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FINANCIAL TIMES 


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Europe's Business Newsoaosr 


Toyota signals 
plan to build 
vehicles in China 

TOyota yesterday announced it would set up a 



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FRIDAY SEPTEMBER 2 1994 


Brussels may delay EU media ownership rules 


tiie strongest hint yet that Japan’s biggest car- 
mafcer is interested in malting vehicles in China. 
Toyota president Tatsuro Toyoda will discuss the 
plan for the centre with government officials and 
local vehicle makers during his current visit to 
China. Page 16 

BM speculation over NBC television network 
continued in New York. A top NBC executive 
stopped short of denying reports that General .Elec- 
tric, NBC's parent, was considering a sale to Time 
Warner. Page 19 

OS-Cuba talks ‘serious’: The US and Cuba held 
- “serious, professional and businesslike” tanre about 
E , how to halt the uncontrolled exodus of Cuban boat 
people, the US state department said. Page 3 

brawl widens finks: Israel and Morocco 
annou n ced they would establish diplomatic ttntrc by 
. • opening liaison offices in each other’s countries. 

Morocco also annmmnwi it would open a liaiso n 
bureau in the Palestinian self-rule enclave of Gaza. 
Page 4 

GadaffPs salute marks 25 yuan In pawnor 

Libyan leader M nammar 
Gadaffi (left) waved to 
the Tripoli crowds as 
tanks rolled passed to 
mark 25 year since he 
overthrew King 
M ohamm ed Idris in a 
coup and seized power. 
The show of military 
might conns at a time 
when Libya is subject to 
UN sanctions imposed 
for its refusal to hand 
over two men suspected of involvement in the 1988 
bombing of an airliner over Lockerbie, Scotland. 

Russia bora down advertising law: Russia’s 
government approved a draft law designed to curb 
saturation TV advertising like that used by failed 
financial company MMM, which swamped Russian 
screens with lip tofive coaunercials an hour. Page 2 

Scott report delayed: Lord Justice Richard 
Scott’s final report into Britain's “annsJor-fraq" 
inquiry will not be issued until next year and the 
judge is to question more witnesses from the intelli- 
gence services, his office said. 

Itoo <U« In UK fighter, crash: Ihe two crew of 
a Royal Air Force Tornado fights died when then- 
aircraft crashed near Inveraray in central Scotland. 
J| Their bodies were found in wreckage. 

P Brofcar takes nan* name: Hoare Govett, the 
London stockbroking firm acquired two years ago 
by EKitch bank ABN-Amro, is to take the name 
r ABN-Amro Hoare Govett Page 17 

BASF, German chemicals group, is trying to boost 
; its Knoll pharmaceuticals division by diversifying 

! into nan-patented generic drugs in the German 
market via a new distribution and marketing com- 
pany, BASF Generics. Page 17 

Elf Interims down: French oil group Elf 
Aquitaine blamed lower crude prices for a 10 per 
cent drop to FFri J2bn ($222m) in its first-half net 
profits. Page 17; Evolutionary, not revolutionary, 
approach at Elf, Page 20 

Asbestos cftnhns hit TAN: The former Turner & 
Newall - once Britain’s biggest asbestos supplier - 
had to make record compe ns a tion personal injury 
payments of £22Jm ($34.25®) in the first halt But 
pre-tax profits at the engineering and motor compo- 
nents group rose from £39.4m to £6lm. Page 23 

Reddtt ft Cobnan shares fell 25p to 627p when 
the household products and toiletries group 
reported interim taxable profits weaker than expec- 
ted at 2123.3m (5191m) Page 17; Lex, Page 16 

Deportee’s death probed: An investigation 
was launched in Germany into the death of a Niger- 
ian who died at Frankfurt 3irport. The man bad 
been tied up and sedated by German officials who 
were trying to deport him. 

Quake racks California: At least one strong 
earthquake rocked an area centred off the north 
coast of California. The quake, measuring B£ on the 
: Richter scale, caused no damage but was felt as far 

V south as Fresno in central California. 

British team not wtthdrawns The British 
Athletic Federation said it would not withdraw its 
women’s team from next week’s world cup because 
such a move would prejudge runner Diane Modahl s 
hearing after her positive drugs test The Interna- 
tional Amateur Athletic Federation could overturn 
the BAF decision. 


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By Lionel Barber In Brussels 

The European Commission is 
considering delaying proposals to har- 
monise rules on media ownership in the 
EU, amid concern about a backlash 
amo ng member states worried about 
intrusive Brussels regulation. 

A decision to delay would be a setback 
for Mr Vann! d’Archirafi, the Italian 
internal market commissioner, who 
would like to introduce a new EU direc- 
tive at the end of this year or early 1995. 
But majority sentiment amo ng his Com- 
mission colleagues seems in favour of a 
“softly softly” approach. 

Under a compromise solution that 


emerged in late July at a meeting of 
chiefs of staff of the 17 commissioners, 
the Commission will be asked this 
month to consider supporting an “initia- 
tive'’ an media ownership. 

“We think we need to do something, 
but we don't want to prejudge the ques- 
tion of legislation,” said one official. 
“This is -a very Important, very touchy 
subject" 

Mr d’Archirafi argues that investment 
in Europe's single market Is being held 
back by the patchwork of media owner- 
ship rules. He believes that an “initia- 
tive” - however it is dressed up - must 
lead to an EU directive if it is to be 
effective. 


The Italian commissioner hag aisn 
argued, with some success, that the EU 
must position itself quickly to exploit 
advances in broadcasting technology 
which are paving the way for pay televi- 
sion, video on demand, and the prolifera- 
tion of specialised TV channels. Ger- 
many's Martin gangnimami tho industry 
commissioner supports this view. 

But Sir Leon Britten, chief ED trade 
negotiator, has raised questions about 
the need for EU-wide legislation, fearing 
it could infringe the principle of subsid- 
iarity - devolving decision - making to 
the lowest appropriate national or 
regional level 

Mr Karel Van Miert, the Belgian com- 


petition policy commissioner, is worried 
that an EU directive lifting restrictions 
on media ownership could threaten the 
independence of Belgian media - a 
delicate balance between Flemish and 
Franco-phone interests traditionally 
wary of French predators across the 
border. 

The problems created by differences to 
EU media ownership surfaced during a 
consultation exercise which the Com- 
mission conducted last year among 70 
companies and industry organisations. 

Many came out in favour of Brussels- 
led reform, with some expressing con- 
cern that outdated rules on cross-media 
ownership could deny them the opportu- 


nity to exploit future electronic media. 

For example, in the Netherlands, 
newspaper publishers with a market 
share of more than 25 per cent cannot 
own a television c hanne l, but in Italy 
the threshold is 16 per cent. In the UK, a 
blanket ban exists on newspapers own- 
ing more than 20 per cent of terrestrial 
channels, but there is no limit on owner- 
ship of satellite channels. 

Brussels officials said yesterday the 
Commission faces a tricky balancing act 
as it ponders how to proceed. On the one 
hand, it needs to maximise the potential 
of the single market, but on the 

Continued on Page 16 



Goodbye to Berlin: General Matvei Burlakov carries away a Russian flag yesterday as he is about to leave 
the military airport at Sperenburg, 160 miles sooth of the city. Gen Burlakov was the commander of the 
western group of the Russian army based in farmer East Germany. Yesterday was the day on which the 
last Russian troops left Germany Picture AsHctted FVooo 


US and 
N Korea 
to meet in 
Pyongyang 

By John Burton in Seoul 

US and North Korean officials 
will meet in Pyongyang next 
week to discuss the opening of 
liaison offices in the two coun- 
tries. Such a move would be a 
significant step towards estab- 
lishing diplomatic relations. 

Simultaneously, the two sides 
wifi meet in Berlin to discuss a 
US offer of fight-water reactors, 
the supply of interim energy 
sources to North Korea while 
these reactors are being con- 
structed, and the disposal of 
North Korea's spent fuel rods, 
which are capable of producing 
enough plutonium for five 
nuclear bombs. 

The meetings, which will begin 
on September 10, are the result of 
last month’s US-North Korean 
framework agreement. Under the 
accord, Pyongyang promised to 
accept full international nuclear 
inspections in return for 
improved ties with Washington 
and the supply of safe reactors to 
replace Its dangerous graphite 
ones. 

The talks confirm North 
Korea's willingness to abide by 
the agreement, while they also 
offer evidence that the succession 
of power In Pyongyang by Mr 
Kim Jong-il is proceeding 
smoothly after the death of his 
father, President Kim fi-sung, is 
July. 

Officials in Seoul said it was 
unlikely that the US negotiators 
would have been allowed to go to 
Pyongyang if a serious power 
struggle was under way in North 
Korea, as has been rumoured in 
recent days. 

Continued on Page 16 


Rowland survives 
battle over Lonrho 
joint chief post 


By Rotand Rudd and 
Robert Peston hi London 

Mr Tiny Rowland won a 
last-minute victory yesterday 
over Mr Dieter Bock, his fellow 
chief executive, who had planned 
to strip him of his executive 
duties. 

The German financier, with 
1&8 per cent of the shares, had 
been confident that the group’s 
14 directors would remove the 76- 
year-old Mr Rowland as joint 
chief executive after the disclo- 
sure that he was costing Lonrho 
£55m a year In salary, expenses 
and other charges under his con- 
trol 

But Lonrho's three non-execu- 
tive directors were instrumental 
yesterday in preventing attempts 
to remove Mr Rowland as joint 
chief executive. One explained 
that they feared such an attempt 
could turn into a “damaging con- 
frontation”. 

Instead of questioning whether 
Mr Rowland should continue in 
his post, the board issued a state- 
ment saying that speculation 
regarding his role in the com- 
pany “was totally unfounded”. 

However,' it also made clear 
that the remuneration commit- 
tee, set up by Mr Bock and 
chaired by Mr Peter Harper, 
would review expense levels at 
head office^ The statement also 
said the review of all directors’ 
contracts, remuneration and 
expenses was part of an “ongoing 
process of change within the 
group". 

Mr Rowland knew he had won 
an important victory before the 
start of the meeting when he told 
waiting journalists: “1 am too 
young to retire." 


Mr Bock’s supporters were put- 
ting a brave face on events, mak- 
ing clear that the public disclo- 
sure of Mr Rowland's expenses 
bad made it harder for him to 
remain in his post in the medium 
term. 

Some directors also remain 
concerned that the company sold 
a recently completed film about 
the Lockerbie bombing to an 
Egyptian company linked to 
Libya, in possible contravention 
of United Nations sanctions. 

But one Lonrho employee ques- 
tioned Mr Bock's timing in trying 
to remove his joint chief execu- 
tive. 

Mr Rowland’s two most promi- 
nent allies on the board retire in 
the autumn: Mr Ren& LeclezLo, 
the chairman, goes at the end of 
October and Mr Robert Dunlop 
retires at the end of the month. 

Mr Bock might have been in a 
stronger position had he waited. 
But he is said to believe that his 
timing was dictated by the 
Lockerbie film disclosure. 

With the disagreement between 
the two chief executives out in 
the open, some analysts warned 
that a question mark over the 
group’s strategy would remain 
unto it became clear who had 
won the power bottle. 

Mr Bock may now have to wait 
until the end of next year, when 
he can exercise a call option on 
Mr Rowland’s remaining 65 per 
cent stake. 

He has made no secret of his 
desire to remove Mr Rowland, 
who he believes has been frustre- , 
ting his attempts to reorganise 
Lonrho’s assets. 

Editorial Comment, Page 15 
A 'civilised option'. Page 18 


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a THP ^NANa lT ^ES LIMITBD 1994 No 32.461 Week 35 <-OH DO n 


PARIS • FRANKFURT • NEW YORK - TOKYO 


Debate over IRA intentions continues 

UK edges closer to 
face-to-face talks 
with Sinn Fein 


By David Owen in London, Tkn 
Coone in DuUfn and George 
Graham In Washington 

The prospect of face-to-face 
meeting by the end of the year 
between Sinn F6in and the Brit- 
ish government moved closer 
yesterday, as Northern Ireland 
passed the first day of the IRA 
ceasefire with a mixture of 
wariness and jubilation. 

As the debate continued over 
whether the IRA had declared a 
permanent end to its armed cam- 
paign, Downing Street acknowl- 
edged that amplifications during 
the day by republican leaders 
showed they were “moving in 
our direction”. 

But it emphasised that the 
three-month countdown to talks 
with the IRA’s political wing 
would not begin until the organi- 
sation’s intentions were “utterly 
clear”. 

Suspicions of a secret deal 
between London and the IRA 
were again aroused by the trans- 
fer of four Republican prisoners 
from the mainland to jails in 
Ulster. 

Downing Street said that the 
transfer - involving two of the 
men sentenced for involvement 
in the Brighton bombing in 1984 
- had “absolutely no connection” 


with the peace process and was a 
routine operation arranged more 
than a month ago. 

But the move was at once 
attacked by Lord Tebbit, the for- 
mer Conservative cabinet minis- 
ter, who was badly injured in the 
blast He said it was either “an 
early reward fa* the IRA or crass 
political incompetence”. 

Mr John Major, the prime min- 
ister, was said to be “livid” that 
transfer was authorised by 
Prison Service officials without 
reference to ministers. 

In Dublin, Mr Albert Reynolds, 
the Irish prime minister, who 
does not share Downing Street's 
cantion, used a state-of-the- 
nation speech to urge all parties 
to show Imag ination and flexibil- 
ity. saying nobody should dimin- 
ish the potential of the ceasefire 
“by frying to interpret it as any- 
thing other than what it is”. 

Mr Dick Spring, the Irish for- 
eign minister, who plans to meet 
President Bill Clinton in Massa- 
chusetts today, said he hoped any 
differences of interpretation 
between London and Dublin 
would be resolved “in a matter of 
days.” 

In Washington, little tangible 
progress was evident in putting 
flesh an the US promise of sup- 
port to the peace process. 


In the past President Bill Clin- 
ton has expressed interest in a 
visit to Ireland. But no plans are 
presently being made. 

As republican leaders 
responded to London's demands 
for ffie IRA to declare openly a 
permanent end to its armed cam- 
paign, Mr Martin McGuinaess, a 
member of Sinn FSin’s governing 
executive, said the organisation 
was committed to “a complete 
cessation of military operations 
under all circumstances”. 

But he said misgivings about 
the IRA’s amission of tire word 
“permanent” were “rather silly” 
and amounted to “a bit of a 
storm in a teacup”. He expressed 
confidence that the matter would 
be resolved “within days”. 

“As far as I am concerned, Sinn 
F6in will be involved in discus- 
sions with the Dublin govern- 
ment and the British government 
in a short period at time.” 

His comments followed the 
publication of an article by Mr 
Gerry Adams in the Irish Times 
in which Mr Adams said: “Albert 
Reynolds, Dick Spring, John 
Hume and others have responded 
positively and correctly to the 
IRA announcement” 

Business hopes for 30,000 jobs. 
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FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


NEWS: EUROPE 


Militant I Italy, Britain and Spain would be excluded from centre of Community 


Serbs 
want arms 
ban lifted 


CDU proposes an EU top five 


By Quentin Peel in London and 

Michad LMmann In Bonn 


By Laura SBser in Belgrade 
and Bruce Clark hi London 


US threats to lift the arms 
embargo against Bosnia’s Mos- 
lem-led government have pro- 
duced an unexpected reaction: 
the most militant Serbs say 
they would welcome the move, 
while some prominent Mos- 
lems view the prospect with 
alarm. 

This paradoxical response 
reflects the hardline Serbs' 
confidence that they could 
make further gains in the 
event of an all-out war, and 
Moslem fears that their side, 
albeit growing in strength, is 
not ready for an escalating 
conflict 

President Bill Clinton has 
told Congress, where the ban 
on arms sales to Bosnia is 
unpopular, that he will for- 
mally propose lifting the 
embargo unless the Bosnian 
Serbs accept the current peace 
plan by October 15. 

Militant Bosnian Serbs, who 
have resisted pressure from 
their kinsmen In Belgrade to 
accept the plan, are confident 1 
the US move would force all . 
Serbs to bury their Internal 
divisions and prosecute the 
war with renewed intensity. 

President Alqa Izetbegovic, 
Bosnia’s Moslem leader, 
acknowledged this week that 
his side had not yet matched 
its enemies' fi rep o wer. 

His remarks reflect growing 
concern in Sarajevo that, if the 
embargo is lifted, Bosnian 
Serb forces would quickly 
move to crush the government 
army before it could get heavy 
weapons and learn to use them 
effectively. 

The fighting ability of the 
Bosnian army has improved 
since the creation of a Moslem- 
Croat federation six months 
ago, but troops are still organ- 
ised on a local basis and are 
ill-prepared to fight beyond 
their village or town. 

UN officers say that if the 
embargo is lifted, it could take 
at least a year for the Bosnian 
army to make proper use of 
what equipment ft received. 
Mr Radovan Karadzic, the Bos- 
nian Serb leader, claimed last 
week his adversaries lacked 
professional officers capable of 
handling heavy weapons. 

General Ratko Mladic, Bos- 
nian Serb commander, has 
shown little concern about the 
arms embargo. “Let them lift 
it,’’ he had told the indepen- 
dent daily Borba. Another Bos- 
nian Serb officer said: "If they 
lift the embargo, the UN would 
leave and we could fight a real 
war. We would finish them off 
quickly." 

One of the first casualties. In 
the event of an all-out war ami 
withdrawal by the UN ground 
forces, could be the UN-desig- 
nated “safe areas" for Mos- 
lems in eastern Bosnia. 

Bat some prominent figures 
on the Bosnian Moslem side 
unequivocally favour a lifting 
of the arms embargo. They 
Include Mr Haris Sllqjdzlc, 
prime minster of the Moslem- 
Croat federation. 


Italy, a founder member state 
of the European Union, as well 
as Britain and Spain, would be 
excluded from the five -nation 
“hard core” of a future flexible 
community, according to a top 
policy document published, yes- 
terday by Germany’s Christian 
Democrats (CDU). the leaders 
of the country's coalition 
guv eminent. 

Their vision of an EU of 
"variable geometry” would be 
centred on only five of the orig- 
inal founding mem- 
bers - France and Germany, as 
well as Belgium, Luxembourg 
and the Netherlands. 

However, the reformers say 
their plan "does not imply 
abandoning hopes that Great 
Britain will assume its role In 
the heart of Europe',” as Mr 
John Major, the British prime 
minister, said in Bonn three 
years ago. Rather, they hope 
that by forcing the pace of 
European integration, Britain 
will in turn be forced to “clar- 
ify its relationship” with the 
rest of the EU. 

The five-nation future core 
would he expected to co-ordi- 
nate ever more closely not only 
on monetary policy, in keeping 
with the plans for economic 
and monetary union, but algo 


The European Union should produce a white paper on defence to 
define “precisely” its security i n terest s and how to defend them 
in conjunction with Nato. the French prime minister, Mr 
Edouard Balladur, proposed yesterday, writes David Buchan in 
Paris. Expanding on the vision of a multi-speed Europe that he 
unveiled earlier this week, the pr ime ™ni«>w dear at a 
meeting with French ambassadors that such a defence white 
paper should be prepared by EU governments in contrast to the 
economic white paper drafted last year by Mr Jacques Defers’ 
European Commission. 

Mr Balladnr’s proposal seems to stem from disappo in tment 
that the defence white paper which Us government produced 
earlier this year, and which, committed France to maintaining 
military spending in the 1995-2000 period, has not evoked any 
matching comm i tments or ambitions from France’s EU partners. 

At the same meeting, Mr Alain Juppe, the foreign minister, 
called yesterday for big changes in EU institutions at the 
planned 1996 revision of the Maastricht treaty. "For France”, he 
said, “it s a question of a significant reform, not a simple 
re-plastering job." The gover nm ent’s foreign policy pronounce- 
ments are designed to signal France’s ambitions for its EU 
presidency in the first half of next year. However, they drew a 
sharp reaction from President Francois Mitterrand who tartly 
reminded the prime minister that the French constitution gives 
the president the first word in foreign and defence policy. 


monetary uniwi, others for a 
common foreign and security 
policy, and yet a third combi- 
nation for a co mm on social pol- 
icy, for example 

"For the formation of Euro- 
pean policy this Is a period of 
many crises but also of many 
chances,” Mr SchSuble said. 
"Variable geometry . . . gives us 
better to complete 

process, given the different, 
sometimes competing views. 
We must accept that not' every 
member can accept every step 
at the same time.” 

Along with the CDCPs sister 
party, the Bavaria-based Chris- 
tian Social Union (CSU), Mr 
SchAuble presented a compre- 
hensive five-point programme 
for the next phase of radical 
reform of the EU, intended to 
reconcile the conflicting 


on fiscal, budgetary, economic 
and social policy. 

The future structure of an 
expanding EU. to include not 
only the Scandinavian coun- 
tries, but also the emerg i ng 
democracies of central Europe, 
was spelt out yesterday by Mr 
Wolfgang Schfluble, the parlia- 
mentary leader of the Chris- 
tian Democrats, and the second 
most powerful man in Ger- 
many’s ruling party after 


Chancellor Helmut Xnhi 
For the first thrift, they have 
openly stated their view that 
Italy can no longer qualify to 
be a member of the inner core 
if the EU inevitably moves to 
multiple speeds, or variable 
geometry. The expressions 
mean that different groups of 
the member states win co-ordi- 
nate their policies in different 
ways, depending an the subject 
concerned: some will opt Ah' 


ti on with continuing enlarge- 
ment towards eastern Europe. 

This for?inriftQ the overhaul of 
all the ™afo EU institutions, 
granting still more democratic 
control to the European parlia- 
ment, while limiting the 
authority of the Council of 
Ministers, in which the govern- 
ments of the member states are 
represented. Apart from the 
reinforcement of the "hard 
core”, it also involves ever 
closer co-ordination between 
France Germany, “raising 


Late payments raise unrest fear 

Moscow warns 


on wages crisis 


Russia clamps down 
on TV advertising 


By John Lloyd in Moscow 


By John Thomhffl in Moscow 


Mr Oleg Soskovets, Russia’s 
first deputy prime minister, 
lias warned that the country’s 
escalating late payments crisis 
could spark social unrest with 
severe political repercussions. 

According to Russian press 
reports, Mr Soskovets told a 
meeting of economic ministers, 
bankers and industrialists on 
Wednesday that the failure of 
many energy companies to pay 
their workers for months could 
prompt mass action by coal 
miners and ofl. and gas work- 
ers. An Economics Ministry 
report estimated that late pay- 
ments of wages in industry and 
agriculture had risen from 
RbsSOObn at the beginning of 
the year to Rbs4,000bn by 
August l, with the energy sec- 
tor being badly bit 

The Russian government is 
grappling with ways of resolv- 
ing the internal debts crisis 
but appears torn between 
whether to stick to a strict 
monetary path or try indirectly 
to inflate its way out of its 
difficulties by issuing fresh 
credits. Many Russian compa- 
nies claim that the accumula- 
tion of inter-enterprise debt 
- now estimated at $45bn 
(£29bn) - has created a cash 
flow crisis making It impossi- 
ble for them to pay their work- 
ers. They are demanding cash 
Injections from the govern- 


ment to ease the liquidity prob- 
lem. 

The government commission 
for dealing with late payments, 
chaired by Mr Sedrevets, has 
proposed an alternative pack- 
age of measures including: 

■ Forcing companies to settle 
their rouble debts out of their 
hard currency accounts. Many 
companies have hidden away 
funds in foreign bank accounts 
to avoid paying taxes and to 
hedge against inflation . *■ - 

■ Insisting that enterprises 
could not pay dividends until 
their outstanding debts have 
been settled - a proposal which 
has prompted outrage among 
industrial managers. 

■ Greater investigating pow- 
ers to assess the true financial 
state of troubled companies. - 

■ Encouraging the use of 
promissory notes as a nan-in- 
flationary means of settling 
debts. 

Mr Anatoli Chubais, privati- 
sation minister, has also 
suggested formal bankruptcy 
procedures could be used more 
aggressively to concentrate the 
minds of the managers of 200 
companies which account for 
the bulk of the inter-enterprise 
debt. Mr Chubais cited the 
PTflmp lp of the Rristal enter- 
prise, manufacturer of Stoli- 
chnaya vodka, which had sud- 
denly “found” Rbs500m to 
repay a debt when it was 
threatened with bankruptcy. 


The Rossi an government 
yesterday a pproved a draft law 
on advertising designed to 
stop the blanket advertising 
which propelled th owowool* 
lapsed MMM 

pany into most Russian %£mtm 
through TV mlyniliMtogmgiiiim 


the satirical or comic use of 
art works and historical fig- 
ures. 

' Mr Victor Chernomyrdin, 
the. Russian prime minister, 
called the measure “timely” 
hum! said he-had-o pposed more 
Radical cut 

down by decree toe volume of. 


V^itSTSSTtba draJTEys'down 

advertise^nte-; j 


ruin. ■ 

The draft comes as 
ing executives say that JRbs-, 
sla’s TV advertising mqr fa ty 
becoming rapidly , more Miphu^ 
tfcated and profitable^ and Is 
steadily acquiring the range of 
products which provide the 
staple of western TV ads. 

The draft, stfll to be passed 
by the state dmna flower 
house of the parliament, bans 
all advertising from unli- 
censed companies -as mm 
was - and prohibits any com- 
pany from advertising more 
than twice in one hour on TV 
or radio. MMM swamped TV 
p r ogra m mes with as many as 
five commercials in an hour. 

The draft legislation also 
lays down that all advertise- 
ments be “trustworthy and 
conscientious”; bans sublimi- 
nal advertising and all adver- 
tising for alcohol and ciga- 
rettes; and calls for the need to 
protect the young. It also 
decrees that commercials “do 
not discredit works of art rep- 
resenting national or univer- 
sal values". This is to prevent 


-be ‘trustworthy and 
^nsderffiis^ans 
subliminal ads; and 
thosei discrediting 
works of art which 
represent ‘national 
or universal values’ 


advertising in newspapers and 
to die broadcast media, M MM 
was far and away the largest 
advertiser on TV, spending an 
some estimates up to $X0Om 
(£645m) annually on pushing 
its shares through commer- 
cials using the Golubkov fam- 
ily of working class 
Muscovites. 

Mr Bruce MacDonald, head 
of the BBDO agency in 
Moscow, said yesterday that 
“no other advertiser came 
dose". 

However, a number of west- 
ern consumer goods compa- 
nies are now spending heavily 
on TV commercials as they 


seek to buy their places onto 
the increasingly choosy Rus- 
sian market Mars, the confec- 
tionery company which has 
established a manufacturing 
plant in Russia, is thought to 
be spending around 520m on 
an annualised basis - while 
western cigarette and comet- 
ics companies are spending 
between 92m and $6m each a 
year an their products. 

The largest Russian adver- 
tisers are financial services 
companies and banks. Many of 
these are either establishing 
their namaa through rather 
grandiose displays linking 
their enterprises to Russian 
historical figures or events, or 
pushing shares. 

Alcohol and tobacco adver- 
tising on TV accounts for some 
5-8 per cent of toe total, 
according to Mr MacDonald. 
Foreign brands of alcohol have 
proved particularly popular an 
the Russian market, with even 
the vodka sector now showing 
a one-third penetration fay 
overseas brands. 

However, whole sectors of 
consumer advertising such as 
cars, certain kinds of foods 
and some kinds of financial 
services such as mortgages are 
wholly or largely absent from 
the screen. Mr MacDonald said 
that “it would he better if the 
industry could develop its own 
code of conduct and police 
Itself, as In other conn- 
tries - but frankly it’s not yet 
in a position to do so”. 


Lesson for man who hopes to tame Eta 

The Spanish justice minister’s anti-terrorist policy appears to have backfired, writes Tom Burns 


_ While the IRA 

1 ceasefire 

iJmSH nudges the 
British and 
ssss^s^aaJ Irish govern- 
toBO PEAW meats towards 
PROFBJs framing a 
peace settlement for Northern 
Ireland, politicians In Spain are 
at odds over how to deal with 
Eta, the Basque separatist 
organisation which to date has 
given no sign rtf ending a cam- 
paign of violence that, like 
Ulster’s, stretches back 25 
years. 


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The row centres on a dis- 
creet partial parole policy far 
selected members of the 525- 
strong jail population of Eta 
members - a terrorist prison 
count that bears comparison 
with that of Northern Ireland. 
This policy is sponsored by Mr 
Juan Alberto Belloch who in 
May added the responsibilities 

of the Interior Ministry to his 
existing job of justice minister. 

An independently-minded 
magistrate before he joined the 
socialist government last year 
and now considered one of the 
most influential members of 
Mr Felipe Gonzalez’s cabinet, 
Mr Belloch has discovered that 
dealing with Eta as a minister 
is a lot more complicated than 
passing sentences on the 
group’s gunmen in a court- 
room. 

His partial parole policy, 
which has been fiercely 
rejected by the conservative 
Partido Popular opposition and 
has had no immediate impact 
on Eta’s commitment to vio- 
lence, threatens to derail both 
his own reputation as a minis- 
ter and the Spanish parlia- 
ment’s long-standing bi-parti- 
san approach to terrorism. 

Mr Belloch seeks with his 
initiative to hasten the mad of 
Eta by denting the separatist 
organisation's “patriots behind 
bars" propaganda. 

Critics contend that the pol- 
icy risks allowing Eta to raise 
its operational ability by 
regrouping released gunmen 
and by attracting new recruits 
on the grounds that the gov- 
ernment is “soft” on terrorism. 

Known as the BunMstrio 
because of his dual wifoiatwHifl 





Criticised: Spanish justice minister Juan Alberto Belloch 


Herri Batasuna, the radical 
Basque nationalist coalition 
that supports Eta’s separatist 
gunmen and has close ifukw 
with Ireland’s Sinn Fean, yes- 
today called on the Spanish 
government to imitate the 
example of the British cabinet 
by recognising the political 
nature of violence in the 
Basque country, writes Tom 
Burns. “The logic of the [John] 
Major government is in direct 
co nt rast to the closed and hos- 
tile position of toe Spanish 
government which, in the 
words of [Interior and justice 
minister Juan Alberto] Bel- 
loch, has only yesterday 
rejected all avenues towards 
an understanding and called, 

once more, for repression,” the 
Basque coalition said in a 
statement. The Basques 
described the developments in 
Ireland as “common sense”. 


responsibilities. Mr Belloch 
had a second successive day of 
talks yesterday with opposition 
parties in preparation for a for- 
mal all-party of meeting this 
month which will attempt to 
re-establish a consensus on 
counter-terrorism policy, 

Mr Belloch freed hostile 
questioning in parliament a 
month ago when he admitted 
that 14 Eta members, who were 
not named but are understood 
to be serving long sentences on 
murder counts, had received 
partial paroles which allow 
than oat of prison during day- 
time and at weekends. 

The controversy over the dis- 
closure of the policy coincided 
with an Eta bomb attack In 


Madrid that killed one of 
Spain's key army officers. Gen- 
eral Francisco VegufOas who 
as director-general of defence 
policy had played a key role in 
the modernisation of Spain's 
armed forces. 

Mr Belloch was accused in 
parliament of failing to nonsuit. 

the opposition over his initia- 
tive and of breaking a formal 
understanding that any partial 
freedoms for jailed Eta mem- 
bers would only follow a sus- 
tained ceasefire by the separat- 
ist organisation. “The 
(bi-partisan) agreement was 
that while Eta continued to 
kill, Etomts would go to 
prison, not leave it," said the 
conservative opposition 


spokesman, Mir Federico Triflo. 

The row over the prison policy 

continued during August as 
youths sympathetic to Eta 
clashed with security forces 
during the Basque region’s 
summer fiestas. Earlier this 
week, on the peak day for 
returning holidaymakers. Eta 
showed its musde again when 
it took a leaf from toe IRA's 
violence manual and bombed 
railway tracks Unking the 
cities of Pamplona and 
Zaragoza. 

As one of the chief legal offi- 
cers in Bilbao, the main dty in 
toe Basque region before he 
fawraimft a minister, Mr ftriinrih 

balanced stiff sentences for Eta 

gunmen with a dose watch cm 


the possible maltreatment of 
separatist suspects. He took a 
particularly strong line in sup- 
porting fellow magistrates 
investigating a celebrated case 
concerning police involvement 
in a shadowy anti -Eta death 
squad. 

To the minister's acute 
embarrassment, the initial 
details of his I^tr nwr alal par* 
tial parole initiative coincided 
with the extension of rimiTar 
partial freedom privileges to 
two former police officers who 
in 1991 received 105-year sen- 
tences for their part in the 
antl-Eta dftath squad. Mr Bel- 
loch knew both men well from 
his days as a magistrate in Bil- 
bao. 

The minister hotly denied 
that the former policemen had 
gained a partial parole in 
ffitchangf? for remaining sQezzt 
over the government's alleged 
involvement in the "dirty war" 
against the separatists. 

Mr Befloch argued that by 
extending an olive branch to 
members of Eta who had 
shown good conduct in jail he 
could drive a wedge between 
those who wanted to break 
with the violence and those 
who r e mained hard-core terror- 
ists. 

The storm created over Ms 
Initiative has now prompted 
Mr Befloch into hawkish lan- 
guage. “While I. am minister 
there will he no relationships, 
no negotiations, no dialogue, 
no taking of any temperatures 
and no contact of any krnd 
with the terrorists,” he said 
after meeting the conser vati ve 
party spokesman on security 
affaire. 


EUROPEAN NEWS DIGEST 


the quality of relations to a 
new teveT. 

"Germany and France form 
the core of the hard core,” the 
document, called Reflections 
on European Policy, says. 
“Their special relationship 
faces a stiff test because tt too 
is beginning to show signs of 
dj ff piwrrHatiftn of interests and 
perceptions, which might 
cause than to drift apart” 

It suggests that the two must 
overcome their of 

opinion on "fundamental 
issues of economic policy", 
htrinrttwg industrial policy am) 
competition, as well as, by 
implication, trade protection- 
ism. There must also be a 
debate on the long-term objec- 
tives of the common agricul- 
tural policy, and on basic fea- 
tures of the future financial 
system. The other key p oints 
in the plan are the reinforce- 
ment of the ED’S common for- 
eign and security policy, and 
its enlargement to fha east. 

On foreign and security pol- 
icy, it stresses the priority 
needs for a common policy on 
gtahmrfitg central and eastern 
Europe, development of rela- 
tions with Russia, and a com- 
mon policy towards the Medi- 
terranean region, including 
north Africa, ft also singles out 
development of “a strategic 
partnership” with Turkey. 


Schneider head 
shuns summons 


Ukraine warning on N-treaty 


I The chairman of the Ukrai- 

nian parliament’s foreign 
affair s c ommis sion si gnalle d 
yesterday that the former 
Sorted: republic might delay 
joining the Nuclear Non-Pro- 
liferation Treaty (NPT). Presi- 
dent Leonid Kuchma (left) 
has said he win present the i 
NPT, under which Ukraine \ 
would give up nuclear weap- 
ons permanently, to the com- 1 
m urns t-do minated assembly 
in October for approval. Presi- 
dent Kuchma is due to visit 
the US in November, and 
Washington, has put pressure 
on Kiev to join the pact But 
Mr Boris Ohnyk, chai rman of 
the inffaftntiai foreign affairs rommiarinn, said parliament 
would sign up for toe NPT “when we are ready”. “This won’t 
happen so quickly. This time we have to be careful One 
whAnfe not maim mmantii* statements about a non-nuclear 
wm when all around us are nnriftar states.” Many Ukrainian 
leaders, fori tidin g Mr Alexander Moroz, chairman of parlia- 
ment, have criticised the US for dragging its feet an a proan- 
ised f35Gm (£225.&n) in disarmament aid. Reuter, B3eo 


Closure at Tula arms plant 


Russia’s Tula arms factory stopped production yesterday for 
the first ttmft in its 300-year history when it was unable to pay 
its workers, the Itar-Tass news agency reported yesterday. 
Customers, including- the state, have not been paying the 
factory for orders and production at the plant, 175km. south- 
east of Moscow,- has fallen 97 pea cent in three years; Only 40 
per cent of the workers were paid, in June and the factory did 
not -pay, anyone in July or August Warkarshave been put on 
leave until October L The factory bad tried to stay afloat by 
increasing : its output of hunting weapons after It stopped 
malriTtg submachine guns, one of its last key military prod- 
ucts, in January. AP, Tula 


VAT savings elude Gerinans 


German com p anies and financial authorities have not bene- 
fited from the expected savings following the abortion of VAT 
after the creation of the European internal market in 1992, 
accordi ng to a government report. The new VAT law which 
applies durihg the present transition period has created “an 
almos t incomprehensible amount" at extra work, according to 
c ompanies and tax advisers. Government brochures, explain- 
ing the new regulations, were not available soon enough, the 
report said. Companies, especially smaller and medium-sized 
ones which were expected to benefit most from the single 
market, c omplai ned about the extra work resulting from new 
reporting requirements and more complicated searches for 
business partners’ VAT identification numbers. Financial and 
personn el savings had not been possible, the report added, and 
differing legal and tax systems in the 12 EU member countries 
m e an t that co mp uter software programmes needed to be con- 
stantly updated Michael Lindemann, Barm 


Cables to anchor Pisa tower 


Scientists plan to anchor the Leaning Tower of Fisa to 
steel cables buried deep underground to help stop It fiWfag 
farther. Mr Michele JraMhwikd, an engineer working with 
oth er ex perts to save the tower, said yesterday that work os 
the project would start next month. It would involve sinking 
10 steel cables up to 50m below ground a™) anchoring ttn»m to 
a reinforced concrete neck that would be buRt around the base 
of the 14th century tower, which leans about 5m off the 
perpe n dicular. - The scheme Is a temporary solution until a 
more per manen t way to stabilise the tower’s famous slant can 
be found. Reuter, Pisa 


Stalemate in fishing dispute 


The Norwegian and Icelandic foreign ministers faiigd at a 
meeting of Nordic states yesterday to make progress in a 
dispute concerning fishing rights around the Svrthard islaads. 
Mr Bjorn. Tore Grodal, Norway's foreign minister, and Mr Jon 
Baldvi n Ha imih aldsson, his Icelandic counterpart, agreed at 
the meeting to open a dialogue but came no nearer to a 
solution to the dispute. “We agreed to disagree," said Mr 
GrodaL Norway has sovereign rights over Svalbard and rirfnw 
the right to regulate fishing in the islands’ 200-mile economic I 
zone in the Barents Sea. This is disputed by frmfanrt Mtaru \ 
Barnes, Copenhagen . ! 


V)V** 


•lean' 111 ! 


Mr Didier Pineau-Valencienne, chairman of the French 
fryftHftKni group S chneid er, is to ignore a summons by Belgian 
authorities Involved in a fraud inquiry. A Belgian legal official 
aaid an investigating magistrate, Mr Jean-Claude Van Espen, 
had s umm oned Mr Pxneau-Valencltaine to Brussels for an 
interview tomorrow. On Wednesday Schneider said it had 
taken steps to get an annulment erf the legal proceedings taken 
against Mr Pineau-Valencienne in Belgium which led to a 
12-day. spell in prison in late May and early June. The com- 
pany few said its chairman is willing to co-operate with 
Belgian nffiriaia, but only tn France and under the supervision 
erf French, legal authorities. 

Mr Pineal Valendenne was arrested in May after he went 
voluntarily to Brussels to be interviewed by Mr Van Espen, 
who is Investigating alleged fraud in the affairs of Cofibel and 
Cofimines, Schneider's Belgian units. Schneider said its law- 
yers believed the magistrate violated the 1959 European Con- 
vention on judicial cooperation and Belgian rules of proce- 
dure in criminal investigations. Reuter, Paris 


" if 

# r a " 




ECONOMIC WATCH 


Germany’s output buoyant 


Jndtafirfeff production 
(annual %.changoJ 

.a • 


Wffftfut Honing ‘ ‘ - German industrial production 

• : in July rose SL2 per cent fhpn 

industrial pfbduc&n . June and 7.5 per cent against 

(annual %.cfcang4 _• the same month last year, 

s ' ■ 7 J -T * -r— y * ! . according to preliminary fig - 

» . •' urea released by the federal 
_ statistics office. The office 
: warned, however, the figure 
would be revised down by L3 
T percentage paints once final 
data lad been collected, but 
analysts said the final rate of 
0.9 p er cent would s HTi be 
strong. Final figures for June 
were revised upwards by OB 

— ; ■ — ■ ■ — h percentage point, taking the 

. . -199* . jof monthly rise to Lg per cent 
aodroKbieaatmsro • Figures for June and July - 

. , the two-month period dimin- 

ishes seasonal factors - show production, in manufacturing 
industry increased 5J1 per cent against the same period last 
Sjanj OveraU mdwtral production rose £2 per cent against 

the two^^ pertod a year ago, with the forest rises coming 

mmrcstmmt goods, up 7.9 per cent, and raw materials and 


'ter . . -1998 

SoabK-Owaiinro ■ ' 


■ N°r w g ^s_ unemployment rate in August fell to £6 per cent 
of the workforce compared with 5£ per cent in July, arrwTftnff 

r elease d yesterday by the Norwegian Labour Direc- 
torate. The number of jobless in August fell to 118,448 people 
from 124y347 in July, 

■ The D utch government said yesterday that wage increases 

negotiated as part of collective labour agreements would have 
risen a modest 0*8 per cent during the -32 months wnrifog 
December 1994. . ° 


Bermuda phi 
.tougher rule- 
iurancc nui 




*w;_v 


■IF 1 ': 


s ciC 


: * ,r ; - 






IF: 

- -4r"' £',v ■" 


%jo r " pre l»* 
f PHv a r ,ld r,i 

ISi Uif>| H 


S&". ; ■ 

•• 


iVs-. 




fefritrv. 


• T. 


•V 5 *-" 


VfV. i . " 



3 



FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


US N-waste 
clean-up 

under attack 


NEWS: THE AMERICAS 


US manufacturing output slows 


By James Hanfing 
bt Washington 

The US department of energy’s 
programme for cleaning up 
nuclear waste sites is 
extremely expensive and often 
ineffective, because of its fail- 
ure to adopt new technologies, 
according to a General 
Accounting Office report 
The Congressional auditor's 
review of use of innovative 
technology in nuclear waste 
operations notes that, although 
the department has received 
$23bn (£14.9bn) for environ- 
mental management since 
.1939, "little clean-up haw 
resulted". 

The result has been that, 
during the last five years, only 
about 10 per cent of the depart- 
ment's contaminated sites 
have been cleaned or closed, 
the GAO observed. During the 
past 40 years, more than ibn 
cubic feet of hazardous and 
radioactive waste at weapons* 
plants has been disposed ot 
Many of the containers hous- 
ing that waste are now unsafe. 

"As a result of earlier dis- 
posal practices, soil and 
groundwater contamination is 
now widespread," it said. The 
GAO said that more than 5.700 
individual contaminated areas 
have been identified on depart- 
ment lands. 

"Even where new technology 
has been successfully demon- 
strated, agency officials are 
reluctant to try new 
approaches, tending instead to 
choose conventional tech- 
niques to clean up their facili- 
ties," the report says. 

Resistance to innovative 
techniques is due in part to the 
department’s reliance on "on- 
site contractors who may 
favour particular technologies 
cm the basis of their own expe- 
riences and investments", and 
local governments which "view 


fester clean-up as a threat to 
local economies" and see little 
incentive to adopt more effi- 
cient methods. 

The GAO stresses that devel- 
oping less costly and more 
effective technologies may be 
the only way the US can afford 
the cleansings, which the 
department recently estimated 
would cost $300bn in the next 
30 years. 

The department, which 
requested the review in Janu- 
ary 1993, said yesterday it was 
taking steps to encourage tech- 
nological innovation. "This is a 
problem we've known about 
for some over the 

last two years, we have been 
trying to come up with ways of 
utilising new technologies.” 
said Mr Gerald Boyd, director 
of the Office of Special Projects 
in technology development. 

However, the GAO pointed 
out that one of the other rea- 
sons for the tendency to use 
conventional techniques was 
"the co-ordination flaws in the 
department's clean-up pro- 
gram. Individual offings have 
not worked together. . . to over- 
come the resistance to using 
Improved technology, nor have 
offices worked together to 
develop a comprehensive 
assessment of technology 
needs." the report said. 

The GAO cited a few cases cf 
the department having made 
substantial efforts to develop 
new technologies. It menti one d 
the vitrification that turns 
waste into glass for earipr dis- 
posal at the Hanford Site, near 
Richland, Washington. 

It also suggests considering 
innovations such as heating 
the ground to vaporise liquid 
contaminants, injecting air 
into wells. .. and . digging 
trenches 4o create chemical 
barriers so as to separate dis- 
solved contaminants from 
groand water. 


Bermuda plans 
tougher rules for 
insurance market 


By Richard Lapper 

The Bermuda government has 
announced plans to tighten its 
insurance regulations, in a 
move designed to affirm the 
long-term stability and finan- 
cial health of Its rapidly grow- 
ing commercial insurance and 
reinsurance market. 

Over the last two years 
between $4.5bn and $5bn 
<£3.2bn) of capital has been 
pumped into the island, much 
of it directed towards the for- 
mation of eight new companies 
specialising in catastrophe 
risk. 

The government aims to 
update a framework developed 
largely to control an industry 
dominated by captive compa- 
nies - subsidiaries formed by 
industrial and service compa- 
nies mainly to insure the risk 
of their parents. 

The changes, which are 
expected to came into force by 
the end of 1995, were 
announced yesterday by Mr 
David Saul, the minister of 
finance, and include a range of 
tough new requirements. 

Highly capitalised insurers 
writing significant amounts of 
"direct excess liability" and/or 
“property catastrophe reinsur- 
ance" will be required to dem- 


onstrate minimum capital of 
glOQm, while some other insur- 
ers will also need to show 
higher levels of capital. 

Solvency margins - the yard- 
stick which compares net 
assets as a percentage of pre- 
mium income and measures 
the financial health of an 
insurer - are to be radically 
tightened. These will be 
adjusted to levels which in 
some cases are more stringent 
than the international norm. 
The heavily capitalised compa- 
nies will need to show sol- 
vency margins to at least 50 
per cent, for example. 

“The significant changes 
that have taken place in the 
Bermuda marketplace now 
require change in the insur- 
ance regulatory Systran," said 
Mr Saul. It was no longer 
appropriate to apply one set of 
regulations to all Bermuda 
insurance companies, he 
added. 

The proposals “address the 
concerns held in London (one 
of the centres of the world's 
reinsurance market] that, 
come the next hurricane, some 
of these new reinsurers will 
simply head for the hills,’* said 
Mr Roger Scotton, director of 
information at the Bermuda 
Insurance Institute. 


Argentina prepares 
major second round 
of privatisations 


By Stephen Rdter, 

Latin America Editor 

The Argentine government is 
planning a second round of pri- 
vatisations. to complete its 
transfer of federal enterprises 
to the private sector. 

Mr Domingo Cavallo, econ- 
omy minister, said the remain- 
ing privatisations, to take 
place by the end of 1995. would 
include the sale of all airports, 
three nuclear power plants, the 
post office, the federal mint 
and the country's largest petro- 
chemicals plant. He gave no 
estimate of how much the new 
privatisations would raise. 

The next round is tD include 
enterprises which, for various 
mixons. it has been difficult to 
privatise in the past. 

For example, the country s 
petrochemical/; industry is in 
deep recession, with competi- 
tion from cheap imports, previ- 
ous privatisation of the air- 
ports. of which there are about 


two dozen in the country, has 
been resisted by the Argentine 
air force, which has an 
important role in airport 
management. 

Mr Cavallo, who was speak- 
ing to Argentine bankers, was 
also underlining the govern- 
ment’s determination to keep 
public finances in order 
through 1994 and 1995. 

He announced a hiring freeze 
in the public sector, including 
the military, and indicated 
vacancies would he left unfil- 
led. Public spending on non- 
salary. non-investment areas 
would also be cut by 10 per 
cent, be said. 

A similar 10 per cent cut was 
announced last year by Mr 
Cavallo but most ministries 
undershot their budgets any- 
way. According to Consensus 
Economics, a London-based 
economics consultancy, the 
average of private Forecasts for 
the Argentine budget this year 
is for a surplus of 0.6 per cent. 



Ricardo Alarcdn arrives for the taTVs in New York 


The US and Cuba yesterday concluded a first round of talks 
about migration, which the US State Department called "serious, 
professional and business-like", writes James Harding from 
Washington. 

Mr Ricardo Alarcdn, the former foreign minister i^'ng the 
Cuban delegation, had said, before the talks in New York, that 
the only way to stop the exodus of Cubans to the US was for 
Washington to end its 32-year-old embargo against Cuba. 

Bat Mr Michael Skol, headtog the US side, itg 

position that it would discuss only migration matters. 


By George Graham 
in Washington 

Activity In US manufacturing 
slowed down in August, but 
inflationary pressures contin- 
ued to rise, according to the 
National Association of Pur- 
chasing Managers' monthly 
index.. 

The NAPM index fell to 56.2 
per cent last month, a drop 
from the 5TB per cent recorded 
in July, but still a level indicat- 
ing strong expansion of the 
economy. 

"The past relationship 
between the purchasing man- 
agers’ index and the overall 
economy indicates that if the 


PMI were to average 56.2 per 
cent for all Of 1994, then real 
gross domestic growth should 
approximate 4J> per cent." said 
Mr Ralph Kanfftnan, chair man 
of the association's business 
survey committee. 

However, the NAP M’s index 
of prices paid for materials 
rose in August to 74.5 per cent, 
with every manufacturing sec- 
tor reporting higher prices in 
August than in July. 

"This increase in material 
prices is one of the strongest 
concerns of purchasers, with 
some indicating inability to 
raise product prices to cover 
the increased material prices," 
said Mr Kauffman. 


Poor delivery performance 
by suppliers was also now a 
prime concern for purchasing 
executives, said Mr Kauffman, 
with deliveries becoming much 
slower in August as many 
material suppliers were now 
operating at maximum capac- 
ity. Printing and publishing, 
plastics and rubber, clothing, 
textiles and glass were among 
the industries reporting the 
most trouble in obtaining 
deliveries. 

Financial markets, mean- 
while. are closely watching 
today’s employment statistics 
for further confirmation that 
the pace of growth is slowing. 

The unemployment rate 


dropped In July to 6-1 per cent, 
close to the rate at which 
many economists believe the 
labour market will start to 
tighten and wage demands 
start to rise, and a further drop 
could prompt the Federal 
Reserve to tighten monetary 
policy further. 

One indicator that has 
suggested there is more slack 
left in the labour market is an 
index of help-wanted advertis- 
ing compiled by the Confer- 
ence Board, a New York- based 
organisation with more than 
2,000 companies among its 
members. That index rose only 
slightly to 121 in July after 
dropping in June. 


Mexico high-level drug claim denied 


By Damian Fraser in Mexico City 

The office o! Mexico's attorney-general has 
dismissed allegations by one of its former 
high-ranking employees that senior gov- 
ernment and party officials are involved 
with drug traffickers. 

Mr Eduardo Valle, until earlier this year 
a senior aide in the office, has alleged that 
a cabinet minister has links with the pow- 
erful Gulf of Mexico drug cartel. 

Mr Valle’s accusations appear to be 
based on at least one meeting which the 
minister is known to have had with a 
31-year-old Mexican woman. 

Some investigators see an involvement 
I by Mr Juan Garcia Abrego, one of the 
I most powerful of Mexico’s drug barons. 


Mr Valle, who resigned from the attor- 
ney-general’s office after claiming that his 
efforts to investigate the cartel were being 
blocked by other police officials, has fur- 
ther alleged that the security team of Mr 
Luis Donaldo Colosio, the ruling party’s 
presidential candidate who was assassi- 
nated this year, bad been infiltrated by the 
Gulf cartel. Mr Valle believes that the car- 
tel may have ordered the assassination. 

Mr Valle has also criticised the new 
attorney-general for appointing drug 
enforcement agents who, in Mr Valle's 
opinion, are protectors of drug traffickers. 

The attorney-general's office interviewed 
Mr Valle last week in Washington, where 
he is now living. It then stated there was a 
“lack of evidence to determine any respon- 


sibility of public servants mentioned by 
Mr Eduardo Valle in whatever activity 
connected with the so-called Gulf Cartel." 

It said there was no evidence to suggest 
Mr C-olosio’s security team had been infil- 
trated by drug traffickers. 

Mr Valle had been hired by Mr Jorge 
Carpizo. a former attorney-general and 
now the interior minister. Mr Valle is a 
former leftist student leader and politi- 
cian, and officials have sought to discredit 
him as unreliable and possibly unstable. 

His accusations have generated wide 
publicity in Mexico's independent press 
but state-controlled radio and television 
have been instructed to keep him off the 
air. A prominent radio host was recently 
fired for interviewing Mr Valle. 


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4 



FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


NEWS: INTERNATIONAL 


Morocco and 
Israel to open 
liaison offices 


‘Mr Clean’ foresees new power bloc 

Japan could soon have a coherent opposition, William Dawkins writes 

J apan's fragmented opposi- 
tion parties are just weeks 
away from pooling forces 


By JuUan Ozanne in Jerusalem 


Israel and Morocco moved 
towards establishing full diplo- 
matic relations yesterday, 
marking a another breach in 
the wall of Arab economic and 
political isolation which has 
surrounded the Jewish state 
since its creation in 1948. 

Morocco will become the sec- 
ond Arab state to have direct 
ties with Israel after Egypt 
signed a lull peace with its 
neighbour in 1979. Although 
Israel and Morocco will Ini- 
tially open “liaison offices” 
rather than embassies, Israel's 
foreign ministry said its mis- 
sion in Rabat and Morocco's 



Hassan: conference host 


mission in Tel Aviv would be 
staffed by diplomats and cover 
all economic, cultural, trade 
and diplomatic activities 
including ism ring - visas. 

Mr S himo n Peres, Israeli for- 
eign minister, said the move 
paved the way to "an opening 
of a regional system of rela- 
tions". Israeli officials said 
other Arab and Islamic states, 
such as Tunisia, Indonesia, 
Malaysia, Kuwait and Oman 
could soon follow Rabat's lead. 
They also said the step erodes 
the Arab economic boycott of 
Israel, which the Israel Cham- 
bers of Commerce estimates 
has cost the Jewish state about 
$50bn (E32bn) in lost trade and 
investment since 1950. 

Morocco’s decision to open 
its liaison office in Tel Aviv 
follows international diplo- 
matic practice of not recognis- 
ing Jerusalem as the capital of 


Israel. King Hassan of Morocco 
is also frhntrman of the fclanyir 
Conference Organisation's 
Jerusalem committee and as 
such is committed to reversing 
Israel's assertion of sover- 
eignty over the city. 

The kingdom also said, in a 
separate statement aimed at 
maintaining a balance between 
Israel and the Palestinian 
self-rule areas. U would open a 
liaison in Gaza for rela- 
tions with “Mr Yassur Arafat, 
President of the State of Pales- 
tine”. 

Israel has long maintained 
clandestine relations with 
Morocco and trade between the 
two countries was estimated to 
be worth $100m last year. Up to 
600,000 Israeli Jews have 
Moroccan origins and both 
states believe the potential for 
trade and tourism is consider- 
able. 

In October King Hassan of 
Morocco will host an interna- 
tional conference on economic 
development in the Middle 
East sponsored by President 
BUI Clinton. Hundreds of com- 
panies from Israel, Europe and 
Arab states are expected to 
attend the Casablanca event to 
devise ways of financing multi- 
billion dollar Middle East pro- 
jects in the post-peace era. 

Israelis, particularly Jews erf 
Moroccan descent, will be over- 
joyed by the move in a country 
where many people judge the 
peace process by the extent to 
which It ends Israel's isolation. 

Israeli businessmen will also 
hope relations with Morocco 
will help end the Arab eco- 
nomic boycott. Jordan and 
Egypt both have formal trade 
relations with Israel, Qatar is 
talking with Jerusalem about a 
natural gas project and Kuwait 
and Saudi Arabia have eased 
some of the boycott rules to 
attract US companies which do 
business with Israel Egyptian 
industrialists, who visited 
Israel last week, said the Hmi» 
had come to “war m-up" the 16- 
year-old “cold peace" with 
Israel and forge much deeper 
economic, trade and financial 
ties. A formal suspension of 
the boycott, however, is 
unlikely until Israel withdraws 
from the still-occupied West 
Bank and Golan Heights. 


J apan's fragmented opposi- 
tion parties are just weeks 
away from pooling forces 
to create the first powerful 
opposition group for nearly SO 
years. 

That is the belief of former 
prime minister ToshiM Haifa, 
64, father of the reforms to 
have swept Japanese politics 
over the past year. Hie “Mr 
dean” of Japanese politics yes- 
terday took a break from cam- 
paigning in his home prefec- 
ture of Aicht the heartland of 
the Japanese car industry, 
which is due for a critical 
by-election in 10 days, to 

stplaln his bft pwf 

If Mr Haifa is right, Japan’s 
frustrated economic partners 
will have cause to throw their 
, hats in the air. Lack of a coher- 
ent opposition during nearly 
four decades of one-party rule 
by the conservative Liberal 
Democratic party is commonly 
held to have suffocated politi- 
cal debate. 

This has bolstered the power 
of the state bureaucracy, often 
tempted by economic protec- 
tionism, which is blamed for 
contributing to Japan's huge 
current account surplus. The 
new group, provisionally 
named the “new-new party” by 
the Japanese press, would have 
about 200 lower house seats, so 
rivalling the LDP for size. 

Mr Kaffir created a stir two 
months ago by leaving the 
LDP, in a foiled attempt for the 
premiership, which was seen 
by his enemies as f hmh leri 
opportunism. He was 
prompted, he said, by distaste 
for his colleagues’ decision to 
form a coalition with the LDP's 
traditional foe, the Social Dem- 
ocratic party, to attain the par- 
liamentary majority needed to 
return to power after a humili- 
ating year in opposition. 

“Hie LDP lost all the honour 



TosMki Kaifu: much de pe nd s on AicM by-election 


of the past by choosing a prime 
minister from the SDP, just to 
get back into government It is 
my responsibility, as the one 
who started reform, to say this 
was wrong;” said Mr Kaifu. He 
had repeatedly warned that the 
LDP was losing its way ever 
since being ousted by the old 


guard three years ago for being 
too keen on reform. 

In the weeks sinrp. leaving 
the LDP, Mr Kaifu has built a 
prominent place in the pro-re- 
form opposition. He is working 
with Japan’s other two most 
popular post-war prime minis- 
ters, Mr Morihiro Hosokawa 


and Mr Tsutamu Hata, to cre- 
ate the new super-party, the 
subject of intense backroom 
bargaining over the past 
month. 

Mr Kaifu was certain tire 10 
parliamentary opposition 
groups will shortly agree a 
common policy platform and 
joint electoral candidates. *T 
assure you we will succeed,” 
he said. He is ostentatiously 
TV^V^ nyri mi tfal on suggestions 
that he is a candidate to lead 
the new super-party. 

Much depends on the out- 
come of the Atehi by-election 
for an upper house seat on Sep- 
tember 1L It will give a mea- 
sure of Mr Eaifu's own elec- 
toral value, as leader of the 
campaign, and could help win 
over those opposition members 
still doubtflil about joining the 
super-party. It will also be 
watched closely by the govern- 
ment coalition, as the first 
election test since it grabbed 
power at the end of June. 

Aichi’s upper house poll win 
also give a due to whether or 
not political reform really will 
shake up Japan’s power struc- 
ture, because it wQl take place 

muter doctoral rules similar to 

those due to came into effect 
far the more powerful lower 
house nest year. 

There will be single candi- 
dates from the government and 
opposition coalition groups, 
fighting openly for a single 
seat, rathe* than a cosy share- 
out of several seats, as under 
the old mniH-s eat constituency 
system. 

Mr Kaifu, making a brief 
stop in his Tokyo office before 
returning to Aicfai to campaign 
for the opposition candidate 
there, believes the outcome 
will m aka or break the govern- 
ment “It is going to be diffirnlt 
for an administration com- 
posed of opposite poles to come 


up with an ideology. The only 
way they can survive is to 
maintain the status quo” he 
said. 

The SDP and LDP are like 
oQ and water. They cannot 
compromise, and can only 
delay an important decisions 
like tax and post-war repara- 
tions,” he argues. 

In theory, the opposition 
should have an advantage in 
AichL Mr Koshiro Is hi da, 
chairman of. the BuddhiSt- 
backed Komeito, the Clean 
Government party, the second 
largest opposition group, has a 
seat there. There is also sup- 
port from local anions linked 
to the Democratic Socialist 
Party, an important opposition 
group supported by Toyota, the 
powerful car maker based 
there. 

AH this invites the question 
of whether the reforms started 
by Mr Kaffir In 1991 really wQl 
produce a new breed of skilled 
politicians better g K| p to malm 
policies that respond to voters’ 
aspirations, rather than 
scheme for power. 

“Yes, reform did go through 
a lot (rf detours,” he admitted, 
referring to the success of LDP 
party elders in watering down ! 
his original plans. Yet a vital 
general principle has been 
introduced. Politicians will 
henceforth be held more 
directly accountabl e for their 
policies, by virtue of a more 
competitive electoral system, 
Mr Kaifu argued. 

That will make the job of 
prime ministers in the mid- 
1990s for harder than was the 
case when Mr Kaifu held the 
post When asked if he wants 
another crack at thn leader- 
ship, post-reform, Mr Kaifu 
laughed uproariously. That’s 
not in my mind just now,” he 
said. “I just want politics to be 
dean.” 


Jiang set 
to raise 
profile 
with tour 


By Tony Walker In BeQfog 


Shingles drug output ordered suspended 


By Eimko Terazono in Tokyo 


Japan’s ministry of teaith and welfare 
yesterday ordered the suspension of 
production of a shmg ies drug whose 
side effects allegedly killed 15 patients 
last year. 

The ministry said Nippon Shpji vio- 
lated the Drugs, Cosmetics and Medical 
Instruments Law, as the company only 
reported one death of a patient during 
clinical trials, when in fact three 


patients had died. The suspension will 
last 105 days from next Monday. 
Sorivudine, the shingles drug, was 
brought to the market last September, 
but was withdrawn two months later 
following the deaths. 

Until now, the health ministry, Nippon 
Shoji and doctors have been blaming 
each other for the deaths. Doctors and 
the company have been pointing fingers 
at the ministry for allowing the drug to 
be marketed in the first place, while the 


doctors have been blamed for not read- 
ing the warning against prescribing 
Sorivudine along with certain, other 
drugs. 

Tn order to avoid criticism, the minis- 
try is not withdrawing approval 
of Sorivudine, since it would raise ques- 
tions over wfry the gove rnm ent author- 
ised the drug in the first place 

Meanwhile, Nippon Shoji is under 
investigation from the Securities and 
Exchange Surveillance Commission, for 


alleged insider trading. , A^total of 139 
company employees and their relatives 
are alleged to have sold the company's 
stock ahaad of the annnimffiinmt of % 
dnaths •••. .7* '■ “ '. t .‘ 

Analysts say the suspension would be 
a blow to Nippon Shoji’s earnings. 
Seme 91 pear cent of the company's reve- 
nue comes from drug wholesaling; but 
profit margins on Air business are thin 
and about a quarter of earnings derive 
from drug mannfartnriiig . 


China has approved Its first 
private bank with tire 
shareholders coming from 
domestic private companies, 
according to the official 
Xinhua news agency, Tony 
Walker writes. 

The People's Bank, China's 
central bank, gave its 
approval to the new 
institution as part of 
co n tin ui ng reforms of the 
banking sector. 

China has been licensing 
some new banks, bat they 
have been connected with 
public sector companies or 
municipalities. 

Mr JRnp Slmp Hi f, rinri rman 

of the All-China Federation of . 
Industry arid Commerce, said 
the new bank would not accept 
foreign shareholders, but it 
would act for foreign 
c lie nts 

little detail of tire new bank 
was provided fat a brief Xinhua 
despatch, but Mr Jins said the 
b ank 's initial capital would be 
YnShn (£15L5m). 

The establishment of the 
privately owned bank was . 
described as a “significant 
experiment” in China’s 
banking reforms. 


Population curbs have worked, but there is still far to go, Mark Nicholson reports 


NEWS IN BRIEF 


Where Egypt boasts decade of progress 




None of the 
women attend- 
ing the Cairo 
Family Plan- 
ning Associa- 
tion clinic In 
the sprawling 
suburb <rf Ze in- 
ham yesterday 
knew that the 
world’s biggest 
population conference was due 
to open up the road on Mon- 
day. Few probably cared; none 
seemed the least persuaded 
thnt seeking family planning 
advice might be un- Islamic. 

“I’m convinced Islam Is not 
against family planning,” said 
Hoda, a 3D- year-old woman 
swathed in a black Hejab veil, 
the badge of Islamic piety. “My 
brother-in-law is a religious 
man and he ordered his wife 
not to use contraception. He 
tried to deter me, but I didn’t 
listen. 1 encouraged all my 
friends to come to the clinic. 
Now all of them blossom like 
fresh jasmine.” 

Hoda has stopped at five 
children, and was having a 
routine check on her IUD, a 
visit which cost 25 piastres 
(about 5p) at this private clinic. 
Her 21-year-old sister had come 
along too. She has two daugh- 
ters and said that was enough: 


“I have an IUD. and don’t plan 
to have any more children. My 
husband would like a son. but 
he doesn't pressure me." 

For most women visiting the 
clinic, said Dr Mawahab el- 
Mouelhy, a UK and US-edu- 
cated doctor, birth control is a 
practical consideration, deter- 
mined usually by women’s con- 
cerns for their health and, per- 
haps more commonly, because 
they simply cannot afford to 
clothe, feed, educate or house 
more children. 

For all the criticism by 
Egypt’s religious conservatives 
of the population policy agenda 
of Monday's International Con- 
ference on Population and 
Development, the strictures of 
Islam have so far done little to 
put a brake on a decade of 
progress in population control, 
which Egypt’s policymakers 
and aid workers consider little 
short of remarkable. 

The population growth rate 
has plunged from 3 per cent to 
about 2.1 per cent A fertility 
rate of 5.3 in 1980 has come 
back to an average of 3.9 births 
per woman, 2.9 in urban areas. 
Knowledge of family p lanning 
among married couples is 
almost universal, while 47 per 
cent of women use contracep- 
tion in Egypt (predominantly 


Family p lanni ng 


Itariad women 15-48 

Dadfflonal methods 2% 



Shook Nutaral Damognphfc C HmKi 
WEbh* 


IUD devices and the pill) 
against 24 per cent in 1980. 

Behind such results lie 20 
years of concerted government 
policy, backed by foreign aid, 
of which USAID has provided 
75 per cent of all family plan- 
rung assistance, a total of 
about $L70m (£U3mX to fill the 
media with birth control infor- 
mation and stock and staff 
hundreds of clinics, enough for 
96 per cent of all Egyptian 
women to be within 5km of a 
family planning centre. 

But cheered as the govern- 
ment and organisations such 
as USAID are by such results, 
they remain for from meeting 


their ambition of creating for 
Egypt a population growth 
which the country can com- 
fortably sustain. At present 
rates, Egypt's 60m population 
grows by lm every 10 months. 

The constraints on the coun- 
try’s most basic resources are 
severe enough; all but 4 per 
cent of its lm sq fan is desert 
A recent report by the UN’s 
Economic and Social Commis- 
sion for Western Asia reckoned 
Egypt was consuming 95 per 
cent of its available water 
sources and faced a water defi- 
cit by the year 2000. 

By most estimates, the econ- 
omy needs to generate about 
500,000 jobs a year to mop up 
new entrants to the labour 
force, implying an annual 
growth rate of 5 per cent of 
GDP, more than twice the most 
optimistic estimates of present 
growth. The World Bank reck- 
ons that at least 5m new jobs 
must be created by 2000 even 
to halve the present unemploy- 
ment rate of 20 pa- cent 

But population experts tend 
to agree that cutting the 
growth rate to perhaps IS per 
cent is unlikely to come by pro- 
viding more pills, colls or pub- 
licity campaigns alone. 

“There is something miss- 
ing,” says Dr el-Mouelhy. 


"Which is the status of women 
in this country. We need to 
work hard on this. It’s not just 
family planning, its about edu- 
cation of women.” 

Emphasis on the education 
of girls is a central theme of 
the conference’s draft docu- 
ment to be discussed next 
week in Cairo, and one which 
groups such as USAID and the 
Population Council hope the 
conference's hosts will take to 
heart A well established con- 
comitant between raised edu- 
cational standards among girls 
and subsequent foils in fertility 
rates is seen as the key to 
future policy in countries such 
as Egypt, these groups argue. 

A guide to the task lying 
ahead for Egypt lies in the fact 
that, by conservative esti- 
mates, at least 66 per cent of 
Egyptian women are illiterate. 

Changing that will require 
more than the provision of 
teachers and schools, of which 
Egypt must already bufid on 
average one a day to keep up ; 
with the rise in schoolchildren. 
It will need an attempt to altar 1 
many ingrained attit udes , and 
is likely to depend on an 
improved economic climate. 
All that before the air can 
thicken with the scent of jas- 
mine. 


Japanese car 
sales up sharply 


Car sales in Japan showed their second successive month erf 
growth in August, rising at a sharply increased pace which 
industry offic i al s safd was evidence demand was recovering, 
Gordon Gramb reports from Tokyo. The 9.3 per cent year-on-year 
jump in unit sales of passenger cars, according to the Japan 
Automobile Dealers’ Association yesterday, compares with a L5 
per cent upturn in July. 

De man d was strangest for new subcompact models, to which 
leading manufacturers have attached competitive price fo g*. The 
figures exclude the special category of mini-vehicles with an 
engine capacity below 660cc. sales of which have been on a rising 
tr end for S Ame months 

Analysts said the improvement in the consumer marfee t fol- 
lowed tax rebates provided as part of a government package to 
stimulate the economy. 

Sales of all vehicles except minicars and mi n iv a ns rose 12 per 
cent, a third successive gain and the first doubl&digit increase 
since August 1990. This stemmed in part from an 1&6 per cent 
leap in truck safes. Many older commercial vehicles are bring 
replaced because of tightened emission and load requirements. 

Toyota, the motor industry leader, sold 14£ per cent more 
vehicles titan a year ago, but the second-ranking Nissan remained 
out erf favour, with a 3 per cent faJL 


S African strikers fired on 


Falling prosperity hurts family planning 


In a continent where 
population growth outstrips 
economic growth. Nigeria at 
90m people is by for the biggest 
nation in Africa. 

Until 1988, when Prof OK- 
kbye Ransome-Kutl, then 
health minister, launched a 
national population policy, 
Nigerians hod been so proud of 
their self-styled tag as the 
“giant of Africa" that, as long 
as the oil money rolled in, they 
regarded high population 
growth as healthy, and saw lit- 
tle point in controlling the rate 
of growth. 

Nigeria was then believed to 
have at feast uom people, put- 
ting it among the 10 largest 
populations in the world. The 
1991 census caused a surprise; 
Nigeria had only 88£m. The 
overestimate was a result of 
inflated numbers by tribal 
chiefs and regional governors 
hoping to boost their political 
clout and revenue allocation. 

The United Nations Popula- 
tion Fund has projected the 


Paul Adams 
reports on 
Nigeria's special 
problems 


average population growth rate 
between 1990 and 1995 as 3.1 
per cent (which would double 
the population in about 30 
years) with the birth rate at 45 
per 1,000 persons and death 
rate at 14 per 1,000 (including 
infont mortality rate of 96). 

The UN estimates the fertil- 
ity rate at 6.1 children per 
woman, while the national pol- 
icy set a target of only four. 
Since the 1970s the urban pop- 
ulation has risen from 30 per 
cent to nearly half and the rate 
of growth in the towns is 
higher at 5J5 per cent. 

Generalising about Nigeria, a 

country of over 200 ethnic 
groups and very diverse cul- 


tures, is often deceptive and 
never more so than in atti- 
tudes to education and tire role 
of women. 

In the mainly Christian 
south, female education and 
literacy are for higher than in 
the predominantly Moslem 
north, where even the discus- 
sion of birth control is not 
widely accepted. 

In the south-east there is a 
high percentage of Catholics 
especially among the Ibo tribe. 
The alarming decline in social 
services during the 1990s has 
baited the progress towards 
family planning clinics and 
universal primary education 
especially in the north, bolster- 
ing the influence of the 
Koranic schools. 

Even nationally, the UN 
paints a bleak picture. “The 
status erf woman in Nigeria has 
improved little over the last 
decade. Is general, they are 
considered second-class Citi- 
zens not by law but because of 
the social and cultural cli- 


mate” says the UNFPA’s 1993 
review of the national pro- 
gramme. “Although some 
women have made consider- 
able progress in the the aca- 
demic and business world, 
Nigerian women, particularly 
rural, are clearly underprivi- 
leged.” 

The literacy rate for women 
is 31 per cent (54 per cent for 
men) and more than half of all 
Nigerian women were married 
at the age of 15. 

The problem of education 
lies not just with women. As a 
prominent women’s group in 
Nigeria points out, there may 
be a target of four children per 
woman, but in a polygamous 
society many men. for exceed 
that figure. 

If the prospect of airtailing 
population growth is limited 
the outlook for economic 
growth has become bleak. 
Despite the massive oil boom 
in the 1970s. the GDP income 
per capita is down to around 
$290, about the level of 1961 


In the period, Indonesia has 
risen from a lower per capita 
Income to a level three times 
that of Nigeria. In January’s 
budget speech by finance min- 
ster Mr Kalu I Kalu, com- 
mented on three years of politi- 
cal uncertainty, capital flight 
government over-spending, 
which “resulted in a further 
decline in GDP growth rate 
from 49 per cent In 1991 to 19 
per cent in 1993. 

“A comparison with the 
average growth rate of 5 per 
cent from 198841 demonstrates 
the enormity of the task 
involved in resuscitating the 
economy in 1994 and beyond,” 
concluded Mr Kalu. Since then 
strikes, shortages and a dearth 
of foreign exchange have taken 
the economy farther down hfl!_ 
Nigeria accounts for about half 
of West Africa’s population 
and whereas Ghanaians once 
poured into Nigeria for a better 
life, the chances of reverse 
migration look ever more 
llkriy. 


Labour unrest in South Africa drew a violent response from the 
security forces yesterday whoa police fired on striking fo r e s tr y 
workers, injuring at least 20. Private security personnel used stun 
grenades and rubber bullets to quell a disturbance by striking 
goldminers, Patti Waldmdr reports from Jo hannesb urg. 

Five miners were injured in demonstrations, tndndlng a sit-in 
by 300 miners underground at an Anglo American mine near 
Carietonvflle, south-west of Johannesburg, the company «»ifl . 
Violence also broke out at a forestry plantation near Piet Retief, 
dose to South. Africa’s border with Swaziland. Police said they 
fired blrdsbot to dispose 4900 workers, injuring at least 20. Local 
officials of the African National Congress said four had died, but 
police denied this. 

Labour unrest, other backed by unions or unofficial, has 
Increased in South Africa since the black-majority government of 
President Nelson Mandela came to power in May. Pay is the 
biggest issue, as black workers raise their expectations following 
the demise (rf apartheid and white minority rule. 


Uzbek dissident faces trial 


Authorities in Uzbekistan have charged the country's most prom- 
inent dissident with anti-state activities - at the sama time as the 
Comer Soviet Central Asian republic celebrates its third anniver- 
sary of independence, described by its president as “a guarantee 
of freedom*, John Lloyd reports from Moscow. 

Ms Vassilya Inoyatova, who leads the banned opposit i on group 
Birifk (Unity), said earlier this week that she had been charged 
with breaking article 60 of the Uzbek criminal code, after police 
found two sacks (rf the newspaper Erk, also banned, in her fiat 
No date for her trial has yet been set All opposition activity is 
hflnyiwi in Uzbekistan. 


Zaire wants Rwandans out 


Zaire wants the X2m Rwandan reffigees on its territory to leave 
by the end of the month, Justice Minister ftamanda Wa KamanHn 
told representatives of Rwanda’s new gover nm ent yesterday, 
Reuter repeats from Goma. Speaking at the start of a ministerial 
meeting with the Rwandan government. Mr Kamanda said Zaire 
would encourage the return of the Rwandan refugees by halting 
the activities of Rwandans hostile to the new gover nm ent in 
Kigali - and disarming and encamping members of the former 
Rwandan government army. 


Pacific Economic Co-operation - 
(Apec) forum in Seattle last 
November, which was ? also* 
aimed at enhancing his credi- 
bility at home and abroad. 

Mr Jiang is due to initial a 
document on border demarca- 
tion in the remote western 
region of China and sign an 
accord in which the two coun- 
tries agree not to target each 
other with nuclear missiles. 

All thin is a for cry from foe 
tension between the commu- 
nist giants in the eariy 1960s; 
which led to a brief border war 
and frequent skirTmnhew. Whwrr 
Mr Jiang initials the border 
agreement, 99 per cent (rf bor- 
der disputes will have been 
resolved, according to an offi- 
cial Xinhua news agency des- . 
patch. 

Hie two sides will also sign a 
communique aimed at provid- 
ing a framework for develop- 
ment of political and commer- 
cial ties brio the next century. 
While two-way trade at 
&245hn (£L46bn) for the first 
six ramtfis of tvdg year is down 
39 per cent cm the same period 
last year, Beijing and Mosccpv 
envisage the continued, devel- 
opment of a substantial triSi- 
iug relationship. j 

Two-way- trade reached 
87.69m last year, an increase 
of 30 per cent over tiwytar 
before, malting Russia Chirp's 
seventh largest trading part- 
ner. Exchanges this year hive 
been Mt by a 50 per cent stamp 
in the first six months In ber- 
d er tra de because of disagree- 
merits over customs and nrimi- 
gration. issues. - Y 

Russia is proving sensitive to 
a flood of Chinese traders 'mov- 
ing across the- border into its 
far-eastern regions. Russian 
officials fear this is a form of 
“colonisation”, with the /Chi- 
nese over-staying their visas. 

Tins si tuati o n is not good 
and should be corrected or 
stopped,” Mr Jiang told Rus- 
sian reporters in Beijing this 
week, but he added, using a 
Chinese Idiom: “These are only 
problems in the course of 
development. We should not 
give up eating for fear of chok- 
ing-" ' 

Mr Jiang’s visit to Moscow 
follows incr easing ly frequent 
contacts between Chinese and 
Russian officials in the past 
year or so. 

Russian visitors to China 
this year included Mr Victor 
Chernomyrdin, the prime min- 
ister, and Mr Andrei Kozyrev, 
the foreign minister. China's 
foreign minister, Mr Qian 
Qfchen ai)ij the defence minis- 
ter. Mr Chi HnnHqn lyvfi vis- 
ited Moscow this year. 

China and Russia are seek- 
ing to extend their defence 
cooperation, with the Chinese 
pressing the Russians to sup- 
ply technology for a fighter air- 
craft China has also beena big 
purchaser of Russian defence 
equipment, with orders for 26 
Su27 fighters, and plans for 
another squadron. 






When President Jiang Zemin of 
China arrives in Moscow today 
at the start of a four-day visit 
his purpose will be twofold; he 
will be seeking to promote a 
closer commercial and strate- 
gic partnership with Russia 
and at the same time boosting 
his own stock on the interna- 
tional stage. 

With China in a transitional 
phase in preparation for a new 
generation (rf leaders (Mr Deng 
Xiaoping, the paramount 
leader, is in failing health), it is 
important for Mr Jiang to 
assume the aura of an interna- 
tional figure. 

His visit to Moscow, and sub- 
sequently to Ukraine and 
France, is part of attempts to 
bolster his appeal. It follows 
Ms appearance at the Asia 


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FINANCIAL times FRIDAY SEPTEMBER 2 1994 


Iran presses 
Gulf states 
for tough 
security pact 


By Frances Wfflams in Geneva 

Iran yesterday called Tor a 
“defensive security" pact 
among Golf countries, which 
would include an accord to 
curb the build-up of conven- 
tional arms in the region and 
the outlawing of weapons of 
mass destruction. 

The proposal, the most 
detailed Iran has yet put fop 
ward, c ame in a speech to the 
United Nations Disarmament 
Conference by Mr Ali Akbar 
Velayatl, foreign minister. 
However, it is likely to get a 
cool reception from Iran's Arab 
neighbours who distrust Teh- 
ran's brand of Islamic radical- 
ism and its perceived ambi- 
tions for regional superpower 
status. 

Yesterday's initiative reflects 
Tehran's concern at its exclu- 
sion from existing Gulf secu- 
rity arrangements since the 
defeat of Iraq in 1991 and its 
desire to reduce US influence 
in the region. 

Iran, which has been seeking 
to rebuild its armed forces 
since the devastating eight- 
year war with Iraq ended in 
1988, has viewed with disquiet 
the heavy armaments spending 
by Gulf states ahnwd at deter- 
ring Tehran’s territorial claims 
and meeting any threat from 
Iraq. 


Climate talks end 
without accord 


By Frances WflRams 

Representatives from more 
than 150 nations will today end 
a two-week meeting on the UN 
climate change treaty with no 
agreement on .proposals to 
toughen curbs on emissions of 
greenhouse gases. 

This is despite a widespread 
acceptance by governments 
that existing curbs are inade- 
quate to prevent a dangerous 
atmospheric build-up of carbon 
dioxide and other gases that 
cause global wanning. “It is 
clear that [present! commit- 
ments are not adequate," Mr 
Raul Estrada-Oyuela of Argen- 
tina, the meeting chairman, 
said yesterday. 

The 1992 climate change con- 
vention. now ratified by 93 
nations, requires developed 
countries to bring carbon diox- 
ide emissions back to 1990 lev- 
els by the year 2000. But no 
pledges are required for post- 
2000, nor do developing coun- 
tries yet have any obligations 
to cut emissions. 

One group, led by Germany, 
Denmark and the Neth er l an ds, 
has been lobbying for a new 
protocol to be adopted at the 


first conference of the parties 
to the convention in Berlin 
next spring. 

Germany's envi ronment min- 
ister, Mr Klaus TOpfer, this 
week proposed a 15-20 per cent 
cut in carbon dioxide emis- 
sions of industrialised nations 
by 2005. 

But for a protocol to be 
adopted in Berlin, drafts must 
be circulated by September 28* 
six months ahead. Conference 
nffl rials said the US, Britain,* 
China, India and the petro- 
leum-exporting countries were 
among those dragging their 
heels. 

Britain and the US are said 
to be holding out for a satisfac- 
tory deal an "joint implementa- 
tion”, enabling them to meet 
part of their obligations by fin- 
ancing projects to reduce third 
world emissions. 

The Berlin meeting must 
decide on the permanent home 
of the convention secretariat, 
provisionally based in Geneva. 
Geneva, Bonn and Montevideo 
have made formal offers to 
host the secretariat, which will 
have a staff of 50 and an 
annual budget of ¥10m- 
$15m. 








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NEWS: INTERNATIONAL 


Control of Angola beyond Savimbi’s grasp 

But both sides may have reason not to sign a peace accord now, writes Nicholas Shaxson 


Mr Velayatl said more than 
$40bn (£25J5brO worth of arma- 
ments was flowing into the 
Arab Gulf states, the highest 
rate erf arms purchase in the 
world. 

“Something must be done to 
stop this senseless arms race,” 
be said. 

The first step towards a 
defensive security pact would 
be the creation of a regional 
security forum where “threat 
perceptions and security con- 
cerns’* could be aired openly 
and confidence-building mea- 
sures discussed 

To pave the way for a zone 
free of all weapons of mass 
destruction all states in the 
region should renew their com- 
mitment to renouncing nuclear 
weapons, join the Nuclear Non- 
Proliferation Treaty and ratify 
the United Nations convention 
which outlaws r.hwnipgi weap- 
ons. 

More controversially, Mr 
Velayati urged “regional provi- 
sions” to guard against cheat- 
ing on nuclear, rhpwii-ai and 
biological arms. 

On conventional arms, the 
proposal was more tentative. 
Mr Velayati said possible mea- 
sures included an exchange of 
information . on weapons 
stocks, agreement to cut mili- 
tary spending and a rpilmg cm 
arms imports. 


T he refugees now occupying 
Luanda’s ruined Hotel Turismo 
can stand on its rocket-shat- 
tered upper floors and view the 
nearby headquarters of Sonangol, 
Angola’s state oil company and the 
government's main financial support 
against the rebel National Union for 
the Total Independence of Angola 
(Unite). 

The Turismo used to house senior 
Unita rebel officers following a May 
1991 peace agreement with the ruling 
MPLA government But its shattered 
walls now testify to the collapse of 
that peace. Umta's Leader, Mr Jonas 
Savimbi, who rejected defeat in UN- 
sponsored elections in late 1992, led 
his followers back to war, leaving 
many of: his officials stationed at the 
Turismo to die in the rntming MPLA 
onslaught. 

More tfiau nine months of peace 
EaTfrc in the Ga mb ian capit al , Lusaka, 
have since aimed at ending Africa's 
longest-running war, which started 
soon after Angola’s independence 
from Portugal in 1975. For more than 
six months, UN mediator Alioxme 
Blondin Beye has been saying the two 
sides are close to a deal 
Yet some observers in L uanda dis- 
miss the talks as nnF^ in g more than a 
show aimed at heading off tightened 
UN sanctions and at obscuring events 
on the battlefield. 

Both sides may have reason not to 
sign an accord now. Government gen- 
erals, adv ancing on the ground, could 
win back more land, while Unita’s 


demands to control the governorship 
of Huambo, their capital, have not 
been met 

The government's capture last 
month of key diamond areas around 
the north-eastern town of Caftmfo 
dealt a powerful blow to the rebels, 
who use diamonds to buy weapons. 
Last year some $250m (£l68m) worth 
of diamonds came ont of Angola, 
mostly from the Caftmfo area. 

The loss will not cut off all erf Mr 
Savtmhi’s funds. The diamond fields 
are huge and lawless; they swarm 
with small-time but well-armed dig- 
gers, many of whom will remain loyal 
to the Unita cause. 

But the defeats around Caftmfo, the 
loss of the northern provincial capital 
of Ndalatando hi early May, and other 
government victories underline the 
rebels’ weakness. The government 
thrusts into the north have been led 
by freshly trained Angolan counter-in- 
surgency commandos, with help from 
South African and other mercenaries. 

The besieged government garrison 
in the central highlands town of 
Cuito, in the heart of traditional Unita 
territory, surrounded, starved and 
pounded by heavy artillery for a year 
and a half, last month blasted rebel 
forces from positions in the town cen- 
tre and scattered them into the hills. 

Mr Savimbi’s western cold-war sup- 
porters have now gone home. The col- 
lapsed 1991 accords were part of a 
wider regional deal which linked the 
departure of 50,000 Cuban troops, who 
had fought alongside the MPLA ginrw 



Jonas Savimbi: rejected poll defeat 

1975, with the withdrawal of South 
African forces from Namibia, Ango- 
la's southern neighbour. South Africa 
and Namibia are now ruled by tradi- 
tional MPLA allies. 

The government produces more 
than 500,000 barrels a day of oil. last 
year worth some £L75bn. more than 
60 per cent of which has gone directly 
into the defence budget Arms ship- 
ments from Spain, Israel, Brazil and 
the former Soviet Union are being 
unloaded openly at Luanda’s airport 


while military units press gang teen- 
agers onto army trucks in the streets 
of the capital. 

Unita’s representative to the UN, 
Mr Gardo Muekalia, last week said he 
expected a government offensive ou 
Soyu. Angola's second-most produc- 
tive oil town which produced some 
35,000 bid before Unita captured it last 
year. 

Yet Huambo still remains the key 
diplomatic and military prize. Unita 
refers to Huambo as its “Jerusalem” 
and sees control of the city as the key 
to any peace agreement But the gov- 
ernment says its refusal to accept a 
Unita governor in Huambo is “not 
negotiable”. 

Mr Savimbi appears unwilling, or 
unable, to concede what is demanded 
of him. TO be denied governorship of 
Huambo, after nearly 20 years of civil 
war, may be impossible for him to sell 
to his generals and to his people. 

He also knows the battle to control 
all Angola, by military or by electoral 
means, is beyond his grasp. He may 
thus think his best hope is to carve 
out a kingdom of his own centred on 
Huambo. its borders frozen in place 
by UN peacekeepers called in, should 
a peace agreement be signed. 

But the Luanda government and 
the outside world, afraid of a de facto 
partition of Angola, want to avoid 
such Unita control at Huambo. UN 
sanctions already ban supplies of fuel 
and arms to the rebels ami they also 
threaten to dose down Unita hank 
accounts and offices abroad if the 


rebel group does not give up demands 
to install its own governor in 
Huambo. 

Mr Savimbi has said new sanctions 
will scotch the talks and the UN has 
repeatedly backed down from apply- 
ing them. The clear knowledge on 
both sides that the war is unwinnable 
may prove enough incentive to find 
peace. The government knows Mr 
Savimbi cannot be fully defeated. 
Even on a shoestring budget his reb- 
els can continue to make the country- 
side ungovernable. 

But diplomats in Luanda also 
believe an agreement in Lusaka could 
be one of the smaller hurdles on the 
road to a lasting peace in Angola. 

The UN is trying to work out a 
formula for peace involving revival of 
the 1991 accords. But the extent of 
mistrust stirred up by the disaster of 
those very accords has severely dam- 
aged chances of real peace. When Mr 
Savimbi lost elections in 1992, be used 
stockpiles of weapons hidden in the 
bush to storm back across much of 
Angola, overwhelming the largely 
demobilised government forces in 
town after town. Neither side will find 
it easy to disarm this time. 

Many Unita soldiers who were in 
the Hotel Turismo and other parts of 
Luanda when the war broke out again 
were hunted down and killed. "They 
shot me in my office,” Unite general 
Mukumba Gato, who escaped from 
Luanda with a bullet in bis arm, said 
in Huambo earlier this year. “I am 
afraid to go back." 


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financial times 


FRIDAY SEPTEMBER 2 1994 


NEWS: WORLD TRADE 


Airline chiefs bemoan 
$10m-a-day subsidies 


By Paul Betts, 

Aoros P ac ® Correspondent 

The European Commission is 
consulting the European air- 
line industry and governments 
on tightening existing state aid 
rules for airlines at a time 
when government subsidies to 
European national carriers are 
running at a rate of $iom a 
day. 

But Mr Herman De Croo. 
chairman of the European 
Commission's independent 
“wise men" committee for air 
transport, yesterday warned at 
a Financial Times aerospace 
conference that there was a 
risk that carriers seeking sub- 
sidies would receive their 
share of state aid before 
stricter guidelines came into 
forte. 

Tbe “wise men” committee, 
which was set up by the Com- 
mission last year to draw up 
recommendations on the 
fixture of the European ni rijn e 
industry, is also due to meet at 
the dud of this month Mr Mar- 
celinp Oreja, the new European 
trimsport commissioner, to dis- 
cuss i the issue. 

One of -the principal recom- 
mendations the committee 
made in its report in February 
was 'the establishment of clear 
guidelines an airline subsidies. 

But Mr De Croo noted that, 
in Jidy alone, the Commission 
approved state aid totalling 
$7.1ba, to three airlines includ- 
ing TAP Air Portugal, Olympic 
Airwats of Greece and Air 

“This means that since 


FT 


August 1991 the Commission 
has approved state aids to 
European airlines totalling 
$l(X35bn. That’s roughly $10m 
a day," he told the FT confer- 
ence. 

“The tragedy of it all is that 
when the economy is improv- 
in g. ai r transport is on the 
upswing, and most big airline 
are finally making money, a 
hard core of state-owned 
majors appear mtahte to taka 
any medicine at all,” he 

Some European 
governments 
under political 
pressure from 
their country’s 
labour organi- 
sations have in 
Conferences turn placed sig- 
— — nificant pres- 
sure on the Commission to 
allow state aid to airlines. Mr 
De Croo said. 

The Commission's recent 
approval of state aid to a mm. 
her of European airfinns. espe- 
cially a FFx20bn ($3.7bn) pack- 
age to Air France, also ranw 
under heavy attack from 
senior airline industry execu- 
tives at the FT conference. 

Mr Robert Ayling, group 
managing director of British 
Airways, said the combined 
effects of liberalisation «nd the 
recession had created a two 
class airline industry in 
Europe. 

The first involved airlines 
which have had to solve their 
problems on their own; the sec- 
ond included airlines which 
continued to defy the laws of 
economics and had enjoyed a 


bumper year for subsidies. 

“We don't see why Air 
France should be protected to 
the detriment of other airlines 
which are not allowed to dip 
into their taxpayers pockets, 
he said. 

The Issue of state aid was an 
important test for the Commis- 
sion. So far, Mr Ayling said, 
Brussels had “dramatically 
failed” this test and done 
“lasting damage" to its reputa- 
tion. 

Mr Jan Stenberg, president 
of Scandinavian Airlines Sys- 
tem (SAS). also said the Com- 
mission’s policy on state aid 
would slow down the overall 
European air transport deregu 
Lation process. 

Hie policy was also attacked 
by Mr Hans Mirka, head of 
international operations at 
American Airlines, one of the 
two biggest US carriers, who 
said the recent subsidies to Air 
France, TAP and Olympic 
equalled more than 40 per cent 
of the total losses on all west- 
ern airline scheduled interna- 
tional passenger services in the 
past four years. 

He also said several Euro- 
pean governments had moved 
aggressively to restrict the 
ability of US airlines to fly to 
and beyond their markets. 

If other governments failed 
to match the US commitment 
to real competition, the US 
would be unable to continue 
its pro-competitive policies in 
international aviation, he said. 
“The result will inevitably be a 
return to the protectionism of 
the past.” 


l| AE clampdown clears 
shops of pirate videos 


She 


and 


in the .United Arab 
^tes pulled pirated videos 
: off the shelves to 
abide oy the UAE’s first copy- 
right law which took effect yes- 
terd y, Reuter reports from 
Diifci. 

Merchants selling fake cas- 
sett tapes, videos and soft- 
war; had untfi yesterday to 
abic » by the law which says 
they must sell or rent only 
copyrighted products. Goods 
whtffrdo not have proper copy- 
right certificates must be 
destroyed. . 

“Prom the first (of the 
mqhth) onwards we can send 
out inspectors to look for these 
kinds of irregularities.. Tor 
copyright violations,” a Dubai 
Department of Economy offi- 
cial said. 

Penalties include confisca- 
tion of goods, jail terms and 
fines of up to 10,000 dirhams 
($2,700). 

One Ministry of Information 
official said inspectors had 
been sent out to check that 


shops were not setting pirated 
goods but be did not say how 
many were visited. 

The UAE in March became a 
member of the General Agree- 
ment on Tariffs and Trade, 
which has provisions to pre- 
vent the sale and trade of 
counterfeit goods. 

Zt has also came under pres- 
sure from its western trading 
partners to protect trademarks 
and patents. The US estimates 
lost revenue of $156m a year in 
the UAE due to copyright vio- 
lations. 

One video shop worker. Ah 
Haider, said ministry inspec- 
tors visited the shop with a 
warning when the law was pro- 
mulgated in March. Shops 
were given a grace period until 
Thursday. 

“Unfortunately we removed 

all the En glish films f mm tho 

racks and are selling only 
Hin di films," he said, adding 
they were stored in a back 
room but they might be re-ex- 
ported. 


One worker at a major super- 
market in Abu Dhabi said the 
store re-exported more than 
100,000 tapes for which it did 
not awn copyrights. He said 
they were cmrently displaying 
only seven original titles but 
mpre were expected next week. 

“This is the last day you can 
buy the Cake ones.. .at 15 dir- 
hams ($4). The originals are 50 
dirhams ($14),” he said. 

At another branch of the 
same supermarket a supervisor 
said officials cleared the shop 
of 50.000 dirhams ($14,000) 
worth of videos on Wednesday 
in preparation for the new law. 

It is intended to prevent 
unauthorised reproduction of 
works of literature, ait, films, 
video and audio tapes- and soft- 
ware. 

Juma Nabooda, Dubai's 
Chamb er of Commerce presi- 
dent, said in a statement on 
Wednesday that the UAE 
would start implementing Gatt 
articles yesterday to coincide 
with the copyright law. 


Peril of fragmentation 
over free trade pacts 

David Pilling finds a UN economist warning 
Latin America against forming ‘fortresses’ 


a tin America must not 
allow the web of free 
__ trade agreements across 
region to fragment into 
r or five fortresses", but 
lid strive for greater inte- 
:ion. the UN Economic 
■mission for Latin America 
the Caribbean urges, 
[lateral and multilateral 
irds, now numbering more 
1 30, could “merge into one 
it bloc or, on the downside, 
de the region." Mr Gert 
mtiml, commission execu- 
secretary. said in an in ter - 

i well as 22 bilateral 
irds, several sub-regional 
:s have been formed 
ntly, including the tripar- 
North American Free 
ie Agreement of the US, 
ada and Mexico; the Merco- 
customs union of Argen- 
, Brazil. Paraguay and Uni- 
r % and the Group of Three, 
e up of Mexico, Colombia 
Venezuela. 

ocs are also emerging m 
aul America and the Canb- 
1 basin. 

r Rosenthal said there was 
Lngcr that the outbreak of 
t accords was merely re- 
eling trade rather than 
ting it Regional trade had 
vn “spectacularly 
iris within the region have 
•ased at 50 per cent a year 
1 1990 - but it was very 
jolt to pinpoint cause and 
t. 

re don’t know how much 
lie increasing trade] is due 
te existence of preferaitial 
ment. how much us due to 
Indirect effect of &usme® 
m unities becoming aware 
ach other, or how much 
Id have happened anyway 
:h<? absence of a trafle 


What seemed certain was 
that nations on the margins of 
free trade pacts - such as 
Caribbean states in the case of 
Nafta - were likely to lose out, 
both in terms of trade and of 
investment, be said. 

Even Brazil, Latin America’s 
largest economy, had claimed 
that preferential agreements 
within Nafta, particularly 
those pertaining to capital 
goods, had resulted in lost 
trade worth hundreds of mil- 
lions of dollars. 

Multiple pacts had also cre- 
ated an administrative bureau- 
cracy that militated against 
efficient commerce, Mr Rosen- 
thal said. Tariffs on the same 
product could vary enor- 
mously. depending on the 
country of origin and the stage 
of a given treaty, most of 
which phased in preferential 
treatment 

M r Rosenthal was not 
seeking to call a halt 
to the process. 
“What we’re saying is; ‘Why 
don't you proceed with these 
trade agreements in such a 
way as to minimise the risks of 
trade deviation and maximise 
the potential of trade 
creation? 1 " 

Governments could move in 
this direction by standardising 
trade agreements, using Gatt 
rules as their starting point, 
and by broadening the range of 
goods covered by pacts. 
Nations should join existing 
accords rather than form bilat- 
eral alliances. It Is ridiculous - 
that there are 22 bilateral trade 
agreements. We would like to 
see them multilateralised as 
quickly as posable." 

In this respect. Mr Rosenthal 
thought Chile should join 
Nafta, rather than sign a sepa- 


rate accord with the US. He 
also supported Chile's initia- 
tive to become an associate 
member of Mercosur. 

*T would like to see Chile 
taking on both commitments 
simultaneously,” he said. “Con- 
ceptually. they are not saying 
they are going to join Nafta 
but turn their back on the rest 
of the region. They are trying 
to do in practice what we are 
preaching - that is to take on 
multiple commitments." 

On the positive side, Mr 
Rosenthal thought that Latin 
American governments, nearly 
all civilian and democratically 
elected, shared a political 
vision of closer integration. 
“There is a more favourable 
environment for actually doing 
these things. There was a lot 
more rhetoric 10 or 15 years 
ago." 

The concept of integration. 
In the 1960s driven by notions 
of import substitution, has now 
shifted to free-market terrain. 
“Governments are trying to 
rediscover the meaning of 
international integration in a 
more open trading system.” 

But the danger of economic 
fortresses and continental frag- 
mentation still existed. One 
possibility - “not necessarily 
definable” - was that political 
realities in the US would halt 
the expansion of Nafta and 
that Brazil's proposal for a 
South American free-trade area 
would take off. “Maybe, by 
2000, you will have a fairly 
solid regional bloc in South 
America and another in North 
America. 

“It is too early to tell where 
all this will lead," Mr Rosen- 
thal said. “It could have a 
happy ending. On the other 
hand, the ending may be more 
complex." 


AT&T in 
Chinese 
telecom 
project 

AT&T has signed a partnership 
agreement worth $500m over 
five years to help develop 
advanced communications in 
the southern Chinese province 
of Guangdong, Renter reports 
from Hong Kong. 

Under the deal with the 
Guangdong Province Posts and 
Telecommunications Adminis- 
trative Bureau and the Guang- 
dong Machinery Import/Export 
Corporation. AT&T will pro- 
vide network infrastructure 
equipment including advanced 
digital switching, optica] trans- 
mission, wireless and 
operations systems. 

The US telecommunications 
group will also establish a 
technical support centre in 
Guangzhou and will provide 
training for local managers 
and engineers. 

AT&T said it expected to 
receive over $150m in orders 
this year from GPTB for its 
5ESS-2000 switching, synchro- 
nous digital hierarchy trans- 
mission, digital cross-connect 
and operations systems and 
related equipment 

Southern Africa and 
EU plan trade pact 

Foreign ministers of SADC - 
the ll-nation Southern African 
Development Co mmuni ty 
which South Africa joined on 
Monday - will meet their Euro- 
pean Union counterparts in 
Berlin next week to set 
out a formal basis for 
trade and co-operation, the 
German ambassador to South 
Africa, Mr H ans- Chris ti an 
Ueberschaer, said yesterday. 
Renter reports from Cape 
Town. 


Seeking a glass breakthrough 

Michiyo Nakamoto reflects on a US-Japanese trade dispute 


T he warehouse of 
Matsumoto Avante. a 
Japanese glass whole- 
saler based In Tokyo, is not the 
kind of place normally to be 
associated with trade friction 
between the US and Japan. 

Matsumoto is typical of 
small Japanese wholesale busi- 
nesses, employing about 150 
people and trying to make best 
of modest floor space in a 
country where property is 
expensive. Matsumoto, like 
other glass wholesalers. Is the 

intermediary between manu- 
facturer and user. 

The future of such s mall 
wholesalers depends in part on 
the outcome of a US-Japan 
trade dispute over the flat 
glass market, which threatens 
to trigger sanctions against 
Japan and could change the 
way companies such as Matsu- 
moto have done business for 
generations. 

Flat g las s is used mainly in 
the construction and automo- 
bile industries. 

Negotiators from the US and 
Japan faced each other this 
week in an effort to resolve the 
row. It is one of the more 
thorny disputes among several 
which the two sides hope to 
resolve shortly. The US has to 
decide whether or not to start 
procedures under its Super 301 
trade legislation against Japan. 

Prospects for an agreement, 
however, remain «Hm. 

The dispute over gimtu 
has all the ingredients of a 
classic US-Japan trade row. 

The US accuses Japan of 
having a an antl-competitive 
market dominated by a hand- 
ful of large domestic makers. 

It says that there is a convo- 
luted distribution system that 
relies on close relationships 
between businessmen with 
stakes in the industry and oth- 
ers, and that this system 
rnakas the market inaccessible 
to foreign players. 


The Japanese government 
has responded with a promise 
to take action to make 
life easier for outside pro- 
ducers. 

At stake is a market worth 
nearly Y3bn f$30m) In domestic 
sales a year, according to 
Japan's Ministry of Interna- 
tional Trade and Industry. 

The Japanese flat glass mar- 
ket, which has come under 
pressure in the past few years 
during the prolonged reces- 
sion, is dominated by three 
manufacturers - Asahi Glass, 


competitive practices and cre- 
ates a barrier to free market 
forces. It frustrates the ambi- 
tions of foreign makers looking 
to expand their business in 
Japan. The Japanese trade 
ministry counters, saying the 
market is not as closed as it 
might seem. In feet, Japan has 
a small trade deficit with the 
US in flat glass products. 

Manfucturers in Japan, the 
US and the European Union 
produce primarily for their 
domestic markets. 

Last year, Japan imported 


eminent survey of flat glass 
wholesalers, conducted last 
December, found that the 
industry distribution system 
was dominated by sman whole- 
salers which have limited 
warehouse and glass-cutting 
capacity, and little interest in 
handling foreign-made glass. 
The wholesalers said they 
found foreign imports uncom- 
petitive in quality, delivery 
times and product reliability. 

“We buy foreign product." 

said a representative or Matsu- 
moto Avante, “but we do so to 


Trade In flat glass 

Trilateral balances (exports aa % of total domeshc production. 1991) 


Domestic 96.7% 

Japan 


Exports to 

Japan 0.6% 


rxjLz 

... 

Exports to 
Japan 1 . 1 % 

LB 0.6% 

Other 35% 

- 

1 

Exports to 
EU 0.1% 


EU 2.9% 
Other 5.7% 



USQ.7% 
Other as% 










Source: Md 


Central Glass and Nippon 
Sheet Glass. 

Asahi. which belongs to the 
Mitsubishi group, is 4.9 per 
cent owned by Mitsubishi 
Bank and 4.7 per cent by Mit- 
subishi Trust. Nippon Sheet 
Glass, a member of the Sumi- 
tomo group of companies, is 6.6 
per cent owned by Sumitomo 
Trust, 5.4 per cent by Sumi- 
tomo Life Insurance and 4.9 
per cent by Sumitomo Bank. 
Central Glass, meanwhile, has 
dose relations with the Mitsui 
group, with more than 11 per 
cent of its shares owned by 
Mitsui-related companies. 

The US claims that a 
dose-knit group controlling a 
significant market breeds anti- 


Y5bn worth of flat glass from 
the US while it exported only 
Yl.6bn in return. The amount 
of flat glass per capita that is 
imported into Japan is 1.5 
times higher in Japan than in 
the US. Foreign glass 
accounted for 12L8 per cent of 
Japan’s overall glass consump- 
tion in 1991, compared with 4£ 
per cent in the US market, and 
17.4 per cent in the EU. 

The trade ministry also 
objects to claims of anti- 
competitive activity, citing an 
investigation by the Japanese 
Fair Trade Commission in 
June last year which, it says, 
found no evidence of breach of 
anti-monopoly laws. 

A more recent Japanese gov- 


keep it in stock. We can't use it 
for specific contracts because 
delivery times are too long.” 

Foreign companies have to 
make an effort if they want to 
increase penetration of the 
Japanese market, Miti says. 

The US companies looking to 
increase their share of the mar- 
ket have only a handful of rep- 
resentatives in Japan, says one 
Miti official. If they can get the 
kind of market share they 
already have with so little mar- 
keting effort, they must con- 
sider themselves to be doing 
very well But if they want to 
compete with Japanese sales 
forces numbered in the thou- 
sands, they have to try harder, 
he says. 



If the 

rainforests are 
being destroyed 
the rate of thousands of 
trees a minute, how can planting 
just a handful of seedlings make a difference? 

A WWF - World Wide Fund For Nature tree 
nursery addresses some of the problems facing people 
that can force them to chop down trees. 

Where hunger or poverty is the underlying cause 
of deforestation, we can provide fruit trees. 

The villagers of Mugunga, Zaire, for example, eat 
papaya and mangoes from WWF trees. And rather than 
having to sell timber to buy other food, they can now 
sell the surplus fruit their nursery produces. 

Where trees arc chopped down for firewood, 
WWF and the local people can protect them by planting 
last- growing varieties to form a renewable fuel source. 

This is particularly valuable in the Impenetrable 
Forest, Uganda, where indigenous hardwoods take 
two hundred years to mature. The Markhamia lotca 
trees planted by WWF and local villages can be 
harvested within five or six years of planting. 

Where trees arc chopped down to be used for 
construction, as in Panama and Pakistan, we supply 
other species that arc fast-growing and easily replaced. 

These tree nurseries arc just part of the work we 
do with the people of the tropical forests. 

WWF sponsors students from developing countries 
on an agroforestry course at UPAZ University in 
Costa Rica, where WWF provides technical advice on 
growing vegetable and grain crops. 


Unless 
is given, 
soil is exhausted 
very quickly by “slash 
and burn” farming methods. 
New tracts of tropical forest would then have 
to be cleared every two or three years. 

This unnecessary destruction can be prevented by 
combining modern techniques with traditional 
practices so that the same plot of land can be used to 
produce crops over and over again. 

In La Planada, Colombia, our experimental farm 
demonstrates how these techniques can be used to 
grow a family's food on a small four hectare plot. 
(Instead of clearing the usual ten hectares of forest.) 

WWF fieldworkers are now involved in over 100 
tropical forest projects in 45 countries around the world. 

The idea behind all of this work is that the use of 
natural resources should be sustainable. 

WWF is calling for the rate of deforestation in the 
tropics to be halved by 1995, and for there to be no 
net deforestation by the end of the century. 

Write to the Membership Officer at the address 
below ro find out how you can help us ensure that 
this generation does not continue to steal nature’s 
capital from the next. It could be with a donation, 
or, appropriately enough, a legacy. 


to 


WWF Vtorid Wide Fund For Nature 

(formerly World Wildlife Fund) 

International Secretariat, 1196 Gland, Switzerland. 


FOR THE SAKE OF THE CHILDREN 

WE GAVE THEM A NURSERY. 
















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FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


= UK 


-r* , M • , • Britain in brief 

Recovery curbs financial earnings 


p 


By Phffip Coggan, 
Economics Correspondent 


Britain's economic recovery had an 
unexpected side effect last year - it 
reduced overseas earnings from the 
financial services sector. 

Overseas earnings from activities 
such as banking, insurance and share 
ri waling fell to £i5.6bn in 1998 from 
ne.lbn in 1992, according to figures 
released by British Invisibles, a trade 
group. 

The iw?ifn reason for Hip fan was an 
improved performance by overseas 
banks based in London. During the 
recession, bad debt problems caused 
many banks based in the UK to record 
losses, which count as a positive item 


in Britain’s accounts. In 1993, economic 
recovery in Britain meant bad debt 
problems were reduced. Along with 
improved profits from securities deal- 
ing, this meant overseas banks could 
report and remit surpluses to parent 
companies. These count as a negative 
item on Britain’s accounts. 

The result was that the UK’s income 
from direct investment, which recorded 
a surplus- of £L14bn in 1992, registered a 
deficit of £i Affhn in 1993. 

The decline in earnings from direct 
investment was partly offset by two 
improvements in the ffaanriat services 
accounts. Strong capital markets Tnaant 
net overseas earnings of UK securities 
dealers rose to £3.47bn in 1993, from 
£2£3bn in 1992. 


Secondly, underwriting at Lloyd’s of 
London, the insurance market, having 
recorded losses in 1990-3992, managed a . 
gmaTT £76m surplus in 199? Such fig- 
ures for Lloyd’s are calculated on a 
cashflo w basis, rather than rm the tradi- 
tional hagfa, under which results are 
not announced for three years. 

British Invisibles splits the overall 
figures for ffaanriai services earnings 
into two components: services (includ- 
ing fees, commissions, inmnnM and 
i fliar a riftfllnig profits); vriit 
income (including portfolio investment 
by pension funds and direct invest- 
ment). 

While net earnings from services 
increased from £8.35bn in 1992 to 
£9J36bn In 1993, earnings from invest- 


ment Ml bum £7.72bn to £6J242m over 
the same period. 

• Meanwhile, the patchy nature of 
Britain's recovery In consumer senti- 
ment in the aftermath of April’s tax 
increases was hi ghlig hted yesterday. 

New credit data showed lending in 
the retail new car loans sector 
weaker than expected in July, while 
homo inure mi hurt sharply compared 
to a year ago. - 

limiting in finance bouses remained 
relatively strong suggesting that con- 
sumers took advantage of heavy dis- 
counting in the summer sales. 

The report, fay TnfoKnk, the indepen- 
dent credit group, showed credit in the 
retail sector 6.7 per cent higher in July 
than in July 1993. 


Man held in 
shooting of 
accountant 


Progress over 
fifth television 
channel for UK 


Names rap Lloyd’s figures 


By Richard tapper 


By Raymond Snoddy 


Britain's Independent 
Television Commission hopes 
to announce within the next 
two weeks the go ahead for a 
fifth national TV cbanneL 

The finaT decision has to be 
taken by the members of the 
Commission but there are 
growing signs that the new 
channel is likely to go ahead 
and that, at least in theory, 
coverage could go as high as 70 
per cent of the UK population. 

If the ITC decides to go 
ahead, the new channel would 
be advertised in November 
with bids expected to be sub- 
mitted within two or three 
months. A similar period 
would then be needed to look 
at the plans submitted and 
choose a winner by April or 
May 1996. 

The mam work now being 
undertaken by the Commission 
is to try to win pennission to 
use more frequencies for the . 
• riitanfifiT to talcp it' beyond a ' 
minimu m guaranteed coverage 
«f around 52 per cent of- the 
population. 

There seems to be growing 
Interest, In bidding for the 
channel, particularly from the 
US and. Canada, even though 


Iraq arms 
inquiry 
report is 
delayed 


By John Mason, 

Law Courts Correspondent 



The publl cation of Lord 
Justice Scott’s report into the 
sale of defence equipment to 
Iraq has been delayed until 
early next year, it was 
announced yesterday. 

The need to gather and 
assess additional evidence has 
meant the postponing of the 
report's release, originally 
scheduled for this autumn, a 
statement from the inquiry 
team said yesterday. 

Lord Justice Scott has also 
decided to question two wit- 
nesses from the Secret intem- 
gence Service or MB, it was 
disclosed. 

One of the witnesses Is a 
serving HI6 officer, the other 
a former officer with the ser- 
vice. The judge's decision to 
question them face to face fol- 
lows extensive recent requests 
to both witnesses to supply 
further written evidence. 

These requests followed evi- 
dence given to the inquiry by 
other witnesses about the role 
played by MI6 when defence- 
related equipment was 
exported to Iraq. 

The two witnesses will be 
questioned about M16’s 
involvement in the consider- 
ation of granting export 
licences for defence equipment 
- in particular those awarded 
to Matrix Churchill, the Mid- 
lands engineering company, 
for the export of “dual-nse” 
machine tools. 

The two MI6 witnesses will 
give evidence in closed ses- 
sions later -this month. The 
exact dates have not been 
released "for reasons of 
national security and for the 
personal safety of the officers 
concerned”, said the state- 
ment 

Inquiry secretary Mr Chris- 
topher Muttnkumarn said: 
"Lord Justice Scott has 
already written a large part of 
the report and continues to 
write while the investigative 
work goes on. 

“Bequests for evidence and 
for information are still being 
sent out The need to gather 
and assess additional evidence 
has inevitably extended the 

timrtahk. 

The judge hopes to have 
completed tbe draft by the ad 
of the year and he wfll then 
give witnesses whom he pro- 
poses to criticise an opportu- 
nity to comment before the 
report is finalised.” 


some of tbe potentially avail- 
able frequencies have been 
reserved for the future develop- 
ment of digital terrestrial tele- 
vision in the UK As well as 

iarninhing a fifth flhannpl using 

existing technology 12 new dig- 
ital terrestrial channels would 
be feasible. 

The ETC is now believed to 
be looking at having bidders 
present business plans cover- 
ing the main possibilities — 
around SO per cent coverage. 60 
per cent and 70 per cent cover- 
age. This will enable the work 
on the channel to go ahead 
while the ITC seeks permission 
to use the nwriminn number 
of frequencies. This involves 
getting permission from neigh- 
bouring governments, particu- 
larly the Irish Government 

A winner could be chosen 
but the licence not actually 
awarded until the maTiwuim 
possible coverage is known. 

Those who have expressed 
interest in the channel range - 
from NBC, and other US net- 
works to Mr Richard Branson’s 
Virgin Group and a consortium 
bringing together Time Warner 
of the US, MAI the UK televi- 
sion and financial sjjryiqes 
group and Pearson, owners of 
the Financial Times . I 


Lloyd's of London has come 
under fire from a previously 
supportive group of Names for 
allegedly overstating tbe prob- 
lems at TTiCTiranw* market 
The Association of Lloyd’s 
Members claims in its newslet- 
ter, published today, that 
Lloyd's solvency rules “appear 
to exaggerate solvency defi- 
ciencies and minimise allow- 
ances for potential profits”. 

Solvency rules govern the 
amount of capital which 
Names, the individuals whose 
assets support Lloyd’s, must 
deposit with the market 
The association says Lloyd’s 
could be double-counting up to 
£2 bn in losses from rfaimg on 


errors and omissions policies 
(which cover agents against 
TMgtiflgn«» awards) and catasr 
trophe reinsurance, and sug- 
gests Names are being asked 
unnecessarily for the money. 

“These anomalies will pre- 
vat otherwise solvent Names 
from continuing to under- 
write . . and alarm unnecessar- 
ily Names who have ceased to 
trade. In part they represent 
fictitious losses which, do not 
exist and will never have to be 
paid,” says an article beaded 
“Lloyd’s £2bn solvency anom- 
aly." 

Mr David Howland, Lloyd's 
chaimmn, rejected the allega- 
tion, saying it mis-states tbe 
true position and holds ont 
false hopes to many members. 


Separately, Lloyd’s said it 
expected gross premium 
income to rise to £8.72bn in 
1994 from £8.61bn last year, 
according to information in its 
first quarterly business report 

Meanwhile Lloyd's is to re- 
enter the export credit insur- 
ance market after an absence 
of over 70 years. Syndicate 33, 
managed byHlscox, a promi- 
nent agent, - ..yesterday 
announced that it is to lead a 
new insurance facility through 
the Lloyd's market which will 
offer short-term cover against 
the insolvency or default of 
trade debtors. 

Insurers at -Lloyd's have 
been barred from underwriting 
risk for the private-sector mar- 
ket since the earty 1920s. 


British Gas restraint lifted 


By Robert Cankn 


British Gas was freed 
yesterday from regulatory 
restraints which have allowed 
its competitors to carve out an 
84 per cent share of the lucra- 
tive. £L3hn a year market for 
large industrial customers. . 

Olgas, the gasindratry regu- 
latar, (tedded to "suspend the 
requirement that British Gas 
sell to large- industrial and 
commercial Customers -uSing 
25,000 therms a year or more 
according to pubHahg<Lnon- 
discriminatory price sdheafttes. 

The suspension .will run for 


six months from October 1, 
during winch-time Ofgas will 
review the entire gas contract 
market above 2^00 therms. 

The requirement lifted yes- 
terday was imposed in 1989 as 
part of the government’s 
efforts to introduce competi- 
tion into the gas piariraL Inde- 
pendent gas comwBHe^p«rt- 
ing with Tninjmar mmrKjSrtR 
and using British Gas pipe- 
lines, were qutetaty^ble^to 
carve out a targd'Sharket sBafe 

fay flflWiTig imiy wi nfai of 10 PUT 
cent-20 per cent faetow tjreTtejt- 
ish Gas prices, safif 'n® 
suspension depended upon 


British Gas mafafrairtfag - a 
“non-discriminatory” pricing 
policy. It said evidence of the 
company selling gas. at 
“broadly below cod,” or using 
predatory priding to regain 
market share could see a reim- 
position of price schedules. 

Mr Norman Ellis, managing 
director of. Kjnetiea, a joint 
venture " befwefen rowerGen 
and the US ail company Con- 
oco, sa$d Ofgas was “short- 
slghted^’ ^^now British Gas 
to compete freely in the firm 
commercial marketyriiile inde- 
pendents afe‘ Still Ttidrred from 
the residential nmrtrfi 


One man was being hdd in 
Istanbul prison yesterday and 
an arrest warrant bad been 
issued for two others in 
wmtwrfton with the shooting 1 
last month of a UK. acc o u n t an t 
working for Coopers & 
Lyhrand, the court appointed 
arf ml iifa fa- a far g at Polly Peek 
International, the UK fruit to ■ 
electronics group. 

Mam Ebna was being hdd 
at Bayrampasa prison under a 
court order pending trial 
related to the shooting of Mr 
Davld Adams, who received 
five gunshot wounds to the 
leg. I 

Mr Ehna, 21, reportedly told 
police he had mistaken Mr i: - 
Adams for Mr Chris HoweDa 
the accountant directly p 

involved in trying to record? 1 
the local PPI assets no w in j . 
dispute with the former PPl- - 
chairman Mr Asfi Nadir, j 
Last night, lawyers winking 
for .the administrators had flfil 
to be provided with copies ol 
the court proceedings. But $ . 
local newspapers reported Bit 
Bm and two others had Mbit 
Offered TL250m (£5,000) aM} 
shares hi Vestel Etectrabfa,. ~ 
PPTs listed Istanbul cmssdK 
electronics subsidiary, to jl 
shoot the Coopers accounniut- 
MrEhnaissald tohavej, - 
confessed to the . attack afliar 
being apprehended to thejact ' 
a! another shooting; according 
to the newspaper reports! 


Competition cuts cost of calls 


BT is being forced to limi t, its 
prices, writes Andrew Adonis 






I t is not just British 
Telecommunications hype: 
the telephone really is 
getting steadily cheaper to use, 
particularly for business 
callers who clock up 
longdistance and tntaypflHrmal 
minutes. And prices are set to 
fall Anther as regulation and 
competition continue to bite. 

This week's price cuts from 
BT mean that UK long-distance 
calls are barely a third of the 
cost a decade ago, allowing for 
Inflation. From the end of this 
month a three-minute weekday 
morning call from London to 
Hereford will cost 30p. In- 
January this year it was Sip. 

Not all prices have come 
down. Line rental charges have 
risen by 10 per cent in real 
terms over the past decade, 
and will continue rising. Oftel, 
the telecoms regulator, 
supports ST'S efforts to reduce 
its deficit on ma tnfarnrng basic 
line connections. 

But it has forced the 
company to bring Its call 
charges down sharply, 
reflecting the falling cost of 
delivering calls as new 
technology slashes overheads. 

Oftel’s price cap obliges BT 
to reduce its total charges by 
7.5 per cent a year, once an 
increase for inflation has been 
allowed for. 

In round figures that equals 
price cots worth £500m, with 
£100m recouped from a 2 per 
cent real-terms increase in line 
rental charges. FT is free to 
target the cuts as it chooses. 

Mr Michael Hepher, BT’s 
managing director, says three 
factors determine its 
price-cutting strategy. Ideally, 
cuts will stimulate usage; they 
ought to give BT “the most 
favourable stance g gafre* the 
competition”; and they should 


“do something to sparkle tbe 
imagination”. 

The abolition of the morning 
peak rate earlier this year met 
the last two criteria. This 
week’s abolition of the higher 
longdistance rate, at a cost of 
£244m over a full year, was 
firmly directed at the first and 
second - particularly at 
competition in the business 
market 

Mercury, BT’s main 
competitor, has a quarter of 
the large business market and 
about two-thirds of the (Sty of 
London's outgoing traffic. But 
it Is increasingly hampered by 
BT’s falling prices on one 
hand, and by new entrants 
pursuing Its larger customers 
on tbe other. 

The price gap between BT 
and Mercury is steadily 
narrowing in the business 
market (see graph). For many 
large businesses the saving is 
down to 6 per cent or less for 
UK traffic. 

Mr Terry Rhodes, Mercury's 
competition director, says his 
company has to break out of 
the “BT-but-cheaper" 
syndrome. He believes the 
message still has strong appeal 
to small and medium-sized 
businesses - those with annual 
telecoms bills under £150,000. 

Bat Mercury’s efforts are 
shifting to building “brand 
loyalty” through added-value 
business services such as 
network wianagninewt anil 
improved data telecoms ifafr*- 

A host of new operators has 
moved into tbe City, the UK’s 
telecoms honeypot, and 
targetting Mercury first and 
foremost 

The most successful to data 
appears to be WorldCom, a US 
group which set up in London 
in 199L WorldCom re-sells 


ABB to shed v;:.' 
johs; In York I* 

ABB Transportation's Toro .: 

t rain . and trflnvh nflrttng w rrkn : 

istoshed28&jpbfj I tJi0- 
company said yesterday. 1. 

The redundancies follows ^ 
shortage (rf-ordfirsat th© plfct, . 
which has ift wcSkb^ond .. 
October next year. 

ARB Tran sporta tion, part tf -- 
Asea BrowffBSmt^d it 
could see a longterm, future : * ' 
but was faring a short-term 
crisis. Mr Bo SMersten, 

managing director and chief; 
executive, said it was essential 
that new orders were won , 
quickly. 

Mr Ml Beaman, the plant’d 
engineering and electrical . 
union convenor, said 
redundancies had been 
expected, but not so many. . • 

ABB said it was chasing 1 

orders under the government's ■ 
private finance initiative. 1 



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Euro-post for 
Labour chief 


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international lines to big 
business at a discount. It 
boasts 250 business customers, 
and nbrimK to have cornered 
nearly 3 per cent of the UK's 
outgoing international 
telecoms traffic. “Onr 
marketing is based on 10 to 15 
per cent off Mercury’s best 
business price,” says Mr David 
Hardwick; managing director. 

WorldCom is also about to 
enter the small and 

mwlim i MaM h ush-mss market, 

and plans to offer & 
long-distance UK service in 
addition to its international 
service, inter-connecting to 
existing ' long-distance 
networks. 

MFS, another US group, is 
already active in the UK 
long-distance business. 
Tjnwrha ri fa March this year, 
MFS offers free line rental to 
customers with usage bills of 


£600 or more per line per year. 
Its fibre network covers most 
of the City and Docklands, and 
is being built out to Southwark 
and Westminster. 

Tbe company is considering 
a plan to extend tbe network to 
the Thames Valley, putting 
MFS within reach of 35 per 
emit of the UK’s large telecoms 
users. 

Long-distance telecoms 
capac ity is now abundant, 
giving plenty of scope for 
re-sellers to expand. In 
addition to BT and Mercury, 
Energis, a subsidiary of the 
National Grid which has 
erected a long-distance 
network on electricity pylons, 
is opening for business. The 
regional electricity companies 
covering Yorkshire and 
Manchester are building then- 
own networks, and targeting 
business users. 


Mr Tony Blair, leader of 
Britain’s opposition Labour 
party, yesterday announced ; 
that he is to replace the 
party's long-standing general 
secretary Mr Larry Whitiy. 

Mr WMtty, who has held the 
post for nine years, will be 
moved to the newly-created 
position of European 

Coordinator with 
responsibility for liaising with 
the party’s Euro-MPs. 

The appointment will give , 
Mr Blair tbe opportunity to 
get a candidate of Iris choice * 
installed as head of the party’s 
orga n isation as part of a wider 
shake-up at the party’s 
Walworth Hoad headquarters. 


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NiS.: -- 


BA staff in 
strike vote 


a?*- .... 


British Airways cahm crew in 

Manchestflir and Tyjr rnfnghnm 

have voted for strike action, in 
a dispute over holidays and 
allowances. 

Three-quarters of the 565 
ca hm c rew members of the 
TGWP transport union 
returned their papers In the 
ballot Of those. 88 per cent 
supported strike action. 
Meetings are to be held early 
next week to try to resolve the 
dispute. 

Meanwhile talks are 

Continuing fn an to 

resolve a pay dispute at 
Britannia Airways. 


j/'S I- , 


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tavourabie stance against the group which set up in London MFS offers free line rental to own networks, and targeting resolve a pay dispute at 
competition”; and they should In 199L WorldCom re-sells customers with usage bills of business uses. I Britannia Airways. 

Littlewoods sign £14m deal for FA Cup 

By Nefl Buckley "FA Cup, sponsored by Littlewoods". Mr Trevor Philips, the FA’s commer- Littlewoods Pools’ move is partly 


Vpat.;; • 

■ !■ ■ - - 

few.: 






Littlewoods Pools yesterday became the 
first sponsor of the 123-year old En glish 
Football Association Cup, In a deal 
worth £L4m. 

Togetber with investment in support 
activities, littlewoods is committing a 
total of £2Qm over four years - the Wg- 
gest-ever sports ^onstnohip package, ft 
will have its name attached not only to 
the prestigious FA Cup. but to the FA 
Charity Shield - for which the previous 
season’s cup winners and league cham- 
pions play at the start of each season. 

The FA Cup will not be renamed after 
the company, but will be known as the 


"FA Cup, sponsored by Littlewoods”. 
The Charity Shield trill be known as 
the "Littlewoods Pools FA Charity 
Shield’’. 

The FA launched a marketing pro- 
gramme in June cnmhfafag the com- 
mercial rights of the FA a-nd Wembley 
Stadium, called Total FootbalL This 
consisting of a number of sponsorship 
pa c ka g es, capable of accommodating up 
to 12 companies. 

Companies joining tii<* programme 
were given, the opportunity to upgrade 
their package to become “presenting 
sponsor” of the FA Cup. Hie FA 
selected Littlewoods as tbs “ideal candi- 
date”. 


Mr Trevor Philips, the FA’s commer- 
cial director, said the decision. to seek 
sponsorship of the cop “was not taken 

"It would only have happened with 
the right company, I cannot think of a 
company that is a more integral part of 
football, and certainly none has made a 
great er financial contribution.” 

littlewoods, the family -owned foot- 
ball pools and retailing business, has 
previously sponsored the League Cqp, 
now sponsored by Coca-Cola. 

Mr Barry Dale, Littlewoods group 
chief executive, said there was a “clear 
and mutually beneficial link 9 between 
Littlewoods and football 


littlewoods Pools' move is partly .an 
attempt to bolster its position in the 
face of competition from the National. 
Lottery, due to be launched later this 
year. 

- “Sponsoring the Cop win pnahto m to 
h arness the benefits of our overall 
investments in football in promoting 
our business in these more competitive 
times," Mr Dale said. 

The deal is also a boost for the FA, 
whose finances have been strained by 
England's failure to qualify for this 
year’s World Cup ffaai^ two years 
withou t competitive rnafahgg before 
hosting the 1996 European Champion- 
ship. 






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FINANCIAL TIMJES FRIDAY SEPTEMBER 2 1 994 


NEWS: ULSTER 


Business hopes for up to 30,000 jobs 


ByTton Coone in Diftffin 

TJie IEA ceasefire has injected a mood 
or cautious optimism into Northern 
Irelands business community, but 
has also triggered warnings that eco- 
fibmic support to the province must 
be maintained to underpin the hoped- 
for peace. 

Business leaders and economists in 
Beuast estimate that a lasting peace 
could bring between 15^XX) and 30.000 
new jobs to the province over the next 
five years, but this would be partially 
offset by job losses in security-related 
employment 

’One other benefit from a peace set- 
tlement, mentioned, by a number of 
business executives yesterday, would 
be that companies would find it easier 
to attract senior managers to the 
province. 

Mr Nigel Smyth, the director of the 
Confederation of British Industry 
{Northern Ireland), said If the cease- 
fire proved to be permanent, “there 


will be a lot of business opportunities 

in the mortriim and long term". 

He thought job growth through 
inward investment would quadruple, 
from about 500 per year to 2fl00 over a 
two- to- three-year period, while an 
additional 10,000 jobs could be created 
in the tourist industry. 

“On a per capita basis, tourist 
numbers hare are presently a third 
of those In the republic and a 
quarter of those in Scotland,” he 
said. 

Mr Michael Smyth, an economist at 
the University of Ulster at Jardaxt- 
stowu, said the CBI figures erred on 

the conservative side. Tourism con- 
tributes L5 per cent to GDP in the 
province, compared with 7 per cent in 
the republic, so catching up with the 
south could create 20,000-30,000 tour- 
ism jobs in Northern Ireland. Unem- 
ployment is currently 98,000 - 13.1 per 
cent of the workforce. 

Stena Sealink. one of the main ferry 
operators across the Irish Sea to Bel- 


Economy 


fast and Lame, said interest in 
Ireland as a holiday destination had 
grown, "but interest is weighted very 
much towards the south because of 
the troubles in the north. Clearly, a 
permanent end to the violence would 
do no end of good." 

The CBI said a climate of peace 
would allow manufacturing and ser- 
vice companies to focus their market- 
ing an quality production. Mr Nigel 
Smyth said Northern Ireland busi- 
nesses had one of the best records In 
Europe for quality awards, but that 
had been overshadowed by the prov- 
ince’s image problem. 

The downside of the peace win be 
the inevitable cuts in the security 
forces and security-related industries. 
Reductions in policing levels and the 
prison population, and eased security 
in shops, offices and factories will 
mean less overtime, job losses, and 
less money going into the «»winfimy - 


the loss could be as much as ESOOm to 
£400m per year. 

The more pessimistic forecasts 
envisage job losses in the region of 

20.000, a figure calculated by Dr Gra- 
ham Gudgin of the Northern Ireland 
Economic Research Council. He said 
that over four to live years the prov- 
ince's economy “will be lucky to 
break even on jobs". Mr Smyth of 
UUJ said the number of job losses was 
more likely to be around 10,000 to 

12.000. but be admitted there could be 
further indirect losses. 

Mr Michael Smyth said the transi- 
tion to a peacetime economy would 
have to be managed very carefully. 
The government would be “extremely 
foolish if it were to send any savings 
it made through an end to the vio- 
lence straight back to the Treasury. 
Otherwise you could see a rise 
in unemployment rather than a 
falL” 

The CBI says any security-related 
savings and exchequer benefits 


achieved through economic growth 
“should be redirected towards wealth 
Creation and tr aining ". 

The Department of Economic Devel- 
opment in Belfast acknowledged that 
there was a danger of short-term job 
losses. "But any change will not be a 
jolt but gradual, and will be haianrpd 


by new jobs over a period. The eco- 
nomic development budget is very 
substantial at £40Qm and is expected 
to remain that way ” 

It said the Treasury would decide 
whether additional resources through 
savings on security could be redi- 
rected towards economic develop- 
ment 

Mr Clem Parkes, chief executive of 
CV Carpets which is based in the 
north-east of the province, said: “It is 
always difficult to get managers and 
specialists that we cannot find here to 
relocate Cram Britain. Tbat will 
become much easier. And our experi- 
ence is that when we do get th*m 
here they don't want to leave.” 



Republicans celebrate the start of the IRA ceasefire after midnight yesterday on the streets of west Belfast Their banner tells British troops to 'Get out of my sight 1 


Siege mentality 
takes a grip 
on Protestants 


By WBflam Lewis 

Hoarding of goods had begun 
on the Shanki ll Road yester- 
day. Shops said that candles, 
gas lighters and basic foods 
were in demand all day as 
many Protestants made provi- 
sion for a breakdown in law 
mid order. 

"The siege mentality is tak- 
ing hold down here,” one shop- 
keeper said. Tm calling ft the 
peace dividend.” 

Fear was evident yesterday 
in the S hankffl Road and other 
working-class unionist strong- 
holds - fear that the ptA 
ceasefire followed concessions 
made by the British, govern- 
ment and fear that the IRA 
will not hand over its guns, 
enabling the violence to con- 
tinue. 

The talk along the Sha nk ill 
yesterday was of a civil war in 
Ulster being “the obvious out- 
come” If the British govern- 
ment has traded in the union- 
ist veto for the IRA ceasefire. 

"People have reacted very 
badly.” said Mr Bob Stoker, an 
Ulster Unionist party activist 
who lives near Sandy Row, 
another Protestant area. 

“They have not taken it 
calmly at alL There has been a 
great run on food stores and 
people have sold out of gas 
cookers, candles and paraffin 
lamps,” he said. 

“People are prepared to wait 
and see for a short while but 
while they do so they are get- 
ting prepared," Mr Stoker said. 
“Ordinary people down here 
will not be put in a situation 
where they can be starved into 
defeat.” 

Tension in Protestant areas 
of inner-city Belfast was heigh- 
tened following a raid by the 
Royal Ulster Constabulary on 
two houses last night Accord- 
ing to the Rev Eric Smyth, a 
councillor for the hardline 
Democratic Unionist party* 
police smashed down the do« 
of one house in spite of it bemg 

empty* - , 

"Tempera ore^vety- high at 
the moment, he j saw. to 
feeling is very bad- 

said concerns develwed after 

part of yesterday s.SinnFein 

celebration P’^cssion i^y- 
tag more than 50 care, taunted 
and threw sticks at children 
playing in a Protestant area 


Loyalists 


near to the Catholic Falls 
Road. 

Suspicion is also rife. The 
Rev Brian Moore, minister at 
the West Kirk Presbyterian 
church on the S hankfli Road, 
talked of disaster if conces- 
sions had been made by the 
British government 

"If that does emerge then 
that’s another ball game alto- 
gether,” he said. “That would 
be a very serious situation 
which we would find very diffi- 
cult to control.” 

"We have longed for peace. 
But I suppose there is a suspi- 
cion in tiie community that 
there may be a hidden agenda 
with the government and the 
IRA, that a deal has been 
done." Mr Moore said there 
was "disillusionment with our 
political representatives,” but 
“hopes loyalist paramilitaries 
will assist the peace process”. 

Mr David Ervine, a leading 
member of the Progressive 
Unionist party, which is 
thought to have insight into 
the UVF, the loyalist para- 
military organisation, thinks 
that it will aid the peace pro- 
cess - but only when it is clear 
no deal has been done. 

"If the government can 
assuage the fears of unionists I 
would expect an immediate 
response,” he said. He believes 
this would involve a ceasefire 
announcement by the main 
loyalist terrorist groups. "If 
assurances are given the loyal- 
ist weapons will be laid down, 
and laid down quickly,” Mr 
Ervine said. 

Other unionists were willing 
to look on the bright ride. Mr 
Michael McGimpsey, an Ulster 
Unionist party councillor in 
Belfast, believed assurances 
from the British government 
that no deals had been 
done. 

Mr McGimpsey believed that 
Hip ml de sac argument may be 
the real reason the IRA called 
a ceasefire. “They may finally 
have realised that their tactics 
were not getting them any- 
where,” he said. 

But he also warned: "If peo- 
ple believe the IRA have 
stopped because they have 
got something then we are 
in for very difficult 
time." 


Bomb targets warned 
not to drop their guard 


By Richard Lapper 

Insurers, hit by heavy claims 
from the IRA’s mainland 
bombing campaign, yesterday 
welcomed this week’s ceasefire 
but insisted that new arrange- 
ments for terrorism insurance 
and security precautions 
shoul d remain in place. 

Insurers have been hardest 
hit by the two IRA bombs in 
the City. Claims from the Bal- 
tic exchange bomb in April 
1992 amounted to £300m, 
including about £100m for 
interruption to business. 
Claims from the Bishopsgate 
bomb, a year later, totalled 
£5002n, with about £150m for 
business interruption. 

Losses from other smaller 


Insurers 


bombs amount to less than 
£10m, said Mr Tony Baker, dep- 
uty director-general of the 
Association of British Insurers. 

In Northern Ireland the gov- 
ernment has paid more than 
£620m since the late 1960s to 
compensate property owners 
for damage. Losses rose to 
£50m in 1976-77 before falling 
steadily to £L5m in 198667, but 
the bill in 1991-92 was £33m. 

After the London bombs, 
insurers withdrew cover for 
terrorism from standard com- 
mercial policies. It is offered as 
a separate policy, with insur- 
ance companies covering their 
own exposures through Pool 
Re, a company owned by the 


insurance industry and backed 
by the government 

The decision by Pool Re to 
charge more to businesses in 
central London and other areas 
judged to be terrorist targets 
than those in less vulnerable 
areas caused considerable con- 
troversy. 

Mr Baker said these prob- 
lems had been overcome by 
insurers reducing some expen- 
sive premiums in return for 
the installation or adoption of 
security precautions. Mr Baker 
said chang es were not likely 
for at least a year. 

Mr Baker argued for the 
maintenance of security, such 
as the restrictions of traffic in 
the City, and said there had to 
be a degree of caution. 


Media curbs 


Sinn Fein 
voice ban 
may soon 
be lifted 

By David Owen 

There were growing signs at 
Westminster yesterday that 
the gover nm ent could sanction 
an early lifting of the broad- 
casting ban on the voices of 
Sinn Fflta representatives if it 
was convinced the IRA had 
ended violence for good. 

As both leading opposition 
parties said they would wel- 
come tiie lifting of restrictions, 
Mr Michael Mates, a framer 
Northern Ireland minister, 
indicated that he too thought 
an ending of the ban would be 
helpful. 

Mr Mates, Tory MP for 
Hampshire East, said he 
thought the move would be 
“high on the list” after 
the announcement of a perma- 
nent cessation of IRA 
violence. 

The only reason the voices 
of Sinn F£in, the IRA’s politi- 
cal wing, were hnmu»H from 
the airwaves was because they 
supported violence, Mr Mates 
said. “If there is no violence, 
that stricture goes away.” 
Removing the ban was “a rela- 
tively simple tiling the govern- 
ment could do relatively soon 
- bat I think we will want one 
or two signs yet" 

Sir Patrick Mayhew, the 
Northern Ireland secretary, is 
one of a number of cabinet 
ministers known to favour an 
end to the ban on the grounds 
that it has become counter- 
productive and tends to expose 
the government to criticism. 

But there are fears that such 
a move, if not handled sensi- 
tively, could provoke anger 
among unionists an d unionist 
sympathisers cm the Tory back 
benches. 

One prominent unionist sup- 
porter said yesterday that he 
did not thhifc lifting tiw» ban 
would provoke a strong reac- 
tion under the circumstances 
now prevailing. 

But Mr David Trimble, the 
Ulster Unionist MP for Upper 
Bann, indicated that he did 
not think the time for lifting 
the ban had arrived. 


Peace is still not guaranteed 


By Michael Cassell 

Renewed threats of civil war 
made by Ulster’s loyalist para- 
militaries provide a grim 
reminder that an end to vio- 
lence by the IRA gives no guar- 
antee of peace in the province. 

For, though the loyalists say 
they also want an end to 25 
years of bloodshed, they 
believe that almost any deal on 
Ulster’s future acceptable to 
republicans must undermine 
union interests. 

. Those Interests, they warn, 
will be defended with a deter 

mi nat ion and militar y s kill 

equal to anything shown by 
the IRA over the past 25 years. 

Those Hahnc may be exag- 
gerated, but their ultimate 
potential to wage war will 
depend on the wriant of sop. 
port from a loyalist community 
feeling increasingly cornered. 

The fear, particularly in 
working-class areas, is that 
unionists - whatever the 
assurances of Westminster - 
are dose to being sold out 

The logic, in the minds of the 
loyalist paramilitaries, is that 
the IRA, with minimal support, 
has pushed its cause to the top 
of the political agenda using 
violence; if the strategy has 
worked for them then, the 
argument goes, it will work to 
protect the majority loyal to 
the Union. 

Ministers niyl politicians cm 
all skies will have to work hard 
to set minds at rest and con- 
vince the unionist community 


that, if the IRA reaches the 
negotiating table, it will do so 
on the basis of the Downing 
Street declaration alone and 
any agreement will fully safe- 
guard the union's future. 

Most unionists have no more 
t m m for the loyalist gunmen 
than they have for the IRA but 
that could change if, in the 


Most unionists 
have no more time 
for the loyalist 
gunmen than they 
have for the IRA, 
but that could 
change if the 
sands appear to 
be shifting under 
Ulster’s position 


weeks ahead, the sands appear 
to be shifting under Ulster's 
position in the UK 
Unionist politicians will play 
a critical role in determining 
the level of support a nervous 
community might offer extrem- 
ists. None of them condone vio- 
lence but, in recent months, 
there have been scene attempts 
to rationalise paramilitaries’ 
actions in the face of the 
“republican threat”. 


Paramilitaries 


Loyalist extremists believe 
they are well-placed to exploit 
new uncertainties and old anx- 
ieties. and say they are able to 
launch a counter-offensive 
which will render unworkable 
any political accommodation 
with the republicans. 

With loyalist action against 
the IRA and Sinn Ffiin cited as 

a reason behind the switch in 
republican strategy, renewed 
attempts to draw the IRA back 
into armed conflict can be 
expected. 

The illegal Ulster Defence 
Association, the largest loyalist 
paramilitary organisation, 
which mounts attacks in the 
name of the Ulster Freedom 
Fighters, has traditionally por- 
trayed itself as intent upon 
reacting only to IRA atrocities. 

But since the start of this 
year, the UDA claims it has 
tried to preserve the union. 
Failing that, the organisation - 
which said it would ignore the 
ceasefire - wants to create an 
independent northern Ireland. 

After the three-day IRA 
ceasefire earlier this year, the 
UDA warned it could extend 
activities to the Irish republic 
lmfeaa cons tit utional c laims to 
the north were dropped. Even 
if they were, an end to UDA 
violence would depend on 
other elements of any deal. 

But for some years the UDA 
has not attracted the same lev- 
els of support it enjoyed in the 
early 1970s. In 1974, it helped 


organise the workers' strike 
that ended power-sharing in 
the province; that sort of influ- 
ence and authority has gone. 

The Ulster Volunteer Force, 
also proscribed, has been 
responsible for some vicious 
sectarian murders. “The trou- 
ble is they just like killing 
Catholics,” says one senior 
security officer. 

The actions of loyalists have 
shown they have little to learn 
from the IRA. This year, they 
have been responsible for a 
murder-rate almost double that 
of the IRA. 

The Catholic community Is 
regarded as a legitimate target 
and the murderous campaig n 

is designed not only to spread 
fear, but to demonstrate the 
loyalist capacity - in organisa- 
tion and weaponry - to kHL 

Security sendees do not 
underestimate that threat but 
say loyalist extremists are not 
generally as well-aimed as the 
IRA, are more loosely organ- 
ised and are more prone to 
infiltration. If the IRA remains 
dormant, the Royal Ulster Con- 
stabulary hopes to direct more 
resources to the loyalists. 

The recognised danger is 
that politicians, in a search to 
embrace old enemies, could 
supply fresh ammunition to 
loyalist extremists. 

As one Ulster politician 
recently remarked, It is no lon- 
ger impossible to envisage 

Hiwb taking op arms a gains t 

the very state to which they 
express unswerving allegiance. 


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anstait is established in these renascent 
economies with one of the most exten- 
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to lead your ventures to success. 

CA, die Barik zunfrErfolg. 


CREDITANSTALT 


Cra at aaista S brincft», wihikflii rtas and nipwantatire 
offices In the East 

■ Bratislava, Budapest; Ljubfana, Moscoai 

, Pffl©^S^ WBf3«V. 

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10 



FINANCIAL TIMES FRIDAY’ SEPTEMBER 2 1994 


TECHNOLOGY 


Advances in surgery mean many eye problems are now treatable, writes Andrew Derrinj 


Worth Watching • Vanessa Houlder 


A vision for the future 


T he idea of surgeons 
manipulating the shape of 
the eye to correct faulty 
vision would have been 
unthinkable to most people a few 
years ago. But today - with the 
help of laser incisions, special mate- 
rials and new techniques - defec- 
tive eyesight can be unproved with 
a surgical precision that only the 
latest technology can provide. 

For many, this means a visit to 
the optician for a new pair of spec- 
tacles or contact lenses will no lon- 
ger be necessary, or not so often. 
Surgeons can break up the lenses of 
patients with poor vision and 
replace them with artificial ones. 
The profile of the cornea can be 
altered and tests are being carried 
out on injectable lenses made of 
gels. 

One of the most common eye 
defects, especially in old people, Is 
the cataract in which the lens 
becomes clouded. It is more com- 
mon in old people and affects 60 per 
cent of over 80s in the UK, accord- 
ing to Arthur Steele, a surgeon at 
Moorfields Bye Hospital. The causes 
are unknown, but exposure to ultra- 
violet light and poor diet may be 
important 

To restore the vision of an eye 
with a cataract, the cloudy lens 
must be removed and may be 
replaced by a plastic implant But 
early implants caused problems. 
The Perspex (PMMA) lenses were 
large and heavy. A long incision, 
weakening the eye and chang in g its 
shape as it heals, is needed to insert 
them and their weight makes them 
tend to move around. Cells tend to 
stick to the PMMA lenses, making 
the implant cloudy and the im plan t 
is rigid, so the eye cannot accommo- 
date (focus) on near objects. 

Yet aD these problems, except the 
lack of accommodation, have been 
solved by advances in equipment 
and techniques. The first step 
towards reducing incision size was 
to break the lens up before extract- 
ing it The problem was to hit the 
lens hard enough, without damag- 
ing anything else inside the eye. In 
the technique known as phaco- 
emulsification, a vibrating ultra- 
sonic probe breaks the lens up and 
removes it by suction. 

The latest instruments remove 
the lens through a L5mm incision. 
The problem, however, is that the 
implant replacing the tens has to 
pass through the incision and be big 
enough to sit snugly in the lens 
capsule holding it in the correct 


How to correct long and short sight 


Short sight 

Remora more 
tissue from She 
centre than from 
the edge of the 
cornea. 




• ~'--N :■ - ' v" '■ ' 


J Loaer — 



•v 


Long sight — - 
Remora more 
Bssue from the 
edge titan from 
the centre of the 


Q-apMc AmmU Bkkatt 


position inside the eye. Extracting 
the old lens through a pinhole is no 
use if the incision has to be 
enlarged to insert a big implant. 

The development of foldable 
lenses alleviates this problem. 
PMMA Is rigid, but small tenses can 
be made with folding extensions 
(haptics). After Insertion the hap- 
tics are unfolded to keep the lens in 
the centre of the capsule. These 
tenses can be inserted through a 
5mm incision. 

Even more advanced are lenses 
that can “remember” their unfolded 
shape, and resume it after insertion. 
Made of newer plastics, such as sili- 
cone or acrylic, they can be folded 
or rolled up and Inserted through 


even smaller incisions. Lens inser- 
tions through incisions as small as 
1.5 mm have been reported. But 
these techniques are experimental 
and need to be carefully evaluated. 
One potential problem is that sili- 
cone lenses may unfold violently 
and rfamag w the eye. 

New lens materials also have 
other advantages. Cells do not stick 
to them, so the lenses stay cleaner. 
Acrylic tenses can be made very 
thin because the plastic haw a high 
refractive index - it bends Light 
sharply, allowing Implants of very 
high optical quality to be designed. 

However, even the latest implants 
cannot change focus. In the normal 
eye, the fong rapgnio fs mortar ten- 


sion and flattens the lens by squeez- 
ing it. The eye focuses on near 
objects by relaxing the capsule, 
alLowing the lens to curve. 

Researchers in several countries 
are searching for a substance that 
wQL form a tens that fills the cap- 
sule, corrects the focus of the eye 
and is elastic enough to permit 
accommodation, or close-up focus- 
ing. 

Yet even without accommodation, 
vision with a rigid implant can be 
improved by a new technique. The 
profile of the cornea is measured 
before surgery and the size and 
shape of the surgical incision are 
then planned so that the eye heals 
with a corneal profile giving a pre- 


Towards a cure for blindness 


W ork on a protein that 
stimulates blood vessel 
formation may lead to a 
drag to prevent blindness. The pro- 
tein, vascular endothelial growth 
factor controls the laying down of 
blood vessels daring normal devel- 
opment. 

VEGF may also cause abnormal 
blood vessel proliferation in dia- 
betic retinopathy, the commonest 
cause of blindness in the UK work- 
force. The abnormal blood vessels 
prevent light reaching the sensitive 
part of the eye and are fragile, 
often causing further damag e by 
bleeding. The British Diabetic 


Association estimates this type of 
blindness affects between 7,000 and 
14,000 people in the UK annually. 
With early detection, laser treat- 
ment is possible in 70 per cent of 
cases. 

The hope of a- drug treatment 
rests on three sets of results from 
researchers in Israel, Australia and 
ttie US. The Israeli team first iden- 
tified VEGF and developed sensi- 
tive tests for it while working on 
ways of pr e v entin g the blood vessel 
formation (and hence growth) in 

human tnmOUTS. . 

They then showed, in collabora- 
tion with Jonathan Stone of Sydney 


Univers i ty, that VEGF is the pro- 
tein that regulates the formation of 
blood vessels in the developing rat 
retina. 

The third piece of the jigsaw is 
that high levels of VEGF are found 
in the eyes' of patients with prolif- 
erative diabetic retinopathy. 

The next step is to develop a drag 
that inhibits the -production.- of 
VEGF, and to test if It prevents the 
unwanted proliferation of blood 
vessels in the retina. 

According to Stone: “Much is 
known abouf'the gene and the pro- 
tein and the possibility of specific 
inhibitors is real.” 


dsely calculated degree of astigma- 
tism (difference in focus for lines of 
different angles). 

According to Julian Stevens, a 
London eye surgeon who uses a 

computer-controlled laser to make 
the Incisions, the desired astigma- 
tism leaves the cornea slightly more 
curved in the vertical directkra than 
In the hnrtonniai direction. The sub- 
jective effect is that clear vision Is 
obtained except for the very closest 
work. 

For patients with simpler vision 
problems surgeons can also modify 
the profile of the cornea, avoiding 
the need for spectacles or contact 
lenses. The profile must be made 
flatter to correct myopia (short 
sight) or more curved to correct 
hypermetropia (long sight). 

One such method is radial kerato- 
tomy, in which a star-shaped inci- 
sion flattens the cornea. The suc- 
cess of this technique is highly 
dependent cm the surgeon’s skfll- 

A newer, and rapidly evolving, 
technique - entirely driven, by tech- 
nological changes, many derived 
from military applications - Is pho- 
torefractive keratectomy (PRE). A 
«y»m p nfpr- ffnntrnngri law etches tis- 
sue from the corneal surface to 
change its shape. PRK is an area of 
extremely rapid development Com- 
panies in the US, Europe, Japan and 
Russia are developing more flexib le 
ways of controlling the lasers so 
that problems requiring different 
patterns of tissue removal can be 
treated. The change In profile is 
produced by varying the amount of 
tissue removed from different parts 
of the surface. 

Long-sightedness can. now be 
. treated nsfog a moving laser hwam 
The first results are available from 
a system which uses a moving slit, 
developed byAeschulap-Meditech of 
Germany. 

To correct hypermetropia with a 
sc anning laser beam, the beam 
intensity or the number of pulses 
can be controlled to etch moire tis- 
sue from the edge than foam the 
centre, thus steepening the corneal 
.curvature. The approach can be 
^extended, modifying the shape, 
intensity and number of pulses to 
produce any desired change in the 
corneal profile. Thus astigmatism 
and irregularities in the corneal 
surface can be corrected. 

^ With such rapid advances in'teye 
technology, patients will one day 
find 1 a visit to the eye-surgemrras 
routine and beneficial as a trip to 
the high street optician. 






A purer way with 
seawater 


database of numbers, logging - 
successful calls and returning to 
numbers later if they are 
engaged. As a cheaper alternative 
to bnying dedicated 
power-dialling equipment, Exepos 
Software Solutions, a UK software^ 
company, has launched a package 
called EasySpeak which allows 
personal computers to be used as 
power-diallers. The package, 
which runs on PCs using 
Windows software, costs £995. 

Exepos: UK tel 0628 533143; fax- 
0628 533145. 


Few arid countries can justify the 
cost of using water purified 
through conventional 
rtwa»'HnnHfm>gol»niqTU>g for 

agriculture. Light Works, a 
London-based company sponsored 
by the EC, has addressed this 
problem by developing what it 
believes ta a cost-effective system 
for producing crops and pure 
water in hot coastal regions. 

Its pr o totype greenhouse, which 
has been built on Tenerife, uses 
surplus heat to evaporate sea 
water, which is purffled by being 
passed through a beat exchanger 
cooled by cold sea water. It yields 
sufficient surplus water to water 
the crops within the greenhouse 
and irrigate the immediate 
surrounding area. 

Light Works: UK tel 071 249 
3627; fax 071 254 0306 


Improved method 
to weld copper 


Locking out prying 
fingers 


Copper’s ability to resist 
corrosion has made It one of the . 
front-runners in the search to find 
a suitable material in which to 
store nuclear waste under ground. 
The snag is that copper is difficult 
to weld because of its high 
thermal conductivity. 

The Welding Institute, a 
Cambridge-based research group 
which is working on a prototype - 
copper canister for tire Swedish 
Nuclear Fuel & Waste 
Management Company, believes 
the solution lies with the use of 
reduced pressure electron beam . 
welding. It uses a lOOkW electron 
beauLWhlehlssufficteiitiy 
intense to penetrate the ' 
50mm-tidck copper canister. The 
steel-lined canisters produced by 
this process are expected to last 
more than 100,000 years. 

The Welding Institute: UK. tel . 
0223 891162; fax 0223 892588 


Valuable packages are usually 
locked to ensure they are not 
tampered with. Encrypta 
Electronics, a UK security 
company, together with Harcor 
Security Seals of Australia, have 
developed a padlock that includes 
an electronic sealing system. 

The Nanolock generates a 
four-digit rando m number on a 
built-in liquid crystal display 
every time the lock is dosed. It 
also displays the length of time 
since the padlock was closed, 
allowing the user to determine 
the precise time of an 
unauthorised entry. ' ’ 

Encrypta EleCtronicSealsi^UK 
tel 0633 265551; fax 0633265667 


Cancer cells under 
the microscope 


PCs movftliitfo* ** 

telephone- sales- . 

• ... .- 8 I 31 ifi-.-t.VtSL 

Power-dialling equipment is 
widely used bytetephone' -.•■ 
salesforces to trawl through a 


Scientists working at tire 
Massachnssets Institute of -- 
Technology have discovered how . 
two tumour- suppr e ss or gores, 
called Rb and p53, co-operate to . 
prevent cancer In mice, writes. 
Andrew Herrington; 

Their results, described in this 
week’s issue of the journal 
Nature, throw light on the way - 
the body controls the destruction 
of irreparably damaged cells. The . 
Rh protein acts during the 
development of the tye in the 
embryo. It stops cells from 
dividing and causes them to 
differentiate into thehradiin " 
forms. If it is absent, the product 
of the p5S gene-preventsthe cells . 

fwimprtitifiinilinpfcylniUntng . 

programmed cell death. \ 

Tyler Jacks, MIT: US, tel 617 253 ! 
0262; fax 617 2539863 




apnrssR*--'"2£' 

• •- •:? if m % 




With the of Efcj’ojte’s'No; jt ? ; 

int^^irirhwifeatioire, . 





RHS 



The success of international companies is becoming increasingly dependent 
on information logistics. That's why more and more of these companies are 
taking advantage of Telekom information management systems. 

One particularly good illustration of this is the Telekom contribution to the 
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crash tests to and from the company’s research and development 


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r* 33 '" 1 supercomputer in Detroit (USA). Compared to real-life testing, 


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Fax: +7 5822 56 51 10 this dramatically cuts down the time it takes to acquire vital design 
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? 775 os 99 successfully complete this project, Telekom undertook all nego- 

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requirements and coordinated all the transmission channels to suit the custom- 
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WAN is now an effective and competitive business tool in Ford operations. It 
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FINANCIAL TIMES 


FRIDAY SEPTEMBER 2 1994 


n 


MANAGEMENT 


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r °CPer 


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***** c *«s unde 
■ v £ >i^rC3C0pe 


A question of 
motivation 

Tim Dickson on how to keep up 
staff morale amid job losses 


H ow do yon manage a 

business whose 340 
employees will mostly be 
matte redundant in two peats' 
time? That is the challenge feeing 
Keith Greenough, chief executive 
of Mortgage Express, the TSB’s 


subsidiary. 

A casualty of the deep recession 
in the UK housing market. North 


is winding down its “book” 

of the transfer of its ftmetians and 
remaining assets to TSB branches 

in 1996. At that point, an but a 
few win lose their jobs. 

Greenoogh acknowledges that 

La haolMi of 41 1 a . _ 


heavily influenced by 
macroeconomic factors - the six 
months to April, for example, saw 
a tnmround from losses of £l5m 
to profits of£19m as the bad debt 
charge tumbled - but he insists 
that the efforts of staff can make 
a signi f icant impact 
Employee involvement, t raining 
and better conrmnnicathm are on 

.at 

least as much as they would be at 

any enlig htene d financial services 
com pany with a more secure 
future. 

Morale was especially low when 
Greenough and his team arrived 
In 1991, amid rumours that the 
company was likely to be sold and 
following a decision to relocate 
the mortgage administration 
centre to Glasgow (subsequently 
reversed). “One of the first things 
we noticed was a lack of trust,” 
explains Peter Taylor, director of 
human resources and quality. 

An important part of the 
re-motivation strategy has been 
the development of two-way 
co mm unication channels. 
Particular emphasis was placed 
on introducing a staff opinion 
survey that adequately reflected 
the needs of the comp any. Other 
companies (including TSB, Rank 
Xerox and Federal Express) were 
h enehi^ T^ ^ and 
“meta planning”, a technique 
involving different groups of staff 
In confidential brainstorming 
sessions, was used. The fact that 
78 per cent of employees 
responded to the subsequent 
questionnaire against a 60 per 
cent response rate to earlier polls 
coudnctedJbr the company by 


Mori, is an indication that the 
planning paid off. There are now 
about half a dozen 

cross-functional teams working 
on different issnag. farindme 
finding a fairer system of staff 
appraisal 

Overall 71 per cent of 

employees said they were positive 
or very positive abont the 
company, although 50 per cent do 
not or tend not to beheve what 
management says, and more than 
60 per cent disagree or tend to 
disagree with the statement that 
Mortgage Express management 
generally understands the 
problems they face in their jobs. 

Staff development is one means 
by which Greenough and. his 
fellow executives will be hoping 
to imp rove their rating this year. 

Among the 36 employees being 
sponsored or parbsponsored for a 
professional qualification at the 
moment is Susie Every, a 
litigation supervisor who started 
as a temp in the collections 
department. Every has just 
completed an MA in Unman 
Resource Management, having 
written her dissertation on the 
problems of downsizing at 
Mortgage Express. She is also 
developing a course oo CVsftob 
applications which she hopes to 
rnn for colleagues if a pilot 
project proves successful 
More inter es tin g work is 
another Imp orta nt source of 
motivation, say Mortgage Express 
executives. Taylor points out, for 
example, that 32 people have been 
moved to new positions to the 
company in the past year. “As the 
company gets smaller, the 
of someone moving into a 
sqpervtsory/management role is 
greater than it would otherwise 
be." explains Anne McDongaD, 
manag er in risk and 
accounts. 

F inancial incen ti v es , Ikwpwt, 
do not appear to loom large at . 
Mortgage Express. 

According to Greenough: “what 
you pay people is a potential.- ... 
demotivator if you pay them a 
wage which is inconsistent with < 
the market. This ts a possible 
source of <i»«atfrfad inn Paying 
people more money is unlikely to - 
itself to create a higher level of 
performance. It is the way you 
treat them." 


T he ideas of Gary Hamel 
and C.K. Prahalad are 
already weft-known to reg- 
ular readers of this page. 
Harvard Business Review subscrib- 
ers are also familiar with them, 
from a series of brilliant articles, 
two of which, "Strategic Intent" and 
"The Core Competence of the Cor* 
poration", have won the annual 
McKmsey award for the review's 
best article. 

Now they have used the material 
in those articles as the basis of an 
exciting and valuable book on how 
companies bufld up leadership posi- 
tions in new industries. 

It is a book they are well- 
equipped to write: Hamel is profes- 
sor of strategic and international 
manag em ent at the T/igHon Busi- 
ness School and Prahalad is profes- 
sor of business administration at 
the University of Michigan. They 
are experienced consultants, and 
the book draws heavily on the work 
they have done for companies such 
as Motorola, EDS, Philips and 
Whirlpool 

Competing for the Future* is a 
book about corporate strategy, but 
it is not a book about corporate 
strategy as it is taught in most busi- 
ness schools and practfeipd in most 
companies. The authors are not 
concerned with how to pnaitimi the 
firm optimally within an » rating 
industry structure, but with how 
companies create new industries. 

They see this process as having 
three distinct but overlapping 
stages. Hie first of these is competi- 
tion for industry foresight and intel- 
lectual leadership. This is competi- 
tion to gain a deeper understanding 
of technological, demographic, regu- 
latary or lifestyle trends and discon- 
tinuities that may transform indus- 
try boundaries and create new 
industries. 

Second, there is the race to accu- 
mulate the necessary core compe- 
tencies, to overcome technical hur- 
dles, to attract coalition partners, to 
construct the necessary product or 
service delivery infrastructure and 
to get agreement around standards 
if necessary. 

The third stage is competition for 
market position and market share. 
A big advantage accrues to the com- 
pany that is the first to penetrate 
global markets, and the way to get 
there quicker is "expeditionary 
marketing”. Market research pro- 
vides a valuable way for refining 
existing product concepts, but it is 
not very helpful where new prod- 
ucts. are concerned. The .way to 
•team faster than competitors is, 
therefore, to develop an effective 
system erf product iteration. 

■ j -This whole process of budding a 
leadership position can take 15-20 
years. For example. JVC, a subsid- 
iary of Matsushita and the world 
leader in VCRs, began developing 
videotape competencies in the late 
1950s and earty 1960s, after Ampex, 


David Sainsbury reviews a book 
expected to be this autumn’s top 
business title in the US 

Be a better 
builder 



a US company, had produced the 
first videotape recorder in 1959. But 
it was not until the late 1970s, 
nearly 20 years later, that JVC hart 
a winning product with its VHS- 
standard mat-hnw . 

In this process of building up a 
leadership position the authors 
assign a key role to the acquisition 
and deployment of core competen- 
cies. They define a core competence 
as a bundle of distinct and defensi- 
ble skills and technologies that 
enables a f^mpany to provide a par- 
ticular benefit to customers. At 
Sony, for example,- the -benefit is 
•pocketaMity” and the core compe- 
tence is mmiatimgatin n The pos- 
session of these competencies 
enables companies to move into 
new product areas. Also, because 
they represent cumulative learning 


- £ • v 

a -7 

rather than great leaps of inventive- 
ness, it is difficult for competitors 
to "time compress" competence 

building and raitnh i|p 

The authors also attach a great 
deal of weight to the motivation 
and ambitions of companies, and 
they argue that starting resource 
positions are a poor predictor of 
future industr y leadership. While a 
traditional view of strategy focuses 
on the "fit" between existing 
resources and emerging opportuni- 
ties, the companies which b uild up 
leadership positions are those that 
have a "strategic intent” that cre- 
ates, by desig n a substantial “ mis - 
fit” be twee n resources and aspira- 
tions. Strategy is about stretch as 
well as about fit 
When British Airways proclaimed 
just after its privatisation in early 


1387 that it wanted to become "the 
world’s favourite airline” many peo- 
ple would have said this was not a 
realistic ambition. But by 1992, 
Business Traveller magazine was 
rating BA as the best transatlantic 
airline, and number two worldwide 
only to Singapore Airlines. 

This book is a useful antidote to 
much current management think- 
ing. As the authors say, it is a book 
for those who are "more inclined to 
build than cut”. They believe that 
the US and Britain have produced 
an entire generation of managers 
concerned only with downsizing, 
delayering and divesting, 
the time has come to put more 
emphasis on creating the markets 
of the future. Otherwise managers 
will find themselves on a treadmill 
trying to keep (me step ahead of the 
steadily declining margins and prof- 
its of yesterday’s businesses. 

The ideas put forward in this 
book are stimulating and ori ginal 
and many of them are already being 
used by successful companies. But 
they need to be handled carefully 
by businessmen and women seeking 
to apply them. 

While companies should be ambi- 
tious, the book at tunes become too 
inspirational. If one’s "strategic 
intent" is strong enough and one is 
imaginative ennng h then there is 
apparently nothing to stop one 
becoming the leader of one’s indus- 
try. Any small b usiness can become 
a Honda or a Sony. But for many 
companies more modest ambitions 
may be more appropriate. They may 
be limited by the talent and skills of 

their managemen t team 

Second, while the authors have 
sought to show how their Ideas can 
apply to all industries, they are 
undoubtedly at their best when dis- 
cussing WOrld-ClasS electrnninq and 
IT companies, where most of their 

ran gritting has b een done. 1 have no 

doubt that their ideas can be 
applied more widely, hut they wifi 
need to be modified The chief exec- 
utive of a medium-sized engineering 
company will find a lot here that is 
useful and interesting, but he will 
n eed to adapt the concepts carefully 
to the circumstances of his own 
company and industry. 

I predict that this bode will be a 
big success, and that many busi- 
nessmen will gain competitive 
advantage from reading it It pro- 
vides a mere coherent view of strat- 
egy than Kenichi Ohmae’s The 
-Mind of the Strategist, is more origi- 
nal and stimulating than bi Search 
Of Excellence, ami is certainly more 
enjoyable to read than Michael Por- 
ter’s volumes on Competitive Strat- 
egy and Competitive Advantage. 

* Harvard Business School Press. 
$24.95 US; £2L95 UK. 

The author is chairman and chief 
executive of J Sainsbury, Britain's 
biggest supermar k et chain. 


Sharing 

the 

blame 


W hen a company per- 
forms badly, share- 
holders usually blame 
the chief executive and other 
senior executives. Hie criticism 
is rarely directed towards the 
board of directors. 

Boards have been "unique 
among institutions to their insu- 
lation from performance review 
and enforceable mandates to 
change their procedures or 
membership,” says a study* by 
the Conference Board, a busi- 
ness membership organisation 
that researches business policy 
and practice. 

Yet there are signs that this 
state of affairs is changing. The 
Conference Board study reports 
"a growing recognition" that 
boards have a responsibility to 
review and improve the effec- 
tiveness of their operations. 

There has been an increasing 
demand for director accountabil- 
ity following poor company 
results and the publication of 
the Cadbury report in the UK. 
which attempted to define stan- 
dards for corporate governance. 

Those companies which have 
introduced director appraisal 
systems tend to stress the 
importance of contributions to 
discussions, says the report. 
Other Issues that tend to be 
highlighted include analytical 
ability, asse rt i v eness and skill 
at r rnimmiriniting . 

But formal procedures to eval- 
uate board performance are still 
rare. 

The assessment of directors is 
handicapped because boards are 
"a community of peers" whose 
role has not traditionally 
involved criticising their collec- 
tive or individual effectiveness. 
As a result, devising an assess- 
ment process that commands 
general respect is paramount. 
"Because the exercise lacks any 
compliance or enforcement 
authority , it derives its legiti- 
macy from the integrity of the 
process itself," says the report. 

^Corporate Boards: improving 
and evaluating performance. 
Price $100. Available from The 
Conference Board, 845 Third Ave- 
nue, New York. NY 10022-6601. 

Vanessa Houlder 


BUSINESSES FOR SALE 



AUSTRALIA 

SyisyJW 

Outdoor inieruiBg 

-Company 

• Carpark^ M 

For Sate By Receivers 

Assats on oftar hdudac 

• 29 stpor outdoor admrttafrig stos w#h additional sites wWi 
davstopmartt approval tar further tignaea 

• wrist and pubte car parks and proposed multistory car pmto 

• office complex and proposed oflSco compter 

• frMMd and kKMhoM land w#h autetantW air rights 

lb regteter your Interest please contact 
Roger McGrath or Morgan Jones on 
W. 61 233SBM6.F*c 0123357025. , 

SkUfclpeat Marwick ; 


Dennis Hickman 
Limited 

The busness and assets d U» Mow* annates* IJw 
Dems Hfcfanan Oram ere lor sate as a consequence of receaership. 



Timber products business 
for sale 


m The Joint Administrative Receivers, Andrew Pearce and Graham Ord, 
offer for safe as a going concern, the business and assets of TH05 7RFVJS 
SMITH LTD end STUART LEISURE PRODUCTS LTD. which manufacture 
and distribute a range of timber products including garden plant con- 
tainers garden furniture, snooker tables, industrial packaging, traditional 
cooperage and operate some third party warehousing. Salient features are: 
m Annual turnover of approximately £1J million and existing order book 
in excess of £700000 

m Established customer base includes: Independent A Croup Carden Centres 

DIY Multiples, Multiple Sports Retailers, Shoplifters 

m 23JXX) square feet freehold premises on 12 acre West Midlands site with 
modem woodworking machinery 
m Trews name established (or over one hundred years 

m For further details please contact Andrew Pearce. Ernst & Young. PO Box 1, 
3 Colmore tow, Birmingham 83 2D& Tel: 021-626 6262. Fax: 021-626 6305. 

e!I Ernst &Young 


AoOmtttd try Tbe bnUBOe OmtemU 


» In [a gboxi awl Wale* w carry an iu iea nn if I 


HUd Electrical Services 
( Wu l.«i1 mn pten ) UntBed 
and N— too te d Bactrtcal 
Service* United 

• Ehctncd contractors wtb 
combined annual tumwer te 
approamafely £43m 

a Breed n freehold premises 
In WfenhaO. Wnh atom pttn 

• Cunrenl contracts may be 
aMfebtelornratoOR. 

SeytoG Drafted 

• Des&ts and manufactures 
electrical control pan* wSh 

aHjprowmale annual 

turnover tei2.4m 
■ Based m freehold premises 
n WteUBfl. Wotertampton 

• Cw»ete contracts may be 
arable tor Mttbon 


Automate Untied 

• SuppSes and instate 
computer control systems 
for the ready mbed concrete 
and asphalt industries 

• Approximate annual turnover 
£600000 

• Based in leasehold prerrases 
near Bristol 

CUM Bectricte (Endows 

tod Contractor*} United 

- Spedafcsesm general 

commercial and electoral 
con tr a cting 

• Apprownate annual tumowr 
£600000 

• Based »i leasehold prtmses 
nMddksbmgh 

• Current contracts may be 
auaSaWe tor nmabon. 


Coopers 
& Lybrand 


t/ 


For further eriormatmn contact 6k joint admtoBtrttoiTecewn 

PEBtecf^PrkraWtem^^Oom^Cou^ 

19 CarnwaA Swat. Bintepghx ra 63 2 D T^ 

MaptaOK 021 20030(WL Factfmf* 021 200 2464. 




Price MUerhouse 

^SSSSSSSSSSSSSS^ 


,.!W 







The Joint Receiver Frank Bfln and Ian Ranldn of Coopers & Lybrand. Glasgow, aQer tor safe 
foe business and assets of ttibesiabBsiied cheese manufacturer in SouSi West ScoBand. 

Principal features of foe business tactade: 

• fuflyaiAxTiated ’state d foe arfftjcifily, reforested In 1990 at a cost of £12 million 

• production copabWyof 85 tomes of cheese per day 

• turnover of qjproxJnxnelY £46 mRfon for foe year to March 1 994 

• established qualtiy product and reputation tor cheese, butter and skimmed mint powders 

• teftobte property extending to opproamclefy 1 1 owes. 

For further detafe and on oppofeTtmwit to view, please cormd Ian Ranidn or Jim KHcutten at 
Coopers & Lybrand. Kfnfyre House, 209 Wesl George Street Glasgow 62 2LW. 

Telephone; (041) 248 2644. fine (041) 226 5133. 


/ 


Coopers 
& Lybrand 


FIVE STAR HOTEL 
MOMBASA, KENYA 



The Receivers and Managers offer for sale as a going concern the 

business and assets of LT1 Kaskazi Beach Hotel, located at Diani, 

Mombasa (South Coast). 

Principal features of the business include:- 

• Five star hotel complex with 1 91 bedrooms overlooking 
the Indian Ocean; 

• Large swimming pool and two tennis courts set in professionally 
landscaped gardens; 

• Independent water supply from boreholes with desalination and 
water softening plant 

• Average bed occupancy rate of 66% achieved during the 
last year; 

• Estimated annual turnover of KShs 258 million (£3.0 million); 

• 29 acre leasehold plot with unexpired term of 95 years. 

For further details and sale particulars please contact Keith Sinclair 

or Pratul Shah. Joint Receiver & Manager, Coopers & Lybrand. 

P O Box 301 58. Queensway House. Kaunda Street. Nairobi. 

Telephone (254-2) 339308. Fax: (254-2) 218555, Telex: 22574. 


LEGAL NOTICES 


businesses for sale 


a™* , n rmincvl on Tncsdays, Fridays Sanmtoys. 

Fo, fiuto Motion or ro a’™** L* !J“" 

Kjri Loynlonon +44 71873 4780 or 
L^cy Sumner on +4471 S73 3308 


OTMXBIBBOF 
KKHMT UNHID 


ritHttMtenKucrite 
N0KE 6 tttftr am te c»ta>> of Or 

wd MM|r m iromd on ■ bdbc Ac 2SA ^ «l 

i srartB WiaMoiridtaaM 

<Wi retebnoftek Magr m Ac adcagaSvM 

mn a.r nHHIm . ln*» HMMMMMBVJw 
■r NattU * teoBnow md\ la*|M fa 

rareMteteteraiuteMteiaMrate 




Ml . .. 

whftteMU 

VHnmm 


UTILITY CABLE PLC 

Oo 26flj 1994 thar was n 

with Sqgdte of Omtaaks for ! 

ta Onlcr te foe Court of Session dated 
25th Altai 1994 in the petition te UaHly 

C*h!e pic whose. rr <!urr M office is 11 19 

AnaBe Place. Edfo baqj h (*ihe company*) 
confirming the reduction of share 

pranhnh arm mi resolved cc by Special 

Rcaohtion of ibe c o m p any dated I4ih 

July 1994. An undertaking by the 
company referred lo is the Order was 
regfeued a the same time: 

Dnndax & Wilson. CS, Solicitors for 
IftiKty Cable pfa Saltire Coen. Edinburgh 


FOR SALE 

(Specafia m amfo a ww of AC Bcctric 
Moans couip fc g wiri] M nmariaa n ing 

mpiJiifay finuaL y. 

Write first instance, princqKbofdy, to: 

BOx B3377 
Financial Times 
One SourawAm Budge 
L ondon SE19HL 


FOR SALE 

A rare opporamity u acquire a 
uniquely beautiful holiday paik, 
on much sought after Lleyn 
Peninsular, North Wales. Has 
exdnafoe corporate clientele, and 
is operating profitably. Highly 
desirable business opportunity for 
prof es sio nal/ ciecBtive and family 
who appreciate a good living. 

Principals only- Write to Bax B3289, 
I ra—c M Times, One Sorabwadt 
Bridge, London SCI 9HL 


AOAdvertaenmbodtin 


subject lo otr current Thm* and 
Candtinn, copies af whk± are avaihble 
by writing to 
TbeAdvefttaemeA 
ftmliMlini Director, 

The AwDcfolUmex 
One SoudMsdc Bridge, 

London SE19HL 
TU: +44 71 8733000 
Pan +44 71 $73 3064 


FLOATING HOTEL/RESTAURANT 

M/S LADY HUTTON 

Length 75m (240') Width 11m (35') 

Ex Barbara Huttons motoryacht M/S VANAOIS 
Ex Royal navy yacht M/S/ WARRIOR 

59 hotel rooms with private bathroom, TV & phone. 
160 seat gourmet restaurant. 

250 seat indoor/outdoor cafeteria on aftdeck. 

2 conference rooms, sauna and laundry. 
Airconditioning and heating throughout 
The look of a classic luxury yacht with the interior of 
a traditional yet modem hotel and restaurant. 
Can be moved anywhere in the world. 

For information fax or call Palle Eriksson. 

Fax 010 468 6670923 
Phone: 010 468 6670921 - 22 
GSM 010 708 670921 









12 



FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


H ong Kong's prop- 
erty market would 
appear to be full of 
anomalies. In the 
past three years, strong 
demand from multinationals, 
eager to secure a footing in the 
British colony as a bridgehead 
to the lucrative China market, 
has sent property prices spiral- 
hug 200 per cent 
Yet only last month property 
developers watched with Incre- 
dulity as a plot of land was 
withdrawn from government 
auction after it failed to attract 
bids. Two other sites were 
snapped up at the opening 
bids, creating the quietest auc- 
tion many Hong Kong analysts 
could recall. The last time the 
government withdrew a plot 
was in 1964. 

At the same time, some 10 
floors of the Lippo Centre, a 
gleaming twin tower block for- 
merly owned by Australian 
entrepreneur Alan Bond, are 
lying empty, says property con- 
sultants Brooke Hillier Parker. 
In the six months to end- 
August rents tor central office 
space rose 1&8 per cent to an 
average HK$93.40 per square 
foot , 

In any other market these 
examples would reasonably “be 
interpreted as signs of an ail- 
ing market But not, it seems, 
in Hong Kong. The empty 
offices in the lippo Building 
present a welcome dnemma for 
the owners (a mix of local 
Hong Kong Chinese and main- 
land Chinese): whether to lease 
at yields of 10 per cent, or to 
sell for a book profit of 
at least HE$S,Q0Q a aq ft The 
offices would sell for between 
HKS13.000 and HK$18.000 per 
sq ft 


PROPERTY 

Deceptive 

appearances 

Louise Lucas on apparent 
anomalies in Hong Kong's market 


The disappointing auction, 
which saw Citic Pacific, a Bei- 
jing-controlled diversified con- 
glomerate. walk off with two 
bargain sites after making the 
only bids of the day, may pri- 
marily have been a reflection 
of developers' anger over an 
Independent Commission 
Against Corruption investiga- 
tion Into alleged corrupt prac- 
tices at an auction on May 26; 
poorer quality sites and a 
mood of caution also contrib- 
uted to the disappointing 
response. 

Mr Peter Churchouse, man- 
aging director of Morgan Stan-* 
ley Asia, said: *T am fairly con- 
vinced this [the auction] is not 
reflective of the property mar- 
ket in Hong Kong, or of where 
fhw market is heading . 

"That auction was not about 
the property market It was 
about the bad blood between 
the developers and the govern- 
ment (Stic got a steal This Is 
about making points. It's about 
power." 

His assertion - denied by 
developers, who instead grum- 
bled that the opening bids had 
been set too high - stems also 
from the tension -between 
developers and the government 


since March, when Mr Chris 
Patten, governor, announced 
his intention to cool the over- 
heating property market 
Since then, according to the 
government property prices 
have fallen by 10-30 per cent 
The slump was sufficient to 
prompt the government - just 
two days after the previous 
month's embarr as sing 
- to call a halt on any further 
talk of Intervention in the 
market 


T he price fall, says the 
government, was the 
result of measures 
aimnuncari in June, in 
particular the clampdown on 
the re-sale of pre-sale flats 
before completion. At the same 
time local interest rates rase in 
response to a hike in US levels 
while banks tightened 
mortgage lending restrictions. 

The Hong Kong market, say 
analysts, defies the conven- 
tional definition of a market 
Indeed Mr Archie Hart head of 
research at broker Crosby 
Securities, says the colony’s 
market does not strictly 
deserve the nanm of market as 
demand is artificially con- 
strained by the banks, which 


monthly Index for duty 


Total return {quarterly movement} % 


Index of monthly Mum* jjy change ovor 
baaed at Dae 88 = 100 18M fent month 

All Property 218.42 1.49 

<==» ' Retails 209.40 1.80 

— ptnees 197.21 0.77 

«•••’« Industrials 305*56 £20 


R etail and industrial 
property rates of 
return fell in July with 
total all-property returns 
declining by 0.2 percentage 
points to 0.7 per cent for the 
month, according to Invest- 
ment Property Databank, a 
research group. 

. Capital values managed 
only a marginal increase over 
tee month while total rental 
values fell by (L2 per cent 
n ^33ns.-was disappointing fol- 
lowing the recent stabiliza- 
tion in rental values. 

However, the long-term 
slide in rental values has 
slowed. 

- Rental values of all types Of 
property daring the 12 
tnonths to end-Jnly have 
fallen by 3.5 per cent says 
1PD. 

The year.-on-year 'total 


cap loans, and supply is lim- 
ited by the government, which 
sells off limited parcels 

throughout the year. 

“At the moment it looks like 
this situation . will continue. 
There is no avalanche of new 
supply coining on stream and 
equally the banks are saying 
the 70 per cant [loan to value] 
limit [for mortgages] could 
become a way of life rather' 
than a temporary thing " 

Government intervention 
could, too, remain a feature of 
the marke t in the short-term, 
as indicated by the ICAC inves- 
tigation into jhe -ways auctions, 
are conducted . - a probe 

prompted by the controversial 
May 26 auction. 

The taskforce carrying out 
the review recently returned 
from a fact-finding mission to 
Singapore, from where the idea 
of a tender system is likely to 
be imparted Under this sys- 
tem, where developers are 
obliged to provide infra*: 
tract ure — road links or sewage 
- they would tender rather 
than lad at auction for 
plots. 

While the mood of caution 
provoked by the June mea- 
sures is likely to continue, 
anecdotal evidence suggests 
activity Is returning to the 
market 

The number of new loans 
approved but not yet taken up 
increased in July, while resi- 
dential property transactions 
rose by between 10 per «»nt 
and 15 per cent last month. 
This evidence of activity sag- i 
gests the recent low prices : 
achieved at auctions were I 
aberrations - or political pos- 
turing -'rather than the si gnal 
tor a toppling market. 


return on all properties fell 
from 26.1 per emit to 25A per 
cent between June and July. 
Retail remained the best per- 
forming sector with total 
retains of 0.9 per cent in spite 
of a half-point fall in July. 

Industrials were in second 
place with a return of 0.7 per 
cent down from 1 per cent in 
June. 

Offices, in spite of improv- 
ing from 0.3 per cent to 0.4 . 
pm 1 cent, remained in ‘" third 
place in terms of ' total 
re tain s. 

- - IPD said that net invest- 
ment was the only indicator 
which remained buoyant hav- 

•dng been positive across aO 
three sectors for nearly a year 
and rising to £94m-M July, 
close to the peak levels, 
.achieved in February and- 
May this year. 


COMMERCIAL PROPERTY 


LEGAL NOTICES 


Simpson 
seizes reins 
at Lucas 

George Simpson, chief 
executive of Lucas Industries 
since April, has seized the 
reins at the Midlands-based 
automotive and aerospace com- 
ponents group. 

The former Rover chairman 
has abolished Lucas’s previous 
group executive structure. Six 
business managing directors 
will now report directly to 
Simpson, below, as will the 
four executives in charge of 
finance, ■ human resources, 
communications and strategic 
planning. 


'I 



Jack Fryer takes the new 
position of director of strategic 
planning. Fryer, 55, was for- 
merly managing director of 
Lucas Automotive, responsible 
for power train systems. He 
joined Lucas in 1966 from Rank 
Xerox. 

A Frenchman, Jean-Francois 
Cayot, 56, succeeds Fryer as 
manag in g director of Lucas 
Diesel Systems. He joined 
Lucas in 1985 and is curren tly 
responsible for the group's car 
and commercial vehicle diesel 
operations, based in Blots, 
France. 

Fr ank Turner remains. man- 
aging director of Lucas Aero- 
space. Ken Maciyer, managing 
director of Bra&big'S^tems, 
will concentrate on developing 
Lucas’ broking interests. John i 
Ahthony assumes sole respon- 
sibility tor. Lucas Aftermarket 
Operations. John Plant, Lucas 
i Electrical Systems,^* now 
reports directly to Simpson.' 
jjohn Parnaby-betomefr manag- 
ing director of LuCas Elec- 
tronic Systems Products, 
responsible for the remaining 
applied technology businesses. 


PEOPLE 

Powell Duffryn organises its top 
management succession 


The top management 
succession at Powell Duffryn, 
one of the few British compa- 
nies to defeat an unwelcome 
takeover bid from Hanson, 
seems to have been sorted out 
with Hw a ppoint™ ant ctf Barry 
Hartiss, 44, as deputy group 
fthiaf executiv e. - 

Hartiss, who joined^ the 
group following the- 1365 acqui- 
sition of UK Petroleum - 
Products, has been responsible 
for rationalising' the group’s 
low margin fuel distribution 
business and hag fam heavily 
involved in Powell Duffryn’s 
move into prat operations. 

The firm is a major share- 
holder in Tees and Hartlepool 


Amec, the engineering and 
construction group which has 
been struggling to recover 
from the recession, has 
replaced Dennis Clark, 46, 
heed of its process and energy- 
business, accounting for 
around a third of Amec’s 
ttilm turnover. 

Clark is an ofl mill gag man 
who took over as manag ing 
director of Press, the offshore 
engineering operation, after 
most of its top management 
team defected to a rival firm 
ten years ago. He joined the 
Amec board in May 1990 and 
has been responsible for run- 
ning one of the more resflfent 
parts of Amec’s business. 


port and is biddmg for British 
Coal’s South Wales operations. 

Hartiss. was one of two inter- 
nal candidates -who appeared 
to be In . the running to take 
over from Andrew Roberts, 59. 
who retires as chief executive 
next July. > 

Last September, Michael 
Noakes, 48, an ex-BTR execu- 
tive and former, chief executive 
of Bonstead. joined the board 
and there had been speculation 
that he was being groomed for 
the top job. However, Noakes 
win take charge of the group’s 
principal engineering subsid- 
iaries when Freddie Bircher, 
62, retired later this year. 

Hie Intention is that Hartiss 


Clark’s departure has sur- 
prised some analysts. Amec, 
which publishes' Its interim 
figures next week, stressed 
that there was nothing omi- 
nous about his exit. Sources 
dose to the company said it 
derived from differences in 
management style rather than 
poor ftnandal performance. It 
is understood that Amec feds 
that it has not been as success- 
ful in the international market 
as it should have been. Rx- 
Wimpey executive George 
Payne, 46, who has been 
Amec's commercial director 
since 1993, has taken over as 
chairman of Amec’s process 
and energy sector. 


Whiddett joins Threadneedle 
Investment Management 


Paul Maztduca, who has been 
running Threadneedle Invest- 
ment Management since the 
end of May, bag brought in a 
smaller companies specialist 
from Hill . Samnd investment 
Management to improve the 
performance of a sector winch 
he has identified as in need of 
attention. 

John Whiddett, 44, has spent 
the last decade at BED. Samuel, 
latterly manag in g eqtHty port- 
folios for UK life .companies.' 
He had been keen to return to 
smaller companies — : 

In toe early 1980s, Manrtnra 
had also had a spell atthe mar- 
chant bank, spefcialisaigi-Hi. 
smaller companies. Whiddett 
knows Threadneedtefalsvest* 
ment director in cftfhfet? 6f U£ 
equities - Howard Maguire — 
even better, as Maguire had. 
moved from an equivalent 


position at Hill Samuel just 
three years ago. 

Threadneedle has around 
£30bn under management, 
comprising the funds of both 
Allied Dunbar and Eagle Star 
insurance companies. Whiddett 
acknowledged that he was 
“ slightly apprehensive” as to 
how the newly formed Thread- 
needle - attempting to blend 
two such different cultures - 
would weak out, but added he 
had “great confidence” in 
Manriiica. ...... 

Manduca-says. inadequate 

• expertise on the mmUbt com- 
panies side meant that neither 
Allied Bunfear^or Eagle Star 
had adequately captured the 
“big reoovery-foounce” in the 
sector last'yesr. He hopes 
.Whiddetfs arrival will increase 
the funds allocated to this sec-: 

• tor to £500m or more. 


FT CONFERENCES 

THE NUCLEAR INDUSTIW- INTO Tlffi 21 ST CENTURY? 

14* 15 September 1994, London 

This high-level meeting wfll examine the oudook for nuclear power in North 
America and western Euope and review growth p o tent ia l in die Asia-Pacific 
region. The challenges of Improving efficiency and safety at nuclear plants In 
eastern Europe and Issues related to managing the fuel cyde wfll also be 
addressed. Speakers Include; James Ham CBE, Scottish Nucfsan Rdmy 
Carte. EdF; Michael Kbwan, Nuclear Electric; Dr Ylt-Yiin Hsu, Atomic Energy 
Council, Taiwan; Michael Edgar, U rated Kingdom Nkex Limited; Professor 
Jurgts VH etnas, Lithuanian Energy Institute; Thierry Beudon; EBRD: John 
Gulnnass CB; British Nuclear Fuels and Jaan-Paul Lannegrace, 
FRAMATOME. 

RETAILING TOWARDS 2000 - 
COMBINING VISION AND EFFICIENCY 
London, 21 & 22 September 1994 

This year’s mealing vdfl focus on the need tar the ratal industry to exploit tdy 
the opportunities that new markets and new technologies alter, whfle dealing 
with the fundamental business chaflooge® - maxtetislng prottabtty; controOng 
costs; managing the property portfofio and ‘crime busting’. Winning ratal 
formats will be those that successfully combine vision with efficiency. 
Speakers at the conference, arranged jokitly with Coopers ALybrend, Include: ■ 
Teh Ban Uan, Emporium Holdings (Singapore) Ltd; George Beaton, Edgars 
Stores Limited; Zoltan KoszsgL Azur Umo; Mark Uly, The Disney Store 
United; Michael Ruddafl, The Boots Company; Robert MBer, GaBerfa 21 (UK) 
Ltd; David Carman, Quantum International and ten Smith. Matatan. 


will succeed Andrews who, 
along with Powell Duffryn’s . 
rhairm an David Hubbard has 
been responsible for refocus* 

. ing the group after toe unwel- 
come bid from Hanson. 

Hubbard, * year younger 
than Andrews, is expected to 
stay on as chairman until 1997; 
eventually hP n< ^ in g over to 
VSEL’s chief executive Noel. 
Davies, 60, who has been 
appointed deputy chairman. 

The appointment of Davies, 
who comes from an engineer- 
tog background, is designed to 
balance the prom o tion of 
Hartiss who h&s come up 
through the fuel distribution 
side. 

Cook follows 

Gray’s 

footsteps 

JP Morgan has found someone 
to fill the shoes vacated by 
Robert Gray, one of the best- 
known figures in the interna- 
tional capital markets busi- 
ness, who left the firm to April 
to go to HSBC Holdings. 

Gray’s old repansibilities as 
joint bead of European capital 
markets will be taken on by 
another En glishman, Joseph 
Cook, who returns to London 
after a six-year stint at Mor- 
gan’s New York office. 

Cook went to the Big Apple 
in 1988, the year Morgan got 
permission to underwrite US - 
domestic bonds, to set up the 
US syndicate desk. He throi ran 
the North American capital 
markets operation. 

Cook is no stranger to toe 

London, eurobond scene. Before 
joining Morgan in 1985, be was 
part of the so-called ‘Orion 
mafia’, having spent 14 years 
at Orion Royal Bank, then a 
key player in the eurobond 
market. He should also, be 
familiar with Gray's shoes; he 
stepped into a previous pair 
nine years ago, when he took 
over from Grayas head of Mor- 
gan’s fixed-income syndicate 
desk. .. ■ . . - . 

■ Graham Allen, formerly 
investments, director, is 
appointed chairman an&md of 
ICI Investment Management. 
Vice^hairnuizi-' of Tthe ; Invest- 
ment Committee of the 
National Association of Pen- 
sion Funds, AHol succeeds toe 
late Tom Heyes. 


fe ■ 

■ . 

4> 1 ' 

jjcr :• 

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fiv>* 

.hi? - : • ‘ 

-1, '* ' ' 

■gzj i y -•? ■ ■ ‘ ' 

an ' J 

Sfk&Aitf .V“.s • ’ - 

.■£:$ *"_* •t - •' • 


ji-r: : 

i£:u: ».v* 1 < v-. > 
3Kfc'.?f J*.- u ■- 


Madrid, 29 & 30 September 1994 

Tills major torum, imnwfiteoly prior to the annual meetings of the IMF and the 
Worid Bank, wfl (Mates the outlook for banking In tin mid-1990s and address 
a wide range of issues of current concern to the international financial 
community. Speakers taking part Indude: Emilio Bot£l£n Rios, Banco 
S a ntander; Lord Atotmder of Waedon QC, National Westminster Bank pte Dr 
H Oimo RucSng, CBJcorp; Richard J Boyle, Chase Manhattan Bank NA; Dr 
Josef Ackarmann, Credit Suisse; Egfdto Giuseppe Bruno, CtedSo tteOano and 
Eugene J Ludwig, ComptroOer of the Currency, USA. 


BUU3MDPERAT&TRANSFER [BOTJ 
Londoryt & 5 October 1S94 

This major Financial Times conference wffl focus on buBd-operate-b an a ler 
[BOTJ opportuiUas In key growth markets, to tndude Eastern Europe. South 
Africa and the Mkkfle East. The chaRenga of financing and managing BOT 
co nt racts wfll be highlighted In recent case studies of major projects in the 
power, telecommunications and environmental infrastructure sectors. 
Speakers Inducts: Mr Trevor Manual, Minister of Trade and Industry, South 
Africa, Sir Alistair Morton, Eurotunnel, Thierry Baudot, EBRD, Dr Jacques 
HogozJnski, Banobras, toder Sod, The World Bank, John Homan III, Morgan 
Stanley & Co Limited, Mcbaal Heath, Nyrwx Network Systems Company, 
George Kappaz, KMR Power Corporation, Mr Christopher Nash, Northwest 
water International Ltd. Mr Malcolm StephaisCS, The Berne Urtkn. 

INDIA'S ECONOMIC RENAISSANCE 
Delhi, 26 A 27 October 1944 

Given the breadth and pace of economic reform In Indta since 1991, Ms high- 
level FT forum w0 provide a unique opportunity to review the government's 
Itoera ftsa tfcm progr am s and assess butinasE arte Investment prospects- The 
meeting wfll also consider Indites c om pe titi veness hr world markets and look at 
the chdtangesol knprovtog the counry* a Hrasnutora. 

DOING BUSINESS WTTH HUNGARY 
Budapest, 14 A 15 November 1994 

W«h a new Govamment recertify elected to o6ka,lh!s major FT conference vrif 
provide a timely opportunity for a re-appraisal of Hungary's atiractivness as a 
location for foreign direct and Incraadn^yjsoitfaSa investment Speakers 
indude: Mr Peter Bod, President,NfltionaJ Bank of Hungary, Mr Ferance 
Bertha. State Property Agency, Professor Janos Manonyf. Former State 
Secretary, Ministry of Foreign Affairs, Mr La)os 8akroe£udapest Bank Rt and 
Budapest Stock Exchange Caund, Mr Lgas Csopi, State Holdings Company 
AV fit, Mr Gyorgy SuryanL Managing Director, Central European International 
Bank, Dr Mark von Liiiienaklold. MATAV, Mr Istvan Orfaan,EGiS 
Phenraoauticalstld 

DOING BUSINESS WTTH SPAIN 
Madrid, 23 & 24 November 1994 

The FT® *94 conference, to be arranged with Expansion and AcbuKdad 
Econdmfce. wE take as its theme ‘Spate Con^edng .te Europe', tecusing an 
economic recovery, compeSMty and Ib era flstog markets. Speakers induce: 
O. Josi Antorio Grteta Martfnaz, Minster of Labour & Sodof Security, Spain; 
0. Alberto Recarte, Vice President & Managing Dkacttr, Contortion; D. Corioe 
Espinosa da tea Montaroa, Chairman & Chief Executive, Mercedes Benz 
Eapana, SA; □. Oscar Fanful Martin, Chairman, Rapsoi SA; D. Lule Atianze 
Same, Mtoteter of Agriculture, fisheries & Food, Spain; Mr Barnard Dumon, 
Chairman, Saint-Louis Group SA; D. Jos6 Miguel Zaido, Chairman & 
Presfctent. GrupoTpre*- 


Afl anqulrta* should be addressed to: financial Time# Conterencea, P O Bok 
3651, London SW12 SPH, UK. Totophon* 081-673 9000, Ease 081-673 
1336- 










\ 


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i 

V 

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K 



FINANCIAL TIMES 


FRIDAY SEPTEMBER 2 1994 


★ 


ARTS 


13 


T here mist a distinction between 
Jjhwe who remember the original 
2S e production of JoahLtt 

and lto« seeing to *£ Va?n£ 
by the NationalYouui 
lllffltre '^L^“ nparus011 - NYT perfor. 
^emandably belts firo-po^T 

Ji!r 3,10 com P en satwns ami even 
^■SESF*. Oue uf the open^ 
5“?* We d °p t want to lose you, butwe 
Jink you mm to go", is immensely mov 
b^e^Flmuaitiaplayedbyeneh 

hulid-up of the songs is a reminder 
trf wbat a musical masterpiece Ms Uttle- 
PTOd'Jced. They go from confidence 
to doubt to near despair. In “A long way to 
Tipperary" there seems to be a new 
emphasis in the line "but we’re not down- 

heartB ?/SI*i n ** Pack “P y 0 ® troubles in 
pir Old kit bag", they are still trying to 
force a smile. It's a long from 1914 to “I 
want to go home. Oh my. I don’t want to 
die . 

The dialogue scenes are generally less 
confident The NYT cast cannot really null 
off the generals and their ladies and per- 
haps the original text was not as strong as 
we recall. The exception remains Christ- 
mas Eve when the Tommies hear the Jer- 
ries singing "Heilige Nacht" from across 
the trenches: they talk, fraternise, play 
football in no-man’s land before the shell- 
ing resumes. This is as moving as ever. 

Direction is by Dean Byfield and the 
show Is sponsored by Price Waterhouse. It 
runs at the Bloomsbury Theatre, London 
WCl (071-388-8822) until September 10. 

Malcolm Rutherford 


‘Oh What a Lovely War’ revived 



The Edinburgh Festival: Lynn MacRitchie on the Obala group from Sarajevo; and Aiastair Macaulay on the Fringe and theatre 


T his has been a good festival for 
the Demarco European Art Foun- 
dation, housed Cor the moment in 
tile former St Marys SchooL The 
bnilding is overflowing with activity in 
every comer. So Ear, one show, Mirjam by 
Marfela Stefanski, has won a Fringe Pint 
award, Damien Hirst's rats have grabbed 
lots of welcome headlines, and Romeo and 
Juliet by the Estonian Youth Theatre is 
proving a festival favourite. But perhaps 
the most notable achievement is the 
appearance of the group of artists from 
the Obala Gallery in Sarajevo which 1ms 
finally managed to bring its exhibition 
Witnesses of Existence to the festival. 

Invited by Richard Demarco last year, 
the group was unable to get permits to 
leave the city. This year, with the help of 
a sympathetic officer, the artists have 
been able to get out on UN flights and 
have taken the show to New York and 
Switzerland before arriving in Edinburgh. 


I f you plan an Edinburgh evening 
wisely, you can see at the Assembly 
Rooms Anorak of Fire, followed 
immediately bjr The Fabulous Lyp- 
sinka Show. Hie two shows are so com- 
pletely in contrast that the juxtaposition is 
very satisfying. Anorak is nude, English, 
naive, inhibited; Lypsinka is female, 
American, sophisticated, toll-out Anorak 
has been around for a year and has many 
cult followers; but oh, Lypsinkal 
I must explain that I do nut call Lyp- 
sinka female in the most literal sense. She 
is John Epperson, who is both writer and 
performer, and die not only transcends 
the camp drag act she performs, she actu- 
ally makes a searing feminist point She is 
extremely funny, but she repeatedly wipes 
the Laughter off your face. 

Like so many drag artists, Lypsinka 
reproduces feminine glamour, but what 
makes her so original is that die is all 
about reproducing femininity. She mimes 
to a tape that is a brilliant collage of 
quotes and acts by a hundred different 
American popular divas of stage, screen 
and cabaret, and as her act proceeds it 
becomes a study in the desperation of try- 
ing to fit the image of femininity. 

There are the desperations of the drag 
artist trying to fake femininity; of the 
woman trying to fake diva glamour, of the 
diva trying to maintain glamour. And all 
of it for the sake of men. Or is it? Within 
Lypsinka the vamp lies Lypsinka the man- 
hater that bursts out to the stabbing 
shrieks or Psycho- type music. The two 
faces of her persona are, deep down, differ- 
ent faces of the same attitude: desperation 
again, arising from her need to thrill men, 
to obtain men, to live for men, and from 
her plight of never finding Mr Right, of 
being wronged by Mr Wrong. 


Art among the 


Demarco’s interest in eastern Europe is 
no new phenomenon. The idea for the 
present show was born when Demarco 
took a group of Scottish artists to Sara- 
jevo to February 1988. He says, *1 believe 
we must listen to all the languages of 
Europe... Here we bridge the gap 
between the world of art and the world of 
reality . . . around the heart of Europe 
which is bleeding. Our life as artists is 
about confronting the issue of the cre- 
ation of gain, failing to make contact” 
The visiting Sarajevan artists agree 
with this sentiment but their position is 
difficult After discussion, it was agreed 
that it would be in everyone's : bprf inter- 
ests if two Serbian theatre companies 
originally scheduled to appear^at. the 

I n • .. . I~.. ...... . .. ... .all 


Foundation staged their performances 
elsewhere, and a new venue was found. 
“Being anti-war is not enough," the exhi- 
bition co-ordinator Izeta Gradevic told 
me. “Yon have to be against the camps, 
ethnic cleansing, every thing. Our group is 
completely mixed, we are a Bosnian 
group. But art is not divided from poli- 
tics. " 

Demarco believes that education is the 
vital factor in making art the force for 
good in our lives, and hopes that the 
Foundation can remain permanently at 
the school as a sort of international inter- 
disciplinary university. 

“Most people are so simple, their lives 
are about absurdities, and that is our 
problem - it is a question Of education, of 


mins 


giving people more than they have been 
given. When we understand that culture 
and education are two sides of the same 
coin, we will not have a Ministry of Cul- 
ture and a Ministry of Education, we will 
have civilisation.” 

The experience of the Obala Gallery art- 
ists would seem to confirm Hint art can 
have a life gnhimrhtg role no matter how 
atrocious the circumstances of its cre- 
ation. When what was to have been theta- 
new gallery space was destroyed by shell- 
ing before they had moved into it m 
spring 1992, they decided to exhibit theta- 
work there anyway, and organised a 
group show in December in the ruins 
the' basement -i “* 

Meanwhile, the basement had become a 

i ■ * ■ » " >' » » < r.j - w t.u 


safe passage for pedestrians across an 
intersection notorious for sniper fire. The 
artists’ diary of the exhibition has photo- 
graphs showing passers-by, one still in a 
crouching run, one clutching a loaded 
shopping bag, staring In amazement at 
them calmly anrranging their work. “The 
artists wanted to keep ft as a space for 
spirituality . . .** beta Gradevic explained, 
and their iiwtBlluHntw among the ruins, 
some of winch have now been brought to 
Edinburgh, became an affirmation of the 
determination to be civilised, to behave 
above all with decency and dignity, which 
was coming nnder such brutal attack. 
“People were surprised and happy, they 
were crying at the opening. When yon 
have no food, no water, no electricity, 
people used to say is art so important? 
Now they do not ask that question.” 


of 

~ “ Witnesses of Existence comes to the Atlan- 
tis Gallery. London, in December. 


The Hour, We Knew 
Nothing of Each Other 


Treats tom 
the Fringe 

One moment she is performing to "Hie 
things Fve done to make you love me", the 
next to “Isn't it plain, I can’t bear to be 
handled. Don't touch me.” The quick alter- 
nation is hilarious, and at the same time, 
horrifying. The artifice of glamour 
becomes more and more obvious, and the 
torture of striving for perpetual chic 
becomes more alarming. And yet, despite 
yourself, you laugh. 

I s it possible to be both camp and inno- 
cent? The Topp Twins, from New Zea- 
land, manage it Their show has now 
ended at the Traverse, but I loved it and I 
hope Britain sees them again soon. 

In their late-night show. Camping Out, 
they welcomed us to the Happy Valley 
Camping Ground. One of than was called 
Camp Mother, the other Camp Leader. If 
you put Dame Edna Into Hide-Hit, you 
might begin to get an idea. “We’re going to 
try something tonight we haven’t tried in 
a long time,’* Camp Mother announces, 
“We call it audience participation. You 
call it fear.” And soon we were singing 
camp songs, up onstage playing camp 
games, and several of us ate camp food. 
We knew it was safe, because we had 
watched Camp Mother frying it 
The innocent fun of it never palled. But 
what made Camping Out something rare 
was its sheer professionalism - the Topp 
Twins are very good singers - and the 
detail with which they built up their char- 
acters. Camp Mother and Camp Leader are 
both relentlessly jolly, bespectacled, spin- 


sters. Camp Mother throws herself into 
camp activities with immense vim. In con-: 
sequence, she has to keep briskly read- 
justing her boob-tube. Camp Leader is 
more tongue-tied and nervous, but gets 
terribly over-excited. She grins awk- 
wardly, her little tongue Dickers out like a 
snake's, she blinks and wrinkles her nose. 
Then at last she gets to have the stage to 
herself for two minutes. “I’d like to point 
out how mahveilous Camp Mother has 
been this year," she says with a nervous 
giggle. “She had more than her share of 
heartbreak last year, you see. Well,” (con- 
spiratorially) "as a matter of fact,” (chor- 
tle) “she get jiltedT For a moment Camp 
Leader is convulsed in glee. 

A nother fringe highlight is The Big 
Window, a 100-minute musical at 
Theatre Workshop performed by an 
Anglo-American cast of 10 anf * band of 
three. This is a delicate, sophisticated 
piece which deals with heartbreak and 
sexual confusion in an urban mili eu. 

The music, composed by Linda Dowdell, 
is in an eclectic vein of high jazz. The 
words, by Kate Browne, have a fine talent 
for light irony. “You and I have known 
each other a long, long time. We are, if I 
remember correctly, even married.” And 
she and Dowdell have so collaborated that 
the words move into haunting Gertrud e- 
Stein-type cycles: “Perhaps she said per- 
haps.” There is a wide panoply of rhythm, 
some deft choreography by Kraig Patter- 
son. but the most exciting thing of all is 
that Dowdell shows a very rare instinct for 
word-setting. In ensembles, in solos, in 
high-jumping vocal lines, she plants words 
with exceptional clarity and to great 
effect. While you applaud, you hope this is 
the embryo of some larger project 


P eople come, people go. (Nothing 
ever happens in Grand Hotel.) 
They have their exits and their 
entrances. Time passes. Peter 
Handke’s play The Hour We Knew Nothing 
of Each Other has stage directions but no 
words. And its top layer - as realised by 
Luke Bandy’s staging for the SchaubOhne 
am Leitner Plate, Berlin, now at the Edin- 
burgh Festival Theatre - Is an absurdist 
study in character. 

Individuals cross the stage, each reveal- 
ing some different peculiarity; and many 
of the vignettes concerning them are 
funny. There are the four Austrian-type 
tourists, determinedly trekking along 
against all odds, beaming their wonder, 
the two old peasant women pushing shop- 
ping-trolleys; the lone male roller skater 
who finds time to stroke bis hair oh so 
casually and then glides offstage in a sud- 
den arabesque; the SAS-type soldiers who 
zoom perilously onto the stage and 
straight off again; a Tarzan who swings 
onto the stage and then walks across it 
like an ape; a Papageno, whistling appro- 
priate tunes by Mozart, with his birdcage, 
who gets clobbered by a harmless-looking 
gent carrying a huge pack of nappies. 

All of them look as if they were New 
Yorker cartoons. But the fan of a cartoon 
is tha t it is one frozen mo ment out of time. 
The Hour We Knew Nothing of Each Other, 
however, is 120 minutes long. And it soon 
adds up to a view of the world - a world 
peopled by oddballs, where nothing has 
rhyme or reason, where noises off (guns? 


bombs?) frighten everyone into defensive 
posture. 

The mood only darkens after an hour or 
more, although you know from one look at 
Gilles Aillaud's elegant after-Magritte set 
that darkness will descend. An Egyptian 
dog-deity on a plinth; an old car half-cov- 
ered by a dust-sheet; a blue horizon; a 
manhole; an incomplete white wall . . . The 
fact that these scenic elements do not add 
up to anything coherent is, or course, the 
whole point 

Let nobody think that any of this is the 
least bit original, by the way. The shape of 
it is extremely reminiscent of many Merce 
Cunningham works, and many of its comic 
anecdotes have been prefigured in any 
number of ballets by Jerome Robbins. And 
the Dadaist feel of it all, the collection of 
bizarre human eccentricities, derives from 
such Pina Bausch works as 7980. 

So why do I find so much less merit in 
Handke’s play than in these works it so 
resembles? He is only interested in exter- 
nal differences. Whereas Cunningham 
honours human potential and makes it 
large and complex, Handke knocks it 
down to size and makes it pointless. Even 
Bausch, to whose Teutonic spirit he is 
much closer, is more Interested in the 
urgent internal forces that motor the 
unhappy crazies she puts onstage. 
Handke’s play is the hour we knew noth- 
ing of each other - and cared less. 


At the Edinburgh Festival Theatre till 
September 3 


Sponsorship 

Record for 
Edinburgh 

A rts sponsorship was late into the 
recession, but seems to be coming 
out of it quite smartly - at least 
in Edinburgh. The 1994 festival, 
which closes tomorrow, attracted 15 per 
cent more corporate support than last 
year, with a record total of Elm. The 
money is vital - it accounts for 20 per cent 
of festival revenue. Only half the aid goes 
in straightforward arts sponsorship. The 
remainder is donations from trusts and 
individuals and from the corporate mem- 
bership scheme, where companies arc 
tempted to form a festival connection for 
as little as £2,500. Edinburgh hopes to sign 
up more London-based companies, Whit- 
bread and Bats are recent additions. 

The increase in sponsorship owes some- 
thing to renewed business confidence and 
more to the fact that the festival is enjoy- 
ing an artistic revival under director Brian 
MacMaster. This does not mean that his 
ambitious presentations, like a seven and 
a half hour Oresteia in Russian, are enthu- 
siastically embraced by sponsors - this 
year's challenging foreign drama produc- 
tions failed to get backers. But they did 
receive a good critical response and this 
raised the prestige of Edinburgh. 

Predictably, sponsors at the festival are 
motivated mainly by the corporate hospi- 
tality opportunities - IBM flew in 200 top 
executives from Europe for its sponsored 
concert of Beethoven’s Ninth Symphony - 
but the festival's development director, 
John Godfrey, is hying hard to broaden 
their horizons. He made some progress 
this year when one longterm sponsor, the 
Royal Bank of Scotland, added advertising 
of its connection and competitions for tick- 
ets, to his traditional format. Another 
leading sponsor. Hertz, which sponsored 
Miami City Ballet, invested some of its 
money in an educational project, with 
dancers visiting local schools. 

The Royal Bank of Scotland was quick 
to exploit the festival's newest attraction, 
the Festival Theatre, and put £60,000 
behind the opening production there, 
Beethoven's- Fidelia la contrast, events at 
the other main festival venue, the Usher 
Hall, commanded a sponsorship tag of 
£30,000. The festival, like every other arts 
organisation these days, is open to offers 
on the size of a sponsor's commitment 
This flexibility brings in the newer, 
more experimental companies, like Beck's 
Beer, which was willing to put some 
money behind one of the most elitist festi- 
val events, the Canadian director Robert 
Lepage's new work. The Seven Streams of 
the River Ota. Even so the festival still 
relies an local banks, utilities and brew- 
eries for most of its sponsorship income. 

Like other-arts organisations, the Edin- 
burgh. Festival is alive to the opportunities 
in payment in kind. But Godfrey is not 
soft-headed - there is no airline tie-in this 
year because he was not prepared to give 
£30.000 worth of sponsorship privileges to 
an airline in return for the equivalent in 
flill price tickets. It is better to do a deal 
elsewhere - with Intercity, for example - 
and buy air tickets for artists when needed 
from discount sources. 

Hertz gives some of its support in kind 
as well as cash, and in return for inclusion 
in the Corporate Membership Scheme 
Strathmore Spring Water is supplying 
8,000 litres of the stuff. Famous Grouse 
ensures that every performer at the festi- 
val receives a bottle of whisky. 

Godfrey is adept at persuading major 
arts supporters to at least do something in 
Edinburgh. British Gas is currently re-ex- 
amining its sponsorship programme but 
has agreed to pay for the video that will 
promote sponsorship of next year's festi- 
val, when the target is £L2m. 

The habit of using festival events to 
entertain means that most companies dou- 
ble their expenditure by the end of the 
day, when the costs of parties, accommo- 
dation etc, are added in. Godfrey hopes 
that the example of Beck’s will persuade 
sponsors to go for more avant-garde hap- 
penings in 1995 and that the lead from the 
Royal Bank of Scotland will encourage 
them to exploit the link more imagina- 
tively. But one thing stays inviolate - 
Brian MacMaster plans his festivals with 
sponsors firmly out of mind. Only when 
the programme is fixed are they invited to 
pick it over. 

Antony Thomcroft 





l 




\\ Internationa^ 

AR' 

rs 

GUI 

DE 


The Glory of Venice 

The main autumn exhibition at 
London's Royal Academy is 
devoted to the art of 18th century 
Venice. Opening on September 
15, R wOl encompass the whole 
range of artistic production, 
including painting, drawing, 
printmaktog and sculpture. 

Venetian painters of the 18m 
century buflt on a trmfition 
inherited from the Renaissance, 
when the lagoon city's reputation 
as a great centre of art was 
established- They creatodwori»^ 

to vrtdch cotour mxl Bghtweroof 

paramount importance, producing 

attarpieces for cathedrals, 

decorative paintings tor toeterty, 

and portraits and views of the 


t Canaletto’s most 
■ views from England 
wfll be on show. The 
view painters* 

Quarcfl and Bernardo 

H also be represented- 
of the work of 
itttete Tiepolo, the 
antes in Venice at 


time, wi! be featured - including 
a rare showing of St James of 
Compostela (1751), on loan from 
Budapest. 

The work of Tiepolo's 
contemporary, Giovanni Battista 
Pi aaee tt a , should prove one of 
the revelations of the exhibition. 
One of the least known artists of 
the period, Piazzetta painted 
aHarpieces of great dramatic 
power - one of which. Archangel 
Raphael with SS Antony of Padua 
mid Luigi Gonzaga (d730), has 
been specialty restored. Our 
Knowledge of dally Bfem the dty 
fa in part due to painters of genre 
3 CT "***, including Pietro Lortghi, 
who recorded everything from a 
lady's morning toflette to regattas 
and street vendors. 

Three artists who bring the 
show to a dose were to sow tiie 
seeds for developments in 19th 
century art the painter BeUotto, 
the engraver and draftsman 
Piranesi and the sculptor Canova. 

Tickets wiB be available on the 
day at the Royal Academy, or you 
can avoid queues by booking to 
advance at First Can ftoi 071-240 
7200). The exhibition, sponsored 
by Sea Containers Ltd, runs till 
December 14. 

■ EXHIBITIONS 
AMSTERDAM 

Rijksmuseum The Renaissance 
Print 1470-1500- Ends Oct 30. 
Closed Mon 

van Gogh Museum Van Gogh’s 
Self-Portraits. Ends Oct 9. Daily 
ANTWERP 

HessenhLds-Museum Music and 
Painting In the Golden Age: 50 
paintings by 17th century 
Netherlandish masters. Ends 


7 Oct 30. Closed Mon 
BERLIN 

Berfinfsche Gaterte Raoul 
Haussmarm (1880-1971): 
retrospective of one of the leaefing 
figures in the Berftn avant-garde of 
the 1920s. Ends Oct 2. Closed Mon 
Ephratoi-PaJafa Berlin Panning 
from Blechen to Hofer a selection 
of the most important 19th and 
early 20th century paintings from 
Berlin galleries. Closed Mon (tel 238 
0900) 

BONN 

KimsthaBe The Century of the 
Avant-Garde in Central and Eastern 
Europe: 700 works by 200 painters 
and sculptors, offering a thematic 
guide to the main artistic 
developments of the past century. 
Ends Oct 16. Closed Mon 
BRUGES 

Groeritogemuseum Hans Memting: 
40 works by the I8lh century 
Flemish master. Ends Nov 15 
St John’s Hospital Modigliani 
Drawings 1906-1914. Ends Oct 2 
CHICAGO 

Art Institute Odilon Redon: 180 
works by the late-19th century 
French painter-poet. Ends Sep 18. 
Goya: 100 smafl-scaJe paintings. 
Ends Oct 16. Daily 
COLOGNE 

Wafiraf-Rtchartz-Museum Wilhelm 
Leibl: 150th anniversary tribute to 
the Cologne painter who was trader 
of German Realism in the late 19th 
century. Ends Oct 23. Closed Mon 
DRESDEN 

Kupfarstich Kabinett James 
McNeffl Whistler, a rare German 
showing of etchings and lithographs 
by the American artist who 
established Ms reputation in Europe 
in the late 19th century. AH 62 
exhibits were collected in Dresden 


between 1892 and 1919, and are 
being shown for the first time. Ends 
Nov 25. Closed Sat and Sun 
ESSEN 

VOIa Hugel Paris - Belle Epoque: 
an evocation of the period from 
1680 to 1910 with paintings, 
drawings, posters, photographs, 
glass and furniture. Ends Nov 13. 
Daily 

FLORBICE 

Palazzo Pfttf Royal Treasures from 
Denmark: silver furniture, royal 
costumes and ivories dating from 

the era of Frederik IV of Denmark, 
who visited the court of Cosimo 111 
in Florence In 1709. Ends Sep 11 
GLASGOW 

Burrell Collection Aspects of the 
Italian Renaissance 1400-1650: an 
exhibition of paintings, glassware, 
ceramics, decorated arms, 

Ohistraled books, textiles and 
musical instruments, capturing the 
spirit of an extraordinary period of 
creativity. Ends Sep 25. Daily 
HAMBURG 

Deichtorhaflen The Century of the 
Multiple: 130 artists are represented 
In this survey of multiple art editions 
In threeKflmensionai form, ranging 
from early replicas of objects by 
Duchamp and Man Ray, to 
present-day mass reproductions. 
Ends Oct 30. Closed Mon 
Kunsthafle Masterworks from the 
Guggenheim Collection: 60 
paintings by Picasso, Braque, 
Dubuffet Bacon, ChagaD, 

Kandinsky and Mlrb. Ends Sep 25. 
David Hockney, drawings from 
1954 tin the present Ends Oct 10. 
Closed Mon 
LONDON 

British Museum Greek Gold - 
Jewellery of tiie Classical World. 
Ends Oct 23. Daily 


Victoria and Albert Museum Pugin 
- A Gothic Passion: retrospective of 
the 19th century British architect 
and designer. Ends Sep 11. Daily 
Royal Academy of Arts The 
Belgian Avant-Garde 1880-1900. 
Ends Oct 2. Daily (advance booking 
071-240 7200) 

Courtauld Institute The Samuel 
Courtauki Coflection of 
Impressionist Paintings. Ends Sep 
25. Daily 

Tate GaBery Turner’s Holland. Ends 

Oct 9. William Blake - Art and 

Revolution: an exhibition focusing 

on the Eng fish artist's output in the 
1790s. Ends Oct 16. Dally 
LUGANO 

VKe Favorite The St Petersburg 
Murakka: first-ever public display of 
98 large double-sided folios of 
breathtaking ly beautiful calligraphy 
by the celebrated late 16th century 
Persian court artist Mir Mmari 
ATHasanL Ends Oct 2- Europe and 
America: 19th and 20th century oil 
patottngsand watercolours ranging 
from the Hudson River School to 
examples of Cubism, German 
Expressionism, the Russian 
avant-garde, Dada, Surrealism and 
Pop Art. Bids Oct 30. Closed Mon. 
No parking facilities: take Bus no 1 
(tel 091-516152) 

NEW YORK 

Metropolitan Museum of Art The 
Annenberg Collection of 
Impressionist and 
Post-impressionist Masterpieces. 

Ends Nov 27. Dali - The Early 
Years. Bids Sep 18. Closed Mon 
Museum of Modem Art British 
Drawings 1890-1990. Ends Sep 13. 
Closed Wed 

Whitney Museum of American Art 
Edward Hopper (1882-1967) and 
Jack Pierson (b1962): the latter has 


selected 20 works by the former, 
and placed them alongside his own 
work. Ends Sep 11. Joseph Stella 
(1877-1946): more than 200 works 
by the American modernist Ends 
Oct 9. Closed Mon 
PARIS 

Musde d'Orsay Nadar, 

Photographs 1854-65: Nadar was a 
friend of writers and painters, 
whose portraits raised photography 
to a creative art Ends Sep 11. 
Closed Mon 

Centre Georges Pompidou Joseph 
Beuys: retrospective of one of 
Germany's leading avant-garde 
artists of the postwar period. Ends 
Oct 3. Closed Tues 
Musde Picasso The world's largest 
collection of Picasso's work is 
completed by his own collection of 
paintings by friends such as Braque 
and Matisse, and artists he 
admired, such as Renoir and 
C&anne. Closed Tues (4271 25 21) 
Musee Rodin This delightful 18th 

century town house contains tiie 
life work of the sculptor Auguste 
Rodin. Closed Mon (tel 4418 61 10) 
Musde Marmattan This museum 
houses an imported collection of 
paintings tty Monet, including 
bnpre&sfeXY-Goleil (want, from which 
the Impressionist movement took 
its name. Closed Mon (tel 4496 
5033) 

VENICE 

Aniichf grand defla repubbtica 
China in 220 BC - The Warriors of 
Xi'an: ten of the 7,000 Iifesiza 
terracotta soldiers who guarded the 
tomb of Emperor Qin Shihuangcfi in 
centra] China, along with copies of 
war chariots and weapons 
discovered in one of this century's 
most dramatic digs. Ends Sep 11. 
Daily 


VIENNA 

Jutfisches Museum Max 
Oppenheimer (1885-1954): 
retrospective of one of the most 
neglected figures in early 20th 
century Austrian art Ends Sep 18. 
Closed Sat 

Kunstftistorisches Museum 
Tintoretto portraits. Ends Oct 30. 
Albrecht DOrer a selection from the 
museum's collection of work by the 
early 1 6th century German master. 
Ends Oct 30. Closed Mon 
WASHINGTON 
National Gallery of Art From 
Minimal to Conceptual Art - Works 
from the Vogel Collection: 90 
drawings, photographs, paintings 
and sculpture by contemporary 
artists, including LeWrtt, Christo, 
Ryman, Beuys and Flavin. Ends 
Nov 27. Daily 

Freer Gallery of Art Chinese 
Calligraphy: the exhibition focuses 
on varied uses of calligraphy on 36 
decorative and utilitarian objects 
made of day, lacquer, jade, 
bamboo, silk and wood, dating 
from the 7th to 19th century. Ends 
next May. Egyptian Glass: 15 
brilliantly coloured glass vessels 
dating from the second miHenium 
BC. Daily 

Arthur M. Sadder Gallery Lois 
Conner - Photographs: 80 large 
format photos depicting 
architecture and natae by the 
American photographer working in 
Asia. Ends next May. Daily 
ZURICH 

Kunsthaus Dada Global; a large 
selection of paintings, drawings and 
collages by Duchamp, Man Ray, 
Ribemont-Dessaignes, Max Ernst 
and many others, relating to the 
nihifistic movement founded in 
Zurich in 1910. Ends Nov 6. 





FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


Environmentalists must live with trade, says Clayton Yeutter 

‘Gatting’ the Greens 


\ Recent 

I — J congressional 

debate might 

L '-g- suggest to most 

^ /MM, Americans Oat 

trade and envi- 
nramental poli- 
L ctes are incom- 

— u&lz . — patible. Some 
environmental groups fear that 
decisions made by the World 
Trade Organisation may force 
a "lowest common denomina- 
tor” reduction in environmen- 
tal protection in the US and 
elsewhere. Proponents of trade 
expansion are equally worked 
up, fearing inclusion of envi- 
ronmental issues on the WTO 
agenda will add burdensome 
delays and complexities to 
trade policy decision-making. 

Both sides are over-reacting. 
There is no inherent conflict 
between environmental protec- 
tion and open trade; they are 
not mutually exclusive goals. 
There is nothing in General 
Agreement on Tariffs and 
Trade rules - rules soon to be 
assumed by Gatt’s successor 
organisation, the WTO - that 
precludes consideration of 
environmental issues during a 
multilateral negotiation. The 
more relevant question Is 
whether those issues are ripe 
for negotiation on a global 
basis. A second, and perhaps 
even more relevant, question is 
whether those who seek con- 
sideration of environmental 
Issues have as their primary 
motivation protecting the envi- 
ronment or im peding trade. 

The challenge for Interna- 
tional environmental policy is 
to strike a sensible balance 
between economic develop- 
ment/job creation/trade expan- 
sion, on the one hand, and 
environmental protection on 
the other, hi recent years most 
environmental organisations 
have begun to embrace mar- 
ket-based solutions to environ- 
mental issues, recognising that 
markets and growth are not 
generally inconsistent with 
environmental protection.-. 
There remains, however, a 
cadre of hard-core activists 
who view command-and-con- 
frol. .regulation as the. only 
legitimate environmental pol- 
ity, and who also view eco- . 
nomic growth as an enemy 'of 1 
the environment. This • 
fcantcoRi group seems bent on- 
enshrining unilateral trade 
retaliation, extraterritorial reg- 
ulation, and unlettered regula- 
tory sovereignty as the corner- 


stone of US trade and environ- the trade affi 
n?ij>nfyl policy. an d labelfin 

Painting the new WTO as a product star 
“GattzUla” out to devour the ronmental c 

environment, as some environ- trade repress 
mental groups have done, trivi- have an advis 
alises the challenge of deter- the environr 
mining how best to mesh similar issues 
environmental protection with The WTO 
economic growth and trade confront the 
expansion throughout the manner comp 
world. That answer is not to be historic obje 
found in a massive global envi- trade. WTO 
ronmental bureaucracy, nor in must act obj 
unilateral imposition of US te ma tic a B y, l 
environmental standards on jeopardise a 
developing countries; citizens progress in 1 
of the third world are not The US, as a 1 
about to be consigned to a and a force fc 
fbture as he were of wood and and enviroxm 
drawers of water. The answer should nurti 
must be found through multi- hel ping its ft 
lateral consensus within Gatt hereto avoid 
(and then the WTO). cious judgm 

Gatt is already addressing the fixture ini 
many of these difficult and environment ; 
vital issues. The present agree- All this is 

meat specif!- 

cally permits 

nations to take Only through 

measures to multilateral 

protect the « 

environment, COUSeilSUS Can the 
so long as they us achieve change 

are aimed at , . . . . _ P 

conservation of in international 
exhaustible trade rules or 

resources and environmental 

are taken In Standards. 

conjunction 

With restric- 

tions cm domestic production certainly do m 
or consumption. our specific n 

This is broad language, and tives would 
it has been interpreted broadly, nations are n 
Too often the positive side of along on tl 
Gait's record on environmental curve" as m 
issues has been overlooked, recently estab 
Gatt has clearly stated that a on trade and 
nation may have more reports its fin 
demanding environmental parties in a 
standards than those in other assess whethe 
countries - so long as they are ronmental. n 
not more trade restrictive than appropriate. II 
necessary. Gatt has also ruled ate; if not, th 
that nations may take bal- will move on f 
anced action for conservation The Gatt ac 
of natural resources outside Congress will 
their borders and that restric-' ual WTO me 
tions may be imposed to con- higher produc 
serve a natural resource even other nations 


the trade effects of packaging 
and labelling requirements, 
product standards, and envi- 
ronmental charges. The US 
trade representative will also 
have an advisory committee on 
the environment to examine 
similar issues. 

The WTO must eventually 
confront these issues - In a 
manner compatible with Gatt* s 
historic objective of opening 
trade. WTO member nations 
must act objectively and sys- 
tematically, lest they seriously 
jeopardise a half-century of 
progress in liberalising trade. 
The US, as a leader in the WTO 
and a force for both open trade 
and environmental protection, 
should nurture this process, 
helping its fellow WTO mem- 
bers to avoid premature, capri- 
cious judgments concerning 
the future interrelation of the 
environment and trade. 

All this is relevant to the 

present debate 

, over giving the 

LTOUgtl President “fast 

a tor 2)1 track” author- 

aierai ity to 

$ Can tilC environmental 

e change agreements. 

^ 5* We simply do 

lanonai not yet know 

lies Or whether it 

i would be in the 

mental self-interest of 

gjxls. the US to nego- 

tiate on these 
issues, and we 
certainly do not yet know what 
our specific negotiating objec- 
tives would be. Most other 
nations are not nearly as far 
along on the “negotiating 
carve” as we are. After the 
recently established committee 
on trade and the environment 
reports its findings, interested 
parties in all nations can 
assess whether new trade/envi- 
ronmental. negotiations are 
appropriate. If so, let's negoti- 
ate; if not, the WTO can and 
will move on to other issues. 

The Gatt accord now before 
Congress will allow an individ- 
ual WTO member -to impose 
higher product s tandar ds than 
other nations so long as the 


if its stocks are not presently.... standards are based on sound 
.depleted. Gatt thus encourages science. The US supports tins’ 
nations to conserve resources concept, for it encourages envi- 
for future generations. t . ronmental stewardship, hut we. 

1 Just recently the Gatt estab^" ' tt&tl 'to make sm^tmF"hi£h ,,f 
lisbed a special committee ' on standards are not used simply 
trade and the environment, tit 1 .-: teigain an unfair iocKnpetiti,yji\ 
will study and report (to the advantage. 

new WTO) on a whole range of Standards that cannot be 

environmental issues of con- supported scientifically will' 
cem to US business, including properly be subject to WTO 


challenge. Rad sc i e nc e is too 
often just disguised protection- 
ism- Good science will improve 
public health and environmen- 
tal quality around the globe, 
and it will also enhance the 
credibility -of its proponent 
organisations. . 

Only through multilateral 
consensus can the US achieve 
meaningful rhangn in interna- 
tional trade rules or global 
environmental standards. The 
US cannot mandate standards, 
because the Gatt - to the fre- 
quent benefit of the US - has 
traditionally operated by con- 
sensus. (Though that could 
change under the WTO, it is 
unlikely to do so except on 
rare occasions.) Therefore, the 
key to success is to negotiate 
and negotiate welL 

If we have unrealistic negoti- 
ating objectives in these new 
areas, the negotiations will not 
succeed. That would do noth- 
ing to protect the environment 
But we can work through the 
WTO and other international 
bodies to convince other 
nations of our positions and to 
encourage the adoption of 
sound principles to improve 
environmental protection. 

Reducing trade barriers in 
industrial countries will also 
encourage developing coun- 
tries to raise their own stan- 
dards of environmental protec- 
tion. Nations devote more 
attention to protecting the 
environment as they become 
richer. As a middle class 
emerges and grows, domantfoi 
for protection of the environ- 
ment increase. We should work 
with this trend, not against it 

In short, we need to “Gatt” 
the greens, not “green” the 
Gatt Multilateral co-operation 
on issues affecting trade and 
the environment will offer a 
stronger and more secure basis 
for environmental protection 
than ad hoc, politically 
charged actions by individual 
nations, however well inten- 
tioned. Those of us who have 
worked on trade issues for 
many years do not believe that 
open trade and enviro nment al 
protection are inconsistent 
goals. We look to fhe fiitme. 
with confidence that the WTO 
will properly mesh lttdtffldtej 
objectives In both arS2s! , ,l,J ' H ’ r 

■ Hi- 

Ambassador Yeutter. ijpnqnv&CSj 
Trade Representative and Sec- 
retary of Agriculture, is_anmsel_ 
to the Washington-based law 
firm of Bogan & Hartson 


T rade unionism in 
Britain is like a 
pruned back plant 
poised for a new burst 
of growth.” The 1,000 delegates 
assembling this weekend in 
Blackpool for the 126th gather- 
ing of the Trades Union Con- 
gress may draw comfort from 
the words of Mr John Monks, 
TUC general-secretary. Bat 
i-mH the TUC’s modernising 
leader just be whistling to keep 
their - and his - spirits up? 

The immediate outlook for 
trade unionism, as he himself 
acknowledges, is not good. 
Membership has continued to 
decline, by 400JD0O to 7.2m. over 
thepast year despite the fact 
th at unemployment started to 
fail Long-term trends contri- 
buting to the decline of unions 
and collective bargaining - the 
shift from manufacturing to 
services and the shrinking size 
of the average workplace - 
persist 

Nevertheless, TUC delegates 
can find some reasons for feel- 
ing cheerful. The arrival of Mr 
Monks, who only took over 
from the unappealing Mr Nor- 
man Willis last year, has 
almost certainly improved the 
public standing of the TUC and 
unions in general. 

He has reorganised the TUC 
to give it a sharper focus; 
attempts to reposition it as a 
non-party political lobbying 
organisation, for all employees 
are begmmg to take effect The 
arrival of Mr Michael Portillo 
as employment secretary may 
reduce the scope for dialogue 
with the government. But Mr 
Monks can develop further his 
friendly relationship with the 
Confederation of British Indus- 
try and later thin month he 
will be the first TOC general 
secretary to address meetings 
at the Liberal Democrat and 
Conservative conferences. 

Best of all for the nntuna as a 
whole, the biggest challenge 
they faced for years has been 
surmounted with relative ease. 
Recent legislation has required 
them to obtain positive con- 
sent from members before 
employers can “check off” 
union -subscriptions from pay 
packets, in effect requiring 
unions to re-recruit the 80 per 
cent of members who pay 
union fees this way. Overall, 
TUC-affiliated union member- 
ship may shrink by about 
500,000 as a result • 

But for the’ first. time in 15 
years, the movement can look 
>r the govenndent in the eye and 
'Slate that ifi’Bbre membership 
is real and voluntary. 
ity Bat in spited of )fn taynks’s 
personal achievements, his 
jittempts to modernise the 
uni on movement may be insuf- 
ficient to stem long-term 



#■ 


o*- 


i\i 


Trade union leaders John Mmnwh (left) and Jimmy Knapp: a disturbing peek into the fixture 

Waiting for the 
workers’ harvest 


fipuiinp Tn addition his reforms 
face opposition from within 

union ranks 

Some of the more conserva- 
tive union bosses have not 
grasped that European-style 
social partnership — which Hm» 
TUC leadership regards as pro- 
viding a new lease of fife for 
the movement - requires 
chaises from them too. There 
could be rows at the Congress 
on the policy of supporting 
workplace rights for all work- 
ers, rather than just union 
members, and on tha shift to a 
less politically partisan stance. 

Mr Monks’s modernisation 
strategy has few reliable allies 
in the Mg unions, while the 
TUC’s two biggest affiliates - 
Unison, the public service 
union, and the TGWU general 
union - remain consumed by 
splits between different inter- 
nal factions. 

Further, some old fashioned 
problems could be looming. 
Several unions are facing 
financial difficulties, none 
more than the heavfiy-indebted 
building union Ucatt Mr John 
Edmonds, toarigr of the GMB 
general union, says fixe for- 
tunes of the nnifms no longer 
rise and fell together andHtfaat 
it is now a question of the 
“survival of the fittest”. 

Another edit) Of the 'past 
could be a of Strike 

action. Mr Anuny Knapp, 
chairman of tjhia jgeaiJs ’Con- 
gress and leader of the embat- 
tled RMT rad union, is ploy- 
ing strong public backing for 
his striking signal workers. 


David 

Goodhart on 
attempts to 
update UK 
trade unions 

But the relative popularity of 
unions may be because strikes 
are so rare. A renewed bout of 
militancy over wages, often 
predicted in the course of the 
recovery, could undermine the 
support unions have begun to 
enjoy. So, too, could possible 
large-scale disputes over com- 
pulsory redundancies at Brit- 
ish Telecommunications or 
B ritish Gas, w hich could cause 
much disruption for the public. 

Worst of all fix 1 the future of 
the unions, there is no sign at 
the workplace that employees . 
are turning to than for support 
in the face of increased labour 
market insecurity. 

Unions are fading to improve 
their record in the recruitment 
of women or part-time work- 
ers. Only 21 per cent of part- 
timers are in radons. compared 
with 37 per cent of fUd-timers, 
while the proportion of women 
workers in unions fell last year 
to 30 percent 

TheN J tOJs{/rio evidence 
that 'raipioyees'' who are not 
covered by adjective bargain- 
ing agtimnienis ate starting to 
join unions as ah insurance 
policy,! -for -legal help and 
advice an subjects such as pen- 


JjdnS ,! 

rAP lH ' 


Despite these obstacles to 
renewal fhe unions are not 
completely helpless. They can 
look to two outside sources for 
help - the European Union and 
the Labour party. 

The EU is already passing 
union-friendly legislation In 
areas from health and safety to 
works councils fix* consulting 
workers. And although the 
ElTs social dimension is not 
expected to produce much new 
legislation for a few years, 
there is stdl plenty in the pipe- 
line for organised labour to 
welcome - despite the UK's 
opt-out from the social chapter. 

But for an actual increase in 
union membership, or evoi for 
an end to persistent derHiu* a. 
Labour victory at the next gen- 
eral election is a necessity. Mr 
Tony Blair, the Labour leader 
has talked about treating 
unions, as just another pres- 
sure group. He wdl be anxious 
not to play into the hands of a 
Conservative party which will 
point to the apparent tension 
between Labour’s RnmirntmaM • 
to full employment and its 
union-inspired policies on min- 
imum wages and workers' 
rights. But a new right to rep- 
resent workers, stopping shot 
of frill union recognition, is 
certain to appear, in Labour's 
manifestos. ‘That, .would open 
the door for us to show that we 
can help porkers .ip difficulty.” 
says Mr ; E*goi^s lU ,j r( 

UK trade unionism may be a 
pruned-bacfcplant but it is still 
waiting for fertilisation from 
outside. 


V:: * 


sps’**-- 

4&‘ 
ifcii - ”■ 

Vt-”.- • 


FT 


London, 14 &15 September 1994 

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LETTERS TO THE EDITOR 

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Fax 071 873 5938. Letters transmitted should be clearly typed and not hand written. Please set fex for finest resolution 

Weakness of European defence industry 


r- -- - 


From Mr Alain Deckers. 

Sr, Lex is right to argue that 
the consolidation of the US 
defence industry sets a chal- 
lenge to Europe’s defence 
industry (“Allied forces”, 
August 31). Yet this trend has 
been ongoing for a number of 
years, and the European 
defence industry's reply has 
been less than wholehearted. 

The feet is that it remains 
hopelessly fragmented, largely 
for political reasons. European 
companies which have under- 
taken cross-border mergers 
(Matra Marconi Space, Euro- 
copter) have been slow to 
implement unified manage- 


ment structures while others 
continue to engage in endless 
negotiations before embarking 
upon than (British Aerospace 
Dynamics and Matra Defence). 
This compares unfavourably to 
US deals which are clinched in 
months not years. 

Furthermore, the Groupe- 
ment d’Interet Economique, 
which is so prevalent in tire 
European defence industry, 
tends to perpetuate national 
reporting systems and duplica- 
tion of effort White second and 
third-tier suppliers have fared 
somewhat better, the picture in 
European defence R&D is 
equally Incoherent, being dom- 


inated by a host of bilateral 
treaties and ad hoc collabora- 
tive projects with little or no 
CO-OFdinatian amon g thmi- 

Previous attempts to provide 
a blueprint for a compe titi ve 
European defence equipment 
market, such as the Indepen- 
dent European Programme 
Group’s 1988 Action Plan, have 
lacked any credibility since 
they did not include a suprana- 
tional executive agency which 
could force national govern- 
ments to act Yet deregulation 
and rationalisation of the Euro- 
pean defence agency are des- 
perately needed. 

If European governments do 


Lots of life at the English seaside 


From Mr Procter Naylor. 

Sir, Michael Thompson-Noel 
is, as a travel writer, entitled 
to his subjective views about 
Great Yarmouth ("The English 
coast and its holidays from 
hell”, August 27/28). However, 1 
am surprised that you have 
allowed him to muddle these 
with what purports to be a 
business assessment of the 
state of England's tourism and 
its resorts. 

He tells us that we have lost 
our soul to “naffoess”. The bits 
in between (the resorts) are 
“often occupied by drab cara- 
van parks”. If he had bothered 
to go and look at these caravan 
parks and holiday centres he 
would have found a number of 
thriving businesses and would 
have seen the result of many 
years of steady investment by 
both national operators such 
as Pontius, Haven and Warner 
and by private operators such 
as, in the Great Yarmouth 


area. Potters, Blue Sky (the 
ThnewelL family), Cherry Tree 
(the Marsh family), or Vaux- 
halL In any of these caravan 
holiday parks he would have 
found a wide range of sporting 
facilities, indoor and outdoor 
swimming pools and, most 
importantly, a variety of even- 
ing entertainment that he 
would not have found at twice 
the price in France, Spain, Por- 
tugal, Italy, Greece, Morocco. 
Tunisia, Bermuda, the Carib- 
bean. Australia, New Zealand. 
Fiji, the Philippines, Thailand, 
Malaysia, Mexico. California, 
Canada or even Scotland! 

A dele BiSS, nhafrman of Hip 
B ritish Tourist Authority and 
of the En glish Tourist Board, 
was right to highlight some of 
the problems that our holiday 
industry feces in her introduc- 
tion to the ETB's annual 
report I prefer this honesty to 
the over-optimistic messages 
put out by some of her prede- 


cessors. There still could be a 
further contraction in hotel 
accommodation in resorts. But 
standards are improving. 
There is a heed for more imagi- 
native use of parasols, wind- 
breaks and deckchairs to make 
our beaches attractive in the 
way that the Belgians and the 
Dutch achieve with the same 
climate as we have. 

But there is life yet in 
England's seaside resorts and 
Financial Times readers should 
be aware that there is still 
money to be made there too! 
Mr Thompson-Noel would do 
weU to reflect on what would 
be the effect on the national 
parks of the resorts closing 
down and all those who holi- 
day there following Mm to the 
countryside. 

Procter Naylor, 
managing director. 

East Angha Tourist Board. 
Toppesfield Bad 
Hddleigh. Suffolk m SDN 


Japan economy theory needs further analysis 


From Mr Peter McGregor. 

Sir, Martin Wolfs latest the- 
ory (Economic Eye, August 29) 
that the way to have a success- 
ful economy is to run a large 
trade deficit with Japan would 
be more convincing if he had 
analysed the imports of coun- 
tries like Singapore, Hong 
Kong and Malaysia to discover 
how much of these were semi- 
manufactures from Japan to be 
completed with low cost labour 
and re-exported to the west As 
it happens; the situation in 
Malaysia appeared in your sur- 
vey (August 30), in which it 
was reported that typical prod- 


ucts have 80 or 70 per cent of 
the value added in Japan or 
the US, a balance which the 
Malaysians are trying to 
change. What this means is 
intermediary “Wolf-successful” 
countries merely provide cover 
for a Japanese trade surplus 
with the west which is even 
larger than the statistics show. 

His. suggestion that "sophis- 
ticated econometrics does not 
support the . belief that 
(Japan's) imports are smaller 
than might reasonably be 
expected"- also needs to. be 
looked at critically, since 
studies in depth on the ground 


tell quite a different story, as 
was demonstrated for the con- 
struction industry in 1990. Inci- 
dentally, I am disappointed to 
find that Wolf is not the sim- 
ple-minded free trader that 1 
had always assumed, hut a 
believer in sophisticated econo- 
metrics. This has the great 
danger of substituting a 
delight in the process for a 
hard look at the facts. 

No doubt be will be telling 
us nest that the Japanese are 
not Keynesians. 

Peter McGregor, 

Dacre Cottage. 

Langworth, Oxfordshire 


not wish to abolish article 223 
of the Treaty of Rome and 
thereby give the European 
Commission oversight over fee 
defence industry, it is at least 
incumbent upon them to find 
an alternative organisation 
which could f ulfil this role. 
The western European Arma- 
ments Group seems the only 
credible candidate, and steps in 
this direction need to-be 
urgently revitalised. •>. 
Alain Deckers, 
postgraduate student. 
Programme of Policy Research 
m Engineering Science & 
Technology, . 

Manchester University M139PC 

Perverse 

argument 

From Mr Peter Benton. 

Sir, The concluding para- 
graph of your editorial ‘Ventur- 
ing Capital’ (August 30) sur- 
prised me. “Generating more 
investment in small enter- 
prises. . .cannot in itself be 
regarded as a «me objective” 
looks perverse, when earlier 
you point out some of the pecu- 
liar problems that small com- 
panics face in raising ftmdsJ If 
the cost of due diligence is 
high in relation to the sums 
invested, surely that argues for 
an enhanced return after a soo- 
cessful investment? No one 
doubts the contribution that 
small business ran malm to fee 
economy; it seems a pity feat 
so many hopeful enterprises 
are strangled at birth. 

Of course fiscal treatment is 
mily part of the solution; fee 
availability of quality infra-mar 
tion on investment opportuni- 
ties is also crucial That is 
what we are trying to promote. 
Peter Benton, . 
chairman. 

Enterprise Adventure, 

The Enterprise. Pavilion. 

London Square. Gross Lanes, 
Guildford, Surrey GUI lUG 


Sir, Is there any hope that if 
members of parliament are 
refused their proposed pay rise 
they may go on strike? 

George D Mackenzie, .. 

11 Barony Park, 

Kelso, 

Roxburghshire 

TD58DJ 


ie with 
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FINANCIAL TIMES 


FRIDAY SEPTEMBER 2 1994 



■» 

■ ■ 1 !J 


it KHiSlfV 


FINANCIAL TIMES 

P ne Southwark Bridge, London SE1 9HL 
Td: 071-873 3000 Telex; 922186 Fax: 071-407 5700 

Friday September 2 1994 


Seeking a role 
for Apec 


The 17 members of the 
Asia-Pacific Economic Coopera- 
tion forum have been long on 
visionary declarations about forg- 
ing closer regional ties. They have 
been much shorter, however, on 
specific plans. This week, a panel 
of expert advisers sought to fin 
the vacuum with a blueprint for 
the long-term development of the 
organisation. 

Under the rubric of “open 
regionalism”, their report urges 
Apec leaders to commit them- 
selves at their November summit 
in Jakarta to the total elimination 
of trade and investment barriers 
in the region by 2020. The 
they stress, should not he to cre- 
ate an inward-looking trade bloc, 
but to use liberalisation within 
Apec to promote the advance of 
global free trade, hi conformity 
with the principles of the Gait. 

The authors of the report are to 
be commended both for their 
forthright reflection of the notion 
of a “Fortress Apec” and tor their 
drafting skills , in formulating 
their recommendations, they have 
had to bridge widely differing 
viewpoints among the organisa- 
tion's members- While the US and 
Australia are keen that Apec 
should develop into an active 
trade negotiating forum, that idea 
is opposed by a number of Asian 
members, including Japan and 
Hong Kong. Against this back- 
ground, the government-appointed 
experts' unanimo us a gnwtmu f on 
the report's recommendations is 
no mean feat 

Whether their proposed way for- 
ward is either politically feasible 
or economically desirable is, how- - 
ever, much more debatable. 
Impressive as the aggregate eco- 
nomic weight of Apec's members 
may be - accounting for half the 
world's trade and 60 per cent of its 
GNP - their diversity is more stri- 
king than their similarities. They 
include the US and Japan, the 
world's two - richest economies, but 
also C hina and Indonesia, two of 
its poorest. Tbs main distinguish- 
ing feature of economic relations 
within Apec is the dependence of 
most of its members on trade with 
the US, rather than with each 
other. 


Big confrontation 
This is not an obvious basis for 
regional trade liberalisation. It is 
made no easier by the fact that 

Life with 
Tiny (cont) 


disputes between Apec members 
are also at the heart of almost 
every big confrontation in the 
international trade system, rang- 
ing from trade in services to anti- 
dumping, labour standards and 
the environment it is unnVar that 
Apec’s members would be better 
able to settle these differences in 
regional negotiations when they 
have signally felled to do so in the 
Gatt It is no less utopian to 
believe that the US will suddenly 
drop its aggressive trade stance 
towards countries such as Japan 
and China and agree to offer th»m 
trade concessions as part of Apeo- 
wide liberalisation. 

Daunting hurdles 

But even if these daunting hur- 
dles could be overcome, would an 
Apec liberalisation programme 
benefit the world economy, as the 
report’s authors contend? Their 
argument rests heavily on the 
claim that freer regional trade pro- 
vides po wer f ul momentum at the 
gl obal level. To the extent that 
disputes between Apec members 
are responsible for thwarting 
progress in the Gatt, they may 
have a point. Against that, the 
notion raises two objections. 

One is that any m eaning ful 
regional programme would 
require a huge commitment of 
government resources, and would 
therefore be likely to divert nego- 
tiating efforts away from the Gatt 
and its planned successor, the 
World Trade Organisation. The 
other objection is that any liberal- 
isation programme designed pri- 
marily to satisfy Apec members 
could become an alternative to the 
Gatt The' consequences would be 
all the more serious if the pro- 
gramme aimed, as the report rec- 
ommends, to tackle not only bor- 
der obstacles but government 
procurement and competition pol- 
icy. Ot^ier 9puqtrfes which sought 
reciprocal tirade agreements Wfth' 
Apec might then have no choice 
but toACcept rules (Sctated by the 
organisation. 

At present, that remains a 
remote possibility. It is one that 
many of Apec's members - as well 
as other countries - would also 
strongly resist. The experts' repeat 
offers Apec leaders an extremely 
ambitious agenda. Their sensible 
course In Jakarta may be to settle 
for more modest objectives. 


It would be understating things to 
say that Mr Roland "Tiny” Row- 
land of LonrilQ is an aTranhmrrism 
in the sanitised entrepreneurial 
world of the late 20th century. 
Despite the mushroom growth of 
rules, regulations and codes of cor- 
porate conduct he is still there, 
defiant, at the age of 76, even as 
the remuneration committees 
roam and the audit committees 
delve. Yesterday, despite reports 
of an impending boardroom coup, 
he emerged with his expenses 
uncut, his position intact and his 
life expectancy almost certainly 
enhanced. It is, of course, an act to 
which he has devoted some prac- 
tice. 

The directors who are hostile to 
Mr Rowland can console them- 
selves with the thought that he is 
(probably) mortal. But they will 
have to hone their skills at corpo- 
rate trench warfare if they wish to 
procure any other denouement in 
the near term. For outside observ- 
ers the question is whether there 
are wider lessons to be drawn 
from the continuing saga sur- 
rounding this most durable of 
maverick entrepreneurs. 

That seems doubtful because 
Lomho is sux generis, even if Mr 
Rowland is not But it remains 
worth asking bow the man who 
built Up this huge international 
conglomerate has been able to run 
it down again over such a 
protracted period without anyone 
pre-empting the process- It is not 
as if Mr Rowland has had a can- 
trolling interest in the company. 
Yet he has had a remarkably free 
nm hi capital markets where the 
penalties for poor performance 
have grown harsher in re cent 
years. If he is now unde- threat 
from his fellow joint managing 
director and chief executive. Mr 
Dieter Bock, it is only because he 
himself chose to bring him into 
Lonrho as a potential Successor- 


Straight eight 
"tie explanation for Mr Row- 
land's loissesposser stems from 

the outcome of the 
ous boardroom r wy Jit? 
the socalled straight eight direc- 
tors to unseat him over sev- 
eral issues of corporate gOTOT; 

,ce includes excessive 
expenses. From then Mr Row- 
land became a pariah with the big 
investment institutions, toe 
ance companies and ^ 

responsible for most of the net 


inflow of cash into the equity mar- 
ket Yet because he retained the 
support of small shareholders, 
Lonrho was transformed into a 
perfect illustration of the thesis 
advanced by the American aca- 
demics Berle and Means, who 
pointed out the consequences of 
the divorce between ownership 
mid control 

In contrasting the situation in 
the early 1930s with the days 
when proprietors held enough 
stock to exert proper control, 
Berle and Means showed that the 
fragmentation of shareholding in 
the 20th century had deprived 
shar eholders of power and influ- 
ence. That was certainly the case 
at Lonrho, where earnings stag- 
nated between 1976 and 1987. 
Today Lonrho has still not 
returned to the level of earnings 
achieved in the upturn that came 
to a peak in 1986. Yet Mr Rowland 
hangs on regardless. 

Dismal performance 

Elsewhere this di s mal perfor- 
mance might have prompted insti- 
tutional pressure for boardroom 
change, because the growth of col- 
lective investment is helping dose 
the gap between legal ownership 
and control. Yet without enough 
large shareholdings at Lonrho 
until institutional interest 
recently started to revive, this was 
never a possibility. As for the 
alternative discipline of the hos- 
tile takeover, Lonrho is a highly 
indigestible target With so much 
of its profits in Africa, and a 
marked difficulty in generating 
cash flow, it would never have 
been an easy business to refocus. 

The recent rise in the share 
price on hopes of Mr Rowland's 
enforced departure suggests that 
the market regards Lonrho as a 
vastly more valuable prospect 
without the man. Yet, historically, 
potential bidders who have been 
prepared to contemplate heavy 
exposure to an economic disaster 
zone like Africa have always wor- 
ried about a uniquely African poi- 
son pill: the possible dependence 
of profits on Mr Rowland’s pep 
wnal relations with black African 
leaders. The broad message, if 
there is one, is that wider share 
ownership entails weak account- 
ability and poor corporate gover- 
nance. The narrower indisputable 
one is that Mr Rowland is a spent 
force in business, but not in the 
boardroom. 


I f you want to know the time 
ask a policeman, advised the 
old miijrin h all song. 

How things have changed. 
Telling people the time is not 
an activity requiring the commit- 
ment of expensive, highly-trained 
police. Neither, the UK government 
may be about to conclude, are more 
important activities such as check- 
ing fingerprints, tracing missing 
persons or monitoring automatic 
speed-check e quip ment 
The Home Office is currently 
completing an Internal review of 
specific policing functions as part of 
the government's review of public 
expenditure. Although ministers 
say this will not necessarily lead to 
changes in police responsibilities, 
the service is not convinced. Offi- 
cers suspect the review will prove 
the prelude to market testing and 
the transfer of "ancillary” tasks to 
the private or voluntary sectors. 

Events have not awaited the 
review's completion. L a s t week's 
announcement by Wandsworth 
council in London that it was con- 
sidering extending its uniformed 
parks patrols to bousing estates has 
sparked debate about the appropri- 
ateness of assigning policing duties 
to individuals who lack the training 
and status of police officers. 

Controversy over Wandsworth's 
plan is in the detail - specifically 
its suggestion that patrols, with the 
powers of constables, should be 
sworn in by magistrates - rather 
than the substance. The Association 
of Chief Police Officers said patrol- 
hug was “one of the most difficult 
jobs which police officers are asked 
to undertake' 1 and should not be 
attempted by under-qualified indT 
viduals. 

Several local authorities have, 
without arousing opposition, begun 
using uniformed personnel to com- 
bat crime, while private security 
staff are increasingly deployed on 
guarding activities that bring them 
into contact with the public. 

Completion of the review may 
mark the be ginning of a govern- 
ment attempt to formalise such 
activities. But such a move would 
face practical hurdles that could, 
surprisingly, include reluctance of 
leading private security companies 
to take on duties that the govern- 
ment might want to offload. 

Other problems include doubts 
among senior police officers about 
the ability of the private sector to 
give an adequate service and politi- 
cal arguments about taking police 
activities out of the state's bands. 

Reputable security companies 
believe that the opportunities cre- 
ated in a feat growing sector are 
leading to an influx of "cowboy” 
operators whose disreputable, or 
incompetent activities, reflect badly 
on the entire industry. - ‘TV 
• .The UK market for private secu- 
rityi 1 (already one of Europe’a- big- 
gest, is growing with the intnoduc- 


Alan Pike says fast-growing, unregulated security groups 
are causing concern in the UK industry - and the police 

Hot under the 
collar of the law 


tion of private management of pris- 
ons and rising demands for security 
guards at shopping malls, industrial 
estates and other locations. 

According to a study last month 
for the Economic and Social and 
Research Council, the sector 
employs at least 162,000 people. This 
would make the sector as hig in 
employment terms as the police. 
The core security guarding market 
is worth about £lbn a year. 

Information is short because the 
industry lacks statutory regulation. 
Anyone with a van, a mobile tele- 
phone and a convincing-looking dog 
can set up a security company. Cyn- 
ics add that a criminal record is no 

impPitiTYwm t 

Reputable companies deplore the 
absence of regulation. The British 
Security Industries Association, 
which represents most of the lead- 
ing operators, senior police officers 
and opposition MPs all support stat- 
utory regulation and licensing of 
security companies. 

The government has rejected 
such demands for action. It Praha's 
self -regulation and has told indus- 
try representatives that licensing 
would favour bigger companies and 
so be anti-competitive. It is not con- 
vinced that “cowboys” are more 
prevalent than in any other sector. 
Leaders of the industry may, how- 
ever, insist on regulation to control 
rogue operators as the price for tak- 
ing on any police duties. 

Even with statutory controls, 
some security company managers 
share phiftf ctmatahipa * reservations 
about the implications of transfer- 
ring police work to the private sec- 
tor. Mr David Dickinson, director of 
security company Group 4. told the 
Association of Chief Police Officers 
last month that the role of security 
companies most be confined to 
crime prevention and not stray into 
the area of law enforcement He 
fears that the public would fail to 
understand a blurring of the edges 
between companies such as his and 
the police. 

Setting a limit on the rule of secu- 
rity companies would, -however, 
allow scope for imaginative develop- 
ments in joint working between the 
jilibtic and private' 1 sectors. Some 
police forces, Mr Dickinson says, 
already employ private - security 
companies to guard their own head- 



quarters. He suggests the police 
should consider whether to spend 
some of their budgets on buying in 
"preventative uniformed patrols in 
the community under the total con- 
trol of the chief constable”. 

Chief constables ' control is likely 
to emerge as a central Hwma in the 
police service’s response to any gov- 
ernment attempts to introduce a 
greater private role in policing. 

The service is unhappy about the 
prospect of two-tier policing - it 
holds passionately to the view that 
whenever a police officer walks 
along a street he or she might be 
confronted with any 'number of 
em e rgencies, and must be trained 
and equipped- -for '.them. alL But if 
the private security industry won 
statutory regulation, .-police confi- 
dence in it would increase. That 


would put pressure on chief consta- 
bles to become managers of a 
"mixed economy” of policing. 

They could, in a pattern becoming 
increasingly familiar in the public 
sector, retain overall responsibility 
for activities carried out under con- 
tract by other agencies. There is a 
precedent for this: chief constables 
are now responsible for the manage- 
ment of large numbers of ci vilian 
-staff recruited in recent years to 
relieve police officers of behind-the- 
scenes support duties such as run- 
ning control rooms. 

A "mixed economy” approach 
was -proposed last month by an- 
independent inquiry into police 
raids. and.- responsibilities initiated -r 
by two academic bodies, the Police*. 
Foundation ftnd the Policy Studies'" 
Institute. It raised the possibility of 


street patrols nm by local authori- 
ties, community groups or private 
security companies, operating 
under the direction of the regular 
police. Such support groups could, 
suggested the inquiry, relieve the 
police of administrative burdens 
such as delivering summonses or 
making inquiries about under-age 
drinking in public houses. 

The inquiry's ideas have alarmed 
the Police Federation, which repre- 
sents the rank and file. "It is esti- 
mated that the police service costs 
about 3ip a day per head of popula- 
tion." says Mr Fred Broughton, its 
chairman. “By raising public spend- 
ing by a few pence per head, it 
would be possible to put more 
police officers on the streets. They 
would be real, fully-trained officers 
capable of dealing with everything 
that arose, unlike the alternative 
patrols that are being considered." 

T he federation scorns the 
idea of substituting 
police officers with low- 
er-cost replacements; but 
there are fears in 
Britain's police stations that some 
chief constables, who are about to 
become more accountable under 
fixed-term contracts, may be 
attracted to It as a means of hying 
to meet and finance public demand 
for more street patrols. 

As last week's reaction to the 
Wandsworth plan showed, transfer- 
ring police duties to other providers 
generates ethical and constitutional 
concerns. Such worries have not 
been a obstacle before in the gov- 
ernment’s law and order policies. 
The introduction of private prison 
management was not halted by the 
argument of opponents that only 
state employees, untouched by the 
profit motive, should be allowed to 
deprive individuals of their liberty. 

Having foiled to deflect ministers 
on that issue, critics could not with 
equal seriousness claim that it 
would be an outrage for charities to 
become responsible for lost dogs, or 
private security companies or 
motoring organisations to escort 
wide loads along motorways. 

But the argument does not end 
there. Those activities most suited 
to contracting out - from lost prop- 
erty to routine patrols - are the 
ones that bring ordinary citizens 
into most contact with the police 
service. Take them away, and 
where does it leave the regular, 
front-line police? As an Increasingly 
remote, heavily armed, centrally 
-deployed force, say critics - some of 
them in the police service itself. 

This raises big constitutional 
questions. Yet they may not be 
heard amid the clamour from a pub- 
lic that' wants more visible' protec- 
tion from burglars, car thieves and 
‘muggers,' and is not particularly 
concerned whether the protectors 
wear the > uniforms of the police, 
Securicor or the local council. 


Angus Foster on a Brazilian habit that is part inducement, part consideration, part bribe 

lust junk the jeito 


T here is a word newcomers 
to Brazil learn quickly. It 
makes them flinch at first; 
later it triggers a bead of 
sweat, and then it brings on a ner- 
vous laugh. It is used sparingly, 
even by long-term residents, 
because they sense its ability to 
strip away an outsider's defences 
and launch him, naked, into the 
cauldron of Brazilian culture. 

The word is jeilo and, like a for- 
mula for poison it is harmless 
unless you know what it means, tt 
is a way or scheme to get around 
(rather than confront) a problem in 
Brazil It can involve exchanging 
favours or outright bribery. And in 
Brazil there are a lot of problems. 

Assume you have arrived in Bra- 
zil and want a telephone line. If you 
approach the local telephone com- 
pany, its officials will merely laugh. 
The waiting list is a couple of years 
long, by which time your posting 
will have ended. Your options are to 
keep your sanctity but go without a 
telephone or, you are told, there is a 
jeito - you can “buy” a black mar- 
ket line for about $3,000. 

The next problem is to get the 
service working. Your local tele- 
phone company is happy to activate 
the line - for the payment of a 


small jefor. But to install the actual 
telephone, the best jeito is to use a 
private company, which usually 
means an off-duty phone engineer. 

Now comes the tricky bit The 
off-duty engineer who installed the 
telephone is not allowed to link 
your telephone to the activated lnw 
The only way to get it linked is to 
rail another, on-duty an gtnaor and 
to pay him a jeito to go off duty 
momentarily while he overlooks the 
fact that your line is black market 
and makes the connection. 

If this scenario seems unlikely, 
let's just say it happened to a 
friend. 

The jeito operates in almost every 
field of Brazilian life and often 
crosses into nepotism or corruption. 
Those in government dispense jeitos 
to friends and relatives, helping 
tham find ways around the bureau- 
cracy and to get Jobs. Some argue 
Brazil’s entire political system, 
based an regional alliances, would 
be paralysed without the flows of 
favour and patronage between the 
capital, Brasilia, and the provinces. 

No one knows how it started. 



p^nvliidi never 
■ wo uld be miised 


Some say the jeito was travelling 
below deck when the Portuguese 
arrived nearly 500 years ago. Others 
argue it grew up in Brazil, where 
circumventing colonial law was cru- 
cial, given the size of the country 
A nd the many weeks it took central 
government to relay decisions. A 
third school sees the jeito as a Bra- 
zilian cultural icon, a fusion 
of the Portuguese and west African 


affinity for compromise. 

The jeito may appear harmless 
abroad, from where it can be 
shrugged off as an endearing, 
faintly exotic aspect of Brazilian 
life. And it has many supporters in 
Brazil who argue it would be a less 
interesting country if it emulated 
northern European morality. Even 
the most sanctimonious foreigner 
soon learns that jeitos seem less 
naughty the more they are used. 

But the thna has come to abolish 
the jeito. This is partly because it is 
out of date. Since Brazil's return to 
democracy 10 years ago. the popula- 
tion has been demanding more 
transparency from public officials. 
Both the front-running candidates 
for this year’s presidential elections 
have, for example, had to dump 
their running mates over allega- 
tions that they used one jeito too 
many for personal profit while 
members of the senate. 

But the main reason to ban the 
jeito is that it, together with high 
inflation, forms part of a way of life 
which has corroded Brazil's social 
fabric for decades. Indeed, one par- 


ticular jeito can be seen as a leading 
cause of Brazilian inflation. 

Successive generations of politi- 
cians abrogated their responsibility 
to control spending and price rises. 
They did so by, among others, try- 
ing to protect wages through the 
jeito of raising pay in line with 
inflation indices. As the rise in the 
indices accelerated, increases in 
wages and other prices became big- 
ger and more frequent, exacerbat- 
ing the inflationary mess. In June 
this year, the monthly inflation rate 
exceeded 50 per cent 

Brazil is now tackling its infla- 
tionary legacy. A new currency 
launched in July, called the Real 
and linked to the US dollar, has led 
to a sharp drop in price rises. 

Much remains to be done, includ- 
ing overhauls erf the tax and social 
security systems. But the start has 
been made, and Brazil finally 
appears ready to cast off the stigma 
of being the last large Latin Ameri- 
can economy to bring inflation 
under control. 

It will only succeed, however, if it 
sticks to the difficult task of limit- 
ing spending and p unishing corrup- 
tion. It must also refrain from the 
temptation to get round today’s 
problems by finding another jeito. 


Observer 


Hanson goes 
exploring 

■ Rarely does a humble hack get to 
fly in one of Lord Hanson's 
helicopter fleet 

But yesterday Observer 
temporarily joined the elite, visiting 
Air Hanson's swish base in Surrey, 
for the launch of a new and rather 
special McDonnell Douglas chopper. 

A technologically impressive 
beast, the MD Explorer wdl be 
distributed in the UK and elsewhere 
by Air Hanson. Its big novelty is the 
lack of a tad-rotor. Given that 20 
per cent of helicopter accidents are 
caused by the tail-rotor, which is 
also a very noisy component, it 
should be a big selling point 

With no tail-r o tor, US police and 
military can sneak up on the bad 
guys, at a price-they-like, with 
running costs of $375 per hour 
against a minimum of $500 for 
tail-rotor competitors. How come 
nobody has thought oT It before? 

Ah, but they have: “I saw scans 
photos of a Russian trial version 
bark in the 70's, but nothing since 
then,” says an MD executive. Of 
course, the proof of the pudding is 
in the eating.. 

Sadly, Observer cant tell you just 
how quiet the Explore- is since 
yesterday’s chopper flight was 
grounded, thanks to a missing vital 
part 

However, McDonnell Douglas has 
promised Hanson that the rogue 
item will be found in time for nest 


week's international air show at 
Famborough. 


Tipperary 

■ It gives a lift to any theatre when 
the prime minister turns up in the 
audience. So it was on Wednesday 
when John Major, accompanied by 
wife Norma, slipped into the 
National Youth Theatre's revival of 
Joan Littlewood's Oh What a Lovely 
War. 

A symbolic choice, perhaps, given 
the coincidence with the IRA's 
ceasefire. Littlewood's piece begins 
with a flush of nationalism at the 
outbreak of the first world war, but 
ends with a popular rejection erf war 
of any kind- 


Pearly king 

■ Is an interesting culture change 
hnrnmept at Time magazine, the 
weekly flagship of the Time Warner 
empire? 

Norman Pearistme, former 
executive editor of the Wall Street 
Journal, is being tipped by the New 
York Times to take over as editor in 
chief of Time Inc, the parent of 
Time, Fortune, Sports Illustrated, 
and People. 

Pearistine has interesting social 
and personal connections. His third 
wife, Nancy Friday, has made a 
career from writing up 
(anonymous) sexual fantasies. Her 
My Secret Garden (1979) regaled us 
with women's i m ag inin g s , whQe 



Ts this to be a permanent cessation 
of balaclava, Eamtrnn?* 

Men in Love (I960) crossed the 
gender divide for the same purpose. 

FrandS Deaty, in hiS entertaining 
book The Power and The Money, 
Inside the Wall Street Journal, 
quotes Pearistine saying to him that 
Nancy had "emotionally 
emancipated” him. 

Pearikine is far too glitzy to be 
mistake n for another Hanrv Luce. 
Evan so, Time backs might 
welcome his arrival if he puts a stop 
to the long running rumours that 
the mags are up for sate. 

Indeed, Dealy reckons that whan 
Pearistine took over as manag in g 
editor of the WSJ, in the first 10 
months be Incurred $lL4m in 
unexpected salary coats, by hiring 


143 new staff instead of the 
budgeted 38. 

Dust off those CVs. .. 


Peace n’ pizza 

■ You can't fault the Italians for 
entrepreneurial spirit With the ink 
hardly dry on the IRA's ceasefire 
anno uncement, the FT’S Milan 
office was rung up yesterday by one 
would-be fast food magnate. 

The carter, currently employed by 
a Japanese h ank, was wondering 
how she and her husband, who 
works in a TV repair shop, should 
go about setting themselves up in 
Belfast to sell focacda - a northern 
Italian pizza-like dough - to the 
peaceloving inhabitants. 

As it turns out Sonia Paiatto and 
Marco Di Fiore had already decided 
Belfast was the place for them, 
ceasefire or no ceasefire, and were 
preparing to chuck in their jobs and 
indulge their passion for cookery. 
“We just went there cm holiday and 
loved it" explained Paiatto. 


Native’s return 

■ Love him or hate him, Ian Kerr, 
who penned LTSminence Noire for 
the pages of International 
Financing Review, the bible of the 
Euromarkets, brought a biting wit 
to the antics of friend and foe. 

Since April, when he was lured to 
rival Euro week, there has been 
something of a void at the 
staggeringly expensive l £2,000 plus 


per annum) yellow-jacketed weekly. 

Re-enter Peter Krijgsman, 39, 
former editor-in-chief of IFR, who 
left last autumn, and has now been 
rehired as a bumble tittle-tattle 
recycler. Unlike Kerr, who had 
headed fixed income research at 
Kidder Peabody, Krijgsman has 
never seen the market from the 
inside. A some-time diarist at 
Accountancy Age - “funnier than it 
sounds" - he has his contacts 
however, not least Kerr’s enemies, 
from whoa he would hear faithfully 
every Monday morning at IFR. 

But he will have a hard act to 
follow in the bitchiness and 
snobbery stakes, not to mention 
matching Kerr's penchant for 
coining nfalmarnefi which stick. CS 
First Boston's Alan ‘'Weetabix” 
Wheat, his spouse Mrs Shredded 
Wheat, and Christopher Robin (the 
gangly new London boss of UBS 
David Robbins) are just a few of the 
big cheeses who have been 
rechristened by Kerr . 

Even so, if Kriegelburger focuses 
on the current movers and shakers, 
rather than yesterday's men, he 
should be able to mine a tolerably 
untapped seam. 


Veggie-burghers 

■ Norwegian judges have deemed 
it insulting to call a police officer an 
onion, fining a motorist NKrlOOO 
for having done so. 

Maybe the criminal should have 
opted for safety and simply called 
the officer a Swede? 






Specified 

Worldwide 


FINANCIAL TIMES 

Friday September 2 1994 


Japanese group to set up Chinese parts centre JJS seeks Ini 

Toyota signals plan to tH shar P cn Tiny e 

€/ o jl nilAC on ~ 

1 1 V • 1 • One cannot fell to admire Mr Tiny ■■■ 

build vehicles m China risk from saasssssE 



THE LEX COLUMN 


Tiny escapes again 


By Mlchiyo N ak arooto in Tokyo 

Toyota, Japan's largest 
carmaker, yesterday gave the 
strongest indication yet of its 
interest in setting up vehicle 
manufacturing operations in 

rSiwwi , nrmnnwHng 1 that it WOUld 

establish a support centre for 
component suppliers there. 

The news came as Mr Tatsuro 
ToyodaToyota’s president, flew to 
Belling with other senior execu- 
tives of the company on a five- 
day tour to strengthen ties with 
china ami investigate the mar- 
ket 

Mr Toyoda, will discuss the 
plan for the support centre with 
the Chinese government and 
local vehicle makers. 

The centre is being set up in 
rp epr > Mga to by tho Chinese 
gove rnment for foreign marmfers 
turers to help the country 
develop its vehicle parts indus- 
try. 

In July, China annmniftwi a 
moratorium on all new vehicle 
manufacturing facilities until 
1996 and invited foreign compa- 
nies to extend support in build- 
ing up the components industry. 




Tatsuro Toyoda: strengthening 
Toyota’s ties with China 

The establishment of a supplier 
support centre, where Toyota 
engineers would rertend technical 
assistance to parts suppliers, is 
not in itself a big co mmitme nt by 
Toyota to the Chinese market 
However, the move reflects Toyo- 
ta's interest in setting up man u- 
facturing facilities in chirm once 


the moratorium has been lifted. 

“ft is a step looking towards 
Bio fixtu re ami our ambitions Cor 
the Chinese market,” a Toyota 
representative said yesterday. 
The company is considering 
setting np a joint venture 
manufacturing facility in 
he said. 

Toyota sold about 50,000 
vehicles in China last year, or a 
quarter of an Japanese vehicle 
sales in China and just over 3 per 
cent of the Chinese market of 
L5m. 

The Japanese company pro- 
vides technical assistance to a 
bus manufacturer in Shenyang 
and an afffh'a^ Dsuhatsu Motor, 
extends hel p to a passen- 
ger rarmnkor in TfaZQZn. 

Toyota has been slow to 
express an interest in manufac- 
turing in China. It was not 
»m rmg a handful of fo re i gn car 
companies - including Peugeot, 
Volkswagen and Chrysler - 
which set op joint ventures in 
china w hite sfprh investment was 
stni open. 

However, Toyota says it now 
fads the market has potential for 

local Tnannfar-tm-i ng- 


World stock prices fall on 
worries over interest rates 


By PhBki Cofloan, 

Economics C o rre sp ondent 

Pessimism on the future 
direction of interest rates 
affected world financial markets 
yesterday, in the wake of poor 
price date in the US, strong out- 
put figures from Germany and a 
Bundesbank decision to leave 
nffirfuj rates unchanged. 

Bond and equity prices fell in 
Germany, white in the US, long 
Treasury bond prices and the 
Dow Jones Industrial Average 
drifted lower in early trading. In 
London, the FT-SE 100 Index 
dosed 3A8 points down at 3.21&5. 

Equity markets started 1994 in 
bullish mood with many inves- 
tors believing that interest rates 
had further to fall, particularly in 
Europe. But the Federal 
Reserve’s five increases in inter- 
est rates, allied to the unexpect- 
ediy strung rebound in European 
economies, has gradually made 
investors less optimistic about 


the scope for further European 
cuts. 

Some countries, such as Swe- 
den and Italy, have been forced 
to raise rates and in others, such 
as Britain, it is dear that the 
next move in rates will be 
upwards. 

Most analysts had expected the 
Bundesbank council at its fort- 
nightly meeting yesterday to 
leave official rates, including the 
repo rate, unchangpri. Neverthe- 
less, figures showing that Ger- 
man industrial production had 
risen by a monthly 22 per cent in 
July reinforced the views of those 
who believe that German rates 
are very dose to their bottom. 

The Frankfurt Dax equity mar- 
ket index dosed only 12A5 points 
down at 2^00.80, but dropped fur- 
ther in after-hours trading once 
the August US National Associa- 
tion of Purchasing Management 
data were released. Although 
those showed a fall in the overall 
inde x , indicating some slowing of 


the pace of economic growth, the 
prices component rose to its 
highest level since August 1968. 
Any sign of Mure US inflation 
raises fears that the Federal 
Reserve will push for further 
increases in interest rates. 

By lpm New York time, the 
Dow Jones Industrial Average 
had fallen 10.69 to 8,902.73. Com- 
bined with a fall In Treasury 
bond prices, the result was down- 
ward pressure on the dollar, 
which fell against both the yen 
and the D-Mark in European 

t rading 

The early fall in the Dow also 
depressed European stock mar- 
kets, with the CAC 40 index dos- 
ing 34.17 points lower at 2,03191. 
The French market is still suffer- 
ing from the decision by four 
French banks this week to 
increase their lending rates. 

London Stock Exchange, Page 31 
World stocks. Page 38 


derivatives 


By George Graham 
in Washington 

US bank regulators are proposing 
new capital adequacy rules to 
take account of banks' exposure 
to risk from their holdings of 
derivatives, which are coming 
muter increasing scrutiny In 
Washington. 

The Office of the Comptroller 
of the Currency, which regulates 
ngtinriaTiy char tered banks, yes- 
terday published the new rules 
for a two month comment period, 
and the Federal Reserve Board 
has also proposed similar rales. 

An OCC official described the 
proposals as a “refinement”, but 
said they could require banks to 
hold more capital to offset the 
risk of some of their holding s of 
derivatives, such as futures or 
mortgage- backed securities, 
whose return Is derived. Cram 
another security or Index. 

The new rules would change 
the formula which estimates 
exposure, by converting the 
notional principal amount of 
derivatives contracts into the 
equivalent of loan expos ur e, and 
would sharply increase the risk 
weighting for contracts nmrad to 
equities, precious metals other 

than gold, «id cramnoditMW 

Earlier tntpmatinnal standards 
for bank capital adequacy ratios 
did not explicitly cover this kitiri 
of derivative contract But many 
national bank supervisors, 
including the US, have infor- 
mally allowed banka , when cal- 
culating exposure, to use the risk 
weighting applied to exchange 
rate contracts, which is 1 per 
cent for less than one year and 5 
per cent far longer maturities. 

Under the new rules, gold 
would still use this formula, 
because its volatility is estimated 
to be comparable to foreign 
exchange contracts, but other 
contracts would have a heavier 
risk weighting. 

In calculating risk, equity- 
linked contracts would be 
weighted at 6 per cent of the 
notional p rincipal for maturities 
undo* one year, 8 per cent for one 
to five years and 10 per cent for 
longer terms. Other precious met 
als would be weighted at 7 per 
cent for maturities up to five 
years and 8 per cart for longer. 
Other commodities would be 
weighted at 12 per cent up to five 
years, and 15 per cent for longer. 


Media rules I US and N Korea arrange new talks 


(km tinned from Page l 

other it needs to safeguard cul- 
tural pluralism, and diversity. 
Even if the Commission succeeds 
in winning support for draft leg- 
islation, it would still be up to 
member states to deride whether 
to proceed with a new EU direc- 
tive. The European Parliament 
has, however, thrown its weight 
behind new EU rules. 


Continued from Page 1 

The talks are a preparatory 
step to the resumption of 
high-level bilateral negotiations, 
which will begin on September 23 
in Geneva and are intended to 
achieve a final settlement of the 
North Korean nuclear dispute. 

South Korean officials 
expressed concern that North 
Korea had already won a diplo- 


matic victory by persuading the 
US to hold discussions about the 
establishment of relations in the 
North Korean capital The open- 
ing of liaison offices was used by 
the US to establish links with 
China in the early 1970s. 

There are signs of increased 
friction between South Korea and 
the US on the proposed settle- 
ment of the nuclear issue. Some 
officials in Seoul, worried in case 


their government is being left 
out, are criticising the US for 
rushing towards an agreement 
with North Korea. 

Meanwhile, Mr Kim Pyong-iL 
stepbrother of Mr Kim Jong-fl, 
said that the latter would shortly 
take formal power in North 
Korea, as the official assumption 
of leadership had been delayed 
because of an extended mounting 
period for his father. 


FT WEATHER GUIDE 


Europe today 

Torrential rain followed by frequent 
ahowera wffl move into the Alps, north 
Italy and south-east Ranee. North and 
north-west Italy may have floods tonight. 
More rain and thunder showers wffl move 
along a cold front from Austria to 
southern Scandinavia, spreading to the 
Bribe states in the afternoon. 

England and Scotland wffl be mostly 
sunny, but there wffl be doud and rain In 
Ireland. Afternoon temperat u res will 
reach about 3QC In the Balkans, Greece, 
and parts of Turkey. 

Five-day forecast 

The central Mediterranean will remain 
unsettled doing the weekend, but the 
heaviest showers wffl be confined to 
central Italy. High pressure wffl bring 
calm and mild conditions to France, the 
Low Countries, centra! Europe and the 
Afes. The UK win have Bght rain and 
sunny intervals. Temperatures in 
southern Spain wffl reach 38C. 


IIOOO 1010 1020 












W.iojo.l 




mmm 


HtG ” 

1020 ^ 


IPeSf®? 


Mg 

Situation at IS GUT. Totnpotmm maxkntm far day. Fanes** bj Mateo Oonsutt at the N&hartands 


Abu Dhabi 
Accra 
Algfara . 
Amsterdam 
Athens 
ABanta 
B. Atos 
Buharn 

O-s-Uilini 

EXriiyniM 

Barcelona 


Mawmvn 

Bsfflng 

Mr 

30 

Caracas 

Mr 

2S 

i Faro 

CaWua 

Belfast 

Mr 

20 

Card HT 

sun 

19 

i Frankfurt 

sun 

42 

Bdurade 

Mr 

32 

Casablanca 

M t 

27 

Geneva 

cloudy 

28 

Berlin 

thund 

24 

CMcago 

Mr 

21 

Gfenttar 

sun 

32 

Bermuda 

found 

31 

Cologne 

Mr 

21 

Glasgow 

rain 

18 

Bogota 

Mr 

16 

Dakar 

cloudy 

W 

Hsibug 

sun 

32 

Bombay 

rain 

28 

Dales 

cloudy 

33 

Helsinki 

maid 

30 

Brussels 

shower 

19 

oen 

fair 

35 

Hong Kong 

Mr 

12 

Budapest 

Mr 

32 

Dubai 

sun 

36 

HonoMu 

sun 

19 

CJtogen 

shower 

20 

DuUn 

Mr 

18 

ManH 

rekt 

32 

Cato 

sun 

35 

Dubrw* 

SUI 

30 

Jstavta 

Mr 

2S 

Cape Town 

Mr 

18 

Ettourgh 

sun 

19 

Jersey 


We can t change the weather. But wc can 
always take you where you want to go. 


Lufthansa 


Karachi 

Kuwait 

l_ Anodes 

Laa Pdmes 

Una 

Uafeon 

London 

Ilf* 

Lyen 


aun 

29 

Madid 

sun 

29 

Rangoon 

MR 

29 

fair 

21 

Manxes 

Mr 

28 

Raykjavffl 

rain 

13 

Shower 

18 

Mafia 

sut 

31 

no 

Mr 

29 

sun 

28 


sun 

19 

Rome 

thund 

ao 

sun 

2Q 

Mans* 

shower 

32 

S. Freco 

Mr 

21 

shaver 

20 

Madmens 

shower 

18 

Seod 

Mr 

32 

Mr 

17 

Mecdco City 

doudy 

19 

Singapore 

shower 

32 

doudy 

33 

Miami 

Mr 

32 

Stockhokn 

doudy 

19 

far 

30 

man 

Mn 

22 

Strasbourg 

shower 

18 

sun 

28 

Montreal 

fat 

14 

Sydney 

Ur 

24 

Mr 

32 

Moscow 

fat 

IS 

Tangte 

SUT 

■29 

Mr 

18 

Munch 

nkr 

19 

Tel Aviv 

wn 

32 

doudy 

31 

Nairobi 

Mr 

23 

Tokyo 

far 

30 

sun 

44 

Naples 

thund 

31 

Toronto 

Mr 

17 

Mr 

27 

Nassau 

la* 

30 

Vancouver 

Hr 

18 

sin 

28 

New York 

aun 

21 

Venice 

found 

27 

cloudy 

19 

Mee 

thuid 

25 

Vienna 

doudy 

29 

SUI 

30 

Moods 

Mr 

37 

WOmi 

cloudy 

24 

Mr 

20 

Oslo 

rain 

15 

Waahkigton 

ft*- 

20 

drawer 

19 

Pm is 

Mr 

20 

WdSnflton 

shower 

7 

Shower 

20 

Parti 

Mr 

IS 

Winnipeg 

Mr 

19 

Mr 

25 

Prague 

thund 

23 

Zufch 

shower 

IB 


One cannot fell to admire Mr Tiny 
Rowland’s ability to prevail in board- 
room battles. Nevertheless, bis defeat 
of Hw* campaign to oast him. as of 
Lonrfao’s rhiaf executives leaves out- 
side shareholders in an uncomfortable 
position. The company now faces the 
p os s ib il i t y of a long power struggle 
between two rival chief executives. Mr 
Dieter Bock, the other chief executive. 
may hope that Mr Rowland will retire 
after a decent interval. But there can 
be no guarantee that, having won yes- 
terday’s skirmish, he will now vacate 
the battlefield. 

Mr Bock hfmswif stands ac cu s e d of 
poor judgment by mounting his attack 
a gainst Mr Rowland at this Him»_ He 
deafly overestimated bis rhannas of 
winning. It would have been better to 
wait two months until the balance of 
the board ha if shifted further in bis 
favour. It is bard to see how the two 
men can now work togethe r . 

The mafn rfamagp to shareholders is 
that Lonrho’s corporate strategy will 
remain unresolved. There Is signifi- 
cant potential to enhance shamhnliter 
value by streamlining Lonrho’s ragbag 
of businesses. Minority stakes in some 
of the African operations could be 
floated to reveal the full value on the 
group’s assets. Alternatively, busi- 
nesses could be completely demerged 
or sold to trade buyers. Some analysts 
believe the group’s break-19 value is 
180p-200p a share, compared with last 
night’s dose of 143p. Mr Bock, a trader 
of assets at heart, seems keen to 
embark on some such programme- But 
so long as Mr Rowland still wields 
power at Lanrho, radical restructuring 
looks unlikely. 

Ladbroke 

The warm glow of 'approval -for. Lad-' 
broke's new open management style 
has already dissipated. The shares 
have lost an the ground gained early 
in the year following Mr Cyril Stein's 
decision to cut his links with the 
g r o up he created. It is not that Mr 
Peter George, the chief executive, has 
drifted back into the bad old ways. 
Yesterday’s half-year figures were a 
model of clarity. The trouble is that a 
clear view of trading prospects Is 
hardly uplifting. 

The performance of Hilton hotels is 
especially disappointing. Even aDow- 
ing for frrmnmir recovery in oontinen- 
tal Europe, it will be a long time 
before ladbroke s en s a decant return 
an the £L8bn capital tied up in that 
business. That is not to deny the 
long-term attractions of hotels, tar the 


FT-SE Index: 3216.5 (-34.8) 


Shampdcereiathrefekltfe ‘ 
FT-S&AAS-Shere Index 



1969 90 91 92. - 93 :94 


logic of its marriage to gaming within 
the Ladbroke empire. The group’s 
modest move back fo tn ragfpra could 
create additional synergies. But nei- 
ther hotels nor gaming is likely to 
deliver the kind of aammg g growth 
the stock market was anticipating ear- 
lier in tire year. 

This might lagpiam Ladbroke’s deci- 
sion to invest in the Texas DIY chain 
rather than look for a quick sale. Even 
mnHaiet marg i n improvements on Tex- 
as’s £70Qm animal sales would add pep 
to group profits. Optimism on that 
score - and the prospects for early 
realisation of the remaining £600m 
property portfolio - should limit the 
downside for the shares. But it is diffi- 
cult to see that Ladbroke brings much 
to retailing in the longer term. The 
snraiw Ladbroke places its bets firmly 
on hotels and leisure the better. 

Reckitt & Column 

Since, the European rationalisation 
programme announced by Reckitt & . 
Caiman yesterday is Its second such 
initiative in under five years it is 
debatable how “.exceptional* the 
related £56m provision really is. The 
feet that the company was vague on 
details only ad de d to the impression 
that it was part of an an-gtfhig tfroowL 
True, the previous operation was car- 
ried out before the group acquired 
Boyte-iOdWay in 1990. Bui that sug- 
gests it ban token the group rather a 
kmg tune to identify opportunities to 
rationalise manufacturing and distri- 
bution. ft is tempting to conclude that 
the programme is a reaction to the 
group’s poor performance in Europe. 

The fall in European profits was dis- 
appointing when compared with Uni- 


lever's results, and though much can 
be put down to recession, the signs of 
switching to own-label products raise 
questions about the eventual impact 
of economic recovery. In North Amer- 
ica consumers are not returning to i 
previous spending patterns in a hurry 
while competition in the supermarkets 1 

remains interne. That in turn throws 
doubt on Reckftfs confidence that it 
can continue to increase margins 
which have now topped 16 per cent 

Even if it continues to grow well In 
Latin America and Asia the group out- 
look is dull unless it can restart sales, 
growth In the mature economies. 
Against this background it would be 
surprising if Reckitt were not looking 
at large potential acquisitions like 
Eastman Kodak's household products 
business. But only the chance that 
Reckitt itself might become a target 
justifies the stock’s small premium 
rating compered to Unilever. 

Body Shop 

The irmrii-harnlrinri US article cm the 
Body Shop contained no shockers. The' 
main categories of criticism bad 
already been leaked. True, a lively 
debate over whether the detailed 
charges are accurate looks set to rage 
fin some time. But the City has come 
to the frateirmten that - Hie criticism 
will have precious little impact an the 
business. A few so-called ethical share- 
holders may expect purity from the 
Body Shop. But most do not If ethical 
investors sell out, others will pick up 
their shares at a bargain. 

The City will only worry if Body 1 
Shop's image is so tarnished that cus- 
tomers stop buying its products. So 
. far, it has taken the view that they 
will not Squabbles with franchisees 
add a few shampoo spillages are 
unlikely td turn people away from 
Body Shop. Most customers are* 
attracted by its bright colours and 
powezflil aromas. 

This is not to say that Body Shop 
cannot learn lessons from the saga. In 
a moment of pique, Mr Gordon Rod- 
dick, who with his wife Anita founded 
the Body Shop, said feat maybe they 
should “no longer even try to be 
remotely ethical”. Reflection will show 
that this is not the lesSdxi. Companies 
liicw ind i vid u als, should behave .ethi- 
cally, though, the exact definition of 
such behaviour is open to debate. The 
lesson is rather one of presentation. 
Those who proclaim their virtue as 
energetically as the Body Shop has 
leave themselves wide opexLto criti- 
cism if they make the Slightest rife. - 


rinO 


mc <> 9 r ° 


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Freeph one: 030 0-749000 tor information 


FINANCIAL TIMES 


COMPANIES & MARKETS 


g)THE FINANCIAL TIMES LIMITED <994 


Friday September 2 1994 



IN BRIEF 


Oaf’s offspring 

produce growth 


Dutch and UK truck companies created oat of the 
collapse of the Daf group last year are increasing 
their profits and making a first significant invest- 
ment m a new range. 

I^yland Trucks Manufacturing, the UK truck 
maker says tt will spend £25m ($3&25m) to design 
and develop a medium-sized truck range. Most of 
the new vehicles will be for delivery to Daf Trucks, 
the Dutch truck maker. Page 20 18 


Body Shop expose fails to shock 

The long-awaited article that has helped trigger 
controversy over the image of Body Shop Interna- 
tiona], the cosmetics and toiletries group, was pub- 
lished yesterday to the bemusement of investors 
and ethical researchers. Some commentators 
expressed doubts about the potency of its revela- 
tions, while Body Shop flatly rejected its contents. 
Page 22 


Amcor shrugs off competitive markets 

Profits at Amcor, the Australian paper and packag- 
ing group, rose to A$336£m (US$251m) in the year 
to June, despite fierce competition. Page 20 

Western Mining fads 28% 

Western Mining Corporation, the Australian mining 
group, reported a fall of 27.8 per cent in equity-con- 
solidated profit after tax but before abnormal items 
to A5119.7m (USS89m) in the year to Jane. Page 20 

Net Income up at Sandoa 

Sandoz, the Swiss pharmaceuticals, nutrition and 
chemicals group that has just acquired Gerber Food 
Products of the US, raised net income 2 per rant In 
the first half to SFrl.Olbn ($760m). Page 19 

Canadian banks ahead In third quarter 

Canada's two biggest banks. Royal Rank of Cana- 
da’s and Canadian Imperial Bank of Commerce, 
posted sharply higher third quarter earnings, 
driven by strong lending activity, rising fee income 
tight expense control and lower loan losses. Page 19 

Speculation persists around NBC 

Speculation about a possible takeover of the NBC 
television network continued after a senior NBC 
executive failed to issue an outright denial that 
General Electric, NBC’s parent group, may sell all 
or part of the network to lime Warner. Page 19 

Tdefdntea rises at halfway 

Telefonica, the state-controlled Spanish telecommu- 
nications group and the biggest company on the 
Madrid stock exchange, lifted first-half consolidated 
net profits by 4.7 per cent to Pta52bn ($397m)onthe 
hark of increased demand, lower financial charges 
and increasing inter national business. Page 19 

Rods Royce lifts profits 29% 

Rolls-Royce, the aero engine and industrial power 
group, yesterday reported a 29 per cent rise in pre- 
tax profits for the first half of 1994 despite a 14 per 
cart decline in sales. Page 22 

Patchy report from Vickers 

Shares in Vickers fell 7p to i88p yesterday after the 
engineering group, which makes tanks and 
Rolls-Royce cars, said it was seeing only a patchy 
recovery. Page 22 


Companies In this Issue 


ABN Amro 
AST Research 
Acatos & Hutcheson 
Aksprung Furniture 
Alfeil 

Affled Leisure 

Amcor 

Ares-Serono 

Autolatina 

BASF 

BAT Industries 
Bank Bumlputra 
Bair SWAT 
Body Shop Inti 
Brambles 
Brttish-Bameo 
CtBC 

CRP Leisure 

Canadian Imp Bank 

Cattle's 

Compass 

ONI Holding 

Daf 

DrigmCHer ■ 

EH Aquitaine 
Eng & O'saas Props 
Enrrax kid 

End ana Bdghin-Say 

FLS industries 

Fyfles 

Hortons 

Hartstone 

Hoare Govett 

Iberdrola 

Independent News 

Investor 

KotoenscfimWl 


17 

17 
23 
23 
23 
22 
20 

18 

19 

17 
31 

20 
22 
22 
19 
23 
19 
23 
19 
23 
22 
23 

18 
18 

20k 17 
23 
23 
18 
1ft 18 
23 
23 
23 
17 
19 
23 
19 
23 


Ladbroke 17, 18 

LauritzBn 19 

Lilli put 22 

Unx Printing Techs 23 

Lonrho 1 

Mercedes-Benz 18 

NBC 19 

OBvetti 17 

Page (Michael) 22 

Quarto 23 

RWE 18 

Ranh 22 

Rathbone Brae 22 

RecWtt & Cotman 18 

Reuters 31 

Rofe-Royce 31.22 

Royal Bank of Canada 19 
SWEB 31 

Sandoz 19 

Silvermlnes 23 

Stakis 22 

Stanhome 22 

T&N 23 

Tabacalera 19 

Tata & Lyle 23 

Telefdntea 19 

Toyota 16 

United Cartas 22 

United Inds 23 

VA Technologic 18 

VW 19 

Vickers 22 

Volvo 18 

Waterford Wedgwood 22 
Western Mining 20 

WRSams Holdings 23 

Yorkshire Etectry 31 

Zeneca 31 


Market Statistics 


fAnnual reports savlca 
Benchmark GMtaNlB ft 

Bond futures and attains 21 

Bond prices and yields 21 

Conunodttfes prices ® 

Written* announced. UK H 

atS currency rates 38 

Eurobond prices 21 

find interest tndtos ft 

FT-A World Indices Bae*P»fli 
FT Gold MOWS tnde* Back Pago 

FTOSMA mo bend s» ft 

FT-SE Aduanes metos ft 


Foreign exchange 38 

guts prices 21 

Line equity options Back Pape 
London share sendee 32-33 
London tradl options Back Page 
Managed funds sendee 3488 


Money markets 
Now M hood Issues 
Recast issues, UK 

Short-term Int rates 
US Merest rales 
World Stock Markets 


Chief pric« changes yesterday 


nuMcrunr pat 
Man 

labmpr 


11 


MOM 87D - 3 

Damme Bat** AM - « 

taw *r 2 - Z 3 

ftxsdte 80S ■“ ® 

Wafti 3M - 6 

UV YORK {39 


tt * 

1 3*4 - J> * 

m - iw 

zr. - **» 

3* - 3H 

its - 


I RM* 


4815 ♦ 158 


CraoS Fonder 857 - 39 

mow 867 - M 

ST 1502 - A8 

Unfcn tnwwfcH 

IfflCWPM 


- 17 


tt. MS 

res* 

Asrnmtft* 

ABM 

nopertut 

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ABN Amro goes global with 


By John Gapper in London 
and Ronald van do Krol 
in Amsterdam 

Hoare Govett. the London 
stockbroking firm acquired by 
the Dutch bank ABN Amro two 
years ago, is to be renamed ABN 
Amro Hoare Govett as part of the 
bank’s effort to create a global 
investment banking arm. 

ABN Amro, the seventh largest 

European bank, is to use the 
name for all its equity broking, 
fixed income and corporate 


finance operations around the 
world provided that it can over- 
come regulatory hurdles in some 
countries. 

The hartfe hag been b uilding a 
network of brokers in Europe, 
including the Irish firm Riada 
Stockbrokers, CIMO in Milan, 
and M assona od-Fontenay-Kerv- 
era in Paris. Along with the 
bank's own broking operations, 
these may be re-named next year. 

The use of both names is simi- 
lar to the strategy used by Union 
Bank of Switzerland when it 


acquired the broker Phillips & 
Drew in 1939. The London Invest- 
ment hanking arm was known as 
UBS Phillips & Drew until it was 
re-named UBS this year. 

However, ABN Amro’s board 
has decided to extend the Hoare 
Govett prime to Rtp*) income and 
corporate finance operations 
because it regards it as a stron- 
ger international brand name 
than its own, which was created 
in a merger in 1990. 

ABN Amro is keen to ensure 
that Hoare Govett ’ s relations 


with London merchant banks are 
not affected by the use of the 
name for corporate finance activ- 
ities. The London corporate brok- 
ing arm will still be known as 
Hoare Govett 

Mr Rijnhard van Tets, ABN 
Amro’s board member for global 
investment banking, said the 
change of name was intended to 
underline ABN Amro’s commit- 
ment to the creation of a global 
network for underwriting and 
selling securities. 

Some 40 per cent of assets 


Hoare Govett 


of ABN Amro, which dominates 
corporate hanking in the Nether- 
lands. are outside its home coun- 
try. It has a strong presence in 
the US through the La Salle 
group in Illinois, and European 
American Bank on Long Island. 

ABN Amro started running its 
equity operations from Hoare 
Govett in London this year, and 
is now trying to build up its 
European corporate finance busi- 
ness. The use of the combined 
name ABN Amro Hoare Govett 
could be used for marketing pur- 


poses later this year. But it is 
thought that the bank could have 
regulatory difficulties in adding 
Hoare Govett to the name of its 
US broking arm. 

Although the fixed income and 
corporate finance arms will still 
be run from Amsterdam, ABN 
Amro wants to expand corporate 
finance operations in London. It 
will provide finance advice and 
equity underwriting for large 
European companies. The bank 
also plans to expand its broking 
presence in Asia. 


BASF’s drugs arm 
turns to German 
generic market 


Andrew Hill reports on 10% fall in Italian computer group’s shares 


Olivetti offers calm 
words after its bruising 


Olivetti falters despite steady sales 


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ri nn ngWiiwi imf iminreirii 

Computer’s reductions. Mr Pas- 
sera painted out yesterday that 
PCs represented only 20 per cent 
of Olivetti's L8,600fan annual 
turnover (more than 60 per cent 
of group sales come from the 
systems and services activities), 
and that the average price reduc- 


lio had suffered a drop in value, 
and that investments - held to 
cope with unexpected restructur- 
ing costs - would suffer a one-off 
loss. 

• Capital raising. Mr Pas sera 
said the group was not expecting 
to increase its capital in order to 


Olivetti is ‘preparing to reap the benefits 
of a sweeping reorganisation’ says 
Mr Carlo De Benedetti, chairman 

finance investments in Italy's 


By Christopher Parfces 
In Frankfurt and Paul Abrahams 
In London 

BASF, the German chemicals 
group, is attempting to revive 
the fortunes of its Knoll pharma- 
ceuticals division by diversifyin g 
into non-patented generic drugs 
in the German market. 

A new distribution and mar- 
keting company, BASF Generics, 
will start operating early next 
year aiming to generate DM1 00m 
<$6&3m) in sales before the end 
of the decade. 

Talks are also under way with 
potential partners, indicating 
further likely moves, possibly 
into other markets. 

Knoll recently bought the 
rights to around 80 out-of- 
patent drugs from Hexal 
Pharma, one of Germany’s lead- 
ing generics makers. It also took 


use in Germany soon. 

The creations of BASF Gener- 
ics is the biggest step yet in a 
strategy developed at the end of 
last year, when Knoll re po rt ed 
its first toss, of DM6m on sales of 
DM2bn. A fall of' more than 40 
per cent in US earnings was 
blamed on price pressure from 
generic competition. 

Germany is the fastest-grow- 


By Loube Kehoe 
in San Francisco 

Computer shares cm Wall Street 
fell yesterday after a profit warn- 
ing from AST Research, the 
world’s fifth largest personal 
computer maker, prompted con- 
cerns about a possible slowing of 
growth in PC sales. 

At midday yesterday shares in 
AST had fallen $47*. or 27 per 
cent to $1316 after the computer 
maker said it expected to report a 
net loss for the current quarter 
and break-even in the second 
quarter. Compaq Computer, the 
PC market leader, was off $2‘A at 
$35%, while Apple Computer 
shares declined by Sl£ to $35 and 
IBM was trading at $67%. down 
fram$8SK. 

AST pointed to delays in new 
product introductions and recent 
sharp price cuts by Compaq. IBM 
and Digital Equipment “We have 
encountered several unantici- 
pated product development 
delays, component constraints 
and delivery issues,” said Mr Safi 
Qureshey, AST chairman and 
chief executive. 


mg and largest market for noil- 
patented generic medicines in 
Europe, accounting for nearly 40 
per cent of the $4.85bn market, 
according to a recent report*. 

In 1992, generic drugs 
accounted for about 29 per emit 
of all German prescriptions, 
making the sector worth about 
22 per cent of all prescription 
sales at about DM2.67bn. 

BASF is the last of Germany’s 
big three chemical groups to 
gain a foothold in generics. 

hi March, Bayer spent $130m 
on a 28.3 per cent stake in 
Schein, a privately-owned US 
group. That followed last year’s 
(546m purchase by Hoechst of a 
51 per cent stake in Copley 
Pharmaceuticals, another US 
company. 


wan group, a nn o un ce d its inten- 
tion to acquire a 51 per cent 
stake in Antetpharzn, an interna- 
tional generics company based in 
the Netherlands. 

*Generic Pharmaceuticals : 
implications for the global phar- 
maceuticals industry. Financial 
Times Business Info r ma t ion ; 071 
814 9770; £298. 

Lex, Page 16 


Price cuts by competitors have 
forced AST to make “significant 
price reductions an existing prod- 
ucts to protect market share, as 
well as new product introduc- 
tions which will have to be 
priced more aggressively than 
originally planned", he added. 

Just a month ago, AST 
reported record results for 1991 
claiming sales growth of four 
times the industry average- Reve- 
nues for the year were (2.4b n, up 
from $1.4bn, while net income 
was $53 ,5m, or $1.59 per share, 
compared with a net loss after 
restructuring charges of 553.7m, 
or $L72 per share. 

Rumours that Compaq, the PC 
market leader, was trimming 
orders for PC components also 
fuelled concerns about PC sales. 
Compaq, however, said that 
changes in component orders 
were not unusual and did not 
reflect any change in the compa- 
ny’s outlook on the PC market 

Dataquest, a -California market 
research firm, yesterday reiter- 
ated its forecast that worldwide 
PC unit sales will rise 163 per 
cent to 45m units thin year. 


M r Corrado Pass era, 
chief executive of Oli- 
vetti, yesterday sought 
to reassure shareholders <wH the 
market about the financial and 
industrial health of the Italian 
computer group, after a week in 
which tiie value of their invest- 
ment has flaHeaa by nearly 10 per 

rent 

Mr Pas sera replied point by 
point to market rumours which 
led to a 5 per cent fell in the 
share price an Wednesday. Oli- 
vetti reports half-year results 
later tviic month, and the chief 
executive said the group expected 
to be able to confirm earlier fore- 
casts that It will break even at 
the operating level this year. He 
said revenues had increased by 7 
per cent in the first six months. 

Olivetti’s shares were reason- 
ably stable yesterday, slipping 
slightly to dose at 13,115 against 
an opening price of L2.123. But 
that compares with L2.347 at last 
Wednesday's dose, before Digital 
Equipment, the troubled US com- 
puter company, said it had gradu- 
ally sold its 8 per cent stake in 
Olivetti on the market during the 
slack holiday period. In spite erf 
continuing technological and 
product links, the announcement 
was takan as an indication that 
the two companies had aban- 
doned the amb itious partnership 
set up in 1992. It has also put 
Olivetti's fragile recovery under 
the market spotlight 
Mr Passera conceded yesterday 
that Digital's decision to sell 
100m shares into a difficult mar- 
ket created an overhang of Oli- 
vetti stock, “which was bound to 
refled on the share price". But 
he pointed out that the way in 
which the shares were quickly 
swallowed by the market was “a 
further demonstration of the 
strong liquidity of our stock”. 

Analysts are still puzzled, how- 
ever, by the delayed reaction to 
the Digital news, and believe the 
market may also have feken into 
account a number of other 
rmRPttiing e lement s. 

• Personal computer price war 
in the US. On the same day as 
the Digital armnimremcnt. Inter- 
national Business Machines cut 
prices in response to Compaq 

Elf blames 
oil prices 
for 10% fall 

By David Buchan In Parte 

Elf Aquitaine, the French oil 
group, yesterday blamed a 10 per 
cent drop in first-half net profits, 
to FFrl.2bn (5222m) on lower 
crude oil prices and refining 
margins and higher financial 
charges. 

Mr Ptffippe Jaffre, chairman, 
said uncertainties over the price 
of oil and the value of the dollar 
made fall-year forecasts difficult 
In 1993 Elf showed a FFrL4bn 
net profit in the first six months 
but turned in FFrl.07bn far the 
full year. 

“We are still ou course in our 
strategy to concentrate on our 
core sectors of oti, chemicals and 
health, and to improve our com- 
petitiveness to the level of other 
oil majors," he said. After rapid 
expansion in recent years, Mr 
Jaffre said the group’s goal now 
was to consolidate its position by 
cost-cutting and sales of non-core 
businesses. 

Capital spending was 13 per 
cent lower in the first half, while 
the French group has cut its 
stake in the Letma refinery proj- 
ect in eastern Germany from 100 
to 43 per cent. Mr Jaffre said 
asset rales of FFrl.5bn In the 
first half were “a bit slower than 
I had hoped”, but he predicted 
sales of FFrSbn-fibn this year and 
about the same next year. 

Mr JafTrt, who headed the 
Crddlt Agricole bank before he 
took over Elf last year, said he 
had halted file five-year rise in 
debt which now stood at 46 per 
cart of own funds, against 50 per 
cent last December. 

Elf said profits on chemicals 
tripled in the first half and its 
health activities remained sta- 
ble. Sanofi, its pharmaceuticals 
and cosmetics subsidiary, 
reported first-half net earnings 
of FFr460m, up 0.9 per cent 
Evolutionary approach. Rage 20 


ban on PCs was about 12 per cent 
- “not far from what we foresaw 
in our budget and linked to a 
drop in component prices and to 
efficiency improvements”. 

• Extraordinary losses on share 
and bond investments. Mr Pas- 
sera admitted that during 1994 
the group's fixed interest portfo- 


second cellular telephone net- 
work by the Omnitel-Pronto 
Italia joint venture, of which Oli- 
vetti is the shareholder. 

Last year Olivetti lost L465bn. 
compared with a net loss of 
L650bn in 1992, but sales 
increased for the first time since 


Turnover (Lire ’OOObn) 



1990. At the group’s annual 
shareholder meeting in May, Mr 
Carlo De Benedetti, chairman, 
said Olivetti was “preparing to 
reap the benefits of a sweeping 
structural reorganisation”. 


However, the market's brusque 
treatment of Olivetti shares this 
week is a clear indication to Mr 
De Benedetti of what will happen 
if he fails to deliver on those 
promises. He probably feels the 
market's discontent more than 
most In the last week, shares in 
the De Benedettis' two quoted 
holding companies - Cir, Oli- 
vetti's biggest shareholder, and 
Cofide. with a large stake in Cir 
- have themselves declined by 10 
per cent and 8 per cent respec- 
tively. When the market shakes 
Olivetti, the whole tree trembles. 



TheDenby Group PLC 


£26.5 million 


Placing and Public Offer 


Chesterton 



Chesterton International pic 

listing on the London Stock Exchange 
and 

Placing of 20, 559, 36 7 Ordinary Shares 
atlOOp per Share 


Sutfm* 


Sponsored and Underwritten by 

Robert Fleming & Co. Limited 

FLEMINGS 

INTERNATIONAL INVESTMENT BANKING 

LONDON . NEW YORK. HONGKONG -TOKYO. PARK. FRANKFURT. MADRID -ZURICH . GDVEVA . MILAN 
SYDNEY . BANGKOK . TAIPEI . MANILA . JAKARTA . SOUL . BEIJING . SHANGHAI . SHENZHEN 

BOMBAY. KUALA LUMPUK .SINGAPORE. LAHORE. COLOMBO. JOI I ANNESBURG. BAHRAIN 

These an mincemeats appear asariumcr of record only. 


Earlier this year US group 
Bristol-Myers Squibb acquired a 
25 per cent stake in Azuphanna, 
an option on a further 80 which a German generics subsidiary of 
are expected to be licensed for Gebe. Iu June, Merck, the Ger- 


Ladbroke’s gamble 



MNsjr Aahwood 

Peter George, chief executive of Ladbroke, the UK gaming group, 
bets on a £50m casino deal after an 11 per cant fell in profits- Page 18 


Computer shares fall 
on AST warning 



18 


FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


★ 


INTERNATIONAL COMPANIES AND FINANCE 


Leyland Trucks 
to invest £25m 
in new range 


By John Oiffitta in London 

Dutch and UK truck companies 
created out of the collapse of 
the Daf group last year are 
increasing their profits and 
making a first significant 
investment in a new range. 

Leyland Tracks Manufactur- 
ing, the UK truck ™ nfcpT res- 
cued by a management buy-out 
last year, says it win spend 
gsm ($3825m) to design and 
develop a medium-sized truck 
range to be built at its Ley- 
land, Lancashire, headquar- 
ters. 

Most of the new vehicles wOl 
be for delivery to Daf Tracks, 
the Dutch truck maker also 
revived - with Dutch and Bel- 
gian government finance - 
from the Daf collapse. 

The UK company has a 
long-term contract with the 
revived Dutch manufacturer 
under which Daf Tracks sells 
and services all Leyland- 
produoed trucks In Europe. 

The new truck range, to be 
called the 55 Series, will 
replace the Dutch-built Daf 

1300 and 1700 vehicles, provid- 
ing Leyland with its firet-ever 
continental sales in the 


medium, 11-15 tonnes sector of 
the European truck market 

The amiftnwffMnftwt rawia as 
Daf Trucks reported a net 
profit for the first half of 
FI 39.2m ($22m) on turnover of 
FI 9 24 -2m. Daf in March 
reported a net profit of only 
FI 10.8m in a truncated first 
financial year. 

Mr Cor Baan, Daf chairman, 
told a meeting of the compa- 
ny's 3,654 employees In Eind- 
hoven that the results “are in 
accordance with the general 
lines of the business plan and 
they also reflect the growing 
confidence in the company*. 

About a week ago Leyland 
Trucks' chief executive, Mr 
John Gilchrist, also reported 
that the UK company had 
made a pre-tax profit of £8 .4m 
for its first 11 months to 
end-April on a turnover of 
£L4&6m. 

Daf delivered 7,282 trucks in 
the first half of the year; 4,607 
from the Eindhoven plant and 
2,675 comprising 45 Series 
vehicles from Leyland. Mr 

Raan aid Daf had marginally 
increased, its share of the Euro- 
pean truck market over 6 
tonnes to 6.8 per cent 


Reckitt cautious 
after weak result 


By Roderick Oram, Consigner 
Industries Editor 

Shares in Reckitt & Colman 
fell 25p to 627p yesterday after 
the UK household products 
and toiletries group delivered 
slightly weaker than expected 
interim pre-tax profits of 
Et23_3m ((189m) and a cautious 
t rading sta temen t. 

“The tough competitive and 
economic conditions which 
affected the group’s perfor- 
mance in the first-half year 
persist and are unlikely to 
improve in the second half," it 

Said. 

New products In core brands 
such as Harplc lavatory 
cleaner helped compensate for 
flat demand in Europe and 
North America. Reckitt said . 


Economic growth “will take 
a while to filter through to our 
consumer products.” said Mr 
Vernon Sainkey, chief execu- 
tive. 

Confident of its brand 
strengths and outlook; Reckitt 
raised its interim dividend by 
7.8 per cent to 6-95p a share. 
Fully diluted earnings were 
2L8p per share against 24-62p. 
Adjusted for exceptional Items 
they were 2AJ8p against 23.7p 

The pre-tax profits of £l23Jm 
for the six months to July 2, 
down from £143.6m a year ear- 
lier, included a £56m charge for 
rationalising Reckitfs Euro- 
pean operations and a £30m 
gain from the sale of its Euro- 
pean pigments business in 
March. 

Lex, Page 16 


Montedison 

simplifies 

Finagro 

investment 

By Andrew HD In MBsn 
Montedison, the Italian 

Hi8ng t r fal arnglmnwiifa, plane 

to take direct c ont rol of Eri- 
dania Bdghin-Say, its agro- 
industrial subsidiary, by 
absorbing Ffnauriaria Agroin- 
dnstriale, the vehicle for the 
group’s Rridania shares. 

The merger will farther sim- 
plify the structure of the 
sprawling empire inherited by 
the new board of Hanai Fin- 
anziaria (Ferfin). Montedison's 
parent, following last year’s 
near-collapse of the group. The 
structure contains some 1,800 
companies, many of them dor- 
mant investment vehicles. 

Finagro is quoted on the 
Milan stock exchange, but 
nearly 95 per cent of its shares 
are owned by Montedison or 
Ferfin. tt controls just undo* 
50 pm- cent of Eridania, which 
is quoted In France and Italy, 
but some 68 per cent of the 
voting rights. 

If the operation is ap pro ved 
at a special Montedison share- 
holder meeting in October, 
Flnagro's few remaining 
shareholders will be offered 
Montedison shares in 
exchange for their holdings. 
Montedison also plans to 
absorb four tiny fimmriai sub- 
sidiaries which boose part of 
the group’s Finagro stake. 

Ladbroke buys 
London casinos 

Ladbroke Group yesterday 
made a £50m ($75m) bet an the 
future of London casinos, 
returning to the tables after a 
15-year absenc e, writes Peggy 
Bollinger in London. The pur- 
chase of Maxim’s, Golden 
Horseshoe and Charlie Ches- 
ter’s marks the first step in 
Ladbroke’s strategy to 
Increase its presence in the 
global gaming business. 

The deal is subject to 

approval fr om the Ulk fl aming 

Board. 

News of the acquisition was 
accompanied by the announce- 
ment of an 11 per cent fall in 
interim profits before excep- 
tional items to £51-3m. Earn- 
ings before exceptionals were 
18 per cent lower at L96p. 


East German energy assets sold 


By Judy Dempsey in Berfin 

Eastern Germany's largest 
electricity utility and its big- 
gest brown coal Add have been 
sold to a consortium headed by 
RWE Energie, the German util- 
ity, the Treuhand privatisation 
agency announced yesterday. 

The sale, which will be offi- 
cially sealed next week, paves 
the way for a DM41bn (SZJJSbxO 
investment programme by 
west Germany utilities in east 1 
em Germany’s energy sector. 
It also secures a future for 


brown coal, despite the envi- 
ronmental costs, and particu- 
larly in an election year when 
unemployment in eastern Ger- 
many is one of the key issues. 

Although, the Treuhand will 
not confirm the selling price 
until next week, energy offi- 
cials yesterday said RWE. 
PreussenElektra and Bayenx- 
werk paid about DMSbn for 
Veag, eastern Germany's larg-. 
est utility. The former state 
utility, which enjoyed a 
monopoly under the former 
communist regime, bad a 


workforce of 29,000. That has 
been reduced to 14£0Q, and is 
expected to fall farther. 

A consortium led by Rhetor 
braun, RWE*s brown coal, off- 
shoot, wwd including Prenssen- _ 

Elektra and Bayemwerk, 
bought the Laubag brown coal 
fields for an Initial payment of 
DM2.1bn and a commitment to 
Invest more than DMSbn over 
the next 20 years. - 

Laubag, which now employs 
fewer than 12,000, compared 
with more than 60,000 before 
German tmfflration, will fad 


most ofVeag*s I2£»megawatt 
r* p a fftt y . Annual coal produc- 
tion will total about 55m 
term as whif-h is crairirtoneri the 
wrtntimim for the Adds’ eco- 
nomic viability. 

However, the long-term eco- 
nomic prospects for Laubag 
and Veag will depend on the 

consor t ia's ability to withstand 

Increasing pressure from the 
expanding gas market and fad- 
ing energy consumption in 
eastern Germany. Gas fa 
quickly becoming a substitute 
for brown coaL 


Mercedes-Benz unveils R&D strategy 


By Kevin Done, Motor Industry 
Correspondent, in Hanover 

Mercedes-Benz, the world’s 
landing truck maker, is plan- 
ning to invest more than 
DMSbn ($S.16bn) in the 
research and development of 
new commercial vehicles 
between 1994 to 1998, Mr Hel- 
mut Werner, chief executive, 
said yesterday. 

The group win launch two 
van ranges in Europe next 
year, and introduce a new- 
generatUm heavy track range 
in 1996. 

Mercedes-Benz is gmHarinng 1 
an an aggressive expansion of 
its light commercial vehicle 
operations to Europe, with the 


aim of increasing its van 
production capacity by 
between 40 and 50 per cent dur- 
ing the nmt two years', to 
around 150.000 a year from 
100,000 in 1994. 

It also plans to Intomatinnal- 
ise its light commercial vehicle 
operations. It wants to start 
producing in South America, 
Mr Bemd Gottscbalk, manag- 
ing director of the wwnmwHai 
vehicle division, said yester- 
day. 

The new T1 medium-weight 
van range (254.6 tonnua gross 
vehicle weight) to be launched 
to Europe next year will also 
be produced in Argentina, 
starting to 1996. 

In Europe, the capacity for 


this vehicle is bring increased 
from around 75,000 to 100,000, 
c o mpe ti ng with rivals such as 
the Ford Transit , and the 
Vol k s w agen Transporter. 

Tn Argentina, Mercedes-Benz 
wilL build toward capacity of 
between 20,000 and 25,000 units 
a year, enough to supply 
the Brazilian market -as 
.wen. 

The group has begun negoti- 
ations on two ambitious joint 
ventures in fliriw» for the pro- 
duction of heavy trucks ™*i 
buses and coaches, said Mr 
Werner. 

It gq te in d a feasibility 
study with Yangzhou Motor 
Coach Manufacturing (YMQ. 
the biggest Chinese bus and 


coach producer, for the forma- 
tion of a joint venture. The 
target here will be the 
production of up to 12,000 bus 
diasste and 6,000 large coaches 
a year. 

Such an operation would 
exceed Mercedes-Benz's exist- 
ing BradUan him atiri COSCh 

operations, which produced 
14,600 vehicles last year. It 
would also be twice as big as 
its European bus and coach 
operations in Germany and 
Turkey. 

Separately, it is investigating - 
the ftwnmtinn of a j nmt: ven- 
ture to produce heavy trucks 
(above 15 tonnes) in China 
with its currant Ecemee port- i 
mar, Narinco. 


Ares-Serono suffers 39% decline 

sclerosis and o ther diseases. 


By Ian Rodger In Zurich 

Ares-Serono, the Geneva-based 
biotechnology drugs group, has 
reported another sharp fall in 
profits to the second quarter. 
Net income from continuing 
operations fell 39 per cent to 
Sftdm. 

The group, which develops 
hormones for stimulating 
human fertility and beta Inte r, 
feron-based drugs for multiple 


By Ian Rodger 

VA Technologic, the Austrian 
plant engineering group priva- 
tised and floated in May, has 
reported first-half net income 
of Sch286m ($26m), up 68 per 
cent year-on-year. 

Pre-tax profit was 50 per cent 


has continued to step up its 
research and development 
spending in spite of weaker 
Overall antes 

Sales in the second quarter 
were down 3 per cent to 
$168£m, as a 50 per cent slide 
in sales in Italy offset substan- 
tial gains elsewhere. Italy 
accounts for about a fifth of 
group sales, and a few Impor- 
tant Ares products have been 


higher at Sch307m an sales of 
Schio^bn, up 40 per cent. New 
orders were 10 per ooit ahead 
to Schl7.1bn and the order 
backlog at end-June stood at 


removed from the list of those 
the gm wemmpnfc will pay for. 
Meanwhile , wad spending 

j umped pgr nmt in t hP 

ond quarter to $37^m. 

In the first half, sales were 
down 5 per cent to $314.7m and 
net income from continuing 
operations tumbled a third to 
828.05m. The group took a 
89.8m charge an the sale of its 
dia gnostics division to foe sec- 
ond quarter. 


and forecast hi gher full-year 
profits. “This will enable a 
shareholder-friendly dividend 


Bidders line up 
for Canadian 

insurance unit 

* 

By Robert G&bon# fa Montreal 

Canadian Imperial Bank of 
Commerce and. Great-West Life 
are briteved top contenders for 
Confederation Life's domestic 
group life and health business. 

The successful bidder was 
expected to be announced, by 
Confederatian’s liquidator Feat 
Marwick Thorne. Confedera- 
tion’s dnmpgtif group business 
generated premium frmnmp of 
C81bn (US8700) last year and 
could, fetch to c yiflftm. 

Metropolitan life was also a 
bidder, but industry sources 
said it was not hkriy to win. 

Great-West, controlled by 
Power Carp Of Canada , bought 
Confederation's US group busi- 
ness just after Confederation 
was seized by federation regu- 
lators on August 1L 


policy, " it aairi. 

. The Austrian government 
Sch563bn, 5 per cent higher. sold 51 per cent of the shares 
■Rib group said the largest in VA Tech, formerly part of 
part of its turnover would bet the Aust rian Industries corn- 
achieved in the second half, hine, in May, raising Sch6-9bn. • 


Privatised Austrian engineer ahead 


Volvo to 
take over 
German bus 
maker 

By Kevin Own 

Volvo, the Swedish car and 
w n rnn e rninl v ehicle maker, is 
taking oyer Drfigmfiller, the 
German bus manufacturer. In 
a move which accelerates the 
rapid concentration of this 
European bus industry. 

Mr $jfim Larsson, president 
of Volvo Bos, said the takeover 
of DrfigmOBer. a maker of lux- 
ury tourist coaches with a 
turnover last year of DMSfim 
(S36m) and a workforce of 250, 
was an important step in the 
Swedish group’s effort to break 
into the ' German market, 
which is dominated by Merced- 
es-Benz and MAN, the domes- 
tic German commercial vebjsta 
makers. 

The tog European truck and 
bus makers are moving 
quickly to consolidate their 
h o l d on the small, and hitherto 
independent, bus and coach 
body builders in Europe, to 
order to guarantee the outlets 
for Hwfr chassis and drivelines 
(engines and gearboxes). 

. The Volvo acquisition is the 
latest in a flurry of recent 
deeds, most notably Mercedes- 
Benz’s takeover of Khssbohrer, 
the German coach maker 
which markets its products 
under the Setra hraniin i m)i> 

In. recent days Scania, the 
Swedish truck bus maker, 
ha« taken o v er DAB, s Danish 
body builder, while Volvo 
agreed the takeover of Aaben- 
raa, another Danish bus body 
builder, from Kfissbobrar, 
shortly, before the German 
group was itself acquired by 
Mercedes-Benz. Separately 
Berkhof. the Dutch bus and 

wiy h wuilwr haw taken OVBT its 

smaller, troubled Belgian rival 
Janckheere. 

Volvo bad tried for two years 
to break into the German 
coach market, using Berkhof 
bodies , on its own chagrin but ’ 
with little success, said Mr Lar- 
sson. DrOgmfiller was the last 
independent German coach 
builder and offered the last, 
acquisition opportunity. 

Volvo was aiming to increase 
its shar p of t he German bus 
and coach market to more than - 
5 per cent to the next two to 
three years from less than 1 
per cent at present, said Mr 
Larsson. 


SKANDIA INSURANCE COMPANY LTD 

INTERIM REPORT FOR THE PERIOD 
JANUARY 1 - JUNE 30, 1994 


■ Gross premium income rose by 35 per cent during the first half 
of 1994, to MSEK 27,315. The improvement is entirely attributable 
to the unit linked and life assurance operations, whose premium 
volume grew by 106 per cent. 

■ The insurance result for the group during the first half of 1994 
amounted to MSEK 378, an increase of 31 per cent compared 
with the same period a year ago. 


■ The operating result, before adjusting the value of bonds to the 
lower of cost or market value, amounted to MSEK 529 C572). 

■ Net asset value on June 30, 1994, amounted to MSEK 15,379, or 
SEK 150 per share. 

■ The rights issue approved by the Annual General Meeting con- 
tributed to an inflow of capital totalling MSEK 2,705 net. The 
number of shares increased to 102,354,252 as a result of the 
rights issue. 

■ At the Annual General Meeting in April 1994, the decision was 
made to ease Skandia’s voting rights limitation in the Articles of 
Association. Now, no one may vote for more than five per cent 
of the shares represented at a Shareholders’ Meeting. 


■ SkandiaBanken will begin operating in October 1994 and will 
focus primarily on deposits and other banking services for 
individuals. 


Slumdia Is an International co rporation 
angagod in Insurance and f inanc i a l 

senriewfl, with Its home market In the 
Nordic countries. Opera ti o n s are con- 
ducted fai 23 countries In Europe, Aria, 
and North and South America. Sfcandla’s 
shares are Hated on the stock ex- 
changes In Stockholm, Oslo, Copen- 
hagen and London. 

A complete Interim report Is available upon 
request fromSkancfa.lnfaTTi3tOT Department, 
S-103 50 Stockholm. TeL +46-8-738 1000. 



Skandia 


SUMMARY OF RESULTS 


MSEK 

1984 

8mos 

1893 
6 mos 

Prsmlun income, gross 

27,315 

20.251 

Non-Sfs insuraice and reftsuance 

13,194 

13.412 

Life assurance 

14.121 

6.839 

Operating resuft before ac^usting the value of 
bonds to fee lower of cast or market value 

529 

572 

Management operating rest* before 
isiraafced charges n the veto at bonds 

-550 

1.161 

Insurance result. nan-fife instance 

and ransrance 

378 

288 

Management operathg reafl. Bb assurance 

321 

197 

Totri aseete (SEK bAon} 

154.8 

138Ji 

Nat asset value (SEK bBonl 

15379 

13.188 

Solvency mer^jn. % 

83 

60 



Shanghai Petrochemical Company Limited 
Interim Results 1994 


l iiuncuii Highlights 


. For the six months ended 30th June 



1994 

1994 

1993 


RMB’000 

HKS’OOG 

RMB’000 


(unaudited) 

(unaudited) 

(unaudited) 

Turnover 

4305,569 

3,846319 

■ 4,267,233 

Profit before taxation 

909.157 

812.182 

675371 

Taxation 

136374 

121328 

101378 

Profit after taxation 

772,783 

690354 

- 573.893 

Interim dividend 

262,000 

234,054 

200,000 

Rerained profits 

564,845 

504,596 

373,893 

Earnings per share 

RMB0.118 

HK80.105 

RMB0.143 


In the second half of the year, the Company should benefit from continued economic growth in China and the strong 
d e ma nd for its products. The Company’s d eri s i on not to diux down for overhaul its main this year will reside 

in an extended ope ra tio na l cycle. The u ti l iz a ti on of die Company’s major facilities is expected to increase and with it 
the output of major products. The Company expects demand for most petrochemical products to be strong during 
the second half of 1994. While further government controls on prices induding those for petrochemical pro duct s are 
likely, the Company believes thar they should not have a negative impact on the operations of the Company. The 
increase in the prices of crude oil since May will result in higher production costs for the Company during the second 
half of dbe year. However; for the two months to the end of June die higher prices for its product, including for 

petrochemical products, offset the effect of increased crude oil prices. The Company plans to gygd up its technology 
improvement programme and to continue improving its product quality and production efficiency. It also intends to 
increase die production of higher-margin do w n stre am petrochemical products. 



Wang Jlming 

Chairman of the Board and President 
29 August 1994 

Notes: 

(1) Turnover 



With the implementation of ■niae aided Ox. turnover b tnafed as income periling car. For a, 

of RMB4.652 million in the 1993 interim resohs which includes tax has boca adjusted to RMB4.Z67 mflCon. The cost of das it 
calculated on die basil of (he value of row materials purchased excluding value ad«W tax. 

(2) Retained profits 

Retained profits for the period mrlnrie khe profit after tanrinn. after demurring- ft,*- recommended of RMBJ10JS3 JQQ 

retained profit of RMB54, 062,000 carried forward from 1995. 

(3) Eanunjp ps share 

The caknlation of earnings per share for the she months ended 30th June 1993 i* based on die 4 biffion shares issued as ar 30th June 
1993. 

The calculation of earnings p« share for the six months ended 30tfa June 1994 is based on the 6.55 bHHon shares issued as ar 30* 
June 1994. 

(4) Hong Kong dollar equivalents 

for die convenience of the readenamonna in Renminbi (RMB) ln*e bem mnslgied nun Haag qq 

■ RMB 1.1194, bring the asroyofrhebnynig a n d re ttery rain premrEngit the China fiaragn Eerhany T.^fag r.^.r^. ,^ 
ofburincas on 30th June 1994. No representation » made dm the Renminbi amounts could haw nr mAA K. 

Hong Kong doflres x that me. 

If you wish to receive father information on Shanghai P etroche mi cal or supplementary information on the Compares 
interim results reconciled in US GAAP, please fox your request so The Rowland Company at (852) 543-3030. 






J 


V* 


IT-ifaMf". 


, V "S 

I ’t 

,l N 

"un,; 

" * * » v 


financial times 


FRIDAY SEPTEMBER 2 1994 


INTERNATIONAL COMPANIES AND FINANCE 




Telefonica rises 
4.7% to Pta52bn 
at halfway stage 


By Tom Bums in Macro 

Telefonica, the state-controlled 

Spanish teleco mmunica t ion s 

group and the biggest company 
csv the Madrid stock exchange 
lifted first-hall consolidated net 
profits by 4.7 per cent to 
PtaS2bn (1397m) on the back of 
increased demand, lower finan- 
cial Charges and increasing 
international business. 

The increased group profits 
reflected in particular the per- 
formance of Telefdnica Interna- 
clonal (Tisa) which has 
invested strongly in acquiring 
Latin American telecommuni- 
cations companies. Talks are 
taking place that aim to bring 
both GTE and Unisource into 
Tisa as large shareholders. 

Results at the Telefonica par- 
ent company were up by just 
L7 per cent to Pta4L$m, in 
spite of a as per cent rise in 
operating income and a 7 per 
coii fan in financial charges. 

Analysts believe the parent 
company could be keeping its 
net profits low to prod govern- 
ment regulators into raising 
tariff charges. 

Improved first-half results, 
reflecting the incipient domes- 
tic recovery, were also posted 
by Iberdrola, the private sector 
electrical utility, and by Tabs- 


Net income up 2 % at 
Sandoz in first half 


By Ian Rodger bi Zurich 

Sandoz, the Swiss pharmaceu- 
ticals, nutrition and nhemfoaTR 
group that has just acquired 
Gerber Food Products of the 
US for $3.7bn, raised net 
income 2 per cent in the first 
half to SFrl.Olbn ($760m). 

Operating income grew a fas- 
ter 7 per cent to SFrL36bn an 
sales up 2 per cent to SFr&2bn, 
8 per cent higher in local cur- 
rencies. But the net financial 
result tumbled from a SFr79m 
profit to aSFT90m loss because 
of price declines of securities 
held. 

Sandoz expected sales trends 
in leading markets to remain 
favourable in the second half 
and operating income to “con- 
tinue its upward path". 

Gerber would be consoli- 
dated from August 25. Mr Ray- 
mund Breu, Sandoz finance 
director, said the baby food 
group would add $410m to 
group sales and $7Qra to operat- 
ing income this year. At net 
income level, it would have 


no effect this year or in 
1995. 

Group volume growth was 
4.6 per cent in the first half , 
with a 10 per cent rise from 
agricultural chemicals, 5 per 

can* from wwudriiffH^n and 4 
per cent from both pharmaceu- 
ticals and nutrition divisions. 

Prices were squeezed, so file 
improvement in the operating 
mar gin from 15 9 per ran* to 
1R5 per cent came from vol- 
ume and cost improvements. 

Sales of the pharmaceuticals 
division were down 1 per cent 
to SFr339bn. reflecting govern- 
ment enforced price cuts in 
some <ymȣrip^ anH the strong 
Swiss franc. 

Sales of the nutrition divi- 
sion soared 29 per cent to 
SFrl.l5bn, largely as a result of 
acquisitions last year. 

Sales in the chemicals and 
environment sector were fiat 
at SFr2.76bn, with gains in 
agriculture and construction 
offsetting an 8 per cent slide in 
chemical sales, especially those 
to textile and paper makers. 


Canadian banks ahead 
sharply in third period 


By Robert Gibbons in Montreal 

Canada's two biggest banks 
posted sharply higher third 
quarter earnings, driven by 
strong lending activity, rising 
fee income, tight expense con- 
trol and lower loan losses. 

Royal Bank of Canada's net 
profit for the July quarter was 
C$294m (US$213m), or 80 cents 
a share, an increase of 32 per 
cent on the C$223m, or 38 
cents, a year earlier. Return on 
assets was up at 0.70 per cent, 
against 0.62 per cent and on 
equity rose to 16.5 per cent 
from 11.7 per cent. 

Nine-month profit was 
C$S67m, or C$236, an advance 
of 20 pm 1 cent from C$720m, or 
C$133. Return on assets was 
0.70 per cent compared with 
0.69 per cent and on equity 163 
per g*»nt against 13.4 per cent. 

Non-performing loans 
dropped 24 per cent to C$l3bn 
at July 31 while the loan-loss 
provision for fiscal 1994“ 
c$820m against C$1.75bn in fis- 
cal 1993. 

The trust and investment- 

brokerage units improved. At 
July 31 assets totalled C$172bn. 
up 2 per cent year-on-year. 

Canadian Imperial Bank of 
Commerce said third-quarter 
net profit was C$223m, or 87 
cents, ahead 17 per cent from a 
year earlier. Return on assets 
was 038 per cent, against 0-55 
per cent, and on equity 11-5 P® 


cent, up from 103 per cent 

Nine-mouths earnings were 
C$654m, or C$230, an increase 
of 21 per cent from C$539m, or 
C$224. 

Total revenues rose 11 per 
cent with strong business and 
consumer lending, while 
investments and brokerage 
activities were ahead. Net 
interest income was up 4 per 
cent and other income ahead 
11 per cent 

Nan-perfonning loans contin- 
ued to decline, to C$L7bn at 
July 31, white fiscal 1994 loan 
provision was unchanged at 
C$880m. Total assets reached 
C$152 ^bn, up 9 per cent year- 
on-year. 

• Boise Cascade, the US for- 
est products group, is going 
ahead this month with, an ini- 
tial public offering of Rainy 
River Forest Products, a Cana- 
dian subsidiary holding all the 
newsprint assets. 

Rainy River, with two mills 
in Canada and (me in the US, 
will have annual sales of mare 
than US$35Qm and rank among 
North Ame rica's to p 10 produc- 
ers of newsprint and ground: 
wood papers. 

Boise Cascade expects to 
raise C$420m by selling units 
of Rainy River, comprising 
common shares and convert- 
ible debentures. 

Boise Cascade will also raise 
US$UQm with an institutional 
issue of secured notes. 


onNBC* 011 Wallenbergs give a lesson in invisibility 

TV hid The empire is held in a strong hand, write Hugh Camegy and Christopher Brown-Homes 

A visitor to Stockholm extensive international bu 

intent on seeking out ness, political and acaden 

Europe’s premier contacts. 


calera, the government-con- 
trolled tobacco manufacturer 
and distributor. . 

Iberdrola reported a 96 per 
cent jump in its net profits 
over the first six of 
year to Pta49.7bn but this 
sharp increase included 
extraordinary income of 
Pta253bn realised thro ugh the 
disposal of its Barcelona-based 
subsidiary, Hidroelectrica de 
Catalufia, to the state-con- 
trolled utility R ndesa. 

Iberdrola’s net profits, with- 
out this extraordinary item, 
rose by 11.7 per cent due to 
energy demand, lower expendi- 
ture and an 18 per <g»t fail in 
financial charges brought 
about by failing interest rates 
and reduced borrowing. 

Tabacalera, which is 52 per 
cent state-owned, raised its net 
first half group profits by av.s 
per cent to Pta5.7bn. 

The increase was due to 
extraordinary income of 
Pta23hn realised through the 
disposal of its food division 
Royal Brands to Nabisco of the 
US, to a 64 per cent drop in 
financial charges and a 23 per 
cent rise in tobacco sales. 

The sharp jump in sates was 
largely due to government | 
action in curbing cigarette 

grrmggWnp 


on NBC 
TV bid 
persists 

By Patrick Karverson 

in New York 

Speculation about a possible 
takeover of the NBC television 
network continued yesterday 
after a senior NBC e xecutive 
st opped short at Issuing an 

outright d enial of reports Oat 
General Electric, NBC’s parent 
group, has been considering 
selling all or part of the net- 
work to Time Warner. 

Mr Robert Wright, president 
of NBC, would only say that a 
report that NBC and Time 
Warner bad been negotiating a 
sale of the network far $2JSbn 
was not accurate. A spokes- 
man for Time Warner, mean- 
while, said the group would 
not comment on the story. 

Mr Wright's comments 
failed to dampen takeover 
speculation on Wall Street, 
which has been buzzing with 
rumours about upheaval in 
the US network television 
market. 

The latest talk of a NBC 
takeover was accompanied by 
reports that Walt Disney has 
been negotiating to buy the 
CBS network, which earlier 
this year failed to merge with 
the QVC television home-shop- 
ping company. 

The takeover rumours lifted 
GE and CBS’s share prices yes- 
terday, even though most lead- 
ing stocks on Wall Street were 
lower. GE climbed $% to $50%, 
and CBS rose $6% to $328, 
while lime Warner fell $% to 
$37% and Disney fell $% to 
$41. 

This is sot the first time GB 
is re ported to have been dis- 
cussing selling NBC, wineh it 
bought in 1986 as part of the 
$63bn acquisition of RCA Cor- 
poration. 

On previous occasions, Mr 
Jack Welch, GE president, had 
insisted the network was not 
for sale, most recently last 
November. Yesterday, there 
was no comment from Mr 
Welch. 

Although Mr Welch htm gna 
he wanted NBC to remain part 
of G£, the diversified indus- 
trial group is believed to be 
unbappy with the network’s 
recent performance. 

NBC’s revenues last year 
were down from 1993 levels, it 
has had the lowest ratings of 
the big three networks for the 
past three years, and has suf- 
fered a string of recent mis- 
haps, including a staged acci- 
dent in a televirion news 
report on General Motors 
pick-UP trucks. 

If Time Warner is interested 
in buying NBC, it is under- 
standable, given thtit the 
entertainment group is eager 
to develop its television inter- 
ests and is preparing to launch 
its own broadcast network. 

Any deal between GE and 
Time Warner over NBC would 
ran into regulatory problems. 
Certain limits are placed on 
cross-ownership of broadcast 
and cable TV interests and 
Time Warner bas extensive 
cable TV operations. 

Charge puts 
Brambles into 
the red 


By Nikki Taft in 


Brambles, the Australian 
transportation group, yester- 
day announced a A$233-2m 
(US$17i.4m) loss after tax and 
abnormal items for the year to 
end-June, a sharp reversal 
from the previous year’s 
A$166.1m profit 

The damage was done by a 
A$378.1m abnormal charge, 
already reported in the first- 
half and mainly due to the 
writeoff of goodwill at Bram- 
bles’ US-based waste manage- 
ment operation, Ensco. 

The company said there 
were no abnormal items in the 
second half. 

Operating profits before 
abnonnals and tax for the year 
were A$242m, slightly below 
the previous year’s A$2593m. 
Brambles said, however, that 
second-half results were In 
fine with expectations and it 
had “reached a turning point”. 

Revenues were little 
changed at A$2.74bn, against 
A$2.71bn. 


A visitor to Stockholm 
intent on seeking out 
Europe’s premier 
industrial dynasty would soon 
discover something striking 
about the Wallenberg empire. 
It has no headquarters, no 
annnal report and no corporate 
logo. 

This public invisibility 
stands in stark contrast to the 
glittering fist of Swedish 
blue-chip companies which the 
Wallenberg family controls 
such as Asea, Electrolux, Erics- 
son, Astra, Store, Saab-Scania 
a nd SKF. 

But it Is a key to understand- 
ing the way in which the Wal- 
lenbergs operate. They deliber- 
ately adopt a low-profile 
approach, sh unning the lime- 
light and avoiding a Jet-set life- 
style. When they take to the 
water it is to sail in Stock- 
holm’s archipelago rather than 
to cruise in luxury yachts off 
the C6te d’Azur. Their style is 
summed up In the family 
motto “Esse Non Vldare" - To 
Be, Not To Be Seen. 

Their empire is a collection 
of widely disparate companies 
gathered under the same 
iimhrftflfi bat controlled most 
oft e n through minority share- 
holdings. It is the identities of 
the individual companies 
which are promoted rather 
than the mmmnn owner ship 

However, the invisibility 
belies the strong hold exercised 
by the family, haadad by Peter 
Wallenberg, and a circle of 
trusted lieutenants over a fief- 
dam accounting for 40 per ran* 
of the value of the Stockholm 
Stock Exchange. 

“They will always be strong 
owners. They want to co nt rol 
their companies, they want to 
make the decisions,” says a for- 
mer Wallenberg director. 

This role through a 
close-knit network which acts 
as a kind of super-board hag 
been the Wallenbergs' tradi- 
tional way Of managing- the 
empire. 

It operates largely informally 
through frequent meetings in 
Offices of the key cnffipnnipa 
scattered around Stockholm’s 
handsome waterfront, through 
daily telephone calls between 
the main protagonists and 
through a regular round of dis- 
creet social gatherings. 

At the pinnacle s tands Peter 
Wallenberg, aged 68. Alongside 
him in what the former direc- 
tor calls “an inner, inner cir- 

VW and Ford 
loosen links 
in Autolatina 

By Patrick McCurry 
In S4o Paulo 

Soaring Brazilian car 
production and increasing 
rivalry between dealers has 
forced Ford and Volkswagen to 
loosen their links in Auto- 
latina, the holding company 
for their joint operations in 
Brazil and Argentina. 

Hie companies will no lon- 
ger produce similar-looking 
vehicles from common produc- 
tion platforms, but instead use 
the world platforms of their 
parent companies. However, 
they have not confirmed local 
media reports that Autolatina 
will be disbanded. 

Autolatina plans to produce 
the Fiesta model locally 
because of the growing Brazil- 
fan market for small cars. The 
company intends to invest 
$400m in the venture by the 
pnri of next year. 

Autolatina was formed in 
1987 during a period of low pro- 
duction and investment in Bra- 
zfl r s mdustry. 

Recent growth and the open- 
ing of Brazil’s economy led to 
the decision to use world plat 
forms, aemrrimg to company 
president Mr Pierre- Alain de 
Smedt Pressure from VW deal- 
ers, reluctant to share the plat- 
form for the new Golf model 
with Ford, also contributed. 

Mr de Smedt said Ford and 
VW would have more auton- 
omy within Autolatina but the 
holding company would con- 
tinue in areas such as purchas- 
ing, administration and legal 
services. - 
The Brazilian car market has 
been recovering since 1992 
thanks to pacts between the 
industry and the government, 
which reduced vehicle taxes. 


Loss deepens at Danish shipping group 


By H9»y Barnes 
In Copenhagen 

Lauritzen Holding, the 
shipping and shipbuilding 
group, suffered a first-half net 
loss of DKrlSSm ($32m». cm*; 
pared with a first-half loss last 
year of DKr73m. 

The croup takes in the 
Lauritzen Shipping Grot*- 
DFDS, the North Sea freight 
and ferry group, and the Dan 
yard shipyard. 

Safes were «P to D ? r t£nit 
from DKpLS3bn. but the result 

was hit by a rise ui net “nan 


dal costs to DKi230m from 
DKrlffim and a DKr54m loss 
on the disposal of vessels. 

The J Lauritzen Company 
made a loss of DKr289m, 
against a loss of DKrUSm. The 
company’s fleet of refrigerated 
cargo vessels was hurt by low 
bright rates and the weakness 
of the dollar against the krone. 

The holding company said it 
bas Increased the shipping 
company's capital by issuing 
subordinated loan capital of 
DKrl5Gm- , , 

The shipyard also moved 
into a loss of DKr42m, com- 


pared with a profit of DKr68m. 

The group has predicted a 
full-year loss of the same order 
as in 1993, when thee was a 
net deficit of DKrlTSm. 

• FLS Industries, the indus- 
trial conglomerate which is a 
leading global supplier of 
cement mills and machinery, 
has reported an increase in 
first-half net profits to 
DKrl7Gm from DKrl26m in the 
same period of last year. 

Sales advanced to DKr6.45bn 
from DKr5.6bn, which was 
mainly a reflection of the 
domestic building materials 


group Aalborg Portland being 
classified as a subsidiary 
rather than as an associate 
company. 

• Codan, Denmark's biggest 
non-life insurance group, 
recorded a first-half net loss of 
DEri46m, againrt a profit In 
the same period last year of 
DErSOSm. 

Profits from insurance activi- 
ties improved to DKrlSTm from 
a loss last year of DKriS3m, 
but there were unrealised 
losses on securities of DKi303m 
this year against unrealised 
gains last year of DKr66m- 


PeterWaSeobap 



INVESTOR. ASEA 
I VKECHMRMAN A 
SE-BANKEN, ERICSSON 


INVESTOR, 5TDRA 


BOWPUHBa j 

INVESTOR, ASTRA 


Jacob 

WaBenberg 




f CWBMW 

BTORA. ASTRA 


Bo 

Berogren 



MGECWmW i 

ASEA 

f BQWPMBMBBT j 

ASTRA, SKF, 
ELECTROLUX, 
INCENTIVE. INVESTOR 
SAAB-SCANIA, 
STORA & ERICSSON 


CHAIRMAN j 
ELECTROLUX. 
INCENTIVE. 
kAB-SCANIA & SKF 

WXCHARMAN | 
INVESTOR 


CHAIRMAN j 
ERICSSON 
awDMBWBsr j 

ASEA. STORA 
& SE-BANKEN 




cle **. are his anointed dual 
heirs, his son Jacob and bis 
nephew Marcus, both in their 
late 30s. 

Today, the other key mem- 
bers of the network include Bo 
Berggren, chairman of Stora, 
Anders S char p, chairman of 
Electrolux, Claes Dahlbfick, 
chief executive of Investor, the 
family’s core holding company, 
and Bj6m Svedberg, chairman 
of Ericsson and chief executive 
of Skandinaviska EnskUda 
Banken, the family hank 

Another inside r is Percy Bar- 
nevik. the chief executive of 
Asea Brown Bovari, the Swiss- 
Swedish engineering group 
which the Wallenberg’s half 
control. However, he appears 
to play a more independent 
role, bolding chai rmanship s of 
Swedish companies outside the 
Wallenberg sphere. 

All this group, with the 
exception of Bjdrn Svedberg, 
sit on the board of Investor, 
which Peter Wallenberg chairs. 


But they also meet in overlap- 
ping combinations, with one of 
them usually acting as chair- 
man, across the core Wallen- 
berg crrnipanlpg 

T he system is perfectly 
suited to providing a 
sheltered habitat wi thin 
which Peter is grooming Jacob 
and Marcus to succeed him. 
They have moved up from 
lower level jobs within the 
empire, inside and outside 
Sweden, to senior executive 
positions, respectively, in SE- 
Banken and Investor, and to 
assume their first board posi- 
tions. 

Peter Wallenberg says the 
cousins will take over when he 
decides they are ready. He is 
using the network to give 
Jacob and Marcus the chance 
to gain experience precisely in 
the way he was denied by his 
father, who denigrated Peter's 
abilities. 

Members of the network say 


Bfem 

Svedberg 


it provides a valuable cross-fer- 
tilisation of views and strategic 
guidance for individual compa- 
nies. But they insist this is dis- 
tinct from unwarranted inter- 
ference in day-today manage- 
ment, which is left to the exec- 
utives running the companies. 

The Wallenbergs certainly 
pride themselves in having fos- 
tered successive generations of 
loyal managements who have 
had the backing to produce 
long-term results. 

One is Ericsson, the telecom- 
munications group, where 
management under chief exec- 
utive Lars Ramqvist spent 
heavily an research and devel- 
opment in the early 1990s - 
more than 20 per cent of turn- 
over - at the expense of divi- 
dends. The pay-off has been 
Ericsson’s present success, 
especially in mobile telephony. 

The network also provides 
an. invaluable service to indi- 
vidual companies, providing 
access to the Wallenbergs’ 


extensive international busi- 
ness, political and academic 
contacts. 

Peter Wallenberg sits, for 
example, on Swiss Bank Corp’s 
international advisory board 
and GM’s European advisory 
council. Similar prestige posts 
are held by all the inner circle. 

These contacts were put to 
spectacular use in 1991 when 
Jacob Wallenberg led a move 
by Investor to raise a Jl_5bn 
unsecured syndicated bank 
loan to fund Investor’s buy-ont 
of Saab-Scania. 

“Do you think you’d get that 
out of the major banks without 
having a particular reputa- 
tion?" says Peter Wallenberg. 

But the other side of the coin 
is the concern that the net- 
work is too incestuous and is 
there mainly to support deci- 
sion-making by the family. 

“When it comes to strategy it 
is a question In the end for 
Peter Wallenberg to make the 
decisions, and he does” says a 
former insider. “The others are 
just advisers." 

Key issues, he says, are 
worked out before board meet- 
ings by the circle. 

Some critics worry that the 
network system ultimately sti- 
fles initiative. “In every such 
constellation, there is a danger 
they are protecting each 
other." says Per Olof Edin. 
chief economist at the LO 
trade union federation. 

The network to date has cer- 
tainly tended to resist outside 
intrusions. In 1990, the Wallen- 
bergs responded to a demand 
for a seat on Saab-Scania’s 
board by Sven Olof Johansson, 
a corporate raider who had 
built up a 22 per cent stake, by 
buying him out 

Today there is a striking dis- 
crepancy between the virtual 
absence of foreigners on Wal- 
lenberg company boards and 
the fact that as much as 50 per 
rmt of Hip capital of individual 
companies is held by foreign 
investors. 

This is not a pr essing issue 
now because no single interest 
has built up a significant vot- 
ing stake in any company. But 
it could become so as the spate 
of foreign buying of Swedish 
shares unleashed by deregu- 
lation continues imahatori 

This is the second article in a 
three-part series on the Wallen- 
bergs. The first appeared yester- 
day. 


VA Technologie AG - Austria’s 
largest engineering group - is 
active in Metallurgical Engineering. 
Energy and Environmental Engin- 
eering and Construction and 
Engineering Services, on a truly 
worldwide basis, with over 50% of 
turnover generated outside Austria. 

The VA Technologie Group suc- 
cessfully floated 51% of its shares 
on the Vienna Slock Exchange §”jj 
last May. I ' % 


//■<; ; 
V . 


VA Technoloifte 


All key figures of the Group lor 
the first half of 1994 are higher than 
last year: 

■ Order intake rose by 10% with 


Report on the first 

for * 

I half-year ended 


strongest growth in Construction and 
Engineering Services and Metallurgi- 
cal Engineering 

■ 52% of order intake was in Energy and 
Environmental Engineering 

■ 25% of orders received came from the 
Far East 

« Order backlog rose by 5% compared 
with the first half of 1993 (and by 10% 
over year-end 1993} 

■ Turnover increased by 40% over the 
comparable figure for 1993, mainly 
due to accounting practices applied to 
engineering companies 

■ Ordinary profit and net profit rose by 
50% and 55% respectively over last 
year’s first six months 

As in previous years, the largest part of 
turnover will be achieved during the 
second half of 1994. This will also result 
in profits being higher in the second half 
of the year than in the first six months. 
This factor, as well as the expected 
order intake, should result in a higher 
profit for 1994 than in 1993. This will 
enable a shareholder-friendly dividend 
policy for the current business year. 


June 30th, 1994. 


.‘.TV. • v .. .><>* T’V ’ 1 .*»■■ -1 ;«♦; ■* fr’T* • ,\ *•**/•*'*•**•“•*? 

f£t*Cr1 mr ' 1 ■' vs::::* V or V., 


■■ " v; , 

%■. .... ■ 


' 'If. • 








y* ; j.? • • ' J*. 


i.) ‘Iff . ‘ '.0'.:'":::. .*!! 






For a copy ol VA Tachnoiogie's 1B94 half-year report or further information, plaaaa contact: 
Wolfgang SchweJger, Investor Relations. VA Tschnofogie AG. Lunzers&aBe 64, A-4031 Linz, Austria. 


WBeca 


VA TECHNOLOei 





20 



FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Sharp drop at 
Western Mining 


By NBkld Taft In Melbourne 


Western Mining Corporation, 
the Australian mining group, 
yesterday reported an equity- 
consolidated profit, after tax 
but before abnormal items, of 
A$ll9.7m (US$89m) in the year 
to emtJune. 

This compared with 
A$i6S^m in the previous year, 
a fall of 27.8 per cent. 

WMC took a large abnormal 
Charge in 1992-93, of AHl&Sm 
before tax, while the net 
charge in 1993-94 was 
AJ700.0Q0. As a result, WMC*s 
equity profit after tax and 
abnormals was sharply 
improved, to A$125m in the 
year just ended, compared with 
A$8&&m previously. 

This figure was in line with 
the profits forecast made by 
WMC in its rights issue pro- 
spectus last month. 

The foil in Western's pre-ab- 
normal profits derived largely 
from an 1S.4 per cent drop in 
operating earnings, to 
AS 127.8m. Total revenue was 
7.6 per cent higher at AgL7bn. 

On a divisional basis, WMCs 
nickel operations remained in 
the red, although the loss was 
reduced to A$23.2m from 
AI 284 XXL 

The company noted that this 
improvement came despite a 14 
per cent decline in US dollar 
terms for the overall price 
of nickel, and the production 
interruptions as the upgrading 


of facilities took place. 

The Olympic Dam business 
contributed Af60-2m, against 
A$47.4m, but tiie advance was 
largely due to WMC’s increas- 
ing its ownership of the 
operations to 100 per cent 

Higher production, coupled 
with an improved gold price, 
meant that the Australian gold 
interests made A?74.2m, up 
from AJS8.5m. However, the 
North and South American 
gold Interests produced a loss 
of A*16m. 

The main depressant on prof- 
its was the petroleum division, 
which turned in profits of 
AS4.7m, compared with 
A$43.7m in the previous year. 
A lower oil price, declining 
production from a couple of 
fi elds , awd an increase in mdt 
costs due to higher amoritisa- 
tion/depletion charges did the 


WMG’s share of after-tax 
profits from Alcoa of Australia, 
In which it has a 48.25 per cent 
stake, also foil, by 17.6 per cent 
to A$147.3m. This was largely 
due to lower US dollar prices 
and lower aluminium sales vol- 
umes. 

However, Mr Hugh Morgan, 
WMCs managing director, 
held out the prospect of a bet- 
ter year ahead. 

The final dividend is 4 cents 
a share, down from 7 cents last 
Hme, making a cants for the 
year, against 10 cents last 


Bank Bumiputra reports 
impressive profits leap 


By Kleran Cooke In Singapore 


Bank Bumiputra, Malaysia’s 
second biggest bank which in 
the past has been dogged by 
financial scandal and misman- 
agement, seems to have put 
the bad days firmly behind it 
with a big leap in profits. 

For the year to end-March, 
Bank Bumiputra recorded a 
pre-tax profit of M|450m 
(US$176m), compared with 
M$8tm in the previous year. 
Group income for the year rose 
almost 90 per cent to M$990m. 

Directors said that fee-based 
income and foreign exchange 
eamhig B made up about half 
the group’s income, while the 


recovery of bad loans contrib- 
uted considerably towards the 
leap in profitability. 

Bank Bumiputra is wholly 
owned by the Malaysian gov- 
ernment In the mid-1980s, it 
was involved in a loans scan- 
dal centred on the exposure of 
its Bumiputra Merchant 
Finance subsidiary in the Hang 
Kang property market 

Later, the bank faced hank- 
ruptcy over bad loans, this 
time in. the Malaysian market 
On both occasions Petronas, 
the Malaysian state oil com- 
pany, had to come to the 
bank’s rescue. 

The Malaysian government 
intends to privatise the bank. 


Evolutionary, not revolutionary, approach at Elf 

; -• ft- ; .vV& sAffriyhcti ;-V 


A tanker cannot turn on 
a sgpgnce, and it takes 
time to steer a new 
course at one of the world's 
leading oil groups. 

That is the message from Mr 
Philippe Jaffrti, chairman of Elf 
Aquitaine, France's largest 
industrial concern, after one 
year at the fraim and seven 
months after having guided bis 
charge through privatisation. 

That is also the message 
from first-half results, which 
showed a decline of 10 per cent 
in net profits to FFrUbn 
($222m). A boost from the com- 
pany's chemicals activities in 
the second quarto: meant the 
result was better than expected 
after a profits warning in June. 

But Elf is still looking at 
another year of relatively 
meagre pickings, compared 
with the FFrl0.6bn at which 
net profits peaked in 1990. 

Part of the explanation for 
the decline in profits lies in 
adverse conditions which have 
confronted all of the interna- 
tional oil majors - the fell in 
the oil price which continued 
into the first half of the year, 
p r e ss ure on r e fining ma r gina 
and, for non-US groups, the 
weakness in the dollar. 

But Elf also feces structural 
problems which have sapped 
its powers of resistance. “When 
you have any structural prob- 
lem, it takes time and a lot of 
effort to remedy.” says Mr 
Jaffrfi. 

The problem is the legacy of 
an expensive and ambitious 
expansion strategy in the early 
1990s, which included the 
acquisition of the North Sea 
assets of Occidental of the US 
and stakes in diverse compa- 
nies such as Bidennann, the 
textiles group. 

The strategy left Elf with a 
rising debt burden, which 
totalled FFrSStm at the end of 
last year, increased financial 


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charges and a declining return 
on capital, which fell from 13 
per cent in 1989 to 4 per cent at 
the end of last year. 

In an attempt to reverse the 
trend, Mr Jaffrfe is p u r suin g a 
strategy of debt reduction, 
tighter controls on investments 
and a focus on the group’s 
three core business areas - oil, 
rfrgmi rate and healthcare. 

But he is hnpkiitfntiiig Ws 
strategy through an evolution- 
ary rather than a revolution- 
ary approach, avoiding 
announcements of aggressive 
cost-cutting. 

The approach has prompted 
impatience among some inves- 
tors. “I think that a lot of peo- 
ple who bought shares in Elf 
when it was privatised wan 
buying for the upside potential 
of a big restructuring sfaribir 
to what has happened at com- 
panies like BP.” says one ana- 
lyst at a US securities com- 
pany. 

There Is a ftwfing that Mr 
Jaffre is moving in th» right 
direction but they haven't 
heard much to convince them 
of a big rationalisation 
effort.” 

Mr Jaffrd is aware of such 
sentiments. T know that 
AngloSaxon investors adore it 


when big costcatting plans are 
announced.” he says. 

However, the Elf chief 
argues that such an approach 
is Inefficient in the case of 
French industry and that the 
measures being implemented 
at Elf, without fanfare, are 
beginning to bear fruit. 

On the first count, Mr JaffriJ 
claims that the best way to 
prevent a restructuring plan in 
a French company Is to 


For Elf as a whole, he argues 
that significant reforms have 
also been put in place over the 
past nine months, attacking 
the company’s cost base and 
improving efficiency. 

Investment spending this 
- year is to be reduced by 20 per 
cent to FFi32bn. The FFri5bn 
spent in the first half shows 
the company is on course to 
reach this objective. 

Elf's participation in the 


quarter, and a farther FFr3bn 
or so by the year-end. Against 
thin could be offset about 
FFrlbn through an investment 
in Renault, a dose partner erf 
Elf, should the vehicle group 
be privatised. 

The sale of assets will help 
ease EH 1 s debt burden, which 
Mr Jaffre says has stabilised 
and should start to decline 
from nest year. But although 
he is a forma: head of Credit 


Philippe Jaffr6 has run the oil group for a year, guiding it 
through the first stages of privatisation, reports John Ridding 


announce it in advance. “If I 
was to declare a big cost-cut- 
ting plan then, there would be 
resistance.” 

The Elf chairman argues 
that French industry has made 
significant progress in reduc- 
ing costs arid infrwwriTig effi- 
ciency in recent years without 
high-profile restructuring 

annrtinifienienta - 

He cities Renault, the auto- 
mobile group, and Saint 

flrihnfn, the glass and h trilifiwg 
materials company, as well as 
Elf’s own chemicals opera- 
tions, which saw profits treble 
in the first half of the year. 


Leuna refinery project in east- 
ern Germany has been cut 
from a majority stake to 43 per 
not, after a test of strength 
with the Treuhand privatisa- 
tion agency. 

The company has also 
embarked an an «iia pro- 
gramme aimed at realising net 
receipts of FFrfibn this year. 
Mr Jaffrfi says the target is 
within reach. Receipts in the 
first half amounted to 
FErL5bn. including the sale of 
Elf s stake in Havas, the media 
and publishing group. 

Another FFr2bn should be 
realised by the end of this 


Agricole, one of France’s big- 
gest banks, he denfes he is tak- 
ing a purely financial approach 
at his new charge. 

T didn't start by saying I 
must cut debts at the group, 
which would have been a bit 
reductionist I started by say- 
ing that we must reestablish 
the profitability of the group 
and to do this we must con- 
centrate on our core busi- 
nesses. As a consequence we 
can sell assets and reduce 
debts.” 

Financial charges are expec- 
ted to start falling from 1995, 
when most analysts see the 


Amcor advances to A$336.9m and increases yearly dividend 


By Itikki Taft 


Profits at Amcor, the Australian 
paper and packaging group, rose to 
A$33&9m (US$25Qm) from A$2S6Jm in 
the year to endJune, after tax but 
before abnormal charges. 

The company said the advance 
reflected improved results across its 
operations, and came despite highly 
competitive markets. 

However, bottomline results were 
marred by abnormal items, which 


included a charge of A$80.3m, mainly 
covering restructuring costs flowing 
from, the APPM acquisition last year, 
and goodwill write-offs. 

In the previous year, Amcor 
eqjoyed a AJ4&n abnormal surplus, so 
profits after tax and ahnoimals Ml to 
A$25&6m from A$314.9m. 

Sales for the year were up to 
AfSJftm from A|182bn, and earnings 
per share before abnormals and an a 
fUBy-dUuted basis increased by 19*7 
per cent, to 56.4 cents. 


hi the containers packaging divi- 
sion, sales were op by 124 per cent to 
AfL79bn, while operating profits rose 
to AS203Jkn, from A$200Bm. Amcor 
said the result was good, given “the 
extensive rationalisation, and other 
structural changes in the industry 
sectors in winch containers operate". 

Amcor Fibre Packaging saw sales 
rise to A$L78bn from A$L53bn, w hile 
profits were A$141.9m, against 
Afnil.lm last time. 

On the paper side, Amcor Paper 


Group produced a 9.4 per cent operat- 
ing profit gain, at A$177.4m. with 
sales climbing by 28 per cent to 
AfLlSbn. 

Interest charges foil to A|634m 
from A|75Jm, and tiie group’s capital 
and acquisition expenditure during 
the year topped A$lJ.bn, compared 
with AfTO&n previously. 

The dividend for the year is 34 
cents, up from 31 cents, with a final of 
2 cents higher at 18 cents. 

• Burns Philp. the Sydney-based 


rarmpany which baa been b uilding up 

its food ingredients business aggres- 
sively in recent months, yesterday 
announced after-tax profits of A$123m 
in the year to end-June, up from 
A$lI(Um last thm> 

Operating earnings, before interest 
and tax were 14 pm cent higher jt 
A$2194m, while sales were A$2.79tai, 
compared with AS2.68bn previously. 

, Earnings per share, on a folly-diluted 
basis, increased by 6 per cent to 27.6 
cents. 


Annual Investor Statement 
Dated as of August 12, 1994 


CHRYSLER CREDIT CORPORATION 


CARCO DEALRs 5 " WHOLESALE TRUST 1990-A 


An— «l Erator Stete — m m of Aoft 12, 1994, for (be oae year period 
wuMrfm Anfort 13,1993 and tnJag ca Aagat U, J9H (the “Aamni 
FarM") m protfckd by Ckqntor CredU CocporaUoa, m Scrriccr. 


Tin folkiwkisiiifainnlknUptovkled by Chrysler C>n&Oxp(rzikia.Micrrkcr (the 


“SenkaT) pwmant to Section SC2 at dw Pooling and Sorting Agreement dated as of 
AngHKl, 1 990 among Chrysier Auto Receivables Company. MfeQer, the Servicer and 


. . -.the Servicer and The 

Rtf i Barik Ml That Gmpany. at trustee (Ac *TOwling and Servicing Axrcemeat’')- 


Tonl Pdacqul Receivable! balance on August 12. 1994 awowHcd to US. 
S6SI sns&sn. Such a umgaw b a l a nce la allowlcd among the various ow unaki p 
kxenats aa fbDows: 


touwAnnu 

U^.S 650,00000000 

Bue SobonUmted Sdkr AmomH 

O-S-S 

Sl.TQSjOOaOO 

facnareml Srtwrdioiwi Aaowa 

UJ 5 S 

8^237-00 

Senior SdlcrAmoam 

US .s 

5^000,000-00 

Exoen Senior Amour* 

US.S 

4,436438.69 

Qg Credit "fawwiiml COfTtXtly Will 
coaiprlMd of the roOowlng: 

US.S 

93^55 jOOaOO 

SfR9d AccnoH BiUnw 
• Not boon! (Decreue) in 

Spread Account Balncc for the 

US.S 

Msnoaaoo 

comm Amnlhriod 
- Percootajc of Spread Amount Cap 

US.S 

-0> 

100X0% 

Ba*c SuiunitaaKd Seller AnjoatU 
- Net bereau (Dccreava) in Brea 
SntMnSnHed Seller Anmmt for 

US.S 

51.705X00X0 

Ihccorrerti Ammal Period 
- faixunpi of MM B«ae 

SaiwnUiMttd Seller Aisdouc 

US.S 

-0- 

100.00% 

Available Letter of Credit Amoral 
. Net faottuci Decrease) m 

AreihMc Letter of Ovdit Amount 

US.S 

32^00X0000 

for the cnatnt Awl Period 
• Poceota^ of Stated Letter of 
CMAAmoeat 

US.S 

-O- 

1 00.00% 

Yield Sapplcmcm Acconnt Balance 
- Net Increase (D eeteaae) in Yield 
Suprtiemcai Account Balance far toe 

UJS.S 

tisoaooaoo 

cancnl Amul Period 
• Perccn«*cof Spread Amount Cap 

US.S 

6JWO.OOO.OO 

100.00% 


AnabMeRmdiMccedodReqolsBd Monthly Coverage fai i2cntofiba iZmoabsaTlhc 
anna Annusl Period. 


Amman »hhdb*— limn the Speed Aoeounc 
Amount at AvaflaMa Su hon U nnn d Rmda drawn: 
Annad at draw andtr the L etter of Occfic 
Atroam added to Ibe Yield Supplement Account: 


US.S -0- 

U-S-S * 

US.S -o- 

os. 5 6 joaooaoo 


Annual hn—S—ament no AmvtfaaiiwnK w»«wK»«h»^iriffmMt 

to have occuned. 

Captttlxed Kna used but dm defined herein have the mcaoiiigs asafted Uamo in the 
Pooling ««1 Scrviant Agreement 

By: Chrysler Credit Corporation 
as Servicer 



Mortgage Funding Corporation No^ PLC 

(iwiiiponnai m onJ Wda homed 

buWiw under rcglstmd nuntbor 207V67I) 

Class A Multi-Class Mortgage Backed Floating 
Rate Notes due November, 2035 

Class A- 1 £110,000,000 OasaA-3 £17,500,000 
Class A-2 £ 80,000,000 Mesranine Notes £18^00,000 
Rirtheinrere«p*sioJ3tat Angiw, 1994 to 30th Novum her, 1994 the 
Claw A-i Nows w-tll b«r incetex at 5-9375% per annum. Interest 
parable on 30th November, 1994 will amount to £469.66 per 
£31.727.27 Note. The Class A-Z Notes will hear interest at 6.1125% 
per annum. Inrcrcst payable on 30th November, 1994 will amount ro 
£1,52 3. 94 per £UXJ,000 Note. The Goss A-3 Notes will bear interest 
at 6.2625% per annum. Interest payable on 30th November, 1994 will 
amount to £1,561,34 per £100,003 Note. The Mesamne Notes will 
bear Inrerest sir 6-6625% per annum. Interest payable on 30th 
November, 1994 will amount to £1,661-06 per £100,000 Note. 


BaokemTeust 
Company, London 


Agent Bank 


U.S.$1 60,000,000 


uivic 


United Microelectronics Corporation 
Ohe Company*) 

(Incaijxx wt mtmtrilmtt ml li hat yti Tbh anmpvMeefCb*H 


1^5 per cent Bonds due 2004 
CUM Bands”) 

NOTICE IS HEHB 3 Y GIVEN to tow hoktara of toe outstanding Bonds mat too 
Company has anoounoad a bonus share issue of 171 , 538,420 shares wRh a 
record data of July 7 . 1994 . In a ccor dan ce wflh toe previsions of toe Indentue 
constituting toe Bon ds toe Convention Price has been adjusted from NTS 94 
per share to NTS 75 per share aflodtve July 13 , 1994 . 


iflliuKl RmuMCuvniCI VOiputeudll 

September Z 1994 


31 Internationa] B.V. 


SI 50,000.000 
Guaranteed floating rate 
notes 1999 


The notes mill bear interns! at 
5.75% per annum tor the 
imeresl period 31 Aaffat 1994 
to 30 November 1994. Interest 
payable on 30 November 894 
aiOmnoanttoSI4336per 
WOOOmteandU433J8per 
im. OOO note. 


Agent Morgan Guaranty 
Trust Company 


jPMorgan 


CREDIT LOCAL DE 
FRANCE -CAECLS A. 


U^42, 000,000, 000 
Euro-Medium Term Notes 
SERIES NO. 12 
FFC725, 000,000 Inverse 
floating rate notes 1996 
TRANCHE NO.l 


Notice is hereby given that for 

the interest period I September 
1994 to 1 December 1994 the 
notes aiB bear interest at 
24 . 69925 % per annum. tS aest 
payable an J December 1994 
mttl amount ro FF 31 J 17 .il per 
FF 50 Q. 000 denomination. 

Agent Morgan Guaranty 
Trust Company 


JPMorgan 


To the holders of 

Mortgage Capital Trust I 
Collateralized Mortgage Obligations, Series A 
Class A>1 Bonds Due 1st June, 2017 

Nunce is hereby given that die interest rare cm the Ciaai A-l Bondi for 
the interest period 1st September. 1994 through 1st December, 1994 is 
5.6% per annum. 

By: Bankers Trust Company, as Trustee. 





ROUND 

TRIP 


Signal 


O l 3 O*solbmreap 0 lHdlons O 
O RT0ATA raOMSIOADAY © 
O Signal SOFTWARE GUIDE Q 
C»S London S’ 44 + ( 0 ) 71 231 3 SS 8 
far your guide and SjgnN price let 


Petroleum Argus Daily Oil Price Reports 


Petroleum Argus 


t 


REUTERS lOOO 

24 hours a day - ontytlOO atnonthl 
UVK PMMICUL DfQEA OHBCTTO HOUR PC 







Mortgage Finding 
Corporation No 2 Pic 

5115.000. 000 Class B-l 

51 1.000. 000 Class B-2 . 
Mortgage backed floating 
rate notes August 2023 
for the interest period 31 
Angst 1994 fo 30 November 
1994 the Oass B- l notes am 
bear interest at 53875 % per 
anmiiiL Interest payable on 
30 November! 1994 wBl 
amount to 51,46734 per 
5100/100 note. The doss B -2 
nofes urill bear interest at 
6 . 0625 % per annum. Interest 
payable on 30 Nooember 1994 
mflf amount fo 5 UjS 11 . 47 per 
5100,000 note. 

Agent: Morgan Guaranty 
Trust Company 

JPMorgan 


iri Mar 

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ono 

10.10 

031 

931 


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1230 

1438 


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1838 

19.17 

0800 

1032 

1T44 

1034 


2032 

1091 

1040 


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19JIB 

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2016 

2130 

2401 

ion 

2017 

3028 

3079 

1030 

2017 

3028 

38.79 


9018 

2131 

2402 

11*3 

9018 

91X0 

2430 


2013 

1937 

22.17 


2010 

1038 

22-16 

1300 

2013 

18X3 


13» 


1934 

•^TTJ 

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1033 

17JB 


1«Q 

1832 

17A4 


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17A4 

103* 

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1082 

1631 

19.40 


1082 

1091 

1940 


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2437 

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1800 

2437 

1831 

1940 

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1019 

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31J30 

1032 

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3134 

1888 

1844 

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2230 


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1077 

2290 

208 

ZOO 

1738 


208 


1037 

1018 

1838 


1023 


1072 

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1018 

1238 

MSS 








WOOLWICH 
- Building Society - 

£33,000,000 

Subordinated floating rate 
notes due 2001 


Notice is hereby green drat Ore 
notes mU bear mterest at 
7 . 1625 % per annum from 
31 Angst 1994 to 28 February 
1995 Interest payable an 
28 February 1995 trill amount 
to S 355 L 82 per 5100,000 note. 


Agent Morgan Guaranty 
Trust Company 


JPMorgan 


HANGF&CTQBZB 8 HAN 07 E 1 

7XUCTCOWANY 

GBP7t.oeo.ooo 

FLOATING KATK SUBOEWNATED 
CAPITAL NOTES DDE ISM 


In ncoo ria ncc with tha provision! 
of the Notes, aoda? Is terebjr gtvm 
that the Bare of Interest tor the 
Interest Period from 31 August 
ISM to £1 November I8M hss been 
fixed at 6*«. per cent per «tmma. 
The Coupon Amounts win be 
S63JB tor the SSjOOO dcBoatesdoa 
end £638.87 tor the £50,000 
denondnsdan sod wU bepsj«ble 
on SI November 1994 sgnlmt 
‘ ofCore>o»Jfc>.38. 


As Apant took 


£65,900,000 
CARPS Ul Limited 


Secured Amocttelng Floating 
Rate Notes due 1999 


For toe tone month Interest period 

W tt 31, 1994 to November 30. 

toe rate has been determined 
at 9.7625%. The Merest payable 
on the relevant Merest payment 
d&Sa, November 30, 1994 wfll be 
EB0B.1BJMT £83^174^6 principal 



SeptamtMr2, 1894 


AXRANBS A BORGAOKJOBOCH 

. H&VTINC CORPORATION 


niBtkg Me Nates datUK 
Is acaoidiaae wldi tba Tcna md CMdUoei 
oTOb Noes, aadee h kcichy gim tim br tin 
Interest Period ben Aipui 31, 1994 10 
Fabnan % 1995 the Note, will emaj as 
btem Rate <*£079* par amm. 

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TBS ACENT BANK 


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off electricity 


021 423 3018 


Powerline 


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Margined Foreign Exchange 
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rdr of ore Jnfl raogeof Itnanctel Infonnation rerricea. call 071-895 M00. 

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potential fix & healthy rise in 
profits. Until then, the debt 
burden nnA h» weakness in 
the dollar will offset, partly at 
least, the gains from a higher 
second-half ofl. price and stron- 
ger profits from fthrewiraito and 
healthcare operations. 

Measures are also being 
to increase the pmphmrfg 
on profitability among the 
company’s 90,000 employees. 

Mr Jaffre denies that radical 
measures are needed to shake 
up the culture of the group. 
"Elf already has a taste for per- 
formance and development 
which is shown by the fact 
that it has gone from nowhere 
50 yeare ago to rank among the 
world’s 30 biggest companies 
today.” 

However, he says he is seek- 
ing to add a bit of “mustard" to 
nfarif attitudes through mpanA 
" ing employee share ownership 
and iwtrnduriTig stock options 
for senior executives, a scheme 
which is being dismissed by 
Elf s board. 

Such Anglo-Saxon measures, 
he feels, will sharpen Elfs 
competitive edge. 

For British and US investors, 
however, it is a trace of mus- 
tard at the bottom line which 
is awaited. 


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FINANCIAL TIMES 


FRIDAY SEPTEMBER 2 1994 


idend 


INTERNATIONAL CAPITAL MARKETS 


Further downward pressure put on bunds 


By Antonia Sharps fn London 
and Frank McGurty 
to New York 

Although the Bundesbank's 
decision not to change official 
interest rates was widely 
expected, the news put farther 
downward pressure on German 
government bonds, which had 
already received an e a rly 
knock from stronger th a-n 
expected west German indus- 
trial production figures. 

The data showed a 2_2 per 
cent monthly rise in July, com- 
pared with market forecasts of 
between 0J5 per cent and 1.5 
per cant and was seeo as a 
further confirmation, that the 
economy was growing rapidly 
and the Bundesbank would 
have even fewer reasons to cut 
official interest rates farther. 

Dealers said the central 


bank's derision to slid to a 

fixed rate of 485 per cent for 
its nod two securities repur- 
chase tenders added to the 
argument that its priority had 
shifted, from further paring to 
managing smoothly the trough. 
of the interes t rate cycle. 

government 

BONDS 

Mr Kit Juckes, of S-G. War- 
burg. said the shape of the Ger- 
man, yield curve suggested that 
the market was still fairly 
relaxed about the monetary 
outlook. “B nnda are compla- 
cently priced given the likeli- 
hood that Ger man rates will 
start to rise next year,” he 
said. On Liffe, the September 
bund fixture fell 0.48 points to 
9L27 in modest trading. 


Ten-year issues in 
Canadian dollars 


By Graham Bowtey 

The C anadian dollar market 
saw two 10-year eurobond 
offerings yesterday as borrow- 
ers took advantage of the 
recent revival in the underly- 
ing Canadian gover nment bond 
market 

INTERNATIONAL 

BONDS 

BNG launched a C$250m 
issue, priced to yield 22 basis 
points over the 6ft per cent 
Canadian government bond 
due 1994. Lead managers ABN 
Amro reported demand from 
retail investors in Belgium and 
Luxembourg but about 60 per 
cent of the bonds are expected 
to be taken up by European 
institutional investors. 

The Canadian dollar market 
currently offers good swap 
opportunities, particularly at 


the long end, and investors in 
particular like the spread 
against the US market syndi- 
cate managers said. 

Ile-de-France launched a 
C$8Sm 10-year bond, priced to 
yield 16 basis points above the 
6ft per cent Canadian govern- 
ment bond due 2004. 

The eurobond market also 
saw a Dock of other issues yes- 
terday, mainly small, short- 
dated deals aimed at retail 
investors, including five US 
dollar offerings. 

"This signifies that tha dol- 
lar markat will be the marirat 
of choice in the fourth quarter 
ra ther than more peripheral 
markets as borrowers go for 
safety," said one syndicate 
manag er. 

Ford Credit Europe tapped 
the US dollar market with a 
9200m three-year offering 
priced to yield 37ft basis points 
above the 6ft per cent 1997 
Treasury. Syndicate managers 


■ UK gilts outperformed 
their continental European 
Counterparts fhanks to a late 
rally which dealers had diffi- 
culty in explaining. Sterling's 
resilience m the face of a fall- 
ing dollar and a newspaper 
report that 10-year gilt yields 
could 601 to 7% per cent were 

given as passible reasons. 

The rise in gilts caused a far- 
ther narrowing of the yield 
spread between gilts and bunds 
to 132 basis points, which 
forced more dealers to close 
their short positions. “The 
bears are bong squeezed out of 
the market," said (me analyst 

On T.ifrp [ fha December teng 
gilt future was & higher at 
101ft in the late afternoon, 
below the day's best of 102 A. 

■ Elsewhere. Italian govern- 
ment bonds fell in nervous 


trading as a result of renewed 
infi ghting in the government 
Italian futures Ml by nearly a 
point By contrast, French gov- 
ernment bonds were steady fol- 
lowing an uneventful monthly 
auction of OATs. 

■ US Treasury bonds drifted 
lower yesterday morning as 
traders awaited today’s report 
on August conditions in the 
labour market 
By midday, the benchmark 
30-year government bond was 
down ft at 100&, with the yield 
rising to 7.467 per cent. The 
two-year note was off A at 
1Q0&. to yield 6.148 per cent 
The market was hoping 
today’s employment data 
would provide it with clear-cut 
guidance on the strength of file 
economy. Beforehand, trading 
remained fight, thmi gh a nega- 


tive tone was cast over the 
morning's activity by fresh evi- 
dence of inflationary pressures 
in the manufacturing sector. 

The National Association of 
Purchasing Management said 
the prlces-paid component of 
its monthly survey had 
climbed to its highest level in 
six years. However, the overall 
index of business activity was 
weaker ft> an expected, complet- 
ing the pattern which emerged 
in a regional Chicago survey 
released on Wednesday. 

The net impact on bonds was 
modest losses across the yield 
curve. Still, yesterday’s data 
revealed nothing to change 
expectations about today’s 
report. Economists are fore- 
casting an increase in non- 
farm payrolls of about 225,000, 
suggesting a moderate pace of 
economic growth. 


NEW INTERNATIONAL BOND ISSUES 


US DOLLARS 
Fori Oedk Europetf 
Kiting Thai Bani$9*i 
Volvo Group Rwca Europe 
Btocfcattt 

tear OH*re»p» 

YB4 

Province at Ontario* 

WeaHJB Finance CaacooW* 
D-MARKS 

Deutache Aus tf tellte s rfc* 

OZB* 

CANADIAN DOLLARS 
BNG 

Region Itede-Francs 
ITALIAN URE 

P6K 

guub« 

Bsyertache Landeefaw* 

AUSTRALIAN DOLLARS 
Bayorteche Vanrinabanfc 

FM terms and non-cafefcie unto 
manegec. feJitirtnri jfloatog rale 
ooupon dates from SepX9 a! par. 
4&&PL 4 toaua taunctad 6/TO4 w 
Ubor +4 W- 


Amount Coupon Prica 
m. % 


Maturity Fmi 
% 


200 ears 99X85R OcL 1987 025R +S7»(B)*%-«7)Gottn«n Sachs Int e rnatio na l 

ISO ffR) IDG. 00 SapJ20O4 0.45 - Gokknan Sachs Skwpora 

150 7X75 99.47R Sep. 1999 0L37SR +S6(SH%-99) Man* Lynch lut wn a tfc m al 

150 (cl) flflXOR Oct 1995 0.1 OR - Safes Bank Carp. 

SO fdl) 100.00 Ji4i699 infect - Chase Uveetmtrt Bank 


ICfcfl 4.25 100.00 Sep. 1999 infect 

lObn -L22 100X0 Sop.1989 infect 

300 M 10042 Sepi2001 020 

400 ffl 9059 SepXOOT nan 


CS First Boston 
CS Fht Boeten 

DG Bank 
DG Bank 


250 9.125 B8X4R Sep2004 0325R +22<BV4%-04) ABN Amro Bank 

86 9.00 BflJIR OCL20Q4 0325R +16<8ta%-04) Patoas Cspttal Mafcets 

ISObn 11.00 101.12S Qq-1996 1.126 Safea Bank Corp. 

2SO 8X75 95 TOR Oct1997 0.1875B +1«*(Bta*-97)ABN Amro Bta* 

100 aOO 101X3 Oct1996 1.75 ABN Amro Bar* 

ss stated. The yield spread jowr retavant government bond) a. launch ia arppted by the load 
note, ft fixed re-offer prica; fees era shewn at the re-offer level a) Sheri 1st coupon. 4 QaOebta on 
bl) 6-mth Ubor +98 bp lor 1st Syrs end +22Sbp thereafter. c} Long hat cotton. cl) 3-mth Lfcor 
m Increased to CSttw. Plus 46 days accrued, dl) 6-tntti Ubor +288cp. a) B-tntti Ubor fiat 1) S-irth 


said the deal was a success and 
lead manager Goldman Sachs 
said the bonds were mainly 
sold to Swiss retail investors. 

Volvo Group Finance Europe 
also tapped the dollar mark et, 
with a $15Qm five-year issue 


priced to yield 56 basis points 
over the 6ft per cent Treasury 
1999. 

Syndicate managers said the 
pricing was ambitious for an 
unrated borrower and that the 
bands were pitched at a less 


popular area of the curve. The 
spread widened slightly in 
later trade. However, lead man- 
ager Merrill Lynch said it saw 
si gnificant interest from Swiss 
and Benelux retail investors 
and institutional investors. 


Canadian 
bonds top 
performers 
in August 

By Graham Bowtey 

The Canadian government 
bond market outperformed the 
rest of the world’s bond mar- 
kets is August 

J.P. Morgan’s government 
bond index shows Canadian 
bonds posted a return of 2.78 
per cent, measured in local 
currency, followed by Austra- 
lia with a gain of 1.51 per cent 
and the UK with 0.79 per cent 

Investors were attracted into 
the Canadian market “by 
favourable inflation figures, 
10-year yields above 9 per 
cent, and real yields that are 
among the highest available in 
the bond markets", JJ\ Mor- 
gan says. 

The core European markets 
of Germany and France gained 
at the expense of the higher- 
yielding markets of Italy, 
Spain and Sweden. Interest 
rate rises in Italy and Sweden 
were seen by investors as 
"portents to rate rises by other 
continental European central 
banks", triggering losses 
across European markets. 

Sweden, which saw a return 
of minus 0.93 per cent on the 
month, also suffered from 
investor concern over height- 
ening political tenrinns ahwiil 
of the general election. 

The worst performer in 
August was tiie Danish gov- 
ernment bond market, with a 
return of minus 2.76 per cent 
in local currency. The average 
rate of return across all coun- 
tries was minus 0.46 per cent 

The UK gilt market was 
boosted by economic data . 
which painted to low inflation, 
“b anishing fears of an early 
rise in interest rates”. 

US Treasuries posted a gain 
of 0.13 per emit in August, 
with unhedged dollar-based 
investors benefiting from the 
dollar’s recent decline. 


Commodities fund 
launch delayed 


By Antonia Sharpe 

Unexpectedly strong interest 
from Japanese investors in a 
commodities fund which is 

about to be launched by BZW 
I nvest ment Management 
(BZWIM) has prompted a delay 
in the publication of the path- 
finder prospectus to allow time 
for it to get clearance from 
Japan’s ministry of finance. 

To tap Japanese demand, 
BZWIM needs to register the 
closed-end fund as a private 
placement with the MoF. The 
process Includes translating 
the document into Japanese 
and answering MoF queries. 

Mr Ronald Gould, the 
BZWIM managing director in 
charge of setting up the Jersey- 
based investment company, 
said the prospectus, due to be 
published next Monday, would 
now be released a week later. 

The strong economic 
rebound in the US and parts of 
Europe, coupled with signs of a 
resurgence in inflation, has 
aroused investor interest in 
real assets, such as commodi- 
ties, because of their character- 
istics as an inflation hedge and 
a play on economic growth. 

“You will dampen risk and 
volatility in a portfolio by 
introducing commodities as an 
asset class." said Mr Gould. 


In his view, an allocation of 3 
to S per cent of total assets to 
commodities would achieve the 
best results. However, he esti- 
mates that in the UK, only a 
tiny amount is invested in 
commodities, while in the US, 
where investors are more com- 
fortable with commodities, 
they only account for 1 per 
cen t of p ension fund assets. 

BZWIM. which has around 
£50bn under management, will 
be investing in the fund, which 
is expected to attract at least 
£100m from institutional inves- 
tors. 

The benchmark for the fund 
will be the Goldman Sachs 
Commodity Index. Mr Gould 
hopes to outperform the index 
by up to 10 per cent by giving a 
greater weighting to industrial 
materials and energy, which 
should benefit the most from 
stronger economic growth. 

The fund wfll use exchange- 
traded futures contracts to 
gain exposure to commodities 
but they will be repackaged in 
the form of notes issued by 
highly-rated banks or through 
swap agreements with banks. 

This buffer is designed to 
counter any discomfort amnng 
investors to direct exposure to 
futures and to allow institu- 
tions that are not able to buy 
futures to invest In the fund. 


Greece names OTE banks 


By Antonia Sharpe 

The Greek government has 
appointed 10 foreign banks to 
act as global syndicate mem- 
bers on the international 

t ranch e of the its p lanned par- 
tial privatisation of OTE, the 
Greek telecoms monopoly. 

They are: ABN Amro, 
Banque Paribas, Bear Stearns, 
BZW, Deutsche Bank, James 
Cape! iA»hnian Brothers, Salo- 
mon Brothers, S.G. Warburg 


and Yam ai chi. The syndicate 
will be managed by CS First 
Boston and Schraders, which 
were appointed joint global 
co-ordinators of the issue in 
May. along with National Bank 
of Greece. 

The government hopes to 
raise around $lbn from the 
sale of 25 per cent of OTE's 
shares and the offer should 
take place before the end of the 
year. It plans to sell 75 percent 
of the shares abroad. 


-V i "I 










CSi 



l A* * I 





WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONDS 

Rad Day* 

Coupon Dots . nice change 


Belgium 

Canada* 

Denmark 

France BTAN 
OAT 

Germany Btaid 
Italy 

Japan No 119 

Nsthertand a . 
Spain 
UK Gtts 


US Treasury ■ 

ECU (French Govt) 
London eknkip. *Nw« Y«k 
r draw tiKfafee rtMrtc 
ftfcoo: US. UKhfiMa.' 

US INTEREST 


9.000 08/04 

7.250 04/04 

8X00 06AM 

7.000 12AM 

8.000 05/98 

6-500 04/04 

8.750 05AM 

a 500 (MAM 
4X00 06/99 

4.100 12AB 

5.750 01/04 
aooo 05AM 
6-000 08/88 
a 750 11AM 

aooo iQ/oe 

7.250 09AM 
7.500 11/24 

aOOO 04AM 

mid-day 

tap tax rt 1Uper> 
«re»hdac*ral 

RATES 


974200 

322000 

asAooo 

88X700 

1023750 

84.4000 

962600 

81.6000 

1023290 

953020 

99.5800 

82X400 


Week Month 


937 931 924 

a« 040 797 

ars a 70 as* 
830 838 aio 
724 722 639 

736 731 729 


Italy 

■ NOTIONAL. ITALIAN GOVT. BOND (BTP) FUTURES 
(LIFFQ* Lka 200m lOOCtw of 100% 



Open 

Sdttpdoe 

Change 

Hgh 

Low 

EsL vel 

Open M. 

Sep 

10030 

0867 

-073 

10030 

9956 

50061 

38997 

Dec 

9050 

07-BO 

-067 

8045 

9750 

13333 

41030 

Mar 

- 

0050 

-076 

- 

- 

0 

100 


■ ITALIAN GOVT. BONO (JBTP) FUTURES OPTIONS 0JFFE) Lks200m lOOJha d 100% 


11.777 

4.10 

11.82 

3X7 

10X9 

3X6 

Strike 

Price 

Dee 

■ CALLS 

Mar 

Dec 

- PUTS 

Mar 

4.73 

4X6 

458 

9780 

2X2 

- • • • 3X5 ' 

2X2 

5X5 ■ 

7J32 

7X9 

6X1 

9000 

253 

2X5 

2X3 

5X5 

11X6 

1096 

1025 

9860 

2X7 

2.67 

2X7 

5X7 


80-30 

+8732 

826 

8X8 

8.18 

88-17 

+12/32 

8.44 

853 

8X2 

104-05 

+10/32 

8A& 

855 

8.48 

100-10 

- 

7X0 

7X2 

7.09 

100-09 

+3/32 

7.48 

7.47 

7XB 

844800 

-0X20 

0*1 

8X9 

7.79 


VMdKLBCrinMtoi 


M.1MI — 

MftnkrtMantefea- 


One rax® _ 
7% fee aan - 
8% TtaaaanHL 
4* 8k month ... 
- Onorea — 


Treasuy Bits and Bond YMk 

447 Trey— • 

4.70 ThMjrar— _ 

437 Has year 

533 10*rar 

&S 30-ysar 


BOND FUTURES AND OPTIONS 
France 

■ NOTIONAL FRENCH BOND FUTTKS (MATF) 

Open Sett prica Change Hgh U»r Eat. vol. Opm int 
Sep 11 a* 2 11336 -0.12 11338 11232 208,848 91.452 

Dec 11232 112M8 -0.12 11230 11238 13378 -48354 

MW 111.88 11132 -0.12 11138 11130 SS 4395 

■ LONG TERM TOENCH BOND OPTIONS (MATff) 

S&9» CALLS PUTS 

Price Oct Dec Mar Oct Dec Mar 

113 0.92 t.77 - 1.61 229 

1,4 049 1-28 2-“ 

115 026 037 - - 3-45 

116 aiO 036 - - 

117 0.05 0.34 tt71 - 4.75 

Eat. weL tofe, C*H 1S31B Fife iai7B ■ Pre<tai« ^ 176.71* Pan 2Sa^oa 

Germany 

■ MOTIONAL G6HMAN BUND FUTURES (UFFE)* DM2SOOOO IQOfta of 100M 

Open Sett price Change Ho* &»• vol Open rt. 

Sea 9137 9129 -046 9130 9121 128891 95626 

91.08 90.48 -048 91.08 9040 28745 5140* 

Mar - 99.93 -0.46 - - - 0 520 

■ BUMP FUTURES OPTIONS fiJFPO PM2Sq000 pdnfe o< 100% ; 

PriST oct Nov Dec Mar Otf Nov Dec Mar 

amw nag 13S 138 1-74 050 087 . 1.10 13t 

SS oS IS 129 139 071 1.09 121 238 

SS a*S 031 1.04 128 097 123 136 033 

EX. vet kud. Cdk 5211 Plfe 8675. PtwMia open ka, OBfe MB162 Fife WWW 

■ NOTIONAL MEDRIM TERM OSWAAN^VT. BOM) 

( BQBmUTET DM2S0300 IQOtha o* Igg* 

open Settprioe Change »9h U»w BsL wot Int 
Son . 97.12 -023 - - 0 78 


Ex VOL awri. Cafe 13Z3 Putt 875. Pnrioua feyv ope" W- Cate 4B1B Put* 7142 


Spain 

■ NOTIONAL 3PAM3H BOND FUTURES [MEB1 

Open Sett price Change rtgh Una EaL wL Open M. 

Sep ‘ 8730 8734 -019 8732 87.44 40393 9S278 

Dec 9838 9858 011 BB3B 9627 6A30 192*5 


■ NOTIONAL UK GILT FUTIWES (UFFEy* CS0300 32nde of 100% 

Open Sett price Change Hflh Una Est vet Open M. 
Sap 10903 102-16 +0-16 102-17 102-00 8938 49106 

Dec 101-22 101-31 eO-12 102-02 101-14 42327 77443 

Mer - 101-11 40-12 0 0 

■ LONG GOT FUTURES OPTIONS (UFFE) £50,000 84the <fi 100% 


Low 

ESL VOL 

Open int 

Strtis 


■ CALLS 


- PUTS 

112X2 

200848 

91,452 

Price - 

Dec 

Mta 

Dec 

Mar 

112X8 

13X78 

48X54 

101 

2-45 

3-15 

1-47 

2-57 

111X0 

65 

4X95 

102 

2-09 

2-49 

2-11 

3-27 




103 

1-41 

2-21 

2-43 

3-63 


EX vet MX cafe 2130 Pu» 2S22. Prmioua da/B open X Cafe B13Z PM 14087 


Ecu 

■ ECU BOND FUTURES (MA7TF) 

Open Seripriee Change H^i Low EsL wL C^sen M. 

Sep 81 AG BIAS -002 9138 81.18 1291 5,905 

Dec 8088 8094 -002 8098 8066 1,128 2211 


■ US TREASURY BOND FUTURES (C8T) 5100.000 32nds ol 1DO% 



Open 

Latest 

Chenee 

Hfeh 

Lew 

ESL VOL 

Open M. 

Sep 

103-21 

103-18 

-0-05 

103-22 

103-17 

73.1422 

227X65 

Dec 

102-28 

102-24 

-04)5 

102-29 

102-22 

282X60 

206X16 

Mer 

10203 

102-00 

-0-08 

102-03 

101-30 

1X92 

6.488 


Japan 

■ NOTIONAL LONG TOW JAPANESE GOVT. BONO FUTURES 

(LIFFE) YlOOm IQOtha ot 100* 

Open Cfeae Change High Low Est vol Open M. 
Sep 10737 - - 108.12 10735 307 0 

Dec 10637 - - 107.12 10633 2717 0 

• UFre mhcb traded en Apt. M Open meow flpa. m far peutoce day. 


UK GILTS PRICES 


^.vuu_ 

Natn lat BM Ptfcal*g- 


(LIM> t* 11 tta 

• UK MSB 117t 

Eah Sac On 1960-09 - - 

IMucHSS ^ 

Tran iNac MW* — «•* 

Mac 1968 1243 

ISLpc I99S« 

E*ei3i«pMB9ea- — 

OBaanra MpcISSfi— ** 

TumCwTpctaaTtt-- 71D 
Tnaa HUpc 1 MW — 

-tea 18^1687. 

TrasBiipcifiartt— — 

&Cfc 15oc 1897 — 

MOC1936 

feaaeviKise^- 

BsoTSEisae.^- — 
baaNtfclO 9W- — 9,3 


RwtoHfeaeTtara 

Ea»l?idalW9_— - 
TtrasiQJsKtwa- — 
iMfecrantt ---- 
OmeraBn ttrtiK 19"- 
TtB» Hb«® 1989. — 

«c2an£ 

taaiteaw 

19* 2001—-. 

TPCSW tt 

7K2001 * 

oMsaoe 

Bnc3KSt$. — 

lOncZBtn 


5J0 lOMt — 
553 AKh — 
5JB 884 — 

831 iDMi — 

6.72 106B — 

691 HB*a 

7.16 H2% -hji 
732 U»% 

752 mi 
732 98%*l 
737 inti ** 
7.77 105H 
734 IflWt +& 

6.10 HOB 

8.14 IMS 

812 PW 

8.10 B6ti +A 

8» 1 US 
89113406 *& 

838 112B +* 

832 +& 


844114%al 
842 10711 ■»% 

127 BOSS* *% 
850 IWA +* 

- sW — 

844 102*6 4% 

832 1^ ** 
■ GO 

M7 %% 
a4S 

884 106% 

855 

883 lOOflN *h 


-!»*- .... 

Uph Uet H»t 

TMa 1I%K 2001-4 

10383 100% Bn»«3%pc 1S9B-4— 
107* 192% CmalHl3 , 3K2B04— 
9BA 97% fee»6%K?nW — 

10735 caw pc 2006 

^ fefel2%pcOTW~. 

3 3 saat= 

aSSSSJt: 

121R mn 13%K 3004-9 

ll4 IDSiS few 2008 « 

no,* 101 y 
13lfi 11W 
114JJ 10311 
1064 06* 

HO 94ti a_._-.vu_ 

131* 115a 

1MH 1^ T«»»8 1/^c20TO 

itS 193% C9w Wc la 2011# — ; 

T«fe9paaw«» 

1M5%K20DB-12tt. 
ttew fee 2013tt__ 

7%k2«»S» 

Trees S%ps 291 

ISM 11*A Btaifec 2013-17 

121 A 108% 


rid- — TB94 — 

Oaf PrieeC + or- MK l sm 


932 1133 
7j 4Q 72a 
858 108 

8.0 SBU 
8LM 108S 
890 12 & 
MB 94B6 
BJB S5AM 
831 tlffi 
MS 100A 
8J012B%BI 
MS 104% 


waw 

832 SIS 
942 10SA 
&41 W5A 
8.18 7«d 
837 SOSsI 
U4 935 

833 104% 
357 HIS 


101% - — 

loS CaBB0te ^ ,e - 

7 SS ’feruwia%fctt_ 
^ CBW3%KW«.- 
n»3re'9BML_ 
118 CDPKto2%PC-_- 
1D5)J Twaa2%pp— ■■■■ 


4% iayi 
-* 86* 
+i 125* 
4% 105% 
+& U5% 
M3* 
e* 112S 
♦a iii% 

♦i 136* 
119* 
+A 161* 

+% i«a 


99* 

«% 126a 
+% 127% 
+A 93% 
+% H7S 

-* 114% 

*H 126% 

*S 156% 


♦% 59% 
*4 54JJ 
*B 71 
e* 44% 
*i> 39% 
37% 


_Wd_ _1994_ 

mw fO ca races *<*- m o* 

W UNBd M 

fee *86 <57 5) 252 3JB199AM 4% 203% 1H7S 

4StfcV8» — pswi zm w wrft +% tui wi 

ZitfcVl (785) UB 339165UM 4% 176% 163% 

2%pcH3 (7&S) 359 872 181% *% 173% IS9* 

4%peTK« — (135^ 339 170 109% *% 118% 107% 

2K-W nil 3.46 171 190% ♦% 18412 166* 

(7M) 151 173 153i *% 166,1 149% 

2%ptTl j74U) 336 3.74 IfiESg +% 175% 154% 

2%pC 13 857 174 130S +% 14% 126% 

2%9C*16 VIA 380 3J6 139% +% 157* 134% 

2Hpt1D Bin 3£3 177 133% 4% 3S2jj 126% 

2%SC-Z*tt XB.1) 131 174 111* 4% 129* 106% 

4%k* 3DK 035.1) 165 179 110% 4% 126ft 105% 

PretreocOro ml radaoptfczi wbs on pra|ectad MtaUon of (1) IBM 
and £) 59L (b) fiflurai ki perenhesas show RP1 base far 
kictafeg |e B manta plor 10 beue) ad hwe been wfimeatl to 
iMbctiabafagaf API 10 100 81 Jsuty 1967. Comeman lector 
3.945. HR lor Decwrber 1993: 141 SeM tar Jife 1934: 1440 

Other Fixed Interest 


4% 129& 10 

4% 126ft 10 


Alan Dor 11% 2DI0_ 8X5 

Mn BnrW%OGi009_ fttt 


State ll%pcan2 


_Yldd_ _18M_ 

W fed Price E * or- IBp LM 


142* 115}} 

— 135% 10BJJ 
142 116 


MHfCte8%pcHl 

8.67 

- 

« 

+1 

116% 

85% 

dpeCfe 19B6 

83B 

— 

106% 

+*» 

101% 

1W 

13PCV7-2 

life 

- 

108% 

♦% 

115% 

103% 

H)rtbQaatac15pc2ni. 

10.49 

073 

148B 


I69Ji 

13912 

Leedc 13%fC2DQ6 

1057 

- 

127L 



1431, 

12W* 

Utendli^cM. 

946 

_ 

37 

- 

44* 

33% 

Ltt apeTOAtt. 

123 

— 

3Zh 


«*J 

au 

llasrtariaMligeMar- 

19X2 

951 

11«ti 

— 

136% 

112 


nm tar. »C 08 8(0 66% 78 86% 

IMta*i0l3%pcZGn. - Ml 133% 150% 129% 

4% pe 8-2Q4 _ <37 128% — 145%. 123% 

wife sata ip$c 2 ob lam - 197 _ 159% «4% 


• w stock, a 


TeaTfee •> 1 


, 5 Aurfloo bfefe ad a AMdard. Cfaefag ad^pricaa atann In pemda. 


FT-ACTUARBES FIXED INTEREST INDICES 

Price Indcee Thu Day's Wed Accrued 

UK Qflta Sep 1 change % Aug 31 Interest 

1 Up to S years (24) 12018 4018 11949 145 

2 5-15 years (21) 140.43 4020 14029 200 

3 Over 15 yeas (B) 15049 4034 15556 087 

4 Irredeemables (B) 17006 4033 17&S3 2J2B 

5 Ml stocks (60) 137X7 4021 13725 1.60 

Index-talked 

6 Up to 5 yearn 0 185.76 4008 185.60 068 

7 Over 5 years 01) T7L54 4OIO 17427 0.88 

8 AI stocks (13) 174.83 4010 174.87 084 

Debentwao and Loene 

9 Debs & Loans (7^ 12923 4021 12093 227 

fear a pe pa ra il e m ptle n yMds are etaaei dure. Caipon BmtOK Lew: 0M-7HW: 


OOI 5 yra 
B22 15yre 
921 20 yrs 
083 Irred-T 
8.79 


— Low coupon yield — — Medum coupon yield — — Hgh tfew ytald — 
Sapl Aug 31 YT. ago Sep 1 Aug 31 Yr. ago Sap 1 Aug 31 Yr. agr 

8.38 139 135 146 8.49 048 059 8.63 B.G8 

038 041 709 051 054 723 075 079 7.47 

035 038 7-23 051 054 723 061 065 750 

045 047 7.43 


095 Up to 5 yrs 
3-48 Oirer 5 yrs 
3.49 


mutton 5% 

Sap 1 Aug 31 Yr. hqo 

3.68 3.71 2-52 

3.75 3-76 326 


Irritation 10W 

Sep 1 Aug 31 Vr- ago 

2.90 222 1.74 
3-56 3J>7 009 


5 year yield — 

Sap 1 Aug 31 W- ago Sap 1 Aug 31 Yr. ago Sep 1 Aug 31 Yr. ago 

7.40 9-55 9,58 7.74 048 051 010 941 9.45 824 

Martian: 8%-lWOfc Hfet 11* and aer. T ffe yWd. ytd Yaar to cfata. 


FT FIXED MlfcHkSI INDICES GILT EDGED ACTIVITY INDICES 

3ep 1 Aug 31 Aug 30 Ar 4i 26 Aug 25 Yr ago Hgh~ Low/* Aug 31 Aug 30 Aug 26 Aug 25 Aug 2* 

Govt Secs. (UK) 92.10 91.98 91.74 8243 9190 102.15 10744 9048 Gffi Edged bargains 844 82.1 707 755 74.4 

Head totsresi 10090 10999 10094 10848 109.18 12498 13397 10743 5-day average 708 77.3 774 80-2 82-0 

' far IBM. Govern*** Sacwttfe hfei rfaoD careptatiai L 12740 p/l/aBJ. tow 4ft16 (371/75). fend kaeresr Npi tee a conpferion: 13347 (21/1/8^ , tow 8043 pn/75) . Bate 10ft Qovammrt Secutaas IS 
2fi and Rod rend 1B2S. EE aodvty torien w i n— 1 1974. 


S 844 82.1 707 755 74.4 

706 77.3 775 80-2 82-0 

133A7 (Z1/1/B4 . tow 50A3 (3Rr75) . Bate ItXk Qovammrt Securifeiisnar 


FT ASM A INTERNATIONAL BOND SERVICE 


Listed era ■« West MemeBard bands far ahleli thsra is an edsqireta secondary mariaeL Latest prices at 7S10 pm cn Septacter 1 
teusd BU Ofer Chg. *YWd Issued BU Oner chg. 1 


Drier Chg. YWd 


ILO DOLLAR SIRAIQKTS 
Ahbey Uri Tresauy 6% (B _ 

MwtsRums7%9B 

Austral 00 

BtokotTtkyD8%B6 

Bd0un5%Q3 

BRa-7%87 

MshQas021 

GrataSSB 

CtnngKong Rn5%BB — 

Chhe6%0< 

Ccuxd Eucpe S 96 — . ■ 

OedUrnriarlPifiB 

Denarii 5% 98 

East Japan Rativta 6% 04 _ 

BSC 6% 96 

BBC 8% 96 

® 7% 98 

SB 9% 97 

Sac it France 9 08 _____ 

&xrims9%96 

Ex-tn Bank Japan 8 02 — 

BpcrtDav Corp 9% 98 

fedetalWMcrt7A004_ 

FMand6%07 

Refer Bpat 9% 95 

Fad Motor QwS 6% 99 

Gar SacCtopfe99%96 

GMAC6%96 

ltd Sr Japan Rn 7% 97 

kte Anar Dev 7% 96 

fefe6%23 

Jfeer Dor Bi 8% 01 

KanaaiBecPar W96 — 

Korea Bk Poaer 6% 03 

LTC8FnB87 

MteusMaSx;7% (C 

Norafe7%97 

Owbo7%ca 

OstarXbntafea«8>z<n 

PebO-Carada 7% 98 

Rrnugat5% 03 

Qctec 9% 98 

O*t)ecPta»09B 

3aratuyS*96 

SAS 10 99 

WCFtfzSB 

Spte6%&B 

Stria Bl NSW 8>{ 98 

Swdto^BS 

Saedrii Spot B% 96 

TtfiyoBacRnte$%03 

TdqnUrirepelt6%S6 

Toycta MotEr S% 66 

Uotad tOngdcDi 7% 02 

Hfcrid Bank B% 99 

NMdfitok6%97 


. 1000 92 

.WOO 101% 

- 400 106% 

_ WO 102% 
. 1000 B5% 

- 150 KB% 
, 1600 10% 

WOO 103% 
>500 90% 

1000 89% 
-WO W2% 
-30Q 108% 

. WOO 95% 
-600 92 

- 193 103% 

- TOO 102% 


_ 200 W5% 
-100 101 
-500 102% 
-WO 107% 
. 1500 S6% 

- 3000 90% 

- 200 103% 
-1500 87% 
-300 HM% 
-200 103% 
-200 H > 1 % 

- 200 tQ2% 

.3600 82% 

- 500 Wt% 

- 360 KB 

. 1350 87% 

- 200 101 % 

.WOO 97% 
.1000 101% 
.3000 99 

-200 105% 
-200 101 
. WOO 87% 
-150 107% 

-an w*% 

- 150 104% 
-200 106% 
- 150 kb 
. 1506 97% 

-200 W3% 
.2500 09% 
-700 102% 

. 1000 90% 

.200 103% 
.1500 96% 
.3000 96% 
.1500 KB 
.1500 105% 


DEUTSCHE MARK 5HWGH1S 

Au»QB%24 2000 83 

Cto*FMder7% 03 2000 88 

Dermic 6% 98 2000 96% 

DaptaFfrran6% 03 1500 92% 

O0USteBkfii7%Q3 3000 99% 

66C 6% 00 2900 87% 

0B8%OQ — 1500 96% 

ftfexf 7% 00 3000 100% 

ttfe7%99 5000 101% 

UQBxtaHMw88%09 2250 69% 

Notey6%9B 1500 90% 

&feto6%« WOO 90% 

Span 7% 03 4000 98% 

9«wden897 2500 103% 


92% +% 
102 % 

105% 4% 
KB 
95% 

KB% 

11 % 

KM J a 


103 

109% 4% 

97% 

92% 4% 
103% 

103% 

102 % 

107% +% 

W6% 1% 
ro4% 


105 

103% -% 
102% ♦% 
102% 4% 

82% 4% 

105 4% 

105% 

87% -% 
W2% 4% 

88 % ♦% 

101 % 

96% 4% 

105% 4% 

»1% 

87% 4% 

108% 4% 
105% 

KM% 

107% 4% 

106% 4% 

97% 4% 

103% 4% 

99% 

WQ% 

00% 4% 

103% 4% 
96% 

96% 

106% 4% 
105% 4% 


83% -% 
96% -% 
99% 

92% -% 

100% 4% 

87% -% 
96% J. 
W1% -% 

101% -% 
88% -% 
96% 

96% 

09% -% 

104% 4% 


LMlBdMngdom7%B7 

7.79 Vfcfe9raganlriFtt703 

7.12 Mfarid Barit 0 IS 

722 World Bar* 5% 03 

870 Watt Bank 0% DO 

774 

877 8MSS FRANC SIRNGHIS 

851 Altai Dbt Bar* 6 ID 

834 Austria 4% 00 

830 CQuid&spe4%» 

845 Dar»naril4% 96 . — 

857 EB 6% 04 

7.13 tec do Ranee TV OH 

877 Finland 7% 99 

794 Hganta Motor Fa S% 97 — 

689 fcdand7%00 

BAB Kobe 6% 01 

641 CWato6%03 

673 QjsbecHydro60B 

7JJ4 SNCF7 04 

637 MfeiU&nk503 — 


ion 

98% 

96% 

-% 

757 

Mance Leks 11% 97 E WO 

W0% 

107% 

4% 

537 

son 

20% 

29% 


7.75 

BrWUfedB%23E 

— 150 

88% 

80 

*% 

1024 

3000 

88% 

»% 

-% 

745 

Derma* 6% BB £ 

_ BOO 

94% 

84% 

4% 

555 

1250 

1DB% 

110 

•% 

6X3 

B8TOH7E 

-637 

104 

104% 


507 






Ifetar10%97 C 

_ WO 

104% 

105 

4% 

521 






Hacon 10%87C 

-500 

104% 

104% 

4% 

575 

.100 

1C0% 

101% 


595 

HSBC Hdtegs life OBE 

_ 153 

110% 

1W% 

4% 

574 

woo 

98% 

96% 

*% 

5.19 

ta^r 10% 14 E 

- 400 

UB% 

109 

4% 

950 

.250 

08% 

100% 

♦% 

482 

-bftai DwBk 7 DO E 

-200 

92% 

92% 

4% 

582 

1000 

85% 

95% 

1% 

522 

Lend Sacs 9% 07C 

-200 

98% 

99% 


8X4 

.300 

1QB 

106% 

4% 

594 

Dntatoll% 01 E 

- 100 

W8% 

W9 

4% 

926 

.1® 

108 

109 

A 

824 

Foreign 8% 03 C - 

-250 

97% 

97% 

♦% 

93* 

.300 

106% 

107 


5X0 

Sevan Trent 11% 99 £ 150 

WB% 

109% 

4% 

9X5 

. 100 

106% 

107 

♦% 

817 

Tokyo BM Rarer 11 01 E 

- 150 

WB% 

108% 

4% 

516 

.1® 

10B 

WB% 

4% 

598 

AtteyNrtorriOfeNZS 

_ 100 





.240 

ItH 

104% 


566 

TT*I7 Hr. 01,10 117* 

_ 75 





..400 

101% 

101% 

♦% 

6X7 

Credt Local 6 01 FFr 

.7000 


90% 

-% 

7X9 

. 1® 

85% 

87 

-1 

tkfiS 

tec da Franca 8% 22 FFr 

3000 

101 

101% 

-% 

555 

.450 

10B 

10B% 


532 

SNCF9% 97FR 

4000 

104% 

104% 

-% 

726 

.150 

96% 

97 


550 








4% 

755. 

Watt Bar* 7 01 - 

600 

we 

1CB% 

4% 

550 

4% 

7X9 

7X1 

590 

YEN STRAIGHTS 
Befean599 

75000 

102 

1CC% 

4% 

A56 


822 

SB 6% 00 

100000 

708% 

109% 

4% 

453 

4% 

720 

FHand 8% 96 

sung 

105% 

105% 


324 


850 RCWTWG RATE NOTES 


548 

ttar Area Der 7% OD 

30000 

112% 

112% 

4% 

4X7 

588 

My 3% 01 

300000 

91% 

91% 

4% 

5.12 

7.15 

Japan ter Bk 5 98 WOOOO 

W2% 

102% 

4% 

AM 

547 

Japan Dev Bk 6% 01 120000 

110 

110% 

4% 

479 

572 

ifepai Tri Td 5% 96 

ramn 

104% 

105% 

4% 

339 

7A3 

Norway 5% 97 

150000 

104 

104% 

4% 

383 

682 

SNCF6%C0 

— 30000 

110 

110% 

4% 

464 

558 

fete 5% 02 

125000 

105% 

106% 

4% 

488 


788 Sa*dB)4%98 — 
7.7B WsUBrtE%02. 


.150000 101% 
.250000 103 


103% 4% 


7X5 

OTHER STRAIGHTS 






7X9 

QenSnenceLiaS^SSlfr — 

1000 

106% 

107% 


7A9 

asB 

KB DM krtrti* 6% 03 Lft _ 

3000 

102 

103 


516 

7X0 

Matt Bar* 6 SB LFr 

1000 

100% 

101% 


7X2 

7^7 

ABNArenAUfi 

1000 

97 

37% 


7X8 

7X2 

Bar* Ned Gerneertan 7 03 FI _ 

1500 

96% 

95% 

-% 

7ifl 

5BB 

AfcBrtBRcrince 10% 96 CS 

.500 

103% 

104 


7X1 

509 

BelCaMta10%9BCS 

. 150 

105% 

W5% 


922 

7X7 

BfehCoknrisIDfeCS 

.SOD 

KB 

1001% 

4% 

MR 

7.16 

BB 10% 9BCS 

. 130 

106% 

106% 

4% 

515 

561 

BM de Flaw 9% 99 CS 

.275 

103% 

104% 

4% 

579 

512 

Gen BtoC**« 1080 CS 

.300 

102% 

503% 


&15 

539 

WWktFtaWOlCS 

. 400 

103% 

104% 


ais 

7X9 

Mbjoi TalTd 10% 99 CS 

.200 

105% 

106 

4% 

559 

flffl 

Ontario 8 03 CS — — 

1500 

0C% 

82% 

-% 

953 


AfabayNtaTraaMy-^99 — 

Banco Roma 0S9 

BaiBkm A 97 CM 

BTCE -082 96 

Marts 0.10 96 E 

Csnada-%09 

CCCED D6Ecu — 

QaaLyomte 00 

DanrBk-%96 — 

OrePw Arena i 98 DM 

ForetUSWai097 

Finland 097 

Mand0 96 

tey%99 

U(B Badan-Wuari Rn -% 9B _ 

Uoytts Bank (tap S 610 

Wvib^OS 

New Zealand -% SB 

ttteb099 

teteOSB 

Strife Genate Q96 

etatebare Serin -00596 DU . 

StfeSkW3atatUE» 

SwdanOBB 

Sweden -% 01 

UriBdftigdom-% 86 

CQNVER1BLE BONK 


tsaaad BM Oft* Cxpc 

_ WOO 9027 SMB 45000 

— an 9996 10002 47812 

— 500 10812 10822 5-1250 

— 350 9973 9984 47300 

— 150 9992 10802 14125 

— 2000 99.16 9825 46250 

— 200 raw 9815 5S229 

— 300 9734 9837 53125 

-WOO 9BS 9984 10635 

_ WOO 9999 10007 80936 

_ 420 9999 10817 49125 

- 1000 9095 10804 83750 

— 300 5981 9875 48900 

-2000 10811 10818 80000 

- 1000 9942 9982 4J5S2S 

— 600 8175 B495 5A125 

BSC 0943 t»m twn 

— WOO 9955 9863 4B125 

-2000 9937 5944 49375 

— 500 9937 9956 51250 

— 300 9855 BUB 4J&12 

— GOOD rant raaa tam 

-125 B9J99 99.79 81125 

- 1500 «9? W80D 46250 

-2000 9886 9885 awn 

— 4000 8970 0981 45000 


868 OrSato Hirtu 1(5% 99 Cl 500 W6% 107% 

747 Oder Kascriw* 1D% 9B CS _ 150 105% 106 ■*% 

7JJ7 CUtsePrur 10*2 00 CS 200 104% 105% 1% 

855 Bds^m 9% 06 Ecu 1250 1CE% 102% 

Couid Bmpa S 01 Bat 11CD 102% 102% -% 

Qafi L^nrris 9 9S Ecu 125 101% M?% 

802 BB1097Eai 1125 104% 105 

757 Fane del Set 10% 90 Ecu SOD 105 106% -% 

89 car 10% 00 Ecu _ 1®% 1Q& % 

756 Span 9 96 ECU HDD 10B% 102% 

755 Untad Kingdom 9% 01 Ecu — 278) 103% W3% 

6l 06 ADC 10 09 AS 100 Htfs 106% -% 

752 BPAtnma12%96A5 100 106% 105% -% 

758 Com Bk Aretoria 13% 99 *1 _ WO 116% 117 -% 

6S1 SB 7% SB AS 350 97% 57% -% 

777 NSWT«BwyZao020AS — 1000 B% 8% -% 

850 R* I Bank 7% 03 AS 125 89% 86% -% 

7.66 SlfeBkKGWDiEAS 300 96 96% -% 

755 SfcAatGovtRngiEAS ISO 95% 05% -% 

864 UrisvcrAtefea 12 96 AS — 150 106% W6% -% 


Bid OStr Ptsnv 


Etartno-Ftirt* 6% 05 . 
ChPbCBfridSBe — 
GottKa&sofe7%00. 
Haoon0% X C 


.400 52% 96% 97% 

.250 W 102 109 

-55 UES4 110% 112 

.500 25875 109% 110% 


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22 



FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


COMPANY NEWS: UK AND IRELAND 


Cost cutting and restructuring behind 29% advance despite sales fall 


Trimmer Rolls-Royce at £40m 


By Paul Batts, 

Aerospace Correspondent 


Rolls-Royce, the aero engine 
and Industrial power group, 
yesterday reported a 29 per 
cent rise in pre-tax profits for 
the first half of 1994 despite a 
14 per cent decline in sales. 

The higher profits of £40m 
(£31m) reflected the company's 
cost cutting and restructuring 
drive, which offset continuing 
difficulty in the aerospace and 
industrial power markets. 
Sales fell from £1.75bn to 
£l-5bn. 

Sir Ralph Robins, nhptrman, 
said he did not expect any 
improvement in market condi- 
tions until 1996. 

The company's restructuring 
programme, however. Involv- 
ing the closure of six plants 
and the shedding of 6£00 jobs 
by next spring was running 
ahead of plan, placing the 
group “in a good competitive 
position to take advantage of 
the orders which are expected 
over the longer term”. 

“Conditions remain 
extremely ehanpng in g in all 
our markets, but our greater 


productivity coupled with the 
completion of the mfQor part of 
our Trent civil engine develop- 
ment programme will enable 
us steadily to Improve perfor- 
mance,” Sir Ralph «id- Treat 
engines will power the new 
Boeing and Airbus wide body 
airliners. 

Sales in the group's aero- 
space activities fell from 
£L08bn to £924m with profits 
before interest of £3m (£5m). 
However, the company expec- 
ted civil engine deliveries for 
the year to be similar to the 
1993 level. As expected, mili- 
tary engine deliveries were 
lower. 

Sales in the industrial power 
operations fell to £576m 
(£674m), while profits before 
interest rose to £37m (£3Sm). 

The company's cost cutting 
drive has led to an improve- 
ment In operating margins to 
9.9 per cent (8J per cent). 

The current order book 
totalled £5-9bn, excluding a fur- 
ther flhn of announced orders 
not yet subject to formal con- 
tracts, the company said. 

The haiawftA sheet remains 
strang with net cash of £309m 


at tbe «»nd of June. Excluding 
last year’s rights issue, net 

qpfl Ti hiw improved by MMm 
over the last 12 months. 

The interim dividend is held 
at 2p, payable from earnings 
per share ahead to 233p (2-2lp 
restated). 



Body Shop 
expose 
fails to 
shock 


Vickers ahead but shares 
fall on recovery warning 


By Andrew Botoer 


By Andrew Jack wxl 
Net Buckley 


Although Rolls-Royce shares 
closed 8p down yesterday at 
lSOp, the interim figures were 
in line with most City esti- 
mates. The company is still 
having to ride the bottom of 
the aerospace cycle which Is 
unlikely to turn before 1996. 
However, extensive restructur- 
ing and productivity improve- 
ments should put it In. a stron g 
position to take advantage 
when the upturn eventually 
occurs - after a re cession in 
the industry which started in 
1990. The company has also 
continued to Invest in expand- 
ing its aero-engine product 
range, which has placed It in a 
much stronger competitive 
position against its US rivals 
Hum in ftariiiw industry cycles. 
But there are unlikely to be 
any short-term miracles and 


Sir Ralph Robins: d m Urni g in g 
market conditions remain 


the company Is likely to face 
another 12 to 18 mouths of 
hard slog before it finally sees 

Sfliiw tinp iti vpi iwnt Hi 

its Tnflfrn markets. A full-year 
forecast of £Z00m pre-tax, 
against £76m last year, leaves 
the shares on a forward multi- 
ple of nearly 29 even after an 
18p fall in two days. 


SE considers short selling regulation 


By Staton Dsvtoa 


The Stock Exchange Is to consult stock 
market participants on the potential regu- 
lation of short-selling, in the wake of com- 
plaints over the impact of speculative 
short sellers on recent share offers. 

The Exchange said it would issue a con- 
sultative document during September to 
tap views “on proposals for dealing with 
concerns" over short selling: 

Short sellers drive down the share price 
of companies which are arranging sub- 


stantial share i ss u es by anning shares 
they do not own. Speculators can then 
balance their “short” positions by buying 
cheaper shares through the secondary 
market issue. 

SG Warburg, brokers to the Treasury far 
last year's BT3 share issue, tried to per- 
suade the Stock Exchange to implement 
roles to prevent substantial investors from 
driving down the British Telecom share 
price prior to the offer. The request was 
turned down under pressure from a num- 
ber of large institutions. 


However; Mr Andrew Large, chairman 
of the Securities ■ and Investments Board, 
gave a speech last July urging the 
Exchange to Introduce rules governing 
short selling prior to secondary market 

imnuxi 

The Exchange cited “concerns expressed 
at the time of the British Telecom 
Wellcome share Issues”, both more than 14 
months ago, as (he driving force behind its 
latest decision. 

A response to the consultation process Is 
likely by the end of this year. 


The long-awaited article that 
has helped trigger co n tro v er s y 
over the image of Body Shop 
International, the cosmetics 
and toiletries group, was pub- 
lished yesterday to the 
bemusement of investors and 
ethical researchers. 

“Shattered Image”, an 
article in US-based Business 
Ethics magazine written by Mr 
j Jon Bntine, highlighted a 
i series of alleged inconsisten- 
cies between Body Shop’s mar- 
keting of its espoused ideals 
and its practices. 

Some commentators 
expressed doubts about the 
potency of Its revelations, 
while Body Shop flatly 
rejected its c ont ents. 

Mr BwHup said there haJ 
been a “wide gap” between 
promises and delivery to Body 
Shop's franchisees. He accused 
the company of having used 
off-the-shelf product formulae 
filled with non-renewable pet- 
rochemicals. 

He suggested there had been 
quality control problems, that 
only a tiny amount of its 

tn ^r p d Ian Is name through its 

“trade not aid" programme 
and that its charitable contri- 
butions fell short of company 
statements. 

He reported claims that 
Body Shop invented stories 
about the exotic origins of 
some of Ms prodncts. He said it 
had a history of legal threats 
against journalists seeking to 
publish details behind the 


Shares in Vickers fell 7p to 
188p yesterday after the engi- 
neering' group, which makes 
tanks and Rolls-Royce cars, 
said it was seeing only a 
patchy recovery. 

Pre-tax profits nearly dou- 
bled, from taam to £15Bm, but 
were still slightly below mar- 
ket expectations. Sales were 
flat at £330m (2331m). 

Sip Biftia i H Lloyd, riurirman 
said the recovery in results 
which started last year had 
ram tinned, but thte was more 
to do with plant rationalisation 
and efficiency measures than 
improvements in markets. 

Sales of Rolls-Royce cars rose 
shghtly, from 688 to to 701, and 
hi gher sales in the UK and east 
Asia (excluding Japan) offset 
poor sates in North America. 

Sir Colin Chandler, chief 
executive, said he hoped by the 
end of the year to reveal the 
outcome of taUm Hw group h«g 
been having with other manu- 
facturers over collaboration on 
new model programmes. 

Vickers will not say who it 
has been talking to, but is 


known to have been discussing 

the purchase of V12 engines 
amt other components firom 
Mercedes-Benz of Germany. 

Cosworth,-. the high-perfor- 
mance engine subsidiary, is 
still suffering from declining 
demand for special' Ford 
Escorts and Scorpios, but is 
investing in a new factory for 
its business and an 

emission centre. 

The group’s defence systems 
b usine ss now has a total order 
book of £L5bn, following the 
government’s recent confirma- 
tion of the foQow-on order for 
259 Challenger 2 tanks, in addi- 
tion to the 127 tanks ordered in 
1991. Sir Colin said the 
strength of this order book 
made the defence badness a 
much stronger and more 
attractive partner when consid- 
ering collaborative projects. 

The medical division’s con- 
tribution fell, partly because of 
continued uncertainty over the 
propos ed Clinton healthcare 
reforms and fang fi trading con- 
ditions for distributors in con- 
tinental Europe. . 

The propulsion technology 
division continued to suffer' 


from the depressed state of the 
aerospace business, but on the 
marine side the Swedish-based 
KaMeWa company had an 
"outstanding” six months. 

Raming s per share improved 
to 3.6p (l-9p)‘ 

The interim dividend rose to 
L75p (1.25p). 


Restructuring behind rise to 
I£5m at Waterford Wedgwood 


By John Mc Ma n us In DubBn 


Michael Page ahead I Motor side helps Barr 


sharply to £4.35m & WAT advance 40% 


By Peter Rearm 


Shares in Michael Page Group 
rose 24%p to 114p as the Inter 
national recruitment and exec- 
utive selection consultant 
announced pre-tax profits more 
than doubted from £1.57m to 
&L3Sm for the first half of 1994. 

Mr Terry Benson, chief exec- 
utive, said “favourable t rading 
conditions had helped all the 
UK businesses exceed expecta- 
tions". This was in contrast to 
the “mixed progress" on the 
Continent 

Group turnover expanded 
from £2&4m to £3A2m. The pre- 
vious year's figure, however, 
included £1.16m from LBW 
France, which has since been 
sold. Operating profits were 
£4. 19m, against £1.49 - includ- 
ing losses of £109,000 from 
LBW France. 

Within the UK. turnover was 
divided as to 70 per cent per 
manent recruitment and 30 per 
cent temporary. Revenue in 
the permanent side rose more 
than 51 per cent and the tem- 
porary side “higher than that”. 

Michael Page Marketing and 


Sales expanded further and, as 
a result Sales Recruitment 
Specialists was set up to pro- 
vide sales representatives at 
the lower end of the pay spec- 
trum. Mr Benson said the 
accountancy ride expected to 
open two more offices by 
December, bringing the total to 
10 . 

In mainland Europe, profits 
at the French operations 
enjoyed a substantial increase, 
“being well past the worst” as 
the economy recovers. Mr Ben- 
son was more cautious about 
Germany and the Netherlands, 
where trading conditions con- 
tinued to be difficult The out- 
look, however, seemed 
brighter, and another German 
office is to be opened in Frank- 
furt 

The group is also planning to 
open an office in Hong Kcmg. 
In spite of the start-up costs, 
Mr Benson Is expecting 
long-term rewards from the 
Asian market 

The interim dividend is 
raised to 0.8p (0.6p), payable 
from earnings shindy up at 
4.45p (l.65p) per share. 


By Peter Pearse 


Pre-tax profits at Barr & 
Wallace Arnold Trust, the 
motor distribution and leisure 
and holiday group, advanced 
40 per cent from £663.000 to 
£928,000 In the half-year to 
June. 

The rise was achieved in 
spite erf greater losses in lei- 
sure end holidays end on the 
back of a 39 per cent increase 
at the operating level in the 
motor distribution side. Here 
profits emerged at £1.98m 
(£L42m) on divisional turnover 
up at £82J2m (£8R2m). 

Mr John Parker, chief execu- 
tive since May whim Mr Mal- 
colm Barr, chairman, c e d ed 
half the dual role, said new car 
sales, were ahead of the 
market 

The group took steps to 
develop its used cars sales 
operations, which, including 

the gnnconi f iflTrtL ffTumHwg and 

MOT sides, outperformed the 
new car ride. 

As part of plans for “con- 
trolled expansion", the group 
bought in August a Mercedes 
dealership in Bristol for 


£3.6fkn, bringing the total to 
eight dealerships. 

Mr Parker said he was 
brought in to “look at chang- 
ing the culture of the com- 
pany”, though he stressed that 
Mr Barr was the only family 
member on the board and that 
the family was bring proactive 
in the process. The group has 
2.45m ordinary shares and 
almost 10m A non-voting. 

The leisure and holidays side 
incurred losses of £820,000 
(£5384)00) on turnov e r of £31m 
(£30-2m). 

Group turnover rose 15 per 
cent to £12fen (£108m). Earn- 
ings were 4.8p (33p) and the 
interim dividend Is held at 3p. 


Compass 


Mr Francis Mackay, chief 
executive of Compass, yester- 
day added the title of deputy 
fha liman of the acquisitive 
contract catering group. In 
March. Compass appointed Mr 
John Thomson as its nonexec- 
utive d hafrm*n following the 
retir e m e n t of Mr Ingram Len- 
ton on grounds of Di-health. 


Body Shop yesterday called 
the article “recycled rubbish” 
and hinted at possible legal 
action by saying it was review- 
ing its position and would 
defend its reputation. “It is a 

mish-mash of itefamatnr y and 

actionable falsehoods. It con- 
tains distortions, shoddy 
reporting and views of several 
unqualified or biased sources 
or so-called experts.” 

Business Ethics decided not 
to publish or circulate Its edi- 
tion in the UK following, 
threatened legal action by 
Body Slop, but a number of 
analysts Imre obtained details. 

Ur Peter Webster, executive 
secretary of the Ethical Invest- 
ment Research Service, said: 
“It doesn’t seem to add up to 
Its claims. It doesn’t sound 
like the end of an institution." 

He said it did not contain 
many trf the positive aspects of 
the compan y’ s activities, but 
said his organisation was plan- 
ning to complete a fell repeat 
by next week on Body Shop. 

Mr Rod Whitehead, analyst 
at Goldman SarfiR, said: “I frit 
that if [the article] came up 
with some fairly serious alle- 
gations, and these were given 
a fair amount of publicity in 
the popular press, that could 
affect sales quite badly. But 
my impression is that they 
have not come up with suffi- 
ciently new and serious allega- 
tions.” 


Waterford Wedgwood, the 
crystal and tableware group, 
yesterday announced’ figures 
described by Mr Tony O’Reilly, 
chairman, as its “best first-half 
results since 1987”. 

Mr O'Reilly said the increase 
in pre-tax profits, from 
12400,000 to l£5.1m (£5.04m), 
“folly justifies the actions, ini- 
tiatives and strategies imple- 
mented in the past two years". 

Sales rose J£13Jm to IBLdBm, 
while profits before interest 
more than doubted to I£7Jm 
(I£3.6m). Lower interest 
charges of I£2Bm (IKL2m) and 
a higher tax char ge of K800.000 
(H300.000) left retained profits 
of I£4-3m. The group takm 
a charge of I£L8m for restruct- 
uring in both the crystal «nH 
china divisions. 

Wedgwood sates were up 8 


per cent to I£LMm, addle oper- 
ating profits more than dou- 
bled to I£4.5m - the first 
increase in profits at Wedg- 
wood in three years. Wedg- 
wood’s earthenware pottery 
subsidiary, Johnson Brothers, 
continued to perform bad- 
ly .with sates reduced by stiff 
competition. 

The improved operating prof- 
its at Wedgwood reflected last 
year's restructuring and 
improved sales far the US and 
UK. Sales in Japan remained 
steady following price reduc- 
tions, the company said. 

Sates of crystal rose 16 per 
cent to I£44Jlm and operating 
profits more than doubled to 
I£3.4m due to strong sales in. 
the US and Ireland. However, 
sales growth of Waterford’s 
mid-market Marquis range 
tapered off after two years of 
strong growth. 


Earnings per share 

amounted to 0-6p (0.02p). 


Mr O’Reilly hinted strongly at 
a resumed dividend payment 
at Waterford Wedgwood's 
annual meeting earlier thin 
year. On the basis of these 
interims, a nominal butwel- 
come dividend of about 0.5p 
looks on the cards. The reduc- 
tion in debt to £58m puts gear- 
ing at 48 per cent The com- 
pany Is not foHy out of tire 
woods, however, as shown by 
the £L8m restructuring charge, 
and analysts are expected to 
leave their forecasts 
unchanged at this stage. Most 
are opting for full-year pretax 
prefits of between I£22m and 
I£23m, equivalent to earnh^js 
of just under 3p - a prospec- 
tive p/e of 23-5, reflecting 
recovery prospects. 


staMs buys United Carriers falls 
" n to £1.2m at midway 


Stakis, the hotels and casinos 
group, has bought the only 
casino on the Isle of Man fra: 
£59xn. 

The Palace H otel and Casino, 
which will be renamed the 
Stakis Hotel and Casino, 
includes a 135-bedroom hotel, a 
bingo hall and a nightclub. Of 
the cost of the purchase, 
£3J.6m will.be used to repay 
the acquisition’s borrowings. 

Stakis. which has been 
granted a 10-year gaming 
licence from the Mmi govern- 
ment, plans to spend. Elm on 
refurbishment. 


By Carofine Southey 


I appeals as a maUcr of mconl only 


August 1994 


=2= leisure 


£20m Expansion Capital Package 


WATES LEISURE LIMITED 


Negotiated, Led and Arranged by 

Phoenix Fund Managers Limited 


Institutional Equity Underwritten by 

The Phoenix Development Capital Fond 


Senior Debt Provided by 

Bank of Scotland 


Legal Advisers 

Herbert Smith (Phoenix Fund Managers limited) 
Lovell White Durant (Bank of Scotland) 

Norton Rose(the company and its existing shareholders) 


Reporting Accountants 

Coopers & Lybrand 


Financial Advisers to the Company 

Cazenove & Co. 


Auditors to the Company 
Slater, Chapman & Cooke 


Phoenix Fund Managers Limited 
A member of 1MRO 


Rathbone improves 22% 


Rathbone, the quoted private 
h anking and asset manage- 
ment group, increased pretax 
profits 22 per cent to £3.07m, 
against £SL53m, for the first six 
months of the year. 

Turnover rose from £&27m 
to £9.1910, while Barnfags per 
share gained 17 per cent to 
l(L5Sp (&38p). 

The Interim dividend is 
raised to 3p (2p). 


The company, which has 
maite two acquisitions of fund 
management groups in the 
period, said it would continue 
to look out for further opportu- 
nities. 

Mr Midiitfi Bryant, market- 
ing director, said; “With over 
£lbn under manageme nt , we 
are looking to attract other 
funds, increasingly from over- 
seas." 


Rank Leisure gets 
the Zoo & the Cage 

Allied Leisure, the ni ghtrfnb 
and tenpin bowling group, has 
sold two nightclubs. The Zoo & 
the Cage in Bournemouth and 
The Venue in Poole and the 
Colonnades bar in Poole to 
Rank Leisure for a total of 
£4J5m 

The premises contributed 
profits trf £690/100 before inter- 
est and tax fM- the II - months 
ended June 19. 


Poor trading conditions pushed 
down interim pretax profits at 
United Carriers, the parcel and 
freight company which was 
floated in February. 

Ia the half year to July '2 
pre-tax profits fell from £Lfim 
to £L2m on turnover up from 
£52.7m to £59m. 

Operating profits, which 
included a £364,000 loss an dis- 
continued operations last time, 
were down from £l-98m to 
£L63m- 

Eamings per share fell from 
53p to 3p, adjusted to reflect 
the scrip issue in February. 

Mr Allan Bfnks, chairman, 
said that as foreshadowed in 
the profits warning in May, the 
company's UK parcels and 
freight network suffered a 
sharp drop in volumes. 

The division had secured 
new customers, he raid, but 
any benefits from the addi- 
tional business would not be 
frit until nrect year. 


Although volumes had 
unproved in May, Mr Sinks 
said there was “no reason to 
change earlier expectations ' 
that volumes would remain 
fiat daring the second half of 
the year”. . • 

Operating prefiis to' the spe- 
cialist transport and distribu- 
tion division were also lower, 
although there were signs of a 
steady improvement in the UK 
and Continental car market*. 

Margins In this ■ division 
would be improved in the sec- 
ond half by tiv * acquisition of 
100 large trailers which would 
reduce spot hiring, Mr Bisks 
said. 

The company has net assets 
assets of £29 Jm (£24. 7m) and 
gearing of 17 per cent 
United Carriers shares dosed 
unchanged at 103p yesterday. 

On the day of the profits 
warning in May , the shares fell 
by 33p to LL5p. The flotation 
price was 153p, which produced 
a market capitalisation of 
£5l_8m. 


DIVIDENDS ANNOUNCED 


US giant takes small house 


By Pater Peara e 


American giant gobbles up 
English miniature arid , con- 
trary to mythic expectation, 
everyone says they are all 
going to live happily together 
ever after. 

This was the tale bring told 
yesterday as Stanhome, a US 
marketer and distributor of 
consumer products, giftware 
and collectibles, added another 
collectible line to its collect- 
ion. 

It made a recommended 
offer of lflOp a share far lira. 
put the Cambria-based lwflfcw 
of hand-painted miniature 
china cottages, casting a ray trf 
sunshine on to a niche in the 
small housing market 

The bid values Lilliput, 
which floated less than a year 
ago in October, at £37-2m. At 
tire flotation price of I35p it 
was valued at £3L4m. 

Yesterday morning the 
shares opened at 92p. 

As a result Mr John Russell, 
Lilliput chairman and. chief 
executive, said that he would 
have done tire deal no differ- 
ently in an ideal world. 

He frit he had fulfilled his 
obligations to shareholders 
and, because Ulliput will stand 
alone within Stanhome, to the 


futu re of the company and its 
staff. 

Mr Russell, who had 600,000 
shares, is set to make Elm 
gross, white Mr DG Tate, the 
group’s founder who had some 
3.8m shares, will gain about 
Efim. Both men made substan- 
tial amounts at the time of tha 
float. 

At the time of the morning's 
h nmwmwmMit, stanhome had 
received acceptances in respect 
of 103m shares, or 44.4 per 
cent, from directors, their 
wives, North of England Ven- 
tures and Lazard Ventures. 

By 430pm Stanhome spoke 
for 57.9 per cent, having 
bought a further 13.5 per cent 
at I58p. 

Stanhome has three divi- 
sions; LQUput Will fell w ithin 
Enesco Worldwide Giftware, 
which In 1993 contributed 49 
per cent (rf the $751m (£485m) 
group sales. Enesco designs 
and markets giftware, licensed 
lines and collectibles and sells 
them through some 50,000 
retail outlets mostly in the 
US. 

Mr Bill Seawright, Stanhome 
chief executive, raid most of Us 
collectibles, in particular its 
Precious Moments line, were 
made in China. Lflliput’s prod- 
ucts are made in the UK, an 


Brfttefr-Bomeo fart 

CanW» bit 

Engdafi A O’nas—Jnt 
independent Nmvs—Jnt 
Ladbroka int 


Shaw pefc»{pend»}. 

aril " V 



tinx Print Tech fin 

Page (Mtehaaq Int 

Quarto § fan 

Rathbone Biros .... int 

Reckttt & Cobnsn fait 

Bofls-Boarce int 

SSvennlnes tnt 

7*N — fall 

United Carriers fait 

Vfctara Int 

WflSanw Hktgs Int 


8t>0 ? 1f1 . P* 1 shar * net except where otherwise stated. tOn 

taraaBad capital. -Equivalent after allowing for scrip Issue. §USM stock. 
*Msh panea. ftfinal of not less than 335p Endcatad. 


— OMTHLY AVBtAQES OF STOCK INDICES 


- #■ ; 


FT-SE Actuaries Indfces 

100 Index 

MM 250 

050 Share 

Nan-Financial 

financial Group 

AH-Sham 


3178.5 
37363 

1604.5 

1726.77 

2197.58 

1591.47 


Important factor fix- the east 
Asian market. 

Than would be synergies in 
US distribution - cottages are 
"hot” in the US, according to 
Mr Seawright - and Stanhome 
wanted a “neat, tidy” company 
as a foothold in Europe, a mar- 
ket it wanted to «pniiri into. 

He .said that collecti ble s was 
a g r o w in g market, especially in 
the US and particularly for 
women. 


Euretradc 100 
Brotrack 200 
FT-A World Index 


1379.19 

143090 

178.75 


FT faxSces 

Government Securities 
fixed Merest 
OnSaaty 
Gold Afinas . . 

SEAQ BargaJns(5.00pm) 


91.86 

110.02 

24859 

1963.17 

29,402 


•wr 

303&6 

J B0® 

2960A 

Mat 

308S2 

3537.1 

.350&8 

3705.7 

1529£ 

1505.0 

1586A 

164228 

161&42 

169044 

212EL92 

2111.15 

2164.18 

1517.70 

1497-44 

..155827 

1347^2 

1383.71 

1447.64 

1385.41 

1380.09 

146203 

18354 

17349 

172j44 

92.87 

02JX 

M28 

11034 

10928 

11222 

237U7 

23434 

24550 

193155 

1S44JS7 

188135 

23^77 

23,618 

25,495 


Highest CloaeAug 


Lowest CtoseAug 


FT-SE 100 
FT-SE Wd 250 
FT-SE 350 
ET-A AQ Stan 
OnSnary. 


3265.1 (26tW 
38158 (31*) 

1645.1 (26th) 
163033 j26th) 
255SL0 (2«h> 


3097.4 ilsO 

3841.4 (IsQ 
1563.6 (1*9 
1551.22 Cist] 
2405.9 flat) 


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The trading statement was 
deliberately downbeat, to lower 
expectations about the speed of 
likely recovery. But Vickers 
still looks in a strong position, 
following last year’s £60m 
rights issue and the recent 
award of the crucial Chal- 
lenger order. Capital invest- 
ment is being increased - par- 
ticularly at Cosworfh - and 
there is some scope for margin 

improvement at the tank facto- 
ries. On a prospective multiple 
of 19, the shares cannot be 
called cheap, but a modest 
upturn in demand for cars will 
sharply improve the bottom 
line. The shares are unlikely to 
move decisively until the 
group reveals its decision over 
coRaboration ran the next gen- 
eration of luxury cars. 


— j . . 


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Current 

Date of 
paonnont 

Cones - 
ponding 
dividend 

Tata 

for 

year 

Total 

last 

fe. i 

3 

Oct 28 

3 

_ 

11 


2.667 

Oct 27 

2687 

_ 

7.1. 

2.15 

Nov 16 

1.9 

- 

5 

0^ 

Oct 27 

- 

_ 

05 

34 

Oct 8 

267“ 

- 

733* 


24 

Dec 1 

4J}2 

. 

6 

^ Iff 

1-65 

Oct 14 

_ 

_ 

06 

075 . 

Nov 29 

1.73 

1 

208 

08 

2 

NOV 11 
Nov 21 

0.6 

2 

- 

21 

6 


3 

Oct 10 

2 

. 

73 

095 

Jan 6 

645 

- 

1736 


2 

Jan 9 

2 


5 

0.25$ 

Oct 6 

nfl 

- 

03 

7^ 

NOV 4 

1086 

-* 

1085 

1.6 

Oct 21 

_ 




1.75 

Oct 19 

1.25 

_ 

3 


0257 

Oct 10 

5 

- 

1275 


^ ■> t:. 




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financiajl times 


FRIDAY SEPTEMBER 2 1994 


COMPANY NEWS; UK AND IRELAND 


'■'''■'NOl, 


tl rise to 3 
^ t'(l«w 0c 


rricrs fait 
it midwai 


Williams shares aided 
by upbeat statement 


By Peggy HoJBnger 
Williams Holdings’ shares 

yesterday recovered from their 

recent weakness and jumped 3 
per cent to 384p as the fire pro- 
tection. security and building 
products group offered the 
market an upbeat assessment 
cm trading. 

Hr Nigel Rudd, pfr airman 
said Europe was showing bet- 
ter- than-expected growth, 
while "economic indicators for 
the second half in the UK and 
North America continue to be 
favourable”. 

However, he warned that the 
pace and duration of any eco- 
nomic recovery remained 
uncertain. 

The market welcomed Hr 
Rudd’9 statements as encour- 
aging, but still more cautious 
than those being made by 
other industrial conglomerates. 
‘They are at pains to make 
sure people do not get carried 
away," said one analyst 
Hr Rudd’s comments wmw 
as the group announced a 13 
per cent increase in pre-tax 
profits to £86 .2m for the six 
months to June 30. The out- 
come, after reorganisation 
costs of £4m, were largely in 
line with expectations. Sales 
were 10 per cent ahead to 

£848 .7m. 

Mr Sudd emphasised the 
group’s organic growth, prog- 
ress cm margins, and improv- 
ing cashflow. Profits from con- 
tinuing businesses rose by IS 
per cent to £98. 7m, on sales 18 
per cent ahead to £63 Sul 

Production 
rise helps 
Brit-Borneo 

By Robert CorztM 

A 31 per cent rise In 
production helped British-Bor- 
neo, the oil and gas explora- 
tion company, offset lower oil 
prices and boost net profits for 
the six monthii to the of 
June to EASfim, a 49 per cent 
Increase on the previous 
£2. 94m. 

Earnings per share were 
9.7p, also up 49 per cent 
The value of oil and gas 
sales rose 34 per cent to 
£17.Sm (£13. lm), although file 
average oQ price for file period 
fell from £12J0 to £9.84 a bar- 
rel. 

The company was helped by 
its strong position in natural 
gas, especially in the US, 
where prices firmed during the 
first half. Gas accounts for 80 
per cent of Brtttsh-Borneo's 
production revenues, 

Mr Alan Gaynor, chief exec- 
utive, said the company was 
encouraged by its acquisition 
earlier this year of a 50 per 
cent stake in an onshore field 
in Cuba, its first big interna- 
tional diversification away 
from UK and US markets. 

An unchanged interim divi- 
dend of 2L667p is declared. 


Hartons 
cuts losses 
to £0.33m 

Hartons Group, the distributor 
of semi-finished plastics, 
reduced pre-tax losses from 
£L88m to £325,000 for the six 
months to June 30, 

Turnover dropped 22 per 
cent from £33. lm to £25. 7m, 
largely because of the disposal 
of a French subsidiary in 
March. Turnover for continu- 
ing operations rose slightly 
from £23 .5m to £24m. 

Losses per share worked 
through at 0.7p (H8p) and no 
dividend is declared. 

Sifrermines 

Following the acquisition in 
March or Molynx. the closed- 
circuit television company, Sil- 
vermines, the Dublin-based 
electrical services and property 
group, trebled pre-tax profits 
from IS251.000 to U761.Q00 
(£750,000) in the six months to 

June 30. _ . 

' Turnover jumped from 
ft 12,3m to I£20Jm. Earnings 
emerged at lJQp lOBp> and a 
Q35p dividend is declared. 

Linx 

A “significant improvement" 
in the second half enabled Ianx 
Printing Technologies to report 
a pre-tax profit of £332,000 for 
the year to June 30. 

1 SmKhKlIna Boecnam PLC 
Floating Rato Unsecured 
Loan Stock 
1990/2010 

Merest Asm 53125% pw*wn 

Interest Penod i Se^an*er 199410 
1 Decanter 1994 

Midland Sank pic 
Agent Bank 


Cashflow - for which Wil- 
liams has often been criticised 

- was held at gfrnflar levels to 
last year, before div idends , dis- 
posals and acquisitions. Given 
the 40 per cent increase in cap- 
ital expenditure and hi gher 
tax, the underlying cashflow 
position was better. Mr Rnrffl 
said, and was expected to 
improve far ther in the 

half. 

Williams has bought three 
businesses since the year-end 
for £iiQm . Provisions for 
restructuring the largest acqui- 
sition, Solvay, would enm p to 
just over £5m, leaving Williams 
with total charges this year 
estimated at more than g»m , 

Mr Rudd said the group 
hoped to use the proceeds of 
the £267m rights issue in May 
to complete further purchases 

- particularly in fire protection 
and building products - before 
the end of the year. 

Profits at the security divi- 
sion advanced 31 per cent to 
£lfL5m, thanira to the Corbin 
Russwin acquisition. 

Fire protection increased 
profits by 21 per cent to 
£25.7m. North American build- 
ing products returned a 17 per 
emit profits advance to £19.6m, 
while the European business 
increased profits by 10 per cent 
to £349m. 

The interim dividend is 
increased to 5.25p <5p), payable 
from basic earnings par share 
up 8 per cent to 9p. 

Excluding exceptionals, earn- 
ings rose by 12 per cent to 
9.6p. 



Nigel Rudd; pace of economic 
recovery remains uncertain 

• COMMENT 

The shares jumped today, less 
on the back of Mr Rudd's 
guarded optimism than on the 
relief that Williams appears to 

he hrihMwg its ntarglm in q pftn 

of higher raw material prices. 
There is also the feeling that 
Wffliami may have finally laid 
to rest cash flow doubts. Fore- 
casts are for £200m in profits 
thia year, with the shares on a 
prospective p/e of about 18. 
Although Williams offers solid 
long-term potential, the shares 
appear to be fairly priced right 
now. 


Hartstone directors 
lift collective stake 


By Peggy Hoflinger 

Four Hartstone directors have 
inc reased their collective stake 
in the hosiery and leather- 
goods group by more than 
seven times following the £3Qm 
rescue rights issue. 

The company announced 
yesterday that the four direc- 
tors, InrimHng Jfr Shaun DOW- 

Wn g , p frairman ha d increased 

their holding from 71,138 to 
595,000 Shares. 

The directors both took up 
their entitlements through the 
2-for-l rights at 15p and bought 
shares in the market at I5p 
and I4%p. 

The largest shareholder on 
the board is Mr Dowling, who 
now holds 500,000 shares, com- 
pared with 50,000 before the 
cash caD. He took up 100,000 
new shares in the rights, and 
purchased a further 350,000 at 
15p in his role as sub-under- 
writer. 

The other directors who 
increased their stakes are Mr 
John Hunter, chief executive, 
with 40,000 shares (10,000). Mr 
Stephen Oakley, finance direc- 
tor. with 30,000 (6,000) and Mr 
John Padovan with 25,000 
(5,133). 

At Hartstone’s annual 


meeting yesterday, Mr Dowling 
warned that the US leather- 
goods business was suffering 
from lower demand and the 
planned cutbacks under the 
restructuring. 

Sales were at lower levels 
than last year, he grid - Harts- 
tone was confident trading 
would pick up in the second 
half, however. 

The Spanish hosiery busi- 
ness, which may be sold at 
same stage in the future, was 
performing satisfactorily, he 
added. 


Independent 
Newspapers 
advances 
to I£15.2m 

By John McManus fn DubOn 

Independent Newspapers, the 
Irish newspaper group con- 
trolled by Mr Tony O'Reilly, 
reported a rise in pre-tax prof- 
its from I£14.6m to I£15.2m 
(£14. lru) far the half year to 
June SO. 

The increase reflected better 
margins in Irish publishing 
operations, improved trading 
conditions overseas and first- 
time rniii r flinU fflif ftuni flCQQi- 
sttions in the UK and South 
Africa. 

Independent’s Irish 
operations accounted for 

IZ&L5m (l£63.3m) of turnover 
of I£9&6m (KSl-Sm), and am- 
trlbated IflO.Sm (I£9.4xn) to 
operating profits of I£15.8m 
(I£11.7m). Margins were 
enhanced by rationalisation 
and increased advertising rev- 
enue, according to Mr Hm" 
Healy, chief executive. 

Independent has a 293 per 
cent stake in Newspaper Pub- 
lishing, owner of the UK titles. 
The Independent and The 
Independent on Sunday. 
Bought far I£23Jm last Febru- 
ary, the stake is treated as an 
investment and was the main 
cause of a rise in net interest 
costs from I£75l,000 to 
I£978,DOO. 

Earnings per share were 
9-28p (11.93p) and the Interim 
dividend goes np from an . 
adjusted 2.67p to 3p. 

• COMMENT 

The strong performance of 
Independent’s cm Irish pub- 
lishing ope ra tion makes it a 
good play on the recovery 
prospects of the Irish econ- 
omy. With im prov in g advertto- 
ing revenues feeding through, 
full-year profit forecasts of 
about I£32m seem a little on 
the low side. Recent drcnla- 
tion figures show that Inde- 
pendent’s titles dominate file 
Irish dally, evening and Sun- 
day markets. In the second 
half the group will make 
almost half its operating prof- 
its outside Ireland, mar king 
its transition into an interna- 
tional media group. The pro- 
spective p/e is nearly 16 based 
on yesterday’s closing price of 
305p. With the growth pros- 
pects, especially in Sonth 
Africa, the shares still look 
reasonable value. 


Engineering group confirms interest in German vehicle parts maker 

Strong demand lifts T&N to £61m 


Airsprung £9m expansion 


Shares of Airsprung Furniture 
jumped 18p to 255p after the 
Wiltshire-based group accom- 
panied a sizeable acquisition 
with a cautiously optimistic 
statement cm current trading. 

Airsprung Is paying up to 
£9m cash for Intasco and Men- 
saco, both suppliers of compo- 
nents and finished products to 
finniture markets. Initial con- 
sideration is £7.l6m with the 
balance on a performance-re- 
lated basis. The eventual total 
will be met from existing 
resources and facilities. 


NEWS DIGEST 


The outcome amounted to 
less than a quarter of the 
£1.43m achieved last time, but 
reflected “an encouraging sec- 
ond six months of trading" fol- 
lowing the deficit of £391,000 
incurred In the first half, direc- 
tors said. 

Turnover of the group, 
which manufactures continu- 
ous ink-jet printers, fell 9 per 
cent to £10.9m (£11 5m). 

Earnings emerged at i.7p 
(7.1p) and a recommended final 
dividend of 0.75p (L73p) makes 
a total of lp (2.08p) for the 
year. 

Ennex International 

Ennex International, the Dub- 
lin-based mineral exploration 
company which is quoted on 
the USM, announced a profit of 
$85,000 (£55,000) in the first half 
of 1994 against a loss of $82,000. 

Exploration expenditure 
amounted to $374,000, of which 
$230,000 was contributed by 
joint venture partners. Work- 
ing capital at June 30 was 
ja am, including cash of $8.8m. 
Earnings were 10 cents (losses 
W cents) per share. 

English & Overseas 

ignpiish & Overseas Properties 
is to pay its first interim divi- 
dend since 1991, after lifting 
pre-tax profits from £l2fi00 to 
£353,000 for the six months to 
the end of June. 

The company, which saw 
turnover rise from £Unn to 


areas; increased rental income, 
both from properties developed 
by the group and from proper- 
ties bought last year, mid the 
sale of an investment property 
fn Gateshead. 

Investment properties are 
now valued at £2&&n in the 
balance sheet, compared with 
£1.43m at end-June 1993. 

Earnings per share worked 
through at 0.55p (0.05p); the 
interim dividend is 02p. 

United Industries 

United industries, the preci- 
sion tools and springs maker, 
has sold its Scandura Railko 
offshoot - just five months 
after its acquisition as part of a 
package from BBA Group. 

The lossmaking business, 
which matw v>bbi shields 
gasket materials, is being sold 
to Hofland (UK), a subsidiary 
of DNI Holding of the Nether- 
lands, for £605,000. United will 
retain debtors and creditors, 
estimated to be worth £200,000. 

CRP Leisure 

CRP Leisure plans to raise 
E90QJMO through a placing and 
open offer to repay debt and 
fond acquisitions. 

The USU-quoted company, 
whose only active subsidiary 
inairgq theatre scenery, is issu- 
ing 20m shares at 5p with a 
5-fbr-4 clawback. The shares 
yesterday closed down lp at 6p. 

Shareholders, including the 
14£ per cent holding of RA Col- 
man (North Wales), intend to 


ha the year to Jnne 30, 
Intasco reported pretax profits 
of £567.000 on sales of £3 .66m; 
Mensaco made £703,000 pre-tax 
on turnover of £A92m. Trading 
between the two companies, 
which were under common 
ownership, amounted to 
£L31m. 

Alrspnmg’s trading since its 
March year-end had remained 
difficult, Mr John Pierce, chief 
executive, said, but the first 
quarter had shown a “satisfac- 
tory" increase In sales and 
profits. 


total of 5B4m shares. A farther 
43Sm. shares have been condi- 
tionally placed with Colman, 
which could leave it with a 
holding of 25.7 per cent 

Tate & Lyle 

Tate & Lyle has acquired PL 
Transtore from Acatos & 
Hutcheson for £l-9m cash. 

PL, which provides specialist 
storage and transport services 
to Acatos and third parties, 
will form part of Tate’s United 
Molasses division. 

Allen 

Shares In Allen, the Greater 
Manchester-based construction 
group, rose Up to 176p yester- 
day following its announce- 
ment of a good start to the 
year. 

Over the summer it had 
obtained contracts valued at 
£21 -3m. turnover at its Speedy 
Hire Centres was 40 per cent 
above the same period last 
year and housing reservations 
were up I3^j per cent 

Fyffes 

Fyffes, the Irish fresh fruit 
importing and distribution 
group, has acquired a 33 per 
cent stake in Sofiprim, a 
French fresh produce com- 
pany. 

The group is understood to 
have paid between I£Sm and 
asm (£5£4m) for the stake, its 
fifth purchase in mainland 
Europe in a 12 month I£45m 


By Tim Burt 

T&N, the engineering and 
motor components group, yes- 
terday confirmed it was consid- 
ering a bid for Kolbenschmidt, 
the German vehicle parts man- 
ufacturer. Mr Colin Hope, 

eh airman and etiiaf executive, 

said T&N had held talks with 
Metangesellscbaft, which holds 
47 per emit of Kolbenschmidt. 
but failed to agree a price. 

Announcing a sharp increase 
in first-half profits, Mr Hope 
vn> Jed that a deal could be 
hampered by possible cartel 
problems in Germany, where 
the enlarged group would con- 
trol up to 40 per cen+ of the 
piston products market 
Buoyant demand helped lift 
pre-tax p rofit s from £39.4m to 


Kim, on turnover ahead 27 per 
cent at £985m (£774 m) in the 
six months to June 30. 

Although operating profits 
rose to £76.3m (£54. 2m), the 
improvement was dented by 
increased asbestos-related 
costs of £13 5m (£9£m) as the 
group topped up it6 liability 
provisions against future legal 
costs and compensation claims. 

Asbestos pay-outs and. the 
second instalment an its £100m 
acquisition of Goetze, the Ger- 
man piston ring producer, con- 
tributed to negative operating 
cash flow of £6.9m, compared 
with a £33.3m surplus. 

hi a bid to strengthen its bal- 
ance sheet and reduce borrow- 
ings, the gro up announced an 
enhanced scrip alternative to 
its interim dividend of 7.5p 


(10.85p). If all shareholders 
opted fin 1 the scrip - involving 
now ordinary shares to a value 
of lL25p for each share held - 
T&N would retain cash of 
£46m: a saving of £37m on the 
dividend pay-out and £9m of 
advance corporation tax. It 
also promised a final cash divi- 
dend of not less than S.35p if 
the scrip is taken up. 

Mr Hope said savings from 
the scrip would help reduce 
the group’s ACT problem, 
caused by having to use unre- 
lieved UK profits to cover 
asbestos liabilities in the US. 

Earnings per share, mean- 
while, rose from 7.7p to 4£p. 

• COMMENT 

T&N has successfully exploited 
the upturn in vehicle ripmwTiti 


and achieved double-digit 
profit margins two years ear- 
lier than most analysts expec- 
ted. But it has an A chilles ’ heel 
- cashflow. The burden of 
asbestos compensation and ris- 
ing capital expenditure threat- 
ens to overshadow the group’s 
performance in outstripping 
profits forecasts by 20 per cent 
The enhanced scrip - designed 
to save cash - looks attractive 
at first glance but risks dilut- 
ing future earnings per share, 
as does the prospect of funding 
further acquisitions through 
paper. Although full-year 
pre-tax profits are expected 
to reach £ll6m, the shares 
look somewhat full on a 
forward multiple of 17.1, 
despite the strong growth 
potential. 


Compensation provision ‘clear in 10 years’ 


A sharp increase in asbestos-linked 
personal injury claims has forced T&N to 
make record compensation payments in 
the first half of this year, writes Tim 
Burt 

The company, which as Turner & New- 
all was formerly Britain’s largest supplier 
of asbestos, paid claimants a total of 
tM.iw in the six months to Jane 80, com- 
pared with Just £3m last time. 


Mr Colin Hope, chairman and chief 
executive, said the sevenfold increase 
reflected the group’s determination to set- 
tle as many outstanding cases as possible 
before a new compensation framework 
came into force in North America. Under 
the framework, claimants should avoid 
lengthy legal action by receiving fixed 
compensation payments for various forms 
of asbestos-linked fflneML 


The first-half compensation payments 
were paid from balance sheet provisions, 
which fen from £38. 4m at the year mod to 
£34. 9m at the half-way stage. 

Mr Hope predicted those provisions 
would decline gradually and could be 
wiped ont altogether within 10 years. 
“The beneficial effect on gearing will be 
significant and it will help our future 
results enormously,” he said. 


Cattle’s restricted by 
£1.76m closure costs 


Quarto static despite 
lacklustre book market 


By Christopher Prtoo 

A good performance from its 
consumer credit business 
helped Cattle's (Holdings) lift 
interim pre-tax profits, before 
exceptional items, by 22 per 
cent to £&45m. against £6£m. 

However, after taking a 
21,76m charge against the clo- 
sure of its lossmaking Swinton 
insurance franchise operation, 
the outcome showed a slight 
decline to £6.69m. 

Consumer credit turnover 
rose 11 per cent and contrib- 
uted £86. lm (srn&n) to a total 
of 2104.2m (£9B.7m), an 
increase of 6 per cent 

Mr Edward Cran, managing 
director, «ald that the contin- 


ued fa frhft ghopft- 

check home collected credit 
business reflected a slow 

return Of emTflrtnnnp among the 

group’s 260,000 households. 
Cattle’s has an estimated 20 
per cent of the weekly col- 
lected credit market 

Mr Cran that the clo- 

sure of Its Swinton operations 
was likely to be followed by 
the rundown of its other non- 
care activities, such as a small 
travel agency business. “We 
have positioned ourselves 
firmly in financial services imH 
plan to conthma this process," 
be said. 

Earnings per share slid to 
3.7p (48p). An interim dividend 
of 2.15p (L9p) is declared. 


By Caroline Southey 

Quarto Group, the USM-traded 
publishing and printing ser- 
vices company, saw sales 
advance 17 per cent at the 
interim stage despite a weak 
UK book market 

Pre-tax profits in the 
six months to June 80 rose 
from £1.63m to £1.67m on 
turnover ahead to £22.7m 
(£19£m). 

Operating profits improved 
to £L91m (£L8Gm). 

Mr Laurence Orbach, chair- 
man, said Bales had been 
affected by a shortfall in the 
UK publishing business but, 
based on current order books, 
he expected an improvement in 


core publishing activities in 
tile second half. 

The effect of destocking by 
leading UK book retailers "bad 
been profound” in the first six 
months but he believed this 
was temporary. 

Turnover in the US, which 
accounts for 53 per cent of 
total sales, had been strong, 
boosted by a first time contri- 
bution from Front Line Art 
Publishing, a California-based 
publisher of art prints and 
posters, acquired in May. 

Earnings per share fell from 
6.4p to 4 Bp, reflecting extra 
shares in issue following the 
£9 An rights issue in Septem- 
ber. An unchanged interim div- 
idend of 2p is declared. 


Rolls-Royce 
Half Year Results 1994 

• Profit before tax £40ra (1993: £31m). 

• Operating margins improved from 8.9% to 9.9%. 

• Maintained interim dividend of 2.00p. 

• Net cash £309m. 

• Order book £5.9bn. 


Half year to 
30 June 1994 
Unaudited 
£m 


Turnover 1,500 

Profit before taxation 40 

Taxation (including overseas tax and ACT) (9) 
Attributable to minority interests 
Profit attributable to shareholders 31 

Dividends (25) 

Transferred to reserves 6 

Earnings per ordinary share * 253 p 


Half year to Year to 

30 June 1993 31 December 1993 

U n a u dited Audited 

£m £m 


1,752 

31 

( 10 ) 


3,518 

76 

(18) 

5 

63 

(56.) 

7 

5.95p 


Net cash balances/(borrowings) 309 (132) 473 

Cash (outflowyinflow (164) (216) 389* 

Equity shareholders’ funds 1,229 906 1,225 

^includes £307m rights issue proceeds 

‘The profit increase has been delivered in the face of lower soles in both our aerospace and industrial 
power operations, and reflects our restructuring programme, which is proceeding ahead of plan. 
“Conditions remain extremely challenging in all our markets, but our greater productivity coupled 
with the completion of the major part of the Trent engine development programme mil enable us 
steadily to improve our performance. 

“Although market conditions are unlikely to improve before 1996, we are in a good position to 
exploit the long term growth potential of both aerospace and industrial power from an increasingly 

competitive cost base.” . 

Sir Ralph Robins, Chairman 


profits r»n p from, two main take up their entitlements to a spending spree. 


\\ 

NEWS IN BRIEF |j 


1 


MANGANESE BRONZE 
Holdings Is selling LTI Homer, 
its foe! tanks offshoot to W3- 
mld for an undisclosed sum, 
resulting in an exceptional loss 
which will be provided for in 
the accounts for the year to 
end-JuIy 199 4. 

REGAL HOTEL Group has 
acquired a 50 per cent interest 


in the Etrop Grange Country 
House Hotel, Greater Manches- 
ter, for about £lm cash. 

RIVER A MERCANTILE Trust 
has sold 493 per cent of River 
& Mercantile investment Man- 
agement to Beckwith Asset 
Management for £4^m cash. 
SCI is ariHng Cambridge Indus- 
tries, a supplier of consumer 


satellite equipment, to its man- 
agement in a deal valued at up 
to £17m. 

TEMPLETON EMERGING 
Markets Investment Trust will 
convert its C shares into ordi- 
nary shares and new warrants 
on September 9. The record 
date for conversion will be Sep- 
tember A 


Rolls-Royce pic, 65 Buckingham Gate, London SW1E 6AT. 


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24 



FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


RECRUITMENT 


S ooner or later a woman Is 
going to become the chair- 
man of an FT-SE 100 com- 
pany. It may have escaped the 
notice of some men out there but 
the race is on. The question many 
businesswomen are asking is who is 
going to be first 

Suppose it is wi thin the next 10 
years; in fact let's be more adven- 
turous and look at the possibility 
before the turn of the century. 'Who 
might it be? Where will the candi- 
dates come from? 

GDI Garrick, a partner at Goddard 
Kay Rogers & Associates, the execu- 
tive search firm, sides with those 
who expect a woman to break 
through before the Millennium. 

She said; “I think it could well 
happen within the next five years 
but I don’t think it would necessar- 
ily cause a surge. I think we shall 
have one and then a shocked 
silence as people assimilate it 
before we gradually get a few 
more." 

The latest edition of Crawford's 
Dictionary of City Connections 
noted that the number of women 
chief executives of listed UK compa- 
nies had fallen from 12 In 1993 to 
nine this year. The only women 
chairmen of sizeable companies 
were Aleksandrs Clayton of Alexan- 
ders Holdings, the car dealer, and 
Anna Vinton, joint chairman of tha 
Reject Shop. 

The big league of the FT-SE 100, 
however, still awaits its first 




JOBS: The City is still waiting for the first female to chair a top 100 company 

Women set for power in the big league 


woman chair. Here is a very subjec- 
tive form guide gleaned from a 
trawl of colleagues, headhunters 
and a few industrialists. Could it be 
any of the fallowing 11? They are 
listed in no particular order of pref- 
erence. 

• Rosalind Gilmore, chairman of 
the Building Societies Commission. 
At 56. with a civil service back- 
ground, part of which was spent at 
the Treasury, she certainly has 
gra vitas, and the robust way she 
handled the Cheltenham and 
Gloucester's proposal to sell out to 
Lloyds Bank proves she aim has the 
metal to take on a top job when she 
leaves near the end of the year. 

At present she is the prospective 
chairman of the Arrow FM consor- 
tium bidding far the Tmido n FM 
radio franchise but she is also well 
placed to take on a bigger chair- 
manship if one becomes available. 

• Kathleen O'Donovan, at the BTR 
industrial conglomerate, must be a 
strong contender. She the first 
woman finance director in an FT-SE 
100 company at the age of 34, and 
that move. In 1991, won her. the 
European Women of Achievement 
Award sponsored by the European 


Union of Women. She recently took 
up a non-executive directorship at 

Ardagh, a Dublin-based glass 

maker. 

• Rosemary Thorne, finance direc- 

tor of J Sahsbury. Apart from coir 
lecting more than 20 OJevels she 
has the sort of industrial street cred 
still valued by male-dominated, 
boardrooms. Her business teeth 
were cot as a management accoun- 
tant with BOC. the gases 

company, before moving into retak- 
ing. 

Her experience, particularly with 
Habitat-Mo thercare and Harrods, 
gives her a strong platform for a big 
retailing cfra irnnwiaTrip if and when 
it comes along. 

• Baroness Detta O’Cathain, the 

former manag in g director of the 
MTTk Mar ketin g Board current 

managing director of the Barbican 
Centre, stfll has a series of non-ex- 
ecutive directorships. A few years 
ago she would probably have been 
the favourite because she occupied 
a very narrow field. This tended to 
leave her somewhat overexposed at 
a tima when the Tiamfla of n mmm 
executives were difficult to recall 

• Marjorie Scardino, chief execu- 


tive of The Economist Group and 
non-executive director of W H 
Smith, is a US-lawyer turned media 
executive. Her success In increasing 
the newspaper’s sales in the US 
made her an automatic (dunce for 
The Economist job. 

• Bridget Mapwawn former mar- 
keting manager at Unigate, now 
president and chid! operating officer 
of Oppenhehner Management (the 
seventb-largest marketer of mutual 
funds in the US, controlling $20bn) 
and a non-executive director of 
HQlsdown Holdings. 

• June de Moller. When she took 
over as managing director of Carl- 
ton fl flftnmmriwrH n im just more flam 

a year ago she became the first 
woman to the chief executive's job 
at an FT-SE 100 company. In an 
lifting ' industry hag to be 
well placed to take on a chair 
although she wDl probably have to 
wait a while if die is hoping to 
succeed Michael Green as chair- 
man. Her non-executive director- 
ships luniniiB Anglian Water ■ 
Riverside Matiwii ttpoWi Trust. 

• Pippa Wicks is far too young to 
be considered in the short term but 
hTip haa great poten tial wicks is thft 


31-year-old finance director of 
Courtaulds Textiles- She is among 
those MBA-quaMed finance direc- 
tors who are prized as much for 
their general boardroom skills as 
they are for their ability to run the - 
finance function. Recruited by Mar- 
tin Taylor, the then chief executive, 
before he moved to Barclays Bank, 
she is likely to emerge as a strong 
contender in a few years' time. 

9 itpImi Schneider T^>nnp on +b** 
main board of Deutsche Bank and a 
non-executive director of ICL 
Schneider Lenne Is one of the new 
breed of Eurodirectors bouncing 
into the large British boardrooms. 

• Rachael Lomax, 48, head of the 
economic secretariat in the Cabinet 
Office, was formerly head of finan- 
cial trwcHtirttunw and markets in the 
Treasury and a one-time principal 
private secretary to Nigel Lawson, 
the former chancellor. For some 
time she has been regarded as one 
of the Treasury high-flyers and 
ranks among those civil service 
women who have been able to 
thrive, partly because of its greater 
concern in recent years to provide 
equality of opportunity. 

• Wench e Marshall Foster: chair- 


man fthirf executive of Perrier 
(UK). If you can. sell bubbly water 
in green bottles to the conservative 
British anything is possible. 

Other women in high earning 
City jobs such as Carol Galley, 
director in charge of pension funds 
at Mercury Asset Management, and 
scum of the leading headhunters, 
tend to rule themselves out because 
of their «igtfag work. Because of 
the conflict of interest. Galley is not 
going to take on a non-executive 
role so she is probably among the 
nonstarters. 

A best of the rest list might 

ftirinih* pfl Wl , chairman of 

the Equal Opportunities Commis- 
sion, Frances Efeaton, a director of 
lAZBld merchant h»wlr and 

former director general of the take- 
over p*n«i , and Megan Richardson, 
director of planning at Barclays. , 

Elizabeth Symons, general secre- 
tary of the Association of First Divi- 
sion Civil Serv ants , is daily han- 
dling some of the most powerful 
mandarins in the country. Yve 
Newbold, company secretary at 
Hanson, should probably be among 
the dozen top contenders. The only 
reason jsnt is that company 


secretaries rarely make the top Job. 
It Is no coincidence that many of 
those I have listed above are 
finance directors or have back- 
grounds in finance. 

MSry Baker, president of Women 
in Management (a professional 
management association for women 
in the UK), who could easily claim a 
place on the list herself with non- 
executive directorships at four 
quoted companies, believes that the 
Cadbury recommendations for tire 
chairman and chief executive func- 
tion to be split Ins increased Rest 
bility for a potential female appoint- 
ment, possibly from outside a 
particular company. “Women are 
very good' at being number one 
which is why so many leave the 
corporate structure and set up their 
own business,” she said. 

Who could we list as non-starters? 
Lady Thatcher comes to mind. It 
would be rather akin to the Rolling 
Stones playing at the London Palad- 
ium- They could do it with erne but 
the orchestra would walk out 

The 11 suggestions are only for 
that coveted large company chair- 
man's role. Some would be too 
young if you believe that a woman 
is going to get there in the short 
term. But they have been, a long 
time waiting and may have to watt 
some more. If I were a betting type I 
might have a flutter bn GQmbre: 

Richard Donkin 


DEPARTMENT OF ECONOMIC DEVELOPMENT 
TRAINING AND EMPLOYMENT AGENCY 


DEPUTY CHIEF EXECUTIVE 
AND CHIEF EXECUTIVE DESIGNATE 


Applications are invited tor the post of Deputy 
Chief Executive in the Training and 
Employment Agency. It is intended that the 
appointee, subject to satisfactory 
performance, win become Chief Executive of 
the Agency, when the present postholder 
retires in September 1995. 

The Agency is part of the Department of 
Economic Development. It operates with 
delegated responsibility and authority. The 
Agency operates a wide range of services 
including a variety of training services, 
employment and career services and 
services to the disabled. 

The appointment is offered on the basis of a 
3 year contract with die possibility of renewal. 
The Department would also be prepared to 
appoint on the basis of an inward 
secondment on terms agreed with the parent 
organisation. 

On appointment to Deputy Chief Executive 
the salary will tie related to the Northern 
Ireland Dvfl Sendee Grade 4 range which 
currently is £44,390 to £50,412. The Chief 
Executive's salary is the Northern Ireland 
Civil Service Grade 3 range which currently is 
£52.704 10 £62,817. 


The successful applicant will be qualified to 
the third level and have extensive senior 
management experience in the private or 
public sectors. A sound knowledge of labour 
market matters, with particular reference to 
the operation of employment and training 
sendees, is essential. 

A jab information sheet is available on 
request from Mr W P Hagan, Department of 
Economic Development, Massey Avenue, 
Belfast BT4 2JP, Telephone 0232 529339. 
The dosing date for applications will be 
23 September 1994. 

The Northern Ireland CivA Service is 
committed to equally of opportunity hi 
. employment and welcomes applications from 
all suitably qualified applicants, irrespective of 
religion, gender or disability. As Roman 
Catholics and women are currently under- 
represented amongst the senior general 
service grades, applications from the Roman 
Cathofic section of the community and from 
women wotid be particularly welcome. All 
applications will be considered strictly on the 
basis of merit 


Managing Director 

Worldspan Group pic require a Managing 
Director for a newly formed Travel Club 
subisidiaiy. 

Remuneration package £65K plus profit 
share plus benefits. Must be a marketing 
negotiator and IT user-literate. 

Send CV initially to: 
Worldwide Executive Circle Ltd, 
Enterprise House, Ocean Village, 
Southampton SO!4 3XB 



FIXED INCOME 
FUND MANAGEMENT 

OurcMerArnanagesinextxssof$4 : biIKonmglabalb(mdmaikeisandhasa 
successfidgroiothrecord-Itisnowseekij^io appoint anaddstimudmember 
to its fixed-income team. 

Ihemajnreqxx isibflities wfllbeanaly si n gm ariqet^devdopiii gn riaikettactics 
and contributing to long term strategy. 

The suoaessfol candidate, probably aged under 30, musthaveaminimumaf 
three years’ direct ©q^erierce of global fixed nxxio^madcetsvdthapartic^ 
knowledge of (he UK gilt madoeL Eurosteding and associated markets- A 
waiting knowledge of other fixed income and currency markets would be 
desirable. He/ she must be capable ctfexeculir^business withlhxikErs. 

An excellent salary, phis bonus and benefits will be avaflabfe. 

For further information, please contact 
Martin Symon on 071-623-1266 


Jo n a th a n Wren 8c Co. Limited, F inancial Recruitment Consultants 

No. 1 New Street London EC2M «TPTefc 071-623 1266 Fax; 071-626 5259 


O N AT H A N YV REN E:\ECUTI V E 


Investment Sales Specialist 

Scotland, North of England 


Unit and Investment Trusts 


MARTIN-CURRIE 


Martin Currie is one of Scotland’s leading 
independent investment management 
companies. Formed in 1 SSI. it is wholly 
owned by its management and services a 
wide range of clients in the UK and 
overseas. It has established an excellent 
reputation for investment performance and 
is now looking to generate new business 
and sen-ice existing clients in the North of 
England and in Scotland. 

Your brief will be to promote the 
company’s award winning range of 
investment products. In particular you will 
develop close relationships with 
stockbrokers, IFA’s, solicitors and 
accountants. 

Aged 25-40, the personal qualities of 
dynamism, integrity, presence and 
initiative coupled with excellent 


communication and relationship 
management skills are essential. You 
may be looking for an opportunity to 
return to Scotland or the North. Distinct 
preference will be given to candidates 
with a professional qualification either 
legal or accountancy. Investment 
knowledge would tie advantageous. 

This is, without doubt, an exceptional 
opportunity for the right individual. 
Remuneration will include a highly 
competitive basic salary, bonus scheme 
and fringe benefits package. In the first 
instance, please send a full CV including 
salary details quoting reference 1038 to 
Fiona Law at FLA Ltd, 21 1 Piccadilly, 
London WIV9LD. Tel: 071-738 9732. 
Interviews will be held in the North, 
Scotland or London. 



AND CONSULTANCY 


MERCURY 

ASSET 

MANAGEMENT 


PRIVATE CLIENT FUND MANAGER 


We are one of Britain’s leading investment houses with £1 .8bn of UK private client funds under discretionary 
management. Owing to the continuing growth of our business, there is an opportunity for a motivated and 
professional fund manager to join oar UK private client team. 

THE ROLE: THE QUALIFICATIONS: 


o Manage and administer substantial 
portfolios on behalf of discretionary 
private clients 

o Be responsible for all aspects of day-to-day 
client relationships 

o Contribute to research on a UK sector 
o Present our services to potential clients 


THE QUALIFICATIONS: 

o Minimum of five years* private client fund 
management experience 

o A graduate aged between 27 and 40 
preferably with the DMR or equivalent 
qualification 

o Strong client handling and communication 
skills 


o A pragmatic and sensitive team player 

Please reply enclosing CV and handwritten letter to: 

BG Selection (Agy), 1 Founders Court, Lothbuxy, London EC2R 7HD. Telephone: 071-929 7770 


Chief Executive & Director of Finance 

PACKAGE NEGOTIABLE UP TO ^42,000 PER ANNUM — — : 


f~'dierweft Valley Housing Association is 
# sponsored by ChertveU District Council to 
receive a voluntary transfer of around 1,000 units 
in North Osfordshsre. The transfer is planned for 
February 1995, and is believed to be the first 
where individual tenants have the opportunity to 
transfer irrespective qf a majority LSVT vote. 

The District Council plans a trickle transfer qf all 
voids arising m the Assoc ia tion’s area, and is 
committed to enabling a substantial development 
programme. 

The Association, is making its senior 
mMiagwiuwt appointment, and 
seeks a highly experienced 
qualified accountant to act in this 
dual role. This is an outstanding 
ground .floor opportunity with the 
added attraction of living in 
Banbury or the nearby Cocswolds. 

To join us you will need to /"^l 

demonstrate:- 



• Experience of senior corporate management; 

• A proven track record of managing staff and 
financial systems; 

4 EyY-i»Tlf»nf communication skills; 

• Fu n di ng and treasury management ex pe r tis e , 

• Entrepreneurial vision; 

• A commitment to social hnnmng- 

We offer an attractive remuneration package 
i n clud ing a car. local gov e r nm ent pension and 
relocation a s sistance. 

For an application form and farther 
det a i l s, please telephone Banbury (0295) 
261177 (24-hour answering service). 

No CVs or AGENCIES. 

doting dace for completed applications 
is 14 September, 1994. 

_ II The Association -a an Equal Opportunities Employer 


11 — _ |1 «. jmwwuun a an equal vippoimmna employ 

( .np-r wp.ll Valley “4 welcomes spp&atiom from all seasons of the 
housing association J community. 


yARussel Institutional Sales Executive 

Prestigious International Investment Firm 

The Frank Russell Company Is one of the world’s most highly respected and influential Investment 
consultancy firms providing leading-edge investment expertise to a world-wide Institutional 
base. For over 25 years it has provided I n depende n t advice and a global perspective and todav 
advises clients on assets exceeding US$500blflkm. 

Frank Russell Company Ltd, a UK subsidiary, eight years with a merchant fan* or major 
providing strategic pension fond consultancy investment house. . 

and ft™ mgnaynwmt sentices, now requires 

an additional higb^aHbre Sales Executive to Great emphasis vwfll be placed on presentational 

join a growing sales team in London. skills, both written and oral, and a dear track 

You will promote a range of new multi-manager d evelo ping client business 

asset management proStets to UKpenStaT^ need to be demonstrated, 

foods, at a senior level, to develop and „ , 

introduce new business, j®® r ole otte rs significant scope for self- 

- development and the chance to participate in 

A graduate, aged 28-35, you have a minimum the future on an international leveL Ybawill 
of a 2.1 degree in finance, at least three years receive c omp e titiv e remuneration incorporating 

Institutional sales experience and have spent a commission and benefits package. 


to complete confidence, please write with CV to: 

Sfaomi Thomson, Sfesapson Crowdm Consultants Limited, 91/99 Puk Street, London W1Y 3HA. 

Simpson Crowden 


CONSULTANTS 








J 







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s 




1 




f^NANCIAl TIMES 


FRIDAY SEPTEMBER 2 1994 


25 


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STOY HAYWARD 

Aaowajna and Business Advisers 
AfnanberofHotwatfalnc amti o m l 


Corporate Finance Accountants 

London 

** COf P orn tc fesmee division of one of the UK's leading 
mm of accountants and bmizuss advise**, is bolting to recruit 


£ Excellent 


TKe division provides a foil range of advisory services to it* client 

^ nanasrf and bornesm ingcther wirfi 

me puWic sector. Key product area* are as follows: 

• Mainstream Ccaporarc Finance: investigations, Stock Exchange 
*onc Bod financial nmeturir^. 

• Venture Capital: management bur oun/ins and finance for 
growing burinenex. 

■ Mergers and Acquisitions: negotiating c ulm of businesses. 

• Loafing Services effective borrowing smiwgiea sad debt 
restructuring. 

• Financial Advisory: to jublic and private companies and public 
sector bodies. 

Before s pecialising at Manager level, the division’s 

professionals all wort on assignments in a variety of 

product areas. 


Corporate finance manager foe public sector wort 
Out client is seeking to recruit an experienced corporate finance 
manager fix its public sector practice. Successful ca ndidates will 
have broad experience of die public sector and will have advised on 
disposals. MBCband MHBOs. 

E xperien ce d corporate finance ACAs 

Our client also seeks to recruit experienced mt per arc finance ACAs 
ready to assune managerial reqxmsibtlicies. Candidates should have 
significant post qualification experience in the corporate finance 

department of a major finn of accountants, or comparable 

organisation. They will have a strong academic and p rofes sional 
track record as well as one to two years’ appr o p ria te experience. 

Krwiy/tecently qualified ACAs 

Successful candidate* will be enthusiastic, committed newly 
qualified ACAs with a strong academic and professoral tack 
record- Although an aptitude fix thinking commercially b ——"‘“I, 

previous corporate finance experience is not necessary. 

If you are interested in these positions or require any further 

assistance, please do not hesitate to contact Stuart Klein 
or Matthew Leedhata at Michael Page Finance, Page 
House. 39-41 Parker Street. London WC2B 5LH. 


SENIOR COMPANY SECRETARY 

Govett & Company Limited is searching for an experienced senior 
company secretary. Responsible for US$8.5 billion, the company is at the 
forefront of the global fund management industry. 

This position represents an exciting opportunity to join the Jersey 
arm of our worldwide business that also has offices in London, 
$an Francisco and Singapore. The post will involve the provision of 
company secretarial and compliance services to a wide range of client 
companies and investment vehicles operating in a range of different 
jurisdictions. Board responsibilities are also likely to be included. 

Suitable candidates may have a legal or accounting qualification, will 
be in mid career, and will already have experience of the investment 
management industry. 

In the first instance, applicants should send their derails to 
Peter Moffett at John Govett & Co. Limited. 


J 0 H N 
GOVETT 


Peter Afoffare, 

John Gown £e Co. limited 
ShadilctQA House. 

4 Battle Bridge Lane,' 
LONDON &E1 2HR- 


FINANCIAL OFFICER 


Michael Plage Finance 

Specialises in Financial Rccnttaacot 

London Bdrtol Windsor St Alban* Leatbcxhead Bkxm^fiam 
Nottingham M a nrhcite r Lecda Gfesgow & WoddwMe 


AMSTERDAM 


30-40 


£ 70,000 + Bonus + Bens 


ft Paribas 

CAPITAL MARKETS 

European Communications Executive 

Excellent Salary + Bonus 


Our client is the Holding Company of a divers Private Group of 
International business with several subsidiaries in Europe and 
North and South America. Due to recent growth and 
developments they are now looking to recruit a Financial 
Officer to oversee the Groups Financial activities. 

Reporting to the C-E-0-/owner you trill be responsible fort 

■ supervision and coordination of reporting on all investments 
and ventures inclusive real estate; 

■ evaluation personal investment portfolio management; 

• coordinates Legal, Tax. Audit Services; 

• liaising with C.lLO.VGF.O.'s of the Group Ventures; 

• coordination of 2 Business Controllers (Latin America, USA). 

The successful applicant will be a graduate qualified accountant 
with a minimum of 7-10 yean international cash management 


and financial reporting experience preferably in a priiaich 
owned business. 

Strong presentation, analytical and communication skills arc 
essential, in combination with leadership and entrepreneurial 
qualities for this high profile role. The applicant will have 
previous experience of working in continental Europe. He/' she 
must be prepared to travel on short notice. Knowledge of 
English is required and a second European language (Swedish or 
Spanish) would be an advantage. 

If you arc interested in this opportunity, please contact Elisabeth 
MJM. Huigcn or Ludo G.M.M. Houbcn on the number (0031) 
20-6444655, or alternatively send your curriculum rit.ie to the 
following address: Robert Walters Associates, 'Rivierstaete', 
Amsteltfijk 166, 1079 LH Amsterdam. The Netherlands. 


C London 

As a recognised leader in- the fixed income and equity 
markets, Paribas Capital Markets draws on the expertise 
of over 2200 people from over IS countries around the 
world based in London, Paris. New York, Tokyo, 
Frankfurt, Singapore and other offices. Paribas Capital 
Markets provides a comprehensive range of products and 
services in the primary and secondary bond and equity 
markets, currency and Interest rare swaps and options, 
fixed income derivative products and specialised 
instruments. 

In order to increase their market share and in response to 
competitor activity they are looking to recruit a European 
Communications Executive to build and develop 
relationships with new and existing clients. 

Working in a small team, your primary responsibility will 
be to promote and develop potential business for 
Paribas Capital Markets via roadshows in and 


around the UK and other European markets. You will be 
tasked with die identification of existing and potential 
investors, in order to compile and maintain an effective 
d at a b a s e , organise the venues, invitations, speeches and 
internal communications. Post event market research will 
then secure a solid platform for future events- 

You will possess a detailed knowledge of capital markets 
and have experience of promotional events in either the 
client or agency-side. In addition to French, you will speak 
at lease one ocher European language with an ability to 
travel freely and demonstrate leadership, commercial 
3cumen and initiative, persuasion and innovation together 
with the potential to succeed. 

Please write to James Isaacs or James Gray quoting 
reference number 198299 at Michael Page Sales and 
Market ing, Page House. 39-41 Parker Street, 
London WC2B5LH- 


ROBERT WALTERS ASSOCIATES 




Michael Page Sales & Marketing 

Spf ri alto lU cru ta nc n t OjbwIb m 
London Windsor Biruiliifh *™ St I«t6 


The Top 
Opportunities 
Section 
For senior 
management 
positions. For 
information call: 
Philip Wrigjey 
+44 71 873 3351 


CORPORATE FINANCE 

cj£33-50K + Benefits + Bonus 

Several opportunities have arisen within a UK Merchant Bank for outstanding young 
profess i o n als to specialise in corporate finance. Applications are invited from; 

(A) Recently qualified Accountants (1st time passes), or Solicitors with 


relevant financial 


experience; 


International Bond 
Economist 

Midland Global Markets’ highly successful bond research team is currently 
see king a first class economist to assist in expanding its international fixed 
income presence. 

A graduate economist, preferably with at least two years’ experience gained in a 
capital markets environment, you will possess good analytical skills and an ability 
to express yourself clearly, both orally and in writing. As part of a team, the 
work will predominantly involve the analysis and forecasting of trends across a 
range of European economies, but with a focus on bond markets. 

This high profile role offers clear opportunities for career development and an 
attractive remuneration package, including the full range of investment banking 
benefits. 

Please write, in confidence, with foil personal and career details, including 
current remuneration, to Roger Bootle, Chief Economist, Midland Global 
Markets, Thames Exchange, 10 Queen Street Place, London E.C4R 1BQ 


MIDLAND 

Mtmbcr HSBC 4& Crimp 
Issued bv Midland Bank pic 



The Inter-American 
Development Bank 

has an opening in 
Washington, DC for a: 

SWIFT CENTER SYSTEM OFFICER 

Functions: Operate, administer, and maintain the SWJFT/Tetex 
System (STS) using Loglca's Fastwire Software; Interface with 
the SWIFT Network and Telex carriers; Install and test new 
versions of STS, monitor perform a nce, maintain security, identify 
systems errors, support software interfaces, and participate in 
STS disaster recovery plan and in systems development within 
the department 

Requirements: Bachelors degree in Computer Information 
Systems or other fields with concentration in IS. Minimum three 
years of relevant experience; one year with Masters. Prefer 
knowledge erf VMS Operating System., 

The IDB is an international financial Institution dedicated to 
promoting economic and social development in Latin America 
and the Caribbean. Position offers excellent salary and benefits 
package, Including relocation costs. Resumes should be received 
by September 12th. Send to: HUR-ROSWFT IDB Stop EO507 
1300 New York Avenue NW. Washington. DC 20577; or FAX 
( 202, ) 623-3096. The Bank regrets that it Is able to respond only 
to applicants who best meet postton requirements. 


(B) Executives with 2-3 years sound experience in Advisory and/or M&A 

(cross-border work will be useful) gained from either a Merchant 
Bank or "Big 6" Accountancy firm specialising in corporate finance. 

Candidates should demonstrate a strong academic background, numeracy and 
excellent interpersonal skills. In return, die bank offers a varied and challenging 
experience together with excellent career prospects. 

Please contact Michele MocPhersow, Senior Consultant on 071-623-1266 

Jonathan Wren & Co. Limited, Financial Recruitment Consultants 
No. 1 New Street London EC2M «TP TeL 071-623 1266 Fax. 071-626 5259 


JONATHAN WREN EXECUTIVE 



INVITATION OF APPLICATION FOR 
A GENERAL MANAGER 

Thr Funxcap Dredging Association (EnDA) is (be nprostattative Europe for ibe 

dual dredRiiW companies end the national representative organisations. 

The offices are located in Brnrois, Belgium. 

_ _. tnmAeA In December 1993 ■» a non-profit Association in accordance with tbe Belgium law with 

of studying and solving all problems related to the European dredging industry including 


The Boanl of DircfflW 

423-5F-SS1 r.^ 

self sorter. aWe 10 inmate ■“> P"** 53 " 

m«< U- 

M'e-lns ^ „ a**-™* 

demonstrated . the Ft ""* Onnm. 

BlWHU » functwnuIR withm the curep™ 


P ro ficiency in written sad spoken English sad Dutch 
plus a working knowledge la French and/or other 
(angngES of (be fimopean Union. 

Exorilcnf drafting skate to prepare reports and analyses. 
Proven capacity for Idtcllcexul and operational 
kaknUp of wall professional and nmlti-discipiiiniy 


The EoDA offer * a c o mpeti t iv e naiiimijaiiow package 
depending on gnaUfindioai aid experience. 

Interested candidates for the position of General 

Manager of EttDA should submit their application with 

full CY and other relevant derails before tbe 15th of 

September 1994 to the Chairman oT the Board of EaDA. 

UrJJDtOotOt 

cfo II, A**nurFrstakSa Smserdt 

10 SB And - Bdgktm 


FUND MANAGERS 
SECURITIES ANALYSTS 

A large Emerging Market Investment Fund is seeldng to 
hire Fund Managers and Sr. Securities Analysts. The 
successful candidates will have: 

□ The ability to formulate investment strategies, and 
analyze listed and n on-listed companies. 

□ Possess 3 to 5 years of direct experience in managing 
large Security Portfolios. 

□ Multi-lingual, CJ-A-s, and MBAs preferred. 

□ International business experience a plus. 

Placement possibilities include one of our international 
offices: Hong Kong, Bangkok, Mexico City, Geneva, 
Moscow or Sao Paulo. Extensive travelling will be 
required. We offer competitive compensation coupled with 
an excellent incentive program. All replies held in strictest 
confidence. 

Write to: Box B2436, Financial Tunes, 

One Southwark Bridge, London SE1 9HL 


MANAGEMENT TRAINEE 

Long-term development and growth in 
private limited company. Individuals aged 
23-35 seeking opportunities in financial 
'markets. Potential to progress to senior 
management, with full profit participation. 
Please call: John Kilshaw on 071 379-5044 


BELARUS 

Macro-Economic 

Adviser 

Driving structural reform in the former Soviet Union 

Tbe UK Government Kn cm How Fund & committed to assisting Belarus, now an 
independent state but formerly- a member of the Soviet Union, in its quest for 
macro-economic and structural reform. There is also a requirement to help the 
Government of Belarus in negotiations with the IMF and the World Bank. 

Based in the Department of Economics in tbe Council of Ministers, you will work in close 
liaison whh senior level government colleagues, particularly those involved in General and 
Macro- economic Policy and Structural and Systematic Economic Transformation. 

The petition is initially for one year's duration but with on option for renewal and 
demands a recognised academic qualification in economics, together with a strung grasp 
of pub&c finance and monetary economics. Experience of advising governments on 
macro-enonomk policy ar a senior official and ministerial level is essential and you should 
posses operational knowledge of the IMF and World Bank. Sound analytical skills and 
die ability to present cogent arguments to non-spedalists will match your tan, 
determination and resourcefulness. Any experience of Eastern Europe and/or the former 
Soviet Union would be an advantage. You must also have a working knowledge of the 
Russian language or be prepared to undertake the intensive training required to reach riur 
level. 

Applicants should either be nationals of a Member State of the European Community, 
nationals of a European Economic Area Member Stare (i.e. Austria. Finland, Iceland, 
Norway or Sweden) or Commonwealth dozens who have an established right of abode 
and right to work in the United Kingdom. Applications are welcome from individuals and 
companies. 

Salary will be subject to negotiation. 

Doting date for receipt of completed applications is 23 September 1994. 

Please apply, enclosing a detailed cnrrfcolum vitae, to Mrs M McReU, - 
Ref AH369/MMcK/FT, Abercrombie House, Raglntham Rood, East Kilbride, 
Glasgow G75 8BA. 

ODA it s vmmitud to a polity of equal opportunities and applications for tbis post are soutfa 
from both mat and women. 


P*. 


m 


QTA 


OVERSEAS DEVELOPMENT ADMINISTRATION 

BRITAIN HEIPINC NATIONS TO HELP THEMSELVES 





FT/LES ECHOS 

Tbe FT can help yon reach additional business readers in France. Our link with the French business 
newspaper, Lcs Echos, gives yon a unique recruitment advertising opportunity 10 capitalise on the FTs 
European readership and to farther target the French business worfAFor information on rates and 
further details please telephone: 

Philip Wrigley on +44 71 823 3351 














2$ 



*** 


FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


ACCO UNTANCY COLU MN ___ 

^ i _ . • 

Little has changed in a quarter of a century 

Andrew Jack looks at the first edition of Accountancy Age and sees a continuity of issues over 25 years 


KAPPt£R EUROPE LTD 

Posttfoiu Financial Manager 


: A« 


di‘ 


9 

£** ci*y 

i 


Twenty five years ago, Neil 
Armstrong took his flint steps cm the 
moon, Concorde made its inaugural 
flight, parliament abolished the death 
penalty and the London School of 
Economics was dosed by student pro- 


Predlctably enough, things were 
rather more static in the conservative 
world of British accountancy. But not 
everything stood still. On Friday 
December 5, 1968, a new weekly spe- 
cialist journal came »ntn existence 
which continues to thrive: Accoun- 
tancy Age. 

The senior editor was Robert Wil- 
lett now in charge of WQlott King- 
ston Smith, a specialist London-based 
accountancy Ann. Ihe advertisement 
manager was Maurice SaatcM, who 
later decided to go it alone. The pub- 
lisher was Michael Heseitine's Bay- 
market group. 

Some 62,750 copies were distributed 
free to all qualified accountants, 
including members of the Institute of 
Cost and Works Accountants (now 
Chartered Institute of Management 
Accountants) and the Association of 
Certified and Corporate Accountants 
(now the Chartered Association of 
Certified Accountants). Others could 
pay two shillings for the privilege of 
hearing an independent voice for the 


Flicking through the 32 pages of the 
first issue, the format looks strangely 
familiar to readers of the Age today. 
There are differences, of course. In 
common with many newspapers at 
the time, there were no by-lines on 
the stories to indicate who had writ- 
ten them. 

One article makes references to the 


tight restrictions imposed by the 
Institute of Chartered Accountants in 
England and Wales: advertising or 
soliciting for new business by accoun- 
tancy firms is prohibited. Memb ers 
COUld give their Ttawiafi and roll them. 
selves “chartered accountants" if 
quoted on television or in print but 
they were forbidden from mentioning 

Tumw» of their firms 

Salaries also reflected the era. The 
advertisement section tantalises with 
scene jobs paying as much as £5,000, 
and remuneration for an equity part- 
ner designate to an accountancy firm 
of £3,000. 

Thera is a piece about toe Canola 
1200 electronic desk calculator, “prob- 
ably the cheapest of its kind available 
in this country" at £325, which is able 
to multiply and divide numbers. Its 
dimensions were 10.5 inches by 13 
Inches. 

On the same page, the Decimal 
Training Company is selling plastic 
replicas for training purposes of 
Britain’s new decimal sched- 

uled to be introduced in February 
1971. “Experience has shown that 
even wheat checking-out cashiers have 
been trained it is realistic to expect 
that checking out win take longer," It 
warns. 

One of toe most happy and visible 
changes straw that par ty era. is the 
diaappugrawno of an enormous num- 
ber of sexist advertisements, with 
skimpily-clad women draped around 
toe most mundane products on the 
slightest pretext 

Even the editorial Jud gments were 
affected. Page two of the first issue 
includes a large photograph of Gail 
Renshaw, Miss USA, and runner up in 


the Miss World contest The justifica- 
tion for her ap prarwncft was that gbe 
' was studying for her CPA quabflca- 
tion with a firm in Lexington, Geor- 
gia. 

But perhaps toe biggest surprise to 
a contemporary reader of the original 
edition of Accountancy Age is how 
little the issues of the day have 
chan ged to the last quarter of a cen- 
tury. 

The most prominent front page 
story deals with “staff shortages and 
legislative complications" at the 
Inland Revenue threatening a “tax 
crisis”. The board of the Revenue had, 
called for a three-year standstill on all 
new tax legislation, white the accoun- 
tancy profession was dgmandfrig fn its 
“annual plea” simplification and 
removal of anomalies and “hastily 
conceived" proposals. 

Mr N C Price, deputy chairman of 
the board, complains that “we do say 
to the most forcible terms that we do 
not want anything new until we have 
had time to digest what we were 
given to 1965." Meanwhile, the Con- 
federation of British Industry was 
criticisiiig tax changes “for not hav- 
ing been thought out sufficiently well 
in advance". 

The Revenue also seemed con- 
cerned that youth clearly had its 
mind more on Roby Dylan and drugs 
than on matters fiscal, since it 
bemoaned the fliffinniHns in retaining 
staff and the need to remove both the 
“material and psychological barriers" 
to the recruitment of graduates. 

The tension of the “dual rede” of 
accountants also featured promi- 
nently: an article hi g hli g hted the 
eifliwwi conflict of interest when audi- 


tors also act as nrmanitante, account- 
able in the first rede to shareholders 
and to the latter role to the board. 

One anonymous consultant com- 
plained to the Age that the rede of the 
accountant as the statutory auditor 
should he made more “constructive”, 
and that wiiwnigwn»iit farm -irw Hnn 

services provided by the firms should 
be restricted to these areas. 

The stray was triggered by apparent 
concerns from nmnag wru e n t consul- 
tants unrter thrpat hwanao rtn» Trwrfl- 

tute had lifted its ban on marketing 

for tho mmaiWing arma of Hu* firms — 

a move welcomed to one of the Age's 
first editorials. 

A second editorial supports calls 
from Lord Shawcross, then chairman 
of the City Takeover Panel, for the 
accountancy profession to clarify cur- 
rent practices. His concern was the 

iTuywiB i utenripa fn fhwnrial reporting, 

and the fact that the existing limited 
guidelines issued were not manda- 
tory. 

Ironically, the first profile of a 
“leading figure" was Sir Joseph Lat- 
ham, who hart quit art after its take- 
over by GEC at the end of a hotly 
contested battle. Disputes about the 
profit forecasts made by AEI - to 
which Shawcross was in part refer- 
ring — became fhp starting for 
the creation of the Accounting Stan- 
dards Committee, fo re i * rmTM>r of the 
Accounting Standards Board. 

“I could sit down with auditors In 
most big companies, produce two 
widely different forecasts and con- 
vince the auditors of the validity of 
each,” Sir Joseph says. He makes a 
plea for accountants to present “real 
ity” not the figures as shown in “an 


orthodox «mw h iI Iwg statement". 

Mr Ronald Lead, yet to be 

lnrigfated in 1969 tut that year’s presir 

dent of the Institute of Chartered 
Accountants to Bte gfanri and Wales 
and senior partner of Feat Marwick 
Mitchell, was also quoted In an extenr 
rivu* Interview w iiii tfw Mflgmlnft . 

EQs most importa nt concern? The 
fiHEata d attempt to Int egrate the dlf- 
fanwit ]m iBwnhwial agymufinHy bod- 
ies. BOs view was that modernisation 
and consolidation was essential, and 
the ehanea to merge the hniHtw might 
never be possible again. 

He teifcpd about the pwwiwmy and 
complexities of the incorporation of 
acco un t an cy firms, partly reflecting 
their desire to try to raise external 
capital to help fund their operatlotts 
and also to protect them from unlim- 
ited liability at a time of rising legal 
dating and Wffl ll l Hn g fa ai T raiu y COSts. 

Hie discussed rotation of au dit An ns 
- on which be was open-minded - 
and the tensions of auditors getting 
too dose to management - which he 
argued did not to Mb experience jeop- 
ardise independence. 

Leach suggested there was Hfeely.to 
be greater consolidation of the Anna, 
a shift of chests towards large firms 
and single worldwide auditor, and 
predicted 'a move towards accoun- 
tancy becoming a graduate profes- 
sion. 

Some erf his pretfictkms have clearly 
held true. Yet overall, the message of 
the Age seems to be that little of 
substance has changed at all in its 
first 25 years of existence. When it 
celebrates its 50th anniversary, much 1 
of the profession might take some 
secret comfort from that. 


i Md tarn nr kan Bw yean 


Burnell K«t 


eemMLjPMHMtfjcfcr, 


Associates 


"—ii — 


CHIEF ACCOUNTANT 
Based N. London 

International Maura group (T/O ElSm) «•*» « quaHfled accountant tor the 
position of Chief Accountant The posWon involves preparation of Statutory 
Accounts tor the UK and a Belgian &A., Management Accounts, Cash 
Management and Forecasting, Installation of Internal Control Systems and 
msnagtog 7 staff. The succsssM csndkWte shoiid have at least 5 years pq* 
have genuine I.T. experience {parttaandy Excel, Tatra, Cubic). Khmladge of 
Ranch an SKfcentega. Concfidstss must be able to demonstrate a track record 
of a chhwment and be at home In a mUMcutoal muttBngual envtommant The 
position «■ antafl regular trips to Brussels and carries a competitive salary 
dspsndsnt upon expertsnoa and qusMcatton. 

Applications by CV kidudng current salary detail to: 

Mss fWen Fay, APJVLS. UdL. ta Aiftort PWk, London N6 in. 




FINANCIAL CONTROLLER 

Walthamstow c£23k + Bonus 


An opportunity lo Jofra rspfcly tmpundng Ooofcssisr wUh sows! tunwr of £2m 
g s n s re ts d tram Slops operated In London. Ths Mariflan Is to raMorco Interns 
cental* and knprom management MCcmafcn to teStete gumth. 

At pre s e nt the acco un ts are produced on Saga software. The succmsM 
omdUsts wodfcl be sqweted to Haas lie capsMfly and mediation to Mrs tflraet 
msponsMty tea eccourSng, management reports, admHafrOSan and to up^pada 
the tancOons of acootrt i production and stock i na naQsitmit 
imsm appsoares urn oe qumao acaundB wan imawanc mepsnenca ana more 
>m p ott« « ty haw the mainly to Jain sartor managsre In Ow dstfstopment of tie 


The Cttatnawv Sceptre Boohs Utf. 

ItM OHorcl Road. Wtethranstnw. London E179QE, 


Controller 

Manufacturing and Distribution 


c.£35,000. + Car & Benefits North West 

Opportunity for rapid career progression within this young ex panding pic. 


THE ORGANISATION 

♦ Expanding and profitable pic. Impressive organic gr o wth . 
Successful secies of acquisitions. 

♦ AmwwiTMm o perating inw« in tig and Pump#- 

♦ Lean Head Office function. Emphasis on strong financial 
drSTTplmra and improving business performance. 

THE POSITION 

♦ Head Office role. Report to Group Finance Director. 

♦ Work widi senior management to highlight and address 

business performance improvement areas. Si gnifif nr 


► Early prospect to develop Into Group, Divisional or 
Subsidiary ED position. 

QUALIFICATIONS 

► Professionally qualified with substantial accounting 
s yst em s experience in the ™nnfi»mmng sector. Knowledge 
cf stock and product costing issues. 

► Good personal credibility. Questioning and analytical 
approach. Eye far dead, ye* able to see the wider picture. 

► Ambitious. Able to form rapport at all lords. 


board contact. European travel. 

Pleas* send full cv, stating salary, nt MN3440, to NBS, CourtMfl House, Water Laras, Wibnslow, Cheshire SK9 SAP 



MANCHESTER 0625 539953 
Aberdeen 0224 £38080 ■ Btnnmghoni 021 233 4456 


Brian! 0272 291 142 • Edinburgh 031 220 2W0 
Glasgow 041 204 «34 • Leeds 0532 453830 
London 071 493 6392 • Skragh 0753 819227 


FINANCE DIRECTOR 

Precision Engineering 
Berkshire c.£32,00jMllas car 


Our client, an autonomous subsidiary of a 
significant pic, is a successful, growing and 
profitable medium-sized nrarufacturing company 
and world leader in its sector. Due to a promotion 
within the Group, they currently require a 
Finance Director to contribute to their future 
success. 

Man aging a small team, your responsibirrtJes 
will encompass every aspect of the finance 
function, with an emphasis on management 
accounting. Working in an environment of 
continuous charge and improvement, this is a 
genuine opportunity to contribute to overall 
business performance through the initiation, 
implementation and monitoring of new initiatives. 


erably Cl 


A qualified accountant 
with broad financial experiei 
manufacturing englneerfntfffuslness, and 
management accountinrskiiis, you 
be able to quantify four contribute 
business. With respdrabifity for rr, 
experience is essential, Itarill be your in 
and communication skills ini 
initiatives are embraced tv 
business. 

Please write, in confldence\uotin| 
1273, endoeliig fu§ career details an^cii 
salary to Mfoe Kont& Regent Consurtfng?q 
Regent House, St Qfies Close, Rearing 
2SA. TM (0734) 560522, 


ing Ref 
current 


□ Regent Consulting . H 


aECUIMSENO1#N)S3ECIQNDM90N 


FINANCE OPPORTUNITIES IN NEW YORK 


The New York office of Robert Walters Associates has been open since January 1994. We are currently working on a number of ggrtgnmgnM in hnrh rtu- fields nf hanlrhig a«ldO 0 f"mmT and 
would be interested in bearing from finance professionals who are able to work in the USA. 


INTERNATIONAL ACCOUNTANT 


AUDIT DIRECTOR 


NEW YORK 


C. $70,000 


NEW YORK 


C$100 


This major International group has an outstanding opportunity for a young qualified 
CPA/MBA to join the Worldwide Corporate Review team with specific responsibility 
for the Americas. 

The successful individual will pascss a strong tii-un ci a l background and must be able to 
work independently under his/her own initiative. You will be responsible for both audit and 
special project work in North & South America and possess the ability to be promoted into a 
line management role within an 18 month time frame. 


One of the world's ia^est emertaanenent groups is looking to neenrir a qualified CPA/MBA ro 
head up Its audit function. 

Based in the U.S. headquarters the individual will be responsible for the audit function 
in North America. A strong analytical background Is essential together with a flexible 
approach when dealing with senior management. Experience of both U.S. and UJL GAAP 
would be highly advantageous, as would previous exposure to the entertainment 
Industry. 


To discover more regarding these and other opportunities contact Graham King In New Yotk on (212) - 479 - 2316 (Evenings & Weekends on (212) - 66l - 6630)- Or fax/send yoo r resume to 
him at Robert Watters Associates Inci, 100 East 42nd Street, 8th Floor, New York, N.Y. 10017. Fttx (212) 479 - 2506. 


ROBERT WALTERS ASSOCIATES 



PRIVATE FINANCE 
PANEL EXECUTIVES 


The Private Finance Panel, chaired by 
Sir Alastalr Morton, advises the Chancellor on 
his Private Finance Initiative. The Panel acts 
as a broker between the parties, seeking to 
m a ximis e opportunities for private investment 
Into public service projects in all areas of the 
public sector. The Panel Is serviced by a small 
Executive of high-quality secondees and 
annual contract appointees. Being funded by 
the Treasury, It can only offer up to £45,000 
pa, but is unlikely to accept individuals 
earning less than £80,000 pa In the private 
sector. Preferred type, self-starting, 
professionally qualified, age 35-43. 
Applications invited to: 


c/o Room 39 8/B, BU Treasury, 
Ps ufU s me nt Street, L on don SW1P 3AG 
For the Attention a£ Dangles Hogg 


N Ail 


CE DIRECTOR DESIGNATE 


Influencing Key Management Decisions 


Our client Is a specialist manufacturing company with an excellent reputation for quality. 
Established in the early 1900% the company manufactures a diverse range of electrical 
related products. With a strong profitability record, continuing investment In new plant, 
and turnover approaching £8ra pa, the company is well placed to take advantage of the 
improving trends in Its various markets. 


As a result of the retirement of the current Finance Director an exciting and rare 
opportunity has arisen. Reporting to the Managing Director and leading a small accounts 
team you will be a key member of the company’s senior management, taking responsibility 
for all financial matters. 


£35,000 

+ Car 

+ Bonus 

East Midlands 


f^RNANCIAL 
I DIRECTOR 

| EXETER AREA 

I You win boad up a email I 
S r wp o nalb la lor afl account 

■ toneflons uAMn a madkan ata 

■ staff rnanufaroafagoonsMry. , 
a umfar 40 . wu uriB tiava nU 


You win band up a email team 
r wp o nalb la lor afl accountancy 
te neflons wtfto a madtam atosrf 7B 
staff manuCaoutagoortsMny. Xgad 
imfor 40, you wtH tiava iala»ant 
accountancy quaUflcatfona and 
MUST haw* paitoua mswrtanoa of 


The role is diverse. At a strategic level you will be able to paint an effective picture of 
company performance, making recommendations on matters such as financial results, 
capital expenditure, acquisitions, management information systems and cost control. At an 
operational level key duties will include the provision of budgets, forecasts, timely 
accounts Information, credit management and company secretarial matters. 


a HUSH baton manufacturing 

anvUoomanr as «■ as bu oonpunr 
■mala, as sums off apnodalMat 
analysis Natmaapsasd. TUsflsn 
axeapBona i oppomm Uy w Join a 

nsw young mnagscnaftt team Uu 
an growing ths company Into an 
fatemaUonal enppflsr of apwi a fla t 
cu wponante. Salary «0fc * Car *■ 


"V L* 

Vs 

s 

o S 

•3 1 

9-2 


Finance Manager 

Northants £Neg 




Oor riant, <u of the larger and mare pmgreMiv* edocattozul estahfialiments 
afit " ’riribt coD ti m rin g to provide quality fan has taken 

great com mercial strides during and since undergoing the process of 

An integral port of this process is ths appointment of a Finance Manager with 
strong tschnirel and oimmer ml acumen. Yon will tshp rtspcmribility for 
financial and accounting systams at the College, whilst also maximising 
resources and working closely with staff stall levels to continue to develop the 
tyitwgw V, famama gmMMUng p^ntid 

You will be tasked with ensuring that the necessary management and 
finan c ial information systems are developed and maintained to order to 
fecOitato the agedgya n a uis g waw nt af the Collage. Thai will forimfa ^ 

Hit hm fa B t in g m a iw lL 


The successful candidate win ideally be a qualified Accountant (ACA, ACCA) aged 28-40, 
from a manufacturing background who is looking to give a long term commitment to the 
company. 

Please apply directly to Tony Byrne at Robert Half. 63 Temple Row, Birmingham B2 5LS. 
Telephone 021-643 1663 Fax 02 1-643 6170. 



nu 

C3H 


ROBERT 

HALF 




You win b* a qusliflsd, or |»rt qualified accountant with previous expofence of 
naming an accounts ftmctioii, as wall as evidence of p repari ng p mpnanTg 
preeadniM tm finan da l reporting and planning. Yon wfll snp urrrt this with 
computer literacy and a good koowlsdge of accounting packages and/or 

database 


Tsl on sums? 
* — — mimn 


ttCRIIIIMENT 


nO o 

Yf, 


la the firMtofltanreplewoMnd jrour CV to Namgr Stevens or Chris Dsntoaton 
st Latemstinul House, 7 High Street, BsHag. London VTS 5DB. Altwm^refy, 
ph ase tals p hc n s tbcinoe 081 566 5900. ’ 


Grant Thornton 


MANAGEMENT CONSULTANTS 

DK a«ab« Sna of Gsuit TSmatM International 














if l\ « •« 


Ik. 




***** " ' F i.Th 


FINANCIAL TIMES 


FRIDAY SEPTEMBER 2 1994 


* ^‘f’l 


<o>r 




;■ - a , 

„ .. . , 


erector 

R S ! •• f c r if* g 

t32SWp!3» 


' '■ '*»ii 


• i.43^,-5 
vV '> 
'tt***'; 

t " '**?<* 

■s*'2 

•* % • 

:*> i>.— Re) 

•' >'5?';r,v ^ r.Trvn 

** •. - p : ; 7n 

fi£ : ' 


Audit for Profit 

Clt 5 r c.£27*500 + car 

serv,cc group to media and financial markets. In growth mode, 
finance function, seeks new Eternal auditor*, for creative, 
objectives Inducting investigation, current asset control, profit 
improvement and true management audit A visible role close to the board 
measu rable results. The vacancy arises from promotion. 

Candidates should ideally be graduate chartered or certified accountants 
r , ** 1 a practice base and some post qualifying experience preferably. 

Fsraonanty should be assertive, bright and communicative. Age, say 24-28. 
Prospects exist throughout the group and this job is a stepping ^ 

Write to John Courtis FGA. Courtis & McManus, 

72/75 Maiylebone High Street. 

London W1M 4AJ specifying how 

you meet these criteria, stating I /HlftlC 

salaiy. enclosing CV and quoting "P 

7333/FT. fO 


Search and Selection 


Head of Finance 

BBC Midlands & East 


oo^buumiuis « tsaa is one oi uie Oorporadon's largest regions with respowlbafly forroore than 
SlOOm of expenditure, ft is a Centre of Excellence lor Drama, Daytime, MaticuKura) and Leisure 


Television 'Stations and 16 Local Radio Stations. 

A financial leader is required to take professional responsibility for achieving the highest 
standards or financial and information management, including ensuring Cadbury Compliance. 

At a time of considerable change for the BSC, akE? role wW te the development of appropriate 
ma n a ge rial relationships between Finance and internal production and resource business units. 
The professional development and leadership of the finance team is another important priority. 

Working directly to the Head of Broadcasting, Midland* A Ea«f, the nccesBfql ra nHWfat,, 
be a key member of the senior management team. There is astrong professional fine to Hnantial 
Controller Regional Broadcasting who has responsflriUiy for monitoring all aspects of financial 
management across the Directorate. , 

Ca nd i da t es must have substantial professional qualifications, experience at a senior level and 
must demonstrate ability to lead specialist and nonepeciallst teams with an enterprising and 
enabling approach to management accounting. He/she will have sensitivity to the needs of 
programme makers and extenrive experience and knowledge of using and working with relevant 
IT systems. 

Salary according to qualifications and experience- Besed Pebble Mill, Birmingham. 

For flnther details contact Head of Personnel, Kevin Hosier, 021 — 414 8223. 

For an application form please write (quote ref. 16412/F) to Head of Personnel, BBC 
Midlands & East, Room 606, Pebble Mill g«™*, Birmingham B5 7QQ. 

Application forms to be returned by September ISth. 

WORKING FOB BQOALTFF OF OPPORTUNITY 


TAKE PRECISE AIM 


B. ;>.'.,\cix(; vocn 
li/:< rtiV.tK\ i Ai:vi:t:nst:\!h: v; 
:.v Tit;: im. Tr.jrs vor- 

.u:r rut: worn p'< 

in s7\7."-.« ;:o.v'’/r.vrr>. 



' ? TARGET 

THE BEST 


For inf'nrinii/inn on 
u<tiH-rti*inx in this section 
otcusc cull: 


Philip Wrigley on +44 71 873 335 i 

Andrew Sliiirzynski on +14 71 873 -105 I (.'art ill -Jones on +-14 71873 3770 


. A£$03 ^^n^M3EOTRS: 
AbVHSIKaNG 

• ■' appe£T$H*thO UK,/* 

. edition every 


inti in & Xmeraationai. 
«tiM<m every Riday 

"Few fintiiCTintiiiTQBtiQn . 


+44 

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AHtirewSkarxyn^don 
!*••* +44 n 1875 4054 


on +44 

■~;-\n.*73p3$L- 


Brian O’Rcfll on +44 

won" 


^NOAVURA 

Financial Controller 
Debt Derivatives 


Nomura International, headquarters of the European arm of one of the world’s largest 
securities houses is currently seeking a senior individual, preferably a chartered 
accountant, to join their London finance team to cover the debt derivative markets. 

The position will report to the Head of Finance and be responsible for trading, funding 
and brokerage support in all debt derivatives. Only candidates with at least 3-5 years’ 
experience, who have a sound knowledge of accounting procedures and Swap pricing 
models need apply. The position has a very “hands on" approach, dealing directly with 

individual swaps traders providing P/L movement on an intra-day and monthly basis. 

This position presents an ideal opportunity to be directly involved in the front-end 
derivative markets. The successful candidate will be well-remunerated for a high level of 
commitment, innovation and team spirit 

For a confidential discussion please contact David Reynolds, Tel: 071-236 2-iOO. 
Fax- 071 -236 0316 or apply in writing to Sheffield-Haworth Limited, Prince Rupert House. 
64 Queen Street, London EC4R IAD. 


Excellent Salary 


and Benefits 


CORPORATE 

AUDITORS 


£Excellent 
+ Car + Benefits 


London/Manchester 


KING^SHER 


Consultants in Search and Selection 


Kingfisher pic is a leading European retail group which operates store 
chains such as B&Q, Comet, Superdrug and Woolworths. The group 
also has a leading property company, Chartwell Land, a large wholesale 
distributor Entertainment UK in addition to Darty the leading specialist 
electrical retailer in France. 

Kingfisher has achieved its success by developing a strong knowledge and 
understanding of market demand and an ability to deliver a customer 
focused strategy designed to respond to changing conditions across 
all aspects of its operations. 


The newly formed Corporate Audit 
function will take prime responsibility 
for providing the Kingfisher Board 
with an overall assurance that various 
business risks both operationally and 
strategically are properly identified 
and that appropriate procedures and 
systems are in place to control these 
issues. Reporting to the Corporate 
Audit Controller, you will develop a 
proven knowledge and understanding 
of the commercial objectives and taste 
faced by line managers and recommend 
initiatives to both highlight and control 
these issues. 

Successful candidates will be graduate 
accountants, aged in their early to late 
20's who already possess a strong audit 
background gained from within a public 
practice or commercial business 
environment Exposure to computerised 
systems would be a distinct advantage. 


You must possess proven interpersonal 
skills, be task orientated and capable 
of working on your own initiative. 
Individuals who strive for excellence 
will enjoy unparalleled opportunities 
for career advancement 

Interested candidates should write to 
Charles Austin or Tim Bates enclosing 
a full Curriculum Vitae and quoting 
reference CA470, at Harrison Willis, 
Cardinal House, 39-40 Albemarle 
Street, London W1X 3FD. 

HARRISON 

MWILLIS 


S h A K C H 

\ s c i e (" r i 

O N 

y \ R r 

N r R s H 

1 l> 


LONDON • READING - GUILDFORD • ST. ALBANS 
UKBRIOGE - BRISTOL - BIRMINGHAM 


T NANCE 
Cli T! YES ! 



Price Waterhouse 


EXECUTIVE SEARCH & SELECTION 


Finance Director Designate 

£35-45,000 4- benefits Bristol base 


Lane Group pic b a wcB cstabKahed and successful, privately 
owned company in the distribution and transport industry. We 
enjoy a reputation among our cl ie nts for providing innovative 
solutions to logistics issue*. 

We are entering a period of sustained growth, which will 
con solidate our position as a market l ea d e r in this competitive 
area. In order to hdp fedKtate fob growth, we now need to 
recruit a senior financial manager. The role requires a qualified 
accountant with strategic awareness and excellent techn ic a l 
.Ml. particularly in the areas of management accounting and 
systems, who wffl provide m e anin gf ul management information 
to tight timescales and budgets and who will m a in ta in a firm 

control on costs. 

These abilities should be combined with proven management 
skills and real commercial flair, which will allow you to work 

dosdy as a member of the senior management warn and provide 


a major contribution to developing the business. 

Whilst experience in dist ri buti on would be ideal , it is 
certainly not rial. It is important, however, that you have 
foe personality to work in an organisation which prides itself on 
its partnership culture and its ability to respond to challenges 
with determination and flair. 

This b an opportunity to join Lane Group m an etching 
phase of its development and one which provides immense 
scope for personal and career growth. Promotion to Finance 
Director can be expected after a successful period. 

Please write with a full cv quoting reference C/0052 to: 
Jim Mitchell, 

Executive Search ff Selection, 

Price Waterhouse, 

19 Cornwall Street, 

Birmingham B3 2DT. 


Poland 


Excellent 

Package 

+ 

Benefits 


Finance Director 


The Company 

Extensive capital investments by this company together with the backing of the American 
Investment Funds will define them as one of the major players in their field. The product used 
extensively in the manufacture of building and construction materials, is exported across 
Europe. Thar services will contribute to and be used extensively in the modernisation and 
rebuilding of East European infrastucture. Compound growth exceeds 100% per annum in the 
two years since privatisation and further expansion of their product lines will ensure significant 
increases in their already substantial workforce of five hundred employees. 

The Role 

Your previous experience in a financial management role will provide an excellent foundation 
for your further development. You will be expected to take responsibility for the finance 
function as well as foe financial re-structuring and re-engineering of foe operation. Specific 
finance projects will indude budgeting, forecasting and cash flow analysis. Systems 
development and implementation of strong financial controls will be a natural consequence of 
your daily activities. 

The Person 

A hands-on management style coupled with comprehensive accountancy knowledge will 
contribute to your success in this job. You will need knowledge of Western and local 
accounting procedures. If you have worked on large audits or have experience in an industrial 
environment including live installation of financial control and management systems, this 
represents a move forward. Polish language is preferred, however candidates with experience 
in foe Polish market place and basic Polish are encouraged to apply This is a truly outstanding 
opportunity to join a young, dynamic company within a growing industry with all foe 
challenges and rewards that this brings. 

Please respond to the address (fax below) quoting reference FT 2351 on aH correspondence. Ail 
applications win be treated in the strictest confidence. 



Executive 

Resourcing 


I 


MIDLANDS 


; . •; v. ^ n-- • ’ 


ms leafing praSsaonai iwb » “ ™ ” 

rapuMian tx quo»V of savk» ond retenftm fi blue cNp 




InfimonersarefwtKBemanjnarx^emOTtand 
commisittifonskatewfflhdpensLW&iafhfehquQffly 
mtHK^emerfl Womidlon is producedin a fimeiy and 
memJngMtaWon. An Interest in taxafon mates would be 
anadranttQe. High quaSy technical accounting sJoflswillbe 
token as read. 


You should be a 
demonstrate exc 


Please send fuB personal and career detofls, ndutfing curart 
remuneraaon level and doyflme telephone number. In 
confidence to John BSoB, Coopers & Lytxand Executive 
Resourcing Limited. 43 Temple Row, Bi rmingham B2 5JT 
quoting reference JE273 oh bcffi envelope and iette. 


/ 


Antal International 

Executive Recruitment 

8 Alice Court * 116 Putney Bridge Road • London SWI5 2NQ 
Tel: +44 (0) 81 874 2744 (8 lines) • Fax: +44 (0) 81 871 2211 


Check 


Limited 


FINANCIAL CONTROLLER 

Financial role with a strong business planning bias 


Competitive Salary + Car + Benfefits 


Crawley, Sussex 


Check Technology Lid is the largest subskJary of the U.S. based 
Check Technology Corporation, the world leader m financial document 
produefan systems tor the berirtg and searty pfHhg hck^lries. Check 
Technology Lid operates in Bjrope, Africa and the Made East wflh^ T/O of 
£B mion and a 65% market Sure ofthe UK cheque vofima 

Wb are locking tor a commendal finance profesdonal, reporting to the 
Managing Director, responsbe tor stirfwyL business pfernhg, revenue 
forecasting, and profit and bss modeShg, h adcBbn bo the nomei finance 
departmental duties. ResponabWes ateo Inctoda the management of 
towankxy Control. Human Resources, Computer Systems, dually Control 
ato FadRiBS Management Dract reports of 8 staff. 

The successful candidate must have: 

• worked for a US Parent Company 

•a professional accountancy qualification with 3 years post- 
quafification experience 

• a minimum of 7 years professional feiaice experience in any sector 


• experience of managing a team 

• exposure to managing the Inventory Control function 
operating toBS5750/lS0900l standards 

• experience of drafting and negotiating supplier aid 
customer contracts 

> experience fai an International environment (preferable) 
Applicants, aged 30 plus, must have presence and cretfibfity 
combined with strong leadership quafiUes and an abitty to motivate 
others. The applicant mjst be thorough and anafytfoal and ba able to 
mast tight deacines. 

For a confidential discussion please call Paul Connor, on 
Tel: 0344 874174, or write to him endosmg your C.V. at 


SELECTION 

Coworth Park House, Ascot, Berkshire SL5 7SF. Fax: 0344 874103. 





Passed Finalists List 


FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 





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The Chartered Institute of Management 

Accountants 









29 




X 


FINANCIAL TKVTF-S 




. FRIDAY SEPTEMBER 2 1994 


y j A ' I Pet] 

I Sale 


Selection & Search 

Finance-Accountancy-Banking-Legal 


PetercaM 


ega^ | 

mdm member firm of the jf 

a senior institutional 
co&gue taking if anew Ij 

b eetuiqftbtsyuir. « 

ial I 

iauities 1 


Senior Institutional 
Salesperson Belgian Equities 

Equ&y Sales Division is composed of a small group of highly motivated Individuals ■ 
onroly responsible to one of the Managing Paitaeis. 

?i?? didaK ** re^onsJbte for a agrafkam portion of Paefeartfs easting institutional 

clfcmeteaiKlwiUbeewmstcdwtthltsfuxtherdCTd^maiL 

y^fain a cornea of Tata! Quality Cocurol, he or she will work ctosely wkh Peiwram's Invesment 
iwaicn Department in Mentilytag promising investment prospects, in organising company vote. 
proemuoiB and roadshows and in making available information to our diems on a timely basis, 
ine aiflity to wrte m a concise, compdlmg and coosumeriiieacOy manner, in English, French and 
Dutch, would be an added advantage. 

This position is likely to appeal a pexson with at least five years experience in the marketing of securities 
and aged “tween 30 and 40 years, possibly a Belgian national who has worked abroad and envisages 
returning to Belgium. 

Paercam aspires to a continuing level of excellence and has recently been nominated by Euromoney as 
the best securities firm in Belgium. 

All replies will be treated In die strictest fn flfifVry o 

Interested candidate are imited to ccdlAnMSOENENcn <8/647.63.50 or aUmuUijKlj to 
tend or fax their detailed ca, qu otuig r eference Petercam, to: ROBERT HALF BELGIUM 
fa dfouian of FONTAINE* ARCHER • VAN DB VOORDE SAJN.VJ, 
arena* G4n£ral de Goalie 47, 3-1050 Brussels, faxnumber Q2/M&30.3& 

Brussels - Paris - Amsterdam. - London - New York - San Francisco ■ Toronto 

A DIVISION OF 



HIM 


MARKETER 

EMERGING CAPITAL MARKETS 

An experienced professional with 
expertise in South Africa to further develop the 
business of a top international bank 

Excellent Package > London 

Our cEent, a leading internptional bank often a wide range 
nf financial and investment banking services ip Emer gin g 
Markets. As governments and corporates in these markets 

hpgm to access the interaatl n Tial capital marlcm-* fopy 

leveraging their position and experience to lead the field. 

For their Emerging Markets (Debt Capital Markets) 
they arc now seeking a professional with wide experience 
of emerging capital markets and specific knowledge of the 
culture and commercial environment of South Africa. 

This represents a rare opportunity for a specialist to join 
one of die most prestigious houses in the market, and win 
demand the ability to identity, develop and execute his/ 
her own transactions. As well as first class marketing and 
technical skills, the role will also require die patience and 
long-term strategic judgement to focus exclusively on top 
quality deals in One with their selective approach to 
transactions worldwide. Whilst this focus wD be 
predominantly on South Africa, other regions wiH also 
come into the picture. 

Extensive travel can be anticipated, and a knowledge of 
Afrikaans could be an advantage. The likely age range is 
28 to 35. 

Please write with your cv, to Alastair Lyon, Re£945, 
Confidential Reply Handling Service, Associates in 
Advertising, 5 St John’s Lane, London EC1M 4BH. 


BELGIUM 


TISING 



INSTITUTIONAL SALES 

Formed only three years ago, Hong Kong based Regent Pacific Group has established a 
reputation as one of the fastest growing investment managers in its sector, with currently 
overUS $2 billion under management An Asian equities specialist, the company benefits 
from the continuous growth of the Asia Pacific markets. 

Regent is seeking a high calibre individual to join the London based sales and marketing 
team to service and expand the European client base. Regent's outstanding perf ormance 
record has gained recognition among major institutional investors and there is substantial 
potential for growth in both the UK and continental European markets. 


The individual we are looking for must be: 

<r A graduate with a minimum of 2 
years' institutional sates experience in 
the financial services sector; 

♦ Mature, self motivated, resourceful, ( 
organised and achievement oriented; 

♦ A team player keen to grow with the 
Company; 

♦ Possess excellent inter-personal and 
presentation skills; 

♦ Computer literature - knowledge of 
•Excel 1 ; 

♦ Knowledge of French and/or German 
an advantage; 


Attractive remuneration package. 
Please send a CV with photograph and 
details of current remuneration by post 
to: 

Sophia Shaw, 

Sales & Marketing Director, 

Regent Pacific Group Ltd, 

Aldermary House, 

10-15 Queen Street, 

London EC4N 1TX 


REGENT PACIFIC GROUP 



Asso 


FINANCE DIRECTOR 

English National Open, one of the world" t foremost repertory 
opera companies, seeks to appoint a new Finance Director with 
immediate effect. The Finance Director will be responsible to the 
Genera] Director for the strategic management of all its financial 
affairs. In addition, he or she wifi be responsible to the Board of 
ENO for the orderly and accurate presentation of management 
and statutory accounts, the institution and management of 
appropriate and effective internal and external audit procedures 
and die company's compliance with financial legislation. 

Tasks will indude management and control of budgetary systems, 
setting and monitoring strategic income targets, responsibility for 
the appointment and direction of all financial personnel, 
management of the company's relationship with its bankers, 
external auditors and funding bodies 
Essential: the highest standards of financial management and 
probity and a proven track record in the planning and control 
of the financial afiain of a substantial institution. 

Desirable: extensive accounting experience and knowledge of 
the workings of large scale arts and/or media organiations, 
particularly in the public sector. 

I Salary by negotiation. 

Applications should be made in writhig, to inefade a CV 
and «»ni toe Hw* Marita, Genera] Director, 

ENO, London Coliseum, 

St Marties Lane, London V/C2N 4ES. 

Goring date 14 September 1994. 

ENGLISH NAnONU OPERA 
AN EQl'AL OPPOXTIMT1ES EMPLOYS 


The SANDOZ Group, a world leader in a wide range of Industries 
Including pharmaceuticals, seeds, nutritional products and 
Industrial and construction chemicals, with annual sales In excess 
of Sfr. 15 billion, is looking to strengthen its Corporate Auditing 
Function through the recruitment of a number of 

International Auditors 

Standards of auditing within the Group are high, and applicants should 
possess sound business and accounting skills in order to ensure their 
proper application and maintenance. The ability to identify operational 
problems, devise solutions for the improvement of business processes, 
and monitor measures taken to protect Group assets are other important 
components of the job description. Acute commercial awareness is 
another essential, combined with personal qualities such as a persuasive 
but tactful manner! 

Successful candidates will be university graduates in their late 20s or 
early 30s with a formal qualification in accountancy (chartered 
accountant or certified public accountant) or equivalent and a minimum 
of two years 1 relevant experience. Fluency in English and/or German is 
essential, with skills in other European languages an additional asset. 
Though based in Basie (Switzerland), the position will call for extensive 
international travel. Career opportunities within the Group are excellent 
for successful performers. 

To find out more about the challenges involved, send an application and 
curriculum vitae to; 


SANDOZ INTERNATIONAL LTD 

Personnel Department 
Ref 4204, Ms M Baumii 
PO Box, CH-4002 Basle 
Switzerland 


SANDOZ 


MANAGING 

DIRECTOR 

Required by a specialist company 
in London providing development 
and turnkey services to clients in 
the Middle East and die CIS 
Candidates must hold a good 
degree in an engineering discipline. 
Preference will be given to those 
hnlriing Anther qualifications, snch 
as MBA or equivalent. 

Experience within tbe otl/gas 
industries in tbe above areas is 
essential. The ability to 
communicate fluently in English 
and Arabic is a prime requirement, 
particularly tbe ability to reattfwrits 
Arabic. A working knowledge of 
Russian, as well as French or 
Gennan is desirable. 

Salary £35,000 pins benefits 
Please reply in writing, with your 
CV to Box A2142, Financial 
Times, One Southwark Bridge, 
London SE1 9HL. 


SENIOR CORPORATE TRADER 
FOREIGN EXCHANGE 


Macquarie Bank limited is a substantial investment bank headquartered 
in Australia and strives to maintain creativity and innovation. The 
expanding London branch specialises In corporate finance, 
stockbroking, options, fixed Interest, bullion, base metals and foreign 
exchange. 'Euromoney' voted Macquarie Bank Limited the best 
investment bank in Australia for 1993 and 1994. 

We are now seeking to recruit an experienced Corporate Trader to join 
our Foreign Exchange team in London. In addition to possessing 
excellent inter-personal, social and presentation skills, the successful 
candidate will be able to demonstrate the Growing: 

• minimum of 3 years experience in the foreign exchange market 

• an established Australian Dollar product dicat base 

O proven knowledge of foreign enehangg (spot & forward) and 
option theory 

This position offers an attractive remuneration package including 
bonuses and applications should be made, providing full career details 
to; 

Tracy Fiddboose, Personnel Officer 

Macquarie Saak Looted INljN) 

69-70 Maris Lane 

Loudon EC3R7HS Macquarie 

RANK 

AH applications will be treated in the strictest mwfiHanri. limited 



They use the FT. 


Senior business people all over Europe use the FT 
throughout their working week. 

They use it to keep up with the news, views,issues 
and most importantly the opportunities. 


So for key national and international appointments, 
using the FT gives them a wider choice of the top jobs. 

Today Europe is the job market and the FT, Europe's 
business newspaper, is where to find it. 


For more information please call Elizabeth Arthur on +44 71 873 3694 

FINANCIAL TIMES 1 

EUROPE’S BUSINESS NEWSPAPER i 






30 


FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


COMMODITIES AND AGRICULTURE 


LME al uminium 
prices surge to 
3‘/2-year highs 


Strike to 
force cut at 
Australian 
smelter 


By Richard Moon e y 

Aluminium prices reached 
3Vi-year highs at the London 
Metal Exchange yesterday as 
traders anticipated ftirther 
improvements in the market's 
fundamental picture. 

Expectations that the multi- 
lateral pact agreed earlier this 
year to cut output would con- 
tinue to eat into stocks of the 
metal, already bolstered by 
Wednesday’s news of threat- 
ened power cuts at Kaiser’s 
Ghanaian smelter, were given 
a ftirther fillip fay the likeli- 
hood of a potline closure at an 
Australian plant (see adjacent 
story). 

The helped the LME’s three 
rrinntHg delivery price to break 
through the resistance area 
around $1,550 a tonne to touch 
91,570 before closing at $1^64, 


up 929.50 on the day and £51-25 
on the week so far. 

“The move on aluminium 
today was always on the cards 
considering recent news of pro- 
duction problems and improv- 
ing charts,” one dealer told the 
Reuters news agency. Trices 
are now set to go higher-" 

As cots under the multilat- 
eral pact have worked through 
imr stocks of aluminium have 
declined by more than 200,000 
tonnes, or 7.5 per cent, from 
the record level reached on 
June 10. Producer stocks have 
also shown a subst an tial fail in 
recent months. And with devel- 
oped economies moving out of 
recession Humand for alumin- 
ium is generally expected to 
pick up quite stro n gly. 

“We may be on for levels 
around $ 1,600 soon,” the dealer 
told Reuters. 


Australia's largest ai n m t irimn 
smelter, Tomago, would dose 
down one of Its three potlines 
on Monday because of a strike, 
hrrman resources manager Mr 
Graham Taylor said yesterday, 
reports Renters from Sydney. 

Closure of toe 160 pots in 
Potline Two at toe smelter 
near Newcastle in New South 
Wales would reduce annual 
production by 80,000 tonnes to 
260,000 tonnes. 

“The decision was taken 
purely on health and welfare 
considerations for our staff 
who are keeping toe other two 
potlines operating during toe 
strike," Mr Taylor said. 

On August 12 some 700 
workers wait on strike in sup- 
port of a demand for an 8 per 
cent pay rise. Mr Taylor said 
the striking workers voted at a 
meeting yesterday to continue 
toe stoppage indefinitely. 


‘Big livestock cuts needed to 
meet EU pollution targets 9 


By Deborah Hargreaves 

Livestock numbers in the 
Netherlands, Belgium and Den- 
mark would have to be cut dra- 
matically if the European 
Union was to reach its targets 
for reducing nitrate concentra- 
tions in d rinking water, Mr 
Bob Crabtree from the Mac- 
aulay Land Use Research Insti- 
tute, told a conference In Aber- 
deen yesterday. 

He cited a report from the 
US Department of Agriculture 
forecasting that livestock 
herds would have to be cut in 
the Netherlands by 65 per cent, 
in Belgium by 28 per cent and 
in Denmark by 9 per cent over 
eight years. 

The ents would have to 
occur if producers, particularly 
in intensive farming regions, 
were unable to dispose of their 
slurry and an n u al manure in 


COMMODITIES PRICES 


an environmentally acceptable 
friendly way. 

“Concern with water pollu- 
tion from chemicals, nitrates 
and phosphates has Increased 
during the last decade, particu- 
larly in the more intensively- 
f armed areas of Europe," Mr 
Crabtree said. 

The EUs nitrates directive, 
which was published in 1991. 
advocated setting up nitrate 
vulnerable zones where restric- 
tions would be placed on the 
timing and quantity of organic 
manure disposal. The Minis try 
of Agriculture has proposed 74 
zones for the UHL 

Mr Crabtree said the cre- 
ation of the zones would place 
a heavy and expensive burden 
on many livestock farmers. 
“Some intensive units will 
need to invest in increased 
storage facilities for slurry and 
manure while seeking ways to 


dispose of waste over a wider 
area than has been nw-wMeir y 
in the past.” he said. 

He also called for increased 
research into technical solu- 
tions to the use of farm waste, 
other than the traditional 
spreading of slurry and 
manure on the land 

In countries such as the 
Netherlands and Belgium 
where intensive farming was 
more widespread, the impact of 
the nitrates directive could 
erode some competitiveness, 
Mr Crabtree suggested. But he 
questions whether that would 
be politically feasible. 

“There will undoubtedly be 
an erosion in the competitive 
position of designated areas 
and a progressive transfer of 
production to less vulnerable 
areas as fixed investments 
depreciate and need replace- 
ment,” he said. 


Show-piece diamond mine 
shares the market’s strain 


By Kenneth Gooding, 

Mining Correspondent, 
in northern Ttarawaal 

Turbulence in the global 
diamond markets is being felt 
even here at Venetia, De Beers' 
newest diamond mine, 30km 
from South Africa’s borders 
with Botswana and Zimbabwe. 

Only weeks before the mine 
came into production in July 
1992 at a cost of US$400m, De 
Beers' Central Selling Organi- 
sation. which controls 80 per 
cent of world trade in rough 
(uncut) diamonds, imposed 
quotas an its producer-suppli- 
ers because of a flood of gem 
stones from Angola. For a time 
Venetia, the firat urine of any 
sort in Smith Africa to gain 
permission for seven-day work- 
ing, moved to a five-day week. 

This year It has gone back to 
seven-day working as the quo- 
tas were eased so that the CSO 
is now accepting 86 per cent of 
the diamonds it contracted to 
take from producers. However, 
tome is still turmoil in toe dia- 
mond market, caused by uncer- 
tainty about Russian exports 
following “leaks” of stones 
from that country outside its 
contract with the CSO. 


Consequently, Mr Harw Gas- 
trow, general manager, says 
that thin year Venetia will pro- 
cess 4 tonnes of ore, 6J5 per 
emit below its capacity. It is 
aim wiiniTig an area of lower 
grade ore, which has fewer dia- 
monds in each tonne. 

' Mr Gastrow is giving no fore- 
casts but all this implies that 
output wfll be well below the 
5.6m carats a year De Beers 
predicted Venetia would yield 
at full production. 

T-ac* year the wring, b linding 
up rapidly, more than doubled 
output and processed 3.6m 
frames of ore to recover 49fin 
carats. About 70 per coot of 
Venetia's diamond^ are of gem 
quality and analysts suggest 
that at $100 a carat on average 

Hip minn is gene r ating annual 

sales of about 9600m. 

Mr Gastrow says that, apart 
from the imposition, of the CSO 
quota, Venetia quote has mpde 
a remarkably smooth transi- 
tion from construction to pro- 
duction unquote. This year will 
be a time of consolidation. 

He insists that time quota is 
having no impact on employ- 
ment Nevertheless, Venetia 
originally was to have 
employed 870 and it now has 


764. A mine of Venetia’s size in 
the past would have employed 
2,000. The total has been kept 
down here partly by highly 
automated process plant but 
also by “fewer people employed 
just to see that other people 
are doing their jobs”, according 
to Mr David Gadd-Claxfrm, ore 
extraction manager. 

Venetia was the first new 
South African diamond mine 
for 25 years. It is also the coun- 
try's* biggest diamond wiip g 
and a major contributor of 
export earnings. 

The mine has also revitalised 
De Beer's production, as it is 
ac mmiHng far half the group’s 
output in South Africa and 
replacing production from its 
100-year-old Kimberley mines, 
which are now fading away. 

Venetia's success is strategi- 
cally important to De Beers 
because, when its output is 
added to that in Botswana and 
Namibia, it gives the g roup 
direct control over more than 
50 per cent of world rough gem 
diamond output- This provides 
a major base far the CSO to 
work from and gives it a pow- 
erful position from which to 
negotiate with other producers 
in. the diamond cartel. 



Some highly Innovative Ideas are being tried at Venetia 


And, while Venetia is using 
conventional methods to mine 
about 500m tonnes of waste 
and to mtofl aryl process 100m 
tonnes of are ova: Us projected 
23-year Ufa, it is trying some 
highly Innovative ideas about 
labour relations and tmyl ro n- 
mahtal jaanaa, at leant a« far an 

Sooth Africa ls concerned. 

For example, there are no 
migrant workers at toe mine. 
Employees are bussed in from 


nearby towns for twelve hour 
shifts and then return to their 
families. Venetia Is also break- 
ing with the De Beers' tradi- 
tion that, fear security reasons, 
no equipment leaves the mine 
but Is hurried within the top 
security area once it is- no lon- 
ger useful. Here worn out 
equipment will be stockpiled 
and sold off when the mine 
doses. It could be worth mQ- 
llrmc of dollars. 


World timber shortage hitting British sawmills 


E|y Deborah Hargreaves 

A worldwide shortage of 
timber is pushing up prices for 
logs in the UK and leading to 
supply dislocations as sawmills 
straggle to secure their raw 

mfltprialfl- 

Many British sawmills are 
trying to run their plants at 
double shifts to cope with the 
increase in demand, but are 
having difflcnirieg getting lurid 
of logs. 

The Forestry Commission 
reported a 9 per emit rise in the 
price of standing timber in the 
six mouths to the aid of March 
as demand picked up when the 
economy began to emerge from 
recession. The commission also 
said that softwood log prices 


increased by 16 per cent in the 
year to the end of March. 

“We’ve almost certainly seen 
prices high nr than that in the 

past five months - just judging 
from the timber we've sold,” 
said Mr Martin. Wfikmson, for- 
estry operations director at Til- 
hm Economic Forestry, a divi- 
sion of Booker, which manages 
12 per cent of the UK's priv at e 
woodland. 

The UK, which ranks the 
eighth largest consumer of 
wood and wood products in the 
world, produces only 14 per 
cent of its own requirements 
domestically. Its import bill for 
logs from Canada, Scandinavia 
and Russia among other sup- 
pliers amounts to nearly £7bn. 

Bnt imports are dropping off 


after reaching a peak in 1989 as 
environmental concerns world- 
wide restrict the harvest of 
natural forests. The value of 
timber imparts to the UK has 
declined from ELOfan in 1989 to 
£6bn in recent years. 

In addition, growing con- 
sumption of wood in many 
developing countries has led to 
fewer exports. 

Mr Ian Mostey, president of 
the Timber Packag in g and Pal- 
let Confederation said makers 
of wooden pallets had seen 
their wood costs increase by 20 
per cent over the past six 
months due to timber short- 
ages. 

Pallet makers are in competi- 
tion with the construction 
industry and fencing manufao- 


BASE METALS 

LONDON METAL EXCHANGE 

(PrtCM from Amalgamated Metal Tracing} 


Precious Metals continued 

■ GOLD COMEX pOO Ttay eg.; Vtroy azj 


GRAINS AND OIL SEEDS 

■ WWIATLCEF per tonne) 


SOFTS 

■ COCOA LCE (E/honna) 


Caah 3 mlti* 

Oosa 1538-8 1563-6 

Provtoua 1505-6 1534-6 

wgMow 

AM oncu 15103-1 1540-05 

Kart don N/A 

Open int 274.155 

Total daly tummw 56037 

■ ALUMNBJM ALLOY (Ipwtonna) 

Oon 

1550-60 

1576-00 

Provtoua 

1665-80 

1573-5 

H0MOW 



AM Official 

1540-50 

1585-70 

tab doaa 


N/A 

Opon Int 

2.771 


Total datfy tumovor 

783 


■ LEAD ($ pvtonna) 


doaa 

6010-20 

618-7 

Provtoua 

5805-900 

609.5-6 

WQhrtcr* 



AM Official 

688-7 

5100-1 

tat> doaa 


N/A 

Opan Int. 

40020 


Total CtaVy tumovar 

12.062 


■ MCWO. (S per tonw) 


Cloaa 

03*5-55 

0435-40 

Pnpvtoua 

8106-75 

0250-00 

MKjh/low 



AM OfflcHl 

8280-2 

8373-5 

tab doaa 


N/A 

Op«n mt. 

54080 


Total daly tunovar 

17070 


■ TW |S par tonnM 



Ctoaa 

5400-5 

5470-5 

Provtoua 

6375-85 

6405-00 

HaMow 



AM OfficW 

UK8B 

5470-00 

tab doaa 


N/A 

Opan Int 

17.424 


ToM Uaffy tumovar 

4.401 


■ ZNC. apaotal M0h prods (3 par torma) 

Ctoaa 

983A-4.5 

1000-7 

Provtoua 

9710-2.5 

995-0 




AM OfficM 

981-10 

1003-30 

tab doaa 


N/A 

Opan Int 

950*8 


ToW dadjr WIXMT 

19.683 


M COPPER, aroria A B par «a«M| 


Ctoaa 

2*884 

2607-6 

Provtoua 

2499-500 

2509-10 

■ — - ■- m - - 

rVBnrmw 



AM Official 

2400-1 

2499-600 



ua 




Qpao 



San 


Opa* 



tat 

Dag's 


ta- 




ptoa 

changa 


to* 

M 

ML 


prica (bap Mgh La* 

tat 

Vaf 


prioa i 

tap 

>000 

la* tot 

M 


Sffi 

3880 

+00 

- 

- 

812 

590 

»to« 

10450 

- 10440 10400 

257 

22 

tap 

878 

+3 

982 

875 2009 

241 

Oet 

Oct 

3883 

+00 

3983 

8070 

8.187 

1,152 

tar 

10555 

+035 10505 10400 

2.480 

124 

Dae 

1010 

+2 

1022 

- 1007 30038 1009 

Ok 

Nav 

3890 

+00 

- 

- 

- 

- 

JM 

10705 

+030 10700 10735 

1,785 

« 

tow 

1044 

+6 

1045 

1038 81081 

229 

m 

Dm 

3813 

+00 

381 A 

3880 89038 28,122 

liar 

10905 

+040 10000 10900 

1,104 

1 

Mar 

1058 

+0 

1056 

1060 11017 

80 . 

Hr 

R* 

3945 

+00 

3845 

3830 13310 

37 

■w 

11100 

+030 11100 111.10 

1,102 

10 

JH 

ion 

+5 

. 

- 5018 

- 

Jro 

fer 

3970 

+00 

3970 

3970 

0087 

50 

Jri 

11375 

+040 

177 

- 

tap 

1081 

+10 

1000 

1077 '8071 

' 16 

tao 

Total 




1BA483 30490 

Triri 



0081 

228 

Triri 




10230* 2005 

Triri 


■ PlJV71WimirmigXgQTyDyoz^<ftroy atj 


net 

4104 

+1.1 

4180 

4140 18024 

2.402 

JM 

4190 

+13 

4200 

4170 

5074 

387 

tar 

423J 

+13 

4230 

4220 

1038 

87 

JH 

4273 

+13 

- 

. 

452 

20 

0c! 

429.7 

+13 

- 

• 

m 

- 

Trial 





25091 

*002 

■ PALLADAM NYMEX (lOOTroy oZj Vtroy at) 

*K 

152JO 

+0.15 

15200 

15150 

904 

152 

Ok 

15450 

+040 

15450 

15175 

5007 

779 

tar 

15500 

+005 

15500 

15425 

651 

57 

TPM 





8082 

990 

■ SlLVOl COMEX (100 Troy az; Centa/troy ce.) 

tap 

5420 

-10 

5440 

5400 

3001 

2005 

Ocl 

6450 

-10 

- 

. 

s 

2 

Mot 

5470 

■L7 

- 

- 

. 

. 

Dk 

5*90 

-1.7 

5610 

5470 04007 23420 

Jh 

6510 

-1.7 

5510 

5510 

58 

to 

tar 

557.5 

-13 

5680 

9550 

8487 

13S1 


■ W1 C AT CUT tsroobu min; centriBOto bushel) ■ COCO* CSCE ft O tonnes; Vtonnea) 


Trial 


hmm aum 


ENERGY 

■ CTMgOfcWYMgUgWOlBMfcSlgwge 


Oci 


M 

Mar 

Total 


Fin d 

17JZ +0.18 18.00 
17J4 +8.17 17.78 
17.73 +0.15 17.78 
1777 +0.1 B 17.78 
17.72 +0.14 17.72 
17J* *0l15 17J4 


Hgk law 


tt M 

17J56 94JM 56.HO 
17.58 58.384 23,724 
1700 47.989 12,432 
1788 32.487 7.972 
17-68 19017 1314 
17-74 HUB 875 
387/Bf I07JS3 


tap 

306/D 

+2/4 

360/4 

36174 2710 

3,182 

Dec 

3O0K 

+1/4 

383/4 

370/4 4«85 12019 

to* 

387/2 

+W2 

390/4 

365/D 16019 

2,103 

tap 

38QID 

+2/4 

38ZA) 

377A) 1084 

159 

Jri 

35616 

+0/4 

357/4 

353A) 2.482 

732 

Ok 

3684) 

+3/4 

- 

30 

15 

Tatri 




7D0B7 UL111 

■ MASK CUT (5000 bu mto; oartaffiOto buahaQ 

tap 

221 AS 

+1/0 

222/0 

Zlflfi 13029 

9559 

Ok 

223/2 

+0/4 

722/A 

220/6128042 13000 

to* 

232/4 

+0/2 

233A) 

230/2 29096 

1077 

tajr 

239/D 

+0/9 

230 a 

237/0 11057 

320 

Jri 

243/2 

+0M 

243/4 

24170 11046 

557 

tap 

24730 

+1/2 

247® 

2450 944 

sr 

Trial 




281,100 29322 

■ BARLEY LGE CC par tonne) 


tap 

10330 

+0.15 

10330 

10300 91 

23 

Hot 

10430 

+006 

10430 10400 473 

51 

Jk 

106.10 

+030 

10800 

10500 315 

30 

■it 

moo 

- 

- 

n 

• 

■TO 

11000 

- 

• 

21 

. 

TOM 




888 

104 

to SOYABEANS (XT (50OOM ntacaririSObboabal 

tap 

saw 

-OI2 

582/4 

STB/D 6.5BB 

3048 

Not 

574/D 

+ 0 a 

. 574/8 

570/3 77J02 

18.419 

Jh 

sou 

- 

582/2 

578/2 14JV8 

2.101 

Mar 

sn/D 

-0/2 

091/0 

587JD 6.115 

034 

■tor 

508M 

-w 

597/4 

593/4 4048 

403 

Jri 

0O1B 

-Off 

602/4 

58M 702S 

030 

Trip 




119098 29068 

■ SOYABEAN OO. C8T (OOJIOOtoc c*rtt*/*j) 


MEAT AND LIVESTOCK 

■ LIVE CATTLE CME (40000938; cent***) 

Sail Day-a Opn 

pita dnapa !*» la* W W 

71.875 +0825 72.100.70825 »03B 5y446 
68-625 +0550 80875 89025 17,0*1 2J61 ' 
68.400 +0350 68000 87050 11000 833 

70200 +0025 70.400 88000 7.781 727 

67025 +4U75 07000 60079 1088 100 

80025 +0.125 07.175 08J5D 835 215 

78008 10080 

■ LIVE HOGS CME (400009*; cantaflba) 


1325 

+20 

1330 

ISM 211 . 05 

Ocl 

384100 +0325 80000 80300 11001 

3001 

1372 

+15 

1377 

1355 41085 6080 

Bac 

31725 +0275 39000 30025 

8/30 

1022 

1*15 

+15 

1*17 

1396 12096 1.182 

fa* 

8fl900 +0325 39*4) 89000 

3001 

932 

1440 

+15 

1443 

1430 3004 181 

tar 

39.100 +0.126 88300 36050 

1007 

385 

1402 

+16 

- 

- 2<78 7 

Jh 

44300 +009} 44400 44050 

584 

1» 

1482 

+15 

- 

- 1005 

tao 

43.175 +0025 43330 0 

54 

10 




78004 70B8 

Trial 


77042 

*77! 


■ OOOOMCCO) (StWa/tonne) 


D* 


. SI 


.102874 


■ COFfEE ICE (S/torno) 


103573 


3885 

+20 

3900 

3300 

4030 

277 

3805 

+32 

3010 

3710 12090 2J80 

3748 

+35 

3750 

3380 11064 1003 

3008 

+24 

3880 

3830 

5014 

181 

3858 

+10 

3830 

3015 

1079 

6 

3055 

-10 

3625 

388 

S3 

3 


Triri 

■ rams V CSCE g70OO9>8; csnteflta) 


4019 


■ PQRKBaa^Ca4E(4Q^XXlB3^O^tiv0b^ 

fta 43225 +0300 43050 42700 7293 2008 

tar 43.175 +0275 43075 42050 450 104 

tar 48000 +0000 44000 43.190 70 17 

Jri 44000 - 44000 44200 138 13 

tag . 42000 - 31 T 

IMS 7088 8245 


LONDON TRADED OPTIONS 

priodStoow — Cota Puts — 


20(75 +100 30300 20425 386 104 

212.10 +120 21475 20000 22.794 8008 

21500 +170 21700 21325 8068 885 

218.40 +100 21850 21400 2084 107 

217J0 +100 - - TIB n 

21820 +106 - • 407 2 

34087 1008 

PCO) (US oenta/p<mnd| 


■ CRUDE 08. IPE tf/banaQ 


Kaib < 

Open mt 213085 

Total drily turnover 80084 

■ LME AM Official £J* rotas 10383 
I 03 mw N/A 


S0OC10M5 3*8*1 5*28 BM*103B3 9*0*10345 
■ HUH QRAOC COPPER KOMEX) 



OKI 

DW*a 

amm 

Mgb 

to* 

Opn 

tot 

M 

ah 

11400 

+120 

11300 

11200 

7044 

2259 

•h 

11585 

4L65 

11700 

115A5 

10*4 

142 

Dot 

11400 

.106 

116.70 

11450 

807 

10 

Hot 

11400 

■1j4S 

- 

- 

31.700 

2087 

Dk 

11420 

-105 

11613 11410 

421 

1 

JH 

11170 

■100 

11500 

11400 

272 

. 

Trial 





46271 

0047 


PRECIOUS METALS 

■ LONDON BULLION MARKET 
(pwcaa K«m4od by N M Ftortnc haft 



lAtoat 

Dafa 


faK 



*to# 

cbaoaa 


La* M 

M 

Oet 

1649 

+O.I3 

1608 

1040 01025 23,107 

Hov 

1664 

+0.12 

18.83 

ia« 31004 

MW 

Dae 

1655 

- 

1BLS6 

1804 18,441 

2JGBB 

Jh 

1608 

+008 

1600 

1600 8003 

1004 

Fab 

1647 

+ 0.00 

1004 

1047 4,401 

4S7 

tar 

16.49 

+005 

1000 

1044 4011 

200 

Trial 




138000 37003 

to HEATINa OH. NVri» (42000 US gafe. oils gtaj 


Lahat 

Dura 


0P« 



lafai 

ctanga 


la* U 

M 

Od 

5006 

+001 

5020 

4825 <2016 22.420 

Not 

5000 

+078 

5005 

SOUS ZQ068 

5083 

Dae 

5105 

+088 

3105 

3100 3SJH7 

5.754 

JH 

5205 

+096 

5200 

5225 20054 

4,460 

Tab 

52.60 

+025 

- 

• 0780 

727 

tar 

5100 

+021 

- 

- 8JS3 

Z77 

TPM 




102088 33085 

to QAS OH. FE total* 




CM 

Dafa 


Op* 



prtca 

cfcaaga 

Hob 

la* H 

W 

tap 

15200 

+025 

13000 

15125 2409 

3078 

Oct 

is&w 

- 

15000 

15400 24022 

3«n 

Not 

13700 

-025 1S80O 15700 12070 

432 

0k 

15905 

■005 

18000 

15800 10,779 

1009 

JK 

16050 

-02S 16105 16025 12.050 

947 

rob 

16000 

■075 

16100 

16000 4060 

28S 

TMri 




105082 

9007 

• NATURAL GAS NYMEX (10000 nnafitiL; XAomBBl) 


tap 

2501 

-ML33 

2503 

2497 10.453 

3015 

Ori 

25.15 

+002 

25.18 

Z404 18,432 

4063 

Dk 

2400 

+0.18 

2403 

24.63 36021 

6022 

0* 

2401 

+0.14 

2400 

2405 

5052 

231 

to* 

2409 

+009 

24.75 

24.45 

60GB 

542 

tar 

2408 

+ai3 

2408 

2403 

4021 

271 

Trial 





82084 13021 

to SOYABEAN MEAL CUT {100 tons; S/tan) 


tap 

1730 

. 

1730 

1725 11097 

3/448 

Ori 

1710 

-00 

1710 

1710 

13.167 

1003 

DK 

172.4 

-4L2 

1727 

1710 36732 

4091 

ahU 

1730 

-0.4 

1737 

1710 

6052 

779 

Ikr 

1750 

-as 

1780 

1750 

7080 

448 

tar 

1770 

-Ojt 

1770 

1760 

4023 

316 

Trial 





83792 11038 

■ POTATOES LCE (Enoma) 




II* 

1600 

. 


. 

. 

_ 

Itar 

1050 

to 

. 

. 

* 

. 

A* 

2130 

-110 

777 n 

2130 

1,267 

273 

tar 

2400 

- 

- 

* 

. 

- 

Jh 

1070 

- 

m 

_ 

. 

. 

Tabrt 





1767 

215 

to FREIGHT (BS=FEX) LCE (510/lndH point} 


SH 

1403 

+48 

Ma 

1428 

029 

55 

Oct 

1461 

+30 

M6i 

1436 

871 

51 

now 

1485 

- 

1483 

1450 

* 

23 

Jh 

1458 

+18 

I486 

1450 

522 

22 

Hr 

1470 

+10 

1470 

1480 

160 

a 

M 

1383 

-12 

- 

- 

60 

- 

Triri 

Oon 

PM 





■H 

1439 

-KM 






*08.31 
On®. 
15 1 


.19300 


.15104 


19407 
17840 

■ No7 PREMIUM RAW 9UOAR LCE (conte/lbs) 

Oct 1204 -0.14 - - 1001 

Jk 1102 

tar 1224 -0.14 

TOM 

■ WHITE SUOMI LCEgtonnri 


90 

1001 


QofeJ (Troy oi) 
Cion 
Opriwifl 
Meaning R* 
Afternoon fa 
Oa/sWflh 

Day's Low 
Previous doaa 


i prtca C eqtfv. 

385.00-39500 30630-38 

38000*300.70 

396.00 251220 

38600 251090 

396.40-388.QC 
385.60-388.00 
38600-38600 



talari D^a 


Opn 



pitoa ctapot 

«* 

la* U 

Yel 

Oct 

1020 +0.(04 

102 

1-571 29078 

6011 

Hot 

1445 +0420 

1455 

1415 15,487 

2051 

0k 

2065 

2060 

2060 23017 

2095 

Jk 

2.100 +0005 

2105 

2090 14.644 

1.100 

to 

Z.GS5 +0010 

2445 

2030 11041 

662 

m* 

1006 *0013 

2405 

1095 8,750 

239 

Trill 



MO0OO 15025 


Oct 322.10 -1.10 32300 32200 8078 1087 

Dae 32030 -000 32100 32000 1030 188 

tar 31900 -100 32100 3flU0 502G 124 

tar 31880 -000 321 00 32100 538 24 

*8 32100 -020 32100 32100 405 47 

Oct 30000 +000 - - 200 

Total T70H 1,430 

■ WAR 11' CSCE (1120009*; cante/faj 

Oct 1205 -009 12.13 1203 52090 7001 

*w 12.10 -008 12.18 12M 80407 8047 

tap 1206 -0JS 12.10 1205 10042 874 

Jri 1107 -0.10 1203 1107 4030 431 

Oct 1102 -aid 1102 1101 1050 101 

tar 1100 -0.10 1100 1100 494 10 

TOW 13203817054 

■ COTTON NYCE £500009*! oeTO*/**) 

Oet 8975 +090 8978 6806 4,143 SZO 

0k 8873 +007 6000 8507 28007 4007 

II* 7005 +0.15 7020 6940 9021 438 

Hay 7105 +003 71.10 7050 4087 348 

04 7175 +025 7100 7140 3481 S3 

OH 8800 -005 6805 8985 414 8 

Trill 

■ ORANQ6 JUICE NYCE (1600093* cantatas) 

Sap 0108 -005 92.10 9100 1481 1.791 

tar 9505 - 9615 9500 4784 1,421 

Jan 0900 +005 9905 8630 4/22 SS9 

Mr 10000 +425 10100 10200 2003 9 

May 10505 - 10900 10500 055 

Jri 10500 • 10900 10600 470 1 

Triri 20,112 30S 


(99.734) LME 

Oct 

Jan 

Oet 

Jan 

1500 

66 

110 

17 

39 

T62S 

60 

95 

25 

48 

1660 

37 

81 

37 

58 

to COPPER 





(Grads A) LhC 

Oet 

Jan 

Oct. 

Jh 

2400 

127 

1S3 

IS 

64 

2430 

OO 

123 

28 

74 

2500 

61 

98 

40 

87 

to COFFKICE 

Nov 

atel 

Nov 

•tan 

3600 

340 

462 

144 

304 

3060 

319 

427 

164 

329 

»mn 





to COCOA LCE 

Dae 

Mar 

Dec 

Mar 

irmn 

09 

108 

S3 

53 

ifwn 

48 

83 

62 

82 

1100 

32 

64 

118 

116 

to BHBIT CRUDE H>E 

Ori 

Nov * 

Ori 

Nov 

1B0O 

71 

_ 

10 

_ 

I860 

3S 

63 

30 

-- 

1700 

20 

60 


- 


LONDON SPOT MARKETS 

■ CRUDE OB. FOB feer bernKXa} +or- 


Loop lain Man Odd Lancing Ratal (Us USS> 


■ UNUEAOEO OMSOUNE 
WWffX <42000 US gte; BUS grill 


2 monrtri 

Snorri* . — 

402 12 months 4.00 

..408 


Utori 

Prt* 

Si 

Writ 

Ik 

SSvor Rx 

p/troy oz. 

US Cts equ/v. 

Ori 

4055 

+633 

4075 

4420 

Sp« 

351.66 

S4C.15 

Not 

4405 

+0.15 

40.10 

48.70 

ainonlta 



0k 

5110 

+005 

5540 

5500 

6 months 

38100 

55800 

Jk 

5*70 

+aia 

54.15 

5815 

1 YW* 

374.30 

508L7O 

tab 

5*00 

+000 

5400 

5400 

QoMCoto* 

ftugnrond 

Maple Laaf 

New Sovarrign 

S price 
391-384 
30600^39925 

90-03 

Caquiv. 

258-258 

50-62 

tar 

Triri 

5500 


mm 

5W0 


M 


74 


Wool 

Prioes at arias Ms weak conftued Dm risa 
"Men has ch ara cterised Dm 1994435 Baling 
■aainn. wtth auctions ratumsd hi afl primary 
mataats dtfng the post flva wadca. There has 
atao bean good daman* tor Autndai stocK- 
pia wool writ dapoafc tar oneerire the 
present monthly (bead geftedub. Buying interest 
strasciiBB writ town], with Inroads now bring 
mode Wo Dm months from Januny onwa rd s 
when ttockpte aataa aril be ta4ce ttia peasant 
nta The riring wool price frsnd ta afao bringfrg 
out Handy burinass In wool taxffia sarahmanu- 
taeturae, though thaw ta conridereb to price 
ra ata ta n ca and raw wool ma rtee ta are shearin g 
maw buoyancy than appfaa tattler down Dm 
m an uf a ct u rin g Una. The Australian Eastern 
etas* ma ri t a l Meritor ended Dm weak a* 
739c/i«g, com pered wtth 728c/kg a. weak 


VOLUME DATA 

Open Interest and Volume data shown tor 
oa n t i afla traded on COMEX, NVMGC CST. 
MyCe. CME, CSCE and IPE Crude Ol are one 
day In 


INDICES 

■ REUTEMHBaw 1W81»«10W ‘ 

Sap 1 Aug 81 month ago year ago 
■20BR4 21(71.7 2096* 1628.1 

■ CRB Ritiaas (Ba»* 1967=100) 


Dub* 

*15.40-5.41 1 

+4X185 

Brant Blend (dated) 

8(600-002 

' +0015 

Bront Btand {Ori) 

*1643-6.48 

-0055 

W.Ti (1pm oat) 

*1708-707 

•4X100 

■ OB. PRODUCTB NWEpnanpt dalvary OF Burma) 

Rrandum OaaoBrn 

*189-100 


Gas 06 

*153-165. 

+4X5 

Hanvy Fuel OO 

. *74-78 

-20 

Naphtha 

*160-181 


Jri tori 

*160-170 

+20 




■ OTHER 



Gold {pOTlroy eoHf 

$38600 

-025 

Saver (par buy 02)4 

543.00 

+100 

PtoUnun [per trar csj 

*41300 

-0.15 

Patarium (par trey at) 

SI 5200. 

+080 

Copper (US prod) 

1210c 

+30 

Land (US prod) 

37.750 


Tin (Kwria UngM) 

1300TO 

+001 

Tin (New York) 

2320c 

+10 

Cflfflftffv* maigliQIO 

115L68P 

-4L75* 

Sheep (8v* welflMH^C 

8702p 

-207* 

ftgs gw wrighQB 

75.770 

-3.18* 

Lon. day augar (eaa4 

$307.00 

+4X60 

Loa dqr auoar (wtri 



Tate & Ly* export 

£31200 


Baby (Eng. feed) 

£1070* 


Mato* (US No3 Ya9o*J 

*1400 ' 


Wheat (US Oak Nortt} 

£1800 


Rubber (0ca)V 

800Op 

-100 

RriMr(Nov)V 

680Op 

-100 

Rubber KLRSSNol Aug 

3180011 


Coconut 06 (PROS’ 

farw/V 


Rafra Oi (Matey.)§ 

36400* 


Copra (PW59 

*1160 


Soyabeans (US) 

eiasjhi 


Cotton Oubootr ‘A 1 Mbx 

7606c 

■4X7D 

Wodtopa (64s Supar) 

484p 



Aop 31 Aug 30 

232.11 23106 233.18 21807 


8 par temiMtaa Mbawriaewaiait p panoa/kg. coaow/fa 
r itiuriUlai. in MUtayrian csdsAa. a tMJan. (OcLiSepf 
OcL w Dip , f Isnkn Wuw ri 5 OF ftamtam. 4 
Bataai markat dots. 9 Sump (Uva 'mkfa pnoaaL - 
cmhbs tai waric. O Mesa an lor pe*MS ripe. 


hirers for tight timber sup- 
plies. “Pallets play a vital part 
in Britain’s export drive. This 
timber shortage will make toe 
export drive falter and higher 
pallet prices could make 
exporters less competitive in 
foreign markets,” Mr Mosley 
said. 

As more British tree planta- 
tions reach maturity , the UK is. 
expected to become more 
self-sufficient in wood produc- 
tion - it should be able to sup- 
ply 27 per cent of its needs by 
2010. 

Mr WiDtinsan expects timber 
output in Britain to reach a 
peak in 2025 when production 
should touch 20m cubic metres 
a year, but by then demand 
will have grown from a current 


55m cubic metres to 76m cubic 
metres. 

The government recently 
introduced a new incentives 
package for landowners to 
plant commercial trees, but Mr 
Wilkinson believes it is 
insufficient to compete land for 
agriculture - the. value of 
which is buoyed by European 
Union subsidies. 

“There is a lot of agricultural 
land which is eminently suited 
to growing conifer trees, if 
farmers were given incentives 
to plant trees on set-aside land, 
we could grow a lot more wood 
than we do now,” he said. 

Trees need to be.planted now 
for harvesting in 30 years or 
otherwise many plantations 
will reach their peak and than 
ontnut will dnm off. 


CROSSWORD 


No.8,548 Set by HIGHLANDER 



Across 

1 Was allowed to go round and 
. create barren area 0 ) 

6 Stalks an. toe way, 

(5) 

9 In some versions her niece 
used to select numbers ( 5 ) 

10 Temporarily stopped hanging 
<9) 

11 Let off and allowed to go GO) 

12 B efore a National Trust 
enquiry starts (4) - 

14 Topped. Hke Canutes 1? CO 

15 Came into contact with a lit- 
tle cuckoo (7) 

17 Tour mischievous dwarf is 
number one ( 1 ) 

19 Little woman clutches con- 
tainer for eggs? Pardon! (7) 

20 fire and pfltege (4) 

22 Fractured feathers are not 
working (M) 

25 Delay fixed allowance far wor- 
ship (9) 

26 Dislike extracting lead from 

mwtslliri dmwnt ( 5 } 

27 Negotiate a special surprise 

<5) 

28 Were tease, scattering sugar 

(9) 

DOWN 

Z Uise o riental in natural envi- 
ronment (5) 

2 Beach area with high quality 
sedimentary ruck (9) 

3 First nine have aided badly 

balanced (4-6) 

4 Certain to be seif-confident ( 7 ) 


5 Fall of the French conveyed 
in speech (7) 

6 Soaks up goulash (4) 

7 Thin Icing man's sculptor has 
bar at home. (5) 

8 Married? Yes and drunk for 24 
bouts' (9) 

13 Sprinting not allowed -. it’s 
coming to an end (7,3) 

14 Bad-tempered worker swal- 
lows ora bread roll (9) 

16 Confusing to an Irish student 
of the past (9) 

18 In favour of games period 
many years ago (7) 

18 Suspiciously question African 
party over key (7) 

21 Picked odd socks (5) 

28 Rugby person raised in Bel- 
gium (Si - 

24 tt attracts fish but sailor goes 
round tt (4) 

Solution 8*547 




<£-ra n9 

CP 





V 


i , i,'.* 


tfr’’ 
s: , 


jroKer 
taiition 
Bolls 





.SfljC*!'-'-' ■■ 

•I * 

I 

«l gsxr--' 

} ses *■ - 


a :x :v 

1 * .' '3 a i> 

• ;*- - e. s j , -. 

4 0 ’ • 3 -3 

•'3 13 

X - 

j'-K'TZr- a; ?r. t . 
*1.-8. ’ 


• - 'V 


*•2; . 
f* + , 

• ■ -I 1 

- - 

SKtiTlfSC.-h,-. , 

* x-c » v 

i as +- 

7U:«. , 



; * cb «ri w 




§!&. 

ifciifr-. 









FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


LONDON STOCK EXCHANGE 


MARKET REPORT 


Wide-ranging setback follows US price data 


By Teciy Bytand, 

UK Stock Market Editor 

Discomforting economic 
developments in Europe and the US 
upset the London stock market yes- 
tentey afternoon, prompting a 
giaip fell cross the range of ami- 
ties. A large sell programme was 
reported and the market closed in a 
negative mood ahead of publication 
today of the latest US unemploy- 
ment and payroll statistics 

The FT-SE 100 Share hides dosed 
348 points off at 3.216J. Although 
this was a shade above the day's 
low, traders believed that the 3 J 500 
mark could be challenged today 
especially if Wall Street, which was 
15 Dow points off as London went 
home last night, reacts badly to 
today's US payroll data. 

Markets were upset by the 


announcement that the pricing 
Index of the US National Associa- 
tion of Purchasing Managers 
(NAPM) had risen sharply in 
August to its highest level for six 
Tears. This latest hint of inflation- 
ary pressures hum the US unsettled 
European markets already troubled 
by the. Bundesbank’s decision to 
leave key rates unchanged after a 
sharp rise in German industrial pro- 
duction raised concern that the 
downward trend in European inter- 
est r ates might now be over. Ana- 
lysts are now nervous of a ret urn of 
“stagflation," when prices continue 
to rise while the e conomic pace 
slows down. 

However, traders were not con- 
vinced that yesterday's shakeout in 
London represented si gnificant sell- 
ing pressure from the institutions. 
The FT-SE Mid 250 Tnitor . fglrmg r in 


a range of non-Pootsie stocks, also 
fell, closing 222 down at 3,7913. 

The big selling programme, not 
finally diBcywAri until the market 
dose, appeared to Involve a wide 
range of front line stocks. But non- 
Footsie business made up around 62 
per cent of the day's total of ffT7-2m 
shares traded through the Seaq net 
and several second-line stocks fea- 
tured in flie lists of active market 
stocks. Wednesday’s session 
recorded retail business worth 
Cl-fiShn. wen up to the best aver- 
ages of the past twelve months. 

Equity strategists said that confi- 
dence remains relatively high in the 
UK stock market, and that thin 
week's downward drift represents 
little more than a pause izx a market 
now thoroughly underpinned by 
economic recovery and by strongly 
improving corporate profits and div- 


idends. 

They believe that these trends 
will enable UK equities to resist the 
growing concern that interest rates 
may be forced higher sooner rather 
than later, some believe that the UK 
authorities may elect for a pre-emp- 
tive strike on base rates, following 
the lead shown by the US Federal 

Reserve. 

For the near term, however, com- 
pany results have provided a less 
positive guide. The interim state- 
ment from Rolls-Royce, the aero-en- 
gine group, fo i l ed to please the mar- 
ket yesterday, as did the statement 
from Ladbroke, the leisure gnu casi- 
nos group. 

The market was hard hit by the 
weakness in Wall Street influenced 
stocks which followed the opening 
setback in the Dow. Once again, 
traders were happy to take profits 


FT-SE-A AH-Share Index 


1,675 

1,660 


in the big name stocks which led 
the market in the strong upturn 
seen towards the end of last week. 

With the latest bout of bid excite- 
ment, prompted by SmithKIine’s 
purchase of Sterling Health, reced- 
ing somewhat, there were sharp 

falls in the drug leaders. Defence 
stocks, also alerted this week by the 
{lObn merger of Lockheed Group 
and Martin Marietta, had a quieter 
session yesterday. 

Oil stocks, also, began to slide 
away towards the dose and BAT 
Industries finally provided almost a 
lone firm spot among the blue chip 
internationals. Losses among the 
consumer and retail issues were 
fairly modest, although Kingfisher 
again gave ground as investors pon- 
dered the im plipaHnna of the rise in 
French bank rates for Darty, the 
group's French subsidiary. 



Sain*. FT 


-MM 


■ Key Indicators 

Imfioes and ratios 

FT-SE 100 321 &5 

FT-SE Mid 250 3794.3 

FT-SE-A 350 1625,0 

FT-SE-A AB-Shsre 1612^7 

FT-SE-A Aft-Share yield 3.69 

Best performing sectors 

1 FT-SE SmaDCap ex IT 

2 Property 


3 Engineering. Vehtciss 

4 Tobacco 

5 Other Financial 


-34.8 

-22-3 

-15.7 

-14.37 

(3.67) 

— +02 
..... + 0.2 
— . + 0.1 
— + 0.1 
.... + 0.1 


Equity Shares Traded 

Tumewr by vefcm (m«ori Exckrfng: 
WnHtartal Stainem and awraaas turnover 
1,000 -- - 


800 — 

BOO 

40° M 

200 HH 

|| 


t 

— 

• ^ Jll 

4U9 

1984 


Sep 

FT Ordinary Index 

2509.4 

-25.6 

FT-SE-A Non Fins p/o 


19.95 

(20.16) 

FT-SEIOOFut Sep 

3221 J) 

-42.0 

10 yr QUt yield 


8.55 

(8.60) 

Long ^t/equlty y(d ratio: 

2S3 

(2.36) 

Worst performing sectors 





.. -...-2.5 

2 SnctricHu 





3 Gas Dtetrtxitton 



-1.9 


-m 


Pharmaceuticals 
03 Exploration & Prod -1.3 


Broker 
caution 
hits Rolls 

Aero-engines group 
Rolls-Royce came under pres- 
sure in heavy trading of 15m 
shares as broker’s trimmed 
1995 forecasts after the group 
reported interim figures at the 
bottom end of expectations. 

The shares fell 10 in early 
trading after the company 
revealed profits of £40m, 
against a market range of £40m 
to £50m. However, with ana- 


lysts on the sector away at 
other results meetings, b ar gtfn 
hunters quickly moved into 
the stock leaving it to trade in 
positive territory for a short 
period mid-session. 

The shares eventually closed 
8 down at 18 Qp, as analysts 
digested what many considered 
a downbeat presentation from 
the company chairman. 
Researchers were particularly 
concerned by comments from 
the company that eng»m» deliv- 
eries for 1995 were at this stage 
likely to be lower than expec- 
ted. 

Many analysts stuck to their 
1994 forecasts of around £10Qm 
but reduced the following 
year’s figure to reflect the com- 


pany’s comments. NatWest 
Securities reduced its figure by 
£9m to 136m, while Credit 
Lyonnais downgraded its fore- 
cast by fiism to 13Sm 

The shares have outper- 
formed the market for most of 
the year and general profittak- 
ing, along with sell recommen- 
dations from several brokers 
earlier this weak, contributed 
to the malaise. 

SWEB active 

The electricity sector fell 
sharply under the weight erf a 
flurry of profittaking but there 
were suggestions late in the 
day that one company . Sout h 
Western Electricity (SWEB). 


EQUITY FUTURES AND OPTIONS TRADING 


Concern over inflation 
continued to dominate the 
derivatives sector leading to a 
sharp decline in stock index 
futures, writes Joe/ Kibazo. 


Having opened at 3,262, 
earty buying attributed to SG 
Warburg pushed the 
September contract on the 
FT-SE 100 to a high of 3,265 


■ FT-SE 100 moot FUTURES (UFFQ E2S per Ml Index potat 


(API) 



Open 

SM price 

Change 

Hgh 

Law 

Est vd 

Open InL 

Sep 

3262.0 

3221.0 

-4ZA 

3265.0 

3214.0 

15055 

BB880 

Dec 

3274JD 

3235.5 

-42.0 

3276L5 

3234.0 

1608 

9640 

Mar 

- 

32S&0 

-41.0 

- 

> 

0 

0 


■ FT-8E MP 250 MDEX FUTURES (UFFQ CIO per tufl Index point 

Sep 3906.0 3793.0 -&0 3805.0 37960 210 4Z71 

Dec 3826.0 3817.0 -0.0 3826.0 3817.0 160 320 

* FT-SE MP 250 INDEX FUTURES (OMUQ CIO par M index point 

Sop - 37800 638 

Al opan heM flgunm am tor pr etera dir. f Exact vofcana Stamm. 

■ FT-seiooaioexopnowtLffFqpgi^eiopefiuifciddxpctK 

3060 3100 3160 3200 3250 3300 3390 3400 

CPCPCPCPCPCPCPCP 
Sflp 174^ 2*i 129 S 1 * 89 13 «ta 28 23*2 52*2 » 92 Z 142 1 192 

Oct US »2 19 149tj » lltP-Clj 81*2 63*2 65* 99 35% 118% 22 158 Vh 1881* 

No* 206*2 31 179>2 44fe 139 59>z 108 80 TVz 104 50*2 133 40% 197 29 204>2 

Dec . 229 47. 132 59k 158*2 7B 129 86*2 109 118b 78 146b ST 177b 43b 214b. 

JUJf 282 114b 222b153b 1»b2Hb 128 290b 

Mi UQ6M0US7 

■ EURO STYLE FT-SE 100 BnaPCOPTlOW (LffTE) CTO par ft* Max point 


3029 3075 3125 3176 

Sep 198 2b M8b 3b 1Mb 9b 99 19 
Oct 208 15b Ittb 23b 129b &b 99 52 
Nor 2Z7b26b 151 49b 

Dec 24S> 2 38b 173 64 

Uarf 280b W 222 b 33b 

QM TjK2 Mi 26» • Ondsftbo tade* tee. 
t tog PM «*y era** 

■ EURO STVtE FT-SE MP 250 MPfiX OPTION (OMLX) CIO par M Me* pdnt 


3225 3275 3325 3375 

33 37 14b B8b 3b 107b 1b 154b 
87b 73b 48 191b 29 134b 17 172 
Mb 96b . 47 143 

113102b 97b 155b 

199 134 nsbiB4b 

pta. 


8800 


3060 


3860 


37WJ 3750 3800 3850 

«7b 31 68b 52 38b 80 

Can Q ras o Mfemrt Prices and wwm an Mae at 4j0po. 


within the first hour of trading. 

But with little follow-through 
buying, the contract drifted 
lower on continued worries on 
Inflation. The decision by the 
Bundesbank to leave interest 
rates unchanged also caused 
some concern. 

In the afternoon it was the 
US purchasing managers' 
figures that once again raised 
tears on inflation bringing a 
further retreat in the 
September contract which fed 
to the day's low of 3,244, to 
test the 3,240 support level. 

Bargain-hunting in the last 
hour brought some recovery In 
the September contract It 
dosed at 3^21, down 42 on 
Its previous close, and at parity 
with its fair value premium to 
cash of about 5 points. Volume 
was 15,056 lots. 

Rolls-Royce, which reported 
Interim figures at the bottom of 
expectations was the 
outstanding feature In the 
traded options sector as it 
traded 5,420 contracts. It was 
followed by Vodafone Group, 
among the stock options. 

Total volume In the sector 
was 34,233 lots with the FT-SE 
IX option trading 15,014 lots 
and 4,375 in the Euro FT-SE 
option. 


FT - SE Actuaries S'n 


Day'* 

digiN Aug 31 Am 30 Aug 26 


•00 


Dhi. Earn. 
yMd* yMdtt 


P/E 


Xd a4 Total 
ykt Mum 


FT-SE 100 32185 

FT-SE MM 260 3794.3 

FT-SE MM 250 ax Imr Trust* 3801.2 

FT-SE-A 360 1 826.0 

FT-SE SmaDCap 191054 

FT-SE SmaBCep « bw Trusts 187458 

FT-SE-A ALL-SHARE 1812L27 


-1.1 32515 3249-8 3285.1 30725 

-05 38165 38135 38075 34895 

-05 38205 38175 3810.7 35055 

-1.0 1640.7 1638.7 1645.1 1539.0 

+0.1 1908.90 190551 190258 1779.77 
+05 187052 188759 186851 177759 
-05 162854 162557 163033 162S59 


■ FT-SE Actuaries All-Share 


DW*» 

Cjaajt Aug 31 Aug 30 Aug 28 


Yaar 

800 


3-90 

8.70 

17.39 

8865 

121166 

azs 

6L48 

2161 

86.15 

1407.81 

3-39 

563 

20.42 

88.78 

1408.78 

3JS 

148 

1827 

4266 

125269 

2.96 

4.14 

3063 

37.58 

1477.18 

3.14 

469 

2863 3866 

145264 

369 

862 

1862 

4167 

128364 

Dhr. 

Earn 

P/E 

xa«*. 

Total 


yjaM* yjaMjt nte yU ntm 


10 mUML EXTRACT10Hfl8J 274951 

12 Extractive MusMes{4) 399657 

16 09. W^jratKKtp) 2703.04 

16 011 Exploration 6 Pro<X») . .191754. 


-092773512768.12275451235350 350 5.15 2459 54.71 109553 

-05 401251 400255 397657 3443.10 3.19 504 2457 5454 1091.10 

-4X9 272750 272058 270551 2280.40 340 654 2547 5959 1100.78 

-15 19S254 196357 197051 197450 252 157 BOJOt 2054 109953 


084 MANUFACTURERS#**) 
BukSns 6 Coratruction(32} 
8 uMtq Matta & M ere h a pi) 
Chemicato(22) 

Dtveraffled tndustrtafartlQ 
Electronic & Bed EcpdpPS 
Engmaaring(7a) 

Engineering. UeNctes(12) 
Printing. Paper & Pchg(2q 
TaxWw 6 AppareCm 


2043.42 -05 2056.15 205858 208854 191650 

120158 -05 120455 118056 1171.68 1152.40 

201753 -05 2029.73201155200658180250 
2518.77 -05 2524.87 2S2559 2530.48 226650 

203758 -082049.18 206656 208357 2001.00 

2031.08 -05 204950 204955 206851 2144.60 

1893.70 -05 1911.02 1017.17 19Z7.47 168050 

238498 +0.1 2391.76 2401.62 2406.73 1981.40 

2893.36 -0.7 201255 2930.72 2836.05 248340 

169952 -1.3 172251 175048 17S5.16 189250 


3.71 

4.60 

2860 

51.78 

103863 

H99 

461 

2963 

21.47 

93361 

3.86 

4.00 

3165 

45.78 

94465 

3.68 

464 

3166 7267 

111368 

4.46 

468 

26.73 

8468 

1037.68 

369 

320 

1065 

5569 

90268 

361 

<65 

2668 

3969 

107862 

468 

2/43 

58.74 

5423 

115169 

2.92 

5.07 

23.11 

6361 

113261 

360 

660 

19.73 

4040 

85763 


CONSUMER GOOOSWri 

31 Bmw«tea(17) 

32 SpMt*. Wines 5 CMeraHQ 

33 RxM Manufaetumrep3J 

34 Household Goods(13J 

36 Hea&h Cera(21) 

37 Phannacttdlcais(12) 

38 Tobeecotll ' - 


287373 -1.1290310290170292312 285850 
2 36S56 -37 2382.962362.14236052208650 
299451 -15 3031.40 302080 304051 296310 
239381 -05 241455 2413.06 243256 239440 
2681.00 -25 2S4857 26275B 282253 248750 
172551 -31 1727.12 172047 171357 181310 

315553 -15 321372 324S5S 326651 318310 

3712.17 +0.1 370758 368154 374952 392330 


465 

764 

1346 

8329 

98361 

369 

766 

1373 

8023 

105862 

3.70 

0.43 

1302 

8962 

100363 

369 

767 

1377 

7163 

100330 

3/48 

7.14 

1666 5260 

82027 

o an 

318 

4440 

3390 

90337 

396 

669 

1660 

70.05 

90162 

385 

968 

1160 21767 

84378 


RWCESCn* 

Mbutara(3l) 

in 6 HomIs(24) 
dM38) 

tatarsT Foodfl7) 
otters, GeneroK45) 

XXXI Senricw(«9 
nportdB) 

nrSentowa BtdfieSSffl. 


2021.73 
275366 
211953 
296156 
1BS456 
174355 
158050 
238551 
1321 68_ 


-362033482037582047.62193950 353 555 2327 4150 989.15 
-31 275751 275316275457281750 3L29 143 1856 6340 95040 
-38213155 213307 2165A5 198150 327 457 2557 4344 104354 

-34 2992.13 3009.11 302366284050 2.30 657 2254 5306 103350 

-38 1869.46 188224 100373 195550 34$ 850 1458 4110 110659 

-36 175358 175550 175850 186320 350 6.18 2026 3352 92753 

+31 157751 1581.10166308185350 250 556 19.73 2312 957.11 

-12 241111 242054 243362 231050 352 108 2250 4256 93051 

+31 1321561321.66132959131050 353 Z.11 8000t 21.48 1131.70 


had Instructed Its broker, 
BZW, to move into the market 
to buy I n stoc k. Turnover of 
99m in SWEB was the third 
highest on record and indi- 
cated. that it could have bought 
just short o f 1 per cent of its 
own shares. SWEB closed only 
a penny off at 822p. 

'The rest of the Bees were hit 
by profit-taking. Some dealers 
felt, however, that the steep 
declines yesterday could have 
been an attempt by market- 
makers at the big nifagnt^ 
securities houses to flush out 
stock ahpti of attempted share 

buy hai-Tra 

Buy backs have been an the 
a genda for many months and 
analysts expect many of the 


TRADING VOLUME 


ASCMOracvt 

%xisr« 

wpsa 


Catena 0W» 
Brio* etnrq» 


7500 

5500 




-1 

+8>2 


Amoo .W.IW 
BAAt ^ 
BAThcte-t 
BET 
see 




Bit 

BTgPM) 

0TRT 

Bteit al ScoOmtft 


798 

ao 

-4 

3900 

BIS 

-11 

996 

580 

-11 

BB 

306 

■A 

2/400 

291 

-4 

1600 

STS 

-4 

111 

658 

-8 

UB 

388 

-a 

1600 

as 

-11 

3800 

443 

♦1 

2100 

115 

-1 

337 

408 

-4 

788 

740 

-4 

4JOO 

409 

-8 

1400 

320 

-4 

8400 

388 

-2*2 

5400 

268*2 

-2 


Bki* Gkdcf 

floatar 
Bootst 


Sr*. jUn3»pecgt 
SrtBtei Land 

BrttteiStwrt 

Bumf 

BuanteiCartstt 

Raton 

CMIa&Wkat 
Cadbuy SefanppMt 

Cteadorrt 
Caiticn Csrens.t 
Co«i Wrote rt 
Cano. Untant 


CoutaJdrt 


assss r 



UgteD (tenant 

rap 

LASMO 




2.100 
2500 
2. tOO 
3800 
11 
3100 
452 
GOB 
3800 
8500 
1500 
1,100 
38 

1200 

4500 

3300 

2500 

37 

727 

1500 

1200 

330 

SOB 

887 


aann 

2.100 

781 

3100 

5*4 

188 

T500 

3300 

1500 

1500 

1.100 

*500 

*.700 

282 

3H» 

2500 

1500 

1500 

847 

3400 

1500 

1200 

8500 

018 

402 

1.100 


1200 

108 

3100 

1500 

131 

3300 

2200 

3800 

3800 

871 

4500 

2200 

477 

450 

BOB 

1500 

BQ2 

817 

2.000 

1500 


381 

aw* 

STB 


S61 

480 

408 

413 

407 

1S0>2 

IBS 

803 

84 

455 

<01 

281 

308 

854 

221 

548 

280 

522 

488 

977 

211 

813 

784 

387 


3 

-6 

-7 

-6 

-6 

-6 


-12 

-12 
+1 
+ a 

-7 

-4 

-8 

-6 

-1 

-1 

*r 


-18 

-a 


«2 

- 2 «* 


183 
161 

143 .2«* 

238 -4 

570 -15 

303 -6 

830 -14 

2S0 

495 -5 

445 

sag -a 

183 -1 

828 -a 

487 -11 

738 -7 

388 +4 

2&S 

180 -4 

208 -2 

179 -5 

336*7 

834 h -1»I 

478 -3 

677 

631 -9 

8*4 -3 

187 -1 

8S3 45 

794 -5 

480 -6 

881 43 

555*7 
149 
729 

144 *1tj 


3 


rieftterant 


60 UTRJFESPW 

82 BecMcHyflri 
64 <Soa 0tev9xitlon|Q 
66 TalacommtrtcataisW 
88 Watcrft3| 


251923 -1.7 2562.15 258112 2573.40 232190 

2688.16 -22 274728 2754.74 2734.04 193180 

1972.82 -12 201058 201198 205228 819B20 

2 083. 73 -12 211157 210620211720 2122.70 

109126 -1-5 2011.71 203225 204183 187160 


T75 
1500 
1200 
1500 681 

2900 196*2 
1500 891 

2500 330 

139 89* 

1,700 BBO 
859 281 

3.100 419 

1400 B27 

1.100 555 

3200 775 

2200 222 
1500 510 

15200 180 

2200 430*2 

1200 291 

1700 450 

919 1503 

MS 53Z 
405 


M8>j -1»7 

K* -2D 

430 -2 

814 -04 

143 -1 

172 -5 

487 -10 

sis -a 

270 +1 

-« 
-20 
-S 


634 

215 


-3 

S 


15 


-8 

*4*2 


companies to to buy in their 
own stock before the compa- 
nies enter their closed seasons 
starting from the middle of the 
month. It was pointed out that 
Northern has only six trading 
days to buy in stock, while 
Midland has seven and See- 
board, which moved last week 
to buy its own shares, has nine 
days. 

Yorkshire Electr i c i t y held up 
well as the market responded 
to talk that the shares had 
responded to the expiry of an 
OTC, or specially constructed 
option in the stock. At the 
dose, Yorkshire were only 4 off 
at 790p. Th e biggest fellers in 
the sector included East Mid- 
lands, 18 off at 764p, Eastern 29 
lower at 813P and Midlands 
which fell 24 to 814p. 

South West Water edged up 
3 to 578p after stories that the 
company will not seek a refer- 
ence to the MMC. 

BAT wanted 

Yield considerations and a 
surge of optimism over US 
tobacco sales gave an early 
boost to BAT Industries, the 
international tobacco and 
insurance conglomerate. 

Initially, buyers responded to 
a move from US rival Philip 
Morris which Increased its 
quarterly dividend by more 
than expected and annnnnrfld 
a share buy back. The raised 
dividend follows recent reports 
of increased cigarette sales in 
the US and adds weight to 
expectations that BAT will 
report improved figures for 
tobacco sales in November. 

Several UK securities reiter- 


NEW HIGHS AND 
LOWS FOR 1994 

KWHOHIH 

BRSMSU8 IQ Hoft M. Manton Ihonvon. 
BUUJ940 6 CNSIltM (1) Ktetate. BLDG IUTLS 
9 MBITS (1) Qrafton. DtSTMlIinTXtS P| 
Bammer, FM*. Parra, DfVERSAB> IM3LS 
(31 MiotenHL Pena Ctndburw TT, 
BLECraBTY (1) Seaboard. ELECTOR 4 
ELSCT BQUP 09 MTL tetonMi. NOW* Pit. 
Iteete, BNNEBM pi Back 4 Dadier. 
Expanat hrt. Kobe State. Itaanw Monza, 
naraama, Bkc Huwraa. ENO, VB9CUS (B 
UPF, EXI1MCTWE MBS M WUH CARE (1) 
101 
m 

Unram Inca, INVESn«T TfWSTS cn Jf 
Aten Setea. Vaxurt Qcawt, LSSUAS 6 
HOTELS 98 ADadMn Steter HauM*. Tattenhan 
Hatepw. MBtCHANT BANKS 0 StewoteM. Do 
NW. Ott. tmeORATHI (1) OeeMaate 
Pwttacn. OTm SBWS A BU8NS tl) 
H^Mnd*. PflTNO. MPERS PACKG Q 
PROPERTY (1) ArpanL SPSVT8. WBCS & 
casts (2) Maodonted Msten A MteBww CM. 
SUPPORT SBm (2) Page M. RMd Emcuttia. 
TRANSPORT 0 AMERICANS ft] SOUTH 
AHBCAN80). 

NEwunwm. 

BUU04Q A C74BTRN (1)1BMy Doogtai 

DWnmtlTORS n AtMl BWdMy Bogod A 
Oaato. BIU, VB9CLBB (t| Mata Wakt 
EXTRACTIVE »«S » Hr0o Padfc Rea. 
toctan. Marante Raa- IEALTH CARE {q 
IfBorcoro. HOUSEHOLD OOODS f3 Joyra 
WyteMd. M8URANCE (I) Tapdraiat. 
INVESTMENT TRUSTS M MSU p} OTHBt 
RNANBAL (1) PROPEHIY {2} 004. EpacMty 
Shop*, RETAA-ERS, GSSIAL (1) Rrto*. 
SUPPORT S8RVS (1) TEXHLEB A APPARBL » 
FateM u. TRANSPORT n AMEMCAH6 

co- 


ated their positive stance on 
the stock at their morning 
meetings. S.G. Warburg, 
among them, also pointed out 
that the yield on the Es gfe Star 
parent had risen to &2 per cent 
against SB per cent for rival 
composites. The house believes 
they should trade at parity and 
says the imbalance implies a 
potential 5 per cent upside in 
BATs share price. 

BAT were up 8 at best and 
held out against the broader 


market’s sharp tall in late trad- 
ing to close a penny higher at 
443p with 5.6m traded. Roth- 
mans also benefited from the 
improved tobacco sentiment to 
close 4 higher at 394p. 

Optimism over cyclical 
recovery potential next year 
for Hanson, the internationally 
traded conglomerate, was off- 
set by some heavy selling in 
the US. 

A number of brokers have 
factored in earnings per share 
growth of around 20 per cent 
for next year. The stock has 
held up against the market 
since going ex-dividend on 
Tuesday and yesterday the 
shares resisted the early tell in 
the market to rise 2 p. However, 
Salomon Brothers the US 
investment bank dealt l.2m 
American Depositary Receipts 
- equivalent to 6m shares - at 
the dollar equivalent of 256p 
and the shares mbib off the top 
to close marginally easier at 
255p- 

Honsehold products group 
Beckitt & Cohnau slid 25 to 
627p as the company 
flnnmmfad that first-half prof- 
its had fallpn to EC 23 3 m from 
£l43.6m previously. The com- 
pany took an exceptional 
charge of £56m to cover reor- 
ganisation costs in Europe and 
gave a disappointing trading 
statement. 

A two-way programme trade 
featuring a few sizeable indi- 
vidual deals affected Reuters 
and Zeneca. The former slipped 
a penny to 510p as 600,000 
shares were taken out of the 
market while Zeneca Ml 11 to 
828p as the shares Mt the pres- 
sure of an additional 700,000 in 


the market 

Hoare Govett was behin d the 
surge in activity in TSB. with 
the broker recommending the 
shares to Its clients on the 
basis that the bank’s profit 
margins are being maintained 
and that the bank retains its 
high dividend paying capacity. 
Hoare’s banks team increased 
its profits forecasts for the 
bank, lifting its current year 
expectation from £480m to 
£500m and that for next year 
from £590m to £610m. 

The broker also highlighted 
the 11 per cent underperform- 
ance of TSB shares this year. 
TSB stock closed 2 firmer at 
224p, after 226 p, with turnover 
reaching 9.3m shares, the high- 
est single day's turnover since 
January this year. 

Abbey National jumped 8% 
more to 414Kp as the market 
absorbed news that the com- 
pany had increased rates on its 
fixed rate mortgages and that 
the shares had broken out of 
their recent range. 

The recent institutional 
buyer of Royal Bank of Scot- 
land reappeared yesterday, via 
Credit Lyonnais Laing, and 
drove RBOS shares up 4% 
more to 430%p. 

Strong US buying was again 
noted in food and drinks group 
Cadbury-Schweppes. The 
shares closed a penny ahead at 
491p, on volume of 2.4m. 

MARKET REPORTERS: 

Peter John, 

Steve Thompson, 

Joel Kibazo. 

■ Other statistics. Page 21 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


RISES AND FALLS YESTERDAY 


(Mm 


— Cats Pun 

Ort Jaa Air Od Jan Apr 


MBtf-Um 5S9 4SK - - 8N - - 

r615) 538 14 - - 33 - - 

*08 280 am ZB 34 ff)4 18 205* 

rZ» J 300 9M14H » 19 27 31 

ASIA 60 8 10U 12 2ft 4 5H 

70 as* T7 9 KM 


CM Pub 

■te UMqr Nof Mfo 


BrtMmyi 390 34 43»53tt 715U20H 
P418 J 420 16 27 38» 20 29M 35 
MO KM A 420 35V, 46 82W 8H 16K 23 
(«444 | 450 1311 23H 32 28H 30H 44 

Boob 550 28 36ft » 13 24 V* 31* 
(•360 ) BOO 8 IBM 35 44H 53 W»i 

BP 390 30 38MCH 6M 14 18H 

r«9> 420 T2» 22H 30 20M 28 S3 

fttthSbtl 140 23M 27 30 Tti 4 5M 
(150 ) 150 9 13M 16 7 11 13M 

Bbm 550 47h 57 84K 7h 1914 20 
rSOB ) 600 T7fc Z7H 37% 29 47 EBU 

cabin* 420 46% SBBSH6K16K 21 
(M55) 480 19H 34 45 23 33 39 

OOtatttKb 50Q33U44H BE 12 21»Z7H 
C521 J 550 02BM31K38)i46S5M 

CmalMia 500 58 00 74 314 9K 17 
("547 > 550 am 34U 43M 19 27 30 

0 600 S2K 73 85 13 25H40M 

r*33 } 850 72V, 46 57 36 49XB8K 

Hritfbhb 500 4116 64 55 11 IS 24* 

fS30 ) 550 13 2SVi®»36» 44 4B 

land Secur 690 23 94 47 1TO 2BH 30 
(-652 ) 700 6 M 25 5011 59 KM 

Hotels 420 2H1H40HSM 17 21 
(*430 > 460 4 1311 22 33* 301 43 

MOM 460 30K S4 BBM 8 15M 26 
(•487 1 50Q16V4 31 S7» 26H 33 

SBttetey 420 40 46 5BH 7M 16M 21 

(■440 ) 460 15 27 37 24 34 39H 

Stt* Dn 700 51 62 76 B 14 24h 

r74S ) 750 M 3111 4811 28 38 49ft 

SUBSOUR 200 25 29 32M ffl 5» B» 

(99 > 220 11 16 21 9 13M 17h 


90 B M 13 5M 9 12 
100 2» • 8W 12H 16 18 
1100 64 83H 106 10H27M42H 
1160 SH 54 70H 34 SO 65» 
an 43 81 73 18 014 44 
550 15 35 48 44H53117DH 
No* Feb H*j Hot Fte> usjr 


Hern 240 23 28 29H 4H 8 12 

<*255 ) 250 0 14» 1SU 12£ 17 21» 

Uamo 134 21k - - 4k - - 

(*149 ) 15* 6k - - 12 - - 

Lac* Ms 180 25 28 31 SM Bk 12 

2DQ ntM 20 1*k 16 22 
PAD BSD 44 0114 70 22 33 46 
(*680 ) 700 1816 SB 46M 50k 60H 73 

pnhgtan 180 S2BH 31 4 7h Stt 

H9B ) 200 12 14 t9k 12 1BV4 19 

PnxkrtM 300 34H 40 44 SH BH 15 
(*329) 330 15 22k Z7k 17H 21k 30 

RTZ 850 56 TO 90 24 - 38 4S 
raaoj 90028k sosAksokEik n 
tatend 550 2742k 49 2BH 33k 4Sh 
CS54 ) 600 9 22 20 63k 66k 7834 

Rajte ksce 280 2B 34k 38k 12£ 16 22 
(*290 ) 300 15 24k 29k 23k 26 32 

Teaeo 240 17k 3*k 2B» Bk 14 16 
P248 ) 2B0 8k 15 19 21 24k 29 

Mbtae 200 17 21k 27 8k 13 15k 
(*206 ) 217 8k 13k - 18 22 - 

Wbm 354 2Dk - - 12k - - 

(T64) 384 7k - -31k - - 

Option oa Jen Apr Qg Jan Ag- 

BM 500 23k 3D 39k 15 20 25 

fS04 ) 525 10 18 27k 29 34k 38 

TtaUtM 500 46 53 60k 6 17k 19k 

rS35) S50Wk2Bk 34 36k 40k 44 
OpOm Sag Dee Ha 9*p Dec Mar 



Rm 

Fa6s 

Same 





Other Fboed tatonwt 

3 

0 

12 

Mneral Extraction 

39 

84 

146 

43 

99 

78 

394 

TOO 

338 



Services 






105 

195 

50 

193 

258 

29 



Others 

35 


Totals 


447 


755 


1411 


One Maed on Sum compote* fatad on 8a Loorioo Shoe Santae. 


TRADmONAL OPTIONS 


Hrst Dealngs 
Last DoafTtga 


August 22 Expty 

September 5 Settlement 


November 24 
Decembers 


Cb 6 k Aran Energy. EnMK InH. C nfp rta e Coop, GenRner, Honeon Wta, Mbrar 
Group, NSM, NorbaM, Owaca Res, Rodbna, S a mfeontee prefl. Shed. Ibfcur 06. 
Puts Ann Enacyy, NSM, Ovoca Ree, TUBoa 06. Puls 5 Cate: PAP, Parte Foods, 
Rodtoaa. Tadtpoie Tech. Tarmac. 


LONDON RECENT ISSUES: EQUITIES 


Mbqr NM 

T413) 


HI ) 


rS79) 
Ska arete 
f321 ) 
Britts: te 
rtW) 
OtBBB 
f210) 


390 29 
43) 9 

30 3k 
35 Ik 
550 30 
BOO 3% 
300 26k 
330 7 

280 21k 
300 S 
200 16 
220 8 


41k 46k 
Z3K31H 
4k 8 
2k 3ft 
54ft 55 
23 37k 
24k 42 
18k 24 
25ft 29ft 
14k 19 
24H 28 
1417k 


3k 10k 33ft 
1SH 23ft 33ft 
Ik 2 4 

4k 6k 7k 
4 15k Z4 
26 38 50 
3k 10k 10 
17k 25k 31 
2k 9 12k 
9 19k 21k 
4 9 14 

14 19k 25 


ran 


(1141) 


P820 J 

Opton 


Gate Mat 


420 39 46 53k 9 18k 23N 

4® 16k 24k 13k 20ft 39 44 


4.18 

7.48 

1329 

7342 

9JU40 

8coDM Poaerf 

Ajxib 

409 

-18 

LeteAe 

160 15k 22 26ft 

8 lift law 

341 

316 

1305 

8346 

T11760 

Sant 

1400 

1+9*2 


(157) 

180 

Bk Uk 17 

21 23k 27k 

867 

* 

* 6379 

00160 





iMOiete 

330 

IB 28k SB 

14 21k 30 

368 

765 

1312 

5022 

88860 


702 

982 

-12 

P333 

360 

Bk TJk T7ft 

37 « *9 

460 

1165 

312 

6335 

980.77 

terp-mp-nt 

2400 

7irt 

-4*2 

Option 


Sep Dk Iter Sep Dk Mar 


ea N0N4 l BW*CMigP<L 

7D FWANCIA1«104) 

71 Banker 0) 

73 ImurancdflT) 

74 LK* A£»/nnaJ® 

75 Merck** Banke(6) 

77 Cither FtancWCMI 
79 Property**^ 


1748.15 


223520 

2854.64 

1289.49 

2516.66 

3167m 

2003.95 

1564.77 


-qg 1784^6 17WJM 1772.00 1651.40 
-0.6 2249.07 22S.73 2229S5 2181.10 4J8 8^7 

,0.7 2873.61 2834110 283X81 2604^0 <22 938 

-1.1 1284.17 1282-77 129X28 143220 &0Z 1280 

-1.2 254&S1 2521J05 2827.17 261820 425 723 

-0.4 310CL21 3144.46 313&33 510020 119 1042 

+0.1 2001.75 19B8S8 1977.78 1832.00 354 7JB 

•0.3 150208 ISSOBS 1S827D 1S75.00 3^5 Xfl7 


3M 003 18L85 43,60 123048 


1294 7<38 88338 
1212 10287 8S4J21 
8.73 47M 868.90 
1088 8034 95081 
11.17 7642 95202 
15.14 45^8 1004.77 
31J8 3740 


60 mVEST^ *^ TRUS1S(133L 
BB FT-SC-A all-shahqmii 


2914.67 


161227 


-1.0 2943.17293287 2933125 257^20 
-0.9 1826.64 1 82057 193033 1S2S.09 


2.08 

349 


1.79 

032 


5062 4012 97038 
1062 4147 126084 


□nArt 

300 

moo 

1160 

1260 

I960 

1460 

1860 

1310 

H&Hmf Low/day 

vr*“ 

32438 

3612-7 

16376 

III 

3237.4 

38106 

1634.6 

3230.1 

37935 

1830.8 

3232.1 

38016 

1831.7 

32302 

37931 

16308 

92276 

37986 

162910 

3220.7 

3796.8 
18286 

32103 

37000 

16200 

S9faiA 

3814.6 

18400 

3215.4 

37943 

1624.7 


FT-SE-A 350 

m rr-SE Actual 350 

MO 


• ~ " R nm.4 1160 8 1169.0 116^2 1162.4 TUtt 11607 11823 

11906 11®“ 31408 31408 3139J 3131.1 312BJ 3129.7 31803 -50.1 

3170.0 31JS.1 3W.r 18874 10800 1B808 18803 10000 19B1J 201 1J -304 

2006.8 2008.7 29000 290l£ 29012 26907 3B87J3 28002 29008 -194 

290C-S 29114 

___ . u oueaatwa h Saeadm Naum. Uea at ccraswaae ra enUria tnui The Rraate iknae 

. ■>* FT-SE Md 250. FT-SE Ataafca 350 teid tee FT-GE Aehnriaa bduatry 
m ate Ram-col ward end n* FT-SE Acnartae A H &— nan b 
I Asiuabe end fta teatev of Acaariaa wder a enraM set d oouxl ete 
I LWW 199*. O TAB nooclte Ifara Unhad 199a. M iVeiemd 
k Botrage mtS H» RnteWH Ttooe Um&TM FT-6B AcmoNi Shoe 
lot team. BIMuaeoeeaitehe. 


10JDD 


BUg & CnW cn 
P hsnwAceyBcte 


I tJOO 12 M ttW mo ISjOO IMP tea Pwitea Chanpo 

1167.1 -48 

31884 -50.1 


Bute 



QtoochEsta 214 252 

SrrfthWH) 313 SM 

MtbM an is* 1 * 

Sn« Beateanrt- UOD 445 

6m»BeecMnUb.t 2J00 403 

Srateehda. ^ 446 4fi7 

6eu9ianSen.t 1,900 60S 

SmA Wabe Bact. *si TOO 

Soutn Went Wear SB5 578 

SoKtl We*L 5*CL 4,700 632 

Sdumhi WNer 1ST Sio 

3mnod CMrtd.t i joo 2» 
ffT e ian e u ea . 60 219*2 

9ynAA*rra1- Ml MS 

T BN A300 242 

■nomnt 438 370 

TSOt 83» 224 

Tteeee V« IK 

Tna&Uta 484 439 

Tntor Woetena 1 JOO 1« 

T-«*t ^ 4JOO 249*8 

IftmeaWteat 491 535 

KunBIt U00 1071 

Tottedarf 4 JOO 241 

2JO0 00 

UCO 368 
1J00 1141 

1J00 333 

339 535 

5300 205*9 
704 m 

ijoo no 

381 712 

661 
675 
385 
152 
167 
819 
780 
W 
SB 


IMbdtextet 

UBLI 


Vtetnwaai 

DHteWUrr 

Vfteteetft 

WBBRnHfapLt 

MkCaiMi 


579 
3300 
817 
406 

_. 735 

YMaHeOML 4300 

'ftteteateter 272 

Zoaeaf 23)0 

Baem on wtee «teteoe tera eafeetfen eli 
aecuteae tktet Oaoagh 8 a SEAQ aynan 
yte a da / aite -OOsm. Tadn or oae raBan cr 
were a» landed dai-t'fcitfrraa an FT-GE 
100 ta - - 


♦1 

-1 

-2 

-10 

-6 

-2 

-30 

-30 


-2 
“ 1*2 
-2 
+4 
-6 
* 2 
- 1*2 
-10 

- 1*2 

-10 

-2 

-6 

-1 

-12 

-a 

-s 

42 

-4 

-6 

-0 

-2 

-a 

-6 

+10 


-4 

-10 

-11 


Rons 

nsn 


140 14 17 19 
1 GD 3 Mm 


2 6k 9 
12 17k 20k 


NO* M Bqr te Fab Har 


U Sera 460 95k 80k 78k 16 24 32 
r«6 J 500 30H 45k 56k 33k 44 52 
BAT Mb 420 20 (Ik 56k 11k 15 24k 
P443 ) 460 17 29 34k 30ft 34 48 

Blit 360 28ft 36 40k SV4 13k 19)4 

raao) 390 nHH s 2S a s 

BrtTefcnn 380 36 4ik48k 4k Mi 13 
(*389 ) 380 18 33 30k 15 23 26ft 

catteysa 460 37k 50 54ft 9 14 71k 
TOO) 500 IB 36 33ft 27» 33 41k 


* Bee BOO 54k 73k 9Bk 34 47 S3k 

rB13) 850 34 4882k 81 73 79k 

Grimes 480 37k 96 9 15 22 

C487 ) 500 16 38k 34 30 3S 42k 

SEC 300 17M 22 27 11 15 17k 

(-303 ) 330 Sk Dk 14 30 33ft 35k 


(178) 

Lome 

P144) 

Nal Fmcr 
rsi4> 
Seat Poeer 
moj 

Sears 

P 161 

fob 

ras) 

Tense 

nso) 

Ttamaa 

n«s» 

TSB 

P2«) 

Testes 

r»i> 

WDeDnt 

f710 ) 
Optal 


180 32 Hk 28 k Ik 4 6 
160 7 11 k 17 7 12 k 14 k 
140 9 15 ft 19 4 k 8 ft 12 

160 3 Dk 11 17 k 20 k 34 

50025 k 40 91 9 22 k 26 

SO 4 17 k 31 39 50 k 54 
390 37 k 41 48 5 14 k IB 

420 W Bk 30 18 Z 7 3 ZH 
110 12 14 18 k Ik 3 ft 5 k 
T 20 4 ft 7 ft 11 4 ft 7 ft 10 ft 
220 19 ft 24 29 k 3 8 12 

30 Bk 13 18 k 10 k 18 22 

140 23 25 k S Ik 5 ft 8 
180 9 13 k 17 k 7 k 14 ft 17 ft 

1000 X 78 85 15 k 33 k 50 
105 DWK 44 K SS 43 60 75 
220 9 ft 17 23 % 5 k 11 17 
240 2 9 14 19 B 28 k 

220 2 Cft 3 Bk 34 1 ft 5 ft 9 
240 8 17 k 22 7 13 ft 17 

700 31 k 88 ft 77 k IB 38 k 48 k 
750 11 3 SH 53 k 49 65 75 
Oct te for Oct tea Agr 


bsue Amt 
price paid 

P 

«*L 

cap 

1894 

Lav Stock 

Close 

Price 

P 


Net 

d*. 

Kv. Grs 
COr. f& 

PIE 

raft 

_ 

FJ>. 

2 SL 5 

100 

82 itAromascan 

96 

♦1 

_ 

_ 

_ 

. 

- 

FJ». 

2 CM 

89 

81 Bane G Stei Wrts 

81 


- 

- 

- 

- 

100 

F.P. 

114 

102 

100 Beacon hw Tst 

102 



_ 

- 

- 

- 

W\ 

142 

48 

43 Do. wamute 

48 



- 

- 

- 

18 

FJP. 

829 

35 

21 Camel 

34 


- 


_ 

- 

165 

Fi>. 

74.1 

173 

185 Chortatrttai PH. 

168 


W 73 

16 

55 

216 

120 

hJ>. 

125 

133 

118 Copyri^it fttim. 

126 


1 * 11.0 

26 

16 

445 

- 

F.P. 

371 

71 

88 Fre^xxt 

88 


- 

- 

- 

- 

- 

FJ>. 

156 

1*7 

l>z iMC tads wrra 

1*7 


- 

- 

- 

- 

- 

1 - 6 . 

T 9 ? 

94 

91 DWESOO jpn Dbo 

92 

-1 

- 

- 

- 

- 

- 

FA 

348 

50 

42 Da Warrants 

48 


- 

- 

- 

- 

- 

FA 

- 

77 

63 JF R Japan Wrts 

85 

-1 

- 

- 

- 

- 

— 

FA. 

20.4 

49 

35 {Magnum Raw 

48 

♦I 

- 

aa 

- 

- 

100 

FA 

655 

BB 

91 Old Mutual SA 

83*2 


- 

- 

- 

- 

- 

FA 

524 

45 

41 Do Watrama 

41 


- 

- 

- 

- 

23 

FA 

104 

31 

28 at*) 

29 


- 

• 

- 

- 

- 

FA 

050 

17 

5 1 ? Do. Warranb 

17 


- 

a. 

- 

- 

- 

FA 

126 

40 

38 PePpceWc 

40 


- 

- 

- 

- 

150 

FA. 

1785 

182 

157 tthr Property Inv 

158 

-2 

LN 3.7 

- 

26 

- 

- 

FA 

4.79 

44 

3 B Suter Wrte BBrW 

41 


- 

- 

- 

- 

in 

FA 

361 

105 

97 TR Bra 3 th Pig 

105 


- 


_ 

- 


FA 

ZAO 

35 

29 Tops Ess Wrte 

30 






RIGHTS OFFERS 








beue 

Amors Latest 





Ctostag +«r- 

price 

paid Rerun. 

1994 




Price 


0 

* 4 » 

date 

High Low Stock 




P 




340 

32 


Nl 


23/3 

3710 


53 pm 

l^jpm 


41 pm cabs Maw 
* 2 pm Raglan Props 


53 pm 

ipm 


ten 600 40 k SB 66 23 38 47 
[*629 ) 650 15 33 41 ft 53 ft 55 73 k 

RSBC 75 ptete 700 65 k U 99 25 ft 43 k 66 ft 
(- 733 ) 790 36 k 5 B 74 61 % GO 03 

Bates 500 27 k 43 54 15 25 32 
rS® ) 512 21 k - - 21 H - - 

Optra for Feb May No. for Itey 

Mbfloice 160 23 k Z 7 ft 30 4 Sk 8 k 

(*176 | 180 10 ft 16 ttk 12 15 18 ft 

‘ (Jrteetete Mcuffr prica PranAm *»vm oe 
(need on cfeatog orbr pdas. 

September 1 . Total warn one. 34.060 CeBs: 
10S9S Rtf* -4 


HNANCIAL TIMES EQUITY INDICES 

Sep 1 Aug 31 Aug SO Aw » Aug » Yr ago 


*Hj* *Loer 


Orteaty Share 2506.4 2 S 35.0 2539.9 2552 . 0 . 2529 J 2401.4 27136 22406 


Old. dh». yield 

467 

4.03 

4.02 

460 

4.03 

3.84 

466 

3.43 

Earn. yKL % U 

568 

560 

8.79 

5.76 

661 

453 

566 

3.82 

PIE ratio net 

1827 

18,44 

18/48 

1858 

1862 

28.17 

3843 

1769 

P/E na 

1867 

19 JB 

1960 

10.19 

1963 

2061 

3060 

1861 


FT GOLD MINES INDEX 



Mo 

31 

KtbB 

oatty 

M Abb tar 

30 2 B ape 

ten 0 i 
Hetf K 

52 MS 

H0i Lew 

I 

f 

1 

s 

208237 

+16 

283854 2821,15 189862 

265 

236740 15226B 

■ naglisil laaeea 






AMaW 

318268 

+66 

317X4J 309947 234059 

42B 

344060 190X23 


2758.41 

+1.7 

Z7t168 8SSQ67 2S13B 

168 

301389 1K3.18 

Norm tewriesna 

1S53J2 

+13 

163X08 181X14 1BM87 

0.78 

2(0968 136360 


-For 1994. OnSnoy Share Mn term u np te d un. Wgh 7TO& 2JD2flM; lea 494 28/efao 
FT Onteoy ten Met ban dm VTrtb. 

Otebmry Stare hourly clu ngee 

Open PLOP KLOO 11J0Q 1900 13JD UjQO 1&00 16J0 Htfa Low 
2S2S.4 2529.6 25215 2518.7 2517.7 251 (U 2515k 2511 J 2506.3 253X2 25072 
Sep 1 Aug 31 Aug 30 Aug 28 Aug 2S Yr a go 


Cepplght The Pram* Tins iMad 1994. 

Rpne ta taactan teear mrber cl rnm p en le x Bob US DaBara. Bate lUac 1CWXOO 31/I2A2. 
rwitere i anr OcM Mnes Indra Sap 1 ; SS4J1 ; dnCa dea gs -ai pants: Tea n p ra tau t note. 
Lmte Ptee eoe ranteb fhr Me adteoe. 


SEAO tnrgairo 29^23 31.643 35 

Equty tranom Emit - 1627 j8 121&6 

Eqiity i M g da t 35^26 38,374 

Sheees Boded (mQT - 583 ^ 4632 

Ibddig ntra-maritM buteneee end i 


1609.0 

35263 

5042 


34291 38,133 

1994.4 1727.7 

37,793 40248 

718 L 8 613.7 


























































J 




'X'ITj 


FINANCIAL TIMES 


FRIDAY SEPTEMBER 2 1994 


LONDON SHARE SERVICE 


*. 

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CURRENCIES AND MONEY 


FINANCIAL TIMES FRIDAY SEPTEMBER - 1994 


MONEY MARKET FUNDS 


MARKETS REPORT 


POUND SPOT FORWARD AGAINST THE ROUND 


No change from Buba 


Traders were yesterday left 
twiddling their thumbs after 
the Bundesbank council left all 
its leading interest rates 
unchanged, writes Philip 
Gatmth. 

The Bash’s decision, leaving 
the discount and lombard rates 
unchanged at 4‘A per cent and 
6 per cent respectively, and the 
repo rate fixed at 4£5 per cent 
for a further two weeks, was 
widely expected. 

In the US the dollar weak- 
ened after the prices compo- 
nent of the August purchasing 
manager's index rose to 74JS, 
the highest level in six years. 
This prompted weakness in the 
bond wwricp^ apd a fail in the 
Dow Jones industrial average 
below 3,900, which hnrt the 
dollar. 

The dollar finished in Lon- 
don at DMl.577 from DML5788. 
Against the yen it closed at 

Y99.665 from Y1Q0.175. 

The focus has now shifted to 
the release today of US pay- 
rolls data. The prospect of a 
long weekend in the US also 
curbed the market's appetite 
for taking large positions and 

this had a dampening effect OH 

volumes. 

In Europe the D-Mark was 
little ch a n g ed after tha Bundes- 
bank’s decision to leave rates 
unchanged. Sterling had a very 
quiet day, with the trade 
weighted index unchanged at 
79.L 


Germany 


Repo rate (MJ -. 



: -Jan' • «8* 

Saute: FT Graphite- * 


ha Haw Vofk 


-Latest — -Pro». ctete- 

1.5435 1.5335 

1.5433 1-5333 

1.5416 1.5316 

1-5230 1.5130 


dieted it would be stronger in 
6-12 months time. 

Analysts said the market's 
response had been constrained 
by the release of the monthly 
employment report, and the 
start of a long weekend. Some 
traders are expected to start 
squaring their positions with 
Labour day and Rosh Has- 
hanah holidays next week. 


political risk premium in both 
the franc and domestic bond 
yields." 

Elsewhere in Europe the lira, 
having recovered to Ll,0QQ, 
again foil victim to profit-tak- 
ing. The catalyst was a 
renewed bout of political 
squabbling, prompted by com- 
ments from Mr Umberto Bossi, 
the Northern League leader. 

Mr Bossi alleged that the 
prime minister, Mr Sflvtn Ber- 
lusconi, had asked President 
Scalfaro’s permission to can a 
fresh general election in the 
hope that the League would 
lose much, of its vote. 

Both the president and prime 
minister denied claim, but 
it served as a reminder of the 
frag ile nature cf Italy's ruling 
coalition. The episode also cast 
doubt on whether the requisite 
political resolve exists to deal 
with difficult issues, like curb- 
ing state spgiwtiwg 1 - 


E The response of US markets 
and the dollar to the purchas- 
ing managers' index was a 
reminder of the bearish psy- 
chology which continues to 
plague the dollar. Some ana- 
lysts had recently predicted 
that softer than expected data, 
which was good for the bond 
market, might be the catalyst 
for a dollar revival. Yesterday's 
movements suggest that rea- 
soning to be premature. 

Analysts said the softness of 
other parts of the report - such 
as foils in new orders, produc- 
tion and the employment index 
- should have offset the prices 
index and prevented the dollar 
going lower. 

Earlier the dollar had 
received some encouragement 
from Mr Robert Mcteer, presi- 
dent of the Dallas Federal 
Reserve bank, who said the 
long term outlook for the dol- 
lar was pretty good. He pre- 


■ The Bank of France left its 
intervention rate unchanged at 
5 per cent, despite the decision 
earlier in the week by leading 
French commercial banks to 
raise interest rates by 25 haria 
points. 

Although the franc was 
fairly firm, analysts warned 
that trouble may lie ahead. 
Economists at Nikko Europe 
say that unemployment which 
foil to 3.07m in July, will be the 
main issue in the May 1995 
presidential election. 

They argue that the economy 
needs further stimulation, but 
the c ommi tment to reduce the 
budget deficit removes room 
for fiscal manoeuvre, while the 
Bank of France's commitment 
to a stable Franc/D-Mark rate 
means French rates are set in 
relation to German rates. 

The Nikko economists pre- 
dict that there will probably 
only be one further cut in Ger- 
man rates, in late September/ 
early October. “The French 
economy needs more than just 
one interest rate cut (but) it is 
not likely to get it This is 
likely to lead to an increased 


■ The Bundesbank's derision 
to leave its official rates 
unchanged, and to fix the repo 
rate at 455 per cent for a fur' 
flier two weeks, elicited limited 
market response. The Decem- 
ber Euromark contract traded 
27,315 lots to close at 94B4 from 
94.88. The decision was fairly 
widely predicted. 


Sapl 

Closing 

midwirtt 

Changa 
on day 

BkMoRar 

apmod 

Day's MM 
hMi tow 

Bwope 







Austria 

(Seri 

17.0968 

+08299 

872 - 060 

17.1060 178510 

BeJghim 

J3F* 

488882 

+08773 

611 -452 

608452 

408800 

Danmark 

po) 

82772 

+08142 

725-818 

*5018 

98601 

mend 

im 

78409 

+08021 

307 - 511 

78611 

78080 

Frmnco 

(FFO 

83130 

+08132 

080- 180 

88211 

82914 

Qatmrary 

PW 

84290 

+08039 

278 - 301 

2.4314 

24217 

Greece 

w 

368225 

+081 

474 - 178 

389.178 36&480 

Inland 

w 

18127 

-08007 118 - 135 

18164 

1.0110 

iWy 

.« 

243520 

+8.7 442-678 

243786 242989 

Lunombourg 

If* 

48898Z 

+08773 

511 - 452 

500452 498800 

HeUnrtands 

(H) 

2.7250 

+08034 

- 268 

27270 

27190 

Norway 

{NKrt 

102382 

+0803 

332 - 432 

108501 

10818T 

Portugal 

<Ba) 

247811 

+0885 

163 - 468 

247869 248884 

Spain 

(Ptel 

201884 

+0805 

221 - GOB 

201.703 200832 

Sweden 

(SK>) 

118547 

-08175 

431 - 662 

118953 118301 

Swttxartend 

(Sfr) 

28395 

-08041 

384 - 405 

28454 

28380 

UK 

n 

- 

' .. 

. 

_ 

- 



12713 

+08018 706-719 

1-2723 

12689 

SORT 

— 

0843742 


_ * 

_ 

- 

nmrateaa 







Argentina 

(Peart 

18401 

+08038 895 - 406 

18408 

18317 

Bred 

n 

12632 

-0802 

612 - 651 

18881 

18578 

Canada 

(cl) 

2.1066 

moons 

065 - 077 

2.1077 

28966 

Mexico (NewPtrao) 

52194 

+08037 

138-249 

58249 

5.1877 

USA 

A 

12403 

+08038 

396 - 408 

18408 

18319 

PamWcIMMcia 

i EaotMMca 





Auebata 

m 

28730 

+08091 

716 - 743 

28743 

28637 

Hong Kong 

(HK« 

118029 

+08288 

968 - 070 

118070 118388 

■nda 


488212 

+0.1231 

997 - 426 

403426 48.0630 

Japan 

W 

153814 

-0405 

426 - 602 

153870 153.170 

Mriayais 

m 

38391 

+08072 

374 - 408 

38408 

38211 

New Zealand 

(N2» 

28546 

+08024 

527 - 666 

25585 

28405 

■M . H . _ 1 

rrmppmOG 

Peso) 

40.7026' 

+0.0621 

198 - 853 

4f)Pfrg3 

404021 

Saudi Arabia 

earn 

57788 

+08143 

748-789 

5.7789 

5.7455 

5fcigoporo 

(S« 

28109 

+08062 

097 - 120 

23120 

22985 

S Atrica (ComJ 


58247 

+0.0128 

217 -Z76 

58276 

5.4960 

S Africa (RnJ 

(F» 

68776 

+08633 

599 -962 

48952 

(19008 

South Korea 

(Wort 

123288 

+281 

230 - 341 

123041 

122829 

Tahm 

(TO 

404175 

+0.1BSB 

BST7 - 352 

404352 

40.1065 

TbaAand 


388480 

+0872 

181-739 

388739 

382080 


Ona month Three mono* Bank of 

Rat* %PA Ftm HPA Rate XPA Eng. *08* 


02 

178804 

04 


. 

•1158 

02 

508132 

-0.1 

49.7902 

04 

1105 

HW 

08041 

-1.1 

08384 

HW 

1102 


_ 

. 

„ 


848 

-0J3 

82172 

-02 

82804 

04 

1008 

a 0 

2^4284 

04 

22978 

18 ' 

1258 

HL8 

18146 

HL7 

18203 

-0.7 

1048 

-3A 

2458.1 

-32 

25168 

-38 

757 

08' SX0132 

-0.1 

407832 

04 

1185 

-0.1 

27222 

04 

28803 

12 

1204 

02 

108457 

-02 

108317 

Ol 

868 

-8.4 

252221 

-72 

- 

. _ . 

— 

-28 

202829 

-28 

206884 

-28 

888 

-22 

118267 

-24 

121472 

-25 

742 

08 

20337 

1.1 

22014. 

12 

121.1 


- 

- 

- 

• 

79.1 


I \ 

i 

!M4 / 

ts • s 


1 | | " 


miroaMM 

ttofcooo* 


2.106 

04 

21082 

Ol 

2108 

08 

18401 

02 

18385 

08 

18257 

08 

28729 

0.0 

28743 

-02 

28025 

-OS 

11899 

04 

118979 

02 

118049 

08 

153204 

24 

152219 

51 

147.634 

38 

2^85 

-18 

28883 

-18 

28085 

-12 

- 

- 

- 

- 

• - 

- 


ISOfl ratal fer Aug 31. BdWftr vnrt ki flw ftxad Spot Mta mtarn or 
marioM but are knpi*l By cured Mm Mml Storfho tack* cafatattd by t 
Ms and the Dotar Spo4 tafahra derivad tarn THE WMffiEUTEflS CLOSMB ! 


Sw wra ps 1808 - loom, alter tad t 
taw n round*) by 9m F.T. 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


■ Scandinavian currencies 
have recently been surpris- 
ingly firm, but Mr Muj King, 
global director of forex and 
money markets at Technical 
Data in London, predicted that 
a correction of “several big fig- 
ures” was due. “This retreat is 
especially possible because the 
B undesbank is at the of a 
cycle of cuts and thus German 
interest rates are likely to firm 
and have an adverse effect on 
the Scandinavian bloc.” 


■ The Bank of England pro- 
vided UK money markets with 
£462m assistance, at estab- 
lished rates, compared to a 
forecast shortage of £500m. 
Overnight money traded 
between 3% per cent and 5 per 
cent 


MOIHSH CUHR H CM 3 


tagary 166.488 - 1G6J60 

ta 2881-00 - 2B0U0 

Kara* 045B2- 04601 
Wind 355324 ■ £5709 

talte 337025 - 3377.88 

UAE 56573-5087 


106.130 - 106230 
174000 - 173000 
02862 - 02886 
230700 - 230600 
210000 - 21 9300 
30715 - 30735 


Sepl 

i 

Ckxring 

ifid-poW. 

Change 
on day. 

spread 

Day’s add 

IMi kw 

One month 
Rais «PA 

Tlaraa mndtra 
Rate MPA 

One year jj> Morgan 
Rato MPA -Mac 

Europe 













-■ 

Austria 

(Sett) 

118996 

-0008 

970- 020 

11.1360 118920 

118996 

08 

118993 

oo 

118245 

07 

104.1 

Baiglun 

(BR) 

noAtmn 

-003 

400-800 

328770 324400 

32.485 

HL9 

328 

-08 

3282 

-08 

105.7 

Dantnerk 

pKr) 

62177 

-00062 

167 - 187 

68437 

02167 

02242 

-18 

024S2 

-18 

6J3227 

-1.7 

104.7 

Finland 

(FM) 

5.0905 

-00112 

855 - 955 

5.1092 

58855 

6883 

-06 

6.1045 

-1.1 

6.1755 

-1.7 

78.8 

Rsncf 

(FFO 

52970 

-08048 

955 - 985 

64195 

58930 

54 

-0.7 

5.407 

-07 

68883 

08' 

106L1 

Oentaaiy 

(D) 

18770 

-00013 

787 - 772 

18830 

18754 

18772 

-08 

18773 

-on 

18715 

• 03 

1008 

Greece 

(Dr) 

239450 

. 

300 - 600 

240480 238800 

238.75 

-18 

240425 

-18 

243025 

-1.6 

690 

fariand 

OP) 

18211 

+00049 

203-218 

18218 

18113 

182 

08 

18161 

is 

14846 

1.7 

mm 

Italy 

OL) 

168125 

+1.75 

100 - 150 

1583.70 158180 

1586 

-38 

158075 

-07 

165075 

-44 

780 

Lurwtoourg 

(U=r) 

324600 

-003 

400 - 800 

328770 324400 

32485 

-08 

328 

-08 

3282 

-05 

106.7 

Neitiartanda 

(R) 

1.7891 

-08022 

886 - 696 

1-7758 

1.7679 

1.7682 

HL1 

1.7694 

HL1 

■ 1.7834 

03 

. .1050 

tkwmv 

(NKO 

68066 

-00151 

056 - 078 

03364 

09056 

09091 

-04 

6.9210 

-09 

68388 

10 

960 

Portugal 

(Es) 

160560 

-014 

510-610 

161.100 160810 

16181 

-7.1 

163.185 

-68 

17088 

-60 

95.1 

^Mln 

(Pte) 

130730 

+0805 

880 - 780 

101800 130880 

131865 

-38 

131 885 

-38 

13488 

-28 

807 

Sweeten 

(SKr) 

7.6963 

-00305 

913-013 

7.7533 

78913 

7.7138 

-2 J 

7.7543 

-38 

78563 

-34 

790 

Swttoertand 

(Sft) 

12241 

-08069 

238- 243 

18325 

18238 

18233 

07 

18219 

07 

18118 

09 

1064 

UK 

« 

18403 

+08038 

398 - 408 

18408 

18319 

18401 

02 

18385 

08 

18257 

00 

874 

Ecu 


12117 

+08015 

114 - 119 

18119 

18070 

18106 

09 

18069 

00 

10013 

09 


sewr 

_ 

144770 

- 

- 

. 

. 

. 

- 

. 


. 

. 


rtmrartran 














Argentina 

(Peso) 

08989 

. 

998-999 

08999 

08998 

. 

■a 

- 

. 

- 

- 

_ 

Brazil 

m 

08890 

-00036 

640 -860 

0L886O 

08840 

- 

- 

- 

- 

■ - 

-• 

_ 

Canada 

pn 

12677 

-00039 

674 - 679 

18682 

18655 

18686 

-07 

18896 

-08 

18807 

-10 

832 

Maxlca (New Peart 

32865 

-0006 

860-010 

• 38330 

38860 

38895 

HU 

38913 

-08 

38967 

-08 

.ra. 

USA 

(S) 

- 

- 

-■ 

- 

- 

- 

- 

- 

- 

- 


978 • 

PaoMcMUile East/Africa 












Aunrala 

(AS) 

12459 

+00021 

454 - 463 

18493 

18454 

18462 

-02. 

18469 

-08 

18642 

-08 

88.4 

Hong Kong 

(WO) 

7.7277 

-00003 

276 - 278 

7.7279 

7.7275 

7J274 

08 

7.7283 

08 

7.7432 

-00 

_ 

India 

(Rrt 

318713 

+00025 

675 - 750 

i 

1 

314563 

-38 

318013 

-28 

- 

.. 

•- 

Japan 

m 

998650 

-081 

400 - 900 

100280 998000 

9B465 

24 

90015 

28 

9076 

20 

1498 

Malaysia 

m 

28574 

-00016 

571 -578 

28615 

28671 

28482 

48 

28369 

38 

28104 

-2.1 

_ • 

New Zealand 

<NZ St 

18585- 

-00025 

578 - 592 

1.8020 

18566 

18994 

-07 

18813 

-0.7 

18666 

-05 

. _ 

RriMAxa 

flPeert 

204250 

-0025 

600-000 

206000 202500 

- 

- 

- 

. 

- 

- 

_ . 

Staid Arabia 

(Sfi) 

3.7504 

- 

502 - 506 

3.7508 

3.7503 

3.7517 

HU 

3.7568 

-08 

37744 

-08 

_ 

Stngepare 

(SS) 

18003 

+08003 

000 - 005 

18006 

14090 

1.4989 

1.1 

1497 

09 

14003 

07 

_ 

S Africa (QomJ 08 

05868 

HUMS 

860-875 

38875 

&58S0 

38023 

-&2 

38306 

-48 

3J073 

-34 

_ 

S Africa (Fin) 

IW 

48300 

+003 

200 - 400 

48400 

44960 

48637 

-09 

4.6225 

-02 

. 

- 

- 

South Korea 

(Wort 

800400 

-015 300-500 

800800 800800 

8034 

-48 

8009 

-80 

8254 

-3.1 

. - 


(IS) 28-2400 +0.0485 370 -430 282555 282200 2828 -OS 


(BQ 2502SO >02715 150-360 25.0450 260150 250075 -85 252*25 -82 25L706 -2.7 


ttfflB rata lor Aog *1. BMtata mads ta too Data %nt table *kw ariytbe tad Una doctoral ptaeea. timrad rata* an not dtawdy *wmd to dta mortal 
la* eekiariad by ament Manet ntaa. UK, Maid A ECU wa quoted ta US waney. 4P. Morgan nanhel tadfcea Am 31. Braa r i n g* mortal 00 


CROSS RATES AND DERIVATIVES 


: 7 1 . i cl 



CROSS RATES 


Ecu 

Van pa 1000; I 


BFr 

□Kr 

FPr 

DM 

K 

L 

FI 

NKr 

Ee 

Pta 

SKr 

SFr 

£ 

CS 

t 

Y 

Ecu 

(BFi) 100 

19.10 

1683 

4859 

2028 

4871 

6451 

2128 

484.7 

402.7 

2070 

4079 

2.000 

4215 

3.081 

307.1 

2843 

(DKr) 5220 

10 

8880 

2836 

1058 

2543 

2846 

11.11 

2582 

210 2 

1207 

2.129 

1044 

2200 

1808 

1603 

1027 

(FR) 6013 

1182 

10 

2022- 

1219 

2929 

3278 

1280 

2978 

2422 

1426 

2453 

1203 

2836 

1853 

184.7 

1829 

(PM) 2086 

0943 

3422 

1 

0417 

1002 

1-122 

4080 

1018 

8287 

4879 

0838 

0412 

0867 

0834 

63.19 

0823 

0£) 4985 

9454 

8206 

2088 

1 

2404 

2.590 

1080 

244.1 

198.7 

11.70 

2013 

0987 

2090 

1820 

1518 

1255 

lU 2063 

0893 

0341 

0100 

0042 

100 

0112 

0437 

1016 

8287 

0487 

0084 

0041 

0087 

0063 

6804 

0052 

(FQ 1884 

3814 

3051 

0801 

0072 

8938 

1 

3005 

9075 

7387 

■4.340 

0748 

0387 

0773 

0566 

6033 

0466 

(NKr) 46.96 

8.001 

7813 

2283 

0952 

2289 

2861 

10 

2324 

1892 

11.14 

1016 

0940 

1080 

1447 

1440 

1.195 

(Es) 2021 

3873 

3082 

0082 

0410 

0848 

1.102 

4002 

100 

8140 

4.792 

0825 

0404 

0852 

0823 

82.07 

0614 

(Pta) 2483 

4.768 

4.130 

1207 

0803 

1210 

1064 

5286 

1228 

100 

5887 

1013 

0407 

1047 

0785 

7025 

0831 

(SKi) 42.19 

8082 

7016 

2.050 

0.855 

2055 

2000 

8079 

2082 

1608 

10 

1721 

0844 

1.778 

1000 

1298 

1073 

(SFf) 2482 

4807 

4077 

1.101 

0407 

1104 

1036 

6218 

1210 

96.72 

5812 

1 

0490 

1033 

0755 

7528 

0623 

B 4099 

9877 

8013 

2429 

1013 

2435 

2.725 

1084 

2470 

2010 

1188 

2039 

1 

2.107 

1840 

1638 

1271 

(CTO 23.73 

4846 

3045 

1.153 

0481 

1158 

1293 

5.050 

1174 

9584 

5024 

0988 

0475 

1 

0731 . 

7286 

0803 

(S) 3246 

6219 

5898 

1877 

0858 

1501 

1.789 

6009 

1808 

1307 

7885 

1024 

0849 

1868 

1 

9986 

0825 

(Y) 325.7 

62.39 

54.16 

1582 

6899 

15863 

17.78 

6B3? 

1811 

1311 

7720 

1328 

6815 

13.73 

1003 

1000 

8280 

3983 

7836 

8841 

1.911 

0797 

1916 

2.144 

8071 

1948 

1584 

9823 

1804 

0787 

1868 

1212 

1208 

1 


EMS EUROPEAN CURRBKY UNTT RATES 

Sepl E cu can . Rata Change % +Afrorn % spread Ok 

ram egshstEcu on ’ 


can. nda v weakest ind. 


Balgkan 

Oacmany 


2.19872 2.15173 +000082 

402123 384890 +00207 -156 

104904 1-91788 +000179 -182 

0808828 0788686 -0001457 -183 

853883 858200 -080433 085 

182854 196814 40288 188 

7.43879 758282 -080131 188 

154850 199828 -0875 3.10 


585 

584 13 

480 

488 8 

273 -3 

180 . -8 

188 -12 

080 -22 



I Snodrii Kroner par 1 


i Franc. Escudo, Ln t 


FUTWapMM) DM 125.000 par DM 


I (WM) Yan 125 per Ylan 100 


NON ERM MEMBBtS 

Greece 264513 291825 +0.443 10.10 -688 - 

Maty 1783.19 192188 -8.78 7.17 -880 

UK 0788749 0789809 -0800525 083 279 

Ecu canM raw gat by tea Baopaan Cmtabv Omnda am In daaemtaB iteMa aMngta. 
Panaw au a dramas ara Mr Ecu: a praMno changa danotes a weak cwiraicy. Ptara gra ce teoraa tea 
Min bawl taro a p raa dr tea paraantaga M rara cii ba ta era tea aaua rented aid Ecu carted rataa 
tateunaocy. and tea mradmumparinteBcIpaKian ta OB d aiita llnn ol tea onancaramat M t r ate bora ta 
Eoi canota rata. 

078MB) Stadteg and Rtetaa Lkaraspandsd Imm BtaL Adurtnara cafcriraad ny too financial Those. 



Op«i 

Latest 

Changa 


Low 

EsL voi 

Opan int 


Open 

Latest 

Change 

High 

Low 

EeL vrt 

Open tot. 

Sep 

08320 

06327 

+00003 

06331 

0631 7 

23888 

908985 

Sep 

09997 

10010 

+00011 

10011 

09984 

12885 

58096 

Dae 

05325 

0.8328 

-00002 

08330 

06318 

9823 

14071 

Dec 

10060 

1.0076 

+00008 

1.0078 

10060 

1013 

11212 

Ms 

06322 

06325 

-0.0011 

08325 

06322 

32 

2886 

Mar 

10140 

10140 

+00002 

10140 

10140 

34 

1,747 


■ 8W88 WUHC WWIB WW SFr 125800 pr SR- 


I HfTUHSS (MM) EB2500 per C 


■ m UP6W4 88 K/8 OP1W8 E31 060 (canto par pound) 

Soft* — CALLS ' — 1 

P*a Sap Oct Nov Sap 

I860 ft.48 839 8.43 

1475 586 688 884 

1800 355 383 488 084 


S*P 

07506 

07530 

+00023 

0.7535 

07506 

11239 

36000 

Sep 

18356 

18384 

+00018 

Dec 

07540 

07543 

+00003 

07548 

07534 

49547 

5067 

Dec 

18340 

18338 

+00006 

Mr 

- 

07558 

- 

07558 

- 

1 

60 

Mr 

- 

18294 

+0.0004 


1825 153 272 0.4* 1.18 

1880 058 184 156 7.75 248 

1578 083 040 080 384 457 

nanism ttajTa vat. Cteta 9MB, Pun 2578 . Frar. day* opan bit. Cate &80L894 total 481 JOS 


WORLD INTEREST RATES 


INTEREST 


MONEY RATES 

Saptambar 1 Ow Ona Ham Btx Ona Lomb. Ota 

Nphi monte mtfw mfta year Inter. rata 


I BUMIunC nmims flJFFET DMIm potato Of 100* 


Belgium 

4ft 

week ago 

*a 

Renee 

5| 

week ago 

51 

Qenneny 

4.90 

week ago 

480 

Inland 

48 

week ago 

41 

Italy 

B» 

week ago 

a\> 

Nethertande 

4.B4 

wraek ago 

4.BS 

awfaartand 

38 

weak ago 

3ft 

US 

41k 

week ago 

4H 

Japan 

2ft 

week ago 

24 


5% 5% 

5* 8 

5ft 5* 

5ft fift 

4.96 5-02 

485 5,00 

8ft ft 

81 84 

8* 9ft 

84 94 

489 5.11 

488 5,12 


6ft 7.40 
6ft 740 
6ft 580 
84 580 

583 800 

583 880 

7ft 
7ft 
104 
101 

5.42 

6.42 

4Q 8626 



Opan 

Sea price 

Change 

Ugh 

Low 

Ebl vd 

Open tot. 

Sap 

SS0S 

9501 

•003 

96.06 

9500 

17482 

140424 

Dec 

9489 

9484 

-004 

8489 

9483 

27873 

160941 

Mr 

9488 

8485 

-004 

8480 

9483 

16683 

166401 

Jun 

8427 

9423 

-005 

9428 

9420 

16897 

100132 


L MTJMilK WKMW8 PJFFQ LlOPOrir pohtt of 100ft 


4|) 9.825 

5ft 


Opan 

Son price 

Change 

High 

Low 

ESL vd 

Open tot 

91.05 

9107 

-am 

91.10 

9102 

3119 

22494 

9009 

9006 

-006 

9013 

9004 

8372 

36368 

6987 

8082- 

-007 

8907 

8048 

961 

17788 

89.18 

8013 

-006 

8018 

88.11 

485 

13435 

OTTH 

EURO swim 

■ FRANC nlTURU QJFFE) SFrtm potato rt 100% 

Open 

Sett price 

Change 

Wgh 

LOW 

ESL wl 

Open tat_ 

96.87 

9588 

- 

85.89 

9800 

1734 

18510 

9506 

9501 

-004 

8508 

9627 

3806 

14348 

8500 

95.06 

-003 

95.10 

95.04 

1020 

11603 

9481 

94.75 

-002 

9401 

84.75 

574 

5772 


LONDON MONEY RATES 





Sepl 

Over- 

night 

7 days 

notice 

One 

rnan&i 

Three 

monta 

ax 

norths 

One.. 

yer 

totortxmkStaritog 

5-3^ 

«-4* 

5-4 ft 

s%-si 

6-5% 

Oft- A 

Staring CDs 

- 


4B-4B 

Si-Si, 

5S-S% 

6H-© 

Traasuy BBs 

- 

- 

4%-4H 

5ft-5ft 



Bank B>s 

- 

- 

4%-4H 

6ft -Si 

5S^S% 

_ 

Local author*/ daps. 

4A-4A 

<3-4% 

4B-4% 

SK-5B 

5S-5H 

63-aa 

Otecomt MeM daps 


4\-«, 

* 

- 

- 


UK cteering bank base fcndng rate SVi pr ort than February B, 1984 



Carts allte dap.- {C100800I I 1 * 4 37* 31* 

Crate «f Tec dap. wdv £100400 Is 1 1gse. ItapateB wabdraraa ta ratei \ec. 

4m tendar rate et daooum BJaSTpc. 800D Bead rata 840. Bipcrt Fteanoa. Mtara ipdw Aon 31, 
1804. Aqnad rata larp«talta>2B.1804bOct29 18M. Sdramaa I A HI AJBpa. Atawanoa rata br 
prated 4*y 30, HH to Aug M. 1004, 3chraraa IV a V 957*e. Itan Herat 9am Rate An koar 
Aon L 1004 


Standard ^Chartered 


Standard Chartered PLC 

taapaK —H a tadtaMtatatateta 


£150 milfion Subordinated Floating 
Rate Notes due 1996 


In accordance with the provisions of the 
Notes, notice is hereby given that for the three 
month period from 31st August 1994 to 30th 
November 1994 the Notes will bear interest at 
the rate of 5.6625 per cent per annum. 

Interest per £5,000 Note will amount to -£70.59’ 
and will be paid for value 30th November 1994 
against surrender of Coupon No 34. 


West Merchant Bank Limited 
Agent Bank 


| Eeulm point! of 100ft 


■ S LBOR FT London 
Mtatrank Fbdng 
araak ago 
USOotar Ctta 


54 « 


4.86 480 6.07 5.58 

485 4.78 5.07 901 

SDR United Da - 3ft 34 3ft 4 
Mnk ago 3V» 34 3ft * 

BCU United da mid ntara l mar Mfc 3 nata: SK 0 mow; 61k; 1 yarai 6ft. * UBOH teM 
n ate an alhnd rates tar SlOn qaatad to Hw madtet by bar rataran ei) tanka at lun ara 
Oy. Tho Draiks anc Bankraa Tiud. Btetk «r TblqB. 8«Ttayi and Mdtenta Wa n iil M Mr. 
IM tana ara tatewn hi toa domaata: Mgnay Rtaaa. US S CDs and SCR Untad CtapMta 






Open 

Sae price 

Chongs 

High 

Low 

E*L vol 

Open tot 

- 

“ 


Sep 

9403 

9403 

- 

9408 

8389 

718 

8334 

"" 


*“ 

DSC 

8052 

saw 

- 

9305 

3349 

737 

7375 

- 

- 

- 

Mar 

9019 

83.17 

-001 

83.19 

8315 

177 

4199 

" 



Jun 

8200 

92.77 

-001 

9200 

92.75 

52 

1626 


■ TWO MOUTH 8TWJMQ IWUM8 £500800 poWanTIOOft 


Open Stetprios Changa Ugh Low 6*t v ol Open H. 
Sap - 8489 9430 +OJJ3 9432 8428 7840 88267 


AUSTRALIA AND 
MEW ZEALAND BANKING 


Daa 93.41 9343 +903 8347 9341 

Mar 92.72 92.74 +083 92.78 9272 

Ami 9220 B221 +005 9223 9218 

Hatted an APT. Al Opan maraat Bgs. ran tar parioua day. 


15781 184223 
7308 87927 
2848 82887 


EURO CURRENCY INTEREST RATES 


Baignr Franc 
Ctantah Krona 

Dutch OuBder 
Rancn Ftanc 
RarugueM Eac. 
Spetai p im m 
S taring 
Swim Franc 
Can. Ooiar 
US Orta 
MMnUm 
Vtai 

Man Stag 
Shell Mm rataa ■ 


Short 

tom 

7 days 
notice 

One 

month 

Hxee 

montha 

Six 

month# 

One 

yer 

4S 

•4H 

6 -4ft 

5ft ■ 5 

5ft -V. 

5ft - 5ft 

6ft 

-8ft 

6f% 

-4ft 

5ft - 5ft 

6 -5ft 

sij - eft 

7ft -7 

7ft 

-7ft 

411 

-4H 

4U-4H 

4H - 4}i 

5 -4ft 

5ft -5 

5ft 

-5ft 

4ft 

-4ft 

4U-+H 

4ft -4ft 

5-4ft 

5i-5A 

stl 

-5ft 


[ MOMH BUBODOLUai Sim pointo of 100ft 

Opan Latest Changa «S*i Low Ebbuol Opan im 

9486 9498 +0.01 9496 9486 3S87S 396809 

9431 9430 - 9431 9429 70791 483468 

9404 9404 - 0405 9483 44527 370,718 


' OTMmjMB Q**TKMt> QJRFg ES00800 potato al 100ft 


Sim par 100ft 


Sbfo 

Price 

Sep 

— CALLS - 
Dae 

Mar 

Sep . 

— pins 
Dec 

9426 

ai6 

005 

003 

oil . 

087 

9450 

004 

002 

niw 

024 

100 

9475 

0 

001 

001 

045 

. 103 


5H-5U 5A-5A 

12 >i - 11% 10*| - 10 


S« 2 *rt 
lllj . 11 
7 

5U * Sl* 
4^ -4I| 
BA - BA 
2A-27Z 
*&’4& 


5V5>t 

im. ■ im in. -im. ntt-iii 
r 1 1-» BA-Bi. 8%-a^ 
6|i - 5B B - 5* 6% - 61, 

4,1 -4d 4b -4* 4ii-4H 
5li - 8 - 5* - Sft 

5-4% 5,1-54 SU-Sft 

BH - 8ft 9ft - 9ft 10% - 10% 
2ft - 2% 2% - 2ft 2% - 2ft 
4\-4H 5ft - Su 5U-5!i 


wna 9587 - 9588 9587 

9485 9485 +901 9485 9485 

9486 9455 • 9458 9464 


1802 12856 

382 10JJ16 

34 .3880 


. Qtaa 4167 nnm lOflHL FMoa dtete opan M. CM! 648058 Pate 288881 


1 8ga- «a tor pwta dv 


Staffing Abating Rale Notes 

due 1997 

In aocordanca) wMi the provisions of the 
Notes, nodes ia Iraraby otan that the 
rate ol bitoreer lor the period tram 
August »«. 1994 U) Nouerttwr SOtti. 
S94. has been bad al 58875 par cant 
par annum. 

On November am, 1994 Interest at 
staffing 7080 per surfing 5,000 nominal 
amount of the nobs, and Merest of 
starting 35449 per starting 25800 
mminal amount of U» Notes. wS be 
due against Coupon No. 40. 

Swtaa Bank Corporation 
London 

f tetere n oe Agent 



Sovaragn (Forex) Ltd. 
24hr Foreign E xc hange 

Mragia Iracfing fari&jr 

Competitive Pricac 
OoSljr Rot Sarvira 
ftfc 071-931 9188 - 
Froc071-931 7114 - 

42 a B a rW i jfiuai MaatfioaB 

LaadeaMriWOtt 


■jrawauuiK OmoNS fiJFFe CMIm points Q( 100 N 


BASE LENDING RATES 


Strike 

Price 

S*P 

Oct 

CALLS — 
NOV 

Dec 

Sep 

Oct 

PUTS 

New 

DM 

9500 

004 

004 

007 

009 

003 

020 

023 

025 

0626 

0 

001 

ao3 

003 

024 

042 

044 

044 

9560 

0 

0 

001 

002 

046 

006 

067 

068 


L HOKTH P1BON FU7URCS (MaW) Parts bHartwnk oflarad rate 


OL CM 0180 PUB 0329. Piataous dayli open kit. CM 252131 Pun 181780 

1 Swiss nunc CMraoNs iuffe) sr im poHc ot ioow 



AMn&Conpary. 595 

AledTrunBta* 525 

ABBnK 585 

•H«iiyAnbtacbar„„58B 

Bank ol Banda 525 

Banco Bfeao Itafta- 525 

BtaficafCypui - 585 

Btatkcdlrsbnd 585 

Bn* or tads 585 

8ar*otSoofend 585 

SerdeysBer*: 685 

BABktf MdEM 585 

te0Rte«tShi(tey5CoUj585 
CLBanl(NedtotM„ 585 

Ofeor*NA 32S 

. Oydndata Baric 585 

IheQa-aptasdve Berta 525 

Cauda & CP 585 

CaxALyranda 523 

Qiprue Poputar Bank -585 


Duncan Ltaarte —585 

Exeter BenkUnBod — 625 
RnmcM&GonBenk-. 6 
Dftabat Barring £ Go -S8S 
Qtrninric 585 

•Guteraae Mahon S3S 

HabfcBar*AQ2i*fcb.ME 

BHarrixoaBafit.: 68S 

HatflaUeS Ban bw 8^585. 

•W Samuel —523 

C.H3SB6Q0-. 525 

Hongtemg AShinghaL K25 

JiMn Hodge Bank 686 

•uapau Joaeph 3 Sons 525 

UDjda Barit 685 

MoghnfBWkUd 525. 

■Marri Barit .——525 ■ 
■MouitBMng 8 . 


»R o iditatfteCotatadee 
CapnacnUritedlaiio 
Icngarautaodaada* 
abanHnglraauaon. 8 

Royal acatSeodand^. 325 
dkBmBi&VMhnao Secs. 523 

TSB 525 

•United Bk of MumA— 525 
Urity Trw* Bank Pic _ 525 

WhotamThtet— ! 525 

WAaaa oy LaldtT— 523 
VfadoHra Barit 585 


NEW yPTOttESCKabCX PHOP BganM A7 


NOWAVASUBIi- 

MByll aMraOaiwpaipaBCvBaraiaOMtoaOira lUIMtel 3U». 
todfc^lftco«d « Otad Taola a Qrara Y« On 0 OanSTlSS 

AeafctaaSrraaWhWrakteeteO^ ttnZZl? 

CtarLMta.ntadratar»iraigurauTrf:a7HM7 1711 TWr 671.00 ftg- 


'• Hembofs of London 

hmatmant Banking 


!• Technical Analysis Software | 

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FINANCIAL TIMES 


fr h>ay September 2 1994 


TT 




Is. 


Ml *11,066 

9 H’Sj 



2-8 


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28 


12 

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72 


3 2 


IX 


2-3 


07 


IX 




2.0 


2 J 

W|1 

4X 

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7X 

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3X 




INDICES 


w iMNriaici'uaoi 

MMtttfl/I/BDI 


CJwB wateiponaw) 
Mm kvtaCtnAR) 


KL20 (t/l/Hl) 

Bad 

BMtpa 08/12*3) 


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OnVOMBf {1B7S 
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CMs 

rexc« pi/raao 
Daomafc 

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►KCwMucofiagq 

tan 

SBF 250 01/12*0) 
00 4001/12*7) 


.^Ki/ 

v#‘ ..J ' 


FAZ AMMn01/1298l 
Omnar3tH*fl/l2K9 

CBupmant 

Stans 

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Bn> Khb 

NkibS« 1031/7*4) 

Ms 

BSESBWptl^ 

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MlM 

sed owcap/iaq 

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29055 298.16 M1J1 13* 

1830*1 H22 w 

2«fcX1 2<2Z90 SC&ffl 250*5 8/7 







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T401X1S _ 
100 3X10 1*1 


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IX 

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— 

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■ffl* 


3 






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UU+ 


M 21235X7 20S8483 254JU40 160 

21 OU 2122.1 21165 2340J0 SO 

10716 10B4X 10B2S 1136,10 30 

424A8 42223 42060 48086 20 

115134 114S.7D 113681 122 2. 2 8 1C 

147804 148133 147900 W245 90 

M 532950 537970 5385000 22/8 

M 40B3X0 40035 408 3 00 31* 

M 434930 433370 480090 23/3 

W 208063 20EC.75 218209 1/2 

U 48205 47807 486738 40 

3»73 35098 35001 41039 20 

19330 19501 1934.4 W200 40 

1364.46 137035 1371® W3B 20 

3J349T 206008 206057 2SBJ3 2/2 

82058 83254 83104 88027 18/5 

356.1 23608 2*03 218050 2* 

220080 2215135 221085 2271.11 18* 

84769 84044 84523 1W» »» 

gggQfl 992130 968056 U201X9 4/1 

4M276 4588.1 tt *W- 1B M 

512.71 51026 50909 U2M 5/1 

19! 550 1315.65 >90077 20018 2M 


195740 27/S 
BDU0 » 


SBBJB7 226 

tmis 8/6 


328008 20/4 
388900 24* 
1883.17 207 


CBS mGeCEod 89) 

C8SM5trf3odB$ 

Sx«(i/raej 

0*3*00/1*9 

SrtsSap Crt/85) 

Mtaga 

BW (1077) 

SBJ/*3pwpK/70 
Sob* MM 
JSE Gold 06070 
JSEM. 0BA/78) 


(0 Z7BZJ3 273384 2881.17 80 

06 4460 446.1 46400 31/1 

US 281.0 2B1X 20UD 31/1 


21 6702 214046 213282 213904 30 

1119.19 113302 119448 1211.1 D 280 

307038 311203 310407 338037 471 

2857.1 29500 29564 322000 IBS 

57527 57047 56726 64101 471 

23140V 22000 2287.0 233UB 471 

B54BOV 85360 65390 675700 15* 


40800 21* 
2700 21* 


US INDICES 


IntMMl 391342 391700 389605 197808 359105 397808 

P1/IJ W PI/VW) 

fare Bondi 98.17 SBOO 9706 1HJH 9043 W9J7 

0171) (IS® (18/10(03) 

Tosspot 184222 163104 1B2082 166229 154602 U029 

0 ® < 2 dm) arm 

UOBes 189.18 18909 18803 227X8 17571 SB4B 

Brt) pM*i {3MUB3) 

OJ M. Oft MM 3B540* (383414 ) Low 387H.7B (387604 ) (nworaoeW*) 
Day’aHgh 393032 0BSO£4 ) Low 380642 (388842 | (AcbaW 


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174940 14/2 
844640 10n 


tau Omm M (1®3 688X1 66053 in* 

SonM <4/1*4 11085 111M ««0 W 


NHM 225 (16W4S) 
Mta 300 (T/lOK) 
toph (1/1*8) 

2nd Sadba (471*8) 


128636 4/7 
1888.18 477 

757-51 27* 
214030 27* 

f98UZ2K 
88687 25* 
S9BCL44 4* 


MBU4 1/7 

38635 W1 
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own «i 
28622 471 
1446® 471 
183333 471 


MmrfneB<4/1*0r M623 94423 93865 8M2B 2C 

Mlttl SE 0071285) 307.12 31242 31118 35631 31/1 

/ Bm tadaBw (IZKS7) 14562 14525 1*51.4 100340 31/1 

MhTa'm 01712*9 124840 125650 1256.16 142134 31/1 

aCGendflM?) 935.44 94027 93759 109029 31/1 

VMtaBdPr4n8fiEr 687415 700611 698028 7S4052 20B 


! 0BSOX4 ) Low 3W642 <3888X2 | (/tOuM 

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475.49 47607 47459 48248 <3 192 

0® <4« 

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B® 01/«1 

4659 4658 4650 46M 41-30 

(1455) m 

28148 282.10 28128 2B7JI 24114 

p® m 

45434 45249 451.48 48748 42247 

0® 06*1 

78542 78648 7B3LS1 88343 583.78 


"SconxEBRS IW 


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vnm (wag 

SHIES 152 

01 * 02 ) 
4643 844 

08/983) (1/10/7* 

287.71 448 

0098 PSM/42) 

48748 2631 

0098 0/12/72) 

nmon 54^7 

(18/3/8* 01710/72) 


FT 


T1S747 18/7 
88610 1» 


Dow Jones bxt Dtv. YMd 


S i P Ind. Qv. yMd 
S & P M. P/E ratio 


Aufl 12 Year ago 
2.70 240 

Ajfl 17 Year ago 
243 2.46 

2151 27*6 


tank* SET C30M/75) 1525,84 152483 148253 1753J3 4/1 

TtaOta 

Uantal Omysn 1986) 

25785.70 2528243 2548608280340 13/1 

uono 

US C*M U (171/7QI 642.1* 6417 8410 B4170 1* 


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Denmark DKK3J5X) Italy UT 600000 Ponugal ESC 6IXD00 

Poind PMK1200 Luxenboutg LFR 13.500 Spun PTS 63X00 

Forsubscriptions in Turtey, Cypras, Orccc. Malta, ptewconuci +322513 28 16. 


Btowkiao0Brtona) imaz 14012 1 40140 1540.12 31/1 
BnTcp-IQQBWMJ U2M0 123038 1237X5 1311X1 2* 
XvaOVH 01712*8) W 34127 9ES1 30539 571 
OaAvBiwO/USe) 18614 18167 18188 186B1 230 


138343 21* 
H41D8 21* 
29028 21* 
HUS 21/4 


Open Latest Change 
Sap 474.10 474X5 -OK 

Doc ■ 476.75 -2.15 

Mar - 460X0 -2L2B 

Open rtmi) Sgun* « *r piwaoue dey. 


■ NCW YORK ACTIVE STOCKS 


Urn Eat voL Open bit 
473X0 06X02 164,706 

6X83 63X06 

200 4X12 


□ Bill j — I Charge my Amencan Exjatis/Diners Cluh/ 
me i — I Emecaid/Visa Ammnt 


bspuy D«e , 


■ CAfrXO CHOCK — BXWmiHB 
Open Sen Price Chengs 
Sop 2072X 2041 X -3BX 

Oct - 2068X 205 IX -38.0 

Dee 2108X 2071 X -38.0 

Open Momat Roma tar pmutaui tky. 


E*l vol open InL 
21.792 40X87 

160 3,047 

4X88 


HMoasdar sueta 
haded 

RJRWUKO 15X79X00 
m*i nuns 6720xoa 

Ferd lUr 7.17BX00 

LMSd 6X66X00 

Lac Iter 4X38X00 


Qua Oenoe 

price on day 


tag 31 tag 30 tag 29 
Mae Ygrit SE 357X92 29>LS22 286X71 
AIMX 18X26 15.177 18.190 


USE OwcK.4/486) 


H 113001 131*« 571 BOM 4* 

•mtu- Kane Camp Ex 041X1 Baae vabiaa ct « **HK MHO AI Qaftwy 


... ... Pm t*| fV <U1?1 DM M W "WP >W W W Hi fWHM rw 

mZlSEi - «»4«w 1«S Sr 0, nStaMT-awa: NYSE M Camren - X in) 8»M eed Peana-io.afi 

SEJTZ d IW - - ifl*. ■?? PtL'JSl- Me tap ! - 

Mawreal 4 Taoim gl Ck xfA 


u» hmi xm we sure dj> imw^ 15379Slffl 68 +1 naqnc« WJK mum 

V**TV) PO* HUM 8.720X00 60ft +2M J™ ’J'Jfg 

Muk b« fin*.. >n> Md lUr 7.17SJHW 2 OH -lie HflSDflfl 288.7M Z71 . M0 MftTg 

Hgh l«r E*L voL Open bit ^ w CO -K NYSE 

M7S.0 2040. D 21.792 40X87 i* «« 4X38X00 11 _ taues Haded 2X73 2X59 2X56 

20B8X 2065.0 189 3,047 fearo Cm 4X78.100 3714 -1H Rises 1X16 1X76 1X30 

2106X 2068.0 - 4X88 Mens, 3X73X00 4014 -3M Ftai 948 B37 887 

Men* 3X64X00 - 34K +M UnMggd 711 746 729 

THaftatt 3X83X00 62H -1H Mr tflgta 85 94 85 

Chafer 3,134X00 46 -1ft New Lima IB 21 29 

7 Ctntctnn. * CdMtasd at 1100 GMT. • Extaxfaa bonde t bAanta. pte UdUn. Awntta) aid Tnnspaimkai 

4 The OI ML ndei etaonUnri dw^a M0 m end tawa are (he reeregM of die Htfiaet and toMMt prioaa mactiad dwfiiB ttw dqr by each 

««*; Hwaaadia actMl Mgha wd lew* <M«(ftd by T«km) rvpreetrt Sn highret and kmata vttna lhat flw indax ha reectaU 

«Mng Bw flha 9gwaa In breehMi are prewgiM aa/n f Si*|aBt to BfeMI remlniMiftiL 


a Currency mm Jnr onty mEJ for the country ur "Mrh durj err quoted. Subtrripiim Prices ore comet a tone nf 
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FINANCIAL TIMES FRIDAY SEPTEMBER 2.1994 


NEW YORK STOCK EXCHANGE COMPOSITE 


=3 sltre 


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48MML 2.78 U 7 232) 50$ 043 50V +V 

S 25$ Ate 046 16 15 1350 35V 35V 35V -V 

ISVAnmn 088 46 16 2042 22$ 21% 22$ -V 

4 iV Aten he 1 29 IV IV iV 

soV 38V Anne ass 20 27 tbb asV «$ *9$ -V 

39%2B$AMH*m 038 1418 1BX 39% 30$ 30% ft 

28V lOVAUBMtac 44 225 25V »V 25V ft 

18V 14VMMH 16411212 71 16V 1B$ 18ft -V 

2S% 21% AHA 7564 28V 27V 28 -V 

13% 13V Aten AT 020 1.1 28 301 17V 17V 17V 

21V lBVRteVtlX 035 16 31 1640 16$ 17% 18$ ft 

17V 13$AIMl 020 16 673 18V W% « 

S TAMU 028 12 18 182 24V 23V 24V ft 

17V AJftteA 0L28 16 IB 578 22V 22 22V +V 

25$ AM® 04* 16 23 1779 29 28% 29 ft 

2BV19VMOM 030 12B9 7419 02BV 2ft 25% -V 
65V 49V AfcoS 160 16 45 4K 66$ 64% 85$ -V 

3ft 23V AWBnwra OJD 26 5 335 28V 2BV 28V -V 

22V 14AMNX 010 05121 233 20V 20V 2ft ft 

X% 17Mk8>Uidx 0(8 22 20 1129 22 21 V 21 V ft 

2ft 20VAMBP 164 74 11 833 ZZ% 22$ 22$ -V 

iBViftMMCen aie 06 17 omicoV is% ®$ ft 
28 XAtopM 0.44 16 17 524 27V 28V 20V -V 

ft 1 Arlan 1 4 ft IV ft -V 

27V TTVAIocaap 164 76 22 83 22V 21 V 21 V -V 

10V 9/UWaQ OlO 16 00 1ft 1ft 10V -V 

27V 21 V AM MAX 0883614 10 23V 23 23V -V 

40V33VAH9B 067 16 8 2449 37V 37V 37V ft 

2ft 24 AM Op x 088 11 20 13S0 2ft 27V 28 ft 


\ 21%/UmH 

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22$ 17$MMffA 
90$ ZftAlte 
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22 V 14AkxMx 


7 ftMWHk 25 938 ft 

31%Z1$AUPB 11 1129 3ft 

84V 6ft AW 160 16129 1754 eft 
30V 2ft AMCpA 43 1477 2ft 

11V 7% Awtote* 066126 253 0 

ft 8$tePW» 065 36 24 16 7V 

ft 0$Jvtefifl 008 16 121443 ft 

2ft 20Aractehdx 062 26 14 19 21$ 

52V 44/tantMto 090 16 51 1177 50 

ft ft AnA4Rx 064 07 182 ft 

31 2ft An Bark* OLIO 04 3012309 22$ 
37$ 29$AnBn«f 260 U 10 2374 35$ 
25V 1 ft ftate PM x 080 17 13 171 21$ 

8 8% to 0* to 065 86 484 7% 

S 17$ As cap 08 164 86 31 32 18 

1ft to Ota O' 168 56 0 20 2ft 
42$ toCpnx 168 16 55 2825 Oft 
37V 27V AraflPw 240 7.7 18 3281 31$ 
33V 2ft /Inter 060 32 12 7098 2ft 
3ft 24% Anted 1.18 36 28 1718 3ft 


43 1477 2ft 23V 23V -V 

233 8 7$ 7$ +fi 

24 16 7$ 7$ 7$ 

12 1443 ft ft 6$ 

14 19 21$ Z1V 21V -V 


35V 3ft -$ 
21V 21$ ft 
7$ 7% ft 

17% 18 ft 

20 aft +v 
aft aft 
31$ 3lV -V 


37V 27V AraBPw 240 7.7 18 3281 31$ 31$ 31$ 
3ft2fttoter 060 32 12 7098 IBV 27$ 2ft 
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ft BtoGMhx 077116 341 ft «V ft 

27V 22 to Ml PT 260103 9 159 22$ 22V 22V 
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2$ ft to HOW 075286 9 3 2$ ft ft 

98$ 81$ AkMBx 048 05 IS M4 03% 92% 82$ 
11$ 7 to Off hex 160 117 413 8 7$ 7$ 

30 23%totoni 088 14 137 2ft 2ft 2ft 

34 IS to Plwdt 040 16 9 888 2ft 2ft 28$ 
ft 7%toflte& 044 54 6 360 ft ft ft 
27V 21 AoStar 048 16 7 1346 2ft 24$ 2ft 
22V latoMtrft 165 06 69 1ft ift 1ft 

32V 2ft to«to 160 IB 11 283 27V 27V 27V 
Aft 38V Anted 162 46 14 2234 41$ 40V 41 V 


18V Anted 162 46 14 2234 41$ «$ 

__ 34%Araraito 128 IS 5 33 37 3ft _ 

18$ llVtoMk 024 16157 3(0 18 ift 18$ -V 

81V 50$ Anon 220 36 154188 57V 57% 57$ ft 

ft fttopcom 010 16 a 13 7$ 7$ 7$ 

4V ftAnxnhe 012 27108 107 4$ 4$ 4$ ft 

34$ 29$ Ante* 140 41 11 1350 83$ 33 33$ ft 

4$ 2 VMtete 10 13B 2$ 2V A 

58V ttVAnWfe 060 06 801954 47 4ft 48$ 

32$ 2S$AhM 9 31 3255 32$ 31V 32V ft 

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2ft SftNRPpaPt 187108 3 2ft<l25V 2ft 

34 l9$Anm 15 34 22V 22V 22$ ft 

1t$M$MMn|klX 044 2618 20 18$ 1ft 18$ ft 

35% SOtoiCp 168 18 8 645 34$ 33$ 34 ft 

29V22VApteMCqi (LX 1.1 35 2488 25$ 24% 24$ ft 

10$ ftApnMaF 074 10 127 ft 9$ 9V ft 

2ft 1ft AW 351147*1$ 20V 20$ •»$ 

7$ 4PppMM« 1 51 4$ 4V 4$ ft 

22$ IOVArUNiA OU 06 35 19 22$ 22$ »V ft 

25$ 21V tohOn 0.10 U 18 2179 23$ 25$ 25$ ft 

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51$ 4ftAnn4Mx 460 07 1100 4ft iMft 48V 

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rs 2ft toto IIP X 110 36 5 23$ 23$ 23$ ft 

57$ <3$ AfflWW MB 26 38 485 40$ 48$ 48$ ft 

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7V 4$Mnte 2 51 5V SV ft ft 

33$ 23V/m«M 068 11 13 008 24$ 24$ 2ft ft 

31$ 21$ AtePO 0.40 14 B2 B40 ’ 29$ 2»$ ft 

31$ 22VAaWCtex 0.40 16 12 23 30$ 30 30$ 

44$ 33$ Ate* x 160 17 13 779 37$ 37V 57$ ft 

25$ 19$ AlliteF 067 14 341 19$ 19 19$ 

ft l$/hteW 068106 2 51 2$ 2$ 2$ ft 
37 38$ to It Go* 0.12 a4 21 35 31$ 31$ 31$ ft 

t 4ftA1ir 162 24 T742J 54$ 54 54$ ft 

22ftMMcb2 180 1.1 2 240251$ 251$ 

31$ /ana so 100061322032$ 32 32$ ft 
ft AMI So* 068 47 589 8 8 Oft 

21$ 18$ ROME Eft 164 86 5 463 17V 17$ 17$ ft 

IQVgftMMi 060 52132 2700 106$ 100$ 105$ -1$ 
TO 4$ Nha 0 151 5$ 4$ 5ft 

20$ IftMHK&VX 080 56 7 28 17 18$ Ift ft 

12V BV Ated ADfl 034 36 10 BOB 0$ 0$ 8$ ft 

24$17V*W WO 17 27 400 23V 22$ 22$ ft 

U$ 8$ tote M OKI 0.9 170 II 10$ 11 ft 

5ft 47$ MM 060 1.1 24 1040 53$ 53$ 53$ ft 

20$ 13$ Amen 044 13 11 13 I5>2 15$ 15V -V 

IS 7V MM 104 04 4 1021 10$ 10$ 1ft ft 

45 30$ AM 030 16 19 973 37 39 36$ -V 

61$48$tenft 100 14 17 1780 B$ 58$ m ft 

14$ 10$ $*< CWP 8 6 10$ 10$ 10$ ft 

7$ 5$ Anar 24 784 7 8$ 7ft 


MCtex 0.40 16 12 23 30$ 30 33% 

#» 160 17 13 779 37$ 37$ 37$ ft 

lltoF 067 14 341 19$ 19 19$ 

Hite 068106 2 51 2$ 2$ 2$ ft 
MGe* 112 04 21 35 31$ 31$ 31$ ft 

T 162 24 T7421 54$ 54 5ft ft 

«d2 180 1.1 2 248251$ 251$ 

■ te 105861322932$ 32 32$ ft 

a So* 068 47 5 89 6 8 8ft 

KEor 164 86 9 463 17V 17$ 17$ ft 

di 060 5.2132 2780 soft 106$ 105$ -1$ 

1 0 151 5$ ft 5 ft 


060 1.1 24 1040 53$ 53$ 53$ 

044 23 11 19 1ft 15$ 1ft 

104 14 4 1021 10$ 10$ 1QV 

030 16 19 973 37 38 36$ 

200 14 17 1700 ®$ 88$ 

8 6 10$ 10$ 

24 784 7 8$ 


38$ 31$ BCE 288 
ft ft SET ADR 021 

ft aMmeax 020 

17$ 18$ Bifar FM 040 
22$ I79MH 148 
27$ 21$ MM He 0.40 
3ft 24$ HRSX 060 
15V ft MM 108 
8$ 6$a*r 
25V38VMBE 162 
20$ 11$MBAtp 020 
3B3QV«ktaDM 124 
a.% :•*$ BkMRV 1.14 
11$ 9$9naeeCteH 072 
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1$ 1 BvkTmx 

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40$ UVSkBentaP 104 
33$ 2SBMUPT t.W 
30$ 47BWMA 125 
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84$ 8S$ BrtlDA 300 
XV Xlttpl 168 

30*1 22$ OH (CIO MD 
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43$ XV Bm» 164 
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53$ MV Bmctix 068 
28$21$BkltKX 166 

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22$ 18B«*HPL 1J2 86 


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72 772 


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48 

32$ ft 
x$ ft 

43$ ft 




Samsung Rassim TV 



Flat Square T\ibe 
NICAM Digital Stereo 
Well -Shaped 



28$ 19$ BMC an 
so$ 42$aoring 1.00 12 
29$ 19BaheC 080 11 
21$ 10B03B1H OK 

21$ 9$ BonhOxn 260 
18$ 11 Bontan 060 
X 1ft Born Cat 165 
28$ 3S% Enter 068 
36$ 18$ final Fill 127 18 
34$ XBREPrep 140 76 
68$ Brig9x 164 U 
33$ 19$ BflrtaKtt 
50$ BrHySq 232 56 
74$ 05$ Br /Ur 177 IS 
54$ XfirtlQa 367 67 
77$ 8B$ BPx 17B 13 
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25$ 18BSM IX 13 
71$ 53$ BT 377 

28$X$BWDU 165 
38$ 32$BrWta UD 

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30$2B$fttftelx ass 12 
32$ 24$firF flrr 088 II 
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25$ 17$ Braetex 144 16 
18$ 13$ Bull KW 062 16 
41 35$ BUCtal* PI 180 76 
28$ 18$ Bui CM 
88$ 47$ EUWX 170 23 
48$ 37$ Burtn Rmc 158 16 
19$ 16$ Buntmfc 142 15 


35$ 25$ C8l X 
334$ 253$ C9Sx 
25 1ft CMS B1 
82$ 59$ CHAM 
54$ 44$ CPC 


rft 


18$ 14 CPI Cap 

92$ 71 CSXx 
X 19$ CIS Cap 
24% 18$ CHMDMn 
132V 82$CUMhM 
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23$ 18$ CdxtOfiB 
17$ 10$ CmhcnOxoD 

9 35$.CMffln1M 
2$ 1$ CHIME 
15$ 11$QHBSnC8n 
19$ 15$Caeaar 
15$ 9$CHF*d 
25$ 17$CtenatQox 
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22$ ISVCBrutaQ 
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12$ 9$aoteS|XI 
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21$ iftCnaCp 

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is 

3ft 25$ 

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96 00$ 

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ft 




a 2s ft 


IX 54 7$ ft 7$ 4$ 


17$ 17$ ft 


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S“S 


9$ 4$ 

42$ 3ft 
X 38 
45 35$ 
40 28$ 
37$ 28$ 
20$ 14 
B$ ft 

s» 


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3 5ft 
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S» 3ft 
682 57$ 
378 90 

301 50$ 
436 14$ 

: 88 U 
207 X 
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15 7$ 
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2157 30V 
1281 W$ 
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3048 14% 
549 25 

081 aft 
892 14$ 
477 3S$ 
65 29$ 


23$ 2ft ft 


Jt-S-S* 

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17$ 18 

24$ 24$ ft 

10 10 ft 

7$ 7$ j 
5$ 5$ 

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24 $ 25 ft 

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43$ 43 

13? 13$ 
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9$ 9$ 
41$ 40$ 


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17$ 17 

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a$ x$ ft 

19$ 20 ft 

21 $ 22 $ + 1 $ 
28$ 27$ ft 
20$ 28$ ft 
10 $ 10 $ 

S 8 S 

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82$ B2$ ft 
SO 50 ft 
094 94 

51$ 51$ ft 

«$ 45$ ft 


S 34 
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SV ft 

38% ft 
29 

17$ ft 

a -t 

57$ -% 
43 

13$ ft 
£2 
3 I 

7$ ft 

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17 ft 
ft 


OK 10 11 
048102 .1 
126 32 V 
IX 86 
016 1/4 2 
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168 15 X 
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IX 38% 36$ 96$ ft 
2228 27% Z7$ Zft ft 
1832 41$ 41$ 41$ 

17 n 5 * rev w% ft 

1025 22$ 22 22 -$ 

SSS&SSS 

3966 17 1B$ 18$ ft 

14M 21$ 21$ 21$ ft 
32X 24$ 24 24$ ft 

S752 83$ 32$ 32% ft 
1117 18$ 16 16 ft 

877 18 17$ 16 

1397 22 21$ 22 ft 


41 54$ >4$ 
246 . 3$ 8$ 
1290 41$ 41$ 
400 1$ di$ 
88 8$ ‘8$ 
128 3$ 3$ 
1238 27$ 28$ 
3 .58 58 

3427 52$ 51% 
31X 21$ 20% 
X 31$ 3M» 
549 51$ 50$ 


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5$ 5$ ft 
10$ 19$ ft- 

»V »$ ft 


a as* 

« X 67$ ft 

63% 62% 83$ ft 

4 ' 1 1 5 

295 21$ 20$ 20$ ft 

U2S »$ *$ ft 

85 11$ 11$ 11$ ft 






31 9 9 0 

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6 23$ 23% 23% 
128 0$ <S$ 9$ 
41 12$ 812$ 12$ 

4 * MX 

1861 38$ 37% 37% 
2171 Z7% 27$ 27$ 
6251 23 22$ 22% 

88 22$ X$..22$ 
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293 25$ 25 25$ 

145 20$ 20$ 20$ 
W 33$ 35 

287 37$ 38$ 

X 44$ 44$ 

782 22$ 21$ 

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26$ 28$ fB 






28$ 25% XV ft 
78 77 77$ ft 

16$ 16$ 16$ ft 


50$ 50$ ft 
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24$ 24$ 

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4$ 4% 

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40$ 40$ 4$ 

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018 018 ’ 

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12$ 12$ -$ 

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17$. 17$ ft 
11 $ 11 % 

V 27$ ft 
»V 13$ ft 
14 M% ft 


■ £*• 
“13 






































41 



financial times 


FRIDAY SEPTEMBER 2 1994 ★ 


NYSE COMPOSITE PRICES 


NASDAQ NATIONAL MARKET 



Cpiltead from prevhKs page 

“ “ * 

«5 32%SdMKm 
135 l1%SrimnBr 
52% 41%8atarai 
25 17% SrOgSE 

10 7% * 

1B% 13*z 
40 31$ 

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a iPiBnuoi 
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20*2 12% Scnoqi 
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71% 54%8cWI 
83 60%5eOWix 

S 23% SUMHffi 

0% SChMoar 
45 24%SdMx 
16% 13 Sco— 


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0-10 1.7 8 60S 
„ 316Bu17% 

U W 85 351, 
0.10 03 12 8728 
08* 1* 15 5114 _ 
Z.82 &2 12 3S4 48 
1.00 IS 8 4873 1 
30 gg_-_ 
JOJ as 16308 68% 
ai 23 3006 57% 
oa Ha 14 1130 30% 

25 15 g 

012 03 87 4294 44% 
0.10 08 14 6 18% 


43 42% 42% 
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38% 38% 
12% 12% 
43 43 

18% 191 



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i 


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26% S% SnoM Efi 
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107 46 21 IK UBS 
050 1.7 17 1505 33 32% 32% 

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1.12 16 11 140 a 19% 19% 

1 2 7% 7% 7% 

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33 4348 2- — ^ 

1.12 84 34 a 1 
016 24 2 si 
048 24 18 166 
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020 43 77 191 4% 

114 S81 15 

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117 34 5983 31% 30% 31% 

IS 24 14 IS 21% 21% 21% 

050 22 18 M 23% 23% 23% 

148 Z9 18 231 38% 38% 38% 

OH U23 255 18% 18% 18% 

31 2141 30% 29% 29% 

148 34 HI 777 30% 30% 30% 

. . 047 04138 399 61% 80% 01% 

1?% 11% ft***, 024 14 54 BIB 12% 12% 12% 

«% 49 Suita top X £60 8.7 22 41% 41% 41% 

C% J2SaoM*S%..2jSQ T4 2 33 33 M 

2* 17% EBUaata 1.44 74 11 M 18% 18% 19% 
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2 16 SDMI 120 84 10 in 18% 17% 18% 

22 18% SBHMQp 040 34 8 281 20% 20% 28% 

1.18 84 5 BIN 18% 18% 

145 54 11 172 27% 27 


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44% 34% SHAMT 
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156 du8MOs 


1.78 5.4 66 385 
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23% sou«*wto 220 84 id 574 

12% 8% SpetaFrni 048 48 


012 08 
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1ft 14%8phanD 

3ft 29% Sprieg 

' 40% 3ft Sprint a 
18 13% SPX 

g lftSdtonmx 040 25 
14% SH Motor 
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30% 24% SMB 
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43 37% Mb 
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140 £4 13 215 42% 41% 


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38% umM £14 04 S 5031 40% 40 

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21 048 4ft 
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22 902 26% 

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29% 22% matrix 017 07 2410288 2ft 24% 

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AMEX COMPOSITE PRICES 


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EcdEnA 030 B 22 10% 10% 10% 

EdbtQ Rs 5 11 7% 7% 7% 

Ban 17 1057 36 35% 35% -% 

ErroSv 400 15% 15 15% ft 

13 0» 21% 20% 20% ft 



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MCOfBnc 020 13 17 11% 11 . 

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070 35 228 16% 18 V 

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3 27 34% 33% 33% ft 

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Nat Pint B "558 

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PMLO OH T7im - — 

PBiray A 050 a 5 

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SJWtop £10 0 12 
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Tab Prods X 020 46 B 
TalfBMa 036 652069 
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18 


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4ft49% 44 ft 

14% 14% ft 

30% M% 30% -% 

2% 2a ft 
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1ft 10% 18% ft 

18% 1B% 1ft ft 

UdFDOdM 5 130 2% 2 A 2% , 

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WcsraA 24 550 M 

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Waateid 292387 12% 

0J0» 313 2B% 

WflBETx £12 18 9* 13% _ 

WlltD 050 14 340 31% 31% 31> 

5 IK ft ft 5% 





■■rt 

\.7-i 


Have 

. ^ your competitors by having the Finandal Times delivered to your home of office every writing day. 

__r*! iST™\SSrviees are availabte for all subscribers m the business centres of Lisbon, Oporto, the Algarve end in Funchal. 
Hand delivery sem p jea se call (01) 80 82 84 for more Information. ' 

Financial Times. Europe's Business Newspaper. 


n ax 

Stack M e «b it, iw wo* 
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ACCtop 1121661311 19% 17% 18% 
AcctataiE 243200 18 tft 183 +13 
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Sedan Qi 301333u27% 26% 27 ft 
MptKtl 1716882 1ft 18% 18a'. -ft 
ADCTkn » 005 40% Aft 40 

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flflaSm US 22 1M 37% 30 3ft ft 

«d»Sp» 020 24B490 31% 30 30% -1% 
Mnncac 7 207 9% 8% B% 

AdrUgta 8 IP 4% ft 4% 

AdrPotfm 8 724 ft ft 6 

MfflMJb 12 58 15% 14% 14% 

Mantax CLSO 16 441 32% 32 32% 

AOynax 12 64 16% 16% 16% 

ApfcoGB 110143 444 1ft 12% 12% ft 

Step 024 1B1Z71u27% 2B% 27% +% 
AkZDM» £24 22 866 Eft 61% 01% 
MteCp 452309 32% 3ft 31% 

AWSd QJ8 17 972 2ft 25 25 

MdOhUV 10 10 ft 0% 0% 
AlonOrg 052 15 73 4ft 30 3B% 
AtonPh 51387 10% 6% 9% 

AUGofl m 13 481915% 1ft 15% 

AAd Cap 000 12 32 14% 13% 14% 

AtoBBB C 032 9 10 3% 3% 3% 
AlnMd 005 14 412 lU 1% IA +i 
Atom a a 7757 29% 28% 2ft -1% 
Am Banka x072 B 250 22% 21% 22% ft 
Am By Bn 15 2100 1ft 1ft 1ft +1% 
ArtiltaHO 24 388 26% 25% 25% -h 
AmMndB 12 351 9% 6% 8% -% 
AmMtwidUl IQ 343 4% 4% 4% +% 
AitoFftoq* 40 1341 n24% 23% 24 

AmOrtAx 056 1613659 30 26% 28% -1% 

AffltatP 21048 l£ l£ li V, 

AnMttax 2a 0 725 51% 51 51% 

Amftwtonr 35 5683 19% 15% 19 -% 

ABtTrm 122700 1110 15% IB ft 
ADlQMtnc 2011287 54% 52% 34+1% 

AotocftCpdLOB 142096 10% 0% 10% ft 
Amfln 4 SOI 8% 8% BlOB +H 

Anatogle 14 13 19% 15% 15% 

Analysis 052 13 16 15% 15% 15% 

AmnoaUaxia 11 51 14 13% 13% -% 

Andrcwa 27 3832 n40 40% 40% -% 

Amknata B 151 1ft 10 ift 

Apogaa En 030 a 12 15 14% 14% •% 

AffSo 9 26 6% 0% 0% -% 

AppM MB 3222994 a 47% 48% -2% 
AcptaC 048 3118089 35% 84% 35 -Ift 

Afftaben 004 38 720 15% 1 4% 15 

Mar Dr OH 45 17S 20% 1ft 20 
Mtm 028 m 910080% 30 20% 
Arponatf 1.16 8 53 30% 29% 29% 

ArmorAlx OBI 21 537 21% 21% 21% 

Arnold to 140 17 BB 20% 1ft 19% ft 

ASX Grp 3 4 13 13 13 ■% 

AspsctTa! 32 23S6 87 34% 3ft -1% 

Aanctoam 283 97 2ft 25% 2ft 

AST (tan* 8TSE0I 13% d12 13i -4{3 
non 13 91 1ft 10 1ft +% 
AdBBVrx 032 32382 2ft 29 26 -1% 
Auktt 140 » 4351 52% 5ft 01% +1 

AtOOHD 10 68 3% 2% 3% ■*% 

MaMa (UB 10 502 7 9% 7 +% 


BassatF 
Bay Via, 
Baybmta 


- B - 

BEI Bx 000 27 M 5% IS S 
10 774 12% 11% 11% 

Bataan wt 100 A A A 
Dakar J 006 131180 21 2D% 21 
BhtonLB OH 3 50 14% 14% 14% 
BandK 181437 U2B M% 2ft 

MBMh OS 12 5320 ift 18% ift 
BantanCp 140 8 84 ift 15% 15% 
BanknoA am 14 13 25% 24% 24% 

Bant* Geo 152 101953 34 33% 83% 

050 16 259 29% 20% 29 
000 13 5 24 23% 24 

IJO 13 225 50% 60 6ft 
BB&TRnx 1.10 9 797 X 29% 29% 
be Aero a am b% ft ft 
BeawOCos 142 33 50 14% 14% 14% 
Bmltony 14 173 15% 14% 14% 
BoMeiWH 044 13 195 87 3ft 3ft 

amap ii2 is a 10% 10% 10% 

ate 07 842 4% 4% 4% 

BJfjBx 11516 B5 11% 11% 11% 
BMeyW 008 15 435 14% 14 14% 
BtogBd 5210363 50% 48% 40% -1% 

Somet 193886 11% 10% 11 -% 

Stock Dro* 1-04 11 112 31 3ft 30% 

BMC SdS* 1411008 44 42% 4ft 
BcaHnnSxl-36 107157 33% 33% 33% 

BoO Brans 029 19 879 21% 7121% 
axdaSB 15 80 28% »% 28% 
Borland 151515 18% 13% 13?« 
BtotoDBkxOTB 6.222 30% 87 37% +% 

BoctalTc 575830 1Z% 11% 12% -ft 
BradjWA 008 19*100 4ft 4ft 4ft 
Branco OH 27*100 11% 11% 11% 
BrenoS aa 174307 8% 7% ft 
BSB Bncp* 070 9 24id!ft 26% 28% 
BTShWO 048 4 a 2 & 2* 25 +5 
BrdWx 23 1191 20% 1ft 19% -% 

a 332 13% 12% 13% +% 

91 163 B% 9% 0% -% 

85 90 34% 3ft 34% 

7 501130% 29% 30 -% 


-% 

ft 


ft 

-A 


-% 

*% 

ft 


BiAfanT 
Bur Bran 
BualmnR 
SudarWg 


- c - 

CTeC 230 188 a 22% 23 

Cabot Mad 6 46 5% ft 5% ft 

CkSJwrpa 137 17 3879 30% 30% 30% 

totonaCnama 18 355 15% 15 ift ft 

tow a 387 542 7% 7% 7% ♦% 

Gdgene £25 7 4303 12% 11% 11% -% 

town a 591 24% 23% 24% ft 

CamMHo 1 1035 1% 1% 15 

2 13 3% 3% 3% 

Cnrfira 4 30 2% 2% 2% 

Canon he 052121 162 87% 06% 87% 

Canonic 3 387 5% 5% 5% 

CartBR 0.10 21 270 3ft 36% 38 

tottoto 053 22 34 25% 26% 26% 

OA) a 1Z7 24% 24 24% 

CraayS 006 IB 60S 11% ii 11% 

CHpn 5 141 7% 7% 7% 

CEMCp IB an 12 11% 11% -% 

Centocor 72870 14% 13% 14 -% 

tod FM 1.12 12 2001 33% 32 32% -% 

0*1 Spr 19 72 10 d9 ft -% 

8 163 4% 4% 4% 

Chapterl 080 81328 uH 23% 23% 
tomSi 009 110810 6% ft ft -% 

Qwntab n a 125 11% 125 *A 

13 2100 3% 3% 3% 

CHks&Ta 6 358 4% 4 4% ft 

CMrooCp 6B5753 70% 88% 68% -1% 
Ban fin 128 13 103 55% 54% 54% -% 

CUbOi in 31 410 32 31% 32 ft 

CtouUfC 2823350 27% 26% 27 -% 

CSTOh 106 B14 25 25 2% -5 

1 3501 40 24% 24% 24% -A 
□zBsacpx 1J8 17 219 81 8ft 30% ft 

CtoanHbr 21 69 

Oft, Or 43 133 

QoScttn 81671 

X1JX)18 23 


ft 

-5 

ft 

ft 

ft 


OdaEngp 

CodaAlkra 

cogoncp 


6 % 0 % 0 % 

13 12% 12% 

4JJ ft 45 
29 20% 20 

IS 409 0% 6 6% 

a 951 12% 11% 11% 

a no is «% ia% 

95 108 10% 1ft ift 
Cofimt T7 48 13% 13 13% 
Cdtagan 040 88 474 22 21 22 

CBM&XUB 13 13 22 21% 21% 

Cafe* Grp 08012 467u31% 30 31% 

Cantor OH 18 22691(27% 25% 27 ft 
CratA x 009 19 687 16% 16% 15% -% 
QncstflSpxfUB 4015570 16% 15% 15% -% 
toraaetabBOM 121158 U33 32% 33 

ctnna ana 40i id isib% -% 
GonanoC 162033 25% »% 24% 
OrapiUte SSI 361 10% 10% 10% -5 
Caratare 40 67 ft d9 9 
Canmxffl 36 304 35 3* 3* Vk 
CanPBp 128 33 0 48% 48% 48% 

5 89 5% 5% 5% 

40 55 18% 17% 18% 

10 86 7% 7% 7% 

050 21 292 20% 19% 20 

351529 5% 4% 5 

242988 55% 53% 53% -1% 
47 248 17% 17 17% •% 

Crack** B (UH 293138 29% H% 25 ft 

toyDnp 11074 1% 1% 1% +& 

Crown TO 30 527 5 4% 4f3 +-5 

Cytsga) 2 448 4 3% 4ft 


- D - 

DSC Cm 1823114 26% 27% 28% ft 
OaAOrtdX 113 a 3 74% 74% 74% +1% 
DMWwtCh 11 164 2% 2% 2% -5 
3 7 7% 7% 7% 

14 115 1ft 14% 15% 
TOpbWp OS 11 422 2ft 24fl 25% 
OabSham 020 19 IK 0% 6% B% 
DtaaBEd 132 24 157 18 18% 15% 


CandteE 

tondto 


CunAi 

CMP* 
ConfisCp 
top OTA 


ft 

ft 

ft 

ft 

V* 


ft 

ft 

ft 


DaMbQPXfUO 
Dafctaapc 144 
Del amp 
QdtafiShn 116 

DnW 

Dtp 6 m 1.12 
Dawn 020 
OH TWi 
Hbn9B 080 
DSIM 
no wm 
OlgEouid 
OQEflt . 
DtamCp 
Obdannx 020 
OHFtonr 
DaBvQnx 020 
DOTCbrtn 150 


Dnwdhm 
□ray GO OH 
Dragtepo 108 
DSBneor L08 
Dotal 042 
DwtFV 030 
oyntoch 


n a 
E mot Hot 

48 100 32% 
11 158 22% 
323933 32% 
18 53 15% 
S21B9B 38% 
9 141 32% 
5 SS Oft 

10 60U22% 
3 190 18% 

13 232 14% 
9 2431 16% 

401424 1% 
1917T7 u5% 
18 284 33% 
SO BOB 9% 
1 1063 3% 
» 1386 20 

14 90 12% 
9 7100 8% 

11 489 10% 

221407 25% 
62 297 5H 
16 77 29% 
13 45B 1ft 
24 Bb33% 

7 370 21% 


- E - 


j 

ft 

■1 

t% 

■% 

ft 

ft 


i« (MOk 

32% S2% 

22 % 22 % 

30% 31% 

15 15 
X 3ft 
32% 32% 

8% 9% 

21% 22% 

17% 15% 

14 14% 

14% 15 
1% 1% 

4% ft 
34% 35% 

8% 9 

3 3% 

24% 25% 

12 % 12 % 

8% 8% 

10,’, 10% 

2ft 2ft 
5% 5% 

28% 29%. +& 
17% 17% 

32% 32% 

20% 20% 


ft 

ft 

-% 

ft 


EafpgFd 
EudCp 
EaaEnwd 
ED Tel 


BecUrtn 

Enxxxi An 

Bndar 

EBoVMn 

Enwsn 

Bnnatac 

EqtotyOl 

Erase 

BMd 

Ema 6Bi 

Mu* 


ExpacB I 
EmxpAiW 


2 51 

2 536 

3 8 
032 23 3316 

233 248 

1 09 
121341 

OJB 50 10 

2017229 
18 09 

1Z14 
49 513 
77 90 

2 318 
110 16 247 
0481512921 

4827 
55 7 

23 7268 
9 101 
15 <83 
110 M 224 
20 228 


3% 
3% 
1 A. 
18% 
7% 
2% 


13% 12% 
50% 50% 
17% 17 
6% dft 
ft B% 
1ft 
2% 2% 
2% ft 
4% 4% 
54% 54 

8% 8 
1ft 12% 
1B% 16% 
7% 7% 
22 % 21 % 
20% 19% 
1ft 12% 


3% 
ft ft 
iA 
18% *A 

7 ft 

iH -A 
12% ♦% 

50% 

17% 
ft 
ft 
13% 

2A 
ft 

4% 

54% +% 
3% +1% 
12% 

17% -1% 
7% ft 
21% ft 
20 ft 
12% ft 


- F- 

FaBftp 11 4 5 

FtorCp OH 35 01 6% 
OW 61 1401 3ft 
RVtad IB 5841 27% 

RflbTM IH 15 523 52 

FByOfl 61379 5% 

HggtoA OH 0 76 ft 
31 1251 23% 
FtaAm OH 8 419 34% 
FdScOhtox mill 70 25% 
taCBflk 16021 223 24 

FtoSedy IH 12 3S2d32% 
FatTena IJB 11 3499 47% 
FstlTinta 039 7 472 9% 
FWadMfcx 050 7 750 2ft 
fMtar IH 8 <78 34% 
41 32 7% 
231212 
19 835 
009162579 
0896254109 
IH 10 05 32% 
11 352 12% 
33 292 ft 
IH 12 155 30% 
040 8 292 16% 
Esttawtox 1.18 11 105 30 

FMarHB 05B 222205 37% 
FtAtonm 068 11 220 21% 
IMm OH 33 148 18% 
rUnadADR 21 15 3% 


Ron 

How tot 

ForxlA 

FbodS 

Foranod 

Fondmer 

FostarA 

FrthFta 

FstRto 


23 

7 

6 

ft 


4% 4% 

6% 8% 

38% 38% 

28% 26% 

51% 51% 
ft 5% 

9% 9% 

9 22 % 

34 34% 

H% 25% 

23% 23% 

32 32 
46% 47% 

0 ft 
24% 24% 

84% 34* +ft 
6% 7% 

22 % 22 % 
ft 

5% 6 

5% ft 
31% 31% 

11% 12 +% 
3 3ft 
29% 30% 

15% 1ft ft 
2ft 2ft ft 
34% 34% -3% 
21 21% ft 
17% 18 ft 

ft 3% ft 


EdApp 
GfiKScrv 
toite 
tonal Rb 
fiaua 
GcrtBtodx 
todyta 
toataPh 
todaxCp 
Genoa Inc 
Banzyraa 
OBmnax 
Oddtagd 
A 

GHiBtaa 

Good Guys 

GDdrWnp 

todcasya 

ftanla 

tonAPx 

anwchPh 


Gmdwtr 

GUtop 

GhNTSug 


HBRiagA 


- G - 

7 15 
107 23 8 

0 170 
10 410 
118146 a 
040 a 114 
18 157 
411047 
400 38 425 
1581272 
52 3921 
040 N 1448 
012 T4ST72 
080 17 in 
10 4 

16 304 
DM19 M3 
2B7 11B 
Oan 383 
OH 11 4 

0 700 

1 094 
B40 380 

5 181 
81000 


3% ft 
15% 15% 
2%- 2% 
3% dft 

6% ft 

19% 19 
5 4% 
11 % 11 % 
22 % 21 % 
4% 4% 
34 a 
15% 15% 
19 18% 
15% 14% 
4% 4% 
12 % 12 % 
21% 21% 
U3% 2% 

20% a 

10 17% 

% A 
2% 2% 
13 12% 
13 12% 
1ft 9% 


3% ft 
1ft ft 
2% ft 
3% ft 
ft ft 
18 

4% ft 
HA ft 
22% -ft 


4% 

3ft ft 
15% ft 

1BH ft 

15% 

4% ft 
12% 

21% ft 
2% 

20% ft 
16 
A 
2% 

12H ft 
12% ft 
10 ft 


H*P* 

teo&a 


TOdhere 


HeJdro/ 
HetonTroy 
Hen* 
Hogan Syi 
Hototfc 


Itan tads 


Homhftoa 

Hurt JB 
Hmflnstn 
Hum a 
ttataKTech 
HycvBto 


- H - 

SB X 0% 
DM B 3 20% 
aa 13 322 15% 
010 27 1824 33% 

a»0(2B28% 
loe a <a 12 

10 505 7 

016 24 4102 14% 
9 10% 
9 *28 15% 
07214 2506 21% 
015S 85 7% 
73 6940018% 
obo a is a% 
044 19 14 26% 
13 912 12% 
044450 a 4% 
OHIO 078 IB 
000 81322 21% 
OH 1 354 3 

1761042 32 

17 177 4% 


6% 6% ft 
a% a% -i% 

15 15 ft 

32% 32% 

20% 28+1% 
11% 12 ft 
ft 7 ft 

14% 14% ft 
10 % 10 % 

14% 15% 

20% 21 ft 
ft 7% ft 

14% 15% +1% 
20 % 20 % 

25% 25% 

12 % 12 % 

4% 4% 

1B% 18% 

20% 21 
2% 3 

31% 31% 
ft 4% 


ft 

ft 

-% 

ft 

ft 

ft 

ft 


DBtanu 

BIM 


to — agm 
ta»1Bc 
tad tax 

nr TO 


40 14 
2713321 
3 115 
a 90 

z re 
two 33 

024198 


6% dB% 
9% 9% 
4 3% 
5% 5 

4% 4% 
09 17% 17% 
66 14%it13% 


6% ft 
9ft -ft 
3% +ft 

5 ft 


tougrttar 


MgkMH 

tabd 

tee* 

HgnB 

UarTrf 

takrtek 

toigsh 

totetoar 


hb re* 
HDafeyOA 
WTO 
totittal 


kmegaOP 


fttotaft) 


JSJSncfc 
Jason toe 
Jlfitad 
JotmoiW 
taf 

Jonas Had 

JtepiCpic 

JSBFh 

JunUg 

Jus* 


IB 839 14% 13% 
N9451 23% a 
166 16 85 12% 11% 

2712991 a 22% 
32 1261113% 12% 
5 232 2% 2 

OH 1247473 65 64 

B 075 2% 2 

040 X 2E29 15% 15% 
19 442 8% 8% 
12419 239 13 12% 

3 381 9% 9% 
43062 4% 4% 
5 318 12% 12% 
227414 12% 11% 

14 34 17% 17% 

OJB 17 2 2& 2H 

275 305 6% 5% 
00521 50u91% 31 
1 1368 2% 2% 

15 288 17% 18% 
IH 39 19212% 211 


4% 

17% ft 
13% ft 
13% ft 
23% ft 
12% 

22% ft 
13% ft 
2 ft 
04% -1% 
2% ft 


15ft 

8% 

12% 

9% 

4H 

12% 


12% +ft 

17% 

2£ ft 
5% ft 
31% ft 
2% ft 
17ft -ft 
211 -1% 


- J - 

U 292 12% 
OH 14 132 ft 
110 32 1721137% 
01 4 34% 

11 672 M% 
110 101417 7% 
IH 14 132 30% 
080 17 38 27% 
028 IB 231 18% 
OW 9 153 13% 


12% 12% ft 
8ft 9% ft 
35% 37 
24% »% 

14% 14% 

dft 0ii 
2ft 29% 

20% 27 
10% 1ft 
11 % 12 


ft 

+1 

-ft 

•% 

ft 

ft 


H Ita 

Bt MH. HM In Ik Ok 


-K- 


kSrta 

KananCp 

Ktftoyn 

Kray Sax 

Kantirty 

IQnMI 

Kfesmr 

KLAbrtr 

Knawtadg a 

KoflA 

Komagtoc 

KufickeS 


OH 11 171 
044 5 177 
32105 
072 27 225 

in ii a 

OM 14 152 
21 2TB 
626811 
212945 
0 115 
211 4517 
ID 1699 


22% 22 
9% ft 
7% flfi 
o32 31% 

fl% ft 

26% 24% 
10ft 10 
47% 45% 
4*8 < 

ft % 

23% 22% 
15% 15 


22 

ft ft 
6% ft 
32 

ft 

26%+lft 
IDA V, 
4ft -1 
4JD -21 
ft +Ji 
23% ft 

1ft ft 


- L - 

Utona 072 a 48 19% 19 19 -% 

lkUFurnxai2 37 359 6% 6% ft ft 
Lantech 387560 35 34 34% -1% 

LncBbtor 148 10 131 30% 30% 36% +% 

Lancs he 096 19 138 18% 10% 10 ft 

LmnKta 31 1374 24% 23% 24% +% 

Laura** 12 119 BA 9% »A -A 

Lastncpe M 241 3% 3% 3% 

lalbcaS 152553 18% 18 15% ft 

Lawson Pr 040 17 13 24 23% 23% 

LOOS 37B 7382 2ft 22% 23 ft 

UUCP 016 2 5 5% 5% 5% 

Laddks 19 217 15% 15% 15% ft 
14 1733 23% 22% 23% 

Oa 15 79 17% 17 17% -% 

23 309 4% 4% 4% +% 
028 12 229 13% 13% 13% -% 
TTT6 572134%T33% 134 
052 15 801 15% 15% 15% ft 

12 24 29% 28% 20% 

OH 36 1953 44% 43% 44 ft 

040 18 S 36 34% 39 +1% 

Lonran 6p 006 » 454 25% 24% 2SJJ5 -M 

Lore Star 925H 6% 6% 6% ft 

LdtusO 3214716 41% 39% 40% ft 

LTXCp 31455 4 3% 4 

LWM 076 4 43 32% £% 32% ft 


LagaMCp 

LlbTach 

Utena 

LOykdA 

Lid Br 

UncotaT 

LkubtyMt 

LhaarTK 


Marine Dr 
Cp 
UnM 
Uantatta 


MCI On 106 212561? 24% 23% 
MSCarV 21 306 a M% 
050 44 117 14% 14% 
HxfiaanGE xlH 14 00 33% a% 
MagnaPwr 13 HB 73 3% 
IbgaaQra 076 1 3 337 2ft 20% 
Mai Bar 12 in 5% 7% 
Mareani Cp 24 131 10% 10 

12 617 5 4% 

9 57 42% 41% 

2 15 1% 1% 
18 470 8% 6% 
ManhSmkAau n 2 u% n% 
MBtaatx on 10 565 20% 18% 

8 52 0% 7% 

Medmtt 45 619 60% 9rt2 

u— to 0 632 4% 4% 

UcfinlhR 044 12 134 15% 15% 

Mctouk 04B 151957 19% 19% 
MEtouC 172 7666 54% S3 

Btadnlne 01810 88 14 13% 

MadctaaS 048 15 474 n2G 25% 

Makndne OH a 659 u9% 0% 

Mentor Cp 116 34 BB 16% 16% 

ModrG OH 23 3537 10% 9% 

Wra a ntB OH 11 540 21% 21% 

MsreuyG 1W 7 200 28% 27% 

Uerfdao 1J6 T23EG0 32 31% 

9 7» ft 9 

Methods A 112 17317Da17% 16% 
mcm 37 623 35% 34% 

MchaalF Oa 19 738 12% 12 

UteWB £00352 435 77% 70% 


24 

2<% 

1ft 

33% 


V. 

+% 

ft 

ft 


20% ft 
20% +% 
7% -% 
10% +% 
ft 

41% ft 

1% -A 
a% 

11% 

20% ft 
7% ft 

59% -1 

ft 


15JJ +/, 
19% ft 
53% ft 
14 +% 


MfcrcHSi 

Manage 

Mkraaxa 

Mtogralx 


9 151 3% d3 

9 909 12% 12% 

8 787 7% 7% 

10 590 5% 5% 

2 517 7% I 

Mfcsfl 1673069 57 55% 

MU ABM 20312 27% 20% 

MUfenflc 052 11 2806 30 29% 

MdHtobi 050 a 96 30% a 

IflarHx 05 175185 2ftd23% 
Itoon 974 24 1 , 23% 

Mtanteh a 355u15% 14% 

MoHaTd 57 2324 23% 22% 

Modem CO aa 10 49 7% 7% 

HDdneUrxasa 280 20% 28% 

Unto* OH 8251139% 38% 
MdBtoC OM 31 30721142% 41% 
MHcnm OMT417B4 7% 7% 
MPlfeiwP 138 a 5 5% 31% 
Mr toko 18 197 15A 15% 

IfTSSys 056 8 77 23% 22% 

14 2617 31% 31 

kteog™ 4 177 10% 10 


25% 

9% 

16*4 

10% 

21% 

28% 

31% 

BA 

17 

35% 

12% 

77% 


ft 

ft 

ft 


3A V. 
12% 


7% ft 
5% ft 
7% 

56% -2 

27 +% 
29% ft 
»% 

24 -1 

24% +% 
15% ft 

23A +A 


7% 

28% 

39% 

«% 


ft 

ft 

ft 

ft 


7% ft 
32 ft 

23% ft 
31% ft 
10 ft 


- N - 

KMC Be 11611 514 26% 

ttrtl Rich x 072 12 197018% 
Mai Coopt x 0361 08 2193 13% 
NbsStn OH 19 31 13% 
(tor 6100 11 IT 17% 
NEC 041104 a 61 
NaScor 18 807 a 

tank Gen a I860 19% 
tanks 123 970 8% 
Naurogan 7 «14 5% 
Ntrgna 027 36 544 35% 
NteEBm OBO 21 EG 18% 
Mewtnaga IBS 4Z7 14% 
teta 2312795 31% 
Nenprt to OH 16 S7 u0% 
tadeDrl 21 1031 6% 
Hantaan x 05B X 107 59% 
Ntfctrmx 040 273505 47 

Hoahnl 14 172 19% 
run 4 9 5% 

NorUfflU 088 121260 38% 
MU At a 069 19% 

Nmofl 76827913 1 5% 

ttmta 394070 43% 

WCA 54 6% 

NSC Cop 7 X100 2% 


20% 20% 

17% 18 

13 13 

13 13% ft 

17 17% 

60% 60% ft 
29 A 20A -IA 

19% 19% ft 

6% 8% ft 

04% 4% ft 
34% 35% 

18% 1B% ft 

14% 14% +% 
30% 31 -1 

6% 6% 

«4 6% 

50 58 

46% 46% 

19% 19% 

S% 5% 

37% 38% 

18 19% 

15% 15% 

42% 43% 

8% 6% 

2% 2% 


Hr. E 1®* Mgk LOW UH Om 


PirtanB 112 9 

Pyranud 6 

duaddog 11 
Oodaflm 062 71 
OudFpad 020 18 
tostun 
Mddr 


HCtoc 


tetenw 

Mys 


S3 17 16% 16^4 
668 5% 8% 5% 
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215 17% 17% 17% 
82 23 22% 22% 

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Rap Waste 
teschhd 
Reuanx 
Reran Mb 
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tense 
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Ryan Folly 


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Smenoo 

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3 590 4% 

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a 220 uM 
13 493 15% 
13 200 14% 

2 238 3% 
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049 181750 47% 
9 15 5% 
060 10 277 35% 

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012 12 47 6% 
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044 3 1886 16% 
OX 12 2861 16 

a 77Z 23% 
168 59 493 19% 
052 a IBS IB 
060 14 H4u24% 

12 2105 6% 


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4% *& 

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18 18% 
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OX 14 63 ig% 18% 

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4 4201 4% d4% 
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006 62 » 12% 12% 

301491 13% 12% 
040 14 257 12 11% 

42 455 30% 30% 
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056 181156 23% 22 

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aa 21 595 19% 16% 
0X43 312 1211% 

155 2 21% 21% 

1.10 14 48 22}J 22% 
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1416894 27% 25% 
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5116012 45% 42% 
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la 19 16 19% 10 % 

07 121 ft 4% 
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2933417 13% 12% 13% -ii 
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WWSMSB0J2 71527 
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Veto* OH 95 1282 20% 1B% aft 
VtARsch m 443 ft 4% ft V, 

aemUah 1.12 9 321 40% 40 40 ft 


42 


WORLD STOCK MARKETS 


FINANCIAL TIMES 


Friday September 2 1994 


AMERICA 


EUROPE 


Earnings fears 
hit technology 
stocks hard 


Wall Street 


US share prices retreated yes- 
terday morning when *h<» out- 
look for computer stocks 
became clouded, writes Frank 
McCarty in New York. 

By 1 pm, the Dow Jones 
Industrial Average was 10.69 
lower at 3,902.73, while the 
Standard ft Poor’s 500 was 
down JL21 at 47129. The set- 
back was broadly-based, with 
Big Board declines leading 
advances by a two-to-one mar- 
gin. NYSE volume was moder- 
ate, with 171m shares traded 
by early afternoon. 

In the secondary market, the 
American SE composite was 


NYSE volume 



off L01 at 45333. The Nasdaq 
composite, with its heavy con- 
centration of technology 
stocks, suffered more, dropping 
5-32 to 76030. 

The day’s economic news 
had an indirect impact on 
share prices. The National 
Association of Purchasing 
Management revealed that the 
prices-paid component of its 
August survey had risen to Its 
hf ghpgt level in six years. 

With Investors on edge 
nhiwri of today's employment 
data, the NAPM report was 
more than enough to encour- 
age some profit-taking in cycli- 
cal stocks which led the mar- 
ket’s recent rally. Caterpillar 
gave back $1% to $11414 and 
International Paper $% to 376 Vi. 

But the most important 
cause of yesterday's weakness 


Brazil rises 2.1 per cent 


Sfio Paulo rose 2.1 per cent in 
moderate trade as prices 
rebounded from early losses 
after investors returned to the 
market on news that the cen- 
tral bank had taken fresh steps 
to control liquidity In the 
banking bystem. 

The Bovespa Index gained 
1,098 at 54393 at 1300 local time 
in turnover of R$214.3m 
($242.1m). 

Prices were also bolstered by 
two new opinion polls showing 
Mr Fernando Henrique Car- 
doso, the former economy min- 
ister, advancing farther in the 
presidential race which 
Improved his chances of win- 
ning the election outright in 


the first round of voting on 
October 3. 

Mexico 

Shares rose in early trade in a 
technical rebound after five 
days of losses. The EPC index 
put on 1833 to 2,721.06 in the 
first hour of trading, as ana- 
lysts suggested that wary 
investors were waiting for the 
victorious presidential candi- 
date, Mr Ernesto Zedillo, to 
give an indication of the com- 
position of the new cabinet 
Telmex L shares, available to 
foreigners, gained 13 per cent 
while the ADRs rose 3% to 
363% in New York. 


S Africa optimistic on gold 


A growing mood of optimism 
over the bullion price outlook 
took gold and mining-related 
shares higher in Johannes- 
burg. The gold index rose 42, 
or 13 per cent to 2331, the 
overall index added 35 to 
5368, and industrials put on 
ll to 6346. 

De Been recovered part of 
recent lost ground to add 
B1.75 to RIOS. Gencor made 40 
cents at BJ.3.90, Lonrho added 


30 cents to RIO and Minorco 
rose Rl to R117. 

Iscor improved 11 cents to 
R4.25 on improved annual 
results and a bullish outlook. 
Randcoal made gains after 
news of its merger with Trans- 
Natal, adding Rl.75 to K2S.75. 

Loralne gained 75 cents to 
R22, Vaal Reefs rose R18 to 
R447 and Kloof added Rl to 
RBS. Sasol gained 70 cents to 
R32L25. 


Corporate results lose impact 
as bourses follow Wall Street 


was a sudden loss of confi- 
dence in the health of the com- 
puter industry. The broad 
sell-off appeared to have been 
triggered by ART Research 
which, a day earlier, had 
warned that It would post a 
loss this quarter. The Nasdaq- 
listed stock plunged $4% to 
$13% as the news p rompted at 
least two Wall Street securities 
houses to downgrade the issue. 

But the impact of the 
announcement was felt by a 
wide range of technology 
stocks. Among software devel- 
opers, Microsoft lost $1% to 
356%. Among the chip suppli- 
ers, Motorola dropped $1% to 
352%, National Semiconductor 
31% at 317% and Advanced 
Micro Devices $1% to $27%. 

The trig computer manfactur- 
ers were not spared, either. 
Compaq was marked down 31% 
to 335% with reports that it 
was trimming orders from sup- 
pliers adding fuel to the fire. 
Apple dropped $tt to 335% and 
IBM slipped 3% to 367%. 

Some re tailing stocks also 
came under pressure. The Gap 
plunged 33% to 339% after 
revealing that revenues from 
stores opened at least a year 
had fallen by 5 per cent last 
month. Dayton Hudson lost 
32% to 382% when its same- 
store sales came in under 
expectations. 

Elsewhere, Fingerhut made a 
rare appearance on the NYSE's 
most active list in volume of 
3.1m shares. The stock plunged 
16 per cent, or $4% to 323% as 
the mail-order merchandiser 
warned that its third-quarter 
profits would suffer as a result 
of start-up costs relating to a 
television shopping service. 

Canada 

Toronto’s 

TSE 300 composite index fell 
21.21 to 4^28J29 in volume of 
31.49m shares. Declines out- 
paced advances by 281 to 229 
with 291 issues fiat 

Cott Corp surged C$2% to 
C$17 on its denials that a Lob- 
law soft drink contract was hi 
any danger, and on a buy 
recommendation by Donaldson 
Lufkin Janette. 


The intermittent and very 
recent ability of bourses to 
major on corporate perfor- 
mance was shelved again yes- 
terday as the dollar weakened 
and Wall Street lost ground, 
writes Our Markets Staff. 

PARIS ended little c frswgpd 
in domestic bond markets, but 
Wall Street's performance dis- 
heartened equity traders in the 
afternoon and the CAC 40 
index ended 34.17, or L65 per 
rant lower at 2$34J31 in turn- 
over of about FFr2Rbn. 

There was some consolation 
in company results. Elf Aqui- 
taine produced lower profits 
but said that good results from 
riiamteaTfl had offset weak ofi 
prices. The shares fell FF5.40 to 
FFr410.60 while its Sanofi, 
pharmaceuticals to perfumes 
subsidiary lost only FFr2 at 
FFr957 when it said that ana- 
lysts’ forecasts for 1994 were 
achievable. 

Meanwhile, Bouygues fell 
sharply after the construction 
group told analysts that it was 
still suffering losses from its 
property interests. The shares 
closed FFr26 down at FFr650. 

Ranks fell after broad gams 
on Wednesday. CFF lost FFr38, 
or 3J5 per cent at FFr957 and 
BNP ITW, or 3J2 per cart at 
FFr242.5. Alcatel Alsthom 
extended Wednesday’s fell on 
renewed allegations of corpo- 
rate misdeeds, ending FFr19 
lower at FFr580. But Alcatel 


ASIA PACIFIC 


1 FT-SE Ac 

■■jar is 

*s Shi 

.-a? indices 



Sop 1 

Itartr (tenon 

Opai 

mao 

THE EUROPEAN S89ES 
iun T 2 oo ixoQ 1400 ism odm 

FT-SE Earns* 100 
(T-SE Evokack 200 

140240 

14SBL93 

140071 

T4S4S1 

1401j(7 14023 14020 
145451 145048 14SSJHS 

140279 

145488 

138038 139082 
1481.16 148009 



Aug 31 

Aog 30 Aug 26 

Aug 25 

Am 24 

FT-SE BrakaeK TOO 
FT-SE Bretedc 200 


1*0552 

148CL56 

1«7im 1385L8S 

145043 144058 

137077 

1433J7 

138031 

141032 


i idoo (asnam: Mutate: tod - warn: an - mbum imtbf 100 - noun an ■ msbjn t mu 


Cable rose FFr29, or 4.6 per 
cent to FFr656 on a study by 
the British Cable Television 
Association on pending invest- 
ments in Europe. 

FRANKFURT aided the ses- 
sion with the Dax hidwr 12.05 
lower at 2^00.80, in no way 
surprised by the Buba decision. 
The real damage was rinnt> in 
the afternoon as US equities 
and bands, German bund 
futures slid on the latest US 
Inflation data, the Ibis-indi- 
cated Dax sliding to 2,185.78- 

Turnover fell from DMSJJbn 
to DM6.4bn. Daimler-Benz, 
which rose DM350 to DM841 in 
further appreciation of 
Wednesday’s first half results, 
succumbed after hours with a 
fell to DM83L40. 

Similarly, Metallgesellschaft 
ended the afternoon down 
DM12, or 5.6 per cent at DM203 
a fter a session fell of DM6 to 
DM205. On Wednesday, the 
company extricated Itself from 
expensive links with Castle 
Energy of the US, but warned 


at the same time that pyys tTTi g 
provisions of around DMlbn 
would not be enough to cover 
it s exp osure. 

ZURICH was unable to main- 
tain early strength and prices 
turned lower, as investors were 
disap pointed by the half year 
statement from Sandoz and 
depressed further late in the 
day by Wall Street's early per- 
formance. The SMI index Ml 
17.2 to 2,628.4. 

Sandoz registered shares 
were SFrl8 lower at SFr673 
after the com pan y's anrumnra. 
meat that first half net profit 
rose by 2 per cent, compared 
with expectations of a 5-10 per 
cent advance. 

Roche, still benefiting from 
switching out of other pharma- 
ceutical issues saw Its certifi- 
cates surrender SFr20 to 
SFr6,080. The group is to 
release first half results, 
hmindfaig a net profit figure, 
tomorrow. 

A gainst the trend, Schindler 
climbed SFnlSO to SFr7,600 and 


SMH picked up SFr3 to SEW©. 
Both moves were attributed to 
speculative buying. 

AMKTKWT1AM finished at the 

day’s low after losses in bonds, 
and weakness in fhn Tendon 1 
and Frankfurt markets 
depressed financial issues. The 
AEX index fell 333 to 416.ll. 

Against the trend, VNU 
gained FI 9.60 or 5.2 per cart to 
F1196L00 in response to its first 
half earnings which came 
along with a forecast of higher 
growth for the second half 
after the market closed on 
Wednesday. 

Bos kalis Westminster, the 
dredging company, dropped 10 
cents to FI4L90 ahead of its 
results, which were in line 
with expectations and which 
came after the market closed. 

BolsWessanen, the food and 
beverage group, remained 
under pressure losing another 
40 rants down to F13R5Q after 
its lower-than-expected half 
year figures. 

MILAN finished fewer after a 
listless session which saw the 
Count index lose 4L52 to 686JO, 
as the market awaited further 
developments on the budget 
and pensions. Investors ware 
also digesting the the latest 
scrap between the coalition 
partners after Mr Umberto 
Bossi, leader of the Northern 
League, said that the prime 
minister. Mr Silvio Berlusconi, 
wanted a snap election. 


EUROPEAN EQUITIES TURNOVER 
Monfltly total fn local currondM (bn) 


Bourae 

Apr 

1994 

May 

1994 

41 

July 

1994 

' US 
(bn 


69A3 

7008 

• 7122 

43£Q 

123 


14S.17 

175.15 

215w7 

14526 

26.75 


188X10 

151.07 ' 

165.42 

127.41 

80.18 

ttsty 

105464 

99228 

59,404 

49^40 

31 A3 

Netherlands 

' 2&20 

21.80 

26.40 

1&40 

1033 


1,10049 

1,340.00 

1,308.75 

1282.18 

9.82 

Switzerland 

2093 

26.12 

21.63 

1656 

1081 

UK 

4057 

44s27 

4&32 

45.16 

89.33 

Vouam apnmrtt pentmm md Mba. 

MM dWt meatmti to fadWV trmgne- Seme Ogumt may (m 



SouWNMW 







f 


European turnover figures for July were delayed, and 
reduced by the holiday season, 18 per cent down on June 
after of 3 per cent for that month and 8.6 per cent in 
This, says Mr James Cornish of NatWeSt Securities 
j produces the figures, was in spite of a 5Jt per cent 
_ in the FT-Actuaries Europe index after its 4.1 per cent 

in June/fibe awmikwri: fells in turnover were In Spain and 

in the UK, down by just 1J8 and %S per cent respectively; the 
biggest were in France and Belgium, each down by nearly 
one-third, followed by the Netherlands and Germany, down 
30J3 per cent and 23 per cent. 


Olivetti, which fell 5 per cent 
an Wednesday dipped another 
L8 to L2,115. However, it 
jacked up from a day’s low of 
T.v ran after the company ruled 
out a capital increase to 
finance a mobile telephones 
venture and syjd that first half 
turnover had risen by 7 per 
cent 

MADRID fielded a batch of 
corporate results, encouraging 
and otherwise, but it was 
unable to Ignore Wall Street 
and high domestic bond yields. 
The general index fell 480, or 
18 pa* cent to 307J2 in turn- 
over of just under Pta20bn. 

Banks did not like the bond 
yield focus, Argentaria losing 
Ptal80, or '2.9 per cent at 
Pta&330 and Bankinter Pta250 
at PtaU.,920. Among results, a 
big rise in profits from Iber- 


drola left the utility only Ptafi 
lower at Pta874 although End- 
esa dropped Ptal70 at PtaS.680; 
but a small tjeriinq in half year 
profits left Dragados. the con- 
struction company, PtaSO, or 
4.1 per cent lower atPta2JL15. 

STOCKHOLM liked the Astra 
results which took the shares 
up SKr7 to SKrl83. Mr Fanl 
Krikler at Goldman Sachs said 
that the hawk had arfftoH the 
stock to its priority list The 
Aff&rsv&rlden General Index 
rose 6.70 to 1,45920. 

WARSAW lost 48 per cant 
after Wednesday’s 4.4 per cent 
drop, the Wig index dosing 
546.4 fewer at 10,635.0 as bro- 
kers crartinned to hope for a 
technical rally. 

Written and edited by VjfflHam 
Cochrane and Mtehael Morgan 




S 

<■ V- ■ 


* 


Nikkei edges higher as Kuala Lumpur advances 2.3% 


Tokyo 


Interest in telecommunications 
stocks propped up activity, but 
the Nikkei average only saw 
marginal gains due to profit- 
taking in popular issues, writes 
Emiko Temzono in Tokyo. 

The Nikkei 225 index added 
14.40 to 2Q.642B3 after a few of 
20,617.52 in the morning and a 
high of 20,700.54 during the 
afternoon session. After losing 
ground on selling by corporate 
investors, brokers tried to sup- 
port tele co minimi cations - 
linked stocks ahead of the 
Japan Telecom listing, while 
overseas Investors and banks 
bought steels. 

Volume totalled 354m shares, 
rising above the 300m level for 
the first time since August 17. 
In spite of the rise in volume, 
advances in share {Rices were 
capped by arbitrage unwinding 
and profit-taking ahead of the 
September book dosing. 

The Topix index of all first 
section stocks fell 0.48 to 
L639.91 while the Nikkei 300 
declined 0.03 to 299.22. Losers 
outnumbered gainers by 513 to 
412 with 225 unchanged and, in 
London, the IS E/Nikkei 50 
index rose L37 to 1.38&9L 

Steels gained ground on 
heavy buying with Nippon 
Steel, heading the Ust, gaining 
Y6 to Y3S1. NKK followed, ris- 
ing Y7 to Y2S2 and Kawasaki 
Steel rose YU to Y434. 

Construction companies 
were higher on reports that 
July orders for the top 60 con- 
struction companies posted the 
first year on year rise in 18 
months. Shimizu rose Y30 to 
Y1.060 and Toda added Y29 to 

Y949. 

Nippon Telegraph and Tele- 
phone closed up Y8.000 at 
Y920.000 after climbing to 
Y14000 in the morning. DDL 
the telecoms operator on the 
second section, fell Y3G.000 to 
Ylm on profit -taking. 

Banks were lower. Industrial 
Bank of Japan fell Yio to 
Y3.010 and Mitsubishi Bank 
declined Y30 to Y2.590. Brokers 
were mixed with Daiwa Securi- 


ties losing Y10 to YL560 and 
Nikko Securities up Y10 to 
YL200. 

In Osaka, the OSE average 
rose 26.00 to 22,877.05 in vol- 
ume of flft-Sm shares. Volume 
rose on selling and buying 
back of shares by investors 
realising profits on their holdr 
ings ahead of the interim book 
dosing. 

Roundup 

Regional markets moved in 
opposite directions. 

KUALA LUMPUR matin up 
for its day’s holiday, gaining 
2.3 per cent as foreign fund 
managers increased the 
weighting of their Malaysian 
holdings. The composite index 
rose 2833 to LU&34, in volume 
of 37&n shares. 

Malaysia's biggest bank, 
Malayan Banking, led the 
advance with an 80 cent jump 

to M317.20. 

SINGAPORE saw a long- 
awaited run up as euphoria 
over property stocks and 
Malaysian shares spilled ova 1 
into the rest of the market The 
Straits Times Industrial Tndnr 
dosed up 2403 to 2^36.83. 

Cycle ft Carriage put on 90 
cents to a year’s high of S$12B0 
amid nnwn nrs of an expensive 
bid for Caltex House, a prime 
commercial property. 

WELLINGTON finished at a 
five month high, encouraged 
by the better-than-e xpected 
results from Fletcher Chal- 
lenge o n Wed nesday. 

The NZSB-40 Capital Index 
dosed up UL54 at 2067.02, hav- 
ing picked up 11.4 per cent 
since its trough for the year on 
July 11. Turnover was 
NZ$51.3m. Fletcher Challenge 
closed up ll cents at NZ34J29, a 
high for the year, after the 13 
cent rise on Wednesday. 

JAKARTA closed firm in 
moderate trading following 
some positive first half earn- 
ings reports and the market 
index rose 2.45 to 512.7L 

Consumer -related issues con- 
tinued to drive the market 
with a 6^ per cent GDP growth 
prelection this year appearing 


to indicate more disposable 
income for consumption. 

Pan Brothers rose Rpl50 to 
Rpl.350 in active trading on 
good fust-half results. 

HONG KONG closed lower 
on profit-taking, after the 
cumulative 7.5 per cent rise 
over the the previous four days 
when foreigners were active 
buyers. 

The Hang Seng Index fin- 
ished 38.49 lower at 9.890.90, 
having recovered from the 
day's low of 9,830.02, in turn- 
over of HK$6£6bn. 

The profit-taking was 
focused on utilities with Hong 


Kong Telecom falling 30 rants 
to HK316.70 and Hong Kong 
Electric 55 cents . lower at 
HK32680. 

The H share index jumped 
76.48 or 58 per cent to L369.26 
as fund managers re weighted 
their China stock holdings, 
prompted by the visit to China 
by the US Commerce Secre- 
tary, Mr Ron Brown. Yizheng 
ro se 25 cents to HK3283. 

SYDNEY saw profit-taking, 
as some recent corporate 
reports failed to excite the mar- 
ket and the All Ordinaries 
index lost 16J to 2005.5. 

Burns Fhflp eased 9 cents to 


A33.75 after reporting a 12 per 
rant rise in profits and saying 
that if planned to focus on 
inte gratin g aa gniaitimM. 

TAIPEI reversed early gains 
to dose below the 7,000-pctfnt 
resistance level as profit-taking 
emerged in late trade on fears 
.the central hank might ti g hten 
liquidity further within the 
tomking system. 

The weighted index fell 3386 
paints, or 0.48 per cent, to end 
at 6.974.15, off an intra-day 
high of 7j085RO. Turnover was 
a heavy T$99.6ibn. 

Plastics r overbought by 
investment trust wnnp ui y w tu 


previous rallies, consolidated. 
China Petrochemical fell T$2^0 
to T342.60. 

MANILA was marked lower 
with leading blue chips absorb- 
ing much of the railing as 
investors took profits ahaad of 
next week’s listing of Petron. 
the oil stock. 

The composite index dipped 
33.44 to 3,079.39 as turnover fell 
to L2bn pesos from Wednes- 
day’s L91bn pesos. 

BOMBAY was Iowa an prof- 
it-taking after Wednesday’s 
record dose and the BSE 30- 
share index dosed down 45*18 
at A542.78. 


•a 


3- 

hr_ 

4i... 

;*?-■ 

is- 


1 FT-ACTUARIES WORLD 

INDICES 












I 

jolndy eompBed by Th* Financial limes Ud. GoWmar. Sachs & Co. and NatWadi Sacufllaa Lid. In conjunction with tha traUtuta of Actuaries and the Faculty of Actuaries 

NATIONAL AND 

















Hgmi ki pMinn—— 

US 

Oaya 

Peund 



Local 

bocal 

Groat 

US 

Pound 



Local 



Yaw 

Vmr raartbar of Braw 

DoOar 

Cnteiga 

Sterlnfl 

Yen 

DM 

Currency % cbg 

an. 

Ctotor 

Starting 

Yen 

OK Currency 52 weak 52 weak 


of stock 

tndax 

% 

tndax 

hxfax 

Max 

tndax 

on day 

YMd 

Max 

Index 

tadaoc 

index 

Max 

Htoil 

Low l 


AuMraM |B8) 

- 180.82 

(U 

17447 

114.50 

14837 

181^4 

02 

041 

18013 

17418 

11148 

14101 

161.19 

189.15 

13924 

14852 

Auatria (17) 

103.64 

05 

18083 

122.62 

15839 

15182 

05 

151 

19170 

18853 

121.40 

15854 

15851 

19541 

16464 

172.70 

BatglumPT) 

174.79 

as 

16085 

11068 

14042 

14006 

02 

355 

17440 

16172 

10953 

14137 

130.72 

17178 

14162 

145.70 

Canada p(H) 

138M4 

02 

13088 

BS.76 

111.13 

134^2 

05 

252 

13118 

130.71 

86.16 

111.08 

13188 

14551 

12054 

12809 

Danmartc fSS 

251JS5 

-04 

242-72 

isa^s 

20141 

212.94 

-05 

1-3B 

7W K> 

244.17 

15059 

207.49 

21414 

27579 

22158 

22158 

Finland (24). 

17BJ6 

1.4 

17015 

111.67 

144.70 

18181 

15 

OJ4 

17300 

16115 

10955 

14259 

18657 

17055 

10428 

10954 


177.18 

OB 

17087 

11230 

14038 

160.14 

04 

253 

17654 

170*1 

111.03 

14481 

14354 

18557 

15954 

189.17 

Garmany (58) 

148.20 

03 

143.00 

83.85 

121.81 

121^1 

02 

1.89 

147.73 

14255 

9107 

12159 

12158 

14120 

12459 

125.75 

Hong Kong {»$ 

404.43 

15 

390.22 

26109 

33188 

40136 

25 

106 

39459 

38156 

24147 

32457 

39151 

50156 

292.08 

29757 

Wand (14 

210.88 

1.4 

203-57 

13160 

173.12 

19636 

10 

353 

20109 

201.21 

131.10 

17099 

19410 

21098 

16154 

168.40 

My (SB) 

84.03 

1.0 

81.06 

5121 

6195 

90.13 

02 

157 


8047 

52.43 

6858 

9853 

97.78 

5758 

7757 



18X62 

-03 

1S787 

10161 

13436 

103.61 

02 

074 

164.06 

15853 

1035S 

13451 

10356 

170.10 

12454 

16052 

Malay*. (97) 

547 M 

-03 

528.75 

347 JX) 

449.88 

540.08 

00 

153 

54956 

531.40 

34653 

46156 

340 Jpe 

62153 

387.74 

387.74 

Mexico (IB) 

_ «77.73 

-10 

2197.70 

144230 

1068.96 

645161 

-06 

158 

230040 

222444 

144130 

189027 

850025 

264756 

1615.11 

173417 

Motherland (27) 

215.72 

0.0 

208.14 

13060 

177.01 

17440 

OO 

129 

215.70 

20157 

13559 

17754 

17441 

217.02 

18025 

18456 

New Zealand (M) 

73.52 

1.1 

7094 

4158 

3033 

84.84 

15 

3jSB 

72.74 

7054 

4553 

6177 

6419 

7759 

6922 

6157 

Norway (23) 

207.67 

-04 

20037 

131 JO 

17040 

19510 

-05 

150 

208.48 

20159 

13154 

17150 

19174 

211.74 

16552 

17358 

Singapore 

38175 

07 

36058 

23034 

298.48 

251.44 

07 

146 

36153 

34958 

22754 

29650 

249.71 

37192 

28551 

28549 

Sooth Atria Wl 

30X17 

07 

29152 

18137 

24176 

29119 

-03 

2.11 

30151 

29125 

189.76 

24750 

29952 

30544 

17553 

19463 

Spate (to 

14136 

-02 

13132 

9078 

117.63 

14138 

-05 

408 

10.71 

13858 

9053 

11858 

14255 

1S5J9 

12188 

139.78 

Sxredan(M) 

-22133 

03 

21 155 

140.15 

101.61 

253.17 

0 2 

157 

22063 

21354 

13100 

18159 

2S2.B5 

231 55 

17553 

16177 

Swftzartand (47) 

16284 

05 

157.12 

10111 

13062 

13427 

03 

151 

181.97 

15651 

10104 

13159 

13351 

17156 

18546 

136.48 

UNwd Kingdom (M4)._ 

20178 

03 

18082 

129.04 

18731 

19&G2 

01 

358 

20353 

19161 

12853 

16659 

19651 

21456 

161.11 

167.79 

USA (517) 

194A7 

-at 

187.26 

122JJB 

15935 

1944)7 

-Ol 

2.78 

19452 

18750 

12252 

19167 

19452 

19104 

17185 

18940 

EUA0PEI718 

-17583 

0J3 

iea.46 

111JM 

144.11 

15198 

Ol 

253 

17002 

18024 

11026 

14181 

16175 

17158 

15356 

167.03 

Nordic (1119- 

J216.67 

03 

20025 

13732 

17735 

211.78 

02 

1j40 

21122 

20957 

13122 

17757 

21153 


17119 

17474 

Mile Baste (748) 

17143 

-ai 

16734 

10082 

14231 

11482 

04 

108 

17352 

187,79 

10952 

14259 

11419 

17656 

13479 

16477 

Ew o-PaeHi 0 (l4Gq 

174.23 

Ol 

168.11 

11033 

143.96 

13223 

03 

15S 

17403 

16128 

10164 

14100 

13158 

17555 

14166 

16147 

North Amenca (621) 

10044 

-ai 

18174 

12059 

15638 

18897 

-Ol 

177 

19065 

18435 

12011 

16656 

19017 

192.73 

17167 

16550 

EuopaEx. UK {514) — 

166.78 

0.4 

15135 

9936 

12162 

13194 

02 

257 

15015 

15099 

9857 

12850 

13658 

15112 

13457 

13750 

PacMc Ex. Japan P7H)^ 

266A0 

1.1 

269.12 

17006 

22037 

23&B2 

1.1 

Z71 

28558 

25658 

18758 

21859 

23651 

29621 

20013 


World Ex. US (1647) — 

175.79 

01 

16061 

11131 

14434 

13197 

05 

157 

17559 

16176 

11062 

14458 

135.81 

17137 

14656 

16155 

World Ex. UK (1K0) — 

178S7 

oo 

17130 

mn 

14153 

14051 

Ol 

101 

17157 

172.68 

11250 

14173 

14162 

17857 

15656 

168.14 

Worw Ex sa At £106} 

10003 

oo 

17171 

11430 

147.72 

19193 

01 

2.19 

18000 

17404 

11140 

14750 

15173 

16003 

16054 

16184 

WbltdEx. J4*WI(1GM). 

19280 

Ol 

18028 

12138 

15735 

18181 

Ol 

250 

181.71 

18557 

12078 

1S753 

10147 

19620 

17454 

17179 

Tha World tndax P164). 


0.0 

17445 

114.49 

14135 

1S400 

Ol 

Z19 

18078 

17477 

11187 

14852 

16181 

19050 

15855 

16959 


CapyrteM. nw Rnmtitf Tkn*» LMM. OdDnon. Sacta and Go. art H eWnl Sacurtaa UntaxL 1987 
lTTiThlii !■■■» I — Min fniHi irffllm r'Xx u ' i — 1 nr rTnT TTtHl 


^ Treuhandanstalt 

Announcement of requests to tender for the 
OPEN CAST MINING RECONSTRUCTION COMPAN 
in the Lausitz mining region 

Associated companies of the Treuhandanstalt are sailing 100 % of the business 
interests in tha four brown ooai reconstruction companies Gated below, aG of which 
are located between Cottbus and Dresden. Tha activities of the reconstruction 
companies include the di sma nt li ng of industrial plants and tha recultivation of open 
cast mining sites in tha Lainritz area. Tha reconstruction of open cast mines in 
eastern Germany is being carried out within the framework of publicly financed 
contracts. For the years 1995 to. 1997, a yearly contract sum of DM 1J5 billion has 
been made available far the reconstruction of the sites in the former GDR. These re- 
construction c on tr a cts have so far bean allocated according to a cost compen sa tion 
procedure. In the future it is Intended to put these contracts out to tender In accor- 
dance with VOB/VOL (German contract procedure regulations). The large majority of 
employees in these companies have employment c o ntracts far the duration of the 
projects for which they have barn employed. This is in accordance with S 248 h AFG 
(German employment regulation). The following companies are to be sold; 


1 



IE! 





9 



Turnover 1983: DM 320 mfifion 

To bn demerged on 1. October 1994 

Into: 

BS-01 “BUL-Sachaan- - 

BS-02 “BUL-Brandanburg-" 

Location: D-02977 Hoyerswerda 

Range of mrvtces: Tha clearing and dismantling of 

industrial sites and toe recultivation 
of open cast mines 

Employees vat 1. October 1994 (planned): 3-300 

Estimated turnover 1993: DM 134 Mio. 

Estimated turnover 

for the 8 months to 30. June 1994; DM 110 Mio. 

Location: D-01966 Brieske 

Range of services: The clearing end dismantling of 

industrial sites and the recultivation 
of open cast mines 

Employees as at 1. October 1994 (planned): 3.600 

Estimated turnover 1993: DM 188 Mio. 

Estimated turnover 

for the 6 months to 30. June 1994: DM 170 Mio. 

BS-03.Laucbhemmer Recur isliixctlori Company. Ltd. (SGL) . 

BS-04 Schwarzs Pumpe Reconstruction Company, Ltd. (SSP) 

Location: D-01979 Lauchhammer 

Start of 

business acthrttres: 1. January 1993 

Range of services: The clearing and dismantling of 

industrial sites and the recultivation 
of open cast mines 

Employees v at 30. Jane 1994: 1590 

Turnover 1993: DM 52 Mio. 

Turnover for the 6 months to 30. June 1994: DM 40 Mio. 

Location: D-03139 Schwa ne Pumpe 

Startof 

business activities: 7. January 1993 

Range of services: The clearing and dismantling of 

industrial sites and toe recultivation 
of open cast mines * 

Turnover 1993: DM S3 Mio. 

Timnoverftotha S months to 30: June 1994: DM 33 Min 


— ----- — — — ■ — — ....... — iisuiuno-uuMiucnin ny sanding a 

company profile along with a cheque for DM 100,- (per memorandum) payable to the Treuhandanstalt. Additions! sources of information will 
be offered in the sales memorandum. 




Deutsche Treuhand-Gesellschaft 


Corporate Finance Group 
Contact persons; Mr. T. Eh ran 

Mr. A. MQIlor 
Ms. B. Stark 


Kurfurstendarrun 207/208 
D- 107 19 Berlin 


Telephone: (49) 30-898 12-140 
J-wt (49) 30-886 12-823 


IIIIIIIIlIVIlllllIIlfllllllllVIlllIIIllHIVlIVIIIIIIII 
Residential Property 
Securities No. 1 PLC 

£200,000,000 

Mortgage Backed Floating Rate Notes 2018 - 

The rate of interest for the direr month i 
30rb November, 1994 has been .fixed at 5.9125 1 
Coupon No. 26 mil therefore be payable od 36 
£1,474.08 per coupon. 

A ggrega t e interest charging balances of Mongag 

previous Inter est Period: £3, 5)2,418.18 
Aggre ga te interest charging balances of Mortgages redeemed as at 
31 h August, 1994: £230,211,13770 
The aggregate principal amount of Notes outstanding as at 
3lir August, 2994: £80,000,000 

S.G.Warburg & Co. Ltd. . 

Agent Bank 

iiiiiviisiiiiiiimiiiiiiiiiiiiiiiiiiivifiiiiiiiHnii 



mim 

IR 


3i International B.V. 

(Foraalj texwn as htoeUors in fruOutrj /BUr^ntwttalRVJ 

£125,000,000 

GUARANT EE!) 

FLOATING RATE NOTES 1994 

FOR THE THREE MONTH PERIOD 
31ST AUGUST 1994 TO MTff NOVEMBER 19M 


In 


aocmdnee wite Um pwririous of the 


been fixed « 5 "/» per cent, 
per ummn and due the iaftrat payable on 
the ttfa wat nrfrr eet pa ym e n t dni^ 

Mth November, 1994 agahtt Coupon NoJS^ win be 

£14IA0 from Notes of £l 0,000 uonunri 

■ad £14.18 from Noses of £UW0 nominal. 

S.G.WARBURG & CO. LTD. 

(Agent Bank) 






I 



Defence: cold comfort for 
industry after the cold war 
Page 2 




FINANCIAL TIMES SURVEY 

AEROSPACE 


Airlines: slow flight 
back into profit 

Page 4 


Friday, September 2 1994 






' ■ ‘ r 
- x s. 





T he mood two years ago 
at the Famborough Air 
Show was one of pro- 
found gloom. The aerospace 
industry was in the midst of its 
worst past- war cyclical down- 
turn hit by the combined and 
prolonged effects of the slump 
in dvfl aviation and cuts in 
defence spending following the 
end of the cold war. 

Senior officials of leading 
aerospace companies were try- 
ing to put on a brave fhce 
Inside their corporate chale ts 
at the show. “Til offer a case of 
the best champagne to the first 
person who walks in with a 
real order,” said one executive 
of a large European aircraft 
manufacturing company. 

Next week, as the world 
aerospace Industry gathers 
again en masse at Farabor- 
ough, the atmosphere is likely 
to be much improved. Not that 
the industry is finally out of 
the woods, but at last it is see- 
ing some light on the other 
side of the dark valley. 

During the past Six mfinthq 
there have been tangible signs 
of recovery In the airline 
industry. After four years of 
record losses, world airlines 
expect to return to profit this 
year as passenger and cargo 
traffic continues to pick up 
strongly. In the first half of the 
year, the 224 airline members 
of the International Air Trans- 
port Association (LATA) saw 
their overall traffic grow by 9.3 
per cent compared with 13 per 
cent for the whole of last year. 

Although, this improvement 
has yet to tr anslat e into a new 
sustained wave of orders for 
aircraft manufacturers from 
more financially stable airline 
customers, the market ' has 
begun to stir. "Deferrals and 
cancellations of orders are now 
slowing down,” said a senior 
affinal of the European Airbus 
consortium. "Last year they 
were the rule: today they are 
becoming the exception.” 

Singapore Airlines, one of 
the most profitable carriers, 
sent a strong signal to the mar- 
ket in June when it placed one 
of the biggest new aircraft 
orders on record for 52 wide- 
body airliners worth $lO.Sbn. 
The airline said the deal 
reflected its confidence in the 
long-term health of the avia- 
tion industry. 



Manufacturers prepare for take-off 


This was in sharp contrast to 
what its chairman wrote in 
June 1993 in his annual state- 
ment when he noted that “avi- 
ation analysts surveying the 
carnage in the industry are 
sunk in despair”, in his annual 
statement this year, he 
wrote:“Analysts may be 
inclined to infer that the down- 
ward slide in the industry 
remains intact: their melan- 
choly may be misplaced.” 

This cautious revival of opti- 
mism has also followed two 
years of a continuing shake-up 
in the civil and defence sides of 
the business- Defence contrac- 
tors have had to adapt to what 
appears to he a lasting reduc- 
tion in government military 
budgets forcing them to accel- 
erate the trend towards greater 
consolidation and rationalisa- 
tion in the industry. 

The US has taTrpn the tear! 
with a significant wave of dis- 
posals of their defence activi- 
ties by some large industrial 
conglomerates to other groups 
that have decided to increase 


Collaboration, partnerships and joint ventures have ail become the rule 
In the civil sector, writes Paul Betts, Aerospace Correspondent 


their presence in a sh rinking 
market European competitors 
have been slower to adapt 

But in the past two years, 
there has been a growing trend 
of transnational mergers and 
consolidations in Europe. 
These include negotiations 
between British Aerospace and 
M a tra of France to merge their 
missiles activities: the planned 
acquisition by a joint venture 
between Matra and the UK 
General Electric Company of 
BAe's space' systems division; 
advanced negotiations between 
Aerospatiale of France and 
Deutsche Aerospace to com- 
bine their nrigsiipg and space 
operations in joint companies. 
gimtiar to the merger of their 
helicopter activities into Euro- 
copter. 

Collaboration, partnerships 
and joint ventures have all 
become the rule of the game in 


ths civil sector reflecting ^ 
global nature of the aerospace 
market as well as the rising 
costs of developing new prod- 
ucts and tprhnolng ips and the 
increasingly long investment 
pay-back time* ah aero- 
space manufacturers from air- 


frame producers to aero engine 
makers and components sup- 
pliers now agree that coopera- 
tion is the only way forward. 

The regional jet and com- 
muter tnrbopropeller market 
seems set for significant con- 
solidation In the coming year 
as manufacturers desperately 
seek to rationalise a sector 
where too many products are 


chasing too few orders. After 
failing in its efforts to merge 
its loss-making regional jet 
activities with Taiwan Aero- 
space, BAe is now in talks with 
the Dutch manufacturer Fok- 
ker which was taken over last 
year by Deutsche Aerospace. It 


is also in discussions with 
Aerospatiale to create a joint 
venture in the turboprop sec- 
tor. 

But even In the bigger end of 
the airliner market, the three 
leading manufacturers - Boe- 
ing and McDonnell Douglas of 
the US and the European Air- 
bus consortium - are seeking 
risk-sharing partners to collab- 


orate on the development of 
new programmes. Boeing and 
Airbus have also been discuss- 
ing during the past two years 
joint collaboration on a future 
very large aircraft with 600-800 
seats. 

However, these talks have 
been marred by suspicion with 
each side worried that the 
other is seeking to establish a 
in the future development 
of a super jumbo airliner. As a 
result, both Boeing and Airbus 
have continued to pursue sepa- 
rate studies to develop on their 
own a very large transport 
which they believe the mar ket 
Will need by the be ginning of 
the neyt century. 

Continuing trade frictions on 
government direct and indir ect 
supports for civil aircraft pro- 
grammes have not helped col- 
laboration efforts between Boe- 
ing and the Airbus partner 


In this survey 

Large commercial aircraft, page 2; Aero engines. Page 3; Akfnes, Page 4; 
Military aircr aft. Page 5; Missiles and avionics. Page 6; Scorer jumbo and 
SST-2, page 7; Spaceftgtrt Page 8; New materials, page 9; World markets. 
US. Japan. Russia. China. Europe^ Asia-Pacific, pages 10-14 


companies. Although the trade 
dispute has abated following 
the 1992 agreement between 
the US and the European 
Union on aircraft subsidies, 
both sides are still anxious to 
secure new commitments on 
this controversial issue. Tbe 
US wants even tougher restric- 
tions on direct subsidies to Air- 
bus. while Europe is insisting 
on stricter controls on indirect 
government support from 
Washington to its aerospace 
industry. 

All three leading aircraft 
manufacturers are continuing 
to forecast strong demand for 
new aircraft over the next 20 
years. Boeing, the world's big- 
gest manufacturer, expects 
$ 980 bn worth of new airliners 
to be sold in this period to 
meet the growth in air travel 
and the need to replace older 
jets. 

For the manufacturers, the 
biggest prize in the short to 
medium term remains the 
Aria-Pacific market which has 
continued to grow much faster 


than other regions with strong 
demand not only for civil air- 
craft but also for military 
equipment The Chinese civil 
aviation market in particular 

has been growing at breakneck 
speed. In contrast, the indus- 
try's earlier hopes of seeing the 
former Soviet Union emerge as 
a significant new market 
opportunity for western manu- 
facturers have so far failed to 
materialise. 

But the airline industry in 
general is in no hurry right 
now to start ordering new air- 
craft with the same frenzy’ as it 
did in tbe late 1980s. Airlines 
are still struggling to restore 
their balance sheets, badly 
dented by several consecutive 
years of losses and fare wars 
that have undermined their 
passenger fare yields. In the 
face of wbat are likely to be 
lasting pressures on yields, air- 
lines have sought to improve 
their financial performance by 
extensive cost-cutting to 
improve overall productivity. 

One of tbe most interesting 
recent trends in the airline 
industry's cost-cutting drive 
has been the growth in 
employee ownership in air- 
lines. The US has taken the 
lead and already employees 
own 26 per cent of Northwest 
Airlines, 45 per cent of Trans 
World Airlines and 55 per cent 
of United Airlines. Negotia- 
tions are taking place between 
management and employees at 
USAir over restructuring pro- 
posals also involving an 
exchange of equity to employ- 
ees for labour concessions. 
This trend now seems set to 
spread to other countries. 
Already British Airways pilots 
are interested in increasing 
their stake in their airline 

Because airlines are preoccu- * 
pied with holding down costs, 
manufacturers have had to 
shift their tra ditional emphasis 
from pure product research 
and development to improving 
their manufacturing processes. 
This will enable them to pro- 
duce airliners more cost effi- 
ciently thus ensuring a return 
on investment from airline cus- 
tomers purchasing aircraft 
with lower operating and 
acquisition costs. "The issue 
today is not so much what you 
build but how you build it." 
exp laine d an Airbus executive. 








Snecm is one of the world's leading aircraft engine manufacturers, with customers 
throughout the five continents T he CFM56 family - fruit of our long-standing 
catlabo ration with General Electric - is the benchmark in commercial aviation. 
AnJ the M88 powerplant for the Rafale mullirole fighter pushes the military performance envelope 
further lhan ever before We've achieved tfirs success tfcaitfts to unrivalled expertise iff engine 
technologies. And we go further even/ dag by listening to our customers and responding to their needs. 
tftflfffc* to ambitious R&D programs. Wording from these solid foundations, we continue to forge 
new alliances and seek new solutions that wilt power l he aerospace industry well into the future 


GOME AND VISIT US 
AT FARNB0R0UGIf34 
FROM SEPTEMBER 05-11, 1994 
HALL 1-C2A 



sneema 


POWER ALOFT 






Paul Betts says the worst may be over for the beleaguered commercial aircraft industry 


Preparing for tomorrow today 


Some signs have Anall y 
emerged that the worst is pos- 
sibly over for the beleaguered 
commercial aircraft industry. 

Singapore Airlines this sum- 
mer placed one of the world’s 
biggest aircraft orders for 52 
US Boeing and European Air- 
bus wldebody airliners worth 
SlO^bn. Dr Cheong Choong 
Kong, the airline's managing 
director, described it as “an 
expression of faith in the 
longterm health of the avia- 
tion industry". A few months 
earlier, Saudi Arabia also 
announced a jumbo order for 
about $6bn worth of Boeing 
»nd MrTVmnaii Douglas airlin- 
ers. 

Although these large deals, 

once c omm onplace in the late 

1980s before the industry was 
plunged into its worst reces- 
sion during the last four years, 
are still the exception rather 
than the rule, all three main 
commercial aircraft manufac- 
turers - Boeing, Airbus and 
McDonnell Douglas - are 
beginning to see some light at 
flu* t»nd nf fhw tnwnal- 

"Last year we all sufferred 
big order cancellations and 
deferrals fimm airlines. At least 
this year cancellations and 
deferrals have petered out," 
says Jean Kersan, the Airbus 
chief executive. 

"The airline industry has 
had a hell of a tima but I 
expect the airline market to 
bottom out,” says John McDon- 
nell, chairman of McDonnell 
Douglas, the most vulnerable 
of the three big manufacturers 
to the industry's difficulties . “I 
do see signs that we are com- 
ing out of the depression. I’ve 
been through three cycles. Peo- 
ple have speculated that we 
would go out of the commer- 
cial aircraft business. It hasn't 
happened yet and it wont hap- 


pen in this cycle," he adds. 

And Boeing; the world's big- 
gest manufacturer of commer- 
cial jets, is still forecasting 
demand for new airliners 
worth $980bn in the next 20 
years to meet the growth in air 
travel and the need to replace 
older jets. In its latest civil air- 
craft market outlook, Boeing 
says that $781bn worth of new 
aircraft will be need to accom- 
modate future air traffic 
growth and $249bn to re plac e 
older aircraft. 

But the four-year long reces- 
sion has left deep scars and 
forced aircraft manufacturers 
to adapt rapidly to a funda- 
mental structural change in 
the market Air traffic, a tradi- 
tional barometer of economic 
activity, is now recovering but 
the passenger yields of iHHhwg 
to remain under pres- 
sure because of low fares. 
Many airlines as a result con- 
tinue to be burdened by finan- 
cial losses and debts signifi- 
cantly reducing their ability to 
acquire new aircraft. 

“It is becoming more and 
more evident that revenue, 
rather than traffic, is becoming 
the key to airline profitability,'’ 
says Adam Brown, head of 
strategic planning at Airbus. 
f jVp other industry experts, Mr 
Brown believes low fares are 
here to stay and airlines will 
have to rely increasingly for 
their profits on cost reductions 
anit operational affirianri an Tn 

turn, they will seek to fill their 
fleets with aircraft with both 
lower operating and acquisi- 
tion costs. 

These financial pressures 
coupled with the industry's 
increasing concentration has 
led to a further intensification 
of competition in the commer- 
cial aircraft market As Boeing 
puts it “There are only 600 air- 



lines in the world. Only 125 of 
these buy new airplanes. And 
the 20 largest airlines buy 60 
per rwnt of all new commercial 
airplanes. In such a concen- 
trated market, you cant afford 
to a aingto gfratag ir sale." 

To respond to these new 
challenges, aircraft manufac- 
turing has been forced to 
evolve from a business driven 
purely by product, research 
and development to one where 
the manufacturing process will 
make the difference between 
one airframe builder and its 
rivals. “It is no longer so much 
what you build but how you 
build that will give you the 
edge over the competition," 
explains a senior Airbus execu- 
tive. 

“We are all having to adapt 
to this new competitive envi- 
ronment,” says Claude Terraz- 
zoni, head of the commercial 
aircraft division, of Aerospa- 
tiale, the French partner in the 
Airbus consortium. “Boeing is 
now cutting its production 


costs by 25 per cent: either 
they want to kill us because 
they thfnfc Airbus can't 
such cuts, or they are adapt m g 
to the structural change in the 
airline industry with low fares; 
or they are trying to do both,” 
he adds. 

At the roll-out this siring of 
its latest nirtiwBr - the 400-seat 
777 twin-engine wldebody - 
Bon Woodard, the head of the 
US company’s co m me r cial air- 
craft operations, said Boeing 
was committed to drive down 
costs and the time to build an 
aircraft “to make sure we 
remain the world's most com- 
petitive manufacturer of com- 
mercial jets”. 

Boeing has already reduced 
the order-t o-detive ry time of its 
wldebody aircraft such as the 
747 and the 767 from as high as 
18 mouths a few years ago to 
around 10.5 months and wants 
to faring it down even further 
to eight months, ft eventually 
hopes to achieve the same tar- 
get for the 7T7, the latest mem- 


ber of its family. 

Boeing has already reduced 
the production cycle time for 
Its narrowbody ahmaft, includ- 
ing the 737 and the 757, to nine 
months and is planning to 
bring it down to six months by 
1996. 

The way Boeing has devel- 
oped the 777 is annfhw Wfam- 


Manufacturers are 
beginning to see light at 
the end of the tunnel 


pie of hOW man n fafifc iTPers have 
adapted their wp w aHmm to 
changes that have taken place 
in the dvfi aircraft business. 
Boring describes the 777 as a 
“market-driven" airliner. In 
the past, the manufacturer felt 
it knew what was best far its 
airline customers. But with the 
777, Boeing has encouraged air- 
lines, suppliers and sub-con- 
tractors to participate actively 
in the design and planning of 



Record-Setting Historic. 
But Not Unusual. 


During the past year, we launched, delivered, flew and set world records. 

A few of those accomplishments are celebrated by the photographs above. Just a few. 

Of course, whats really amazing about this collection of breakthroughs is the message it sends: 
At McDonnell Douglas, breakthroughs may be exceptional, but they aren’t unusual. 

MCDONNELL DOUCLAS 

Performance Above and Beyond. 

O tm ILfimrl fivriklwjnam 


* 


% 


FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 




Tost flight Boaing pflots fomMarfaing themsalVM wllh the 777 atectranlcs In a specMy-oquIppad tabwatay. 


the new airliner. 

“Not that we did not fasten, to 
our customers in the past, but 
the biggest lesson we learnt 
was that we. often listened to 
them late in the programme," 
explains a senior Boring execu- 
tive. At all cost. Boring wanted 
to avoid the mistakes made 
five years ago an the develop- 
ment af the 747-400, the newest 
version af Its 747 Jumbo. After 
failing to listen properly to its 
customers, Boeing was forced 
to delay delivery for several 
months to initial customers 
because of teething problems 
and design changes demanded 
by airlines. This time, Boeing 
wanted to make sure it had 
what it calls a “service ready" 
air liner from the first 777 deliv- 
ery. 

The change in Boeing’s man- 
ufacturing approach reflects 
two important evolutions in 
the market The first was the 
need to adapt to the new cir- 
cumstances, facing airlines hit 
by the prolonged slump in civil 


aviation. The second, and per- 
haps even more important fac- 
tor, was the emergence of Air- 
bus as Boeing’s principal 
long-term challenger. 

The European consortium, 
which has steadily buOt mar- 
ket share during the past 20 
years by launching advanced 
new aircraft programmes and 
developing a broad family of 
airliners, has been making 
serious inroads into some of 
Boeing's traditional customers 
inducting in its domestic US 
market. 

With nearly 30 per cent ' of 
the world market. Airbus has 
now overtaken McDonnell 
Douglas in the industry's num- 
ber two slot behind Boeing. 
The US company's Douglas 
commercial aircraft division 
has been given a Mg boost by 
Saudi Arabia’s decision to 
award a large dice of its new 
$6bn order to the Long Beach, 
California, group. But Douglas 
continues to be handicapped 
by its limited product range 
focused on two niche markets 
with its MDil three-engine 
wldebody airliner and its 
MD90, MD-90 and the planned 
MD-95 n a rrowbody twin-engine 
airliners all derived from the 
original DC-9. 

Douglas has not abandoned 
the idea of forging an interna- 
tional alliance, with foreign 
partners acquiring up to 49 per 
cent of the Long Beach con- 
cern, A giraflar scheme with 
Taiwan collapsed two years 
ago. But in the absence of 
establishing a strong interna- 
tional alliance, many in the 
industry expect Dougfas tofind- 
it increasingly hard to compete 
with just two product lines. 
“This is simply not a niche 
business. You need a broad 
family of aircraft to compete,” 
explains one of Douglas’s main 
rivals. 

In contrast. Airbus has 
embraced the “family concept” 
with its A32Q, A319 and A321 
narrowbody airliners^ its A300 . 
and ASIA widebodies, and its 
latest wldebodles including the 
A330 twhtengine airliner and 
its sister aircraft, the fburen- 
gine very long range A340. 

From the beginning, Airbus 
has sought to leapfrog Boeing 
with its products by introduc- 
ing new technological concepts 
to commercial jets including 
fly-by-wire electronic controls. 
And with the A330 and A340 
and plans to develop the A3XX, 
a 500 to 600-seater jumbo, Air- 
bus has also increasingly chal- 
lenged Boring’s dominance of 
the large aircraft market 

The reaction at Boeing has 
been violent As Mr Woodard 
put ft in Boeing’s staff maga- 
zine: -“We decided to prepare 
for the future today, while 
we’re number one because 
number two is unthinkable.” 
Boring’s cost-cutting drive h as 


involved 28,000 Job reductions 
in 1993 and 1994. The US com- 
pany has stepped up the wide- 
spread application of new com- 
puter and automated 
manufacturing techniques. It 
has introduced new orgmlsa- 
Eional structures to improve 

intumal .wnr lri ng relations and 

practices. 

AH this has now put .pres- 
sure on Airbus to accelerate its 
own internal change to 
respond to the new competitive 
challenge from Rwwig simply 
put, the commercial success of 
Airbus, whose sales topped 
$8bn last year and are expected 
to reach mim level 
year, is in danger of being 
undermined by the group's 
own complex corporate struo- 
. tine and complex work-sharing 
production system based in its 
four partner countries - 
France, Germany, the UK anil 
Spain. 

But all four Airbus partners 
now recognise that the chal- 
lenge far Airbus is to trans- 
form what was initially con- 
ceived as a job and wealth 
creation consortium to com- 
pete against the dominance of 
the US manufacturers mto an 
independent company, mature 
enough to rationalise and 
restructure, take hard political 
and social decisions, and stand 
an Us own two corporate feet 

Airbus says it Is confident it 
can meet Boeing's challenge. 
It, too, has cut back an exces- 
sive staff with its fo ur partners 
all launching extensive 
restructuring, ft is attempting 
to maximise the big invest 
m ants made during the. past ® 
years in automation and com- 
puter-aided manufacturing: ft 
has also sought to simplify and 
streamline the consortium’s' 
complicated four-nation manu- 
facturing and assembly pro- 
cesses. T' 

Mr Pierson, the Airbus chief 
executive, has set production 
targets for Airbus, airliners 
similar to those set by its rival 
Boeing. “For narrowbody air- 
craft we are also aiming ' at an 
ardsr-to-dehvery target of six 
months in 1996. Today it is 12 
months, next year- it will -go : 
down to nine,” be says. For 
widebody aircraft like the 
A300, A310, A330 and AMO. Afr 
bus has already reduced pro- . . 
Auction cycle times from 15- 
months to ra g months and 
plans to go down to nine ; 
months by 1996. 

But the -task remains. .a./ 
daunting one far Airbus. 3Se.^7 
European consortium fi5?~ 
started transforming itseM^but 
the process is a slow and politi- 
cally difficult one. Unless^ ' 
steps up the tempo, it will fil’d 
it bard to keep up with the 
pace being set by Boring. As 
Philip Comfit, Boeing’s presi- 
dent, has put it: “The race «01 
go to whoever is fastest." - - 


’• ,1 . 


;oid comfort 


ss'" - : :j; 


V'. ’ - 


VCi“ • 


-a:, 

■a Is; 


i'J )\i-_ ! 

"3li ; ilrr/*--. r __ _* 

••• 



7 '. 

* rl . • 

■ Sfe,'. • . 

r. - . 

• 


Defence contractors 

Cold comfort 
after cold war 


Norman Augustine, the 
chairman and ufoirf gwra-ii v on 
of Martin Marietta, has been 
negotiating some tough deals 
with the Pentagon recently. 
When the company agreed to 
acquire General Dynamics' 
Space Systems division in May, 
the Department' of Defence 
agreed to pay for some of the 
rationalisation costs, and to 
allow Martin Marietta to keep 
half of the resulting savin gs 
Such dfials are likely to 
become , more common if the 
Penta g on has its way, but it 
does not herald a sudden out- 
break of altruism in Washing- 
ton. The Department of 
Defence thinks that if the 
defence industry consolidates 


into fewer larger manufactur- 
ers it will save money, in the 
case of General Dynamics 
Space business, for example, 
paying $80m in restructuring 
charges may save $500m on the 
cost of launch vehicles over 
the next 10 years. 

If incentives from the 
Department of Defence are the 
carrots to encourage industry 


mergers and rationalisation, 
there are plenty of sticks, too. 
As US defence spending has 
been cut In the wake of the 
Reagan arm* build-up and the 
end of the cold, war, weapons 

procurement has been by far 
the worst hit section of the 
budget Total defence expendi- 
ture is down by a third tn real 
terms in the past decade, but 
weapons procurement has 
fallen by two-thirds. Since that 
is what pots bread into the 
mouth of defence companies, 
some people have gone hungry. 

The industry has had to 
respond rapidly to this rising 
pressure. Since 1990, employ- 
ment in the US defence indus- 
try has fallen from L3m to 
800,000. There has also bear a 
string of deals with companies 
trading businesses. Yet, so far 
there has been no root, and 
nor- has -the game of mnaiftal 
chairs turned nasty, despite 
the steadily reducing number 
of seats. . . 

The first to pull out were the 
Continued an page 3 




FINANCIAL TIMES 


III 


FRIDAY SEPTEMBER 2 1994 . 


jAEs 


n# 

d* 


Paul Betts discusses the manufacture of aero engines 

Quest for ever more power 


Hm development of the most 
powerful commercial jet 
engines ever built ha$ contin- 
ued to dominate the efforts of 
. the world's leading aeroengine 

manufacturers. 

The stakes are huge. 
Between them, the big three 
aero-engine makers are spend- 
ing around J4bn to develop 
these new power plants which 
can deliver more than loo.oooib 
of- thrust. The Trent being 
developed by Rolls-Royce of 
the UK has already been run at 
106.0001b of thrust General 
Electric of the US has tested its 
new GE90 at an even higher 
rating of 110,0001b. while the 
other big US manufacturer, 
j. Pratt & Whitney, has also run 
Us more powerful derivative of 
the PW4000 at more than 
100.0001b of thrust. 

When Rolls-Royce first 
unveiled the Trent programme 
at the Faraborough Air Show 
back in 1988, Sir Frank Whit- 
tle, the father of the jet engine, 
conld hardly disguise his 
amazement at the extraordi- 
nary progress made in engine 
technology since the develop- 
ment of his first engine with 

- % only 4801b of thrust. 

"the most powerful engine I 

- designed had a thrust of 25001b. 

I would have said something 
like 10,0001b was as far as we 
were likely to go. If we wanted 


more power for a particular 
aeroplane, we'd just have had 
more engines than, say, two of 
these enormous, powerful 
jobs," he said. 

Throughout the history of 
the commercial aerospace 
industry, aircraft have been 
getting bigger and heavier, and 
as Russ Sparks, the GE90 pro- 
gramme manager notes “the 
heavier versions of aircraft 
have traditionally sold best". 

This trend is showing no 
Sign of abating. Aero-engine 
makers now expect th a t by far 
the largest portion of all civil 
aerospace business in the 
future - around 60 per cent by 
value - will be in the large, 
widebody aircraft sector 
requiring a new generation of 
heavy thrust engines. 

At present there is only lim- 
ited market application for file 
new big power plants under 
development with the new Boe- 
ing 777 wid e-body twin-engine 
airliner, which made its ni ght 
debut in June with Pratt & 
Whitney engines, the prime 
contender. At the same time, 
there is no demand at this 
stage for engines with thrusts 
of more than 100 ,0001b since 
Boeing requires thrust ratings 
of 76.0001b and 84,0001b for the 
first two versions of zts 312 to 
400-seat 777s. 

But the engine makers are 


Cold comfort 


Continued from page 2 

predominantly non-defence 
companies who decided to 
leave the field to professional 
soldiers. So IBM, Ford and 
General Electric have sold 
their defence interests to the 
likes of Loral and Martin 
Marietta. The other big seller 
has been Bill Anders, the astro- 
naut who was chairman of 
General Dynamics between 
1991 and 1993. He sold his F-16 
fighter plant to aerospace com- 
pany Lockheed, his missile 
business to missile specialists 
Hughes Aircraft, his space 
launch business to Martin 
Marietta, and his nan-military 
aircraft business to Textron. 

Other deals will follow and 
Dan Tellup. chairman of Lock- 
heed, thinks that the US may 
end up with two combat air- 
craft manufacturers, two elec- 
tronics giants and two missile 
companies. It is already down 
to one tank manufacturer, one 
submarine yard and one sur- 
face warship maker. Some 
systems are too expensive for 

even the US to 

afford. Strate- . 

gic bombers ” ,e ^ 

may have come total defei 

to the end or thani 

the line with 
the $850m-a- 

time B2, unless cheaper pro- 
duction methods are found. 

Yet the larger companies, 
such as Lockheed, Martin 
Marietta, Raytheon and 
McDonnell Douglas, have suffi- 
cient backlogs of orders to be 
relaxed ta the short term. “We 
lave to be opportunistic” says 
Dan Tellup, “because it is 
never completely clear where 
the opportunities win arise." 
These companies have also 
become strongly cash genera- 
tive as a result of the job cuts, 
and perhaps their biggest 
immediate fear Is that their ris- 
ing stock market values may 
attract cash-hungry predators. 

Smaller firms with weaker 
finances cannot be so relaxed, 
however. Those whose pro- 
grammes are drawing to a 
close, such as Northrop and 
Grumman, may be forced into 
merger to spread the pain of 
re main ing in the game. Others 
will be forced out altogether. 

Many US chief executives see 
the consolidation as a much- 
overdue rationalisation which 
only mimics the cuts in Europe 
over the past 25 years. This is a 
little ironic, since although 
many of the cottage industry 
manufacturers within Europe 
have been pushed together into 
larger national groups, they all 
have national markets which 
arc in order of magnitude 
smaller than the US home 
base. When looked at from a 
European perspective, the 
European Union still has a 
smaller total defence market 

than the US and It is mu “ 

more fragmented. Europe Is 
nowhere near achieving the 
economies of scale which the 
US takes for granted. 

What is perhaps worse from 
the European point of view, is 
that the situation Is unlikely to 
change rapidly. Some cross- 


The El) has a smaller 
total defence market 
than the US 


border deals in less sensitive 
technologies are being done; 
for example, a merger between 
Giat of France and Royal Ord- 
nance of the UK is being nego- 
tiated. Yet even here national 
sensitivities are such that the 
UK is only prepared to be 
dependent on French muni- 
tions to the extent that France 
is equally dependent on the 
UK Such cross-border rational- 
isation of the missiles busi- 
ness, with Matra and BAe 
teaming up and Aerospatiale 
and DASA getting together, 
are also under discussion, still, 
progress is painfully slow. 

The other great European I 
experiment is in collaborative 
ventures, such as the Eurofigh- 
ter. These seek to spread the 
cost of developing the most 
sophisticated systems across 
several countries with a suffi- 
ciently long production run to 
make them viable. Even here, 
the difficulty of co-ordinating 
several partners, the delays 
which politics can cause, the 
compromises and disagree- 
ments about specification and 
the spreading 

of work among 
a smaller the partners 

* market can mean that 

e ug no-one gets the 

weapon they 
want and no- 
one saves any money. One 
national auditor of such pro- 
jects doubted that any previ- 
ous collaboration had actually 
proved cost-effective. 

European governments may 
be prepared to tolerate the 
problem, since from national 
perspectives, the alternative of 
common European defence pol- 
icy and procurement may be 
worse. Yet such Inefficiency 
means either Europe pays 
more for the same level of 
defence than the US would, or 
it settles for less sophisticated 
equipment, or possibly both. 

With the crunch to get value 
for money in defence spending 
growing, however, there will 
be increasing pressure to buy 
off-the-shelf US products rather 
than a tailor-made European 
solution. That problem is seen 
graphically in the present UK 
debate over the rep l acement of 
the RAF Hercules fleet, where 
a new European design is tip 
against a proven US product 
Even If the Future Large Air- 
craft were shown to have lower 
life-cycle costs than Lockheed's 
new C130J Hercules, the FLA 
group would have an uphill 
task persuading the UK to ftmd 
its store of development costs. 

There is also a crunch in 
export markets. Cost is only 
one of the issues for purchas- 
ing governments. Tradition- 
ally, the effectiveness of weap- 
ons systems and political ties 
between governments have 
been more important But the 
culture of value for money is. 
spreading to hard-pressed gov- 
ernments. Unless the European 
arms industry starts cross-bor- 
der consolidation, it may face a 
choice between subsidising its 
arms exports and leaving the 

field to the US. 


Bernard Gray 




Boeing 777 engine dwarfs Jay Pardee, of the US Federal Aviation /WfenMstraUan, at a Pratt & Whitney meeting 


RoOs-ftayca Trent SOCk run aft lOBJXXXb of ttaust 


already anticipating demand 
for heavier versions of the air- 
craft as well as development of 
other new large airliners. All 
big three manufacturers are 
thus anxious to show airWna 
customers that their new large 
commercial engine pro- 
grammes can meet potential 


demand for bigger and heavier 
derivatives of the 777 as well as 
super jumbo 600 to 800-seat air- 
liners under study. 

However, the timing of these 
ambitions and costly pro- 
grammes could not have came 
at a more difficult moment 
The battle to power the “big 


twins", as It has became popu- 
larly known, has coincided 
with the worst recession in the 
highly cyclical commercial 
aerospace industry coupled 
with the decline in military 
business following the reduc- 
tion of government defence 
budgets in the wake of the and 
of the cold war. 

The industry has been 
caught In the classic pincers 
with research and development 
costs running very high at a 
time when cash flow has been 
inhibited by poor trading con- 
ditions, which have hit not 
only new engine sales but 
activity in spares, a traditional 
large source of profit for 
engine makers. Moreover, the 


decline in defence spending, 
which for the first time has 
come simultaneously with the 
downturn in the civil tide, has 
had severe Implications on the 
government funded part of 
company research and develop- 
ment budgets. 

This has forced aero-engine 
companies to pursue sweeping 
restructures including heavy 
job cuts and plant closures. 
Rolls-Royce, for example, 
closed three plants last year 
and is ringing three more this 
year to match the cost-cutting 
of its US rivals. The UK com- 
pany has also sought to expand 
its activities in the industrial 
power business to reduce its 
reliance an aeroengines. How- 


ever, unlike its US competitors, 
which are part of big diversi- 
fied industrial groups, the UK 
company still remains heavily 
dependent on aerospace. 

The competitive pressures 
and heavy costs of developing 
new engines have also stepped 
up the pace of consolidation 
and collaboration in the indus- 
try. All the three big aeroen- 
gine makers have forged part- 
nerships with other 
international companies in the 
heavy thrust engine market 

Risk and revenue sharing 
partners from Japan, Germany, 
France, Spain, South Africa as 
well as the UK have taken 
almost 20 per cent of Rolls- 
Royce’s Trent programme. The 


GE90 has reinforced the collab- 
oration between the US manu- 
facturer and Snecma, the 
French state-controlled 
aero-engine group. Through 
their CFM International part- 
nership, GE and Snecma have 
formed what many regard as a 
model of international collabo- 
ration which has enabled them 
to take a leading position in 
supplying engines for narrow- 
body airliners such as the Air- 
bus A320 as well as for the new 
long-range four-engine A34Q. 

Pratt & Whitney for its part 
has entered into a strategic 
partnership with MTU, the 
aeroengine subsidiary of Deut- 
sche Aerospace, and is the 
principal partner with 
Rolls-Royce in the Interna- 
tional Aero Engine consortium 
which develops the V2500 
engines in competition against 
the GE-Snecma CFM Interna- 
tional partnership. 

Collaboration is intensifying 
at every level of the market 
and not just at the top end. 
This has seen the successful 
launch of the joint aeroengine 
venture between Rolls-Royce 
and BMW, the German car 
group, which is developing the 
BR700 series of engines to 
power new long-range business 
jets as well as future regional 
jet aircraft. Deutsche Aero- 
space has now also renewed 
approaches to its German rival 
to suggest cooperation. 

The industry now believes it 
has probably seen the worst of 
tto current prolonged recess- 
ionary cycle with a recovery in 
orders starting to pick up 
around 1996. 


With the world's longest range airliner, Airbus Industrie has a long-range 
view of the future. 

The A 340 flies further than any other jetliner in aviation history. It can fly a full complement of passengers for over 16 hours non-stop. This easily covers routes such as 
New York to Cape Town or Frankfort to Santiago. The A340 further enhances the Airbus family's ability to match ail market needs. 



AIRBUS INDUSTRIE 

TAKING THE WORLD VIEW 





The world airline Industry 
expects to fly back into profit 
this year after suffering fear 
years of record losses totalling 
$15,6bn on international sched- 
uled services alone. 

But the pain is by no means 
over as the industry wwitiwima 
to adapt itself to profound 
structural changes caused by 
increasing liberalisation and 
deregulation and the after 
shocks of the worst slump in 
the post-war history of civil 
aviation. 

The International Air Trans- 
port Association (LATA) is now 
forecasting an industry profit 
of around Jibn this year. “We 
are hopeful we have turned the 
comer," says Tom Murphy, 
senior director of the tirade 
organisation grouping 224 air- 
lines. 

Even if Slbn is better than 
nothing; it is still only a tiny 
fraction of the industry's total 
annual revenues of around 
$110bn. What is more, the 
firm n <riai performance of air- 
lines continues to show dra- 
matic variations. A few, Hke 
British Airways and Singapore 
Airlines, are doing well; the 
majority are hovering around 
break-even point; and about a 
quarter are losing a spectacu- 
lar amount of money. 

Pierre Jeanniot, IATA's 
director-general, blames three 
factors for the continuing 
financial problems of the air- 
line business.* 

■ The world economies were 
denied a "soft landing” from 
the boom of the 1980s and air- 
lines, which had continued to 
order aircraft in large numbers 
right up to 1990, were caught 
with too much capacity when 
the recession hit and was fur- 
ther exacerbated by the impact 
of the Gulf war on air travel. 

■ The huge level of aircraft 
orders was financed essentially 
by borrowing with the result 
that airlines now have to make 
an operating profit of at least 
3.7 per cent of revenues just to 
service their debt 

■ The Increase in competition 
In the 1980s combined with 
increased liberalisation in air 


The pain for airlines is by no means, over, writes Paul Betts 

A slow flight back into profit 






Air Franca is getting $ 3 . 7 bn In government backing to ha(p ft recover 


HcancGtoGMi 


transport policy and continu- 
ing over-capacity have had a 
devast a ting impact on real pas- 
senger yields. 

LATA calculates that air 
feres have dropped by 68 per 
cent in nf m st wnt money in thn 
past 20 years «tiH this trend 
has been accelerating. 
Although passenger traffic is 
expected to grow by an aver- 
age annual rate of between 5-6 
per cent during the next four 
years - with much higher 
growth in the Asia-Pacific 
region of around 8 per cent a 
year - this is unlikely to lead 
to any significant Improvement 
in airline yields as has been 
the case in past cycles. 

“In many markets, air travel- 
lers have now become accus- 
tomed to paying a particular 
fere level; and if feres are 
increased, they simply don't 
fly. So the airlines now have 
no choice but to find a way to 
provide a service at this fere 
level, rather than as in the past 


seeking to maximise the fere 
charged for providing the ser- 
vice,” explains Adam Brown, 
head of strategic planning at 
the European Airbus aircraft 

TnawTfjanfiiring mn m rti m n 

Airlines ape also facing 
tougher competition in many 
markets not only because of 
the impact of increasing liber- 
alisation, but also from new 


Top 10 airlines 

(scheduled passenger-kilometres 
performed - 1993 ) 

AHne 

MUona 

United AWnes ( 2 ] 

162,527 

American AMnes ( 1 ) 

156,302 

Delta Air Lines ( 3 ) 

133/146 

Northwest AHnes ( 5 ) 

93,549 

British Airways ( 6 ) 

8 Q .086 

Continental Akfrras ( 7 ) 

68,114 

USAir ( 9 ) 

56,681 

Japan Airlines ( 9 ) 

54,615 

Lufthansa (IQ) 

52,658 

Qantas HQ 

44,510 

Lnttyaar's rankings In p— rnhanln 

Soubk MIX 


rival forms of transport In 
Europe, the development of a 
high-speed rail network and 
the opening of the Channel 
T unnel will inevitably inten- 
sify competition on shorter 
routes where rail can provide a 
fast and mor e dir ect service 
between city centres. 

Low fares and new competi- 
tive forces will force airlines to 
continue pursuing cost-cutting 
and other productivity efforts 
to restore their profit margins. 
Considerable progress has been. 
achie ved by a number of air- 
lines but many still have a 
long way to go to adapt their 
structures and operations to 
the new competitive, liberal- 
ised industry environment 

This is particularly the case 
for state-owned European car- 
riers which are now facing far 
tougher rules from the Euro- 
pean Commission on govern- 
ment financial support The 
Commission wants to see the 
phasing out of all state aid to 


airlines over the next three 
years. It has also warned air- 
lines they will be allowed one 
last package of substantial aid 
as long as it is linked with a 
large-scale restructuring and 
cost reduction programme to 
restore their comp eti tive posi- 
tion. 

While financially troubled 
European state carriers like 
Air France, Olympic of Greece 
or Alitalia, are wrestling to 
restructure themselves (Air 
France alone is getting 
FFr20bn [$3.7bn] in govern- 
ment backing to help It 
recover), large US airlines have 
also been forced to adapt to 
new competition from low-cost 
carriers in their domestic mar- 
ket The response of the lead- 
ing US airlines has been to 
seek labour concessions and 
launch separate new low-cost 
subsidiaries to compete against 
the new breed of domestic US 
carriers of which Southwest is 
undoubtedly the most remark- 




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able phetHtmenan. 

The move towards more 
"open skies” has also intensi- 
fied the trend towards greater 
collaboration In an increas- 
ingly global industry. British 
Airways Is one of the airlines 
to have taken the lead in devel- 
oping a global network 
through alliances and equity 
partnerships including taring 
stakes in USAir, Qantas, the 
French regional carrier TAT 
and its new Deutsche BA air- 
line subsidiary in Germany. 

After the failed attempt last 
year by four medium-sized 
European airlines Including 
Swissair, ELM Royal Dutch 
Airlines, Austrian Airlines and 
Scandinavian Airlines System 
(SAS), these European, carriers 
have continued to seek com- 
mercial partnerships to 
strengthen their competitive 
position against the big carri- 
ers. 

Many airlines have stm betel 
reluctant to take the BA route 
of investing in equity stakes in 
other camera. Instead, they 
have sought to expand their 
international reach through 
marketing and commercial 
partnerships. This has increas- 
ingly involved the use of ticket 
code sharing which enables 
two carriers to use their 
re spective ticketing codes to 
simplify computer reservations 
and cut costs. 

With the industry's centre of 
gravity moving east, interna- 
tional Mtrtiwwg have been 
TnulfipTy rn g effort s to form aTH- 
ances with carriers in fast 
growing markets such as 
China or India arnrinua to 
secure western expertise to 

develop inftwnaHnnflny Shi ga- 




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■■ YleWrevonua tonne-tdlofTwiras 
'ik ill ' .s- □ Unft coat/avaflabte toone-kSometres 




pore Airlines, for example, is 

planning to farm g new joint 

airHua venture in India with 
the country’s biggest industrial 
group, TATA industries. In 
fihfaa, Singapore Airtimes and 
BA are actively discussing pos- 
sible Hnfcs with Chinese carri- 
ers in a civil aviation market 
developing at break-neck speed 
with annual growth averaging 
2030 per cent in the past fie w 
years. 

But the industry’s problems 
are not only financing 
although as Mr . Jeanniot of 
IATA emphasises, "the over- 
whelmingly urgent issue” 
remains airline profitability. 

Some progress has been made 


Michael Donne examines the regional industry 



Better times ahead 


Over the past few years, the 
European regional aircraft 
mannfart n ring industry . has 
been suffering from a severe 
ahnrtfan tn orders as a result 
of the recession which has bit- 
ten. deeply into airline balance 
sheets. 

That, in turn, has fed to cur- 
tailed aircraft re-equipment 
programmes, resulting in 
reduced aircraft production 
rates and labour layoffs as a 
means of survival. 

But while the market 
remains difficult, and highly 
competitive, there are mgn« of 
better times ahead. Airlines 
this year are expected to 
return to a collective profit, 
albeit a slim one of about glhn 
world-wide, which by no 
means compensates for the 
$15.6bn losses an i n fa tmaHtmal 
scheduled services alone over 
the past four years. 

Moreover, the longterm fore- 
casts indicate that as the reces- 
sion fades,, traffic growth is 
likely to be resumed at an 
average of around 5 per cent a 
year through the next 10 to 20 
years. 

This, in turn, is likely to 
result in a renewed demand for 
regional aircraft Of all types - 
jets ranging between aberat 50 
and 120 seats, and turbo-propel- 
fer afrimera up to about 70-80 


attng from the main huh -air- 
ports will require increasingly 
frequent regional services to 
feed them. 

In turn, short-haul regional 
routes are increasingly being 
seen as a specialist operation. 
Says Avro: “There is already a 
significant move towards large 
airlines divesting the re gional 
networks to affiliated cantos 
operating small regional. jets, 
such as the RJ, AvroUner fam- 
ily, which can provide more 
efficient and profitable services 
an tiie shorter, tinhner routes. 

"At the same time, conges- 
tion at the major hubs will 
st imulate traffic growth at the 
smaller airports. Hub by-pass- 
ing services will increase, and 
this again will lead to greater 
demands for regional jet air- 
craft. 

“Older aircraft types with 
significantly hi gher mainte- 
nance costs, lower productiv- 
ity, and inability to meet 
Increasingly stringent noise 
regulations wifi be phased out 
of the regional routes, even 
allowing for some re-engining 
and 'hush-kitting 1 . This wifi 
lead to an increasing demand 
for new and more efficient 
types." 


Avro International, the 
regional jet afrfiner manufac- 
turing subsidiary of British 
Aerospace, is forecasting a 
demand world-wide for 3,000 
jets in the 65-120 seat range 
over the next twenty years, to 
2013. SirmUpr jets, such as th<» 
Canada Ir HJ of around SOplns 
seats, will also hare a share of 
the mwrtert: 

Such a market could be 
worth in excess of fGOhn. 

This forecast is generally 
agreed by Boeing of the US, 
which buDds the 737 series erf 
short-range twin-engined jets 
(with more than 3,000 sold to 
date in nearly 30 years of ser- 
vice) and is now planning not 
only a new series of 737s but 
also a "new small airplane”, 
now being defined in detail. 


A vro says that the largest 
market for regional jets 
will continue to be 
North America (42 per cent), 
followed by Europe (21 per 
cent), and Asia/Padflc (15 per 
cent). 

However, the big problem 
confronting all the regional jet 
and turbo-propeller aircraft 
manufa c turers is that the sup- 
ply of available types is 
already vast, and far more 
than the market can really 
absorb. 

This means that the already 
intense competition among 
manufacturers will become 
fiercer, with some bufiders per- 
haps being farced to quit the 
market, which no-one really 
wants to see - the airlines like 
to have a wide range of choice 
in their equipment pur chases. 
The alternative Is for a 
rationalisation of Hw mannfao- 


the fact that many current 
trends In the air transport 
industry provide opportunities 
for the growth of. the regional 
aircraft market. * 

Underneath the main m«H. 
um-to-long- range trunk-line 
routes there is a vast network 
of complementary “commuter 
and feeder” operations Uniting 
hundreds Of JpuaTlar towns and 
cities with each other as well 
as with the major “"hub”" air- 
ports in capital cities. These 
are mostly short-haul flights, 
ranging from about 250-300 
miles. 

The European Union's 
“Third Package” of aviation 
liberalisation, measures, Intro- 
duced on January 1, 1993, 
including freedom of. market 
entry and access to new routes, 
is' stifi in its comparative 
infancy (unlimited “cabotage" 
- the right to. operate unfet- 
tered services in . other coun- 
tries one’s own - wfiT not 
become effective until April 1, 
1997), but it Is clear that as the 
recession fades and traffic 
grows, (he larger airlines oper- 


ventures supported by mergers 
or other forms of strategic alli- 
ances in the industry. 

Some hare already occurred 
- for example, the 51 per cent 
stake in Pokier of Holland 
acquired by Deutsche Aero- 
space (DASA) of Germany - 
and over the immediate fu t ure 
there may wall be fOrther sig- 
nificant realignments in the 
industry's overall glohal struc- 
ture. 

This past summer, Deutsche 
Aerospace suggested that Brit- 
ish Aerospace, together with 
Aerospatiale of France and 
Alenia of Italy, could be offered 
stakes in Fokker, as a step 
towards forming a European 
regional jet manufacturing 
consortium, particularly tar- 
geting new projects for the 
future. 

Such a move would safe- 
guard the continued develop- 
menl of those existing compa- 
nies' product lines - the Avro 
RJ series and. the Fokker loo 
and smaller Fokker 70, and the 
turbo-propeller ventures of 
BAe (through Jetstream) and 


every regional airline need 
from small 10-seat twin turbo- 
prop airliners up to lOOphts- 
seal twin-jet aircraft. - 
_ There is no lack of innova- 
tion, and many of the compa- 
nies involved are looking 
ahead with new ideas for 
either product improvements 
or entirely new aircraft mod- 
els. 

The problem in setting up 
any new consortium would be 
determining not just the finan- 
cial contributions, but also to 
what extent each partner 
would be prepared to sacrifice 
cherished individual concepts 
in favour of united ventures. 

Many In the European aero- 
space industry believe that 
putting togethersuch a consor- 
tium is the only way., ahead, 
and the ahandAnnwtt of some 
concepts, however painful, is 
to be preferred to a continua- 
tion into the next century of 
the fragmented activities 
which could lead to negligible 
individual mark et shares gr) d 
the likelihood of profits for no- 
one. 



- i'.-vvj 


during the past two years an 
im pn mHn p j*jr traffic and 
port congestion, and increasing 
political awareness on the 
longterm risks of inadequate 

infrastructure to support the 
continued growth of interna- 
tional air traveL 
Without a stepped. up com- 
mitment from governments to 
Invest in new ground and air 
traffic control facilities and 
technologies, the danger is that 
not only will futu re air travel 
growth be clipped bat competi- 
tion wifi continue to' be dis-'- 
torted by preventing new 
industry entrants from gaming 
the necessary access to busy 
airports and airplanes. • 




t * 

r* 


at Aerospatiale and Alenia 
through Avions de Transport 
Rg girmal (ATR). It would also 
seek to avoid conflict with Afrv 
bus fin which DASA, Aerospa- 
tiale and BAe are all partners), 
which is itself marketing vigor- 
ously its own 130-seat A-319. 
due to enter service in the 
spring of 1996. 

The prime objective of such 
a new European consortium, 
were it ever to materialise, 
wouldprobably be a new small 
110-seat aircraft, called the 
Future Advanced Small Air- 
liner (FASA), which would be 
designed to compete directly . 
with Boring’s own New Small 
Airplane (NSA) project. 

Boeing has begun detailed 
studies on the NSA, in 
co-operation with Japan Aero 
Industry (JAI) and China 
National Aero-Technology 
Import and Export Corporation 
(CATTC), with, a view to an 
eventual joint venture that 
could seize especially a signifi- 
cant slice of the rapidly 
expanding Asia/Pacific 
regional jet aircraft market 

Also on the International 
front, Aerospatiale has offered 
to join Chinese and South Kor- 
ean companies in developing a 
100-seat regional jet for the 
Asia/Pacific market At the 
same time, although earlier 
talks between Avto and 
Taiwan Aerospace on collabo- 
ration felled to get off the 
ground, both companies 
remain i n tere st ed In the rap- 
idly grow i ng Aria Pacific mar- 
ket 

But because of their, already 
strong background in the 
regional aircraft markets, the 
possibility of a si gnificant con- 
sortium of European compa- 
nies emerg in g with global com- 
petitive capability should be 
take n seriously, especially if 
widened to Include other Euro- 
pean aircraft manufacturers, 
such as CASA of Spain and 
SAAB of Sweden. 

Linked in such a way, the 
European Industry could prove 
a powerful competitor for Boe- 
ing. The Europeans already 
have immense experience - 


m 



YjlEJCt Kfc. •» xi a-' 


Bernard Gray 


here’s a 

of a cott 


& 


&SE 
& * « 

II 

as 



V 


FINANCIAL TIMES 


FRIDAY SEPTEMBER 2 1994 


s 

' i, 


ahead 


T imes have rarely been 
for fcTLS 
of military aircraft, in 
western domestic market? 
manufacturers are beS 

lSfS!i esS -u squeezed by 
reduced mihtary spending o l 

f 8 f® 6 tlanri and escalating 
development costs for the next 
^erafaon of equipment onthe 
(toer. Export markets are also 

tn,diK °<wi 
Guff states buyers are also 
short of cash. 

What is worse, now the cold 

HSLmL v nded ' f ^ w we siern 
countries have a dear idea of 

the t&reat which the nextgen. 
eration of advanced aircraft 
will have to meet As a result 
many aircraft development 
progr ammes are being 
stretched and there is increas- 
ing doubt about whether some 
aircraft under development 
wiH ever enter service. 

Perhaps the safest of all pro- 
grammes in this shaky situa- 
tion Is the F-22 US air superior- 
ity fighter. The aircraft has 
been under development for 
the past five years by Lock- 
heed and Boeing and is 
designed to be a Mach-2 radar- 
evading “stealth” aircraft 
which will guarantee the US 
command of the air up to 2020. 
Since air superiority is seen as 
vital by the DS - a view con- 
finned by the Gulf War - the 
F-22 has strong backing from 
the air force, the Pentagon, 
and, crucially, from Congress. 

Because dominance of the air 
is seen by the US as an end in 
itself, few question the threat 
the F-22 will have to counter or 
the vast $71bn cost of produc- 
ing the 442 air interceptors. 



&MM 


Jf. \ : & 


Euronglrfer continues to be dogged by worries about German eommament to the project 


The British Aerospace Hawk 200 is equipped with wingtip Sidewinder air-to-air nussBes 


Bernard Gray discusses the dilemma faced by defence departments and manufacturers of military aircraft 

Battle is on to design fighter of the future 


Indeed, with plans for a new 
naval fighter to replace the FI 
A-18 scrapped, the department 
of defence is considerin g a car- 
rier-based variant of the F-22 
instead. And as the F-lll 
long-range strike aircraft is 
being retired early in 1996, the 
F-22 is one possibility to under- 
take that kind of air-to-ground 
strike missio n. 

Despite the crash of (me of 


the YF-22 prototypes, develop- 
ment is proceeding well. Work 
remains to be done in reducing 
the aircraft’s weight and 
improve its stealth, but the 
programme is progressing 
smoothly. 

Lockheed, which has two- 
thirds of the project now that 
it has bought General Dynam- 
ics’ tactical aircraft business, 
has yet to decide whether to 





arwoiTEfc " c 



The Tiger attack haMcop te r feces strong co m p e t it ion from the Apache 


Bernard Gray looks at the market for helicopters 

There’s a lull in the life 
of a cottage industry 


The cottage industry of 
helicopter manufacture has 
had as much trouble as the 
rest of the aerospace industry 
to recent years. With three- 
quarters of all production des- 
tined for the military market 
toe Tall In weapons procure- 
ment has taken its toll. Partic- 
ularly so since the US mili- 
tary, long the most 
enthusiastic devotees of the 
helicopter as transport and 
weapon, had filled the bulk of 
their Apache attack pro- 
gramme and were in any case 
headed for a lull. 

In the civil market, the 
recession in Europe and the 
US has taken its toll on orders, 
too. Corporate executives cat- 
ting staff can hardly be seen 
ordering the new executive 
aerial runabout. 

As a result, tbe helicopter 
business, which has persisted 
as a slightly quirky specialism 
running at steady if unspecta- 
cular volumes from traditional 
sites, has experienced the kind 
of lull, and inevitable 
retrenchment, which it had 
avoided for many years. 

But because almost all man- 
ufacturers are owned by large 
conglomerates, there has not 
yet been the rationalisation 
seen in many other aerospace 
sectors. There are still seven 
principal helicopter makers - 
Eurocopter, Westland and 
Agusta in Europe and Bell 
Textron, Sikorsky, Boeing and 
McDonnell Douglas in the US. 
Even tbe one which was put 
up for sale, McDonnell Doug- 
las’s helicopter operation 
which produces the very suc- 
cessful AH-64 Apache, was 
eventually withdrawn from 
the market due to lack of 
Interest. , 

Nor is it at all clear that 
farther consolidation is close. 
One industry executive points 
out that while the businesses 
are individually small they 
mostly occupy separate toches. 
Hie only company to change 
hands, Westland, lost its inde- 
pendence to GKN, the automo- 
tive engineering company , 
rather than another helicopter 
maker. If there Is to be consol- 
idation of the number of man- 
ufacturers, that may well he as 
a result of changes to corpo- 
rate strategy by thc pare ?, 
companies, rather than condi- 
tions in the helicopter market. 

Nonetheless, conditions in 
tbe market mean that parent 
companies and governments 
sponsoring helicopter develop- 
ment face some difficult 


choices. In Europe, toe devel- 
opment of three helicopters is 
placing great strain on govern- 
ment budgets. 

The Westland-Agusta EH-101 
large helicopter has perhaps 
the safest ftture. It has a pro- 
duction contract for 44 anti- 
submarine warfare naval vari- 
ants from the Royal Navy, and 
looks certain to get a farther 
order for 25 utility transport 
versions from the Royal Air 
Force later this year. The Kal- 
ian government is also due to 
order some, and interest has 
come from potential export 
markets, notably from Saadi 
Arabia, which is interested in 
the ASW variant. 

The other two helicopters 
being designed by European 

Parent companies and 

governments sponsoring 

helicopter development 
face some difficult choices 

toa me face a more uncertain 
fate. The NH-90, being 
designed by the Franco-Ger- 
man Eurocopter group in col- 
laboration with Italy and the 
Netherlands, is a smaller util- 
ity helicopter which wonld 
transport about 20 troops. 
There I s a market in replacing 
ageing Puma and Sea King 
transporters, but tbe develop- 
ment costs are high, and there 
are several competitors. 

The Tiger attack helicopter 
wiisn addresses a strong market 
as more armies move towards 
the US doctrine of integrated 
air land battle, with helicop- 
ters a|U> tonfai working in tan- 
dem. However, it too faces 
strong competition from the 
Apache and, for armed forces 
looking for something a little 
cheaper, the revamped Bell 
Cobra Venom with a new glass 
cockpit made by GEC-Marconi. 
With defence budgets 
stretched both the NB-90 and 
the Tiger may not make it into 
production. 

In the US, Boeing win con- 
tinue to hold the niche for 
very large helicopters with toe 
Chinook, not least because the 
cost of developing an alterna- 
tive would be prohibitive. Ben 
Textron also look likely to 
keep their strong position to 
light helicopters. 

Bnt McDonnell Douglas will 
have to continue to evolve 
away from its dependence on 
the Apache, and Sikorsky can- 
not be entirely sure of the 
fatnre of the next-generation 


Co m anche reconnaissance and 
attack helicopter. At present 
toe Comanche has firm politi- 
cal backing, hot if the budget 
squeeze gets much worse, the 
Comanche may come under 
pressure from the Apache. 

The V-22 Osprey helkwpter- 
c uin-prop-aircraft also has 
strong backing, bnt the futur e 
of several of toe helicopters, 
and the fate of their manufac- 
turers, will rest on procure- 
ment decisions in tbe next few 
years. In particular, toe race 
to replace ageing US marine 
fleets willhe important 

In Europe, too, there are sev- 
eral important procurement 
decisions pending. Most promi- 
nent, and immediate, is the 
UK’s requirement for a £2bn 
programme of 91 attack heM- 
copters. Here the co m pet i tion 
is between the Apache, which 
would be manufactured under 
licence by Westland, the 
AH-1W Cobra Venom with the 
GEC-Marconi glass cockpit, 
tbe Tiger with British Aero- 
space participation, and toe 
South African Rooivalk. 

The Apache has long been 
the front-running favourite 
with the British Army, bnt it ; 
Is probably also the most 
expensive helicopter, both in 
purchase price and through- 
life costs. Hie Cobra Venom Is 
cheaper and the new cockpit is 
a groat imjirovement on toe 
old Vietnam veteran version, 
but it is rally a twin-bladed 
machine, and its weapons load 
is thus limited 

The Tiger is also smaller 
than toe Apache, and while it 
is tbe newest technology, It Is 
also relatively expensive a«d 
will struggle to carry the fall 
weapons compliment specified 
by the ministry of defence. The 
Rooivalk is almost certainly 
the cheapest option to buy, 
though its avionics may need 
such radical updating that it is 
not really a viable option. 

Because the order is one of 
the largest to be placed far 
attack helicopters in tbe next 
few years, it will have a signif- 
icant impact on the market, if 
the Apache wins, McDonnell 
Douglas will have longer to 
develop fatnre alternatives. If 
the Tiger wins, Enrocopter 
will have made the break- 
through it has been looking 
for. The Bell Cobra would give 
GEC-Marconi an excellent 
opportunity to extend its 
range of glass cockpit avion- 
ics, and tin Rooivalk would 
give Sooth Africa a huge boost 
in international arms markets. 


consolidate its operations on 
one site, or continue develop- 
ment at Fort Worth in Texas 
and at Marietta in Georgia. 
While working on one site 
might be more economical, 
Texas is an important state 
politically and Georgia is the 
home of the leader of the Sen- 
ate armed services committee. 
The company will thus have to 
balance politics against eco- 
nomics in deciding the future 
of tbe programme. 

In Europe, there is less cer- 
tainty about the future of next 
generation fighters. Eurofigh- 
ter continues to be dogged by 
wearies about German commit- 
ment to the project - worries 
which are unlikely to be 
resolved until after the federal 
elections this autumn. 

If Germany does reduce its 
order for Euroflghters, there 
will be some difficult negotia- 


tions about bow work in the 
production phase should be 
split between the British. Ger- 
man, Italian and Spanish part- 
ners. Germany would not be 
entitled to the third of con- 
struction work it was origi- 
nally allocated if it orders 
fewer than the 250 Eurofigh- 
ters it indicated it might buy 
or even the 140 recently 
mooted. 

The UK may even strengthen 
its hand by ordering more than 
the 250 it originally signed on 
for and buy another 100 fight- 
ers to replace its Tornado 
interceptor fleet. However, 
transferring the tooling from 
German factories to other part- 
ners might be uneconomic and 
an alternative solution may 
have to be found. 

Potentially more damag in g fa 
the worry that uncertainty 


over the German position 
could delay the programme 
farther, increasing costs and. if 
the in-service date slips, reduc- 
ing the Eurofi ghter’s technical 
edge over potential rivals. As 
one US industrialist said. 
“Eurofighter fa a good aircraft. 

Raw countries have a 
dear idea of the threat 
facing the next 
generation of aircraft 

but they really must get on 
and build it before it dates.” 

Cost concerns on such col- 
laborative programmes are 
also worrying governments. 
While the partners want to 
spread the development costs 
by working together, duplica- 
tion of effort and progress at 


the pace of the slowest dulls 
the benefits. A British govern- 
ment official said that he 
would be surprised if any of 
these collaborative pro- 
grammes had saved money 
over a solo development proj- 
ect in the end. 

France and Sweden have 
avoided the pitfalls of collabo- 
ration by going it alone with 
their Rafale and Grippen fight- 
ers. but they have their own 
problems. Exports will be diffi- 
cult for either aircraft since it 
will be in service with fewer 
air forces than the Eurofighter. 

If times are tough in fighter 
aircraft, they are scarcely easy 
elsewhere. The US has stopped 
production of its B-2 stealth 
bomber at 20, thou gh Congress 
has voted $100m to keep the 
production line open for 
another year. 


Northrop-Cruinman. the air- 
craft’s manufacturer, has 
offered to make a further 20 
aircraft for a bargain S5?5m 
each. While this is less than 
the 5850m which the first 20 
cost, it may not be cheap 
enough to make a cash- 
strapped department of defence 
open its wallet 
Another over-budget Califor- 
nian aircraft is also in trouble. 
The C-17 strategic jet transport 
aircraft has already cost its 
maker McDonnell Douglas 
about SI bn in cost overruns. 
The department of defence has 
suggested building 40 aircraft 
and then evaluating its perfor- 
mance with a view to building 
tbe 120 originally planned. But 
at almost S3Q0m each, the air- 
craft is hideously expensive. 
The 017 must pass a month- 
long examination next year - 
Including simulated operations 
under war conditions - if it fa 
to secure further funding. 
However, as California will tie 
a key state in the i»96 presi- 
dential election. President Clin- 
ton will have to think long and 
hard before scrapping the pro- 
gramme. 

In Europe, the debate is over 
tactical military transport with 
a consortium that fa liketv to 
come under Lhe Airbus aegis 
keen to develop a replacement 
for the Hercules. The Future 
Large Aircraft would be able to 
carrj’ larger loads than the 
Hercules and would fly faster, 
but would also cost more. Esti- 
mates of its development costs 
run from £2bn to £5bn, and 
while continental countries are 
enthusiastically promoting toe 
idea, full funding is not yet in 
place. 

Perhaps unfortunately, the 
FLA’s first battle fa against the 
new C-130J Hercules to replace 
the RAF*s existing fleet. With 
Britain lukewarm about the 
project, it fa an uphill climb. 
But with military budgets 
likely to be under pressure 
everywhere for the foreseeable 
fature, it fa the kind of battle 
that aerospace manufacturers 
worldwide are going to have to 
get used to. 


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Bernard Gray looks at the way ahead for manufacturers of missiles 

Everyone is aiming to get smart 





i 


T he Gulf War has col- 
oured thinking in JUOSt 

areas of military doc- 
trine. So much so that the 
sales pitch now chanted by all 
arms dealers is that their prod- 
ucts were vindicated in Opera- 
tion Desert Storm. 

Of those systems which gen- 
uinely had their reputations 
enhanced, stealth technology, 
while expensive for most 
nations, was a worthy run- 
ner-up. The clear winners, 
however, were guided weap- 
ons. Pictures of precision- 
guided “smart” munitions not 
only impressed the watching 
taxpayer, they also made an 
impact on force commanders 
under pressure to keep casual- 
ties at a minimum. 

Some watchers are now so 
enthusiastic that they think 
guided weapons will take over 
from traditional ordnance. 
“The way ahead is definitely 
with smart weapons,” says 
Kent Kresa, chairman of 
Northrop Grumman. "Given 
the desire to protect troops, I 
can't see the OS ordering any 


dumb munitions at all as we 
develop new technologies.” 

Yet, while the idea of using 
guided missiles is popular, the 
overall pressure on all western 
defence budgets is still making 
life tough for missile manufac- 
turers. In the UK there is inter- 
est in developing a long-range 
conventionally armed air-to- 
ground missile, but it remains 
to be seen how much funding 
is available fin* the project 

The US is also keen on 
advanced technologies and is 
still pursuing scaled down 
“star wars” an ti -minsiiB mis- 
siles through its theatre ballis- 
tic missile defences. Projects 
such as Lockheed's Theatre 
High Altitude Area Defence 
(THAAD) missile have received 
backing and THAAD has a 
four-year $689m development 
contract Yet, even in the US 
missile manufacturers are hav- 
ing to adjust as procurement 
s pending fans 

As elsewhere In the defence 
industry, rationalisation and 
merger are seen to be the way 
to cope with the downturn. 


The consolidation seems to be the BAe-Aferospatlalc-Deutsche of developing the kind of ballis- 
proceetfing more smoothly in Aerospace Trigat anti-tank tic missile defence systems 
the US than Europe. In a typi- missile. But such collaborative some European countries are 
cal deal aimed at reaping the ventures tend to suffer tram starting to covet 
full benefits of rationalisation, many of the disadvantages of it is more difficult to see how 

Hughes acquired General high overheads and compro- the electronics manufacturers 
Dynamics' missile business, znise designs. Still, ah v* mis- for missile systems - cmnpa- 
and then consolidated all man- sites contain some of the high- nies such as GEC-Marconi in 
ufechmng on its own site in eat technology - under the UK and Thomson in France 
Tucson, Arizona, and dosed development, countries axe - fit In to such a grand 
General Dynamics factories in reluctant to release control fin: scheme. It may be that by pro- 
southem California. national security reasons as vidmg sophisticated specialised 

In the US, Raytheon and well as industrial concerns. equipment, such as sensors, to 

Hughes lead the pack while There are talks about whole- a range of missile makers 
Martin Marietta and Lockheed sate mergers, seme of which worldwide, they can gain suffi- 
are still involved as missile have been mooted few a long dent scale to remain viable in 
manufacturers, but beyond time. British Aerospace's nego- their current form. Equally, 
that it is by no means ctear tiations with Matra continue there may he a horizontal 
how many groupings will sur- unabated, while hints of a merger between electronics 
vive. Construction of some merger between Aerospatiale's companies to produce a large 
systems is still split between and Deutsche Aerospace's mis- sub-system supplier. But the 
several companies, increasing site businesses gather pace. In idea that GEC-Marconi might 
overheads. Whether the mar- part, these mergers would help take over BAe Dynamics, for 
ket can sustain more than two cut out duplication in research example, seems to have faded, 
or three mainstream missile and development, and would Other ways of cutting costs 

makers is questionable. cut down on the high level of in the hostile environment are 

In Europe, the outlines of cut-throat competition which also being tried. Efforts are 
possible mergers are beginning has hurt profit margins. It may being made in Europe and in 
to become clearer, but progress also be a prelude to a grand the US to cut costs by transfer- 
is still painfully slow. Much Tnissfle merger of both groups ring technologies between mis- 
collaboratian has been on spe- to form a European missile site systems. Unfortunately, 
dfic programmes, for example giant which could be capable adapting equipment from 



air-to-air missiles for use in vive in the wriaang business. In Unless individual countries 

ahip-to-ship combat Is wdthar the UK, there is a need for a are prepared to allow tr ansfer 
as easy nor as obvious as it long-range stand-off air- to- of missile manufacturing 
might appear. The c onditions ground missile based on the abroad, and It remains one of 
under which the missiles have Gulf War experience. A new the most sensitive cutting edge 
to operate vary so much a medium-range missile is technologies around, Europe 
weapon optimised for condi- needed tor the Eurofighter, and will continue to pay higher 
Hnrm on the wing of a Mach-2 a short-range anti-armour air- prices for fewer weapons than 
fighte r may suffer badly when to-ground missile for the Ear- the US. Rumour suggests that 
exposed to corrosive sea spray, rier Is under consideration. A the long-awaited BAe- Matra 
As with so many areas, ded- range of anti-armour and anti- merger may be announced at 
sions on procurement will ship weapons are being devel- Famborough, as a 5050 Joint 
determine which companies oped in continental Europe and venture and a Frenchman in 
gam the upper hand in merg- the US is considering a new the cbair. If tt happens, it wQl 
era, and indeed, which can sur- short-range air-to-air mimile. not be a moment too soon. 




T he twin forces of reces- 
sion and cuts in defence 
spending have forced 
consolidation and restructur- 
ing on the world’s avionics and 
component suppliers. 

The end of the cold war led 
western governments to reduce 
military spending. In civil avia- 
tion, the prolonged recession, 
and the Gulf War not only dec- 
imated the tourist industry 
sharply reducing passenger 
numbers, but coincided with a 
glut in airliners coming off the 
production lines. Although air- 
line traffic has started growing 
again, several hundred aircraft 
remain parked in the desert 
It was thus only a matter of 
time before manufacturers erf 
components and avionics, the 
next tier down in the supply 
chain, would be forced to share 
the burden. Customers have 
not only been p ushing for cost 
reductions among the suppliers 
but have been demanding 
more sophisticated products 
and reducing the number of 
suppliers with which they have 
to deal. 

The sector's response has 
been consolidation and 
restructuring which some say 
is similar to one seen in the 


automotive industry a decade 
ago. 

Much of it has taken the 
form of mergers and acquisi- 
tions though strategic alliances 
have not been ter behind, 
bringing together once bitter 
competitors, with cost and risk 
sharing being a prime mover 
In tiie drive for market leader- 
ship. 

Examples of companies mov- 
ing in that direction include 
Smiths Industries of the UK 
which Conned an alliance with 
its competitor Rockwell Inter- 
national Corporation of the US 
three years ago, to provide tell 
Right integration system. Some 
saw this as an attempt by the 
new group to compete with 
Honeywell, the US electronic 
control systems group winch is 
the market leader in that field. 
Honeywell has In turn formed 
an alliance with two UK com- 
panies; one with. Racal on sat- 
ellite communications systems 
and another with the GEC on 
the fly-by-wire systems. 

But not all proposed alli- 
ances have been carried 
through and this year the big- 
gest disappointment has been 
the failure of the proposed 
merger between France’s Sex- 


Avionics: Joel Kibazo on the move by companies to restructure operations -we toe* a look at what far deals woi be more difficult 

— *- was happ ening m the industry to achieve. They point to 

and at ourselves and decided nationalism - the wish to 
we had to do something if we retain a particular industry in 
were to remain in the game." a country - and sensitivity to 
Tim company has gone all national defence interests as 
out to transform itself from a two factors that may act as a 
component supplier to the brake on restructuring. Thus 
tant-Avionlque and Allied Sig- ersMp has usually been the ever increasing development liner to Honeywell. aerospace Industry Into a alliances, rather than straight- 

nal of the US. The deal would driving force behind the con- costs. “This is a global market The move was not only seen systems integrator, As part of forward mergers, may be the 
have made the combined group solidation attempts. Companies that is becoming more competi- as an attempt to meet cos- that plan it paid £l&9m a year route for European companies 

number three in its field. But with product lines in third or five and there is little room for tomer induced cost cuts but ago to acquire H Group subsid- wanting to compete with, the 

where a merger or alliance has even fourth place in their cho- marginal participants," he was hailed as a first in “work- iary Dowry's fuel control bust- giants of the US. 

been successfully carried out, sen market place have been said. mg together with the cus- ness and in June signed a joint But Mr Paul Compton, aero- 

manufacturing improvement forced to either quit the field tomer” by suppliers. It is also venture agreement to establish, space and defence analyst at 

initiatives have been intro- or seek an alliance in an M M r Saleh hi g hli g hted a seen as a possible Indicator of a repair and overhaul facility Credit Lyonnais, believes joint 

duced and new technologies attempt to strengthen their lm#l new move in the the next level of restructuring far engine and flight control ventures are of less benefit 

developed. market position. I w I restructuring process, as Honeywell attempts to push systems in China. . ' . ' than full mergers as national . 

The restructuring in the sec- Mr Paul Saleh, vice-president that of “out-sourcing” of a costs of its suppliers Lower. But it is 1993 's merger interests tend to intervene 

tor began in the United States, and treasurer at Honeywell, complete part at the produc- European companies have between Dowty and Snecma's especially on decisions such as 

the world's biggest aerospace which is a supplier to both the tfon process, to the supplier, been no less ready to meet the Messier Bugatti of France to a reduction in staff numbers, 

market, and the first to face military and civil aerospace This he believes win become challenge of the new harsh farm a world leader in landing . Thus, he said, the very nature 

the chill winds of recession markets, said: “What we have increasingly prevalent among environment and analysts gear that many have pointed to erf a joint venture was likely to 

and the first wave of defence seen ova: the last few years is suppliers to the civil sector in have pointed to possible cost as the. clearest maniple of the create inefficiency, 

cuts. a need for each supplier to be a which change has been slower benefits of between 10 and 20 restructuring that is taking He concluded: “The US sec- 

Deals by prime contractors leader in its specialised field, than cm the military side, due per cent from restructuring the place among component sup- tor is almost twice the size of 

such as Martin Marietta's You have to be a leader in in part to the small number of Industry. pliers in Europe. that of Europe and what is 

acquisition of General Elec- technology with a reputation big manufacturers, McDonald Lucas Industries, the auto- Mr Tony Edwards, chief more it is homogenous and 

trie's aerospace division in 1998 for delivery and have the trust Douglas, Airbus, and Boeing motive components and aero- ex e c u ti v e of Dowty Aerospace, thus does not suffer from 

and General Dy nam ic’s sate of of the customer.” Earlier this year, Boeing pro- space group, is cited as an said: “We wanted tube a world nationalistic barriers. Europe 

its missiles subsidiary to GM He acknowledges that size vided the biggest exgpjgle of example of a company is player in landin g gear so we win have to decide whether its 
Hughes in the same year woe has become the critical factor, “out-sourcing” to a supplier attempting to become a world align ourselves to achieve that nationalistic differences can be 

cited as the trigger for a simi- and s ays it is not only useful in with its decision to hand over leader among European suppfi- goaL We sold those businesses forgotten in a bid to form 

lar shake-up or “re-engineer- terms of economies erf scale but the complete manufacturing era. where we could not be a global global companies or it will be 

Ing" among the suppliers. also suggests it is the bigger and integrating of the flight Mr Frank Turner, managing player." left behind in a key world 

The search for market lead- companies that can afford the deck system on its new 777 air- director of Lucas Aerospace, However, analysts say simi- industry.” 


Size is the critical factor 




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FINANCIAL TIMES 


FRIDAY SEPTEMBER 2 1994 


VII 


Paul Betts looks at the industry's next challenge - the super jumbo 


Michael Donne on a successor to Concorde 


The race is on to build the big ’un 


The world’s two leadia 
commercial aircraft manufac 
tows - Boeing of the US an 
the European Airbus consoi 
bum - have been stepping it 
the pace in their efforts t 
meet what they believe wDl b 
the nex t big challenge for tbi 
industry, the development of ; 
new generation of super jumb 
airliners capable of seatim 


even more. 


For the past two years, Boe- 
ing and the four Airbus part- 
ner companies including 
Aerospatiale of France. Deut- 
sche Aerospace, British Aero- 
space and Casa of Spain have 
been conducting Joint studies 
an bow to develop and market 
together a Very Large Com- 
mercial Transport (VLCT). But 
the two sides have also 
remained deeply suspicious of 
each other and have continued 
to pursue their own studies in 
the event their ambitious 
VLCT collaborative project col- 
lapses. 

So far only two airlines have 
said they would be prepared to 
commit themselves to buying a 
super jumbo. Not surprisingly, 
the two are the world’s most 
profitable carriers. Singapore 
Airlines and British Airways. 
However, most other interna- 
tional carriers, still struggtiiig 
under the burden of financial 
losses and debt accumulated 
during the industry’s worst 
post-war recession, have been 
reluctant to express anything 
more than a vague interest in a 
large capacity airliner which is 
likely to cost them around 
$200m a piece. 

That has not deterred the 
two manufacturers on each 
ride of the Atlantic to pursue 
their studies. They believe that 
in the longer term there will be 
a requirement for around 
800300 super jumbos in the 
next century. They see these 
extra large aircraft as provid- 
ing a solution to increasing 
congestion at busy interna- 
tional airports and air routes 
at a time when air travel is 
expected to continue showing' 
steady expansion and in some 
areas in the Asia-Pacific region 
vigorous growth. 

“We think a big aircraft is 
necessary to cope with traffic 
growth and congestion at air- 
ports, especially when you con- 
sider that 33 airports alone 


account for 50 per cent of 
world air traffic,” says Claude 
Terrazzoni, head of the com- 
mercial aircraft division of 
Aerospatiale, the French Air- 
bus partner. 

Sir Colin Marshall, BA's 
chairman, explains that a 
super jumbo would help the 
UK carrier feritte www of the 
growing congestion problems 
at its London base of Heath- 
row. It would also giro BA the 
opportunity to offer new ser- 
vices for passengers. BA has 
already made Its own design 
studies for the configuration of 
such an aircraft, including the 
introduction of inflig ht busi- 
ness offices equipped with 
faxes, telephones and personal 
computers, a cinema-style 


So far only two airlines 
have said they woirid be 
prepared to commit 
themselves to buying a 
super jumbo - Singapore 
Airlines and British 
Airways 


inflig ht enter tainmen t room, 
and even a work-out section 
for fitnasfl addicts. 

“We see the use for such an 
aircraft on Far East routes, 
Australasia services and across 
the Atlantic,” Sir Colin says. 
“And vre would be w illing to go 
forward with a new aircraft of 
600 seats offering the same 
long range but also 20 per cent 
lower operating costs tiwn the 
Boeing 747400,” he adds. Jean 
Pierson, the Airbus chief exec- 
utive, believes there will be 
demand for a very large air- 
craft by the turn of the cen- 
tury. “By around 2002, afttmes 
will have to oonridea- replacing 
their existing 747400 fleets," he 
explains. 

But both Boeing and Airbus 
agree that there is unlikely to 
be room in the market for 
more than one new super 
jumbo project in view of the 
programme's heavy develop- 
ment costs estimated at around 
$8bn-$l0bn. This was the main 
reason behind the decision of 
Boeing and the four Airbus 
partners to consider collaborat- 
ing in the same way as US, 
European and Japanese manu- 
facturers believe that the even- 
tual development of a next gen- 
eration supersonic airliner to 



replace Concorde will need the 
broadest possible international 
co-operation. 

Although Boeing and the 
Airbus partners have pursued 
their joint VLCT studies, there 
have been growing signs of 
tensions emerging between the 
two sides and strong possibili- 
ties that, they Will ultimately 
decide to part ways. 

Airbus has become increas- 
ingly worried that Boeing is 
using the joint studies as a tac- 
tic to delay the European con- 
sortium's entry into the very 
large airc raft market and chal- 
lenge the US company’s tradi- 
tional monopoly of this sector 
with its 747. The Airbus theory 
is that Boeing is in no burry to 
launch a new large aircraft 
development programme at a 
time when its hands are 
already full with other projects 
including its new 777 widebody 
twin-engine airliner, the 
renewal ofits 737 family of nar- 
rowbody twin-engine airliners 
and the development of a cargo 
version of the 767. 

Boeing has clearly been anx- 
ious to protect its dominance 
of the top end of the market 
and hfl f* nwrinfeiinurt close con- 
tacts with airlina customers. 
Apart from the joint studies 
with the Airbus partners, Boe- 
ing hag been considering devel- 
oping j bigger version of tha 
747 with a new wing. It has 
also been studying the develop- 
ment on its own of a new very 
large aircraft. 

With increasing signs that 
Boeing's preferred option is to 
build a bigger derivative of the 
747 and that the Seattle manu- 
facturer is already quite 
advanced with its studies. Air- 
bus recently decided to step up 
its own efforts to develop a 
new 500 to 600-seal jumbo, the 
ASXX. 

“You amply cannot afford to 
be out of such an important 
M gwramt of fee market if you 
want to remain a leading air- 
craft manufacturer,” says a 
senior Airbus official. All-math 
ufecturers expect the top end 
of the airliner market to 
become increasingly important 
wife aircraft of more than 400 
seats accounting fin- more than 
40 per cent of the value of the 
civil aircraft business in the 
next 20 years. 

“We must give Boring the 
strongest possible signal that 


Airbus will develop its own 
jumbo if Boring derided to go 
it alone with a bigger 747,” 
adds Louis Gallois, the Aeros- 
patiale chairman. 

This 1 Has prompted the Air- 
bus supervisory board to give 
the consortium the gtvahe&d to 
start marketing in September 
its new A3XX jumbo to a 
selected group of international 
afrliTira after the Farnbarough 
Air Show. The Airbus plans 


involve an aircraft with two 
decks running the full length 
of the fuselage, powered by 
four engines and would have a 
range of 7,000-8,000 nautical 
miles. 

With the probabilities 
increasing that Boeing and Air- 
bus will ultimatel y deride to go 
their own separate ways in the 
jumbo market, the race is now 
on to build the world’s biggest 
aircraft. 


SST-2 is still far away 


The development of a 
second-generation supersonic 
airliner to succeed the 
Anglo-French Concorde 
depends an two factors - satis- 
factory financing and produc- 
tion arrangements and solving 
the outstanding technological 
difficulties, especially those 
affecting the environment 

Few doubt that such an air- 
craft will eventually emerge, 
although it is now accepted 
feat its likely birfhdate may be 
around 2010 to 2015. 

By 2000, Concorde will have 
been In service with British 
Airways and Air France for 
nearly 25 years, so that every 
year thereafter heightens the 
possibility of either a diminu- 
tion of existing supersonic ser- 
vices as Concordes age and are 
"cannibalised" for spares, or a 
gap of same years before a suc- 
cessor emerges. 

Despite the aerospace indus- 
try's desire to start developing 
a successor, there is little 
enthusiasm for such an air- 
craft among the world's lead- 
ing a irfaffl , faced as they are 
with their cumulative losses of 
more than $15bn over the past 
four years. They are more 
inclined to spend their avail- 
able cash on airliners that are 
more likely to meet mass mar- 
ket demands, help reduce con- 
gestion and generate profits, 
than on second-generation 
supersonic transports. As a 
result they are Ear more inter- 
ested in a new subsonic 500- 
phis seater, the socaDed mega- 
jumbo. than a second-genera- 
tion supersonic transport 

Moreover, the airlines 
remain suspicious about the 
flitimrial anrt environmental 
acceptability of an SST-2. 

The two airlines flying Con- 
cordes, British Airways and 
Air France, have made it clear 
that while they may be inter- 
ested in the long-term in any 
SST-2, they want to be abso- 
lutely sure that such an air- 
craft is profitable to buy and 
fly from the start, and totally 
acceptable in every way to the 
communities it will serve. 
They are keenly aware that 
government-imposed environ- 
mental constraints upon the 
airtinas and aerospace indus- 
tries are likely to become even 
more stringent in the next cen- 
tury, and such an aircraft, may 
well face environmental con- 


straints that have not yet even 
been defined. 

The SST-2 research so far 
has been concentrated on an 
aircraft seating 300 passengers 
(against Concorde’s 100). with 
a range of about 5,600 to 6.000 
nautical miles (against Con- 
corde's 3,000), and a speed of 
around about l^OOmph. 

Despite the undeniable 
advances in research into 
supersonic transport technol- 
ogy since Concorde first went 
into service in 1976, especially 
in the reduction of nitrous 
oxide emissions (NOx), the lat- 
ter remain a problem. 

There is also still no answer 
to fee sonic boom created by 
large aircraft flying at twice 
fee speed of sound even at 
high altitude. This means that 
future supersonic services 
would still be largely restricted 
to over-ocean routes, wife sub- 
sonic fli ghts over land masses. 
This, in turn, means that inter- 
est in such aircraft is likely to 
be confined to those airlines 
with a substantial number of 
long-distance over-ocean 
flights in their overall opera- 
tional patterns. 

There is also the problem of 
development cost, likely to be 
between $8bn-l0bn. or about 
the same as the cost of any 
subsonic megajumbo. It is 
doubtful whether aerospace 
industries could finance both 
developments in tandem. 

A lthough demand for the 
mega jumbo may be lim- 
ited - with perhaps only 
a score or so airlines likely to 
support ft initially - its ulti- 
mate market wnw likely to be 
significant^ larger fe»» that 
for a second-generation SST. 
The flirtings believe that the 
subsonic megajumbo is more 
likely to improve their battered 
Tmlnncp sheets. 

Another reason for airline 
scepticism about fee SCT-2 is 
that while much technical 
research is uniter way, espe- 
cially in the US through the 
government -sponsored 
National Aeronautics and 
Space Administration, there is 
still no sign of a coherent and 
practicable design, develop- 
ment, production and market- 
mg plan for such an aircraft 
While theoretically the air- 
lines might prefer to have com- 
petitive designs from which to 


choose, industrial and financial 
logic dictates that one common 
design would stand more 
chance of economic and tech- 
nological success. 

But any kind of agreement 
on such a formula appears to 
be a long way off. There have 
been wide-ranging interna- 
tional discussions between the 
US manufacturers, Boeing and 
McDonnell Douglas, and their 
European counterparts, British 
Aerospace, Aerospatiale, Ale- 
nia of Italy and DASA of Ger- 
many, with both Russian and 
Japanese companies also 
involved, on the possibilities of 
an eventual joint venture. 

At the same time, however, 
the US and European compa- 
nies have also been pursuing 
their individual studies. 

The balance appears strongly 
to favour the US at present in 
terms of government financial 
involvement Hundreds of mil- 
lions of dollars have been, and 
still are being pumped into 
aeronautical research through 
NASA's own high-speed 
research programme, and by 
the leading engine and air- 
frame manufacturers. There is 
no comparable coherent pro- 
gramme in Europe. 

Concerned at this situation, 
the leading European manufac- 
turers earlier this summer told 
their respective governments 
and the EU that some level of 
state and/or community input 
to help research into a Con- 
corde successor was essential, 
so as to ensure that Europe did 
not fell behind the US. So ter, 
however, there has been little 
sign of any such cash support 
Any single SST-2 venture 
would also probably have to be 
global anyway, to ensure the 
widest spread of costs and fee 
biggest possible market. 
Whether US anti-trust laws 
would permit such an alliance 
remains a significant query. 

Demands for cash to finance 
the renewal of much of the 
Printing ageing subsonic fleet 
are already heavy, and will 
escalate as traffic grows and 
fleet expansion becomes imper- 
ative. Lenders other than gov- 
ernments seem more likely to 
favour the procurement of a 
subsonic megajumbo, offering 
some guarantee of successful 
financial returns, than any 
SST-2 venture. 


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Paul Betts looks at spaceflight 

Satellites the 
top priority 


On Sunday, July 20, 1969, US 
astronaut Neil Armstrong, 
commander of the spacecraft 
Apollo ll, became the first 
man to set foot on the moon. 
As he took his momentous first 
step he said: “That’s one small 
step for man, one giant leap for 
mankind." 

But 25 years later, the dizzy 
excitement of space explore- . 
tion fuelled by the race in 
space between the US and Rus- 
sia has been replaced by the 
more mundane worries of an 
industry fighting like many 
others for continued public and 
government support to help 
fund its future development 
and challenges. 

Space has become a commer- 
cial enterprise, albeit a high- 
risk one, and many of its 
remarkable technological 
achievements are now taken 
for granted by a population 
more concerned about jobs and 
welfare Qian by new scientific 
discoveries and. the prospect of 
human beings living and work- 
ing in space one day. 

“I find it rather sad to see 
around here a relatively small 
crowd of people. When I’ve 
been here in the past It was 
jam-packed,” said a senior 
executive of the Anglo-French 
Matra Marconi Space group. 
He was speaking moments 
before the launch in July at 
Cape Kennedy in Florida of the 
US shuttle Columbia carrying 
an international space labora- 
tory inside its cargo bay. 

The launch was spectacular 
and successful. The shuttle 
was blasted into orbit in a 
great cloud of smoke for a 14- 
day mission when its seven 
crew, including Japan’s first 
woman astronaut, conducted 
life science and other scientific 
microgravity experiments 
inside the $lbn laboratory. 

But it made little impact in 
the news. In the US, the big 
stories were the trial of a 
famous American football star, 
floods in Georgia, unemploy- 
ment figures and the death, of 
the North Korean leader. If the 
American newspapers rele- 
gated the mission to the inside 
pages of their newspapers, it 
was lucky -to find even the 


briefest of mentions in the 
European press. Only the Japa- 
nese covered the story in fun, 
reflecting the presence on 
board the shuttle of the first 
Japanese woman in space and 
the determination of Japan to 
build up a strong presence in 
the space sector. 

In Japan, the government 
space budget is continuing to 
rise while it is declining else- 
where. The latest victim of 
budgetary reappraisals in 
Europe is the Hermes project 
to build a European manned 
space vehicle. In the US, the 
National Aeronautics and 
Space Administration (NASA) 
is having to fight for funds 
every year and many of its 
space projects, especially the 
$30bn space station due to be 
convicted by 2002 and involv- 
ing broad International collab- 
oration, are Irving on a budget- 
ary knife-edge. 

With the emphasis now 
being placed increasingly on 
the commercial opportunities 
offered by space, governments, 
space agencies and manufac- 
t u rer s of space equipment have 
been concentrating on the sat- 
Bffite business, in particular for 
earth observation, meteorology 
and communications. Govern- 
ments have also continued to 
show growing interest in satel- 
lites for military applications. 
The role played by satellites in 
the Gulf war has farther 
boosted this interest 

In turn, competition in the 
satellite and satellite launch 
business has intensified. The 
commercial battle has essen- 
tially pitted the US against 
Europe. In the commercial sat- 
ellite launch business, Europe 
baa managed to build a lading 
position during the past 14 
years with Arianespace and its 
Ariane rockets. 

The French-led Ariane pro- 
gramme has done for the Euro- 
pean space industry what the 
Airbus consortium has 
achieved in the civil aircraft 
field: the establishment of a 
credible competitor to the US 
dominance nf commer cial aero- 
space markets that lasted until 
the early 1980s. But although 
Ariane has now taken a share 




Lift-aft: 25 years after the moon tantfing, US space riiuttie minions moka Wile Impact ki news bufletirw 


of more than 50 per cent of the 
commercial satellite launch 
mar ket, it Is faring tough' com- 
petition not only from US 
launchers but also from Rus- 
sia, China and 'Japan, all Seek- 
ing to penetrate the western 
market. 

With a finite market of 
around 20 commercial satellite 
launches a year, the battle for 
market share has provoked 

incr easing in ternati onal trade 
tensions mirroring those in the 
commercial aircraft market 
between the US and Europe. 
The US have accused the Euro- 
peans of subsidising its rocket 
launcher industry, while the 
Europeans have accused the 
Americans of cross-subsidising 
c ommer cial launch operations 
with their large militar y satel- 
lite market, which to all 
intents remains closed to inter- 
national competitors. And both 
the US and Europe have cam- 
paigned a gains t price dumping 
for satellite launches by the 
Russians and the Chinese and 
sought to negotiate trade 
agreements with these coun- 
tries. 

Competition has been 
equally fierce hi the satellite 
manufacturing side of the busi- 
ness. It has forced Leading 
manufacturers to seek wider 
partnerships and has led to 
increasing consolidation in the 
industry. In Europe, two big 
transnational groups are being 
established to create the econo- 


mies of scale necessary to com- 
pete in a tight market 
The French Matra group has 
already merged its satellite 
activities with those of the UK 
General Electric Company into 
a joint venture called Matra- 
Marcord Space, which, is 51 per 
cent held by the French can- 
vpem. Matra-Marconi Space is 
how acquiring the space 
systems division of British 
Aerospace In a deal which 
would create a European space 
group with animal sales of 
more than gtbn. At the same 
time, Deutsche Aerospace, the 
aerospace arm of the Daimler- 
Benz car group, is negotiating 
to merge its space operations 
with those of Agrospatiale, the 
French state-controlled aero- 
space company. 

B ut if the prospects far 
the satellite business 
remain secure, even 
though it is likely to face 
increasingly competitive pres- 
sures, the future of manned 
space flights continues to be 
clouded . with uncertainty. 
NASA officials concede that 
the fate of the US spacs shuttle 
will hinge on whether the US- 
led programme to build an 
international space station win 
survive or suffer from govern- 
ment budgetary cuts. 

The $30bn project is designed 
to create a permanent orbiting 
science institute in space capar 
ble of performing long-term 


research in materials and life 
sciences in a gravity-free envi- 
ronment NASA. says that this 
fundamental research will 
accelerate breakthroughs in 
technology- and engineering 
that trill have practical appli- 
cations on earth. 

“What governments must 
decide is whether yon should 
continue supporting longterm 
fundamental scientific 
research and space exploration 
or simply go for short-term 
commercial pay backs," said 
one senior US space industry 

ofBrifll 

The issue is now faking on , 
once a gain ; an internatio nal 
political dimensi on. But in con- 
trast to the race between the 
US and Russia 25 years ago 
when the two superpowers 
were competing to outman- 
oeuvre each other to take the 
leadership in space, they are 
now working increasingly 
together. NASA recently 
signed a $40Qm contract with 
the Russian space agency to 
support a joint programme 
involving the US space shuttle 
and the Russian Mir space sta- 
tion. The contract also corns 
co-operation in the planned 
international space station. 

This collaboration, which 
both sides see as cansoUdating 
the new post Cold War era, 
could prove to be the main 
. driving force to keep ahve the 
long-term ambitions of. the 
international space industry. 


vruAMrrAT. TPVfES FRIDAY SEPTEMBER 2 1994 


Computers and teamwork cut development costs 

Paper aeroplanes are 

looking dated 


* 


It is no surprise that spending 
by aerospace companies on 
fTHwp nfar jiidad design, manu- 
facturing and .engineering soft- 
ware is such an important part 
of their capital investment, as 
it addresses key Issues for the 
industry’s future - “time to 
market" and global competi- 
tiveness. 

The trend towards "paperless 
aircraft" and more efficient 
ifatai with component suppli- 
ers is being driven by a need to 
reduce product development 
times through concurrent or 
simultaneous engineering. 
This requires a modi greater 
sense of teamwork among dif- 
ferent functions, and between 
suppliers and customers, sup- 
ported by computers. Behind 
afl. is the relentless drive 
to cut development costs. 

According to Dataquest, the 
US-based market research con- 
cern, worldwide spending on 
Cad/Cam/Cae and GIS (Geo- 
graphical Information 
, Systems) software by the aero- 
space/missiles/and space 
vehicles sector was $*22.lm in 
1992, accounting for &5 per 
cent of the total spent by 
industry. 

The relevance of such soft- 
ware can be seen in pro- 
grammes at all the main air- 
frame manufacturers, civil or 
military. At McDmmefl Doug- 
las, which is one of the largest 
users of EDS UnigrapMcs soft- 
ware. the most modern fighter 
aircraft in the world, the F/A 
18-E/F, is being designed using 
all the collaborative 'elements 
offered by a process called 
Electronic Product Develop- 
ment 

Unigraphics says that North- 
rop in California, GE Aircraft 
En gine in Cincinnati and 
McDonnell Douglas in St Louis 
are able to work as one team, 
sharing data, reviewing 
designs and programme plans 
on-line, while building a 3D 
model that can be verified and 
tested on screen, then manu- 
factured in the knowledge that 
parts will fit 

Expensive physical mock-ups 
are therefore eliminated. Uni- 
graphics says its target now is 
to allow airframe and an gina 


■ ynjmii' r nri i n -ars to handle a digi- 
tal modal of up to lfljOOO. com- 
ponents effectively. 

Where a "real" part is 
needed, the aerospace industry 
has taken quickly to the con- 
cept of “rapid prototyping". A 
process known as stereolitho- 
graphy is used to . create a 
full-scale part normally made 
out of plastic resin, from a 
three-dimension Cad file. This 
saves weeks or even months ion 
the t raditional pat far r umakmg 
process. * 

At the other end of the line, 
with the customers in the' air- 
line industry, there aze pro- 
grammes such as Intergraph’s 
Veramis (Vehicle Repair and 
Maintenance Information Sys- 
tem), used by KLM and Virgin 
Atlantic Airways. 

This enables - complete air- 
craft and aircraft sections to be 
visualised as intelligent 
tfarae- dl menslonal computer 
images, and is said to be up to 

five Hmaa faster than manual 

repair registration systems. 

A report about todn pub- 
lished by Dataquest* 
analyses some of the 

trends infinanring the pur- 
chase of Cad/Cam/Cae soft- 
ware, and the extent to which 
the aerospace industry has 
moved towards paperless 
design and production. -Among 
them are: 

■ The need to interchange 
information with suppliers 
and subcontractors. The capi- 
tal cost and scale of operation 
involved with the design and 
manufacture of a complete new 
aircraft is prohibitive, it- says, 
resulting in relatively few 
large organisations supplying a 
few customers using a high 
percentage Of subcontracted 
parts. 

“Changes to an aircraft 
design at any stage can ripjlle 
through the supply chain, 
causing many changes in the 
lower levels,” says Dataquest 
“Minor changes at lower levels 
can cause mqjor problems with 
riprig ns at higher levels. It is 
vital that information ‘flow, 
even if restricted, is accdrate.” 
■ Methods for information 
interchange. Low-level subcon- 


tractors providing sub-assem- 
blies to a rigid specification 

provide electronic information 

to their customers, usually an 
magnetic media. High-level 
companie s require certification 
of design and sign-offs, for 
designs. At present there must 
usually be in. paper format 
forming legal documentation, 
backed up with electronic data. 

The problems Of security and 
the need for legal acceptance of 
.designs are the key reasons for 
the continued use of paper- 
based information transfer. 
Electronic interchange is typi- 
cally used for prototypes, 
working designs and intermit- 
tent information. 

■ Importance of Cad for the 
design activity. The use of 
Cad/Cam/Cae tools is wide- 
spread, with high percentages 
of products being developed 
using them. The ability to 
model assemblies, interactive 
parts, and to test parts func- 
tionally are invaluable.. Many 
systems can provide the spe- 
cialist features and functions 
required by aerospace manu- 
facturers. 

■ Decision process to pur- 
chase new systems. The nature 
of aerospace developments has 
forced the development of cus- 
tomised systems, which must 
support many projects that 
may all be at different stages 
of their life cycle, and may be 

nnriartakan nn an ftite rrmtlnaiai 

basis. Bo in many aerospace 
companies, the purchase of 
design tools is part of a global 
n\- strategy. 

. Another significant factor, 

says Dataquest, Is the increas- 
ing importance of international 
consortia and joint develop- 
ment agreements, such as Air- 
bus. “These approaches force 
commonality In the purchase 
of compatible systems that rip- 
ple through the supply chain. 
Influencing the effectiveness 
and requirements for inte- 
grated product development' 1 

*1994 Focus Report Discrete 
Manufacturing ; Integrated ■. 
Product Development Details 
from Dataquest tel 0494 &2721 

Andrew Baxter 


m 


P i C'-'W 


The 


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financial times 


FRIDAY SEPTEMBER 2 1994 


IX 


AEROSPACE 9 



The sky’s the limit 


Transatlantic navigation has 
come a long way since Alcock 
and Brown crash-landed in an 
Irish bog after pioneering the 
route from Newfoundland to 
Europe In 1919. Passengers on 
a wide-bodied jet are confident 
about precisely where and 
when they will arrive. But the 
huge fuel costs involved in 
long-haul aviation make any 
saving on time worthwhile. 
Airlines jostle for slots across 
the lucrative north Atlantic 
routes while pilots seek tail- 
winds that can chop precious 
minutes off the journey. 

The objective Is to boost 
profits by chipping away at 
fuel consumption figures. But 
the volume of traffic on this 
route mMiM that aircraft must 
maintain a strict separation. 
Without radar coverage crews 
rely on time to keep flights 
well apart. Safety dictates a 10- 
minute margin between air- 
craft This prevents collisions 
but frustrates economy mea- 
sures and extra flight skits. 

Enter Automatic Dependent 
Surveillance (ADS)- This proj- 
ect aims to provide an air traf- 
fic picture for the north Atlan- 
tic by mimicking radar data. 
Satellites are the key, taking 
signals from airliners and 
bouncing them back to a ter- 
restrial control centre. 

British Airways (BA) has 
been experimenting with satel- 
lite navigation since Septem- 
ber 1992, using a Boeing 747 
kitted out for ADS. This relies 
on Inmarsat navigation satel- 
lites to relay information to 
and from ground stations. Air 
traffic control (ATC) gets the 
exact position of the 747 within 
12 seconds. 

Radio contact with' ATC 
entails a delay of up to 15 min- 
utes before an aircraft is 
cleared to change its slot in 
pursuit of a favourable tail- 
wind or to exit turbulence. 
ADS arts this to 30 seconds. 
Dramatic cost benefits have 
been claimed on Pacific routes, 


where United and Northwest 
Airlines use ADS: Northwest 
reckons annual savings of 
$500,000 for each of its 50 Boe- 
ing 747s are attainable. United 
has the nickname steal th Air- 
line because its crews make so 
little use of radio signals. 

Inmarsat’s Fin tan Ryan is 
adamant the ADS price tag of 
$150,000 per aircraft is soon 
recouped. “The savings are 
proven on the Pacific route. 
ADS means the aircraft takes 
off and flies only the course 
that optimises costs,” he says. 

Over the north Atlantic ADS 
promises to halve the separa- 
tion between flights, doubling 
the slots available. These 
developments offer improved 
exploitation of airspace. In the 
final approach, as the aircraft 
lines up to land, an interna- 
tional battle has broken out 
between satellite-based and ter- 
restrial navigation aids. 

Global positioning system 
(GPS) relies on a constellation 
of 24 satellites to measure the 
distance between the GPS 
receiver and the satellite. With 
three satellite signals it is pos- 
sible to locate the position of 
the receiver anywhere on 
earth. GPS was originally 
developed for the US military 
and has spread rapidly 
throughout the civil sector. It 
offers a very cheap means of 
satellite navigation, with 
yachtsman's GPS sets now 
available for as little as £350. 

The GPS lobby claim their 
system is the answer to air 
navigation over developing 
countries and remote regions. 
However, pilots with leading 
carriers are happy with exist- 
ing gyroscopes and laser-based 
navigation systems. 

For landing, civil aircraft 
switch to Instrument Landing 
System (ILS) to co-ordinate 
their final approach to an air- 
port ILS relies an radio signals 
to guide the aircraft in. But 
encroaching signals from FM 
commercial radio stations 


mean that ILK’S days are num- 
bered. The maker of GPS satel- 
lites and receivers, US avionics 
giant Rockwell, have spotted 
an opportunity. 

“You see these massive mar- 
kets in Russia and Chhro open- 
ing up. They don’t have a huge 
radar infrastructure. With GPS 
there is a tremendous advan- 
tage to be gained,” says Ken 
Me dlin, a Rockwall vice-presi- 
dent There is also a lot of 
money on the table. The US 
Federal Aviation Authority 
(FAA) has commissioned a 
$500m project to convert ILS 
approaches to GPS. 

Ur MetfHn and his colleagues 
argue that since GPS does not 
require a huge terrestrial infra- 
structure it is a cheap option. 
Unfortunately GPS is not yet 
suited to landing an aircraft in 
the worst weather conditions, 
known to pilots as Category 3. 
And Category 3 is a famiHar 
state to crews landing in 
Europe. The UK Civil Aviation 
Authority has thrown Us 
weight behind Microwave 
L anding Systems (MLS) to 
replace ILS by 1998. MLS uses 
proven microwave beam tech- 
nology to guide an aircraft 
down in fog. Despite the US 
FAA's endorsement, the CAA 
rejects GPS as “not yet fully 
proven” for precision guidance. 

Suspicions about the reliabil- 
ity of GPS are compounded by 
the fact that GPS satellites are 
controlled by the Pentagon. By 
contrast, Inmarsat answers to 
a 74-nation consortium. An 
accord between the US mili- 
tary and the FAA over civil 
use of GPS has failed to quell 
European suspicions. 

Even if the military agree 
not to scramble or break sig- 
nals in tone of conflict, how 
can operators be sure of future 
tariffs? Satellites have a finite 
life, and European airlines are 
convinced that the GPS com- 
munity will seize on a chance 
to recoup the vast military 
investment. 


David Fishlock discusses new materials 


Down-to-earth research 


Daniel Goldin, administrator or 
the US National Aeronautics 
and Space Administration, 
interviewed last spring by the 
FT, stressed that aeronautics, 
and spin-off from space 
research for the civil aircraft 
industry, would be given, 
greater emphasis in Nasa’s 
S145bn research and develop- 
ment budget 

Aeronautics, although 
named first has played the 
subsidiary role ever since can- 
cellation of research funds for 
the titanium Supersonic Trans- 
port (SST) nearly quarter of a 
century ago. Now, Nasa has 
joint programmes with the US 
aircraft industry on both 
supersonic and advanced sub- 
sonic airliners expected to 
enter service early in the next 
century. New materials are one 
of the main R&D goals. 

Nasa's European counter- 
part. the European Space 
Agency, is no less concerned to 
bring more of its technology 
nearer the ground. Its technol- 
ogy transfer initiative, run by 
Sparelink Europe, o consor- 
tium of technology brokers, 
has Identified no fewer than 
170 opportunities for transfer, 

among them advanced materi- 
als for heat resistance, lubrica- 
tion, sensors and stiff light- 


is year, one of 
ost spectacular 
advanced matfiri- 
ills-Royce Trent 
lirbus A330. was 
schedule. The 
* most powerful 
-Royce has ever 
ers claim it is sig- 
Iter than compet- 
i\es and runs at 
temperatures, 
main confident it 
ed to 100.000 lbs 

:oYce has been at 
of those urging 
to recognise the 
importance or 
gineering maten- 
as a manufacture 
*he US subsidises 
aterials develop- 
h both Nasa and 
mnt of Defense. 


Germany, in July, announced a 
new £500m subsidy for 
research to help its aerospace 
industry meet US and Japa- 
nese competition. The Japa- 
nese have long supported 
national programmes In such 
sectors as engineering ceram- 
ics, where many believe they 
lead the world. 

For Britain, the real purpose 
of the now-defunct Hotel proj- 
ect was as a test-bed demon- 
strator for advanced materials 
development that would push 
engines way beyond the Trent 
Not only have UK engineers 
lost this opportunity, hut they 
face further cuts in materials 
R&D through the undertaking 
to axe defence R&D by another 
£50m-£60m a year. Moreover, 
two major UK sources of car- 
bon fibre composites and other 
advanced aerospace materials. 
ICI and Courtaulds, have both 
abandoned the field. 

A more positive step is the 
appointment of an internation- 
ally renowned materials scien- 
tist as chief executive of the 
new Engineering and Physical 
Sciences Research Council. 
Richard Brook was Cookson 
Professor of materials science 
and head of Oxford Universi- 
ty's department of materials 
science. His speciality is engi- 
neering ceramics. 

Recognition that better mate- 
rials are the key to higher per- 
formance in every sector of 
engineering has slowly been 
gaining ground among deci- 
sion-makers. A report from the 
the UK government’s Advisory 
Council on Science and Tech- 
nology (Acost) in 1992, review- 
ing advanced engineering 
materials, concluded that 
“with a few notable exceptions, 
the UK science and technology 
base in these materials is 
weak. The level of R&D is low, 
and the effort is spread too 
thinly." Among Acost’s recom- 
mendations were that the gov- 
ernment should consider 
laimc hfag “substantial demon- 
strator programmes" - particu- 
larly in the aerospace and 
automotive sectors. 

prof Brook believes that, 
over the past two decades. 


R&D has yielded “enormous 
advances" in the properties of 
engineering ceramics. If har- 
nessed, such advances should 
translate into lighter an ginas 
that can be run at higher tem- 
peratures. So far, they have 
not, and Prof Brook Identifies 
three reasons: 

1. Engineering ceramics are 
still too costly, and although it 
is believed that economies of 
scale would cut their costs the 
question remains: who is to 
pay for the build-up in scale? 

2. The vigour with which 
established materials — such as 
superalloys - react to any 
threat from competing materi- 
als; and 

3. “The residual distaste of 
engineers for brittle behav- 
iour”. plus the fact that the 
fracture toughness of ceramic 
materials can still be a prob- 
lem for many potential users. 

As a result, “research prog- 
ress has not always brought 
the rewards that were fore- 
seen," says Prof Brook. 

Nevertheless, he identifies 
another three factors that give 

him considerable encourage- 
ment 

1. An excellent base has now 
been established for systematic 
advance. He cites the way the 
Japanese are using this base as 
the launchpad for their syn- 
ergy ceramics R&D pro- 
gramme, a 10-year commitment 
involving YlOObn. 

2. He sees merit in focusing on 
applications, where ceramics 
“can deliver a function that 
simply cannot be provided by 
other materials,” such as the 
newly-discovered “high-tem- 
perature" superconductors, 
where success would drag 
other applications along hi its 
wake. 

3. Those who have been least 
successful in their pursuit of 
advanced ceramic materials 
have been the loudest critics 
lately. “The fact remains that a 
modern industrial nation 
looking for technological 
advance will be better placed if 
it can operate with frill compe- 
tence over the entire portfolio 
of materials — ceramics, metals 
and polymers.” 


AIRPORT DEVELOPMENT 

Big spenders await the rush 


With world air passenger 
traffic rising by 5 per cent a 
year, the current annual pas- 
senger total of L28bn is expec- 
ted to double by the early 
i years or the next century. 

The air transport industry is 
gearing itself to meet this 
growth. Airlines- are gradually 
restructuring to improve their 
operational and financial per- 
formance; manufacturers are 

building ever- larger aircraft; 
and airports are increasing 
their own capacity. 

More than 200 substantial 
airport modernisation and 
expansion schemes are under 
way. They include new air- 
ports on land reclaimed from 
the sea, as at tfansni . in Osaka 
Bay, Japan, and at Chek Lap 
Kok, off Lantau island, Hong 
Kong; the near-£lbn proposed 
Terminal Five at London’s 
Heathrow; and the compara- 
tively simple but nonetheless 
vital smaller restructurings, 
such as the £2lm redevelop- 
ment at Southampton East- 
leigh, also in the UK. 

The International Civil Avia- 
tion Organisation, the aviation 
agency of the United Nations, 
suggests that the cost of all 
this work is likely to be $240bn 
over the next 10 years. 

But this covers only the 
direct airport development 
costs - work being done inside 
airport boundaries on termi- 
nals, runways and associated 
roads, and items of internal 
equipment such as information 
systems, security systems, pas- 
senger amenities and fire anH 
rescue equipment 
ft does not include the mas- 
sive associated infrastructure 
costs outside, which are just as 
necessary to enable airports to 
function smoothly. These 
include road and rail links 
with adjacent cities (for exam- 
ple, the £300m direct rail link 


between Paddington station in 
central London and Heathrow 
airport), and the big invest- 
ments needed in air traffic con- 
trol (ATC) facilities (such as 
the £35Qm new en route ATC 
centre being built at Fareham, 
Hampshire, by the Civil Avia- 
tion Authority for the UK 
National Air Traffic Services). 

If these outlays are also 
included, overall airport and 
associated infrastructure costs 
over the next decade could rise 
to at least WOObn. 

Oris Dunham, director-gen- 
eral of Airports Council Inter- 
national, an independent non- 
profit body representing more 
than 420 international airports 
in 139 countries, points out 
that keeping up the momen- 
tum of airport development 


will require the co-operation of 
all elements of the air trans- 
port system. 

He suggests that there are 
four principal challenges: find- 
ing physical space for the 
developments; finding the 
money; political consider- 
ations; and increasing environ- 
mental concerns. 

The first is already serious: 
breaking out of existing airport 
boundaries to undertake new 
ter minal or runway develop- 
ment is difficult for many rea- 
sons, especially environmental 
constraints; and most airport 
authorities find they have to 
squeeze new terminals out of 
existing space, meeting the 
increased pressures by 
improved operational proce- 
dures. This is why some 


authorities - in Japan, Hong 
Kong and Macao - have opted 
for the offshore airport 
approach, although such solu- 
tions are available in few 
places. 

The financial problem is just 
as difficult While some of the 
money can be derived from an 
airport’s own activities - such 
as the expanding retailing ven- 
tures by the British Airports 
Authority - in many cases, it 
must come from either govern- 
ments or the capital markets. 
An improvement in financial 
management and operational 
efficiency by airport authori- 
ties can do much to help 
secure outside investors' funds, 
without risking counter-pro- 
ductive increases in tariffs for 
airlines and passengers. 


The political problems stem 
from governments' need to 
recognise that the air transport 
industry is a generator of eco- 
nomic growth, and not to be 
regarded as a cash-cow for 
national treasuries and sub- 
jected to penal taxation. 

The international Air Trans- 
port Action Group, represent- 
ing airlines, aircraft manufac- 
turers, tourist bodies and other 
organisations involved in air 
transport, is already doing 
much to stimulate govern- 
ments to do more for aviation. 
It points out that every Im pas- 
sengers passing through an air- 
port generate between 2,500 
and 8,000 jobs, (depending 
upon airport size) and a finan- 
cial benefit to the local and 
national economy of between 
$130m and $1.6bn. 

In other words, growth in air 
transport drives economic 
progress, and in turn benefits 
from it. Taxing air transport 
(such as through passenger 
departure taxes) can only be 
acceptable to the industry if 
the money is fed back into the 
development or the air trans- 
port infrastructure, but not ir 
it is used as just another 
means of raising revenues for 
non-aviation purposes. 

The environmental challenge 
is likely to become even more 
severe. Much has already been 
done to reduce aircraft noise 
and emission levels, but it 
seems likely that more strin- 
gent regulations wilt be 
imposed in the next few years. 
It also seems certain tliat exist- 
ing night-noise curfews will in 
most places become more 
restrictive, so that the burden 
of an increasing number of 
flights will have to be met by 
increased efficiency in han- 
dling during daylight. 

This will in turn affect other 
elements of the overall system 
- with pressure for faster han- 
dling of passengers through 
airports, improved access to 
airports by road and rail, the 
use of larger aircraft, and 
tougher air traffic controls. 

Michael Donne 


World’s top 20 airports 


Passengers handBed 1993 



Temrfnar 

International 

Domestic 

Airport (code) 

Number 

% change 

Number 

% change 

Number 

% change 

Chicago O'Hara Irtfl CORO) 

65,091,168 

1.0 

5,899,466 

12.9 

59,191,702 

0.0 

DaHas/Fort Worth Inti (DFW) 

49,654,730 

-4.4 

2.105,427 

22.4 

47.549.303 

-5.4 

Los Angeles Inf 1 (LAX] 

47,844,794 

1.9 

11545.032 

4.3 

35.899.762 

1.1 

Atlanta HartsfleW (AH) 

47,751,000 

13.8 

2,416,582 

8.9 

46,334,418 

ias 

London Heathrow (LHR) 

47,601,733 

5.9 

40.843,527 

6.8 

6,758206 

0.6 

Tokyo Haneda (HND) 

41,507.354 

-2.7 

747,219 

-7.7 

40,460.135 

-26 

Denver Stapleton blt'l (DEN) 

32,626.956 

5.7 

259,170 

26.7 

32367.786 

5.5 

San Francisco lnfl (SFO) 

32.042,186 

0.8 

4,608.777 

9.4 

27.433.409 

-03 

Frankfurt Rheim (FRA) 

31,930.903 

5.8 

25.290.239 

62 

0.640,664 

4.3 

Miami Inti (MIA) 

28.660.39& 

82 

12,373223 

7.5 

16,287.173 

8.8 

New York (JFK) 

26,796,036 

-3.5 

14.821.136 

-0 2 

11,974,900 

-72 

Newark Inti (EWR) 

25,809,413 

6.3 

3.412,036 

3 2 

22,397.377 

6.8 

Paris Charles da GauBe (CDG) 

25,695,366 

3.7 

23,336,134 

4.0 

2259232 

1.4 

Pads Orty (DRY) 

25.250.654 

1.0 

10,075,158 

1.5 

15.175.496 

0.6 

Hong Kong (HKG) 

24 * 420.040 

10.7 

24,420.646 

10.7 

- 

- 

Detroit Metro Wayne Cnty (DTW) 

24,170,570 

5.8 

2.025.043 

9.1 

22.145.527 

53 

Boston Logan Inti (BOS) 

24,038,178 

4.6 

- 

- 

- 

_ 

Phoenix Sky Harbour Infl (PHX) 

23542.372 

6.5 

107,578 

9.8 

23,434,794 

6J5 

MlnneapoGs/St Paul Inti (MSP) 

23.402,412 

22 

566,184 

- 

22J&6228 

-0.3 

Osaka Inti (OSA) 

23,298,583 

-0.7 

5.225,519 

-2.9 

18.073.064 

0.0 


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Sousa: Amur Alport TtaflcSBMtKa, The Alports Gouncfl MonaoonBf Cansw 



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Our long term commitment to innovation and customer care has 
made Smiths industries a valued partner to the world’s leading 
aerospace companies. As a result, our avionics systems are vital 
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Rind out how that commitment can work for you. Cafl Smiths Industries Aerospace, 
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X 



FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


AEROSPACE lO 


WORLD MARKETS 


| Fare wars blight the scene for airlines in the US, says Richa rd Tomkins 


The recovery in the US is tentative, says Frank McGurty 


Hopes for stability 


At the end of July, McDonnell 
Douglas, the world’s largest 

hi of military an**" 

craft, pot its competitors on 
notice that It had no intention 
of leaving the commercial end 
of the business, despite its 
withering share of a shrinking- 
market 

The St Louis-based company 
announced that it would offer 
its customers a new 100-seat 
passenger jet known as the 
MD-95, talring the first Step 
towards full-scale production 
of t he sho rt-haul jetliner. By 
dive rsify in g its iTw iTian product 
range, McDonnell Douglas 
hopes to begin reversing a 
decline that has seen its com- 
mercial production rate shrivel 
by 75 po- cent in just three 
years. 

The decision to proceed with 
the MD-95 is a good illustration 
of how the US aaospace Indus- 
try as a whole is struggling to 
cope with a severe cyclical 
downturn which began in 1990. 
Last year, the net rate of 
orders for all manufacturers - 
as new orders raftnm 
cancellations - reached a 20- 
year low, while the US indus- 
try's total workforce k 32 
per cent below its peak of 
i-33m, reached in 1989. 

In terms of orders, a tenia- 
tive recovery appears to be 
under way. In terms of deliv- 
eries, the numbers are only 
now touching bottom. In 1995, 
production is expected to stabi- 
lise at this year's projected 
level of 465 aircraft - down 
from 844 three years ago, 
according to Moody’s Investors 
Service. 

Boeing, which still com- 
mands a dominant 63 per cent 
of the commercial market, pro- 
jects its 1993 deliveries at 260, 
well below its 1992 level of 442. 

McDonnell Douglas, the US 
aerospace group hardest hit by 
the contraction. Is well aware 
that it can no longer count on 
the Pentagon to help offset 
downcycles on the civilian 
side. 

Hie easing of intemafibnal 
tensions in the 1990s, coupled 
with stepped-up political pres- 
sure to cut the massive US 
budget deficit, have all but 
assured that the bounty reaped 



T-46A Goshawk: McDonnell Douglas Is the largest mittary aircraft producer 


during the Reagan military 
build-up will never return. 

Tnrippd, tha fTHntnn adminis- 
tration has accelerated the 
timetable for a downsizing pro- 
cess which began at the end of 
the cold war. It projects the 
Defense Department's outlays 
at S233.7bn in fiscal 1997, 
nearly 21 per cent lower than 
the high-water mark reached 
in fiscal 1989. By contrast, the 
final Bush projertlon for fiscal 
1997 was a relatively hefty 
£273.7bn. 

The response of the aero- 
space industry to fins unprece- 
dented challenge is well docu- 
mented. A . wave of 
market-driven consolidation 
has swept over the industry 
since 1991, forcing companies 
either to seek a leading posi- 
tion in a particular segment 
through acquisitions, or to sell 
off their marginal operations to 
a competitor seeking to do the 
same. 

Some companies, such as 
Lockheed and Martin Marietta, 
have become aggressive buy- 
ers, while General Dynamics, 
General Electric and others 
have sought to limit their 
exposures to shrinking mili- 
tary allocations. 

The latest twist in the indus- 
try’s reshaping ramp in April, 
when Northrop won a month- 
long bidding war with Martin 
Marietta to acquire Grumann, 
a Long Island group specialis- 
ing in defence electronics. The 
move, which carried a $2.i7bn 
price-tag, was seen as a 
last-ditch effort by Northrop to 
thwart the possibility of its 


own takeover. 

By and large, defence con- 
tractors assured their contin- 
ued profitability by reshuffling 
the business portfolios. McDon- 
nell Douglas, which has stayed 
out of the fray, is an exception. 
Still, Its defence business 
remains on solid footing. The 
division, which makes the 
F/A-18 and F-15 fighter jets, as 
well as the controversial C-17 
transport, recently posted 
record operating earning for 
the three months to the w i d of 
June. 


O H fha mmmwirlii] 

its position is decidedly 
more precarious, with 
production plunging to 48 air- 
craft last year, from 169 in 
1991. Prudent cost-cutting has 
gnahied the business to remain 
marginally profitable, however. 
The amwmnrgmgnt of a $2bn 

order from Saudia, the state- 
run carrier of Saudia Arabia, 
this spring was timely. Its fac- 
tories at Long Beach, Calif- 
ornia, are steadily whittling 
down die backlog of unfilled 
orders for its larger three-en- 
gine MD-11 jetliner and modem 
versions of its venerable DC-9. 
(The lion’s share of the Sandi 
order - 46 aircraft worth $4bn 
- went to Boeing.) 

The new MC-95 is a variant 
which fits into a crucial mar- 
ket niche. With US carriers 
emulating the success of 
Southwest Airlines and other 
profitable operators, many of 
them are likely to scrap their 
hub-and-spoke flight networks 
in favour of point-to-point fly- 


ing. It is a strategy sure to 
accelerate orders of smaller 
aircraft, with 100 seats or less. 

The conundrum facing 
McDonnell, however, is that 
the market has been Hooded 
with new aircraft over the past 
five years, at a time when 
world air capacity h ws expan- 
ded twice as font as traffic. The 
result Is a huge stockpile of 
used aircraft witting to be put 
back into service when 
demand picks up. To make 
matters worse, air traffic Is 
expected to recover more 
slowly than in past cycles, 
with slow economic growth 
forecast for the late 1990s. 

As a consequence, Moody's 
expects a 22 per cent increase 
in annual aircraft deliveries 
from 1993 to 2002. Though that 
level of growth appears to be 
sufficient, an unprecedented 
number of aircraft programs 
will compete for a piece of the 
pie. 

The most promising - and 
most risky - of these pro- 
grammes is Boeing's B-7T7, Hi* 
largest twin-engine airplane 
ever built The 400seat wide- 
body, which cost $4J>bn to 
develop, is scheduled to begin 
commercial flights tiavt May. 

The question is, will every- 
thing go as planned,” says Mr 
Jack ModzeLewsbi, an analyst 1 
with FaineWebber, the New i 
Talk securities house. “If the 
planes don’t ship, Boeing may 
have a few billion dollars 
worth of inventories stacking 
tip very fast” 

About 145 of the flying 
behemoths, at yiasm are 
already «n the order books, but 
the Seattle aerospace giant 
needs twice as many to recoup 

its inv whnpnt To 

demand. Boring has requested 
US regulators to allow the air- 
craft, which initially win have 
a range of 4,600 to fly 

over the oceans immediately, 
without the normal trial period 
over land. The waiver has 
raised heated opposition. 

The world's biggest aero- 
space group can fil afford a set- 
back. Net income in the second 
quarter was down 48 per cent 
from the 1993 period, and 
would have come in lower if 
not for an unexpected tax 
break. Far the year, revenues 
are expected to reach $21bn. 
about a third of the 1992 level. 
Mr Modzelewski, among oth- 
ers, doubts whether its annual 
orders wifi return to the 400- 
plane level before the turn of 
the century. 


Unprecedented turmoil 


More than is years have 
passed since deregulation 
opened the skies above the US 
to the unrest rained, farces of 
enterprise and competition. By 
now, the airline industry 
should have settled down into 
some kind of equilibrium. 
instead, it is feu unprecedented 
turmoil. 

Barely a week passes with- 
out news of another fare war 
breaking out, an airline deliv- 
ering a wanting of impending 
losses, or thousands of jobs 
bring cnt. In the past four 
years, the US airtime industry 
has lost nearly $13bn - more 
ftim all the money .it ha* ever 
made since the invention of 
powered Sight- 

So what has gone wrong? It 
is not as though the airlines 
are short of passengers: last 
year the number of people cai> 
ried by US airlines on domes- 
tic and International flights 
rose by 2.6 per cent to a record 
487.2m. The trouble is, the Mg 
airlines cannot charge a fare 
high enough to carry them at 
a profit - and that is because a 
new breed of low-cost airlines 
has emerged. 

Competition from upstart 
operators is nothing new to 
the US. When air deregulation 
came in 197ft, many entrepre- 
neurs thought they saw an 
opportu ni ty to make a profit 
by starting new services or 
undercutting fares on existing 
routes. But almost as many 
were wrong: as the big carri- 
ers fought back and the com- 
petition intensified, scores of 
airlines went bankrupt, most 

Of ftww gmnTl 

The economic boom of the 
late 1980s brought respite for 
the industry, but it was not to 
last With the onset of the Gulf 
War at the be ginning of 1991, 
pmaigH - demand gag ged, and 

airlines were burdened with 
surplus capacity. This pro- 
vided entrepreneurs with an 
opportun ity to pick up assets 
and staff on the cheap and 
make another onslaught on 
the established carriers. 

. This time, however, the 
entrepreneurs were better pre- 
pared. For one thing , they had 
learned from the mistakes of 
their predecessors; for 
another, many were experi- 
enced airtine employees pen- 
sioned off by the Mg carriers. 
Still more im p o rt an t, they bad 


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a successful model from wtrich 
to work - that of Southwest 
Airlines, the phenomenally 
successful Texas-based carrier. 

Today, Southwest is by far 
the most profitable airtine in 
the US and the one that all 
carriers, Mg and small, seek to 
emulate. It succeeds because 
its costs are so much lower 
than those of the established 
airlines. The result is that it 
can charge permanently low 
fares on every flight and win 
more passengers - not just 
from other airlines, hut by 
encouraging people to fly 
instead of driving, and by gen- 
erating demand for travel that 
would not otherwise exist 

How does S o ut h w e st do It? 
Unlike the Mg airlines with 
their hub-and-spoke 
operations, Southwest speci- 
alises in short-haul, point-to- 
point services with frequent 
flights and fast turnarounds 
that make i ntensive use of its 
staff and aircraft. Its hard- 
working and enthusiastic 
employees are much more flex- 
ible than those working for 
the Mg carriers: flight atten- 
dants, for ™nip h , clean the 
passenger cabin while people 
disembark. And there are few 
frills: accommodation is all 
economy class, there axe no 
pre-assigned seats, and the 
inflight meal Is a soft drink 


and a bag of nuts. 

Translated into financial 
terms, the result is that 
Southwest, and airlines like it, 
have operating costs of tittle 
more than 7 cents per avail- 
aide seat mile, while the big 
carriers have operating costs 
averaging rather more than 9 
cents a seat mile - nearly 30 
per cent higher. So when the 
Mg carriers have to lower 
fares to compete with smaller 
carriers muscling in on their 
routes, they lose money. 

Faced with the certainty 
that the small carriers are not 
going to go away, the Mg car- 
riers have been left with no 
choice but to bring their own 
cost structur es down. The 
effect has been a rash of radi- 
cal restructuring. 

Perhaps the most spectacu- 
lar is the one now being imple- 
mented by United Airlines, the 
biggest US carrier. In July, its 
shareholders voted to accept a 
plan thrashed out by its man- 
agement and wor k force under 
which employees win be given 
a 55 per emit controlling stake 
in the afriine in exchange for 
wage cuts and changes in 
working practices worth 
|4.9hn to the company over 
the next 12 years. 

United is not the only big US 
airline to have offered employ- 
ees a stake to the company to 


30kts Increase In Maximum Speed ■ 32% Decrease In Take-Off Distance • 32% Cost Of Ownership Savings • 31% More Thrust • 18% More Fuel Efficient 


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return for labour concessions. 
Northwest Airlines narrowly 
avoided bankruptcy in the 
middle of last year by persuad- 
ing employees to yield 2886m 
worth of concessions over 
three years in return for 33 
per cent of its equity (now 26 
per cent following a stock 
offering to March). And last 
year Trans - World Airlines 
emerged from bankruptcy 
after trading 45 per cent of tb 
shares fur S660m worth of 
employee concessions over 
three years. 

- The advantage of employee 
buy-outs like these is that in 
. heavily unionised airlines, 
they produce labour savings 
without the strife that might 
accompany swingeing job cats. 
The largely non-union Delta 
Air Uses, however, has 
adopted a different s trategy: fat 
April it announced that it was 
cutting up to 15,000 jobs from 
its world-wide workforce of 
73,000 as part of a plan to cut 
$2bn a year from operating 
costs by ntid-1997. 

Soon after Delta’s announce- 
ment, USAir announced that it 
was «M*hig to cut costs by 
$lbn a year over the next 
three years, with half the costs 
coming from efficiency 
improvements -and the other 
half coming out of lafaour 
costs. USAir, however, is 
unionised, and it is still in 
talks with its unions about 
how the labour cost savings 
are to be achieved. 

Meanwhile, Continental Air- 
lines, which last year emerged 
from its second bankruptcy 
with a largely non-union 
workforce, has reacted to the 
competition by setting up its 
own low-cost, low-fare opera- 
tion - nicknamed CAZJte 
within the industry. United, 
with its new cost structure 
now to place, is planning to do 
the same with the launch of 
United Shuttle next month. 

If one thing is certain about 
these changes, it is that they 
not over yet Indeed, it seems 
probable that worse is to 
come. The big carriers cannot 
continue indefinitely to absorb 
foe losses they are suffering in 
the fare wars afflicting toe 
maxket. As toe competitive 
pressures intensify, only those 
that succeed in adapting to the 
low-cost environment wQl sur- 
vive. 


And just as importantly, the C-130J Hercules programme provides the UK 


WITH A FIRM BASIS FOR EXPANDING ITS LEADERSHIP IN AEROSPACE TECHNOLOGY WORLD-WIDE 


YOU ARE LOOKING AT THE NEXT GENERATION C-130J HERCULES. NOT THE CURRENT 


FOR THE FUTURE. 


Hercules that's been in service for over 30 years, but a high-technology, fully 


Given all these crucial facts, the House of Commons defence committee 


EQUIPPED MODERN TRANSPORT AIRCRAFT. TODAY'S ANSWER FOR THE RAF OF THE FUTURE. 


CONCLUDED THAT THE COSTLY BUSINESS OF REFURBISHING THE EXISTING AIRCRAFT IS SIMPLY 


But more than this it represents over 3,500 highly-skilled jobs in the UK 


NOT FEASIBLE. 


Aerospace Industry - right across the UK - right now. 


The C-130J Hercules - investing in the people and the future of the UK. Today. 


Because the C-130J Hercules programme is in production now. 


36 UK partner companies have already invested heavily in this powerful joint 


project with Lockheed. At no cost to the British taxpayer. 


In real terms, revenue from the programme will net the UK £2.3 billion, rising 


potentially to £7 billion in the long term. 



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FINANCIAL TIMES 


FRIDAY SEPTEMBER 2 1994 


XI 


— pan: Mic hiyo Nakamoto explains the importance of the YSX project 

Taking the partnership route 


Officials, researchers and 
financiers of the Japanese 
aerospace industry were today 
pthermg for a meeting that 
has become an annual cere- 
*oony - to discuss whether the 
country should once again 
a place in the world com- 
mercial aircraft industry. 

At issue wffl be a plan to 
mnld a small passenger aero- 
plane, the YSX. which the 
industry and its guardians at 
5®“ ~ the ministry of interna- 
tional trade and industry — 
have been nurturing for the 
past five years. Although still 
just a vision in the eyes of 
planners and manufacturers 
the YSX has already caught 
the Japanese public’s imagina- 
tion. 

The interest shown in the 
aircraft is understandable, 
given the traditional Japanese 
fondness for national projects 
and symbols of industrial 
might But the YSX is not just 
a symbol of Japan's resolve to 
establish its credibility within 
the industry. It is the third 
attempt by some of the coun- 
try’s most hi g hl y regarded 
manufacturers to build and 
market an aircraft on a com- 
mercial basis; and the stakes 
are high. 

For the bureaucrats at Miti 
who are backing the project, it 
is not just a question of pride, 
although that, too, is impor- 
tant. Unlike same of the more 
shining examples of Japan’s 
manufacturing prowess, the 
aerospace industry, despite 
good intentions and recognised 
skills, has been something of a 
ble mis h on the country's 
industrial record. 

The ministry, more famous 
for its successes in Industrial 
planning than its failur es, is 
expected to increase the 
amount of money available to 
the project next year to Yl.lbn, 
which will cover the costs of a 
feasibility study that has been 
carried out since 1989. The 
increase, from Y550m this year, 
at a time when government 
coffers have been reduced by 
one of the longest recessions 
since the war, represents a 
strengthened c ommi tment to a 
project that could lose milli on* 
and create another blemish on 
its record. 

For the five leading Japanese 



Maintenance woric a Japoi Airlines technician inspects an engine 


aerospace manufacturers par- 
ticipating in the YSX pro- 
gramme, the risks are also 

riannrtng 

“The initial development 
costs for commercial aircraft 
are extremely hi gh, and it 
takes about 10 years to make 
profits, so we have to be cau- 
tious,'’ emphasises Mr Yutaka 
flineno, general manager of 
MHI’s aerospace and special 
vehicle headquarters. “It is not 
going to be easy.” 

In the past, the industry has 
had little joy in its attempts to 
develop and market commer- 
cial aircraft. The only two 
designed and built in Japan - a 
64-seat twin-propeller airliner 
called the YS-11 and a short 
take-off and landing plane 
called Asuka - have been 
embarrassing commercial fafl- 
ures. 

Manufacturers, however, 
claim that it is not for lack of 
technical ability that the 
industry has lagged behind 
those in the US and Europe. 
Japanese technical capabilities 
have been tested through the 
substantial amount of subcon- 
tracting work they have done 
for Boeing and McDonnell 
Douglas, and an joint develop- 
ment projects with Boeing, 
such as the 777 and 767. 

The latter, in particular, pro- 
vided Japanese companies with 
experience in building the air- 
craft’s body. “At first. Japa- 


nese companies did not have 
any speciality, but after the 
Boeing 767, Japanese compa- 
nies are probably good at body 
work,” rfaiwifl Mr Hmeno. 

He believes that the real 
stumbling blocks to the growth 
of Japan's aerospace industry 
have been a domestic market 
that is too small to support a 
landing industry, gnd the tan 
on Japanese exports of defence 
products. 

But additionally, there is the 
bitter truth which the YS-11 
fiasco - it went out of produc- 
tion in 1972 after 12 years, 
because it was unprofitable - 
taught both the Ind ust r y and 
Miti: the Japanese industry 
lacks the marketing expertise 
and the credibility needed to 
sell commercial aircraft glob- 
ally. 

Although the YS-U was actu- 
ally respected as an aircraft 
industry officials explain, 
nobody was willing to take the 
risk of buying expensive 
planes from Japanese manufac- 
turers, which had no estab- 
lished record. 

To avoid the same mistake, 
the industry and Miti have 
consented to have a western 
partner on their next endea- 
vour, the YSX. “We have to 
team up with an established 
partner, like Boeing or Airbus, 
to sell the plane, because we 
don't have fixe marketing abil- 
ity and need to provide after- 


sales services,” concedes Mr 
Eneno. 

The latest indications are 
that the preferred partner is 
Boeing, with which the Japa- 
nese aerospace industry has a 
long relationship- But the ques- 
tion facing the industry then 
would be whether it could shed 
the junior-partner rede it has 
always been relegated to in its 
dealing s with the US company. 

The inability of Japanese 
aerospace companies to win 
more than medium-technology 
work from Boeing - such as 
wing-flaps - has earned the 
industry a reputation as a per- 
manent subcontractor to the 
US company. An attempt was 
made to play a more prominent 
role in the development of Boe- 
ing’s 777 Jet by taking a 21 per 
cent stake in the project How- 
ever. even MH3, the leading 
Japanese company in the 
industry, admits that there is a 
long way to go before the 
industry claim partnership 
with Boeing. 

“We see it as joint develop- 
ment, but others say it is sub- 
contracting," concedes Mr 
Hineno. “Japanese companies 
will only be able to increase 
their share of a project by 
improving their labour capabil- 
ities. facilities and technol- 
ogy." 

For example, Boeing has 
always kept work on the main 
wings largely to itself. Wing 
work needs large-scale manu- 
facturing capacity, which does 
not exist in Japan, ha w piaimi 

Even if the Japanese indus- 
try manag es to take the lead in 
a commercial venture, it is 
likely to face fierce competi- 
tion on the global market, 
where there are several other 
projects to develop a small pas- 
senger jet 

For the industry, and for 
Miti, there are few options. 
“The project is unlikely to go 
ahead if it appears that it 
wont be profitable,” says an 
official at the ministry. 

Yet the country's defence 
budget, where the industry 
derives 75 per cent of sales, is 
sh rinking ; and industry and 
government agree that aero- 
space manufacturing must be 
retained for the technological 
skills that it generates for a 
variety of industries. 


Russia: morale is low and the outlook bleak, writes Leyla Boulton 

The pains of privatisation 


After a difficult year of 
adjustment to market econom- 
ics, the future looks bleak for 
Russia's aerospace and airlin e 
industries. 

Despite having some of the 
best design capacity in the 
world, manufacturers are find- 
ing it difficult to raise the 
finance - they need to produce 
and sell aircraft in world mar- 
kets. The once-raonolithic Rus- 
sian airline industry, having 
split up into some 300 mini-car- 
riers, has been hit by two seri- 
ous accidents, which have 
dented already shaky interna- 
tional confidence in it 

After prolonged indecision 
over the future of Russian 
International Airlines - the 
international rump of the for- 
mer monopoly, which contin- 
ues to use the Aeroflot name - 
the government decided in 
June to nil 49 per cent to the 
airline’s employees. 

In this first stage of privati- 
sation, employees will be 
barred for an unspecified 
period from re-selling their 
stock, which they will be 
offered at a discount. The gov- 
ernment does not plan to sell 
off any of its remaining 51 per 
cent stake for at least three 
years. 

“In the next stage, I think 
conditions for foreign capital 
to invest will be created," Mr 
Igor Desyatnichenko. deputy 
director for finance, was 
quoted as saying in a recent 
interview. In the meantime, 
the government has promised 
to give the dividends of its 51 


per cent stake to the airline, to 
help it acquire new aircraft 

But a question-mark remains 
over whether it will remain a 
single airline, following the 
decision to allow four of its 
subsidiaries the option of 
breaking away as separate 
companies. This decision coin- 
cided with a change of chair- 
man at Russian International 
Airlines, with the replacement 
of Mr Vladimir Potapov, who 
had struggled to keep the air- 
line whole, by one of his depu- 
ties, Mr Vladimir Tikhonov. 

The declared purpose of pri- 
vatisation is to make the 
industry more efficient. But 
the collapse of the Soviet 
Union, in December 1991, only 
complicated its adjustment to 
market reforms launched just 
over two years ago. Newly-in- 
dependent republics, as well as 
restless regions and even 
cities, seized control of locally- 
based fleets. But despite the 
lifting of controls o n ticke t 
prices, as part of the reforms, 
most of the so-called “baby 
Aeroflots” lack the muscle and 
expertise to achieve interna- 
tional standards and reequip 
ageing fleets. 

In January, a Tupolev air- 
craft operated by a tiny 
Siberian of&hoot of the farmer 
Aeroflot crashed en route from 
the Siberian city of Irkutsk to 
Moscow, killing all 120 people 
on beard. Morale and discipline 
have also suffered across the 
board- In March, 75 people died 
when an Airbus leased by Rus- 
sian International Airlines 


crashed on a flight from 
Moscow to Hong Kong. Unoffi- 
cial reports released at the 
time suggested that the pilot 
had been teaching his children 
how to fly. But publication of 
the results of an official 
inquiry have been postponed 
several times, fuelling suspi- 
cions of an attempted cover-up. 

A bright spot amid the chaos 
is the development of a few 
privately-funded airlines, such 
as Transaero, which offers 
western-style service at a small 
premium to that of its state- 
owned rivals. 

Pending state-owned airlines’ 
inevitable restructuring as big- 
ger companies, the government 
this spring made a start with 
privatisation when it auctioned 
part of Vnukovo Airlines, 
based at Moscow's domestic 
Vnukovo airport 

Until July 1, privatisation of 
state-owned assets had been 
conducted through the free dis- 
tribution of vouchers to the 
population. However, future 
privatisation, including that of 
Russian International Airlines, 
will be for cash only, with 51 
per cent of the proceeds due to 
be ploughed back into compa- 
nies. 

Lack of finance to reequip 
fleets is the main problem fac- 
ing Russian airlines, and is 
likely to remain so even after 
privatisation. It is also an 
obstacle for aircraft manufac- 
turers, which were previously 
run and ftnatirawi by the state. 

Even those airlines which 
have some money are finding 


it easier to lease or buy west- 
ern aircraft, because of the 
favourable financing terms 
offered by western manufactur- 
ers. A cash-strapped govern- 
ment has yet to implement a 
long-promised industrial policy 
of selective support for its 
most promising industries, 

SUCh as a i r fr am e manufac tur- 
ing. 

In the meantime, two engine- 
manufacturers have teamed up 
with two leading Russian air- 
craft manufacturers in an 
attempt to mass-produce Rus- 
sian aircraft with western 
engines and avionics. Hie most 
advanced project is an alliance 
between Russia’s flyushin and 
Pratt & Whitney of the US. 
Their long-haul H-96-M aircraft 
is currently undergoing tests 
for certification in Russia and 
the west A similar aircraft, 
with Russian engines, the D-96- 
300, is already being operated 
by Russian International Air- 
lines on routes to the US. 

A separate alliance, between 
Russia’s Tupolev, and 
Rolls-Royce of the UK, wants 
to produce the medium-haul 
Tu-204 with western engines 
and avionics. But it is still said 
to be s eeking finance for certi- 
fication procedures. According 
to Mr John shannon, executive 
director of Spectrum Capital, 
the UK venture capital com- 
pany, the Russian authorities 
have approached the British 
government for help in raising 
©Qm for this purpose, on the 
grounds that this will help 
Rolls-Royce to sell engines. 


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11 


CHINA 

Anxiety over 


When a Russian-built Tupolev 
aircraft, of C hina Northwest 
Airlines, crashed near the his- 
toric city of Xian in June, it 
was not only China’s worst air 
disaster, it also coincided with 
festering doubts about Bei- 
jing’s ability to manage its 
flourishing aviation sector. 

An appalling safety record - 
more than 500 people have 
died in air crashes since 1992 
- had turned the spotlight on 
lax safety standards, poor 
maintenance, sloppy cabin ser- 
vice and virtually non-existent 

airport security. In the past 
year or so, there have been no 
fewer than a dozen hijackings 
to Taiwan of Chinese airliners. 

Since the appointment late 
last year of Hr Chen Guangyi 
as head of the Civil Aviation 
Administration of China 
(CAAC). tiie country’s aviation 
regulatory arm, efforts have 
intensified to improve safety; 
but foreign airline representa- 
tives say that China has a long 
way to go before it can hope to 
match international Stamfords. 

China's aviation sector sim- 
ply has grown too fast for 
available resources: pilot 
training, for example, is lag- 
ging well behind demand. 
Am (mg the most critical prob- 
lems is a lack of experienced 
pilots. 

China is moving to redress 
the problem, in co-operation 
with foreign airlines such as 
Lufthansa which has agreed to 
train Chinese pilots at tts facil- 
ity in Phoenix, Arizona; but 
demand is such that it will 
take years to provide an ade- 
quate supply of pilots. 

Growth figures for the avia- 
tion sector are staggering. Pas- 
senger numbers are rising at 
an average of 20 per cent 
annually, and this is expected 
to continue for the nest few 
years; althongh a credit 
squeeze slowed the increase 
last year to i&£ per cent from 


safety 

33 per cent the year before. 

Projected Chinese purchases 
of passenger aircraft should be 
enough to keep Airbus Indus- 
tries and Boeing in business 
weft into next century. In a 
study, for an Air Finance con- 
ference Chase Manhattan 
Bank predicts China's passen- 
ger fleet of 350 aircraft will 
increase fivefold by 2010. This 
would require the purchase of 
1,200 new aircraft worth 
USSSObn. 

Chase’s prediction compares 
with less optimistic forecasts 
by, among others, Boeing 
which predicts purchases of 
800 aircraft and expenditure of 
U$40bn. Airbus expects China 
to purchase 620 new aircraft 
in the next 15 years. 

Regardless of who is correct, 
numbers of aircraft and 
amounts of money involved 
are colossal. Growth in the 
civil aviation fleet since China 
began opening to the world In 
the late 1970s has been spec- 
tacular. In 1974, China had 
just 12 passenger aircraft, 
compared with the 350 today. 

Boeing, followed by Airbus 
and McDonnell Douglas, have 
been the chief beneficiaries. 
Boeing delivered 46 airliners 
to China last year - 14 per 
cent of its production.This 
year, it expects to deliver 38, 
or 14 per cent of a lower pro- 
duction- Negotiations are also 
well advanced for the pur- 
chase of a further 50 Boeings, 
including the new 777 two-en- 


record 


gined widebody, at a cost of 
about U$5bn. 

Airbus, too, is making a 
stronger showing in the China 
market The European consor- 
tium secured orders last year 
worth XJUJOin. Three airlines 
- China Eastern In Shanghai, 
China Northwest in and 
China Northern in Shenyang - 

are now operating Airbus. 

Other suppliers of aviation 
equipment are also benefiting 
from China’s aviation expan- 
sion. Rolls-Royce, for example, 
is supplying 42 of its RB211- 
535 engines for Boeing 757s on 
order by Chinese airlines and 
is expecting further orders. 

While China is spending bil- 
lions of dollars on the pnr- 
chase of new top-of-th e-range 
aircraft. It is far from maxim- 
ising returns on investment 
The Chase Manhattan study 
reported that China’s average 
aircraft utilisation rate was 
5.2 hours a day in 1992, up 
from 4.7 the year before. This 
compares with 11 for Singa- 
pore Airlines. 

Among factors curtailing 
utilisation is the primitive 
state of Chinese infrastruc- 
ture, including airports and 
air traffic control systems. 
Only 40 of China's airports 
have instrument-landing 
systems, which means that 
bad weather often causes 
delays, and thus disruption to 
the entire network. 

A striking feature has been 
the proliferation of new 


regional operators. China now 
has more 30 airlines. T his 
regional isation of the aviation 
sector has placed a huge bur- 
den on CAACs overstretched 
regulatory abilities. On the 
other hand, the growth of 
regional carriers has added a 
dynamic to the sector which 
would not have been possible 
if the CAAC monopoly had 
been maintained. 

The regional airlines are 
also spreading their wings 
beyond China, opening routes 
to international destinations 
such as Singapore and Thai- 
land. Several are seeking capi- 
tal abroad, to fund ambitious 
expansion plans. China 
Southern, based in Guang- 
zhou. and C hina Eastern are 
among 22 Chinese companies 
approved for listing on over- 
seas stock markets. 

In its efforts to secure exper- 
tise and capital, China 
recently announced it was 
opening its airline industry to 
foreign investment, though 
foreign involvement in a main- 
land airline would be restric- 
ted to 35 per cent with voting 
rights capped at 25 per cent. 

Foreign investors were also 
being urged to Invest in air- 
port faculties such as termi- 
nals, ground-handling and air- 
craft maintenance. Indeed, 
foreign carriers are already 
becoming more involved. 

British Airways recently 
formed a joint engineering 
venture with China Southern; 
Lufthansa has a joint venture 
maintenance facility in Beijing 
with Air China; and Singapore 
Airlines has concluded a joint- 
venture agreement with the 
Beijing Airport Authority for 
Inflight kitchen services and 
ground handling facilities. 

China’s aviation sector is In 
flux, and the learning curve is 
proving to be steep. 

Tony Walker 



Ik 




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FINANCIAL TIMES FRIDAY SEPTEMBER 2 1994 


U K aerospace industry is 
pressing the govern- 
ment to adopt a new 
strategic initiative, to guaran- 
tee the fixture of the industry 
at a time when it is continuing 
to lose market share. 

Although companies have 
continued to restructure and 
consolidate their operations 
through partnerships and alli- 
ances with international 
groups, they warn that the sec- 
tor’s future will depend on a 
political consensus around a 
clearly stated public policy of 
support for the industry. 

hi a written submission to 
the House of Commons trade 
and industry select committee, 
the Society of British Aero- 
space Companies (SBAC). the 
trade association grouping 
more than 200 UK aerospace 
companies, said that the gov- 
ernment, in addition to provid- 
ing a stable long-term invest- 
ment climate, needed to 
develop with the industry “a 
national technological strategy 
to make greater progress in 
maximising the efficient use of 
Investment resources from pri- 
vate and public sources.” 

The call for greater govern- 
ment commitment co m es at a 
time when UK aerospace com- 
panies are continuing to face 
the effects of the prolonged 
recession in the civil aircraft 
business and the decline in 
govendnent defence following 
the end of the cold war. 

Until recently, the UK aero- 
space industry was second 
only In size to that of the US 
among western economies. But 
after peaking in 1990, its 
annual turnover has declined 
from £lL7bn four years ago to 


around £l04bn. The impact of 
lower defence budgets has led 
to a marked change in the civ- 
il-military split, with civil 
activities now accounting for 
around SO per cent of total 
annual turnover compared 
with only 25 per cent in 1980. 
Over the past 12 years, 
restructuring has led to a 
decline in employment, from 
nearly 23QJXX) people In I960 to 
fewer than 150.000 last year. 

Other aerospace industries 
in. Europe have Eared better 
than the UK in terms of gov- 
ernment support By 1990, the 
annual turnover of the French 
industry had begun to match 
the UK, with France maintain. 
ing a stronger level of defence 
spending as well as adopting 
an active policy of backing 
what it considers a strategic 
industrial sector. The German 
industry has enjoyed even 
greater government support 

Fierce competitive pressures, 
coupled with the growing costs 
of research and product devel- 
opment. have forced the UK 
industry - which Is stffi second 
to chemicals in the UK trade 
balance league, exporting 
about 70 per cent of its turn- 
over - to step up efforts to 
rationalise by forging new 

intormiH n nai partnerships, as 
well as ghftddiwg certain assets 
to focus on core activities. 

British Aerospace (BAe) has 
pursued its vigorous rationalis- 
ation and recovery strategy of 
returning the company to its 
basic defence and civil aero- 
space businesses. On the civil 
side, BAe is continuing to seek 

interna Hfwifll partnerships for 
both its turbopropeller and 
regional jet operations. 


The UK’s position as a global participant is at risk, says Paul Betts 

Industry seeks political help 


Share of the world Aerospace market 1991 H European comparisons of turnover 


'tapanpN) 



14 





After fading to form a joint 
regional jet venture with 
Taiwan last year, the UK group 
has pinned its hopes on form- 
ing a regional jet alliance with 
Fokker,the Dutch manufac- 
turer now controlled by Deut- 
sche Aerospace of Germany, in 
the tnrbopropeller sector, BAe 
has also had lengthy discus- 
sions with the Franco-Italian 
ATR consortium. 

Rationalisation; has also been 
intensified in SAC’S space and 
missiles businesses. The UK 
company has agreed to sell its 
space systems di vision to Mat . 
ra-Marconi, a joint venture 
between the French Matra 
company and the UK General 
Electric Company. BAe has 
also been negotiating with 
Matra to merge their respeo- 


European Aerospace employment 


B uSoyimn t gXlOi) 



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five guided weapons activities. 

BAe’s core defence aerospace 
operations to be the 

company’s nurfn profit centre. 


on the back of the group’s Germany. 

lucrative relationship with While there is broad consen- 

AwHa tmA Hu» strong SUS in fh«* UK OVBT Ru mfighte r, 

export performance of its the FLA project has created 


: as « 


Hawk fighter-trainer aircraft. 
BAe also expects its 20 pear cent 
stake in the European Airbus 
civil aircraft consortium to 
reap long-term dividends. 

But far BAe much will hinge 
in the Mure on the controver- 
sial Euroflghier 2000 pro- 
gramme, as well as on the com- 
pany’s involvement in the 
Future Large Aircraft (FLA) 
project, a European collabora- 
tive v e ntur e to build a new 
military transport aircraft, lbe 
UK has maintained its strong 
commitment to Eurofighter, 
aithnn gfi the programme for 
tte new advanced fi ghter iwn 
been dogged by controversy in 
Germany . 

While there is broad consen- 


deep divisions both within the 
government and the in d ustry. 
The issue centres on whether 

Britain should buy the new US 

Lockheed Hercules C-130J or 
the European FLA to replace 
the Royal Air Force’s ageing 
transport fleet 

The Lockheed camp has 
argued that its aircraft will be 
ready to meet the RAP's needs 
by 1996. while the FLA still 
faww uncertain development 
costs and will not be available 
rmtfl the next century. Lock- 
heed has also said that UK par- 
ticipation in the programme 
will be worth £2J2bn and 
secure 3£00 jobs in Britain. 

But BAe and its supporters 
have warned that the stakes 
am M g h, and that Ihe conse- 
quences would be dire if the 
UK did not participate in the 
European FLA project BAe 
has warned that its lead in 
wing design and production in 
Europe might be lost to Ger- 
many and France if it did not 
participate in the PLA pro- 
gramma There could also be 
serious implications over 
BAe’s role in Airbus, since the 
FLA could be built by the 
European civil aircraft consor- 
tium extending its activities 
Into the military sector. 

In frhft UK aero-engine indus- 
try, the big challenge for 
Rolls-Royce is the development 
of fts high-thrust Trent family 
of engines to power the new 
generation of large widebody 
airliners, which are expected to 
account for an increasingly 
large share of the total aircraft 
market during the next 20 
years. While the Trent pro- 
gramme has been a technical 
success, the problem for 


Rolls-Royce is that it has had 
to co ntinue investing heavily 
in the development of its new 
high-thrust engines at the 
game time as rationalising tin 
ffttnpany in the face of the 
industry’s downturn and the 
increasingly tough competition 
from its two IS rivals. General 
Electric and Pratt & Whitney. 

Rationalisa tion has also been 
a main feature of the UK aero- 
space components sector. 
Lucas has been restructuring 
its US aerospace operations, 
while expanding through joint 
ventures in the East growing 
Asia Pacific market. TI has 
absorbed Dowty, which In turn 
has forged an -Anglo French 
aircraft landing gear Joint ven- 
ture with Messier BugattL 

Overall, however, the UK 
aerospace industry warns that 
rationalisation, greater inter- 
national collaboration and sig- 
nificant productivity improve- 
ments cannot alone guarantee 
the sector’s long-term future. 

Unless the government is 
prepared to match the support 
in R&D in new aerospace tech- 
nologies and materials given 
by other countries to their 
industries, as well as more 
active export backing, there is 
a growing danger that the UK 
may see its position as a lead- 
ing global aerospace partici- 
pant severely undermined. - 

As the SBAC put it to the 
House of Commons select cam- . 
nuftee: “Failure to sustain ade- 
quate R&D investment to 
counter international competi- 
tion mean an inevitable 
erosion of UK capability - and 
once lost, the Industry’s lead- 
ing position could not be 
regained.” - 




T he French aerospace 
industry, which has been 
hit by falling orders dur- 
ing the past three years, hopes 
that by 1995-96 turnover will 
begin to improve. 

Some comfort was provided 
by Taiwan’s 1992 order for 60 
of Dassault's Mirage jets and 
1,500 of Matra’s Mica missiles. 
But, in general terms, the 
Taiwan contract provided only 
momentary relief, with new 
aerospace orders booked last 
year amounting to only 
FFrtXJbn, 19 per cent down on 
the Taiwan-inflated figure of 
1992 though only 4 per cent 
down an the 1991 level of new 
orders. 

Turnover fell last year by &5 
per cent to FFrllObn, (5211m) 
with the brunt felt In the 
aero-engine sector (down 12£ 
per cent) and by aircraft and 
missile makers (down 9.8 pm* 


cent), while avionics and 
equipment manufacturers 
escaped relatively lightly 
(down 42 per cent). Almost all 
companies are cutting back 
their work forces, or, as in the 
case of Airbus, patting them 
on short-time working. Serge 
Dassault, president of the 
group that bears his name and 
head of Gif as, the industry 
association, estimates French 
aerospace will have lost 15,000 
jobs over 199240. 

In profit until 1991, the 
French aerospace sector has, 
overall, been in the red sinoe 
then. The biggest money losers 
are state-owned: Aerospatiale, 
which cut its 1993 loss to 
FFrL42hn (from FFriL38bn a 
year earlier) but has this year 
had to get a PFrMm capital 
injection from the government 
to help reduce Its debt and 
fund promotion of its new 


France: Taiwan’s order for 60 Mirage jets provides momentary relief 

Hopes for a break in the clouds 


A340 series; Snecma, the 
aeroengine maker whose 1993 
loss increased slightly com- 
pared with 1992 to FFk804m an 
sharply lower turnover; and 
Thomson-CSF, the defence 
electronics specialist The lat- 
ter, in fact, «naijp an operating 
profit of around FFrlbn, 
which was wiped out by its 
unfortunate stake in Credit 
Lyonnais that r e quired it to 
assume losses and bad debt 
provisions of FFr3bn. 

All three companies are 
slated for privatisation, but 
the sale of Aerospatiale and 
Snecm a is some time oft. By 


contrast, private sector compa- 
nies, like Matra (part of the 
Lagaid&re group) and Dassault 
have fared better, partly 
because of Taiwan contracts. 

Bernard Nicolas, Gifas’ sec- 
retary-general, estimates that 
this year will see a similar &5 
per cent decline in French 
aerospace turnover, bat also a 
pick-up in export orders, espe- 
cially for Airbus and perhaps 
t hrou gh possible nri«ri1« sales 
to Sweden and helicopter sales 
to the UK. But he feels the 
French government does not 
always act in the best intmests 
of Us defence industry. In par- 


ticular, he is critical of the 
promise prance gav e Chin a 
not to seD any more o ffen sive 
weapons to Taiwan. WhSe this 
may have opened the door to 
the Chinese market to French 
dvfl contractors, he says sales- 
men for companies involved in 
the Taiwan sale still cannot 
get visas to visit China. 

The French aerospace indus- 
try, at least, benefit s from the 
fact that France is virtually 
the only country in the west or 
east which. Ear from awarding 
itself a peace dividend on the 
end of the Cold War, has 
decided to maintain defence 


spending in real terms. The 
government's military frame- 
work law for 1996-2000 sets a 
OJS per cent real increase in 
defence equipment spending 
far the first three years, and 
possibly more thereafter, 
depending on how the econ- 
omy jwr f n niw And tth sta r ts 

from a 1994 base • of 
FFrlOO.fim, which is higher 
B«n fa the UK or Germany. 
Bat Mr Nicolas notes that 

thg Rnllailirr W|W u n wm t lim 

resorted to a habit of the pre- 
vious socialist government by 
“freezing” FFr2 .51m of the 
1994 equipment budget. The 


Gifas director dm complains 
that tiie civil aviation portion 
of the 1994 budget only 
includes money for “re-im- 
bnrsaMe advances* for exist- 
ing prog ra mmes, not for new 
ones planned by Aerospatiale 
and Dassault. France, how- 
ever, remains a firm believer 
in this “transparent” form of 
direct aerospace subsidy, and 
from the boggedrdown talks 
with the US, it would Uke to 
see emerging an extension, of 
the 1992 US- European Union 
agreement to cover not just 
airframes, bnt also aero 
engines and e quipm ent. 

Space accounts for about 15 
per cent of French aerospace 
turnover, but its business fell 
last year by nearly 6 per cent 
However, Matra-Marconi 
Space, the Anglo-French joint 
venture, has just boosted its 
capability by buying British 


Aerospace's space business. 

Despite recurrent rumours 
of national mergers, of the 
fcfad that produced BAe or 
Deutsche Aerospace (Dasa), 
French companies have 
instead sought to cope with 
their industry’s present crisis 
by reaching out to foreign 
partners. Aerospatiale is nego- 
tiating with Dasa to create In 
missiles the sort of joint ven- 
ture they already have in heli- 
coptera; ' Thomson-CSF has 
recently capped its large num- 
ber of joint ventures and 
acqhUtions with the UK by 
announcing two joint ventures 
with Data on "smart” muni- 
tions and missile propulsion; 
and Matra Is on the verge of 
completing its long negotia- 
tions for a joint venture with 
BAe on missiles. 

David Buchan 


r.r- v 

ii.-- 

--~i .71" 


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FINANCIAL times 


FRIDAY SEPTEMBER 2 1994 


XIII 


AEROSPACE 13 



Equipment turnover in Enrape 

Current prices [Cbn) 



Space turnover in Empa 

Cunent prices (Obrd 



Germany: Quentin Peel discusses positive moves to revive the industry 

Important vote of confidence 



German manutactmrs have been frm backers of Lt tfttian&a’ s pr ivati sa tion 


Fot an industry undergoing its 
most severe crisis since the 
1960s, the appointment of Jtir- 
gen Schrempp as the next chief 
executive of Daimler-Benz 
amounts to a considerable vote 
of confidence. 

He is the man who, as head 
of Deutsche Aerospace (Dasa), 
the dominant force in the Ger- 
man aerospace industry, has 
been responsible for the radical 
reorganisation of much of the 
sector into one of Daimler's 
most important subsidiaries. 
And now, in the past 18 
months, he has been the mtm 
forced to embark on sweeping 
and painful cuts in that same 
o peration to cope with the 
downturn, drawing up plans to 
close six plants and lay off 
16^)00 workers. 

The truth is that the success 
or failure of Mr Schrempp’s 
overhaul is still in the balance, 
but Daimler, Germany’s 
mightiest industrial empire, 
has dearly decided that the job 
has been well domi 

Dasa, which rnrthwteg Deut- 
sche Aerospace Airbus, the 
German part of the Airbus 
Industrie consortium, and a 
half share in the Eurocopter 
consortium, as well as famous 
name s such as Messerschmidt- 
Bolkow-Blohm (MBB), the 
country’s main military air- 
craft contractor, a majority 
stake in Domier, manufacturer 
of medium-range turboprop air- 
craft, Fokker, its Dutch coun- 
terpart, and Motoren und Tur- 
binen Union (MTU), the 
aircraft engine manufacturer, 
will remain an essential part of 
the empire and its boss, Mr 
Schrempp, will succeed Edzard 
Reuter next year at its helm. 


The decision of the Daimler- 
Benz supervisory board in 
June coincided with the suc- 
cessful conclusion of Mr 
Schrempp’s negotiations with 
the trade unions at Dasa to 
close six of its 16 plants, and 
cut 10,300 of the 16,000. jobs it 
needs to shed by 1996. The last 
year has been traumatic for 
Dasa, as it has been for the 
rest of the aerospace sector. 

Overall employment in the 
sector stood at 78,600 on 
December 31, 1392, and fewer 
than 724)00 by the end of last 
year. At least 10 per cent more 
jobs will have been shed by the 
end of the present year, accord- 
ing to the calculations of the 
BDLI, the German aerospace 
and defiance industry federa- 
tion. The sharpest cuts have 
been in the military sector - 
down 13.8 per cent in 1993 - 
and in the space sector, down 
10.3 per cent in the year. 

As for turnover hi the indus- 
try, according to the BDLI fig- 
ures, it was down even more 
sharply, by 18 per cent from 
DM26.77bn to DM2L95bn in 
1992 alone. 

The sector was hit, like the 
industry worldwide, by the 
coincidence of a sharp reces- 
sion in civfl aviation and dras- 
tic cuts in defence spending, as 
governments sought to reap 
the dividends of the wwi of the 
cold war. ft has galvanised a 
traditionally secretive and 
somewhat self-satisfied indus- 
try In Germany into urgent 
public lobbying to protect its 
position, on the grounds that 
the country could lose its 
access to a vast area of vital 
high technology if it allows the 
aerospace sector to be margin- 


alised once again, as It was 
after the second world war. 

Mr Schrempp has been one 
Of the most Vigorous nainpaign- 
ers for more coherent and 
overt government support for 
the industry, alongside Wolf- 
gang Piller, his fellow Dasa 
director and president of the 
BDLI. Above all, they have 
argued that European govern- 
ments must be prepared to 


back the industry with the 
same level of indirect support 
- through defence spending, 
and subsidies for research and 
development - as the US gov- 
ernment does for its aerospace 
manufacturers. 

The recent deci s ion by the 
Genian government to back a 
DMl.2bn four-year research 
and development programme — 
to be half finanngd by the 


industry - was described by 
Mr Piller as a “first step” in 
the right direction. But he 
pointed out that in the US, the 
NASA budget for aerospace 
research had increased from 
8512m in 1991 to more than 
film in the current year, with 
a target of $L4bn by 1998. US 
Defence department spending 
on research and development 
in aerospace are estimated by 


the BDLI at around $1.4-1.6bn 
per year. Hitherto, the compa- 
rable sums in Germany added 
up to just DMi Rm a year. 

S paairing at the Wehrkunde 
security conference in Munich 
thi.g year. Mr Schrempp issued 
an urgent plea for fairer and 
more open competition 
between Europe and the US in 
armaments and aerospace 
industries. “We do not need a 


preference Europterme, which 
would eventually cut us off 
from developments in 
top-notch technology outside 
Europe." he argued. “What we 
need is a level playing field 
with our US competitors.” 

This meant, he argued, over- 
coming the national fragmen- 
tation of the European markets 
in defence and civil aerospace 
manufacture. And his whole 
strategy at Dasa has clearly 
been focused on that aim. 

In each sector, he has 
actively promoted cross-border 
co-operation. Not just in the 

Airbus consortium, but also in 
Eurocopter, the Franco-Ger- 
man joint venture set to start 
deliveries of its seven-seater, 
twin-engined light helicopter, 
the EC135, in 1996. He has 
pushed through the takeover 
of Fokker, the proudly inde- 
pendent Dutch aircraft manu- 
facturer, to rationalise produc- 
tion in the turboprop sector, 
and is now talking of possible 
collaboration in satellites and 
guided missiles, with France’s 
A&rospatiale. 

In spite of the painful and 
costly experience of the Euro- 
fighter project - still on track 
In spite of the German govern- 
ment's prevarication - Mr 
Schrempp is a vigorous sup- 
porter of the plan for a joint 
European project for the next 
generation of military trans- 
port aircraft, the so-called 
Future Large Aircraft (FLA). 

He used the industrial 
muscle of Daimler-Benz to 
force the German aerospace 
industry to mutch its competi- 
tors in Britain and France. 

Thus within the Airbus con- 
sortium, be fought strenuously 


to raise the German profile, 
succeeding In winning the con- 
tract for final assembly of the 
most recent A321 Airbus model 
for his own Hamburg plant. 
Previously ail Airbus aircraft 
were assembled at Toulouse. 

The importance of the move 
for the German industry was 
underlined by the ceremony in 
January, when Luf thansa the 
national carrier, became the 
first airline to take delivery of 
an A321. German manufactur- 
ers have been firm backers of 
Lufthansa's privatisation, on 
the grounds that a strong and 
profitable national airline is a 
vital underpinning for a strong 
national aerospace industry. 

However, Mr Schrempp's 
strategy at Dasa has also 
underlined his perception of 
the limitations of the European 
industry. He has pushed 
through the alliance between 
MTU and the US aero-engine 
giant Pratt and Whitney, in an 
effort to compete with the 
BMW-Rolls-Royce alliance. He 
was a prime mover behind the 
derision to open talks between 
Airbus and Boeing on joint 
development of the next gener- 
ation of super jumbos. And he 
has also brought about an alli- 
ance in a key market, by set- 
ting up a joint venture in satel- 
lite and space systems 
manufacture with fihina, 

So far, none of that frantic 
activity has shown up in the 
bottom line. Dasa suffered a 
record net loss of DM694m in 
1993, more than double that of 
the previous year. It will stlQ 
be in the red in the current 
year. But Mr Schrempp is ada- 
mant that it will be back in the 
blade by 1995. 


Italy: David Lane examines the consequences of recession 

Alenia slims its workforce 



Fausto Cerate does not foresee In cr e ase d defence spooring 


T imes are hard in RaTinn 
aerospace. Employment 
figures at Alenia, the 
state-controlled business that 
dominates the national indus- 
try, illustrate the severity of 
the recession over the past 
four years. 

Whim Aeritalia, with its pre- 
dominantly aero activities, 
merged with Selenia (mainly 
electronics and defence) to 
form Alenia at the end of 1990, 
the aggregate workforce was 
just over 30,000. Alenia now 
has 26,000 on its books, of 
whom 3,000 are currently draw- 
ing benefits from the cassa 
mtegrazume guadagni labour 
lay-off fund and will never 
return to the drawing offices 
and production lines. 

“I hope that we have seen 
the end of traumatic chang es 
and that the 23,000 effective 
workforce is the floor," says 
Fausto Cereti, Alenia's head. 
However, he recognises the 
generalised and continuing 
downward trend in Jobs. 
“Clearly, productivity Is more 
likely to rise than fall. Compet- 
itors do not stand still, and the 
industry throughout the world 
is reducing its workforce. 

“We are adapting our organi- 


sation and programmes to the 
enormous changes that the 
market is undergoing, both in 
terms of customers' spending 
levels and the entry of new 
suppliers," explains Mr CeretL 

He notes that Alenia has 
been suffering from a recession 
that has hit civil and defence 
activities simultaneously. ‘The 
crisis in civil aviation and the 
drop in aircraft orders has not 
been counterbalanced' by an 
increase in defence budgets. 
People have wanted the peace 
dividend since the fall of the 
Berlin Wall,” says Alenia's 
head. He does not foresee 
increased defence spending. 
“Improvements an the fefimnp 
side will came from reductions 
in production capacity.” 

Yet in February this year, 
Alenia’s Finmeccanica parent, 
a sub-holding of the IRI state 
holding corporation, completed 
the acquisition of the defence 
interests belo nging to the 
bankrupt EFIM state holding 
corporation. With Agusta heli- 
copters, Agnsta Omi, Oto 
Melara Officine Galileo and 
Breda Meccanica Bresciana 
now inescapably pert of Fin- 
meccanica, scope for further 
rationalisation seem greater. 


However, the outlook is not 
completely black. “The civil 
market is giving signs of 
upturn. The situation is far 
from brilliant, but it is better 
than two years ago,” observes 
Mr CeretL He believes that Ale- 
nia should start to see a 
healthier flow of orders around 
the beginning of ne»t year. 

Much is still expected from 
its su c c es sful ATR joint ven- 
ture with France's Aerospa- 
tiale. Finn orders for the ATR 
42 and ATR 72 regional com- 
muter aircraft stood at 422 at 
the end of last year, and fur- 
ther sales have since been 
achieved. "The programme is 
going vay well and is doing 
better than break even. The 
ATR 42 is being quietened by 
installing a six-b laded propel- 
ler, and we are considering 
completing the range with a 
cargo/military version and an 
82-seater," says Mr Cereti. 

Alenia’s head executive says 


that ATR would welcome new 
partners. “Italians would 
rather dtna in the company of 
10 than three. It is more conge- 


nial,” remarks Mr CeretL He 
adds that ATR is sounding out 
other aerospace companies, 
and that British Aerospace 


would closely fit the identikit 
of an ideal partner. 

Although Alenia puts the 
spotlight on the ATR pro- 
gramme, mundane business 
counts for more in money 
terms. The elderly G222 trans- 
porter and maintenance work 
provided 14 per cent of aero- 
space revenues last year, 
against the ATR’s 7 per cent 
Manufacture of aircraft compo- 
nents for Boeing. MDD and 
Airbus also contributed more 
to the accounts, with 9 per cent 
trf total aerospace revenues. 

Cooperation with other mak- 
ers is a characteristic of the 
Italian state concern. It is 
anomalous therefore that its 
role in Airbus is relatively 
small, recent and not risk-shar- 
ing. 

This is unlikely to change 
soon. “Airbus has difficulties 
in filling the capacity of its 
partners. But perhaps there 
will be space for Alenia in a 


new Airbus programme,” says 
Mr Cereti. 

Yet the ATR programme, the 
G222 transporter, aircraft 

maintenance and the manufac- 
ture of components together 
only contribute the same level 
of revenues as military aircraft 
alone. This sector is the big- 
gest contributor to Alenia's 
aerospace revenues, with 30 
per cent of the totaL The busi- 
ness overall is highly depen- 
dent on the AMX light tactical 
fighter, the Tornado, the F104 
upgrade and, most critical, the 
Eurafighter. 

Alenia is pinning its hopes 
on EFA, as Mr Cereti makes 
clear. About 15,000 workers 
will be employed on the pro- 
gramme when it is under way. 
He warns that EFA production 
must commence next year in 
order that design, development 
and manufacturing capability 
shall not be put at risk Alenia 
has an urgent need for orders 
to absorb capacity. 

Tt is not possible to close 
facilities and then re-open 
them when EFA is ready. But 
is there willingness to pay the 
costs of maintaining idle 
plant?” asks Mr CeretL 

Moreover, if or when EFA 


does enter production, Italy's 
state aerospace business will 
be working to a much smaller 
order book than it expected 
when the project started. “EFA 
numbers will be fewer than 
were initially foreseen. Italy 

plarmpri to take 180, and this 

was a minimum. There were 
expectations of farther pur- 
chases. Now Italy says it will 
take 130, and this is the maxi- 
mum," says Mr Cereti, antici- 
pating further cuts. 

What these critical times 
have done to Alenia’s profit 
and loss account is unclear. Its 
last accounts were for 1991, 
when it reported L56bn (£2Sm) 
post-tax profit on sales of 
L4.822bn. It has since been 
merged into Its Finmeccanica 
parent, which has not dis- 
closed figures far Alenia. 

With the consolidated profit 
and loss account of stock mar- 
ket-quoted Finmeccanica 
crashing from Ll86bn on 
of Lll,791bn in 1992 to just 
L33bn on sales of L10,772bn 
last year, its aerospace activi- 
ties were probably heavily In 
deficit. Indeed, Mr Cereti 
acknowledges that conditions 
were much better three or four 
years ago. 


Sweden: Hugh Camegy on recovery from the Gripen crash 

Partners hope for exports 


THE NETHERLANDS 

Breathing space for Fokker 


frightening spectacle last 
ust of Sweden’s new JAS 
1 ripen fighter aircraft veer- 
crazily out of control over 
naandfi of spectators and 
t hing pilotless in Stock- 
o’s inner suburbs could 
fiy have come at a worse 
i for its moniifaphigers. 
te aero plane that crashed 
nrrmhgr 39.102. the first to 
lelivered to the Swedish 
farce after a full year's 
y «nd heavy cost overruns 
ie development s chedu le of 

fighter. With the vital first 
>rt order still unsecured, 
crash appeared to be a 
Btrous setback for the four 

dish partners making the 

- Saab-Scania, Volvo Flyg- 
or, Ericsson Radar Blec- 
ics and FFV Aerotech, part 
te Celsius group, 
year later, however, the 
wrtlum believes it has 
Sy put the effects of the 
h behind it The export 
ik through has still not 
rad, but the JAS makers 
* its credentials as a high 
ormance, hut relatively 
cost all-purpose fighter can 
ure a large chunk ofthe 
ket for new combat aircraft 
the next six years. _ 
i official investigation into 
JAS crash - during which 
pilot ejected safely and, 
iculously, no 
nd was hurt - concluMa 
it was caused 
tmar^ to the con- 
system software that led 
■a conflict between the 
;’s commands and 
rol system signals . in 


other words, the aircraft did 
not do what the pilot told it to 
da 

The consortium introduced a 
new edition of the flight con- 
trol system software, and test 
flights were resumed last 
December. At the beginning of 
this year, a parliamentary com- 
mission set up to examine the 
JAS project gave it the green 
light to proceed. 

Hans Ahlinder, general man- 
ager of Saab Military Aircraft, 
says those within the industry 
in Sweden and abroad accept 
that the problems have been 
ironed out, and that there 
should be no significant sales 
fall-out from the crash. “Every- 
body has some crashes during 
aircraft development- There is 
no bad will for the JAS 39," he 
insists. 

The crash did add some 
SKrlOQm to the cost of develop- 
ment But tills was not a large 
amount in the context of the 
SKrSOJfon (£5m) cost of devel- 
oping and producing the first 
batch of 80 of the JAS, of 
which the consortium bore 
almost two thirds and the rest 
was borne by the state: 

The Swedish Air Force 
ordered a further 119 aircraft 
in 1992, in a deal worth 
SKrlSbn. The air force is being 
extensively restructured and 
slimmed to 16 squadrons, but 
all these are to he equipped 
with the JAS 38, giving the 
consortium the prospect of 
another 150 domestic orders. 

But for the consortium - 
especially Saab-Scania, easily 
the biggest partner - the key 


to a significant payback from 
the JAS project ties in the 
export market Here the ambi- 
tions target is to capture up to 
500 overseas sales by the end of 
the century. Just how ambi- 
tious this is can be gauged 
from the consortium's own pro- 
jections, which show original 
estimates of 3,000 worldwide 
combat aircraft replacements 
by the year 2000 falling to as 
low as L500. 

Mr Ahlinder believes the 500 
target remains realistic. He 
says the JAS 39 occupies a 
niche which will make it 
a l ii active to air forces looking 
for a combination of perfor- 
mance and economy. 

The JAS 39 is designed to be 
fully qualified for attack, 
fighter and reconnaissance 
missions, and is intended to be 
cheap to run and service. It is 
priced below the other new- 
generation fighters now under 
development - the Eurafighter 
2000 (a joint German, British. 
Spanish and Italian project), 
the French Rafale and the 
American F22. 

But, as Saab-Scania acknowl- 
edged in its latest annual 
report, tt will also have to com- 
pete with upgraded versions of 
older aircraft such as the F16 
and Fis. the French Mirage 

2000-5 and the ftiHarian MlgM 
and Su27. 

To strengthen the vital 
export push, the consortium 
has been in talks with British 
Aerospace for two years, seek- 
ing a deal to use BAe's world- 
wide marketing and product 
support network to help sell 


the JAS. From BAe’s point of 
view, the JAS would provide it 
with a new product to Gil the 

gap before the Rurofighter is in 

production. A decision on 
whether to proceed will be 
taken by the year’s end, 
according to Mr Ahlinder. 
Meanwhile. rimflar talks with 
other manufacturers have also 
been held, he says. 

For Saab-Scania, these are 
also anxious times for its civil- 
ian aircraft division as It cork 
fronts a weak market. The 
c om p any has carved out a sig- 
nificant share of the regional 
aircraft market, winning a 
near 40 per cent share of the 
world market for 2039 seat air- 
liners with its 35-sea ter Saab 
340 aircraft This year it has 
completed certification in the 
European Union and the US of 
its new 5058 sea ter Saab 2000, 
and is due to make its first five 
deliveries of the new airplan® 
- to Switzerland's Crossair. 

But last year, deliveries oE 
the 340 faQ to 28 from 49 in 
1992. and its share of world- 
wide deliveries in its segment 
fell from 49 to 36 per cent This 
year deliveries of both the 340 
and 2000 are not expected to 
exceed 20 - a long way below 
the target of a break-even level 
of 50 sales a year. 

Saab-Scania, however, is 
committed to the long term in 
the industry, believing that 
when the cytde turns, regional 
airliner s wifi be “one of the 
most expansive segments in 
the aircraft industry". It is con- 
vinced the 340 and 2000 are “in 

pace with the times”. 


Fokker, the Dutch aircraft 
manufacturer, recently 
secured some financial breath- 
ing space as it awaits the 
recovery an the international 
aviation market which it pre- 
dicts will emerge in 1996. 

In July, Deutsche Aerospace 
(DASA), the company’s Ger- 
man controlling shareholder, 
agreed to inject some FI 600m 
(3345m) into Fokker to shore 
up Its balance sheet 

The Dutch government, 
which owns a minority stake 
in Fokker, did not participate 
directly to the refinancing, bat 
it did approve a FI 400m “sale- 
and-lease-back” of the compa- 
ny’s technology to Rabobank, 
the big Dutch co-operative 
bank. 

In aD, the FI 11m will boost 
shareholders’ equity from just 
ll per cent of Fokker’s balance 
sheet to 27 per cent enabling 
the co m pany to cope with the 
malaise that continues to 
affect tiie industry. 

Fokker believes that demand 
for new aircraft wifi jack np in 
1996 and that total sales of air- 
craft in its segment of the mar- 
ket will reach 2,000 over the 
□ext 10 years. 

Meanwhile, Fokker, like 
other international aircraft 
makers, has been hit by slug- 
gish demand, fierce price com- 
petition and the need to shed 
employees and reduce output 
while the market’s weakness 
continues. 

In 1993. these problems sent 
Fokker into a record net loss 
of FI 460m from a slim profit 
of FI 20m the year before, and 


The company believes that demand 
will pick up in 1996 and that total 
sales in its segment of the market 
will reach 2,000 in the next 10 years 


turnover dropped to FI 3.71m 
from FI 4-lbn. 

Much of the red Ink was 
caused by a provision of 
FI 275m taken to cover the 
cost of selling aircraft at 
reduced prices to cut its stock. 

Since then, it has introduced 
a new policy of completing the 
assembly of only those aircraft 
that have been firmly ordered. 
The move is part of a wider 
project to enhance production 
efficiency and flexibility at the 
Company’s plant near Amster- 
>dam Schiphol Airport 

Fokker also took a charge of 
FI 90m to finance a farther 
round of Job cuts in the first 
half of 1994. 

The company’s workforce 
has fallen to below 10,000 
from more than 13,000 at the 
beginning of toe 1990s. 

The trend towards increased 
leasing, rather than outright 
sales, of aircraft has also 
strained Fokker’s balance 
sheet 

This partly reflects the lad 
of down payments that used to 
accompany a firm order for 
the purchase of an aircraft 

To meet file challenge of 
leasing; Fokker hopes to set cp 
a separate leasing company at 
arm's length from the com- 
pany but with the participa- 
tion of DASA and a couple of 


banks. 

The Dntch government 
winch is due to sell its remain- 
ing Fokker shares in less than 
three years' time, has already 
said that it will not be a share- 
holder of the tearing company. 

The Ally refinancing of Fok- 
ker, which must still be 
approved by DASA’s parent 
the Daimler-Benz group, is one 
of tiie most significant fruits 
so far of the April 1993 deal 
which brought the Dntch com- 
pany under German control. 

The deal, though contro- 
versial at the time in the 
Netherlands, was the result of 
the Dntch government's 
repeated assertion that it 
coaid no longer afford to 
finance Fokker’s future and 
that the company needed to 
find itself a strum; industrial 
partner. 

Since then, another 
important change at the 
company has been the arrival 
of a new chairman, Ben van 
Sclutik, a farmer executive in 
Mercedes-Benz's commercial 
vehicles business, to replace 
Erik-Jan Nederkoorn, the 
original architect of the 
German takeover who later 
became embroiled in a 
damaging bo ard ro o m row. 

At the same time, Fokker 
pressed ahead with the formal 


launch of its latest aircraft, 
the 79-seat Fokker 70, which 
joins its two existing 
aeroplanes, the Fokker 50 and 
the Fokker 100. 

Given the uncertain 
conditions prevailing on the 
aviation market, however, no 
derision has yet been taken on 
Fokker’s long-standing wish to 
develop a 130-seater Fokker 
130 . 

The certification process for 
the new Fokker 70 is under 
way. 

In July, the first 
series-produced aircraft had 
its maiden flight and then 
joined the test programme 
that had already begun with 
the prototype aircraft. 

The first delivery of a 
Fokker 70 to launch customer, 
Sempati Air of Indonesia, is 
expected in early 1995. Other 
orders have also been received 
from airlines in the US and 
Europe. 

The Fokker 70 Is based 
largely on the Fokker 100, and 
the two aircraft are being built 
on the same assembly line 
using tooling equipment and 
wo rking areas that malm such 
mixed production possible. 

This configuration is 
designed to increase 
flexibility. Indeed. In the 
second half of next year 
Fokker’s customers ordering 
either the Fokker 70 or Fokker 
100 can deride which of the 
two aeroplanes they want 
until 12 months before 
delivery. 

Ronald van de Krol 






XIV 



T he past few years have 
been tough ones for the 
aerospace industry. The 
commercial market has been 
languishing, with airlines 
farced to cut back an aircraft 
deliveries due to lower-than-an- 
ticipated passenger growth. 
The end of the cold war has led 
to wholesale cats in defence 
expenditure — in the pur- 
chase of military aircraft. 

The bright spot among the 
gloom has been the Asia 
Pacific region. Aerospace exec- 
utives realised long ago that 
the region was the area of 
growth: according to latest 
forecasts by Boeing. Asian air- 
lines are expected to acquire 
up to 3.00Q aircraft, valued at 
$245bn, between now and 3010. 
It is expected that, by the end 
of the century, Ada wlD sur- 
pass the QS as the world’s larg- 
est commercial jet market 
At the same time, many 
countries in the region - par- 
ticularly in south-east Asia - 
are strengthening their defence 
forces •mairing big expendi- 
tures on military aircraft 
‘This region is the salvation of 
our industry,” said a Singa- 
pore-based aerospace execu- 


tive. “If an aerospace company 
is not selling into this region, 
then its future has to be 
bleak." 

Countries in the region have 
realised that their Increased 
purchasing power has given 
them considerable influence 
over tire world's aerospace 
companies. Many countries 
have ambitions to develop 
their own aerospace industries. 
Purchases - whether of com- 
mercial. or military aircraft - 
are linked increasingly to tech- 
nology transfer and so-called 
“offset” arrangements, which 
guarantee that purchasing 
countries can participate in 
various stages of aircraft man- 
ufacture. 

A recent report by the US 
general accounting office, car- 
ried out for the Congressional 
committee on science, space 
and technology, found that, 
though countries in Asia are 
likely to be dependent on west- 
ern aeronautics technology for 
some years, the region is devel- 
oping a strong industry which 
could pose future problems for 
US manufacturers such as Boe- 
ing and McDonnell Douglas. 

“Once acquired, these tech- 


Asia Pacific is a bright spot for the industry, writes IGeran Cooke 


Indonesia points the way 


nologies can be honed and 
improved upon,” says the 
report. “Consequently, what 
starts as a subcontract to pro- 
duce latches on cargo doors, 
for instance, develops over 
time to fuselage, wing and avi- 
onics manufacturing.” 

Indonesia 's Pes awat Terbang 
Nusantara QPTN) is the only 
company in south-east Asia at 
present producing its own air- 
craft. It already manufactures 
the CN235 transport aircraft in 
co-operation with Casa of 
Spain. Tjiter tWg year, the 70- 
seat CN250 is doe to be rolled 
out of IPTN’s giant complex at 
Bandung, on Java. The CN2S0 
will be the first commercial 
aircraft to be designed and 
built entirely in Indonesia. 

Hie Indonesian economy is 
rapidly arpanrii^ g, The coun- 
try, the world's third mast pop- 
ulous, stretching across an 
area wider than the US coast 


to coast, has a growing appe- 
tite for aircraft 

Mr Bacharuddin Habibie, 
Indonesia's minister of 
research and technology and 
the drivin g for ce behind the 
growth of XPTN, is known in 
the aerospace industry as “Mr 
Offse t" Mr Hahftifo . who ha* 

many critics, both within and 
outside Indonesia, for the way 
he poured tthIHww into 
high-technology projects, has 
established a wide range of col- 
laborative agreements with for- 
eign companies, and is 

iteimwii Wiy inc reasing jmpnnt s 

of technology transfer. He is 
also determined to take on the 
western companies. 

“I have tried to sell EPTN air- 
craft In the US," says Mr Habi- 
bie. “The US says it's an open 
market, but it has so many 
built-in regulations that I 
never sell an aircraft there. 
This is why I have to set up a 


company in the US to produce, 
assemb le and sell oar aircraft 
there." 

Both Malaysia and Thailand 
are rapidly upgrading their 
aerospace industries. Increas- 
ing amrnnrta of nmnmwrtjfaT air- 
craft repair and maintenan ce 
can now be carried out in 
either Bangkok or Rnah Lum- 
pur. Again, both countries 
have that, if they are 

grufng tO buy and 

military aircraft, aerospace 
companies must, in return, 
establish local training 
manufacturing centres. 


R ecently McDonnell 
Douglas mitered into a 
wide-ranging agreement 
to help Malaysia develop its 
aerospace industry. Last year, 
Malaysia placed orders for 
eight F/A-18D ffghter jets from 
the US company, as part of its 
modernisation programme. 


Malaysia has also reached col- 
laborative manufacturing, 
maintenance and technology- 
transfer agreements with the 
Russians as a result of pur- 
chasing 18 MiG-298. 

Dr Vfthflmnii, Mal- 

aysia’s prime minister, has 
been stressing the need to 
develop an aerospace industry. 
Matayria plans to manufacture 
Initially two small twoseater 
aircraft and a 14-seater 
amphibious aircraft “These 
are undoubtedly begin- 
nings,” says Dr Mahathir, “but 
in a century's time we may 
have our Boeing and McDon- 
nell Douglas counte r pa r t... A 
'beginning has to be made.” 

Singapore was the first coun- 
try in south-east Asia to 
develop an aerospace Industry. 
More than so companies are 
involved in what is now a 
highly sophisticated aerospace 
sector. According to the gov- 


ernment’s economic develop- 
ment hoard (EDB), the aero- 
space industry grew by &2 per 
r*mf last year with a total out- 
put of S$L25hn <*8Mm). 

The facilities provided at 

Changi - consistently rated as 
one of the world's most effi- 
cient airports - plus Hie avail- 
ability of a highly skilled work- 
force - have been essential 
aiwnmfei in makin g Singapore 
into one of the key aircraft 
overhaul and maintMMmce cen- 
tres in the Asia Pacific region. 

While Singapore does not 
have amhitinna to produce its 
own aircraft, ft has achieved 
some notable manufacturing 
successes. For example. Airbus 
A320 cabin doors, A340 engine 
mounts and landing -gear doors . 
tor the new Boeing 777 are now 
manu fac tured on the island. 

However, Singapore faces 
constraints an manpower and 
space. Many aftimes and aero- 
space companies locating 
regional operations in Indon- 
esia, Malay sia or China, where 
wages are considerably lower. 

Moreover, competition does 
not come only from the regfon. 
“European companies are very, 
very hungry and are glaahirig 


prices to rodcJbottoan.” says an 
executive at one of Singapore's 
biggest aerospace companies. 
“At the end of the day, ft will 
be a case of who can give the 
best In price, turnaround time 
gr id quality.” 

Singapore's industrial plan- 
ners have a dual response to 
the challenges their aerospace 
industry faces. One way to 
combat the competition is to 
go into increasingly sophisti- 
cated high-tech areas of the 
industry. The other is to go 
regional - forming joint vat- 
turns with other countries and 
companies, particularly in 
labour-intensive areas. 

Such ventures have already : 
been formed In India. Late last 
year, Singapore Engineering, 
the wholly-owned subsidiary of 
Singapore Airlines, took a to- 
per cent stake in a $63m air- 
craft-repair and maintenance 
fadftty in China. Hot only- does .. 
this give' the Singapore' com- 
pany tire advantage of being 
able to recru it wor kers at Ires 
than two thirds the rates in the 
island republic; it will also give 
Singapore important access to 
the world’s fastest grdwtng 
aerospace market 


12 


0 $ rise 


.ft**-*'* 


Kjgran Cooke on the implications of Asia Pacific’s surge in air travel 

A test for control systems 


In June, Singapore Airlines 
(SIA) announced one of the 
world’s biggest aircraft orders. 
The national carrier would buy 
22 Boeing 747-400 Megatops and 
30 Airbus A340-300E aircraft, 
with a total price-tag of 
SlO^bn. 

SIA said the aircraft were 
needed because of expected 
passenger growth of between 8 
and 10 per cent a year in the 
coming decade. Mr Cheong 
Choong Kong, SIA’S manag in g 
director, described the order as 
“an expression of our faith in 
the long-tom health of the avi- 
ation industry and the promis- 
ing future of SIA.” 

Airlines throughout the Asia 
Pacific region are expanding to 
meet surging passenger 

deman d. The Tntarraitinnal Air 

Transport Association (lata) 
predicts that passenger num- 
bers in the region wOl double 
between now and 2000. 

While passenger traffic is 
growing by 5 per cent a year in 
North America and under 4 per 
cent a year in Europe, in Asia 
the figure Is closer to 9 per 
cent. Asian markets now 


account for about 25 per cent 
of world air travel. By early 
next century that figure is 
likely to exceed 40 per cent 

Several factors have caused 
the upsurge. The main stimu- 
lus has been the economic 
growth of most countries in 
the area. China's economy has 
been expanding by more than 
12 per cent a year. Singapore’s 
grew by nearly 10 per cent last 
year. The economies of Malay- 
sia *mri Thailand have expan- 
ded by more than 8 per cent in 
each of the last five years. 

Economic growth means 
more business activity and 
more business travel. It also 
means rising income levels, 
with people having greater 
opportunity to travel. In China 
alone air traffic increased by 35 
per cent in 1992, and by more 
than 20 per cent last year. 

Another factor influencing 
traffic levels has been the lift- 
ing of various travel restric- 
tions in many countries: citi- 
zens of Taiwan, South Korea 
and perhaps most significantly 
China no longer face severe 
cur tailments on movement out- 


side their countries. Business 
people trav ailing in the region 
face fewer immigration barri- 
ers. Intra-Asia tourism is now 
one of tire region’s key growth 
industries. 

Vietnam Airlines, fh«» state 
carrier, reports that it earned 
320,000 foreign passengers dur- 
ing tire first six nwnthg of this 
year - more than the total car- 
ried in 1992. 

Most of the region's carriers 
have ambitions expansion pro- 
grammes. However, they have 
not been immune to the prob- 
lems that have fanad airiinna 

elsewhere. Hong Kong-based 
Cathay Pacific reported a 24 
per wnt drop in net earnings 
last year. Malaysia Airlines’ 
pre-tax profits for the year to 
March 1994 fell by 90 per cent 
Over the same period, pre-tax 
profits at Singapore Airlines, 
consistently one of the world's 
most profitable carriers, dipped 
7.7 per cent to $555hl 

The profits slump was 
blamed on a combination of 
recession in western markets, 
phlS intense «mprt<Hnn and 
adverse currency factors. Many 


carriers now realise that their 
passenger forecasts and conse- 
quent expansion pfama of a few 
years ago were too o p t im istic. 

Offiranlc at Malay sia Airlines 
privately admit that a $10.6bn 
aircraft purchase pr ogra m me, 
which started in the early 
1990s, has put severe financial 
strain on the company. Malay- 
sia Airlines, Thai Airways, 
Philippine Airlines «nd Gar- 
uda, Indonesia's national car- 
rier, have an had to .defer or 
cancel some aircra ft deliveries. 

Asia's carriers have met 
increasing competition from 
outside the region. Faced with 
tougfr conditions at home, car- 
rims from the US, and to a 
lesser extent from Europe, 
have turned to the lucrative 
Ana marke t Asia’s big state- 
controlled carriers have also 
been hurt by competition from 
the region's new airlines, such 
as Eva in Taiwan and Asians 
in South Korea. 

In partial response to the 
growth in competition, the 
region’s larger carriers havB 
improved levels of service and 
introduced frequent Oyer pro- 





Hying Mgr cowpeMc n team Arirtinwirtm, inch m Ere Ak, hie Mr 


grammes. Passengers who 
have long complained that 
Asia has some of the most 
expensive air routes in the 
world are relieved to find carri- 
ers undercutting ticket costs. 

Other problems haunt the 
Asia Pacific's camera. Thomas 
S.WindmuIIer, assistant direc- 
tor of the Air Transport Action 
Group, believes the region’s 


irtitine indraft | y jg fo dang er of 
“strangling an its own suc- 
cess”. Mr Wmdmnller says that 
forecasts for passenger growth 
in the region are based on the 
assump tion that three will be 
sufficient airspace systems and 
airports capable of handling 
the upsurge in traffic. 

However, there is an urgent 
need far Asia Pacific govern- 


ments to standardise aerospace 
regulations and co-ordinate 
ti effiftMiitn ii systems. Once in 
the air, the passenger may be 
able to sit back and enjoy the 
service far which Asia’s air- 
lines are known.- But faritifitm 
in Hw air . are not n u itduri try 
infrastructure on thp ground. 

lata says only two of the 
main air-traffic hubs in the 


region - Singapore and Taipei 
- are capable of coping with 
expected passenger growth! 
Many countries in the region 
are either expanding existing 
airport facilities or building 
entirely new ones. However, 
until these are opened there is 
likely to be more congestion - 
and more frustration among 
passengers. 


• r%< -iT • 




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alar: • 

ten fur 



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i*. ... •• 

v. v • , 

is: 





Famborough 94 
2 000 flights ! 


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