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Changing tax*. 

Japan's contractors 
r- \ break with tradition 



Island divided 


, Malta plays out 
1 its EU overture 

Pap* 2 



SotfsSonlhPole - 

Ulysses ventures into 
die unknown 

Pag* 17. ■' 



Sao Paulo 


Contrasts in wealth 
and poverty ; 

Survey, Pages 13-15 


FINANCIAL TIMES 


•TUESDAY. SEPTEMBER 13 1994 



Germany may end 
state monopoly in 
telecoms market 

Germany may allow new telecommunications 
companies to open their own networks by the end 
or 1997, in spite of strong opposition hum state- 
owned Deutsche Telekom and national operators in 
other European Union countries. In a surprise 
about-turn, the government said it would consider 
going it alone if the EU's Council of Ministers failed 
by the end of this year to fix a date for liberalising 
all EU networks. Page 22 

Loyalists admit Dublin bombing: Hopes for 
an early end to the sectarian violence which has 
plagued Northern Ireland receded as loyalists 
claimed responsibility for planting a bomb in a 
Dublin railway station. Page 22; Employers see 
Ulster peace dividend. Page 12 

Video-on-demand to fly higher: A Californian 
company plans to intensify competition for world 
in-flight entertainment by taking video-on-demand 
above 30,000 feet for the first time. Page 22 

Bayer, German pharmaceuticals group, is to pay 
$lbn to buy back the right to use its own brand 
name in the North American market Page 23; 
Observer, Page 21; Lex. Page 22 

CS Holding, international financial services 
group built around Credit Suisse, has withdrawn its 
offer to acquire a minority stake in Creditanstalt- 
Bankverein, Austria’s second-largest bank. Page 23; 
Flag still flies over Austrian bank. Page 24 

Forte, UK hotel and restaurants group, is favoured 
to win its long-running battle with Accor of France 
to gain control of Meridien. luxury hotels chain 
owned by Air France. Page 23 

Shepard quits Savoy: Giles Shepard resigned as 
managing director of the Savoy hotel group, saying 
he had been asked to go because he did not agree 
with management proposals. Page 23 

Crisp prices Hit Dalgety: Lower UK crisp 
prices mid an over-abundance of continental pigs 
limited food and agribusiness group Dalgety to a 7 
per cent rise in pre-tax profits. Page 23; Lex. Page 
22; UB buys Dutch snacks business. Page 33 

White House hit by aircraft: A single-engine 
light aircraft crashed into the south lawn of the 
White House, tumbling against the US presidential 
mansion and killing the pilot Page 6 

Nato begins exercises in Poland: Nato began 
its first exercises on ex-Warsaw Pact territory on a 
sports field near Poznan in Poland. Page 2 

Arafat and Peres to d i scuss aid: Yassir 
Arafat. PLO chairman, and Shimon Peres, Israeli 
foreign minister, meet in Oslo today to try to 
resolve a row over foreign aid. Page 4 

Separatists set to govern Quebec: 



Voters in Quebec. Canada, went to the polls yes- 
terday in provincial government elections. Daniel 
Johnson (above). Liberal party leader and current 
premier of the the province, warned that victory by 
the Parti Quebecois, which supports independence 
from Canada, would put Quebec “on the incredible 
slippery slope of economic deterioration". Opinion 
polls indicated the separatists would win. 

Delta Air Lines, third-largest US carrier, called 
on the US government to define a standard frame- 
work for bilateral aviation agreements. Page 8 

British soldiers kUfed m Bosnia: Three 
British soldiers were killed and five injured when 
an armoured vehicle left the road near the belea- 
guered town of Gorazde. Hatreds divide Moslem 
and Serb, Page 3; No 10 sees abstention over 
Bosnia, Page 12: Editorial Comment, Page 21 

Murayama admits by-election disaster: 

Tomiichi Murayama, Japan's prime minister, 
acknowledged that the ruling coalition had suffered 
a “crushing defeat" in Sunday's by-election. Page 6 

Russia plans monopoly laws: Russia is 
preparing radical legislation to regulate monopoly 
industries, such as energy and utilities, which 
threaten to distort the fragile economy. Page 2 


■ STOCK MARKET INDICES 


FT-SE 100: -3.1284 

(-10.5) 

New YorK lunchtime: 

Yield — 444 


s 

146845 


FT-SE Euratra* 100 -148849 

H94I 

London: 


FT-SE-A AU-Sbare 1,57245 


S 

15626 

(1.5509) 

WkfcS — 184172B 

1*19 40) 1 

DM 

24117 

(2.3914) 

Mew ltak: Imchtae 


FFr 

82589 

(8.1938) 

Dm Jones but Are — 3469-09 

(-5.72)1 

SFr 

24071 

(1.9948) 

5&P Composite 46721 

(-097)1 

Y 

154489 

(153.95) 

m us LUNCHTIME RATES 


£ index 

73.1 

(78.6) 


Federal Funds: . 4-3% 

3-ntoJreas 4B85% 

Long Bomf — Sffll 

new 7 494* 

■ LONDON MONEY 


3-mo Intertenk £*a% t5ii%) 

Lifts long git future: — Dec 99jj(0ec100j3 

■ WORTH SEA OM. lArgwj 

Brent 15-day (OcQ ......51626 H6415) 

■ COLD 


New York Come* (Dec) . .53949 (395.8) 

London £3914 (39145) 


■ STERLING 


■ DOLLAR 


New Ydrti fcrefi&ne- 
DU 144375 

FFr 52785 

SFr 1283 

r 9195 

London: 

DM 14435 (1.5419) 

FFr 52855 (52833 

SFr 12845 U2B62) 

Y 98485 (99.265) 

5 Index 6X4 (BZ5) 

Tokyo dose Y 9840 


AuSMa Sens: Qw» DKJ50 

Bjlran 001250 Hong Kong HKS18 

Bekjnm BF 16 S Hunpey FI185 

SotRua LmCOa? fcesn 

Cypnc (51.10 hda 

C2K30 ferae! 


Mata Lm0.60 Qaer QR13JJ0 
Morocco MXi15 SJVafcta Sflli 
Morocco MChiS S j nga po r eSSajP 
W<c:s Ne«n f»A 2 S Slow* RpKSLSO 
Rs60 Hgerta KaraTO S Africa R 12.00 


Cach Rd 


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IS 

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L3C00 Onsi CfllJO 

Sweden 

SKrte 

Wortd Trade Nero 

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Jap* 

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SFt33D 

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12 

ESana 

Btr 20 

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JDliO HflpprM PsoSfl 

Syria 

SC50.00 

People 

13 

rinljnd 

FMU 

hiwa; 

Potatf 330000 

Tunab anl-SOO 

tnt Eton tdems. 

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Farm 

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Uftnri 

US53.SO Ponupn Inland) 

Twfcejr 

L30000 

Ill, ■ ^ ■ 

fTOJUKT ... 

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DM3 60 

Ld 

LFifiS ES225 

UAE 

□M2 OO 




First rise for almost five years B Move intended to head off inflation 

UK raises base rates to 5.75% 


By Peter Norman, GBBan Tett 
and Philip Gawrth In London 

Mr Kenneth Clarke, the UK 
chancellor of the exchequer, 
moved to head off inflationary 
pressures by announcing a half- 
percentage-point rise in bank 
base rates to 5.75 per cent yester- 
day. 

It was the first increase in offi- 
cially inspired rates for nearly 
five years and more than 
reversed February's controversial 
quarter-point cut, which pegged 
rates at the unusually low level 
of 525 per cent for seven months. 

Yesterday's decision, signalled 
by an increase in the Bank of 
England’s minimum lending rate 
at the start of money market 
dealings, promises to be no less 
controversial. 

Marking a derisive turn in the 
UK interest-rate cycle, Mr 
Clarke's announcement disap- 
pointed business organisations 
anfl came as the financial com- 
munity had all but convinced 
itself that last Wednesday's mon- 
etary meeting between the chan- 
cellor and Mr Eddie George, gov- 
ernor of the Bank of England, 
had decided to leave rates 
unchanged. For the first time in 
living memory, a UK government 
has acted to tighten monetary 
conditions while retail price 
inflation is low. 

A buoyant Mr Clarke said he 
derided to raise rates “to take no 
risks with inflation" at a time of 
strong economic growth. 

His action was welcomed by 
financial markets. The pound 
jumped I 1 /* pfennigs and more 
than a cent before trading 
steadily for the rest of the day. 
On the Liffe futures exchange, 
the December long gilt future 
rase to lOOi in late trading, up 3 
points on the day. 

Even the equity market 
responded positively after an ini- 
tial dip. The FT-SE 100 index 
made up more than half an early 



Kenneth Clarke in London yesterday after he raised rates “to take no risks with inflation'* at a time of strong growth 


Return: Truer Hutnph rta t 


25-point loss to finish io.5 points 
down at 3,128.8. 

Pledging to keep the recovery 
“healthy and lasting," the chan- 
cellor said UK output was grow- 
ing at its fastest rate for six 
years, with exports at record lev- 
els and investment rising. Under- 
lying inflation, at 22 per cent in 
July, was at a 27-year low. 

“My overriding aim now is to 
make sure that this healthy 
growth can be sustained to 
deliver higher living standards 
and more jobs. So often in the 
past, accelerating inflation has 
prevented us from enjoying sus- 
tained growth," he said. “We 
would have jeopardised every- 
thing if we had sat about in the 
face of these very' strong figures 


Tax cut hope dismissed by 

chancellor Page 12 

Joe Rogaly Page 20 

Prevention rather than 

painful cure Page 21 

Editions) Comment Page 21 

Lex Page 22 

London stocks Page 35 

and derided we were not going to 
act." 

However, the chancellor admit- 
ted that the interest rate increase 
had been “finely judged". He and 
Mr George were “poised" to raise 
rates after their meeting last 
week but decided to take two 
days to reflect before the final 


decision, taken around Friday 
lunchtime. 

The decisive factor was last 
month's disclosure that the econ- 
omy bad been gr owi ng much fes- 
ter than thought in the first half 
of the year. That overcame any 
reservations based on more 
recent economic indicators hint- 
ing at a slowdown in consumer 
demand after the tax increases 
that took effect in April. 

Earlier yesterday, the govern- 
ment's Central Statistical Office 
published official producer price 
fignres-providzng one of the first 
indications of pending inflation- 
ary pressures. 

The price of goods leaving fac- 
tories rose last month in most 
manufacturing sectors. Manufac- 


turing output prices rose by 03 
per cent in August compared 
with July. 

The chancellor’s prompt action, 
against potential inflationary 
pressures was broadly welcomed 
by analysts who suggested that it 
lztfected a new element of credi- 
bility into tiis Government's eco- 
nomic policy. 

Business and trade union lead- 
ers were less happy. Mr Richard 
Brown, deputy director-general of 
the British Chambers of Com- 
merce, said there was “no justifi- 
cation" for the rise and warned it 
“may sabotage" much of the 
recovery. Mr Bill Morris, general 
secretary of theTGWU transport 
iminn, warned pay rlahna would 
reflect higher borrowing costs. 


Swedish exporters warn of threat to investment 

Attack on opposition economy plans in run-up to poll 


By Hugh Camegy in Stockholm 

The chiefs of Sweden's four top 
exporting companies joined 
forces yesterday to warn that 
their planned domestic invest- 
ments of up to SKrSObn. (S6.6bn) a 
year were at risk If the ground 
rules for industry - including 
income tax levels - were changed 
for the worse after Sunday's gen- 
eral election. 

The intervention by the execu- 
tives, whose companies together 
account for a third of the coun- 
try's exports and whose com- 
bined annual turnover last year 
exceeded SKr250bn, was consid- 
ered highly unusual for Sweden. 

In a joint newspaper article 
clearly aimed mainly at the oppo- 
sition Social Democratic parti', 
the heads of Volvo. Ericsson, the 
forestry group Stora and the local 
division of the Swiss-Swedish 


engineering giant ABB said their 
companies together planned 
annual investment at home or 
abroad of SKr40bn to SKroObn 
over the next five years. 

“With today’s conditions. Swe- 
den is an attractive choice. But 
uncertainty over labour market 
and economic policies, and the 
constancy with which they are 
applied, can hinder essential deci- 
sion-making in a harmful way for 
Sweden," said their article in 
Dagens Nyheter, the country’s 
biggest-selling broadsheet news- 
paper. 

The four - Mr Soren GyU, chief 
executive of Volvo: Mr Lars Ram- 
qvist chief executive of Ericsson: 
Mr Bert-Olof Svanholm. chief 
executive of Swedish ABB: and 
Mr Bo Berggren. chairman of 


Stora - said the recent surge in 
profitability and competitiveness 
in Swedish industry wrought by 
sound government policies must 
not be upset. They called on 
policymakers to tackle the bud- 
get deficit and stabilise the fast- 
growing public debt 

They also warned strongly that 
any increase in marginal income 
taxes would damage Swedish 
competitiveness. 

The Social Democrats, who are 
expected in Sundays poll to oust 
the right-centre coalition of Mr 
Carl Bildt, prime minister, have 
proposed cutting corporate tax as 
pan of measures to stimulate 
investment. But they plan to 
raise marginal income taxes 
through a 5 per cent "emer- 
gency" tax and increase capital 


gains, wealth and dividend taxes. 

The intervention had an imme- 
diate impact on the election cam- 
paign. Mr Bildt. desperate to 
close the gap on a weakening 
Social Democratic lead in the 
opinion polls, welcomed the 


article, saying it showed that 
Social Democratic policies threat- 
ened Industry and employment. 

But Social Democratic officials 
dose to Mr Ingvar Cadsson, the 
party leader, dismissed it as 
crude election propaganda. Mr 
Carlsson said the party did not 
intend changing the i prarna 
tax levels set in 1990. 


KKR buys 
US food 
group 
Borden 
for $2bn 

By Tony Jackson In New York 


Kohlberg Kravis Roberts (KKR), 
the Wall Street buyout firm best 
known for its $36bn purchase of 
RJR, Nabisco in 1989. Is returning 
to the takeover trail with the 
£2bn acquisition of tie struggling 
US food group Borden. 

The deal, in which Borden 
shareholders will take RJR stock 
in mrchangft for their shares, may 
also involve a degree of indus- 
trial merger between RJR and 
Borden. 

Borden's loss of independence 
bad been widely expected. Dam- 
aged by a series of ill-judged 
acquisitions in the late 1980s, the 
company tried unsuccessfully to 
sell Itself off last year, 
with KKR and Hanson of 
the UK among the rumoured can- 
didates. 

In the absence of a buyer, the 
share price slid from almost pm 
to la st Friday’s close of 511%. 
KKR’s offer values the shares at 
$1425. 

Founded in 1857, Borden grew 
to be the largest dairy company 
in the US and the world’s biggest 
maker of pasta. K reached crisis 
at the end of last year with the 
sacking of its chairman, Mr 
Anthony D’Amato, and the halv- 
ing of its dividend. 

The new management, headed 
by Mr Frank Tasco. chairman, 
then .proposed a disposal 
programme. Including the sale 
of the US's second-biggest snacks 
business. The plan was criticised 
by some analysts as inadequate 
and remains largely incomplete. 

"■ The KKR deal, which is typi- 
cally complex in its st ructu re, 
involves the disposal by KKR of 
half its remaining 35. per cent 
stake in RJR to pay for the acqui- 
sition of Borden. At the same 
time, RJR is to issue 5500m of 
new shares to take a 20 per cent 
stake in Borden. RJR will also 
have the option to boy a further 
10 per cent of Borden, and will 
have representation cm the Bor- 
den board. 

KKR said yesterday that the 
present Borden management 
team would remain in place. 

Analysts commented that there 


Continued cm Page 22 
Lex, Page 22 


Europe’s 
over cost 


By John dapper, 

Banking Editor 

Large European retail banks 
would have to spend up to 
Ecu225m fS274.50m) each to adapt 
technology and operations for a 
single European currency, 
according to unpublished 
research carried out for the Ecu 
Banking Association. 

The association's 90 members 
include most large banks in 
Europe. 

In a report published yester- 
day, it warned that banks in 
countries that do not take part in 
the European Monetary Union 
will face extra costs and competi- 
tive burdens. 

However, its own research esti- 
mates that large banks in Emu 
countries may have to spend 
EculOOm-EculSQm each to adapt, 
and costs could be 50 per cent 
higher if countries keep domestic 


top banks warned 
of switch to Emu 


currencies in parallel for a transi- 
tional period. 

A working paper says “such 
raw figures could of course pro- 
voke an unnecessarily alarmist 
reaction throughout the EU” if 
published. Association leaders 
said yesterday they wanted to 
emphasise Emu's opportunities. 

Mr Walter Damrn, chairman of 
the E8A committee studying 
Emu. said it bad “wanted to 
avoid the impression that Emu is 
such a costly exercise that it is 
not worth the candle". Emu is 
due to start by 1999 under the 
Maastricht treaty. 

Mr Damm said banks in coun- 
tries such as the UK and Den- 
mark. which have opt-out clauses 
from monetary* union, could face 
disadvantages because they 
would lack an Ecu funding base 
and would have to operate in par- 
allel currencies. 

The published report warns 


banks to prepare for the costs of 
transition to Emu, but says these 
could be “marginal" if absorbed 
as part of continuous develop- 
ment of information technology. 

Banks' loss of revenue from 
foreign currency exchange, and 
related financial derivatives, 
after monetary union could be 
balanced by a bigger market in 
Ecu exchange with currencies 
such as the US dollar, it says. 

However, it says every Euro- 
pean bank will have to redefine 
its size and geographical spread 
after Emu, which it says will 
have an impact similar to large- 
scale financial deregulation. 

The Impact of Emu on Banks’ 
Activities: Ecu Banking Associa- 
tion, 4. Rue de la Pane. F-75002. 
Paris. Report and working papers 
available on request 

Europe faces Ecu! 00m bank 
charge, Page 29 




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£> THE FINANCIAL TIMES LIMITED 1994 No 32,470 Week No 37 


LONDON * PARIS • FRANKFURT - NEW YORK - TOKYO 


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V 



FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


NEWS: EUROPE 


Light cast on secret manoeuvring of EU ministers 


By Kevin Brown, 

Political Correspondent 

A shaft of light fell across the 
secretive deliberations of the 
European Council yesterday 
with the release in London of 
partial details on more than 
200 single market decisions 
taken in the five years to last 
December. 

The records, which the EU 
has refused to publish, show 
that 91 of 233 single market 
decisions taken in secret by 
ministers were forced through 


against the wishes of one or 
more member states under the 
qualified majority voting sys- 
tem. The council - the most 
powerful EU institution, made 
up of EU heads of government 
- legislates in secret, and has 
resisted attempts to force dis- 
closure of its deliberations 
under the union's open govern- 
ment rules. 

Its reticence is being chal- 
lenged in the European Court 
in an action backed by the 
European parliament following 
the formal rejection of 


attempts by newspapers to 
obtain voting records. 

However, Mr Harry Barnes, a 
British Labour MP, has 
obtained details of single mar- 
ket decisions from January 
1993 through a parliamentary 
question tabled in the British 
House of Commons. 

Mr Richard Needham, UK 
trade minis ter, reveals in a let- 
ter to Mr Barnes that 142 sin- 
gle market provisions over the 
five-year period were adopted 
unanimously. Mr Needham 
does not give details of the alli- 


ances between member states 
in the 91 cases in which a vote 
was required. Nor does he say 
whether any proposals were 
withdrawn without being put 
to a vote. 

However, he discloses that 
the UK was on the winning 
side in 66 of the contested 
votes, abstained 17 times, and 
was outvoted eight times. 

The key British defeats were 
run regulations ahriliahlng con- 
trols on passenger baggage on 
flights and sea crossings, on 
food quality control, and on 


transport issues such as thB 
length of articulated lorries. 

Other member states felled 
to get their way on a range of 
more important issues, includ- 
ing directives on company law, 
public procurement, television 
broadcasting, life assurance 
services, partnership law, tele- 
communications equipment, 
money laundering, gas transit 
and capital adequacy rules. 

The council appears deter- 
mined to prevent further 
breaches of its secrecy by argu- 
ing before the European Court 


that decision-making could be 
paralysed by a public right to 
know details of the negotiating 
stances of member states. In a 
submission to the court, the 
council has urged the judges to 
ignore declarations at EU sum- 
mits in favour of greater trans- 
parency, arguing that such 
statements had no binding 
ftffi pq t: 

However, Mr Barnes plans to 
write to the European legisla- 
tion co mmi ttee of parliament 
in each member state urging 
them to use their powers to 


obtain national voting records. 
That would allow observers to 
compile a full list of the shift- 
ing alliances within the coun- 
cil. even If the court rules in 
favour of continued secrecy. 

“This may be time consum- 
ing. but It win illustrate the 
secretive way in which much 
business is conducted, " Mr 
Barnes said. It would also fuel 
the arguments for democratic 
federalism involving open and 
accountable power-sharing 
between national parliaments 
and the European parliament," 


Historic meeting is public relations reassurance for Russia and eastern Europe 

Nato begins first exercises in Poland 


:-.r 


By Christopher Bobinski m 
Poznan and Bernard Gray and 
Bruce Clark In London 

Nato began its first exercises 
on ex- Warsaw Pact territory 

yesterday on a sports field near 
Poznan in Poland, as much a 
public relations reassurance 
for eastern Europe and Russia 
as serious military training. 

Forces from as far apart as 
the US and Ukraine, Britain 
and Bulgaria took part in the 
historic meeting, part of the 
Nato “Partnership for Peace” 
initiative designed to involve 
eastern European countries in 
western security structures 
without granting them full 
membership of Nato. 

Some 600 troops from six 
Nato and seven PFP countries 
are involved in the exercise, 
codenamed Co-operative 
Bridge 94. 

Unions 
scoff at tax 
breaks 
for servants 

By David Buchan in Paris 

French prime minister Mr 
Edouard Balladur's latest job- 
creation measures drew a 
mixed reaction yesterday. The 
opposition and unions wel- 
comed the proposed govern- 
ment subsidy to companies hir- 
ing the long-term unemployed, 
but scoffed at increased tax 
incentives to encourage the 
middle class to hire more ser- 
vants. 

In his Sunday night televi- 
sion interview. Mr Balladur 
also proposed, as “a collective 
commitment" for all his 
countrymen rather than an 
electoral promise, that the 
3.3m jobless total should be 
reduced by lm "over several 
years”. 

The Socialist opposition 
party yesterday criticised the 
prime minister's plan to qua- 
druple the amount individuals 
can deduct from their own tax 
bill in social charges and pay 
for employees. "This will help 
maids in posh areas, but 
hardly make a big impact on 
slum unemployment," said the 
Socialist spokesman. 

Mr Balladur's other job plan 
is to give subsidies to compa- 
nies hiring those unemployed 
who have qualified for 
so-called RMI welfare pay- 
ments for at least two years, 
and who ore at the bottom of 
the heap of French society. 

• France's Patronat employ- 
ers' federation said yesterday it 
was launching its own inquiry 
into corporate ethics and rela- 
tions with the law and politics, 
following a series of corruption 
allegations against the heads 
of leading companies. 

The Patronat move follows 

Mr Balladur's announcement 
that he would appoint a three- 
man committee composed of a 
former Patronat president, a 
former union leader and a 
senior magistrate to report on 
issues raised by the sca ndals . 

Mr Franyois Perigot, the 
Patronat president, said his 
inquiry “would question every- 
one concerned by this dysfuno 
tioning of the system". 


The main thrust of the 
week’s exercise is to develop 
peacekeeping skills among 
small groups rather than co-or- 
dinate large movements of 
armour, the stuff of traditional 
Nato exercises. 

While Nato’s focus is increas- 
ingly on peacekeeping, this 
type of exercise is also less pro- 
vocative to Russian sensibili- 
ties, still jangled by the 
thought of Nato forces training 
on old Warsaw Pact ground. 

The Russians were conspicu- 
ous by their absence from the 
band of soldiers standing 
patiently at attention on the 
Biedrusko military area sports 
field as two Polish military 
bands dressed in uniforms dat- 
ing back to the 1830s played 
the national anthems of the 13 
participants. 

General George Joulwan, 
Nato’s supreme allied com- 


mander in Europe, called it “a 
truly historic occasion, as five 
years ago you were parted by 
the Iron Curtain and today you 
come to train together as new 
partners to build a free, demo- 
cratic and peaceful Europe”. 

Partnership for Peace aims 
to increase the ability of east 
European and Nato forces to 
work alongside one another. 

But it fells short of offering 
the mutual defence guarantees 
Nato members enjoy and many 
east European states want. 
Such tensions showed in offi- 
cial statements at the exercise. 

“The PFP leads straight to 
an independent decision to full 
integration and membership in 
Nato,” Mr Piotr Kolodriejayk, 
a former Warsaw Pact officer 
and now Poland's defence min- 
ister, said yesterday. 

This is a position which Nato 
has yet fully to accept The 


Russians, despite joining PFP, 
remain afraid it will dilute 
their special power status in 
relations with the US. 

Equally, the Co-operative 
Bridge exercise is less than the 
Poles had wanted in initial 
talks about a scenario aimed at 
having Nato forces coining to 
aid a country attacked by a 
foreign power. 

Instead, the exercises Involve 
the more everyday tasks peace- 
keeping forces might have to 
perform. For the next four 
days, young men (and women 
in the US contingent) commu- 
nicating in Fn g tish, will prac- 
tise searching vehicles at con- 
trol points, crossing rivers 
while escorting refugees, and 
patrolling areas disputed by 
hostile forces. 

Partnership for Peace has 
been criticised by leading Pol- 
ish politicians as unsatisfac- 


tory, providing no real security 
guarantee. Poland's complaints 
that PFP does not go far 
enough have produced widely 
varying reactions in Germany, 
the main west European advo- 
cate of forming links with the 
east 

One school of thought, led by 
Mr Volker Rfihe. Germany's 
defence minis ter, has argued 
publicly that Poland must be 
granted full Nato membership 
by the end of the decade. Other 
policy makers, mainly in the 
German foreign ministry, 
think it would be provocative 
to Moscow if such a deadline 
were set while Russia is still 
absorbing the effects of Its 
withdrawal from east Europe. 

Stfflt the splits over how far 
west Europe should guarantee 
eastern security seemed far 
from the minds of all the 
onlookers in Poznan. 



Russia draws up legislation to 
regulate monopoly industries 


By John ThomhHI in Moscow 

The Russian government is 
preparing radical legislation to 
regulate monopoly industries, 
such as energy and utilities, 
which threaten to distort the 
country's fragile economy. The 
law will aim to protect the con- 
sumer, counteract inflationary 
pressures, and help ease the 
Inter-enterprise debts crisis: 

The draft law, which will be 
introduced to parliament this 
autumn, envisages the creation 
of several powerful indepen- 
dent regulatory agencies to 
police the natural monopolies 
- defined as “commodity mar- 
kets in which demand is effec- 
tively satisfied in the absence 
of any competition”. The draft 
law covers oil and gas pipe- 
lines, the production and trans- 
mission of electricity, ran and 
air transport, and public utili- 
ties, such as telecommunica- 
tions. 

Officials worry that monop- 


oly abuses in these “command- 
ing heights" could damage the 
development of the broader 
economy. The fear is that such 
monopolies can stifle the emer- 
gence of effective competition 
and push through price rises 
fuelling inflation and worsen- 
ing inter-enterprise debts. 

The mass privatisation pro- 
gramme, which has transferred 
85 per cent of the country’s 
enterprises into private owner- 
ship, has concentrated enor- 
mous economic power in the 
hands of a few industrial man- 
agers hut has not yet stimu- 
lated sufficient competition to 
check their ambitions. 

The federal agencies would 
have considerable powers to 
devise and implement suitable 
regulatory frameworks for 
each targeted sector and would 
report to the government every 
year. They would be responsi- 
ble for supervising all transac- 
tions affecting a natural 
monopoly's position in the 


marketplace and any share 
purchases in other enterprises. 
They would also scrutinise big 
capital investment projects and 
any sales or transfers of assets. 

Under the proposed legisla- 
tion, the regulators would have 
unrestricted access to informa- 
tion affecting , the natural 
monopolies and would have 
considerable powers of enforce- 
ment They could reverse any 
act deemed to be illegal and 
could impose fines or penalties 
on companies infringihg the 
law. 

The agencies will contain up 
to seven m embers wbo are spe- 
cialists in the appropriate field. 
The head of a federal agency 
would be appointed for a three- 
year term by the president on 
the government's recommenda- 
tion. They would take over 
responsibility for regulating 
the natural monopolies from 
various ministries. 

The development of such a 
potentially stiff regulatory 


regime is bound to spark a 
heated debate. Some econo- 
mists - and more self-inter- 
ested industrial managers - 
have argued that monopoly 
powers are essential in the 
early stages of capitalist devel- 
opment to ensure. companies 
can amass sufficient profits to 
reinvest in big infrastructure 
projects. 

But one western economist 
welcomed the principle of 
stricter regulation and a more 
effective competition policy. 
*ln countries which are trying 
to shed a tradition of collusive 
behaviour it is particularly 
important to take steps to 
change the ground rules and 
create a real framework for 
competition rather than collu- 
sion,” the economist said. “But 
it will be critical to see how 
quickly and how well they can 
follow through with it, given a 
lot of interested parties will be 
opposed to arms-length regula- 
ttan." 


WINNING SMILES: Rudolf Scharptng. Social Democratic party 
chairman, left, with Manfred Stolpe, SPD prime minister of 
Brandenburg, who was returned with a big majority on Sunday, 
at party headquarters yesterday A»««ad*ms 

Poor showing by 
FDP worries Kohl 


By Judy Derrqysey In Berlin 

Mr Helmut K nhi the German 
chancellor, yesterday warned 
his governing Christian Demo- 
cratic Union coalition not to 
become complacent in the 
run-up to toe federal elections 
on October 16. “The election is 
not yet won and we have no 
votes to lend.” he said. 

Mr Kohl was speaking in 
Bonn after provisional election 
results showed another abso- 
lute and increased majority for 
the CDU in the eastern Ger- 
man state of Saxony. Its share 
of the vote rose from 53 .8 per 
cent to 58.1 per cent while that 
of toe opposition Social Demo- 
crats fell by nearly three per- 
centage points to 16.6 per cent 

However, the CDU ta Bran- 
denburg bad its share of the 
vote reduced by nearly 11 per- 
centage points to 18.7 per cent 


while the vote for the Social 
Democrats rose from 3&2 per 
cent to 54.1 per cent 

Mr Kohl’s warning was 
prompted by the disastrous 
showing of the Free Demo- 
crats, the junior partner in the 
governing coalition, which 
foiled to reach the minimum 5 
per cent required to enter the 
state parliaments. 

Mr Werner Hoyer, chairman 
of the FDP, said the results in 
Brandenburg and Saxony were 
“untypical- The FDP believes 
the low turnouts of under 60 
per cent damaged the party but 
helped the Party of Democratic 
Socialism, the successor to the 
former east German commu- 
nist party and now the third 
largest party in eastern Ger- 
many, holding between 16 and 
18 per cent of the vote in Bran- 
denburg and Saxony. 

Editorial Comment, Page 21 1 


Maltese resist plans to bring in value added tax 


By Godfrey Grima in Valletta 

Malta's plan to introduce value 
added tax in 1995, part of Its 
bid to join the European 
Union, has met opposition 
from toe island's business com- 
munity, trade unions and oppo- 
sition Labour party. 

The introduction of VAT is 
part or the centre-right Nation- 
alist government's programme 
of market liberalisation which 
includes cutting state subsi- 
dies, removing tariffs and end- 
ing state monopolies. 

The prime minister, Mr 
Eddie Fenech Ada mi, has 
pledged this by 1996 with two 
objectives: first, to help 
develop the island as a finan- 
cial centre to make up for the 
decline in traditional indus- 
tries and manufacturing; and 
secondly, more controversially, 
to strengthen the country's bid 
for full membership of the EU. 

The EU issued an encourag- 
ing avis last October which 


Msdta: con ti nued growt h 

Annual % change 



1888 8S 80 91 92 93 94 
Source: EMasrnam 


recognised Malta's desire to 
join the dub but warned that 



reforms would be needed, 
including the restructuring of 


the island's tax system. 

Spearheading the campaign 
against the introduction of 
these reforms are the island's 
unions and the opposition. 
Labour party, which opposes 
the EU bid. The unio ns fear 
VAT will mean high prices, 
and they accuse the govern- 
ment of rushing blindly to 
meet Brussels’ demands for 
economic convergence. 

State revenues have been 
heavily dependent on duties on 
imported goods, which are 
sometimes rated at more than 
100 per cent The rate of VAT 
will be 15 per cent on a wide 
range of goods and services, 
but excluding food and wiwdiftal 
services. 

The government insists there 
will be no cost-of-living rises. 
Inflation, fuelled by a devalua- 
tion two years ago, is about 5 
per cent 

The General Workers Union, 
which has 43/500 members (or 
more than 30 per cent of the 


country's workforce! has 
already carried out industrial 
action in protest at the VAT 
plans. The General Retailers 
and Traders Union, which has 
5,000 card-carrying members 
bat boasts the support of 
35,000, has also threatened dis- 
ruptions unless the rate of tax 
is brought down. 

While it is unlikely parlia- 
ment's ruling on VAT will be 
overturned, more sensitive 
issues lurk round the corner. 
The reform of Maltese indus- 
try, which has enjoyed a high 
degree of protection, will be 
especially painful. Small com- 
panies involved in construc- 
tion and furniture making, 
which account for 70 per cent 
of industrial employment hide 
behind stringent tariff and 
non-tariff barriers, and the 
shipbuilding sector, which pro- 
vides 5 per cent of employ- 
ment, is heavily subsidised. 

Other pending reforms 
include a new banking law 


which will abolish off-shore 
accounts to create the same- 
conditions for locals and for- 
eigners alike, and a privatisa- 
tion programme. Both are 
likely to provoke opposition. 

Along with looking for a role 
in Europe, the reforms are 
aimed at developing Malta as a 
financial and trading centre. It 
is hoped financial services 
could account for 10 to 15 per 
cent of GDP within five years 
If the reform programme is 
allowed to go ahead. 

Ironically, however, the 
main threat to Malta's EU 
membership bid comes not 
from domestic opposition to 
the reforms but from the EU 
itself. EU members are resist- 
ing extending the current prin- 
ciple of toe veto in voting to 
such small entities - Malta's 
GNP is 0.03 per cent that of the 
EU. 

No progress is likely until 
1996, when the EU will discuss 
the issue of enlargement 


Exports 

fuelling 

Czech 

growth 

By Anthony Robinson 


The Czech Republic has 
virtually completed the most 
ambitious mass privatisation 
programme in the former com- 
munist bloc and has embarked 
upon export-led economic 
growth. But painful restructur- 
ing of the newly privatised 
companies still lies ahead and 
the economy requires more for- 
eign direct investment to pene- 
trate new markets. Mr Vladi- 
mir Dlouhy, trade and industry 
minis ter said yesterday. 

Addressing a Confederation 
of British Industry conference 
in London, Mr Dlouhy said the 
government now forecast a 2-3 
per cent rise in the gross 
domestic product this year, 
fuelled by rapid growth in ser- 
vice industries and an upturn 
in Industrial output 

Production from Czech facto- 
ries pl umme ted 24 per cent 
with toe collapse of Comecon 
markets and toe start of mar- 
ket reforms in 1991. But indus- 
trial output was up 1.3 per cent 
In tire first seven months of 
this year and in. July was 4.2 
higher than a year earlier. 
Growth was export-led, 
spurred by recovery in the Ger- 
man market which takes 
around 40 per cent of Czech 
exports and is the mam source 
of foreign capital. 

Mr Dlouhy identified the 
combination of the Czech 
Republic’s high skill/low wage 
costs and undervalued cur- 
rency as the economy’s main 
assets. But he warned that 
these were essentially short 
term advantages which would 
be eroded over time as living 
standards rose and the govern- 
ment moved towards full con- 
vertibility of the Czech koruna. 

Until now policy makers had 
concentrated on creating 
macro-economic stability 
rather than growth, and the 
results can be seen in a bal- 
anced budget expected single 
digit inflation this year and 
low foreign debt of |9bn 
largely offset by the $6bn held 
in reserve by toe central bank 
and commercial hawfcfag sys- 
tem, he said. 

[ Structural reforms have been 
an integral part of macro-eco- 
nomic stabilisation, including 
banking system reform and 
mass privatisation. Mr Roman 
Ceska. chairman of the 
national property fund, said 
| that the government expects to 
receive a total of CKs240bn 
($8-6hn) from privatisation and 
has taken in CKsfiObn to date. 

“By the start of next year 
around 80 per cent of the econ- 
omy win he privatised. Invest- 
ment opportunities for foreign 
investors are now concentrated 
among the ranks of the 
recently privatised compa- 
nies," he said. 

Shares can be bought 
through the Prague stock 
exchange or the electronic RM 
smal l shareholder floatin g sys- 
tem, but bigger parcels of 
shares can also be obtained. 

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FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994. 


NEWS: EUROPE 


EUROPE AN NEWS DIGEST 

Italians retain 
Brussels hopes 

Mr Silvio Berlusconi, Italy's prime minister, yesterday kept 
aliv& Italy's hopes of winning “an important ommumV portfo- 
lio” in the next European Commission. After mooting Mr 
Jacques Santo - , president-elect of the Cammissioiii, Mr Bertus- 
coni said they bad agreed to postpone a formal dedslori on 
naly^s two Commission nommatiojiB u nt il it was' dear which 
portfolios would be available, . That -moanc waiting irntn aftw 
the Danish election on September 21, which iinrifti 

whether . Mr Henning Ghristophersen of Denmark is going to 
stay on as commissi oner responsible for nrar-n v prap ^ ^iifr- pot 
icy. If not, Italy win lobby hard to replace him with Prof Mario 
Monti, an eccaaomist and head of Milan 's Bocconi University. 
The second Italian candidate for the CammlssLonis Jdhrfy to 
be Mr Enrico Vinci, secretary-general of the W n rofripn parlia- 
ment although Mr Berlusconi refused to «wmnw Sue namms 
under consideration. One potential ftaifau mmmiiadnngr , Mr 
Renat o Ruggiero, a fonner trade minister, how certain 
to be come the ElTs candidate for of toe World Trade 
Org ani sa ti o n , the successor to the . General Agreement on 
Tariffs and Trade, following ah itrfwv ia ) wwmHug rrf T^ r-jgrpT gTi 
ministers at the weekend. Andrew i/Kirm an&fcSuu de 
JanquOrta, London 1- 

Tinns agree EU farm terms;^ 

An important hurdle in Finland's progress to membership, of 
the European Union was cleared at the weekend when the 
country won EU backing for an' improved deal an the sensitive 
Issue of form subsidies. The agreement means 56 per -cent of 
Finnish agricultural land will be eligible for a hew y ppfini 
category erf 1 subsidy for the special conditions in the far. north, 
with the border being set at . the fiftnd pgmTiai. This is six 
percentage points more than the flo mmisgi nn nrl g*TmT>y pm. 
posed bed: is less than. the 84 per cent sought by FinMudL 
Foreign minister Mr Hefkki Haavisto said k was® the 
coimtry “could live with”, although Finland’s central wrwm> of 
agricultural producers rejected the package as inadequate. 
Finnish support for the EU ahead of the referendum ^Octo- 
ber 18 has been foiling in recent polls, partly because of 
concern about the impact of- membership on formers. The 
latest poll shows 38 per cent of Firms favour membership; with 
31 per cent against and 31 per cent undecided. Christopher 
Broum-Btunes, Stockholm • 

Germans hit lottery jackpot ' . 

Lotto fever, which has gripped miliums of Germans and their 
foreign neighbours and town' to talk Of noHn'ng else in 

recent weeks, finally subsided yesterday with news that three 
groups of Lotto players would share a jackpot of DM42m 
(ELI Jim) the biggest in the history of German lottery. Alter 
trying for 11 weeks to crack' the burgeoning jampot, the three 
so-called Lotto associations crossed the six .correct numbers 
and had a lottery slip with the magical seventh number which 
has so for eluded mini mis of players. Germany^ popular 
newspapers enjoy treating their readers to todepth studies of 
the new millionaires, complete with colour photo spreads, but 
it was unclear if they would be able to. do so' today because 
their identities remained a- my s t e ry ? About SfiOO people have 
become millionaires playing the weekly Lotto. Until yesterday 
the highest payout had been DMl&Sin, shared by two house- 
wives in 1992. Michael Lmdemarm, Bonn 

j Turks seek to extradite terrorist 

Turkey is to ask France to extradite Dursai; Karatas> leader of 
the left-wing terrorist organisation Dev-SoL Karataa escaped 
from mi Istanbul prisonfive years ago while serving ia -life 
emfcgahce Si 1978 DevSol ‘Bava claimed 

T nrtrfah -jrhne. ogimflaBiu 1 ^ 

Karatas was 

tatiqnvrould be' 

Western countries comni j ^ -wj^ 
amkEries 

^QQNOMic 


Zj3 




.. . . - ' >' •- '4 ■ ■ • C- ■ -■ 

French inflation; Stays Jow • ; 

Fraince •*' •’ Ftotmh consumer prices were 

. .. . . . . ' : -a ^iV. strife for the third monto . to 

mfladoo (annual M succession In August grnng 

— ' • - a an annualised inflation rate 

of 1.7 -pix cert, according to 
Insee, the national statistics 
office. The figures! underttoe 
the weakness of inflationary 
pressures despite a revival in 
the economy* The French eco- 
nomics ministry has revised 
its forecast of this year’s 
growth in gross domestic 
product from L4 par cent to 2 
per cent Mr Jean-Ciaude 
Trichet, governor of the Bank 
of France, said last week that 
the current grpwtja rate does 


Sourc« Oautstremn . ~ ~ 

not pose inflationary risks, but he said strict 
reduction policies must be adhered to. The inflation statistics 
revealed a decline of 0.6 per cent in the index for -food prices 
and a rise of 02 per cent in private sector manufactured goods. 
John Ridding, Paris .: .. / . 

• Slovakia's GDP grew by 52 per cent in the second quarter 
of 1994, the largest quarterly increase since flje end flf qomniu- 
nigm five years ago, the _ Slovak Statistics Bureau ss M yester- 
day. The increase compares to a foil of 5.1 per cent in the fame 
period last year and growth of 3,6 per cent in the first quarter 
this year. Analysts said the pace of growth in the second half 
is expected to slow. Vincent Boland, Prague 



Unbridgeable hatreds divide Moslem and Serb 

Beside the ancient Visegrad bridge in Serb-held Bosnia, Laura Silber finds old antagonisms undimmed 


A mid the destruction of 
Serb-held Bosnia, the 
bridge at Visegrad. 
built more than 400 years ago, 
bears witness to the region's 
Ottoman past. For Bosnian 
Serbs, the bridge’s U arches, 
spanning the River Drfna. rep- 
resent the Unking of Serb 
lands. For Mbslems, they sym- 
bolise Bosnia. . . . 

: Under -an inter na ti on a l peace 
plan, overwhelmingly rejected 
by the . Bosnian Serbs, the 
bridge and most of Visegrad, in 
the southeast near the SerUitn 
frontier, ; are . designated, to the 

MAolomo- •• •- — “*?*••■ 

Wfft. about 135 toternatiaual 
monitors due to be deployed 
this week on the frontiers of 
Serb-held Bosnia and Serbia 
proper to supervise Belgrade’s 
embargo, the people of Vise- 
grad are likely to feel even, 
more isolated. 

It was to. the Dxtoa valley 
that Serb- forces undertook 
some’ of their most brutal 
operations at the start of the 
28-month war. Here Moslems 
were expelled and murdered 
before they even realised that 
a real war had begun. 

These days a heavy silence 
hangs over Visegrad. On a road 
stirring through the wilds of 
Bosnia, the densely wooded 
landscape is tainted by a eftain 
of deserted villages- and 
burned-out houses. 

In one hamlet on the road to 


Visegrad. a smashed minaret 
on a heap of rubble testifies to 
the area’s Moslem heritage. 

The Serbs of Visegrad cher- 
ish the bridge despite the fact 
that it was built by Mehmed 
Pasha Sokolovic, the Ottoman 
Veztr - of Bosnia. After all, 

Mrs Sriganni Kqjic, of 

the town council, Mehmed 
Pasha was originally an Ortho- 
dox Serb who as a-chtM was 
kidnap ped , by the. Turks from 
bis home near the DrtotC "" 

She to retdBng the Bridge' an 
the River Dima. ’ the novel to 
which Nobel prize winner Ivo 
Andrte wove toe, story of toe 
bridge in to flou r centuries of 
Bosnian history. 

Andric wrote that toe bridge 
"formed an indispensable Hnk 
on the road between Bosnia 
and Serbia and f u rther,.,,” 
Thera Is still Turkish script 
etched to stone , to. the middip 
of the 180-metre structure. 
Thirteen verses remind travel- 
lers that MghwiaH Pasha built 
the bridge to 157L 
Asked why this Ottoman 
treasure escaped destruction, 
Mrs Kojic answered, Tt con- 
nects Serbs on both banks of 
the Drtoa.” 

“In any case,” she added, 
"Mehmed Pasha jwent back to 
his Serbian roots when he 
came here to build the bridge.” 

The legend describes how 
Mehmed Pasha struggled 
against evil witches who undid 



The bridge at Visegrad. Built by the Ottomans, Serbs have now driven all Moslems from the area 


the work each night until the 
Vezir immured two Serb chil- 
dren in the bridge. 

For centuries, according to 
Andric, Moslems and Serbs 
lived to harmony in Visegrad - 
but their world would quickly 
come apart whenever neigh- 
bouring countries and the 
Great Powers upset the bal- 
ance to Bosnia. 

Now, having erased almost 
all traces of Turkish rule, local 
Serbs say they will never give 
up Visegrad. 

“We will not accept this 


plan,” said Mr Drago Gavri- 
lovic. town boss erf the ruling 
party. Bosnian Serb leaders 
rejected the proposed maps, 
which calls on them to surren- 
der one-third of the TO per cent 
of Bosnia they control. 

“There are no Moslems left." 
he says of Visegrad, where 
they once made up nearly two- 
thirds of the town’s 21,000 
inhabitants. Despite Mr Gavri- 
lovic’s claims that Serb refu- 
gees have brought the popula- 
tion to its pre-war level, 
wrecked houses once owned by 


Moslems remain empty. 

On the eve of the war, one 
Saban Mura to vie. a Moslem, 
took a sledgehammer to the 
statue of Andric, which over- 
looked the bridge. This act, say 
local Serbs, started the war. 

Soon after war broke out, the 
Moslems of Visegrad either 
fled or were killed. Uncon- 
firmed reports say a paramili- 
tary leader, Vladimir Luklc, 
led the slaughter - shooting 
Moslems throughout the night 
and dropping their corpses off 
the bridge. 


Luklc frequents a local cafe 
on Visegrad's main street. 
Once named after a Moslem 
partisan hero it now bears the 
name of the Russian Cossack 
volunteer brigades wbo came 
to Bosnia to fight with the 
Serbs. 

The cafe is the haunt of the 
new Vezirs of Visegrad - 
young, battle-scarred thugs 
whose dull eyes betray no fear. 

Mrs Kojic scoffs at the notion 
of an international war crimes 
tribunal. “Are we Serbs capa- 
ble of any crimes?” she asks. In 
Visegrad. Luklc is a hero, 

Andric wrote about the Mos- 
lems organising gangs to hunt 
down Serbs after the young 
revolutionary Gavrllo Princlp 
assassinated Archduke Ferd- 
inand in Sarajevo in 1914 - one 
of the events which triggered 
the first world war. 

The bridge then separated 
Moslems and Serbs. “The 
bridge remained as if under 
sentence of death,” Andric 
wrote. “But none the less still 
whole and untouched between 
the two warring sides.” 

By the end of the novel, how- 
ever, as if in a dream, the old 
Moslem hodja sees "the ruined 
bridge, horribly, cruelly cut in 
haM". 

In Visegrad today the front 
line and the Moslems are for 
away. “We are now deep into 
Serb territory," says Mr Gavri- 
lovic. 


“I know its late, tut III like some 
sushi. How far do I tave to gfo?” 





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FINANCIAL TIMES TUESDAY SEPTEMBER 13 

NEWS: INTERNATIONAL — 


Israeli-PLO aid 
row moves to Oslo 


By Julian Ozanne in Jerusalem 

Mr Yassir Arafat. PLO 
chairman and Mr Shimon 
Peres. Israeli foreign minister, 
meet in Oslo today to try to 
resolve a row over foreign aid 
which derailed last week's 
international donors confer- 
ence and delayed the release of 
money for the cash-strapped 
Palestinian self-rule authority. 

The row focuses on Palestin- 
ian demands for donors to fund 
projects in Israeli-occupied 
Arab East Jerusalem and is yet 
another example of the tortu- 
ous problems both sides have 
in implementing their fragile 
peace agreement signed 
exactly a year ago. 

Last week's aid meeting in 
Paris broke down after Israel 
flatly refused to allow East 
Jerusalem projects to be con- 
sidered as part of the 1995 aid- 
funded Palestinian budget. 
Under the self-rule agreement, 
both sides postponed discus- 
sions on the future of Jerusa- 


lem until late 1995. However, 
the plight of Arab East Jerusa- 
lem remains the most emotive 
issue to Palestinians and a con- 
stant rallying point of Mr Ara- 
fat's critics who say he has 
conceded too much In peace 
talks with Israel. 

For the moment, the Pales- 
tinians have little alternative 
but to give in to Israeli 
opposition. 

The authority urgently needs 
donors to speed up the release 
of hundreds of millions of dol- 
lars of promised aid to help 
with economic development 
and meet high economic 
expectations. 

The PLO has presented a 
revised budget deficit of 325m 
(£16. Lm) a month. 

Israel has said it is reluctant 
to proceed with the transfer 
authority over health, welfare, 
taxation and tourism to the 
Palestinians in the still occu- 
pied West Bank until there are 
firm commitments by donors 
to meet the financial gap. Hie 


PLO is also desperate for an 
aid agreement to establish a 
“Cop Fund" worth $7m a 
month to pay the salaries and 
running costs of the 9,000- 
strong Palestinian security 
forces, soon to be expanded as 
the PLO spreads out into the 
West Bank before elections. 

For their part, international 
donors continue to insist the 
PLO demonstrates better finan- 
cial management, institution 
building and commitment to 
tax collection. 

Mr Arafat and Mr Avrabam 
Shochat. Israeli finance minis- 
ter, met in Gaza yesterday to 
ease the row that Mr Shochat 
called “a small crisis”. 

However, many senior Pales- 
tinian officials have become 
increasingly pessimistic about 
the slow progress and the 
almost daily struggle in 
painstaking negotiations with 
Israel 

Many are resentful about 
Israel's de facto veto over the 
pace of implementation. 



Three Palestinians being tried by the first Palestinian court constituted in Gaza. They are accused of killing a member of Hamas m* 


Algerian debt talks take on a surreal aspect 

Fears over the country’s political stability cloud an encouraging report from the IMF, reports Francis Ghiles 


Algerian debt: changing circumstances 



1991 92 

Sourcs: Bonk of Mgorta 


Dirtar/$ 
0 - 


5 - 


Dinars against the S 
(left scale) : 


% 
- SO 



I nternational bankers meet- 
ing in Paris today to dis- 
cuss the restructuring of 
Algeria's commercial bank 
debt should be comforted by 
the results of the first review 
of the economy conducted by 
the IMF since it signed an 
agreement with north Africa's 
largest country six month ago 
and extended a Slbn (£600m) 
stand-by credit to back up sig- 
nificant economic reforms. 

In the six months to the end 
of June, money supply grew 
more slowly than had been 
agreed with the IMF. The value 
of the dinar, which was deval- 
ued by 40 per cent last April, 
has remained virtually 
unchanged since then. 

Officials claim that inflation, 
running at more than 40 per 
cent earlier this year, will 
decline to below 30 per cent by 
the year end. And the budget 
deficit has been cut from 9.2 
per cent of gross domestic 
product in 1993 to 3.L per cent 


Less positively, many officials 
say that 2 per cent GDP growth 
is the most that can be hoped 
for, as opposed to earlier IMF 
forecasts of 3.1 per cent. 

This is explained by the 
severe drought, which will 
force Algeria to import 95 per 


cent of its cereals consumption 
against last year’s 75 per cent, 
the sharp drop in purchasing 
power caused by the devalua- 
tion, a reluctance to invest, 
and the sheer difficulty of run- 
ning factories at a time of seri- 
ous civil strife. The IMF agree- 


91 92 93 94 


ment, and the rescheduling of 
part of Algeria's debt to foreign 
governments which followed 
last May’s Paris Club meeting, 
have loosened the stranglehold 
of debt The debt service ratio, 
as a percentage of exports of 
goods and services, will fall 


this year from 86.4 per cent to 
523 per cent Imports of raw 
materials and capital goods are 
forecast to increase by $Llbn 
to $9.15bn. just below the 
$9.4bn agreed with the IMF. 
Hard currency reserves minus 
gold have increased by S600m 
to $2.1hn since the end of 1993. 

An estimated 100,000 new 
jobs are being created this 
year. However, with 240,000 
young Algerians entering the 
labour market annually, the 
country is still burdened with 
an unemployment rate of 27 
per cent. Algerian officials 
accept that a faster rate of eco- 
nomic growth is impossible 
until restructuring of the myr- 
iad loss-making state enter- 
prises is fully under way and a 
measure of civil peace is 
established. 

The first task the bankers 
must address today is the for- 
mation of a steering committee 
and appointment of a chair- 
man. Two-thirds of Algeria's 


K7bn commercial debt is owed 
to Japanese hanks and tnastng 
companies. They all agree, 
however, that Algeria is pri- 
marily within the French 
sphere of influence, and do not 
relish taking a high profile 
while the political future is so 
uncertain. 

Of the three leading French 
banks. Credit Lyonnais, which 
chaired the steering committee 
three years ago, feds it has 
shouldered its fair share of 
responsibility. Society Gener- 
ate, which has the largest expo- 
sure of the three banks to 
Algeria, has little experience of 
this kind of operation, while 
Banque Nationale de Paris 
(BNP) can argue it has virtu- 
ally no Algerian paper on its 
books. The betting in Paris is 
that the French Finance Minis- 
try will “instruct" one erf the 
three banks to step forward. 

Bankers do not as yet know 
how much of Algeria's remain- 
ing 23.1bn commercial debt 


(the $i.6bn refinanced in 1991 
will not be affected) they will 
be asked to restructure. If prin- 
cipal repayments for 1994 alone 
are considered, the amount 
would be $700m, but if repay- 
ments for 1994 and 1995 are 
included, the sum rises to 
S1.4bn. Nor do they know 
whether a “London Club” 
rescheduling or some other for- 
mula will be agreed. 

The Japanese banks made 
provisions for their Algerian 
loans In July. 

Whatever the outcome of 
today's meeting and the impri- 
matur the IMF is likely to give 
Algeria, the discussions on the 
restructuring of Algeria's for- 
eign debt remain, in the words 
of one senior banker, “some- 
what surrealistic”. 

All participants at the meet- 
ing are well aware that with- 
out a political solution to 
Algeria’s 21-month-old crisis, 
“figures, however good, are fig- 
ures and no more”. 


Global e 
agenda 
accepted 
in Cairo 

By Marie Nicholson in Cairo 

More than 150 
governments 
last night 
accepted a 
sweeping UN 
document set- 
ting a global 
agenda for pop- 
ulation stabi- 
lisation poli- 
cies into the 
next century, enshrining for 
the first time a concept of 
“reproductive rights". 

What some delegates 
described as the “toughest day 
yet” of negotiating at the 
International Conference on 
Population and Development 
cleared np almost all remain- 
ing contentious issues regard- 
ing “reproductive and sexual 
health” and the reunification 
of migrant workers' families, 
ready to submit a final text for 
approval at a plenary meeting 
today. 

“There was a semblance of f* 
divergence,” said Mr Nicolas 
Biegman, the Dutch diplomat 
and vice-chairman of the com- 
mittee discussing the text. 
“But on a great proportion of 
issues of population and devel- 
opment, including family plan- 
ning, the nations of the world 
think largely in the same 
way.” 

The final document is set for 
approval by participating 
states today, though some, 
including the Vatican, are 
expected to voice reservations 
on at least some parts of the 
text regarding abortion and 
reproductive health. A formal 
Vatican reservation is expec- 
ted today. 

Yesterday's haggling 
focused mainly on definitions 
of "reproductive and sexual 
health" which had raised 
opposition from Moslem and 
Catholic countries. Delegates 
said many misunderstandings 
surrounding these issues had 
been cleared up, particularly 
with Moslem states. 

Western medical delegates 
praised the document for 
defining for the first time in 
“international language” a 
broad concept of reproductive 
and maternal health. 




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NEWS: INTERNATIONAL 


.Strike 
called 
in Uttar 
Pradesh 


By Stefan Wagstyl 
hi NmrMM 

The north Indian state of Uttar 
Pradesh was braced yesterday 
for a general strike called by 
the state government amid 
growing inter-caste violence 
and. political turmcdl. 

Mr Malayam Singh Yadav, 
the state's chief minister, 
rejected a' call from Premier 
PV Narasimha Rao to nan™*! 
the strike fin* fear it might pro- 
voke violent demonstrations. 
Mr Yadav, who came to power 
last autumn at the h ead of a 
lower-caste aiwatw of parties, 
is the first politician to role 
Uttar Pradesh in the nam* of 
the lower castes. - 
ms avowed policy is to pro- 
mote their' interests at the 
expense of the upper castes. 
His Intentions are important 
because Uttar Pradesh, India’s 
most populous state, - is 
regarded as the cradle of 
Indian politics. Success for 
Jl caste-based, politics *H*»m could 
• threaten other states* stability. 

The Uttar- Pradesh crisi&has 
' came from Mr Yadav's efforts 
to Implement Job reservation 
policy. Under Inrtian.laW, up to 
50 per cent of public-sector Jobs 
and places at many -colleges 
must be reserved for lower 
castes. But- the law has rarely 
been folly implemented. 

Mr Yadav's attempt to hra- 
tenthis has caused widespread 
unrest in northern Uttar Prad- 
esh. where 74 per cent of the 
population is upper caste, hi 
the last month, about 10 peo- 
ple, including one senior police 
officer, have been killed in vio- 
lent demonstrations. Yester- 
day, crowds burnt vehIdeB in 
the hill town of Dfehra Don. 

Mr Yadav’s government last 
night was verging on collapse. 
The ruling alliance of the 
Bahujan Samaj Party and the 
Samajwadi Party commands- 
. only' 198 of 425 state assembly 
seats, and has been rating with 
the support of "82 Congress#) 
members who joined Mr Yadav 
to keep the Hindu Bharatiya 
Janata Party out of power. But 
local Congress leaders have 
asked Mr Rao’s permission to 
gtiit the -coalition.-- ■ v 'r • ‘ . 


i v na 


Indonesian whispers turn to shouts 


M embers of Indone- 
sian opposition par- 
ttesare stepping up 
efforts to bring details of an 
alleged hnnirfng - scandal into 

the open. 

The attorney-generaTs office 
in Jakarta is in vesicating the 
bad debts of PT Kantndo Prima 
Perkasa textile company, 

owned and operated by 'Mr 
Robby Tjahjadi, a controversial 
bosbussnan jajled jin. the ,3970s 
far smuggling' 

Mr TJahjadi Is -alleged to 
have -defaulted otyabew t Rp 
5O0fenof debte- fiEtfitofr ai two 


Maouela Saragosa reports on the Jakarta opposition’s 
efforts to unravel the latest alleged banking scandal 


Daya and Wimir Pwabang n uan 
Indonesia, iaore - commonly 
referred to as Bapindo. His 
company, Sanindo, Is said to 
be ‘ suffering • 'from' r serious 
liquidity proWems. 

The Baidndo.bank is also at 
toe centre of jpjafSer.^scandal 
involving MT; Eddy'jTansU, 
owner • of . the 'ipoideji . £e y 
Group, recehtiy.feeQteh&3 : toT7 

years' Jmpristfom^i - : for 
defrauding the bank of -more 
than v 


The case exposed the extent 
to which lenders collude ille- 
gally with b o rrowers to secure 
loans, bringing Out In the open 
the level a£-bad‘debts at state 
hanks. .. V- - 
The Tansfi case ‘isah appall-. 

Tnrlmftaap h attlri ngir ulmJ r y jg 

l^aiised2cmse,"^aid!^ Lak- 
samana Sukardi, econ om ic 
consultant'''- add .. - pr oininen t 
memberaf4he oppo^kki party 
HU said: <ff. . . 

Na one has been artested or. 
brought to triaTyet in toe Kfin- 
Mfl case,' bat maty Indones- 
ians are that some- 

one be held responsible. Mr 
Ijahjadi is thought to be in 
Singapore, - «V- ! 

Adding a twist to -the Kan- 
todo case are allegations that 
the fawthe company -managed 
to secure additional loans from 


Bapindo as recently as April by 
issuing faka export documents 
to support its loan application. 
If this is true, the company 
would have , secured a loan 


finance minister, has 
appointed the Federation of 
fnHnnpuiain Co-operatives 
. to take over the wiarwggmflrit 
of the company. The govern- 


Mr Sudradjad Djiwandono, governor . 
of thej^tiralbajotk, says: ‘We’ve. , if 
askedbanksto identify the clients 
creatingproblems for them and vre’re 
dealing with them one by one’ 


from Bapindo while a number 
of Bapindo executives were 
standing trial for their involve- 
ment in toe Golden Key Iran 
which sh o o k the banking 
establ ishment in Indonesia. 

hi an effort to resolve Kamn- 
do’s bad debts problems, Mr M 
Muhammad, Indonesia’s 


meat is also courting the tex- 
tile group Texmaco to take 
over Kanindo’s assets. 

Details of the Kanintta case 
were made public late last year 
but the government did not 
take any action at the time. 

Mr Tjahjadi was summoned 
to appear in a parliamentary 


hearing but members who 
questioned him about the state 
of his loans amid not back up 
their allegations because of 
banking secrecy laws. Since 
then, opposition parties have 
increased pressure on the gov- 
ernment to take action against 
MrTjahjadi. 

_ The Kanindo affair is raising 
questions about the govern- 
ment’s efforts to ctean up the 
hawlriwg SSCtOT. 

The scandal involving the 
Golden Key group prompted 
Mr Muhammad to expose the 
extent of bad loans at state 
banks, an effort praised by pri- 
vate commercial banks. 

Mr Muhammad announced 
earlier this year that 21.2 per 
cent, or about $7bn, of the out- 
standing loans extended by the 
state banks were classified as 
bad or doubtful, compared 
with 17.4 per cent at the end of 


1992 and IS per cent In 1990. 
Economists and bankers in 
Jakarta say the figure could be 
much higher. 

Since then. Indonesia's cen- 
tral bank. Bank Indonesia, 
has been conducting investiga- 
tions into state banks with 
problem loans, singling out 
companies that have caused 
the problems. Mr Sudxadjad 
Djiwandono, governor or 
the central bank, said a 
supervisory team had been 
formed with the Ministry of 
Finance. 

"We’ve asked banks to iden- 
tify the clients creating prob- 
lems for them and we’re deal- 
ing with them one by one.” the 
governor said. 

Now Indonesians are 
demanding to know how the 
central bank could have 
overlooked Kanindo’s bad 
debts. 

“The Kanin do case is caus- 
ing us major apprehension.” 
said an editorial in the 
English-language daily, the 
Jakarta Post 


L --.i£ . i" 



By Gerard Baker In Tokyo .. . 

Mr Tomiichi Murayama, 
Japan’s prime, minister, 
acknowledged yesterday that 
the rating, coahtten led by his. 
Social -Democratic party (SDP) 
and toe Liberal Democratic 
party (LDP) had suffered a 
'crushing defeat* in Sunday’s 
Upper Hous e by-election in 
Aicbi Prefecture. - . 

The candidate backed by toe 
gover nm ent L lost hecnffly ■ to a 
representative of toe opposi- 
tion parties an toe first elec- 
toral test since toe . administra- 
tion was formed in June. 

Mr M ur ayama attributed the 
setback to a late start to the 
coalition’s campaign, and an 


acknowledges ‘crushing defeat’ 


AlCfU BY-ELECTION SEPTEMBER 11 



SEP 04 

ML 82 

LDP 

544,837 (25.1 M) 

590.818 £6.1) 

SOP • 

(combined) 

367,582 (ISfe) 

Opposition partes 

831,938 (43.0) 

994.454 (44.0) 

Others 

8BL332 pi 3) 

316^42(14.0) 

Turnout 

AZJB% 

47J3% 


inability to differentiate its pol- 
icies, fnim those of its oppo- 
nents. is regrettable, " he 
declared: ‘Taccept the result 
faumbiy and wfll try again.” - 

Opposition - leaders- hailed 
their victory as a mandate to 
create a new, single political 
party to fight th&nezt election. 

"We will pot all -our energy 
into-fonmnga new party,” sad 
Mr lbutomu ffata, the former 
prime minister, and hunting 


li ght behind rim unity moves. 
“The people are Investing high 
hopes that we will persistently 
pursue reform and conduct 

rwq mnahh jnWrtwi * 

The .opposition's candidate, 
■ Mr Yuzura Tsuzuki, a -former 
labour ministry official , won 
931,986 votes, .easily defeating 
the governing parties’ nomi- 
nee, Mr JIro Mizuno, a farmer 
United Nations twpinwia*^ who 
polled 544,637 votes. 

But a more ftptaiirf analysis 
of the result suggests that the 
opposition’s early euphoria 
may be misplaced. In fact there 
was httle enthusiasm for eithar 
of the two train groupings. - 

Though the government’s 
performance was lamentablh, 
toe beneficiaries were 
not' the opposition but indepen- 
dent candidates. At -the last 
a uction to nw the constitu- 


ency was evenly divided, 
returning two members foam 
the present opposition and one 
from the governing LDP. 

In that election the LDP and 
SDP (running separately) 
secured 42 per cent of the total 
vote between them, against 44 
per cent for toe combined vote 
of today's opposition parties. 

Coalition support slumped to 
just 25J. per cent, but while the 
opposition was comfortably 
ahead. Us proportion of the 
vote also fell slightly, to 43 per 
cent • - 

The big winners were the 
various independent candi- 
dates, one of whom, Mrs Mak-. 
Jim Suehiro, a local television 
personality, came close to beat- 
ing Mr Miz uno into third place. 
Altogether, five other candi- 
dates took a remarkable 31.9 
per cent of the vote, up from, 14 



Murayama: It is regrettable. 1 accept toe result humbly* 


per cent In 1992. This strong 
performance by independents 
and parties not. ali gnprf with 
the opposition coalition, com- 
bined with the low turnout (at 
43 per cent the fourth lowest 


for the amstituency since the 
second world war) points to a 
significant degree of voter dis- 
illusionment with the main 
parties. 

During the campaign, opin- 


ion polls suggested that elec- 
tors were dissatisfied with the 
chaotic nature of Japanese pol- 
itics which, in little over a 
year, has produced no 
fewer than four changes of 
government 

The same polls detected a 
degree of cynicism from voters 
about the seriousness of any 
party's commitment bo politi- 
cal reform, a genuinely popular 
concept 

That cynicism was exacer- 
bated by the fact that both gov- 
ernment and opposition 
asserted with equal vigour 
throughout the campaign their 

ffnmmitnwnt to reform. 

Nevertheless, the political 
runes are undoubtedly more 
alarming for the SDP and the 
LDP. Sunday’s defeat is likely 
to accentuate the tensions 
within toe uneasy aHianm 

But it also makes a general 
election an even more distant 
prospect 

The two main coalition part- 
ners will probably choose to 
cling to each other more 
tightly, postponing for as long 
as possible their appointment 
with the nation's voters. 


Bolger 
forced 
into first 
coalition 

By Terry Han In Wellington 

New Zealand has its first 
coalition government for 50 
years following toe decision of 
Junior minister, Mr Ross Men- 
ranti to form his own party 
which will continue to support 
the administration of prime 
Jim Bolger. 

Mr Bolger said in a radio 
interview yesterday that Mr 
Meurant’s move was expected 
mid he believed another party 
backbencher, Michael Laws, 
would also announce he was 
forming a new party soon. 

Mr Mfeurant announced the 
formation of the Right of Cen- 
tre Party on Sunday night 

He said It aimed to appeal to 
disgruntled former members 
of the National party who 
wanted a more moderate 
approach, and to provide a 
potential coalition partner for 
the National party after the 
next election. 

Right of Centre would pitch 
Itself at 15-20 per cent of vot- 
ers in each constituency, and 
hoped to gain at least 10 seats. 

Mr Bolger has said for some 
time that he expected defec- 
tions from both main political 
parties as New Zealand moved 
towards adopting a voting sys- 
tem giving parties seats in 
parliament If they achieve a 
minimum threshold of the 
national vote, as in Germany. 
If the National party retains 
its narrow majority, the next 
election will be held under 
this system, favouring smaller 
parties, rather than the Brit- 
ish Westminster system. 

Mr Bolger said be had 
entered into an agreement 
with Mr Menrant who would 
support the government on all 
main issues to ensure It stayed 
in power for its foil three-year 
term. Mr Menrant win retain 
his post as agriculture and for- 
estry under-secretary. 

Mr Menrant is a controver- 
sial HP who sprang to 
national prominence in the 
early 1980s when, as a senior 
policeman, he led the so-called 
Red Squads that battled street 
demonstrators who were fight- 
ing against South African 
rugby tours. 


:v 1 i f*\. * 




I K BOi> 










\ 



TUESDAY SEPTEMBER 13 1994 



NEWS: THE AMERICAS 


Congress cold 
on reform 
of healthcare 


By George Graham 
In Washington 

The US Congress returned to 
Washington yesterday, after 
two weeks in recess, with less 
appetite than ever far any kind 
or healthcare legislation. 

In spite of last-minute efforts 
to achieve a minim al compro- 
mise that could squeeze 
through both chambers or Con- 
gress in the next month, there 
is little wind left in the sails of 
the reform which President 
Bill Clinton launched a year 
ago with his detailed plan to 
guarantee health insurance to 
everyone in the US. 

Some centrist Democrats 
continued to work with Sena- 
tor John Chafee and a band of 
moderate Republicans on a 
compromise bill, based on 
reforms to the insurance mar- 
ket and subsidies to expand 
health insurance coverage. 

This mainstr eam group has 
also begun discussions with 
backers of the more ambitious 
reform plan, proposed by Sena- 
tor George Mitchell. Demo- 
cratic majority leader in the 
Senate, to see whether the two 
can come together. 

However, it is by no means 
dear that such a compromise 
measure can spur enough 
enthusiasm to pass even the 
Senate. Its prospects in the 
House of Representatives seem 
dose to zero. 

Only four weeks now remain 
before Congress is due to rise 
for a month of campaigning in 
the election on November 8 


faced by the whole House and 
a third of the Senate. 

The coalition that would pre- 
fer to do nothing at ail this 
year now includes the bulk of 
the Republican members - 
some of whom are wary of tin- 
kering with the healthcare 
industry, while others are sim- 
ply determined to deny Mr 
Clinton and the Democrats any 
chance of c laimin g a victory - 
and those left-leaning Demo- 
crats who favour a national 
healthcare system. 

This group, led by Congress- 
man Jim McDermott, appears 
firmly opposed to any diluted 
reform. So does Mr Clinton. He 
has appeared to back away 
from the theatrical threat, 
made in his State of the Union 
speech early this year to veto 
any bill that did not guarantee 
universal coverage, but the 
threat has not been lifted. 

What is more, it might have 
been possible to gloss over the 
question of whether reforms 
that covered 96 or 97 per cent 
of the population constituted 
universal coverage, but no 
measure now available would 
come close to that. 

In pure political terms, some 
Democrats would prefer to give 
up the search for healthcare 
reform as soon as possible, 
rather than face an ignomini- 
ous defeat a few weeks before 
the congressional elections. 

Most members appear con- 
vinced that there is little to be 
gained with their constituents 
by pressing ahead with reform 
at all costs. 


Strike hits car 
output in Brazil 


By Angus Foster 
In Rio de Janeiro 

The main unions in Brazil's 
vehicle industry went on strike 
yesterday for an immediate 
pay rise, in the first serious 
threat to a wage freeze intro- 
duced under the government's 
anti-inflation plan. 

Production at all large facto- 
ries. based in Sao Paulo state, 
was much affected Union offi- 
cials said nearly half their 
150,000 members had stopped 
work yesterday morning. Auto- 
Latina, Brazil's biggest car- 
maker and a joint venture of 
Volkswagen and Ford, said 
production had “almost totally 
stopped". 

Anfavea, the car-makers' 
association, said that, if the 
strike lasted more than a few 
days, it would seriously disrupt 
sales because demand is high 
and stocks are “non-existent”. 

Unions are calling for sala- 
ries to be increased monthly so 
as to make up for losses in 
purchasing power through 
inflation. Such monthly 
increases were common before 
the introduction, on July l. of 
Brazil's new currency, the 
Real, under the anti-inflation 
plan. The government has now 
ruled that wage increases can 
only be granted once a year. 

Union lenders argue that offi- 
cial inflation indices show an 


113 per cent increase since the 
new currency was launched. 
They also argue that a 1992 
agreement by labour, car-mak- 
ers and the government guar- 
anteed monthly increases. 

Mr Giro Gomes, the new 
finance minister, opposed a 
compromise by unions and car- 
makers which would have 
allowed a one-off pay increase. 
He said any rise had to wait 
until the unions' annual pay 
round In April. The govern- 
ment is concerned that, if car- 
makers agree to union claims, 
other sectors will push for reg- 
ular pay adjustments. Any rise 
could also be inflationary since 
it would mean higher car 
prices and increased spending 
by workers. 

The government criticised 
the strike as "political" and 
claimed it was designed to 
undermined the Real and the 
government candidate in the 
presidential election next 
month, Mr Fernando Henrlque 
Cardoso, the finance minister 
who hatched the plan. 

The strike is led by metal- 
workers unions linked to the 
left-wing Workers' Party of Mr 
Luiz lnacio Lula da Silva, Mr 
Cardoso's main opponent 

Mr Vincente Paulo da Silva, 
president of the CUT union 
assembly, denied the strike 
was politically linked. 

See Sao Paulo survey 



Wreckage of the single-engined aeroplane which crashed on the south lawn of the White House early yesterday 


A light aircraft with Its engine switched 
off, penetrated high-security air space and 
crashed on a White House lawn early 
yesterday. It slid against the mansion, 
killing the pilot President Bill Clinton, 
his family and staff were unharmed, 
Reuter reports from Washington. 

Security agencies were trying to 
determine whether they were dealing 
with a bizarre accident or a 
kamikaze-style attack. The pilot was 


tentatively identified as a man from the 
neighbouring state of Maryland. Officials 
were pursuing reports he had stolen the 
aircraft from a Maryland air club and 
were checking reports that he had a 
history of mental Illness. 

The president, Mrs Hillary Clinton and 
their daughter Chelsea were asleep a few 
hundred yards away across Pennsylvania 
Avenue in Blair House, a guest residence. 

The aeroplane swooped from the 


direction of the Washington Monument, 
passed over a high, steel-rail fence and 
ploughed into the White House back lawn 
at about 2am local time. 

There were no reports that White House 
security forces had fired at the aircraft. 

The US secret service and the US army 
are believed to have installed anti-aircraft 
weapons on file mansion and a next-door 
building after a afarflar airborne intrusion 
in 1974. 


Cuba refugees flee via open south 


By Canute James in Kingston 
and Pascal Fletcher in Havana 

More Cubans appear to be 
leaving the unsupervised south 
coast of their country for 
neighbouring islands in the 
Caribbean, as Cuban police 
continue to patrol sections of 
Cuba’s north coast to deter 
boat people from heading for 
the US. 

Government officials in the 
Cayman island s and Jamaica 
said yesterday they feared the 
Cuban move to restrict rafters 
fleeing the north coast, follow- 
ing the agreement last week by 
the Cuban and US government 
to curb illegal migration, 
would lead to a southward 


rush of refugees. 

More than 200 refugees 
arrived in the Cayman Islands 
over the weekend, despite an 
announcement last week by 
the government of the UK 
dependency that all “economic 
migrants” would be repatri- 
ated. This brings to 620 the 
number of Cubans refugees on 
the Caymans, whose adminis- 
tration said it had no more 
money to take care of Cubans. 

Cuba's government said at 
the weekend that, until midday 
today, it would try to persuade 
would-be refugees not to 
depart in home-made raffs and 
boats. “We really don't want to 
use force,” an official state- 
ment said. But it added that. 


after the deadline, the authori- 
ties would use force if neces- 
sary to stop rafters from leav- 
ing. especially if they resisted 
violently. 

After the accord with the US, 
a flotilla of raffs carrying refu- 
gees rushed to leave beaches 
near Havana before the author- 
ities moved to stop them. 

“The agreement means noth- 
ing for us." said Mr Severe 
EstupiMn, 59, as he prepared 
to depart “People will keep on 
leaving.” More than 32,000 
Cubans have fled the reces- 
sion-hit island this year, most 
during the last month. 

J amaican immigration offi- 
cers yesterday began inter- 
viewing 25 Cubans who had 


walked off a beach and into 
one of the island's more exclu- 
sive north-coast resort hotels 
at the weekend. They had left 
Cuba from the south coast 

“Most of the Cubans coming 
here, and I presume those 
going to the Cayman Islands, 
want to go eventually to the 
US," said a Jamaican govern- 
ment spokesman. 

“But the US is not taking 
them. If they are not repatri- 
ated, their first port of rail - 
the Caymans and Jamaica - 
will be their home for some 
time." 

He said, however, that the 
Jamaican government did not 
plan to repatriate any Cuban 
refugees. 


Havana minister 
in Madrid impasse 


UK ‘in final stage’ 
of trade talks 


Mr Roberto Robaina, Cuba's 
foreign minister, is waging a 
week-long diplomatic offensive 
in Madrid to rescue the credi- 
bility of his government, but 
so far has met only reserva- 
tions from Spanish officials 
and hostility from Cuban 
opposition groups, writes Tom 
Burns in Madrid. 

Spain is trying to broker a 
transition towards political 
pluralism and a market econ- 
omy in Cuba. Madrid is urging 
on Mr Robalna's “profound 
and rapid” reforms. The talks 
follow a Cuban-US meeting in 
New York last week which 
yielded an agreement to halt 
the flaw of Cuban illegal 
migrants to Hie US. 

Madrid, which has played a 
discreet economic advisory 
role to the Cuban government 
over the past year, is under- 
stood to be particularly disap- 
pointed that a package of mea- 
sures to deregulate the 
Caribbean state's economy, 
drawn up by Mr Carlos Soi- 
chaga, a Spanish former 


finance minister, has been 
largely ignored in Havana. 

Mr Javier So Ian a, Spain's 
foreign minister, warned after 
extended talks with Mr 
Robaina that “a possible solu- 
tion today may no longer be 
possible tomorrow”. 

A spokeswoman for the 
Cuban minister, who will stay 
in Spain until tomorrow, ack- 
nowleged yesterday that dif- 
ferences had emerged in dis- 
cussions with Madrid. 

Cuban opposition politicians 
and human rights groups 
abroad nJaim that individual, 
private meetings of Mr 
Robaina and selected Cubans 
from the US, organised by the 
Spanish government in Mad- 
rid, are merely cosmetic. 

“There is no undertaking by 
[Cuban President] Fidel [Cas- 
tro] to meet the internal oppo- 
sition in Cuba," said Mr 
Antonio Guedes of the Cuban 
Democratic Platform, an oppo- 
sition grouping of liberal, 
Christian democratic and 
social democratic parties. 


Britain Is in the final stages of 
negotiating an investment pro- 
motion and protection agree- 
ment with Cuba in an effort to 
raise its trade and investment 
profile in the Caribbean's larg- 
est island, writes Pascal 
Fletcher in Havana. 

“I hope we will be able to 
reach an agreement ... we are 
in the final stages of discus- 
sions,” Mr Ian Taylor, trade 
and technology minister, said 
late on Sunday at the start of a 
three-day visit to Cuba by a 
delegation of businessmen and 
trade officials. The last official 
visit by a British minister to 
the communist-ruled island 
was almost 20 years ago. 

Mr Taylor said that despite 
the two countries’ different 
political and economic systems 
and the recession gripping 
Cuba, the British government 
saw good prospects for 
increased trade and invest- 
ment. He said he was con- 
cerned Britain was lagging 
behind Europe and Nafta 
nations in developing eco- 


nomic links with the island. 

Mr Taylor said he would be 
evaluating the economic 
reforms in Cuba since the col- 
lapse of its ties with the former 
Soviet bloc. Reforms to the 
state-controlled agriculture 
system were critical, he said. 

He would also discuss the 
issue of Cuba’s outstanding 
debt to the Paris Club and to 
British companies. The latter 
is estimated to total £60m. 

Mr Taylor drew a distinction 
between Britain's attitude to 
Cuba and the US trade 
embargo against the island. 

• “My view about our trade with 
Cuba is that it's less influenced 
by what America does, and 
more influenced by how strong 
Cuba's opening towards mar- 
ket forces is," he said. 

UK exports to Cuba totalled 
£L4m last year, a 50 per cent 
drop from 1992, caused by the 
recession and a shortage of for- 
eign exchange. But exports for 
the first half of 1994 were up 
180 per cent, mainly due to a 
rise in cereal sales. 


Scandals and . 

growth fears 

dent PRI win 

Mexican investors are taking a 

cautious view of the new 
gover nm ent says Damian Fraser 


T he euphoria that many 
investors expected 
would follow a comfort- 
able victory by Mexico's ruling 
party in last month's presiden- 
tial election Hag foiled to mate- 
rialise. 

Since Mr Ernesto Zedillo 
emerged triumphant from the 
August 21 election, allegations 
of banking fraud and corrup- 
tion, the opposition's refusal to 
endorse the electoral result. 
anri uncertainty over economic 
policy have cast a cloud over 
the political and economic 
scene. 

Investors — who had bet 
heavily on the Institutional 
Revolutionary Party’s victory 
- appear more cautious than in 
the days before the election. 
The stock market has hardly 
budged from its pre-election 
levels. Contrary to most fore- 
casts. short-term Interest rates 
have risen, and the exchange 
rate has weakened. 

The current nervousness 
over the political situation may 
soon fade. Having won more 
than SO per emit of the vote, in 
elections many outside observ- 
ers believe the freest Mexico 
has had, Mr Zedillo has a 
strong mandate to deepen the 
pro-market economic policies 
of President Carlos Salinas, 
and push ahead with further 
democratic reforms. Many 
expect Mr Zedillo's programme 
to boost economic growth and 
reduce political instability. 

However, for the moment 
confidence has been dented by 
the order for the arrest of Mr 
Carlos Cabal Peniche, the head 
of Mexico's fourth largest 
financial group and of the Del 
Monte Fresh Produce agro- 
business, cm charges that his 
h anks illegally lent him 9700m 
(£451m). Mr Cabal was one of 
Mexico's leading businessmen, 
with strong ties to politicians 
in the southeast and many 
entrepreneurs who have risen 
to prominence during the 
administration of Mr Salinas. 

While the scandal appears 
not to have affected the stabil- 
ity of the financial system, the 
opposition has attacked the 
government for giving Mr 
Cabal two banking licences. 

The incident may make for- 
eigners more careful about 
hacking Mexican businessmen. 
Mr Cabal’s purchase of Del 
Monte Fresh had been partly 
financed by $300m of high yield 
bands placed in international 
markets by Morgan Stanley. 

The Cabal affair follows alle- 
gations by Mr Eduardo Valle, a 
former official in the Attorney- 
General's Office, that drug traf- 
fickers infiltrated the security 
team of the ruling Institutional 
Revolutionary Party's initial 
presidential candidate Mr Luis 
Donaldo Colosio, who was 
assassinated in March. Traf- 
fickers may have ordered the 
assassination, it is alleged. 

Mr Valle separately raised 
questions about Mr Emilio 
Gamboa, the minis ter of com- 
munications and transport, 
wbo last November received in 
his offices a woman alleged to 
be the representative of a pow- 


erful drug carteL 

The Attorney-General's 
rfflrp has dismissed the allega- 
tions of links between drug 
traffickers and government 
and PRI officials, and Mr Gam- 
boa has vehemently denied 
any impropriety. Mr Valle’s 
accusations have damaged the 
credibility of the government's 
counter-drug operations, and 
are said to have divided the 
SfrUnaB a dminis tration onbOW 
to respond. 

These scandals have coin- 
cided with increasingly harsh 
attacks by the left wing opposi- 
tion Party of Democratic Revo- 
lution on the conduct of the 
presidential election. Mr Cuah- 
t§moc Cardenas, the PRD's 
presidential candidate, has 
gradually hardened his line 
against the government, claim- f 
ing tha t iom votes were stolen. 

He has led rallies in two states 
against the results, and threat- 
ened to withdraw from future 
elections. His rallies have had 
little public support but have 
emphasised the continuing and 
apparently unbridgeable divide 
between the PRI and the leftist 
opposition, which won 17 per 
cent of the total vote. 

In the state of Chiapas. Zapa- 
tista rebels who launched a 
rebellion at the beginning of 
the year have backed Mr Car- 
denas’s cause. 

W hile the leadership of 
the centre-right 
National Action 
Party has grudgingly accepted 
that the PRI won the election, 
radical factions in the party 
have supported Mr Cdrdenas's 
position. Mr Diego Fernandez 
de Cevalios, Pan's presidential 
candidate, after initially 
accepting defeat, has described 
the PRI's victory as illegiti- 
mate. 

Feverish speculation over 
the policy and appointments of 
the new Zedillo administration 
has farther heightened uncer- 
tainty. There is growing con- 
cern over the content of a new 
“pacto," . the agreement 
between business, labour and 
the government undo 1 which 
price, wage and exchange rate & 
policy is set r 

Mr Zedillo is expected to set 
the general policies of the new 
pacto, even though, he does not 
take office until December. 
While Mr Zedillo has publicly 
said he does not believe in a 
abrupt devaluation of the peso, 
there is speculation he may 
support an Increase in the 
daily maximum depreciation of 
the peso/dollar rate of 40 centa- 
vos a day. 

The possibility of a change 
in exchange rate policy has 
been heightened by a reported 
division between Kir Pedro 
Aspe. the finance minister, and 
the central hank, on the one 
hand, and Mr Guillermo Ortiz, 
the powerful deputy finance 
minister , on the other. The for- 
mer are believed to support a 
strong currency to maintain 
the fight against inflat ion; Mr 
Ortiz is said to back a faster 
devaluation of the currency as 
a way of boosting exports and 
economic growth. 



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FINANCIAL TIMES TUESDAY SEPTEMBER 13 


NEWS: WORLD TRADE 


Japan draws French 
flak on aircraft bid 


By Gerard Baker in Tokyo 

Mr Edouard Balladur. the 
French prime minister, has 
stepped into a growing politi- 
cal row over the Japanese gov- 
ernment's selection of a new 
multi-purpose support aircraft 
for its air defence force. 

Mr Balladur wrote person- 
ally last month to Mr Tomiichi 
Murayamn, his Japanese coun- 
terpart, urging Japan to con- 
sider a French aircraft for its 
Y30bn ($303 m) ground support 
project, code named UX. 

lire Self-Defence Agency had 
decided informally on August 
11 to recommend a US-made 
Gulfstream aircraft in prefer- 
ence to rival bids from the 
French Falcon and Canadian. 
Challenger models. But at a 
cabinet meeting the next day 
at least one minis ter is under- 
stood to have raised objections 
to the process by which the 
aircraft was selected, and the 
final decision was deferred. 

Ministers' doubts were said 
to have centred on the close 
involvement of some politi- 
cians from the former coalition 
government in the decision to 
back the Gulfstream bid. There 
were also concerns that the US 
aircraft may have been chosen 
to improve trade relations 
between the two countries. 

Foreign Ministry officials 
yesterday refused to comment 
on newspaper reports that the 
French prime minister’s letter, 



Edouard Balladur appealed to Japanese premier 


which was received in Tokyo 
on August 23, had demanded 
that the Japanese government 
select its military materiel 
through open competition, 
implicitly criticising the way 
in which procurement deci- 
sions are made. But they 
acknowledged that a letter had 
been received and that it urged 
the government to give full 
consideration to the French- 
made aircraft 

Mr Kozo Igarashi, the chief 
cabinet secretary, told a press 
conference yesterday that no 
final decision had teen made 
on the project But he said the 
letter seemed to have been 
based principally on consider- 
ations of national interest “We 


should select our next genera- 
tion aircraft objectively and 
rationally," he said. 

French officials in Tokyo 
refused to comment on the cor- 
respondence hut acknowledged 
it was unusual, but not unprec- 
edented, for heads of govern- 
ment to intervene personally 
in such matters. 

The Self-Defence Agency 
began preparing for selection 
of a new support aircraft three 
years ago. it plans to buy nine 
aircraft, at a cost of about 
Y3bn each, over the next five 
years. They will be used by the 
Japanese military to transport 
commanders and for communi- 
cations and support of military 
exercises. 


China lures auto component groups 

Foreign entrants are reshaping an antiquated industry, writes Tony Walker 


L ike participants in a 
gold rush, the world's 
top automotive compo- 
nents manufacturers are 
scrambling for a niche in 
China. General Motors' Auto- 
motive Components Group, 
TRW and Ford of the US. 
Bosch of Germany, Toyota and 
Nissan of Japan, and Daewoo 
of South Korea are just some of 
the names competing in a sec- 
tor expected to absorb $20bn of 
new investment in the next 
five years. 

Fledgling groups are also 
entering the field, attracted by 
the promise of huge demand 
for components. American 
investors, including Dean Wit- 
ter, the broking house, have 
backed, for example, the estab- 
lishment of Asian Strategic 
Investments Corporation 
(As unco) which plans to invest 
$lbn over the next two years. 

Mr Don St Pierre, president 
of Asimco, expects a "revolu- 
tion" in the components sector 
marked by a rash of joint ven- 
tures, mergers and the continu- 
ing rationalisation of small, 
inefficient producers. Many of 
China 4,800 components manu- 
facturers are expected to go 
out of business, to be replaced 
by larger units with foreign 
Involvement 

Asimco, which raised SltiOm 
initially for its China invest- 
ments, recently concluded its 
first components deal, with 
Ningguo Rubber in Anhui 
province, to produce rubber 
seals, rings and gaskets. 


Packard Electric, the US cable manufacturer, 
and China's Baicheng Automobile Wiring 
Factory will setup a joint venture in 
north-eastern Jilin province to make car parts, 
Reuter reports from Beijing. The venture, 53 per 
cent owned by Packard, will manufacture 
vehicle electrical systems, ignition cables and 
assemblies as well as automotive cables fin* 


other car makers in China, according to the 
Xinhua news agency. It said 20 per cent of the 
venture's products would be exported and that 
the venture, called Packard Electric Baicheng, 
would supply about 200,000 units of wiring 
harnesses each year for Audi and Jetta car 
made by a joint venture between China's First 
Auto Works and Volkswagen of Germany. 


Asimco h ag another 10 similar 
deals pending, which are 
expected to be concluded over 
the next few months. Its 
investment In Anhui is Slim. 

TRW, the big US space tech- 
nology and automotive parts 
conglomerate, is enlarging its 
presence in China having 
signed a memorandum of 
understanding with Jinan 
Auto-Accessories Works, one of 
China's biggest components 
manufacturers, to produce 
about 14m engine valves. 

Mr Joseph Gorman, TRWs 
chief executive officer, said the 
company wanted to be a 
“player" in China because of 
tremendous growth prospects 
in the world's fastest-growing 
automotive sector. He said he 
would not be surprised if, by 
early next century, half the 
45m-50m cars sold annually out 
of a total global car “popula- 
tion" of 475m were marketed in 
Asia, with China accounting 
for the bulk of new sales. 

C hinn 's new automotive pol- 
icy, released in July. Is provid- 
ing the catalyst for a dramatic 
transformation of the compo- 
nents sector. Ambitious plans 
to supply from domestic pro- 


duction 90 pear cent of China's 
estimated passenger car needs 
of 2m units by the end of the 
century will to itself create a 
huge demand for components. 

In 1993 China produced 
234,000 passengers cars out of 
total production nationwide of 
1.3m vehicles. About 310,460 
vehicles were imported, accord- 
ing to official figures, but this 
did not account for the thou- 
sands more that were smug- 
gled in. 

Strict local content rules and 
allied tax incentives mean that 
components manufacturers 
will be competing for a vast 
captive market. Adding impe- 
tus to the scramble is the 
demand by Chinese policy- 
makers that international car 
makers qualify for permission 
to build vehicles in China by 
first investing in components 
manufacturing. 

This requirement has drawn 
Ford, General Motors and Dae- 
woo, to name several of the 
more prominent manufactur- 
ers, into investing heavily In 
China. Ford, for example, 
announced recently that tt 
would spend $50m in two pro- 
jects in the Shanghai area, one 


of the principal hubs of the 
automotive sector in China. 

Ford’s initial investments 
include ventures for the fabri- 
cation of plastic automotive 
th»wi.Q such as instrument pan- 
els, and safety glass for wind- 
screens. Partners are the 
Shang hai Automotive Industry 
Corporation (SAIC) and Yao 
Hua Glass Works. 

M r David McKee, 
vice-president of 
Ford International 
Business Development in Bei- 
jing, said the company had 
“nailed down" the top 100 or so 

components manufacturers 
with a view to possible joint 
ventures. Of these. Ford had 
singled out eight to 10 as pro- 
spective partners with two to 
three deals close to completion 
in such areas as air-condition- 
ing and electronics. 

General Motors, through its 
Automotive Components 
Group, is engaged in a similar 
exercise in identifying invest- 
ment opportunities. Mr Rudi 
Von Meister. ACC's chief rep- 
resentative in Beijing, said the 
company was “exploring" more 
than two dozen projects, and 


had recently signed a joint ven- 
ture agreement to produce 
electronic engine control 
systems - the successor to the 
carburettor. 

This joint venture and other 
pending deals build on ACG s 

existing arrangements in 

China , which include six licen- 
sing agreements for the pro- 
duction of such items as wiring 
harnesses, spark plugs, starter 
motors and alternators, and 
steering gears. 

Daewoo of South Korea has 
signalled its intention to 
be a big player in China, with 
the focus of its activities in 
Shandong province, south-east 
of Beijing- Daewoo, according 
to Mr St Pierre of Asimco, is 
planning to fund a number of 
components suppliers in Shan- 
dong, and also intends to 
absorb some of the product in 
its car making operations in 
South Korea itself. 

Tbyota is also reported to be 
moving towards heavy invest- 
ment in China, although the 
Japanese continue to play their 
cards close to their chest. 
Among options being consid- 
ered by Toyota is the construc- 
tion of a “greenfield" plant 
near Tianjin to produce trans- 
missions. engines and other 
key components for a compact 
car, possibly the Corolla, to be 
manufactured in China. 

Across China, hundreds of 
projects are under negotiation 
in a process that, within a few 
years, will change the face of a 
hitherto antiquated sector. 


NEWS IN BRIEF 

Greeks to build 
Gazprom link 

A private Greek consortium has signed a protocol with Gazprom, 
the Russian state energy supplier, to build a 5600m pipeline 
across Bulgaria to carry Russian oil from the Black Sea to the 
Mediterranean, writes Kerin Hope in Athens. 

The 350km pipeline between the ports of Burgas in Bulgaria 
and Aiexandroupolis in north-eastern Greece will take three 
years to build and will carry 2&n40m tonnes of oil yearly, with 
storage facilities for about lbn tonnes to be constructed at the 
two ports. The Greek consortium includes the Latsis shipping and 
oil refining group, the Kopelouzos construction group and Pro- 
metheus, a joint venture between Kopelouzos and Gazprom- The 
Bulgarian and Greek state oil companies are also expected to 
participate in the project 

The pipeline will provide a new outlet for Russian oil, which 
will be sent by sea to Burgas from Novorossysk, and ensure a 
steady oil supply for Bulgaria. Gazprom and Prometheus are both 
involved in a Greek project funded mainly by the European 
Union, to build a 500km pipeline to carry natural gas from the 
Bulgarian border to Athens. 

Czech-German rail move 

Czech Railways and Deutsche Bahn. its German equivalent are 
to begin transporting freight trucks on roll on-roU off trains 
across the Czech/Gennan border from September 25 in an attempt 
to speed up journey times and lower costs, writes Vincent Boland 
in Prague. 

The service will run on the 110km rail link between Dresden 
and the Czech town of Lovosice, 65km north or Prague. A similar 
service across the Czech/Austrian border began operating yester- 
day between Ceske Budjeovice in southern Bohemia and Villach 
in Austria. The Czech/German link will initially carry 25 trucks 
daily but it is expected to be able to transport a quarter of the 
estimated 2,000 freight vehicles that cross the border each day. 
The journey time is expected to be 2Vi hours, with continuous 
customs facilities. The service will cost DM85 ($54) per journey, 
with the German state of Saxony covering any shortfall. 

Iranian gas for Pakistan 

Iran and Pakistan yesterday agreed to build an oil refinery in 
Pakistan and export Iranian natural gas and refined oil products 
to Pakistan. Reuter reports from Tehran. 

An official said the Rs22bn ($7l9m) cost of the refinery would 
be shared by the two countries. Iran last year signed an agree- 
ment with India to study the building of a $5bn, 2^00kra pipeline 
to export Iranian gas to India. 

■ Skoda Plzen, the Czech engineering conglomerate, has signed 
an agreement with China's Guangzhou Jinma Power Equipment 
Company in Canton to produce steam turbine engines with a 
capacity of up to 25MW. writes Vincent Boland. 

The terms of the agreement have not teen disclosed. Skoda 
Plzen is hiking a 70 per cent stake In the venture, which is 
targeted initially at the local Chinese market 

■ Tlie Perkins unit or Varity Corporation of the US is to form a 
joint venture with IshikawajUna-Shihaura Machinery Company, 
based in Mutsumoto, Japan, to build a range of small, law-emis- 
sion diesel engines in Britain. 

■ A Sino- Portuguese company, Adminlstrac&o de Aeroportos, has 
been awarded the contract for operational services at the new 
Macau airport The venture is unusual in that ANA will hold a 51 
per cent stake until December 1999, when Macau reverts to 
China, when it will concede two percentage paints of Its stake to 
the Chinese partner to give It a controlling interest The contract 
involves all non-commercial operational management services, 
including air traffic and ground control management 


BMW points way with its first US assembly plant 


BMW of Germany yesterday began 
production at its first US assembly 
plant, a key step in the overseas 
expansion of the European car indus- 
try, writes Kevin Done, Motor Indus- 
try Correspondent 
BMW becomes the only European 
car maker with a passenger vehicle 
assembly plant in the US, although it 
will be joined m 1996/97 by Mercedes- 
Benz, its big domestic rival, which is 


developing a plant in Alabama. Japa- 
nese car mak ers have been expanding 
rapidly in North America during the 
last decade, while the European pres- 
ence has shrank drastically. 

None of the European volume car 
makers has a production base in the 
US following the move by Volkswa- 
gen of Germany to close Hi plant at 
Westmoreland, Pennsylvania, in 1987 
after nine years of production. 


BMW has invested 9400m to 
develop its new plant at Spartanburg, 
South Carolina. It said yesterday that 
production would reach 300 cars a 
day by the end of 1998. Toward the 
end of the decade the capacity of the 
plant will be increased to 90,000 units 
a year. 

Initially BMW is producing its 3-Se- 
ries car range at the US plant, but 
from the end of 1995 the Spartanburg 


facility win become BMW's only pro- 
duction source for a new range of 
two-seater sports cars, which will be 
sold both in North America and in 
other BMW markets worldwide. 

Mercedes-Benz is investing 9300m 
to develop a plant near Tuscaloosa, 
Alabama, for the production of a new 
range of four-wheel drive sports/util- 
ity vehicles, which are to be launched 
in the world market in 1997. 


The plant will employ l|500 people 
and will produce 60,000 vehicles a 
year. 

The European car production pres- 
ence in the US will still be modest by 
comparison with the capacity devel- 
oped by Japanese vehicle makers, 
which last year produced more than 
2m cars and light trucks at 10 plants 
- wholly owned and joint ventures - 
in the US and Canada. 


Delta presses 
US for rules 
on negotiations 


By Paul Betts, 

Aerospace Correspondent 

Delta Air Lines, the third 
largest US carrier, yesterday 
called cm the US government 
to define a standard framework 
for negotiating bilateral avia- 
tion agreements. 

Mr Ron Allen, Delta’s chair- 
man, also said he was increas- 
ingly frustrated at the failure 
of the US government to 
approve a partnership with 
Virgin Atlantic Airways to 
give Delta access to London's 
Heathrow airport. 

Delta and Virgin have been 
Forced to postpone the intro- 
duction next month of their 
commercial partnership 
because of the US govern- 
ment's delay in approving the 
deal. Mr Allen said he would 
be “shocked" if his government 
ultimately blocked the deal 
announced earlier this year 
with the smaller UK carrier. 
The partnership has been 
given the go ahead by the UK 
authorities. 

Under present regulations, 
only two US carriers - Ameri- 
can and United - can serve 
Heathrow. Delta argues its 
partnership with Virgin would 
increase competition on trans- 
atlantic routes. 

Mr Richard Branson. Vir- 
gin's chairman, has recently 
been urging the UK govern- 
ment to step up pressure on 
the US to restart negotiations 
on liberalising air services 
between the two countries. 

The US walked away from 
negotiations with the UK on 
liberalising air services 


between the two countries last 
December and has since 
refused to reopen talks. 

In the absence of a clearly 
defined international aviation 
policy, the US government has 
been forced to react to each 
different bilateral negotiation 
without any standard frame- 
work, Mr Allen said. This led 
to considerable pressure on the 
US administration from the 
conflicting interests of US car- 
riers. 

American Airlines, the sec- 
ond largest US carrier which 
already files into Heathrow, 
has led the campaig n against 
the Delta-Virgin partnership. 

The UK is now expected to 
propose a new round of negoti- 
ations and offer initially 
greater access for US carriers 
to regional UK airports in 
exchange for US approval of 
the Delta-Virgin deal as well as 
other concessions for UK carri- 
ers in the US market. 

However, Sir Colin Marshall, 
chairman of British Airways, 
yesterday said he did not 
expect the talks to start before 
the end of next month. He said 
it was “ridiculous” that the US 
government had not approved 
the Virgin-Delta deal. The two 
governments needed to 
acknowledge publicaLly that 
their ultimate aim was total 
deregulation of airline services 
between the two countries. 

Although this was likely to 
take a long time to achieve. Sir 
Colin said it was important to 
establish clear milestones, with 
both sides making concessions 
to achieve the ultimate goal of 
“open sides". 



INTERNATIONAL ECONOMIC INDICATORS: PRICES AND COMPETITIVENESS 

Yearly figures ana shown In Index form with (he common base yea at 1985. The real exchange rate ban Max throughout; other cxiarterty and monthly figures show ihe percentage 

| change over the corresponding period in the previous year end are positive wfcns otherwise stated. 









■ UNITED STATES 



■ JAPAN 




■ GERMANY 








[Ml 

IM 




IHt 

’Rut 




U* 

IM 


CtnuMr 

Prataw 


Ubotr 

••drew*- 

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Prodnear 


. Umar 



Pnxtaar 



wimp 



pitas 

Entag* 

cosh 

MS 

pdore 

prim 

Esrmai 

mu . 

rata 

prim 

prim 

Emrirea 

tom 

' IS* 

1865 

1000 

100.0 

100.0 

100.0 

1000 

100.0 

100.0 

100.0 

1030 

100.0 

100D 

100.0 

.1030 

100.0 

1030 

1988 

101-9 

98.6 

102 2 

99.4 

85.0 

100.8 

95.3 

101.4 

1034 

1134 

99.9 

970 

1028 

1028 

107.4 

1887 

105.8 

100.7 

103 a 

96.7 

762 

101 o 

02.5 

1031 

100.8 

1229 

1031 

930 

1030 

107.1 

1139 

1888 

109.9 

103.2 

106D 

99.1 

710 

1020 

820 

107.8 

960 

131.0 

101.4 

960 

113D 

1039 

1130 

18» 

115.2 

V3BD 

110.0 

101.1 

740 

104.9 

940 

114.0 

36.1 

1235 

1042 

990 

1170 

1030 

107.8 

1990 

121.5 

1129 

1128 

1040 

73.4 

1080 

95.7 

1231 

980 

1033 

107.0 

101.0 

1230 

1100 

1137 

1991 

128.6 

iiea 

ii7a 

1070 

740 

111.8 

96.8 

1240 

101.8 

114.7 

1137 

1024 

1310 

USD 

1031 

1992 

130.4 

117.7 

120.1 

103.4 

740 

1130 

95.8 

125.6 

111D 

1180 

1131 

1049 

138-6 

1210 

ioae 

1883 

134.3 

naa 

123.4 

107.7 

780 

115-3 

940 

125-8 

116D 

134D 

1190 

1048 


12SD 

110-2 

3rd qtr.1893 

2a 

0.7 

22 

-0.5 

780 

1.8 

-1.8 

0.4 

50 

140.7 

40 

-02 

aa 

1.6 

1090 

4th qtr.1993 

2.7 

02 

22 

-1.7 

78.7 

IO 

-2.1 

-31 

4.0 

137.8 

27 

-02 

HA 

-1.7 

109.9 

1st qtr.1994 

25 

02 

3.0 

-1.1 

77.1 

1.4 

-20 

2.9 

3.7 

137D 

30 

02 

rva 

-26 

107.1 

2nd qtr.1994 

24 

-0.3 

2.4 

-2.1 

750 

0.6 

-2.0 



140D 

20 

03 

aa 


1070 

September 1883 

2.7 

0.4 

2.5 

-0.4 

75.4 

IO 

-2D 

ID 

70 

1390 

40 

-0 O 


ID 

1112 

October 

2.8 

02 

3 2 

-1-5 

75.9 

IO 

-2.1 

36 

7.0 

1335 

39 

-0-2 


02 

111.1 

tf miemhar 
NOVfniitrar 

2.7 

0.4 

Z5 

-0.8 

77X1 

0.9 

-2.1 

1.7 

34 

1337 

3D 

-02 


-20 

1026 

December 

20 

02 

3 2 

-2.7 

772 

IO 

-20 

-1.1 

3.4 

13SD 

37 

-31 


-29 

1020 

January 1984 

2.5 

02 

22 

-1.1 

772 

1.4 

-2.1 

40 

34 

1345 

3.5 

30 


-38 

1070 

February 

2.5 

02 

30 

-39 

77.0 

1.4 

-20 

1.7 

31 

139.4 

34 

02 


-46 

1038 

March 

25 

02 

30 

-io 

7B2 

10 

-22 

2.4 

28 

139.4 

30 

02 


-2.5 

1070 

April 

2 4 

-0.4 

2.4 

-1.7 

78 A 

0.0 

-22 

ID 

0.9 

141.4 

3.1 

31 


-37 

1039 

May 

20 

-0.4 

2.4 

-22 

75 2 

oa 

-20 

36 

aa 

1390 

30 

0.4 


-60 

107.6 

June 

ZS 

0.0 

2.4 

-22 

75.1 

0.5 

-1.9 



1390 

30 

0.4 



T06.1 

July 

22 

0.6 


-2.4 


-03 





2D 

0.4 




August 


1.9 




-02 





3D 






■ FRANCE 




■ ITALY 





■ UNITED KINGDOM 








KM 

IM 

eutsnga 




IM 

FM 

raMngs 

rati 


AediiMr 

prim 


IM 

JM 


Prim 

ptoet 

Emnfevi 

com 

prtm 

prim 

MV 

BtoU 

prim 

Eentagi 

md 

|M~ 

1988 

100.0 

100.0 

1000 

100.0 

100.0 

100.0 

100.0 

1030 

1030 

1030 

100.0 

100.0 

100.0 

100.0 

1030 

1888 

102.5 

87.2 

1040 

101D 

103.4 

106.1 

10 02 

104D 

102.7 

101D 

1024 

101.4 

107.7 

104.1 

942 

1987 

10S.9 

97J 

107.8 

103.0 

icwa 

111.0 

1030 

HID 

105D 

102.0 

107.7 

104D 

1160 

1080 

940 

1988 

108.8 

102 a 

111.1 

104.0 

1020 

1105 

106.8 

1134 

109.7 

1000 

113D 

108.7 

1232 

109.5 

1020 

1989 

112.8 

ioa.4 

115.4 

1050 

99 a 

1240 

1131 

125.6 

1123 

1036 

1210 

113D 

137.2 

1144 

1010 

1990 

nas 

107.1 

120.6 

1090 

103.8 

1310 

117.8 

134.7 

118.8 

1060 

1330 

121.0 

150.1 

122.7 

1028 

1991 

120.2 

105.8 

125.8 

113.8 

10 22 

140.3 

121.7 

147D 

1310 

1050 

1410 

127D 


1310 

1060 

1992 

123.1 

104.0 

1300 

1150 

i05a 

147.7 

124.0 

155D 

136L8 

101D 

1434 

1310 

173.1 

1329 

1030 

1993 

125.8 

101.1 

133.7 


108.5 

1539 

1237 

1610 

139.4 

870 

1437 

136.7 

1839 

1345 

937 

3rd qtr.1893 

22 

-3.4 

ruL 


1035 

40 

4 2 

4.1 

21 

87.9 

1.6 

40 



97.1 

4th qtr.1993 

2.1 

-22 

rva. 


107.7 

4.1 

3D 

33 

-1.4 

85.7 

ID 

29 




1st qtr.1994 

1.7 

-12 

rva. 


107.5 

40 

35 

40 


831 

24 

30 




2nd qtr.1994 

1.7 

-0.1 

rva. 


1070 

40 

31 

4.1 


87.3 

26 

22 

44 

02 

960 

September 1983 

2a 

rva. 

22 

rva. 

107.6 

40 

40 

40 

rva 

87.0 

ID 





October 

22 

ni 

- 

rva. 

107.4 

40 

4.1 

3D 

rva. 

88.8 

1.4 





November 

22 

oa 

- 

n.a 

107.0 

40 

39 

3D 

aa 

85.6 

1.4 

28 




December 

2.1 

nA 

22 

rva 

ioao 

4.0 

3.7 

3.8 

aa 

84.7 

ID 





Jammy 1994 

1.9 

rva. 

- 

rva 

107 a 

40 

3D 

4.0 

aa 

850 

2.5 





Eebuay 

1.8 

rva. 

- 

rva 

106.9 

40 

38 

40 

aa 

835 

24 





March 

1.5 

rva. 

2.0 

rva. 

107.9 

40 

30 

A£ 

nA 

849 

20 

2.8 




April 


nja. 


fua. 

108Ji 

4.1 

3.0 

4.6 

aa 

87 .4 

26 

22 




May 


rva. 


aa 

107.3 

4.0 

30 

40 

rva 

87.7 

25 

2.1 




June 


rva. 

22 

rva 

108.1 

3.7 

30 

30 

rva 

880 

28 

2.1 

40 

-1.1 

939 



rva. 

— 

rva 


3.6 





23 


August 

T.7 

nA 

” 

nA 


3.7 



nA 


20 




statistics lor Germany apply only to western Germany. Data supplied by Datsstmam end WEFA from rational oavamw 


Consumer prices not seasonally abated. Producer price*: not seasonally adjusted, US - finished goods, Jtran - manufactured goods. Omm, hnrtnMW 

Intermediate good*, Italy - total protkyw prices, UK - mmufoc&red produots. Eanfrrg* index; not seaaonarty aefusted, refers to arnhaa 
(wage rates in industry). Hourly except Japan (monthly) end lIK (weeldy). Unit labour easts. season** adtustsd, measured ” 

manufactuing, other countries - mantActurfng Iratoatry. Heel exchange rate: JP Morgan reel effective axchangarats Index versua°16W«Wrio^v cSSSLs 

eh nge in reiattve wholesale price of domestic manufactures. A tea In the Index hdfctfsa Improved Irtemstfcxi^ mousmai country currencies adjusted fbr 



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FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


« 


NEWS: UK 


Labour heads for row over Irish policy as City of London police pledge to maintain security levels 

Employers see Ulster peace dividend of f 350m a year 


By Michael Ca&aeil, 

Business Correspondent 

Peace in Northern Ireland 
could release £350m annually 
from the security budget 
within five years to help eco- 
nomic development in the 
province, according to the Gem- 
federation of British Industry. 

A report prepared by the CBI 
Northern Ireland over the last 
sis months and released two 
weeks into the IRA ceasefire 
says a permanent cessation of 
terrorist violence and a politi- 
cal settlement .could have a 
profound impact on the local 


economy of Ulster. 

The CBI calls an the govern- 
ment to develop a strategy 
which maintains masting pub- 
lic expenditure levels but 
which gradually redirects 
spending on law mid order into 
a programme of wealth cre- 
ation to offset job losses among 
security-related activities and 
suppliers. 

The CBr warns that cuts in 
expenditure on security could 
mean substantial job losses 
and a sharp reduction in the 
number of army personnel 
based in the province. 

The knock-on effect through- 


T ax cut hope 
dismissed by 
chancellor 


By PhOtp Stephens, 

Political Editor 

Mr Kenneth Clarke yesterday 
abruptly dismissed any pros- 
pect of tax cuts in bis Novem- 
ber Budget despite the shadow 
cast over nest month's Conser- 
vative party conference by the 
rise in interest rates. 

In a move that will dash 
remaining hopes among Tory 
MPs of a si gnificant upturn in 
the government's political for- 
tunes this autumn, Mr Clarke 
said there was “no chance’’ of 
lower taxes while the govern- 
ment was borrowing £30bn a 
year. 

Yesterday’s base rate rise 
and the chancellor's curt rejec- 
tion of recent speculation that 
he might find room for a small 
income tax cut clashed awk- 
wardly with the launch of the 
agenda for the annual party 
conference. 

Mr Jeremy Hanley, the party 
chairman, inadvertently 
showed his anxiety about the 
impact on Tory morale by voic- 
ing hopes that there would be 
no further increase in borrow- 
ing costs. 

Still discomfited by the polit- 
ical row that followed his 
weekend “gaffe” over law and 
order, Mr Hanley broke with 
the carefully scripted official 
response to comment “What 
we have to do is make sure 
that this interest-rate rise is 
it" 

With the Tories trailing 
Labour by more than 30 points 
in the opinion polls, the confer- 
ence agenda reflects growing 
discontent among local activ- 
ists over the government's 
handling of the economy. 

It includes a chorus of 
demands from constituency 
associations for tax cuts and 
the scrapping of the planned 
doubling next April of value 
added tax on domestic fuel 

Ministers acknowledged that 
the strength of the economic 
recovery shown by the latest 


Two of the UK's largest 
mortgage lenders immediately 
responded to the base rate rise 
with increases in their vari- 
able mortgage rates, while 
many other lenders signalled 
they would be announcing 
rises shortly. As they did so, a 
range of organisations and 
associations, including estate 
agents, housebuilders and 
lenders themselves, expressed 
anxiety that the Increase 
would damage the uncertain 
recovery in the UK housing 
market 


batch of indicators has yet to 
be reflected in a “feel-good” 
factor among the voters. 

Their fear is that higher 
interest rates and the round of 
further tax rises due in the 
coming months will further 
damage the government's 
standing. 

But Mr Clarke, in character- 
istically robust form at a Trea- 
sury press conference, coupled 
a reaffirmation of the govern- 
ment’s medium-term commit- 
ment to lower taxation with a 
rejection of any early tax cuts. 
Speculation to the contrary 
was "hopelessly prema- 
ture . . . not serious politics”. ' 

He acknowledged that public 
borrowing this year might be 
below the Treasury's latest 
£36tm forecast, but said it was 
still expected to be more than 
£30bn. Against that back- 
ground, “talk of tax reductions 
in November is hopelessly pre- 
mature. No c han c e ”. 

A confident prediction that 
the electorate would eventu- 
ally reward the government for 
its fiscal and monetary pru- 
dence was not shared by all his 
ministerial colleagues. 

Some believe the chancellor 
was pushed into the move by 
Mr Eddie George, governor of 
the Bank of England. They 
want the chancellor to take a 
stronger tine against the 
Bank’s “over-cautious" stance- 


out the local economy could 
also mean extensive job losses 
among small traders and busi- 
nesses. 

But the CBI also estimates 
that any losses could be offset 
by the creation of 29,000 jobs 
and up to 20,000 places offering 
vocational training by 1999. It 
says, however, that signifi- 
cantly higher levels of employ- 
ment growth might be feasible 
given a revival of the prov- 
ince's manufacturing base. 

The report sees new jobs as a 
result of an increase in inward 
investment In the last 20 years 
external corporate investors 


have created 600 jobs a year in 
Ulster and the CBI says this 
'could now rise within two or 
three years to at least 
2 , 000 . 

Other jobs, the CBI forecasts, 
should also emerge in the tour- 
ism industry, about 3,000 in the 
short-term and up to 10,000 lon- 
ger-term. 

• Labour is heading 
towards a major row at this 
month’s conference in 

Blackpool over the future of its . 
13-year-old commitment to 
campaign for Irish unity by 
consent, adds Kevin Brown. 

The row also threatens the 


futu re of Mr Kevin McNamara, 
shadow Northern Ireland sec- 
retary, whose attachment to 
Irish nationalism is regarded 
as out of date by party leaders. 

The unity by consent policy • 
adopted in 1981 after a split 
over the Troops Out movement 
- has been under severe strain 
sinc e the IRA announcement 
an open ended ceasefire last 
month. 

Mr Tony Blair, the party 
leader, believes that Labour’s 
commitment to persuade 
Ulster Unionists to agree to a 
united Ireland Is out of date 
and could damage the pros- 


pects for a permanent peace. 

Mr Blair is believed to favour 
a move towards neutrality 
which would allow Labour to 
support Northern Ireland’s 

right to remain in the UK SO 
long as the majority wish to do 
so. 

• The IRA ceasefire is 
unlikely to mean a relaxation 
in the near future of tough, 
security measures introduced 
to protect the the (Sty follow- 
ing last year’s bomb attack, 
according to the City’s new 
police commissioner, Mr Wil- 
liam Taylor, writes Jimmy 
Boris. 



Yesterday’s news found the chancellor in characteristically robust mood bat momentarily blinded by TV tights at Westminster 


Kenneth Clarke’s stock rises as 


he wrong-foots the forecasters 


Gillian Tett and Philip Gawith 

find growing respect for the man 
but not so for’the new system 


C hancellor Kenneth 
Clarke’s personal stock 
among City analysts 
was one of the dearest benefi- 
ciaries of yesterday’s surprise 
base rate rise, which wrong- 
footed most of the market and 
provoked inevitable squeals 
from business and industry. 
For the decision to raise rates 
has lent credibility to the gov- 
ernment’s new low-inflation 
creed. 

Part of the reason for the 
favourable reception, lies in the 
underlying economics. With 
output growing fast and yester- 
day’s producer price date pro- 
viding one of the first hints 
that inflationary pressures 
may be in the pipeline, the gov- 
ernment's argument that base 
rates must rise soon to avert 
inflation has already been 
widely accepted in the City. 

But the real reason for the 
positive verdict yesterday was 
more political than statistical 
For in taking the decision to 
raise rates ahead of the Conser- 
vative party conference, while 
most economic indicators sug- 


gest that consumer confidence 
is fragile, Mr Clarke yesterday 
went part of the way towards 
con vincing the City that it is 
now economic factors, rather 
than short-term politics, that is 
determining the timing of 
interest rate rises. 

As Mr Geoffrey Dicks, UK 
economist with Natwest Mar- 
kets said: “It is a bold move for 
the chancellor to go to the 
party conference with rates 
having risen - indeed, to raise 
rates with inflation this low is 
probably unprecedented. It 
und e rlin e s to us the govern- 
ment’s commitment to deliver- 
ing low inflation in the 
mpHiiim term." 

Mr David Mackie, UK econo- 
mist at J.P. Morgan, added: 
“To my mind thu can only 
improve the chancellor's repu- 
tation. This move suggests that 
although Norman Lament [the 
previous chancellor] outlined 
the inflation target as being 1-4 
per emit, the Bank of England 
and chancellor are now really 
aiming for 1-2J> per cent.” 

But though Mr Clarke’s own 


economic credentials may have 
been boosted, the verdict on 
the new system of monthly 
monetary meetings between 
Mr Clarke and Mr George 
remains more mixed. 

On one band, many analysts 
believe that the greater open- 
ness that now surrounds the 
meeting leaves the Bank of 
England with much of the 
credit for the latest rate rise. 

Mr Jeremy Hawkins, chief 
economist in London at the 
Bank of A me ri ca, for example, 
argues that the “the dear mes- 
sage" of yesterday's move is 
that “the Rank of En gland baa 

much more independence in 
setting monetary policy than it 
hag bad in its history." 

On the other hand, the logis- 
tics of the latest rise has also 
prompted complaints that the 
bank's method for announcing 
a rise is proving unecessarily 


opaque. 

The complaints may partly 
reflect red feces in the City. 
For following the bank money 
markets operations last week, 
which were widely interpreted 
as confirming that interest 
rates were unchanged, most 
economists arrived at their 
desks this week fully confident 
that a rate rise had been post- 
poned. 

For some economists like Mr 
Gavyn Davies, chief economist 
of Goldman Sachs who - tike 
many - predicted no rate 
change, this, points to an 
underlying weakness in the 
whole system. “The feet that 
fhi» decision was delayed vmtn 
Friday means that it is not 
being taken in the monetary 
meeting and that is less credi- 
bility enhancing. This is not 
the way the Bundesbank and 
the Fed operate.” 


Sharp praises expertise but 
not quality of components 


Team Lotus in trouble 
after poor racing form 


By Alan Dane 

British electronics expertise Is 
increasingly in demand at 
Sharp, the Japanese consumer 
electronics giant, but UK elec- 
tronics manufacturers are still 
failing to reach world stan- 
dards of price and perfor- 
mance. 

Mr Haruo Tsqji, Sharp presi- 
dent. said yesterday that col- 
laboration between Sharp and 
UK software specialists on new 
word processing systems had 
proved so successful that all 
future software development 
on the systems would be car- 
ried out in the UK. The soft- 
ware for the company’s, soon 
to be launched, "intelligent” 


microwave oven which sets the 
correct time and temperature 
automatically to cook a variety 
of foods was carried out in con- 
junction with the company's 
Oxford laboratories set up 
three years ago. 

He said, however, that for 
many components, UK manu- 
facturers were not at present 
competitive. Sharp buys in the 
UK some 35 per cent of the 
content of the microwave 
ovens, videocassette recorders 
and electronic typewriters that 
it manufactures at Wrexham, 
North Wales. Only a tiny pro- 
portion of the total comprises 
high technology components. 
Sharp executives complain 
they are unable to buy supplies 


of even simple components 
such as resistors in the UK at a 
competitive price. 

The Wrexham factory has 
installed its own metal forming 
equipment to make cases for 
oven and vtrs because of a 
high level of faults experienced 
with locally sourced compo- 
nents. 

Asked if Sharp would help in 
developing a technological 
infrastructure Mr Tsuji said 
Sharp might produce more of 
the components in its own fac- 
tories and under its own qual- 
ity control 

He was in the UK to mark a 
£7m investment at the Wrex- 
ham plant which has created 
some 200 new jobs in the area. 


By John Griffiths 

Administrators were called in 
yesterday by Team Lotus, one 
of the most famous British 
names in motor racing and 
five times winner of the For- 
mula One grand prix world 
championship. 

The team, founded by the 
late Mr Colin Chapman in the 
1950s, has run into financial 
difficulties as toe result of a 
long period of indifferent on- 
track performances leaving it 
with inadequate sponsorship. 

A two-car grand prix team 
requires an operating budget 
of at least £LOm a year, with 
front-running teams such as 
Williams-Benanlt spending at 


least doable tins amount 

No details of the extent of 
the team's indebtedness were 
being given last night by the 
joint administrators, Mr NeO 
Cooper and Mr Nigel Ruddock 
of accountants Robson Rhodes. 

They acknowledged both 
pressure from creditors and 
the cash Team Lotus needs to 
repay them to be “substantial” 
but said the team should be 
able to continue to race with 
the help of existing sponsors 
while the administrators 
examined possible ways of 
reorganising finances. 

Although Team Lotus is 
based only a few miles from 
Group Lotos, the sports car 
concern also founded by Hr 


Chapman, there are no connec- 
tions between the two con- 
cerns. The sports car company 
is owned by Bugatti of Italy 
and Team Lotos by a number 
of individual shareholders led 
by Mr Peter Cantos, its man- 
aging director. 

While the administrators 
have around three months in 
which, to respond to the team’s 
creditors, it is expected that 
refinancing or the team’s sale 
will take place in weeks. 

Ironically, the administra- 
tors were called in just 24 
hours after Team Lotus, with 
new Mugen engines, had quali- 
fied fourth on the grid for the 
Italian grand prix - its best 
performance in recent years. 


Britain in brief 

gggtgj* 

eSlife* 

No 10 sees 
abstention 
over Bosnia 

Britain is likely to abstain in a 
United Nations vote on lifting 
the arms embargo on the Bos- 
nian government. Downing 
Street said yesterday. 

The US administration, 
which is leaning towards sup- 
porting the lifting of the 
embargo, is expected to press 
the issue in the UN Security 
Council. 

A British abstention in a UN 
vote on a US proposal would 
mark a significant difference 
of opinion between London 
and Washington. However, 
Downing Street yesterday 
skid: “The US administration 
has known for many months 
that we believe the lifting of 
the arms embargo would make 
the situation worse*. 

While ministers are not pre- 
pared to sanction the use of 
their veto they are likely to 
authorise an abstention. 

Mr Mflirnim RWfcfnrf, defence 
secretary, warned that British 
troops would have to leave 
wa rtor n Bosnia if the embargo 
was lifted. 


Labour unrest 
in companies 

More than one in five of 
Britain’s largest unionised 
companies have experienced, 
industrial unrest during the 
past 12 months, according to a 
survey of disputes by Dibb 
Lupton Broomhead, a film of 
solicitors specialising in 
employment law. 

The survey, which is based 
on replies from 100 unionis ed 
companies out of the top 500 
UK companies, also finds that 
16.7 per cent of companies 
expect industrial unrest in. the 
next 12 months, with the 
majority of cases concentrated 
in the manufacturing sector in 
the north, of England. 


Farmers warn 
over nitrates 

Livestock farmers could be 
forced out of business and pro- 
duction badly doited by *H1- 
concejved” government plans 
for compulsory restrictions to 
cut nitrates in drinking water, 
toe National Farmers’ Union 
said yesterday. - 

Attacking proposals for 72 
“nitrate vulnerable zones”, 
covering 650,000 hectares in 
England and Wales, Mr Tony 
Pexton, NFU vice-president, 
said they were based on arbi- 
trary figures for maximum 
permitted nitrate levels. 

US watches 
water bomber 

The Russians poured cold 
water over Salisbury Plain, 
western England, at the week- 
end with a flight demonstra- 
tion ctf a giant water bomber 
aircraft designed to combat the 
growing scourge of forest fires 
causing environmental disas- 
ters throughout the world. 

The demonstration of the 
Ilyushin JL-76 water bomber, 
capable of carrying more than 
40 tonnes of. payload, was 
staged for the US Forest Ser- 
vice interested in strengthen- 
ing its fire fighting resources 
after the devastating Califor- 
nian fires last year. 


Tax-free food 
for fast dogs 

Household dogs must continue 
to pay value added tax on 
their food, but greyhounds 
now get their nourishment 
tax-free. Customs & Excise 
said yesterday. 

The department has laid 
down strict guidelines which 


will allow greyhound owners 
to buy feed . specifically 
designed for racing dogs free 
of VAT. 

The decision follows a ruling 
by the VAT tribunal, which 
rejected Customs' argument 
that greyhound feed should be 
treated in the same way as pet- 
food and be subject to VAT si 
the standard fate. . 


BBC plans 
digital network 

The BBC plans to start net* 
work radio transmissions of 
digital audio broadcasting, the 
most important development 
in tiie technology of radio for 
the past 40. years, next Septem- 
ber. 

The BBC then ' plans to 
extend the DAB broadcasts, 
which provide compact disc 
quality distortion free audio to 
both car radios and portable 
sets, gradually to 60 per cent of 
the country within the next 
few years. 

Although experimental 
transmissions are either under 
way or promised in a number 
of other European countries 
and Canada the BBC is 
believed to be the first broad- 
caster to have committed itself 
to providing a service. 

Free calls 
cost money 

Mercury One-2-One, the mobile 
phone company which mar- 
kets itself strongly on Its offer 
of free local calls, has been 
charging customers for calls 
made in “free" periods. 

OfteL the telecommunica- 
tions watchdog, said it had 
received nearly 50 complaints 
from One-2-One customers 
aggrieved at charges for local 
ran* made in the evenings and 
at weekends, when they are 
supposed to be free. 

Mercury 0ne-2-0ne said 
there was a “problem" of 
incorrect charges for a “min- 
ute proportion” of calls made 
in free periods. It said the 
charges were , caused by the 
“vagaries of a radio-bused 
system” when relating to the 
standard call zones of British 
Telecommunications. 


Exchange may 
relax rule 

The stock exchange could soon 
relax its rules governing the 
listing of new Lloyd's invest- 
ment vehicles, according to 
professionals at tiie insurance 
market. The change would 
make it. possible for Lloyd's 
managing agents to obtain a 
stock market listing for 
so-called “dedicated” funds, 
which would supply capital 
exclusively to their own syndi- 
cates. 

Lloyd’s raised some £800m in 
capital last year from corpo- 
rate investors for the first time 
in its 300 year history. But at 
present all the corporate 
investment funds listed on the 
stock exchange are categorised 
as investment trusts and do 
not have to meet the 
exchange’s requirement to 
show a three year trading 
record. 

Market sources suggest the 
exchange Is prepared to allow 
an listing for a dedi- 

cated vehicle if its syndicates 
have a three year trading 
record and. their accounts for 
the previous three years have 
been signed off. 


Last chance 
for Swans 

Swan Hunter, the Tyneside 
shipbuilder in receivership, 
was given a last chance of sur- 
vival when receivers Price 
Waterhouse postponed making 
redundant the yard’s remain- 
ing 109-strong design tram. 

The decision to give them 
another reprieve came after 
more than two hours of hard 
negotiations between the 
receivers and union officials. 

Loss of the design team 
would have made it impossible 
for Swan Hunter to tender for 
more work, In effect sealing 
its demise by ending prospects 
of a going concern sale. 



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FINANCIAL TIMES 


TUESDAY SEPTEMBER 13 1994 


FINANCIAL TIMES SURVEY 


Wow industry has coped 
Fj with economic crisis 

. Page'll 


SAO PAULO 


The social cost of 
rapid growth 
Page HI 


Tuesday September 13 1994 


I t is sometimes tempting fo imag- 
ing, billing amid the opulence gnfl 
consumerism of central Sao Paulo, 
that BrazQ is a developed country! 

. The city’s rich are among l-atta Amer- 
ica's wealthiest and fine nightly at 
expensive Enropean-style restaurants. 
Sao Paulo's companies make satel- 
lites, fighter aircraft and family 
saloon cars and are tun by overseas- 
educated managers. In the city’s com- 
mercial areas, portable telephones 
and computers are cammanplace. 

So it may at times be hard to under- 
stand, amid tire poverty and hardship 
of the city's many shanty towns, how 
such v icious contrasts in wealth and 
opportunity can g*i«t so close to 
other, hi the shanty towns, some fam- 
; dies go weeks without rnottf spend 
half their monthly wages on transport 
to and from work, and have to save 
up to telephone relatives in other 
states. 

But these contrasts, the result of 
rapid urbanisation and one of the 
world's worst income disparities, are 
so common in Brazil that it is easy to 
become irnimmft to their implications. 
For Sao Paulo, which has spent the 
last SO years establishing itself - as the- 
cormtry's economic and commercial 
centre, the urgent priority is to spread 
the wealth it is generating to a 
greater number of people. 

Sao Paulo state is about the size of 
the UK. It is home to 31m people, of 
• which roughly half live In and around 
Sao Paulo city. The state accounts for 
just under 43 per cent of Brazil’s out- 
- pot, suggesting Sao Paulo's economy 
is slightly larger thoh Turkey's but 
slightly smaller than Belgium's. 

- Its companies are among the most 
- dynamic in Tj»tip America an d nearly 
half Brazil’s biggest 50 private compa- 
nies have their head offices in the 
state. Its financial system has devefc 
oped rapidly into the most important 
in South America . Sao Paulo is home 
to four of Brazil’s five biggest private 
banks, and its stock exchange 
accounts for more than 90 per cent of 
‘ trading in Brazilian shares. Together, 
-Sao Paulo companies exported more . 
than $i3bn of goods and services in. 
199^ more than Arge ntina . 

- Despite these impressive hxmdiers, 

'• Sao Paulo has had a tough few years 
as Brazil's overall economic crisis 
mounted. Deep recession from 1990 to- 
1992 squeezed domestic sales. Faffing 
import tariffs opened some sectors of 
tile economy to foreign competition. 
Industry laid off more than 500.000 
people during the period as compa- 
• nates tried to improve productivity and 
afiust to an economy slowly opening 
to the outside world. ~ _ •’ 

-u-J.- ia «U'V ■ Jiftkn - *£ bin 


Angus Foster considers the challenges and opportunities 
facing Brazils economic heartland 


now must 



A vtow otSmo RaiAo, tfw economic and co mm are ta f contra of Brazil 


The improvement in the economy 
last year - BrazQ saw real growth of 5 
per emit - was significantly due to 
the car industry, one of Sao Paulo’s 
most important. Helped by tax cuts 
and pent-up dwnanit, the car industry 
reported its best year since the 1970s 
and production Increased 30 per cent 
to 1.39m units. 

Industry also gained from an 
improvement in retail sales, and evi- 
dence that companies were starting to 
invest in expanding capacity. Both 
trends have accelerated this year fol- 
lowing the launch in July of Brazil’s 
hew: cnrrpncy,-the Real. This has led 
to a sk£r$*otop in inflation from 
about 50 per cent a month fo less than 
5 percent 

u: i i. . : ■- -jo* 


If Mr Fernando Henri que Cardoso, 
the former Bthhim minister who has 
the support of most businessmen, 
wins next month’s presidential elec- 
tions as expected, there is likely to be 
a further sharp increase in business 
tyrnfUtannw. EEs warn opponent, the 
left-winger Mr lanz InAdo Lola da 
Silva, is exposed by business groups 
because of his mrinn Knits nnd radical 

plana in areay like land r eform 

Whoever wins the election, the Real 
is the first raQfet tbta the final step 
hi a programmgfo modernise Brazil’s 
economy. The country's creaking tax 
and social security systems also need 
thorough reform. With the federal 
government facing a mounting budget 
deficit from next year, a nd claiming ft 


cannot cut spending further, eco- 
nomic forecasting for even the short 
tennis difficult 

For Sao Paulo's state govemmart, 
the situation is equally troubled. 
While net debt has risen to $31bn, of 
which part was inherited from the 
previous regime, the state's main 
source of income, state value added 
tax, has fallen from fllbh in 1989 to 
$9bn because of economic recession 
and companies moving to other 
states. 

These financial problems have seri- 
ously unde rmined the capability of 
the present government, under Mr 
Ltdz Antonio Fleury Filho. They are 
also likely to hamper his successor, 
who is due to take office in January 


following elections next month. The 
winner is expected to be Mr Mario 
Covas, a former senator for Sao Paulo 
and a dose ally of Mr Cardoso. 

Mr Carlos Eduardo Moreira Fer- 
reira, president of the Sao Paulo Fed- 
eration of Industries, says Mr Covas 
will “suffer a lot. Hie will have to 
spend the first one and a half years 
recovering the government's finances. 
That’s his priority,” he adds. 

But plenty of other priorities will 
land on Mr Covas's desk. Mr Vi ncent 
Paulo da Silva, president of the CUT 
union, congress, says: “State govern- 
ments only act in the case of emer- 
gencies or for electoral reasons. What 
we need, instead, is a government 
which does much more in terms of 
building Infrastructure and providing 
education.” 

Mr Pedro Jacobi, who studies urban 
problems at the private Codec insti- 
tute in Sao Paulo, says his research 
shows that people's biggest concerns 
are air quality, violence and the lack 
of health centres. “What is worrying 
is that nearly 70 per cent of people 
said they expected the state to solve 
these problems, even though we are 
hAiwg r told the st a te must ghHnif and 
is without the money," he says. 

Given the speed of Sao Paulo city’s 
growth as industrialisation gathers 
pace, taking the urban population 
from L3m in 1940 to 9.5m today, some 
of its achievements are impressive. 
Mteracy. which in the 1950s extended 
to half the state’s population, has 
foUtm sharply to under 10 per cent of 
persons aged 10 or more. Sao Paulo is 
also one of only a few states in Brazil 
to have enough school places for all 
its children, although there are com- 
plaints about the quality and wages of 
its teachers. 

But the challenges now are in areas 
more associated with developed econ- 
omies as well Sao Paulo seeds to 
create secure and well-paid jobs 
rather than continue to rely on an 
expanding informal economy. Envi- 
ronmental concerns are only starting 
to be addressed. 

Meanwhile, about lm people still 
live in shanty towns, usually without 
adequate sewerage, and watch as the 
gap between rich, and poor continues 
to widen. The poorest 50 per cent of 
Brazilians saw their share of national 
income fall from 15 to 12 per cent over 
last decade. They now earn less than 
the country’s richest l per cent 
" “What you see clearly is a level of 
social disintegration. Its a result of 
the lack of jobs, the effects of drugs in 
the slums and the extent of the social 
problems, and these have been 
increasing rapidly," says Mr Jacobi. 


■ THE ECONOMY 

A shift in the 
centre of 
gravity 


Sao Paulo state remains the 
capitalist heart of Brazil. But 
its centre of gravity is gradu- 
ally shifting from a traditional 
Industrial base towards a 
diverse service economy 
responding to companies and 
consumers in what is easily 
the country’s biggest market. 

The state's 32m people, about 
a fifth of Brazil's population, 
produce 37 per cent of national 
wealth and a third of the coun- 
try's exports. 

Its Industrial dominance was 
built on the state's coffee boom 
of the last cen- - 
tury, which 
spurred a large 
influx of 
mainly Euro- 
pean immi- 
grants. Agricul- 
tural wealth combined with a 
growing and dynamic popula- 
tion fuelled industrialisation. 
This accelerated in the 1950s 
and 1960s with the arrival of 
multinatio nal car, chemical 
and manufac turing companies, 
attracted by government 
attempts to spur Brazil’s indus- 
trial growth. 

But today, like a heavy- 
weight boxer who has spent 
too much time in the ring. Sao 
Paulo’s industrial punch is 
gradually losing its power. 

Between 1980 and 1991 its 
economy averaged an annual 
growth rate of just 0.6 per cent 
compared to 1.4 per cent for 
Brazil as a whole, according to 
Seade. the state's research cen- 
tre. Sao Paulo’s share of 
national wealth in GDP terms 
fell from 41 to 37 per cent dur- 
ing the period. 

The state finance ministry 
puts Sao Paulo's gross domes- 
tic product at |215bn last year. 
But Brazil’s ecnnomic statistics 
are often unreliable, and out- 
put was probably lower. - 


Many welcome the move 
from industry to a more 
servlces-baaed economy 


The growth slowdown has 
been caused because other 
parts of Brazil, particularly 
Minas Gerais and Parana in 
the south-east, are catching up 
with Sao Paulo and attracting 
new industrial companies with 
cheap land, tax incentives and 
weaker unions. 

Many Paulistas, as the 
state's inhabitants are known, 
welcome the move from the 
often polluting industrial com- 
panies to a more services-based 
economy. Services increased 
their share of state domestic 
- product from 

50 to 58 per 
cent between 
1980 and 1991 
while industry 
fell from 47 to 
^ ■ 38 per cent, 
according to Seade. 

Agriculture has also lost 
Importance, From a dominant 
position in the 1940s, it now 
accounts for S-4 per cent of 
domestic product, though the 
figure is higher if related 
Industries such as food pro- 
cessing are included. 

Unemployment has 
increased from an average 
annual rate of 8 per cent dur- 
ing 1985-1989 to 12-15 par cent 
since 1990, according to non- 
government statistics which 
include underemployment The 
official estimate of unemploy- 
ment at 5^ per cent in June is 
widely agreed to be too low. 

Job cuts are largely due to a 
general restructuring in Brazil- 
ian industry following the 
opening of the economy to 
international competition at 
the beginning of the decade. 

For example, the jewel in 
Sao Paulo's economic crown is 
the car industry, which 
accounts for nearly 20 per cent 

Continued on Page III 



- -*-•*» ... 

• -• •••-- ■ * , .’***B? , ‘ 

CESPi theSdoPaitk30Se^^^^^^^ibos a - 


r. iris die . 


IH^ 


/he State afSOo denier In Latin America ) oocf 24% \ 

of all tfveeJectri^gei^^^ ; ■ 

CESP boasts modem ap^Gon^^^mcayagem and thetoignest reefing standards 
among power geperaii^piantsin Brazil an&itixxxx!L It composes 3 r power plants 
producing aver 9 pTOt0ci'i& m^aux^asdesttned for a growing consumer maricer. - 
And that's hot afl. yeo/s epid inj&ntinuation of 

jtssignifkxihtToleln ^Q^eri^^^j^th^Stcaec^SdoPauiQ, thepompanyisbuikjh^ ..... 
new plants thext tuffl at the nxnxtf the century. 

* • • •" *r K. - 1' • .w.'.-i . . -&■' 'a ' " ■ ■ ' 






THAT'S CUSP - Pi SUlMi PKOGKHSS WITH l .NKRHY 


rl'j . 



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OF ITS 

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pathfinders of the future: Banco Safra's Head Office, 
on Avenida Paulista. Connected to Brazil’s leading 
business centers. Banco 
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•01310-930 - Sao Paulo - Brazil 


4L&. •’ 










14 


FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


SAO PAULO II 


Angus Foster looks at how industry has coped with economic crisis 

Costs are cut as jobs are lost 


According to the dooms ters, Sao Paulo's 
industry is on a knife edge. After years 
of suffering from Brazil's economic 
crisis, companies have underinvested in 
technology and skills. They must catch 
up now, while the country’s economy 
looks to be strengthening, or face rapid 
extinction from foreign competition. 

The situation is probably slightly 
more rosy, and certainly less simple, 
than the pessimists' predictions. 
Industry unquestionably has been 
damaged by the years of recession and 
economic "shock" p lans . Manufacturing 
industry averaged a 1.3 per cent annual 
decline in output in the seven years to 
1392 and investment rates have fallen 
10 percentage points to 15 per cent since 
the start of the last decade. 

But some sectors, including food 
processing, auto parts and wood 
products, have responded welL Industry 
as a whole has been forced to reduce its 
traditional reliance on government and 
look abroad Tor new export markets. 
Levels of productivity have risen 
sharply, although they will have to 
improve much further to match 
developed countries with which Brazil 
will Increasingly have to compete. 

Mr Antonio Correa do Prado, 
economist at Sao Paulo's Dieese 
Institute, says the state's industry bears 
the scars of the last few years. 
Employment in industry is below 1986 
levels. Companies laid off 500,000 
workers during the 1990-1992 recession 
alone. 

“Sao Paulo's industry has performed 
in a typically defensive way in order to 


survive rather than expand," he says. 

Investment and new technology have 
been limited, and have mainly been 
used to improve management and 
planning processes. The use of 
computer technology in production, for 
example in design, has so far been 
limited probably because of cost, 
according to Mr Prado. 

Rather than invest, companies have 
spent the last few years trying to cut 
costs. The partial opening of Brazil’s 

economy to imports 

in 1990. and the 
realisation of 
increased future 


competition, has 
forced many 
companies to 
restructure 
radically. 

The most visible result has been the 
drop in industrial employment. But 
most companies have improved 
efficiency in other areas too. It is a 
common refrain among businessmen 
that they are this year likely to produce 
more than in 1990 with only half the 
workforce. 

Duratex, a maker of hardboard and 
bathroom fixtures with eight factories 
in Sao Paulo, has reduced its headcount 
from 14,500 to 7,300 since 1990. It has 
also moved its head office into two 
buildings instead of seven and cut the 
delay on delivering orders to the US 
from 65 to 10 days. "We realised we had 
to be competitive otherwise we would 
not survive,” says Mr Plinio Pinheiro, 
executive director. 


The rapid decline in industrial 
employment in Sao Paulo was semi as 
inevitable by companies’ managements. 
But it has been fiercely criticised by 
union leaders. They say laid-off workers 
are being forced into service sector jobs 
which are often part-time and lower 
paid. 

Mr Vincente Paulo da Silva, president 
of Brazil's main trade union grouping 
CUT, says that unions agree Brazil has 
to Integrate with the world economy 

and develop high 

technology 
industries. M But 
this can only 


Industry has been forced to 
reduce its traditional reliance on 
government and look abroad for happen if workers 
new export markets. Levels of participate. It 


productivity have risen sharply S^ng*^fkws 

the 


out onto 

street," he says. 

There have been some important 
agreements to retain labour in return 
for lower wage claims, such as the 1992. 
pact in the car industry. But industrial 
employment is likely to continue to fell 
in raming years, although at a reduced 
rate. New investment will be directed at 
technology, suggesting the state's 
economy will face a growing 
unemployment problem. 

There is greater consensus between 
management and labour on the speed of 
further opening to the world economy. 
Average tariffs have fallen from 30 to 14 
per cent since 1990. Both sides believe 
further cuts should be cautious and 
that industry needs more time to 
prepare for foreign competition. 


Recent hints from the federal 
Ministry of Finance that import tariffs 
would be lowered in a bid to sti m ulate 
competition and lower domestic prices, 
have been broadly criticised. 

Mr Carlos Eduardo Moreira Ferreira, 
president of the Federation of Sao Paulo 
Industries, believes the threats are 
bluff. "You cannot just junk our 
industries, we cann ot accept a total 
opening yet No minister of finance can 
unilaterally open our markets by 
abolishing tariffs. For a start, our 
industrialists are very strong 
politically,” he says. 

The financial problems of the federal 
and state governments have accelerated 
the state’s withdrawal from economic 
decisions, a process which is set to 
continue. Government remains an 
important client for many industrial 
sectors, but the time of cosy 
relationships is over. “We are no longer 
waiting for the government, we have 
learned to survive without them,” says 
Mr Moreira Ferreira. 

One area where businessmen do want 
government action is the port of Santos 
in the south of Sao Paulo state. This is 
Brazil's most important, but has 
become expensive because of inefficient 
union practices. Mr Pinheiro says 
Duratex finds it cheaper to send Its 
export products L 000km by road to the 
state of Parana rather than use Santos. 
Unfortunately for the businessmen. Mr 
Mario Covas. Sao Paulo's probable next 
governor, has strong backing among 
the Santos port workers, and may not 
be ready to listen to the complaints. 



The port of Santos has become expensive because of inefficient union practices 




A ttempts by the financial- 
ly-troubled state of Sao 
Paulo to privatise or 
contract out public services 
have met with delays, legal 
constraints and opposition by 
the state government and its 
companies. 

But supporters of privatisa- 
tion believe economic necessity 
will still force a radical change 
in infrastructure planning. 
They regard the state as ripe 
for development by private 
companies, sometimes in part- 
nership with the public sector, 
and predict billions of dollars 
of private investment in pro- 
jects over the coming decade. 

The belief stems from Sao 
Paulo's attraction as the 
wealthiest and most industria- 
lised Brazilian state and the 
feet that the squeeze on public 
finances building new 

motorways, power plants and 
other infrastructure projects 


Big changes in infrastructure planning may be needed 

State looks to private sector stake in projects 


increasingly difficult for the 
state, which has a total debt of 
around $31bn and a budget def- 
icit this year of 25 per cent. 

"We are seeing a shift in the 
balance between public and 
private sector, with private 
companies being given more 
space,” says Mr Carlos Roberto 
Silvestrin, executive director of 
the Tiete-Parana Development 
Agency (ADTP) and a former 
commercial manager at Cesp. 
the state-controlled power gen- 
eration company. 

The ADTP represents around 
100 private and public sector 
companies interested in pro- 
jects in the TtetO-Parand 


region. This includes six Bra- 
zilian states plus Paraguay and 
Bolivia, although projects are 
concentrated in the key market 
of Sao Paulo. The ADTP envis- 
ages development projects 
totalling 520bn by the end of 
the century, particularly in 
energy but also in motorways, 
railways and public sanitation. 

Much of the development is 
linked to plans for a gas pipe- 
line between Bolivia and Sao 
Paulo. The pipeline plan fore- 
sees delivery of an initial 8m 
cubic metres of natural gas a 
day by 1997 to the Brazilian 
market, particularly Sao Paulo. 
But financing and final feasi- 


bility studies have still not 
been defined, although both 
sides hope to reach agreement 
by the middle of next year. 

Another important project is 
the opening to navigation of 
the Tiete and Parana rivers. 
Cesp, which draws hydro-elec- 
tric power from both rivers, 
says it will complete the con- 
struction of locks along the 
waterway by the end of the 
year, making u navigable from 
the heart of Sao Paulo to the 
border with Paraguay and up 
to the Brazilian state of Golds. 
The ADTP believes the water 
way will become a catalyst for 
development of light industry 



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and will be helped by the Mar- 
cos ul common market that 
starts on January L 

Private sector involvement 
will be especially important in 
energy projects, since Sao 
Paulo may encounter an 
“energy deficit” by the end of 
the decade. Cesp estimates that 
it will need to increase its 
installed capacity, now about 
1O.0OOMW. by about 600MW a 
year to the end of the decade to 
cope with demand. "It will be 
impossible for the public sector 
to pay for this expansion and 
the only alternative is to 
attract private investment,” 
says Mr Antonio Josd Zagatto, 
Cesp’s planning and develop- 
ment manager. 

Although state-owned com- 
panies such as Cesp and the 
sanitation company Sabesp are 
involved in the ADTP venture, 
the state government's record 
in linking infrastructure pro- 
jects to private investment has 
so far been disappointing, 
according to Mr Venilton Tad- 
Ini, executive director of the 
Paulista Development Com- 
pany. 

This was created in 1992 by 
Sao Paulo businessmen, with 
the support of the state govern- 
ment, to produce viability 


studies for public sector con- 
cessions. At the same time the 
state government passed a law 
allowing such concessions. 

"We have worked on reports 
including prison privatisation 
and highway concessions but 
often very little has happened 
once we have sent them to the 
state, ” says Mr Tadini, who 
blames opposition to privatisa- 
tion among state officials and 
politicians. 

Mr Luiz Antonio Fleury, the 
state governor who leaves 
office at the end of the year, 
also blames internal opposition 
as well as the lack of a federal 
law on concessions. 

The only important result of 
Sao Paulo’s 1992 law has been 
the beginning of tender pro- 
cesses for the concession of 
three stretches of motorway. 
Under these, private compa- 
nies will be offered toll reve- 
nues for 20 or 25 years in 
return for maintaining the 
roads and building new 
stretches. 

As well as resistance to 
change among old guard offi- 
cials, other factors that have so 
far restricted private involve- 
ment in infrastructure projects 
include Brazil's economic 
instability and h i gh inflation. 


which last year hit 2500 per 
cent, and the lack of a federal 
framework in areas such as 
private energy production. 

A federal government decree 
authorising independent power 
production (IPP) has been 
expected for months but so far 
not been issued. This measure 
is likely to allow private com- 
panies to build and operate 
power plants, selling the elec- 
tricity to state-controlled dis- 
tributors and, in special cases, 
directly to customers. 

Mr Joao Magalhdes president 
of the Brazilian subsidiary of 
US engineering company 
Bechtel, has been working on 
plans for an electricity station 
in Paulinia, Sao Paulo, for 
eight months, but says that 
uncertainties stall include the 
lack of legislation and poten- 
tial project finance problems. 

Brazil's lack of experience in 
non-recourse project finance, 
also known as "stand alone” 
schemes, under which those 
undertaking to build a plant 
are not held liable by banks for 
delays or cost overruns, could 
prevent private and foreign 
companies taking on IPP 
schemes, says Mr Magalhdes. 

Under non-recourse financ- 
ing, which was used for US 


independent power plants, 
banks make sure projects are 
watertight before giving loans. 
In Brazil projects often run 
into problems because loans 
are made for badly planned 
projects since the banks know 
they can recover their money 
from the building consortium 
whatever happens to the devel- 
opment of the project, he says. 

But in spite of the uncertain- 
ties Mr MagalMes is convinced 
that sooner or later Sao Paulo 
will have to embrace private 
Infrastructure projects such as 
IPP: "The market is there, the 
big question is when it will all 
start happening. I just hope 
they don't wait until there's an 
energy crisis before taking 
action.” 

Mr Silvestrin, while accept- 
ing that progress in developing 
projects could have been 
quicker, argues a big change is 
occurring in Sao Paulo and 
Brazil as a whole. The coun- 
try’s current economic stabilis- 
ation plan and the probable 
election as president of Mr Car- 
doso, as well as the increasing 
interest being shown by pri- 
vate and foreign companies 
projects, are all evidence of 
this, he says. 

“We have even signed a 
memorandum of understand- 
ing between the ADTP and Mr 
Ron Brown, the US secretary 
of commerce, which shows the 
interest in Sao Paulo's poten- 
tial.” he says. 

Patrick McCurry 


All the delights of the big city 


Sometimes dabbed "Sooth 
America’s New York” because 
of its dynamism, skyscrapers 
and mix of cultures, Sao Paolo 
is a monster of a city. While 
Its sheer size and confusing 
layout often overwhelm, an 
energetic and friendly 
population combine with a 
lively nightlife to compensate, 
writes Patrick McCurry. 

There are nearly 10m people 
in the city and about 15m in 
the metropolitan region, 
making it one of the biggest 
cities in ft le world. It is also 
one of the most cosmopolitan, 
thanks to the inflmc of 
millions of immigrants earlier 
this century. 

There are descendants of 
Italians, Portuguese, East 
Europeans, Arabs and Jews 
and the largest Japanese 
population outside Japan. 
Recent decades have seen a big 
inflow of Brazilians in search 
of work, either from the 
state's interior or often from 
the poor north-east. Many of 
these ended up swelling the 
favela shanty towns dotted 
aroond the city. 

Orientation is a problem, 
both for newcomers and 
Panlistanos, as the city's 
inhabitants are known. 
Because of its rapid and 
unplanned growth, the lack of 
natural landmarks and a 
confusing road system, even 
locals get lost 

Fortunately for foreigners 
there are plenty of taxis at all 
times of day. In addition, work 
and social life is often 
concentrated In relatively few 
areas. These include Avenida 
Paulista, which is the main 
financial centre, Jardins and 
Itaim Bibi. These are the 
districts where imported 
luxury cars are almost as 
common as locally made Fiat 
(Jnos and YW Golfs and where 
the flats are protected by 
24-hour security guards. 

Some visitors find these 
areas a bit characterless but 
they are a symbol of 
Paulistanos' American-style 


obsession with modernity. 
Because the city grew so 
quickly during the state’s 
post-war Industrialisation old 
buildings, tocindtog the 
mansions of coffee barons, 
were torn down to make way 
for office and apartment 
blocks. Today, blocks of flats 
built in the 1950s are 
considered historic. 

The city’s old centre, known 
as “centre”, gradually lost 
importance in the 1960s and 
1970s as businesses moved out 
to areas Uke Paulista and later 
to suburbs like Santo Am are 
In the south. Today the centre 
retains its character and 
liveliness but is avoided by 
many middle-class residents 
becanse of parking problems 
and worries about crime. 

Many Panlistanos Uke to 
contrast Sao Paulo with its 
rival Bio de Janeiro. Unlike 
Rio, they say. Sao Paulo is a 
"serious” city where hard 
work is rewarded. Cariocas, as 
Rio residents are known, 
dwaniM Panlistanos as uptight 
workaholics too busy to enjoy 
the simple pleasures of life. 

Nevertheless, foreign 
visitors frequently find that 
Panlistanos, Uke most 
Brazilians, are genuinely 
friendly and belpfnL 

In many ways Sao Paolo is 
trying to be an American city, 
or at least that seems to be the 
aspiration of many nuddie- 
class Paulistanos. A frequently 
unsatisfactory public 
transport system, worries 
about crime and the city’s size 
have created a strong car 
culture. 

For example. Instead of 
taking a taxi or public 
transport many wealthy (and 
not-so-wealthy) Panlistanos 
would rather (hive to the busy 
Boa Franz Schubert, a chic 
back street housing some of 
the most ritzy night spots, and 
queue for 45 minutes to park. 
When they leave, they will 
wait another 45 minutes while 
the parking valet finds ami 
recovers their car. 


likewise, a popular evening 
out for middle-class famili es 
and adolescents is to drive to 
mie of the city’s shopping 
mails to eat window shop, go 
to the cinema or just bang out 

For many living tn the 
enormous industrial suburbs 
outside the wealthy pockets of 
the city and for the million or 
sofaveia residents, however, 
entertainment Is more likely 
to be centred on the local bar. 

Going oat is one of the city’s 
big attractions. Sao Paulo has 
a wide variety of restaurants 
thanks to its history of 
immigration, notably in the 
Japanese district of Liberdade 
and the nearby Italian 
neighbourhood of Bixiga. 
Paulistanos like to socialise 
late, often eating at 10pm, and 
then frequently carry on to a 
bar or jazz club until the early 
hours of the morning. 

The city is a leading South 
American centre for theatre, 
concerts and exhibitions. 

Many of Brazil’s outstanding 
musicians regularly perform 
in Sao Paulo while 
international performers and 
orchestras put on shows at the 
city’s opera house, the 
Olympia venue or open air 
concerts in Ibirapuera park. 

Top class football Is another 
of Sao Paulo’s leisure 
attractions. Despite losing 
many of their world cop stars 
to European teams, Sao Paulo 
FC, Palmeiras and Corinthians 
football dubs put on some of 


the best footballing shows in 
the world at city stadiums 
Morumhi and Pacaembu. 

TO escape the pollution and 
stress of the city, residents 
need no encouragement to 
head for the coast, about two 
hours away. The main resorts 
are Guarqjd, Ubatuba and 
Bhabela. These are packed in 
the summer months, 
particularly at new year and 
Carnival. In the winter, many 
make tracks for the weekend 
retreat of Campos do Jorddo in 
the mountains three hours 
away from the city. 

Useful telephone numbers: 
City code is Oil. UK consulate: 
287 7722. British chamber of 
commerce: 255 4286. US 
consulate: 881 6511. American 
chamber of commerce: 246 
9199. German consulate: 262 
8288. German chamber of 
commerce: 262 8906. Japanese 
consulate: 284 2184. Japanese 
chamber of commerce: 287 
6233. 

Stock exchange: 233 2000. 
Futures exchange: 232 5454. 
State government information 
office: 845 3476. State finance 
secretary; 259 4455. State 
governor’s office: 845 3500. 
State planning secretary: 820 
8589. 

Ttete-Parand Development 
Agency (ADTP): 282 2100. Sao 
Baulo Federation of Industries 
(Fiesp): 251 3522. 

Hotels: Maksond Plaza 252 
4411, Ca'd'Oro 256 8011, 

Caesar Park 253 6622. 


Tbe BrariUan Embassy and the Government of the 
State of Sao Paulo are organizing a Seminar on 

Sao Paulo: Trade and Investments 
Opportunities in the Heart of toe 
South American Market” 

to be held at the Lancaster Room, Savoy Hotel, Londoi 
on September 14, 4994. 

For further informal ion, please contact 
THg Brazilian Embassy, Tel: OH 44 71 499-0877 ext X 




' S u* 


FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


SAO PAULO III 


W hile decades of high inflation 
have turned Brazilians tttTq squjq 
of the world’s most creative 
t financial managers, this instability has 
abobdd bade the development of the caiK 
ttal , ma £ ket j ^ Its principal flnamdal 
centre, Sao Panlo. 

But things are changing: A more open 
economy, increasing foreign portfolio 
investment and the prospect of an end to 
high inflation could turn Sao Paulo into 
Latin America’s chief ffaanr iai rapjfa] 

. During the last decade Sao Paulo has 
ccBSoUdated. its position as the heart of 
Brazil's financial system. Hs stock marvot 




•" •: s£i 
V 


- 


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• • . . • i; 


iblv 


V'-v ... 

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Patrick McCurry on the progress of Latin America’s financial capital 

Instability holds back the markets 


it the biggest in South America. It has the 
developing world’s largest futures market 
and is home to most of the national and 
inte rnationa l banks based in 

Already this year many foreign invest- 
ment banks and funds have opened offlres 
in -Sao Paulo, betting' on an explosion in 
business as Brazil's big companies, .most of 
which 1 are based in the state, *w»Ak to 
finance expansion. 

"Except for a handful of Brazilian hanks 
still in Rio de Janeiro, all the big players 
have moved to Sao Paolo,” says Mr Jog 6 
Monforte, Citibank’s director of capital 
marke ts in Brazil. 

This move began in the 1970s when Bio 
de Janeiro began to lose its position as the 
dominant financial centre. Sao Paulo's 
industrial strength, combined with aggres- 


sive targeting of new companies coming to 
market by the Sao Paulo stock exchange 
CBovespa) were the main reasons for the 
change Today, the Bovespa represents 90 
per cent-nf the trading volume of Brazil's 
nine exchanges. 

It is hoping that, with stabilisation, it 
will recover its position asJLatin America’s 
biggest stock market from Mexico City. 

However, the Bovespa is a highly vola- 
tile market, Tarkfng liquidity. Trading is 
concentrated in only a few shares and one 
company, the govemment-contzt^ed tele- 
com giant TelebrSs, accounts for about 
half the -trading volume. 

Mr -Alvaro Augusta Vldigal,: Bovespa 
diatmuiTi, n ^nri tg "We have an tmdexde- 
v^oped market” Largely due to Brazil’s 
economic problems, such as faflatipn of 
2£00 per cent last year, there has been a 
fell in the number of listed companies and 
few capital Issues in recent years. 

. But a mere stable economy combined 
with rising share values aiwaiM increase 
the attrae tjon of the stock mark et for 
firms seeking investment capital, Mr VUt 
gal believes. .. .. - . 


THp c on ce n ti a tfi on of trading in a band- 
fid of shares has been partly res pons ible 
far the volatility, according to Mr Julius 
Buchenroda, director of investments at 
Chase Manhattan in Sao Paula investors 
have generally done well in the 1990s. The 
main Bovespa fader more than doubled 
last year after falling slightly in 1992- The 
bulhkh trend looks likely to continue if the 
markets' preferred 


lo’s local bond market has mostly stag- 
nated. Brazil's problems have made rais- 
ing capital through local debt Issues 
extremely expensive far companies* which 
must pay interest rates of 25-30 per cent in 
real terms. Analysts say this market is 
likely to remain undeveloped in the short 
term as companies seek ftiywi* through 
equity issues. 

i Stabilisation 


candidate, Mr Pern- For foreign investment banks Sao reforms could also 

Danrlmw knnd D.n Dsnln>a 


ando Henri gue Car- 
doso, wins presiden- 
tial elections this 


Patde has .become a magnet, 
worth ep to $1bn a year 


~ Much of the farinr ^ ppr wHat iny has beep 
due to the opening of the market to for- 
eign institutional In vestors to 199L They 
now account for about 20 per cent of aver- 
age dally trading volume, which has 
soared foam S34m in 1991 to $278m in the 
first half of this year and approached 
$500m in August Acc o rdi n g to Mr Vldigal, 
volume could reach $700m to |900m if eco- 
nomic refor ms continue. 

While equities have grown in impor- 
tance <faft to foreign investment, Sao Pau- 


__ _ boost Sao Paulo’s 

rr» a magnet, futures and oommod- 
m bn a year exchange, which. 

has gro wn to became 
the fifth largest in the world with, a daily 
average of 350,000 contracts, aHhnn gh th fo 
growth Is partly due to Brazil’s economic 
instability. 

“The market’s growth is obviously 
related to companies trying to protect 
themselves a gafa«tf Brasil's inflation,’' says 
Mr Marcos Eug&nio da Silva, a University 
of Sao Paulo economist, referring to the 
fact that 60 per cant of the exchange’s 
volume is In one-day interest rate fixtures. 
But a more stable economy with sustained 


growth would Increase the exchange’s 
business and lead to a lengthening of con- 
tract terms, he says. 

Mr Manuel Pires da Costa, the exchange 
chairman, says fixture development will 
depend on the ending of government 
restrictions on foreign exchange transac- 
tions. which make it difficult to increase 
Knfcs with foreign futures exchanges. 

As Brazil is one of the world's biggest 
exporters of coffee, soya and orange juice, 
Mr da Costa believes there Is potential for 
attracting some of the trading in agricul- 
tural fixtures from exchanges in Chicago. 

But, according to Mr da Silva, such inte- 
gration is “wishful thinking* as it presup- 
poses a stable and convertible currency, 
something Brazil still lacks. 

A traditionally weak currency has. how- 
ever, allowed Brazil's commercial banks to 
make large profits. With inflation eroding 
the d&By value of Brazil's currency, banks 
have been able to invest their clients’ 
money that is held in current accounts, or 
foe values c£ cheques bring cleared, in the 
hi g h- yielding money markets. 

Sao Paulo dominates the country’s bank- 


ing system. Twelve of the top 15 private 
sector banks, measured in terms of depos- 
its, have their head offices there and the 
city's banks hold about half of all deposits 
in Brazil. The future for fixe banking sys- 
tem in a low-inflation environment is 
uncertain, especially for the less efficient 
state-owned banks. However, private sec- 
tor banks will be able to expand on the 
back of increased banking charges and 
long-term consumer credit. Some larger 
state banks, including Sao Paulo's 
Banespa, will be able to rely on their asset 
bases and wide branch network. 

For foreign investment banks Sao Paulo 
has become a magnet After the 1980s debt 
crisis, Brazilian companies have grad ually 
returned to the international debt and 
equities markets and the country finally 
sealed its Brady plan debt deal earlier this 
year. Commissions and fees from compa- 
nies issuing securities abroad, local issues 
and mergers and acquisitions could soon 
total Slim a year, say market analysts. 

Longer term, optimists believe that Sao 
Paulo's role as Brazil's financial power- 
house will be extended with the growth of 
regional integration, particularly the Mer- 
cosul common market due to come into 
force at the beginning of next year. 

“We are likely to see close links between 
Sao Paulo and Buenos Aires, including 
dual listings and the creation of a regional 
financial market,* says Mr Monforte of 
Citibank. 


A shift in the centre of gravity 


Con ti nued from Page I 

of industrial production. Last 
year Sao Paulo produced mare 
than two-thirds of Brazil's L4m 
vehicles but with, fewer work- 
ers than in 1990 when around 

900.000 vehicles were maria 

Meanwhile, General Motors’ 

Brazilian subsidiary is expec- 
ted to build a new plant for 

100.000 vehicles a year outside 
the state, possibly to neigh- 
bouring Mtna« Gerais. The 
company decided not to 
expand its plant in Sao ’Jose 
dos Campos, Sao Paulo, 
because of poor labour rela- 
tions, though some industry 
observers believe the financial 
incentives offered outside Sao 
Paulo were perhaps more' 
important 

Mr Caries Azzoni.au econo- 
mist at the University of Sao' 
Paulo and a former pTawnfag 
official in the state govern- 
ment, says: “Part of the profr' 
lam has been that the state 
government has not been as 
aggressive as others iu^trytag 
to attract companies.” 

However, the state govern- 
ment has been preoccupied 
with ffafln«fa>T problems, which 
have *nnrie it difficult to find 
money to i m prove the state's 


infrastructure, traditionally 
one of Sao Paulo^s ^biggest 
attractions for companies. 
Partnerships whir the priva t e 
sector .are on the agenda but 
have so far made limited “prog- 
ress. Some large projects, such 
as an extension to the city’s 
underground rail, network and 
a. dean-up of the river Tietfi, 
are receiving support from 
multinational 

Mir Azzoni argues that 
improved transport and com- 
munications infrastructure in 
other state# has' aildteed com- 
panies to moire- production out' 
of Sao Faulb, but stiff retain 
access to its consumer market 
"(Companies) wfll conti n u e to 
keep their toad offices in Sao 
Paulo hut open new plants, 
where- ft’s cheaper,* he says. 

Ito more from industry to 
services has fed to Sao ftrulb 
e volvin g towards a “qualitative 
not a quantitative' Impor- 
tance,” says Mr Azzoni. 
Nowhere in Brazil is there 
such aconcentration of univer- 
sities, research centres and 
- high tech companies. About 80 
.per iwit of Brazil's scientific 
and technological research is 
carried out in Sao -Paulo. 
according' 1 to’ Mr- Pedro Paulo 
Branco, director of Seade: ~ 


Tto success of Brazil’s cur- 
rent staWlxsatkm plan would 
give a big boost to Sao. Paulo, 
ac cor di n g to Mr Branco, who 
says that because of its diverse 
economy, good infrastructure 
and well-trained workforce it 
can recover far mere quickly 

than the iwtinnal eCODOmy. 

Others believe stabilisation 
win provide catiy a short-term 

faifngh-ial hm m rr m nri and that . 

Brazil's economic centre of 
gr avity Is inevitably disposing 
to other regions. Similar 
.doubts exist over tto. impor- 
tance of the llercosul free 
trade area for the state. Some 
believe Mercosul wfll mainly 
benefit states to the south of 
Saco Paulo, while others paint 
to the development of a power- 
ful economic axis Halting 
South America’s two biggest 
consumer markets: Sao Panlo 
and Pi'www Aires. 

Whatever happens, Sao 
Paulo will stin remain in the 
miririip of a hugely important 
consumer market and indus- 
trial region, including Rio de 
Janeiro and Minas Gerais to fls 
north and developed states like 
Parana, and Itio Grande do Sul 
to its south. 

.*• : • , i-J. 

Patrick McCurry 


Social conditions may be about to improve, reports Angus Foster 

Cost of growth on the environment 


Sao Paulo city is an til-fitting muddle of 
the developed and developing world. 
While all but the poorest houses have 

alarfr ipi ty and r unning water, than 
| half the city's domestic sewage is 
treated, fafefa: mortality and illlteragy 
‘ are among the lowest in Brazil, but 
i levels of violence air pollution are 
among the highest. While the city's 
population, growth has slowed consid- 
erably, at least lm people still live in 
shanty towns, known as favelos, which 
dot the city’s outskirts. 

This dichotomy hag its roots in Sao 
Panic's rapid growth over the past 50 
years. Until the second world war. the 
city was a provincial centre grown rich 
oh rnffaw profits. As Industrialisation 
gathered para, ft attracted immigrants 
from poorer parts of Brazil, especially 
the northeast Between 1940 and 1970 
the city grew at about 5 per cent a year, 
from a population of \ -fl m to s um. 

Growth started to slow only in the 
1980s, but not before the population tod 
nearly doubled, reaching 9.5m in 1991. 
Industrial suburbs that were once sepa- 
rated from the city to green belts have 
merged into a stogie urban sprawL If 
these suburbs are included, the popula- 
tion: of the greater Sao Panlo m etrqpofi-.'i 
tan area is o ver ifim, making it -the-> 
largest urban centre in South America. 


Sao Paulo’s attraction has always 
been Its economy. Until the togfanmg 
of the 1980s, -industrial employment 
grew steadily and offered even semi- 
skilled rmwiigrarifa the ^Xianro of rela- 
tive prosperity. As Brazil’s economic 
crisis struck in the 1960s, Sao Paulo’s 
informal economy — ranging from 
. armies of street sellers to gambling net- 
works - provided a mishinn a gainst ris- 
ing unemployment. 

Families have continued to arrive in 
the city over the -• 

past 10 years, 

although in much Violence end i 

smaller numbers. linked to til 
Many still regard a dtocmb of 

poorly-paid job with ^ 

a one-room apart- 
ment to Sao Panlo as p nfar a Kte to stay- 
ing in Brazil’ s rural areas, to the city, 
they have access to better services and 
opportunities for their children. 

Sao Paulo's rapid growth extracted a 
very high price from the city's environ- 
ment Urban growth was so rapid it 
overlooked the desirability of keeping 
“huffier” areas undeveloped to improve 
leisure options and air quality- Extreme 
reliance an automobiles means air qual- 
ity is usually poor. The city’s main 
river, the Tiete has become overbur- 
dened. Every day, it has to digest mere 


Violence and other crime are 
linked to the continuing 
process of tvbanlsation 


than LOGO tnnnt-c: of organic waste anil 
about three tonnes of untreated inor- 
ganic waste, including chemicals and 
heavy metals; however, a state govern- 
ment clean-up is under way. 

There has also been a heavy social 
cost The need to accelerate govern- 
ment gpgndinp on infrastructure ftr»H 
education has left other sectors under- 
funded. In the SOUttom wmniripftlity of 
Diadema, which grew rapidly from the 
1960s because it is close to Sao Paulo's 

car manufacturers, 

„ health centres are 

her crime ere only now being 
continuing installed. 

rbanlsation trans - 

port system has 

■wrararawrai also foifarf to keep 
pace Despite the dty’s sfa*. its under- 
ground railway system is still restricted 
to three linen to satpiKte cities aro und 
Sao Paulo, workers have to rely on 
buses and poor traffic conditions. 
Father Antonio Carlos Frizzo, of Gua- 
rulhos, near Sao Paulo's international 
airport, says that bis parishioners 
spend three hours a day on buses get- 
ting to and from the city. 

The heavy strains imposed by such 
conditions are one reason for the 
growth of radical protestant churches. 
Social strains have also led to growing 


violence. In some poorer suburban 
regions, the murder rate is 90 per 10,000 
inhabitants. However, there are areas of 
low violence, mainly in the centre. The 
city's overall murder rate is only 
slightly higher than New York’s. 

Col Hermes Bittancourt Cruz, of the 
Sao Paulo police, links violence and 
other crime to the continuing process of 
urbanisation, poor education and (me of 
the world's highest income disparities. 
“Violence is a perverse result of disor- 
ganised development,* to says. 

Mr Paulo S&gio Pinheiro, of the cen- 
tre for the study of violence at the Uni- 
versity of Sao Paulo, complains of a 
le ek of resources uMiis in the judi- 
cial and police systems, to Sao Paulo 
there is one judge per 20,000 people, 
compared to one per 5,000 in Europe. 

Despite these challenges, Sao Paulo’s 
rapid fall in population growth will 
allow better planning of infrastructure 
and services in the years aht>a rf 

Along with the rest of Brazil, Sao 
Paulo is also developing some institu- 
tions that are common to industrialised 
emnomiM — from health a*id education 
networks in the shanty towns to envi- 
ronmental pressure groups. “We have 
grave institutional problems, hut our 
civil society has changed tremendously 
to the last 30 years,” Mr Pinheiro says. 






I FIT. LA 


1994 


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FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


J apan's army of subcontractors, 
the hidden muscle power of Its 
industrial economy, are learn- 
ing the hard way that they 
must become more than mare 
foot soldiers to survive. 

Their famed ability to cut costs 
and Increase efficiency is coming 
under unprecedented strain as sub- 
contractors’ powerful customers 
demand another round of price 
cuts, for a record fourth year 
running. 

Just as Japan seems to be on the 
brink of coming out of recession, 
subcontractors are being asked to 
shoulder their share - some com- 
plain even more than their 
share - of the cost disadvantage 
inflicted by another rise in the yen’s 
value. 

A look at the contrasting experi- 
ences of three subcontractors 
around Osaka, the heartland of 
Japan's electronics industry, shows 
that the pressure on costs has 
started to disturb - but not destroy 
- the formerly intimate bonds 
between parent companies and 
their multiple domestic suppliers. 

It also indicates that suppliers 
able to follow their clients to 
cheaper locations overseas, espe- 
cially in the rest of Asia, are most 
likely to prosper. 

Takizawa Precision Gear, a pro- 
ducer of machine-tool gears with 14 
staff, has taken a traditionally Japa- 
nese approach to a problem, by 
stepping up the search for internal 
self-improvement. 

Its neighbour, Meisei Metal Indus- 
tries, a 140-person mak er of metal 
dies for the car industry, has joined 
forces with other subcontractors to 
seek economies of scale. Showa 
Plastics, a producer of plastic cas- 
ings with 2.200 employees, has 
behaved like a Japanese multina- 
tional. it has closed more than half 
its domestic production and relo- 
cated next to its Japanese buyers' 
new overseas plants. 

The trio hold very different ranks 
in Japan's feudal-style industrial 
structure, but they shar e one thing : 
the realisation that near total 
dependence on a single large client 
is not the guarantee of survival it 
used to be for most of Japan's post- 
1950s economic expansion. 

Local bankruptcy figures are a 
grim illustration. 

At the start of Japan's recession 
in 1991, bankruptcies in Osaka grew 
faster than the n umb er of new busi- 
nesses for the first time. The sad 
trend has stayed that way, says 
Moriyuki Tsuda. director of indus- 
trial research at Osaka prefecture. 

“Customers are less loyal than in 
old times," says Kiyoshi Takizawa, 
president of Takizawa Precision 
Gear. 

“Sooner or later 20 per cent or 30 
per cent of companies in our field 
will go out of business,” says Yozo 
Ueda, vice-president of Meisei Metal 
Industries. 


MANAGEMENT: THE GROWING BUSINESS 


William Dawkins looks at how Japan's subcontractors 
are coping with customer demands and a rising yen 

Breaking with 
tradition 

Osaka’s struggling subcontractors 

Growth (%) 
to 


0 I I I I I I ! I — 

1966-69 60-72 72-73 75-78 78-81 81-80 80-81 91-84 

Soutor Osaka PmfocUsl Gownxw* buKUba tar Industrial DmtopmM 




Toshiba, Hitachi and Sony are 
more willing to buy from me in 
Singapore than in Tokyo. They 
won't even see me in Tokyo," says 
Kenzo Nakagawa, president of 
Showa Plastics. 

Takizawa is at the bottom of a 
so-called “co-prosperity” pyramid, 
headed by Osaka-based Matsushita, 
Japan’s largest consumer electron- 
ics group. The upper echelons 
include about 500 prime contractors 
- closely bound to Matsushita - 
while Takizawa is among the more 
than 6,000 smaller suppliers which 
will also sell to several other large 
companies. 

The parallel with the feudal sys- 
tem becomes visible on visiting 
Takizawa’s plant, part of an enor- 
mous industrial village and consist- 
ing of a dense jumble of factories, 
rice fields and homes on the out- 
skirts of Osaka. 

Takizawa, whose father founded 
the business 44 years ago. devotes 
40 per cent of annual sales to his 
top three customers. This is a big 
enough exposure to make it impos- 
sible for the company to resist their 
demands for price cuts of between 
5 per cent and 15 per cent every 
year for the past four years. 

Sales have shrunk from Y300m 
(El. 95m) to Y200m over the same 


period, perilously close to Takiza- 
wa's YI80m break-even point 

Instead of sacking his tiny work- 
force, Takizawa has instead 
increased spending on training, bor- 
rowed Y50m to reequip with Swiss 
machine tools and carried out an 
engineering cost analysis. 

His strategy of investing through 
a recession was typical of Japanese 
industry in the 1980s, but was 
widely abandoned In the recent 


Meisei Metal has 
had to accept price 
cuts of up to 30 per 
cent this year 


downturn. 

Takizawa justifies sticking to the 
old invest-or-die approach on the 
grounds that the company has few 
foreign competitors, operating with 
the advantage of cheaper local cur- 
rencies. This allows him to market 
more on quality than on price. 

Takizawa admits, however, there 
is no thing they can do if the Japa- 
nese market continues to shrink. 
His clients, he says, hold his busi- 
ness hostage. “We only supply a 
small part of a big machine," says 


Takizawa. 

Meisei Metal is slightly higher up 
the feudal ladder than Takizawa, 
yet it is even more vulnerable 
because its top three buyers 
account for 85 per cent of sales. 

It has had to accept price cuts of 
up to 30 per cent this year, and as a 
result it made a loss of YlOOm in 
the first six months of the year - its 
first of the recession. The loss 
would have been larger if Meisei 
had not turned away demands for 
50 per cent price cuts from some 
buyers, says Ueda. 

Like Takizawa, Meisei has few 
direct foreign competitors. But 
given the domestic overcapacity in 
Japanese die-making, Meisei has 
had to find a way of malting itself 
more attractive than Japanese 
rivals. “We believe co-operative 
manufacturing is the key," says 
Ueda. 

He is referring to the formation 
two years ago of a joint company by 
Meisei and three other subcontrac- 
tors to service the needs of a single 
car company, which Ueda prefers 
not to name. 

The subcontracting group, called 
Must - after the initial letters of its 
members - pools design, marketing 
and finance to save costs. 

It also saves costs for the cus- 


tomer by reducing the number of 
suppliers the buyer has to handle. 
Several of Meisd’s competitors have 
adopted the same strategy and the 
company may launch Must-type 
groups for other buyers. 

Showa Plastics, while much big- 
ger than Meisei and Takizawa, is 
more sensitive to foreign competi- 
tion because its products go 
straight to assembly plants, where 
its consumer electronics industry 
patrons have led the way in estab- 
lishing low-cost operations in 
Europe and eastern Asia. 

Showa, another member of Mat- 
sushita's co-prosperity pyramid, has 
shifted 60 per cent of its Y20bn turn- 
over out of Japan, mainly into 
neighbouring Asian countries, since 
the early 1980s. 

It has been helped by the natural 
preference of its Japanese custom- 
ers' overseas subsidiaries to take a 
Japanese supplier, says Nakagawa, 
who Is a keen advocate of the bor- 
derless economy propounded by his 
fellow Osaka resident Kenichi 
Ohmae. Where possible, he has used 
local funding and local staff, so that 
nearly half of Showa’s employees 
are now Chinese speakers. 

In the past five years, Showa has 
dosed four of its eight Japanese 
plants and reduced its domestic 
workforce from 550 to 150. 

This Is unusually aggressive 
restructuring by the standards of 
Showa’s Japanese competitors, who 
pride themselves on not cutting 
jobs. “We were lucky, because 60 
per cent of our Japanese workers 
were part-time, so we just didn't 
renew their contracts. They easily 
transferred to other jobs, mostly on 
higher pay. But we can’t restruc- 
ture on that scale again,” says Nak- 
agawa. 

Showa’s rapid foreign expansion 
has helped it to broaden its client 
base, so that the top three now 
account for 40 per cent of sales, 
from 75 per cent in the mid-1980s. 
But the most Important benefit of 
moving production out of Japan is, 
as its customers have found, to pro- 
tect Showa from the yen’s inexora- 
ble rise, the main factor in the 
price pressure on Japan's subcon- 
tractors. 

Showa’s prices have fallen by 30 
per cent during the past four years. 
Overall unit costs have also fallen, 
helped fay the decline in foreign cur- 
rencies against the yen, far enough 
to allow Showa to increase its prof- 
its throughout the downturn. 

Many of Japan's subcontractors 
followed their big clients into the 
US and Europe in the 1980s - 
indeed, Showa has a plant in the 
UK. 

A second wave of suppliers is now 
moving into Asia, leaving their 
domestic counterparts to struggle 
for market share in a Japanese 
economy that is unlikely to return 
to the heady growth rates of the 
1980s in this decade. 


When big is 
seen as better 

Richard Gouriay on how Trinity 
Capital found a way to grow 


M ore consolidation within 
the UK venture capital 
industry will be 

anno unced today. Trinity Capital, 
founded 10 years ago by John 
Walker and Ron Sheldon with 
a brief to invest in high- 
technology growth companies, is 
to become part of Advent 

Walker will take over as 
manag in g director of Advent 
International's European 
operations, replacing Doug Brown 
who becomes chairman of Advent 
International Europe and 
worldwide chief investment 
officer. 

The two groups say they will be 
combining Advent’s European 
strength in speciality chemicals, 
media companies, information 
technology and communications 
with Trinity’s expertise in the 
healthcare and environmental 
sectors. 

But the fundamental reason is 
that Trinity would not have been 
able to raise a new fond to invest 
at the size it desired in growth 
companies. By finding a home 
within Advent International, 
another specialist lender, which 
has $l.4bn (£909m) under 
management worldwide and has 
just raised $315m to invest in 
western Europe, that is no longer 
an obstacle. 

"This allows us to do the kind of 
Investing that we could not do 
before," says Walker. 

Trinity had wanted to move 
towards investing In companies at 
a later stage of their development, 
when they would generally 
already be making profits »nd 
require larger sums of 
development capital. 

“Our experience was telling 
us we needed larger deals," 

Walker says. He needed to raise a 
£ 100 m fund and would not have 
been able to do that given the 
returns on Trinity’s existing 
funds. 

Brown says the merger gives 
Advent two sectors in Europe 
where it has not been very active 
and also more British directors. 
“We are redeploying Trinity's 
skills into that sector of the 
market that will be dominated by 
larger deals,” he says. 

“Trinity was really relegated to 
the smaller ranks by the size of 


the funds they were managing;" 

The market has known for some 
time that Trinity has been 
considering a merger. Other 
groups talking to Trinity included 
Rothschild Ventures, industry 
sources say. 

The financial structure of the 
transaction is interesting. When 
Mercury Asset Management 
bought Grosvenor Ventures in 
February in one of the most 
significant consolidations in the 
industry, it paid £4£m. 

Walker says no money is 
changing hands In Trinity’s 
merger with Advent International; 
Trinity's partners will retain 
rights to any can-led interest in its 
four fonds which have Invested 
£75m. “This is an investment in 
the foture and not in the past." he 
says. 

The consolidation Is more proof 
that the ranks of early-stage 
development capital financiers are 
thinning out 

Walker says Trinity's returns 
have been “on the border line". 
While its venture capital returns 
would be competitive with other 
early-stage investors, this return 
does not stack up against the 
returns achieved by funds 
concentrating on management 
buy-outs, he says. 

Trinity and Advent Inter- 
national have co-operated on deals 
over seven years, and say they 
share a common style in trying to 
develop growing businesses. 

Five of Trinity’s active 
executives will join Advent, 
Including Sheldon. Of the 
other three, two will remain 
with responsibility for a Si- 
backed innovation fond and will 
be found a home by 31, according 
to Walker. 

The other partner, Philip 
PercivaL who concentrates on FT 
and therefore overlaps with an 
existing area of Advent expertise 
in Europe, will be “pursuing other 
interests”, Trinity says. 

As Walker moves forward with 
a new partner and more power to 
underwrite deals than he has 
had before, he has a word of 
advice for other smaller fund 
managers. 

“ft is my view that those who 
sort their future out now have 
better options than those who run 
out of money," he says. 


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Rraiupjiflfiw 
mmxtaijiy hwlm 

Trnnia CdBJkl", » Hires . 

Mkhd-A. Grab a. Enwom c CoueeHuc 
PO. Bot J-M.ai-l820Muoonn 1 
Pboof Jt’INW JS «. Fu 4U1NM SO a 



From US$250 

Various Jurisdictions 
Information/immeiiiatc service: 


INTERNATIONAL COMPANY! 


SERVICES (UK) LIMITED 

Stondbroak House. 2 - 5 Old 8ond 
Street, LONDON. WIX 3TB 

let 071 493 4244 
Fax: 071 491 0605 


Atlanta-based air 
condidoning/water 
treatment chemical 
manufacturer 

with more than 500 distribution 
outlets throughout Southeast U.S. 
interested in ltcencuig/marfccting 
arrangement in the USA for newly 
developed products related to 
indoor air quality field. 

Write to: Box D3373. Financial Tinea 
One StMlbvnuk Bridge, London SEI 9HL 


Singer A Friodburdar 
Factors Limited 


Tb i to w l ■ agum; Jordan* 


tndtpndaapvm crefmf hMfca 
Cud LWMMhtl ■*** bi k A bm I i w i w . 


STagtrA FriatUtonttr Foam 
mm Damn CammefAgt 


EC2M4HH 

TckpkMC 07] «1| MO* 

P W^mur eriMi im 


DonjiMr knlim and equity capital? 

r'VCR'jRtti Boswob AqjjFbftavc ok opfal 
expertise u imw.-ftt 0491 579999 


COMMERCIAL FINANCE Venture Captoi 
avafctto torn £250000 upwards. SensBte 
Ratos. SamriMe Foes. Broker anquMu 
welcome. Anglo American ventms Ltd. 
TeL- (0924) 201385. File (0824) 201377 

NEW GARDEN EQUIPMENT PRODUCT 
PtrtontechOoiHgner seeks Ueencee/ 
Mmrfaatirer. wtie to bar KK 31 , Fhandal 
TVnea, One Soarwab Bndg& London SEI SH. 


WHAT WILL BE PREVENTING YOUR COMPANY'S 
GROWTH IN THE YEARS AHEAD? 

WILL YOU NEED EVER INCREASING AMOUNTS OF WORKING CAPITAL? 
WILL YOUR BANK BE PROVIDING SATISFACTORY SUPPORT? 
Consider ibo foOowing- 

- WooW a source of fending geared to foot turnover be hdpfnl? 

- Woold you like to ded wnb profession*!, cunmKtcally orientated fimneko? 

- Would you like a rep notch pet&oul tervke that provides the euentrib hi woridog capital 
fa r growth? 

• Would you consider an alterative to bank overdraft or equity capital? 

Cnurewa j Invoice Pt won n Mng Company Limited 
vedaUor in providing cashflow Usance via confidential invoice tBrnmnitog 
For expert advice contact: 

Manchester Offlce: Brian Smaller or Scott Bradley Tel: Ml 832 4442 Fax; 081 832 4058 
London Oflkn Joe VentagTefc 871 4M 2526 Fox: 071 491 2058 


CHINA / SOUTHEAST ASIA 

A dynamic and versatile Hong Kong booed Western Organisation 
operating In China and Southeast Asia for over 20 years, owned and 
operated by Europeans and Americans, is looking to expand its activities 
and Invites inquiries from serious parties wishing to develop 
their presence in this region. 

This is an excellent opportunity for those wishing to moke use of existing 
services and facilities out of a first doss location without having to bear the 
high costs associated with such a venture. 

Principals only, please send foil details and requirements to 
Hong Kong, Pax: {+8521 730-0039 or 
write to Bax B3398, Financial Times, 

One Southwark Bridge, London SEI 9HL 
All inquiries will be held in strictest confidence. 


DIRECTORS & MANAGERS 

The Kbfcwood regbicr b ihc unique 
pobliarrati produced soieiy to promote *e 
tUUs A Ulema of mature executives 

seeking employment. To be included in Ac 
legmer yon must be over 45, bavc been 
earning CJOk plus. Tbe legatee is cbvnlsMd 
IV Icadfag rcanUmcni specialists A id heads 
of personnel in may of die largest 
companies in the UK. 

Details oo bow to advertise from Kbtorood 
Management. Q iim pi t nook, Hopton 
Waters. KKMcnnjretcr DY1 4 Q£P 
Fax 0584 39 1 264 


Capital Gains 

Private company seeks to acquire 
companies with unrealised capital 
gains up to COM. These may have 
arisen through slock exchange 
trading although other opportunities 
would be considered. 

Please miu wAdaaOsm: 

Box B3366, Financial Tima, One 
Southwark Bridge, London SE19HL 


PtoAt line Management Analyst. 
Strong iwennlioflal network with finks 
Into Europe. Scandinavia, Russia and 
U.SA Projects with acadcmic/bnsineu 
centres of excellence. Specialist 
experience developing senior 
management performance ■ 
organisational changc/bchavknir. 
Global Quality strategies. 
Seeking farther medium term 
high level assignments. 

Writs to Box B3390, Financial Times, 
One Southwark Bridge. London SEE QHL 


TURN AROUND TEAM 

Bifg^nccriAg.!rnancQiai^ptrxiadkri 
management dails available. Over IS 
yoad troubfc-dtootmg experience. 
Creative approaches to all problems. 
Pfease apply In confidence d 

Box No: B3392, Fimnrpl Times, 

One Souiliwafk Bridge. London SEI 9HL 
or Tefcpftooe 07 1 -485 73S6 


WILY OLD FOX 

Would some extra cunning help your 
current marketing or your planning 
for the future? 
fm 53, Oxford linguist, 
ta-UitlVevei nutatm and 
Snatcfd Croup CEO. 
UKfUS/Bnrsscb experience. 

Up to 6 ener g etic days/mootb uvaUabte to 
help you keep ahead of the pack. 
Please write to Box No: B1436 Rsudri UnoL 
One Sonlhwt Bridge. LundoQ SEI 9HL 


NON-EXECUTIVE 

HEAVY 

Efonttcr Chief Executive of major 
advertising agency offers grey hate* and 
wisdom, business development drills, 
Creative resources and wide 
management and mariceting experience 
ta COmptAies needing weight without 
overhead. From a day a month. 
Write to Box B2I45, Financial Tiroes. 

One Southwark Bridge, 

London SEI 9ML 


FIRE PROTECTION 

Well known structural steel /lie ctadding 

product ( Reg TM) available to 

manufacturer of similar product either 
outright or aadu licence. Owner to 
retain right of preferential supply. 
Principals only write to Box B3367. 
Financial Times, One Sondwart Bridge, 
London SEI 9HL 


CHANNEL ISLANDS 

OfEsh<>re Company Formation 
and Administration. Abo Liberia. 
Panama & B VI etc Total offshore 

fodllties and services. 

Far details and i p po in na ea t write 
Cray Tnuk LuL, Belmont Hook. 

2-6 Bdmdrtt Rd, St HeJier, ftracy, CL 
Tet 78774. Fu 0S3J 35401 
71x4112227 COFORM C 


MILAN. Engfoh quaflBaa peatosttrst, Italian 
apoakkig. Chy and banking oaporianca. 
Undertakes business agency and 
roprosoneaficn. write to Box No, 83432. 
Financial Umae. One Southwark Bridge, 
UnOon SEI 8HL 


Save on 
International 
Phone Calls! 


USA only 24p per min 
Australia 40p per mbi 

No VAT 

Aak about our low rates 
to other countries. 

G^tejlbaclf 


Can USA 206-284-8600 
Fax USA 206-282-6666 


COMPANY DIRECTORS 

Need Company vehicles? 
Difficult to arrange finance? 
New start-up business? 
Temporary employees? 

WE CAN HELP 
Howell Vehicle Contracts 
(0903)820920 


BUSINESSES 

WANTED 


LIQUIDATIONS & 
RECEIVERS H IPS 

THE PAGE 1 REPORT 

Tbe No. L ikdex. vnOkMe at cveiy toapuy 
■bu hM foae tau DqakhriwUreaetweriip 
BVEK Y week > ALL WINDING UP 
PETITIONS + doom of AUCTIONS A 
BUSINESSES FOR SALE. Tbc promkrc 
Rpon ol IT* kind, If you ire leriart about 
dealing direct wUh B quht Mo w rad icocirati 


THE PACK I REPORT 
ftu" Le« llan £2 per »cr* 

For Qrfaalpdoa oeadi: 

TdiitwranuK twrenayruss 


MEDICAL BUSINESS 
WANTED 

We are an established 
company In this field, looking 
for a company up to £5m. 
turnover, selling medical 
products to hospitals. 

If you are looking to sell or 
merge with a privately owned 
business In this area, 
please call or fax. in confidence 
TeL 0923 239791 
Fax: 0923 230212 
Ref: RB 


r YOUR OFFICE IN ^ 
GERMANY - DUSSELDORF - 
Fufy equfppad luxury offices and 
conference rooms to rent per hour, 
day, week, month or year. Telephone 
including private line. fex. tsfex, 
W emakmal pro faaato i ia i atari at your 
dsposal InducRng translation. 
Corporate dorntzl lor Germany and 
Europe. Prestige roaring address! 
OFFICE + SERVICE CENTER 
MferStrBs 74 • CW 021 1 DOseefclorf 
VTeL 021 1*38 778 • Fax 38 77-100 J 


INTERNATIONAL UK 
BASED ENGINEERING 
PLC seeks to acquire 
aerospace defence companies 
or product lines with 
turnover of £l-10ra 

Principals please reply to 
Box B3374, Financial Times, 
Oae Southwark Bridge, 
London SEI 9HL 


CALL USA 

ONLY 17p/min 

First 30 mins FREE 
Dial Int. Telecom 
Tel: 081 490 5014 
Fax: 081 568 2830 


Pubiidy traded U-S. laser and 
electronic equipment mfgr. will 
purchase electronic product 
manufacturer in UJL {l to S million 
pounds sales]. Will retain 
management ««i distribution outlets 
to mftr. and sell our products, if 
interested contact: TeL- 216442-2288 
or Fax: 2 16-W W92J USA. 


CONFERENCES 


viu: voi iMi-Ki srt n i.x i»oix<: iu sixiiss ix 
Rl'SSIA AND I ANT! KX CI UDI'i: ? 


If you nre currently emgnaoJ In business activities with Rxisahi. the 
uthor newly liHJepemienr suites of the forma: Soviet Union und 
elsewhere In Bontem Europe - or (ire considering the possibility - 
you will tram tu rulk m us. 

We ore the mvonkten of the Intern nllonnl Business Forum raking 
pluce towards the end of September in Oxford und London, (her 
250 com pan lea from the former Soviet Union und Centra) and 
Eastern Europe will be attending the Forum, 

Amongst the Delegates attending from these companies are the 
emerging business leaders from Russia und Kastcrn t&irofM. 
managing succnaful enterprises, many on « pur with Chute In the 
United Kingdom. 

If you do not want to miss the opportunity to establish or further 
your links In these emerging markets, do not rolas this occasion. 

Wo are arranging meetings between Russian nml liuswm European 
Enterprises and relevant Western counterparts In Oxford on 
September 2uth and 2lsL 26th nnd 27th. Transportation ami 
Interpreters will be be provided and there urc no ousts Involved. 

ir you wish to explore a whole new business world, please contact 
Akrt Hall, imemntlonut DtuSnesii Ferum, 9B- IOU Crmt North Road. 
London N2 UNI- TWephona: IIH I 465 2152 Fine 081 )65 21il 



\ . * % v * 
•»"V \ ’ *’ % 

‘tSk- ? 

: ,V' * 

♦%„ - 

.S' 

* *+ *- •, z 

j ':*V 


Lynester Sign 
& Display Ltd 

(In Administrative Receivership) 
The Joint Administmlive Receivers offer 
for sale the business and assets of 
Lynester Sign & Display Limited. The 
company specialises in the manufacture 
of Sign # Display Products as follows:- 
■ Illuminated and Non 1/iuminaied 
Fascia Signs 
Window Signs 

‘ Poles Apart* Directional Sign System 
Menu Boxes and Security Notice Boards 
Turnover of approx. L75QJOQO p.a. 
m Freehold Premises 
m Manufacturing plant 
For further information contact Mr. A. C. Pearce 
of Ernst & Young PO Box No I. 3 Colmom Row. 
Birmingham BJ 2DB. Telephone: (021) 626 6262. 
Facsimile: 1021) 626 6305. 

sU Ernst&Young 

iothurtinl Uy Ibe tnt/mte of Onartrml icautnuapi hr tnSuMl 
ami HufcM re tuny as kncMstnif Hasten. 


* 

m 


OFFICE EQUIPMENT 


OFFICE FURNITURE 


We have - direct from the manufacturer - new high quality 
executive and system ranges - conference and receptions. 
Large choice ol veneora, metamine and/or laminate finishes 


with discount of up to 40% from R.R.P.! 


London Showroom for viewing: 

Ariel House, 76 Charlotte Street, London W1 
Tel: 0374 741439 

Full camcad and planning services. 


LINEABURO LTD Tel: 0992 503313 


CONTRACTS & TENDERS 


THE MINISTRY OF 
ENERGY AND MINES OF ECUADOR 
& 

PETROECUADOR 

The Ministry of Energy and Minas of the Republic of Ecuador 

an V OT * i * n conoanles whldi 

rapable of expiring and producing hydrocarbons, to roaster In o 
,n ** intemation^ tSJim 
productKHi and additional exploration of producing fteldsta Eolad 

Interested Mmpanles can register in person or by Fax at 
Margiral Fields Contracting Unit located at: Santa Prlsca 221 
Manuel Urrea, 4th Floor. Tel: (593-2) 584.439^STS m 
582^ 1 1 . The deadline for registration is September 30, 1994, 

Companies that are registered can make an aruninfma n t m 
date on th. Md. u, be tended 








17 





as >'* ' 

£„S 


FINANCIAL TOVIBS TUESDAY SEPTEMBER 13 1994 

Andrew Deriington hears why 
* research science is different in the 
private and public sectors 


TECHNOLOGY 


price 


B usiness and. anaflgmfo have 
drawn closer in recant 
years in the UK, hot cul- 
tural differences can stm 
stand in the way of a fruitful rela- 
tionship. 

Oxford University's Department 
of Experimental Psychology, for 
example, has carpet fflgg that need 
to be stock back into piaee whereas 
research facilities in the private 
drugs sector are sparkling - Gtaxo’s 
new {670m complex at Stevenage, 
for .Instance, gives visitors over- 
shoes to protect the marble floors. 

Such differences are often more to 
do with, funding than with culture, 
but represent one facet of a more 
profound gulf between academic 
and industrial research. The two 
communities “operate in entirely 
different ways”, says Sue Iversen, 

1 ty head of the Oxford department. 

Iversen knows both disciplines 
from the inside. She was an aca- 
demic at Cambridge University 
until ll years ago, when she moved 
to the drag company Merck, Sharp 
& Dohme. At the time, says Iversen, 
her research was “on an ’ all-time 
high”, bat she was drawn by “the 
challenge of having huge resources 
to design a laboratory from the ; 
groundup". . 

Although “vary satisfied with my 
time at Merck", Iversen frit ready 

for a new challerngB and ramp back 

to academia after 10 years because 
“the only job I bad not done was to 
run a major university depart- 
ment”. 

Now at Oxford, Iversen carries 
out research on the brain's chant _ 
cal messenger systems and their 
relationship to anxiety, schizophre- 
nia, and Parkinson's disease — an . 
area of intense activity in both sec- 
tors. Academics want to understand 
how these fundamental mecha- 
nisms of the brain control our 
behaviour. Drag companies want to . 

develop t reatment* fnr Hw <M«hHn p 

ilinpaspa that result from their mal- 
function. 

It Is foe difference between these 
two goals, says Iversen, that .leads 
academics and industrialists to 
operate differently. 


In the universities, neuroscien- 
tists set their own research agen- 
das. Independence » ^(mrip r 
freedom are not only fimrfamgnfai 
but are taken fbrgranted. 

But academics feel they pay 
dearly for their freedom. They can 
decide what research they want to 
do, hut there is no guarantee it win 
be funded. Less than a quarter of 
the best projects are successful in 
the national competition for 
research funds. A consequence of 
this can be that second-rate aca- 
demics succeed by being good at 
mar keting their ^W 11 

In drug companies, wasting 
expensively trained human capital 
on under-resourced research pro- 
jects would ' be. unthinkable. 
Research priorities are set . by the 
company's needs ahdgoals. 

This tradeoff between resources 
and freedom figured heavily in Ircr- 
sen’s decision to move to industry. 
The ffhawgB in pm pHo<ric ftr tm tryin g 
tO tfap Yr rarn to seeking 

remedies for its malfunctions also 



> of two cuttw— : they oporto in oomptotafr UU fc m n t wyo. « y» Sua tenon 


Merck, Shop & Dohme focused on 
the management of research. “I 
wasn't attracted by going in with a 
big stick and bossing 20 scientists 
around, instead of leaving my 
research students' to do brilliant 
things ;an. their own.” 

. In £ai eti managing research 
'had more to do with distributing 
carrots than -wielding sticks. The 
rnoqt - difficult part of foe job was to 
.maintain the motivation of team 


‘Universities must be the place 
where "blue-skies” research is done- . 
We' must jealously guard resources 
for long-shots, and to help 
newcomers get started* 


excited ho*, as she had been work- 
ing in areas related to 'mental and 
neurological nbiraspR 

The meat exciting aspect of Iver- 
son's time in industry sprang from 
the way that drug foscovery brings 
together scientists f r om different 
disciplines - The opportunity to col- 
laborate with chemtete on drug 
design, using computers to view the 
shapes of drug molecules and to 
investigate how motemlar structure 
could predict biological activity, 
was . something she. had never 
dreamed o£ This cooperation with 
chemists streamlined - the 
hit-and-miss process of selecting 
chemicals to be tested as potential 
drugs; says lversen. 

Her worries before moving to 


members, “especially those whose 
c on trib uti on wasn't by being bril- 
liant”. . 

Iversen says one advantage of 
wotidhg in the private sector is the 
ability to motivate with bonuses. 
She believes performance-related 
pay is an important tool for main- 
taining motivation in the longterm. 
But in the short term, or when all 
the money available for bonuses 
has been spent, “the only way is to 
give people an appreciation of how 
mnrb their work contributes to foe 
project". 

Iversen says her time in the pri- 
vate sector was invaluable for her 
Oxford job. Persuading indepen- 
dent-minded academics to adopt a 
team approach makes administra- 


tion much easier. But, she says, 
“the most important aspect of the 
hesn} of depar tmen t's rol e Is in iden- 
tifying pntfltiHfli high friers awd pro- 
tecting than from being overbur- 
dened by teaching and trivial 
ndmtnist rfltivA duties.” 

Iversen ’s ability to influence 
research funding fasHe her depart- 
ment is mfarimaL Her staff must 
compete for outside funds. All she 
can do is encourage tiwm to 
proposals, and try to maintain 
morale. 

She has strong views on how 
meagre funds should be targeted - 
she sits bn two national science 
funding committees, the council of 
the Biotechnology and Biological 
Research Council and the 
Wellcome Trust’s Neuroscience 
Committee. 

“Universities most be foe place 
where ‘blue-skies’ research is done,” 
she says. “We must jealously guard 
resources for lang-ehots, and to help 
newcomers get started. 

The most important thing is to 
make mare use of outcome mea- 
sures in allocating research funds”, 
she adds. 

Her other main point' Is that 
fluids should be concentrated: “You 
have to put the money in centres 
and individuals of excellence.” By 
concentrating funds in *hic way the 
UK can hope to end up with a small 
number of world-class academic 
research cadres. “Modem science 
will make it increasingly difficult 
for one man .and his dog to operate 
in isolation," says Iversen. 


Bird’s eye view 
of the sun 

Clive Cookson on today's high point for Ulysses 


u 


lyases, foe first spacecraft 
to break free from the 


wDl reach the of a Stmkm 

voyage today when it flies above 
the sooth pdle of the Snn. 

Tbe *750m (£4&0m) Ulysses 
mission Is a Joint project of foe US 
and European space agendes, 
dedicated to exploring the 
hdiospha-e. This region contains 
mainly tons (charged atoms) and 
electrons emanating front the Sun 
- a bubble blown inside the 
extremely thin cold gas of 
interstellar space by the Sun's hot 
breath, the solar wind. It 
encompasses the whole solar 
system, except for the planets and 
their atmospheres. 

Because foe planets were formed 
from a disc of debris around the 
newborn Stm about 5bn years ago, 
they all lie within one plane, 
known as the ecliptic, which is 
fflM only slightly from the Sim’s 
Bp ri nrfall plane. 

To explore the solar wind and 
magnetic field, free of the 
turbulence and other 

p a used Ky 

planets, John Simpson of the 
University of Chicago proposed in 
1659 sending a space probe over 
the Son's poles. Hie idea became 
technically feasible in the 1970s, 
and in 1977 the European SP>ce 
Agency agreed to collaborate with 
Nasaon the Ulysses project 

No rocket is strong enough on 
its own to send a spacecraft out of 
the ecliptic, because it has to 
caned Earth’s motion around the 
Stm of 30 km/sec and traild up 
speed in a new direction. But 
Ulysses’ designers realised that 
they cpplfl bss th e gravit a tional 
pull of foe giant planet Jupiter to 
propel their cardzed probe into a 
new plane, tike a slingshot (see 
di a g ra m). 

All went well from 1977 until 
1980, when the project began an 
odyssey of setbacks and delays, 
caused mainly by technical and 
ftmmrfai difficulties at Nasa. 
Ulysses was eventually launched 
on a Space Shuttle in October 
1990, seven and a half years after 
the original target date. 

Once in space, Ulysses 
p erf ormed perfectly. Project 
scientists took advantage of its 
swing past Jupiter in February 
1992 to make the first detailed 


survey of foe gigantic system of 

electrical currents, particles and 
magnetic fields surrounding the 
planet 

On route to the Sun’s south 
pole, the nine scientific 
instruments on Ulysses have 
already made important 
discoveries about the heliosphere: 
shock waves in the solar wind; 
electromagnetic waves with a very 
long period (more than 10 hours); 
regular burets of energetic 
particles from the Sun; enormous 
clouds of ionised gas; and 
unexpected patterns of cosmic 
radiation from elsewhere in foe 
galaxy. The investigators are still 
working out the significance of 
these observations. 

“This is our first ever ‘bird’s eye 
view 1 of the Snn’s magnetic 
poles,” says Roger Bonnet, Esa’s 
science director. “This new 
perspective will cast some light on 
the origins of the solar wind and 
is going to improve our models of 
the solar interior. 

“It may also enable ns to 
anticipate better the variations of 
solar activity and forecast their 
effect on Earth,” he adds. For 
example, Ulysses may give some 
clues about the impact of the 
11-year sunspot cycle on 
terrestrial climate. 

Although tiie mission has taken 


so long to gestate and execute, 
some old-timers are still involved. 
Willis Meeks. Nasa’s Ulysses 
project manager, has been 
working on It for 16 years. And 
Simpson, the “father of Ulysses”, 
is In charge of the largest of the 
nine experiments, which looks at 
the behaviour of cosmic rays in 
the solar wind. "I have had plenty 
of opportunities to Ry experiments 

on other missions,” he says. “But 
Ulysses remains unique, as the 
first and only foreseeable mission 
to the polar regions of the Sun’s 
heliosphere.” 

The spacecraft's new polar orbit 
will carry it over the Sun's north 
pole next summer. Although 
current plans call for the mission 
to end in October 1995, Esa and 
Nasa are keen to continue 
observing until foe end of 2001. 
They say foe modest extra cost, 
$50m, would pay large scientific 
dividends because the current 
observations coincide with a quiet 
period on the Sim, whereas 
2000-2001 will be a period of 
mavimnm solar activity. 

Whatever happens next, Ulysses 
has already paid off in Simpson’s 
eyes. “We don’t have to wonder 
any longer whether the results 
will justify the effort and reward 
foe long wait,” he says. “We 
already know they do.” 



j 

IF lutNf^ 

..... A Ik 

f i fen-,'', i’ 1 ' S ' V 


BUSINESSES FOR SALE 








--.of 

* 

r 


1 N V ITAT 1 CWTQ 'T E NDER 


The Privatisation Fund of 
the Republic of Croatia 

hereby announces an open tender to seR 56.88% of the equity of 

Dalekovod d.d. Zagreb 

Croatia's largest etectro-engineenng company • 

Dalekowxfs main activities are the development and construction of transmission 
lines and substations of all voltages. Furthermore, the company is considered to be 
among the world's largest producers of suspension and connecting equipment 
Daletovotfs strong management relatively modem equipment and low Indebtedness 
make it a very attractive acquisition candidate. . 

A strategic partner Is sought to further strengthen the company's domestic and 
international position. Bids for Dalekovcxfs shares are to be submitted on October 
28, 1994 to the Croatian Privatisation Fund. - 

EPIC and its local partner, INVESTCO, have been mandated as the exclusive 
advisors to the Privatisation Fund of the Republic of Croatia regarding this 
transaction. Financial and strategic investors who are Interested in this opportreiity 
may receive a Company Profile and tender documents against a tee of DM 1000 and 
the signing of a confidenttefity undertaWng. Foriurther Information, please contact 

us at the telephone numbers listed below. .,/ ,v; 


EPIC, European Privatisation 
and Investment Corporation 
PJossJgasse 8 
A-1040 Vienna 
Austria 

Mr. Gustav Wurmbocfc 
Tel: (+43 1) 501 1910 
Fax: (443 1) 501 199 


r j t 

f Norfolk Broads'. 1 

A profitable health and leisure - 
club with a fine house 

• Licensed letoum dub wtdi Indoor wrtnimliig comptac. squash 
courts, gym, crichc. bar - 700 + Adult members • tydte < downed 
5 bedwom Emily house * Planning conient lor golf driving rnw 
and 15300 sq ft leisure club extension • In t>n aboor TO acres 

for tale fitekoM 6450,000 ‘ 

Reft JOI/DTOJI 

25 Grosvenor street, London W1X9FE 

1 fcls 0171-629 6700 


INVESTCO 
Investments & Finances Co 
_:Gajeva55 
HR-41000 Zagreb 
• Croatia 

Mr. Andrei Deur 
Tel: (+385 41) 422 518 
Fax: (+385 41) 431 478 


SOFT TOY 
TOAND SALE V. 

WeDestablisbed' Soft Toy brand 
with jejxi&tjon forh^Ii quality 
for sale. Extensive national and 
Western European distribution. 

Flore Wito toBac B3383 EunallTiecB. 
CtaSoub®** Bridge London S3 SHL ' 

RUSSIA/UKRAINE 

famisnwi company with - 
. government ticease £50k 
(Motor insurance to become 
'utendatoiy hi 3 months for 
. 5 million vehicles) 

Teh UK 061 476 2767 


’ ISO, Live BUSINESSES FOR SALE 
- and Mbs of areata toWflMy 071282 1104 
Free 071 7083684 


Joseph Bentley Limited 

r. 

The Joint Administrative Receivers offer lor sale as a going concern the 
business and assets of Joseph Bentley Limited. The Company is a long 
established wholesaler of horticultural products to the garden centre retail 
trade, sports club, landscapers and local/heatth authorities and is a holder of 
long standing Royal Warrants. 

Principal features include: 

- ■ Freehold property standing in six acres in Barrow upon Humber. 

■ Annual turnover circa £ 7 million and experienced workforce. 

■ Extensive loyal customer base Including retail chains. 

■ Compost and fertiliser manufacturing and packaging facility. 

■ Registered trade marks and brand names. 

■ Experienced workforce. 

For lurther Information contact the Joint Administrative Receiver, 

Geoff Adams, KPMG Peat Marwick, 1 The Embankment, Neville Street, 
Leeds, LSI 4DW. Tel: 0532 313000. Fax: 0532 313183 


Recovery 


PUBLISHING GROUP ■ 

seeks to divest itself of profitable 
Business reference animals to 
in d u scy beyer la order ca conccatrire , 
on Its core business. The series is 1 
expandable and easily mafenble to 
an existing operation. 

lagrested parties (principehcaly) 
wrfcc to Bar B33P4, Financial Tones. 
Ote Sourfmari Bridgr, 

. ’ London SE19HL 


FOR SALE 

City Garden Hotel 

& Park Hotel 

• ‘ 

BRUSSELS 

- 96 and 51 bodmofnsxBWMctivaly 

• Hotels ottered for n&mpai'suely 

• Both hotels dose to ^aotraJ Business 
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- C o mpany orpTopeftyi^Bb oo nd dar o d 

Pteass contact Nfc§ SWdflt . . 

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Berkeley Square House, London wix 6AN, England 
Tel: 071 -629 6290 Fate 071-493 3734 


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• 400 bedrooms (sea views), modem hotel with 
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• Freehold and as a going concern. 

Box B3376. Fi n a nc i a l Times 
* One Southwark Bridge. London SE1 9HL 


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The joint adninstrativeTecewers offer for sale as a 
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Enquiries to: . 

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Telephone: 061 228 8541. 

Facsimile: 061 236 1268. 

Price Hbterhouse || 

Price Wisn-tase s aUhonsaJ ty the Inatfutt d CJiartcrEd 
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18 


FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


BUSINESS AND THE LAW 


M uch has been 
written about the 
explosion of fraud 
in recent years 
and the dramatic growth of 
legal methods of locating and 
recovering the stolen assets. 
These methods are vita] weap- 
ons for victims of fraud who 
need to know, often very 
quickly, what has become of 
the money taken from them. 

Some of these remedies - for 
example the "Mareva injunc- 
tion” by which the defendant's 
assets are frozen until trial - 
have worked extremely well 
and are operated cautiously 
and fairly. There are. however, 
grounds Tor concern over the 
way others can be misused. 

Many of the problems arise 
from the fact that fraud actions 
frequently involve reliance 
upon a “proprietary claim” by 
the plaintiff. This is a claim by 
the victim of the fraud that the 
proceeds of it still belong to 
him although they have been 
transferred to third parties. 

Proprietary claims are par- 
ticularly important to pl a i n tiffs 
who believe that the defendant 
is likely to become insolvent. If 
the plaintiff has a proprietary 
claim over the proceeds of the 
fraud, he will not have to share 
them with other creditors if 
the fraudster becomes bank- 
rupt. Proprietary claims are 
also important where the 
defendant has “given the 
money away” to a spouse, 
friends or trustees, or passed 
them on to others who had rea- 
son to believe that they were 
derived from a fraud. Such peo- 
ple. If the plaintiff can identify 
them and prove that they have 
received the proceeds of the 
fraud, can usually be made to 
repay what they have received. 

If the plaintiff is able to per- 
suade the court that he has an 
“arguable” proprietary claim 
over the proceeds of an alleged 
fraud, the court will usually 
grant orders to help him to 
find out what has become of 
them. This is so that he can 
find out who is holding them 
and, in appropriate cases, sue 
those people for their return. 

It is common sense that all 
of these people should be sued 
at the same time. For this rea- 
son, the court will assist the 
plaintiff to ascertain where the 
money is and who holds it (in 
the so-called tracing process) 
before it requires him to prove 
at a trial that the money 
belongs to him. 

In order to enable him to 
find where the money has gone 
and what it has been used for, 
the court will grant a plaintiff 
who may have a good propri- 


One victim to 
help another 

More careful control is needed of 
methods to trace assets missing in 
alleged fraud, says Robert Hunter 


How MUCH IS IT WO ftwj 

7&-rm the Nice men 

Fl?OM WE COURT THflT 
itcdktoiNS Pocket . 
Money not proceeds 
T>m? 


K 


etary claim tracing remedies 
and investigative powers 
which rival, and in some 
respects exceed, those avail- 
able to the police. 

As a start to the tracing pro- 
cess the defendant will usually 
be ordered to serve an affidavit 
saying what has become of the 
proceeds of the alleged fraud. 
Providing this infm-maHnn ran 
be a huge task. The money 
may have been split up into 


ing process may not end with 
the affidavit. If it is not abso- 
lutely dear where the proceeds 
have gone or what they have 
been used for, this Is fre- 
quently only the beginning of a 
series of further applications 
made, as one judge put it in 
“the excitement of the chase”. 

These might for example, be 
designed to obtain further doc- 
uments. to see lawyers’ papers 
(which are not “privileged'' 


When a court becomes too laisser faire 
in supervising the tracing process 
matters can get out of hand 


numerous parts over many 
years. The ultimate destination 
of each part will have to be 
revealed, and any documents 
relating to the use of the 
money will have to be collated 
and disclosed to the plaintiff. 

While this exercise is often 
time-c onsuming for the defen- 
dant. It is usually justified if 
the only alternative is that the 
plaintiff would be unable to 
locate money which might ulti- 
mately turn out to be his. 

The problem is that the trac- 


when generated for the pur- 
pose of fraud), to appoint a 
receiver over the proceeds of 
the fraud to administer “inter- 
rogatories” (written questions 
which must be answered on 
oath), to cross-examine the 
defendant on his affidavit and 
so on. It is possible for lawyers 
experienced in fraud claims to 
keep the tracing process run- 
ning almost indefinitely with 
applications of this nature. 

It is sometimes too tempting 
to a plaintiff who does not 


wish to go to the expense (and 
possibly the risk) of having his 
action tried to look for an 
easier route to retrieve the 
money. Tlie pressure created 
by these further orders made 
in the name of the tracing 
exercise often appear to pro- 
vide this route. 

Sometimes, the defendant 
may find it difficult to believe 
the plaintiff can be entitled to 
inflict such inconvenience and 
expense upon him without the 
issues having been somehow 
prejudged, and so he may 
become demoralised. La other 
cases, these orders may give 
the litigation an additional 
“nuisance value” in settlement 
negotiations. 

In the remainder, the result 
(whether achieved through set- 
tlement or trial) will remain 
the same - only the cost and 
the time taken to achieve it 
will be considerably greater. 

The problem is not with the 
tracing process itself - for the 
victim of a fraud it is fre- 
quently vital. It is that the 
courts are sometimes reluctant 
to require plaintiffs to show 
the orders they seek are genu- 
inely needed to assist thom 

When the court becomes too 
laisser faire in supervising the 
tracing process matters can get 
out of hand. Several large 
fraud cases have involved 
months of these sorts of wran- 
gles before trial as the parties 
become entangled in time-con- 
suming applications and count- 
er-applications ostensibly as 
part of the tracing process, but 
in reality seeking to inflict 
pressure or inconvenience on 
one's opponent or searching 
for that elusive knock-out 
blow. 

The situation can sometimes 
resemble Charles Dickens' 
Jarndyce v Jamdyce, where 
the parties have become so 
immersed in litigation that 
they have all but forgotten its 
original purpose. 

Nobody could sensibly object 
to the need for powerful reme- 
dies to assist victims of fraud. 
So powerful are the remedies 
which have been developed 
that control of them is needed 
to ensure that they do not give 
rise to victims of their own. 

The purpose of litigation pro- 
cedures such as the tracing 
process should be to ensure a 
quick and effective trial of the 
issues in dispute - not to 
afford a means of imposing 
unnecessary pressure and 
expense to prevent one. 

The author is a partner of AUen 
& Overy and a member of Allen 
& Query’s fraud claims unit 


PEOPLE 


Deaner dives out of MSR chair 


Martyn Deaner, 49. the 
entrepreneur at the centre of 
one of the North Sea’s more 
spectacular financial disasters, 
has resigned as chairman of 
Midland & Scottish Resources, 
the loss-making company oper- 
ating the Emerald oilfield off 
the Scottish coast 
He is the biggest individual 
shareholder in MSR which was 
the stock market's top perform- 
ing share in 1989 when its 
shares nudged 200p- They are 
now standing at The com- 
pany says Deaner “felt his res- 
ignation was appropriate in the 
light of claims for repayment 
made against hhn by lenders 
from whom he has borrowed or 
guaranteed in support of his 
investment in Midland & Scot- 


tish Resources”. 

Deaner, a former diver, was 
appointed chairman in May 
1989 shortly after his private 
company came to the stock 
market through a reverse take- 
over of Jebsens Drilling, a loss- 
making offshore drilling com- 
pany. ms aim was to create a 
business providing low-cost 
development systems for small 
oilfields that might otherwise 
remain unexploited. 

The idea was that MSR 
would use the money it earned 
from operating its first project, 
the Emerald field, to help pay 
for its floating production sys- 
tem which could then be re- 
used as cheap production focil- 
i tie s for other small ntifigidg. a 
year after Deaner took over as 


rhah-fflflTT MSR launched a 
£l49m rights Issue. 

However, the Emerald field 
project ran into financial prob- 
lems because of production 
delays, cost over-runs and the 
foot that there was less oil 
than first thought This com- 
pounded MSR’s problems since 
it owned a big chunk of the 
firirt over the past three years 
MSR has made pre-tax losses of 

jack Birks, 74, who retired as 
a wMKiflginff director of BP in 
iq« 7 has taken over as chair- 
man. MSR says that Deaner’s 
resignation will not affect the 
day-to-day management of the 
company and his services will 
continue to be available on a 
consultancy basis. 


Santacroce’s 
pow wow with 
Aquas cutum 

George Santacroce, president 
and ffhipf executive of the US 
and Canadian operations of 
Aquascutum, the upmarket 
UK-based clothing retailer, h?s 
left the company after a 
restructuring of management. 

The North American busi- 
nesses are now being run 
directly from London by James 
Pow. managing director of 
Aquascutum group since last 
November. Pow becomes group 
chief executive, the new title 
reflecting his wider responsi- 
bilities. 

Pow, formerly with the 
upmarket men’s clothing 
retailer Hackett, part of Dun- 
hill group, has made it a prior- 
ity to regain control of the 
Aquascutum brand name. He 
felt it was being applied to 
many unsuitable products 
around the world. 

His first task was to central- 
ise management, bringing the 
Interna tional divisions in the 
US, Canada, Europe and east 
Asia under direct control of 
London. 

Many functions were central- 
ised, ending the “spider’s web 
of overlapping fun ctions” that 
existed when Pow arrive d. 

The passing of control over 
the northern American 
operations to London last 
month effectively left Santa- 
croce without a role, but his 
departure was described by the 
company as amicable. 

■ Supermarket group ASDA 
has appointed Michael Flem- 


ing; 33, as marketing director. 
Fleming is currently market- 
ing director of Somerfidd, the 
supermarket chain formerly 
known as Gateway. 

Fleming fills the gap left by 
former marketing director 
Allan Leighton's move last 
January to become Asda’s 
retail director, overseeing store 
operations and the prog rarmrift 
of store refurbishments or 
“renewals”. 

He will be building on the 
work Leighton has done to 
reposition the UK’s fourth larg- 
est grocer as a retailer provid- 
ing the weekly shopping needs 
of “ordinary working people 
and their families”. This has 
involved lowering prices, 
strengthening the Asda brand 
and reintroducing the “Asda 
Price” slog an and advertising 

CRTn pfli 0n 

A graduate of Oxford and 
Insaafl, Fl eming has previously 
worked for Storehouse, the UK 
clothing retailer, and US 
investment hank Mo rgan Stan- 
ley. 

■ Christopher Mason, formerly 
director of systems develop- 
ment at BftQ. has been 
appointed director of systems 
at Somerfirid Holdings. 

■ Sue Jones has been 
promoted to financial director 
for J. Walter T homps on 
Europe, part of WPP. 

■ Andrew Regan has been 
appointed finance director 
designate of GIBBS MEW 
fining a p ositio n which has 
beer unoccupied for two years. 
It is intended that he will Join 
the board within a year. Paul 
Davies, md of Centric Pub, 
recently acquired by Gibbs 
Mew. has joined the board. 


Walton leaves 
for Goldman 

Goldman Sachs, one of the 
more aggressive US investment 
hanlra in T nnrinm, has si gnall ed 

its intention to get more 
heavily involved in the UK 
equity market by poaching 
Paul Walton. 35, James Capel’s 
chief UK investment strategist. 

Walton, trim joined Capri in 
1990 following stints at War- 
burg Securities and Smit h New 
Court, was ranked fourth in 
his sector in the latest Extri 
survey of analysts. His 
research on “A profits pathol- 
ogy” was singled out as the 
best piece of research. 

Goldman Sachs has been 
operating in the UK equity 
market for over seven years 
and has recently been expand- 
ing its coverage of specific sec- 
tors by hiring top*ated ana- 
lysts such as Neil Blackley, 
Capel’s former media analyst 
However, until now It has not 
had a general UK equity strate- 
gist to pull together the recom- 
mendations of its various sec- 
tor specialists. 

■ Goldman Sachs has 
appointed Andrew Be van, 37, 
as its senior international bond 
economist Bevan, who joins 
from Bear Stearns, fills the slot 
left vacant earlier this year 
when Jeremy Hale followed 
David Morrison to Tiger Fund 
Management a US-based hedge 
fund. 

■ Michel Plantevin, formerly 
md/senior partner of the Paris 
office of Bain & Co. has been 
appointed an executive direc- 
tor and head of Goldman 
Sach’s strategic advisory group 
in Europe. 


Non-executive 
directors « 


■■ v-wTinev 



Sir Paul Girolami (above), who 
steps down as chairman of 
Glaxo in a couple of months’ 
time, has picked up another 
retirement job. He is joining 
the board of Saatchi & Saatchi 
as a non-executive director on 
October 3. He joined the board 
of Forte last October 
Sir Paul. 68. a chartered 
accountant who Joined Glaxo 
in 1965, is filling a vacancy on 
the board of the international 
advertising group left by the 
planned retirement atr the end 
of the month of Stuart Cam- 
eron, a former director of 
American Brands. Cameron 
has turned 70 and believes it is 
now appropriate to step down 
from the board although he 
was re-elected for a further 
term at Saatchi’s annual meet- 
ing in June. - 

Cameron's job as chairmai* 
Of Saatehi's n ominat ions com- 
mittee will be taken by Sir 
Peter Walters, the former 
chairman of BP and Midland 
Rank. However, there is still 
no word yet on Sir Paul's 
replacement as chairman of 
Glaxo. Britain's fifth biggest 
company. 

■ Robert Colvill, finance 
director of Marks & Spencer, at 
WITAN INVESTMENT 
COMPANY. 

■ Ronnie Hampel, deputy 
nhairman and ceo of IQ, at 
ALCOA. 

■ Roger Young, chief 
executive of Scottish 
Hydro-Electric, as an ordinary 
director at BANK OF 
SCOTLAND. 

■ Patrice Biuneau, recently 
md of BSN’s brewery division, 
ailMC. 

■ Henry Lewis, co-founder of 
Action Computer Supplies, at 
STANDARD PLATFORMS. 

■ Howard Sims, chief 
executive of Cavaghan & Gray, 
at DALEPAK FOODS. 

■ Jean-Pierre Le Clef at 
ABTRUST NEW THAI 
INVESTMENT TRUST. 


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THE 

WA L P O L E 

COMMITTEE 


British Excellence and Quality 


AN OCCASIONAL SERIES 


The National Trust 

Protecting Britain’s Heritage 

Over 300 historic houses and gardens, 547 miles of unspoilt coastline 
and more than half a million acres of beautiful countryside - all these are 
protected through ownership by the National Trust for future 
generations to enjoy. 

"The National Trust for places of historic interest or natural beauty in 
England, Wales and Northern Ireland,' 1 founded in 1895, is a charity 
independent of government. Supported by voluntary donations and two 
million members, the National Trust is one of the largest conservation 
organisations in the world, and is dedicated to excellence in all that it 
does. In the United States, backing for the Trust’s work comes from the 
Royal Oak Foundation. 

Each year over 10 million people visit National Trust properties open 
at a charge; many millions more visit the coastline and open countryside 
protected by the Trust. 

Trust properties include Chartwell in Kent, Sir Winston Churchill's 
family home and Mottisfont Abbey Garden in Hampshire with its 
collection of old fashioned roses. 








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 7 PR 
Teh +44 71 495 3219 Fax: +44 71 495 3220 




4 

















1 


financial times 


TUESDAY SEPTEMBER 


13 1994 


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Renaissance 

reworked 

The artistic quality of paintings rather 
than the subject is what really matters, 
. says William Packer 


ARTS 



he present public debate 
on the merits of figurative 
as opposed to abstract 
painting is based on an 

unsustainable prejudice; 
mat figurative is inherently good; and 
that abstract is too easy - a snare and 
a delusion. 

Yet there is clearly , no objection to 
abstraction of Itself — or where would 
music be, or architecture, or the great 
decorative traditions of Islam a»d 
east? And what about the strange 
acknowledged power of the single, 
simple stone standing in the wfawu 0 f 
the field, or the middle of Whitehall 
for that matter? 

But the general feeling is that 
became the visual arts, and painting 
especially, .possess the- facility of 
direct representation, then that facil- 
ity must be exercised, come what 
may. Yet it Is never the mere refer- 
ence that makes the art, or every Cru- 
cifixion or Annunciation would be as 
good as any other. The distinctions to 
be -drawn between them are as 
abstract, formal and intuitively obvi- 
ous as . those between any Mozart and 
Salieri. 

It is only the quality of what the 
artist does that matters, jjt whatever 
kind, and in London we have work 
pass through the galleries, often coin- 
cidentally, to make the very point. 
Paul Storey, at 37, is still quite young, 
but the scope of bis work, as much in 
Its scale and tonhntnal application as 
in Its subject-matter, bespeaks an age- 
less ambition. Certainly he. is rare in 
attempting, as he has done consis- 
tently since his student days, the 
full-dress subjects, of the Renaissance 
tradition, both sacred and profane - 
the Virgin Mary or The Baptism of 
Christ on the one band, Agamemnon 
or The Rape of Helen on the other. 

He has studied deeply the art of 
15th century Italy, of Fra An gwHen 
and Piero della Francesca in particu- 
lar, to which in costume and architec- 
ture his reference is insistent. Yet the 
cocktail is mors complex than that, 
for, to add to the Italian-serene, there 
is more ttian a pinch of. the northern 
grotesque and fantastical. And while 


again he stays with the 15th century, 
and with Bosch, he also seems closer 
to our own time* in t h i s respect, to 
-Victorian fairy painters such as Rich- 
ard Dadd, and to the great EdwartHm 
illustrator, Arthur Rackham. 

But it is this grotesque aspect, 
always markedly characteristic of Sto- 
rey's work - and a most effective 
device besides by which to draw 
attention to a young artist - which 
now seems increasingly forced and 
artificial. When mannerism becomes 
affectation, it ceases to serve, and 
here too often we have an histrionic 
distortion that attracts attention only 
to Itself. The encouraging thing is 
that Storey now makes the point him- 
self in so many of the smaller, less 
overtly ambitious works, the krnaTi, 
straight-forward heads especially, 
which are by far the best things 
shown. This Is an accomplished show 
which makes us look forward posi- 
tively to the next 
Ellsworth Kelly's new paintings 
could hardly afford a greater contrast 
Now aver 70, Kelly is an American 
painter and sculptor who ram* to 
prominence in the 1950s and early *608 
upon the wave of minimalist reaction 
to the tuff-boot extravagance of 
abstract expressionism. And if anyone 
is to give minimalism a good mane, ft 
is he. Yet the hare description of his 
work must give any sceptic ammuni- 
tion. - a roomful of variations upon 
the simple sector, either variously 
imposed upon a square white canvas 
as a blue, green, red or yellow figure, 
or presented simply as a discrete red 
or white panel: a pure white square 
canvas set askew upon a black, or a 
green upon a blue: a large yellow 
equilateral triangle set on its side 
with a smaller black right-angled tri- 
angle: an orange rightangled triangle 
and a grey chord set together upon 
the mutual, vertical ' 

And of course we all could do as 
well, given the same refinement of 
sensibility and exquisite nicety of 
judgment We worry too much about 
the artist and the apparent nimpKnity 
of his work, and tend to forget that 
the work, ctn its own terms, actually 


More than a pinch of the northern grotesque: ‘Head (Green Hat and Trumpets)' by Paul Storey 


works. Kelly gives os now the sub- 
tlest chromatic dissonance, now the 
gentlest of harmonies: the composi- 
tion now formal and monumental, 
now light and active, the contours 
sprung taut as a bow. And it all acts 
upon the eye and the sympathetic 
imagination like a drop of pure water 
felling into a clear pooL 
Two floors above the Kelly, at 
Annely Juda, we have a last chance to 
see Line + Movement, a small but 


magisterial show of work from the 
European abstract constructivist tra- 
dition from which Kelly himself 
springs - indeed it includes a work of 
his of 1958. It is a selection of very 
high quality, from Fritz Glarner and 
Naum Gabo to Max Bill and Kenneth 
Martin. Best of all it has a group of 
paintings from 1927 by Mondrian in 
his prime. Arrangements of rectangu- 
lar black lines an an off-white ground, 
selectively filled in with blue and red 


Theatre/AIastair Macaulay 


More guidance for ‘Babies’ 


f : ^ 

,f • : \ 

* t % 


'V 

::;&r 


Lorraine Ashbonrne 


N ew plays by young 
and unknown 
authors seldom 
have the success 
enjoyed by Jonathan Harvey's 
Beautiful Thing , which told the 
love story of two teenage boys 
in a South East London apart- 
ment block. New last year at 
tiie Bush, it was taken up by 
the West Yorkshire Playhouse, 
and enjoyed a successful sea- 
son this spring at the Donmar 
Warehouse. Most of those who 
saw it loved it, I think, and 
most of ns who loved it found 
It unusually touching, fanny, 
and realistic. It had its faults - 
tod sentimental an ending - 
but it was the kind of play we 
wanted our friends to see and 
enjoy too. 

Now the Royal Court is giv- 
ing Harvey's latest play Homes 
- which was originally deval- 
oped and. presented at the 
Royal National Theatre Studio. 
It, too, is funny and touching 
and realistic; it, too, is set in 
South. East London and con- 
cerns the sexual problems of 
teenagers and the adults in 


their fives; and this time the 
sentimentality is less marked. 
But Babies is a mess. Several 
of its scenes and characters 
and lines have you roaring 
with laughter - and yet the 
play falls apart -while you are 
watching it 

Some of the blame here must 
go not to Harvey but to Us 
director, Folly Trade. Beautiful 
Thing has the merit of an 
exceptionally truthful and real- 
istic staging by Hettie Macdon- 
ald; the South East London 
created at the Royal Court by 
Teale Is rather obviously cho- 
reographed and safe and audi- 
ence-conscious. As you walk 
in, the kids are up there 
onstage, as if in the school 
playground; and thoug h it is 
just darling watching them — 
what age are all these young 
performers? - nothing quite 
rings true. 

And some of the blame must 
go to the Royal Court and/or 
the National Theatre Studio. 1 
have rarely been so aware of a 
play's need of editorial guid- 
ance while I was watching it as 


here: especially in its second 
half. Joe, a 24-year-old teacher, 
is gay and has problems with 
his boyfriend Woody, who has 
problems with drugs. He is, 
however, a good teacher, and 
goes so far as to attend 14-year- 
old Tammy’s birthday party. 
Not only does Tammy's 32- 
year-dd widowed mother Vlv 
set her cap at him, so does 
Viv’s gay brother Kenny. 
Guess which one is disap- 
pointed. AD of this has plenty 
of potentiaL 

Then, however, Kenny starts 
to rape Joe; and then a drag 
queen arrives, dressed as the 
Queen, as the Surprise guest 
for Tammy’s birthday; and 
then Viv gets into a massive 
fight with a neighbour; amid 
which Joe goes, only to find 
that Woody has stayed off 
drugs tonight, and so the two 
of them are happy and lovey- 
dovey. The rape scene is the 
most distasteful here, less 
because it is graphic than 
because it is set up as mere 
force frolic. But the drag queen 
scene is just as awkward; like 


the rape, it sets up for more 
questions than Harvey seems 
to realise. After these two cri- 
ses. Joe’s happy -again home- 
coming is so safe as to be grue- 
somely escapist 
These problems tend to wipe 
away the memories of the 
really uproarious comedy that 
Harvey does create in some 
scenes. The gay line “You were 
so for back in the closet you 
were" in f***ing Narnia" 
deserves to be a classic. The 
best touch in the play occurs, 
albeit too late, in the final 
scene, when David, a 14-year- 
old, is bullied for having 
wanted to have sex with 
Tammy. The ironies - he 
didn't and so what anyway? 
especially after everything else 
we've seen - are splendid. 
And, as David, Rfod Harnett 
gives the most touching and 
convincing performance in the 
cast. Elsewhere, however, 
charm and realism are marred 
by audience^onsdousness. 

At the Royal Court Theatre, 
SW1 


19 



Music in London 

Maazel and the 
Pittsburgh 


T he most recent occa- 
sion that the Pitts* 
burgh Symphony 
Orchestra attracted 
attention in Britain was when 
a BBC documentary last year 
revealed the huge sums paid 
out to secure the services of its 
music director, Lorin Maazel 
The good people of Pittsburgh 
put a high price on civic pride. 

Although it is not one of toe 
inner circle of great American 
orchestras, the Pittsburgh 
Symphony is good enough to 
hold a place on the interna- 
tional stage. Is it obviously 
American from the way it 
plays? Difficult to say: the 
brass is dominant and there is 
a punchiness about the playing 
which is certainly transatlan- 
tic, but those may just be dom- 
inating characteristics of its 
music director. 

Whatever his drawbacks, 
Maazel gets spick-and-span 
ensemble out of an orchestra. 
The two concerts by the Pitts- 
burgh Symphony in the last 
week of the Proms followed on 
a series by some of the world's 
great orchestras and although 
it does not compare with the 
rich and cultivated sounds 
made by Berlin and Dresden 
respectively, it always knew 
what it was doing. The playing 
was decisive and remarkably 
dear. 

Maazel is less a conductor 
than a musical surgeon. In the 
first concert Rakhmaninov’s 
Third Symphony found him 
scalpel in hand. He analysed, 
clarified and dissected the 
score, slowly laying out its 
bare bones before him. The 
operation was performed with 
impressive precision, but only 


because the heart was dead. 
This symphony has rarely 
seemed so cold: the stow move- 
ment had no lyrical Dow, the 
finale was never joyous. 

More pleasure was afforded 
in this first programme from 
hearing the wealth of detail in 
the 20th-century music after 
the interval. Maazel’s ear 
uncovered many precise tim- 
bres and rhythms in Ravel's 
Rapsodie espagnole and Julian 
Rachlin was no less proficient 
a soloist, with a big time for 
one so young, in Prokofiev's 
First Violin Concerto. 

The second concert was all 
Beethoven: the Eighth and 
Ninth Symphonies, the latter a 
prerequisite for the Proms' 
penultimate night. Typically, 
Maazel was at his best where 
the emotions get least 
involved, as In the metronome- 
like tick- lock of the Eighth's 
second movement or the 
Ninth’s unrelenting scherzo. 
Outer movements were deliv- 
ered with rigorous accents, 
which became pedantic when 
Maazel decided to underline 
crucial turning-points in the 
structure. In sum, the Eighth 
worked, thanks to its energy 
and brilliance; the Ninth pre- 
dictably offered no sense of the 
spiritual and fell short 

The finale of the Ninth is a 
great Prom rabble-rouser, espe- 
cially when it Is song by a 
choir as large and well-re- 
hearsed as the Phllharmonia 
Chorus. Gregg Baker led the 
“Ode to Joy" superbly, the best 
of a big-voiced quartet, Includ- 
ing Nina Rautio, Linda Finnic 
and John Horton Murray. 

Richard Fairman 


nVwi yellow: nothing more: they 

sing like Lorenzo's angels. You have 
until Saturday to hoar them. 

Pan! Storey - New Paintings: Jason 
& Rhodes, 4 New Burlington Place 
Wl, until October 15- KQsworth KeSy 
- New Paintings: Anthony d' Off ay 
Gallery, 2L 23 & 24 Bering Street 
Wl, until October 18. line 4- Move- 
ment Annely Juda Fine Art, 23 Der- 
ing Street Wl, until September 17. 


Fine singers at 
the Wigmore 


T he Wigmore Hall's 
International Festival 
of Song is bringing to 
London this autumn 
some of the most exciting 
young voices around. Last 
weds we heard Dawn Upshaw, 
Olaf BSr and Barbara Bonney 
- all fine singers who did not, 
however, f ulfil every expecta- 
tion. 

Bonney's recital on Thurs- 
day seemed designed to show 
off her beautiful tone - at once 
fight and lustrous - but it also 
revealed the limitations of her 
instrument A little variety In 
the mostly slow, aU-Lkder pro- 
gramme might have helped. 
Her opening group, ROckert 
settings by both Robert and 
Clara Schumann, afforded 
scope for ravishing singing: 
Robert’s “Mein schDner Stem” 
(a wedding present to his wife) 
was infused with radiance, and 
Bonney also caught the filtteg 
beauty of Clara's “Liebst du 
um SchOnheit" - so different 
from Mahler's version. 

The American soprano 
(accompanied by Geoffrey Par- 
sons with dull professionalism) 
found a freshness in the Schub- 
ert songs (Hke “Die Forelle") so 
familiar that they are often 
overlooked, but some of her 
Schubert was perhaps too slow 
and self-conscious. Bonney 
appeared temperamentally bet- 
ter suited to the Mahler Kna- 
ben Wunderkom selection we 
heard after interval, even 
though she did not command 
enough variety of colour to 
sustain interest In the long 


“Wo die schfinen Trompeten 
blasen". Berg's Seven Early 
Songs rounded off the evening 
effectively, drawing together as 
they do influenc es of 19th-cen- 
tury Lieder and providing Bon- 
ney with haunting lines to 
float very appealingly. 

It was similarly difficult, in 
Tuesday’s recital devoted to 
the 46 songs of Wolfs Italian 
Songbook, always to know 
whether to blame performer or 
composer for the limited range 
of expression in Dawn 
Upshaw's singing. Wolf 
assigned most of the cycle’s 
lighter songs to the soprano, 
leaving the more serious ones 
to the male voice. Upshaw’s 
tone is bright and fresh, and 
well suited to the innocence of 
such songs as “Auch kleine 
Dlnge”, bat toe humorous and 
vengeful cameos were a little 
shallow. 

She was overshadowed by 
the interpretative powers of 
her partner, Olaf Bfir, who 
found the dark dr ama of his 
songs in performances that 
sounded almost sculpted. The 
baritone was totally at ease 
and it helps to have a native 
German singing these words. 
He has reserves of operatic 
power, but was most impres- 
sive in the stillness of “Sterb 
ich, so hflllt" and the serenity 
of “Benedeit die serge Mutter". 
Helmut Deuisch was a colour- 
fill pianist who brought each 
one of the miniatures to life 
with iwrig htftii musi cianship . 

John Allison 



■ AMSTERDAM 

Conc«rtgeboiiw Tonight: baroque 
vtoBnist Ryo Terakado plays Bach. 
Tomorrow, Sat, Sun afternoon: 
Vassill Slnaiski conducts the 
Netherlands Philharmonic Orchestra 
In Rakhmaninov’s Third Piano 
Concerto {Shura Cherkassky) and 
Prokofiev’s Fifth Symphony 
(repeated next Tues in Utrecht). 

Sat afternoon: Edo de Waart 
conducts Mahler’s Eighth 
Symphony. Sun morning: Valery 
Gergiev conducts ftottenfom 
Philharmonic Orchestra In Mahtort 
8Mh Symphony* Next Mon: Gergiev 
conducts Kirov Opera ensemble In 
concert performance of . 
Khovanshchina. Sep 2^8^. 
Norman (24-hour Information service 
020-375 4411 ticket reservation* 
020-671 8345) 

Muziektheater Tonight, Frl. next 
Mon (continues till Sep 30): Hartmut 
Haerwhen conducts DavW 
Pountney’s production oJt»y 
Macbeth of Mtsenek, w«J [®f- Mana 
Bundschuh and WiBard White- 
Tomorrow, Thurs, Sat, Sun • 
afternoon (continues -till Sep 21/- 


Dutch National BaSst In 
choreographies by Balanchine, 
Fernandez and Van Dantzig 
(020-625 5455) 

■ ANTWERP 

deStogel Tonight Carlo Rizzi 
conducts the Orchestra of the 
Monnaie in symphonies by Schubert 
and Mahler. Tomorrow: PhHppe 
Herreweghe conducts Collegium 
Vocale In sacred music by SchQtz. 
Tonight and'tomarraw (Rode ZaaJ): 
Michdle Anne De May and Company 
in DeAte/s-cbareography of - • 
Pukaneda Fri:Anne Teresa De 
Keersmaeker's dance group Rosas 
presents Actiterfand (03-248 3800) 
de Vlaamse Opera The Flanders 
Opera season opens on Sep 30 with 
a new production of Don Giovanni. 
(03-233 6685) 

■ BASLE 

Stadttheater The first new 
production of the season Is 
SpontinTs La Vestale, opening on Fri 
(repeated Sep 19, 25). Robert Duerr 
conducts a staging fry Christine 
Miefttz, wrth a casf headed by 
Francesca Pedad/Suzarme Murphy - 
(061-2951133).. - 

■ BRUSSELS 

Palais des Beaux Arts Tonight 
(^flse des Minimesjc Phfllppe- 
Herreweghe conduct# Collegium 
Vocato in a SchQtz programme. 
Thurs: Yuri Simonov conducts 
Belgian National Orchestra to works 
by Borodin and Dvorak, wltii cello 


Barthoiomie 
Philharmonic Orchestra in 


Messiaen's Eclairs sir I'Au-Deto. 

Sep 22: Czech Ph3 harmonic. Sep 
24: Jessye Norman. Oct 4: Murray 
Perahla (02-507 8200) 

■ CHICAGO 

MUSIC 

Lyric Opera The 1994-95 season 
opens on Sat with Boris Godunov, in 
Steln Winge’s Geneva production 
conducted by Brurio Bartoletti. 

The cast is headed by'Sarauef 
Ramey (repeated Sept 20, 23, 27; 
Oct 1, 5, 8, 10, 14, with Vladimir 
Matorln singing the title role fai some 
performances). The.season- 
also includes The Bake’s . 

Progress, Fedora, li barbfare 
cff Sh/iglia Capriodo, 

Cancflde, Aida and Siegfried 
£312-332 2244) V- ' > 

Chicago Sy mp hony The season at 
Orchestra Hall Opens on Sat, the 
same night as the LyricOpera. 

Daniel Barenboim Conducts the 
opening choral programme of 
Bruckner and Beethoven (Sep 17, 20 
and 27) arfolhreei further • 

programmes during ^becoming 
month. Itzhak Perlman is vtofln 
soloist on Sep 22, 23 and 24. arid 
gives a recftal with Barenboim on - * 
Sep 26 (312-435 6666) 

THEATRE 

• Angeb m American Tony 

Kushner’s two-part epic has just 
opened at Oiicago’s Royal George 
Theatre for an extended run, in a 
rational touring production cfirected 
by Michael Mayerand featuring 
Jonathan Hadary as Roy Cohn 
( 312-988 9000 ) - 

• A Clockwork Orange: 
Steppenwolf Theatre gives the 
American premiere of foe stage 
verslon of Anthony Burgess* classic 


novel. Previews begin tomorrow. 
Opens Sep 27 (312-335 1650) 

■ GENEVA^ • 

The opening procfoction of the new 
season at the Grand Theatre is 
kkxneneo, conducted by Armin 
Jordan and stagedJby Christopher 
Akien, with a castTieaded by Johan 
Botha, Paul Groves and Sbiveig - 
Kringefoom. The next performances 
are Thurs and Sat/repeated -Sep 20. 
23. 26 and 28 (822^311 2311) - 

■ THE HAGUE 

Dr Anton PttHipfiza«*l Fri. Sat 
Yevgeny Svetiarktfconducts Hague 
Philharmonic Orchestra in- works by: 
Wagner, Svetiandv-and Tchaikovsky. 
Mon: ScfeMfiberg^&isisifole plays 
arrangements of.rivistC by Skryabln 

(070-360 9810) .. 


LINZ 


•4“ 


The annual Bruckner Festival 
opened on Sunday.'-and continues tiH 
Oct 2. This week's programme 
Includes concerts on Fri and Sat by 
the PWlharmonla Orchesfra under 
Giuseppe Stoopoli, with soprano 
Edita Gruberova. Other highlights: 
the Orchestra de Paris plays 
Bruckner’s Ninth Symphony on Sep 
23, Marek Janowski conducts a 
concert performance of Wagner's 
Lohengrin on Sep 25, Christian 
Zacharias gives a piano recital on 
Sep 27 and the London 
Philharmonic gives concerts on Oct 
1 and 2 (0732-775230) 

■ ROTTERDAM 

De Doeton Tonight: Orpheus 


Quartet plays string quartets by 
Haydn, Bartok and Beethoven. Fri: 
Valery Gergiev conducts Rotterdam 
Philharmonic Orchestra in Mahler's 
Sixth Symphony. Sun: Caribbean 
Carnival, with steel bands, dancers 
and others (plo-217 1717) 

■ UTRECHT 

Vradenburg Sat Bernhard Klee 
conducts Radio Chamber Orchestra 
in works by Mozart, Richter and . 
Schubert. Sun: - Valery Gergiev 
conducts Kirov opera ensemble In 
concert performance of Berlioz's La 
Damnation de Faust (030-314544} 

■ VIENNA 

• The Vienna State Opera Ballet 
presents a new production at the 
Volksoper on Mon of a ballet based 
on Lobar's Die (ustige Wltwe. The 
Stats Opera will remain dosed for 
technical alterations till Dec 14, but 
the ensemble will perform Cos! fan 
tube under Riccardo Mutl at Theater 
an der Wien from Oct 29 to Nov 13 
(51444 2959/51444 2969/513 1513) 

• The main orch e stral programme 
at the Musikverein resumes on Sep 
24 and 25 when the Orchestra de 
Paris gives concerts conducted by 
Semyon Bychkov (505 8190) 

■ WASHINGTON 

MUSIC 

• Andrew Litton conducts the 
National Symphony Orchestra and 
Oratorio Society of Washington at 
Kennedy Center Concert Hall on 
Thurs, Frl and Sat Hie programme 
consists of a suite from Gershwin’s 
Porgy and Bess, with a cast headed 
by Cynthia Haymon (202-467 4600) 


• David Ztoman conducts the 
Baltimore Symphony Orchestra on 
Fri and Sat at Baltimore’s Joseph 
Meywhoff Symphony Hall. 
Kyung-Wha Chung is soloist In 
Beethoven’s Violin Concerto 
(410-783 80009 

THEATRE 

• Ftyfry West: This play about 
courage and frontier justice in late 
19th-century America, produced by 
New Jersey's acclaimed Crossroads 
Theatre, runs till Oct 9 at the 
Eisenhower Theater (202-467 4600) 

• Goodnight Desdemona: Ann- 
Marie MacDonald's spoof on 
Shakespeare runs till Oct 16 at 
Woofiy Mammoth Theater (202-393 
3939} 

. • A Perfect Ganestu Terrence 
McNaflys play, about two New 
England matrons on a personal 
quest as they journey through India, 
runs ti Oct 30 at the Krueger 
(202-488 3300) 

• The Rise and Fad of LKtJe 
Voice: Jim Cartwright’s play, about 
a young girl with the ability to mimic 
pop female vocalists, runs tiU Oct 9 
at Studio Theater (202-332 3300) 

■ ZURICH 

Opemhaus Tonight: Die Zauberfifite. 
Tomorrow, fit Rusalka. Thurs: 
Tosca. Sab Adam Fischer conducts 
the first night of Cesare Liavi's new 
production of La Cenerentola, with a 
cast headed by Cedlia BartoU, 
Roberto Saeca and Carlos 
Chausson (01-262 0909) 

Tonhafle Thurs, fit George Clave 
conducts Tonhalie Orchestra in 
Poulenc's Double Piano Concerto 
(the Labequee) and John 
McLaughlin's Guitar Concerto, with 
composer as soloist 0)1-261 1600) 


ARTS GUIDE 

Monday: Berlin, New York and 
Parts. 

Tuesday*. Austria, Belgium, 
Netherlands. Switzerland, Chi- 
cago, Washington. 
Wednesday: France, Ger- 
many, Scandinavia. 

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

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 

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

MONDAY 

NBC/Super Channel: FT 
Reports 123a 

TUESDAY 

Euronews: FT Reports 0745, 
1315, 1545, 1815. 2345 

WEDNESDAY 

NBC/Super Channel: FT 
Reports 1230 

FRIDAY 

NBC/Super Channel: FT 
Reports 1230 

Sky News: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky News: FT Reports 0430, 
1730; 





20 


FINANCIAL TIMES 


TUESDAY SEPTEMBER 13 1994 


L ike nowhere else that I 
have ever lived. South 
Africa has seared my 
souL 

The grinding agony and the 
transcendent joys oC the past 
five yean, during which I have 
been Financial Times corre- 
spondent in Johannesburg, 
have touched me In a way that 
(I suspect) no country will ever 
do again. 

I am not a particularly emo- 
tional person - my friends say 
rather a cynic and a pessimist 
- but South Africa has got 
under my skin. It is a land of 
huge, empty beauty, whose 
people have taught me confus- 
ing lessons in the nature of the 
human spirit immensely gen- 
erous and chillingly brutal by 
turns, they are extraordinary. 
Apartheid brought out the be9t 
and worst in them: It left little 
room (or the mediocre. 

They have lived one of the 
most dramatic moments in the 
history of the human spirit, 
and 1 have lived it with them. 
The liberation of blacks and 
emancipation of whites from 
the twin burdens of oppression 
and guilt must rank as among 
man's greatest positive 
achievements this century. I 
can hardly believe 1 was lucky 
enough to watch it happen. 

From tbe first l was fasci- 
nated by tbe political theatre 
which is South Africa: for 
nearly a decade. I have made it 
my life. In 1985, I arrived for 
my first visit bearing the cer- 
tain knowledge of good and 
evil which was the common 
baggage of most foreigners: the 
Afrikaner was demon and the 
African saint; there were no 
mixed tones In the black and 
white morality of the place. 

That vision did not survive 
my first week. Though the 
police behaved predictably, 
shooting at mourners at a 
township funeral, the same 
funeral generated an incident 
which disturbed the simple 
plot: mourners used the “neck- 
lace” - the South African 
method of death by means of 
strai jacketing the body with a 
burning tyre - to attempt the 
murder of a man standing near 
me. Archbishop Desmond Tutu 
Intervened, and the episode 
ended without bloodshed; still, 

I found it hard to grasp the 
primordial hatred that could 
spur such a deed. I still do. 

I visited South Africa several 
times in 198536. years of town- 
ship revolt and state repres- 
sion which left me certain the 
place would never escape from 
its vortex of madness. They 
were years when I wondered 
about my own sanity, too: I 
remember watching from a dis- 
tant bridge as vigilantes 
hacked each other to death in 



Changing standards: a flag drapes a coffin in 1986. and the new South African flag is raised this year 

A black and white 
morality tale 

Patti Waldmeir reflects on her time in S Africa 


the ETC squatter camp near 
Cape Town; afterwards, f 
returned to a luxury hotel for a 
hamburger and a beer. As 
though nothing - or nothing 
worth noting - had happened. 

Over the years, I am 
ashamed to say, this incongru- 
ity ceased to bother me: 1 
would return from some town- 
ship conflict, take off my bul- 
let-proof vest, relax in my fra- 
grant garden with a chilled 
glass of Cape wine, and experi- 
ence nothing other than relief. 
Or worse yet, I would simply 
stay in the garden and leave 
the death watch to others. 

South Africa was designed 
for that laid out physically to 
ensure that the worst black 
misery was invisible to whites 
who did not detour to see it; 
socially structured to permit 
white masters and black ser- 
vants to live within metres of 
one another, yet never cross 
the gulf of privilege between 
them; politically constructed so 
that, with few exceptions, only 
blacks feared police brutality, 
the necklace or political mur- 
der. Whites had only crime to 
worry about 

But always, the generosity of 
spirit of many, many Africans, 
and not a few Afrikaners and 
other South Africans, defied 
those divisions. In the time 
that I have known if, this most 
divided of societies has made 
great strides to heal Itself. 

No one - certainly not I - 
would have believed it possi- 
ble; reason cannot explain it, 
nor cynicism grasp it 

Today the South African 


flag, which used to fly only 
b ehin d barbed wire and sand- 
bags at embattled police sta- 
tions, flutters in the garden of 
my neighbour's house in a 
white suburb. The local radio 
station provides lessons to its 
listeners in how to sing the 
two sectarian hymns chosen to 
unite this land as a national 
anthem: Nkosi sikelel i'AJrika 
(God bless Africa), the libera- 
tion anthem, and Die Stem . the 
theme song of apartheid. 

B lacks practise singing 
Die Stem and whites 
stumble along with 
the unfamiliar Afri- 
can syllables of Nkosi sikelel 
i’AJrika. And cynic that I am. 
my eyes fill with tears. 

This is not to suggest that 
South Africa has overnight 
attained national nirvana. Ear- 
lier this month, three men 
were “necklaced" in Duduza, 
the same township where 
Bishop Tutu prevented the 
necklacing in 1985. The killing s 
were not political - the three 
were suspected car hijackers - 
but they were nonetheless 
chilling for that. Like many 
things, they are a hangover 
from the old South Africa. 

Whites still grumble about 
blacks and vice versa ; many 
whites refuse to sing Nkosi 
sikelel i'AJrika and tbe black 
labour federation, Cosatu, sang 
only the black national anthem 
at Us recent congress. 

But in so many other ways, 
the racial divide is being 
bridged. Most Afrikaners have 
somehow found ways to adjust 


to a fate they always believed 
would be worse than death: 
rule by the black man. 

And at least in urban areas, 
where white and black often 
share the colour-blind camara- 
derie of the workplace, race 
relations have undoubtedly 
improved. So for, blacks have 
been magnanimous in victory 
and whites gracious in defeat 
That may change when the 
real struggle begins - the bat- 
tle over the redistribution of 
wealth - but it is a good start 

The credit for that goes to all 
the South Africans who have 
eschewed the bitterness which 
one mi ght have thought inevi- 
table under apartheid. 

But overwhelmingly, it goes 
to Nelson Mandela, who has 
charmed even his most com- 
mitted enemies since the day 
In May when he stood on the 
steps of parliament In Cape 
Town, and placed his hand 
over his heart in respect for 
the singing of Die Stem, 
anthem of his oppression. 

I wore sunglasses that day to 
hide my tears from my more 
professional colLeagues, as 
Mandela gave this extraordi- 
nary public signal of forgive- 
ness, while white sharpshoot- 
ers protected him from root 
tops. I have needed my sun- 
glasses often as this strange 
and wonderful tale of collective 
liberation has drawn to its con- 
clusion. South Africa will 
never be the same again - but 
then, neither will L 
The author is nearing the end 
of her assignment as FT South 
Africa correspondent 


South Africa. 

Richer in human 
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Joe Rogaly 


It’s those men again 



The half-point 
rise in British 
interest rates 
may not help 
the govern- 
ment, but it 
could be a good 
career move for 
Mr Kenneth 
Clarke. The chancellor is not 
one to let such an opportunity 
pass him by. He popped, up 
everywhere yesterday, present- 
ing hims elf as a prudent, deri- 
sive and visionary national 
treasurer of steely resolve and 
delicate touch. We are invited 
to believe that he knows which 
monetary string to fine-tune, 
and when. It appears that he 
has found tbe magic formula 
that has hitherto eluded econo- 
mists in the known universe. 
Yes, the self-styled canny Ken 
has discovered bow to drive an 
economy to the very borders of 
Utopia without mishap. 

Neither you nor I nor Mr 
Clarice can be certain that this 
is so. Between you and me, I 
have my doubts. It is not even 
clear whether the rise in base 
rate was derided upon by the 
chancellor in happy concur- 
rence with the governor of the 
Bank of England. Quite possi- 
bly , Mr Eddie George was qui- 
etly insistent Thanks to Mr 
Clarke, the minutes of the 
mpoHng* between the two are 
published. This gives tbe gov- 
ernor the powerful weapon of 
disclosure should the chancel- 
lor take a view different from 
his own. Either way, it would 
have been in character for Mr 
Clarke to conclude that, if 

Unpalatable mgrilririp Is railed 

for, it had better be adminis- 
tered at once. 

Thus obliged, the chancellor 
has put his name to an 
increase in rates that many 
will regard as sensible. He has 
also intimated, in his custom- 
ary manner, that there will be 
no tax cuts before the Novem- 
ber 1995 Budget. In short, he 
has come across as competent, 
and, better yet, a beacon of sta- 


bility. This should be to his 
credit In the kingdom of the 
maladroit, ha who is capable 
earns respect and admiration. 
In due course this will benefit 
the chancellor, in spite of 
much wrin g in g of Tory hands 
over the higher cost of mort- 


Dld 1 say maladroit? Such a 
kind epithet This is not a sign 
of commentator’s softness; it is 
Just that the ability of this gov- 
ernment to pound Its own face 
with custard pies of its own 
making is beyond parody. We 
need merely note tbe weekend 
performances by the prime 
minister And the c foMn n a n of 
the Conservative party. The 

latter, a Mr Jer- 

emy Hanley, 


Mopp with "Can I do yer now, 
girT and Mona Lott with "It’s 
being so cheerful that keeps 
me going"- Yesterday Mr Han- 
ley was twittering chirpy noth- 
ings about the forthcoming 
party conference while Mr 
Clarke was raising interest 
rates. If the chairman of 
the Conservatives continues 
the slapstick he has started, 
we must all smile sweetly 
and say; “It’s That Man 
Again.” 

None of this would matter 
were it not for the govern- 
ment’s desperate need to show 
that it is in controL of its own 
conduct, that tt is in a position 
to take two or three steps at a 

time without 

falling fiat. 


took only 24 The government is ■ Before the sum- 
more spectacularly f er won b d r e e r ^ 
the former’s unpopular Ulan It aloud whether 

was in the spring. 

Mr Major, poor 
chap, runs and 
runs and stays in 
the same place 


effort to con- 
vince us that 
the Conserva- 
tives are the 
party of law 
and order. The 
prime minister 

needed to do 

this because 
the home secretary. 


who 

should, hasn’t. So on Friday 
Mr Major spoke of countering 
Britain’s ‘Yob culture”. That 
was unwise, since it invited, 
and got, the riposte that tbe 
government has been in office 
for 15 years and we are now up 
to our eyes in yobs. Could any- 
one make things worse? Yes. 
On Sunday the party chairman 
depicted a clash of yobs at a 
prize-fight as a spot of exuber- 
ance. Later he apologised and 
said he doubted his own suit- 
ability for the job. 

Mr Hanley is famous for 
being the child of entertainers. 
It was curious of Mr Major to 
appoint him. Perhaps he was 
thinking, in this 50th anniver- 
sary year, of the wartime 
comedian. Tommy Handley, he 
whose show Itma ("It's That 
Man Again”) gave us Mrs 


we could detect 
signs that Mr 
Major was get- 
ting better at 
his job. Not 
quite yet per- 
haps, but if he 
was blessed 
■bmmmmmi with a good - 
lucky - summer, his party 
would discover that he had re- 
established "grip”, leadership, 
an ability to convey tbe sense 
that he and his ministers were 
in charge and knew what they 
were doing. Alas for them, the 
Conservatives have not had a 
good July and August. The 
government has come out of it 
more spectacularly unpopular 
than it was in the spring. The 
prime minister, poor chap, 
runs and runs and stays in the 

camp n jflca 

Quite possibly one cause is 
that other man again. As he 
indicates an the page opposite, 
Mr Tony Blair is claiming for 
the Labour party the image of 
financial rectitude that has 
fallen from the Conservatives’ 
grasp. If the chancellor and the 
governor perceive a need for 
an increase In rates, he sug- 


gests, they must be right. Of 
course the new Labour leader 
also argues that a government 
under his prime ministership 
would not have started from 
here. It would have invested m 
infrastructure, education and 
training and thus be running 
an economy that could sustain 
low inflation at a higher rate of 
growth than achieved under 
the Conservatives. 

This is the argument put 
over the past year or so by the 
shadow chancellor. Mr Gordon 
Brown was away yesterday. Mr 
Blair's presentation of Mr 
Brown’s thesis is of greater sig- 
nificance than is accounted for 
by a clash of diaries. We can 
take or leave the bit about 
Labour having the better for- 
mula for growth. The key point 
is Mr Blair’s carefully implied 
commitment to low inflation. 
This may be interpreted as yet 
another tug of the party 
towards the centre of British 
politics. It is all of a piece with 
his tilt away from a pro-Catho- 
lic stance in Northern Ireland, 
his refusal to support the rail- 
way signallers' strike, and his 
outspoken statement that a 
married heterosexual couple is 
the best unit for the upbring- 
ing of children. 

Britain's silent majority, con- 
servative at heart, wifi doubt- 
less be comforted by such sen- 
timents. Mr Major seeks to 
project a similar message. He 
has shown courage and consis- 
tency In dealing with Northern 
Ireland, but for the rest he is 
hamstrung. Since it has been 
there so long, the government 
gets the blame for everything 
that goes wrong. It is so out of 
favour that it cannot make 
political capital out of a pro- 
longed and irritating railway 
strike. This casts a shadow 
over the chancellor’s expecta- 
tions of promotion. For while 
Mr Clarke may one day win 
the leadership of the Conserva- 
tive party, conservatives are 
looking to Labour for their sal- 
vation. 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

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


Towers Perrin 


Competition 
may not 
benefit all 

From Ms Ruth Evans. 

Sir. Your report, “Gas indus- 
try and users step up call for 
legislation" (September 8), 
implies that all consumer 
groups want the government 
to introduce competition in the 
domestic gas market at the ear- 
liest opportunity. This is not 
the case. 

The National Consumer 
Council believes much more 
information needs to be made 
available before domestic con- 
sumers can be confident that 
the changes will be to their 
benefit 

The ordinary gas user is 
caught between British Gas 
warning of steep price rises 
and independent companies 
promising cuts. How can con- 
sumers make up their mlflrig 
when there Is no detailed infor- 
mation on the new industries’ 
obligations and no independent 
cost-benefit analysis? 

While we believe competition 
benefits consumers when it 
increases choice, we are con- 
cerned that any real choice in 
a domestic gas market might 
only be available to more afflu- 
ent consumers living in partic- 
ular geographical areas. It cer- 
tainly seems unlikely that 
companies trill fight over the 
custom or low-income house- 
holds using pre-payment 
meters. 

Regulation of gas supply 
since privatisation has led to 
lower bills for consumers in 
real terms. We do not want to 
see a successful system dis- 
mantled before the advantages 
of an open market for all 
consumers have been estab- 
lished. 

Ruth. Evans, 
director, 

National Consumer Council, 

20 Grosvenar Gardens. 

London 8WIW 0DH 


No measure of competitiveness 


From-Mr Guanas Mam 

Sir, I enjoyed Frances Wil- 
liams’s critical remarks on the 
Institute for Management 
Development competitiveness 
report (World Trade News: 
“Lean and mean, but Is it 
fair?”, September 7). Judging 
nations on the basis of a bunch 
of economic, political and cul- 
tural indicators as if they are 
competing against each other 
on these terms is nonsense. 

As Paul Krugman convinc- 
ingly argued In a recent article 
{Competitiveness: a Dangerous 
Obsession, Foreign Affairs, 
March/April 1994) on the obses- 
sion of national politics with 
competitiveness, wealth cre- 
ation of countries or compa- 
nies cannot solely be matched 
with success on world markets 
or competition for foreign 
direct Investment (FDI). 
Although it is obvious that 


national income depends on a 
variety of different factors, sin- 
gle national characteristics 
should not be judged as If 
nations are competing on these 
characteristics. Taken together 
they shape the economic struc- 
ture of nations - but is there a 
general formula behind their 
respective Impact? 

Even if we focus on eco- 
nomic indicators, it is by no 
means clear that world trade 
or FDI rank first in determin- 
ing national wealth in each 
country. Think, for example, of 
the US, Japan and France, 
which have reached high levels 
of per capita income with low 
export quotas - instead of 
highly obvious differences in 
their respective trade balances. 

If, however, the analysis is 
limited to world market suc- 
cess, one should focus on the 
structural failures of foreign 


trade - that is, on single prod' 
ucts or product groups. This 
micro-economic approach 
reveals much about existing jjt 
strengths and weaknesses of * 
different countries - the more 
so where trade among high- 
tech countries is concerned. As 
a matter of feet, sectoral pro- 
ductivity and product-based 
technological leads are more 
valuable in offering an expla- 
nation of foreign trade struc- 
tures and the impact on 
nation al income than the IMD 
indicator, which neither serves 
national governments in shap- 
ing economic policy nor the 
real-world businessman. 

Gunnar Mfint, 

Fraunhoffer-tnsdtut far System- 
technik und innovationsfar- 
sdtung, 

Beslaver Str 48, 

D-76139 Karlsruhe, 

Germany 


Rate rise a low-risk move 


From Dr Stephen Popham. 

Sir, Samuel Brittan in his 
article of September 8 (Eco- 
nomic Viewpoint) castigates 
Goldman Sachs for trying bo 
guess the non-inflatiouary 
growth rate of the UK in its 
advice that interest rates ought 
to rise. There is, however, a 
more subtle argument for rais- 
ing interest rates soon than 
one that sees renewed inflation 
around every corner and that 
relates to the relative risks run 
in making the wrong decision. 

Not to raise rates and to find 
that inflation takes a hold 
again would mean that the 

harsh anti -inflationary medi- 
cine that the economy swal- 
lowed in 1992 was all In vain. 
And it would reinforce the 
image that the sceptics have of 
the British economy as one 
prone to inflation and boom I 
bust cycles. 

To raise rates, however, runs 


very little risk indeed. With 
the output gap falling, Europe 
emerging from recession and 
the rest of the world for the 
most part growing strongly, 
there is every reason to invest 
And because raising rates 
would reinforce the determina- 
tion on the part of the mone- 
tary authorities to provide a 
stable low inflationary envi- 
ronment, It could even be 
argued that that would be posi- 
tive for investment! If con- 
sumer expenditure does take a 
dive, then interest rates can 
easily be lowered with no lon- 
ger-term damage (and anyway 
since, if the authorities are 
seen to be ahead of the game, 
longer-term Interest rates will 
surely foil, the impact on con- 
sumer expenditure is likely to 
be quite mild). 

Stephen Popham, 

30 The Priory, 99 Epsom Road, 
Croydon CR0 4NT 


Fair balance 


From Mr Frits van Kempen. 

Sir. I read with surprise A C 
Grayling's book review “Balan- 
cing Terry Maher's books" 
(September IG/LI). Is Mr Gray- 
ling certain that he looked at a 
balance sheet on Terry Maher? 
Accounting convention sug- 
gests that he has been looking 
at Terry Maher's profit and 
loss account or bank state- 
ments instead. 

The credit side of a balance 
sheet is normally associated 
with liabilities and the debit 
side with assets, therefore I 
would expect the memorable 
events nf Terry Maher's life to 
date to be recorded as assets at 
net book value on the debit 
side of his balance sheet and 
the less memorable events as 
liabilities at face value on the 
credit side. 

Frits van Kempen, 

Plat 1. Rue du Mail 104, 

1050 Brussels, Belgium 


Crisis helps advance ideological positions on population growth 


From Profjagdish BhagwatL 

Sir, Edward Mortimer's 
article (“False alarm in Cairo", 
September 7) on the Cairo con- 
ference on population misses 
the point in arguing that the 
delegates miss the point by 
focusing on ideology rather 
than on population growth 
which, in any case, can be 
expected to become “nearly 
stationary" on current trends. 

As it happens, the compla- 
cent and comforting popula- 
tion projections that Mortimer 
accepts are as fragile as the 
alarmist ones. If past projec- 
tions are any guide, which is 
why it has become customary 
to work with alternative sce- 
narios. Nor is Mortimer well 
advised to rely on economists 
who dissociate hunger and des- 
titution from population explo- 


sion. These scourges occur 
despite the per capita availabil- 
ity of enough food to avoid 
them since need and demand 
are two different things, but it 
is a non sequitur to conclude 
that therefore they cannot 
occur due to pressure of popu- 
lation: in a raft at sea with the 
last bottle of fresh water, Rob- 
inson Crusoe would do well 
without Man Friday, you bet 
Even if you do not believe 
the alarmist estimates, how- 
ever. it may be prudent to rely 
on the precautionary principle. 
But many go with the esti- 
mates for a different reason. 
They seek to create and then 
use a sense of crisis to advance 
ideological positions, exagger- 
ating in turn the impact of 
their preferred policies to 
advance them as cures to the 


crisis. Just as John Stuart Mill 
shrewdly observed that “a 
good cause seldom triumphs 
unless someone's Interest Is 
tied up in if, the women's 
groups that properly seek 
empowerment and abortion 
rights see political value in a 
sense of crisis mo matter how 
weak Its intellectual underpin- 
nings) that creates ferment, 
fuels urgency and fertilises the 
ground for their causes to take 
root 

In feet, even the suggestion 
that female education - and 
Mortimer may well have added 
female participation in the 
workforce - rather than ideol- 
ogy aids population control 
draws a false contrast. Female 
education has generally 
advanced because of ideology 
not because of a cost-benefit 


calculation by us economist* 
its value for population coni 
or growth rates. That we < 
simultaneously argue, that 
to the research of economi 
such as Robert Repetto, tha 
advances these other caua 
whfle being a good in itself, 
splendid: It enables us to 
well while doing good. 

But we must not forget fi 
a good society will address p 
clsely these ideological qu 

™5f at every °PPo«uni 
progress in the well- 
ing of women that, astoni 
iagly, still eludes them 
every part of the world. 
Jagdish Bhagwati, 

Arthur Uhman professor of e 
nomics, 

Columbia University, 

West 118th Street. 

York. NY 10027, US 








FINANCIAL TEV TO-S 


TUESDAY SEPTEMBER 13 1994 


l 


FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
. . Tel: 071-873 3000 Telex: 922186 Fax: 071-407 5700 

. . Tuesday September 13 1994 



IHC economy: fastgrowttifuet* inflation fears 


H change 


OOP growth j 


• Xbtianca 

-. — 


Mr Clarke 
buckles up 


And the sound that you heard was 
the sound of precedents breaking. 
The UK chancellor, Mr Kenneth 
Clarke, yesterday decided to raise 
interest rates, before such a move 
was thought overdue, and only a 
month before the Conse rva ti ve 
party, conference. What is more/ 
the 'leader of the opposition did 
nbt-T criticise the increase. 
Although a conclusive verdict will 
not be possible for some ttuia (if 
ever), the policy shift looks about 
right The breaks with tradition 
can be welcomed even less reserv- 
edly.- . 

Oyer two years into economic 
recovery, the direction of yester- 
day’^, half -point change - which 
took UK base rates to 5.75 per cent 
- was no surprise. The shock was 
the tinring, and to a lesser extent," 
the size of the increase. On both, 
Mr fUarirft has taken a mian-Wh 
economic, risk, and a larger politi- 
cal one. 

The economic gambl e hi yester- 
day's rise is that the recovery is 
strong enough to take it Pointing 
to last week's mind batch of data, 
critics might argue that this is for 
from certain. UK consumers may 
yet react more negatively to this 
year’s tax rises than, many sup- 
pose. Moreover, a rise-in interest 
rates could; on. this argument, 
muff out .any chawrp of a sus- 
tained upturn in investment, 
which has sadly lagged behind in 
this recovery to date. 

It is hi the nature of a “pre-emp- 
tive’' rate rise that these doubts 
will be raised. But the recent expe- 
rience of US monetary ti ghtening 


indicates that the authorities can- 
not afford to look reluctant to 
raise rates as the economic cycle 
matures. The UK yield curve is 
unusually - steep for this Stage fo a 
recovery, while price pressures, 

■ - tftmigh thankfully aUgM*, are visi- 
ble nonetheless. 

Tbe yield curve offers a reward 
for plucky chancellors, in the form 
of lower long-term rates. Judging 
by yesterday's market reaction, 
the decision to tighten could 
deliver Just such an. effect The 
gap between UK and German gov- 
ernment lanfffenn'bdad rates - a < 
good guide to dHfertng inflation ■ 
expectations for each country - 
narrowed a little tb close at about 
1-35 percentage paints. 

As the. continued sfae of that 
gap indicates, it will take more 
than a single pre-conference pre- 
emption for Mr Clarke to convince 
many that the UK’s historic pen- 
chant for "boam-bust” economics 
is gone for good. These fears 
would revi ve, for example, if Tory 
backbenchers ware- successful in 
winning tax cuts in the November 
Budget "in return” for having 
swallowed yesterday's rate 
increase. 

It is crucial that the rationale 
for yesterday's increase be under- 
stood to be a longterm one: deliv- 
ering the government’s own infla- 
tion target of 1-2% per cent before 
the <*nfl of the .current p aHiimwnt 
Yesterday’s move seemed refresh- 
ingly novel: the good news is that 
with hufc.Mr Clarke will not have 
to Stee^ MmneTf to . do the amw 
again for some time to came. 


- 19B8 .. 8»V -SO 91 82 ,8 

SbuottCW Inn CM MQMWy1tHO» 

T he scene was probably 
unique in Britain's post- 
war history. 

Yesterday morning a 
supremely confident - 
some might say ebullient - Chan- 
cellor Kenneth Clarke canwH the 
press into fbe TTeasmy to hear him 
explain an increase in UK interest 


'. -lb 


s . as*., . ; jT. 



Annual Kflhanoe 

to 

Money supply (MO) j 


Annual % change (RP1 axckidtofi MPa) 

10 — 




>j S p p iu»ctt^c a nj » ilata3ipaoilDBlnteaMaaart^ w i pM^ ^ 


Bosnian bravado 


There are two ways that external 
powers can influence the outcome 
of the war in Bosma-Hercegovma, 
if they so choose. One is to tx eati 
as a war of aggression and come 
to the aid of the victim (Bosnia) 
against the aggressor (Serbia). The 
other is to treat it as a cxvfl.war, 
in which, the various parties are 
essentially on- tire same moral 
plane,’-fte8 midge fbem towards.a <- 
compromise peace while bringing 
relief, and where possible protec- 
tion, to'|be dvflian victim^. . 

The fr^tstrategy was whet BosF 
nians woe led to expect 'when^he 
US and dhe EC recognised. their 
state and government to. April 
1392. Had it been followed at' that 
time..the arms embargo applied to 
Yugoslavia the previous year 
would never have been applied to 
Bosnia. • . 

Weapons would have been 
rushed toBosnia along with train- 
ing nrisskxns to help the new state 
organise^ its armed forces and 
push baik the Serb mihtias Which 
were partly infiltrated from Serbia 
and almost entirely armed and 
trained by the former Yugoslav 
army. The Bosnian armed forces 
could have been provided with 
western ^ir cover, to that event, if 
(□denial ground troops had been 
sent they would have gone not as 
supposedly impartial peacekeepers 
but as an expeditionary force to 
protect Bosnians from "ethnic 
cleansing” and help liberate the 
territory- that had been occupied. 

But it was not followed. The. 
Bush administration, which with 
some Justice held tbe EC responsi- 
ble for .precipitating the war in 
Bosnia by its premature recogni- 
tion of, Croatia and Slovenia, 
allowed. Eurqpe to take the lead. 
Within Europe the Germans, feel- 
ing themselves disqualified by bis- 
tory from any military role in the 
Balkans; deferred to Britain and 
France;. both of which took the 
serand approach. to early 1993 BUI 
Clinton made a half-hearted 
attempt to persuade Europe to 
switch to the first strategy under 


the rubric of "lift and strike", but 
backed off when Britain and 
France claimed a veto over any 
poficy» that might Imperil their 
contingents mi the ground. 

In 1994 ah awkward compromise 
emerged which Is short on logic 
and clarity but . has had same 
results, mainly because the five 
most influential external jwwers , 
have 4cjjeffSn upjjwn. Broadl#igi§& 
. stfll the second approach, but with 
greater pressure applied to the 
Scabs man attempt tp compensate 
for the, weakness - # the Bosnian 
■ ^ovmnmmst and to xedreto ait least 
: pat of toe wrong done toBosnian 
^ Moato ps- The ©caifaict group peace 
plan K lnpfly a model' of justice, 
butitwonldatleastgiye Bosnian 
Moslems and Croats enough once 
to five la without flgbttog each 
other, as. they are bound to do if 
they rernmn confined to less than 
30 per dent of the country between 
them. Moreover the Contact 
Group has scored a significant vic- 
tory in getting Presidmt Milosevic 
of Serbia to endorse the plan and 
to disavow the Bosnian Serbs’ 
rejection of it 

The Bosnian Serbs have never 
been so Isolated. Having got so 
far, the Contact Group should 
insist that Serbia co-operate in 
making that Isolation watertight, 
ami wait for its effects to sink in. 
The threat of lifting the embargo 
sho uld be kept In the background. 
Actually lifting it would make 
sense only if there were agree- 
ment by all parties to switch to 
the first strategy, of helping the 
Bosnian government in a war to 
"liberate” its entire territory. 

The truth is that no party, not 
even the US, is prepared to do 
this. Some American legislators 
may Imagine they can help the 
Bosnian Moslems as they once 

hri pftri thp Afghan Myg nhirtin. Tha, 
analogy is flawed in many : 
respects; but Afghanistan today 
gives all too convincing an image 
of what Bosnia might look like in 
a few years* time if the^Congres- 1 
stonal ^strategy" 'were aHphed.”'' ' 


on 


Germany’s Free Democratic Party, 
the Mhgmaitw to virtually every 
coalition since the founding of the 
federal republic, suffered another 
pair of devastating electoral 
defeats at the weekend In east 
Germany. For six elections to a 
row, the. party has now foiled to 
win the 5 per cent of the vote 
needed to gain 'seats In state, fed- 
eral and European parliaments. In 
the. eastern state of Saxony, the 
FDR- won just 1.8 per cent, com- 
pared with 5.3 per cent to 1990. In 
neighbouring Brandenburg It did 
only mar ginally bettor, with 2J2 
per rent, although that was a 
sharp 'drop from the 6.6 per cent it 
won- four years, ago. Tbe electoral 
writing would appear fo. be truly 
on foe wall for tbe FDP. 

As for as east German electors 
are ^concenied, it seams to have 
Uttlfto offer. Its policies of liberal 
maraet economics, deregulation, 
andt-free trade, combined with a . 
mistrust of. state interference at 
allfevds, aiid g liberal attitude to 
imrnjyratin n and race relations, 
have foiled to find any response 
from the newly-en£ranchised east 
Germans. One factor is clearly 
that there is no real middle class 
to. appeal to in .. the east. But-; 
another is the signal failure 


of ' the FDP 'Sfo .find- policies of - 
relevance. " . . 

The trouble for the party of Mr 
ariwiiH i ^nicri, the German foreign 
minister, is that it .is scarcely bet- 
ter off in west Germany. Most 
political analysts still expect the 
FDP to sanigie. into foe Bundestag 
in the general Section to October, 
but'it mar wdLn^have: enough 
seats to repeat the" present coaH- 
timwitoChamMflaFHaraiit&foli 

or to fonn an sfflprhative with the 
opposition SbidaL Democrats^ The’ 
most Hkely bntetene- wotdd^then 

he a " gwmd - ffnalftTrtyi" nf P^trfa tian 

Democrats and'So&ffl Democrats, 
which neither of . the big parties 
really wants, leaving the liberals 
out in foe cdd. 

The FDP has.no one to blame, 
but Itse^ for IfapHghfcThfl party 
has been' too. long; in powo^foid. 
shows no. inspiration eveqpt in L .& 
desire to hangbnfo iL It wants fo 
■distance, itself. £ram-lfr XohL.frut 
cannot do ^> far fear' of loring 

tvknf iifHA rfiinjihlMf nHTl HVw% . 


marry ' yySma * htbeSng of] tJfiD 88 j60" 
an men have iafea foeir toB. The, 
loss of foe real wdee ofTfeecdism 
from the German political tfe&eto 
would, be severe. Bfo it may, taken 


Under past TDiy chancellors, such 
moves were usually made to 
response to fftianHai market crises 
and associated with policy failure. 
Mr Clarke was unabashed in pres- 
enting it as a sensible step towards 
securing the economic recovery and 
expanding eanployment. 

Alihough some increase to UK 
borrowing costs bad been widely 
expected for some time, the signifi- 
cance of Mr Clarke’s move s ho uld 
-not be underestimated. Yesterday’s 
rise of half a percentage point in 
bank base rates to 5.75 per cent is 
the first increase in officially 
inspired tending rates for nearly 
five years: 

As the last Tory chancellor to 
begin ratatns rates after a period of 
faffing borrowing costs - Mr N5gd 
(now Lord) Lawson) - was forced to 
keep ratcheting rates upwards to 15 
per cent, it would be unnatural if 
Mr Clarke’s did not stir 

troubling folk memories in the Con- 
servative party and the nation at 
large. 

But the reason that Mr Clarke 
appeared so cheery as he fielded 
questions yesterday was that he 
hopes and believes his move will 
spare him the agonies suffered by 
Mr Lawson between May 1968 and 
October 1989 when base rates 
soared from 7JS per cent to 15 per 
emit The amilM on the faces of 
Treasury officials - and across 
town among senior Bank of 
ICn gianH staff - show that Ms adviS- 
ot think be could be right - 

To an important extent Mr Clarke 
has grabbed the policy initiative 
and farther rinftnpri his chaneeflar- 
fihtp - We knew that he always said 
he was opposed to inflation. We 
knew that he was prepared to be 
tough on fiscal polity, not hesitat- 
ing to push up fa™ last November. 

♦jeLjlx ■ AUri 


The UK interest rate rise shows the government sees 
political gain in controlling inflation, says Peter Norman 

Prevention rather 
than painful cure 


Yesterday, he reinforced Ms reputa- 
tion for fiscal prudence by expHcitiy 
ruling out tax cuts in his forthcom- 
ing Budget on November 29. 

But there were doubts about 
whether this self-styled son of the 
industrial MjdhmHa understood the 
need for timely and hard decisions 
on monetary policy, not least 
because of his insistence last Febru- 
ary an a base rate cut when Mr 
Eddie George, governor of the Bank 
of England, and most erf his ftffjp»ni« 
to the Treasury were opposed. 

Yesterday, Mr Clarke showed he 
will take potentially unpopular 
action bksed on a medium-term 
view of the economy whan current 
indicators of faflattnm are subdued. 
Underlying inflation, as measured 
by the retail prices index excluding 
mortgage interest payments, was 
just 22 per cent in July. This was 
its lowest level for 27 years - and in 
the lower half of the 1-4 per cent 
target band, where the government 
is committed to having inflation by 
the ami of thin parliament. 

The strategy is not without risks. 
Mr Clarke admitted that the deci- 
sion to raise rates - taken finally at 
lunch time last Friday - was “finely 
judged". When Mr Clarke and Mr 
George held the first of their 
monthly monetary meetings after 
the summer break last Wednesday 
they agreed that the ftcnnmwy was 
"poised” for an interest rate 
increa se, but still had same doubts 
over whether to act straight a way 
or after their next meeting 
at the end of this month. The 
final decision came after 
r\r * v... •>.• 


a two-day pause for reflection. 

While the two men agreed that 
inflation is currently very low, they 
noted that some indicators - such 
as commodity prices, manufactur- 
ers’ input prices and CBI surveys of 
corporate pricing intentions - 
suggested that cost and price pres- 
sures had begun to pick up- Mone- 
tary indicators were mixed, 
although continued strong growth 
of MO. the narrow measure of notes 
and ratna to circulation, continued 
to be a worry. 


P rincipal among the foo- 
ters persuading the two 
to raise rates was evi- 
dence of stronger than 
expected growth in the 
first half, when gross domestic 
product rose at a year-on-year rate 
of 3.7 per cent This was well above 
the the 2.75 per cent growth rate 
forecast for this year by the Trea- 
sury to June and the UK’s esti- 
mated "trend” growth of about 2^5 
per cent at which tbe economy can 
expand without stimulating infla- 
tionary pressures. 

The decision was also influenced 
by last month’s latest CBI survey oS 
industry pointing to a further accel- 
eration of output and above average 
capacity utilisation, as well as grow- 
ing evidence of faster growth in 
continental Europe and signs of 
recovery in Japan. 

Care data about the economy pub- 
lished in August and relating to the 
first half of this year appears to 
have weighed more with the chan- 
cellor and governor . than more 


recent indicators suggesting that 

rftncmnpr riomnnH pl ight at last be 

slowing in response to tax increases 
that took effect in AprfL The sub- 
dued state of the housing market, 
where estate agents have com- 
plained of weak turnover and mort- 
gage lenders have been scaling 
down their forecasts of price rises 
this year, did not stand to the way 
of the rate rise. The Bank's view to 
any case is that the housing market 
is "steady” and not weak. 

The decision shows bow closely 
attuned Mr Clarke and Mr George 
now are. Mr George did not have to 

Tnrnmt g long rwnpalg n to persuade 

Mr Clarke to act True, in the sum- 
mer the governor was the tost to 
warn that rates would have to rise. 
But it is understood that last 
Wednesday's meeting was the first 
at whidi Mr George specifically rec- 
ommended a rise in rates. By Fri- 
day at the latest, the chancellor was 
on the same wave-length. 

Yesterday Mr Clarke was sound- 
ing for all the world bke the author 
of the Bank of England’s quarterly 
inflat ion reports, undarUnfnff the 
need to act in a timely mawww to 
influence inflation In 18 montha to 
two years’ time. 

Quite what effect a (15 percentage 
point rise to rates will have an the 
economy is open to question. (Sven 
the witte gap between the old base 
rate of 525 per cent and most mort- 
gage rates, yesterday’s prompt 
action by the Nationwide Building 
Society and the Abbey National 
bank in raising mortgage rates was 
probably not to the authorities’ sce- 


Inftafion 


narlo for developments after the 
rate increase. However, the hesi- 
tancy of other mortgage landers to 
follow suit could point to a patchier 
than usual response among mort- 
gage lenders. 

While many business organisa- 
tions were predictably critical of the 
move, the higher rates may not 
have too great an impact on corpo- 
rate borrowers because market 
rates had already discounted such a 
step. * 

The chancellor's move was politi- 
cally brave. With the Tory party 
conference four weeks away, the 
absence so for of a "feel good fac- 
tor” in the recovery and the party’s 
lamentable performance in the opin- 
ion polls had argued against any 
increase in rates before November. 

Instead, Mr Clarke yesterday 
clothed bi m s w lf in monetary states- 
manship. Using vocabulary suitable 
for a Bundesbank council meeting, 
Mr Clarice stressed the importance 
of low inflation for strong and last- 
ing growth. He had taken action 
now to avoid more drastic action 
later. Businessmen would welcome 
the move because it promised sta- 
bility. He hoped it would reassure 
home buyers of the government’s 
counter-inflationary resolve and 
influence wage bargainers. 

Indeed, the chancellor maifo clear 
that he believes there is political 
advantage to be gained from run- 
ning the economy in a way that 
keeps inflation under control. His 
vision is of a Britain that la "one of 
strongest European economies”, 
that "is firing on all cylinders” mid 
which no longer is brought grinding 
to a halt by the need to bring down 
inflation from double-digit levels. 

It is unclear whether yesterday's 
rise to interest rates will achieve 
this goal or whether further 
increases are in store. One senior 
official suggested that the Novem- 
ber meeting of chancellor and gov- 
ernor wffi be time for a stock taking 
of its effect on the economy. 

What is dear, however, is that 
UK monetary policy has embarked 
an a new era of anticipating prob- 
lems rather than responding to 
disaster. 


How to flatten the cycle’s ups and downs 


B We are barely out of 
the last .. recession 
and already the eco- 
nomic brakes are 
being applied. Busi- 
nesses and house- 

Prvvnvi t 110148 80088 MWn 
have good reason to 

— YM&L — fed worried. 

But these concerns will go beyond 
the extra burden yesterday's rate 
rise WOT place an family a nd invest- 
ment budgets on top of this year’s 
tax increases. More fundamental 
stm is what the Increase reveals 
about the long-term weaknesses of 
t h e British economy. It is here that 
the r«»l political debate will be 
joined, hot over whether each rise is 
m itself justified. ' 

The fact is that the government 
hna felled to create the conditions 
necessary for sustained growth 
without accelerating inflation. 
Th a ffl ramdftinns are a strong and 
dynamic economic base, with the 
industrial capacity and skilled 
workforce necessary to cope with 
rising demand. Without them, slow 
growth, rising insecurity at weak, 
high rnitmipio y niAiit- and increased 
social decay will persist 


Vladimir’s 

welfare 

■ Scnne former communists are . . 
'Such ffmaBunt Mjwmmte of frige 
marbot ecflwmrica Unit, von vmnrigr 

what on earth was gatog an imdde 
their heads just a few years back. 

. Take former Communist party 
member Vladimir Dlouhy, for 
instance, currently the Czech . 
Republic's most popular pofttidaxL 
to the five years since Prague's __ 
velvet revolution, Dlouhy has 
became leader of the . 
hberal-canservatiye QUA party and 
also been taken cm as minister fra: 
industry antitrade. 

' Dlouhy was in London yesterday, 
trying to drmn ity interest in 

fnyf ftfflflnt from th e Gnnfarinn ifirtn 

of British Industry. Be-drew a 
ronyindng picture of an ecoauHny . 
which has metamtaphosed from 
Coanecon dodo into lean, mean. . 

TTMffhhie nf Tww-ftn rmd tf ha rfltimvi 

He also did a slash and burn job on- 
west Europe’s welfare state 
prac tices , aiyiigh’i g tham inf brin g 
the root caste of damaging : 
anti-dumping measures taken. 



Of course, it is a matter of acute 
economic judgment whether yester- 
day's increase was necessary now 
to order to choke off inflationary 
pressures or could have been post- 
poned until later. Recent economics 
statistics tell confUcttog stories - 
weaknesses to the housing market 
but rising retail sates; stable retail 
price inflation bat accelerating pro- 
dneer prices. 

What is dear, however, is that 
the Treasury and Bant of En gland , 
on the basis of published statistics 
and privileged information avail- 
able to them, believe that rising 
inflationary pressures justify action 
now to slow the recovery. 

But why is inflation threatening 
to derail economic growth at such 
an early stage of the recovery? 
When Alan Greenspan, ehatnnan of 
the US Federal Reserve, raised US 
interest rates at the beginning of 
tins year, the US economy had. been 
growing far three years and output 
bad risen by 10 per cent 

UK rates, already higher than to 
fh« US, Japan and Germany, have 
been forced up only two years from 
the bottom of the recession with 
output up just 5 per cent 


as 15 timaa highar than In the fawli 
Republic. So cut the welfare state 
nfmiwnop and Intuvliiw* proper 
mwp p titinn, to the benefit of afl. 

- Where on earth did Dtouhy dream 
up such radical notions? Maybe he 
was thinking erf those countries 
where the state is so bankrupt as to 
be unabla to meet tts pensions, 
healthcare and social security 

rnmmttmwntg — such a$ far m or 
fQfpxu&L 


Beyond the pale 

■ Brendan OTriel, chairman at the 

Prison Governors’ Association, 
interviewed an BBC Radio’s Today 
pogramme yesterday, noted that 
there had cady bed four attempted 
escapes by IRA prisanHs involving 
the use of arms. “Two in Northern 
Manti and two to this country * 

Perhaps the Beverend T«t> Paisley, 
the Ulster Unionist leader, Ms a 
paint after all... 


Wiser man 

■ What a rehef to find even 
Goldman Sachs' Gavyn Davies, one 
of the Treasury’s wise men, makes 
the occasional boo boo. His ; column 
in yesterday’s Independent 
newspaper canted the Immortal 
words "Short of Eddie George 

making an aimn imr pi tiw ^ fry 

loudhafler from the middle of 
TbraadnsecDe Street, no more 


Part of the problem is credibility. 
It must be worrying far the govern- 
ment that it , has made so little prog- 
ress over the past two years to per- 
suading the public and the financial 
markets that it can keep inflation 
under control. 

The implied City forecast to the 
index-linked bond market is an 
inflation rate of more than 5 per 
cent by the end of the decade, a 

The government's 
lack of credibility is 
not simply a question 
of competence but of 
analysis 

long way from the government’s 
pledge of 2^ per cent by the end of 
the current parhament 
But the reason for this lack of 
credibility goes to the heart of 
Labour’s critique of the Conserva- 
tives’ economic mismanagement 
over the past 15 years. Far the rea- 
son why ngHhcr the financial mar- 
kets nor the Bank of England 
believe that the government will 


Observer 


meet its inflation objectives is not 
simply that it has failed before, but 
that it continues to treat inflation 
as the disease, not the symptom, of 
a deeper economic malaise to the 
British economy. 

to short, the government's lack of 
credibility is not simply a question 
of competence but of analysis and 
understanding. For the root cause 
of Britain’s economic failures is 
that our economic base is too small 
and backward to deliver the 
employment opp o rtunities and sus- 
tained, ntm-inflationary growth we 
need - too few successful firms, not 
enough skilled workers, too little 
research into the development and 
use of new technologies. 

Tackling inflation is not simply 
about prudent monetary policy, 
important though that is. Instead, 
economic policymakers in Britain 
need to tackle what CBI director- 
general Howard Davies recently 
identified as "crucial structural 
weakness” to the British economy - 
the deficiencies which mean we 
have high unemployment alongside 
rising skill shortages, and a recov- 
ery starved of new investment 
What Britain, needs is a modem 



Tf Iliad a job, I probably wouldn't 
be so exuberant* 

been made.” 

So what went wrong? Davies puts 
tt down to equipment failure. Efe 
httptib the tfank of England’s 
signalling to the money markets to 
the way that the Sea Lords used to 
send messages to the fleet by a 
system of pulleys and wires and 
semaphore flags. Davies’s verdict is 
that “a seagull sat on the fine”. 


Harbouring doubts 

■ Nest month’s Conservative 
conference contains a poignant side 
amid all Che more traditional fine of 
Tory conference agendas - hanging, 
flogging, tax cuts, withdrawal from 


Europe and so on. There will be a 
heartfeh plea from the local party 
in Market Harborough in 
Leicestershire, which will urge "Her 
Majesty's government to be more 
mindful of single people who feel 
discriminated against with regard 
to single supplements for hotel 
accommodation”. 


Dotty Lotty 

■ The lure of the DM42m jackpot, 
the largest in the 40-year history of 
the German lottery, has elicited 
some pretty strange behaviour. 
Take 

the 83-year-old man from Erlangen 
who presented his bank with a 
lottery slip with the six numbers 
correctly crossed and a forged letter 
from the lottery organisation 
confirming he had won (a positively 
modest) DM2m. The bank extended 
a DM30,000 loan. By the time It 
sniffed a swindle ami caught the 
man he had spent DM29,000 on trips 
to Paris, Loudon and Leipzig: 


Needled 

■ Times change -even at the 
Royal School of Needlework in 
Hampton Court 
The impeccably connected Giles 
Shepard, skilled embroiderer of 
some 30 years’ standing, was 
recently replaced as chairman of 
the finance committee of the Royal 

School by John Burke, chief 
executive of Bristol & West 


industrial policy to build up our 
economic base - to encourage more 
long-term Investment in Industry, 
support small businesses and 
encourage tbe use of private finance 
in public infrastructure projects. It 
needs a tax system which encour- 
ages investment rather than tax 
evasion n»d promotes employment 
rather than unfairness. And it 
needs to boost the education and 
skills of British workers. 

Only then will the UK economy 
be ab}e to deliver rising living stan- 
dards and employment growth with- 
out running into an inflationary 
mire. No government can avoid 
completely the ups and downs of 
tbe business cycle- Our aim must be 
to minimise them and provide the 
conditions for stability and growth 
which will make Stop-Go economics 
a thing of the past and remove the 
spectre which now haunts this 
recovery, 

Tony Blair 

The author is the leader of the 
Labour party and member of Pariia- 
meat for Sedge field 


Building Society. The 
well-cushioned Burke, whose 
dexterity with a needle doesn't 
quite stretch to fixing buttons an 
shirts, says that a friend on the 
council had been keen to tap a 
wider pool of business knowhow. 

Now that Shepard, who remains a 
council member, has checked out as 
managing director of The Savoy, he 
wlfl perhaps have more time once 
again to devote to the school's most 
urgent t»sfr — raising funds to 
educate its apprentices. But perhaps 
one of thft other luminaries on tbe 
council might volunteer to return 
with the begging bowl to Rocco 
Forte, who has apparently been 
known to donate in the past. 


Brand pain 

■ How do yon cure an 80-year-old 
headache? Open your wallet, take 
out Slhn, and boy a chunk of 
aspirin. That’s what Bayer has Jnst 
splashed out to acquire Sterling 
Winthrop, thereby regaining its old 
Bayer Aspirin brand. 

Bayer developed aspirin at the 
turn of the century. But during the 
first world war the US Alien 
Property Custodian took control of 
Bayer's US property and in 
December 1918 sold those assets to 
Sterling Drag for $5.3 lm. The 
German company has been 
smarting ever since: it lost not only 
its brands, but also the use of its 
name in the US. 

Mind yon, the Kaiser always 
preferred paracetamol... 


— .- n * 







22 


\ A FINANCIAL TIME 

( for change 


| ragsa t | 



FINANCIAL TIMES 

Tuesday September 13 1994 


ANixrct 

W lring_Syst erp *_ S jat c js ! i J ! s 


Emernel * IBM Cabling System ■ LAM 
Fisre Op! Ic i ■ AT&T's PCS ' Nevada Western 
Ccldcn ■ Digital a DECcsr.rect 
Tel. 0753 GS5B84 


Bonn seeks early opening 
of state telecoms network 


By Christopher Parties 
on Frankfurt and Andrew Adonis 
in London 

Germany may allow new 
telecommunications companies 
to open their own networks by 
the end of 1937, in spite of strong 
opposition from state-owned 
Deutsche Telekom and national 
operators in other European 
Union countries. 

In a surprise about-turn, Mr 
Wolfgang BOtsch, post office min- 
ister, said Bonn would consider 
going it alone if the EITs council 
of ministers failed by the end of 
this year to fix a date for liberali- 
sing all EU networks. 

A report this year by an EU 
group on the development of 
“information superhighway" ser- 
vices said competition in the pro- 
vision of networks was essential 
if Europe was to be competitive 
with the US and Japan. 

The Commission is currently 
drafting proposals, due to be pub- 
lished early next year, that would 
open telecoms network infra- 
structure to competition at 
the same time as telecoms serv- 
ices. 

Basic phone services are set to 
be opened to competition in Jan- 
uary 1998 across most of the EU. 
That would also become the date 
for infrastructure competition if 


KKR buys 
Borden 
for $2bn 

Continued from Page 1 

was considerable scope for 
merger between KJR and Borden, 
particularly in the snacks mar- 
ket 

RJR declined to comment yes- 
terday. However, the deal 
specifies that if RJR should buy 
any of Borden’s businesses in the 
future, it may use in payment the 
Borden stock it stands tCto-mrire 
throug h ye sterday's tran&gpion. 

For KKR, the immediate ques- 
tion is what to do with the loss- 
making parts of Borden's busi- 
ness, including the dairy 
division, which makes up a quar- 
ter of group sales. 

An adviser to KKR said no 
decisions would be made until a 
definitive agreement was signed 
in two weeks’ time. "They've 
barely begun thinking about it," 
she said. 

Analysts commented that the 
move partly represented a switch 
by KKR out of RJR, where earn- 
ings have improved sharply in 
recent years, to a more highly 
geared recovery play. 

Borden has made heavy losses 
in the past two years, 
chiefly because of restructuring 
charges. 

Mr Les Pugh of Salomon 
Brothers said; “It's a very, very 
smart deal. It's not an industrial 
merger, but a wonderful piece of 
financial engineering." 

Borden's shares rose $2'A in 
early trading to $13%. RJR shares 
fell S% to $6?>. 


Germany set to go it alone if EU 
fails to set liberalisation date 


EU ministers support the Com- 
mission. 

A Commission official said Mr 
Bdtsch's statement was an 
"important first step" towards 
persuading vested interests - 
notably state-owned telecoms 
companies - to accept the inevi- 
tability of early Infrastructure 

competition. 

Mr BOtsch, who had previously 
insisted that the 12 EU states 
should move together and grant 
open access to networks one or 
two years after the 1998 services 
deadline, *»iri Deutsche Telekom 
needed to be able to plan clearly. 

However, the move is still 
strongly opposed by Deutsche 
Telekom, which is preoccupied 
with the privatisation of the com- 
pany due bo start in early 1996. 

Mr Rolf-Dieter Leister, chair- 
man of Deutsche Telekom's 
supervisory board, told the Sfld- 
deutsche Zeitung newspaper. *1 
certainly do not represent the 
view that Germany should 
become the front r unn er in Euro- 
pean telecoms liberalisation.” 

Mr Leister, Telekom’s most 
senior non-executive director. 


made plain tha t Telekom man- 
agement, preparing for the tran- 
sition to a joint stock company 
next January, was hampered by 
the need for all important deci- 
sions to be approved at the politi- 
cal leveL 

Telekom's mandate had to be 
made clear now for the benefit of 
future shareholders, he said. It 
was especially important that the 
enterprise should be able to 
establish foreign subsidiaries and 
appoint top managers without Mr 
Bdtsch's having the final say. 

Meanwhile, management 
needed to be clear on the scope 
and timing of domestic liberalisa- 
tion moves. "Will the minister 
license corporate networks? How 
win he deal with alternative net- 
works? What will happen with 
broad-band cable? How will 
mobile telephones develop in 
future?" he asked. 

The UK has allowed competi- 
tion in telecoms infrastructure 
for a d ecade , and the Netherlands 
is set to follow suit following the 
partial privatisation of its 
state operator earlier this 
year. 


Video-on-demand 
set to take off for 
in-flight viewers 


By Raymond Snoddy (n London 

A California company is planning 
to intensify competition for the 
world in-flight entertainment 
market by taking video-on- 
demand above 30,000 ft for the 
first time. 

MicropaHs Corporation, which 
specialises in video -on-d emand 
technology, has signed a deal 
which should lead to the intro- 
duction of the film of your 
choice, when you want it, on 
Pacific flights from next year. 

Showing films on long haul 
flights is already routine, but the 
Micro polls system means that 
around 20 feature films wQl be 
Instantly available to passengers. 
They will be able to choose a film 
when they are ready and pause 
or play back the screening. 

The system is sophisticated 
enough to serve all the first and 
club class passengers simulta- 
neously - typically around 96 
people - even, if everyone chases 
the same film. A similar service 
will be available to economy 
class passengers for a fee. 

Mr Stu Mabon. chief executive 
of Micropolis, which has UK 
offices at Reading, Berks, 
southern England, said yesterday 
he would announce the deal at 
the World Aviation Entertain- 
ment Association's annual con- 
vention in Montreal next month. 
He declined to say whom the deal 


was with, but it is believed to be 
with Matsushita, the Japanese 
consumer electronics group 
which has an in-flight equipment 
division. Tim first airline to use 
the system is expected to be Sing- 
apore Airlines. 

The system, an airline version 
of tiie AV Server 100, will be dem- 
onstrated at the IBC broadcasting 
convention in Amsterdam this 
month. Mr Mabon said. 

The competition for in-flight 
nnterteininCTit jg already intense. 
Virgin Atlantic, which offers four 
channels of feature films, Is in 
the process of introducing home 
shopping and even the ability to 
gamble on route. 

Micropolis says the system is 
the first to go commercially oper- 
ational It has already gone live 
hi seven hotels in the US Includ- 
ing the Omni Richardson and 
Grand Kempinski in Dallas, 
Texas, in partnership with Spec- 
tra Vision, the hotel entertain- 
ment company. 

Mr Mabon said It appeared that 
offering guests a wide choice of 
films, at exactly the moment they 
wanted them, had nearly doubled 
film revenues in the hotels which 
have the system. 

Apart from hotels and aircraft, 
Micropolis is targeting cruise 
ships, training services and the 
cable television industry for the 
systems, which cost around 
£50,000 ($77,500) each. 


Dublin 

bombing 

dampens 

peace 

hopes 

By John Murray Brown in 
Belfast, and Kevin Brown, 
Mic ha el Cassefl and Jimmy 
Bums in London 


The prospect of an early end to 
Irish political violence receded 
yesterday as the outlawed Ulster 
Volunteer Force admitted 
responsibility for bombing a 
Dublin railway station. 

The bombing was condemned 
as “revolting” by Sir Patrick 
Mayfaew, Northern Ireland secre- 
tary, reflecting British concern 
that loyalist violence could 
threaten the open ended IRA 
ceasefire announced last month. 

Hr Pat Doherty, a senior offi- 
cial of Sinn F«n, the IS A’s po lit- 
Ical wing, accused the UVF of 
trying to force the Dublin gov- 
ernment to abandon direct con- 
tacts with republicans. “The loy- 
alist hope is that fear of the 
conflict being brought ‘down 
here’ wfll scupper the peace pro- 
cess,” he said. 

Mr John Hume, leader of the 
moderate nationalist Social Dem- 
ocratic and Labour party, said he 
was confident that the ISA 
would not retaliate because Shm 
Ffrin’s leadership was “totally 
committed” to the peace process. 

Mrs Maire Geoghegan-Quinn, 
the Irish justice minister, said 
the attack would not deflect the 
Dublin government from its aim 
of consolidating the republican 
ceasefire by talking directly to 
Shm FfeLn. 

British officials expect the US 
to grant a visa soon to Mr Gerry 
Adams, the Sinn F6in president, 
as part of the Irish government's 
strategy of drawing Sinn Fdin 
into mainstream politics. How- 
ever, the British government 
believes that President Clinton 
and other leading Administra- 
tion officials will avoid a direct 
meeting with the Sinn Fdln 
leader to prevent a weakening of 
Unionist support 

The 2kg Dublin bomb exploded 
as an egmai train from Belfast 
was pulling into Connolly sta- 
tion in the city centre. Two 
women with slightly hurt Irish 
police said the explosion was 
caused by 8 detonator which 
failed to ignite a bigger explo- 
sive charge, suggesting that the 
casualties cou ld ha ve been much 
higher. The UVF said it had 
planted bombs in seven other 
locations in the city. None were 
found. 

The bombing reflects contin- 
ued loyalist suspicion of a secret 
deal between Britain and the 
IRA, and confirms that Protes- 
tant terrorists are prepared to 
take their campaign to the Irish 
Republic. The Combined Loyalist 
Military Command, which repre- 
sents the UVF and the Ulster 
Freedom Fighters, the two main 
terror groups, said last week 
that a loyalist ceasefire would 
depend on assurances that no 
deal had been done. 

Ulster peace dividend. Page 12 


THE LEX COLUMN 


Turn up for the book 



The turn in interest rates in the UK 
has been received rather differently 
from that in the US. When the Federal 
Reserve moved in February, bond and 
equity markets tumbled. Yesterday 
UK equities dipped only slightly, while 
gilts jumped by nearly a point at the 
long end. Of course, the markets have 
had plenty of tima to position them- 
selves for a rise in base rates. But the 
reaction suggests that the UK authori- 
ties may have managed a pre-emptive 
strike which win enhance their anti- 
inflation credibility in the short term. 
That does not n tosn . though, that the y 
have also secured a soft landing. 

Recent data on hnuamg- the retail 
trade and the motor industry suggest 
the consumer side of the recovery may 
have already tapered off But the econ- 
omy is still growing at close to 4 per 
emit, so the output gap is closing. That 
alone mi g ht warrant some monetary 
action, even without yesterday’s evi- 
dence of rising wholesale prices. The 
markets would be deluding them- 
selves, however, if they n»iwig hi that 
one half-point rate rise would be suffi- 
cient to halt this trend. If they wish to 
appear consistent, the authorities 
must tighten policy until the growth 
rate slows. 

1 The implication for equities is not 
encouraging. Ramingn unlikely to 
keep up this year’s cracking pace in 
1996, especially after a further increase 
in taxes. Gilts ought, by contrast, to 
have room to advance. But they 
remain at the mercy of sentiment in 
the international bond market The 
Rank of ’En gland has yet to announce 
an auction for September. It must 
heme that the positive mood will last 
long apniigh to get a conventional sale 
away. Now that base rates are rising, 
it could not sell any more floating rate 
debt without serious loss of face. 

KKR/Borden 

KKR’s $2bn bid for Borden looks like 
a triumph of financial engineering. 
The leveraged buy-out group is not 
only acquiring a pasta-to- wallpaper 
conglomerate which is ripe for a 
break-up. By payi ng with shares in 
RJR Nabisco, KKR has also halved its 
exposure to the tobacco and food man- 
ufacturer. RJR h as no t been the fabu- 
lous investment KKR initially antici- 
pated when it bought it for $26bn in 
1989, mainly because of the cigarette 
price ware launched an Marlboro Fri- 
day. KKR presumably thinks the bulk 
of the gains from restructuring RJR 
have already been achieved - a point 
other shareholders should note. 


FT-SE Index: 3128.8 (<10.5} 


Dafeety ■ 

Sham price retejlv© to tha 
FT-SE.-A All-Share Max . 
120 : =— 



. 1SS2 93 9* . 

Source: FT Gnphits 

Meanwhile, the share swap between 
Borden and RJR is designed to facili- 
tate the transfer of some Borden 
assets to Nabisco. RJR would pay with, 
its $500m worth of Borden shares. Bor 
den could then sell its RJR state and 
use the cash to pay off some of its debt 
mountain. 

The dAai t fhrmg fi has industrial as 
well as financial logic. Borden, in com- 
mon with most food manufacturers, 
has seen its brands devalued as retail- 
ers and consumers have driven harder 
bar gains- The industry is now aiming 
to regain some of its lost bargaining 
power by reshuffling assets and 
concentrating on fewer product areas. 
United Biscuits’ purchase yesterday of 
Dalgety's Dutch snack business is 
annHwr mmpte of the trend. Though 
Borden has few powerful brand 
names, its assets should prove more 
valuable in other companies' 

hands 

Dalgety 

Dalgety is a minn ow in a sea of food 
manufacturing whales, facing the con- 
stant danger that profitable niche 
markets will prove vulnerable to 
assault from larger competitors. It was 
this phenomenon - in the form of 
intensifying competition in the UK 
crisps market - which helped drive 
margins in the group's food division 
down from 112 to 8£ per emit last 
year. Recognising the difficulties, Dal- 
gety yesterday signalled a subtle but 
significant refinement of its strategy. 

It is pinning its hopes on the 
Europe- wide pet foods and food ingre- 
dients markets, two segments of the 
food manufacturing industry where 
Dalgety reckons it can more than hold 


its own against giants such as Mars 
and Unilever. The group will continue 
to defend its share of the crisps and 
sn ac k s market in the UK but will 
wi thdr aw from continental Europe - 
hpncfr the sate of its Dutch business In 
this sector to United Biscuits. 

Whether this is a complete answer 
to the strategic issue is unclear. Pot 
noodles and savoury snacks alone will 
not secure good returns for Golden 
Wonder in the UK over the longer 
term. Ultimately it might make sense 
to dispose of Golden Wonder so as to 
finance mare rapid expansion in pet 
foods and snacks. There are benefits 
in the pipeline from the restructuring 
undertaken by the new management : 
but. until Dalgety takes final shape, 
the main attraction will be its 5J5 per 
cent yield. ^ 

SmithKline/Bayer 

Smith Kline Beecham’s sale Df Ster- 
ling’s north American consumer 
healthcare business to Bayer looks a 
smart move. SB never needed Ster- 
ling's operations to strengthen its US 
over-the-counter businesses. The driv- 
ing logic was to fill geographical gaps 
elsewhere. Yesterday's deal rids the 
company of embarrassing product 
overlap and reduces debt which had 
become sufficiently burdensome to 
worry some investors. The only possi- 
ble fry in the ointment remains an as 
yet unquantified tax charge. 

Whether Bayer has pulled off a mas- 
terstroke is more doubtful. On a 
romantic level, for the first time in 
nearly 80 years, the German company 
enjoys the right to use its own name 
and the Bayer Cross trademark in the 
US. Strategically, the group justifies 
the purchase by arguing it now has 
strong brand names in the three larg- 
est US OTC categories. By 1995, the 
group expects hopes to have critical 
mass, with projected annual OTC sales 
in north America of more than 
groom. 

Bayer can afford the acquisition, 
and has been helped by the strength of 
the D-Mark against the dollar. But the 
question remains whether the deal Is 
good value. The speed with which it 
was concluded, and the poor negotia- 
ting tactic of announcing interest 
within hours of SB’s Sterling acquisi- 
tion, will not have reduced the price. 
At 23 times last year's earnings, the 
business does not look cheap. Bayer 
wfll have to work hard at building 
margins to avoid the criticism that a 
German chemicals company has yet 
again overpaid for assets. 


August 1994 


The State of Bavaria 


has privatised through a series of subsidiary swaps 
its 58.26% holding in 


i *£ 


Mi** ■ ■ ** -* 

ip . i 

I* 


FT WEATHER GUIDE 


Europe today 

A warm air mass over southern and south- 
east Europe will continue to give 
temperatures up to 30C from Italy to Greece 
and Turkey. This warm air will be separated 
from cooler air by an active front from France 
to the Baltic states and Sweden. Southern 
and south-east France win have most of the 
heavy showers, while Intermittent rain will 
linger in Poland. Rain wfll be driven by a 
south-wssterty gale around the centre of low 
pressure. Northern France and the Low 
Countries wfll be dry with sunny spells, as win 

England, where fog patches will persist wen 
into the morning. Meanwhile, significantly 
cooler air will move south on the Iberian 
peninsula. There wifl be heavy showers in 
north-west Spain and in Portugal. 

Five-day forecast 

Rain and showers will cover Denmark, the 
Low countries, most of France and foe Alps. 
Temperatures wfll struggle to reach 15C In 
Brussels, Copenhagen and Paris. Cooler air 
will be drawn into the UK but showers Will be 
limited in England and foe Republic of 
Ireland. Scattered founder showers in central 
Europe will slowly move east towards the 
Balkans. 


TODAY’S TEMPERATURES 


Abu Dhabi 

Aeon 

Aigkns 

AmscnUm 

Altana 

Atlanta 

8. Aires 

B.ham 

Bangkok 

Barcelona 


Maxbrun Being 
Celsius Belfast 
sin 40 Belpade 

cloudy 27 Berlin 

fair 32 Bermuda 

lair IB Bogota 

aw 32 Bombay 

fair 30 Brussels 

fob- 20 Budapest 

Mr 17 CJiagen 

rah 33 Cairo 

fait 27 Cape Town 




i'V'-srta 


k' - / ** ‘ " J* 













• ~ ... A 


I L •• wnnhriJUL CoM front Wind In KPH - J, 

ShUBOan at 12 GMT. Temperatures nodmum for day. Forecasts by Meteo Consult of On Nathartanda 


cloudy 25 
shower 15 
sun 31 
min 19 
shower 31 
shower 21 
rah 29 
fair 18 
shower 29 
fat 16 
sun 34 
shower 17 


Caracas 

Cardiff 

CssafatancB 

Chicago 

Cologne 

Dakar 

Date 

Delhi 

DiM 

DuUn 

Dubrovnik 

Etfinbisgh 


Your frequent flyer program: 
Lufthansa Miles & More. 

Lufthansa 


31 Faro 
17 FtonMut 
24 Omm 

27 Gibraltar 
19 Glasgow 
29 Hamburg 
33 HrisfrM 

28 Hong Kong 
39 KonoMu 
15 fstanbil 

29 Jakarta 
13 Jersey 

Karachi 
Kuwait 
L. A n g ol a s 
Las Palmas 
Lima 
Lisbon 
London 
Urcbourg 
Lyon 
Matttra 


fair 

24 

Madrid 

sin 

23 

Rangoon 

rain 

32 

ahoww 

19 

Majorca 

fat 

29 

Reykjavik 

shower 

9 

thund 

20 

Malta 

sun 

30 

no 

fat 

24 

fair 

26 

Manchester 

fat 

17 

Roma 

sun 

29 

stow 

14 

Manila 

Slower 

31 


fat 

21 

loir 

17 

Mefbowne 

shower 

17 

Seoul 

(at 

24 

thund 

14 

Mexico City 

stowar 

21 

Singapore 

cloudy 

31 

rain 

31 

Miami 

thund 

29 

Stockholm 

show 

15 

far 

32 

Milan 

thund 

24 

Strasbourg 

rein 

18 

8UI 

29 

Montreal 

fat 

23 

Sytfrwy 

fat 

24 

fair 

31 

Moscow 

cloudy 

16 

Tangier 

fair 

23 

shower 

16 

Munich 

stow 

21 

Tel Aviv 

sun 

35 

fat 

33 

Natobl 

fair 

25 

Tokyo 

cloudy 

29 

sun 

43 

Naples 

an 

31 

Toronto 

fallr 

23 

fat 

22 

Nassau 

fat 

31 

Vancouver 

shower 

19 

sun 

27 

New York 

thund 

28 

Venice 

Ur 

26 

daudy 

19 

Nice 

sun 

25 

Viera 

fat 

27 

shower 

20 

Nicosia 

sin 

37 

Warsaw 

Shower 

25 

tat 

18 

Oslo 

tot 

15 

llfnnhfre ■» r, 

vTasmngwn 

fat 

29 

shower 

17 

Paris 

shower 

20 

Wellington 

ahower 

S 

thund 

20 

Perth 

fat 

23 

Winnipeg 

shower 

21 

fat 

25 

Prague 

shswsr 

21 

Zurich 

rein 

18 


Bayemwerk Aktiengesellschaft 


in exchange for a cash equalisation payment and 25.1% of 


VIAG Aktiengesellschaft 


The undersigned advised ike State of Bavaria 
in transaction* 


Lehman Brothers 


7 ' 






J 


) 



23 









\ ana 


\\ 


i .f* 

na*‘ 


f * 

f 


1 Mercedes 

1 Rental 

financial times 

brother. 

rniu da xrrec & aa a dih^tc 

TYPEWRITERS 

Available from only xtn 
£64 per day at your LaJ 
nearest dealer 

LUlVlrAiNI LC3 & IVl/VlvIvt 1 i 

©tre financial hmes wMiTED i »4 Tuesday September 13 1994 

WORD PROCESSORS 
PRINTERS 
COMPUTERS 

FAX 


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IN BRIEF 


Czech fund aims 
to raise $45m 

Oppenheimer & Co, the New York i r mw t tmwnt hony 
end Nikko Securities Interaaftonal are ejected 
nest week to launch an investment fanrt to invest - 
mainly in companies in the Czech Republic. Page 24 

Dfoltal itanloa to mi fears 

Digital Equipment, the troubled US «wipittw man . 
u E actu rer, plans to announce a comprehensive new 
technology strategy within two months. R aims la 
to reassure customers and finanriqi analy sts 
Page 27 

DMcled fiamOy votes on McCain 

Feuding members of the Canadian McCain family 
are due to take important rierfaiiro g «" tha fnh rro pf 
the mnTtinaHnytfff frozen, foodsmaker today. Page 26 

Hoyts sallr cinema ride - 

A consortium led by HaUmann& Friedman Capital 
Partners, a US investment hanMng nrwj, is to buy 
the cinema Interrats of the privately-owned Hoyts 
entertainments company, which baa theatres in . 
Australia, New Zealand and the US. Page 29 

European bankers' face daunting pn wpect- 

The possibility that a move to European Monetary . 
Union (EMU) could cost large European banks at 
least EculOQm (£79 3m) each is the most daunting 
condusian of research carried out by the Ecu Bank- 
ing Association. Page 29 

Cotes Myara denies buy-out hlteh 

Coles Myers, one of Australia's largest retailers, has 
moved quickly in an attempt to qmwh sug gestion* 
that its planned buy-out of the 2L45 per stake in its 
equity currently held by Kmar t, the US stores 
group, was running into sharflhnkW opposition. . 


By Christopher Partus 
h Frankfurt and Danief Oraen 
bi London 

Bays' is to pay film to buy back 
toe right to use: its own brand 
name in the Worth frmVrrican 
xoaxket more than 75 years after 
tliA US government seized «**»d 
=soMf off the German, group's 
local assets duringihe first world 
war. 

The deal was announced yes- 
today, just two weeks-aftear the 
t Bayer name-and-croSs emblem 


Telstra hart s Australian record 

Telstra, the state-owned Australian telecommunica- 
tions group, made a profit of A$L7bn (USSLSbzO in 
the year to end-June, a sharp increase an the 
A$904Bm in the previous 12 months. Page 29 - v- 

Bnrvfon granted now loon facility 

Bardon Group, the UK and US aggregates and ready 
mix concrete company yesterday armounced details 
of a large new loan facility as ft published its first 
profits for 2% years. Page 32 

Stager A FrtacBancter advncu 12% 

Stager & Friedlander, the UK diversi fied merchant 
banking group, reported a 12 per cent increase in 
interim pre-tax profits boosted by significant 
growth in its investment banking operations. 

Page 33/ 

British Polythene announcos prteo rises 

Britiah Polythene Irutostries, Europe’s largest poly- 
thene film prod n^^anro^m d an average 15per 

fieHhtrst doobta to 

Dewhicst Group, theUK s^ipHer clothiDg to 
Marks and Sptmcer, the Mgh street retailer, " 
announced profits bad doubMto-£7m. Page4H.'- 


Compsntes ta this tow, 


Accor. 

Amcor 

American Express 
American Trust . 
A q u— Cu ba n 
Asria 

Aspen ComnamkaSons 

AustProv. N 'papers 

BCP 

BMW 

BPA 

Banco Santander 

Bayer 

Bekaart 

BwJaya 

Btatrace 

Baxes 

British Polythene 

CSHokfcfl 

Candower Inwestmenta 

Cartsberg 

Centre Re 

Coiee Myers 

CredtenstaJt 

Dalgatv 

Detts Air Lines 

Dewhlrat 

Digital. Equkanent 
Donrinfon Mining 
Doweling & Mills 
East Asiatic Company 
Emap 
Ecfultax 

Euro Disney 
HI . 

Fakey; 

Fcxte 

GUO Australia 


23 d«|^iin» - tMib'Sytn)r 
29 Hanson 
23 Heaithcafl • 

33 Haflmann 4 Friedman 
IB Harmte 
18 Hoyt* ’ 

31 IndopackPottamB 
29 KKR 

2s KImberiy-CSark . . 
8 Kmart 
20 LVMH . . 

2s McCain Foods 
23 Mercedes-Benz ' 
2j Meriden 
no Mortvste Moore 
„ McSand & Soot Reecs 
Midland Aaeeta 
Murray European 
SecutfUes 
Oppenheimer & Co 


31 
31 
24 23 
31 


31 

29 


SaatoW & SaatehJ 

»"S3L 

^ " Sedgwick 

® Select Appointments 
** Sfwrpe&Ftehar 
27 Singer & Friedlander 
29 SmKhKUne Baecham 
91 Tetetra 

Thomas Cook 
Trara Union 
UAPT-mtolbik 
LK Safety 
United Biscuits 
33 United Healthcare 
23 Virgin 
29 Wasgo 


» 


27 

31 


/■•Z 7 
33 

V 

29 
-M 
29 
29 
1. 
. 27 
29 
.24 
26 
8 

23 
31 
18 
31 
81 

24 
24 
21 
83 

MB 

23 

83 

31 

31 

31 

33 


33 

33 

33 


29 


Market St a ti s tics 


fAmjRj reports service 
BendunackOwt bonds 
Bond tubra and options 
Bond prices and jriekb 
Conxnxnes prion 
DMdsndB annomced. UK 
SIS corancy rales ' 
Euntocd priced 
Rxad taterast indkes 
FT-A World SxSces Ba 
FTGoHMmsMw Bm 
FtABMA M bond sve 

FT-Se Actuaries Indicea 


36-37 

30 

30 

30 

34 

32 

42 

30 

30 


Foreign exchange . 
EBs prices 
urfe BQutty options 
London share sendee , 
London •«*> options - 

Managed fun* service 
Morey irarkots 
New Inn bond teeuee ■' 
Recent henna. UK - 
Sbort-terni ht irtes 
US htoreet ratee 
Worid Stock Marian 




-42 


■r«. 

,“:v36 

.- V -4S- 


Ocrman group regains brand rights and extends its grasp of PTC drugs market 


Bayer to pay $lbn 

its name 





vf. ^ • • 

Marin Nc*thA*norWa»- -T r -v"- y ■; 


Total eales 


Nona 




Bayer Aspirin. 
Bayer Select, 
MkloL Uanquhri 


S150m 


Hng Hanitii, Eastman. Kodak's 
Sver the-counter drugs unit to 
.the'- Anglo-American group 
rsMfeKltne Beedagh for *L93bn. 


The' sale includes OTC prod- 
uds soch as Bayer Mldol 

amflgertes mwi the mttw of Mag- 
nesia indigestion treatment 
These will fill out Bayer’s exist- 
ing US range built aronnd Alka- 
Seltzer and One-A-Day and 
PlmtstuBes vitamins. 


Mr Manfred Schneider, Bayer’s 
chairman, said the group’s US 
and Canadian activities would 
switch to the Bayer name as soon 
as possible after completion of 
the transaction, which is subject 
to regulatory approval. 

The purchase met two of his 
prime objectives: regaining the 
brand rights and extending 
Bayer’s reach in the world’s larg- 
est OTC medicine market 

“This is a memorable day in 
our corporate hirtory." he added. 

The hoard's analysis of the 
assets and purchase price did not 
reveal evidence of a substantial 

pT Orn f rrrn fhr thw ri ghts 

The sale brings SmithKline 
Beecham down from, the world’s 
biggest OTC drugs co m p any , to 
n Timber three. 

The sale proceeds wQl help cut 
SmlthKMne Beecham's debt to 
less than £&5hn. The company 
recently reported plans to cut 
debt through disposal of “non- 

|Mm |C aw piMHimn* 


“This is a non-strategJc asset in 
that we already had the critical 
mass in the US,” it said. 

Additions from Sterling, which 
last year earned Eastman Update 
$43m on sales of $366m, will 
almost double Bayer’s over-the- 
counter turnover In the US. 

The branded aspirin business 
alone is estimated to generate 
H50m sales a year in the US, and 
was recently valued by analysts 
at about gSOOm. In the late 1890s, 
Bayer produced tire first high 
quality acetylsalicylic acid and 
regtstmed aspirin as a trademark 
in Germany fmd the US. 

Bayer has focused its US drugs 
interests in its Miles subsidiary, 
which last year had sales of 
$&5bn. 

Bayer originally mndu an offer 
for the whole of Sterling; bud was 
outbid by SmithKline in an auc- 
tion. 

.After the sale, Bayer said it 
would seek “clarification" from. 
Sterling's new owners of its 


. * ‘ AftaSjajbarFftik Neo-Synephrin*. 8160m 

2?f- . . Bayer Sated 

ij:i #£‘ rlr - rw,*r- , Cough and Cold, 

'■St? ■ A** . Broncfwkl 



intentions towards the trade 
mark rights and parts of the 
operating business. 

Bajrer extended its readi in the 
US market earlier this year when 
it paid |310m for a minority stake 
in Scbein Pharmaceutical, a pri- 


vately-owned generic drug spe- 
cialist Generics - out-of-patent 
products - are one of the fastest 
growing segments in pharmaceu- 
tical markets. 

Lex, Page 22 
Observer, Page 21 



in 

Austrian 


Air Ian Rodger in Zurich ' ' . 

CS ' Holding, the' intemetfonal 
rinanrial services group built 
around Credit Siiisse, bra with- 
dnrwn its offer to acquire A 
?Tf!filoUiystalBB*3 “ 



Chief price changes yesterday 


BMW 

MdVarBanz 
Hgbmm 
Pomdte 
VEVf 

NEWYOMCm 


sro 

B10 

824. 

870 

am 


fimCnHMBh 

wotevn 


cawpaar 

MM. 

UEUC0 

PAiram 


13K * 

46 * 
iaa '* 

■5W - 
30 - 

mu - 


25* 

BH 

« 

1« 

1U 

1 


CrFoncUr 

BF 

OMHm ' ' ' ■ 
Docteda Rwe* 

TOKYO Ptart 
MnmsM. . 




bank. 

-CS;s<dd. it had become increnis- 

its-of its proposal ofcjfectfrelym 
Austria. 

“Other aspects, pr e d om i na nt l y 
of 'S' pdfitical ’ nature^ have ^re- 
vafled, w ;Tt said., !■. * 'i? 

Apu tria is ta . the w™mip of 
national alecfion campaign 
the future of Creditanstalt has 
become a divisive issue between 
the Conservative and Social 
Democratic parties, the govern- 
ing coeHtto n partners. . 

OS’s withdrawal comes only a. 
week after the Austrian govern- 
ment engaged the New York 
investment bank JP. Morgan to 
review Mds for part crif tts.70 per 
cent voting stake in Creditan- 
stalt. . 

JS. Morgan is a main rival ai 
First Boston, a subsidiary of CS, 
In global Investment banking 
markets. 

Mr Ferdinand Larina, the Aus- 
trian finance minister who bad 
initially been a strong supporter 
of the CS bid, has recently 
appeared to distance himself 
from it, falling in line with other 
Soda] Democratic party leaders 
who ray that . Austrian influence 
in Creditanstalt must be main- 
tained.' 

Mr Larina said he regretted 
the. withdrawal of c C5 Tbe Swiss 
-jeroup ’ g offer wuuldi have pro- 
yisSe ri _ a sensible^ international 
solutioS for Creditanstalt. But 
GSTs move was understandable 

AnrtriM^Comsv^tire'foro^ he 
-said. • ' . .. 

_jThis opposition crystallised in 
Jeme r when Wr Rainer Gut, CS 
phi H imgii, trid an i Austrian bosf- 
Vness t magarine that CS' would 
•foflke ultimately to’ own fOO per 

forest at Gnadifa a riafc.^ 

The CS widbdrawal leaves the 
tdtttre of Creditanstalt uncer- 
>farin. A large consortium framed 
■mahdy from Austrian Canserva- 
ttve^buslnras dtrdes to counter 
^^"bid last spring could fall 
now that toe threat of a 
takeover has disap- 


Managing director quits after dispute over future of luxury hotels group 

Board forces 


Shepard to check 
out of Savoy 



■HiA-.-fliiiiiiei* mtirjgter 
us “ w^i^Vtqidd be left with no concrete 
to ^A.'lbids to coimidcr. AIHans, the 
in ^ W humxaiice group, has 

- - j an^fhterrat but would 

face similar opposition 

faced by CS if it made a 


375 

.4260 



Cand Pin 828 ♦ 13 
How York prtOM it «» 


MoUnt 
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years tbe govern- 



^^lwa&mieilake in Credf- 
* .Dtps eariy 1990s, the 
poorpeifminance dnmpM 
fitoA putmtial strategic 
inves- 

'fonL-l 

x yeiu,,-sn 

bW^fhmr ffle Raiffiaisen 
l^o^of tUrd tanking co-opera- 
As jES-fcmnded, arid 1 refused 
^nt^tfer frinn an investment 
tanking -syndicate to - place the 
shares widely in international 
equity markets 
Flag still flies. Page 24 



By Mobael Skaplnkar 
in London — 

Mr Giles Shepard yesterday 
resigned as managing director of 
the Savpy Hotel group, saying he 
had'been asked to go because he 
•d^t^'^ise witjh proposals for- 
' management cf jthe 
company. -His resignation 1 was 
widriy expected, after rows tail 
weta with Six Anthony *” 

Savoy chairman, Sir ! 
Kchardson, a Savoy dfrectofr. 

- ' Tta board meets today ffls- 

cuss^a replacement Mr Ramon 
general manager of Lou- 
Four Seasons hotel, has 
Approached to take file job. 
Shepard said yesterday: 
“Over the past few months, dis- 
cussions have taken place 
between our major shareholders 
regarding the future of the com- 
pany, Its management and its 
organisation. I have not found 
myself ahle to concur with what 
is proposed. Axxxndingly, I have 
been asked to resign. 


' “Because of my love for the 
Savoy company and my immense 
admiration, fbr the staff, who 
have supported me so loyally 
during my IS years as managing 
director, and to avoid further 
djnflagihg: -speculation in the 
prera,-Z have derided to- follow 
this sourse of bethm." '■ 

Mr ShepariL-has-been under 
pressure for some time, largely 
because of the poor financial per- 
formance of the group, which last 
year halved its dividend^ 

IBs position became unsustain- 
able last week whrai he issued a 
statement an behalf of the Savoy 
board criticising a non-executive 
director for leaking a document 
to the press. The statement, 
which was not authorised by the 
board, was seen as a criticism of 
Sir who denied lftaMng 

the document Sir Mirinwi was 
s up ported by Sir Anthony.' 

The Savoy board is expected to 
announce today that Sir 
Anthony, who wishes to retire, is 
to be succeeded by Sir EwenFer- 



Shepard: resignation was widely expected 


Trevor HianphriM 


gusson, chairman of Cdufts, the 
private bank, and a Savoy direc- 
tor since July last year. 

Directors caution, however, 
that Sir Even’s appointment can- 
not be taken for granted; previ- 
ous widely-tipped candidates for 
the chairmanship have not won 
board approval- If he is approved, 
his appointment is unlikely to be 
temporary. Reports that Sir Ewen 
will be succeeded by a chalrman- 
sbip rotating between Savoy loy- 


alists and representatives of the 
Forte group have been dismissed 
by board members. The board 
meeting is expected to give Forte, 
which has 68 per cent of Savoy’s 
shares but only 42 per cent of the 
vote, some form of participation 
In management However, plans 
to merge Forte luxury hotels 
with the Savoy’s properties - 
which indude the Savoy, Oar- 
idge’s and the Connaught - are 
bdieved to have been dropped. 


American 
Express 
seeks more 
takeovers 

By Richard Water* in New Yoric 


American Express will continue 
to seek large acquisitions in the 
business travel market following 
the acqtosttton at parts of the 
Thomas Cook travel agency busi- 
ness for 8375m. 

“There are obviously large 
acquisition candidates out 
there," said Mr Roger Ballon, 
head of American Express’s 
Travel Services group. “We’re 
not ruling [anyone] out We 
remain committed to building 
the business worldwide.” 

Yesterday’s deal brings Ameri- 
can Express Thomas Cook’s 
international business travel 
agency operations, which had 
revenues of $l.lbn last year, and 
the combined business and lei- 
sure travel agency operations in 
the US, with revenues of HAhn. 

Most of the US revenues come 
from tbe business side, Mr Bal- 
lon said. The US business is 
bring acquired from Mr David 
Paresky, who has operated it 
under licence from Thomas 
Cook. 

The acquisition in the US wifi 
add to American Express's lead- 
ing market share there, while 
rise non-US Thomas Cook oper- 
ations give it a strong market 
position, particularly In Canada, 
Australia, Germany and the UK. 

Although Mr Ballou would not 
comment on which countries 
American. Express would look to 
next for acquisitimis, tire finan- 
cial services group is widely 
expected to target Asia. 

American Express added that 
it had begun to contact Thomas 
Cook's biggest corporate custom- 
ers over the weekend and. lmd 
received a positive response to 
the acquisition from all the com- 
panies it had spoken to. 

It is almost certain to lose the 
account of rival plastic card com- 
pany MasterCard, however. 

Thomas Cook will retain all 
rights to its brand name and will 
invest its share of tire 8375m in 
expanding its existing travellers 
cheque, foreign exchange and lei- 
sure travel businesses, aceordtog 
to Mr Christopher Rodrigues, the 
company's chief executive. 

Mr Rodrigues refused to com- 
ment on whether Thomas Cook 
would re-enter the US leisure 
travel market through another 
licensing agreement citing com- 
mercial confidentiality. - 

As a subsidiary of West- 
dentsche Landesbank, the Ger- 
man bank, it Is not allowed 
under US laws to operate a 
travel business in the country 

directly. 


Forte expected to 
beat Accor for 
Meridien hotels 


By John Hdkfing In Parts and 
Mfchael SkapMcor In London 

Forte, - . tJK hotels and 

restaurants group, is favoured to 
win ifo fon^-rmmfng w i th 

Accor ofFrance to gain control of 
Meridian, 'the luxury hotels 
owned by Air France. The state- 
owned "airEne is expected to 
maim axr' announcement on 
Wednesday. 

Hotel industry observers in 
London, hqWever, were caotion- 




mg 

Optimism on - Forte’s behalf. They 
point put tta^Accoa: baa used its 
pdfrtteal inSuahce in France to 
postpone a victory in the 



Accor lobbyists are behaved to 
have stepped up their activities 
-oyer- the.padt few days, arguing 
£Br the chain to remain in French 
hands. “We know thsy’re going 
JUke fory. H one. UK industry 
■'obsavers^id yesterday. 
s Air France declined to com- 
ment. on the rale of a controlling 
stake in' Meridien, ahead of 
Wednesday’s board meeting. Bat 
nffiriwig confirmed that a deci- 
sion had been taken and that ft 
had been based an the site of tbe 
relative offer& Forte’e offer val- 
ues the hotel chain chain at 
; FFrL9hn ($86Qm) while Accor's, 
offer is thought to value fite com- 
pany at F^tljha. 

Beth- offers represent an 
increase, of pFrlOOm since tbe 
bids were first 1 tabled in April. A 
deaatononthe .teds was delayed, 
after Accor lobbied the centre- 
right government of- French 
prime minister. Mr Edouard Bal- 
ladur. V : 

. Finance, for Accor's offer is 
being provided by Prince Al-Wal- 
eed Bin Talaal of Saudi Arabia. It 
is understood that the eventual 


winner's. Md would be reduced if 
Meridien. lost a significant num- 
ber of hotel pmuagement con- 
tracts as a result of a change of 
ownership. ^ 

Air France, winch is seeking to 
reduce its debt burden as part at 
a rescue package, is expected to 
sell the majority of its 57 per cent 
stake, ur.thg hotels chain. The 
European Commission has 
ordered the completion of the 
sale by file end of this year as a 
conation for a French state capi- 
tal injection of FFrtObn for the 

Inafimalting ntrftno 

Meri (Hen’s -management ha« 
ecsiK^t lts preference for the 
hid from Forte: But some unions 
at the hotel chain are opposed to 
the sale and ate planning a.dem- 
onstratibn at Air France today in 
protest at the dj^vb. 

The Meridien . group, which 
comprises BShotela, fen into loss 
last year. The conqany blamed 
the losses, which totalled 
FFrSS.Tm. on. difficult market 
conditions, particularly in its 
French operations. 


75 YEARS 

OF THE 

LONDON GOLD FIXING 

On Monday izrh September 1994 at 10.30 a.m. 
the price of gold was fixed at 

£250.801 /US$391.50 per fine ounce 

at New Court, St. Swithin’s Lane 
London EC4P 4DU 

b y 

Deutsche Bank Sharps PixJey 
Midland Bank pic 
Republic Mase Bank Limited 
N M Rothschild & Sons Limited 
Standard Chartered Bank - The Mocatta Group 

Seventy-five years after the first fixing on 
Friday 12th September 1919 at New Court 
when the price was fixed at 

£4 18s 9d per fine ounce 


f 

\ 







24 


FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


★ 

INTERNATIONAL COMPANIES AND FINANCE 


Oppenheimer and Nikko 
Securities in Czech deal 


Flag still flies over Austrian bank 

CS did not expect such a strong nationalistic reaction, writes Ian Rodger 


By Vincent Boland In Prague 

Oppenheimer & Co, the New 
York investment bank, and 
Nikko Securities International 
are expected next week to 
launch an investment fund to 
invest mainly in companies in 
the Czech Republic. 

The Czech Republic Fund, 
which will be listed on the 
New York Stock Exchange and 
the Osaka Securities 
Exchange, plans to raise at 
least $45nt, though the final 
figure could be higher depend- 
ing on investor demand. 

The fund will have a mini- 
mum of 66 per cent of its assets 


Hermes, one of France's 
leading luxury goods groups, 
yesterday announced a 56 per 
cent increase in interim net 
profits to FFri&lm ($15.87m) in 
the first six months of 1994 
from FFr54. 6m in the same 
period of last year. 

The news or healthy first- 
half profits growth from Her- 
mfes, which last year ended 
decades of family dominance 
by floating on the French sec- 
ondary market, continues the 
positive trend in the luxury 
goods sector. 


invested in Czech securities, 
with the balance in other cen- 
tral European countries, 
including Austria, Slovakia, 
-Hungary and Poland, The 
objective is long-term capital 
appreciation. 

Shares in the fund, priced at 
$15 each, are expected to be 
offered to investors on Septem- 
ber 20 in the US, Japan and 
internationally. 

Quest for Value Advisors 
and Advantage Advisers, both 
part of Oppenheimer. have 
been appointed investment 
adviser and investment man- 
ager respectively to the fund. 
The fund’s regional adviser is 


The industry was hit by the 
economic recession of the early 
1990s but has staged a sharp 
resurgence since last autumn. 

LVMH, another famous 
name in French luxury goods, 
last week reported strong prof- 
its growth of 35 per cent to 
FFrl-26bn during the first half 
of this year. 

The only negative note 
among the large luxury groups 
was struck on Friday by 
Asprey, the London-based busi- 
ness specialising in super-rich 
clients, which issued a profits 
warning because customers 
have spent less. 


HAI Foods berattmg, a subsid- 
iary of Bank Austria Invest- 
ment Bank. 

The Czech Republic is the 
main focus of investment 
funds targeted at emerging 
central European markets. 
Last week, the Robert Fleming- 
managed Czech and Slovak 
Investment Corporation said it 
was raising up to S2Sm dollars 
in additional capital for invest- 
ment mainly in Czech securi- 
ties. 

The country is the only post- 
communist country to win an 
investment grade rating from 
Moody’s and Standard & 
Poor's. 


Hermes, which has a broader 
customer base at the upper end 
of the luxury market, was rela- 
tively resilient to the recession. 

It has reflected the indus- 
try^ recent recovery by mus- 
tering a higher rate of profits 
growth in the first half. 

Sales rose 243 per cent to 
FFri^3bn during the interim 
period from FFrl.23bn at the 
same time last year. Operating 
profits increased 47.8 per cent 
to FFr22 0m from FFrl48.8m. 
The group said it anticipated 
continued growth in sales and 
profits for the full financial 
year. 


Swire buys 
holding in 
Carlsberg 
HK brewery 

By HB?ry Barnes 
in Copenhagen 

Swire Pacific, the Hong Kong 
conglomerate, has acquired a 
3921 per cent stake In Carls- 
berg Brewery Hong Song, for- 
merly a joint v entur e between 
Carlsberg. the Danish brewery 
gronp, mad the East Asiatic 
Company, the Danish-based 
trading group with interests in 
file Asia-Pacific region. 

The Hong Kong brewer has 
also signed a memorandum of 
understanding to acquire a 99 
per cent share In Hnizhou 
Brewing Company, In China's 
Guangdong province. 

“The new agreements, and 
not least the co-operation with 
the Swire Group, will contrib- 
ute to our prospects of contin- 
ued growth, especially in 
China,” said Mr Pool Svan- 
holm, Carisberg’s chief execu- 
tive. 

“Hie China potential is con- 
siderable, hot it is also a very 
demanding task which ini- 
tially requires quite substan- 
tial investments, inter alia in 
marketing and distribution. 
Satisfactory levels of profit- 
ability can hardly be expected 
in the immediate future, ** he 
added. 

The East Asiatic Company, 
which is restructuring after 
suffering heavy losses in 
recent years, wUl reduce its 
half share in the Hong Kong 
brewery to 20 per cent, with 
Carlsberg owning 40.8 per cent 
and Swire 39.2 per cent 

The financial details of this 
deal and the acquisition of 
Hnixhon Brewery were not 
released. 

The Carlsberg parent has 
turnover of about DKrlGbn 
(3250m) and beer soles total 
about 27m hectolitres, of 
which 22m are sold outside 
Denmark. 

Production by the Hong 
Kong brewery is about 48m lit- 
res. sold mainly in Hong Kong 
and Singapore, with Carlsberg 
claiming an 18 per cent share 
of both these markets. 

The Huizhou Brewery, 
which was founded by the 
Australian Bond Gronp and 
has been bought from Tomson 
Group, listed in Hong Kong, 
has production capacity of 
about 60m litres. 


T he leading trend in 
banking may be globali- 
sation, bat nationalistic 
sentiment still counts for a lot, 
even in advanced industria- 
lised countries. 

That is probably the main 
message from the aborted 
attempt by CS Holding, the 
Internationa] financial services 
group built around Credit Sui- 
sse, to take over Creditanstalt 
Austria's second largest bank. 

The Swiss knew they were 
sticking their noses into a 
political quagmire when they 
ventured into Austria, but did 
not expect such a strong 
nationalistic reaction. 

The tone was set in mid-May 
shortly after Mr Rainer Gut, 
CS rhalrman, ha d marte known 
that the Swiss group was inter- 
ested in a large part of the 
Austrian government's 70 per 
cent voting stake in the hank. 

“We would be the only lead- 
ing commercial bank in the 

developed world that would be 
controlled from abroad." 
moaned Mr Guido Schmidt- 
Chiari, chief executive of Cre- 
ditanstalt. In response. Mr Gut 
could only point to the Hong- 
kong and Shanghai Bank’s con- 
trol of Midland Bank of the 
UK. 

In the subsequent three 
months, no one in Austria or 
anywhere else has made any 
serious criticism of the com- 
mercial logic of CS taking over 
Creditanstalt. Mr Gut said CS 


By Roderick Oram, 

Consumer Industries Editor 

Lower UK crisp prices and 
over-supply in continental pigs 
held Dalgety, the UK food and 
agribusiness group, to a 7 per 
cent rise in pre-tax profits to 
£120.1m (518K2m) for the year 
to June 30. 

Without these setbacks, oper- 
ating profits from continuing 
operations would have risen 
about 10 per cent, Mr Richard 
Clothier, chief executive, said. 
They fell 4 per cent to £124Am. 
although acquisitions contrib- 
uted a further £9.6m to leave 
the group modestly ahead. 

With both markets expected 
to show tentative signs of 
recovery this year, however, 
Dalgety raised its full-year div- 


would have maintained the 
bank's Aostrian identity and It 
would have brought better 
access to global financial 
markets. 

However, even at the highest 
levels of Austria’s business 
community, the idea of Credi- 
tanstalt. the bank that 
fjnanpwt the industrial devel- 
opment of the Austro-Hungar- 
ian empire, being taken over 
by a foreigner, stuck in the 
throat When Mr Gut said CS 
wanted ul tima tely to control 
100 per cent of Creditanstalt, 
Mrs Maria Schaumayer. presi- 
dent of the Austrian National 
Bank, declared solemnly: “Cre- 
ditanstalt most Dy under the 
Austrian and not the Swiss 
flag." A week later, an unlikely 
ramVir n flfinn of Austrian, Ger- 
man and Italian banks and 
companies put together a 
counter-bid. 

The Austrians do resent the 
Swiss, finding it difficult to 
accept that their Alpine neigh- 
bours, so similar in many 
ways, are so much more suc- 
cessful in international busi- 
ness. But Austrian bankers 
admit that a bid from a big UK 
or German bank would have 
had the same reception. 

Initially, this nati onalis tic 
response was camouflaged by 
the workings of partisan poli- 
tics in Austrian banking. 
Byaiigp the country ha< long 
been run by a coalition of Con- 
servatives and Social Demo- 


idend by 3 per cent to 2I.L5p a 
share and said it would seek 
more acquisitions in continen- 
tal Europe. It is focusing on 
food ingredients and pet foods 
in continental Europe while 
concentrating its consumer 
foods efforts on the UK, where 
it has strong brands such as 
Golden Wonder Crisps. 

In line with that strategy it 
said yesterday was selling its 
Dutch savoury snack business 
to United Biscuits for calm 

The UK crisp market eqjoyed 
volume growth over the past 
year but wholesale prices have 
fallen by at least 5 per cent, 
analysts estimate. Supermar- 
kets have exploited excess 
capacity, persuading manu- 
facturers to produce own- 
label snacks at low prices. 


crats, the leading financial 
institutions of each tendency 
share in government and gov- 
ernment-influenced business. 

Creditanstalt is the flag 
bearer for Austria’s Conserva- 
tive party banks. But if it were 
sold to CS. it would be out of 
the loop, and most of the gov- 
ernment’s largesse could be 
directed to arch-rival Bank 
Austria, the Socialists’ bank. 
Therefore, the initial opposi- 
tion to the CS bid came from 
Conservatives. 

A lthough it was aware 
of this possibility, CS 
argued privately that 
the government could not con- 
sistently resist putting busi- 
ness Creditanstalt’s way if, 
under CS direction, it made 
increasingly competitive and 
attractive offers. It was also 
widely thought that Mr Larina, 
who was Initially enthusiastic 
in bis support for the CS bid. 
shared this view. Indeed, he 
probably saw it as a way to 
begin depoliticising the bank- 
ing sector. 

Nationalistic currents soon 
infected the Socialist party as 
welL la late June. Mr Helmut 
Zilk, the mayor of Vienna, 
said: “Any other solution 
would be better than CS”. 

Mr Larina, who originally 
said he would make a decision 
before summer, announced in 
July that he would appoint a 
consultant to review the bids. 


Despite the pressures, Dalge- 
ty’s Golden Wonder products 
increased their market share to 
18 per cent Further cost cuts 
was the key to improving prof- 
itability, Mr Clothier said. 

Operating profits from foods 
fell 13 per cent to £57.4m 
despite good performances 
from sauces and Spillers pet 
foods. The latter was boosted 
by the acquisition of Paragon 
from British Petroleum. 

Agribusiness operating prof- 
its rose 8 per cent to £34 ^m. 
An tnrimnl feed acquisition and 
a 24 per cent increase in US 
sales by Dalgety ’s Pig Improve- 
ment Company offset pig prob- 
lems in Europe. 

Food ingredients lifted oper- 
ating profits by 49 per cent to 
£57.4m due to improved flour 


It was widely understood 
that this meant nothing would 
be decided until after national 
elections due in October. But 
supporters of the CS cause 
took comfort from the thought 
that the Conservatives would 
likely lose a lot of ground in 
the election, making It easier 
for the Social Democrats to sell 
Creditanstalt to CS. 

Then last month. Mr Kurt 
Heindl, the powerful trade 
spokesman for the Social Dem- 
ocrats, said the government 
must maintain a golden share 
or some other means of domes- 
tic control over Creditanstalt 
More - recently, Mr Viktor 
Klima, the Socialist transport 
minister, said it was important 
to have privatised banks con- 
trolled within Austria. 

Mr Larina, suddenly alone, 
began to backtrack, saying two 
weeks ago that an Austrian 
Influence in the bank had to be 
guaranteed. Then, a month 
later than planned, he 
appointed a consultant to 
assess the bids. 

CS said yesterday the 
appointment of J.P. Morgan did 
not have much to do with its 
decision. “We always knew 
someone would be appointed, 
and it pretty well had to be a 
competitor CS said. 

CS said the group had no 
regrets about making clear Its 
desire ultimately to buy 100 
per cent of Creditanstalt “It 


advance 


milling and acquisitions. 

Food distribution in the US 
reported a 15 per cent increase 
in operating profits to £16.4m. 

Group turnover rose 11 per 
cent to £499bn, with acquisi- 
tions contributing four per- 
centage points of the growth. 
Pre-tax profit of £120.1m was 
struck after a £2.8m charge for 
the settlement of insurance 
claims. The 1992-93 figure of 
£112 ,2m included a £9m provi- 
sion for the same reason. 
Including the charges, earn- 
ings per share were 36.7p 
against 35.7p. 

Acquisitions totalling £S5m 
pushed up net debt to £127m 
from £49m and gearing to 33 
per cent from 12 per cent. 

Lex, Page 22,- 
Sale to UB. Page 33 



It will look at how economic recovery is bringing new opportunities for development and 
investment in Commercial Property In the West End of London. 

It will reach a worldwide audience of a million decision making readers in 160 countries. 
To receive an editorial synopsis, and details of advertisement rates please contact: 

Carol Haney 

Tol: +44 71 873 4188 Fax: +44 71 873 3088 The financial Tfcnes. One SouOmarfs Bridge. London SE1 9HL- 

FT Surveys 


Hermes rises 56% to FFr85m 

By Alice Rawsthom in Paris 


was honest, it said. 


Dalgety held to 7% pre-tax 


These securities have nor bean registered undar the Securities Act at W33 and may nor be attend or goH In tto United States except 
' in accordance mth the resale restrictions appSca&e thereto. These securities having been previously 

sold, this announcement appears as a matter of record only. 


Fondo de Titulizacion Hipotecaria 
Hipotebansa III 

(a mortgage securitisation fund established under the laws of Spain 
in accordance wifft Law 19/1 992 of 7th July . 1992 ) 


Ptas 43,875,000,000 

Class A Floating Rate Mortgage Securitisation Bonds 
due September 2005 


Ptas 1,125,000,000 

Class B Floating Rate Mortgage Securitisation Bonds 
due September 2005 


Transaction Coordinator 

Banco Santander 

International Coordinator 

Goldman Sachs International 


International Underwriters 


Goldman Sachs International 


CS First Boston 


June 1594 


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MHK OF SCOTLAND 

BASE RATE 


Bank of Scotland announces 
that with effect from 
Monday 12th September 1994 
its Base Rate has been 
increased from 
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5.75% per annum. 


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BASE 

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26 


FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


NOTICE TO CUSTOMERS 

NEW 

INTEREST 

RATE 

With effect from 
12th September 1994 
Base Rate has been increased 
from 5.25% to 5.75% p.a. 




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Head Office: 1 Aldermanbury Square, London EC2 V 7SB 
Tel 071 280 7500 - Telex 885951 


INTERNATIONAL COMPANIES AND FINANCE 


Echenique 
steps down 
as chief of 
Santander 


Banco Santander, die Spanish 
bank, has accepted the resig- 
nation of Mr Rodrigo Echeni- 
qne, the chief executive, as 
part of wider management 
changes at the bank, AFX 
reports from Madrid. 

The bank said Mr Ecbeni- 
qne, who also headed its bro- 
kerage arm Banco Santander 

de NegOOOS, would re main on 
the bank’s board. It offered no 
reason for his resignation. 

Santander said Ms Ana Pat- 
ricia Botin will replace Mr 
Echenique as chief executive 
of its brokerage arm and wfil 
also become a general director 
of the bank. It did not refer to 
the vacant post of chief execu- 
tive. 

The bank has named Mr 
Juan Rodriguez Indarte as its 
director responsible for 
finance, which includes man- 
agement of the group’s trea- 
sury, capital markets and 
investment fund operations. 

Dealers said the changes at 
the bank’s treasury and capi- 
tal markets were widely expec- 
ted after these divisions posted 
large first-half losses. 

Santander said it had 
appointed Mr Matias Rodri- 
guez Indarte as its second 
vice-president, responsible for 
retail banking, hnman 
resources and planning. 

Mr Casto de la Mora Mata 
has been appointed director 
responsible for retail h»nirin g 
division, while Mr Jose 
Antonio Villasante del Cerro 
will replace him as head of 
Santander’s Madrid 
operations. 


Time Warner in 
cable venture 

Time Warner Cable, part of 
Time Warner, the US enter- 
tainment group, has signed an 
agreement with Advance Pub- 
lications and Newbouse Broad- 
casting to create a new joint 
venture cable operation. Reu- 
ter reports from New York. 

The venture, called Time 
Warner Entertainment- 
Advance/Newhonse, will 
enlarge existing cable cl listers 
already owned by the three 
partners in North Carolina, 
Florida and New York. 


Divided family votes on the future of McCain <* 


By Bernard Simon in Toronto 

Sparks are certain to fly today 
at a shareholders meeting of 
McCain Foods, at which mem- 
bers of New Brunswick's feud- 
ing McCain family are due to 
take important decisions on 
the future of the multina tional 
frozen foods maker. 

Family members are expec- 
ted to vote on a proposal to 
oust Mr Wallace McCain as 
joint chief executive, leaving 
his older brother Harrison as 
sole chief executive pending 
the appointment of an outsider 
to head the company. The two 
brothers would continue as 
non-executive chairman and 
deputy chairman. 


Wallace has strongly resisted 
the move. He has proposed 
that the McCain family should 
instead spin off part of the 
company to the public, and 
that he and Harrison should 
step down at the same time. 

Wallace yesterday asked a 
New Brunswick court to 
endorse his strategy. 

Although McCain is a pri- 
vate company, members of the 
family have increasingly 
vented their anger through 
public court documents, press 
releases and leaked letters. 

Wallace alleged in an affida- 
vit submitted to yesterday's 
court hearing that none of the 
second-generation family mem- 
bers who comprise the board of 


McCain Foods holding com- 
pany has "the character, abil- 
ity, business experience, judg- 
ment or acumen to direct and 
manage fits) affairs.’* 

He alleged that McCain's 
extensive UK and European 
activities, which are under 
Harrison’s control, are. per- 
forming poorly, compared to 
the North American and Aus- 
tralasian operations, which are 
under his own control. 

According to the affidavit, 
the European businesses suf- 
fered a loss in July “for the 
first tim» in many years". 

One leaked document has 
revealed that McCain posted 
profits of CS&iJim (US$81. 8m) 
last year on worldwide sales of 


C$2.7bn. But Mr Harrison 
McCain said in a memo to 
employees last week that "all 
the shareholders, except Wal- 
lace's family, think that Wal- 
lace and I . . . should make 
way for a new, independent 
CEO who will run the com- 
pany professionally and 
well . . . When that it is done. 
I believe we will have much 
more peace and quiet.’* 
Wallace, Harrison and their 
respective families each own 
one third of McCain Foods, 
with the remaining third split 
between the children of their 
two deceased brothers. One 
issue that has arisen in the 
search for an outside chief 
executive is whether the new- 


comer will be willing to keep 
McCain's head office in the pic- 
turesque hamlet of Florencev- 
ille. New Brunswick, where 
Harrison and Wallace McCain 
built their first potato process- 
ing plant in 1956. 

Harrison McCain stressed 
the importance of finding the 
best candidates for the job, 
“not just the ones who agree 
with restrictions imposed on 
them beforehand". However, 
he indicated that his opposi- 
tion to taking the company 
public was partly based on a 
fear that control might eventu- 
ally pass to faraway institu- 
tional shareholders with little 
interest in maintaining the 
links with Florence viile. 


Blocked bank bid leaves bruises all round 

Few emerge with credit from BCP’s unsuccessful attempt to win BPA, says Peter Wise 


N o one has emerged 
from the battle for 
Banco Portugu&s do 
Atlintico with a convincing 
victory. Banco Comercial Por- 
tugu&s, whose hostile bid for 
Portugal's second largest bank 
has been vetoed by the govern- 
ment, is the most prominent 
loser. 

But little glory has attached 
to the other main forces in the 
straggle. 

BCP, which has earned a rep- 
utation for almost flawless 
management since it was 
founded in 1985, will suffer for 
its political misjudgement. 

The government has sullied 
its pro-market credentials. 
BPA’s management is under 
fire for lacking direction and 
the soundness of the relation- 
ship between core shareholders 
and the bank has been called 
into question. 

As for the securities 
exchange commission (CMVM). 
it has been exposed as slow- 
moving and hampered by 
bureaucratic regulations. 

Portugal's capital markets 
will not benefit from the badly- 
needed boost expected from 
BCP’s Esl32bn ($838m) offer for 
40 per cent of BPA. 

In addition, traders fear the 
international image of the Lis- 
bon market may have been 
damaged by the six-week pro- 
cess that culminated with a 
government derision to block 
the bid. 

BPA shareholders have been 
the first to suffer. Shares fell to 


BCP 

Share pries (Escudo) 
3,000 b - 



2.200 


2.000 


Souce; D uLia Oegn 


1994 


E 52.260 at the close yesterday, 
the first day of trading since 
they were suspended by the 
CMVM on August 10- After 
BCP announced Its offer of 
Es3.000 a share on July 26, the 
shares had climbed 31.8 per 
cent to Es2.6SQ before they 
were suspended out of concern 
that a disorderly market could 
develop. BCP shares also 
closed at ES2J260 yesterday, 
down L74 points from Friday. 

Lisbon dealers said the 
CMVM’s long suspension of 
BPA shares had prevented 
small shareholders from taking 
advantage of their first oppor- 
tunity for making gains since 
the bank began to be priva- 
tised in 1990. They fear the bid 
has shown Portugal’s capital 
markets to be burdened with 
an overly bureaucratic regula- 
tory framework that could 
deter foreign investors. 


BCP was putting on a brave 
face yesterday. Mr Jorge Jar- 
dim Gonpalves, chairman, said 
the bank's determination to 
expand remained unaltered. 
But it is not clear where he 
will look next 

The government decision Has 
left BCP, Portugal’s fifth larg- 
est bank s till str aining at the 
lwash Unable to build a market 
share consonant with its 
strong capital accumulation 
through organic growth alone, 
it has been frying to expand by 
acquisition. But the finance 
ministry has so for blocked its 
every move. 

In January, the government 
rejected BCP’s bid for Banco 
Pinto e Sotto Mayor, the sixth- 
ranked bank, as too low. A sec- 
ond attempt to privatise BPSM 
will be made later this year. 
But Mr Jardim Goopalves said 
yesterday BCP was no longer 
interested. 

BCP control of BPA would 
have increased its market 
share from 9.5 per cent to 24 
per cent in a single blow. BCP 
will now have to resign itself 
to more gradual expansion, 
either by redirecting its sights 
on smaller takeover targets or 
by starting a new banking 
operation, its eighth, from 
scratch. 

The expansion envisaged by 
BCP is of the kind often pro- 
moted by the centre-right gov- 
ernment of prime minister 
Anfbal Cavaco Silva, who regu- 
larly expresses support for the 
building of strong Portuguese 


BPA 

Share price (Escudo) 
2.900 


2.600 Ir 



1,800 1 


1994 


Sowco: FT GrapfrttB 

companies able to compete at a 
European level 

The government’s decision 
that a BCP takeover of BPA 
could destabilise the financial 
system has drawn strong criti- 
cism from a majority of Lisbon 
analysts and opposition par- 
ties. They say the veto is an 
unwelcome interference in the 
free operation of the market 
and a brake on the capacity of 
Portuguese hanks to gain criti- 
cal mass. 

The government's other 
main argument is that BCP's 
planned acquisition would 
have perturbed the privatisa- 
tion strategy mapped out for 
BPA. The state still owns 24.5 
per cent. BPA's core sharehold- 
ers. a group of 13 Portuguese 
companies that owns 28.7 per 
cent, say the government has 
made an unwritten commit- 
ment to keep than in control 


after the final stage of privati- 
sation. for which no date has 
been set. 

Praise may be due to the 
government for keeping faith 
with the core shareholders and 
sticking to a pledge to disperse 
BPA's capital widely among £ 
small investors. But BCP's bid - 

has indicated the uncertainties 
to which the protracted privati- 
sation of BPA and other hank* 
has exposed Portugal's finan- 
cial system. Rival bids from 
BCP and BPA's main share- 
holders for the remaining state 
holding would also have 
almost certainly increased the 
value of the stake. 

BPA’s management has the 
most reasons to toast the gov- 
ernment decision. It has sur- 
vived - but far from 
unscathed. BCP’s offer has 
shown the management team 
of Mr Jodo Oliveira, chairman, 
to have been slow in imple- 
menting a strategic restructur- 
ing of the bank. 

BCP supporters claim the 
core shareholders tolerated rel- 
atively passive management in 
return for favourable treat- 
ment Whether or not this is 
true, the core shareholders will 
now press hard for more 
aggressive management. They 
are expected to nominate eight 
non-executive baud members 
at an extraordinary meeting on 
October 6. when the board will 
be expanded from seven to 15 
members. The core sharehold- 
ers are not currently repre- 
sented. . 


BASE RATE 


UovdLs Baulk: 

With effect from 

Monday 12th September 1994 



Coutts & Co 


Lloyds Bank Pic has increased 

have increased 

their Base Rate 


its Base Race from 525 per cent 
to 5.75 per cent p.a. with effect 
from Monday 12 September 1994. 

from 5.25% to 5.75% 



per annum. 


The change in Base Rate will also be applied from 
the same dace by Lloyds Private Banking Limited. 



|®1 Lloyds 

1 ifr I Bank 

440 Strand. London WC2R OQS 


THE THOROUGHBRED BANK. 


Uofds Bosk Pic, 71 Lombard Street; Loudon ECJP 3BS. 


Base Rate 


With effect from close of business on 

12th September 1994 

Base Rate is increased from 

5.25% to 5.75% 


All facilities (Including regulated consumer 
credit agreements) with a rate of interest 
linked to Yorkshire Bank Base Rate 
will be varied accordingly. 


m 


Yorkshire Bank 

.ISStt - Hold Office: 20 Merrtan Way, Leeds LS2 8NZ 


Bank of Ireland 
Base Rate 


THE WORLD’S BEST 
PERFORMING 
OFFSHORE FUNDS 


Bank of Ireland 
announces that with 
effect from close of business 
on 12th September 1994 
its Base Rate is increased from 
5.2 5% to 5.7 5% 



Bank of Ireland 


Area Office, 34 High Street, Slough, Berkshire SL1 ISO 



FOR INFORMATION ON OUR FUND 
CALL YOUR PRIVATE BANK OR: 

OPPORTUNITY FUND 

PHONE (5521) 532-1000 



FAX 


WHEN IT COMES TO INVESTMENTS 
IT IS NOT WISE TO MAKE PERFORMANCE 
THE SOLE CONSIDERATION. 


“unleveraged 


OPPORTUNITY FUND 







FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


27 


INTERNATIONAL COMPANIES AND FINANCE 


Digital seeks to ease fears over its future 


Sy Alan Cane In Barcelona 

Digital Equipment, the 
troubled US computer manu- 
facturer, plans to announce a 
comprehensive new technology 
strategy within two months. 

The aim is to reassure cus- 
tomers and financ ia l analysts 
concerned about the group's 
future in the light of four con- 
secutive years of losses. 

For the fiscal year to end- 
June 1994, the company 
reported net losses of $2.i6bn 
after restructuring charges, 
against a fiscal 1993 loss of 
£25 lm, and revenues of 813.4m, 
down 6 per cent on 1993. 

The plan will complement 
the restructuring- strategy 
put In place earlier this year 
by Mr Robert Palmer, chief 
executive, which is expect- 
ed to lead to some 20,000 job 
losses, reducing the workforce 


to less than 60.000 people. 

Mr Enrico Pesatori, head of 
the computer systems division 
which is the largest part of 
Digital’s operations, said that 
the new strategy would be 
made public by the middle of 
November. 

The chief element is expec- 
ted to centre on Digital’s new 
technology, a family of micro- 
processors called Alpha, gener- 
ally recognised as one of the 
world's most powerful micro- 
processors. Digital has tied its 
future largely to the success of 
Alpha, but so far the chip has 
failed to dominate the market 
in the way the company had 
expected. 

Alpha is based on reduced 
instruction set computing 
(Rise) technology and com- 
petes with similar devices from 
IBM, Sun Microsystems and 
Silicon Graphics, as well as 


with microprocessors sold by 
Intel, the leading semiconduc- 
tor manufacturer. 

Digital's top management 
agrees that the next two years 
will . he critical for Alpha, 
which they accept has proved 
to be ahead of its time. Their 
worry is that their lead with 
Alpha will be lost as Intel 
improves its Clsc processors. 

Last week Digital unveiled 
the latest Alpha processor, the 
first capable of carrying out 
lba instructions a second and 
up to five times faster than 
competing microprocessors. 

Critics argue that the com- 
pany has been rash to place so 
much reliance on a single tech- 
nology. Mr Pesatori said, how- 
ever, that sales of Alpha tech- 
nology reached Si bn last year 
and were growing at a rate of 
190 per cent a year. 

Acceptance of Alpha in the 


market remains the main prob- 
lem. Digital's recent decision 
to sell its stake in Olivetti has 
been attributed partly to the 
Italian company's failure to 
sell more Alpha-based systems. 

Mr Pesatori said the compa- 
ny's investment In Alpha 
designs would carry it through 
to the first years of the next 
century white its investment in 
manufacturing facilities for the 
chip could be defrayed by alli- 
ances with other manufactur- 
ers anxious to make use of the 
latest process technology. 

He said there bad been a sig- 
nificant Improvement In Digi- 
tal's financial performance. 
Revenues for the current quar- 
ter were ahead of the recovery 
plan and be expected to break 
even by the end of the year. 
The company would be profit- 
able by the end of the second 
quarter next year. 



Enrico Pesatori: expects to 
break even by year-end 


Bekaert 
posts sharp 
advance at 
six months 

By Emma Tucker hi Brussels 

Consolidated profits at 
Bekaert, the Belgian wire and 
steel cord producer, leapt to 
BFr5.1bn (£157m) In the first 
six months of the year, com- 
pared with BFr95lm in the 
same period a year ago. 

The result was inflated by a 
capital gain of BFr3.7bn from 
the sale of 12.1m shares in 
BRLA -Bridgestone Metalpha 
Corporation, formerly BSB. 
Without this, consolidated 
profits were BFrl. ibn, 48 per 
cent up over the same period 
in 1993. 

Bekaert said the rise, exclu- 
ding the capital gain, was 
partly due to improved eco- 
nomic conditions - particu- 
larly in the US - but more to 
“the continued internal efforts 
started In previous years", 
particularly the group’s total 
quality management pro- 
gramme. 

Consolidated turnover 
increased by 1 ZS per cent to 
BFr31.4bn in the period, while 
cash flow reached BFT7.2bn, 
including the capital gain 
from the share sale. Without 
it, cash flow was BFr&58bn. 

Combined sales volume for 
the consolidated and associ- 
ated companies increased by 
7 3 per cent compared with the 
first half of 1993, but growth 
came entirely from the consol- 
idated companies which lifted 
sales by 10.5 per cent. 

Sales volume of associated 
companies was flat due to poor 
economic conditions In some 
Latin American countries, in 
particular Brazil and Vene- 
zuela. The contribution of the 
associated companies fell 25 
per cent 

Capital spending for the 
consolidated companies was 
BFr2bn In the first half of the 
year, little changed from the 
BFrlBbn in the same period of 
1993. 

An interim dividend before 
withholding tax of BFrl34.68 
per share will be paid. For the 
ordinary shares this repre- 
sents a net dividend of BFrlOO 
per share. 


Euro Disney’s Saudi rescuer 
may enlarge 9.65% holding 


By Alice Rawsthorn In Paris 

Prince Al-Waleed, the Saudi 
financier who earlier this year 
rode to the rescue of the ailing 
Euro Disney leisure group in 
its emergency financial 
restructuring, has emerged 
with a 9.65 per cent stake In 
the company. 

The prince Is expected to 
augment this ho lding , which is 
owned by United Saudi Com- 
mercial Bank (USCB). one of 
his main investment vehicles, 
by triggering agreements to 
buy additional Euro Disney 
shares from Walt Disney, its 
US parent, and Caisse des 
D6p6ts et Consignations, the 
state-controlled French finan- 
cial institution. 


Prince Al-Waleed, a member 
of the Saudi royal family and 
one of the Middle East's most 
aggressive Investors, stunned 
the stock market in early June 
by unveiling plans to acquire 
up to 24.63 per cent of Euro 
Disney. 

He undertook to buy any 
shar es left on the market after 
the FFrfibn (Sl.lbn) rights 
Issue which was a vital compo- 
nent of the restructuring. 

Ironically, the prince's 
arrival boosted investor confi- 
dence and the rights issue was 
more heavily subscribed than 
many observers had expected. 
As a result. Prince Al-Waieed 
is likely to raise his stake 
through his agreements to buy 
additional shares from Walt 


Disney and the Caisse. 

He can acquire up to 5.22 per 
cent of Euro Disney from the 
Caisse at the rights Issue price 
of FFr10.00 per share, and is 
also able to buy more shares 
from Walt Disney, to take the 
USCB stake up to Its 24.63 per 
cent ceiling. 

Euro Disney is struggling to 
improve its performance, and 
there has been speculation that 
attendance levels at the EuroD- 
isneyland theme park have 
been poor in the current finan- 
cial year. The company is 
implementing a new marketing 
strategy by packaging itself as 
part of the Paris tourist scene. 
One concept Is to market itself 
as Disneyland Paris, rather 
than EuroDisueyland. 


United Healthcare purchase 


By Richard Waters 
In New York 

United Healthcare, one of the 
largest managed healthcare 
companies in the US, 
announced a 5520m cash deal 
yesterday, the latest in a series 
of acquisitions aimed at 
expanding into new markets 
across the country. 

United has agreed to buy 
GenCare Health Systems, 
which operates in St Louis, 
Missouri, with revenues last 
year of 5197 m. 

The purchase is being made 
with part of the *2Jbn United 
received from the sale of Us 
pharmacy benefit management 


company. Diversified Pharma- 
ceutical Services, to Smith- 
Kline Beecham earlier this 
year. 

The company made dear at 
the time that it planned to 
use the money to continue buy- 
ing regional healthcare compa- 
nies. 

At the end of June, United 
had $2.6bn of cash and securi- 
ties, giving it the resources to 
accelerate its acquisition pro- 
gramme. Earlier this year it 
made two all-stock acquisi- 
tions, worth around 5900m at 
yesterday’s market price. 

GenCare operates managed 
healthcare programmes in St 
Louis, including health mainte- 


nance organisations, with 
194,000 members; preferred pro- 
vider organisations, with 98,000 
members; a workers* compen- 
sation plan covering 41,000 peo- 
ple; and a dental programme 
with 31,400. 

The consolidation of the 
managed care industry is rap- 
idly throwing up a small num- 
ber of big companies with the 
power to negotiate lower prices 
from hospital groups, drugs 
companies and other health- 
care providers. 

In early trading GenCare’s 
shares jumped by £6% on the 
news, to £45%, white United 
Healthcare’s shares slipped by 
*% to £53%. 


US paper 
group may 
raise $700m 
in sell-off 

By Laurie Morse in Chicago 

Kimberly-Clark, the US paper 
group best known for its 
branded tissue products, plans 
to dispose of Us pulp and news- 
print businesses. Analysts said 
the potential sate or spin-off of 
the commodity operations 
could raise as much as $7Q0m. 

The company Is evaluating 
the options for divesting a pulp 
mill in Terrace Bay, Ontario, 
and its pulp and newsprint 
mill In Coosa Pines, Alabama. 
It said it was considering both 
a sale and an Initial public 
stock offering. 

Kimberly-Clark's pulp and 
paper operations supply the 
company with its raw paper 
materials. They have been 
sluggish performers during a 
prolonged recession in pulp 
and paper prices, but the pulp 
and newsprint markets have 
seen a sharp price rebound. 

The sale of the Coosa and 
Terrace Bay operations would 
enable Kimberly-Clark to focus 
on global expansion of its con- 
sumer products businesses. It 
is a strong competitor to Proc- 
ter & Gamble for branded per- 
sonal paper products in the US, 
but has a smaller overseas 
presence. 

Last year the company 
formed new subsidiaries or 
joint ventures to manufacture 
and market consumer products 
in Argentina, Venezuela, 
China, Indonesia, India and the 
Middle East 


TAKE PRECISE AIM 


By /v-u.v.w roo'K uecruitmes t 
ADVV.RT 1SE.MEST IS THE FlSASCIAL 
Times you are reach iso the world's 

n US I SEES C OMM US I TV. 


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TARGET 
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For information on advertising 
in this section please call: 


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..—Gareth -Jones on +44 71 873 3779 


This announcement appears as a matter of record only. 


THE BANK OF NEW YORK 

is pleased to announce 
the establishment of a 


SPONSORED AMERICAN DEPOSITARY 
RECEIPT (ADR) FACILITY' 


for 


AS Tit A 

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THE 

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For further information regarding The Bank of New Yorks ADR Services, 
please contact Kenneth A. Lopian (21Z) 815-2084 in New York or Gary 
Pfcck (852) 840-9806 in Hong Kong. 


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Fac 071-931 7114 

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Union SW1WQK 


a P j15% 

off electricity 

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eiCGO p«r r+cntfi or ';:i .VccSnoily. 
v.+y rot r:ng ‘cr n qi:c!<»? 

021 423 30 IS 

Powerline 


THE HSBC CHINA 
FUND LIMITED 

Unaudited NAV 
per share as at 
31st August, 1994 
US$1.82 


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In Asia, Latin 


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For a copy of MIC’s Interim report, please contact the company at 73 Route do 
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FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


2S 


Deals Done In The First 6 Months Of 1994 

Further Proof That ABN AMRO Delivers. 


i whs master tftteaedaah'. 

Mym* 


seroses* matter cf rt omil 

AmOH 


Jmm* 


EURQFIMR 

European Company for (he Financing 
of Railroad Rolling Stock 

NLG 400,000,000 
7% Bonds 1994 due 2001 

Lead Managed by 
ABN AMRO Bonk N.V. 


Thao 


mr* at a mattered record atfy. 


Koninklijke Volker Stevin N.V. 

NLC 75,000,000 

554% Convertible Subordinated Bonds 
1994 doe 2002 

Lead Managed by 
ABN AMRO Bonk N.V. 


gfXIlf intematfonaf 
flf Wta finance Inc. 

Can. $150,000,000 
854% Guaranteed Notes due 1999 
nflcondkianaUy and ir re roeo biy gaaranteed by 

IWif KrwBtetnteil 

f%f W mrWhPdmtmdbau 

Lead Managed by 
ABN AMRO Bonk NV. 


Nt mUmt 

KREDETBANK INTERH ATIONAL FINANCE N-V. 

Can. $150,000,000 
8KK Guaranteed Bonds 1994 due 1999 
ancondWonallyaad Urevncsirtygaarn t eed by 

(Q) KREDIETBANK 

Lead Managed by 
ABN AMRO Bank N.V. 


tear 


i a* iwwVmanfa^K 

JmtIW 


Thao 


ran at a matltraf record only. 


Thao 


TATtLyLE 




tat a ataOrraf retard oafy. 

UarW* 


Tate & Lyle International Finance PLC 

£100,000,000 

8% Guaranteed Bonds due 1999 

nne enrfi tioas H y and lrrei>o u« bty guaranteed by 

Tate & Lyle PLC 

joim Lead Managed by 
Hnare Govett Gocnorate Finance Limited 
(amtekfiaiyorABNAMROCioap} 


<Mnu 

Unilever N.V. 

NLC 350,000,000 
654% Bonds 1994 due 2004 

Lead Managed by 
ABN AMRO Bank N.V. 


Oce- van der Grinten N.V. 

NLC 150,000,000 

434% Convertible Subordinated Bonds 
1994 doe 2001 

Lend Managed by 

ABN AMRO Bank N.V. 


Thu casooaoexoset u appears at a matter of reeoniarJr. 
tUaa , Aprinsa 


Kingdom of Sweden 
NLG 400,000,000 
5%% Bonds W94 due 1998 


mat a mol trref record oafr 

uqrim 


Koninklijke Gist-Brocades N.V. 

NLC 200,000,000 

434% Convertible Subordinated Bonds 

1994 due 2004 

l*ad Managed by 
ABN AMRO Bank N.V. 


Thao 


a ama mat trr u fnconlonfy. 

— Aprtrm 


Lead Managed by 
ABN AMRO Bank N.V. 


Koninklijke Nederlandsche 
Hoogovena en Staatfobrieken N.V. 
NLC S00, 000,000 

4)4% Convertible Subordinated Bonds 
1994 due 2001 

Joint Lead Managed by 
ABN AMRO Book INLV. 

S-C- Warborg Securities B.V. 


Xralutse 


rarsaeamatlrrof retard anlr. 

Aped 1991 


A 

NBM-Amstelland NV 
NLC 100,000,000 

5)4% Convertible Subordinated Bonds 
1994 due 2002 

Lead Managed by 
ABN AMRO Bank N.V. 


71 wa 
Ate tern 


mat amattrraf retard anfy. 

April m* 


Gasunie 


N.V. Nederlandse Gasunie 
SFr.125.000^00 
4%% Bonds 1994 due 1999 

Lead Managed by 
ABN AMRO Bank (Schweiz) 


t tf retard oafy- 

UarekFm 


GE Capita/ 

General Electric Capital Corporation 
NLC 250,000,000 
5)4% Notes 1994 doe 1997 


Lead Managed by 
ABN AMRO Bank N.V. 


( appears at a matter af record onfy. 

March IW* 


Konmklijke Nedlloyd Groep N.V. 
NLG 499,369,000 

4)4% Convertible Subordinated Bonds 
1994 due 2001 

Joint lead Managed by 
ABN AMRO Bank NY. 

Goldman Sacbulnteraathmal 


Ate tew 


ref retard essfy. 



febntnrtVH 


European Investment Bank 
NLC 300,000,000 
5% Bonds 1994 doe 1999 

Lead Managed by 
ABN AMBO Bank N.V. 


This m vs ata rr ewteru appears ISM a matter yfreeardaisfy. 
NteoUntr __ trhracuy/994 


Republic of Austria 
NLCLOOO, 000,000 
6)4% 30- Year Bonds dne 2024 


Lead Managed by 
ABN AMRO Bonk N-V. 


Tlfr a— s aeeaaa U &pewtarmmattartfMctrdaafyi 

Ntmheem Feb na tryWH 


Rothschilds Continuation Finance 
(CD Limited 
£125,000,000 

9% Perpetual Subordinated Guaranteed Notes 
guaranteed on a subordinated bade by 
Rothschilds Continuation Limited 
Joint Lead Managed by 
Hoare Cored Corporate Finance Limited 
(a subsidiary trf ABN AMRO Croup) 


Thua 
Atetewr 


teeppeteneuamaaartfroaodmsfy. 

Januuy m * 


BARINGS 

BARINGS pic 

£100,000,000 

9)4% Perpetual Subordinated Notes 

Joint Lead Managed by 
Hnare Covet! Corporate Finance Limited 
(a<kbektta^ar ABN AMRO Gnwp) 


Thu armaunement appears asam ae rerafretttrdatdx. 

tew 199* 


Koninklijke PTT Nederland NV 

Offer of138,150,000 Ordinary Shares 
by the State ofThe Netherlands 

Offer Price NLG 49.75 per Share 

Global Coordinator 
ABN AMRO Bank N.V. 


ears at a natter (fret) onlanfy. 

MpfTm 


These 


IIRELLI 


Pirelli Tyre Holding NV. 

Rlgkla bene of 3LQ22JM0 Ordinary Shares of 
NLG M) nominal value each on a one far three 
bade at a price ofNLC T7 JO par Ordinary Share 
with up to 7,117,467 attacked Wazranta 

Lead Managed by 
ABN AMRO Bank N.Y. 


tappeBaatamtatertfrttanlenfy. 

ApsHmt 


KBB 

N.V. Koninklijke Bijenkorf 
BebeerKBB 

1*305^64 Ordinary Shares 


Lead Managed by 
ABN AMRO Bank N.V. 


This a 
Atetear 


naa mattenfnscordanfy. 

April mi 


Thisc 


KLM 

RoiaMatehm 

Royal Dutch Airilnes 
21,275^000 Common Shares 

Joint Clobai Coo r d inat or 
ABN AMRO Bank N.V. MarrlS Lynch & Co. 


Primate Ptaammt 


tears at a ma tt es' c f i aso d c u b . 

Hanhim 


Koninklijke Pakhoed N.V. 


24*00,000 Common Shares 

These securities were privately 
placed by the ttnderagned- 

ABN AMRO Bank N.V. 


7Ura 


natl■W■ , ^l(teo4 , ■ 

Masrhm* 


7 Ana 


tapptmeunmatttrafrttanlrmfy. 

March PPM 


nasamattenf'recardmtb’. 

Jemmtyma 


NV. Verenigd Bezit VNU 


TullowOilplc. 


■ crisp 

N.V. Koninklijke Sphinx 


3,600,000 Common Shares 

CUhJ Coordinator 
ABN AMRO Bank N.V. 

CiiMnum Swte IhI#.mi1«..I 


18400,000 New Ordinary Shares 

Arranged by 

Rteda Corporate Finance Lhnited 
(a eabskUaiy of ABN AMRO Bank) 


1400,000 (Depositary Receipts of) 
Common Shares 

These securities were privately 
placed by the ondeiiagned. 

ABN AMRO Bank N.V. 


trsasaweatttrcfitear d todr. 

Jrrnmt 


7kna 


tappeanataatttttrrafreeordtrtfy- 

OtcffFm 


International Tender for Ike privatisation of 

Puerto de llo 


The undoraigned acted as Financial Adviser* 10 
Cepri-PnertodsDo 

ABN AMRO Bank N.V. 

Prisma loverstatm 61 Fbuueraa SJL 


Telefonica International 
US$1,000,000,000 
Syndicated Short Term Bridge Facility 

Arranged and Underwritten by 
ABN AMRO Bank N.V. 


Ttii an an t nmum tappeonraaoet^ ur ofneerrieesfy. 

AbMtrSM 

Managem eeit-lgwdan buy-out of a parted the 
Industrial Supply dMakn of 

Hoog ^ffiS[S£P B - v - 

wader tbe name of 


Efts*..* 

Arranged by 
Albtf&V. 

(■ nitekHaryar ABN AMRO Bonk) 


That 


areiuamaltrrafreeoedmdy. 

Janaarrim 


Banco Comafi 

US$ 10 , 000,000 

181-Day Eurodollar Certificate of Deposit 


hbmo Arranged by 

ABN AMRO Bank N.V. 



ABN*AMR0 Bank 

































"11.1. 

' * v. 



" 199 , 


FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 * 

intl companies and capital markets 

Europe faces Ecu 100m bank charge 




^Vl. 


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T he possibility that a 
move to European mon- 
etary union (Emu) could 
cost large European hanks at 
least EcolOQm ($82m) each Is- 
the most daunting <*nn/^icinp 
of research carried out by the 
Ecu Banking Association. But 
the cost is only o pe of many 
disruptions faced by hank* 
moving to Emu. 

As ttie study points out the 
effect on banks of moving to 
monetary union Is comparable 
to large scale deregulation. It 
will involve massive tarfy™" 1 
c han ges, eHmmation of some 
markets and the growth of oth- 
ers, and large changes to 
banks* funding methods and 
strategy for European 
operations. . 

Furthermore, banks in the 
core group of Europ ean coun- 
tries that move to monetary 
union by the turn of the cen- 
tury may be in a better posi- 
tion than those outside. Exclu- 
sion from Emu could raise 
funding costs, lower credit rat 
ings and form a large hurdle to 
operating efficiency. 

Given this large list of obsta- 
cles, it appears surprising at 
first that bankers involved hi 
the study . group shmid have 
emphasised their enthusiasm 
for the Idea yesterday. But the 
report concludes that banks 
could gain comparative advan- 
tage by embracing the idea 
quickly and comprehensively. 

A move to monetary union 
could challenge traditional' 
methods of basking in Europe 
in a number of ways: 

• Foreign exchange tr ading 
among different European 
countries will disappear, wip- 


ing out an important source of 
income not only from cash 
markets but also sales of flnanr 
dal deriva t i v e s to ledge cur- 
rency risks.. In thair place will 
be put a larger market for 
exchange of Ecu with dollars 
and yen. 

• Correspondent banking - In 
which banks have partners in 
other countries lay perform pay- 


“big bang” approach in which 
currencies within monetary 
union disappear - perhaps 
over a weekend. If they choose 
to allow a “dual currency" sys- 
tem with local currencies run- 
ning alongside the Ecu for a 
Ump costs would be higher. 

Bankers yesterday pointed 
out that costs of transition 
could vary considerably 


The cost may be only one of many 
disrop^ris caused by a move to 
moneta^m^ writes John Gapper 


.-f - 

- H • 

ment transactions in local cur- 
rency - win be replaced by 
bilateral or multilateral pay- 
ment arrangements in Ecu. 
. This could affect traditional 
profits from fees, and “float" 
income on cash sums. 

• Local money markets, band 
markets and credit markets, 
which are supported by local 
payment and - settlement ser- 
vices will be replaced by an 
Emu-sized market, bound by 
one currency. This will chang e 
the scale at which many hanirs 
.operate, forcings them to rede- 
fine operations. . 

• Retail banks wifi, have to re- 
state hiatm-tra t data on cus- 
tomer accounts/ In Ecu after 
monetary union, as well as 
altering technology and produ- 
cing new transfer for ms and 
cheque books. They wifi also 
have to TnafcB big rhuTtgas to 
comply with alterations in 
clearing systems. 

The transttifm costs will be 
higher if governments avoid, a 


depending on the legislative 
approach. For example, if 
European legislation allows all 
outstanding loans to be re- 
stated in Ecu rather than hoing 
individually re-negotiated, it 
avoids large one-off costs. 

Yet thA hanlre wi thtw mone- 
tary mriffn wiQ at least be *hi» 
to comfort themselves that 
most costs are transitional, 
and that they may be able to 
exert a competitive advantage 
an outsiders after union. The 
most worry in g fete faces banks 
whose currency is excluded 
from the • nrHnti- 

A study of the impact on 
banks in countries outside 
Emu, prepared by Mr Jaun 
More of Banco Bilbao Vizcaya, 
argues that such banks will 
suffer competitive disadvan- 
tage In tacking a stable Ecu 
funding base. This trill com- 
press their margins if they 
tend a riwiiiw spreads to Emn- 
based banks. 

Mr More argued that banks 


foam non-Integra ted countries 
risk being downgraded by 
credit rating agencies because 
they are exposed to. "second 
tier currencies”. They will also 
have to use “massive amounts 
of hard .currency" as an alter- 
native to their, diynantir. cur- 
rency, so raising fotrir costs. ■ 

This miM have considerable 
fmph raH one for large banks in 
countries such as the UK, 
Ireland and Denmark which 
could be left hoftinH fn the ini- 
tial move to monetary union. 
UK banks with large cross- 
border businesses, snch as Nat- 
West and Barclays, could be 
severely affected. 

Mr Olivier Mas, chairman of 
the association, emphasised 
that banks are likely to be 
Impelled to start thinirf ng of 
the Ecu area as their domestic 1 
market. This is likely to lead to 
a re-consd deration of cross- 
border partnerships, particu- 
larly on payment systems. 


A S Mr Man «dri , Tjtnrinri 
is the leading centre 
for Ecu clearing in 
Europe despite the UK govern- 
ment’s attitude to monetary 
union. Yet UK banks could 
fece difficulties in maintaining 
their grip cm Ecu clearing and 
financial markets if they woe 
operating sterling as a dual 
currency. 

This could lead to Emu 
changing the balance of power 
among hankg that want to be 
forces in Europe. Those from 
non-Em u countries would have 
to fight harder against those 
which would gain funding 
advantages, and the backing of 
the hardest currency. ' 

Hoyts sells 
cinema side 
to US-led 
consortium 

By NBdd Toft 
and agencies 

A co ns or tium led by Heiinmim 
& Friedman Capital Partners, 
a US investment banking firm, 
is to buy the cinema i n tere s t s 
i of the privately-owned Hoyts 
entertainments company, 
which ba>c theatres in Austra- 
lia, New Zealand and the US. 

No purchase price for the 
Australian group, owned by 
tiie Melbourne-based Ftnk fam- 
ily, has been' reteal ed, 
although a spokesman for the 
US firm suggested it might be 
as high as A$500m <USS372m). 

The sale supersedes plans to 
float the Hoyts business on the 
stock market These were 
announced in June, when 
Hoyts indicated that it was 
hoping to raise about Ag400m. 
At the time, Mr David Clarice, 
the company's chairman, 
suggested; that the group 
migh t consider e x p a nsion into 
south-east Asia, particularly 
China. South America, the 
Mexican market in particular, 
could also offer new opportu- 
nities, he added. 

In a statement yesterday, 

Hellmann & Friedman indi- 
cated that It supported this, 
assessment: "A well-capital- 
teed Hoyts has e xerting expan- 
sion opportunities to its exist- . 
tag mar ke t s as well as to Asia 
and Latin America,” It said. 

Hoyts claims to be the 10th 
largest US cinema operator, 
with 79 dnemas - mainly an 
the east coast - and 519 
screens. In Australia, it is tire 
third largest operator, taking 
about a quarter of the coun- 
try's box-office receipts. 

The Ftak femfly has owned 
the chain since 1985, and had 
planned to retain a small 
interest in the business. At the 
time of the flotation announce- 
mart, it was said that Hoyts* 
earnings before depredation, 
interest and tax were expected 
to be some A|63m in the 1994 
financial year. 


Telstra turns in record A$1 .7bn 


By Nikki Taft kn Sydney 

Telstra, the state-owned 
Australian telecommunications 
group which is known as Tele- 
com in its own country, made 
a profit of A$i.7bn (US$1 _3bn) 
in the year to end-June, a 
sharp increase on the A$904Sm 
of the previous 12 months, and 
a record for any Australian 
corporation. 

Revenues were 5.6 per cent 
higher at AJ13-4bn. 

Fart of the improvement was. 
due to a reduction in abnormal 
items - down to A$277.4m.fram 
almost A$500m, and a fatt to 
interest charges to A$?48m- 
from A$9ZHn a year ago/jg?^, 

However. Telstra alsohraid 
that earnings before bg^resft 
and tax had increased by 1&2 
per cent to spite of increasing 


-competition as the Australian 

tftlflftTBnwiiiwieaitio ng market is 

opened up and Telstra's 
monopoly dismantled. 

The return on equity, before 
ahnarnuds, was 1&3 per cent, 
*3n fine with other successful 
world telecommunications 
companies”. - 

to spite of the figures, Mr 
Frank Blount. Telstra’s Ameri- 
' can rhipf executive, made clear 
. that he 

to. intensify and indicated that 
the . group - much criticised in 
the past for its poem service 
levels. - had further to go in 
- reaching 'the highest interna- 
tioi^^Stantarrds. ^e are not 


rto roFa nj&ment," he 
.said. yL.yJU-: ?*:• 

Ha declined .io be drawn on 
file debate about the possible 


privatisation of Telstra. 

“It’s a matter for the share- 
• holder,” he noting that 
the federal government has 
said that mrh a move “is not 
on the a ggmfa to the term of 
this government". 

However, Mr Blount said he 
welcomed last week’s final 
break-up of the “PMT" consor- 
tium — the affiance of Telecom, 
Mr Rupert Murdoch and Mr 
Kerry Packer - which was 
formed to pursue pay-TV 
opportunities in Australia. 

This freed Telstra to pursue 
other aHlnnrag, he Indicated. 
“We’re talking to other pro- 
gramming and- .content people 
and services prewaersr We 
have discussions going with at 
two or three parties to Austra- 
lia and same that are not in 
Australia,” he said. 


Coles Myers denies buy-out hitch 


By NDddTatt 

Coles Myers, one of Australia's 
largest retailers, has moved 
q uickly to an attempt to quash 
suggestions that its planned 
buy-out of the 2L45 per stake 
in its equity currently held fay 
Kmart, the US stores group, 
was running into shareholder 
opposition. 

to a statement to the stock 
exchange yesterday. Cotes said 
it had received almost 12,000 
proxies, covering more than 
one-fifth of its shares. It said 
these were overwhelmingly in 
favour of the deal. 


Coles, which is due to release 
its profit figures today,- added 
that “the company's chairman 
and chief- executive officer 
have recently visited many of 
the major i^j^tntkmai share- 
holders - • - and the response to 
the proposed tra n sa c t ion: . .has 
been; consistently and over- 
wh elmlngl j supportive and 
affirmative . 

The dealccmprises a direct 
buy : back and cancellation of 
just under half the. Kmart 
stake, and the possible pur- 
chase of a Kmart subsidiary 
which holds the remaining 
LL45 percent, with the method 


of disposal for these shares yet 
to be decided. A meeting to 
approve the deal has been 
called for September 19. 

Howeyer, Coles’ task of per- 
suading shareholders to back 
the deal has not been made 
Muter fay fls falling shar e price, 
which closed dpwn another 32 
cents at A$&96 yesterday, com- 
pared with the AH55 at which 
the Kmart interests would be 
bought in. 

Conversely, the fact that 
directors and associates own or 
control around 28 per cent of 
the equity could be to Coles' 
advantage. 


APN in A$106m bid for Wesgo 


By Our Sydney Correspondent 

Australian Provincial 
Newspapers (APN), the cha in 
of regional newspapers con- 
trolled by Mr Tony O'Reilly, 
Ok Irish businessman, yester- 
day launched a Af 106m 
(USSTOm) cash bid. for Wesgo, 
the Australian radio company 
which operates stations to 
eastern and South Australia. 

APN had picked up a 148 per 


cent stake to Wesgo on Sun- 
day, following discussions 
between the two companies, 
and Wesgo Immediately recom- 
mended the A$1.90-a -share 
offer when it was announced 
yesterday. 

The radio company had been 
feeing a rival bid from Sun- 
shine Broadcasting Network, 
which valued it at about 
A$90 hl By yesterday after- 
noon, h o wever, Sunshine 


add its own stake to Wesgo to 
APN. 

• Amcor, the Melbourne-based 
packaging, paper and pulp 
group, yesterday announced its 
first move into Indonesia. It 
will take a 55 per cent interest 
in . Indopack Pratama, 
which is owned by Pakerto, a 
privately-owned paper and 
packag in g - co m pany to Indon- 
esia. Financial details were not 
disclosed. 


Dominion Mining reduces loss for year 


Dominion Mining, the Perth-based miner 
which earlier this year saw off a bid from 
Gold Mines of Australia, yesterday 
reported a A$52-7m (US$39 An) loss after 
abnormal^ in the year to end-Jtme, com- 
pared with a deficit of Ajm-lm to the 
previous year, writes Nikki Taft. 

There was a small operating profit 
before abnormal* and tax of A$429m, 
down from A$U5-lm previously. 

Dominion was loss-making in the second 
half, which the company said was due to 
“insufficient operating ma r gins" at the 
Cosmo Howley and Bannockburn gold 
mine s, and high amortisation charges 


here, reflecting short mine lives. 

Die bottom-Hne loss, for the year also 
reflects a A$569m abnormal charge, which 
includes aA$29-3m write-down of gold 
operations and a AfLl&a write-off of capi- 
talisation- exploration exp enditure . 

• GIO Australia, which was privatised by 
tiie New South Wales government and is 
one of Australia’s hu gest general insurers, 
reported. aftertax of A ynaini for 

the year to end-June, iq> by 223 per cod, 
writes ffikfct Tatt. 

The result, howeyer, was aided by 
a reduced tax charge, and operating 
profit before, tax rose more modestly 


from Afo57jjn to A$16&2m. 

• Berjaya, one of Malaysia’s biggest ccm- 
g tomerate s , i n ten ds to sell Its 20-5 per cent 
stake to Star . Publications, publishers of 
The Starj^tipe of Malaysia's leading 
Rnghahrlanguage daily newspapers, writes 
Karan Cooke in Rnafa Lumpur. 

Star PubiicBtians "tan ban a wide range 

Of Tna gagfrtpe , . 

Beijayn said that its stake in Star Pubh- 
cations would be sold for a total of M$66sn 
(US$Z8Am). ’ 

Mr Vincent Tan, head of the Berjaya 
group, has recently launched The Sun, an 
Engiishfeagnage daily, in Malay sia. . 


NOTICE OF NOTEHOLDERS OPTIONAL RKDQffTION^ 
GATICSjU.CF.LA ' 

USS35^0fl,W0,ll» NOTES DUE W5 

NotdwMcia** advised UsU m accoriiace wtti Qwfitioo 5(c) et ibe ibo^e No**, fe Notes 
maj be redeemed at the opdw of lie holder of fto bssrbt poyneauittc&nkg oaSifa 
PccnntHfi- ■ rntaapdoo price of 94.75W of lhdr pifacq«r man. VkpDCttwffibB 

SufaeWowiigi j Bli w wai te of tiie Maty wgfftef 
=n BnmatBred «x?»b* * Ao office of «■? of Um Pijiag Agoott^^iixlow. Kim 
md Co«x»* will become mta pmenKd fcr jajmwn nteta a pcood Of len end five 

yem reaeaiveh ftwa Ihe O jsIoiibI R« taap4on Dae. •faewdse sartoptiomiieioMM 

musi dewai tudi Notes, accoopturfcd by » rmpfetn l form of e kttfa a witb-*nj Psvtiig 
AREBtmntiOMd Wow during ibe period bcffadns^Mi Oaebtr 19M »d emfiag on M 
November 1994. The tom Of Ci=«toa oottea »r obttiiul*: ftyfa* Agent 

IMokim itooW ate the appmpriac ax edvioe wba dodfing wbrtbor m aembe Ac 
option referred wOwt 

DiuqmPirfaa. liawbowg - ' 
lta Barievard KignfeLaito Lmmnbonis 
UmmGumtVnmtCborNwYmk -- MccsaaOseoa^TrunC^Ncv-Ycxt. - 


^ DAEWOO TELECOM 

NOIICE 

To dtc HoUa of iae ontkxadjng 
USD JOJJOOJDOO - 

5.3 percent. Convemble Bonfa Doe 2006 . . 

(rite “Boad» ,c ) . 

of ■■ 

DAEWOO TELECOM LIMITED 

(die “Composy”} 

NOTKI IS HEREBY <HVIN» die boUcnof die Boctbdmpcnujnr ro 
da pamriant gf Ac Tnat Deed ropwiraring Ac. Bond*, die ronvrnuin price 
of the Bonds bubsa adjaned EnaVoo 22.776 so Woo 21.611 
28th July. i99i. . 

Thn M^aRmenc tan ranked 6om die fame rfnew Ana, on wfaidi dx ‘ 
detmb woe docrihed ia tfaeNuiccgim mdK faoodhoUaioa Udijair. 1994. 
September 1994 DAEWOO TELECOM 1TD. 


Thedn SecuritlM bnvn been previously so id. This announcsmnnt appew u • m*u*r of record onry. 
September 1994 

308,843 Shares 

Cementos Lima S.A. 

(a company organized in the Republic of Peru) 

Common Stock 

Global Coordinator 

Bankers Trust International PLC 


BT Securities Corporation 

Baring Securities Inc. 

Bear, Steams & Co. Inc. 

J.P. Morgan Securities Inc. 


TVim* Swcurtbes hove I 


New Issue 
September 1S94 


i previously sold. This armouneemsnt appears as a matter of record only. 


1,759,465 American Depositary Shares 




Chilquinta S.A. 

American Depositary Shares 

Representing 5,278,395 Sharesiof Common Stock 


Global Coordinator 

BT Securities Corporation 

BT Securities Corporation 

Baring Securities Inc. 

Bear, Steams & Co. Inc. 

Kleinwort Benson North America Inc. 


GLOBAL EMERGING MARKETS '94 

The mining Investment Summit 

THE BREWERY, CITY Of LONDON, OCTOBER 5—4, 1994 


riA;« ivuiv 

Ltmtv Mi 

feWWUPM 


October 3rd Exposure to Emerging Markets Through North American Gold 
Prnnram Richard M. Pomboy, Portfolio Manager, Pomboy Asset Management, Inc. 

s hi-fc Horw Emerging Markets Are Changing the World 
Highlights David D. Hale, Chief Economist, Kemper Financial Companies 


New Mining Investment in Zimbabwe 
Dr. EJ.M. Zvobgo, Mines Minister, Zimbabwe 
Tanzania: Prospective Area of E. Africa 
Ll Co. Jakaya Mrisho Kikwete, Minister of 
Water, Energy & Mines, Tanzania 
Experience in Emerging Markets 

Geoffrey Loudin, Chairman, CEO, Niugini Mining 
Platinum Mining in Zimbabwe 

Peter M. Vanderspuy, Chairman, Delta Gold N.L. 


The Potential in African Countries 
Mike Kurtanjek, Credit Lyonnais Securities Ltd. 
The Changing Investment Environment 
Philip S. Martin, Partner & Mining Analyst, 
Gordon Capital Corp. 

Trends in Emerging Markets 
Michael Simon, CPM Group Ltd. 

Rapidly Changing Mining Markets 
David Williamson, David Williamson Assoc. 


Keynote Hem an Alberto Buchi Buc, Former Minister of Finance, Chile; 

Speaker President, The Institute of Freedom & Development 

Development of Natural Resources in the Andean Countries 

Jaime Villalobos Sanjines, National Secretary of Mining in the Republic of Bolivia 
Roque Benavides, President, National Society of Mining and Petroleum (Peru) 

Charles Bruce, Executive Wee President, Min tec (SA.) 

Investment in Latin America presented by Yorkton Securities 

Ian Lamont, Economist; James Crombie, Mining Analyst; David Shaw, Corporate Finance 

Other Corporate Presenters A Sponsors Include: 

Ashanti Goldfields Co. Ltd, Bema Gold Corporation, BHP, For Registration: 

Cambior Inc., Canyon, Delta Gold N.L., International Investment Conferences, Inc. 

Gold Reserve Corp., Golden Star Resources, 9100 South Dadeland Blvd., Ste. 702 

Homestake Mining Co. , Ini’l. Musto Explorations Ltd., Miami. FL USA 33156 

Metall Mining Corp., Mining Journal, Telephone: (305) 670-1963 

Minorco Services (UK) Ltd., MK Gold Co., ’Fm- 670-0071 

Ntugini Mining Co., Sutton Resources, Led., Vengold lac. ' ■ 

♦ Extensive Networking Opportunities ♦ 25 Exhibit Stands ♦ ^ 

♦ Complimentaiy Admission for finanrial Analysts ♦ 




30 


FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


INTERNATIONAL CAPITAL MARKETS 


Gilts rise sharply on news of higher base rates 


By Martin Brice and Antonia 
Sharpe in London and Frank 
McGurty hi New York 

The surprise move by the UK 
chancellor Mr Kenneth Clarke 
to raise UK base rates for the 
first time In almost five years 
prompted a rise of almost one 
point at the long end of the UK 
gilt market yesterday. 

The market had been falling 
on news of a higher than 
expected rise in August factory 
gate prices hut changed tack 
following the news of the half- 
point rise in the base rate to 
5% per cent The change in sen- 
timent caused gilts to outper- 
form other European govern- 
ment bond markets. 

"The gilt market loved it, 
especially given the firm com- 
ments on tax," said Mir Simon 
Briscoe, UK economist at 
S.G. Warburg. '‘There had been 
some uncertainty about policy 
here a nd the market finds this 
very reassuring. I would be 
surprised if the market didn't 
move ahead in the next few 
days." 


Mr John Shepperd at Yam- 
Birin said: “If we continue to 
get tight monetary and tight 
fiscal policy, this will leave the 
gilt market very well placed to 
outperform other European 
bond markets" 

He added, however, that 
there was still the possibility of 
a further interest rate rise at 
the time of the November bud- 
get 

Mr Michael Saunders at Salo- 
mon Brothers said the UK 
economy was likely to con- 
tinue to accelerate, despite the 
rate rise, and forecast that the 
chancellor would Increase 
rates by another SO basis 
points within the next few 
months. “This has strength- 
ened bis position in the mar- 
kets," he said. 

The yield spread between 
gilts and bunds narrowed from 
around 145 basis points on Fri- 
day to about 135 basis points 
yesterday. 

On LifTe*, the December long 
gilt future rose to 100& in late 
trading, up 5 points on the 
day. 


■ The timing of the rise in UK 
base rates caused some ner- 
vousness in continental Euro- 
pean bond mar kets because it 
Mine so hard on the beds of 
Friday's publication of US 
wholesale prices. 

The sharp Increase In the 
August data had revived fears 
that the Federal Resero would 
have to raise rates again soon 
to curb inflation. 

GOVERNMENT ~ 
BONDS 

Most analysts said the UK 
move was another strong sig- 
nal that no further interest 
rate cuts in Europe wore likely. 
“The UK rate rise confirms 
that the Interest rate cycle has 
turned In Europe," said Mr 
Andrew Bevan, international 
bond economist at Goldman 
Sachs. 

Immediately after the UK 
rate rise, the market started 
speculating that Denmark 
would be the next country to 
tighten, which prompted the 


Danish central bank to 
an official denial that it was 
considering such a move. 

Mr Julian Jessop, interna- 
tional economist at Midland 
Global Markets, still believed 
that Germany would cut rates 
by a half-point before the end 
of the year. 

'There is no reason for the 
Bundesbank to raise rates 
until the end of next year." he 
said. He added that there was 
no history of the Bundesbank 
using rate rises as pre-emptive 
Strikes against inflfltinn 

The Bundesbank Is due to 
hold its regular meeting on 
Thursday but Is not expected 
to announce interest rate 
changes. It is also Ukely to 
stick with a fixed-rate repo. 
“The Bundesbank wants to 
give a dear indication that 
things are an hold,” said Mr 
Bevan. 

On liffe, the December bund 
future rose 0.25 points to 8856 
in moderate trading. 

■ US Treasury bond prices 
dipped yesterday morning as 


traders braced themselves for 
today’s inflation data. 

By midday, the benchmark 
80 -year government bond was 
A lower at 97ft, with the yield 
rising to 7.702 per cent At the 
short end, the two-year note 
was down ft at 99ft, yielding 
6.334 per cent 

In the early hours, of trading 
an uneasy calm prevailed as 
dealers squared, up their posi- 
tions before the release of the 
August consumer price index 
this morning. 

Despite a generally negative 
tone, prices on the long end of 
the yield curve started out a 
little firmer, in a corrective 
move that followed Friday's 
huge s ell-aft. 

However, the session was 
dominated by fears of inflation, 
which surfaced last Friday on 
news of a 0.6 per cent jump in 
August producer prices, com- 
pared with expectations of a (M 
per cent rise, and bonds across 
the board soon succumbed to 
the pessimism. 

The market was concerned 
that the CPI would replicate 


the inflationary trend in pro- 
ducer prices. Before the release 
of the PPL a 0.4 per cent gain 
in August consumer prices was 
forecast 

Analysts said it is likely that 
the Intermediate and long- 
dated segments of the maturity 
range win tumble again If the 
figure exceeds that level, 
though a weaker than expected 
result could bring temporary 
relief. 

Any improvement might 
prove short-lived, however. 
The market is facing a barrage 
of economic reports later in the 
week, including data an retail 
sales figures, industrial pro- 
duction and capacity utilisa- 
tion. 

Most observers still believe 
the Federal Reserve will delay 
its next move to tighter credit 
conditions until November, 
despite the bad news on infla- 
tion, but there are signs that 
confidence in that scenario is 
eroding. 

This week’s data should 
either confirm the consensus 
view or undermine it 


World Bank delays global 
offering until next week 


By Graham Bowtey 

The World Bazik has delayed 
its much-anticipated $i.5bn 
global offering until next week 
due to current market volatil- 
ity and holidays in Japan and 
the US, joint lead manager 
UBS said yesterday. 

Syndicate managers were 
expecting the Rank to tap the 
five to lb-year area of the dol- 
lar sector this week. 

“They are looking at the long 
end of the market and with 
current market volatility this 
is an awkward time to do it,” 
said one syndicate manager. 

Strong US producer price fig- 
ures released on Friday have 


increased bond market ner- 
vousness about US consumer 
price data due today, UBS said. 
“With less date next week, we 
will get the focus of the mar- 
ket,” said one UBS official. 

INTERNATIONAL 

BONDS 

Elsewhere in the eurobond 
market, activity remained sub- 
dued, with investors nervous 
following the rise in UK base 
rates and ahead of the key US 
CPI data today. 

The $500m offering by 
Metropolis of Tokyo of 10-year 
eurobonds suffered from weak- 


ness in the dollar sector, syndi- 
cate manag ers said 
“Markets are nervous and 
investors are holding back 
their purchases,” Mid one syn- 
dicate manager. “As a result, 
the offering has suffered a bit” 
The bonds, priced to yield 32 
basis points over US govern- 
ment bonds, were targeted 
mainly at Japanese institu- 
tional investors, lead manager 
IBJ said. 

Syndicate managers 
described the pricing as tight 
the spread widened to 35 basis 
paints after the bonds bad bro- 
ken syndicate. 

“The spread should have 
been wider but most of the 


NEW INTERNATIONAL BOND ISSUES 


Amount 

Coupon 

Price 

Maturity 

Fees 

%nvsd Book fimncf 

Borrower 

US DOLLARS 

m. 

% 


% 

tap 


Metmpoli of Tokyo 

500 

7.875 

96788R 

Oct20D4 

032SR 

+62(7WM-04) IBJ ML 

Abbey National Treasury Ser. 

200 

7.00 

96S5R 

Oa-1997 

0L20R 

- Goldman Sachs ML 

YEN 

West LB Flnanoa Curaco 

lOfan 

425 

10O26R 

0(61999 

Q25R 

IBJ ML 

FHENCH FRANCS 
□readnar Sank Finance Ama. 

2bn 

7.50 

96S0OR 

Oct-1998 

0-2250 

+-18(9 1696-9*9 BNP QapJWda. 

Thernsan-Srandi WL 

ibn 

7.60 

99J75R 

00.1997 

(L24R 

- Sodete GenereMUBS 

D-MARKS 

Munchonar HypcKhekendartcf 

200 

ftt 

100 JM 

Oct-1999 

nan 

DG Bank 

ITALIAN LRE 

France Telecom 

I50bn 

11.40 

101.225 

OCL1S97 

1J3TB 

- Swiss Bank Corp 

FM terms and non-cadafcta urkraa stated. Tt» yMd spread forer ntawani gmansmm bond) at tonch Is st*iptad by ths tad 
manager. tFkndng rots non. R: fixed re-effer price; fees are shown at the tv-affar level 4 Coupon pays 3 mth. Ubor fiat 


paper will dear at the 3435 
level,” said one manager. 

Market sources said the pro- 
ceeds from the offering were 
swapped back into yen. 

France Telecom launched its 
first eurobond outside the 
French and Swiss franc sectors 


with a L150bn issue of three- 
year bonds. 

Lead manager Swiss Bank 
Corporation reported strong 
demand from retail investors 
in the Swiss and Benelux areas 
and some French Institutional 
interest “The lira market is 


currently very retail-driven 
and offers tremendous arbi- 
trage,” said one manager. 

Dresdner Bank launched a 
FFr2bn offering of four-year 
bonds, priced to yield 18 basis 
points over French govern- 
ment bonds. 


Lufthansa shares 
priced at DM160 


By Antorda Sharpe 

Lufthansa, the German 
nat io nal airline, yesterday set 
a subscription price of DM180 
each for its 7.64m new ordinary 
shares, in line with market 
expectations. Lufthansa's 
shares closed at DM200 yester- 
day, up DM3 from Friday. 

The «<i*una will raise around 
DMlJSbn by offering sharehold- 
ers one new share for every 
four held. The new shares will 
be provided with full dividend 
rights for the 1994 business 
year. . 

Last month Lufthansa said it 
expected to make an operating 
profit this year and. confirmed 
earlier suggestions that it 
would resume dividend pay- 
ments for the first time since 
1989. 

The German government 
wjQl not he participating in the 
rights issue, thereby reducing 
its stake in Lufthansa from 
51.4 per cent to about 41 per 
cent 

The 35m. shares which the 
government will not be taking 
up will be sold to investors at 


home and abroad, excluding 
the US, via a syndicate of inter- 
national hanks led by Dresdner 

Rank_ 

If dairumrf fe sufficiently 
buoyant, the government also 
intends to sell 2 . 1 m existing 
shares which would further 
reduce its stake to around 36 
per cent The price of these 
shares will be set on Septem- 
ber 29. They are expected to be 
priced at a small discount to 
the prevailing market price. 

The subscription period for 
the new shares will run from 
September 20 to October 4. As 
a result of the rights issue, the 
airline’s ordinary share capital 
will increase by a nominal 
DM382m to DM1.9bn. 

At the annual meeting in 
July, Lufthansa's shareholders 
authorised the executive board 
to increase the company’s capi- 
tal by a nominal DM51 5m. 

“With the consent of the 
supervisory board, the execu- 
tive board has now made par- 
tial use of this authorisation,” 
Lufthansa said. Another rights 
issue Is expected to take place 
next year. 


Singapore SE relaxes rules 


The Stock Exchange of Singa- 
pore (SES) plans to boost trad- 
ing of foreign currency-denomi- 
nated stocks by allowing over- 
seas brokers to trade the 
shares directly, said finance 
minis ter Richard Hu, Renter 
reports from Singapore. 

The exchange will also give 
priority to regional stockbro- 
kers who want to take an 
equity interest in local firms, 
or who want to setup in Singa- 
pore as an international mem- 
ber of the exchange, Mr Hu 
said at the Asian Securities 
Analysts Council annual con- 
ference. 

Mr Hu told the conference 
the Singapore government 


| WORLD BOND PRICES | 

BENCHMARK GOVERNMENT BONDS 

Bad Day's Weak Month 

Coupon Date Price change YMd ago ago 

Italy 

■ NOTIONAL ITALIAN QOVT. BOND (B7PJ FUTURES 
(UFFEr Lira 200m lOOthe of 100% 

FT-ACTUARIES FIXED INTEREST INDICES 

Price fruHcaa Mon Dayb Fri Accrued 

UK GOta Sep 12 change % Sap 9 Merest 

Xd acf. 
ytd 

—Low coupon y*eW~- - Medkan coupon yield - — F9flh coupcetyMd — 
Sap 12 Sap 9 Yr. ago Sep 12 Sep 9 Yr. ego Sep 12 Sep 8 Yr. ago 


Australia 

9.000 

09AM 

861700 

-6820 

1610 

9.52 

950 

Belgium 

7^50 

04/04 

91 .0100 

+0510 

665 

665 

639 

Cerate * 

6500 

06AM 

84,4000 

+6680 

8.94 

678 

9.07 

Denmark 

7.000 

12AM 

85^200 

-6290 

629 

9JJ1 

852 

France BTAN 

6000 

05/98 

101.6250 

-6130 

7.45 

734 

7.15 

OAT 

&5Q0 

04AM 

862800 

40.110 

608 

756 

7.74 

Germany Bund 

6750 

07/04 

94£800 

+6280 

7J5 

740 

750 

Italy 

6500 

04AM 

79.8900 

*0^80 161 It 

1159 

1150 

Japan No 119 

4000 

06/99 

1064130 

-6170 

3-95 

4.05 

455 


4.100 

12/03 

97.0350 

-6410 

4£8 

459 

4.62 

Naiharianda 

6750 

01/04 

B66200 

-6380 

7.48 

759 

753 

Spain 

6000 

(HAM 

80.7000 

-0.750 

11J37 

11.18 

11.08 

UKGItta 

6000 

08199 

90-00 

-8/32 

653 

637 

643 


6750 

11/04 

88-23 

418732 

674 

659 

683 


9.000 

1QAH 

102-11 

+-18/32 

670 

651 

687 

US Treasury ■ 

7.260 

06AM 

08-20 

-5/32 

7.45 

751 

750 

7.600 

11/24 

B7-17 

-8/32 

7.71 

750 

7.81 

ECU (French Govt) 

6000 

04/04 

B62000 

-0.120 

604 

840 

628 


Open Sett price Change Ugh Low Eat vo) Open Int 
Dee B&S5 08.10 +0.77 9641 9631 33303 64266 

Mar 85.27 +0.77 0 340 

■ ITALIAN GOVT. BOND (BTTF) FUTURES OPTIONS (UFFE) UrjCOOm lOOttts of 100% 


Strike 





- frKlax-finfcad 






Price 

Deo 

Mar 

Dee 

Mar 

8 Up. to G yaare(Z) 

18557 

-611 

18547 

683 

355 

9000 

255 

159 

245 

242 

7 Over 5 years (11) 

17254 

-619 

172.37 

056 

'351 

9680 

258 

148 

259 

Z71 

8 AH stocks (13) 

17253 

-618 

17255 

687 

351 

9700 

2.04 

150 

254 

603 








1 

Up to 5 years 524) 

11673 

-623 

12600 

159 

601 

5yrs 

852 

658 

631 

858 

688 

644 

853 

679 

664 

2 

5-15 years fclj 

13755 

+639 

137.79 

158 

950 

15 yre 

680 

858 

858 

673 

681 

7.11 

857 

9.04 

754 

3 

Over 15 years (9) 

154,18 

+678 

15253 

156 

681 

20 yra 

653 

851 

7.10 

673 

681 

7.18 

851 

858 

756 

4 

irredeemables (B) 

17687 

+698 

17458 

2.70 

683 

hred-t 

659 

688 

758 







5 

All stocks (809 

13677 

+625 

13559 

1.80 

616 



















Inflation 8% — 

— 

— 

— Motion 10* 





Sep 12 Sep 8 Yr. ego 


Sap 12 Sep 8 Yr. ago 


3.81 

aas 


345 

&85 


2JSZ 

3.14 


2.87 

3.68 


2.81 

3*7 


1.77 

2.87 


London etoakio. *N«wYoik irW-diy 
t Orem pKMdrp radliuhbp tre at 135 par cm payable by 
Price* US. UK In 1M, ottm* fa dadmri 

US INTEREST RATES 


YWdK Lee* mwtMtWandKL 


Sousar MMS taanMflbnW 


E«. vet ttt. can 1080 Put* 1342. ftntaue <»V» Open R. C*» 8506 Put* 11032 


Spain 

■ NOTIONAL 8PAM8H BOND FUTURES QAEFF) 


Debenture* and Loam 


B yeetryMd IB year yield aSywrytaM 

Sep 12 Sep 9 Yr. ego Sep 12 Sep 8 Yr. ago Sap 12 Sap 8 Yr. ago 


8 Debs & Loans (75} 127.62 

rimrega pen redampnm yielda m 


+053 127.05 220 

■bom. Coupon Brand* Law. CPR-741%; 


7-84 0.73 8.75 7-88 8*4 SjOS 

MedSw* mv-TWM-. HVjfc 11% end m. t flat yMd. ytd Yev to can. 


aoo 156 &61 8.18 


LuncMUno 

Ona _ 

Pifena nee , Mi Tao menu _ 

Braker ban rata eh TMunmOL. 

FMAndi «. 

FoLlUnh « kmwiOML. - On yew — . 


Treasury BUS and Bond YWde 
<63 Twiner. 


4.74 Three year. 
4.09 FJw year — 
5.17 lfryrar 
5.08 SHmr 


838 

Rin 

7XJS 

743 

770 


Dec 


UK 


Open settprice Chraige Hflh Low Eat. voL Open Int 

86.10 8829 -0.77 8848 85.66 33418 86268 

84.92 84.81 -082 8447 8426 9.6S7 37811 


FT FIXED INTEREST INDICES 

Sep 12 Sep 8 3ep 8 Sap 7 Sep 8 Yrepo Ugh* Lw~ 


GILT EDGED ACTIVITY INDICES 

Sap 9 Sap 8 Sep 7 


Sep B Sep 8 


■ NOTIONAL UK OUT FUTURES flJFFQ* 650.000 32nda Of 100% 


BOND FUTURES AND OPTIONS 
France 

■ NOTIONAL FRENCH BONO FUTURES (MATTF) 



Opan 

Satt prise 

Change 


Law 

Eat vol 

Open Int 

Sap 

100-03 

100-18 

+6-19 

100-21 

99-28 

2402 

23888 

Dee 

99-12 

99-31 

+6-25 

100-08 

98-29 

9Q214 

91718 

MV 


99-11 

+6-25 



0 

0 


■ LONO OUT FUTURES OPTIONS (UFFE3 £50.000 64tha 100% 


Utad era the Wot Wamatavd borate lor v4tdi them la an adeepau moondsy ttwrtwt total prtoee at TJW (an on Septadw tt 
toned BH Ofler Chp. YMd toued BM Offer a*. YWd 


Open Settprice Change High 
Sep 111.94 112.14 +0.12 112J0 

Doc 110.90 11120 *0.14 111.24 

Mar 11024 110.54 +0.14 110.40 

■ LONO TERM FRENCH BOND OPTIONS (MATTF) 


Low Eat voL Open Int 
111.58 106.312 80,605 

110.74 37259 75.098 

11024 72 5,109 


Stoka 

Price 

Dec 

■ CALLS - 

Ms 

Dee 

■ pure 

Mar 

09 

2-40 

3-10 

1-42 

2-82 

100 

263 

2-43 

2-08 

3-21 

lot 

1-35 

2-16 

267 

368 


US. DOLLAR SIRAIQHTS 


StrJke 

Frice 

Oct 

- CALLS — 
Dec 

M*r 

Oct 

— PUTS 
Deo 

111 

050 

1.88 

- 

0.71 

1.83 

112 

043 

151 

- 

150 

607 

113 

616 

053 

- 

. 

675 

11* 

0.05 

o.sa 

- 

- 

- 

115 

0.03 

630 

• 

- 

4.15 


EH. ML HtaL Cede 1635 Pun 053. PiMaua Cfey'a oprai int, Cato 27*86 Puts 25492 


Ecu 

■ eCU BOND FUTURES (WTO) 


EM. to mad, CM* »JSM Putt 29 .8M . Previous day's open Int. Cafe 160338 Put* M&sao. 

Germany 

■ NOTIONAL GERMAN BUND FUTURES (UFFEj* DM2S0.00Q IQOtfa of 100% 

Open Settprice Change High Low Eat voi Open int 
Dec 88.68 89.00 +029 88.10 88.53 107384 144638 

Mar 88.10 8825 +029 8825 8720 33 1058 

■ BUND FUTURES OPTIONS (UFFE) OM2SO.QOO points of 100% 


Open 

8030 

7928 


Settprice Change 
8028 -0.12 

79.74 -0.10 


Htfl 

8032 

78.70 


LOW 

80.00 

7044 


Sep 
Dec 

US 

■ US TREASURY BOND FUTUMS (CBT) $100.000 32nda cf 10016 


Eat voL Open hit 
1.970 4296 

872 5.484 


StrJta 

Pries 

Oct 

Nov 

CALLS — 
Dec 

Mar 

Oct 

Nov 

PUTS — - 
Dec 

Mar 

8000 

053 

Ot>a 

122 

153 

0.53 

0.90 

1-22 

606 

8050 

0-30 

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0.97 

1.11 

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154 

1.47 

256 

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0.1 6 

0.54 

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0.92 

1.1S 

1-54 

1.70 

257 


Sep 

Dee 

Mar 


Open 

100-24 

9927 

99-04 


100-23 


99-04 


Change 

■+4WM 

+ 0-01 

+0-01 


100-26 

99-30 

99-08 


Lew 

100-21 

99-22 

89-02 


Eat. ml Open Int 
24,926 121246 

594.381 300407 

1201 7,796 


Fat to IBM. Cals WK Pub 9511. Prevtaui day's open Wt, CaM 163 730 Puts 177711 


■ NOTIONAL. LONO TERM JAPANESE QOVT. BOND FUTURES 
(UFFE) YIQOm IQOflto of 100% 


■ NOTIONAL MEDIUM TERM GERMAN GOVT. 0OMJ 
tBOBLWJFFQ- OM2SQ500 lOOttw at 100* 

Open Close Change Hgh Low EsL vol 

Open Int 

Open Settprice Change Mgh Low 

NA 

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0 


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COWSITOLE BOMWt Dmnineud h dtota toeao ottto Mated. On prtoi 


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Ccpn-lha mm 
rare tad re tore Awn-Pareareags pwntan of me 




wanted the SES to develop as a 
centre for regional securities 
trading, and these measures 
would increase liquidity as 
well as improve the exchange's 
competitiveness. 

“The SES will allow foreign 
brokers, who are not members 
of the exchange, but which are 
licensed by the MAS [Monetary 
Authority of Singapore], to 
became subscribers to the trad- 
ing terminals provided by the 
SES to deal in stocks quoted in 
foreign currencies,” Mr Hu 
said. 

Foreign brokerages will no 
longer have to put snch trans- 
actions through an SES mem- 
ber broker. 


ii>\ 


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31 








FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


COMPANY NEWS: UK 


^ Shares climb in spite of price increase and warnings of more to come 

British Polythene expands 30% 


fy Caroline Southey 

British Polythene Industries, 
Europe's largest polythene Elm 
producer, announced an aver- 
3&e 15 per cent increase in 
industrial and retail product 
Price s yesterday in the wake of 
raw material price rises. 

Mr Cameron McLatchie. 
chairman and chief executive, 
said the company v^as raising 
sales prices to customers fol- 
lowing a 25 per cent increase 
in polymer prices to over £500 
per tonne in August 

British Polythene increased 
pre-tax profits by 30 per cent 
from £6.61m to vw fiim tn the 
half-year to 30 June. Turnover 
rose by 20 per cent from S96 jBbi 
to £11 Sm with a BiTp contribu- 
tion from acquisitions. Operat- 
ing profits were' ahead' at 
£10_2m (£7.77m> helped by 
£99,000 from acquisitions. 

Fully diluted earnin gs per 
share rose from 12jJ9p to 
1482p. The share price closed 
up 7p at 488p yesterday. 

The raw. material price 
increases reflected general 
upward pressure an prices in 
the world plastics market and 
further increases are hheiy-in 

the near future, VnnTnrtfog a- 10 
per cent rise in October. 

“In the short term these raw 
material cost increases present 
our customers and ourselves 
with pricing problems," he 




ftrro strategy, buying a further 
seven businesses this year 
with total pre-acquisition turn- 
over of £25m. 

Gearing rose from 18 per 
cent last time to 28 per cent 
with net borrowings of £23 m . 

Acq uisitions tnrlndprf Nelson 
Packaging, a specialist carrier 
bag business, the remaining 
UK polythene assets of Nyborg 

Plant and Mp gaftlwi. 

An dividend of4J5p 

(3.75p) was declared. 



CtimenmMtitohariieiCTnmtexIal costs imve increased. 


said. 

However, mfheabsence of 
monthly jrises in polythene 
prices, Mr McLatchie antici- 
pated that 5oaarghas- : would 
begin to improve again once 
prices had settled down. 

In the wiBfHwm term Hie raw 
material prices .would not hove 
a detrimental effect on the 


business, particularly as prices 
were heading “for the level 
where our recycling will start 
to show good returns". The 
company was able to offer 
more competitive prices far its 
recycled material as virgin 
plastic prices rose. 

The directors said British 
Polythene continued its acquis- 


Brltlsh Polythene demon- 
strated it Is a credible business 
yesterday when its shares 
closed up 7p despite its price 
increases and warnings of 
more. It is a credit to the busi- 
ness that the market also 
believes price rises should not 
be regarded as a major prob- 
lem perse. If rises in raw mate- 
rial costs can be passed on effi- 
ciently, fbe possibility remains 
that margins might even 
Improve. Acquisitions have 
binned the company’s results 
but a dearer picture is begin- 
ning to emerge and organic 
growth of 4 to 5 per cent was 
achieved, this time. Forecasts 
put pro fit s between £l7m and 
psg>p next year and wom and 
gfrvm m 1996. The shares are 
trading on a prospective p/e of 
15 and look a safe bet for the 
the medium-term investor. 


Boxes coming to market this month 


By Richard Wotffe 

Boxes, a cardboard packagingproefticer. & 
planning to come to -mmfrgt through a 
placing which is likely to value the com- 
pany at more than tutm. . 

The family-owned company is emeeting 
to raise up to £5m in new'ihoney 'through 
the flotation at the end of this month, in 
coder to fund acquisitions. Baxes is esti- 
mated to have about 200j competitors hi 
the cardboard packaging market 

The Watford-based manufacturer speci- 
alises in the production of printed, folding 
cartons for the pharmaceutical, food "mid 
household markets. 


Mr Talltin Tanyar, chief executive of 

- Boxes, .said: “We believe that a listing on 
the London Stock Exchange, will give 

. Boxes greater ftatibDttyto take advantage 

- of opportunities to develop the group, both 
organically and through the selective 

- acquisition of complementary businesses. 

“The company also expects to benefit 
fr om a higher profile and greats' accep- 
tance by customers as a result of being a 
hated company. 9 

Boxes, which also owns manufacturing 
operations in Great Harwood, near Man- 
chester, and. Burnley, Lancashire, 
" increased its turnover from £15-7m to 
217.2m between 1992 and 1994. 


NEWS DIGEST 


Pre-tax profits increased from £Q.7m to 
£L3m in the same period, as the company 
fn wpflgpd its operating vnarg in from 8.7 
per cent to 12& per cent 
The company, which also owns busi- 
nesses maWng wiim decorations and small 
rigid boxes, has a blue chip customer base 
including Smith. ft Nephew. Beckttt ft Col- 
man and SmithKKne Beecham. 

The flotation will leave the bulk of the 
company in the hands of the family of Mr 
Derek Gee, president of Boxes which cur- 
rently owns 95 per cent of the capitaL The 
remainder is held by Mr Tariyar’s family. 

The issue is sponsored by Samuel Mont- 
agu and the stockbroker is James CapeL 


Scientific 
side behind 
drop atrFE 

4 J Despite aa .improved second 
halt FU Grodp, maker. and dis- 
tributor of footwear and scien- 
tific and medical equipment, 
reported a fan in pre-tax profits 
from £5.2m to £&55m m the 
year ended May 3L 

The result was afto excep- 
tional items of 21.32m 
(£550,000) relating to product' 
recall costs, losses on canceDa- 
tion of a development contract 
and rationalisation costs. 

Turnover edged ahead to 
£83m (£82m) which Mr Manly 
Sumray, the chainxunfr said, 
was despite setbacks tn the sci- 
entific and technical division 
where sales fell to £&.45m 
(Ell.SmX Rationalisation and 
investment programmes were 
continuing in the division 
which reported losses of £L47m 
(£88,000). 

In footwear, sales rose to a 
record £74.6m (£70.6m) 

although operating profits 
slipped to £3.49m (£493m). 

Earnings per share fell from 
22. 7p to I0.9p but the dividend 
is maintained at 14-75p with an 
unchaDgri final of 8.75p. . 

Merivale Moore 

in the black 

Merivale Moore, the comm a r- 
cial property investment cam-' 
puny , ended the year .to June 


80 firmly in the black with a 
pro-tax profit of £LUm 
. The outcome, which com- 
pared with, a toss of £939,000 
last, time, was achieved on 
,to 

exceptional charge of £67,000 

i <£ 2 . 86 m-gan(fe, V , - 

_ 1 Merivale suffered losses in 
both 1982 and. 1993 years, but 
returned -to-^profit in the first 
half of 1994. 

After a tax charge of £289,000 
, f£2.71m refund) earnings per 
share came orixt at 6p (12J)p) 
and the company is retracing 
■ fo the dreidend hst with a pro- 
posed 2p pay-out lor the year. 

Since fbe year end Merivale 
has acquired a £6m portfolio of 
retail properties from Warner 
.' Estate Holdings, part of the 
cdhriderafwm fer -which was 
the issue to Warner of 3.5m 
Merivale shares.- 2CL5 per cent 
of toe enlarged equity. 

Tn addition, 16 commercial 
properties wee acquired ;from 
Sim Life for £L2.4m cash. 

Aspen at £lm after 
all-round growth 

All-round - growth enabled 
Aspen Communications to 
report pre-tax profits , of film 
for the half year -to June 30. 
Profits of 21.29m fast time 
included an exceptional credit 
of£Um. 

Turooyer far the USM-quoted 
provider af printing, media and 
comm up i rattan s and market- 
ing services, advanced far 16 
per cent to £349m (£30 .2m). 
After redundancy costs, opeat- 

~ r - r <•?-- •• -. • 


mg profits amo unted to rt tfim 
(£381JXnX 

Rarning s per share worked 
thTOugh at 48 p (6.6p) and the 
interim dividend is lifted to 

2.1S>;(2p). 

hfrHenryMeakimchahman, 
said ' the directors believed, 
.trading margins were capable 
of doubling over the next two 
years. 

Sharpe & Fisher 
advance to £2.04m 

Recovery in the housing and 
home improvement markets 
helped Sharpe & Fisher, .the 
building supplies company, to 
increase first half protax prof- 
its from £658,000 to £2.04m, 
helped by a £569,000 contribu- 
tion from the sale of invest- 
ment property. 

Turnover for the six months 
to June SO was 27 per cent 
ahead at £3LSra <£249m), with 
acquisitions contributing 
£32,000 (nil) and rental income 
£345,000 (£325/100): .. . 

Earnings per share came out 
ahead at 6.6p GUp) and there is 
an increased interim dividend 
of L7p pL5p). , 

HeatthcaH moves 
ahead to £2.94m 

Healthcall Group continued to 
make progress in the first half 
of 1994 Pre-tax profits cm 
healthcare - operations 
advanced to £2.94m, against 
£L48m last time , which was 
after a £450,000 loss on other 
operations. . 


Turnover on healthcare 
operations grew ll per cent to 
£19.4m (£17.43m). The com- 
pany, which provides health- 
care services to GFs and. Fam- 
ily Health Services Authorities, 
made its market debut in May. 

Pro forma earnings per share 
an healthcare grew U per cent 
to 4Q2p and an interim divi- 
dend of L5p has been declared. 

Select Appointments 
at £2,000 midway 

Select Appointments (Hold- 
ings). the USM-quoted recruit- 
ment agency, reported pre-tax 
profits of £2,000 for the six 
months to end-June, against 
losses of £692,000. However, a 
tax charge of £135,000 this time 
left tosses per share of 0.06p, 
against o.32p. 

Strong growth in all markets 
helped turnover rise from 
£12. 7m to £28.8m including 
£485.000 from acquisitions. 
Since the period end two fur- 
ther acquisitions have been 
made and more are being 
sought 

Murray European 
asset value op 20% 

The net asset value per share 
at Murray European Invest- 
ment Trust improved by 20 per 
cent from 51. 6p to 82.lp over 
tiie year to June 30- 

For the six month period net 
available revenue slipped to 
£167,000 (£224000), equivalent 
to earnings per share of 0.56p 
(0-75p). 



With effect from 
12 September 1994 

The Royal Bank of Scotland 
Base Rate has 
been increased 
from 5.25% to ’ 
5.75% per annum, , 


cte National 
Westminster 
Bank 


- National Westminster Bank 
announces that 
with effect from 
12 September 1994 
Its Base Rate 
is Increased from . 

5.25% to 575% per annum. 

All facilities flncludrng re^ukrt^ cortsumer credit 
o^eements) with a rate Interest finked to 

NotWest Bose Rate wifi be voried occorcfinqly. 


Retailing 
losses 
take toll 
on Liberty 

By Patar Pears® 

Shares tn Liberty fell hy 3%) to 
355p yesterday, as the 
retailing aud textile group 
tumbled into the red in the six 
months to July 30, following 
sharply increased losses an the 
retailing side- 

Pretax losses emerged tit 
£805,000, against profits of 
£602,000 previously, as trading 
losses in the retailing division 
grew to £L36m (£561,000). 

Mr Patrick Austen, chief 
executive, described the 
performance as “dis- 
appointing", though he 
stressed that poor first halves 
were not uncommon - 
Liberty’s year is heavily 
weighted to the second half. 

Having steered the gr o u p ■ 
through foil BrnfraridrlMWiMit 
of its non-voting shares since 
his arrival in May 1993, he has 
rejigged the divisional and 
management structure - 
creating separate textile and 
brand products divisions— 
and had “bitten the bollef 
and closed tin store in New 
York’s 5th Avenue. 

This had been the flagship of 
a five-store US chain, but the 
other stores were all dosed by 
January 1992. 

The US closure had 
staunched regular first-half 
losses of about £200,000, said 
Mr Austen, but had cost 
£606,000. Ibis was Included in 
retafling’s trading losses. . 

However other factors 
contributed to the decline. The 
group said that fbe first day of 
the rale had coincided with a 
rail strike and that the 
“extremely hot weather” had 
kept shoppers away . 

There had also been several 
primary “disruptions*, when 
the London flagship store -- 
andBegent Street itself- was 
dosed after a firebomb and 
other bomb alerts. 

Mr Austen said Liberty was 
trading 7 per cent up 
year-an-year until June, but 
that in July it was 5 per cent 
down. However since the 
period-end the g r o u p was back 
to a 5 per cent increase over 
last time. 

Group turnover rose 2 per 
cent to £3&£m- The interim 
dividend is held at l.85p in 
spite of losses of 3.44p 
(earnings 0J5p) per share. 


Mid Assets 
in talks over 
acquisition 

By David Blackwell 

Midland Assets, winch was 
created in May to acquire four 
nursing homes from Northern 
Leisure, said yesterday that it 
was in talks that might lead to 
“a substantial acquisition.” 

It is understood that the 
talks could end in a reverse . . 
takeover. An announcement is 
expected by the end of next 
week. 

Midland Assets Is chaired by 
Mr Nicholas Oppenhefan, also i 

vice-chairman of Northern 
Leisure. It paid £L9m tn cash l 
for the Beal Care nursing 
homes business, which 
Northern had been trying to 
sell for two years. 

The company, which raised 
£2. 4m via an intermediaries 
offer of ordinary shares, said 
at the time that it was looking 
far opportunities that either 
had above average possibilit- 
ies for medium term growth, 
or were likely to generate 
steady but increasing income. 

Yesterday the shares closed 
at 2i.3p, up Ip. 




Dewhirst doubles to £7m 
and raises pay-out by 63% 


By Peflgy HoBinger 

Dewhirst Group, the supplier 
of clothing to Marks and Spen- 
cer. the high, street retailer, 
increased its interim pay-out to 
shareholders by 63 per cent 
yesterday as it announced prof- 
its had doubled to £7m. 

Mr Scott Beattie, finance 
director, said the profits 
growth was mainly the result 
of higher volumes and better 
productivity. This bad helped 
to Increase trading margins 
from SB per cent to 6 per cent 

“Last year was a year of 
guHi ng mIm growth «r>rt this 
was a year of making use of 
ft," be said. Sales for the 26 
weeks to July 15 rose by 23 per 


cent from £35.4m to £ll7m. 

As a result of the substan- 
tially improved performance, 
the dividend was increased 
from 0-4p to G.SSp. Earnings 
were almost doubled to 3.63p. 

Both the ladies' wear and 
men's wear divisions had per- 
formed strongly during the 
first half, said Mr Tim 
Dewhirst, chairman. Reorgani- 
sation of the children's wear 
operation, which incurred 
losses last year, was now also 
largely complete. This business 
was expected to break even in 
1991 

Mr Dewhirst said prices were 
not expected to rise this year. 
There remained some uncer- 
tainty, however, given the 


pressure of hardening cotton 
prices, 

Mr Dewhirst said he was 
confident the company would 
continue to make progress in 
1994. In the past 12 months. 
Dewhirst had increased Its 
market share both on the high 
street and in Marks and Spen- 
cer, which accounts tor about 
85 per cent of its sales. 

“Our efforts are focused at 
improving operating margins," 
he said. Dewhirst has said it 
aims to get trading margins up 
to 7 per cent by 1996. 

Higher profits and improved 
cashflow helped Dewhirst to 
reduce Its net Interest pay- 
ments from £156.600 to 
£ 121 , 000 . 


Pendragon helped by revived 
demand for new upmarket cars 


By Peter 


A revival in demand for new upmarket cars lay 
behind a 32 per cent rise in pre-tax profits to 
2406m at Pendragon, the executive and luxury 
car dealer, in the six months to June. 

Mr Trevor Firm, chief executive, explained 
that with used car values rising towards the 
levels for new cars, people were more likely to 
buy new. New car sales contributed gftsm of 
gross profits, against £46m last time. 

He suggested that “principals of industry” 
were giving signals that the recession was now 
over and that they were making car purchases 
they had previously postponed. 

This. Mr Fhm said, helped to explain why the 
group’s total new registrations grew by 20 per 
cent over last time, against a 14 per cent rise in 
the whole car market 

• Group turnover climbed 56 per cent from 
£1 lfl.6m to£l8&9m, including £2.46m from acqui- 
sitions. Growth In operating profits was less 


dramatic at 39 per cent, from £3 57m to £494m, 
including £68,000 from acquisitions. 

Mr Ian Wheeler, finance director, said the 
margin slippage was due to the addition of Ford. 
Peugeot and additional Rover franchises, Which 
added £25m turnover to last time's £5.5m in the 
group's EC volume car sector. This greater turn- 
over at smaller margin, he said, had a dilutive 
effect across the group. 

Gross profits from used car sales were flat at 
£&2m, while after sales business contributed 
£22.4 (29.4m). Mr Finn said that luxury cars 
owners were more Likely to return to the seller 
than turn to Kwik-Flt or the like. Contract hire 
chipped in £l9m (£900,000), illustrating the rise 
in values in the used car market. 

Interest payable rose to £888,000 (£495,000) on 
borrowings up at £ 13.4m (£8J2m at end-Decem- 
ber). 

The interim dividend is lifted to 2.7p (2.4p), 
payable from earnings up 20 per cent to 7Jp 
flUp) per share. 


Centre Re buys Sedgwick arm 


By Richard tapper 

Centre Re, the Bermuda-based 
reinsurer, yesterday further 
strengthened its connections 
with the Lloyd’s of London 
insurance market when its 
Centreline subsidiary acquired 
Mendip, a Bermudan subsid- 
iary of Sedgwick, the insurance 
broker. 

I^e-CebtreUne, Mendip is 
an "Underwriter of “tone and 
distance" policies, a form of 
specialist financial reinsurance 
used by Lloyd's syndicates to 
manage their reserves more 
effectively.. 

Centreline will pay up to 


S30m for Mendip, which will 
increase its total time and dis- 
tance assets under manage- 
ment to some $2bn (£l.2bn). 
The consideration is payable in 
cash on completion - which 
will take place not later than 
September 30 - except for a 
deferred sum of £8.6m, payable 
in nine annual instalments to 
December 31 2002, with the 
amounts varying between 
£600,000 and £L3m. 

Mendip's profits for 1993 
were £1.7m and its net assets 
at - that date amounted to 
£18.2m. Its total assets and lia- 
bilities at last December 31 
were £337. 7m and £319.5m 


Dowding & Mills 
achieves 33% growth 


By David BfackweR 

Dowding ft Mills, the electrical 
and mechanical services group, 
lifted pre-tax profits by S3 per 
cent to £6.73m in the year to 
June 30 the back of a 9 per cent 
rise in turnover. 

Profits of £5 .04m last time 
Included exceptional costs of 
£628,000. Salas Increased from 
£83J3m to £9im. 

Mr Jim Cole, chief executive, 
said that excluding exception- 
als, operating profits were up 
12.6 per cent at £7 .2m, helped 
by a good performance in the 

US. 

Conditions in continental 
Europe continued to be diffi- 
cult, although Germany had 
performed well 

In the UK. which accounts 
for 60 per cent of turnover, the 
volume of business throughout 
1993-94 had levelled out after 
three years of decline. The 
group had also been able to 


impose price rises in line with 
inflation. 

“Since the end of July we 
have seen some improvement 
in the UK,” said Mr Cole. 

Mr Peter Hollings, the chair- 
man, said in Australia recov- 
ery was well under way but it 
would take tone for the new 
Melbourne facility to contrib- 
ute to profits. 

During the year the company 
shed 35 people at a cost of 
£148,000. against 97 redundan- 
cies at a cost of £423,000. 

Net interest payable fell from 
£732,000 to £479,000, and gear- 
ing was reduced from 18J} per 
cent to 15.3 per cent. 

Earnings per share rose to 
2.74p (2.04p). A final dividend 
of 1.62p (lift)) is proposed, tak- 
ing the total to sift) (2£p). 

The group also announced, 
the acquisition of The Surface 
Flatness Co, a Manchester 
mechanical calibration busi- 
ness, for £370,000. 


respectively. Sedgwick said the 
proceeds would be used to 
reduce group borrowings but 
group profits would not he 
materially affected. 

Centre Re, now wholly 
owned by Zurich of Switzer- 
land, has a number of other 
connections with Lloyd's. It 
provides reinsurance for Inte- 
ger, a stop loss reinsurance 
scheme Am individual Lloyd’s 
Names. The company is also 
involved as a reinsurer in a 
corporate capital scheme 
designed by Insurance Indem- 
nity Services which alms to 
provide some £80m in capacity 
for tq) to 86 syndicates. 


Candover net 
asset value 
advances 7% 

Candover Investments, the 
investment trust specialising 
in large management buyouts, 
saw a 7 per cent increase in 
net assets per share in the six 
months from December 31, up 
from 310p to 3SQp, and a 17 
per cent increase from 281p on 
June 30 1993. 

Pre-tax profits for the first 
half were ahead at £2.4m 
(£1.6m), including a £724,000 
non-recurring contribution 
from an investee company. 
Profit after tax was also 
ahead, at £l.61m, against 
£1.09m. 

Following an additional £9m 
contribution, the Candover 
1994 Fund to finance large 
buy-outs and buy-ins now 
stands at f ffgjfa i and a final 
closing is expected before the 
year end. 

Earnings per share came out 
at 7.l8p (4J7p). The interim 
dividend is increased to 415p 
(3.95p). 


.'.V ; ' 


The Royal Bank of Scotland 

The Royal Bank ofSasdand pic. 

Registered Office -• 36 St. Andrew Square, Edinburgh EH2 jZYB. 
Registered in Seodandtio. 90312 . 




America. The earvay wfll report on tte comfaCs oeenomy, 
poOtieaf scene, ftaandaf mariiatB, priwifmtion poiey and more. 

For cobra In f ormation on editorial content and detail* of 
wMrtMnc apportaaMBo Dvatoble k ttt sunny, ptewe contact 

Penny Scott h few fate 

TeC (212J 688 BSOORwc (212)6888229 
SMnantto Bog In London 
TeC (+44 71) 873 4816 ft»cM4 71) 873 3596 

FT Surveys 


Barclays Base 
Rate Change. 

Barclays Bank PLC and 
Barclays Bank Trust Company Limited 
announce that with effect from 
12th September 1994 their Base Rate 
increased from 5.25% to 5.75%. 







FINANCIAL TIMES 


TUESDAY SEPTEMBER 13 1994 


COMPANY NEWS: UK 


Bardon in the black 
with £2.1m at midway 



Peter Tom: the pressure to sell businesses to cut debt is removed 


By Andrew Taylor, 

Construction Correspondent 

Bardon Group, the inter- 
national aggregates and ready 
mix concrete company, yester- 
day announced details of a 
large new loan facility and 
management reorganisation as 
it published its first profits for 
29i years. 

The company, which had net 
borrowings of £239m at the end 
of June, representing gearing 
of 68 per cent, said that it had 
agreed a 9350m (£226m) four- 
year syndicated hanking facil- 
ity. stabilising its finances. 
Most of Bardon’s borrowings 
are in the US. 

The company made pre-tax 
profits of £2.lm on turnover of 
£l40m in the first six months 
of this year, compared with a 
loss of £59.501 from turnover of 
£160.5m in the first half of 1993, 
when it wrote down by £60m 
the value of its UK sand and 
gravel dredging business. 

Operating profits rose by 10 
per cent in the first half to 
filO.lm, thanks to a strong per- 
formance from its UK busi- 
nesses which had increased 
profits by a third to £S.4m. 

Profits at the US arm, how- 
ever, fell from £2.5m to £900,000 
due to bad winter weather 
which had restricted construc- 
tion activity, and a delay in 
approving finance for the Mas- 
sachusetts road programme. 

Bardon said that it had 
removed the divisional man- 
agement structure of its UK 
and US businesses to shorten 
reporting lines, improve effi- 
ciency and reduce costs. These 
businesses would in future 
report direct to Mr Peter Tom, 
the chief executive. 

It had been agreed that Mr 


Stuart Lamb, previously US 
divisional chief executive, 
would leave the group shortly. 

The improvement in the 
group's finances meant that 
the pressure to sell businesses 
to reduce borrowings had been 
removed, said Mr Tom. An 
attempt to sell the UK aggre- 
gates dredging business - it is 
thought to Minorco - fell 
through last year. 

The UK businesses, includ- 
ing the dredging operations, 
were now benefiting from 
Increased sales volume and 
higher prices as UK construc- 
tion activity had risen. Prices 
also had risen in the US, but 
coated roadstone volumes in 
Massachusetts were signifi- 
cantly lower. 

Losses per share emerged at 
O.lp (I6.2p) and the interim div- 
idend is held at 0.8p. 


• COMMENT 

Massachusetts has tripped the 

group ag ain, mar rin g an other- 
wise good trading performance. 
Bardon’s finances may he sta- 
bilised. but it is difficult to see 
how borrowings can be 
reduced to a manageable level 
from trading alone. A sale may 
yet be needed, but this can be 
at a time and price more of 
Bardon's choosing. A prospec- 
tive yield of approaching 6 per 
cent on a maintained final divi- 
dend and a net asset value of 
about 65p should underpin the 
share price, which fell 2p to 
43p yesterday. However, pre- 
tax profits of £20m this year 
and £28m next, putting Bardon 
on prospective multiples of Z1 
and approaching 15, indicates 
that this rating is unlikely to 
improve while borrowings 
remain high- 


EIS maintains 
growth with £8.9m 


Amey more 
than trebled 
at £1.73m 

Amey Holdings, the civil 
engineer which came to the 
market in June, reported 
interim pre-tax profits more 
than trebled at £l.73m for the 
first half of 1994. 

This compared with £556,000 
which included losses of 
£1.07m on discontinued activi- 
ties. 

Profits on continuing activi- 
ties rose by 6.S per cent Turn- 
over was £97.3m, down from 
£109.4m which included 
£3.07m from discontinued 
activities. The underlying fall 
was 8.5 per cent 

The company also confirmed 
that it was forming a joint 
venture with Taylor Woodrow 
and Sir Robert McAlpine to 
tender for privately financed 
road schemes. 

The company said that the 
present six months had started 
well with trading up on the 
comparable period. 

Earnings per share were 
4.8p (i.2p) and a dividend of 
1.5p has been declared. 


By Christopher Price 

EIS Group, the acquisitive 
specialist engineering group, 
continued its 23-year run of 
uninterrupted profit growth 
with a 14 per cent increase in 
pre-tax figures to £8.93m at 
the interim stage. 

However, the company 
warned that margins remained 
under pressure, although the 
situation was showing some 
signs of picking up. "We’ve 
seen a glimmer of improve- 
ment in recent weeks," said Mr 
Peter Haslehurst, chief execu- 
tive. “We’re feeling more opti- 
mistic than we have done in 
quite a while." 

Turnover to the end of June 
rose 25 per cent to £154 ,27m 
(£123. 86m), including £2.78m 
from acquisitions. Earnings 
per share rose from 13. Ip to 
13.3p, while the interim divi- 
dend was increased 3 per cent 
to 3.4p. 

Mr Haslehurst said that 
there were strong perfor- 


mances frpm the technical 
mouldings and flight spares 
businesses, although he 
declined to give a breakdown 
of operations. Conversely, the 
aircraft and presision engineer- 
ing divisions were weak in the 
face of difficult market condi- 
tions. Process equipment was 
“patchy but i mprovin g." 

He added that the first half 
acquistions had all traded welL 
EIS bought C&F Miller, an air- 
craft maintenance equipment 
group, in April for £500.000. fol- 
lowed a month later by postal 
and defence equipment manu- 
facturer ABPH for £2.5m. ADE- 
HML Ltd, an aircraft equip- 
ment maker, followed in July 
for £3 An, with German coiling 
machinery group Henrich for 
£300,000 the next month. 

With gearing down to 4 per 
cent, Mr Haslehurst said that 
further acquisitions were a 
possibility. “But we also have 
spare capacity available to 
take up any significant upturn 
in demand.” 



Country 
Casuals 
shares fall 
on warning 

By Peggy HoIBnger 

Country Casuals shares 
plunged by more than a fifth 
yesterday as the clothing 
retailer warned profits would 
be hit by unexpected 
difficulties in establishing its 
larger women's brand, ElvL 

The sham fen by 32p to 
I2Qp following the 
announcement Analysts, who 
had been expecting some costs 
as a result of the expansion of 
Elvt, marked their forecasts 
for annual profits down from . 
about £3m to £2m. 

Mr John Shannon, 

said establishing 
Elvt as a retail chain had 
taken longer than expected. 

The group had encountered 
difficulties in opening shops 
and sales had been below 
budget 

Country Casuals was forced 
to discount higher levels of 
Eftri stock in the summer sales 
as a result and gross margins 
were hit Mr Shannon said the 
group remained committed to 
developing a middle market 
niche in the larger women's 
market In the second half. 
Country Casuals would be 
s u pporting its 50 shops with 
national advertising. 

Country Casuals also 
suffered delays in opening 
shops in its smaller Koto 
business, which c a t e rs for the 
younger fashion market 
Although sales were 10 per 
cent higher in the first half, 
margins were affected by 
discounting. 

These factors meant that full 
year profits would be 
substantially below market 
expectations, Mr Shannon 
said. He refused to quantify 
the extent of the expected 
writedowns and provisions. 
More details would be given 
with the interim results due in 
October, be said. 

■ The Elvi management team 
has been strengthened with 
the appointment of MrRnss 

Hamer, formerly of 
Debenbams and Laura Ashley, 
as managing director. 

The core Country Casuals 
chain improved margins by 
about two percentage points. 
The division achieved sales of 
£15. lm in the first half, down 
by I per cent 

Lerose Manufacturing 
enjoyed a strong first half, 
with sales up by 26 per cent 

Output doubles 
but Piet Petrol 
drops to £3.25m 

By Carofew Southey 

Production from the Scott field 
helped Piet Petroleum, the oil 
and gas exploration company, 
more than doable Its 
production from 2,413 barrels 
of oO equivalent per day to 
4,960 at the year-end and 
achieve record output of 1 An 
barrels of oil equivalent 
against 881,000. 

Net profits in the year to 
June 30 fell from £4»82m to 
£3-25m after a tax charge of 
£71,000 (nil)- Pre-tax profits 

dropped from £4 Atm to 
£3.32m. There was a foreign 
exchange loss of £329,000 tills 
time, compared with a gain of 
£ 1.57m last time. 

Turnover rose from £9 .58m 
to £18m despite lower oil 
prices, which averaged £9-87 
per barrel compared with 
£11.10. 1 

Earnings per share came out i 
at &3p (9-34p). 


Pressure points at the margins 

The ability to pass on price rises is limited, says Christopher Price 


C omplaints about rising 

costs putting pressure 
on mar gins and warn- 
ings about price increases to 
come have punctuated the cur- 
rent British company results 
season. 

Yesterday there was yet 
more evidence of inflationary 
pressure in the system. 

Dalgety, the food manufac- 
turer, complained of very com- 
petitive mar gins anri a sharp 
rise in input prices for its con- 
sumer food businesses. British 
Polythene said it expected raw 
material prices to rise 60 per 
cent in the three months to 
October. 

Last week BTR. the indus- 
trial conglomerate, saw its 
share price decline nearly 12 
per cent after warning that 

margins would r emain under 

pressure, largely because it 
was unable to pass price 
increases on to customers. 

The impact of inflaHnn has 
varied from sector to sector. In 
Printing; paper and jwnlcag hi g . 
for example, increases in raw 


material prices have been 
largely passed on. 

Mr Alain Soulas, chief execu- 
tive of Arjo Wiggins Appleton, 
the Franco-British paper com- 
pany, which last week reported 
a 67 per cent rise in pre-tax 
profits, said pulp prices had 
risen five times this year, 
resulting in an increase of 45 
per cent 

“The recovery In the world 
economy has turned the pulp 
market from a buyers' one to a 
sellers' one,” he said, adding 
that the company’s success in 
passing on price rises was in 
part due to its strong position 
in the market 

B o water, the packaging 
and printing group, has 
also been successful in 
passing on price rises. Mr 
Michael Hartnall, finance 
director said: “We don’t like 
doing it, but we have no 
choice. We have seen a sub- 
stantial upswing in our raw 
material costs since the start of 
the year.” 


He expected inflationary 
pressure to peak by the year- 
end then level out Mr Soulas 
said the strong pressures could 

run an longer than that 

The competitive environ- 
ment has prevented companies 
further down the distribution 
ch*in, like food retailers, from 
pushing through price rises. 
But the powerful market posi- 
tion erf the top five food retail- 
ers, which control almost half 
the UK grocery market, has 
enabled them to resist suppli- 
ers price rises. 

“Our prices will not 
Increase," said Mr Archie Nor- 
man, nhW executive of Asda, 
the UK’s third hugest super- 
market group. “This is both 
company policy and a neces- 
sity. The marketplace just will 
not bear it.” 

Mr Derek Pretty, finance 
director at Kwfls Save, the dis- 
count supermarket operator, 
added: “We do detect more 
desire from suppliers for price 
increases, but we are not able, 
or willing, to accept them." 


For food manufacturers, tike 
Dalgety, the result has been 
constant pressure on margins. 

A nother industry in a 
similar predicament is 
housebuilding. Report- 
ing results last week, both Wil- 
gon (Connolly) and Bellwinch 
complained of the sharp rise in 
raw materials costs set against 
the dull housing market 
Mr Ian Black, managing 
director of Wilson (Connolly), 
said yesterday bricks and 
bricklayer costs had risen 18 
per cent during the first half of 
the year, while concrete block 
prices had increased 20 per 
cent and timber prices 15 per 
cent 

“House price Inflation will be 
3 per cent by the year end If we 
are lucky." he said. “We are 
being squeezed from under- 
neath in a market which can- 
not bear any price increase." 
He blamed the recession for 
reducing building material 
manufacturing capacity and 
for forcing labourers abroad. 


Steady growth for Forth Ports 


By James Buxton, Scottish Correspondent 

Forth Ports, the privatised Scotland-based 
ports operator, saw steady growth in turn- 
over and profits in the six wumthfi to June 
26. Pre-tax profits rose <L2 per cent to 
£5.73m (£5.49m). Turnover was up 25 per 
cent at £l&2m, against £15-8m adjusted to 
exclude £1.3m relating to offices being con- 
structed at Victoria Quay, Leith. Edin- 
burgh for the Scottish Office, which have 
been sold forward. 

None of the profit made on a property 
sale at Victoria Quay has been incorpo- 


rated. Part will be included In the full year 
results with the balance next year. 

The overall tonnage handled in the 
Forth estuary increased by 75 pa 1 cent to 
20.1m as a result of a 90 per cent Increase 
in piped cargo through BP’S Hound Point 
terminal. Dry cargo handled dropped by 
250,000 tonnes to 1.3m tonnes. Revenue per 
tonne of piped cargo is only about a twen- 
tieth of that for dry cargo. 

Mr William Thomson, chairman, said 
Forth Ports was encouraged by the recent 
tr ansformat ion of the area around the port 
of Leith which augured well for future 


developments. Port business had been 
steady since the half year and the com- 
pany should report a satisfactory profit for 
the full year. 

KamingB per shar e rose 6.7 per cent to 
I2.7p (ll .9p) and the interim dividend is up 
20 per cent at 2.7p (2Jffip). 

The shares rose 20p to 475p yesterday. 
BZW, the company’s broker, raised its 
profits forecast for the frill year from 
£ 12 3m to £13m, including a £l.65m contri- 
bution from Victoria Quay. The forecast 
fmphftg earnings per share of 29p and a 
prospective multiple of about 16. 


Nestor-BNA in the 
red after disposal 


By David BJackwel 

The sale of its hospitals and 
nursing home division earlier 
this year pushed Nestor-BNA, 
the healthcare and personnel 
group, into the red for the 24 
weeks to June 17. 

The pre-tax loss of £JL5m was 
struck after exceptional 
charges of £4J2m, reflecting a 
loss of MJ3m on the sale of the 
division offset by a gain of 
£290,000. The loss compares 
with profits of £2.01m. 

Turnover rose from £49 -3m 
to £56m, including £5.62m 
(£5.01m) from discontinued 
operations. 

Mr Mike Rogers, chief execu- 
tive, said there had been 
strong growth in the UK nurs- 
ing agency business, which is 
the biggest in the country and 
accounts for about half of turn- 
over. Operating profits rose 
from £862400 to £L2m. 

However, the nursing agency 
business in the US had suf- 
fered in extremely difficult 
markets and operating profits 
fell to £356,000 (£744,000). 


The disposal reduced fixed 
assets from £18.4m at the end 
of last year to £2.9m, and 
shareholders’ funds from 
£S.66m to £2.42m. Borrowings 
dropped from D84m to £5J34m, 
cutting gearing from 324 per 
cent to 229 per cent 
Losses per share were 4.11p 
(i.93p earnings). The interim 
dividend is unchanged at U5p. 

• COMMENT 

Getting out of hospitals looks 
like a good move, enabling the 
company to concentrate on the 
growth area of flexible health 
care. The debt situation is also 
clearer, with interest cover 
much improved. Stripping out 
the exceptional s , earnings per 
share of about 4p can be expec- 
ted for the full year, so the 
dividend looks safe despite the 
disastrous foray into the US. 
At the moment the yield of 8 
per cent - almost double the 
market average - is the only 
reason for any Interest in the 
stock. The question is, how 
long will the US albatross 
delay a dividend increase? 


Independent Parts gets 
£20m valuation via placing 


By Christopher Price 

Shares in Independent Parts 
Group (IPG) were yesterday 
priced at 112p in a placing with 
institutional investors for a flo- 
tation capitalising the vehicle 
components company at wflm 
Peel Hunt, the company’s 
stockbroker, will place 7.15m 
shares, representing about 44 
per cent of the equity, raising 
£7.6m net of expenses. 


IPG Is the holding company 
for Tuberex, a manufacturer of 
automotive exhaust systems, 
and Veco, a wholesale distribu- 
tor of replacement vehicle com- 
ponents. Turnover to end- 
March 1994 for the combined 
group was £13-5 m, with pre-tax 
profits of just over £2m_ 

The placing receipts will be 
used to repay borrowings, 
which will leave the group 
ungeared. 


British Biotech shares up 
5% despite deeper losses 


By Peggy HoIBnger 

British Biotech shares defied a 
foiling pharmaceuticals sector 
yesterday and jumped 5 per 
cent to 490p in spite of the 
company’s announcement of 
deeper losses in the first quar- 
ter. 

The market ignored tire 34 
per cent rise in net losses to 
£5.6m and chose to focus 
Instead on British Biotech’s 
upbeat comments on the prog- 
ress of its cancer and pancre- 
atitis drug trials. 

Dr Brian Richards, chair- 
man, said the year had started 
well for the group. “The suc- 
cessful completion of the £46m 
rights issue. . . together with 
the encouraging results of our 
trials means we are now plan- 
ning tiie anal stages of devel- 


opment for our leading 
drugs," he said. 

The comments were inter- 
preted by the market as “fur- 
ther confirmation that tilings 
are on track," said one ana- 
lyst. The losses were also an 
improvement on the perfor- 
mance in the final quarter of 
last year, when British Bio- 
tech reported a deficit of £8m. 

Turnover fell by 64 per emit 
to £767, W0 due to tiie sale last 
year of British Biotechnology 
Products. Sales of continuing 
operations rose by 64 per cent 

The company has set up a 
new subsidiary, Neures, to 
investigate neuro-degenerative 
diseases such as multiple scle- 
rosis. 

The loss per share deepened 
from I0.7p to 11 .9p. There was 
no dividend. 


1 DIVIDENDS ANNOUNCED f 



Current 

payment 

Date of 
payment 

Cones - 
ponding 
dvldend 

Total 

for 

year 

Total 

last 

year 

American Trust 

»nt 


Oct 2B 

1.8 

. 

5.4 

Amey 

frit 


Oct 28 

- 

- 

- 

Aspen Comma § 

Int 

2.15 

Oct 28 

2 

- 

4.9 

Bardon Group ini 

as 

Dec 2 

0.8 

, 

2 


4.5 

Nov 25 

S.75 

. 

11.5 

Cmdowar 

Int 

4.15 

Oct 27 

3.95 


11 

Dalgety 

fin 

iai5 

Jan 3 

12-65 

21.15 

20-5 

Dewhirst 

Int 

0.85 

Nov 11 

0.4 

• 

1.45 

Denuding & Mb 

fin 

1.62 

Oct 27 

1-58 

2.56 

23 

BS Group 

...... —tnt 

3.4 

Dec 31 

3.3 


12-3 


bit 

5L25 

Nov 15 

1.9- 

_ 

5 3" 

FH 

> fln 

8L75 

Jan 3 

8.75 

14.75 

14.75 

Forth Ports 

Int 

2.7 

Nov 10 

2.25 

- 

7.25 

HeoNftcafl 

Int 

1.5 

Nov 3 

- 



Jupiter Tyndall Jot 

6¥ 

Nov 18 

4 

_ 

11 

Liberty 

-.—..int 

1.85 

Nov 10 

1-85 

_ 

7J2 

Merchants Trust 

. — Int 

2.85* 

Nov 18 

2.65 

_ 

11 

Motivate Moore . 

,_Ai 

2 

Nov 10 

nil 

2 


Nestor-BNA 

— . — bit 

1.15 

Oct 28 

1.15 


3.15 

Pendragon 

__Jnt 

2.7 

Oct 20 

2 A 

_ 

7J2 

Second AJHanco 

fin 

29 

Oct 20 

26-5 

42 

39 

Sharpe & Fisher 

bit 

1.7 

Nov 18 

1.5 


42 

Singer & Fried _ 

int 

1.4 

Nov 1 

1.25 

. 

3 

UK Safely 

bit 

1.04 

Dec 14 

1.04 

- 

2.0 


Dividends shown pence per share net except where otherwise stated. ton 
Increased capital. §USM stock. ‘Adjusted for scrip. ?Atao enhanced scrip 
dividend of 9p (6p). ^Second quateriy, making 5.7p (Barf so fcr. 


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33' 


COMPANY NEWS: UK 


Singer & Friedlandcr 
advances 12% to £13m 


By Simon Davies 

Si nger & Friedlander. the 
diversified merchant banking 
group, reported a 12 per <*>nt 
increase in interim pre-tax 
profits from £H.7m to £13. im, 
boosted by significant growth 
in its investment banking 
operations. 

The performance was dis- 
torted by share sales daring 
1993, and profits before excep- 
tional items for the sic months 
to June rose by 22 per cent to 
£H.lm, up /torn £9-l3m_ 

Growing competition in the 
corporate lending market 
. restricted growth in its core 
hanking business, and loans to 
customers increased only mar- 
ginally. from £274An to cagh^ . 
Bad debt pro visions fell from 
£825,000 to £33,000. ' 

- Profits from merchant bank- 
ing and investment manage- 
ment rose to £692m<£S.77m). 
Corporate finance activity 
increased, and advisory deals 
for Embassy Property. Envi- ' 
romed, and more recently Well- 
man, should ensure an 
increased contribution for 1991 
Funds under management, pri- 
marily for private clients, rose 
to more than nbn. 

Co llins - Stewart, the 51 per 
cent owned broker, saw a 
sharp decline in market mak- 
ing profits, and Singer's deal- 
ing profits foil from £2. 19m to 
£415,000. It was also hit by the 
impact of failing bond markets 
an Its debt trading portfolio. 
..Singer’s property portfolio,, 
now valued at about £6Sm, con- 
tributed £2.49m (£1.89m), 
helped by trading profits. Inter- 
est and investment income 
rose to £L7m (£1.47m), 
reflecting increased cash from 



_ TttNOl HllWplW* 

John Hodson: pfenning fm-ther investment'in core activities 

. ry • • ■ 


• ■ j* - • * 1 - ■ • 

recent share saUs.' ■■ 

Singer made £3.9m of provi- 
sions against property values 
last year, and Jt wrote back 
£2m of this at the interim 
stage, almost off-setting a 
£2-57m profit from the sale of 
its Burford stake to. 1993. 

During the half year Singer 
increased Its stake in Associ- 
ated Nursing Services to 2243 
per cent, and .it ppw owns 60 
per cent of Edgar Hamilton, 
the Lloyd's broker 
It also h^s a per cent stake 
in the highly profitable Peo- 
ple’s Phone, - L anlndependent 
provider of moBfio phone ser- 
vices. Brokers estimated could 
make about £2Qm phofit from 

.. . V • 


thesaleofihfo st^ke. 

Mr John Hbd sdn, ehief exec- 
utive, said Singer was looking 
to Tnabw further Investments in 
teams and businesses within 
its care area of financial ser- 
vices. 

It has recently set up unit 
trust fimd' management and 
structure d finance teams, and 
is thought to be negotiating 
the.fFamhase of Carnegie Inter- 
national, the European securi- 
ties, business. 

Hpuse broker Barclays de 
Zoet e Wedd Securities fore- 
casts full-year profits of £ 26 hl 

The interim dividend. is lifted 
to L4p (L25p). Earnings per 
share rose ftran 493p to 5-lfip. 


All-round growth behind 
Fairey’s rise to £12.9m 


By Andrew Baxter 

Pairey Group, the industrial 
electronics and spedalistengi- 
’ neertng concern, boostedfirat- 
-half pre-tax profits . by 26 per 
cent from £10J2m to £l29m. 
and is nrismg the interim divi- 
dend from,l,9p to Z25pper 
share.. . 

Sales rose. per cent trom 
£63L8m to £73/&rt w- : • - 

Mr John Ponlter, chief execu- 
tive, said excellent growth 
from the main . electronics 
sector - in spite of somi 
weakness in the insulators 
business, continuing enhanced 
margins at aerospace and 
defence, and improved volume 
in filtration had combined to 
produce a "very encouraging" 
result 

All three business sectors 
showed improved profits. The 
electronics and electrical 


power business lifted operating 
profit from £7J8m to £&7^m, as 
turnover rose from £399m to 
. £47Am. 

:• rHkration' and .specialised 
ceramics increased, operating 
... profit -from £L£8m to jL8m bn 
• safes ; up--*bgbtiy.-froiu . H39m 
yt0%c£18«9im<i Aerospace and 
defence had profit. 'Of £2. 03m 
oms^es’df £H9m 

^(E H g3mfcr 

*;.?0$raraU, said Mr Poulter, 
.^ffiereth^d b^i an hnprove- 
.^flnent.jfc denj^M for Fairey’s 
products in ; most geographic 
.areas and all except one of its. 
..main companies, was ahead of 
; lastyeqj.^ . 

The exeS^tioiTwas the Insu- 
lators huSh&s, which is facing 
reduced, domestic demand.. Its 
factory at Stafford is being 
rationalised to reduce its cost 
base in line with likely fixture 
requireinents.^;^_' . ' 


.. In spite of this, however, and 
some seasoiiality in Fairey*s 
business which favours the 
first half, Mr.Poutter said “we 
face the future .with consider- 
able confidence” • 

Net cash at July 2 , was 
£19JLxn, up frtidfrewofoiat-the 
-end of* 1993* The, rise partly 
.reflects £ 2Am from property 
disposal in Tamworth.- 
Lale last month, though, 
Fairey announced the £9.3m 
acquisition of Massachusetts- 
based Imaging Technology, 
which makes specialised modu- 
lar ccHQpute? boards for Indus- 
trial image processing systems. 
This will he paid. for out of 
existing resources. 

First-half earnings per share 
rose from 9.2p to lL2p. Both 
these aud the dividends for last 
year have been restated to 
reflect the 1-fbr-l capitalisation 
issue fids June. 


Perkins’ Japanese venture to 
build 



By Andrew Baxter 

Perkins, the Peter- 
borough-based diesel engine 
producer, is to create a joint 
venture with Japan’s Ishikawa- 
jima-Shibaura M ac h i n ery (ISM) 
to develop and build compact 
low-emission diesel engines in 
the UK. . 

The joint venture company, 
in which Perkins will be the 
majority shareholder, will 
build up to 50.000 compact die- 
sel pn ghifts a year by 2000. 

Additional jobs win be cre- 


ated at Peterborough for a ded- 
icated facility due to begin pro- 
duction to early 1996. It w SO, 
said Perkins, combine the best 
in European and Japanese 
technology. 

Perkins ha? been 
distributing ISNTs % Bngines 
worldwide since* 1987, but 
believes that a Joint venture 
will help it sharply increase its 
share of the market for ram- 
pact engines, -Where demand is 
rising. 

u Bot^:compox^f^pelieve a 
European manfiMfctning base 


in UK 


will enable delivery tfanaw to .be 
reduced significantly.- -ISM 
hopes to keep the effect of the 
production shift -on its Matsu- 
moto plant to a mfaimnm by 
incireasang other business. 

The &50 bhp engines from 
the venture will be the small- 
est ever produced by Perkins. 
The deal will complement the 
strategic alliance announced 
earlier this year by Perkins 
and IseM, another Japanese 
company; to build a range of 
.56-Z5 hhp -engines at Peterbor- 
Starting in 1995.. 


UB pays 
£21m for 
Dutch 
snacks 
business 


By Roderick Oram, 

Consumer Industriss Editor 

United Biscqtts said yesterday 
it win become toe savoury 
snack marie# leader in 
Benelux coontrieswith Us 
purchase of Dalgety’s Dutch 
aiflpk business for 

The purchase will give UB 
about 33 per cent of the 
market add push Snack 
Ventures Europe, a Joint 
ve ntu re between PepsiCo and 
General Mffila of the US, down 
to a close number two. 

Dtdgeiy said ft was selling 
the badness because It was 
the only savoury snacks 
company it had In continental 
Europe. It would fbcra on the 
UK where it had strong brands 
including Golden Wonder 
crisps. 

In continental Europe, 
Dalgety will concentrate on 
food ingredh^ats and pet foods. 

In the Netherlands, Dalgety 
has about 14 per cent of the 

wfrffl lwi aiagta mari rrt and 
nine per cent of crisps through 
its NIBB-IT brand and private 
label products. 

The business, which 
reported profits of £L5mon 
turnover of £25.8m in the year 
ended June, will expand UB’s 
Benelux snack sales by about 
25 per eent 

“We’ve been relatively weak 
in toe Netherlands and 
Belgium in savoury snack but 
not crisps,” said Mr John 
Warren, UB’s finance director. 
Currently, UB is supplying the 
Netherlands from a plant in 
Belgium which is operating 
near capacity. 

The Dutch operation, which 
exports about 45 per cent of its 
output, will also give UB. 
another route into Germany, 
the main European market in 
which it Is under-represented. 
UB has one plant in southern 
Germany but most of its 
output goes to Italy. 


UK Safety 
tops £lm 
at midway 

UK Safety, the specialist 
footwear manufacturer, 
reported pre-tax profits of 
£L02m on turnover of £159m 
for the six months to July 2. 

The outcome compared with 
a profit of £302,000 on turnover 
of £5-02m for the 1992 first half. 
Last year's interim figures 
however consist of only two 
months’ trading of the group in 
its present form. 

The company came to the 
market in May last year 
through the reverse takeover 
of TSW, the former indepen- 
dent television contractor for 
the south-west qf England. 

Mr Colin Dunmore, chair- 
man, said the outcome had 
been achieved against, a back- 
ground of uneven demand and 
a competitive marketplace. 

The figures had also been 
depressed by higher net inter- 
est costs of £464,000, against 
positive income o f £8 1,000 
received on the large TSW cash 
balances lest time, Mr Dun- 
more said. 

In nridtrinm , the first phase of 
the group’s restructuring plans 
had led to an exceptional cost 
of £215,000, although this had 
been more than offset by a 
£730,000 profit on the disposal . 
of its investment in Sodt Euro- 
peans des Satellites, he added. 

reaming s per share emerged 


Measure for market measure 

Peter Martin considers the gap between analysts’ and FT-SE figures 


W hy, stock market 
analysts have been 
asking, have their 
calculations of the overall val- 
uation of the market diverged 
so much from the official price/ 
earnings ratio for the FT-SE 
Actuaries All-Share index pub- 
lished every day in the Finan- 
cial Times? 

Some small difference Is nor- 
mal. But since the beginning of 
1993, the gap . has widened 
sharply. 

In August, for example, the 
FT-SE figure had the All-Share 
selling at a ratio of 199. The 
average broker calculated the 
figure at 169. 

There is more than just 
statistical amour-propre at 
stake. The overall p/e ratio 
is used for assessing whether 
British equities are fairly 
priced in relation to those over- 
seas, and whether any individ- 
ual share is expensive or cheap 
relative to the market as a 
whole. 

The FT-SE version of the 
other important market indica- 
tor, gross dividend yield for the 
All-Share, has also been show- 
ing a marked gap with ana- 
lysts’ calculations. 

In August, the official FT-SE 
figure showed that equities, 
overall, were yielding 3.74 per 
cent Analysts put the figure at 
4.07 per cent 

Over the summer, a working 
party of the FT-SE Actuaries 
UK indict committee, under 
the chairmanship of Mr Peter 
Jones of M&G, has been 
looking at the 

The burden of the work fell 
on Mr Paul Walton and his col- 
leagues lh the research depart- 
ment of James Capel, supplied 
with data by the FTs statisti- 
cians. 

After studying the earnings 
and dividend figures of the 
companies In the FT-SE Actu- 
aries 350 index, Mr Walton’s 
conclusion was that three 
main factors explained almost 
all the gap: 

• Timing. FT Statistics calcu- 
lates the Index’s earnings fig- 
ure by adding together each 
company’s two most recent 
half-years. As soon as a compa- 


NEWS DIGEST 


at L78p (19%) and the interim 
dividend is being maintained 
at L0%. , 

Biotrace £0-2m in 
loss after provision 

Biotrace International, the 
maker of microbiological test- 
ing systems which came to the 
market last November, 
announced pre-tax losses of 
£225,000 for the seven and a 
half months to end-Juue after 
an exceptional £565,000 
provision for unrealised 
losses on fixed interest invest- 
ments. 

For the year to July 31 1993 
there were pre-tax losses of 
£113,000. Turnover amounted 
to £L95m and losses per share 
came through at 0.7p. 

Mr Brian Levett, chief execu- 
tive, said the company contin- 
ued to trade ahead of plan. 

Emap makes £7m 
acquisition 

Emap, the media and exhibi- 
tions group, has acquired Inter 
Garden Promotions, the owner 
of the annual International 
Garden and Leisure Exhibition 
for £7m to be satisfied by the 
issue of Emap loan notes. 

GLEE first ran at the 
National Exhibition Centre in 
Birmingham in 1976 and 
currently attracts TOO exhibit- 
ing companies occupying 
28,000 sq m of stand space 
and more than 20,000 trade 
buyers. 


Earnings levels 



1900 
SaUtKJmiClpri 

ay’s interim results are issued, 
the earnings hu*hiriwi in the 
index figures become those for 
the latest six months and the 
second half of the previous 
financial year. At a company's 
year end. the figures are its 
foil-year earnings. Brokers, by 
contrast, use their analysts* 
estimates of each company’s 
earnings for the current calen- 
dar year. 

The FT-SE Actuaries num- 
bers are objective, in the sense 
that they are based on official 
company data, but they will 
inevitably always lag behind 
brokers’ estimates. Normally, 
this generates only a slight dif- 
ference between the two series, 
but when warning a are swing- 
ing sharply - as when a com- 
. pany moves from loss to profit 
or from recession to growth - 
a gap opens. 

T he recent recession pro- 
duced a sharp swing in 
companies' results. In 
particular, a number of big 
losses from large companies 
last year are stfil in the All- 
Share earnings figure, but 
have now dropped out of the 
brokers’. 

Mr Walton's study says that 
the timing effect is responsible 
for L8 percentage points of the 
3 point gap between Capet's p/e 
estimate and the official All- 


Hanson’s Scholes 
offer unconditional 

Following clearance from the 
Office of Fair Trading, Hanson, 
the Anlgo-US conglomerate, 
has declared its speed cash 
offer for Scholes Group, the 
electrical equipment maker, 
unconditional in all respects. 

It has remved acceptances 
in respect of KLSm shares or 
67.08 per cent. 

American Trust 
net assets slip 

Net asset value per share of 
American Trust slipped to 
288.3p at the end of July, 
against 3089p six months ear- 
lier. 

Net profits for the six 
months grew to £2.74m 
(£2. 42m) and earnings per 
share to 398p (29p) reflecting 
increased dividends from UK 
h ol din g s *nri interest taffome 
The interim dividend has 
been raised to L9p (I9p). 

Trans Union offer 
for UAPT lapses 

Trans Union’s offer for UAPT- 

Infottnk, the British credit ref- 
erence company, has lapsed. 

Although originally recom- 
mended by the UAPT hoard, 
the Trans Union offer was 
superseded by a higher £51m 
offer from Equifax, a US credit 
data group, which has had 31 
per cent acceptance so far. 


Share figure. (Capel's p/e esti- 
mate is roughly in Vine with 
that of other brokers.) 

• Unrelieved ACT. The prob- 
lem of how to treat Advance 
Corporation Tax arises in 
acute form for those companies 
that fail to generate enough. 
UK earnings to offset the ACT 
they must pay on their divi- 
dends. The FT and the brokers 
adopt different approaches to 
tackling this problem. How- 
ever, it is unlikely to be a sig- 
nificant factor in distorting 
either side's figures; at most it 
may be responsible for half a 
percentage point of the three 
point gap. 

• Interpretation. The likeli- 
hood that individual compa- 
nies' results will be treated dif- 
ferently by different compilers 
has been heightened by the 
new FRS 3 accounting stan- 
dard, because more judgment 
is needed to estimate a compa- 
ny’s underlying earnings fig- 
ure. 

FT Statistics, which calcu- 
lates the index earning s fig- 
ures, adheres to the definition 
of headline earnings proposed 
by the Institute of Investment 
Management and Research, 
but this does not always pro- 
vide unambiguous answers. So 
differences of opinion will per- 
sist 

They tend to cancel each 


other out however, and con- 
tribute only another half a per- 
centage point to the three 
point gap. 

Overall, therefore, only 09 
percentage points of the gap 
are left unexplained by Mr 
Walton's study, a negligible 
amount The gap Itself can be 
expected to close over the next 
few months, as the “bad" earn- 
ings figures drop out of the 
official series. 

T here are two lessons 
from this. The sharp- 
ness of the swing in 
earnings during this recession 
is perhaps partly a reflection of 
the growing enthusiasm 
among companies for manag- 
ing their earnings, a trend 
which FRS 3 has slowed rather 
than reversed. There is a great 
temptation for finance direc- 
tors, faced with a bad year or 
half-year, to throw as much 
bad news in as possible, 
starting next year with a dean 
sheet. This exaggerates the 
timing differences inherent in 
the two approaches to calculat- 
ing market earnings. 

In addition a market p/e 
ratio or yield Is not a single, 
monolithic figure suitable for 
all purposes. The official ver- 
sions calculated for the Indices, 
which appear each day in the 
FT, are “objective'' numbers, 
intended to provide the best 
yardstick of historical perfor- 
mance. Individual brokers, 
with different objectives, will 
produce figures which Inevita- 
bly differ. Such differences are 
to be welcomed as a sign of 
diversity of approach, not 
feared as a weakness of the 
credibility of the market statis- 
tics. 

An exposure, draft explaining in 
detail the methods used to cal- 
culate the earnings and divi- 
dend figures for the FT-SE 
Actuaries series of indices will 
shortly be available. Copies 
may be obtained, when pub- 
lished, firm the Indices Unit, 
London Stock Exchange, Lon- 
don EC2N 1HP and from FT 
Statistics, One Southwark 
Bridge, London SE1 9HL 


• 4 


■ : ~ 

Hill Samuel V • ' 
Base Rate - 

With effect from the close ofbusihess : 
on Monday 12th September, 1994 -* 1 
and until further notice, 

Hill Samuel Bank’s Base Rate is - * 


5.75% 


per annum. . 


AH 6tdlllies(indudinB«guiaied consumer tfedil . 
agreements) wiih a rue orintcrest t inted l o 
HOI Samuel Bulk's Bose Race will be varied acconlingly. 



Hill Samuel 

Bank 

lliti Samuel Bank Limited 
100 Wood Street, London EC2P 2AJ 

jMi^rra/VitSftwitJrtBiH/FtinrftAatlwTiO'. ... 


V? ts :■ ..*v. *$£- 


t.-w.m m er «■’ • 


j; :. i . e ff « ct 

: from close of 

: business 

on Monday 12th 
: : September 1994 
and until further 
■ notice, TSB Base 
j Rate is increased 
from 5i25°A> p.a- 
to 5.75% p.a. 

• AU facilities ($ncludmg regulated 

I . consumer credit agreements) with a - 

: rate of interest Jinked to TSB 

.1- Base Rate will fie varied accordingly. 



TOO BMfc 


The COOPERATIVE BANK 


BASE RATE 
CHANGE 


With effect from close of business 
on Monday, 12th September 1994, 
Co-operative Bank Base Rate 
changes from 5.25% p.a. 
to 5.75% p.a. 


THE CO-OPERATIVE BANK PLC. 

PART OP THE CO-OPERATIVE MOVEMENT 

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, r i > -nrS 


FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 


COMMODITIES AND AGRICULTURE 


Aluminium market bullish 
despite increase in stocks 


By Kenneth Gooding, 
Mining Correspondent 


A bigger-than-cxpected rise in 
producer stocks reported yes- 
terday took the aluminium 
market by surprise. But, once 
the initial impact was 
absorbed, the news made 
scarcely a dent on the market's 
bullish sentimen t and the alu- 
minium price seemed deter- 
mined to keep heading towards 
US$1,600 a tonne. 

Many analysts had been pre- 
dicting that the International 
Primary Aluminium Institute 
(IPAD would report producer 
stocks virtually unchanged. 

However, the organisation 
said total stocks, which had 
fallen every month since Feb- 
ruary, rose by 80.000 tonnes in 
July to 3.614m tonnes. 

Some traders pointed out 


that July marked the start of 
shut-downs for the northern 
hemisphere summer holidays 
in many aluminium consuming 
industries. Also, a fall in Lon- 
don Metal Exchange ware- 
house stocks in July - by a 
record 104,000 tonnes - more 
than compensated for the rise 
in producer stocks. 

They suggested that alumin- 
ium would go on to test $1,600 
a tonne, which analysts say is 
the the next important techni- 
cal resistance point 

There were words of caution 
from some observers, however. 
Mr Angus MacMillan, research 
manager at Billiton-Enthoven 
Metals, said the aluminium 
price was getting ahead of 
itself. 

"There are still huge stocks 
overhanding the market - 
about 14 weeks of consumption 


- and eventually the market 
will realise this and settle 
down to sideways trading. 
Things are often overdone In 
the early stages of a recovery 
and the first-quarter rise in 
[aluminium] prices is not sus- 
tainable to the year-end.” 

The output cuts made by alu- 
minium producers so Ear this 
year were "having an impact 
beyond their wildest dreams." 
As long as the producers stuck 
to their guns, there would be a 
supply deficit of about 400,000 
tonnes this year and one of 1m 
tonnes in 1995, he said. 

Consequently, Mr MacMillan 
is forecasting aluminium 
prices averaging 66 cents a lb 
this year ($1,433 a tonne) and 
75 cents ($1,653) in 1995. Alu- 
minium for delivery in three 
months on the LME closed last 
night up $5-25 a tonne at $1,592. 


Record 

soyabean 

harvest 

expected 


Crop fears lift potato prices 

Market jitters mean good news for beleaguered British growers 


T here is nothing like 
the suspicion of a 
shortage to stir up 
the markets - and 
the effect this has 
had on potato prices has put 
smiles back on the faces of 
Britain's 16,000 growers, 
Paradoxically, prices are ris- 
ing mainly because the crops 
growers are harvesting are 
producing below budgeted 
yields. Twelve months ago, 
when last year’s potatoes were 
being lifted, prices paid to 
farmers were around £60 per 
tonne. Excess supply kept the 
average ex-farm price around 
the same level until June this 
year. 

It was a barely break-even 
return for even the most effi- 
cient growers and resulted in 
substantial lasses. This year 
has been different - and looks 
like continuing that way. 
There are three main reasons 
for this. 

First, last year's losses led to 
a slight under - planting against 
quotas in spring 1994 by grow- 
ers who were feeling insecure. 
Not only had they madeto tally 
Inadequate returns on their 
1993 potatoes, they had also 
been forced to lift them during 
the wettest for years. 

Second, they were aware 
that the future of the Potato 
Marketing Board, on which 
they had relied since the 1930s 
to support the market, was 
under threat by Ministry of 
Agriculture and Fisheries. 

Third, the spring was wet, 
cold and late. This meant that 
most potatoes were planted 
several weds later than opti- 
mum, and soil temperatures 
were too low to promote nor- 
mal growth. 

Early g row th and maximum 
leaf cover before the heat of 
the summer are crucial to high 
yields, and in many cases this 

year that cover was not 
achieved in time - a problem 
which was made much worse 
by the July heatwave. This 
combination was potentially 
lethal for the potato crop, and 
20 years ago would have led to 
a truly disastrous shortage. 

Fortunately about 60 per 
cent of UK potato growers are 


By La urie Morse 
in Chicago 


MARKET REPORT 


Nickel up 
in strong 
trading 


France seeks lower 
rate of land set-aside 


By David Buchan 
in Paris 


Technical and speculative 
buying saw nickel’s price rise 
strongly on the London Metal 
Exchange, and by the close 
traders were suggesting that 
the metal was “seriously over- 
bought”. 

Successive waves of buy- 
stops were triggered when the 
price moved through $6,500 
and $6,600 a tonne, putting 
prices on course for a run-up to 
the year's highs above $6,900 
again, traders said. Nickel 
ended at $6,635 a tonne, up $215 
from Friday's kerb (after 
hours) trading. 

Coffee futures ended a thin 
session firmer as the market 
kept a nervous eye on the 
weather in Brazil The Novem- 
ber position was up $29 at 
$3,984 after pe aking at $4,010 in 
the morning. Weather Services 
Corporation said dry weather 
would lead to more losses. 

Compiled from Reuters 


France believes that, if the the 
European Union does not sub- 
stantially reduce the share of 
arable land set aside from pro- 
duction next year, the EU may 
have to decrease exports or 
increase imports, officials in 
Paris said yesterday. 

Last week the French gov- 
ernment sent the European 
Commission a long-promised 
memorandum containing the 
reforms on which Paris would 
like to see progress during the 
French presidency of the EU in 
the first half of 1995. 

In particular, France said it 
wanted to see the current 15 
per cent average rate of "set- 
aside” in the EU reduced "sub- 
stantially". Otherwise, the 
French calculate, EU cereal 
stocks could fall to close to 
zero next year after the fall 
from 20m to 10m tonnes this 
year. "Such a level would not 
be manageable" said an agri- 


culture ministry official. 

By French calculations, this 
year’s harvest of 158-lS2m 
tonnes, plus 5m tonnes of 
imports, would amount to 
some 10m tonnes less than the 
total of anticipated consump- 
tion of 140-l45m tonnes plus 
around 32m tonnes of exports. 
If stocks dropped to near zero 
"either we would not be able to 
export as much as permitted 
by the Gatt or we would have 
to increase imports”, said the 
official. 

Another French aim is to 
improve the competitiveness of 
EU agriculture to avoid Gatt- 
required cuts in subsidised 
exports. 

The limits to subsidising 
exports were illustrated in the 
past few days when France 
failed to firm up a preliminary 
contract to sell China up to lm 
tonnes of wheat because a 
Brussels offer of a subsidy of , 
Ecus 5 a tonne proved Insuffi- 
cient to bring the price low 
enough. 


The US Department of 
Agriculture boosted its esti- 
mate of this year's soyabean 
harvest yesterday, saying it 
wo’uld be the largest ever. 

The revised forecast of 
2.3l6bn bushels was up from 
an August estimate of 2J282bn. 
The previous record was 
2L26ibn bushels in 1979. 

The USD A also raised its pre- 
diction for the US maize crop 
to 9J257bn bushels. It had previ- 
ously forecast 9.2l4bn bushels. 

Mr William Biedermann, an 
market analyst for the advi- 
sory firm Allendale, Inc., said 
that projections for US maize 
production were likely to rise 
as the harvest continued. “Big 
crops get bigger,” be said. 

Although the forecast for 
record production weighed on 
soyabean futures prices at the 
Chicago Board of Trade yester- 
day, maize prices were higher 
at mid-session. “The USDA 
expanded its figures for domes- 
tic and export use for com, so 
carry-over stocks don’t rise,” 
said Mr Jerry GldeL grain ana- 
lyst with Dean Witter Reynolds 
in Chicago. 

Wheat prices also rallied as 
the USDA dropped its world 
carry-over figure to 119.4m 
tonnes, supporting traders' 
belief that the Australian 
wheat crop would continue to 
deteriorate. As wheat prices 
rise, it becomes less competi- 
tive with com for animal feed. 


CORRECTION 


Mr Michel Bal, project 
manager responsible for the 
Sadiola gold project in Mali 
from 1987 to 1989, has asked us 
to point out that the deposit 
was discovered by a German 
company, Klflckner Industrie- 
Anlagen, not the Canadian 
group mentioned In a Finan- 
cial Times report on August 25. 


FARMERS VIEWPOINT 



By David Richardson 


now able to irrigate their 
crops, saving a great many 
potatoes from being virtually 
burned in the soil. It also 
ensured that, although 
reduced, domestic supplies 
should be adequate - with a 
little luck. 

That luck will be needed dur- 
ing the next few weeks as the 
so-called maincrop potato har- 
vest gets under way. Provided 
there Is not too much rain, the 
remaining acreage should be 
gathered safely, guaranteeing 


supplies until next spring. It is 
the possibility that the weather 
could turn wet again - and 
that this could cause losses 
when supplies are tight -that 
is presumably behind the 
feverish futures market and 
the high spot prices. 

For most formers are being 
paid at least £100 per tonne - 
and in some cases £150 per 
tonne - more for potatoes this 
year than last. And the futures 
price, for next May went up last 
week to £240 per tonne. 

Given that this year’s antici- 
pated tonnage is 5.5m-5.6m 
tonnes, compared with about 
6.2m tonnes last year, it may 
appear difficult to understand 
why prices should be so much 
higher. 

One reason may be that 
there is a shortage of alterna- 
tive supplies from Europe. In 
Amsterdam and Lille, for 
instance, potato futures mar- 
kets are said to be even more 
excited than London's. 

The same weather which 


Tesco complains of 
neglect of customers 


By Alison MaMand 


The UK potato industry pays 
too little attention to Its cus- 
tomers, Tesco, the supermar- 
ket group, said yesterday. 

Mr Andrew Batty, Tesco’s 
fresh produce trading man- 
ager, told the World Potato 
Congress in Harrogate, York- 
shire, that consumers wanted 
quality, value and reassurance 
that toe food they bought was 
health-giving and produced 
with the Ttifrifmmri of chemi- 
cals. They were also spoilt for 
choice. 

Yet he said: "One of the 
things that continues to amaze 
me about our industry is how 
much emphasis we put on toe 
growing side of the business 
and how little we put Into 
understanding what the cus- 
tomer wants." 

Mr Batty told the Congress, 


attended by delegates from 
abant 60 countries, that the 
supply chain had to become 
more efficient if growers, pro- 
cessors and supermarkets 
were to make enough money 
to survive and re-lnvest 

Tesco lias just commissioned 
research from Adas, the gov- 
ernment’s farm advisory ser- 
vice, into the feasibility of sup- 
ply contracts between the 
group and growers. 

Mr Batty acknowledged that 
growers faced an uncertain 
future with the abolition of 
the statutory Potato Market- 
ing Board in 1997. 

“In periods of uncertainty 
it’s always best to concentrate 
on what one does best It is np 
to ns to get on with the busi- 
ness of selling potatoes, as a 
team dearly focused on pro- 
viding what the customer 
wants.” 


COMMODITIES PRICES 


BASE METALS 


LONDON METAL EXCHANGE 

(Plica from Amalgamated Metal Trading] 

■ ALUMINIUM. 89.7 PURITY (S par tonne) 


Precious Metals continued 

■ GOLD COMEX (100 Troy tu.: Srtroy as.) 


GRAINS AND OIL SEEDS 

■ WHEAT ICE (E per tome] 


SOFTS 

■ cocoa lce te/axm*} 


MEAT AND LIVESTOCK 

■ UVE CATTLE CME (4fl.000toa; centa/ltw) 


CROSSWORD 

No.8,557 Set by DANTE 


Cash 

Close 1668-9 

Previous 1563J5-4.5 

Hgh/low 

AM Official 1565.5-6 

Kerb dose 

Open int 275.483 

Total dally turnover 51,008 
■ ALUMINUM ALLOY (S per tonne) 


3 mtfn 
1591.5-2.5 

1588- 7 
1594/1586 

1589- 9.5 
1591-2 



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Dofta 



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ctangi 

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price i 

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3809 

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10025 

■015 

10625 

10600 

195 

9 

Sot 

943 

-12 

964 

Oct 

391-8 

-OS 

393-0 

381.7 

9.620 

1888 

Not 

10720 

■OJO 

107.40 

1074)0 

2,778 

6* 

Oac 

988 

-14 

1009 

NOT 

393.4 

-09 

- 

- 

• 

- 

Jn 

10020 

•035 

loaao loaao 

I4I0B 

7 

mr 

1017 

-16 

1040 

Dm 

‘ 394J 

-09 

395S 

384a 85.742 48.310 

Mm 

111-30 

■oao iii.no mao 

1J098 

103 

MOT 

1029 

-ia 

1051 

Ml 

m2 

-09 

3992 

388.0 10447 

IJ0I 

May 

-11035 

-(Lffi 

113.10 

11110 

1,181 

5 

Jnl 

1041 

-18 

1080 

m 

401.5 

-09 

■WOO 

401.8 

6,794 

75 

Jri 

115.70 

- 

- 


101 

- 

SOT 

1057 

-14 

1082 

Total 




184A8B 50048 

Total 





7<M9 

188 

TOM 





Opn 

dm fat Vri 
980 71 10 

985 30,123 3l<9 


■ PLATINUM NYMBt(50 Troy oz.; Mroy oz:) 


■ WHEAT C8T (5OQ0UJ min; canta/BOb huatwl) 


Jnl 1041 -19 1080 1053 SUM 40 

Sep 1097 -14 1082 1058 9.184 77 

TOM 100348 7,832 

■ COCOA CSCE ftp tonno; S/tonnea) 


Sett Oaf* Open 

price change Ugh Lm M W4 

69.750 -0-850 71300 60.850 33JJ10 6.472 

99.125 -0.826 70250 60825 10541 3250 
87-550 -0800 88850 67800 11JB88 1,140 

99250 -OJ90Q 70.190 90225 7882 384 

68250 -0800 67850 88250 1838 94 

66.000 -0475 88.000 55890 913 12 


74,109 11263 


■ LIVE HOGS CME (40,0000*: carrts/lbe) 


Close 

1570-5 

1588-90 

Previous 

1577-82 

1637-8 

HflMow 


158Q/1588 

AM Offtcbl 

1570-5 

1584-90 

KertJ closa 


1588-92 

Open tro. 

«L839 


Total daWy turnover 

289 


■ LEAD ($ per tonne) 



Close 

011-2 

6KL5-3 

Previous 

608^-9.5 

620.5-1 

High/low 

809 

825/620 

AM Offlcwl 

608.5-9 

621-IJ 

Kerb close 


823+4 

Open ini. 

40.893 


Total dally turnover 

7.539 


M NICKEL (S pa tonne) 


Close 

6480-5 

8575-80 

Previous 

6305-10 

6J00-6 

teghtoe 


8843/8445 

AM Official 

6380-90 

B480.S 

KoTO Ooso 


6835-40 

Open mr 

53^23 


Total daily twnavw 

14®8 


M TIN ($ per lonnoj 



Close 

5315-25 

5390-400 

Previous 

5345+50 

5420-5 

High low 


545Q/5350 

AM Official 

5355-80 

8430-2 

Kero dose 


5345-50 

Open on. 

17,158 


Total datfy turnover 

4.46S 


■ ZINC, special Ntfi grade |3 per tonne) 

Close 

972.5-3.6 

995-8 

Prevtaua 

974-5 

990-7 

HI qtVtow 


999TO93 

AM Official 

970-Q.5 

9M.5-4 

Kerb dose 


996-7 

Open vit 

96.918 


Total daily turnover 

21^45 


■ COPPER, grade A (5 per toima) 


Close 

2497.5-8 5 

2514-5 

Previous 

2481-2 

2498-7 

HtfiHlow 

2482 

2522/2490 

AM Office 

2482-2 5 

2499-500 

Kerb dose 


2516-6 

Open ml 

215.484 


Total daily turnover 

36.635 


■ LME AM Official E/S rate: 1.5606 


Oct 

418.7 

-ZB 

422J 

4185 

15.158 

2J17 

sot 

380/0 

+40 

382/0 

373/4 

888 

350 

SOT 

1280 

■8 

1285 

1285 

48 

4 

Oct 

38.400 

-0225 38250 38300 

1(294 

1J41 

JM 

432.0 

-28 

4265 

420.5 

7307 

782 

Dec ' 

394/4 

+4/0 

398/0 

389/0 48£38 

14^13 

Dae 

1332 

-16 

1362 

1330 42^70 5£25 

Dae 

39826 

-0050 39700 39275 10/688 

1206 

AW 

4263 

-3J 

4315 

429.0 

2.050 

102 

Mar 

401/2 

+4TO 

402/4 

385 tO 

1BJ32 

2.654 

Mar 

1379 

-12 

1402 

1378 

1&823 

518 

Fob 

36.775 

-0.100 39950 33.776 

3235 

(01 

JN 

429.7 

-13 

4350 

430.0 

461 

- 

Mai 

386/0 

+2/8 

390/0 

383/D 

1,917 

276 

Mar 

1407 

-15 

1428 

1407 

3JB52 

67 

A W 

38200 

-0225 38350 39.150 

1299 

81 

Oct 

432.4 

•33 

- 

- 

227 

125 

Jnl 

358/4 

+2/2 

359/4 

3S2/D 

3.189 

428 

M 

1435 

-15 

1482 

1438 

W38 

124 

An 

44.450 

-0060 44.460 44275 

844 

« 

TOW 





25,703 

3£» 

sot 

360/0 

+2/4 

380/0 

380/0 

18 

- 

SOT 

1455 

-15 

- 

- 

1^06 

1 

Aog 

43.100 

-0050 - 43.100 

80 

6 

■ PALLADIUM NYMEX (100 Troy oz.; SAroy cel) 

Total 





71^40 18^21 

Tatal 





72N03 6^27 

Total 



2B28B 

3/033 


Sep 148.95 -385 151.00 148.15 91 34 

Dec 14085 *380 153.75 147.75 5817 1JM4 

Mv 15070 -180 15180 15000 977 303 

JOT 151 70 -380 - - 51 

Total 8838 1801 

M SILVER COMEX (100 Troy oz.; CantaAroy oz.) 


■ MAIZE C8T [5.000 bu mfci; cena/58to flujhejj ■ COCOA QCCQ) (SDR*a/tanne) 


■ PORK BELLIES CME (40800lba; oentaflbe} 


5472 -38 5408 5438 713 68 
5498 38 - - 7 2 

5518 -38 - - • - 

5515 -32 5558 5498 82.775 27874 

5519 -3.0 - 58 1 

561.B -38 6848 5578 8891 410 

108,119 28275 


ENERGY 

■ CTUOE OIL NYMEX (42.000 US gatt. S/twrel) 

Latest Day's Open 

price dnage Ugh Lm W M 

Oct 17.46 -087 1780 17.43 70.912 49838 

HOT 17 05 -081 17.73 17.81 70668 28833 

Off 1785 *004 1780 17.77 50452 17.585 

Jen 1783 *4.09 17.03 1782 34.751 <2*4 

Feb 17.91 +0.05 1784 1788 20819 2203 

mr 17.90 - 14869 2210 

Total 398882107248 

■ CRUDE OB- IPE (S/b3mH) 


Sen 224/4 *-1/4 22STO 221/2 7885 3263 

Dec 226/8 *2/6 227/2 222/0132.021 18886 

MM 238/3 -2/0 236/4 230/4 32830 3,444 

May 242/4 +2/6 343/4 237/6 12835 1865 

Jta 248/8 +2/4 247/0 242/0 12,493 885 

Sep 248/0 +1/2 248/0 245/8 955 20 

Tend 203889 28,266 

■ BARLEY LJC6 (E per tome) 

Sep 103.60 -0.15 32 

HOT 10480 -0.15 104.65 104.50 490 7 

Jen 10780 -0.10 10780 107100 339 3 

Her 109.00 -a IS 10980 10980 78 3 

Key 11090 21 

Total 988 13 

■ 30YAJ3EANS CUT (5.000UU o*t Mrts/606 bushel] 


■ COFFEE LCEp/tame] 


SOT 

4093 

+30 

4100 

4080 

Z106 

88 

NOT 

3082 

+27 

4010 

3980 

12311 

2084 

Jao 

3923 

♦10 

3960 

3815 

13.386 

332 

Mar 

3898 

- 

3870 

3860 

6,481 

222 

Mar 

3600 

+8 

3820 

3800 

1238 

48 

JM 

3780 

+18 

3800 

3795 

338 

e 


FOT 

41.425 -1200 43200 41200 

7207 

1213 

Mm 

41275 -1275 42860 41.150 

461 

27 

May 

42050 -1.850 43.150 42050 

93 

5 

Jri 

43250 -1250 44250 43JJ00 

125 

16 

-total 

42700 -0800 - 42700 

30 

7208 

2 

1293 


37,190 

I ‘C 1 CSCE t37800jbe; conts/lba) 


LONDON TRADED OPTIONS 

Strike price S tome — drib Puts — 


Sep 587/0 +1/8 588/0 574/0 4882 753 

NOT 580/2 +4/8 581(0 HI/D 78.494 14330 

JM 588/0 +4/6 588/4 571/0 14883 1.356 

Mar 597/4 +5/2 69845 560/0 7.686 1.405 

May 603/0 +3/4 803/0 5891/4 4807 207 

Jul 608/6 +4/0 609/C 595/4 8,284 57 

Total 1228*1 19887 

M SOYABEAN OIL C8T (tSO.OOOba: carna/to) 


31780 +880 21750 21150 188 15 

22480 +780 22580 218J5 22.732 3,427 

22S8S +880 22585 22080 7840 505 

22780 +880 22780 221.25 3870 324 

228.00 +8.00 22750 224,25 7BB 74 

22980 *880 22550 22580 367 1 

84829 4 8» 


M COFFEE [ICO] (US ranta/pound) 


Latest Qay'i Open 

price change Wgb lav. M Vt* 

1529 +087 1685 1881 59.159 18575 

I&48 *883 16.50 16.39 49.001 11537 

16.84 *8.04 1855 1851 24870 2.150 

1655 *0.01 16.70 iaaO 11,126 1,166 

- 5.400 80 

1572 +0.12 |872 1572 3,047 280 

N/A 34,780 


2659 *841 26.70 23.95 5,773 2817 

2543 *0.45 2547 2502 15539 3572 

2513 +052 2518 2552 38897 5631 

Z5.B3 +0.48 2355 25.02 3,910 440 

25.45 +088 25.50 24.70 7514 1838 

25.15 +032 212 0 24.40 4,132 153 


M SOYABEAN MEAL CBT (100 tone: S/ton) 


Sep, 8 Price Pie*, day 

Comp- dafly 200 A3 19548 

15 OTy empe 19085 1B583 

M NoT PBEMOIM RAW SUQAH LCE (cente/lba) 

Oct 1254 +086 - - 1501 

JM 1182 .... 

HIM 12.51 +082 90 

Total 1591 

■ WHITE. SUGAR L/CE Bftwwj 


LIME Ctostnq E/S rate 1-57QQ 

SpoL-15703 3 RAM 5878 6 DiDKl 5649 9 (TWS 1.5599 

■ HtQH GBAOE COPPER (COMEX} 

tafj Open 



Boot 

ehMige 

Wgh low 

tat 

Vol 

Sap 

121 10 

+325 

121.10 11900 

5.448 

1207 

Od 

11765 

*1.80 

11785 11640 

1.OT5 

449 

NOT 

11725 

♦1.95 

11700 Uft60 

674 

42 

Ok 

<16 85 

+£00 

117.00 11420 

35.835 

5274 

Jan 

11625 

+190 

114.75 114.75 

539 

G 

Fed 

115.85 

♦180 

11S2S 11500 

xa 

44 

Tate 




am 

82U 


M HEATING On. NYMEX >43,000 US gats.; c/US gaftL) 

Latest Day's Open 

price change Hfati low int 1M 
Oct 4350 *513 4389 4985 39,359 11.348 

Nov 5055 +021 50./0 50.35 19,145 1,613 

Dee 5150 +0.17 .51.70 5185 37857 2J69 

Jan 52.30 +022 52-42 52.15 23857 1804 

FtB 5280 +0.17 52.60 5280 10897 1.035 

H*r 52.10 +0.37 62.10 52.00 3806 132 

Total H38S9 18,771 

■ GAS OL IPE (Sfanw} 


SOT 

1727 

*03 

173J) 

1609 

5313 

1297 

Oct 

170.2 

- 

1706 

168.0 

12846 

2333 

Dec 

1712 

*0.4 

1715 

1B8.0 36279 

5375 

J« 

1725 

+0.4 

1725 

1520 

8301 

869 

Mm 

1712 

+02 

1752 

1725 

8355 

463 

May 

ToU 

178.0 


1762 

174.0 

4.789 65 

79,796 11363 


33250 +280 33280 330.10 B.154 4890 

328.70 - 327.70 32850 3855 704 

329.60 -0.10 32780 326.10 8,981 696 

328.70 +050 327 JO 32350 634 149 

326.70 -Q.10 32750 32850 408 14 

31020 +0.40 31180 310J0 231 12 


(99.7%) LME 

Od 

Jan 

Oct 

Jan 

1560 

49 

157 

19 

47 

1575 — . 

34 

99 

29 

67 

isnn 

23 

oa 

43 

144 

■ COPPER 





{Grade A] LME 

Oct 

Jan 

Oct 

Jan 

2400 

117 

167 

a 

47 


46 

99 

39 

87 

2HO 0 , 

13 

66 

104 

144 

■ COFFEE LCE 

Nov 

Jan 

Nov 

Jan 

360Q 

456 

541 

74 

226 

3850- 

4 30 

512 

86 

248 

3700 





■ COCOA LCE 

Dec 

Mar 

Dec 

Mar 

975 

53 

100 

42 

56 


41 

87 

66 

70 

1M1 

2S 

66 

69 

96 

■ BREKTCKUOEHPE 

Oa 

Nov 

Oct 

Nov 

iflOO 

. 

. 

3 

33 


4 

48 

- 

S3 

1700 . 

2 

31 

- 




■ POTATOES LCE (E/tonng) 


Apr 2185 -25 248 2188 1.424 S3 

Bay 2408 

Jim 1075 

TatM 1.04 53 

m FBaoKT (BiFreq LCE (Sio/todax paint) 


Od 31020 +0.40 31180 310J0 231 12 

Total 17563 5,754 

M SUGAR IV CSCE (112,000878; COTOAba} 

0d 1250 +084 1285 1254 37,196 6j048 

Mm 1254 +081 1438 1230 76883 7,183 

■tty 1251 +083 1254 1257 11878 1577 

M 12. IB *083 12J0 1214 6805 1808 

Od 11.98 +083 1280 1158 2811 415 

Mar 1159 *084 1150 1159 611 68 

TdM 13589419899 


LONDON SPOT MARKETS 

M CBUQ6 OIL FOB [per bafflel/Oct) +of 


■ COTTON NYC6 tSMOMWi canta/toa) 


Sett Days 
price change MgO 


PRECIOUS METALS 

■ LONDON BULLION MARKET 

(Pncca supplied by N M RotrachM) 


Sep 18150 - ISO 75 149.00 19880 7,968 

Od 15129 -155 1 54 80 15275 35,447 8,(53 

Nw 15680 -150 156-73 155.75 14.025 1.485 

DM 15225 -150 159.00 158.00 18.479 545 

JM 139.75 -150 160.00 (59.25 12398 422 

Feb 150.25 -150 16025 16000 4.632 £1 

Tdal 113,446 18811 

M NATURAL GAS NYMEX (10800 mmBEu.: S/rnnBOi.1 


Gold (Troy or. | 
Ctoao 
Opening 
Morning Rx 
Afternoon Rx 
Day’s High 
Day’s Low 
Previous dose 
Loco Ldn Mean 

1 month 

2 month s 

3 months 
SOvir Fta 

E3 months 
n months 


S pnee £ equtv. 

391.M-M1.60 
Ml 80-39220 

Ml .50 250.801 

391.10 250.721 

392-20-392.60 
39080-38180 
391. 60-39210 

GoM Landing Rates (V* usj) 

— 456 6 months 455 

.. ..487 12 morons „4.94 

4 41 


latest Day's 

price change High Urn 

1.551 +8.017 1.665 1825 
1.930 +0827 1 935 1.880 
1105 *8018 2.120 2.075 
2.135 +0813 2.140 2.113 
2075 *0813 2870 2855 
2025 +0.018 2025 2010 


Open 

M Ifad 
38227 7,307 
21.420 3816 
27,025 18*2 
14.997 783 

12,361 541 

M24 475 

158358 18516 


SOT 

I960 

+20 

1565 

1656 

471 

an 

Oet 

71.97 

-033 

7220 

71.75 3204 

S29 

Od 

1565 

♦18 

1580 

1565 

816 ’ 

47 

Ok 

7083 

490 

71/00 

7041 26,708 5JM4 

No* 

1573 

+17 

157S 

1575 

74 

3 

HM 

71.78 

-064 

72.15 

71.70 9230 

37? 

Jn 

1542 

+14 

1530 

1530 

536 

5 

«■ or 

7282 

463 

7115 

7230 4,885 

217 

Apr 

1550 

+20 

1555 

1550 

22S 

& 

Jnl 

7152 

451 

7325 

7150 1404 

65 

Jri 

1383 

-8 

- 

- 

60 

. 

Od 

7047 

403 

TOM 

7030 412 

6 

tote 





2372 

87 

Tatal 




48,779 B.381 


Base 

Riot 





■ ORANGE JUKK NYC E [IS.OOOttw centa/baj 

m 

1485 

148$ 





Sot 

84.85 

+OB5 

84.10 

8160 121 

23 








Not 

6825 

+090 

KWO 

6090 11,741 

808 








Jau 

8210 

+1.00 

9220 

9070 5274 

431 








Mm 

98.00 

+120 

86-10 

94J0 3J618 

187 








May 

9925 

*02S 10050 

»S5 880 

3 








Jri 

101.75 

425 

- 

- 496 

1 








Total 




22280 


■>*d 315.44-6.4St -0.105 

Brant Blend (dated) $16.87-0.89 -8078 

Brwn Blend (Oct] S182S-827 -81SS 

W.TJ. (1pm m] $1780-7.51 -0.185 

■ ON. PRODUCTS NWEprompt dsfaraiy OF (tonre) 

Ptemlwn G&solna S183-1B7 -30 

Gm OB S1S4-1SS *0 

Heavy Fuel Ofl $71-72 

NBpWha $160-181 -ta 

Jet Kiel $172-173 -18 

Abofeum Ague OT w nwe n ci 

■ OTHER 


ACROSS 

1 Toadies engender a feeling of 
revulsion (6) 

4 Famous actor needs projec- 
tion to reach his audience 

(4-4) 

9 it’s unpleasant but return to 
discharge debts (6) 

10 A double-first (4,4) 

12 Waiting without complaint 
for a game (8) 

13 One insect let out another (6) 

15 Utter a line (4) 

16 A swinging alternative! (10) 

19 Attribute of the successful 
gear selector (5,5) 

20 Macho boss (4) 

23 He helps soldiers to dress (6) 
25 Pushed the boat out in Paris? 
(4.4) 

27 Note strange sort of desper- 
ado (8) 

28 Indeed upset when refused (6) 

29 The way the firm do things? 
( 8 ) 

30 Master-switch for the current 
16) 


DOWN 

1 He gathers the harvest in the 
fall (7) 

2 Being in the wrong scene 
with the wrong exit (9) 

3 Hesitated to have father taken 
advantage of (6) 

5 I dry up dessert dishes (4) 

6 Evil dame around a long time 
ago (8) 

7 Lifting the foot (5) 

8 About to shout the order to 
withdraw (7) 

11 O to be in credit for one 
month] (7) 

14 It’s sweet, I observe, and 
round (7) 

17 Raise cost somehow, or get 
cut off (9) 

18 Estimated tax liability? (8) 

19 Mather takes a long time 
obtaining reparation (7) 

21 A noble estate (7) 

22 Way in which Somerset folk 
live (8) 

24 Row in the kitchen (5) 

26 Went over the hill (4) 


Solution to Saturday’s prize puzzle on Saturday September 24. 
Solution to yesterday's prize puzzle on Monday September 26. 


The good general demand eonthuod, reports 
tea Tea Broken' A s sociation, Quaitv and oaod 


■ UNLEADED GASOUtC 
NVMB (42.M0 UStpfej oUS paNsJ 


O' trey os. 

US eta equtv. 

35220 

551.00 

357.75 

55720 

362.75 

56420 

37085 

560.90 

.?prt5e 

£ oquv. 

®4rS97 

256-256 

)1.6Q-»Q4 35 

- 

frt-94 

59-65 


Uteri Day's Open 

Price *«W WaA Um tat Vnl 
4780 -087 47.95 47JH 27063 15878 

4785 -028 4785 4780 15.788 4.541 

54.60 +432 54,65 5485 9A15 1.714 

53.60 +017 53.70 535S 5488 671 

5385 +0.15 5385 5380 3,578 522 

5485 - - - 786 108 

88 /NB 23,047 


ttw Tea Broken' As so ciation, Qjaity and good 
medium Aseams acid veil at around few levels, 
but medum types were easier. Brightest east 
Africans were Ally firm, with medums and 
coloury central Africans often dearer. Low 
- meduma remaine d steady. Ceylon* soM reacNy 
at dearer leweia. with the brighter Ones 5-8p 
dearer. Good demand « Kim rates. The few 
Assams on alter were unsold. Quotations: best 
available SOOp/kg, good I46p/kg, good 
medium 136 p/kg, medium 120 p/kg, low 
medium Bepfflg. The highest price rwfc»d this 
week was 2Sflp/kg tor an Assam pf. 


VOLUME DATA 

Open Interaai and Volume data shown tor 
contracts traded on COMEX, NYMEX, CST. 
NYCE, CME, CSCE and IPE Crude Of m one 
day In arrears. 


Gold (bar trey oa4 
SAver (portray paJX 
Ptataiuni (per troy <a) 
Palladium (par troy at) 
Copper (US prod) 

Lead (US prod) 

Tin (Kuala Lumpur) 

Tin (Kfcw Yorij 
Cable (Hw welgMJFD 

Shsep gvs vroigfti}to« 
Pigs Phra we/ghtl© 

Lon. day sugar (raw) 
Lon. day sugar (wle) 
Tote & Lyle export 
Barisy (Eng. teed) 

Mato (US Nc3 Ysflow) 
Wheat (US Oam North) 
Rubber (OcflY 
Rubtwr {Nov)V 
Rubber KLRSB NOT Aug 


Coconut Ol (PW3§ 

Palm 08 (MateyjS 
Copra Ph«i 
Soyabeans OJS) 

Cotton Outlook 'A' Index 
WOoltops (B4s Super) 


INDICES 

■ REUTERS (Bom: 18/9/31=100) 


Sep 12 Sep 8 month ago year eon 

208&0 soots sosoj is&s 


$391.40 

5446c 

$41080 

$181.78 

TZLOC 

3886c 

1152m 

245.8c 

11758p 

88-03p 

njap 

$304.10 

$342.80 

£307.00 

todfjow 

$1300 

£1800 

aooop 

se.oop 

313X0111 

saoooz 

saswh 

MBOH 

ClO&OOu 

70.00c 


Of broking and jobbi ng the PeUkau's fond. 

See how sweetly he puts your nvrd onto bond. 

Mlkaa 0 


■ CUB Futures (Base: 1987-100) 


G par Wnne union oSnmba *UMd p poncotte- c omtafla. 


Sap® Bap® month ago year eg 

232-94 232.60 22070 2111/ 


r itaOQWkg. m Mdawtwi eMs/kg. u Nov. i Ori. 1 9ap43cL 
» Sap . T London Phyricta. fi cm RoBa rta m- 4 a*on 
nertw dew, % toeep Ohs eeHW pricWL * Chwiga qn 
vntac. O Prfeaa an> ter ptnkus day. ■ 


JOTTER PAD 


, :SL>it' eS 


reduced UK potato yields also 
affected crops In Holland and 
France, and those countries 
which can usually be relied 
upon as sources of cheap sur- 
pluses are unlikely to be abla 
to oblige this year. 

There will be plenty of happy 
faces at this week's potato har- 
vesting demonstration near 

York, for there are few form 
crops which respond to the 
suspicion of a shortage more 
dramatically than potatoes. 

This buoyancy has led to 
headlines In the tabloid press 
saying that retail potato prices 
will double or more during the 
coming winter. The sources of 
these stories can only be 
guessed at, but are they justi- 
fied? 

^*’■"‘>4 onsider these fig- 
M * ureS- - The current 

■ ex-farm price for 

m .top quality King 

S Edward potatoes 
is £200 per tonne, or 20p per 1 eg. 
The wholesale price for the 
same grade and the same vari- 
ety is 24 per kg. 

But last weekend the retail 
price for King Edwards, packed 
in plastic bags of 2.5kg at my 
local supermarket, was 66p per 
kg - or £660 per tonne. 

Now I am am well aware 
that packing, transporting and 
displaying potatoes on shelves 
costs money. But, although I 
am only a thick old farmer 
who does not fully understand 
such things, I would have 
thought there was a sufficient 
margin between the wholesale 
price and retail price for a fair 
proportion of the kind of ex- 
farm increases I have described 
to be absorbed without signifi- 
cantly affecting profitability. 

Retailers often say that con- 
sumers prefer price stability. 
No doubt that is why they hold 
prices higher than they need to 
be when wholesale levels fall. 

Many fanners believe that 
policy has governed the retail 
price of potatoes over a num- 
ber of years. The coming win- 
ter will be an ideal opportunity 
for those retailers to demon- 
strate that they really do 
believe hi price stability - even 
when the market goes mod- 
estly against tham. 


|uildirt9 

lector 

iiset 


"X 


’ ‘F- 1^' 


«... 




-* • --'vast 




-” 7 " 






** 





) 


FINANCIAL TIMES 


TUESDAY SEPTEMBER 13 1994 


35 


LONDON, 45TOCK EXCHANGE 


MARKET REPORT 


FT-SE-A All-Shar* index 


Equities stand up well after base rate news 


Equity Shares Tradad 

Tbmcmr by tnAra ftntfltan)- fecgkjdng; 
Irtn-fTwteM business Ml ommum turnover 

UNO 


c 


By Terry Bytand, 

ISC Stock Market Ecfltor 

Tte V4 percentage point rise in the 
Bank of E ngl and’s key lemriw 

fafled to upset the UK stock market 
to any significant degree. Market 
strategists applauded Mr Kenneth 
Clarke, the chancellor of the exche- 
quer, for his courage in matririg a 
pre-emptive . strike on base rates 
without waiting for inflationary 
pressures to reach threatening pro- 
portions. The rate Increase was 
thought unlikely to nhepfr signifi- 
cant ly the recovery in the OK 
economy, or in company profits and 
dividends. 

By the close of trading the FT-SE 
100-share Index had recovered more 
than half of its initial fan, with the 
final reading of 3.12K8 showing a 
net loss cf only 10.5 points - by no 


means a serious setback. The equity 
market took its lead from the UK 
government bund market, where 
long-dated faqnns ninwori ve r y firmly. 
At least one leading securities 
house raised its forecasts for both 
the UK economy and the Footsie 
index, while at the same time 
predicting that interest rates 
could reachB per cent by the end of 
next year. 

The timing of the Bank’s move 
caught out some traders who lad 
relaxed their interest rate w»T|Hqn 
after last wade’s meeting between 
the chancellor and the Governor of 
the of Tfrigiarwi fc gd appeared 
to pass off without drama. 

But the disclosure yesterday 
morning that UK producer output 
prices had. risen by an unexpected 
0.3 par cent in August halted an 

initial Ini pH n/^r pAr^ in share prices 


and gave the market 20 minutes 
warning of a possible move on 
- Interest rates. 

Shares quickly plunged whan the 
news came, driven by determined 
selling of stock Index futures by 
the locals, or independent, futures 
traders. 

‘ Within an hour, the Footsie had 
transformed a 1.9-point gain to a 
loss of 253. However, the 3JJM mark 
proved to be the day’s low and most 
of the gain had been recovered as 
London waited for Wall Street to 
reopen after its uncomfortable ses- 
sion on Friday. 

In the event. Wall Street waa only 
8 Dow points off in UK hours, bid 
sadden weakness in the US dollar 
hit the blue chip international 
stocks in the UK market and 
pushed the Footsie down again. 

The focus also fell on interest- 


■ related stocks. Store and retail 
issues performed fairly well, with 
• the leaders showing either very 
modest losses or, in some cases, 
holding steady. There were casual- 
ties among the houseb uilding com- 
panies, which faced two adverse foo- 
ters; higher base rates hit their 
costs and the danger of a rise in 
mortgage rates - some building 
societies said yesterday they would 
■’ raise rates - threatens the still frag- 
ile recovery in the housing market 
The second line stocks, having 
joined in the general shakeout in 
- the market were slower than the 
blue chips to respond to the 
improvement in bonds. The FT-SE 
Mid 250 Index closed 22.7 down at 
3,7133. 

But trading volumes were moder- 
ate, with the Seaq-repoited total of 
484.6m same 25 per cent down from 


Friday's figure. Retail business on 
Friday was worth £L28bn. 

By the dose, the market’s atten- 
tion was switching to prospects for 
today’s US consumer prices data, 
which could renew Urn pressures on 
tbe Federal Reserve caused by the 
producer price figures announced 
before the weekend. 

There was also uncertainty sHmH 
of the Bundesbank policy meeting 
on Thursday, with some analysts 
suggesting that German rates could 
still be reduced. 

On the domestic front, the market 
faces the retail price index for 
August, due tomorrow. Although 
any sting in these figures appears 
to have been drawn by the pre- 
emptive move on base rates, some 
traders warned that any sharp rise 
in RFZ could still upset the stock 
market. 



.m 

SBunac FT StspNea 


■ Kay Indicators 
bxHoaa and ratios 

FT-SE 100 31280 

FT-SE MM 250 3713.3 

FT-SE-A 350 1582.9 

FT-SE-A AD-Shara 1572.85 
FT-SE-A AB-Share yMd 3.61 

ptfonwi na ■a cto n 


Ufa Assumes 


3 Spirits, Wines & Cidar 

4 Rataltorm. Food 

5 Household Goods . 


-10.5 FT Ordinary index 2425.3 -1.3 

-22.7 FT-SE-A Non Rn» p/a 19.38 (10.47) 

-83 FT-SE 100 Fut Sap 3112.0 -14.0 

-6.13 10 vr OIK vMd 882 warn 

(3.70) Long giWaquItyyld ratio: 2.31 (234) 

Worst performing a acto rs 

„ +1.2 1 Butting A Construo -20 

. +0.8 2 Talacomtnunlcatkxn --1.2 

- +0.4 3 Transport -1.2 

+03 4 Water -1.1 

+&2 5 Butting Materials — -1.0 


Building 


> of 

mers 


upset 


News of the % percentage 
point rise in UK interest rates 
shocked the bonding and prop- 
erty sectors of the markets and 
caused marketmakers to mark 
down share prices in those 
. groups to head off any selling 
pressure. 

In the event there was no 
heavyweight selling in either 
sector. Share prices embarked 
on a modest rally later in the 


session, although they closed 
well down on tbe day. 

One Trading martormalr+r in 

building stocks the s ec tor 
had been under substantial 
pressure last week when seri- 
ous talk of possible interest 
rate rises first began to circu- 
late. "Most of the selling was 
done t h e n ; if anything , tha rate 
rise has cleared the air,” he 
said. 

Building sector analysts took 
tiie view the mark et bad 
mostly factored iriiate rises. 
Mr Simon Brown, buUdiiig ana- 
lyst at SGST Securities, com- 
mented: The impact on the 
housebuilders will be more 
psychological than actual. If 
anything it could tip prospec- 


tive buyers over the edge. If 
they think interest rates are 
going up they will want to 
move quickly to close their 
mortgage arrangements." 

Analysts said the rate rise 
would have little Impact on the 
big bufiding mat e ri als groups, 
which derive much of their 
earnings from overseas. 

In the housebuilders, Barratt 
Developments dropped to I9lp 
before steadying to dose a net 
14 off at- 214p; the company 
reports interim figures next 
Wednesday. Wilson Connolly 
dipped 8 to 203p and Wilson 
Bowden 11 to 397p. 

Land Securities, the premier 
property stock in the UK mar- 
ket, fell 7% to 6L5ttp, with a 


EQUITY FUTURES AND OPTIONS TRADING 


Stock index futures ran Into 
some heavy selling following 
the announcement of higher 
UK interest rates, but staged a 
good rally later when trading 


volume died down.-- 
At the dose the September 
contract on the FT-SE 100 
Index. -which expires- at die 
end of die week, stood at 


■ FT-se loo amex futures (uffq ess p»m into point 


W*T) 



r. 



Opan 

Salt pries 

Changa 

High 

Low 

Eat-vol 

Opan bit 




Sap 

31320 

31120 

-140 

3140.0 

31010 

17^33 

30757 



■ ’il_: 

Doc 

31480 

3125.0 

-140 

31600 

31170 

7193 

30077 


* 

* 

Mar 

31590 

31640 

-130 

31840 

31600 

- 100 

675 ' 


CROSSWORD 


oct 

Nor 



■ FT-SE WD 280 StDeXnmWESpjtTg no pefftjudaxpotot 

Sap 3715.0 3090.0 -470 3716.0 . 30900 419 3608 

0«C 37370 37110 -440 3738j0 3713.0 443 1522 

■ FT-SE MW 280 INDEX FUTURES (0600) CIO par Ml hdspt petal 

Sap 36805 - 636 

M opan baanot-figum in tor pMtoUa dap. 1 Bnct wotomt atartk ' 


■ Ft-ae loo twDEX option qjffq raiz?) eio par- furhdto point ■ 

2960 3000 SOSO 910 0 31 90 ' ' 3200 3280 3300 

C P C P C POP C P C P C P C P 

Sag 177«z 1 1271a 3 77lj 7b Mb 2Db 11b 4Bb 2b. 33 I 149 1 193 

177b 17b 1M Z7 1«b<lb 71 61b 49 88,28b 120»2 15b 158b ■ 203 

196 32 161 44 129 58 97 79b 72 - 105 Ob 135 3Gb T?0b 22b 209b 

Dae 220 48b 193b Sib 131 79 «f S8b «4b 122 7Zb 150b S3 182 37b 218b 

JUBf 273b 109 . -Z14 147 199b 199 129b 256b 

Cato M58 PUl WW ' j i . -fir 

■ EURO STYLE FT-3g 100 INDEX OPTIOMjQFgifrElO per fii| Index potrrt , 

2906 2978 9005 3078 i3fs» 317$“. 3228 : . 3278 

S - IP 1 139b 2 «. 5 Sfia 2Jb » 32/. 5 69- 1 11* 1 1B3b 

H9b15b 198 24 Wj 36 87 52b 69b 74b 37b 102b 22 136b 12 17«b 

N0« 219b 27b 144b51b 94 80 « W 

DM 225b 38 ; . Bb : _ WjUKb. o .91188b - 

llart 268b 60b 2» (Ob V 137bt29fe 11M80 

Mi 4080 TUB M9 1 * (Matting Mk ton. Pra rti m i antolwl on nil — m art ptaar 
t Long dBM agSr awSak 

■ EURO STYLE FT-SE BUDaSO WDEXOWKm (OMUQ 210 per Ml Wax point. 


3800 


3660 


Catt 0 Att 0 SaSanani atoM nl 1 



3880 3700 3780 . 3800 

76 12 46 2B : *1b 55- 

i am am a ,?• 


Day's 

Sap 12 ohggMT Sap 9v Sap .9." 


3060 


3,112,- a discount of 16 to the 
underfying ; cash market, with 
the fair value premium 
adjusted to around 3 points to 
allow for the rise in interest 
rates on carrying costa. 

The selling came mostly 
from the locals, or 
independent traders, with one 
source hitting the contract 
hard- In the hectic period 
following the Bank of 
England's announcement the 
contract dropped to a low of 
3,101. only to recover strongly 
and reach a high for the day of 
3,140 In. mfo-eftambon. 

Trading volume of just under 
18,000 September contracts 
waa, high but not by any 
means dramatic, and Included 
a significant proportion of 
rollover' deals Into die 
December contract. Traders ■ - 
believe that most of these - • 
deala have now been " « 

completed, opening foe way 
for a smooth expiry operation 
on Friday. 

Volume in traded options 
Increased tc 42,477 contracts, 
from under 41.000 on Friday, 
but the Footsie option saw 
reduced activity of 12,872 lots. 
Among Individual stock 
options, Hanson was foe most 
active with 2,647 dealt 


Otv. Earn. 
ytaWK VtekJK 


Xd ad). Total 
ytd Return 


FT-SE tOO. 3128 

FT-SE IM 280 3713 

FT-SE Md 280 ax Irrv Trusts 3715 

FT-SE-A 380 1582 

FT-SE SmaRCap 1809^ 

FT-SE BmaBCap « In* Trusts 1887.5 

FT-SE-A ALL-SHARE 1572* 

■ FT-SE Actuaries All-Share 


-03 31J9.3 31800 32090 30240 
-00 37380 37610 3779.1 04710 
-0.8 37390. 3766.4 3784.7 3485.7 
-4X4. 15832 16070 10190 15180 
-00 190408 1(0706 191905 178304 
-02 1B70OB 1872.06 187004 1 70408 
-4X4 167808 150007 180038 150043 


Sap g chfl*9t Sap 8 


Sap 8 


Dto. Earn 
yWcWi yttflt 


P/E Xd at*. Total 
ratio ytrf Return 


10 MINERAL EXTRACTXMflQ) . 275001 

12 Bdrattfw lndusuiesp) . 4019.79 

16 on. IntagmMdO) 289905 

16 Q8J Exploration & Prodflfi 196006 


-00 2779.16 279901 279907 226400 a27 502 28.13 54.77 109801 

-0.7 404803 404044 402906 325400 3.19 OOO 2002 64:94 109090 

-4X9 272407 275106 2769.70 2212.70 341 507 2208 5908 109940 

198703 1977.14 1B44Q9 187240 206 t t 2006 114023 


20 OEN MANUFACTURERSpS^ 

21 BuUdhg 3 Cwatmctlonpa 

22 Bidding MaO« 3 MorcPs(31) 

23 Cnentotopaj 

24 Otvanmed MdustrWaflG) 

26 Bactrorto 4 Beet Eqi(p435) 

26 Ervgtr»oarino(70J 

27 Englnaartno, VaMdMhSI 

28 Printing, r^P* 1 & Pckg(36) 

29 TaxWee 3 AoParatgO) 


-04 1977.46 1997.40209002 1995.10 
-23. 117509 1177J2 119402 1155.70 
-10 183903 196053 199502 182400 
-00 2463.19 2469.78 247101 2226.40 

109405 192016 201700 1964.70 

-0.7 1P4.14 191905 199303 211400 
+0.1 1072.02 1891.47 109060 166500 
-00233091 2349092309.00193500 

2831.02297746 295028 248000 

-03 1702.11 171S.7B 172028 1911.00 


2608 5407 
2706 2308 
27.42 4708 
3001 74.17 
24.40 P.10 
1807 6606 
2403 4105 
P0O 7007 
2307 8301 
1098 4049 


1000.82 

894.78 

89063 

10B7.66 

965.P 

937.79" 

1069.18 

112300 

1160,17 


30 CONSUMER (30008(971 

31 BrB«(1ean7) 

32 Spirits, Wines 6 CkteraJtO) 

33 Food Manutacturan(23) 

34 HousatnU Oaxtofiaj 
30 Health Cara(21) 

37 phannacauttcalaClZ) 
Tobaccoh) 


-0.4 2802. tS 2321.10 2S2S. 37 2774.70 
-04 230O2S 231304 231023 209020 
+04 2889.81 291300292091 287 000 
-O0238407 289O98 239607 2S2O7D 
*03 247701 2497.74 2502.12 24B7.40 
-00 1695.70 10990S 170302 177900 
-0.5 307006 310008 309071 301240 


1602 6034 967.68 
1034 8103 102905 
1707 9902 98010 
1807 71.13 99408-: 
1040 5402 88608 
43.74 3600 87 140 
1062 7808 95403 
1107 21707 82206 


40 SERVICES^ 8} 

41 ' Dtatributorspl) 

42 Lataura A Hotata(24) 

43 MadaPQ 

44 RMSMlS, FOodpej 

45 natalleis. Oumm® 

48 Support Sentcss(4q 

49 TranaporttlB) 

■ Satvleas 6 BusInssaW, 

so tmunEspa 

52 DeciridtyOh 
64 Gait DtstributionB) 

68 TalaconwwilcadonsW 
5 8 Watarfl3) 

HNA 

70 HNANC4ALS1104) 

71 BantaMO) 

73 haurtneaflh 

74 Ufa AsaurancaOT 

78 Maroiwrt BankaW 
77 Other RnancWGM) 

79 PropartyftjL 


198605 

264046 

210748 

2901.76 

182406 

166503 

1577.14 

229400 

130403 

242209 

255703 

1945.78 

201303 

1880.59 


-00 197001 1389.74 
+01 254601 267402 
-00 211011 211743 
-A3 261103 092507 
+00191943183508 
166804 169078 
1677.84155407 
-10 232107 236108 
-00 1312.44 1 


199701 191060 
268349 274300 
2121.11 197300 
283109 263800 
184400186240 
170016168940 
169406194700 
286003 226100 
ijwoan irwi.no 


6407 

45,10 


91404. 

103700 

100700 

1D8706 

88703 


1117.12 


-00 2443422484.18 280000 231500 
-05 267002 232004 264AB5 2004.00 
-0.4 1964,10 197202 195509 2184.90 
-10 203809 207043 20X103 2060.10 
-1.1 1901.14 193707 195406 190400 


1888.86 -00 11 


k46 


+0.1 221901 225501 227107 217840 

2879.62 293944 205403 280700 

+10 1247.79 128304 128704 146700 
+00 242401 246407 249009 264900 
-10 316001 3188,16 318725 8077.10' 
-05 200404 2005 TO 201 308 1776,60 
-A4 149403 1SB70O HW9. 16 181900 


287805 -00 288801 2901.12 f 


1609 7342 
1241 8346 
t ae.™ 

1507 5002 
.564. 

1909 4S.12 119607 
1309 B0.73 99005 
1202 11404 .89502 
11.98 4806 
1601 8804 
11.03 8229 
1509 52.77 


106307 


LVt 


94308. 

1 063^ 


M IT A ftl I 157305 -04167808169507190908160543 301 541 1B07 4307 1234.15 


Opan 

900 

1000 

1100 

1200 

1300 

1400 

1600 

18.10 

MghMay uwthr 

31380 

3730.6 

1588.4 

31280 

37200 

15840 

31230' 
371 as 
1S810 

31370 

37133 

18837 

3132.7 
87180 

1684.7 

31360 

37160 

1686.7 

3131.1 

37184 

1984,1- 

.3133.1 
37150 
1504.3 * 

31270 

37140 

16820 

01410 

37300 

1669.4 

31140 

37130 

15770 


FT-aeioo 

FT-SEMid 2M 
FT-SE-A 350 

* FME ICO Datt Ngiu 8 a3« DwV ™ 100 «“ 36««M 5 28763 {N«. 

■ ft-SE Actuaries 350 Industry baskets 


1000 11X0 1200 1300 1400 1600 1510 CtOM Prenrious Ctfga , 

him ' 11100 10B&4 1095.7 10870 10957 10880 10890 ’10070 11270.. -304 , 

1 nz4.u ' ' wu a «cm 4 <uiM0 «wn artWA «n&0 30610 -iu 


Opan 

900 

11240 

1119.1 

30440 

30380 

1395.1 

1890.4 

29070 

2899.7 


29154 29154 '29134 29140 29140 ' ' 29160, ; '-10 


eidg ACnstrcn 
ptwmaoguttcto 
water 
Sank* 

_ -rac faua^UMo»B0«8dnjeraiarB Bi iJrii 1 itoanTh*nn*4tM1B*+* 

AddMofl Tba FT-BE aSSw 9h«to bitfcaa 8«w tos whtoi owm* a y a* n< ds wn nt n «nd pap r tow d 

LMnd, 3ou#**A Bridpa pMSovr, FtanHaw, 13-17 BmM.-tandan eC2A«L 

IQttWHV-Sffiidiatt P7-3E AoBii*to»aS0«n4»»PT-8gA<3»»d»»l«X*say. 

unaed ttwkm and ttpiSa M MITSEA«-it«AKha«lnd««l* • 


hefty 2.6m shares traded, and 
MEPC was 5 easier at 430p. 

SmfthKIind firm 

The market decided that 
SmithXllne Beecham had 
secured a good price for the US 
over-the-counter arm of its 
recently acquired Sterling 
Health business. The shares 
shrugged off hxterest rate com 
cents to move up 7Vi before 
closing 4 ahead at 4S£%p. 

SmlthOTnft « fr>l rt thn business 

to Bayer, of Germany, which 
some analysts believed had 
been prepared to pay a pre- 
mium for the nrnrri l nnal ran- 
tent of the acquisition. The 
company, which invented aspt- 


TRADING VOLUME 


■ Major Stacks Yaatard ay 

VoL Ctadng 0** 
POO* pdo* dim* 


ASMOiavt -8400 

Kybn rtehnft 2^00 

AM RSw 511 

A at dlgwt 778 

ArgBtaVtoMr 865 

Argo* . frt 

‘ 2000 

1400 

... 179 

Aaoo.BA.Pon* 838 

BAAt ^ 2.000 

BAT nd*-t 2.100 

BET 837 

BICC 610 

BOCf 725 

?£3 

Bit 8,400 

8400 

amt Ti0oo 

Bmkel8oo6*ntft 1000 

Pic1C*t .8400 

BbTohMt iS 

Book* 990 

Boct*t 2400 

Bo— *it . 889 

a*. A«a*p“*t 1400 

1400 
7400 

ITS 

MMlIMt 9400 

Bind . 328 

Bwmafi CaaMf 817 

Burton «M 

‘.-Crtta&What A700. 

Cadbuy SPitingfM^ -4X100 
OdrOxw . 18 


1400 


68% 


607 

864 


+ib 

+3 


347 -Ob 
2*1 h 18b 


278 

483 
430 
108 
401 b +ib 


+2 

♦71* 

-13 

-6 


72S 

414*2 

308 

36S 

283 

881b 


BOB 

296 

448 

S37 


+1 

-ab 

-3 


*3. 

*10 

-a 

42 

-4 

40 


488 44% 

■n 

-"S 

42b 
-1 

48 


Oatom 

Sr® 

CoutaiMst 

XU 

Omona 
Eanam Q*cL 
MMdandBiO. 
Eng Chin* d*y» 
EhwpdwOif 
BmumllMi 

na 


QMoB»t 
Oyraad 

O ini toT . 
Brand MaLf 


1,000 


Johmon I 

SSfSj 

Ladniat 

lauSaeutMwt 

Upon* 

UgdtQamntt 
Uwd* Abbav 

MSS 

UNO 

Lmtonaaa: 

Lmfw 


Marta *^nc«t 
MdnkOct 
Montoon (Mm} 

Norm Wot Waiwt 


PAOt 642 

padogian 3.100 

PomOort 3400 

Pi«feAWf 4JH0 

HMCf 461 

8S . . 

US 

Radandf 438 

RaadMlt 874 

ftontoUT 1,200 

ItoW . 893 

gM-t . iJS 

noy*l Inamnoot 1400 

Sakabuyt 1300 

SctoodMa . 31 

8eo«Wi«Mw.t 401 

aocsL Hpis-aa. azi 

-SsnUkrti FmmrT 1,*0 

■Smst i53o 

SadgMA 80 

SMbonri 2,100 

SoamllaRt . 606 

IEH“* ^ 

Sough Bna 1ST 

•toMOKHJ 1400 

EnWl * Narmtowt 4600 

SnttSowtanT 1400 

MOBckIwi Uto-t 888 

SmWtolnd*. . 258 


281 47 
441 -a 
1930 +8 
SIB ■ -* 
37S -7 


flouto WaatVMar GE6 £05 1 46 

floutti WML BaeL 234 770 -U 

touAnWmr . UB 673 -7 

SUOdiid CMncLf 1,800 287 -4 

SamhouH 883 218 -l 

9Ul4toP«t 1^00 333b +Zjl, 

Wi afii 229 -b 

TS8t 1,700 Z22 

3400- 148b 
358 442 

387 1ST 
3400 241b 


TnaAUto 

t— j— HfnnrhiMi 

I—JM *»lAAAwm 

TncdT 


#1 

-10 


Thom 






HwattMUo- 
Vtoai m Wa to r 


Shn 


rHeiM 

67 393 -Z 

M2 1146 . -16 

Uritsdl 

tetownpf 298 328 44 

MOO ' 164b -6b 

614 740 -13 

808 883 -6 

S3 678 -6 

146 640 -6 

Ml 348 -3 

-mHtoMdBa.t 398 337 46% - 

WObDamwi 1/00 168 4flb 

Mm.. 438 155 -2 

WUotoft 300 733 

VmMMBtcL 882 7*0 -0 

Yrrtd*tWtr 2*7 M3 -TO 

ZMmt OK 883 -1% 

Swod on tmdno vofem tor ajMtocttn at ndor 
wcwMMdWl tomigh 8>» 9EU toMM 
)aatoiito y una 4J0pm. Hada o t m» Won or. 
min on ntnfid down, t hdkwa aa FT-6S 
100 Mat 


tin, lost title in the US after 
the First World. War as a result 
of allied reparation demands. 

Mr Robin Gilbert of Panmure 
Gordon had factored in 
between 9600m and $7D0m for 
the disposal and was surprised 
that it had achieved $lbn. He 
said the move would go a con- 
siderable way to dispersing the 
gloom over SmithQJne's gear- 
ing, which had leapt to a very 
high level following the 92.7bn 
acquisition of the entire Ster- 
ling Health business. 

Kingfisher unsettled 

Stores group Kingfisher saw 
an early gain clipped back as 
worrying stories of executive 
changes moved through the 
market ahnari of thp company’s 
Interim figures due today. 

The Woolworths and B&Q 
parent has suffered from what 
many In the market see as an 
unsuccessful sales policy 
known as “Every day Low Pri- 
cing”, and concern over the 
competition in the DIY market 
from Home Depot, of the US. 
Fall-year forecasts have edged 
down and the share price has 
tumbled from almost 780p at 
the peak in December. 

There was talk yesterday 
that Mr James Kerr-Muir, the 
ffnanrn director who replaced 
current Asda rHainrum Archie 
Norman, could be under pres- 
sure. But there is also thought 
to be little love lost between 
chairman Sir Geoffrey Mol- 
cahy and Mr Alan Smith , the 
chief executive. Kingfisher had 
been up 6 but ended the day 
only 2 better at 490p. - 

. fianks and insurances were 


NEW HIGHS AND 
LOWS FDR 1994 

NWHMraim. 

MM MNTL6 A MOHIS (S MnotoMIV 6MI|M • 
Ftottor. DtSTOMfTORS (3) BcaaoMr, flpanon. 

slkthmc a bjkt aon* m M*y. 

MOHtoMNa PI Doowtok HM*. 9p%n 
-04RU. IVtotoy 05 AMI VMCU6 (t) UPF, 
■XmACTTVe 0638 P) Hacnxny, Tnmto W**t, 

M 


HEALTH CAM (1} MkJhnd l 
HOUHHOLD 00006 (1) RojM Dotrtna MUXA 
n toa ButonM* Oonm. Itttor ftotoon, 
PHAHMACS t mCALl PQ AMT* 5 »iM*ft 
Blotaca, innug, OBVW. n Aurtn 
Itoad, Ehm, oawr, 6PMn% MM6 A CHMRI 
01 Hn to r 4l rt fctortn K 6UF P O H T 6 B WH (4) 
Convutor Paopto, Hato Tim OdomL Itood 
Bmcugv. ftotonc* S*ouitty. THAWPOBT (1) 
Mrtonto to«m CAMAMAM6 ID Cn 
noNMOUIH AP6CAH6 ft) SA80L 
HBWUMmm. 

OUS mt 8ANX8 n Book e( SooltoM 8 3Mf» 
Pt tOHH am 7 3/Bpo PL. SULDMa A 
cmnwn BMW Homo. Boat H-OtoMon 
IM4. Utog « 64po Of PU Tl»y Doom 
BUM IWTL6 A MOHTS » OMOMl. Haywood 
warn cm. Pit, CHnacAU n otmnm 

SutoKto SpMtono. EMnOBUTOnX (q 
AnpittMX BMefctoy Motor. Coatto. Pma^oo, 
MVHWnCD MDU H HtotoM VMM. Do 
rape Caw. Bd. auaemmn m Hunting. 
NMiaak U DCTHACnva MM C* Bndno. 
P**o An Bqtov. FOOD MAMUP (0 Bad 
WMunn MU13H CAM(t) S^cw* Ptaduato. 
H0U8W0LD 00006 ft) CmkmI PMw \ 
M8URANC8 M Mmti A McLmmn, 
MVGBTMBHT TRUSTS Of PMBSTMDrr 
COMP AHICT 06 WonMto BtPtt Wito, SptoMi 
SnflrUAn*.. LEMURS A HOnLS (2) Bar A 
WM *o* Amoto. Trtnp Inrt OTHBn WWAMC1AL 
08 taiKtoi Cto. Owv C«8A OTHW WM 
s 6U6NS (1) Attmocto. PHOFaRTY M 
RETAILna OGNERALP) Oounfcy Caauah 
PtoWtto Hn* ArtH SUPPORT 6B7W (9 Coaol* 
OonaiAIng, ISS-Int Son. Sy*. B. HR Oua ■ 
Mmotonm. TOCTU6 A APPARS. (1) 
FWtow, TBAIOPORT R| C8X. badunto Wto. 
V3. NFC. AMEMCAM8 HX 

among the market's best per- 
forming areas, with the former 
given a strong push by the 
move to higher interest rates 
in the UK, which dealers said 
would help boost margins for 
the hanks. 

Barclays was tbe star per- 
former, racing up 10 more to 
595p, helped by recent broker 


buy recommendations; turn* 
over was 6.6m shares. 

The sharp slide on the Hong 
Kong market, ahead of the 
visit by Mr Douglas Hurd, the 
UK home secretary, later this 
week, upset HSBC Holdings, 
which fell ll to 737p and put 
pressure on Standard Char* 
tend, 4 cheaper at 287p. 

Composite insurances 
attracted solid support and 
were not badly affected by 
reports of an earth tremor in 
the US. Guardian moved up 6 
to 193p, Royals 7 to IBlp and 
General Accident 10 to 564p. 

Prudential was the pick of 
the life assurances, closing 4V« 
firmer at 8i5Kp at the start of 
an important week which 
brings inteHww from Prunden- 
tial, Legal & General and 
United Friendly. 

Clothes retailer Country 
Casuals fell 32 to 120p after 
warning that full-year profits 
would be below expectations; 

Meanwhile, Liberty dropped 
38 to 355p after announcing 
losses of £301,000 in the six 
months to July, against profits 
of £601,000 previously. 

There was more news of 
share bny-backs In the utilities 
areas of the market PowerGen 
settled 2 easier at 569p after 
buying a block of 2.5m shares 
at 573p. 

In the regional electricity 
stocks, Seeboard purchased lxn 
shares at 434p; its shares eased 
6 to 434p. 

Transport shares came under 
pressure on the back of a reap- 
praisal of debt worries follow- 
ing tbe increase in hank base 
rates. 

Eurotunnel tumbled 9 to 


270p and British Airways, 
another heavy borrower, ended 
5 lower at 397p. Ahead of 
tomorrow’s half-year state- 
ment, Associated British Ports 
fell 13 to 289p, not helped by 
bearish comment in the week- 
end press. 

British Aerospace ended the 
day unchanged at 497p in the 
wake of denials of a deal with 
Germany’s corporate monolith 
Daimler-Benz. Weekend press 
comment to the effect that BAe 
was discussing the sate of Its 
business Interests in Airbus 
Industrie were flatly denied by 
tbe company, with BAe declar- 
ing Itself “absolutely commit- 
ted to Airbus 1 *. 

Fahrey, the defence electron- 
ics group, Jumped 16 to 399p 
following a surge in profits. 

Circulation figures for 
August led to cautionary read- 
ing for News International, the 
Murdoch group which sparked 
off the newspaper price war. 
S.G. Warburg pointed out to 
clients that while Sun sales 
rose 02 per cent, the sales of 
its chief rivals, the Mirror and 
Daily record, rose a combined 
21 per cent At the other end 
of the spectrum, sales of Mr 
Murdoch’s Times were down 
0.3 per cent, while the Tele- 
graph bad rebounded 1.9 per 
cent News International fell ll 
to 239p and Mirror Group was 
steady at 137p. Hie Telegraph 
slipped 5 to 349p. 

MARKET REPORTERS! 

Polar John, Jaffray Brown, 
Stave Thompson, 

RamraJ Qogna. 

■ Other atettaWcH, Pago 30 


LONDON EQUITIES 


LIFFE EQUITY OPTIONS 


RISES AND PALLS YESTERDAY 


Option 


■ Cate - 


-PUS- 


0(4 Jm Apr Oct Jm Apr Option 


-Cato- 


-PUS- 


■m m» May Ntw Fob May 


ABaHjon* S» a - - 13 - - 

CSSS ) 938 S - - 48 - - 

Aigyf- - 280 14 21M28K11H 18 23H 

C281 J 300 8H 1ZH lim » 30U 35 

ASM to mim 11 2 3)4 5 

n» ] 70 ZH > 8 7 BH into 

Bit Atop 390 21 1ZM43M 11 20 26 
[*397 ) 420 7H 18M 39 2814 STM 42M 

Ml KM A 420 &32H 42 13 22H » 

1*428 ) 480 I TB 24 » 47 33 

Btnb 500 46 82 64K 314 12 18 

(-537 } 550 UH a 37 23M 34M 41 

BP 390 32H 41W 46 5 12 18 

.{*414 } 420 13 24K SZVi 16H 24H 29K 

BtUlSMl 140 1854 a M .fli » 7H 

HS2) 180 4» 8 13 12 T4» 17 

Bm 5G0334IHSI10H23M3ZM 
[*367 ) '600 1 1IH a 38 57 S3 

8TSS 21 
IB » 35 
BOO a 38M 4BH 1SH 28H 32H 

550 4 14 » 49 a 83 

Com 1 Mb 500 M B6U 74U 3U BH 18 

(*547 ) 550 W » 43U 17 25 37)4 


CM«m 390 37 4814 56 
(*417) 420 18 S1H 42 

ConrtaiMi 

rsos) 


raseo j 

Uvw 

nss) 

Lucsf kts 
) 

p so 

f»4) 

POdn^tn 

P«) 

PnidanH 

P315) 

RI2 

r«w) 

RHlntf 
PS22 I 
Rajtt kwa 
r2B0) 

Twco 
(*240 ) 


H94) 


T357) 

opon 


Id 800 46H 68M 60W 12 2SK 40U 

(*826 ) 850 1814 40 54 36% 50 E8M 

KtogMier 400 4M 51H B4M 7H 18 23 

r«o ) wo a a 43 a 34 4i 

Land Saar 600 » » 53 7M 15 21K 

(*616 ) BOO 814 15 29US7H43M 40 

IMaaS 390 23 32 40K 6 12 16 

(*403) 420 6H 17 26H 21 27 31 

NMHU 500 asm 52 13« 23» 34 

(■510 ) 550 8 XI 2916 48 51 MM 

SUnAury 420 32 42 6214 8 17H 22M 

(*440 ) 460BU22M 33 2737H42M 

StoSnaM. 700 38 E2J4B1W 8H 17 2714 
(733) 730 9H2SKMH 35 43 54 

Storetoua 200 aM»2B14 3 SM OH 

(-23* ) 220 6H 1ZH 17 11H 15H 19H 

TMUgir 90 H B 13 5 8 10H 

(*90 ) 100 2 5H 8H 12M 13 16H 

IMwar 1100 6814 83 103 0 24 38 

.(*1148) 1130 31 SI H 7214 28W 46 BOH 

Zeneca 80S 41 83H » 14 » 39tt 

(-821) 850 IS 87 4B39H48HB8H 

Option KwMIttNHMMf 


Grand Mai 

390 

38M 

47 

B2M 

7M 

15M 

19M 

p414) 

420 

28M 

ZB 

36 

IBM 

30 : 

33M 

lidbnta 

160 

1ZK 

IBM 

22 

9 

12M 

16M 

naa) 

1B0 

4M 

IBM 

14 

23M 

25M: 

29M 

Utd BtacuBa 300 

32H 

38 

42 

B 

IBM 

17 

rs2fl) 

330 

ISM 

21 

26 

IBM 

24 

33 

Option 


Sap 

Dee 

Nv 

Sop 

Dae 

Mar 

torn 

140 

13 

18 

18 

!H 

BM 

9 

nni 

in 

IM 

6 

9M 

ISM 

17 

21 

Option 


NOV 

Ml 

«ta 

Nov 

Feb 

May 

ba Aam 

460 

81MI 

MM 

78 

14 

23 

31 

r«« i 

600 

27W 

MM l 

MM 31 H 

43: 

51M 

BATMa 

420 

Z7M 

39 < 

‘SM 

13M 

19 

2B 

r«») 

480 

BM 

21 

271 

J7M 

431 

52M 

BTR 

330 

17 

26 

31 

14M 

18 

34 

f332 ) 

360 

7 

UH 

IBM 

37 : 

38M 

41 

BritUema 

1 380 

34: 

sm 

44 

4M 

11 ' 

ISM 


240 12 19 18 B m 17 
260 4 7H 11 22 3 a 

184 12 - - 9 - - 

180 314 7 11 29 30H STM 

lie 161* 2014 a m lie is 

200 014 12 1SH a 23H 28H 
850 S44M53H »43M55H 
700 10H2SH32HB7H75H 88 
150 »23M.» 4H 8 1(M 
200 8» 13 17 14 IBM 21 
300 2244 29H 34 8M 13 19 
330 7* 15 19 25M2M 37 
850 S3H 74 8814 22 34 48 
900 M 48 n 480BH 70 

GOO a 48 57M 15 21 35 

55012H 8 34 45 48H 64 
280 11 2844 32 15 T9H 25H 
300 1014 1714 M a 31 3714 
240 12 18H23H 12 IBM a 

260 5 10H18H25H 23 32 

183 1BH 23 - 544 9 - 

200 9H 14M 19 1344 17H 20 

354 W - - llh - - 

384 614 - - 31 - - 

Pel Jw Apr Oct jm Apr 

BAA 475 22 30 48 M 17 21 

(■483 ) 500 8M 17H 27 24 30M 34 

nanaDtr 500 21 H 3114 40 14H a SOM 

r»4 ) 560 4H 13 19H 49 &0H B1H 

Option tip Ogc Mar Sap D«c Mar 

AObarM 390 UH 30 30 5 14 2354 

(*399 ) 4a 4 1414 2314 24H 3014 40 

Atnatrad a 2 3V4 4H 2 3M 4K 

1*30) » 1 2 3 8 7 8 

550 46 68 77 1H 9 19 

600 9 SIM 47 15 28M40M 

200 19 zm a 3 10M 16 

300 6 -urn a 13 an 2BH 

280 17 asm 2 914 13 
300 8 12 1814 BM 20H22H 

200 8 18 22M SM 12M 17 

2a 2 9M 1SM20M24H 20 

150 2014 23 Z7M 1 3M 8 

180 8 WM 16 5M 12M HM 

130 SM 16 18 2M BM 9H 

140 4 10M 14 BM 11M 15 

48D28H 43 S3 3 16 21 
500 SM 21M 32M 72 34 40 

350 a 41 M 47 2M 12 ISM 

390 7 24M a 14 24M a 

110 9M 12 18 IM 3H 5 

ia 2M 8 9 8 8M10M 

2a u a a zm a 13 

240 3M 11 1812M 19 24 




41 




12 

91 



84 





62 

129 

31 

109 

■301 

10 



wanes . 

4 

FkumeMa .... 


122 

174 

70 

190 

273 

18 


IB 

Totals 

318 

992 

1387 


Dtoto bood on Una* c ompt n laa toad on Hto London Sham Sank*. 


TRADITIONAL OPTION8 

FM Daaftiga Sopt«rd>ar 12 Expiry 

Last Dnaflno* Septwnbnr23 Sstttonwit 


OkwMtS 

DsoamMr22 


C«l«: BTR Wts V4/5, ChfeoadanM, OEM, Magnum Poarar, Pramlar Cons, Taripots 
Tnoh, VldooLoglc. Puts: Tin Rack. Tadpolo TsctL Puts 8 Calls: Magnum Potmr. 


LONDON RECENT ISSUES: EQUITIES 

Issue Amt Mu. Ooss 

' pries ptod cap 1994 pries Nat DM. On WE 

p ig> (Em) Hgft Low Jtocfc p +/- du, ccw. y*d iM 


rswj 

BtoeCktaa 

(795) 

Brtfltt EM 

f29S) 

Dtowa 

ran ) 


H77) 

Unto 

(137) 

Mi ftwsr 
r««) 

Scot Ponte 
r383 ) 
Sasn 
ni7 j 
FBto 
f230) 


_ 

FJ». 

190 

n 

78 BaHie Q fiitin Witt 

78 -1 




_ 

100 

FJ>. 

18.4 

102 

97 Bsacwi tev Tst 

B7 -2 

to 

to 

■- 

to 

- 

FJ>. 

108 

48 

41 Da Wansnts 

41 -1 

to 

- 

■ 

- 

to 

Ffi. 

100 

1*2 

1 Conti Foods Wrtf 

1*4 

- 

to 

— 

- 

a- 

FA 

310 

M 

89 WVESCO Jpn Ptac 

90 +1 

- 

> 

- 

* 

- 

FJ». 

329 

GO 

42 Da Wrtrants 

47 

to 

- 

to 

- 

> 

FP. 

- 

77 

62 JF Ft Japan Writ 

B2 -1 

- 

> 

to 

> 


F.P. 

27.1 

B5 

36 ^Magnum Powar 

85 Hria 

- 

to 

- 

a 

23 

FP. 

10.6 

31 

29 OrtJls 

29 

- 

to 

- 

to 

- 

FP. 

000 

17 

SHt Panther Wrta. 

17 

- 

- 


- 

- 

FP. 

002 

40 

28 Patrocrtto 

26 -1 

an 

to 

to 

■a 

to 

FP. 

307 

44 

34 Suiar Wrta 99AJ4 

34 

to 

to 

to 

to 

10D 

FP. 

301 

105 

97 TO Ewo Qth Pig 

106 

> 

- 

to 

to 

" 

FP. 

202 

35 

29 Tops Eats Wts 

29 


' 



RIGHTS OFFERS 







issue 

Amount Latest 




dosing +or- 

pries 

paid 

Ramta 

1994 



price 



P 

up 

data 

High Law Stock 



P 



360 


21/10 

48pffl 41pm EMAP 



41pm 

-6 



FINANCIAL TIMES EQUITY INDICES 


(-M7J 
Itora Bfl 

nm 

isa 

C222) 

Domtona 

P2ai 


raaa) 

Option 


140 9M 

in IM 
moo a 

1050 AM 
2a BM 
240 IM 
2a 12M 
MO 2 
KO 9044 
700 18 
Oet 


18 2DM 2M 
7M 11H 15H 
88 64 B 
41 S7H 39H 
17 a 5 
• is wm 

21 25 ZK 

IBM 16 13H 
75M 94 4 
47 I5M22M 

jm Apr Oct 


9 12 
22 24M 
a 45M 
55 TOM 
11M 17M 
24 29H 
BM 12M 
IBM a 
21K32H 
44S8M 
Jan Apr 


•P 12 

Sap 9 

Sap a 

Sap 7 

Saps 

Yr ago 

■HQh 

■Law 

24250 

242S0 

24840 

247S.7 

24780 

2384.7 

27180 

22400 

404 

4.19 

4.16 

4.12 

4.12 

3.95 

4M 

303 

6.04 

603 

508 

603 

502 

4.88 

844 

302 

17.88 

17.73 

1709 

1804 

1806 

27.42 

3303 

1703 

1807 

1902 

1349 

18.63 

1808 

2501 

3000 

1807 


fSM | 29014MI9M 27 18 20* 2S 

CataySdb 420 43MHMS7M 4M 9 1» 
(*457 ) 480 W2BM 3419H2SM 34 

total Bee 750 61M TOM B6M 29 KA 54 
(*753 ) MO 27 «M81M 57 B9H 00 
Gstaen 4 SO 38 42 48M11M 17 24M 

(*470) 300 11 H29MS4M » 48 

BEG 280 17M B a 8 12M 15 

raw) 300 8 13 IBM 19 a 25 


runs i 

BSKHaala 

rran 

Muan 

r*80) 

Optkm 


BOO 22 

an bm 

700 61 
750 3ZM 
487 a 
500 MM 


41M S3 32M 
23H S4 71 
86 105 17M 
B2 79M39M 
- - 1414 

31 42M21M 
M> Itay Nw 


47 BO 
80 92M 
3SMSBM 

n 81 

30M38M 
Pen u a/ 


OriLtb-yUd 
Ewn. ytd % fud 
P/E ratio rut 
P/E ratio nl 

■ftsf 1094. Onflnary Shan lnd*x sinea comptadon: high 27130 2/D2/94: low 4&A 26/BMO 
IT OnAnaiy Srtn Indw basa dtt 1/7/38. 

OrtSnary Shan hourly changes 

Opu 600 1000 1100 1200 1300 1400 1600 1600 High l*m 
2420.9 2420.7 2416.8 2427.1 24250 2426.7 24250 24270 2429.7 24300 24080 
Ssp 12 8sp 9 Sap 8 Sap 7 Sap 6 Vrago 


MfrflSKS in ISM IBM 2ZH SM 13 IBM 
fIM 1 200 6 IBM 14 22 M28M 


SEA O twgalna 27005 28070 27y449 27,583 

Equity tumovsr (Cit^T * 1278.8 13060 13830 

Equity bS r gs fc M t - 29081 29027 30007 

Shams ndsd (mOf ' - 5270 8450 5880 

teaming h m-mart t euahaas and ow si asa tomevsr. 


27077 30960 
13990 1D990 
31,182 34087 
6630 8080 


■Lhdatttag .. ^ . 

basad on Hurt s oflarpttoaa. 
asptsmbar idToul comricls; 42006 Cads: 
18066 Putoi 22086 


FT GOLD MINES INDEX 



9 

*dN 
i » day 

tai ftp tar 

8 7 sp 

Emsa dfr 
ytaU % 

52 SMR 

MgS Low 

BoH Mbas lodM (34 

219MB 

+U 

2W0B ran iQzijjs 

\m 

236740 152208 

a Hsgtoasl Men 

AHcabU 

Attataaisfg) 

Nortt America 04 

3400.76 

2887.49 

174885 

-04 

-4X4 

+10 

3*15.72 348708 201348 
287909 2859121 185208 
173905 1730.79 147148 

403 

103 

0L74 

348706 190923 
391301 1693.18 
yTOUff 138100 


Conrip* RnsnoM umaa Un«ad m _ 

ttM in brtdwo *ow number of wnwnta*. 8taa U8 DeBsto Baaa Vtaac 100000 SWaHO. 
Pradaoasaor Odd Mnw IntWc Qap i£ 2730 ; aajm cMnga: 00 poasr Yaar ago: 11U T PamaL 
1 *— 1 prtoM wam.unauahldi tor M acRfcm. 


THE TOP 

OPPOKTUNmES SECTION 

for senior management positions. 
For advertising information call: 
Philip Wrigley 
+44 71 407 873 3351 































































































































































FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 
















































































































































































V 


FINANCIAL TIMES TUESDAY SEPTEMBER 1 3 1 994 
















































































































































































CURRENCIES AND MONEY 


MARKETS REPORT 


UK rates rise Vfe per cent 


Sterling made good gains 
yesterday after the Bank of 
England’s unexpected decision 
to lift the minimum lending 
cate by SO basis points to 5.75 
per cent wrim Philip Gcamth. 

The pound rose 1 14 pfennigs, 
and more than one cent, on the 
news before levelling out to 
close in London at DM2.4117 
and |L562S, from DM2,3914 and 
$1.5509 on Friday. The trade 
weighted Index finished at 79.1 
from 7&6. 

Analysts, however, stopped 
short of saying that sterling 
had managed to detach itself 
from the downtow of the dol- 
lar. The rate move appears to 
have put a floor under the cur- 
rency, rather than to have nec- 
essarily given it any signifi- 
cant upside momentum. 

Sterling futures lost a lot of 
ground, with the September 
contract trading 38,000 lots to 
close nearly 40 points lower, at 
94.07 from 94.47. The December 
contract traded nearly 88,000 
lots to finish at 93.30, thirty- 
seven basis points down on Fri- 
day's closing price of 93.67. 

The rise in UK rates over- 
shadowed activities in Europe 
where most currencies had a 
generally quieter day. 

The dollar was slightly 
firmer on the D-Mark, but 
weaker against the yen ahead 
of today's release of the August 
consumer price index. The 
release will be closely watched 
following the dollar's two pfen- 
nig drop last Friday, an news 
that the August PP1 rose by 0.6 
per cent 

The dollar finis hed in Lon- 
don at DM1.5435, from 
DM1.5419, and at Y98^85, from 
Y99.265. 

■ The decision to raise rates 
was widely, though not univer- 
sally welcomed. Most saw it as 
a timely pre-emptive strike 
against inflation. 

Mr Kenneth Clarke, the 
chancellor, boosted his credi- 
bility through his apparent 
willingness to place the econ- 
omy above party politics. 

The Bank of England's repu- 
tation was also enhanced, in 
the eyes of some. Mr Jeremy 
Hawkins, chief economist in 
London at the Bank of Amer- 
ica: "The clear message is that 
the Bank of En gland has much 
more independence in setting 
monetary policy than it has 


Storting 

Dec W future contract. bid price;. 



. 5 SepVt- 

SourwC FT Graphite 

■ Pound In HOW Yorfc 


Sri 12 

— Latest— 

-Bn. doas 

£ipot 

1.9888 

1JS530 

imai 

15675 

15527 

3ndh 

15657 

15515 

ip 

1.G624 

15412 


had in its history.” He said this 
bad to be a plus factor for ster- 
ling, in the long term. 

Although the decision to 
raise rates caught most offside, 
it did not come entirely out of 
the blue. Mr Philip Shaw, econ- 
omist at Union Discount, noted 
that three month sterling 
LIBOR had been above base 
rates since July. The Bank had 
made no effort to protest, 
which suggested it was happy 
to leave markets with impres- 
sion that rates would rise. 

The handling, «nd timing, of 
the move, was criticised by 
some money market practitio- 
ners. Some felt the Rank had 
misled the market by, in its 
daily operations last Thursday, 
offering a repurchase agree- 
ment which offered assistance 
at the established dower) rate. 
Many took this as a clear sig- 
nal that rates were an hold. 

Others, however, supported 
the Bank on this count Mr 
Nick Parsons, treasury econo- 
mist at CISC, commented: 
There have been several occa- 
sions in the past when we’ve 
had a rate move with a repo 
outstanding.” 

Mr Nefl MacKinnon, chief 
economist at Citibank in Lon- 
don, also warned: “My experi- 
ence in the money markets has 
been: never say never." 

Both, however, were critical 
Of the handling of the move. 
The Bank has used its discre- 
tion over the precise riming of 
a rate change in a way which 
unsettles investors, destabil- 


ises traders and maximises 
uncertainty about future 
changes, " said Mr Parsons. 

Mr MacKinnon said it was 
easier to read the intentions of 
the Fed and Bundesbank. 
"With the Bank of England we 
s HI live In Smiley'B world of 
secrecy.” He said the fact that 
some highly respected econo- 
mists had been wrong-footed 
“shows how the Bank have 
made rnnfnaing and Tnlfilqq ri- 
ing signals to the market" 

Some money market opera- 
tors were also critical that the 
Bank could have set a 5.19688 
per cent interest rate, on a 
£4.5bn floating rate gilt Issue, 
last Friday. Official sources 
pointed out, however, that the 
quarterly date for changing the 
interest rate was inflexible, 
and set months in advance. 

■ The D-Mark finished weaker 
against moat currencies. Ana- 
lysts said markets were begin- 
ning to worry whether the 
chancellor Mr Kohl’s govern- 
ing coalition would win an out- 
right majority in the national 
elections in October. 

The D-Mark closed at 
SKr4.853, from SKr4.902. 
Against the French franc it fin- 
ished at FFr3.425 from 
FFr3.427. 

■ The Bank provided UK 
money markets with £ 180 m 
late assistance. Earlier it had 
provided £624m liquidity at the 
new rate of 5% per amt, up 
from 5% pea* cent Overnight 
money traded between 4% and 
7 per cent 

Cash market rates moved up 
in Hnp with the high or base 
rate. Three month LIBOR fin- 
ished at 5% per cent from 5& 
on Friday. One year LIBOR fin- 
ished at 7% per cent from 6ft. 

Analysts said the sharp 
move in short starting was an 
over-reaction, reflecting the 
extent to which the market 
had assumed rates would not 
be moving. One source argued 
that if the Bank had moved on 
Thursday, losses would have 
been much reduced. 


■ oww cuwwncara 

Sap 12 £ 

Hungary mas - 185.M8 V 

iw 2605.00 - 2699.00 1 

M 04848 - 04657 I 

HM 338812 - 85717.1 Z 

tank asMffl . 3ffll3 5 t 
UAE 07563 - 5.7880 


mao - 100050 

174400 - 17HLOO 

nans - paw 

230144 - 230244 
ggagp . mem 
84715 - 34735 


1 POUND SPOT FCRV 

/ARD AGA1MST 

THE POUND 







I 

Bap 12 


Oortig 

Change BMA9fl8r 

Day's MW 

One month 

Three months 

One year 

Beak of 


irtd-print 



MPA 


tePA 

Rata 

%PA 1 

teg. Index 

Europe 












Austria- 

(Bch) 

10.377B 

+0.1407 713 - 84$ 

18-8845 16.7544 

109738 

03 

100617 

04 

- 

- 

11&3 

Briokim 

(Sfr) 

48J6378 

+03793 077 - 673 

49.6673 400400 

448575 

-05 

405925 

04 

403826 

08 

T17JQ 

DonmorK 

(DKr) 

BJ202 

+0-0632 144 - 260 

05260 9.4342 

9J248 

-06 

£5418 

-09 

945800 

-06 

line 

FMaxJ 

m 

7J572 

+40002 481 - 662 

7.7930 7.6620 

- 

- 

- 

- 

. 

. 

B49 

Frmci 

m 

£2689 

+0-0651 S52 - 62S 

B2B25 8.1629 

£2S8S' 

-0.1 

02613 

-0.1 

0216 

05 

1104 

Germany 

m 

£4117 

+00203 109 - 125 

£4140 £3820 

£4105 

06 

£4077 

0.7 

£3784 

1.4 

138.4 

QTOeca 


387.366 

+3.127 141 - 571 

367-571 383.113 

- 

- 

- 

- 

- 

- 

- 

Ireland 

m 

1J0155 

+00027 148-181 

1.0182 1J0B9 

1.0164 

an 

1 J1B8 

-04 

1.0212 

-06 

1012 

m 

M 

2453-21 

+1027 125 - 518 

2455.16 2425JXS 

24S8A1 

-£6 

247158 

-OO 

2637.41 

-04 

700 

Luxernboisg 

(U=») 

456378 

+03793 077 - 673 

406873 400480 

4SL6575 

-05 

405325 

04 

403525 

06 

117J) 

NMhariands 

W 

£7048 

+00233 028 - 066 

£7068 £6714 

£7036 

08 

£7002 

07 

£8879 

1.4 

12-LO 

Norway 

WKO 

105951 

+00753 918 - 983 

109983 104833 

105848 

OJO 

105371 

-0.1 

105996 

OJO 

86.1 

Portugal 


248.868 

+1333 760 - 985 

245.9® 24£SSO 

247.54*3 

-8.4 

250778 

-OO 

- 

- 

- 

Spain 

(Pte) 

200462 

+1^93 361 -623 

200523 190307 

200737 

-£1 

201.627 

-£1 

204JS7 

-1.9 

800 

Smdsn 

m 

11.7067 

-0JJ17 990 - 144 

1T.7Bffl 11.8341 

11.7367 

-12 

11.7732 

-£3 

11.9067 

-2A 

75.1 

awtrastend 

PF 0 

£0071 

+00123 060-082 

£0082 1J642 

000*3 

1.7 

1.8988 

1.7 

15652 

£1 

1200 

UK 


- 

. 

- 

- 

- 

- 

. 

. 

- 

79.1 

Ecu 


1.2652 

+00092 845-659 

1J65B 1-2614 

12664 

-02 

1£656 

-0.1 

12B30 

01 


SORt 

- 

nre+aao 

- 

- 

« 

* 

- 

_ 


- 

- 

Amaricaa 

Arpenttm 

(p* »ri 

1^619 

+00115 616 - 622 

1.6634 1^501 








Brad 

m 

13298 

-00195 280 - 316 

1J483 1.3255 

- 

, 

- 

_ 

. 

- 

- 

Canada 

(CS) 

£1933 

+00097 326 - 340 

£1340 £1160 

£1337 

-02 

£1334 

OP 

£1301 

02 

806 


rntrKC 

140 

nan 

IIJ7S 

OlM 

eta 

LM 


MS 

at 

.m 

100 

408 

on 


ran 

MM 

+94 

478 

mr 

or 


mtaSoottKrtfeMnre 
■Life* km ae 


Modes (Now Paeq) 54190 +00405 142 - Z37 53239 628Z9 - - - 

USA & 1.5026 +00117 623 - 628 1-5640 1.5506 1.5017 QJT 1.5507 07 1.6468 1.0 

Pwriflc/Mdde Eut/AMm 

Austnda (AS} 2.0995 +00173 985 - 005 2.1016 24870 22996 OO 2.1006 -02 £1189 -09 

Hong Kong 12-0737 +00885 710-764 12.0842 11.8830 120698 04 100687 02 120757 0.0 

Intfla (Ra) 48m 72 +03816 054 - 289 400630 48.8500 - - - 

Japan (V} 154589 +0718 605 - 733 155.060 153-290 154.278 £0 150374 £3 148399 4.1 

Mrfayata 04$ 3.9084 +00235 870 - 898 3.9949 34579 - - - 


New Zealand 

(N2#) 

£6916 

+00246 

900 - 930 

£6930 

£5741 

PWSpptnas 

(Pwoj 

41JJ170 

+02282 

641 - 788 

41.1798 405370 

Saudi Arabia 

(SR) 

3.8600 

+0U0437 

588 - 613 

5.8650 

5^156 

SMoapura 

(S*) 

£3300 

+00079 

292 - 308 

£3340 

£3170 

S Africa (Com. 

w 

5JS47S 

+00298 

454 - 485 

5-5485 

55038 

3 AfrtCM (Fin.) 

JP) 

74)034 

+oooaa 

868 - 201 

7.0201 

0.9450 

South Korea 

(Word 

126043 

+0.16 

884-102 

1291.20 1241.57 

Taiwan 

TO 

40.9533 

♦0^232 

448-818 

409893 409440 

Thrdtand 

m 

SOLDI OS 

+02987 

950- 387 

38.0387 36.7180 


American E xpress 
Sa*KnuMM*Bi 


■^nr.vr 

T* "V •’•pp 




rAAAj 

s^s 





a* 









UL— 



r."r:;k 

t'T+T' 




tattle mat* 
both Hi ami 


tSORMM hr Sap B. BkttriMr gpreadi ki mo Found Spot abb show only 0* fast Sne dseMsi {teas. Forearcl iatM *a Ml decoy quoted 
but *a impflad by curatit Inn <■*(. Barton Index cdaStted by ttw Bank of Bngbmd. Boo* awage tWO m ICOHd. OBor Bid Me+maski 
ttw Pater Spot tab** dartnd tarn TOE WM/RSJTtB8 CL06N3 SPOT* RATES. Some mkwe ara nnM by the F.T. 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


Oaring Change BMMtor Day's mid Om month Throe months On year J.P Morgmi 


Sep 12 

Cioalng 

ndd-print 

Europe 



Austria 

(Sch) 

108865 

Betgtum 

OBFrl 

31.7670 

Denmark 

(DKO 

00028 

RnUmd 

(FM) 

4JJ644 

Franca 

OTr) 

SJM66 

Germany 

(D) 

15436 

Greece 

PrJ 

235.100 

Ireland 

m 

1S3SB 

Itriy 

0) 

157000 

Luxembourg 

U-R) 

31.7670 

Nethertraxte 

(Ft) 

1.7310 

Norway 

wd 

6.7SOB 

Portugal 

m 

157550 

Spain 

(Pte) 

120385 

Sweden 

(SK0 

7.4921 

Swtizariand 

<SR) 

1-2846 

UK 

ra 

1^626 

Ecu 


12350 

sum 

_ 

1.45683 

Americas 

Argentina 


09996 

Brazil 

CRH 

OB510 

Canada 

(cn 

1J3BS3 

Mexico (New Peso) 

3-4040 

USA 

m 

- 

Padflc/MkMe EastfMrica 

Austrafla 

(AS) 

1J437 

Hong Kong 

1 HK» 

7J2B0 

Indie 

(He) 

31.3700 

Japan 

(Y) 

909850 

Malaysia 

(M*» 

£5525 

Now Zeeland 

(NZJJ 

1.6585 

PMHpplrjeB 

(Peso) 

202500 

Saudi Arabia 

(SR) 

3-7503 

Singapore 

(SS) 

1,4912 

SAbkatfSoia] 

1 P 

3-5603 

S Alrica (F?n) 

H 

4.4820 

South Korea 

(Won) 

000250 

Tahwr 

(T*J 

202093 



+0.013 630- 
+0.008 530- 
-CMS 900 - 
-00372 594- 
+00023 840- 
+00016 432 - 
+0-25 000 - 
+0.0075 380 - 
-taa 900 - 

+0.006 530 - 
+0.002 300- 
-£0024 796 - 
- 300 - 
-0065 260 - 
-00072 883 - 
-0.0017 840 - 
+0C117 623 - 
+0-0002 345- 


680 108680 
610 31.7810 : 
955 6.0955 

604 512207 

670 52670 

437 1-5437 

200 235,200 : 
395 15428 

100 1571420 
810 31.7810 : 
320 1.7320 

819 8.7816 

400 157.400 
310 128310 
968 7.5615 

850 12860 

626 15640 

355 1.2410 


-0019 500 - 520 08550 08500 

-0004 650 - 655 1.3675 1.3645 

+00005 015 - 065 34090 34015 


1-3470 1.3432 


-0004 620-630 


-005 500 - 500 264500 26.1600 
- 500-605 3. 7605 £7300 


-0.028 720 - 920 


Rota 

108655 

%PA 

OO 

Rata 

102853 

%PA 

OO 

Hate 

107905 

96 PA 

07 

Index 

1042 

31.772 

-02 

31.797 

-04 

31207 

-04 

1002 

00993 

-12 

01178 

-12 

£1941 

-1.7 

1082 

4-9644 

OO 

<2704 

-05 

62269 

-12 

782 

52882 

-06 

52036 

-06 

S26 

05 

1065 

1.5436 

-01 

1-5438 

-Ol 

15377 

04 

1075 

235-4 

-12 

23626 

-12 

236225 

-12 

602 

1^382 

05 

15352 

02 

151 68 

1.4 

- 

157425 

-02 

16645 

-£7 

16405 

-45 

752 

31.772 

-02 

31.797 

-04 

31207 

-04 

1062 

1.7311 

-Ol 

1.7313 

-Ol 

1.7248 

04 

1061 

6.7656 

-08 

6.8006 

-15 

£8781 

-1.4 

862 

158.1 

-5.7 

161.775 

-112 

16625 

-07 

655 

12058 

-22 

12921 

-2.9 

132235 

-22 

802 

75090 

-22 

75501 

-3.1 

7.7B46 

-08 

78.7 

12835 

12 

12815 

02 

12708 

1.1 

10B2 

1-5017 

07 

15597 

07 

15468 

12 

867 

12341 

09 

12324 

09 

12238 

02 

: 

1.3669 

-05 

12878 

-07 

12813 

-12 

83.1 

3/106 

-04 

£4068 

-03 

£4142 

-02 

— 

- 

- 

- 

- 

- 

- 

962 

1244 

-02 

12447 

-02 

1252 

-02 

875 

7.7287 

OO 

72274 

00 

7.7424 

-02 


31 AS 

-32 

31.6 

-22 

- 

- 

- 

90795 

£3 

98235 

22 

9S24 

£1 

1485 

£5433 

42 

2532 

£2 

£6055 

-£1 

_ 

1.6S94 

-07 

1.6613 

-07 

12666 

-05 

- 

3.7510 

-04 

£7557 

-06 

£7743 

-02 


1A8S8 

1.1 

1.4879 

02 

1.4812 

07 

- 

3-5658 

-02 

£5941 

-42 

3.8708 

-04 

- 

45157 

-9.0 

45745 

-£3 

• 

- 

• - 

00326 

-42 

006.76 

-32 


-£1 

- 



Ml 



iS 

mjSM 



Tt* 



2 CSSSSU£j 



S40 
3.73 j U» 
Ml j 4JW 
151 | 350 
154 ( la 0 



|“"T*2 Smfcsssi 

j -I wb Einom-sa*.OM 


ThoHand (BJ) 24JI700 +0.005 500-600 24^800 245600 2SJ242S -3-5 

180R rata far fi+p 9. BUfeffer mreerti In tbs Qatar Spot aUs ah o* only ttw Ian tin* dae> n* ftacoa. 
but m I mp tad by ament Moth inbm us. in te nd 4 ECU ara quoad In U3 conaney. JJP. Itomafl noma 


26-2083 -O0 - 

26.17 -£2 25.65 -2.7 

Pmd W n not rtraepy quoted to the imrlrat 
m Men Sep S Best **mge 1985.100 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 


Sap 12 


BFr 

DKr 

FR 

DM 

K 

L 

n 

NKr 

Ea 

Pta 

SKr 

SFr 

E 

CS 

S 

V 

Ecu 

Baighan 

(BFi) 

100 

19.18 

16.84 

4258 

£045 

4843 

5248 

8124 

4962 

4032 

2357 

4244 

£015 

4298 

£149 

3115 

£549 

Danmark 

(DKr) 

5£13 

10 

8274 

£533 

1.088 

2577 

£840 

11.12 

2582 

8105 

1229 

£108 

1250 

8241 

1248 

16£4 

1289 

France 

(FFf? 

6010 

1153 

10 

£980 

1229 

8970 

3274 

1222 

297.7 

242.7 

14.17 

£430 

1211 

8583 

1293 

1872 

1538 

Germany 

(DM) 

2058 

£949 

£485 

1 

0421 

1017 

1.122 

4298 

1012 

83.12 

4.853 

0232 

0416 

0285 

0248 

64.18 

0525 

Wnd 

m 

4690 

9279 

8.138 

£375 

1 

2417 

£6U 

1048 

2422 

187/4 

1158 

1277 

0285 

£101 

1540 

1522 

1246 

Italy 

IL) 

2233 

0288 

0237 

0098 

0041 

100. 

0110 

0432 

1022 

£170 

0A77 

0082 

0041 

0087 

0084 

6202 

0068 

Nettiert ends 

(R) 

1825 

3521 

£054 

0282 

0276 

9072 

1 

£916 

9020 

74.11 

4287 

0742 

0270 

0789 

0678 

67.17 

0468 

Norway 

(NKri 

4656 

8290 

7.798 

£877 

0258 

2310 

£263 

10 

232.1 

1092 

1126 

1295 

0944 

£014 

1478 

1462 

1.195 

Portugal 

(EfiJ 

2019 

£873 

3-lBq 

0281 

0-413 

9982 

1.100 

4208 

100- 

8153 

4.780 

0217 

0407 

0268 

0.638 

62.90 

0515 

Spain 

(PW) 

24.77 

4.750 

A121 

1203 

0508 

1224 

1249 

5284 

12£7 

100. 

£838 

1.001 

0499 

1.DB4 

0780 

77.15 

0.631 

Sweden 

(SKrt 

4£42 

£137 

7258 

£061 

0288 

2097 

£311 

£051 

2101 

1712 

10 

1.715 

0855 

1223 

1238 

132.1 

1261 

SwAcertand 

(SFi) 24.73 

4.743 

4.115 

1201 

0508 

1222 

1247 

6277 

1225 

9925 

6230 

1 

0498 

1.063 

0.779 

7723 

0230 

UK 

ra 

49.63 

9520 

8258 

£411 

1216 

2453 

£704 

1059 

2452 

2004 

11.70 

2.007 

1 

£133 

1563 

1542 

1285 

Canada 

(taj 

2327 

4.463 

3272 

1.130 

0270 

1150 

1208 

4205 

1152 

9325 

5,486 

0241 

0469 

1 

0233 

7£48 

0593 

US 

ra 

31.75 

£091 

6283 

1543 

0849 

1669 

1.730 

£775 

1572 

1262 

7/488 

1284 

0640 

1285 

1 

9821 

0209 

Japan 

(V) 

32.10 

0158 

6248 

1.580 

0857 

1587 

1.749 

£860 

1592 

129.8 

7508 

1298 

0647 

1280 

1211 

100. 

0818 

Ecu 


3923 

7.526 

6528 

1206 

0202 

1999 

£138 

8272 

1942 

158/4 

9249 

1587 

0791 

1288 

1236 

1282 

1 


EMS EUROPEAN CURRENCY UNIT RATES 

Sap 12 Ecu can Rata Change %+Afaan % spread DJv. 

rates against Ecu an day can. rata vwerices t ind. 


Nethartands £19672 

Batflban 402123 

(January 1.94964 

Mand 0.800628 

Franca 053883 

Portugal 19£854 

Danmark 743879 

Spain 154^50 


£14429 +OLOOQ24 -£39 556 

395627 -00134 -£11 528 15 

151246 -000015 -151 506 

0506614 +0000834 -028 353 2 

554097 -00038 016 £90 -1 

194-938 -0012 1.08 156 -7 

755468 -000766 159 146 -11 

158566 +0554 3.06 050 -21 



132 fr+m 
4M SHU 
4 «|m» 
UBla-MBi 

174 1 8-MO 
uala-m 
ia»ltoMo 


C20(UW+- - 4H US 4.10 S-Mb 

rawtoo-raasgs — loo zzs Uz o-mh> 

Eiaw-majaa itb zm ui mk 

whssh list uil uzItoMk 

j i - — 


10,1 ** Western Tisot Ugh tauraotChoquBAcc 

1 IT* MOMTCMta. PlpraSl PL1 TOE 0752 224141 


num+ — 4.75 iso 4JM at.' 

OdOO»«14dHB 1 450 135 458 Off 

EljMMtfW 1 43 lit 432 Ob' 


mr 


a Maw wm. m 
r (tad a* hOM * 
rtonaa ta MbcM a 

kfan* MM nwr Im 
nr. at p? h i p*i 


’ Balaian taw, Van, Eacufa, lira i 


■ D-MARK FUTURES (IMM) DM 126,000 per DM 


I TEH FUTURES (IMM) Yen 125 par Yen 100 


Sap 

Dec 

Mt» 

■ SW1S 

Open 

02505 

06508 

02505 

3 FRANC PtJ 

Latest 

06493 

02432 

02500 

TURKS (H> 

Change 

■02008 

-0.0009 

-0.0009 

1M)SFr12E 

Ugh 
0281 B 
02520 

0. 8505 

,000 per S 

Low 

02485 

£8498 

£8500 

FT 

EsL vd 
59.052 
19.488 
178 

Open Int 
88238 
*£463 
£167 

Sep 

Dec 

Mar 

■ sim 

Open 

12104 

12185 

UNanmn 

Latest 

12111 

1.0177 

1.0255 

BBS (MM) 1 

Chanoa 

+00087 

+£0086 

B82500 par 

High 

1.0128 

1.0190 

122S6 

£ 

LOW 

12007 

12165 

EsL vul 
24205 
10114 
22 

Open HL 
52.091 
21532 
1509 

Sep 

07809 

07798 

0.0011 

£7883 

£7797 

27.701 

33200 

Sep 

15620 

12610 

+02088 

15680 

15500 

81293 

90588 

Dec 

0.788B 

07814 

00015 

£7837 

£7814 

11258 

18273 

Dec 

15510 

15578 

+02070 

15010 

15502 

£973 

12.782 

Mar 

07850 

0.7838 

■0.0011 

0.7850 

£7838 

886 

842 

Mar 

- 

15570 

- 

15670 

- 

7 

108 


NON ERM MEMBERS 

Greece 284513 291523 +0143 10.14 -043 

ttariy 1783.19 194652 +1-53 855 -006 ' - 

UK 0.788749 0795558 +0.000607 1.12 152 

Ecu carnal nan* nt by m* Bbop«4d CaamMoa Cunenctaa am fa doacantog ralaha abmaiii. 
ParcMUpa changaim for Ban a peaRhs Sanaa danmaa weak uarancy. Obaganev 5 km 8 ia 
rada b nfa ai ww «pnaada; 8ia pa r anaga dWaan c a m iaraan — actual tnathw and Etai gawd ratal 
taac^nmy.andaatnBdnwpn nU adpflnanMQBdurtonqf Uw m ii*n cy ^ina+wt tatafcmnta 
Ecueauma. 

{17IBIBS atwina M Mbm Ura auspmlad kora ERM. Musungrftcakaiatad by »ie Brenda Umaa. 
■ HMJIDBWBA SR era ORTIOIIS £31 5S0 {cents par pound} 


SMbb 

Price 

Sep 

- CALLS ~ 
Oct 

Nov 

Sep 

— PUTS — 
Oct 

Nov 

1/460 

. 

- 

. 

- • 

- 

- 

1570 

£49 

£39 

£41 

- 

- 

£06 

1200 

529 

623 

£17 

- 

£04 

Q 87 

1225 

327 

320 

4.18 

. 

£30 

£73 

1250 

152 

£02 

£55 

£13 

£98 

158 

1275 

0.11 

024 

128 

1/48 

£2T 

221 


Pttatoui Ufa aoL. oau S120B Pun E&3M . Pmr. day's open tat. cab wi.908 An 400529 


r J!4TER£ST RATES 


MONEY RATES 

Soptembar 12 Ovar One Three Six One Lomb. Db. Rapa 

right month nriha rrtha year inter. rate rata 


II UK INTEREST RATES 


i MOWnrH BUIlOaiMIIK FUTURES <UF|=q« OMtm porta of 100% 

Opai Son price Change Mgh Low Eot vd Open Int 


9459 94,96 


9563 130669 


Belgium 

4 TV 

5» 

*4 

5% 

64 

7/40 

450 

- 

week ago 

4^ 

5V4 

64 

554 

SH 

7/40 

450 

_ 

Franco 

53 

5a 

5 Vi 

58 

844 

£00 

- 

£76 

week ogo 

Si 

5 i 

5V» 

58 

Ri 

5.00 

_ 

£75 

Cermeny 

42? 

425 

425 

£10 

£45 

£00 

450 

425 

week ago 

420 

425 

4.95 

5.02 

533 

£00 

450 

425 

Ireland 

4U 

S!4 

64 

64 

7% 

- 

- 

£2S 

week ago 

43 

S# 

64 

65 

714 

- 

- 

£25 

Ha* 

8 Vt 

8 H 

8 A 

944 

10 Q 

- 

750 

£45 

week ago 

8 /S 


88 

91b 

10S4 

_ 

750 

8/45 

Nattier tends 

4.84 

4.97 

5.03 

5.18 

558 

_ 

£85 

_ 

week ago 

4.B4 

4.97 

5.01 

£14 

5.46 

- 

£25 

- 

Switzerland 

37* 

4 

4K 

4+4 

4* 

£685 

350 

_ 

week ago 

35+ 

4 

48 

4 Ym 

48 

8.B23 

350 

— 

US 

<1 

4 H 

5 

54 

5!4 

- 

4.00 

- 

w«fc ago 

4*> 

45S 

48 

5V, 

514 


420 

- 

Japan 

214 

2 Vi 

2 * 

24 

20 

_ 

1.76 

_ 

week ago 

2 W 

85r 

2 * 

24 

20 

- 

1.7S 

- 


Dec 

94.81 

94.79 

-021 

9421 

94.77 

28440 

175388 

Mar 

94.43 

94.42 

- 

94.43 

9428 

19092 

162297 

Jun 

9425 

94.04 

- 

94.07 

94.00 

13991 

105718 

■ TtW 

BE MOStTU RUROURA HT4UTB PUTURCS (UFTC) LI 000m printa of 10044 


Open 

Sea price 

Chanoa 

wo* 

Low 

EsL vri 

Open InL 

Sap 

91.05 

91.09 

+£08 

91.11 

9120 

2008 

19088 

Dec 

B9.73 

09.70 

- 

89.77 

8921 

4929 

31914 

Mar 

Bats 

8£01 

+021 

8927 

6824 

2238 

19300 

Jun 

8823 

8£60 

- 

88.66 

8851 

982 

14335 

m THm MONTH EURO SWISS HUIK FUTURES OJFFQ SFrlm points of 100W 


Open 

Sett price 

Change 

High 

Low 

EsL vol 

Open InL 

Sep 

9520 

9529 

+£07 

9520 

9524 

1715 

15094 

Dec 

95/43 

9552 

+0.12 

9552 

9528 

7842 

19416 

Mar 

96.10 

9£16 

+028 

95.16 

9628 

1257 

11878 

Jun 

94.78 

94.82 

+£04 

9421 

94.76 

272 

6300 


LONDON 

HONEY R 

ATES 





Sep 12 

Owr- 

7 days 

One 

Three 

Six 

One 


right 

notice 

month 

months 

months 

year 


Intartw* StBrfng 
Staring CDs 
Tmasury Bfc 
BankBSa 


8-5 5\-441 5%-5>» «4-5Jt 7A-8I+ 

5Sa-5la 5S-Sfl 6^ -6 7 A - BB 

«-5,i 5H-sa 

. - SB - -5*# a-54 


■ S L0OR FT London 

mwrtuBilc Fbdng 41, Si 5% 53 

week ago - 4ft 5 6ft 58 

US Dollar CDa - 4.65 4.83 ' 5.14 5.70 - 

•wok ago - 4.GS 4.80 557 658 - 

sor Linked Da - 3%3fl3«4--- 

neek ago - 31‘ 3J 3H 4 

ECU UnMd Dl mid nac 1 mot 5 Ve a man; 9<n 6 mttts 61^ 1 yw &a, 8 UBOfl InMtUrii tang 
nw am eifamd nan (or S10n quand to mo makn by tour reterino# bate at 11am aerti waMig 
dm Tha bmu a*. Bonham Trust Bor* of Tokyo. and r+ufaml W— ndn w. 

Ud ram cm dwwit tor Us* rfammUc Monty Ram. US S CDs ad SDR Unload DepoMDf tp^. 

EURO CURRENCY INTER ES T RATES 

Sep 12 Short 7 days One Three Six One 


Srfgon Franc 
Daman Kura 
EMm 

Dutch Cuddar 
F+wch Franc 
Poitugmso Esc. 
Spamsn Peseta 
SWrtng 
S»bei Franc 
Can. Dofljr 
US DOCr 

Italian Laa 
Von 

Aston SSIng 
Snort witi naas a 


■ THBM MOHTH ECU FVTOTHS (UFFQ BcUlm points Of 10QK 


Open Sap plica Change Low EsL vd Opaiti 

Sep 9456 94.04 -052 94.10 94.02 753 8294 

Dec 93.47 B144 +052 9350 9141 792 6754 

Mar 8258 92-04 -0.04 3350 9253 470 44TO 

Jim 9252 9253 -0.05 3256 9251 182 1751 

' UFFE Uuw Mtad an APT 


i MOUTH ETOOPOIXAH {IMM) tlm poMa of 100% 


Lood adhortty depa 62. - 4» 5^-441 48-411 5% - 5H 5^-68 VSt - 
□taccunt Market daps e\ - 4^ ^ - 4% 

UK daartng ba* bass Mndhg rate S\ pgr cant from September 12. 1994 


Carta of Tax dep. (eiOOLOOOl 4 SU 34, 3^ 

Carta ol T«c nap. mta euxuxn la 1 ‘ape. Opoorm wthdaiwi tor cadi lipc. 

Ava. landar nag at doecu* lOB+Opc. B5QD taad rata SdO- E vor Rnaioa. Mda up day dug 31. 
1094. emawl nm far pwtod 8re 21 1B94 n Oct 26. 1084, achrniu 8 1 II 85^10. nobranca Me tor 
period JUy 30, 1084 to Auo^i, 1984, Sdiemea W 1 V KPSpc. Hnenca Houaa Baaa Rraa 5hpc Bara 
Sap 1.1884 


■ TIBtSM WORTH STgttJBroyVTIRUgaiFFgESOOJMO points Of 100% 



Open 

Sett price 

Change 

ugh 

Low 

Eat vri 

Open K. 

Sep 

9450 

94.07 

-0/4Q 

9451 

9426 

36074 

84015 

Dec 

93.70 

9320 

-£37 

9173 

9120 

88324 

161046 

Mar 

3221 

9250 

-029 

9223 

8145 

26843 

77503 

Jim 

9221 

9125 

-023 

9£21 

9129 

7527 

56081 


Short 

term 

7 days 
notice 

One 

month 

Throe 

manttri 

Six 

months 

OfM 

year 

CZ 


5 ■ 

A 

3 1 ! 

•5 

5ia - 

SH 

5V 

■SH 

8ft - 

6ft 

5* 

-5 \ 

5* 

-SH 

6 H 

-5i» 

6%- 

s h 

7ft- 

■7ft 

7H- 

7ft 

5 ■ 

4% 

5 - 

* 

5- 


5ft- 

4-J 

5ft 

■5ft 

to- 

S* 

5 - 

4% 

5 - 

4* 

6- 

4% 

5ft ■ 

4S 

Eft- 

■ 5ft 

5ft- 

M 

5+8 

-Sf» 

53a 

-5>« 

5,i 

- 5ft 

5%- 

to 

513' 

•5H 

HA- 

6ft 

12>j 

-11% 

10 

•» >2 

10% 

-lift 

114 ■ 

10*8 

HV 

-vHH 

n'a 

- 11 

hi 


7*2 

-7ft 

75| 

-7ft 

713- 

7fc 

8ft • 

sH 

83- 

8ft 

5*8 

■Sh 

5ii 

-5ft 

5% 

-5ft 

SH - 

SH 

6»+ ■ 


7*s - 

7ft 

a’* 

- a»2 

a% 

• 34 

4 - 

AH 

4J« 

- 4 

4*8- 

■41+ 

aH- 

4*8 

5^ 

-4!J 

5«+ 

-«fc 

5.1 

-5ft 

5 H- 

5*8 

6ft- 

■aft 

7ft- 

7ft 


-4Sn 

4 ll 

-4fi 

4% 

-4H 

5 ft- 

412 

SH- 

■sH 

53 * 

S3 

9- 

7h 

aV 

- a 

ah 

-81, 

8%- 

Bit 

to- 

9* 


10ft 

2>a 

■ 2,1 

Zh 

-aft 

aa 

-aji 

2V 

2ft 

rn- 

23 

23 - 

23 

3*8 

-3* 

3^ 

-3t» 

4ft 

■*A 

4\- 

4* 

5ft ■ 

■5 ft 

6{J - 

9U 



Open 

Latest 

Change 

Hgh 

Low 

Ebl vri 

Open M. 

- Sap 

9423 

9422 

-am 

9423 

9422 

90206 

348248 

Dec 

9425 

9424 

-0.02 

94.25 

9423 

219506 

507,048 

Mar 

93.® 

9327 

-022 

sue 

9326 

152297 

382274 


TradaS on APT. M Open kntBrttaC Bga. ore far prantoua day. 


■ SHORT jnBSJHG opnowa dlffg ESOOJBO points at icon 


■ US TFEASURY BSJL FUTURES ffMMj 91m par 100% 


SOT® 

Mae 

Sep 

- CALLS - 
Dbg 

Mar 

Sep 

- PUTS - 
Dae 

Mar 

9400 

£10 

003 

£02 

£03 

£73 

1.0 

9428 

£01 

£01 

OjOI 

£19 

£96 

IJti 

9460 

0 

0 

0 

£43 

120 



Sep 

9528 

9527 

-001 

9528 

0527 

1588 

7.646 

Dec 

9421 

94.62 

-am 

9422 

9420 

1,409 

11211 

Mar 

04.® 

94.39 

-£03 

94.40 

9428 

1284 

5,124 


Gat voL tabd, CaB M9» Putt 2IRB4. Ptwtous (toys open mu Cals 3811 n Puto 91S752 


41 Open Hama! ■ ginbr |kmoui day 
■ WWOWWRK OPIiOHS (UffE} OMlm pelna of 1DQ% 


BASE LENDING RATES 


i US DoBar red Yen, ottm- bra dsyT nodee. 


Strike 

Price 

Sep 

Oct 

CALLS - 
Nov 

Dec 

Sep 

Oct 

PUTS ■ — 

New 

Du 

8475 

023 

£10 

£13 

£17 

0 

£06 

£09 

0.13 

9500 

£02 

£02 

£04 

£08 

0.04 

not 

£25 

£27 

8525 

0 

0 

£02 

022 

027 

OM 

048 

048 


■ THREE MONTH MOOR FUTURES (MAT1F) Parto Morbenk oflared rate 


Eat «L total. Cals 843 pun 16S5, day 1 * open Ml, Oris 200401 Puta 202430 

■ EURO SWISS WMIICOPTiOlt8(UFFg SR 1m prints of 100% 



Open 

Sett price 

Chriige 

High 

Lew 

Est vri 

Open InL 

Sap 

9427 

9428 

-£01 

9427 

9424 

5,881 

40.474 

Dae 

93.87 

93.87 

-£01 

5329 

9323 

16243 

4£37B 

Mar 

93.46 

93.43 

-0.02 

93.46 

83.40 

5241 

29548 

Jun 

93.14 

53.09 

-022 

93.14 

9327 

3.215 

28227 


PUTS 

Dec Mar 
047 0 57 

050 0.69 

0.74 1.11 


■ THRgE 88Qlfre SUROOOLUtfl (UFFET Sim printa of 100% 


Ear. vot sal, Crib 100 Pub 0. Pimrious d^s opai InU Ca 3305 Puts I7S& 



Open 

Saitprica 

Change 

Ugh 

Law 

Est vri 

Open InL 

Sep 

9424 

94.92 

-£02 

9424 

94.33 

23 

2859 

Dec 

9424 

9424 

-ate 

8424 

9424 

123 

2003 

Mar 

3328 

3328 

■£02 

33.88 

9328 

100 

14® 

Jgn 

93 51 

9352 

-am 

9351 

9051 

200 

334 


Adorn A Compraiy &2£ 

ACodTiuRBorti 6J8S 

AIBBank 525 

tHerayAnrischer SJS 

BonkriBarada 5.75 

Banco Satno VttDBja- 5J5 

Bank of Cypres 5.75 

BrekriMriVt.^.^ 5.75 

BankriMb 5.75 

BrekriScodand -17= 

Bft&tfVkiEzsi.Z S43 
•Bmn 94pfey & Oo Ud 525 

CL Barit Nedarteto ... 576 

OyomUo sink '.'.'.Z! £7S 

ThoCB+vendm Baric. 3.73 

Ooufis&Oo SJS 

CracR Lyornria 6.73 

Cypnai Ptapriar Baric -S.75 


Duncan Larrria 5.75 

Eritor Bank Unted— 635 
RnaneUSGanBarik- 6 
•RdawlFtotangtCo-EJS 

Qnbtek ... 545 

■Obkrnaa Mafxxi SJ5 

HsWb Baric AQ a*Wl . 555 

•HarrixoaBank 5.76 

Materia & Gen Hu Bk. 525 

•HB Samuel — 526 

C. Hon* & Co 523 

Hor^tangfl Shanghai 525 
JJanHodgaBHc — 575 
•Laapoidikaaph 6Sm57S 

Lloyds Baric -575 

Mo^nj Bank Ltd ,575 

Rttend Baric 575 

"MouMBifMng 6 

t U BNeSMnstar 575 

SRaaBraOMs — 525 


* Rodugto Guarantee 
C o rporation Umaed B no 
longer audnfeud ax 

a barring insOuion 8 
Royal BkotScotend- 575 
•SMh&WBnsnSOCs. 575 

TSB 525 

VUntedEKriKilwrit-. 5.73 
UrByTiustBaricFic-. £75 

western Trurt.- 525 

Whteaway Vririaa 575 
VorkaHroBank 573 

# Mambdra of London 
Investment Banking 
/asodskon 


To the Holders of 

6-3/4% Sobordinated Giwvertible Bonds, due 2001 
of ICN Pharmaceuticals, Inc. 



the lahn America, income 

AND APPRECIATION FUND N. V. 

DIVIDEND NOTICE 


C ta nsi w cni with the a u thorisation granted by the Board of Superrisory Dircctoa at 
September 8. 1994, ntstke k faeteby gj+en that tbc U Managing Dinette has 
dedaml a disnibntioa erf USSOAO per Cbsa A Share and an equivalent amount on 
a yield basis for Class B Shares, payable on September 30. 1994 to common 
sbueholdcta ol teoonl at (be dose of bestaesa on September 23, 1994, in flic case 
of shares held in regjggi rd form, or noon preurmr+don of ermprm m+w o iiuftinl 
b> the common share oerdficate 10 tbc Fmxf* AdmimstraCor (an or after 
30, L994), in the case of common shares heU in beam form. 

By order of die Memaging Director 
Adnrintrttttor, Maaagim; Dkrdor and I-ocahox of Priadpal OfOw 
MeesHetson Trust (Curacao) N.V. 

John B. Cjomwareg 6 

WOkmatad, Onacao 
Netherlands 
Antilles 

l a wg& u e ut Manager 
Scodder, Steven* A Clark, lac. 


E 


REUTERS lOOO 

hours a day - only $100 a montfil 

LIVS 7WM8CMLOMHOB8K7TTOVOUHFC 


Financial Information Service on Japans* Corparau, Issuers 

M IKUNI’S 
CREDIT RATINGS 

on about 5/JOObeoc ItaM: and about 1,300 short-term notes 
Cost: USS4.600 per yem 

■■?!*!?«»!! after November 1, 1094) 

TactafeuM n Co, Ud. • 

Qd-Hfa Mad BuBrina t?-L NsfeSUMboaM i++v»— 

Mfasto+'a, Tf*yo ms. Japan u FaxCQ-847s.n^ 

D Please send further Wormation 
































H* n * 1 


m: 


FINANCIAL TIMES TUESDAY SEPTEMBER 13 1994 ★ 


INDICES 


TT 


ESIEEEHaZZSIglS 



i 


r- J 


KO 

0-7 _ 

sj> _■ 
bio — — 

981 14 _ 
70024 _ 
am 12 _ 
500 22 _ 
MtU - 
305 53 _ - 
1HU _ 
810 — — 
53 _ 
U ~ 
23 — 
93 — ' 
23 — 
73 _ . 
73 — 
S3 — 
13 _ 
U _ 
07 

13 _ 
BIO 23 — 

an 2.7 _ 

405 2.7 
442 43 ' — 
S52 78 __ 
72 4.1 _ 
570 415 83 _ 


<i}. 


£ 


> ip p?. 





1 J5KT +1013701 
1310 +10 1400 1 


w- 




1.090 -to 1390 

534 +1 830 



43 
5 43 _ 
50113 
18 _ 
04 73 
S3 _ 
23 _ 
14 28-7 
58 _ 


3£ 


31 


HZ 



m 


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FINANCIAL. TIMES 


TUESDAY SEPTEMBER 13 1994 


44 


— *pmdase September IS 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


IK. K SU 
X E HOe 




0.48 3.8 2 2 310 13% 

0.18 1.1 38 123 151 
If* 2.4 24 TOSS. n% 

88 2308 57*2 
12 88 3$ 

2.00 18 34 388 5t$ 

are £5 17 SON Mb 
050 38 ID 513 14% 13$ 

052 23 44 22% Z% 22b 

26 IS? 141 14*2 1*b 
044 15 30 151 241 24 



Hfah fauSnek 

171 12$ AW 
18% 121 AL Labs A 
rebSTftM* 

Zl 521 AAR 
5 3%ARX 
561 M%ASA 
31%25%AhHL 
1*1 IllAHUPt 
231 17$A»W 
161 111 Acptncabi 
31 221 ACC lu 
121 9%«*l(Mhi 1JB 111 
7l AQI fiadpp i 080113 
71ACHMSPI 088126 
a\ ACM G« sex 189 127 
&1 ACM Manx 188 122 
BXCNMnartfi 072 8.9 
Bl AcnaOv 044 3.7 14 1029 
6b Acme Bad 7 31 

23 tartU 080 22 13 3 a% 2/1 271 

131 5l Actan 038 12 3 G98 111 101 til 

15% 1 literal 112 254 141 14l 141 

181 181 **ana Ege 048 27 0 174 171 17b >7b 

M «bAU&ao 350 13 488 571 57 57 

380109 11 4440 28 271 271 

018 388 251 6151 

016 06118 69 17% 17l 17$ 

1.47 28 12 20 57 56l 581 

2.78 57 7 7119 48% d47l 4*1, 
0.46 1.3 IS 474 3S 34l 341 


a 

12 

Hi 

91 

151; 



311 161AM8C 
8 1 SAdnulGrp 

20 ISAM Inc 
581 4*1 Aegon ADR 

ESI 4*1 ABR3L 
36% 25% AfaC 
221 16%Almsi 
4 IlMeenhc 

S 3a$iyrPrC 
26l AfennoFrt 
281 ISlMgtota 
18% <41 Aefcase 
291 21% ATTdi 
18% 13% Aral® ter 


OSB 4.1 15 2892 

2 299 21 
098 21 38 1030 47% 
030 1.1 171492 29 

43 287 24% 
1.84 110 12 22 161 
3085 281 
020 10 25 131 171 


211 161 Afcmyttx 035 1.9 31 94 18% 



171 ISlAfcmrix 020 1 A 2022 14% 14l 141 
251 IBl AttCnS 028 12 16 89 23% 221 23% +1 

221 171 AKtfw A 028 1 J 16 48 Zll 211 ml -1 

30% Si fUbhn 044 1.6 22 32Z7 281 2&1 2*1 -1 

261 191 AienAI 030 10 89 2216 2*1 25l 251 -1 

e6l48lMK3 V00 1.6 44 1148 «3b «1 93 -1 

301 231 AtoBrnm 070 15 5 361 281 28 281 

221 14 MexAl 010 05119 100 201 201 201 -1 

24% T7 Afiegh Lud 048 28 20 1300 Zll 21 1 21 1 *1 

281 20l ABqS 1 x 164 00 1835888 201 201 29% +127 

221 131; Alan Can 018 07 16 8m 221 ml 21% -1 

28 20 Mogul 044 1* 18 1027 27 2Bl 2B1 -% 

41 1 Anon 1 3SS 1% dl 1% 

271 171 Aincs Cap 184 7 6 22 66 ml ml ml 

101 9 ABncp Q 018 16 83 101 10 10% 

090 3.7 15 5 241 24l 24l 

067 16 7 4340 351 351 351 

088 12 19 1732 27% 271 271 

25 429 6% 6% 6% 

11 1446 30 291 291 

160 16129 322) 83 1 021 82% 

. , 41 1188 22% 221 221 

TltenGmtKk 096124 37 7% 71 71 

Gl ten Prods 025 15 24 7 7% 7% 7% ft 


271 211 AUMsbi 
401 331 MSB 
291 24 ASUDpx 

7 4% Ataasb 
311 21%AUna* 
041 64lAfcxa 
30 1 20l AtaCp A 

Hi 
Bl 


% 

3 

-i 

-i 

•i 


El ArasGd 
25% MAmcarttndi 
53% 44AM8M 
9% Bl«n«d|Rx 
31 20>2 Am Sardck 
371 aPjAmBml 


008 1.1 12 1562 7% 8$ 7 

052 26 IS 489 231 221 221 

080 10 43 2495 481 48 46 

024 2.7 115 Bl tSl 81 

010 04 3212897 24% 841 241 

200 56 10 1694 35 


± 

11 221 21$ 221 ft 
246 71 71 71 +52 
171 


65 


171 >71 


251 161 Am Bn M 080 36 14 
8 Bl Am Cap me 1 065 89 
2d 171 Am Cap Bdx 164 8.7 31 

231 191 Am Cap CV 168 54 0 4 2d 20 

97 421 AmQoi 1 85 1.9 55 4418 961 981 981 

371 271MBPW 2.4Q 86 IS 1780 20 231 23% 

331 2SlAfllEqr 090 26 1338030 3ll 301 30% 

301 241 Amwrt 116 4.0 £5 1218 291 291 2d 

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Continued on next page 


i 

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. J 


SINANCXAX. TIMES TUESDAY SEPTEMBER 13 1994 ★ 

*$* 4 pm doss September 12 NYSE COMPOSITE PRICES 


NASDAQ NATIONAL MARKET 


ipmaouSapmomrt 


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IQ 7*2 '?«HT|£I1* 0.10 1 J 9 300 A o$ gj! ft 

i7% laja ffwa me in, »$ «% 4 

31$ SemtidUc 250 85 16 36 33 5* 35 as j. 

Z ^lI&SP P M0 °*T2f2BJ 224 224 224 4 

_y iw*awtj oat 25 tests* 22S4 a a 

S*S?*^!. Qx,l * iUZ w 11 ® «% «% o% ft 

g$ sewp_ LOO 7J 9 2930 13% 13 ft 

414 314 SriwrtP 30 617 404 40 40 4 

"SSSSSL »M 23 182Z32 7D% «$ 88$ 4 

<? aft Scutari) * 1.20 2.1 23 1839 574 30% 584 -4 

33ft Zft SthWffl 028 LD 13 1150 364 274 27% 4 

104 *4 SctMAzar 2 25 8% 8% ft ft 

JBS44SCMU 012 03 SB 487 444 434 444 +4 

164 13Scrtaan OLIO 05 14 222 18 154 154 ft 

BB% 37$ SCOOP 050 1.3 17531 63$ BS% 63$ ft 

184 SaUHW 021 05 ® 254 244 244 >4 

1Z4 8$axjd«&F 016 15 243 10% ift-toft +4 

ijfr *3fr3«ara 070 4.1 8 I2iz% 174 174 


dtaEs 

45 24%SW0x 

86 % 574 Scoop 

ss'SISKE 

184 U4300COB 

Ifr iM ®- 7 “ 154 154 

080 153B17D0 314 3^ 
284 2248*00580 33 533 » 254 

Sft3%S«MAt 25 746 3(4 33% 

5S4 424&aofl 150 02 8 4964 49 < «% 
04 114 gftWS ei 084 7.1 43 11$ T1% 

aawjqoa 02205351917344 334 
394 274SBVM 080 22 8 45 274 d27$ 
*>* “ftoR OCGD L5 17 U 324 314 
MSSbSmvEp. 042 15 204078 28 25% 
284 aSMRT 052 35 13 107 28 Z$ 

25 15 Star tad 022 1J 1811998 154 154 
25 19$ Smart K 050 35 20 1389 224 224 

i44 evawiyin 02a zjzi 99%®$ 

70% 584 Stair 357 45 21 ill 694 S84 
35$28$a*rW 056 17 171322 33 324 

2S%i3%stxMyi " 10" 938 15 144 

224 I3%3tartx**x 010 0 l7 15 206 14 134 

204-174 Sana PM 1.12 55 11 128 194 194 
.fit 54SBntan> 1 14 74 7 


114 
34 -4 

as 
& * 


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®* totota BtaKcnkHta ImWiBm 

94 S4‘MM*I 042 45 U 181 84 64 8% 

154 10TM*rPf 150 85 8 15 144 144 -4 

444 3*$Tta«fc* . 158 48 18 1834 374 *4 364 -4 

iftlOVThttm Sim 144 144 144 -4 

484 3041*04 050 15 T7 1175 43V 42% 42V -% 

124 94 Turn Mb 0.70 72 152 94 94 94 +4 

4 2$ TOM 44 34 3 3 

22% 18$ Torn 6*0 151 55 U 218 104 10 18 -4 

344 23** tetea USD 17 2! 3830354 3*4 364 +4 

28% M41M*B 080 07 68 475 174 164 174 *4 

4843^»1ltaWT* 1-68 4.1 8 KB 41% 4l$ «$ 

7BS347MBK 153 25 1211006 63% 624 824 -'4 

584 434TWW 150 15 45 308 55 54$ 54$ • ft 

30% tsh TwpdEwta ai7 aa zb 27% ®% zb% -% 

84 *4TtaP(8tab 060 01 320 6% d6$ 6% 

1 8 -64 TrnMRx 050 85 2217 84 <M% *4 *S 

584 42V tan 150 04 18 OK 404 46% -4 

30 234 Tqm»PB 250 85 10 117 28 274 274 

314 a04Twta* 29 619 294 284 - 29 -4 

94 44 Tm 006 ID 0 247- 8$ 5$ 6 

114 54 Malta 008 07 34 BBS *014 10% 114 +14 

124-54 taM 13 » 10$ 10$ 10$ 

68% 50$ Turn 320 3.1 13 5127 82% K% 82% -4 
G1%49%TtoeC SM8 75 j 300 4O%d40% 40% 

39$ 294 Dsn* M 020 no <7 53 38 374 374 

894 61 TM* 150 U M 5050 75% 784 744 -14 

214 KrtTfeuaPlC 040 25 24 2H30 20 20 2i 

4342M1M** 308104 17 33M 304 d2B% 294 -4 

44 24 talus V.HJ36J 1 84 3 3 3 -4 

MttDmi. 150 27 121068 524 524 524 -i 

44 4tacu« - - 2»- 51 44 ■ <4 *4 ■ 

144 1M Cap 035 15 129 194 194 194 -4 

374 244 ItaM 0128 09 208 »4 31 4 324 -4 

<3 <34 -4 


124 54 men 
684 594T«m 

SS£SS£ 

394 294tataM 
894 si taw 
214 »4 tan Pic 
4S4 2B4‘bMx 


144-4 174 124 

*94 A 314 S 


tm m. k m mn. 

ifth tm*Mk » 1 tn W Lw omm am 

ICft 84UELKtae 060 01 0 7 84 54 »4 -4 

164 154 USC M 098 35443 2888 174 174 T74 *4 

<S%304USXU5- 150 24 92217 414 41 41 

174 124 USX Dan 030 M 8 89 1*4 144 144 

' 91 ft IH9I775 178 08 4 7 27 27 

3l4 2B4U0tani L72 85 13 370 VP\ 4264 264 -4 


S34 444WCPX UB 24 

2*4 1B4VkmE ■ OS 29 
7 44 Mi tax 056 15- 
84 74«Mta9Hl IIMTZ4 

lift 

124 104MtaWM(X 054 77 
74 54 tan HI 


394 284 tata 034 06 

W| satair 

154 1Z4 tataor 156 82 
784. 804 VkESKOO 350 02 
4*4 HVVHwtar 
254 194 tastes 
284 afttaatac 
3Z4 2*4 tamo* 044 -L4 
14 71Htasr 


L2B 24 13 737 «4 
■ OS 29 281 204 

096 15143 7 64 

ll 05*104 94 74 

is IS0 125 221 94 

X 084 77 147 n 

31 179 64 
031 06 19 IS 874 
28 OH 984 
159 02 9 32 134 
350 02 160 81, 


82 324 


19 IS 974 874 374 
2H OH 984 884 884 
9 32 134 1»4 134 
no. 91. si Bl 
21 309 43 "424 424 

10 U 214 214 214 


54StoaMnp 1 14 74 

344S-JHB* 150 27 12 2310 374 

1B4aka& 31 1008 244 


13$ 114 Staar 
94 548E2fer 
244 174Sk|tlBX 

5 34SLtad* 


-1.12 89 34 133 124 

016 25 1 84 84 

048 25 19 134 2l4 

OS 15 15 38 44 


I SHOOm 020 4.1 81 IK) 


174 84 SaflMi 
354 264 SKBcMz 
324 23$BK8Ecfl 
244 M4ScMhsn 
26204SUCfBrJ 
444 344saponr 


91 IK) 44 
KB 834 144 
055 25 W 78 334 
1.17 35 3456 204 

052 25 14 406 224 
050 22 18 15 234 
15B 35 17 360 36 


aft 214 +4 

a a "■ 

u 144 

S sa4 +% 

23 23 


OCftSe&tanx. 150 27 121058 

44 XtaCMHf ■ - 218 51 

3*4' 144 KW Cap 035 15 129 

374 244 MM 028 09 208 

45 98tamoBac 012 03 25 687 
28 224 ItaM 098 27 B 161 
USfitTtmr 234 05 21 22B 

164 134taMSMl 040 27 39 79 
43 294 WOBwnAI 240 37 17 U 
25 194 tan 040 1.7 37 321 
384294ntev 029 07 £8 04 

444 34TnW*Dl 036 13 747718 
374 284 TMM' 156 35 25 1580 
304 3l4lW«n 150 25883 282 
8 24taaOn 7 255 

134 mm pi loo as to 
44 4 TCddSOp 14 75 

154 84taMn(to 058 05992 S2S 
Z74 25TDHC281 251 107 4 


184 154 KW CD* 
374 3l4VtaMto 
534 44 Menu 


21 141 29 
-L4 92138 X 
VI V 1 
IS 813 IS 


214 T74SnjOBfOlx 028 1.4 23 210 T*4 
34 234 Bafcexon 31 1148 31 29$ 30 

34$ 28 Sons: IS 33 10 2311 32$ 324 32ft 

534 4B4 Soar 047 05134 138 5B 5^£ 59 

194 UVSbSntw* 024 15 63 574 124 124 124 

46$ 40 Son* Cap 390 87 27 41$ 41$ 41 4 

454 32SUM*»12SI 75 4 32 HE 32 

24 174S0iJsatodx 154 75 11 101 18$ 1B4 is4 

30 1B4Sfttoo 050 24 WO 289 214 214 214 


30 lift SVxfem 
22 168(HW 150 6.7 9 28 18 

22 lS$Sa*aDp 090 45 9 575 21 

22 174S*nCQ 1.18 07 5 8128 17$ 1 
33$ 28$ S0UM6E IS 8.1 11 22 274 
364 284SKTd 17B S.4 65 IK 32$ 
S 24S9H9 004 02 22 8704 34$ 1 

194 15S0UtttSH 092 47 20 49 174 
19$ 1545MMED07 0L2K 15 15 483 184 
304 234 SouWHta 220 84 10 487 284 
124 fftSjptaRrxI 046 49 13 If 

74 44 Spartan Qi 7 11 5 

1B4 144SphaniD 012 09 7 Ifife 

39$ 29$ Spitaox L20 35 13 191 3ft, 
4fl4324SpdMX 150 29 27 2901 38$ 
iai3$SPX 040 25 22 Bt 174 
184 134BUCDranx 040 25 7 55 154 
28$ 14$ 8U Motor XL32 15 13 106 18$ 


33$ 28$ SmSrttt 
364 284SKTd 
39 2458019 


3Z4 ^4 
234 -14 


74 44Sporton4 
1B4 l4$SphnD 
3Bj* 294 Spitoox 
4D4S24Spdnx 
19 13$SPX 


Oil l—IIUMU 

44$ 384 Safflkx 
43 1 ! 37$SUBlK 


11$ WStUMMI 054 04 61 

29$ 24$ SXLFs&Bk 094 25 7 871 
74 ^zSMVopx 020 25 6 78 I 

134 3$SBitan«a ooe 001002357 1: 


012 08 7 164 154 lAt 

L20 13 13 191 3B4 38 36$i 

150 29 27 2901 38$ 38 36% 

040 23 22 07 174 174 174 

040 25 7 55 154 154 154 

032 15 13 IS 184 17$ 184 

012 1.4147 135 8$ 8$ 8$ 

098 23 14 265 294 28 29 

058 25 IB- 9 27$ 27$ 27$ 

158 35 21 47 354 334 3^2 

140 3L4 20 270 414 40$ 41$ 

140 02 53 843$ 434 43$ 

098 ao 20- 12 224 22$ 22$ 

054 04 61 10 mo 10 


19$ nVta&os 19 294 

75 3S$Tooto»X 044 07 10 19 
494 36$Ta*at 1.12 27 T1 488 
30$ 20ft TORI COp 048 15 18 134 
35 274 taCO 054 22 12 SB 
384 1941nH8*B 018 06 47 ' 70 

40$ 324taflUs 24 9325 

26 224TrmtiMrc 1* 95 9 29 
57$ 48$TrBW* . 250 19 9 512 

56$ 45$TnnHOnx 099 07 13 99 

16$ MTmco 060 45 10 327 
M$ W4TiwaXB 5 2 

17$ KfttnMBdl 026 21 10 27 
43 Oita* 090 1 J 9 3118 
18$ 13fttatoprx 024.15 18 33 
37$ S37MM29 250 75 8 

204 124 tam B 40 

644 50$ Trims 154 15 21 021 
24$ 214 1MQ* 078 13 128 

47$30$TlM9 080 25 102894 

.40 S1$Tam 088 15100 7S 
37 24$ IHkn 010 031301058 
44 z$ Tucson B kb as 

7$ *4 tan Op 020 42237 IS 
14$ B4Tnttbki 012 15 IS 
284 gltota'CM 094 75 110480- 
2*4 IBVIWntfcC 070 32 20 31 
554 424 lycat . 040 OB 26 1943 

10 ^TraT 010 15 3 242 
84 *4Ttar . 450 S 


154 15 Zt 021 
078 13 128 

090 25 10 2894 
088 19100 7S 
OK) 031301058 

108 as 

020 42237 IS 
012 15 IS 
094 75 110488 
0.70 12 20 31 
040 00 28 1943 
010 15 3 242 
. 450 53 


||3 

§ 3ft ^ 

374 38 +4 

5 54 -4 
ri 4 

124 . 

ri -$ 
414 >4 


5-$ 

Ur- . 

33 . -4 
18$ +57 
M4 
18$ 

554 *4 

23 +4 


SJ30 

132 

57 41 
25 22 

39TPi 

STDrtSA-' 

35 

53% 

38 

53$ 


- w - 




18 

236 10% 

19$ 

10% 

122 

02 13 

48.26% 

a 

2fl 


87 

329 lift 


19$ 

120 

06 11 

920 3ft 

» 

33 

036 


34rtl£% 

16 

16 


47 

366 4$ 

ft 

4$ 


364 30$WUhMCS 054 25 W T7D 324 31$ 31$ -4 

204 22$taM1X 017 0.7 24 H» 25$ 25 2S4 +4 

54 24tarmrta OM 15 10 295 '4 3$ '4+4- 

86$ SO tartan- 244 10 38 4788 82% «T$ 814-1$ 
18$ M$ tafeBarp 150 89 8 492 14$ «4$ 14$ 

4243B$WnbEL 22 AT 13 84 SU38$ 36$ -$ 

28$ 20$ KOMs 158 45 8 98 22 21$ 22 

28423$ MastfS 420 15 17 S 258 234 235 +$ 

3B$1B$tatUax 048 15 23 214 364.34$ 34$ -$ 

34 1$taansntod 058 43 8 194 2 1$ 1$ 

184 13$ tat* M 020 15 17 418 17 16$ 16$ -$ 

40$ 36$tatoOWK22B 8.1 28 885 37$ 37 37$ +4 

11 64W*ma 054 04 141288 K) 9$ 10 

28 2447MMI 020 35 15 84 264 24ft 25 

11$ 7$ W8B* 0L23 22 U 1S6 lift 10$ 10% 

334 17$ Ml* HI I 024 07 28 2086 32$ 32$ 32$ -4 

WftlZftMtoF 490 25 19 2071 154 1S24 132$ -2$ 

1B$M$tand|* 024 15 19 986 15$ l^s 15$ +4 

2S$Zl4taMCD 048 15 17 5 S 24$ 24ft -4 

16$ 14$ VMM Ex 098 0511 158 16$ 10 184 +4 

50 39$ WMn 223 43 42$ 43 

18$ gVtaWtoi 13 1013 124 «V 124 +4 

aft B$WOD 91245 1#4 M$ Mft +4 

3ft 18 mutes 020 05 17 115 22$ 22$ 22$ -$ 

2ft 18VWMMB0 023 15190 91 2*4 « 2*4 -4 

34$ 284 tati tax 156 75 9 487 Z7V 274 274 -4 

154 Kfttami 020 15 18 6341 13V 13$ 13$ -4 

Jft 44tatox0oal 052 01 0605$ 584+$ 

20$ 13$ tala tasto 3 IB U 18 18 

aft Iftmne 059074 40 15ft 15V 18V -4 

38 29$Wkox 1.10 01 452181 36 35$ 35$ +$ 

51$ 38$ Wj«»r L20 07 17 57D4 44ft 44$ 44$ -$ 

214 iaft WtataMf ore oo w 2zn w$ 16 iB4 -4 

734 4e$W*2ir is 03 182247 54 52ft 634 -14 
16$ KftWtoM 18 B 15V 154 16$ -4 

1B14Vta6wx 054 OO 19 511 16V 16$ 16$ -4 

17ft 13$ KHIIter ' 21 9 174 17$ 174 +4 

32$ 29$Mcartac 15094 18 57 29$ 29$ 2B$ -4 


i 13 Wtfan tac 
I 304 KIM 
lOVtaakBOW 


28 2441MHC 

n4 7$ tain 

wftnftwtaF 
18$ MVtand)* 
25$ 214 MM 0* 
18$ 14$ task* I 
50 39$ Mias 
16$ BVtaMHa 
aft BftHriflo 
aft iimutei 
2ft 18V MB 


6ft 44M6art)aal 
20$ 13$ Mum 
204 iSVtaaliac 
38 29$ WKkox 

Siva^m* 
214 IfttaataM 
73$ 48$mta 
19$ 10VMMM 
1814VW6WX 


284 23$ UB Hs 

8 4$URB 


151 37 19 1048 
32 10 


51 V «Pz USFBfi4.T 4.10 85 
3617VVS8 


28 284 234 +V 


9ft SMB 

, as-StortflEm- 

I BSfMRn . 
i Z74 StomStab 


108 12$ 12$ Cft .-+$ 
31 1387 32 31$ "31$ ' +$ 


0.12 1.9 8 80 84 

050 15 27 8 32V 


20V 9$SkraCmt 0.71 35 41563 204 
27$ ift Stop Step 282270 27$ 

16V ISftSHqn* 084 &718 B 14ft 

414 SSSVRXl ' 12 DEB 36$ 

S 22ft an* s 8S Vh 

12SMHHk 058 24.19 359 15ft. 

314 23ft 8tan*il9* 150 49 14 101 26$ 

4% 2SDM*ShO* 050141 0 24 ft 

iiio4snDk4 i.ioKLS -7 -sr 10$ 

S 46uiDkB 024 45 8 SO 5V 

4$SnBHV 028 M 43 IS 4$ 

404 33$Sunnr 040 09 14 907. 44 

50$ 41MMX 120 25 18 578. 90 

114 BSmsbWf 1.19115 W ift 

34 IftSBHMI 4837 2$ 

51$ 43$ SMlt 128 25 18 484 904 

14$ 10$ Star tad 058 39 13 28 Tift 

484 20 Stater OW OO 20 897 804. 

404Z74StaM 094 13 11 823 28$ 

20 lift Sun C*( 016 09 21 407 17ft 


32* 32$ 
a) 2ft 
25ft aS +14 
14V 14$ 

34$ -MV -$ 
86$ 38$ -1 

15$, 15$ -$ 
26 2B4 -4 


38 17$ USB 
31$ 23$ DST* 
51$ 4SftU6XCUtf 
IS 05$ 0*. 

J0$ 3$UDCHn 
24$ lavuacop 
11$ 5$UBUe 
24 22$ Mtal 
Z7 23$ uni he 
i7$ii$ikmx 
744 5ft Wte 
1^100$ (MW 

Ja&xsr 


10 ft ft 

47 47$ 474 


lExcmn an 75 

o*. 


8 886 zft- 23 23$ 

1.12 17 177037 30$ 29ft 30 

ISO 75 25 49$ 40$ 48$ 

1M 514 SOft 97$ 97$ 

158434 3 111 3ft 8$ 3ft 
158 7J 19 1S2 18$ tf17$ 18 

150 74 80 2430 22$ Kft 2^ 
040 1 J IS 178 24$ 24 24$ 

MO 07 M tt 13$ 1ft 13$ 


28 +4 

<5 a 


•»$ 224 mm 

.74 mm- 

. .,12 ft Mo**** 
5ft42$mufex 
1ft 8$Wtanta0B 
Z7$2ftMtacte 
3ft 27$ WteMAr 
18ft 15WM) 


010 14 141614 74 
OM 27 14 367 314 
006 0516 n 74 
020 1.7 19 323 11$ 
158 3.1 15 364 614 
IS 131 94 
141 55 13 162 2ft 
152 07 10 IDS 28$ 
040 241S 14. 17 


iHteoCOpx 112 37 K ISM) 


+ 1 

2*4 24 24 

13$ 1ft 13 


4ft 4ft 
33 33$ 
B H 


964 584 

30 ift 

34 ft 


51$ 43% Start 158 2518 484 904 
ift 10$ Star tad 058 3513 26 Tift. 

484 2B Stater 018 00 20 887 804. 

404Z74Stah DMU11 Sft 

20 lift Slip Cim 016 09 21 407 17ft 

23ft UtahsIHr OOB 04 n 20ft 
314 iftSStotaTn 60 mi 30$ 

104 7$8yn>C8n> 050 29 10 .30 : 8 
IflftlftSjoMUte 045 24 17 .91 1ft 

2* 12$ SyntH 154 45121280 HM _ . ^ 

2ft 21 4 Sysco 058 14 S 1913 25ft 25$ 2ft' +4 


1% 

-. Jft. 


6ft BTGBVBdr 050 35 2* 84 8 5ft 8 

43$ 2ft TCP Rom 150 24 13 227 41% 41$ 41ft 

8$ ft TCW tan S 084 85 111 .94 9$ ft 

49$ SftKXCapA 047 1.1 6 9 4ft 4ft 4ft 

24 1$TISH80* 008 35 3 88 2$ 2 24 

29$ 134 TJX 058 £6 14 1931 22$ 224 2Z$ 

1ft IftTKPBtap 050 OO 12 .« 13$ 13$^ * 


7$ iftlMhU on 07 14 «B 13$ 1ft 13$ 

44 5B$U>tar . 290 40 10 28 714 7ft 7ft 

fi.$t004[WW 494 39 17 777115ft 114V 1154 

ft 4Z4UflQm0X LSB 31 601190 30$ 4ft 4ft 

4ft21$lWMl 07S 25 33 2807 33$ 33 33$ 

„54 ft am cap . 11 m 12$ o 12 

; '54$434(hB350 £50 34 3 47 48 47 

87 SBIM34S0- 490 77 6 58$ Sh 80$ 

■ 39$ SOVlfcBKX • .258 75 11 351 33$ 32ft 32ft 

67$ 55$ IMhox. T.72 11 161885 58V 9ft 5ft 

2ft 23$MokaPtanl 092 39 0 134 23$ 2ft 25$ 

: s2lft OUtoriRsDs 020 15 S11B3 1ft 194 1ft 

2$ 4uc*n 0 KB $ A $ 

fh 8$l«ta 2.77275 730798 l®% K) 1ft 
t$ 2$ Us* Cap 28 173 oft ft 3$ 

V 2S$0*»m 096 2J 20 332 38ft 3ft 3ft 

j%12Va Mtalte 078 S9ST3BB WWlft 
!$ iftUkeonMx 020 1.1 18 n 1ft 18$ 18$ 

$S8AUlHKcn 403 01 21 5483 64$ 52V S3 

40 31$ UAm X 2.78 85 0 IS 31$ 6ft 8ft 

Ps 4$UdMnl 058 49 a 22 ft 5V ft 

l% iftitt»gam 055 a* n n$ 11$ 11$ 

$ UUUPHcOr. 12 20 $ $ $ 

(V ftiwr. 012 24 0 0947 ft " ft ft 
ftllVUSW ■ .'.050.-14 141463 13V ift 1ft 
ih Ift UBItar, 38 6 21% 21% 21$ 

MUStens . 1 603 1ft 18 18$ 

l$ 34%USlJCp . 154 34 8 206 3ft 3ft 3ft 

24 llVUGSto* 052 14 65 040 23 22$ 22$ 

!$ iftUBSug 058 05 00E84 28$ a$ 2E$ 

At 384 USm 254 04 34.4143 30% 3ft 30$ 

72 Rlllh 240 35 172006 K4 91$ 024 

iV.lftIMmr 092 67 U 201 1ft 13$ 1ft 

$1ftlMrah . ' - 2fl 222017$ 17$ 17$ 
1$ 29$ IH» Fata OK 30 13 590 31 9ft 3(1% 


30$ 22$ MKT 080 2.1 30 4833 26$ 
57$ Ifttatarin 016 06 18 214 26$ 
ift 12% taaMh 090 14 410880 18$ 
1ft 14$KxMMd* MO 08 TO 15$ 
7% fttaddeap 8 420 7$ 

B3% afttaghr - 043 12 27 490 41$ 

20V 1ft MhUtarx 058 14 20 7 194 

SVlfttamM 044 2.1 12 28 21 


9 9 -$ 

M 2ft -4 

8Z7 27$ -$ 

1ft 1ft -4 
30 3ft -$ 
28$ 28$ -$ 

414 41$ -$ 
1ft 1ft 
20$ 21 +4 


KB$67VXraix . 100 29 63 802 10ft 105$ 106 

54$ nXHM.125 412 74 3 5ft 5ft 54$ 

534 40 Un Cap ’ 046 1.1 22 83 50 48$ 4ft 

26$ 20tataQnrx 152 1712 18 21$ 21$ 21$ 


42$ 33% MU 016 04 20 205 
ft 1 2*pm a-u-lo 16 
Ift 72 b#B 5 IDS 

9$20$2H«nd 150 41 6 511 


i ft an* toe 09311-4 
Tift an 040 11 
u&arokdx 098 46 
1 11$ ZMg tad 158 85 
ftitaBlM OM 9.7 


.4 20 205 414 4ft 40% 

0 146 -4$ 4$ 4$ 

5 IDS 10$ 10$ *4 

1 8 511 25 2ft 24$ 


OBS114 16 74 ' 7$ 7$ 

040 11 15 31 12% 124 1Z% 

040 48 tfr 244 ift 18%! J9 

158 85 250 1lVd11$ 11$ 

OM 07 543 ,B$ 8$ 8$ 


g iivusnar 

IftCSJMr 
UUSIfens 
34%UOJCp 
-- 2411$ UGStu 
3ft iftuBftxg 


t Unto tads. OK 10 13 590 


ilhkrflMix 1.68 aa n 

tUPMML . 0 

I Mur Op 030 24 » 


6111* - 
22% mm Fd 


200 23 21 290 
S3 


264 17$ UM Cep 006 48 11 5M 
30V 24$UnocU 080 29 22 4010 
58 43UWCOP 038 15 12 1536 
37$ 25$ Upton 148 41 103878 
. Mlftu9jP> - 024 15.73860 


1.68 99 n 36 17 

0 83 A 
030 24 39 32 12% 

006 46 11 584 20% 
080 23 72 4010 28$ 
038 15 12 1536 50 


«£ «£ « 
20% 2ZJ 20 


35$ 384 
.20 20 $ 


m* «HH Jr tetar 

i tah U0* and Ha la MI8E MM la psdod ta 5s 1 tac 
i tan s WMnr on it to tosl s—stag to B psnUa am ha has 
I pUd, in jn* MH+ta nl <MM n dna tar lbs sai Uadi 

l tan m a n s no. raw ef own n and ta i n .ta w 

s- +— — sag - 

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u ip t taci tan i ru u ni m inhni. stand aeuadirpiM 
h ipnfel 42 ans .HMn In Matos Mto, ana to i» 
n d u ii aau u non e dam uto *«* * m taw. hh- 

-dmd pkU'lto m. sdrt'dtool rang tan U tom Mdort 
mtog. Stand dtand «r pdd Xto in, a * m ni m m 
addtas to anas, star na to n pn K ssta lbs Ittaar iM*t 
ta*nu<ta ixHa* ta taa» HE pto > la ito a ata 
taM dxtond ir Ml to w»>i 12 mta ta and: Nw 
stak udL DMtato togln an an a a*, amn. i tata ta m 
mu to praoatog 12 natap taatod ton on on a ta tond a 
is taUta nn HwtariWntoi kata an nim nr 
■anon nr knkg mpand ata Va tan ia c r M ar ncucw 
i ta hy sarti r oapiapi n ta toto d. atan nad aswau Mf 

paHtoMM ad an to M. M2W4 stas to M. 


AMEX COMPOSITE PRICES 


4pmGtasaSa(Jl8fnbgr12 


Stock Dto. e was up IsaCtaiCn* 

Adrlkvi 473 38 14% 14$ 14$ -% 
Afflnmc 2 9 1$ 1$ ft 

AtptaM 3 29 8 5% ft 

An hr P« . 154 14 8 48$ 48 48$ , 

MMaAxOMW 94 21 £0% 20$ -4 

MMN 095 3 829B 10$ 5 10 +% 

ftmEB* 21061 1$ 1& 1$ 

AopaMmA 51 208 ft ft ft ■ 


kn 072 22 48 24 2$ 24 +A 


SUM Db. E 100s Wgk Lav Class Qug 

Canto 0301755 MOO 174 174 174 +4 
axnpuao 0 54 Aft A , 
Cooed RA 5 22 94 ft ft -4 
CmssATA 0M550 27 18V 7ft 1ft ft 
CmanCA 040 43 5 1ft 1ft 1ft -4 

Grata CB 040 15 4 17$ 17$ 17$ 

CMC 053 84 14 19$ 19$ 10$ 
CuttniMb IB 44 3% 3A 3$ 


iaa 

3A 3$ 


Sock H*. E 100 k ngb' law Dn* eng 
Baton 025 141109 31$ 31 31$ +4 
MBS 4 15 3$ 3 ft 

HMBMN 3 313 iaA ft ft ' 

Mm 015 « 4 1ft 1ft 1ft . 

HvnaotonA 11 IS ft ft 84 +4 

i niOap 1 845 ft 5% 5$ , 

taBtoooQiX 012 29 75 11$ 114 11$ -ft 


%x$ 


atari* is 

D tofc a 

DucaBimai 8 

Bsstox 048 > 


13 23 W 
29 23 17* 
8 25 41 
> 0 


kitCPn 

1: ar 1 " 


33174 3A 3 
S 275 16$ 16 
OOB 204747 2ft 18 


ft' ' 
ift .ft 
20 


B8H0CMUO55 0 IS 2}i 2}i 2fJ +$ 
BtdBsMr 033 10 12 25 24V 3-4 

BOUMTA 054 30 117 5$ ft ft 
Banyne 10 86 204 Ift 2ft , 
MM 071 12 13A 13$ 13$ ft 

Board 6 2 112$ 2$ 2$ 

Walton 040137 6 22 22 22 

BfrfedA 67 S 24 23% 23$ -4 

BtasKAx 030 45 B5 flV 31$ 41$ ft 

BawiMtay nazioo 11$ 11% ii$ , 

Bcaaar . 31 21 3A 3A M ft 

Bowrnx 0^6 9 130 iftrilft ift -ft 
Braun A 154285 113 14$ 14 14$ -4 

Cantonx 020 14 17 23^ 2^ 2sS 

CnMac DM 20 33 11$ 114 114 , 

CbltanA 091 4 170 2A 2A ZA -4 

CMntaW S 25 2% 2$ J$ 

QnxkXI E 18 38 35V 3ft -4 

CMn M3T29 f}| ft <W 

CXcPti 05* 32 348 12V 124 124 -$ 

OVIMA 051 72 5$ 5$ S$ ft 


ten CD 04813 15 144. -14 14 - - 
Etapaap L722n 42 20% 20$ 2ft . 

ErtuBsr 057441 7180 13$ 12V 134 ft 

EmlteA 030 B 18 1ft 10$ 10$ -4 

Edtate . 5 T22 7$ U7$ 7$ . 

Bn 171325 35$ 33$ 36$ ft 

BwSr 2171 154 ift 1ft ft 

Btoto 12 280 2ft 19$ 10$ -4 

teb tad* 094 11 252 3lVri3ft 31V . 

AtoAx 450 18 17 78 75$ 78 +$ 

wawnc aa is m 012 nv 12+4 

FMatfl 058 74 84' 30 20% 29% -4 
ForaAU » 936 4ft-C$ 4ft 

Prtqumy 4 4 3% 3% 3% 


080 5 18 11 


InRaa 

Uaaxtae 

UndiCp 


.5 423 ft ft ft 
21 M 14 14 14 

20 21 ft 44 ft 

19 408 17 10% 18% 

72 81 8 ft 8$ 

9 105 If. 1$ 1$ 
13 91 ft ft. ft 

210 18 12V 1ft 1ft 
8 10 » .28 28 


Stock Dto E KXto M0fc laaCkaaCkBg 

nan 024460 280 37 30$ 3ft -4 

PagsuBfi 040 101313 1ft 1ft Ift -4 

Portal 066 17 113 ft ft ft +4 

MWBPx 154 9 2 17% 17$ 17$ , 

PltaUIX OM 181103 59$ 5ft 5ft +4 

PBkaqrAx 050 U n 37 36% 38$ -4 

teten 012 » IS 22$ 22$ 22$ 

PMC OLK 18 05 14% 14$ 14% . 

-AnUM 018 0 93 1A 14 la +A 

SEW. 

OkTcarp 230 9 14 35 » S -4 

SUpIMan 18 61 104 17% 17% -$ 

-taPIHta 020 48 44 ft ft ft 



3 .148 30$ ri 
044 a 106 2ft ; 
OM 41 10 5V 

20 7 

15. 4 ft 
1061032 tflA 


072 14-833 
070 80 am 

t a 
a 2B 
09412 57 


27 371 4$ - 4$ . 4$ ■& 


hfUPkto.. .0 45 
rWTrarx onse bbi 
-MMMM .020 19 20 
MnscE 112 15 
MM ; 298 TO 


S3* J? 
^ £ * 

Zilffl 5 

2* 24 -4.5 


-4 IkkAMto 020 46 44 s 

; Ttataax 0» 37 019 45 
ItenudES 97 04 u 
,- -A.-, itansta S3 133 31 
-4 WPUA 620 17 74 12 
TOtaCrky 79 33 2 
, - "Wpa 2 72 l! 

-4 Titan Mu 7 17 S 
TkmOlA . 097 80 U0 10 


ft ft Bj 

Ift 45 451 
4%. 14$ 147 


[TupxfllB CLOTHS 434 ift 


34 138 Gft dft ft 


5 a 24 2A ft 4* 

020112 00 24 2 24 +4 

30 48 ft 7% ft +4 
247 . 59 324 31$ 32$ +4 

24 378 »4 37V M4 -ft 
. 4335 3ft 33 +1 

421 12$ 124 1ft ft 
090 "24 313 2ft 28$ 2ft 
1J2 W 351 13 12V 12V 

oeoi4 a 31$ 31$ a$ +4 
• 5 are 54 4H 5 +A 





ink Ok. E MOs Ik* tn Isa m 

ABSkdox 020 10 10 14$ Ift 1ft 
ACCOop 012171 1075 19$ ift 18% ft 
AOCU01E 2511448 1ft 18$ 10A +ft 
Acme MBs 21 IB 24$ 24 2*4 -4 
AcdOwCp a 65 274 27 27 ft 
Maotadh 184092 1ft 1ft ISA +*d 

ADC Tata a 2025 4ft 42 V 42% +4 

Addton 21 4Za 14 ift 14 +4 

AtaSwv OK) 22 04037$ 3ft 37 ft 

AtataeSp 020 84831 3130^ Si 

Mines C 7 137 10% IQ 10% +4 
AdrUgto 9 IS 4$ 44 ft 
Alta Palm 7 m 5% 5$ 5% 
Adrrdtsb 14 649 017 1ft 18% +4 
Adnoax 020 16 BZ4 3ft 31$ 31$ ft 

Atojmn 12 as 1ft 1ft W$ +4 
AfptoCOBi 0101451782 1ft 13 tft 
AJrExpr 024 18 Z7BU27$ 2ft 27$ +4 
Aka ADR 224 22 IS 81$ BlV 61$ ft 
AUH 088 17 258 2ft 234 Zft 
Ato0h A* 18 40 ft 8$ 8V +4 
Aten Old 05218 T4 40V S 4ft 
Ata PH 5 717 ft ft B -A 
AftfCnfJt 150 13 Z78 " 15 ift 15 +1$ 
Akd Cap x 080 12 SB 1ft 13V Ift +93 
AtaanC 032 B 5 ft ft ft +$ 
Alto Gold Q0B15 730 l8 4)3 US 
AtanCO 38855 3ft 2ft 29$ -$ 
Am Banter rfL7Z 8 25 2ft 33 2ft 
AaCtaBa 15 112 16 15$ 16 +$ 

Ammafl ZZ 1070 »4 2ft 2ft +4 

Am Mad B 13 5S3 0$ 8$ ft +% 
AmSntoMixOE 10 605 5 4$ 4% -$ 

AfllRtHW 40 235 24$ 24 24 -4 
MM OSE 17 1380 28$ 28% 29,% +ft 
AnkdP 2 868 1$ 1A 1$ 

AaNtaX 220 7 89 4ft 4ft 4ft 
taPwiCDm 33T2B38 18$ 17$ 17$ -$ 
AmTmr 13 444 18% 18$ 16$. 

Amgmtae 2013666 63% 51% Sft +1$ 
Amach Cp xOOB 16139 ift W 10$ 

Aoafln 4 70 8$ 8 ft +$ 

Antagle 15 35 10$ 16$ 10$ 
Anapa* os 12 a*4 ift mV ift 
AnangaUa 190 12 ■ 1ft 14$ 14$ 
AndmxCp a 1101 4ft 48$ 48$ -1$ 
AodraaAn a U ift 15$ ift +$ 
Apegaa En 030 31 112 15$ 15 18$ +$ 
APPBta B 401 ft 5% 5% -$ 

Appld UU 32 4370 4ft 47 V 4ft -$ 
ApptaC 048 31 7887 35V 35$ Sft 
Apptobee* QiM 482220 10$ 1ft 1ft ft 
Artxr Dr 024 44 34 ift ift 1 ft 
Aretes 0.10 15 286 20$ a 20$ 
AWHM 1.18 8 334 30$ 2ft 30$ +$ 
Armor A) 094 21 a 21$ 21 21 

Arnold to 040 17 41 2ft 18$ 1ft 
ASK 6W 3 75 13 13 13 

AapacOM a 153 Sft 38$ 38$ -$ 
AasocQnm 280 57 25$ 25 2ft 
AST tend) 98521 14$ 13% 14 

AMario 13 305 10$ 1ft 10$ 
MSEfr 032 IB 903 27% 26$ 2ft -$ 
tatakk 043 24 2164 81$ 93 80$ -1$ 

Antatata 10 45 3 2% 2« -i 

Anx ta a OK a in 7$ 7JJ 7% +$ 


Stock to [ n to la lan 

Mdamps 044 10 11 21 21 21 -V 

Dad Com 3447* 33% a 33$ ft 

Dakaosn 018 18 53 1ft 15 15 

Dram 030 E 388 37$ 36V 38% -$ 
Dap Op x 1.12 0 245 3ft 31$ 32$ +1$ 

Devon CD 5 1» ft ft 9% ft 

DHTacft 17 1ZUZZ$ 21$ 21$ ft 

SMB 090 24 371 17$ 1ft 17 ft 

DiOl loti 13 550 M% M$ 14$ 

ntlfcn B 4© 15$ 14% 15 ft 

Mg Smart 401384 1% 1% 1% 

note* asm o7$ 7 7$ 

OtomCp 17 41 35% 34% 35$ +$ 
DUsYm 0£0 47 127 8$ 8$ 8$ ft 
DNAPM 123S 3 di% 2% -i 

Deter Bn azoataazft a 25% +$ 
DodiHB 098 15 40 13$ 12$ 13$ +$ 
DncnEnu 0 100 ft ft ft 
Onnflan 11 385 10% 10$ 10& -A 
ttoarGD 0» XI 190 25$ 25$ Zft ft 
DnoEnfwOOBa 508 ft -ft ft 
BSBnxr UB 16 215 2B$ 28$ 2ft -IV 
Outas ac 13 1810 17$ 17 17$ ft 

DujtFM on 24 8033% 32$ 37$ 

Dptaedi 7 19 21$ 21% 21$ ft 


- E - 

2 136 3$ 3 3$ ft 

21013 4$ 3% 4 +$ 

2 10 Id 1A Id 

032 23 6837 18$ 17$ 17% ft 
225 769 7 8$ BV ft 

1 873 2A 1U 111 ft 
M 1871 1ft 14$ 14$ +$ 

OS 50 310 50$ 40$ 50$ +% 
2111232 1ft 17$ 13 ft 

17 37 6$ (5% 5% ft 
BH *0$ 9ft 
54 7 15$ 15$ 1ft 

70 5 2$ 2$ 2$ +$ 

2 444 2% 2% 2% ft 
01017 20 4$ 4$ ft +$ 
048148 5951 54$ 53% 53ft +A 

7 0 0 0 

a ie 12V 12$ 12$ ft 
a 1421 10$ 18$ 1 BA ft 
S M 7V 7$ 7$ +$ 
15 287 21$ 20$ 20% ft 
aioa 87 21% 21$ 21% +% 
20 <76 13 12$ 12% 


ft Ms 

tort (to. E ttto to toa lot m 

- K - 

KS+na 096 12 13 22% 22 3$ 

Ksmanpp 044 5 701 10 ft 10 ft 

teteya 3 215 ft ft ft -$ 

Kd|Sr 072 9 310 31 30 3ft +% 

Ktatwv ail 11 MOO 8$ ft 6$ 

Ktetal 094 14 100 25$ 24$ K -$ 

, Nnctear 2i MOO KS 10 10 

! KLAIHr 64 3081 48$ 4ft 48% ft 

ftxxtfadge 2 1337 3% 3$ 3f) -A 

KKA 011BB A $ $ -A 

Konagtoc 211 480 23$ 22$ 23% +$ 

KUdefeaS 9 42* 15$ 14% 15 ft 


- L- 

lAfaow us a a 10V ift 10$ -$ 

laddFimtOlZ 39 278 7$ 8$ 8$ +$ 
Ism tech 435627 38$ 36$ 38$ +1% 
Imcanrx 048 15 871 35$ 34% 34$ *1$ 
lanes Ox: 096 U 54 18 18$ 16$ 

tntadi pb 30 81 ZS 1 ^ 22% rji| ft 

Hoopoes 12 a ft 8$ 9$ 

LMdracpe » 1385 4$ 3% 4$ +% 
lances IB 046 18$ 10 ift ft 

buna ft 048 18 16 3S$ 24% 25 -$ 

ISOS 324 4335 23$ 22% 22% -$ 

uxcp aia 2 moo ft ft ft 

Lacnaa 20 SZBdlft ift 15% +% 

LegaiSCp 14 3965 23$ 23$ 23$ ft 

U* Tack x 0L2D 16 8 18$ 18$ 18$ +20 

Utoto* 21 p 4$ 4$ 4$ -$ 

LJ4MAX 028 12 168 13$ 12$ 13 

Unte TQB10T0138V 135135% -% 

UnodnT 052 15 530 16 15$ 15$ -$ 
LtodnyMt 12 117 3 28$ 20+% 
UnarTec 024 35 4181 44 «% 43lj -$ 

LtaoSox 040 18 28 35^2 34$ 35$ ft 

Laewen Bp 006 271937 24 23$ 23$ -% 

LaneStar 8 715 8$ 8$ BA -A 

LeknO 34 8144 43$ 42 42% U 

LTXCp 3 510 4$ 3% 4$ +$ 

IMH 078 4 10 K$ 32% 32% +$ 


ten w, e Hk to in ia m 

Pjn»i 52007 7$ 7$ 7ft -A 
OuddnLeg 12 M 7% 7$ 7,*. -A 
QnakarChm 097 71 4883 18 17$ 17$ +% 

Qua Food 020 17 877 23V 22$ 23$ +1 A 

flnrtan 725231 1ft 1S% 15% +A 

Udah 231082 18 1ft 15% 

aw Uc a 3859 45 44$ 44$ ft 


- R - 

RMXM 11 510 1] 11% 12$ -% 

Rto 3117S 4% 4$ 4$ ft 

testoraps 1 484 4 3$ 4 

Rxyraond 27 501 20% 20$ 20$ 

Recoton 14 470 IB 15$ 15$ -$ 

HdUtaA IS 287 18$ 15$ 18$ +1$ 

Rspdgsn 1 151 3 2% 2% -$ 

tepwnta i 271 3% 9A 3i +A 

DtodM 19 302 11% 10% 11% +% 
tart 048 161211 46% 45$ 45$ ft 
Bran toe B 35 5 44$ 4% ft 

Martel 080 10 87 35 34$ 34$ 

RoedwS 1.40 20 2531 61 80$ 60$ ■$ 

MMgU 012 12 85 6 5$ 6 

feeftSA 098 4 880 18% 18 IB, 1 , -A 

taosem DM 3Z742 15% 15$ 16$ 
flan Skx 020 122171 ift 15% IB 
naUCHtod 28 219 23$ 22$ 22% 

Rom an m 778 19% ia 10% ft 

RPM he. 052 20 473 18% 17% IB 

RSr« 09014 »(C4% 24$ 24$ 

Ryan ftaly 12 048 8% B% 6% 


llOCta 005 2121183 23% 23$ 23% +A 
kSCart 21 153 25 ?4$ Z4$ -$ 

MMTM 060 44 3 14% 14$ 14% -$ 

■todsonGE 198 M IE 34$ 33% 33% ft 

MaomaPW 12 330 2ftd27$ 27$ -$ 

ItognQd 076 131031 20% 20% 20% ft 


■ B - 

BE1 B OOB a 12 5$ 5% 5$ ft 
DiWtoi 0 47 12 11$ 11$ ft 
Baksrtiltt 30 HA A A 

Bater J 00013 258 21 20$ 20$ ft 

BbtenLB 024 3 68 15$ 15$ 15$ ft 
Bondnc 18 807 26 25$ 25$ ft 

BnkSoidbx 052 11 2913 10% 10$ 1B$ 
BddtaaCp 040 0 107 1514% 15 ft 

Badnim 080 14 344 25 24 24 -1$ 

Bate Con 050 15 374 33% » 35$ ft 

BesaetF 080 16 21 28% 2B$ 25% +A 

Barm am is e 24$ 23$ 24$ 

Ba bKfts 180 13 6GB 58 58$ 5B$ 

BSKTRn 1.18 9 347 20% 29$ 29% ft 

BEAera 20 887 9 8$ 8$ ft 

BMOOQb 042 32 81 15$ 14$ 14$ ft 

BenJJeny 14 78 IS 14$ 14$ -$ 

BeddarWR . 044 132073 37 98$ 38% ft 

BHA&P 01219 IT 10$ 10$ 10$ ft 

Bdkn 901071 «$ 4$ 4$ ft 

BgBx aw 18 589 12% 11$ 11$ 

BMqrW OOB 16 915 14$ 13$ M ft 

Bhon ' 1 ' ^ 582840 53$ 52$ 52% ft 

BtaW 185062 11 10% 10% ft 

BkxkDig 1JM11 a 31$ 30% 31 

BHCSflQw 144332 44 43$ 43% ft i 

tenoms UB 101190 33% 33$ 33A +A 1 

U> Em 02918 288 21 20% 20$ 

Boole 4 B 14 2 28$ 28$ 28$ 

Botond 143858 12% 12 12A ft 

BodonBk 078 B 110 .38$ 38 » +1 , 
Boston Tc 551266 12% 12$ 12$ ft 

BratyWA 096 IB 47 48 47$ 48 +1 

Banco 024 30 255 13% 12% 13% +$ 

BnaoS 020 1812791 0$ 8$ 8% ft 

BSSBtap 078 9 04 29 28 20 +$ 

BTBMpflB 048 4 3 2$ 2$ 2$ ft 

BOBU* 281997 18% 17$ 17$ ft 

BotMT » 830 12% 12% 12$ ft 

Bm-Bnim 35 1BiaiO$ 9% 10$ +A 

Brataenfl 63 10 33$ 33$ 33$ -$ 

BUtadUg 7 33 M 20$ 29$ ft 


- c - 

CTec 240 72 » 23 24 +$ 

Cabot Med 6 542 5% 5% 5% ft 
CadSdMpe 137 18 58 29% 9% 28% +$ 
tak w H Cw nO a 21 284 17$ 16$ 17$ 
Qamcp 400 651 8% 8 8 ft 

Cagane 225 5 7818 0% 8% 9% ft 
CUMCTO 23 4B0 25 24$ 24$ ft 

CmOBto 1 1035 1% 1$ Id 
CwxML 2 32 4 3% 3% 

Cndta 3 359 2$ 1% 13 ft 

Com Inc osaiB ie a% bb$ bb$ -i 
C anada 3 134 5% 5$ 5$ 

CarikuCra 053 22 » 27% 27% 27% ft 
Cascade 090 23 47 25 24 24% ft 

CoarS 085 151511 11 10% 10B ft 

CMgana S IE 7% 7% 7% ft 

OatCp 19 7011% 11$ 11% 
Conor 71B19 14% 13% MA +A 
CM Rdx 1.12 12 390 32% 32 32$ +1% 

emspr 21 45 11 10$ 10$ 

Cnodtor 0 18 4% 4% 4% 

CtwptorT 090 .8 881 23$ 23 23 -$ 
ConaSh . 090 122017 9$ 8% 8% ft 
CkemM 18 HOD 12$ 12$ 12$ 
Champowar - lazlOO 8% 3% 3% 

Q taste 8 222 4$ 3% 4$ ft 
CftonCp B4 4004 67$ 66% 68$ ft 
Cknteix 128 12 272 54$ 53$ 54$ +1fi 
CUasCp 017 31 300 32$ 32$ 32% ft 
CbnWgc 312071 32$ 29% 30-1$ 

OS Tedl 1281362 ZA 2$ 2d +$ 

Onto 1315387 25$ 24% Zft ft 


-Gam the edge over your competitors byhavtogihe fmandal : ^meacleflvere<J to your home OF-olflce eweiy wooing day. . 
Hand dellveiy services are avafiable for stfbsafliere m fte Grrafe^Brussefo area, the QBEBrAntweip.weai Bnigge, Gait. 
Halle.'Kbftfi^.ijaivwi, il^/Hedwten, Nlveltea and Wavre. 

. Ptease call(02r51^ 281fi foe more information. .... 

Financial Times. Europe's Business Newspaper. 


- D - 

DSC Do . warn 28$ 27$ 28% ft 
DtotGnn 013 29 9 e$ 84 85 -3 

OtaSwUi 11 14 2% 2% 2% 

Dahta 30 118 7$ .7 7$+$ 

DHOCapa IS. 257 16$ 15 15$ ft 

OnqMiBp 002 122B27 29$ 25$ 26 ft 
0*0 Steps 020 20 6 8$ B$ 8$ ft 

Detail En 032 24 187 19 15$ 15% 

Octal) Be 090 45 28 30$ 30 30$ 


- F - 

Map 10 129 4$ d4$ 4% 

for Cp 024 36 37 7% 6% 8% ft 

teatanU 004 83 387 41$ 40 40$ ft 

fflPM 179320 29$ 27$ 29$ +1% 
nUTM 134 15 597 32 51$ 52 

HfyOff 14 1 004 5$ 4% 4% ft 

RogfeA 034 0 519 0$ 0$ 0$ 

Hanoi 33 1082 24$ 23$ 23$ ft 

FMAm 094 B 258 34$ 34 34$ ft 

MBoObto 190 11 435 29$ 24% 29 ft 

Mhflk 060 20 Sn 23% 23$ 23$ ft 

tet Stay 194 121046 32 31$ Eft 

tetTnax 19911 2372 47$ 49$ 47+1d 

FttWBUn 039 7 44 0% 0$ 9% ft 

FtttodMc OSB 71381 24% 24$ 24% ft 

Rntthr 194 8 E 34 33$ 34 

Fkstntos 40 34 8$ 8 8$ ft 

Rrara 27 4058 21$ 21$ 21$ ft 

tewM 18 184 6$ B% B% 

FoodLA 008 181780 8 5$ 5% ft 

FaodLB 0908001483 6$ 6 8 

tenmaat 198 IQ 13 32$ 11$ 32$ ft 

Rndnar 11 316 12 11$ 11$ ft 

FostarA S ITS 3% d2% 3& +A 

Ml tel IM E 1B4 30$ 20$ 30$ +% 

Fttteix 040 8 228 18$ 10$ 16$ 
tel tool 1.18 11 109 20 29$ 28& ft 
MOTH* 058 201804 33031$ 31% -1% 

Mantel 098 11 141 21$ 20$ 21$ ft 

Futti 034 22 8 17$ 17$ 17$ ft 

MaadADR IB 79 3% 3 3 ft 


- G- 

GOApp 8 507 3% 3% 3$ ft 
BSXSanr 007 24 50 16$ 15$ 1B$ ft 
Goto D M2 2% 2% 2A -A 

Garastlto 9 14 3$ d3$ 3$ -$ 
Gate Co 018153 8 0% 9% 6% ft 

GanlHod 040 20 47 20$ 10$ 10$ 
Gnrtyto 20 335 5$ 5% 5$ .+% 

Ganum 34150 10 B% 0% ft 

amnCp 490 41 517 24$ 24 24$ ft 

Genuine 154 514 4% 4% 4% 
0HQIH 84 903 35$ 35 35 
Gdrana 040 201118 15$ 14% 15$ +% 
GUtagaLx 0.12 151800 20 19 20 ft 

GtatA QM 15 150 14% 14 M ft 
BHiBtaa 11 296 5$ 5d BA -A 
60ad 6(8* 15 545 12$ 11$ 12 ft 

aatotap 090 10 819 22$ 22$ 22% ft 
aariato 297 76 3$ 2% 2% -A 

6ra*e 020 70 121 21$ 21 21 

BnnAP 02411 35 18 17$ 18 
tetaRi 0 909 & A A +A 

Grawnani 0 174 2% 2% 2% ft 
BMMMr 828 94 13 12$ 12$ ft 

611 CBp 9 9 13 12$ 12$ -$ 

GbNYStg 51453 10 0% 0% ft 


HanBpgA 59 7 8$ 8$ "6$ 

Harieqndx 068 B Z100 24$ 24$ 24$ +1 
KwpsrGp 020 13 384 14% 14$ 14$ ft 
HBOS Co 016 272594 34$ 32$ 32$ -1$ 
HBUtear ZB20I7 29 28% 28% ft 
Heuttim 008 21 S 1Z% t2$ 12% ft 
HMbftn 11 2807 8 7$ 7% +A 

HMdtapr 018 Z5 2125 15$ 15 ISA A 

Hahtal 215 11$ 11 11% ft 

Hahnftur 8 922 15% 14% M$ ft 
fort* 072 14 145 21$ 20% 21$ 
HognM 015 22 272 7$ 7$ 7% -A 
Magic 73 627 17 18$ 18$ -% 

Han* BO* 080 8 89 21 20$ 21 ft 

Hcnktal 044 17 96 25% 25 25 ft 

NomttaCk 132772 12% 11% Ug ft 
Konehths 044437 13 4% 4% 4% 
HuatJB 02D 17 416 17$ 17 17$ ft 
HnattaglR x 080 8 1251 20$ 20 20$ +98 

taco Co OOB 1 X100 2% 2% 2% ft 
HUfehTecb 17B 438 E$ 31$ E% ft 
HyeorBo 17 88 4$ 4$ 4$ ft 


tote 12 K 8% 7% 7% ft 

UtotsaCp 231210 10% 9$ 10$ ft 
Marina Dr 12 202 5 ft 4% ft 

Marini Cp 9 55 42$ 41$ 41$ -$ 

Mwtoaat 2 20 1$ 1$ 1$ 

Itontta 10 12 0% 8% 0% -ft 

mbScekAOM 11 e 11$ 11% 11% 

Manual 090 11 411 20% 20$ 20% 

Mane 0 319 0% 7% 8% ft 

MarimM 47 808 E 61 61$ 

ktoaorCp 0 890 5 4$ 4% ft 

Mc&tohR 044 12 48 15% 15$ 15% ft 

McOumfc 048 152112 19$ Ift ift ft 
MotoC - Iffl 9944 53% 52$ 5Z% ft 
Msdextac 01618 54 14$ ift 13% -% 
toms 048 14 584 2ft 34 24$ ft 

Melamine 024 21 237 10 8$ 10 +$ 

Mentor Cp 018 53 481 17 16 19% ft 

Mantrti 024 231890 10% 9% 10% +% 

MutanLB 099 12 320lC2$ 22% 22$ +% 

Memory 6x070 7 394 28$ 27$ 27$ 
total UB 121460 31$ 31$ 31$ +d 
Meriial 91248 ft 8% ft ft 

MWadeA 01219 3291 Ulft ift 18$ -$ 
IRDd 361817 34$ 33$ 34% 4$ 
KCMF 020 201811 12$ 12 12$ 4A 
Mch HUB Z00352 332 78 77$ 77$ -$ 

MtaoMto 8 94 3$ dft 2% ft 

Mooaoa 103895 14 12$ 13% 4% 

Mcrooom 8 514 7% 7% 7$ ft 

Mcrgrtx 10 81 6% 5$ 5$ ft 

Mcrpdh 21597 9% 6% 8$ ft 
kfcsft 182588 57% 55% 58% ft 
MMMM 233516 27% 2ft 26% +% 
MktaoOe 052 11 27G2 29 28% 28% 

MhMfcaai 050 34 2S 30$ 29$ Zft ft 
Wtorll x 052 17 191 24$ 24 24 JO 4.18 
Mtan 401 24$ 23% 24$ 4$ 

totedi 21 673 18$ 15$ 16$ +$ 
McUtoTU 5411® 21$ 21% 21$ 4% 
Modem CO 020 18 19 7$ 7% 7% 
Uodnt Ml OE 20 93 29$ 27$ 27$ ft 
MotaE DIM 4251139$ 39 89$ ft 
kUaxtac DIM S 718 o43 42$ 42$ ft 

Hamm 004 14 297 7$ 7 7$-$ 

Mndkae P 030 23 138 32$ 31$ E +A 

MrCMee IB 167 15A 16$ 15% 

MIS Sys x 0® 9 ® 2ft 22$ 23$ 

MBcaari 14 609 32$ 31% 31% 4% 

town 4 2® 10$ 10 ID -$ 


. - N- 

NACRa 018 111718 26 2ft 25$ ft 
NenFricii 072 IT 17 17$ 17 17 -$ 
MQomptxOJBIIO 629 13$ 12$ 13$ +A 
Mifiw 02019 4 13 13 13 

Htagtex- 8001165 17$ 17A 17$ +ft 
ICC 041104 91 90% 80$ 60% 4% 
Ihtar 18 2212 30 29 29$ 

MbMc Een a 577 20 19$ 19$ -$ 

Motetfi 123 423 8% ft 9% ft 
Nemoao 7 129 ft 4% 4% 

Mign 027 36 158 S5}, 3535.02 
NbwEBh 090 20 415 19 17$ 1B% -% 

Mew Image 1® 733 15% 14$ 15% 4% 
MxdgtMet S3 8325 E 31% 31% 
NomxtCp 004 17 47 l)7$ ft 6% ft 

Motto Dri 2025® 6% 6% ft -A 

Mortmx 059 27 1® M Sft « 4$ 
tkWnn 040 29 44M 4ft 4ft 45$ ft 
Hontanl 14 141 IS 18$ 19 

N Stalk 4 51 5% 5$ 5$ ft 
MritaTUx an 12 148 38$ 37$ 38$ 

MM Mr 183W ift 17$ 17% -1$ 

Nona 7S410834 16 15$ ift -A 

Nantes 403662 4ft 44% 44$ 

NPCA 35 ft ft 8% +% 

NSC Cap 7 2 2% 2% 2% 


Stfaco 1® 8 12® 55$ 54% 54$ -1$ 
Sandman 030 14 1M 10$ 11$ ift 

SUtmb*A 030 20 958 28 27$ 27$ ft 

SdtoL 101325 30$ 38$ 38 -$ 

SOSfrtn 18 4272 20 19% 19% 

Sdns 71318 I 7$ 7$ -% 

SctnCp QE 103211 21$ 2121% +% 

ScoraBrd 9 802 4$ 4 4 

SeMMd 120 44 28 37$ 3ft Sft 
S-B*to 11 50® 24$ 24,% 24$ ft 

SB cp ai8 28 57 22$ 21$ 22$ +% 
terns 036 « 337 211 ft 211 +% 
Satectku 112 18 810 77 Zft 28% +% 

Severn S3 10® 17% 17% 17A -A 

Sequoia E 757 5A 4% 4% 

SwvTedi 14 a 0$ 0$ 0$ +$ 

Sarvfrad 17 W 4,1 4% 4A +A 

Stamen 022 IB 2 17$ 17$ 17$ -$ 

SbrMeri OM 10 2476 28$ 25$ 28 +% 

SH-Sjetm 2 8® 5A 4U 5A -A 

Shorawood 38 1022022$ 21$ S 

Startup 7 504 8$ 7$ 7% ft 

Sena On 18 237 a$ 21$ 22% +% 

SurmTuc 3 12 3 dS 3 

SIB1« 033 15 4345 34$ 34$ Sft +% 

SomaOM 20 374 7% 7$ 7% 

StanNBC 008 E 52 13 12$ 12$ 

StoWp 30 511 12% 12% 12% 

Skrpeoo two 14 83 1i$ 11$ 11$ 

SMMd 38 309 29 Zft 28$ -$ 

SoapphBv 3843® 13$ 13$ 1ft +% 

Sntnraraf 1 730 4$ 4$ 4$ ft 

Sunoco OSB 16 *38 22$ 22 22$ ft 

SonOrtU 0381011® 20% 20% 20A -A 

SptagelA 020 E 4974 16 15% 15$ -1$ 

StJudaMd 040 1417971)36$ 34$ 34$ -1$ 
StPauBc 030 10 891 21 2ft 20$ 

StoW 1 77 2% 13 1H -A 

Staptol 46 7589 21$ 29$ 30 

SHs Str a® 183030 30% 39% aft ft 
SUHoo 141038 20$ 10$ 20% +$ 
SUfogh a® 14 121 21$ 20$ 20$ 

Steel Tec OM 21 IBS 20 10$ 19$ 
EUdfUSA 02D 41 327 11$ 11% 11% ft 
SUM 1® 74 20$ 10$ 10$ -1 

Strawtua 1.10 14 210 2ft 22$ 23% ft 
Snaffly 151572 7% 7% 7% ft 
Stiylar 029 28 1878 35$ 35$ 35$ 
Stand) 21 1® 15 14 14 ft 
fiWiJomoB an 18 IS 24 23% 2ft 
Sum* Be 084 13 324 21% 21$ 21 A +A 
EUrankTt 34 810 33$ E E$ +$ 
Sun Sport 10 Z7 4% 4$ *$ 
SunMc 1412951 27% 28$ 29)1 -A 
Swift Tra 41 84 40$ »$ 40$ -ft 
^tesetac 5514011 40$ 47 48 -1$ 
Sjmratec 36 9t4 13% 13 13% ft 
Sunday 040 19 n 18% 18$ 18$ ft 
Synnom 83 82 4$ 4A 4A -A 


SuranRTe 34 910 33$ E E$ ft 

Sun Sport 10 Z7 4% 4$ 4$ 

SuMc 1412951 27% 2B$ 29)1 -A 

Swift Tra 41 M40$»$40$ -ft 

^braelnc 5514011 40$ 47 40 -1$ 

Syaratec 36 9!4 13% 13 13% ft 

Symlay 040 19 ® 18% 18$ 18$ -% 

Synatom 83 E 4$ 4d 4A -A 

Sjwrgen 130® 5% 5 5A 

$m8c « IK 1ft 15$ 15$ 
SjWrtfce 141319 15% 15% 15% ft 
SpranSDIt 012191150 14$ 13$ 14$ ft 
Sytamfea 27 465 17 19$ 16ft -A 

sytaranf 391207 ®$ 8 8$ ft 


- T - 

T-CedSc 5 BO 3$ 3$ 3$ -A 

TjcwePr 062 20 74 E$ E$ 32$ ft 

TBCCp 13338* 10% 0$ ft ft 

TCACUto 044 26 841 24$ 24% 24% ft 

TOChOrtta 12 523 10 18% 18$ ft 

TemaabxQn 12 3 48 47$ 48+U0 

Teketac 3 7 ft 8% 8% ft 

TtaoSyi 8 392 12$ 11% 11% ft 
TrtDaA 187178® S$ 21% 21$ ft 
TtaK 7 534 5% 5 5 

Tetete 29 2979 42$ 40$ 40% -1 

TfehmCp 001 H 134 IS 14$ 14$ ft 
TrtnTao 79 11 9$ 9% 9$ 
TtauPbADR 028 ® 917 28$ 28$ 28$ ft 
Time Com 7012)43 33$ 31% 32$ -IA 
TJH 022 28 215 10$ 19$ 19 ft 
Team to 410® ft 5% ft 

TUtyfl Mar 034 35 « 59$ 59$ 50$ -1 

Ton Brow BS 997 12% 12$ 12% ft 
Topp»Co 028343 974 7 9% 8% ft 

TP1 Enter 3 BE 7% ft ft ft 

Ttawrtd 11 1U 11% lid 11% ft 
TranwWt* 1J» 11 112 39$ 38% »$ ft 
Titan 21 174 2% 2% 2% 

Trtsrtrie 7S18»u14% 13% 14% +$ 

DlhfcottCxl.lO 11 70 21$ 20$ 21$ 

Tseng Lrti 020 12 3M 7% 7 7A -A 

TfdFU (UB1® IBS 24$ 24$ 24% ft 


QzMiegxIJB T7 19 30$ 20% 30$ ft 
Chen tar 20 Bl 6$ 5% 5% ft 

tab Dr - 42 65 12$ 12$ 12% 
CHuatm 9 in 4% 4$ 4ft -A 

OocaOohB 1JX) 18 7 20 28$ 29 

Coda BW 1® 496 6$ 9$ 6$ ft] 

GudaAhnn 30 35 11% 11% 11% -ft 
CBgnuCp 31 1® 20$ 1ft 19$ ft 
Cagnu in 60 12A 12 12 -A 

Cobamt • 18 1® 13V 13 13 ft 

Cotegeo 040 ® 494 22$ 21$ 21$ ft 
CM Bn UB 14 E 22 21$ 22 ft 

CUH&D an 11 29 30 30 30 

Cam* 024 19 631 Z7 28$ 26% ft 

Cneartx flflB 191902 16$ 16 16A -A 
CracetfBpxO® 418M7 16% 15%.18A ft 
Ooratartwril® 12 98S u33 32% 33 
- Coma 070 94 B* 1ft U 18 -$ 

caanac 182888 -2ft 23% 2ft ft 

Oeeoprirti 3® 13® 11$ 11$ 11$ ft 
Craufaara 87 329 12$ 12 12% ft 
Iktoscm » 301 3* 3* 3fi +* 
-COfHp US 33 8 48% 48% 48% 

.Capaatei 4 £28 5$ 5% 5% ft 

4taMM n 2254 23$ 23% 23$ ft 

CpHhto 11 138 7$ 7% 7% 

Ctert 050 21 279 2D 18$ 19% 
CteJtoh 33 370 4)2 4$ 4% ft 
"COdhCp 223280 51$ SO 51 ft 

..tap Of A . « 274 17 18$ 1ft ft 

,Cock*Bx OE 282608 24$ 24 24 ft 

OagCsop 11471 1% 1$ iA +A 

-CnraiRn 31 in 5 4$ sft 

Qisgn 2 814 3$ 3% 3$ -A 


nsgu « n 7$ dft 8% ft 
DOCatam* 298641 9$ 9% 9% ft 

■Start 43055 4$ 3% 4% ft 

kuracor . E 2S1 5$ Sft 

Ira i M iogtii 2 233 5% 4% 4% ft 

Impart Be 040 32 1® 17% 17 17 

M hi 021102 7 13%d13$ 13$ 

HRto 18 190 13$ 1ft 13$ ft 

Worn* 2511427 22$ 21$ 21% ft 

tagtaNM OBB IB 43 12 11% 12 ft 

ktegrDn 277042 22% 22 22$ ft 

htgk&ya E 8* 13$ 13 13$ 
tdgMht 6 245 2$ 2% 2A +A 
kttrt 024 1233683 ® 83$ 94$ -1$ 

in* 7 17S 2$ 2 2 

WgalB OttiSZDM 18% 18$ 1ft ft 
hhrTh IS E 8$ 8 ft 

InhribaA 024 17 846 13% 13 13$ ft 

non 3 788 9$ S% 9% ft 

krtariud 41204 4$ 4% 4% ft 

htanha 6 287 12$ 12$ 12$ ft 

Manic 21 3021 12$ 11$ 12 +A 

HOakyQA 14 39 17% 17 T7 

tatta 002 17 219 2S d2% 2% 

R Total 275 10 5$ ft ft 

kwon a® 20 84 81$ 30$ 30$ -% 

Mage Cp 2 7S3 t)3$ 3 3% 

taomh&C IB 138 18$ 17$ 17$ ft 

XMfetedD in 38 7207$207$207$ 


- 4 - 

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■ton He 03613 J 0$ 9$ 8% 
X6W own 348u40$ 39 38% -1 
JdamonW n IS 24$ 24$ 24$ 

Janet H 10 10 14$ 14$ 14$ 

Jan to XO10 121318 8$ 7% 7% -A 
JnfynCp UO 13 208 30 20$ 29$ ft 

JSBtel an 17 n 27 28$ 27 

Jana Llgx 028 18 390- 18$ 18$ 1ft ft 

Jratta 018 9 239 12$ 11$ 12 ft 


- O- 

OCtato 21 427 13$ 12$ 13% -% 

Octal Cam 17 353 23$ 22$ 22$ ft 

OMnlg 15 540 14$ 14% 14% ft 

OgtaegrNrtin 10 ® 30)2 SB 30$ 

ObiaCt 148 9 531 31$ 31 31$ +$ 

Old Kart 1.18 10 53 34$ 34 34 ft 

DWMaflB 092 18 00 37$ 38$ 38$ ft 

Oebancmp in 7 214 30$ 2ft 29$ ft 

onePriw n 248 15 m u% -% 

OpOort R 21 74 22% Zft 22$ +% 

OractaS 0110135 42% 41$ 42 ft 

MSm 44 490 17$ 17$ 17$ 

Orixtodi 099 28 21 10$ 9% 9% ft 

ORkdGKpp 7 407 10$ d9$ 10$ ft 

Oragatart 031 9 ZS2 5% 5% 8% ft 

ORfup 20 221 3$ 3$ 3$ +% 

OMASA 041381 278 18% 15 15$ -% 

OehtoshT 050 10 92 10$ 10$ 10% ft 

OttatTal 1 32 14 20 33 E$ M$ . ft 


-P-Q- 

teecar inis 7<7 49$ « 49$ 
Pmftirtop 058 11 IE 12%tf11% 11% ft 
PTrtcn IE 15 6 23$ 23 23$ 

PotaCra 301817 a75 72$ TStl+lA 

nmmrc 30+053 27$ 25A 26)1 -A 

nqxrtwx 024 41 357 34 E$ 33 ft 

FaycoAm 22 220 9$ ft 9 
hmto UQ 55 807)113$ 11$ 12% +1% 
RanTny 9 21 15% 15$ 15% ft 

PmVkg in 23 6 S3 33 33 

PH*r 072 1B11Eb42$ 41$ 42% +% 
Prated) I 13 583 5% 8% 5% ft 

PanwastL 020 27 72 24% 24% 24% -1% 

PeoptecH 032 M 660 14 13% 14 +% 

tebtaa 1.12 18 18 30% 29$ 29$ ft 

Ftanmcy 3 * 96 11$ n$ 11% ft 

nmanxrdi 26 154 s% 6% s% 

PtawMx 048 3 2 9% 9% 9% 

PUudr 384013 17$ 18$ 17$ +$ 
PUorten 41 302 19$ 16$ 18$ 
PteDWGp 0* 33 460 *9 48 *8$+$ 
texwrti DM 21 3436 30$ 30 »$ +$ 

PtawSt 012 9 221 17 1ft ift 

PooceM 5 57 B% 8 8 

MM 15 2 5% 5% S% 

Praallfc 009 3 419 6$ 6$ 8$ +$ 

rnsto t77 63841*8$ 45$ M +3J3 

PDCDd 238588 15$ 15$ 15% +A 
Pita Pet 40 430 5% 5 5$ ft 

PlXWOrt E 898 19$ 18$ 19 +2% 

PmdOpa 024a 21 26$ 25$ 25% +% 

PcmnB otz 9 sn i8$ ie$ ift ft 


- u - 

US HUkt 084 155015 44$ 43$ 43$ ft 
IHta 21001 5$ 5 5$+% 

UCteue* in 14 25 17 18$ 18$ ft 

U6T* 200 12 17 52$ E% 52$ +$ 

lutedst an b in 9% 9% 9% +% 

UMog 012 20 2 2ft 29$ 2ft 

UBtah in 26 1® 48$ 47$ 48% ft 

USBarapx in 102113 27 29% 29% ft 

US Energy 25 50 4 d3$ 3$ ft 

USTOnra 112 I 81 12$ 12$ 12$ ft 

IftahIM 15 371 9$ 9 9$ +% 

IMTatev 11 19 51$ 91$ 51$ -1 

UB* 11 28 3% 3% 3% 


- V - 

030 35 7 18$ 15$ 15$ 

104 220 27$ Z7 27$ +$ 
23 918 21 20$ 21 

37 522 2S 24$ 24$ +$ 
10 78 18$ 15% 18$ 

23 2509 18$ IB 16$ -ft 
2912874 12$ 11$ 12 ft 

017 3 93 10$ 18% 19% ft 


- w - 

Warner Eft 01019 152 25$ 24$ 25$ +$ 
Vterntedi 93 380 5 4$ 5 +A 

WahkkrtSS 072 7 375 21% 21% 21% 
WUftFWSL 084 0 719 21% 21% 21% 
IMKhdidAxaE B 38 23$ 23 Eft 

«hUtedPMA2415 141 25$ 2S 25 -E 
MMO 240 IB 93 42$ 41$ 41$ 
Watak 5 417 3$ 3 3 -A 

tMHtOnt 072 12 313 31% 31A 31% 
top® 10 405 13$ 12% 13 

topSM 1 1216 13% 13% 13H +A 
MdStaA 10 14 3% 3$ 3$ ft 
Wmtte on 24 984 51 48$ 40% ft 
WtuSanoilB 07 803 43$ 42$ 42% ft 
toafaanL Q2fl 14 10 10% 15$ 18% ft 
wane* 04028 013 21$ 20$ 21 -A 
WPP Croup 003 23 144 3& Sft 3D 
WyiMn-&fcO40 1 1U 8$ 8$ 8$ ft 


-x-y-z- 

Ub SI 2881 «$ 48 48% -% 

ten tap . 2 814 3% 2% 2% ft 
V. 

YMRrah niPPSf 4% 4% 4% 
ZtaaUhb 1.12 9 49 40$ 40 40$ ft 


WORLD STOCK MARKETS 


FINANCIAL TIMES 


Tuesday September 13 1994, 


AMERICA 


EUROPE 


Dow turns its Rise in UK base rates unsettles the Continent 


attention to 
takeover news 


Wall Street 


Most US stocks posted modest 
losses yesterday morning in a 
session highlighted by take- 
over news in the food, insur- 
ance and health care sectors, 
writes Frank McGurty in New 
York. 

By l pm, the Dow Jones 
Industrial Average was 3.03 
lower at 3,871,78, while the 
more broadly based Standard & 
Poor’s 500 was down 1.01 at 
487.17. In the secondary mar- 
kets, the American SB compos- 
ite eased 0.11 to 454.430 and the 
Nasdaq composite declined 2.45 

to 761.28. 

For the most part, it was a 
day of waiting on Wall Street. 
Many investors were quietly 
adjusting their positions ahead 
of the release this morning of 
the August consumer price 
index. As a result volume was 
light, with only iSBm shares 
traded on the Big Board by 
early afternoon. 

Before the August PPI was 
revealed, analysts were fore- 
casting a 0.4 per cent increase 
in the CPI. But if the data 
came in. higher, as some 
observers feared yesterday, 
stocks could tumble again 
along with bond prices. 

In the meantime, equity 
investors were taking their cue 
from the Treasury market, 
where an uneasy calm pre- 
vailed. The Dow industrials 
were hurt by a Sl'/i decline in 
Caterpillar’s share price to 
$54%. The company, which 
relies heavily on export mar- 
kets, appeared vulnerable after 
reports suggesting that Con- 
gress might not ratify the Gatt 
world trade agreement this 
year. 

Elsewhere, blue chips lan- 
guished in sluggish activity - 
Exxon slipped $% to $59 and 
DuPont receded $% to $58%. 

However, the overall lacklus- 
tre tone was broken by trading 


related to a fresh batch of take- 
overs and another wave of 
speculation on deals in the 
works. 

The day's most significant 
development was the 
announcement that Kohlberg 
Kravis Roberts would offer 
KJR Nabisco stock for all of 
Borden's common shares, in a 
deal valued at $£bn. Borden's 
stock, which had been hover- 
ing near its 52-week low, 
jumped $2% to $13%, while RJK 
retreated $% to $6%. 

In health care, GenCare 
Health Systems climbed $8% to 
$46 after agreeing to be 
acquired by United Healthcare 
for $520m in cash. United was 
marked down $% to $53%. 

By contrast, investors were 
cool to the news that two life 
insurers were merging. 
USLICO dropped $1 to $20% 
and NWNL lost Sl'/i to $80 after 
announcing plans to unite in a 
$237m transaction. 

Woolworth added $% to $18% 
on a published report that 
raised the possibility of a lever- 
aged buyout of the retailer for 
&3bn, or $25 a share. 

In pharmaceuticals, takeover 
speculation continued to swirl 
around Warner-Lambert, send- 
ing its share price down $L 
to $82. 

SmithKline Beecham was 
marked up $% to $30% after 
agreeing to sell the over-the- 
counter drugs business of Its 
Sterling Wmthrop unit to 
Bayer's Miles Laboratories. 


It was a day of contrasts 
among the Continent's mar- 
kets yesterday. 

FRANKFURT fell back 
sharply during an active ses- 
sion. The Dax index sank 30.54 
to 2.154.61. moving within a 
range of 2,140.66 and 2,154.66 
during day. In th e post- 
bourse the Ibis-indicated index 
gained slightly to 2,15539. 

Of the 30 DAX stocks, declin- 
ing issues outnumbered 
advances hy 26 to 4. Turnover 
amounted to DMShn. 

Lufthansa was actively 
traded ou news, within market 
expectations, that it was to 
offer 7.64m new ordinary 
shares to existing shareholders 
at a price of DM160. Sharehold- 
ers would be able to buy one 
new share for every four held. 
The airline’s shares improved 
DM3 to DM200. The govern- 
ment is not taking part in the 
rights issue, so reducing its 
stake from 51.4 per cent to 
about 41 per cent The 33m 
shares which the government 
will take up will be sold to 
investors at home and abroad, 
excluding the US, via a syndi- 


cate of international banks led 
by Dresdner Bank. 

Bayer dropped DM650 to 
DM86850 on news that ft bad 
paid $lbn for the right to 
acquire the North American 
over-the-counter pharmaceuti- 
cals activities of Sterling- 
Wmthrop from SmithKline 
Beecham. The acquisition 
includes the right to use the 
Bayer name in North America, 
lost some 75 years ago. 

PARIS overcame a weak 
opening, foOowmg the rise in 
UK interest rates, on an 
Improvement in the bond mar- 
ket. The CAC-4G index added 
1736 at 1366.79. Turnover was 
light at FFriSbn. 

There was further negative 
news for Saint-Gobain with 
reports that an executive of a 
subsidiary was to be ques- 
tioned by magistrates. How- 
ever, the shares made ground 
on expectations of good first- 
half results being reported 
on Thursday, firming PFr4 to 
FFr640. 

MILAN was lower, awaiting 
today’s meeting between Mr 
Silvio Berlusconi, the prime 


FT-SE Actuaries Sri3fi 


Sop 12 
wnn eftaran 


THE EUROPEAN SERIES 
1U0 ISjOO am 


FT-SE BrAack 100 13KL43 136X63 13BQ87 138260 1364.13 1364M 1 387-20 1368-06 
FT-SE BaftadL an 140523 MOWS 141080 141223 141060 141107 141444 Ml 8.17 


Sap 9 Sep 8 S«p 7 Sy 6 Sep S 

FT-SE Euotraek 100 137003 130001 1371.13 1371.03 1380.11 

FT-SE a» 14183) 1431.14 143033 1427.67 W30I2 

Bn* 1000 (ZWIHUt NOBAbp MB - 13B3AK 200 - HIMB 100 - 139MB 200 - MMS 1 P**i 


minis ter, and the trades unions 
over pension reform, and 
depressed by the UK's move on 
interest rates. The Comit index 
weakened 13.70, or 2.1 per cent, 
to 64833. 

Goldman Sachs, which is 
keeping its rolling 12 -month 
Comit index target unchanged 
at 800. said it continued to 
expect the strong earnings 
momen tum and slightly more 
attractive valuation to support 
a 17 to 20 per cent total annual 
return for equities, even 
though the short term pros- 
pects were suffering from 
a high level of uncertainty 
over the government's fiscal 
policy. 

Olivetti, L52 or 25 per cent 


lower at L13S4, continued to 
be pressured by worries that 
first-half results might disap- 
point the market, and the 
investigation into the awards 
of state contracts. 

Cir, the industrial holding 
company, gave up a further 
L47, or 2.4 per cent, to L1536. 

Against the trend, Ciga, the 
luxury hotels group, rose L12 
to Ll.088. At the weekend, FTT- 
Sheraton fixed its public buy 
offer for 367m shares at 1A,102 
a share. The offer begins next 
Monday and if successful 
would leave Sheraton with 70 
p er cen t of Ciga. 

ZURICH was closed for a 
local holiday, but prices over- 
came early weakness in active 


Basle trading after Wall 
Street's firm opening- The SMI 
index, (town 17.6 early in the 
day, finished 0.9 higher at 
2,643.0. 

Banks led the uptrend, with 
CS Holding putting on SFr7 at 
SFrS68 after the group said it 
was withdrawing its offer for 

Austria’s Cre ditans talt-Bank- 
verein. UBS bearers were SFr4 
higher at SFrUQ9. Insurers 
and industrial shares mostly 
closed with marginal losses. 
Registered shares in Sandoz 

fell SFr5 to SFr67TL 

AMSTERDAM was broadly 
lower, although some gains 
were seen during the session, 
particularly from Hetoeken, up 
FI 3.60 at FI 248.10, following 
the strong performance on Fri- 
day. 

The AEX index finished 128 
down at 41151. 

MADRID, returning from a 
long holiday weekend, dipped 
2.1 per cent as it caught up 
with Friday's losses in other 
European markets. The gen- 
eral index fell 6.46 to 298.72 in 
slim volume of below Pta20bu 
as (he market awaited today’s 


Spanish and US inflation data. 

Among heavily hit banks, 
Santander and Argeotaria each 
fell PtalOO to Pta5,l2Q and 
Pta&2l0 respectively. 

DUBLIN drifted lower in thin 
volume and the ISEQ overall 
index closed 10.76 easier at 
1,909.34. One analyst com- 
mented that the Irish central 

bank had no need to foUow the 

interest rate lead from London 
on economic grounds, and 
would, indeed, be anxious to 
dem onstrate its autonomy. . . 

STOCKHOLM advanced 
strongly, with heavy demand 
seen for Astra. The Aff3rs- 
variden general index gained 
9.4 at 1,4505. Good demand for 
Swedish bonds and a firmer 
krona led to a decline in inter- 
est rates and provided support 
for the bourse. 

Astra saw turnover of 
SKrSOQm, or some 28 per cost 
of the day's total of SKriLSbix, 
and the “A” shares rose SKr3 
to SKri66 while the “B" fin- 
ished SKr4 up at SKrl86. 


ASIA PACIFIC 


Nikkei gains ground for the first time in six sessions 


Tokyo 




Canada 


Toronto lost ground at midday 
in a session sapped of action 
ahead of Quebec election 
results, due late in the day. 
and today's US consumer price 
data. 

The TSE 300 composite index 
lost 1152 at 4517.62 at noon in 
volume of 32m shares. Falls 
outpaced advances by 357 to 
207, with 318 issues unchanged. 


MARKETS IN PERSPECTIVE 


VcMplilgcilHraiqit 



1M 

4Wtffc» 

1 T»» 

a*t <* 

Scat of 






19M 


19H 

Austria 

+0.17 

+2.92 

+9.40 

-4*9 

+2JS7 

+7*2 

Belgium 

-2-07 

-1*3 

+6*3 

-5*1 

+2*3 

+7*0 

Denmark . — 

-1.70 

-3.83 

+1.48 

-7*4 

-1*9 

+3*7 

Finland 

+0.47 

+10.66 

+43.31 

+27*8 

+40.70 

+47.48 

France — 

-3.01 

-2*4 

-4.07 

-12*2 

-6*2 

-2*1 

Germany 

-0.60 

+2*7 

+13.45 

-4.77 

+2*1 

+7*4 

Ireland 

-1*0 

+5*4 

+18*7 

+5.73 

+9.62 

+14*1 

Italy 

-4.94 

+1*0 

+6*3 

+6*5 

+10*9 

+16.70 

Netherlands 

-1.61 

+0.81 

+12*0 

-2*6 

+3.99 

+9*0 

Norway — 

-2*5 

-0.61 

+17.52 

+2.06 

+8.80 

+14.04 

Spain 

-a 32 

-3*9 

-0*1 

-ass 

-3*0 

+1X0 

Sweden 

-2.13 

+2.59 

+13*4 

+3-77 

+9.16 

+14X3 

Switzerland 

-1*6 

+1.61 

+11.92 

-9*6 

-0.16 

+4*0 

UK 

-2.43 

-0.13 

+3.84 

-7.42 

-7.42 

-2*6 

EUROPE _ 

-2j07 

+0*4 

+6*3 

-6*7 

-2.15 

+2*7 

Australia . 

-2*9 

+0.18 

+7.73 

-4*7 

+0.11 

+4.94 

Hong Kong — ... 

+2.08 

+8*5 

+37*6 

-14*0 

-18*1 

-14*0 

Japan - 

-3*0 

-3*9 

-4*0 

+8*3 

♦16*4 

+22*8 

Malaysia 

+3*8 

+8.18 

444*7 

■8.61 

-6.12 

-1.50 

New Zealand — 

-0*3 

+6*6 

+12.03 

+2.71 

+5.85 

+10.98 

Singapore — ...... 

-1.51 

-a.16 

+17.45 

-8*4 

-5*3 

-1X0 

Canada 

USA 

-0*2 

-0.64 

+4*6 

+1.10 

+12*9 

+2.16 

+2*6 

+0*6 

-5.12 

-4.06 

-0*4 

-0*6 

Mexico 

+2.63 

+4*7 

+42.45 

+5.46 

-8.19 

-3.78 

South Africa 

+1.09 

+2*7 

+80*0 

+22.05 

+10.75 

. +16.10 

WORLD I NDEX 

-1*8 

-0*1 

+2*3 

+0*6 

+1.68 

+0*8 


MMIMSmrilHlMM 


MflM. Copyright, Ilia Financial TtnM LMMd, QoUn, Sadia A Co, 


Equities rose for the first time 
in six trading days, but con- 
cern about oversupply weighed 
an activity, writes Errdko Tera- 
zono in Ibkyo. 

The Nikkei 225 average was 
up 19.40 at 19,91758 after a 
day’s high of 1957359 and low 
of 1958258. Institutional inves- 
tors and public funds sup- 
ported share prices, but the 
upside was limited by small-lot 
sales and arbitrage unwinding. 
Volume was only 194m shares, 
against Friday's 581m. 

Investor confidence 
remained depressed as Japan 
Telecom, the long distance 
telecommunications operator 
listed on the second section 
last week, lost further ground. 
Friday’s Wall Street decline 
also weighed on sentiment 

Traders said worries over the 
listing of Japan Tobacco next 
week prevailed. “The senti- 
ment indicators like the ratio 
of put and call options show 
that people are mare bearish 
than the same time last year,” 
said Mr Alan Livsey at Klein- 
wort Benson. 

Investors are also wary of 
Matsushita Electric Industri- 
al’s planned Y2Q0bn convert- 
ible bands issuance early next 
month. 

The Topix index a£ all first 
section stocks eased 0.43 to 
1586.17 and the Nikkei 300 
edged up 0.16 to 289.04. Falls 
led rises by 488 to 464, with 229 
issues unchanged. In London 
the ISE/NIkkei 50 index firmed 
0.89 to 159159. 

Japan Telecom posted a new 
low of Y457ta, falling Y13.000. 
Other telecommunication 
stocks were also lower, with 
DDI down Y9.000 to Y888500 
and Nippon Telegraph and 
Telephone 71,000 to '7884,000. 

Steels were firm on selling 
and buying back activity by 
investors who wanted to real- 
ise profits ahead of the Septem- 




' ■*.. 




her book closing. Nippon Steel 
rose 75 to 7375. 

Some banks, which were 
down last week on profit- 
taking, rallied. Bank of Tokyo 
put on T20 at Y 151 Q. 

Matsushita Electric Indus- 
trial receded Y3Q to 71,620 cm 

fears of oversupply caused by 

its expected convertible bond 
issue. Sumitomo Bakelite 
dropped Y26 to 7691 due to the 
weakness of its convertible 
bonds floated last week. 

Daito Trust Construction fell 
by Its daily limit of 7400 to 
71,620 following reports of 
sharply lower pre-tax profits 
projections for the current 
business year to next March. 

In Osaka, the OSE average 
slipped 2150 to 22528.12 in vol- 
ume of 42m shares. Bohm, a 
semiconductor device maker, 
rose 780 to 74580 an a higher 
pretax profits forecast 


index shed 25165 to 959057, 
not far above the day’s low of 
9356. lL Turnover was a provi- 
sional HK$5-Q8 hn, down from 
Friday's HK$758bn. 

The H share index of China 
incorporated companies fell 
46.67, or 35 per cent, to 
1,431.42. Among H shares, 
Shanghai Petrochemical 
declined 8 cents to HKS2.74, 
Maanahan Iron and Steel also 8 
cents to HKS2.71 and Donfang 
Electric 42 cents to HK$4J0. 

Property companies, highly 
sensitive to interest rate 
moves, were heavily sold: Sun 
Hung Kai Properties fell 
HK$L75 to HK$58 and Cheung 
Kong HKS1.50 to HKJ3350. 

Elsewhere. Guoco Group 
retreated HK$150 to HK$37.7D, 
having made ground recently 
on speculation that it would be 
hhns en to replace the Jardine 
companies In the Hang Seng 
index following the latter’s 
debating. 

SYDNEY retreated further 
after Friday's decline. The Afi 
Ordinaries index lost 37.7, or 


15 per cent, at 25325, while 
the All Industrials inde x fall 
61.1 to 2,881.9 and All 
Resources 19.7 to 1,403.4. 

News Carp dropped 38 cents 
to A$852 and John Fairfax was 
dawn 13 cents at A$ 2 j 67. 
KUALA LUMPUR fall back 

nm arilrng of blufi chips which 

knocked 1 per cent .off the mar 
ket’s benchmark index. The 
composite index shed 12.61 to 
156955. Brokers said the index 
showed resilience at lower lev- 
els and they expected strong 
support at the 1,150 level, Vol- 


aiori- The weighted index 
dipped 3254 to 6567.48, after 
reaching an intraday high of 
7,042.07. Turnover was thin at 
T$57bn. 

Recently listed Taiwan Semi- 
conductor climbed by the daily 
7 per cent limit for the seventh 
straight sesion, adding T$8 at 
T$l42.50 on volume of 3.8m 
shares. 

Textiles made headway, Car- 
nival Textile dhhbingT$l. 60 to 
T$28.60 and Reward Wool 90 
cents to T$48.7Q. 

SEOUL extended early gains 


iimp was 343m shares and los- . In spite of selling intervention 


ere led gainers by 301 to UL 

Golden Plus gained 80 cents 
at M31450 on reports that the 
the company would announce 
a major project this week. 

MANILA was depressed by 
losses in the major stocks. The 
composite index fell 62.14 to 
251951, with PLOT sliding 15 
pa cent to 1545 pesos and San 
Miguel “A” 15 per cent to 98 
pesos. 

TAIPEI slipped under the 
7,000 mark in a volatile ses- 


by the stock market stabilisa- 
tion fund The composite stock 
index rose 9.18 to 9B6.TQ. 
Advances exceeded declines by 
483 to 325, with 175 going limit 
up. Samsung Electronics 
staged a rebound, rising the 
day’s limit of Won3,000 to 
Wonj.38,700. 

SINGAPORE was broadly 
lower in thtn trade. The Straits 
Times Industrial index slipped 
1957 to 258059, with an esti- 
mated 170m shares traded. 





V*U V*>VW 




Roundup 





-. -»a, 



The region’s markets reflected 
the fall on Wall Street on Fri- 
day, and tears of an interest 
rate rise. 

HONG KONG slid 25 per 
cent, with Chinese-incorpo- 
rated issues the hardest hit 
after a recent rally, followed by 
the interest rate-sensitive prop- 
erty sector. The Hang Seng 






SC"- -I*?. 'Xyr * 

IXtiGM&VGlWl'y* 










The world’s equity markets were broadly lower over a 
week which brought a sting in its tail. On Friday, Wall 
Street and leading European markets finished in retreat 


S Africa ends broadly lower 


spectre of rising inflation and interest rates. Italy was 
the week’s biggest loser, weighed down by worries about 
cabinet splits and vacillation, and doubts about the gov- 


ernment’s ability to take decisive action on the 1995 
budget. Last week’s focus was on government plans to 
cut at least L8.000bn from pensions, prompting trade 
union threats of a "hot autumn” of conflict if the propos- 
als were not rewritten. Today, Mr Silvio Berlusconi, the 
prime minister, meets the anions to discuss the issue in 
what is being seen as the first real test of his stated 
resolve to take firm, but fair, measures on the economy. 


Johannesburg ended broadly 
lower as initial losses in golds 
and other mining shares 
spread to the broader market 
amid a lack of fresh direction 
and hunted buying support 

The overall index, after edg- 
ing higher at the start, fin- 
ished 63 down at 5592, while 
golds lost 45 at 2,419 and 
industrials dipped 22 to 6595. 

Traders said short term 
equity index futures, which 


close out on Thursday, were 
calling golds slightly better 
but were discounting a fall 
in the industrial overall 
indices. 

The newly listed Nasionale 
Pen added R2 at K21 - 
sharply above expectations 
which were as low as R17 - in 
heavy volume of RUSm. 

Iacor lost 12 cents at R458 
as profits continued to be 
taken after recent gains. 


FT-ACTUARIES WORLD INDICES 


Jointly compiled by The Hnandol Times Uct. Goldman. Sachs & Co. and NatWest Secultlas Lid. in conjunction with tfw InattutB of Actuaries and the Faculty of A&mfos 
NATIONAL AND 

RECfOWAL MARKETS fFBPAY SEPTEMaEH B 1M4 — THURSDAY SSTBWJER 8 1994 DOLLAR INDEX 


REGIONAL MARKETS 

Figures tn panrtheeea 
show number of Bnoo 
Of stock 


Ddlflr Change Ssertng 


Local Local 
Curency M eftg 
Index on day 


m DOLLAR INDEX — 

Local Year 

Currency S2 week 52 week ago 


AustraSjfGS) 17 S.ii 

Austna ll«U^ tsa.89 

Belgium (37J „.1 7M0 

Canada |KM) 135.06 

Oenmwk 03) sssja 

FmUxJ (2d) 181.70 

France (97) 178.43 

Germany f&Q) 150.40 

Hong Kong (565 41&48 

Ireland (Id) J1Z.fi 2 

any m 795e 

Japan (469)._... 150. St 

fcWaysalST) 582.14 

Mexico (18) 2206.0? 

Motherland (87)- 217.03 

New Zealand (id) 75.35 

Norway (231 204.87 

Stogapae yU) J62.40 

South Attea (S3) 31015 

Spall (42) 141-39 

Sweden (36) 82-1.70 

Switzerland (47) 1 07.60 

Unfed Kingdom poa) 18839 

USA (517) 190.88 


107.40 10EL88 14038 15036 

190.14 124.80 19944 16928 


167.77 110.12 


24438 160-33 204^3 211.82 

173.70 114.01 145.85 19ft73 


17KB7 169.47 111.01 
195J33 187^5 123.11 

17426 167.15 10949 

135JS5 13041 85-42 


254.50 244.12 


184.83 108.19 13022 

143.78 94J7 12057 

390.® 261® 333.81 
20345 133.54 170.00 

75.87 4AM 63.02 
152.49 10a 09 127^7 


13022 14ZS0 
120S7 12057 
333^1 41X13 

17060 196^1 


177-82 17037 111® 


14SL94 157J6 168.10 13024 142.82 

156-52 15847 190® 104*4 175.12 

14008 137.78 177*4 14062 100l57 

109*9 184.78 145*1 12054 124*1 

205*0 213.13 275.78 223*4 232*8 

143.70 188*8 181.70 10428 111*5 


CS: ; & .'.Vv*C 




mm&t 






147*2 141*9 


16024 1WJH 14022 144*9 18037 159*4 18059 


365*8 486*6 


0* 2196*4 1441*3 1042.12 8551*3 


15079 152*2 99.77 

577*8 554*4 362*1 


134*9 172*2 
5Q*S 6027 
99.77 12047 


119® 15Q40 124*9 12001 
412*9 608*8 292.08 301*3 


:y. ■. -SSif 




41099 399,04 201*6 33057 412*9 608*8 292.08 301*3 

213.73 205.02 134*9 172*2 187*8 218*0 161*4 16082 

60® 77*9 SOS9 6027 6529 97.78 67® 7058 


"'“K'V _■ : ;, vsr.vre. * " Xiiw. ' .. ■ iv. 1 /-■> i 


12047 99.77 17010 124*4 158*5 
467*0 568*0 621*3 382*3 403*0 


EUROPE (718) 173.93 

Word* (1 16) *2034 

ftflfc 8a»n f740).- 17022 

fieth-Radfic (146® 171.66 

North America (621) ,„..187*1 

Europe E*. UK (514) 15054 

Pacific Ex, Japan (779) _„.272*4 

WortJ E*. US (1047) 173.42 

World Ex. UK (I960) 17019 

World Ex. So, Al. (2105) 177.37 

World E* Japan (1G95J 19012 


0.1 

207.48 

136.18 

173*8 

171*7 

-08 

334 

21074 

207*1 

13019 

0.1 

72.03 

4728 

60.40 

68*1 

D* 

3*1 

75® 

7021 

47® 

-0.4 

195.85 

128*5 

1B4L23 

188*2 

-13 

1.75 

20076 

197*7 

129® 

-0.4 

340.45 

227X0 

29051 

25005 

-as 

1.68 

383*0 

34097 

220*9 

-0* 

296X9 

194.61 

248*2 

305.73 

-0.7 

2.09 

311.73 

299*2 

19087 

-at 

13S.17 

88.72 

11034 

137.46 

-09 

4.19 

141® 

135.73 

80*1 

0.7 

214*1 

140*9 

180.12 

251.45 

-OX 

1® 

22323 

214.13 

14026 

0.4 

100*2 

105.16 

134*5 

13064 

-0* 

1.82 

16098 

.16018 

104*2 

-0* 

190® 

124*6 

159*2 

19023 

-1* 

9*7 

20088 

192.48 

120.08 

-1.0 

18257 

118*3 

153.09 

190*8 

-1.0 

2.64 

192*8 

18011 

121® 

-0.1 

166-27 

109.13 

139X2 

154-71 

-as 

3.00 

174.13 

187® 

109.41 

as 

21084 

138*5 

170*3 

21067 

-0* 

1X1 

21058 

209® 

137® 

0.4 

16273 

10061 

130X5 

111® 

02 

1® 

169.60 

18068 

10066 

02 

164.10 

107.71 

137® 

12074 

-02 

1.90 

171® 

164X0 

107® 

-1.0 

179® 

117.68 

150*1 

187.04 

-1* 

2-82 

189X4 

181.71 

11003 

0.3 

149.65 

00® 

125X8 

133.73 

-0.7 

2-42 

156*6 

148.70 

98*6 

-at 

280J83 

171® 

21072 

242.47 

-ai 

2® 

2TO01 

261® 

171*4 

ai 

166.78 

10082 

139.02 

132*4 

-02 

1*1 

173.19 

18013 

106*2 

-02 

180-43 

iiass 

141*4 

146,77 

-Ox 

2*5 

17S® 

1®® 

110® 

-03 

169*6 

111® 

142.18 

140» 

-0* 

2*4 

177® 

170.81 

111.76 

-as 

181.75 

11029 

152X0 

180® 

-08 

2*4 

191® 

183X3 

12015 

-o* 

17038 

111*2 

14085 

15068 

-0* 

2® 

17071 

171X2 

112® 


2279® 2188.74 1432*7 1644*7 847072 2847® 181S.11 17BS.74 


69*2 01.40 

16052 16068 




281*0 37092 285*1 288*7 

252*0 307.78 314*4 178*9 18073 

114.46 130.70 166-10 120*0 140*7 

2G2X3 231*5 175*3 19033 


..>* ....VV 
!!. V't" 




135.10 134*9 


135.70 137® 
181.11 191® 


192*8 18004 17085 188*4 


& v" V- :'■*£ 

'»*•**. •vs*- - " . A 

/! \ v \ ■ -Vw- * - ‘*v 'i't £ ’.V" 


140*0 1SO03 17058 153*6 
178*3 211 JX 222® 173.19 


137*1 111® 17080 13479 168.11 

138*8 129*2 175.14 143*8 161® 

153*8 188*6 192.78 175*7 183*7 

120*6 134*1 168.12 134*7 138.70 

22088 24071 29021 20013 204*2 

14012 132*4 176*8 146*8 161® 

14088 147X2 178*9 156*6 160® 


153® 15013 
173.19 180X6 
134.79 108.11 


20013 204*2 
146*8 161® 


142.88 (47X2 


y, v;^ \:r-S- -v'-i 

.■ c. 

r™.: > .< :.t. • ■ .%V * t • .* ■' 

\ vF- ;v'!r : ;' v ..' A 


143*0 18032 180® 168*4 

164.71 163,17 186*0 174*4 




Joiner P 


•*j VI ' 


Written and odRed by John Pftt 
and Mehael Morgan 


BOMBAY climbed to a 
record high on continued spec- 
ulative buying. The BSE index 
closed at a provisional 4,64131, 
up &36 or 2 per cent Brokers 
said better half-year results 
helped the rally. 

The BSE Index has shown a 
steady upward movement 
throughout the year and Is 
now 34 per cent higher than its 
year's opening of 3.465A6. 

Broken) attributed. the specu- 
lative interest to strong hopes 
that the Securities and 
Exchange Board of India would 
approve a recent BSE proposal 
for the introduction of a 90-day 
futures contract 
BANGKOK declined cm tears 
of a possible Interest rate rise. 
The SET index closed 18.44, or 
L2 per cent lower at 1,490.41. 
Turnover was Bt7.4bn. Stocks 
fall across the board, led by 
hanks which lost 22 per cent 
WELLINGTON followed the 
region’s trend, losing 22 per 
cent The NZSE-40 capital 
index fell 47.68 to 2111.09 in 
tight NZ$40u4m turnover. 


.JK -4- V- - 



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