainable development, 
which c ann ot be achieved 
unless assessments take into 
account both “the benefits of 
mobility” and the value of 
environmental assets that 
might be lost 

To carry out such assess- 
ments, the report recommends 
a pragmatic approach, in the 
form of identifying the “best 
practicable environmental 
option" (para 9.S6). The com- 
mission's view on both roads 
and new rail lines (para 4.60) is 
that they should not be built in 
areas of conservation, cultural, 
scenic or amenity value unless 
they have been shown to repre- 
sent the best practicable envi- 
ronmental option. In such 
cases. In the terms of your 
leader, the price associated 


with their use would have to 
be very high indeed before 
their construction could be jus- 
tified. 

You also misrepresented the 
commission's position in 
another respect. The use of 
unleaded petrol remains desir- 
able on health grounds, even 
in cars without catalytic con- 
verters. But we drew attention 
In our ninth report in 1983 to 
other health risks associated 
with high-octane (super pre- 
mium) unleaded petroL 

Neither the commission, nor 
so far as we are aware, other 
environmental experts, has 
ever argued that particular 
grade is (as you put it) “green”. 
John Houghton, chairman, 
Aubrey Silberston, member. 
Royal Commission on Ewiron- 
mental Pollution, 

Room 652, 

Church House, 

Great Smith Street. 

London SWIP 3BZ 


From Dr JSrg 
Schimmelpfenrdg. 

Sir. Your editorial on the 
findings of the Royal Commis- 
sion on Environmental Pollu- 
tion Is founded on two falla- 
cies. 

First, while matching total 


revenue raised from any partic- 
ular group of road users with 
the total costs caused by that 
group may well relate to ques- 
tions of fairness and, thus, to 
selling certain policies to the 
public, it has nothing to do 
with overall economic effi- 
ciency. For any policy to be 
efficient it should set the right 
incentives. 

Consequently, only margins 
are to be taken into account 
As long as the private costs of 
driving one additional mile fell 
short of the corresponding 
social costs, society suffers as a 
whole. 

Second, since the American 
economist. Anthony Downs, 
published his findings on con- 
gestion on US freeways in 1962, 
there has been ample evidence 
- though largely ignored by 
road planners and transport 
ministers - that new roads 
increase road traffic. Again, 
the reason is a matter of incen- 
tives. By relieving congestion 
in the short run the private 
costs of motoring as experi- 
enced by the marginal driver 
are reduced on other roads as 
well and. thus, more drivers 
are wrongly induced to use the 
roads. In the worst scenario 
this may even lead to an 


increase in overall congestion. 

Instead of proceeding with 
the current road building pro- 
gramme, the government 
would be better advised to 
introduce road pricing and sig- 
nificantly to increase fuel 
taxes. By pricing marginal 
drivers off the roads, much of 
today's “demand" for new 
roads would become obsolete. 
The financial consequences of 
this could easily be cushioned 
by, for example, scrapping 
vehicle taxes or reducing 
income tax or National Health 
Service contributions. Taken 
as a whole, this could even 
leave public revenue 
unchanged. 

Every day both the country- 
side and tens of thousands of 
commuters all over the UK 
continue to suffer from disas- 
trous repercussions of Dr 
Beeching's recommendations 
of three decades ago. The royal 
commission's report presents a 
unique and possibly final 
chance to halt and, at least 
partially, reverse this develop- 
ment It should not be wasted. 
JOrg Schiminel pfennig. 
department of economics. 
University of Osnabrdck, 

49060 OsnabrQck, 

Germany 


Let’s drink to 
boost for tourism 


Conlro □□□□□□□□□□□□□□□□ 


Job Title Dept. 

Company 


Address . 


Name of card holder 


Exp. date .... 


Signature. 


..PostCode. 


rXirJurDuU«»«P«">H *.3 1* byBMimh lonl W k«p you ffarmei iH KT praWt* 


From Mr Stephen Cox. 

Sir. I suggest a boost for 
tourism that needs no new 
money, no new “initiatives”, 
and no new government bod- 
ies. Give us intelligent, 
grown-up, civilised pub hours. 
Let pubs open on Sunday after- 
noons if they want to. And let 
pubs and restaurants serve 
alcohol until the small hours of 
the morning. 

Michael Forsyth is the minis- 
ter responsible for licensing. 
As a Scot, he knows they do 
things better up north, where 
pubs can open on Sunday after- 
noons and until lam. And. as a 
deregulator, he should be itch- 
ing to get his hands on these 
absurd English laws. 

How about it? 

Stephen Cox. 
campaigns manager. 

Campaign for Real Ale, 

34 Alma Road, 

St Albans, 

Herts ALl 3BW 


UK must aim to become a key player 
in information superhighways 


From Mr Graham Allen, MP. 
Sir. The space you have 
devoted to the new information 
superhighway ("France pon- 
ders superhighway gamble”. 
October 28) and its potential 
benefits and implications for 
the future (“Information 
groups warned on multimedia 
hopes", October 26) under ling 
the importance of the decisions 
currently under consideration. 

The screen may replace the 
school and this issue is of such 
technological, educational and 
economic Importance that we 
must ensure the best possible 
route is taken to allow it to 
develop and expand. 

As the report by the research 
organisation, Inteco, has 
pointed out.there will not be 
appreciable revenues from this 
industry until the next cen- 
tury. However, this cannot 
inhibit public and private sec- 
tor expansion Into the commu- 


nications revolution. 

The key question is the 
public/private partnership; for 
example, can public benefits be 
negotiated for UK citizens com- 
parable with those Vice-Presi- 
dent A1 Gore is working on in 
the US? In the US, Gore is 
operating within a wholly pri- 
vate sector. Equally, in France 
where the public sector pre- 
dominates, the ambition is for 
the establishment of a network 
of fibre optic cables linking 
every household by the year 
2015, 

The EU industry commis- 
sioner favours bringing the 
lead in development of a Euro- 
pean information superhigh- 
way Into the domain of private 
companies; some other states 
of the EU would prefer public 
operators to control national 
infrastructures. Therefore the 
question Is not one of whether 
Private or public sector domi- 


nates, but how both sectors 
can work together construc- 
tively and create the blend 
which delivers the widest bene- 
fits for the citizen. 

In that positive context a 
future British government will 
try to develop plans for infor- 
mation superhighways with a 
close eye on European and 
global developments. 

All excursions into the explo- 
ration of such high-tech indus- 
try must take account of Euro- 
pean competition and industry 
policies. The potential for 
exettmg development exists 
and we must ensure that 
Britain becomes a key player 
in this new revolution and that 
the benefits will flow to the 
greatest number of individuals. 
Graham Allen, 

shadotv spokesperson on broad- 
casting and the media. 

House of Commons, 
tendon SWiA 0A.\ 


Viv' 


I, ? i i 


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FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Tel: 071-873 3000 Telex: 922186 Fax; 071-407 5700 

Monday October 31 1994 


White House 
and Casablanca 


W ith corruption alle- 
gations having 
claimed two mem- 
bers of ins cabinet 
French Prime Min- 
ister Edouard Bahadur is scram- 
bling to prevent his government 
being fariwteH with <ra»Tirbil in fcha 
run-up to a presidential election 
that he dearly intends to contest 
Mr Bahadur last week proposed a 
series of amendments to France's 
mricfinp political ffoanra and anti- 
corruption legislation These would 
subject public procurement to 
closer scrutiny and leading politi- 
cians to an annnal audit of their 
personal wealth, as well as cut by a 
third the total arnmmt that presi- 
dential candidates could spend in 
the 1396 campaign for the Elysfea. 

But many - fadodtog senior par- 
liamentary figures - are calling for 
more radical reforms, such as a ban 
on ah corporate contributions to 
political parties. Such proposals 
highlight public pressure for stron- 
ger measures against corruption, 
raising questions about the extent 
of the problem, tha response of the 
political and corporate establish- 
ment, and the implications for rela- 
tions between business and state. 

Most observers agree that corrup- 
tion in French politics and business 
is not on an Italian scale. Mr Baha- 
dur is almost certainly right in say- 
ing that “only several hmn anmng 
France's 500,000 elected politicians” 
are besmirched by scandal. 

But Mr Alain Carignon. his for- 
mer communicati ons minister, is 
now in a Lyons prison facing 
charges of corruption in (durable, 
of which he is still mayor. Mr 
Gerard Languet has been forced to 
resign as industry minister over 
allegations concerning payments 
for his holiday villa in St Tropez 
and funding of his Republican 
party. The mayor of Lyons faces 
investigation, and the ex-mayor of 
Nice awaits extradition from South 
ATnflrfca on similar charges. 

Internationally known company 
chiefs have been hit Mr Jean-Louis 
Beffa, head of the Saint Gobain 
glass and pack group, Haa 
been placed undo: investigation in a 
r*aap involving influenc e-tr afficking , 
which triggered the probes into Mr 
Longuet Several executives from 
some utilities and construction 
groups have been questioned con- 
cerning the terms on which they 
secured public works contracts. 

Mr Didier PniMn -V ulwiriMinM , 
chairman of Schneider, the electri- 
cal engineering group, and Mr 
Pierre Suard of Alcatel Alsthom, 
the telecoms, transport and engi- 
neering company, have been placed 
under investigation in different 
types of cases. The former, accused 
of defrauding minority investors, is 
the object of an international arrest 
warrant issued by a Belgian judge, 
while the latter faces accusations 
that he used company funds to pay 


After President Bill Clinton’s 
gestures towards peace and secu- 
rity during his Middle East trip 
last week, the current conference 
in Casablanca provides a timely 
reminder of the economic develop- 
ments required to make peace 
durable. But participants would 
do well to remember that the 
region is Ear from being able to 
beat swords into ploughshares as 
the more visionary Israeli leaders 
sometimes suggest. In fact, it is 
still in urgent search of the politi- 
cal solutions Hi** are an osgantifli 
precondition for development 

The cornerstone of the peace 
process is the relationship 
between Israel and the Palestin- 
ians, and that is in trouble. Israel 
has so far only withdrawn foam 
part of Gaza and the town of Jeri- 
cho. leaving in its place an 01- 
fanctioning Palestinian self-rule 
authority which has failed to get 
to grips with the economic Issues 
confronting it Scarcely any of the 
S720m earmarked by international 
donors for infrastructure projects 
this year has been spent, while 
Palestinian infighting has led to 
the absurd wnfannn of the same 
telecommunications contract 
being awarded to different compa- 
nies. Israel has added substan- 
tially to the problems by shutting 
its borders to tuns of thousands of 
Palestinian workers, thereby deep- 
ening poverty in the territories 
and bolstering Hamas, the radical 
fflHmin gr o up intent on sabotag- 
ing the peace accord. 

Israel and western aid donors 
agree that the modest prospects 
for a viable Palestinian economy 
depend lmavily on a dose associa- 
tion with its Jewish neighbour. To 
talk, as Israeli leaders have done 
recently, of a permansjt physical 
separation between the two com- 
munities, is a recipe for economic, 
and probably political, disaster. 


To avert this debacle, two Bring s 
need to happen. First Israel must 
withdraw speedily from the West 
Bank so that already overdue Pal- 
estinian elections can be hold- Ha 
sizeable part of the Palestinian 
electorate shares western suspi- 
cions that Mr Yassir Arafat, chair- 
man of the Palestine liberation 
Organisation, is not up to the tewv 
of running th» self-rule authority, 
the sooner its voice Is heard the 
better. 

SpmnH thp World Ttanlr, EU and 
OS must intensify their efforts to 
ensure that donor money Is spent- 
quickly and effectively. Part of the 
problem here is the lack of 
regional support for the aid effort 

A few years ago Saudi Arabia 
and Kuwait would have been 
expected to be among the most 
generous contributors to an 
emerging Palestinian state to 
the regional development projects 
hriwg mooted in nagahlanoa 

Bat President Saddam Hussein, 
the price of oil, and President 
Clinton's success in selling bil- 
lions of dollars worth of military 
equipment have meant that even 
the revenues fum* ftm lends of 
ofi a day are insufficient to halt 
the Sandi budget sliding into 
deeper deficit With the kingdom’s 
per capita GNP now little more 
than a third of the average for the 
EU, what was the world's most 

affliiwnt w ^lfaiw ir hftlng rap- 
idly eroded, and political pres- 
sures are growing. Now Saudi 
Arabia and Kuwait face the need 
for substantial additional outlays 
to support the latest US military 
deployment in the region. Security 
in tVm Gulf does not cnma cheaply . 

Enhanced security in the Middle 
East may be what Mr Clinton sees 
foam the White House. But the 
pnirtiftBi obstacles remain daunt- 
ing, and tire economic underpin- 
nings for peace are fragile indeed. 


EU carve-up 


Sir Leon Brittan may be 
disappointed, yet he cannot really 
be surprised. Saturday’s sharing 
out of European Commission jobs 
forced Britain's senior commis- 
sioner to refinqulsh responsibility 
for eastern Europe to his chief 
rival. Mr Hans Van den Broek of 
the Netherlands. He is making no 
effort to hide his bruised feelings. 

Yet from a wider perspective, 
the Commission carve-up is far 
from a disaster. If It is messy, it is 
largely because there are now too 
many commissioners (Riming too 
few jobs cf substanca But Mr Jac- 
ques Banter, new Commission 
president, has done a perfectly 
reasonable job in recasting and 
dividing up the foreign policy 
portfolios - and. far the most part, 
in concentrating fire-power on the 
policy areas that matter. 

Moreover, before deciding 
whether to carry out his veiled 
threat to resign. Sir Lean should 
reflect both on the nature of the 
portfolio he still commands, and 


on the job he has had to drop. 
Trade remains the most important 
aspect of the Commission's exter- 
nal activities, and be still faces a 
formidable array of challenges, 
foam securing implementation of 
the Uruguay Round to pursuing 
closer relations between Europe 
and the dynamic region from 
which it seems most remote, Asia. 

Nor, in relinquishing the east- 
on Europe job, is Sir Leon hand- 
ing over to a protectionist or to 
someone determined to thwart the 
accession of the central European 
countries to the EU. There is little 
doubt that Mr Van den Broek will 
set about the vital task of prepar- 
ing for the Union's next enlarge- 
ment with gusto. What is more, 
the eastern question is one for the 
whole Commission, not just (me 
commissioner. If it is to new 
members, Brussels will have to 
im pipm<»nt changes to its budget- 
ary. trade, agriculture and social 
policies. Sir Leon will have plenty 
of frnfhignng in all these areas. 


Slimmer banks 


Who would be a retail banker 
these days? According to Sir Brian 
Pitman, chief executive of Lloyds 
Bank, the UK’s financial services 
industry is for a rough 

ride, comparable with the 
upheaval experienced by manufac- 
turing industry in the past two 
decades. He is right, but the con- 
dnsians he draws, far from being 
melod rama tic, may prove insuffi- 
rientiy radicaL 

The new pressure on retail 
booking; as Sir Brian points out, 
comes from the nature of the cur- 
rent economic recovery, in partic- 
ular, from low inflation and from 
growing competition. EBgh infla- 
tion used to bail out banks from 
; tiie consequences of sloppy lend- 
ing. No longer. At the same time, 
co mp e titi on is intensifying: with 
margins ti gh t ening both in the 
already ferocious international 
wh olesa le markets and in domes- 
tic retail banking. 

Retail banking margins were 
fattened during recession, when 
customers paid charges demanded 
for Bear of having facilities with- 
drawn. Even during recovery, 
hank* have to rebuild mar- 

gins rather than drive far market 
share, despite protests about bank- 
ing costs from businesses 

and personal customers. 

But now, the squeeze is back on 
- and the longer-term picture is of 
further mar gin erosion. Main- 
stream retail banks' best skill is 
ti» bread-and-butter or deposlt- 
tating and lending. These days, 
that is a commodity business. 
Unless they can show that they 
are better at management, 

Hfe assurance and pensions than 
^-established specialists, or 
that they can derive a cost advan- 
tage from their of nrilHiwB of 
customers when selling such prod- 
ucts, they have no competitive 
advantage in areas. 

Banks have, in fact, shown no 
Particular stall in the provision of 
the newer services. Moreover, only 


a small number of customers 
wants the frill range. Most use 
their banks only for the payments 
system, and go elsewhere when 
they want or other “val- 

ue-added" services. This is why 
Courts, the 302-year-old private 
hank, may be misguided in trying 
to move “upmarket” as it 
announced last week. In trying to 
weed out customers with less than 
£500,000 under management by the 
hank in order to focus on asset 
management, it threatens to alien- 
ate its already-select customer 
base for little return. 

The implication of the pressures 
on retail banking, as Sir Brian Fit- 
man warned, is that job cuts are 
necessary. As a mature, low- 
growth business, retail banks 
ohrmid expect numbers of employ- 
ees to fall steadily as new informa- 
tion and payments-handling 
sy stems are introduced. Further- 
more, the loosening of roles on 
building societies’ l e nd i n g will 
probably lead to fewer banks and 
buBdrng societies. 

While navigating this restruct- 
uring, retail banks need to ask 
themselves whether they should 
attempt to provide a wide range of 
services. To survive, they may 
w«M»d ingtefld r to cut back the 
“extra” services offered to custom- 
ers and to trim further the per- 
sonal service which ac comp a n ies 
mainstream banking. But the 
banks’ traditional advantage has 
been customer loyalty. Somehow, 
they most retain that advantage, 
while increasing efficiency. The 
risk, as they shed staff, is that 
standards of service will decline 
and customers wffl go elsewhere. 

The successful banks of the 
folur e win focus on core areas of 

advantage. They will also become 
more efficient, while continuing to 
provide the quality of service that 
yneteins - even enhances - their 
customers’ loyalty. The rest may 
well decline steadily, under 
remorseless competition. 


After a run of scandals, France is trying to prise politics 
and business apart, say David Buchan and John Ridding 

Magistrates in 
the middle 


cent of French companies have 
adopted the practice. This 
Anglo-Saxon type of solution does 
not sit easily with French corporate 
culture. "Non-executive indepen- 
dent directors do not attract us," 
says a one business leader. 

For many observers, however, 
more fundamental problems lie in 
the dose relationship between busi- 
ness and state, particularly at the 
local level. Scope for corruption was 
increased by the decentralisation of 
decision-making powers to the 
regions over the past decade, and 
the trend by cities to contract more 
of their water and waste treatment 
services to private companies. 

Half of France's 36,000 communes, 
representing 75 per cent of the pop- 
ulation, now have water provided 
by contractors. "These companies 
have the technology and capital 
required these days to carry out 
these services,” says the National 
Association of Mayors. But there is 
widespread suspicion of sweetheart 
deals between public officials and 
private companies. 




M r Balladur now 
proposes giving 
back to prtfcts - 
central govern- 
ment's representa- 
tives in France's 95 dipariements - 
the power to suspend contracts 
where there is ground for suspicion. 
A more radical proposal touted by 
some would be to ban all companies 
carrying out public contracts from 
giving any money to politicians. 

A 1990 law restricts to FFr500,000 
a year the amount that a company 
can donate to a political party. But 
there is a loophole for the construc- 
tion and utility groups, since each 
subsidiary of a group can make 
donations up to this limit Utilities 
tend to set up separate subsidiaries 
to manage major municipal con- 
tracts. so that Generate des Eaux. 
for example, has 2^00 subsidiaries. 

Some say pressure for transpar- 
ency is growing. “We will move 
towards a process of increased legal 
scrutiny of public contracts." says 
Prof Cohen. “The more affairs there 
are, the more momentum win grow 
for a system of auctions and safe- 
guards, such as a panel of magis- 
trates which can oversee contracts.” 

He belives that the process is 
under way. The award last month 
of the potentially lucrative third 
mobile telephone licence to Bouy- 
gues involved a detailed analysis of 
rival projects and stirred a debate 
about the terms of the contest. 
"This kind of debate would not 
have happened before. It was a sig- 
nificant step,” says Prof Cohen. 

More steps will need to be taken. 
“Even if corruption is less than 
before, the popular perception is 
that it is rife," admits one executive 
of an industrial company. “This is 
creating anti-business feeling, and 
has to be resolved quickly.” 




for work an his private property. 

Much of the drive to uncover cor- 
ruption ba« come from the French 
magistracy, which shed its for- 
mer servility to political mid corpo- 
rate power. Its first targets were the 
Socialist party's finances, the per- 
sonal finances of Mr Pierre B6r§- 
govoy, the framer prime minister 
who committed suicide 18 wnwfhg 
ago, and the tangled affairs of Mr 
Bernard Tapie, the leftwing MP and 
fo rmer businessman. 

But tiie number of investigations 
- and the levels they reach - has 
risen sharply this year, shaking 
grwj p mTnant and business leader s 
“ Many company chairmen are terri- 
fied,” says Mr Ehe Cohen, a Paris 
professor of business. “They have 
tiie treatment of their counter- 
parts and they are traumatised." 

Business feeders have condemned 
the high-profile meth od s of the mag- 
istrates and the lack of respect fra- 
judicial secrecy. Mr Suard, for 
example, was detained far 12 hours 


in police custody, and de tails 
of the investigation were leaked to 
the press. 

But the spate of investigations 
has also prompted soul-searching 
about the way business is con- 
ducted. The Patronat employers' 
federation has set up a study group 
with a remit wider than Mr Bafla- 
dur*s anti-corruption commission, 
to include rampanlag ’ relati onship 
to the law, judges and politicians, 
as well as to examine means by 
which companies could exercise bet- 
ter control over themselves. 

Same sectors and companies are 
already taking their own action. 
Hip National Federation of Public 
Works is working on a code binding 
Its SfiOO member companies not to 
offer bribes to win tiie FFrl50bn 
(£l8bn) worth of public contracts 
they carry out every year. Carre- 
four, tba super marke t chain, baa 
forbidden employees to accept pres- 
ents worth more than FFr1,000 from 
suppliers. Gdndrale des Eaux, the 


utilities and communications group, 
has an ethics committee headed by 
a retired senior manager to guide 
managers on sensitive contracts. 

Companies are also questioning 
whether a tradition of powerful 
bosses with inadequate internal 
controls has permitted malpractice. 
“There is too much concentration erf 
power in the PDG \pr6sidents direc- 
teurs-g6n6rauxl Stronger boards are 
needed with more checks and bal- 
ances," says Mr Henri-Clande de 
Betti gnies, professor of ethics at 
Insead business school. 

Pressure for reform of corporate 
governance in France predates the 
current scandals. The legal adviser 
to one leading industrial group says 
the problem is that “PDGs control 
boards rather than vice versa”. 

A 1966 reform enabling the cre- 
ation of a supervisory boar d heade d 
by a president, and a diredotre 
headed by the chief executive, 
would help divide power and 
responsibility' However, only 2 per 


’Highway* to transport of the future 


a The £5 gallon of 
petrol is now firmly 
on the UK political 
agenda, alongside 
electronic road tolls. 
lat t year, the chan- 
cellor, Kenneth 
Clarke, announced 

YLE "' — that petrol duties 

would rise 5 per cent a year in real 
terms for the foreseeable future. In 

tha fhr th m ming Birigat, he is likely 

to go farther in raising taxes on 
motoring, supported by last week’s 
report from the Royal Commission 
on Environmental Pollution. 

The automotive age is drawing to 
an end. choked in its own conges- 
tion and perflation. But what fol- 
lows? 

fiaTia for massive inves tment in 
nan vp rttinrrgT public transport, even 
if privately financed, seem out of 
touch with the seeds of a genera- 
tion that has grown accustomed to 
th e pred ictability and doortodoor 
security of auto travel. 

Equally, visions of a nation of 
“lone eagles", telecommuting from 
their eyries in the countryside or 
suburbs, seem overdone 
The information revolution holds 


the key, but it is about far more 
than telecommuting. Its true poten- 
tial is in allowing much better use 
of existing transport resources. 

Off-peak buses and suburban 
trains usually run well below capac- 
ity, with load factors that would 
make an airline bankrupt. Taxis 
rarely fill all their seats, and oper- 
ate at a zero load factor when ply- 
ing for hire. 

The new technologies can raise 
these utilisation rates dramatically. 
One contribution would be to pro- 
vide up-to-the minute information 
on what is available, and make 
booking empty spaces easier. A 
more exciting contribution would 
be in creating a more flexible 
pricing structure far public trans- 
port. 

A hint of what is to come is given 
by the on-line computer terminals 
used in many taxis in TanHwn and 
other European cities. These allow 
cabbies to choose a preferred job 
from among those offe re d on the 
screen - in most cases, the one 
nearest to them at the time 

However, this offers nothing new 
an pricing. When you buy a taxi 
ride, yon get privacy, door-to-door 


transport and immediate service. 
Not everyone wants all of these ser- 
vices, but they are not available 
separately. The only public trans- 
port alternative is a bus or train - 
and these offer none of the three. 

Information technologies will 
allow these services to be unbun- 
dled. The pensioner can book a cab 
to get (possibly shared) door-to-door 

The Infonnation 
revolution will allow 
much better use of 
existing transport 
resources 

service to the supermarket, at a 
5ma chosen by the tarf company. 
The fare will be far below the price 
charged to a business customer who 
needs to go at a specific time. 

The discount reflects the increase 
in load factors towards 100 per cent, 
achieved by the flexible scheduling 
possible when servicing a mix of 
consumers, some of whom do not 
mind when they travel, and some of 
whom don't mind sharing. The 


result is a taxi service — or elements 
of it - at bus prices. Mini-bus opera- 
tors will join companies in these 
new markets. 

Conventional bus services oan 
also raise load factors by offering 
extra services, such as tailoring 
their routes to demand. The distinc- 
tion between buses and *«Tig will 
become blurred. 

This is a great vision, but it will 
not happen by itself Someone has 
to build communications networks 
to link would-be travellers with the 
vehicle operators. 

It might require the government 
to license just one or two operators 
fin: a period to encourage invest- 
ment in such networks. The ques- 
tion must also be addressed of 
whether to have common owner- 
ship of communications networks 
and of vehicle fleets, or separate 
them, as is planned with the split 
between the owners of the track 
and the trains for British Rail. 

These issues may seem technical 
now, but they could be real politics 
soon. The electorate wfll not accept 
that secure, convenient transport is 
a prerogative cf the rich. The nar- 
row political challenge is to set the 


regulatory framework for a respon- 
sive, information-based transport 
system and put the finance - pub- 
lic, private or mixed - in place . 

But there is a broader challenge. 
Even if the new buses and taxis 
offer a low-cost “product”, poorer 
people may be unable to use it if 
booking by phone requires use of a 
credit card. 

Electronic payment of social secu- 
rity benefits would solve this, since 
claimants would gain (a limited 
amount of) creditworthiness by 
allowing transport operators and 
other firms to debit their future 
benefits electronically. 

Political talk about “on-ramps to 
the information superhighway" fa 
easy. The hard reality fa that the 
infonnation age fa s tati n g to open 
up a series of very difficult Issues, 
all closely intertwined. These will 
be at the core of political debate in 
the next few years. 

Giles Keating 


The author is chief economist at CS 
First Boston 


OBSERVER in Lebanon 


Emerging 

marketplace 

■ Welcome to the world's first 
literal emerging market. Beirut is 
scrabbling to extract itself from the 
nibble of a 17-year war, in which a 
collective marfnewi saw as many as 
200,000 killed. Not yet a tourist 
hot-spot, but it might be one day. 

Wealthy Lebanese and outsiders 
keen on risky bargains are 
hn gtnwftig to find Beirut sexy, if a 
Httie grim. They detect a phoenix 
deep within its ashes. 

Some ashes. Just about the only 
sect® in downtown Beirut -Beirut 
generally, for that matter - not 
liberally splattered by gunfire is the 
small banking enclave. 

It's an odd sight; completely 
undamaged office blocks amid a sea 
of devastation reminiscent of Berlin 
circa 1946. One Beiruti just back 
after lengthy exile offers an 
explanation: “They [the fighters] 
nm-maDy left the banks alone. They 
all realised they needed them. No 
banks - no means of tending their 
aims deals.” 


Woad to success 

■ “Whan my ancestors were 
panting themselves in woad and 
hitting each other with clubs, the 
dawn of rivflisatton was taking 
place here.” 

So said Lord Alexander Hesketh. 


43, at Beirut’s Coral Beach hotel, 
introducing the inaugural flight of 
British Mediterranean Airways 
from London’s Heathrow to the 
Lebanese capital. 

Chairman of BMA, Hesketh took 
with him an assorted bunch (rf 
hadm — Observer tnolndad — and 
friends, checking oat the company's 
• leased Airbus A320 (worth $45m) 
and Beirut* b potentiaL 

Hesketh is shy about BMA's 
shareholders; it's a private 
company. He says 62 per cent is 
British, tiie remainder held by 

haoker c mriivtin g T taTiana and 

Ar gentines. Hesketh , who also sits 
on the board of Babcock - next to 
Lori King, former chairman of 
British Airways - says BMA fa no 
gamble, though he adds: 
“Romanticism has always been a 
weakness of mine.” 

British Airways has just decided 
it too Wfll Start flying 
London-BdruL "They will try to kill 
us. We shall have to resist” 
concludes Hesketh. 


Fortitude 

■ Flying the flag at the reception 
was Maeve Fort, British 
ambassador. She dashed off to a 
dinner for London Stock Exchange 
visitors, in town for a seminar an 

invisibles. Fort smoothly 
sidestepped the question of whether 
the Foreign Office regards Beirut as 
a hardship post 
But the presence (rf a very 



T like my lungs but I love my car* 

obvious bodyguard - burly type, no 
champagne in hand, roving eyes - 

gfpadily mnhrhrinTng three pares 

behind her, suggests it does. “Oh, 
pay no attention to him," Joked 
Fort No need to; three steps behind 
him was yet (Plotter minder. 


Trafficking 

■ With roads originally designed 
for lOOjOOO vehicles, Beirut now has 
at least lm- about one per Beiruti 
- coughing through blitzed streets 
and freshly bulldozed The 
number of traffic lights can be 
counted on two hands. 

“Peace brings its own problems. 


What would we do with traffic 
lights? The troops and police would 
all be out of a job," says a local 
driver. 


Price of peace 

■ And no one wants to see the 
30,000 strong Lebanese army, nor 
Indeed the remaining 30,000 or so 
Syrian troops, idle. Sheikh Naim 
Kassem, a founder of HizboHah, 
which still has an estimated 3,500 
fighters dotted around Lebanon, as 
well as MPs, ominously says: “Ihe 
price of peace will be greater than 
that of war." 

Another Beiruti suggests: “The 
Syrians are stin here to protect 
Hizbollah. who would Otherwise be 
wiped out by the Lebanese army.” 
Meanwhile, Hizhoflah contents 
itself by trading shots with Israel in 
the south. A lasting peace? Don’t 
count any chickens. 


Cool by name 

■ Beirut's only English language 
publication, the weekly magazine 
Monday Morning, is a Bttle tiirgld, 
leavened by the occasional titbit “A 
lively, blue-eyed glance, an 
infectious laugh, aristocratic 
manners - such fa the European 
Union’s head of delegation" 

(actually chorgi d’affaires) “in 
Beirut, Harold Cool" 

Cool, a Belgian, apparently likes 
wearing a cloak in winter, while “in 


summer he carries, quite 
unabashed, a scarlet red fan. T 
acquired the habit when I was 
posted to Africa. It was so hot that I 
took a fancy to it* ” 


Absent friends 

■ No longer in government 
Hesketh still knows how to 
network. His guests included Bruce 
Anderson, the journalist and John 
Major biographer, and Lady Carla 
Powell, wife of Sir Charles Powell, 
former diplomat and trusty aide of 
Baroness Thatcher. Anne Heseltine, 
wife of trade and industry secretary 
Michael, dropped out 
At a welcoming dinner - just 
before the belly -dancing Jiselle 
performed some remarkable 
gyrations - Hesketh praised Sir 
Charles (absent “on a plane to 
Malaysia”) as “possibly the greatest 

sin g le p nhHr. ser vant B ritain frfld fa 

the 1970s and 1980s". Possibly. 


Beirut boot 

■ Beirutis looking for sQver linings 
amid chaos might comfort 
themselves that advertisers have 
yet to invade in strength. Hardly 
any neon, just some erode posters, 
including a ubiquitous one fat 
“Crossfire” footwear. There’s 
nalwinanHMp for you. 

Gary Mead 



16 


FRUEHAUf 

trailers 


Carrying the f; , 
nation's goods ^ umtMjr 


For information call 0362 695353 


FINANCIAL TIMES 

Monday October 31 1994 


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Global Provider of 
Structured Networking Solutions 
Tel: 01753 686884 


Grip on Senate still at risk as Clinton goes on campaign trail 

Poll surge bolsters Democrats 


By Jurek Martin in Washington 


fV 


The good news 
for Democrats 
. * eight days before 
* the US midterm 
elections is that a 
Kf jrj' closely 

^ SfJ watched races 
may be turning 
x, yy “ thelr favour. 

: iV 


% 


US MID-TERM 
ELECTIONS 
Novembers 


The bad news is 
that the trend 
may not be 
enough to stop 
big Republican 
gains, including 
control of the Senate. 

President Bill Clinton, fresh 
from a successful Middle East 
tour, with more good economic 
news to tout and with an 
improvement registered in most 
public opinion polls, hits the 
campaign trail in earnest today. 
He will focus on tight contests 
across the country where his 
presence, previously scorned by 
many Democratic candidates, 
may now make a difference. 

In California yesterday, Sena- 
tor Dianne Feinstein, the Demo- 
cratic incumbent not far ahead of 
Congressman Michael Hufflng- 
ton. was expecting an endorse- 
ment from Mr Richard Riordan, 
the Republican mayor of Los 
Angeles. 


Her hope is that this would 
have a comparable impact to that 
given to Mr Mario Cuomo, the 
Democratic governor of New 
York, after receiving an unqualif- 
ied nod of approval last week 
from Mr Rudolph Giuliani, the 
Republican mayor of New York 
City. 

Mr Cuomo, who also received 
yesterday the less surprising 
endorsement of the New York 
Times, has at least pulled level 
with Mr George Pataki, his 
Republican opponent. 

Ms Feinstein’s lead over Mr 
Huffington had slipped from nine 


and even shorter on accomplish- 
ment". 

In Virginia. Mr Oliver North, 
the Republican candidate run- 
ning Senator Charles Robb about 
even, was battling to overcome 
criticism from Mrs Nancy Rea- 
gan. wife of the former president, 
who accused Mr North of lying to 
and about her husband. He 
refused to respond to her. prefer- 
ring to assault Mr A1 Gore on the 
grounds that the vice-president’s 
denunciation of his ‘'extra-chro- 
mosome" supporters was a slur 
on those with genetic disabilities 
(Mr Gore did apologise, though 


Ballot initiatives bring out the voters — Page 5 


points to three In the latest Los 
Angeles Times survey. But this 
was taken before the Republican 
congressman, who has made 
curbs on illegal immigration a 
centrepiece of his campaign, 
admitted employing a British 
nanny in the US without proper 
immigration papers. 

In Pennsylvania Senator Harris 
Wofford, the Democrat, was 
endorsed by Mrs Teresa Heinz, 
widow of the popular Republican 
senator killed in an aircraft crash 
in 199L She said that his oppo- 
nent, Congressman Rick Santo- 
rum, was “short on public service 


not to Mr North, for an unfortu- 
nate choice of words.) 

But the bad news for Demo- 
crats stems from an analysis of 
all the polls in the 35 Senate 
races due to be decided on 
November 8. The Democrats, 
with a 56 to 44 majority, can 
afford to lose no more than six 
seats to retain control. 

Two seem lost already. In 
Maine, where Senator George 
Mitchell is retiring, Republican 
Congresswoman Olympia Snowe 
holds an apparently insurmount- 
able lead over Congressman Tom 
Andrews. In Ohio, where Senator 


Howard Met2enbaum is also 
retiring, Lt Gov Michael DeWine, 
the Republican, seems sure to 
beat Mr Joel Hyatt, Senator Metz- 
enbaum’s son-in-law. 

Arizona, being vacated by Sen- 
ator Dennis DeConctni, had also 
seemed a lost cause, though one 
poll last week found Congress- 
man Sam Coppersmith, the Dem- 
ocrat, pulling to within five 
points of Congressman John Kyi. 

Ten other Senate contests are 
either leaning Republican or too 
close to call. Of these, the seven 
endangered Democratic seats 
include four defended by incum- 
bents - Ms Feinstein. Mr Robb, 
Mr Wofford and Mr James Sasser 
In Tennessee - and three left 
open by retirement, in Michigan, 
Oklahoma and the second seat in 
Tennessee, formerly held by Mr 
Gore. 

The polls are not always reli- 
able. and, in some cases, not 
Independently conducted. But. 
together with anecdotal reporting 
and analysis in the US press, 
they tend to suggest that virtu- 
ally everything will need to 
break right for the Democrats to 
cling on to the Senate. 

In the event of a 50-50 split, it is 
very possible that Senator Rich- 
ard Shelby from Alabama, a 
Democrat In name but not voting 
record, may switch sides. 


Volvo truckmaking plans 


Continued from Page 1 

its three existing regional truck 
manufacturing operations in 
Europe and North and South 
America. It has also launched a 
feasibility study into establish- 
ing production in India. 

Volvo is leading the European 
truck industry's emergence from 
recession, and its share of the 
west European heavy truck mar- 
ket has jumped to 15.5 per cent 
in the first eight months of 1994 
from 12.1 per cent in the whole 
Of 1993. 

Mr Karl-Erling Trogen, chief 
executive of Volvo Truck, said 
the business was operating at 
the limit of its capacity in 
Europe. 

Production of Volvo-brand 
trucks, mainly in Europe and in 
Brazil - Volvo sells under the 
WtaiteGMC brand in North Amer- 
ica - was running at an annual- 
ised rate of 45,000 a year, a rise 
of more than 60 per cent from 


under 28,000 a year in the depth 
of the recession in mid-1993. 

The group is already investing 
SKr390m in order to raise capac- 
ity to 50.000 by July next year, 
but in early December the Volvo 
board is expected to approve the 
investment of more than SKrlbn 
to raise capacity further to 
between 55,000 and 60,000 trucks 
a year (exduding North Amer- 
ica) by mid- 1996. 

It Is understood that Volvo's 
plan for entry into the European 
light truck market will be com- 
pleted by the end of the year. 

Mr Trogen said Asia was Vol- 
vo's "number one priority" for 
geographic expansion. It had 
launched a feasibility study with 
China National Heavy Truck and 
Shandong Automotive for joint 
ventures for the production of 
both trucks and components in 
Shandong province, south-east of 
Beijing. Volvo was now waiting 
for official approval for the proj- 
ect from Beijing. 


Brittan urged to retain post 


Continued from Page l 

dominated Saturday's talks in 
Luxembourg chaired by Mr Jac- 
ques Santer, the president-desig- 
nate of the Brussels executive 

body. 

Commission members were 
evenly split over whether Sir 
Leon or Mr van den Broek, 
the former Dutch foreign 
minister, should have responsi- 
bility for central and eastern 
Europe. 

Sir Leon won support from Mr 
Neil Kinnock. the former UK 
Labour party leader who is a 


newly-appointed commissioner, 
and Scandinavian commissioners 
who argued that Sir Leon 
was best qualified to prepare 
the next round of EU enlarge- 
ment. 

But neither of the two German 
co mmi ssioners supported Sir 
Leon, apparently because of the 
Bonn government's desire to 
improve relations with the 
Netherlands after Chancellor Hel- 
mut Kohl blocked Mr Ruud Lub- 
bers. the outgoing Dutch prime 
minister, in his bid for Commis- 
sion president earlier this 
year. 


‘Black market’ 
fear over football 
tournament tickets 


By Jacqueline Shorey in London 

The ticket system for the 1996 
European football championship, 
to be hosted by England, which 
requires fans to buy tickets they 
do not want, was condemned yes- 
terday as unfair and likely to 
encourage a black market 

British Football Association 
rules mean that a fan who wants 
one £60 (S97) ticket for the final 
to be staged in London will have 
to spend at least £280 on a total 
of 11 tickets. 

For every final ticket wanted, 
supporters most buy two for the 
semifinals, two for the quarter 
finals and two each for three 
group games - even if they only 
want one ticket for each. 

Mr Chris Smith, heritage 
spokesman for the opposition 
Labour party, said: “The aim of 
ensuring that the real fans get 
the best chance for tickets is a 
sensible one, but the Football 
Association appears to have 
devised a system which, perhaps 
inadvertently, will not end up 
with thin aim f ulfilled 

“Furthermore, it will facilitate 
the starting up of an illegal 
black market. 1 hope the FA will 
think again about making people 
buy more tickets than they 
need.” 

The system has been criticised 
by supporters, who say that the 
unwanted extra tickets will 
deprive other fans of the chance 


to see games and encourage sup- 
porters to become ticket touts. 
“Without question, this system 
will create a black market," said 
Mr Steve Beauchamps, interna- 
tional officer of the Football Sup- 
porters' Association. 

Mr Mike Parry of the FA said 
he could not rule out the “very 
slight risk" of fans becoming 
ticket touts, but hoped that love 
of the game would compel hold- 
ers of spare tickets to pass them 
on to true fans. 

Fans from other countries in 
the competition will not be able 
to buy tickets until December 
1995. when the draw is held. Each 
country's football association will 
then be given 20 per cent of the 
tickets for their games. Their 
fans will know what matches 
they are buying tickets for. All 

the En glish fans nan do, however, 
is book a seat now at a ground. 

Mr Parry denied that tickets 
bad gone on sale too soon. The 
competition will be twice the size 
of the Swedish championship in 
1992 when tickets went on sale 10 
months in advance. “This compe- 
tition is twice as big and needs 
twice the time", he said. 

Total ticket sales of 1.3m 
should generate about £60m. Mr 
Parry said the money would go 
into a trust fund. After expenses, 
profits would be split between 
the FA and UEFA the European 
body, and put back into the 
game. 


FT WEATHER GUIDE 


Europe today 


Widespread rain and fresh south- westerly winds 
from southern Scandinavia to north-western 
France will cause a divide between autumnal 
conditions in the north-west and mainly sunny 
and unseasonably warm conditions over most 
of central and south-eastern Europe. The frontal 
ram will eventually drench north-western Spain. 
From central Russia to the Baltics, it will be 
mainly overcast with rain spreading into a 
region previously occupied by high pressure. 
Fresh south-westerly breezes along with 
intermittent showers are likely in central areas 
of the UK, however continuous rain is expected 
in Scotland and south-east England. Moderate 
daytime freezing conditions will continue in 
Lapland. The warmest area will be the eastern 
Mediterranean with temperatures between 20C 
and 25C. 

Five-day forecast 

Tomorrow, widespread rain will move across 
Scandinavia and into northern Russia. Lighter 
but still significant amounts of rain are expected 
from the Benelux to western Spain. A build- up 
of high pressure over central Europe will cause 
extensive fog during the week, but a new low 
pressure system from the Atlantic will dissipate 
it. increasing southerly winds will be followed 
by rain and then gradual cooling. 

TODAY'S TEMPERATURES 


Abu Dhabi 

Accra 

Alters 

Amsterdam 

Athena 

Atlanta 

6 Aires 

Btiam 

Bangkok 

Barcelona 



Situation at 72 GMT. Temperatures maximum for day. Forecasts by Meteo Consult of the Netherlands 


Maximum 

B*i*ig 

SU1 

15 

Caracas 

sira 

31 

Faro 

sun 

C61SIU3 

Bellas 

shower 

12 

Cardin 

ran 

14 

Frankfurt 

far 

sun 

33 

Belgrade 

fair 

20 

Casablanca 

sira 

22 

Geneva 

sun 

lair 

27 

Berlin 

Shower 

16 

Chicago 

doudy 

10 

Gibraltar 

sun 

tar 

26 

Bermuda 

but 

26 

Cologne 

doudy 

17 

Glasgow 

rain 

rain 

16 

Bogota 

shower 

22 

Dakar 

lair 

23 

Hamburg 

rain 

aun 

23 

Bombay 

far 

33 

Dallas 

lair 

23 

Helsinki 

shower 

cloudy 

22 

Brussels 

rain 

16 

Delhi 

aun 

2B 

Hong Kong 

sun 

lair 

17 

Budapest 

far 

18 

Dubai 

sun 

34 

Honolulu 

lair 

shower 

14 

C.hagen 

ram 

13 

Dublin 

shower 

13 

Istanbul 

sun 

lair 

33 

Caro 

far 

27 

Dubrovnik 

sun 

23 

Jakana 

thund 

sun 

21 

Cape Town 

sun 

26 

Edinburgh 

ran 

13 

Jersey 

rain 


Our service starts long before take-off. 


Lufthansa 


Karachi 
Kuwait 
L Angelas 
Las Palmas 
Lima 
Lisbon 
London 
Lux.bourg 
Lyon 
Madeira 


sun 

fair 

sun 

cloudy 

fair 

Cloudy 

rain 

cloudy 

sun 

far 


21 Madrid 
18 Majorca 
16 Malta 

21 Manchester 
13 Mania 

i* Melbourne 
a Mextco City 

29 Miami 

30 Milan 

20 Montreal 

31 Moscow 
IS Munich 
35 Nairobi 
34 Naples 
24 Nassau 
24 New York 

22 Nice 

15 Nicosia 

16 Oslo 
15 Paris 

21 Penh 

23 Prague 


sun 

sun 

sun 

shower 

cloudy 

shower 

fair 

fair 

sun 

cloudy 

shower 

fair 

shower 

sun 

Ur 

fair 

sun 

sun 

rain 

ItUr 

fai 

Cloudy 


IB Rangoon 
23 Reykjavik 

23 Rio 

14 Rome 
31 S. Fkko 

u Seoul 

24 Singapore 
26 Stockholm 
16 Strasbourg 

9 Sytfeiey 
6 Tangier 

21 Tel Aviv 
26 Tokyo 

22 Toronto 
30 Vancouver 

15 Venice 
20 Vienna 
24 Warsaw 

3 Washington 
18 Woffington 
22 Winnipeg 
18 Zurich 


thund 
sleet 
cloudy 
sun 
sun 
fair 
shower 
rain 
far 

cloudy 
fair 
sun 28 
shower 20 
doudy 
rain 
sun 
sun 
shower 
fair 
doudy 
fair 
sun 


33 

0 

23 

22 

20 

14 

33 

8 

20 

25 

22 


10 

10 

16 

20 

IS 

15 

IS 

3 

18 


THE LEX COLUMN 

Funding power 


Pakistan's $1.6bn Hub River power 
project, whose finanrmg was finally 
completed over the weekend, is being 
promoted as a blueprint fbr first world 
investors eager to satisfy the develop- 
ing woiid's appetite for infrastructure 
funding. Industrial companies like 
National Power, which has a 26 per 
cent stake in the project are increas- 
ingly keen to provide some of the 
finance themselves. But there are com- 
peting views about how best it should 
be channelled. 

One route is that being taken by 
Welsh Water. It is looking to raise 
around SlOOm from half a dozen indus- 
trial partners and a further $400m 
from institutions. The fund would pro- 
vide equity fbr projects identified by 
the industrial partners. They would 
get a return on their investment as 
well as an outlet for their products 
and services. Though attractive fbr the 
partners, such a structure raises the 
possibility of conflicts of interest. 
Institutional backers need to be satis- 
fied their investment will not be used 
to subsidise industrial partners' sales. 
US General Electric's efforts to raise 
SL5bn for a Fund to invest in third 
world power projects are thought to 
have been hampered by such con- 
cerns. 

On the other hand, companies like 
GE can deliver the flow of deals the 
fund needs. Tiger Management, the US 
hedge fund, recently failed to raise 
Slbn for infrastructure investment 
because of its perceived lack of experi- 
ence in Asia. Other institutional funds 
are complaining about a lack of suit- 
able projects. But this may say more 
about their expertise than the invest- 
ment opportunities. 

Secondary offerings 

The UK's National Audit Office 
thinks the government's controversial 
sale of its third tranche of BT shares 
last year was a success. Techniques 
devised by merchant bank S.G. War- 
burg were effective in discouraging 
investors from dumping existing stock 
in the run-up to the issue and so 
helped maximise the sale's proceeds. 
The main tactic was to threaten to 
refuse new shares to those who sold 
stock aggressively in the offer period. 

A pat on the back from a happy 
client will certainly do Warburg no 
harm as it seeks privatisation work 
across the world. What is difficult to 
understand is why investors inter- 
viewed for last week's NAO report 
also thought BT3 a success. At the 
time, many complained at the strong- 


er 

Share price relative to the 
FT-SE-A All-Share Index 
105 



1993 
Soiree: FT Graphite 

arm tactics used by the Treasury. 
They can hardly be pleased with the 
shares’ 14 per cent underperformance 
since the issue. 

The controversy ignited by BT3 is 
still live. The government is expected 
to deploy similar tactics when it sells 
its remaining stakes In National 
Power and PowerGen next year. Mean- 
while. the Stock Exchange is trying to 
decide whether regulations on short 
selling should be tightened. One idea 
is that issuers should be allowed to 
insist on cash settlement for trades in 
the run-up to an issue to make it 
easier to spot investors who dump 
shares. Hie Treasury unsuccessfully 
lobbied for such a system during BT3. 
The evidence from the NAO report is 
that issuers are quite capable of 
looking after themselves without fur- 
ther help from the exchange. If any- 
thing, the playing field is already 
tilted too far in their favour. 

Noyaux durs 

The forthcoming Renault share sale 
has brought France's system of noy- 
aux durs - or stable shareholders - 
into sharp relief once again. Rh6ne- 
Poulenc has become the first indus- 
trial partner to apply for shares in the 
automotive company. There is pre- 
cious little industrial logic in such a 
stake, much as the chemical group 
argues there will be synergies develop- 
ing fuel additives for diesel engines. 
The financial logic is similarly thread- 
bare. Heavily indebted Rhdne-Poulenc 
will have to divert capital from its 
core businesses. It will also have to 
pay a premium for an interest that 
cannot be sold on the open market for 
at least 18 months. The only 
logic would seem to be political: 
the government wants Rhdne-Poulenc 
as a shareholder, so it would be 


unwise to disappoint it. Noyaux durs 
con tain dangers not merely for those 
companies that acquire stakes but also 
for ordinary investors. The risk is that 
a system or interlocking shareholdings 
could allow French industry to huddle 
together and ignore market disci- 
plines. 

The main argument for noyaux durs 
is that they help smooth a company’s 
transition from public to private sec- 
tor. In particular, they stop a uewly- 
privatised group becoming victim of a 
hostile takeover - something which 
could cause a political uproar. Such an 
argument would be fine if noyaux durs 
expired after a fixed period, as is the 
case with the golden shares used in 
the UK for similar reasons. The snag 
is that, if the system allows manage- 
ment a comfortable life, noyaux durs 
could easily become a long-term habit. 

US airlines 

The US airline industry no longer 
looks cyclical. Four years after the 
economic recovery began, the sector 
should be enjoying a boom. But last 
week's batch of third-quarter results 
was nothing to boast about - despite 
the fact that the quarter is tradition- 
ally the year’s best and fuel costs 
remain low. Continental Airlines' net 
margins were just 2 per cent, while 
USAir was in the red. Even AMR. the 
strongest of the large carriers, 
achieved margins of only 5 per cent. 

The industry's big problem is the 
ease with which low-cost, low-fare air- 
lines can enter the market offering 
no-frills services. Aircraft leases are 
cheap, trained pilots are available and 
few US airports have slot shortages. 
The low-cost groups control roughly a 
third of all capacity in the US. Their 
heavy price discounting has reduced 
yields - average revenue per passen- 
ger - throughout the industry'. 

Some airlines, such as United and 
Continental, have responded by 
launching their own low-cost subsid- 
iaries. The jury is still out whether 
they can create the right culture. Con- 
tinental’s failed to break even after a 
year, prompting the chief executive's 
resignation last week. Others such as 
American and Delta are concentrating 
on cutting costs. The problem is that 
such attempts at self-help will not 
return the industry to good health so 
long as aircraft manufacturers con- 
tinue to subsidise financing and Chap- 
ter 11 protects airlines from bank- 
ruptcy. Until then, most airlines will 
be hard-pressed to earn decent returns 
on capital. 



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FINANCIAL TIMES 


COMPANIES & MARKETS 


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Your Swedish Telecom P a rtner 

UK Teh 071 416 0308. UK Fax: 071 438 0305. 


^1 THE FINANCIAL TIMES LIMITED 1994 


Monday October 31 1994 




MARKETS 


THIS WEEK 


JOHN PLENDER: 

GLOBAL INVESTOR 
The average central banker has 
been programmed to warn about 
the threat of Inflation regardless of 
economic circumstance. Something 
Is dearly up, then, when a 
well-known anti-inflationary hawk 
Uke Mr Eddie George, governor of 
the Bank of England, argues that the markets are 
too pessimistic about the inflationary prospect 
Page 21 


STEPHANIE FLANDERS; 

ECONOMICS NOTEBOOK 
Economists have usually assumed 
sleaze or corruption was an 
economic "bad", and left the more 
detailed theories to their colleagues 
in the political science department 
Yet analysis of economies with very 
different styles of political 
crookedness has made them think again. Page 21 

BOJsTOS: 

The decision by Moody's, the credit rating agency, 
to place Sweden’s Aa2 foreign currency debt rating 
on review for a possible downgrading is likely to 
weigh heavily on the bond market when It opens 
today. Page 22 

EQUITIES: 

The Dow Jones Industrial Average jumped more 
than 55 points, to close the week at 3,930.66, after 
a stream of strong earnings. As of last week, 20 
per cent of companies had reported profits 10 per 
cant or more above the consensus, in London, 
volatility in share prices is related directly to the 
dismal volume of business in the equity market 
Page 25 

EMERGING MARKETS: 

Hopes are running high that the various exchanges 
in Africa are about to embark on an unprecedented 
growth path. Page 24 

CURRENCIES: 

Foreign exchanges will be focusing on the US and 
UK central banks this week, with the possibility that 
interest rates may rise in both countries. Page 24 

COMMODITIES: 

The London Meted Exchange today moves to new 
premises, which will double its space, allowing for 
expanded -technological facilities to cope with rising 
trading volumes. Page 21 

INTERNATIONAL COMPANIES: 

Hungary is considering a quick sale of stale shares 
in Matav, the national telecommunications . 
company, that would dwarf all previous 
International equity offerings to come out of eastern 
Europe. Page 19 

UK COMPANIES: 

Caparo Group, the private UK steel and engineering 
concern, has bougt most of the assets of Sharon 
Speciality Steel of the US for $26m cash. Page 28 


STATISTICS 


Base lending rates 27 

Company me e t ing s 20 

Dividend payments — .....20 

FT-A World indew 21 

FT GOde to currencies _.. 24 
Foreign exchanges 27 


London recent Issues 27 

London share service . 30-31 
Managed funds 9ervtce28-2S 

Money markets 27 

New W bond Issues 22 

New York shares 32-33 

World stock mkt indices.. -26 


Banks vie for Deutsche Telekom sale 


By Andrew Fisher in Frankfurt 

The German government will announce in 
the next few days which hanks are to play 
the leading roles in the privatisation of 
Deutsche Telekom, with Goldman Sachs, 
the US investment hank, the most likely 
Candidate to baurtte the witoynatjnrml plac- 
ing. 

Deutsche Bank, Germany's biggest 
b ank, and Dresdner Bank are expected 
jointly to head the overall issue, set for 
early 1996. under which a minority of the 
shares in the German telecommunications 
concern will be sold to raise at least 


DMlObn (86.7bn>. Out of more titan 20 
banks vying for the lead foreign role, Gold- 
man Sachs has emerged as the favourite to 
become global co-ordinator. 

As with the recent DMlbn partial priva- 
tisation of L ufthans a, the Goman airline, 
the bookbuilding method of selecting 
long-term quality Investors from those 
keener on short-term gains will be used. 
The Lufthansa issue, led by Dresdner 
Bank, was heavily subscribed. 

For the much larger Deutsche Telekom 
Issue - the state-owned telephone monopo- 
ly's total value is put at some DM60bn - 
separate regional consortiums are also 


planned to accommodate US, European 
and possibly Japanese investors. 

The choice of Goldman Sachs to head 
the international placing would irritate 
some non-German European banks which 
feel one of them should have this role, as 
Deutsche Telekom is a European concern. 

UK merchant banks with experience of 
international flotations have taken part in 
presentations, or “beauty contests", in 
Bonn. They Include S.G. Warburg, Bar- 
clays de Zoete Wedd. Kleinwort Benson, 
National Westminster Bank, NJd. Roths- 
child and Robert Fleming. 

The other US banks which put submis- 


sions to the postal and fjnamy minis tries 
in Bonn - the official announcement will 
come horn the former - include Morgan 
Stanley, Merrill Lynch, Lehman Brothers 
and Salomon Brothers. Leading Swiss and 
French banks have also been involved. 

Because of tough global competition in 
investment banking, Deutsche Bank said 
on Friday it was putting its non-Gorman 
investment banking activities in London. 
It will combine them with those of Morgan 
Grenfell, its UK merchant bank. Interna- 
tional privatisations are among the areas 
in which the German bank wants to build 
up its strength. 


Peter Montagnon and Farhan Bokhari report on a pioneering project-finance deal in Pakistan 


Public and private meet at the Hub 


A fter six gruelling years of 
preparation, it is finally 
done. The completion 
this weekend of a $30m share 
issue in Karachi effectively 
means the last piece of financing 
has fallen into place for Pakis- 
tan's SLSbn Hub power project 
which will add 13 per cent to the 
country’s generating capacity by 
1997. 

The project, in which Britain's 
National Power invested $100ro 
for a 26 per cent equity stake, 
will almost certainly go down as 
a landmark in the private sector 
financing of infrastructure devel- 
opment in the third world. 

Negotiated through eight 
changes of government in Pakis- 
tan, it required legal documenta- 
tion weighing 28kg a set So large 
was the cast involved that at one 
stage new participants found it 
virtually impossible to find a law- 
yer in London who was sot con- 
strained by conflict of interest 
Out of all this has come what 
National Power describes as a 

“trail -h inging ’ 1 deal for financing 
private sector infrastructure pro- 
jects that pioneers the use of 
World Bank resources. Tradition- 
ally it lends only to governments. 

According to Mr Patrick Craw- 
ford of Morgan Grenfell, which 
advised on the deal, it. has also 
Involved the first' successful 
international equity offer for a 
power station which had yet to 
be built 

Last but not least the spon- 
sors, including National Power 
and Xenel, a Saudi company 
which originally conceived the 
project, have had to reconcile 
awkward clashes between west- 
ern hanking and Islamic law 
which bars interest-bearing 
transactions. 

The deal was bora out of the 
need to increase electricity sup- 
ply in a country whose develop- 
ment has been impeded by 
chronic shortages of power but 
whose government lacks the 



PAKISTAN 


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Karachi 


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funds to develop new generating 
capacity. It provides for a consor- 
tium led by Mitsui and Ishikawa- 
pma-Baiima Heavy Industries to 
build an oil-powered thermal 
power station with a gross capac- 
ity of 1.292MW. It will be oper- 
ated by National Power. 

Assembling the finance at a 
tiim* when hanks were unwilling 
to lend large amounts to develop- 
ing countries was an awesome 
task. Essentially the structure 
involves a complex allocation of 
risk that prevents equity inves- 
tors and lending banks having to 
shoulder too much of the burden. 

Of the $1.78bn raised for the 
project, including 8220m in 
standby credit, only $i75m has 
been raised from international 
and local equity investors and 
8686m from international banks. 

Thanks to guarantees provided 
by the World Bank, as well as 
France, Italy and Japan, the 
banks were spared the need to 
take on the political risk of 
default stemming from actions by 
the government They have only 
taken on the commercial risk of 
the project itself. Despite its com- 
plexity, the 12-year credit proved 
popular and was more than twice 


National Power takes another step 

The Hub project marks an important step in National Power's 
ambitions to invest £lbn (Sl.6bn) outside the UK by the end of the 
decade to compensate for loss of domestic market share to indepen- 
dent generators, writes David LasceUes. The privatised power genera- 
tion company, the UK’s largest, now has about 5 per cent of its 
generating capacity outside the UK, according to Mr Graham Hadley, 
managing director for international business development, and with 
Hub its overseas investment will amount to £250m. “That's starting 
to give ns a track record", be said. 

National Power's other investments include American Nat- 
ional Power in Houston, the Pegu coal-fired power station in Portu- 
gal, and a small share In a Spanish clean-coal technology plant 
Projects in the pipeline include power stations in India and China. 
Mr Hadley saw prospects in the Netherlands, Spain, Portugal, Poland 
and the Czech Republic. The company is also looking at Morocco, 
Turkey, Thailand, Indonesia, the Philippines and Vietnam. 


subscribed, according to Citibank 
which led the syndication. A fur- 
ther buffer was provided through 
a 8582m subordinated loan from 
World Bank's private sector 
energy development fund. Money 
from this fund is tent first to the 
government of Pakistan and then 
passed on to the project in a 
back-to-back transaction to get 
round the constraint on private 
sector lending by the bank. 

T hat also helped reduce the 
need for outside equity. 
The international offer 
was about two times subscribed 
and traded at the end of last 
week at a premium of more than 
10 per cent above its issue price, 
according to Mr Ric Haller of 
Morgan Grenfell which handled 
the sale. 

Two years ago, he says, it 
would have been difficult to place 
the equity because of the trou- 
bled economic and political situa- 
tion in Pakistan and because the 
fashion for emerging market 
Issues had not developed. As it is, 
tile company was able to offer 
the shares on a projected net real 
earnings yield of 17-3 per cent in 
dollar terms, thanks to the intri- 


cate web of operating arrange- 
ments struck by the project spon- 
sors with suppliers and custom- 
ers. “We had to make sure that 
National Power was going to be 
able to manage the plant within 
the parameters that were pre- 
dicted and that the government 
of Pakistan, no matter what its 
hue, would live up to its com- 
mitments,” he said. 

“Where we are sitting today, 
we are sitting on a success 
story,’’ says Mr Daniel Woodraffe, 
the project's chief executive. 
Bankers say it nearly foundered 
after Pakistan’s Islamic sharia 
court rated in 19% that all inter- 
est-bearing transactions must 
stop. That called in question the 
participation of local banks who 
were due to contribute a rupee 
loan for the equivalent of 8100m. 

The then government of Mr 
Nawaz Sharif appealed against 
the judgment to the supreme 
court hut,- although tire appeal 
has not been heard, investors 
have been given assurances that 
foreign private investors will not 
be affected by any change in the 
law. 

Bankers say the willingness of 
National Power to invest as 


much as 8100m helped boost con- 
fidence. “When we started, we 
did not have a remit to invest 
overseas," says Mr Graham Had- 
ley, National Power executive 
director. “We looked at Hub as 
we started to move more over- 
seas and decided that this was a 
project where the investment 
would prove attractive." 

Perhaps the most daunting 
task of all was to assemble the 
various inter-dependent agree- 
ments in such a way that they 
would become operative at once. 
“The debt was conditional on the 
equity and the equity was condi- 
tional on the debt, and every- 
thing was conditional on the 
World Bank and the sponsors. 
Someone had to blink first,” says 
Mr Haller. 

What unlocked the bank loan 
in the end was Morgan Grenfell's 
decision, together with its parent 
Deutsche Bank, to underwrite 
the international equity issue 
instead of using the more conven- 
tional book-building approach. 

Nonetheless the project 
remains a bold one. Up to 33 per 
cent of the power generated by 
Karachi Electricity Supply Corpo- 
ration is lost in transmission line 
failures and power thefts, and 
many consumers have not paid 
their bills for years. 

Since coming to office last 
year, the government of Mrs Ben- 
azir Bhutto has promised to press 
ahead with new laws to punish 
offenders and improve the qual- 
ity of transmission facilities. 

Investors in Hub will now wait 
to see whether the risk pays off. 
But, unlike Eurotunnel, that cele- 
brated first-world project, Hub is 
running on schedule and within 
budget. There is every chance 
that Mr Hadley will be proved 
right when he says “the essence 
of what has been done here is 
eminently transferable. We will 
get this kind of package being 
put together again in Pakistan 
and other countries as well" 


UBS seeks 
employee 
support in 
strategy 
battle 

By lan Rodger in Zurich 

Union Bank of Switzerland is 
again urging its 22,000 Swiss 
employees to vote their shares in 
support of the directors in their 
proxy fight with Zurich broker- 
fund manager Mr Martin Ebner 
over the bank's strategy. 

At the moment the battle cen- 
tres on the proposal by the UBS 
board to convert the tank's reg- 
istered shares into bearer shares, 
drastically reducing their voting 
power. It has called an extraordi- 
nary general meeting for Novem- 
ber 22 to vote on the proposal. 

In a second letter to employees 
on the issue, Mr Nikolaus Senn, 
chairman, and Mr Robert Studer, 
chief executive, have pleaded 
with employees to give the direc- 
tors an unconditional general 
proxy for voting their shares. 

“Unfortunately, a large num- 
ber of employees have not sent 
in a proxy form for general meet- 
ings," the letter says. “In our 
view, this should be made ont 
unconditionally, not only for the 
approaching general meeting, 
hot also for the future.” 

Mr Kurt Schiltknecht. presi- 
dent of BK Vision, the Ebner 
controlled investment fond that 
is UBS’s largest shareholder, 
said he regretted the letter. “In a 
good bank, the staff should be 
left to make their own decision." 

UBS denied there was any 
pressure. “Naturally, the bank 
wants to convince its personnel" 
it said, and pointed out that an 
independent proxy holder had 
been engaged for shareholders 
who wanted their vote to be pri- 
vate. 

The registered shares now 
have a par value only one-fifth of 
that of the bearer shares, but 
equal voting weight UBS says 
BE Vision, which has an 18 per 
cent holding in them, seeks 
excessive influence over the 
bank on the cheap. 

BK Vision is trying to rally a 
majority of votes in favour of 
substantial changes in the UBS 
board at next April's annual 
meeting when the terms of 10 of 
the 23 directors expire. 

UBS employees, who can buy 
registered shares on very favour- 
able terms, now hold about 12 
per cent of them, carrying 6.1 
per cent of all votes. 

The registered shares have lost 
more than half of the effective 40 
per cent premium they carried 
over the bearer shares since UBS 
revealed its proposal, causing 
dismay among holders. 


This weeks Company news 




EURO DISNEY 

More red ink as 
Mickey waits for 
its Discovery 

Euro Disney, the France-based theme 
park, is expected to report continuing 
heavy losses when it publishes its 
results for the year to September 30 on 
Thursday. Some analysts have 
predicted losses of more than FFrl.Bbn 
- (8312m), down from losses of FFr5. 3bn 
last year as the park continues to cope 
with its start-up costs. 

* The results will be the first since the 
park arranged a wide-ranging FFrl3bn 
restructuring with its banks in June 
which was 80 per cent subscribed. 

Mr Philippe Bourgignon, chairman, 
believes the results this year must be 
put in the perspective of the 
.restructuring and will give little idea of 
its future likelihood of success. 

He recently stressed that the park 
was still on target to break even by the 
end of the 1996 financial year, and that 
creditor tanks were content with its 
performance so far. 

Analysts and shareholders, however, 
will be closely examining many aspects 
of tire results, and above all the 
attendance figures, which showed a 
downward fo^Kne in visitors to ®n last 
year from 9.8m the year before. 

Euro Disney recently rejected 
reports driven by market speculation in 
the past few months that there had 
been a drop in attendance to fewer than 
9m. „ 

Other important aspects analysts will 
scrutinise include changes to the levels 
of expenditure by visitors to the park, 
and the impact of a large number of 
phnwgpc to the tariffs levied for hotels 
and restaurants. 

The company is pinning its hopes on 
app roaches including changes in 
management, a new marketing strategy 
and the ope ning next year of Discovery 
Mountain, its latest attraction. 

Euro Disney's results come after Park 
Asterix, a smaller Paris- based theme 
park, reported that it had made profits 
for the first time this year, after 
opening in 1989. 


Boots 

Share prica relative to the 
FT-SE-A General RetaBere Index 

100 1 



1993 
Source: FTGnsptwe 

BOOTS 

Drugs arm’s future 
holds the spotlight 

Speculation over the future of Boots’ 
pharmaceuticals division is expected to 
overshadow sharply improved interim 
figure from the UK retailing and drags 
group on Thursday. A lthoug h the 
company is expected to highlight an 
increase of about 33 per cent in 
first-half profits, analysts are likely to 
focus on the outcome of the year-long 
review of the drugs business. The 
review was prompted by last year’s 
withdrawal of the heart drug Manoplax, 
which left a gap in products under 
development. Boots officials Insist they 
are under no pressure to sell the __ 
business, which rema i n s both profitable 
and reoh generative. Options include 
dis posal, merger or a joint venture. 

Names touted as buyers include 
Zeneca, Britain’s tMrd-largest drug 

group, and Medeva. another UK drugs 
company. Their interest is understood 

to have waned in recent months, only 
to be replaced by speculation on 
possible bids from Knoll the BASF 
subsidiary, and Manarini of Italy. 

Interim pre-tax profits are forecast to 
have risen from £i74.6m to about £233m 
(8380m). Last year's figures were 

depressed by a £35m charge to cover the 

Manoplax withdrawal and a £5 Jm 
write-off on Asfione, an antacid 
product The chemists’ chain, however, 
Is expected to remain the most 
profitable division. Analysts expect an 
increased interim dividend of about 
5.5p, against 4JJp last time. 


OTHER COMPANIES 

Philips expected to 
double net profit 

Philips: The Dutch electronics group 
will report third-quarter results on 
Thursday which are expected to 
confirm its return to financial health. 
Most sectors except communications 
systems are likely to have performed 
welL Forecasts call for a doubling of net 
profit from the FI 133m (577m) reported 
in the samp period of 1993. 

■ Nissan Motor: The Japanese 
carmaker will announce half-year 
results on Friday. Although the 
mmpany is spring firm sales in the US 
market with a 3.7.2 per cent rise In unit 
sales in August, earnings have been hit 
by the poor performance in the 
domestic market Its domestic 
registrations fell 3 per cent in July in. 
spite of a 12 per cent rise in the overall 
market and industry analysts expect 
Nissan’s market share to fall further 
because of the lack of new models. The 
company forecasts unconsolidated 
half-year sales to tell 3 per cent to 
YLSSObn (SlSbn), and expects to post 

recurring losses of Y60bn. 

■ DSM and Akzo Nobel: The Dutch 
chemicals groups are expected to 
benefit from the cyclical upswing that 
is boosting the worldwide chemicals 
industry when they publish 
third-quarter results tomorrow and on 
Wednesday, respectively. DSM, which 
recorded a loss in the 1993 third, 
quarter, is expected to bounce back 
with a net profit before extraordinary 


Philips Electronics 

Share price (Guilders) 

60 



1962 
Source: FT Graptitt* 

items of between F3 100m and FI 130m. 
Akzo Nobel's net profit before 
extraonlinaries Is forecast to rise to as 
much as FI 370m from FI 239m. 

■ Skandinaviska Enskflda Banketu 
Sweden's leading commercial bank is 
expected to put the country's tanking 
crisis Anther behind it when it reports 
nine-month figures an Wednesday. The 
recovery has been driven by a sharp tell 
in loan losses, helping SE-Banken to 
compensate for sluggish lending and 
difficult band market conditions. 

■ Den norske Bank: Norway’s biggest 
commercial bank wil] report 
nine-month figures tomorrow followed 
on Wednesday by Christiania Bank and 
an Friday by Uni Storebrand, the 
country's largest insurer. Results are 
expectedto reflect continued 
improvement of the economy but could 
be hit by bond losses. Also due 
tomorrow is Ha&limd Nycomed, the 
pharmaceuticals group. 


Companies In this issue 


Aipentaria 

19 

East Astatic Company 

19 

Matav 

19 

Caparo Group 

18 

Fyffes 

18 

Menvier-SwaJn 

18 

CnacRto itritano 

19 

GS-Autogrfl 

19 

National Power 

17 





North Broken H8 

19 

Gradto Romagnoto 

19 

Goldman Sadis 

17 

Scantroric Hotamgs 

18 

Daks Simpson 

18 

Grand Metropolitan 

18 

Sflvermfews 

18 

Deutsche Telekom 

17 

Gresham House 

18 

UBS 

17 

EaseJte 

19 

JVC 

19 

Yard 

19 


Recommended offer for 



UAPT - Infolink pic 


Equifax Inc. 


Consideration £5 1 million 



UAPT - Infolink pic advised by 

Price Waterhouse (D 



Corporate Finance 


Price Waterhouse. No. 1 London Bridge, London SEI 9QL 
AMhorltfil In the Inauutf of Chanrrrd Antnaikmis in Waltt w m un rameni buunrtL 








* 


FINANCIAL TIMES MONDAY OCTOBER 31 1994 


COMPANIES AND FINANCE 


’< ill 


Caparo secures 
Sharon assets 
in $ 26 m deal 


Fyffes buys 
I£5m stake 
in Jamaican 
venture 


Foreign investment jumped to $32.5bn in the first nine months, says KPMG 

European groups ‘on US buying spree’ 


By Nicholas Denton 


By David Blackwell 


By Andrew Baxter 


Caparo Group, the private UK 
steel and engineering concern, 
has clinched its bid to 
become a big player in the 
US steel market by buying 
most of the assets of Sharon 
Speciality Steel for $26m 
(£l6.4m) cash. 

A US court has finally 
approved the offer for Sharon, 
which has been in Chapter 11 
of the US Bankruptcy Code 
since November 1991 

The UK group, founded and 
chaired by Dr Swraj Paul, the 
Anglo-Indian businessman, has 
paid a $3.5m deposit and 
expects to complete the deal on 
November 15. 

The purchase will end a long 
battle by Dr Paul to buy Sha- 
ron, based in the steel town of 
Sharon. Pennsylvania. 

In late July Caparo signed a 
letter of intent to buy 
Sharon, but slipped out of the 
r unning this autumn when a 
rival $35m bid emerged When 
this fell through, however, 
Caparo was left with the field 
clear. 

Caparo already has some 
steel products businesses in 
the US. notably Bull Moose 
Tube, acquired in 1988. The 
Sharon acquisition, however, 


will give Caparo its first steel- 
making facilities anywhere In 
the world 

Dr Paul estimates that Cap- 
aro will become a Slbn com- 
pany by 1986, with S400m com- 
ing from Sharon. Last year. 
Caparo bad world-wide group 
sales of £360m . 

Sharon, which has had a che- 
quered past and formerly 
employed 2,000 people, is not 
currently producing steel Dr 
Paid says he hopes to restart 
production by April, with 
about 500 workers. 

“I am delighted and relieved 
that we have finally bought 
Sharon." said Dr Paul who has 
negotiated an agreement with 
the United Steelworkers of 
America on representation at 
the plant 

Apart from the purchase 
price. Caparo will spend an ini- 
tial S20m to restart production 
at Sharon. The plant will pro- 
duce about 1.25m tons of steel 
a year, with 900,000 tons com- 
ing from its electric arc fur- 
naces and the rest, initially, 
from bought-in slabs. 

Electric arc furnace capacity 
will subsequently be increased 
Caparo is not buying Sharon’s 
blast furnace - Dr Paul says he 
does not want to inherit any 
environmental problems. 


GrandMet plans 
more expansion 


Daks Simpson 
rises to £1.95m 


Grand Metropolitan, the food 
and drinks group, plans a fur- 
ther expansion in central 
Europe of International Dis- 
tillers & Vintners, its world- 
wide drinks business. 

IDV Slovakia has been estab- 
lished to control the importa- 
tion and distribution of all 
IDV brands sold in Slovakia, 
which together with the 
Czech Repnblic forms a 
significant market for the 
Malibu brand. 


Daks Simpson Group, the 
clothing maker acquired by 
Sankyo Seiko in 1991, reported 
improved pre-tax profits of 
£l.95m on turnover of £36.1m 
for the six months to Jaly 31. 

Profits last time amounted to 
£l-21m on sales of £30-3m. 

Earnings per share rose from 
952p to 14.59p. 

The production capacity of 
the two Scottish factories has 
been increased with the cre- 
ation of 250 jobs. 


Fyffes, the Dublin-based fruit 
and vegetables distributor, is 
to pay I£5m (£4Mm) for 40 
per cent of a new Jamaican 
banana company. 

Jamaica Banana Holdings 
has been formed along with 
the Jamaican Government and 
Jamaica Producers Group, a 
Jamaican quoted producer, to 
acquire two large estates 
which together cultivate 8.000 
acres of bananas. 

The deal is part of the 
continuing privatisation of the 

Jamaican fmnnim industry. 
The government is understood 
to have just 5 per cent of the 
new group. 

Fyffes. which markets about 
a third of Jamaican hanana 
production, said the existing 
arrangements would continue 
unchanged. 

Earlier this week Fyffes 
made its sixth move in 
continental Europe in the last 
18 months. It bought 00 per 
cent of Tropic International a 
French fresh produce group 
which is expected to have 
sales of I£30m this year. 

The consideration is 
understood to be about I£l.5m. 
The acquisition lifts Fyffes* 
total annualised turnover in 
France to EElOOm. 

Fyffes is now jostling with 
Geest and Dole for second 
place behind Chiquita in the 
European fruit distribution 
market In addition to France 
it operates in Spain, Denmark, 
Holland and Germany. 


UK. Swiss and other European 
companies have been on a buying spree 
in the US, according to a report by 
accountants KPMG Peat Marwick. 

Led by Roche of Switzerland’s $5 J)ba 
(£3.35bn) purchase of Syntex Corpora- 
tion. foreign companies invested 
$3ZSbn (£20. 5bn) in outright acquisi- 
tions in the US in the first nine months 
of this year. Deals into the US were 
higher than at any time this decade, 
according to KPMG. 

Takeover activity across the Atlantic 
rose 126 per cent on the corresponding 


period of 1993, said KPMG. Much of the 
increase came from deals of more than 
S500m - the total number of transac- 
tions was little changed. 

Transatlantic M&A deals, like US 
domestic transactions, have been con-' 
ceutrated in a few sectors where consol- 
idation is advancing most rapidly. 

With SmithKlme Beechaxn of the UK 
buying Sterling Health, as well as 
Roche buying Syntex, deals in the 
chemicals and drugs sector amounted 
to Sllbn. 

Sandoz of Switzerland paid $3.7bn for 
Gerber Products, a US food company, 
underpinning $6ba of acquisitions in 


the food and drink sector. 

“A combination of a relatively weak 
dollar and the fact that the US economy 
is leading the emergence from recession 
makes the US an attractive place to 
seek acquisitions," said Mr Richard 
Agutter, chairman of KPMG’s corporate 
finance network. 

Some investment bankers said the 
surge in transatlantic activity reflected 
no more than the vitality of the US 
market. “The basic foot is that the US 
M&A market is dramatically up.” said 
Mr Stephen Hester, joint-head of 
European investment banking for 
CSFB. "That is just as true of domestic 


as it is of transatlantic. 

Investment bankers expect the How 
of deals in the US to continue, as the 
restructuring that has driven acqinsh 
tions progresses. Some also report that 
US companies are beginning to look 
more seriously at expansion in Europe. 

“interest is there, even though vol- 
ume is flat,” said an M&A specialist 
with one of the largest US investment 
banks. “We expect activity in the oppo- 
site direction to pick up considerably. 

However, cross-border European 
M&A activity is at its lowest level for 
several years, according to a recent sur- 
vey by Securities Data Company. 


Caught with its defences down 

Weakened by financial difficulties, Scantronic is ripe for takeover, reports Richard Wolffe 

T he alarm bells are ring- The company - which turn and expansion, cost Scan- operating profits fall from borrowings. Given the his 
ing at Scantronic Hold- reported pre-tax profits of Ironic £5 .3m. £3.3m to £L59m. primarily due of the past six months, tl 

ings as potential bidders £9.36m on turnover of £70.Sm In July the company to lower sales to the Continent, has to be a considers 


Gresham House 
In the red 


Gresham House, the 
investment trust, reported net 
losses of £95,000 for the half 
year to end-June against 
profits of £L17m including an 
exceptional £L16m credit 
Losses per share amounted 
to 2.2p (27.6p earnings). 


T he alarm bells are ring- 
ing at Scantronic Hold- 
ings as potential bidders 
prepare to raid the security 
components group. 

Shares have plunged from a 
high of 89p this year to 20Vip at 
the end of last week, as Scan- 
tronic's net debt climbed to 
£ll-2m last June, up from 
£3 5m in March 1993. 

Two weeks ago the company 
won shareholder agreement to 
raise £2 An in new equity and 
borrowings. The deeply dis- 
counted offer of 16.1m shares 
at lOp is expected to raise 
£1.2m. and was a condition 
of new banking facilities of 
£i.6m- 

The board announced there 
would be pre-tax losses of 
about £2L4m for the six months 
to September 30, against prof- 
its of £L4m last year. It also 
declared there would be no div- 
idend payments, including 
preference dividends, for this 
year. 

Last week Menvier-Swain, 
the emergency lighting and 
alarms manufacturer, 
announced its interest in mak- 
ing a bid for Scantronic. 


The company - which 
reported pre-tax profits of 
£9.36m on turnover of £705m 
in the year to April - pur- 
chased 550.000 Scantronic 
shares to raise its stake to 
l.64m shares, or 4.49 per cent 
of the company. 

Ruth Keattch, analyst at 
Granville Davies, said: 1 don't 
think the Scantronic board 
enjoys any sympathy with the 
institutional shareholders. 

“They had a good business in 
the UK: a leading brand with 
probably 50 per cent of the 
intruder alarm systems mar- 
ket But they took their eye off 
the ball and went on a mission 
to expand in the US, which 
was truly disastrous." 

Scantronic’s cash difficulties 
began last year with the acqui- 
sition of Alarmexpress Hold- 
ings, the UK security equip- 
ment distributor. In December. 
Scantronic placed 1.73m shares 
to fond growth at the new sub- 
sidiary. 

By April the board acquired 
20 per cent of Arius. the US 
distributor of security prod- 
ucts. The investment, along 
with the Alar m express acquisi- 


tion and expansion, cost Scan- 
tronic £55m. 

In July the company 
announced the departure of its 
finance director, Mr Ray Dias, 
claiming that he had foiled to 
alert the board to the twin 
impact of increased borrowing 


operating profits fall from 
£3.3m to SL59m. primarily due 
to lower sales to the Continent. 

Patrick Hickey, analyst at 
Henderson Crosth waits, said: 
“At the end of the day. this is a 
case of management over- 
stretching its ability. The 


‘The tragedy is that it 
is basically a 
good business in the 
UK, but it is not 
a product for the US’ 


and difficult trading condi- 
tions. 

The company announced 
pre-tax profits of £1.89m 
(£L27m) for the year to March 
31 compared with a statement 
in July that it would make 
profits of at least £2.75m. 

Turnover rose from £39. Im 
to £50 .2m, but the core UK 
manufacturing business saw 



CROSS BORDER DMA DEALS 



BIDDER/INVESTOR 

TARGET 

SECTOR 

VALUE 

COMMENT 

Air Products (US) 

Cartwros Me tail cos (Spain) 

Industrial 

gases 

£2 79m 

Buying from 

Banesto 

Daewoo (S Korea)/ 
Automobile Craiova 
(Romania} 

Rodae Automobile Daewoo 
(JV) 

Car manufacture 

£l92m 

New foreign 

Investment 

benchmark 

Sootgen Pharmaceuticals 
(US) 

Porton International (UK) 

Pharmaceuticals 

£963m 

Trumping Ipsen 
bid 

DSC Communications (US) 

NKT Bectrofuk (Denmark) 

Telecoms 

equipment 

£91 m 

DSC wants a 
lead position 

Tenneco (US) 

Heinrich Gfflett (Germany) 

Auto components 

£71 m 

Boosting Euro- 
presence 

Beaufour tpsen (France) 

Porton International (UK) 

Pharmaceuticals 

£KL5m 

Baard-recomm 
ended bid 

Morgan Stanley (US)/ 
People’s Construction 

Bank (China) 

CICC (JV) 

Banking 

9KL2m 

Investment bank 
venture 

SGS-Thomson (UK/Italy)/ 
Shenzhen SEG (China) 

JV 

Semiconductors 

£48 ,4m 

60/40 owner- 
ship split 

Panto Ml (UK) 

Foliage Plant Systems (US) 

Plant sovices 

£5m 

Indoor plants 
expansion 

Newman Tonks (UK) 

Randl Fabrfkeme (Denmark) 

Architectural 

hardware 

£3.1 m 

Continues Euro- . 
pean growth 


BARIS HOLDINGS has 
received applications for 3.72m 
of the 7.99m shares available in 
its recent 9-£or-8 placing and 
open offer. The take-up repre- 
sents about 66.4 per cent of the 
total offered, other than the 
2^J9m which were subject to an 
irrevocable commitment not to 
subscribe. Subscribers have 
been procured for the out- 
standing 4 -27m shares. 
CHARNOS pre-tax losses 
jumped to £2 .32m. (£667,000) in 
the six months to June 25 on 
sales of £24An (£22.7 m). Losses 
per share were 782p (22.96p). 
The company, which makes 
hosiery and lingerie, said bud- 
geted sales for the final weeks 
of the year should result in a 
pre-tax profit comparable to 
last time's £5-2m. It could not 
make a firm prediction because 
of uncertain factors. 
EUROCOPY, the photocopier 
supplier, has acquired Copysta- 
tic Mi dlands for £1.42m rash 
The price includes repayment 
of intercompany debts. 
FINSBURY UNDERWRITING 
Investment Trust shareholders 


have approved a change to its 
investment policy enabling it 
to invest in corporate members 
of Lloyd's syndicates in corpo- 
rate form and managing 
agents. 

HEATH (CE): Heath Shipping 
Services, group’s investment 
property subsidiary, has sold 
its effective interest in two 
commercial properties in 
Corby. Northants. Net pro- 
ceeds amount to some £5.43m, 
surplus of £600.000 over origi- 
nal cost 

EENMARE RESOURCES has 
completed a placing of 4.1m 
ordinary shares, 95,233 of 
which have been bought by Mr 
Michael Carvill, managing 
director. The £430,000 raised 
will be used for the ongoing 
operations of the group. 
LADBROKE GROUP has sold 
its 45,600 sq ft Charter Court 
office development in Slough 
to AMP Asset Management for 
£11. lm, a small discount to 
book value 

MENSTON INVESTMENT 
owns or has received valid 
acceptances in respect of its 


Crecfito Kaiano 


A joint stock company - Registered Office; Via Dante 1, Genoa -Head Office: Piazza Cordtsm, MiZaa Capital Lit 800 bQhon 
Registered with the Banks Register and belonging to the Credito Itallano Ranking Group 


NOTICE 


1. STOCK INCREASE FROM ITL 800 BILLION TO ITL L120 BILLION. 

2. ISSUE OF 'CREDITO ITALIANO 8* 1 994-2000 SUBORDINATED CUM WARRANTS ATTACHED’ BONDS WITH A TOTAL PAR VALUE OF m. 560 BILLION. 

J. ISSUE OF 640 MILLION ’WARRANTS FOR CREDITO ITALLANO ORDINARY SHARES 1994-1997V 330 MILLION OF WHICH ARE LINKED TO THE SHARES IN POINT 1, WITH THE REMAINING 320 MILLION LINKED TO THE BONDS IN POINT 2. 
4. STOCK INCREASE OF ANOTHER ITL 320 BILLION MAXIMUM THROUGH THE ISSUE OF ORDINARY SHARES RESERVED FOR EXERCISE OF THE WARRANTS IN POINTS. 


RULING OF THE BOARD OF DIRECTORS 

The Board of DmxuTi wbirib met on September 2S, 1904, bos rcsofttd to: 

a inacKc aivt by ITL 170 in Ulna by iisuing No. 640 million ordinary shares ro be optioned to -shareholders at a ratio of 2 new shires for 
evriy 5 tholes of on* dots bcU. al a price of ITL 1.500 per share, including ■ surcharge of ITL I.O0O. Warrants ore attached to Lbr new 
shares » a rann of 1 warrant for every 2 tharcs, valid fix subscribing ordinary share* as described below in point ’c’; 

R tssoc subcnlJ ruled bunds known as 'Credito (Lriiaso S% 1994-2000 subordinated tin warrant s* for ITL 560 bfilion. i yjm w «ri^g 320 
mitliun N'>od« with a par value uf ITL 1,750 each, lo be optioned to shareholder*, at par, at a ratio of 1 baud for every 5 shires of any 
class held. A warrant h anacbed ro csft bond. *r a ratio of 1 warrant for ere h boot valid to iubaaibc lo the ordinary shares mentioned 
in V below: 

c increase stock funhet by a maximum uf ITL 33) billion by issuing a maximum cf 640 million ndiuiy dares, is one or more tones, 320 
mill ii el uf Mlikh linked cxdusivrjy to the exercise of the warrants linked lo the shares in paint a. above and the reran mi np 320 pdn t"" 
IruVxd exclusively ut ihc aercue of the warrants linked to the bonds in paint b_ above. The warrants linked lo the have the sane 
diaractnfetk's and carry the same rights as Owe linked to the shares and arc fungible with the latter. 

The resolution passed by the {hard of Directors was approved by the Genoa Courts on October IL 1994 with Decree No. 2393. 


TERMS AND CONDITIONS 

The qprioa lights are rep resent ed by coupon No. 1 1 of both the ordinary and the savings share certifteates. to be need to ailaufc c ro tho new 
ordinary shares cum warrant, and bj coupon No. 12 to be used to subscribe to the nbonfinsted bonds cum wnranL 
Opening and dosing due of the subscriptions and authorised hulukomoc the right must be m a te d from October 17 up to sad 
htdodteg November IS. 1994 under penally of fo rfe it u re. Sub scr i p t i on requests must be presented in ttat period, both lbr the new shares 
and for the bonds, to any branch of Credito HaKano or to Monte Ttofl SpA as regards the securities managed by the latter, nr lo any of the 
b an k s / c oncems so authorised. Coaprsa Nos 11 and 12 of the share certificates mum be attached lathe requests. The rfgbB may be negotiated 
ou the Stock Exchange as of Ooober 17, 1994 and up to and foefudmg November 8, 1984. Rights not exercised wflf be offered au the Stack 
Exchange, as envisaged by An- 2441, third paiagi a ph or tho Italian Cbril Code. 

Subsc ri pt ta i price: m. 1,500 for each ordinary share cum wstrant having a nominal price of ITL 500. fadnding an ITL LOOP sur c har g e. 

ITL I.730m par. for each subordinated bond cum warrant No charges or extra expenses will be levied cn the subscriber. 

Guarantee of OCTET'S success the operation has a guarantee promoted by GrcdlW toliaoo and Modiobaoca and managed by the Inter. 

The Information Booklet describing tbe oiler set out in this ’Notice’ and all of the other documents envisaged by Goacotfs Decree No. 5553 
are available from the Registered Office, from the Stock Exchange Council and the authorised b ritteBW k and ore to be handed out to 
whODsocva: may request them. The 'Regulations' rcgtntiag the bond loan and tbe exercise of the warrants hereto urewhnKd are attached hi 
tbe Information Booklet. 


MAIN CHARACTERISTICS OF THE SECURITIES OFFERED 


ORDINARY SHARES CUM WARRANT 

The ordinary shares optional will have [be same characteristics and the same rights as the ordinary shares currently m em u la tio n. The new 
shares will also be queued on the Italian Stuck Exchange under the oominuoia system. 

The new shares boned will be dividend bearing as of January 1. 1994. The (dative share certificates will cany coupons from No. 13 u No. 
St. 

The watranis Intkrd lo same will be mihe ratio of 1 warrant for every 2 shares and shall, when subscribed, be detached and abril drcnfcue 
separably. 

SUBORDINATED BONDS CUM WARRANT 

Name and type of security: The Bonds being optioned will be known as "Credito lulxmo 1994-20011 subordinated cum warrants- and 
regulated by the specific 'Regulations’. It Will corns! of Nu, 320 million bonds with a par value of ITL 1.750 each, represented by baud 
certificates in dnumhutions of 1. 5. 10. 50. 100. 500, UXiO. 5.000 and 10.000 bonds. 

Circulation The Bonds belong to (be bolder and are not divisible. Upon request and payment of expenses, they may be emverted into 
re g istered emiflaie* and hack ogam, whereas tbe coupons remain payable w ibe holder. 

Effective ml crest rate: S'* per year before withholdings and payment will be deferred. The effective yearly yield before withholdings, ■ 
equal lo the nominal rate, to that the bunds are issued and reimbursed a! par. 

Matunt} and payment of interest interest will be paid era January 1st of each year, without expenses and net Of wit hh o l di n g s . Tbe Gist 
Coupon, doe on January 1, 1995 will be of fTL 1 7jfl ppg per bond and will rep re se nt Interest as of November 76. 29W. The last «mpt» 
will be payable on January 1. 2000. 

Payment method and terms: Payment in full of the snbotdtnaied bonds subscribed must be madron November 15, 1994. 

Durante of the Iran and rcanhurscmcnl reran: The loan wdl be reimbursed on January 1,1000. at par. wifo nO deductions for expenses 
being nude, and against consignment of the securities. Credito Itallano will hove ibe right, opoo receipt of authorisation from Bana 
dTtalio. to proceed. 18 months after the issue date, to begin advance redemption of all or pari of the bontk in circulation, giving at teas one 
month's notice. 

possible deferment douse: Since Ibe bonds are subordinated, should Credito Italiano be liquidated, ihey will be redeemed only after a0 
other creditor? nut equally subordinated have been satiated. 

Listing: Lntmgof the bonds cm the Italian Stock Markets' telematic system win be requested of CONSOB. 

‘nrewurnnK: The warrants which ore linked al subscription, in ibe ratio of 1 warrant for each bond, will, what issued, be coastdacd » 
detached and shaft circulate separately. 


WARRANTS 

Nome: "Warrants for Credito Iudtano Ordioiry Stares 1994-1997*. 

Amounts issued: A tool of 640 mill inn linked to No. 320 million new anbury shares linked to the subordinated bands. Tbe woman wfl] 
be In the Conn of bearer certificates in the foiknviug denomtaU8on«: I. 5. 10, SO, 100. 900. LOOO. 5JM0 and 10,000 nsun mid in 
variable denominations at request 

Conditions, leans, methods aud prices for exercising tbe watmms: The exercise of the warrants is governed by the specific 
•Regulations'. Holden of warrant* may, at any time, starting the day after ibeir issue and Dp rami December 3L 1997. by presenting: a 
request no lircr than November 30. 1 997. snhsofiic to ndnary Credito ItaUano shares carrying regnJarqgfcrs. ia tbe ratio of 1 share par 
value m. 500 tot each warrant, at a price of ITL 1 .750. of which ITL 1.250 surcharge, with ibe right reseivcd to moke changes to Ibe 
icran in the cue of further frn rK H?* resolved by Credito as envisaged by Art. 3 of the Regulations. 

(IS) numbs after tire Issue dare, tboso wishing to esereae warrants will have Ibe right sn ask Gredin tabaa. at Ibe some time as they 
present tbe request to exercise, to purchase from them ’Qedfro Italiano 8% 1994-2000 subordinated com warrant" bonds of the loan, 
witbotU wairaats and free oi any restrictions or charges and must ineinde coupons already in progress as well as tbe subsequent coupons, 
in a number which mns not exceed ibe number of warrants presented lo be eacscised. The fatudi wfll be purchased wfcb effect the same 
day as tit# preset (or subscribing the shares - at par value, along wkh ibe interest mamring fan the dare or cOtciiscness of tbe cotgroa 
in progress on tbe dale of rale, with taxes deduced. Revenue stamps relating to the pu rc hase of bonds will be paid by Cfediin Itallano. 
Requests W exercise warrants musx be presented, together with ibe warrants tbetnseives, id any branch of Credito Italiano or to Monte 
Tilnli SpA. relative to those securities ndmimotBCd by theta, or » one of the amhorfecd banks/concems. 

The exercise of warrants will be carried oni on the last bank business day of the month fallowing that in whrdi ibe reqiaat was 
presented. The subscription pnee of lie shares must be paid when presenting the right to exercise, and wdl be Free of any and all 
eommisstoa and charges for the presemer. 

Suspension of Lbcrigtt to CMKteTteeKBtire of warrants will tasnspended as of die dale of the resolution piffled by the Beard of 
Dunams of Credito Italiano to call a Meeting of ibe Stair bokfcrs bolding ordmmy shares, mrtil the da* after the due of the last 
shareholders meeting called, and in any case, up until the day folkiwing tiul on which any dividends whldt ibe Meeting may resolve 
upon, have been paid. 

Taro (or forfeiture: Tbe right of warrant boJdm m inba c r i b c to ordinary Credito Italiano shares most be excised by December 31, 

1997, under penalty of forfcVore, wWb requests being presented no later than Nove m b er 30, 1997. Warrants not presented for exercise 
wil] forfeit nay and all rights and will compiriciy lose ibeir value. 

I liming Listing cn the lolmn Stack Markets' telematic system will be requested of CONSOB. 


US SELLING RESTRICTIONS , . .. , 

Tbe Rtehts. ibe ocw Shares, ibo Warrants (including the Stares tssnahfc upon tfreir ecercwr), and the Hoods hove not been and will not be repJtrfed under tbe US. Securities Act of L933 (the ’Aa’1. Subject to cmam cxcepoom, ibacKtaruica may no* m cCeied, sold, taken up or 
riciiveied, directly or indirectly, within ihc United Stales or fw ibe account or benefit of U.S. persons ns part of the dt&ribmfon. In addhkm. the Warrants may not be cxereiMd m the United State* or by, or lor tbe account or benefit of US. persons. rwimim FTAT lAKrt 
The Bonds to barer form arc Subject 1 fo I7.S. cut /atvre«}iure»ii>eDisa«Jmayi»rbroflS3td.soIdordelhwed within the United Statts or its possesetoos or ton U5. person. IIALIAH 


tragedy is that it Is basically 
a good business in the UK, 
but it is not a product for the 
US. 

“Earlier this year they ran 
into problems because of a lack 
of financial controls. They 
ended up with a lot more stock 
and a lot less rash than they 
thought. 

“There are also very heavy 


borrowings. Given the history 
of the past six months, there 
has to be a consideration 
that there may be financial 
holes.” 

However, Mr John Singer, 
finance director, refused to 
comment on the company's 
financial position. 

Alongside Menvier-Swain. 
there are rumours that Silver- 
mines, the Dublin-based elec- 
trical services and property 
group, is interested in making 
a bid. 

In February, Silvermines 
made an agreed offer of 
I£5.17m for Molynx Holdings, 
the closed circuit television 
and security systems maker. 

“Menvier-Swain would be a 
perfect buyer because they are 
big in emergency lighting and 
fire alarms, which is very simi- 
lar to intruder alar m technol- 
ogy” said Ruth Keattch. 

“Silvermines would also love 
to be bigger in the security 
systems market. If Menvier- 
Swain are serious they are the 
most credible bidder, but it 
could evolve into a bit of au 
auction if someone like Silver- 
mines makes a bid” 


offer for Aifken Hume Interna- 
tional of 38m ordinary shares, 
82 per cent of the issued share 
ra pitai , and 4.09m preference 
shares (99.5 per cent). Offers 
are extended until November 
22 . 

NORTHUMBRIAN RESIDEN- 
TIAL Properties has received 
acceptances tor First Manches- 
ter Properties offer in respect 
of 555,000 shares, representing 
8525 per cent of FMP’s issued 
share capitaL Of this total, 
elections have been received in 
respect of 291,800 shares to 
accept the partial cash alterna- 
tive. The partial cash alterna- 
tive is now closed and the offer 

is nnffnndrtinnnl 

OSPREY COMMUNICATIONS 
is buying Roger Maber & Asso- 
ciates, a Hampshire-based 
advertising company, for up to 
£665,000 in shares. 

QUICKS GROUP has acquired 
the Dundee operations of Car- 
diner's Garage for £L18m cash. 
The deal includes the purchase 
by Quicks of trade debtors 
estimated to total some 
£300,000. 


















For further advertisement information on these 
surveys please contact: 


Patricia Suitidge 

in London 

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


FT Surveys 


■& ALLIANCES LEICESTER 

Affimcefi. UtoreireBBaCDjSod^ 

£40,000,000 
Subordinated Floating Rate 
Notes 1998 

For the six months 3!sr Octo- 
ber, 1994 to 28rfi Apnl, 1995 , 
the Notes will carrv an interest 
rare ot 7.2575% pe, annum 
wim an mrerear amount of 
£17.746.75 pet £500,000 Note 
payable on Z8ch Apnl, 1995. ‘ 

IwJoo 4 k UmoK^tSimt E njung 

■1 Bankers Tru« 

IJ Company. London 


Dfiiwa International Finance 
(Cayman) Limited 
U.S. $200,000,060 

Subordinated Floating 

Rale Notes due 2001 
Guaranteed on a 

subordinated basis hv 
_ The Daiwa Bank, Limited 
tmereul^i IIuQcHtorr.lWH 


taterupertoj 31wOtk*cr.l-«4 

n„. wJlwJaiwwy.lW 

"umber or 4'^, 

ImereyR^ 

rrTa " nU "’ 

qfcfldiHPM USSI.M0M 

Tbe Dniwa Bank. Llmlieri 
London Branch 

Agent Dank 


n 

■ii' 




v.ri:i pro 


' UH 


■■VMS 



J 





FINANCIAL TIMES MONDAY OCTOBER 31 1994 ★ 


19 




wrwira 

stern & 
a! Europe 

on fettfiftfftt 
on ifeiKriNfll 
on 

*. on dcctai^ 11 


-- .yrta 


c^jie I* 









COMPANIES AND FINANCE 


Hungary considers early 
sale of telecom shares 


Bologna bank fights L2,000bn bid 


By Nicholas Denton 

Hungary is considering a quick 
sale of state shares in Matav. 
the national telecommunica- 
tions company, that would 
dwarf all previous interna- 
tional equity offerings to come 
out of eastern Europe. 

At tbs top of the agenda is a 
proposal to sell up to 10 per 
cent of Matav through a pri- 
vate placement with Interna- 
tional institutional investors 
which could raise up to 8300m. 

Finance ministry and Matav 
officials said they had not 
reached a final decision hut 
were exploring options, includ- 
ing that of a private placement 
“That is the question we are 
discussing night anti day,” said 
Mr Mark von LifflensMoId, an 
executive director of Matav. 

A Closed offer of Matav 
shar es targeted at western pen- 
sion and emerging market 
funds would provide a fore- 
taste of a more comprehensive 
initial public offering planned 
for 1995-1996. The mandate to 


By David White in Madrid 

Consolidated earnings at 
Argentaria, the majority state- 
controlled Spanish banking 
group, edged up by 2.2 per cent 
before tax in the first nine 
months of the year to 
PtaSITftm ($664m). 

Net profit, excluding minor- 
ity interests, showed a stron- 
ger rise of 8.8 per cent to 

Pta57.72bn. 

The results came after a 19 
per cent increase in loan recov- 
eries to Pta3l.69bn and a 46 per 
cent reduction in provisions 
for loan losses and country 
risk to Pta35.5bn. 


advise on the initial placement 
is expected to be one of the 
most lucrative awarded in the 
region and hotly contested by 
investment banks. 

Although about $4bn in west- 
ern portfolio investment has 
flowed into Russia and other 
east European countries in the 
last year, most equity has been 
purchased in t rench e s on 
secondary markets. 

The sale of 8200m to $30Qm 
worth of Matav would far sur- 
pass the $70 m issue by Hungar- 
ian retailer Fotex to become 
the largest single international 
equity offering by an east 
European company. 

An issue of this scale is too 
much to be absorbed solely by 
funds specialising on eastern 
Europe or emerging markets in 
general. Mainstream pension 
funds, however, are expected 
to require more complete 
accounts than Matav can pro- 
vide at the moment 

Budgetary difficulties have 
encouraged the Hungarian 
authorities to bring forward 


This was offset by sharply 
lower earnings from securities, 
which fell by 88 per cent to 
Pta398bn from Pta23A4bn 

Operating income for the 
nine months improved by 10.5 
per cent to Ptal01.67bn. The 
group, in which the govern- 
ment stake is due to be 
reduced to a minority through 
a farther share offering next 
year, said this reflected a “sat- 
isfactory" performance in ordi- 
nary banking b us iness and 
success in containing costs. 

The next privatisation 
tranche, originally expected 
this year, has been put back 
because of the weak stock mar- 


the Matav privatisation. The 
new Socialist government has 
declared it will use privatisa- 
tion revenues to pay down the 
national debt 

Deutsche Telekom of Ger- 
many and Ameritech of the 
US, which last December took 
a joint stake of 30 per cent in 
Matav, have also softened their 
opposition to an early offering. 

Ameritech in particular had 
opposed a quick flotation 
because the price would have 
been below that at which it 
entered and it would have had 
to write down its investment. 
Salomon Brothers, hired by 
Matav to study an IPO, recom- 
mended that it wait until late 
1995 or early 1996. 

However, Deutsche Telekom 
and Ameritech now appear 
ready to accept a compromise 
whereby the government gets 
rapid proceeds through a pri- 
vate placement but a full IPO 
takes place in a more leisurely 
fashion. They are also discuss- 
ing a possible increase in their 
stake. 


ket trend, and is now not 
expected before the spring. 

Almost 50 per cent of the 
shares were sold in two place- 
ments last year, raising 
Pta29Sbn for the Spanish trea- 
sury. 

The group has launched a 
Pta35bn investment plan to 
expand its retail banking net- 
work over the next three years. 
This follows its failure in April 
to take over the troubled Ban- 
esto group, which went instead 
to Banco Santander. 

Argentaria’s total assets at 
the end of September stood at 
PtallJOOtm. 7 per cent higher 
than a year earlier. 


JVC sees 
return to 
the black 
this year 

By Michiyo Nakamoto in Tokyo 

JVC, the Japanese 
manufacturer of consumer 
audio-visnal equipment, has 
posted a recurring first-half 
loss and passed its interim div- 
idend. The group, however, 
managed to increase sales 
slightly in an extremely com- 
petitive market 

Non-consolidated sales in 
the six months were Y259.7bn 
($2.66bn), compared with 
Y251.4bn a year earlier. How- 
ever, JVC still suffered a loss 
of YlJ9bn, although this was 
an improvement over the 
Y9.8bn loss made in the previ- 
ous first half. The net loss was 
cut to Y2-9bn from YlO.Sbn. 

JVC, which has been under- 
going re st ruc turi ng, said the 
yen's rapid appreciation 
against leading currencies had 
offset efforts to reshape the 
company. 

In addition, JVC, like other 
Japanese consumer electronics 
groups, has faced tougher 
competition in its own market 

The consumer electronics 
market in Japan has been 
increasingly characterised by 
lower-priced produets as con- 
sumers hold back from expen- 
sive purchases. Cheap audio- 
visual products have been 
coming into the country from 
lower-cost countries in the rest 
of Asia. 

JVC said it expected further 
turbulence as the yen contin- 
ued to remain at a high level 
while competition in the 
audio-visual market was likely 
to remain fierce. 

It is forecasting that sales in 
the full year will reach 
Y530bn. against Y507.7im, and 
hopes to return to the black 
with recurring profits of Ylbn, 
against a loss of Yl9.5bn. 


By Robert Graham in Romo 

Credito Romagnolo, the 
Bologna-based regional bank, 
is expected to call in foreign 
advisers to help ward off a hos- 
tile bid by Credito Italiano, 
Italy’s fifth largest commercial 
bank. 

The bid, offering L19.000 per 
share for 4&2 per cent of Cre- 
dito Romagnolo’s stock, was 
rejected at a special board 
meeting on Friday. If Credito 
Italiano were successful it 
would create Italy's largest pri- 
vate bank. 

The offer by Credito Italiano 
is worth L2J)0Q bn (SlJtm) and 
was launched last Wednesday 


By Robert Graham 

The shape of the Italian stores 
market will change signifi- 
cantly as a result of QU, the 
state holding company, award- 
ing its GS-Autogrill group to a 
consortium headed by Benet- 
ton, the clothing group. 

The Italo-Swiss consortium, 
headed by Benetton, put in the 
winning bid for GS-Autogrill. 
the last part of the SME food- 
stuffs group to be privatised, 
late last Thursday. 

The deal marks the first 
large scale diversification by 
Benetton into a new area of 
business. It also signals the 
entry of a new foreign player. 
Movenpick, the Swiss hotel 
and restaurant group, into a 
sector whose development lags 
behind other EU countries. 

The winning consortium also 
includes Mr Leonardo Del Vec- 
chio, whose Luxottica specta- 
cles group has been one of the 
most successful business ven- 
tures in northern Italy, lake 
the Benetton family, this repre- 


after concerted buying of Cre- 
dito Romagnolo stock. Credito 
Italiano holds just over 2 per 
cent of the shares. 

The move has already pro- 
foundly shaken the banking 
sector. 

Credito Romagnolo, which is 
controlled by a core of share- 
holders led by Olivetti chair- 
man Mr Carlo De Benedetti. is 
understood to be considering 
recruiting at least one and per- 
haps two foreign advisers. 

Those being mentioned over 
the weekend included Morgan 
Stanley and Goldman Sachs 
International. 

Their task would be to assess 
the value of Credito Romag- 


sents a considerable diversifi- 
cation. 

The award will be ratified by 
a special IRI shareholders 
meeting on November 4. Until 
then the treasury, the sole 
shareholder, has indicated it 
would not reveal the terms of 
the deal. However, the bid by 
the Italo-Swiss consortium is 
believed to have valued GS-Au- 
togrill at L2.100bn ($l-33bn), 
some L300bn above Its market 
capitalisation. 

The bid was won against 
strong competition from a 
purely Italian consortium 
headed by Sinascente, the 
stores group controlled by the 
Agnelli family. In choosing the 
Italo-Swiss consortium IRI 
appeared to be swayed by a 
desire to bring in new blood. 

Originally, premier Silvio 
Berlusconi's Fininvest group, 
which has a large stores divi- 
sion through Stands, was inter- 
ested. But analysts said Statute 
did not pursue a bid partly 
because of concern over rais- 
ing a conflict of interest 


nolo and to draw up a posable 
list of “white knights" that 
might be interested in helping 
fight the takeover. 

Under existing statutes, no 
shareholder of the Bologna- 
based bank can own more than 
10 per cent. 

Credito Ttaliano would need 
the support of at least 20 per 
cent of the shareholders to call 
a special meeting to amend the 
statutes and allow majority 
control. 

Objections to the deal have 
centred on the price and the 
threat to Credito Romagnolo's 
identity. 

Although the price repre- 
sents a sharp premium on the 


between Mr Berlusconi’s own- 
ership of Statute and his role 
as prime minister. 

GS-Autogrill is the last of the 
three divisions owned by SME. 
the foodstuffs group that has 
been privatised by IRI over the 
past IS months. The other two 
were Italgel (frozen foods) and 
Cirio Bertoli De Rica (canned 
foods, oil, and milk). In 1993 
GS-Autogrill made a Ll32bn 
net profit on turnover of 
L4,068bn. 

IRI controls SL3 per cent of 
SME, and the offer was for 32 
per cent. The winning consor- 
tium will be obliged to launch 
an offer for at least 20 per cent 
of the minority shares; IRI has 
guaranteed to sell the bulk of 
its remaining holding to the 
consortium. 

One of the terms of the 
award is understood to be a 
co mmi tment to keep the stores 
and restaurant elements of GS- 
Autogrill together for five 
years. One of the attractions of 
the group has been to split the 
two. 


L13.674 pre-bid value, those 
shareholders tempted to sell 
are thought unlikely to accept 
the first offer - not least 
because it covers less than half 
the stock. 

The stronger objection conies 
from those who believe a 
high]}’ profitable regional bank 
such as Credito Romagnolo 
risks losing its identity in the 
bigger and more ungainly Cre- 
dito Italiano. 

Local Bologna politicians 
have begun to organise a cam- 
paign to prevent the bank 
being taken over, in spite of Mr 
Lucio Rondelli, chairman of 
Credito Italiano. saying that 
such fears were unfounded. 


Disposals 
keep Vard 
out of red 

By Karen Fossil In Oslo 

Vard, the struggling 
Norwegian cruise group, saw 
pre-tax losses, before extraordi- 
nary items, widen to 
NKrl08.4m (S16.52m) for the 
nine months to September, 
from NKr79.3m last time. 

However, the figures were 
distorted by the disposal of the 
ferry business and the sale of 
one cruise ship. This resulted 
in one of Yard’s three cruise 
businesses being sold and the 
remaining two being reorgan- 
ised. 

The pre-tax result, after 
extraordinary items, was a 
profit of NKr542.1m. against a 
loss of NKr 148.9m last year. 
There were extraordinary 
gains of NKr650.4m, against 
charges of NKr69.6m a year 
earlier. 

Group operating profit 
slipped to NKr440m from 
NKr479m as sales fell by 
NKr379m to NKr5.08bn. 

Net profit was NKr390.28m, 
against a loss of NKrl07.21m. 


Argentaria profit edges higher 


Benetton-led move changes 
shape of Italian retailing 


NEWS DIGEST 

Esselte ahead 
at nine months 

Esselte, the Swedish office 
products group, saw profits 
rise by 27 per cent to SKr261m 
(836m) from SKr205m in the 
nine months to September, 
writes Christopher Brown- 
Homes in Stockholm. 

Sales advanced by 2 per cent 
to SKr8.82bn nnri margins 
improved but sales in the US, 
its most important market, 
were affected by a product sub- 
stitution programme. Lower 
hedging income increased 
costs by SKr40m to SKrl43m. 

The company expects full- 
year profits to be around 
SKr400nt, compared with 
SKrSOlm last year. 

Mr Bo Ltmdqvdst, chief exec- 
utive, said sales had developed 
well in western Europe and the 
Far East. “The market for 
office products is continuing to 
increase, while the market for 
graphic art products Is declin- 
ing,'' he added. 


The strongest divisional per- 
formance came from Esselte 
Dymo, the main office products 
unit, where operating profits 
rose to SKr215m from 
SKrl67m. 

NBH warns of 
downturn 

North Broken Hill Peko, the 
Australian resources group, 
has warned shareholders that 
it expected a fall in profits in 
the current year, due to lower 
iron ore prices and the absence 
of any early improvement in 
the uranium market, writes 
Nikki Tail in Sydney. 

Mr Michael Deeley, NBH 
Peko chairman, told the com- 
pany's annual meeting that the 
Northparkes mine would not 
start copper production until 
1995-6. Meanwhile, he said, 
exploration expenditure would, 
be rising. 

He conceded that group sales 
would strengthen generally as 
economic growth picked up in 
the industrialised world, but 
said that the group expected 
operating profits to be “slightly 


below” those of 19934. “We do 
not expect significant abnor- 
mal profits to arise during the 
year,” he added. 

In the year to end-June, 
North Broken Hill Peko made 
an operating profit after tax of 
A$185.3m. (US$136 .2m) which 
included net abnormal profits 
of A*65^m. 

Malaysian sales 
by East Asiatic 

The East Asiatic Company, the 
Danish-based trading group, 
has sold its Malaysian planta- 
tion interests and its 25 per 
cent share in the Carlsberg 
Brewery in Malaysia to Malay- 
sian Mosaics, a locally listed 
investment group, writes Hil- 
ary Barnes in Copenhagen. 

The deal will give East Asi- 
atic an extraordinary profit of 
DErGQOm (SlOOm) and cash pro- 
ceeds will be about DKrlJbn. 

The agreements involve the 
sale of all EAC*s shares in EAC 
(Malaysia) Berfcad and buying 
back shares in parts of the 
business EAC wishes to con- 
tinue to operate. 


CITICORP O 


ILS-$350,000,000 

Subordinated Floating Hate Notes Due November 27, 2085 
Nolice is hereby given that ibo Roto ot Interest has been fixed at 
5.1% in rasped of the Original Notes and 5.1875% m respect cf me 
Enhancement Notes, ana that the interest payable on the relevant 
Interest Payment Dote November 30, 1994 against Coupon No. 106 in 
respect of USS I OflOO nomintd of the Notes %riBae USS4250 n reaped of 
fra Origral Nates and US$43.23 in rasped of rise Enhancement Nctes. 


U-&$500,000,000 
Subordinated Floating Rate Notes Due October 26*2005 
Notice is hereby given that the Rato of Interest has been fixed at 
5.1% and that the interest payable on the relevant Interest 
Payment Dote NovarAur X, 1994 against Gouxm No. 109 in rasped 
of US$1 0,000 nanirol of the Notes w« be USS4250 l 


U-SJ$500, 000,000 


1998 


Notice is hereby given that the Rate of Interest has been fixed ot 
5.075% and that the interest payable on the relevant interest 
Payment Date November 30, 1994 against Coupon No. 106 in 

raspedofUS$ 10 /XX?te 3 msiol 3 tfieNotesvJbeUS$aZ 29 . 

Poohs- 31. 199A. London ' , . . . ., r , 

By: Gflxjnk, NA. (tow Services), Agent Bmlc Cl 1 IB A WO 

Espirito Santo Financial Holding S. A. 

U.S. $100,000,000 

Fl oating Rate Notes due 1996 

In accordance with the provisions of the Notes, notice is hereby 
given that the Rate of Interest for the six month period ending 
28th April, 1995 has been fixed at 7% per annum. The 
interest accruing for such six monrft period will be U.S, S3,480-5b 
per U.S. 5100.000 Note against presentation of Coupon Number 8. 

saa afcutt— W— Bli 

Union Rank of Switzerland 

London Branch Agent Bank 
27ch October, 1994 



CENTRALE NUCUEAIRE 
EUROPKNNE 
A NEUTRONS RAPIDES 
5JL -NERSA FRF 400.000.000 
GUARANTEED FLOATING 
RATE NOTES DUE 1997 
For the period October 28, 
1984 to January 31. 1995 the 
new rats has been fixed at 
5,726 % PA 
Next payment date: 
January 31. 1995 
Coupon nn 23 
Amount. 

FRF 302. 15 for the 
denomination of FRF 20 000 
. FRF 1510,76 for the 

Jenomination of FRF 100 000 

THE PRINCIPAL PAYING 
AGENT SOGENAL 
SOOETE GENERALE GROUP 
IRAv.E. Reuter -LUXEMBOURG 


BANQUE NATIONALE 
PE PA WS 
progatmne lot tta taaarwe o? 
DgMln rt nan Mb 
Yen 3,000,000.000 
Roating/FixEd Rate Notes dvelMS 
Series 7 Tranche 1 

Notice is hereby grven wo the raw ot 
intvest tor toe period from October 
3ia, to Fteruaty 6lh. 1B95 has been 

(had a 2.48B* par cent per annun. 
7he cooper) amount due tor inis period 
Is Yen 677.399 per denorntnadon of 
Yen iOOOOQlDOO arid Is payable on toe 
Harast payment doe Febntei 1 WB6. 

Tht fisc? Agent 

Benque Nationals de Parts 
(Luxembourg) SA. 



Republic of Italy 

ECUI.000,000.000 
Floating rate notes due 
2005 

Notice is hereby given that the 
notes win bear interest a 
5j87S% per annam from 
31 October 1994 to 31 January 
1935. Interest payable on 31 
January 1995 will amoanf to 
ECU75.07 per ECUS, 000 note 
amt £07750.69 perECV50,000 
note and ECU I, SOI 39 per 

£01100.000 note. 

Agent: Morgan Guaranty 
Trust Company 

JPMorgan 


ECU 3QOftOQ,QOO 
King dom of Belgium 
Floating Rate Notes due 2000 
Far the period from October 31, 1934 
to January 8L 1995 the Notes «fll 

carry an interest me of 5 t K'S per 
annam with an tnierM amount of 
ECU 1*17.38 per ECUUOjOOO Note. 
The referent interest payment date 
will be January 31,1995. 

Aewil Banin 

ft 

Banque Buu BAS 


Wells Fargo & Company 

US$200,000,000 
Floating rate subordinated 
notes due 2000 

The notes mill bear Interest at 
525% per annum for rtte 
interest period 31 October 1994 
to X November 1994. Interest 
payable on 30 November 1994 
ujHI amount to US$43. 75 per 
US$10,000 and USS218. 75 per 
US$50,000 note. 

Agent: Morgan Guaranty 
Trust Company 

JPMorgan 


o 

a. 


z 



The Pfandbrief ■ 

Eight strong arguments for our product 



The yield on our Pfandbriefe is higher than the return on public-sector 
bonds. They guarantee a fixed rate of interest throughout their life. They 
offer a broad spectrum of maturities for individual investment planning. 
Furthermore, they provide excellent liquidity: our Pfandbriefe can be sold 
at any time through the stock exchange. The security given to the investor 
by virtue of the German Mortgage Bank Act makes them an especially 
attractive offering on all financial markets. Their outstanding quality has 
been acknowledged since 1987 by the "AAA" 
rating of the international rating agency 
Standard&Poor's. Finally, the reliability of 
Frankfurter Hypo as an issuing house for over 130 
years is a further sound argument. In a nutshell. 

Frankfurter Hypo Pfandbriefe provide the solid 
foundation for your capital formation. 

Frankfurter Hypothekenbank AG, JunghofstraSe 5-7, D-60311 Frankfurt, 


Talk to your investment 
consultant, broker or bank 
■bout our Pfandbriefe and 
tba security provided by the 
German mortgage bond 
system. 


Fax 01049/69/29898-219 


Frankfurter Hypothekenbank 

This is an investment advertisement issued by Frankfurter Hypothenbank AG being approved by Deutsche Bank AG London, a mem- 
ber of the SFA pursuant to [he rules of the SFA. Since the investment* era iasued and regulated | n Germany, the protection provided 
by ihe UJC regulatory system does not apply and these investments are excluded from the U.K. Investors Compensation Scheme.* 



s 








FINANCIAL TIMES MONDAY OCTOBER 31 1994 


THE WEEK AHEAD 


DIVIDEND & INTEREST PAYMENTS 



MULTIMEDIA 

business; aMM 

REGULAR NEWS^NDAtWdySIS, 
OF.THE 

Published every two weeks by the Financial Times. 
Multimedia Business Analyst provides expert coverage of 
die multimedia industry - from interactive home 
entertainment services, the CD-ROM market, 
videoconferencing, to new hardware platforms, information 
highways and cable infrastructure. Multimedia Business 
Analyst combines news with analysis and forecasts to 
provide you with the single most useful source on the 
multimedia global market. 

Each issue of Multimedia Business News w ill report on: 

■ New lechnologies, in development or commercially 

available, and their impact on the market 

■ Mergers and alliances 

■ Regulatory moves and the role of governments in the 
information superhighway 

■ Company news - financial results, flotations, and changes 
in management 

■ Statistical analysis of the various indicators of market 
performance, residential and business expenditure, and 
sales of hardware and software applications and cable 
services. 

Press reporting contains an enormous amount of 
indigestible, conflicting and frequently confused coverage of 
the 'multimedia revolution'. Multimedia Business Analyst 
aims to cut through this verbiage to provide you with a 
succinct and thorough analysis of the news that matters. 

The first issue of Multimedia Business Analyst is published 
this month. If you would like to receive a complimentary 
copy please fill in your details below, or attach your business 
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| Company 

1 AW. 4 n.rf 


Reposed Off or fT Suites Ct mprima lad. Number One tes tera* Sntee. London S£l 1HL 
Enffatd Fetotatri Numbs 980894 W Nk CB 27S 53 71 2 1 

OaaPwMalaB AccTV M OT dBni on rote by la you Monte ri 

FT p j tf t o end utf bjr otf® atod t p n fc y ovnpsdts far iaft| pupom 


■ TODAY 

Abbott Mead Vickers 4.5p 
Alexon 5% Pf. 1.75p 
Allied Irish Bks. Prim. Cap. 
FRN $138.72 
Applied Distribution 1.3p 
Armour Tst 1.42p 
Baldwin 1.6p 
Baltic Ip 

Bankers Inv. Tst 8% Db.'23 
£4.0 

Do. 101696 Db. 2016 £5.25 
Bank Nova Scotia Fltg. Rate 
Db. 2000 £145.83 
Baileys 10% On. Pf. 5p 
BlundeH-Penn. 71496 Un. 
Ln.*9Q/95 £3.625 
Brit Gas Int 916% Gtd- Bd. 

'01 C$95.0 

Bruntdiffe Aggregates 0.4p 
BSM 2.1 5p 

Burmah Castro! 6% Cm. 1st Pf 
2.1p 

Do. 696 Cm 2nd Pf. 2-1p 
Do. 8% Cm. Pf. 2.Bp 
Do. 7%% Cm. Pf. 2.5375p 
Bums Phil. Treas. 516% Gtd. 
Sb. Bd. ‘04 $166.52 
Cakterbum 2.9p 
Campbell Soup $0.28 
Capital Shop. Centres 6% Sb. 
Bd.‘06 3.767p 
Chemical Banking $0.44 
Chemring 4.9% Cm. Pf. 2.45p 
Citicorp Retrac. Nts. Oct. '96 
$430.10 

Citicorp Bank. Gtd. FRN 
Jan. 1997 $137.08 
Collateralised Mtg. Sec.4 Mtg. 
Bckd. FRN *27 £97.01 
Do.6 Mtg. Backd. FRN ‘27 
£112.41 

Do. 12 Class A Mtg. Bckd. FRN 
*28 £98.11 

Cookson 7% Non-Cm. Pf. 
1.22Sp 

Creston Land 6% Cv. Ln. 3p 
Daiwa IrrL Fin. 8%% Sb. 

Bd.*03 $8375.0 

Do. Sb. FRN 2001 $1334.93 

Dartmoor Inv. 614% RPl-Lkd 

Db. '05 £3.835 

EFT 0.525p 

Electron House 2p 

□ Oro Mining 20p 

Eng. Prop. 9%% 1st Mtg. 

Db.97/2002 £4.9375 

ERF (Hldgs) 10% Cm. Pf. 5p 

Estates Prop. Inv.10% 1st 

UK COMPANIES 


■ TODAY 

COMPANY MEETINGS: 

Europe Energy, SO. Stratton Street, W.. 

iaoo 

TR B u mp— Growth Tst, 3. Hnebwy 
Amu* EG, 1Z30 
BOARD MEETINGS: 

Finals: 

Bflnbwtfi Inca Tat 
Renting Cttineae taw. Tet 
Inti. Conan. & Data 
Lowland inv. 

Interims: 

Alitruat Now Thai 
Anglo St James 


B w rai tey <teotqi 


Mtg. Db.'11 £5.0 

Do. 10% Sec. Ln. 93/98 £5.0 

Evans of Leeds 11% 1st Mtg. 

Db. *25 £5.50 

Exploration lOp 

Export-Import BkJapan 9% 

Gtd. Bd.‘96 Ecu90.0 

First leisure 2.12p 

F & C Special Utilities Inv. I.lp 

Do. Package Units I.lp 

Forte 9.1% Un. Ln. 95/2000 

£4.55 

Gartmore Value Invs. 12.34% 
.Db. ‘95 6.1 7p 
Gen. Motors Acc. Can. FRN 

Nov.'SE C$437.69 

Global Stock Invs. Ptg. Pf. 
Dollar Cash Port. $0,175 
Do. European Equity Portfolio 
DM0.255 

Do. Far East Equity Pori $0.30 
Do. Global High Inc. Pori 
$0.25 

Do. Japanese Small Co’s 
Portfolio $0,125 
Do. UK High Inc. Port 13p 
Do. US Small Co’s Port $0.16 
Gold Greenlees Trott 2p 
Grasvenor Dev. 716% Cv. La 
‘99 3.75p 

Guildhall Prop. 6% Cm. Pf. 

2.1 P 

Guinness Fin. 9%% Gtd. 

Nts.'98 C$96 -25 

Holt (Joseph) 12p 

ICN Pharm. 696% Sb. Bd. *01 

$33.75 

Independent Insurance 4p 
Intermediate Cap. 3.75p 
Jackson (Wm) 716% Cm. Pf. 
2.625p 

Japan Mr. 5.45% Bd. ‘02 
Y545000.0 

Do. 5.5% Bd. OCL2003 
Y550000.0 

Kansai InL Air. 614% Gtd. 
Bd.'99 $312.50 
Do. 9% Gtd. Bd. *96 $450.0 
Lasmo Oil Prod. Units 3.317p 
Latham (James) 8% Cm. Pf. 

4p 

Legal & Gen. 6%% Cv. Sb. Bd. 
•08 £33.75 

Uon heart 7% Cv. Pf. 3.5p 
Litho Supplies 2.73p 
Lon. Merchant Sec. 7%% Cv. 
Un. Ln. 200G/05 £3.875 
Lowes $0,045 
Mayne Nickless AS0.17 


Cura inti A Armstrong 
Danka Bus. S y s te ms 
Mrbriar 
GBEbiti. 

Newport 

Mnsllli ■Illislon F7n n rTa 

Honnurooiwi nrw rooca 
Panther Socs. 

Raokwood Mns. 

Rows Evans 
St Davids tar. Tet 
Toys A Co. 

■ TOMORROW 
COMPANY MEETINGS: 

Bryant Grp., Cranmore House. Cranmore 
Botoevard. Sound. W. M Hands. 12.15 
Bum Stewart DielBters, Trades Hal. 
Giasslord Street, Glasgow. ID. 00 
Go-Ahead Grp, Swolow Hotel, f-Bgh 
West Street Gateshead. 4.00 
HTR Japan e se Smeiw Co's Tet, 3, 
Finsbury Avenue. EC, 1ZOO 


McAlpine (A.) 9% Cm. Pf. 4.5p 
Mitsubishi Chem. 4.496 Nts. 
l 97 Y44000a0 

Nat West Bank Var. Rate Cap. 
Nts. 2000 $1387.15 
Newarthill 6.775% Cm. Pf. 
3.3875p 

NHL (1) Dfd. InL Mtg. Bckd. 
FRN ‘28 £118.20 
Nova Scotia (Prov.) 16%% 
Ln.*11 £8.375 

Pacific Horizon Inv. Tst 0.1 Ip 
Peel Hldgs. 9 7 /a% 1st Mtg. Db. 
•11 £4.9375 

Peel South East 10% 1st Mtg. 
Db. *26 £5.0 

Do. 11%% 1st Mtg. Db/18 
£5.8125 

Do. 12U9A 1st Mtg. Db. 15/20 
£625 

Port. & Sunderland News. 6% 
Cm. Pf . 3p 

Do. 1116% 2nd Cm. Pf. 5.75p 
River & Merc. Tst Stppd. Pf. 
2.9549p 

Royal Bk. Can. Fltg. Rate Db. 
'05 $43.59 

Scottish Inv. Tst 4% Db. £2.0 
Do. 414% Db. £2.125 
Do. 5% Db. £2.50 
Scottish & New. 4.6% Pf. 2.3p 
Do. 6.425% Pf. 3.2125p 
Seagram Distillers 12%% Db. 
*12 £6.1875 

Sec. Loan Fin. Mezz. Mtg. 
Backd. FRN ‘18 £183.76 
Shires Inv. 4.1 p 
3i 10%% Bd. 2001 £107.50 
TMC P1MBS First Fin. No.2 
Jul.*29 £150.30 
Do. Issue No.5 Apr .2029 
£76.18 

Do. Issue No.7 JanJ2029 
£7227 

Do. Issue No.4B OcL2029 
£152.11 

Toronto-Dom inion Bank 
CS0.20 

Transamerica $0.50 
Transatlantic A Pf. 12p 
Do. B 6% Pf. 3p 
Do. 516% Sb. Bd. *09 3.2847p 
TR City of Lon. Tst 1014% 
Db.*20 £5.125 

TR European Growth Tst 1.7p 
Do. Ptg. Sub. 1.7p 
TR High Inc. Tst Up 
Try 0.5p 
USF&G $0.05 


lAFOrp, 12. Curzon Street Mayfiar. W. 
10X10 

Lloyd Thompson, Beaufort House, 15. St 
Bottiph Street, EC. 1Z30 
BOARD MEETINGS: 

Final- 

Scot Nati. Trust 

> - , - r . . . 

NiiDinS. 

Capital Gearing Tet 
CeWeteti. 


Rexmore 

Safeiand 

Schr o der Korea Rid 
Stem Selective Growth 
Thames Water 
Westbuy 

■ WEDNESDAY NOVBHSBt 2 
COMPANY MEETINGS: 

Uncst, Station Hoed. North Hykehum, 
Lincoln, 1030 


Vaux 7% Pf. 2.45p 
Do. 416% A Pf. 1.575p 
Do. 6V6% A Pf. 2.275p 
Wellington Hldgs. 1-2p 
Wafls Fargo FRN 2000 $45.21 
Western Mining A$0.04 
WEW 1016% Pf. 99/2002 
5.25p 

Wimpey (Geo) 2p 

■ TOMORROW 

Ameritech $0.48 

Anglo Am. Ind. 5%% Cm. 1st 

Pf. R0.05625 

APV 3.15% Pf. 1.575p 

Do. 4.55% Pf. 2^75p 

Do. 5.25% Pf. 2.625p 

Astec (BSR) 0.4p 

AT&T $0.33 

Beattie (James) A 1.5 p 

Bed Atlantic $0.69 

BellSouth $0.69 

BET 416% 2nd Db. £2.25 

BPP Hldgs. 3.1 p 

Bristol 316% Db. £1.75 

Britannia Grp- 0.5p 

British Inv. Tst 514% Pf. 

£1.8375 

British Mohair 6% Cm. Pf. 

Zip 

BTP Cv. Pf. 3.75p 
CrestaCare 0.26p 
Dunedin World. Inv. Tst 3.5% 
Cm. Pf. £1.75 
Edinburgh Inv. Tst 716% 

Db.*95 £3.75 

Enterprise Oil 6.5p 

Exchequer 3% Gas 90/95 

£1.50 

Rofax Ip 

First Choice 1.4p 

Fleming Inc. & Cap. Inv. Tst 

Ip 

Do. Units Ip 

Fleming Mercantile Inv. Tst 
1.675p 

Fyffes Cv. Pf. IR4.125p 
GenRnance 11.31% Ln.'07 
£56.55 

Gibraltar 11%% Ln.‘05 
£5.9375 

Glaxo 7%% Un. La 85/95 
1.9375p 
Grafton IR3.5p 
Graseby 2.7p 

Hardys & Hansons 5% Cm. 1st 
Pf. 1.75p 

Do. 4% Irrd. 1st Mtg Db. £2.0 
Huntleigh Technology 2.75p 
lnt Stock Exchange 1016% 


MR Date MngmL Grp-, Howard Hotel 
Temple Place, Strand, W.C, 12.00 
BOARD MEETWG9; 

Frists: 

Boflway 

D re a dB e te taw. Tst 
Cooper (Frederick] 

On Demand Info 
Interims: 

German S ma tiar Co’s. taw. 

Jennyn Inv. Tst 

Ma a rantat e Cap. A Inc. Tst 2001 

SatawtuyfJ) 

■ THURSDAY NOVafflGR 3 
COWAWY MEETINGS: 

Good w il l . Chaucer InL Estate, Launton 
Road, Bicester, Ox on., iaoo 
MAI, Gtedera Hal, 9. Montague Close. 
EE. 3.00 

Starter, Cedar Court HoteL WeksfMd. 
12XJ0 


Mtg. Db. ‘16 £5.0625 

Jackson Grp. 0.5p 

King & Shaxson 5% Pf. 1.75p 

KJeinwort Small. Co’s Inv. Tst. 

I.lp 

Laing (J) 6.4% Cv. Pf- 3 2p 
] amort HkJgs. 6% Cm. Pf. 
1.05p 

Do 5.6% 2 nd Pf. 2.8p 
Do. 10% 3rd Pf- 5p 
Lincoln National $0.41 
Lloyds Chem. Rd. Ptg. Pf. 
2005 3.75p 

Londonderry Port & Harbour 
316% Cons. £1.75 
Marshalls 10% Cm. Pf. 5p 
Merchants Tst 4% P«P- Db. 
£2.0 

Mid Southern Water 10% Db. 
1995/98 £5.0 

Montreal 3% Perm Db. £1.50 
National Home Loans FRN *95 
SI .47 

Nottingham 3% Irrd. £1.50 
Nynex $0.59 
Ocean 4.71p 
Pacific Telesis $0,545 
Parkland 3.15% Pf. 1.575p 
Pentland 1-25p 
Reading 3 Yt% £1.75 
Retail 616% 3rd Pf. 2.275p 
Sanderson Bramall Motor Ip 
Scottish Agile. Sec. 13% Db. 
97/99 £6.50 

Scottish Inv. TsL 316% Cm. Pf. 
£1.75 

Do. 3.85% Cm. Pf. £1.925 
Do. 4.55% A Pf. £2^75 
Serna 1.6p 

Singer & Friedlander 1.4p 
Southwestern Bell $0,395 
Treasury 6%% Ln. 95/98 
£3.375 

West Tst 2.3p 

Whitbread 4V6% 1st Pf. 1-575p 
Do. 6% 3rd Pf. 2.1p 
Do. 7% 3rd Pf. 2.45p 
Wills Grp. 0.385p 

■ WEDNESDAY 
Assoc. British Ports 2p 
GKN 8p 

Henderson EuroTrust 1.85p 
Do. Units 1.85p 
Taylor Woodrow 0.75p 

■ THURSDAY 
Albany Inv. TsL 1 -35p 
Bradford & Bing. Bklg. Scty. 
FRN Feb.*99 £143.36 
Brightstone Prop. Ip 


SWP, The Registry. Royal Mint Court. 
EC.. 10.30 

Wa tonwa n Partnership. Apothecaries 
Hall. Btackfriara Lam, EC, 12.00 
BOARD MEETINGS: 

Fmate 

Euramonoy Puhtacatlona 
Kwik Sawa 
MMT C otraj u U nfl 
Smart (4 Contractors 


Boots 

HnafauyTaL 
Garraan taw. Tst 
Quatoant Grp. 

Raglan Prop*. 

Setan Haritheara 
■ FRIDAY NOVBWB1 4 . 

COMPANY MEETINGS: 

P ofvrtnch, HHon Notional Hotel, Empire 


Cornwell Parker 4p 

Do. A N/Vtg. 4p 

DRS Data & Research Ip 

Fairhaven InL $0,005 

Go wrings Ip 

Haynes Publishing 5p 

Headway 0.7p 

Healthcall 1.5p 

Highcroft Inv. TsL 2p 

HTR J ap anese Small. Co s Tst 

0.45p , . 

Lloycfs Smaller Co‘s Inv. TsL 

1.75p 

Do. Package Units 1.75p 
OGC InL 1.8375p 
Plasmec 1 .5p 
Rubicon 2.8p 
Shell Trans 11. 2p 
Steel Burrill Jones 3p 
TT 10%% Cv. Pf.'97 5.4375p 
Treasury 15 14% Ln.'96 £7.625 

■ FRIDAY 
ASW 3p 

Baynes (Charles) 0.7p 
Benson Grp. 0.23p 
Bentalls 0.6p 
Dawsongroup 1.8p 
Delta 10%% Db. 95/99 £5.375 
Edinburgh Fd. Mngrs. 8p 
Excalibur Grp- 0-4p 
Halifax Bldg. Scty. FRN *97 
£277.78 

Intrum Justitia I.lp 
Life Sciences 1.6p 
Lincat 4.7p 
Mariey 2.lp 
Maybom 2p 

Mersey Docks & Harbour 3.3p 

New Zealand 1114% 2008 

£201.25 

OIS InL 0.5p 

Pearson 5.75p 

Ouayie Munro 6p 

River & Merc. Am. Cap. & Inc. 

TsL 1.8p 

Servomex 2.1 p 

Stat-Plus 4.32p 

SWP 0.2p 

T & N 7.5p 

Transport Dev. 3p 

Usher (Frank) 4.5p 

Walker (Thomas) 0.5p 

Watmoughs 1.7p 

Yorkshire Food 0.8p 

■ SUNDAY 
Nightfreight 1.13p 
Treasury 7% 2001 £3.50 
Whitbread 514% Un. Ln. 95/99 
£3.625 


Way. Womctey. 12.00 
Fortnum A Maun, 181. PkxaCWy. W.. 
10.00 
Logics 

Lytoa (SJ, Forte Crest HoteL Often 

VBago, Brighouse. 124)0 

Ricardo Oijx. Royal Aeronautical Society. 

Hantton Place, W, 1030 

BOARD MEETINGS: 

Interims: 

Banner Homes 
Burtonwood Brewery 
Cook (WBtem) 

Oceana Cons. 

IBt 

Company meetings m amual gmral 
m e et ing s unloss otherwise stated. 

Please note: Reports and account are 
not normally svaUobfa until approximately 
etx weeks alter the boerd meettaig to 
approve the prstert nary reoutta. 




CONFERENCES & EXHIBITIONS 


NOVEMBER 9 
Polish Business Day 

CBl Conference, supported by the DTI, 
designed to provide companies with practical 
in fi m n a riftn on spec ifi c mcSqgor investment 
opportunities. Programme includes keynote 
address by Prime Minister Pawlak, 
presentations by senior Government 
representatives, together with sectoral 
woricsbops and nerwaddng oppcmmilies. 
Contact: Sandia Akfred. CBI Con f eic ac ea 
Tel: 071 379 7400 
24b bc-an-demaud: 071 240 1248 
LONDON 

NOVEMBER 9 

Presentations for Professionals 
by Professionals 

At the Mermaid Theatre, a seminar on 
creating effective presentations. From 
presentation techniques and use of 
language, to AV design, slide production, 
etc. Businessmen, stand-up comedians and 
actors demonstrate bow to make lasting 
impressions. Instructional, utterly 
enjoyable - a must for all presenters. 
Keynote speaker: Alan Dibbo, Chartered 
Institute of Marketing. 

Contact: E watiaros. Executive Presanations 
Tel: 071 8378199 Fax:0718378]« 

LONDON 

NOVEMBER 1 1 
Insider Dealing Investor 
Relations Seminar 

Half-day Intensive seminar, sponsored by 
IR Society, on Regulation. Archer, handling 
DTI enquiries, price sensitive info. Venue: 
Liw Society. Speakers: Stock Exchange. 
Norton Rose. Legal A General, Cable & 
Wireless. 

Gwocc 8xn Asvxates 

Tel: 071 J«7 2225 Fas: 071 497 9295 

LONDON 

NOVEMBER 12-14 
Machbie Translation: Ten Years On 
This international conference is jointly 
organised hy Cranfield University and the 
BCS Natural Ijnpiay TranstaliOT Specials 
Gnwp. Papen centre on achievements in the 
past ten yean, also oo research into expected 
developments in the next ten years. 
Applications are discussed with rignlkiant 

relevance to commercial and business tile. 

Contact: Douglas Carta: or Alfred Vella 

TeL +44 (0)iM 750111 
Fax: «-44 10)234 750728 
E-Maifc a.vella cranfield ar tilt 

CRANFIELD 

NOVEMBER 15 
International Mobility 
CBI conference addresses findings from 
survey on catrenr practices and new 
developments in bncraational remuneration 
policies, particularly in newly emerging 
caraomka of Central and Eastern E u rop e 
anil the Pacific Rim. Conference examines 
practical approaches to remuneration 
package, cost control and provides company 
case study examples. 

Contact: Sandra Aldred, CBI Conferences 

Td: 071 379 7400 

24 hr rax-ou-demamt 071 240 1248 

LONDON 

NOVEMBER 15&16 
FT Ninth petroleum & Gas 
Conference 

This cvcnl, timed to coincide with 
PerroTech 94. will focus on European oil 
refining and the market to the year 2000. 
considering current and future European 
capacity, new refining investment and 
environmental issues. 

Enquiries: Financial Times 

Tel: 081-673 9000 ft* 061-673 1335 

LONDON 


NOVEMBER 15 & 16 
Strategies for Hlgh-lnvolvement 
Leadership 

Controlling i *»^ concentrating on high 
pay-off activities; creating partnerships; 
strengthening trust; motivating and 
enhancing team performance; and 
stimulating innovation- These are some of 
the iones jnriiuteA in tins interactive briefing 
designed to train executives to operate 
effectively to empowered o tyn i i a ri ona. 
Coutacc Rachel Tbomas/Soiah WOfians 
IBC Technical Services 
Tefc 071 S37 4383 Roc 071 631 3214 
ASHDOWN PARK 

NOVEMBER 15/16 
Practical Dealing course - 
Honey Market 

Training in traditional Cash market dealing 
and short term derivatives (Futures and 
FRAs) - risk identification and evaluation, 
product pricing, position management - 
with opportunities to test theories Ecann to 
dealing role-play and other practical 
exercises. For Corporate treasury 
personnel, bank dealers, marketing and 
support staff. £480.00 + VAT. 

Lywood David International Ltd. 

Td: 0959 563820 Fbx: 0959 665821 
LONDON 

NOVEMBER 15-16 
Business Performance 

Measurement: 

Transforming corporate performance by 
measuring and managing the driven of 
future profitability. This two-day 
conference etplorea the relevance and 
practicability of developing new 'corporate 
daihboanh”, which indode doh-GubcoI 
indicators, such os customer satisfaction, 
quality aod benchmarking. 

Ounce R i i cl l* I f HHF 

Tel: 081-543 6565 Fax: 081-544 9030 

LONDON 

NOVEMBER 15-17 
Public Sector Purchasing 

Buying into the furore. Six conference 
sessions a day over three days to update 
public Mvt of RMi t i g a ro on d evd o ^iueitt a aad 
banes to fwblic sector purchasing, todudtog 
Electronic Tracking. Co -sponsored by 
Touche Ross. Free entry on ptaeg g tra o on to 
public sector emptoyeet. 

Contact: Lucy Rouse, Gov ernm e n t Group 
Tel: <771 3829191 

LONDON 

NOVEMBER 16 

Brazfi: Prospects for trade and 

Investment 

A one day seminar designed to give an 
overview of key cultural institutional, 
investment and economic issues 
teTTOuoding trade with Brazil. Supported 
by the Banco do Brasil, UK Embassy of 
Brazil and DTL 

CmuactManagemertDcvdopiraatfDtvisian 
Tel: 0524 594013 Fax: 0524 381454 

LANCASTER 

NOVEMBER 16/17 ' 

The Digital Information Revolution 

Market Opportunities for Multimedia 
created by tbc Superhighway 
A major high-level, interactive 
industn’^Govcnwient Conference, providing 
the first opportunity for senior 
representatives from commerce and 
industry to address the key issues with 
Government panaopation to an open forum. 
Contact: Julia Moulton. Status Meetings 
Tel: 01730 266544 

LONDON 


NOVEMBER 17 
Kenya 

CBl conference pins workshops, in 
sssociation with Samfstd Chartered Bank; 
considers current developments, 
opportunities and future prospects for 
investors aod e rpcmcTS . Keynote address by 
President Daniel T map Moi and sp e ahrm 
from the high powered delegation of 

t rniiai-Tf fid c^fiinr flfBriah 

Contact: Nicola Martin, CBI Conferences 

Tel: 071 3797400 

24 far fe*on-demmd: 071 240 1248 

LONDON 

NOVEMBER 21 & 22 
ThW Control Banking Qorierence 
Features fa wn (bo central 

banks of China, India, France, Hungary, 

F ifllji iri Antfnfi P^hfiHI VflKBldft The 

Bank of Englsnd. EMI and IMF. Spoosots 
The World Gold Ooonca, Badsys Prectota 
Metals and Ctifibcd Chance. 

Details: Or yfo tinn Ltd 

Tet 0225 466744 Fsc 0225 442903 

LONDON 

NOVEMBER 21-22 
Business Procsss 
Re-engineering (BPR) 

Conttoatog series or semiom fix managprs 
c ha rged with designing erut Implementing 
BPR initiatives. Presented by leading US 
practitioner aod BPR author. Proven imw-to- 

dO-lt’ lmpl-iti^iw apfti| i H'TWIBIfil with 

case sttx&smd workshops. Gomse book also 
available. Over 50 oqpusatiom in 6 k privme 
& pubbcscpcu have already attended. 
CcMtacr. Richard Parris, Vertical Systems 
Intercede Lid 

Tel: *44^55-250266 (24 hours) 

24 hr Fax -co-demand 071 240 1248 

UNIVERSITY OF WARWICK 

NOVEMBER 22 

PoWcal Risk Outlook for the OS 

Industry in 1996 

The oil industry has become well 
experienced to evaluating die risks it faces 
to Its business, particularly when planning 
major new investment. Yet the greatest 
uncertainties which affect the security of 
supply and price and which may 
fundamentally change the economics of 
new projects are political risks. 

Contact: 71 m Institute of Petroleum, 
C o nfe re nce Department 
Td: 071 467 7100 

LONDON 

NOVEMBER 22-23 
Logistics Update *94 

S Sessions - ImSviitaaBy Bookable 
Lo&titio Overview; Warchanc Automation ; 
Environment; Third ftny Distribution; Low 
Cost Software; Coding & Labdhoe Order 
Picking; Security & Disaster Recovery. 
E n q ui ries : Conference Manager, NMHC Ltd 
Tel: 01234 750323 Fax: 01 234 752040 

CRANFIELD UNIVERSITY 

NOVEMBER 23 
Negotiation and Change - 
Employee IMadons in the 
Regulated Industries 

His CR] enniiM the 

employment structures, pay Incentives and 
fleibiJity tia» privatisation and compares 
the national with international 
perspectives. Speakers from the CBl, TUC, 
GM8. Mercury Communications and 
Eastern Electricity. Cost £299 + VAT. 
Contact Leigh Sykes, CRI 
Tefc 071 895 8823 Fax: 071 895 8825 

LONDON 


WeVe famous for our facilities 

Many renowned organisations choose 
the BIG for co n ferences and 
eritibUons. These stqxib, purpose 
built fbdlirje5 and friendly bdpful staff 
ensure your function runs smoothly 
and successfully - Ideal tor up to 4000 


Get the /acts woec —there's much rmrdo ^ 
more to this ttmrivaOed bocatkm. 

Conferences • Exhibitions • Seminars ■ Meetings 


NOVEMBER 23 
The Private Finance Initiative: 
The Latest Opportunities for 
the Private Sector 

Aoue day co n fe re nce. Speakers include 11 
Government Ministers (Messrs DoneU, 
Gummer. Long, Redwood, Eggar. Forsyth, 
Forth. Freeman. Watia. Young and 
Sackville); senior industrialists and 
specialist advtsm. 

Co nwvt: rvy » rte .fr . nir . -a 

Tefc 0276 856966 Fnc CC76 8S6566 

LONDON 

NOVEMBER 23-24 
Commercial Parallel Processing 
Experiences and Practice 
Speakers from Cbsrcfaii! Insurance, WH 
Smith. Mercury Communications, and 
Humberside County Council amongst 
other* will discuss the bone fits and their 
experiences of this significant tec hn o lo gy, 
which allows scalable low cost computers 
to be expandable to very high pcribnnaoce 
to tm office environment. 

Ctoamc Ktafe Pads. raCTetteacal Sendees la) 
Tel: 071 6374383 Fox: 071 631 3214 

LONDON 

NOVEMBER 24 

CnNBIkattingBiaVHoninlDRBaBy 

At this conference, tevttog na mes from the 
UK oil industry and Government will 
emphasise the importance of working 
together to achieve the cost redaction 
initiatives. Examples of what has already 
been achieved and ease histories covering 
new North Sea projects wiU be covered. 

Tel 0224 212626 

ABERDEEN 

NOVEMBER 24-25 
Protection & Exploitation of 
Intellectual Property in Russia, 
FSU, Eastern & Central Europe 

Comprehensive review of developing 
fegalition. protection of rights, patent, hade 
mark, copyright A larmrirtg tomes. Special 
focus on Technology Transfer. Speakers 
include lawyers & representatives (torn 
industry and ripr ri rnrcd practitioners bum 
throughout the regno. INTERPDRUM 
Tel: 444 (0)71 386 9322 
Fox: +44 {0} 71 381 8914 

LONDON 

NOVEMBER 24/25 
FT Manchester Postgraduate Fafr 

Tin to the fust postgrattoatc fair to be held 
in Manchester. This fair will provide 
exhibitors with a unique opportunity to 
attract the highest calibre of students to 
postgraduate c ours es. Booting deadline fee 
exhibitors - October 21. 

Contact: Kay Day at Manchester 
Tel! 061 275 3952 

MANCHESTER 


NOVEMBER 24 &2S 
Offshore Trust A dtidnfaba florV 
OThhore Thists & Tnnfeee 
I PC have arranged two one-day 
conferences on related aspects of the 
offshore world, which compliment each 
caber perfectly, hot winch can be a nmdcri 
separately if desired- Further derails from 
International Professional Conferences Ud 
Tel: 061 445 8623 

JERSEY 

NOVEMBER 28-29 
Global Emerging Markets 
Investment Management 

Major International con fe rence on global 
emerging debt and equity looking at 
CIS. Eastern Europe, Africa, the 
Mediterranean Rim; Asian and Indian 
Subcontinent, Latin America and the 
Cirribcmn. Programme designed for 
imcroational portfolio invcMon and amet 

Ctamact: Alban E%ai: Dow Janes Tfckme Lsd 
Tel: 071 832 9532 Fax: 071 353 2791 

LONDON 

NOVEMBER 28 &29 
City Intensive Seminar 
Sponsored by THE CORPORATION OF 
LONDON and KPMG. this briefing covers 
the structure, markets, flow of funds, 
regulation and world position of the City. 
Designed for recent entrants, corporate 
finance and treasury staff and overseas 
financial executives. 

Contact: CltyfofumLtd 

Tel: 0225 466744 fix: 0225 442903 

LONDON 

NOVEMBER 29 & 30 
Positive Management of 
Workforce Restructuring 
Seminar and Workshop. There it oO easy 
solution to the problems of workforce 
r est ru ct urin g. But ma nage d with skffl, the 
Impact on the company and those who 
maw leave can be massivrty reduced. This 
workshop is designed to dhrurate through 
practical case study material bow to 
m«n«g r [esoncBiring positively. 

Contact Rachel Thomas/Sarah Wi] Haras 

IBC Technical Services 

Tet 071 637 4383 ftc 071 6313214 

LONDON 

NOVEMBER 29 &30 
Positive Management of 
W or kf o rce Restructuring 
Seminar and Workshop. There is no easy 
solution to the problems of workforce 
restmetnrtag. Bra managed with akiU. the 
impact on the company and those who 
mirt> leave cm be massiveiy reduced. This 
vrodedmp is designed to fllns t ra tc through 
practical case study material how to 
wftwgp r esane nntag praitfuely. 

Contact: Rachel Tbmnaatearah Wllliuns 

tBCTeduricaJ Services 

Tet 071 637 4383 Fax: CT71 631 3214 

LONDON 


NOVEMBER 29-30 
Ma naging Co rporate 
Transformation: 

The UK's premier event on pluming, 
im TiiRf yn t j i ^ tad aB a hhg ot ynigai ioBil 
and cultural change. This two-day 
conference todudes frank disensskm of 
why so may initiatives fail aod explores 
p roven methods for achieving critical txiy- 
in and support for new organisation 
structures sod working 
CoatacL BoaiDesfi imoJHgcnco 
TcL 081-543 6565 Fix: 081-544 9020 

LONDON 

DECEMBER 1 
HemBtionallsaBon: Power & 
Energy Services. The Business 
Opport u nBesforUKC U i iqi e r le t - 

Key speakers from industry and 
commerce, wiD outline current and future 
strategies for maximising the potential of 
tbe world indnsirial power market. 

Details from: Judirfa Mackenzie, The 
Institute of Energy. 18 Devonshire Street, 
London WIN 2AU 

Teh 0171 580 0006 ftx: 0171 580 4420 

LONDON 

DECEMBER 1 

Europa and the Arab World - 
"Breaking The Barriers -New 

I |H|| . !■! ft. Oa mMm 

ro n o c a a Dusaiosra upponunxiQa 

A one-day conference supported by the 
League of Arab States and CAABU 
involving major European and Arab 
figures. Conference todudes s European 
grants workshop. 

Full fWfeilf fro® MEC C O fl fr rf tl t w , f 

Tefc 071 934 2980 ftsrOTl 934 2991 
LONDON 

DECEMBER 2 

Derivatives - The New Frontier 
of Tax Planning 

(fac uuubci of new psoducts 

and wnnyeft ooniipg omo tbc this 

o aafc i coce will hr lp you whether year 

fthoakl be using d e rivati ves and if 
so, how you can evaluate the worth of the 
different products on offer. Learn how 
derivatives can be need as part of your 

Contact Vicki GoCBn, IBC Legal Studies 

and Services Limited 

Tel: 071 637 4383 ftx: 071 631 3214 

LONDON 

DECEMBER 5-6 
Introducing, Managing and 
Supporting Flexible Woridng 

Teleworking. Information Technology 
Ardntreftxes, Mna^g the HexUs Woddrane 
Speakers from organisations including 
National Association of Teleworkers, 

Roys! Moll, BTsod National Westminster 
Bank will draw together the essential 
elements of IT, Human Resources and 

Operations Management required to 
implement and operate a successful 
flenbie electronic orgamatiom. 

Cnmrr Untie Park. IBCTectoaJ Services Ld 
Td: 071 6374383 Far 071 631 3214 
LONDON 

DECEMBER 7 

Howto Win Competitive Pnopo sa ls 

Competition is totmtifying. Tbe pressure » 
perform to increasingly Ugh Sudanis 
beings with tbo proposals process. TWs one- 
day conference will ask senior baying 
speriullsts to outline titdr pmpassia {xeeessL 
the criteria used for the selection of 
supplies and case study examples of recent 
high value proposals selection processes. 
Director Conferences 
Tet 071 73G 0022 

LONDON 


DECEMBER 7-S 
Succeeding wit h Team s: 

^ organisa^'An 

Intrnwtwnal two-dsy coti ft atajcc specilaany 


Contact: Business InreOtocncc 
Tel: 081-543 6565 Fhs 081-544 9020 

LONDON 

DECEMBER 8 
Dtopute ResoMkn in the 
Interna ti onal OB and Gas Industries 

This conference will consider recent 
interest within the international oil and gas 
industries in dispute resolution and 
arbitration in respect both of disputes 
within the industry snd of ewmni «t i « q ' n ti~ r 
which affea the industry, such as those 
regarding t er rit o r ia l jur is d i ctio n . 

Contact: The Institute of Petroleum, 
^stoenrej|^Miiieat 

LONDON 

DECEMBER 14&15 
tofcnna i on Sy stems f bi Loamtng 

Conference and Interactive Wotkshop 
Through practical case studies, this 
conference will explore how yonr 
information management systems can 
work to line with a Learning Organisation 
to drive major bostoess improvement. This 
event will focus an how to harness tbe 
collective knowledge of an organisation 
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IBC Technical Servioes Limited 
TO: 071 6374383 Fax: 071 631 3214 

LONDON 


EXHIBITION 


MARCH 1-3 

Asian Companies EXPO 

This entirely new concept for the Bw-nw.i 
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Contact Mr M AlharThhlr, Pakistan Hath 

On matorto u G 

Tel: 071 235 2044 Ext 2199 
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LONDON 


INTERNATIONAL 


NOVEMBER 8-9 
European Union Aid Tor 
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Business Oppontmitia; to EC external aid 
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PHAfeE&DPP. TA^MED, XiIaIS 
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200 page EUROATD GUIDE on EU 
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NOVEMBER 23 
Advanced Software Solutions 
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Seminar for business and technical 
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software in the transportation and 
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Contact Ptribp Kay. tel: +33 1 6019 3738 
A1 Roth, tel: +44 2S3 358081 

PARIS 

NOVEMBER 23 & 24 
FT - Doing Business with Spain 
This annual conference, arranged with 
Expansion and Actualidad Ecomknica. will 
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NOVEMBER 29 - DECEMBER 1 
10th World Airports Conference 

This conference win consider the two big 
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DECEMBER 5-6 
Competitive Intelligence 

Seminar for managers who want to learn 
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JTuwpal lecturers are former professional 
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‘i 






FINANCIAL TIMES MON DAY OCTOBER 3 1 1994 


Melfior Banco Para 
vlercados Emergentes 





INgJIs) BANK 

J fc L 1t.ll |.\v M. II. :»■*.»<* 


MARKETS 


THIS WEEK 


Best Emerging 
Markets Bank 

•Y> Is,' 


ING J&BANK 


i , if > 






. . ■ .:tr «■ 



The average 
central banker 
has been pro* 
gr a mined to 
warn about the 
threat of infla- 
tion regardless 
of economic 
circumstance. 
Something is clearly up, then, 
when a well-known anti-infla- 
tionary hawk like Mr Eddie 
George. Governor of the Bank 
of England, argues that the 
markets are too pessimistic 
about the inflationary pros- 
pect. 

Cynics may conclude that 
the need to talk his bond book 
is temporarily taking prece- 
dence over Mr George's disin- 
flationary zeal. Current high 
real rates of interest are pro- 
hibitive for government bor- 
rowers everywhere. So who is 
right: the governor or the mar- 
kets? And why are bond mar- 
kets suddenly making central 
hankers look like monetary 
doves? 

In the end the question turns 
on the nature of default risk. 
The markets are saying that 
current levels of government 
debt are unlikely to be serviced 
in full, especially in what 
economist David Roche of Inde- 
pendent Strategy likes to call 
the Southern Comfort coun- 
tries - a category in which he 
includes Sweden and Finland, 
and on occasion the UK, 


| Sleaze can 

have political 
costs, but 
what about 
the economic 
side of the 
equation? In 
the past, econ- 
omists usually 
assumed cor- 
ruption was an economic 
“bad 1 *, and left the more 
detailed theories to their col- 
leagues in the political science 
department. Yet analysis of 
economies with very different 
styles of political cro ok edn e ss 
has made them think a gain 

Drawing on their experience 
helping to implement reforms 
in formerly communist coun- 
tries, two Harvard economists. 
Andrei Shfeifer and Robert 
Vishny. have come to the con- 
clusion that being able to 
bribe politicians is not always 
a bad thing. As always, it 
depends on the options. 

One way to see bribes in a 
more positive light is to view 
them as a furtive form of taxa- 
tion. Instead of paying for 
high public sector wages 
through general taxation, peo- 
ple in corrupt countries end 
up footing the bill more 
directly, bribing officials in 
return for passports, import 
licences, or other forms of 
patronage. 

At best, this sort of bribe is 
like a “hypothecated 1 *, or ear- 
marked, tax. The official is 
performing a service - 
stamping a passport with the 
correct visa, for example - 
and the bribe allows the user 
of the service to pay for some 
of the labour costs directly. In 
this ideal case, taxpayers who 
never go abroad might even 
benefit because corrupt cus- 
toms nffltSflig should insist on 
lower wages than honest ones. 

When bureaucratic and 
political interference is wide- 
spread, it Is more difficult to 
see bribes as an extra tax for 
public goods. But in these cir- 
cumstances, paying officials 
not to do their job Is better 
than paying them to do it 
When individuals and busi- 
nessmen face a web of cum- 
bersome rules and regula- 
tions, the economy could end 
up more productive if bribes 


Global Investor / John Plender 


Risks of the Southern Comfort zone 


along with Italy, Spain, 
Greece and Portugal (see 
accompanying rake’s progress- 
type chart). 

Others whose debt-to-GDP 
ratios would qualify them for 
club membership include Can- 
ada and Belgium. 

The dismal calculus of debt 
is that real rates of interest are 
not only much higher than 
potential GDP growth rates in 
these countries; the gap Is now 
so wide that it is difficult even 
for countries with strong gov- 
ernments to run a primary 
budget surplus (excluding 
interest) big enough to stop the 
debt increasing. 

Yet the markets dearly do 
not expect a formal default. 
Most of the Southern Comfort 
countries with substantial for- 
eign currency denominated 
debts enjoy much lower rates 
of interest on the foreign com- 
ponent of the debt stock than 
on their domestic IOUs. It fol- 
lows that investors are 
demanding an increased risk 
premium against the possibil- 
ity of an internal default, 
whereby governments mone- 


Uving wHh debt 


1994 

Required 

Reqidnad 

1994 

primary 

bai/GOP 

Effiggp 

fiscal 

j»d|/QpP 

gown 

debt/ 

5j0 

35 

1.7 

1465 

05 

S5 

-4.6 

1185 

-2.0 

2JS 

-4.5 

84.2 

-7 JO 

5.0 

*125 

925 


Required turnaround In gmeral government primary budget 
la stabilise debt/GDP „ , _ „ . 


Belgium 5 j0 83 

Italy 0.9 5.5 

Spain - 2.0 Z5 

Sweden -72_ 5.0 _ _ -1 

European go vernme n t debt as % of GDP 

O Highly indebted group ■ Core couitries 

1 M^trtaMcdt«ton6096 of GOP 
80 H 1 1 — 


1080 

Sauce: Mepream Smgy 


tise debt by borrowing from 
the domestic banking system - 
the modem equivalent of print- 
ing money. 

Whether the markets are 
light to assume that the for- 
eign debt will still be serviced 
is another matter. The conse- 
quence of internal default 
through inflation is likely to be 
an overvalued real exchange 
rate, followed by a devaluation 


Economics Notebook 

An economics 
of corruption 



prevent pointless restrictions 
from being enforced. 

In the real world, of course, 
the effects of corruption will 
rarely be so benign: the my 
fact that bribes must be kept 
secret will make them less 
efficient than a more transpar- 
ent revenue-raising system. 
Unless the “going rate” for a 
given service is very well 
known, the additional uncer- 
tainty will severely under- 
mine the prospects for invest- 
ment and growth. 

But just as there are better 
and worse ways to collect 
taxes, some systems of corrup- 
tion will be a lot more harm- 
ful to the economy than oth- 
ers. Predictably, the two 
economists argue that the 
costs will depend on whether 
the market for political 
favours is competitive, and 
how well it is regulated. 

When there are plenty of 
officials in a position to pro- 
vide a particular good, bribes 
will be kept down because the 
public can always seek a 
lower price elsewhere. 

Corruption is more of a 
problem when officials have a 


degree of monopoly power: 
awarding import licences in a 
particular sector, for example. 
This could mean a very high 
“tax” on the companies con- 
cerned, leading to artificially 
high prices. Nevertheless, it 
will rarely he in the official’s 
interest to put all his custom- 
ers out of business. 

The real trouble comes 
when doing business in a 
given market involves buying 
off not one, but dozens of indi- 
vidual monopolists, each ask- 
ing to be paid off for providing 
(or forgetting about) a particu- 
lar licence or permit If there 
is nothing regulating who can 
ask for bribes and how much 
they can ask, firms may sim- 
ply move abroad if they can, 
or else give up doing business 
altogether. 

Unco-ordinated, bureau- 
cratic fiefdoms will tend to 
corrupt themselves out of a 
living: the economy becomes 
so burdened with the cost of 
corruption that It simply 
ceases to function. The 
monopolists need to coordi- 
nate their activities, and for 
that there must be a single 


source of power to enforce the 
system. 

According to the authors, 
tins explains why some coun- 
tries have managed to cope 
with high levels of corruption 
better than others. Where 
there is one mafia or political 
party effectively controlling 
the system, only “insiders” 
can demand bribes, and they 
will be penalised if they 
demand more than the going 
rata This was probably the 
case in Soviet Russia. Now, 
however, the country has the 
most damaging combination 
of all: thousands of people 
with an instinct for working 
the system, and almost no 
central authority capable of 
regulating their actions. 

Whether corruption is 
viewed as a tax or a way of 
reducing regulation, neither 
argument suggests that cor- 
ruption is optimal Indeed, in 
the latter case, many silly reg- 
ulations may be imposed by 
officials, precisely in order to 
earn money taking bribes to 
ignore them. The bribes may 
lessen the negative effects of 
these rules, but it would obvi- 
ously be better not to have 
them in the first place. 

More generally,' companies 
that specialise in currying 
political favour will devote 
less time and resources to 
making a better product. If 
firms would otherwise be able 
to compete on their merits, 
widespread corruption is 
clearly worse for the economy. 

This is consistent with vari- 
ous studies suggesting that 
corrupt economies tend to 
have low rates of investment 
and growth. As Profs Shleifer 
and Vishny note; “corruption 
goes hand in hand with politi- 
cal control. The empirical 
result that corruption is bad 
for growth simply reflects the 
fact that heavy government 
regulation is bad for growth.” 
As ever, competition between 
politicians will be the best 
way to cure the system. 

Stephanie Flanders 

“see “ Corruption ", Quarterly 
Journal of Economics, 
Autumn 1983 and “Politicians 
and Firms", Harvard Mhneo, 
July 1994. 


FT -ACTUARIES WORLD INDICES 


Jointly oomptad by The Rnwtotol TVm» IXL. Goldman. Sacha & Cn. end NrtWqat Saartfes l*t tn 

NATIONAL AND 

REGIONAL MARKETS ~ FfVOVf OCTOBER 2B 1W4 ‘ — 

Rflim tn parentheses US %ehg Round 

VKWHUrtMr at fnn Dolar aim Stef** Yen DM 

of stock Ms* SJ/iava mdB* Indw Index 31/12/93 Yield 


3.1 157X0 105.80 135.07 154.08 -88 3 AD 

IMS. OH HUM 14228 142-15 -14.0 1.13 


AwaraaaCSS) 172.12 3.1 15720 105.80 136.07 154.08 -88 

Austria fIGJ 187.32 -2.0 16629 WM M228 142.16 -148 

Belgium (35) 189.17 4.0 154J50 104.08 132.75 128.50 -10.7 

Cmade(103) 136-58 0.8 124.73 84^3 107-17 13150 2.6 

Dmn*k(33) 25229 2.1 230.41 15623 187.88 2Q2J» -11 J 

Roland (24) „ 200.13 62.4 182.76 123.T2 1S7.03 19338 »,1 


181.32 -a.0 le&se was i*2^a 142.1s -14* t.15 

40 154J0 104^8 132.75 1»S0 -10.7 428 

13158 18 124.73 8403 107.17 13150 3.6 254 

25259 11 23CX41 156X23 1B7.88 20253 -115 1.47 


ZSSgSf. mS iawn ra 11253 -11.4 i.b« 

HaSKMfllU 380.77 -2 22 347.75 23458 2M51 37726 -225 116 

Ireland n-t) 11 20858 125 190.77 12852 183*2 18X81 -0J 

ta*p8J ,_7854 T5.1 72.10 4857 81.9S 91.01 18 1.72 

Jepan(46B) 18156 84.1 1475S 90.40 12u78 «U0 M 0.77 

Meta*tat&7) ^.-647.46 -75 489.98 33884 429.61 53828 -125 158 

Mexico ( 18) 212847 -105 194254 130035 f8W-» 

Neawtandfia) 52052 10.7 20152 13S» 17W» "W* ?£} 

New Zealand (14) 7801 115 69« 4877 59.® 

NavreypgJ 204.73 180 18897 125.96 18055 13257 -05 151 

Singapore (44) 59886 80 38254 24454 31151 389.18 -1| 157 

SorthA**a«) 33457 282 30866 20656 2B254 29433 175 2J7 

Spam (38) 141,87 15 12BJ56 8759 11153 ^5.03 105 45Z 

Srettaps) 24051 2SL4 219.47 14755 18858 2S8« 8S 157 

art«rf^(47) 16250 1.4 14823 «U» 127-M 1»« -JJ 

asa*— »— as -s is as as j g_a. 

HSMtmriiSI £ SIS SS «■ SS « g 

3 55 SS 55 5K -S s 

North America (Biq — 189.85 15 17358 11851 148S8 1M5S 15 

Europe Ex. UK 003) 184.38 4.0 1404® M-9B ^ 

PactftaE*. Japan »79) 28155 -5.7 238.14 161.11 20&« 2^.8 181 zn 

Wbri3Bc.US(1«4) 173.89 105 15881 108M 1»^ ]®JS JJ 207 

Jfadd&LlKtlMS) 17889 80 1«i-W 0890 ^ 

Wnrtd Ex. So. At (2Q9Q 17850 7.1 162-»* iSfiS 3l4 889 

WotW Ex. Japm Q681) 180.78 1.6 17452 11757 14 MB — 

UreWodd Index <21491 —.17951 75 163.75 11832 14Q.70 1*954 -QA 2f_ 


aermanjr (Sfl Z1 14352 


r:3msi -3.1 15872 10451 13350 13819 -165 3.14 


coi8eietion wKh the InsttuM erf Actuaries and Ore fiaoutty of Actuaries 

THURSDAY OCTO BE R 87 1994 DOLLAR INDEX — 

US Pont Local Year 

DaBer Storing Yen DM Curency 52 week 52 week ago 

todex index Index indent Index High Low joppro* 

17810 15870 10802 134.74 13450 100.1S 14958 1585 

181.8S 184.62 11158 141.55 141^40 19889 167.46 177.1 

169.73 1535S 10356 132 .11 128. ST 177.04 14953 1500 

13826 1235S 6846 10808 13806 14551 12854 1325 

235.74 23152 19864 19956 20848 27878 23027 238S 

201.41 18253 12356 15877 182.10 201^1 11653 1284 

16810 152.17 102.98 13054 136.12 185.37 13054 109^ 

14258 12957 8753 11096 11058 150.40 12857 1325 

377.73 34155 23155 29452 374.7S 50856 34159 3605 

20851 18857 12759 162.14 131.92 21860 171.86 1745 

77.07 6877 47-20 5959 8756 97-78 57.88 685 

16254 14658 90,43 12856 9843 17810 12454 1484 

S42.71 49150 332A0 422.44 53350 82153 43871 470.7 

211866 191 756 129755 164812 799953 264753 169823 1B48B 

21814 197.48 133.01 189.80 167.09 22032 1B7J71 195.0 

75*44 8829 4651 5872 6S50 7759 5822 685 

20551 185.77 12S59 15973 18156 211.74 16&52 1805 


397.43 

359.78 

24342 

30955 

26952 

39801 

294.66 

3Z255 

33839 

304.97 

20834 

262.22 

29843 

34250 

202.72 

212.68 

14090 

127.46 

5824 

109-58 

152.79 

155.70 

12888 

14251 

24254 

21958 

14843 

18864 

25459 

24254 

17883 

20X83 

16158 

14800 

9878 

12864 

125.09 

17856 

14864 

14876 

201-72 

182.61 

12355 

167.02 

18251 

21456 

181.11 

191.5< 

190.13 

172-12 

11845 

14759 

190.13 

19804 

17895 

19052 


vweu LA. U 1 (IQjqf I 

Wodd Ex. UK (1945) 17659 

Wortd Ex. So. Al (209(8 17850 

Wo*W Ex. Japan Q681) 180.78 


T^Worid Index (2149) .^.17951 75 163.78 110 32 14070 1<oa4 -u 

'Owrtrt.Uw Francto mwa um, SoUnm. Seen* 4 «nd aw deori; 

sssssss.’si’s sats^js: iF1 s 

"ww* ID tamgpr CBfp. (U34I OTd 8wnft9n» Cm«4 » emluma Oaw W 


178.12 16155 10810 13884 14759 18050 15885 16855 

MiTftr DM 30. 1W8 - 13BLK |U3 5 hda}, 1144S Pornd BlM and 12322 (Unit 
K SSL (V V P n. QanmlB Owen a to (tank Banqu»<V v P re Nrtewl 


Total return In local currency to 27/10/94 

-6!*«liyiMW[MWI 


Cash 

Week 

Month 

Year 

us 

0.09 

842 

3-56 

Jmn c 

0.04 

0.20 

2.31 

tomanr 

809 

0.41 

5.63 

Ffraoce 

810 

845 

5.81 

«■&£_ 

0,16 

869 

825 

UK 

0.11 

846 

5.41 

Bonds 3-5 yresr 






Week 

-8 JO 

-802 

-027 

-0.35 

0.74 

-0.4S 

Month 

-0.47 

-864 

849 

827 

1.06 

0.92 

Year 

-2.87 

-0.60 

1.02 

-056 

125 

-843 

Bonds 7-10 veer 






Weak 

-029 

-0.03 

-1.11 

-1.15 

129 

-056 

Month 

Year 

-0.86 

-758 

-1.14 

-150 

0.47 

-4.08 

-848 

-7.66 

0.60 

-5.44 

158 

-4.15 

Equities 







Weak 

-82 

-72 

-25 

- 0.7 

- 1.6 

-1.1 

Month 

1.1 

0.7 

-22 

-25 

-188 

0.9 

Year 

3.3 

-3J2 

-2.3 

-185 

82 

on 


Sauce; Cash 8 Bonds - Letnan BraHNre. 

The FTAduariaa World tadoe* ere JoMly owned by The 
Goldman Sachs A Ca. end MstWoat SeoeUM timed. 


EquMw-e NafWW SecutWes. 
RnancW Umn Lfemed. 


that will increase the real cost 
in domestic currency of servic- 
ing the foreign investors' 
bonds. 

True, export earnings will 
also rise in response to the 
exchange rate change. But the 
relevant external debt is owed 
by the government, not the 
corporate sector. The more 
important question is whether, 
in an inflation-induced politi- 


cal and economic crisis, the 
reduced cost of servicing 
domestic debt will leave room 
to look after the external 
debtors. The experience of the 
Latin American debt crisis 
offers no encouragement on 
this score. And where coun- 
tries are running a primary 
budget deficit, such as in 
Sweden and Spain (see table), 
holders of foreign currency 


COMMODITIES* 


debt are much more heavily at 
risk than the market recog- 
nises. 

What would happen if it 
came to the crunch? An obvi- 
ous model would he the period 
under the last Labour govern- 
ment when fiscal rigour was 
Imposed on the UK with a little 
arm-twisting from the Interna- 
tional Monetary Fund. But 
there was also help, at that 




time, from global inflation and 
negative real rates of interest 
on Britain's external debt No 
such help will be forthcoming 
in a world choc-a-bloc with 
bond market vigilantes. Nor 
will a government that is 
running a primary budget sur- 
plus necessarily feel the need 
to call on the services of the 
IMF. 

Default need not happen, of 
course. Both Ireland and Den- 
mark have shown that debt 
stabilisation through fiscal 
adjustment is possible. With 
high real rates, the benefits 
from fiscal discipline are stri- 
king and immediate. Once mar- 
kets detect signs of political 
will the virtuous circle of fall- 
ing rates, lower debt service, 
reduced budget deficits and 
shrinking risk premia can be 
quickly established. 

The snag is the scale of the 
problem. Consider Sweden, 
where David Roche estimates 
that it would take a monumen- 
tal fiscal adjustment of 12 per 
cent of GDP just to start stabi- 
lising the public debt. Yet Swe- 
den has the highest level of 

!2F >TT-V'' 


public spending in the devel- 
oped world - over TO per cent 
of GDP last year - for good 
reason: the people like their 
welfare state. Yet they also feel 
over-taxed. 

The message is that judge- 
ments about bond yields in ini- 
dividual countries are more 
than ever to do with politics. 
And it seems unlikely that the 
more general problem of high 
real rates will go away quickly, 
since the pressure on capital 
markets remains formidable. 
While the level of savings in 
the OECD is significantly 
lower than in the period before 
1974. debt has been rising inex- 
orably. The OECD projects that 
between 197S and the end of 
this year net public sector debt 
will have risen from 21 per 
cent to 42 per cent of GDP. 

That suggests, pace the cen- 
tral bankers, that there could 
indeed be a serious inflation- 
ary problem. The markets can- 
not convince themselves that 
electorates are prepared to 
meet the ever-soaring bill for 
the welfare state. If the vigilan- 
tes are nodding, it is in being 
over-optimistic about the servi- 
cing of foreign currency 
indebtedness. But sooner or 
later the Southern Comfort 
zone will deliver a default. The 
more interesting question is 
whether the UK will be a vic- 
tim or beneficiary of the result- 
ing flight to quality. 


Metal exchange moves house 


With many of its contract 
prices at or near recent highs 
and volumes booming in most 
of its markets, the London 
Metal Excha n g e could hardly 
have chosen a more auspicious 
moment for today's move to 
bigger premises. 

At about 26.000 sq ft the pur- 
pose-built premises in Leaden- 
hall Street in the City doubles 
the exchange’s space, allowing 
the provision of expanded tech- 
nological facilities to cope with 
rising trading volumes. 

Total turnover this year is 
expected to grow by between 


20 and 30 per cent from 1993’s 
record of 35.28m lots, taking 
the average daily trading value 
to about $5bn (£3.lbn). 

Traders may have little lei- 
sure to savour their new sur- 
roundings, if last week’s per- 
formance is anything to go by. 
After a hectic five days, all six 
of the LME’s base metals con- 
tracts ended with net gains, 
notably copper, the exchange's 
flagship, which rose by nearly 
4 per cent, and aluminium, up 
42 per cent 

Fears remain that the speed 
of the recent price rises could 


result in sharp corrections for 
“overbought" markets. But the 
bulls wiU have been encour- 
aged by the fact that Friday’s 
bout of end-of-the-week profit- 
taking generally found good 
support not far below ruling 
price levels. 

The LME will meet fresh 
competition from tomorrow, 
when the Shanghai Metals 
Exchange launches standard 
futures for lead. zinc, nickel 
and tin. But there seems no 
reason for concern that its pre- 
eminent position in interna- 
tional metals trading could 


seriously be threatened. 

• Other events this week 
include a three-day conference, 
beginning today in Vancouver, 
Canada, on Latin American 
Mining and. possibly, the pub- 
lication of the keenly-awaited 
official assessment of frost and 
drought damage to the 1995-96 
Brazilian coffee crop. Uncer- 
tainty about this crop and 
weather prospects in coffee- 
growing regions has led to a 
slow-down In trading activity 
at the London Commodity 
Exchange and a substantial 
retracement in contract prices. 


BOOZ- ALLEN & HAMILTON 


“Welcome to the Partnership” 





This year, Booz Allen & Hamilton celebrates 80 years of leadership in management 
consulting. We are pleased to announce the election of 32 new vice presidents. 


W. Tim Blaus ett 
Dallas, Texas 

Ian Buchanan 
Singapore 

Agustin Castano 
Buenos Aires, Argentina 

Leticia Costa 
Sao Paulo, Brazil 

Peter Davis 
New York, New York 

Louis Giliberti 
New York, New York 

James Gingrich 
Sao Paulo, Brazil 

Noel Gordon 
London, England 

Rolf Habbel 
Munich, Germany 

Mark Hansen 
Singapore 

Douglas Hardman 
Cleveland, Ohio 


Rudiger Herald 

Diisseldoif, Germany 

John HofTecker 
Cleveland, Ohio 

David Howe 
New York, New York 

Gil Irwin 

New York, New York 
Raul Katz 

New York, New York 

Timothy Laseter 
Cleveland, Ohio 

Klaus Mattem 
Diisseldoif, Germany 

Matthew McKenna 
New York , New York 

David Osborn 
Sydney, Australia 

Alfred Picarelli 
McLean, Virginia 

Moyses Piuctennik 
Sao Paulo, Brazil 


Wouter Rosingh 
Sao Paulo , Brazil 

Ghassan Salameh 

San Francisco. California 

Allen Schaar 
Dallas, Texas 

Scott Schulmau 
New York, New York 

John Scotch 

McLean, Virginia 

Stephen Simmerman 
New York, New York 

Jeffrey TVickcr 
Neir York, Neiv York 

Donald Vincent 

McLean, Virginia 

Brian Wengenroih 
New York, New York 

Timoihy Wrighi 
London. England 












22 


FINANCIAL TIMES 


MONDAY OCTOBER 31 1994 



Invffltors are expected to focus 


Last Friday's rally, which sent 
the 30-year yield back below 8 
per cent, may not cany 
through into this week. 
Analysts expect that for the 
next month or so a weak 
dollar, renewed upward 
pressure on commodity prices, 
and another tightening of 
monetary policy by the Federal 
Reserve will steadily push 
bond yields up towards 825 per 
cent or 8.5 per cent 

Yields, in fact, may go above 
8 per cent this week, which is 
packed with the sort of data 
that could unnerve investors if 
they contain hints of resurgent 
inflation or unexpectedly 
strong economic growth. 

The October employment 
report, due on Friday, will be 
the highlight. Donaldson, 
Lufkin & Jenrette analysts 
forecast that non-farm payrolls 
will have risen by 230,000 in 
October. Growth above 270,000 
could send bonds tumbling. 

The market will also have to 
absorb the National 
Association of Purchasing 
Management’s index for 


US 

Benchmark yield curve (96)* 

28/MVB4 — * Month ago <=> 



*Afl yMtt are mortal conversion 
Source; Mami Lynch 

October, and September 
personal income, 
manufacturers orders, leading 
economic indicators and single 
famil y home sales. 

If any of these figures are 
stronger than expected, the 
bond yield will probably 
breach 8 per cent again. The 
consensus is that the Fed will 
tighten policy on November 15, 
when its open market 
co mmi ttee meets, by raising 
the Fed funds rate target by 50 
basis points to 525 per cent. 


The central event of the week 
for the gOts market will be 
Wednesday’s monthly meeting 
between Mr Kenneth Clarke, 
the chancellor of the 
exchequer, and Mr Eddie 
George, governor of the Bank 
of England. 

Some analysts think the 
meeting will lead to a further 
rise in base rates. “The 
evidence of continued price 
pressures, falling capacity and 
no dear slowdown in growth 
will be sufficient to prompt the 
governor to request a further 
tightening of policy" believes 
Mr James Barty, senior UK 
economist at Morgan Grenfell. 
He predicts the meeting will 
result in base rates rising to 6 
percent, a quarter of a 
percentage point increase. 

But Mr Ian Shepherdson, UK 
economist at Midland Global 
Markets, thinks the chancellor 
will resist a rate rise. He 
believes Mr Clarke will not 
want to dent consumer 
confidence ahead of the vital 
Christmas shopping season, 
□or will he want to antagonise 


UK 

Benchmark yWd curve (%V 
eanom— Months <= 



*WI ytekh are iraafcot convention 
Sowce: Maofl Lynefl 

voters before what is likely to 
be a fairly austere Budget 
Either way, the market is 
likely to be jittery all week, 
especially as September's base 
rate rise was delayed until the 
Monday after the monthly 
meeting. The Bank's quarterly 
inflationary report, published 
on Tuesday, may give some 
dues as to the governor’s 
thinking; his recent remarks 
have suggested bond markets 
are over-stating the 
inflationary Ureal 


In the current German interest 
rate hiatus, with the 
Bundesbank waiting to see 
what happens on the 
monetary, economic and 
political fronts, the eyes of the 
bond market are fixed on the 
US. 

Although Friday's US data 
proved positive for the 
fjpanrifli markets, concern 
over the timing ' and impact of 
the next US interest rate rise 
remains to the fore. 

The main domestic news last 
week was the easing of west 
German inflation to 23 per 
cent, bringing it closer to the 
central bank's 2 per cent goal, 
and the recommendation by 
the main economic research 
institutes that interest rates 
should not be cut significantly. 
This came in a broadly positive 
report cm the economy, which 
has been expanding with a 
vigour even the Bundesbank 
admit s has come as a surprise. 

This makes it even more 
determined to rein back money 
supply growth to a rata more 
consistent with low inflation. 


Germany 

Benchmark yield cisve (96)* 
38rto®4— Morthago » 



"ABytattsa ni nasfe* eorwrtton ■ 
Source: Menu Lynch 


Until M3 slows down more 
sharply, those who believe 
there is no more scope for the 
Bundesbank to cot interest 
rates in the current cycle will 
be strengthened in their views. 

Even so. some voices still 
argue that another cut hr the 
discount and Lombard rates, 
which have been static since 
May. is probable. For the bond 
market, though, it is the US 
that will mainly determine 
whether yields continue 
moving up. 


on the short-term money 
markets, which will be affected 

by seasonal and technical 

factors this week. 

A substantial rise in fund 
demand from banks, due to 
month-end funding, corporate 
tax payments and the public 
holiday on Thursday, is likely 
to put upward pressure on 
short-term rates. 

The banks are also expected 

to increase fund procurement 

for the year-end, pushing up 
two-month interest rates. 

Over the past few weeks, the 
Bank of Japan has allowed 
short-term rates to rise 
moderately in the face of 
increasing evidence of a 
gradual economic recovery. 

Although it has been forced 
to adopt an easier stance 
because of the yen’s 
appreciation against the dollar, 
economists expect it to allow a 
fur ther rise in short-term rates 
because of the underlying 
economic trends. 

“We expect the BoJ to allow 
a gradual widening of the 


Japan 


Benchmark ytafo curve (%T 
26/10/94 Mcrth ago 



•M yMdB era rnnkot convention 
Scvce; Merrill Lyncn 


spread between the overnight 
call rate and the ODR," says 
DKB International. 

Meanwhile, oversupply 
worries are adding to investor 
cautiousness as corporate 
borrowing on the straight bond 
markets seems set to increase. 
Last week Tokyo Electric 
Power, the leading electric 
utility company, said it would 
issue YlOObn of straight bonds 
in November and corporations 
are also expected to turn to the 
Eurobond markets for funds. 


Capital & Credit 


lb > y»ar b ench ma rk iiprat yiekta 


Moody’s move puts spotlight on Sweden 


The decision by Moody's 
Investors Service to place Swe- 
den's Aa2 foreign currency 
debt rating on review for a pos- 
sible downgrading is likely to 
weigh heavily on the bond 
market when it opens today. 

After rallying sharply last 
week, the rating agency's 
move, prompted by its con- 
cerns over the country’s pub- 
lic-sector deficit, will force 
investors to focus once again 
on Sweden’s debt situation, 
which has troubled the market 
most of the year, causing an 
exodus of foreign participants 
and the withdrawal of leading 
Swedish investors. 

After posting sharp gains 
during the 1993 bond market 
boom, Swedish bonds have suf- 
fered particularly this year, not 
only from the bear market that 
has depressed fixed-income 
markets worldwide, but also 
from problems at home: a 
growing budget deficit and 
political jitters surrounding 
general elections. 

Swedish bonds have been 
further dogged by inflationary 
fears and the spectre of mone- 
tary tightening after the Riks- 
bank raised interest rates on 


August 11 - the first European 
rate increase in the current 
cycle. 

Last week, however, Swe- 
den’s bond market was the 
strongest performer worldwide; 
according to Salomon 
Brothers’ world government 
bond index, Swedish govern- 
ment bonds returned 1.41 per 
cent in the week to Thursday, 
compared with a 035 per cent 
drop in the European bond 
index. Their yield spread over 
German bunds narrowed 
sharply to around 320 basis 
points on Friday from 357 
points a week earlier. 

Bond prices were propelled 
higher last week by a range of 
factors: Monday's bullish bond 
auction result (with each 
tranche snapped up by a single 
buyer), currency strength, and 
increasing hopes that Sweden 
will vote in favour of joining 
the European Union in its ref- 
erendum on November 13. 

The Riksbank's 20-basis- 
point hike in the repo rate to 
7.40 per cent on Thursday fur- 
ther underpinned bonds 
because it was seen to boost 
the central bank’s inflation- 
fighting credibility. 


Lastly, prices were boosted 
by calls from Mr Goran Pers- 
son, the finance minister, for 
larger than forecast govern- 
ment spending cuts: in addi- 
tion to the SKrfJlbn. of budget 
savings promised by the Social 
Democrats during the election 
campaign, he proposed further 
spending cuts of 20 per cent 
over the next four years. 

However, the Moody's rating 
review highlights the risks still 
surrounding Swedish bonds in 
the shape of the continuing 
accumulation of public-sector 
debt 

"Stronger economic growth, 
lower unemployment ami addi- 
tional fiscal restraint expected 
from the recently elected gov- 
ernment suggest that budget 
deficits relative to GDP will 
shrink; nevertheless the 
build-up In public-sector debt 
will continue," the agency 
warned. 

"Moody's review will focus 
on the degree to which policies 
can be forged over the medium 
term to strengthen the public 
sector finances and improve 
the investment climate," it 
stated. 

Some market participants 


were surprised by the timing of 
the gnnnnnrpmpw t “j think 
Moody's may have acted a bit 
prematurely here, especially 
considering that the govern- 
ment hasn’t yet presented the 
details of Its economic plans 
and with the EU referendum 
coming up," said Mr James 
McKay, international econo- 
mist at Kidder Peabody. 

On the other hand, he said, 
Moody’s announcement could 
be welcomed as a warning shot 
to the government, fracing it to 
place fiscal discipline at the 
top of its agenda. Mr Persson is 
due to unveil details of his fis- 
cal plan an Wednesday. 

The EU referendum remains 
another significant risk. In 
spite of Finland’s recent vote 
in favour of EU membership, 
the Swedish yea-sayers have 
held only a slim majority in 
recent opinion polls, amid a 
large pool of undecided voters. 
"If the Swedes vote ‘no’, that 
could undermine the Social 
Democratic leadership,” warns 
one analyst, who says a no' 
vote could cause the Swedish 
yield spread over bunds to bal- 
loon back to more than 400 
basis points. 


Even before the Moody’s 
announcement, Mr Graham 
McDevitt, strategist at Paribas 
Capital Markets, was recom- 
mending switching out of Swe- 
den ahead of the EU referen- 
dum. One strategy would be to 
move totn Danish bonds, while 
more adventurous investors 
should consider a switch into 
Norway, which faces an EU 
referendum on November 28, 
he says. 

According to Mr McDevitt, 
Swedish bonds are moving to 
put bias on a ‘yes’ decision 
while Norwegian bonds have 
70 per cent discounted a 'no' 
vote. “If Sweden does vote for 
EU, Swedish bonds should 
rally but Norwegian bonds 
should out-perform on hopes 
that a ‘yes’ result may now be 
possible in Norway," he says. 

“If Sweden votes ‘no', Swed- 
ish bonds would succumb to 
significant profit-taking from 
long positions built up over the 
past month; this would drag on 
Norwegian bonds, but better 
underlying fundamentals 
should limit the decline" he 
adds. 

Conner Middelmann 



w-.s'-rn.v 


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International loans 


Securuj 


marks a Swedish milestone 


The SKr20bn refinancing 
package announced last week 
by Securum, the state-owned 
Swedish company set up to 
liquidate the failed loans of 
Nordbanken, was big by any 
standards. From a company 
less than two years bid, it was 
spectacular. 

The operation is a milestone 
in Sweden's progress out of the 
crisis that overwhelmed its 
banking sector in 1992. Signifi- 
cant state intervention was 
required to restore confidence. 

“Securum has been the main 
symbol of the Swedish banking 
crisis.” says Mr Anders Nyren. 
the group's chief Bwawrifli offi- 
cer. “For the company to he 
able to refinance itself in the 
international markets so soon 
after it was set up shows the 
progress which has been 
made.” 

Securoza was established in 
early 1993 after taking on 
SKr60bn in failed loans from 
Nordbanken, which collapsed 
into state arms in 1992 as the 
biggest casualty of Sweden's 
banking crisis, it has converted 
bad credits into some SKr4Bm 
worth of assets, which it 
intends to sell off gradually 
over the next 10 years to max- 
imise returns to the taxpayer. 

It has changed from being a 
finance company to an invest- 
ment Industrial and real estate 
holding company. The trans- 
formation was the starting 
point for the refinancing which 
will allow it to pay bade most 


of the loans it has received 
from Nordbanken. 

The package involves an 
international and a domestic 
tranche. Under the interna- 
tional tranche, Chemical Bank 
and Enskilda Corporate will 
arrange a $1.4bn amortising 
five-year syndicated term loan. 
Pricing is Libor plus 25 bads 
points. After a two-year grace 
period, the company expects to 
pay down about half of the 
loan over the following three 
years. At the end of the period, 
the remaining portion will 
either be refinanced or paid 
back using proceeds from asset 
disposals. 

The domestic portion foils 
into two parts, a SKr5bn subor- 
dinated term loan and a 
SKrSbn callable subordinated 
private placement, both run- 
ning ova- 10 years. The arrang- 
ing banks, Enskilda Corporate 
and Nordbanken, are expected 
to provide most of the term 
loan themselves. Terms are Sti- 
bor (Stockholm inter-bank 
offered rate) plus “a few basis 
points” (in practice, less than 
five). 

The private placement com- 
prises a five-year fixed interest 
rate bond. If market conditions 
move against the company 
before the rate is set in a few 
weeks time, it has a back-up 
facility to draw down funds on 
a Stfbor basis. After five years, 
the bond rate will be re-set 

The domestic/intemational 
structure reflects Securum’s 


balance sheet with its 60/40 per 
cent asset split between Swe- 
den and abroad. For the Inter- 
national tranche, a syndicated 
loan was preferred to a bond 
issue because Securum does 
not have a credit rating and a 
bond was considered less flexi- 
ble. 

A crucial element In the 
total package is the backing 
provided by the Swedish state. 
The SKTlObn domestic portion 
of the deal will be formally 
guaranteed by the Kingdom of 
Sweden, which is transferring 
a pledge that underpins Secu- 
rum’s existing Nordbanken 
loan. 

The international t ranche is 
covered by the blanket support 
measures which the govern- 
ment introduced in late 1992 to 
retain confidence in the bank- 
ing sector. 

The state role undoubtedly 
helped Securum obtain com- 
petitive terms, although not to 
the extent that it was consid- 
ered sovereign risk. The terms 
also reflect Securum’s better 
than expected financial perfor- 
mance in the first 18 month* of 
its life and the situation in the 
Swedish market, where the 
banks are flush with cash fol- 
lowing recapitalisation and 
weak loan demand. 

Indeed. Securum believes the 
terms it secured in the domes- 
tic market are at least as 
favourable as if it had stuck 
with Nordbanken, even though 
Nordbanken has provided its 


loan on a cost-of-funds basis. 

Combining the term loan 
and the private placement ele- 
ments, Securum expects to end 
up with a basic interest rate of 
a few basis points below Sti- 
bor. On a worst-case scenario, 
it expects the rate to work out 
at Stibor plus one and half 
basis points. 

If the international tranche 
is included in the calculation, 
the company expects its over- 
all funding costs to be “very 
marginally” higher than they 
are today. 

Initial market reactions to 
the package were positive. “It's 
priced according to the mar ket 
and it's well structured,” said 
one Swedish banking source, 
who believed it would be suc- 
cessful because it gives inter- 
national banks, excluded from 
some recent relationship- 
driven deals, the opportunity 
to get into the Swedish market. 

The deal is strategically 
Important for Securum in sev- 
eral ways: it provides visibility, 
it broadens its borrowing base 
and it allows it to build up 
contacts with a range of inter- 
national lenders. It should also 
assist the government's plans 
to privatise Nordbanken - a 
move expected sometime next 
year - by reducing the bank's 
uncomfortably large exposure 
to a single client. 

Christopher 

Brown-Homes 


NEW INTERNATIONAL BOND ISSUES 


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| US Labor Secretary 





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. *. . 


FINANCIAL TIMES MONDAY OCTOBER 31 199 


EMERGING MARKETS: This Week 


The Emerging Investor / Mark Suzman 

Africa’s stock markets aim high 


As with so itmch else on the 
continent, Africa's stock 
exchanges tend to be bypassed 
by international investors who 
are convinced that anything 
preceded by the word African 
must be a hopeless economic 
basket case. 

Indeed, even among emerg- 
ing markets specialists, few are 
aware of the existence of any 
African stock markets outside 
of South Africa - and even in 
that country genuine interna- 
tional interest is a relatively 
recent occurrence. 

Last week, however, at the 
annual general meeting of the 
African Stock Exchanges Asso- 
ciation (ASEA) in Johannes- 
burg. representatives from 
bourses across the region 
served notice that Africa is 
determined to put itself back 
on the international invest- 
ment map. 

In particular, now that a 
politically rehabilitated South 
Africa is rapidly becoming 
integrated with the rest of the 
continent and is poised to act 
as its economic leader, hopes 
are running high that the 
con tinen t's various exchanges 
are about to embark on an 


unprecedented growth path. 

“The situation is looking bet- 
ter now for Africa than at any 
rime in the past 30 years, and 
there's real potential for 
growth," observes one analyst 
who recently started assessing 
African stocks. 

While such glib predictions 
titter Africa's modern eco- 
nomic history. ASEA officials 
are adamant that this is no 
longer a pipe-dream, pointing 
out that there are currently no 
fewer than 14 operative Afri- 
can stock markets, with a com- 
bined market capitalisation of 
$256bn (£162bn). 

Of these, South Africa is by 
far the most important player, 
accounting for $240bn com- 
pared with $7bn in North 
Africa (Egypt. Tunisia and 
Morocco); $8bn in the rest of 
sub-Saharan Africa (Ghana. 
Nigeria, Namibia, Kenya, Zim- 
babwe. Botswana. Ivory Coast, 
Swaziland and Uganda) and a 
further $lbn coming from the 
Ind ian Ocean island of Mauri- 
tius. 

Even more striking is the 
fact that many exchanges 
already offer impressive 
returns. As a group the African 


Ten best performing stocks 


Bagfas 
Shinhan Bank 

Aksa Akrilik Ve Khnya Sanayii 

Goldstar 

rainvBst Land 

Et aa dbasi Hac 

Lucky 

Cberat Cement Co. 

Betrobras (Pfd) 

Betrobras 




Turkey 

0.2706 

0.0422 

25.07 

SJtarea 

28.7526 

4.1804 

17.01 

Turkey 

0.6511 

0.0899 

16.02 

S. Korea 

43.6939 

5.3312 

13.90 

Phlippines 

0.4518 

0.0550 

13.86 

Turkey 

0.0845 

0.0087 

11.54 

S. Korea 

33.0215 

3.3093 

11.14 

Pakistan 

4.0824 

0.4082 

11.11 

Brazil 

0.3740 

0.0321 

9.38 

Brazfl 

03729 

0.0286 

8.30 

Gouts Baring Socutttos 


tM- V* . Ys; 


markets rose by an average 30 
per cent last year and only two 
exchanges, Botswana and 
Nigeria, fell Zimbabwe, mean- 
while, had the fourth best per- 
forming market in the world, 
rising by an astonishing 123 
per cent in dollar terms (albeit 
off a low base) and the Mauri- 
tian index rose 51 per cent 

Taking note of these figures, 
some of the bigger investment 
banks and securities houses 
have started to investigate 
African markets more seri- 
ously. Morgan Stanley, for 
example, has included several 
non-South African stocks in its 
Africa Fund and is distinctly 
upbeat on the continent’s pros- 
pects. 

“In spite of past problems, 
Africa’s potential is unmistak e- 
able. The world’s second larg- 
est continent, with llm square 
miles, ' is three times the size of 
the US and has twice the popu- 
lation, 600m strong, and Is rich 
in natural resources and agri- 
culture,'’ its assessment con- 
cludes. 

Similarly, in another recent 
report. Barings predicts that 
African exchanges should be 
able to expand from their cur-* 
rent 1L2 per cent share of world 
market capitalisation to 3 per 
cent by 2010 on the back of 
anticipated cross-border equity 
flows of. between $lbn and 
Sl.Sbn. The sub-Saharan mar- 
kets on their own, the report 
predicts, could expand by a fac- 
tor of five or six times. 

Nevertheless, if the conti- 
nent is to achieve- this, ana- 
lysts agree that further struc- 
tural reforms are desperately 
needed. In particular, the mar- 
kets need to boost liquidity 


Global funds gap ‘widening’ 


The gap between the best and worst performing global emerging 
markets funds is growing wider, according to a review by Fund 
Research. The report found that the best global emerging mar- 
kets fund Increased by 67.2 per cent, while the worst rose by 
only 6.2 per cent over the 12 months to August 1. 

Mr Peter Jeffreys, managing director of Fund Research, an 
independent research company on international open-end and 
closed-end funds, said the review also identified a widening gap 
between fund management groups in terms of the quantity and 
quality of resources dedicated to emerging markets. 

The report covered 50 of the sector’s 120 funds, drawn from a 
group of US, UK and offshore open and closed aid funds. 

Fund Research, 1 Frederick's Place, London, EC2R 8HX 


substantially: South Africa, 
with annual turnover amount- 
ing to only 7.4 per cent of mar- 
ket capitalisation, is currently 
the most liquid of all sub-Saha- 
ran markets and even in the 
north, only Morocco’s 21.7 per 
cent exceeds it 

In large part, this is due to 
currency controls, which are 
still in place in nearly all Afri- 
can countries and need to be 
removed to allow the free 
movement of capital. At the 
same time, however, the mar- 
kets need to launch some inter- 
national stock offerings to help 
raise the continent’s profile. 

These points are largely 
accepted by the markets, 
which have started actively 
lobbying their respective gov- 
ernments for action on both 
fronts. “Only by removing the 
major stumbling block of 
exchange controls and by pro- 
viding new shares through pri- 
vatisation issues can we 
attract the foreign capital we 
so dearly need to develop our 
countries," observes Mr Jim- 
nah Mbaru, ASEA chairman. 


The first leg of this process 
has already begun. Several 
countries have implemented 
currency reforms as part of 
IMF-imposed structural adjust- 
ment programmes. South. 
Africa is also likely to jettison 
its own confusing financial 
rand system for foreign inves- 
tors some time early next year, 
which should provide further 
impetus for the deregulation 
process. 

At the same time, moreover, 
many states are considering 
privatising companies in sec- 
tors such as mining, telecom- 
munications and transport. As 
Ghana's highly successful 
recent $450m flotation of its 
Ashanti gold mine, of which 87 
per cent was sold internation- 
ally, indicates, given the 
proper conditions global inves- 
tors are more than willing to 
take a chance on Africa. 

In the mean time, the conti- 
nent’s stockbroking fraternity 
is continuing to grow: two 
more markets, in Tanzania and 
Malawi, are expected to open 
over the coming year. 


: - i.Sii ;fi§ 




Market waits for US employment data 


Foreign exchanges will be focusing on 
the US and UK central banks this week, 
with the possibility that interest rates 
may rise in both countries. 

Inflationary pressures are an issue on 
either side of the Atlantic, though the 
problem, at least from the point of view 
of financial markets, is much more 
pressing in the US. 

Sterling has recently been stronger, 
following a rate rise last month, while 
the market believes that nothing short 
of a large rise in US rates can rescue 
the dollar from its current plight 

The dollar is likely to trade in a fairly 
narrow range this week, ahead of Fri- 
day's release of the October employ- 


ment report The third quarter GDP fig- 
ure, released last Friday, and showing 
output up by 3.4 per cent, did not dispel 
the market's inflation concerns. Trad- 
ers will thus shift their attention to the 
labour market for signs of inflation. 

In recent months, dollar weakness 
has been closely tied up with investor 
fears that the US Federal Reserve has 
been too slow in combating inflation. 
The market consensus is that a turn- 
round in the dollar’s trend is unlikely 
until the Fed's monetary tightening 
process appears complete. 

In the short term, however, there is 
some evidence that the dollar may have 
bottomed. Mr Brian Marber, chartist. 


said there had been a weekly reversal 
in the dollar’s price movement Accord- 
ingly, though he stood by his prediction 
of a longer term fall to DM1.3910. he 
thought the dollar could stabilise at 
current levels for a number of weeks. 

Higher UK rates are less likely in the 
short term, though some economists, 
such as Morgan Grenfell, believe that a 
25 basis point rise in rates will be 
authorised at Wednesday’s monthly 
monetary meeting. Their argument is 
based on above trend economic growth, 
and the CBI's October survey showing 
strong price and cost pressures. 

Against this is the feet that Mr Eddie 
George, governor of the Bank of 


FT GUIDE TO WORLD CURRENCIES 


The table below gives the latest svatebte rates cl exchange (rotndod) against four toy currencies on Friday. October 28, 1994. In soma cams the mu to nominal. Martel rates me tt» average ol buying and seOng rates axcspi 
where they an ehown to be athervrtee. In some cases market rates have been cataieted from those of forefyi currencies to which they ere bed. 


Afcmmtan 

Afconia 

(Lott 

Algeria 

(Dinart 

Anttoia 

(Fr Frt 


(SoPwaa) 

Angola 

[Now K«atC0) 

Anogua 

lECaoSj 

Argwara 

(Peso! 

Arikio 

Portrl 

AwaroBa 


Austoa 

(Scrap's) 

Ascroe 

PtorEwwJo i 

Bahamas 

(Bduma S 

Bofrato 

(DrtW 

Bsttunc la 

(SpPosma) 

Bongiaiteto 

fTalca) 

Baitafloa 

BabS 

Belgium 

(BMoFrt 

Bets 

(BS) 


(CFAFn 

Benrom 

IBofrraaaan it 

Bhutan 

INgutnnr) 

DoOvta 

(BoOvtaw) 

Boomra 


OlJSi 

(toad 

Bnml 

IBnml SI 

Bulgaria 

ILovI 

Buiune Fast 

ICS* fit 

ttoira 

(KvaU 

BuvnvJi 

(Bunjndi Fri 

Comcodu 

i»te 

Cameroon 

(CFAFr\ 

Carotin 

tConadoo » 

Cauiv h 

(SoPasoni 

Cp vtnto 

ICV Eacuriol 

Cayman hi 

(CISJ 

CerX-AO top fCFA Frt 

Cron 

ICFAfi) 

Chto 

iddoro Pesos 

China 

IV inn) 

Cowntna 

(Col tosoi 

CI5 4 

(Routtnl 

Ccmoms 

ito 

Ccngo (Bnta (CFA Ff) 

Costa Ran 

Koton 

Cite dluMc 

(CTAFn 

Croaoa 

Puma 

Cuoa 

(Cuban to»s 

CYprin 

ICvFrua t) 

Crroh top. 

(Konmol 

Dwtart 

(Daitoah Kicvn^ 

DhTucH top 

iDjlb Ft) 

DomWM^a 

it Carr* Ss 

Dom.r»cjn Rttn (D Ptatn 

Efualor 

(SocnH 

feyw 

lEgypramO 

D SAatw 

(Cowri) 

Equal 1 Gu>nro ICFA Fry 

Earana 

ftiwrl 

Eihcpta 

IQhopUn Bin) 


Germany (P-Maifc) 

Ghana (CedC 

Gamar (C*>a 

Grtace (Drachma} 

Greenland (Danish Krona) 
Ornate (ECairS) 

CktrtOcnoe local Frt 
Gam (USSJ 

gw ram ata (OuoeaVJ 

Cteraa Pteau [Pew; 

Guyana (Guyarane® 


Had (GouM 

Honiwia fljsmpVB} 

Hong Kong (HK8 

Hungary Ferine 


Iceland (IcetavSc Krona) 

Mi (ManFUvaa) 

tndaiaala [»«**) 

ban (RM 

bag (baqrOnar) 

btonnoe (Punj 

MM |9wM) 

ttafy Aral 


Jamaica UamKan® 

Japan (Yon) 

Jordan {Jodaman Dnart 


Kenya (Kenya ShMng) 
Ktoban (AustraM 3) 
KoraaNonn (Won) 

Krxoa South (Wert 

Kuwait IKuvoH Dinar) 


Lara fte-Wp) 

Lama (Lao) 

Labaran (Lebanon £) 
Lasomo (Mdud 

LSmmo (UaarianS 

Libya (Libyan Dlnart 

bo a He r m an |9 miR| 

Uhan (Utter 

Lmemboug [Lm Ft) 


Macro (Potts* 

Mannginrar (MO Fr) 
MlOobo (Pen Escudo) 
Marat- (Kwacha 

Uatayao (Rjnggh) 

Malays is IRuhya) 

Mai Hap (CFAAt 

Main (MattraoLn) 

Montague (Load fin 

Mawmnta tOuguiyal 

Mauttka (MourRupoaS 


tsra 

PaWstoj PW-ftm <n 

JS.it 06 

PSHTB 

®Mbroi 

i^sas 

Proua Noer Gtrinoe Mna) 

1ASS8 


fGioefnj 

3138^5 

Peru 

(New So* 

1E058 


(Pooo) 

JOJSSJ 

Ptettmn 

(E Storing) 

1.® 


(NZ® 

2.6379 

Potott 


374440 

Portugal 

(Eocudoj 

25TL34* 

Poerto Rk» 

tus® 

10235 

Qatar 

(Bya* 

50587 

Reuttoi la. 4e to (FIFA 

USD 

Romania 

(Leu) 

OtOSLSD 

Rwavla 

PI 

21620 W 

St Christopher 

SCair® 

4J109 

StHtoena 

(O 

TOO 

St Luca 

(ECerrS) 

4.4199 

St Pleno 

(French Fr) 

63880 

St Vrt cert 

OECarr® 

4.4190 

Sen Marino 

Man Ural 

2506M 

Sao Toma 

(Dobra) 

19026 

SaudArahta 

(Rhte 

40002 

Senega 

ICFAFrt 

836000 

Sojcfteaes 

(a^ 

70395 

Stem Leona 

(Loonel 

657046 

SiWcra 

(SI 

20890 

Stivatta 

goam} 

0.8320 

Stewene 

(TOa) 

10501 

Settmonia 

(S) 

53427 

Somaifiep 

(Shtete 

4=8604 

South Africa 

pros* 

56839c 

603469 

Spoto 

Sportoh Rceta to 

(Peseta) 

203077 

N Ahtea 

Sp Feeeoti 

203077 

Sri Lanka 

(tooeel 

744135 

Sudan Rap 

*»art 

549107 

Sirtrati 

fGu**r) 

407aS45 

Swadam 


50839 

Sweden 

(Wove 

noeea 

SurizBrtrod 

(to 

=.0460 

3»na 


323306 

Tehran 

IS 

420788 

Taroanu 

Sfierog) 

68a 70S 

ThafctaJ 

(Bart) 

4044*5 


tCFAFrt 

836000 

Tonga is 


aiasj 

TrinttaurrobeQc 


0.1425 

Troma 


10650 


brar 

568070 

TwtaS Cescoe 

(US® 

10235 


ACquaivr (Local Ft) 

Monaco (French Ft) 

Mengoun (TLortO 

Montaan® <E CarrS) 
Morocco IDenaml 

►Awntttoue tM ad cdl 


Ward Is (Fade a 

Faroe ta (Dancn Kronor} 


Fpk 
Finland 
Frarcv 
Ft Qv'Abca 
Fr GlUS 
Fr Paaflc ts 
Gabon 


Nemtaa (3 A Rand) 

Norm la (AuatrauanS) 
Napd (Nepalese Rupee! 
Nauwaxfc fCkSdrv) 
ffnd Amass iaalom 
N otrZaatoM 723) 
Mraraom (Geld Cordoba) 
tegerfkp JCFAfrt 

N<0«no (Nabs) 

Norway (Nor. Kranal 


Tin-Mu (Austraten® 

UQOTM Mawavdnd 
Ukraine Qtebomiaca) 
UAE dVtiant) 

Uratad tOngdcan (Q 

UnbsdStaan (US El 
Uroguay (Paso Uruguay^} 

Vvwasj (Vatu) 

Vatican (Lbs) 

VsnsaidB Ipnoaorj 

Vietnam (Dune) 

vtqjnMrnrfi fUSS 
Vbgn s-US (LBS 


Western Samoa ■ (Tate 

Yemen (Rep o<) iRW) 

Yemen pep ol) (Dinar) 

Yugoctata (Non Dnart P) 
Zam Rep (2hmf 


Swdd Dravnrn Rights October 3,-. 199a Unoed Kingdom CEL91 1869 Unad Scans 3109320 Gammy DM&2312J Japan VMAOifi Eunpaan Cwranay IMt Hans Omar 28. 19M United Kingdom £0.183254 United Sucua *1.28211 Gannany DM1J1B11 Japan 


Atfs' y y m Kx is . i;aj Free ego. (w Bun*noh> roan; (cl Contnordal rata . frt ContmMod rata: far fesenaaf rnpartc h) Franco) nx (tn Boons: fl Sen co mrmnisl B Budngsa Pvywf m; ff Luxury gooda: Ft? UarHoc rant: 6i Puosc a a n at caon rata; gr) Onviai 

ran (M pro to n B M n». Iq) convener ram (rt poradd rata; M StBrag rats, ft ToorW rata (ui Cuianeea ftssd against Bw US Deter M FtoaDng roffl ; 4 OS mCM to 9m* at an fioubta Zone. («) Yugodav Dbv rase nra. p> Rwandan me to 31 JLM (3) Yamary 
nas lor 29.431 Soma dan dartved Iron THE WMiRB/THB CLOSM1 SPOT RATES i Bam of America. Economics OoporamnL London Trading Conn. Enquiries: 071 63c J38 QAl 

Fndar. Odobor 38 , i«a 


The most frequent flyer 

to Osaka. 



Japan Airlines 


JAL have daily direct flights from Europe to Japan's second largest city, 
0 more than any other airline. Cal! your local JAL office for details. 



Middle East 


Foreign & Colonial Emerging 
Markets has launched the first 
regional Middle East 
closed-end fund on the New 
York stock exchange. In a 
global placing it has so far 
raised S42QL 

The fund, which is FCSM's 
first US listed fond, is 
Investing 65 per cent in 
securities of Morocco, Tunisia, 

Egy pt -Inrrian anri Oman. 
Because of US legislation it 
will never invest in Iran, Iraq 
or Libya. 





,, sire* 


News round-up 


■ Survey 

China remains the highest 
priority among international 
companies wishing to make an 
investment in an emerging 
economy, according to a 
survey of 100 companies 
conducted by Ernst & Young. 

After China, India and 
Indonesia attract attention, 
while the most important 
factor in attracting inward 
investment was that of 
political stability. 

The survey sought to 
identify the investment 
intentions of 1,000 
multinational companies and 
to explore the decision making 
process that accompanied such 
expansion. 


b usiness of the Bombay stock 
pYp-h^ngp , which accounts for 
75 per cent of turnover of all 
the stock exchanges. 

The BSE has a market 
capitalisation of $l30bn from 
over 6,000 listed companies. 

The BSE is switching from 
open outcry trading to a * 
screen-based system from 
January 1995. 

The BSE officials have also 
announced plans to introduce 
options and futures once the 
entire trading is screen-based 
and settlement procedures 
Improved. 

The NSE was conceived in 
1990, mainly out of frustration 
with brokers' refusal to accept 
an y chang e in antiquated 
trading practices. 


these brokers have set up an 
electronic quote system and 
are working on developing* 
share trading system linked to 
a depositary. 


■ Poland 

The Warsaw stock exchange 
has approved for listing shares 
in Remak. an engineering 
company, and Debica. the tyre 
maker, as well as four new 
issues or listed companies. 

Remak and Debica were 
floated earlier this year, while 
the four quoted companies - 
BIG. Elektrim. Mostostal 
Warszawa and Zywiec - won 
listing for new shares issued in 
February and March this year. 


Russia 


■ India 

India's recently-launched 
National Stock Exchange 
(NSE) plans to start 
screen-based equities trading 
next month. 

The NSE will initially trade 
in 200 shares from November 3. 
But plans to expand to 500 
shares in the next six months 
are expected to eat into the 


The Moscow Commodity 
Exchange, one of the main 
dollar futures trading centres 
in Russia, is to launch a 
western-style stock market 
before the end of the year. 

Dozens of stock exchanges 
have been set up in Russia, but 
only a few trade securities, and 
their trading volumes are very 
small. 

The bulk of the market is in 
the bands of brokers trading 
over the counter. Several of 


■ Budapest 

The Budapest stock exchange 
will introduce an official share 
index on January 1 1995. Since 
the opening of the bourse on 
June 21 1990. the index has 
been used as an unofficial 
weighted index, which 
currently reflects the price 
movements of 13 of the BSE's 
39 shares. 


• Edited by John Pitt. Further 
coverage of emerging markets 
appears daily on the World 
Stock Markets page 


Baring Securities emerging markets indices 


Weofc on week movonent 
Actual Percent 


Month on me 
Actual 


movement 

Percent 


Year to Gate movement 
Actual Percent 


England, has recently gone to some 
lengths to stress that he feels the mar- 
ket's fears about inflation are exagger- 
ated. Last week he said that there were 
“relatively few signs that inflation is 
about to pick up strongly.” 

A rise in rates against this backdrop 
would be surprising. Even without a 
rate rise, most analysts believe sterling 
to be well supported at current levels. 

In Europe, the Nordic currencies are 
likely to continue trading actively in 
the run-up to the Swedish referendum, 
on November 13, on joining the Euro- 
pean Union. The Swedish krona and the 
F inni sh markka have both recently 
been strong. 


Worid (301) 

Latin America 
Argentina (20) 

Brazil (21) 

Chile (12) 

Mexico (25) 
Peru(16) 

Latin America (94) . 
Europe 
Greece (16) 
Portugal (18) 

Turkey (21) 

Europe (55) 

Asia 

Indonesia (26) 
Korea (23) 

Malaysia (23) 
Pakistan (11) 
PhBlipplnes (12) 
Thailand (25) 
Taiwan (32) 

Asia (152) 


-10.87 

436.39 

+73.82 

-16.54 

+350.57 

+20.80 


153.06 

158.25 

235.96 

114.35 

302.45 

277.61 

172.63 

_227.36 


Al tfufeea to S Wins. January Wi 1992-100. Soma. Baring Socurtrim 


Refreshing fares: 


AIR CANADA 


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FINANCIAL TIMES MONDAY OCTOBER 3! 1994 


25 


EQUITY MARKETS; This Week 


* \ 

\ 


'Up 




■ ■■■■* 




V V 

'■ r :-i- 






Vp**^ 


-'•"CCtCCflfe 


a 



lf J 

i 



NEW YORK 


Wall Street 
looks beyond 
next rate rise 

With, the next rate increase all but 
assured. Wall Street is be ginning to 
calculate how much more the Federal 
Reserve wfll have to tighten credit 
conditions to bring growth down to a 
manageable pace. 

On Friday, the Commerce 
Department announced that the 
economy bad expanded at an animal 
rate of 3.4 per cent in the third quarter, 
much higher than the most recent 
estimates. 

Over the past week, economists had 
lifted their forecasts to around 3-0 per 
ceit in response to the recent series of 
robust indicators. While the reported 
figure represents a sl ow do wn horn the 
second quarter, when the e rfmnm y 
accelerated at a 4.1 percent rate, the 
Fed Is not likely to be satisfied. 

Thus, the data merely closed one 
chapter and opened another. “It's a 
foregone conclusion that the Fed is 
going to raise rates a half point at its 
next meeting on November 15. The real 
issue now is whether the Fed is going 
to raise rates again afterwards," says 
Mr Hugh Johnson, chief investment 
officer at First Albany in New York, 
“That makes for a very uneasy, restive 
kind of environment," he says. 

But if there is a sense of uncertainty 
dominating the equity markets, it was 
sorely not apparent immediately after 
the GDP anw o rnirgmant. The DOW 
Jones Industrial Average jumped more 
than 55 points, to dose the week at 
*980.66. 

The positive movement was partly 
explained by the hammering blue chips 
had taken in five of the previous six 
sessions. The rebound came after a 


Frank fvIcGuTty 


Dow Jones Industrial Average 



"3840 

• 21 

Souck FT Graphite 


October 1894 


as 


steady stream of strong earnings news 
which had flooded into Wall Street over 
the past fortnight As of last week, 
per cent of companies had reported 
profits 10 per cent or more above the 
consensus, according to S.G. Warburg. 

Most importantly, bonds were 
surprisingly cooperative, with the yield 
on the benchmark 30-year issue dipping 
below &00 per cent, a level viewed as a 
psychological obstacle for stocks. On 
Friday, fixed-rate investors took solace 
in a third-quarter dip in the implicit 
price deflator, a keenly watched 
measure of inflation, and suggestions 
that the headline GDP figure was 
boosted by inventory accumulation. 

As a consequence, Mr Robert Brusca, 
chief economist for Nikko Securities, 
says the Fed would have difficulty 
justifyingarate increase after its 
expected move around November 15. 

Investors are already looking for 
further evidence to support such a 
conclusion. They will not have long to 
wait because this week brings two of 
the most crucial pieces of economic 
data in the monthly release cycle. 

The National Association of 
Purchasing Management will publish 
its October survey of business activity 
tomorrow, whole the Labor 
Department's report on employment 
conditions is due on Friday. 


LONDON 


Shares look 
vulnerable to 
change in tack 

Volatility has become more thap a 
keyword for describing the mood on the 
UK stock market Daily swings in share 
prices have reached proportions where 
they not only reflect underlying fectors 
but also influence prospects for the 
market’s performance over the final 
quarter of the year. 

Last week, the FT-SE 100 Share (ntto* 
moved through a range of around SO 
points In terms of intra-day high* and 
lows, before closing on Friday with a 54 
point gain on the week. Since many 
market strategists would probably 
settle, at least privately, for a year-end 
Footsie anywhere above 3,300, moves of 
80 points are not to be brushed aside 
just because they have not proved 
sustainable. 

Volatility is related directly to the 
dismal volume of business in the UK 
equity market Equity bargains are 
running at around 2*000 daily, 
comparing either with Christmas 
holiday sessions or, more ominously, 
with early July this year when the 
Footsie was hitting its 1994 low. 

Daily bargains are only around 
two-thirds of the average for the post 
two years, so the rumours regularly 
sweeping the trading rooms that 
leading houses are poised for 
wide-ranging staff cuts or even 
withdrawals from market sectors are 
hardly surprising. 

Low volume is hitting the market in 
two ways. Market-makers concentrate 
on keeping trading books on a tight 
rein, and are unwilling to hold 
posit i o ns; and at the first sign of a 
change in sentiment, stock flies round 
the market and prices move sharply. 


Terry Byland 


FT-SE-A Alt-Share Index 

1,560 


1,540 



Such volatility makes programme 
trading, once every market trader's 
dream, extremely hazardous. The 
securities house taking on a programme 
must effectively buy the portfolio on 
offer and then turn to the market to 
unwind its position. It takes the risk 
that at least some stocks may prove 
difficult to unload. 

The past few months have seen a 
number of large houses, including at 
least one US investment bank, badly 
caught out and sustaining heavy losses 
when the market suddenly dropped 
before a programme could be unwound. 

Misfortunes for market-makers and 
securities houses are not necessarily 
negative for the market or for share 
prices, except in an Immediate sense. 

Heinwort Benson points out this 
week that institutional activity is light 
and that this leaves share prices highly 
vulnerable to any turn to the bullish 
tack. 

Unfortunately, as some observers 
admit, events in the US have revived 
the prospect that UK base rates may 
have to go up before the end of the 
year, rattier than in the new year when 
such a development would apparently 
be acceptable in the market 

This effectively leaves London 
dependent on the US and German bond 
markets. 


International issues 


Report on BT reveals the 
secret of global success 


OTHER MARKETS 


CHEMICALS 

Following ICFs third-quarter 
figures, which drew a dull 
response from the London 
stock market last 'nmrsday, 
three continental European 
majors produce their progress 
reports this week. 

DSM, which built its 
business on the ruins of the 
Dutch coal mining industry, is 
like ICS In that it is highly 
involved in tire commodity 
chemical part of the business 
and will benefit most from a 
strong recovery in prices for a 
number of petrochemical and 
plastics products since August; 
says Hoars Govett 

Hie broker expects DSM’s 
sales to rise to FI 2J3bn from 


FI LSbn, compared with the 
third quarter of 1993, and 
pre-tax profits to crane out at 
FI 138m against a 
corresponding loss of FI 79m. it 
says that prospects for the last 
quarter are even better, as in 
this period the thirdquarter 
price increases wifi be reflected 
fully in the results. 

Goldman Sachs, too, has 
produced a sector preview in 
which it says that Akzo Nobel, 
which combined its Dutch and 
Swedish components last year, 
should faring net thirdquarter 
earnings of around FI 330m 
into its figures on Wednesday, 
up from FI 247m the year 
before, the rate of increase 
earing from 48 per cent in the 
second quarter to over 30 per 
cent in third. Goldman 


says that investors will be 
looking for any evidence of 
pressure on margins from cost 
increases further upstream. 

Both brokers exjKct 
Rhfiue-Poulenc, due on 
Thursday, to show figures 
which bring it out of loss for 
the first time this year. Hoare 
Govett reckons that an 
jnirff sp. in operating margins 
from SB per cent in the third 
quarter of 1933 to dose on 10 
per cent should produce net 
attributable profits of some 
FFr465m, against a loss of 
FFraOOm in the year-earlier 
period. 

Meanwhile, Goldman expects 
moderate out-performance 
from the French stock, saying 
that its apparently poor 
ea rning s performance In the 


first half of 1994 reflected 
erratic nonoperating Hems; 
and that at operating level, and 
excluding exceptional items, 
Rhhne-Poulenc’s experience 
should have been in line with 
its peers. 

AMSTERDAM 

The Dutch market also hosts 
quarterly figures, both on 
Thursday , from KLM and 
Philips. In August, KLM posted 
a strong increase in net profit 
in the first quarter of 1994-95, 
reflecting good demand for air 
travel sparked by general 
economic recovery as well as 
the company's cost-cutting 
efforts. In the same month. 
Philips mare than trebled its 
profits in the second quarter of 


1994, beating even the most 
optimistic of analysts’ 
forecasts for the electronics 
group. 

UBS reckons that all of the 
Dutch majors, including DSM 
and Akzo, could produce 
positive surprises this week, 
and says that Philips looks 
undervalued on discounts of 
more than 25 per cent for 1995 
and 1996. 

ZURICH 

Depressed by the 

under-performance of UBS 
shares during its "board’s power 
struggle with Mr Martin 
Elmar's BK Vision, the bourse 
has the opportunity to look 
elsewhere in the finanrial 
sector this Thursday. 


It's not often that the tactical 
decisions made during a tricky 
global share offering are made 
public. So a report from the 
National Audit Office offering 
a bird's eye view of what made 
the UK Treasury's sale last 
summer of its third and final 
stake in British Telecommuni- 
cations “a success" is required 
reading indeed. 

Between the date the sale 
was announced in November 
1992 and the date the shares 
were priced in July 1993, exist- 
ing BT shares held their mar- 
ket value relative to the FT-SE 
index. The shares were sold at 
no discount to the market 
price, earning the Treasury 
almost exactly the £3.8bn it 
had hoped to make. 

The report might make 
instructive reading for Japan's 
Ministry of Finance, which is 
considering how it ought to 
organise future privatisations 
following the poor reception 
given its partial privatisation 
of Japan Tobacco last week. 

Broadly speaking, global 
book-building, pioneered in the 
US, requires sustained market- 
ing by a selling syndicate 
before any shares are priced at 
alL During the book-building 
process, bids are received for 
shares and the price and actual 
allocations are set with respect 
to visible market itomnnri. 

Because the ultimate pro- 
ceeds to the seller are depen- 


Winterthur, the insurance 
group, is due to produce 
half-year figures and report on 
prospects for the rest of 1994. 

TOKYO 

With the Japan Tobacco listing 
and oversupply worries out of 
the way, investors will focus 
on corporate results and 
currency movements this 
week, writes Ermko Temono. 

Interim results so for have 
proved better than expected for 
many export-orientated 
companies, due to demand 
from the US and Asia. 

However, profit 
aniumnwimen fa; have foiled to 
move share prices. Life 
insurers, the leading 
institutional investors, are still 


dent upon the trading price for 
existing shares immediately 
before pricing, global book- 
building exercises can be vul- 
nerable if shareholders or oth- 
ers engage in short-selling or 
in outright share sales. 

It was this point which made 
the UK government’s BT3 sale 
so controversial and almost 
from the start, S.G. Warburg, 
global co-ordinator for the deal, 
was embroiled in controversy. 

In the weeks leading up to 
the sale of 1.31 bn shares in BT 
in July 1993, there were 
charges and counter-charges of 
attempts to manipulate the BT 
share price, both by institu- 
tional investors and Warburg. 

In that environment the fact 
that the sale raised £3.79bn for 
the Treasury while most insti- 
tutional investors surveyed 
viewed the sale as a success. Is 
an achievement. 

The NAO report issued last 
week, lists three key factors 
contributing to this success. 

First the Treasury and its 
advisers, Warburg, kept the 
markets in the dark about 
exactly how many shares were 
going to be offered to interna- 
tional investors. They wore 
told the amount they could 
buy would depend on the level 
ctf domestic demand. 

Second, the soles and com- 
mission structure was such 
that the firm which worked the 
hardest to sell the shares could 


cautious, interest among 
overseas investors is waning 
and many analysts believe that 
public funds remain the only 
source Of buying. While 
underlying support of the 
Nikkei around 19,000 is firm, 
share prices are unlikely to see 
aggressive buying this week. 

HONG KONG 

The long-awaited Slno-British 
agreement on Hong Kong's 
new airport is expected to 
come through early this week, 
with potential to stir the 
market, writes Louise Lucas. 

Airport-related stocks ticked 
upwards at the end of last 
week but many analysts 
reckon the agreement has 
already been discounted in 


receive the commission, even if 
ultimately the bid to buy 
shares was booked through 
another firm. The NAO study 
shows that while 57 per cent of 
allocations to institutions were 
booked through Warburg, it 
only corned 36 per cent of the 
sales commission. 

Third, the Treasury and War- 
burg went to great lengths to 
ensure that those who had sold 
BT shares before the offering 
would be denied the opportu- 
nity to buy new ones. 

It was this final effort which 
caused such friction between 
UK institutional Investors and 
Warburg- The NAO report con- 
tains the startling admission 
that the Treasury went so far 
as to discuss asking the finan- 
cial regulators to give it infor- 
mation about who was selling 
BT shares so it could deny 
them allocations from the 
offering. After hearing from its 
own lawyers that this was 
clearly illegal, the Treasury 
considered other methods. 

In the end, the Treasury and 
Warburg had to content them- 
selves with an undertaking by 
the Stock Exchange to monitor 
large transactions in BT shores 
in the run-up to pricing. The 
rancour among institutional 
investors showed, although the 
report suggests this may have 
actually deterred some sales. 

Norma Cohen 


share prices, and that the 
actual signing will do little to 
overturn jaded sentiment. 

A sprinkling of corporate 
results, beginning with the 
half-year figures from 
Hongkong Telecom on 
Tuesday, could spark a wave of 
selective buying. The telecoms 
stock has seen its price surge 
already on the back of the 
HK$2bn investment in China 
announced earlier this month. 

Fears of interest rate rises 
continue to spook the market 
and keep investors sidelined. 
While a 0A per cent rise in the 
US next month has largely 
been factored in, fears remain 
of a further increase before the 
year-end. 

Compiled by William Cochrane 


Every business 
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BUSINESS RESEARCH 
CENTRE 

Namber One. Soathenrit Bridge. LodJwi SE1 0HL 
TO. NO. Dm $73 4WB Fax No. 0171 TO MW. 


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Union Bank of Norway 
U.S. $27,000,000 

Subordinated Floating Rate Notes due 2002 

In accordance with the provisions of the Notes, notice Is hereby 
given that the Rate of Interest for die three month period ending 
3ltt January, 1995 has been fixed at 7.4875% per annum. The 
interest accruing For such three month period wifi be U-S. S9J67J6 
per U-S. $500,000 Note against presentation or Coupon Number 10. 

UnfonBank of Switzerland 
London Branch Agent Bank 

27th October, 1994 



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FIRST NATIONAL BANK Pic 
: NATlQMflL AND FIRST NATIONAL 
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OUR HOME LOAN RATE IS INCREASED 
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It First Niition.il House, College Road, Harrow, Middlesex HA 1 IFB. 


Sakura Finance Asia Limited 

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SAKURA TRUST INTERNATIONAL LIMITED 
Agent Bank 31st October. f!94 



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m accordance with ms provisions of 
the Notes, nollca Is Hereby given, mat 
lor the three months Interest Period 
Iram October 31. 199* to January 31. 
1995 Die Notes mil carry an Interest 
Hate 01 8 1875“, per annum Thu 
Merest payable on the relevant 
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1905 agnbwt Coupon No. 38 wlO tw 
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gpecfMtfy tar Motes to denominations 
oMJ S $10,000 end U.S S2SO.OOO. 
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FINANCIAL TIMES MONDAY OCTOBER 3 1 1994 




WORLD STOCK MARKETS 



EUROPE 

AUSTRIA (Oct 28 /Sch) 


ItittnA 35 a 

UlMe 540 

LVMi S» 

UriCop 408.30 


Lnor 1 Z 10 O 

iSrad 1.118 


1,118 

40 

Z 1 SJ 0 

Meta 117.70 
nmMu 030 
NnJErt 12 2J0 
Omn 200 
ftrca 34CJ0 
Partofl 320 
Podn 158.40 
PmflK 297.60 
Fowl 771 
PIA 828 
Prora'd UB3 
ttMl 504 


BajBUMifxammtoa^/Fts.) 


Mon 4,ioo 
Afenart 7J60 
MM 5,010 
881 4.180 


88 1 4,180 

Mil 1S073 
BGfltPI 22.100 
BnqNrt 38.875 
Barco 2.415 
Btftn 23.825 
can o n 11.929 
CMC 2,575 

gsr ^ 

Crtyt 7.1 JO 
DBBB 1.248 
Beau 1500 
BMC zsoa 
Farts 2415 
GBL 3080 
GBUrfv 3.080 
(as Go U10 
GanBnq 7.B00 
Ovasrt 8,900 

GMx4 4.400 
lonoM 2.795 
iWh* 8.160 

rodAFV &200 
Mcnvgr 5880 
Mum 1.372 
patn 10.550 
PBlno 0.490 

Pnrtn 2020 
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SSA US 

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SOlMfV 2116 

Softio 12800 
SCO* 1,610 
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Soc Q» 681 
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Sp Ml 274 
SumCl 24630 
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DunCSF 139.7X1 
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VJlru 27650 
ttorro 240 


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157.4011300 23 
♦23 752 542 1A 
♦15 #45 665 28 
-33 3890 2380 1.9 
734 578 63 
♦31 1X88 1340 38 
+7WJ0 JW.10 27 
♦20 800 472 Z.I 
-1J8 61038080 7.9 
4-130 700 302 70 
40 2470 1890 — 
♦9 792 S23 33 
♦20 2000 1,710 20 
♦2450 529 232.10 — 
♦8 877JZ9A0 68 

♦500 21730 10160 23 
-30 3.13I22S1 13 
♦180 214 13210 64 
♦1090 30450 29110 3.4 
+11027*50 IZSJO 33 
10 404 333 4.1 
_ 86042730 69 
-7 800 403 6T 
♦2 307 221 33 
♦4.70 335 240 3-4 
♦3.10 353 227. JD *7 


— GEHOAMY (Oct 28/ OmJ 


DBBKARX (OCt 28 / Kl) 


MPA 610 
BQUn 181 
CBM 276OT 
CMM 6400 
WS12A 102800 


SoptoA 5W 
Sopfrfi 505 
SOWS. 391 

TeteOa 338 
ropen 600 
IMdnA 230 


760 565 23 
-1 281 176 20 

-1.40 333 230 1-1 
-100 7000 5300 08 
-1893 uw twS 03 
♦3 223 17 150 1.4 
-240 427 307 30 
+1420125 ISO 14 
♦15 615 373 10 
-« 043 446 21 
-a 278 180 18 
-0 425 330 21 
♦ID 1850 B95 0.4 
-.10 385 282 XI 
-0+5 75141 468 0.7 

-10 737 410 1.1 
♦4 015 497 00 


-2 875 423 03 
♦1 493 321 20 


AEQ 15050 +2X010X0 140 1.1 

AEMW 520 -17 635 490 23 

Arising 1040 _ 1.448 1800 13 

*' — 2855 +27 2011 2122 08 

827 -509930 979 20 

819 +9 1,191 700 — 

720 *10 1025 075 18 

315 +5803030 278 25 

Bdnwrk 49650 _ 510 435 1.6 

380 *2 485 348 26 

347 +7.70 40430330.10 38 

f *w MW 

♦650 875 305 30 

1,015 -8 1.105 815 1.4 

287 +3034150 238 21 

300 *2 521 374 27 

845 +13 051 750 10 

770 +S 1830 755 IX 

CKAO 1858 +13 1030 1,140 00 

Onmok 313 +4 39020250 68 

Contra £1980 -180 29921750 10 

DLW 418 ♦2130 BOO 30Q50 00 

Bato* 756 +5J0 904 889 1.1 

Dguasa 44 6 _ sss «8 14 

Of Bab 22000 -JO2B80O 210 — 

Damn 723 46808573085650 25 
DMMK 141 -2 188 131 28 

DM* 480 -7 607 47B la 

DrOOR 317 +7 337 2B0 13 

DnxHv 39650 46504969} 348 64 
GEHE 512 +1 818 465 10 

Sirtm 253 +0 307 246 20 

Gktxti 82B +2 828 500 18 

Hamfce Z1B +10 248 ISO 60 

HrtaCm 1851 -1918801,141 10 

60S +8 661 582 1.7 

320 *5 440 310 11 

940 -1 1098 857 1.4 

324 +7 JO IlfoSO 26420 22 


ABNAar MXO 
4EC0N 10(80 
AhsM 40.10 
AICOH 207.30 
BOBWl 32.70 
BoSUM 3780 
CSN 6690 
OSU 14700 
M*a201XlM 
Bs«r 17.10 
FWtOoR 1580 
MrivW 7080 
Dim 9650 
OftOpH 44,80 
KMT 194 
Hanoi 245 
HoBBa 27900 
HBvOpfl 78.40 
MnCtf 7300 
HOCB 4100 
MGOpft 7610 
tntMUi 9280 
KLM 4670 

toper » 

KPN 53 

KPMJpR 4630 
Nadyd 56.10 
— anC 8220 
-_JOR 0900 
0c«V0r 7«.6tW 
mop 84.10 
PotySf 7500 

Mnco 11240 

ftodnoo 5180 
Home 11400 

‘taro* 02 
RDuteJi 19120 
8MMI 45.40 
UnUp 19980 
VNU 177 

VhOOpfl 45.80 
WTQDpfl >2100 


♦0073.70 54 40 

-200 1 1050 90-20 28 
♦805380 4200 23 
♦400 229 18700 3.1 
-50 478032.30 38 
*80 523480 28 

-007700 6260 — 
♦1.101500910603 10 
+680 2081070 2 A 
♦8019501400 — 
__ 23 1380 4.7 

♦1.10 68.40 6550 40 
♦1 10630 ea 10 48 
-80 5800 41.40 28 
... 15750 123 — 
♦3.10 25020850 10 
+0033600 284 30 
♦AO 83 4600 68 
_ 93506850 ZA 
-.10 4670 3470 28 
♦I 04.70 72.10 08 
♦.706600 74.70 2.4 
♦1M0 6700 4000 21 
♦.10 5200 4210 00 
♦JO 5610 4700 — 
♦AO 57a *380 38 
*80 BSJO 47 JO 60 
-JO 10020 72 2.4 

♦180 92.40 6675 — 
-.10 0900 6800 3.0 
♦100 5030 40 00 

♦100 6400 7000 10 
♦00 131 111 AO 61 
+.10 88 SO 61 

>80133.40 llUO 20 
+.10 1 0000 01.70 84 
♦860 21640 15400 *A 
♦80 5080 4080 10 
♦220 23B17M0 20 
♦1.40 203 1 5450 20 
-.10 5600 48 22 

+ 10 13150 UN 80 18 


m 


♦15 400 3M 68 
+9 871 782 1.7 
*2 19014350 1.7 
-15 SOI 575 70 
-10 1J07S 1.400 2.1 
♦81 1037 1883 28 
♦050 17B 11950 _ 
+10 1J381J30 48 
♦1405840 3870 — 
♦4 283 178 05 


*8 720 801 
♦S 615 «5 
+1 970 814 - 


S4&M *00 
Ste*v 7OT 
1 JW 


_ Hotter I860 -28 1838 1080 66 — 


818 -9 877 M« 

1.180 *10 1880 1.120 
♦0 336 ZSO 
+27 850 737 


SMnUz 1820 
ShPCIi 2050 


KB»aa 2860 —10 2,480 1 JW 

z n*vr zm *x 2.780 z>*g 


-1510401801 — 
+4501MJJ 1®5 0.4 
♦80 7870 6180 05 
♦50 28001840 2-7 
♦17180B >42 1A 
♦4 227 14a 18 
♦15 8M 635 — 
+10 870 608 _ 
-10 18*> I860 3.1 


klKm 734 
KniGunK . 478 
KlnbO 443 


030 *302.780 ZtSO 

914 +4 907 732 

745 -11 7E7 805 

B30 *1 963 84fl 

734 +2 787 56 1 

478 - 573 423 

443 +3 531 210 


“ Kinana 1810 +101^01010 _ — 

nm 547 +4 845^400 — — 


*3 1.100 048 20 
44 ST 337 4.1 


Kuna 

ICt»* 7,280 
K<t>9i 428 


♦20 3800 2830 
-307820 5880 
♦5 556 376 


♦2 269 17180 40 
►10 815 804 10 


IMani 738 *6 BC9 730 

KToSm 975 ♦10 18Bq_»S 


♦14 770 516 1A 
♦5 B88 736 _ 
-121JW31056 2.7 
♦13 83Z 864 2.7 
♦010151,125 10 


975 +10 10SO 90S 

2030 +102860 2020 

686 -8 762 838 

1.160 +10 1830 788 
1000 -10 1040 988 

930 — BOO 512 

IttMta 1020 +30 28201^0 


. 1.170 

spasm i.no 
ShoUt -470 
ShxAkl 521 
smwi 353 
SwOW 565 
QhwSan 520 
9WSK3 >J00 
&1W 2.100 

SmrtrM 786 

780 

sumBkf 7ia 
a wMi 1790 
Swan 688 


B 1 :S 8 


PACIRC 

JAPAN (Oct 28 /Yen] 


585 +8 680 <23 

731 -28 900 730 

412 *5 483 321 

1,740 +10 2810 1.420 


Mnui 

MSical 1080 +10 2020 1.1 
MEWS 10BO +101020 1; 
NM 1060 —1020 1 


2.760 +2066401 


1.140 

Mma 1090 
Amada 1070 
M MDO I860 
PndoCn 590 
- - 1070 

452 


SSnOl" 4J40 


+70 I.&01 

-11 737 

4101010 991 I 

*20 1060 078 
— 1000 881 
-10 1090 1070 
-2 744 503 

-10 1.700 840 
*Z 834 402 


710 *7 792 M2 

mnCC 1020 — 1040 1050 


Z AS3MK 1060 


440 60W 2010 
♦GO 6840 4070 I 
-2010301020 

SS’fifl. 

-a 513 390 
43 879 580 
-1 088 BEG 

— 1090 1060 l 
♦7 801 418 
-60 30402010 
_ 1020 842 ' 
+27 774 438 
42010201030 
400 3080 2000 
♦20 1,410 1020 

— 611 SIB 

40 4m 

+25 967 

-10 G83 

-20 1.440 1040 I 
-3 768 571 ' 

— 2070 3040 
_ 1030 1,020 
„ 2.780 2080 

+30 1080 1010 
-0 884 772 
-1 898 738 

«1 635 410 

_ 601 337 

-1010701000 

— 1060 1050 l 

-30 20601 

-S0 10101 

49 1.020 
-a 1020 731 
415 810 651 

+4 670 416 
-10 1070 003 
-30 20201060 
+3 527 345 
+22 1080 720 
+3 865 697 i 
♦10 1,120 951 

— 1,710 1040 
-2010701030 I 


— NOWAY (Oct 28 1 Kroner) 


♦1 172 

♦3 175 
♦.30 1990 
♦1 188 
._ 114 
-1 148 

+2 30 398 
— 11550 
♦10077050 
♦3 208 
-2 306 
MUO 
+109 81 

♦00 91 

_ 97 

-1 122 
_ 151 
-.70 6400 
♦JO 80 


88 40 
130 0.7 
1100 — 
12S 1.1 
37 — 
100 67 
28 0 2.1 
80 3.7 
208 1J 
140 00 
18800 2.1 
130 30 
7300 20 
70 ZJ 
72 60 
6500 1.4 
114 20 
21 — 
55 90 


■- SPAM (Oct 28 /Pti) 


-1 35633 300 _ 
♦S1J72 6T0 1.7 


820 +20 1J016 787 1 0 

20600 +30 253 205 2.9 
2Si50al +00 313 234 30 
347 +7 433 3Z5 20 

161 -100 166 131 _ 
616 +10 6« 516 2.1 
504 +16 668 451 2.7 

12300 —16100115.10 — 

138 +300 179102.70 3.7 

835 80Q 615 2A 

Leflit 847 -3 860 S40 10 

Undo 884 — 988 830 1.8 

LkuH 330 -8 410 311 14 

Urt» 16700 +22160) 167.50 — 

MAN Pf 307 +6 367 295 2J 

IfedOMI 40000 »13J048*ai 309 10 

ffiO 822 650 — 

151 +8 288 101 03 

2.745 +30 3017 2070 00 

PWA 235 +9 2G2 210 — 

mtanm 505 -2 530 483 30 

And l 835 -2 960 822 00 

Plana *41 +450100 4ia 2J 

RNC 43300 +70052803 390 20 

RWEPt 367 *5 424 - 329 3 J 

RhetiE 1 J30 -16 1020 1030 00 

Rftnmtt 252 +1 372 254 2.7 


-2 287 20705 4 J 


FMAHD (Oct 26 / Uka) 


*2 154 99 10 

_ 176 121 10 
-00 106 54 _ 

♦0O4&9O3&BO 10 
♦1 233 141 20 
+.1517.40 8.11 _ 


-00 60 45 20 

♦IS 70S 502 10 

— 19) 100 00 

♦0 247 140 10 

♦I! 280 138 10 

— 258 200 10 
♦16 280 190 00 

♦2 704 287 0.4 
♦1.50 108 69 — 

-I 104 50 1 0 

♦I 1025*10 U 
+20 6700 41 

-1 120 8400 1.1 

-1 2S8 17S 20 
_ 31 1400 — 

+.1020.60 12 — 
_ 129 89 — 


Save 845 
TaOacA 3085 
■ TeWn 1,700 
Un Fen 570 
UnFart 1.055 
una 1050 

IWan 2035 
Vtadn 2019 


♦20 0280 0150 20 
+80 8J00 4,700 5J 
4553039 2.780 20 
+10 3.400 2015 70 
♦9 4075 3076 *1 
48017,70014000 5.1 
+90 8021 4000 5.7 
♦« 1.435 700 230 
+65 3090 2,410 31 

— 3.110 3000 2.7 
+130 11000 7050 20 

♦802.7151,745 40 
-20 1.7781010 10 
♦5 3080 2000 30 
♦110 8.100 5.100 20 
♦11 1.100 704 60 
-30 924 418 150 
♦905^14113030 30 
+S 1010 790 70 
♦10 7000 4000 20 

- 7030 4000 20 
►50 6090 3000 20 

+23012500 9.420 10 
+38 2000 1000 — 
♦1064000 3005 20 
+4 356 102 00 
-1 698 351 109 
♦21 816 595 50 
-56 4.450 2005 30 
+45 2.188 1085 30 
♦5 738 SO 70 
-30 2.400 950170 
♦SB 1,710 1,180 56 
♦153.120 1080 20 
♦953080 2035 10 


i r.l 

mm 

yjri 


642 +8 963 480 

503 — SS3 388 

920 -8 1030 700 

Ufiank 2080 -10 3010 2070 

SSS? 

1,130 +30 1000 905 

537 +3 560 315 

773 +2 833 BC3 

543 -7 564 304 

908 -81010 790 

1020 —1030 842 

736 -4 792 «7 

470 -4 680 407 

+2 484 318 

+1 685 395 

. 1080 -90 1080 1,140 

— MMMaa 1060 — 1010 1.4S0 

-a 584 429 

44 600 456 

-1 885 672 

344 +1 400 301 

lafod 1070 +301.4201020 

734 — 060 723 

+2 940 £78 

845 +15 940 770 

428 +1 . 449 310 

1,100 -20 1000 945 

000 +15 1,110 790 

WsnB 1090 - 2030 1030 


Swrt*<T 390 
SomUM 405 
SmMat 870 
SUnlM V 
SHHH 080 
SumOrt 480 
SUBfiH 813 
3ummr on 
SanTO 1,430 
SufitHW 734 
SimAl 1030 
TDK 4040 
Taoet 641 
7Wnm I.7&0 

T*ao 6B0 
TVraSl 784 

TanS* 823 
581 
774 

TafcRaa 817 
TooGo* 730 
IHn 418 
Tobuna 815 
TodsCP 877 
Tod 7E2 
TOho 18000 
ToPhS* 2070 
TWBBk 1000 
HalO *50 
T1MCO 534 
TrtUH 1.150 

Thrama 600 

1.480 

1.710 

IMkana 1 JB 0 
TKBPB 2010 
1*801 3020 

TkCaa 448 
HAopa 987 


3 W= = 



814 -1 782 W5 

1040 -io 1010 ass 

a rain -20 20001083 i 
680 *8 024 495 

700 420 2.780 2000 

.890 +20 4,400 3.472 

10» +10 1010 839 


-40 4060 3000 
♦II 705 645 
*3 636 400 

-101010 1050 
-301000 1030 
— 1.180 993 
-704^940 3000 
+1 708 521 i 

-30 20501020 
♦7 603 44B 
♦30 20802000 
-2 738 696 
♦7 313 273 
♦2 365 300 
-3 1,040 719 


1020 +10 1010 839 

In 1010 -10 1.170 905 

Sp 1040 +20 1.480 1,03) 

581 +4 830 395 

207 +6 2S8 231 

928 +7 030 565 

787 +2 785 £28 

727 -28 787 493 

439 +6 48( 315 

848 +4 910 611 

953 —1040 781 i 

501 __ 588 500 

1040 -30 2080 1,410 

1080 -101030 1050 

692 -2 815 690 

742 -7 510 B2B 

455 +10 536 400 l 

7B8 — • 851 679 

440 -ID 520 412 

1,100 -10 1,440 1080 I 

1010 +121.140,855 



►60 20001080 
„ 1,180 841 
-5 TBS 514 
+6 933 787 

aHB ^ 

-20 1050 938 
♦8 639 440 
-1 734 802 

— 840 577 
+3 523 438 
♦8 780 697 

— 1,130 796 


irtand 5050 -10 7000 5040 

—8060 602 

♦7 482 318 
2060 +102,1301010 

2070 -3020001030 

1020 -20 1,110 837 

708 +1 802 693 

5)0 +> 620 430 


-4 512 381 
-7D 6080 7.430 

— 1.910 103) 

— 2060 UH 
+381.110 775 
-10 20201010 
-10 1040 8«0 
-10 1090 1.130 

+20 810 411 
♦8 383 258 
-1 700 600 

♦10 623 481 

— 1080 1,110 
-312.820 2050 
-T2 628 7W 

— 0,4805090 
♦11 852 618 

♦0 747 428 
-102090 1.798 
-1 507 404 

— 1.100 837 

— 10801 «« 
—2 475 
♦4 4*5 288 
-0 1030 851 
♦7 361 252 
♦61010 884 

-IS 673 432 
-10 73* 811 
♦181,120 816 
♦30 1020 1090 
+14 615 674 
-281020 1050 
♦40 5050 3.780 

— 748 **“ 
-10 2010 » 

— 722 

-i aez ere 

— 1.850 1070 
+10 10401090 

-6 1,040 820 
60S 400 
♦IT 828 618 
-7 1.100 705 

♦i 351 see 

-6 555 3B7 

— 720 602 
*6 993 670 
♦3 907 633 

*&&tT 

-« 597 415 
♦TO 1090 1,120 

— 816 421 
_ 1,720 1.460 

-1020201010 

— 2000 1070 
♦1030402000 

— 3,400 2.740 

— 670 *26 
♦5 70S 520 

-30 2050 2000 
-10 2.140 1010 
-1 TSO 450 
-1 629 667 

♦9 730 512 

+10 1050 1A80 
*20 1060 1.190 
—6 788 Ba 
*3 873 870 
+6 1060 970 
♦3 779 

— 823 
-3 438 

— 30901 
-8 SOB 

— 2.OS0 1 
-10 754 
-15 731 

-103A80 

-10 2030 1 
+1 827 
*201050 965 
42 505 330 
-6 680 432 
-2 583 345 
-a 438 285 
♦I 416 272 
♦20 1000 835 

— 10301090 
► 20 1.430 830 

+10 10)0 W? 
-10 Z03O 1040 
-to 10101050 
-10 1060 800 

— 10501,110 


1 ST *04 

« S 

wung 909 

MeSw 800 

want 208 
W0I0K 4A6 
WrarfT 403 
vrW01 204al 


-.02 070 208 8A 20A 

-03 2.74 101 — — 

+.08 4J2 128 07 - 

-09 906 8.10 4.7 — 

-JB BJC &20 10 — 

+.12 802 700 30 _ 

+.02 2-85 2.18 40 — 

♦ 503 4 03 01 - 

—07 B02 9-70 1.8 — 

♦ 302 2.70 40 — 


84680 Bnrtaa 
87075 BrtMAI 
8401 Brreur 
17800 CAC 

108500 OIVWH 


MU JOlVdiW 

Mh +>a£Hi*£* 
Si 13 *24 73k 


IS33&I 


2400TWOT 

2IJ5S2SS* 

M73CQC CannSfl 


7 ►'a S7 6V 


•JiE3‘)2S , 4 

ni A as 

11*4 ilf* 

B BSE 


Z Z WNG KONG (Oct 28 /HX5) 


££ _ 
-- - 1100 
38.40 

3900 

CM«r 07.75 
arw 700 
ancP 22 J 0 
Ottart 18-76 
Dfwm 906 

GBatfa 4JS 
Ooco 330(80 
HSBC 80 
KLHKA) 13.70 


HSamB 5S0S 
HartCn 


80S 

800 

Hound 48.10 
WffiG 1405 
waatt iQA6 
WAIT 3100 
HCBe 23-36 
MOaad 10L25 
HKW1A 18.16 
M(T0l 75.76 
706 


♦051800 80S 
+.10 50 2800 

+.10 15.70 IQAO 
+00 523050 

♦.10 57 37 

— 81 58 

— (4 6.13 

►JO 27 JO )OBO 
+05 19.10 1800 

-.15 1600 305 ' 

♦09 809 4.10 
+W6 46 29-30 

•1 131 80 

+0S 2100 1100 
+00 8000 47 JS : 

„ 1300 fl.80 ' 
+10 800 505 
+000000 32.S0 i 

+05 24.23 13 I 

+.15 1600 10.10 
♦100 84 2800 : 

-.lfl 3500 2000 


USD Samp 
500 SNC 
15300 »««■ 
14500 SHTqI 
217800 SH.»lW 
80243 Scam 

isoo scorn 
233830 smarm 
25962 SaanC 
188043 5RBIA 


*j, nr, is> 
SIM 1t> 
IS w 
-lasn<i 11 % 
S12 12 
► UBH 


4ft A 

♦%^‘is 

Wlh 14>> 


384412 Sstdhm 




3O67O0 WL 
47786 T WM 
rasaoso rage I 

180*80 Ml 


Sllh I4‘J 
S7% 7 

-%»» JSW 

+% s5u nh 




— +3»i 20 li 1 * 
430 *: 430 *20 

25% . ^ 


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ft -v^ft 

ft 

« +}* 

27 +b t? 7 

ft ^§5 ft 

6 % 48% 6 % 


1000 CD30I1 
337377 CoS 
15350 OwanX 
5600 Dadan 


HDoawr 

94651 Oornar 
14800 OuPlWtl 
4135 DMIdBA 
2200 Enwn_ 


+.13 31.75 1700 
+06 30JS 18.10 
+0617.70 .12 
+101080 500 
+60 42B0 2700 

vt 1903 

+ 10 13.10 700 
-00 8400 48-75 
+05 3800 2400 
+25 25 1200 

-.06 1200 820 
+15 4200 2020 
+00 38 30 

+1 77 41 JO 

+.10 ’SS 3.10 

+ 02 ’tS 300 
_ 700 366 
+105 71 50 

+10 11 JO 8 
-JO 3700 23 

+18 41 2500 


JamdH 800 
Mam W0O 
2905 

19 

MandOr 806 
Hwnviw 2*05 
WDM 3400 
SHKPr 8725 
Sloafir 13.10 
SndE 3.70 
SwaO 1005 m 
SCIM> 408 
SHKCo 300 
SMrtA 57 
SadnB 9 
Toner 34 
Whaf 29.10 
wrtxk 1800 
mngOn 1030 
Wftnor 10 J 0 


1100 m 

SOSO Fhr*i 
10880 MUA 


5533 Friw 
Ms [00 FafinV 
79000 FMSnAl 
■40070 4Sanan 
51700 OamMI 




233527 T8tU» 

100 ton* 
35311 rhotran) 
1 056181 TdOom 
377252 mcnP 
188888 TnM 
774*0 TrfnM 
118052 MW 
7200 WM 
485 UCotpl 
9490 UUQoat 
1008 Vlcani 

G382S0VHC8 

23337 WMtB 

8300 mono 


-I.m{ 18% 

is% 

-%£5! i 8 *i 

-la fife >0% 

♦%3O{£0% 


-1.S17*. 17% 
♦ %*U% 14 
14% 
SlO D% 
S 1 *% I* 


♦%WL 

♦%SB%DN 


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+%SU% 16% 
♦%&% 4U 


MONTREAL (Oct 28/ Con $} 
4pracfa»8 


387S 

T87D0 Same 
9000 GmtaA 
10240*3 
8700 
54735 GU8C 
400 HarSlA 


21381 Hearti 
110388 HemM 




♦*l iSt 
♦«:*»% «% 


+05 2300 14- 73 ; 


♦061800 900 
+1617.40 9.05 


St — MALAYSIA (Oct 28 / MYR) 


20551 HfB Del 
■ 3119 nrata) 
114744 HHBN 
34708 PLBl I 
118468 t m aa cq l 
■00078 ancdl 


♦05 800 302 20 _ 2SS UA«? 

+00 23.75 16J5 1.1 — S7160 BnaKS 

►JO 19.10 1200 00 — 


+A0 1800 1300 1.1 
♦02 6-30 3.10 10 
+04 80S 208 OJ 
-02 605 302 12 
— 8.40 500 32 
+.10 2*10 1000 (L7 
+10 20001200 — 




— 4700 Ivaco* 
Z 13808 JnraxSt 

310 KanAd 

— 267978 LdbwflK 


la^aa 

lii 

1 J 1 

15% -%»«% 1S% 

^ ^ftltt 

smm 


AFRICA 

SOOTH AFRICA (Oct 28 /Rand) 

♦ /- nil la M M 




Z .- SMGAP0ffi(DctZ8/SS) 


D8S 1090 — 12-70 1000 10 6.8 

A8N* 17X0 — 1900 16 08 +. 

SdRAa 208 +03 3A8 2J4 30 — 

Heam 302 +.12 304 2A6 31 — 

nehep 300 — 80S 402 50 _ 

Kappa) 13 +.40 13.40 9 10 — 

OCBC 1500 — 18.70 11 1 J — 

OLO 7 JO 700 375 00 — 

S«rF 13J0 — 18.10 ia*0 10 — 

SPren 18X0 +.10 17.10 13.10 10 — 

S*pnjT 3X2 — 300 314 08 — 

Start 302 +02 4X8 318 3J — 

T*U» *82 — SJO 308 1.7 — 


40975 Meeadil 
84098 Magna) 


11X0 +101100 &4S2LS — 


BrtMn 
GnSaSt 1010 
GoStna 633 
acres 858 
GunQC 
Gunxa 
Hanhyu 
ttartEH 


_ mronPf 216 -200 287 200 3J7 

_ RsnW 244 +4 313=000 20 — 


I (Od 28 /Krona) 


HtSak 
Katana 
KataRE 810 


« z 

714 46 796 478 — — 


Scfimo 905 41160 l.ma 888 1.4 

senum 404 +a 43 a 3so ix 


FRANCE (Oct 28 /Rs.) 


210 JO +70 358204X0 — 
611 432 768 504 30 

728 425 814 655 20 

472 +7X0 913 454 *8 

238.70 +2.60 330 2171*5 

835 *14 778 570 4.7 

2S4JQ +9-3038060 227 IX 
503 *7 AO 883446.10 30 
2,785 +35 3.750 2080 3J 

528 +15 753 S03 31 

1.184 +41 1.4Q0 1,033 40 

849 4251.(55 794*4 
1 18700 46A0 22550 1S860 90 

183.70 +1.70213X015830 — 

2X70 +81 2X70 1.7)1 20 

18700 +8 205 13160 *6 


404 49 438 350 IX 

Sams 61700 480079030 807 21 

SaAnfln 639 +250 895 810 10 

521 -10 680 480 IX 

Il8«m 28258 +*80 32823550 2.1 

vana 316 +10O 380 288 3X 

Voba 50000 +*85050 488 20 

VSN 376 +00 400 317 20 

322 — 415 318 28 

48800 +400 526 436 10 
437 JO +5-30 954 418 00 






WWW . 34*00 +900 443 337 00 


993 —7 1,073 780 1J 
218 — Z7D 205 10 


... nHur(0ctZ8/iir8) 


1X85 +16107O1XO4 3J 
44050 +2-70 465 340 2-0 
21800 +26030000 201 20 
782 +10 IJffi 708 72 

486 +15 898 370 3X 

38*10 +10 498 351X0 — 

38400 -3X0 737 370 157 


5.780 *206.100 5000 0.7 

725 +21 1,002 685 3X 

714 +6 NO 810 — 

323 *3 478 317 10 

330 '+3 077 780 24 

47100 *250) 749 418 30 
085 +2 740 508 2J 

38000 4900 436356.10 6.1 
328 41100 392 208 60 
25000 411.60 282 191 119 
897 +4 1088 SKI — 

780 *SD 80S B30 84 
770 43 830 835 1 J 

3.46a .... 3A87 2.750 20 

-IB 2069 1,700 *0 

►5 734 556 28 

7.10 +JS 18.70 8.15 80 
100 +290 182 100 ax 
605 ._ 939 560 3L7 

5.050 *10 6.020 4 J40 1 .0 

393 -2 £76 38S 20 

2X80 -4 2.754 1070 0.7 

30*90 *3.00 383 23850 2.0 
30 0 -4 845 M» 3J 

<2800 >10.09 <930) 398 20 
550 *14 080 488 2.9 

<30 718 422 80 

730 _ 1078 6S2 OX 

30.10 +30 110 37.36 7.7 


B Cartel 3,475 
BIUzAo 3070 
BRoma 1048 
Bsttgl 112 

Bwnn 20,400 
Buna o.no 
CH 1.770 

Cansp 1000 
Conor 1 335 


♦75 5082 3040 60 
+246 3085 2041 _ 
+85 2.450 1020 10 
+4 211 78 — 

♦420 290501800) 10 
♦130l2«oai10 — 
♦90 3.100 1084 20 
♦802012 1082 ~ 




CJdHn 1000 
cuts 10OOV 
DIM 9000 
FarWn 1X31 
FW 8X2£ 
au n 3083 
FMa 3.75Q 
Fonspa 11020 
Gemna 1X77 
GanAm 37000 
OKM 3000 
«Pr 2*700* 
a sj9o 
M 10.450 
ina 2X15 
Mem 10X30 
4050 
18000 
MMBnc 12,800 
Montod 1X50 
□hat 1059 
PlraH 3,595 
PhSpa 2000 
IMS 1*870 
(toxic 8.300 
SASIBl 7.780 
SM 819 

3TCT 4,620 
SBHaA *510 


♦35 2099 1X83 *8 
♦36 2.010 040 — 
+8 2018 1040 50 
— . 13X74 9045 _ 
+782084 1.123 — 
♦225 7030 *071 10 
+110 40202.110 2.7 


-- 33 681*6 

„ BS.75 97152 

-1 060 250 1-3 

-4 88S 438 1 0 
+200 107 15 06 

+2 1B4 144 09 
+0010650 86 9.4 

+0010850 79 9A 

-00 430 282 1.7 
-244200 320 10 
-2 134 87 2-9 

-O 134 86 20 

-00 110 7600 80 
+8 430 251 10 
+100 89 3800 24 

+100 311 137 30 

*00 312 178 3-0 
_ 550 IS 20 
-00 215 IS 20 
+360 372 17 2.1 

+1 153 14 10 

+1 166 100 1.7 

+100 186 102 20 
♦I 158 99 20 

-1 184 122 — 

-1 181 13*33 
+100 143 9000 10 
44 BJO 10 
7J390O — 
+100 19B0O 9700 10 
233 129 20 

S 331 10 
390 10 
_ 144 35 2.1 

+3 110 89 3.1 

_ 122 0200 14 
-00 128 78 50 

_ 1S3 106 50 

-00 175 105 50 


6.750 
HrtmBk 509 
HtcM 094 

HtCBU SZ7 
HtOrad 1040 
HWcH 1000 
KHax) 1080 
HtMet 1000 


Htzam 554 
HofeSP 2,410 
HohlMt 462 
HTo«t 718 
moB> 2A00 
Honda*! 1000 


-10 1.W S 

_ 1.120 812 
+4 846 712 
+10 2040 1080 

1,120 820 

-20 2060 1010 
— 1030 830 
+6 759 502 
+8 589 487 

^2^ 2^0 

il'S'S 

+20 2040 1080 I 
+10 2330 IjBSO 


M10 +10 1060 1.400 

+7 794 653 
46 780 506 
751 -5 788 484 

1050 _ 1090 1020 

870 +14 617 450 

1090 +10 1000 1030 

-2 BIS 441 
-It 1.110 742 
107D „ 1040 1070 

1X00 +101010 1.180 

S a Si m 

480 +11 534 345 




-102X90 1040 ' 
-2010501010 
49 66* 350 

~4 889 70S 

1030 734 

-10 1,120 780 


-1 745 

+12 1.160 

+2 746 


NORTH AMERICA 

CANADA 

TORONTO (Od 28/CanS) 

4pm cJosa 



no 

IT STt TT 
24 

^g5 a 5 

iiA no iw 

ilii 

ft 

ai +% » i|h 
1?5 * ^13% 


BOTH *65 


tnptst 83-30 
JO 10700 


Kama 76 

Home 06J5 
UbLte 8000 


ft ftft % 


470 +15 470 456 


-42%+1%SC% 41 
20 -%£20% 20 
12% ♦%SU%12% 
7? +%S% 7% 


+.15 10.95 8.70 *2 
_ 29 17.00 2.1 

.„ 123 9300 2.8 

265 119 20 

♦2 20400 18250 1.7 
+2 506 344 ZB 
+1 140 102 10 

-J9 87 3630 ... 

... 31 2a 75 20 

♦00 60 42 B.0 

-.10 4 JO 3.45 10 
+.75 121X9 m a« 
-XO 10X3 800 20 

— 7300 48 as 

+.15 1*25 7X5 *1 

__ 352200 30 

42 30 4.4 

+xs 2300 i90o aa 

-00 BO 53.75 50 
_ 7175 7.94 1.0 
+1 130 8700 1.7 

+.10 47 23X5 _ 

-xa 2a7S 1*75 7 A 
34 18 1.8 

-05 *95 2.15 10 
_. 104 65 10 

*23 122 78 10 

-1 8*50 8550 3.8 
.._ 75 41 20 

... 100 75 1.5 

♦25 22 1500 

+29 33 28 1.7 

_. 91 5800 72 

-.10 7.76 *76 80 
+.16 5800 3700 *4 
_ 38.75 2300 1A 
-00 2S0O 1630 1.8 
+00 12B 72 1j* 

1300 B-70 __ 
+J3 20 15 10 

♦00 10400 79 10 

_ 882800 IX 

_. 37 27 20 

-1 184 102 Z2 

-00 58 40 1.9 

-25 46.75 23X5 10 
_ 488 350 OX 
-00 78.50 33 *0 

— 230 151 20 

ao 4*sa ai 


_ — AUSTRALIA (Oct 28 /AUSlS) 


HpTVNw 24000 -90027X001100)1 
NTT 890000-5000 10KU74UCB 
NpYWO 501 >2 630 384 

NpYUan 847 +1 B87 B21 




+1 667 521 

-S 619 385 


NpZMl 

WCn 1030 -20 1070 1020 

529 63* 349 


1070 +2010701X40 — 


1.1S0 +10 1020 1070 

HrtnOI 821 -6 902 701 

NrtnSt 503 +13 003 325 

MM 1,120 +201X70 813 

831 -4 S59 401 

781 _ 1040 780 

NrtM 2070 +20 3000 2060 


HrtnOI 821 -G 

NrtnSt 503 *13 

Nartnb 1,120 +20 1 


.- swrrrffliAND(0ct28/Fre.) 


♦66 2,430 2000 _ 
+430 155468052 10 
+165 0.440 4 453 2.4 

+i3o iaa»i£s» 2.1 
+400 19.780 12X10 1.8 
♦471048 870 .... 
►791140 1,730 _ 
♦155 0100 3A40 1A 
♦65 3J85 1,970 
♦7S3LU) 17200 10 
♦140 12190 7080 2.4 
♦300 10,(54 7X00 36 
*54 1088 490 


♦225 8030 4.086 £2 
+40 7X00*145 ™ 


+7 292 
-2 721 
♦3 713 
— 308a; 
+221049- 
+3 260 
+7 7*7 
*4 070 
*6 W 2 
♦5 422 
►20 3070 ' 
►20 1.700 
_ 2032 : 
►10 683 


-431030 325 
-1 1070 723 
-20 1.140 972 
-303070 2,790 
+7 825 251 
♦20 2X10 1070 

♦17 467 

-2 965 
-3 758 
+8 910 770 
.30 6,150 s.040 
+9 744 420 
-70 2070 1,730 
♦5 984 S2B 
♦20 10701,490 
-2 448 284 
+4 778 006 
-3 801 998 

-5 888 479 
-20 2.1201010 
+3 400 288 

— 1040 822 

*30 5a70 1010 
-71060 829 
-20 1080 1X60 
-10 ZA82 1,700 
-4 420 339 
-5 828 518 
+1 570 430 

-2X70 2.4)0 

♦3 808 425 

"ITi 

3 4S4 303 


Ntx*a 1020 _ 1,710 755 

«oe 305 +X 372 264 
MOMc 1080 -10 1.700 1X30 


Honan 1080 +20 2070 1,790 1 
IHha 752 -10 863 866 


z z SSSLn ft 


688 +1 773 682 

1,000 -10 1.100 887 

782 *1 833 533 

18 + l!i. 8 S 88 


CBynw 1080 _ 1040 909 

Omran 1,780 -1010901080 

OnoPh *540 +20 5010 4010 1 


OmaXm 1070 +2010001050 

Orient 832 -2 7*4 811 

3020 +50*32020001 


-2 538 408 
-4 778 SO 


Ptonf 2010 +10 3X48 2.410 

PHmall 446 +3 S82 390 


120 
508 
*11 

uihiw 5.70 
ConanSk 7A0 
CfimJr 1X6 
DmnMng 038 
Etna I 305 

isr tss 

Frttx 2JB 
FRenc 3-58a! 

1.18 
2X0 
2X7 
1X3 
1X8 

r.w. 2.18 

H0« 100 

rttnsfKS 103 
lOAua 1100 
Ndda 3J5 
Until 16.44 
Don N ZAO 

207 


456 -4 610 440 

979 +181020 705 

*170 +40 *660 3X30 
1020 +201,7701080 
613 -2 658 447 

1000 -20 1040 1X30 

837 +21 704 513 

2000 -10 2.680 2.110 i 

1.410 -40 2,1501010 

2010 _ 2070 1050 

+81000 886 
+5 SOS 415 
-1 1000 870 
BA20 -100 7X80 8050 i 

4OB0 0340 4 430 

4.1TO 4 SQ4jeBOXXm 

1080 +101020 1080 1 


eeK.* ^!«<S=e 



-.10 505 
+ 0011.12 
-J37 6.10 
-041100 
-.05 302 
-04 BJ2 
■ — *70 
-03 205 

— 20.72 
-03 158 
-.03 *82 

_ 108 
+021508 
-04 1.18 
-v94 503 
408 6.46 
-02 2000 

— 300 
+03 3AO 
+04 1X30 
-02 5.70 
-05 H«! 

— 906 
_ 102 

-01 006 
-08 802 
4.03 102 
-01 1.40 
_ 3A5 
-05 3.56 
-02 1.47 
+02 200 
- at® 
-02 1.76 
_ 1-78 
*02 205 
+02 2.02 
-02 202 
-XO 11-30 
-03 *80 
+02 1804 
-03 3A0 
-03 308 
-03 1004 
-.14 *21 
-081308 
-AI 700 
-081000 
+.10 828 
_ 2.79 
-.11 *18 
-03 5.82 
+02 2.16 
-03 2A3 
+ 3X8 
-07 *25 
-.15 9X5 
-.10 400 
+01 806 
_ 1.74 

K if. 

*01 3X0 
-.10 402 
-06 7.10 
-.10 12.10 
-.07 300 


358 00 — 
8X2 3033A 
305 IX _ 
70S 30 322 
2-00 2.7 _ 
3J3 50 — 
300 ai — 
ixi ax *7 

18 1-1 320 
204 *8 8X 
3.15 &2 — 
004 _ 

1200 *5 33.1 
004 8.1 — 
125 SJ1BA 
*25 50 180 
1800 17 — 
30 — 
20 — 


423381 AhmAI 
780192 AmBerr 
12250 AttoO 
194176 ftvanor 


NOTES ■ Meat m (Do pm* n « aMn I 
MrthM aiMrt lad aa morty iW bad*) 
— — m ■rwi.mai (ana* 




mml m Ex Kdp 




57800 BOTnA 
24778 9C Ta 


24778 BCTrt 
711732 BCE 

™4S00 Brnmk 
917448 BkMent 
348196 ffld!o«S 
101150 Bamrtt 


16% -%S15% IS 

11 Wf 11 

25% +%S25% 24J. 


109708 HigOB 
810 Rwil 
127417 Ren Efl 


ft ft® ft 


199000 BmlrtO 22%+%SC%2i% 

■ TOKYO - MOST ACTTVa STOCKS 


33320 Hgei 
2441“ 

12B1 

1104770 RoyShCK 
20465 RoyOrt 
Friday. October 28. 


86 +%5W 8 %* 

27 *% 827 28% 
31% u£C 31% 

“i*4lSa 

ft 

ft 

1994 


FT FREE ANNUAL REPCWTO SHWIOE 
TM tm rtrtba tana mrtW mt «• n 
amt aaoblrt art A tat MM la am 
FOUK Marti 7re0770bpm24iambdM« 
artam* « Ml rtl 719 SO. I MM »M HM M 
(K dW *U n 770 9779 +44 >1 7» JC2 
mm trt a* !M « m OM m«M8 4M. «rt|rt ■ 


*■*« *■’ "**’ 


z 

4J0 1.1. — 
608 8.1 — 
0.78 a* — 
033 50 — 
085 8.1 190 
1X0 20 — 
0.88 20 00 
2X4 2J — 
*1 — 
5.1 — 

7.7 7 IX 
112 70 ^ 
1.10 2.4 20 

’i?5 70 

1.12 30 — 
1.35 _ — 
,78 20 430 
63 8X — 
15J0 *9 310 
SX __ 

1.7 710 
40 2OA 
*0 — 
*7 120 

XE 10 

.72 OX 7J 
3X0 30 — 
00 20 
302*8 
50 - 
108 — — 


Nippon Steel 

NKK 

maetti Zbsen 

Sumttamo Mtt tad 

Mitsubishi Heavy 


Stocks 

Closing 

Cfanga 


Stocks 

Cfosfcig 

Change 

Traded 

Prices 

on day 


Traded 

Prices 

on dey 

15.0m 

396 

>2 

Sham 

40m 

1.790 


7.4m 

297 

+8 

Kobe Start 

4_2m 

330 

+6 

a.7hi 

554 

+6 

nm.. 

asm 

727 

-23 

50m 

361 

+7 

Kawasaki Steel 

3.3m 

444 

+2 

4.8m 

775 

+2 

OW Had 

3.1m 

762 

+1 


Any time any place 
any share... 


200 *8 130 
2X8 6B — 
300 08 — 
203 20 — 
400 60 — 
1.15 8J __ 
4X8 00 — 
402 — — 
80 9.1 
50 — 
8.10 40 — 
205 50 — 


Instant access to up-to-the-minute share prices from 
anywhere in the world 


1 INDICES 

1 

| US INDICES 


Od Oct W 1994 Oct Od Oa 

28 27 26 Kty LOW 282728 

1994 

ttty low 

OawJaew Oct Od Od 

28 V 26 » 

1884 StaeansMton 

9 Is ty Low 


Whether you’re doing business in Berlin or hatching deals in Hong 
Kong, FT Cityline International can link you with all the UK stock 
market information you need: 


• real time share prices 


i daily unit trust prices 


Cm* {29712/77} 19507X9 1S1E0.17 18335X5 2541040 16/2 


PC ft* 1978) 


M imm awwnn 


H O*mWl/10H 

NUnkai/iroi 


20212 20122 20170 234000 3(2 
10706 10709 10602 1138.10 372 


201700 27/10 
90*60 5/5 


C8S IWWOH&ld 83) 437.8 4300 4 70S 

CSS M Sr Era 83} 2740 2700 268.1 


45400 31/1 
29*80 31/1 


40500 Zl/B 
25700 21/8 


OaSAMfcnftttaK) 
Timed hdoCn/ai) 


38(.«3 379,75 ft 46066 HI 

1 025.13 1020.19 Id 122225 1/2 


37S« 25710 
1011X8 6* 


C<1 40 (1/7/89 2D9Sl17 209042 208003 

Nanny 

(MaSE(hd)(2rVS9 105902 105*15 1055.18 


393006 3875.15 3848X3 397806 359305 387838 41X2 

(3 I/I) [4/4) (31/l/MI (OTA Z 

9521 9518 95(8 10501 95.16 109X7 6409 

(21 /n (2671(8 n»1IW? (1/1001) 

153077 148502 147007 186229 143550 188229 1232 

om cano) pnm won 

181JBS 178.16 17704 22706 17505 25548 1050 

(3/1) PW) (3US/99 PM/ 32) 


i updated financial reports 


■personal portfolio facility 


80200/1/91) 


1371.74 1357.11 135400 194285 8(2 


DJ ma Mrti 3B8U4 (388209 ) lew 388*37 RB34X4 ) (TtawartKaW) 
Day% W 393201 (3675.16 ) Low 387300 (3848X3 ) (Actu*4) 


KaUCmvOnm 306802 306025 007828 


FT Cityline has proved invaluable to business people and investors 
in the UK for years. And now it is available from anywhere in the 
world. 


bdmspi psnzafl 4az7ao 4700/0 4863709511000 u/g 


28910 28800 28867 


MB* WrtfclVS) 
CDmpwdB+ (197S 
RxtMo§§ (VUB3) 


419505 421202 42209/ 427802 20/10 

428860 «£5J0 426000 460900 23/3 

207272 708117 2059.18 218200 1/2 


329806 20*4 
386800 24* 
188848 ZBft 


f>SA Gen (31/1260) 58244 5S8I0 5512X G879XD 19n0 


Q*cnlBgHtiEP/l/B3) 34X09 34090 04*75 41579 HZ 


wxGmdRa/ugn issej 194&9 *9220 197200 *n 


SES At-STttt(2M/75) 581.82 58000 58102 

SouB ttfe) 

JSE Sold (28W7S 22320* 22970 22800 

J5E M. (Z8/9/78) 88020* 65880 85700 

SoBffi Kona 

KoTtBOrefinvwBor iobzsb toe*7i 109203 

Sbrti 

MaM SE P0/]2ffiG) 296X3 29101 28886 


253409 7/3 
815700 15/8 


174900 14/2 

544800 19/1 


NASQAQ CBp 


<7377 48505 48162 48200 
OT 

563.10 554X8 551.13 5B1T0 

(28/11? 

<190 4201 42X2 4604 

P«8 

259.43 2307 25301 20X1 

nm 

458.16 4S09 46353 4009 

BO 

776.15 70.47 783X4 801B3 
HIM 


SBF 250 (31/1 Mfl) 
CAC *0(31713871 


126602 124352 1231.77 158820 2(2 
190509 1 BS8.11 183104 238803 2/2 


122708 25/10 
182*42 23/10 


MtrwardnGm (U2/37J 147100 146060 1455.40 


GmRf 

FAZ AUo^l/1258) 
o— e oow8 i/i2fig> 
MX (9Q/12R7)T 


76934 76327 78332 888X7 18/5 
2168.10 2169.4 21685 2*6550 2ft 
3HLS 301320 203150 2271.11 IK 


74204 5/10 
211600 5/10 
1B6Q58 7710 


Sate ft H (31/123) I157J9 1F3S.7Z 115105 
SSC General (U4R7) 8S607 87857 6S*18 


143X4 3171 
1093X9 3171 


1138XZ Z77I0 
SIRS? 27/10 


Dow Jams bxL Ov. Yte« 


AMmSEpvuW) 
Hobo Kpbq 
Jiang Sercd/7/frQ 


(fl 82208 818.49 118*58 1871 


937147 930*58 9SS244 1220108 4/1 


BSESH8(I979) 


427*71 4328.7* 4357.44 4S2&57 12/9 


'thaftBPiOOimST 660*56 859*97 668557 

1UM 

Banfirt SET (3QW79 1SO&12 1501.73 151*07 

itartay 

WmWOn(>^1993 & 3W58X 348095; 

MSUJ 

US apteM (1/1/7016 6360- 8336 6305 


S & P Ind. DW. ytekl 
SAP bid. P/H rabo 


Oct 21 Oct 14 Oct 7 Yes' ago 
2.72 2.71 2.79 2.7P 

Od 26 Oct 19 Oct 12 Year ago 

2X0 206 2-37 2X2 

2082 21.11 2091 2801 


■ 8TAHPAHD AHP POOB8 BOO Nflm HJTUHE8 SSOO Omen indax 

Opon Sett prim Change Hgh low EdtvoL Open bn. 
Doc 487X0 476X0 tft« 47690 4G60S 67,174 224^00 

Mar 47050 479.40 40.00 46Q10 471100 2.469 12^22 

Jun 4790S 483-25 +9.00 483.70 47300 222 3074 

Opon Ml art Bguns aa tor previous day. 


Jrfala Cnm(ia«8a 51&41 51755 51G0Z 91258 91 448x2 127 


ESI OrtrtX * nm 183019 181006 179804 2062.18 am MUM 1/7 


Euratiack lODpeniwo) 132&B1 isoaxD noan isiaifl 31/1 
Eure Tty-100 (260901 117534 11500 114832 1311 01 2(2 
JCapeOpis 01/IZOT 00 33*06 333.45 ZB0.79 5^ 

Bsugs tnmnnm isub \wm 18077 isua 2B9 


1298X8 S/10 
113M8 sno 
29028 21/3 
Ml 56 21/4 


■ MEW YOnCAGTm STOCKS * TRADQta ACmHTY 


Bra COBW ltd (1972) 82*21 612.73 81041 817.17 IQS 
MB Ganorf (4/1/94) 10100 9920 9880 131800 IK 


5BU5 10/1 
94*00 10/1 


■ CAC*40 STOCK DOMEX FUTURES (MATTF) 


Wrt C2S CI&SAtS) 18805.16 1979606 1974609 2166201 IK 
B*sOOO(inQ«9 288.79 287.14 28650 311.71 IK 
Ttybttfl/64 1567X2 1968A4 158804 171273 13» 

Jd Secdm (4/UBffl 219006 219*74 219*80 25008 8/7 


1738974 4 « 
259X2 4/1 
144097 4/1 
1873X3 4/1 


Open Self Price Change Ugh Low Est wot Opwi M. 
Oct 18840 1358.0 +37.D 1895.0 18000 33078 11081 

Nov 18700 1918.0 +800 19160 18680 27084 20X02 

Dec 1879.0 19240 +305 1925.0 18750 611 27,335 

Open M*mt fi^uae ter pmw day. 


nSCmpJfiHMQ 111304 1101 J4 110504 131*48 5/1 


Gea Motor 
Oortpoq 
HribwtDn 
us stw 
(UH NtyHco 
USX Urtan 
Sprint 

TriEfcBOB 

Fort 

BM 


Oort Chrtgo 
price on day 
40K 

40U +X 

36K *4Ki 

17«4 -14 

m -h 

IW 4M 

33 +H 

NO 

23VS +H 

75* +n» 


• vukm #B« 0 ( 1 ) 

Oct 28 Oct Z7 0et26 
Not YWk EE 381X30 3Z701O 32X528 
AIMX 17X02 21474 18043 


Hsues Traded 2079 2075 2585 


Itoctangad 
Nm Mgris 
Now Lorn 


1046 1560 977 

621 688 1010 

612 688 89B 

97 44 19 

128 173 181 


- Sni oa 22: Taiwan WeMried Prior 677098; Kcn> Ootrer Ex 108&8O Naas rakes rt <8 Ww are 100 ncepc Auatrala AI Onarery 
mj Mty - 900: /%»«1 Hwiad, BBXO. HEX Gen, MB Oen. S8R!Sfl. CAC** Eure Top-100. GEO Tcnwo OompjMatrts 4 

Irtrtrrta and DMC - rt 1,000; JSE QnU - 23S.7; JSE a hdmrirti - 98*% nvse Ai Conmen - SO and Standard and Pacta - la H 
SS5. ♦ Tererto, MOoaed.WUnarart»a. t iBB/DWt rtw^re Indrtc Qfl 28 - 206*88 ^HU9 


T Conecdan, • Crtatotoj at 1600 QMT, • 
4 OJ M, hdrt ftoeredert dqr% Ngha 
Bade wtiarew the aehirt d^ra nigw end to 
during ow day. (n» aguw in reacierta an 


Pn-tortw bend* p inAedrirt pla UElto* FmkU and TramMBHtoK. 
and tom os (ha Mogn or Km /dgtart end towart price* readied tumo»rn day br each 
m (Mnrtrd by TcMort) repreaert 4» Ughm *nd knwt vrtuw M »a hde* tw reachad 
peidoua dtyty. * 3rt<art to oflMri latrteuMaii 


The Future's History. 


The largest provider of dedicated financial ultimate financial pager on the market. Try 
paging worldwide. Hutchison Telecom, brings Pulse for FREE now and you'll scon see why 
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information than anyone else, it really is the Call OSOG 2S 28 26 Ext. 1 j4 today. 



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FINANCIAL TIMES 


INTERNATIONAL 


Complete details below and send to; FT Cityline International 
Number One Southwark Bridge, London SE1 9HL matl0nal 


Postcode: 







FINANCIAL TIMES MONDAY OCTOBER 31 1994 


27 


CURRENCIES AND MONEY 


POUND SPOT 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 



1 ' *:V 


;!^f S 



Oct as 


doting Change Bdtoffar 
m«-pa(nt on day spread 


toy** Md 

i tow 


Ora month Three month* Ora year Bank rf 
RWb KM Ra» NPA Raw KM ftp. Index 


Europe 

Arena 

Btigtum 

Danmark 

fintand 

Ram 

Qemmy 

Greet* 

Mend 

ittiy 

Luxembourg 

NeMlndi 

Norway 

Portugal 

Span 

Sweden 

Stafaariend 

UK 

Ecu 

SORT 


tSch) 17P375 -00078 281 - 488 17.2735 17.1585 

(BFr) 503636 -0006? 455 - 414 60.4600 503580 

pKr) 95831 +00018 775-888 

fFkfl 7.4746 40032 642 - 850 

FFi) 03880 -00037 331 - 828 

PM) 2.4505 -0*014 <91 - BIB 

Pi) 377.172 -052 974 - 368 370209 376.162 

(S) 1-0138 -00013 181 - 148 1.0166 10107 

(U 250628 43.13 46B - 788 250683 250612 

flPi) 500935 -00052 4S5 - 414 504800 502590 

(R) 2.7454 -Oi»2B 437 - 470 

(MO) 100489 -00081 440-638 

(EsJ 250344 -0053 188 - 602 

FB) 283277 40087 849-104 204.313 200469 

(SKH 110889 400473 572-008 11.7071 11.5693 

{SR) 20460 -00027 445-474 

B - - 

- 10851 -8*2-880 

- 0911969 


Oct 28 


Europe 


WORLD INTEREST RATES 


Owing enrage BxVoffer 
nad-poM on Cay spread 


D art nM 
Ngh tow 


One month Three months One: 
Rate %PA Rote WA Roto 


ear J.P Morgan 
KPA index 


90309 

7/4950 7-4480 
04038 08884 
04570 2/4422 


2JS14 2.7413 
108777 108330 
250971 246.790 


28534 20401 


17.2332 

03 

17^213 

04 

- 

- 

503835 

07 


07 

408535 

1.1 

96773 

OB 

9-5961 

-oe 

262SB 

-as 

W.feWft 

-ai 

&3815 

03 

83148 

09 

2-4493 

ae 

2.4458 

0* 

24123 

10 

147130 

02 

1.0133 

02 

1/015 

-01 

2512,10 

-2-8 

2S23-1S 

-27 

2S71-S8 

-26 

snartM 

07 

6Q-3G35 

07 

48*535 

1.1 

2.7441 

0.5 

27402 

as 

27047 

1* 

10*484 

0.1 

10.6517 

-oi 

106625 

OO 

262074 

-63 

266254 

-7.B 

- 

- 

20*5.322 

-2J3 

200382 • 

-ion 

2G7/497 

-1.7 

11.6099 

-22 

11.7389 

-23 

11*248 

-22 

2.0428 

16 

2-0382 

12 

1*94 

25 

1285 

0.1 

1.285 

ao 

12791 

05 


Aiganthe 
Bn Hi 


(Part) 

CRD 


18298 -0.013S 230-242 
18780 -00188 747-772 


18378 18228 
18000 18740 


Metico {New Paao) 583 

USA « 1*5 

PecHe/Wddto EestMMca 
Austnria (AS) 2.1 [ 

Hong Kong (J-QCS) 1Z* 


-00174 

9O4-S20 

22130 

2.1900 

21907 

08 

21891 

04 

21824 

04 

-00392 

555- 822 

5.6128 

5*645 

to 

- 

- 

- 

- 

- 

-00142 

230-340 

1.B383 

1*230 

1*229 

04 

1*225 

03 

1*123 

07 

-00182 

838-860 

22052 

21819 

21852 

00 

21B65 

-02 

22046 

-a* 

-01089 

406 - 499 

12*583 125404 

126332 

as 

125312 

04 

124807 

07 

-04688 

09S- 488 

51.4020 50*070 


. 

_ 

. 

_ 

, 

-0658 

918-129 

158*50 157*00 

157.664 

32 

158*89 

3* 

151.244 

4 * 

-grown 

42S-487 

4.1785 

4.1416 

. 

• 





-00278 

390 - 398 

20635 

26346 

26418 

-1* 

2*488 

-1* 

28718 

-12 


6.1453 6.0857 
24063 23870 
5.7296 58789 
68238 68124 


Malaysia (MS) V 

New Zoafend (nzsj at 

PhCpptnas (PaaQ) 404282 -03523 313 - 168 405400 408Z75 

Said Arabia (SR) 68902 -00537 879-924 
stngapora (SS) 28890 -00184 974 - 905 

S Africa (Com) 99 £883# -08475 80S - 872 

S Africa (Fin) (R) 05346 +00085 163 - 528 

Stub Korea (Won) 129004 -1283 238 - 368 130486 129382 - - - 

Taiwan (13) 4287S8 -04 613 - 963 428597 422611 - - - 

Thtitand (BO 404495 -08124 206 - 782 407670 404200 - - - 

tsw ram lor On 27. BUtoSer wnata h tea Pound spot table show griy tw tat area datana ptacea. Forward res* era not rflreoty quoted la Oa radre 
bur are infeed by curare Hm ae taw** maw criestored by tto Bn* el Entfnti. Bam encage ISOS ■ UJQM. Oiler ml IImm h bom ore ml 
the Dofcr Spot Httn derived tan THE WtaifleUTBtS CLOSMB SPOT RATES. Son* whin am anU by ttw F.T. 


CROSS RATES AND DERIVATIVES 


115/4 

Austria 

(3dT) 

10*175 

+0*67 

1172 

Belgium 

(BR) 

31*400 

+0285 

1172 

Danrnrfc 

OKI) 

5*021 

♦00521 

88.1 

Rrtend 

fFW» 

4*040 

+0.0593 

110* 

Ranee 

|FR) 

6.1666 

+0*424 

126* 

Germany 

P 

1*094 

+00122 

— 

Greece 

Pri 

232320 

+1*9 

105.7 

Mend 

K> 

1*014 

-0012 

74* 

iwy 

W 

1543.78 

+15*5 

117* 

UNsmbourg 

(LFrt 

31*400 

+0265 

121.1 


0=0 

1*910 

♦00128 

88* 

Nonray 

(NKri 

pyap 

+0.0517 

- 

Portugal 

W 

154*00 

+1* 

86.0 

Spain 

(Ptai 

12S.B40 

+1.145 

702 

Sweden 


7.1 876 

+0*81 1 

122S 

Swftrortand 

PR) 

1*602 

+0*032 

807 

UK 

(0 

1*235 

-a 01 42 

— 

Ecu 


1*633 

-0.011 

“ 

SORT 

Aamrirtfa 

- 

1/48320 

- 

— 

Aiuoncnm 

<p~°l 

14X01 

+00004 

- 

Brad 

CRD 

0*476 

-0*03 

87.1 

Canada 

KS) 

1*459 

+00011 

- 

Mexico (NewPmol 

3-4333 

+O0058 

61.1 

USA 

ra 

- 



Pratoertteddh 

Eart/AMca 


- 

Auatnfla 

IAS 

1*460 

+0*005 

- 

Hong Kong 

6«l 

7.7273 

-00003 

- 

India 


31*700 

-0*15 

1805 

Japra 

CO 

97*350 

+0.44 

- 

Malaysia 

(MSI 

2*529 

+0,0014 

— 

NewTaetond 

INZS* 

1*249 

-0*027 

- 

PhUppfriea 

(Paao) 

24*000 

- 


200 108200 105070 

600 318500 307170 
58040 58337 
4.6090 48543 
5.1697 5.1095 
18125 1.4925 
370 232370 230800 
020 1.6210 18996 

425 154485 1626.79 

600 318600 30-7170 

1.6838 18744 
68670 8.4895 
250 154.370 152100 
680 125.660 124850 
7.192S 7.0700 
18627 18455 
1.B383 18230 
18757 18821 


031 
090 
680 
■ 080 


B15 

802 


92S 

607 

240 

638 


001 

480 

501 

435 


1.00QT 08999 
08500 08470 
18515 18488 
14436 14230 


■ 464 18473 1.3441 

278 7.7278 7.7268 

■ 725 31.3850 318675 

700 97/4000 968000 
534 28534 28510 

255 18287 1.6245 

500 - 500 248500 24.8000 
Saudi Arabia (SR) 17513 - 510-515 3.7515 3.7510 

Singapore (SS) 1/171 S +00015 710 - 720 1.4720 1.4705 

S Africa (Con t) (R) 38010 -*08012 000-020 38030 14915 

S Africa (PM (R) 48250 +084 150-350 48500 4.0000 

Sorth Korea (Worfl 790450 -065 300-800 797.100 796800 

Taiwan (13) 28.0418 -08192 390 -445 298580 29.0380 

Ihaaend (BQ 248150 +00245 060-250 248250 248000 

IflDR rere tor Oct 27. BMMtor acnade In CM Data Spat MW Wx»» arty Ow tat 
bta an hptad by curanlkematiarta. UK. tatadABCUarecaaxedhIiScunancy.JA. 


10.61 7S 

0* 

106173 

ao 

105425 

07 

104* 

31*4 

0* 

81.01 

a< 

3094 

0* 

1001 

5*063 

-0* 

5*138 

-0* 

5*491 

-OB 

105.6 

4*052 

- 0 * 

4.6 

0* 

4.605 

ao 

84.0 

5-1684 

-0.4 

5.1688 

ao 

5.1601 

ai 

106* 

1*095 

-0,1 

1*078 

0 * 

1.4371 

08 

107,4 

232.61 

-« 

233.145 

-1.4 

233496 

-1.4 

68.4 

1*014 

0* 

1.6014 

ao 

1.5884 

ae 

_ 

1548 

-3* 

1 556*5 

-3.0 

153525 

-33 

75.1 

31*4 

ao 

31.01 

a4 

30*4 

03 

ioai 

1-6911 

-0.1 

1*862 

0.4 

1*787 

07 

103* 

6*624 

- 0.6 

6*7Sfi 

- 1.0 

6.6089 

-0* 

96* 

154.775 

- 4 * 

155* 

- 4.4 

158*5 

-3.7 

95* 

126.905 

- 2 * 

124*15 

2 * 

12074 

-2* 

Bl.O 

7-2017 

-2.4 

7*295 

- 2 * 

7*535 

-2.4 

B2.1 

1*568 

1* 

12552 

1 * 

1*378 

1* 

108.1 

1*229 

OA 

1.6225 

0 * 

1*123 

a7 

B8* 

1*628 

0.7 

12823 

0* 

1*S96 

03 

- 

1*496 

0* 

1*49* 

ai 

1*547 

-0.4 

817 

3,4343 

-03 

3/4361 

-03 

3.4438 

-03 

- 

- 

- 

- 

- 

- 

- 

93. 7 

1*463 

-O* 

1*47 

-0* 

1*643 

-as 

B5-5 

7.7284 

ai 

7.726 

31 

7.7358 

-01 

ra 

31.45S 

- 3 * 

31* 

-2* 

- 

. 

ra, 

97.115 

2.7 

86*36 

3* 

93*9 

3 * 

1506 

2*437 

4* 

2*324 

32 

2.6059 

-2.1 

- 

1.6259 

-0.7 

1*277 

-07 

1.633 

-05 

- 

3.7626 

-a.4 

3-7567 

-as 

17753 

-as 

_ 

1/47® 

1.1 

1.4B&3 

0* 

1/4815 

a7 

- 

05165 

-5* 

3*448 

-&0 

3.6215 

- 3.4 

ra 

4.0587 

-iai 

4.1175 

-8* 

. 

m 

— 

799.45 

- 4 * 

802.95 

-3* 

821.45 

-31 

_ 

26*618 

- 0 * 

26.1018 

-09 

- 

- 

- 

24*875 

- 3 * 

26.115 

-02 

26*65 

-2.7 

- 


MONEY RATES 

October 2B Over 

nfgM 

One 

month 

Three 

muss 

Six 

rreta 

One 

yera 

Lomb. 

inter. 

Dto. 

rate 

Repo 

rate 

Wflton 

4% 

48 

514 

64 

84 

7.40 

650 

- 

week no 

4% 

4fl 

5% 

St 

6K 

7.40 

4,50 

ra 

France 

54 

*4 

5*» 

55 

84 

5*0 

- 

675 

week ^0 

5% 

Si 

5H 

5TV 

8% 

5*0 

- 

675 

German/ 

4.78 

4*5 

MS 

5*0 

5.65 

6*0 

4*0 

485 

week ago 

4*2 

4*5 

5.15 

5*5 

5*8 

600 

4*0 

4.85 

ketand 

Si 

514 


B% 

7% 

- 

- 

B*S 

week ago 

*t 

514 

Si 

BK 

74 

- 

ra 

6*5 

•ta* 

BV. 

B£ 

80 

94 

10* 

- 

7*0 

8*0 

week ago 

Bi 

Si 

8* 

9V. 

1014 

- 

750 

620 

k| +» - -a -»-■ 

A84 

4*7 

550 

5.34 

S.74 

- 

5*5 

- 

week ago 

4*4 

4*7 

5.17 

5*0 

5*8 

- 

i2S 

- 

Swttzaitond 

34 

3» 

*4 

414 

4H 

6*25 

350 

- 

weak ago 

33 

sa 

44 

414 

4% 

6625 

350 

ra 

US 

43 

4g 

6% 

SB 

BV- 

- 

4.00 

— 

week ago 

Vh 

4a 

01 

sn 


- 

4*0 

- 

Japra 

24 

2V. 

24 

2i 

2% 

- 

1.7S 

- 

weak ago 

2K 

2%. 

2« 

2V> 

21 

- 

1.75 

- 

■ S UBOR FT London 








- *- ■ Wrt_, l_ f 

■noriJtnK s-duhq 

- 

&i 

50 

6 

84 

- 

- 

- 

weak ago 

- 


5% 

S3 

6% 

- 

- 

- 

US Defer COa 

- 

4.B8 

5*5 

5.71 

631 

ra 

_ 

ra 

week ago 

- 

4*6 

5*6 

S.71 

8*0 

- 

- 

- 

Son Ltefced Da 

- 

344 

34 

3to 

4 

- 

- 

ra 

weak ago 

- 

3* 

34 

3% 

4 

- 

- 

- 


ecu 


day. Iba berta are 
Station: 


I Maas 1 rata SH; 3 more SB A mew: fli: 1 year: M4 - 1 UBQR 
■ tar SiOm quoted lo Va market by tow i tta nwc a fen** s linn ae 
Bn Wa w Tnnc Bare of Totryo, Bathe and rtafonaf WMerwata. 
tar dm donwHc Monay Rat* VIS 3 COa red SDR Lfcead Dapoare 


Sri. 


EURO CURRENCY IITTEREST RATES 


Oct 2B 


Short 


7 days 

notice 


One 


Three 


Sbt 

months 


One 


EXCHANGE CROSS RATES 

Oct SB BFf DKr PFr 

DM 

IK 

L 

H 

MCr 

Ee 

Pte 

SKr 

SRr 

£ 

cs 

S 

Y 

Ecu 

Btlgtan 

(Bft) 

100 

19*1 

16*6 

4*62 

2*10 

4973 

5/448 

21.12 

486* 

404* 

2614 

4.060 

1*85 

4*48 

3*21 

313* 

2*60 

Deflorate 

ffSCr) 

52-59 

10 

67® 

2*87 

1.067 

2616 

2*85 

11.11 

261* 

212* 

12.17 

2.135 

1*44 

2*87 

1*94 

164* 

1*41 

Franco 

(Fft) 

6007 

11/42 

10 

2*21 

1*08 

2988 

3*73 

12*8 

2964 

2461 

13*0 

2-439 

1.192 

2*12 

1*35 

1864 

1*32 

Germany 

PM) 

2057 

3*11 

6424 

1 

0413 

1023 

1.120 

4*43 

102* 

8622 

4,739 

0835 

0/408 

0*84 

nn» 

B4*9 

0624 

Mart 

m 

4674 

9/458 

8*90 

2.419 

1 

2474 

2.710 

1050 

247.1 

201* 

11*1 

2*20 

0*87 

2.163 

1*02 

. 158* 

1*89 

My 

w 

**11 

0*82 

0335 

0096 

0040 

100 

OHIO 

0425 

9*88 

6138 

0486 

0082 

0*40 

0067 

0066 

6305 

0051 

Netherianda 

w 

18*6 

3-490 

6050 

0693 

0380 

912* 

1 

3*76 

91.18 

74*8 

4*48 

0.745 

0*64 

0796 

0591 

67*6 

0488 

Norway 

Mb) 

47*8 

9*05 

7*83 

2 W 

0952 

2355 

2*80 

10 


191* 

1096 

1*23 

0*40 

2*59 

1*25 

14&5 

1*06 

Portfel 

w 

2013 

g«pn 

3*51 

0979 

0405 

1001 

1*97 

4*51 

100 

8146 

4*53 

0817 

0400 

0875 

0*43 

6612 

0*13 

Spain 

(Pta) 

24.71 

4*99 

4.114 

1*02 

0497 

1229 

1*46 

5*18 

199 a 

10O 

5*18 

1*03 

0480 

1*75 

0796 

77.49 

0630 

rMNlm 

fSKri 

43*2 

8*17 

7.194 

2.101 

0*69 

2149 

2*54 

0125 

214.7 

174* 

10 

1.756 

0853 

1*79 

1*92 

135* 

1.102 

— tai * M 

UlyjS naT»g. 

PFl) 

24-63 

4*83 

4.100 

1.197 

0495 

1225 

1*42 

BOTI 

122* 

99*8 

5.698 

1 

0/488 

1*71 

0793 

77*2 

0628 

UK 

» 

50*9 

9*81 

8*88 

6450 

1*13 

2506 

2-743 

1064 

2503 

2069 

11*6 

2*48 

1 

2.191 

1*23 

158* 

1285 

Canada 

(CS 

23*0 

4*73 

3*28 

1.118 

0482 

1144 

1*53 

4*56 

114* 

93*8 

5*22 

0934 

0458 

1 

0741 

72.11 

0*88 

US 

ra 

31*6 

5*03 

5.168 

1*10 

0624 

1544 

1*91 

6*56 

154* 

125* 

7.184 

1*61 

0*16 

1250 

1 

97*5 

0792 

Japrat 

m 

31*9 

6064 

6*09 

1*51 

0*41 

1586 

1.737 

6.734 

168/4 

129.1 

7*80 

1*95 

0*33 

1*87 

1*27 

IOO 

0813 

Ecu 38*1 7.456 6528 1*07 0768 1950 2-138 6280 194* 

Dante, Krara. Prtfldi Franc. Ncnragtan Ktanar. and Oaudllti Kronor par 1ft Balkan Franc. Yei, Eacudo, Ura rad feta 

1667 
par 100. 

9*74 

1*92 

Q.77B 

1.705 

1*63 

1260 

1 


■ D4UMUVnMS(MQDH 125800 pa* DM 



Open 

Seta price 

Change 

Hgh 

Low 

ExLvol 

Open tm. 

Dec 

0*876 

06625 

-00054 

06705 

0-6592 

24,464 

87*03 

Mar 

06693 

06637 

-00055 

0*712 

06805 

215 

4*55 

Jin 

06732 

06863 

-0*056 

08732 

06625 

1 

615 

■ MUMS HUUIC njTUMS (IMM) SFr 125*00 per SFr 



Dec 

08000 

07544 

**056 

0*044 

07907 

17*88 

41*57 

Mar 

07965 

07977 

■00057 

0*075 

07942 

582 

2*30 

JUi 

08100 

0*018 

-0.0057 

08100 

0.7890 

21 

102 

■ JMMimVfrNmiMMPMM)Yenl22perYeniao 




Open 

Sett price 

Change 

wgh 

Low 

EsLvol 

Open int 

Dec 

1*352 

1*313 

-00049 

1*375 

1*285 

11*23 

60743 

Uta 

1*425 

1*398 

-00051 

1*454 

1*371 

382 

7.086 

Jun 

* 

1*496 

-00063 

’ 

“ 

278 

718 

■ SfnUMRmmfMM) M2*00 per E 




Dec 

1*362 

1*218 

-0*142 

1*380 

1*174 

0*29 

46*98 

Mr 

1.6440 

1.6206 

-00140 

1*440 

1.6166 

37 

529 

Jtn 

- 

1*174 

-00134 

1*320 

1*130 

1 

9 


•Yea* 


Oct 29 
Efoct 18240 

1081 18234 

3 Btt 18229 

Ijr 18135 


18365 

18389 

1*J5S 

1-S2S3 


FT QUDE to WORLD CURRBK2EB 

The FT ditto to Wortd Currenctos 
table can be found on the Emerging 
Marine page in today's edJHorv 


UK INTEREST RATES 


LONDON MONEY RATES 

Oct 28 Over- 7 cfeps 

right notice 


One 


Three Sbt 
months months 


One 


■ HBM MW MB CTtomOMB £31850 foarta per pound) 


hfebanfc Staring 

6%-4% 

«-5A 

ft- 5* 

6-5% 

ft- ft 

Th-ft 

Staring CDs 

- 

> 

m-sa 

SB-5S 

*&-ft 

74-74 

Treasuy BBa 

- 

ta 

ft-si 

ft- ft 

- 

- 

Bank Bte 

- 

w 

5&-5% 

5$ -58 

.ft -ft 

- 

Locta suttofiy daps. 


S%-5% 

sA-si 

ft- ft 

0 A- 0 A 

74 -sa 

Dfscon MariMt (tape 

6^-412 

5i-4a 

- 

- 

- 

- 

UK ctatatag bank fane landtag rate 5% par cant Iran September 12. 1894 

Up to 1 1-3 3-6 M 

month month (norths (norths 

9-12 

morthB 

Carta of Tex dap. (2100*00) 

1*2 

. 4 

ft 

ft 

3 ^ 


Sato 

Rice 

Nov 

“ CALLS - 
Dec 

Jen 

New 

— PUTS — 
Dec 

Jan 

1*90 

098 

7.16 

7.42 

. 

non 

0*1 

1*78 

4*8 

5*3 

5 45 

004 

056 

1*2 

1800 

2-44 

322 

3.77 

033 

1*3 

1*1 

1*25 

089 

1*8 

2.43 

1*7 

2*2 

289 

1*60 

020 

096 

1*2 

3*2 

3*8 

4.40 

1*75 

0*3 

045 

0*7 

6l30 

5*0 

022 


Cam of uer dag imtaSiOOLDDDb i%pc. Dentate wterdrean tcrcerti %pc 
to*, tmer nta ti deeatan 643*2p& BCQO feed n*e Obg. Bqwrt RsrtHa. rata m dev Qci si. 

1904. Agreed rrta tar period Mow 29. 1984 to Dec 25a 1994. Sdtarae I & B 723pc. Reference rata tar 
d Oct 1. 1994 to Ocl 31. 1884, Sccemaa IV A V SJtoapc. Aianea Homo Bm Re* fee ta* Oct 


1. 1694 

BANK OF ENGLAND TREASURY BILL TENDER 

Oct 28 Oct 21 Od 23 Oct 21 


Ptaow deytaveL CM* 5891 Ms 11.179 . taw. (toy"* open taL. Crie 434832 Put* 404,768 


BANK RETURN 

banking dbwtm&*t 


Tati at ufottn 
Tate Mooted 
ton. accepted Ud 
Nkaraot it BfrL M 


£500* fiSDOra Top accepted oft 5X348% 5/049% 

EZ1E9B £2642» An. Ctie ct fecott 5.4342% 54229% 

£50085 ssm AwapsUd 15068% 54872% 

ESB845 £96845 OSar « ret fend* SOD* OOOm 

94% 97% to. accept, bid 182 daw 


Wedneadey 
October 21 1994 


tncraaea or 
decreeaa for week 


OhMH 

Pitofc deposes 

Bankers deposits 

Reserve and ottw accouraa 


£ 

14851D0O 

888844811 

1862/409,170 

3851454895 


+53881168 

+140,921767 

-49855863 


Governme nt i 
Advance and other acco u nt s 
Prwrtse, a tni pn a wt and otfwr i 
Notre 
Coin 


5JB05.7SD.77B 

1,100864,739 

1456886811 

1844/468868 

4,149816 

170895 


+87891838 

-154,160800 

-581148817 

+781.157861 

+131874 

+1218 


issue OBvwTwerr 

5*05,720,778 

+87*81*36 

itaWtotae 

Notes in cknfeflon 

Notes In Bonldng Department 

18.186*50*84 

4,149*16 

+89*83,126 

♦138*74 


18,190*00*00 

+40*00000 

Other Government aacrefttee 

Other Seoretew 

7*24*93*50 

10*88*08,750 

+1.486.789*17 

-1.448.788*17 


18.190000*00 

+40*00*00 

1 UK GILTS PRICES 

WX% Ant 
Netas Price E W- Bn 

karat Lari Cfo 
ta s to In 

« 

M tar feceS 


BASE LENDING RATES 


Ad*n& Company. 5.75 

ANadTnntBtak 5.75 

AB Bert( 5.75 

■HareyAnsCach* 6L75 

Barfr d Band* 5JS 

Banco afoaaVtoagiB-5 78 
Bars at Cyprus -..—875 

Bank of Inland 175 

Bank d Mb 876 

BenkcdBcctiand 175 

Bantoys Baric — 835 

BdtBkriMdtot. — 535 
•BmnattyACbUd 875 
CLBartENedertand -8.75 

Ctov*M4 875 

CMaadtieBank 538 

7?» Co-operate Bank 875 

OxXts&Co 835 

OBttt Lyoonaia — — 875 
Cypua Poprier Bark . 835 


% 

Cuxsnltarto 175 

' Exata Bank Lknted. ^875 
HnandtiK Gen Barit -88 
WFtotmt naming & Co -575 
875 


•Gukmaaa Mahon 835 

Htato Bark AO Zurich 535 

H antxoa O anfc 875 

HBlMlB & Gan tnv Bk. 875 

•T* Samuel 875 

CLHoan&Co 83S 

H«resxvaShroahti,87S 
JitoiHodgoBerir — 875 
WLeopddJDreph&Son* 875 

LtoytiaBMk 53S 

Megw) Bar k ltd 875 

MUtadfiark -835 

* Moure BrelfoB-— — • 
NaMtotinfratar- .-875 
WRaaMhara 835 


*FkBdngheB**lMia 
no tonoar authoriaad se 
abwwgtaMulon. 8 
FtoytiBkolScoaand. 8J5 
d^raBh&vnmanSeca 835 

TS8 875 

■UritotiBkatlOwMi 875 

(jNYTiutiQarernc .-875 
Wntiamlhat- —535 
VMtomay laHwr — 875 
Yoriahfee Bark 875 

•Mntescf London 
fewaataentBanKtog 


dtn 


2 


W%% AM 

Mire Meat +A- fia 


iret Ob 


(tkre re toffee Aar* 

ItCHSpC 1594^4 lDOAti -2 

ttpcMBS IfflH -.1 

tab 3pc 0* 10BO-* _ SBiito 

10ifpC1fiB5 lOft -2 

n*al24re:t88Stt 10S4pd -J 

1 foe 18* 1073 -v1 

iftireiwwt . mire -i 
BSMJireciMStt install -.1 


rawyta. 7W M 

1JB00 Ky17IW17 11.10045 COtaM* 8hpc2004_ 104% -A 

1381 “f'2f 1i«»6ta*20l>«tt B74ti 

214 taylferl 2691271 d 1^2005 90S 

C»I%PC2>05 1043 

1.159 HdHd 2791308 7%cfflW— -. 

S00 My151*rl5 18101200, 


541 JB14414 
Mi2 foes Ocas 
1500 uy&hes 

1000 J*70*7 
48*2 Apia Dei# 
£200*01 net 
8900 IMS* 
zjm toSOeS 


..aWM M A, IDOO liXM SIC — T-atI^r9M7ir - fflfl 


TtacOorTpc tSSTtf— 07% 0.1 

hrea I3%pc 1987tt HOB 

EKbUtaciM 7_- 
ita«s%pc lBar*- 

8*1151101987 

«*CT906 


100% 1700 F8Z1 AU21 

101% --1 1550 MriSBi 

117% -.1 B30 KfBOOJ 

1B3B -1 19* 8I8JJ18 

hm7i»p*199att_-. »% -.1 1150 M30MB 

1toa%ICl99MBtt- »Sll -v* l.* 0 


1^89 AuSFoS 386 - 7nre3%pc20O7» WS 7.1* Je1B*1B 

1210 J«Z2Jy22 1101302 13 w 2004-8 - 1271 -J 1350 taVStfO 

— lnBJ £321 ApUOcIS 




_M*e 1998-1. 


nwtoJFHMBViwa 
brti2%pc19*„ 

TnreWMctnO- 

T— *c w att „ 

Onwiia* io%k «•- UBAti 
tenVAtotg* 89jj 

npcznqn *6 

tt®toc3000R iSB 

Ttb* tape 2000 UBA 

1 toe 2001 1Q5B 


2091299 
1391273 
248 - 

2691331 

370 1*72*22 17.101808 OMrHBNSTH 
995 HrSOSb* 3481306 TnetapcSOOS- 


-a 110BW2S5BZS 
<750 


-2 8900 HM0IH20 17.101299 T*reB1topc201u — - 

-2 I960 J*16Jyi5 881347 CowgpeUZJII tt 103)1 — W 73 Jai2«IS 

was ai us? hbm * 

Tnre5%pc2006-12tt- 74 11 1^0*108*0 

7Vpc2012-1Stt B8 « •» 

7 MaOWeafrlTN l®y -‘l 7,150 fBJ&NOi 

-3 3JBB tkSOSSM 72A\W «,!» 2013-17 «lWi — 1900 tot8IW2 

-.i i^aitownno 17.1012* aa,u ^ 

-3 1900 FPTOAS10 CT - 
-2 13»HpBMZ2 17.101242 

£560 toMoSsOe U - 

1500 Je?De7 - - 

Sa w IK3BP3 28,715*4 

Jat4 Jyl4 791 MO Cwtati4pc — *«A 13 


0*1*2002 104U 

toc20O3jf_ — as? 

lope 7003 107A 

Tferentae Ton-4 mg 

• 1 stock, tt Tox-tay tp nee itaflTrt 

STOCK HflDICES 


i2 

-a 

-3 

-2 b35w?A« 7 21313* 
.1 7,850 JatOOtiO u 


1171 Ja14J)14 rji r«* Brf+jnp . . -ran — — 

4 40G FaZOAdB 20.71280 41%* 61 19® <MH1 

420 a« “ SLTerV*" 57% -* m API Ik! 

_;i zsa mste leian o***;^- ** 

-3 UBS 1P10S8I3 11*1290 119*2%* 


a Ap50c5 
27S 6JMp«0c 
470 ApiOCl 


781274 

18912* 

28104*0 

11912(7 
17.101295 
28 - 
131334 
1581293 
861339 
2281301 
89130 


188 1336 
1810 - 
1861245 
98817m 
481330 
2 28 - 
2681132 
1871992 
88 1290 


2781238 

25.101352 

2581242 

18132* 

181230 

2381318 


7% 


W0% 

Atae-OStt (1350 107i 

2%*CT- -.J788 1®i 

2%pc l 03 (78*161%* 

4tac*0**t — (135* «* 

an* paa w,’, 

Zhpeva (re* 152* 

2%pcn (748) 157% 

2%PC*13 pa2) 129a 

ehficin pi.* 1972 

2 tax *20 pj) W1% 


1800 M169M4 1081313 
800AP270C27 98 - 

IJOOHOtStO* 189 1318 
1900 Ny2DB*20 17.101317 
18CD to«1(W1 148 - 

1950 JtlBJylB 1881314 
19S0 kyzolkso 17.101318 
2,100 Fe23Ac23 1&71310 
2900 F01BAU16 11 J 1320 

zrn joBjfio auvei 

£750 tolOOcie 


891322 
1881323 
158 - 


3%pb-2*tf— 100% -4 £.100 Jal7Jy17 

4taX-30tt (till) 100% -A 1900 J»1BJ»22 

09 nowta In f ju e nil ie— tinny RPI boa tar Msdrg *a 8 
months prior to Issue) and have been MOuaded to refect rebestag 
of RPI to 100 In January 1967. Carmnion Motor 3845. RPI lor 
jwarey 1994- 1419 and tar Adjust 1S9C M47. 


Otfwr Find Marwt 

talHO*10%pc20IB-- 

Store 11 tax 2012 

tatarecwstax ‘10 

Swap 1896 

13peV7-a. 

fed«tfetKi5ee20ii_ 


Unred 3>zpetrel 

UCSfetalAL. 


11%pc2M7- 

Nti.frfr.3peW 

NfrltoA«to3taK20fo- 
4tar42W 

vu Harare* tftoc ns 


110 A 

-7 

100 tfrMSBM 

TO - 

115 

-33 

45 07154015 

4931887 

«6% 

-3 

SOS Apioei 

—1465 

100% 

-2 

720 Je® Jr® 

— - 

106% 

frfi 

215 All Del 

8*931428 

Ml% 

-.4 

« W31fe® 

1093 - 

ia 

-29 

40 reisaa 

3*933146 

38% 

-14 

5 ttaXpJaOc 

TO - 

32 

-l * 

28 UbJSSbOb 

ra - 

111% -M 

sfosaoea 

3T93SZ73 

67% 

-J 

25 unset 

3H3S3B1 

181% 

-3 

a jssojrso 

1*93 3400 

125 

-13 

so 

793 - 

135% -22 

50 HI sal 

ra - 


inysyis — — .. , . ^ 

i reftientan. E AsoOdh tMtis ad ttatosnd Ooabto i*d-pto» aretiirem si 


pomre ««W«y pecsniaoe cnewre ■* ditUHsd an a Htfer b Rttay batik 


Oct 28 OCt 27 Oct 28 Oct 25 Ctt 2* 


— 1904 “ 
Man tup 


Huh low 


FT-aiOO 30S3J WSJS 2BNJ 300W UU 3J2J iSJ FT«£SSa» 

FT« 1 « 2 S 0 asm* 3480,1 M2 3474* MM JgJ FT Orifrwy 

FT-SE Hid 250 ax (ft « 08 S $ 478.1 346W «749 3«U 4788J ^ ™ 3 py w s,ortfei 

15443 IBM 1506* ^ jjgg ^ *«**•*« 

FT-aSsMCip 177783 177418 177587 17«a>7Waaa8M81^*J"JJ" 13gsJ6 py && tfMS 

PT-SE Soantop re [ft 17*8941747.44 174078 17589* 17»*»U217««WU61»« FrefecnaerSOtiMnsi 
FME* AMftfe T52SL82 130695 M8B88 14B7.7* 15167B I754T1 144585 17H.H or 


-1994 — 

QB 31 0 dZ7 OH 26 Ottas 0tt24 to) If IW la* 
132881 130128130071 128180 to12221ito.il 12B84B 1548,18 
139681 138182 130.10 135647 1372J8 18R10 (335* ittff . IS 
2345,1 23185 22888 2801* 232M 271X6 22555 2708 
gilf WSt KU* SUM BUM WM 8 854 12730 

18791 10684 10788 107/48 10784 13387 10850 13387 
2188*5 Z21O90 325338 23B9J7 228237 2J879 17*aB2 2*788 
— ' 2818 2828 2085 287* ZSU 188* 73*7 


2764 


90045 

938*2 

404 

46U 

5053 

82210 

485 


FT GOLD MINES INDEX 


%eba 


% B 

Oct stare OB MUGre Gold Bure* 
31/C2/B3 27 Stai Mere yftid % 


Befoton Franc 


- *H 

4» 

-4!i 

5 - 

ft 

5% 

-ft 

SA 

- V. 

GA 

* GA 

Draeh Krona 

5% 

-5 

5% 

-ft 

5% 

-ft 

ft 

-8% 


-6% 

7% 

-7% 

D-Mark 

5- 

ft 

4U 

-4« 

4B 

4U 

SA 

-sA 

SA 

-SA 

SH 

-SA 

Dutch Gutter 

6- 

4% 

5 - 

ft 

5- 

ft 

s& 

. 5 % 

S% 

-5% 

S% 

-5% 

French Franc 

s% 

-s% 

V. 

-s& 

5& 

-5A 

ft 

• S»i 

Bil 

-5H 


-BA 

PotaguaM Esc. 

9»| 

- B 

9% 

-9 

9>a 

-ft 

ift 

-9% 

10% 

- 10 

10% 

-10% 

Spanksh Peeata 

7& 

-7% 

7& 

-7% 

7,\ 

-TA 

7tt 

-7% 

8% 

-8% 

ft 

BU 

Sterfng 

ft 


Va 

•6A 

sU 

*5B 

6 - 

6% 

SA 

■ 0% 

7\ 

7A 

Swtas Franc 

3% 

-ft 

ft 

-3% 

3S 

-3fi 

4 - 

3t 

4A 

■4A 

4% 

-4% 

Can. Defer 

5 - 

4H 

5 - 

4» 

SA 

-4S 

S*J 

-ft 

BA' 

-SU 

6% 

■ft 

US Defer 

4% 

-ft 

4H 

■4« 

s - 

ft 

5li 

■SA 

6- 

5% 

6A 

-BA 

Brian Urn 

9- 

7'i 

ft 

-8% 

BA 

-»A 

Bii 

-BA 

B.’a 

- Si 1 . 

10% 

- 10 

Yen 

2 A 

■ ft 

2 & 

-2A 

2A 

- 2 % 

2% 

-2A 

2 h 

■2A 

212 

-2% 

Aston SStag 

ft 

■ft 

ft 

- 1% 

2A 

-2A 

3A 

-3A 

3% 

-3% 

4 - 

3% 


S 

1 

I 

a 

218BJI6 

-23 

2210*) 92*1 

10908 

1*1 

2)67/40 170262 

■ Itegtafel tadkae 

AtlOfMJ 

3585-21 

+8-5 

362998 

18.44 

3432 

477 

3H1*7 2304.45 

feritfeate(7| 

281453 

+5j6 

2891*8 

G*9 

1395 

1J3 

3013*9 216994 

North flaerta (11) 

165X23 

-J1* 

169898 

27*8 

5203 

0*1 

2C30-S5 M88.1t 


i ere tar aw US Dutor end van, otfm (mb ds«e' nodea. 


PMM) Sim points of 100 * 


Copyriefe. Ike Ftnen cl el Iknre Unfed IBM. 

Bfiiraa to bncfesn dtow nunber or cw m er ta e Satis US DoPam. Bare itohiex 1CBUD 31/1392, 
Tferiacsaaor Bold titan Indre Oct « 279-4; aetii'a Cbaege: -118 ports; Yecr ago; 2258. 


LONDON RECENT ISSUES: EQUITIES 

Issue Amt Mil Cfoaa 

pries paid cap 1994 price 

p up (Cm) tfgh lew Stock 


ra 

FJ>. 

088 

B% 

4 APIA Wmtt. 

6% 

ra 

KP- 

9*9 

73 

63 Artesian Este. 

69 

100 

fP. 

176* 

93 

89 BZIW CurenodUtS 

09 

• - 

FP. 

18* 

47 

42 Da IMts 

45 

- 

FP. 

1J» 

1% 

1 Cortl Foods Wrta 

1% 

S3 

FP. 

1Z2 

G8 

65 Ehnradx 

67 

ra 

FP. 

504 

124 

106 Fterorte CU* 

120 

115 

FP. 

39.1 

126 

115 Gamas Wortefep 

126 

- 

FP. 

2*4 

35 

27 Dr Cap Wta 

27 

ra 

FP. 

29* 

62 

58 Hambres Sm Asian 

SB 

ra 

FP. 

2.70 

30 

27 Do Warrants 

27 

180 

FP. 

1 HU? 

223 

205 frtoh Parmanart 

222 

180 

FP. 

179 

195 

176 MaddaM 

IBB 

1B0 

FP. 

424* 

181 

160 Mra B3 & F 

IBS 

- 

FP. 

338.1 

468 

<75 Prolific Inc. 

483 

135 

FP. 

58.7 

149 

136 Santa* 

146 

- 

FP. 

111* 

378 

355 Tamplsicn E New 

359 

ra 

FP. 

a28 

62 

57 WHtdtjreh 

62 

- 

FP. 

282 

360 

335 Wrexham Wrier 

338 

- 

FP. 

4.74 

330 

320 Da NV 

320 


Net Dto. Gre FVE 
dfe. cm. ytd net 



Open 

See price 

Change 

fegn 

LOW 

Bat ra 1 

Open Int 

Dec 

9X89 

94*8 

♦0.07 

94.08 

93*4 

64.021 

421*40 

Mar 

93-56 

93*2 

•008 

93*4 . 

93.43 

79*27 

385,743 

Jun 

93*9 

9X15 

+0*5 

9X18 

9X03 

46*28 

291*85 

a U6 7MM6UHY MLL WTUMtS 0MM) 5!m par 100M 



Dec 

94-59 

94.65 

+0*6 

94.07 

94.58 

330 

17*60 

Mar 

94*9 

94.14 

+005 

94.16 

94*6 

149 

10*52 

Jm 

- 

93,60 

+006 

3170 

B3.B1 

38 

S*4S 


RN071 

5* 

1J3 

8* 

RNX7S 

2* 

0* 

404 

nNa* 

22 

4* 

11* 

MBD 

43 

14 

7.7 

RNG* 

22 

4* 

7* 

RN&B 

13 

&5 

9.1 

RNXS 

1* 

13 

23 J 

RN155 

3* 

2* 

13* 

_ 

_ 

_ 

_ 


- M Open trferaet Age, era tor pinteua dta> 


RIGHTS OFFERS 


taaue 

price 

P 

Amount 

paid 

up 

Latest 

Renun. 

dan 

1994 

Hgh Low 

Stock 

Ctoatag 

price 

P 

«cr- 

17 

M 

2712 

2 pm 

1»pm 

APTA Health 


* 

118 

M 

2 am 

20 pm 

8pm 

Ctatie t 

Spm 


Wp 

M 

25711 

%i»ri 

Vpm 

Dragon 01 

%pm 


1B0 

M 

9712 

Iftpm 

Epm 

Skfeta 

8pm 

+1 

k330p 

Ni 

29711 

59pm 

25pm 

Smurft U) 

39pm 

+14 

5 

M 

15711 


%pm 

fltaien Square 

%pm 




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TRIP 


FT CONFERENCES 

CORPORATE RISK IIANAGEMENT AND THE INTERNATIONAL 
INSURANCE INDUSTRY 
London, 3 November 1994 

As the risk management function within corporations expands and evolves In 
response to an ever boasting array of risks, the aUfty of commercial ri»k 
!■■■■ in limn tm r — h i indfrinred nwtil Ireuire ■ iitilire nf But t re y 
survfvsl This FT conference vriH examine me impdcaKons of the dunging 
(■tom of tfia into of brokers, insurere end risk mraagera and explore hoar the 
International insurance lndusby te responding to the new challenge. Speakers 
include: Mr Patrick Newberry. Coopers & Lybrend; Mr H Faftx Neman, Risk 
Management Reports: Mr Cfee Pracy, London Transport: Dr Herbert Ham*. 
M200 Group; Mr WdWXater Baungad, HDl Vag; Mr Water Kieiliolz, Swiss 
Ra; Mr Stewart StefTey Jr, liberty Intemattanel Hokfrngs Inc. 

WORLD ELECTRlCrTY 
London, 7 & 8 November 1994 
The 1994 FT meeting, arranged jointly with Power in Europe, wfl consider how 
utilities are responding to a more competitive environment; review 
developments to a number of key markets and dtecuss new tuais and new 
technoiogtea in power generation. Speakers Include: Norman Shumarsy, 
California Public Utilities Commission: Richard Coldwafl. The National Grid 
Company; Ha r v eB a Asamoah. US Department of Energy. Hans Lundgren. 
V att a ntaS AB; Dr Gregory Yurafc, American Stpercond ucto r Corporation; Mac 
Lecfoetter, Sattale Pacffle Northwest Laboratory; Ian Brown, Hungary ■ EC 
Energy Centre and Mika Brown, Cogen Europe. 

NINTH EUROPEAN PETROLEUM AND GAS CONFERENCE 
Amsterdam, 15 8 16 November 1994 
This year's meeting, timed to cotnokfa with the PgtroTech 94 Exfttffcm, nffl 
focus on European oil refining end the market to the year 2000, considering 
current and future European capacity, product trends, new refinery i nvestm ent 
and environmental Issues. Speakers Include: Tomihlro Tanlguehl, 
Intama&onai Energy Agency, PhB Trimmer, BP OB inte rn ati o nal; Mohammad 
Saleh Shaikh AH, The Bahrain National 09 Company; Mahomed Yousef, 
Tamoi Bate; Dr Leonard MagrO, Texaco Limited; Gkxxt Portal, EUROPIA; 
Chris Baxter, Hie Chase Manhattan Bank; Terry Davies, Previn & Gertz Inc. 
end Jaen-Ptere Royntar, European AutomoMe Mamteciurera Association. 

THE PETROCHEMICAL INDUSTRY - PROSPECTS FOR THE 
M1O-19908 AND BEYOND 
London, 21 & 22 Novembw 1994 
The sixth FT petrochemicals conference, arranged in association with 
Chemical Matters, brings togetiier a most authoritative penal of speakers to 
dtecuss global prospects for this key Industrial sector. Speakers induda: Bob 
WBson, Exxon Chemical Europe Inc; Jdna Rantanen. Boreate HoUng A/S: 
HE Ahmad Rahgozar, National Petrochemical Company end Deputy 
P s u oleun Mkiiatar. ban: Mohammad Al-Kathbi, SAB1C Europe Ltd; Nyun 
Tae W m. Yukong Umftad; Bryan Sanderson, BP ChenriCaJs; Jamas FUgg. 
Amoco Corporation and Andrew Butter, Dow Europe. 

DOING BUSINESS WITH SPAIN 
Madrid, 23 & 24 November 1994 

The FTs *94 conference, to be arranged with Expansion and AcniaWad 
Eca&rica. w9 ten as Its theme 'Spate Competing In Europe', focusing on 
economi c recovery, competitivfty end flberateteg markets. Speakers teduda: 
Dl Pedro Suites Mb, Spanish MWsJw 0 # Economy A Finance; D.Jos6 Maria 
Aznar, Partkio Popular, D. Miguel Martin Fecnfrndsz, Banco da Esparto; D. 
Joed Antonio OrtSfin Martinez. Spanish UOnUer of Labour * So cte Security; 
D. Alberto Recarte Qarcla-Andrada, Centunton; D. TeofOo del Pozo, BT 
Tatecwnreticadorws SA; Mr Bernard Dumon, Safra-Louis Group SA; Professor 
Pedro Nueno Wests, 1ESE 

FMANC1AL REPORTING IN THE UK 
London, 28 November 1994 

This year’s conference wffl provide essential guidance for preparers end users 
of accounts on interpreting the comptexUes of eods tte g end emerging ASB 
Standards. Issues to be covered wN Induda; Accounting for oft-betance street 
finance; merger and acquisition accounting; valuing Intaiigtbies end brands; 
accounting for derivatives. Speakers Include: Sir Sydney Upworth OC, 
Ftesww Reporting Council; Mr Chris SMfereon. Stoy Hayward; Mr John KefiaS, 
KPMG Past Marwick; Mr David Calms, international Accounting Standard* 
Committee: Ms Mary Keegan, Price Waterhouse; Mr Peter HoSgate. Coopers & 
Ly brand; Mr Michael Btridn, Interbrand Group Pic; Mr Michael Renstreti, 
Rnancte fteporting Review Panel; Mr Kan WSd. Touche RossS Co. 

DOING BUSINESS WTTH HUNGARY 
Budapest, 14 & 15 November 1994 

Yfilh a now Government recently elected to office, this major FT conference 
wB pnwfcto a timely opportunity for a re-appraisal of ffongayTs oti ractiveneas 
as a location for foreign direct, and increasingly, portfolio Investment 
Speakers Muds Dr Qytfe Horn, Prime Mtntaer of Hungry; Mr LAstt 84 
keei, Minister of Rnance, Hungary; Professor 8N& Kfrdfrr, Former Minister of 
fe tentotional Economic Rotations; Mr Ernst Hofmann. Opel Hungary; Mr Peter 
Bod. National Bank of Hungary Mr Ferenc Banha. Govw n n ont Ccmmiaaioner 
for Privatisation, Hungary; Dr Jfinos Mgrionyi, Former State Secretory, Mirtsby 
of Foreign AfiarS, Hirw; Dr L^w Sokroa. SudapestSar* Ltd and Budapest 
Stock Exchange; Dr Gyfirgy Srefinyi. Centrfo-Europaen tetemationel Bank Ut 
Dr Mark von LdtenskfoU, MATAV. 


Al enquiries should be addressed to: FteanCte Times Cortefences, P O Box 
3651. London SW12 8PH.UK. Tetephone: 061-673 9000, 

Fate 081-673 1335 . 






























































































































































































31 








































































I •• 


32 


FINANCIAL TIMES 


MONDAV OCTOBER 


31 1994 


4 pm doss October 22 


NEW YORK 


COMPOSITE PRICES 


iBB* m. H toe 

W UwSk* ffv % E W» to 

17% 12%AARx 0.48 19 Z0 117 12 

17% iAall«ha* ai8 1J0 41 117 al 

79% 57% AW 
72% 4dljAWfi 


412% 12% 

17% 17% ♦% 
1 68 22 27 195 76% 78 78% +% 

988441 65% 52% 55% +2% 
12 88 3% 3% 3% 

2® *2 3) VA 48% 47% 47% -1% 
178 2.4 18 8213 31% 30% 31% +% 
050 3.7 12 182 13 
OS 25 98 

30 350 16'. 

0.44 1.9 28 4417 23% 


9 3%«K 
56% 38% ASA 
32 2 5% MM. 

15% 11%AbRUPr 
35% 17% ASM tad 
18 11% Acptncdb 
31 22% ACE LB 
12% 9% ACM art a 1® 11.1 
10% 7ACMGvO» 088 10.6 

10% 7 ACM CM 5p 008 115 

12 8%ACUMGa 10913.1 
11% 7% ACM MSB 1418 133 
9% 8 ACM MantOO 072 8.9 

15% 8%AomO» 044 03 10 , - . . _ . 

13% 8% Mm Elect 8 493 11% 0% 10% •$ 

28% 23 W* 060 11 14 6 28% K% 28% +% 

13% 5% Aetna 038 441 2 179 9% B 9 -% 

17%11%Acran 138 3047 uia 17 18 +1 

18% 18*2 Adl«S 6pr 048 28 0 IS 17% 17 17% 

04 46% Ad MkR) 100 55 138 36% 54% $S% *2% 

100 11.4 1119530 26% 25% 26% +% 
016 10 8 70 0% 5% 5% 



3 : 


31% 1G%MiMe 
6% SAQRStQp 

20 tSAdmlne 

64 *9% Aegon ADA 
65% 44% AcSUL* 
36% 25%Ntac 
22% i6%Ahmran 
4 1% Aden toe 
38% AbPiC 
9«j IflAktraFrt 
29% 19% Mips Ins 
17 t4%Akfe&m 
»% 2l%AtMi 
18% 13%fli3*aMr 
21% IG%A«anyta( 
17% 13% Mbffl 
25% 19% AlbCUB 
23 17% AKltar A 
30% 25% MM3) 

28% 19% AlcoAl 
65% 49%MnSl 


s? 


018 00118 158 18% 17% 17% -% 

M7 24 13 IS 63% 62% 82% -1% 

178 5.9 718719 48% 644 48% 4-1% 

048 1 3 14 815 34% 33% 34% +% 

an 49 14 2857 19% 18% 19% 4% 

1 S2 1% 1% 1% . 

098 11 26 1382 47% 45% 47% *1% 

030 1.8 II 4710 19% 18% 19 +% 

50 388 28% 28% 28% 

1 84 11.7 12 55 18 15% 15% •% 

8B32l<30% 28% 30% +% 
020 1.1 26 2114 17% T7% 17% +% 

035 10 32 437 19% «% 19% +% 

020 1J 395 16% 15 15% 4% 

028 1.1 17 120 029% 24% 25 *% 

029 12 17 235 023% 22% 23% 

0.44 15 24 2*08 30 29% 

020 1.100 5416 27 28% 

1 00 1 1 40 1841 57% 57% 


23%Ata8re*mx 070 IS 4 384 


MAWAI 
24% 1/ASeghLud 
' 19% Alegp 
13% Mon Cm 
20Alapan 


aia asi20 s& ao% 

048 14 19 399 20% 

1.64 7.9 11 1770 21% 20 
016 07 20 1029 24% i 
044 1.7 16 Z88 28% 

20 


4% liWKT. 

27% 17%MnnCapi 104 7.7 22 339 21 
10% IHnB 
27% 21% AM Wan 
40% 33% Aldftg 
11% 6% AMcr 
29% 24 AIM OS 

7% 4% Aawosk 
35 21% Aten 
90% 64% Hen 
30% T7 Afcj CD A 
11% ?Aa*Mic 
8% 6% Am Pied* 

8% 6% Aasafid 
25% 19% Mato**# 

52% 4*Amtm 
9% 8% Am Ad H 
3i 20% Aw Bamex 


018 19 105 0% 

090 3J 15 8 24% 

067 7 9442 35% 

084 96 111 8% 

096 17 18 3888 25% 

25 619 6% 

15 2220 29% 

1.60 1.9509 4151 85% 

34 4201 19 18% 

0BB 13J2 188 7% 7% 

025 35 25 35 7% 7% 7% 

On 12 12 1929 6% 8% 8% 

OS 26 13 31 afli 20% 20% 

080 1.2 66 3824 50% 48% 50% 



50% 

on 16 143 9% 

0.10 04 3114912 24% 23% 




9% 18% 19% 
99 97% 07% 


37% 28% Amflradx 100 5.7 10 8315 35% 34% 36% 4-1% 

2S% 18% A« 8uS PTC 080 16 14 317 22% 21% 22 -% 

8 6% Am Cap he 085 92 140 7 8% 7 

20 % l8%AmCapBd 104 19 30 79 17% >7% 17% 

23% 18% Am cap Ofa in SB 0 21 19% 

®$42%AmCy»i 1.B 13 56I292B 

37% 27% Awapw 140 70 (6 W3 32% 31% 32 

33% 25% AidEjjx on 19 1318722 31% 30% 31 

30% 24% AmGcni 1.18 43 23 2294 27% 27% 27% 

9% 5% Aw Govt ID 077111 317 8 5% 

27% 19% AmHthPrx 13011.0 710169 21% 20% 

20% 18% Am Usage 068 17 11 42 17$ 17% 1 . 

— ' ’ 100 4J 13 7416 63% 62% 83% 

2% 2%«mHpBM 075 27.3 9 140 2% 2% 2% 

96% 81 7j Arm 048 05 16 5289 94% 90% 94% 


65% 55% AbMjbm 
2% 2% Am HoBS 
_ 61 7j Arm 
77% 7Am Opptoe 
30 22% AmPrsc 
34 19 Amnesia 
8% 7% Am Real Es 
27% 21AOSUI 
22% 17% Am War » in 09 
32% 26 Am WAX 

43% 36% Anted 



43% 32 
18% 11% 

61% 50% Amoco 
9% 6%Ampnmt 
4% 3% Aim he 
34% 29AM0BB1 
4% 2%AratXSh 
58% 42%Anadarin 
34% 23% taring 
29% 24% AngaBea 
55% 47% A8BI 
34 70%/ 


Ameren he* 1.28 16 
taint* 


449 7% 7% 

487 24% 23% 

9 208 24% 24% 24? 
5 K 7% 7% 7% 

7 1907 26% 26% 28% 
Z100 18 IS 18 

in 4.T II 171 26% 26% 26% 

in 4J 74 3566 40% 33% 40% 


in HP 
088 34 
040 1.6 
0.44 IS 
048 7.8 


5 5 35% 35% 35$ 


- - 35% 

034 1 Jin 1780 18% 18% 18% 4% 
220 30 1712729 uB3% 61% 63% *1% 
OIO 1.4 5 11 7% 7% 7% 

u5 4% 5 +% 

30 29% 29% 4% 
2% 2% 2 r 


48% 49% 


012 1412 524 
1.40 4.7 9 1282 
10 304 

030 06 70 3404 . . . 

35 2795638% 34% 36% 
094 15 24 105 26% 26% 28% 
1.60 11 23 7262 51 50% 51 

jArWfflt 223851 32% 32% 32% 

18% (4%AB8nyh 044 18 17 34 17% 17 17% 

35% SOAontyx 158 4.1 71117 31% 31% 31% 

29% 22% Apartw Crp 028 1 0 40 3466 28% 27% 28% 

10% 8% ApnMonF 071 04 304 8% da% 

24% 14% APH 37 454 22% 21% 21 

7% 3*2 AppUfchg 0 31« 4 3% 3 

25% 16%ApplPwA 012 05 JO 77 34% 24% 

2B% 21% AitfDn 015 OLS 2016972 u29% 28% 29 

SI 43% AraOwrt 150 01 22 224 49% 48% 49% 

51% 45% Aran 40P 450 08 7 46% 45$ 45% 

6% 4%Arreeo 3 2774 u6$ 6% 6% 

a 22% Arms HP 110 9.1 4 23 a 23 

57% 39% Annatw 128 11 31 aio 42% 41 41% 

45% 33%AmMEbC 15 2825 37% 38% 37% 

1 100 
076 11 13 412 



7% 4% Alta Op 
33% 23 Anti hd 
34% 21% Asareo 
31% 22% Asttd 0x8 
44% 33% ASPOO 
25% 16% AriaFacF 
3% 1% Asst km 
37% 28% AtaWGm 
57% 49% A101 
263%22B% A6ndl2 
36% 29% AfctaGB 
9% 5% AflntaSos 
21% IflAUrtcEw 
112% 92% Attfcft 
10 3%A8as 

20% 16% Atmo* Eflgy OB8 U 
12% 8 % AOmMADH 034 18 10 234 
24% 17% Augri 018 08 S3 658 
12% BflosWaM OIO 15 SI 
58% 47% AaOriS 
20% 13% Aitmco 
19 7% AlM 
45 30% Ami 
62% 48% AnA 
14% ia%AydhC«p 
7% 5% Alar 


* 4 a -a •*« -n -rv 

4% 4% 4% -% 

34% 23% 24% ♦% 

040 1J 97 724 31% 30% 31% +% 

040 1J 12 18 30% 30% 30% +% 

IJU 15 14 3201 39% 38% 38% +% 

027 15 63 18% 18 16 -% 

Q5B115 8 48 2% 2% 2% 

012 03 K 1173 n38 37% 37% *% 

1J2 14 23932 54% 53% 54% +1% 

in 1.1 2100 259% 259% 259% 4«% 

108 8.4 14 233 32% 32 32% >% 

(US 4.1 7 2100 6% 6% 8% -% 

1J4 9J 9 455 16% 18% If* 

050 5.(195 4141 108% _ . . 

2 48 4 3% 4 t% 

48 17 16% 17 t% 

9% 9 9 

IS 'S *ft % 

060 1.0 26 2051 58 58% 67% v1% 

044 19 11 22 15% 15% 15% +% 

094 0 4 4 72 10% 10% 10% -% 

on u is an 38% x% 38% -% 

100 11 I8 4977u63% 61% 83% +2% 

9 185 10% 10% 10% +% 

22 338 8% 8 6%+% 


-Si 2 


38% 31% BCE 
9% 6% BET ADR 
5% SBalmcD 
>7% l5%a*nrFsrt 
22 % 

27% 21% BaktaBc 
30% 24% Ba(Cp 
15% 9%BMM 
9% 6% BaBy 
S% 20% BaRGE 
3% 13% BallBMap 
38 26% SacOw 
26% 20% BamsBIV 
12% 9% BaocDCsrH 
34% 27 SopHawi 

1 *4 “iBaacTeesa 
63% 49% Smug 
50% 3B%Bx*Am 
96 81% BaA Bus! 
25%22%&8» 

49% 44 6kB0StnP 

33% IStaMTi 
50% 43% BsnkAmA 
95 74BankAmB 
84% 62% BnXTfl 
38% 306ciaia 
30% 22% Bart (CiQ x 
39% M% Barnes oip 
48% 39% Bam8s 
13 8% Baum 
sa% 30%Baincn 
23% ftnlsr 
a% a% Bat SI On 
22% 19% Bd Tr 1833 
23% 13 BaarStm 

50% 4S%6emStfm 

37%27%Bwk9 

32% a Bactanan h 



- B - 

268 7.B234 1452 35% 34% 
021 11 2B 2B 6% 8% 
020 02 8 81 4 3% 

0.40 IS 94 16% IS 
046 2 2 4823332 2B% 20% 
040 1.6 2* 216 28% 25% 
060 21 73 394 28% 27% 
005 OS 14 102 
11 919 

1.52 OS 12 1618 23 
020 lO 30 112 
124 4 3 911469 28% 27 . 
094 17 9 233 26 2S% 

072 01 S 148 12 11% 

1.04 18 6 1319 28% 27% 
33 52 1% 1 

0.70 1.2 20 163 58 58% 

180 17 918523 4J% 42% 
5.58 6.B 2100 82% 82 

108 17 1211728 u29% 27% 
104 09 3 44% «4% 

12a 4JJ 52175 31% 31% 
US 7.4 19 44 43% 

000 &0 28 75% 74% 

180 5.4 5 2(39 67% 66% 
108 19111 9 38 38 

060 25 20 3050 24% 23? a 
1 40 17 53 13 37% 37% 

164 4.0 10 2835 41% 40% 
005 05(1015481 11% 11 

on 30 IS 2883 32% 31% 
> 05 4.0 4 2 7319 28% 25% 

1 48 8.0 14 112 24% 24% 

1.72 09 41 19% 19% 

060 16 4 6135 16% 15% 
323 7.1 2 45% 045% 

072 12 23 25 32% 32 

040 1.4 24 579 2B% 28% 


35: 




18% +% 
20% +1% 
25% -% 


i 

i 


The companies 
of the VI AG 
Group: Success- 
ful in over 70 
countries in the 
worfdwide market. 


VI AC 


UmBW* 
48%94%Bsctdl 
7% SBaflPr 
59% 49BalAfl 
21 13% Mh 
53% 60% BtfSBl 
55 43% Mo A 
25% 20%Bmti 
«53%8anrf4jp 
44 34%BMT 
24%B*msnA 
1% %Bmgu«H 
10% 13% BargBrx 
1985015100 BHW 
10% BBenjP* 
41% ISBeSBBf 
28% a%840i£ll 
55% 51% B#Wm P> 
24% 18% BstiSl 
53% 42%M* Lx 
18% 11% Bev8t 
21% 11%l 


074 
038 
17B 

on 

178 

on 

054 
4J0 
1.77 
047 
004 
049 

0.40 

ISO 
£00 
040 
1.44 

OIO 

23%BteWgnS* 040 



16% BDeck 

22% 18 Buck H PL 

10% 7%SttnkASY 
8% 6%Bfcfcrekhe 
10% 8%8UnXIV 
48% 37% Bock 
8% 6%BtaeCNp 
16% 9% BMC lad 
50% 42% BcWng 
30*2 19 BoteC 

21% 10B0884N 


040 

1.32 

073 

075 

070 

US 

012 

008 

in 

on 

on 



i Bnoa 


26% 9% Bonfc Dm t 208 
18% IIBamn 
24% 18% bmoi cat 
29% 20% Burnt 
38% 18% Brad Fad 
34% 29% BHEPnp 
B0% 88 f 
33% 191 

59%50%BMySq 
74% S4$BTNr 
54% 39MCBX 
82% 68% BP 
27 19% 

27% MSShd 
71% 53% BT 
28% 22%BH|nU 
38% 32$ BnsrGp 
6 5%Bmn 
30% ZB%BnftiB 
32% 24% Brftrr 
4% 3% BBT 
26% 17%anwk 
18% 13% Bnaii DU 
41 35% C iK l am PI 
28% 12% Bui CoM 
66% 47% BMW 
49% 36% Bah Base 
19%15%BwltBBPC 1.44 01 20 311 


0.04 

US 

on 

027 

140 

1J4 

182 

1.77 
140 

1.78 
a 1.74 

022 

177 

125 

1J60 

032 

095 

on 


032 

m 


120 

055 


CVgs 

w. w sh 

K S 100a Mgh l«* 

1 J 16 1818 48% 47% 

8.4 2 n 5% 5% 

52 15 5B85 5Z% 51% 

22 16 176 20 19% 

52 25 7705 53 81% 

1.1 24 122 54% 54% 

12 27 721 25% 24 

BI> 2- 54% £33% . 

44 12 TOO 39% 99% 39% 

1A 15 108 28% 29% ' 

4.8 17 31 % U 

11 21 708 15% 15 t . 

54 270 19900 19600 19900 
42 32 46 9% 9 % 9% 

23 9600 37% 38% 31 

92 8 27% 27% 27% 

9.4 34 53% SI . 

11 7 2884 19 18% 1 

19 34 552 49% 43% 

33 2064 15% 1<% - 
06 27 200 17% 17% 17% 

15 56 344 28% 28 ®% 

1J 2418720 u25% 34% 24% 

05 12 43 20% 20 20% +% 

11 36 a% 8 a 

110 481 8% d8% 6% +% 

OS 307 8% dB% 8% 

18 28 B381 45 41% 45+2 

12 183 6% 6% B% +% 

05 9 91 16% 16% 10% 

13 11 7287 44% 43% 43% +% 

12 6 3538 17% ZB% 27% +% 
03 38 788 17% 16% 17% +% 
02559 8295 22% 22 22% +1% 

03 10 6430 13% 13% 13% 

U r 41 23% 23 23% +% 

22 29 1550 27% 26% 27% *1% 
OB 951 35% 34% 35% +% 

7.8 7 104 30% 30% 30% 

18 11 819 89% 67% 89% +1% 
19 2372 23% 22% 23 +% 

50 19 6331 58% 97% 68% +1 

30 13 1732 S3 58% 58% 
5.1182110® 49% 46% 47% 

£1 28 2803X04% 82% 64% 

8J 8 254 21% 20% 20% -% 

12 30 382 28% 25% 38 +% 

5.9 18 2357 63% 62% 63% +% 
SJ 13 259 23% Z3% 23% 

4.7421 231 33% 33% 33% +% 
W 4 27 7% 7 7% 

32 5 273 30% 23% 30 +% 

12 28 5834 31% 30% 31% +1% 
37 81 4% 4% 4% 

12 35 1999 20% 20' 

10 42 
7j6 10 

9 1724 13% 13 

14 18 4848 50% 48% 

1J 21 6344 42% 41% +1% 

16 15% 


. 20 % 2 
41 18% 15% 1i 
45 38% 36% 



- C - 

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FINANCIAL TIMES MONDAY OCTOBER 3 1 1994 it 


33 


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4 pm dax footer 28 


NYSE COMPOSITE PRICES 


NASDAQ NATIONAL MARKET 


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0XS5M9 18% 19^2 +% 
283 816 8% 8% 6% .% 
01241 1% 11% 

10 2080uI6% 15% 16% +% 
088 52 43 51% 51% 51% -1% 
28WJ66 22% 21% 22 +% 

18 13 5% 5 S% +% 

1837 11% It 11% +% 
49 4100 14 14 14 

7QZ100 2% 2% 2% 

3 1004 2% 2% 2% -% 


BeoAiis 

EraeanAsa 


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Cterataddl 381148 3% 3% 3ft +% 
Conrikaa S 586 6% 8% 8% +% 

ConWM 80 321 24% 24 24% -% 

CUrtOOT 162 444 6% 6% 8% 

CUBA 050 181057 17% 18% 17% 

Cspytoa 36 581 5ft 4% 5ft +% 

Cotta CO X 8904 60% 58% 58% -2% 

OBipMA 472685 17 16% It +ft 

Oartar 8 am 2$ xra 22% 21 % 22% +% 

toy Comp 1 221 1ft 1% Ift 

CRMltaS 33 ill 5% 6% 5% -% 

Cytogsn ? 324 3% 3% 3% +% 


DSC Cm X11069 31% 30% 31 +% 

MU final 013 32 24 85 82 84 +2 

MtBSHtt n 166 ?% 2% 2% 

Dartoc 38 2S2 B% 8J5 9% 

Daaoops 18 4201 o19 17 1B% +1% 
DNpWDp IX 10 288 24% Z3% 23»2 +% 

DebStopaxOX IS 168 5 04% S 

Wa BEo 032 24 15 16 78% 18 

DttrtfiS 080 44 6 30 29% 29% 

WeterapaaOM 9 8 17%017U 17% -% 


- F- 

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FatrCp 024 38 45 6 5% S% -% 

Paxtauf OW 70 10981(44% 43(< 44% .% 
FHPtad 181579 SX%X% •% 

RfthTtrt 124 152225 52% 51% 52% *% 

RftyOS 12 293 4% 4% 4% 

RggHA 024 0 48 7ft 07% 7U *ft 
Ffcna 35 1X1 25% 24% 25% 

FkHAra IX 71105 31 X% 31 ♦% 

FtffldMo IX 11 W 24% 24% 24% 

FstCOBk 080 20 224 22% 22% 22% *h 

Raseety IM 10 1859 26% X% X% -% 

i Foleno US 1> 1785 (7% *5% 47 »% 

fat Wash 036 7 245 9% 9% +% 

FetfadMki 056 6 231 21 Xft 21 +ft 

Ftasdar IM 8 214 32% 31% 32% +% 

Ftatadn S 357 9% 9% 9% +% 

Rssrv X1314D23% 23 23% *% 

RohH 18 588 B% 8% 6% +% 

FttrtA 009 141525 5% 5% 5% +% 

FoodLB 0X582 862 5% 5% 5% +% 

FUOTM IX 10 91 32% 32% 32% -% 

Peracmer JO 523 n% »% n% «.% 

Foster A 41 B80 3% 3% 3% +ft 

FtthFta IM 13 2570u32% X% 32% +1% 
FttFH 040 7 485 14%d14% 14% 
MHsto tia 10 290 27% 27% Z7% -% 

FuSerWz 058 21 127 34% 33 33% -% 

Ftdtarftl 068 10 X 19% 18% 19% 

Fowl 024 X 278021% X% 21 
fUnedADH 12 14 2% 2% 2% +% 


. - Q - 

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GSKSnv 007 24 70 16 15% 16 

Sa*» 0 25 2ft 2ft 2« -A 

GamelRa 10 119 3% 3% 3% +% 

GOT CO 0161 W 135 7% 7% 7% -% 

GOTBtad 040 23 132 uZ2 20% 22 +% 

foray* 17 325 4% 4% 4% +% 

fendrtT 13234 5% 4% 4% 

forte* Cp 4X 41 1858 24% 23h 24% +% 
focus he 2M12S2 8% 6% 8% -% 
Genzyms 45 3871 33% 31% 32% +1% 

(anon fit 040 19 357 15% 14% 15% +% 

fifths*. 012 12 5121 15% 15% !S% +% 

E&HftA 080 18 M IS 13% IS -1 

QidtBton 12 8 5% 5% 5% 

Goadfitas 14 267 11% 11% 11% -% 

GaukbPmp QX 19 133 21% 21% 21% +% 

GradcoSte 387 184 u4 3% 3% -% 

Barts QX 74 68$ 22% 21% 22% +1 

Grt® AP 034 11 240 18% 18 18% 

Gmsdifta 0 224? £ ft ft 

Grossmans 1 5309 2% 2% 2% +% 

and Mr 637 105 13 12% (2% +% 

GIT Dorp 12 33 16% 16% 16% -% 

GbHVSeg 5 Ml 9 8% 8j| 


-H - 

KanJhgA . 85 27 7% 7% 7% 

ktotowyH QX 9 9 24% 23% 24% +1 

(toper Gp 0X 125174 13% 13% 13>2 -% 

HarbCop 771 12% 12 12% +% 

NBO&Co 018 2BHI7S3 31% 29% 31% +1 

Hesflhar 254170 28 X% 27% +% 

Haettm OX X 388 12% n% 12% 
Haatoiftn 12 978 B% B% aft *ft 
Itarttagsr* 0J6 >93772 71% >!»%+% 

Heidml 202 9% ri8% 8% -1% 

HetolTfay 11 2551 DIB 18 18ft +1ft 

HflrtWf* 088112181 17 18% 16% +% 

HogMSya OtS 18 *10 6% 8 6% +% 

Hbto0to 71 5S8 15% 15% 15% +% 

Homs Beal an 8 12 x% x% 20% +% 

Han tok 044 19 208 27% £8% 27% +% 
Hbrntert 162680 14% 14% 14% +% 
HanOTtal 044500 K 5% 5 5 

Hurt JB 0X 16 2015 17 16% 16ft -ft 

HuritaOB an 7 1407 18 17% 17% +% 

taco Co 008 I 85 4 3% 4 

HUUffKti 1414458 28% »% 25% -I 

HyCorSk 181222 5% 4% 4fi Va 


FRS91 
DB Cusm 
KkU 
tanuctr 
bmnmgon 


- 1 - 

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29 7930 9 8% 9 +ft 

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pf Sta 

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KeiyS* 072 25 5650 30% 29% 30 

Kentucky 011 10 Jioo 6% 6% 6% 

KBntaU aw 13 17 24% M 24% +% 

| KKCKW 22 833 10ft 10% 10ft ♦>« 

KlAbstr re 5364 (63% 52 S3 +% 

Koauteape 2 314 4 3% 4 +% 

Ko0 A 12605 H ii ft -ft 

Kanaglnc 2293002 2S% 24% 25«4 •% 

kullduiS 12X95 18% 18% 18% •% 


OlOX XI 5% 5 6%+% 

0481BBI33I1 81% 60% 61 -% 

29 7% 7% 7% 

31 14 12%d11% 12% 

X 3318 22% 21% 21% -% 
10 493 8% 7% 3% +% 
125724 16% 15% 16% +% 
OtO 23 150 21 X% 3% +% 

171204 10% did 10% -% 


topu1Bc 040 30 33 16% 16 IB +% 

trams 024171 « 12% di2 12 

WRn 17 3580 14% >4 14% +% 

Honrix 320764 Z7% 27 27% •% 

IngleiNkt 086 15 70 11 10% 10% -% 

Magrflcw 33 7663 28% £7% 27% -% 

toygWSya 35 61i 14% 13 1 * l* 1 ? +£ 

tartHto 6 147 2% Zii 2% +% 

total x 024 1158305 62ft 80% 62% +1% 
htaM 8 40 2% 2 2%-% 

tOfte 040X2418 15% >5% 15% +% 
k*U Tel 18 224 8% 8% 8% -% 

taUftaA 024 15 38n 11% 11% 11% +% 

Wgph 36450 8% 8% 8% ■+% 

Ueriaaf 21017 4% 3% 4% +% 

totndH 72709 17% 10% 77 -% 

remc X 8105 16% 15% 16 +-% 

HMyOA 14 130 17 IB% 17 +% 

WBa* 00217 X 2% 2% 2% 

lot lotto 276 18 5% 5% 5% 

hurt* 006 2D 29B 31% X% 31 »% 

fenragaCp 3lS30u*% 4% 4% 

iMBWlk 18 2B2 18% 18% 18% -% 


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- J - 

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JnntaE OX 13 18 9 8% 9 

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JohnaoaW 58 318 X% 22 23% +% 

Janes ht ID 13 14% 13% 14% +% 

Jonuued 010 12 113 8% 8% 8% +% 

JudynCp 1X29 33 27% 26% 28% 

jsBf*i an w rad a »% 24ft +ft 

Jura LIB 02B 10 517 18 18% 19 

JMh 018 10 518 13% 13 13% +% 


- L- 

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Lancaster Q*S 15 1106 34-% 34 3*% -% 

Lance he* 096 18 179 18 17% 18 +% 

UrtmtfipU a 703 19»j 18*2 19% +1 

Lanopkea 10 45 7% 7 7% +% 

Laentpe 27 *58 4% 4% 4% «% 

lean 5 1*2132 ir% 17 17% +% 

Lsran Ft 048 X 297 27 36 27 *1 

USDS 371 5569 22% 21% 22% *1 

UUCP 016 2 46 6 5% 5% -% 

LzcJOn 2? 1*50 18% 17% 18% +% 

LegcrtCp 17 2631 X% 28% X -% 

Die lea 0X17 5 18V 18% 18% -% 

Dttme 2* 203 5 *% 4% •% 

DD/ndA 023 12 67 13% 13% 13% -% 

Lae I r>y K9>»% 1X736% +% 

LitaiT a 52 18 553 18% 16% 16% +% 

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looanei 086 X 646 24% 24% 24% 

UneSOf It 170 6% 5% 6% +% 

Loud) 39222166 39% 37% 39% +1% 

LWCb 31377 1(4% 4% 4% •% 

LVMH 046 4 21 32 32 32 +% 


- M- 

UPCtn 005 2057782 22% 22% 22% +% 
MS Cara X1146 24 23% 23% -% 

(tar MB 060 43 IX 13% 13% 13% 
KactaonBE 188 14 40 33% 33 33 

UagnaFte 163083 37 38% 36% ♦% 

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U90 Box 16 57 10 % 9% 9t l -ft 

MareamGp IIS 249 97, fi% 9% -% 
HteteDr 118378 4% 3% 4% +% 

HarMCp 9 7 41% 40% 41% +% 

Usn/xst 2X1% t% 1% 

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MsntaB OX 11 1478 20% 20*4 20% -% 
Uastoc 9 279 7% 7% 7% +% 

Mateo » 50 ini u67% W% 66% +1% 

Maxtor Cp 01273 3% 3% 3% +% 
Mcfototl8*044 12 3 16% 15% 15% -% 

McCQnnfc 048 162641 19% 19% 19% *% 
Me** he 016 17 1W 13% 12% 13% +% 

MedtiMS 048 13 468 X% X% 23% -% 

Melamine 024 71 250 10% 10 10 

MentarCp 016 56 5*6 17% 16% 16% •% 

Mertffi 024 3010369 13% 12% 13% +% 

MenanLB on 11 247 21 X% £1 +% 

MeraiyG 070 B 899 30% 29% 30% +1% 
Menoan IX 11 22M 29** 28% 29 +ft 
Menas) 9 990 9% 9% 9% +ft 

HeDudeA 012 18 597 18% 19 18% +% 

UFSCn X 1197 37% 35% 37+1% 
MUotoF 020 20 3333 10% 10 10% +*e 

Ifecti NalB *£0064 915 76*2 76% 78 +1% 

ncndWi 14 IX 5*2 S 5 
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Mawom 87057 ufi% 8 8% +% 

Mografc 102038 5% 5 5% 

Uapota 3 966 8% 6% S% 

LBcsfi 333591 5 oS3% 61% 62% +% 

tod AH U 24 8 X 27% X 

wtanbex 068 11 2680 27% Z7% 27% +ft 
MdwQah «O50 22 31 X% 26% X% +1 
MEerH 052 18 978 26% SB X% +% 
Mftm S4 27% 27% 27% +% 

toffltacil X 355 15% 15 15 
MOMsTel 49 3029 20% 19% 19% -% 
Modem Co OX 19 17 7% 7% 7% 

HMtaeMT OS 21 168 X 29 29% -% 

tote 004 3246 41% 40% 41% +% 

(total he 004 3322561(44% *3% 44 Ji +U 
MBSCOT OM 16 284 8% 8% 8% -% 
MosmPzOXIO 18 27 28% X% +X1 

KISSya 056 9 75 X% S% 22% -% 
MBaad 13 517 29% X% X% 
Mycogeo 5 142 10% 10 10ft -ft 


- N- 

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NasbPnO) 072 >1 30 !0%d1S% 16% +% 
Ntottonpt 036119 X 14% 14 14% +% 

Bra Sen OX 21 178 14% 13% 14% ♦% 

Hawgato tun 8 3 17 15% 17 +1% 

ICC O4310B 13 83 83 63 +% 

Krtcu 192997 30% X 30% +1% 

NebdiGen 28S364 30% 18% X+tft 

NatadS 1011X1 7% 6% 7% +*s 

etaxogen 9 >9 6% 6% 6% -% 

NSWEBUS OX 21 183 19% 18% 18% -% 

He* Image 32 497 8 05% 5% +ft 

MmgtoM 22 1414 30*2 29% 30 


Newprt Cp OM 22 78 7% 7% 7% 

JMtelM 2)16468 7% 8% 7 +% 

Nonton 056 X 657 57 55% 57+1% 

Nfctnn 040 X 7382048% 48% 48% +1 

Hunan I 15 7 20 19% X +% 

KSbrlh 3 131 5 4% 5 +*a 

MktaiTst 088 122012 36% 35% 38% +% 
MW A* 21 1810 20% 20*2 20ft -% 

MoveS 86837466 178 *8% 17% +% 

AtoreftS 492710(65% 53 54% +% 

IKA 60 6% d5% 6% +% 

NSC tap 7 10 fl 27j 2% 


- o - 

□Charters IB 374 II 10*2 10% •% 

Octtotan 18 433 21% 21 21% +% 

OtSebcaA 17 64 8% 6% 6% -% 

OEatnlg 13 944 13 13% 13 +% 

OOTtoyN 120 10 37 31% 30 30% +% 

OdOCa 1.48 6 TOO 29% 29*a 28% +% 

OkJ Kart 124 10 *17 32% 31% 32 -% 

Old KBS 092 16 5 38% 38% 38*2 -% 

Ottwrarap 100 6 692 28% 28% »% -% 

Orafflce 8 352 10% >0% 10% -% 

OracieS 6816713 45% 43% 46% +ift 

00) Senes 51 3672 20% 18% X+2ft 
OrtutcCb 099 25 10 8% 8% 8% 

OrtMSopD 7 14 9% 9*2 9% +% 

OreoonUa 031 12 92 6% 6% 8% +% 

Ortap 14 50 2% 2% 2% 

QattaBA 041371 190 15% 14% 14% -% 

OBMHteiT 050 12 9 11% 11% 11% 


QlttaBA 041371 
OBrtnafiT 050 12 


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OutoFoodtOX 18 488 72 21% 21.80 +18 

Quantoa HH661 is% 14% 15% .ft 

(tada* SS 350 17% 1?% 17% -% 

OK he X50C 43 497s 43 


- R- 

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RJbys 3 441 4% 4 *b 4% 

Rtotere» 1 470 4 3% 3% ■% 

Rkiwonfl X 211 X% 19% X 

Ream 17 817 19% 18% 19 

BMteA . 22 35 23% 23% 23% 
Reftagen 1 *69 2% 3% 2% 

Rep waste 6 567 ifl% 3% 3^ +ft 

Readtara 21 339 12*2 12 12% »% 

fieuecs 037 1G3757 <7 *5% 48% +1ft 

Reronbc 9 68 5% 5 5 

RVtrFtt OEO 10 34 33% 33% 33% 

ROOMS 1.40 18 309* 57 55% 57*1% 

OMgat 012 >6 58! 8% 7% 8 +% 

Rocnsvfih 0.40 4 570 18% 18% 18% +% 

Roosavel 044 2 2468 15% 15 15 •% 

ROS3 Sk 020 11 S8S 14% 14 14% 

Roteditoed 31 1708 25% 24 25% +1% 

Rouse OG8 57 273 19 18% 10% 

RPMWra x 056 21 1143 19 18% 19 + 7 g 

RS Fkl » 060 14 X 23% 23 73% +% 


11 1998 6% 0% 6ft +% 


- s- 

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Sanderson 030 i* 129 uM% 19*3 19% 
SchbagAraUO 21 398 3 X% » +ft 

ScJMaJL >35270 u48 48% 47% •)% 
SClSysra 15 3127 18% 19% 18% +% 

Sam 7 1230 7 8 % 7 

Scam Co ass 10 two 27% 71% 22% +% 

Sore Bid 7 615 4% 4% 4% ♦% 

SeaWd 120 47 .-100 35% 35% 35% +% 

S’gate 11S721 X% 23% 25% +1% 

sacp 016 X 88 21 20% 71 

fohrtsB 036 5 19 2ft 2ft 2ft •% 

SeiKlkB 1.13 IS 9 »% 24*4 S% +,'« 

Sequent 91 5683 ui 9% 18% 19% +% 

Sequoia X 203 3% 3ft 3ft +ft 

Sere Tech 13 122 9% 9% 9% +% 

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Sevensui 022 17 3 18% 18% 18% -% 

ShrMed OM 22 44Mn30% X 7 a Xft +ft 
aas»0ta 22086? 5% 5% 5ft -ft 
Star rated 32 1015 20% 19% 30% -% 

ShOwtfcP 7143* 8% 77, 8% +% 
Stan On 170X74% S3 74+f% 

Sienaluc 4 58 3% 3*a 3% +% 
SigmAI 033 16 1 1BB 35% 34 35% 
SlgmaDes 10 2527 7% 8% 7 -% 

CUotVSc 006 60 346 12 11% 13 +% 

SflcnVEp 5757?7U19?| >77, 1^ +>ft 
Sfflpscn 040 16 58 13% 12% 177a ♦% 

srtrfld 40 s« a% a w% +% 

SruHfcBe 3927861 15% 14% 1*7, 4, 
SattwreP 18171 6*< 5% 5% 
Sous 056 163541 23*2 22 23% 
Sortllst 068 92153 19% 187, 19% +% 
Spiegel Ax OX X *235 14*4 14 14% -ft 

StJufeMd 040 16 5923u37% 36% 37% +% 
taPOTBex 030 10 787 21% 20% 207, ♦% 

Sfcjfif D 338 Ift Ift 1ft -% 

SLxteS 527609 34% 31% 34+1% 
SGdaS* 060 14 5568 3* 33% 33% 
5kfMtod I836S3 23% 22% 23% +ft 
iStoRegta 068 11 IM 18 17% 17% +% 

| Steel Tec 008 Id 2S5 13012% 13 +% 

ShUyUSA UOIS 110 B% 9% 9% +% 
SUN 141 190 X 19% 19% +% 

SortxO 1.1013 >8 22 2>%2>% -** 

Strodffly 96677 4% 4% 4% +% 

Stryker 028X16(5 X 35% 3S% +ft 
SOTeartl X 27 14% 13*2 *3% 
SunauneO 080 14 X 35JJ X% M% 2 
SuunriBc OM 13142! 21% X% 31% *,\ 


SunrtTe 

Sui Sport 

SUHBe 

SrartTn 

Sybase Inc 

Symantec 

S I"** 

Syneroom 

Syiwgwi 

Synedc 


314037 31% X 30 -1% 
10 X 4% 4% 4% 

18Xffi9u3d% 32 34 +1% 

47 7(6u46% 45 45% +% 

60 6736 S3 51 52% +% 
48KB77 18% 16% 17ft +1 
040 X 13iCO% 19% 30% 

100 95 5% *7, 5 

1 1950 5% 5*2 5*2 -% 

66 18 16% 16 16 -% 


SysraScft 0.12 14 11X 12% 
Systtm&a 322343 20% 
Syaaned X IM 7% 


5*2 5*2 -% 
16 16 -% 
12 12 % +% 
19 20 +% 
7H 7% -% 


1.72 14 32 32% 32% 33% -% 


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Etooudop 062 11 181 12% 11% 12% 

Plato 132 16 74 24 23% N +% 

PaoSCra 31 798 75% 73,1 74% +1 

Psandic 42512/ 38% 34% 36% +% 
Pxtdmx 036 47 488 38% 37% 38 +% 

PayCoAO 21 15 8% 7% 8% +% 

Fearless 050 69 1493 ol 6% 15% 15ft -ft 
Penn my 10 90 d16% 15% 16% +% 
PamVlkg m X 10 35 35 35 +% 

PBtWX 072 18 2(0 <2*4 41% 42% +ft 

Prated, 1 13 S32 5% 4% 5% 

| PBnuatl 020 24 SO 22% 31% 21% 

1 tapleaH 040 >4 1197 14% 14 14 -ft 

Petrorte 1.12 15 120 29ft 39,% 29ft -ft 
Pitonucy 48 3215q16% 14% 16+2% 
Ptaenlca 3/ 4322 o7% 7% 7% 
norall 048 3 £ 8% 8% 8% 

Kdurta 41 634Sul9% 18% 19% +% 
PWtotod SO 99 20 10% 19*2 -% 

Ptonerafip 084 32 225 47% 48% 47% +% 
PtanaaM OS 23 3143 34% 32% 34% +1% 
PtooeaSr OC 10 IX 18% 18 18% +% 
ten Fad 5 112 8% 8% 8% -% 
teMd 16 2 B 85 % 8 +% 

Pres Lite 009 3 512 8% 5% 6 +% 

tossed >446148 4f% Sfi% 39 -2% 
MCert 238877 15*2 15 15% *% 
PrtdoPet 38 3974 5% 4% 5 +% 

PitoOOT X 508 32% 20 X -2% 
Proa Ops OM 23 1273 25% 25% 25% +% 
PutatB 012 I4331?u2fl% X% X% +% 
Pyoto 77127 10% 9% 10% •% 
(ktoaLog 10 M 6% 5% 6ft 


-T- 

7-CtfSc 53316 3% 3% 3% +ft 

T-ruMPr 052 X 3090 33% 31% 33% +1% 

TBCCg 131561 9% 9% 9% +% 

TEA forte 044 X 187 23% 23% 23% +% 

TecNfcta 123781 19% 10% 19% +1% 

Teamed Qtt 12 24 48% 46 46 -1 

Tektoee 141243 23 20% 21% -1 

TrtCOSys 13116117*2 17 17% -% 

rrtCnvt 17413441 23% 23% 23% +% 

Teltoto 71107 5 4% 4% +ft 

TefUte M 60691(51% 48% 48% -% 

Teton Cp 001 712131 13% 12*2 12ft -ft 
irtraTee 89 Sis 8% 8% 8ft -ft 

raofMDR 0.10 28 1791 27% 27 27% +% 

Item fora 7914636 41% 40% 40% -1 

T1 65 5*2 5% 5% 

TJIrt 022 27 996 18% 17% 19 

TotaWd S 42B 7% 8% 7% +% 

Tokyo (tor 03* 35 Z1D0 58% 98% 58% 

Tam tenon 671067 13 12% 12ft •% 

100(6 Co 028300 61? 6 5% 6 +% 

TPf Enter 2 2033 5% 4% 5% 

TranSWrtd 163 12% 12% 13% 

Trantoh WJO >0 5 37% 37% 37% +% 

Trtcara IB 219 3% 2% 3ft -ft 

Tumble 75 816 14% 14% 14% 

TRBtco8kC 1.10 ID 18 19% 19% 19% 

Tseng Lab 020 13 699 7 6% 6ft -ft 

TysfdA 008184 1302 24 23% 34 


US Miner QW 167119 48% 45% 46% 
Unfbb 3 941 5% 04% 5% +% 

UCUesfe ID0 13 >8 16% 16 16% +% 

UST5T 280 14 1430 1(61 60% 61 +% 

0*1*0 SI 040 8 217 10% 9% 10 +% 

Udfag OM 14 2 18% 18% 16% +% 

Ihbh m 24 CG 45% 41% 45 •% 

US Banco 1.00 96969 34% 23% 34% •% 
USEnergy 5 181 4% 3% 3ft 

UST Cup 1.12 8 828 11% 10% »% +% 

Utah Med 14 395 9% 8% 8% -% 

UMTrtw 13 HE 63 53 52 +% 

UK 13 13S 4% 44%+% 


- V - 

030 38 61 17% 16% 17% 

123 335 27% X% 37*| +% 
X 1539 32% 21% 32% +% 
422051 37% 35% 27% +f% 
10 50 17% 16% 16% 

312 1770 22% 21% 21% -% 
Z7 7994 12% 12 12% +ft 

017 18 113 19% 19% 19% -% 


- w - 

WunaEn OIO 20 95 X% 25% 25% 
Wtenxech 97 860 S% 5ft 5% +% 
WraUUSBATB 630937 16*2017% 18 -*, 

HMftdSLOM 7 1585 18% 18 18% -% 
WatlrtiH 022 9 303 24% 23% 24% +% 
«tesu PU 02414 18S9 23*2 23 23% +ft 
W0-40 £40 IB 163 43% 41% 43% +1% 

mm 4 437 3% 3% 3% •% 

wears* ora 11 zib 3 a> 27% za +% 

WstonBoc 068 27 114 32% 31% 32% -% 

vwtei 11 131 12% 12% 12% +% 

WapSA 2 556 14% 14% 14% -% 

VMSBtoA 11 »1 3% 3% 3% +% 

•tote OS8 X 885 47% 48% 47% +% 

tonSorexia 78 1972 33% 32% 33% +% 

NtttenL OX 14 4 18% 16% 18% -% 

Untugi 040X3342 23 22t 2 23 

WPP SOUP tUO 22 150 3% 3ft 3ft -ft 

teymao-ta\a40 1 453 B 5% B +% 


-X-Y-Z- 

*“■ 384931059% S7%S0%+1% 

tana tap 21015 3% 3 3% +% 

Mdorax 09(174 1187 19% 18% 19ft +% 
YOTRscb M 470 3% 3% 3% +ft 

ZkniUtah 120 9 X7 38% 37 37% -% 



34 


^FINANCIAL TIMES MONDAY OCTOBER 31 1994 


FT GUIDE TO THE WEEK 


31 


MONDAY 


Coal Authority takes over 

The newly 
formed Coal 
Authority takes 
over ownership 
of the UK’s coal 
reserves and lic- 
ensing func- 
tions from Brit- 
ish Coal, which 
is being priva- 
tised. The 
Mans field-based 
authority's chairman is Sir David 
White, chairman of Mansfield Brewery, 
And its chief executive is Neville Wash- 
ington. a former army colonel. 

Sino-South Korean relations: 

Chinese premier Li Peng begins a five- 
day visit to South Korea, where he will 
discuss Beijing's role in promoting 
improved relations between North and 
South Korea. China is North Korea's 
closest ally, but has also become a lead- 
ing trading partner with South Korea. 
Li's visit follows two trips by South 
Korean president Kim Young-sam to 
China. 

EU expansion: European Union 
foreign ministers meet their counter- 
parts from Poland, the Czech Republic. 
Hungary, Slovakia. Bulgaria and 
Romania in Luxembourg. The leaders 
will discuss setting up 3 dialogue to 
help strengthen their relationship, 
ahead of eventual expansion of the EU. I 
They will also discuss the situation in 
Bosnia. 

Women on top: The Women of the 
Year lunch takes place at London's 
Savoy Hotel. About 300 women who 
have achieved outstanding success in 
their chosen fields will attend. Special 
guests are the author of Wild Sivans. 
Jung Chang, and Diane Abbot MP. 

Greens vs Suharto: Environmental 
groups take Indonesia's president 
Suharto to court today, alleging that he 
diverted Sl85m i£H7m) from a refores- 
tation project fund to help develop the 
state-run aircraft industry. 

Ship safety: Norwegian proposals for 
ro-ro ship safety will be put before a 
meeting of Nordic ship safety directors 
following the sinking of the Estonia 
last month, in which 900 people died. 

Norway is responsible for looking at 
the stability of existing ships, while 
Sweden. Finland and Denmark are 
examining ferry evacuation, the design 
and operation of bow doors and lifesav- 
ing equipment. Norway has said it may- 
take unilateral action over standards 
for Norwegian ro-ro ships, and foreign 
ro-ro vessels trading to that country', if 
there is no international agreement. 

Taxing time: Today is the deadline 
for filing annual tax returns in the UK. 
All taxpayers whose pay is not fully 
covered by PAYE, who pay tax at the 
higher rate or who have received a tax 
form from the Inland Revenue risk 
being charged interest on any outstand- 
ing amounts. 



TUESDAY 


New rules on unit trusts 

The UK's £100bn unit trust industry 
makes further progress towards deregu- 
lation with the coming into force of 
new rules liberalising charges and the 
range of markets in which the trusts 
can invest A further change means 
newspapers no longer have to publish 
the “cancellation" price - the lowest 
price at which units can he bought 
back by the unit trust company. v 

UK economy: The underlying rate of 
inflation may last month have reached 
its lowest level since records began in 
1967. but other indicators such as the 
producer prices index, the third-quarter 
GDP report and the latest CBI survey, 
suggest inflationary pressures lie 
ahead. November’s quarterly bulletin 
and inflation report from the Bank of 
England, out today, will give a view on 
future prospects. 

Casablanca summit: On its last 
day. delegates at the Middle East/North 
Africa Economic Summit in Casablanca 
are expected to approve a declaration 
establishing a regional financial organi- 
sation and laying the foundations for 
greater co-ordination between develop- 
ment assistance and investment guar- 
antee organisations. The summit may 
see the setting up of a Middle East/ 
North Africa economic community. 

The gathering aims to provide eco- 
nomic foundations for a peaceful Mid- 
dle East after Israel's peace agreements 
with the Palestine Liberation Organisa- 
tion and Jordan. 

Havel in Hungary: Czech president 
Vaclav Havel visits Budapest at the 
Invitation of his Hungarian counter- 
part. Arpad Goncz. Although Havel has 
visited the country several times and is 
on good terms with Goncz, it is his first 
official visit as leader. 

Dairy industry: The UK’s Milk 
Marketing Board is replaced by the 
Milk Marque, a voluntary farmers' co- 
operative. The UK's 30.000 dairy farm- 
ers will be able to sell their milk to 
whoever they like. Previously the MMB 
was obliged to buy all of it. Industry 
analysts claim milk prices are set to 
rise as a result. 

Duty call: Air passenger duty, set out 
in the UK Budget last November, 
comes into effect, ft will add £5 to the 
cost of domestic and European flights 
and £10 to those elsewhere. 

Dennis Potter: A memorial service 
will be held for British novelist and 
playwright Dennis Potter at Ham in St 
James’s Church, Piccadilly, London. 
Potter, the creator o? television dramas 
such as The Singing Detective and Lip- 
stick On Your Collar, died in June. 

Japanese heritage: A six-day world 
cultural heritage conference opens in 
Nara. 

FT Surveys: Greater Atlanta and 
Australia. 

Holidays: All Saints Day (some 
European institutions closed). 



WEDNESDAY 

lliescu seeks UK support 

Romanian president Ion lliescu starts a 
three-day visit to the UK. during which 
he will meet prime minister John 
Major, trade and industry secretary 
Michael Heseltine and foreign secretary 
Douglas Hurd. He hopes to boost eco- 
nomic ties between the two countries. 
Major is also expected to raise the case 
of Adrian and Bernadette Mooney, 
jailed for 28 months each earlier this 
month for attempting to smuggle a 
baby out of Romania. 

Inflationary pressure: Chancellor 
Kenneth Clarke and the governor of the 
Bank of England, Eddie George, meet 
to discuss monetary policy. Markets are 
ambivalent about the likely timing of 
future interest rate rises. When the 
chancellor raised rates in September, 
he did not announce the decision until 
the Monday after that month's meeting. 

Swedish finances: Goran Persson, 
finance minister of the newly elected 
Social Democrat government, presents 
tough plans to cut the country's budget 
deficit, which is running at 13 per cent 
of GDP. Citing the need to stabilise 
Sweden's debt by 1998. he is expected to 
go beyond the SKr61bn (£5.3bn) of 
planned savings and tax increases his 
party outlined before its September 
election victory. 

Nuclear traf fi cking: 

A meeting at 
the Interna- 
tional Atomic 
Energy Agency 
in Vienna will 
discuss strate- 
gies to combat 
illegal traffick- 
ing of nuclear 
materials from 
the former 
Soviet Union. 
After the dis- 
covery of several cases of plutonium 
smuggling to Germany earlier this 
year, the agency has made the issue a 
priority. 

OECD in Bucharest: The 

Organisation for Economic Co-opera- 
tion and Development advisory group 
on investment holds its fourth plenary 
meeting in Bucharest 

Turkish prime minister Tansu 
Ciller visits Israel at the start of a Mid- 
dle East trip that trill indude Gaza and 
Egypt, with the aim of furthering bilat- 
eral ties. She is the first prime minis ter 
of Moslem Turkey to visit IsraeL 

William Holman Hunt/s “The 
Shadow of Death", one of the best- 
known Victorian images, shows Christ 
in his father's workshop stretching at 
the end of his day’s labour to give 
thanks to God. lire setting sun casts a 
silhouette, which the Virgin Mary sees 
as a premonition of the Crucifixion. 
Sotheby's in London offers the quarter- 
size replica of the 7ft-htgh original, 
which Hunt made for use by engravers. 

It is expected to fetch £900,000. 




Trick or treat? 


3 


THURSDAY 


Swan song on the Tyne 

The Type 23 frigate HMS Richmond, 
the last of 2.700 vessels built by 134- 
year-old Swan Hunter, leaves the Tyne 
for Portsmouth, on its way to be 
handed over to the Royal Navy next 
week. Richmond’s departure from 
Swan's WaHsend yard signals the com- 
pany's closure and the probable end of 
shipbuilding on the river. Swan has 
been in receivership since May 1993. 

Embattled Russian prime minister 
Victor Chernomyrdin arrives in War- 
saw for a two-day visit to sign an agree- 
ment that will cancel mutual debts and 
open the way for a 600km natural gas 
pipeline across Poland to Germany. The 
pipeline is part of a longer 3.000km 
project designed to bring 63bn cu m a 
year from the Jamal peninsula in Rus- 
sia to western Europe. 

Cinema scope: The 17-day London 
Film Festival opens. More than 200 
films from around the world will be 
shown, and the event includes premiers 
of Kenneth Branagh's Frankenstein 
starring Robert de Niro and Dermis Pot- 
ter's last film. Midnight Movie. 

Plane facts: What is thought to be 
the world’s first auction of commercial 
aircraft takes place in Las Vegas. More 
than 40 civilian aircraft go under the 
hamm er at Bally's Casino. 

FT Surveys: Turkish Finance and 
Industry, and UK Consumer Credit 3nd 
Asset Finance. 

Holidays: Japan t Culture Day). 


4 


FRIDAY 


South African delegation 

South African foreign minister Alfred 
Nzo visits France. He will attend the 
Fran co- African summit in Biarritz as 
part of a delegation led by deputy presi- 
dent Thabo Mbeki. 

Light fantastic: Deepavali, or Diwali, 
the Hindu festival of light, is celebrated 
by the Hindu community worldwide. 
The highlight of the event is the light- 
ing of thousands of lamps in homes to 
welcome the goddesses of wealth and 
learning. 

India has more reason to celebrate. 
The World Health Organisation gave it 
a clean bill of health last week after the 
recent outbreak of plague. Overseas vis- 
itors are expected to arrive in their 
thousands after more than 12 airlines 
which banned flights to the country 
during the scare resume operations. 

Non-farm payrolls: Bond markets 
will be trading nervously ahead of the 
US non-farm payrolls for October, out 
today. The pace of payrolls' growth has 
slowed to a monthly average of 260.000 
new jobs in the third quarter, compared 
with 340.000 in the second. 

Canada's House of Commons breaks 
until November 14. 

Saleroom: Christie's in London is 
holding a sale of Victorian works, 
including Sir Edwin Landseer’s “The 
Deer Pass", which is expected to realise 
up to £300,000, and William Holman 
Hunt's “Bride of Bethlehem", expected 
to fetch up to £400.000. 


5-6 


WEEKEND 


Canada team in China 

Jean Chretien. Canada's prime 
minister, leads a delegation of nearly 
400 business leaders, politicians and 
officials to Beijing on Sunday. Cana- 
dian exports to China, totalling CSl.Tbn 
(£770m) in 1993. have stagnated in 
recent years. But imports have risen 
rapidly, reaching CE3.1bn last 
year. 

Old masters: More than 450 cars will 
take part in the 9Sth London to 
Brighton Veteran Car Rally on Satur- 
day. Only about 30Q are expected to fin- 
ish: with a top speed of Smph. it is 
feared some vehicles will be unable to 
beat the 4pm deadline. 

Business leaders meet: The 

Confederation of British Industry 
annual conference begins on Sunday in 
Birmingham. 

Motor racing: The Japanese Grand 
Prix takes place on Sunday at Suzuka. 

Visiting Down Under: Qiao Shi. 
chairman of China's National People's 
Congress, visits Sydney on Sunday. 

Ask the people: Albania holds a 
referendum on a new constitution on 
Sunday. 

Aslan politics: Tajiksbui holds 
presidential elections and a referendum 
on a new constitution. 


Compi'fod by Carol Major 
and Shelley Wood. 

Fax: (+44) (0)171 S73 3194. 



Other economic news 

Monday: After the pick up in 
the UK money supply last 
month, the provisional M0 fig- 
ures for October are expected 
to show an expansion of 0.4 per 
cent rise for the month, with a 
7.2 per cent annual rise. 

With last week's Confedera- 
tion of British Industry manu- 
facturing survey showing 
strong exports and a rise in 
price expectations, the markets 
will also be watching the Char- 
tered Institute of Purchasing 
Managers' October index for 
developments with a particular 
focus on new orders, which fell 
for the third consecutive 
month in September. 

Tuesday: in the US. the 
National Association of Pur- 
chasing Managers' index is 
expected to be 59.7 per cent in 
October, slightly up from Sep- 
tembers index of S&2 per cent 
Such a figure usually indicates 
siren? economic growth. 

Wednesday: Given the 
strong performance of the dol- 
lar in October, the UK’s official 
reserves arc* expected to 
increase by Elom hi October. 

Thursday: Morgan Grenfell 
says the National Association 
of Home Builders' survey sug- 
gests weaker conditions for 
sales ur September, ft expects 
new ht-mo sales to drop by 4 
per cent. 


Statistics to be released this week 


oat 

Released Country 


Economic 

Statistic 


KMtai 

Fore c ast 


Prev iou s 

Actual 


Day 

Released Country 


e co nom ic 

Statistic 


MecSan 

Forecast 


Previous 

Actual 


ACROSS 

1 Australian state starts paying 
Scottish smoker for fruit <8.4 1 

10 The best work? It's sent back 
to mother! iti 

11 Grass to spare, free »7i 

12 For a tenner listened to a 
singer i5' 

13 Things round in oars of 
swans, navv officer admitted 
i&l 

15 Use raw scrambled egg as 
fruit 1 10* 

16 Man returns to cut first 
record (4) 

IS In court like actors (4) 

20 Dressing after escapade cause 
trouble <5.51 

22 Opening article in recent 
broadcast iSi 

24 Expect plant disease after the 
end of August i5i 

26 Dawn wants a heat and light 
unit by spnnc (7) 

27 Upstart found normal meet- 
Ing-pkwo pointless (7) 

25 Pick exceptionally attractive 
person to get biscuit. <5,71 


Mon 

Japan 

SEP housing starts” 

1.1% 


1.8% 



us 

Oct domestic light truck sales 

- 

5.6m 

Oct 31 

Japan 

Sep construction starts” 

- 



-0.9% 


Canada 

Oct foreign reserves - change CS 

200m 

940m 


UK 

Oct MO* 

0.4% 


1.1% 



Canada 

Oct help wanted index 

98 

97 


UK 

Oct M0- 

7.2% 


72% 



Canada 

Sep building permits' 

1% 

2% 


US 

Sep personal Income 



0.4% 



AustiaSa 

Sep retail trade 

-1.9% 

2.1% 


Japan 

Sep construction ortfere” 

- 


S-2% 


Fri 

Japan 

Sep Sank of Japan corp.serv.pnce’ - 

-0.2% 


US 

Sep personal consumer expenditure- 


0.9% 


Nov 4 

Japan 

Sep Bk of Japan corp.sarv. price” 

- 

-0.6% 


US 

Oct Chicago NAPM 

- 


63.5% 


US 

Oct non-farm payrolls 

- 

239k 


US 

Oct agriculture pnees 

- 


-2.2% 


US 

Oct manutactumg payrolls 

- 

-3k 


Canada 

Aug real GDP • (actor cost* 

0.4% 

-0.1% 


US 

Oct hourly earnings 

- 

0.3k 

Tues 

US 

Oct NAPM 

- 


5&2% 


US 

Oct average work week 

- 

34.6% 

Nov 1 

US 

Sep construction spending 

- 


-02% 


US 

Oct unemployment rate 

- 

5.9% 


Japan 

Oct auto sales” 

- 


6.4% 



US 

Sep home completions 

- 

1.32m 


Japan 

Oct foreign exchange reserves* 

- 


1.5% 



UK 

Sep housing starts 

- 

2.0% 


US 

Johnson Rad book - W/e 29/ 

- 


-0.1% 


Canada 

Oct employment rata 

03% 

0.5% 

Wed 

France 

Sep unemployment rate 

12.6%. 

12.6% 


Canada 

Oct unemployment rate 

10.1% 

10.1% 

Nov 2 

UK 

Sep official reserves (Sm) 

15m 

16 m 








US 

Sep leading indicators 

- 


0.6% 


During the week... 





US 

Sep factory orders 

- 


4.4% 



Japan 

Oct trade balance, first 20 days 

- 

S6bn 


France 

Sep Jobseekers 

0.2% 

3.3m 



Germany 

Sep industrial production 

1.8% 

-3.0% 


US 

Sep factory inventories 

- 


0.1% 



Germany 

Sep manufaciurtag output 

2.0% 

-3.5% 


NZ 

Ql current account (NZSm) 

- 


-260 



Germany 

Sep manufacturing orders 

i.a% 

-22% 

Thurs 

UK 

Sep final money data 

- 


n/a 



Italy 

Aug trade balance payments 

- 

2.9t 

Nov 3 

US 

Sep new home sales 

- 


703K 



Belgium 

Oct unemployment rate 

- 

14.6% 


US 

Oct domestic auto sales 

“ 


7.2m 


■month on month, “year on year Statistics, courtesy MMS International. 














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in Enelisti excessive? (7» yiMM _ 

4 


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1 

MONDAY PRIZE CROSSWORD 

Mrt O U., /■'DTrnxi 


3 West Country banker died 
taking In wood (8) 

4 it's odd. parking behind hi 

5 Name remote settlement's 
wind-gauge tiO) 

6 Nothing stands up in it. 
which is a bloomer (5) 

7 Italian physicist, in love with 
crowd, turned up (7) 

8 First cooked geese to teach 
members about dairy produce 
i7.6* 

9 Mount cuts then replaces 
conker i5.8t 

14 Cry out. embracing a boy 
that's dressing! (5.5) 

17 Secret key given to drunkard 
by Central American iSi 

19 Day on which Cain runs like 
the devil f7) 

21 You say Luke upset the 
French playing this? i?) 

23 Capoue and Eisenhower are 
similar tS) 

25 Rebukes for lifting box (4) 



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solution opened and five runner-up prizes of £35 Pelikan vouchers will be 
awarded. Solutions by Thursday November 10, marked Monday Crossword 
th * envelope, to the Financial Times, 1 Southwark Bridge. London 
SE1 9HL. Solution on Monday November 14. 

Name 


Address — „ ...... 


Winners 0,586 

Alison C. Hughes, Mitcham. 
Surrey 

Andy Polakowski. Mold. Clwyd 
Robert Fabri Malta 
B.S. Dutton. Chelmsford 
Michael Scott, South Carolina 
Peter Proudlove. London, SEI2 


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