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German piano makers 
trade on quality 

Page 17 



Population matters 

False alarm 
in Cairo 

Foreign Affairs, Page 14 


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Pope calls off 
Sarajevo visit 
as shells fall 

Pope John Paul postponed his planned visit to the 
Bosnian capital, Sarajevo, tomorrow after failing to 
wta. security guarantees from the Bosnian Serbs. 
The Vatican said the 74-year-oid Pontiff did not 
want to expose Sarajevans to "grave risks" or allow 
the purpose of the visit to be misconstrued con- 
tribute to tension. The postponement caynp on a day 
when Bosnian Serbs fired 11 artillery rounds inside 
Sarajevo’s weapons excl usi on wh ip 

Eastman Kodak, the US photographic products 
group, sold its clinical diagnostics business for Jibn 
to OS healthcare company Johnson & Johnson. The 
deal brings Kodak’s disposals since June to over 
$5.6bn. Page 17; Lex, Page 16 

RNetangeseHschaft shares fall 8%: Shares in 
the ailing German metal s , engineering and chemi- 
cals group, fell 8 per cent as investors reacted to 
reports of possible moves to strengthen the group’s 
share capital. Page 17 

Warrant for Mexican tycoon: Mexican 
businessman Carlos Cabal Feniche, bead of a big 
banking group and of fruit company Del Monte 
Fresh Produce, has been charged with fraud. The 
finance ministry took over his Ranoa Cremi 
Banco Unldn and their subsidiaries. 

Page 16 

Lacklustre recovery in Japan: Japan's central 
bank said a lacklustre economic recovery was 
under way in the country, hampered by a weak jobs 
market and a continued decline in corporate invest- 
ment Page 5 

Hong Kong airport not ready for 1997: 

Hong Kong admitted that the colony’s new airport 
would not be fully operational by the time B ritish 
rule comes to an end in 1997. Page 5 

US backs Russia’s peacekeeping role: 

Russia’s role as peace- 
keeper within the Com- 
monwealth of Indepen- 
dent States won US 
blessing yesterday. 

Madeleine Albright (left), 
US ambassador to the 
United Nations, approved 
the role -but she 
stressed that it was not 
an ideal solution for set- 
tling disputes in the 
region and insisted it 
was up to Russia to show that its peacekeeping 
activities were'benign. Page lfe 

LVMH of France, one of the world’s largest luxury 
businesses, increased interim net profits by 35 per 
cent to FFrL26bn ($236m) and said it was an course 
for full-year profits growth of 20 per cent Page 17 

Jobless in Germany: German unemployment 
edged up in August after two months of falls, but 
the federal labour office gave an upbeat assessment 
of employment prospects. Page 2 

Bowator, UK paper group, boosted six-month 
taxable profits before exceptionals by 15 per cent, 
helped by a recovery in its packaging and printing 
businesses. Headline profits rose to £105m 
(6162.75m) from £103m. Page 18; Lex, Page 16 

Coup plotter escaped: Former Cambodian 
interior minister Sin Song, who was arrested for 
plotting a foiled coup attempt last July, has escaped 
from custody with several of his guards, informa- 
tion minister Khieu Kanharith said. 

Nigerian union suspends strike: Sacked 
leaders of Nigeria’s striking oil unions formally 
suspended their pro-democracy stoppage. 

China opells out nuclear planac China plans 
to build more nuclear power plants, especially In 
boom coastal areas, Chinese nuclear offitialShen 
Wen Quan told a nuclear power conference in 
Vienna Shen said four 9Q0MW reactors were 
planned for Guangdong and two 1.000MW reactors 
at Liaoning. 

Hie Bank of Portugal lowered banks' minimum 
reserve requirements to 2 per cent of total deposits 
from 17 per cent The move was aimed at making 
Portuguese banks more competitive internationally. 

Anastasia did die with Tsar: Russian experts 
believe Anastasia, daughter of Tsar Nicholas n, was 
indeed murdered with her family by the Bolsheviks 
in 1918. But the remains of two other royal childr en 
were not among the bones found near the Urals city 
of Yekaterinburg in 1991. 

Okapi barbeque probe: Copenhagen University 
is investigating reports that students barbequed the 
meat of an okapi - a rare giraffe- like anima l - 
which died at the city’s zoo when it heard Wagner 
played at a nearby open air concert 


WEDNESDAY SEPTEMBER 7 1994 






■ STOCK MARKET INDICES 

FTSE100: B 

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FT-SE Emoted* 100 -13711)3 H 

FT-SE-A AU-Share 1GRS W 


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Federal Finis: 43* 

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Unionists condemn Dublin talks M Major refuses to hear PUP protest Monetary 

Irish PM meets Sinn Fein 

European 


By Tbn Coone in Dublin, 

Kevin Brown in London and 
Jimmy Bums tn Bedfast 

Seventy years of Irish history 
was turned on its head yesterday 
as Mr Albert Reynolds, the Irish 
prime minister , shook hands in 
Dublin with the Sinn F§in leader, 
Mr Gerry Adams, and Mr John 
Major ejected Mr Ian Paisley, 
leader of the hardline Democratic 
Unionist party, from a meeting in 
Dawning Street. 

Mr Reynolds’ meeting with Mr 
Adams marked the re-emergence 
of Sinn F&in, the political wing of 
the IRA, as a mainstream party 
for the first time since the Irish 
civil war in the 1920s. 

Together with Mr John Hume, 
the SDLP leader who attended 
the meeting, they said "We are at 
the beginning of a new era in 
which we are all totally and abso- 
lutely committed to democratic 
and peaceful methods of resolv- 
ing our political problems.” 




if fe 


i 



The meeting was condemned 

J. ■ 

by rightwing Conservative MPs 


and Unionist leaders, who 

Ki, 

claimed that Dublin had broken 

■t.pfe- 

an agreement not to meet Sinn 


F§in leaders for three months 


after a permanent ceasefire. 


However, Mr Major refused to 




'mSF ■ 


listen to protests from Mr Pais- 
ley, the single most popular 
Unionist politician in Northern 
Ireland, during a meeting at 
Downing Street As Mr Paisley 
attempted to read a prepared 
statement, Mr Major three times 
demanded an assurance that the 
DUP leader would accept his 
word that no secret deals had 
been done. 

When Mr Paisley refused to 
give such an assurance, Mr Major 
abruptly ended the meeting. Mr 
Michael Ancram, the Northern 
Ireland minister, said there 
would be no further meetings 
until Mr Paisley agreed to accept 
the prime minister’s word. 


A new era begins: (from left) Gerry Adams, Albert Reynolds and John Home seal with a handshake their historic meeting in Dublin nwu» 


The confrontation followed a 
meeting of senior British minis- 
ters, chaired by Mr Major, which 
agreed that the government 
would continue to demand guar- 
antees of a permanent IRA cease- 
fire before entering talks with 
Sinn F&in. 

This approach was broadly 
endorsed by Mr Tony Blair, the 
Labour leader, and Lord Holme, 
the Liberal Democrat spokesman 
an Northern Ireland, marking s' 
bipartisan rejection of the Irish 
government’s desire for fast prog- 
ress towards talks. Mr Blair said 
the government was “right to be 


cautious and not to engage in 
direct negotiations until a proper 
period has passed so that we can 
gauge whether the cessation of 
violence is indeed permanent" 

The British approach con- 
trasted sharply with the Dublin 
statement from Mr Reynolds, Mr 
Adams and Mr Hume. They said 
their objective was to build upon 
the IRA ceasefire announcement 
last week and to achieve “an 
equitable and lasting agreement” 
fbr Ireland’s future. They 
appealed to Unionists in North- 
ern Ireland to join in talks. 

Mr Reynolds said Mr Major 


wanted an assurance, “that it is 
for real that it is over”. He said: 
“1 hope that our statement here 
today representing the sense of 
the meeting, will indeed help him 
along that road.” 

He challenged his critics, say- 
ing: “To those people who say 
’Why so soon?* my answer has to 
be - it is never too soon to save a 
life, and never too soon to stop 
the killing." 

Unionist leaders reacted 
angrily to the meeting. Mr David 
Trimble, the Ulster Unionist MP 
for Upper Bann, said he was 
“astonished" it had taken place. 


Mr Trimble said. “For an Irish 
prime minister to meet with the 
leader of a subversive organisa- 
tion who has got his private 
army intact is really quite 
astounding." 

Republican sources in Belfast 
said yesterday that the IRA had 
no intention in the short to 
medium term of being more spe- 
cific about the meaning of its 
ceasefire for political reasons. 

Editorial comment. Page 15 
Not an issue for compromise. 
Page 15 
Lex, Page 16 


US displaces Japan as most competitive nation 


By Frances WDlams in Genova 

After eight years as undisputed 
economic pacesetter Japan has 
lost its ranking as the world's 
most competitive economy to the 
US. It has slipped to third place 
after Singapore, according to the 
latest World Competitiveness 
Report published today. 

Three other East Asian nations 
- Hong Kong, Malaysia and 
Taiwan - make the top 20 while 
Italy, with the world’s fifth larg- 
est economy, cranes an ignomini- 
ous 32nd out of 41 nations 
assessed - behind Turkey. Col- 
ombia and Indonesia. Germany, 
the highest rated European coun- 
try, comes fifth. 

The rankings, which attempt to 
measure the ability of a country 


to outperform its competitors, are 
compiled annually by the Swiss- 
based International Institute for 
Management Development and 
the World Economic Forum. 

This is the first time industria- 
lised and developing countries 
have been included in the same 
scoreboard, although China and 
Russia were excluded fbr lack of 
comparable information. 

Countries are tanked in eight 
areas, such as domestic economic 
strength, infrastructure and man- 
agement, on the basis of 381 crite- 
ria which range from computers 
per capita to alcohol and drug 
abuse. About a third of the data 
comes from a poll of 2,850 busi- 
ness executives worldwide. 

The US resurgence is attri- 
buted principally to the strong 


and early economic recovery, 
coupled with high scores on 
entrepreneurship, international- 
isation and “financial vitality". 

Japan's ranking has been hit 
by the worst economic recession 
in decades and inc reasing disaf- 
fection with the political system, 
although it continues to lead in 
management and technology. 

Second-placed Singapore, 
which has consistently topped 
the competitiveness rankings 
among developing countries, is 
rated first for the extent to which 
government policies help compet- 
itiveness, and for the quality of 
its labour force. 

Hong Kong, which came fourth 
overall, remains handicapped by 
uncertainties over China’s repos- 
session of the colony in 1997. 


Germany and Switzerland head 
a fairly stable European pack. 
Britain came 14th in the global 
league but moved up two places 
in the European rankings (from 
Uth to 9th) on the back of 
deregulation moves and eco- 
nomic recovery. 

Italy's performance reflects a 
gloomy opinion survey due to 
“the profound disenchantment of 


the Italian people with every- 
thing which touches their gov- 
ernment or public institutions”. 
On government policies, Italy 
was rated bottom among the 41 
nations. 

The latest rankings also show 
good performances by Chile. 
Mexico, Argentina and Colombia. 

Lean and mean. Page 4 


currency 
is nearer 

By Lionel Barber In Brussels 

Mr Alexandre I^inifaliissy. 
president of the European Mone- 
tary Institute, declared yesterday 
that EU member states had 
turned a comer and could realis- 
tically consider the prospect of a 
single European currency. 

Falling interest rates, low infla- 
tion. and close monetary co- 
ordination among EU central 
bonks had substantially reduced 
currency instability, Mr Inmfal- 
ussy said. In one or two years, 
there could be some “pleasant 
surprises" among countries aspir- 
ing to join the planned economic 
and monetary union. 

Mr Lamfalussy’s upbeat 
remarks to the European eco- 
nomic and social committee in 
Brussels came ahead of weekend 
talks among EU finance minis- 
ters. Their meeting in LLndau, 
near Lake Constance, will dis- 
cuss politically sensitive proce- 
dures for dealing with big 
national budget deficits, one of 
the most important tests for Emu 
membership. 

Germany, which holds the rota- 
ting EU presidency, has signalled 
it is unhappy with the European 
Commission recommendation to 
exclude Ireland from the “exces- 
sive deficits" rules. Luxembourg, 
the only country which meets 
Maastricht's deficit criteria, is 
also excluded. 

The Commission supports a 
generous interpretation of the 
debt rules because Ireland has in 
recent years held its annual bud- 
get deficit within the Maastricht 
target of 3 per cent of gross 
domestic product But Germany 
does not want to create a prece- 
dent that will make it easier for 
countries with bigger debt prob- 
lems, such as Italy, to become 
full Emu members. 

The EU’s secretive monetary 
committee, meeting in Brussels 
yesterday, was said to have 
approved Commission proposals 
for deficit reduction procedures 
by EU states other than Luxem- 
bourg and Ireland. 

Mr Lamfalussy steered clear of 
the controversy over proposals to 
create a “hard core" of five 

Continued on Page 16 
Tietmeyer warns on EU 
integration, Page 2 


Cart Conservative Management 
Lead to Financial Strength in 
Today’s Banking Environment? 


UK calls for technology to 
identify commercial ships 


By Charles Batchelor, 

Transport Correspondent, 
hi London 

The world’s commercial shipping 
fleet could be fitted with auto- 
matic identification systems by 
2002, allowing coastguard and 
rescue services to identify vessels 
and trace ships cansing pollution 
or accidents. 

The British government, 
hnpJrpri by many other shipping 
nations, has urged that ships be 
required to carry transponders - 
automatic electronic identifica- 
tion systems - under a proposal 
to the United Nations’ Interna- 
tional Maritime Organisation. 

The proposal put forward yes- 
terday may run into opposition 
from shipowners concerned at 
the cost of installing the equip- 
ment required and at what they 
regard as an infringement of 
their freedom of the seas. 

The equipment could be read 
from tiie shore to establish the 
identity, position, course and 
cargo of any vessel within range. 


Although ships are presently 
required to carry their name and 
home port on their hulls, many 
vessels are in effect anonymous 
while at sea. Aircraft have car- 
ried automatic identification 
equipment for the past 50 years. 

The initiative has been 
prompted by the sinking of a fish- 
ing vessel, the Ocean Hound, by 
an unidentified merchant ship in 
the English Channel in 1991 and 
by a recommendation of the UK’s 
Donaldson Inquiry into ship 
safety earlier this year. 

The inquiry said ships should 
he required to install identifica- 
tion systems which could be read 
by coastguards at any time with- 
out the intervention of the crew. 
At present the coastguard can 
call up a ship by radio but some 
captains refuse to answer. 

'Growing pressure from govern- 
ments and public opinion con- 
cerned at oil spills and other 
maritime accidents has led to 
calls for ships to made more 
traceable at sea. Of the 400450 
ships which pass through the 


CONTENTS 


Strait of Dover each day, only 20 
per cent can be identified from 
the shore. 

Any system adopted would 
have to be tamper-proof. A ship's 
master could switch off a tran- 
sponder but this would be taken 
as a sign that he was attempting 
to hide something. 

The UK Department of Trans- 
port has submitted proposals to a 
meeting in London this week of 
the IMO’s safety of navigation 
sub-committee. If it approves the 
proposal it would them go to the 
IMO’s maritime safety committee 
in December. But even if the idea 
obtains IMO backing it could 
take several years for member 
governments to ratify the pro- 
posal 

The department said it hoped 
that transponders would be 
required on ships of at least 5,000 
tons gross tonnage carrying oil, 
gas or other hazardous liquids 
from 1999. It would be extended 
to ships of 500 tons or more in 
2001 and to all other ships of 
more than 300 tons by 2002. 







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prudently, miking sure the product pruviiles consistent profitability and gen- 
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commitment to internally expanding its domestic priiate banking business.” 

Cautious in risk management. I [igli productivity. Traditional banking 
values that help build a strong financial institution. 

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LONDON - PARIS - FRANKFURT - NEW YORK - TOKYO 






FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 


NEWS: EUROPE 


Bundesbank president stokes fires of row over ‘variable geometry’ Union 


Tietmeyer warns over EU integration 


By Christopher Parfces in 
Frankfurt and our Foreign Staff 

Mr Hans Tietmeyer, 
Bundesbank president, has 
joined the heated debate over 
the pace and means of Euro- 
pean integration with a warn- 
ing against the dangers of 
exclusive clubs at the heart of 
the process. 

While arguing strongly for a 
multi-speed, concentric-circle 
formation, he said the question 
had to be addressed of whether 
this might divide Europe 
rather than bring it together. 

“Indeed, this danger could 
arise if countries ready to 
move into a circle closer to the 
centre were to be refused 
access," Mr Tietmeyer wrote in 
the latest issue of Euro pa- Ar- 
chiv, a foreign affairs maga- 
zine. “No circle should regard 
Itself as a closed society.” 

Mr Tietmeyer limited his list 
of candidates for circle mem- 
bership to an unspecified, 
closely knit group prepared 
to deepen their bonds quickly, 
other European Union mem- 
bers, participants in the 
European Economic Area and 
associated states from cen- 


tral and eastern Europe. 

Claiming a singlespeed pro- 
gramme would slow progress 
to that of the lowest common 
denominator and severely 
hamper future monetary and 
political union, he suggested 
several speeds could reconcile 
potential conflicts between 
efforts to widen European 
union and to deepen It 

“The fear that widening 
means integration comes to a 
standstill is based on the idea 
that each country must take 
each step at the same time. 
The slowest will then set the 
pace," Mr Tietmeyer said “But 
the logic of this argument will 
be broken if the multi-speed 
model is adopted.” 

Although he avoided the 
minefield uncovered last week 
when toa/ting lights of Chancel- 
lor Helmut Kohl’s Christian 
Democratic Union named Ger- 
many, France and Benelux as 
the core members of a “vari- 
able geometry” community, his 
intervention is likely to inten- 
sify a row from which Mr Kohl 
has tried to diwtanre himself. 

* Mr Wolfgang Sch&uble, sec- 
ond only to Mr Kohl in the 
CDU hierarchy, and a leading 



regard itself as dosed society” 

proponent of the party’s con- 
tentious “discussion paper" 
which started the storm, yes- 
terday repeated that if the pace 
was dictated by the speed of 
the “slowest ship in the con- 
voy”, union would never come 
about. A strong core built 
round France and Germany 
was necessary, he wrote in the 


popular Bfld newspaper. 

Mr Tietmeyer's comments 
coincided with fresh signs of 
confusion in the German gov- 
ernment over the policy docu- 
ment from the Christian Demo- 
crats, the dominant partner in 
the Bonn coalition. 

Mr JOrgen Chrobog, political 
director of the German foreign 
office, told a meeting on Mon- 
day of senior EU officials that 
the paper was not official, gov- 
ernment policy. His unusually 
strong statement was made at 
the beginning of a regular 
gathering of political directors 
in Brussels. Xt was intended to 
reinforce efforts by Mr Klaus 
KinkeL, foreign minister, to dis- 
tance himself from the CDU 
paper. 

Meanwhile Spain’s prime 
minister, Mr Felipe Gonzalez, 
who is abroad, Is to seek an 
early meeting in Bonn with 
Chancellor Kohl, according to 
Spanish press reports. This 
reflects both his fear that a 
two-tier Europe could be high 
on a Franco-German agenda 
when the Maastricht treaty is 
reviewed in 1996 and his 
self-appointed role as spokes- 
man for poorer EU partners. 


The Spanish premier has 
consistently argued that a two- 
track integration would derail 
the principle of political and 
economic union as envisaged 
by Maastricht. In order to 
deflect precisely the sort of pol- 
icies put forward by the CDU 
paper, Mr Gonzalez over the 
years has championed issues 
such as European citizenship 
and cohesion funds for the 
weaker EU economies. 

Meanwhile, the issue has 
forged an unusual degree of 
unity between members of the 
I talian government and opposi- 
tion. Mr Antonio Martino, the 
foreign minister, and Mr Piero 
Fassino in charge of foreign 
policy in the main opposition 
grouping, the former Commu- 
nist party of the Democratic 
Left, agreed that EU member- 
ship was in the national inter- 
est and where possible a bipar- 
tisan approach should be 
adopted to ensure Italy's posi- 
tion was properly defended. 

For the first time in public 
Mr Martino voiced a widely 
held I talian view that the CDU 
proposals were announced last 
week with essentially electoral 
considerations in mind. But 


even if this was the case, Mr 
Martina said the idea of Italy 
in the second league was 
wholly unacceptable. 

In Dublin yesterday, Mr Ber- 
tie Ahem, Irish finance minis- 
ter, said: “It would be a matter 
of grave concern If there were 
to be a tearaway group. Do 
people want to rewrite the cri- 
teria which have been accepted 
and voted on by the entire 
European Union? Either you 
fulfil those criteria of you 
don’t Ireland does." 

The Irish government fought 
- and lost - a five-month bat- 
tle against devaluation in 1992 
and 1993 precisely to keep 
Ireland's currency aligned to 
the hard currencies within the 
exchange rate mechanism on 
track for early incorporation 
into monetary union. 

In Portugal the governing 
Social Democrats of Mr AnOal 
Cavaco Silva, the prime minis- 
ter, appear to have been 
embarrassed by the CDU, with 
which they have been trying to 
forge strong ties. No one from 
the prime minister’s office or 
the foreign ministry was pre- 
pared to comment on the pro- 
posals yesterday. 


Germany’s job 
hopes improve 
and orders rise 


By Christopher Parkes 
in Frankfurt and 
Antonia Sharpe in London 

The Bonn government’s 
election campaign was given a 
further lift yesterday by an 
upbeat assessment of employ- 
ment prospects from the fed- 
eral labour office. 

Although the west German 
seasonally -adjusted jobless 
total rose last month for the 
first time since May, and the 
number of long-term unem- 
ployed reached a record high, a 
decline of 71,000 in the unad- 
justed Figure for the whole 
country was welcomed as 
“most pleasing” by Mr Berhard 
Jagoda, labour office president 

The seasonally-adjusted job- 
less total in the west rose 4JXJ0 
after falling 18.000 in July, 
while the unadjusted figure in 
the east (the only data pub- 
lished) fell 31,000. On the basis 
of unadjusted figures, the west- 
ern unemployment rate fell 
from 8 .3 to 83 per cent while 
the eastern rate declined from 
15.1 to 14.7 per cent 

However, the figures failed 
to support the German govern- 
ment bond market where 
yields on 10-yeor bonds rose to 
their highest level since Sep- 
tember 1992. The yield on the 
benchmark “bund" rose by 10 
basis points to 7% per cent on 
fears that the rapid recovery in 
the German economy would 
prevent the Bundesbank from 
cutting interest rates further. 

Mr Jagoda said the usual 
post-holiduy fall in unemploy- 
ment was far more marked 
than in earlier years, and the 
jobs market was responding 


West Germany 

Unempfoyroenl (m) 



-1999 94 

Sours® Qatostrown 


more quickly to the economic 
recovery than “experts" had 
forecast, 

Labour office officials said 
their own budget estimate of 
400,000 new benefit registra- 
tions this year was no longer 
valid, and expected farther 
improvements as the year 
advanced. The present pan- 
German unemployment total is 
some 250,000 higher than a 
year ago. 

August also saw a sharp fell 
in numbers working short-time 
and an increase in registered 
vacancies in both parts of the 
country. 

However, Mr Jagoda said he 
was concerned that a third of 
those without work had been 
jobless for more than a year, 
and urged companies to take 
on more employees rather than 
pay for overtime. 

Industrial order data for 
July, also published yesterday, 
showed the economy was still 
recovering, although at a more 



Rome split opens 
up on proposed 
corruption laws 


modest pace than in recent 
months. Manufacturing orders 
increased by a provisional 0.7 
per cent, following a revised 2.8 
per cent rise in June. While 
domestic demand rose 1.8 per 
cent, foreign bookings slipped 
by 1.2 per cent However, over- 
all orders were still 8 per cent 
higher than in July last year. 

The bond market Is expect- 


ing confirmation of the speed 
of Germany’s economic turn- 
around tomorrow when west 
German gross domestic prod- 
uct data for the second quarter 
is due to be published. Some 
analysts forecast a quarter-on- 
quarter expansion in excess of 
1 per cent, which would bring 
the yearly growth rate to close 
to 2 per cent 


By Robert Graham In Rome 

Proposals by the Milan 
judiciary to introduce new 
laws to cope with corruption 
are causing serious divisions 
within Italy’s right-wing coali- 
tion government 

Yesterday Mr Giuliano Fer- 
rara, the government spokes- 
man and minister in charge of 
relations with parliament, dis- 
missed the action of the Milan 
judiciary as an unconstitu- 
tional interference In the role 
of the legislature. 

This brought an immediate 
reply from Mr Roberto Maroni, 
the interior minister. He 
claimed Mian magistrates Had 
every right to contribute to 
solving a delicate national 
problem. 

Mr Ferrara, he claimed with 
some irony, was speaking as 
government spokesman bat 
not for the government which 
had yet to pronounce on the 
matter. 

Later, Mr SQvlo Berlusconi, 
the prime minister, weighed in 
to prevent the matter getting 
out of hand. He said he under- 
stood the motives prompting 
the anti-corruption magis- 
trates in Milan to suggest new 
laws; but he shared the 
reserves of several of his col- 
leagues over the judiciary’s 
direct involvement in politics. 

The proposals were 
advanced by Mr Antonio Dl 
Pietro, Milan’s best known 
anti-corruption magistrate, 
with tiie backing of Us col- 
leagues at an annual meeting 
of businessmen over the week- 
end. 

The suggestions centre ou 
providing greater incentives, 


through plea-bargaining, for 
people to confess to corrup- 
tion. The incentives are count- 
er-balanced by stiffer penalties 
to deter people from being 
Involved in corruption. 

The immediate reaction 
among politicians appeared to 
be one of relief. 

Finding a solution to the 
problem of apparently endless 
prosecutions for corruption 
has been a most sensitive issue 
for more than a year. All 
attempts have foundered over 
public unease that the politi- 
cians were being too lenient to 
their colleagues, businessmen 
and civil servants under inves- 
tigation. The Mian judiciary 
has also exercised an effective 
veto over any legislation it did 
not endorse. The move seems 
to be a neat way of sidestep- 
ping these hurdles. 

The approach was welcomed 
by the populist Northern 
League and the neo-fascist 
MSI/National Alliance, two 
components of the coalition. 
Mr Berlusconi’s Porza Italia 
was also supportive. The mag- 
istrates’ supporters underesti- 
mated the strength of those 
who felt the move overstepped 
the institutional role of the 
judiciary- Mr Ferrara said: 
“The Mil an public prosecutors’ 
office cannot become an 
agency for making laws. The 
Milan magistratnre has enor- 
mous merit but this should not 
permit its members to exceed 
their role.” 

The government is unlikely 
to take a formal position unto 
the judiciary presents its pro- 
posals to the government 

Editorial comment Page 15 


Treuhand sale clears way for big energy plans 


By Judy Dempsey in Berlin 

The ground has been laid for a 
massive investment pro- 
gramme in east Germany's 
energy sector after the Treu- 
hand privatisation agency yes- 
terday completed the sale of 
the region's electricity sector 
and the biggest brown coal- 
fields. 

After four years of negotia- 
tions. the Treuhand sold Veag. 
the former cast German elec- 
tricity monopoly, to a west 
German energy consortium led 
by RWE Energie, the country's 


largest utility, and which 
Includes Bayernwerk and 
PreussenElektra. At the same 
time, the agency sold Laubag , 
the giant coalfields which 
straddle the state of Branden- 
burg to a consortium headed 
by Rhelnbraun, the brown coal 
subsidiary of RWE. Laubag 
will supply Veag with coaL 
Under the terms of the agree- 
ment, the RWE consortium 
will pay DMSbn ($5.1bn) for 
Veag and invest DM23.3bn 
(S15bn) until 2012 during which 
time it will reduce the current 
work force from 12,700 to 6,700. 


Before German unification, 
Veag employed more than 
29,000 people. The investments 
will be targeted on upgrading 
existing power stations, introd- 
ucing strict environmental 
controls, and building six 
800MW power plants in eastern 
Germany. 

The Rheinbraun consortium, 
which paid DM2, lb □ for the 
Laubag fields, has agreed to 
invest DMSbn until 2015, reduc- 
ing in the meantime the cur- 
rent workforce from 12,000 to 
8,000. Annual brown coal pro- 
duction will range between 


50m and 55m tonnes. Until 
1989. Laubag was producing 
about 200m tonnes a year. 

The two contracts, signed 
just weeks before the federal 
elections, and five days before 
the state elections in Branden- 
burg and Saxony, means that 
the brown coal industry In 
eastern Germany will be saved. 
However, the privatisation of 
Veag had provoked a bitter dis- 
pute between east Germany’s 
cities which had opposed the 
sale to the west Goman utili- 
ties on the grounds that it 
would create a monopolistic 


structure in the region's 
energy sector. 

The Stromoertrog, or electric- 
ity contract of August 1990 
between the two former East 
and West german govern- 
ments, stipulated that the 
regional utilities In eastern 
Germany' would have to buy 70 
per cent of their power from 
Veag over the next 20 years. 
Despite arguments by the 
European Union that this con- 
tract would extend west Ger- 
many’s monopolistic energy 
structure to the east, Bonn was 
determined to Implement the 


Strom oer trog to secure a future 
for brown coal. 

However, the RWE and 
Rheinbraun consortia face a 
fundamental shift in energy 
consumption demands In east- 
ern Germany. The collapse of 
the region's manufacturing 
base has already led to a fell in 
brown coal's share of the pri- 
mary energy market from 62 
per cent in 1989 to about 40 per 
cent, while natural gas, which 
enjoyed only a 10 per cent 
share is expected to increase to 
about 23 per cent by the end of 
this decade. 


Russia will seek $4bn more from IMF 

John Lloyd reviews Moscow’s preparations for the next stage of economic reform 


TltE FINANCIAL TIMES 
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The Russian government is to 
push for a further loan of $4bn 
from the International Mone- 
tary Fund to support the stabi- 
lisation of its economy. It 
argues that Its success in 
bringing down inflation and 
curtailing the budget deficit 
this year entities it to move to 
the next stage of reform. 

This initiative, now being 
discussed intensively within 
the government, is planned to 
be launched at the IMF’s Mad- 
rid summit next month by Mr 
Victor Chernomyrdin, the 
prime minister, and Mr Alex- 
ander Shokhin, the deputy 
prime minister for the econ- 
omy, They will also ask for a 
19-year programme of debt 
repayments to be agreed with 
the London and Pans dubs of 


creditors - a normal conse- 
quence of an agreement on a 
stand-by loan. 

Government officials and 
advisers will meet senior IMF 
officials in Moscow this week 
in a round of talks aimed at 
determining Russia's readiness 
for the next stage of economic 
reform. "It's at a critical 
moment; a breakthrough 
moment,” sold one senior west- 
ern official concerned with 
Russian reform. "(The govern- 
ment] must avoid any tempta- 
tion to go for a quick fix ft 
must be careful not to fritter 
away the gains it has made but 
which could so easily be lost." 

The IMF mission will exam- 
ine the performance of the 
economy and especially the 
government's plans for next 


year’s budget - due to be pres- 
ented to the duma (lower 
house of parliament) later this 
month. On the results of that 
examination will depend the 
disbursement of the ®4bn. 
together with other western 
aid promised but not to be paid 
until certain criteria are met 

The budget outline rails for 
inflation to be reduced to 5 per 
cent a month In the middle of 
next year and to £5 per cent a 
month by the year's end. D uma 
members, who passed the 1994 
budget with a minimum of 
debate, are unlikely to be as 
accommodating this timp and a 
bruising encounter is expected. 

The IMF’s main concern is 
that the government has suc- 
ceeded in observing the tight 
guidelines agreed five months 


ago - after the Fund paid out a 
$1.5bn loan - only by cutting 

necessary expenditure and 
issuing promissory notes. How- 
ever, as western officials 
admit, the Fund and the Group 
of Seven leading industrial 
countries face a hard choice 
between insisting on tighter 
financial discipline and con- 
tinuing to support reform, even 
if it Is off track. 

A senior finance ministry 
official said yesterday that “the 
government has complied with 
the [IMF] programme, and It is 
the first time it has done so”. 
He said that fears or a new 
explosion of inflation following 
the extra credits agreed for 
agriculture and other sectors 
last month would not be fol- 
lowed by further loosening of 


financial discipline later this 
year. Instead, credits would be 
“nailed down once more”. 

There are now some dear 
signs of improvement in the 
economy, including figures 
showing that the service sector 
has leapt ahead, accounting for 
a larger share of gross domes- 
tic product than industrial out- 
put for the first time since the 
early Soviet period. 

But mushrooming debts 
among enterprises and lack of 
industrial restructuring are 
causing real worry among both 
Russian and foreign officials - 
though Mr Chernomyrdin ha* 
promised the issue will not be 
solved, as it has in the past, by 
balling out the nominally 
bankrupt corporations with 
more credits. 


EUROPEAN NEWS DIGEST 

Saint Gobain 
chief indicted 

Mr Jean-Louis Beffix head of the Saint Gobain glass group, 
was yesterday indicted by a magistrate inquiring Into allega- 
tions that 1 - Pont-i-Mousson. a pipe-making subsidiary, paid a 
FFr4.4m (£530,000) commission in 1988 to a Nantes politician to 
obt a in a water contract there. Saint Gobain said the investiga- 
ting magistrate. Mr Renaud van Ruymbeke, questioned Mr 
Pert? for five hours yesterday. "Considering that he had not 
got certain Information from subsidiaries in 'the Nantes 
affair’, Mr Ruymbeke thought it necessary to put the president 
of the group under investigation." the company said. For more 
than a year Mr Ruymbeke has been trying to track the 
commission which is said to have rea c h ed a Republican party 
councillor in Nantes via the Swiss bonk account of a local 
industrialist He has also tried to establish whether any of the 
money ended up with Mr GArard Loaguet, the trade and 
industry minister who presides over the Republican party. On 
the Paris stock exchange, where the indictment was 
announced only moments before yesterday's close. Saint- 
Gobain shares plummeted 23 francs, or 4 Jt per cent, to 638 
francs a share. David Buchan, Paris. 

Unions defeat Finnish move 

Finland's centre-right government has averted a threatened 
large-scale strike by withdrawing budget proposals for 1995 
that angered the trade unions. The coalition, facing parliamen- 
tary elections next March, decided not to propose a reduction 
in jobless benefits and the ending of tax deductability of union 
dues. Announcing the changes only a few hours before the 
draft budget was given to parliament, Mr Esko Aho, prime 
minister, said the proposals - which would have raised about 
FM550m (£70.5m) - would be replaced by other measures and 
that the budget deficit would not grow. The budget sets 
spending at FM195.6bn, with net borrowing at FM61bn, includ- 
ing extra funds for Finland’s prospective membership of the 
European Union on January 1. Following the government’s 
move, the executive of the Llm-member Central Organisation 
of Finnish Trade Unions said it would recommend the strike 
threat be withdrawn. Beater, Helsinki 

‘Decisive phase’ in Bosnia 

The Bosnian peace talks are reaching a “decisive phase”, Mr i 
Klaus KinkeL Germany’s foreign minister, said yesterday after 
1 he “contact group” comprising Russian, French, German, 
British and US officials held a special meeting In Berlin. Mr 
Kinkel said the contact group, led yesterday by the heads of 
the political directorates, must find a way to “bring the Bos- 
nian Serbs on board” and accept the peace plan already agreed 
by the Bosnian Croats and Moslems. He said time was running 
out as Washington was considering lifting the arms embargo, 
and there was pressure from Russia to lift sanctions Imposed 
on Serbia now that President Slobodan Milosevic had appar- 
ently severed economic ties with the Bosnian Serbs. Mr Kinkel 
added that he remained dlsapppointed that Mr Milosevic had 
still not agreed to allow United Nations observers to monitor 
the border between Serbia and eastern Bosnia. Judy Dempsey, 
Berlin. 

Portuguese bank move 

Portugal’s central bank said yesterday it would lows' the 
compulsory cash reserve requirement for banks from 17 per 
cent of customer liabilities to 2 per cent from November L The 
high reserve requirement was introduced in the 1980s as a 
means of draining liquidity from the banking system and 
holding down inflation. The reduction will equate Portuguese 
banks with their European Union counterparts. But existing 
reserves, estimated at Es2^00bn (£8.9bn), will be converted 
into special bonds with maturities of 2-13 years to prevent 
money markets being swamped by newly released funds. 
Bankers said the immediate effect would be neutral in terms 
of both remuneration and costa, but banks would be able to 
employ their funds more profitably over the medium term as 
the bonds matured. Banks will also be able to use the bonds as 
contributions to a deposit guarantee fund to be set up by the 
end of 1994. Peter Wise, Lisbon. 

Slovak state sales hitch 

The Slovak government has postponed final decisions on a 
range of privatisation proposals, involving state property 
worth up to Kcs250bn (£5.1 5b a), originally due to be consid- 
ered by yesterday. The government is now expected to study 
the proposals over the next three weeks, before a general 
election on September 30 and October I. About a quarter of the 
proposals involve privatisation through vouchers, which went 
on sale last Monday. Some projects have already been 
approved, and the government has said it is committed to 
pushing through as much of the programme as possible before 
the election. Vincent Boland, Prague 

Eurofighter report ‘misleading’ 

Mr Volker Rflhe, German defence minister, yesterday told the 
parliamentary defence committee that a report by the federal 
audit court which alleged overspending on the four-nation 
European fighter was "completely misleading" and insisted 
that the project was on course. 

The audit report has said the fighter is likely to cost DM15Qm 
(£62m) a piece, a figure which Mr Rflhe rejected. The defence 
ministry said it was still working to reduce the unit price of 
the Eurofighter from DM134m, in line with a 1992 agreement 
between the defence ministers of Germany, Britain, Italy and 
Spain. German industry most recently said the aircraft could 
be built for about DMI03m, Mr Rflhe said. The opposition 
Social Democratic party has repeatedly said it will withdraw 
from the project if it wins the October elections but some 
observers are doubtful about the party's pledge because of the 
number of jobs at stake. Mktuul Lbndemarm, Bonn 

Tirana verdict today 

Relations between Greece and Albania will be tested today 
when a court in Tirana passes sentence on five Albanian 
ethnic Greeks who are accused of spying for Athens. The trial 
threatens to trigger a crisis between the two countries. Athens 
accuses the authorities in Tirana of fabricating the charges In 
order to intimidate Albania’s Greek minority. Since the trial 
began on August 15, the Greek government has deported some 
40,000 illegal Albanian immigrants and blocked European 
Union financial aid to Albania. Greece has warned that further 
measures will be taken If the men are found guilty. All five 
defendants are members of the Omonia political movement 
which campaigns for Greek minority rights in Albania. Diplo- 
matic efforts to ease tensions between the two countries 
appear to have felled. A US envoy, Mr Richard Shifter, was 
sent to Tirana and Athens by President Bill Clinton over the 
weekend to urge conciliation and encourage the Albanian 
authorities to drop the case. James Whittington, Tirana. 

EU in talks with Africans 

The first European Union ministerial nwpting with the 11 
member states of the Southern African Development Commu- 
nity (SADG) ended yesterday in Berlin with broad agreement 
to set up working groups to promote closer trade, political, 
regional and economic contacts. However, Mr Festus Mogae, 
SADC chairman, said it was crucial that the EU decide 
whether it would support South Africa membership of the 
Lom6 Convention, which saves the other SADC countries 
duty-free access to the Union. Mr Manuel Marin, the Spanish 
EU commissioner, said the Union wanted to conclude a 
co-operation agreement with South Africa, but he admitted 
that there were “problems about whether South Africa would 
be linked to Lome”. Mr Kalre Mbuende, SADCs executive 
secretary, said: “South Africa Is rich . . . But South Africa is 
one of us. It has joined SADC on equal terms. We want South 
Africa to have relations with the EU. But that should not 
disqualify it from joining Lome or its integration Into the 
Southern African states.” Judy Dempsey, Berlin 




•■wor 





FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1 994 ★ 

~ NEWS: THE AM ERICAS 


Spain seeks liberal 
moves by Cubans 


Felipe Gonz&lez. Spam's prime 


US Congress 
draft legislation 
faces logjam 


Shock waves spread 
among the powerful 

Damian Fraser charts the troubles arising 
in Mexico from the Carlos Cabal affair 



Pedro Aspe: his ministry has taken over banks 


By Tom Bums in Madrid 

The Spanish government hopes 
that Mr Roberto Robaina, 
Cuba's foreign minister, will 
announce a set of deregulation 
measures for the domestic 
economy during a six-day visit 
to Spain from today. 

Officials are hoping that , in 
what would be a significant 
shift towards a market econ- 
omy in Cuba, the minister will 
give a timetable for the 
removal of curbs on self- 
employment in Cuba, with an 
undertaking to close state- 
owned industries which are no 
longer viable. 

Failure by Mr Robaina to do 
so could prompt Madrid to 
rethink its open-door policy 
towards Cuba. 

Employment deregulation is 
one of several policies that 
been pressed on the Cuban 
government by Mr Carlos Sol- 
chaga, Spanish former finance 
minis ter, who has visited 
Havana twice in the past year 
after an agreement by Mr 


By Angus Fbster in Sdo Paulo 

Mr Fernando Henrique 
Cardoso, front-runner for Bra- 
zil's presidential election next 
month, seems to have kept his 
lead in opinion polls despite 
the resignation at the weekend 
of lb- Rubens Ricupero as 
finance minister. 

According to a poll on Mon- 
day. the day after Mr Ricupero 
stepped down, Mr Cardoso’s 
support slipped from 45 per 
cent a week ago to 44 per cent, 
within the margin of error. His 
main opponent, Mr Luiz fnSdo 
Lola da Silva of the left-wing 
Workers' Party, remained 
steady at 23 per emit 

The Sao Paulo stock market 
took heart from the poll, and 
was up 356 per cent at noon 
yesterday, following Monday's 
heavy selling. 

Mr Ricupero resigned after a 
private conversation was 
broadcast on satellite TV. Dnr- 


mmister, to provide President 
Fidel Castro with a senior eco- 
nomic counsellor. 

Mr Solchaga, whose repre- 
sentatives have held working 
sessions in Havana between 
his trips, has consistently told 
the Cubans that their critical 
financial troubles owe far more 
to their state-controlled econ- 
omy than to the DS economic 
embargo, which Spain has 
always opposed. 

When it set up Mr Solchaga’s 
mission, Madrid believed a 
comprehensive package of eco- 
nomic reforms in Cuba would 
lead to a transition to political 
pluralism. Cuba is the m a * n 
recipient of Spanish aid in 
Latin America, in direct subsi- 
dies and export credits. Recent 
Spanish investment chiefly in 
tourism, is estimated at some 
S2Q0m (£129m). 

Even so, the former minis- 
ter's recommendations have 
been largely ignored and the 
Spanish government wary of 
accusations that it is legitimis- 


ing that he admitted the gov- 
ernment was backing Mr Car- 
doso and using its anti-infla- 
tion plan to win hfm votes. 

Mr Cardoso has since been 
heavily attacked by other can- 
didates who have called such 
government support unfair and 
questioned the ethics of his 
campaign. 

The poll, conducted by the 
Datafolha institute among 
10,532 electors, showed Mr Car- 
doso’s support still solid 
among poorer, less-educated 
voters. However, it also gave 
some hope to Mr da Silva. 
Among wealthier voters, Mr 
Cardoso's support fell by five 
percentage points to 47 per 
cent. Mr da Silva's backing 
among these increased by four 
points to 26 per cent Mr Car- 
doso's support also fell in met- 
ropolitan areas and in Brazil’s 
more prosperous south. 

Mr da Silva's advisers hope 
this trend wifi continue as 


mg Mr Castro’s government, 
now wants to relinquish its 
advisory role in favour of a 
panel of experts from the Inter- 
American Development Bank, 
the International Monetary 
Fund and the World Bank. 

Mr Javier Solano, the Span- 
ish foreign minister, who met 
Mr Castro in early August and 
will hold talks with Mr 
Robaina today, has hardened 
Spain’s diplomatic language, 
saying that economic liberalis- 
ation alone is insufficient and 
the Cuban government must 
take “urgent" and “rapid" 
steps towards democracy. 
Reuter adds in London: The 
UK government, welcoming 
recent changes in the Cuban 
economy, said yesterday it was 
sending a minister to Havana 
far the first time in 19 years. 

Mr lan Taylor, trade and 
technology minister, will make 
a three-day visit to the island 
from Monday, with a group of 
British businessmen. In an 
attempt to increase UK-Cuban 


more people become aware of 
Mr Ricupero's resignation and 
the reasons for it. 

The poll showed Mr Cardoso 
apt to win the election outright 
on October 3 because his sup- 
port still outstrips the com- 
bined support of his rivals. 
However, the poll suggested 
that, if a run-off between the 
two top candidates were 
needed on November 15, Mr 
Cardoso would gather 57 per 
cent support. Mr da Silva 30 
per cent 

Mr Cardoso's campaign 
organism wifi also have been 
pleased to see that support for 
the anti-frrflafcinn plan, pnd its 
chief component, the Real cur- 
rency, has continued to rise 
and now stands at 80 per cent; 

The candidate, when finance 
minister earlier this year, was 
responsible for negotiating the 
plan through Congress and his 
lead in the polls is largely due 
to the plan's popularity. 


By George Graham 
at Washington 

Powerful industry lobbies in 
the US, from banks to tele- 
phone companies, are anx- 
iously waiting for Congress to 
return to Washington next 
week, in order to see which of 
a wide array of bills will make 
their way through the legisla- 
tive mill before members go 
home again for the elections on 
November 8. 

A broad legislative agenda 
baa been held up by the cum- 
bersome wrangling over 
healthcare reform legislation. 


A wide array of bills 
has been held up by 
the cumbersome 
wrangling over 
healthcare reform 
legislation and 
partisan bickering 
over the crime bill 


which in turn was slowed 
down, before Congress broke 
for a summer recess two weeks 
ago, by partisan bickering over 
the crime ML 

The crime bill has now 
been passed, and aides in Con- 
gress are now n«simung that 
healthcare reform, if passed at 
all, will be a more modest 
package of incremental mea- 
sures than the monumental 
overhaul originally proposed 
by President Bin Clinton. 

But the health debate is still 
likely to take much of the time 
remaining to Congress, and it 
is still not dear which other 
bills will reach the calendar for 
final votes. 

Perhaps the closest to pas- 
sage is the inter-state banking 
bifi. which would allow banks 
for the first time to open 
branches freely outside their 
home states. Once inter-state 
branching had broken free of a 
long row over whether banks 
could sell insurance, it seemed 
fohave a dear run. But the 
conference to reconcile the ver- 
sions passed by the House of 
Representatives and the Senate 


has become embroiled in a bat- 
tle of Texan egos, with Senator 
Phil Gramm objecting to a 
minor provision included by 
Congressman Henry Gonzalez. 

Telecommunications reform 
has further to go before pas- 
sage. The House has passed a 
bill setting out the timetable 
and conditions for the Bell 
regional telephone companies 
to expand from local telephone 
service, to which they are now 
limited by a court anti-trust 
order, into long-distance, cable 
television and telephone equip- 
ment manufacturing. 

A similar bill has been 
drafted by the Senate com- 
merce committee but has not 
reached the Senate Door. Ran- 
corous battles are expected 
there over issues such as 
restrictions on the Bells' entry 
to the cable market One poten- 
tial deal-breaker is a require- 
ment that, if the Bells enter 
manufacturing, they do so in 
the US and use mostly US- 
made components, a measure 
which, the administration has 
warned, would conflict with 
the US obligations under GatL 

Reform of the Superfund law 
on the clean-up of hazardous 
waste sites also faces several 
hurdles before passage. Every- 
one agrees that reform is 
needed, but much disagree- 
ment remains over whether 
the specific changes proposed, 
would be effective, which are 
intended to reduce the amount 
of litigation, over who should 
pay for clean-ups. would make 
things better or worse. While 
the House Ways and Means 
committee reached a compro- 
mise ranntfi over a crucial 
tax an insurers to pay for past 
clean-ups, the Senate finance 
committee has yet to tackle the 
issue. 

Also pending are bills to 
reform campaign finance laws, 
overhaul the 1872 law on min- 
ing in government lands in the 
West, and revisions to the 
Clean Water Act In addition, 
ten of the 13 appropriations 
hflfa, which to theory must be 
completed before September 30 
if the government departments 
they cover are not to lose their 
spending power, have still to 
be wrapped up. 


T he decision by the 
Mexican government to 
order the arrest of Mr 
Carlos Cabal Peniche. and take 
over the country's seventh and 
eleventh largest banks, has 
sent shock waves through the 
country's business and finan- 
cial community. 

Mr Cabal is one of the coun- 
try’s most prominent business- 
men and. apart from control- 
ling an important financial 
group, owns by far the largest 
agro-business in Mexico. He 
has powerful friends in the 
Mexican government, and the 
move against him is expected 
to embarrass those who 
actively backed him- lent him 
money, and gave him authoris- 
ation to run not one but two 
banks. 

A government official said 
the finance ministry suspects 
three cases of illegal loans, 
ranging from $2Q0m (£l29m) to 
as much as STOOm, paid from 
Mr Cabal's banks to his private 
business interests, mainly 
Involving tbe purchase of 
Banca Cremi. 

However, the official did not 
exclude the possibility of more 
cases when a thorough audit 
was completed. 

The government moved 
against Mr Cabal in part to 
prevent his imminent purchase 
of Del Monte Foods, according 
to the official, with concerns 
that the near-$lbn transaction 
would be financed illegally. 

Mr Cabal had intended to re- 
merge Del Monte Foods with 
Del Monte Fresh Produce, 
which be and a group of inves- 
tors bought for about $50Qm to 
1992. 

Del Monte Fresh lost money 
last year, portly because of low 
international banana prices. 
Tbe finance ministry says it 
may claim the assets of Del 
Monte Fresh if the company 
turns out to have benefited ille- 
gally from its relationship with 
Banco Unidn and Banca Cremi. 

The adequacy of Mexico's 
financial supervision is expec- 
ted to come under scrutiny, fol- 
lowing the charges against Mr 
Cabal 

The finance ministry gave 


Mr Cabal authorisation to buy 
Unidn (then called BCH) in 
1991, citing his “administrative 
experience and integrity.” it 
gave him permission to take 
over Cremi and, earlier this 
year, to merge the two banks. 

Separately, Nafinsa, the state 
development bank, financed 25 
per cent of Mr Cabal's acquisi- 
tion of Del Monte Fresh. Mr 
Cabal's investor group includes 
current or former governors in 
the Mexican states of 
Campeche, Tabasco and Quin- 
tana Roo. 

The deals were approved 
despite the fact that Eastbrook, 
the former US trading house, 
has alleged in a civil suit that 
Mr Cabal and two former 
employees of Eastbrook 
directed more than $70m of 
loans to Mr Cabal's personal 
bank account or to shell com- 
panies between 1986 and 1991. 
Eastbrook claims just 630m 
was paid back. 

These financial dealings with 
Eastbrook, were being investi- 
gated until earlier this year by 
the US district attorney’s office 
to Manhattan. Mr Cabal's law- 
yer has denied that he was the 
target of an investigation by 
the attorney’s office. 

The Cabal case follows a 


fraud of more Sluum alleged to 
have been perpetrated by top 
executives nt Grupo Financier*} 
Havre, who are alleged to have 
created shell companies to bor- 
row money from Nafinsa. 

With Mexico's banks already 
suffering from high rates of 
default on their loaus. and 
from intense competition, the 
latest allegations come at a dif- 
ficult moment for the financial 
system. 

Officials strongly denied that 
the Cabal case would have any 
effect of the Mexican banking 
system. They said all of 
Mexico's banks have now been 
audited over the past eight 
months and that the only ones 
with suspected serious irregu- 
larities were Union and Cremi. 
They said that problems at 
other banks - of a different 
magnitude - had been sorted 
out 

Morgan Stanley, the US 
investment bank, advised Mr 
Cabal to bis planned acquisi- 
tion of Del Monte Foods. Salo- 
mon Brothers was to have 
managed an issuance of 5150m 
of high-yield debt on behalf of 
Mr Cabal which was regis- 
tered on August 29 with the US 
Securities and Exchange Com- 
mission. 


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FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 


NEWS: WORLD TRADE 


FARNBOROUGH AIR SHOW 


Correspondent, at 
Farnborough 

The International Air 
Transport Association (Tata), 
the airline industry trade 
organisation grouping more 
than 200 airlines, yesterday 
urged Asian-Pacific countries 
to convene a summit of trans- 
port minis ters to address the 
urgent issue of growing con- 
gestion at airports throughout 
the region. 

Inadequate ground and air 
traffic control infrastructure in 
Europe provoked a crisis in 
European air transport a few 
years ago. There was now a 
risk that a similar crisis could 
occur in the fast growing 
Asian-Pacific aviation market, 
warned Mr Pierre Jeanniot, the 
lata director-general, at the 
Farnborough Air Show in 
southern England. 

Air traffic is continuing to 
grow faster in the Asia-Pacific 
region than in any other mar - 
ket lata as well as the leading 
aircraft manufacturers. Boeing 


By Paul Betts 

The Franco-Italian ATR 
consortium. Europe's leading 
manufacturer of turbo-prop 
commuter aircraft, yesterday 
announced new orders worth 
more than $100m for its ATR42 
and ATR72 aircraft. 

The orders include two 
ATR72 aircraft, worth around 
826m. from the rapidly expand- 
ing London-Gatwick based air- 
liner City flier Express, a UK 
regional carrier operating 
under the British Airways 
name under a franchising 
agreement with BA. 

CSA, the Czech airline, also 
ordered two smaller ATR42 air- 
craft worth around $22m, while 
Avianova, an Alitalia subsid- 
iary, placed firm orders for 
three ATR72 and options for an 
additional four aircraft, worth 
a total of around $90m. The 
ATR consortium, which is 
jointly owned by Aerospatiale 


and Airbus, are forecasting 
annual air traffic growth aver- 
aging around 7 per cent over 
the next few years in the 
region, compared with overall 
world traffic growth of 5 per 
cent in the same period. 

Infrastructure both on the 
ground and the air was coming 
under “heavy strain” in some 
areas of the Asia-Pacific 
region, Mr Jeanniot said. 
Although a number of new air- 
ports were now opening in the 
area, he said these investments 
were already insufficient to 
cope with the expected growth 
of air travel in the region. 

Although Europe had started 
to address the problem of con- 
gestion, more efforts were also 
needed to harmonise and mod- 
ernise European air traffic con- 
trol systems. At the same time. 
Europe needed more airport 
infrastructure to cope with an 
expected increase in European 
air passenger numbers from 
394m this year to 653m by the 
turn of the century and as 
many as lbn by 2010, Mr Jean- 
niot said. In the longer term. 


of France and Alenia of Italy, 
says the Italian orders con- 
firmed the boom in regional air 
transport currently taking 
place in Italy. The UK Cityflier 
order is the first by a UK car- 
rier for the 66-seat ATR72 air- 
craft The two aircraft will be 
delivered in the livery of BA 
Express. 

Franchising is a growing 
trend in the European airline 
industry, with small regional 
niche carriers associating 
themselves with the marketing 
power and brand of large flag 
carriers to compete in the lib- 
eralised single European air- 
line market 

Cityflier, which already oper- 
ates five smaller ATR42 air- 
craft. plans to use its new 
ATR72s on the London-Gat- 
wick to Dublin routes as well 
as on Its London-Gatwick 
routes to Dflsseldorf, Jersey 
and Rotterdam. 

ATR officials also confirmed 


Europe would have to adopt a 
satellite-based air traffic con- 
trol management system which 
would be able to deliver double 
the capacity and drastically 
reduce the existing costs of the 
current European system. 

Mr Jeanniot also attacked 
government taxation policies 
on air transport, and especially 
the introduction in November 
of an airport departure tax in 
the UK. 

“This passenger duty will 
raise £32Sm for the UK Trea- 
sury. Taxes simply increase 
airline costs at a time when 
consumers are demanding 
lower fares," Mr Jeanniot said. 

The new UK airport tax was 
also attacked yesterday by Sir 
Colin Marshall, the British Air- 
ways chairman, who argued it 
would distort competition 
because it did not apply to 
other forms of transport 
including road, bus, rail and 
eventually Channel Tunnel 
high-speed trains services 
which will be competing 
directly against airline 
sendees. 


yesterday that the group was 
involved In talks to rationalise 
a European turbo-prop aircraft 
industry suffering from intense 
over capacity. 

Aerospatiale, the French 
ATR partner, has been in nego- 
tiations with British Aerospace 
over the possibility of creating 
a joint venture grouping ATR 
with BAEs jetstream turbo- 
prop operation. 

Aerospatiale also believes 
that ATR, which currently has 
a share of around 53 per cent of 
the world's turbo-prop market, 
could become the focus of a 
broad rationalisation of the 
European turbo-prop industry, 
grouping not only BAEs 
operations but eventually 
other European producers. 

■ Virgin Atlantic Airways is 
set to add two Airbus A340 
long-range, wide-bodied air- 
craft to its fleet as part of Its 
renewal and expansion 


BAe-Matra 
missile 
divisions 
nearer to 
merger deal 

By Bernard Gray 
at Farnborough 

Matra, the French missiles 
group, said yesterday that it 
expected negotiations with 
British Aerospace over the 
merger of their missile inter- 
ests to be completed by the 
end of this year. Mr Noel For- 
geard, head of Matra Defence 
and Space, said that such deals 
were a practical way for the 
European defence industry to 
respond positively to the con- 
solidation of US companies. 

Speaking at the Farnbor- 
ough Air Show, Mr Forgeard 
said that all operational and 
strategic issues had been 
resolved. However, he added 
that several technical prob- 
lems remained, inclnding 
those over differing account- 
ing standards. 

It is thought that BAe and 
Matra have agreed to form a 
50-50 joint venture of missile 
operations. However, as Mat- 
ra’s order book is larger than 
BAe’s, the British company 
will have to pay to gain an 
equal shareholding in the joint 
company. Strong disagree- 
ments over the size of the pay- 
ments are also thought to be 
blocking the deal, which has 
been under discussion for the 
past 18 months. 

Mr Forgeard said that unlike 
some defence industry leaders 
be thought that Europe had to 
respond to the consolidation 
and cost reduction currently 
going on in the US industry, 
but that Europeans also had to 
be realistic and accept that 
there were greater barriers to 
consolidation m Europe. 

Companies should accept 
that pooling interests into 
joint ventures, as with BAe- 
Matra, was a sensible next 
step, and that greater efforts 
had to be made to cut costs. 

■ Speaking at Farnborough, 
Mr Forgeard attacked Swe- 
den's recent decision to buy 
medium-range air-to-air mis- 
siles from Hughes of the US 
rather than Matra. He contra- 
dicted official Swedish reports 
which said that the French 
missiles were was less capable 
and more expensive than the 
US alternative. 


programme. 

US super-salesmanship 
discounts human rights 


lata warns Asia on 
airports congestion 

By Paul Betts, Aerospace 


ATR commuter aircraft 
attract $100m of orders 


BROWN'S 
BOOTY: 

the main 
deals 
in china 

US Secretary of Commerce 
Ron Brawn 


Company 

Venture 

Amount 

Wing Group 

LNG- fuelled power 
plant joint venture 

$ 2,200m 

AES Corp 

Power generation: 
joint venture 

$ 1,500m 

Entergy Corp f 
Lrppo Group 

Power plant extension: 
memorandum of understanefing 

$ 1,000m 

AT&T 

Telecommunications: 

contract 

$ 

500m 

WesBnghouse 

Power turbines and 
other equipment: contract 

5 

450m 

General Electric 

Power plant extension: 

Joint venture 

$ 

220m 

TRW Inc 

Television da- scramblers: 
contract 

S 

100m 

TRW fane 

Engine valves: 

memorandum of understanding 


n/a 

IBM Inc 

Data network: 
joint venture 

s- 

20m 

Pitney Bowes 

Postal equipment: 
contract 

s 

20m 

Sprint 

Information systems: 

contract 

s 

2m 


Source: FT 



By Tony Walker in Beijing and 
Nancy Dunne in Washington 

W hen the dust settled 
on last week's whirl- 
wind business mis- 
sion to China led by Mr Ron 
Brown, the US commerce sec- 
retary. it was clear that a frac- 
tious Sino-US relationship had 
been jolted in uew directions 
(hr removed from the human 
rights preoccupations of the 
early days of the Clinton 
administration. 

While critics looked askance 
on Mr Brown's old-fashioned 
cheer-leading on behalf of 
American companies, the US 
official was proclaiming a 
"new era” in Sino-US relations. 
“Commercial diplomacy" 
would now be paramount in 
guiding a difficult relationship. 

After fiddling over China pol- 
icy for its first year, the admin- 
istration appears to have 
decided that, in spite of its mis- 
givings about human rights 
abuses, it would have to com- 
pete more aggressively with its 
competitors in Europe and 
Asia for a share of the world's 
fastest growing market. 

How Far Washington's 
emphasis on super-salesman- 
ship will prove compatible 
with other objectives in its 
relations with Beijing remains 
to be seen. 

At one puint in a speech 
organised by the US-China 
Business Council, Mr Brown 
sounded more like a football 
coach than a government offi- 
cial. “We intend to compete in 
this market, and we intend to 
win," he said to applause from 
hundreds of American busi- 
nessmen. including the chief 
executive officers of 25 large 
corporations. Some of these 
corporation beads had signed 
deals with the Chinese contri- 
buting to a $6bn package of 
contracts and memoranda of 
understanding concluded dur- 
ing the Brown visit. 

It is hard to imagine a 
Republican administration 
embracing with greater enthu- 
siasm commercial possibilities 
in China. Mr Clinton, who had 
accused Mr George Bush of 
“coddling dictators" in Beijing, 
has dearly undergone some- 
thing of a change of heart 
since heady days on the presi- 
dential campaign trail. 


tn Hong Kong, Mr Robin 
Munro of Human Rights 
Watch/Asia said the Brown 
mission "vividly symbolises 
the drastic downplaying of 
human rights issues in US for- 
eign policy. Basically. China 
has won hands down on 
human rights." 

But defenders of the Clin- 
ton's administration's new 
approach to China say that 
critics have misconstrued the 
purpose of the Brown mission, 
and misrepresented American 
policy. They note that during 
the presidential campaign, Mr 
Clinton undertook to place 
commercial Issues at the cen- 
tre of foreign policy concerns. 

This approach had yielded 


the successful completion of 
negotiations on the North 
American Free Trade Agree- 
ment (Nafta), and the Uruguay 
Round which had cleared the 
way for the establishment of 
the World Trade Organisation, 
the successor to the General 
Agreement on Tariffs and 
Trade. 

The Clinton administration 
had been edging away from the 
crude weapon of Most 
Favoured Nation privileged 
trade access to the American 
market ever since a review erf 
China policy In the second half 
of last year resolved to “halt 
the downward spiral" of Sin- 
o-US relations. The disastrous 
visit to China in March of Mr 


Warren Christopher, the US 
secretary of state - China 
marked the occasion by harass- 
ing dissidents - added further 
impetus to moves within the 
administration to “de-Link” 
human rights from annual 
MFN renewal. 

Mr Clinton's announcement 
on May 27 that he was renew- 
ing MFN more or less uncondi- 
tionally - token sanctions were 
retained - was the culmination 
of the policy review begun in 
the middle of last year. 

But administration officials 
insist that in spite of charges 
that the administration has 
“flip-flopped" in Us China pol- 
icy there remains ample scope 
for a tough and principled 
stand on trade and other 
issues, including human 
rights. 

These officials note that 
China and the US, whose trade 
reached $39-3tm last year, are 
locked in difficult discussions 
on a range of questions. These 
include intellectual property 
rights (IPR) infringements; 
arguments over such issues as 
the transfer of missile technol- 
ogy; textile quotas; imports of 
agricultural products; access to 
China for service organisations 
such as banks; and Gatt 

Washington announced in 
June that China had been 
placed on “priority watch” for 
six months under special 301 
congressional legislation over 
continuing DPR abuses. US offi- 
cials in Beijing say that while 
China has armed itself with 
tile necessary rules and regula- 
tions to deal with infringe- 
ments, enforcement is lax. 

But in the end the real test 
of US resolve in its dealings 
with China will come In negoti- 
ations on Beijing’s application 
to re-join the Gatt The US has 
been the harbinger of a tough 
stance on conditions for Chi- 
na’s Gatt entry, arguing that a 
fast-growing economic power 
should be obliged to pay a sub- 
stantial price for admission. 

US negotiators insist that 
China be obliged to accord the 
same market access privileges 
to its fellow Gatt members as 
those it will receive itself. Bei- 
jing is arguing, however, that 
because China Is a developing 
country it should be granted 
special privileges for a lengthy 
transition phase. 


US and Japan struggle to 


the import impasse 



On defensive: Japanese trade minister Mr Ryutaro Hashtmoto 


escape 

By Mfohtyo Nakamoto in Tokyo 

A 70.3 per cent rise in 
Japanese vehicle 
imports last month 
should bring some cheer to US 
trade representative Mickey 
Kantor and Japanese trade 
minister Ryutaro Hashimoto as 
they meet in Washington today 
for critical talks on the bilat- 
eral framework negotiations. 

The Japan Automobile 
Importers Association yester- 
day total vehicle iuuprats 
were 23,391 last month. Of 
these 21,297 Imported cars 
accounted for 10.7 per cent of 
Japan's overall car sales. 
Imported vehicle sales for the 
year are expected to reach 
250,000. compared with 201,480 
last year. 

Ford , arguably the most 
aggressive exporter, though 
not the biggest, more than dou- 
bled its exports from America 
last August to 903. while 
Chrysler achieved a 72 per cent 
gain from a year earlier to 
1,007. The reversal in Ford's 
fortunes in Japan is precisely 
the kind of change which the 
framework talks were designed 
to bring about. 

But there is little hope in 
Japan that these changes will 
help to break the impasse in 
the trade talks by inspiring the 
US to soften its Ifemanris that 
Tokyo commit itself to ensur- 
ing greater foreign imports in 
certain priority markets. 

“There is a recognition in 
both the US and Japan that the 
framework talks are the most 
Important in manag in g the US- 
Japan relationship. Neverthe- 
less they have dragged on 
because of US insistence on a 
results-oriented approach to 
which Japan cannot agree," 
says a Japanese foreign minis- 
try official. 

Ever since the two countries 


agreed to launch the talks , the 
issue over what the Japanese 
government will or will not do 
to help foreign imports pene- 
trate Japan’s markets has been 
the central stumbling block to 
an agreement aimed at remov- 
ing a particularly prickly thorn 
in bilateral relations. 

As the fourth Japanese trade 
minister since the talks began 
meets his US counterpart, the 
issue of whether Tokyo will 
ensure a significant inwnaw in 
imports of foreign products 
and services ran g in g from cars 
and flat glass to insurance, and 
In government procurement of 
medical and telecoms equip- 
ment remains a formidable 
barrier to an agreement 

“The position of both sides is 
so far apart," concedes an offi- 


cial at Japan's Ministry of 
International Trade and Indus- 
try. 

Both sides have agreed that 
no specific deadline for conclu- 
sion of the talks should be set 
but on September 30 the US is 
committed to deriding whether 
or not to name Japan as an 
unfair trade partner and start 
sanctions procedures under the 
Super 301 trade bflL A US deci- 
sion against Japan could, in a 
worst case scenario, lead Japan 
to break off the talks, Japanese 

nffiriala have Said. 

Such an outcome would have 
serious repercussions on the 
foreign exchange markets 
which have severely punished 
the US dollar on any sign of 
bilateral discord on trade. 

“If there is a real collapse in 


the talks. I think there will be 
a sharp rise of the yen." says 
Mr Takaoobu Igarashi. market 
economist at Samva Bank. "If 
it is clear there Is no road to 
agreement, the yen, currently 
around Y99 to the dollar, could 
strengthen to Y96." he says. 

Neither would a discourag- 
ing outcome of this week's 
meetings do much political 
good for a hard-pressed Presi- 
dent Clinton or for the shaky 
coalition government of 
Japan's Prime Minister. Mr 
Tomiichi Murayama. 

The optimistic view is that 
given the risks involved, both 
s ides will work at all costs to 
avoid a farther rift in relations. 

Japanese authorities hope 
the US will agree to work out a 
partial deal that will at least 
enable the two to avoid a 
showdown and continue nego- 
tiating in areas where signifi- 
cant differences remain, nota- 
bly cars and car parts. 

Agreement could be reached 
on insurance and government 
procurement, which would 
send a positive signal to the 
rest of the world. 

"It is difficult to expect a 
comprehensive agreement but 
the impact ou world markets is 
so huge that we cannot afford 
a collapse.” says a Miti official 

But on the vital issue or gov- 
ernment procurement, the 
main point that precludes 
agreement is again whether or 
not Tokyo will commit itself to 
a “significant increase” in for- 
eign penetration or whether it 
will be allowed to get away 
with a promise of “change". 

The danger is that, given the 
incentive to reach some kind of 
agreement and avoid a further 
fall-out, the issue will be 
resolved by simply fudging the 
wording so that each side can 
read the agreement in a way 
that suits their purposes. 


Tokyo probes alleged cartel 


Australia and Japan will posh for a free trade pledge at the next 
summit of the Asian Pacific Economic Co-operation Forum in 
Indonesia in November, writes W illiam Dawkins in Tokyo. 

Mr Paul Keating, the Australian prime minister, said yester- 
day at the aid of a four-day visit to Japan, Australia's largest 
trade partner, that he thought Japan wanted “to see a commit- 
ment to trade liberalisation in the region”. 

Mr Keating's announcement came after talks with Mr Tomi- 
ichi Murayama, his Japanese counterpart The Australian leader 
gave firm backing fur Japan's attempt to become a permanent 
member of the UN security coimriL 
In return, Mr Murayama promised Australia that it would not 
be excluded form any trade accord between Tokyo and Washing- 
ton, believed to be the first such guarantee from a Japanese 
prime minister, said Australian officials. 


By Michiyo Nakamoto 

The Japanese Fair Trade 
Commission yesterday 
launched an investigation into 
more than 20 Japanese trading 
companies suspected of form- 
ing a cartel to decide which 
companies should win govern- 
ment contracts for overseas 
development aid projects. 

The FTC investigated the 
offices of leading companies, 
including Mitsubishi Corp, 
Marubeni and Itochu among 
others, citing a possible breach 
of Japan's fair-trade laws. 

The raid, which comes as 
top-level US and Japanese 
negotiators meet for talks con- 
cerning how to open Japan's 
markets to more foreign goods 
and services, is likely to sup- 
port US allegations of Japan's 
widespread unfair trading 
practices which prevent for- 


eign companies from winning a 
fair share of business. 

The suspicion of bid-rigging 
also coincides with recent US 
interest in winning more busi- 
ness stemming from Japanese 
overseas development aid. the 
largest in the world. 

Last year, Japan's ODA 


topped the international aid 
league for the third consecu- 
tive year at $ll.3bn, followed 
by the US with $9hn. 

Of that amount, approxi- 
mately $8hn was bilateral aid 
to specific countries, as 
opposed to aid given to multi- 
lateral organisations. 


Of Japan’s bilateral aid, 83 
per cent is untied and bids are 
open to foreign as well as Japa- 
nese companies. Most untied 
aid comprises yen loans which 
are directed towards large 
infrastructural projects such as 
the construction of dams. 

The latest allegation of cartel 
activity Involves the remaining 
17 per cent of tied aid, about 
820bn, which is grant-in-aid. 
For reasons of convenience, 
bidding for projects carried out 
on untied aid is open only to 
Japanese companies, mainly 
because the time span for con- 
ducting the bid and completing 
the project is usually restricted 
to one year. 

Companies involved yester- 
day expressed surprise at the 
FTC investigation. “We don't 
know what it is about so we 
don’t have any comment,” a 
Mitsubishi representative said. 


Lean and mean, but is it fair? 

Frances Williams questions a world competitiveness rankings report 


T he world competitive- 
ness rankings represent 
a bold if not necessarily 
accurate stab at identifying 
what makes an economy suc- 
cessful. 

This year for the first time, 
the compilers of the annual 
World Competitiveness 
Report*, the International 
Institute for Management 
Development (HUD) tn Lau- 
sanne and the Geneva-based 
World Economic Forum, have 
produced a consolidated rank- 
ing of 23 rich and 18 poor 
nations. This has proved both 
fascinating and puzding. 

It may come as no great sur- 
prise to see the U8 displace 
Japan as the world's most 
competitive economy. But does 
It really m ake sense to rank 
Singapore, with a population 
of less than 3m, above eco- 
nomic heavyweights such as 
Japan or Germany? 

Part of the problem relates 

to the desire to be fair to small 
economies. The report chooses 
to define competitiveness as 
“the ability of a country or a 
company to, proportionally, 
generate more wealth than 
competitors In world mar- 
kets*. 

Bat, by basing the definition 
on the idea of global rivalry, 
the Implication is that conn- 
tries become a bigger “threat” 
the higher their position. The 
rankings show East Asia 
already a competitive force to 
be reckoned with and the 
emergence of a “second wave” 
of competitors from Latin 
America. 

At an individual level, how- 
ever, the 1994 scoreboard pro- 
duces some odd results. For 
instance. Colombia (30th) is 
considered more competitive 
than Italy (32nd), even though 
Italy is a Group of Seven mem- 
ber with the world’s fifth larg- 
est economy and many compa- 
nies of world renown. 


Competitiveness: a ‘fascinating amt p u z zli n g* ranking 

World stsaxfing 1994 _ The G7 compared 

2 Singapore . 23 TbaSand 

.. : s 

A Hong Kong 25 Spam 


1994 


8 Swtaariand 27 Atgenfoa 

* v* 

- B Netherlands ' 29 Turtey 
to Sweden 

«ar 

■12 Austria : 33 Ffjfflpplnea 

14 UK .36 South Mica 

10 Canada 37 Greece 

.. 39 Hungay 

Vaueep^s'-.'' 

• 41 Poland 


31 Indonesia 




■ 20- 40 


».tor MinapwaanttHnHpiwrt 


Arguably, the rankings are 
too dependent on short-term 
factors - for instance, the 
country’s position In the eco- 
nomic cycle - and on the inev- 
itably Impressionistic results 
of an international survey of 
business executives which 
accounts for a third of the data 
used. (Only 2,851 question- 
naires were returned out of 
16.500). 

The US ascendancy over 
Japan largely reflects its early 
economic recovery while 
Japan has yet to emerge from 
its deepest recession in 
decades. 

Other problems arise with 
the choice of the 381 criteria, 
availability of comparable 
information and the way data 
are combined to produce the 
overall rankings. 

What does it mean when 
business executives classify 
people in their country as 
“lacking energy and enthusi- 


asm" or “having a positive 
attitude to life"? Interestingly, 
the most “positive** nations 
turn out to be Hong Kong. 
Korea, Singapore, Ireland «i«f 
Malaysia, with Colombia in 
8th plaee. 

The most lacking in energy 
and enthusiasm among the 41 
countries rated are, from bot- 
tom, the Czech Republic, Hun- 
gary, South Africa, Poland and 
Venezuela. Britain ranks 35th. 

Discussing the implications 
for changing competitiveness 
in a global economy, the 
report is in two minds. Prof 
Stephane Garelli, director of 
the World Competitiveness 
Project warns that market 
opening will tempt many 
industries to relocate in coun- 
tries with low-cost labour. 
Industrialised nations employ 
350m people at an average 
hourly wage of *18, he says. 
But industry has access to 
huge new markets such as 


China, the former Soviet 
Union, India and Mexico, with 
a labour force of 1,200m paid 
on average less than jjl 

“Today, an outflow of manu- 
facturing operations from 
western economies seems inev- 
itable," be says. Even more 
gloomily, he predicts service 
jobs will soon follow. 

Prof Thomas VoUmann, also 
of 1MD, takes a different view. 
“There is a common taisunder- 
ftawhng that competitiveness 
in manufacturing depends 
heavily on labour costs. For 
most products this is simply 
not the case". What Is needed 
is “enterprise transformation" 
directed^ at establishing mar- 
ket dominance, not indiscrimi- 
nate cost-cutting. “Lean and 
toean is too often anorexia,” 
he says. 


report 1994 . Available fn * 
OjtD. C&I007 Lausorme, fiat 4 
21 6J8 0707. SPrm. 




UUule t 
to 

.""PUSS, 



FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1 994 

Lacklustre recovery 
under way in Japan 


NEWS: INTERNATIONAL 


China wrings ‘water’ from statistics 


By WHfiam DawWns In Tokyo Japan 


A lacklustre economic 
recovery is under way in 
Japan, hampered by a weak 
jobs market «w>i a continued 
decline in corporate invest- 
ment. the Japanese central 
bank reported yesterday. 

Businesses are slightly more 
co nfi de n t than they expected 
to be last spring, stocks of 
unsold inventories are felling, 
and companies are Rnatng it 
easier to borrow money, the 
Bank of Japan's latest Tankan 
Quarterly survey of business 
conditions reveals. 

The survey “shows economic 
recovery quite clearly,” said 
Mr Yasushi Mieno, central 
bank governor. But Mr Kage- 
hide Kflku, head of the central 
bank’s research and statistics 
department, added: “This 
backs our judgment the econ- 
omy is heading to recovery, 
bat fells short of brushing oat 
economic fragility." 

The lacklustre upturn 
depicted by the most authorita- 
tive indicator of Japan's 
short-term economic outlook is 
expected to lessen the central 
bank’s inclination to tighten 
monetary policy, motivated by 
its fear of repeating the run- 
away rise in asset prices that 
foreshadowed the recession. 
Government bond prices 
strengthened in response. 

It ftielled speculation in 
Tokyo that the government’s 
Economic Planning Agency 
would declare an official end to 
the three-year recession when 
it publishes Its monthly eco- 
nomic report on Friday. 

The Tankan index of big 
manufacturers' business confi- 
dence improved from -SO in the 
previous review in May. to -89 
in August The index records 


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By Tony Walker in Bering 

There are lies, damned lies and. it 
seems, Chinese statistics. 

The China Information newspaper 
has reported that in 1993 alone there 
were 60,000 cases of “false statistics” 
reports in 30 provinces, regions and 
cities. 

A recent statistics supervision confer- 
ence held in Qingdao, southeast of Bei- 
jing, was told there was “a lot ctf water* 1 
in industrial output reports, that birth 
statistics were frequently understated 
and grain stockpiles were often exag- 
gerated. In an effort to guard against 
false reporting, a 1984 “Statistics Law” 
is being strengthened to include penal- 
ties for falsifying records. Among the 
main culprits are government officials 
seeking to add lustre to their perfor- 
mances as local administrators. 


Mr U Gang, deputy director of the 
Policy and Law office of the State Sta- 
tistical Bureau, said problems arose 
because “grassroots officials needed to 
fulfil production as well as birth control 
quotas in order to retain their positions 
or get promoted”. “Serious cases are 
under investigation," he added. “Those 
who add ’water’ to the statistics will be 
punished according to the law.” 

He said problems of false statistics 
had become more prevalent in this tran- 
sition phase In the Chinese economy 
from a centrally-planned system to a 
market-oriented one. “When the (1984) 
law was being drafted there was basi- 
cally only one economic structure in 
China. Today there are several eco- 
nomic systems.” 

But false and exaggerated statistics 
are no thing new in China. During the 
Great Leap Forward of the 1950s agri- 


cultural production figures were wildly 
exaggerated to conform with over- 
heated propaganda about the success of 
the communist system. In reality the 
Great Leap was a disaster and millions 
are believed to have starved to death as 
China's communist rulers were pro- 
claiming the triumph of the system. 

Western economists in Beijing say 
they approach Chinese statistics warily, 
but inflation figures appeared to be a 
reasonable reflection of price trends; 
although the “collection methods (of 
statistical information) is not what wc 
would expect in the west,” said one. 

The Qingdao conference heard that 
the two worst-offending provinces were 
Hebei and Shared in the north where 
20,000 cases of falsifying records had 
been uncovered in 1993. In one county 
in Hebei province the birth rate had 
been under-stated by half to avoid cen- 


sure over the failure of local officials tit 
curb population growth. 

Among the most prevalent examples 
of false reporting in Hebei and Shared 
was an over statement of per capita 

income of peasants. This was to avoid 
revealing the extent of impoverishment 
and allied to that the failure of local 
official to improve living standards. 

In other areas, such ns the wealthier 
coastal regions, peasant incomes were 
under-stated tu minimise tax. 

Speakers at the Qingdao conference 
criticised the present law which lacked 
“teeth" to punish violators; did not give 
representatives of the central Suite Sta- 
tistical Bureau the automatic right to 
“audit” local statistics; and w.n, inade- 
quate for the requirements of a rapidly 

evolving market economy, especially in 
the monitoring of a fast growing private 
sector. 


the change in the balance of 
companies citing a better and 
worse business outlook, from a 
sample of 10,000 businesses. 

It continues the Improve- 
ment shown in the previous 
s u r v ey in May. the first upturn 
in confidence recorded by the 
Tankan for five years. This 
suggests the recession touched 
bottom for the survey in the 
final quarter ctf last year. 

The balance of businesses 
reporting excessive inventories 
fell from 23 in May to 17 in 
August, while the ratio of 
those reporting that banks’ 
lending stance was getting 
easier rose from 17 to 19 over 
the name period. 

Bat the balance of compa- 
nies with surplus employees 
remains high at IS, compared 
with 26 in May. Another disap- 
pointment is that leading com- 
panies plan to cut capital 
investment by 3-8 per this 
year, only slightly less bad 
than the 3.7 per cent reduction 
forecast in May. Small busi- 
nesses are even more cautious, 
forecasting a 14.3 per cent 


investment fell this year. 

The recovery will be fragile 
and uneven, according to yes- 
terday’s review. Manufacturers 
expect a sharp profits rise this 
year, led by exports to the 
recovering economies of the US 
and Europe and helped by a 
moderate rise in domestic 
demand. But poorly-competi- 
tive service companies think 
profits win fell again, squeezed 
by increased compet it ion. 

For large manufacturers, 
that means a forecast 16.1 per 
emit rise in profits this year, 
better than the 149 per cent 
expected in the previous sur- 
vey, and a sharp tumround 
from their 263 per cent profits 
decline last year. They forecast 
a qnaii rise in sales this year, 
03 per emit, reflecting a fell in 
prices. 

Large service dompanles 
believe profits wffl fell 5.1 per 
emit this year, sli ghtly worse 
than the 5 per cent decline 
they were expecting In May 
and much worse than the 17J 
per earnings decKne t he y 
recorded in 1993. 


Philippine i Consensus near on abortion draft 


carte! 


HK airport ‘not ready for 1997’ 


* ■ 
■V V** '■ 

S — . 

'• -v £'.■ - * * 


The Hong Kong government 
yesterday ad m itted for the first 
time that the colony’s multi- 
billion dollar airport would not 
be folly operational by the 
time British rule comes to an 
end in mid-1997. Simon Holber- 
ton reports from Hang Kong. 

Mr Hank Townsend. chief 
executive of the Provisional 


Airport Authority, the govern- 
ment corporation responsible 
for the bufldmg of the airport, 
said contract s to build the ter- 
minal b uilding and services 
would not be finished until 
mid-way through 1997. 

Award of these contracts, 
which have a combined value 
Of about HK$8bn (£670m), was 


taken a step closer on Monday 
when the PAA said 16 interna- 
tional consortia of construction 
companies had qualified to bid. 

China appears to have 
balked at a UK request to 
approve financial agreements 
between the Hong Kang gov- 
ernment ?nd the PAA and the 
Mass Transit Railway. 


energy 
chief quits 

j Mr Deffin Lazaro, Philippine 
I energy secretary credited with 
resolving the country’s 
chronic electricity shortages, 
has resigned. President Fidel 
Ramos said yesterday, Jose 
Galang writes from Manila 

The resignation, from Sep- 
tember 20, came cm the eve of 
Mr Ramos's trip to Europe and 
the public listing today of 
Petron Corporation, which Mr 
Lazaro had steered to privati- 
sation. 

Mr Ramos said Mr Lazaro 
was leaving "because he has 
done Ms job and has fulfilled 
his c ommi tm ent*. He is known 
to have offered to resign as 
early as last June, reportedly 
because of conflicts with other 
energy officials. 

Mr Lazaro was given emer- 
gency powers in 1992 to tackle 
an energy crisis responsible 
for 10 to 12 hour daily ration- 
ing. Businesses losses ran to 
about 7bn pesos (£172m) a 
month. With the aid of emer- 
gency powers granted by Con- 
gress, the government was 
Mile to dip bureaucratic tan- 
gles and gave pri o rity to “fast- 
track" power stations. 

Mr Lazaro will be replaced 
by Mr Francisco Viray, presi- 
dent of the state-nm National 
Power Corporation, which , 
owns most of the country's I 
generating capacity. 


By Marie Nicholson In Cairo 


W 


• European and 
US delegates 
said lost night 
they hoped to 
clinch by today 
an effective 
consensus on 
one of the most 
controversial 
passages on 
abortion in the 
draft document of the Interna- 
tional Conference on Popula- 
tion Development, despite 
sustained Vatican opposition. 

Approval of the section, 
which urges governments to 
“deal openly and forthrightly 
with unsafe abortion as a 
mqjor public health concern" 


would be a victory for western 
and other participants at the 
conference, determined to win 
the broadest possible consen- 
sus behind its final document. 

Many such representatives 
also believe the religious row 
over abortion which has domi- 
nated the meeting threatened 
to obscure the thrust of the 
document, which aims to pro- 
vide a broad-based global pro- 
gramme for population stabilis- 
ation into the next century. 

Mr Tony Baldry, British for- 
eign ftffire minister, said “very 
considerable progress is being 
made”, an the tex t. adding that 
he believed the controversial 
lamgimgp would win approval 
during last night's session. EU 
delegates said a version of the 


text already contained in the 
draft, and which states that “in 
no case should abortion be pro- 
moted as a method of family 
planning” was winning “broad 
consensus”. 

Both Mr Baldry and Mr Tim- 
othy Wirtta. US assistant 
undersecretary for global 
affairs, said progress had also 
been made in talks with 
Islamic and Roman Catholic 
countries in agreeing on lan- 
guage which had been inter- 
preted as condoning homosexu- 
ality and advocating adol- 
escent and extra-marital sex. 

Passage of the contentious 
abortion text would, however, 
be only the first round in what 
most delegates believe will be 
tough negotiations in the next 


few days. The Vatican yester- 
day issued .i statement m 
which it repeated its absolute 
objection tu nburtiun. saying 
that while it recognised many 
women suffered “difficulties" 
in pregnancies, "such difficul- 
ties do nut warrant the viola- 
tion to the right tu life". 

The Holy See “cannot give 
explicit or implicit support tu 
those parts of the document 
regarding abortion." the state- 
ment said. Vatican delegates 
were yesterday busy on the 
floor of the main committee 
room rallying opposition to the 
text. They were yanking out 
Catholic delegates and getting 
them in a corner - there was a 
lot of strong-arm tactics.” said 
one African delegate. 


Syria warns Israel over Golan 


By Roger Matthews, 

Mkkfla East Editor 

Syria warned Israel yesterday 
that it was a waste of time to 
talk about a partial withdrawal 
from the occupied Golan 
Heights, and said no Middle 
East peace agreement would 
last unless it was fair, balanced 
and mmpiwlimiilw. 

Mr Farcrnq al-Shara, Syrian 
foreign minister, an an official 
visit to Tendon accused Israel 
of trying to gam as much as 
possible from the negotiations. 


while seeking to deny Arab 
aspirations. “Such an unbal- 
anced solution would not sur- 
vive. It would be a truce, not a 
lasting peace," he said. Total 
Israeli withdrawal from the 
Golan area had to precede the 
normalisation of relations, he 
insisted. “You cannot have 
normal relations while your 
land is still occupied." 

. Israel has demanded Syria 
provide evidence of its pledge 
to establish fall diplomatic 
relations before it would indi- 
cate how much of the Golan it 


was willing to withdraw from. 
But Mr Shara warned that the 
longer it took Israel to pull out 
of the Golan, the longer would 
be the delay in establishing 
normal relations. 

He hit out at Mr Yassir Ara- 
fat, Palestine Liberation 
Organisation chairman, and 
King Hussein of Jordan for 
“killing” the joint Arab 
approach to peace negotiations 
by signing separate agree- 
ments with Israel. “King Hus- 
sein participated in killing the 
Arab coordination, but it was 


Arafat's Oslo agreement which 
made him do it," Mr Shara 
said. Unless the West wanted a 
resumption of the civil war in 
Beirut there was no question of 
Lebanon signing a separate 
deal with Israel. 

During talks with Mr Doug- 
las Hurd. UK foreign secretary, 
Mr Shara appealed for an end 
to the European Union’s arms 
embargo against Syria and for 
a more active European role in 
the peace process. Syria was 
still optimistic about an even- 
tual agreement, he added. 


Of course we are glad 28 million of you 
chose to fly with us this year. It must mean 
you like us. 


. l9 Lifc-*4 







6 


FINANCIAL TIMES 


v. 



WEDNESDAY SEPTEMBER 7 1994 


NEWS: UK 


Poor car sales to private buyers deflate fears of inflationary consumer boom 

Data signal investment upturn 


By Gilian Tett and Kevfri Done 

The increasingly healthy 
nature of the UK economic 
recovery was highlighted yes- 
terday, after official figures 
showed that manufacturing 
output rose to its highest level 
for almost four years in July. 

With much of this growth 
coming from factories produc- 
ing raw materials for industry 
and goods for investment, the 
data provided further hints 
that economic recovery is 
Increasingly shifting away 
from consumer spending and 
towards a more investment 
driven upturn. 

Meanwhile, in a development 
that suggested that there is lit- 
tle sign of an inflationary con- 
sumer boom in sight, industry 


figures yesterday showed that 
car sales to private buyers 
were well below expectkms in 
August. 

Mr Eddie George, governor 
of the Bank of England, and 
Mr Kenneth Clarke, chancellor 
of the exchequer, will meet for 
their regular monthly mone- 
tary meeting today and are 
expected to discuss whether 
base rates should rise to curb 
inflationary pressures gener- 
ated by this growth. But in 
spite of City assumptions that 
interest rates will rise this 
year, the recent benign eco- 
nomic data has left analysts 
Increasingly doubtful that 
rates will change today. 

The Central Statistical Office 
yesterday said that manufac- 
turing output rose by a season- 


ally adjusted 0.4 per cent in 
July, compared to June, and 
now stands only 2 per cent 
below its last peak in March 
1990. Measured on a three 
monthly basis - a better guide 
to the trend - output rose L3 
per cent in the three months to 
July, compared to the previous 
three months, This yesterday 
led the CSO to revise its trend 
estimate for the annual growth 
rate to 5 per cent, up Grom the 
■L5 per cent growth previously 
estimated. 

However, the level of overall 
industrial production, which 
also includes the utilities and 
energy sectors, remained 
unchanged in June compared 
to July. The reason for this 
was that manufacturing 
growth was offset by a fall in 


North Sea production due to 
maintenance work, according 
to the CSO. 

The Treasury yesterday wel- 
comed the data and noted that 
whereas the consumer sector 
had previously provided much 
of the economic growth, the 
investment and raw materials 
sectors were now outpacing 
the consumer industries. 

Investment goods output 
grew 0.7 per cent in the three 
months to July, compared to 
the previous three months, 
with a strong performance 
firom the electronics sector. 
The output of the intermediate 
goods sector, which provides 
fuel and materials for industry, 
grew 2.7 per cent in this period. 
Consumer industries’ output, 
however, grew by only 0.4 per 


cent, with falls recorded in 
cars and clothing. 

This weaker performance 
was echoed yesterday by fig- 
ures that showed that new UK 
car registrations in August, the 
most important new car sales 
month of the year, rose by only 
2.8 per cent year-on -year to 
452^66. 

The total was well below ear- 
lier motor industry forecasts 
for registrations of 475,000 to 
500,000. By contrast registra- 
tions of new commercial 
vehicles rose last month by 
19.9 per cent year-on-year. 

“The underlying confidence 
of many private customers 
re mains fragile,” said Mr Ernie 
Thompson, chief executive of 
the Society of Motor Manufac- 
turers and Traders. 


Asthma 
seen as 
danger in 
workplace 

By Cftve Cookson, 

Science Editor 

Asthma is an increasingly 
serious occupational Illness, 
with more than 1,000 workers 
developing the disease every 
year in Britain, scientists from 
the Health and Safety Execu- 
tive told the British Associa- 
tion meeting. 

The H5E unveiled a twofold 
strategy for fighting occupa- 
tional asthma: new guidance 
for employers to control “sensi- 
tisers" that cause the disease, 
coupled with research to 
develop tests for quick diagno- 
sis of asthma in the workplace. 

Dr Andrew Curran, a senior 
H5E scientist, said exposure to 
sensitisers at work was caus- 
ing asthma In Increasing num- 
bers of people who had never 
suffered from the disease in 
childhood. 

Asthma results from a com- 
bination of gwiptir susceptibil- 
ity and environmental expo- 
sure. For reasons that 
scientists do not understand, it 
is becoming more common 
among the general population 
as well as in the workplace. 

“Occupational asthma 
doesn't just cause a bit of a 
wheeze and a cough,” Dr Cur- 
ran said. “It can be completely 
debilitating, causing a signifi- 
cant reduction in the quality of 
life in those who suffer from it, 
and in extreme cases it has 
been known to cause death." 

Two hundred different sub- 
stances are known to cause 
occupational asthma. They fall 
into two broad categories, 
according to Dr Curran. 

One type of sensitiser con- 
sists of large molecules and 
organic dust particles. Workers 
in food processing and fanning 
are particularly vulnerable to 
these. 

The second category of sensi- 
tiser consists of small rhemirsi 
molecules. These include iso- 
cyanates used in spray paints, 
acid anhydrides used by the 
electronics industry in curing 
epoxy resins and (times from 
soldering. 

• A new type of microscope, 
which can not only “see” indi- 
vidual atoms but also manipu- 
late them, could have immense 
applications in making elec- 
tronic circuits on the smallest 
scale possible. 

Dr Bernard Richardson, a 
physicist at the University of 
Wales, Cardiff, told the British 
Association that scanning tun- 
nelling microscopy enabled sci- 
entists “to home in and pick up 
individual atoms." 

The electronics industry is 
experimenting with writing cir- 
cuits by STM. That could pro- 
duce silicon chips with lines 10 
times thinner than those made 
with today's technology. 



Swan Hunter on the Tyne, with just one ship docked for work, was once at the centre of the world's busiest shipbuilding community. 


Private sector warning on 
profits from public projects 


By Andrew Taylor, 

Construction Correspondent 

Rates of return on privately 
financed infrastructure pro- 
jects will need to be 10-15 per 
cent if schemes are to proceed, 
the government was warned 
yesterday by one of Britain’s 
biggest construction compa- 
nies. 

Mr Joe Dwyer, chief execu- 
tive of Wimpey, said that the 
expectations of potential inves- 
tors of a reasonable rate of 
return remained higher than 
that of ministers. 

“The gap between us has 
narrowed but it needs to be 
closed further If investors are 
to be persuaded to support 
these projects ” said Mr Dwyer. 

Contractors such as Wimpey 
have taken the lead in bidding 


individually and forming con- 
sortia to tender bids for pri- 
vately financed roads, rail- 
ways, hospitals prisons and 
student accommodation. 

Mr Dwyer said: “In spite of a 
lot of activity very few 
schemes have started. We need 
some positive examples if 
investors are to he persuaded 
that the rewards win be worth 
the risk." 

Investors would expect 
higher internal rates of return 
than the 3 or 4 per cent expec- 
ted by utilities. 

“There is a lot of risk 
involved if contractors and 
investors are to expected to 
take on the liability for the 
cost of a prison riot when they 
might have no control on what 
prisoners they took.” said Mr 
Dwyer. 


He expected that the first 
privately financed schemes to 
go ahead would be smaller pro- 
jects, such as prisons and hos- 
pitals rather than very large 
road and rail schemes. 

Large transport schemes 
often involved complex plan- 
ning and political issues which 
made them difficult to cost and 
involved higher risk for inves- 
tors. 

Wimpey however is bidding 
for four privately financed 
road schemes, costing a total of 
£380m announced last month. 

Mr Dwyer said: "It is clear 
that government, given the 
state of the public borrowing 
requirement, has no choice but 
to go down this route. What 
needs to be sorted out is what 
rate of return is reasonable for 
investors to expect" 


TUC moves towards European 
style code for rights at work 


By David Goodhart, 

Labour Erftor 

The European Court 
judgments in June requiring 
UK employers to consult with 
employee representatives on 
redundancies and business 
transfers, even where they do 
uot recognise unions, could 
transform worker consultation 
in Britain accenting to a TUC 
legal judgment 
The judgment from Profes- 
sor Lord Wedderbum, states 
that companies will not be able 
to call up and then dissolve 
committees for consultation at 


wilL Such vehicles for consul- 
tation will require adequate 
resources and proper indepen- 
dence from the employer. 

The government is currently 
wrestling with how to imple- 
ment the European judgment 
with the least inconvenience to 
business. A derision is expec- 
ted within the next few 
months. 

The Wedderbum analysis is 
included in an interim report 
which was yesterday strongly 
supported by the TUC, the 
umbrella organisation for trade 
unions, at its annual Congress 
in Blackpool. 


The report takes another sig- 
nificant step towards TUC 
acceptance of continental 
European-style rights at work 
and works councils, but 
attempts to combine that with 
an important role for onion 
organisation. 

Mr Bill Morris, general secre- 
tary of the TGWU general 
union, introducing the interim 
report, said: “We cannot 
import a model from another 
country whose tradition or 
industrial relations is different 
from ours — Neither can we say 
they have nothing to teach us", 
he said. 


Survival 
for Swans 
‘remote’ 


By Chris TTghe 

The prospects of selling Swan 
Hunter, - the Tyneside ship- 
builder in receivership since 
May 1993 are now remote, 
receivers Price Waterhouse 
said yesterday. 

Mr Gordon Horsfield, joint 
receiver, said there were at 
this stage no serious bidders; 
continuing expressions of 
interest had yet to torn into 
offers clearly backed by funds. 

Price Waterhouse, he said, 
would now begin looking at 
offers received for parts of the 
business, in parallel with any 
approaches for the whole. 

Following Monday’s collapse 
of hopes of a sale to Constrno 
tions Mecanlqnes de Norman- 
die, the receivers are now con- 
sidering a CUN proposal to 
subcontract work for some 
weeks to Swans' design team. 

It emerged yesterday that 
the Tyne and Wear Develop- 
ment - Corporation, North ami 
South Tyneside and Newcastle 
councils and private sector 
interests have formulated a 
Callback proposal, should no 
going concern sale be possible, 
to acquire Swans as a subsea 
oil and gas exploration and 
production base. The initia- 
tive. costing around £20m, 
would require central govern- 
ment support. 

Organisation Management 
and Survey, the engineering 
consultancy, also confirmed It 
was interesed in buying Swans 
as a going concern, and was 
putting together a financial 
package. It would hope to find 
merchant shipbuilding work 
for the yard from Greece and 
the US. 


Britain in brief 





Exchange 
draft on new 
share market 

The London Stock Exchange 
yesterday took a step back 
from its most radical ideas on 
trading in small company 
shares when It published a 
consultative document on the 
new lightly regulated market 

An early draft of the 
exchange's proposals were to 
“strip back" regulation, but it 
has concluded that companies 
should provide interim 
financial results as a 
requirement of a quotation cm 
the planned Alternative 
Investment Market 

The draft had argued for 
waiving this obligation but the 
exchange judged that the cost 
of compliance for companies 
was outweighed by the extra 
security provided to in ve s tor s 
and the need to boost 
liquidity. 

“One of the things that most 
deadens a market is no 
information,” Mr M ic hae* 
Lawrence, chief executive of 
the exchange, said yesterday. 
“We need periodic 
information. I am afraid that 
we are going to require 
Interim results.” 


Greenpeace in 
‘pogr taste’ 

The Advertising Standards 
Authority, the advertising 
watchdog, in a ruling 
published today, has accused 
Greenpeace, the environment 
group, of “gross 
oversimplification’’ and “poor 
taste” in an anti-nuclear power 
advertisement which appeared 
in some national newspapers 
earlier this year. 

The Greenpeace 
advertisement featured a 
photograph of a baby with an 
enlarged head captioned 
“ Kazakhstan nuclear test 
victim". The text claimed that 
radiation-linked iBubusm in 
children “have already been 
seen near to nuclear 
inatallatirma such as Sellafield” 
and that *%000 will die because 
of the radioactive discharges 
from Sellafield over the next 10 
years". 

The ASA ruled that there 
was no proof the baby pictured 
in the advertisement was a 
nuclear test victim, and that 
the figure of 2,000 deaths had 
not been substantiated. It also 
ruled that It was “unfounded" 
to describe the nuclear 
industry as “intent on 
spreading radiation and the 
means of mass destruction 
around the globe'’. 

Greenpeace said it stood by 
the advertisement Its 
campaign had been vindicated 


because , the main complaint on 
tire link between nuclear 
power and childhood diseases 
had not been upheld, the group 
added. 


Home banking 
‘not welcome’ 

Gammers show a marked 
lack of enthusiasm for 
technological developments 
such as home banking, and 
appear to prefer conventional 
banking methods, according to 
a survey published yesterday. 

Within the general level of 
caution, there was greater 
interest to technological 
services from the uoder-35 age 
group. 

The poll by Mori for 
computer company ICL, 
suggests that whatever the 
investment fry retail financial 
restitutions to technological 
advances, many custo m ers do 
not see themselves taking 
advantage of new 


developments, and a 
significant minority scarcely 
use some of the common 
facilities already available. 

For example, three-quarters 
of those questioned said they 

would not nse s home b an k i ng 
service if it was available. 
One-third of respondents said 
they had never used a 

cashpoint machine, while only 
about half nsed them 
regularly. 

By contrast, two-thirds said 
they regularly visited their 
bank or building society 
branch other than to nse a 
cash dispenser. 

Motorola 
to expand 

Motorola, the US electronics 
group, said it would invest 
£25Gm m expanding its 
semiconductor plant at East 
Kilbride near Glasgow to meet 
increasingly heavy demand for 
its products. 

The expansion will be the 


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third and by far the biggest the 
company has made at East 
Kilbride in the past three 
years. In 1992 It annminad a 
£4Qm expansion project and 

followed it last year with a 
£50m expansion which was 
opened yesterday by Mr Ian 
litng, Scottish secretary. 

The new project involves 
building another 35,000 sq ft of 
factory space in addition to the 
existing 400,000 sq ft, and 
adding 250 people to the plant’s 
payroll of 2^00. The new 
building will begin 
manufacturing late next year 
and be in volume production in 
1996. 

Motorola’s expansion at East 
Kilbride is in response to 
growing demand for 
microcontrollers and digital 
signals products, 
semiconductors which are used 
in a wide range of products 
such as cellular telephones and 
fax machines, as well as engine 
controllers and smart cards. 

Part of the plant's increased 
output wifi go to other 
Motorola plants, such as its 
mobile telephone plant at 
Easter Inch in West Lothian. 
Scotland, while the rest of the 
production will be sold to other 
manufacturers. 

The new facility. Motorola 
says, will enable the plant to 
produce the most powerful 
silicon wafers in Europe and 
among the most powerful in 
the world. It will add triple 
layer metal semiconductors to 
the double layer metal 
products It already makps and 
increase tire plant's potential 
to produce advanced 32 bit 
microprocessor products. 


Nuclear fuel 
start-up sought 

Nuclear Electric, the 
state-owned generator, Is 
expected to apply within two 
weeks for penntssian to load 
the first uranium fuel into 
Sizewefl B, Britain’s first 
pressurised water reactor 
power station. 

Staff from the Nuclear 
Installations Inspect o rate, 
who are scrutinising safety 
systems on the Suffolk site, 
are expected to give the go 
ahead for fuel loading subject 
to satisfactory completion of 


outstanding work. 

Size well B, which has been 
built within Its £2.03bu 
budget, was expected to begin 
generating electricity during 
the summer. But the 

complexity of t he 

commissioning process and 
delay in ob t a ining 
authorisation to discharge 
radioactivity into the 
environment means the plant 
U unlikely to be started up 
before December. 


Birch calls 
for regulator 

There should be a single 
regulator for both building 
societies and banks. Mr Peter 
Bi rch , chief executive or Abbey 
National, the home loans and 
banking group, said. 

Addressing a seminar 
organised by the Chartered 
Institute of Bankers, Mr Birch 
said that despite the 
differences in ways of 
operation he believed it would 
m ?ifp sense for the two sorts of 
organisation to be regulated £7 
a single body. 

This might mean the 
Building Societies Commission 
becoming part of the 
supervisory department of the 
Bank of England. 

The question of regulation is 
set to arise as a result of the 
consultation document which 
the government is due to 
publish later this month on the 
fixture of societies. The 
Treasury itself, however, is 
likely to address the point only 
obliquely, and may argue that 
changes in societies’ powers 
and duties does not necessarily 
imply a change of regulator. 

Reform urged 
on damages 

Changes in the law to make It 
easier to pay damages In 
instalments to victims of 
personal injury are 
recommended in a report 
published yesterday by the 
Law Commission. 

The commission, which 
advises the g overnm ent on law 
reform, says that changes are 
needed which would allow 
insurers to boy annuities to 
make the payments direct to 
fixe victim tax free. Many 
victims of accidents prefer the 
payment of some or all of the 
damages they are awarded in 
instalments. These structured 
settlements often involve a 
lamp sum, with payments for 

the rest of their lives. 

The commission says that 
regular payments offer victims 
greater certainty about their 
financial fixture than a single 
lamp sum. They can also be 
tailored to the victim's needs, 
with variations in the amounts 
to reflect changes in need such 
as education costs and extra 
care in old age. 

London bus 
sell-offs 

The privatisation of the 
London bos network took a 
step forward yesterday with 
the sale of two more of the 
larger companies. East London 
and Selkent, to Stagecoach 
Holdings for a total of £42m. 

This brings the number of 
bus companies sold to three 
with a further seven still 
remaining to be sold. 
CenixeWest was sold to its 
m an a ge ment for just over 
£25m last week. 

Another two bus companies 
are expected to be sold off later 
this month and London Buses 
expects to complete the sale of 
all its operations by the end of 
the year. The sales are 
expected to be roughly equally 
to management tMm« aiyi 
trade buyers. 

The purchases by Stagecoach 
represent its first move into 
London and will give the 
Perth-based company a total 
share of about 1L5 per cent of 
the UK bus market Stagecoach 
has already bought companies 
in Kent Tyneside and Scotland 
over the past 18 months. 


First six months 1994 : 

JNG Group achieved handsome results for the first six mordhs of 1994. Net profit in- 
creased by 18.8% to NLG 1,066 million (first six months 1 993: .‘MLG 897 million). 

Net profit per ordinary share went up by 13.9% to NLG 4.1 1- - •. * . ■ . 

An interim dividend of NLG 1 .75 per share will be made payable on 6 September l994. - 
At the option of the shareholder this will be made available either -in cash of indeposrthy- 
receipts for ordinary shares in the ratio of one new depositary receipt for evdry 40' exis^ ‘ .v : ' 
ting ones. . 

Total assets increased by 2.8% to NLG 548,8 biUioam^»3^t six.^olbs c C'’: 

After the sharp increase by NLG5. 9 h Lilian in 1993, shareholders’ equity?decreas^.fW«n 
NLG 21.5 billion at the end of Tlecember 1993 "tolslLG 20.9T>ill ion at the' ehtf of Tune P ' 
1994. 

The Executive Board expects that net profit per share for the whole of 1994 will at least 
equal the 1993 level. 


Amounts in Dutch guilders 

Fust six 
months 1994 

Fust six 
months 1993 

% 

Orange . 

(millions) 

Result before taxation 

1.474 

1,229 

+ 19.9 

Net profit 

1.066 

897 

+ 18.8 

(guilders) 

1 Net profit per shore 

4.11 

3.61 

+ 13.9 

fhtmro dividend 

1.75 

1.60 

+ 9.4 

“ r..’4 

30 June 

31 December 


V. 

1994 

1993 


(billions) 

Total asset , 

348.S 

339.4 

+ 2.8 

Investments"^ 

135.0 

132.1 

+ 12 

Bank tending- 

147.7 

144.9 

+ 

Group capital base 

22.0 

22.6 

- 27 

(guilders; 

Shareholder?' 
equity frtjt share 

78.42 

82.70 

- 5.2 



GROUP 


The report for the first six months can be obtained at the following address: 
Internationale Nederiznden Group, P.O. Box 810, 1000 AV Amsterdam, 
The Netherlands. Tel. 1+31) 20 541 54 60. fax: (+31) 20 541 54 51. 



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FINANCIAL times 


WEDNESDAY SEPTEMBER 7 1994 


Ritratto 

ftaliam 


1 994 witnesses the birth of a new Group 
combining tradition, care, culture, and value - 

in fact, the best of Italy. The “Cirio” Group 
is born - a Group 

built around the ^B B ■ 
name of a great B^^^ IK I ^ 

Italian entre- B^^^ I I B 

preneur with a B I I i B 

constant commit- JL. ^^^JB.B^LIL 
ment to quality. TT *■ £ 

The Group IJ. B _ 

gathers together I I j B B B 

companies and B B fl fl 

brands as pres- B B fl JM fl B 

tigious as Ala, B 

Berna, Cirio, 

De Rica, Matese, 

Optimus, 

Polenghi, Solac, 

Stella and Torre 
in Pietra. 

Each of these 
names has been 
contributing, 
over the years, to 
Italy's industrial 
and economic 
development. 

Each has built an 
international 
reputation by 
remaining true to 
their consumers 
and to a common 
cause: a love of 
the land and an 
infinite respect 
for its fruits. 

It is this cause, 
maintained and 
developed 
through the most 
advanced tech- 
nology, that, beginning today, m 

makes the “Cirio” Group a world- ® 

wide industrial and financial reality Cl] 

that Italians can be proud of. — bianco. t 0 ; 


And it's impossible not to be proud of 
“Mr. Cirio” who, so many years ago had the in- 
spiration to protect high quality tomatoes in a 




CIRIO 

BIANCO, ROSSO E FUTURO. 


practical tin. 

to The same man who 

created a prece- 
dent in Italy by 
transferring pro- 
duction from north 
to south, demon- 
strating, through 
fl M fl investment, the 

b b B unity of the nati ° n_ 

al territory. 

^ We are also proud 
of “Mr. Polenghi”, 
who, all those 
years ago, ration- 
alised milk pro- 
duction by intro- 
ducing selection, 
quality control and 
hygiene, from cat- 
tle feeding to the 
milk preserving 
process. A demon- 
stration, once 
again, of how indus- 
try and agriculture 
go hand in hand. 

It all started 
between 1860 
and 1870. Since 
then, after endless 
technological and 
scientific advan- 
ces, nothing has 
changed. We have 
retained the same 
devotion to food 
and the same 
creativity and 
dynamism. That’s 
why we say with pride, that in the 
“Cirio” Group, it is not difficult to 
recognise a piece of Italy we love. 

It is a true Italian portrait. 




Tbe Cirio Group brands are: Ala, Berna , Cirio , De Rica , Matese , Optimus , Polengbi , Solac, Stella, Torre in Pietra . 


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T 


gUKUROVA ELEKTRIK AJS. 

Berke Dam and Hydroelectric Power Plant Project 
Civil Engineering Works - Phase O 

PROCUREMENT NOTICE 

CUKUROVA ELEKTRIK AJ5. (QEAS), constructs SlO MW Beifce Dam and Hydroelectric Power Plant on Ceyhan River in sooiben Turkey. The pngcct 
consists of a 201 meter high, double curvature, thin concrete arch dam: a 2057 meter long power tnnneL and an underground power station located at the 
downstream of the dam. 

(TEAS invites scaled bids from eligible bidders who shall offer bids in the currency of US dollar, with the bidding method of percentage reduction based on 
existing unit prices in the bidding documents, for the Civil Engineering Works - Phase IL 

1. Civil Engineering Works ■ Phase Q has been divided into 3 groups as indicated below. 

Contract No. I t-A - This group consists of the arch dam, tail race dam, the Intake structure and tunnels of spillway and the section of headrace tu nn el up to the 
surge tank. The estimated cost of the works is 64.6 million USD and the bid security is 1 million USD for Ibis group. 

Contract No. 11-B - This group consists of the underground powerhouse, the surge tank, the shaft and tunnels of penstocks, and laibace and all other tunnels 
related to the underground powerhouse, the outlet structure, the iniemtediate substation, hydromechanics! equipment works; stell lining of the penstock and the 
spiE wav tunnels; elevators, HVAC, grounding, lighting system, compressed air system etc. The estimated oust of the works is 30 million USD and the bid 
security is 400 thousand USD for (his group. 

Contract No. 1 1-C: Besides the consolidation and curtain grouting, this group consists of the arch dam. spillway dam. drilling of drainage wells of powerhouse 
and for consolidation grouting the necessary drilling and grouting works of all tunnels and galleries. The estimated cost of the works is 22.4 million USD and 
the bid security a 400 thousand USD for (his group; 

2. A complete set of bidding documents may be obtained from the address below beginning from September 8. 1994, upon the submission of a written 
application to (he below address, and upon payment of Don-refundable fee of USD 200 (two hundred). 

QTTKUROVA ELEKTRIK AdS. SEYHAN BARAJI PJK. 238 81322 ADANA tURDYE 
Tel: (322) 235 0681 (4 lines) Fax: (322) 235 0257 

3. All bids must be delivered to the above office on or before 1000 hours, local time on October 17, 1994 at the latest. The bids that have not been delivered 
until this date and any delay in mail shall not be accepted and wiD be returned to the Bidders unopened. 

4. Bids will be opened in the presence of those Bidder's representatives, who choose to attend at 1 LOO hours local time on October 17 1994 at the offices of 
the General Management of QUKUROVA ELEKTRIK AJ*, Seyhan BareK, Adana, TURK! YE. 

5. The Bidders may bid for all the above Contracts and separately as welL 

6. The advance payment shall be in an amount of 20% of the Contract price and shall be done in two stages. 

7. The Bidders have to provide the requirements completely and within the procedure explained below. Otherwise, Bids which do not comply with any one of 
the following conditions shall be returned without opening their inner envelopes. 

7.1 The applications of the Bidders and Joint- Ventures who have completed the following works and services during the last years will be considered. 

7.1.1 Contract No. II- A - For the arch dam and its apportenant structures, the Contractors should have: 

a) completed the construction of a dam 

b) placed at least 150j000m^ of concrete in one contract 

c) completed a tunnel of at least 5 meter in diameter and 500 meter in length 

d) controlled deep foundation excavations in similar projects 

e) completed civil engineering works worth about 50 million USD or more. 

7-1-2 Contract No. 11-B - For ibe underground powerhouse and its appottooant structures, the Contractors should have: 

a) placed 50,000m 3 of concrete in one Contract 

b) used sliding form in concrete works 

c) made steel linings of penstocks and concreted 

d) constructed hydroelectric power plant having at least 80MW capacity 

e) completed civil engineering works worth about 25 million USD or more 

f) completed a tunnel of at least 4 meter in diameter and 300 meter in length 
7J-3 Contract No. U-C - For the drilling and grouting works 

a) The backgrounds to be submitted must include deep grout curtains (of 200 meter or more in depth), total curtain areas not less than 100,000 m3 and 
ex pe ri ence in using tire various grouts and additives for grouting in water or against naming water. Finns shall also report, including supporting documents, 
for special products used or developed by them as well as certificates for successful completion of important grouting works issued by the Engineer or Clients. 

b) Completion of grouting works worth approximately S million USD is a must. 

7.2 The firms having the qualifications indicated above and capability to carry out the works may bid by forming a Joint Venture However, the conditions 
indicated in the typical Joint-Venture declaration (Volume 32 Section X) have to be provided. Local or foreign partners of the sponsor firm of the Joint- 
Venture have to be experienced on important work item* and provide the required conditions. 

The rales of participations in a Joint- Venture are limited as follows: 

Sponsor firm; Min 25% - Max 75% Partnerfs): Min 25% - Max 75% 

Any partner^ participation in the Joint-Venture shall nor exceed that of the sponsor and shall remain unchanged throughout the Contract. 

Any firm is eligible to bid for post-qualification both individually and as the partner of a Joint-Venture but the submission or the participation of any firm in 
more than one bid will not be acceptable and any bids violating of this rule wiQ be rejected. Bids submitted by a Joint-Venture must meet the following 
requi re me nts: 

- Each partner of the Joint- Venture must submit the complete documentation required from any firm bidding for individual post-qualification. 

- The bid as well as (in case of an award) the resulting contract should be signed so as to be legally binding on all partners, jointly and severally. 

- A John- Venture agreement providing the joint and several liability or all partners in respect to the contract should be submitted together with the Bid. 

- The bid must include a description of the proposed participation and responsibilities of each partner of the Joint- Venture. 

- The percentage participation in the Joint-Venture of each of hs members (in the leans of the corresponding percentage of the value of the Contract) must not 
exceed each member's capacity in terms of each of the qualifying criteria. 

S. his essential that the bids shall be submitted together with the required information and documents for their financial, technical and production capabilities. 
The bids of those bidders, who do not comply with the conditio ns required in the bidding documents for the eligibility of the bidder or those bids which are not 
in conformity with the bidding documents, shall be rejected. The decision by QEAS, in relation to the evaluation, selection and signing of the Contract for the 
offers received, shall be final 

9. (TEAS reserves ibc right to accept or to reject any bid and to annul the bidding proce ss or to r ej e c t all bids, at any time prior to award of contact without 
thereby incurring any liability to the affected bidders) on any obligation, to inform or to compensate the affected bidderfs) of (be grounds for the C’EAS's 
action. 

10. Any delay in mail or offers by telephone, telegram, telex or telefax shall not be accepted. 

CUKUROVA ELEKTRIK AS. 
GENERAL MANAGEMENT 


McKInlay dives out of the Pool 


Margaret McKinlay, the chief 
executive of the Electricity 
Pool, surprised the power 
industry yesterday by announ- 
cing that she is leaving to take 
up the new post of head of 
compliance at British Gas. 

The wove will stir consider- 
able interest in energy circles 
since the Pool and British Gas 
are both in the public eye these 
days. Bat the 43-year-old 
McKinlay felt it was time for a 
change, both from her point of 
view and that of the PooL 

“When I took on this job five 
years ago I wanted to make 
sure the Pool was capable of 
working, and I think I've done 
that," she said. " It can always 
be improved, but it would be 
better for another person to do 
that" 

A graduate of Edinburgh 
University, McKinlay joined 
the Department of Energy in 
1977, and worked on electricity 
and oil licensing before becom- 
ing private secretary to the 
minister of state. After a spell 
in administration, she moved 
to the coal division during the 


Ian Reynolds’ 
return ticket 




The Association of British 
Travel Agents, which acts as 
both watchdog and industry 
association for the UK travel 
business, has just appointed a 
new chief executive: Ian Reyn- 
olds. 

Reynolds. 50, has previously 
spent 26 years with IBM (UK) 
in a multitude of roles. He 
joined the company in 1968 as 
a trainee saipgman in London, 
after studies at the London 
School of Economics. He 
became regional manag er for 
the Midlands and North, and 
group director of administra- 
tion in Pails in 1982. 

He returned to the UK in 
1983 to lead a division con- 
cerned with information 
systems, but Paris once more 


miners* strike before returning 
to electricity to oversee privati- 
sation. 

In December 1988 she helped 
create the PooL the new whole- 
sale market for electricity 
which formed the heart of the 
privatised industry, becoming 
chief executive in 1990. 

Although the Pool has 
evolved as the focal point of 
the electricity market, it has 
been criticised for containing 
imperfections, ami a number of 
reforms are bong introduced 
under Mcfflolay’s guidance. 


beckoned in 1986, where he 
returned to be general man- 
ager responsible for the Bene- 
lux, Spain, Switzerland and 
east European territories. 

Back to the UK in 1987, 
Reynolds took over as director 
of marketing and services for 
three years. Clearly, however, 
Paris got into his system, as he 
returned there in 1991 to be 
vice-president, communica- 
tions, dealing with government 
and media relations, as well as 
internal communications. He 
firrinhori his career with IBM as 
director of personnel and cor- 
porate affairs, bade in toe UK. 
He retired from IBM earlier 
this year. 

Given that he enjoys tennis. 

golf, okiing and calling anil he 

now has some spare tone to 
pursue those activities, why is 
Reynolds taking on toe tough, 
role of steering ABTA, which 
has had its ri ps and downs in 
the recent past? “Travel is a 
high-growth industry, soon to 
be the world’s largest ABTA is 
in a good position to provide 
the necessary leadership for 
that industry; it’s a challenge 
too good to miss," says Reyn- 
olds. 

ABTA currently has 2,900 
main members, though that 
increases to 7.000 when count- 
ing all retail outlets. Reynolds 
is taking over from John Dirn- 
scombe, who resigned earita* 
this year. 


At British Gas, McKinlay 
vrill play a key rote in introdu- 
cing a regulatory compliance 
regime in the wake of last 
year’s monopoly report In par- 
ticular, pha will be responsible 
for ensuring toe effective sepa- 
ration of British Gas* transpor- 
tation business from its trad- 
ing operations - the key 
feature of the new structure 
which will have to pass muster 
with toe gas regulator and the 
company's customers. 

M cKinla y will be based at 
British Gas’s corporate centre 
and report to a main board 
director. She admits that she 
has bad only limited contact 
with the gas industry - still 
very m'y h a man’s world - 
though she has met Clare Spot- 
tiswoode, the gas regulator, 
with whom most of her deal- 
ings will be. 

No moves have yet been 
m«dp to find a successor at the 
PooL One member said yester- 
day: “She will be very hard to 
replace. She is extraordinarily 
conscientious, and would never 
leave a job half done.” 


Regret in toe City yesterday 
over the departure from 
Cowie, toe car-leasing and 
motor-trading group, of Iain 
Jane. 49. the director responsi- 
ble for the motor division, 
after 15 years with the com- 
pany. 

Analysts said it was sad to 
see the break-up of the experi- 
enced management team 
which had built the Sunder- 
land group into one of the 
industry’s biggest companies. 
Last year Sir Tom Cowie, 71, 
stepped down after 45 years as 
chairm an of the company he 
founded and was replaced by 
Sir James MnrRhmnn l previ- 
ously director general of 
Qfgas. 

Cowie refused to comment 
on the reasons for Jane’s 
departure, hut analysts believe 
he may have lost out in the 
race to succeed Gordon Hodg- 
son, 62, the chief executive, 
who now assumes overall 
responsibility for the motor 
division. 

The succession was always 
thought to lie b e tween Jane 
and Neil Pykett, 46, the direc- 
tor responsible for Cowie con- 
tract hire and leasing busi- 
ness, which tin bulk of 
group profits. Another possi- 
ble factor is that Jane is a very 
hands-on manager, who may 
have felt ent off by toe layer of 
divisional wumafwnwii which 
grew with Cowie. 


Finance moves 

The Colloque Franco- 
Bri tanniq ue. a select forum set 
up three years ago by Sir Pat- 
rick Sheehy. chairman of BAT 
Industries, and Gerard Worms, 
chairman of Suez, has been 
described rather unkindly by 
some observers as "a group of 
serious people shooting the 
breeze". 

But the annual meeting of 
leading industrialists, journal- 
ists and academics does have 
some practical uses. too. It was 
at one such gathering that a 
senior member of S.G. War- 
burg met Yves Cannae, the 
president of Cegos, a French 
consultancy specialising in 
professional and management 
training. 

He was so Impressed with 
the 59-year-old Frenchman, 
who was also executive chair- 
man of Havas, toe French 
media group, from 1978 to 1981, 
that he has been hired to 
advise Warburg on how to 
develop its business in France 

Warburg clearly believes 
that retaining senior figures 
with good local knowledge and 
contacts is a winning strategy. 
It has similar advisers in 
Spain, the Netherlands, Den- 
mark, Australia and Canada 
and two in Japan. 

■ Alex Wishart, formerly 
director and general manager 
of Harrods Bank, has been 
appointed regional manager for 
the BEIRUT RIYAD BANK in 
London. 

■ John Scott and Clive 
Weston, formerly directors of 
Wise Speke, have been 
appointed directors in 
ALBERT E SHARP’S 
Manchester office. 

■ Nicholas Peacock, formerly 
head of regional research in 
Hong Kong for Schraders, has 
been appointed a director of 
LEHMAN BROTHERS with 
responsibility for marketing 
Asian equities to UK and 
European investors. Vincent 
Walsh has been appointed a 
director on the UK cash 
trading desk: he moves from 
Morgan Stanley. 

■ James Wilmot-Smlth, 
formerly a director of Gerrard 
& National, has been appointed 
a director of GN1 responsible 
for the leveraged fond 
managemen t division. 

■ Tony Chari wood, formerly 
with Gartmore, William 
Pattissoa, formerly with James 
Capel Fund Managers, and 
Howard Williams, formerly 
with Shell Pensions, have been 
appointed senior directors of 
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MANAGEMENT. 


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MANAGEMENT 


Richard Donkin on an impending review of UK industrial tribunals 

Making fairness work 


1 ®a©ne a divorce court order- 
ing a husband to be remitted 
with a wife who cannot s**nrt 
tiie sight of him. The decision 
would b e un wo rkabl e, 

Yet a review of the UK industrial 
tribunal system ordered by the 
Department of Employment is 

expected to consider reinstatement 
of employees in the workplace as an 
alternative to compensation for 
unfair dismissal. Like the saving of 
a marriage, it sounds attractive in 

theory. But in practice, as with rum- 
consenting partners, it seems 
fraught with difficulty. 

While enforced re-instatement is 
thought to be one of the ideas the 
government is considering Cor inclu- 
sion in a consultative document 
expected to be published later in the 
autumn, it may have been dis- 
missed already as unworkable 
unacceptable to employers. 

Nor may business be enamoured 
with the German approach, which 
has been scrutinised widely in 
Britain. In Germany companies 
must give appropriate justification 
to works councils composed of 
elected employee representatives. 
Although a works council cannot 
prevent a dismissal. Its opinion is 
taken into account in any subse- 
quent proceedings at a labour court 
- the more powerful German equiv- 
alent of the UK's tribunals. 

Some organisations had been lob- 
bying for a review for years. When 
it was announced by Ann. Wldde- 
combe, the employment minister, in 
a reply to a parliamentary question 
in April, she said the move was 
intended to identify any changes 
that would help tribunals cope with 
the rising volume and complexity of 
cases, to reduce delays, and to con- 
tain demands on public spending. 

Industrial tribunals, the 

government, had grown too cumber- 
some and costly. The annual num- 
ber has more than doubled from 
34,000 in 198840 to upwards of 71,000 
in 199&94. Most of these were unfair 
dismissal cases, very few of which 
led to re-ins tatement orders and 
fewer still to actual re-engagement 
Under present legislation employers 
cannot be forced to re-employ some- 
one if they choose to ignore an 
order of the tribunal. ■ ■ 

Although reform has been an 
issue for years, the timing of the 
review may have much to do with 
the European Court of Justice's 
decision last year to remove the 
ceiling cm compensation awards in 
sex and race discrimination cases. 
One result has been a series of sfx- 


NO FONT IN .SUfoeSr/NQ EMPLjOVER 
GIVES fflM JO£> BACfc | ruRRSSE? 


h # 







figure awards to women who were 
dismissed from the armed services 
after becoming pregnant The cases 
have sounded alarm bells in White- 
hall, faced with a £KXbn bin if all 
the appeals prove successful 

The g o ver n ment is flwnght to be 
deliberating entnpftnojitinn ceiling s 
hecaruM of the discrepancies that 
have arisen. While unfair riiamteaai 
cases are limited to awards of 
£11,000, there is no limit on race and 
sex discriminations cases. The 
Employment Appeal Tribunal the 
equivalent of the civil Appeal 
Court, has already laid down 
detaile d guidance an the MoD cases 
and cautioned against such high 
payments. 

The underlying need for reform 
arises from the numerous piecemeal 
chang es made in the system since 
tribunals were established in 1964. 
Initially their role was to hear com- 
plaints from employers against the 
“training levy" - levies on each 
industrial sector to pay for training. 
They were wrenched from obscurity 
by the 1971 Industrial Relations Act, 
which gave them jurisdiction over 
unfair <flgmigR«T claims. 


They have gradually acquired 
more status and power as arbiters 
of the various employment discrimi- 
nation laws, to the extent that they 
now give judgments on 60 types of 
claim. Today, because of diminish- 
ing nninn power and r ep re se n t a tion 
among many employees, the tribu- 
nal has become the rfiipf and in 
some cases the only recourse 
against unfair treatment in the 
workplace. Tribunals have recently 
been given the power to judge con- 
tractual disputes, but there is a ceil- 
ing of £25, 000. 

The format of industrial tribunals 
is largely similar across the coun- 
try- They tend to be held in two or 
three characterless rooms in an 
office block. The proceedings are 
deliberately informal. With a presid- 
ing lawyer acting as chairman , the 
sides are divided into applicants 
(aggrieved employees) and respon- 
dents (employers). E ach can be for- 
mally represented but often choose 
to forego lawyers because of oo6t; 
legal aid is not available. 

The result is that individuals 
Inexperienced in advocacy tend to 
stumble through thatr questioning. 


taking up almost as much Hitip as 
lawyers. Often the parties are 
allowed to lead their witnesses in a 
way that would not be allowed by a 
Crown Court judge. Case backlogs 
and the length of hearings are lead- 
ing to too many split hearings, 
where the be gmnmg and end of a 
case may take place months apart. 

Two years ago full-time tribunal 
chairmen were given powers in cer- 
tain circumstances to sit alone, but 
they appear to be reluctant to dis- 
pense with their panel of two lay 
people. “The presence erf lay people 
with practical experience is an 
important check and balance," says 
Digby Jacks, a national officer of 
MSP, the technical union. 

JaCks is among a growing lobby 
who believe that the government- 
funded Advisory Conciliation and 
Arbitration Service should have a 
greater involvement in cases. Cur- 
rently, it is available for consulta- 
tion, but some believe that if its 
powers were extended to those of 
mediation or arbitration it could 
prove a more efficient filtering pro- 
cess. Other idea s being nonmd ^ r e d 
by the government include a system 
for employees to meet both tides' 
costs if they pursue frivolous 
Hahns Examples of the trivialismg 
of tribunals are legion, and i ncl u de 
complaints about the way a briga- 
dier's cook fried eggs. 

While the badinage of workers 
who called their Ulsterman col- 
league a “thick paddy* was argu- 
ably trivial it won the employee 
£6,000 to compensation for hurt feel- 
ings, «tiH ma y have bad a broader 
social influence to the way that peo- 
ple behave at work. 

So may have sex discrimination 
cases “ which, more than an ything 
else, have raised the profile of 
industrial tribunals in the marfia 
Last month Samantha Phillips, an 
insurance broker at Willis Cornxm, 
won £18,000 in damages after claim- 
ing sexual discrimination anti 
unfair dismissal “I think the Case 

will send strong vibrations down 
the spines of some managements " 
says Jacks. 

One fear about the consultative 
document among organisations that 
have been urging reform is that the 
government's prime concern is cost, 
and that its recommendations may 
dilute the powers of tribunals. Peter 
Martin, legal officer at the Engi- 
neering Employers' Federation, 
says: T fear the document may be 
too narrowly focused when what we 
want is a broader review." 


F ew modern plays have 
generated as much 
controversy as David 
Mamet’s Oteornm. It portrayed a 

disastrous series of 
ariscommniri cations between a 
male college professor and a 
female student which finally 
destroyed the professor's career. 

In a disturbing example of life 
mimicking art, a male college 
professor at the University of New 
Hampshire is now on indefinite 
Suspension without pay following 
a sequence of events remarkably 
like those portrayed to Mamet's 
play. The events raise important 

rpipc Hnnt nh mrt apfldwnip 

freedom, individual rights and 
“political correctness". 

Donald Siva. 59, pillar of the 
local Congregational Church, anf i 
a faculty member at the 
University of New Hampshire 
since 1972, taught a course on 
foH»"foai writing. In one of Us 
lectures, be compared an aspect of 
the creative process to sex. The 
shnile was based on the to and fro 
quality of the movement and the 
sense of fulfilment that came at 
the end. 

On another occasion, when 
discussing the use of similes, he 
suggested that the movement of a 
belly dancer might be described as 
being “like Jell-0 on a plate with 
a vibrator under the plate”. These 
»™i allusions offended some of 
the female students who 

rrmipTa mpd tn Hh> mtl wn Hy 

authorities. 

Was this aD there was to it? 
Apparently, yes. In subsequent 
enquiries it was reported that 
some female students felt the 
professor stood too close to them 

Definitions of what 
constitutes sexual 
harassment have 
profound 
implications 

on certain wraiAms, hg t 

was no definition of how dose was 

too close. 

An adm ini str a tive tribunal 
nonetheless found Professor Silva 
guilty of sexual harassment, 
defined in this case as “creating a 
and intimidating 
a t mosp h ere” to his class. The 
professor was suspended without 
pay for a year, during which time 
he was req ui red to undergo 
psychotherapy — at Ids own 
expense - to correct his 
supposedly deviant tendencies. 

He chose instead to bring legal 
action against the university, 
demanding reinstatement to the 
faculty, compensation far lost 


From 
sexual 
simile to 
sexual 


crime 


y 


Stuart Bentley 

on the dangers 
of a politically 
correct 
definition 

inc o m e and undisclosed damages. 
He thus remains suspended 
without pay pending the outcome 
of his lawsuit 
The Silva case has split the 
University of New Hampshire 
community Into those who see it 
as a question of academic freedom 
and those who see it as a question 
of women’s rights. Both positions 
have merit and are defended 
passionately: an unlikely basis for 
rational dialogue. 

The university administration is 
understandably reticent about 
discussing the case but Eve 
Goodman, head of the university's 
sexual harassment and rape 
prevention programme, is 
prepared to comment She says 
that if female students felt afraid 
to go to a professor's lecture, then 
“we got a problem here”. 

We certainly have. As an 
A me rican academic, I feel a 
persona] interest in the SDva case, 
but its ramifications extend far 
beyond the confines of American 
acadenria. <! * Tiial hara ss ment P 
becoming an increasingly 
important issue throughout the 
developed world and definitions of 
what may or may not constitute 
sexual harassment have profound 
implications for working 
relationships to generaL 
With attempts to define the 
limits of acceptable behaviour 
comes the image of a society 
dominated by poHticaliy-correct 
thought polks. 

While such a prospect may be 
interesting as a dramatic premise, 
does it have any basis in reality? 
In the light of events at the 
University of New Hampshire, 1 
am less complacent than I was. In 


my day-to-day dealings with 
students, 1 find myself 
Increasingly aware that even the 
perception of “inappropriateness" 
could be disastrous. This is 
especially true with female 
students, to whose company 1 now 
feel a level of personal 
vulnerability more appropriate to 
a minefield than a classro om. 

This is not paranoia. Official 
guidelines in most private and 
governmental organisations in the 
US include “creation of a hostile 
and intimidating atmosphere" 
under the general hpadfog of 
sexual harassment 

The Sfiva case shows clearly 
that even casual references to 
persona] bodily functions - 
especially those pertaining to 
reproduction - may be deemed to 
create such an atmosphere. 
c on s tituting grounds for censure. 
This censure carries the same 
stigma as a conviction for 
indecent assault 

The question of stigma is crucial 
to this debate. What is important 
in the Silva case is not what be 
was accused of but what be was 
not accused of. There was no 
suggestion, for example, of 
improved grades in exchange for 
sexual favours. No mention of 
groping, fondling or even 
“inappropriate touching". 

And If his similes generated an 
environment that his accusers 
found “hostile and tattaddating”, 
where might these women feel 
comfortable? Surely not on the 
campus of a modern university, 
where ideas are expressed freely - 
sometimes even offensively - and 
established opinions are open to 
constant challenge. Most 

Official guidelines 
include the “creation 
of a hostile and 
intimidating 
atmosphere** 

important of all: is the academic 
equivalent of a death sentence 
reasonable punishment for the 
“crime” of using 
sexual! y-suggestive similes? 

It is now up to the courts to 
decide. Meanwhile, 1 am reminded 
of a song, extolling the 
polltically-incorrect delights of 
“standing on the corner watching 
all the girls go by". I remember 
particularly the line that goes 
“you cant go to jail for what 
you’re thinking”. Such optimism 
may soon be out of data 

Stuart Bentley is professor of 
pathology at the University af 
North Carolina Medical School 



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12 


FINANCIAL TIMES 



WEDNESDAY SEPTEMURR 7 HW4 


BUSINESS AND THE ENVIRONMENT 


Accounting for the 
birds, bees and trees 

Raymond Colitt on why economic indicators must 
reflect degradation of natural resources 


H ow much is the air you 
breathe or the forest you 
hike in worth? Can a 
monetary value be put ou them, or 
are they priceless? 

As pressures for conservation of 
natural resources mount 
worldwide, planners and 
policy-makers are increasingly 
confronted with such questions. 
The result is that economic 
valuation of natural resources and 
environmental accounting are 
achieving greater prominence. 

Much of the theoretical 
groundwork has been done by 
scholars such as Robert Repetto of 
the Washington-based World 
Resource Institute and David 
Pearce of University College 
London. International 
conservation agencies, among 
them the United Nations 
Environment Programme and the 
World Commission on 
Environment and Development, 
have endorsed the objectives of 
resource valuation and 
environmental accounting. 

The economies of many 
developing countries are 
especially resource-dependent - 
oil-exporting countries, for 
example - and thus have an 
interest in determining the value 
of their inventories, or reserves. 

Recently the UN Statistical 
Office published guidelines for 
environmental accounting; this is 
likely to help developing countries 
incorporate the value or resources 
into national accounts. 

Conventional accounts can give 
a misleading picture of a nation’s 
output by failing to show 
depredation as resources are 
depleted or to reflect the 
contamination of natural 
resources. Thus, the output of 
products such as oil are 
overestimated, as there will come 
a time when the oil runs out and 
income will cease. Such natural 
resources have neither been 
considered productive capital nor 
been subject to depreciation. 

Just as a lumberman loses 
capacity to produce timber if he 
cuts trees without reforesting, an 
economy's productive capacity 
diminishes with the degradation 
of biological resources. The World 


Resources Institute argues that if 
natural resources, like other 
assets, are diminishing they 
should be subject to depredation. 

Theodore Panayotou at 
Harvard's Institute for 
International Development says 
that the price of commodities, 
such as fish and crops, often 
“reflects only the opportunity cost 
of labour and capital used in their 
production, not the opportunity 
cost of scarce natural resources 
used in their production.” 

The implications of economic 
indicators that do not reflect such 
degradation are many. They result 
in a deceptive measure of 
economic growth. A country 
exporting large amounts of 
timber, for example, may record 
considerable growth, as reflected 
in gross domestic product But if 
economic figures do not reflect a 
decrease in the inventory of 
natural resources - its forests - 
and a reduction of ftatare 
productive capacity, such growth 
is overstated and unsustainable. 

A study of forestry schemes in 
Britain, sponsored by the World 
Wide Fund for Nature, found that: 
“Economic analysis of forestry is. 
In practice, purely a financial 
assessment of profitability. 

Misleading income 
measurements create the illusion 
that growth was created without 
cost to the environment, says 
Omar Noman, senior research 
economist at Oxford University. 

An indicator of economic growth 
is needed that is adjusted for 
environmental costs. 

Based on the concept of 
sustainable development, “net 
growth” wonld be based on 
income generated by economic 
activities that do not reduce a 
country's productive capacity in 
an unsustainable way. It is 
calculated by subtracting the cost 
of degradation from grass 
domestic product 

Case studies of resource 
degradation have shown that the 
market often fails to reflect the 
social and economic cost of 
environmental degradation. For 
example, although natural stocks 
of fish worldwide are dwindling, 
fish prices are not rising enough 


to inhibit consumption to a 
sustainable level. 

A number of methodologies to 
value natural or biological 
resources have been proposed. The 
simplest approach is to assess the 
market value of commercially 
harvested products, such as 
timber or medicinal plants. It 
calculates the value at current 
prices while taking into account 
unconventional uses such as 
eco-tourism. But this approach 
does not consider the value of 
products that do not pass through 
a market For an Indian trite, 
firewood, game meat and fish are 
products that are not marketed, so 
have no market value. 

Even more elusive is the 
attempt to assess indirect values 
of ecosystems. What is the worth 
of a forest’s function in regulating 
the climate, as a source of water 
or sequestering carbon emissions? 

So far sncfa valuation techniques 
have been applied largely to 
limited geographical regions or 
specific resources within an 
economy. As Repetto says: “The 
idea of an all-encompassing 
inventory of natural assets has 
generally teen discarded.’ 1 

In Papna New Guinea, the 
World Bank and the UN Statistical 
Office conducted case studies to 
see bow data cm natural resources 
could be integrated into the 
existing system of national 
accounts. Environmental impacts 
were assessed in agriculture, 
forestry, mining and energy 
sectors. The environmentally 
adjusted net domestic product 
(EDP) was calculated in two 
stages. The economic depletion of 
natural resources was calculated; 
then the degradation of 
environmental quality and of 
non-marketed environmental 
services was assessed. Total EDP 
equalled 90 to 97 per cent of net 
domestic product 

Ultimately, economic valuation 
of natural resources does not 
prevent their unsustainable use. 
However, it identifies and 
determines the cost of 
unsustainable economic growth. It 
is a Anther step In providing 
economic indicators that reflect 
the state of the environment 


A once defunct tannery in 
Laos, south-east Asia, has 
won Us first orders by sell- 
ing itself to western 
leather buyers as an environmen- 
tally friendly operation. 

While much industry along the 
Mekong River is still pumping out 
effluent and dumping waste, the 
Simon Lao factory is capitalising on 
greater environmental awareness 
among western consumers. 

Simon Lao in Vientiane, the Laos 
capital, is the country’s only tan- 
nery. 'It was built by the govern- 
ment in the late 1980s with funding 
from the United Nations Develop- 
ment Programme but was mothbal- 
led on completion. The plant never 
opened for business because there 
was no further funding once the aid 
programme ceased. 

But commercial production began 
as soon as the tannery was priva- 
tised last year, and sales are now up 
to Bt2.5m (£64,600) a month. The 
government sold 75 per cent to 
Bangkok-based Simon & Associates, 
an Australian-Thai joint venture. It 
is one of Thailand's largest makers 
of leather furniture, with sales of 
more than flm (£600,000) a month. 

Simon Lao made it a marketing 
policy to become a “green” leather 
niche. It is now hailed as one of the 
most environmentally-friendly tan- 
neries in south-east Asia. 

Keen to buy from such a supplier, 
Ikea, the Swedish group, recently 
placed a $2m (£l.2m) order for 
leather furniture from Simon & 
Associates. 

Ikea says it would like to buy 
more furniture from the parent 
company, but the tannery is run- 
ning at full capacity and cannot 
deliver any more at the moment 
But the company says it has “many 
more leather articles which can be 
shifted to the Lao tannery. And we 
are in the process of adapting our 
furniture - to give it a new look - 
to further fit their production.” 

Laos is perhaps not the most obvi- 
ous of investment des tinati ons in 
Asia. As a late industrialiser, the 
country is not trying to attract for- 
eign investment by agreeing to 
environmental “dumping” - but 
rather the opposite. Jean-Franpois 
Renaudin, general manager of 
Simon Lao, says: “Simon & Associ- 
ates was very interested in this tan- 
nery, first because it could supply 
them with water-buffalo leather, 
which is getting hard to find in 
T hailan d. 

“Second, Ikea, which is a very 
large customer, has to watch what 
it does in terms of the environment. 
Simon identified that if it could get 
a tannery that was dean at the 
start, and then make it cleaner and 
greener, surely Ikea would be inter- 
ested in that Mind you, it is a gam- 
ble - it's not a deal with Ikea - that 
is part of the marketing strategy of 
Simon.” 




Tanning blues a Simon Lao quality controBer works on a hide at the “wet Uue* stage - a wet white process is planned 

Green leather 
in fashion 

Tomas Larsson visits a Laos tannery which is trying to 
be as environmentally friendly as possible 


Renaudin believes the plant's suc- 
cess so far is because of its clean- 
ness. 

“We are one of the few tanneries 
in south-east Asia to have a dedi- 
cated effluent treatment plant And 
it is the biggest one I've ever seen. 
In fret, we could probably Increase 
production capacity by 10-15 times 
and the syst e m would still be able 
to cope.” 

The plant has a modem waste 
water treatment plant. Imported 
from Europe, which chemically 
removes dangerous chemicals from 
the water used in the tanning pro- 
cess. 

Bernhard MeyhOfer, a German 
consultant working with Thailand’s 
ministry of industry on a series of 
environmental projects, agrees that 
the Simon Lao tannery is cleaner 
than most “Compared with the 150 
tanneries in Thailand, the Lao tan- 
nery is definitely much cleaner. 
They are doing one very important 
thing right separating chromium- 
containing waste water from the 
other waste water streams and 
removing the chromium by precipi- 
tation.” Chromium is used in the 
tanning process. 

The resulting sludge is disposed 


of in drying beds on the plant site. 
Inheritage from the UNDP days, the 
tannery is equipped with a chrome 
recycling system, which could elim- 
inate the need for a more suitable 
site for end-disposal of the chrome- 
filled sludge. But the system has 
never been fully operational. It 
would require further investment to 
open and Renaudin is not convinced 
that using recycled chrome would 
have no effect on the quality of the 
leather. 

Renaudin's gamble, as he puts it, 
appears to be paying off so far. He 
is now embarking on a project to 
improve further the plant’s environ- 
mental record - to eliminate what 
the industry calls “wet blue” shav- 
ings. The shavings, which contain 
chromium , are produced when the 
hide is shaved to produce a uniform 
thickness. 

Simon Lao will introduce a 
two-step tanning process. The shav- 
ing of the hides will in future be 
done in a pre-tanning stage called 
wet white, before the usual chrome- 
tanning process. 

“In the west,” explains Renaudin, 
“tanneries dump the wet blue shav- 
ings at disposal centres specialised 
for toxic waste. A small tannery 


such as Simon Lao produces per- 
haps 200 kilos of shavings per day - 
and in Laos they didn’t even have a 
rubbish tip when we came here.” 

In contrast, the new tanning pro- 
cess. expected to be up and running 
by the end of the year, involves 
only organic compounds (alde- 
hydes) and the shavings can be 
used as animal feed. “We will proba- 
bly he the first tannery in the world 
to use the wet white process for 100 
per cent of our production," says 
Renaudin. “And Laos will certainly 
be the only country in the world 
where all tanneries use this technol- 
ogy - because we're the only tan- 
nay here." 

But not all factories in Laos ore 
as environmentally aware. Local 
villagers, for Instance, have to tread 
with extreme care to avoid hurting 
themselves when struggling 
through heaps of broken bottles, 
rusty bottle caps and copious 
amounts of rubbish and effluent 
Heavy rain flushes much of the 
waste into the relatively pristine 
waters of the Mekong. If the success 
stories of companies seeking out the 
“green" buyer in Laos continue, 
this practice may finally come to an 
end. 




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* 



FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 * 


D oes anybody remember 
television quite as dread- 
ful as we have been hav- 
^ ^ Past couple rf 
weeks? Of course any week that 
contained the pilot for Chris Tar- 
rant's game show (cam that really 
be the right phrase?) The Opposite 
Sw would be pretty bad. The billing 
told us that couples would be “air- 
ing their dirty laundry in public" 
and anyone who thought this was a 
subtle piece of wordplay tndiraHwg 
a stage beyond washing their dirty 
hnen was rapidly disDhimoned by 
the information that there would be 
“a studio audience comprising of 
couples only". Such solecisms 
should have served as a warning. 
Sure enough women were tgriwert 
to object to men leaving the lava- 
tory seat up, and men to complain 
about the time women took in pre- 
paring to go out. Goodness knows 
how the BBC justifies spending our 
licence fees on such trash. 

Nor was it just that There have 
been dust bin loads of repeats and a 
poor response from news a nd cur- 
rent affairs programmes to the ces- 
sation of violence by Irish republi- 
can terrorists. Perhaps I was 
consistently unlucky, and it was 
hke a game of Grandmother’s Foot- 
steps; every thm* I switched chan- 


Television/ Christopher Dunkley 

A seasonal display of dirty linen 


nels to find a better report, impres- 
sive activity promptly occurred 
behind my back- Maybe, But the 
reports I saw seemed wholly unpre- 
pared for what had happened, and 
obsessed with the absence of the 
word ‘‘permanent” in the ceasefire 
declaration, virtually to the exclu- 
sion of all other considerations, hi 
particular there was a martud fan. 
ure to explain how tins event bud 
come about Were the American vis- 
iting politicians influential? Was it 
John Major’s doing? Had John 
Home’s work paid off? Having 
believed in violence fra: 25 years, 
why had the terrorists changed 
their minds? Not only did nobody 
seem to have the faintest idea, 
nobody cm television seemed wfDzng 
to ask. 

At other times of the year when 
there is so much more to distract 
the attention you might be able to 
get away with showing a ragbag 
collection of episodes from aodtmt 


ATV series, pretending you were 
serving a demand for retro televi- 
sion. After all nobody accuses the 
National Film Theatre or the Hamp- 
stead Everyman of showing 
“repeats"; they are in the serious 
sounding business of repertory cin- 
ema. However, there is an impor- 
tant difference. The NFT and the 
Everyman select the best of what 
has survived, whereas broadcasters 
usually seem perversely interested 

in tiie worst It was not a bad idea 
to have Michael Grade interview his 
unde for The Persuader The TV 
Times Of Lord Lew Grade, because 
Lew Grade did have a significant 
gffert on British television in the 
1850s and 60s. Some of his series - 
The Muppet Show for instance, and 
The Prisoner - were unusual and 
well worth reviving. Moreover it 
was fascinating to see the episode of 
Danger Man in which Patrick 
McGoohan played a shadowy agent, 
sent abroad to a mysterious self- 


sufficient village where the mun- 
dane was overlaid with a powerful 
sense of sinister totalitarianism, 
since this was so clearly the mod el 
for The Prisoner in which McGoo- 
han played the title role and alan 
produced. There are no such good 
reasons for showing odd episodes 
from The Buccaneers, The Adven- 
tures Of Wnham Tell, The Persuad- 
ers and a lot of other ATV series 
which are banal, repetitive and best 
forgotten. They looked like PoJy- 
fflla, shoved in to CD gaping sum- 
mertime cracks. 

Is this all cause or effect? Are 
these heaps of repeats and ghastly 
pilots pushed at us in August 
because everybody who can afford 
to has left for Tuscany (or, for a 
touch of real class, Umbria) or do 
all those people shoot off to Italy 
because August is a dead month, 
not least on television? Whether the 
chicken or the egg came first, it is 
time the broadcasters gave up their 


nasty habits end accepted that even 
though Coronation Street attracts 
“only" 16m viewers in August 
instead of 19m in the winter. 16m 
people are not to be sneezed at 
Having said which, the autumn sea- 
son is creeping in even as I write. 
Sunday brought the first of a new 
season of “Screen One” filmed dra- 
mas on BBC1, A Breed Of Heroes, 
written by Charles Wood. Con- 
cerned with a British Army unit in 
Northern Ireland in 1971. this has 
been widely described as a comedy 
but is surely no such thing. Wood, a 
one-time regular soldier, seems to 
be simultaneously fascinated, 
impressed and appalled by profes- 
sional soldiers and soldiering. He 
wrote the movie The Charge Of The 
Light Brigade and - his most out- 
standing work to date - Tumble- 
down. Like those. A Breed Of Heroes 
is concerned with the paradoxes of 
military behaviour; obedience »nri 
rebellion, valour and stupidity, bru- 


tality and compassion. The central 
character, young Lt Thoroughgood, 
is not the most memorable. It is 
Nicholas Farrell's Lt Col Cowrie 
who sticks in the mind, the man 
who is mad enough to scream at the 
gravy in the officers’ mess but sane 
enough to declare of the local popu- 
lation “l swear I’m going to make 
them behave like human beings". 
The main mistakp with this drama 
is to assume it is about Ireland: it is 

about the military mind. 

W e have also seen the 
start of Channel 4’s 
series 21st Century Air- 
port. about Kansai 
International, which seems to be 
sailing dangerously close to hagiog- 
raphy where architect Renzo Piano 
is concerned; and, on BSC2. the 
first episode in the American com- 
edy hit Murphy Brown. Given the 
scarcity of good comedy, it is diffi- 
cult to understand the idea of 


screening this at a time - six 
o’clock on Mondays - when most 
people are still travelling home. 
Most promising of all we have seen 
the beginning of BBC2’s eight-port 
series White Heat which is 
described as “charting the history 
of technology" but which turns out 
to be nowhere near as dry and edu- 
cational as that makes it sound. 
The opening episode made the point 
that the difference between man 
and other anima ls is not tool use 
totters swim on their backs, holding 
flat stones on their chests to use as 
anvils for smashing open mussel 
shells) but the symbolism which is 
built into so many of man's tools, 
even when they are as seemingly 
utilitarian as, say, a gun. 

Tonight brings the first episodes 
in BBCl's new drama series about 
dustmen. Common As Muck, and 
ITV's drama about politics, sex 
scandals and arms dealing. Faith. 
Give the broadcasters a week or so 
and they will be lobbing new pro- 
grammes at us so fast that none of 
us will be able to keep up. Politi- 
cians may have fought their way 
clear of the old boom-bust cycle but 
not broadcasters. This is the way 
they believe things should be: fam- 
ine in August and glut in Septem- 
ber. 



i cartel 




r. 






Intoxicatingly poetic: Alsling O'Sullivan (left) as Pegeen and Aidan Gillen as Christy in Lynne Parker's new staging at the Almeida 


Theatre/Alastair Macaulay 

The Playboy of the Western World 


Andrew Clark concludes a two-part report 
from Switzerland's premier music festival 

Liberating theme 
for Lucerne 


W atching and hear- 
ing JJU. Synge's 
celebrated play 
The Playboy of 
the Western World - in my case 
for the second time in IS days 
- is an astonishment So sim- 
ple a story, dramatised with 
such surprising ambiguity. 1 
have plenty of reservations 
about Lynne Parker's new 
staging at the Ahmrfda, but I 
take lt that die foil-throated 
approval of the first-night 
audience denotes pleasure in 
tiie play itself. Which is as it 
should be. 

The most vital of all the 
play's layers is its language. 
There is tiie infectious skill 
with which Synge malms ordi- 
nary Irish talk into sicatiii g ly 
poetic. And it is Christy 
Mahon, the lying playboy, 


whose talk is the most infec- 
tious of all: "... there's tor- 
ment in the splendour of her 
like, and she a girl any moon 
of midnight would take pride 
to meet, facing so uthwa rds on 
the heaths of Keel.” Not that 
Ms words are all lies. From his 
capacity for poetry we glimpse 
Ms capacity for courage; and it 
is he who changes mo6t during 
the play. 

The finest poetry arises from 
the romance between Christy, 
the dark starving stranger 
who arrives from the cold, and 
Pegeen Mike, the daughter of 
this house in County Mayo. 
Sometimes Synge makes their 
love sound as predestined and 
potent as if they were Sieg- 
mnnd and Stetfinde in Wag- 
ner’s Die WalkOre - and yet he 
also satirically debanks it. For 


this is only County Mayo, 
where people, ineluding 
Pegeen, are daft enough to 
hero-worship Christy for his 
tale of having killed Ms own 
father. And he is only Christy, 
whose lies may make Mm the 
all-conquering "playboy” on 
his arrival, but who is still 
scared of the father who is 
only too alive. Synge has ns 
fangii at all t hese characters - 
up to a point The final, beau- 
tiful twist of Ms play. Is that 
their base coal can indeed be 
turned to diamond. For 

Christy really does win the vil- 
lage games, and then does beat 
his father; and Pegeen really 
has lost her heart to him. 

Lynne Paxfcer*s direction has 
great virtues. All the charac- 
ters are three-dimensional; 
Christy (Aidan Gillen) is, cor- 


rect! y, not the gorgeous hunk 
that the village women all 
make Mm OUt to be; and the 
loneliness of Pegeen and 
Christy is unusually to u c h i n g . 
On the other hand, the produc- 
tion’s tempo is frequently too 
deliberate, its tone too care- 
fully distilled. Where Synge’s 
Vnwg cry out to be spoken with 
spirit and speed, they are often 
here taken slowly and softly. 

Other reservations? Christy, 
on arrival, is too dean; every- 
thing and everybody (save 
Pegeen) looks - hi Kathy Stra- 
chan’s designs - too prosper- 
ous and modern for "the wild 
coast of Mayo in 1907”; 
Pegeen’s father and the other 
Mayo men are too sober; and 
Pegeen and the Widow Quin 
(Gina Moxley) are sometimes 
inaudible. And to frame the 


play with one of McCormack's 
Irish-soug records - between 
scenes as well as at the start 
and end - adds a heavy note of 
polite nostalgia not to be 
found in Synge's play- 
There are, none the less, 
rewards enough here. Until 
Christy’s exit, Alslan O’Sul- 
livan Mings Pegeen to life - 
her boredom, longing, temper 
- with first-rate body-lan- 
guage. Gillen is pretty well the 
kind of raven-haired shrimp 
that Synge's playboy should 
be, a weak son whom every 
woman will motheringly 
adore, yet with just enough 
steel to surprise. And at every 
point the absence of Oirish 
cuteness and blarney Is pure 
tonic. 


Almeida Theatre, London Nl 


L ucerne has long prided 
itself on its programme 
themes, but few have 
been so liberating or so 
intelligently pursued as this 
summer’s “Forms of Interpre- 
tation". At first glance, it 
seemed little more than a con- 
venient way of wrapping up 
whatever was available on the 
international festival circuit. 
After all when is murfral per- 
formance not a form of inter- 
pretation? 

On d «yr mammaBnn, the 
theme hag dearly s timulated 
the imaginati on of Lucerne's 
festival director, Matthias 
Bamert. At one extreme, he 
invited a down and an “alter- 
native" musician to give their 
own bizarre interpretations of 
traditional concert form. At 
another, he devoted a whole 
evening to orchestral arrange- 
ments and transcriptions, 
those dubious vehicles which 
composers use to interpret the 
thoughts of their noble prede- 
cessors. 

Gennady Rozhdestvensky 
conducted one bloated hybrid 
after another with impish plea- 
sure, but it was hard to d ec i d e 
which was worse - Hamilton 
Hatty's soporific suite from 
Handel's Fireworks Music, or 
the turgid orchestration which 
Liszt made of the slow move- 
ment from Beethoven’s Arch- 
duke trio. The more sound you 
add, the more you bury the 
spirit of the original. The only 
composer to emerge with 
credit was Schoenberg, whose 
subtle, respectful arrangement 
of two Bach chorale preludes 
underlined tiie whole point of 
interpretation - to divine tiie 
character of a work, and filter 
it through the personality of 
the interpreter. 

Ravel and Webern, two other 
master-arrangers, were well 
represented elsewhere in the 
festival. So too were Beeth- 
oven’s Leonore overtures - a 
vivid example of a composer 
Strug gling to inter pret hfmfielf. 
And there was no shortage of 
period-instrument specialists 
to illustrate the chang in g fash- 
ions of in t er p retation. But the 


biggest single interpretative 
focus was Winterreise: Peter 
Schreier sang the original 
Schubert; Hans Zender and 
Klangforum Wien presented a 
“composed interpretation" of 
the song-cycle; and a new Win- 
terreise opera received its 
premiere. 

With music by the Austrian 
composer Ingomar GrQnauer 
and a libretto by Francesco 
Mideli, the opera gives a 20th 
century political resonance to 
the chill despair described by 
Schubert Set in the Pyrenees 
in September 1940, it is a psy- 
chological study of the German 
poet Walter Benjamin, on the 
night before he committed sui- 
cide while fleeing from the 
Nazis. In 11 interconnected 
scenes, he haUnrinato; dreams 
of the past, and sways between 
ftp angels of ftfe and death. 
The music, hyper-expressive 
rather than poetic, is scored for 
small orchestra and chorus, 
and maintains a lean Bergian 
flow. Its impact was considera- 
bly enhanced by Philipp Him- 
. metmann's semi-abstract pro- 
duction and the vivid 
performance of the American 
tenor Nell Wilson. 

T hat was one of the 
more original “Forms 
of Interpretation” at 
Lucerne this summer. 
Without being dogmatic, the 
theme underlined again and 
again that interpretation is 
never definitive, it can never 
be fixed. In an age which likes 
to see music recorded in tab- 
lets of stone, it was a salutary 
reminder. 

The choice of Klaus Huber as 
composer-in-residence was a 
mixed blessing. A neat and 
sprightly 70-year old who has 
spent much or bis pro fessional 
life outside his native Switzer- 
land. Huber has had more 
influence as a teacher than as 
a composer (Brian Feraey- 
hough being his best-known 
pupil). His music is difficult 
and expensive to perform, and 
does not sit easily in main- 
stream concert programmes. 
The festival did Its best by 


commissioning a piano con- 
certo, which Andras Schiff 
played In the same programme 
as Mozart's K595. Entitled 
Intarsi, it tries to echo a 
Mozartian world in a succes- 
sion of trills and half-tones, 
like a precisely calculated min. 
iature. But it offers the soloist 
little more than sophisticated 
doodling. 

In other events, Huber's 
idiom came over as weari- 
somely dated. His idealistic 
engagement with politics and 
religion was represented by a 
performance in the HoDtindie 
of Condones de Circuit} Gyrante 
(1985), and a film of the 1983 
Donaueschingen premiere of 
the oratorio . . . Errtiedrigt, gek- 
nechtet, verlassen, verachiet . . . 
Both require a vast auditorium 
to create the necessary spatial 
effects, and both employ a nar- 
rator to dec laim portentous 
texts, against a background of 
gloomy choral intoning. Both 
sound like muzak for purga- 
tory - a complete contrast to 
Huber's small-scale works, of 
which the soulfld, sugges tive 
Plante for viola d’amore (1950) 
was the most impressive. Les 
Jeunes Solistes and Ensemble 
Recherche were the faithful 
interpreters. 

My own festival impressions 
were dominated by Felicity 
Lott's ravishing account of 
Chausson’s Pofrne de l 'amour 
et de la mer, accompanied by 
the Suisse Romande Orchestra 
under Annin Jordan; and by 
Heinz Holliger conducting the 
Deutsche Kammerphilhar- 
monie in Mozart's Prague Sym- 
phony (in the same programme 
as the Huber piano concerto). 
Holliger’s artless podium 
manner, his natural sense 
of style and sheer verve 
were a joy to behold, because 
they transmitted themselves 
Intuitively to the players and 
were placed entirely at the 
service of the music. Now there 
was an interpretation to 
remember. 


The Lucerne festival runs 
unto Saturday. Box office: tel 
(41) 233080; fax (41) 239464 


International 

ARTS 

GUIDE 


BESANCON 


i town of Besangon is 
\ in the musical world for 
iots" competition, but this 
aen turned into a biennial 
(over, the annual music 
; developed a momentum 
reflected In the high 
irtists on this year's 
i. Tonight TM Fetfner 
Bl. Fri: CoHn Davis 
kesden Staatskapelle in 
Feber, Strauss and 
, Sat II Giartiino Armonico 
j| and Handel, with 
jiliemette Laurens. N®d 
el Dalberto piano reciteL 
I runs til! Sep 16 


L ^ 

opening production of the 
i new dance drama on 
: Affair, devised by 
yte with musk: by Alfred 
nd choreography by 
jv (next performances 

^repertory also Includes 


Les Contes d’Hoffmann and II 
Guarany, an opera by 19th century 
Brazilian composer Antonio Cartos 
Gomes (0228-773667) 


■ COLOGNE 

PMlharmonie Fri, Sat Marcello 
Viotti conducts Cologne Radio 
Symphony Orchestra in works by 
Respighi, Bartok and Hindemith, 
with vWln sokNst Kyoto Shikata. 
Sun: Esa-Pekka Salonen conducts 
Los Angeles Philharmonic Orchestra 

in Beethoven, Elliott Carter and 

Sibefius. Mon; Brahms’ German 
Requiem (0221-2801) 

Opemhaus Sep 18: Cologne 
Opera’s 1994-5 season opens with 
first night of new production of 
Puccini's Trittico, conducted by 
Janes Conion and staged by WiBy 
Decker (0221-221 8400) 


■ DRESDEN 

SemperoperToriigm. Fri, Sure new 
ballet mixed Ml. Tomorrow, next 
Tues: Aribert Reimann’s opera 
Meiusine. Sat Die Zauberflflte. Sun 
morning; Cofin Davis conducts 
Dresden Staatskapelle in 
Beethoven’s Sixth Symphony and 
Brahms' First Mon: DerfHegende 
Hollander (0351-484 2323) 
Kufturpalast Sat and Sun; Philippe 
Entremont conducts Dresden 
Philharmonic Orchestra In works by 
Richard Strauss, Andte Previn 
and Shostakovich 
(0351-488 6866) 


■ FRANKFURT 

Alto Oper A new chamber opera by 
Wolfgang Rftm, entitled Serapbin, is 
premiered tonight in the Mozart SaaJ 


(repeated tomorrow and Fri), one of 
several works comissioned for this 
year's Frankfurt Festival. Tomorrow 
In Grosser Saak Sahu Inbal 
conducts Frankfurt Radio Symphony 
Orchestra and Berlin Radio Chorus 
in works by Bloch and Schoenberg, 
with vocal soloists. 

Next Mon and Tues: Esa-Pekka 
Salonen conducts Los Angeles 
PhBiannonic Orchestra in two 
programmes, including symphonies 
by Lutoslawskl, Sfoefius and 
Bruckner. Next Tues (Mozart SaaQ: 
Hans Peter Blochwitz song redtaL 
Next Wed: Mrtsuko Uchida piano 
recitaL All these events form part 
of the Frankfurt Festival, which 
continues till Oct 3 
(069-134 0400) 

Oper The 1994-5 season begins on 
Oct 11 with Herbert Wernicke's 
production of The Ring, which wiH 
be performed in three cycles during 
October (069-236001) 


■ GOTHENBURG 

• Neeme Jtirvf conducts the 
Gothenburg Symphony Orchestra 
tonight and tomorrow in works by 
Beethoven, Tubin and Brahms, with 
piano soloist Leif Owe Andsnes 
(031-167000) 

• Gothenburg's new harbourside 
opera house opens on Sep 30 with 
the first of three gala performances. 
The first opera production is 
BtomdahTs Antara (1959), opening 
Oct 15 (031-131300) 


■ HAMBURG 

MusMi&Bb Tonight Esa-PeWte 
Salonen conducts Los Angeles 
PhSharmonic Orch e s t r a In works by 
Beethoven. Elliott Carter and 


Sibelius. Sab Andreas Haefliger 
piano recital. Sun: North German 
Radio Symphony Orchestra plays 
Zemfinsky and Schumann 
(040-354414) 

Staatsoper Tonight It barbiere di 
Stviglia. Tomorrow, Sat EntfOhrung. 
Frfc U trovatore. Sure Henze's The 
Bassarids (040-351721) 


■ HELSINKI 

• Bgar Howarth conducts the 
London Sbifbnietta tonight and 
tomorrow in works by Knussen, 

Tumago, Birtwistle and other 
contemporary British composers, as 
part of the Helsinki FestivaL 
Francisco Araiza gives a song recital 
on Fri, and Graeme Jenkins 
conducts the Finnish Radio 
Symphony Orchestra on Sat in 
Bgar, Berkeley and Walton. The 
festival ends on Sun with Iannis 
Xenakis' musical version of the 
Oresteia (664466) 

• This month's repertory at the 
Helsinki Opera includes the 
Bourmeister production of Swan 
Lake, Carmen, La nozze di Figaro 
and Lohengrin. A new production of 
Joonas Kokkonen's opera The Last 
Temptations opens on Sep 23 
(4030 2211) 


■ LEIPZIG 

Gewandhaus The Gewandhaus 
Orchestra opens its new season of 
concerts tomorrow and Fri with a 
programme of Dukas. Mozart and 
Brahms conducted by Its 
long-sarving music director, Kirt 
Masur. The violin soloist is Frank 
Peter Zimmermann. Sat Polyansky 
Chorus of Moscow 'm 
Rakhmaninov's Vespers. Sun 


morning, Mon evening; Daniel 
Nazareth conducts Middle German 
Radio Symphony Orchestra in 
Debussy, Mozart and Bertiaz, with 
vioWn soloJst Ines KreuteJ 
(0341-713 2280) 

Opemhaus The first new production 
of the season is Salome, conducted 
by Jiri Kout and staged by Nikolaus 
Lehnhoff, with a cast headed by 
Nancy Gustafson, Anja Slt{a and Falk 
Struckmann. First night is on Sat 
repeated Sep 14 and 18. This 
month's repertory also includes The 
Merry Widow, Tosca, Swan Lake 
and the Kanderand Ebb musical 
Cabaret (0341-126 1261) 


■ MUNICH 

Gasteig Sergiu Celibidache 
conducts the opening concerts of 
the Munich Philharmonic Orchestra’s 
new season on Sep 10, 12, 13 and 
15. The programme consists of 
Bruckner’s Seventh Symphony. 
Celfoidache also conducts a French 
programme on Sep 23, 25, 26 and 
28. Georg Solti conducts the Israel 
Philharmonic on Sep 22, and Anne 
Sophie Mutter gives a recital on Sep 
27 (089-4809 8614) 

Staatsoper The 1994-5 season 
opens on Sep 21 with a revival of 
Der RoeenkavaDer starring Felicity 
Lott The season includes new 
productions of Don Giovanni (Oct 
31), The Excursions of Mr Broucek, 
Henze's Der junge Lord, Simon 
Boccanegra and Parsifal 
(089-221316) 

Herkufesseal der Residenz 

Maurizio Podini gives the first 
celebrity recital of the season on Fri, 
followed by Sviatoslav Richter on 
Sep 13, Alfred Brendel on Sep 24 
and 26, and Carlo Bergonzi on Sep 


30 (089-299901) 


■ OSLO 

Konserthus Tomorrow: Paavo 
Berglund conducts Oslo 
Philharmonic Orchestra in works by 
Sibefius, Strauss and Shostakovich. 
Next Thurs and Fri: Mariss Jansens 
conducts Mozart and Beethoven. 
Sep 22 and 23: Oslo Philharmonic 
75th anniversary concerts 
(2283 3200) 


■ STOCKHOLM 
Royal Opera Tonight, Sat afternoon, 
next Tues and Wed: Royal Swedish 
Ballet in Natalie Conus's Swan Lake. 
Tomorrow, Mon: Tosca. Fri; Ingvar 
Lid holm's Strindberg opera A Dream 
Play. Sep 15: first night of new 
production of Aida (tickets 
08-248240 information 08-203515) 
Konserthuset Tonight Gennady 
Rozhdestvensky conducts Royal 
Stockholm PhHharmonk: Orchestra 
in works by Aulln, BOrtz and 
RangstrSm (tickets 08-102110 
information 08-212520) 


■ STUTTGART 

• Gabriele Ferro conducts the 
StBatsorchester in a Stravinsky and 
Prokofiev programme at the 
Liederhalle on Sun morning and 
Mon evening. The opera and ballet 
program m e at the Staetstheater 
begins on Sep 17 with a revival of 
Monteverdi’s Ultsse (0711-221795) 

• The Ludvrigsburg Festival 
includes the Stuttgart Ballet Sep 
18-20, a song recital by Dmitri 
Hvorostovsky on Sep 23 and a 
piano recital by Murray Perahia on 
Sep 24 (07141-939610) 


ARTS GUIDE 

Monday: Berlin, New York and 
Paris. 

Tuesday: Austria, Belgium, 
Netherlands. Switzerland. Chi- 
cago, Washington. 
Wednesday: France, Ger- 
many, Sc an dinavia. 

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

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 

(Central European Time) 
MONDAY TO FRIDAY 
NBC/Supar Channel: FT Busi- 
ness Today 1330; FT Business 
Tonight 1730, 2230 

MONDAY 

NBC/Super Channel: FT 
Reports 1230. 

TUESDAY 

Euro no ws : FT Reports 0745, 
1315. 1545, 1815. 2345 

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY 

NBC/Super Channel: FT 
Reports 1230 

Sky (tows: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News: FT Reports 0430, 
1730; 





9 





X 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 


Edward Mortimer 


r 


While doing 
voluntary ser- 
vice as a teen- 
ager in French- 
speaking 
Africa. I 
shocked a Sen- 
egalese friend, 
a primary 
school teacher, by urging on 
him the virtues of contracep- 
tion. “Faut pas empecher les 
gasses de naitre , wai f,” he 

expostulated: You mustn't stop 
kids being born. (Wai!, an 
all-purpose vernacular excla- 
mation. added emphasis to his 
statement) 

A Moslem, though by no 
means a fundamentalist, my 
friend had unwittingly given a 
succinct summary of Catholic 
doctrine. 1 had trouble with it 
then, and I have trouble with it 
now. I've always thought the 
Catholic Church has a better 
case on abortion than most lib- 
erals and feminists are willing 
to allow: it hardly makes one 
an irrational fanatic to 
describe the deliberate destruc- 
tion of an embryo human 
being as the “taking of human 
life". But the Church weakens 
its case enormously by push- 
ing it back before conception. 
At that stage there is no indi- 
vidual human life to be taken; 
only a myriad potential com- 
binations. almost all of which 
nature will rule out anyway. 
Nor is it obvious that the 
methods of avoiding concep- 
tion which the church recom- 
mends are any more “natural" 
than those it condemns. 

At the Cairo conference on 
population and development, 
Vatican delegates are strug- 
gling to remove “pregnancy 
ter mina tion" from the list of 
things covered by “reproduc- 
tive healthcare" in the UN 
draft document and to salvage 
a phrase about -taking appro- 
priate steps to help women 
avoid abortion, which in no 
case should be presented as a 
method of family planning". 
Vatican delegates have wisely 
avoided taking a stand on the 
contraception issue. They are 
not helped by TV footage from 
the Philippines, where last 
month Catholics, led by Cardi- 
nal Jaime Sin, demonstrated 
against the conference and 
their government's family 
planning policy, with banners 
proclaiming: "Contraception = 
abortion = murder.” 

Similarly the conference's 
organisers must have been less 
than pleased with newspaper 
headlines yesterday suggesting 
that Mrs Gro Harlem Brund- 
tland, the Norwegian prime 


False 
alarm 
in Cairo 

Women’s 
education, not 
ideology, is key 
to population 
control 

minis ter, won a standing ova- 
tion by calling for abortion to 
be legalised worldwide. They 
have taken pains to establish 
that this is not the confer- 
ence's agenda. Mrs Brundtland 
herself complained that the 
agenda had been misrepre- 
sented. suggesting that the 
term “reproductive healthcare” 
could not “possibly be read as 
promoting abortion as a means 
of family planning”. But she 
clearly meant to take on the 
Vatican with two of her state- 
ments: that “morality becomes 
hypocrisy if It means mothers 
suffering or dying in connec- 

It is a false quarrel 
as each side 
attacks the other 
for a position it is 
not defending 

tion with unwanted pregnan- 
cies and illeg al abortions and 
unwanted children”; and that 
morality cannot “only be a 
question of controlling sexual- 
ity and protecting unborn life”. 

It is a false quarrel about a 
false alarm. A false quarrel, 
because each side is attacking 
the other for a position which, 
in this conference at least, it is 
not attempting to defend. And 
a false alarm because the cur- 
rent prospect for world popula- 
tion growth is less catastrophic 
than the headlines suggest 
In an essay just published in 
the New York Review of 
Books, Prof Am arty a Sen, a 
leading expert on the econom- 
ics of famin e, reminds us that 
the rate of world population 
growth has fallen in the Last 
two decades from 13 to 1.7 per 
cent, and “is expected to go 
steadily down until the size of 
the world's population 
becomes nearly stationary". 


The number at which it win 
eventually stabilise, around 
lObn, still sounds alarmingly 
high. It is. but not - as many 
imagine - because most of 
those people will be hungry 
and poor per capita incomes 
are rising and food is getting 
cheaper in those parts of the 
world where most of them are 
being born. The danger is the 
opposite: sooner or later most 
of them will be able to afford 
western lifestyles and con- 
sumption patterns, putting an 
unsustainable strain on the 
world environment. 

That problem will not be 
solved by population control 
alone, but anything we can do 
to accelerate the Tall in the 
birth rate should help to make 
it more manageable. But Prof 
Sen makes a strong case that 
coercive or “override” methods 
- those in which “the family’s 
personal decisions are overrid- 
den by some agency outside 
the family" - are unnecessary 
and perhaps ineffective, as well 
as being Inhuman e The fa ll in 
China's birth rate since 1979 
may, he suggests, be due less 
to the authoritarian one-child 
policy than to “more collabora- 
tive and participatory” policies 
which have made education 
and jobs outside the home 
available to many Chinese 
women. The Indian state of 
Kerala, with 29m people, has 
reduced its birth and fertility 
rates below those of China 
without any state coercion. It 
is among the poorer Indian 
states (so economic growth is 
□ot in itself the solution, as is 
sometimes argued), but it 
resembles China in having 
“high levels of basic education, 
healthcare and so on”. Most 
strikingly, it has higher rural 
literacy rates, male and female, 
than any Chinese province. 

China and Kerala have the 
advantage of being neither 
Moslem nor Catholic. But the 
birth rate is also frilling rapidly 
in Iran (where there is good 
basic healthcare, and the 
authorities came round to fam- 
ily planning in 1988) and in 
most of South America. The 
Tablet, the British Catholic 
magazine, even claimed last 
month, with a certain chutz- 
pah. that because it favours 
women's education “the Catho- 
lic Church should be regarded 
as one of the most effective 
organisations in the world for 
reducing the rate of population 
growth". In other words, the 
Pope should be congratulated 
for educating his female follow- 
ers to the point where they can 
ignore his advice. 


O ver the weekend, 
the threat of strike 
action was enough 
to win a 55 per cent 
pay increase for the unionised 
employees of Romania’s public 
television station. Bulgarian 
trade union leaders may take 
industrial action in the 
autumn to protest at the gov- 
ernment's austere social poli- 
cies. And In Russia coalminers 
are threatening to go on strike 
because of month-long delays 
in the payment of their wages. 

This rash of industrial action 
throughout eastern Europe sig- 
nals a change in the role 
played by unions in the post- 
communist world. 

In the initial rush to build 
market economies that fol- 
lowed the collapse of commu- 
nism. unions seemed to he rele- 
gated to a bit part But there 
are signs that post-communist 
trade unionism is now begin- 
ning to find its feet “We are 
like a youngster Learning very 
fast" says Mr Richard Falbr, 
president of CMKOS, the Czech 
trade union confederation. 

The reformed former com- 
munist unions and those that 
have been set up more recently 
face an uphill struggle to win 
credibility with employers and 
workers in an uncertain eco- 
nomic climate. 

Western trade unions would 
recognise the low prestige of 
many of their opposite num- 
bers in the east and the con- 
centration of their influence in 
a shrinking public sector. 

“Trade unionism has a bad 
image from the decades when 
it was just a transmission belt 
in the factory for [Communist] 
party instructions," says Mr 
Falbr. Even basic trade union 
concepts, such as “worker soli- 
darity”, have negative associa- 
tions - conjuring up the image 
of having to work an extra Sat- 
urday morning shift for some 
far-away, anti-imperialist 
struggle. 

In Russia, where the unions 
have changed little since 
Soviet times, a recent poll 
found that 73 per cent of work- 
ers thought them ineffective at 
defending workers' rights. The 
existence of state-imposed 
incomes policies - in the form 
of limits on wages - in Russia 
and elsewhere in the region 
adds to the feeling that the 
unions make little difference in 
workplaces. And continuing 
rows between the old unions 
and the new reduce what little 
collective power the unions 
might be able to muster. 

Moreover, the labour market 
shake-out - supported by most 
mainstream political parties - 
does not make fertile ground 
for trade unionism. Excluding 
Russia, where formal onem- 


Eastern comrades 
strike back 

Unions in the ex-Soviet bloc are regaining some 
vigour, say David Goodhart and Chrystia Freeland 





Everybody out: a rash of industrial action in eastern Europe signals a change of role for the unions 


ploymeut is still less than 3 per 
cent, employment has fallen by 
an average of 20 per cent in the 
former eastern bloc in the past 
four years and average real 
wages in most countries are 
only now regaining their pre- 
transition levels. In Russia, 
Ukraine and some other coun- 
tries of the former Soviet 
Union, they are still substan- 
tially below that IeveL 
Despite guidance from west- 
ern unions on recruitment 
strategy, unions re main weak 
to non-existent in the private 
sector, which now employs 
more than 50 per cent of work- 
ers in more advanced states 
such as Poland and Hungary. 
“Subject to state regulations, it 
appears that private employers 
can set pay levels, pay struc- 
tures and employment condi- 
tions unilaterally," says a 
recent World Bank survey, 

Mr Guy Standing, head of 
the International Labour 
Organisation's Eastern Europe 
unit in Budapest, says this is a 
worrying long-term trend. But 
there are countervailing fac- 
tors - economic and political - 
which should ease his fears. 


As big. strongly unionised 
plants are moved into the pri- 
vate sector through accelerat- 
ing privatisation programmes, 
the union foothold there may 
strengthen. Thanks to the dis- 
tribution of shares to workers 
in many countries, as part of 
the privatisation process, sev- 
eral large companies now have 
an important element of 
worker ownership. The better 
organised unions are exploit- 
ing that to influence manage- 
ment decisions. 


F urther, despite the 
free-market rhetoric of 
many governments, 
there are national tri- 
partite commissions (govern- 
ments. unions and employers) 
of varying influence in most 
countries. The newly elected 
Polish government has raised 
the status of its tripartite com- 
mission. Similarly, the left of 
centre government in Hungary 
wants to strengthen the voice 
of organised labour in revising 
the country's labour law. 

In pay setting, too, union 
influence may be growing. 
Though their strength lies in 


the public sector, unions may 
be affecting wage levels in the 
private sector. Mr Simon Com- 
mander of the World Bank 
says average wages in the two 
sectors are almost identical 
throughout the region, with 
the exception of Russia. 

At workplace level, unions 
are scoring successes In some 
countries. Mr Christoph Drzew- 
icki, a senior official of Solidar- 
ity, says the Polish union 
recently won an important rec- 
ognition battle at Elgaz, a pri- 
vate sector heating company. 
He also points to the new 
co-operation between Solidar- 
ity and its ex-communist rival 
OPZZ, in a strike, recently 
ended, at the Italian-owned 
Lu echini steel plant 

In Russia, unions may be 
weak but they remain relevant 
in millions of people’s lives. 
The enterprise remains an 
important source of welfare 
services and even of food and 
housing, and in most big 
plants the unions are still 
allowed to play an important 
role by managers, who see 
maintaining high employment 
levels as a crucial part of their 


job. The Russian Confederation 
of Trade Unions, with more 
than 60m members, lobbies 
alongside managers to maxim- 
ise subsidies. 

The mass membership and 
substantial resources of the 
unions also give them potential 
clout in a region where politi- 
cal parties hove only tiny 
memberships. The percentage 
of workers in unions ranges 
from a low of about -H) per cent 
in Poland to a high uf 75 per 
cent in Bulgaria. 

The influence of unions in 
some pockets of the economy 
can be considerable. Workers 
in the Fiat and C.M plants in, 
respectively, Poland and Hun- 
gary have also been asking for 
wages to be raised in stages to 
western levels. Most foreign 
employers expect wages to 
rise, given the proximity of 
much better-paid western 
Europeans. 

In the Czech Republic, for 
example, Mr Falbr, the union 
leader, is pushing tuird to HR 
wage levels. “At present our 
productivity is about one-third 
western levels, but our pay is 
about one-tenth western levels. 
That cannot last," he says. 

Official Czech unemploy- 
ment is lower than anywhere 
in the region apart from Rus- 
sia. That is partly because 
wage and non- wage labour 
costs are lower than in Poland 
and Hungary (where non-wage 
labour costs are about 50 per 
cent of wages costs), unem- 
ployment pay is less generous, 
and there has been less corpo- 
rate restructuring. 

He rejects, however, the 
claim by union leaders else- 
where that the Czech unions 
arc among the weakest in the 
region. “We may have been 
less militant, but we still have 
a lot of influence.'' he says, 
pointing in a successful lobby 
to reform a recent pension law. 

In the long run, Mr Falbr 
would like to see Czech indus- 
trial relations following a Ger- 
man model of works councils 
in mm pantos and union repre- 
sentation on company boards, 
but he recognises this is some 
time away. Ottos, such as Mr 
Drzewicki of Poland's Solidar- 
ity, suggest that the French 
model - with low union pres- 
ence in factories and offices, 
but strong labour laws and an 
influential voice for labour at 
national level - is a more real- 
istic long-term option. 

Just as trade unionism in 
Asia has not followed practice 
in Europe or America, so in 
eastern Europe and the former 
Soviet Union a new model may 
emerge. Despite the tough 
times the unions are going 
through, one thing seems cer- 
tain: they are here to stay. 


' [i N 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

Fax 071 873 5938. Letters transmitted should be dearly typed and not band written. Please set fox for finest resolution 


UK ahead 
or alone 
in Europe 

From Mr Richard Brown. 

Sir, Whenever there is talk of 
a multi-speed Europe (“Europe 
at odds over integration", Sep- 
tember 3/4) there appears to be 
an automatic assumption that 
the UK would be in the slow 
lane. To examine just two 
areas where the UK is often 
labelled a laggard: the UK has 
implemented more social and 
employment directives than 
any other member state, and is 
the closest to meeting the con- 
vergence criteria for Emu. The 
multi-speed approach is 
already a fact of European life, 
and its recognition Is a prag- 
matic response to tbe chal- 
lenges of enlargement It is not 
the multi-speed approach 
which threatens tbe UK, but 
the danger that one of those 
speeds might be reverse. 

Richard Brown, 
deputy director general 
Association of British Chambers 
of Commerce, 

9 Tufton Street, 

London SW1P 3Q8 

From Dr Chris Terry. 

Sir, Two-speed Europe? The 
slow lane for Britain? Some 
analysts will feel the European 
issue is successfully marginal- , 
isetL Of late, UK policy seems ; 
to proceed by an adroit isola- 
tion of others. In fact, the pro- , 
cess is so subtle that we will 
shortly stand quite alone. And 1 
is this success? 

Chris Terry, 

EsseggerStr. 63. 

D-71067 Smdelfingen, 

Germany 


High cost of legal monopoly 


From Mr GreviHe Warwick. 

Sir, If Lord Mackay is to con- 
sider the appropriateness of 
legal aid for the Maxwell 
brothers he should also con- 
sider tbe reason why otherwise 
very wealthy people cannot 
afford legal representation in 
Britain's courts (“Cheap ride 
on trial”, August 30). 

The truth is barristers and 
solicitors have exploited their 


unique monopoly position to 
price everyone out of the mar- 
ket. Only government, with 
monopoly taxation powers, can 
provide the millions for fees. 

Ian and Kevin Maxwell are 
entitled to expect a fair trial 
and fair, reasonable and con- 
trollable legal costs. Under 
present conditions that is not 
possible, so legal aid must con- 
tinue to pour into the bottom- 


less pit of lawyers' earnings. 

This is now a serious politi- 
cal issue. How can it be that a 
single case and a mere handful 
of lawyers and their experts 
can mean financial wipe-out 
for most firms and practically 
all private individuals. 

Grevifle Warwick, 

MCS, Leycester House, 

46 Leam Terrace, 

Leamington Spa CV31 IBQ 


Resources wasted through energy policy 


From Mr DL Bubner. 

Sir, Mr David Porter's call 
for more competition in the 
European Energy market is to 
be welcomed (Letters, August 
31). 

However let us hope that 
moves to introduce more com- 
petition take account of the 
grave defects of energy deregu- 
lation as witnessed in the UK 
since electricity privatisation. 

The UK experience has seen 
the introduction of a system 
that gave the generators a 
broad portfolio of generating 
plant but no guaranteed mar- 
ket, and the regional electric 
companies secure markets but 
no plant The commercial deci- 


sions that stemmed from this - 
the dash for gas - effectively 
did for the UK coal industry 
because, although in the main 
cheaper than gas, the genera- 
tors ’ mark-up rendered pur- 
chase from this source by the 
regional electricity companies 
unattractive. 

Valuable coal resources and 
coal generating plant have 
been squandered on the back 
of this policy to the detriment 
of the consumer. 

Similarly, let os hope that 
any moves to greater energy 
price transparency in the Euro- 
pean Union allows for equal 
treatment between fuels, as 
compared to the UK situation 


| where the government's 
regime provides a substantial 
and anti-competitive subsidy to 
nuclear energy through the 
non-fossil fuel levy. 

Indeed, this leads to the sad 
fact that the UK purchases 
French nuclear electricity at 
substantially higher costs to 
the consumer than would be 
the case without the non-fossil 
fuel levy. 

D L Buhner. 
president, 

British Association of 
Colliery Management, 

BACM House, 

17 South Parade, 

Doncaster 
mi SDN 


Drucker ideas not such a rosy prospect 


From Mr Peter Kruger. 

Sir, Perhaps Samuel Britton 
has read something in Peter 
D Ricker’s latest venture. Post 
Capitalist Society, which [ 
missed - as the conclusions 
which he draws from the work 
seem very optimistic (“Aim 
at the climate, not the 


weather”, September 5). 

If Drucker Is read in conjunc- 
tion with Beyond the Limits, by 
Meadows and Meadows - 
inspired by the Cl ah of Rome - 
the idea of market forces pre- 
vailing in a world where global 
communications has produced 
ungovernable and perhaps. 


despite what Drucker suggests, 
unmanageable superstates is 
not such a rosy prospect 
Peter Kruger, 

DiffithursU 
Newark Close. 

Roystan. 

Herts SGS5HL 


Body Shop: a cowardly attack, and a salutary experience 


From Mr Michael P Day . 

Sir, The Body Shop's com- 
mitment to environmental, ani- 
mal welfare and conservation 
issues is well established. Is it 
not remarkable that in a world 
so consumed by avarice and 
capricious self-interest, the US 
presumes to enlighten us with 
a piece of such pure altruistic 

delight? 

John Entlne’s cowardly 
attack on the achievement of 
Anita Roddick (and Co) should 
be treated with contempt The 
market has responded thus 
and rightly so. 

The critically endangered 
Siberian, tiger would be one 
step closer to the edge were it 


not for the brave foresight and 
initiative of the Body Shop. A 
strange irony when a certain 
petroleum company of highly 
questionable environmental 
pedigree has all but discarded 
its tiger mascot on to the 
refuse tip of extinction. 
Michael P Day, 
chairman of the board of 
trustees. 

The Tiger Trust, 

Chevington, 

Bury St Edmunds, 

Suffolk IP39 5RG 

From Mr Rupert Pearson 
Sir, I refer to the letter from 
Mr Robin Bines and others 
("Allegations against the Body 


Shop lack any real evidence”, 
September 1 ). The letter could 
well have been written by 
industry in response to the 
"unproven allegations and the 
facts blown out of all propor- 
tion” which are so often lev- 
elled by the environmental 
movement against sectors of 
manufacturing industry. It will 
perhaps be a salutary experi- 
ence for the environmental 
movement to be subjected to 
the sort of treatment which it 
so often metes out to industry, 
frequently based on unproven 
allegations, selective “facts” 
and inaccurate information. 

I congratulate you in having 
the courage to publish the 


reports on the Body Shop 
which I have read with great 
interest. Perhaps it may lead to 
further critical questioning 
and challenges to other organi- 
sations parading their green 
credentials. 

For too long, industry and 
others who contribute to the 
health, prosperity and the 
well-being of society, have 
been on the receiving end of 
unsubstantiated green claims 
without the green movement 
and its claims being subjected 
to the same scrutiny. 

Rupert Pearson. 

43 Stag Green Avenue. 

Hatfield. 

Hertfordshire ALB SEB 


* 

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in 1 


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FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 


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FINANCIAL TIMES 

?° e Sonllwilk Bridge, London SE1 9HL 
TeL* 071-873 3000 Telex: 922186 Far 071-407 5700 

Wednesday September 7 1994 


T hey sit, gleaming and 

humming , qn the t rading 

floor of every large bank 
in the world. They are 
consulted by traders 
before decisions are taken to buy 
and sells bonds or shares. They 
trace curves plotting the price of 

Options, flip firwTirial mntrynh giv- 
ing the right to buy and sell other 
securities. They are “black boxes” 
the high-powered computers that no 
large hanir which trades securities 
can now afford to be without 
Software “models”, ran an these 
machines and used to analyse 
masses of data to predict prices, 
now have a substantial impact on 

financial market s By tpTHng hanlre 

which securities to buy and sell, at 
what price, they have become the 
new masters of many tr a din g floors. 
But they are now set for even 
greater recognition. Central banks 
and other banking supervisors 
worldwide are working on plans to 
allow banks to use their mod* 1 * to 
fix how much capital they need to 
keep in reserve to support their 
trading. 

The implications are large. By 
accepting the use of banks' own 
models in a regulatory role, supervi- 
sors would be taking a big step 
towards a new form of oversight 
Instead of the traditional close, 
human, tmwkMtifln of individual 
transactions, they would instead 
monitor the way in which banks 
use computers to control risk. They 
would do so as part of new capital 
requirements for trading activities. 

The financial impact of these new 
rules could be enormous. Since 
1388, when the Basle Committee of 
international bank supervisors 
agreed the first global standards on 
capital needed to back lending, 
banks have built up stronger 
reserves. They have also cut the 
types of lending, such 8S loans to 
companies, which are rated as 
requiring a lot of capital under the 
Racio accord. 

But the growth of banks’ trading 
activities in the 1990s has been 
encouraged by the fact that they are 
not yet required to allocate any cap- 
ital to cover the risks of trading in 
financial instruments. In practice 
ftp fink of dafimit nw securities is 
low — so that under RmIp rules only 
minimal capital needs to be allo- 
cated. Yet banks risk losses from 
falls in the price ctf securities - as 
they found to their cost this year 
when E ur o pean interest rates rose. 

Supervisors have wanted to plug 
this gap smee 1388. Them first effort 
to do so camp 18 months ago when 
the Basle group published its “mar- 
ket risk” proposals. Supervisors 
Says that these COUld add up to l 
percentage paint to the average 8 
per cent capital-to-assets ratio 
required for lending risks. This 
would have required big UK banks 
alone to hold a total of £400m mare 
capital, and could lead to banks 
restricting some forms of trading. 

The original Basle proposals pro- 
voked alarm arming banks. Instead 
of using what hanks regarded as 
state of the art modelling methods. 


Optimists 

in Ulster 


Mr John Major’s cool reaction to 
tiie “complete" ceasefire declared 
by the IRA last week is finely 
Judged. The prime minister's insis- 
tence an a copper-bottomed gnaw, 
antee that violence hjx hw»»n per- 
manently renounced is quite 
understandable. This is not a mat- 
ter of mere semantics. As the 
Northern Ireland secretary. Sir 
Patrick May hew, has intimated, 
the use of the word “permanent* 
is of less importance than the 
desirability of extracting an 
undertaking from the military 
wing of Sum F£in that it does not 
intend to take up arms a ge™ 
Anything less would feed the sus- 
picions of Ulster Unionists. 

The anxieties of Irish nationalist 
politicians are all the other way. 
Rush to embrace Mr Gerry 
Adams, their actions suggest, or 
the peace will be lost The presi- 
dent of Sinn Frin was seen by 
many only a week ago as the pub- 
lic face of a two-headed organisa- 
tion steeped in blood. Now the 
world is asked to regard him as 
the man who talked the ERA into 
laying down its weapons. The 
Irish view, reflected in Washing- 
ton, appears to be that that his- 
toric decision must be rewarded 
by at least the appearance of polit- 
ical momentum, or the conflict 
may be reigmted. 

Extraordinary scenes 

Whatever its merits, this argu- 
ment can be the only explanation 
of yesterday’s extraordinary 
scales in Dublin, when Mr Albeit 
Reynolds welcomed Mr Adams, 
airing with Mr John w»TTwn 1 to dis- 
cuss preparations for a "National 
Forum for Peace and Reconcilia- 
tion”. The Irish prime minis ter is 
undoubtedly devoted to ending the 
violence. So is Mr Home, who as 
leader of Ulster’s Social Demo- 
cratic aud Labour party has risked 
a great deal to bring the IRA/Shm 
Ffein into democratic politics. As 
to Mr Adams’s commitment, the 
jury is still out 

In short, yesterday's apparent 
rift between London and Dublin 
iwrt not damage the prospects fbr 
lasting peace, ft could indeed he 
hdpfl il. Nothing said by Dublin or 
Mr Adams will persuade the ter- 
rorists an the “loyalist" side to 
cease their murderous activities; 
what the British government says 
or does could be derisive. Each 
government must address its own 
set of intransigents according to 


its Own wmTi|yl»n<ys 

The British way ts. rightly, to 
avoid euphoria within the first 
few days of an IRA announce- 
ment . Mr Major may be at adds 
with the ultra-unionists within his 
own party, but be has the support 
of Mr Tony Blair, who has moved 
Labour away from its pro-nation- 
alist tot, and. for the liberal Dem- 
ocrats, their spokesman Lord 
Holme. Backed by the two princi- 
pal opposition parties, and his 
own cabinet, he should be able to 
resist the blandishments of 
well-meaning peacemakers in the 
US and Ireland. 

Self-determination 

Optimists may therefore regard 
the events of the past few days as 
constructive, provided that the 
fenm of the Irish-British declara- 
tion issued at Downing Street last 
December are not breached. The 
essence of that important docu- 
ment is that the right to self-deter- 
mination of the people of Ulster is 
recognised. 

On this page Mr Enoch Powell 
writes of a c onflic t of nationali- 
ties; the declaration stands as a 
guarantee that the people of the 
six counties will be ruled under 
the British crown unless a major- 
ity of them freely consent to a 
change. In those circumstances 
there will be a united Ireland; oth- 
erwise not If Sinn Ffiln rejects 
this, its entry into the 
process win not be permanent 

Perhaps both yjrtpg nfttimreiHc+ 
and lmfnniQfr naad ftirilwr wunHtig 
before they will accept the merits 
of the declaration. This will 
require much talking. Fortu- 
nately, there is that could 
be talked about 

In the spirit of the Anglohish 
agreement c o n cl uded by the them 
Mrs Margaret Thatcher , there is 
the prospect of allowing the peo- 
ple of Ulster to govern themselves, 
while reassuring the Catholic com- 
munity that the old Protestant 
ascendancy would not be restored. 
In today's language, what is 
required is a series of agreements 
that would construct a relation- 
ship of variable geometry. An 
elected executive in Belfast could 
negotiate cross-border arrange- 
ments with Dublin. Both could do 
political business with London. 
The possibilities could be limit- 
less. The risk is a collapse of the 
peace; the potential rewrar d a pe r- 
m anen t end to a long ni g h t m a r e. 


Mr Berlusconi’s 
looming deficit 


When Silvio Berlusconi promised 
voters an “Italian miracle" hack in 
March, resolving a fiscal crisis 
was probably not what he had in 
mind. But a pain-free solution to 
Italy’s structural debt problem 
would be just that The world's 
financial markets are not looking 
I for a miracle, but their lack of 
confidenc e will Inflict its own pain 
if the government does not start 
being similarly realistic. 

The Italian cabinet yesterday 
began the process of agreeing the 
details of the budget package it 
should present to parliament by 
the end of the month. Judging by 
some of the recent public squab- 
bles between ministers, the negoti- 
ations over how to finalise the 
budget plan announced In July 
win not be peaceful. But the mood 
outside, among financial inves- 
tors, is not tranquil either. 

Investors’ lack of faith in the 
Berlusconi government’s fiscal 
resolve has led to a steady rise in 
the gap between Italian and Ger- 
man long-term government bond 
yields. It alian long rates, now 
around 1 2 per cent, are some 470 
hwgjff points higher than German 
raws, compared to a gap of just 
over 300 at the beginning of the 
year. Stock prices have caught the 
ftflmp malaise: the Mi la n stock 
price index has fallen more than 8 
per cent over the past three 
months. 

Italy, of course, is not the only 
country to have sparked financ ial 


Indeed, at first glance the distrust 
of the markets seems overdone. 
The measures of fiscal retrench- 
ment achieved by Mr Berlusconi's 
predecessors helped make Italy 
the only country in the Group of 
Seven, apart from Japan, to rim® 
primar y budget surplus in 1993- 
This meant that revenue exceeded 
expenditure by some 2 per c ent of 
GDP. before deducting 
Yet Italy's more profligate past 
coupled with recession, mean that 
over a fifth of total spending te 
taken up with such payments, 
while the level of public debt, now 
the equivalent of more than 125 
per cent of GDP. continues to rise. 

Fiscal woes 

- It is not merely the sizeof 


Inflation has been subdued in 
recent months, and there is little 
to indicate that it will pick up in 
the near ftrture. The Bank of Italy 
sent its own rf gn^i that it would 
not allow monetisation of the 
country’s fiscal woes with its “pre- 
emptive" interest rate increase an 
August IL The action had a dual 
target, Mi* Berlusconi and the mar- 
kets. It certainly failed to reassure 
the latter the lira promptly fell to 
further record lows against the 
D-Mark. But this was largely 
because it is not dear that the 
message to Mr Berlusconi has hit 
j£s Tirflri r. 

Economic recovery 

Though economic recovery is 
now well under way, its delay in 
arriving helped to send the 1994 
budget deficit above its target 
level of Ll45,000bn. This means 
that tiie primary budget surplus 
for 1994 is Hkdy to be well under I 
per cent of GDP, and the debt, 
mice projected to stabilise in 1995, 
probably will not reach its peak 
until the following year at the ear- 
liest, at 130 per cent or more. 

Thp g o vernment's long-awaited 
response to this, the deficit reduc- 
tion plan aimed at saving 
L45,Q00ta over 4 years, is of the 
right order to keep file debt mi its 
previously intended path. As yet, 
however, the plan has been 
uncomfortably short on detail, and 
what detail there is hints at one- 




of systemic reform, above an of 
the bloated state pension system, 
which long-run fiscal health will 
require. 

It would take some soiling by 
the prime minister to convince a 

majority of the cabinet, and the 
public at large, of the need to 
return to these questions so soon 
after the pain of the last two 
years. The recovery is fragile, and 
Mr Berlusconi has made little 
effort to ready them for further 
sacrifice. Indeed, on economic 
matters, he maitrtainB much the 
determined stance against 
higher taxes that h e used to win 
over voters an the ca mp a ign trafl. 

The cantradictian between .what 
he must do and what he seems 
wining to do is not lost cm the 
ftwanrial markets. But falling 


John Gapper and Tracy Corrigan on the rise of in-house 
computers - rather than humans - as financial supervisors 

Byte of the new 
bank managers 



the same trading activities, it would 
distort competition. Bonks might 
also be able to rig their models to 
ensure that they needed less capi- 
tal. A free-for-all of this kind would 
be very alarming for supervisors. 

Supervisors have now drawn up a 
draft set of rules with which models 
would have to comply. This 
includes regulations on the number 
of years of past market movements 
against which banks’ portfolios 
would have to be tested- Supervi- 
sors will shortly start testing mod- 
els by running the some trading 
pattern through each model, and 
seeing if they produce a similar cap- 
ital requirement If they do not the 
framework win be tightened. 

There is no guarantee of success. 
Hie regulator which has come the 
closest so far to allowing the use of 
models to measure risk is the Secu- 
rities and Futures Authority in the 
UK. But the SFA only allows mod- 
els to translate financial derivatives 
into bonds and equities with compa- 
rable risks. These are then judged 
according to a set of rules similar to 
the original Basle list. The latest 
Basle approach is more ambitious. 


A llowing the comprehen- 
sive use of models envis- 
aged by bank supervi- 
sors would be tricky 
even if they were tried 
and tested. In practice, they are a 
recent innovation, and are still 
being developed. It is not clear that 
they can assess properly the risks of 
instruments such as options, the 
most complex form of derivatives. 
Some supervisors say options will 
have to be treated separately in new 
Basle proposals, which could under- 
mine their coherence. 

The supervisors are working 
against time. They would like to see 
common capital standards not only 
for banks across the world, but for 
both banks and securities firms. 
But capital requirements for Euro- 
pean banks and securities firms 
have been set in the European 
Union’s capital adequacy directive 
that will come into force in 1998. It 
could only be amended to fit with 
tiie Basle framework before then. 

But probably the greatest chal- 
lenge for bank supervisors is to 
ensure that they do not weaken 
management controls by allowing 
banks to use internal models. "It 
would be intolerable if a company 
started to market its models as 
"central bank approved”, says a 
supervisor. “People get booked on 
mathematics, but the most impor- 
tant thing is that the management 
unde rstands what is going on." 

Mr T ommaso Padoa Schioppa, 
chairman of the Basle committee, 
admits tha t there is a danger that 
approval of h anks ' models will be 
misunderstood. “If internal models 
were accepted. It would not amount 
to a relaxation of supervisory stan- 
dards. If there is a misunderstand- 
ing about this, it will have to be 
clarified,” he says. Black boxes 
already rule some bank trading 
floors; supervisors will have to 
watch how their influence spreads. 


the Basle supe rvisors proposed a set 
of predetermined rales to calculate 
capital requirements. Different 
products such as equities and bonds 
would be treated separately, in the 
case of bonds - a complex area - 
banks would have to allocate capi- 
tal to cover their risk of loss in 
of a set Of 13 ttmeframpg 

“The proposals camp from an on 
when you added up positions an a 
piece of paper," says Mr Steven Bel- 
linger, director of research at the 
State of New York hanking depart- 
ment “Banks had constructed ways 
[of using computers] to measure 

risk at no rnnall er pCTiffg and it 
seemed as if they would get no rec- 
ognition for that,” says Mr Mark 
BricfcaD, hand of derivatives strat- 
egy at US hank JJP. Morgan, which 
uses same of the most sophisticated 
computer lnmtolA. 

Such models have developed 
through npcpRgity . Because tog pric- 
ing of jnstrmnwihi such as financial 
derivatives — products that derive 


their value from that of an underly- 
ing security or index - depends on 
mathematical theory, hanks have to 
use models to understand them. 

Banks now use models to mea- 
sure the total risk of loss in trading 
portfolios. Mr Charles Taylor, exec- 
utive director of the Group of 30. an 
association of senior bankers, says 
thnt models ran not only aggregate 
different forms of risk but are 
“much more analytically rigorous 
than the old rules of Hmmh that- 
hanke rs used to use”. 

Such arguments lay behind the 
hanks’ objections to ™ug the Basle 
formulae instead of their computer 
models. They had two main com- 
plaints; 

First, it would add to their costs. 
Although hanks could re-write soft- 
ware to collect the data required by 
t>w» Basle committee, it would not 
be simple. Models add together the 
risks of different products, and give 
an immediate, rounded picture erf 
the total trading risk the bank is 


running, “ft is bard to collect extra 
data that puts a portfolio into differ- 
ent boxes." says one supervisor. 

Second, by treating all h anks 
equally, it might discriminate 
against the more sophisticated insti- 
tutions. R anks argued that they 
would have to hold less capital if 
they had better risk management 
methods. This argument was 
received sympathetically by super- 
visors. "Standards of sound practice 
are moving forward all the time, 
and we want to encourage h anks to 
be in the front line,” says another 
hank supervisor. 

These arguments persuaded the 
Basle committee to change its mind 
At mpptmg s in March and June, it 
decided to examine whether banks 
could use their own computer mod- 
els as an alternative to the standard 
rules. The difficulty for supervisors 
is to construct a framework for 
approving computer models. If rival 
banks’ models led to topm allocat- 
ing different amounts of capital for 


Ulster - not an issue for compromise 



B Peace is preferable 
to war, and persua- 
sion is preferable to 
force. Those are tru- 
isms which politi- 
cians need ' to 
PFK<iONA i *' BS P ec ^ - much 
rE VTFW L ‘ 0r m0re tban * 

— v - it ‘ w — anyone else. But 
those who voice doubts about 
so-called progress (progress to 
what?) being made as a result of the 
IRA ceasefire are not breaking that 
rule. They have solid reasons for 
their scepticism. 

The beginning of wisdom in 
approaching Northern Ireland is to 
clear mtnd of everything con- 
jured up by the term "sectarian”. 

ff terminology there must be, it is 
not Catholics who are ccmfirtarting 
Protestants - on that basis one 
ra uj d mak» no sense of ton voting 
pattern at elections - but Irish 
nationalists confronting unionists, 
ft is nationality, not race, not reli- 
gion, which is at stake. 


A taxing 
Olympian task 

■ Among the aristocrats, mifitary 
generals and m nltj-milHnrarf r m who 
grace the International Olympic 
Committee, Craig Reedie, a 
Rhsaiaglan inde p endent finanrifll 

adviser, constitutes a breath of 
fresh air- 

Better known to sportsmen as the 
chairman of the British Olympic 
Association, Reedie has just beaten 
ranner-turned-MP Sebastian Coe to 
become the second Britan on the 
IOC (alongside the Princess Royal), 
replacing Dame Mary Glen Haig. 

A law graduate from Glasgow 
University, Reedie has still been 
spending most of his time woririag 
for DJ* Bloomer & Partners, the 
firm he joined nearly 30 years ago, 
where he is now the partner 
fln g gin g pension plana. 

But his IOC election is good news 
not solely because it means one 
persuasive salesman with less time 
to spend on yonr doorstep. More 
than most, he has bear sensitive to 
the fragmentation of British sports 
adminte t ration. With his hugely 
enhanced kudos, he can surely win 
a more powerful role for the BOA 


Bungalow build 

■ Clearly a quango that delivers 
what it promises, Britain’s Bousing 
Corporation, which has been having 
a reorganisation in its central 


On the issue of nationhood - that 
is, the question by whom are we to 
be governed - there cannot be 
peace through compromise or nego- 
tiation, and in Northern Ireland 
that is the great paramount issue. 
The British parliament ruled 
Ireland — or, what comes to the 
same thing , Ireland was ruled under 
the British parliament - from tong 
before the parliamentary union of 
1800 seated Irish representatives at 
Westminster. At the general elec- 
tion of 1918 the inhabitants of the 
north east of Ireland continued to 
send representatives to parti a ment , 
while the frihuhtfemts of the rest of 
toe iffiand refused. The south voted 
itself out Just as surely, the 
so-called north, meaning the six 
counties of Ulster, voted to stay in. 

That determination has not 
rhang pd nn either Side ffhma then 

Listen to Gerry Adams, and you 
hear that Look at the voting at 
general electi o ns in Ulster, and you 
see that. The dispute is about 


registration and supervision 
division (BSD). 

The new-iook BSD, whose 
function it Is to regulate the 
housing associations, is promised a 
"flatter structure with shorter 
r e po rtin g lines”. Seldom can a 
review have been accomplished so 
deftly. The organigram of the new 
structure comprises one box 
Inhabited in solitary splendour by 
the dividon’s director, Derek 
Young, which is connected by a 
single line to another, rather joDier 
box p nwwnpasff ing all 33 
“supervision, consents, registration, 
administration, policy and 
information officers”. Yup, that’s it 


Mission to refrain 

■ A whole new media industry is 
threatening to explode - books 
about the British Broadcasting 
Corporation. A tantalising 
biography of John Birt, the BBC’s 
director-general, should soon arrive. 

Meanwhile, those needing a quick 
fix could do worse than dip into The 
Batik for the BBC by Steven 
Barnett and Andrew Curry, 
awifaww! and former BBC fan*, 
respectively. No major surprises or 
scoops, just a respectable analysis 
of tbe BBC’s fate over the past 
decade. 

But it has Us nuggets. One 
deHghtFul passage considers the 
Brr tian “method”, employed when 
he ran features and current 
affairs at London Weekend in 
the days whan Weekend World 


nationality - about whom we are to 
be governed by- That is why it can 
only be ended if one tide or the 
other is set upon giving way. 

The impression that there has 
been a deal done in secret which 
has not yet been revealed is thor- 
oughly logical. The unionist people 

It Is not Catholics 
who are confronting 
Protestants. . .but 
Irish nationalists 
confronting unionists 

of Ulster are not fools. They know 
that what is at issue is an absolute, 
and they treat those, from tire 
prime minister downwards, who 
talk about talks, about political 
progress, and about compromise 
and concession, as necessarily dis- 
honest 

Short of Inventing a method 


Observer 



Tve been using the male 
contraceptive pill again. Father* 

was essential viewing. 

Birt always required a folly 
drafted, painstakingly prepared 
script, right down to knowing 
exactly what every interviewee 
would say, before any filming 
happened. A good way of saving 
costly film stock, but obviously 
open to abuse. Say the authors; 
"This sometimes meant coaching 
[interviewees] in what they were 
supposed to be saying even ff - as 
could happen - they had changed 
their mftyfo . . . There were reliable 
punters who would be prepared to 
come on at short notice and deliver 
the agreed formula. Andrew Neil, 
then industrial editor of The 
Economist, was one.” 


whereby “a man can serve two mas- 
ters” there can be no peace in 
Northern Ireland so long as the 
right of the majority to their nation- 
ality is open to question. All down 
the years the perception that the 
British government really wanted 
rid of Northern Ireland has caused, 
maintained and ftielled violence. 

The Irish nationalists are not 
fools any more ft«n the unionists. 
They know that the baflotbox will 
not put them into the nation to 
which they claim to belong. Ergo 
alternative methods must be 
used to bring the desired result 
about 

The true disturber of the peace in 
Northern Ireland is the stance of 
British governments which have 
continually behaved as if they 
wished Ulster out of the UK. The 
Anglo-Irish agreement of 1985 was a 
prime example. Under it, Britain 
agreed to govern Northern Ireland 
only in combination with toe Irish 
Republic. 


So what can one expect from 
Nell’s latest exploit namely his 
programme for Rupert Murdoch's 
Fox TV station entitled Full 
Disclosure ? 


Stamped out 

■ When is freepost not free post? 
When it’s Freepost The Union of 
Communication Workers, which is 
being advised in its 
anti-privatisation campaign by Sir 
Tim Bell, has printed masses of 
postcards to distribute to the public, 
in the hope that UK trade and 
industry secretary Michael 
Heseltine will be sunk beneath a 
tidal wave of protest 
The cards go Freepost, but cost 
the union 20p a time. Which could 
get expensive - depending on how 
many actually get delivered. 


Floating voter 

■ And now, an example of the left 
hand not bring entirely confident 
about what the right hand is up to. 

Tsang Yok-sing, chairman of the 
democratic alliance for the 
betterment erf Hong Kong (DAB) 
mid one of the British colony’s 
staunchest pro-Beijing politicians, 
has admitted that his wife and 
daiightar have emigrated to Canada 
and that be too had considered 
jetting off. 

Tbe DAB is campaigning in 
current local elections with the 
slogan: "Stay behind and build 


Certitude as to the future is the 
precondition of peaceable living in 
Northern Ireland. The superficially 
hard-faced reassertion, in practical 
terms, that Northern Ireland 
belongs for good and all to the UK 
is the sole condition on which tran- 
quility will return. In the end it 
may be hard to foresee the UK for- 
mally withdrawing from the citi- 
zens of the north east of Ireland the 
right they have possessed from time 
immemorial to be governed within 
tbe UK. 

The day is long past for looking 
for a wheeze to disguise or to deny 
that right That way lies more 
bloodshed and not less. 

J. Enoch Powell 


The author, a Conservative cabinet 
minister in the 1960s. was Ulster 
Unionist MP for South Down for 13 
years until 1987 


Hong Kong”. Maybe the family 
went on an extensive recruitment 
drive... 


Book squirm 

■ A revolution is about to erupt in 
that normally placid market 
dictionary publishing. Chambers is 
publishing an Encyclopedic (sic) 
English Dictionary combining both 
lexical and encyclopaedic 
information and definitions. So 
"bonzer” (Austr alian slang meaning 
good) will nestle close to 
“Bosnia-Herzegovina" (Serbo-Croat 
for oh what an awful mess). 

It must surely rank as one of the 
fastest-to-goout-of-date publications 
in history. How long will "scuzzy" 
(US slang for filthy) or 

“humungous" (colloquial for 

enormous) last? But check out the 
entry for Macedonia. All it says on 
“economy" is “market gardening”. 


That's the spirit 

■ The digital Population Clock 
installed in the foyer of Cairo's 
International Conference on 
Population and Development, which 
had been soaring by more than a 
person a second into the upper 
5.656500.000s as the conference 
opened, was suddenly blank 
yesterday. 

It had apparently blown a fuse. 

Or was it the ghost of Thomas 
Maitbus making its contribution to 
proceedings? 


\ 









16 



Arrest warrant issued 
for Mexican bank chief 

Head of Del Monte Fresh 
group faces fraud charges 


By Damian Fraser in Mexico City 

The Mexican government has 
ordered the arrest on fraud 
charges of Mr Carlos Cabal Pen- 
iche. head of one of the country's 
largest banking groups and of 
Del Monte Fresh Produce, the 
international fruit company once 
owned by Polly Peck Interna- 
tional 

The finance ministry immedi- 
ately took over Mr Cabal's Banca 
Cremi and Banco Unidn - which 
have combined assets equivalent 
to nearly $llbn and deposits of 
$&8bn - and their subsidiaries, 
including a foreign exchange 
house., and leasing and factoring 
companies. It said the alleged 
irregular ides suspected so far did 
not affect the banks' ability to 
meet their obligations, but all 
depositors would be protected 
under the law. 

A government official said yes- 
terday that Mr Cabal had not yet 
been apprehended, with reports 
circulating that he may be in 
Europe. However, the official said 
that four of Mr Cabal's senior 
executives had been arrested, 
and about 10 people connected to 


Currency 

Continued from Page 1 


nations committed to faster inte- 
gration in the EU. The ruling 
Christian Democrat party and its 
CSU coalition partner proposed 
last week that the hard core 
should consist of France, Ger- 
many, Belgium, the Netherlands 
and Luxembourg. 

France, Germany and the Bene- 
lux are often viewed as the most 
likely nucleus of the planned 
monetary union. But Mr Lamfal- 
ussy stressed it was too soon to 
predict which EU members 
would be ready to form a union 
by 1997 or 1999, the two dates 
named in the treaty. 

Without mentioning Italy. 
Spain or the UK, the EMI presi- 
dent paid tribute to countries 
which seemed to have escaped 
“the infernal cycle of inflation", 
even while allowing their curren- 
cies to depreciate during the 
monetary upheaval of 1992-93. 

This turbulence, which led to 
the widening of fluctuation bands 
in the European Monetary Sys- 
tem in August 1992, appeared to 
be over, said Mr Lamfalussy. But 
he said tbe wider EMS bands 
should be preserved In order to 
defend currencies against specu- 
lative pressures. 

Mr Lamfalussy said the Frank- 
furt-based EMI would be up and 
running by November. Its two 
main tasks were to set up the 
organisation of a European cen- 
tral bank, and to co-ordinate 
monetary policy during the pre- 
paratory second stage of Emu. 

Anticipating criticism that the 
EMI's powers arc limited in rela- 
tion to national central bank gov- 
ernors and EU finance ministers, 
Mr Lamfalussy said: “There is no 
doctrinal conflict, there is no dis- 
agreement about the objective of 
price stability. It is a question of 
how to reach that objective.” 


the case were in jail. The first 
casualty of the charges against 
Mr Cabal may be bis intended 
purchase of Del Monte Foods, the 
San Francisco-based canned food 
company. In June, Mr Cabal and 
his Investor group agreed to buy 
the US company for $277m in 
«igh and about $700m in debt. 
However, according to Mexican 
government officials, the transac- 
tion has not yet been completed. 

Mr Cabal had planned to 
remerge Del Monte Fresh and Del 
Monte Foods, which were split up 
and sold by RJR Nabisco of the 
US in 1989. Mr Cabal subse- 
quently bought Del Monte Fresh 
Produce out of UK bankruptcy 
proceedings against Polly 
Peck. 

Mr Pedro Aspe, Mexico's 

finance minis ter, aniwnnceri on 

Monday night that the attorney- 
general's office had issued an 
arrest warrant against Mr Cabal, 
accusing him of havin g illeg all y 
lent hims elf money from his 


By John Thomhfll in Moscow, 
George Graham In Washington 
and Chrystia Freeland In London 

Ms Madeleine Albright, the US 
ambassador to the United 
Nations, yesterday approved Rus- 
sia’s peacekeeping role within 
the Commonwealth of Indepen- 
dent States but stressed that it 
fell short of the best solution for 
settling disputes in the region. 

Ms Albright also insisted “the 
burden of proof is on Russia” to 
demonstrate that what it sees as 
peacekeeping activities - some- 
times described by leaders of 
non-Russian republics as a veiled 
form of neo-imperialism - are 
benign. 

Ms Albright's qualified accep- 
tance of Russian military pres- 
ence in some of the former Soviet 
republics along its borders 
appears to give substance to an 
emerging “pragmatic” American 
approach to Russia. 

The policy, articulated by Ms 
Albright during a tour through 
Moldova, Georgia. Armenia, 
Azerbaijan and Russia, appears 
to take a middle ground between 
US hawks wary of Russian neo- 
imperialism and those willing to 
grant Russia a free hand. 

During her trip, Ms Albright 
spoke out sharply for the with- 
drawal of Russian forces from the 
European republic of Moldova, 
which borders Ukraine. But in 
Moscow yesterday she said the 
US would be prepared to accept 
the continued presence of Rus- 
sian peacekeepers in the more 


banks to acquire various busi- 
ness interests. These loans, the 
ministry alleges, “represent seri- 
ous alterations to the accounting 
of the bank and failure by the 
adminis tration to observe basic 
banking practices". 

Mr Cabal has risen from rela- 
tive obscurity to run one of the 
country's largest business 
empires. He bought Banco Unidn 
from the Mexican government for 
more than $300m in 1991 and Del 
Monte Fresh for about $500m in 
1992, and last year took control of 
Banco Cremi in a share swap 
with Mr Raymundo G6mez 
Flores, who controls Dina, the 
track company. 

However, Mr Cabal is being 
sued by Eastbrook, a now 
defunct US trading house, which 
alleges that he defrauded it of 
$70m of loans. Mr Cabal has 
vigorously denied these allega- 
tions. 


Shock waves spread. Page 3 


volatile republics in the Cauca- 
sus and central Asia. 

She said of the newly indepen- 
dent states that “Russia has tbe 
resources, direct interest and the 
leadership required to help 
resolve the problems in this 
region", but warned "Russian 
policies and actions must reflect 
the fact that it is no longer sur- 
rounded by vassals, but by inde- 
pendent, sovereign states”. 

Ms Albright, who is a member 
of President Bill Clinton’s cabinet 
and National Security Council, 
said it would be preferable for 
the UN to police the trouble spots 
in the former Soviet Union but 
that this was impractical because 
of demands on its resources. 

“Were it possible to have a nor- 
mal peacekeeping operation I 
think we all agree it would be for 
the best But one of the things l 
have learned in the past year and 
a half is that there are more 
peacekeeping options than peace- 
keepers. Peacekeeping is a new 
growth industry," she said. 

Russian - and other CIS - 
forces have intervened to keep 
the peace in Nagorno-Karabakh, 
which is in dispute between 
Ar menia and Azerbaijan, and in 
Georgia. But some local leaders 
have accused Russia of acting in 
its own national interests. 

The instability in Russia's 
“near abroad” was highlighted 
yesterday as it emerged that 14 
people had been killed and 46 
wounded in a bomb blast in a 
marketplace in north-east 
Armenia. 


Card-size 
camera 
gives 
computer 
new image 

By Alan Cane In London 

British technologists have 
created what they rfalm is the 
world’s first commercially avail- 
able miniature video camera 
able to capture and incorporate 
images directly on to a portable 
personal computer. 

The credit-card sized “PC Card 
Camera”, developed by VLSI 
Vision (VVL) of Edinburgh, Scot- 
land, and costing about £600 
with connections and software, 
is seen as having widespread 
business applications in Indus- 
tries where employees use porta- 
ble computers to collect informa- 
tion. Damage assessors working 
for insurance companies, for 
example, would be able to add 
photographic images of wrecked 
vehicles or property to their 
reports. 

Mr Alastair Minty, tbe compa- 
ny’s product manager, said tbe 
camera, available now, has been 
on trial with a number of large 
companies over the past few 
months. 

In its present form, it can take 
single black and white snapshots 
or sequences of stills and incor- 
porate them into documents on 
the computer screen. Mr Minty 
said that with additional soft- 
ware fnQ motion video was pos- 
sible. 

The camera opens op new pos- 
sibilities for companies with 
staff in the field who use porta- 
ble computers. Images of individ- 
uals, documents and events can 
all be captured and recorded by 
the card camera and incorpo- 
rated into reports. Outside its 
strict business applications, the 
camera has been used by golfers 
to analyse their swing. 

Connected to a mobile tele- 
phone system, the card camera 
would make personal video con- 
ferences between the office and a 
field location possible. Mr Minty 
said the company would shortly 
be adding sound to the system. 

WL, formed in 1990 by Profes- 
sor Peter Denyer of Edinburgh 
University, and Mr Roy Warren- 
der, a Scottish computer engi- 
neer, has attracted attention for 
pioneering work in machine 
vision. It Is credited with devel- 
oping the smallest and cheapest 
video cameras on the market It 
has also developed a system for 
recognising tinman fingerprints 
and a video camera on a single 
microchip selling for less than 
* 10 . 

Donnelly Corporation, a large 
US-based vehicle components 
manufacturer, holds a sizeable 
minority stake in the company. 
WL is developing video systems 
for Donnelly that will eventually 
replace conventional car rear- 
view mirrors. 

WL’s achievement in develop- 
ing the card camera has been to 
integrate the electronics Into a 
credit-card sized component 
called a PCMCIA card, an indus- 
try standard for portable com- 
puting. 


US approves role 
of Russian troops 
in CIS states 


FT WEATHER GUIDE 


Europe today 

A strong low pressure area and its 
associated frontal zone north-west of the 
British Isles will bring persistent rain to 
western parts ot the UK. Showers will Unger 
in eastern parts of the UK and in the 
Benelux. Another frontal system, trailing from 
a smaller low over southern Scandinavia, will 
bring rain to northern Germany, southern 
Scandinavia, Poland and western Russia. 
Other parts of Russia as wefl as southern 
Germany and the northern Balkans win have 
cloud interspersed with sunny speBs. 

Western France wiB be mainly cloudy with 
showers in southern sections. The 
Mediterranean will be sunny except for 
eastern sections. Temperatures will be 
around 3CC but will reach 35C in southern 
areas. 

Five-day forecast 

Central Europe will become unsettled. 
Franca, and the Alps will have extensive rain 
with a risk of thunder storms. Heavy rain Is 
also expected in southern Scandinavia 
towards the weekend, while central parts 
have strong easterly winds. Southern Europe 
will be sunny, but Italy win have thunder 
showers on Friday. 



TODAY'S TEMPERATURES 


Situation af 12 GMT. Tetnpgntures maximum for day. Forecasts by Metoo Consult of (he Nethe/landi 



Maximum 

Bering 

fair 

27 

Caracas 

thund 

30 


Celsius 

Belfast 

ram 

16 

CardW 

ram 

17 

Abu Dhabi 

sun 

38 

Belgrade 

fair 

32 

Casablanca 

sun 

26 

Accra 

doudy 

30 

Berlin 

shower 

19 

Chicago 

sun 

27 

Algiers 

sun 

30 

Bermuda 

shower 

31 

Cologne 

cloudy 

18 

Amsterdam 

doudy 

18 

Bogota 

shower 

19 

Dakar 

fair 

30 

Athens 

sun 

32 

Bombay 

shower 

29 

Dales 

tfuxt 

31 

Atlanta 

fair 

20 

Brussels 

shower 

19 

OeM 

Mr 

35 

H. Aires 

doudy 

15 

Budapest 

fair 

29 

Dubd 

sun 

40 

aham 

Shower 

18 

CJwgen 

rain 

13 

DuMn 

ram 

16 

Bangkok 

shower 

33 

Cains 

sun 

32 

Dubrovnik 

fair 

30 

Barcelona 

lak 

27 

Cope Town 

fair 

17 

Ednbwgh 

shower 

17 


We wish you a pleasant flight. 

© Lufthansa 


Faro 

sun 

27 

Madrid 

sun 

30 

Rangoon 

shower 

30 

Frankfurt 

doudy 

19 

Majorca 

sun 

29 

Reyfcjavfc 

shower 

13 

Geneva 

shower 

23 

Malta 

doudy 

30 

Rra 

Mr 

25 

Gibraltar 

sun 

27 

Manchesto 

rain 

17 

Rome 

sun 

29 

Glasgow 

shower 

16 

Mania 

shower 

34 

S. Freco 

Hr 

23 

Hamburg 

ram 

15 

Melbourne 

fair 

15 

Seoul 

shower 

29 

Helsinki 

cloudy 

15 

Mexico Ctty 

cloudy 

20 

Singapore 

ralrt 

31 

Hang Kong 

thund 

31 

Miami 

thund 

33 

Stockholm 

rain 

13 

Honolulu 

tee 

33 

Mian 

fair 

27 

Strasbourg 

rain 

21 

Istanbul 

fair 

28 

Montreal 

shower 

19 

Sydney 

Mr 

20 , 

Jakarta 

fair 

31 

Moscow 

shower 

20 

Tangier 

sun 

28 

Jersey 

shower 

16 

Munich 

shower 

24 

Td Aviv 

sun 

30 

Karachi 

shower 

33 

Nairobi 

doudy 

23 

Tokyo 

Mr 

29 

Kuwait 

sun 

43 

Naples 

sun 

29 

Toronto 

shower 

20 | 

L Angeles 

fair 

25 

Nassau 

Hr 

32 

Vancouver 

shower 

19 

Las Palmas 

sun 

ZB 

New York 

Hr 

26 

Venice 

fair 

27 i 

Lima 

Mr 

18 

Mce 

shower 

26 

Vienna 

Mr 

24 ; 

Lisbon 

fair 

27 

Moosia 

fair 

35 

Warsaw 

doudy 

20 ! 

London 

shower 

19 

Oslo 

doudy 

15 

Washington 

Mr 

27 i 

Urt-bourg 

doudy 

18 

Paris 

cloudy 

19 

WdUngton 

shower 

8 

Lyon 

ram 

24 

Perth 

Mr 

IB 

Winnipeg 

Mr 

20 

Madeira 

sun 

26 

Prague 

doudy 

21 

Zurich 

nrin 

21 


THE LEX COLUMN 

Developing Kodak 


The new Kodak is coming into focus. 
Yesterday's Si bn disposal of its clini- 
cal diagnostics business is the group's 
third billion, dollar-plus asset sale 
since June. Not only has Mr George 
Fisher, who took Kodak's helm last 
December, exceeded investor expecta- 
tions by the speed with which he has 
ghed its peripheral health care busi- 
nesses; tiie prices achieved are also 
surprisingly good - no doubt helped 
by the current worldwide enthusiasm 
for acquisitions in the sector. So far, 
disposals have brought in $S.6fan. L&F. 
Kodak's household products arm, is 
expected to realise a further $2bn. The 
total proceeds will virtually wipe out 
Kodak’s debt 

Mr Fisher now faces an even 
tougher challenge - expanding 
Kodak’s core Imaging business. That 
will determine whether it can shake 
off its reputation as a technological 
giant that lost its way. Mr Fisher, who 
in his time has worked at AT&T’s Bell 
Laboratories as well as running Moto- 
rola, has sketched out an exciting 
vision of how Kodak can apply its 
photographic expertise in emerging 
multimedia markets. 

Undoubtedly, image processing has 
a bright future, and Kodak has devel- 
oped strong technological positions in 
fields such as image processing soft- 
ware and digital sensors. But the com- 
pany has a poor track record in {King- 
ing such Inventions to market It also 
faces stiff competition, particularly 
from Japanese groups such as Fuji, 
Canon and. Sony. The real test will be 
whether Kodak can put together alli- 
ances that provide it with access to 
arirtitinnal technologies and markets. 
But given Mr Fisher’s proven ability 
to spring favourable surprises, he 
deserves the benefit of the doubt 

UK contracting 

A note of despair tends to enter the 
voices of contracting industry bosses 
when they are asked when margins 
will improve. Mr Joe Dwyer of Wim- 
pey put on a brave face yesterday but 
the best he could offer was that his 
contracting business would hold its 
own this year. Last year it made just 
£2 .2m on turnover of £658.8m. The 
hind is that even if volumes pick up, 
there will still be too many companies 
bidding for the available work. 

The recession has caused few casu- 
alties among leading companies, with 
several of the near-dead kept alive by 
their bankers. The banters to entry 
are also low, thanks to the system of 
upfront payments which means con- 


FT-SE Index; 3205.4 (-36.1) 


Irish equities 



tractors operate with negative capital 
employed. Although it requires enor- 
mous cultural rihang a it is in the inter- 
ests of the large contractors to encour- 
age a trend away from high up-front 
payments, so squeezing out financially 
weaker rivals. Some customers, 
including the government, are making 
modest moves in this direction. 

Strong balance sheets will be more 
important still if the hoped-for growth 
in privately-funded infrastructure pro- 
jects materialises. Raising the barriers 
to entry could then lead to consolida- 
tion in what Is, by international stan- 
dards, a fragmented industry. Some 
observers even dream of the day when 
UK utilities Trill follow the continental 
model and acquire large contractors. 
Given the utilities’ dismal record in 
contracting, the City would view this 
with alarm. Yet without some struc- 
tural change the prospects for the UK 
contracting industry are grim. 

Ireland 

Bulls of the Irish equity market are 
proclaiming that the latest rise in 
share prices has little to do with the 
IRA ceasefire. The economic implica- 
tions of peace - if it lasts - would be 
complex. A recovery in Northern 
Ireland asset values and Increased 
tourism in the Republic are among the 
possible outcomes. While there has 
been no rush, to upgrade earnings fore- 
casts, though, the ceasefire has cer- 
tainly been good for sentiment and 
helped focus the attention of interna- 
tional investors on favourable funda- 
mentals. 

While the Irish economy was stron- 
ger than most of its European peers 
through the recession, growth was 


driven by multinationals using Ireland 
as a base for exports. Yesterday's 
results from CRH. the building materi- 
als company, show that domestic 
demand Is now starting to take over. 
Ag ainst that background the market 
looks cheap on a multiple of around 12 
Kmw this year's forecast earnings - 
even allowing for the large proportion 
of lowly-rated financial stocks in the 
market's capitalisation. 

The lingering doubt is that a market 
driven higher by international capital 
flows must also be vulnerable to a 
sudden change of sentiment. A further 
appreciation of the Irish punt - per- 
haps beyond parity with sterling - 
would raise Tears about competitive- 
ness. Still, if peace in Northern Ireland 
gives interna tional investors one less 
reason to take fright, the market’s lat- 
est gains should be sustainable. 

Bowater 

For once, Bo water's managers were 
able to present a set of results without 
shooting thems elves in the foot Last 
Hme they reported, their unjustified 
pessimism about prospects for mar- 
gins overwhelmed a good set of fig- 
ures, sending shares tumbling 8 per 
cent on the day. In feet, fears that the 
company would prove incapable of 
passing on increases in raw material 
prices to customers proved, on the 
whole, unfounded. With hindsight, 
managers’ undue gloom destroyed a 
premium rating. 

Yesterday, the group lacked ade- 
quate ammunition to inflict such self- 
damage. The results, above expecta- 
tions, contained scarcely a blemish. 
Margins reached a record high, and 
the company achieved double digit 
growth in sales, operating profits and 
pre-tax results. An upbeat chairman’s 
statement completed the rosy package. 

Equally significant in yesterday's 4 
per coot rise in the shares - against a 
falling market - was the manage- 
ment's indication that Bowater had 
reached a strategic turning point The 
company, managers indicated, will no 
longer expand through acquisition. 
Growth will be achieved organically 
and through cost-cutting. There may 
be some bolt-on acquisitions, but these 
are likely to be small and not to 
require equity funding. Given 
Bo water's privileged position in fast- 
growing niches and the absence of 
additional equity issues in the foresee- 
able future, the shares should prove 
attractive for those looking to switch 
out of cyclical companies and Into 
growth stocks. 


THIS ANNOUNCEMENT APPEARS AS A MATTER OF RECORD ONLY 
AUGUST 1994 

HJ 

HOLT LLOYD INTERNATIONAL 


£72.9 million Management Buy-Out 
of the Holt Lloyd Group from 
The Morgan Crucible Company PLC 


Transaction and Equity arranged by 
Electra Kingsway Limited 


Senior Debt arranged and underwritten by 
Bank of Scotland 


ELECTRA 

ELECTRA KINGSWAY LIMITED 

6S KINGSWAY, LONDON WC2Bto'QT TELEPHONE: 071 831 64«4 FAX; 071 404 5388 
A MEMBER OF EMRO 





erf* 








!*J» f,' 



S‘- 


4 

;V- 

i.; 

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h' 




\ 






Shelia 


Ybur Swedish Telecom Partner 

UK Tor: 071 4i 6 0306. UK Fax: 071 410 0305. 


* 

FINANCIAL TIMES 

COMPANIES & MARKETS 


!7 



B A RP-- 

EECSEDSB 



Expanding by Contracting 


©THE FINANCIAL TIMES LIMITED 1994 


Wednesday September 7 1994 


Telephone Ayr (0292) 231311 


IN BRIEF 


Axa pays FFrlbn to 
U AP for Victoire 

Asa, ona of France's largest insurers, is expanding 
its European interests by buying Victoire Belgium 
from Union des Assurances de Paris fUAP) for 
FFrlbn ($i88m) Page is 

Bowater expects further recovery 

Bo water, the UK packaging and printing group, yes- 
terday reported a recovery in important markets. 
Pre-tax profits for the six months to June 30 rose 2 
par cent to £105m (£l63m). Page 18 

Tlphook chairman's bank got £3A» tee 

Institutional shareholders are unhappy over a 
£3-Sm (55.4m) payment which Tiphook. the ddrt- 
laden UK transport leasing company, mwfa to a 
me rcha nt bank In Which Tiphnok's chairman Mr 
Rupert Hambro, has an indirect aVwireho i ^iTig 
Page 18 

JCI posts strong rise 

Johannesburg Consolidated Investments, the South 
African mining house, lifted annual attributable 
earnings by 73 per cent It was the last annual 
result before the conglomerate's planned dem er ger. 
Page 19 

Valeo advances to 27% 

Valeo, the French vehicle components group, yes- 
terday announced a 27 per cent increase in first-half 
net consolidated profit to FFr487m ($91m). hi the 
first six months of thin year it outperformed the 
rest of the French car components sector. Page 19 

Wallenbergs eye the future 

The Wallenberg family is entering a new phase 
after overcoming most of the debilitating effects of 
a long recession. They are looking to strengthen 
their presence in growth industries and are eyeing 
investment opportunities overseas. Page 20 

HopeweN lifted by CEPA sale 

Hopewell Holdings, the Hong Kong property and 
construction group, announced a 20 per cent rise in 
net profits to HKKL4bn (US$310m) for the year to 
June 80. Page 22 

iMI surges with demand for betting chips 

Strong demand for replacement copper plumbing 
systems in eastern Germany and a surge in orders 
for betting chips from new US casinos set up on 
Indian reservations helped TMl , the UK interna- 
tional engineering group, lift first-half profits by 4 
per cent in the six months to June 30. Page 24 

Manweb cuts workforce by 11% 

Manweb Is cutting 500 Jobs, 11 per cent of Its work- 
force, in a move expected to save up to £2Qm ($3lm) 
a year by 1997. Page 26 

£24m Investment for Croda 

Croda International, the UK chemicals and mating s 
group, yesterday announced plans to invest £24m 
($37m) to exploit rising demand for its speciality 
chemi cals. Page 26 

Wlrnpey confirms budding revival 

Wimpey, Britain's biggest housebuilder, yesterday 
confirmed that the housebuilding revival was still 
on track as it announced a recovery in the first six 
months of this year. Page 25 


Companies In this issue 


ABN Amro 

18 Maanshan Iron, Steal 

22 

AXA 

18 Mactetane 

23 

Ahold 

18 Macro 4 

26 

Bechstein 

17 McCain 

19 

Beken Printing 

22 MetalgaBaSschaft 

17 

BtQthmr 

17 Metsec 

26 

Boefcate 

18 Microsoft 

19 

Bowatar 

18 Oriel 

26 

British Dredging 

26 Rhrer 8 Merc Smafl 

26 

Bimflstd 

AM I\ihki4nft ^ rrilmra 

ZD nDWTOW Diuuwa 

25 

C.E- Heath IrtL 

22 Schimmel 

17 

Chime Communications 

25 Scholl 

25 

Deutsche Bank 

18 Shanghai Pef chem. 

22 

Estates & General 

25 SJetnway 

17 

Oaske* 

25 Strang & Fisher 

25 

G6n6rata de Banque 

19 T. Cowrie 

10 

Hopewell Holdings 

22 TR Euro Growth Trust 

25 

Ind News of Ireland 

25 Tiphook 

18 

investor 

20 Tslngtao Brewery 

22 

JO 

19 USDC liw Trust 

26 

Johnson a Johnson 

17 Valeo 

19 

Kingspan 

25 Vkrioke 

18 

Kodak 

17 WSP 

25 

Kunming Machinery 

22 Wtmpey 

25 

LVMH 

17 Ytzheng Chemical 

22 


Market Statistics 


{Annual reports service 
Bendanaric Sort bonds 
Bond toturaa and opflons 
Bond prices and ytatts 
CommxBJes prices 
Dividends amowced. UK 
BIS csrsnpf rasa 

Eurobond prices 
Hail interest Wees 
FT-A Worid tafias Bade Pago 
FT Gold Mines Indsx Back Page 

FfflSMA HI bond sve 

FT-SE Actuaries tafcex 33 


Managed taxis senrice 

36-40 

Money imitate 

40 

New HUmd toeues 

23 

Recant issues, UK 

33 

Short-term W rates 

40 

US interest rates 

23 

World stock Markets 

41 


Chief price changes yesterday 


34-35 Foreign exchange 40 

23 GBsprtces 23 

23 Ufa equity options Back Pago 
23 London share service 34-35 
32 London tradl options Back Page 
3M 
40 
23 


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638 

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780 

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557 

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SWtfmB ta 317 

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348 

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20 

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394 

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164 

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295 

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18 


Kodak makes diagnostics disposal 


NYSE 

members 


By Tony Jackson in Now York 

Eastman Kodak the US photo- 
graphic products group, took a 
farther step in Us disposal pro- 
gramme yesterday welting its clin- 
ical diagnostics business to the 
US healthcare company Johnson 
& Johnson for $ibn. 

With the sale of its drugs busi- 
nesses to Sanofi of France and 
Smith Kline Beecham of the UK, 
tiie deal brings Kodak's total dis- 
posals since June to more than 
$S8bn. 

The sale to Johnson & Johnson 
includes Kodak’s chemistry-based 


and immnnfMMwa y diagnostics 
products, which had sales last 
year of ffift m Kodak’s retention 
of its X-ray film-based diagnostic 
business, in which it claims 
worid leadership, is in line with 
the strategy announced in May 
by new chairman, Mr George 
Fisher, of concentrating on its 
traditional strengths. 

Johnson & Johnson, w hich two 
weeks ago announced the $924m 
acquisition of the Neutxogena 
gfcin and hair care company, said 
the deal would make it the 
. world's third biggest diagnostics 
company after Abbott Laborato- 


ries of. the US and Boehringer 
Mannheim of Germany. 

Its existing sales of diagnostics 
are Just over $700m. The Kodak 
business, which includes the 
diagnostics business of the UK 
comp an y Amersham ncq uirpd in 
1990, would continue to be run as 
a separate company, Johnson & 
Johnson said. 

Mr Ralph ijwwn, Johnson & 
Johnson's chairman, said “the 
acquisition will add important 
positions in clinical chemistry 
and immunodi agnostics to our 
existing diagnostics business and 
significantly broaden our cus- 


LVMH enjoys the luxury 
of 35% profits advance 


By Alice Rawsthom In Paris 

The buoyant state of the luxury 
goods market was highlighted 
yesterday by news that LVMH, 
one of the world's largest l uxury 
businesses, increased net profits 
by 35 per cent during the first 
half of 1994. 

LVMH, which will publish fuQ 
interim figures later thfe month, 
confirmed that net profits had 
risen to FFrL26bn (5236m) in she 
months, from FFr935m in the 
same period of 19%. Sales rose 
20 per cent to FFrlihn. 

The group affirmed that “if 
current trends continue” it was 
on course to achieve the target of 
20 per cent net profits growth for 
the full year set by Mr Bernard 
Arnault, chairman. Analysts are 
expecting slightly higher figures. 

LVMH , which has extensive 
interests across the luxury goods 
industry including Hennessy 
Cognac, Mott et Chandon cham- 
pagne, Louis Vnitton luggage 
and Christian Dior cosmetics, 
has reported sluggish p r ofi t s due 
to the depressed state of the 
fashion and cosmetics markets, 


tiie crisis in the champagne sec- 
tor and the Japanese slowdown. 

LVMH said that its first-half 
profits increase was due to a 
stronger performance from all 
its interests and lower financial 
expenses. 

Earlier this year LVMH 
announced that it was unravell- 
ing its cross-shareholding agree- 
ment with Guinness, the UK 
drinks group, significantly 
reducing its bo r row i ngs and cut- 
ting financial costs. Christian 
Dior is expected to stage a capi- 
tal inHvaw to finance the G uin- 
ness transaction. 

Mr Arnanlt has maria it dear 
that he plans to use LVMZTs 
newfound flnanrfai flexibility to 
increase its luxury interests. 
LVMH made its first acquisition 
by taking control of Guerlain, 
the fragrance house in which ft 
held a minority stake. 

However, Mr Arnanlt was 
failed in ids attempt to boy Van 
Cleef & Arpels, the Paris-based 
jewellers, by stiff competition 
from Chanel, the French fashion 
house, and Van Cleef was even- 
tually takan off the market. 



Arnanlt: on course for target 


Mr Arnault is now searching 
for other Investment opportuni- 
ties. “From a financial perspec- 
tive LVMH should be able to 
make a major acquisition,” said 
Ms JoseUne Gaudino, an analyst 
at the Sodett Gdn£rale securities 
house In Paris. “The only prob- 
lem could be a shortage of gzit- 
able targets." 


Judy Dempsey reports on German piano makers 

Quality is the 
key to a more 
upbeat tempo 


I n the heart of east Berlin the 
sounds of students practising 
their scales in the Hans Sis- 
ter music school are relished by 
Mr Karl Schulze, manager of 
Bechstein, one of Germany's old- 
est: pinnn manufacturers based in 
nearby Moritzplatz. 

"The number of students now 
learning the piano at the music 
schools in Germany has 
increased from 190,000 in 1991 to 
over 140,000. People are rediscov- 
ering the piano again. This is 
good news for Bechstein, ° he 


A year ago Bechstein was hold- 
ing talks with liquidators. Its 
losses had exceeded DM! .5m 
(5960,000) and the banks were 
unwilling to extend fresh credit. 
There were even fears that Zftn- 
menuarm, the east German piano 
maker which Becbstain bad pur- 
chased, would to the wall as wdL 
“I wanted to save Bechstein, 
revive its reputation and make 
the marriage with Zimmermann 
work. So I decided one of the 
ways to raise cash and get out of 
debt was to sell 6£00 sq m of our 
land here near Checkpoint Char- 
lie to. the Berlin Senate for 
DMSOm,” said Mr S chulze. Now 
Mr Schulze says his order books 
are fall, until the middle of 1995 
and if aQ goes well, combined 
turnover this year will total 
DM28m with an expected profit of 
about DMl.Sm. 

Bechstein's tumround from 
vi r tua l collapse has been keenly 
watched by Germany's other 
long-established piano makers. 
All of tiiwn - BlQthnar in Leip- 
zig! Schimmel in Braunschweig 
and Steinway in Hamburg - were 
hit by the downturn, yet most 
agree that they are emerging 
from the recession much quicker 
than they had expected. This is 
despite a fall in total piano sales 
worldwide from a peak of 1.1m in 
the mid-l98Qs to about 600,000 in 
the early 1990s as well as compe- 
tition from Japan and cheaper 
models, particularly from China 
and eastern Europe. 

"We went through a bad patch 
during the recession," said Mr 
Wilhelm Nikolaus Schimmel, 
whose family company was 
founded in 1885 and today has a 
11 per cent share of the German 
market “In the mid-1980s, we 
bad • an annual turnover of 
DMffim, two-thirds eprewi from 
exports. But sates fell to about 
DM47m lathe early 1990s, and we 
were making heavy losses. We 
had to restructure. 

“Three yearn ago. we employed 
about 520 people. Today, we bare 
260 people on our books. But we 
made one major decision. We 
were not going to compromise 
our quality. I think this ha« paid 
oft" 

Germany's piano manufactur- 
ers unanimously agree that their 
industry would not have recov- 
ered had it’ gone downmarket 
“Japan is our major competitor,” 
said Mr S chimmel "But we had 


German piano market 


Number of pianos 


1982 


1991 


Production 



Upright 

Grand 

Total 


2DJJ54 

3/HO 


22,532 

4,732 

27,284 


Domestic sales 



Total domestic sales 



| Upright 
Grand 

11,133 

2,253 

16,629 

3,129 

Total 

13^80 

19JS5B 

Upright 

Grand 

8£21 

1,157 

5.903 

1,603 

Total 

10,078 

7,506 


15£S0 

2,182 

17,023 

1,785 

Total 

18,132 

18,808 

Upright 

Grand 

24371 

3J339 

22,926 

3^88 

| Total 

28,210 

28£14 


to respond by continuing to pro- 
vide high quality and desig n. 
This has what has underpinned 
Germany's piano tradition. If you 
chang e that you undermine your 
own reputation. “ 

M r Ingbert Blflthner- 
Haessler, manager of 
BW timer, who was cat- 
apulted into the marfr at economy 
after bein g s ubsidised by fop east 
German state for more than four 
decades, said the recession made 
the industry more aware of mar- 
keting. "We had to hit home the 
m essage that we are producing 
quality,” he said. This year. 
BlQthner; which exports 50 per 
cent of its 400 uprights and 
grands, expects to lift its turn- 
over 10 per «»nt to DM5m which 
will allow it to enter the blade. 

Despite the rerival in piano- 
playing, not everyone can afford 
a Biflthner upright, which costs 
between DM16,000 and DM23,000, 
or a Steinway, whose grand 
pianos start at DM61,900. Mr 
Roger Willson, managing director 
of the UK-based Wbelpdate, Max- 
well and Codd, the piano manu- 
facturers ami the sole importer of 
Biflthner, said: “The recession 
had the effect of changing the 
habits of our customers. Parents 
either bought a cheap Chinese 


Source Statbtfedws Bundesamt 

piano - if you call £1,200 cheap - 
or opted for the second-hand mar- 
ket for quality pianos in which 
demand has increased sharply '* 
Mr Willson now believes that 
worldwide sales will increase by 
about 4 per cent this year. 

Steinway, which occupies the 
top end of the market, is sur- 
prised at the pace of recovery. 
The recession forced us to cut 
back. And music schools had 
their budgets reduced - so they 
were not buying pianos. But we 
did not expect to come out of the 
recession so fast,” said Ms Bar- 
bara Ascherfeld. Steinway's 
spokeswoman. 

About half of Steinway's pro- 
duction turnover of L200 units 
(L000 grands and 200 uprights) is 
earmarked for music conservato- 
ries and the rest for individuals. 
About 30 per cent of its grand 
pianos are exported to Japan. 
Steinway recently made a special 
contract with its trade union so 
that its enployees can work lon- 
ger hours to meet demand. 

Mr Schimmel and his col- 
leagues believe the German piano 
industry and the west European 
market is finally stabilising. 
“But,” warned Mr Schimmel. 
“the lesson we teamed from the 
recession Is that you cannot 
make short-cuts with quality.” 


tonier base in the hospital central 
diagnostic laboratories 1 *. The 
company said the deal would 
leapfrog it into third position 
worldwide ahead of Bayer of 
Germany. 

The sale nearly completes 
Kodak's ambitious disposal pro- 
gramme. The final business to be 
sold is L&F Products, consisting 
of household products, such as 
disinfectants and DIY products 
such as wood finishers. Kodak 
announced last month it would 
sell the two parts of L & F sepa- 
rately, haring been unable to 
reach Us target price - estimated 


By Andrew Fisher in Frankfort 

Shares in Metallgesellschaft, the 
ailing German metals, engineer- 
ing and chemicals group, fell 
sharply yesterday as investors 
reacted with confusion to reports 
of possible moves to strengthen 
its Share ra pHnt 

There was also concern about 
the likely extent of further 
restructuring, especially on the 
non-ferrous metals smelting side. 
Shares in the company, which 
camp close to coDspse last year 
after huge losses on US oil 
futures trading, closed DM16 
lower in Frankfort at DM184. 

Metallgesellschaft said on Mon- 
day night, after a supervisory 
board meeting, that last week's 
deal releasing it from controver- 
sial oil refinery contracts with 
Castle Energy of the US meant it 
would need to set aside more 
than the e a rlier planned DMlbn 

(5641m) to cover losses. Yester- 
day, the company said it was 
talking with shareholders and 
creditor banks about improving 
its capital structure, but gave no 
details. It made clear, however, 
that the process would take time, 
with any decision to be pot to the 

annual meeting next Mar ch. 

The market was unsettled by 
discussion of a possible redaction 
in the company's share capital - 
totalling 14.4m shares with a 
nominal value of DM720m (worth 
DM2.65bn at yesterday’s share 
price) - followed by a rights 
issue. “This would have a huge 
negative psychological impact,” 
said Ms Lynn Reinhardt, a Frank- 
furt analyst for Barclays de Zoete 
Wedd, the UK Investment house; 

Metallgesellschaft also said on 
Monday that operating profits 
could exceed DMlOOm this year. 
But analysts said the outlook 


at around $2bn - for the business 
as a whole. 

The latest deal also brings 
Kodak close to its target of elimi- 
nating debt. Group borrowings at 
the mid-year stood at $6.4bn, 
compared with the 55.6bn of dis- 
posals announced or concluded 
since then. Kodak spent $l50m 
last month buying out its equal 
partnership in Qualex, the photo- 
finishing company. 

Kodak shares were up $?• at 
550% at lunchtime yesterday, 
while Johnson & Johnson's were 
down 5 s /. at S49W. 

Lex, Page 16 


Motallgooollic haft 


Share price (DM) 



remained too uncertain for clear 
investment judgments. 

There is at least one farther 
step to go on the smelter side, “ 
said Mr Michael Geiger, an ana- 
lyst at NatWest Securities in Lon- 
don. “It's not yet the end of the 
total restructuring and potential 

itinajy ft jnhnmb " 

The company’s statement also 
referred to an agreement in prin- 
ciple for the sale of its headquar- 
ters in central Frankfurt. It is 
believed that Deutsche Bank and 
Dresdner Bank, the two main 
creditor banks, are negotiating to 
acquire the property - unoffi- 
cially estimated as being worth 
some DM750m - to use or sell for 
development 

This solution would speed up 
the sale, expected to be con- 
cluded this calendar year, and 
enable the proceeds to he booked 
retrospectively to Metallgesell- 
schaff s accounts for the financial 
year ending in September 1994. 

Also awaiting conclusion is the 
sale or placement of the 47 per 
cent of Kolbenschmidt the motor 
components manufacturer. , 


incur loss 
in quarter 

By Patrick Harvetaon 
In New York 

The New York Stock Exchange 
said yesterday its member firms 
which do business with the pub- 
lic lost $-104 in alter tax in the 
second quarter, a sharp decline 
from the $1.5bn profit In the 
same quarter of 1993 and the 
$852m profit recorded in the first 
three months of this year. 

The results were achieved on 
total revenues of $16.4bn, down 
from 5l7.9bn a year ago. For the 
first six months, NYSE member 
firms earned an aftcr-tax profit 
of 5448m, compared with $3bn 
earned in the first balf of 199:1. 

The data, which covers the big 
Wall Street firms* domestic 
activities, is the latest Illustra- 
tion of how rising US interest 
rates have disrupted financial 
markets and undermined earn- 
ings in the US securities 
industry. 

The losses among NYSE mem- 
bers were not entirely wide- 
spread. Of the 302 firms which 
reported to the exchange, 200 
together made a profit of 58SSm. 
Those gains , however, were over- 
shadowed by tiie losses of 102 
firms, which totalled 3l-5bn. 

The NYSE does not provide a 
breakdown or its members’ 
results, but they include revenue 
from sources, such as propri- 
etary trading, interest and com- 
missions. 

Based upon the individual 
results of the biggest publicly- 
quoted securities houses, the 
worst-hit area has been trading, 
where falling bond prices and 
volatile currency markets have 
left many big firms nursing size- 
able losses in recent months. 

Although WaD Street has also 
suffered from a sharp downturn 
in underwriting activity, as ris- 
ing interest rates and falling 
share prices have deterred many 
US and foreign companies from 
raising funds on the capital mar- 
kets, results from this area do 
not show up in the NYSE figures. 

In spite of tiie problems at the 
big stockbroldng firms, the 
NYSE's “specialists”, the firms 
which exclusively buy and sell 
shares for brokers and their cli- 
ents on the exchange’s trading 
floor, were still profitable during 
the second quarter, earning 
529m after tax. 

Traditionally, specialists can 
make money in a declining mar- 
ket because their marketmaking 
commissions remain buoyant, 
and because they still earn a 
profit on price “spreads” - the 
difference between the buying 
and selling price of shares. 


Metallgesellschaft 
shares fall 8% 
on capital fears 


This announcement appears as a nvuierof record only. 


Associated British Foods pic 

Re-organisation of the share capitals of 
Associated British Foods pic, 

George Weston Holdings pic 
and 

Wittington Investments Limited 


Robert Fleming & Co. Limited 

acted as financial adviser 
to Associated British Foods pic 


FLEMINGS 

INTERNATION* l INVESTMENT BANKING 

LON DON- NEW YORK, 1IONG KONG. TOKYO. PARIS. FRANKFURT. MADRID. ZURICH. GENEVA. MILAN 
SYDNEY. BANGKOK . TAIPEI . MANILA . JAKARTA . SEOUL . BEIJING . SHANGHAI . SHENZHEN 
BOM KAY. KUALA LUMPUR. SINGAPORE. LA HORS -COLOMBO. JOHANNESBURG. BAHRAIN 

August I9M 

lauathy Rohm t1anav&Cn.LiiU&ammbercfiteStair1ilaandFI«Mn Authorial UmuaitwdihcLmbnSuAExtiimgt 


1 








18 


FINANCIAL TIMES WEDN BSD AY SEPTEMBER 7 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Axa pays UAP FFrlbn 
for Victoire Belgium 


By Alice Rawsthom 

in Paris 

Axa. one of France's largest 
Insurers, is expanding its Euro- 
pean interests by buying Vic- 
toire Belgium from Union des 
Assurances de Paris (UAP) for 
FFrlbn ($l8Sm;. 

UAP acquired Victoire Bel- 
gium last year as part of a 
complex deal which gave it 
control of the international 
activities of Victoire, the Paris- 
based insurer then owned by 
the Suez group. 

The bulk of Victoire's domes- 
tic business has since been 
sold by Suez to Commercial 
Union, the UK concern, as part 
of the ongoing restructuring 
of the European insurance 
industry. 


Axa, which trails UAP as the 
second Force in French insur- 
ance, has been steadily expand- 
ing its international interests. 
It already has a presence in the 
Belgian market through its 
Axa Belgium and Mutuelle 
Patronale subsidiaries, which 
had combined turnover of 
FFr2.35bn in 1993. 

The acquisition of Victoire 
Belgium, which commanded an 
estimated L3 per cent of the 
Belgian insurance sector with 
1993 turnover of FFr920m, 
should raise Axa's share of the 
Belgian market to around 5 per 
cent. 

It will still lag UAP which, 
even after this latest disposal, 
remains the number two 
insurer in Belgium, through its 
Royale Beige subsidiary. That 


business had turnover of 
FFr9.3bn last year. 

Vic-Life, the Luxembourg 
subsidiary of Victoire Belgium, 
has been exempted from yes- 
terday's transaction. 

Instead of going to Axa, it 
will become part of the Royale 
Beige group, raising UAFs pro- 
file In Luxembourg by lifting 
its annual sales to around 
FFrl90m. 

Axa and UAP are still intent 
on pursuing further interna- 
tional acquisitions. Axa yester- 
day announced it was poised to 
clinch a deal to buy the Hie 
Wing On Life Assurance Com- 
pany in Hong Kong. 

UAP has expressed interest 
in Asia, but is also seeking a 
non-life insurer in the 
UK. 


Tiphook head in fresh row 


By Andrew Bolger in London 

Institutional shareholders are 
unhappy about a £3. 5m 
($5. 39m) payment which 
Tiphook, the debt-laden UK 
transport leasing company, 
made to a merchant b ank bou- 
tique in which Tiphook's chair- 
man, Mr Rupert Hambro, has 
an indirect shareholding. 

Mr Hambro. a non-executive 
director of Tiphook since 1990, 
took over as interim non- 
executive chairman in March. 
He will step down this month, 
although he will continue as 
non-executive director. 

His family company has a 
minority stake in J.O. Hambro 
Magan, which received its fee 
for advising on the recent 
£722 m disposal of Tiphook's 
containers division, which 
saved the group from collapse. 
A leading institutional fund 


manager said that, as a matter 
of policy, he did not like to see 
non-executives involved in a 
financial advisory role. 

Tiphook said Mr Hambro had 
□o executive role in Hambro 
Magan, which had fully earned 
its fee by introducing the 
group to the eventual buyer of 
the container division, Transa- 
merica, the US financial ser- 
vices group. The entire trans- 
action had been supervised by 
the group's non-executive 
directors, merchants bankers 
and lawyers. 

Mr Alton Irby, deputy chair- 
man of Hambro Magan, said: 
“We identified Transamerica, 
brought the deal to the table 
and negotiated one hell of a 
price. At least for now, we’ve 
saved the company. In one 
way, one wonders if we got 
enough-" 

Mr Hambro, who was paid 


£62,000 by Tiphook last year, 
has already been at the centre 
of controversy in his role as 
chairman of Tiphook's remu- 
neration committee. There was 
an outcry last month when the 
group’s annual report revealed 
that directors saw their total 
remuneration increase from 
£3.96m to £6 .4lm in the year to 
April, a period in which 
Tiphook reported a pre-tax loss 
of £331m. 

Mr Robert Montague, chief 
executive, was the highest-paid 
of the directors, with a bonus 
of £250.000 which helped push 
his pay from El. 17m to £l,34m. 
Mr Montague, who recently 
stepped down as chairman, 
agreed to a substantial cut in 
pay, from an £8164)00 package 
to £200,000 as or March, but 
will receive a total minimum 
bonus of £250,000 over the next 
five years. 


German railway sells bank stake 


DG-Bank is to buy a majority 
stake in Deutsche Verkehrs- 
Bank from Deutsche Bahn, the 
German railway. Renter 
reports from Frankfurt 
Deutsche Bairn said it had 
reached a basic agreement on 
the transaction with DG-Bank 
but their supervisory boards 
and the Federal Cartels Office 
had yet to approve the deaL 


The railway declined to 
reveal the purchase price. It 
owns 65.1 per cent of Deutsche 
Verkehrs-Bank, and is selling 
60.1 per cent to DG Bank and 5 
per cent to Sparda, the German 
savings and loans group. 

Deutsche Bahn will retain a 
10 per cent stake in Deutsche 
Verkehrs-Bank, the railway 
said. The Sparda group already 


owns 10 per cent of Deutsche 

Verkehrs- Bank. The r emaining 

shares are widely distributed. 

"The sale is part of the rail- 
way's policy of concentrating 
on its core business," a Deut- 
sche Bahn official said. 

Deutsche Verkehrs-Bank 
mainly operates foreign 
exchange booths at railway 
stations. 


Two banks 
bid for 
Poland’s 
Interbank 


By Christopher Bohinsid 
in Warsaw 

Deutsche Bank and ABN Amro 
of the Netherlands have made 
separate bids to purchase 
Interbank, an ailing private. 
Polish bank, in response to the 
country’s central bank policy 
of attracting strategic foreign 
investors to strengthen private 
and state sector banks. 

The two banks are insisting 
on a 100 per cent takeover of 
Interbank, which is currently 
managed by the central bank 
fallowing a 80bn zloty ($3m) 
rescue package involving a 
bond purchase. 

Deutsche B ank and ABN 
Amro are among 10 foreign 
banks, including Chase Man- 
hattan, which have applied to 
open wholly owned subsid- 
iaries in Poland. 

However, -the central bank 
has stopped issuing new 
licences to local or foreign 
banks in order to encourage 
banking rationalisation 
through takeovers. 

Deutsche Bank has had a 
representative office in War- 
saw since the anfaimn of 1989, 
while ABN Ambro is a share- 
holder in the IBP Bank, a joint 
venture with Crddit Lyonnais, 
the Banca Commerciale Ital- 
ians, the International 
Finance Corporation and two 
local banks. 

The central bank has made 
an exception for Dresdner 
Bank and Banque Nationals de 
Paris, whose joint application 
to open a subsidiary in Poland 
has been accepted and is 
awaiting finance ministry 
approval. 

Dresdner played an impor- 
tant role in Poland's debt 
reduction talks with the Lon- 
don club of commercial bank 
creditors, as head of the its 
steering committee, and the 
approval Is seen as recognis- 
ing the German bank's contri- 
bution to the deaL Due to be 
signed next week, it will 
reduce Poland's $14bn com- 
mercial debt by almost 50 per 
cent 

Poland last issued a foreign 
banking licence three years 
ago. Nine banks, including 
Citibank Creditanstalt oper- 
ate In the country as wholly 
earned subsidiaries. 


Bowater ahead 15% at six months 


By Neil Buckley in London 

Bowater said yesterday that a 
recovery in its packaging and 
printing businesses, with 
higher raw materials prices 
largely being passed on to cus- 
tomers, had helped it achieve a 
15 per cent rise in pre-tax prof- 
its before exceptional items. 

Headline profits at the UK 
group for the six months to 
June 30 increased to £105m 
(8162.75m) from £lQ3m - at the 
top end of expectations. But 
after exceptional gains of £8m 
last year, and a loss on dispos- 
als of £4m this year, the under- 
lying increase was to £109m 
from £95 ox 

Mr David Lyon, chief execu- 
tive, said an upturn in demand 
in the US, UK and some conti- 
nental European markets had 
led to price rises for Bowater’s 
main raw materials - paper, 
and resin for plastics - of 
about 20 per cent between 
April and June. 


“We have generally been 
able to pass these increases on 
to customers, although there 
are some timing delays," Mr 
Lyon said. 

He added that raw material 
prices were expected to 
increase by up to another 10 
per cent by December, with 
shortages of some commodities 
forecast, although prices 
remained about 25 per cent 
below their peak in the late 
1980s. This was likely to lead to 
a further improvement over 
last year's results in the sec- 
ond half. 

The positive outlook - which 
contrasted strongly with 
Bowater’s downbeat assess- 
ment of future trends after 
strong results a year ago - 
lifted Bowater’s shares I9p to 
492p. Mr Lyon said Bowater' s 
acquisition of healthcare pack- 
aging manufacturers DRG and 
Cope Allman in 1992, and of 
Specialty Coatings Interna- 
tional last year, had given it 



David Lyon: increase in raw 
material costs passed on 

critical mass in several target 
markets with strong growth 
opportunities, and Bowater 
was now concentrating on 
organic growth and developing 
synergies between businesses. 

Group turnover increased 14 


per cent to El.ltibn. with tb? 
group operating margin up 
from 8.8 per cent to a record 92 

per cent. 

After a difficult second half 
last year, the packaging and 
print businesses staged a 
recovery with sales up 3 per 
cent to £580.7m. and operating 
profits of £49 An almost match- 
ing last year's £5<L9m. 

The acquisition of SCI 
greatly increased the contribu- 
tion from Bowater’s coated 
products division, with sales 
up from £ 194.2m to £2SQ.3m, 
and operating profits from 
£22.5m to £32.7m. 

Both sales and profits also 
increased in Bo water's build- 
ing and engineering busi- 
nesses, and its tissue business 
in Australia. 

Earnings per share, includ- 
ing exceptional items, rose 
from I2.3p to I4.2p, and the 
interim dividend is up 9 per 
cent from 5 Jp to 5-Sp. 

Lex, Page 16 


Ahold posts solid profits rise 


By Ronald van de Krol 
in Amsterdam 

Ahold, the Dutch-based food 
retailing group, posted a strong 
23.5 per cent rise in second- 
quarter net profit, encouraging 
it to raise its forecast far full- 
year earnings. 

The company, which now 
expects 1994 results to be “con- 
siderably" higher than in 1993. 
said net profit rose to F19A2m 
(853.8m) from FI 76.2m a year 
earlier. Turnover was up 8.3 
per cent at Fl6-87bn. 

The quarterly increase takes 
net profit for the first half to 
Fl20A5m, up 18.6 per cent and 
at the top end of analysts' fore- 
casts. The company's shares 


rose by 23 per cent to close up 
FILL0 at FI 48.40. 

Ahold attributed the sharp 
rise to higher operating results 
and a lower tax burden. “We 
consider the course of events 
in the first half, and particu- 
larly the second quarter, as 
highly satisfactory and as 
indicative of the developments 
for the entire year," Mr Cees 
van der Hoeven, company pres- 
ident, said. 

Previously. Ahold, which 
generates about half of its 
turnover through six super- 
market chains in the US, had 
forecast only that profits 
would continue to rise in 1994. 

Ahold’s dnal-currency 
interim dividend was raised to 


FI 0.19 and $0.09 per share, 
from FI 0.17 and $0.06 last year. 

In the US, operating profit 
rose 153 per cent to 845.ini in 
the second quarter, outstrip- 
ping the 9.9 per cent increase 
in Dutch operating results, to 
FI 683m. 

Total operating profit 
increased by L53 per cent to 
FI 17L6m. This includes a 37.5 
per cent increase in European 
results, to FI 20.7m, mainly 
reflecting buoyant profits in 
Portugal. 

Mr van der Hoeven said 
Ahold's activities in the Czech 
Republic were gradually 
approaching break-even. This 
point should be reached by the 
end of 1994, he said. 


Dutch dredger in share placement 


By Ronald van de Krol 

Boskalis Westminster, the 
Dutch dredging group, placed 
around 18 per cent of its 
outstanding share capital 
with Dutch and international 
institutional investors 
yesterday, in a transaction 
worth nearly FI 190m 
<$109m). 

Boskalis Trust, a company 
trust which owns about half of 
the group’s shares, sold 


slightly more than 4.56m 
shares to ABN Amro, the 
Dutch bank, which sold them 
on to investors at FI 4030 
each. 

The shares carry full rights 
to the 1994 dividend. 

The company, which 
describes itself as the world's 
largest dredger, said the sale 
was designed to widen owner- 
ship of the sbares. The sale 
also brings to an end the work- 
force's indirect stake in the 


company's share capital Bos- 
kalis said. 

Trading in Boskalis shares 
on the Amsterdam Stock 
Exchange was suspended 
briefly before the transaction 
was announced. 

When trading resumed, the 
shares fell to close at FI 4130 
compared with a pre- 
suspension price of FI 41.90, 
but this remained well 
above the private placement 
price. 


Italy tightens 
policing of 
banking rules 

By Andrew Hill in Milan 

The Italian Treasury has 
imposed fines on directors of 
various Italian banks to 
remind them of their obliga- 
tions under the country's 
banking legislation. 

The fines are small - the 
largest is only Ll8m ($11,461) - 
but they indicate the Trea- 
sury's determination to enforce 
the rules on Italy’s sprawling 
banking sector. 

Directors of the Banca Popo- 
lare di Novara, which operates 
one of Italy’s largest branch 
networks, have each been fined 
Ll2m for minor omissions and 
errors relating to Us credit 
position and accounting situa- 
tion. The infringements were 
detected between March and 
October last year. 

Fines were also imposed on 
Cofiip, a financial subsidiary of 
the Novara bank; Credito Lom- 
bardo; Credito Commerciale; 
and Cassa di Risparmio di 
Rieti. 

It is the second time that Mr 
Lamberto Dink the Treasury 
minister and a former number 
two at the Bank of Italy, has 
imposed lines on bank direc- 
tors since he took over as min- 
ister in May. 


This announcement appears as a matter of record only. 



YACYLEC S. A. 


A joint venture of SADE, ENDESA, IMPREGILO, 
Dumez, Siscranyac, Sideco, Dywidag & Recchi 

U.S.$94,700,000 

Project financing to construct and operate 
a 500 kV, 273 km transmission line in Argentina 

Structured and Arranged by 

International Finance Corporation 


U.S.$60,000,000 

Term Loan 

U.S.$ 15,000,000 

Provided by 

International Finance Corporation 

U.S. $45, 000, 000 

O i- Arranged by 

Banco dc Negocios Argentaria S.A. 

Provided through 
participations in die IFC (.nan by 

Socictc Generate 

Banco de Negocios Argentaria S.A. 

Banco Exterior de Espana, S.A. 
Dresdner Bank Luxembourg S.A. 
Kredictbank N.V. 

Banca di Roma 

Banco di Napoli international S.A. 
Banque ct Caisse d’Epargne dc I’Etat 

I.U.Yv-mbnUfg 

Credito Italiano 

(Now York Branch) 

Banca Nazionale dcirAgricoltura 
Crcditanstalt-Bankvercin 
Mediocrediro Centralc 


U.S.$15,000,000 

Italian Export Credit 

Guaranteed by 

SAGE 

Sc/junc Sped ole per I'lVsticiinr/joni: 
dcl Credito all’ Kapoctazionc 

Arranged by 

Credito Italiano 

Provided by 

Banca di Roma 

iNew York Branch) 

Banco di Napoli International S.A. 
Credito Italiano 

tNew York Branch) 

Societe Gen£ralc 
Mediocredito Centralc 
Credicanstalt-Bankverein 


U.S.$14,700,000 

Spanish Export Credit 

Guaranteed by 

CESCE 

Compand Kspanola dc Seguras 
dc Credito a la bxporracion. S.A. 

Arranged and Provided by 

Banco Exterior de Espana, S.A. 


U.S.$5,000,000 

Subordinated Loan 

Provided by 

International Finance Corporation 

AugiihC IW4 


0 Argus Fundamentals 

! ‘Understand v.'dst id driving oil prices' 

~ : ^Petroleum Argus — 

1 CALL.;?* 5 FP.EsTRIAL tc this Mon;.'~iy p',:Si:cat!gr? 7 1 } 3593792 


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19 



; 'Ns. 



FINANCIAL times WEDNESDAY SEPTEMBER. 7 1994 


INTERNATIONAL COMPANIES AND FINANCE 




JCI posts strong 
rise ahead of 
planned demerger 


By Marie Suzman 
hi Johannesburg 

Johannesburg Consolidated 
Investments, the South African 
mining house, boosted attribut- 
able earnings by 73 per cent to 
R748m ($i65m) in the year to 
June, from R4j&2m a year ago. 

It was the last annual result 
before the conglomerate’s 
planned unbundling into three 
separ ate companies early next 
year. 

Group turnover rose to 
R2J2bn, up from R2.63bn a 
year ago, and the dividend was 
raised to 200 cents, up from 
only 132 cents last year. 

Although the results were 
helped by RSASn from the sale 
of Argus Newspapers to Mr 
Tony O'Reilly's Independent 
Newspapers, equity-accounted 
gaming s before extraordinary 
' items advanced 67 per cent to 
R9129m from R582jfrn. 

The company has also 
decided to reverse its decision 
“S to write off R130m of its invest- 
r ment in the HJ Joel Gold Mine 
after a sharp improvement 
in the mine's prospects 
the past year and its successful 
raising of R284m in fresh capi- 
tal. 

Following last year’s tax 
credit of R20-8m, tax paid rose 
to R82£m cm the year. 

Earnings from platinum 


holdings, which the 

world’s largest platinum mine, 
Eustenbmg Ffetbusn, rose to 
Rll&fim from R85.4m, while 
gold benefited from an 
Improved price to more than 
double earnings to R93.8m 
from R34-fim 

The group, which last week 
lost out m the bid to buy Bandr 
eoal, reported that coal earn- 
ings rose substantially to R23m 
from R1.8m. Diamonds also 
had a good year, with aflirrings 
rising to R10L2m from R79.2m. 

Mr Pat Retief, chairman, said 
he expected all sectors of the 
company to continue to per- 
form well after unbundling. 

Under th** plan 
by JCTs lpfldtng - shareholder, 
Anglo-American, piyttpmp 
interests .would, be retained by 
Aagifr Anwriwin white its dia- 
mond interests would be 
bought by De Beers. 

The rest of JCI would be 
divided into a mining com- 
pany, comprising primarily 
JCTs gold interests, and an 
industrial holding company, 
both of which are due to be 
offered to black investors. 

Aithnm gh the transaction 
requires changes to legislation 
before it can be approved by 
shareholders, Mr Relief said he 
hoped final unbundling would 
take place early next year and 
be completed by April 1996. 


Overseas growth helps 
Valeo to advance 27% 


By David Buchan in Paris 

Valeo, the French vehicle 
components group, yesterday 
announced a 27 per cent 
increase In first-half net con- 
solidated profit to FFr487m 
($91m) on tu r nover which rose 
by 1(15 per cent to EFt2L7hn. 

The results confirm Valeo as 
one of France’s more success- 
ful companies. 

In the first six m onths of this 
year it was able to outperform 
the rest of the French car com- 
ponents sector by growing fas- 
ter in file rest of the world. 

Turnover advanced 7 per 
cent in Europe, roughly in line 
with the general increase in 
-A cm sales, but by 10 per cent in 
? South America, 24 per cent in 
North America and 30 per cent 
in Asia. 

As a result, Valeo made 5&1 
per cent of its sales outside 


France in the first naif of this 
year, compared with 5&5 per 
cent in the same period of 1993. 

The company said it had 
increased gross margins, oper- 
ating income and net profit, in 
spile of a rise In its tax rate, 
increased spending on R&D 
and capital equipment, and 
unchanged restructuring 
charges. 

It also increased its foreign 
investments by nearly 10 
times, to FFrS30m in the first 
half by acquiring Borg Instru- 
ments in Germany fairing 
majority stakes in new subsi- 
diaries and joint ventures in 
Argentina and China. 

With strongs' cadi flow and 
a capital increase, Valeo’s debt 
to equity ratio stood at 5 per 
cent by the end of June, com- 
pared with 14 per cent last 
December and 23 per cept a 
year earlier. • - 


BUSINESSES FOR SALE 


Appear in the Financial Times 
on Tuesdays, Fridays and Saturdays. 

. For further information or to advertise 
in this section plezse contact 

Kari Loyntan on + 44 71 873 4780 or 
Lesley Sumner on +44718733308 


FINANCIAL TIMES 


PAN -HOLDING 

ScdtK Annoyrne - Lraetobaurg 

Am of August 31 . 1894. the unconaofldaMd notansat vefcjewmUSO 
356.640271^*8, I*. USD B4&44 per sham of USD 200 par valua. 

The consoBdaMd no* aawrt vidua par chare amounted as of August31 . 1884' 
to USD 684.45. 

That*# yep rty report to Jw'M 30.^99*. wWchtnckid>»«Lbtteln)wli>w»q<tha 
bweatment strategy tartho flrat 6 months, bSMOsblartthsratfbtarBdciffioa 
otthaCon^miy as waUm at Iho-SocUM da la Bourae da LiiXMrteixg' and 
alttw 'Soc*6t«de» Bourse® Frangafass" . 

PAN-HOLONG &A. -7. Plaoadu TMMv— L-fiMnS LUXEMBOURG 
PJO. Bom No. 408— L-2014 Luxambourg 
TEL (352) 4&24JH 02 — FAX: (3Sq 4023X7 


Banque Industxiefle et Mobitifere Privfe • 

Socitrt anonym* au espiisl de- 501 518 400 F. 

Slfae social : 22, me Rnquier, 75383 Riri* Cede* 08., 

RC Part* B 552 035 636 

Notice to die bearers of BIMP CAC-40 
Linked Zero Coupon Notes due 1994 
Redemption Amount 

The hokfen of the BIMP CACMO Linked Zero Coupon Note* due 
advised char the redemption amount has been calculated hr Banken mot 
International pk, according to the Index published by the Soctft* des 
Bounes Fiancatee*- The above issue will mature at 12165% of die principal 
on 5 th September. 1994. The amount payable per FF KWJOO will 
be FF god the amount payable per FP 100,000 will be FF 121^90. 
Payment will be made on 5th September. 1994. 

7th September, 1994 ' 


nmiimminmmmi 



£500,000,000 
Floating Rare Notes 1999 

in avvordanw with the 
pnwuons trf the Nwe^noito « 
hereby given rh«. I of tfathrm 
month period Sth Sepicmher. 1994 
m Sth Dc«rnher. 1W4. the Nore* 
will hear mtcr«f at the rare 
of 5 J4 17 per ccni. per Jiww"- 
Coupon Nn. 3 «i |! therefore fa 
payable on Sth December, W at 

£|J8I.63 per coupon from 
Note! of £100.000 nominal and 
£138.16 per coupon from Notes 
of £10,000 nominal. 

S.G. Warburg & Co. Lid. 
A<ttnt Rjuk 

immiuiimiiiimfiii 


COMPAGNIE BANCAIRE 
£100,000,000 

Floating Bate Notea doe 1995 
InttCMdanfiewithtbe provisoes o£ 
die Notes, notice it hereby given 
that the Rate of Interest for 
the three month period 
2nd December, 1994 has been ! 
at 5.6875% per annum. The Interest 
accruing for sucb three month 
period win be £14LM per £10,000 
Beam- Note, and £1.417.98 per 
£100.000 Bearer Note, on 2nd 
December. 1994 against presenta- 
tion of Coupon No. 9. 

IMon Bank of SwUaeriaBd 
London Brand Agent Bank 
MStpebbsOM 


Generate de 
Banque up 
8% halfway 

By Uonel Barter m Brussels 

G6n4rale de Basque, 
Belgium's biggest bask, yes- 
terday announced net profits 

8.6 per cant higher at 
BFiU&m (*197m) for the first 
half of 1994. 

The rise compared with 
BFr5.8bn In the first six 
months of last year. However, 
the 1993 half-year results 
intituled an exceptional gam 
of about BFr2tm, following the 
sale of shares in ABN Antra, 
the Mg Dutch bank. 

As a result, Gdngrale de 
Basque said that the improve- 
ment in 1994 Was ■HgrritWTTt 

Gross profit was BET21.2S 
bn, a decline of 7.7 p ear cent 
Analysts inte r pr e ted the fall to 
the failure to repeat the strong 
capital gains achieved on gov- 
ernment bonds in 1993, as well 
as the exceptional capital gain 
on the ABN Amro shares. 

However, write-downs and 
provisions were down by 31 
per cent to BFr8.7bn. Total 
assets were up &8 .per cent to 
BFr3^39bn. 


‘Natural’ keyboard from Microsoft 


By Louisa Kehoa 
in San Frandsco 

Microsoft, the world's largest 
publisher erf personal compute 1 
software, has launched an 
ergonomically "natu- 

ral” PC keyboard to befer users 
avoid the dangers of repetitive 
stress injuries. 

Microsoft makes no claim a 
that the keyboard will cure or 
prevent any form of ESI. 
Labels, affixed to the cable 
TinfcfaC the keyboard to a PC 


and to the bottom of the key- 
board, warn users that H CoDr 
tirroous use erf a keyboard may 
cause Repe titi ve Stress Injuries 
or related injuries”. Similar 
warning labels were recently 
introduced by Compaq, the 
world's largest PC manufac- 
turer. The labels are seen as a 
move by the companies to 
avoid liability for future injury 

Already, over 2,000 
injury lawsuits have been 
ffiwA against computer manu- 


facturers in the US. 

The new Microsoft keyboard, 
which will be available world- 
wide next month at a price of 
around $100, is designed to 
allow users to maintain a mare 
relaxed, natural position while 
ty ninp it can he oItir fM into 
any PC that runs Windows 3.1 
or more recent versions of the 
Microsoft software. 

The keyboard is designed to 
encourage users to maintain a 
straighter wrist position - 
avoiding one of the most com- 


mon causes of discomfort and 
injuries. 

Microsoft will also provide 
an "ergonomics guide”. 

"In the last 10 years, comput- 
ers have dramatically changed 
the workplace and the ways in 
which people perform their 
jobs,” said Rick Thompson, 
manager of the hardware busi- 
ness unit at Microsoft 

"Yet in that time, the design 
of the computer keyboard has 
remained virtually 
unchanged.” 


McCain family’s public feud intensifies 


By Robert GHbbens In Montreal 

The McCain family is again 
fi g h t ing in public over the 
future of its Canadian-based 
frozen foods group, McCain 
Foods. 

Earlier this year a New 
Brunswick judge tried in vain 
to mediate In the feud between 
Mr Harrison McCain, 66, and 
his brother Mr Wallace 
McCain, 64, co-chief executives 
and architects of the compa- 
ny's 35-year growth. 


The shareholders, compris- 
ing 30 family members, were to 
vote on September is on a 
board resolution ousting Mr 
Wallace McCain. At issue is 
which branch of the family 
will eventually assume com- 
pany leadership. 

Last week Mr Wallace 
McCain’s sons Michael and 
Scott, both company directors, 
went to court to have the reso- 
lution overturned- They argued 
it violated company by-laws 
and any such change would 


require a two-thirds bo ar droom 
majority. They claimed the 
Wallace McCain family had 
been “e x cluded from foil and 
meaningful participation in 
McCain Foods affairs’'. 

Mr Harrison McCain replied 
swifUy. hi a public statement 
he said the succession issue 
and whether to fake the com- 
pany public and appoint an 
outsider as eHj g f executive — as 
suggested by the judge last 
summer - should be decided 
only by foe shareholders. 


"There is no magic and if 
shareholders representing a 
majority of the company's 
stock want a new chief execu- 
tive, they will have one,” he 
said. "In the McCain famil y, 
the shareholders must rule and 
the will of the majority must 
be respected." 

Mr Andrew McCain, chair- 
man, said the board would 
fight the lawsuit launched by 
Mr Wallace McCain’s sons but 
would go ahead with the Sep- 
tember 13 directors’ meeting. 


Multimedia 
link with 
publisher 

Microsoft, the leading su pplier 
Of personal computer software, 
has formed a partnership with 
The Reader's Digest Associa- 
tion to develop and publish 
multimedia software for home 
computer users, writes Louise 
Keboe. 

They will both market a 
CD-Rom (compact disc read- 
only memory) based on edito- 
rial content from Reader’s 

Digest's best-selling books. 

Microsoft will have world- 
wide retail rights to the prod- 
uct Reader's Digest will sell 
the CD-Rom through direct 

mall 

The deal reflects the growth 
of home computer sales and 
surging sales oC CD-Rom soft- 
ware. In the first quarter of 
1994, global CD-Rom sales 
totalled $136m, up 366 per cent 
from the first quarter of 1993, 
according to the Software Pub- 
lishers Association. 

The Microsoft-Reader's 
Digest title, due for release In 
the second half of 1995. will be 

based on Reader’s Digest refer- 
ence books. 


Deals Done In The First 6 Months Of 1994 

Further Proof That ABN AMRO Delivers. 




20 


INTERIM REPORT 

GT Chile Growth 
Fund Limited 

The Board at Directors of GT Chile Growth Fund Limned announced on 2 September 1994 die unaurfised results 
tor die Company for [he stemondg ended 30 June. 1994. This is the fifth interim report of the Company. 


Results for the six months to 30 June , 1994 



6 months to 

6 months to 

Year Ended 


30.06.94 

30.06.93 

31,12.93 


USS 

USS 

USS 

ASSETS 




Investments 

474.207.180 

305.108.298 

413E62.451 

Net current CBabdlriesJ/asseis 

(4.140.002) 

078,641) 

(7J20394) 

NET ASSETS 

470.067.178 

304.729.657 

406641^57 

Issued shares 

12,000.000 

12.000.000 

12,000.000 

Net Asset Value per share: 

S39.17 

$25-39 

S33E9 

INCOME 




Dividends and bond inrerest 

8.682.706 

10,614.216 

16.589.305 

Deposit [merest 

28,652 

63530 

97.491 


8.71 1J58 

10,678,146 

16,686,796 

Management expenses 

(4.086.690) 

(2.668.673) 

(5.685.992) 

Profit before taxation 

4.624,668 

8.009.473 

11.000.804 

Chilean tarcuion 

(812-345) 

(1.033240) 

(1.603.006) 

NET INCOME 

3 .802.3 23 

6.976233 

9-397.798 

Earnings per share 

$0J2 

$0.58 

• 50.78 

Dividend per share 

S0.60 

50.60 

51.20 

- bom earnings prim- to 31 J 2.92 

50.25 

S025 

SO JO 

- hem earaings subsequent to 31.1292 

50.35 

5035 

50.70 

Analysis of the Portfolio 




30.06 94 

30.06.93 

31.12.93 


% 

% 

% 

Chilean equities 

95 

88 

96 

Chilean bonds 

6 

12 

6 

Net current fli ah. lines) /assets 

(1) 

- 

o 


100 

100 

100 


— 


— 


An Interim dividend was t 

$0.25 per share retires to the period bun the' inception of the Company in February 1990 do 31 December 1992, die 
earnings of whkb are being disotbu ted in eleven equal ins tahnaus between March 1993 and March 1998. The balance of 
the dividend of 50-35 s to be paid coupf earning aenumdared smet 31 December 1992. The dividend, amounting to 
$7,200,000, will be paid on 6 October 199* to Shareholders oT record on 29 September 1994. 

in the sne months ended 30 June 1994. the ner assets of the Company inaeased by 15.6% to £470,067, 178 os against a 
nse of 13.8% In the IGPA Index, eap tesa ed in US Dollar terms. 

By 30 August 1994 - the bresr practicable due before the announcement of these results - net assets per share had 
nsen to $41.64. 

The Company's Interim Report will be despatched to Shareholders as soon as possible. 

it will also be available Emm GT Mamjgemoit PLC, CA member of IMHO) 

, 14th Floor. 125 London Wait London, BC2Y 3AS. United Kingdom. 


Copies of dus statement! 
Alban Gate, 


BY ORDER OF THE BOARD 
David Smith. Secretary. 

The Bank of Bermuda Limited, Bank of Bermuda Buildfog, 6 From Sneer. Hamilton, HM11. Bermuda. 


FIFTH INTERIM RESULTS 



Johannesburg 
Consolidated 
Investment 
Company, Limited 

(Incorporated in the Republic of Sooth Africa - Reg. No. 01/00429/06) 


Highlights from the 
Consolidated Financial Statements 



for the year ended 30 June 1994 
(Unaudited) 



1894 

Bm 

1993 

Bm 

Profit before taxation 

813.4 

415.7 

Attributable earnings 

748.0 

433.2 

Share of retained earnings 
of associated companies 

15L4 

123.3 

Equity accounted earnings 

9124) 

582.4 

Ordinary dividends 

297.5 

195 J2 

Earnings pa share 

- Attributable earnings 

- Equity accounted earnings 

505 cents 

610 cents 

293 cents 

394 cents 


The annual report and Chairman's review will be posted to members on or about 
22 September 1994. 

A final dividend (No. 137) of 164 cents par share has been declared payable 
to shareholders registered on 23 September 1994. Date of payment mil be 
24 October 1994. (Currency conversion date 3 October 1994.) 

Holders of share warrants to bearer should attend to the terms of a notice to be 
published on or about 5 October 1994. 


6 September 1994 


771* fall met of the financial wtaummt * wBl btpottod la shartkoMtr* and capita am b* obtained from the 
London. Secretariat, Jokannttbarg CoruoUdatmd humtnuM Company (London), limited, B St Jamet'k Place, 
London SW1A UfP. 



In accordance with the standard eondidoos relating to the payment of the 


rin n rd dividends declared on 


2 August 1994, payments horn the office of tfae United Kingdom Registrar will be made in United Kingdom 
currency sc the rare of exchange of R5.52 1 7 Sooth Afncsn currency m £1 United Kingdom currency, this being die 
fiat available nre of exchange fat remirancM between die Republic of South Africa tod the United Kingdom on 
5 September 1994, as advised by the com panic*' Sooth African hanltrtq. 

The United Kingdom currency equivalents of the dividends are the r efore as follows: 

Name _of Company 

( All companies arc incorporated in Dividend 

the Republic of South Africa ) 


Gold Fields Property Company limited 
New Via Limited 

Vogekmiisbult Metal Holdings Limited 


London Office 
Greatcoat House 
Francis Street 
London SWIP 1DH 


No, 

M3 

87 

93 


Amount 
per share 

3.62207p 
6.3386 Jp 
2.7 1 65 5 p 


BjmkrtfAthanL 

per pro GOLD FIELDS CORPORATE SERVICES LD4TTED 
Leade n Santana, SJ- Dunning. Seoet ot y 

United Kingdom Reganas 
B*reky* Regritrert 
Bourne House 
34 nlw i ffn Lad 

Dedwhnm Krot BR3 41U 


6 September 1994 



FIN ANOAl. TIMES WEDNESDAY SEPTEMBER 71994 

INTERNATIONAL COMPANIES AND FINANCE. 


Roving Wallenbergs stay true to home 

Overseas expansion will not jeopardise family’s commitment to Sweden 


T he sweeping industrial 
domain built up over 
140 years by Sweden's 
Wallenberg family Is gntorr pg 
a new phase after overcoming 
most of the ripJifTHating effects 
of a long recession. 

With profits again flowing 
fast in most of the companies 
imdar the family’s control, the 
Wallenbergs are looking to 
strengthen their presence in 
growth industries and are eye- 
ing Investment opportunities 
overseas. 

Individual companies, such 
as Astra, Ericsson, Electrolux 
and the forestry group Stora, 
have the income to support 
long-tram development strate- 
gies, both in new technologies 
and new markets. 

“Now the defiance is ova. We 
think the ship is in very good 
order and it is time to be a bit 
more offensive again," says Mr 
Claes DahlMck, chief execu- 
tive of Investor, the holding 
company that forms the core of 
the Wallenberg sphere. He says 
Investor “has the radar on” for 
new investments, especially 
overseas. 

The trend is set to move the 
empire away from its tradi- 
tional dependence on low- 
growth cyclical industries 
towards technology-based 
industries, such as pharmaceu- 
ticals, m affinal technology, tele- 
communications and, perhaps, 
the media 

Senior family members, how- 
ever, will not he drawn on 
speculation about individual 
companies - for example, 
whether they might sell out of 
SKF, the ball-bearings maker, 
or float some of Investor's 100 
per cent holding in Saab- 
Scanta, the vehicle and aircraft 
maker. The emphasis, how- 
ever, will be on evolution, 
rather than dramatic changes 
of direction. 

They also stress that any 
move to build up holding s 
overseas will be limited - not 
more than 10 per cent of Inves- 
tor’s total portfolio - and will 
not jeopardise the family's 
commitment to Sweden. 

That commitment and the 
management capabilities of the 
Wallenbergs are now more 
than ever important for Swe- 
den, given thn unprecedented 
dominance the ampin* exerts 
ova the country's industry. In 
annual turnover terms, Wal- 
lenberg companies account for 
more than SKr500bn ($65bn). 
more than the combined total 
erf the next three largest own- 
ers, the state, Volvo and Sven- 

ftlf fl TTflndeMiankflfn 

But the issue of how effec- 


tively the Wallenbergs have 
wielded their power and 
whether such a hegemony is 
healthy for Sweden’s industrial 
economy, is seldom debated in 
public in Sweden. 

There are, however, serious 
cancans that the WaHenbog 
record, though impressive, has 
not always been flawless ami 
that In the long tern it Is peril- 
ous for the country to be so 

B flr i wwtont mi rmo f-arntTv . 

The LO, tfae federation of 
blue-collar trade unions, has 
voiced its concern. "We need 
strong industrial leaders and 
we need stable ownership in 
Swedrai, but we have too few 
groups and too little competi- 
tion.” says Mr Fa Olaf Edin, 
chief economist at the LO- *Tt 
would be good if more foreign 
owners came to Sweden and 
established themselves as 
strong leaders of industrial 
companies.” 

T here Is also the criticism 
that the results of Wal- 
lenberg companies - 
tike those of all Swedish 
exporters - have been exagger- 
ated by devaluations in 1962 

and 1992. "The situation is like 
a runner who sets, a world 
record for the 100 metres,” 
wrote Mr Fa Afrell, business 
editor of the newspaper Hagens 
Nyheter. "The problem is he 
had a downMQ slope, the wind 

h ritinfl Wm and Tip [g p g|]y HO 

metres." 

Critics also say the Wallen- 
berg investment performance 

him been Wia p w^iiwilar anti 

would have bran worse than 

the ura raTl nmHrpfr u rithtm t the 
phenomenal performance of 
Astra, the high-flying pharma- 
ceuticals group. 

There are exampteB of ques- 
tionable judgment within the 
ennrfre. In the nulo and Dana 
industry, the Wallenbergs 
made expensive acquisitions 
just when the cycle was turn- 
ing down - most notably that 
of the German group Feld- 
muhle by Store in 1990 for 
DM4bn ($ 2 _ 6 bn)_ They also took 
foil control of Saab-Scania in 
1991, just as it was heading 
into a trough. 

More recently. Incentive, a 
Wallenberg industrial group, 
agreed In June to sell its stake 
in Esab, the welding equip- 
ment supplier, to Charier, a 
UK company, at SKrS45 a 
share, ihatitirtinnfll sharehold- 
ers maintained the price was 
too low and forced Charter to 
raise its hid to SKr380. 

"The Wallenberg dominance 
is very dangerous because 
nothing develops without com- 


- oS . ■ .% 





petition," says a senior Swed- 
ish businessman. “When 
things get too intertwined it’s 
WkA a group of children playing 
- nobody sticks their heck out 
except one or two leaders. That 
will not lead to creative solu- 
tions which Sweden badly 
needs at the moment" 

In spite of such reservations, 
the majority view in Swedish 
business is that tfae Wallenberg 
record of successes ova four 
generations, which is 
unmatched by any other fam- 
ily dynasty, comfortably out- 
weighs the failures. 

SEP, which invented ball- 
bearings in the 1920s, and Elec- 
trolux, which first produced a 
vacuum cleaner in 1912, ware 
launched during the heyday of 
industrial Innovation. These 
mm pan fog have continued to 
evolve and hold their own as 
market leaders. Electrolux has 
grown to become the biggest 
supplier of household appli- 
ances in the wold. 

In the forestry sector, the 
Wallenbergs have transformed 


Store, through acquisitions 
and divestments, flam a diver- 
sified group into Europe's big- 
gest pulp and papa company. 

In the cases of Astra, the 
pharmaceuticals group, aud 
Ericsson, the telecommunica- 
tions company, the empire has 
produced successes based on 
modem technology . 

P rofits growth at Astra 
has outstripped turnover 
growth for each of the 
past 16 years. Ericsson ran into 
trouble in the 1980s as it got 
bogged down in the computer 
business, but it sold out of 
computers, refocused on tele- 
communications and has 
become a world leader in 
mobile telephony. 

The Wallenbergs also steered 
Aaea into the merger with 
Switzerland's Brown Boverl in 
1988, creating the engineering 
giant ABB. Half controlled by 
the Wallenbergs, ABB was 
recently voted Europe’s most 
respected company in a Finan- 
cial Times poll. 


There is a strong better to 
Sweden that without the Wal- 
lenbergs’ commitment to the 
country and their wfitingness 
to invest for the Long term, 
Sweden wadd not have pro- 
duced such an array of interna- 
tfonal companies. 

Wallenberg companies have 
invested heavily overseas In 
recent years. In some cases 
retaining as little os 10 pa 
cent of their production In 
Sweden. But. unlike family 
concerns, such as the Dee* 
retail organisation of thaKam- 
prad family and Tetra Fak. the 
packaging group owned fay the 
Hausing family, their head- 
quarters and ownership 
remains in the country. 

Some tear that without the 
Wallenbergs modi of Swedish 
Industry would migrate. : 

Hence, there is widespread 
anxiety in Sweden ova mown 
within the European ~ 
at present dormant - to rob 
against the kind of weighted 
share structures that jlhar 
companies to be tightly cog-' 
trolled by minority sharehoH- 
ers. Such a ruling would 
the Wallenbergs to 
their empire dramatically. 

“We simply don't have 
capital to be able to control i 
own rrttnpimfoa, 90 WO 

face an. exodus of 
says Mr Magnus Lemmti, ! 
executive of the FBdenitiinJif 
Swedish Industries. 7 4 ' 

As long as that thrift 
remains buried in the pife <rf 
shelved initiatives In Brusaek 
the principal remaining 
for Mr Peter Wallenberg, foe 
keeper of the fourth generation 
of Wallenberg entrepreneur- 
ship, is to manage foe smogth 
transition of the inheritance to 
Jacob and Marcus Wallenberg, 
his son and nephew. 

And he does not consider 
that inheritance to be any kfod 
of burden on foe nation. "As 
long as we perform at least as 
well or better than other equiv- 
alent industries; as long as we 
behave as genuine Swedes to 
Sweden, meaning that we live 
here, we pay this country's 
taxes and we fulfil all our 
duties more than just the mini' 
mum, than we wffl do 
that win be against foe best 
interests of tire country.” ;;■£ 


Hugh Carnegyand 
Christopher 
Brown-Homes 

This is the last in the series on 
the Wallenbergs. The precious 
articles appeared on September 
landi 


Institutions agree to share information on governance 


By. ARson Smith 

A more structured approach to 
exchanging information inter nationally 
on attitude s towards corporate gover- 
nance issues has come a step closer, 
after an agreement by organisations 
representing institutional investors. 

Associations for tostftutional inves- 
tors in a range of countries, including 
the US, ffonaifo , Australia, Germany 
and the TIE, have decided to exchange 
information on a more routine basis 
about questions such as directors’ 
remuneration and the duties of 


nonexecutive board members. 

The associations, which include tfae 
Council for Institutional Investas, an 
umbrella organisation for DS pension 
funds, will pass each other copies of 
papers setting out their broad attitudes 
towards governance issues, so that each 
is more aware erf the practice in other 
countries and ryn tmIm that informa- 
tion available to its mambas. 

Same organisations would like to see 
that develop within the next year or 
two into a network for exchanging 

more specific info rmation 
This would not be Intended to lead to 


the establishment of common positions 
or to making recommendations an how 
investors should vote on issues. 

Instead, the aim would be to ensure, 
that, when questions arise fa share- 
holders to decide, institutional inves- 
tors are in a better position to know 
how the approach of a particular com- 
pany compares with local practice. 

It is already dear, however, that not 
an the associations which have agreed, 
to the firat stage would want to be 
involved in ifanting with company-spe- 
cific information. 

In the UK, the National Association 


of Fmskm Funds and the Association 
of British Insurers, whose members 
manage more than. £550tm (f8S2bn) of 
investment funds, have been increas- 
ingly adopting a high profile on corpo- 
rate governance. 

Last month, for example, the ABI 
wrote to a number of tfae UK’s largest 
companies expressing concern ova 
large payments to former directors. 

The question of handling corporate 
governance questions in an interna- 
tional context will be raised next week 
at a conference on European invest- 
ment issues organised by the NAFF. 


Notice to Holden of 

MEDICAL CARE AMERICA, INC 

tin* CmwrrrtlMr r oh«inHntma 
Debentures Doe 2M6 

Nonce !» beefy Out ■ wholly -wood «b- 
aidfaay of CotanbWHCA HaUcn Corpcot- 
do* (“CofcjBiOi^ wB be merged (the "Mo-boO 
wife nd inn MoSeal One Anuta, be. ute 
-Oompen/I on or abore Sqxonbcr K. BM, 
■Berafeidi Aneibe Onm wiB bamtxmd* 
May ofCotantw. n»aai W fc<»’dii»id en 
U 1994. h is 



rofrbraof( 

MEDICAL CAKE. AMERICA, INC. 
r 1.094 


EUROFVMA 

European ConcHry for too Ftotnca 
o> tetoadMtog Stock 

U.S. $250,000,000 


Boating Rato Notes <fua20Q2 

For N Merest Period 6th 
September, 1994 lo 5th Decem- 
ber. 1994 the Notes vrffl cany 
an Interest Rats of 5.375% 
per annum with Coupon 
Amounts of UJS. $13.44, U.S. 
$134.38 and U.S. $13,437-50 
per U.S. $1,000, U.S. $ 10,000 
and U.S. $1,000,000 Notes 
respectively The relevant 
Interest Payment Date wS be 
9h December 1994. 

. Sw)m BufcCorpo re Uon 



* Ua FT wetiioa mow aonior European dec ima wnaiiiara raapona M B far bua toooa 
locations/ tits saketfon that my edw BWbManeeee n— s pa cer . (SoockSRS 


• Tho FT reaches B2K of Dm CStfa In SurapCa ow 2000 companies who owoA 0OMH h 
otiM endA* Immanent kt Ncrti Amfc& (Saaow CNoT Executes ki Eaepa 
■may 1990) 

*- — *•* -— J - -) — |— r— ■‘mil nf i m*n htn ■ti wl tie mm r patitnnn iftinon rnutirT 

Me tonl e Burton 

rmmw tiomo. xa eat eatti smoiv vartt, irr uon 

TetnkMi- rtn 7B24BOO, met tag, r 

oryou ruatM ti ff stiw l o KuM B Hoih o. 

FT Surveys 


if 

i an fo r cm on 
bong destroyed 
die rate of (bounds 
tree* a minute, bow can planting 
just a hand fill of seedling* make a diffe ren ce? 

A WWP - World Wide Fund For Nature me 
nnnay addresses some of Ac problems frdng people 
dm cm finer them to chop down trees. 

Where hunger or porerty is the imderiytng ook 
of ddbresta&'oa. wc eon pnreide fnrit trees. 

The vflkgets of Magnngi, Zaire, for example, eat 
papaya and mangoa from WWF mss. And nriurtiiii) 
bating to sdTdiidMr to boy other food, they can now 
scD the surfdos Sttit their nursery prodoces. 

Where eras are chopped down for firewood. 

WWF and the local people can protect them by planting 
6* -growing varieties to fenn x nuiL wuM e fod sonree. 

The i» pamcalady valuable m the [mpenctoUe 
forest, Uganda, where iixfigcoctH hanhoootb cake 
two. hundred peats to mature. The Afukhurii ban 
trees planted by WWF and local villages can be 
harvested within fire or six yean of planting. 

Where ircea «c chopped. down to be used for 
coamocMm. as is Panama, and th kwran. we supply 
other specks that arc &*fc-growing rod easily replaced 

'These bcg nuncrics are just put of the wodt we 
do with the people of the tropical forests. 

. WWF sponsexs students fitto developing comma 
on an agroforatry course at UPAZ Utrivcaky in 
Rica, where WWF provides te d uacd advice on 
growing vegetable and grain crop*. - • 


Unless 
> is given. 
^ is exhausted 
very quickly by **hsh 

— horn" farming methods. 

Nfcw tracts of tropical forest would then have 
CO be cleared every two or three yeats. 

This u n n wm uy destniasan can be prevented by 
combining modern techniques with tmdih'tmal 
preetkes so that rite same plot of bod can be used to 
produce crops over and over again. 

In La Ptanada. Colombia, our experimental £mn 
demo ramies how these techniques can be used to 
grow » EuniSy-* food on a aid four hectare plot. 
(Il * cad daring the raoal ten hectare, of ferestO 
WWF Sdttaodon arc now involved m over 100 
•repeal forest projects in 4S countries around the world. 

■Hie idea behind all of this wo* is ite the me of 

”“«] resources *<wU be BtaamaUe. 

WWP b caflmg for the na of deforestation in the 
to be hriwd by 1995, sqd for there to be no 
w* deforestation by foe end of Ac canary 

Write to foe Membership Officer ar the address 
^ ow t° find out how you eiQ help n ensure that 

600 “« conrinuc to «eal nature 1 * 
opaal from the ncxL Ir could be with a 
OH appropriately enough, a leg*,. 




WWrVfoAIVKUBh«IFbr)tot ■ 

FOR THE SAKE OF THE CHILDREN 

WE GAVE THEM A NURSERY. 




4 


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■: 7 f 




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-it 


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FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1 994 


21 



British Excellence and Quality 

AN OCCASIONAL SERIES 






Holland & Holland 

Our reputation as Master Gunmakers was founded upon unstinting 
devotion to innovation and outstanding craftsmanship. Since 1835, this 
proud heritage has nurtured the entire world of Holland & Holland to 
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coloured silks, all celebrate our distinguished lineage. In London, and now 
iii Paris, Holland & Holland is the convivial meeting place for all those who 
share our passion for fine traditions. 

Each and every one of our products embodies a commitment to quality 
without compromise. This is perhaps most finely expressed in the creation 
of a 'Best 1 London shotgun. So intricate and specialised are each of the 
processes involved that five years of apprenticeship and a lifetime's 
practical experience at the bench seldom allows any man to become master 
of more than one aspect of gunmaking. With each gun, over 800 hours of 
painst aking handcrafting separate the first cut on a raw chopper lump 
forging from the final linseed buffing of the finished walnut stock. The 
outcome is a thoroughbred weapon of purest pedigree that will serve for 
many generations. 


ViM: 

i m 


* rS 



gBg 

if 

v rr.“.--V 



The Committee, which was established in 1992, aims to focus attention on British excellence, 
style, craftsmanship, innovation and service. These are qualities which all its members share 
and for which British products and services are renowned around the world. 

For further information, please contact: 

The Director, The Walpole Committee, 40 Charles Street, London W1X 7FB, England. Tbl: +44 71 495 3219 Fax: +44 71 495 3220 


4 


22 


FINANCIAL TIMES WEDN ESDAY SEPTEM BER 7 1 994 


JOINT STOCK 
COMPANY 

&£L£ CTR0ST4L 


We are an electrometallurgical enterprise 
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Currently we have spare capacity and space 
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► 


144002 Russia. 
Electrostal Town 
Moscow Region 
Tel: 09657-2-66-55 
Fax: 09657-4-31-80 
Telex 911659 ELEST 





Published In all editions of the Financial Times 
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INTERNATIONAL COMPANIES AND FINANCE 


Hopewell 
earnings 
boosted by 
CEPA sale 


By Louise Lucas 

Hopewell Holdings, the Hong 
Kong property and construc- 
tion group controlled by Hr 
Gordon Wu, yesterday 
announced a 20 per cent rise 
in net profits to HK$2.4bn 
(USS3l0m) for the year to June 
30, up from HK$2bn in the pre- 
vious year. 

The company booked excep- 
tional items of HK$1.8bn, 
Including HK$l.2bn from the 
spin-off last November of Con- 
solidated Electric Power Asia 
(CEPA), a vehicle incorporat- 
ing Hopewell's power stations. 

The net result was HEgl^hn 
less than Mr Wu's forecast of a 
doubling of profits, made at 
the time of the spin-off, bnt 
was in line with market expec- 
tations. 

Analysts say they do not 
expect to see quality recurrent 
earnings come on stream nntn 
1996, when CEPA and tbe 
Gnangzhou-Shenzhen super- 
highway will start making 
mare significant contribu- 
tions. 

Earnings per share climbed 
10 cents to 57 cents, and 
the directors are proposing a 
dividend of 19 cents, an 
improvement of 1 cent on last 
year. 

Profit at the operating level 
rose to HK|795.5m from 
HK$73&2m, reflecting the big- 
ger role played by exceptional 
items in the previous year. 
Then, property sales and other 
exceptionals totalled 
HK$2.1bn. 

Hopewell benefited from a 
sharply lower tax bill this 
year, at HKS105.6m compared 
with HK$287.2m. This reflects 
the increase in its share of 
earnings from overseas, which 
are not liable to Hong Kong 
tax. 

CEPA’s projects are mainly 
in China (where foreigners can 
enjoy tax-free periods of 
around six years), the Philip- 
pines, and south-east Asia. 

Deductions for minority 
Interests also fen, to HK$172m 
from an abnormally large 
HK$683m. 

The previous year’s figure 
was swollen by the sale of a 
property owned by a company 
in which Hopewell had a 60 
per cent interest 


Optimism fades on HK-listed China groups 


By Louise Lucas 
In Hong Kong 

When companies turn in profit 
rises of between 33 per cent 
and 278 per cent, it seems 
churlish to find fault But the 
surge in net earnings at the 
interim stage reported by the 
10 China enterprises listed in 
Hong Kong has dampened the 
optimism that had led to a 
rally in the share prices before 

t he ftpufuiTicqmpT ltfl . 

Excluding Qingling Motors, 
the light-truck assembler 
which floated last month and 
has not reported, only two of 
China's H shares performed 
markedly better than market 
expectations - Ylzheng Chemi- 
cal and Shanghai Petrochemi- 
cal, whose net profits respec- 
tively rose 278 per cent to 
Yn460.6m (S53J84m) and 35 per 
cent to Yn772£m in the first 
six months of the year. 

The two chemicals compa- 
nies produce commodities 
which are in short supply (and 
therefore strong demand) and 
have big client bases, unlike 
the machinery companies. 
They revealed strong balance 
sheets and an easing of 
triangular debt, which has 
been choking profits at 
the state enterprises since 
the resurgence of the main- 
land's austerity drive last 
year. 

As credit lines tightened, so 
companies found their custom- 
ers' ability to pay for goods 
deteriorated. This in turn hurt 
the first company, which found 
itself unable to pay off its 
creditors - hence, triangular 
debt 

Ylzheng, China's biggest pro- 


ducer of polyesters, saw its per- 
formance enhanced by the 
global shortage of cotton after 
poor harvests. 

According to the company, it 
had orders for 567,000 tonnes of 
polyester in the first half - 
approaching double its produc- 
tion capacity, which stands at 
304,480 tonnes. 

But there is a big question 
mark over the sustainability of 
both companies' performances, 
which have been helped by 
state subsidies which guaran- 
tee both the supply and price 
of important raw materials. 
The companies benefit from 
rising costs an the sales side, 
while being protected on the 
supply side. 

Mr Lawrence Ang, associate 
director with SBCI Finance 
Asia, says it is becoming 
increasingly likely that the 
state will review its subsidy 
policy, especially in the case of 
state-owned companies which 
are now in effect in the hands 
of foreigners and therefore can- 
not justify financial protection. 
Removal of the subsidies 
would slash profit margins. 

"When these subsidies will 
be removed is the big uncer- 
tainty. Yizheng never says 
when it might be lifted, hut 
when Shanghai Petrochemical 
listed last year the directors 
said the state would guarantee 
the supply of crude oLL but 
only in terms of volume, not 
price,” Mr Ang says. 

Economic data emerging 
from China since July suggest 
the country is in no position to 
relax the credit tightening 
measures. Inflation continues 
to rise, standing at 23 per cent 
(34 per cent in the cities), while 


fixed-asset investment surged 
73 per cent over the year to 
July. An unofficial meeting of 
China's leaders last month 
agreed to continue the auster- 
ity programme throughout the 
second halt 

While the programme has hit 
the performance of most of the 
companies, only Tsingtao 
Brewery - the pioneering H 
share - was hit by the unifica- 
tion of China’s exchange rates 
last January. 

A winning card in the com- 
pany's listing prospectus was 


tificates, the now-defunct cur- 
rency designated for foreign- 
ers. As it is no longer allowed 
to do this, it has moved to hav- 
ing a net foreign exchange 
expenditure of around $3m. 

The brewery group is now 
looking to expand its export 
markets in a bid to soften the 
blow, but in the meantime its 
new vulnerability to foreign 
exchange fluctuations - 
nngpon so Car, but a devalua- 
tion is forecast for late this 
year or during 1995 - stands to 
hamper earnings. 


China's Hong Kong listed companies (Yh m) 

- 

- 1994 

1994 year 

1995 


Interim 

forecast 

forecast 

Sefron Printing 

66 

121 

170 

Dongfang Electric 

26 

95 

111 

Guangzhou Shipyard:' 

i4a 

168 

121 

Kunming Machine Tod 

IS 

36 

56 

Luoyang Glass " 

• :■ 127 

342 

260 

Maanshan bon & Stad - 

an 

1.427 

1341 

Shanghai PHroctMfdcd 

773 ■ 

1.336 

1,491 

Tfartfto Bohai 

72 

142 

163 

TSingtao Brewery 

- 102 

283 

405 

Ylzheng Chemical 

461 

. 932 

1,036 



Sauna* ; 

HIXCar Far £teS 


its strong foreign exchange 
earnings. 

However, this has swung in 
the opposite direction as for- 
eign exchange receipts dried 
up in the wake of the unifica- 
tion, while imported raw mate- 
rials still have to be paid for in 
hard currency. 

Tsingtao previously received 
payment for some 30 per cent 
of sales in foreign exchange, 
due meanly to domestic sales at 
foreigners 1 outlets such as 
hotels. 

The company was able to 
stipulate payment in US dol- 
lars or Foreign Exchange Cer- 


Machln ery and steel compa- 
nies dominated the most disap- 
pointing results, with Maan- 
shan Iron and Steel - the 
biggest H share company by 
market capitalisation - leading 
the pack. 

Maanshan suffered from the 
decline in steel prices in China 
- a reaction to Russian dump- 
ing - and earnings slid 30 per 
cent to Yn590.6m from the 
revised 1993 interim figure of 
YnS35.4m. 

Mr Brian Leung, an analyst 
with W. L Carr (Far East), reck- 
ons that while steel prices are 
likely to remain weak in the 


second half, rising production 
capacity and growing or flat 
demand for products should 
help profits. 

However, the triangular debt 
problem will remain a big 
issue - the company is now 
estimated to have accounts 
receivable of Yn2bn. compared 
with Ynl-2bn six months 
ago. 

The debt problem will also 
continue to rear its head at 
Beircn Printing Machinery, 
where profits jumped 33 per 
cent to Yn55.5m from Yirilm, 
and Kunming Machinery, up 
155 per cent to Ynl5.S9m from 
Yn6.2m. 

In a bid to stave off debts 
Kunming cut sales, and saw 
turnover slump 55 per cent to 
Ynl8.67m from Yn42.19m. Mr 
Leung estimates that just one- 
third of the group’s profits 
were generated by core 
businesses, the rest coming 
from a Yn5.7m tax write-back 
and interest income from the 
proceeds of its dual share 
offering In China and Houg 
Kong. 

Kunming spent a mere one- 
quarter of the Yu390m raised 
and creamed interest off the 
remainder, investing just a 
fraction of the figure quoted in 
its listing prospectus on new 
machinery and tools. 

The outlook for all the 
H-share companies in the sec- 
ond half is not promising, 
although some analysts are 
recommending the chemical 
companies and, for relative 
value, Dongfang Electric, 
whose conservative accounting 
policy means that TO per cent 
of whole-year profits are 
booked in the second half. 


Profits at Australian 
insurer fall to A$6m 


By NUdd Taft In Sydney 

C. E. Heath International, the 
Australian liability Insurer 
which was spun off from its 
UK parent in 1992, yesterday 
posted an operating profit after 
tax and abnormals of A$6m 
(US$4.4m) in the six months to 
end-June. This compares with 
a profit of A$18.7m in the same 
period of 1993. 

Heath's problems stemmed 
from the worsening investment 
environment - In particular, 
rising fixed-interest markets 
which created unrealised 


investment losses of A$32.7m, 
when the portfolio was 
“marked to market value". 

This caused Heath to move 
to an operating loss before tax 
and abnormals of almost 
A$l5m, compared with a 
A$28.7m profit last time. The 
loss was then partly offset by a 
A$24.5m abnormal surplus, 
resulting from the sale of Cali- 
fornian operations. 

Heath added that its under- 
writing profit, net of expenses, 
rose from little better than 
break-even in the first half of 
1993, to A$9.7m. 



Bw FT M ch M mo— bihw» people wtttt prepwty nwp o natoMt y in the UK dan mtf other newspaper Ml mow 
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Financial Times, Alexandra BnDdhgs, Queen Street. ManeftMtar M2 5LF 
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Europe’s Longest-Established Stock Exchange 
Proudly Announces Europe’s newest Trading System 


On Inday September 30di, 199-1. trading on Europe's 
senior stock market will undergo a revolutionary change. 

Partly dirouyli die introduction of new and advanced 
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STOCK EXCHANGE Z 


And prepare for tomorrow's revolution 


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.\wr l- 1 I J i I l l I i. l_l. i 1. 1 -l.J [III l.l ! _1 | i I i_| r«»n7UH l i l i ) l i l i I i I I I | J i | I I I 1 I i I t |_J 

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' nr "“ I I .L.l. I. I..I.J.J l.l I |.I. | | | i.| LI I I. L LJ..L 1 L 1 . 1 1.1 ( 1(11 


POSTCOOK t t._ 1 ] J J L 


HUTCHISON WHAMPOA LIMITED 


INTERIM RESULTS 

FOR THE YEAR ENDING 31 DECEMBER 1994 


Financial Highlights: 


Turnover 

US$1,819 million 

Profit attributable to 
the Shareholders 

US$482 million 

Earnings per Share 

* US 13.3 cents 

Dividends per Share 

* US 3.4 cents 


* Please note these corrections to the announcement of the interim results published on 26 August 1994. 




Hutchison Whampoa Limited 


m 


Telecommunications * Container Terminals • Property • Retailing • Energy 

Head Office: 22/FI., Hutchison House, Hong Kong. Tel: (852) 523 0161 Fax: (852) 8 10 0705 
European Office: 9 Queen Street, Mayfair, London. WIX 7PH Tel: (071) 499 3353 Fax: (071) 491 0872 


Inter Capital 
Limited 

U^. $50,000,000 

Floating Rare Notes 
due 1997 

For the si* months fich Septem- 
ber. 1994 to 6th March, 1995 
the Notes will cany an interest 
rare of 6.6875% per annum 
with a coupon amount of U.S. 

$336.23, per U.S. $10,000 
Note and U.S. $8,405.82, per 
U.S. $250,000 Note, payable 
on 6th March, 1995- 




Company, London Agent Bank 


PERSONAL 


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Ufestpac Banking Corporation 

(Incorporated with limited liability in the Slate erf New South Whies. Australia) 

U.S. $240,000,000 

Perpetual Capital Floating Rate Notes 

In accordance with the terms and conditions of the Notes notice 
is hereby given that for the Interest Period from 7th September 
1994 to 7th March, 1995 the Notes win cany an Interest Rate of 
5.8625 per cent per annum. The Interest Amount payable on 
the Interest Payment Date which will be 7th March 1995 « 

U.S. $29,475.35 for each Note of U.S. $1,000,000. 

Ufestpac Banking Corporation 

Agent Bank 

Westpac House, 

75 King Wilfam Street 
London EC4N 7HA 



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FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 ★ 

INTERNATIONAL CAPITAL MARKETS 


Bund yields reach their highest for two years 


By Antorea 8tarpe and Martin 
Brice In London raid Frank 
McOurty bi Now Yoifc 

Yields on 10-year German 
government braids rose to their 
hi gh e st level since September 
1992 on fears that the rapid 
recovery in the German econ- 
omy would prevent the Bund- 
esbank from cutting interest 
rates further. 

The yield an 10-year bunds 
rose by 10 basis points to 7 % 
per cent Most of the activity 
Was in the futures market, 
where the December bund 
future fen 0.63 to 89.09. 

The rise in yields coincided 
with the Bundesbank’s ««i» of 
Treuhand 10-year bonds, which 
is est imat e d to raise a total of 
DMSbn. Yesterday, DM3bn was 
aJdoted to the federal bond con- 
sortium at 100.95 to yield 7.36 
per cent. Analysts said the 


Bundesbank would have to 
offer a yield of 7% per cent to 
ensure a smooth auction today. 

Worries about the federal 
elections next month also 
weighed on the market. Mr 
Holger Schmieding, senior 
economist at Merrill Lynch, in 
Frankfort, said inves to r s who 
had been anticipating a clear 
win for Chancell or Helmut 
Kohl's centre-right coalition 
are becoming nervous follow- 
ing his poor showing In recent 
opinion polls. They are now 
hoping this weekend's state 
ejections in the east German 
states of Saxony and Branden- 
burg win produce a clear 
majority far his CDCJ party. 

The market is expecting con- 
firmation of the speed of Ger- 
many’s economic tumround 
tomorrow when west German 
GDP data for the second quar- 
ter is due. 


■ G31ts fell more than a point 
yesterday, puBed down by the 
decline in rim German market. 
Volume in the cash market 
ms thin, however, as investors 
Stood OH the ■MbMuph ahead of 
today's m eating between Mr 
Kenneth Clarke, the chancel- 
lor, and Mr Eddie George, gov. 
emor of the Bank of England. 


GOVERNMENT 

BONDS 


Analysts were divided on 
whether the meeting would 
produce a rise in Interest rates. 
Mr Andrew Roberts, at DBS. 
said: “The market would be 
surprised if there were a rate 
hflra — there is ver y little infla- 
tionary pressure just now." 

Mr Michael Pratten at Kidder 
Peabody said any rise in rates 
would probably be after the 


Conservative peaty c o nference 
in October. "We feel the chan- 
cellor win hold off,” he said. 

However, Mr Michael Saun- 
ders of Salomon Brothers mid 
there might be an early rise: 
“The case is there tor a rise in 
rates in September or Novem- 
ber. The disadvantage of 
waiting for November is that it 
looks poli tical. " he »dd. 

On Liffe. the December long 
got, f utur e reached 99% in late 
trading, a fell of 1% an the day. 
There was little change in the 
yield spread between gQts and 
German bunds, which was at 
141 frpafo pninta in iats trading. 

■ Spanish government bonds 
were dragged down by the fell 
in bonds and news of the resig- 
nation of the fifth Ministry of 
Finance official in two months. 
Ten-year band yields rase 22 
basis points to 1L39 per cent 


■ US Treasury bonds showed 
farther weakness yesterday 
morning as the dollar receded 
and traders followed through 
on Friday’s negative response 
to August employment data. 

By midday, Hw benchmark 
36-year government bond was 
A lower at 99%, with the yield 
rising to 7.536 per cent At the 
short end. the two-year note 
was down £ at 100£, to yield 
&164 per cent 

With no fresh economic news 
to offer guidance, traders took 
direction from the foreign 
exchange markets, where the 
US currency was slipping 
against the yen end D-Mark. 

With the weaker dnnar rais- 
ing concerns over the value of 
US-denominated securities, 
bonds across the board were 
showing solid losses by mid- 
morning. 

Traders also remained per- 


plexed by the surprising effect 
of last week's economic data 
an bond prices. 

News of weaker than expec- 
ted gro w t h in the jobs market 
had failed to impress the mar 
feet, which instead focused on 
the worrying signs of inflation 
buried in the Labor Depart- 
ment repeat 

Fears of inflation continued 
to rtomfriate yesterday, in spite 
of reassuring comments by 
Federal Reserve vice-chairman 
Mir Akm Blinder. He told the 
Market News Service that the 
central bank may have suc- 
ceeded in putting the economy 
os a “glide path" of moderate, 
nan-inflationary growth. 

Still, traders generally 
appeared unconvinced, with 
many preferring to put off any 
big commitments fhp 

release of producer price data 
at the of the weds. 


Pearson taps the eurosterling 
sector for £ 125 m over 10 years 


NEW INTERNATIONAL BOND ISSUES 

Borrower 

US DOLLARS 

CBy of Yokohama 

Cemex 

cadtfe Local da France 
UrfbenotV Unfcenco LasaCng 

Amount 

250 

250 

200 

70 

Coupon 

« 

7.625 

M* 

6.75 

10309 

Price 

99 v< 14 R 

«n 

9937 R 

10030 

Metuto 

Sepi 2004 

Sep 2001 

OCL 1996 

Sep .1997 

Faee 

% 

Q 325 R 

0 . 78 R 

022 SR 

undtocL 

Spread Book rumor 
bp 

> 35 ( 71496 - 04 ) Bank of Tokyo CapLMaritate 
+ 230-2408 Bankara Trost Intenerilonto 
+ 10 ® EJ Memtotanto 

+ 4 Q 3 ( 8 H 96 - 97 ] Be 4 m Bank Corp 

YEN 

New BWvWalaa Thwaay Corp. 
DSL Bade 

40 bn 

lObn 

330 

438 

9 BL 99 R 

10020 R 

Sep. 196 7 
Sep. 1999 

O 30 R 

025 R 

Nomura Mometicnto 
Itonmonfe— Btoi Rnanoa 

STBtUNO 

Pearson Stating IVeo 
nnt 48 v# 

125 

88 

930 

fel) 

99329 R 

9938 R 

OCL 2004 

Sep 2010 

D. 40 R 

02 SR 

+ 75 ( 5 * 964 ) 4 ] NaMfeat Capital Maricata 
Bwfcg Orothara 

D 4 IARKS 

Badan-WOrtaeroberg L-PTnence 
SudwastLB Capital Uedtstafc) 
BMW Rnanoa 

600 

300 

260 

6.75 

8 l 875 

725 

99 L 796 R 

99388 R 

10025 R 

Bep .1988 
Oct 1998 
OcLIBBB 

0225 R 

0225 R 

030 R 

+ 5 p 9 t 94 - 9 B) Salomon BroOwra 
+ 15 ( 59 ( 96 - 96 ) Mtxgan Sfetoey RtoMat 
+ 30 ( 8 X 96 - 9(0 Draodnar Bank 

CANADIAN DOLLARS 
RaptfclB of Argentina 

100 

1030 

9 Bl 97 R 

Oct 1997 

U 50 R 

+2290 PfcttoB CapW Mariria 

rTALIAN LIRE 

SNCF 

ISObn 

1130 

101335 

OCL 199 S 

1.875 

JP Morgan Seasides 

SWISS FRANCS 

LW Bantatfcanfc* 

100 

5.125 

10130 

OcLIOBB 

1.126 

Banque Paribas (Stiaae) 

LUXBABOURO FRANCS 

23 tan 

8375 

10238 

Deo 2001 

132 S 

Crtdtt European 

FM terms and nervealabte uNeet sttoed. The yMd spread fcmr ralavwt gomirmrt bondQ to tanch Vs aavpBed by to lead 
manager- MMatad. HTcodng rata note. R: feted re-atfor price fen we shown at the ra-aflar level a] mend today, b) Average Nk 
432 ym. OaBetlfe on capon dtoae bom 8 ep £9 to per. Junior tranche: Eftm, 3 -trth Lfcor + 30 bp to Sep . 99 4 -rBObp thereafter, bi) 
3 -mtti Lfcor + 30 bp. d Long 1 st coupon. Q Over titeipdriid yMd. 


By Graham Bowfey 

Pearson, the media and 
entertainment group which 
owns the Financial Times, 
launched a £125m 10-year 
enrosterling offering in an 
active day of issuance in spite 
of the fall in European govern- 
ment band markets. 

Demand for the brads, which 
were priced to yield 75 basis 
points above the 6% per cent 
UK government bond doe 2004, 
came almost exclusively from 
UK-based institutional inves- 
tors, lead manager NatWest 
Capital Markets said. The pro- 
ceeds were swapped into float- 
ing-rate dollars. 

The Republic of Argentina 
launched a CtfOOm three-year 
bond priced to yield 229 basis 
points over the interpolated 
yield on two and five-year 
C anadian gtwa mTmmt bonds. 


Lead manager Paribas said the 
bonds attracted retail and 
institutional investors in Can- 
ada flftnHnwifail Europe. 

Despite the weakness of the 
currency on the foreign 
exchanges, several eurodollar 
offerings were launched. 


INTERNATIONAL 

BONDS 


The City of Yokohama 
issued Its much-anticipated 
rtoai raising psh through an 
offering of 16-year bands priced 
to yield 85 basis points over 
10-year US Treasuries. 

Lead manager Rank of 
Tokyo Capital Markets said the 
launch was successful, with 
strong interest from European 
retail and institutional inves- 
tors as well as from some 
Asian investors. 


However, syndicate manag- 
ers had some doubts whether 
tha bonds would remain in 
Europe. 

“Most will be snapped up by 
Japanese investors,” said one 
syndicate manager. "European 
investors do not trust the 
Hi piMliy of the issue.” 

Credit Local de France 
ta ppod the shorter t»nd of tin* 
curve with a $20Qm offering of 
four-year bonds targeted at 
retail investors in Europe and 

Tftmg Knmg 

The bonds were priced to 
yield 10 basis points above the 
Interpolated yield on three and 
five-year US Treasuries. 

“This offers a wider spread 
than previous four-year dollar 
iaanp^ which have been trad- 
ing through Treasuries,” said 
lead manager EBJ Interna- 
tional. 

Baden-Whrttemberg L-Fi- 


nance launched a DMSOOm 
issue of four-year D-Mark euro- 
bonds priced to yield 5 basis 
points over the BOBL 108 . 


In a similar deal, Sudwe6tLB 
Capital Markets also tapped 
the D-Mark sector with a 
ramnnro nffering of four-year 


bands priced to yield 15 
points above the 5% per cent 
German government bond dne 
1998. 


Czechoslovak bank 
raises five-year 
syndicated loan 


By Anthony RoUnaon 

Ceskoslovenska Obchodni 
Banka (CSOB). the recapital- 
ised and restructured former 
Czechoslovak foreign trade 
bank, is raising $5Qm through 
a five-year syndicated term 
loan managed by Sumitomo 
Bank at a margin of 70 basis 
points over Libor and with 
front-end fees of 30 to 35 basis 
points. 

The bank, which has been 
reorganised as a general tank, 
raised billions of dollars for the 
former Czechoslovak Socialist 
Republic in its former role as 
the monopoly socialist foreign 
trade bank. 

The latest borrowing is the 
bank's first foreign borrowing 
on its own account, without a 
state guarantee, but is expec- 
ted to benefit from syndication 
among a network of relation- 
ship banks. 

CSOB is one of the few joint 
Czechoslovak institutions to 
survive tin* January 1992 disin- 
tegration of Czechoslovakia 


into the Czech and Slovak 
republics. 

Slovakia participated in a 
series of capital refinancing 
operations last year and Slovak 
banks and other institutions 
retain a 26.6 per cent stake. 
Czech banks and institutions 
own 72.75 per cent with the 
balance held by employees. 
The bank is scheduled for pri- 
vatisation. 

The bank reported a grass 
profit of Kcs7.Sbn last year but 
made an operating loss of 
Kcsl0.9bn after tuning a charge 
for non-performing loons of 
Kcsl8.7bn. 

After clearing its books of 
bad debt the bank received a 
Kcs4.Q5bn capital injection, 
which restored its capital ade- 
quacy ratio to 6.49 per cent at 
the end of 1993. 

Standard & Poor's recently 
upgraded the Czech Republic's 
credit rating, reflecting the 
growing attraction for foreign 
investors of the country's low 
foreign debt and single-digit 
inflation. 


Maghreb fund launched 


By Fronds Qhtts 

The Fnunlington Group has 
launched a $3Q.5m Maghreb 
Fund, the first listed North 
African investment fond avail- 
able to institutional investors 
in the US, Europe and the Mid- 
dle East 

One third of investment will 
be made fo Tunisia, the bal- 
ance in Morocco. The invest- 
ment targets include second- 
tier companies which are 
already listed on the Tunis and 
Casablanca stock exchanges 
and onm pantaa which are not 
quoted at present but are 
expected to be soon. 


The Framlington Investment 
Fund, which is listed in Dub- 
lin, will provide institutional 
Investors with an opportunity 
to participate in markets 
which have, until recently, 
been largely inaccessible to for- 
eign investors. 

The International Finance 
Corporation has taken a 20 per 
emit stake in the fond and the 
Abu Dhabi Investment Fund 10 
par emit Most other investors 
are London-based global 
emerging market funds. 

The fond is advised by Fram- 
lln gham Maghreb, in which 
Banque Commerdale du Maroc 
and Framlington have a stake. 


l.-l.-C 


- -I 


:;*n 


. ■' ;* ' 
' 4 1 * 



| WORLD BOND PRICES 1 

BENCHMARK GOVERMHBfT BONDS 

Rad Day's 

CoLpon Date Woe change YMd 

Week Mcxrih 

ago ago 

Italy 

m NOTIONAL ITALIAN QOVT. BOND B<P) FVTUNES 
(UFPQ* Una 200m lOOto at 10096 

FT-ACTUARKS FIXED HUERESf BONCES 

Price Indces 71a Day's Mon Accrued 

UK (tots SepS change 16 SepS Internal 

ri o4- 

yw 

“ Lo> cpypon yftu ~~ — Ntduii ytald ■ “ IflQh ooupoo yitoM ■" 

Sip 6 Sep 5 Yr. ago Sep 6 Sip 5 Yr. ago Sop 6 Sep 5 Yr. ago 


Belgium 


BTAN 
OAT 

Qermaiy Bund 
toy 

Japan No 119 

Nadwianda 

Spain 

UKGKa 


US Treasury * 

ECU (French Govt] 
London dring. ‘New Yoric 

PtasuauKta 

US INTEREST 


9.000 QMK 

7-250 04/04 

3-600 0004 

7.000 12 AJ 4 
aO 00 05/08 
5 £D 0 04 AM 

6 . 7 5 0 06 AM 

8500 04/04 

6800 08 /B 9 

4 . 100 - 12/03 

5.750 01/04 

6000 05/04 

SJIOO 08/99 

8.750 11*4 

SLOOO 1008 
7350 08/04 

7.500 11/24 

ROTO 04/04 
ffliri-tty 

- tnillUpv 
rahdeckrai 

RATES 


96.8700 + 0 L 190 

903000 - 4 X 780 

84.7000 - 0.700 

H 5 J 7 D 0 - 1.100 

107.7500 -0300 

833200 -0530 

943800 - 0-680 

793000 —1340 1 Z 18 f 1135 10.73 

1033700 40380 434 " 4.14 430 

98.4980 40310 434 4.77 438 

883400 -0320 TAB 735 733 

803100 - 1.180 1131 1033 1047 


9 l 48 

835 

938 


Open 

Sea price 

Change 


Low 

Eet vd 

Open Int 

1 

Up to 6 yaera( 24 ) 

119.78 

- 0.17 

11938 

131 

401 

5 yr. 

am 

447 

434 

487 

457 

446 

479 

469 

485 

837 

835 

833 

Sap 

9830 

9632 

• 0 L 93 

0830 

98.16 

8907 


2 

6-16 years pi) 

13413 

- 0.71 

13933 

1.77 

422 

15 yra 

&S 3 

452 

732 

475 

B 33 

7.15 

931 

83 B 

740 


am 

- 9.00 

Dec 

9735 


-131 

9735 

9634 

42463 

57892 

3 

Over 15 years (B) 

15335 

-130 

15430 

136 

931 

20 yra 

837 

447 

7.16 

475 

483 

73 S 

838 

474 

7.42 

9.19 

8.78 

832 




4 

Irredeernabin (B) 

17451 

-033 

177.10 

236 

483 

frredLt 

459 

468 

738 







7 A 0 

734 . 

831 









5 

Al stocks ( 80 ) 

135.72 

-Q 3 B 

134 te 

138 

407 











&05 

738 

730 

■ ITALIAN QOVT. BOND (BTJ^ RITURE 8 OPTIONS (L^Q Ura 200 m lOOths Cf 10016 










— Mtok 

an 9 *- 

__ 



- Mario 

n 10 % 





Soto 

Price 


CALLS 


Dec 

- 234 - 

234 

239 


132 

130 

1.40 


Dec 

2j46 

235 

230 


PUTS 


Mar 

233 

231 

231 


8 Up to 6 yeera( 2 ) 

7 Over 5 years ( 11 ) 

8 M stocks ( 13 ) 


18631 

17332 

17420 


-033 

-030 

-027 


90-04 -14/32 

449 

434 

420 

88-22 -30/32 

474 

450 

447 

102 -os -saae 

474 

832 


100-02 -7/32 

734 

731 

731 

90-15 —18/32 

734 

748 

737 

B34000 -0300 

460 

435 

738 

YWdK Local martto mnttod. 
cert pmntle t» ncweridsreO 


SouokMMB 

Mitotofa ito 


Eat m. tra* OMe iasi Pm 1288 . ifei*™ to* open ml. o* cm pim aa+a 






Sep 8 Sep 5 

Yr. ago 

Sep 8 

SepS 

Yr. ago 

18487 

a 75 

336 

Up lo 5 yra 

477 474 

232 

2.70 

237 

1 . 7 S 

17444 

033 

348 

Over 5 yra 

479 476 

322 

460 


405 

174.78 

031 

849 

5 year yMd- 

_ - — 

-18 year yMd 

—25 year yMd' 


Sep 8 Sap S Yr. ago Sep 8 Sep 5 Yr. ago Sep 6 Sep S W. ago 


9 Debt & loom ( 76 ) 


Spain 

■ NOTIONAL SPAMSH 


BOND FUTURES (M 7 T) 


LoncNfcna 


OntnuW — 
7* Two ecnfc- 
8% iMeuMta- 
4tJ SaranBl — 
- onejw — 


Ttnasy Bte and Bond Yiafck 
485 Tmyaar. 


Open Sell price Change Lem Eat voL Open HL 

8835 8532 - 1.12 8085 8530 51381 93,452 

8535 8479 - 1.09 8535 8470 8*406 27241 


12834 


FT FIXED INTEREST 


127.71 233 

flbovo. O num n Bmdc Lour OK-nM; 


731 9.77 937 731 9.70 

lUK BK-KMK; tyfc: 11* end oner. T HW yMH ytd Year to « 


9lB1 


933 936 


820 


4 JB ltatojwr- 
488 Hw ynr_ 
504 ft** 
636 


6.18 

448 

8 L 85 

724 

732 


Dec 


UK 


DUNCES 

Sep 6 Sep 5 Sep 2 Sep 1 Aug 31 Yr 


CELT EDGED 


ago Ugh* Low* 


(UK) 9138 9139 91.71 9210 9138 10247 10734 9039 
10825 10932 11033 10490 10939 12451 133.87 10733 
- tor 1B04 Oornmnw* SMtotoM t**i ■*» compute 12740 B/WS* bar 48.18 fa/1/719. And Mm NJi akwa 
28 md Had tatoata18E6 8E eaMty Incfcaa fttatod 1W4 


ACTWITr INDICES 

SepS Sep 2 Sep 1 


Aug 31 Aug 30 


81 .A 121.7 841 843 821 

927 893 803 7E3 773 

13887 (nn/Vp . km SOS3 (Vi/79 . 8arii 100: Qownnml SoartM 15/10/ 


■ NOTTONA1. UK aa.T«jnjRB8(UFF3*E60300 Stole aflOON 


BOND FUTUISS AND OPTIONS 

Hunce 

■ NOTIONAL FRENCH BOND FUTURES (MAT 1 F) 


Sap 

Dec 


Open See price Change High 

101-11 100-17 - 1-04 101-12 

100-28 99-28 - 1-04 10029 


Low 

100-18 


Eat. voi Open bo. 
8081 31538 

58901 81798 


■ LONO CULT FUTURES OPTIONS fLB=F£) £50300 MtftaoMOO* 


FT/ISMA WTERNATJONAL BOND SERVICE 


Ustad am to Woe Hentoonaf bonde fcr wtricti toe b an > 

Bkf 09a r a» YkftJ 


iaened M Ottar CKQ. YWd 


Open Sett price Change High 
Sap 11264 11236 - 0.70 11238 

Dec 111.70 111.12 - 0.70 111.70 

Mar 11138 11048 -QJ 2 11138 

■ LOHO TSMW FWBICH BOND OPTIQWa (MAHF) 


.tour EateoL Open tr*. 
11202 163378 82212 

11138 24733 69.738 

110.68 305 4085 


Strike 

Price 


CALLS 


PUT 8 











nca 








IB 
















mm 
























■ 






Dec Mar Dec Mar 

99 2-42 3-14 1-50 2-62 

100 2-06 2-48 2-14 3-32 

101 1-37 2-21 2-45 4-05 

at «eL total CBN 3*70 Ana 4097. fterioua «ferta tpen tot, Qto 14125 Pm I83S8 


USDOUARSIMOfm 
/ttey to Tnaury 8% 03 1000 


. 5500 1011* 101% 


Mar 


Ecu 


(MA11F) 


Germany 

■ NOTIONAL GERMAN BUND RJT131E8 DM260300 IQOthe of 10045 


Open See price Change Kgh Low 
Sap 81 2D 8040 -084 8120 8040 

Deo 8028 7930 -034 8028 7938 


Eat voL Open Int 
740 5228 

428 3787 


Sop 

Dec 


Open 

9030 

8461 


Sett price Change 
9015 -058 

enns -067 


Hgh 

9031 

88.81 


Low 

9006 

8498 


Eat vot Open M. 

50623 48065 

138065 101870 


US 

■ USnWASUHY BOND RJTUBE3 <CgQ H00300 Stole ot 100% 


M BUMP RflUBBa OPTIONS (MFFgPhBSOJOOpctnta of 100N 


StrDce 

Price 

8900 

8890 

4000 


Bjjjj 



NP5B 




E 

BFP^E n' ' 





H’fto 








i,i-. ■ 







■ ' IS! s «• ^ 




Open 

Latest 

Charge 

High 

Low 

Eat voL 

Open kit 

Sap 

103-06 

102-28 

-O-OB 

103-07 

102-24 

38372 

164309 

Dec 

108-10 

108-00 

-009 

108-12 

101-28 

484749 

262345 

Mar 

101-09 

101-09 

-0-11 

101-10 

101-08 

821 

7.793 


NOTIONAL MHKUM TBW OBMAHOOTT. BOM 
POBiy BTEr DMeSO.000 lOOto d 100H 


Sep 


Open Sett price Cheng* 

8440 9826 -037 


Hgh 

9440 


Low 


Eat voi Open int 
24 70 


■ NOTIONAL LONG TOM JAPANESE GOVT. BOND FUTURES 

(Upg YIQOra tooths of ICON 

Open Close Change Ktfi ' Low &L voi Open Int. 
Dec 10735 - - 10737 10735 1974 0 

* LATE ceitoaets Med an APT. M Open Infenat to- we tor ptofa a 6m/. 


UK GILTS PRICES 


H Bad Pifce£+w- 


IBM. 


_1Nd_ -1M4- 

kt Red Price E-t-w- Hpi Low 


d_ -1W- 

H Prices +W- HFJ» 


BotrilNitohneienl 

SStoilW ,«! 

tape 1995 — — ''-J* 

Ilians-— — 4K 

T«Nl2Vj*1«Stt — lim 

14BC1898 - — 124 5 

K 

SSWM= « 

— ’I-S 

Ml T0>ZP6 1M7 498 

*asE= a 

arsE= “ 


578 1«a 
5 l» I9»a 
54M 88* 

622 103* 
476 U»B 

733 M8U 
725 US*. 
72* 108* 
736 164V 

734 mx 
T33 ma 
731 !<®fi 

art «ia 

830 118* 
837 WSfl 

u>m 
441 94% 
480 11« 
4t812raN 
858 infl 
055 184* 


108B 

_ 107* 
— 68* 

— i am 

— 113* 
-* 117* 

-*a 121B 

-»t «ra 
-i iifi 

is 

-* «ia 
- 4 , n«a 

-A 108* 
-tl KB 

-a isi* 
-a mm 
-* usji 
-a ns* 


Tnaailhac 2 D 0 M — 

lOOa RaiAigSitfC 1 M 9 - 4 — 

CaronWn 8 t;pc 200 * 

JSs toaSto 800*78 

CWflljpnlOOS 

•Mi THwWapea»«— 

^ 7\otaom 

flpexm- 8 ». 

,oqs Taa»iiVj«z0O3-7__ 
BJ\ Ton 6>20c 2007# 

ma Wttc 

iosS Tosae9pc200!tt . 
ioia 
118* 
itoa 


1028 

onuifeto 

-H 12W 

488 

7 JO 

71% 

-A 86* 

413 

088 

104* 

-a i 2 s* 

7J9 

073 

8B|| 

-fe K»% 

409 

034 

UMtt 

-1 125% 

1039 

on 

120* 

-a ms* 

037 

477 B*N 

-a ii as 

058 

058 O&ti 

-n m% 

1024 

018 

114% 

-fe 138* 

087 

ore 

98 

-a iiw 

1082 

019127*81 

•1* 151* 

831 

073108*11 

-a i24a 


110 % 

71* 

■183 

833 

1tZP| 

119 * 

«»* 

S3* 

lias* 

sea 

1251. 

101 


2peV8 (B7J» 284 USIWaal -* SO* 

4Spe«tt_(1SS3) ISUMD* -A 11S* C 

ZVpcTH 049 833 3.18 165^4 -4. 178* M 

(78/9 330 476 1611] -A 178 

OAfom — nsfl 444 175 iara -? 118 

331 475 \eSU -A 184JB 


20(96. 


-ma 


eu 

:T3 
2%K1« 
3&CTD 


“ “a 3 a a 


BS3|ac S 

1 — aw 

’s 

931 
441 
937 


ura 

Mar Hhaan Ties 

Irito Ipc 2009 

848 

8.72 94*3 

-B 115* 

in% 

TrisBi/tpoamo 

732 

0£7 

79H 

-» l»A 

ten. owSKUtamitt — 

078 

837 

ura 

-1* 126fl 


Tussle 2012ft 

074 

OE6 

183* 

-1* 127% 


TtatoSfepc 2008-12S- 

731 

048 TSfeB 

-% «% 


TIM fee 2013# 

049 

081 B4feN 

-1* «ra 


7%fe9Dlfr46tt 

042 

. 058 

92 

-u 1 W% 


TwaaBfew2m7tt 

a an 

057 

BIB 

-1* 128% 

a 

Bttifec ana-47 — 

.959 

032 

129% 

-1» 158% 



IflpB S003 



93 

78* 

101* 

101 * 

72* 

624 

61* 

■B 

I27*a 


'L8 1SB X77 _ „ 

461 138 130*e 

464 460 138fi -’a ’2ft 

337 381 1334 1S28 Ugl 

SOB 178 110H -^3 ISA 10g 

, 108 332 10ra ■ J 1 1«L«0 

Pioepectoitoreda m pllon«eonprc4aaat1rtaBon(i/a)iq% 
end C!) 5%. n Hguni h p — d ha aaa tw RF1 Maaa fcr 
hdw*ig 9e 8 ranths- prior to bauN and have been a**tod to 
rate* nbaWv of RPI to 100 to JanuBiy 1967. Oemorrion factor 

4944 EPlto Daownte 1964 1413 wid fcr July 1994: 1443. 


4^-3^ — (18S.J1 


Other Fbwd to t owit 


«_ — 196< _ 

M Pto£eir- WRI* 


BTan 11^3012 

kautosteenu — 
totapHBB 

1»«M, 


beitoWjM 


MU 

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24 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 


COMPANY NEWS: UK 


Sales volumes up 8% and order books at strongest level for 4 years 

IMI shows 4% rise to £37m 


By Paul Taylor 

Strong demand for 
replacement copper plumbing 
systems in eastern Germany 
and a surge in orders Cor bet- 
ting chips from new casinos set 
up on Indian reservations fol- 
lowing the discovery of a quirk 
In US gaming laws both helped 
run , the Birmingham-based 
International engineering 
group, lift first half profits. 

Pre-tax profits grew by 4 per 
cent to £37m in the six months 
to June 30, up from £35.5m a 
year earlier, but were held 
hack by an £&3m trading loss 
on the Redwood International 
computer software company, 
which was finally sold in July. 
Turnover grew by 5 per cent to 
£574m (£546m) including £6m 
(£17m) from discontinued 
operations. 

Operating profits from con- 
tinuing operations increased 


by 20 per cent from £40.6m to 
£4&7m reflecting an improved 
performance by the group's 
four core businesses as the 
benefits of internal cost reduc- 
tion and the broadly based 
improvement in trading condi- 
tions came through. 

The interim dividend, which 
has been held steady for the 
past four years, is being 
Increased from 4.2p to 4.4p 
reflecting the board's growing 
confidence In the outlook. 
Earnings per share rose to 7.3p 
(69p). 

Mr Gary Allen, chief execu- 
tive, said order books were at 
their strongest level for four 
years, and sales volumes bad 
risen by an average 8 per cent 
across the group. However, he 
added that prices had not 
shown any real improvement. 

Mr Allen said demand for 
copper plumbing materials in 
eastern Germany following re- 


unification was the main factor 
behind an 8 percent growth in 
sales to £165m and 26 per cent 
increase in operating profits to 
£14. lm in the building products 
division. 

Copper was considered a 
strategic material by the for- 
mer communist regime in East 
Ger man y, and the pl umbing 
systems installed in most 
buildings were made of inferior 
steel. He said IMI had sent six 
copper plumbing system dis- 
play trucks into eastern Ger- 
many "as soon as the Berlin 
Wall came down”, and orders 
had come flooding in. 

Although several businesses 
in the special engineering divi- 
sion continued to lwalfP small 

losses in the first half, the divi- 
sion as a whole lifted sales by 4 
per cent to £125m and profits 
by 6 per cent to £8. 8m. 

Among the operations contri- 
buting to the Improvement 


were IMTs two casino tokens 
businesses in the US, where 
demand for chips has soared 
recently following the discov- 
ery of a loophole in Federal 
law which has e nab led India n 
reservations across the nation 
to set up gaming establish- 
ments. 


With almost 70 per cent of its 
sales overseas and leading 
market positions in many of Its 
b usiness es, IMI should henwflt 
as the world-wide recovery 
gathers pace. However, IMTs 
well-deserved quality rating is 
already reflected in its share 
price. Headline pre-tax profits 
this year will be depressed by a 
£35m exceptional charge 
related to the sale of the com- 
puter software operations. 
Ryr.hifUng thte profits Of about 
£85m look possible, producing 
earnings of about 16.7p. Hold. 


Promotions help Iceland to £32] 


By Peggy HoIRnger 

Iceland’s shares jumped 14 per cent to 165p 
yesterday as the frozen and chilled food 
retailer announced a 10 per cent increase 
tn the interim dividend and a 7 per cent 
rise in pre-tax profits to £32. lm. 

Helped by strong promotional activity 
and new stores, sales advanced 12 per cent 
to £62L5m for tiie 26 weeks to July 2. The 
payout was increased from L2p to L32p. 
Earnings per share rose 6 per cent to 7.67p. 

Mr Mal co m Walker, chairman and chief 
executive, said the “Great Iceland Give- 
away” - in which the group offered free 
food with certain purchases - had helped 
to return like-for-like sales growth in a 
fiercely competitive sector. 

At one stage during the first six months, 
weekly like-for-like sales had been down 4 
per cent, Mr Walker said. At the same 
time, customers were spending some 3 per 
cent less per visit, about £8.70p per basket 
While the spend had not Improved, pro- 


motional activity holpoH Tfulanri finish tho 
first half with an overall 0.5 per cent 
increase in like-for-like sales volumes. 
Food sales were running approximately L5 
per cent ahead of last year. The promo- 
tions had an adverse effect on operating 
margins which slipped from &9 per cent to 
5.6 per cent 

The bulk of the growth in turnover came 
from new stores, which saw a 142 per cent 
increase in food sales. The group has 
opened SS new stores, with a further 20 
planned to bring the total to 705. 

Mr Walker said that although customers 
continued to search for value, the price 
pressures which have afflicted the food 
retailing sector for the last two years were 
expected to ease in the second half. 
Although competition would remain 
intense, 

Mr Walker was confident that Iceland’s 
role as a second-stop shop would protect it 
from the worst of the competition. “The 
supermarkets might be reaching satura- 


tion, but we have identified 1,500 sites we 
can trade from," he said. "Saturation is 
not a word in our vocabulary." 

• COMMENT 

This was a decidedly more subdued Mal- 
colm Walker than has been seen in the 
past For all his insistence that the blood- 
letting between superstores does not affect 

Iceland, the group has introduced atten- 
tion-grabbing promotions and commis- 
sioned market research to look into 
declines in volume. Yet the company has 
nevertheless delivered the goods. That 
may be why the shares, which have lan- 
guished in recent months, moved ahead so 
strongly. Forecasts of £70m pre-tax this 
year make the shares look pretty cheap on 
a prospective p/e of about H. White there 
may be a little upside left on the back of 
these results, longer-term questions over 
the durability of promotion-led mIm gains 
and the company's discount retailing strat- 
egy are likely to overhang the stock. 


Davis Service Group 
29% ahead to £10.9m 


By Christopher Price 

Pre-tax profits at Davis 
Service Group increased by 29 
per cent from £8.47m to 
£ 10.9m for tiie first six months 
of the year as the business ser- 
vices company reported a mod- 
erate upturn in trading. 

The headline figure was 
boosted by profits of £783,000 
arising from a property dis- 
posal. Without this, the rise In 
underlying profits was 19 per 
cent, similar to the increase tn 
turnover, which improved to 
£15lm (£l28m). 

Earnings per share of 7.51p 
compared with 6.51p last time, 
although adjusted for the 
property disposal, earnings 
were 6.74p, a rise of 38 per 
cent 

A good proportion of the 
Increase came (tom a full 
interim contribution from HSS 
Hire Services, which Davis 
bought 15 months ago. 

Mr George Boyle, finance 


director, said that otherwise 
the company’s divisions had 
seen only a gradual improve- 
ment and that the recovery 
remained patchy. 

Elliott Group, which provides 
portable building units, 
showed sales slightly ahead, 
and Mr Boyle said the divi- 
sion’s steel manufacturing 
capacity was being strength- 
ened. In the linen hire busi- 
ness, firmer occupancy rates 
In the London hotel market 
were offset by weakness in the 
provinces. Workwear was also 
proving a tough environment. 

The support services arm, 
which undertakes cleaning 
and catering contracts, was 
affected by margin pressure, 
due mainly to government 
employment legislation in the 
public service sector. 

The interim dividend is 
increased to 287p (2-73p). Mr 
Boyle said be anticipated last 
year's final dividend of 788p 
would be maintained. 


Stagecoach buys two 
London bus companies 


By Pend Taylor 

Stagecoach Holdings, the 
acquisitive Perth-based bus 
operator, has succeeded in buy- 
ing two of the 10 companies 
that run London's red buses 
for £25u3m in cash. 

Stagecoach, which was 
floated on the Stock Exchange 
in April last year and had orig- 
inally put In bids for all the 
London bus companies, said it 
bad acquired East London Bus 
and Coach Company for £15.8m 
and South East London and 
Kent Bus Company for £9.5m. 
In the year to March 31 the two 
companies had a combined 
turnover of £82.7m and posted 
pre-tax profits of £2. 4m. 

The acquisitions are expec- 
ted to enhance group gamfagc 
in the current financial year as 
improvements In the operating 
margins of the new subsid- 
iaries and the benefits of econ- 
omies of scale are achieved. 

East London and Selkent, 


the second and third London 
bus companies to be privatised, 
will represent slightly more 
than a fifth of Stagecoach's 
expanded turnover and will 
give Stagecoach a significant 
presence in the London region 
which represents about 20 per 
cent of the UK market Follow- 
ing the acquisitions the 
enlarged group will have 
around 1L5 per cent of the UK 
bus market. 

Commenting on the two 
acquisitions Mr Brian Sou ter , 
executive chairman, said: Tn 
the period since flotation we 
have set out a dear acquisiti o n 
strategy designed to provide 
shareholders with longer-term, 
enhanced earnings. Stagecoach 
was previously concentrated 
on provincial operations but 
we have succeeded this year in 
building a major presence in 
large urban areas where we 
believe our proven operating 
strategies can succeed equally 
wen." 


Ttaia anmmnoomcnl appears as o mattar of record only 


£150,000,000 

Newsprint Mill Project Financing 

for 

.Aylesford Newsprint Limited 

a joint venture between 

Svenska CeUulosa Aktiebolaget SCA 

and 

Mondi Europe a division of Minorco 


28 Juno 1994 


Citibank International pic 


Armngm 


Union Bank of Switzerland 


Underwriters and Lead Managers 

Citibank, N A Deutsche Bank AG London 

Dresdner Bank Luxembourg S A The Toronto-Dominion Bank 

Union Bank of Switzerland 


Lead Manager* 


ABN AMRO Bank N.V. 
Credit Lyonnais 
Lloyds Bank pic 


Banque Indosuez, Loudon Branch 

The Ftgi Bank, Limited 
Midland Bank pic 


Svenska Handelsbanken, London Branch 
Managers 


Bayerische Vereinabank AG 
LontftQD Brad] 


The Sumitomo Bank, Limited 


Ptoaider of fixed mie fluids 
European Investment Bank 

Adviser toAykafbrd Newsprint Limited 
S.G. Warburg & Co. Ltd. 


Account Bank 

Citibank, NA 


Facility Agent 

Union Bank of Switzerland 


Telspec 
shares slip 
18p to 285p 

By Peter Pearse 

Shares in Telspec fell 18p to 
285p yesterday in spite of the 
manufacturer of advanced tele- 
communications equipment 
announcing a 30 per cent 
increase in first-half pre-tax 
profits from £194m to fiSL Sgm- 

Mr Garth Riley, chief execu- 
tive, said the market may have 
reacted to a mention of a mar- 
gin squeeze, and stressed that 
this referred only to a anwTi 
proportion of the recently 
floated group’s business. Man- 
ufacturing costs were being 
reduced, with the benefits 
expected by the year-end. 

The profits rise was struck 
on turnover 61 per ahead 
at £13. 7m (£8Jj®m). The mmde n 
interim is lip. payable from 
earnings of 5.49p, a rise of 17 
per cent 


Medeva 
shares rise 
on 70% 
advance 


By Tim Burt 

Shares in Medeva rose 23p to 
151p yesterday after the 
acquisitive pharmaceuticals 
company announced a 70 per 
cent Increased in first half 
proms. 

The Improvement was 
fuelled mainly by increased US 
demand for methylphenldate, 
its treatment for hypera ctivi ty 
tn children end young 
which helped lift pre-tax prof- 
its from £13m to £22. lm. 

Sales of the drug more than 
doubled and account e d for 60 
per cent of the increase in 
turnover from £80. lm to 
£107m in the six months to 
June 30. 

Mr BUI Bogie, chief execu- 
tive, declined to reveal the 
proportion of profits derived 
from methylphenldate, but he 
warned that its recent growth 
was unlikely to be sustained 
in the half. 

Mr Martin Taylor, chairman, 
said the rising sales and share 
price showed the group had 
recovered from its problems 
last year, when & profits warn- 
ing sent tiie shares tumbling 
from 216p to 116p. 

The company also 
announced that Mr Ian Gow- 
rtoSnrith, tiie co-founder and 
former nuwutgiwg director, was 
standing down as a non-execu- 
tive director. 

Mr Gowri e-Smith said he 
had derided to resign because 
of possible conflicts of inter- 
ests with his activities at 
Brlghtstone, the consultancy 
firm formed with Mr David 
Lees, his long-time business 
partner, who resigned as Med- 
eva’s finance director in 
March. 

Earnings per share rose 29 
per cent to 49p (S8p) and the 
interim dividend has been 
increased to l.lp (0.9p) with a 
scrip alternative. 

• COMMENT 

Medeva is in danger of devel- 
oping a dependency. MethyL 
pbenktate ta thought to have 
accounted for the bulk of 
profit increase, and it already 
has a rival in the DS, its main 
market Having made a partial 
recovery from last year’s prof- 
its wanting debacle, farther 
acquisitions could also be a tit- 
tle basty as it has not yet (tally 
bedded down its existing prod- 
ucts and infiltrated important 
markets such as Italy. Never- 
theless, seasonal sales of its 
res pirato ry and asthma prod- 
ucts should lift full-year prof- 
its to about £58m. The shares 
are pretty inexpensive on a 
forward multiple of about 11, 
but Medeva has lot to prove. 


Peek profits 
show 57% rise 
to £3.26m 

By David BJscfcwefl 

A strong performance from 
the field data systems division 
helped Peek, whose principal 
business is traffic systems, to 
lift interim profits sharply- 
They rose to £3J16m for the 
six months to June, from 
£2. 07m in the corresponding 
period last year, when there 
was a toes of £554,000 on tiie 
disposal of discontinued busi- 


Total group sales grew by 28 
per cent, from £44.3m to 
£56. 6m. 

Mr ADen Standley, chief 
executive, said that tiie field 
data division had benefited 
from improving markets and 
wider acceptance of the com- 
pany's newer products, includ- 
ing 1 the Husky hand-held cam- 
puts. 

Net cash totalled £158,000 in 
the period, co mp a red with net 
borrowings of £1.9m in the 
year-earlier period. Interest 
payable was £11,000, compared 
with £104,000 received previ- 
ously. Earnings per share 
improved from i.iip to L75p. 
The interim dividend is 
unchanged at LOSp. 


[dividends announced I 



Oom» - 

Total 

Total 

Civrent 

Data of 

porrfng 

for 

last 

payment 

payment 

dvidend 

year 

year 


Appteyard 

tat 

JL9f 

Oct 21 

2J6 

- 

05 

Boddington 

Int 

3.15 

Oct 21 

288 

- 

883 

Bowater 

Int 

58 

Nov 9 

S 8 

- 

1255 

British Dredging 

..-.—.Int 

2.8 

Dee 12 

2.6 

- 

5.8 


int 

arat 

Oct 3 

065 

- 

1,4 

BumSotd 

tot 

i 

Oct 21 

185 

- 

2JS 

Gomentane Int 

0.4t 

Oct 7 

. 

- 

. 

CRH 

Int 

2-5* 

Oct 12 

2JZT 

- 

723 


Jnt 

3.1 

DecS 

2JB5 

- 

8.4 

Davis Service _ 

Int 

&87 

Oct 28 

2-73 


7.96 


kit 

16 

Oct 24 

1.5 

- 

425 

Iceland 

iminiJnt 

1.32 

Nov 21 

12 

- 

3.8 

IMI 

Int 

4A 

Nov 17 

42 

- 

10 

Ktngqpan 

tot 

1-2* 


1 

- 

2 JS 

Macro 4 

Sri 

11.98 

Nov 7 

1 1.43 

20 

17.7S 

Medeva 

...... ..Jnt 

1.1 

Nov 21 

09 

- 

27 

Metsecf 

tot 

1 

Dec 2 

no 

- 

2 

Oriel § 

——tot 

2 

Dec 2 

2 

- 

5 

Peek 

tot 

1.05 

Jan 5 

1.05 

- 

3.4 

Rft & Merc 8maB ftn 

2.8875 

Nov 9 

2.75 

4.1 STS 

4 

CrfutH 

—tot 

2.6 

Nov 7 

28 

- 

64 


Int 


Oct 27 

- 

- 

- 

TR Euro Growth 8n 

1-7 

Oct 31 

1.7 

1.7 

1.7 

USOC 

tot 

1.26 

Oct 21 

1-25 

- 

48 

IMmpey (George) irtt 

2 

Oct 31 

2 

- 

225 

WBP 

tot 

1 

Oct 18 

as 

- 

18 


Dividends shown 
Increased capital, 


per share net except where otherwise 
stock, glriah currency. 


ton 


More jobs go at Central 
as Carlton restructures 


By Raymond Snoddy 

Carlton Communications 
moved to Integrate its Central 
Television acquisition more 
closely - a restructuring that 
will cost a further 180 jobs and 
lead to savings of more than 
£L5m a year. 

Carlton UK Television, the 
UK's largest commercial televi- 
sion company, broadcasting to 
20m people in London and the 
Midlands, was formed follow- 
ing the £758m acquisition of 
Central last November. 

The programming commis- 
skHnng and production arms of 
Carlton and Central will be 
integrated Into Carlton UK 
Productions, under Mr Paul 
Jackson as managing director. 

Broadcasting services wfll com- 
bine under Mr Clive Jones. 

The ITV company also con- 
firmed its Intention to move its 
Birmingham, broadcasting cen- 
tre to a new purpose-designed 
building in the city and to 
transfer dww operations to its 
Nottingham studios. 


The restructuring will lead 
to 40 job losses by the end of 
»Mb year. When the new Bir- 
mingham centre is in operation 
about 90 jobs will be trans- 
ferred to Nottingham, and the 
overall workforce will be 
reduced by a farther 140. 

Union representatives said 
yesterday they were 
"devasted” by the farther Job 
losses - 50 jobs had already 
gone since the merger. 

Ten years ago Central alone 
had 2,400 staff. When the pres- 
ent restructuring Is complete, 
the combined Carlton UK Tele- 
vision will have a total of 
about 1,000 although a large 
number of independent produc- 
ers are employed indirectly. 

Mr Andy Allan, chief execu- 
tive of Carlton UK Television, 
said the Integration and job 
losses were necessary to create 
the sort of company that could 
compete not just in Europe hut 
in the rest of the world. 

From January 1, Birming- 
ham-based Central Television 
and London-based Carlton 


Television will be known as 
Central Broadcasting and Carl- 
ton Broadcasting. 

“Strong regional boards and 
management will ensure that 
regional services, including 
news and regional pro- 
grammes, will maintain their 
distinctive character and be of 
the highest quality.'' Mr Allan 
said. The aim was to increase 
the amount of production at 
the Nottingham studios, not 
just making programmes for 
ITV but eventually for other 
countries. He added: "If the 
BBC Is Interested we would be 
delighted to talk to them." 

At the Him of the takeover It 
was suggested that £10m-£15m 
a year could be saved by 
rationalisation. Mr Allan 
expects savings of £15m a year. 

Mr Marts Beilby, media ana- 
lyst at S.G. Warburg, said that 
with little real growth in 
advertising revenues expected 
over the longer term. ITV com- 
panies had to cut costs. 

Carlton's share price gained 
12p to close at 857p. 


Boddington declines to £13m 


By Roderick Oram 

Boddington Group, the pubs, 
hotels, nursing homes and 
drink di&ributor, reported pre- 
tax profits for the 26 weeks to 
July 3 almost halved at £13. lm, 
against wKgm which included 
a gain of £18m from the sale of 
its stake in Devenish. 

However underlying profits 
grew by 6.4 per cent despite 
patchy recovery in consumer 
spending. 

“All the economic indicators 
are set in the right direction,” 
said Mr Denis Cassidy, chair 
m»Yi but cautious consumers 
still needed to justify to them- 
selves “the need to spend”. 

Trading profits rose to 
£158m (£l4.7m) with ah four 
divisions increasing profits. 
Turnover rose 14 per cent to 
2129m 0fil3Jhn). 

Its estate of 477 pubs, ah in 
north west ifa gtand , produced 
a 4 per cent rise in profits to 


£K}.7in (£ 10.3m) on turnover up 
6J> par cent to £538m C£5(L3m). 
Managed pubs showed an 12 
per cent rise but tenanted prof- 
its were down LL3 per cent on 
IL2 per cent fewer pubs. 

Beer volumes in its regional 
market fell 39 per cent with 
the fall in the managed pubs 
limited to 2.1 per cent on a 
like-for-like basis while ten- 
anted pub volumes fell 43 per 
cent 

Liquid Assets, the drinks dis- 
tributor, lifted profits by only 
5.8 per cent to £3.04m (£287m) 
despite a 20 per cent increase 
in t u rnov e r to £59m (£49J2m). 

Leisure hotels rose 51 per 
cent to £L7m (£1.13m) on turn- 
over up 30 per cent at £9-4m 
(£7.18m). Healthcare, consist- 
ing at 17 nursing homes in the 
south east of England, reported 
a 3.4 per cent increase to 
£1.66m (£l.6m) on turnover 
ahead 10 per cent at £7-lm 

(£6.4lm). 


The interim dividend is lifted 
to 3.15P (286p) from earnings 
per share of 8.4p (lEL5p) or &2p 
(7_6p) excluding property and 
exceptional items. 

• COMMENT 

Boddington produced the good 
results expected from a group 
which had spotted early the 
benefits of selling Its regional 
brewery to concentrate on pub 
retailing. But two weaknesses 
are apparent, tenanted pubs 
and drinks wholesaling. It 
must move faster to switch to 
higher mar gin managed pubs 
and to expand its estate. On 
the wholesaling side, it has yet 
to show that volume growth 
can taring economies of scale. 
On frill-year pre-tax profit fore- 
casts of £30. 5m and eps at 
19.4p, the shares are on a pro- 
spective multiple of about 15. 
That is a fair rating until Bodd- 
ington makes more of Its pubs 
and distribution businesses. 


Burford Holdings more 
than doubles to £5.12m 


By Christopher Price 

Burford Holdings, the 
acquisitive property group, 
yesterday reported interim pre- 
tax profits more than doubled 
from £1.93m to £5. 12m. The 
company also announced the 
issue of a £100m mortgage 
debenture, primarily to pay for 
the Trocadero Centre In Lou- 
don’s West End, which was 
purchased over the summer. 

Turnover showed a similar 
Increase, rising from £5. 11m in 
the same period last year to 
£11.5m. Earnings per share 
advanced by a more modest 34 
per cent to 1.6p Cl.l9p). 
reflecting February’s £100m 
rights issue. 

Besides the Trocadero deal, 
which cost £94m, Burford spent 
£l03m on a commercial prop- 
erty portfolio from Ladbroke 
during the first haw. Together 
with some smaller deals, 
Burford estimates that its 


annualised rental ran will be 
£35m at the end of the finan- 
cial year, double its expecta 
turn a year ago. Rental income 
at the interim stage had 
increased from £4.7m to 
£l0Am. 

Mr Nigel Wray, chairman, 
said the refurbishment of the 
Trocadero, on one of Europe’s 
busiest thoroughfares at Picca- 
dilly Circus, would begin as 
soon as the company took pos- 
session later this month; 

The company intended to 
strengthen the centre’s enter- 
tainment facilities, taking 
advantage of its vacant 120,000 
sq ft of office since. He esti- 
mated the refurbishment cost 
at about £7m. 

The debenture would allow 
the company to continue its 
strategy of pursuing moder- 
ately large investment opportu- 
nities. he added. 

An interim dividend of 0.75p, 
against 0.65p, was declared. 


CRH continues strong 
growth with 60% rise 


By Tkn Coone tai Dublin 

Pre-tax profits at CRH 
continued their strong growth 
in Hw BIX mrmtVio to June 30 
advancing GO per cent from 
I£25.1m to I£40Jm (£39.7m) on 
turnover up 12 per cent at 
I£725-Tm, against I£647-3m. 

The Dublin-based construc- 
tion and building materials 
group said an increase in con- 
struction activity in the com- 
pany’s core market in the Irish 
Republic, compared with a 
depressed first half of 1993, had 
contributed to the growth. 

They were farther helped by 
improvements in the UK and 
increased contributions from 
two US associates in the tem- 
pered glass and masonry 
industries. 

Mr Tony Barry, chief execu- 
tive, expected more moderate 
growth in the second half, but 


sa id “we do expect a good 
improvement in the results for 
the year as a whole”. 

There was net interest 
receivable of 12129,000, against 
charges of I£2.77m, reflecting 
the benefits of last year’s 
rights issue and strong «sh 
flow. The period end debfceq- 
trity ratio was 19.6 per cent 

Mr Jack Hayes, managing 
director for finance and devel- 
opment, said that by the end of 
the year the group would have 
I£10Qm in cash for Sf-tirrigj tjnng , 
which could be anfomrofl by 
borrowing up to I£200m. 

Earnings per share rose 37 
per c ent to 9.26p (6.77p), and 
the Interim dividend is raised 
to ISp 027p). 

Dublin analysts anticipate 
fall-year profits of between 
lE U-tan and I£U5m far earnings 


of 25p-27p per share, giving a 
prospective p/e of about is. 


New cars boost Appleyard 


By Peter Pearse 

A healthier market”, 
especially in new cars, helped 
Appleyard, the Yorkshire 
motor dealer, lift pre-tax prof- 
its 61 per cent in the first halt 

The rise from £2.61m to 
SAJm was also underpinned by 
a sharp increase In the operat- 
ing profits contribution to 
£L4m (£545,000) from a 50-50 
olnt venture with Barclays on 
the contract hire side. Group 
turnover rose 42 per emit to 
£25 lm (£177 .2m), Including 
£27m from acquisitions. 

Mr John Atkin, business 


development director, said 
that, excluding acquisitions, 
the group’s sale of new 
vehicles was up 20 per cent, 
against a 14 pm 1 cent rise in the 
national market. The sale of 
used units grew 15 per cent to 

about 10,500. 

In the period, the group 
spent £ifL3m on acquisitions, 
having raised £16.4m in a Sep- 
tember 1993 rights Issue. It 
now has 94 franchises - includ- 
ing five marques new to the 
group - on 62 rites. 

Earnings advanced to 48p 
(3.7p) per share and the 
Interim dividend is 29p &6p). 


Wates City 
drops down 
to £1.3m loss 

By Christopher Pries 

The slow recovery in the 
commercial property market 
continued to exact a toll on 
Wates City of London Proper- 
ties, which yesterday reported 
an interim pre-tax loss of 
£1.3m against a profit of 
£900,000. 

The company attributed part 
of the fen to charging rather 
than capttaUring interest in its 
associated companies, where 
losses increased from £159,000 
to£1.9m. 

Operating profits fin- the six 
months to end June dropped 
51 per cent to £2.79m (£5. 68m). 
Hie loss per share came out at 
l.Olp, compared with earnings 
of0.43p. 

Again, no interim dividend 
was recommended and the 
board said it did not expect to 
pay one for the full year. 

Mr John Nettietou, manag- 
ing director, said the down- 
turn was a result of the com- 
pany’s strategy of selling its 
income producing properties 
in favour of keeping its devel- 
opment interests. 

“We continue to believe that 
there will be a strong upturn 
in the prope rty cycle when our 
policies will be vindicated.” 
He added that several large 
developments would begin 
producing rental Income over 
tiie next 12 months. 


Greene King 
sells Morlaud 
stake 

By Roderick Oram 

Greene King , the East Anglian 
brewer, has sold for £28. 7m Its 
2&8 per cent stake in Moriand, 
toe Thames Valle; brewer It 
failed to acquire in 1992. 

Hoare Govett, toe stockbro- 
ker, bought the 6.23m shares 
for 4G0p a share and placed 
toem with institutions. Greene 
Kin g had paid an average of 
450p a share for them during 
the abortive bid, with the bulk 
c oming from the Whitbread 
investment Company, 

Greene B^ng will book an 
«»Pttonal profit of £606,000 
bofare expenses but it had 
already taken a £2.7m charge 
for the bid costs in its 1992 
results. It will use toe pro- 
ceeds to cut its debt to £66m 
from £95m. Gearing win fall 
10 percentage points to 30 
percent 

Greene Bug was attracted 
oy Norland's pub estate in toe 
Valley. It also hoped 
to clo se Morland’fl Abingdon 
bravery and use the site as a 
jysmbutkm centre for its own 
beers such as Abbott and IPA. 









• co went 



FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 + 

T " COMPANY NEWS: UK 


25 


Housebuilding profits increase fourfold as construction stays tough 

Wimpey recovers to £7.5m 



Joe Dwyer: I mprov e d trading prospects in most businesses 

• COMMENT 

Margins on UK house sales 


By Andrew Taylor, 

Construction Correspondent 

Wimpey, Britain's biggest 
housebuilder, yesterday con- 
firmed that file housebuilding 
revival was still on track as it 
announced a recovery from a 
restated £200,000 loss to a 
£7 -5m pre-tax profit in file first 
SIX mrinthw of Hi la year. 

The company, which is pay- 
ing a maintained interim divi- 
dend of 2p, held out the pros- 
pect of an increase in the 3JJ5p 
final dividend at the end of the 
year when it said it would 
review payments to sharehold- 
ers “in the light of trading 
prospects for 1995”. 

Mr Joe Dwyer, chief execu- 
tive, said these had I mproved 
for most of the group’s busi- 
nesses although wwKttKnnc in 
construction remained very 
tough. 

Earnings per share in the 
first half rose from 0.28p to 
L36p, requiring a transfer from 
reserves of £2£m to meet the 
cost of the ftitarim dividend. 
The company traditionally 
earns the hulk of its profits in 
the second half. 

Wimpey has changed its pol- 
icy and now charges interest 
against discontinued 'busi- 
nesses against current profits 
rather than fneinrfing them in 
provisions. This led to last 
year’s £Llm first half profit 
being restated as a £200,000 
loss. 

Mr Dwyer said that HE 
house sales, after faltering ear- 
lier in the summer, had risen 
by about a quarter in August 
compared with the correspond- 


flM^ Wbn|My ; 


Share prior retofve to'tfe 
•1&nBc.£ftarB price'- - 
fm — : 



trig m o n th last year. 

“This gives us confidence 
that the autumn, the second 
most important selling season 
of the year, will be quite rea- 
sonable," be said. Other house- 
builders have also reported a 
revival in sales in August 

Mr Dwyer said that a lull in 
the market had occurred at the 
same time as the World Cup 
soccer finals. Even so, UK 
house sales since May were 
about 15 per cent higher on 
average compared with the cor- 
responding period last year. 

The group expects UK com- 
pletions for the year to 
increase to B»000 from 6336 in 
1993. 

Housebuilding profits, 
fnrlndrng the US and Austra- 
lia, rose fourfold in the first 
half, f rom to CT fl-Sm, qq 


turnover increased from £19Sm 
to £246m 

Profits from the UK and US 
minerals division fell from 
£4.6m to £100.000 hut this 
masked an improvement of 
mors fhan g*>m as last year’s 
pr nfi fei fndn dpd £8.7m of plan- 
ning fees from tfo» group’s for- 
mer waste business. 

Tie performance of tha min- 
erals division, boosted by price 
anH volume increases in 
the UK, was even more impres- 
sive given that US results were 
depressed by severe winter 
weather, said Mr Dwyer.Con- 
struction profits, had fallen 
from V-S.ftm to <9-Bm_ aHhwig h 
the- bottom may have been 

reached ill Him marirpt 


should reach double figures by 
the «*nd of this year, leaving 
little scope for further improve- 
ment given the company’s 
ftmphagjg cm first time buyers. 
Wimpey should therefore be 
regarded as a construction and 
minerals recovery play, where 
Ta rmac, scores more heavily. 
Wimpey* s strength is in its 
superior balance sheet, where 
gearing is expected to be only 
15 per cent by the year end. 
Profits of £4fim and £68m 
would put the group on pro- 
spective multiples of 17 and 
almost IS, iTidifiating that it 
still has much to do before it 
closes the gap with its rival. 


Tim Bell sheds acquisitions after listing 


By Raymond Snoddy 

Sir Timothy Bell, the public relations 
specialist, h«« started to rid himself of the 
businesses acquired last year in a reverse 
takeover designed to get a Stock 
Exchange fisting fm* Chime Communica- 
tions. 

The company said yesterday that its 


subsidiary The Carpet 'file Company had 
sold its business and certain assets to a 
Sirdar subsidiary for £L.&n. 

At the same time Chime,the holding 
company for Lowe BeD Communications, 
has agreed to acquire Green Moot, a spe- 
cialist consumer public relations com- 
pany, for ei-im in a ml »i iin» of cash and 
shares. It is also selling Vemesta Cubicle 


Systems, winch toi le t partitions. 

In the three nwnthc to June 30 Chime 
made a pre-tax profit of £206,000 on turn- 
over of £&39m. The results include only 
one month’s r e t u rns from Lowe BelL 

Sir Timothy Bell said yesterday that the 
outlook for the rest of the year remained 
encouraging. He aHiM that trading per- 
formance was ahead of last year. 


Depressed 

Europe 

leaves 

Scholl lower 

By David Btackwefl 

Shares in Scholl, the 
healthcare products group, fell 
more than 10 per cent yester- 
day as the co m p an y repented 
lower interim profits and the 
imminent completion of a 
business review. 

Pre-tax profits for the six 
months to June SO fell from 
£11.7m to £9.96m, hit by 
depressed trading in Europe, 
higher spending on promotion 
and Interest payments. The 
shares dosed at 164, off 20. 

Mr Nell Pranchino, chief 
exe c utive , said the group had 
been studying changes to its 
structure for the past 12 
months, but had not fine-tuned 
the costs. Definitive plans 
would be announced within 
three wmiHhi 

There would be strong bene- 
fits from the restructuring in 
the medium term, be said. 
“The changes won’t cost a dra- 
matic amount and will be 
financed internally.” They 
would be aimed at increasing 
efficiency and could involve 
closing some of the 150 shops. 

Total turnover improved 
from £94. lm to SlOO.lm, 
helped by growth in south east 
Asia »«d sales from Septivon 
in France «w»d Japan, 

both acquired last year. 

However, sales in the UK 
and Europe were down by 
£2.7m, and currency move- 
ments cost a further £L6m. In 
the UK, which accounts for 
about 20 per cent of t urn over , 
sales to the trade were 3 per 
cent down following consolida- 
tion of distribution networks. 

Promotional spending 
increased from £&9m to 
in the half, mainly to give the 
two acquisitions a good start 

Interest payable was 
£327,000, compared with previ- 
ous Interest receivable of 
£512,000. 

Earnings per share fell from 
8.2p to 9.8p. Hie interim divi- 
dend is midump d at 2.6p. 


Macro 4 up at £11.2m 
despite subdued trading 


By Paul Taylor 

Macro 4, the systems software 
group whose products run on 

IBM or IBM-compatible main- 
frame and midrange comput- 
ers. managed a 6.8 per cent 
increase in full year pre-tax 
profits despite "subdued" trad- 
ing conditions and lower inter- 
est receipts. 

Pretax profits advanced to 
£IL2m in the year to June 30, 
up from £10-5m the previous 
year on turnover which 
increased fay a modest 4£ per 
Cent fo £24.4m 3m) 

Earnings per share increased 
by 86 per cent to 342p (31J>p) 
and a final dividend of llASp 
(LL48p) is proposed making a 
total of 20p (17.75p) for the 
year. 

Despite the profit improve- 
ment and 12.7 per cent increase 
in frill year dividend the 
shares, which have fallen 
sharply from a high of 723p in 
early February, closed 12p 


lower at 543p reflecting the 
market’s concerns about the 
state of the mainframe soft- 
ware market. 

Mr Terry Kelly, chairman, 
said the group had continued 
to make progress, with turn- 
over and contributions to 
group profit increasing in all 
the group’s established subsid- 
iaries, albeit by small amounts 
in some countries. 

He said the group was con- 
tinuing to invest in its newer 
range of systems software 
designed to run on IBM’s A SI 
400 mid-range computers. This 
“places the group in a sound 
position for future growth”. 

However Mr Kelly acknowl- 
edged that the software market 
was “at a bit of a crossroads” 
with customers uncertain 
about the future role of main- 
frame and mid-range machines 
as the trend towards cli- 
ent/server computing gathers 
pace. 

“1 continue to be cautious 


regarding the coming year's 
prospects against a back- 
ground of continuing change 
within the computer user envi- 
ronment. change which is. 
partly at least, responsible for 
the continued rate of contract 
cancellations within the 
group” he said. 

Nevertheless he predicted 
that the group would remain 
cash generative and produce a 
further modest improvement 
in profits this year. 

Operating profits increased 
by S.l per cent to £9.97 m 
(£9. 22m). Interest earnings 
slipped to £ 1.25m (£1.25m) 
reflecting lower interest rates 
partly offset by interest on a 
delayed tax payment. 

Group cash balances 
increased by £2.69m to £22.4m 
at the end of June although 
both year-end figures benefit- 
led from tax payments which 
were delayed. On a comparable 
basis cash balances Increased 
from £l8*m to £21 .2m. 


Rec buy-backs 
gather momentum 


By Peggy HotQnger 

The rush by regional 
electricity companies to buy 
back their own shares before 
Haling restrictions take effect 
at the pwi of the *nnwth gath- 
ered pace yesterday with pur- 
chases by South Wales Electric 
and South Western Electricity. 

South Wales bought 500,000 
shares, representing 0.5 per 
cent of its equity, for £4.1m at 
a price of 815p per share. 

The company is widely 
expected to follow this first 
purchase with further buying 
before the closed period takes 
effect at the end of the month. 

South Western Electricity 
bought 750,000 shares at 806p, 
brin g in g the total acquired in 
the last week to 42Sm shares, 
or 3.4 per cent of the 


share capitaL 

The recs have the power to 
buy back up to 10 per cent of 
the issued share capital. This 
would enhance both earnings 
and the potential to increase 
dividends. 

“If people are paying any- 
thing more than lip service to 
improving shareholders’ value, 
they ought to buy back the 
maximum allowable,” said one 
industry source. 

However, their opportunities 
are limited by restrictions on 
buying in advance of results or 
prior to any announcement on 
the future of the National Grid, 
in which they are sharehold- 
ers. 

Shares in South Wales 
jumped Sip to 8l5p after the 
announcement. South Western 
shares fell by 7p to 803p. 


Independent 

Newspapers 

expands 

By Raymond Snoddy 

Mr Tony O’Reilly’s 
Independent Newspapers of 
Ireland has expanded its inter- 
national newspaper invest- 
ments by taking a small stake 
in Jomalgeste. 

The publicly quoted Portu- 
guese group accounts for half 
of Portugal’s newspaper sales 
through its two national titles 
Jamal de Notidas and Dlario 
de Notidas. 

The Irish group is taking a 
6.6 per cent stake, which is 
being paid for with new shares 
in Independent Newspapers 
worth IRE 5Jtan. 

Mr Loam Healey, chief execu- 
tive of Independent Newspa- 
pers, said the company had 
made the inve st me n t because 
it believed that the Portuguese 
economy was strengthening. 


V 


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drops dons 
Sts (Umtov 


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Oriel tops 
£2m at 
midway 

Oriel Group, the insurance 
broker, consolidated its return 
to the black in the first quarter 
and reported a pre-tax profit of 
£243m for the six months to 
June 30. 

The outcome was achieved 
on income of £8- 82m and com- 
pared with a deficit of S2&JOOO 
from income of £4.65m in the 
1993 first halt 

E ar nin g s per share came out 
at 5.7p (12p losses) and the 
interi m dividend is maintained 
at 2p. . 

Since the period end Onel 
has completed a £4m rights 
issue. 

Metsec 

Metsec continued the progress 
made over the pest 18 months, 
reporting a pre-tax prqfit of 
£754,000 on turnover of £29.lm 
for the six months to end-June. 

The outcome compared with 
profits of £505,000 on turnover 
of £25JJm in the previous first 
half. After an increased tax 
charge of £377,000 (£122.000) 
naming s per share came out at 
2_44p (2.48p). The interim divi- 
dend is being restored with a 
ip pay-out 

The USM-quoted company, 
which has interests in building 
products electronics and engi- 
neering, said that the higher 
tax charge arose because losses 
from its US operations were 
not allowable against other 
group profits. 

River & Merc Small 

The net asset value per share 
of River & Mercantile Smaller 
Companies Investment Trust 
was 143.6p at July 31, a rise of 
a.6 pet <ynt on the 132 2 p 12 
monthB earlier. 

Net revenue for the year to 
the end of July was £L03m 
(£l .fpm) for earnings per share 

of 4.11P (4.07p). , 

The proposed final amaem 
is 2A87Sp (2.75p) for a total of 
4J375p (4p). 

TR Euro Growth 

TR European Growth Tru st 

achieved a 45 per cent increase 

in net asset value per share 
from 117.64P to 170.9&P over the 
Smooths to June 30. The folly 
diluted figure rose 42 per cent 
from 11R13P to 164.62P. 

For the year to the “ri of 
June net revenue fell from 
£L01m to S985JXJ0 for eannflgs 

share of 2-48p.(Z.6lp).Dira> 

tors propose maintaini ng the 
^gle Wdivddend at L7p. 

Estates & General 
Estates & General, the prop- 
erty developer and investor, 
reported reduced pre-tax loss* 
rfSmOOO far the sis mrafths 
to June 30, against a defiat of 


NEWS DIGEST 


£1.53m in the comparable 
period of 1993. 

The Improvement was 
achieved on turnover down 
from £5.01m to £4JK3m and was 
principally the result of a 
reduction in the interest 
charge from £4-66m to SSSTm. 

Mr Peter Prowting, chair- 
man, said that debt had been 
reduced by a selective disposal 
programme. 

Losses per share emerged at 
454p (7J6pX 

Burn field 

Burnfield, the international- 
controls and measurement 
equipment group, staged a 
recovery to profits of £L54m 
from turnover of £19.7m in the 
half year to July l, after incur- 
ring losses’ of £493,000 in the 
second half of 1993. 

The result for the .latest 
period, which included an 
exceptional operating gain of 
£253400 from the settlement of 
a customer dispute at Isopad, 
compared with a profit of 
£L27m on turnover of £l&4m 
in the 1993 first half. 

After a reduced tax charge of 
£461,000 (£525,000) earnings per 
share worked through at Kip 
(2_2p). The interim dividend, 
however, is cut to lp (L65pX 

USDC Inv Trust 

The net asset value per share 
of USDC Investment Trust ML 
25 per cent from 281.5p to 
274.4p in the six months to 
June 30. This compares with a 
fall of 13 per cent in the FT- 
SE-A All-Share Index. 

Net revenue for the half year 
to the end of June was £931,000 
(£685,000) for earnings per 
share of 2.54p (l-87p). The 
i nteri m dividend is unchanged 
at L25p. 

British Dredging 

British Dredging, the bufidera 
merchant, reported pre-tax 
profits 16 per cent higher at 
£856,000 for the six months to 
the end of June, against 
£739,000. Turnover improved 
from £17.3m to £18.7m, an 
increase of 8 per cent 

Earnings per share came out 
at 5L28p (2£2p) and the interim 
dividend is tendtanged at 26p. 

WSP 

Pre-tax profits at WSP Group, 
the consulting engineering 
company, were up 95 per cent 
from £279,000 to £545,000 in the 
six months to June 30, on turn- 
over doubled to EHUbn, against 
csitn. 

Announcing the first interim 
results since its merger with 
ABConsuitancy last October, 
Mr Peter Welch, chairman, 
said the company’s order book 
was at its- highest since 1990 
and that he was “encouraged 
that the commercial and retail 
sectors are showing sigj» of 
recovery". 

The interim dividend rises 11 
per emit to lp (&9p). Earnings 
per share remained l_9p. 


Gaskell 

Gaskell, the carpet manufac- 
turing group, aTiTMWTTirpd a fall 
in pre-tax profits for the six 
months to July l, down from 
E393JJ00 to £24000. ’ 

However, turnover was 
ahead at £18Am (OA3m), and 
the company described its 
fortunes as improving; the 
1993 interim pre-tax figure 
was struck after an excep- 
tional payment of £913.000 
for assets destroyed by fire 
CniD- 

The interim dividend is 
maintained at l-5p. Earnings 
came out at 0.2p (5.2p), or 
0-2p against losses of 13.6p 
excluding the exceptional pay- 
ment 

Kingspan 

Improved trading margins 
enabled Kingspan Group, the 
Irish Republic-based building 
products group, to repot pre- 
tax profits for the six months 
to June 30 ahead by 57 per cent 
to I£2J)5m (£2. 03m), compared 
with I£1.3m. 

Turnover improved from 
I£29m to I£30.4m. Earnings 
per share came out at 6.44p 
(3.88p) and the interim divi- 
dend is being raised to L2p 
dP)- 

Strong & Fisher 

Strong & Fisher (Holdings), the 
sheepskin processing company, 
saw pre-tax profits creep up 
from £L72m to £L75m in the 
six months to June 30. Turn- 
over rose 10 per cent from 
£48. lm to £53. lm. 

Earnings per share fell to 
<L6p (0.59P). 

The company is 87.89 per 
cent owned by HUlsdown Hold- 
ings. 

Robinson Brothers 

Robinson Brothers (Ryders 
Green), the 'unquoted West 
Bromwich-based chemicals 
group, reported pre-tax profits 
down by 24 per emit to £L45m 
in the first half of 1994 com- 
pared with £L9m. 

Turnover was static at £14m. 
The company that trading 
continued tq be adequate. 
Earnings per £1 share were Kip 
(74p). 

Macfarlane 

Marfariaiw Group (Clansman), 
the Glasgow-based packaging 
group, has spent £ 7.75m of its 
£20m cash pile on Wicklow 
Custom Packaging of Ireland. 

TfcymH tti Waii rtfl w n iT i niintlrgn. 

nedy, W CP makes injection 
moulded plastic products for 
the pharmacfflitical, electronic, 
food, drink and toy industries. 
In the six months to June 30, it 
made pre-tax profits of 255&000 
and, at that date, bad net 
assets of £L87m. 

At the gamp time, but under 
a separate agreement, the ven- 
dors have subscribed for lm. 
new ordinary Mac f a rlan e 
shares at 25^> apiece. 



BUILDING PRODUCTS 




INTERIM RESULTS 


. . All our core businesses produced better returns 

than in the first half of 1993 with operating profits up 

by a healthy 20% from £40.6m to £48. 7m. This was 
the result of benefits from our internal programme of 
cost reduction and investment, combined with a 
broadly based improvement in trading conditions. 
Taken together with our confidence for the future the 

Board has increased the interim dividend from 4.2p 

per share to 4.4p per share." 

Sir Eric Ponntain, Chairman 


HALF YEAR TO 30 JUNE 1994 



























DRINKS DISPENSE 



FLUID POWER 


SPECIAL ENGINEERING 




IMI pic, PO Box 216, Bi rmingham B6 7BA. Telephone: 021 356 4848 


•i 


i 





26 


FINANCIAL TIMES 


V 



WEDNESDAY SEPTEMBER 7 1994 


COMPANY NEWS: UK 


Manweb cuts workforce 
by 11% to save £20m 


By Peggy Hontnger 

Manweb is cutting 500 jobs, 11 
per cent of its workforce, in a 
move expected to save the 
Cheshire-based electricity dis- 
tributor and supplier up to 
£2Qm a year by 1997. 

The group is the second in 
the sector to respond to the 
regulator’s recent price review 
with job cuts and a wide-rang- 
ing restructuring. 

Norweb announced just two 
weeks ago that it would shed 
1,200 jobs over five years. Most 
of the regional electricity com- 
panies are expected to 
announce similar action to cut 
costs over the coming weeks. 

Manweb said it would shed 
the jobs over three years with 
400 coming from a fundamen- 
tal restructuring of the elec- 
tricity distribution business 
into three centralised divi- 
sions. The remaining losses 
would result from efficiency 
savings. 


Mr John Roberts, chief exec- 
utive, said the restructuring 
was not simply a knee-jerk 
reaction to the price review, 
which was widely perceived to 
have hit Manweb harder than 
some of the other regional elec- 
tricity companies. 

“It is the next logical stage 
in the development of our 
strategy,” he said. The first 
stage had been to cut costs 
afterprivatlsatlan and the sec- 
ond was to improve the qual- 
ity. This, the third stage, was 
about holding the improved 
quality and cutting costs yet 
farther. 

Analysts welcomed the cost 
cuts, which were largely as 
expected, with some reserva- 
tions. “The regulator said they 
were a high-cost producer, so 
they have gat to take costs 
out," said one. “But even after 
♦hia they will still be among 
the highest cost producers." 

Mr Roberts said Manweb 
would continue to seek savings 


through innovation and 
restructuring. Although cost 
cutting would get more diffi- 
cult over time, Manweb had no 
intention of developing an 
alternate earnings stream by 
diversify Lug into nan-regulated 
businesses. 

He was confident Manweb 
would be able to continue 
delivering dividend growth 
above the sector average for 
some time. Analysts speculated 
that Manweb could deliver 
growth of up to 9 per cent 
above inflation, and still retain 
cover of about two times by 
2000 . 

The shares moved ahead by 
2.4 per cent to 85ip in a rela- 
tively flat sector. 

Manweb is expected to take 
exceptional charges of about 
£30m this year, of which two- 
thirds will be the result of job 
losses and restructuring. The 
balance will cover the costs of 
the government defat buy-back 
completed in July. 


£24m investment for Croda 


By Tim Burt 

Croda International, the 
chemicals and coatings group, 
yesterday announced plans to 
invest £24m to exploit rising 
demand for its speciality 
chemicals. 

Buoyant chemical sales 
underpinned a 5 per cent 
Increase in first half pre-tax 
profits from £l8.5m to £19 .5m, 
and contributed to increased 
turnover of £2l0m (£191m) in 
the six months to June 30. 

Underlying profits rose by 
12.7 per cent after stripping 
out last year's £L2m pension 
credit, but the group admitted 
it had been hit by capacity 
constraints at some plants. 

In a bid to overcome those 
problems, it plans to spend 
£15m on new facilities at its 
UK plants and invest sizeable 
s iims on developing its Penn- 
sylvania factory in the US. 

Shares in the group, how- 
ever, fell 9p to 377p yesterday 
after the group said its strong 
chemicals performance had 
been doited by losses in its 
cosmetics and toiletries busi- 
ness and heavy environmental 
costs in the coatings division. 


“The cosmetics business has 
done badly and taken the 
shine off the results," said Mr 
MidiflBl Valentine, rjmb-man. 

The division, which manu- 
factures products such as lip- 
stick and nail varnish, 
reported trading lasses of 
£500,000 - a £lm drop on last 
year’s profit 

Coatings, meanwhile, 
reported reduced profits of 
£1.9m (£2. 4m) following the 
disposal last year of most at 
its printing ink business and 
rising environmental costs in 
the US. 

The two divisions were, 
however, overshadowed by 
progress in file chemicals busi- 
ness, which saw trading prof- 
its rise from £18.7m to £2 L€dl 

Hr Valentine said the 
improvement reflected rising 
demand for personal care 
ingredients and the group’s 
success in overcoming higher 
raw material prices. 

The £24m investment pro- 
pamine is expected to 
increase the dominance of the 
chemicals business, and the 
group said it would sell US 
inks operations and the cos- 
metics business “at the 


right price”. 

Earnings per share rose 
from 9.4p to 9-9p, and the 
Interim dividend is 3.1p 
CUBMl 

• COMMENT 

If Croda can resolve its capac- 
ity constraints rapidly, it 
should be set fair for same 
time to come. The chemicals 
business, relying mostly on 
natural ingredients, has 
weathered raw material price 
increases related to flooding 
last year. With the cost at its 
ingredients set to fall, it 
should be able to push up its 
margins in a buoyant market 
With volume sales at the high- 
est level since 1974, however, 
the picture should be rosier 
than it is. Barfs of the coatings 
division and the entire cosmet- 
ics business are up far sale, 
bnt finding buyers has not 
proved easy. Their weak pros- 
pects are expecte d to hold fall 
year profits at £42m and the 
shares - an a forward multiple 
of 18 - look pricey. Bnt they 
remain below the chemical 
sector average and are proba- 
bly worth holding on to for 
existing investors. 


Success through an innovative approach 

SPL has carved itself a niche in the satellite comtnunications business, reports Alan Cane 





Growth from 
tec h nolog y 


Hi g h qrir yjs anH 

hurricanes test 
satellite com- 
munications to 
the limit. Four 
years ago, 
winds gusttog 
to 70 mpfa and 
more raked a 
north Ameri- 
can ground sta- 
tion owned by Telegiobe, Cana- 
da’s overseas telecommunica- 
tions utility. 

Two of the three 100ft dish 
antennae had to be lashed 
down for safety. The third fea- 
tured controls buflt by Signal 
Processors, a small UK tech- 
nology company. Blown about 
so badly that the dish was 
farced onto its brake stops, the 
system nevertheless returned 
the antenna to the right track 
and data flow from the satellite 
continued iifiinte i-ni pted 

Mr Robin Smith-SaviHe, co- 
founder and dhai rman of Sig- 
nal Processors, tells this story 
with relish as an example of 
European success hi an indus- 
try domina ted by large US cor- 
porations. 

Based on the Cambridge sci- 
ence park, the company is in 
two principal businesses: 
ground station antemma con- 
trollers - electronics which 

ensure thw antenna jj) pninHng 

at the satellite - and satellite 
data modems. Both are key to 
the satellite n wmrinTiInaHning 
business. Modems are the elec- 
tronic black boxes which trans- 
late analogue data ri gnalc info 
digital form and vice-versa. 
Comstream at San Diego is (me 
of the biggest players in this 
market; SPL reckons to be the 
largest European satellite 
mndgm manufacturer. 


ARGENT, the property concern 
floated on stock market in 
June, has purchased 28 acres of 
Thames Valley Park, Reading, 
for £17.4m, from Oracle, US 
computer group Argent imme- 
diately sold seven acres to Brit- 
ish Gas for Emm. 
BROMSGROVE INDUSTRIES 
has acquired Mwfip, mamifats 
turer of autoclaves and steril- 
iser units for medical applica- 
tions, fo r up to £5 _93m cash. 
BWD SECURITIES has agreed 
to acquire Freshquest for an 
initial consideration of 190.000 
shares. Farther consideration 
may be payable up to a maxi- 


PrivateLy held, the company 
w01 turn over about $3 .5m 
(S2L25m) this year, 35 per cent 
up on last year. Mr Geoffrey 
Walker, finan ce director, 
expects a farther 30 per cent 
growth next year. 

SPL was founded in 1382 as a 
spinout from Cambridge Con- 
sultants by Mr Stmth-SaviHe, 
Mr Martin Smith, now techni- 
cal director, and Ur Roscoe 
Turner, production director. It 
has been profitable for 10 of its 
12 years' trading, albeit at a 
low level. Its growth has been 
steady. If unexciting. Mr 
SmithrSavifle blames chiefly 
the dollar p*rhsrng r» rate. The 
recession in Europe has not 
helped. 

It numbers among Its cus- 
tomers AT&T, British Telecom- 
munications, the European 
Space Agency, and both the US 
and UK defence departments. 
In 1993, for example, it man- 
aged a $L5m project for AT&T 
involving the retrofitting of 
five and tWO Urn rfish ps 
with its controllers. 

NOW the finnnpany j£ looking 
ahead to the burgeoning data 
broadcasting marinaf — custom- 
ers in this field facindp finan- 
cial dealers who want informa- 
tion gathered across the world 

nn thdr doclrg 

If there are growth opportu- 
nities g’h«md l there is no l*cir of 
competition. In its core anten- 
nae control business, SPL feces 
stiffening opposition from 
large US manufacturers like 
Comsat-RSI, which are begin- 
ning to offer antenna and con- 
troller as an integrated pack- 
age. This presents SPL with a 
marketing problem. It supplies 
its co n troll e r as a plug-in unit 
about the size of a large suit- 


mrrm of £329,800 firnidifininal an 

future level of income. Any 
further consideration will be 
satisfied by shams. 

COURT CAVENDISH Group 
has acquired a newly-refur- 
bished and registered nursing 
home located in Ipswich, Bur- 
lington Nursing Home, with 40 
beds. The purchase price was 
£775,000 with a further £270,000 
on upgr ading . 

ENV2ROMED confirms it is 
cansideraing an acquisition in 
the dental and oral products 
market in the region of £ 7.5m. 
EUROMONEY PUBLICA- 
TIONS, through its Petroleum 



BnrttaCor 

Geoffrey Walker (left) and Robin Smith-Saville: looking ahead to 
the burgeoning data broadcasting market 


case, but it does not manufac- 
ture dishes or the motors 
which move them. 

It points, however, to its 
record of innov ation. It pio- 
neered antennae controls 
which track satellites through 
space by modelling their orbit 
mathematically. American 
competitors are now beginning 
to use the same technique: 
“But we have 14 years of soft- 


NEWS IN BRIEF 


Economist subsidiary, is to 
acquire Petroleum Outlook, an 
oil and gas monthly wia gaginft, 
from J ohn S Handd. The initial 
payment is $150,000 (£96,000) 
with the maximum consider- 
ation capped at $L15m. 
GROSVENOR PROPERTY 
Investments has sold freehold 
i nt erest in the Arndale Shop- 
ping Centre, Mozecombe, for 
£12m. The 113,000 sq ft covered 
shopping centre is let at a total 
rent of some £Um per annum. 
JOHNSTON GROUP has sold 
Smitham Garage to Harwoods 
of Sussex of about cim cash. 
Proceeds of the sale will be 


ware development behind os,“ 
Mr Smilh-Saville says. 

SPL was the first to develop 
a low-cost method of correcting 
the errors which inevitably 
creep into satellite transmis- 
sions; now it has developed a 
printed circuit board which 
slips inside a conventional per- 
sonal computer turning it, 
when an antenna is added, into 
a satellite data receiver. 


used to reduce gearing. 
HDLLSDOWN HOLDINGS has 
bought Mateme Fruibourg, 
France’s second largest jam 
and fruit comptte maker, from 
Groups Danone. The acquisi- 
tion is not material to Hffls- 
do wn’s net assets. 

LOPEX has sold its 40 per cent 
holding in Guitig & Hofflneis- 
ter Alliance, an advertising 
agency based in Frankfurt, to 
the remaining sharphnldgr for 
a nominal sum. G&H incurred 
a loss of EL4JJ00 in the first half 
of the current year. 

PHOENIX TIMBER GROUP 
has acquired Barlow Pugh & 


SPL’s catalogue is a combi- 
nation of “me-flrst” products 
and “me-cheapest”. It has 
developed an antenna control 
system for the important 
VSAT (very small aperture ter- 
minal) market, which is being 
used increasingly to provide 
two-way communications ser- 
vices to businesses in the US 
and Europe. The SPL system 
costs $5,000 while providing 
the ftifijiiHea found in $25,000 
systems. 

Mr Smith-Saville does not 
believe the company will have 
to find new money to fund 
what he sees as its expected 
growth and exploitation of the 
data broadcas ti ng market 

He is trying to balance 
equity, overdraft and medium 
term loans. Initial funds of 
£75,000 were boosted in 1988 by 
a business development loan 
from NatWest of £250,000 
which will be repaid next 
month. A second loan of the 
samp amount was drawn ear- 
lier this' year. 

In 1989 MTL a venture capi- 
tal fund, bought 33 per cent of 
the equity for £400,000. The 
investment has a fixed fife ami 
It is now time for MTI to exit 
and dose the fond. 

Mr Smith-Saville says he is 
open minded about the fixture. 
It is entirely possible that MTI 
could reinvest in the company; 
going public is another option. 

He favours, however, the 
replacement of MIT by a new 
investor who could help to 
improve SPL’s access to the 
satellite communications 
marketplace. It would not nec- 
essarily be a UK company. 
Previous articles in this series 
appeared an August 10, IS, 19 
and 25. 


Associates for £310,000 cash. 
BPA, a property preservation 
specialist, made pre-tax profits 
of £48jQ00 in the nine months 
to May 31, at which date it had 
a net asset value at £107,561. 
SAFKLAND has purchased a 
retail investment property 
from Kempstane for £810,000 
rash. 

SURREY GROUP is to acquire 
two licensed betting offices in 
East Anglia from TS James 
Leisure for £383,000. The pur- 
chase is to be satisfied by the 
issue of I2£m shares at 1.25p 
apiece with the balance of 
£225,512 paid to cash. 


TENDER NOTICE 

UK GOVERNMENT 
ECU TREASURY BILLS 

For tender on 13 September 1994 

1. The Bank of 
Majesty's 
Government 

bid-yield basts on Tuesday, 13 September 1994. An 
additional ECU 50 mffllon nominal of Bills will be allotted 
directly to the Bank of England for the account of the 
Exchange Equalization Account 

2. The ECU 1,000 mfffion of Bills to be issued by tender 
wffl be dated 15 September 1994 and wflj be in the 
following maturities: 

ECU 200 mutton for maturity on 13 October 1994 
ECU 500 mUUon for maturity on 15 December 1994 
ECU 300 mUUon lor maturity on 16 March 1995 

3. AH tenders must be made on the 
forms available on request from the Bank of 



Completed application forms must be lodged, by 
at the Bank of England, Securities Office, Threadneede 
Street, London not later than 10.30 am., London tone, 
on Tuesday, 13 September 1994. Payment for Bins 
allotted wtH be due on Thursday, 15 September 1994. 

4. Each tender at each yield for each maturity must be 
made on a separate application form for a minimum of 
ECU 500,000 nominal. Tenders above this minimum 
must be In multiples of ECU 100,000 nominal. 

5. Tenders must be made on a yield basis (calculated 
on the basis of the actual number of days to maturity 
and a year of 360 days) rounded to two decimal places. 
Each apptication form must state the maturity date of the 
BQls (or which application is made, the yield bid and the 
amount tendered for. 

6. Notification will be despatched on the day of the 


Eurocfear or CEDEL, BUIS win be credited In the relevant 
systems against payment For applicants who have 
requested definitive Bills, Bffls wtil be available for 
collection at the Securities Office of the Bank of England 
after ISO pjn. on Thursday, 15 September 1994 
provided cleared funds have been credited to the Bank 
of England's ECU Treasury Bills Account No. 59005516 
with Lloyds Bank Pic, International Banking Division, PO 
Box 19. Hays Lam House, 1 Hays Lane, London SE1 
2HA. Definitive Bias will be available In amounts of 
ECU 10,000, ECU 50,000, ECU 100,000, ECU 500,000, 
ECU 1,000,000, ECU 5,000,000 and ECU 10,000,000 
nominal. 

7. Her Majesty's Treasury reserve the right to reject any 
or part of any tender. 

8. The arrangements for the tender are set out In more 
detail In the Information Memorandum on the UK 
Government ECU Treasury Bill programme Issued by 
the Bank of England on benalf of Her Majesty's Treasury 
on 28 March 1989, and In supplements to the 
Information Memorandum. All tenders wffl be subject to 
the provisions of tint Information Memorandum (as 


9. The ECU 50 mlffion of Bills to be allotted directly to 
the Bank of England for the account of the Exchange 
Equalization Account will be for maturity on 16 March 
1995. These Bids may be made available through sale 
and repurchase transactions to (he market makers listed 
in the Information Memorandum (as supplemented) In 
order to facUHate settlement 

Copies of the Information Memorandum (and 
aments to it) may be obtained at the Bank of 
' UK Government ECU Treasury BiHs are Issued 
under the Treasury Bills Act 1877, the National Loans 
Act 1968 and the Treasury Blits Regulations 1968 as 
amended. 

Bank of England 
6 September 1994 


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NI PPON MEAT 
PACKERS, INC. 


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WORLD MOBILE 
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17 & 18 October 1994 - London 

Mobile communications is taking centre stage in the worldwide expansion of 
telecommunications and this conference brings together an international panel 
of speakers to share their views on the current state of play and the trends that will 
shape the industry in the future. 

ISSUES INCLUDE: 

• EC Green Paper on mobile communications 

• US cellular industry 

• Cellular telephones in a consumer market 

• New operator strategies 

• Role of independent service providers 


SPEAKERS INCLUDE: 

• Dr Herbert Ungerer 

Head of the Regulatory Department 
European Commission 

• Ms Pauline Creasey 
Group Director 

Hutchison Telecommunications (UK) Ltd 

• Mr Charles Wigoder 
Managing Director 

The Peoples Phone Company Pic 


• Mr Barry A Kaplan 
Vice President 
Goldman Sachs & Co 

• Mr W- Rudiger Struck 
Managing Director 
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• Dr Joachim Dreyer 
Chairman of the Board 
Debitel Kommunikationstechnik 

FINANCIAL TIMES CONFERENCES 

in association with FT NEWSLETTER MOBILE COMMUNICATIONS 

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FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 




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FINANCIAL TIMES SURVEY 


ENTERPRISE IN WALES 


Though the optimism is tinged 
with caution, signs from the Welsh 
economy are encouraging, writes 

Roland Adburgham 

A portent of 
recovery 


When work on the 
long-delayed £l50m barrage 
across Cardiff Bay finally 
started earlier tht« year, it 
could be seen as a portent that 
the long-heralded recovery was 
at last under way In Wales. 

Although the business 
community is careful to tinge 
optimism with caution, there 
has been a string of 
encouraging signs. That 
op timism , acco rding to surveys 
by the Confederation of British 
Industry, has risen in the 
principality for seven 
successive quarters. An 
analysis published last month 
by the CB1 and the . 
consultancy Business Strat- 
egies found that mamzCactnrers 
had higher 
expectations 
for orders and 
output than in 
any other 
region. 

“Wales has 
weathered the 
recession quite well and better 
than some people might have 
expected,” says Dr Elizabeth 
Haywood, director of CB1 
Wales. And Mr Robert Ellis, 
senior partner in south Wales 
of Touche Ross, the 
accountancy firm, comments: 
“Confidence is moving slowly 
in the right direction." 

A recent Touche Ross/ 
Western Mail survey of busi- 
ness opinion found a third of 
companies expected to employ 
more people In six months* 
time and only one in 10 fewer. 
While 700 redundancies 
announced last month at 
Swansea’s Driver and Vehicle 
Licensing Centre show that big. 
employers are still shedding 
Jobs, the unemployment rate 
was down to 06 per cent in • 
July (compared with the UK 
average of 08 per cent). 

There are other signs of a 
pick-up in activity. Mr Jobs. 
Mitchell, chief executive of - 
Principality Building Society, - 
says the “feel good" factor has 
increased in recent months. 
"This year our mortgage lend- 
ing will break all previous 
records.” ha July, Cardiff -Wales 
airport handled a record 
144,000 passengers, a rise for 
the 16th consecutive month. 
Lending by the Bank of Wales 
to manufacturers has 
increased by nearly SO per cent 
over the last 12 mo nths . 

Mr Paul Guy, chief executive 
of TBI, the Cardiff-based prop- 
erty group which became a 
quoted company this year, 
believes business has much 
improved. But he warns: “The 
market won't help you out in 
the 1990s like in the 1980s. To 
be a success, you have to prove 
you have a better management 
team in place.” 

The more positive picture 
cannot disguise the fact that 
Wales still lags an a range of 
meas ures. The country is seen 
as having the potential to 
become one of Europe’s most 
prosperous regions. First, it 
has to catch up with other 
parts of Britain. Gross amnes- 
tic product per head was only 
86.1 per cent of the UK average 
In 1992; remarkably, in view of 
the restructuring which has 
taken place, the gap is just 0.3 
per cent narrower than a 
decade earlier. Income per 
head in 1992 was lower than in 
any other UK region. 

The corollary is that Wales 
would be much worse placed 
had it not moved from 
dependency on coal and steel 
to a broader-based economy. 
While service industries such 
as tourism are crucial (and 
agriculture still employs 65,000 
people). the revitalised 
manufacturing base helped tne 
country through the recession. 
Steel remains a large employer 
but, as Dr Haywood says: 
“There is now a very diverse 
range of industries from 
biotechnology to textiles.” 

Having managed this 

change, Wales needs a further 
transition: to foster an enter- 
prise culture in which small 
and medium-sized businesses 
flourish. There ere indications 
that this can happen. Selr- 
amptoyment has risen by more 
STS since lffrajto is 
per cent of the workforce. 
Companies employing fewer 
than 100 people account for 
over 90 per cent of manufactur- 
ers. But entrepreneurs are a 
rare breed ai^as 
many Eamily-owned firms are 

content to stay the same rise. 

As a catalyst, a Land of 

Enterprise camj»tem 
launched this year m ttowato 
of the Wales 2010 report for the 
StfSnte Welsh Aten* A 
central objective is to raise 


Wednesday September 7 1994 



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^dvic ati pnai ar»i training stan- 
dards. While results are 
improving, It is significant 
that, even at this stage of the 
recovery, skills shortages are 
starting to emerge. “Excellence 
in education and training are 
essential, to Wales’ success in 
the next century,” Mr John 
Redwood, the Welsh Secretary, 
said last month. “We win earn 
our living more by our brains 
than our brawn, more by our 
own enterprise than by the 
works of government." 

One work of government 




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of local authorities, with 
shadow elections next May to 
the unitary councils which will 
replace the existing two- tier 
stmcture . 
While there is 
support in the- 
ory, there is 
less enthusi- 
asm in practice 
- one council 
i*wrf executive 
describes it as “an absolute 
mess.” Mr Mfahani Bees, direc- 
tor in charge in Cardiff of I 
Chesterton, the property con- 
sultancy, is among those criti- 
cal of the decision to have sep- 
arate authorities for the capital 
and Vale of Glamorgan. “The 
ability to deliver Cardiff as a 
major European capital will 
not be achieved without the 
fo rmatio n of a greater Cardiff." 

The reforms have reinforced 
pressure for an all-Wales 
assembly, to which the Labour 
party is committed. With Con- 
servatives holding only six of 
the 38 pa rliament ary seats, an 
assembly is advocated as a 
democratic corrective, espe- 
cially in view of the growth of 
non-elected public bodies, or 
quangos. The Council of Welsh 
Districts estimates there are 
nearly 350 quangos in Wales, 
controlling a fifth of public 
e xp e n d it ure. 

The most prominent is the 
Welsh Development Agency. 
Publicly flayed for past prac- 
tices, the WDA retains much 
support within the business 
community. It Ib ad mir ed for 
its wooing of foreign investors, 
land reclamation and fostering 
of partnerships in urban 
renewal - the decrepit state of 
many Welsh towns is at last 
being tackled. In mid-Wales, 
business people this year also 
sprang to the defence of the 

Development Board for Rural 
Wales when its future was 
threatened. 

The DBRW has survived, 
although Mr David Rowe- 
Beddoe, the WDA c ha irm a n, 
has also became its chairman 
to improve co-ordination. 
Meanwhile, he has revamped 
the WDA’s management and 
decentralised the agency's 
structure. The aim Is to 
improve co-operation with < 
councils find give more support i 
to indigenous businesses. 
“Small and medium-sized 
enterprises are our greatest 
potential strength for the 
future," be has said. 

Recognition that there 
should be more emphasis on 
these businesses is echoed by 
the Welsh Office. One reason is 
that inward investment, while 
remaining important, is not a 
iwnaww- Successes continue - 
notably by Cardiff Bay in 
winning a Japanese and 
German £20fen joint venture - 
and foreign companies are 
investing in their existing 
Welsh plants. But parts of 
Wales lost competitive 
advantage in the government's 
review last year of assisted 
areas. 

Mr Rees of Chesterton warns 
that Wales feces a difficult 
task in trying to keep up its 
inward investment record. He 
says: “Moves out of London are 
slowing down because of the 
abundance ctf special offers and 
rent-free accommodation in the 
south-east The differentials 
between Wales and the south- 
east are narrowing, particu- 
larly whan taking into account 
the Severn crossing tolls.” 

As the recovery gathers 
pace, the need for the second 
Severn bridge, now under con- 
struction, will become even 
more apparent in combating 
the peripheral view of Wales in 
Europe. Despite other improve- 
ments such as the imminent 
completion of the M4 near 
Swansea, and the dualling of 
the A55 in north Wales, weak- 
nesses in the road, air and rati 
network remain. By the time 
the new bridge opens in 1996, 
Welsh enterprises will have 
discovered to what extent 
these weaknesses are further 
exposed by the Channel tun- 
nel 


Cardiff Bay: work on (fn barrage (s wider way and a new business centre to developing 




I _ . •• •* 

■ J d MW ' 20 

*•0 Km 35.’ :* 1 • 

-. 2 * m'm L*L. M . W- . „ . . • .If. — 



Bristol Channel 


TWO GIANTS 





These days the Welsh Dragon is a real high flyer since two but also the right people from Wales' skilled and flexible workforce, 
international giants of the aero engineering industry chose Wales. The WDA has also assisted in the development of a local 

British Airways has Its new engineering base at Cardiff supplier infrastructure to ensure vital components are always at hand 
Airport and recently General Electric (USA) has moved to nearby To get your business off the ground, put the WiLsh Advantage 
Nantgarw, where they service aircraft engines for famous names to your advantage. 

like CFMI, Rolls Royce and Pratt & Whitney. Call the team at the \Xfclsh Development Agency on +44 222 

With more than a little help from the Welsh Development 666862, or write to. Welsh Development Agency, Pearl House, 
Agency, both companies were not merely able to find the right site, Grcyfriars Road, Cardiff CF 1 3XX. 

ONE DRAGON. 



i THE WELSH ADVANTAGE. 








28 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1094 


INTERPRISE IN WALES II 


T be concrete blocks of 
Trawsfynydd nuclear 
power station in Gwy- 
nedd are in gaunt contrast to 
the surrounding beauty of 
Snowdonia national park. Its 
closure, ann ounced in July last 

year, bas threatened an 
equally gaunt future for its 
workforce, and for local young 
people who have lost a poten- 
tial place to work. 

Wales has had to come to 
terms with the rundown in its 
traditional industries. In Gwy- 
nedd, for example, over 15,000 
people used to be employed in 
slate quarries; today there are 
only 300. It is ironic that as 
recent an industry as nuclear 
electricity should create simi- 
lar difficulties. The power sta- 
tion was the largest local 
employer, with 600 staff at its 
peak, but by 1997 only 50 will 
remain for site security. 

Like the heavy industries, 
Trawsfynydd will leave a leg- 
acy for generations - Nuclear 
Electric is expected shortly to 
announce its decommissioning 
strategy. While there will not 
be the need, as in south Wales, 
to repair land dereliction, what 
has to be ensured is that 
incoming industries do not 
damage Gwynedd's spectacular 
environment Few nowadays 
would expect a power station 
to be built in a national park. 

A strategy for regeneration 
has been devised by South 
Gwynedd Partnership, which 
includes the county and dis- 
trict councils and development 
agencies. The region qualifies 
for European structural funds 
and has assisted area status; 
the partnership is also bidding 



Swansea Marina - once a coal export dock - now conbAis retail outlets and a maritime museian riw*r#*m*nrti 

■ NEW INDUSTRIAL SITES 

A non-nuclear park 


for an enterprise zone and 
funding under the Welsh 
Office's strategic development 
scheme. 

The Development Board for 
Rural Wales, one of the part- 
ners, is creating a landscaped 
29-acre Snowdonia business 
park and. making a virtue out 
of necessity, says the power 
station closure provides “a 
major opportunity for employ- 
ers seeking reliable and 
responsible staff”. 

There are different chal- 
lenges in the northern part of 
Gwynedd, where the dualling 
of Uie A55 road has improved 
the link with the M56 and Man- 
chester airport. The Welsh 
Office is giving strategic prior- 


ity to extending the A55 across 
Anglesey to Holyhead, with its 
ferry services to Ireland. 

Taking advantage of the 
improved route are two new 
business parks near Bangor 
established by the Welsh 
Development Agency. Glyn 
Rhonwy, with 135 acres at the 
foot of Snowdon, has attracted 
the American company Euro/ 
DPC, which makes medical 
diagnostic kits. Fare Menai, 
with 75 wooded acres, is 
described by National West- 
minster Bank, which hag a 
business centre there, as hav- 
ing “excellent ra mmirnirei firms 
and a superb setting." 

On Parc Menai is Snowdonia 
Business innovation Centre, 


which provides advice and sup- 
port for the commercial devel- 
opment of new products and 
technology. One current proj- 
ect is to develop a commercial 
kiln for converting slate Into 
lightweight aggregate. Dr Tom 
Parry Jones, Inventor of the 
breathalyser, is chairman of 
the centre, which is a member 
of the European network of 
over 100 Bics. 

Also based at Parc Menai is 
Mr Hugh Edwin, the county 
council's media development 
officer, a post which reflects a 
thriving film industry in 
north-west Wales. His office 
can access the British Film 
Commission’s national data- 
base for finding locations. Sean 


rage, across the river Tawe, 
and has developed a maritime 
quarter around a 600-berth 
marina. To promote the com- 
mercial possibilities, the city 
hosted presentations Including 
one at London's Ritz HoteL 
“If you do things to lift your 
profile, you get the City of Lon- 
don saying, ‘What's going on 
there'?” says Mr Michael 
Bums, economic development 
officer at Swansea Centre for 
Trade & Industry. 

The city will come into fur- 
ther prominence next year as 
host of the UK year of litera- 
ture and writing; Hie derelict 
Victorian Guildhall is being 
restored to create a national 
centre of literature due to open 
in March. By then, the city will 
be benefiting from completion 
of the “missing link” of the M4 
- the new business opportuni- 
ties are to be marketed next 
month at Swansea Bay indus- 
try week. 

In the next 

docklands at stage of the 

Barry, south- Mak, "S °“ t city's redevel- 

west of Cardiff, necessity, the board says opment plans, 
are also being the closure provides a joint venture 
“a major opportunity 
for employers” 


Connery, Richard Gere and Sir 
Anthony Hopkins are all film- 
ing in Gwynedd this year. The 
making of television pro- 
grammes for S4C, the Welsh 
language channel, bas stimu- 
lated the local industry which 
includes Barcud, a production 
facilities company which has 
purpose-built studios in Caer- 
narfon. 

In South Wales. Cardiff Bay 
and its barrage have drawn 
most attention in the rejuvena- 
tion of land for commerce and 
industry. But the capital is not 
alone in having ambitious 
plans. Nearby Newport awaits 
a decision after a public 
inquiry into a proposed bar- 
rage across the river Usk. 
While the scheme has met with 
vigorous opposition because of 
its possible effect on river life, 
the intention is similarly to 
provide a better environment 
for business in a decayed dock- 
land area. 

The rundown 


redeveloped by 
a partnership 
of the WDA 
and Associated 
British Ports. In March, a par- 
allel partnership - of Vale of 
Glamorgan borough council, 
South Glamorgan county coun- 
cil and the WDA - launched 
Barry Action. This project is to 
improve the town centre, 
upgrade communications, 
smarten the area's appeal for 
tourism and aid job creation. 

Swansea, the second city of 
Wales, already has its own bar- 


D elight - mixed with 
some relief - swept 
through the Cardiff Bay 
Development Corporation in 
July when Nippon Electric 
Glass of Japan and Schott Gla- 
swerke of Germany announced 
they would locate a 500,000 sq 
ft new plant casting £200m 
near the city's waterfront 
Delight that one of Britain's 
biggest inward investment 
schemes this year, creating up 
to 750 jobs over five years in a 
high technology industry mak- 
ing glass components for the 
television industry, was com- 
ing to the area; relief that after 
a long gap a “headline" scheme 
had been attracted against 
international competition, pos- 
sibly opening the way for other 
companies to follow. 

Cardiff Bay’s biggest suc- 
cesses to date - headquarters 
buildings for NCM, a credit 


■ CARDIFF PROPERTY 

The bay gets busy 


insurer, and for the Welsh 
Health Common Services 
Agency - were announced in 
1992. Both buildings will be 
occupied shortly. Though there 
have been other developments, 
including a relocation by Axa, 
the French insurance group, to 
a 44,000 sq ft building. Merid- 
ian Gate, on the fringes of the 
area, a new supermarket by 
Tesco on the Penarth side of 
the bay. and Techniques t, a 
£7.5m science centre due to 
open next year, the weak eco- 
nomic environment of the past 
few years has put a brake on 
the hoped-for relocations . 


Yet the measured pace at 
which the huge area - a total 
of 2,700 acres, equivalent to 
one-sixth the size of Cardiff 
itself - has been attracting 
development, may turn out to 
be an advantage. In London 
docklands development took 
place ahead of infrastructure, a 
mistake which Cardiff, with its 
ambitious target of a ttract i ng 
£2.5bn over a 10-15 year time- 
scale, has been able to avoid. 

The centrepiece - a two- 
thirds of a mile long barrage 
which will impound a 500-acre 
lake and help to create an 
eight-mile waterfront - was 


HOW DOES YOUR 

INDUSTRIAL 

LANDSCAPE COMPARE 

WITH OURS? 

Docs il>r lororion of your business 

communication links , and a loyal 

offer a Ih'<iI/Iiv environ incut? 

and flexible, workforce. 

A /iii/i/fing lifestyle? And some of 

You too a ill find there's an 

the best commercial advantages in 

impressive choice of development 

die UK? 

sties iiiid modern 

.Hid Glamorgan docs. Companies 

business units available, pt as some 

1 I 1 (U btivc afrcddy made (he move. 

of the best financial incentives of 

such as British Airuovs tnid Sony. 

miy •joveriimcfrt assisted area. 

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started in February, and is 
expected to be completed In 
1993. The peripheral distributor 
road which will take traffic 
through the bay has been 
largely completed from the 
west and will emerge from a 
tunnel section into the heart of 
the bay area by the end of the 
year. Another section taking 
traffic east to connect with the 
M4 should be completed before 
the end of the decade. 

Other parts of the jigsaw, 
creating a mixed-use develop- 
ment in an area which offers 
outstanding waterfront oppor- 
tunities and also takes in Car- 
diff’s docklands 


and older 
industrial 
areas. are 
being put in 
place. On the 
site of former 
car scrapyards 
Wilson Bow- 
den, the Midlands developer, 
plans a £50m retail and leisure 
scheme, inr.indj n g £i0m worth 
of infrastructure; TBL a local 
development joint venture, has 
recently started the first phase 
of a 140,000 sq ft speculative 
industrial scheme; housing 
schemes. Including the provi- 
sion of some social housing 
and involving local and 
national groups such as Bea- 
zer, Wixnpey and Barra tt are 
going ahead at various sites; 
and Associated British Ports' 
property arm, Grosvenor 
Waterside, is hoping to put a 

100.000 sq it new office develop- 
ment, Scott Harbour, out to 
tender shortly, for a 1995 start 
Tbe development - for which 
at least a partial pre-let is 
being sought - will be avail- 
able to a single occupier, or 
split into up to five units or 

10.000 sq ft or more. 

The shape of the area around 
the old Pier Head, now called 
the inner harbour, is also 
becoming clear. Next to ABP*s 
south Wales docks office a new 
hotel is planned, together with 
an opera house, the design, for 
which is now being selected 
from a shortlist of eight. It is 
hoped tbe opening next year of 
a silver service Harry Ramsden 
fish restaurant will encourage 
the growth of a food quarter 
like those in Boston and Balti- 
more in the US. 

An important issue, how- 
ever, is the impact that work 
on this scale is going to have 
on the rest of Cardiff, and in 
particular whether the redevel- 
oped bay wifi be a natural graft 
or present the existing city 
centre with a damaging rival. 

Demand for offices in Cardiff 
- the likely main determinant 
of the success or otherwise of 


“Cardiff needs a new 
business quarter. The 
city centre is firil and the 
bay is already proving 
a ttract i ve to tenants” 


the bay - has averaged in 
recent years around 200.000 sq 
ft a year. Though there is a 
substantial surplus of space in 
central Cardiff at present, 
much of it is in secondary loca- 
tions and not high quality. 
Room for further expansion in 
the city centre is limited. 

However, demand remains 
relatively weak, and because of 
a narrowing of the once sub- 
stantial gap between London 
and Cardiff rents - and an 
overhang of space in other pro- 
vincial cities - relocations are 
unlikely in tbe medium term 
to provide a significant boost 
to indigenous demand. 

Nevertheless, the concept is 
right, says Mr Peter Kelly, 
regional chairman of property 
agents, DTZ Debenham 
Thorpe. “Cardiff needs a new 
business quarter. The city cen- 
tre is full and the bay is 
already prov- 
ing attractive 
to tenants." 

Whether the 
two areas can 
grow together 
beneficially is 
going to 
depend also on 
the solution of transport prob- 
lems. A big growth in office 
development in the bay area - 
soon likely to be employing 
more than 4JS00 office workers 
- could lead to serious traffic 
congestion if adequate public 
transport is not put in place. 

Various studies have pointed 
to the need for a tight rail sys- 
tem which could be linked to 
the extensive Cardiff suburban 
and valleys rail network. Deci- 
sions have yet to be taken, 
however, in part because of the 
lack of an overall transport 
planning authority for the 
region and the likely cost. 

There is another physical 
constraint which the bay plan- 
ners have been seeking to over- 
come. Cardiff is bisected by the 
main London railway line, to 
the south of which the bay 
area lies. There are plans to 
give the city’s main station a 
new southerly entrance and to 
create a large new square - the 
Bridge area - which would 
link the two parts of the city 
but design of this scheme has 
proved difficult. Delays also 
seem likely on another city-bay 
connector, the broad avenue to 
run both sides of the rail link 
into the docks. 

Nevertheless, the Cardiff bay 
authorities are confident the 
problems can be overcome, and 
a deadline may concentrate 
their minds. The corporation is 
due to wind up at the end of 
1999, but perhaps even more 
importantly March 1 is pen- 
cilled In as the opening date 
for the new opera house. 

For this to be a truly gala 
occasion, a grand entrance and 
and a matching backdrop will 
need to be in evidence. 


of the city and 
WDA is putting 
In the infra- 
structure for 
Swansea Vale, which will 
become a suburb of 470 acres 
next to the motorway. About a 
quarter of the land will be for 
industrial «nri commercial use, 
and there is space for 1.800 
homes and a golf course. 

Further along the coast, and 
also gaining from the motor- 
way completion, Is Llanelli, 
where the borough council and 
WDA have an impressive, well- 
advanced regeneration pro- 
gramme. The town suffered 
when Duport steelworks closed 
in 1981 and 1,200 jobs were lost 

The two main aims of the 
partnership are to regenerate 
750 acres of disused industrial 
land along the coast - two cen- 
turies of industrial waste and 
dozens of derelict sheds and 
factories have had to be 
cleared - and to upgrade the 
town centre. 

Over the past four years, the 
seashore stretch has been 
transformed, with three lakes 
and a wildfowl and wetland 
centre. A “coastal village" and 
business parks are being cre- 
ated. In the town, a £20m shop- 
ping complex, developed by 
Monarch Properties, is due to 
open in 1996. 

“In short," the partnership 
confidently states, “Llanelli 
mains business.” 

Roland Adburgham 


tourism 


From slagheaps 
to showpieces 


To suggest a holiday in 
industrial South Wales would 
have seemed an unkind joke a 
decade ago, despite the nearby 
attractions of the Brecon Bea- 
cons and the Pembrokeshire 
and Gower coasts. Nowadays, 
a drive up the former mining 
valleys shows how much tbe 
character of the area has 
altered in a few years. 

Preconceptions of valleys 
scarred by slagheaps, aban- 
doned steelworks and an air of 
hopelessness are soon dis- 
pelled. Over £i36m has been 
spent on greening the country- 
side and developing tourist 
attractions, and beautiful hills 
and parkland now cover most 
of tbe ugly coaYtip scars. There 
are forest walks, heritage 
parks and industrial and craft 
museums to attract tbe visitor. 

The valleys of industrial 

sontb Wales 

are joining the 
glories of the 
coastline, the 
mountains of 
the north and 
the green soli- 
tude of mid- 
Wales to 
embrace the tourist. 

Tourism has always been an 
important part of the Welsh 
economy, but until recently tt 
was relatively low key, frag- 
mented and under-capitalised. 
It consisted mostly of tradi- 
tional family summer holidays 
in Llandudno and Rhyl in the 
north or Tenby and Forth cawl 
in the south, plus hikers and 
others attracted to the 
national parks of Snowdonia, 
the Brecon Beacons and the 
Pembrokeshire coast 

Two factors have changed 
attitudes dramatically, how- 
ever, and led to a much more 
coherent structured study of 
the industry and how it should 
be developed. 

The first has been the steady 
decline of traditional indus- 
tries such as epfllndnlng and 
steel in south Wales, agricul- 
ture in rural mid and north 
Wales, and more recently, 
defence industries and air 
bases in west Wales. 

With a need to create jobs, 
the principality had to exploit 
its tourist assets: a beautiful 


countryside, historic castles, 
churches and Roman and 
Celtic antiquities, plus a dis- 
tinctive language and culture. 

The second trigger for 
reform and development is tbe 
changing holiday habits of the 
British. As people began to apt 
for the guaranteed sunshine of 
Spain and Greece, Wales found 
itself too dependent on the tra- 
ditional family summer holi- 
day. Hence, it bad to offer 
fresh attractions. 

In its first development plan 
launched over five years ago, 
the Wales Tourist Board put 
up £23m of pomp-priming cap- 
ital, which stimulated invest- 
ment of £17lm. That helped 
create 3.500 full-time equiva- 
lent jobs. Tourism Is now an 
increasingly significant indus- 
try, employing 95,000 or 9 per 
cent of the workforce, and 
— earning £l.3bn 

Beautiful hills and parkland 
now cover most of the 9m people visit 
ugly coaitip scars as the 
valleys of south Wales 
embrace the tourist 


Wales a year. 

The inten- 
tion, revealed 
earlier this 
year in a study 
called Tourism 2000, is to cre- 
ate 10,000 more jobs directly 
or indirectly, turning tourism 
into a £2bu a year tadustry by 
the turn of the century. 

Mr Paul Lovelock, WTB’s 
chief executive, says: “We will 
target our efforts at certain 
overseas markets and at 
increasing the range of attrac- 
tions for those seeking short 
breaks or second holidays.” 
Development programmes are 
planned for coastal resort 
regeneration in Tenby, Porth- 
cawl and Llandudno; In the 
historic town of Caernarfon; 
for country holidays; customer 
care; and for golf, walking and 
cycling holidays. 

A prime requirement, partic- 
ularly in the coastal areas 
most vulnerable to changing 
holiday patterns, is to attract 
visitors more evenly through- 
out the year. There are indlca 
tions this is beginning to hap- 
pen. (n general, the “shoul- 
der” months of May-June and 
September-October have seen a 

Continued on next page 


Rhys David 



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FINANCIAL tames WEDNESDAY SEPTEMBER 7 1994 


29 


Ar 

ENTERPRISE IN WALES Hi 


■ THE LABOUR MARKET 

Battle of the sexes 


When Admiral Insurance, 
which specialises in over-the- 
telephone motor policies, set 
up in Cardiff in January 
it was uncertain if it could 
recruit the people it needed. 

There were many positive 
factors: the transport links 
with London, an Enth usiastic 
county council, cheap nnH 
available office space, and 
grant support of Rim 

A stumbling block was the 
difficulty of persuading manag- 
ers to relocate because of the 
dwindling disparity in house 
prices between the south-east 
and Wales, and a shortage of 
executive houses (a frequent 
complaint by relocating compa- 
nies). But the big impondera- 
ble, because it was hard to 
research in advance, was the 
quality of the local labour. 

After 19 months, Mr David 

Stevens, Admiral’s marketing 
ma na g er, gives his verdict 
"We've been very pleased with 
the quality of the labour force, 
notably their reliability and 
stability. The level of turnover 
of staff is much lower, and the 
staff's longer-term commit- 
ment to the company is higher, 
than we would have experi- 
enced in the south-east.” 

In manufac turing in du stry, 
Mr Alfred Gooding, head of 
Gooding Group, is an equally 
keen advocate of the virtues of 
Welsh workers, which is one 
reason why his new joint ven- 
ture with Grundig, the Ger- 
many consumer electronics 
company, is sited at Lfcmtri- 
sant near flmHff. Many other 
employers In Wales talk of the 
flexibility and reliability of 
their staff Last year, days lost 
per 1,000 employees due to 
industrial action were 21, com- 
pared with a- UK average of 30. 

However, while unemploy- 
ment in Wales has been 
reduced to about the UK aver- 
age, this disguises higher lev- 
els of male unemployment. In 
pockets this is severe, with 
consequent social problems. 

A survey last year of a ran- 
domly-chosen street on a hous- 
ing estate in Blaenau Gwent 
found only 22 adults were 
working and 60 were out of 
work. Disability or long-term 
illness was common. One man 
bad been out of work for 17 


Blaenau Gwent*, by Llew 
Smith, the local Labour MP. 
Lynda Bransbtny and Sarah 

Gfllam. The authors remarked: 

“An overwhelming mnnhpr of 
households complained about 
being In debt and failing to 
manage on benefit levels.” 

In Wales as a whole, gross 

earnings of f nTltfrtm wmplrt y pgfl 

last year averaged £281 a week, 
only 88 per cent of the figure 
for Britain. For workers to 
raise their there is an 

obvious need for higher «wtts 
F or companies, a shortage of 
skilled labour is seen as a con- 
straint on expansion as the 
recovery gathers pace. 

In one initiative, the Welsh 
Office announced in June it 
would fund a £&£m scheme to 
support 550 engineering 
apprenticeships, provide engi- 
neering equipment for colleges, 
and instruct workplace train- 
ers. Sir Wyn Roberts, then 


Female students achieve 
better results than 
males, but “Wales has a 
male-dominated culture” 


Welsh minister, commented: 
“Manufacturing ia a key sector 
in the Welsh economy, but a 
common ttramg in my discus- 
sions with industrialists is the 
shortage of trained people at 
craft and technician levels.” 

The need is also for better 
school results. Welsh boys 
have lagged behind their 
English and, in particular, 
Northern Irish and Scottish 
counterparts in gaining A-lev- 
els (or the equivalent). This 
year, the chief inspector of 
schools in Wales reported that 
although there had been “a 
steady improvement in pupils’ 
performance within GCSE at 
every level . . . much under-ex- 
pectation of pupils remains." 

There has been a big rise in 
the numbers of those in Wales 
who go an to farther educa- 
tion, from 36 per cent in 1988-89 
to 53 per cent However, female 
students - who achieve better 
school results than males - 
also outnumber them in far- 
ther education by 20 pm 1 cent. 

In spite of this, fewer women 
are economically active than in 
other parts of Britain. Yet the 


time working. A survey by the 
Welsh training and enterprise 
councils, published this year, 
showed 57 per cent of employ- 
ees were male and 43 per cent 
female, but in small firms the 
balance was almost equal. 
Nearly three times as many 
women as men worked 
part-time. 

Among the fUll-time work- 
ers, female weekly earnings in 
Wales were on average 27 per 
amt below male earnings to 
1992. "People and Prosperity, a 
Challenge to Wales”, published 
last November by the Welsh 
Office, pointed out that both 
men and women tended to fol- 
low stereotyped vocational 
routes. "Women are much 
more likely thaw men to be in 
unskilled and semi-skilled jobs, 
and in jobs without long-term 
career prospects," it said. 

“They are in turn under-rep- 
resented at the senior levels of 
industry, public service and 
the professions as compared 
with UK averages." The report 
added: “Employera in Wales 
are losing by this waste of 
resources." 

One determined attempt to 
reduce this waste is Chwarae 
Teg, the women's fair play 
organisation launched in 1992. 
This year, it received Welsh 
Office fending of £50,000 with a 
commitment for two more 
years. Chwarae Teg, which has 
become a non-profitmaking 
company, aima to encourage 
good practice in training, flexi- 
ble working and better child- 
care to enable women to return 
to work or training. It has 
become a role modal for simi- 
lar initiatives in England. 

Women in Enterprise, an 
independent networking sup- 
port group, was launched in 
1990 to raise the status of 
women in business and the 
professions. It has corporate 
and individual members and 
does not exclude men - "We do 
not believe it is realistic to sur- 
vive in a one-gender vacuum,” 
says Ms Jeannie Hainsworth 
Lamb, the rhairmflTi But she 
points out rbar Wales still lww 
a male-dominated culture. 
Woman are under pressure to 
conform to domestic rales and 
find it hard to be promoted. 

"Lip service is paid to equal 
opportunities," she says, "but 
what is wanted is more practi- 
cal help." 

Roland Adburgham 


years and several for seven to 
10 years. Of those in work, 

many were an low incomes. proportion of women in work 
The survey was published in -has risen sharply in recent 
“The politics of poverty in years, partly because of part- 


From slagheaps to showpieces 


Continued from previous page 


slow but steady growth from 
second holidays and short 
breaks. In recent years, there 
has been a decline in visitors 
In the peak holiday months, 
together with a trend towards 
later booking and discounting. 

However, this year’s fine 
weather and the economic 
upturn have brought an 
increase in hotel occupancy 
figures over the very poor 
1993 season. For example, Mr 
George Pearsall, proprietor of 
the Plas Morfa hotel on th e 
coast between Aberystwyth 
and Cardigan, has seen a rise 
of 25 per cent in occupancy 
rates so far this yea r. 

Another major requirement 
is to attract visitors who spend 
more money in the principal- 
ity. This is being achieved by 
targeting overseas visitors, 
developing areas of tourism 
finch as golf and yachting, and 
by improving hotel accommo- 
dation and car parking facili- 
ties. There are relatively few 


top class hotels in Wales, but 
tiie standard of accommoda- 
tion has been improved 
greatly by the introduction of 
.a quality grafting system. 

Wales has fared relatively 
badly in attracting foreign vis- 
itors, with under 4 per cart of 
the UK total compared with 
&5 per cent for Scotland, and 
efforts are being made to 
imp rove Oils. Two years ago 
the WTB was allowed to mar- 
ket itself overseas separately 
from the British Tourist 
A u thori t y, something Scotland 
has done for a decade. 

The key target market is the 
US, and a network of 1,500 
travel agents has been built up 
in east and west coast cities to 
promote Wales as part of a UK 
tour or as a destination in Its 
own right Over 300 US travel 
agents hav e bee n brought to 
Wales for training visits and 
they receive regular updates 
on new attractions and facili- 
ties. Seminars on tourism in 
Wales are being held through- 
out the US next month. 


Other markets being 
researched are Australia, Can- 
ada, Germany, the Nether- 
lands, France, Ireland and 
Japan. (There appeared to be a 
big Increase In Dutch, German 
and French car numberplates 
in the byways of rural midi- 
Wales this summer.) 

O ver th e next three years 
the WTB plans to double its 
overseas marketing budget 
from £750,000 to £l~5m. Mr 
Loveluck expects overseas visi- 
tors to increase by 6 per cent 
compared with a 2J5 per cent 
rise in UK tourists. 

It is accepted that tourism 
development most not be 
allowed to harm the environ- 
ment or the heritage that 
draws visitors to Wales. But 
even this can be controversial 
territory. Flans to clear and 
green some of the re m ai nin g 
slagheaps around Ebbw Vale 
are now being criticised for 
destroying the country’s 
industrial heritage. 

Richard Evans 


INNOVATIVE 

IMAGINATIVE 


INFORMATIVE 


Corporate Offices in Wales: 
Cardiff 

Carmarthen 

Swansea 


bn England* 

Bristol 

Shrewsbury 
Offshore banking: 

Jersey, C.i. 


OF 
|WA 1 ES 

‘ w 1C CYMRU 

The business people 


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forth*, I 



Compact efiae mastera are prepared at Nbwbus Manufactirag In Cwmbran. Gwent 

Roland Adburgham looks at the industrial base 


Investors still keen 


F or Wales, one of the 
coups this summer was 
the announcement that 
Tech-Board, a £40m start-up 
UK company, would site a 
hardboard min, employing 200 
people, near Ebbw Vale in 
Gwent 

Mr Malcolm Graham, Tech- 
Board’s chief executive, 
explained why. “The region's 
Mining mamafsct iiri pg hdritssc 
and the availability of a qual- 
ity, highly motivated work- 
force played a major part in 
our decision," he said. “The 
excellent communications with 
the rest of the UK and conti- 
nental Europe, via the Beads 
of file Valleys road and the M4, 
were also important” 

Other key factors, he said, 
were the support of the Welsh 
Office, local authorities and 
the Welsh Development 
Agency. British Coal Enter- 
prise, the job creation offshoot 
put in £250,000 at the venture 
capital 

Similar stories from other 
companies explain why Wales 
continues to attract manufac- 
turing investment The combi- 
nation of welcoming local 
authorities, active develop- 
ment agencies and the avail- 
ability of grants helped Wales 
to be the only UK region to 
increase manufacturing's share 
of gross domestic product 
between 1980 and 1992. 

Inward investment has 
played a crucial part in 
enabling Wales to retain a 
manufacturing base, despite 
the contraction of its tradi- 
tional heavy industries. There 
are about 350 oversea»owned 
manufacturing plants in 
Wales, nearly 100 more than in 
1985, and employment by these 
has risen by 50 per cent. 

While competition to win 
such projects has become 
tougher, inward investment 
has not stopped. In May, for 
example, thin C anadian com- 
pany Fisher Gauge opened a 
European headquarters at 
Welshpool, Powys, to mak e 
small die-cast components. Mr 
Bill Fisher, president, said it 
chose Welshpool because of 
"its good transportation. Imks 
and good working environ- 
ments’*. In July, Nippon Elec- 
tric Glass and Schott Gla- 
swerke said it would site a 
£20Qm manufacturing plant at 
CariHff Bay. 

Fears that the world reces- 
sion would make Wales vulner- 


able to cutbacks of "branch- 
plants” appear overstated. 
There has been retrenchment: 
Well a, the German group, is 
closing its Ondawel hair cos- 
metics unit at Pontyclun, near 
Cardiff, with the loss of 150 
jobs. Compton Webb, a uni- 
forms maker with several UK 
plants, shut its Newport fac- 
tory with 230 redundancies to 
reduce capacity. The closure 
this year of BP Chemicals' eth- 
ylene cracker plant at Baglan 
Bay meant 600 jobs were lost 

However, non-Welsh compa- 
nies are continuing to invest in 
their b usinesses in Wales. This 
spring, Sony opened a frame- 
making operation at its Bridg- 
end television plant, increasing 
its Welsh workforce to about 
2.700. Another Japanese com- 
pany, Sharp, is investing £5£m 
in its micr o wave oven plant at 
Wrexham. Clwyd. 

A criticism of many inward 
investments has been that they 
have provided only low-paid 
assembly-type work. But Mr 
David Rowe-Beddoe, chairman 
of the Welsh Development 
Agency, comments: “Overseas 
companies, once established, 
are becoming more committed 
to Wales, viewing the princi- 
pality as tiie best location for 


European headquarters, 
research and development and 
manufacturing. This Is, in 
turn, improving both tiie num- 
ber and the quality of jobs.” 

Such projects this year have 
included a £2m European 
research and development cen- 
tre for Calsonic International 
the Japanese-owned radiator 
company, at Llanelli Automo- 
tive components have become 
one of the principality's key 
industries, ranging geographi- 
cally from Ford’s engine plant 
at Bridgend in south Wales to 
Toyota's engine plant on Dee- 
side, north Wales. It is esti- 
mated about 20,000 are 
employed in the sector. 

It is often overlooked that 
the steel industry, where there 
has been huge investment, 
remains one of the biggest 
employers - British Steel has a 
workforce of more than 14.000 
in Wales. Aerospace has also 
become a sizeable industry. Its 
labour force is over lljxn peo- 
ple, spurred recently by the 
British Airways £75m mainte- 
nance base at Cardiff-Wales 
airport and £23m avionic com- 
ponent repair business at Llan- 
trisant 

In a different sector, an inter- 
esting turnround has been 


achieved at CP Pharmaceuti- 
cals, which a management 
buy-in team acquired last year 
from Fisons. Mr Andrew 
Coveney, finance director, says 
the company - based at Wrex- 
ham and making hospital and 
generic products - hod been 
under threat of closure after 
multi-million pound losses. 

“Since then, we have gone 
from strength to strength, hav- 
ing changed from being an out- 
post of a big pic to become a 
medium-sized, thriving, profit- 
able and totally independent 
company.” The 194 jobs were 
retained and 20 more people 
have since been recruited. 

Another company in a 
growth industry is Nimbus 
Manufacturing at Cwmbran, 
Gwent It made the first com- 
pact disc in Britain 10 years 
ago and now produces over 
35m annually . It Is investing 
£2 .5m in its plant, which 
employs 300 people, this year 
and sees immense potential for 
CD-ROMs, the discs which 
store text video, sound and 
graphics. Mr Howard Nash, 
managing director, describes 
Cwmbran as a good location 
for its road distribution - 
though, like other south Wales 
businessmen, he is concerned 


at the possibility of future 
motorway toils. 

Wind farms are another 
novel - but controversial - 
industry, with a belated recog- 
nition that there needs to be 
tight control over their siting. 
Europe's largest wind farm, 
with 103 turbines, is at Llandi- 
ruun, Montgomeryshire. 

Among investments this 
year by indigenous businesses 
has been that by Control Tech- 
niques, a leading producer of 
electronic drives and controls. 
At Newtown in mid-Wales, it is 
spending £&5m to expand its 
European headquarters, R&D 
and production. Stephens & 
George, which prints about 100 
magazine titles, is investing 
£3.7m at its Merthyr Tydfil 
plant. Halo Foods, at Tywyn, 
Gwynedd, has a £3.25m expan- 
sion to meet de mand for its 
Halo chocolate snack bar. 

There are signs, os the recov- 
ery gains ground, of increasing 
activity. The venture capital 
group 3i put £8m into 17 Welsh 
companies In the year to 
March. It reports a "noticeable 
increase in the level of growth 
of capital funding, as busi- 
nesses moved to strengthen 
their balance sheets to take 
advantage of post-recession 
opportunities". 

Made, the valleys enterprise 
agency, advised in 1993-91 on 
182 business plans with an 
overall funding need of £l0-5m, 
three times the amount sought 
in the previous year. As big 
businesses continue to reduce 
their workforces, much wlU 
depend on the growth of such 
smaller, indigenous businesses. 

One need is for more compo- 
nent suppliers and the Source 
Wales programme, run by the 
WDA, encourages links 
between companies. Another 
scheme, organised by the 
Welsh Office and Wales Qual- 
ity Centra (n non-profitmaking 
company to promote quality 
improvement), is "Inside Welsh 
Industry", 'nils is a series of 
visits to selected companies to 
enable business people to learn 
from their techniques and tech- 
nologies. 

To promote technology 
transfer, Transtech Interna- 
tional fair, organised by the 
WDA is to be held in Cardiff in 
early December. It will enable 
academic and research organi- 
sations to meet companies so 
as to encourage partnerships 
for product development 



H 

N ? 


Bhaps not, but the Welsh Dragon is well represented in 
China and Hong Kong by companies within the Welsh 
Water Group. 

Such involvement on a global scale is typical of 
Welsh Water. 

We are well known for the 
management of water services to the 
Principality and beyond, but we also 
have a wider range of resources and 
expertise. 

We act as consultants on motorways, railways. 

r 

harbours, tunnels, bridges, and many other engineering 
projects, and the Welsh Water Group includes arguably the 
largest environmental consultancy of its kind in Europe. 

In the UK, our Industrial Services arm draws on the skills 
and expertise within the Group to offer a liquid waste 
treatment service to industry at a time when environmental 
protection standards have never been more stringent. 

The Welsh Water Group’s skills and experience are currently 
being used to deliver infrastructure services in over 30 countries in Gve 
continents. 

Like the Welsh Dragon, we’re fired up to achieve even greater success. 



WELSH WATER PLC 


For further information on how Welsh Water PLC can help you, contact Brian Roussel or Jackie Jenkins, on 0222 500600 
or write to Corporate Communications, Welsh Water PLC, P0 Box 295, Alexandra Gale, Rover Way, Cardiff CF2 2UE. 





30 


FINANCIAL TIMES 


WEDNESDAY SEPTEMBER 7 1994 


ENTERPRISE IN WALES IV 


xplaining why the Wales 2010 
report, ftwrnitMrtftnpd by the Insti- 
I tute of Welsh Affairs, had advo- 
cated a “Wales - Land of Enterprise" cam- 
paign, Dr Gareth Jones says: "We Celt it 
critically Important to create a positive 
view of enterprise” 

The report, produced last year by a 
group chaired by Dr Jones, set out to iden- 
tify how Wales could become one of the 
most prosperous regions of Europe by 
2010. It advocated "keynote years” with 
themes to stimulate progress towards this 
target - beginning with the Land of Enter- 
prise. 

The campaign has been slow to gain 
momentum - a launch conference origi- 
nally proposed for May will take place 
next month - but Dr Jones stresses It Is a 
springboard for a long-term plan to change 
the image of Wales over the next decade. 

Outside Wales, he Bays, there remains a 
perception problem. “There is still an 
image of miners going home from the coal- 
pit. There are still elements of churches, 
chapels, harps and singing." 

Within Wales, Dr Jones states, “our 
aims are the creation of an enterprise cul- 
ture, to encourage innovation and technol- 
ogy, and to improve education and train- 
ing. But It is a mammoth task to try to 
chang e the culture of a nation stuck in a 
pattern for 200 years - you can't change it 


Roland Adburgham on efforts to encourage enterprise 

Springboard for prosperity 


overnight or In a g frigto year.” 

The need, be emphasises, is clear. 
"Wales has the lowest regional income of 
any region and it has not advanced 
because the emphasis has bean on ‘a job Is 
a job is a job’. We want a highly educated 
labour force which will have higher added 
value." 

He acknowledges the difficulties in con- 
vincing people of the campaign's merits. 
"Always - particularly in Wales - there Is 
a certain amount of scepticism. It Is quite 
an ambition - but what we are doing has 
widespread support We were very con- 
cerned to ensure we involved organisa- 
tions which already existed as part of the 
process - not to go off on our own tack.” 

In consequence, a broadly-based, if 
unwieldy, steering group was set up with 
over 20 members drawn from leading 
organisations in the public and private 
sectors. Mr John Webb, president of Wales 
Chamber of Commerce and Industry, 
chairs it 

The Wales 2010 report concluded that 


growth in the Welsh economy would come 
increasingly from smaller companies, and 
to achieve this growth there needed to be 
a climate in Wales that was s up po rtiv e of 
enterprise. An emphasis of the campaign, 
Dr Jones states, is to encourage small and 
companies not only to grow 
but to remain in Wales. “There are so 
many examples of businesses being 
started and then 'sold over the bridge',” he 
says, referring to the Severn crossing 
between Wales and England. 

There Is general concern in Wales at 
ownership of companies moving outside 
the principality. Price Waterhouse Wales 
points out that until Biatrace Interna- 
tional of Bridgend floated last November, 
and the reverse takeover in March of the 
property company Markheath by TB2, 
based at St Mellons, five years had elapsed 
since Wales bad had a new quoted com- 
pany. 

Dr Owen Jones, who (hatred the enter- 
prise taskforce for Wales 2010, comments 
that, with inward investment likely to 


play a less vital role in future, “it is most 
important to have more companies with 
their corporate headquarters and decision- 
making in Wales”. 

A central objective of the campai gn is to 
set up an enterprise foundation. Although 
this would require substantial public sec- 
tor funding to get It off the ground, the 
foundation would be intended ultimately 
to make Wales less dependent on public 
sector leadership. 

Dr Gareth Jones adds: “We want to get 
the young people of Wales by 2010 to say: 
■We want to set up our own business.' 
Attitudes in schools have got to change." 
The conference, to be held tn Cardiff on 
October 20, will especially target the 10-25 
age group with seminars run by people 
who have set up their own businesses. 
Training and enterprise councils in south 
Wales will participate to promote the 
Investors in People programme. 

The effective delivery of advice, whether 
to young people setting up businesses or 
to established companies. Is an Important 



John Redwood; wants a now generation of 
mad Inventors and great entrepreneurs 

factor in encouraging enterprise. To sim- 
plify matters, the Department of Trade & 
Industry has been encouraging one-stop 
shops in England called Business Links, 
but the Welsh Office is more guarded 
about this concept 

Although the Welsh Office promises 
start-up funding, it has warned that addi- 
tional tiers of administration and separate 


legal entities should not be created - nor 
should there be new premises. Local 
authorities. Tecs and others have been 
Invited to submit proposals by the end of 
this month. “I only want a response If you 
can offer a better service with less canto- 
sion and bureaucracy," Mr John Redwood, 
Welsh Secretary, told them. 

What has been described as a “one-stop 
shop for engineering", and which was wel- 
comed by Mr Redwood, Is the Engineering 
Centre for Wales. This was set up in 
March - with pump priming from the 
Welsh Office. Welsh Development Agency, 
Rn gimwing Council and Royal Academy 
of Engineering - to enhance the quality of 
the industry and encourage young people 
to become engineers. 

“We need a new generation of mad 
inventors and great entrepreneurs,’* Mr 
Redwood said at the centre's launch in a 
recalling Brunei's Great Western 
railway and Stephenson's Rocket. Neither 
engineer was Welsh, but that young Welsh 
people can show entrepreneurial spirit 
was shown In July, when a team of U girls 
at a Barry comprehensive school won the 
UK Young Enterprise competition, spon- 
sored by Midland Bank. 

The rampany they had formed concerns 
a faster means of communications than 
the railways - it makes computer mouse 
mats. 


■ BUSINESS AND THE WELSH 

The elite from outside 


One of the things which 
puzzles visitors to Wales Is 
why so few people whom they 
meet running small businesses 
or tourist facilities are Welsh. 
The fact that newcomers have 
so evidently prospered in 
Wales in recent years suggests 
the opportunities are there, 
but the low profile of the 
Welsh, and in particular the 
country’s 500,000 Welsh speak- 
ers, suggests the locals are not 
taking advantage of them. 

This apparent lack of entre- 
preneurlalism - in both lan- 
guage communities - has been 
the subject of academic 
research in recent years and is 
behind the formation of Men- 
ter a Busies (Enterprise and 
Business) which has a brief to 
help Welsh speakers to 
develop their economic poten- 
tial and so faring renewed eco- 
nomic vitality to parts of 
Wales where unemployment 
and migration of young people 
remain high. 

Their Protestant background 
should perhaps have predis- 
posed the Welsh to enterprise, 
but historians believe other, 
less favourable influences 
have been at work. Though 
Wales was among the most 
industrialised parts of the 
world in the 18th and 19th 
centuries, the pattern of land 
ownership resulted in a 
largely non-Welsh elite con- 
trolling, and deriving most of 
the benefits from, mineral 
extraction. This, Mr Merfyn 
Jones of University of Wales, 
Bangor, points out, prevented 


the emergence of on indige- 
nous entrepreneurial class. 

Social mobility among 
Welsh people has until com- 
paratively recently been asso- 
ciated not with business but 
with learning - education, the 
law, medicine and the church. 
The dominance of two indus- 
tries In the Welsh economy - 
iron and steel, and coal - and 
their eventual state control 


types of business In which the 
groups are represented and, 
indeed, In the personalities of 
those running them, with the 
biggest differences occurring 
between the Welsh-speakers 
and the newcomers. 

On the whole, Welsh-speak- 
ers tended to be traditional in 
their approach to business, 
reluctant to take on extensive 
borrowing, and anxious to 


Welsh siieaftA^ wrHtng 

Proportion of poprfattorif (%) 

as 




■i ■ •' 

PWWiwOMMMdld. ■ 



ISyflara #■ . 

. Jmtowr * 
flburaqappofltapiiiflopO eeu B W ^ • • 

after the war added a further 
dimension, encouraging many 
Welsh people to see the public 
sector as offering the best 
career prospects. 

M a B has draw its own prob- 
ing which has analysed this 
legacy. Its study of 80 Welsh 
businesses - 40 ran by Welsh- 
speakers and 20 each by 
English-speaking Welsh people 
and newcomers, spread across 
four small towns - has found 
significant differences in the 




AVDURDOD 

TIR 

CYMRU 



LAND AUTHORITY 

FOR 

WALES 


For residential , 
commercial or industrial 
development land, 
talk to the 

Land Authority for Wales 


Custom House. Customhouse Street. Cardiff CF1 SAP 
Telephone: 0222 223414 Fax: 0222 223330 

33 Grosvenor Road, Wrexham, Clwyd LLii 1ST 
Telephone: 0978 357133 Fax: 0978 290955 


77? e W c 1 s h La n d m a r 


keep activities within safe and 
stable boundaries. Product 
ranges were conservative, 
with changes often enstomer- 
driven, and prices were set in 
line with competitors. Because 
customers were often known, 
there was a willingness to 
advance credit 

The newcomers, partly 
because many were starting 
up in a new area where they 
had few contacts, found they 
had to be more innovative. 
This was manifested in a will- 
ingness to borrow, a reluc- 
tance to extend credit, and a 
much more aggressive 
approach to marketing and 
product pricing. 

The Welsh-speakers were 
also less self-confident and 
more anxious, and tended to 
see their business in subjective 
terms. “Non-Welsh speakers 
feel that it is possible to 
Improve their business by 
adding to their education or 
by going on courses. Welsh 
speakers blame the weak- 
nesses of the business on their 
own personal shortcomings,” 
Mr Hywel Evans, director of M 
a B, observes. 

With this evidence to hand 
and using detailed census 
information on Welsh job 
characteristics, M a B baa 
devised programmes to change 
attitudes and get more Welsh 
people to think about going 
into business. After only five 
years, there are signs that sub- 
tle changes are being 
achieved. 


The Welsh language broad- 
cast media have been encour- 
aged to feature business more 
prominently in their pro- 
grammes, and by focusing on 
successes to create positive 
rale models as an antidote to 
the previously negative 
images of business and busi- 
ness people. 

Welsh language course 
material suitable for use from 
primary through to farther 
education has been devised, 
and community groups have 
been encouraged through a 
business game, Chwylbro! to 
make business issues a natural 
topic of discussion. 

The signs, according to Pro- 
fessor Phil Cooke, of Univer- 
sity of Wales, Cardiff, are that 
a turnround in attitudes has 
begun. Studies undertaken for 
M a B in 1993 by Beaufort 
Research showed Welsh speak- 
ers had become more aware of 
snccessftxl business rMe mod- 
els and thought of Wales more 
positively as a business loca- 
tion. In addition, the Welsh 
language had come to be seen 
by both language groups as 
offering business advantages. 

Other positive signs have 
emerged, including greater 
Interest among Welsh busi- 
nessmen and women tn band- 
ing together to exploit oppor- 
tunities. In Gwynedd the 
Welsh-langnage market has 
created a strong print sector 
but this was under threat from 
English printers willing to 
compete for local - and even 
Welsh language - trade. 
Rather than retreat, as might 
have happened in the past, the 
Welsh companies are coming 
together to mount their own 
joint marketing venture. 

Another indication of the 
new self-confidence of Welsh 
speakers in business has been 
tiie emergence in Cardiff of a 
business group working in 
professional services. The 
group, Cwlwm Busnes Caer- 
dydd a*r Cylch, has a mailing 
list of more than 300 members 
who meet regularly through- 
out the year. 

One of the prime movers, Mr 
Dafydd HampsonJones, direc- 
tor of Celtic Henderson Cros- 
thwarte in Cardiff, part of 
Bank of Yokohama-owned 
Guinness Mahon, offers invest- 
ment advice through the 
medium of Welsh - making it 
necessary to invent a new 
range of terms (such as brein- 
gyfrannou dl-ftaddran or zero 
dividend preference shares). 

He recently placed what is 
probably the first bilingual 
tombstone advertisement for a 
share placing Involving a 
north Wales TV production 
company, and estimates 25 per 
cent of Us company’s private 
client business is conducted 
through the medium of Welsh. 

Rhys David 


Roland Adburgham reports on the partnership approach 

New life in the valleys 


The Victorian edifice, inscribed 
“Messrs Nixons' Workmen’s 
Institute, Library & Public 
Hall”, has seen better days. 
The building, in Mountain Ash. 
Mid-Glamorgan, is derelict and 
its once-handsome yellow and 
red brick frontage is sprouting 
weeds. 

Mountain Ash is in Cynon 
Valley, in the heart of Mid Gla- 
morgan and at the heart of 
attempts to revitalise the south 
Wales valleys. Once there were 
50 collieries in Cynon Valley 
alone and there was a popula- 
tion of 100,000. Today, the pop- 
ulation Is 67,000 and male 
unemployment is about 30 per 
cent. This year, British Coal 
stopped production at Tower, 
its last deep mine in south 
Wales, at the northern end of 
the valley. 

Nixons typifies the chal- 
lenge: It ran one of the col- 
lieries near Mountain Ash. 
Though the pit closed more 
than 40 years ago, its black 
scars remained until recently. 
Today, the memory of Nixons 
is befog consigned to the past: 
on the pit's reclaimed land, 
there Is the Cwm Cynon busi- 
ness centre. 

This flagship centre, opened 
last year on a 60-acre develop- 
ment site and now fully let, 
symbolises the efforts being 
made to revitalise the south 
Wales valleys. 

It is one result of a joint ven- 
ture, launched in 1991, of the 
borough council, county coun- 
cil and Welsh Development 
Agency. In the wake of the 
Tower closure, the WDA 
investment in the venture has 
been increased to £28m over 
the next two years. 

As elsewhere in the valleys, 
a partnership approach is seen 
as the best m ea ns of cnnrdfoa- 
ting measures to repair the 
damage to the environment, 
regenerate the towns and lever 
In private capital to create 
jobs. 

At Merthyr Tydfil, for exam- 
ple, a joint venture includes 
the borough council. Mid Gla- 
morgan county council and 
WDA In association with Mer- 
thyr Business Forum. To 
encourage the growth of local 
companies, a business centre 
was opened last November. 
The partnership has come up 
with a scheme to develop five 
key sites which would be 
Knltpri with e&cih other and tha 
town centre by monorail, to 
help counter the drift away or 
retail spending. 

In Gwent, the Victoria Part- 
nership - formed by the WDA 
Blaenau Gwent council and the 



Tower Coffiery in Cynon VaSey 

county council - Is transform- 
ing 80 acres of the Ebbw Vale 
garden festival into an urban 
village and. It is hoped, eventu- 
ally local employment for 1,100 
people. Many of the festival 
features are being retained, 
including the wetlands and 
woodland areas. 

"We are still getting 100,000 
visitors a year and the reaction 
has been excellent - that they 
have not returned to find a der- 
elict site,” says Mr Alan Nlcoll, 
of the WDA and head of the 
partnership. The target year 
for completion is 2000 and all 
50 of the houses in the first 
phase have sold. Redraw 
Homes is the lead developer for 
the second phase of the village 
centre, which will have about 
200 houses. “The scheme Is 
now seen by people as a suc- 
cess, and people want to jump 
on the back of success,” Mr 
Nlcoll says. 

Also in Gwent is Tredegar 
Action, a partnership of the 
WDA, Blaenau Gwent borough 
council and county council, 
which involves a £3m refur- 
bishment of the shopping cen- 
tre by TBL the Welsh-based 
property developer. 

In another town regenera- 
tion scheme, the Land Author- 
ity for Wales has signed a £2Qm 
contract with Boots Properties 
to t ransf orm the shopping cen- 
tre of Caerphilly In the 
southern part of Rhymney Val- 
ley. It took seven years for the 
authority, which assembles dif- 
ficult sites for development, to 


unravel the complex land own- 
erships. 

Mr Ian MacVicar, Rhymney 
Valley's economic development 
officer, says: “What we are 
finding is that the valleys as a 
whole are now regarded as a 


place where industry can pros- 
per. The old problems of poor 
transport and the legacy of the 
industrial revolution are 
largely things of the past” 

Visitors to the valleys cannot 
but be unaware of the land rec- 
lamation, urban renewal and 
road Improvements (the Welsh 
Office is giving a high priority 
to the dualling of the A465 
Heads of the Valleys road, 
which will speed links with the 
English Afidlands.) The need is 
obvious - a decayed environ- 
ment Is only a mask hiding 
deeper economic and social 
problems. 

The woe-begone appearance 
of Mountain Ash Is not untypi- 
cal. Old-fashioned shops, with 
such names as Plain & Fancy, 
Home Comforts and Rita's 
Fashions, are next to estate 
agencies offering terraced cot- 
tages for as little as £ 20 , 000 . 
Though the valley's employers 
include Hitachi, AB Electron- 
ics, Pirelli and Gooding San- 
ken, 42 per cent of the work- 
force are employed elsewhere. 

To widen the industrial base, 
the Cynon Valley partnership 
hopes to attract 25 new busi- 
nesses by 1998, and to set up 
200 local businesses. Last year, 
a technology training centre 

Continued on next page 


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FINANCIAL TIMES 


WEDNESDAY SEPTEMBER 7 1994 


31 


ENTERPRISE IN WALES V 



» Alison Xnigbt, a 
ceramic artist, found 
herself becoming a 
small businesswoman when 
she needed factory floorspace 
to lay out the tiles she had 
agreed to mak e for an architect 
workin g on a pop star's 
pool The contract 
fell through, but after 
discussions with the council 
covering the YstradgynlaJa 
area, north-east of Swansea, 
she decided to start up on her 
own to znafce ceramic products. 

Six years and numerous 
business courses later, she has 
a projected turnover this year 
of more than £300,000, and a 
staff of IS. Her husband has 
Joined her to help run the 
business, and the factory is 
being purchased. The outlets 
tor her product - a range of 
perfumed pomanders - have 
expande d from craft shops in 
tourist centres to of the 
biggest high street outlets, 
Including the Body Shop, 
Boots, and from next year 
Marks & Spencer, with mail 
order also being added. 

Mrs Knight's company, 
Alexander Ceramics, is one of 
a number of success stories In 
a part of Britain which - 
admittedly from a low base - 
has bucked the trend of 
declining manufacturing 
employment 

New starts, re-starts, 
expansion schemes and 


Rhys David charts the success story of community-based enterprises 

New starts, survivors, MBOs 


management buy-outs - 
involving incomers and others 
local people - have made it 
possible for employment to 
grow in the decade since 1SS1 
by just under 19 per cent The 
population of the area is now 
back over 200,000, reversing 100 
yean of decline. 

The attractions of mid-Wales 
to the Independently-minded, 
keen to start up on their own 
are obvious, but the challenges 
of operating from the area 
have meant that only those 
with determination have 
survived. 

At Alexander Ceramics, 

The attractions are 
obvious, but only those 
with determination 
have survived 

turnover in the first year was a 
mere £6,000 and just double 
that in year two. The product 
line had to be pruned and 
effort concentrated on smaller 
items - ceramic shells, fish 
and farmyard imtmflia - before 
growth really began, and as 
Mrs Knig ht points crut, she has 


had to be involved as owner- 
proprietor in every aspect of 
running the business, from 
design through marketing to 
cleaning Staff have had to be 
flexible, hand-painting her 
range of figures one moment, 
packaging thm the next. 

With the exception erf modest 
grants and Inara? from the local 
council and the Development 
Board for Rural WbIbb 
(DBRW), finance has so far 

haen gpn p roted Inte rnally Thp 
company is now preparing to 
scale up its operations, 
introducing products using 
non-ceramic materials, 
meeting bigger customer 
orders and servicing overseas 
markets. 

Several miles away at 
Abercraf, Mr Peter Taplow and 
his partner, Ur Nigel Bruce, 
are operating at a different end 
of the scale - mqMng a success 
of their management buy-out 
of the remnants of what was 
until 20 years ago a substantial 
p art of Britain’s automotive 
ftis tmrne nteHnn industry. 

Caerbont Automotive 
Instruments was established in 
the village of the sama name, 
near Abercraf, to carry on the 


manufacture of automotive 
instruments an a much smaTiar 
scale after Lucas, the former 
owners, had decided on a new 
product line - wire harnesses 
- for the former Smiths 
Industries plant It acquired In 
the early 1980s in nearby 
Ystradgynlals. 

By the end of the 1980s own- 
ership of the Caerbont factory 
had passed into the hands of 
German company, VDO, which 
had decided to move Into the 
UK to supply the new Japanese 
car plants being built. 

When, after a change of sour- 
cing strategy, VDO decided in 
April last year to dose the sur- 
viving Caerbont plant - at that 
stage down to a workforce of 
100 - Mr Taplow persuaded the 
company it would be less 
costly to sell it to him anil his 
partner for a total of £250,000. 

The partners’ first stop was 
the DBRW which paid for a 
feasibility study by Touche 
Ross In Cardiff. 3i’s Cardiff 
office eventually provided 25 
pm 1 cent of the capital with a 
mixture of equity and mezza- 
nine finance, but with the big 
banks other ffnanriai insti- 
tutions than keen, the two 


partners had to find the 
r emaining fTmmrp themselves. 

So ter, the gamble is work- 
ing. Caerbont supplies the 
spares market for the British 
Instruments once fitted to all 
UK-made cars, as well as origi- 
nal equipment for Leyland 
Trucks, Land-Rover Defenders 
and LDV, the vans buy-out 
from Leyland Daf Tracks. (It 
also ha« a number of intere st- 
tog niche markets, Including 
one supplying the original, 
large-size, Austin Mini speed- 
ometer for retrofitting by Jap- 
anese enthusiasts into new 

Minin) 

The company is now malting 
a prefit on a turnover of more 
than £8m and has a strong cur- 
rent order book and sales well 
ahead of plan. Employment is 
up to 130 people from 105, 
Investment is planned In 
research and development, 
new products are being intro- 
duced, engineers are being 
hired, and a modest drive will 
be made into export markets. 

The challenges faced by 
Caerbont and Alexander 
Ceramics are those of entrepre- 
neurs everywhere. High inter- 
est charges have (temporarily) 



Aflaon Knight, wtth aarthenwaro few Chrlrtma* maritot tvmthwibmm 


ceased to be a concern but 
sceptical banks, made cautious 
by the lending disasters of the 
1980s and focused cm security, 
are still a worry. 

For both companies the sup- 
port given by the DBRW has 
been important, a point also 
made by other companies mov- 


ing into the area, such as Bea- 
con Foods - which in less than 
two years has grown to supply 
a total of more than 5 tonnes a 
week of purged and peeled gar- 
lic, ginger and other products 
to food manufacturers and res- 
taurants from a factory in Bre- 
con - and Brook Thompson, 


which has been supplying gen- 
erating equipment for the 
plant hire industry, also from 
Brecon, since 1979. 

For many companies uncer- 
tainty over DBRW*s remit has. 
therefore, been a cause of con- 
cern. Under plans announced 
by Mr John Redwood, the 
Welsh Secretary, the board is 
retaining its promotional and 
development role but handing 
over its grant-giving functions 
to local authorities. A new 
grants administration struc- 
ture has yet to be put in place, 
however, causing some busi- 
nesses to put expansion plans 
on hold. 

The problems are being 
resolved but It Is a reminder 
that confidence can be fragile. 
The concerns of businesses in 
the area are important, too. 
because of the continuing size 
of the task in mid-Wales. Most 
of the successes have been In 

the eastern part of the region, 
closest to the English border, 
but high unemployment still 
affects the western parts of the 
territory, and In south Snow- 
donia a big gap In the local 
economy will be created by the 
closure of the Trawsfynvdd 
nuclear power station. 

More entrepreneurs will 
have to be encouraged to set 
up or expand businesses in 
these areas if the board’s objec- 
tive of bringing the region up 
to European Union levels of 
prosperity' are to be realised. 


The valleys 


Continued from previous page 

was opened with over 300 
places. At the southern end of 
the valley and dose to the M4, 
Navigation Park, a 15-acre 
business site, is befog devel- 
oped. Other money is goto g on 
land reclamation, tree plant- 
ing, refurbishing the honafog 
stock and improving the val- 
ley's principal town, Aberdare 
(where Grant Thornton, the 
accountancy firm, has been 
asked to investigate a contro- 
versial land deal). 

“We’re keen to improve the 
built environment quickly as 
quality sails,” says Mr Andrew 
Dakin, the WDA project direc- 
tor. “We are taking a holistic 
view on regeneration - if s not 
just factory bulldtog or jobs - 
it's everything nowadays." 

Mr Chris Burns, the council's 
economic development officer. 


is realistic. "The jury is out an 
us until we start to deliver the 
jobs. If we dnnt, then we have 
failed." But there Is confidence 
that the partnership is doing 
the spadework. Mr Dakin 
remarks: “In the property 
world some of the key players 
are starting to be aware of the 
existence of Cynon Valley - 
before, no one know” 

Mr Tony Roberts, the bor- 
ough council's chief executive, 
points to the kudos of the 
Royal Opera House siting its 
£4m scenery store near Aber- 
dare. 'They trawled the UK for 
a site," he says. "We're very 
competitive on grants and land 
prices and I think others will 
follow. We have the locations, 
communications, available 
land and factories, and labour. 
We have all the pieces of the 
jigsaw. We are now able to 
compete to the marketplace." 


Some distinctive schemes for supporting businesses - and communities - are examined by Rhys David 

Private sector helps to revitalise small towns 


Relocation 

Tor Business ft Commerce 

Newport is 
Leading Wales into Europe 

Irts a growing reputation as Wales' 

: has already attracted a number of 
I European Companies. Whjrf 



Gwent 

Tel: (Q&ifey 246906 
Fax:(0633)244721 



Five years after it was set up 
as a semi-autonomous unit. 
Business to the Community to 
Wales is finding there are 
activities and campaigns 
winch it can adopt in response 
to local issues which are not 
possible within the larger UK 
framework - as well as 
national schemes that are not 
appropriate to Wales. 

The main distinctively 
Welsh thrust has been towards 
building public and private 
links In a number of small 
towns through business part- 
nerships. A year ago BFTC was 
asked to help involve the pri- 
vate sector fn Llandudno 
which had been badly hit by 
floods. Following a number of 
meetings, the Aberconwy part- 
nership, under the chairman- 
ship of Mr George Newson of 
Quinton Hazell, the automo- 
tive components company, has 
been set up, with a brief to 
come op with ideas for strate- 
gic development of the town. 

A similar exercise is now 
being undertaken to Tredegar, 
south Wales. Businesses rang- 
ing in size from the self-em- 
ployed to more than 150 
employees were brought 
together in July under the 
sponsorship of Swalec, the 
Welsh utility company, to talk, 
with other local organisations 
and the local authorities about 
ways of revitalising the 
valleys town, and about the 
forms of co-operation which 
might best achieve this. 

The next step will be the cre- 
ation of a town forum which 
win give business m the town 
a vehicle for discussion with 
the public authorities. As in 
Llandudno, the aim is to 
develop a strategic partner- 
ship. 

In Caernarfon, where a £43m 
scheme to improve the urban 
environment is planned, a dia- 
logue has also begun, with the 
Welsh Office keen for the pri- 
vate sector to back up public 
sector pump-priming. At pres- 
ent, however, the local author- 
ities are expressing greater 
enthusiasm for an informal 
rather than a formal link with 
business. 

In education, B1TC in Wales 
has mobilised companies 
behind business-education 
partnerships. The Japanese, 
big investors in Wales, have 


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TtTTYN RHONWY 

THE EN^gNMENT .OF.TH&-EUTURE 

JpMMWkaaMiBHllHMnitfbv. 
as Bbmmw M bnaJAMta M Mmy MM a boot 1 * aM 

Miff* 




Sknon Knighton, cSrector of BITC in Wales 


heoi particularly supportive of 
Aim High, an educational ini- 
tiative which encourages 
young people to raise levels of 
achievement in education a nd 
training. Sony, Panasonic, 
Toyota, Brother, Hitachi, 
Aiwa, Hoya, Zeon and Takfcron 
are among the groups which 
have participated. 

Business leaders have also 
been taken, as to other parts 
of the UK, to see what is hap- 
pening on the ground, under 
the Seeing is Believing pro- 
gramme. A group of senior 
business leaders visited Car- 
diff earlier this year to be 
briefed on Trade 2000, a proj- 
ect for collecting and recycling 
old appliances, backed by 


ASW. the steel products group. 
As a result, other businesses, 
including Marks & Spencer 
and British Gas became 
involved. 

Similarly, the idea of profes- 
sional firms donating time has 
been adopted in Wales. In two 
years, services worth £175,000 
have been donated, and a new 
group for north Wales is being 
started. 

One of the big differences 
according to Mr Simon Knigh- 
ton, BTTC Wales director, fa 
the smaller number of big 
companies compared with 
some English regions, which 
as a result puts a bigger onus 
on the 50,000 small and medi- 
um-sized enterprises to Wales. 


What Wales does have, how- 
ever, is a separate political 
and government dimension 
and this, according to Mr 
Knighton, can shorten commu- 
nications and expedite action. 
The move to unitary authori- 
ties in Wales under local gov- 
ernment reform is also seen as 
likely to make it easier for 
companies to become involved 
in working with the commu- 
nity. There is overlap, how- 
ever, between the aid and sup- 
port agencies, which he 
believes needs to be rational- 
ised. 

At a much more local level 
another organisation, Aber- 
gavenny-based Comm unity 
Enterprise Wales (GEW) co-or- 
dinates the work of groups 
and individuals seeking to 
develop common ity-based 
enterprise activity. Such busi- 
nesses, which must be owned 
and controlled by the local 
community, can be service or 
manufacturing operations, and 
examples within Wales include 
a local supermarket, cinemas, 
printing and publishing, cater- 
ing and childcare. 

For a small fee the 130 
groups to membership - the 
target is mare than 300 by the 
end of the current financial 
year - gain access to advice 
and information and to 
courses and seminars run by 
CEW, which is funded by a 
three-year grant from the 
Welsh Development Age ncy. 
Just as importantly, CEW ads 
as a voice for community 
groups and lobbies for them. 



WE'RE PUTTING ALL OUR 

WELSH FOOD IN ONE BASKET 

i Mm 


aybe not a good idea when it’s 
just eggs, but when you're talking 
about an extensive range of products 
which include Welsh Lamb and Beef, 
cheeses, seafood, waters, wines, honeys, 
- mustards and ice creams, it makes sense 
to brand them for mass market appeal. 

That's why the Taste of Wales 
dragon branding is being strongly 
encouraged by Welsh Food Promotions, 
the organisation formed to assist 
everyone with an interest in Welsh 
food, from the farmer to the family. 


Whether you've got an idea for a 
product you'd like to get moving or you 
manage a retail multiple that wants to 
source a unique range of quality Welsh 
foods, Welsh Food Promotions can put 
the right package together for you. 



H you'd Bko to know more. eo<rrt*ct 
Wefah Food Promotions. 
Cardiff Business Technology Centre, 
Senghennydd Road, Canfiff CF2 4AY. 
Telephone 0222 640456. 


Some of the most successful 
enterprises have been estab- 
lished in the south Wales 
valleys where local groups 
have come together to bring 
back into community use for- 
mer miners' and workmen’s 
halls, and to provide speci- 
alised transport services for 
the disabled and elderly. Other 
businesses have been set up to 
recondition white goods so as 
to provide low cost products to 
low income families, and reno- 
vate old buildings. In some 
places community businesses 
are managing workspace, 
thereby helping to create fur- 
ther jobs. 

Close links have in many 
cases been established with 
local authorities which have 
seen the community busi- 
nesses as a way of creating 
jobs and bringing back self-re- 
spect to areas suffering from 
the decline of traditional 
industries. 

In central Cardiff, Packet 
Promotional Services, a com- 


pany set up with local author- 
ity help, has created jobs for 
people with learning disabili- 
ties, pwplring promotional lit- 
erature for a big national 
group, while on the dty’s Ely 
Estate businesses repairing 
garden tools and upholstery 
have been created. In nearby 
Barry, an area badly affected 
by closures in the chemical 
industry, a community enter- 
prise is providing catering at a 
South Glamorgan county 
council leisure centre. 

“We look to see what local 
services can be provided to get 
the economy going again. Peo- 
ple gain gkfii« which they can 
use in the community and 
their friends and neighbours 
are encouraged to do like- 
wise,” Mr Peter Lewis, finance 
director of CEW, observes. 
“Local authorities now see 
this as a way of delivering 
part of their economic develop- 
ment strategy and of helping 
the most marginal communi- 
ties.” 



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32 


FINANCIAL. TIMES WEDNESDAY SEPTEMBER 7 1994 


COMMODITIES AND AGRICULTURE 


Lead reaches two-year 
$625 a tonne LME high 


Maize shoots on the acid savannah 

John Madeley on a new grain option for the ranchers of Colombia and South America 


By Kenneth Gooding, 

Mining Correspondent 

Lead prices reached a fresh 
two-year peak on the London 
Metal Exchange yesterday. 

Used mainly in batteries, 
lead already is the best-per- 
forming LME metal since 
world economic recovery 
began. 

Its price has risen by more 
than 70 per cent from the bot- 
tom of the trough in October 
last year from US$357 a tonne 
to $625 at one point yesterday. 


By Kenneth Gooding 

Rio Algom, the Canadian 
diversified metals group, 
already has decided to boost by 
50 per cent production from its 
US$290m Cerro Colorado cop- 
per mine in Chile - which 
began commercial production 
only in June. 

This year Cerro, located 2,600 
metres above sea level in the 
Atacama desert 12Qkms east of 
the port of Iquique, will pro- 
duce 40m lbs of copper. Next 
year output rises to 90m lbs. 

Mr Colin Macaulay, presi- 
dent, said in London yesterday 
that Cerro was built with 
expansion in mind and by 1996, 
by spending only another 
US$50m, Rio would lift annual 
output by half from the pres- 
ent design capacity to more 
t-.han 130m D)S. 

“We could not have brought 
Cerro into production at a bet- 
ter time," he said because all 
the indications were that cop- 
per prices would remain rea- 
sonably high for the next two 
years. 

However, Rio was primarily 
focused on keeping production 
costs down well below the 
industry average and Cerro, by 
using the low-cost solvent-ex- 
traction, electro- winning 


LME WIMMOUB STOCKS 

{Aa at Monday's do m) 
tomes 


Afcntohsn 

-MSS 

to 2.430.400 

Almtoken afloy 

-eo 

tox&aao 

Capper 

+450 

to 387300 

Lead 

+50 

to 384.725 

r+c**< 

+990 

ID 140034 

2nc 

+3,600 

to 1.132375 

Tta 

-180 

to 31370 


away when LME copper prices 
began to slide and lead for 
deliv ery in three irnmths emfari 
$2.50 down from Monday’s 
dose at $619. 

Mr WIktor Bi el ski, analyst at 
Rain & Co., pointed out that 


(SX-EW) technology, would 
produce cathode copper for 
about 53 cents a lb unto the 
expansion was completed when 
costs would Call to about 50 
cents. 

Rio is one of the mining 
industry's most consistent 
profit makers but its main 
source of income until recently 
came from the Elliot Lake, 
Ontario, uranium mines. 
Before Cerro started produc- 
tion. all of Rio's copper - 116m 
lbs last year - came from a 
one-third stake in Highland 
Valley Copper of British 
Columbia. Highland's cash 
costs for cathode copper are 
about 62 cents a lb. 

Rio first took an option on 
Cerro from a Japanese explora- 
tion group in the early 1980s 
and intended to develop a mfr»» 
in partnership with Outo- 
kumpu of Finland. But the cop- 
per price plummeted and Outo- 
kumpu's unions objected to it 
operating in a country which 
then was a right-wing dictator- 
ship. 

“That was fortunate because 
then the new SX-EW technol- 
ogy came along which doubled 
the size of the reserves, is 
much cheaper and c Leaner." Mr 
Macaulay recalled. 

RTZ, the world’s biggest min- 


seasonal damawd from the bat- 
tery producers, who account 
for more than 70 per cent of 
lead demand, was helping 
tighten the market, as was a 
fall in exports from China, Rus- 
sia and Kazalrhcfgn Mr Nick 

Moore, at Ord Minnett, 
suggested lead was on course 
for a 25 per cent rise from last 
year’s average price of $529 a 
tonne to an average of $661 in 
1994. 

He said: “The fundamentals 
of the market continue to print 
to an exciting price future for 
lead." 


mg company which once con- 
trolled Rio, also had designs on 
Cerro. But when RTZ sold to 
the public its 51 per cent stake 
two years ago because of grow- 
ing conflicts of interest, “it 
could not find a legal way to 
take it away from us." said Mr 
Macaulay. 

The impact of Cerro on Rio 
can be judged by the compa- 
ny’s sensitivity to the copper 
price - it does no forward sell- 
ing or hedging but all produc- 
tion is pre-sold to Japanese and 
German customers on terms 
based on the market rate. 

At present a 10 US cents a lb 
change in the price affects 
Rio’s earnings by 19 cents a 
share. This will increase to 31 
cents a share in 1996 and to 38 
cents in 1996 after the expan- 
sion. 

Mr Macaulay said Rio was 
exploring for more copper in 
Chile and, like most other cop- 
per producers, was talking to 
Codelco, the state-owned group 
there, about possible joint ven- 
tures or taking over some prop- 
erties. But this was a slow pro- 
cess because it was politically 
difficult for the Codelco man- 
agement and the Chilean gov- 
ernment which faced strong 
union opposition to such 
moves. 


Tm so excited, I feel drunk 
just looking at it", said a 
farmer of fiat land in eastern 
Colombia as he looked at a 
crop of maize pushing its way 
through the sod. 

For the farmer this was the 
first time that a crop had ever 
grown on his acid and mftwHi^ 
soil which is typical of South 
America's vast savannah 
lands, traditionally used only 
for cattle ranching. 

Seventeen years of research 
by the Cali-based International 
Centre for Tropical Agriculture 
(CIAT) a nrt th e Mexican-based 
International Mhwp nnri Wheat 
Improvement Centre (CIM- 
MYT) has led to the develop- 
ment of a maize variety that 
grows in savanna soils. 

Called "Sikuani” after the 
namo of a Colombian tribe, Hk* 
new variety could increase the 
productivity of savannah land 
by allowing farmers to ranch 
cattle and to grow a crop. 

Dr Shivaji Pandey, a CZM- 
MYT plant breeder, says: "This 
revolutionary make tolerates 
acid soils planted with 
Improved pasture, Sikuani also 
improves the soli quality, brae- 
fitting the pasture or subse- 


By Christopher Brown-Humes 
in Stockholm 

Leading Nordic pulp producers 
have announced their fifth 
increase in prices this year 
because of continuing wood 
shortages and strong demand 
from paper producers. 

Their move will lift the price 
of northern bleached soft wood 
kraft (NBSK) pulp, the indus- 
try staple, to $700 a tonne from 


^RobolGUMns 
in Montreal. 

Members of the IWA-Canada 
walked out at a big Interna- 
tional Forest Products saw mill 


quent crops too". 

S cientis ts developed the new 
variety with gennplasm - or 
genetic material - from 
Bolivia, Brazil, Colombia, 
Indonesia, Mexico, Peru, Thai- 
land Venezuela. 

The Colo mbian Institute of 
Agriculture, the national agri- 
cultural research body, and its 
semi-private branch, the Col- 


It offers South 
American savannah 
farmers a much 
higher return from 
their land than just 
ranching cattle 


omhian Corpor a tion of Agricul- 
tural Research (CORPOICA), 
acirpri i 5 Colombian farmers to 
test RTVnumj in their fialris. 

The result was that the vari- 
ety yielded an average of 3 
tons a hectare in the arid soils. 
While this might be considered 
low on fertile soils, it offers 
South American savannah 
fanners the chance of a much 
hi gher return from their land 


$630 a tonne and will take 
effect over the next few weeks. 
It means prices have risen by 
80 per cent from a low of $390 a 
to nne at the end of last year. 

Finncell, the Finnish market- 
ing organisation, led tVw» latest 
round of price rises, but it has 
since been followed by several 
Swedish heavyweights, includ- 
ing Store, Europe's largest for- 
estry group, and MoDO. 

There is every sign that the 


at Coquitlam, B.C. saying they 
were angered by the forest 
industry's offer of a 6 per cent 
pay increase over three years. 

The luggers and saw mill 
workers last week lodged a 


than just ranching cattle. 

Dr Ral Vera, lead er of C IATs 
tropical lowlands programme, 
says: "Planting Sikuani in the 
savannas will have a revolu- 
tionary effect 

A new economic option, a 
new way of working. Fanners 
will see that integration of 
cropping and ranching can 
make the whole system more 
productive. Fanners willing to 
experiment were the final deri- 
sive factor in producing this 
variety". 

Two years ago CIAT scien- 
tists developed a rice variety 
that will grow in acid soils. 
Savannah farmers now have 
options they could only dream 
of until recently - to plant rice 
or maw, or both, on their land 
to complement their cattle. 

The new maize will grow in 
about 125 days and will give 
farmers the opportunity to 
plant two crops a year - from 
September to January and 
March to July. While same of 
the maize produced on the 
savannahs win be marketed for 

human rmn ai m p Hnn, cnmp. will 

also be used for cattle feed in 
the dry season. This will mean 
that savannas farmers do not 


increases will be accepted, sug- 
gesting North American pro- 
ducers will push up their 
prices to tiie new levels. 

The latest rise has been 
driven by shortages of wood, 
which are bolding down pulp 
miff operating rates, and a big 
rise in dpmand for fine paper 
on the back of the recovery in 
the worldwide economy. 

Mr Denis Christie, pulp and 
paper analyst at James Capel 


demand for 18 per cent over 
three years. 

IWA-Canada negotiators said 
thi« was a bargaining position 
and demanded a serious 
counter offer this week. Talks 


have to purchase maize from 
outride sources. 

The opportunity to use a 
crop-pasture system could 
open the way for an increase in 
both crop and livestock pro- 
duction on South America’s 
savannahs which cover almost 
half the continent’s agricul- 
tural land. Especially 
prominent in Brazil, Colombia 


On poor soils, 
changing to a 
crop-pasture system 
offers them a real 
hope of increasing 

earnings 


and Venezuela, savannahs 
are one of the last areas 
in the world not exploited by 
formers. 

"The savannahs represent 
most of the area in the world 
that can be expanded for agri- 
culture", said CIAT scientist 
Dr Richard Thomas. 

Scientists point out that, 
although there are large farms 
on the savannah lands, there 


in London, said wood produc- 
ers were diverting timber to 
the saw mill industry, where 
prices have risen sharply, and 
withholding supplies to pulp 
mills in anticipation of Higher 
prices. 

He added that market pulp 
volumes had risen 5 per cent 
this year - around three times 
the normal annual level - 
partly because of stockbuild- 
ing- 


are now expected to restart on 
TTiursday. 

The union is armed with a 
strike mandate and more tniii 
walk-outs are possible this 
week. 


are also many small fanners 
who make only a meagre living 
on the poor soils and that 
changing to a crop-pasture sys- 
tem offers them a real hope of 
increasing their earnings. 

There could also be environ- 
mental benefits. Many savan- 
nah pastures are overgrazed 
and a crop-pasture system 
could mean that farmers 
reduce their stocking densities 
and farm their land on a more 
sustainable basis. 

Also, farmers whose land is 
more productive could be less 
tempted to expand into forest 
areas and remove trees for 
agriculture. 

CORPOICA released the new 
maize variety to farmers In 
Colombia at the end of July. If 
savannah fanners become con- 
vinced of the benefits of both 
keeping cattle and growing 
in.ii7p on their land, the prob- 
lem could be that not enough 
Sikuani seed will be available. 
Two Colombian seed compa- 
nies. and also CORPOICA, are 
planning to produce and mar- 
ket seeds of the new variety, 
which is also being tested in 
Brazil. Ecuador, Peru and 
Venezuela. 


Russian 
private 
grain output 

Russian private fanners are 
expected to harvest 10m tonnes 
of grain this year despite a 
shortage of fuel and agricul- 
tural equipment, the head of 
the private fanners’ associa- 
tion AKKOR said on Tues- 
dayjleuter reports from 
Moscow. 

"For the first time since 1917, 
private fanners will export 
grain to foreign countries," Mr 
Vladimir Bashmachnikov said- 

Private farms produced 
about 5m tonnes of grain last 
year out of total output of 
99m. tonnes. 

Officials have forecast this 
year’s total grain harvest at 90- 
100m tonnes. 


However, buyers backed 

Rio Algom to boost copper 
at Cerro Colorado by 50% 


Nordic pulp producers set price increases 


Canadian saw mill workers reject 6% offer 


COMMODITIES PRICES 


BASE METALS 

LONDON METAL EXCHANGE 

(Prices from Amalgamated Metal Trading) 

■ ALUMINIUM, Ml 7 PURTIY (S per tonne) 


Precious Metals continued 

■ GOLD COMEX (100 Troy obl; Vtroy oau) 


GRAINS AND OIL SEEDS 


SOFTS 

■ COCOA LCE (fi/fapna) 



Cash 

3 tilths 

Cta» 

1533-34 

1558-58 

Previous 

1534-35 

1550-60 

Hgh/tow 

1538 

1571/1557 

AM Official 

1537-38 

1563-633 

Kerb dose 


15603-613 

Open UiL 

277.952 


Total dariy turnover 

35.154 


■ ALUMNUM ALLOY (S per tonne) 


Close 

1550-55 

1570-76 

Previous 

1550-60 

1570-80 

H>gtV!ow 


1575 

AM Official 

1553-56 

1570-75 

Kerb doao 


1575-80 

Opon nL 

2.923 


Total defy turnover 

410 


■ LEAD <S per tonne) 


Close 

604.5-53 

618-20 

Previous 

609-11 

621-22 

High/iow 

611.5/611 

625/817 

AM Official 

611.5-12.0 

622-22.5 

Kert> close 


820-1 

Open Inf 

41. J37 


Total daily turnover 

8.411 


■ NICKEL (S per tonne) 


Oose 

6230-35 

6325-30 

Previous 

6210-15 

6305-10 

High/iow 


6410/8310 

AM Official 

6255-60 

6350-53 

Kerb dose 


8325-30 

Opon mL 

53.46/ 


Total <savy Turnover 

15,741 


■ TM (S per tome) 



Close 

5310-20 

5365-70 

Previous 

5305-5310 

5365-75 

HgfVlow 


5380/5360 

AM Official 

5295-300 

5368-70 

Koft> tkw 


5380-90 

Open ira. 

17.580 


Total daffy turnover 

3,944 


■ ZINC, special high grade (3 per tonne] 

Close 

9653-66.5 

960-69.5 

Previous 

974-75 

997-98 

high/low 


999/986 

AM Official 

9693-703 

993-84 

Kerb close 


991-2 

Open tra. 

38.625 


Total daily turnover 

18399 


■ COPPER, grade A (S per tome) 


Ck»D 

2482 -S3 

3497-98 

Previous 

2476.5793 

2494-943 

ttflh/tow 


2516/2435 

AM Official 

2486-89 

2503-4 

Kerb dose 


2494-95 

Opon LnL 

220324 


Total daly turnover 

48.823 



■ LME AM Official C/S rata; 1.5409 * 

LME Ctaetag E/S rate: 1 .5466 

Spot 134*6 amncLSW 6 Wtal.5434 9 irate 1.5386 

■ HIGH GRADE COPPER (COMEX) 



Oose 

Her* 

change 

M* 

tow 

OpM 

tot 

Vei 

S«P 

11630 

+035 

11720 

11X10 

7330 

78S 

Oa 

115.45 

+005 

115.40 

115.40 

1085 

215 

Nov 

115.50 

+025 

11520 

11500 

G15 

44 

Dec 

114 75 

+025 

11530 

11430 

34383 

6.156 

Jan 

114.25 

+025 

- 

- 

535 

56 

M 

11175 

+025 

- 


315 

92 

Total 





51331 

7,774 


PRECIOUS METALS 

■ LONDON BULLION MARKET 

iPricaa suppled by N M Rottocfildi 


Gold (Troy oz.) 
Oow 
Opermg 
Morning lb 
Aflemoon fb 
Day's High 
Day's Law 
Pluvious dose 


S puce 

387.40-387.90 

387.60-388.00 

387.80 

387.00 

388. 10- 388. SO 

387.30-387.80 

387.00-387.40 


E equnr. 


250598 

260223 


Loco Ufa Mean Gold Lending Rates (Vs 


MEAT AND LIVESTOCK 

■ uvEggnzaNjggGaitojgN 



Sen 

Day* 



Opeo 



sea 

Beyl 



0PM 



sea 

Ob* 


Opm 



Sett DteTS Opto 



price 

change 

If* 

taw 

tat 

tat 


price 


M0 

Low 

tel 

W 


pria 1 


Mgh 

Low M 

M 


price Change M* tear tt 

M 

Sep 

3873 

+03 

• 

- 

- 

- 

Sap 

105.75 

+030 

10575 

10535 

233 

34 

SIP 

945 

-1 

949 

944 175 

73 

Oct 

71350 -O.T25 71375 71375 35.303 

4387 

Od 

3882 

+03 

3893 

3883 

>.138 

224 

Be* 

10030 

+030 

10630 

10650 

2348 

110 

Dec 

979 

-8 

981 

973 32717 4306 

Deo 

68375 +0250 70325 69360 17236 

1344 

Nov 

3907 

+03 

- 

- 

- 

- 

Jaa 

10835 

+030 

10830 

10830 

1.784 

104 

ter 

1010 

-8 

1019 

1007 322» 

1319 

R* 

66600 +022S 66900 66660 11387 

611 

Dec 

-HP? 

+03 

3923 

8913 90701 

16265 

Star 

11075 

+030 

11075 

11030 

1.137 

34 

■*J 

1023 

-9 

1030 

1022 1X121 

201 

Apr 

70450 +0250 70300 70.150 7,885 

250 

Feb 

385.4 

+03 

3857 

3952 

1X327 

93 

■re 

11230 

+055 

11230 

11230 

1.121 

91 

-M 

1037 

-9 

1050 

1036 5^22 

156 

Jm 

67450 +0200 67450 67.150 1322 

42 

Apr 

3807 

+03 


- 

8371 

14 

JU 

11430 

+070 

11430 

11430 

177 

30 

Sto 

1080 

-10 

1062 

1050 9,132 

555 

Al« 

67.100 +0.160 67.100 66750 864 

9 

Total 




157397 1S099 

Total 





B3B0 

493 

Total 




1B23B0 7 3U 

TeW 

75363 

7445 

■ PLATMUM NYMEX (50 Trey MU S/troy at) 

■ WHEAT COT (5200bu min; cerfe/HXb bushel) 

■ COCOA CStt (10 torem S/tonm* 


■ UVE HOGS CME (40.000fas; certo/ba) 



oa 

421 2 

+14 

4243 

4203 183«0 

33*3 

jae 

425.0 

+2.4 

4273 

42SJ) 

5,751 

1.088 

Aw 

4269 

♦2.4 

4313 

429l5 

1352 

80 

JN 

432.4 

+24 

- 

- 

452 

77 

oa 

4343 

+24 

- 

- 

102 

- 

TaW 







■ PALLADIUM NYMEX (100 Trey oa^SArey ok.) 

Sto 

153.75 

335 


. 

177 

39 

Dee 

1552 

-035 

15675 

15430 

5,489 

2S4 

Bar 

156.75 

-005 

15530 

15530 

728 

B6 

Total 





M& 

440 

■ 80.VER COMEX (100 Tray oz.; Cents/tray at) 

Sap 

5463 

+47 

5483 

5443 

1.037 

238 

oa 

5403 

*43 

- 

- 

9 

2 

Nov 

5513 

+43 

- 

- 

- 

- 

Dec 

5533 

+4.6 

5563 

5483 83368 16,108 

Jm 

wq 

+43 

- 

- 

S7 

3 

Mar 

5613 

+43 

5615 

557+5 

6381 

180 


ENERGY 

■ CRUDE OIL NYMEX (42000 US gate. j/banri) 



Latest 

Ikqri 


Opn 



price 

daoge 

M* 

law M 

M 

oa 

1734 

■0.18 

1739 

17.11 04291 

26.151 

Nov 

17.+6 

-612 

1730 

1721 60332 

13.708 

Dec 

1734 

-007 

1739 

1730 50399 

8745 

Jm 

1730 

-034 

17.93 

17.40 32367 

1381 

Mr 

1733 

-032 

1733 

1735 19363 

779 

tar 

1730 

-027 

1730 

1735 14,790 

214 

TeW 




SXB2 543W 

■ CRUDE OH. IPE (S/barreQ 




Uriea 

Ore 4 * 


Opto 



pte 

tetooe 

Mpb 

low la 

VM 

oa 

1609 

+0.14 

1614 

1530 61.166 11325 

NO) 

1625 

+012 

1829 

1635 39393 

8324 

nee 

1635 

+0.10 

1637 

1620 20344 

1351 

Jan 

1639 

+612 

1639 

1623 6375 

215 

Feb 

1623 

•60S 

1623 

1623 4.789 

355 

Mar 

1626 

- 

- 

- MSI 

74 

TeW 




147,713 20268 

■ HEATING Oft. NYMEX (42300 US p&i c/US gatt) 


l.-tost 

ore's 


Open 



price 

ctoage 

«Bfi 

lew tel 

M 

oa 

4930 

-612 

4675 

4835 41327 

16308 

Nov 

5030 

-607 

5035 

49.80 19.724 

2325 

Ok 

5135 

+601 

5130 

5065 38305 

5281 

Jm 

5220 

-604 

5225 

51.75 21311 

2355 

Mi 

5230 

+038 

5230 

5230 9.725 

741 

kk w 

51.90 

+621 

522D 

5120 0373 

796 

Tetri 




760,300 

■ OAS06K|Sbn| 




Uteri 

Daf> 


Opao 



price 

chnQQ 

■** 

lew M 

va 

Sap 

15130 

+200 

15130 

14650 23390 

■ism 

oa 

154.75 

+230 

1552S 

15130 252*5 

43*3 

NOV 

15725 

+230 

15725 15430 12377 

1352 

Dee 

15875 

+223 

15675 

15630 16940 

1349 

Jm 

16030 

+225 

16600 

15730 12371 

822 

Feb 

16025 

+230 

18025 

15825 4388 

31 

Total 




1063® 14,107 

■ NATURAL GAS NWBE (10300 Rmteu SftnnSta.) 


Latest Day 1 * 


Od 

Ho* 

Doc 

As 

Feb 


156b *0.805 

izia +0.002 
2830 -0002 
2865 -0.010 
2815 

1.980 4O0D8 


1-5W 
I .SIS 
2.(U0 
? nan 
2015 
1-980 


Open 

ht 

1530 29,444 
1.790 17.340 
2020 24383 
2805 14335 
2010 11667 
1370 UBS 


7.799 

2521 

1308 

1,487 

1.123 

273 


148382 1SJE7 


m UNLEADED GASOLINE 
IffMB (4200Q US gefc.cftBoabj 


2 months 

4.34 12 months 

4.90 


Latest 

Day* 


3 months 

—4.38 



price 


a* 

Steer Rn 

prtray 02. US ds eate. 

oa 

4735 

-040 

4610 

Spot 

351.40 

54330 

tee 

4730 

-039 

4730 

3 months 

355.85 

55000 

Dee 

54.15 

-02* 

54.15 

6 months 

381.00 

557415 

Jan 


+0.01 

5X6S 

1 year 

374.10 

57336 

Feb 

sun 

-61* 

■ann 

OoM Coins 

S price 

E eqriv. 

ter 

5150 

-054 

5X50 

Krugerrand 

392-395 

254-257 

Total 




Map to Lori 

39735-40035 






New Sovereign 

90-93 

58-61 






Lew M W 


1288 125 

432 52 

63808 1*048 


3700 

+sn 

3720 

3B5M 

13B1 

918 

Stt 

1265 

-41 

UE 

1263 

121 3 

oa 

30075 +0900 36200 37.750 12306 

2378 

3850 

+m 

3880 

379/6 48563 

8372 

Dec 

1325 

-27 

1331 

1310 42309 2390 

Dm 

40300 +0575 46100 36090 

9395 

1363 

389/4 

+20 

3800 

365/4 

15384 

1375 

ter 

1370 

■27 

1378 

1357 

12,748 1.180 

Fed 

40325 +1400 40.150 36450 

330* 

448 

3000 

+1/0 

3820 

377/2 

1378 

217 

■re 

1400 

-25 

1404 

1388 

33*9 17 

AW 

36000 +4L100 36450 30300 

130* 

120 

356/2 

+1/6 

3570 

361/4 

2322 

593 

M 

1422 

-25 

1438 

1415 

2371 

Jm 

44350 +1200 44300 46925 

616 

65 

3590 

+1/6 

' 

’ 

4 

10367 12313 

tep 

Total 

1442 

-25 

1447 

1447 

1305 

71/B7 vre 

Aag 

Total 

4X050 +1090 4X050 42300 

75 

27372 

17 

43» 


■ MAIZE C8T (5300 bu min; oarrtaAMto buahe* 

5* 228/4 +318 227/4 222/0 10389 4,433 

0k 22B/S +310 227/0 223012*127 12322 

ten- 29510 +2/4 23812 292/4 291379 1.487 

N>y Z41£ +2/0 241/9 23BN 11,797 228 

Jut Z4SA> +W 248/0 242/6 12897 948 

SK 247/4 +QM 248/0 246/4 888 50 

tow isayoa 1937s 

■ BAmey ICE C per tonne) 


■ COCOA PCCG) (SORVtonna) 


108350 18338 Jm 


Sep 

10170 

+120 

103-70 

10330 

68 

. 

He* 

104.70 

♦050 

104.70 

1IK80 

512 

11 

Jm 

10690 

+6ffi 

10690 

10650 

331 

21 

Her 

10675 

+625 

10175 

10650 

62 

30 

tei 

11640 

-610 

- 

- 

21 

• 

Tan 





994 

62 

■ SOYABEANS CBT (5308U RWe cenMte MM 

sra 

58¥4 

+7/4 

5S3M 

576/0 

5380 

1348 

Nov 

582/6 

♦7/2 

567/0 

573/0 76302 

1X222 

ton 

389/G 

♦MJ 

594/4 

581AJ 13359 

918 

ter 

avani 

+7/2 

602/0 

590/2 

63*8 

7B8 

te» 

BOG* 

+7* 

BQ7A1 

596/4 

4355 

483 

Jri 

609/4 

+6/2 

613/0 

sn/4 

7300 

585 


TM 118384 17388 

■ SOYABEAN OIL CBT (SO.OOaba: centsrib) 

Sep 2539 +039 2&13 2554 8340 3382 

Od 2533 +031 2592 2535 17382 3318 

Ok 2542 +038 2587 2503 35306 7,138 

Jm 2522 +030 2545 24.90 5384 707 

Mar 2500 *033 2525 24.73 5915 724 

■toy 2*35 +023 2500 2435 4353 303 

Tom 81307 15483 

■ SOYABEAN MEAL C8T (100 tone; Stop) 


Sap 

1753 

+2 2 

175l7 

17X4 

9381 

2302 

oa 

17X8 

+13 

17X8 

1717 

1X243 

1388 

Dec 

174.7 

+23 

17X4 

171.4 36351 

3382 

Jm 

1753 

+13 

1762 

1723 

7.112 

527 

ter 

1783 

♦13 

1717 

1753 

73*4 

639 

tey 

1793 

+1.7 

1803 

1768 

4343 

180 

TaM 





01379 11128 

■ POTATOES LCE p/tame) 




NM 

1500 

. 

. 

. 

. 

. 

ter 

1053 

- 

. 

. 

- 

. 

Apr 

2265 

+5.7 

2323 

wen 

1306 

174 

■re 

2400 

• 

• 

- 


- 

Jun 

1073 

. 

. 

- 

- 

- 

Total 





1388 

174 

■ FRBOHT (BFFEX) LCE (SKMmfcn pobri) 


Sre 

1490 

+10 

1490 

1485 

588 

27 

oa 

1505 

-1 

1505 

1495 

862 

41 

Hoi 

1488 

-2 

1498 

1435 

45 

5 

Jan 

1490 


I486 

1485 

554 

24 

Apr 

1490 

+s 

1490 

1485 

281 

11 

ja 

1375 

-8 

- 

- 

B0 

- 

Total 

On* 

Frar 



2310 

108 

BH 

MSB 

1450 






European bee motet. Irani Metal Britettn, $ 
per to In warehouse, uriesa otherwise dated 
(last week’s in teadeets, where changer*. AnB- 
mory: 99.6%. S per tonne, 50803300(5350- 
6,450). Btamutte 11*1. 99.99%, tame Ion 3.70- 
4.00 (3.80-4.26). Cwfcnhm: min. 90.6%, 
125-140 cento a pound. Cobalt: MB frte mar- 
ket. 903%, 2330-2430 (22.75-23.50* 993%. 
2030-20.85 (1930-2030). Merawr min. 
89.99%. $ per 78 fe Bask. 110-120. MdyMo- 
nunx drummed maiyfadlc oxide, 3.80-3.85 
(930-336). Quintero n*i 993%. 335-435 
Tungsten era: stendwd mta. 65%, S per tonne 
int (10kg) WO. ctf, 37-47. Vrare d faro min. 
96%, elf. 1.40-1.50. Urwrfvm; Nuexeo 
exchange value. 7.10. 


9ap5 

■ COTS LCE (JAxme) 


Me. Ay 

102502 


Sgi 4043 +78 4043 3950 3348 508 

Itav 8081 +83 1989 3860 183*0 X0Q7 

JM 380 +86 3605 3910 >24256 1,0*6 

ter 3838 +89 306 370 5338 566 

teg 3776 +52 3775 3785 1,484 17 

Jri 3783 +40 3788 3720 36 239 

Total 38334 3,+Hl 

■ COdB *C CSCE tfSTJSOKHoK centsAbe) 

sre 

21230 

+115 21X50 21000 

267 

54 

Dm 

217.70 

+730 21830 21800 22047 3018 

Ho 

21615 

+800 

n 

5 

R 

21650 

8084 

191 

tey 

21990 

+800 

21900 

21690 

3015 

a 

Jri 

22030 

+600 


22030 

708 

29 

Eep 

221.70 

♦600 

221 JO 

22190 

411 

16 

Total 





344*8 

30H 

■ COFTEEpCO)(USceras/*Joun«9 



*res 



Price 


Pram, 

re 











■ N07PRBSUM RAW SUGAR LCE (cent&flbs) 

oa 

1230 

-ai4 

. 

- 

1301 

. 

Jm 

1132 

- 

- 

- 


• 

Hr 

12.17 

-007 

- 

- 

90 

- 

Tetri 





13*1 

- 

■ WIMTE SUGAR LCE (S/farrw) 



oa 

32130 

-230 

32X40 

32100 

8020 1013 

Dec 

31680 

-270 

32180 

31600 

2001 

368 

lte 

31660 

-130 

32050 

31730 

6121 

394 

■re 

31B30 

-130 31700 31790 

553 

4 

Aeg 


+000 

- 


3SB 

w 

oa 

30530 

-100 

w 

- 

206 

- 

Total 





17059 2077 

■ SUOAR *11' CSCE (112420008; eerttftn) 


oa 

1190 

■114 

1199 

1179 48060 XI 81 

Hr 

1201 

-008 

1206 

1138 62049 2020 

■ay 

1196 

■a® 

1201 

1194 

10095 

318 

Jri 

1138 

-ai2 

1105 

1130 

4J72 

216 

oa 

11J0 

-113 

11 JB 

1138 

1050 

20 

■tar 

1131 

+002 

11.42 

1100 

488 

20 

Tetri 





12304 8061 



oa 

8835 

-125 

7046 

SIS 

X7B3 

264 

Bee 

6631 

-123 

6909 

6635 

Z7071 

J3S7 

ter 

70.18 

-122 

70S 

6175 

9,166 

458 

■re 

71 JO 

■030 

7190 

71.15 

4071 

312 

Jri 

71.70 

-025 


- 

X4*5 

3 

oa 

6930 

■130 

7006 

7005 

414 

1 

Tetri 




51034 4^30 

■ ORANGE MCE NYCE (164200KB; certste^ 

Sep 

8670 

-43D 

9140 

8660 

833 

573 

Nor 

enen 

■4.10 

9400 

30J0 

8031 

908 

Jaa 

9435 

-430 

97 J3 

0435 

4.735 

229 

ter 

96X2 

-X45 

01.10 

atm 

2010 

189 

tey 

10135 

-120 

102JS 

0X75 

856 

7 

M 

1044)5 

-X70 

<am 1(2590 

471 

B 


Tate 


16*81 1/021 


VOLUME DATA 

Open Interes t end Volume data shown far 
contracts traded on COMEX. NYVEX, CUT, 
NYG£ CUE. CSCE and IPE Crude 01 are ana 
day in oncers. 


INDICES 

■ REUTERS (Baaa 18^31-100) 

so yew ego 
16002 


Sep 8 Sep 5 

20933 20854 20852 

■ CBS Futures (Been: 1967-100) 


■ PORK BHOJES CME (40.000foa: canta/lbs) 

m 


42375 -0200 4X800 41329 
*2050 -0400 4X300 41300 
4L700 -5425 4X500 4X500 
44390 -5050 44350 44300 
<0250 +0376 43250 4X280 


7385 1316 
463 83 

84 IS 
144 11 

31 7 

8307 1325 


LONDON TRADED OPTIONS 

ttrtte prtoe $ tonne — Caps — — Put* — 


(99.7%) LME 

oa 

Jan 

oa 

Jen 

1500 

80 

106 

16 

40 


50 

92 

24 

50 

1550 

38 

70 

35 

61 

■ COPPER 





(Grade A) LME 

oa 

Jan 

Oa 

JWi 

2400. 

110 

140 

17 

58 

2450 

75 

117 

32 

79 

2500 

48 

sa 

56 

103 

■ COFFEE LCE 

Nov 

Jan 

Nov 

Jri) 

3000 

447 

529 

94 

241 

3050 

412 

SOI 

109 

283 

3700 

379 

474 

126 

286 

■ COCOA LCE 

Dec 

Mar 

Dac 

Mar 

1000 

49 

88 

70 

78 

1050. 

32 

88 

103 

108 


21 

60 

142 

140 

■ BRENT CRUDE PE 

oa 

Nov 

oa 

New 

1000 _ 

16 

- 

68 

41 

1650 

3 

64 

- 

- 

1700 

1 

31 

141 

- 


LONDON SPOT MARKETS 

■ CRUDE OIL FOB toerbanei/Oct) -or 


Dubai 

J15.1B*4«t 

+1280 

Brent send (dated) 

*1535-607 

+03® 

&ort Blend (Od) 

$1 604-606 

+0-425 

W.T-L (1pm est) 

*1730-731 

+1260 

■ oa.PROOUCTSNWEpuo+Adeff»eryC3F(tonrw) 

Premhjrn Gosolne 

$184-187 


Gas 08 

*154-155 

+4 

Heavy Fuel OH 

572-74 

+03 

Naphtha 

*159-101 

♦2 

Ja fuel 

*170-171 

+3 

■ OTTffiR 



Gold (per noy oz)£ 

*38735 

+045 

Steer (per tray az)f 

54430 

+230 

nstlrun (per tray azj 

*42025 

+335 

Pafladum (bar tray azj 

SI 54 30 

-0.25 

Copper (US pod) 

1210c 


Lead (US prod) 

38050 


Tin (Kuda Lumpur) 

1308m 

■020 

Hu (New Yori<) 

2473C 

-230 

Case Ova wefflhtfto 

11727p 

+0.45 - 

Sheep Qhra wrighqt^O 

88.39p 

+0.48- 

Pigs (five w&qhtfO 

7630p 

-0LS6- 

Lon. day sugar paw) 

*3033 

+1.1 

Lon. day sugar (wta) 

53393 

+03 

Tate X Lyle nport 

£3003 


Barley (Eng. taec( 

C107.0W 

+Q3 

Metze (US No3 Yeiow) 

51803 


Wheri (US Dark North) 

21983 


Rubber (Oeqy 

86.0Cp 

-030 

Rubb* 

8530p 

-030 

Rubber KLRSSNol Aug 

31430m 

-130 

Coconut Ol (PNQ§ 

ssexsx 

-23 

Palm Ol (Malay J5 

S6203w 

+153 

Copra (PM)§ 

*4153 


Soyabeans (US) 

E1«3U 


Cotton Outlook 'A’ fade* 

76.10c 

-ass 

WDokopa (B4« Grew 1 ) 

457p 


e per anna irioea oOia rataeri 

en&ppwneSto 
Wl a NDriJtA. t( 

G GMA. 

Mcari 


Sep 8 


Sep 2 month ago year ego 
232.48 231.62 


Oa. - Sen . Q Lott* Rp*ari. 9 OF Bonwn am . 9 
Bitoon market dose. 4 8heoo (Live MVH prices). * 
Charge m -sdu C Prices a* lor prrJov* toy. 


CROSSWORD 

No.8,552 Set by CINEPHILE 



Each of the fourteen across solutions contains a carnivorous 
mamma l, which is disregarded In the subsidiary part of the due. 
23’s is (very) small and 26*s marine 


ACROSS 

1 Girl's name, one to be loved 
( 6 ) 

4 Handy torn (6) 

8 Left-winger’s dance? CD 

9 Crash on purpose into tung- 
sten (7) 

11 Hot sweet to last sailor a long 
time (10) 

12, 25 Article by person opposed 
to a related coun t r y (4-6) 

13 Vandyke, for example, died 
6) 

14 Philanthropist round border 
river (3-6) 

16 See 20 

18 Old coin of the French (5) 

20, 16 Sparkler, since it's broken 
net (W) 

21 Provider of precious mntai is 
turned 55 (6,4) 

23 Chef cut short by pole in his 
place (7) 

24 In charge of a form of engi- 
neering (7) 

25 See 12 

26 Brown stuff used as dye by 
East Indian leaders (6) 

DOWN 

1 Smell of a capital? (5) 

2 Hollyhock that's endlessly 
found to a meadow (7) 

8 Do nothing to boy among m+n 
pessimistic about the fixture 
<«) 

5 T alked from centre to circum- 
ference (5) 


6 Aficionado, first to see wild 
cattle (7) 

7 Mack Sennett (lTs left out) 
makes a decree (9) 

10 Lloyds’ ire displayed with 
martial effect (9) 

13 Getting round how bridge 
players show weakness? (9) 

15 Lover of mechanical devices 
takes oath to capture En glish 
queen (9) 

17 Letter carrier, Hannibal’s 
father, with no head and 
twisted neck, possibly? (7) 

19 Pay a can about domestic ani- 
mal having to enter contest 
(7) 

21 Some floosie native to Italian 
city (5) 

22 Scots county appears Irish 
when's granny's about (5) 

Solution 8J551 


□□□□□□ □□□□QDQQ 

□ □ 0 □ Q □ n 

□OaaiDB □□□BGJHQQ 









w Pieo 


MARKET REPORT 


■*' .1 ... 

■ ? 'l.i ... ' Vi**,' 


’ 1 *" i ‘ 


Bond market worries drive share prices lower 


ByTatry ByJand, 

UK Stock Market Editor 

The market’s worries over Interest 
rates, allayed at first by favourable 
statistics on UK industrial o utput , 
increased sharply yesterday after- 
noon when the German fomri man 
ket fell sharply. British government 
bands quickly followed salt and a 
stock market already showing a 
double-digit loss plunged in the 
final two hours of trading to chal- 
lenge the Footsie 3,200 marie. 

At the final reading of 3,205.4 the 
FT-SE 100-share Index was down a 
net 36.1, and only a above the 
day’s low. Trading volume, unex- 
ceptional at first, gathered pace in 
the late seD-afF and at least <me sell 
programme was reported. The brunt 
of the market setback came among 
the blue nhijw, which were the most 


closely finked to selling in the stock 
index fixtures sector. The FT-SE Mid 
250 Index closed &3 down at 3,732.4. 

In very early deals, the Footsie 
gained more than 8 points as inves- 
tors continued to respond to indica- 
tions th at economic growth remains 
restrained, and will thus put less 
pressure for higher interest rates at 
today’s scheduled meeting between 
the UK chancellor of the mrrfrapipr 
and the Governor of the Bank of 
England- Market sources indicated 
at the end of last week that some 
official advisers might be urging a 
preemptive rise in base rates. 

The same message appeared to be 
conveyed in the rise of a mere (LI 
per treat in dnrnwgfi c TTuftnrfrial out- 
put in July. However, London was 
unsettled by the evident uncer- 
tainty in G erman bonds as weQ as 
the weakness in both the dollar and 


sterling. In the previous session, the 
UK market successfully resisted the 
Interest rate worries dearly present 
elsewhere in Europe. But London 
was already succumbing to th ese 
worries yesterday morning, as 
became only too clear when the 
German bund began to fail 

Although the Footsie was around 
16 points off by early afternoon, 
gilts were still steady and there was 
little pressure on the equity market 
This changed dramatically when 
Goman band yields jumped to a 
20-month high and UK gilts foil 
sharply. US bonds also opened 
lower as the New York markets 
reopened after Labor Day, although 
the Dow Industrial Average was 
only a couple of points off when 
London went home tor the day. 

The speed of the reaction in the 
equity market appeared to confirm 


that' investors are now focusing on 
the view that the interest rate cycle 
in Europe is on the turn - with the 
UK regarded as the first in line for a 
rate uptick. 

Seaq volume of 573Am shares was 
moderate, and compared with 
76L5m on Monday when retail busi- 
ness slipped to return a value total 
of El TQbn Levels of retail business 
have proved a deceptive guide to 
institutional activity over the past 
fbrtzrigbli 

Business in second-line stocks 
dropped back yesterday to a more 
normal 55 per cent or so of the day’s 
turnover as Wall Street's reopening 
brought tie big players hack into 
the blue internationals. Cur- 
rency factors kept share prices on 
the defensive, however. 

The biggest losses tramp in the 
retail, consumer building indus- 


try stocks, which are seen as the 
most vulnerable to interest rate 
worries. There was some support 
for bank shares, however, as Lon- 
don brokers recommended them 
because of the benefits for bad 
debt portfolios of the economic 
recovery. 

Although investors continued to 
respond to trading statements, 
actual or pending , the final sllda tn 
fiie market took most sectors along 
in its wake. Strategists commented 
that the market is now showing all 
the signs of an expected tug-of-war 
between the benefits of hi gher com- 
pany dividends and profits and the 
prospect of increases in interest 
rates. 

"By the end of this month we 
should have a better idea of which 
set of factors is coming out on top," 
fnrnmmtffi one leading analyst 


FT-SE- A AUShare index 

1.675 — 

1.650 

1.625 

iS -—-/b/ — .... 

1,525 — 

L450 i 


■ Key Indicators 

Indices and rsttos 


Equity Straws Traded 

Tunowr by volume ftnfflort. Exefadng 
litii a uarttet raranMa an daw w mhmwar 
1.000 - — — - ---- — - - 



FT-SE 100 

3205.4 

-36.1 

FT Ordinary index 

3478.9 

-333 

FT-SH Md 250 

3782.4 

-&3 

FT-SE-A Non Fins p/e 

19.84 

(20.04) 

FT-SE- A 350 

1619^ 

-14.6 

FT-SE 1 00 Fut Sep 

3201.0 

-47.0 

FT-SE-A AB-Share 

1607^6 

-1150 

10 yr Gft yield 

8.81 

(8.67) 

FT-SE-A AD-SRare yield 

3.70 

P-63) 

Long galt/equity ytd ratio: 

2.39 

P-40) 

Best performing aactors 


Worst performing recton 



1 Sanies 

2 Printing. Paper & Pcfcg 

3 Engineering, Vehicles 

4 Other Financ ia l - 

5 Oil Exploration ............ 


1 Tobacco -3.6 

2 Gas Distribution -3.1 

3 Spirits. Wmes . -1.8 

4 Pharmaceuticals -1.7 

5 Consumer Goods .-1.7 


1 ' ' : 


iEST 

: 00l 

All 












Heavy 
trade in 
utilities 


Corpora te activity continued to 
drive the utilities, with the 
re gional electricity companies 
(recs) again heavily traded 
after news of yet more share 
bay-back operations. 

Bnt it was a res t r u ct u ring 
programme announced by 
Afanweb that caught the mar- 
ket’s imagination and drove its 
shares sharply higher. Ana- 
lysts welcomed Man web’s 


strategy, with Kfetawort Ben- 
son, in particular, said to have 
been an aggressive buyer of 
the stock, which raced up 20 
to Sip. 

Analysts pointed out that 
Man web had been the se cond 
worst performer In the recs 
since the distribution review 

last Tnnnth and that- they bad 

been impressed by the details 
of the big cost savings after the 
restructuring. 

South Wales Elec tr i ci ty rose 
21 to 817 d stating that it 
had bought back 500,000 of its 
shares at 815p. confirming 
recent speculation that such a 

move Was trarafTiwi^ 

And South Western moved 
back into the market to buy a 


EQUITY FUTURES AND OPTIONS TRADING 


Aggressive selling in the 
futures and options market 


and rumours of a heavy safl-off Gascoigne. 


down to break through the 
3,200 barrier, writes dam 


from a US hedge fund took the 
September FT-SE 100 contract 


The morning opened cheaply 
with the September contract at 


■ FT-SE 100 MDEX njTURES 0JHFQ £2S parlUi index point 


- 


Open 

Sett price 

Change 

tigh 

Low 

to. wi 

Opan bit 

• 

Sep 

32469 

3201 U 

-400 

32410 

3198L0 

18013 

48307 


Deo 

3261.0 

32115 

-4BJS 

32820 

32110 

4072 

16549 


Mar 

3272.0 

3243b 

-45 JO 

32720 

32720 

10 

100 


. ■ FT-SE MC 250 MOEX FUTURES 0JFFE) £10 par U index point 




Sap 

38000 

3784.0 

+1 i> 

aaoobo 

37810 

111 

4172 

” 

Dec 

3822.0 

3807 J) 

+2J5 

38220 

9»y> n 

01 

580 


■ FT-SE— > 250 MDEX FUTURES PMUQC10 par MlndaKpoW 

Sop - 3784.0 ... 

M opan Monk Igwai *n» tar prariou* (fay. f Bod votone Mx 


■ FT-SE 100 MDEX OPTION (UFFtj (3204) CIO per M Max point 

SOSO 3100 3150 3200 3290 3300 3300 3000 

CPCPCPC PCPCPCPCP 
SOp IS 1 H»% 5*j 87 13*2 33% 32% 13 83 3% 110 1 WO 1 210 

Oct IBB Z1%1®%32% 95*2 47 87 B8 45 95% 28 129 15% 168% 9 213*2 

Nov 19Q 331a 15* 47% 121 602 82 B5% 88% 112*47% 142 33 17B%20% 219 
MC 212 48% 178 62% 145 81 115% 102 »% 127 *7*2 155 189 9B 226*2 

Jnf . 272 116*2 -■ 213*2 158 - «%20B% 321260% 

oowwitsi 

■ EURO STYLE FT-8E 100 WDEXOPnOHfrJTq CIO par M tore pofa* 

3025 3078 8129 3178 3225 3273 3325 3378 

S* t7B*2 2*2 138 4*2 85 9 48% 22*a tt% 4ft 6 79 1% 125 1 174 
OCt 190*2 17*2 1«2B 112 38%»%S7 54%B0%36%111 21 1*6*2 12 186*2 
Nov 20818 28% 135 53 78% 93% 36 154 

Doc 2»%41J% 158% 68 *»% 109 » 165 

Ifarf ZTO% 66 211% 97 156 138% . 1tf% 191 

COE am Pa* U1B * nxfcrfrino MB nka tontara tore m toad m iMaM 'priM 
t la* «M npty bomb. 

■ EURO STYLE FT-SE HP 290 MPEXOFTIOW (0MUQC10 per Mfcidoac point 

3500 3950 3000 3650 3700 3780 3800 3080 

Sep 0% 27% 40% 50 21% 81 

Putt 0 SeOen»« pfcoiatfw*Mmtt»*43apn. . 


further 750,000 of its shares at 
805p. It purchased 3.5m last 
week and has now acquired 3.4 
per cent of its stock. The com- 
pany bft<5 ghrerriw i liter author- 
ity to buy in up to LL3m of its 
sharps , South-Western declined 
7 to 803p. 

Midlands Electricity, also 
expected to announce a big 
restructuring in the near 
future, rase 10 to 799p amid 
talk of an imminent buy 
r fifjimwwi dat ion from one of 
file loading - UK broking ho uses. 

The Scottish generators, 
Hydro-Electric and Power, 
were both under pressure 
ahead cf their own distribution 
review, with some analysts of 
the opinion that any good 


3,246, after dosing at a 
premium on Monday, with 
expec ta t ions of a quiet day 
because of the Jewish new 
year. But after touching the 
day’s high of 3,248 it was 
abnost immediately traded 
down, taking the cash market 
wfth ft to reveree early morning 
gains. 

The real weakness came 
through late in the afternoon, 
as the German bund came 
lot dor pressure and with the 
added burden of the US hedge 
fund rumours. In spits of some 
buying from independent 
traders, it was not enough for 
the September contract to 
recover, and after dipping 
briefly below the 3.200 level it 
closed at 3,201 . Volume was 
good, wfth 16,415 contracts 
traded by the dose. 

After-hours' dealing took the 
September contract down stifl 
further to 3,196, with around 
1,500 kits transacted. 

However, the December 
contract was more in favour 
and held Its value better, 
finishing at 3£15. 

A busy day for options took 
turnover to 29,511 lots, with 
the banks heavily traded; 

HSBC at 2,787 contracts was 
the most active stock option. 


FT - SE Actuaries Share indices 


ihe UK Series 


Day's Year Ov. Earn. 

Sepfl chgrtG Ssp 5 Sep 2 Sep 1 ago ybfeflt ytefcfK 


FT-SE 100 3205 

FT-SE Md 250 3782 

FT-SE MU 250 a* bar Treats 3708 

FT-3S-A 360 1619 

FT-SE StnalCap 1011^ 

FT-SE Sa ra BCep mx bar Treat* 18785 

FT-8B-A ALL-SHARE 1607.5 

■ FT-SE Actuaries AB-Shar* 


-1.1 3341.5 3222.7 32115 30380 382 6l31 

-02 3788.7 3781-3 3794J 34702 028 &49 

-02 37913 37854 3801-2 34873 3.41 &94 

-00 1884.1 18201 18200 15230 3.77 050 

-Ol 1912.12 181109 191054 178017 207 4.11 

187804 187607 187408 178708 3.14 405 

-08 162078 101307 181207 151108 3.71 033 


Ora* Year Ov. Earn 

Sep c chart* Sep 5 Sep a Sep 1 ago yfaMK ytefcflG 


10 MMBUL EXTRACTlONtia 277300 -1.0 280201 2781.79 274801 231100 307 5.10 5MOO 54.71 110009 

12 Extract Industries^ 387301 -10 402701 4020.7B 399807 336090 021 007 24.71 54JM 10B4O7 

16 0 Mnffida 273307 -10 2702.48274000270304221900 307 548 22.72 5800 111801 

10 S’faSi Predftl) 194801 —194605 19250919170 4 107000 248 IQS 8tmOt_jq04 111708 

20 OEM MANUFACTURHTS12B4I 203704 -03 205045 204104 2043.42 1009.10 3.73 401 28O4 52O0 1O33O5 

21 BuBcbXJ & Conamicttonfa 1207.70 -Q3 121103 120308 120108 1152.70 300 400 2906 2147 03802 

» EUrtng Malta * MerdaSl) 201000 -08 202502 201607201703179400 308 402 3103 4801 94148 

fflaSfcL«2a 248251 -10 250545 2806JJ4 2816.77 223300 3.74 409 3083 7207 109842 

» DNerdedMustiWana 203084 -10 205070 2032L7B 203706 108800 448 400 2088 8406 103408 

25 Bertrorte&Beci^uWaa 100302 -OO 2009.76 202108 203108 2146.10 3.76 801 1800 5909 97309 

M &Sneeri«jm» 100507 -04191207100904189300188900 300 4.82 25.73 3809 108501 

« totoato vUctotfra 238705 4ai 238405 237802 239408 108830 443 246 5808 5403 113806 

28 283006 4<X6 291400 287170 288308 245900 201 501 2341 5402 1148.77 

172821 -04 173304 170S46 160922 191400 _3Q4 8.10 _2U04 4040., 97223. 

3D CONSUMER 00003(87) 283804 -1.7288509 287445287173201700 4.10 7.12 1825 8337 97105 

-« 2384.04238004 236606 209080 408 708 16.48 6023 1043.12 

32 A OderaflQ 2951-07 -103003072998092994012024.10 3.75 803 17te 8002 98827 

1 SS LfcnCS*v^Ml 2392.61 -00241209 2308002309012360.10 401 700 1172 7103 100303 

34 250009 -102541002551.14 259100 248430 300 707 15.17 fflOO 89100 

171209 -00172608172707172601180600 E8Z 3.18 4407 3iOB 98946 

37 rn^Mii ii«i4lr Jrrfl 71 311203 -1.7316705315073315503310800 401 600 1057 7005 07708 

g 386803 -30 380445 37834P «"»™«”i» n 602 908 1 145 21707 83E25 

■ n unm^Ttruil 200QJB2 -09 2019L25 201407 2021.73 102700 307 800 2812 «0 1 07941 

It 2704.28 -1.0 2730L7B 274209 276306 280200 305 804 1803 6203 93343 

SdsTileo 210408 -00211807210803 211923197100 329 400 2500 4823 1038.12 

S hoibcv 283801 -002984932960.14299108252X00 233 5.13 2207 6020 1019.13 

S nSm rrrMYlffl 185120 -1.4 187704 185448 186496 101620 347 801 1455 43.10 110415 

171201 -1.1173148173208174305163220 325 627 1980 3505 91240 

IS 180820 180433158425158020164820 206 509 2023 28.12 07148 

m Smi 236821 -002375.77238322238601230470 306 6.14 2201 4202 01861 

M fZ^Vlnni 1 finlnnrmn - ,Q * >OT - ni i3M m MawlMO BIOTTOD 302 2.10 B0flPt..2148 1137.19 

240546 -002515.10 260283 251023 228200 422 TOS 1813 «42 961.14 

S 284407 -00285805265857268816192410 847 901 1204 8349 108857 

2 1933-33 -8.1 190459 1S78T2 197282 21 88J0 820 t t 6870 88855 

208106 -03 208701 207802 2083.73 207440 3 07 70S 1010 5022 88745 

“ 1087,98 -OB 198033 1847.49 1981-96 182900 494 1203 908 8035 98177 

- r 179899 -IQ 1 75426 174707 T7401S 193879 _060 808 1884 4307 .1^04 

™ ny.wtuaiM * 228000 227001 225108 223620 218800 420 874 1814 8007 89925 

2 203028 4002910752888^7 285454 259870 410' 012 1248 114*4 88207 

71 127223 —10 129142 127908 128948 144870 001 1208 8.75 4855 88827 

S 2527-M -102652.77252458251508281700 498 7.19 1707 8834 96042 

74 UfeAaBtfancew_ ^ OT947B 315427 316703 306300 323 1038 1125 7042 95030 

76 2017.47 201608 2003.77 200305 1812.70 301 701 1024 4600 1072J2 

S S SL 55! l_ -CL8 156304 168008 158477 158340 301 403 3001 3808 68818 

* n ^SSaiTTP««T fl t1 g a W.16 -02291^ ^16201467,265440.. 200 1.79 5851 48j»4 07871 

dp ir-r n all aournontTi wrote -oo ieaa78 leiaro 191227151103 3.71 833 1377 42.74 120040 

■ Hourly movwnetita 

0om lOjQ HOP 12-00 1300 1400 1600 18.10 HtfildBT Uwridg 

izrc Sflo 3232.1 32370 32250 32250 ' 32te8 '32030 32534 32034 

2'flJSocn 37930 37981 37910 37885 87870’ 37870 37883. 37820 3795.7 3782.1 

FT-S6 MU2S0 JB2R2 1830.7 16280 18270 1827.7 162B4 18180 16394 16187 

FT-S&A 300 iOoo-3* 

nne of ft-se ico D*r* HO* o*®*! fa** *** ^-i****- FT-8E H 0 10 #* HU* asiftapo ) lk a*78e 

■ FT-SE Actuaries 380 Industry bastotm 

om «U30 1100 12.00 1800 1400 1800 1810 Ctoee Pmtaue Cbaage 

L_ TH 7,787 11790 11770 117SO 11720 11708 1171.0 11TIO 11880 11970 11750 ~ 

QUgSCnMO, 11^7 Ti« H 1M 3, 10U | 31103 31130 31110 90833 30050 314M -585 

19750 1977-3 19870 19660 19683 18703 19660 19660 19704 -125 

WfaUr 29^4 29670 20710 29642 20840 20081 29950 20808 2971.1 2976.1 29583 «f&8 

„ .. IwfanliPMtahrf h StolBf brew. UW aloiin^u— — ■i M 9* i B rn i H»Fh— til Hmt 

>ik»ii«iU nn°nJ*w PTfiF pewit— Eh— Wo* S>«* Mt> no— a Mooed Wcacrtc mtfpeperfMBd 

Untad, One SortniJI* RNSTAT ,RDrey Hews*. 15-1T EP-orti Sow*. Undn EB2A etx. 

po**"""** FT SS5anS!«4***«B. H» FT-9B Uft *■ FF8E M4 298 FME AcfaariM 389 end 0** PT« Aoumh tadu«y 

KbftwW N* aSci Erim at*» U*d I*e*»n ■»! Ihpuefc or hm ad n» FT« Aceerin Atom mas n 


307 5.10 

821 807 

307 548 

248 105 

873 461 

300 4-38 

306 402 

874 409 

448 460 

876 831 

800 462 

443 246 

201 801 
304 810 

410 7.12 

408 708 

875 853 

401 709 

800 707 

202 818 
401 858 

502 908 

807 800 

835 604 

829 460 

203 5.13 

347 861 

805 827 

206 509 

856 814 
882 2.10 

422 TOS 
847 901 

820 t 

857 706 

494 1803 

860 800 
420 874 

410 ' 812 

801 1208 

493 7.19 

323 1038 
851 701 

891 403. 

209 1.79 

871 603 


PTE Xd ac|. Total 

nCo ytri Ratten 

1703 9023 120800 
21-87 8803 140445 
2038 01.77 140819 
1822 4888 124867 
31.15 3821 147808 
2885 3814 145471 
1877 42.74 126040 

P/E Xd ad). Total 
ratio ytd Rrtien 

2480 5471 110809 
2471 5424 108437 
22.72 5909 111821 
BOLOOt 2004 111728 
2864 5208 103885 
2908 2147 93882 
3103 4851 94148 
30.83 7207 109842 
2860 6486 103408 
1800 5509 97309 
2873 3809 108501 
5806 5423 113805 
2341 5422 114877 
2004 4040 97223 
1825 8307 97105 
1848 6023 104812 
1726 0892 06907 
1522 7103 100303 
1817 5200 89100 
4407 3506 98946 
1857 7005 87708 
1145 21707 83823 
2812 4801 07941 
1803 6203 93343 
2509 4803 103812 
2207 6000 101813 
1405 4810 110415 
18.90 3885 91240 
2003 2812 97148 
2201 4202 01861 
BOLOOt 2148 1137.19 

1813 7342 961.14 
1204 8346 100857 

* 6870 89853 
1810 50 22 86745 

306 aflOS 883.77 

1884 4307 122204 

1814 8007 89925 
1248 11484 88207 

8.75 4885 88927 
1707 8834 86042 
1125 7842 95830 
1824 4600 107222 
3091 3808 86818 
5851 4884 87871 
1877 42.74 126040 


news may well have been 
already factored into their 
share prices. Both stocks 
retreated 9, Hydro to 398p and 
Power to 39Sp. 

Bowater improves 

Paper group Bowater pro- 
vided a relief tn the 

market as its half-time results 
suggested a tumroond m the 
hard-pressed packaging sector. 

The shares unproved 19 to 
492p after the company posted 
profits of £105m and gave a 
very confident statement Bro- 
ker Hoare Govett upgraded its 
normalised profits forecast to 
BMid, and said u re rg im were 
improving and organic growfii 


TRADING VOLUME 


Vtt. Ckatag 
000» pdra a— 

ASOAQBKpt 7400 03% -1 

Aooajr rcecnrft IB 00 410 -7 

AbMFMMr 8300 SO 

WW 917 805 -0 

*’0*arW*Mr 531 W 4 

Aran 112 S56 4 

5.100 290 -a 

1J3O0 271% -1% 

533 662 -8 

41 
*7 


Bark ol Scottandf 

Barckyst 


BkaCtdat 

Boohar 

Bootaf 


Buol 

Bunnati Caanoff 
Bum 

CBtaaAVWwf 

ca*H 

CSaten Comma, t 

arsa 

Cookaco 

Oauraddat 


Fay * CoLLT. 

QaaAcddrt^ 


Qrand Mat,f 


0 *aaaaaf 

HBBCp9k>d*|t 


tKmai 

M 

LaMat 

iMlGaavataot 

import* 

LagdAOandt 

S5» 


467 483 

2400 437 

200 110 
378 382 

1,100 720 

8000 410% 
S71 017 

11,000 093% 

4^00 274 

3/500 307 

8900 210% 
8900 383 


1.100 044 

3400 402 

1400 510 

8000 407% 
4,700 201% 

446 401 

8600 167% 

i«% 
004 
107 64 

8700 445 

1,000 487 

290 Z77 

2.100 311 

8200 067 

jm 

1 /bo 

IflOO 

778 


071 102% 

1700 140 

1.100 142% 

1.700 236% 
IJOO S70 
8000 2S6 

8600 020 

4.100 353 

2£00 402 

8600 437% 

740 
8300 


1A00 
1,100 

705 010% 



382 467 

2400 148% 
700 851 

8000 420>2 


8500 611 

1.200 m 

111 577 


N*m*B Foodat 


P*Of 000 078 -4 

ningu 8100 106 % - 1 % 

PoMtOarrt 1BOO S67 -7 

PreKatW 13» 331 -a 

RMCt 410 BOO -11 

mzr VXJO B79 -13 

Rmot 311 304-41 

1400 411 -6 

Fte<*«l f deferent 452 507 -IS 

Ffatadt 1400 04S -17 

IWl4t 1800 776 -0 

RacaoUJ 525 232 -1 

I wraraf 604 407 -IT 

RohRoycat 4800 1 85% «1 

B»1Bh8cc9«Jt '8500 437 40 

Rnanasawatf 3JJ» 284 -14 

BJabayt 2^00 460 -7 

Sctoudara 110 1S33 40 

BcaOM 0 N4w.f «» 522% - 10 % 

SeotHsdR>«8(± IJOO » ■« 

ScoCWi PcMst 2400 308 -0 

Sanf 2400 120 % -% 

Sedgmiok 299 104 

BaeMM 405 444 

SBaanTrenct 230 571 -7 

SMTbnraortt M9) 7(7 ~ u 

StobflT W5 5*8 

711 248 -2 

8mm MOi) *94 401 -0 

&T*fi S Hraiwwt 1.100 160 -1% 

SmWBeacfiarot 8300 442 -7% 

3mH D aae » i a aua.t 320 387 -M 

Srathshra. ffi*5 445 -7 

SeUhan Qoa.f 080 787 -1 

8M0iW4toaBaa. 8200 B17 

SouAWaatWttar 913 600 -11 

SculhWoBLHBH. 1,600 . 5£ -V 

sesttart w nr is an -a 

SMmdCnamt 3400 O* -i 

BWhOUlB 700 221 +1 

ASs&asf 8600 3« 

1W 1800 235% t4% 

71 630 375 tl 

■raet Itooo 233 

Tame 8600 163 

Tlaa&Lyia 1JXD 444 -6 

nriorwoomw 104 

Taacef 9400 247% -6% 

TlwnMVMat 303 530% -6% 

Ham Set 602 1014 -1 

Tamtnaf 3&0 Z» -7% 

TrataajBf Hojoa 8100 01 

iHpoB 1400 see -« 

urinft i.soo lias -7 

UntadBmamt 23 S ^ 

lUNomm aS8 533 -1 

VaddoSr^ ana 2«% ♦% 

VMMOBfflt 400 775 -6 

wracomt 735 « -*4 

WaMlWtar 37 008 -4 

lima ail Warn 24 SI +1 

M» 0Lra*ri 1.700 573 -e% 

WBamMdgAf 646 571 *1 

MaCnm IJBOO 1M 

imnpra 7400 i« -9 

WoMayf 290 701 -7 

YMMlBaa 831 780% -% 

'rata*±BWn* 2S6 530 -0 

Zanaesf UDO 822 -12 

Boaad oo udna aahaa fa ■ a*fl0«i e* mapr 
•Mamw daak iaaiA m EEM «|ataa> 

jmr> 9 aw 430pm. imbb tf am iiMpner 

men are lomdeO Damn, t 3 ii 0 i aaaam W-0E 


was coming through. However, 
some analysts refused to 
believe that the company's 
past as an acquisition-led com- 
pany was finally behind it. 
“Has the leopard really 
changed its spots or is it just 
saying what the City wants to 
hear?" ashed ww* 

’RwnV shares, among the mar- 
ket’s strongest performers in 
the past couple of weds fol- 
lowing a number of broker buy 
recommendations, made fur- 
ther rapid progress after a posi- 
tive review of the sector by 

gle l T iw nrt Bpnanri- 

Takeover talk, involving the 
possible acquisition of a lead- 
ing UK building society or the 
hank itself bong absorbed by 
an overseas buyer, continued 
to promote heavy two-way 
activity In TSB shares, which 
ended unchanged at 233p. 
Turnover in the stock reached 
19m, easily the highest dm* 
January when the company 
surprised the market with a 20 
per cent dividend iTicw>a.«a» 

Bardays, finally unchanged 
at 595p and a Klein wort favour- 
ite, was the second most 
heavily traded hank stock, 
8 Am shares being dealt. 
National Westminster, where 
there was heavy activity in the 
options, rose 8 more to 511p 
on 83m shares traded. Lloyds 
put an 7 at 580p as the market 
continued to speculate about a 
possible early sale of the 
bank’s 4.7 per cent stake in 
Standard Chartered. 

Commercial Union was out- 
standing in composite insur- 
ances, dfanbing II to 564p on 
talk of an imwiiTipnt broker 
buy note and following switch- 


NEW HIGHS AND 
LOWS FOR 1994 

tew worn (jt). 

BREWEMES « GJbta Mtm. Hat «. Mmsm 
Ttampton. BUUMO 4 CNSTRN « 9»>. 


PirteA. SttMtfn. QWERsnED MDL8 td TT. 
EUECT0NC 8 ELECT EQUP (Q Acorn 
Computer, *ba. o wwrnmn w Boat! Inti*. 
Oomw* Rhmu, AneU 

EXTRACTIVE MD« C7| Ar«tt A«. 008 BoUUar 
GnM. irahyat e 6*4^. Mnoaa. Racer fc- 
Bnawei Eao. We . u il ut tarinQ On. 
HOU0B4OLS GOODS (2| teyol Douttoo. 
BtrakraaeU. WVC«TM8irTnuras (R 
JoTraon fry Etna fare PT. wenti AWieni SWr 
cefe, Mem MERCHANT BAtfiCS D) 
Sctvodcn. Do. Nflf. OB. OCPlDRAnON 4 
noonaAMmtacmk.onn 
IWANCML (1) J>4>ter TymM. OTHER BOWS 
4 BUMS CQ Qeat Seudttra. tigtanoa. 
PHARMACamCALR (I) Bm BoHOi VRmtm. 

nma, «vwi • pwcko d l»> & am. 

PROPERTY ri)W*iyl4scfcuy-LBMi. 
RETAIL£R8 BEWUL n Aram Reed, ftnem 
P8 Bara Frmch Connection. Hauee el Fmr. 
Otrar Gip. 0UPPORT BSWB (O Attn** 
Cerremer PaaflA HanW WMkio. tOTE. 
TEXTUB4 APRARS. (7) Nran 
TRANSPORT (1) GRT Bub. WATER 00 Charter. 

Vrmm* a*. 

New LOWS (37V 

OUR re BANira A BM el Sanmt 0Mpe 
Ind Pit, Da. 94*06 PL Standard CM) Tttpc Pi. 
DBIRtBUTORB P) fpftofwa. Cmrfe , KM4. 


Ho4« EXTRACTIVE DOS p) SaNn. 
HEALTH CARE 0Q AaaoeMed M*4ig Save- 
Sdo8 NOMMOID OOOM n Vymua. 
WyedaU, BIVEST1MIT TRUSTS P) Hendaaon 
Cijpp ea n 2 e rt> Pit H radan a Eurocrat QRa 
IBMA (I) BkfedN^ NBtCHANT BAMCS (1] 
Bert«a 94ipc Non-CUm. M. OTfOR SERV8 4 
D U raH tn E—n. PRTHC. PAPER 4 PACKQ 
(1) hknentrM. PROPHOY n htomera P«4A 
□A ESA BeHk. RETA4ERS, FOOD (1) tteSn 
& Peacock. RETA8Bt8 04HBWU. JI] RHA 
BUPPORT HNS M COlAH CMBHSnp, 
Q raN ui 'ii TNeeumpaBaB. Harm 4. SpNgnCena. 
TEXTILES A APPAREL ft) Lernoor. 

ing out of Royal Insurance, 
which foil 14 to 284p. Sun Alli- 
ance dipped 12 to 340p, but 
dealers are still hopeful of a 
good infw^y tn thR interim 
dividend when the group 
reveals its results tomorrow. 

Tate & Lyle declined 5 to 
444p after James Capel, the 


leading agency broker, was 
said to have taken the stock off 
its buy list. 

Iceland Group delivered one 
of the best individual perfor- 
mances in the market, the 
shares racing up 20 to 165p 
after the better than expected 
interim results, which included 
a 10 per cent increase in the 
dividroxL 

Pharmaceuticals group Med- 
eya was the best performer in 
the London market, jumping 
almost 18 per cent as investors 
responded to a sharp improve- 
ment in interim results. 

Even some of the more griz- 
zled bears had to admit that a 
70 per cent leap in profits to 
£22.1m was encouraging. One 
commented: This might prove 
to be a turning point in the 
company’s stock market for- 
tunes." The shares rrHpii Hie 
day 23 highw at I5lp. 

A market-led fall in Well- 
come shares masked a tussle 
between rival analysts follow- 
ing a migraine conference pre- 
sentation on its answer to the 
ci»rft treatment hnigran. Leh- 
man Brothers came away argu- 
ing that Wellcome’s product 
was as good as if not better 
than hnigran ami could gener- 
ate peak sales of 8500m. Hoare 
Govett concentrated on the 
treatment's sedative side 
effects. The shares fell 14 to 
685p. while Glaxo dipped 13% 
to 620p ahead of figures due 
tomorrow. 

The City tends to see ration- 
alisation as Improved profits 
rather than lost jobs, and yes- 
terday’s announcement by 
Carlton was no exception. 

News that the group is to 


combine its common broad- 
casting services, commission- 
ing and production arms with 
Central Television from Janu- 
ary 1995 is estimated to lead to 
around 180 redundancies but a 
boost in profits of some £5m. 
The shares rose 12 to 85>p. 
although they were bouncing 
from a low point and several 
brokers had begun to upgrade 
their recommendations. 

Greene King, the brewer, 
improved 16 to 537p after sell- 
ing its 28 per cent stake in 
rival Morland. The 6.23u 
shares were placed with insti- 
tutions via Hoare Govett at 
460p each. Morland shares fell 
15 to 493p. 

Disappointing car registra- 
tions for August depressed the 
vehicle distributors sector. The 
2.8 per cent rise from last 
year's level was much less 
than expected and left Lex 12 
cheaper at 384p, Cowie 5 tigh- 
ter at 247p and Inchcape off 9 
at 468p. 

mn turned in interim results 
in line with expectations but 
not high not enough to hold 
the share price, which came off 
11% to 325p. Mr Zafor Khan at 
Strauss Turnbull revised his 
full-year profits forecast from 
£80m to £82m, excluding the 
exceptional write-offs. 

Rolls-Royce held on to a 
penny rise to dose at 185%p, 
with UBS rumoured to be a big 
buyer. 

MARKET REPORTERS: 

Pater John, 

Clare Gascoigne, 

Steve Thompson. 

■ Other statistics, Page 23 


LONDON EQUITIES 


L1FFE EQUITY OPTIONS 


— cab Ms — 

OpjbB no j» Apr oa te /w 

MiMjn MB 324 - - 11 - - 

reoe j B3B g - -aoi - - 

Ann I 200 2014 *7 34 8 15» 20M 

(-290 1 300 0% 17 M18M2BH30M 

ASM 90 6K 9 lim 2K 4K 0 

(TO ) 70 ZH 4H 0 8*1014 12 

uMavan a aeo* 8 is* a 
(■407] < 20 try, asm a 3237 * 

Mkbt 4a 38* 41* 51 8* 18* 23* 
[*441 J 400 12 22* 30* 28* 37* 44* 
Boob 500 51* 07 80 3* 11 17 
(TOS) 550 10* *7 42 21 31*30* 

op an a 44 n 4* ii* is* 

P417 ) 4a 15* SK 34 16* 24 a 

nan M 140 a at* aaeussHM* 

n» ) 100 7* « 18* 8 12 14* 

BM 560 33* «S 51* 11* 28* 38* 

C5B7 > 600 ** M*a»30*S8*60K 

cm ib 4a a 48* am 8* ia 24 * 
(TOS) 480 «Sm 3828* 9 44* 
CmtHte 50028*30* 9 1323*29* 
C512) a» 7 T7 28* 43* 62* 58* 
CMsIUOO 550 29* 46 S 11* 19 31* 
CSS S) GOO 7* 21* a 42* 48 00* 

12 800 48 80 80* 13 20* 43 

(TOG ) 850 m 41 SI 37* 51* 88* 

natter on 2 S* 40* st 17 an* 
(511 ) BO 8* 19 a 51* 55* 80* 

LaBd Sear GOO 47* SB 88 3* II* 14* 
(TO8) 658 14 28* 30 22 33*30* 

HBrtaSS 4a 15 a 35 12 a 24* 
(420 J 400 2* 10* 18 40* 45* 48* 
IHVM 9» 27 43 51 14 22 34* 
(508 ) 550 T 32 a 45* <8* 63* 


Cab PM 

Mra Fet H*f Hra M> Kay 

240 a a 25* 5* 9 11 

an b n it is* a a* 

154 tz» - - 9 - - 

180 4 7* 11*28* a 31* 

180 22 25* WH 0 9* 13 
200 • 14* «* 10* 19* 23* 

850 M 66* 64* 24* 35* 49 
700 10 9 42 55* 05 77* 
ISO 33 25* a* 4* 7*10* 
200 10* MK 18* 13 17* 19* 
33010*23* a 16 21 29* 
an 8* 11* 18 37 40* 48 
850 48* » 84* 26* 38* 50* 
BOO a4S* n 54* 63* 76 
500 83* 04* 71 8* 15 26* 
550 21* 36 44*30*36* 52 
280 9 30 39* 13* 16 24 
300 12 18 38* 25* 28* 35 


RISES AND FALLS YESTERDAY 


Brfflsh Funds 

OtfMrfixatffemrasf 

Mbwrri E xt ra ct ion 

General MsmriadwB . 
Consumer Goode 


FkmcWs 

I mwin i y nt Treats . 
Others 


I heed on 0i* London ! 


1 

F0B* 

63 

Santa 

6 

0 

13 

2 

61 

57 

80 

118 

147 

381 

34 

51 

102 

75 

99 

328 

10 

IB 

8 

56 

100 

212 

22 

115 

330 

a 

AQ 


99 

389 

713 

iP* 

1503 


TRADITIONAL OPTIONS 

Ftrat Dealings August 22 Expky 

Last DeoSngs SaptanimrS SaMemant 


November 24 
December 8 


SHWbnt 4a 48 48 58* 6* IS* 20* 
(448 } 460 U »* 37 20 33 38* 

SheSftan. TOO 51 9 W 5* 14 2* 
[•748 ) 750 15 31 40* SH K 48* 

Storehouse 220 25H2B* 8 2 5 8* 

TOO ) 240 3* BUM 23 25* 29* 

TMbger 9 0*10*8* 5 8 9 

(91 1 in 2* 8 7* 11* IS 17 

IJMere 115042* 84 9 23* 39* 58 
nisei 1200 13* am 58* 52* 88 M 
Zeai BOO 38 55 67 21 8 47 
TOO) 860 14 30* 8 5150* 75 
Option — ftb Her Mw fttHby 

&mtM 4a 9 « 48 11*20* 24* 
(*438 ) 460 14 21* 86 32 41* 48 

Ik3h*> in Him a 8*12*18* 
(164 ) 19 5* 11*14* 22* 25 a* 

IHBboM 330 15 n a 13 23 31* 
(330 ) 380 5 12 15 38* 42* 51* 

OpBra Sep Pra Mr Sep Dae ibr 

fiWB 14012* » 18* 2 7 9H 

(149) in 2 m 8 14 19 21* 

Opbpp bra m ** Nra franby 

MM 500 40 85 88* 24 34* 44* 

(518 ) 550 17* 32* 46 53 63* 72 

ELAT Mi 4a 32* 44 51 13 17 27* 

(437 ) 480 13* 24 38 35 38* SO 

BIB 380 12 39*43* 8 12 17* 

(388) 390 14 22 Z7* 21 28 32* 

MNHB 380 ■ S a 12* 2D* 24* 

(393 1 4» 8 18 16 31* 40 42* 

UtoyM 4® a 35* 41 16 21*29* 
(487 ) 300 7 17*23* 41 45 52* 

raan fa 7509*83* 98 24 33 41* 
(788 ) 80039*59* 72 46* 57 65* 

IMlWt 480 2m 41 4m 12* 18 25* 

(477 ) GOD 11 a S a 43 48 

EEC 230 24 27* 23 8 9* 12* 

(296 ) 30012* 17 22*11* 1* 21 


(584 ) 
BwCMa 
(317 I 


Dace 240 17 M a 9* 14 16 

(247 ) 280 7* 14* 10* 21 24* 29 

IMrfm 18324* » - 4 7» - 

(200 ) 200 13* 18 a 11 IS 18 

WbH 354 22* - - 9* - - 

(371 ) 364 8* - - 27 - - 

Opto Ort .ten Att Od i» 

BM 475 20* 38* 46* 7* 14 17* 
(49) 500 M22M 918* 25* 29* 

TtsaaVRr 500 42*49*68* 8 18 21 
(TOO) 550 14 M 31 a 43 48* 

Opto Sep Patt bar Sap Pec War 

AM* KM 390 33 44* 52* 2* 8 16 

(418 ) 4a 11 34* S 12 21 a 

AflBtbd 9 3 4* 8 1* 3 4 

(31 ) a 1 2* 3* 4* B* 7* 

Bbttbb 550 48 64* n 2 11 20* 

(594 ) 800 13* 31* 48 17 31 42* 

Bk« Ode 300 21* 31 9 4 11* 17 

(3(7) 330 4* 14*23* 21 28 S3* 

BUM 6K 200 16* 21 a 3 11* 15 

(291 ) 300 5 12 17* 12 23 2** 

□bans 200 11*20* M 5 Ufa 16 

(205 ) 2 a 311 * tti8* a a 

mraban in 7* 1318* 5 Tl 13 

t-181 > 200 2 5 6* 20*24* ZB 
bnhB 130 10 17 a 2* 6* 9 

(138 ) 140 5 11* 15 6* 11* 14* 

Ntf Power 500 a 37 4m 8 21* 28 

(5io ) so a is* am 4i* si 56* 

Scot Row 380 18 33 39* 7* 17* 23 

(398) 4a 519*25* 2B 33 38* 

Sen 120 5 8 12 3* 7 B 

(ia) ix tn 4 b ii 13*15* 

Fflfl# 220 W 34*29* 2* 7 11* 

(238 ) 240 5* 13 im 9* 16* 21* 

Tennec 160 9ft 18 20ft 4ft 12ft 15* 

(O) 180 2K 8 12*18*25* a 

Than BM TOOOJBfttttt 77 tS 35* 52* 
(1013) 1050 t a S3* 47* 83* 79 

tsb Min s a a t» ii 

(238 ) 240 3 M 17H11* 17 23* 

Tortfra 220 19* 29* 29* 2 7 13 

(235 ) 240 4ft 13ft IS 9ft 14 19* 

WbM 85044* 80 88* 7» 25* 38* 
(682 } TOO 16 41 n 31 48* 6) 

Opto Oct Jen Apr OB Jen Apr 

Bn 600 3BSH62H 27 41 » 

(TOO ) 850 14* 33 41* 60* 71* B5* 

SSeneTO 700 74 07* IM 14 33 51* 
(732 ) 750 44 71*90* 33* 58 78 

Hectare <57 a - - 13 - - 

(487) 500 U 35 48* 19 29* 36* 

Op toft Era ra *3 

Button HO M 29* M 8 12* 16 
(168 ) ZOO 7H It* 15 20ft « 27* 

■ Ucbrfm eaeutQr pdas ftenttoue eftto » «v 
based on ttostog offer price*. 

Betto r 8, Total im ip a e tc 30,081 Cate 
T3J62Pto 18JW 


Ca0K Dtptom% Magraarv W, Pipe (H brh— 0 , P a ill. f*nm HoteAe, S0»l iiS n» A Pm 
Pag* (HHchaaQ, Ryan Hotais. 


LONDON RECENT ISSUES; EQUITIES 


tow Amt 
price paid 

P op 

Md. 

nq> 

(Eng 

1994 

HUi Low Stock 

Owe 

prica 

P 

4/- 

_ 

FJ> 

219 

100 

92 jAmmascan 

98 


- 

F-P. 

20,1 

89 

30 BatoG Shn Wn s 

60 


100 

FJ*. 

1HA 

102 

100 Beacon Im Tat 

IDS 


. 

FJ>. 

1.75 

48 

43 Do. Wananta 

46 

-1 

185 

FJ». 

74.1 

173 

IBS Chamberiafci Ph. 

IBS 


- 

FJ*. 

1JX 

1% 

1 Conti Foods Wrta 

1 


120 

FJ*. 

115 

133 

118 Copyright Prom. 

125 


- 

FA 

31A 

04 

91 INVESCO Jpn Dbc 

91 

-1 

- 

FA 

136 

50 

*2 Do. Wanants 

48 

♦% 

- 

FA 

- 

77 

63 JF B Japan Wrta 

55 


- 

FA 


56 

35 $Mognun Power 

56 

44 

23 

FA 

me 

31 

29 Ortls 

29 


- 

FA. 

060 

17 

5% Parthar Wtoranta 

17 


- 

FA. 

1JS6 

40 

Jo I'BUIAW 

40 


150 

FA. 

1B2 2 

162 

157 Pta Property kiv 

161 

+1 

- 

FA. 

456 

44 

36 Sutar Wrta 69AJ4 

39 

41 

100 

FA. 

181 

105 

97 TR Bro Gth Ptg 

105 


- 

FA. 

140 

35 

29 Tops Eats Wrta 

30 



tops 

Sep 6 

Sap 2 

Sep 1 

Aug 31 

Yr ago 

•Hoh 

low 

2478.9 

25122 

25062 

2509.4 

2535.0 

23717 

271X6 

2240.fi 

4.12 

4.07 

4.08 

4.07 

4.03 

iaa 

446 

143 

192 

185 

187 

188 

180 

4 18 

195 

3.82 

1808 

1128 

1824 

1827 

1844 

2728 

3143 

77.89 

16.66 

1189 

1184 

11B7 

1105 

25.75 

3060 

1161 


FT GOLD MINES INDEX 


an XAb Sra Sra fare 
5 rete 2 1 ' — » 

>IMM08ff «53J3 4*7 ZU9LM ZOBBS t75*S 


A0fes(iq 337051 +2J) 330173 322Z24 2154.79 <05 3440* 

AU0bbb(q 27K27 -4L1 2717^ 283590 203375 TO 301181 

MMMlhana 171178 +0.1 1T10J38 1678Z0 159845 075 2039B 

Op pl ift It* nranrW Thnea Unto 1994. 

Fbm h brecrat* toar number tt cnpeM. Been UB Dedaa. Beaa tone muxi 5 
Piadaoaraer Gbd Mmb tadK Sra 5 : au : dqra danga: *&• peto Yaer agre 1700 1 1 
lato pricaa Mmabto lor to aWan. Madto etod BWM Ctnto «d USA. 


jUdft 

Mgti TO 

TO 

2367 AO 1522.86 

405 

344040 190243 

TO 

301189 188X18 

075 

TtpnrA 138U0 

i tone tnoBJDO sinzrez. 


RIGHTS OFFERS 

tow Aipou* Latest CkMfcig *w- 

prica paid Ranun. 1094 price 

p Hate Low Stock P 

32 M 3710 1%pm %pm Ragtan Props 1pm 

FINANCIAL TIMES EQUITY INDICES 


Old. <&». yWd 4.12 4JJ7 4JJ8 4.07 4.03 3,68 448 3.43 

ton. ykL % Mi SJ02 5te 5-87 5te 180 4E8 5 lBS 3.82 

WErattonrt J&OS 1AL28 1S24 1827 18*1 2728 3143 17.W 

P/E ratio n0 18.66 IBte 18E4 18J57 19.05 25.75 3OJ0O 1&91 

-Fgr 1804. CMRray Start Mn ataoe COmpBedOR Htfi 27136 2«»«: km iMNO 
FT Onfany Shea into toe am mas. 

Ordinary Share hearty dia npaa 

Opan 900 1000 11 JO 12J0 13J0 14JOO 1SJ» 16-00 Hflti Law 
25 18.5 2508.6 24915 2501 £ 24973 204.7 2494.8 24I&8 2478.9 2520.1 2477.4 
Sap 6 Sep 5 Sap 2 Sap 1 Aug 31 Yrapo 

SEAQ bargain 27,677 29.703 28.859 79.323 31.&43 26^35 

Equity tunawer (Em)t - 12B2.6 14918 1656.0 1SZ7J 1352.3 

Equity bargakiet - 33,009 31830 34,122 35^26 29,027 

Sturee traded (mOt - 607J 540.7 687^ 5812 537.4 

IGrtuAig a mmuto buataera and nia m aa aaniMr. 


APPOINTMENTS 

ADVERTISING 

appears in tiie UK edition every 
■; Wednesday A Thursday 
and Id the International edition every Friday 

fta fortbeT intoroiarioa please call: 

Gareth Joaesoo +44718733779 
• Andrew Skarzynski ra +44 71 873 4054 









































































FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 



LONDON SHARE SERVICE 


xzsr-R § 


UOU -% 


MM 

YU 


CapEn 

□rs 

HE 

119 * 

1 3 

22 * 

8104 

- 

- 

714 

4 * 

115 

29 * 

— 

- 

112 

3 * 

303 

U 7 


- 

4808 

zi 

W 7 

tu 

— 

— 

ven 

4 * 

»7 

HA 

35 

329 

794 

4.1 

— 

2*88 

U 

184 

ms 

4 * 

- 

«u 

- 

MB 

AS 

11 

12.4 

tu 

u 

17 * 

59 * 

12 

* 

307 

— 

- 

37.1 

11.1 

- 

■mm 

27 

235 

TOM 

57 

n< 

4 u« 

as 

- 

8 U 

17 

0.1 

®m 

Ml 

14 

24 * 

_ 

3 U 

I 



Md KM 
C*Bn WE 

zzjsi v m 

vm as i?* 

nxn 4 ? - 

m x • 

4 *n is 323 
AMI 43 102 
1*14 47 - 

"sr 
ss s * 


MS W 
EwEa flrti P/E 
■U U »7 
054 34 6 * 

2 U U - 
UBB 4 .0 255 

a) u u 


& ± 
TO — 


MS KB 
Open Gfs RE 
3.720 40 115 

shtm 35 - 

BOM 59 <6 

UB 52 111 
3 J 41 75 5.1 

Z*M 42 - 

25 « 11 115 

4 fl 8 57 172 
8278 50 157 

4544 42 215 

1,108 It 311 
b HI - 
4418 35 282 


Md KM 

Capita am RE 
1814 12 38.1 

4 M 23 31.1 


158 - 185 

ms 55 * 


C33u 




us m 
oven am re 
a* - - 

117 - - 

1807 - 239 


1822 42 105 


■8 5 

414 — 
128 — 
492 +19 

■s * 


3 - 


jnitmiett N «Wd 


r ' ' n '‘~ ''j i n 


MtzSE £ 3 
82 +1 
121 +3 

17 % — 
08 + 3 * 


28 M + 2 

7 % -% 
no +3 
TOM — 

HI 

138 

sa t 

m +i 


I TOO 1 C 

SS+tf 

an -i 
■A -0 
a — 
ia -i 


MM “ 

TI 7 

234 B +1 

40 -6 

ia — 


m +i 

MM 


1 1*28 

39 

— 

in*» 

4 * 

147 

1 108 * 

45 

89 L 1 

, 2365 

35 


4812 

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490 342 8190 

243 DO *U 
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254 200% 8130 

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188 182 1202 
422 270 1588 


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300 2483 
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210 3885 
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38 


FINANCIAL TIMES 



WEDNESDAY SEPTEMBER 


7 1994 












































































































MJ2£Stok«a 











































































40 


FINANCIAL TIMES 


V 


V 



WEDNESDAY SEPTEMBER 7 1994 


CURRENCIES AND MONEY 


MARKETS REPORT 


POUND SPOT FORWARD AGAINST -"HE PCUUO 


EU talk helps D-Mark 


The weak dollar and renewed 
focus on the outlook for Euro- 
pean monetary union yester- 
day boosted the D-Mark, writes 
Philip Gawith . 

Recent discussion about a 
multi-tier Europe, the meeting 
of the EU monetary committee, 
and comments from senior pol- 
iticians and bankers, all 
encouraged investors to switch 
from other European curren- 
cies to the D-Mark. 

The German currency closed 
hi London at L1.016 against the 
Italian lira, from L1.011, and at 
FFr3.428, from FFr3.426, 
against the French franc. 

The dollar was also a victim 
of the D-Mark, showing no sign 
of bucking its recent weakness. 
It closed a pfennig lower In 
London at DM1.5426, from 
DM1.5537. Against the yen it 
finished at Y98.695 from Y99.25. 

The Bank of Japan's quar- 
terly T ankan survey of the 
economy provided no support 
for the dollar, despite showing 
an acceleration of the eco- 
nomic recovery. Some analysts 
had predicted that economic 
growth would help the dollar, 
by curbing Japan's trade and 
current account surpluses. 

Sterling finished 1 Vt pfennigs 
down against the D-Mark, at 
DM2.3904, but was firmer 
a gninafr the dollar , closing at 
31.5496 from SL548L 


Sterling 

Sept '94 lutoro contract, bW price 



■ Pond In Now York 


Sw6 — latest — -ftw-dasa — 

Sap* 1.5433 15475 

Intel 15482 15473 

3 nab 15(68 15(66 

1 yr 15343 15329 


■ Analysts said that the 
events of the past few days had 
reminded the market that, at 
least among the political clas- 
ses, the idea of European mon- 
etary union was stOl alive. 

The EU monetary committee 
yesterday discussed a Euro- 
pean commission report, rec- 
ommending that 10 out of 12 
member states take action to 
put their ffnanaw in order. 

Mr Theo Waigel, the German 
fmanra minister, addressed tho 
German parliament on the 
same issue, telling members 
that Germany would ensure 
the Maastricht treaty's provi- 
sions on financial discipline 
"are strictly observed." 

Mr Tim Stewart, currrency 
strategist at Morgan Stanley, 
commented: “This has high- 
lighted the pressure on second 
tier countries to tow the line 
on policy. Markets are starting 
to tier currencies and assets, 
punishing countries which 
don’t adopt convergent eco- 


nomic policies.” 

Analysts said talk about a 
multi-speed Europe had re-in- 
stilled confidence in the core 
currencies. The concern is that 
countries which drop oat of 
the core will be under less 
pressure to pursue virtuous 
economic policies. 

One interesting development 
outside of the EU was the 
announcement by Ann WIbble, 
the Swedish finance minister, 
that her Liberal party would 
join a coalition with right or 
left-wing parties in order to 
ensure a majority government 

The Swedish krona lost 
ground on Monday when opin- 
ion polls suggested that the 
opposition SDP might not win 
an outright majority in the 
September 18 elections, as pre- 
viously suggested. 

Mr Stewart, however, 
suggested that the prospect of 
an SDP in niiiwnra with a cen- 
trist party like the Liberals 
was probably preferable to it 
winning an outright majority. 
“It would tafcp some of the heat 
off the SDP in terms of Hauling 
with the left of their own 
party," he said. 


pick-up in demand. 

Mr Graham Turner, econo- 
mist at Tokai Bank Europe, 
said the survey showed the 
Japanese economy was “with- 
standing Y9A very welL” He 
said the quicker than expected 
pick-up in world economic 
growth, which had helped Jap- 
anese exports, was a key 
engine of the upturn. 

Mr Turner was sceptical 
about whether higher eco- 
nomic growth would curb 
Japan’s trade surplus. To the 
contrary, he said Japan’s 
exports were increasing across 
the board and forecast a “quite 
dramatic” increase in Japan’s 
bilateral surplus with the US 
over the next 12 months. 

Mr Mickey Kantor, the US 
trade negotiator, will hold 
talks today and tomorrow with 
Japanese ministers, but Mr 
Turner is sceptical whether 
these* can help the dollar. 
“Trade imbalances laid the 
foundation for the trade talks 
and they are far more impor- 
tant than the talks." 


SapB 


Saopa 

Austria 

(Sch) 

Belgium 

IBft) 

Denmarit 

<PKr) 

Hfiand 

CFM) 

Fnmoe 

ffTrt 

Gerrneiy 

(DM) 

Graced 

W 

Ireland 

W 

Baly 

w 

Luxemboug 

(LH) 

Nethertanda 

1H> 

Norway 

(NKr) 

Pcrtu^l 

M 

Spate 


Sweden 

ta<») 

Suttzartand 

(SFr) 

UK 

» 

Ecu 

- 

SORT 

- 

Americas 

Atgatew 

(Peso) 

Brad 

W 

Canada 

(C® 

Mexico ptow Peso) 

USA 

m 

PedOe/Mdcfla East// 

Ausbafla 

(AS 

Hong Kong 

CHKS 

tada 

(HS) 

Japan 

CO 

MatayM 

<«» 

New Zeatanrl 

(NZS» 

PM Arinas 

Peeri 

Saudi Arabia 

(SR) 

Singapore 


S Africa (Com) (H) 

S Africa (FtaJ 

n 

South Korea 

(Won) 

Taiwan 

fT5) 


Oaring Change BU/offar 
mfcfrpotra cn day spread 


Day's MkJ 
high low 


One month Three mo nths One year Bank of 
Rata XPA Rats UFA Rata MPA Eng. index 


108296 

-0093 

212-377 

109006 16 8049 

1652S1 

03 

108133 

04 

- 

. 

1155 

49582 

-05774 

491 - 179 

49.4730 495200 

495485 

09 

402985 

-Ol 

49.0788 

04 

117.1 

9.4581 

-00293 

541 - 621 

0.4329 9 4506 

9.4853 

-09 

9.4349 

-1.1 

95192 

-06 

118.7 

7.7781 

-0047 

6S3 - 878 

75120 7.7530 

- 

- 

- 

- 

- 

- 

645 

8.1948 

-00450 

911-990 

8.2320 8.1840 

8.1882 

-OS 

01989 

-05 

8.1810 

04 

1105 

22904 

•00148 

890 ■ 917 

2.4033 25867 

2JB04 

00 

ZZBT7 

05 

0% r>COQ 

15 

126.7 

360924 

-1503 

587 - 2S0 

365.433 m»an 

- 

. 

. 

. 

. 

- 

- 

12114 

+00009 

108 

• 119 

14)122 1.0058 

1.0118 

-OS 

1.C133 

-07 

1.019 

-07 

1045 

242958 

-153 

878 - 040 

2433.00 2423.06 

2430.59 

-05 

244958 

-35 

251058 

-03 

755 

492835 

-02774 

491 ■ 

■ 179 

49.4730 485200 

495485 

09 

495985 

-Ol 

400786 

04 

117.1 

£6823 

-00184 

812 ' 

- 834 

2.6957 2^734 

2.6824 

-Ol 

2.6795 

04 

2.6477 

15 

121.1 

105122 

—0544 

079 - 184 

105305 10.4908 

105092 

03 

105197 

-03 

106067 

Of 

aa.4 

244582 

-0888 

484 - 900 

245.429 244590 

240412 

-OS 

248 J82 

-oo 

. 

• 

> 

199540 

-0784 

150 - 330 

139.331 189.150 

199.68 

-2.7 

200505 

-25 

20356 

-OO 

865 

115138 

-00688 

049 - 22B 

115132 118049 

11J8353 

-25 

115853 

-2.4 

12.1083 

-05 

74.0 

2.0038 

-00179 

028 - 049 

2.0197 20028 


08 

15981 

15 

15858 

15 

1W9 

- 

- 

- 

- 

- 

- 

- 

- 

■ 

- 

705 

15548 

-0.0059 

643 - SS5 

15609 15S37 

15556 

-07 

15SS2 

-04 

15SS9 

-Ol 

- 


- 0541157 


15488 +0.0023 481 - 481 
15883 -0-0067 664 - 702 
2.1197 * 


154S8 1.5(29 
15786 15864 


187 - 306 

01213 

01071 

0119 

OA 

2.1192 

Ol 

01191 

05 

580 - 685 

65885 

55342 

- 

- 

- 

. 

. 

- 

492 - 500 

15610 

1.5440 

1.5493 

05 

1.5477 

05 

15348 

15 

918-943 

2.0957 

00827 


OO 

2X844 

-02 

2.1128 

-09 

708 - 786 

11.9850 11.8320 

IMTQi 

OA 

114697 

05 

115787 

05 

945 -274 

485510 485945 

- 

- 

- 

- 

* 

- 

644 - 032 

153580 150300 

1 52.628 

04 

151.743 

3.1 

147588 

35 

546 - 582 


3.9387 

- 

- 

- 

- 

- 

- 

653 - 689 

05700 

05598 

0571 

-15 

05788 

-15 

08011 

-15 


865 


825 


Ttafiand 


CO 152.938 
*9 35664 +0 

ZS) 25871 +0 

(Feao) 40.7933 +05406 118 - 750 41.0750 405118 

65117 +00068 100 - 134 

25240 +00022 230 - 250 

65294 -00014 268 • 320 

75042 -00007 869 - 215 

24155 +153 137 - 233 124252 123755 

(T3) 406998 +00827 813 - 178 405284 404111 

60 38.6936 +05288 680 - 190 307190 38.6680 


1865 


6.8167 5. 7809 
2-3250 25151 
55390 55127 
7.0042 83869 


18DR MM (or Sap 2. Bdtoriw rereads tateoPouid Spot ISMe •hew on* the tea dm dedroat place*. Forwart mas nn« teroedy quoted to ta mtac 
fam arelmpfed by currant taterre t ten Storing tndra cteatatad by ta Ban ket G ntfand. BsMesstaqe 18M ■ 1005U, QM and Md+atoe In bath Me red 
the Doiar Spot tost deified tan THE WM/R8JTS58 CLOSMQ SPOT ROES. Some vatua ss rotated by ta F.T. 


■ The T ankan report sent a 
clear message that the Japa- 
nese economy is recovering 
quite rapidly. The key diffu- 
sion index rose to -39 from -SO 
in the second quarter. This was 
better than Japanese compa- 
nies themselves had predicted 
three months ago, suggesting a 
quicker than anticipated 


■ Markets in the UK will be on 
alert hi the next few days for 
any interest rate move arising 
from today’s monthly mone- 
tary meeting. The balance of 
opinion has shifted away from 
an early policy tightening, 
reflected in money market 
rates which have barely moved 
in recent weeks. Three month 
sterling LIBOR continued to 
trade at 5% per cent 

In the futures markets Sep- 
tember and December short 
sterling contracts both bene- 
fited from the “convergence 
argument" - that futures mar- 
ket rates must converge on 
cash rates, as contracts near 
expiry. The September contract 
closed at 94J34 from 9132. The 
contract expires on September 
21. Weaker gilt prices 
depressed the longer dated con- 
tracts. 

In its daily money market 
operations the Bank of 
England cleared a £400m short- 
age by providing £424m liquid- 
ity at established rates. 


DOLLAR SPOT FOR 


mmmm 


HE DOLLAR 


Sop 6 


Clodng Chang* 
mid-point on day 


Btdfattor 

spread 


Day's old 
Hgh tow 


Ono month Three months Ons yssr JJ 3 Morgan 
R tea %PA Rate MPA Rtfs MPA 


Europe 

Aistta 

Betgfcsn 


Germany 

Owes 


tety 

Lucamboug 

■ i . i - - i _ _ 

iwWKJnalQS 

Noway 

Portugri 

Spent 

Sweden 

SwttzMtand 

UK 

Ecu 

SORT 


(8 an 

105805 

-0571 

580 ■ 630 

109300 105570 

10.8805 

05 

105603 

05 

107865 

07 

- 

(BFi) 

315040 

-0211 

000 - 180 

325000 31.7750 

31529 

-05 

31544 

-OS 

31584 

-05 

- 

idkii 

01038 

JIMB 

028 • 048 

8.1433 

01008 

8.1101 

-13 

8.1311 

-15 

6200B 

-1.7 

- 

<FM) 

65194 

-00354 

144 - 244 

5.0500 

5.0124 

5.0194 

05 

5.0269 

-08 

55894 

-1.4 

- 

(mj 

BMW 

-00348 

873 - 880 

55245 

52840 

52911 

-07 

52974 

-07 

52577 

05 

- 

(Pi 

15426 

-05111 

421 - 430 

15645 

1.5411 

1.5428 

-02 

15429 

-Ol 

15388 

03 

- 

(on 

234550 

-15 

700 - 000 

238500 234500 

235.15 

-15 

235.825 

-1.7 


-15 

— 

w 

15322 

+05002 

317-326 

15389 

15301 

15311 

08 

15272 

13 

15057 

1.7 

- 

(U 

158758 

-2.82 

775 - 800 

157250 1565.70 

1572.43 

-35 

158258 

-35 

183858 

-45 

- 

(Lft} 

315040 

-0211 

900 - 180 

32.0000 31.7780 

31 .829 

-05 

31544 

-05 

31 564 

-OB 

- 

« 

1.7310 

-00123 

307 - 312 

1.7430 

1.7289 

1.7313 

-02 

1.7314 

-Ol 

12272 

02 

- 

HKD 

8.7838 

-QfftfSf 

828 - 848 

85262 

07808 

6. 7863 

-0.4 

07988 

-09 

8.7158 

15 

- 

(Es) 

167500 

-073 

800-000 

158550 157.770 

158.65 

-72 

100.825 

-85 

1875 

-83 

- 

(Pt^ 

128576 

-naan 

550 • 800 

129220 12OSS0 

12858 

-25 

12951 

-25 

132505 

-Ol 

- 

(SKr) 

7.6238 

-00521 

200 - 275 

7.7108 

75181 

75433 

-at 

7.8838 

-3.1 

7.8938 

-35 

- 

ESFrt 

15932 

-00129 

928 - 935 

15064 

12920 

12925 

05 

1291 

0.7 

12814 

05 

- 

B 

15496 

+05015 

492 - 500 

15510 

15440 

154S3 

02 

15477 

05 

15348 

1.0 

- 


15349 

+00071 

346 - 351 

12348 

12265 

1234 

09 

12321 

09 

12245 

05 

- 


- 1.45184 


■ OTHER CUHNSNCmS 


Sep 6 


Ite 


UAL 


e s 

185.129 - 185389 HXLS90 - 106390 
2896.00 - 209800 174500 - 1750X0 
0.(610 • 0.(622 02970 - 0298? 

35414J - 3S4793 22860X • 228800 
3457.10 - 3472X5 223150 • 22(1X0 
5X885 - 57000 30715 - 30735 


Argentina 

(Peso) 

09994 

+0.0005 

933 - 994 

09994 

05993 

. 

. 


- 

- 

- 

- 

BrazO 

(RD 

05830 

-05065 

820-840 

08880 

08820 

- 

- 

• 

- 

- 

■a 

m. 

Crate 

<CS) 

13679 

+0.0031 

878 - 681 

13633 

13633 

13685 

-05 

13702 

-0.7 

13834 

-1.1 

- 

Mexico Maw Paso) 

33095 

+05145 

940 - 990 

33990 

33940 

33975 

-04 

3.3983 

-03 

34067 

-03 

— 

USA 

<*> 

- 

- 

- 

- 

• 

• 

- 

- 

- 

- 

- 

- 

PadSc/MkM* Eart/Afriea 












Austrteta 

(AS) 

13S08 

-00016 

503 - 512 

13532 

13473 

13511 

-02 

13518 

-03 

13591 

-0.6 

- 

Hang Kang 

{HK« 

7.7278 

-00002 

271 - 281 

7.7281 

7.7271 

7.7274 

0.0 

7.7281 

OO 

7.7431 

-02 

- 

tada 


313700 

- 

72S - 6/6 

313725 313875 

31,455 

-33 

313 

-25 

- 

- 

- 

Japan 

(Y) 

68.6BS0 

-0555 

600 - 300 

99.1900 985300 

98.485 

28 

98366 

23 

95.82 

29 

-a 

Malaysia 

(MS) 


+00012 

587 - 537 

25540 

25495 

2544 

43 

25327 

32 

23062 

-21 

- 

New Zealand 

(N2 S) 

15566 

-00007 

S3 - 573 

1.6584 

1.6559 

15575 

-07 

1.8594 

-07 

1.6847 

-05 

- 

PhEbpiran 

(Pmo) 

263250 

- 

500 - 000 

285000 26.1500 

- 

- 

- 

- 

- 

- 

- 

Saud Arabia 

(SR) 

3.7505 

+0.0001 

503 - 606 

3.7508 

3.7503 

3.7518 

-04 

37559 

-08 

37746 

-08 

- 

Singapore 

ESS) 

1.4898 

- 

995 - 000 

15000 

1.4990 

1.4884 

1.1 

1.4985 

09 

1.4898 

07 

- 

S Africa (CamJ 

1 (R» 

35683 

-00045 

tifb - 690 

35835 

35635 

3.5838 

-52 

38121 

-45 

33888 

-34 

- 

S Africa pru) 

W 

45200 

-0005 

100 - 300 

45300 

45100 

45537 

-9.0 

45125 

-82 

- 

- 

- 

South Korea 

(Won) 

801.400 

+025 

300-500 

801500 801.100 

804.4 

-45 

8075 

-32 

828.4 

-Ol 

- 

Taiwan 

(15) 

262000 

+05142 

950 • 050 

282060 28.1720 

9R.97 

-09 

2626 

-05 

- 

- 

- 

Thertand 

(Bt) 

245700 

-05086 

600 - 800 

24.9800 245600 

200425 

-35 

25.17 

-32 

D C UK 

-27 

- 


190R rats fcr Sop 2. Bktater *md» In tbs Qatar Spat tstfe show ady tea tat m 
but ta fcnpfcd by current Mot rats*. UK. ta s ni 4 ECU are quota d In US currency. JJ>. Mor® 


Rmrrant ratal ta not rsreefe quoted is te 
W Mow Sap 5 Basa l ar s ii pe 1990*100 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

Sap 6 BFr DKr FFr 

DM 

IE 

L 

R 

NKr 

ES 

Pta 

SKr 

SFr 

E 

c$ 

s 

Y 

Ecu 

Belgium 

(Bftl 

100 

1019 

1833 

4350 

o rre 

4929 

6.442 

2133 

4906 

4042 

2337 

4387 

2329 

4500 

3.143 

3105 

2547 

Denmarit 

(DKil 

5210 

10 

8384 

2327 

1.089 

2568 

2638 

11.11 

258.7 

2106 

1249 

2119 

1.067 

2240 

1338 

181.7 

1527 

Franco 

P-Hf) 

6014 

1154 

10 

2917 

1.234 

2964 

3273 

1283 

2906 

2431 

14.41 

2448 

1220 

2586 

1390 

1883 

1532 

Germany 

(DM) 

2062 

3957 

3428 

1 

0.423 

1016 

1.122 

4397 

1024 

na-vt 

4341 

0838 

0418 

0887 

0348 

8337 

0525 

Ireland 

(K) 

48.74 

9355 

3105 

2364 

1 

2403 

? 

1040 

2420 

1973 

11.68 

1582 

0889 

2396 

1532 

1512 

1241 

Italy 

(U 

2029 

0389 

0337 

0098 

0042 

100. 

O110 

0433 

1007 

8201 

0486 

□nm 

0341 

0067 

0064 

Htxre 

0052 

Namartands 

<H) 

1837 

3526 

3055 

0391 

0377 

905.7 

1 

3519 

9124 

7427 

4403 

0747 

0373 

0790 

0578 

5731 

0468 

Norway 

(NKr) 

4639 

8.999 

7.798 

2274 

0562 

2311 

2552 

to 

2328 

1805 

1124 

1507 

0551 

2018 

1.474 

1453 

1.194 

Portugal 

(Ea) 

2014 

3885 

3349 

0977 

0413 

9828 

1.096 

4295 

100. 

8131 

4328 

0819 

0409 

0886 

0633 

8248 

0513 

Spain 

(Pta) 

24.74 

4.748 

4.113 

1200 

0508 

1219 

1348 

6278 

1228 

100 

6529 

1306 

0502 

1364 

0778 

78.78 

0830 

** -i-_- 

CMVODDV1 

(SKr) 

41.73 

8.006 

6538 

2024 

0856 

2057 

2271 

8.899 

2072 

168.7 

10 

1337 

OB47 

1.794 

1512 

1295 

1363 

Switzerland 

(SFr) 

24.69 

4.720 

4.088 

1.183 

0504 

1212 

1.338 

5245 

1221 

89.40 

5383 

1 

0499 

1.057 

0.773 

7850 

0326 

UK 

« 

4958 

a458 

0194 

2390 

1.011 

2429 

2382 

1031 

244.7 

1992 

1131 

2004 

1 

2119 

1540 

1529 

1255 

Canada 

(CS) 

2326 

4.463 

3887 

1.128 

0477 

1146 

1.288 

4.960 

1155 

9431 

5573 

0948 

0472 

1 

0731 

7216 

0582 

US 

(S) 

3131 

6.106 

3200 

1543 

0653 

1568 

1.731 

6.785 

isao 

1283 

7.824 

1294 

0346 

1588 

1 

88.71 

0810 

Japan 

(V) 

3223 

8138 

5359 

1553 

6512 

15886 

17.54 

6a 74 

1800 

1303 

7724 

1311 

8540 

1336 

1013 

1000 

8208 

Ecu 


3927 

7538 

6529 

1.904 

0806 

1935 

2137 

8375 

1953 

158.7 

8.410 

1587 

0797 

1388 

1234 

1213 

1 

Yen per t jnO: Oontah Kronor. FVandi Rw*. Norwete*" Kronur, and SheedMi Manor par 1ft Origlai 

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H D-MARK Ttrrons 0MM) DM 125,000 per DM 





■ J4PME0I 

E YHI RITURES (MtQ Yen 125 per Yen 100 





EMS EUROPEAN CURRENCY UNIT RATES 

Sap 6 Ecu can. Rate Change W */- (ram 95 

against Ecu on day 


rates 


can. rate 


Dh». 

tad. 


Netherlands 2.19672 

Germany 154984 

405123 
0506828 
nrangt 
Portugal 192.854 

Denmark 7,43679 

Spain 154550 


214280 

-030396 

-246 

6.11 

- 

151028 

-000354 

-202 

5.63 

- 

395678 

-00378 

-210 

5.72 

15 

0800845 

+0303557 

-025 

are 

2 

654935 

-000418 

0.16 

353 

-1 

195.467 

-0.005 

155 

212 

-9 

755827 

-000065 

133 

134 

-11 

150648 

+051 

350 

030 

-24 

290347 

-0214 

938 

-831 

_ 

194236 

+1047 

850 

-4.44 

- 

0799241 

+0003672 

159 

138 

- 


NON BM MB48ERS 
Greece 264513 

Haty 1793.19 

UK 0.786748 

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RtateW Tanas 



Open 

Latest 

Change 

High 

Low 

EsL vri 

Open tat 


Open 

Latest 

Change 

Hgh 

Low 

Eat vol 

Open hL 

Sep 

06434 

03482 

+00056 

0.6488 

00434 

49,170 

99507 

Sep 

13107 

1.0138 

+03035 

1.0162 

13093 

23560 

57.758 

Dec 

0.0440 

03482 

+03056 

03487 

00440 

3,058 

10321 

Dec 

15149 

13202 

+03034 

1.0217 

1.0149 

3,063 

12530 

Mar 


03480 


0.6480 


21 

2319 

MV 

■ 

1.0275 

- 

1.0275 

- 

14 

1,755 

■ SWISS NUNC PUTUHKS 0MM) SFr 125,000 per SFr 



■ STOTXJKQ FUTURES (Jkta) E82500 per E 




Sep 

07669 

0.7734 

•00062 

07735 

0.7668 

22,705 

35.175 

Sep 

15484 

13486 

+03028 

15482 

13480 

13560 

34571 

Dec 

07674 

07748 

•0.0080 

07749 

0.7674 

1.714 

6.236 

Dec 

15444 

15460 

♦03024 

15432 

15432 

1367 

3369 

Mar 

07700 

0.7780 

+00074 

0.7760 

07760 

1 

59 

Mar 

“ 

15440 

“ 

15440 

“ 

3 

183 


■ HIAPCUHM 881 t/t OPTIOm E315S0 (centa par pound) 


Striha 

Prica 

Sep 

- CAULS - 
Oct 

Nov 

S«P 

— PUTS — 
Oct 

Nqtr 

1.480 

934 

952 

950 

- 

. 

005 

1.475 

7.16 

7.14 

732 

- 

002 

020 

1500 

4.64 

4.84 

&12 

- 

021 

057 

1328 

233 

235 

232 

OIO 

070 

138 

1360 

050 

132 

138 

0.84 

1.71 

234 

1378 

006 

057 

135 

271 

330 

334 


mp 


Margined Foreign Exchange 
Trading 

Fast Competitive Quotes 24 Hours 

imaiwyFAj 



Tfcl: 071-815 0400 or Fax 071-329 3919 


Prentoua dor's neL. Cafe k/A Pua 7VA . Pro*. d^Ta open tau CaBa WARM 7 


WORLD INTEREST 1 RATES 


MONEY RATES 

September 6 Over 

night 

One 

month 

Three 

anhs 

Sbt 

mtea 

One 

year 

Lamb. 

Inter. 

Dis- 

rate 

Repo 

rare 

Belgium 

4% 

SVfc 

5% 

59 

64 

7.40 

430 

_ 

week ago 

4!k 

55t 

SVfc 

59 

6tt 

7.40 

4.50 

- 

Prance 

5ft 

516 

SH 

59 

6ft 

530 

- 

6.75 

week ago 

5ft 

5M 

Mk 

68 

6* 

5.00 

- 

8.75 

Gamov 

5.03 

4.85 

4.85 

532 

533 

6.00 

430 

435 

week ago 

5.50 

4.95 

456 

532 

533 

6.00 

430 

4.86 

Ireland 

*3 

SVt 

84 

64 

7H 

- 

- 

625 

week ago 

4B 

SV4 

6ft 

6ft 

m 

- 

- 


Rely 

0’A 


80 

04 

104 

- 

7.60 

246 

week ago 

8 Vi 


sa 

«4 

10* 

- 

7.50 

8.45 

Nettwrianda 

4.B4 

4.96 

5.02 

5Vt 

5.48 

- 

529 

- 

week ago 

4.84 

456 

4.89 

611 

6.41 

_ 

525 

_ 

Swttcertand 

3» 

4ft 

4- 

4Vfc 

4* 

0625 

330 

- 

week ago 

3% 


4ft 

4M 

49 

6326 

330 

— 

US 

4« 

49 

49 

554 

5* 

- 

430 

- 

week ago 

4ft 

4fl 

48 

SVi 

5* 

— 

4.00 

- 

Japan 

2H 

2*6 

2* 

24 

29 

- 

1.75 

- 

weak ago 

254 

2 Vi 

2H 

2ft 

29 

- 

1.75 

- 

H S UBOR FT London 








Interbank Fbdtag 

- 

4% 

C 

54 

59 

- 

- 

- 

week ago 

- 

454 

S 

5ft 

59 

- 

- 

- 

US DoBor CDs 

- 

4.85 

430 

537 

538 

- 

- 

- 

week ago 

- 

439 

430 

536 

531 

- 

- 

- 

SDR Linked Da 

- 

316 

34 

3* 

4 

- 

- 

- 

week ago 

- 

316 

34 

3K 

4 

- 

- 

- 


■ THRESliONTtl EUHOMARK PUTtHUS (UFfS* DMIm points of 10095 



Open 

Sett price 

Change 

«gh 

Low 

EsL Vd 

Open tnt 

Sep 

9437 

9428 

•031 

9439 

9436 

10876 

129760 

Dec 

94.70 

94.70 

-031 

94.79 

94.78 

23015 

171258 

Mar 

94.40 

0439 

•033 

94.41 

9428 

17739 

168041 

Jtai 

94.03 

04.02 

-033 

94.06 

84.01 

11447 

108645 

■ THKBS MONTH EUROURA BfT-RATfi nJTttetBS (LIFTS) LI 000m pofcxa ol 100* 


Open 

Sett price 

Change 


Low 

EsL vci 

Open kit 

Sep 

9035 

90.97 

-033 

aasa 

9030 

3296 

21724 

Dec 

89.82 

89.66 

320 

8932 

8930 

7309 

33337 

Mar 

8920 

8937 

-024 

8922 

8934 

2203 

17512 

Jun 

88.77 

88.71 

-018 

8830 

88.71 

934 

13664 

■ THRBB 

MOffTH 

EURO SWISS FRANC 

IVTUB 

5 (UH=^ SFrlm potato of 100* 


Open 

Sett price 

Change 

Writ 

Uror 

EsL voi 

Open ire. 

Sep 

9538 

as. 60 

+031 

96.70 

9637 

1184 

16618 

Dec 

9528 

9520 

- 

9529 

9524 

1913 

15784 

Mar 

8439 

9436 

-031 

95.00 

9438 

515 

11480 

Jut 

94.68 

9438 

331 

94.71 

9438 

248 

6968 

■ 1WEB IBOKTH ECU RfTURBS (LIFTQ Ecu 1m prints Ol TOO* 



Open 

Sett price 

Chnge 

High 

Low 

EaL voi 

Open bit 

Sep 

9432 

9431 

331 

94.02 

9431 

683 

9208 

Dec 

93.44 

9339 

335 

93.44 

QR-’W 

1194 

6917 

Mar 

93.03 

92.98 

337 

93.03 

9238 

491 

4212 


3262 

9237 

-037 

82.82 

M37 

110 

1696 


■ LFFE ftifeisa kedad an APT 


ECU linked Da add ratea: I mtK 5lfc 3 mo* 55: 8 Mhs; SVk i yvar CM. S UBOR Harbonk Up 
raaas are otfared ms +» S10m auotad la m martist by tour refciu e o a bank* at 1 lam oech wot u na 
on. Tha bants ore; OWm That Bank Of Tcfeo. BodferS and N a tal WMBiS r uf r. 

MM nfea dq tan tar o» dcmgdc Msw y Mn, US 3 COb and SDR IMnd Oqnlk (Dte- 


THRm SSOffTH BWOPOLLAH pA«4) Sim points at 1009i 


EURO CURRENCY INTEREST RATES 


Sep 6 

Short 

7 day* 

One 

Three 

Sb. 

One 


tonn 

notice 

month 

months 

mornhs 

year 

Belgian Franc 

4S 

■ 4,1 

4fi. 

4H 


• 5,‘« 

5% 

- 5*i 

5{J - 

5H 

&2 

■ ft 

Danish Krona 

5»4 

-4% 

sA - 

5,1 

6 - 

5% 

(fit 

-83» 

7l| 

-7 

7 It 

•ra 

D-Mark 

413 

-4H 

4H- 

Mi 


-4H 

5 - 

■ *1 

s»a 

- 5 

5.1 

-5ft 

Dutch Guidsr 

5 - 


4H- 

*H 

*13 

-Ml 

5 - 


6 1 * 

- 5 

6«z 

-6* 

French Fnnc 

5* 

-51* 

tf - 

5ft 

Vi 

-5»| 

5* 

- Vi 

«- 

SJJ 

6.1 

-6ft 

Portuguese Esc. 

12*0 

-11% 

10 - 

9\ 

11 • 

10'+ 

11% 

- \&t 

11^4- 

ml, 

Hftl 

■ Hh 

Spanish Peseta 

7«2 

•Th 

7» 2 - 

7 a 

7*4 

■7l t 

3>V 

-w 

8|1- 

8*1 

sit 

-aa 

Storing 

S - 

4% 

<Q- 

Mi 

5i 

-4» 

5*4 

-5A 

5U- 

6i3 

Vt 

-612 

Safe* Franc 

3* 

-3H 

4*a ■ 

3% 

4A 


4A 

-4A 

4*2 - 

4^1 

Mi 

■4ft 

Can. DoBor 

5»* 

-41! 

s&- 

Vt 

Sh 

-S'* 

Vt 

- 5 s * 

«a- 


7 & 

■fit 

US Dc*T 

4» 

■4ft 

4H- 


4\ 


5- 

•4% 

5&- 

5A 

5H 

-5ft 

(Man Ura 

9 - 


1^ 

■ 8 

«A 

-8A 

8» 

-8H 

9h- 

V* 

10^ 

- ioV 

Von 

2A 

-21, 

2.1 - 

»% 

3.1 

-2Jj 

3}! 

-aii 

2>l- 

W 

23» 

" 2ft 

4dm SSIng 

37 8 

-3^1 

3%- 

3^b 

4.1 

-4 A 

4t| 

-4% 

5A- 

5.1 

5U 

-9ft 


■ 

Open 

Latest 

Change 

Hgh 

Low 

Eat voi 

Open ire. 

Sep 

9437 

9437 

+001 

9437 

9436 

856B0 

373328 

Dm 

9431 

9430 

. 

9431 

9439 

179318 

505.193 

Mot 

9433 

94.01 

- 

9433 

9430 

118338 

385.939 


■ US THEASWV BBJ. FUIWES }WM) Sim per 10055 


Sep 

Dec 

Mar 


95l37 

8457 


9557 

9458 

94.63 


-051 


9657 

94.88 


9657 

9458 

84. S3 


2.479 10,468 

1598 10572 

23 4^73 


AS Opon Moreat Bgs.«a tar prmnouo day 
■ KIROiMRK OynOWS (L1FFE) DMIm potatsaf 1009t 


SMI non iw are c*8 tor Ilia US Qa ta r M Yex adwrt: nm days' notes 


Strike 

Price 

Sep 

Oct 

CALLS - 
Nov 

Deo 

Sep 

Oct 

PUTS 

Nov 

Dec 

9475 

031 

0.10 

0.13 

0.16 

0 

039 

0.12 

are 

9500 

0.02 

ao3 

acts 

036 

036 

027 

039 

030 

9625 

0 

aot 

0.02 

032 

ngq 

030 

asi 

051 


(MAUF) Paris Interbank offered rate 



Open 

Sett price 

Change 

Hgh 

Low 

Bit vd 

Opdl K. 

Sep 

94.29 

9431 

♦6.01 

9434 

9436 

7.708 

42377 

Dee 

9330 

8333 

+0.02 

83.85 

93.77 

19385 

48.488 

Mar 

83.43 

33.44 

+0.01 

93.48 

9338 

nun 

28356 

•fun 

93.11 

93.14 

+002 

83.15 

9338 

4357 

27389 

M THfOEB WWTH EURODOLLAR (UFFEJ- $1m pcinte of 1009k 




Open 

Sett pries 

Change 

High 

Low 

EsL vd 

Open bit 

Sep 

8437 

94.87 

+031 

94.97 

94.97 

5 

oerw 

Dec 

94.31 

9439 

-032 

9431 

9431 

5 

2003 

Mar 

- 

94.00 

-003 

- 

- 

0 

1436 

Jun 

- 

83.68 

-033 

- 

- 

0 

334 


Eat. «oL tatte. CMs 2082 Pl*» S4CL Prefeus <ta/i span M. Cata 2ES786 Puts 180790 
“ ■■ i PJFE) SFr 1m potata of 10099 


Stria 

Price 

9530 

9075 

3600 


Sep 

ai9 

052 

0 


CALLS 

Dec 

058 

052 

0.01 


Mar 

an 
aoe 
a cn 


Sep 

0 

0.08 

051 


PUTS 

Deo Mv 

028 053 

048 053 

073 1.06 


Eat voL Kite. Cdto 0 Pua 0. Preirioua Cay"i span M, Cata 2305 Pua 17S5 


UK INTEREST RATES 


LONDON MONEY RATES 

Sep 6 Owr- 7 days 


One 


Thra* 


night 


One 

year 


-8N 

-«a 


htertank Sterihg 6le-3 *U - 4fl 6i • 4£| S£ ■ 5,i 8-5% 

Staring CDs 5 - 4{J 5^ - Si Sfl - SH 

Treasury EBta - 4g - 4% 5i - 6% 

Bank BSs 4H-4fi5,’,-5%S%-5V 

Local aultidriydaps. 5, l « - *8 Si - 4» dfi - 4» - 5% SQ - 5JI SU - 6tt 

□tsccunt Marteet deps 4*z - 3N 4^ - 4*t 


UK datetag bank baas lending rate 5'+ par cent ton February a, 1994 

Up to I 1-3 35 65 


9-12 

months 


3* 


3% 


Certs of Tax dep. (000500) 1*2 4 3% 

Cads of Tk dap. undvCIOCUloob i | 2pc. OapoaSa withttain lorcatei \pc- 
An tandarnaaolriaootas 63M8 p c. ECGD tocad I— Sag. EaponFtaancs. MMaupdeyfepai. 
1984 Agreed tree tar period 9*> 28. 1M4 n oa 2S. 1994 S c hemes U & « OBZpc. nte swi c e ode tor 
period Jteyao. 1994 » Aug 31. 1994. Schemas IV 8 V &678pa Ftaice House Bare Me 6hpc Sera 


n. 19 


■ TWteX MOfftW 3TBOUIQ PUTUReS (LFFE) £500500 pt*l» « 100% 



Open 

Sett prica 

Change 

«9h 

Low 

Eat vd 

Open tat 

Stop 

94.33 

9434 

+002 

9438 

9431 

10843 

87319 

Dec 

8342 

93A5 

+033 

9330 

93.40 

36534 

1(2115 

Mar 

8238 

8237 

- 

92.73 

9235 

10161 

75320 

Jun 

92.13 

9239 

-034 

92.15 

9238 

-8048 

53222 


Tredod an APT. M Opon Inte rest Sgo. m ter preiku day. 


■ SHORT STBRLDK) OPHOKS (UFFQ £600500 points ot 10036 


SUf«a 

Price 

Sep 

- CALLS - 
Dec 

Mar 

Sep 

— PUTS - 
Dec 

Mar 

9425 

0.17 

034 

0.02 

aoe 

a 84 

1.60 

8460 

0.04 

032 

031 

020 

137 

134 

9479 

0 

0 

0 

041 

130 

238 


EoL voL tetaL CMa 922* Puts 4217. Prsvfcjua <*v* open te. CMs 350981 Pua 291482 


BASE LENDING RATES 


AdamftOompBV — 559 

Aftod Thai Bote -525 

ABM 526 

•Here/ Andbaehar 626 

Barit d Banda — 625 

Banco Bbao 525 

BartrofCypna 525 

Bteftalbetend - 625 

Bankritade 555 

BankoTScoem -625 

Barcas Bark 525 

BritekdMd&te-- 625 

•emteiatptey&coLki 525 

CLBenkNedartand ... 525 

CtfetotNA 555 

Ctydeadato Barit. 525 

17h GKSMrita Btefc 555 

CouBsftCo. 62S 

Cracte Lyonnais 625 

Cypna Popriar Barit _553 


Duncan Laurie . 


« 

625 


Bata Bark Unfed- 825 
FteencH ft Gen Baric- 8 
•Hobart Fleming 1 Co -555 

Gtojonk 655 

•OrimanMehan 625 

Hte* Bank AO 2U1ch . 525 

O Ha m tws Bark 52 s 

HataUafi Sen kvBk. 526 

•MSsmjBL 52 

CHoen&CO -62 

Hong k ong & Shanghai 62 
Jtdan Hodgo Bank ... u 626 
•Lncpdd Joeeph ft 8 or* 62 

lioydsBsrik 52 

Medhrai Bank Ltd 52 

iriSand Barit 52 

-MoitBarMng 6 


•FtadjurrfwGueraotes 
CarpanteonUritadlino 
kngerauBnteadas 
abteMnghaSkrian. 8 
HoK8Bkar9coOBnd_ 52 
•SmBi&WferanSecs. 52 

TSB 555 

•UnSBdBkriNMSR- 52 
Unfly Twa Bar* Plc_ 52 
Watam Trust 92 

waeewevLaktav — 62 
YterWriraBank 62 


• Members ot London 
I nvoatm ont Banking 
AjscdMon 

* Ini 


rtteWasUTfester 52 

•ReeBretem-... 62 


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THE HANDSET OH YOUR FAX MACHINE ■■»+ St m tap A 

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Q h prt Equat$ One Hundred Stones 

-' crn 3 " ,Q: i:3:cr -- cs: w to'.-cp eon Csd Ir.tcrrcHma 1 e — lc, 
<?i ' 5^;: r .''. CP " OT Csi *™d*Gr. end ff v tvcr.cfi: 
’ “ .t.'.'U’ "J ' r ’"-' ro y !rG0?l1 oxp" 1 ’.'- 2 .'Sccd char: recdo r s • 



He uk 

FOKFICA LXO-! 


1. ci 

Dai ; s«? D,-,U 


CO WBUC TMAHACarigwr 
COWOSATIOM ftc 

M Old Jewry 

6C2R8DU 
Tcfc 071-8850900 
P4E 071-9720*70 


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° b,CthVe a " Dly!il f0 *- Praf.sdonet, inv „ tors 

0962 879764 

T (u-;\n Ri ^ e ^« b 32i^t^ gs t.wi^S ? 

— rtvn,i S02j ScH F3K 0424 774CS7 ■ 






FTNAN TIMES WEDNESDAY SEPTEMBER 7 1994 




■i SH 

a atw 28.300 MiwiWMi ag 

52 

a 


JzimZB 

5* 




Bm 


a*« iw -i5i. 
SAW 1E9E0 -16013 
Tlnti 10325 —17511 




HridZm 1 
KnfcsO* 81 



LpL 

Z2 _ 

5.0 _. 
SJ _ 
flj _ 

4.1 _ 

i 

59 _ 
59 _ 
104 _ 

2-410 

iAoo 

3-2 

2A _ 

B-40D 

1JB7D 

1020 

i%S 

792 

22 _ 
42 — 
2 J> _ 
U _ 
27 _ 

5 JO — 

P 

122 _ 
26 _ 
7-4 — 
2 D _ 
2.8 _ 

4^00 
0,71 D 
x nm 

23 — 
13 _ 


231 


%?. $ 


1 32 _ 

1 16 _ 

1 13 — 

1 _ 

- 

1 13 



! 22 

__ 

16 

WM 

1 16 

MW 

i 23 


1 33 


1 36 


1 M 


1 56 


1 56 

“ 

l 13 

MW 

r 13 



1 1.4 


i 16 


) 12 

- 

I 33 

- 

1 13 


t 13 

— 


INDICES 


S3 


—4 BIB 3BE _ 
10 1,370 1,080 OlB 


= = SS£ 


P3 




EE 


^ 4 : 


m 


u 20968.10 21012.14 25CNMI 102 1775880 20/4 


PC (Mw 1878) 


M 206803 267483 2B8U7 OB 


M(MMec(i/i*q 
* ifchofW/80) 


21008 20005 21078 534088 02 

10603 10729 10709 H3&10 37 


168738 7TK 

mm ss 


raw tMurfamano *1383 41096 42320 *8836 2 72 
TMHt Mta®n«Tl 113429 113080 114788 *0225 U2 


8020(1/101) 

M 

Bcmm fismm 

Cllitokl 

Madb KW*4ft075 
C W QMtt l f (>6P9 
ta*fcS(4n«3i 


146478 147282 1*8273 1WUS 02 

(j 480400 53058 5*36000 10 

M H 4071.17 4BB3J0 S10 
M 2} 434420 4B0090 238 
W (4 207048 218200 10 


329900 20*4 

«B3.i7 ton 


i v rurr' C,?!1 



PGO Gap (31/1200) M *«* 48218 48080 40 

^I nh^wapn aai 357.44 36087 36034 40UB V2 

NB^ttnnlpBnaSO) 19426 10518 10618 1*7*00 40 

Sm>01/1Z0O) 132771 1346.10 IMM2 UK® » 

OC 40(31/1207) 1961-46 190020 202037 23093 20 


mtfim 82238 Si® *K ®£S * 

2338.1 23430 23653 MB® » 

D«p(K2 m Z16SJ0 2171451 22007 2271,71 108 

msqn/im 8.426 8*82 soar tm wi 

S»U7(«| 1003587 9BBZM 980188 1220188 4fl 

SeMTO 462681 451025 4SR21 4B6M0 310 

SS^UTOS®) BBtSO 5DU2 5155B M1MS71 

SSmVMB) 19*380 19*187 183279 2002.18 20P1 

SLcMMUtlSra 08136 07324 88583 91737 1«5 

EISISm «™ «*■ “ 


129636 47 
103018 477 

78781 270 
214930 270 
199682 200 

90097 250 

830044 46 


CBSTRnfienpnd 83) 4415 4447 4458 C400 31/1 

(ZS«arpdB9 2798 2018 2817 ®*80 31/1 

0(1 40 (1/706) 217922 217651 217075 243984 30 

Oslo S&M&UBS) 1111-46 T10&30 112389 127110 ZB/2 

tStaSptVUQ 309648 310430 30S&2S 330937 4/1 

BTA(1937) 29444 29518 29604 322980 IBS 

SB M-Spc*«CW75) 577-30 57039 57570 8*181 4/1 

Jggt Mfcl 

JSE Odd CB/9/7q 25028V 24538 2W20 2582BD 8/9 

JXUpawrq 06028V 68008 6S868 B75780 150 

NorS^pB«VI0Dr 9775 9B981 04452 B97J0 B0 

IMddSE (30/1205) 29586 29950 30395 36931 31/1 

MfeBariBOa (10/9) 14298 14336 14602 1BB3LB0 31/1 


SAM Bkbd (3102/50) 125981 12668* 126686 14233* 31/1 
SBC Gmd (1/407) 94186 947.44 94091 1B9329 31/1 

WWMPEfaWfiS- 1 983647 B8863Z 701083 704082 2KB 

taS*SErQW75) 1535.14 1531 JO 153986 T75371 4/1 


40930 210 
25780 210 


68091 210 
2S8T83 913 
281280 200 


176980 140 
644930 Wl 


133430 6 tl 

115787 1877 

6B910 1377 


US INDICES 


MMtts 389588 3901-44 Xt3-C 397838 359335 39793S 4122 

(31/1) (4/Q pi/100 12/77X9 

Hone Bonds 86.18 9384 96.17 1KB1 86.43 10977 5490 

pi/11 (136| (1671008 *71/1001) 

TlBRVt 162789 163349 164222 196229 154002 186229 1222 

(Z/2) C«V4) (27204) (B/7732) 

LHMn 16455 18507 13916 22780 17071 25948 1001 

(371) (2475) pi 7803) JB74732) 

DJ kid Day'll N0i 392984 (902780 ) Lon 867188 (387138 ) mwotwira*) 

OoyH N01 86190! [391 X*2 ) Low 3880.72 06870* ) (Actus*) 

SSSt™ - ^47099 47117 475-40 48280 43992 48288 440 

(2759 (4/4) P004) 00/32) 

taUtnaV 55327 55583 55019 56889 51885 5BQ5B 382 

(2/2) (2V4) (272790 CW/®» 

FMdcU 4019 4036 4889 4094 4139 4848 064 

(1478) (47*1 (28003 (1/10774) 

NYSEQnp. 25983 360SB 25189 2B7.71 24114 26721 446 

(2/S m (272041 (2574742) 

MW MM IN 45554 454.02 45*84 4B789 42287 48789 2981 

(32) f®B) P2/B4) (971277S) 

IHSDM crap 75923 75885 76522 BUSS 58329 80UB 5*87 

(IB/9 P40) 0573794) (BinOfTa 


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1MM 1/7 

BBSS ion 
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Eat,-*! “g a SS a S5 a S5S 

SiEPwin «=»« 


fctstd CnpjJsn IBM 281174 259*18 25*5722888380 13/1 1298070 2473 

MMU 

MS CW U (l/wop 640.4* 641 5 8448 0*189 50 SUB 414 


BnkKkVWB/UBq 07183 138611 140186 16*0.18 31/1 VBM8 310 ■ MW TOM* ACTIVE STOCKS ■ T 

BmUs-ioo causa® tajaiE 121 887 122701 tsftn 2/2 114381210 - — 

JOpApE {JI/tZ/BQ « 34335 34240 398.19 571 29020 210 Rtty Soda ChOB Omm •* 

BaMOi BOHUP/US® 1B2S 19641 12780 1050 20 1*1* 21/4 MM prtpa oo dky 

MR HBUM 3890800 M 

■ CJkC-4Q OTOCK IWOBK FUTUMO (MATTF) iw»i 3074800 214* +1 

Opan StfOPrtoo Chong* wgh Iw Eat voi Opw m. SJUJaf ajw Sn 23H +h wse 
S ap 19930 19660 -aa.O 1S9&0 1B6&.0 22^37 39^18 PMV, Monti 2719,100 6044 .lk Man 

Da. 20024) 10764) -394) 20024) 18805 - &220 227SJD0 » nh» 


MVSECmp. 25093 36088 26189 287.71 24114 25771 446 

c/a m e/2041 ( 25 / 4742 ) 

MW MM IN 45554 454.02 45*34 48788 42287 48788 2B31 

02) C8/6) (92794) (9712772) 

IHSDM Omp 75923 75895 75582 BUHS SB379 80U3 5*87 

(167® (24 *) (1873/94) (31/10773 

■ mwos 

Sec 2 Aug 20 Aug IB Year ago 

Dow Jones kid. Dhr. Yield 2*3 184 2.73 290 

Aufl ai Aug 24 Aug 17 Year ago 

S & P Ind. Dtv. yield 2-3S 7-37 2.43 2.46 

S 4 P Ind. PTE ratio 21.11 20.73 234*1 2798 

U 8T08B9D AMP POOB3 BOO BUHB4 FUTUBBS 8600 Iknee IndM _ 

Open Latent Change Wgh Low EsLvoL OperW. 
Sea 47155 47090 -0.75 47195 471165 8296B 172960 

Dec - 47495 - - 17.128 74088 

Mar - 477.15 ... 244 4000 

Open HM flpune m hr pravtous dky. 

■ l«M TOM ACTIVE STOCKS ■ TftAPMO ACnVTTY 

mm Steda Oub Omm 

Mai price on ripy 2 Sap 1 Aug 31 

RDlifttea 3990500 « — MB MM M 

i i—awt 3074800 21MI +1 ™*““ 


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SSmawei iisbm ii9088 an va*** 


Sfip 19939 19600 -39.0 199&0 1968.0 22037 39018 PMta Monta 2/1B.1D0 6044 -W Inn Traded 2,929 2973 2873 

On 20020 19760 -990 20020 19809 - 3020 Rnmnaq 2078809 35 Abes 940 844 1018 

Deo ■ 20210 19059 - 20260 19090 43 9050 Lfco 2031,100 IBM -H Ms 1068 J0BB 9*8 

Opw htawt toun to pnwkxo <Oj. Itag MUndt 2.168000 MBA Unctanged 921 731 711 

my FBb 2056900 Z1» /Me* Mgla 47 *9 85 

Aa* T S T 2029000 2BH >41 Na* LOOT 2fi 29 19 

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Financial Times. Europe’s Business Newspaper. 



















































FINANCIAL. TIMES WEDNESDAY SEPTEMBER 7 1994 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


17* 13*4 MR 

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bet Oh « E Me Hgl Uw Do* torn 

MR 048 3J 21 114 13% 01 A 13>a A 

_ ALLm* 018 1.1 38 432 15$ lA lA A 

73* 57* AMP 148 £3 26 1283 70% 71% 72 +% 

72% 52% AUR 103 1045 5A SB* 56$ -Me 

B 3%*» 1] (7 A » A % 

56% 35% AS* 240 18 34 1733 52 50% 61$ +1% 

31% 25% ABOIL QJB U 17 3280 30% 29% 29% 

U%11%MBHPr ISO 15 10 181114% 14% 14% 

23% 17% ARUM 052 13 77 22% 22% 22% A 

18% 11% AqdnsHn 27 101015% 15 15 -% 

31 22% ACE Ud 0.44 1.9 28 2258 23% 22% 22% 

12% 8%«MBWhx 1X109 208 10 9% 10 *% 


10% 7*AGMMppr 0X11.0 
10% 7% ACM GKSp* 095114 181 7% 7% 7% 

12 8% AM 9HSt * 149123 170 9 8% H% -% 

11% 8% ACMNbix 1.08122 1 S3 8% 8% 8% 

9% gSdUttM^Ii 072 00 35 8% dB 1 % 

15% 8% AomCh 044 16 18 7 12% 12% 12% A 

9% 6% Aano Bad 7 T9 8% 8% 8% +* 

28% 23 Aconftx 040 22 IS 10 27 S% 27 +% 

13% 5% Mara 038 11 3 834 12% 11% 11% A 

15% 11% ta»an IDE 346 14% 14 13% -% 

18% 18% Afflmi to 048 27 0 132 17% 17% 17% 

64 48% Ad Menu 340 52 64 57% 57% 57% +% 

31% 16% MMC 3LD0 108 12 2787 28% 27% 27% A 

6% GAdmtfep 016 10 B 3E 9% 5% 5% -% 

20 15 MW he OIO 08120 212 18% 19% 18% 

59% 49% Aapon ADR 147 2B 12 23 57% 58% 57% +% 

BS% 49 AahsL 278 54 7 2278 50% (MB «S% ~h 

36% 25% AH* 048 14 15 80S 35% 35% 35% +% 

22* 18% Ataosn 088 44 18 Z737 2% 21% 22% +% 

4 1% Alton K; 1 87 1$ 1% 1$ 4% 

50%38%AkftC 048 24 26 3458 49% 48% 48% +% 

39% 26* Aetna Fit 030 14 18 1687 30% 30 30% -% 


208 10 9% 10 

288 7% 07% 7% 
181 7% 7% 7% 

170 9 8% 8% 


85% 49 AehflL 278 54 72Z7B 

36% 25% Atoc 048 14 15 80S 

22* 16%Ainsi 088 44 16 2737 

4 1% Alton He 1 87 

50%38%AkftC 048 20 263458 

39$ Z6*AetnaFrt 030 14 18 1687 

28% 19% Aftpato 44 98 

W$ 14% Nrteue 144 114 12 39 

29% 21%*Tdi 7807 

18% 13% Abda AS 040 1.1 2B 391 
21% 19% Atony to* 035 14 31 310 


17% 13* Atom 
25% 19% AMU 
Z!$ 17% AlCrt* A 
30% 25% Atom 
26% 19% AknAI 
65% 49% AfcoSl 

S 23* AtaSraw 
14AtocAlx 


1 87 1% 1% 1% +% 

048 24 26 3458 49% 48% 48% +% 

030 14 18 1687 30% 30 30% A 

44 98 H* S% 25% +% 

144114 12 39 16% 18% 18% 

7807 28% 28% 28% 4% 
040 1.1 26 391 17% 17% 17% A 

045 14 31 310 18% 18 18% 

020 14 1120 IE 14% 15 4% 

048 14 18 28 23% 23% 23% *■% 

048 14 18 8 22% 21% 22 A 

044 14 22 2489 29% 28% 28% A 

030 14 68 4138 25% 25% 25% A 

1.00 14 45 309 84% 83% B4% 

070 24 5 324 28% 28% 28% A 

0.10 06122 4006 20% 20% 20% +% 


17AWU81 048 24 20 253 21% 


27% 21% AUktAi 090 3.7 15 29 
40* 33% Akfifc 067 14 81050 
29% 24 AIM Dpi 088 12 20 389 


7 4% AflmtB 
31% 71%Atom 
84% 84% Alcoa 
30* 20% AtatyA 


28%20%Ato> 144 7411 385 22 21% 21% 

20% 13%ARn0en 018 08 16 74u20% 19* 20% 

29 20Atanan 044 14 17 397 27% 28% 27% 

A lAnoa 1 48 1% 1% 1% 

27% 17% Mnoa CM 144 74 22 109 21% 21% 21% 

10% flAtacafl 018 14 122 10% 10% 10% 

27% 21% AUktAi 090 3.7 15 29 34% 22% 24% 

40* 33% Akfifc 047 14 81080 37% 37% 37% 

29% 24 AIM Ope 088 12 20 389 20 Z7% 27% 

7 4$ Ataasfe 25 474 8% G% 6% 

31 % 71 % tow 11 001 BO* 29% 30% 

84% 64% Alcoa 140 14130 2325 83% 82% 63% 
30* 20%AtaQ>A 42 1380 23 22* 22% 

11% 7% AmGwtot 046122 49 8 7% 7% 

5% 6% Am Rada 025 34 24 24 7% 7% 7% 

8% 8%AnatfO 008 1.1 12 15Z7 7% B* 7 

25% 20 Ament W* 052 24 14 159 21% 21 21 

S2% 44AmM* 080 14 SO 1489 48% 48 48% 

9% 8* Am Ad) Rx 024 2.7 95 8% 08* 8% 

31 20% AnBtnkfc OIO 04 3119471 23% 22* 29% 

37% 29%AmBmd 200 54 10 1182 35* 35% 85% 

25% 18%ABl8uRdx 080 17 14 18 21% 21% 21% 

8 8% Am Dfl he 085 8.8 409 7% 7% 7% 

20% 17% Am COP BO xl 4» 84 31 98 18% 17% 17% 
23%19%MlQmCV 14B 5.4 0 12 20% 20% 20% 

98% 42* AmCymi 145 145B2B8S B97 98% 97 

37%Z7*AmBPw 240 74 16 3484 31% 30% 30% 

33% !S% Anto 040 34 1329374 30% 28% 358*4 

30% 24$ AmGart 1.18 19 25 985 29% 29% 29% 

9% 8 Am Gout hx 077120 57 6% 6% 6% 

27% 22 An Wh Pr 230101 8 120 22% 22% 22% 


30% ^2 
53% A 


8% 7 A 

21 21 A 

«?£ 3 

22% 23% -A 


S3 

7% 7% 
17% 17% 


98% 42* AmCymi 
37% 27%AlflQPH 
33% 25% AnCupr 
30% 24% AmGart 
9% 6 Am Garth 

27% 22 Am KhPr 


20% 

97 A 
3»* A 
358% +1% 
29% 


20% 16% Am Haritga 080 16 11 59 18* 

G5%55%AMfco* 282 44 12 2034 80 

2% 2% An Hauh 075284 8 3 2% 

86% 81% AaMx 0.48 04 15 3137 93 

11% 7 Am to hex 140 127 101 8 

30 23%AnAna 088 13 2B3 20% 

34 IBAmPrara 040 14 9 483 25% 

8% 7% Am Hart £■ 044 07 S 142 8% 

27% 21 AmSfer 048 14 7 2841 24% 

22% 15 MB 145 82 1 20 


32% 28% AmW 
43% 38* AtoU 


24% 24% 
20 20 


148 34 12 202 27% 27% 27% A 
142 44 14 2288 41% 41% 41% A 


38* Amps 142 4.8 14 2288 41% 
34% Aswan he 131 U S 12 37% 


18% 11% Amato 
81% 501% Amoco 
9% B%AmpcoPtt 


024 14155 173 15? 
240 18 IS 2248 57? 
OIO 14 8 25 74 


S 3% Amo he 012 28103 37 A 4% 

29% Annum x 140 44 10 886 33% 33 


A 2% Ameomp 10 36 3 2% 2% 

58% 42* AlHteto 030 04 671732 47% «% 47% A 
32% 23% Aorteg 30 857 32% 30% 31% A 

29% 24% Angetoi 094 14 24 38 27% 26% 27% A 

55% 47% AnBatii 1.80 10 241040 53% S2* S3 

20* 25% AMtPpaCT 247104 3 25%d25% 25% 

34 19% Artham 15 90S 22* 22% 22* A 

iA lAAnowrh* a*i 17 « b ib% ie% ib% A 

35* SCAonCp 148 17 0 258 34% 34* 34% A 

29% 22% ApwnQp 028 1.1 38 1438 25* 25 25% A 

10% 9%ApnttmF 074 84 70 9% 09% A 

21% 14%APH 3S 230 X$ 20* 30$ A 

7% 4An*mpg 1 228 4% 4% A 

22% IB* And Pw A 012 05 35 48 22% 22 22% A 

25%21%An*0n OIO 04 18 3071 25% 25% 25% A 

50% 43% Am Omni 250 11 22 77 40% 48% 40% A 

51% 46%Arm»<9> 450 94 16 48% 045% 46 A 

8% AAnm 31201 A A A 

29 23%Annco2.iP 110 91 43 23% 23% 23 A 

57% 43%MmaM 148 27 38 344 47% 47% 47% A 

45% 33% AfWwBac 15 314 37% 37% 37% A 

7% 4% Arts Op 2 3Z7 5% 5% 5% 

33% 23* Anti lad 078 11 13 2425 24% 24% 34% A 

31% 21% Abbot 040 1J 94 387 30* 29% 30% A 

31* 22% AH* Oort x 040 14 12 28 30* 30 30 A 

44% 33* AMU 10n 17 13 433 37% 36% 37 A 

25% lAAabteF 027 14 212 19% 19 lA A 

3% 1% Asset tair 048107 2 66 2* 2* 2% A 

37 2A AmMta 012 04 20 26 32% 30% 30% A 

57%49%ATST 142 24 7018 5A 54% SA A 

2Eft2B*MMl3 190 1.1 2 248 251*251% 

38% 31%AhdafiJa 108 05 13 108 32% 32 XZ A 

A Aaobsm 02a 48 e 4 A 5% 5% 

21% 18% AWeEn 1.54 90 9 314 17% 17% 17% A 

112% 92% AMkti 950 54179 1069 198104* 104* A 
10 4* A8aa 0 162 5% 5* A A 

20* 16% Abacs E^y OBB 54 7 20 18% 16% 16% A 

12% 8% Atom ADR 034 18 10 185 8% A A 

24% 17%Amat 016 07 27 142 23% 22% 22% 

12% 8% Austria Fd OIO 09 2204 10* 10% TO -% 

5S% 47% AuOrtB 060 1.1 24 571 53% 53% 53% 


30 1430 25* 25 25* 

70 9% 10% A 

35 230 20% 20*2 2D% 

1 2Z8 4% 4* 4* 


22* A 

25% A 

4A A 


57% 49%ATXT 
20% Z2fc* AB Hdl 2 
38% 31% AMaGaa 
A A Anna Sot 
21% lAAWeEoz 
l»%92%Aflkh 
10 4* Max 


zA 13* tom 
IB 7% AM 
45 30* Annate 
Si* aA Awrt*r 
1 A 10% Aytti Corn 
7% AAZto 


3A 31*BCE 
9% 6% BET MR 
5% 3B*meoi 
17% lABakarFam 
22% 17Bata*H 
27% 21* Bolder Qex 
30% 24%BaKox 
1A ABDdW 
9% ABflr 
25% 20*BrtKE 
20* 13% BaBBtosp 
30 30* BaeOna 
25>z M* BanolBI V 
11% A BoocoCenoi 
34* 27Bcn*toKd 
1% 1 BancTssaj 

03% 4A BMBg 
SO* 38% BvMffl 
08 04* Bam Bn 
2A 22% BXHffii 
«»* 45% BkBcdnp 
33* 2SBart«r 
50% 47Bn*Amx 
95 BOBartiAmB 
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38* 30Bcla|ax 
30% 22* Bard 1C Rt 
38 29% Banaaaapx 
48% 38% Bvttx 
12% A Bxtnn 
53% 34* Banaaix 
28% 21% BlXttr x 

2A 23* Bay « 6* 
22% lA BOTT 1838 
23% 15$ Bearsnu 
5D* 4S*BaaSm 
37% 27* Bashes 
29* 23BM*nanh 
44% 34% OoctnOx 


044 18 It 891 lA 

004 04 4 ISZ 10% 

080 19 19 407 36* 

2.00 14 17 1272 58% 

8 3 1A 

24 300 A 


168 75230 
021 IS 29 
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040 14 
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080 12 25 
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152 7J> 11 
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124 SUB It 
1.14 4.0 0 
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070 12 19 
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125 15 
900 72 
100 90 6 
150 19106 
080 22 22 
1.40 17 53 
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1.16 6.1 14 
1.73 83 
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183 55 
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300 34% 
49 7 

129 A 
17 

1580 19% 
33 23 

258 27% 
137 10% 
504 7% 
1849 22% 
948 20* 
3684 34% 
108 23* 

35 10 

297 32* 
137 1% 

210 5A 

9(21 49% 
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3140 2A 
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5 37% 
1328 47% 
9008 11% 
1812 38* 
2134 2A 

36 23% 
22 ZA 

BOB 17* 
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44 32* 
177 28$ 
729 43% 


34* 34% 
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iS 16* 

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10% lA 

7 > 7 > 
21% 21% 

20* 2A 
34* 34% 
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32% 32* 
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05 85 

2A 2A 

48% «* 
31% 32 

47% 47% 

sa 

a* 37 

26* 27 

37* 37% 
47 47% 
II* 11% 
37% 38 

28 28* 


17% 17% 
47% 47% 
32% 32% 

43* 2* 


TECMmUMmuT WOMt FOB UH 



Dual 1 Bit 4 Tunes Oversampling 
Digital Filter 




A SBaorr 

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BA 03Bn» 

55 4ABrtaA 
SSJ-2 20% B«rt) 

08 90% Bnaf 45P 
«* 34*2 Banal » 

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1H5015100 Bartdf 
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37% 19 Baal Bm 

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It n P etna 

a* % E 1101 to In Oaoh 

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I 176 5.1 16 1231 54$ 54% 64% 

040 11 17 17D 19* 19 lA 

3 178 4 7 28 1384 50% 58% 58% 

I 060 11 22 70 EQ* 48% 50* 

054 12 3 280 25 24% 25 

4JP* 450 75 10 57 E7 57 

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Bn A 047 15 18 8 31% 30 X 

aiB 004 4.8 17 124 % .fl % 

r 048 11 20 Z79 1 A ■ IS IS* 

51 00 18805 18800 18805 
m 040 41 34 56 A A 9% 

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an 100 06 13 £% 52% 52% 

1 040 15 9 2479 22% 22% 22* 

1.44 11 22 186 47% 46% 47 

I X 2635 13% 13% 13% 

K am 07 23 ssj f A 1 A (A 


32% ZABhahomS 040 15 56 944 

g 1B% BDacfc 040 15 22 808 
TBBtaAHH. 152 65 12 96 

1A ABkMMv 073 75 74 

A ABfefnMic 075109 437 

lA 8* BfckrekTgt 070 75 288 

48% 37% Btock 155 25 28 841 


lA 11 Bento 
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36* 18% bad Fna 
34% XBREPiap 

90* n* Ai* 

33% 19% Brtntaltt 
3A ED* Brtt^Sq 
74* sABr Hr 
54* 39 Brit Gn 

77% SABR 
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71% 33% BT 
28% 22* BUyriU 
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30% 2ABn#Mli 
32% 24* Brftor 
4% 3% BRT 


A 20 20* 

A 9 A 

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BAA 

44 43* 44 

5% Z3% &% 
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7% 27% 27% 
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31% ZABhcMl OIO 04 22 8094 ZA 23% 25% 

8% A Eta Qfe 012 1 J 78 7% 7 7 

28% lAOUCH 008 03 16 00 Z7% 27% 27% 

SA 42* Botov 1J10 22 12 5810 48% 4S% 4A 

ZA 196rtaac 050 11 6 2082 28$ 291 2 2A 

21% lOBotB&N 006 04 » 654 17% 1 A 17* 

22* A SrttQiH 2.B0 11.4368 472B D22* 21% 22% 
1A M Bento 030 24 15 4864 12% 12 lA 

22 lA Beam Cat 1 25 35 6 6 21% 21* 21% 

ZA 20%Bom*X OH) 11 14 333 IIZA 28* 2a* 

36* 18%HadFM 027 08 2590 32% 31% 32* 
34% X ME tap 140 OO 7 5B 3tf% 30* X 

90* 69* BripSl 1.04 14 13 148 77* 7E% 77 

33* 1 A Brinks** X 1Q27 24% 24 24* 

99% SO* MftSq 252 11 15 51M 57% 57* 57% 

7A SABr Mr 1.77 25 15 80S 84 03* 83% 

54* 39 Brit Gas 107 08 24 348 46 44% 45 

77% 55* BP 1.78 12 26 2168 u78* 77% 78* 

27 lABPPUtoa 158 7.4 7 92 22 21% 21% 

2A 18BSlael 052 15 24 415 2A 24* 24% 

71% 33% BT 177 02 16 317 61 (31 81 

28% 22* BMfriU 155 17 13 323 24* 23% 23% 

3A 32% Bnmiep 150 45482 131 37* 37 37 

8 A BranEn 032 45 4 22 A 8% 7 

30% 2ABrttaSi 055 12 S X 29% 28% 29% 

32% 24* Brftor 088 12 ZB 1007 3A 31% 31% 

4% 3% BRT M 2B 4% 4% 4% 

25% 17% Bnrnft 044 10 X 1000 22% 22* 22* 

1 A 1 A Bnotl Wei 052 15 42 183 17 18% JA 

41 K* Bodnya Ft 250 75 10 X 37* 37* 37% 

28* lA Bui Oort 17 212 2A 23% 23% 

88% 47* Bom X 1JD 13 1732)9 E2* D 52% 

49% 37* Bull Raac X 035 15 19 21Z7 37% d37* 37% 

1 A 1 A Burton Re 152 85 21 IX 18% lA 16% 


44% 45 

21% S 


35% 25* O 
334$ 253* (28 

26 13% QBEn 
82% a%CMRi 
5*% 44% CPC 
lA 14 CPI tap 
92% TICS 


048 15 X 683 X 2B% 29% -% 
200 05 18 179HS3A 331 335% 43% 
004 16 11 745 ZZ% 21% 22* 

29 103 81% 81* 81% A 

IX 17 17 780 57* 501j 51 •% 

05B 11 19 15B 1A- 18 18 -* 

1.78 13 21 1937 78* 74% 75% -% 


Z9 1AC1SCOP 040 15 22 55 23* 78* 

24% 18% CrtMUMa 054 11 19 923 31% 20% 20$ 

132% 82% CtMatui 27 1472106* 103* 105% 

28% 24% CBDOiC 058 10 14 320128% 27% 28% 
23I2 lACatxaOK 016 08105 187 19% 19% 19* 

17% lA CaunOagn 818 m 1 A iA iA 

X 35* Camara Wl 12 1946 47* 45% 46% 

2% 1% CHIME 020107 2 16 2 1% 1% 

IA llSCrtoanCUi OlIB 15 25 166 12* 12% 12* 

19% IA Mow 17 186 17% 17% 17% 

15% ACrtFad 0 1383 lA lA lA 

2Al7%CatatC0x 040 10 58 62 20% X 20* 

42* 34* CnpUS 1.12 25 16 649 38% 38% 38% 

H %CaagURa 48 2881 « A « 

18% 14% CacPie 032 15 88 2077 17% 17* 17* 

B4% eo* Capa ax 02 21201 bi% a >% 84% 

lA 12*C|>td15B 1-28112 248 12% 12% 12% 

37%20%CXM15 150 07 10 24 » 24 

42* 22%CapMIR|B 132113 7 04 27 28% 27 

28% 1 A Qrawk 21 1382 23% 22* 22% 

35* 30*C»Co 050 25 19 11 035* 35 35* 

22% IA canatoa 13 20 20% M 20% 

H AOmtaPC 0 ISO 3 ft A 

13 8% Canto R- 020 11 9 153 8% 9 A 

X 22% CaPBL 150 08 12 1024 28 25* 2A 

66* 56% CprtrT 140 35 15 X 84% 83% 63% 

2A 9%CartartW OX 25 20 1758 1 A «% 12% 

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ame 




FINANCIAL TIMES WEDNESDAY SEPTEMBER 7 1994 -* 


43 


4ffmc&aeSep&ntfterG 


NYSE COMPOSITE PRICES 


NASDAQ NATIONAL MARKET 


■fpmoosaSeBtaaaare 


age ini 


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Fawnft 0X461 460 30 38% 39 

FWM 16 1245 29% 24% 25% -1% 
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FdoCLB 009831 4781 B% 8% SA +A 

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GftdBtad 040 20 13 20 19 10% -t% 

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GnBtfb 42565 11% 10% 11 +% 

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GBMYS*b 6 C2 <0% 0% 10% 


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HBO&Co 016 271887 33% 32% 32% -% 

Hstaar 25 4625 Z7% 77 27% -% 

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HMff 072 14 1081 21% 20% 20% -% 
Hogan Sys 015 24 G2B 8A 7% B +% 

Hofa0c 78 2829 ulB 16% 17% -% 

Horae Bad 0X0 8 9 20% 20% 20% +% 

HDD kid* 044 18 M 26% 25% 25% -% 
Hombott 13 666 12% 12% 12% -% 
ttxaMea 044450 18 4ft 4% 4% -A 

HratJB 020 18 366 18% 18% 18% -% 

ttanthgtn 0X0 64425 21 20 20% -% 

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JDfxamW 9 30 M% 23% 23% 

jNWtat 11 43 14% 14% 14% 

JoraaMed OH 10 993 7 6% 6% -% 

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Kota 0X4 204 39% 38% 38% -% 

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kteccnt 0X4 IS 407 7% 7% 7% +X0 
MaataeeP 038 23 2 31% 31% 31% 

I* Coflu 18 107 ISA 15% 15% 
MTSSjBX 025 0 02 23% 22% 23% +% 
Ufesed 14 3252 32% 81 31% +% 

ktjeogea 4 56 10% 10 10 


- N - 

NACfto 016 11 251 20% 26% 26% +% 
NBStiFKS 032 IT 80 18 17% 17% -% 

*0 CDmpt *038106 0 13% 12% 12% 

ttaSrai are 20 a 13% 13% 13% -% 
KBftotta 680 11 433 17% 17 17% +% 
KC 041105 13 61% 83% 81% -1% 
taker IB 1321 29% 28% 29% +% 

NetokGtn re 1000 20 10% 10% -% 

NbMS 1211040 8% 8% 8% 

Nbwoqm 7 500 5% 4iJ 6% -% 
Hraw 027 36 320 3SA 35 35 
NmEBui 0X0 2D 28 16% IB 18 -% 

ttar lma os 1B4 83 14% 14% 14% +% 

tadgrtief 226781 31% 20% 30 -% 

ItaprtCp 0X4 18 S3 u7 0% 7 +% 

Notts DH 21 1255 6% 6% 6% +A 

Nordson* 0X6 29 5 59 9 59 

Ndstrmx 040 272756 46% 45% 46% +1 

Narstanl M 16 10% 19% 10% 

N satkl 4 20 5% 5% 5% •% 
NortanTax 088 12 864 38% 37% 38 +% 

NWAir 201104 U2D 10% 1BA 

ItoMB 7581 1957 15% 15% 15% -% 

NOHdtafi 38 1444 43% 42% 43% -% 
MFC A 55 6>2 6% 6% -% 

NSC Carp 7z100 2% 2% 2% 


- O - 


DCMeys 22 539104% 14% 14% 


Octet Com 

18 

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PsinTrty 

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Pnlbg 

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Pentak 

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Peotecni 

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PemotL 

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PecpksH 

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Ptoneertta x 064 33 

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OnataOw 082 72 8 18 16 » 

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Ouanun 685703 15% 14% 15>« *% 

QoUa* » 200 14% 13% 14% +% 

me DC 30 422 45% 46% 4S% 


- R- 

Rahtmr 12 522 13% 12 13 +% 

Kffys 3 219 4% 4% 4% 

Raetanpc 1 877 4% 4 4% 

Ibynoad 28 B13u2l% 19% 21 «% 
Rocom 13 631 15 14 14% -% 

HeUr A 14 208 15% 14% 15% *% 

Rcptgcn 2 312 3% 2% 3% *% 

RepWastn 5 52 3,1 3 3 

ntacMV IB 34 II 10% 11 +% 

Reukn 049 18 DS3 47% 4&A 4fil 4 -1 

HBDitac 8 IS 5% d4% 4t| 

BuoM 00 10 15 35% 34% 34% 

Rotates 1 « 21 1591 63% 0% 63% +% 
RbMgrt 012 11 3 6% 5% 5% 

RnctiSvai 0X6 5 301 19% 19% 10% 

RKOCVte 044 32407 16% 18 18% 

Boss STM 020 12 608 16 15% 15% «% 

RoftcNM 28 523 23% 23 23 

Rows 0« 0 837 10% 19 19% *% 

RPM he. 052 30 310 16% 17% 18% *,’■ 

RSFh 00 14 4u24% 24 23% % 

Ryan Fifty 12 610 6% 6% 6% *% 


- S - 

StaCO 1X6 a 1072 54% 53% 54% *% 
Sendnsur 0X0 14 31 19% 18% 19 •% 

ScMmegiA 030 20 738 27 26 77 *t 

SctModL 10 2754 38% 3b% -1 

SOSyssm 151294 10 16% 16% -% 

Seta B B2I 7% 7% 7% *% 

Seta Cp 0X2 92828 19% 19% 19% •% 
Score em 4 7956 4% 3% 4% 

Srafidd 120 44 7 37% 37 30% -% 

SUato 11 7X6 24% 23% 24, 1 . *J2 

SQ Cp 016 26 33 S 21% 22 

Starts B OX C2263 u3% 2,1 3% *,1 
Sokcdno 1.12 IB 3 26 27% 27% 

Sequent B4 1797 UlB 17% 17% »% 

Saouab 32 291 4% Ml A 

Sera Tech 13 49 10 9% 9% 

SenFod 17 137 4,’ t 4% 4,'e *a^ 

Swenson 022 16 H0 17% 17% 17% 

SsMod OB4 18 196 Si 24% 24 H V« 

SHLSyftm 2 223 5*2 5% 5% -A 

Storekood 33 13 2D»j 0 20% -A 

SlMIzP 7 544 6,*. 8 8 -% 

Stans On 17 430 3% 22% 3% +% 

sunaluc 3 32 3% to 3 

SgnAI* 033 15 2200 34% 34% 34% 

StoraDes 10 G76 7% 7% 7% *% 

SOerNBc 006 63 327 12% 12% 12% +% 

CtaaWGo 37 872 13 12% 1 2% -% 

Stupran* oa IS 34 12 11% 12 +% 

SnrtSrtU 401005 30% 29% 29% -% 

SnsmrteBr 35865 13% 13% 13% 
SaOwseP 1 587 4% 4% 4% +% 

Saraco 0X6 18 528 3 3% 3% ■% 

SuMM 0X8 101277 21% 213% 

Spiegel A 02D 37 776 17% 17 17% 

S JudsMd 00 14 3652 34 33% 34 +% 

StPatlOc 0X0 10 36 21% 20% 20% 

Sta|B 1 57 ?A 1% 2A +A 

StaplM 48 7599 31% 29% 30 

SWaSD 00 161103 40% 39% 40 *% 

SUMkra 131766 19% 10% 10ft *A 
SMRBBb 00 14 0 21% 20% 20% -% 

Steal Tk OXB 21 374 19% 18% 19% +% 

SU^USA 0X0 43 387 12 11% 11% 

SUM 10 27 21% 20% 21% +% 

SBMtaO 1.10 14 30 23 22% 22% 

snaoy to 72a a% 7% 7% -% 

Stryker 0X8 28190 35% 35 35 -% 

Stand) 22 267 15 14% 14% -% 

StnrttonoB 0X0 18 10 24 23% 24 +% 

SunmtBC 084 14 142 22% 22 22 

SuamtTs 33 340 32% 31% 31% 

Sim Sport 10 51 4% 4)4 4% 

Surffc 146342 27 reXBii +% 

SwKTte 41 76 40% 30% 40% 

Sybase he 01 5398 a 45 47% +2% 
Symantec 34 7448 13% 11% 12% -A 

Syotay 040 19 7 19% 19% 10% 

Syncnxn 87 37 4% 4% 4% +% 

Synorgen 1 589 5 4% 4% 

5yre*c 0 42 15% 15% 15% +% 

^noptla 14 3713 18% 15% 16 +% 

SyJtraSOtt 012 16 506 14% 14% 14% -% 

SystemBa 29 480 18% 17% 18% +% 

Systems! 372072 8% 7% 7ft +A 


- T- 

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TjowePr 0X2 20 206 32% 31% »A +A 

TBCCp 13 185 10% 9% 10% +% 

TEA CSile 044 29 48 24% 24% 24% 

TacbDta 122774 19% 18 19% *% 

TecUDftaD 00 13 78 48% 47% 48% rol 
TtitefcC 3 3 B% 8% 6% 

TtacoSys 8 96 12 11% 11% -% 

TftCmA 17212B52 22% 22 22% +A 

Tfteba 71278 5% 4% 5A -A 

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Tara Brawn 6T 267 11% 11 A 11% +% 
ToffSCD 020343 01 7% B% 0% 

IF Enter 3 10 6% 6% 6% 

TranswU 11 46 12 11% 12 

Tivwrick 10 11 15 40 39% 30% +% 

Tricare 20 86 2% 2% 2% +% 

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TiwuekCn.10 11 26 22 21% 21% A» 

Tseng Leb 03 12 501 7% 7% 7% -% 
TysfdA* 006166 2066 24% 24% 24% +% 


- u - 

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Dntob 2 587 5% 5% 5% -% 

UOtaGsx 10 14 21 17 18*; 17 +% 

US Tat MO 12 in 0% 52% 0% 
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Unltag 012 21 18 27% 27% 27% 

IMrin 10 262796 48% 48 48% -% 

USBncpx 10 102581 27% 26% 27 -% 


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Volvo B 

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MHFtaS.084 9 538 21% 21% 21% ■% 
mnfadAx 02 9 528 24 23% 24 +% 

WWsmPttCtre 17 306 27% 26% 26% -% 
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IMpSA 1 39 14% 14 14 <% 

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ZtaraUtata 1.12 10 132 40% 40 40% +£ 


44 


WORLD STOCK MARKETS 


AMERICA 


FINANCIAL TIMES 


Wednesday September 7 1994 


EUROPE 


Takeover talk Dollar, bond weakness take bourses down again 

_ __ The prevailing theme of this The Ibis-indicated post cautious welcome later. Bostealis shares to ABN-Am 

|IIIK y Jl || QC year’s sickly but still expensive bourse close of 2,158.07 

M- ABE kj BJr European equity markets reas- betrayed no obvious sense of i»vum mui wi»bu *■•*«- — 

C. J A. serted itself yesterday as the panic. But dealers were wary sop s the European ssues while some domestic selling Welters hluwer were P° 

a ~b • -m dollar and bond markets weak- as turnover came out at mmyoEnca open inm iu» 1200 1100 i*m ism o«e was seen during the session. lower, at FI 193.00, ao« 

TU* O 1 M /T r4|/\VV7£l ened again, and bourses shud- DM4.9bn, against DM4-7hn on ft-se E m*** ioo \S72J8 1374 m 1374 s* 137237 1371 m isms* 1372 m isnjn Among the heaviest losers, FI 4^0, and FI U9-20. on M 2.1 

9 1 dll I I I ^ 1 1 I WW ^ dered in their wake, writes Our Monday. Mr Detlev fflug at B Fr-seannnazni wgjo me igun 1 * 31.17 1430 . 7 s 1*3035 nagw 142787 Credito Kaliano dropped L60, respectively. VNU s loss w; 

J U Markets Staff. Metzler in Frankfort said Ger- s*» 5 s*p? asp 1 mb 31 <m3Q or 2JJ per cent, to L2JB5, while attributed to profit-taking. 

V*^ A - 77" 1 _ . ■ & 4 14 1 .. * ■ - nmn Ton o »>np tf additi oHHpH n ronnm i*m 


Wall Street 

US stocks meandered in slug- 
gish trading yesterday morn- 
ing as a softer dollar inspired 
further weakness in bonds, 
writes Frank McGurty in New 
York. 

By 1pm. the Dow Jones 
Industrial Average was up a 
scant 0.33 at 3.885.91, while the 
more broadly based Standard 
& Poor's 500 was off 0.56 at 
470.43. 

Volume on the Big Board 
was light, with only 110m 
shares exchanged by early 
afternoon. 

Declining issues led 

Httton Hotels 

Share price (S) 

75 - • • •• 



Jan 1894 Sep 

Source? FT Graphite 

advances by 1,180 to 754. 

In the secondary markets, 
the American SE composite 
was down 0.35 at 455.19, and 
the Nasdaq composite slipped 
1.34 to 757.89. 

Stocks could not muster any 
forward momentum on the 
morning after the long Labor 
Day weekend. 

The negative tone which had 
dominated Friday's session 
continued to hold sway, with 
the market still confused by 
the damage which had fol- 
lowed the release of last week's 
employment data. 

Even though the Labor 
Deparment report showed 
much weaker-than-expected 
growth in payrolls last month, 
it also included some worrying 
signs of incipient inflation. 
That news triggered a moder- 
ate sell-off in bonds, which in 
turn dragged down share 
prices. 

Yesterday, the decline in 


bonds showed no signs of abat- 
ing. With no fresh economic 
figures due out until the end of 
the week, attention instead 
shifted to the foreign exchange 
markets, where the US cur- 
rency was slipping against the 
yen and D-mark. 

As the Treasury bonds fell 
anew, stocks searched in vain 
for any news which might lift 
sentiment 

Takeover speculation again 
helped fill the void. In the ses- 
sion's most attention-grabbing 
development shares in Hilton 
surged $7%, or nearly 13 per 
cent to $66%. 

A report disclosed that an 
Investment group was seeking 
to buy the hotel group and 
split it up. 

Meanwhile, an agreement by 
Eas tman Kodak to sell its clini- 
cal diagnostics business to 
Johnson & Johnson for $lbn 
had little impact on their 
respective share prices. Kodak 
added $% to $50% and J&J 
shed %Vz to $49%. 

Warner Lambert’s appeal as 
a potential takeover target con- 
tinued to buffet its share valu- 
ation. The issue fell $1% to 
$827,. although activity else- 
where in the pharmaceutical 
sector was cool. 

Semiconductor stacks were 
the most active in an otherwise 
dormant technology group. On 
the NYSE, Texas Instruments 
dropped $1% to $74% while 
Applied Materials slumped $1 
to $48% on the Nasdaq. 

But Micron Technology 
added $% to $39%, with support 
from a recommendation by Mr 
Vincent Giinski, an analyst at 
Fahnestock & Company. 

Canada 

Toronto fell in quiet midday 
dealings, hit by weak bonds 
and as the market awaited the 
results of the Quebec provin- 
cial elections on September 12. 

The TSE 300 index was 1&85 
lower at 4^25.37 at noon. 

Thirteen of the market’s sub- 
indices were lower, with only 
precious metals, up 113.49 or 
1.1 per cent to 10.252J1, defy- 
ing the downtrend. 

Kinross Gold was actively 
bought, hardening C$7» to 
C$6%, while PWA put on 3 
cents at 61 cents. 


The prevailing theme of this 
year’s sickly but still expensive 
European equity markets reas- 
serted itself yesterday as the 
dollar and bond markets weak- 
ened a gain anH bourses shud- 
dered in their wake, writes Our 
Markets Staff. 

Professionals had been 
expecting a shift in transmis- 
sion, fTom interest rates to fun- 
damentally driven markets, 
said a senior trader in Frank- 
furt yesterday. But while some 
company results, such as those 
of Daimler and the Big Three 
chemicals, had been adequate, 
the German corporate sector 
was still stuck with weak prof- 
its performance from its finan- 
cials, and the ongoing weak- 
ness in bonds was not making 
the latt er an y more attractive. 

FRANKFURT’S moments of 
truth came in the last hour of 
Ibis trading. The DAX index 
fell only 8.62 to 2,165.90 on the 
session, and held that general 
level for a good part of the 
afternoon. 

However, dealers were 
watching the September bund 
future in the last half-hour of 
ibis trading, as it broke 
through 90 on the downside to 
hit 89.99, recovered to 90 fiat 
and then subsided again to 
around 69.SS at the end of the 
equity day. 

ASIA PACIFIC 


The Ibis-indicated post 
bourse close of 2,158.07 
betrayed no obvious sense of 
panic. Bui dealers were wary 
as turnover came out at 
DM4.9bn, against DM4.7hn on 
Monday. Mr Detlev Eflug at B 
Metzler in Frankfort said Ger- 
man fluid managers would be 
more interested in equities at 
2,200 than they were at the 
present level; in the Interim, 
he said, cash market volume 
was very low and derivatives 
trading could have an undue 
effect on share prices. 

Against this background, 
positive news from Volkswa- 
gen on car sales did nothing 
for the shares, down DM2£0 at 
DM484.50, while Metallgesell- 
schaft's need for more capital, 
seen as a major sell signal by 
Mr Hans Peter Wodniok of 
Robert Fleming late on Mon- 
day, left the MG shares DM16, 
or S per cent, lower at DM184. 

PARIS was more sensitive 
than Frankfort to the drop in 
German bonds, but it lost fur- 
ther ground towards the close 
on news that the chair man of 

St Gobaln, Mr Jean-Louls 
Beffa, was being questioned by 
an Investigating Judge. 

The CAC-4Q index fell 36.75, 
or L8 per cent, to 1,961.45 in 
turnover of FFr2.7bn. St 
Gobain was the most heavily 


r FT^SE'^ituariss Share indices 


THE EUROPEAN SSUES 

Open 1040 1140 1240 1100 1400 1500 CtaK 


FT-SE Etnttrack 100 137248 137409 13744* 137247 137143 137094 137248 137103 

FT-SE Bn*!* 200 143040 1*3206 1434QT 1*37.17 1*3078 143045 M32JQ 1*2747 

Sep 5 Sgp 2 Sg_1 4MB 31 30 

FT-SE turnback 100 138011 140148 139842 140542 140100 

FT-SE Emtradt 200 1438.12 145147 145009 148048 1*59.43 

bm iooo pmcnat uvut&r in - OT&stan- 1 * 3*91 loam* in - am is no - nasi r nmi 


traded stock as it fell FFr28, or 
4.2 per cent, to FFr638. Axa 
was involved In corporate 
deals in Belgium and Hong 
Kong, but analysts said its fell 
of FFr9.70, or 3.8 per cent, to 
FFr243.30 was simply a reflec- 
tion of bond market weakness 
and its effect on financials. 

Among other big losers, Dior 
fell FFr 11.80 to FFr434 on talk 
of an upcoming equity issue 
and its parent Bon Marchfi, 
suffered even more with a drop 
of FFr35 to FFr755. 

ZURICH paused after its 
strong run and the SMI index, 
which had risen by 5.7 per cent 
over the last fortnight, gave up 
22.1 to 2,652.4. Trading was 
thin in the absence of foreign 
demand, which had given sup- 
port in recent days. 

Roche certificates remained 
at the centre of attention, eas- 
ing SFr60 to SFrf.295. Among 
the chemicals majors only 


Sandoz bearers were firmer, 
adding SFrl at SFr714; but in 
the second tier, Ems continued 
its recent run, climbing SFr20 
to SFPL230. 

BBC bearers eased SFrl6 to 
SFrl, 181 as analysts said that a 
presentation on Monday by the 
ABB chief executive Mr Percy 
Bamevik had provided no 
fresh information. 

DOLAN trimmed early losses 
as some buying developed at 
the end of a session weighed 
upon by fears of a renewed row 
between the government and 
the J ud ici a ry, and still waiting 
for action on budget deficit 
cuts. 

The Comit Index finished 
1(125, or IB per cent, lower, at 
662.99 after a government 
spokesman said that a magis- 
trates' plan to speed corruption 
investigations was unaccept- 
able; but Mr Silvio Berlusconi, 
the prime minister, gave it a 


cautious welcome later. 

Blue chips were out of 
favour with foreign investors, 
while some domestic selling 
was seen during the session. 

Among the heaviest losers, 
Credito Italiano dropped L60, 
or 2A per cent, to L2JJ95. while 
Pirelli was L90, or 2 per emit, 
off at L4.400. 

BCI, under pressure In 
recent days, managed a L20 
gain to L3.570 as Its L2,360bn 
capit al Incr ease continued. 

AMSTERDAM fell sharply at 
the close as local Investors and 
options dealers sold heavily, 
following losses in bonds arid 
other stock markets. The AEX 
index shed 3.69 to 414:23. 

Financials were all weaker, 
with Ing down FI 1.80 at 
FI 78.40, ABN-Amro by 70 cents 
at FI 59.30 and Fortis Amev by 
80 cents at FI 74.00. 

Ahold, the food retailer, 
jumped FI 1.10 to FI 48.40 In the 
wake of Its higher second-quar- 
ter net profit figures and a 
forecast of higher full-year 
profits. Another food company, 
Nutricia, picked up FI 2.40 to 
FI 89.00 as takeover rumours 
revived, 

Boskalls, the dredging and 
engineering group, finished 70 
cents down at FI 41.20 after an 
announcement that its trust 
group had sold 4.6m ordinary 


Boskalis shares to ABN-Amro 
Holding, at F140.S0. 

The publishers VNU and 
Woiters Kluwer were both 
lower, at FI 193.00, down 
FI 4B0, and FI 119.20, off Fl 2.10, 
respectively. VNU's loss was 
attributed to profit-taking. 

MADRID added a generalised 
sense of instability in the 
financial system to its interest 
rate fears and the general 
index fell 4.42, or 1.5 per 
cent, to 295.08 in turnover of 
Pta23-9bn. 

The obvious targets, interest 
rate-sensitives such as utilities 
and banks, were selectively 
savaged, with Fecsa, Iberdrola 
and EiTiHgsa down by 1*1025 to 
Pta8Q0, Pta30 to Pta823 and 
PtaiSO to Pta5,300. and Bankin- 
ter and Popular off Pta400 and 
Pta390 respectively to Ptall.300 
and Pta 14,350. 

WARSAW, where the Wig 
index was above 20,000 In 
March, fell below the 10,000 
level, the key index losing 
851.8. or &2 per cent, at 9,565.4 
following more evidence of 
hostilities between Poland's 
finance minister. Mr Grzegorz 
Kolodko, and its central bank 
president. Ms Hanna Cron- 
kiewicz Waltz. 

Written and edited by William 
Cochrane and Mfctawl Morgen 


Nikkei continues easier as Seoul rises to year’s high 


Brazil sees 3.9% rebound 


S3o Paulo rebounded 3.9 per 
cent in midday trade as a new 
opinion poll showed that Mr 
Fernanda Henrique Cardoso 
had retained his lead in the 
presidential race, and might 
even win at the first round of 
voting on October 3. 

The market had plunged by 
10.5 per cent on Monday amid 
worries that Mr Cardoso's can- 
didature would be damaged in 
the wake of the resignation 
of Mr Rubens Ricupero as the 
economy minister. 


The Bovespa index was up 
1,897 to 49,937 at 1300 local time 
after publication of the poll, 
conducted after Mr Ricupero's 
resignation. Volume came to 
R$254Jm ($287.2m). 

In New York, however, Gold- 
man Sacha lowered Its weight- 
ing in Brazilian stocks to neu- 
tral from overweight, on the 
view that Mr Cardoso was 
unlikely to succeed in the elec- 
tion in the first round, 
although it still expected him 
to win the presidency. 


S Africa rally goes on 


Gold shares again led 
Johannesburg higher, as fears 
or profit-taking after recent 
gains proved an founded. 

Demand for commodity- 
based stocks was seen from 
local and offshore investors in 
strong trade, with rises under- 
pinned by institutional reluc- 
tance to invest in gilts and a 
consequent flow or funds 
towards equities. 

The decision by striking 
motor assembly workers to 
return to work from today 


continued to support the 
industrial market. 

The gold shares index 
climbed 49 to 2,502, bringing 
the gain since the start of busi- 
ness on Friday to 170 points. 
Industrials collected 54 at 
6,662 and the overall index 
was 53 higher at 6,009. 

De Beers picked op R2.75 at 
R109.75 but Anglos lost R1 at 
R259, while JCI advanced R3 
to RI19 ahead of results. 

Iscor strengthened 12 cents 
to a fresh high of R4.60. 


Tokyo 

Investors focused on the listing 
of Japan Telecom and the 
release of the Bank of Japan's 
tankan, or quarterly survey on 
business sentiment, and share 
prices lost marginal ground in 
low volume, writes Emiko 
Terazano in Tokyo. 

The Nikkei 225 average lost 
15.20 at 20,39348. it saw a day’s 
low of 20,331.37, just before the 
listing of Japan Telecom on the 
second section, but rose to a 
high of 20,529.71 after JT 
fetched an Initial trading price 
of Y4.7m, Its public offering 
price. 

Japan Telecom ended Its first 
day at Y4.65m after reaching a 
high of Y4R8m in the morning 
session. The stock became the 
first privatisation offering to 
close lower than its public 
offering price. 

Baying by banks and invest- 
ment trusts supported equities 
in the afternoon, but many 
investors remained Inactive 
ahead of the tankan release. 
The survey failed to affect 
share prices as it revealed that 
negative sentiment among 
large companies was easing, 
matching expectations. 

Volume totalled 225m shares, 
against 272m. The Topix index 
of all first section Gtocks 
dipped 5.31 to 1,613.15 and the 
Nikkei 300 shed L20 to 293R7. 
Declines led gains by 646 to 
311, with 222 issues unchanged. 
The ISE-Nikkai 50 index eased 
3.73 to 1,309.65. 

Telecomm unications -linked 
stocks were lower, dragged 
down by JT. Nippon Telegraph 
and Telephone fell Y13.000 to 
Y893.000 and DD1 Y23.000 to 
Y948.000. Kyocera, DDrs lead- 
ing shareholder, slipped Y10 to 
Y7.360 and East Japan Rail- 
way, a leading shareholder of 
JT. receded Y8.000 to Y5L3.000. 

Steelmakers continued to 
meet profit-taking. Nippon 
Steel, the day's most active 
issue, declined Y5 to Y372L 

The rise of the yen above the 
Y99 level to the dollar hurt 
high-technology Issues, Fujitsu 
declining YlO to Y 1,080. Some 
defied the trend, Sony fi rming 
Y50 to Y5.950 and TDK Y30 to 
Y44S90. 

Fujitsu General, a home elec- 
tronics maker, advanced Y26 to 
Y877 on expectations of higher 


profits th anks to demand for 
its air conditioners and refrig- 
erators prompted JOy the sum- 
mer's heat 

In Osaka, the OSE average 
relinquished 83.02 to 22,635.29 
In volume of 26.1m shares. 

Roundup 

Strong performance emerged 
in some Asian Pacific markets. 
Karachi was closed for a 
national holiday. 

SEOUL saw a persistent rally 
in primary blue chips, aided by 
liquid institutions, lift the mar- 
ket to its high for the year, 
although other issues 
remained weak on swift profit- 
taking. The composite index 
put on 7.89 at 977.50, surpass- 
ing the previous peak of 97126 
on February 2. 

Samsung Electronics posted 
a record high, gaining 
Won3,000 at Wonl 35,000. Both 
Posco and Kepco - heavily 
weighted in the index - went 
the day’s limit up. adding 
Won2,500 and Wonl.OOO at 
Won88,700 and Won30.200 
respectively. Petrochemicals, 
papers and financials lost 
momentum on profit-taking 
following recent sharp gains. 

Brokers said that the central 
bank’s easing of monetary pol- 
icy ahead of Chusok holidays, 
which fell from September 19 
to 2L boosted investor senti- 
ment An official at the central 
bank said that about 
Won3,000bn would be released 
before that time. 

SHANGHAI’S A share index 
rose a further 7.0 per cent, 
smashing through resistance 
at 1,000 points in record turn- 
over of Ynl6^7bn. The index 
surged 68.45 to L04U94, with 
blue chip issues based in the 
Pudong development leading 
the market rise. 

Shanghai’s B share index 
rose L39 to 83J27 in response to 
the A market climb. In Shen- 
zhen, the A index gained 18.65, 
or 8.8 per cent at 231.27 but the 
B index lost 0.59 at 23L27. 

COLOMBO jumped 3.0 per 
cent amid growing optimism 
over political developments, 
the all-share index ending 32127 
up at 1,114.75 as volume 
Increased to 233.5m shares 
from Monday’ s 151m . 

KUALA LUMPUR was higher 
as retail Investors demon- 
strated their continued confi- 


fARlESiWORLD' INDICES 


Jofciiiy compiled by Tho Rnancul Times Ltd.. 
NATIONAL AND 

REGIONAL MARKETS 

fiquros in pare n t hos e a US Day's 

show numtMr of hrura Dollar Ctemge 

o- 1 jtjdi tndox % 


HusKUM |CS) 176.88 -1.0 

Australia ... 195J3 0.1 

Botgwm f3T .... - . 178.63 -02 

Canada (1041 ...135.80 0.1 

Dcrmerv C33J _ 26033 0.5 

Finland p4| 17800 -0.7 

France «7» „_.174.73 -OS 

Germany [58). . — 148.50 -0 7 

HengKwvjtSa 406.82 0.6 

Irctand <14| ... 216.13 O.b 

IWyiSS) 8195 -1.7 

Japan (*69)„ .... . 162.74 -1.3 

MolaycoSn — 563.51 -0.4 

No.lco (19) - 2239.91 -0.5 

Ptomorund (37) .218.19 0 1 

Ptow. C^eLind [14) 76 SO -Or 

PtoA»avi231 20S91 -1.0 

Singapore (4*) .....368.1 7 0£ 

Seoul rVnea [53J 308. 11 1.0 

Spun (42) 130.80 -15 

Sweden (38) 220.90 -2.6 

SwfWdand (47) . 167.18 0.4 

Umicd Kingdom (204J 204.86 0.7 

USAiSIT) 192.21 0.0 


Goldman. Sacha & Co. and NaiWest Secwtttoa Ltd. In conjunction wMi the hafflum of Actuaries and the ftKUlty of Actuaries 


- MONDAY SB 
Pound 

Storing Von 
InckM index. 


FfODAY SEPTBUBeR 2 1984- 


■ DOLLAR MOeX- 


DM 

Erttax 

Local 

Currency 

InOeK 

Local 
% dig 

on day 

Gross 

□hr. 

Yield 

US 

Doflar 

Index 

Pound 

Sterib^ 

Index 

Yen 

Index 

Local 

DM Cmency 52 weak 52 week 
Index Index Hkfh Low 

Year 

ago 

faPUfod 

T42J8 

159.07 

-0.6 

3.47 

17888 

171.47 

11286 

144.93 

18083 

189.15 

139.24 

14281 

157.77 

157.67 

-0.9 

1.01 

195.06 

18780 

12285 

15882 

159.12 

195.41 

16484 

17784 

142.87 

139.45 

-a» 

3.96 

177.04 

169.90 

11183 

143.60 

14088 

177.04 

14682 

16698 

109.70 

I34J1 

on 

280 

135.60 

130.13 

te.19 

1Q980 

13481 

14581 

120.54 

12694 

208.67 

215-33 

-Ol 

1.38 

257.07 

346.71 

16182 

20883 

21688 

27679 

22694 

22987 

143.78 

18883 

-0.5 

0.74 

17980 

17287 

1128S 

145.4* 

188.84 

17980 

10488 

10618 

141.14 

14860 

-1.0 

3JK 

175.57 

168.43 

11081 

142.41 

14784 

18687 

15984 

189.10 

116 95 

119-96 

-1.1 

1.72 

149.54 

14381 

93.96 

12180 

12180 

14984 

12489 

128.77 

328.62 

403.03 

0A 

3.03 

40489 

388.09 

254.08 

328.02 

401.18 

50686 

29288 

296.44 



08 

3.19 

21489 

20683 

135.03 

17489 

197.79 

21613 

16184 

171.79 

66.20 

98.12 

-1.9 

1.62 

8383 

7987 

5288 

0780 

9881 

97.78 

5788 

77.78 

131.45 

102.10 

-1.4 

0.75 

18488 

155.25 

10380 

133.75 

103.60 

170.10 

124.54 

18670 

455.18 

553.85 

-0.4 

180 

565.85 

543.04 

35582 

46889 

558.04 

821^3 

38283 

405.72 


EUR0PE (718) — 

Monte (11*5).—. ...... 

Pacific Bitn (748) .......... 

Euro-Paoflc ( 1 * 66 ) 

North America |62t). 

Europe E*. UK (5K) 

Pacific E v - Japan (279) 

Wodd Ex- US (184J) — 

World Ex. UK (i860) ..... 
World &. So. AJ. 12105).. 
World Ex. Japan (1695) ... 


._ 175.89 
--.218.18 
— 172.77 

173J06 

....188.70 

156.73 

260.70 

..,.175.55 
... 177.85 

179.22 

...191-28 


Tho Wortj Index (2164) 


14X42 152,47 


217.87 

20608 

13689 

17673 

174.07 

219.19 

18025 

18588 

73.83 

7288 

47.52 

81J5 

6636 

7789 

5922 

60.73 

207.35 

19988 

isass 

18687 

193.17 

211.74 

18582 

17685 

36783 

35282 

23670 

29796 

26388 

37692 

28631 

289J98 

305.12 

29281 

191.70 

247.49 

30244 

30611 

17553 

18618 

140.47 

134.81 

8626 

11694 

13752 

155.79 

12688 

13643 

22680 

217.88 

14250 

183.97 

25692 

23185 

17683 

18620 

18648 

158.75 

104.59 

13582 

13635 

17888 

13670 

13604 

20618 

19487 

12788 

164.79 

194.97 

21488 

181.11 

190.09 

19281 

184.48 

12676 

15590 

18221 

19604 

17695 

18688 

17601 

168U1 

11658 

14278 

15788 

17888 

15380 

15689 

221.44 

21251 

139.13 

179.82 

214.10 

22203 

17619 

17624 

174.72 

18788 

109.78 

141.73 

114.72 

17688 

134.79 

164.50 

17614 

16607 

11604 

14208 

131« 

17614 

14688 

10212 

18669 

181J» 

11655 

153.05 

18621 

18273 

17687 

184.73 

15788 

15122 

9601 

127.82 

13625 

15612 

13697 

139.10 

270.05 

263.18 

189.07 

21905 

240.10 

29821 

20613 

20285 

17685 

18882 

11698 

14628 

13688 

17685 

14588 

16218 

17659 

17189 

11220 

144.86 

149.17 

17659 

155.96 

16600 

17988 

17272 

11208 

145.99 

1S217 

18603 

16684 

16606 

19182 

183.80 

12620 

16618 

18238 

19620 

174.04 

17095 

16678 

17647 

11387 

14662 

13127 

18680 

15685 

180.98 


South Korea 

Seoul SE Composite Index 
1,000 — — 



Sourca; FT Graphite 

dence in the market The com- 
posite index added 12.73, or LI 
per cent at 1,17224 in turnover 
of 434.1m shares. 

Selangor Properties rose 34 
cents to MS3.82 as investors 


speculated on a reverse take- 
over of the company. 

HONG KONG encountered 
late bargain hunting which 
erased early losses and pushed 
the Hang Seng index back 
above 10,000. It was finally up 
73.93 at 10,035.97 as turnover 
dwindled to HK$3£7bn in the 
absence of US investors. 

Most blue chips benefited 
from the late purchases, Sun 
Hung Kai Properties gaining 
HK$L25 at HK$57.75. 

Demand for China-owned 
stocks or H shares intensified, 
sending the H share index 
ahead 17.73, or 12 per cent, to 
1,399.35. 

SINGAPORE received a last- 
minute boost from a late push 
in Keppel after an otherwise 
quiet day. The Straits Times 
Industrial index ended 10.49 up 
at 2^38^5 and Keppel put on 
40 cents at S$ll 50. 


BANGKOK fluctuated 
throughout the day to close 
slightly higher on buying of 
small, cheap stocks. The SET 
index firmed 3E4 to L535.14 in 
moderate turnover of Bt9.l4bn. 

The communications sector 
was firm as Shinawatra Satel- 
lite, which said It was to 
launch another satellite to 
widen its service area on Octo- 
ber 4, appreciated Bt6 to Btl23. 

TAIPEI ended weaker after 
Institutional investors sold 
electronics and plastics issues, 
but financials posted minor 
gains. The weighted index shed 
35-85 to 6J33Q.47 in thin turn- 
over of TSffLOBbn. 

MANILA slid at the close as 
investors sold heavily to posi- 
tion themselves for the much 
awaited listing of Petron Corp 
shares today, but brokers said 
selected second-liners cush- 
ioned the fall The composite 


Index retreated 17.82 to 
3,086.48, pulled down by 
declines in many blue chips. 

SYDNEY was higher in thin 
trade following Monday’s holi- 
day closure of Wall Street. The 
All Ordinaries Index moved 
forward 8J2 to 2.103JS. 

Dealers said that the stron- 
ger tone of the market was 
partly due to technical factors, 
with bargain hunters targeting 
stocks that had been sold 
lower in the previous two ses- 
sions. 

WELLINGTON was domi- 
nated by trading in Telecom, 
which accounted for nearly 
one-half of the market’s 
NZ$48.4m turnover. 

Telecom's 5-cent rise to 
NZ$539, an strong US demand, 
was also mainly responsible for 
the NZSE-40 index remaining 
in positive territory, up 2.71 
at 2,17922. 


• V/'' '• C. . ' '■ 



Hong Kong 

Placing of Existing Shares/ 
Acquisition at Assets/ 

Subscription of New Shares 
May 1904 

US$495 ,000,000 
OTIC Pacific Limited 


Financial Advisor/ 
Underwriter 






Korea 

Convertible Bond Issue 
lime 1994 

US$20,000,000 
Inkel Corporation 


Lead Manager 





■- ■ '+Y -.V ' 


Hong Kong 

Placing of Existing Sham/ 
Subscription of New Shares/ June 1994 

US$38,000,000 

China Aerospace 
International 
Holdings Limited 


Manager 


China 

Cotrvorsian of Legal Person Shares 
to B SharesriPladiig of B Shares 
July 1994 

US$10,720,000 

Shanghai Dazhong 
Taxi Co., Ltd. 

International 

Underwriter 



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Opening Asian Finance 
to the World 

In two years Peregrine completed over 171 regional equity transactions 
totalling more than US$13.9 billion. 

With a proven track record and a wide range of capabilities and services 
Peregrine stands for outstanding performance in Asia’s financial markets. 


Financial Services: 

Corporate Finance, Slock Broking. Fixed Income. 

Direct Investments, Asset Trading. Bond Trading, Derivatives Trading. 
FOREX. Commodity noaling , investment Management 




Couyntjn. Hi* Anmtal Hrw UmMd, QuUiui. Sash* aid Co. and NMfttat SocariSea LUBed. 1987 
L=tRt pm* Mm uwCdiii* tar Um Mmen. Umma dosed SOB* Canada and USA. 


HONG KONG • BEIJING • SHANGHAI • NANJING • GUANGZHOU • SHENZHEN • SINGAPORE • SEOUL • BOMBAY • MANILA - BANGKOK 

JAKARTA • KUALA LUMPUR • HANOI • HO CHI MINH CITY • YANGON » BRISBANE • LONDON • MUNKH • NEW YORK 

Bead Office: 23/F Now World Tower. is-ie Queen's Rd., C, Hoag Kong ToL* (852) 825 1888 Fox: (852) 845 B 4 ii 
Europe a n Office: 23/24 Lovat Lana, London EC3R 8EB, UK Tah (071) 283 8888 Fax; (071) 283 0728 

Peregrin* Securities (UK) Limited is a member of the SFA.