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BHdCs battle 


Sweden debates 
the welfare state 

Pag* 16 



Rongji waters 

Cleaning up 
the oceans 

Page 12 



Raising the game 


Why planning may 

be a good thing 

Page- 10 



Smcrite and mirrors 

Behind the 
Borden deal 

Pagal? 


FINANCIAL TIMES 


Europe's 'Business. Newspaper 



Modest rise in US 
consumer prices 
boosts Wall Street 

DS retail inflation remained modest in August, 
encouraging Wall Street, which had taken fright at 
Friday’s sharper-than-antidpated jump in wholesale 
prices. The consumer price index rose by 0.3 per 
cent, the same as in the previous two months. This 
compares with forecasts of a 0.4 per cent rise and 
the month's wholesale price rise of 0:6 per cent. 

The Dow Jones Industrial Average was up 21 at 
3JJ81 at midday, though the bond market reaction 
was more restrained, with the 30-year long bond up 
£ to yield 7.69 per cent UK share and bond prices 
also rallied on news of the US data. Page 16; US 
stocks. Page 38; London stocks. Page 27 

Ctaes favourite for Ifafo Job; Willy Claes, the 
Belgian foreign minister, has emerged as the clear 
favourite to become the next secretary-general of 
the Nato alliance after securing broad support 
among European allies. Page 16 

British Steel announced its biggest investment 
since before the recession by paying £85m ($131m) 
to raise its stake in Avesta Sheffield, the big Anglo- 
Swedish stainless steel producer, from 40 per cent 
to 49.9 per cent Page 17 

Goldman Sacha chief to retire early 

Stephen Friedman (left), 
senior partner and chair- 
man of the management 
committee at Goldman 
■Sqcha and arguably the 
world's most powerful 
investment banker, is to 
retire early at the age of 
57, to be replaced by Jon 
Corztoe, joint bead of the 
firm's fixed-income divi- 
sion. Mr Friedman said 
he made his decision a 
year ago, and had fixed the date of the announce- 
ment in March. Page 17 

Hurd looks to Asia mar k e t s: UK foreign 
secretary Douglas Hurd placed promoting British 
exports to Asia at the top of his agenda when he 
brought a delegation of British businessmen to a 
meeting in Bangkok with Chuan Leekpai the Thai 
prime minister, at the start of an Asian tour. Page 3 

Global agenda agreed at Cairo: The vast 
majority of the world's governments ended nine 
days’ negotiations at the Cairo conference by 
endorsing a far-reaching global programme to stabi- 
lise population growth into the next century which 
places enhanced womens' rights at its heart Page 6 

US prepares for invasion: The US government 
took fresh steps to pave the way for an invasion of 
Haiti. The Defence Department prepared two air- 
craft-carriers for duty off Haiti and sent its two 
most senior defence officials to Congress to try to 
quell opposition to the proposed invasion. Page 5 

Mediobanca, Milan-based merchant bank, 
increased net profits to L215.9bn ($138 -39m) in the 
year ended June 30, up 73 per cent on the LSOO.lbn 
profit recorded in the previous year. Page 18 

Agent Orange claims backed: A US report 
saying dioxin is more likely to cause cancer than 
was previously thought should trigger more com- 
pensation for veterans exposed to Agent Orange in 
the Vietnam war, activists said. Page 4 

UK corporate vector Is cash-rich: The 

economic upturn in the UK has left the corporate 
sector increasingly cash rich, as rising profits and a 
series of bond and share issues have raised large 
companies' liquid assets to historically high levels, 
official figures indicated. Page 8 

Optimism on Indian economy: The Indian 
economy is expected to grow by 5 per cent in the 
year to the end of March 1995. thanks to a good 
monsoon and a revival in industrial production, the 
Reserve Bank of India said. Page 6 

Tax cut mooted to cut vodka deaths; 

Russian officials are debating whether to reduce 
excise duties on domestic vodka as part of an 
attempt to curb consumption of bootleg products 
and low-quality imports which are believed to be 
responsible for a sharp rise in deaths Grom alcohol 
poisoning. Page 16 

Dublin move on peace process: The Irish 
government moved to maintain the momentum 
behind the Ulster peace process in the wake of Mon- 
day’s loyalist bomb attack in central Dublin by 
opening talks with Sinn Fein, the Irish Republican 
Army's political wing. Page 9 

Comm on wealth Bank of Australia, one of 

Australia's “big four” banks and now partially pri- 
vatised, announced a profit after tax of A$882.1m 
(US$507_9m) in the year to end-June, compared with 
A$443.1m in 199m Page 20 


■ STOCK MARKET INDICES 


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State 702 

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Feted Funds 

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■ DOLLAR 



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Long Band 37J3 

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Brent 15-Cay (Now) — S1R075 

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WEDNESDAY SEPTEMBER 14 1994 



France plans to sell 28% of Renault 

Unions vow to oppose privatisation of state-owned car group 


By John RKkSng in Paris 
and Christopher Brown- Humes 
in Stockholm 

The^ French government 
yesterday announced plans for a 
partial privatisation of Renault, 
the state-owned motor group 
which is one of the most attrac- 
tive assets in the country's public 
sector and a former bastion of 
union power. 

Mr Edmond Alp hand ery, the 
economy minister, said that the 
government would seO a 28 per 
cent stake in the company by the 
end of the year and that the flota- 
tion would be accompanied by a 
FFr2bn ($370m) capital increase. 
Industry analysts value the 


group at between FFr42bn and 
FFr46 bn. 

The planned flotation follows 
an agreement with Volvo, the 
Swedish motor group, which is to 
reduce its 20 per cent stake in 
Renault to 12 per cent immedi- 
ately with the option of selling a 
further 4 per cent at the time of 
the share issue. The two compa- 
nies have been unravelling a 
complex system of cross- 
shareholdings since the collapse 
of merger plans last December. 

Yesterday's announcement fol- 
lows months of speculation about 


the sale, which has been compli- 
cated by opposition from trade 
unions and opposition political 
parties. They claim that privati- 
sation will lead to job losses and 
that the car company is a 
na tional asset which should not 
be sold. The Confederation Gen- 
erate du Travail, the communist- 
led union, said that it will act 
against the share issue. 

Mr Edouard Balladur, the 
prime minister, has sought to 
defuse union opposition by insist- 
ing that ftananit will r emain in 
French hands and that the gov- 


ernment’s stake will remain 
above 50 per cent He indicated 
that the shares will be offered 
principally to French investors 
and Renault employees. 

Mr Louis Schweitzer, the Ren- 
ault chairman, welcomed the 
move. "We are an increasingly 
competitive company and it 
seems to me that what has been 
decided gives us an additional 
trump." He said the capital 
increase would give Renault 
valuable development funds. 

Industry analysts said they 
expected strong demand for 


shares in the automobile com- 
pany. Renault is one of the most 
profitable European car manufac- 
turers and is (me of the few inter- 
national automobile groups to 
have remained in profit through 
the industry recession of the past 
few years. Earlier this month it 
reported first-half net profits of 
FFrl.7bu, more than double the 
figure recorded in the same 
period in 1993. 

"The issue will be attractive to 
the French public because it Is 
regarded as a strong company 
and because it is a familiar 


brand," said one analyst at a 
Paris securities company, inter- 
national investors may, however, 
be frustrated to attempts to buy 
shares. “It seems the amount of 
stock available will be limited,’’ 
one stockbroker said. 

Mr Alphanddry said that 
French industrial and finan c ial 
groups would participate in the 
partial privatisation. Probable 
twwHdfltws include Elf Aquitaine, 
the oil group, which has said it is 
prepared to invest FFrlbn in Ren- 
ault, Banque Nationals de Paris 
and Groupe Lagard&re, the media 
to missiles company. 

More hands on the steering 
wheel. Page 14 


PQ may face uphill battle gaining a majority in a promised referendum 

Canadian 
markets 
rise after 
Quebec 
election 

By Bernard Simon in Toronto 

Canada's financial markets rose 
sharply yesterday as investors 
took heart from the separatist 
Parti Qudbdcois’ unexpectedly 
narrow victory In Monday's elec- 
tions In Quebec. 

Although the PQ won 77 of the 
125 seats in the National Assem- 
bly, it gained only 44.7 per cent 
of the popular vote, compared 
with 44JJ per cent for the outgo- 
ing Liberals. 

Bond and currency markets 
were buoyed by -pointers -that 
many Quebeckers- voted on Mon- 
day for a change in government 
rather than for independence, 
and that the PQ may have an 
uphill battle gaining a majority 
in a promised referendum to 
decide whether the predomi- 
nantly FrenchrSpeaking province 
should remain part of Canada. 

Recent opinion polls show that 
nearly 60 per cent of Quebeckers 
oppose outright independence. 

However, the PQ's leader, Mr 
Jacques Parizeau. reiterated his 
determination to press ahead 
with a referendum in 1995. 

Political observers and eco- 
nomic analysts cautioned that 
the referendum was likely to be 
preceded by a divisive campaign 
in which the new separatist gov- 
ernment in Quebec City will be 
well placed to push its case for 
independence. 

The PQ has pledged to push a 
formal declaration through the 
Quebec legislature expressing a 
desire to begin sovereignty nego- 
tiations with Ottawa. It will also 
set op a commission to draw up 
an independence constitution. 

In English-speaking Canada, 

Mr Rob Rae, premier of Ontario, 
urged Mr Parizeau to hold the 
referendum as soon as possible. 

“A climate of uncertainty will 
not in any way contribute to eco- 
nomic growth and recovery." 

The PQ, which previously held 
office from 1976 to 1985, failed to 
gain a mandate in a referendum 
14 years ago to negotiate a loose 
form of sovereignty for Quebec. 

It has indicated that it plans to 
pursue its goal more vigorously 
and unambiguously in the com- 
ing referendum, although there 
are divisions in the party on the 
strategy to be followed. 

Mr Parizeau. a former econom- 
ics professor who obtained his 
doctorate from the London 
School of Economics, told a vic- 
tory rally in Quebec City that: 

“in 1995, we will go before Que- 
beckers and ask them the ques- 
tion that will make a people into 
a country. We have begun a new 
chapter in our history." But he 
also sounded a conciliatory note, 
pledging to work on improving 
the province’s economy. 

By contrast, Mr Jean Chretien. 

Canada's prime minister, 
expressed confidence that ‘‘Que- 
beckers will once again 



Parti Queb£cois leader Jacques Parizeau (centre) celebrates his party’s election victory with his wife and 
other party candidates. Mr Parizeau has promised to hold a referendum on Quebec's independence 


Toyota to double 
car production 
in N America 


By MBcWyo Nakamoto In Tokyo 
and Tony Jackson in New York 

Toyota, Japan's largest car 
manufacturer, said yesterday it 
would raise vehicle production to 
North America by nearly 50 per 
cent, more than double engine 
production there and increase 
vehicle exports from toe US to 
markets. mnhirimg Japan, by 60 
per cent by 1995. 

The flnnmniflpwMiirt came as US 
and Japanese trade officials con- 
tinued their last-minute negotia- 
tions over how to increase for- 
eign penetration of Japan's 
vehicle market and reduce the 
country’s huge trade surplus 
with the US. 

The US is p<Hsed to tek&st^s 
towards . imposing sanctions 
against Japan at the end of tote 
month nnlpsB ah agreement can 
be readied on several trade 
issues. 

US carmakers reacted coolly to 
the announcement. Ford said: 
"Ihe important thing is whether 
they’re doing anything to 
improve the trade deficit What 
would interest us fe whether they 
can increase the amount of US- 
sourced material to the vehicles. 
Up to now, we feel they probably 
have less than 50 per cent North 
American content." 

Toyota's flniyMinnflTnpnt is also 
the most dramatic in di c ati on yet 
by a Japanese vehicle maker of 


the pressures the Japanese indus- 
try feces from a sharply appreci- 
ated yen, trade friction with the 
US and growing competition 
from US vehicle manufacturers 
in the world’s biggest car market 

In July, Honda, Japan’s third 
largest carmaker, announced 
that it would spend $310m on 
expanding its North American 
operations to bolster car and 
engine manufacturing capacity 
as well as strengthening its 
research and development and 
sales facilities. 

Toyota said yesterday it would 
raise total North American 
vehicle .production to 790,000 
units in 1996, up from 533,000 last 
year. Eight years ago, production 
in-North America was only 14,000 
units. The boost to production 
wiB mean that more than 60 per 
cent of the company’s US sales 
wfll consist of North American- 
built vehicles, compared with 46 
per cent In 1993. 

The increase will come from its 
manufacturing facility in Ken- 
tucky. Toyota Motor Manufactur- 
ing USA (TMM), from New 
United Motor Manufacturing, its 
joint venture with General 
Motors, and from Toyota Motor 
Manufacturing Canada. 

The company will not increase 

Continued on Page 16 
Honda’s UK output of Civic to 
double. Page 3 


Continued on Page 16 
Polarisation after poll. Page 4 
Editorial Comment Page 15 


Forte expands role 
in Savoy shake-up 


By Michael Ska pinker, Leisure 
Industries Correspondent 

Mr Rocco Forte won a role in the 
management of the Savoy hotel 
group yesterday. But the prize of 
overall control that his family 
has sought for 13 years eluded 
him: the Savoy remains an inde- 
pendent company. 

The board announced that the 
Savoy would have a new chair- 
man in Sir Ewen Fergusson. for- 
mer British ambassador to 
France. He succeeds Sir Anthony 
Take, who is retiring at the end 
of toe year. 

Tbe board said it would 
appoint a new managing director 
to succeed Mr Giles Shepard, who 
resigned on Monday. This is 
likely to be Mr Ramdn Pajares. 
general manager of London's 
Four Seasons hoteL 

Tbe board added that a new 
chairman's committee would be 
set up to work closely with the 
new managing director. It would 
include Sir Ewen; Mr Forte, who 
chairs the Forte group; and Mr 
John Sinclair, who represents 
shareholding trusts controlled by 
toe family of Sir Hugh Wontner, 
Savoy president until his death 
in 1PP2. 

That is a success for Mr Forte, 
indicating acceptance that his 
group has a legitimate interest in 
the Savoy's future. Forte owns 68 
per cent of Savoy's shares and 42 
per cent of its votes. Neverthe- 


less. Savoy loyalists such as Sir 
Hugh and Mr Shepard had long 
regarded Forte as a cost-cutting 
group unsuited to run such ven- 
erable properties as the Savoy, 
Claridge's and the Connaught. 

The Savoy announcement went 
on. however, to say; “The board 
has been informed that discus- 
sions between Forte and certain 
of the trusts which have a signifi- 
cant interest in the share capital 
of the Savoy have terminated." 

That means that the trusts con- 
trolled by the Wontner family are 
no longer thinking of aligning 
themselves with Forte to give the 
latter control. Tbe dual share 
structure set up by Sir Hugh in 
the 2950s to see off predators 
such as Sir Charles Clore and Mr 
Harold Samuel, and which con- 
tinues to deprive Forte of overall 
control, remains to place. 

The decisions followed months 
of acrimony and speculation. The 
Savoy board gathered at 11.30 am 
to settle the group's future and 
by lunchtime had finished after 
an apparently even-tempered 
gathering. 

Forte, however, was putting a 
brave face on the outcome. It said 
it fully associated itself with the 
words of Sir Anthony, who said; 
“The board has a common pur- 
pose which is to provide the higfi- 
est-quality service for all our cus- 
tomers at the same time as 
producing an adequate return for 
all our shareholders." 












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WEDNESDAY SEPTEMBER 14 1994 


NEWS: EUROPE 


After 14 years in power, the man and his image are crumbling fast, writes David Buchan 

Mitterrand’s ‘clarification’ adds to confusion 


Think of all those between the 
ages of 15 and 20. Ever since 
they became conscious of the 
political life of their country, all 
they have ever seen is me 

T wo months since saying 
this and in the 14th year 
of his presidency, Presi- 
dent Francois Mitterrand and 
his image seem to be crumb- 
ling fast Ostensibly to clarify 
comments that he bad made on 
his health and his political 
past remarks to a journalist 
and a biographer, the French 
president underwent 90 min- 
utes of questioning on televi- 
sion on Monday night 
Yet, still, he raised more 
questions than he answered. 
This was probably inevitable 
in the case of his health, given 
the essential unknowability to 
Mr Mitterrand and his doctors 
of the precise pace of his pros- 
tate cancer. But what he has 
effectively done is to plunge 
French politicians into an 
early election campaign to take 
his place in the ElysSe next 
May - or earlier - amid revela- 
tions that could prove a set- 
back for his own Socialist 
party and perhaps give a boost 
to the far right 


Immediate reactions to Mr 
Mitterrand’s TV interview 
were mixed. Some praised the 
president’s courage in talking 
about his cancer and his can- 
dour in tracing how, unlike 
most people, he had moved 
politically from right to left, 
from his pre-war conservative 
upbringing eventually to 
socialism. Others said they 
were moved, but used the word 
“pathetic”. Mr Ren6 Monory, 
the centrist president of the 
Senate who would take over as 
interim head of state if the 
president died in office or 
resigned, said: “I was a little 
sorry to see the president 
explain himself in such a 
way. -it does not usually end 
this way". 

Still others complained that 
Mr Mitterrand was over- 
stretching their credulity in 
asserting that when he went to 
work for the Vichy collabora- 
tionist gov e rnm ent in 1942 he 
knew nothing of the anti-se- 
mitic laws it had passed in 
1940, and that only in 1988 did 
he have cause to break off con- 
tact with Mr Bene Bousquet, 
the ex-Vichy police chief. But 
even yesterday Mr Mitterrand 


had a Jewish defender in Mr 
George Kiejman, his former 
Justice minis ter, who came to 
his aid against sharp criticism 
from Mr Serge Klarsfeld, 
France's best known Nazi 
hunter. 

But much of the French 
right believes that the left has 
now walked into its own trap 
of identifying itself so strongly 
with the resistance. Certainly, 
some Socialists, though not at 
the very top. were yesterday 
expressing their “disgust and 
bitterness” at Mr Mitterrand 
and pining for “a break with 
Mitterrandism". defined as a 
form of persistent “ambiguity” 
in personal and political rela- 
tions. 

The fact that this ambiguity 
seems to have persisted right 
into the Mitterrand presidency 
appears most to upset the 
French communist party, 
which was only allowed by 
Stalin to enter the anti-German 
resistance after 1941. In yet 
another new book on the presi- 
dent nailed “The wi ght Hand of 
God”, three French journalists 
claim Mr Mitterrand has con- 
sistently sought to divide the 
right by promoting and wooing 


Mr Jean-Marie Le Fen's 
National Front 
In 1982, they claim. President 
Mitterrand got the NF more 
coverage on state television, 
and between the two rounds of 
the 1388 election asked Mr Le 
Fen to swing his vote behind 
the socialist president, rather 
than the gaolHst panriiripta Mr 
Jacques Chirac. These claims 
are denied by dose Mitterrand 
associates- But it is the case 
that the introduction of propor- 
tional representation in the 
1986 parliamentary elections, 
designed primarily to minimis e 
Socialist losses, had the side 
effect of helping the NF. 

Yesterday a senior NF party 
official suggested that “tf Fran- 
cois Mitterrand was elected 
despite his real flirt with 
Vichy, then Jean-Marie Le Pea 
can be elected despite his false 
image as a Vlchyist". This, too, 
stretches belief. But it is bke3y 
that Mr Le Pen, who is doe 
next Sunday to become the 
first declared candidate for the 
1995 presidential race, will try 
to turn Mr Mitterrand's revela- 
tions to his own benefit 
Meanwhile, Prime Minister 
Edouard Balladur will by to 



Stretching credulity: Mitterrand speaking on TV on Monday 


keep bis government ticking 
over until early 1995 when he 
i ntend s to announce his own 
presidential candidacy, 
against, among others, that of 
Mr Chirac. Bat the weekly cab- 
inet meetings on Wednesdays, 
over which Mr Mitterrand pre- 
sides, will become even more 
curious affair s. The president 


will be watching for divisions 
in the government which he 
might divulge publicly, as he 
did last week to Le Figaro 
newspaper, while among his 
ministers, the rival Balladur 
and Chirac dans win be on the 
lookout for any sign of increas- 
ing presidential infirmity to 
send them to the hustings. 


Berlusconi 
heads off 


Crimean president ends MP lock-out 


pensions 

protest 

By Robert Graham In Rome 

Mr Silvio Berlusconi, the 
Italian prime minister, has 
temporarily headed off a show- 
down with the powerful trades 
union movement over pro- 
posed cuts in the generous 
state pensions scheme. 

Cutting pension benefits is 
an essential element in the 
right wing coalition's plans to 
reduce public sector spending 
in the 1995 budget Over the 
past eight days there has been 
a series of industrial stoppages 
organised by angry trade 
unionists. This included yester- 
day's action at Flat's usually 
tranquil Mirafiori plant in 
Turin. 

But after their first meeting 
on the issue yesterday with Mr 
Berlusconi, the heads of the 
three main trades union con- 
federations talked of having 
made a “step forward". Both 
Mr Berlusconi and the union 
leaders said it was important 
first to establish the principles 
of how the system was to be 
reformed, and then discuss the 
nature of the cuts. 

This represents an important 
change in the government’s 
approach. Until now the 
emphasis has been on finding a 
sperific sum of money from the 
cuts. The Treasury has been 
pushing for cuts of over 
L8,000bn f£3.31bn) while the 
labour ministry whose brief 
directly covers pensions, has 
suggested the figure be held 
below L6.D00bn. 

"We must avoid a negotia- 
tion over how much money we 
are going to cut from welfare 
payments and Instead we must 
face up to how we are going to 
reform the system in a way 
that is compatible with resolv- 
ing the problem of our public 
finances,” Mr Berlusconi said. 

The two sides are due to 
meet again next Monday. In 
the meantime union leaders 
will be meeting ministers dis- 
cussing other aspects of the 
budget, especially fiscal 
policy- 

Mr Berlusconi’s bands were 
slightly tied at yesterday’s 
encounter. He had hoped that a 
special 18-person commission 

set up in early August to exam- 
ine pension reform would have 
completed its report 

However. Monday’s comple- 
tion deadline slipped because 
commission members, who 
included technicians and 
trades union representatives, 
failed to agree on its contents. 


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By Matthew Kaminski in 
Simferopol and agencies 

The president of Crimea, a 
breakaway region of Ukraine, 
yesterday ended a lock-oat af 
the contested region’s parlia- 
ment but the local power strug- 
gle remained unresolved. 

The tug-of-war between 
Crimea’s parliament and presi- 
dent, a re-run on a smaller 
stale of the dramatic battle in 
Russia last autumn, escalated 
over the week-end when Mr 
Yuri Meshkov, the Crimean 
president, locked members of 
parliament out of their parlia- 
ment building. Yesterday, after 


deputies and their supporters 
seized control of the krai tele- 
vision station, Mr Meshkov 
relented. 

However, deputies rejected 
the “zero option” compromise 
- whereby Mr Meshkov would 
cancel decrees shotting the 
pflr ii ?>Tn e pt and deputies would 
rescind laws restricting the 
president’s authority - offered 
to them by Mr Meshkov. 

"I appeal to deputies to start 
talks tomorrow,” Mr Meshkov 
said in a terse address to the 
parliament “I am prepared to 
meet with you to work out a 
solution to the constitutional 
crisis.” 


Mr Sergei Tsekov, chairman 
of the pariiamfint, turned down 
Mr Meshkov's offer and 
accused the president of seek- 
ing a scapegoat for his own 
failure to deliver the reunion 
with Russia and economic 
prosperity he promised Cri- 
means in presidential elections 
in January. 

The political stalemate in 
Crimea is the most serious 
political challenge Ukrainian 
President Leonid Kuchma has 
faced since his election in July 
and could jeopardise the rap- 
prochement in the often tense 
relations between Ukraine and 
Russia. However, Russia, 


which sees Mr K uchma as a 
welcome alternative to more 
nationalist Ukrainian leaders, 
has helped the Ukrainian gov- 
ernment to contain the Cri- 
mean conflict by re fusin g to 
intervene. 

Transferred from Russia to 
Ukraine only in 1954, the 
largely Russian inhabitants of 
Crimea have always been at 
best lukewarm supporters of 
Ukrainian independence and 
both Mr Meshkov and his par- 
liamentary opponents were 
elected eariier this year on sep- 
aratist platforms. 

But the continuing power 
struggle in Crimea underscores 


the difficulties, apparent in 
break-away regions throughout 
the former Soviet Union, in 
translating a popular desire for 
secession into reality. 

Mr Meshkov, described as a 
“bandit” by parliamentarians, 
is being attacked for the seem- 
ingly contradictory offences of 
appointing too many politi- 
cians from Moscow to his gov- 
ernment and being too soft in 
his bid to break-away from 
Ukraine and join Russia. 

"We voted for him with a 
dream,” Mr Alexander Karlov, 
a deputy. “But all he has done 
is to put Crimean clocks an 
Moscow time.” 


Epidemics swamp ailing health system 

Chrystia Freeland finds grim prospects for the sick at Moscow’s Municipal Hospital No.32 


A young blond man in 
khaki army fatigues 
lovingly fondles a 
machine gun under a sign 
which announces, in large, 
hastily scrawled block letters: 
The Toilet Does Not Work”. 
This is the reception area of 
Moscow’s Municipal Hospital 
No 32, a stone’s throw away 
from, the sparkling, recently 
restored White House, which is 
the seat of the Russian govern- 
ment 

Bleak conditions like these 
in state hospitals throughout 
the former Soviet Union are 
the daily consequence of a 
health care crisis which has 
been dramatically exposed this 
summer by outbreaks of chol- 
era, diphtheria, dysentery, 
anthrax and Siberian malig- 
nant airthy a*, 

These infectious diseases, 
which have sprung up every- 
where from the Leningrad 
region on Russia’s north-west- 
ern rim to cities on the Pacific 
coast have become so preva- 
lent that one Moscow newspa- 
per has created an “epidemics'’ 
column, which informs readers 
of the day’s newest sickness. 

Some Russian doctors say 
that diseases long eliminated 
in the west have always been 
prevalent in the Soviet Union 
but that in the past the Com- 
munist regime suppressed 
news of outbreaks and swiftly 
imposed a quarantine on 
infected regions. However, sta- 
tistically, many parts of the 
former Soviet Union appear to 
be suffering a health crisis on 
a scale normally seen o nly in 
wartime. In Russia, Ukraine 
and Estonia the population, is 
now shrinking, with deaths 
outnumbering births in some 
regions by z to L 
The shortcomings in Russia's 
health care system are appar- 
ent at Municipal Hospital No 
32, an average hospital in the 
heart of Moscow. Ten people 
are crammed into tnujh room 
and there is one bathroom for 
every 15 patients. 

Dr Boris Storozhilov, the 
chief doctor at the hospital. 



BLEAK: an engineer is given an infection in a Moscow hospital 


says that part of his hospital's 
malaise stems from the same 
fiscal squeeze which is bedevil- 
ing Russia’s entire economy. 
When their often delayed 
wages are paid, the 12 doctors 
who care for the hospital's 170 
patients earn 85,000 roubles a 
month (about $39), nurses earn 
just 65,000 roubles a month 
($30) and nurses’ aides get 
(518). 

“Obviously, these are misera- 
ble salaries given the prices 
booming around ns,” Dr Storo- 
zhilov says. “It is impossible 
for us to find new, young 
employees at these rates. 
Everyone is throwing himself 
into commerce.” Dr Storozhi- 
lov says that the hospital has 
only one tenth of the nurses' 
aides it once employed and the 


staff shortage is so acute that 
doctors race towards female 
visitors to the hospital with 
the hopeful question: “You’re 
coming about the job?" 

These “miserable” wages are 
one reason why much of Rus- 
sia's still nominally state medi- 
cal system is being privatised 
by stealth. Dr Storozhilov says 
that “because of the wild capi- 
talism which is developing all 
around us and the inability of 
doctors to do well in this new 
environment, some doctors 
take money on the side from 
their patients for what they 
should be doing for 
free." 

Hospital No.32 is also suffer- 
ing indirectly from the eco- 
nomic decline of Russia’s state 
sector. The federal government 


finances the hospital’s operat- 
ing costs but in the past, typi- 
cally in a country in which 
industry and government were 
part of a single monolithic sys- 
tem, local factories bought 
most of the equipment for the 
hospital. 

“Now the factories are even 
poorer than we are,” Dr Storo- 
zhilov says. “They are working 
at half capacity and laying 
workers off, so our medical 
equipment Is rusting away.” 

Dr Storozhilov has noticed 
another effect bf the collapse of 
the state factories ' whose 
employees his hospital treats. 
“Today, sick people are afraid 
to admit it, in case they get 
laid off" Dr Storozhilov says. 
“They work until they drop 
and only then do they come in 


to the hospital” 

When they do arrive, many 
Russians are now too poor to 
follow the old Soviet practice 
of bringing in food from home 
to supplement their bland hos- 
pital diets. “AD the refrigera- 
tors on our wards, which used 
to be over-flowing, are now 
empty,” Dr Storozhilov says. 

But ff at Hospital No.32, it is 
the worst of times for some 
Russians things have never 
been better. About 10 per cent 
of Russians now buy private 
medical insurance which gives 
them the right to be treated at 
the elite Kremlin hospitals, 
whose state of the art facilities 
used to form the “fourth 
administration” which minis- 
tered to the bodies of polltburo 
members and their families. 


Recovery in W European car sales slackens 


The pace of recovery in 
western Europe's new car mar- 
ket slowed for the second suc- 
cessive month in August 

The 4.7 per cent sales 
increase over the same month 
last year compares with 
monthly rises of up to 13 per 
cent in the first half of thin 
year, according to ACEA, the 
European automobile manufac- 
turers association. Reuter 
reports from Brussels. 

However France, Spain and 
Scandinavia defied the trend. 
Registrations showed the 
sharpest percentage gain in 
Denmark, where they rose 69.7 


per cent, and Spain, where 
they woe up 34-5 per cent. 

Britain had the most regis- 
trations with 452,600, a 2.8 per 
cent increase. 

The worst performances 
were in Portugal, where regis- 
trations fell 1L9 per cent; the 
Netherlands, down AS per cent; 
Belgium and Luxembourg, 
down 4.7 per cent; and Ger- 
many, down 4.1 per cent 

Germany still had the second 
highest number of registra- 
tions, at 20L8QG, followed by 
France with 147,500. 

French registrations rose 
18-8 per cent compared with a 


year earlier. 

In separate figures, ACEA 
said Ford had the largest share 
of new registrations with 14.7 
per cent Volkswagen was sec- 
ond with 12.7 per cent, fol- 
lowed by General Motors at 
12.6 per cent 

Japanese manufacturers, 
Indus tug Nissan, Toyota, 
Mazda, Honda and Mitsubishi, 
captured 12.5 per cent of the 
market ACEA said. 

Fiat had the largest percent- 
age increase in registrations, 
up 22.1 per cent from August 
1993. Volvo registrations 
dropped 7.5 per cent 


West European Hflw Car Begfatrartlona* 



Aug " 
1994 

KChg 


Aifl 

iso* ; 

KCTO 

yMxvyr 

UK 

452.600 

42-8 

Switzerland 

17400 

+ 8-8 

Germany 

201,800 

-4.1 

Portugal 

14,600 

-11.9 

France 

147,500 

+1&8 

Denmaric 

11,200 

+39.7 

Italy 

71.200 

4 <U 

Sweden 

faaoo 

+ 12.8 

Spafci 

64,000 

+34.5 

Greece 

7.900 

4-17.9 

Nethotands 

20.700 

-8.9 

Norway 

6,200 

+202 

Belgium & 

24200 

-4,7 

Rriland 

5 200 

+3on 

Luxembourg 



(retard 

4,200 

+70-5 

Austria 

17,600 

-2J6 

Total market 

1,081.200 

+47 


fVwfciimi (pus. sowar tWmwn < VA » uuO * n wwa a m n AwcWw (teM 


EUROPEAN NEWS DIGEST 

Bank to set up 
works council 

Credit Lyonnais, the leading French bank, ami the banking 
unions have agreed to establish a European- wide _wom coun- 
cil for all its employees including those working in Britain, it 
was announced yesterday by the Geneva-based fatorrattonal 
Federation of Commercial Clerical Professional and Technical 
Employees (FEED. The agreement is the first of its kind in the 
European banking industry. “This is the start of a new era or 
positive relationships b etween management and woijera," 
said Mr Philip Jennings, FIETs general secretary. The basks 
TT.are. ffA.ngn* will be required to consult with its employees 
across Europe on its business strategies, restructurings and 
employment policy. Employees from 10 European Union coun- 
tries (except Denmark but including the UK) will have seats 
an the works courted Robert Taylor, London 

Italian drugs salesmen held 

Italian police have arrested over a dozen drug company repre- 
sentatives and health officials. They are suspected of systemat- 
ically overcharging hospitals of some LlOQObn (£4 12m) over the 
past 10 years. Magistrates have wanted another 120 people 
they faceinvestigation in the affair. The arrested officials 
included representatives of Germany's Bayer and Boehrtag 


MarmTurim and the US company Be ckm a n Instruments, along 
with Italian Daait. 

The drug company are alleged to have leased equip- 

ment used for blood testing and analysis to health depart- 
ments almost free of charge in return for being paid up to four 
ttw« the going price for accompanying chemicals and drugs. 
Palermo magistrates have sent out documents on the case to 
other Italian cities so that colleagues can investigate whether 
there have been similar incidents elsewhere “This is just the 
tip of tits Iceberg,” Palermo magistrate Mr Salvatore De Luca 
was quoted as saying. Reuter. Palermo. 

Prostitute smugglers arrested 

Italian police yesterday said they bad broken up a criminal 
organisation based in Bari capable of smuggling up to 5,000 
fflg gwi immig rants a month into the country via. the coastline 
of the Puglia region, on the Adriatic coast This is the largest 
immigra tion ring uncovered and highlights the involvement of 
organised crime in this incre asing l y profitable business. Mare 
than 20 people were arrested, including Italian, nationals. Slays 
and North Africans. In addition to being charged with bring: 
tag people illegally into Italy, they were accused of organising 
prostitution and providing false documentation. 

The Italian authorities are showing Increasing concern over 
the import of prostitutes. Prostitution has been one of the 
m«m activities unaffected by the two-year-long recession. But 
with the economy beginning to recover the authorites are also 
anxious to cut-off a new How of hopeful job seekers. The main 
problem is Albania. During the summer more than 200 Alba- 
nians a week are believed to have entered the country illegally 
vta the Puglian coast Robert Graham. Rome. 

Chernomyrdin backs Yeltsin 

Russian prime minister Victor Chernomyrdin has denied any 
presidential aspirations of his own in the 1996 elections. “Now 
is not the right time to change president," he said. He also 
warned of new political tensions this winter, but rated out 
further “bloody upheavals”. 

Speaking on German television, he voiced concent about 
future unemployment and food supplies, but did not predict a 
repeat of last October's armed rebelhon. "We have extremists 
who think their purpose in hfe is to demonstrate and shout in 
the city squares," Mr Chernomyrdin said, but conveyed his 
“belief in the Russian people”. He acknowledged that a recent 
presidential anti-crime decree giving police greater powers 
against organised crime was unconstitutional, but said it was 
essential muter current circumstances, “even if it infringes the 
rules of our constitution". Reuter, Barm. 

Russian peacekeepers killed 

Two officers from the Russian peacekeeping force in Georgia’s 
breakaway region of Abkhazia were killed and a third was 
wounded when gunmen fired an their car on Monday night 
The officers were the first victims among the Russian peace- 
keepers since the 3JM>etrong force was deployed in the region 
ta July to monitor a fragile ceasefire and the return of about 
250,000 Georgian refugees. Russia’s defence minister Pavel 
Grachev said Moscow would apply “the toughest sanctions 
against the perpetrators. Mr Grachev said he had sent his 
deputy, Colonel-General Georgy Kondratyev, to Abkhazia to 
investigate. A press release issued by the Abkhazian represen- 
tive in Moscow blamed “a Georgian sabotage group”. Ahkha- 
saan rebels, supported unofficially by some Russian army 
officers and volunteers from the Caucasus, drove Georgian 
government forces from the Black Sea region in a bloody 
conflict last year. Reuter, Moscow 

Iliescu calls for consensus 

President fan Hiescu of Romania yesterday urged the govern 
ment and opposition to co-operate more closely and form i 
consensus on key areas of economic reform such as privatise 
thm. In a state of the nation speech to parliament, the pres! 
dent said Romania's international standing bad improved 
m a rk edly in the past two years but that parliament needed tc 


become more efficient and to provide foreign investors with 
further legal guarantees. 

Several laws necessary for Romania’s successful transition 
to a mark et economy, such as bankruptcy and competition 
laws, are held up ta a backlog of legislation, at the country’s 
hang parliament, which is dominated by nationalist and er- 
amnnunist parties supporting the president Virginia Marsh , 
Budapest. 

Plutonium seized in Sofia 

Bulgarians interior ministry said yesterday police had seized 
unspecified amounts” of allegedly smuggled radioactive sub- 
stances from a house in Sofia. It said 20 containers had been 
fottad, including one with plutonium. Another substances 
mchided uranium, thallium 1504 and strontium 90. AP, Sofia 

ECONOMIC WATCH 


Spanish inflation swings upward 

. . Higher telephone tariffs 
helped to push Spain’s head- 
.v lum inflation rate up by 0.6 
per cent ta August, but the 
annual consumer price index 
was unchanged at 4.8 per 
cent. Underlying inflation, 
'■ which excludes fresh food and 
energy, rose by 0.4 per cent to 
““ the year-on-year rata to 
• 4J> Per cent against *L3 per 
cent ta July. The figures 
reverse a falling inflation 
trend over the past m onths 
and look certain to delay 
/ “terest rate cuts forecast by 
- --3 4 •• • economy minister last 
■Sows* njiutnm.:-'’ : < ' } . J®*; ^tesfatered unemploy- 

to ae IS8M9 . tCK FX, “ 

^seaports because of summer Held maintenance 

VSESSfESS* fadu ^^SSiio n M io 







3 








ksS 

cou ¥ 


FINANCIAL times WEDNESDAY SEPTEMBER 14 1994 


NEWS: WORLD TRADE 


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Honda’s UK output EU tackles US- Japan trade ties 

of Civic to double Guy de Jonquieres on Brussels fears over concessions to Washington 


By Kevin Dona, Motor (ndusfiy 
Correspondent, In Paris 

Honda yesterday unveiled its 
new Civic ^mai) family car- 
range for the European mar- 
ket. Next year, this win l ewd 
the company to more than dou- 
ble production, to around 
100.000 cars a year at its UK 


Mr Kazue Ito. president of 
Honda Motor Europe, said total 
investment at its plant at. 
Swindon, southern England, 
would rise to £70Qm (tLJhn) by 
the late 1990s, with production 
capacity rising to more Umti 

150.000 cars a year. 

Honda was- seeking to 
increase Us annual European 
car sales to 800,000 a year by 
the end of the decade from 
164*576 last year, and a target 
Of 200,000 in 1995. It aimed to 
raise its European market 
share from L4 per cent to 2 per 
cent over the same period, and 
would Increase its European; 
dealer network from. 1,700 to 
2,300 by 2000. Mr Ito said 
Honda was aiming to produce' 
around half the cars sold in 
’/Europe at its OK plant, with : 
the -remainder imported from 
Japan and the US. 

Around 500 jobs will- he 
added at* its UK plant by the 
late 1990s from the level of 

2.000 that wffl be readied by 
the pnri of thig year. ■ 

. .The firedoar Civic uhveOed 


yesterday, which wffl cosgete 
with European rivals such as 
the. Ford Escort; .fijp ^Volkswa- 
gen Golf and the Opel/Vaox- 
hail Astra, fe the second car to 
be buDt by Honda, in Europe 
following- the laumdi of the 
Accordat tbe^ao&of JS92. Yc&- 
ume production of tjte= Civic at 
Swindon wffl - begin ' - next 
month, with tite car. going on 
sale in same parts pf sontbem 
Europe in Decqmbec £ M Geo- 
many in Jmrttary ;awf in the 
UK in March, r ' ^ . r /. 

The Civic is the first step in 
an ambitious joint ’production 
programme with Rover, the UK 
carmaker, which will la u nch a 
ffisfcw car, bust under. Tfaenra 
fixan Honda, early next year, to 
replace the Rover 200/400 
range. In the European market, 
the- Civic, will replace the 
Honda Concerto, previously 
bulk at Raves's plant at Lang- 

frrjrig g T Urmirtghwwi ,v. ; , 1 

: Honda is. - aimingVio i sell 
around 60,000 «£ 

. Europe nartyear;whSe<K^Kit 
erf the hew Ttover ^ao^cange'at 
Langbridge io^? 
than 200j0S6<a year. 

Tbe levHl of ^conyooriality 

betwemther^adsda&m- Rover 
ranges wffl' ibe around ^ per 
cent for tto buMiefjSOTer'S 
output, which Tikkw-own 
K-Series engtoK, but uiffl rise 
to xuore than SO'penscmd Jar - 
versions using Ifond&'Syaato- 
-maric teansmissiofi^ami -M> 

7 : i « •• * - ~ : ••• • 

I ' X ^ ^ ' j 


litre engme. Honda saidyestm^ 
day that Rover had been 
licensed., to produce five- and 
four-door versions of the . new 
range, winch will be -Rover's 
most im porta nt volume car at 
its Longbridge plant. The 
licence would nm to the end of 
the year 2000, but an extension 
coold be neg otia t e d. . ■ 

The IfK-buflt Honda Civic 
wiH have a. local European con- 
tent of more (ham SO per emit, 
with Honda and Rover using a 

rmnwwn rhBtWOtk Ctf TTmr e than 
200 supphfirs. 

Mr Ito said the new Civic 
was “the most important car” 
Honda had ever launched in 
Europe and would be “one of 
the foundati on s" of its future 
expansion. The car is derived 
from the four-door Honda 
pomani fanwrfiPri in Japan two 
years ago. Design and basic 
en gi n eering was carried out in 
Japan with ; some detailed 
deveZojxnieiit "and *««Hng car- 
ripd fHT»^ centres 

in thO UK phd Germany. ' 

Honda said jt was achieving 
an assembly trine for the larger 
Accord at its' Swindon pMat of 
IZ5 hours per car. 

The Japanese carmaker is 
negotiafiqg ariih Rover, PSA 
Peugeot <3troen of France and ' 
other European carmakers for 
the supply ’of diesel engines for 
its EtaopeanbuSt cars. It bad ( 
no plans: to produce diesel 

on ghwB fbrif 


Hurd: places , Matra to 




of Asia 


By Victor Nhrifet in Bangkok -- 

Mr Douglas Hurd, the UK 
foreign secretary, yesterday, 
placed the promotion of British. 
exports to Asia atthe top of Ins 
agenda vdten he brought a del- 
egation of British businessmen.' 
to his meeting with Mr Oman 
Leekpai, -the Thai prime minis-' 
ter," at the start of an Asian 
tour. . - - ■ = -■ ■ -n-'J-i 

Rriteto is'tiie WggBBt- fiaKK ^ 
pean hxvestor i&Tb^hmd. htat 
j both Mr Hurd and his entou- 
; rage of chief executives : 
admowledged that UK*, mapte 
facturers had allowed Japan to 
dominate trade and fovestn^ent 
with the region. They said they 
would try to win contracts' in 
the defence, telecommunica- 
tions and civil engineering seo- 
tcre to redress the balance. 

Those of us who’ve been 
coming to Bangkok for seme 
years are always astounded by . 
the progress," said Mr Richard 
Turner, group marketing direc- 
tor for Rolls Royce. T think 
that we in Britain have probe-' 
bly not paid enough attention 
to it in the past" 

In his new role as midwife to 
British business contracts, Mr 
Hurd attended the signing in 
Bangkok of an agreement 
between Balfour Beatty, the 
construction arm of BICC, and 
Thailand's Sahaviriya group, 
to establish a £8m C$4.S5m) 


l "F on Taipei 

agenda damages 


joint-'v^tHre to ftfll-for ihfia- 
StmptBre projects, fa Thailand 
and' other Asian countries. 

The construction of every- 
thing from road tmteeis and 
airports to factories mid power 
stations in the region will be 
worth billions of. dollars to 
such companies in the next 
few years. -A ftaaMBy study is 
now undeway for a pn^weed 
raafink betweenNang Khai to 
ndrl&eastern-Th^md -and : 
Vientiane, tire caplfaEtrf tacs. 

^ Mr Hurd also anssunoed tiid 
eStahlishmeut of thie TlddBritr 
ishBuriness Group.-aJcwum to 
bring^ together business ereco- 
tives from the two couBtrieSu . 

Although inany companies , 
from Britain and-^sewhere in 
Europe havnheen^Sfow to take 
advantage»(dTtim topid growth 
jrf south-east Asian economies, 
there are- signs of improve? 
ment Last year UK exports to 
Thailand rose 38 per cent to 
£660m, while imports from 
Thafl and rose,2P pm- cent to 
£77Bn 

- Mr ilurd noted that some 
Thai companies - including 
the Landmark, group which 
recently bought the Royal Lan- 
caster Hotel in London - had 
invested in Britain, and he 
urged Thai investors to follow 
Japan in looking at Britain as 
a gateway to Europe. 

Today Mr Hurd Ts scheduled 
to go to Vietnam. 


By Laura Tyson In Taipei 

Matra Transport, a mnt of 
Matre-Hachette, is expected to 
appeal against a court ruling 
which reversed an earlier 
judgment requiring the TatiMf* 
city government to pay till" 
French company NTIlbn 
(f37m) in damages over a mass 
transit construction dispute, 
in nihitfUy . 


traa8n.Apahels lastfJJctwJcr' 

awarded Matra the funds irf 
coanpensattan for etientiye 
losses incurred due to con- 
struction delays on the Ulan. 
Mucha- line af the city's mass 
rapid transit system. Hatra’s 
contract for its section of the 
transit system is estimated at 
nearly 88Mhq.j. 

.Tie Tdipei district court 
ruled on Monday that Matra 
had not followed procedures as 
outihied in the contract in the 
event of a dispute. “The main 
reason the court invalidated 
the ruling was because Matra 
didn’t follow its contract with 
Taipei’s department of rapid 
transit system (Doris) before it 
sought arbitration," the coart 
said- - 

Matra had originally sought 
NT$2bn in damages from. 
Doris, which it claimed was 
responsible for the delays. 

Following the arbitration 
panel’s rating, Doris filed a 

counter-suit. 


The flight from Hong Kongwa&exhousting.; 

Like a godsend ; Raphael showed up wi&ifhzperfect cure for jet lag. 

Or roos it the buffer at TheSt. Regis? 



T he European union will 
seek concrete assur- 
ances from Tokyo this 
autumn that Japan will not 
respond to US pressure on 
trade by fovouring XS expodrt- 
ers at the expense, of European 
producers. _ •. 

I Sir Um. Brittafe-tije ;Euh>- 
| pean trade-, commissioner, - 
plans to. stress h&v' coacexp 
i about suc h jBa crimjbmfiCri dbn 
long-delayed, -•meeting on 
November W in Tokyo wtth a 
Japaaoese team- led by ^Mr Ryu- 
taro Hashhnoto, tee mfuister 
for international trade and 
industry. 

Though the EU still to 
formulate specific demands, 
commission, officials in Brus- 
sels say Sr Lean, is determined 
that the meeting agree practi- 
cal measures to ensure that 
any Japanese trade conces- 
sions to the US are also 
extended to Etrrope. 

“Sir Leon wffl be delivering a 
tadt ultimatum to (he Japar 
nese." one Official said. He 

ahr>g to upjflflne file wnprir .- 

tance of the meeting by taking 
wljh him sevmal other senior 
commissiflufr*- 
At last weekend’s Quad sum- 
mit in Los Angeles, Sir Leon 
taxed Mr 'Hashirnoto with sev- 
eral cases’ where, the EU 
believes Japan has accorded 
US suppliers preferential treat- 
ment for pohtical reasons. 

He is worried that such prao- 
tices may proliferate as Japan 
seeks to head off the threat 
that the US will dngfgnutg its 
trade practices as mrftrfr at the 
end of this nmnth and initiate 

trade sanctions proceedings 
under its Super 301 legislation. 
ATnnng tho imhinpM of 

apparent discrimination cited 
by the EU are: 

■ A sharp rise in the value of 
Japanese Imports of US cars 
and car parts in the first-half 


asm 


jjrr . . va. - -w^i 




9r Leon Brtttan: will be seeking assurances 


of this year, while imports 
from Europe fefl. 
i Japan Air lines 1 decision this 
year to buy Boeing 737-400 air- 
craft without seriously consid- 
ering the rival Airbus Am 

■ Japnnogfi ^r rlff y 1 wnwirtimf 

failure to specify Rolls-Royce 
aero-engines for tbair airline 
fleets. 

■ Exemption of US medical 
equipment from inspection pro- 
cedures Still applied to riwilar 
European exports. 

Several European govern- 
ments have expressed fears 
that their exporters may be 
squeezed out of the Japanese 
market 

Mr Edouard Balladur, the 
French prime minister, 
recently wrote to Mr Tomichi 
Murayama, his Japanese coun- 
terpart, demanding that 
Dassault be given equal treat- 
ment with US companies in 
bidding to supply support air- 
craft to Japan's self-defence 


JapaiNM/KU Trad* (9m) 


Exports 

ttepan) 

(to EU) 

Import* 
(EU to) 
(Japan) 

BaJanea 

Exports 

Import* Balano* 
Annual total* 

Q1 91 

15969.8 

8524.5 

7445.1 




02 91 

14596lS 

7536.0 

7060.8 




03 91 

14031 JO 

7S95.4 

6435.6 




04 91 

14959.8 

82784 

6681 JO 

59557.2 

31934.7 

276226 

01 92 

16815.5 

8034.0 

8581.5 




Q2 92 

15711.3 

7330.0 

8181.3 




03 92 

16141.5 

78699 

8271.6 




04 92 

143904 

7856.0 

64344 

62858.7 

31389-9 

314688 

Q1 93 

15621.9 

720X7 

8341.2 




Q2 S3 

14031.8 

7S0ZA 

6529.2 




03 93 

13857.0 

7688.0 

617a 1 




04 93 

13067.2 

7795JJ 

5291.4 

56597.7 

30265.8 

2633U 

01 94 

13968.7 

7671.0 

6317.7 




aumx oeco 


agency. The November meetr 
ing will pose a test of Sir 
Leon’s policy of extracting 
trade from Japan 

through patient negotiation, in 
contrast to the noisily aggres- 
sive tactics and threats of sanc- 
tions deployed by the US. 

The meeting follows a rebuff 


Japanese trade and industry minister Ryutaro Hashhnoto 


cases where Internationally 
successful European compa- 
nies had difficulty penetrating 
the Japanese market. 

However, the only substan- 
tive results so far have been a 
relaxation of its beer licensing 
rules and the establishment of 
joint industry groups to 
discuss cooperation between 
European and Japanese 
manufacturers. 

Successive Japanese govern- 
ments have also resisted EU 
proposals for ministerial-level 
trade talks. 

It has taken a year since the 
idea was reluctantly accepted 
by Tokyo to set up this Novem- 
ber's meeting. 

EU officials hope that, as 
well as securing Japanese 
commitments to equal treat- 
ment of European exports, the 
meeting will expand regular 
bilateral negotiations to a 
wider range of industry sectors 
and markets. 


by the US and Japan last 
spring of a proposal by Sir 
Leon that they should expand 
their bilateral trade talks to 
inpiiiHp the EU. 

Since last year, EU and Japa- 
nese officials have met regu- 
larly to try to identify and 
negotiate away obstacles in 


\ ' "y 


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HOTEL GlfelJP IN THE PHILIPPINES 

r ifi.t&t Of* 

- yi h/j n i|V~i i' j. -i *1 -J*;" 1 ■ -?■■■“ ■ t 1 , 

i^hangn-Lap Hotels and Res6it<v a Hong Kong baSeff Jfttel group, is. presently th^ 5 ' largest 
-. . international hotel management company in the Philippines, operating two hotels in Manila and 
' one in Cebu representing a total rooms inventory of 1,502. 

Shangri-La’s Edsa Plaza, a 'HO-room business hotel was the Group’s first hotel to open in the 
, Philippines in August 1992. Located in Mandaluyong, a new and fast growing business and 
”. commercial district approximately 15 minutes from the city’s well-established financial district of 
Makati, it was also the first international deluxe hotel to open in the capital for 16 years and 
signalled the start of a resurgence in the country’s tourism industry. 

The hotel is set in extensive landscaped gardens and offers a “Horizon Club" executive floor, wide 
choice of cuisine, fully-equipped Business Centre, and extensive conference, banqueting and 
recreation facilities. The hotel is marketed primarily to business travellers and the meetings and 
'. incentive market. 

In April 1993, the Philippines welcomed the opening of the 703-room Shangri-La Hotel, Manila, 
a deluxe hotel located on the comers of Ayala and Makati Avenues in Makati district. Here 
guests can enjoy two floors of “Horizon Club” accommodation, excellent international dining 
facilities, a 24-hour Business Centre and a well-equipped Health Club. A key feature of the hotel 
is its Grand Ballroom, the laigest in Makati, with a floor area of 1,300 square metres, 
accommodating up to L.750 persons for a cocktail reception and 1,200 persons for dinner. Nine 
. additional function rooms provide further flexibility for smaller meetings and banquets. 

The Groups third property, Shangri-La’s Mactan Island Resort, Cebu, opened in October 1993. 
Located on a beautifully landscaped 13 hectare site on Mactan Island, this 359-room resort offers 
magnificent views of the ocean and surrounding islands, and is only 15 minutes drive from Cebu’s 
international airport. The resort caters primarily to leisure travellers and families, but also 
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Key features of the resort include its exceptional recreational facilities with an extensive seawater 
sports centre in addition to a 350-metre private beach front. Three tennis courts, a swimming pool, 
fully equipped Health Club, a children’s playground and a pitch and putt golf course provide even 
further variety. 

The Shangri-La Group has grown rapidly since its establishment in 1983, increasing in size from 
.. . just five resorts, to managing 27 deluxe properties in Canada, China, Fiji, Hong Kong, Indonesia, 

. Malaysia, Philippines, Singapore, Taiwan and Thailand. 

’ V Further expah^dn is underway and within the next four years, the Group will open new 
5 properties in Inilonesia, Singapore, Malaysia, China and Myanmar (Burma), increasing its 
total number of properties to 35. . 

Over the years the individual hotels and management company have been honoured with 
• international awards and recognition from the world’s leading business, consumer and travel 
5 • trade publications. As a result, Shangri-La enjoys a distinguished reputation for providing 

-- deluxe accommodation a$d excellent service standards in a style that is warm, inviting and a 
reflection 1 of the best of Asian hospitality. As the Group continues to grow, these 
characteristics will always remain the same. 


. l7Tatu«lwwQ»™»i 

WIH AVWUeAT WIH STWET. NETYOK. 21 

TOR RSatVATlMiCAU.'n* ITT SM*ATON WOOJMhe* WWXMK3N OWICS 


frHECiBM*MXS43SOW 
VOUOn. YOUfcTMYELSFfiClMXSr 


. ' i 

jl: 



FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 


NEWS: THE AMERICAS 


Clinton calls for US 
‘to roll back violence’ 


By George Graham 
in Washington 

President Bill Clinton 
yesterday signed into law the 
anti-crime bill that Anally 
passed both bouses of Congress 
last month after a protracted 
and partisan battle. 

The bill will provide federal 
money to help pay for the hire 
more police officers, stiffen 
sentences for a variety of 
offences and tighten controls 
on some types of assault guns. 

But it also offers money for 
community development cor- 
porations, improvements to 
dly parks and recreation facili- 
ties and studies on sexual 
assault on college campuses 
and ‘'battered women’s syn- 
drome". “Let us roll up our 
sleeves and roll bach this 
awful tide or violence,” Mr 
Clinton said in a White House 


ceremony to mark the signing. 

He called the bill "a big step 
toward bringing the laws of 
our land back in line with the 
values of our people". 

However, the legislation is 
expected to damage US efforts 
to comply with its obligations 
under a number of interna- 
tional human rights conven- 
tions by increasing prison 
overcrowding and by placing 
the US further outside interna- 
tional norms for treatment of 
juvenile offenders. 

The bill coincides with the 
publication yesterday of a com- 
pliance report for the Interna- 
tional Convention, on Civil and 
Political Rights, which the US 
ratified in 1992, 15 years after it 
was first signed by President 
Jimmy Carter and 26 years 
after its unanimous adoption 
by the United Nations. 

In the preface to the report, 


Mr John Sha thick, assistant 
secretary of state for human 
rights, acknowledges “areas of 
concern" including police bru- 
tality, the treatment of prison- 
ers mid the death penalty. 

The US maintained a reser- 
vation to the covenant’s ton 
on the execution of juvenile 
offenders mid joins only Ban- 
gladesh, Iran, Iraq, Nigeria and 
Pakistan in continuing to 
apply the death penalty in 
some states for crimes commit- 
ted by juveniles. 

Mr Shattuck said Mr Clinton 
was now reviewing whether to 
sign the Rights of the Child 
convention, which provides 
further guarantees on the 
treatment of young offenders. 

But the crime bill signed yes- 
terday lowers from 15 to 13 the 
age at which juveniles may be 
prosecuted as adults for some 
crimes. 


Former treasurer Yillalpando 
jailed for federal tax evasion 


Ms Catalina Vilialpando, 
whose signature as US Trea- 
surer once appeared cm every 
dollar bill, was sentenced yes- 
today to four months in jail 
for conspiracy, tax evasion and 
obstructing justice. Renter 
reports from Washington. 

Ms Vilialpando, who was 
treasurer from 1989 to 1992, 
and one of the highest-ranking 
Hispanics in President George 
Bush’s administration, admit- 
ted that she had under-re- 
ported her taxable income in 
1989 by about £167,000, cheat- 
ing the US government out of 
more than $47,000. 

Judge Thomas Hogan 
rejected her pleas that she be 
spared prison. He said the sen- 
tence would “remind all those 
who serve in high office” that 
they are “not beyond the law". 

He also placed Ms Vilial- 


pando, 54, an three years’ pro- 
bation. During that time, she 
must spend the first four 
months in detention at home 
and perform 200 hours of com- 
munity service. 

The judge added that Ms VH- 
lalpando, who had also worked 
in the Reagan White House, in 
liaison to the Hispanic commu- 
nity in the US, had a “special 
burden to obey the law" 
because of her high govern- 
ment office. 

As part of her duties at the 
Treasury Department, Ms 
Vilialpando ran the the 
bureau of engraving and print- 
ing, and the savings bonds 
division. 

She took leave of absence 
from her post after the Federal 
Bureau of Investigation, in 
October 1992, had raided her 
home and an Atlanta telecom- 


munications firm. Communica- 
tions International, where she 
had previously worked. 

Ms Vilialpando has admitted 
filing falsA BtatMTwwte tO the 
Treasury department, the 
office of government ethics and 
the SgnatP ffwawna mmmiHiqe 
to conceal substantial Binds 
she received from her former 
firm in 1989 and 1990. • 

Ms Vilialpando, who cam- 
paigned for Mr Bush among 
Hispanics, could have received 
a maximum jail sentence of 15 
years and a $750,000 fine. 

Ms Vilialpando caused con- 
troversy at the Republican 
party convention in 1992 by 
caning Mr Bill Clinton, than 
Democratic presidential candi- 
date, and Mr Henry Cisneros, 
now housing secretary, “skirt 
chasers". Bush staffers forced 
her to apologise. 



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Quebec business warns against splitting , 


By Robert Gibbons fa Montreal 

Mr Ghislain Dufour, head of the 
Quebec Patron at employers’ organisa- 
tion, with more than 400 member com- 
panies, yesterday offered to cooperate 
with Parti QnAtaris leader Mr Jacques 
Parizean, but urged him to. focus on 
jobs, social problems, public finance 
and high taxes. 

“We differ with the PQ on many 
issues and our offer of co-operation 
excludes independence," he said. “Mr 
Parizean must end the constitutional 
uncertainty as soon as possible.” 

Quebec’s business leaden largely 
kept out of the election campaign, 
while privately backing Mr Daniel 
Johnson's Liberals. 

They opposed Mr Parfzeau’s promises 
to the big onions, such as public ser- 


vice job security, his high-spending 
policies and commitment to separation. 
Now they are forming a detailed strat- 
egy to swing the expected referendum 
against independe nce . 

Many business leaders yesterday 
urged the new Quebec government to 
put the economy first and get the refer- 
endum over as soon as possible. 

Mr Peter White, chairman of the 
Canadian arm of Mr Conrad Black's 
Bollinger publishing empire, said: 
“They must work on the recovery and 
competitiveness. The election results 
require than to put an honest question 
in a referendum wltirin 10 months.” 

“Hie PQ has a mandate to govern but 
not to lead Quebec into independence,'’ 
said Mr Michel Venuat, a lawyer-busi- 
nessman and Counsel for Canadian 
Unity chairman. “It must work with 


Ottawa and the other provinces and 
not isolate ttsdl" 

Mr John MrCwlliwii, the Royal Bank 
of Canada’s chief economist, said the 
PQ most co-operate with Canada or 
Montreal’s economy would suffer. 

Mr Robert Stewart, chairman of Scott 
paper, with several mills, said it would 
be “very serious” if the PQ assumed It 
had won a mandate for sovereignty. 

David Buchan reports from Paris: The 
French foreign ministry yesterday 
reacted to the Parti QudMcois election 
victory by restating its carefully, if 
inelegantly, warded policy of “non-in- 
difference and non-interference" 
towards relations between Canada and 
toe majority francophone province. 

Determined never to repeat General 
de Gaulle's incendiary call in 1987 of 
“Vive le Quebec Libre," France has 


since fried to avoid being seen to take 
sides between the Canadian and Que- 
bec governments. The foreign ministry 
spokesman said yesterday Paris "has 
followed the elections with interest" 
but would not comment on the result 

France, he said, had “a special Mstor- 
jcal as well as cultural relationsh ip*’ 
with Quebec, but at the same time 
intended to “pursue the development of 
its excellent relations” with Canada, 
whose government is headed at the 
moment by a French Cana d i a n . Prime 
Minister Jean Cfarttten. 

Quebec is not the only Canadian 
province to belong to La Francopbonie, 
Prance’s answer to the Commonwealth, 
which groups nearly 30 French-speak- 
ing states or regions. New Brunswick, 
which unlike Quebec is officially trilin- 
gual, also belongs- 


‘Two solitudes’ separate further 

Bernard Simon on growing polarisation in post-election Quebec 



Canadians 
voted this 
week, -for the 
second time In 
less than a 
year, to make 
E their country a 

4 more difficult 

place to gov- 
ern. By sweep- 
ing the separat- 
ist Parti 
Qudtocois into 

QUEBEC office in a pro- 

E LECTIONS vincial elec- 

tion, Quebeck- 
ers have reinforced 
polarisation between English 
and French-speaking Cana- 
dians, long described as Cana- 
da’s “two solitudes", which 
began in last October’s general 
election. 

Recession-weary voters 
broke with political tradition 
across the country last year by 
virtually annihilating two of 
Canada's three national par- 
ties. the Progressive Conserva- 
tives, which bad held office for 
nine years, and the left-leaning 
New Democrats. The third 
party, the Liberals, easily won 
the election. 

But the opposition benches 
in the federal Parliament are 
now filled with MPs from two 
regional groupings: the Bloc 
QufebGcois, which favours Que- 
bec independence, and the 
Reform Party, with its base in 
Bn gMah -ap aa king western Can- 
ada. Reform has little sympa- 
thy with bilingualism or Que- 
bec’s “unique" status as an 
outpost of French language 
and culture. 

Federalists took solace yes- 
terday from the relatively nar- 
row margin of the PQ’s victory 
in Quebec. Although it won 77 
of the 125 seats in the National 
Assembly, the PQ’s share of 
the popular vote was only frac- 
tionally ahead of the outgoing 
provincial Liberals. The sepa- 
ratists also won fewer seats on 
Monday than when they first 
took office in 1976. 

Mr Jean Chr&tien, Canada's 
prime minister, expressed a 
view likely to be heard from 
many federalist quarters in the 



PQ leader Jacques Parizean celebrates his party’s win; outgoing Liberal premier Daniel Johnson tastes defeat 


nahMKRwMMP 


months ahead “Throughout 
the election, the Parti Qu£b6- 
cois its leader again and 
again s tated that this pkytf rm 
was about a change of provin- 
cial government. Nothing 
else.” Mr Chretien said. “I am 
convinced that in the coming 
months Quebeckers win mice 
again demonstrate their pro- 
found attachment to being a 
fall part of Canada." 

The unexpectedly close 
result will undoubtedly compli- 
cate the PQ’s drive towards 
independence. The party's 
leader, Mr - Jacques - Parizean, 
has promised to hold a referen- 
dum on sovereignty some time 
in 1995, Even before the elec- 
tion however, there were signs 
of division in the PQ’s ranks 
about the referendum strategy. 

Mr Parizean sounded a con- 
ciliatory note in his victory 
speech on Monday night But 
he also vowed to press ahead 
with the PQ’s rmson d'ktre. “fix 
1995, we will go before Que- 
beckers and ask them the ques- 
tion that will make a people 
into a country," Mr Parizeau 
said. “We have begun a new 
chapter in our history." The 
PQ's drive to achieve that goal 
is likely to test Mr Chretien’s 


political sWTk to the limiti ■ 

The new government in Que- 
bec will have several weapons 
to put federalists on the defen- 
sive and win support for a 
“Yes" vote in the referendum, 
if and when it takes place. . 

Mr Parizeau plans to push a 
“solemn declaration 1 ’ through 
the National Assembly within 
the next few weeks expressing 
Quebec’s desire to start negoti- 
ations with Ottawa on sover- 
eignty. A committee will be set 
up to draft a new constitution. 
The PQ is likely to press for 
recognition internationally 
that Quebec is more than just 
one of Canada's 10 provinces. 

At home, Mr Parizean will 
lose no opportunity to point 
out the costs to Quebec of over- 
lapping federal and provincial 
jurisdictions, and of the slow, 
nften ineffectual, decision-mak- 
ing among the provinces. 

He noted in the d entirm cam- 
paign that the US, Canada and 
Mexico took only a few years 
to draw up a North. American 
free trade agreement, while 
Canada’s 10 provinces have 
been unable to dismantle their 
non-tarfff trade barriers in 127 
years of confederation. 

The PQ can count on support 


from the 54-strong Bloc Qufebfe- 
cols contingent in the Ottawa 
House of Commons. Mr Luden 
Bouchard, a former Canadian 
ambassador in Paris and now 
the BQ's leader, noted on Mon- 
day night that “we will now 
have two teams to demonstrate 
tiie cost of federalism.” 

Political observers expect the 
Liberal gtiuprnmpnt in Ottawa 
will do its best to a avoid a 
confrontation with the separat- 
ists for the next months. 
Instead, it is expected to go 
ahead with initiatives - such 
as social security and health- 
care reform.- which could 
demonstrate to Quebeckers 
that being part of Canada has 
benefits as well as costs. 

The problem is that the gov- 
ernment cannot put Quebec at 
the top of its agenda without 
running the risk of alienating 
the west The Reform Party, 
reflecting the views of many 
English-speaking westerners, 
takes the view that it would be 
better for Quebec to leave than 
to give it special treatment ~ 

Mr Chretien is expected to 
maintain a relatively low pro- 
file in the run-up to the refer- 
endum. IBs strongly federalist 
views and country-bumpkin 


image haw damaged bis credi- 
bility In his native Quebec. 
Liberals are also acutely aware 
that Mr Chretien needs to be 
seen as the entire country’s 
prime minister. Even before 
the Quebec election, the feder- 
alist forces had begun casting 
around for a suitable person to 
lead them in the referendum. 

The provincial Liberals' 
unexpectedly strong showing 
on Monday has boosted the 
reputation of their leader. Mr 
Daniel Johnson, who took over 
' as premier only ton* iiwntly 
ago. It would he surprising if 
Mr. Pierre Trudeau, the outspo- 
kenly federalist former prime 
minister, now in semi-retire- 
ment in Montreal, did not 
intervene at some stage. 

The man to watch however, 
Is Mr Jean Charest, the youth- 
ful Quebecker who is one of 
only two remaining Conserva- 
tive MPs in the House of Com- 
mons. Mr Cbaiest, briefly dep- 
uty prime minister last year 
undo: the ill-fated government 
of Ms Kim Campbell, is widely 
respected and some Liberals 
would probably be willing to 
allow him to hold centre-stage. 
The risk is he could revive the 
party. 


Dioxin research supports Agent Orange claims 


A US report saying dioxin is 
more likely to cause cancer 
than was previously thought 
should trigger more compensa- 
tion for veterans exposed to 
Agent Orange in the Vietnam 
War. activists said yesterday. 
Reuter reports from Hanoi. 

Admiral Elmo Zumwalt, 
head of a veterans’ committee 
on the Issue, said In Hanoi he 
would ask President Bill Clin- 
ton and congressional commit- 


tees to provide extra funds for 
research on effects of dioxin. 

The report by the US Envi- 
ronmental Protection Agency, 
released in Washington yester- 
day. strongly supported the 
veterans' cause, he added. 

Admiral Zumwalt, the most 
senior wartime US commander 
to visit Vietnam since the war. 
held talks last weekend with 
Vietnamese President Le Due 
Anh and former communist 


military commander General 
Vo Nguyen Giap, who master- 
minded the US defeat 
Admiral Zumwalt 73, carries 
special weight on the Agent 
Orange issue because of inti- 
mate involvement with its use 
and impact. He ordered it 
sprayed in southern Vietnam 
when he commanded US naval 
forces in Saigon in 1968-70, and 
became an activist for veterans 
after his son, a navy lieutenant 


who had been exposed to the 
chemicals in Vietnam, died of 
cancer in 1988. 

His associate. Dr Arnold 
Schechter of New York State 
University in Syracuse, said 
research in Vietnam was vital 
because ft bad the world’s larg- 
est contamination of dioxin. 

“This report ... concludes 
that dioxins are much more 
toxic in a number of different 
ways than had been thought to 


be the case previously and it 
opens, up new areas for com- 
pensation." he said. 

The EPA said dioxin was a 
potential cause of illnesses 
other than cancer even at' very 
los levels. These include devel- 
opmental, reproductive, hor- 
monal and immune system 
problems. 

He called for stricter regula- 
tion of industries that emit 
dioxins. 


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NEWS: THE AMERICAS 



Peru’s 
top lady 
to run 
for top 
job 

By Sefly Bowen bn Luna 


Ms Susana Higuchi, wife of 
President Alberto Fqjiraod and 
in recent weeks his most out- 
spoken critic, has rrnnocnoBrt 
that she win ran as an opposi- 
tion candidate for the presi- 
dency of Peru in the election 
due next ApriL 

Her decision - which Peru- 
vians were half-wanting, half- 
dreading - follows six weeks of 
public feuding by the presiden- 
tial pair. It will polarise the 
national political scene. 

Many Peruvians also teas; it 
will dead their country's, rap- 
fcfly improving international 
image with the spectre of insta- 
bility. 

Announcing both, her candi- 
dacy and the formation of- a 
new political movement - B ar-, 
many Twenty-first Century — . . 
Ms Higashi firmly regedted that 
interpretation. 

"Whqu I see so much comqv- 
tion, so many broken pledges, I 




y*«w ttmtyftjpg fptm fho <thai?mg nf Tn»r hnrftntMi, Alberta Fqfimnri, Srawia TOyndri pants to take the pregMwncy ftrnrn hfm 


feel the moral obligation to 
^-onfi-nryt the circles at 

political power,". dm said. “I 
wBl fulfil the conuratments my 
husband assumed, but with the 


Her hnnhsmri and his riding 
affiance may license her of efis- 
Joyalty, but her ft ta rt H mi , fihA 
said, is ^expose illegality, 
wncnnsH^ifajTi^nt y arW> corrnp. 

turn within fbe guyurmnent, 
rather than tboppase pahey. 

lu pa* weefs?; Ms 1 ffigndd 
has laid a- seodes -of legations 
before ■s^e^imj&ecators,;. 

' d^fnrnHr»g >'^p rfHd w'g cabinet' 

Ti»frri«dyT^ffTr -e«Tg-rT ^p ^f ^ /- - _ 

The darvssr^she^txamdaHis. 
have beenQBb ^v^s^^om^ 


says her private telephone is 
constmrtly tapped and that she 
is being prevented from seeing 
her four teenage children. 
Although early opinion polls 

do not indicate ranch public 
sup p ort for Ms Hignnhi, her 
c orrupti on alle ga ti o n s - if sub- 
St a n tfad e il- COuld damag in g 
to «n aM ate gi m which ha« 
vaunted itB honesty and “tech- 

■ nocratic^ anm nnA 

■ Besides,, with Mr Javier 
FfiPK'de/CnSlar, farmer UN 
secre ta ry - general, expected to 
announce -his. candidacy on 
September 23, whet once 
locked to be an easy tide to'. 
re-election for Mr Fujimori 
oould.be a'tough campaign. 

Mr Fuftnari, exasperated at 


the transformation into pbUtit- 
cal opponent of his onc^Ioyal 
wife, who was a finch-pin of 
his 1390 presidential campaig n t 
inm st ri p p ed her of her official 
title of First Lady. 

Ms HigncU has now moved 
out of the government palar-a 
to camp in a pre-university 
academy which she founded 
years ago with her husband. 
From there, she will run the 
-foundation for underprivileged 
children, over which she pre- 
sides - and her campaign. 

Th» H ar mo ny pnHtin il mnro. 

meat - the word "party" is 
gtni in Peru thanks both 
to previous political crises and 
systematic ifflBcrim of the 
party pnjfflral ay ste m by Mr 


Fujimori - is, as yet, an 
unknown factor. 

It seems to be rooted in a 
women’s group with backing 
from several respected feminist . 
lawyers who have been, helping 
Ms Hjgnrfii fo launch her polit- 
ical career. 

There remains a legal 
stumbling-block to a candidacy 
by Ms Higuchi. however. For 
her to run, the national elec- 
toral board, which is supposed 
to be independent, will have to 
quash a law, recently passed 
by the ruling Fujimori alliance, 
which prohibits relatives of the 
president seeking elective 
office in Peru. 

Ms Higuchi claims the law is 
lmiwngHfaiHniMl 


Two cheers fer 'Venezuelan growth plan 

Joseph Mann and Stepheft Fidler oh teactioii to a two-year economic reform programme 

• \ ■ " •• ’ r .V. - ’ ’ • ‘ 


w-C moderate optimism yesterday 
~!LI about a two-year economic plan 
TmvEoled by the Venezuelan govern- 
ment this week, but it was criticised by 
some as i turnffiriwitiy ambitious 
lacking detafl. 

The most common criticism sur- 
rounded the. plan's lack of precision 
about how the ambitious macroeco- 
nomic goals set for 1995 would be 
achieved and what controls on prices 
and foreign exchange transactions 
would be dismantled. 

The government said it would cut 
loos fnflatfan to 25 per cent from this 
year’s projected 65 per cent mainly by 
eliminating a stubborn fiscal deficit; 
achieve positive GDP growth ’ in 1995 
after two years cf recession^ and obtain 
ffih n or more from privatisations this 
year and next. 


• v • - •• 

-glf.afso indicated an. intention to 
jjsfoani'ihe, astern of employee sever- 
jhi^.bene^ts, a hmtbance to invest- 
fed^'-and- to raise domestic petrol 
prices, probably in 1995. - »* 

' Mr Jorge Redmond, president rfCon- 


. f ynit m in and ffro role of an independent 
central bark was not discussed. 

- He raised questions about the 
"extreme emphaus" given to prelec te d 
gwpi nmpirt revenues, a of refer- 
ence to pubhc sector spending cuts, mid 


industrial, an inringtriai association Ihe "moral risk" of refinancing the debt 


whose members represent around 7,000 
flomparries, called tiie plan “a step in 
- the Tight direction’’ and said it con- 
tained. "all the points required for eco- 
nomic recovery”. But he said: "We still 
need to see the ‘bow’ of the government 
programme". 

Mr Francisco Vivancos, a professor of 
economics at the Andres Bello Catholic 
University, called the plan "a good first 
step" «nd an approach to the 

country's economic problems. There 
was, however, no "explicit definition” 
of policies covering the exchange rate 
of the Venezuelan bolivar cor exchange 


of -troubled businesses rather than fink- 
ing state credits to successful compa- 
nies that increase productivity. 

Mr Carlos Rafael Sfiva, former minis- 
ter of ffnanra and ex-president of the 
central bank, asserted said the plan 
addressed “the major objectives of eco- 
nomic policy", but w orri ed that there 
was no "rafarpnee, to redDclxig govern- 
ment spending". 

Analysts at Bear Stearns in New 
Yack «dd the plan "fell short of the 
amhitifaw overhaul that we mig ht have 
hoped foe" There were "encouraging 
aspects” but the "absence cf concrete 


major reforms, combined with obstacles 
the Venezuelan gn wmmorrt is likely to 
encounter in trying to reach its goals, 
lmriq tut to stop abort of upgrading oar 
investment outlook for equities.” 

• The Venezuelan government has 
decided to take full control of Banco 
Cousofidado, one of the country's larg- 
est commercial banks, and several of its 
subsidiary companies. 

Consofidado began re ceiv i n g govern- 
ment financial assistance in early 
August 'Hie bank will remain open and 
will be run by government-appointed 
executives. 

The tatpn ppT means thi» government 
hag taken over three of Venezuela's 
four largest financial institutions since 
the hanking crisis began earlier this 
year. The government «dd Monday that 
17 of the country's 50 banks remain in 
critical fflwtitinn 


Brazil to 
cut wide 
range of 
tariffs 


By Angus Foster 
in Rio (to Janeiro 

Brazil Is to lower import 
tariffs on up to 13,000 hems, 
as part of tire government’s 
efforts to r i gid inflation. 

The tariff reductions were 
due to take effect from Janu- 
ary l. so as to coincide with 
thy yywriwf of the Mercosur 
trade pact’s customs union. 
Instead, the g o ve rnm ent win 
lower tariffs now to stimulate 
hnparts and stop domestic pro- 
ducers raising prices. 

Brazil’s maximum import 
tariff wiD fell from 35 per cent 
to 20 per cent, once the mea- 
sure takes effect, probably this 
week. The average tariff, 
which has been falling since 
the country started opening its 
economy to competition iu 
1990, will drop to 14 per cent, 
compared to about 20 per cent 
two yean ago. 

According to the finance 
ministry, increased imports 
wfll help add to domestic sup- 
ply and a ve r t bottlenecks in 
the economy. Since the new 
Brazilian currency, the Real, 
was laundied in July, inflation 
has fallen sharply and led to 
an increase in consumer 
spending. Some economists are 
now worried about possible 
shortages and price rites. 

TU gfrpr h n [ i iirhl will aim add 

to demand far US dollars. Ihe 
Beal is linked to the dollar 

but, yfaw* its frnmrfi, it fran 

appreciated 15 per cent 
against the US c urren cy as 
investment has flowed Into 
B razil This has mainly been 
directed at the stock market, 
where investors are excited 
about the prospects of the for- 
mer nMW< * nHnMw Mr Vam- 
ando Henri cjue Cardoso win- 
ning the presidential datim 
on October 8. 

The Real’s strength is 
st artin g to worry manufactur- 
ers, who say that exports 
could suffe r. 

The main sectors affected by 
the tariff reductions indude 
cars and consumer goods. The 
government has not accepted 
ean» for import quotas from 
Brazil’s car-makers, whose 
workers remained on strike 
yesterday over a pay ddm. 


US readies at 
home and at sea 
to invade Haiti 


By James HanHng 
in Was hin gton 

The US government yesterday 
took fresh steps to pave the 
way for an invasion Of Haiti. 
The defence department read- 
ied two aircraft-carriers for 
duty off Haiti and sent its two 
most senior defence officials to 
Congress to try to quell domes- 
tic opposition. 

The military and media prep- 
arations are avHrtwg specula- 
tion in Washington that, after 
weeks of vacillation, the 
administration has reluctantly 
committed itself to an invasion 
as early as next week, if the 
Haitian military leaders do not 
step down in the next few 
days. 

Mr Warren Christopher, US 
secretary of state, has 
appeared frequently on televi- 
sion in the past few days, 
explaining the reasons for an 
invasion and giving US credi- 
bility worldwide as the pri- 
mary justification. Mr Anthony 
Lake, national security 
adviser, yesterday echoed Mr 
Christopher, saying: "Our 
action in Haiti will send a mes- 
sage far beyond our region." 

On the Senate floor, how- 
ever, leading Republicans 
warned President BID Clinton 
a gainst In- parting Haiti. "It is 
time. Mr President, to put an 
end to gunboat liberalism," 
said Mr Dan Coats, a Republi- 
can on the Senate armed ser- 
vices committee. “There is no 


US national security interest at 
stake in Haiti and there is no 
reason to risk even one Ameri- 
can life." 

The strident attacks followed 
a letter to the Democratic con- 
gressional leaders, from promi- 
nent Republicans in the House 
and the Senate on Monday, 
demanding "an immediate 
opportunity to debate and vote 
on a resolution authorishv the 
employment of US armed 
forces in Haiti". 

Mr Thomas Foley, Speaker of 
the House, yesterday said: "It 
is possible there will be a vote 
- next week at the earliest." 

However, the administration 
is understood to oppose a vote 
for Tear of finding its foreign 
policy stymied by overwhelm- 
ing opposition in Congress. 
Instead, it intends to explain 
the reasons and plans for an 
invasion so as to win, if not 
the support at least the acqui- 
escence of Republican leaders. 

Mr William Perry, defence 
secretary, and Gen John 
ShallkashvilL chairman of the 
joint chiefs of staff, went to the 
offices of Senator Bob Dole. 
Republican minority leader, for 
dosed talks on the operation. 

The Pentagon has ordered 
the aircraft carrier USS Amer- 
ica, now docked in Norfolk, 
Virginia, to join the USS Eisen- 
hower in the military opera- 
tion. There are already more 
than 15 US Navy ships in the 
Caribbean. 


Cuban beaches empty as 
refugee ban imposed 


By Pascal Fletcher in Havana 

Beaches near Havana. Cuba’s 
capital, were deserted yester- 
day after the Cuban authorities 
reimposed a ban on illegal 
de partur es under an immigra- 
tion accord agreed with the US 
on Friday. 

"The fury seems to have 
passed,” an Interior Ministry 
police officer said at a beach at 
ttricfls del Mar, about 18 miles 
east of Havana. A few days 
before, Brisas del Mar and Coil- 


mar, another beach near 
Havana, had been crowded 
with makeshift rafts and boats 
as hundreds of refugees set off 
north across the Straits of Flo- 
rida. 

The Cuban authorities gave 
a 72-hour grace period ending 
midday yesterday for would-be 
rafters to give np their 
attempts. The authorities said 
force would be used after the 
dandling if necessary to halt 
illegal departures by sea to the 

as* 




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1IVE 






FINANCIAL TIMES 


WEDNESDAY SEPTEMBER 14 1944 


NEWS: INTERNATIONAL 


India economy 
expected to 
see 5% growth 


China’s 
trade 
surplus at 
$170m 


Grudging Vatican backs global agenda 


By Mark Mchoteon in Cabo 


By Stefan Wagstyi 
in New Delhi 


By Our Correspondent 
hi Beijing 


Real GDP gowth W 


The Indian economy U 
expected to grow by 5 per cent 
in the year to the end or March 
1995. thanks to a good mon- 
soon and a revival in industrial 
production, the Reserve Bank 
of India , the central bank, said 
yesterday. 

The RBI forecast, in its 
annual report was markedly 
more optimistic than at any 
time since the country 
embarked on economic liberal- 
isation in mid-lS91. It said that 
the Dow of new issues in the 
capital markets and increases 
in lending by long-term devel- 
opment banks indicated a jump 
In private investment after 
three years of stagnation. 

The report forecast growth 
in real terms of 3 per cent in 
agriculture, 7 per cent in 
industrial output and 10 per 
cent in private investment. 
These figures point to a consid- 
erable gain over last year when 
the economy grew by just 3 .8 
per cent. But the forecast eco- 
nomic growth rate of 5 per cent 
is still short of the 5.5 per cent 
achieved in the pre- 
reform 1960s and even further 
behind the rates achieved by 
India’s leading economic 
rivals. Including Indonesia and 
China. 

The central bank warned 
that inflation, ru nning at an 

annual rate of 9-10 per cent 
had to be cut by 4 percentage 
points and urged the govern- 
ment to reduce public borrow- 
ing by reforming taxation. 


2 1 -/' 


1889- 90- 91- 82- 93- 94- 
90 91 82 93 94 96 

ftactfyeam * Rome Bank foocsst 


improving expenditure con- 
trols and phasing out subsi- 


trols and phasing out subsi- 
dies, except for those aimed at 
the poor. 

In a strongly-worded pas- 
sage, the hank insisted the gov- 


ernment had to reduce its 
debts or else “sharply rising 
Interest payments could well 
crowd oat vital expenditures". 
It said interest payments 
would this year swallow 53.4 
per cent of government reve- 
nues, up from 39 per cent in 
1990-91. The bank urged the 
government to set "a finite 
time horizon" on efforts to 
reduce borrowing. It praised 
the government for reductions 
in the first few months of 
1994-95, due to a surge in tax 
revenues, but said more 
long-term efforts were needed. 

The bank estimated that the 
combined fiscal deficit for the 
central government and state 
governments together in 
1993-94 was 8.9 per cent of 
GDP, up from 7 per cent the 
previous year. The figures 
compare with a figure of 7.4 
per cent for the central govern- 
ment alone. 

The report also commented 
upon the recent increases in 
foreign exchange reserves, 
fuelled mainly by a rapid rise 
of foreign exchange inflows 
due principally to foreign port- 
folio investment 


Job quota move 
sparks violence 


By Stefan Wagstyl 


A strike called in support of 
lower caste demands for job 
quotas in the north Indian 
state of Uttar Pradesh yester- 
day passed off with sporadic 
incidents of violence in which 
three people were killed and 
250 injured. 

Shops were dosed in cities 
throughout the state and road 
and rati transport was dis- 
rupted. But public offices and 
banks mostly stayed open, 
according to reports from 
Lucknow, the state capital. 

The strike was called by the 
Bahujan Samaj party and the 
Samajwadl party, the state's 
ruling parties, which represent 
the lower castes and which 


came to office last year promis- 
ing to implement job quotas. 
Their attempts to put the 
pledge into effect has provoked 
inter-caste violence which has 
threatened to bring down the 
state government 

Violent incidents were 
reported from at least 10 differ- 
ent districts, including the 
Hindu holy city of Varanasi 
(Benares) and the industrial 
centre of Allahabad, where the 
police fired on demonstrators 
who charged court buildings. 

Mr Mulayam Singh Yadav, 
the chief minister, told a public 
meeting near the city of Gha- 
ziabad yesterday that job quo- 
tas would be implemented 
even at the cost of the collapse 
of his government. 


China posted a 8170m (morn) 
trade surplus in August, the 
first after more than a year of 
deficit, Chinese customs offi- 
cials said yesterday. 

The General Administration 
of Customs attributed the posi- 
tive trade report to the elimi- 
nation of the two-tiered foreign 
exchange system this year, 
according to a report in the 
official English lan guag e ewni 
Daily. 

In January, China moved to 
a single currency by eliminat- 
ing Foreign Exchange Certifi- 
cates (FEQ, which were traded 
to foreigners in exchange for 
hard currency at a rate of 
Yn5.8 to the US dollar. The reg- 
ular currency traded at Yn8.7 
to the US dollar. 

After three years of trade 
surpluses, China recorded a 
$l2.l8bn trade deficit in 1993 as 
economic growth of 13 per cent 
fuelled imports of oil, steel, 
machinery, aircraft, cars and 
electronic goods. 

The government did not 
report exact figures for imports 
and exports in August but said 
the $l70m surplus was a 
marked improvement over the 
$70m deficit of July and 
reflected new momentum in 
exports. 

Government and western 
economists had not expected 
the currency switch to forestall 
another trade deficit for China 
in 1994, because of rising prices 
and a continuing economic 
boom, but customs officials 
reported that the yuan’s effec- 
tive devaluation had made Chi- 
nese exports more competitive 
and imports costlier. 

For the first eight months of 
1994 exports surged 31.5 per 
cent to $58.95 bn and imports 
climbed 18.3 per cent to 
$S&85bn. 

Customs officials reported 
that China's trade with Japan, 
Hong Kong, the US and the 
European Community, Taiwan, , 
South Korea. Russia and mem- 
bers of the Association of 
South-east Asian Nations 
totalled $118.78bn or 86.2 per 
cent of overall trade volume 
during the first eight months 
of this year. 


The vast majority of the 
world’s governments yester- 
day ended tone gruelling days’ 
negotiations by endorsing a 
far-reaching global pro- 
gramme to stabilise popula- 
tion growth into the next cen- 
tury which places enhanced 
womens’ rights at its heart. 

The Vatican and a core of 
hardline Roman Catholic 
states said they con Id not 


embrace critical parts of the 
International Conference on 
Population and Development’s 
113-page final document bear- 
ing on abortion and other 
Issues anathema to Roman 
Catholicism. Argentina, Ecua- 
dor. Pern, Malta and the 
Dominican Republic joined the 
Holy See in its reservations. 

In a statement to the closing 
plenary, Archbishop Senate 
Martino, head of the Vatican 
delegation, mid the Holy See 


wished “in some way. to join 
the consensus even if in an 
incomplete or partial man- 
ner,” bat could not endorse 
substantial parts of the text, 
particularly those governing 
abortion and those “seen as 
accepting extra-marital sexual 
activities”. 

"Nothing the Holy See has 
done in this consensus process 
should be interpreted as an 
endorsement of concepts it 
cannot support for moral rea- 


sons. Especially nothing is to 
be understood to imply that 
the Holy See endorses abortion 
or has in any way changed its 
moral position concerning 
abortion, or on contraceptives, 
or sterilisation or the use of 
condoms in HIV AIDS preven- 
tion programmes.” 

Several Moslem countries, 
fantaifing Iran, Libya, Algeria, 
Syria and Afghanistan, stated 
reservations to parts of the 
final text, especially refer- 


ences to -reproductive health" 

services for "individuals , 
bolding such languaseto 
endorse adolescent and extra- 
marital sex. 

The document was greeted 
by womens’ rights activists as 
a big advance on the 1974 and 
1984 UN population confer- 
ences. "I think we won a vic- 
tory here." said Mrs Francis 
Kissling, president of Catho- 
lics for a Free Choice, a US 
lobby group. 


Cairo hits new note on population 


But whether pledges will be kept remains open, Mark Nicholson writes 




China 


Trade batence pbn) 

10 — ■— * 


AaS» 

Devotoprrwot . 

Bank- fo recast 


1889 90 91 92 93 94 
Source; EHVABD 


• Any attempt to gather 
the world's nations and 
forge in dear language, 
acceptable to all cul- 
tures, religions and tra- 
ditions a 20-year pro- 
gramme for government 
policies bearing on 
human beings' most 
Intimate behaviour was 
always going to be 
ambitious. But the International Con- 
ference on Population and Development 
has, to Ok broad satisfaction of the vast 
majority of more than 150 governments, 
managed to agree an international doc- 
ument which meets thta extraordinary 
goal 

There were reservations to words tn 
the text from some Moslem countries 
and the predictable objection of the Vat- 
ican and its staunchest Catholic allies 
over abortion and related issues. But 
few in Cairo felt these had detracted 
from the central thrust of the confer- 
ence’s document, which provides a com- 
plex. and costly, global programme of 
action for stabilising world population 
growth beyond the year 2000. 

There is nothing new about the prob- 
lem Cairo addressed. As the text's pre- 
amble wplaina, the world’s population 
will have risen from the present 5UJbn 
people to between 7.8bn and 12.5bn by 
2050, according to low and high vali- 
ants of present UN projections. Only 
implementation of the text’s pro- 
gramme would keep population growth 
close to the low variant, it states. 

What is new from. Cairo (“revolution- 
ary", according to some) is the shift in 
emphasis in the means of stabilising 
population growth: away from a mecha- 
nistic focus on sheer numbers and the 
simple provision of family planning ser- 
vices towards a "holistic" developmen- 
tal attack on population problems 
which places enhanced womens' rights 
at its core. 

As the text puts it, the programme 
"commits the international co mmunit y 
to quantitative goals in three areas that 
are mutually supporting", which It 
states as “education, especially for 
girls; infant, child and maternal mortal- 
ity reduction, and the provision of uni- 
versal access to family planning and 
reproductive health services". 

To the delight of the myriad womens’ 
groups lobbying the conference, very 
few states quibbled with the docu- 
ment’s focus on the “empowerment" of 
women, even though such feminist lan- 
guage and the rights implicit in the 
term were unfamiliar, even alien, to 
many states. 

Far more contentious was the defini- 
tion of “reproductive and sexual 
health”. For many Moslem countries 
this new concept was at first too laden 







Sadik Nalls, secretary general of the United Nations population conference, 
t elling the press yesterday that the Cairo meeting had been a success aomumami 


with connotations of licentiousness to 
be acceptable, and much of the negotia- 
tions focused on stripping from this 
concept any offending ambiguities 
while retaining what mostly western 
health professionals considered to be a 
vital international definition of an 
essentially new area of health care. 

It was a shift, said one, from a focus 
on the “plumbing" of reproduction to a 
broader conception of maternal health 
and women's rights, along with an 
acknowledgment of the “pleasures sex- 
ual life can give". 

In the end, said one delegate, the Mos- 
lem participants “totally understood” 
the concept, and endorsed it Indeed, 
western negotiators had nothing but 
praise for their Moslem counterparts, 
notably Iran, Egypt and Pakistan, 
which a European delegate called “con- 
scientious, trustworthy and informed”. 

For the Vatican, and a handful of 
hard-line Roman Catholic states, how- 
ever, the concept of “reproductive 
health" could be stripped of what, in 


their view, amounted to endorsement of 
abortion. These countries stood alone, 
since, despite pre-conference talk of an 
“unholy alliance" between the Vatican 
and some Moslem states, none took 
shape. Abortion in most Moslem coun- 
tries is, anyway, permitted when the 
mother's life is at risk. - 

The Holy See’s chief intent in Cairo 
was to prevent the document from 
being open to the interpretation that it 
enshrined a right to abortion. Its 
dogged fight did at least succeed in 
keeping the issue at the centre of nego- 
tiations an week, much to the chagrin 
of numerous developing countries 
which had wanted the focus placed 
more firmly on the “development” part 
of the conference's title. 

A whole week was spent anguishing 
over one paragraph ( 825 ), which stated 
that whOe abortion should not be pro- 
moted as a method of family planning , 
governments should nevertheless 
address it as an important health con- 
cern. 


Why Japan’s Socialists had to drop 
their political baggage of the 1940s 


Banks raise 

lending 

rates 


US and N Korea 


talk in Pyongyang 


It is the latest step in erosion of the old political structure, writes William Dawkins 


By Gerard Baker to Tokyo 


By John Burton in Seotk 


Japan's Socialists yesterday 
completed a belated high-speed 
turn to the right, having taken 
just a few weeks to cover the 
same ideological ground as 
their European counterparts 
did in decades. 

Their conversion to the cen- 
tre ground was perfected when 
the cabinet of Socialist Prime 
Minister Tomiichi Murayama, 
a profound pacifist, agreed to 
send troops, albeit lightly- 
armed ones, to help Rwandan 
refugees in Zaire. 

This is the same man who 
only two years ago led his 
party in an “ox-walk” on the 
floor of parliament, waddling 
up to the ballot box at snails' 
pace to delay a vote on sending 
troops to assist the UN in Cam- 
bodia, the first overseas mis- 
sion by Japan’s military since 
the second world war. 

The Social Democratic par- 
ty’s change in strategy was 
made official at an extraordi- 
nary party convention two 
weeks ago, in which members 
dumped the party's traditional 
insistence that Japan's mili- 
tary action was unconstitu- 
tional and abandoned the par- 
ty's formal wish to tear up the 
US-Japan security treaty. 

It is the latest step in the 
erosion of the old structure of 
Japanese politics over the past 
year. The immediate aim of the 
Socialists' about-turn Is to fit 
closer with the conservative 
Liberal Democratic party, the 
government coalition’s senior 
partner. The LDP was the 
SDP's adversary for nearly 40 
years until they joined forces 
at the end of June. 

But irrespective of the exi- 
gencies of running a coalition 
with the conservatives, the 
SDP’s outdated policies had 


Japan's governing coalition of 
Socialists and conservatives 
yesterday decided to send 470 
soldiers to Zaire and Kenya, to 
help Rwandan refugees, 
Wiliam Dawkins reports from 
Tokyo. 

The three-month mission, to 
start on Saturday, is the third 
post-war use of Japanese 
troops abroad since Japanese 
participation in United 
Nations peacekeeping in 
Cambodia and Mozambique 
over the past two years. 

Japan's African mission, in 
response to a request from the 
UN High Commissioner for 
Refugees, coincides with the 
relaunch of its hesitant bid to 
become a permanent member 
of the UN security council, the 
biggest test of Japan's will to 
assume international 
responsibilities equal to its 
economic weight. 

A cabinet meeting yesterday 
gave Mr Yohei Kona. foreign 
minister, clearance to voice 
Japan's wish for membership 
at a speech to the UN on 
September 27, on condition 
that Japan does not use force 
on UN duties, in line with its 
constitutional ban on using 
force to settle foreign disputes. 


Japan 


Union membership 
96 af workforce 

40 - - - » 


SPOJ 

Sente in lower house 

: —a — iso 



Sowce: Labour MUs&y & SPOJ. 


been overdue for change. Its 
ideology had remained more or 
less the same since the 1947 
administration of Mr Tetsu 
Katayama, Japan's only Social- 
ist prime minister until Mr 
Murayama won power by unit- 
ing with his old foes, the 
LDP. 

The SDP’s pacifist anti-US 
formula has held decreasing 
interest for Japan's electorate 
since the end of the Cold War. 
In Mr Kateyama’s day, the 


then Japan Socialist Party had 
143 seats in the lower house of 
parliament, down to 136 by the 
turn of tins decade. Last year’s 
general election, in which the 
LDP lost power, nearly halved 
the Socialists' par liamentar y 
seats to a mere 70. 

Union membership has 
similarly slid, from 56 per cent 
of the workforce in 1949 to 24.4 
per cent in 1992, well below 
European levels. Union 
leadership has been thrown 
into turmoil by the recent 
resignation of Mr Akira 
Yamagishi, founding father of 
Rengo. the union con- 
federation. 

Yet the Japanese Socialists' 
transformation hag been quite 
different to the swing to the 
centre over the past decade by 
its European counterparts. 
Unlike in Europe, social policy 
has played no part in the 
change. 

Japan's SDP has always laid 
more emphasis on foreign and 
defence matters and less on 
social policy than European 
socialists. The Socialists have 
never taken the initiative in 


traditional left-wing subjects, 
such as social policy, consumer 
affairs or environment Social 
affairs have tended to be the 
preserve of the LDP. 

This may be because Japan's 
SDP, unlike the conservatives, 
lacks well-funded think-tanks. 
Until becoming a member of 
the government a year ago, the 
SDP did not need such things, 
because its leaders had become 
used to a comfortable working 
relationship with the LDP 
during Japan's long period of 
one-party conservative rule. 

SDP and LDP politicians 
informally overcame 
differences in a little-known 
parliamentary body, the oddly 
named “counter-measures" 
committee. In this forum the 
Socialists were able to push for 
important legislation on 
pensions and medical 
insurance, adjusted and 
adopted by the LDP as its own. 

So it is little surprise that 
the LDP is today miring the 
lead on the biggest social issue 
facing Japan: how to provide 
for the growing number of 
pensioners. Here, the SDP is 


following social policy of a 
kind by opposing the finance 
ministry's plan for a rise in 
sales tax, designed to cope 
with the “grey wave” but also 
likely to hit the low-paid. 

The LDP is sympathetic to 

Hw finance minis try Hnp, tha t 
a rise in indirect tax is needed 
to compensate for the fall in 
the income tax base caused by 
an ageing population. 

The tax debate shows that 
despite the abandonment of its 
other policies and the disarray 
of the union movement, the 
SDP is not on. the brink of 

disintegration. “The SDP is 
behaving like a sponge, just 
absorbing the shocks,” says Mr 
Takashi Inoguchi, professor of 
politics at Tokyo University. 

Its other strength during the 
turmoils of the past year has 
been to maintain the party's 
unity just enough to provide 
the swing votes that dictate 
the balance of power. 

The SDP made It possible for 
Mr Morihiro Hosokawa and his 
allies to put together the first 
non-LDP government since 
1955 last year. In June, the 
Socialists’ decision to ally with 
the LDP brought down the 
ensuing coalition of Mr 
Tsutomu Hata. 

Yesterday's evidence that 
the SDP is getting more 
capable of operating as a 
government party means its 
odd marriage with the LDP 
may last longer than first 
seemed likely. Analysts think 
the government may be able 
hold off the next general 
election for a year or more. 
The SDP's success in throwing 
off its old policies means 
Japanese politics may be 
passing from upheaval to 
relative stability. 


Japan’s leading banks will 
today raise their long-term 
prime lending rate, the rate 
charged on loans to their most 
creditworthy customers, by 04 
percentage points to 4.9 per 
cent, the second increase in lit- 
tle over a month. 

The decision, announced yes- 
terday by 11 big commercial 
banks, reflects the sharp rise 
in bond yields since the start 
of the year. 

The yield on the govern- 
ment’s 10-year benchmark 
bond has risen from &J2 per 
emit in January to 45 per cent 
this week as Investors have 
grown increasingly optimistic 
about the c ountry’ s economic 
prospects, and more fearful of 
resurgent inflation. 

That improving confidence 
was reflected tn figures pub- 
lished yesterday by the gov- 
ernment's Economic Planning 
Agency (EPA) that suggested 
the long slump in capital 
spending may be ending. 

Private-sector machinery 
orders, excluding orders for 

ships and from electric power 

companies, declined by a sea- 
sonally-adjusted 5.8 per cent 
in July from the previous 
month, to a total of Y895.4bu 
(£5.?9bn). The figure repre- 
sents a rise of 2.6 per cent on 
July last year. But an EPA 
spokesman said the longer- 
term trend suggested capital 
spending was on course to rise 
l.l per cent in the current 
quarter compared with the 
previous three months. 

That optimistic assessment 
was supported by a Japan ' 
Development Bank survey 
published yesterday showing 
companies expect their capital j 
investment to fall just 2.4 per ! 
emit in the year to March. I 


The US and North Korea 
yesterday ended what were 
described as “serious and co- 
operative" talks in Pyongyang 
about the establishment of liai- 
son offices as a teat step to 
diplomatic relations. 

The US is offering improved 
relations in return for North 
Korea accepting full interna- 
tional nuclear inspections and 
a stop to its current nuclear 
programme. 

The discussions in Pyong- 
yang, which began on Satur- 
day, have focused on technical 
matters such as selecting a 
location for the US office in 
North Korea. But no details 
about the talks were disclosed 
in a short joint statement 

A decision on whether to 
proceed with the liaison offices 
will come after the US and 
North Korea resume high-level 
negotiations in Geneva on Sep- 
tember 23 to settle the nuclear 
dispute. 

North Korea offered several 
conciliatory gestures yester- 
day, indicating satisfaction 
with talks with the US. It 
returned the remains of 14 US 
soldiers killed during the Kor- 
ean war and allowed Interna- 
tional Atomic Energy Agency 
experts access to a fuel fabrica- 
tion plant and a fresh fuel stor- 


age building they had previ- 
ously been barred from. 

The US and North Korea are 
also meeting in Berlin this 
week to discuss the means to 
deprive Pyongyang of the abil- 
ity to produce weapons -grade 
plutonium from its nuclear 
programme. 

The measures include con- 
verting the North’s nuclear 
programme to safer light-water 
re actor s, providing alternative 
energy during the 10 -year con- 
version process, and the final 
disposal of plutonium-rich 
nuclear fuel rods recently 
removed from the North’s 
BMW reactor. 

One stumbling block to the 
successful outcome of the Ber- 
lin talks is the North's insis- 
tence that the new light water 
reactors should be provided by 
Russia, since it has had experi- 
ence operating SovLefrdesigned 
reactors. 

Instead, the US and South 
Korea want the North to 
accept US-designed reactors 
being used by Seoul. South 
Korea has said it frill refuse to 
finance the bulk of the esti- 
mated $4bn (£2.6hn) project 
unless its companies are 
involved in the programme. Mr 
Robert Gallucri, the chief US 
delegate to the Geneva talks, 
will arrive in Seoul today to 
discuss the issue. 


Australia port strike ends 


By Nikki Taft fri Sydney 


The six-day shutdown of 
Australia's ports ended yester- 
day, with maritime union 
members agreeing to return to 
work after Canberra reversed 
its decision not to sell Austra- 
lian National Line. 

The government had 


announced plans to privatise 
the business, but last month 
declared “it couldn't be given 
away". This prompted union 
fears that it was to be wound 
down, triggering the shutdown. 
Yesterday, the government 
said it would put the line up 
for tender, subject to Austra- 
lian Labor Party approval. 


* 


But Cairo closed with the Vatican’s 
opponents claiming victory. As even 
one Holy See delegate admitted rue- 
fully. having had 30-40 states behind it 
before the conference, it ended with 
just a handful or hardline allies. 

Moreover, as Mr Nicolaas Biegman, 
Dutch ambassador to the UN put it 
“The Vatican was not able to turn the 
spirit of the document, because its 
spirit is individual choice and giving 
individuals the right to plan their fami- 
lies in their own way, including with 
contraception". 

Whether such lofty concepts translate 
into action in the shanty-towns of Rio 
or the slum suburbs of Cairo Is, of 
course, the $l7bn question - the sum the 
document says must be devoted to 
reproductive health programmes world- 
wide in 2000, rising to $2I.7bn (£14.4bn) 
In 2015. 

Donor countries such as the US, UK. 
Japan and others pledged more money 
at the conference to such programmes, 
but the pr ogramm e of action places the 
burden of resources, same two-thirds of 
the total, on countries to provide them- 
selves. Whether this burden will be car- 
ried remains an open question, particu- 
larly in the poorest countries where 
population growth is greatest 

But many at the conference argued 
that the nit-plckingly-argued language 
of the document already would, in fact. 
mafcp a difference. 

According to Ms Susanne Ranee, a 
member of the Bolivian delegation and 
head of the Bolivian Reproductive 
Rights Committee, an internationally- 
agreed text on "reproductive rights" 
would provide a powerful shield for her 
own non-governmental organisation 
and the Bolivian government against 
what she said had been persistent 
attacks by the local Catholic church on 
their family planning programmes. 

“They bad been arguing that our pro- 
grammes were coercive. Now we cun 
point to the document and say these are 
fundamental health issues and interna- 
tionally backed,” she says. . 

Other delegates saw the worth of the 
conference in having simply forced 
more than 150 countries to concentrate 
on their own population policies. “It’s 
just bound to freshen every govern- 
ment's mind on the subject." one Cana- 
dian delegate said. “That’s achievement 
enough and had occurred before the 
thing even opened." 

The effects of Cairo 94 cannot prop- 
erly be assessed now. or perhaps until 
the next UN population conference 10 
years hence. One certainty is that the 
world’s population is set to grow by at 
least 90m a year until then. Whether 
the Vatican’s message will be so clearly 
heard then, above the millions of new 
voices is perhaps less sure. 


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FINANCIAL TIMES WEDNESDA Y SEPTEMBER 1 4 1 994 


NEWS: INTERNATIONAL 


.Nepal faces fresh round 
of riots and upheaval 






By Stofan Wagstyl rn 

New Delhi 


N epal Is in the midst of 
Its most severe politi- 
cal upheaval since 
1990 when riots in Kathmandu 
led to the overthrow of a royal- 
ist autocracy and the establish- 
ment of a democratically- 
elected government 
The troubles began in July 
when Mr Girija Prasad Koirala. 
the prime minister, lost a vital 
vote in the assembly, dissolved 
parliament and called a sur- 
prise general election for 
November. 

Demonstrators supporting 
the dissidents and the Nepali 
Communist Party (United 
Marxist Leninist), the main 
opposition party, protested 
when Mr Koirala also suc- 
ceeded in persuading King Bir- 
endra to retain him in a "care- 
taking" capacity. The prime 
minister's enemies fear he 
could use his position to 
manipulate the coming elec- 
tions, 

Nepal is bracing itself for 
another round of violent dem- 
ta onstrations after dissidents 
and the opposition faile d this 
week to persuade the Supreme 
Court to restore the old parlia- 
ment 

The crisis is partly a product 
of internal wrangling in the 
Congress party and partly a 
reflection of a deeper malaise: 
frustration that three years of 
democracy have yet to gener- 
ate real social and economic 
gains for most Nepalis. 

Mr Koirala recognises the 
problem. "It isn't possible for a 
poor country like Nepal to sat- 
isfy all the aspirations of the 
people," he told the FT in an 
interview. "The transition 
(from autocracy to democracy) 
is a hard time for the govern- 
ment" 

Mr Koirala’s ruling Nepali 
Congress party came to power 
after riots in Kathmandu in 
1990 led to the overthrow of 
King Birendra’s royalist autoc- 


N-states 
facing 
pressure 
on treaty 


PAKISTAN • DeW . 


K at hma ndu 


”• . < ■ - Bombay 


racy and the holding of the 
country's first free elections in 
May 1991. The king became a 
constitutional monarch. 

But a party forged in decades 
of anti-government struggle 
had trouble adjusting to run- 
ning an administration. The 
three elderly men at the helm 
of Congress, Mr Koirala. aged 
70. Mr K. Bh attarai, the party 
president, also 70, and Mr 
Ganesh Man Singh, the party 
supremo. 80, could not agree 
on sharing power. 

T he rows came to a head 
in February when Mr 
Bhattarai, who is not a 
member of parliament, failed 
to win a seat in a by-election 
and blamed Mr Koirala for his 
defeat. Mr Bhattarai. supported 
by Mr Man Singh. led an 
increasingly vocal campaign 
against Mr Koirala. which 
eventually resulted In a parlia- 
mentary defeat for the prime 
minister over the annual devel- 
opment p lan. 

The co mmunis t party and 
other groups on the extreme 
left hope to make gains in the 
election. But observers believe 
the beneficiary of the turmoil 
could be the small royalist 
party on the right which is 
capitalising on a modest wave 
of support for King Birendra. 

The winner will inherit an 
economy which, has made mod- 
erate progress in recent years. 
Mr Koirala's government has 
actively pursued pro-market 


Manila 
impresses 
mission 
from IMF 


By Frances Williams In Geneva I By Jose Galang in Manila 


The five declared nuclear 
weapons states are under 
growing pressure to begin 
negotiations on comprehensive 
nuclear disarmament to ensure 
renewal of the Nuclear Non- 
Proliferation Treaty. Delegates 
from more than 100 countries 
are meeting in Geneva this 
week to prepare for the NPT 
extension conference to be held 
next spring in New York. 

On Monday seven non- 
aligned countries - Colombia. 
Egypt, Indonesia, Iran, Mexico, 
Myanmar (Burma) and Nigeria 
- called on the nuclear powers 
to commit themselves to elimi- 
nate nuclear weapons "within 
a time-bound framework”. 

This call was backed yester- 
day by two former American 
and Soviet disarmament nego- 
tiators, Mr George Bunn and 
Sir Roland Timerbaev, who 
argue that the nuclear weap- 
ons states - the United States. 
Russia, Britain, France and 
China - have failed to fulfil 
their side of the non-prolifera- 
tion bargain. 

Under Article 6 of the NPT, 
signed in 1968, the five under- 
took “in good faith" to negoti- 
ate an end to the nuclear arms 
race and eventual nuclear dis- 
armament A number of devel- 
oping countries have made an 
indefinite renewal of the NPT, 
desired by western nations, 
conditional on progress 
towards these goals. These 
include conclusion of a com- 
prehensive test ban treaty now 
being negotiated in Geneva. 


The Philippines has received 
high marks from a visiting 
International Monetary Fund 
(IMF) team completing the 
first review of the country’s 
performance under a new eco- 
nomic programme. 

Mr Khadim AJ-Eyd, head of 
the mission, said at the end of 
his visit yesterday that the 
Philippines economic growth 
rate could reach S per cent this 
year. 

The IMF last June approved 
a 8684m credit support for the 
Philippines' growth-oriented, 
three-year economic pro- 
gramme. 

The mission said it was 
impressed by the strength of 
the Philippines recovery, thus 
far led by investment and 
exports. Bolstered by strong 
showings in the manufactur- 
ing and agricultural sectors, 
the Philippines economy grew 
by 5.1 per cent in the first half 
of this year, more than double 
its record for the same period 
last year. 

The IMF also announced 
that Hr Michel Camdessus, the 
IMF managing director, will 
visit Manila on October 16-18, 
at the invitation of the Philip- 
pines president, Mr Fidel 
Ramos. 

Meanwhile, the World Bank 
has approved a S227m loan for 
a Philippines geothermal 
energy project, which is sup- 
ported for the first time by the 
bank’s reformulated co-financ- 
ing operation. The project is 
on the island of Leyte. 


Kazakhstan plan 
to move capital 


By John Thornhill in Moscow 

Several government ministries 
based in Alma Ata, Kazakh- 
stan, are preparing to move to 
Akhmola as the impetus to 
change the country’s capital 
gathers pace. 

Mr Nursultan Nazarbayev, 
Kazakhstan’s president, has 
repeatedly advocated moving 
the capital to Akhmola, a more 
central location. 

The move may also help 
counter calls from Russian 
nationalists in the north of the 
country to unite with the 
motherland. 

Akhmola. formerly known as 
Tselinograd. is located about 

1,000km north of Alma Ata, 
which is tucked away in the 


south-eastern corner of the 
country. Western diplomats in 
Alma Ata suggest that chang- 
ing the capital would radically 
shift the country's political 
centre of gravity. 

"The political implications 
are extremely sensitive 
because it moves the capital 
close to the Russian elements 
in the north of the country." 
said one diplomat "The Rus- 
sians account for about 35 per 
cent of the country's popula- 
tion but at present they feel 
physically separated from the 
capital in the south-east" 

Western executives based In 
Almaty are worried that mov- 
mg the capital would add 
another layer of complexity to 
doing business. 


economic reforms. Although 
less developed than India, 
Nepal has moved faster than 
its huge neighbour in impor- 
tant areas, notably privatisa- 
tion. Seven state-owned busi- 
nesses have been sold to 
entrepreneurs, including a 
brickworks and a tile factory. 

Mr Koirala has also cut gov- 
ernment borrowings, reduced 
inflation to below 10 per cent 
and reformed the electricity 
industry to put it on a commer- 
cial footing. He expects soon to 
sign an agreement with the 
World Bank to build a contro- 
versial {760m (£506m) hydro- 
electric dam on the Arun 
River. The scheme, which 
some Nepalese think is 
over-ambitious, would be 
Nepal's single largest invest- 
ment 

Despite these gains, the 
country continues to face 
daunting economic challenges, 
above all Improving the lot of 
its 19m people, half of whom 
live in poverty and one-third of 
whom are illiterate. Only 10 
per cent of Nepalls get electric- 
ity. 

After two years of slow 
growth caused by drought, the 
economy rebounded sharply in 
the year to July 1994, recording 
growth of 7.7 per cent. But 


with the population growing at 
2.1 per cent a year. Nepal 
needs a faster rate Of growth to 
generate sufficient resources 
for public investment 

Foreign aid, running at 
$300m annually, remains a 
vital resource. 

Exports, which totalled 
about 8400m in 1993-94, are 
growing fast, mainly due to the 
rapid rise in sales of hand- 
knotted carpets and 
ready-made garments. But the 
carpet Industry Is plagued by 
negative publicity about child 
labour. 

Tourism also contributes 
steadily to foreign earnings, 
though tour operators have 
failed to promote Nepal suc- 
cessfully as an up-market des- 
tination. They complain that 
the crowds of back-packing vis- 
itors do not spend enough. 

Land-locked Nepal's high 
transport costs make develop- 
ing competitive industries diffi- 
cult, despite low wage costs. 
Trade and investment must 
come from India, but the Nepa- 
lese fear that opening their 
doors wider will lead to exces- 
sive Indian influence. Mr Koir- 
ala has been criticised, for 
example, for an agreement 
with India over sharing power 
from a dam on the border. 


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Par amili tary police watching strikers In the Bangladeshi capital, Dhaka, yesterday during the nationwide work stoppage 

BANGLADESH PROTEST STRIKE TURNS TO VIOLENCE 


Nearly 50 people were injured by bombs 
and stone-throwing in scattered violence 
during the third day of a strike in Bangla- 
desh yesterday. Reuter reports from 

rihalra 

The main clashes were In the capital, 
Dhaka, and the port city of Chittagong. 
The work stoppage has been called by the 


main opposition party, the Awami 
League, and its allies, the Jatiya party 
and fundamentalist Jamaat-e-Islaml, to 
press demands for the government to 
resign and hold new elections. 

The opposition accuses the government 
of prime minister Begum Khaleda Zia of 
being inefficient, partisan and corrupt. 


The ruling Bangladesh Nationalist party’s 
secretary-general, Mr Abdos Salazn Taluk- 
der, said the opposition was playing with 
“non-issues" in an effort to push the coun- 
try into chaos. 

The strike has forced all road transport 
off the streets and closed offices and 
schools across the country. 



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WEDNESDAY SEPTEMBER 


14 1994 


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NEWS: UK 


Corporate sector cash 
rich after recovery 


By GfflianTstt. 
Economics Staff 


The economic upturn in the 
UK has left the corporate sec- 
tor increasingly cash rich, as 
rising profits and a series of 
bond and share issues have 
raised large companies' liquid 
assets to historically high lev- 
els, official figures yesterday 
indicated. 

The data is likely to boost 
City hopes that Investment, 
which has lagged well behind 
the rest of the economic recov- 
ery so far, may pick up later 
this year. However, the Confed- 
eration of British Industry yes- 
terday pointed out that con- 
cerns about demand may still 
be depressing investment 
intentions in spite of the 


increasing availability of inter- 
nal corporate finance. 

The CSO said that the liquid 
assets of large non-manufactur- 
ing companies at the end of 
June were at their highest 
level for over 15 years. The 
liquidity ratio of these compa- 
nies rose to a seasonally 
adjusted 178 per cent in the 
second quarter of the year. 

The level of liquid assets in 
the man ufacturing sector was 
slightly lower, running at 127 
per cent in the second quarter 
of the year. 

Measured overall, the liquid- 
ity ratio of the UK's largest 
companies was 147 per cent, 
unchanged on the previous 
quarter and the highest in the 
series' 10 year history. 

The survey, which covers 


about three quarters of the 
total net assets of the indus- 
trial and commercial sector, 
calculates the ratio by measur- 
ing current assets maturing in 
less than a year as a share of 
liabilities that must be repaid 
in less than a year. 

The CSO yesterday said that 
the key reason for the rise in 
liquidity was that the corpo- 
rate sector had conducted a 
series of issues in recent 
months, a gainst a background 
of rising profits and steady 
repayments of bank debts 
accrued in the 1980s. 

In another development 

Which jpriiratgg the tnnreasing 
health of the UK corporate sec- 
tor the CBI yeste rday said pro- 
ductivity was outstripping pay 
in the manufacturing sector. 


Tax change fails to cut 
fees for foreign students 


W hen Richard and Sue 
Johns, directors of 
Kingsway English 
Centre, a private language 
school in Worcester, signed a 
contract to build new premises, 
they had no idea it would 
result in a tax ni ghtman s. 

Just after they completed the 
building deal. Customs & 
Rmisfl granted all independent 
English language schools 
exemption from value added 
tax, effective from this month. 

So for so good. The govern- 
ment's decision came alter sev- 
eral years of lobbying by 
Britain’s 1,000-plus private 
E nglish-as-a-fo re tgn- language 
schools to be on an equal foot- 
ing with the 200 English-teach- 
ing state colleges, which have 
always been exempt 
But VAT exemption has a 
down side. The Johns, for 
example, can no longer reclaim 
VAT on some of the supplies 
and services, such as budding 
materials, they boy for the 
school. 

They have decided to create 
a company to build the prem- 
ises. That company will 
reclaim the VAT and the 
school will rent the property. 

The Johns’ juggling is an 
example of how VAT exemp- 


Motoko Rich reports on EFL 


tion has turned out to be a 
mixed blessing for an industry 
which claims to be the UK’s 
eighth-latest source of Invisi- 
ble earnings, ahead of film, 
television and advertising: 

For the 550,000 people 
who travel to Britain each year 
to study English and spend 
about £570m during their stay, 
the VAT change has not pro- 
duced widespread price reduc- 
tions. 

No school has discounted 
prices by anywhere near the 
17.5 per cent rate of VAT. A 
few have cut fees by as much 
as 5 per cent, but most are 
merely refraining from increas- 
ing fees this year. 

The schools say it is not sim- 
ply a matter of cutting their 
foes by 17.5 per cent The 
savings from not charging 
VAT are much less than most 
people assume,” said Mr Timo- 
thy Blake, principal of the Lon- 
don School of English, which is 
lowering its fees by 5 per cent 
next year. 

Putting the schools' case is 
made difficult by the foot that 
there is no single industry 
body to speak for it, promote 


its interests and set and moni- 
tor standards. 

“So many professional organ- 
isations for EFL schools are 
springing up.” said Mr Jergen 
Gemmeke, director of Munich- 
based agent Prolinguis, which 
places 3,500 students in 
English language schools in 
the UK each year. “It is not 
clear who does what, why and 
for whom." 

The British Council, the 
UK’s main agency for cultural 
relations overseas, is the only 
body which hires independent, 
trained auditors to inspect EFL 
schools in Britain through its 
recognition scheme. 

When the government 
decided in April to grant VAT 
exemption to the schools. Cus- 
toms & Excise annnnnrgri that 
it would exempt only schools 
recognised b; the council. But 
when a number of “non-recog- 
nised” schools, notably mem- 
bers of the Association of Brit- 
ish Language Schools, argued 
that the ruling would create 
unfair competitive practices, 
the government extended 
exemption to all independent 
EFL schools. 


Britain in brief 



Court allows 
Three Graces 
extra time 


A High Court judge yesterday 
ruled that Mr Stephen Dorrell, 

national heritage secretary, 

had not acted unfairly in 
allowing extra time for £7J6m 
to be raised to keep the 
sculpture The Three Graces" 
in Britain. 

Mr Justice Laws refused the 
California-based J. Paul Getty 
Trust, which bad agreed to 
buy the statue, a judicial 
review of Stephen Darrell's 
dedston. 

The trust told the court 
sitting in Leeds a fresh 
application would be made to 
the Court of Appeal within 
seven days. 

The Getty Trust had agreed 
to buy the sculpture by 
Antonio Canova for £7.6m. 

The government extended a 
deferral of a derision to grant 
an export licence earlier this 
year to allow the Victoria and 
Albert Museum and the 
National Galleries of Scotland 
to raise the money. On August 
9, Mr Dorreli allowed a further 
three month delay. 


Several factors have 
contributed to the growth of 
cask beers. The British are 
drinking gmaiw volumes of 
beer but they are increasingly 
willing to buy premium 
products such as cask ales. 

Wider availability of beers . 
has also helped. Publicans 
have stocked a broader range 
dnro the government required 
breweries to reduce the 
number of pubs they owned. 

Pubs are attracting a broader 
clientele by offering better food 
and facilities. A growing 
number of families, for 
example, go to pubs for meals 
and special occasions. Women 
now account for some 16 per 
emit of cask ale drinkers, the 
report says. 


Former miners 
suffer pay cuts ( 


Less than half of redundant 
miners questioned for a survey 
have found jobs and thosenow 
working outside the industry 
hove t*k«»n an average pay cut 
over more than £70 a week. 

The survey by Coalfield 
Com muni ties Campaign found 
that 89 per cent of former 

miners are worse off than 
when they worked in the coal 
industry. Mr John Monte, 
general secretary of the TOC, 

said tibe report demonstrated 
the cost paid by miners for the 
government's failure to bads 
their industry. 



Bupa moves 
on health 


New capital 
at £ 2 . 16 bn 


Bupa, the UK’s largest private 
health insurer. Is making its 
long expected move, into the 
long-term health-related 
insurance market. 

The main element of its new 
product range is a policy 
providing a replacement 
income if a person cannot 
work due to in-health (usually 
known as permanent health 
insurance), extended to cover 
the need for tong-terra care in 
oldageaswelL 

Both areas are expected to 

see strong growth in demand 
as government changes in the 
welfare system increase the 
need to insure privately. 


Cask ales 
extend market 


Tube signs up 
for auction 


Traditional east ales are 
taking a rising share of the 
declining UK beer market by 
attractin g a wider range of 
drinkers particularly among 
young consumers and women. 

Sales volume of cask ales 
rose 9 per cent in the year to 
January while total beer sales 
fell 2 per cent, according to the 
annual report on the sector by 
Caiisberg-Tetiey, the UK 
brewing joint venture of 
Carisberg and Aflied-Lyons. 

Cask beers, which derive 
some of their qualities from 
secondary fermentation in the 
casks, have been taking 
market share from pasteurised 
keg beers. Casks' share of 
draught beer sales has risen 
from 35 pa* cent in 1987 to 47 
per cent this February. Kegs' 
share has fallen from 65 per 
cent to 53 per cent 


Piccadilly Circus, Leicester 
Square, Marble Arch. London 
Underground believes there is 
money to be made from the 
wimp signs which adorn its 
stations. Ten thousand 
redundant Tube station signs 
are to be auctioned off in wbat 
London Underground believes 
will be largest sale of its kind. 

Some of the signs date from 
the 1920s but others have 
fallen victim to more recent 
station refUrtrishments. Some 
are battered veterans of life 
underground while others have 
never been used and are in 
pristine condition. 

So confident are London 
Underground and auctioneers 
Brooks of interest in the 
Collection of flnampl, glass and 
aluminium signs that they 
have hired Olympia, one of 
London’s largest exhibition 
halls, to stage the sale. 


New capital raising issues 
worth £2.16bn were announced 
by the fiwanrial and corporate 
sector in August, of which 
£85lm worth were 
denominated in sterling. Bank 
of England figures showed. 

Actual gross issues by UK 
borrowers totalled £2J5 2m , the 
Bank said. After redemption 
net issues totalled £1.59bn. 

The largest new issue 
announced during the month 
by the Aircraft Lease Portfolio 
Securitisation for 3999m, In 
fling tranches, of fixed-rate 
bonds and floating rate notes, p 

The largest share issue 
conducted in August was 
carried out by Kleinwort 
European Privatisation 
Investment Trust for £200nu 
which was the final instalment 
on the issue announced in 
January, the Bank added. 


to 


R 


!i. U’ £ \ i | 


LllL > t ? i 


Luxembourg 
affects payouts 


.-jnVs *.T 


Payouts in sexual 
discriminati on cases have 
risen sevenfold since a 
European Court of Justice 
ruling removed the statutory 
limit a report says today. 

The equal opportunities 
review published by Industrial 
Relations Services says that 
the decision has forced 
employers to take equal 
opportunities seriously. 

Even when the Mxnikry of 
Defence pregnancy dismissal 
case awards are removed from 
the figures they still show that 
Industrial Tribunal awards in 
unlaw ful rfterrimtnnHim cases 

have increased by 45 per cent 
says the report 


r 


■ t... 


>V- 


. V 


CITY 


I NAN'.' 'l A L TIMrS 


University 
BUSINESS SCHOOL 


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An introduction to the 
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London 3 October tc 21 Nov-smbcr 1994 


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London as a Financial Centre * The Stock Exchange and 
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Futures and Options * Swaps and Relaced Option Markets 
Current Developments in Clearing Banks * Buikfing 
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Dublin in 
Sinn Fein 




By Johi Murray Brown 
in Belfast 

The Irish government 
yesterday moved to maintain 
the momentum behind the 
peace process in the wake of 
Monday’s loyalist bomb «++*>-*■ 
in central Dublin. 

Senior government officials 
opened talks with Sinn F&n. 
the Irish Republican Army's 
political wing, in preparation 
for' the all party Formn for 
Peace and Reconciliation, 
winch Dublin hopes to convene 
before the end of October. 

Irish prince minister Albert 
Reynolds has pushed for an 
early, convening of the forum 
to commit Sinn F£in to the 
democratic process, bolstering 
the moderates at the expense 
of hardliners in the wake of 
the ISA's announcement of 
cessation of hns tmtipfl 
Although Mr Reynolds has 
repeated his wish that unionist 
parties In the North , will join 
the forum, both major parties - 
the Official Ulster Unionists of. 
Mr Jim Molyneaux and the 
Democratic .Unionists of Rev 
lan Paisley - seem, likely to 
decline the invitation. 


Unionist officials are reseot- 
full about what they see as 
Dublin’s attempt to steamroU 
the process and warn of possi- 
ble further loyalist terrorist 
attantrg jf Dublin .does 
a more cautions .approach to 
- the peace process 

Officials fari r 0Bblm concede 
that these is st&Cno agenda tor 
the forum, a point which has 
been criticised:*^ Mr John 
Bruton, hrn&lWm Gad, the 
main oppositionparty. 

Sinn EWn'sfijd^wauld step 
up its campaign todpen border 
road s blocked off by the secu- 
rity forces, ft is planning a co- 
ordinated exercise for the , 
weekend after next with a 
series of road openings and ral- I 
lies. ; 

• A number of cars were 
hijacked yesterday during trou- 
ble in Protestant areas of north 
Belfast Police described the 
disturbances as “quite ugly”. 

It is thought the distur- 
bances may have been Hnted 
to fighting between factions in 

the foyer at Belfast Crown 
Court, where^a man is standing 
trial aoc92sed)oO&-titoinpt»d 
minder of a Belfesttoy- 

afist "Z\. 


Mr Jha MianchaeH'hUBpe, president of the Dahy Trade Fetation, at the Sfintetry of Agriculture 

Legal challenge to milk deregulation scheme 


By Ivor Owen, 

ParBamentary Correspondent 

Deregulation of the milk 
distribution industry, which 
has already been postponed by 
six months until November l, 
may be further delayed 
through a legal nTvan«mg »> 

The Dahy Trade Federation 
announced yesterday that it is 
seeking the authority of the 
Ifitfc Couyt to. subject propos- 
als,, jpr a.- voluntary fanners’s 


co-operative, known as Milk 
Marque, to a judicial review. 

According to the Federation 
its establishment will have the 
effect of creating an unregu- 
lated monopoly which will 
force up the price of milk and 
other dairy products. 

The Federation hopes that 
the legal action will lead to 

new cnm mwiP'r wafrgnnrHg 

The govermnent has already 
agreed that the assets of the 
M3k Marketing Board, which 


has been responsible for milk 
distribution for the last 60 
years, should be transferred to 
Milk Marque and is nradmue ft 
should come into being with- 
out further delay.- 
Mr Gavin Strang, Labour's 
agriculture spokesman, called 
on the government to halt the 
deregulation scheme saying it 
would inflict “real and unnec- 
essary damage" an the dairy 
industry. He urged Mr Wflham 
Waldegrave, the agriculture 


minister, to protect the con- 
sumer and the dairy industry 
from price increases and job 
losses “all of which are a direct 
result of the government's own 
actions”. 

Last week Tesco, the UK 
supermarket chain, threatened 
to source a significant propor- 
tion of the company’s dairy 
products from the Continent if 
the government does not 
change its plans for the £3.3bn 
British rafik 


Rules of the game worry Channel rail link consortia 


■sftlvtsrj Charies Batchelor charts the progress of the government’s £2.7bn private sector finance flagship 


T he competition to find a 
consortium to build the 
£2.7bn high-speed rail 
link from London to the Chan- 
nel tunnel is Been by the gov- 
ernment as the fla g shi p of its 
private sector finance initia- 
tive. 

But the rules of the tender 
- invitation are proving a source 
of concern among members' of 
the four consortia to emerge 
from the shortlisting process. 
Some bidders say /Competition, 
roles impose very restrictive 
conditions an the prospective 
buflders of the 68-mflejm j way . , 
A source dose to .one of . the 
- bidders said the tender was not 
snffldentjy commercial in its 
approach and ihfl^to.srov'bJe 


the flexibility companies need. 

The Department ''of Trans- 
- port said the winning b idder . 
; would have.an opportcntty to 
put its stamp an the project to 
toe two -years ft will, take for 
supporting J^idation to pass' 

tbmn g hp arHamprrf , 

The, government, atmmmwri 
to June that itJbad. chosen four 
constatia to bid for the «m- 
txact tq build the link apd 
operate tram -services under a 
. 999-year concessum. . 

The consortia, were EnraBafl, 
consisting of BICG,. Trafalgar 
House and GEC; London & 

. Continental Rail ways includ- 
ing Ove Arup. StrWflKam Hal- 
crow„ and. Bechtel; Union lank, 
mduffing John Morylem , and 


Taylor Woodrow; and a group- 
ing led by Hochtief of Ger- 
many. 

A strict confidentiality 
.datue bars Udders from com- 
menting an tender iwmHH w m 
but it fe understood , that con- 
cern centres on: - 

• The alignment of the route 
earmarked by the governm ent 
for the iWgh-speed trains, 
drawn with the aim of Reduc- 
ing planning blight Some of 

the curves appear tight and the 
gradients steep. 

• The tender terms restrict, 
bidders’ freedom to run. train 
services by giving a prominent-, 
position to European Passes*- . 
ger Services, the company 
.which wiD, operate .specially 


designed Erfrostar trains from 
London to Paris and Brussels. 
EPS will be handed over to the 
winning consortium as part of 
the government's finan rini 
contribution to the cost of the 
project Some sources fed this 
would prove an additional com- 
plication for bidders keen to 
develop their own railway 
operations. 

• The tight timetable 
involved to raising finance and 
building the rail link.- Bids 
must be submitted by Match 14 
next year and while toe gov- 
ernment hopes to decide an a 
winner by toe end of 1995 It 
has made no firm commitment. 

Bidders are concerned that , 
by the time, parliament. has.' 


approved the necessary legisla- 
tion there will be little time to 
raise the finance needed. A 
general election could push up 
the cost of borrowing. 

They are also concerned at 
the possibility that the govern- 
ment will not immediately 
choose one winning company 
but will shortlist two and play 
them oft 

• Complexity of the tender 
terms. These require bidders to 
submit six alternative propos- 
als alongside their core bM. 

The UK government has 
promised to meet a third of . the 
unsuccessful bidders’ costs up 
to a mavmrnm of but 

- the bidders themselves put the 
actual.costs of bidding as high 


as £5m to £10m. 

The Transport Department 
said there was no question of 
reopening discussion of the 
route, but bidders would be 
able to make ri»tign prop osals 
when parliament considered 
the project 

It said it was unable to give 
bidders a definite date by 
which it would take a final 
decision on the winning con- 
sortium because of the com- 
plexity of the project I 

Bidders will be invited to ' 
tour the route of the rail link ; 
and to attend presentations by 
EPS and Union Railways, the 
company which has been 
involved to the initial desig n , 
than September 19. 


The Taikland ceituiar 
audit gets your 
organisation organised. 













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10 


MANAGEMENT 


FINANCIAL TIMES 


WEDNESDAY SEPTEMBER !4 1994 


★ 


Andrew Campbell argues that detractors of strategic 
planning should focus on the execution, not the idea 

The point is to 
raise the game 


Ttfis is im Pe^/VEfc — He W 
W£ CAN STOP WO£R.VING 

a8o0t strategic planning 



T he last few months have 
brought a torrent of bad 
news foT strategic plan- 
ning. Henry Mintzberg's 
polemic The Rise and Fall of Strate- 
gic Planning* has been reinforced 
by a pamphlet from OC&C Strategy 
Consultants which concludes that 
“the humane thing to do with most 
strategic planning processes is to 
kill them o£T. More recently, a 
research report by America's Plan- 
ning Forum states that only 25 per 
cent of companies consider their 
planning processes to be effective. 

Like Mintzberg. a Canadian pro- 
fessor who Tor 20 years has been 
one of the most influential writers 
about strategy, we could conclude 
that managers should stop this 
futile exercise and start doing some- 
thing more useful with their time. 

Wrong. Strategic planning is not 
futile. Research at the Ashridge 
Strategic Management Centre has 
shown that some companies - both 
conglomerates and more focused 
groups - have strategic planning 
processes that add real value. They 
include ABB. BTR, Emerson Elec- 
tric and General Electric. 

Large companies consist of a 
number of business units linked 
together by a corporate hierarchy. 
This creates a number of planning 
tasks. Each business unit needs a 
strategy of some sort to guide the 
actions of the business managers. 
The corporation as a whole also 
needs some corporate-level strategy 
to guide the actions of the corpo- 
rate-level managers. Finally, there 
should be some connection between 
the corporate-level strategy and the 
business unit strategies. 

No sane manager, not even Mintz- 
berg, would argue that these tasks 
are irrelevant. What is being 
debated is the effectiveness of plan- 
ning processes as a mechanism for 
executing them. 

Mintzberg would argue that the 
nature of strategy development 


A fter decades as a minority 
practice pioneered by the 
likes of Marks & Spencer and 
International Business Machines, 
“supply-chain partnerships" 
between companies and their cus- 
tomer organisations are becoming 
commonplace. About 40 per cent of 
companies in a new survey* 
already had customer or supplier 
partnerships, and more than 90 per 
cent thought they were relevant to 

thpTTI- 

The study, by A.T. Kearney, a 
management consultancy, in col- 
laboration with the University of 
Manchester Institute of Science and 
Technology, appears to reinforce a 
picture created by many academics 
and even some consultants: that 
harmony and companionship in 
supply ehaimn and shared product 
development are today's route to 
competitive advantage. 


makes it an inappropriate topic for 
structured planning processes. 
Strategy should be crafted around 
insights and discoveries using 
experiments and learning processes, 
not p lanning documents and formal 
presentations. 

So why do some companies have 
great planning processes? The rea- 
son is that these processes are not 
designed to develop corporate-level 
strategy or to develop the business 
unit strategies, they are designed to 

Each year corporate 
centre managers look 
at the business plans 
with no clear sense of 
how to react to them 


enable the corporate-level managers 
to influence the strategies that have 
been developed by business unit 
managers. 

Possibly the best documented 
example is the planning process at 
Emerson, a US company which is 
much admired for its management 
style and techniques. 

The envy of most planners for its 
effectiveness and status with man- 
agement. Emerson's process is 


But most of the respondents to 
the survey are sceptical, and ou 
several counts. The researchers 
found no clear indication that com- 
panies in partnerships acted signif- 
icantly differently from those act- 
ing alone. 

One pharmaceutical manufac- 
turer in the survey said: "They've 
got to give us a lower price . . . 
That’s the only reason we’re doing 
it It’s not that we want to be in 
partnership, we want to get the 
cost down." An appliance manufac- 
turer observed: "Getting your sup- 
pliers to share your market risk is 
just a clever way of reducing your 


described, both by division manag- 
ers and corporate centre executives, 
as the heart of the company’s man- 
agement philosophy. It involves 
large amounts of analysis, hefty 
documentation (with 7Q required 
charts) and day-long review meet- 
ings. Superficially, it appears to 
have all the hallmarks of a bureau- 
cracy out of control 

The process works because corpo- 
rate managers have discovered that 
it is possible to raise the perfor- 
mance of certain types of electrical 
product businesses by influencing 
the managers in certain ways. For 
instance, the margins of a newly 
acquired business can be improved 
from around 10 per cent to around 
15 per cent not only by focusing on 
more profitable products, but also 
by benchmarking costs ag ains t best 
practice. Market share can be 
improved by unusually precise 
choice of segments. As a result, 
detailed analyses are required of 
measures such as profitability by 
product and market share by seg- 
ment 

The day-long reviews are gruel- 
ling, often confrontational, events 
in which Chuck Knight Emerson's 
chief executive, pashes businesses 
to go for more stretching targets, 
arguing his case based on the infor- 


capital expenditure.", while 
another judged: "There is no such 
thing as a really nice customer." 

Partnerships in this sense seem 
more akin to those formed by Clint 
Eastwood and Eli Wallach in spa- 
ghetti westerns - sleep with one 
eye open, or preferably both. 

The researchers Found it was not 
easy for organisations to work 
together in harmony on a 
long-term basis. 

Ike study showed that partner- 
ships suffer from an atmosphere of 
suspicion, based on previous rela- 
tionships where contracts have fre- 
quently been broken. The result is 


mation they have provided, work 
done by his planning staff and 
benchmarks from other businesses, 
both within. Emerson and outside. 

The company's corporate-level 
strategy is about helping electrical 
and electronic businesses to raise 
their game, and its strategic plan- 
ning process is designed to make it 
happen. Knight is clear about what 
he wants to do. The p lanning pro- 
cess, which has been refined for 
more than 20 years, is his mecha- 
nism for making; it happen. 

Contrast this with the average 
company. Each year the corporate 
centre managers look at the busi- 
ness plans with no clear sense of 
how to react to them. They probe 
and challenge to test the quality of 
these plans. They add up the num- 
bers and find a shortage of profit or 
cash. They then make some arbi- 
trary reduction in capital expendi- 
ture or increase in profit targets. 

They hope each year that the 
round of discussions will give rhem 
greater clarity about the corporate- 
level strategy, but each year they 
are disappointed, and present to the 
board something that is little mare 
than the sum of the business strate- 
gies. As one manager commented: 
“Each year I go into the review 
fired up with new enthusiasm. Each 


an overwhelming reluctance to 
share vital financial information. 
More than 50 per cent of respon- 
dents "strongly disagreed" that 
they exchanged detailed cost infor- 
mation with customers in the sup- 
ply chain. 

Especially infuriating to some 
companies in the consumer goods 
industry were attempts by retailers 
to charge them for demand fore- 
casts or sales data: “If customers 
are saying ‘We want partners hip', 
how can they charge for a fore- 
cast ... to actually make the busi- 
ness work between you?” 

Although the exercise of power is 


year I come out disillusioned.” 

It is not surprising then that only 
25 per cent of companies consider 
their planning processes to be effec- 
tive, and that consultants such as 
OC&C suggest these wheel-spinning 
processes should be killed off. 

If your company has an unsatis- 
factory strategic planning process, 
it is not because p lanning is an 
inappropriate activity- h is because 
the corporate centre managers do 
not know what they are doing. The 
problem will not be solved by tin- 
kering with the forms, formats, 
timetables or attendance. It will 


clearly a sore point in partnerships, 
examples cited by A.T. Kearney 
from other research show that 
there are gains to be made for both 
sides from partnerships. 

According to the consultancy. 
Motorola says it has worked closely 
with suppliers In design and manu- 
facturing to reduce material costs 
by 6 per cent while Fiat claims to 
have cut delivery cycle times. The 
report cites the case of a manufac- 
turer and retailer doubling sales of 
consumer products in five years, 
almost elimina ting' inventory and 
cutting supply-chain costs by 25 
per cent On fixe other side of the 


only be solved when the corporate 
centre develops a value-creating, 
corporate-level strategy and builds 
the management processes needed 
to implement it 

•Prentice Hall. £19.95. 

The author is a director of the Ash- 
ridge Strategic Management Centre. 
He is co-author with Michael Gootd 
and Marcus Alexander of Carparate- 
Level Strategy: Creating Value in the 
Multibusiness Company, to be pub- 
lished by John Wiley at the end of 
this month. 


relationship, a supplier of fasten- 
ings to, among others, IBM claims 
substantial business gains from 
forging much closer partnerships 
with its customers and offering 
much-improved field service. 

One fundamental problem with 
partnerships is the lack of per- 
ceived shared interests, according 
to Steve Young, an A.T. Kearney 
executive. Suppliers are not usually 
exclusive, and may therefore be 
reluctant to share information. Nor 
does either side tend to encourage 
exclusive relationships - the more 
powerful wishes to avoid obliga- 
tion, the less powerful is wary of 
dependence. The answer. Young 
says, is "earn trust, don’t ask for 
it". 

•Partnership or Power Play ? 
AT. Kearney, Stockley House. 130 
Wilton Road, London SW1V 1LQ 


Merit in 
being a 
mentor 

L ama Beckford believes 
that being a successful role 
model and mentor to 
Veron Neale, a young 
Afro-Caribbean undergraduate. 

Is a valuable two-way process. 

“It is important to 
demonstrate to young black 
people that they can be 
successful in big companies. 
Conversely. I have enjoyed being 
a mentor to Veron. Her 
questions sharpen my own 
think ing.” says Beckford, an 
equal opportunities manager at 
British Telecomm unka turns. 

BT is one of a host of 
companies taking part in a 
pioneering scheme for 
undergraduates developed by 
Norman McLean, careers adviser 
for African, Caribbean and Asian 
students at the University of 
East London. It is a unique post 
Part of McLean's brief was to 
increase the success rate of 
ethnic minority graduates in the 
job market. 

Research by the Commission 
for Racial Equality has shown 
that black graduates are twice as 
likely as their white peers to be 
unemployed after graduating. 

A priority for McLean was to 
establish better links with 
employers. McLean says that 
many students may need a boost 
in confidence to encourage them 
to apply for employers' graduate 
training schemes. “Some 
students are the only members 
of their families to have entered 
higher education and do not 
know anybody in their own 
communities to whom they can 
go for guidance," he says. 

The mentor scheme provides a 
one-to-one relationship which 
allows students to focus on their 
personal and professional needs. 
Being a mentor is a serious 
undertaking and requires 
commitment, including spending 
up to half a day every month 
for six months with the 
student. 

Last year more than 100 
mentors were recruited from 60 
employers and McLean is now 
recruiting employers for tills 
year’s scheme. In November he 
will launch a nationwide 
programme involving seven 
universities and colleges. 

Lisa Wood 


Why partnerships can pall 

Adrian Michaels finds companies sceptical about the value of collaborating 

















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CONTRACTS & TENDERS 


MINISTRY OF FINANCE 

SHORTTERM CXiNSUOANCYTO REVIEW THE CURRENT 
MALAWI GOVERNMENT BUDGETING SYSTEM 

The Government of Malawi has obtained a loan from the World Bank (IDA) to 
implement a Second Institutional Development Project. One of the components of the 
project is the strengthening of the Institutional capacity of the Ministry of Finance. 

Under this Component, Government proposes to introduce a system of Forward Budgeting. 
Before ihis can be done, there is need to review ihe current budgeting system. 

The Ministry of Finance wishes to hire the services of a short term consultant to review 
the current Government Budgeting System. 

The Objectives of the Review are : 

1. To evaluate how the programme budgeting system has performed since its inception 
in 1987 to determine its strengths and weaknesses. 

2. To review the effect of the decentralised accounting system to Programme 
Budgeting. To examine linkages between the budgetary systems within the 
Ministry of Finance and the line ministries. 

To review the linkages that exist between the budget division of the Ministry of 
Finance and the Public Sector Investment Programme of the Ministry of Economic 
Planning and Development 

To make recommendations on the aspects of the present system that can be 
incorporated into the forward budgeting system. 

Areas to be Covered Include: 

1. Resource Mobilisation - Review how resources are mobilised internally as well as 
externally by programme and what effect this has had on the budget since 1987. 
Resource utilisation since the start of the programme budgeting, bow allocation of 
resources to programmes has affected attainment of goals by the 
minis tries/departments. 

Resource Management - This will involve a review of the decentralised accounting 
system which was implemented along with programme budgeting. 

Linkages with the Public Sector Investment Programme - This will involve an 
analysis of the linkages between the budget cycle in the Ministry of Finance and the 
public sector investment programme (PS1P) in the Department of Economic 
Planning and Development. 

Interested consultants should submit their proposals on how they intend to carry out this 
assignment and the submissions should include cost budgets. 

Applications should be sent to: 

The Secretary to the Treasury 
PO Box 30049 
LILONGWE 3, Malawi 
(Attention: Deputy Secretary (Budget)) 

Fax No: 010 265 781 679 
CLOSING DATE: 3RD OCTOBER 1994 


3. 


4. 


LEGAL 

NOTICES 


THE COMPANIES ACT 1M5 
AND 1999 

COMPANY LIMITED BY SHARES 
RESOLUTION 
of 

CONFEDERATION TREASURY 
SERVICES (U-K.) pic 

Ai on extraordinary general meeting oil 
da; Company held at Toronto oo August 
23, 1994 die Sallowing resolutions wen 
passed ifl tile case of resolution I. at an 
extraordinary mofation. and in the case 
of remtintino 2, as an ordinary resolution! 

L THAT it has bees {nosed to the 
sa tisfactio n of this meeting ftat die 
Company cannot, by reason of its 

liabiliti es, mnrinH P fa awl 

that it is advisable to wind np the 
same and 

THAT Bocordingly the Company Im 
wound up voluntarily. 

THAT Anthony Junes McMahon 
and Peter Joseph Bdrse, both of 20 
Fwifagdon Street, London EC4A 
4PP, be appointed liquidators of die 
Company and that each act to be 
done by them may be exercised or 
done by cither of such Liquidator 
alone. 

Mr G Will man 
CHAIRMAN 


COMPANY 

NOTICES 



ay enmomaotaay of be faaecbetaf Uawfc 
anfc who ooasider ton they may have suffered 
meal tain fccfrdrafinp w& Uoyds Bank 

o r who ma y hnvn b soi oiwrete gcd wirti 

oonwisaOQ charges, ok nviStocooaa: 
081 789 9221 or Fax; 081789 7978 
Reference JF 


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The Financial Times plans to 




The State of Massachusetts is enjoying an economic recovery. Business confidence is at a record-high level. Subjects to be covered by this survey Include: the economic outlook, politics, computers and technology, banking and financial services etc 

• The FT reaches more Senior European decision-makers responsible for business site selection than any other Ergllsh language newspaper (source: (EBRS 1993). ^ 

• FOr a full editorial synopsis and details of available advertising positions, please contact: 


Michael Geach 

Financial Times, 14 East 60th Street New York, NY 10021 Telephone: 212-752-4500, ext: 22S Fax: 212-3136704 






It 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 ★ 



British Excellence and Quality 

AN OCCASIONAL SERIES 


The Royal Opera 
House 

'An exceptional, magical evening for all who attend, not just 
an ordinary evening in the theatre' is how Jeremy Isaacs, 
General Director of the Royal Opera House, describes his aim, 
continuing T want to see happy faces in Bow Street afterwards 
and these days, far more often than not, I do.' 

Thes R&yal Opera House pannages three companies: The Royal 

,..n £L \ ■- . -r*"" 1' ••• • ■- * 

. Opera,. The Royal Ballet and The Birmingham Royal Ballet. 
They aim to offer World class opera and ballet, at the highest 
standard of performance. Their repertory ranges from the 
classics to contemporary productions and revivals of little- 
known works and they attract many international stars: 
during the 1994/95 Season, Jose Carreras, Placido Domingo 
and Luciano Pavarotti will all appear with The Royal Opera, 
while Darcey Bussell and Irek Mukhamedov perform regularly 
with The Royal Ballet. 

An increasing effort goes into reaching the widest possible 
audience with broadcasting, recordings, live relays, concert 
performances and educational projects. The companies also act 
as cultural ambassadors for Britain on frequent foreign tours. 



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 C^roinittee, 40 Charles Street, London W1X 7PB, England. Tfel: +44 71 495 3219 Fax: +44 71 495 3220 




12 


FINANCIAL TIMES 


WEDNESDAY SEPTEMBER 


14 1994 


BUSINESS AND THE ENVIRONMENT 



All at aaa: White taw-mafcara struggle to find worfcafate aotuBona to ttie probtama of maritime pofertton, ship Owners aay that flie coflftoion of current legislative bends may singly scupper their pnafcwiaag 

Rough waters predicted 

Jane Martinson reports on regulations sailing towards the shipping industry 


Qp&nti 


C haos, jumble and madness 
are words used in the 
world's shipping industry 
to describe the effect of 
environmental regulations. 

As national governments and 
maritime organisations decide how 
to clean up the oceans, much of the 
industry is anclear about new regu- 
lations heading its way. Moreover, 
it is still disputing the effectiveness 
of pollution regulations passed four 
years ago. 

The ITS Oil Pollution Act, passed 
in 1990. was a direct result of the 
grounding of the Exxon Valdez 
tanker the previous year. The law 
stipulates that oil tankers sailing in 
US waters and built after 1990 have 
double hulls. It imposes unlimited 
liability on shipowners showing 
gross negligence. 

Double hulls work on the princi- 
ple that two layers of steel plating 
and a cushion of air between them 
will provide more protection 
against oil spills than one. But the 
effectiveness of the double-hull con- 
st ruction in preventing major oil 
spills, which are usually caused by 
serious collision. Is questioned by 
many environmentalists as well as 
the industry itself. 

From next July all ships which 
are 25 years or older will have to 
comply with the double hull or sim- 
ilar requirements under regulations 
adopted by the International Mari- 
time Organisation, a UN-backed 
body which regulates the world’s 
shipping. New ship building orders 
have had to comply with the IMO 
regulations since last year. 

According to Michael Osborne, 
manager of the technical services 
department of Shell International 


Shipping, double hulls H can help 
reduce the pollution horn the many 
minor grounding and collision Inci- 
dents which usually occur within 
port limits when the ship is under 
pilotage and which have contrib- 
uted to the industry’s poor image." 

Gerard Peet, Friends of the Earth 
International's representative at the 
IMO, expresses qualified support for 
the design. He argues that while 
double hulls afford some protection 
in minor accidents they do not pre- 
vent accidents happening in the 
Hrst place. He says it is unlikely 
that the design would have pre- 
vented any of the major incidents 
that have bad a serious effect on 
the amount of ail pollution and 
caused much public alarm. 

“I think double-hull designs will 
improve the situation - no one is 
arguing that they are worse than 


single hulls - but they are certainly 
not the complete answer. The real 
problem is not the design of tankers 
but the quality of crews and imple- 
mentation of international rules.” 

This view is echoed by the IMO. 
Roger Kahn, the organisation’s 
information officer, says: “The 
e mphasis now is not on trying to 
deal with the consequences of a 
major spill but In looking at the 
causes of the problem." 

The International Tanker Owners 
Pollution Federation, an indepen- 
dent body funded by the industry, 
says that although spills from 
major collisions and groundings are 
responsible for a large percentage of 
the oil spilt in the world, most spills 
result from routine operations such 
as lnarfing and discharging; 

A number of regulations recently 
agreed by the IMO aim to improve 


the ma n ag e m e nt of ships, the train- 
ing of staff and the checks on imple- 
mentation. From next July all ships 
more than five years old win be 
subjected to a sort of shipping “ser- 
vice”. Although the details are not 
yet clear, the checks are likely to 
look for wear and tear that makes 
the ship both unsafe and environ- 
mentally unsound 

A ruling to impose a management 
code on companies agreed earlier 
this year win come into force in 
four years’ time. The IMO is also 
looking at updating training codes. 
A Special im plementatio n group 
been set up to encourage participat- 
ing members to uphold the conven- 
tions they have signed. 

The threat of continuing legisla- 
tion and poor market conditions 
appear to have sent the industry 
reeling. John Joyce, marine man- 


Cruising into trouble 


T he highly visible problem of 
ugly waste dumped by cruise 
liners on idyllic Caribbean 
islands is to be the subject of a 
report funded by the World Bank 
and the United Nations. 

Cruise liners carrying up to 3,000 
passengers visit Islands where they 
expect to leave their rubbish as 
they cannot throw it overboard. 
Each passenger generates an aver- 
age 2kg of rubbish a day. After 
three days at sea a liner of 1,500 
berths could need to dispose of 
9,000kg of rubbish. 

As one member of the Interna- 
tional Maritime Organisation puts 


it: “These ships turn up, the pas- 
sengers all get off and buy one 
funny hat each and get back on to 
the ship. Before leaving, the cap- 
tain hands thousands of bags of 
rubbish to the port authorities." 

Ship-generated waste is esti- 
mated at up to 30 per cent of a 
smaller island's total waste for a 
year. But adequate reception facili- 
ties for such large quantities of 
waste are bard to find in develop- 
ing countries. Unsightly rubbish on 
beautiful beaches is the result. 

Last year the Caribbean was 
given special status under IMO pol- 
lution convention. Hie designation 


imposes heavy restrictions on 
dumping of rnbbish from ships. 
The study, which starts this month, 
aims to come up with a variety of 
solutions including landfills, ade- 
quate incineration and better- 
equipped ships. 

John Schrinner, special project 
officer based at the IMO, says that 
amply raising charges for liners is 
not the solution, since most of the 
Islands’ economy depends on tour- 
ism. “The cruise industry is very 
competitive and a situation where 
ports are simply undercutting each 
other on reception charges to win 
trade would not be ideal.” 


ager at the International Chamber 
of Shipping, the Lcmdon-based asso- 
ciation of ship owners, says: “With 
all this regulatory focus on pollu- 
tion not a word has been said about 
height rates and what anybody’s 
going to do about that." 

Clarkson Research Studies, a 
iBflrifng broker, found in a survey 
last month that daily operating 
costs for a 1970s-txtilt Very Large 
Crude Carrier are about 915,000. 
This compares with a new vessel 
costing $85m or more and requiring 
an average of 93&000 per day oper- 
ating costs. In today’s market, they 
do not earn enmtgh to cover inter- 
est or depredation. 

Orders have suffered: a total of 38 
VLCCs were delivered last year. 
Clarkson estimates that at such low 
rates the gristing fleet of tanker s 
bunt before 1979 will not be 
replaced until 2003. 

Martin Stopford, manag in g direc- 
tor of Clarkson Research, says: 
“The attitude is typically do noth- 
ing until doing nothing becomes too 
Much of a struggle and then order a 
new ship if you possibly can.” 

The situation could lead to the 
“ wors t of all possible worlds” with 
ship owners unable to pay for new 
ships and uneasy about repairing 
old ones which, while perhaps solid, 
may be subject to punitive changes 
to envir onmental legislation. 

“Ship owners are not malting 
enough money to replace existing 
ships and aren't repairing them 
property either. With punitive legis- 
lation hanging over them a Lot of 
owners are also adopting a wait- 
and-see attitude as they don’t know 
whether they are going to be legis- 
lated out of existence." 


A case of 
green gains 

David Lascelles on the savings 
to be made through efficiency 


I f being green were good for 
business, it would presumably 
happen of its own accord. So 
why is there not more of it? 

The Institute of Business Ethics 
bcUeves that the best way to get 

the message across is by citing 
case studies of companies which 
have gained by being green. A 
new publication* this week. 
Benefiting Business and the 
Environment, describes 70 
environmental initiatives taken 
by 43 companies in the (JK. 

Some of the companies are 
multinationals, such as Esso and 
National Westestminster Bank. 
Others are tiny enterprises. The 
total annual savings represented 
by the studies are more than 
£l0m with an average payback of 
18 months. “Thus,” say the 
authors, “the potential for 
savings in the UK as a whole is 
vast" 

Many of the savings came 
through energy efficiency. Forte, 
the hotel group, saved £180,000 in 
1993 by installing combined heat 
and power systems in 60 hotels. 

A more ambi tious scheme came 
at Blue Circle, the cement maker, 
which used several of its disused 
quarries for landfill and built 
electricity generation plants at 
four of them to make use of the 
landfill gas they create. The 
plants g en erate enough electricity 
to serve a town the size of 
Salisbury, but require a 
government subsidy to make 
them economic. 

Spring Grove Services, which 
washes 34,000 washroom roller 
towels a week, plans to capture 

waste heat from the drying 
process to warm the factory. The 
installation cost £57,000 and 
Spring Grove hopes to save 
£12,000 a year on energy 
costs. 

Water saving is another theme. 
Aijo Wiggins Fine Papers hi 
Dover has reduced water 
consumption and waste by nearly 
50 per cent with savings of 
£270,000 on effluent charges and 
raw material costs over the last 
three years. 

Several case studies show how 
companies have saved money by 
Identifying waste. Some go a 
stage further and turn it to 
advantage by recycling it Triplex 
Safety Glass used to send all 


waste glass to landfill. Now it 
separates untreated glass for 

re-use to wake patterned or wired 


1IIWHUVW, V 

which has been toughened or 
printed on is used as aggregate in 
cement and as reflective material 
in road-marking paint The 
savings are put at £274,000 a 
year. 

Boots the Chemist carried out 
an audit which showed that it 
handles 70,000 tonnes of 
packaging a year. A saving 
exercise has cut out 70 tonnes of 
paper and board and 180 tonnes 
of plastic, and 27 tonnes of virgin 
palp have been replaced by 
recycled fibre. 

At Procter & Gamble, the 
switch to refill containers for 
detergents i™ cut out more than 
11,000 tonnes of packaging over 
four years. 

Transport Is a big cost for ... 

business. TNT Express has set a 
target of 12 to 17 per cent . 
reductions in fuel use by applying 
the traits of research into vehicle 
design and wider use of 
aerodynamic devices. 

Stappiugdale Paper Products, . 
which makes paper nappies, 
estimates it saves £195,000 a year 
in transportation costs by nuking 
a neater nappy. 

What is not clear from the 
report is what prompted these 

companies to go for such savings. 
Was It environmental concern, or 
more ordinary business motives? 

Many of the savings are In the 
area of fuel, water and landfill, 
all of which have risen sharply in 
cost in the last few years as a 
result of increased taxation or 
government regulation. 

It may be misleading, therefore, 
to infer that these savings have 
led to higher profitability: they 
may only have offset higher costs. 

Julie HOI, one of the authors of 
the report, says tint she and her 
colleagues were not concerned 
about why the companies acted 
the way they did. What was 
important was the outcome: 
companies that operated less 
wasteful!/. 

* Benefiting business and tbe 
environment £24. Institute of 
Bosnuss Ethics, 13 Palace Street, 
London SWlE SJA. Teb (071) 931 
0495. Fox: (071) 821 5819. 


Lloyds Bank 
.Interest Rates 

With effect from 14 September 1994 the following rates of interest will apply: 


Band 

Monthly Rate 

Eqv. Annual Rate 

At 

0.9096 

10.80% 

B 

0.82% 

9.84% 

C 

0.73% 

8.76% 

Unauthorised 

2 .00% 

24.00% 


Band 

Monthly Rate 

Eqv. Annual Rate 

Standard 1 ’* 

Preferential* 1 * 

Small Business Loan*** 

0.94% 

0.77% 

0.94% 

11.28% 

9.24% 

11.28% (APR 11.8%)* 



Band 

Monthly Rate 

Eqv. Annual Rate 

A 

Band C 


11.28% 

9.24% 


* Standard and A Rands haw been method. 

m UlW >m additi0,ia ' dHW * s l< * daoM/monttil? to) may 

‘■Al*i applies lu Kami Rustos Limns. Abu applies to Kami SnuQ Siuiaeia Lwra. 



Lloyds 

Bank 


THE THOROUGHBRED BANK, 


Uoycb Bank Pic, 71 lombard Street, London EC3P 3BS. 


PEOPLE 


Adding up the nuclear stocks 


Ross Chiese (right) may have 
limited scope in bis new job for 
using the acquisition siring he 
jmg learnt at Hanson in the 
past 12 years. 

But he believes the financial 
control techniques he has 
acquired at the conglomerate 
should stand him in good stead 
at BNFL, the nuclear fuel 
reprocessing company where 
he has started work as finanre 
director. “It is a big ship to 
turn round," he says. “There is 
u nsophi sticated financial infor- 
mation. The company is very 
successful technologically and 
scientifically. But financial 
accountability needs improv- 
ing test or BNFL will get left 
behind.” 

Chiese, 44, is one of two 



recent appointments to the 
BNFL board; the other is Alis- 
tair MacFarlane, vice chancel- 
lor of Heriot Watt University, 
as a nonexecutive. 


Chiese qualified as a char- 
tered accountant In 1972 after 
attending school In Harrow, 
Middlesex. His first job was 
with Ranks Hovis McDougall, 
where he worked in a variety 
of accounting assignments 
before Joining Hanson as a 
financial controller. - 

He was promoted to deputy 
finance director in 1986 and 
dealt with many of the compa- 
ny’s acquisitions and subse- 
quent disposals as well as 
being responsible for financial 
control budgeting and capital 
expenditure requirements. 

His final Hanson job was 
assista n t ehtof operating offi- 
cer for the UK, which also 
includes Hanson’s interests in 
Australia and South Africa. 


Sam Younger takes on the World 


The BBC has recruited an 
insider, Sam Younger, 42, to 
head the BBC World Service, 
its international radio service 
which is listened to by an esti- 
mated 130m people each week. 

Younger, who was promoted 
to director of broadcasting in 
February, takes over as manag- 
ing director on November l. He 
succeeds BBC deputy director- 
general Bob Phillis, who has 
been doing the job since April 
1993. David Wltherow. 67. who 
has been the World Service's 
deputy managing director 
since February 1989, is retiring 
at the end of the week. 

The choice of Younger is 
likely to be well received by 


the staff of the World Service 
who bad been concerned that 
the BBC’s new cost-conscious 
manag ement team might have 
insisted on appointing some- 
one with more commercial 
experience. Sam Younger 
comes from a well-connected 
family. His father was a former 
Labour MP and big wheel in 
the Royal Institute of Eco- 
nomic Affairs while his cousin. 
Royal Bank of Scotland chair- 
man Lord Younger, is a former 
Tory cabinet minister. 

Educated at Westminster 
and New College. Oxford, Sam 
Younger was assistant editor 
of Middle East international 
before joining BBC External 


Services, as it was then called, 
as a talks writer in 1979. 

Younger will combine the 
job of director of broadcasting 
with his new role as managing 
director. He is befog appointed 
to the BBC’s board of manage- 
ment and is also joining John 
Thomas and Nick Chapman, 
the managing directors of 
Worldwide TV and Worldwide 
Publishing on the board of 
BBC Worldwide which is 
chaired by Bob Phillis. 

■ Jude Goffe, a former 
investment director of 31 and 
John Ranelagh, a former Chan- 
nel 4 editor, have been 
appointed to the Independent 
Television Commission. 


Watmoughs plans its succession 


Patrick Walker is planning to 
hand over the reins at Wat- 
moughs, the Bradford-based 
printer, after almost 50 years 
with the company. 

Watmoughs was founded hi 
1888, when it started publish- 
ing Fur and Feather, a maga- 
zine for budgerigar, rabbit and 
guinea pig breeders. When 
Walker joined as a cost clerk in 
1948, the company was still a 
p ublishing operation with a 
printer attached. 

He became m ana g i ng direc- 
tor in 1965 when the group was 
floated. By then. 65 per cent of 
the business was printing the 
catalogue for Empire Stores. 
“Everyone said how clever we 
were." he recalled yesterday. 
“They would run a mile now.” 

Watmoughs Is still the big- 
gest UK printer of mail order 



catalogues, along with newspa- 
per supplements, tabloids and 
many other products. Walker, 
who became chairman tn 1977, 
has guided the group's strong 
growth into a company with 
operations In Hungary and 
Spain and a turnover last year 


of almost £150 hl 

He is relinquishing his role 
as chairman and chief execu- 
tive in January to become 
executive chairman until Janu- 
ary 1997, when Declan Salter 
(left), who has been promoted 
from md of Watmoughs, to 
joint managing director of the 
group's UK operations, will 
become chief executive: David 
Bum, md of Varaicoat, will be 
the other joint md until the 
changeover; he will continue 
as a director until he retires in 
August 1998. 

Walker will remain noa-exec- 
utive chairman throughout 
1997 when he will finally retire 
at the age of 66. He plans to 
devote a lot more time to his 
Interest in 18th century 
English furniture, and En glish 
and Italian drawings. 


■ Michael Pavia, former 
finance director at Lasmo, the 
oil company, has been 
appointed finance director at 
SEEBOARD. Since leaving 
Lasmo in November last year, 
Pavia, 47; has been chief 
financial officer at Bridas 
Corporation of Argentina. 

■ Bill Gibson and David 
HeUiwell have been appointed 
financial director and estates 
director, respectively, of 
EVANS OF LEEDS: they 
succeed Ernest Curtis and 
George Best who remain on 
the board. 

■ Heather Noble has been 
promoted to director of 
property management at 
EUROTUNNEL responsible for 
the management and control of 
strategy, budget and common 
policy for all Eurotunnel 
non-technical premises in the 
UK, France and Europe. 

■ John Power, company 
secretary, has been appointed 
chief executive of RYAN 
HOTELS’ Irish hotels division. 

■ Stephen Cutler, formerly 
finance director and company 
secretary of Cannon Street 
Investments, has been 
appointed finance director of 
JKX OIL & GAS. 

Nicholas Mather, formerly 
group financial controller, has 
been appointed finance 
director and company 
secretary of FRENCH 
CONNECTION on the 
retirement of John Ellis. 

■ Nigel Garrow, chief 
executive of Dalgety Food 
Ingredients, has been 
appointed to the main board; 
Ted Humphreys and Jack 
Rowell are retiring from the 
board in October and 

December, respectively. 

■ Barry Pointon, formerly md 
of IMI Yorkshire Fittings, has 
been been made responsible for 
the special engineering group 
and has joined the board of 
IMI; Peter Fisken has retired. 

■ Paul Hoffingworth (below), 
group financial controller of 
CJnigate, has beat appointed 
group finance director of 
RANSOMES. 



Mfl 


♦j 


t 


















13 




] 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 


ARTS 


s 

r u. v va 



rama is the gtemoiir- 
poss of television, as 
the opening of the 
new aut umn season 
reminds ns. Drama is 
more expensive than an ything else. 
Involves more famous people, and 
is promoted more enthusiastically 
by the television companies. If yon 
have an 85-minnte Aim such as Pat 
And Margaret written by Victoria 
Wood, directed fry Gavin Millar, 
with a cast led by Julie Walters, 
Celia Imrte and Victoria Wood, or a 
four- part mini-series such as Faith, 
with Michael Gambon starring hi a 
.story abont sexual shenanigans 
among politicians, then yon are 
going to try to ensure that every^ 
one knows about H. 

This applies not only to so-called 
prestige productions and- single 
dramas, but also in such weH-tried 
categories as the British detective 
story - Fry’s Ruth Rendell Myster- 
ies Jtbr instance - and the working 
class comedy drama, such as 
BBCl’s Common As Muck which is 
clearly aiming for high ratings and 
In t en d ed far a long run. For all 
these dramas there will he glossy 
brochures .and press launches, cas- 
settes wiH be hiked to the b ur g eon - 
ing army of preview writers, and 
the stars win be cbanfifetared 


Televigion/Cfaristopher Dunkley 


The drama of technology 


around to do their bit cm daytime 
sofa shows, local radio, ami Wom- 
an’s Hour. 

The same does not apply to pro- 
grammes snch as the Channel 4 sd- 
au» series Sgithtox or the BSCS 
series White Heat, about the devel- 
opment of technology: budgets are 

lower, aniHwiirwi yw^llpr , smU fhw » 
are no stars txr'chat ontte sofas, so 
there is wrhope oftiieir bring pro- 
moted' wttlr/tbe same Vigour. And 
Equinox 

wWriv fri^ttbe-Tatt^O 4ays dr so, 

xreen sofa, apd 
re3l toy percep- 
andof mankind. . 

r ptinlny 

of (he new dramas proves to be, It 
is hard to see jbow It conld ever 
equal the 'impact of those pro- 
grammes abento technology. 

Which is' hot tp suggest that toe 
drama hsu-heeq'jioar. On the con- 
trary, ev^ flie least impressive, - 
■ -a- ■ • • 


have 

straight aS 
have ltterafly 
tton of fte 
However, tong 


the Ruth Rendell Mystery, which 

hSS ■ ^fanji p irfnting l y famfHar 

in its approach and atmosphere, 
has stffl succeeded in booking me 
findy enough to ensure that I shall, 
be watching on Friday to discover 
whodunnit, ft is hard to avoid the ■ 
feeling that fudUaztty and predict’ 
abJBty are precisely toe quaMttes 
fir wUdi FrviSriiow striving hr Its * ! 
drama. Faith, wlddt was shown 'in 
one-hour segments on either side of r 
Neas At 7m on Wednesday and 
Thursday, would have been ' 
Improved by droppi ng all the mate- 
rfal about the reporter’s daughter, 
and ruthless wHttng to reduce toe 
four hours to two or less. H might 
then have become a taut, pacy 
drama about politicians and the 
press instead of the dftfose piece of 
work we saw, which gave us too 
much tone to muse upon the last 
polttica] drama series in which, the 
affair turned out to be homosexual 
(To Play The King). 


The drama surprise of the new 
season is. Common As Muck, a 
series about northern dustmen 
whfchis presumably intended to do 
for BBCl what Minder did for FTV. 
The "surprise Is that it works so 
wen, or fid in the opening episode. 
Matters may deteriorate, yon 
always need three or four episodes 
to be sure, but already It seam 

jQtStcgmedy and plot are to emerge 

from character .rather than bring 
draped over prefabricated “charac- 
ters”, ■ 

he seeming paradox of 
discovering that the 
dustman most ready to 
make racist remarks Is 
himself married to a 
black woman is Gn my experience 
as a Junior reporter in the ethnic 
rainbow that was Slough in the 
1960s) absolutely true to Hfe. As for . 
Pat And Margaret, it was a ddl- 
riously maUdous character study 



which fulfilled all the promise of 
“Acorn Antiques” in Victoria 
Wood’s sketch shows. 

But while those dramas enter- 
tained me, Equinox with its pro- 
gramme “The Cyborg Cometh”, and 
the opening programme in the 
White Heat sales, “Butcher’s 
Blade”, managed .to startle me. 
Anyone who has read a fair amount 
of science fiction wifi be familiar 
with two popular themes; first the 
extension of individual human 
power via machinery (whether 
built in and “bionic", or bnfit on as 
hugely powerful robotic exten- 
sions) and second, the assertion 
that the answer to the question 
“Why are we here?" is “To build a 

machine cleverer than ourselves". 
Between them these two pro- 
grammes created a picture, impres- 
sionistic yet vivid, of 
standing on the brink of a period 
when those fantasies could turn 
into realities, and we conld dzange 


dramatically in the process. 

If they are right then the rapid 
evolution of mankind Op to the 
point where, today, be dominates 
the world, «m look like kids’ stuff 
compared to tbe leap in is about to 
make. The most pleasing aspect of 
White Heat (which was made for 

the BBC and the Discovery Channel 

by TJden Associates) is that, far 

tram bring one of those typical gee- 
wfaiz television series that cannot 
wait to zap you with the next bit of 
miraculous hardware, it is much 
more concerned with aesthetics; 
with the emotional and cultural 
impU c ati ons of technological devel- 
opment If you took the preoccupa- 
tions of this series and kept them 
in mind while watching Equinox It 
was not difficult to imagine man 
achieving Of that is the right word) 
within only two or three genera- 
tions something close to immortal- 
ity- 

The picture emerging from the 


two p ro g r amm es is of technology, 
from robotics to genetic engineer- 
ing, largely negating the weak- 
nesses of the human body and leav- 
ing human brains served by 
renewable mechanical parts. We 
are already a long way down that 
road, and of course the jonrney has 
its problems. Equinox told the chill- 
ing story of a woman in hospital 
who was clearly brain-dead but 
whose heart would not stop beat- 
ing. She had a pacemaker and, this 
bring the US, her family faced 
bankruptcy as the bills mounted up 
while the ethics were bring sorted 
out “Technology is evolving faster 
than homo sapiens” said the com- 
mentary. 

Clearly no such programme is 
ever going to out-rate Victoria 
Wood and Julie Walters playing 
long lost sisters brought together 
hr a ghastly TV show called “Magic 
Moments” (a title and concept 
which are probably being devel- 
oped in earnest somewhere even as 
yon read this). But the fandfoatfann 
of White Heat and Equinox, for the 
smaller number of people who have 
been watching them, are far more 
significant and much more long 
lasting... even If they do not earn 
anyone any space on any of those 
sofas. 




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i- . t ft Bette Bourne, BenedickBatesaed afira Pigott-Smith in Neil Bartlett’s inangHral production at the LyrkvHammerami^ 

**• ■ J - ; - !;Ic?HThfeay^Ala8tair Macaulay 

' * ' h •••«.. . ■« a ^ • • ■- , - - • . - * • •• 

New look4t ‘The Picture 


AtastaJrMuir 



Gray’ 


T he Lyric Theatre, Hammersmith, 
has a new artistic regime, and . it 
will be positively disappointing if 
it does not- prove controversial. 
Neil Bartlett, Its new artistic director, has 
a wide-ranging talent he performs,, he ^ 
directs, he translates, he writes; he bribes 
Shakespeare, Marivaux, Victorian melo- 
drama and Ruth Rendell to tbe stage. 

tort that is not where the controversy 
should he. Bartlett Is gay, and few people 
in British theatre, if any, are working 
harder than he to demonstrate how broad 
and complex a gay sensibility can be. Yet 
around almost all his stagizigs - whether 
period or modem, comic or serious 
hangs the same heavy aura of camp, like 
clouds of incense to the air. This atmo- 
sphere reminds me of the work of Lindsay - 
Kemp, though. Bartlett, has infinitely more 
restraint and refinement Their similari- 
ties hes In an un-British appetite for . melo- 
drama, to a lack of innocence, in a (some- 
times joyous) .sense of doom, -and in a 
dimate of knowing decadence. •• 

Bartlett’s opening production at the 
Lyric is his adaptation of The Portrait of 


Doffan Gray, and it is a perfect demonstra- 
±Lan both of his amsidertbifi talent add of 
-ytite'drawbaebs that go. with that talent 
- Not coaly does he tell Oscar Wilde’s 1890 
novel, he also totedeavoa it with a subse- 
\ quart’ tale 'of various at tilde's friends 
' Trieetirig in 1924 to read' the novel' and act 
' ft out and reminisce and discuss. 

The intersection of life and art is ane-af 
. Barnett's specialties. The friends of Wide 
: 'who asseh^e for this 1924 reading of the 
lotted botik are Ada Leversobn, Reggie 
Turner, Robbie Ross, and Sidney “Jermy” 
Mayor, each intimate with separate facets 
of Wilde the 'artist and man.- Even now, 
they -avoid «»TBwg a' spade a spade - but 
this works to surprisingly powerful effect 
The great scandal of WDde's career, the 
private Hfe that was rendered public, the 
cause of his appalling ostrarisation from 
British society', all this grows melodramat- 
ically in everybody’s mind, Kke - Bartlett 
forces us to see the parallel - the hidden 
portrait of Dorian Gray, forever growing 
. because, of being secreted 

To this double melodrama - the. scan- 


dais of both Dorian Gray and Oscar Wfole 
r- Bartlett adds further melodrama of 
another kind: the musical kted, whereby . 
characters speak, often bu t not alw ays, 
over a dramatic musical accompa niment, 

; as to same 19th-century music (and as to 
film) - Nicholas Bloomfield fa Bartlett's 
composer, and Iris scare, for six stringed 
i ns truments and harp, has Bartlett's feel- 
ing for atmosphere and intensity but not 
his achievement of com single style. 

T he music indulges in all kinds of 
19- and 20th-century effects, it 
swoops and scoops and pulsates 
and camps... “Decadent”, the 
word wrongly attached to Wflde and only 
partly true of Bartlett, fa utterly right for 
Bloomfield. (The musicians play high 
abooe ^ action, on an upper level of Ian 
MacNefl’s handsomely atmospheric, trian- 
gular and successfully claustrophobic set.) 

I have saved the best till last The six 
actors whom Bartlett has assembled for 
tins jffoducticai are superb, and It looks as 
if they have profited from detailed stylistic 
direction from Bartlett and/or his co-direc- 


tor Leah Hausman. Tim Pigott-Smith fa 
Robbie Ross and Basil HaHward, Maria 
Aitken fa Ada Leversobn, Benedick Bates 
is the Boy to the Guards and Dorian Gray, 
Joanna Riding fa the Maid and Sybil Vane, 
Paul Shaw is Sidney Mavor. and - best of 
all - Bette Bourne fa Reggie Turner and 
Lard Henry Wotton. 

These actors come from widely different 
backgrounds, and this fact only supports 
the strangeness of the meeting that Bart- 
lett puts onstage. AH of them handle with 
great precision the conflicting mixture of 
sympathy and tna^ rp in the air, the vary- 
ing degrees of emotion arid repression and 
melodramatics involved. 

Everything is beautifully focused. Hie 
many Tnaanfog^ of Wilde's tufe - Dorian. 
Gray as Ganymede, Aldbiades, Mile de 
Maupin. Mr Hyde - grow as you watch 
Bartlett’s taste and style deserve to be 
controversial; his professionalism is 
beyond reproarih 

At fiie Lyric Theatre,Hammersmith, W.6, 
until October 15; then touring to the Not- 
tingham Playhouse. 


Opera/Richard Fairman 

Return of Turandof 


A t Covent Garden the seasons 
come and go. Turandot fa baric 
yet again after ten years’ good 
service and almost as many open- 
ing nights have passed since the Royal 
Opera House launched its development 
plan, which by now must rank as another 
of the company's longest running shows. 

With file arrival of the National Lottery 
in the autumn, that drama looks set to 
reach its ratmmr gaojm has already 
been spent on architects’ plans and other 
preparatory work, which would be enough 
to provide spectacular new opera produc- 
tions for years, so if the Ug push in this 
crucial season comes to nothing there will 
be red faces an round. Fortunately, none 
was necessary for artistic reasons on the 
opening nighL 

The Royal Opera’s production of Turan- 
dot Is one of its fail-safe successes. It has 
been around since 1984, when Andrei Ser- 
ban (file original producer) unveiled what 
has turned out to be hfe most striking 
achievement far the company's tour to the 
Los Angeles Olympics, but little of its 
vivid theatrical colour has faded over the 
years. It is a still a splendid evening’s 

pntpr talnmpnt — own non. 

It is perhaps worth recalling what 
Turandot used to be Ske before: garish, 
fairytale Chinoiserie, dressed up in the 
mode of the day, at its worst like a cross 
between Aladdin and the Tiller Girls in 
Peking. (Try the photo of the 1947 tableau 
in the programme.) This production 
changed all that, emphasising the cruelty 
and file oppression as a downtrodden peo- 
ple gather In expectation of the latest pub- 
lic execution. 

There fa often the same bloodthirsty 
spirit among the audience, too. The lead- 


ing roles of Turandot are killers to sing 
and no opera offers more ringside excite- 
ment On Monday night Sharon Sweet was 
both ™Mng her Royal Opera debut and 
gfogfrig the title-role for the first time, a 
double challenge which she surmounted 
with ease. Her voice fa big; bright and hue 
where it matters, namely at the top. where 
Puccini stretched his soprano's vocal 
capacity to new heights. As Turandots go. 
she fa formidable rather than fearsome, 
not a nMwwsfl tiger on the prowl like some 
others In this production, but the role 
should suit bar weft. 

When she and Giuseppe Glacomini’s 
Calaf join in duet ringing unison top 
notes peal into the auditarimn. Giftromtnl 
is a known quantity here, but that does 
not wiafrg the strength musicianship 
of his sdn g to g (“Nessun donna” generously 
phrased over the bar lines) any less wel- 
come. Giorgio Giuseppini was a gravel- 
voiced Timur; Simon Keenlyside’s hand- 
somely-sung Ping led tbe tumbling trio of 
ministers. 

Ideally, one would like more flesh an the 
tone of Elisabeth Norberg-Schultz’s lid if 
the eharartpr fa to acquire human depth, 
but her brightly-focused, light soprano 
was pleasing as far as it went In the 
postlude after her first aria every note was 
drawn out symptomatic of conducting 
from Danirie Gatti that likes to make a 
meal of the music. He does, however, have 
the panache to drive home Puccini's big- 
gest climaxes. All told, this was a decent 
Turandot all-round, but beware: cast 
changes during tbe run are many and var- 
ied. 

Performances until November 5. 


The Getty Museum fights on 
over The Three Graces ruling 


A High Court Judge, Mr Justice 
Laws, ruled yesterday that the 
government had not acted 
unfairly in its efforts to keep 
Canova’s sculpture of The Three Graces in 
the UK. But the long saga fa not yet 
over. 

The Getty Museum of Malibu, Calif- 
ornia, which petitioned the courts, fa to 
apply to tbe Court of Appeal in the hope 
that it will over-rule Justice Laws’ deci- 
sion that there was no need for a judicial 
review into the actions of heritage secre- 
tary Stephen DorreH 
The approach to the Court of Appeal 
will be made within the next seven days 
but ft could be weeks before the matter fa 
finally settled. The department of National 
Heritage said yesterday that it will not 
refuse an export licence until the appeal 
was resolved. 

In August, in his first act as heritage 


secretary, Dorrell added a three month 
extension to the export deadline. This 
enabled the Victoria & Albert Museum and 
the National Galleries of Scotland to raise 
the £lBm stDl needed - from John Paul 
Getty n and Baron Thyssen - to keep the 
Three Graces in the UK. 

The Getty had bought tbe statue in 1989 
for £7.6xn but has been constantly 
thwarted in its efforts to retrieve It from 
the UK. 

A spokesman for the department of 
National Heritage said yesterday: “We are 
pleased the judge has accepted our argu- 
ment". 

Mr Justice Laws awarded most of the 
costs against the Getty, but with an 
endowment of over $4b and annual expen- 
diture in excess of $20Qm, they should be 
well within Its budget 

Antony Thomcroft 




■ BONN 

Opei* the opening production of ttw 
season Is a new dance drama on 
the Dreyfus Affair, devised by 
George Whyte with music by Alfred 
SchrtttkB and choreography by . 
Valery Panov (next performances 
Sep 16 and 24). This month’s 
repertory also Includes Les Contes 
tf Hoffmann and II guaranty, an opera 
by 19th-century Brazilian composer 
Antonio Carlos Gomes 
(Q22&-773067) 

■ COLOGNE 

PMfoarmonle Tomorrow: H erma nn 
Max conducts Rheinteche KarrtoreJ 
In choral works by Rameau, - 
Charpentfer aid Telemann. Fn: 
Paratore Brothers piano duo. Sat ; 
Heinz HoWger conducts Ensemble . 
Modem in Hofflger*s Scardaneffi 
Cycle. Si*v percussion ensanmle of 
foe Berlin Philharmonic. NextTues: 
Alfred Brendel plays Beethoven 
piano sonatas ( 0221 - 2801 ) • 
Opemhaua Sun:^ ^Ctfdgne Opera ' 

opens the' 1994-95 season- wffoa^ . 
niiw orod notion of Pucditfe TritUco, - 


conducted by James Conion and 
-.staged by WiHy Oector, with a cast 
infctudlng Barbara Daniels, Stephen 
O’Mara, Jeah-Phnippe Ltobnt, 
Cfiristiha GdUardo-Domas arid Jake 
Gardner (0221-221 8400) . 

■ DRESDEN 
Semperdper^ TcyflgWr "La bohenie. 
Tomorrow: Ingo Metzmacher 
conducts Dresden StaatskapeUe 
chamber fo roia tiorf lb- works by 
Ravel, Skte, -Debussy 1 and Waffl. Fit 
Aribert ReirnanriT® opera Meiusine. 
Sab new ballet mixed bffi. Sun: 
Caprtoefo (0351JJW4-2323) 

IfRAAMST. 

*A v heW’^ioral. work tiy ■ 

/^cdhWHS^onecTby 
the Frankfort' Festival, receives Its 
.riorfd prentirolttggiit In a concert 

"by fhe SaStancT-HacSo Symphony ' ' 
Orchesfrif arid Moscow Choral Art 
Academy <xxfer.'Anr>did Katz. In the 
Mozart Saafc Mftadb Uchldagives a 
' . -prana- redtaL' Tomorrow and Ri, 

: DrrfflrT ^KKhehko conducta the 
-FimikfurtHatSoSymphorv 
Orchestra In wbrka.by Brahms and 
Shostakdvlchi'.wlfo violin soloist ‘ 
Frank Peter ZrjMenYianri. 

.Sytvah Canting 
extracts frbmllw fting ^ an Sun 
: morning and Mon evening, With •- 
- eokSstoiriducBng Jante Martin and 
Wffllam Cochran. Oleg Caefahi 
conducts 'file' ^Wieebaden Sfarte: 

<. Theatre ensemble oh Sito eVeribg In' 
_a ! concert perfbr to a n cebf 


Katschey the bnmorfeB. Heiuz": 


' and London Voiced to 

1 Scarriaheffi Cycle ftebet Mon ' 


Katharinen Wrche (888^134 0400) 
fehgHati Theater Kalae retiuss e The 
company celebrates hs 15fo 
anniversary with A Slice of Saturday 
Night, a musical by thi£Hpafoer 
Brothers about youthful We" in foe 
1960s. Operfog night Is JRi, with 
(Reviews tonight and tomorrow 
(069-2423 1620) . ^ - ‘ 

■ GOTHENBmi}.. 

■ 0 Carlo Rizzi conduc^the ^ 
Gothenburg Syrsphony^Orcfoastra 
and Chorus tomorrow anid Fri fan an 
- all-Stravinsky programme 
(031-167000) -'y^; 

■-0 Gothenburg’s hew haHSourskfe 
opera housa opens on Sep.30 with 
' the first of three gala performances. . 
The firs^ opera proditofiBh^ls . 
BtomdahTs AniaFa' fJ959J, 'qperrtng 
Oct 15 (031-131300) : . : r 1 

m HAMBURG - 

Staatsoper Tonight, tomorrow. Sat 
Henze’s baBettiwjtoe, choreography 
by 'John Neumeier. Fri.nejd Tueac 
Das HheirigoRt SOn: Henze's The. 
Bassarlds. Mon: IL ba/triere d 
Shrigfia (040-351721) 

. MuslkhaSa Tonight ffVrfe Akademte 
der KOnste): Olaf Bar song reotaL 
-Sat Sdfigiu CeUbfdache conducts 
; Munich PhBharroonk: Orchestra.' Sun 
morning: GerdAforechthonducts 
Hamburg Stato Philhanhohk: ' 
Orchestra in works by .T^havsky, 
Gershwin andMeod^3sohrt-Sep22: 
Alfred BrertdeL Sep ^'AqrieSopHie 
Mutter (040-354414) ' . " 

- m HELSINil : 

Finnish Nationat.Opera Tonight - 
' r Sat next Bjesr Vtecflmfr 


Bowmtfster's production of Swan 
Lake. Tomorrow: Lohengrin. Frfc La 
nozze dl Figaro. Sep 22: song recitaJ 
by Andreas Schmidt: Sep 23: new 
production of Joonas Kokkonen’s 
opera The Last Temptations (0-4030 
2211 ) 

■ LEIPZIG 

Q ew a nd hnu s Kurt Masur conducts 
the Gewandhaus Orchestra 
tomorrow, Friend Sat The first two 
evenings are devoted to works by 
Debussy, Satnt-Saens and Franck. 
The programme on Sat Indudes 
Gershwin’s Plano Concerto and 
Brahms’ Tirst Symphony. The piano 
edotst in aS three concerts is Cecfle 
Ousset. Sat (Kleiner Seal): Marta 
Venuti song recital. Sun: Pedro 
Burmester piano recital. Next Tues: 
Gilbert Varga conducts Middle 
German Radio ^rnphony Orchestra 
in Honegger, Martin and Brahms 
(0341-713 2280) 

OpefTtoausA rwwppTdOction of - 
Salome, conducted jay Jiri Kout and 
staged by Nikoimis llehnhoff, can be 
seen tonight and Sun aftemoon, 
with a cast headed t^ Nancy 
Gustafson, Anja S^a and Falk 
Struckmann. This ntonth’s repertory 
also includes The Merry Widow, 
Toecaand foe Kandar-and Ebb 
musical Cabaret (0341-128 1281) 

■ MUNICH ^ . 

Gastelg Sergiu Cejl^dache 
conducts foe Munfa&^lfoarmonic 
Orchestra tomorrow. in Bmckner’s 
.Seventh Symphony. Cefibidache 
also-cowtocte a French programme 
on Sep 23, 25; 26~ahd 28. Geprg 
Sow conducts foe farad 
'Philharmonic on Sep 22, and Anne 


Sophie Mutter gives a vtoHn redtaL 
on Sep 27 (089-4609 8614) 
Staatsoper The 1994-95 season 
opens next Wed with a revival of 
Der Rosenkavalier starring Felicity 
Lott and Kurt Moll. Repertory for the 
first six weeks of the season 
includes La nozze di Figaro, 
TannhAuser, Nabucco, Lucia dl 
Lammermoor, Dvorak's Dimitri) and 
four ballet productions - Ray Barra's 
staging of Don Quixote, an American 
mixed fall, Ashton's La fiOe mal 
gardrie and John Neumeier’s A 
Midsummer Night’s Dream. The first 
new production is Don Giovanni on 
Oct 31 (089-221316) 

• Munich's traditional Oktoberfest 
opens on Sat with processions 
through the dty-centre and a 
folkkxe show. It continues till 
Oct 3, with daHy events at 
various venues throughout the dty. 
Tickets and Information from 
Veranstaltungsdienst Mayr 9)89-725 
8095) 

■ OSLO 

Konserthus Tomorrow and Fri: 
Marfas Jansons conducts Oslo 
prtlhamiorilc.(>chestra In works by 
Mozart, Kvandaland Beethoven. 
Next Thurs and Fri. the orchestra 
celebrates its 75th anniversary with 
performances of 'Schoenberg’s 
GurreiJeder (2263 3200) 

■ STOCKHOLM 

Royal Opera The main event this . 
week fa the first night tomorrow of a 
new production of Aida, conducted 
by tqsU.lngebretean and staged by 
Knot Hendriksen, with a cast headed 
by MariArme Hfiggander and HeHdd 
Skjkola freoeated with tftemating 


caste on Sep 17, 19, 23, 26, 28). 
Repertory also Includes Natalie 
Conus’ production of Swan Lake 
(08-248240) 

Kbnserthuset Gennady 
Rozhdestvensky conducts foe Royal 
Stockholm Philharmonic Orchestra 
tonight arid tomorrow In works by 
Michael Haydn, Tamberg and 
Tchaikovsky, with trumpet soloist 
Hakan Hardenberger (08-1021 IQ) 

• Stockholm Is hosting this year’s 
World Music Days, organised by the 
lnt«nationaJ Society of 
Contemporary Music (Oct 1-8). The 
festival wai present a wide scope of 
contemporary music from 40 
countries, alongside works by 
composers who have featured 
strongly In the ISOM’S 72-year 
history, such as Varese, Gfnastera, 
Webern and Ruggles (Swedish 
National Concert Institute, PO Box 
1226, 8-11182 Stockholm. Tel 

08-791 4600 FSx 08-676 0018) 

■ STUTTGART 

• The Stuttgart Ballet gives foe first 
of six performances at the 
Ludwigsburg Festival on Fri. The 
programme consists of works by 
Balanchine,' Uwe Scholz and Marcia 
Haydrie. Dmitri Hvorostovsky gives a 
song recital on Sep 23 and Murray 
Perahta a ptano recital on Sep 24 
(07141-939610) 

• The opera and baflet season at 
the Staatathertar begins on Sat 
with a revival of Monteverdi's Utfase. 
A new opera by Rolf Rfehm will be 
premiered on Oct 9. The season 
also Indudes new stagings of 
Janacek’s From the House of the 
Dead, Humperdinck’s HAnsaJ und 

G ratal and Prokofiev's The Love for 
Three Oranges (0711-221795) 


ARTS GUIDE 
Monday: Berlin, New York and 
Paris. 

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

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

Friday: Exhibitions Guide. 

European Cable and 
Satellite Business TV 

(Central European Time) 
MONDAY TO FRIDAY 
NBG/Super Channel: FT Busi- 
ness Today 1330: FT Business 
Tonight 17a), 2230 


MONDAY 

NBC/Supar Channel: 
Reports 1230. 


FT 


TUESDAY 

Euranawa: FT Reports 0745, 
1315, 1545, 1815, 2345 

WEDNESDAY 

NBC/Supar Channel: FT 
Reports 1230 

FRIDAY 

NBC/Supar Channel: FT 
Reports 1230 

Sky Nawa: FT Reports 0230, 
2030 

SUNDAY 

NBC/Super Channel: FT 
Reports 2230 

Sky New* FT Reports 0430, 
1730; 





14 


FINANCIAL. TIMES WEDNESDAY SEPTEMBER 14 19W 


Ian Davidson 



European for- 
eign minis- 
ters have den- 
ounced the 
controversial 
report by the 
German Chris- 
tian Democrat 
party (CDU). 
which argued that there 
should be a minority "hard 
core" at the centre of the Euro- 
pean Union. Their show of dis- 
approval may give temporary 
reassurance to the British, Ital- 
ian and Spanish governments, 
which have expressed alarm at 
the thought that Germany 
might try to relegate them to 
the slow lane of Europe. But 
public denunciation cannot dis- 
pose of the thinking behind the 
CDU paper, because it has been 
shaped by the geopolitics of 
the new map of Europe. 

Unfortunately, geopolitics is 
the chasm which has long 
divided the British from most 
of their partners on the conti- 
nent, and it now seems to be 
getting deeper. The six found- 
ers of the European Economic 
Community saw it from the 
start as an essentially geopolit- 
ical undertaking, of which the 
economic rules were just the 
practical expression; and for 
the Germans this imperative 
has been even stronger than 
for the other five. But even 
after 20 years of membership 
the British still do not under- 
stand this. They instinctively 
think that the "common mar- 
ket" is just a trading arrange- 
ment. and believe it ought to 
become more like a loose free- 
trade area; whereas if the prob- 
lem is geopolitics, the solution 
is Nato and the Americans. 

The authors of the CDU 
paper inevitably see the geo- 
politics of Europe in German- 
centric terms, and invoke the 
EU as a guarantee against his- 
toric German-driven instability 
on the continent They argue 
that the institutional and law- 
based framework provided by 
the Treaty of Rome was essen- 
tial after the second world war 
to stabilise West Germany 
inside western Europe, and 
they claim it is just as neces- 
sary today. 

The British pay lip-service to 
this peace-making function of 
the EU. but they discount 90 
per cent of what the Germans 
are saying; they do not under- 
stand the German problem, 
because it is not a British prob- 
lem. As a result, the British 
and the Germans draw oppo- 
site conclusions from the fall 
of the Iron Curtain. 

The British government is 


‘Hard 

core’ 

dissent 

The chasm 
dividing the 
UK and its EU 
partners is 
getting deeper 

now trying to sweep away the 
original geopolitical underpin- 
ning for the EU. by pretending 
that that purpose has now 
been served and can be dis- 
pensed with. Here is what Mr 
John Major said last week in 
his W illiam and Mary Lecture 
in Leyden. 

"The European Community 
was bom to end divisions in 
western Europe. It has suc- 
ceeded. With Nato, it has given 
us peace and prosperity in our 
part of the continent, and 
made war unt hinka ble. The 
determination of the founding 

The merit of the 
CDU paper is that 
it sets out a 
strategy for EU 
enlargement 

fathers has succeeded far 
beyond the estimations of most 
people in their time. Their 
vision was proved right for its 
age. But it is outdated. It will 
not do now." 

The obvious inference is that 
the EU model is no longer 
needed. But if so. what then? 
Should the Treaty of Rome and 
all its institutional trimmings 
now be scrapped? Or does Mr 
Major merely mean that we do 
not need any additional politi- 
cal integration of that kind, 
because now we have peace in 
our time? If the old vision is in 
some unspecified way out- 
dated, what is the nature of the 
new vision? He does not say; 
the only thing he is firm about 
is that we must have lots of 
flexibility all round. 

The authors of the CDU 
paper take the opposite point 
of view. They argue that the 
opening up of Europe may rea- 
waken all the historical dan- 
gers in central-eastern Europe, 


with Germany once more at 
the pivot of instability between 
east and west; and therefore 
Europe needs a politically inte- 
grated union even more than it 
did before. 

"The only solution which 
will prevent a return to the 
unstable prewar system, with 
Germany once again cau ght in 
the middle between east and 
west, is to integrate Germany's 
central and eastern European 
neighbours into the (west) 
European postwar system, and 
to establish a wide-ranging 
partnership between this sys- 
tem and Russia . . . Hence, Ger- 
many hag a fundamental inter- 
est both in widening the union 
to tbs east and in strengthen- 
ing it through further deepen- 
ing. Indeed, deepening is a pre- 
condition for widening ..." the 
report says. 

The central question, accord- 
ing to the CDU paper, is 
whether the EU “is able and 
willing to become the main pil- 
lar of a continental order, 
alongside a democratised and 
once-again stable Russia, and 
In alliance with the US". This 
will only be possible, it says, if 
we strengthen the political 
integration of the union: and 
one component of this 
stren gthening will be a tight 
Inner core of those countries 
which are most able and will- 
ing to go for integration. 

The merit of the CDU paper 
is that it sets out a broad-based 
strategy for tackling the 
enlargement of the EU to the 
east, in which the geostrategic 
starting-point is brought 
together with a mainstream 
mtegrationist approach to 
Europe. It is obviously not the 
only possible strategy for 
Europe, but it is dear and 
coherent, and it will be at least 
a stimulating starting point for 
the debate now erupting on the 
future of Europe. 

Mr Major’s speech was evi- 
dently intended as a British 
counterblast. Unfortunately, 
its main characteristic was its 
evasiveness. He says we should 
rebuild “cohesion and confi- 
dence" in the EU; but he does 
not say how. He says enlarge- 
ment of the union to the east 
“must extend to security 
arrangements"; but he does 
not say how, except, of course, 
that “we must be flexible”. 

In fact this speech is largely 
waffle, from which it is impos- 
sible to deduce any operational 
strategy. And if the govern- 
ment does not have a strategy, 
it is mainly because it cannot 
or will not think in geopolitical 
terms. 


R enault's formula one 
racing team cruised to 
victory In last Sun- 
day's Grand Prlx at 
Monza. Yesterday, the French 
state-owned automobile group 
recorded a more significant 
achievement, edging ahead of 
rivals to be the next issue In 
the government's sale of public 
sector assets. 

Mr Gerard Longue t. industry 
minister, said yesterday that 
France's centre-right govern- 
ment planned to float about 28 
per cent of the shares in the 
company, one of the stars of 
the state sector. The sale, 
which could raise about 
FFrlObn (£LJ2bn) for the gov- 
ernment, marks a s ignificant 
step in its policy of expanding 
public share ownership. 

But as Prime Minister 
Edouard Balladur emphasised, 
the majority of the company's 
equity would remain parked in 
the public sector far the time 
being. 

The derision to leave Ren- 
ault under state control clari- 
fies the Scale and timing of its 
privatisation after several 
months of speculation. But it 
raises several important ques- 
tions concerning the govern- 
ment's strategy and the impli- 
cations of that for the 
company’s long-term future. 

Mr Balladur said the govern- 
ment had decided to limit the 
sale to a partial privatisation 
because of the lack of a power- 
ful industrial partner for Ren- 
ault in the wake of the collapse 
of merger plans with Volvo of 
Sweden in December last year. 
“1 have always said that I 
thought Renault could not be 
privatised if at the same time 
an industrial alliance was not 
being created to ensure Ren- 
ault's future," said the prime 
minister. 

What Is odd about this argu- 
ment is that Renault's public 
sector status was (me of the 
principal reasons behind the 
revolt by Volvo shareholders 
which scuppered the merger. 

At least as important a con- 
sideration for the French pre- 
mier, it seems, was the politi- 
cal sensitivity of Renault 
A powerful symbol of union 
power in postwar France, Ren- 
ault has become the rallying 
point of the country’s political 
left and of unions in their cam- 
paign against privatisation. 
We will fight with all the 
means at our disposal to pre- 
vent the sale of Renault" 
declared Mr Robert Hue, gen- 
eral secretary of the French 
Communist party, outside the 
now-disused site in western 
Paris where the first Renaults 
were built almost 100 years 
ago. 

Union membership at Ren- 


Quite simply the Royal Oak. 


m 

iUDEMARSPlGUET 

The master watchmaker. 


For inlurnuliiai -iriil i-jLiIukia-. pS-a.-ir unit- hr 
\iiik-nur. Pi.um.-r A Ln- * A . I>+X u- I'm-Mi* >n ilatUtwJ. 
TcJ * I Jt *»S I»M r.i\ h I 21 IvtS 12 1 i 



John Ridding assesses Renault’s prospects as the 
government prepares to sell some of its shares 

More hands on 
the steering wheel 


ault has dwindled since the 
1970s to little more than 10 per 
cent of the workforce. But with 
presidential elections due next 
spring, the ever-cautious Mr 
Bahadur - who has the candi- 
dacy of the Gaullist RPR party 
in his sights - is anxious to 
avoid a potentially damaging 
labour dispute. 

The risk of labour unrest has 
not been eliminated by the 
decision to maintain majority 
state control. The communist- 
led Confederation Generate du 
Travail said yesterday it would 
oppose even a partial privatisa- 
tion. But for the workforce as a 
whole, the limi ted nature of 
the share issue and Mr Baha- 
dur's pledges to “Franrify" the 
company through extending 
public and employee share 
ownership should make a 
mobilisation more difflruii 

Apart from the risk of union 
disruption, the issue of Renault 
shares should be relatively 
smooth. It will involve several 
steps, including a FFr2bn capi- 
tal increase for the automobile 
group, the sale by Volvo of 
about half of its 20 per cent 
stake in the French company, 
and the formation of a core of 
long-term stable investors. 
This means that individual and 
institutional investors couldbe 
offered more than 30 par cent 
of the company’s shares. 

In most of these areas the 
d etail* are already failing into 
place. Negotiations with Volvo 
have been finalised, and mem- 
bers of the noyau (for, or core, 
of stable investors have been 
lined up. Mr Philippe jaffrg 

r-hairman of Elf Aqui taine for 

example, has said he is pre- 
pared to invest FFrlhn in Ren- 
ault, which he describes as a 
close industrial partner. 
Banque Nationale de Paris and 
Groupe LagardSre, the defence 
and media company, may also 
join the core shareholding 
group. 

Interest from individuals and 
institutional investors is expec- 
ted to be strong. “Renault is 
one of the most attractive 
assets in the public sector and 
is one of the most profitable 
international automobile 
groups ” said Mr Eric Michelis, 
automobiles analyst at Kleln- 





Winner after Monza, Renault is in pole position for a partial sale 


wort Benson in Paris. 

Unlike most of its interna- 
tional rivals, the French group 
weathered the downturn In the 
industry over the past few 
years without falling into loss. 
Earlier this month, Renault 

‘Renault has been 

managed like a 
private sector 
company for a 
long time 1 

reported first-half profits of 
FFri.7bn, more than double 
the figure in the same period 
in 1993. 

The first-half results were 
Battered by exceptional gains 
from the disposal of shares in 


Volvo. But Mr Louis 
Schweitzer, Renault’s chair- 
man, expects significant prog- 
ress In fun-year results, partly 
because of an improved perfor- 
mance by RVI, the company’s 
trucks and buses division, and 
improved sales of new prod- 
ucts including the Laguna, the 
upper range saloon, and the 
innovative Twingo mini-car. 

For international investors, 
however, .the operation may 
prove frustrating. Mr Baha- 
dur's desire to maintain tight 
French control of the group 
suggests that few shares will 
be made available to foreign 
investors. 

Some investors have also 
expressed broader concerns 
about the retention of majority 
state controL “We have con- 
cerns that commercial consid- 


erations may take a back seat 
to political questions and 
social factors such as promo- 
ting employment," said one US 
fund manager. 

Most industry observers 
argue that such concerns *■ 
should not be exaggerated. 
“Renault has been managed 
like a private sector company 
for a tong tirae," said Mr Mich- 
elis of Eleinwort Benson. Oth- 
ers add that moves towards 
fiill privatisation are likely to 
follow. Previous privatisations 
such as Elf Aquitaine, the oil 
group, and RhOne- Poulenc, the 
fhp rpiraiB company, have been 
conducted through a step-by- 
step process, providing a prob- 
able model for Renault. 

“It is too sensitive to discuss 
f ull privatisation now, but I 
Hifair this operation should be 
y»pn as the first stage in a pro- 
cess," said one merchant 
banker in Paris, although he 
added that full privatisation 
could be a protracted process. 

I n the longer term, Ren- 
ault and potential inves- 
tors are faced with impor- 
tant strategic questions. 

The collapse of the merger 
with Volvo has deprived the 
French company of important 
economies of scale and without 
a partner. In an industry which 
has consolidated significantly 
over recent years in the face of 
intensified competition. The 
improvement in automobile 
markets this year has masked 
rather than resolved the threat 
of increased competition, main- 
taining the vulnerability of the f 
smaller manufacturers. 

“With Volvo. Renault would 
have been the world's sixth 
largest vehicle maker,” said 
one industry analyst in Paris. 
“Alone it is tenth, and that 
may not be big enough," he 
added, referring to the effi- 
ciency gains in production and 
vehicle development enjoyed 
by larger groups. Such a con- 
sideration loomed large in the 
rationale for the merger with 
Volvo, which would have 
yielded cost savings of FFrtObn 
by the year 2000 according to 
the erstwhile partners. 

The problem for Renault is 
that attractive partners are few 
and far between. “Volvo was 
an ideal fit, partly because of 
its strong presence in the truck 
sector,” said one official at the 
industry ministry, who admit- 
ted that atmflnr matches would 
be hard to find. The risk is 
that, as in the case of the 
Volvo alliance, a protracted 
dominance of the French state 
on the shareholder register 
could deter the potential allies 
which Mr Balladur believes are 
needed to . secure Renault's 
future. 


LETTERS TO THE EDITOR 

Number One Southwark Bridge, London SE1 9HL 

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


Investment 

eligibility 

From Mr John Farthing. 

Sir, Under current personal 
equity plan rules, a company 
listed on the Unlisted Securi- 
ties Market is eligible for 
investment 

If such a company chooses 
not to seek a full listing when 
the USM closes at the end of 
1996 and consequently is mar- 
keted on the Alternative 
Investment Market, then it will 
be ineligible for investment. 

Unless the Pep rules are 
changed, this would mean that 
all such holdings mil have to 
be sold out of the Pep. 

Maybe now is the time for all 
interested parties to write to 
the Revenue and suggest that a 
change in the rules would be to 
the benefit of both investors 
and companies. 

John Farthing, 
dtredor, Cheviot Capital, 
Devonshire Bouse, 

145 Bishopsgate, London ECS 


Competition will 
help European arms 
producers improve 


From Prof Harvey M Sapolsky. 

Sir, Your editorial, "Euro- 
pean defence” (September 9), 
ignores some basic facts. As 
the Gulf war demonstrated, 
but most European militaries 
already knew, American weap- 
ons are not only cheaper than 
their European counterparts 
but also much better. 

They are better because they 
were designed for combat use, 
not for industrial policy pur- 
poses. The American military 
gained much combat experi- 
ence during the cold war and 
was equipped to fight the 
Soviets. 

European militaries sat 
mostly in garrison during the 
cold war. Their weapons were 
acquired to keep local arms 
industries busy. Neither cost 


nor quality was much of an 
issue. But now Americans are 
likely to turn isolationist Job 
needs will guide American 
weapons production. 

In contrast Europeans must 
deal with chaos on their door- 
steps. European militaries will 
need the best equipment, 
which they should be allowed 
to find wherever it is produced. 
With competitive pressure. 
European producers will gain 
in quality and effici enc y. 
Harvey M Sapolsky. 
director, 

defence & arms control studies 
p r ogramm e, 

Massachusetts Institute of 
Technology, 

Cambridge, 

Massachusetts 02139, 

US 


Variable geometry challenge for EU 


From Mr Stanley Crossick. 

Sir, Unlike the Maastricht 
process, we are already seeing 
a serious debate developing 
well ahead or the 1996 Intergov- 
ernmental conference; this is 
healthy and democratic. Lionel 
Barber rightly points out 
(“Fresh meat from Europe's 
stable". September 8) that the 
challenge is how to apply vari- 
able geometry in a Union 
expanded to the east. The 
recent German CDU/C5U paper 
proposes a combination of vari- 
able geometry and a hard core. 

Variable geometry, without a 
hard core of member states 
agreeing in advance to opt in 
to core policies, would unleash 
a centrifugal force. The exis- 
tence of the hard core creates a 
centripetal force. 


John Major, at Leiden on 
September 7, said the vision of 
the founding fathers “was 
proved right for its age. But it 
is outdated. It will not do 
now". He is wrong. The vision 
remains right for today's age; 
it is the institutional and 
organisational structure of the 
Union that is outdated. 

The original imperatives for 
creating the Union remain 
valid today. The central con- 
cern of the CDU/CSU paper is 
Germany's position in Europe 
and the need to guard against 
future German hegemony; “If 
Europe were to drift apart, 
Germany would once again 
find itself caught in the middle 
between east and west ... If 
[west] European integration 
were not to progress, Germany 


might be called upon, or be 
tempted by its own security 
constraints, to try to effect the 
stabilisation of eastern Europe 
on its own and in the tradi- 
tional way.” 

The UK government is right 
that we must not force member 
states to integrate more 

quickly than they wish. Con- 
versely, member states which 
want to integrate more quickly 
must be permitted to do so. 
The most important require- 
ment is to place the real issues 
and choices before the public 
in their correct historical Euro- 
pean context 
Stanley Crossick, 

Belmont European Policy 
Centre, 

42 Boulevard Charlemagne, 
B4040 Brussels, Belgium 


Facile yardstick for hospital chiefs’ salaries 


From Mr Charles McQiU. 

Sir, Alan Pike compared the 
salaries of privatesector execu- 
tives handling budgets of 
EllOxn with that of chief execu- 
tives of hospitals with similar 
budgets (“Managers' top pay in 
hospitals is £95,000”, Septem- 
ber 10) . The inference was hos- 
pital heads were doing badly. 

There is a world of difference 
between (a) being responsible 
for an enterprise which must 


bring in its own turnover by 
selling a service or product 
and, in addition, controlling 
the expenditure necessary to 
create that turnover through a 
number of functions, and (b) 
responsibility for controlling a 
spending budget of £110m 
which is extorted from tax pay- 
ers and handed to you. 

A commensurate salary 
would be about half the figure 
mentioned and much less than 


that currently paid to hospital 
chief executives. Many local 
authority department heads 
are also grossly overpaid. 

Interestingly, this facile 
yardstick should provide John 
Major with a salary of £279m a 
year. After all he handles a 
budget of £250bn a year. 
Charles McGill, 

33 Balfour Street, 

Alloa, 

Clackmannanshire FK10 LRU 


Partnership 
projects 
must be 
more equal 

From Mr Roy Suanstan. 

Sir, Joe Dwyer, Wimpey*s 
chief executive, hit the nail on 
the head in his analysis of the 
government’s private finance 
initiative (“Private finance pro- 
jects need bigger return", Sep- 
tember 7). 

Previous government state- 
ments have been over-optimis- 
tic on the extent of risk which 
the private sector is willing to 
bear. Companies have duties to 
their shareholders and in 
many cases there are fhr more 
attractive investments in 
terms of risk and return than 
large infrastructure projects. 
So the government has to 
make these projects as attrac- 
tive and certain as possible if 
there is to be any real cost 
benefit in a joint venture. 

There is still a widespread 
feeling that the Treasury is 
anxious to shuffle off the risk 
element overw helmingly on to 
the private sector. To combat 
this there needs to be a stron- 
ger sign that government is 
prepared to co-fund projects, 
particularly where social bene- 
fits are created. It is difficult to 
see how some projects will get 
off the drawing board without 
genuine public/private sector 
Partnerships of this kind. 

A problem remains in the 
Treasury’s accounting rules. It 
insists that if a private sector 
company builds, say. a toll 
road, it must bear the risk that 
tolls will not cover the costs. 
The Treasury is unwilling to 
stand behind" a company and 
bail it out if things go awry 
because the project will then 
count as public expenditure 
and so increase the public sec- 
tor borrowing requirement. 

But if government will not 
underwrite projects or share 
nsks more equally the private 
sector will naturally expect a 
higher return, perhaps 15 per 
cent or more. The Treasury 
still seems unwilling to com- 
mit public money to joint ven- 
K 8 * 1 ® which the private sec- 
^fhds to earn returns of 
this dimension. 

Roy Swanston, 

5°^ institution of 
^^red Surveyors, 

“ Greor George Street, 
Fartiament Square. 

L o»don SWlP SAD 


i 


i 



15 






1 


FINANCLVL TIMES WEDNESDAY SEPTEMBER 14 1994 




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FINANCIAL TIMES 

Number One Southwark Bridge, London SE1 9HL 
Tet 071-873 3000 Telex 922186 Fat 071-407 5700 

Wednesday September 14 1994 


Politics of 



After 10 days In the Cairo beat, 
the United Nations conference an 
population and development has 
produced a remarkable rtnnmfpnt 
More than. ISO countries of widely 
differing cultures and religions 
have given their supp or t to a 20- 
year plan aimed at curbing the 
world’s population growth. 

The programme, which urges 
countries to give universal access 
to fhmlly planning and reproduc- 
tive healthcare, may cost an esti- 
mated f!7hn a year by the end of 
the decade. But the moire ambi- 
tious element of the is 

its statement that individuals, par- 
ticularly women, have the right to 
control the number and fenfag of 
their children it urges that wont 
en’s status worldwide should be 
enhanced to give them the educa- 
tion and freedom to make those 
choices. In a radical departure 
from previous UN conferences, it 
sees a broad agenda of social 
development, of which contracep- 
tion Is just one part, as the brat 
way to tackle population growth. 

Watching governments wrestle 
to agree on some of the most tor- 
tuous language in the UN lexicon, 
there is reason to ask whether the 
exercise was worthwhile. The pot. 
icy statement is not binding, and 
critics have asked whether the 
“reproductive rights” it bestows 
on every person have any mean- 
ing, given that there is no arena in 
which they can be enforced. More- 
over, in many countries which 
gave their support to the text, peo^ 
pie enjoy only limited political 
and legal ri ghts 

However, there is cause for hope 
that governments will embrace 
much of the Cairo text. As the 
population “dock” in the confer- 
ence hall’s centre reminded them, 
by registering more than one birth, 
a second, tt Is in their own. inter- 
est to help people Hmtt the size 


. -V*: 


There are ater strong arguments 
that Cairo wa£ right to persist 
with the more ambitions pacts of 
flgwndfl dnmmiontr fa, 

ttitp the UNs statement of Tmnqm 
rights, an attempt jo drew a-com- 
mon thread of agreement between 
states of wideSr'differing cultures. 
Mrs NaBs Sadlk. director of the 
UN population fond, who chaired 
the conference, deserves credit for 
her determination to spin that 
thread through one of the most 
sensitive areas of- politics and 
human relationships.. . . 

The price of sud& agreeme&ts is 
hypocrisy: govern m ents may well 
have signed something they have 
n/ ) Tp+<*nHf\n of enforcing. One del- 
egate from western Europe com- 
mented tha^inignoring the real- 
ity of coantrtes’recmxlscm family 
pteudns ’TPshoirtL Eke ignoring 
an elephant in -jour bedroom". 
But the Cairo at least 
provides a stan^rd against winch 
their actions can be judged. 

That have 

been fetfQ bnemdex^ar reached 
more quickly, without the Vati- 
can. In fnftrtwtng on abortion — 
although the text-mentions the 
issue only as a threat 'to woman's 
health - it stalled days of debate, 
and may also have damaged pub- 
lic support for tire Cairo policies. 
The Vatican attended Cairo 
htwnyy of its status as permanent 
observer at the UN.Butits role 
appeared anomalous, as the only 
religion represented, and as the 
only state with a birth rate of 
sera. 

• In the forthcoming UN confer- 
ences on social deyatopmenl and 
on woman, governments should 
consider how for they want to 
accommodate Rama in. the formi- 
dable but worthwhile task of 
reaching - consensus on these 
highly contentious questions. 




It is almost 10 years since British 
Telecommunications was priva- 
tised under the watchful eye of an 
independent regulator. Since that, 
gas, electricity and water have fol- 
lowed the same path, 
will also oversee the 
of British Bail and postal services. 
Regulation is here to stay. 

This is despite some discontent 
ova- the regulators’ record. The 
recent water and electricity price 
reviews are widely judged to have 
tet the companies off too lightly. 
Until recently, the regulators were 
charged with ovar-zealousness 
(largely by the companies they 
regulate). Now they stand accused 
of treating their industries too 
generously, with Ugber4haxHieo- 
essary prices, growing dividends 
and fet salaries for top executives. 

In practice, regulators are 
always likely to disappoint the 
consumer. There is every incen- 
tive for regulated companies to 
underplay the scope for efficiency 
savings. And regulators ca nno t 
precisely calculate the efficiency 
gains that are possible. If the regu- 
lator is overamblttous, the conse- 
quence could be failures in vital 
services that would also draw pub- 
lic opprobrium- In the absence of 
Solomon’s judgement, regulatory 
decisions will tend to tot towards 
the shareholder. 

A small tilt need not fatally 
wound the system if it is demon- 
strably outweighed by the benefits 
of privatisation- These include 
lower prices in' some industries. 


bettor service in most and new 
investment after decades of Trear 
snry parsimony- But 'if the tilt is 
to be mimmjsed, taflutators toast 
'iwehfrtj i Sf* an aggressive approach 
■ tir&ai^fedustife? afcuT a'shepticSP) 
eye bn corporate pleadhig- 

There are therefore few attrac- 
tions, bl yesterday’s proposals 
from :SKilrfWeaidng 'lostituto for 
Public PoHfiy Research tirdo away 
with individual regulators and 
give the gov e r nm ent a st ronger 
role toregulatksa- The IPPR wants 
to set up regulatory commissions 
representing “stakeholders” such 
as suppHere and employees, with a 
requirement to operate under 
industrial policy objectives set by 
the government This would seri- 
ously weaken regulation by oper* 
tag it up to lobbying by special 
interest groups, many with tittle 
commitment to efficiency or low 
prices. It would also reintroduce 
the short-term political pressures 
that were so disastrous for the old 
nationalised industries. 

Some of the regulated industries 
could be set more demanding tar- 
gets. Regulators? detiakms might 
win greater public support if they 
were reached hi a more open fash- 
ion. And parliament should, 
encourage them to account for 
their derisions by appearances in 
front Of select committees. But the 
individual accountability and 
independence of the present sys- 
tem has delivered benefits that 
should not be thrown away 

ligbtiy- 


Canada crumbles 


The Canadian dollar soared to a 
seven-month high yesterday after 
the .separatist Parti Qufibdcois,' 
won a comfortable majority in the 
Quebec legislature. This was not 
just another ttMtawa* of markets 
believing that bad news is good 
and trice versa. Nor does it reflect a 
belief that Canada would be better 
| off without Quebec - though that 
’ belief Is held by an increasing 
1 number of Englisbrspeaktag.Cana- 
I ftiang , particularly in the west of 

■ the country. In feet the markets 
' had discounted time PQ’s victory 

' well in advance- What they were 

■ reacting to was the narrow margin 
of that victory in actual votes, 
which confirmed opinion poll evi- 
dence that most Quebeckers do 
not want independence. Only 30 
per. cent (against 56) say they 
would vote yes if a refere nd um 
were held now. 

The new government is pledged 
to hold such a referendum in 1995. 
Quebeckers, unlike the Czechs 
and Slovaks two years ago, will 
not be swept into divorce by their 
elected leaders without a chance 
to say whether that is. what they 
really want Yet the markets may 
be too hasty in assuming that tire 
PQ will be unable, after a year in 
office, to drum up a majority for 
independence. 

Unaided, no doubt it would be. 
But it may get decisive help from 
disgruntled English-speaking 
Canadian^; and Aren th e federal 
prime minister. Jean Christian, 
whose interest and duty alike are 


to hold Canada together, but who 
commands little, respect in his 
native Quebec. What drove Czechs 
and Slovaks apart was hot so 
much the amhitfoa of their leaders 
as each side's irritation at the oth- 
er's unwillingness to accept or 
even understand , its. priorities. 
Between Quebec and the rest at 
Canada a similar deadlock fa™ 
developed, as the faflnre of the 
Meech Lake and Charlottetown 

agreements showed. 

Both sides may feel,' after 
another year of acrimonious nego- 
tiations. that - separation has a lot 
to be said for ft There is no risk of 
a Yogoslav-style.confllcL North 
America would not be so different 

with four states from whet it is 
with three. This indeed has been a 
big part of feePQ’s argument, 
similar to the “Scotland in 
Europe* slogan of the Scottish 

National party. 

- Yet it cuts both ways. If Que- 
beckers wish to retain the same 
passports, currency and trading 
arrangements they now have, wffl 
theprinandoonf^sum mvolvedin 
even the most “velvet” of divorce 
proceedings - the wrangles; over 
natural resources and public debt, 
the matoiii8m..urtibe-n^figeiipqs. 
peoples, the orphaning of the 
Atlantic provinces* Including New 
Brunswick with its substantial 
lfrenclhspe&fctag minority -reaBy 
be worthwhile? Onee they had 
done It, many Canadians '-and 
many Quebeckers might have 
fflfflcuhy to remembering why. 



ona Sahlin, the 
popular young 
- party secretary of 
Sweden’s Social 
Democrats,, had a 
disarmingly frank message for her 
audience of find- time voters and 
teachers in a school hall in Stock- 
holm last week. 

“If you are a Social Democrat,* 
she declared, “yon think it is ter- 
rific to pay taxes. For me, taxes are 
the finest expression of what poll-# 
tics is about" 

She was answered by a burst of 
spontaneous applause. 

Out of place as it might sound tn 
almost any other western nation, 
Ms SahHn’s statement appears to 
capture the popular mood in Swe- 
den as the country prepares for a 
general election next Sunday. Three 
years after' the youthf ul Mr Carl 
Bifot came to power at the head of a 
centre-right coaUticin dedaring the 
“Swedish model” to be dead, fee 
appe ti te for radical reform of the 
. country’s famously generous state 
welfare system has waned. 

Instead, fee Social Democrats - 
natural party of government in 
Sweden for most of this century - 
seem poised tn return, promising to 
defend the welfare state and to raise 
taxes if necessary to pay for it 
' Opinion polls show a swing to the 
left. Most predict Mr fogvar Carte- 
son’s Social Democrats will lead the 
next government; either as a minor- 
ity administration or in alliance 
with one or more smaller parties of 
the centre or left. 

Not surprisingly, the financial 
inarioeta rod Sweetish business lead- 
ers are worried. This weak; the 
chtofa of Volvo, Ericsson, Store and 
ABB’s Swedish division - the coun- 
try’s four biggest exporters - joined 
forces to warn that inves tm e n t in 
Sweden was under threat if a new 
government raised taxes. 

What preoccupies the financial 
markets is the giro of Sweden's bud- 
get deficit - now naming at 11 per 
emit of annual gross domestic prod- 
uct - and its spiralling public sector 
debt, aprivalent to almost 100 per 
cent of GDP. The fear is that a tea- 
leaning gover n ment will be unwfll- 
ing or unable to force through the 
tough fiscal policies required to 
reduce the deficit and bring the 
debt under control. 

.Such, worries have already pushed 
up interest rates sharply in recent 
mouths to levels well above those of 
Sweden’s European competi- 
tors. This in turn has begun to 
cramp the economic recovery that 
began late last year: the official 
forecast for gross national product 
growth in 1995 has recently been 
reduced from 3 per cent to about 2 
per cent - , 

■“A vicious drefe mw.ftrisen where 
interest rates rise.' farther and the 
domestic economy. is hit By a dou- 
ble-dip,” wrote Nortibahken’s econo- 
mists in a report this month warn- 
ing of farther market convulsions if 
the new government did not quickly 
get to grips wSEThe deficit 
^’Tbe scale of tbe problem is enor- 
mous - underscored by file feet that 
after three years of government 
under a prime mini star committed 
to radical economic reform, the 
economy is now more do minate d by 
the state than it was when Mr 
Bildt’s four-party coalition took 
over. Small wonder that many 
observers question whether a Social 
Democrat-led government will be 
able to summon the political will to 
tackle Sweden's deep structural ■ 
problems in the public sector. 

Public expenditure now eats up 
by far the highest proportion of 
gross domestic product of any coun- 
try in the Organisation for Eco- 
nomic Cooperation and Develop- 
ment (OECD). U has risen to 73 per 
cent in 1993 from 60 per cent in 
1990, compared to an OECD Euro- 
pean average of around 50 per cent. 

Tax revenues as a proportion of 
GDP are second only to Denmark’s 
at just under 50 per cent Social 
benefas account for same 40 per 
cent of disposable Income. More 
than 30 per cent of the workforce is 
employed in the public sector, a 
share some 50 per cent above the 
level , of other smaller ‘European 
countries. 

These figures defy the Impression 
promoted by Mr Bfldf s government 
that Sweden has forsaken the egad- 


The limits of tax 
and spend 

If Sweden's Social Democrats win Sunday’s 
elections, they will struggle to maintain 
current welfare spending, says Hugh Camegy 


* * ^ «- 





tartan, statist path relentlessly pur- 
sued by the Social Democrats dur- 
ing most of the 53 years they held 
power between 1932 and 1991. 

In some respects, however, the 
figures do Mr Bfidt an injustice. 
One reason for the baDoauing bud- 
get deficit was the recession he 
inherited from the previous Social 
Democrat-led government - Swe- 
den’s longest and deepest slump 
since the 1990s. 

Unemployment bag shot up from 
less than five per cent of the work- 
force to around 14 per cent, includ- 
ing those on government-financed 
training' schemes. This has cost the 
state the equivalent of more than 
haUTThe budget deficit of SKrlSOtan 
(£15.4hn) in the last budget year. 
The government was also forced to 
pledge seme SkrtObn in' direct aid 
and guarantees to rescue the banks 
from & loan-loss crisis that engulfed 
them ’in ' 1992. 

What Is mare, Mr Bfidt can claim 
some notable achievements In his 
tad to redress the structural imbal- 
ance in the. economy between the 
public and private sectors. 

A privatisation; programme has 
raised mare than SKr20hn. Deregu- 
lation has increased competition in 
telecommunicatl ons and broadcast- 
ing - Sweden's telecoms and broad- 
casting markets are among the 
most competitive In tixe world - and 
is on its way in the energy sector. 
Capital gains taxes have been 
reduced and taxes on dividends 
scrapped. Industry, enjoying an 
export boom spurred by devaluation 
and productivity galnsi has been 
u nanimo us in praising the govern- 
ment for creating a favourable busi- 
ness climate. 

Even the welfare system has 
undergone some reforms. A reduc- 
tion in sickness benefits, for exam- 
ple, has helped pb» g h absenteeism 
rates - once as high as=25 par emit. 
The basic rate of unemployment 
benefit has been brought down from 
90 per cent to 80 per cent of previ- 
ous salary. 


Perhaps most importantly of all, 
the Bfidt government has negoti- 
ated terms for Sweden’s entry to the 
European Union which, if approved 
in a referendum in November, will 
shift the country irrevocably away 
from its traditional Isolationist 
stance and reinforce the pressure 
on any government in Stockholm to 
keep the public ffoancfls in order. 

Nor is the Social Democratic 
party itnmnna to change. It is easy 
to forget now that during his time 
in office up to 1991, Mr Ingvar Carte- 
son, the party leader, presided over 
a number of significant reforms 

Wbteli wtemmpri from reafomttan 

that “the Swedish model” was 
becoming unsustainable. 

it was the Social Democrats who 


‘What we are seeing 
is a kind of nostalgia 
- a longing for the 
past. lids is a 
problem for the 
Social Democrats' 


instigated financial and currency 
deregulation, who introduced a 
landmark reform, of fee income tax 
system in 1990, began to introduce 
contracting out of public services 
and who, in a radical change of 
party policy, lodged Sweden's appli- 
cation to join the EU. 

Ms Sahlin, widely regarded as a 
likely successor to Mr Carlsson, 
says the economic crisis that 
exploded at the turn of the decade 
awoke the party from “a Catty tale 
where we were sleeping without 
realising what was really going an”. 

She adds: "We have tried to stop 
pretending that everything we had 
can be kept We are trying to see 
what is the essence of the Swedish 
model, to see which parts we can 
keep. We will cut down what you 
get from benefits in order to 
sustain the schools, the welfare 


and the child care systems.” 

An gvawpfe of the path Sweden 
might follow lies in Denmark, 
which was confronted with a simi- 
lar crisis in the earty 1980s. In 1982, 
a new government dominated by 
the Conservative party of Mr Foul 
Schlttter and the right-wing liber- 
als . of Mr Uffe EUamann-Jensen 
embraced a tough fiscal and mone- 
tary programme which eventually 
brought the public finances into 
balance. 

But that coalition was in power 
for an uninterrupted 10 years. State 
spending is still above 60 pa* cent of 
Denmark’s GDP - and the welfare 
state is still at the centre of political 
contr o versy, with Denmark facing 
its own election three days after 
Sweden’s. 

The Danish achievement now 
looks beyond the grasp of Mr Bildt, 
whose Moderate party, with a sup- 
port base of no more than 22 per 
cent of the Swedish electorate, is 
the only mainstream Swedish party 
fully committed to radical struc- 
tural change. 

Mb Birgitta Swedenborg, deputy 
director of the Swedish Centre for 
Business and Policy Studies, says 
the reforms enacted by the BMt 
government have been limited tn 
part because fee Liberal and Centre 
party coalition partners never 
shared the enthusiasm for a radical 
change of direction shown by the 
Moderates. 

"The realisation frut tha Swedish 
model didn’t work never did run 
very deep in Sweden," she says. 
“People are still accustomed to 
thinking that the Swedish model is 
something other countries seek to 
emulate. They don't realise that the 
Swedish model is something most 
countries are warned against these 
days." 

The Social Democrats readily 
accept that current levels of public 
expenditure are unsustainable. Mr 
Gdran Persson, the shadow finance 
minister, is regarded as a 
tough pragmatist who is determined 


Observer 


Corzine goes 

SOlO ;i 

■ Goldman Sachs’ recent* . 
performance may have been hit by 

poor results onits trading, 
activities, but the choice' of Jon 
Cortina, 47, as the firm’s new settlor 
partner is a reminder of^ where the 
real power in the firm fies. J Corrine 
has been' With Goldmanfor 20 years 
and has come up through the ranks 
as fee partner In charge ^trading 
governments, mortgage-backed 
securities and money maricet 
instruments. Os new number two, 
Tfank Paulson, 47, is tbetevestment 
hanking man. ■ 

In tiie past, Goldman has tended 
to split fee top job by appofoting 
two co-chairmen. Robert Rubin 
shared the job with Stephen - 
Friedman before he joined the 
(Staton administration as chairman 
of the National Economic Council, 
and before that the firm was 
dominated “by John Whitehead and 
John Weinberg. Doubftog up at the 

top nf Hiv i rtVBrijnmt' hwiilr.lia«i . 


aKferagh it has always worked well 
in Goldman’s case. Gfonbfs age. 


new regime will work equaBy wefl. 


Risky business 

■ Traders on the foreign exchange 
markets are clearly hurting more 


and more. After calling a turn in 
the dollar recently, the nubfiaher of 
a reputable daily marra report was 
contacted by a chart who. 


threatened to unleash a/aomupcm 
him. It is not eirtirrfy clear which 
currency the irate caller/ friend or 
enemy is long or short of, but so far 
the dollar has failed to torn, and 
poUce protection has not been 


Splinter group 

■ Forget the hl^i-tecii surveinaiice 
gadgetry; clearly, what national 
leaders need to equip themselves 
with are solidly-rooted trees. The 
magnolia that blocked the kamikaze 
aircraft attack on^ the White House 
is .not the first example of handy 
arborial defences. John Meite - and 
his cabinet perhaps owe their lives 
to the cherry-tree that deflected' an 
IRA mortar aimed at lO Downing 
Street three years ago. What more 
proof do we seed that George ". 
Washington (fid himself a - 


Prickly 


■ Apart fromhetag retefively ! 
eostijr exercises, corporate identity 
overhauls are ndt for the . 
fainthearted. There's always that 
mggfinglifcBe weary that fee new - 
moniker translates info some 


At least Mount Charlotte Thistle 



*1 drink to remember inflation' 

Holds, which yesterday tmvefied its 
four star establishments as a 
se p a rata entit y oafled ahnnly 
Thistle Hotels, had only a new logo 
towony about But how to 
differentiate itself from Janflne 
M&ftaGon, Encyclopaedia 
Britsumica, The Scotsman and 
countless other ouffite that also 
employ the prickly plant In their 
livery? 

A stickler for detail chief 
executive Robert Peel 'sport part Of 
the mfilioa odd pounds that the 
whole affair cost on getting Ms 

Itttnirtnft to cu ngntt bO taHtwil . 

drawings. 

The red and green design that 
finally emerged was derived from 
the Cotton Thistle, proudly pictured 


in yeste r d a y’s bumf (with its Latin 
name spelt wrongly). Apparently 
it's a particularly hardy member of 

the family and grows to a 
considerable height It is also bettor 
known as fee Scotch Thistle. 

But you can see why London’s 
largest hotel operator chose not to 
mention that little detail .. . 


Tick Tock 

■ Six weeks is obviously a long 
time in Swiss Industry. As recently 
as July, the 65-year-old chairman of 
both the drugs group Roche and of 
Zurich Insurance let it be known ha 
had no intention of retiring. 

Past movers, these Swiss. Gerber 

has now decided he will cede the 
Zurich chair at the next agm to Us 
chief executive RolfHQppi. “Things 
have their time,” is how he puts it 
these days. So has he decided to set 
an example to the extensive 
coHectkm of grey beards cluttering 
the country’s boardrooms? T am 
not a school teacher." 

Gerber still claims to be staying 
put at Roche. But for how long? 
“The gods deride how fit you are. 
But I would be the last one to hang 
on if my colleagues did not want 
me." Roughly what he said in July. 


Turned off 

■ Can’t get vour Kania in 
downtown Washington DC? Blame 
the European. Union. 

Together with the Jamaican 


to cut the budget deficit 

He has proposed a package of tax 
increases and spending cute which 
would narrow the budget gap by 
SKr61bn over four years, and stop 
fee public debt growing by 1998. He 
has also said that if this does not 
prove sufficient he will come back 
for more. .. 

At the same time, the Social Dem- 
ocrats want to stimulate growth to 
reduce unemployment. They are 
promising Investment incentives 
and even corporate tax cuts. Ms 
Sahlin, a former labour minister, 
talks of fee need for flexibility and 
reform in a labour market still 
marked by low wage differentials 
and rigidities in hire-and-flre rules. 

What the Social Democrats have 
beat careful not to do fa set a target 
for reducing the public sector. Their 
approach Vs essentially defensive, 
seeking to preserve as much of the 
old Syrian as possible. 

This commitment is extremely 
attractive in a country where up to 
two- thirds of the electorate depords 
on the public sector for fee bulk of 
personal income - either through 
direct employment or welfare bene- 
fits. The regiment of state-depen- 
dent families forms a formidable 
constituency against radical reform 
of the system. 

"People have seen some changes 
over the past three years and they 
didn’t like them very much.” says 
Mr Olle Westberg, editor of Expres- 
ses the country's biggest-selling 
newspaper and until last year chief 
aide to Mrs Anne Wlbblo, the cur- 
rent finance minister. 

“What we are seeing now is a 
kind of nostalgia - a longing for 
what we had before. This Is fee 
problem for the Social Democratic 
election campaign. They warn of 
hard times still to come, but they 
somehow transmit the feeling that 
it is possible to go back to whore we 
were before.” 

T he Social Democrats' 
proposals on the budget 
deficit were cautiously 
welcomed in fee finan- 
cial markets and helped 
stem the recent rise In Interest 
rates. But their plan falls well short 
of the spending cuts proposed by Mr 
Bfldtts government, and the empha- 
sis on tax rises has brought strong 
criticism from Industry that the 
package was likely to deter invest- 
ment rather than encourage tt 
Behind criticism of proposals 
made by Mr Persson. the shadow 
finance minister, lies a lingering 
tear that the Social Democrats, 
faced with a choice between deep 
cuts in the welfare system and 
printing money to finance its pres- 
ervation. will choose the inflation- 
ary route as they did consistently in 
the 1960s. 

Than is, however, an important 
differe nce wife the past Assuming 
that voters approve EU membership 
in their November referendum - 
and the Social Democratic party 
leadership will campaign strongly 
for a Yes vote - the government in 
Stockholm will no longer have the 
freedom to inflate Its way out of 
trouble, ft will find itself obliged to 
meet the demanding criteria for 
budgetary and economic conver- 
gence set by the Maastricht treaty. 

In its report on the Swedish econ- 
omy early this year, fee OECD 
warned that at some stage Swedes 
would have to choose either to shift 
emphatically away from universal 
welfare provision to a more selec- 
tive system, or dramatically reduce 
the generosity of provisions. 

“The current situation is one 
where changes of the system are 
urgently needed. Given that the Om- 
its to sound financing of welfare 
expenditure have already been sur- 
passed, Urn country simply cannot 
continue as if nothing has hap- 
pened," the OECD said. "It must be 
made clear that there is no way 
without sacrifice to stem the rising 

tide of unemployment and budget 
deficits and to improve allocative 
efficiency.” 

Mr Bfidfs government has made 
a start in tough circumstances. It is 
doubtful, however, that a new gov- 
ernment after Sunday will have 
much of a mandate to continue the 
task. And the economic and politi- 
cal circumstances are, if anything, 
getting more difficult 


government the EU is now 
claiming success in an eight-year 
struggle to persuade Jamaica's 
ganja - marijuana - farmers in the 
north of the island to produce other, 
less lucrative, but perhaps more 
stable crops. 

The EU has been subsidising 
some 5,000 farmers with seeds, 
chemicals and equipment turning 
them off dope and on to carrots and 
other assorted veg. Jamaica 
traditionally has been the 
third-largest supplier of marijuana 
to the US, after domestic US 
supplies and Mexican imports, 

Tm not Tnaking as much money 
as I did from growing the other 
stuff” confessed one convert “But 

what I am earning now comes in 

every week instead of twice a year. 
And I can sleep at nights knowing 
that the police win not be coming to 
bum my crop and arrest me, or that 
a drug trafficker win try to shoot 
me.* 

“Pssstl Wanna same on some 
carrot juice?” Just doesn’t have the 
same ring, somehow. 


Birth pangs 

■ Nice to see the Dartmoor town of 
Okehampton doing lts bit to 
support the United Nations 
International Conference on 
Population and Development in 
Cairo. A notice displayed at the 
town’s leisure centre lists activities 

for ttin» yitttrcffln, fry 1 ™# n g 

“anti-natal” classes. Bit drastic, 
isn’t it? 


% - 




16 


1 A FINANCIAL TIME 
( for change 


| *»* | 



FINANCIAL TIMES 

Wednesday September 14 1994 



ifanubGtuKtiJt 
Generating sets, 

aerospace fliouno 


A 


Dale Power Systems pic 

■WBffinssssiasssar 


Belgian foreign minister wins European and US support 


Claes poised to become 
Nato secretary-general 


By Lionel Barber in Brussels 

Mr Willy Claes, the Belgian 
foreign minister, has emerged as 
the clear favourite to become the 
next secretary-general of the 
Nato alliance. 

Mr Claes, a Flemish socialist 
who won plaudits for his forceful 
leadership during last year’s Bel- 
gian presidency of the EU, has 
secured broad support among 
European allies. 

The US has apparently tipped 
the balance by signalling it has 
no objection to Mr Claes's bid to 
succeed Mr Manfred Warner, who 
died of cancer last month. '"There 
is a feeling that he could grow in 
the job like Manfred Warner," 
said a Brussels diplomat 

A final decision on the top 
Nato post is likely to take place 
when EU foreign ministers meet 
their Canadian and US counter- 
parts at the UN general assembly 
in New York later this month. 

Mr Claes said last night "I 
have said I am interested ... but 
1 am not lobbying and it is in 
the interests of the credibility 



Hr Claes: forceful leadership 
earned hint broad sup po r t in EU 

of the organisation (Nato] 
to have a serious consensus.'' 

Neither of the two other candi- 
dates - Mr Tborvald Stoltenberg, 
a Norwegian who is the UN medi- 
ator in former Yugoslavia, and 
Mr Hans van den Broek, the 
European commissioner for 
external political affairs - looks 


strong. Mr van den Broek is will- 
ing to step aside after the new 
Dutch coalition government's 
decision this week not to oppose 
Mr Claes. He would like to stay 
In Brussels and has secured The 
Hague's support for holding on to 
his present portfolio. 

Mr Stoltenberg's candidacy is 
trickier to handle. Until recently, 
Norway thought it had an inside 
track on the job after it agreed to 
support Germany's campaign to 
give Mr Warner a second term. 

Rumours that Mr Claes’s 
appointment could force Mr 
Karel Van Bfiert to step down as 
Belgium's EU commissioner 
responsible for competition pol- 
icy, were dismissed in Brussels 
last night Diplomats said other 
parties in the Belgian coalition 
government would not lay claim 
to the Commission nomination 
just because two Flemish social- 
ists would hold two top jobs. 

Traditionally. Hie post of Nato 
secretary-general goes to a Euro- 
pean, while that of Supreme 
Allied Commander is reserved for 
an American. 


Wall St reassured by modest 
rise in US consumer prices 


By Jurek Martin in Washington 

US retail inflation remained 
modest in August, encouraging 
Wall Street, which had taken 
fright at last Friday's sharper 
than anticipated jump in whole- 
sale prices. 

The consumer price index rose 
by 0.3 per cent, the same as in 
the previous two months. This 
compares with market forecasts 
of a 0.4 per cent rise and the 
month’s wholesale price rise of 
0.6 per cent 

The Dow Jones Industrial 
Average was up 21 at 3£81 at 
midday, though the bond ™rfcpt 
reaction was more restrained, 
with the 30-year long bond up & 
to yield 7.60 per cent 

The government yesterday also 
reportal a widening of the trade 
and current account deficits in 
the second quarter of the year. 
The shortfall on goods and 
services rose to $27bn from 


$2t3bn in the first three months, 
while the current account bal- 
ance, which covers all interna- 
tional transactions, was in the 
red by $37bn, against a revised 
$32.3bn In the January-March 
period. This was the largest quar- 
terly deficit in six years. 

The merchandise trade deficit 
expanded to $4U&m from $37bn, 
reflecting the relative strength of 
the US economy against that of 
its principal trading partners. 
Exports did increase - to 
$122.7bn from gllSbn - but less 
than imports, which rose to 
$164.4bn from $155bn in the first 
quarter. 

The consumer, price index now 
stands 23 per cent higher than in 
August last year and has risen at 
an annual rate of 23 per cent in 
the first eight months of this 
year. 

The so-called “core” index, 
which strips out the more vola- 
tile food and fuel sectors, has 


also risen by 23 per cent in the 
two periods, last year the overall 
CPI went up by 2.7 per cent 
In August, as throughout the 
summer, the rises in interna- 
tional oil and coffee prices were 
the main upward forces, with the 
energy component of the index 
rising by 1.4 per cent and the cost 
of a gallon of petrol at the pump 
going up by 3.7 per cent. The 
price of coffee, up 22 per cent in 
the month, pushed the grocery 
index up by (16 per cent 
But this was counterbalanced 
by otherwise modest increases in 
the food sector and by a one per 
cent drop in clothing prices. 
Some of the sharp rises in the 
cost of meat recorded In the 
wholesale index are expected to 
work their way through to the 
retail level But the prospect of 
good harvests should mitigate 
this impact on the index. 

World Stocks, Section II 


Toyota to double car output in N America 


Continued from Page 1 

existing capacity in North Amer- 
ica but will achieve its target by 
using a second line at TMM, 
which, came on stream in March 
this year, and by raising produc- 
tivity. Annual production at 
TMM will increase from 234,000 
last year to 400,000 in 1996. 

Toyota’s overall engine produc- 
tion in North America will more 
Bon doable to 440.000 units from 
207,000 last year. Engine produc- 
tion at TMM will increase from 


207.000 units to 350,000 units In 
1996 , including V6 en gines, while 
production at TMMC will 
increase with the addition of a 
new engine plant, to almost 

90.000 units annually. 

Increased local production will 

lift exports from North America 
by 60 per cent from 50,000 units 
in 1993 to about 80,000 units. 
Exports from Japan to the US 
will fell by nearly 23 per cent in 
1996 to about 400,000 units 
against 554.000 last year. 

Toyota emphasised that it 
would not cut employment in 


Japan to cope with the decline 
but expected a recovery in the 
Japanese market to keep Its 
domestic factories occupied. 

The effects of the shift to North 
America will at least be felt 
among the hundreds of Japanese 
car and car parts subcontractors 
that depend on Toyota for their 
survival. In the past year and a 
half, 127 subcontractors have 
closed under the pressures of a 
high yen and declining produc- 
tion in Japan, according to Tei- 
koku Data Bank, a private 
research company. 


Russia may 
curb sales 
of vodka 
imports 

By John Thomhfl and 
Dmitri Volkov in Moscow 


Russia may cut excise duties on 
domestic vodka as part of an 
attempt to curb consumption of 
bootleg products and low-quality 
imports, which are believed to be 
responsible for a sharp rise in 
deaths from alcohol poisoning. 

According to industry repre- 
sentatives, domestic vodka pro- 
ducers have experienced a "cata- 
strophic decline” in sales this 
year as their products had been 
undercut by cheaper imports, 
especially from Germany and 
Poland, ami bootlegged alcohol, 
which evades taxes. 

Fashionable high-quality west 
ern vodkas, such as Absolut and 
Smirnoff; are popular and their 
sales would be hit if the duty 
system is changed to favour local 
producers. 

The gov e rnment is considering 
raising tariffs on imported 
liquors, as well as imposing quo- 
tas cm imports from other coun- 
tries in the Commonwealth of 
Independent States - although 
such a move would ran against 
the grain of recent trade talks. 

Domestic vodka producers 
have called for excise duty to be 
reduced from 85 per cent to 75 
per cent following a cut from 90 
per cent earlier this year. They 
argue that a further cut would 
lead to higher sales of legally 
produced liquor, and increase 
the government’s overall tax rev- 
enue. They also say it would 
reduce the death rate from alco- 
hol poisoning caused by low- 
quality liquor. 

However, such a move would 
stimulate concerns about total 
levels of alcohol consumption. 

A report from the health min- 
istry, presented yesterday to 
ministers at a meeting of the 
commission on economic prob- 
lems, estimated the death rate 
from alcohol had almost doubled 
in a year to 37 per 100,000. 

The commission discussed 
ways of faAKng the problem - 
including lowering exdse duties 
to encourage drinkers to buy 
safer liquor from approved pro- 
ducers - and promised proposals 
in 10 days. But the finance min- 
istry said lower excise duties 
would damage budget revenues 
from alcohol, which account for 
a significant proportion of the 
g ove rn ment’s income. 


Canada rise 


Continued from Page 1 


demonstrate their profound 
attachment to being a full part 
of Canada." 

The Bank of Canada inter- 
vened to slow the rising Cana- 
dian dollar, trading at 7334 US 
cents at noon. The gap between 
the yield on Long-term Quebec 
provincial bonds and govern- 
ment of Canada issues narrowed. 
Canada’s commercial banks 
responded to improvements by 
cutting their prime lending rate 
from 7.25 per cent to 7 per cat 


FT WEATHER GUIDE 


Europe today 

A frontal zone associated with tow pressure 
over western Franca will cause rain in the 
southern UK, the Benelux, northern Germany 
and western Poland. MeanwhBe, cod air will 
move into central Europe. Thunder storm s 
will form near the boundary of warm and cool 
air over eastern France, Austria, Switzerland 
as well as northern and central Italy. 
Significant rain wilt also affect north-west 
Spain. The rest of the Mediterranean will 
continue sunny and warm. Rain is also 
expected In Ireland and central Scandinavia 
owing to another disturbance. Cloud and 
sunny spells will occur elsewhere in Europe 
and In western Russia. 

Five-day forecast 

As the weekend arrives, significant rain wDI 
affect Scandinavia. Numerous showers, some 
with thunder, writ] also occur in the Alps. 
Continental north-western Europe wfD be 

unsettled with showers. Elsewhere cloud will 

be interspersed with surety periods. The 
Mediterranean wiM be sunny. Strong winds 
will occur over the North Sea on Thursday 
and Friday, it will continue unseasonably cool 
from Scandinavia to France. 


TODAY’S TEMPERATURES 



Situation at 72 QMT. Tempo&urBsmax&rwjnifarday. forecasts by Metoo Consult of the N ottm it aK& 



Maximum 

Beijing 

sun 

27 

Caracas 

thund 

32 


Crista 

Belfast 

rain 

14 

Cardiff 

rah 

15 

Abu Dhabi 

sun 

40 

Belgrade 

sun 

33 

Casablanca 

fair 

23 

Accra 

doudy 

26 

Baffin 

cloudy 

22 

Otago 

Hand 

29 

Algiers 

Ml 

28 

Bermuda 

lair 

30 

Cologne 

ram 

IB 

Amsterdam 

rain 

16 

Bogota 

drzzi 

19 

Dakar 

(air 

30 

Athens 

sun 

32 

Bombay 

cloudy 

30 

Dates 

tes- 

31 

Atlanta 

eun 

31 

Brussels 

rrti 

15 

Dan 

ted 

34 

8. Alios 

Cloudy 

17 

Budapest 

sun 

30 

Dubai 

sun 

38 

B -ham 

rain 

14 

C.hagen 

shower 

16 

OubGn 

shower 

14 

Bangkok 

shower 

33 

Cabo 

sun 

35 

Diixovnflc 

sun 

30 

Barcelona 

sun 

24 

Cape Town 

sun 

21 

Edinburgh 

Cloudy 

13 


Your frequent flyer program; 
Lufthansa Miles & More. 

Lufthansa 


Faro 

tab 

24 

Madrid 

SU1 

16 

Rangoon 

rimer 

30 

FranMUt 

drawer 

18 

Majorca 

SUl 

24 

Reykjawfc 

sun 

6 

Geneva 

thund 

15 

Malta 

lair 

30 

Rio 

frir 

26 

Gtoraftsr 

ter 

25 

Manchester 

rah 

14 

Rome 

showor 

30 

Glasgow 

fair 

15 

Maria 

cloudy 

32 

S. Fraoo 

fair 

23 

Hamtxxg 

ttMKj 

17 

Molsaume 

Shower 

16 

SeoU 

SUl 

26 

HritfnM 

rah 

15 

MufeoCfty 

thuid 

18 

Shgapore 

cloudy 

32 

Hong Kong 

shower 

30 

Miami 

thund 

31 

StoeSdnim 

cloudy 

16 

HonoMu 

Ur 

32 

M3an 

luc 

23 

Strasboug 

rah 

17 

tataibri 

sun 

28 

Montreal 

lab 

19 

Sythey 

ter 

19 

Jakarta 

Ur 

32 

Moscow 

drzd 

22 

Tangier 

fair 

22 

Jersey 

thund 

16 

Muifch 

tes- 

23 

Tri Aviv 

sun 

33 

Karachi 

an 

33 

Nairobi 

ta 

25 

Tokyo 

rah 

27 

Kuwait 

SUl 

42 

Naples 

fak 

31 

Toronto 

doudy 

25 

L Angeles 

fa* 

26 

Nassau 

thund 

32 

Vancouver 

shower 

18 

Las Palmas 

Sun 

Z7 

New York 

shower 

28 

Venice 

stmrer 

26 

Una 

doutfy 

19 

trice 

shower 

25 

Vienna 

Mr 

28 

Lisbon 

cloudy 

20 

fricosia 

SUl 

36 

Warsaw 

Ur 

25 

London 

rain 

15 

Oslo 

rah 

13 

Washington 

Ur 

28 

Luxboug 

shnvo- 

13 

Paris 

shOwer 

18 

Wellington 

fair 

8 

Lyon 

thund 

18 

n — «l 

rwi 

doudy 

18 

Winnipeg 

drawer 

25 

Madeira 

fair 

26 

Prague 

fair 

26 

Zurich 

thund 

14 


THE LEX COLUMN 


Kingfisher’s flight 


Kingfisher spent a long time 
convincing the City of the merits of its 
Every Day Low Pricing philosophy, 
only to find itself the victim of a back- 
lash in sentiment when earnings 
fafigH to mate'll the rhetoric. Reflecting 
that, tiie shares have dropped 37 per 
cent in the year to date, beaching 
Hiptn on a substantial rfisomp it to the 
price-earnings ratio of the market as a 
whole. At a time when the retail sec- 
tor stands at a premium to tire mar- 
ket, the question now is whether King . 
fjghw is ripe for a re-assessment. 

Althoug h yesterday's interim profits 
were at the bottom end of scaled-back 
expectations, «T>fl like-for-tike sales in 
the core UK businesses stagnated or 
fell, there were std same positive Indi- 
cations. Darty, the French electricals 
retailer bought last spring, performed 
better than some had feared w hen the 
deal was done - indeed without the 
contribution from this source, retail 
profits for the group would have been 
down sharply. B&Q did well to 
improve pro fits in dire market condi- 
tions, and Superdrug showed a wel- 
come, if small improvement in mar- 
gins. It was also encouraging to hear 
the managamamf fey new em phasis on 
the nuts and bolts nature of the chal- 
lenges ahead - an acknowledgment 
that crude price cutting is not the pan- 
acea it was once portrayed to be. 

Given the weaknesses inher ent in 
Kingfisher’s mix of businesses, the 
points of light in yesterday's figures 
were hardly enough to swing senti- 
ment immediately back into its 
fevour. Had Kingfisher really wanted 
to rei nfo rce the positive aspect of its 
message, it should have increased the 
interim dividend in line with its cau- 
tious ft ptimlgm. 

P&O 

P&C is showing the first fruits of 
maintaining its heavy investment pro- 
gramme through the recession. Share- 
holders worried that the management 
had unwisely splashed out on new 
cruisers and container ships will have 
been pleasantly surprised by yester- 
day's 52 per emit increase in underly- 
ing profits. Group return on capital, 
which should reach 16 per cent this 
year, is still nothing to crow about 
But retu r ns will rise as the economic 
recovery continues. Most P&O busi- 
nesses have high fixed costs, so profit- 
ability is s tron gly geared to the level 
of demand. 

P&O is not merely a recovery story. 
The cruiser and container operations 
are well-positioned in growing global 


FT-SE Index: 3121.4 {-7.4} 


Kingfisher 

Share price rriattuq totfre FT-SE 100 Index 



• 70 

Sap1983 
Souoac FT Qraptto 


mar kets. Not only are there more rich 
did people in the world, looking to 
tafra cruises: younger families are 
incr easing ly taking holidays by sea 
too. Equally, the container division 
should benefit if international trade is 
boosted by the recent Gatt agreement 
The main concern is still the impact 
that Eurotunnel will have on P&O’s 
cross-channel ferry business. But even, 
here, prospects look less worrying. If 
the cross-channel passenger market 
continues to grow by anything like the 
17 per cent seen so far this year, Euro- 
hmnri’ s rapacity could be accommo- 
dated without a full-scale price war. 

Caradon 

The enthusiastic response to Cara- 
don's interim figures risks being mis- 
interpreted. The company has under- 
performed the market by some 25 per 
cent this year and yesterday’s 4 per 
cent bounce in its shares reflects the 
lack of unpleasant surprises rather 
than any particular piece of good 
news. Certainly Caradon has pushed 
up the margins at the P illar busi- 
nesses acquired from RTZ last year, 
without drawing heavily on provi- 
sions- But there must be some uncer- 
tainty over its ability to halt the 
decline in margins in US security 
printing. The rise in UK base rates 
also raises doubts about whether 
housing market turnover will be suffi- 
cient to generate much increase in 
spending on the building mater ial s in 
which it specialises. 

If It does not, Caradon will still have 
the prospect of further enhancement 

of margins at Pillar . That might jus- 
tify a slightly higher rating than com- 
parable companies with which it is 


now level-pegging. Extra investment 
on effic ienc y and restructuring Is 
unlikely to prevent a further drop in 
gearing, t ho ugh, and that leads on to 
another uncertainty. At this rata, Car- 
adon could become ungeared in about 
18 months. If organic growth is weak, 
the temptation then will be to go for 
annthw large acquisition. The market 
will not necessarily lot* kindly on 
that, despite the evident skill with 
which Pillar is being absorbed. 

Fisons 

Fisons, stricken by repeated self-in- 
flicted wounds, seems inca p a b le of 
curing itself. For three years, the 
group has attempted to dean its sta- 
bles of questionable trade and 
accounting practices. Each time cl ea n- 
liness was claimed, more mire was 
uncovered. Yesterday was no excep- 
tion. Nor was It exceptional that yet 
another division reported an unex- 
pected profits collapse. The prospects 
painted by management for all three 
divisions were grim. 

The problem is finding a company 
wining to put Fisons out of its misery. 
All the groups with asthma franchises 
have looked and rejected it Some Jap- 
anese groups have also sniffed, arid 
walked away. Even though Fisons' 
market capitalisation has plummeted 
from £3.4bn at its peak in 1991 to 
barely £900m, the company looks 
expensive. Valuing the group on a. 
similar multiple to Glaxo - and that is 
being generous given Glaxo’s better 
q ualit y gaming s - Fisons’ underlying 
worth is about 70p a share. Yester- 
day’s close was 135p- An elegant exit 
would be for Rhdne-Foulenc Rorer, 
with which Fisons now has a series of 
alliances, to buy the company. Unfor- 
tunately, RPR has its own difficulties 
and probably cannot afford the price. 
With a manag ement which still Insists 
the group has an independent future, 
Fisons must limp on alone. 

Savoy/Forte 

Mr Booco Forte may not have won 
the Savoy Hotel for his own group but 
the effort has not been as in vain as it 
seems. The Savoy is never likely to 
earn more than a few million pounds 
and the hid for Meridian is strategi- 
cally much mare important Yet Forte 
needed to generate real value out of 
its Savoy holding, something which 
should become easier with tire change 
in managem ent. Perhaps that will 
eventually give Forte nhnnr-p to 
sell out at a reasonable price. 


C/9 

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CD 


IU 


CD 


INTERIM RESULTS 


Turnover 


1994 


439.7 


£m 


1993 


428.3 


o, 

Profit before interest 

33.6 

33.0 


Profit before tax 

30.6 

29.1 

t % 

Earnings per share 

13.1p 

12.5p 

cc 

Ordinary dividend 

4.3p 

4.2p 


o 

• 

C/9 

LU 

—1 

03 

< 

O 


Copies of the Interim Report for the six months ended 2nd Julv 
1994 from which cbe above is an extract are available from 
19ch September from the Secretary, Delta pl C , 1 Kitigsway, 
London WC2B 6XF. Telephone 071-836 3535. 




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TECHNOLOGY 
IN ACTION 


Diesel engines from 5-2500 bhp. 

Fetbu Croup Headqu«jx«nvTci:-v<M 733 67474. 

Wt/ 


FINANCIAL TIMES 


BUILDER 
CENTER y 


©THE FINANCIAL TIMES LIMITED 1994 


Wednesday September 14 1994 




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IN BRIEF 


Mediobanca keeps 
issue option 


British Steel raises Avesta stake 


increased net profits 7.8 per rent to LZ15.9bn 
(J138-39m) in the year ended June 30- The bank’s . 
directors also agreed yesterday to retain die option 
to relaunch an issue of new shares Fry! «« ■ mu te 
when appropriate. Page 18 

PSO sham rise on buoyancy . 

A buoyant performance by Peninsular & Oriental 
Steam Navigation Company’s cruise cross 
channe l ferry operations helped yesterday to propel 
Us share price 2lp higher to 674p. Page 18 - : 

Ktagfishar advanew 74% 

Kingfisher, the TTC TgfrqTWng gitmp wWrih gtpy* ~ 
France’s Darty, disappointed the marktom sgtite of 
announcing a 7.4 per cent increase in interhn pre- 
tax profite to £8&lrn(3mfi5in). Page 18 ■. 


By Andrew Baxter In London and 
HugtiCarmgy In Stockholm 

British Steel yesterday 

ifjt biggest iynww fatir!iji 
sac* before the recession by.pay- 
ing Cpaom) to raise Its stake in 
Aypsta Sheffield, the big Anglo- 
Swedish, stainless steel producer, 
from 40 to 49.9 per cent. 

The purchase follows the sale 
by.NCC, the big Swedish con- 
struction company, of its 22J5 per 
cent stake in Avesta Sheffield, 
annomwwl in Stockholm parti FT 
m the day. Barclays de Zoete 
We4d paid about SKx2.2bn 
<$289m) for Nee's 35 j66eh shares. 
It sold 15.64m on to British Steel 


and organised a worldwide riser British Steel's stainless steel 
ing of the remainder. 1 .j.^nrities. Until the termination 


isb Steel's resources, tmtelfofis. 
its bolder approach to Investment 
since the and of the recessUfi, 
during which it restricted itself 
to small projects or those with 
short payback times. 

A decision is also pending on a 
SlSOm investment by the UK 
company in Tuscaloosa Steel, Us 
Alabama subsidiary, to create a 
steel plate mini -mill. Observers 
believe the «*tiawk» wfH almost 
certainly go ahead. 

Avesta Sheffield was Conned in 
November 1992 through the 
merger of Sweden’s Avesta with 


month, British Steel would have 
been, obliged to make a general 
: offer for the remaining Avesta 
stmffirii] shares if its sfoke h ad 
risen above 45 per cent 
British Steel said it welcomed 
the opportunity to increase its 
shareholding. Mr Brian Moffat, 
chairman' and chief executive, 
said the merger had gone 
“extremely welT. 

But the OK company stressed 
it bad no Intention of "miring an 
offer for the rest of Avesta Shef- 
field, which last mmiih reported 
first half profits of SKr43lm after 


fi n a nc ia l items, compared with a 
siCrffim loss a year earlier. 

The sale of NCCs stake signifi- 
cantly tips the balance of owner- 
ship in Avesta Sheffield away 
from Sweden. BZW, assisted by 
Ga ze nove and Svemka HamMs- 
banken, placed the shares not 
bought by British Steel with 
institutions mainly to the UK, 
Scandinavia and Europe. 

Foreign interests now hold 
over half the company, with the 
biggest single Swedish share- 
holder, t he gas gron p Aga, holds 
just 12 . pa- cent. 

Mr Per Molto, the Swedish 
chief executive of Avesta Shef- 
field, said he did not anticipate 


any change in the company's 
present set-up as ft is registered 
and headquartered in Sweden. 

British Steel and the other 
investors paid SKr64 for each 
share, a small discount cm Mon- 
day's SKzliS closing price. The 
UK company’s own share price 
fell 3Vip to 14SVip yesterday. 

NCC said it was selling its 
stake as part of a strategy to con- 
centrate on its core operations in 
building, building Tna fpriflla and 
property. NCC has been strug- 
gling against a collapse In the 
Swedish construction market 
which began in 1991, the 
SKrL2bu capital gain from the 
sate will Hft its balance sheet 


It 


Hi 5 15 


Ciifln c Fairvfew outlasts rival 

Cadillac Fairview and Olympia & York Develop- 
ments once bad a lot in common. Both' were ’ 
privately-owned property developers bas&I to 
Toronto. Now O&Y no longer exists asjLg^ngoon- 
oenL whfie Cadillac cxmtfnneSr and on toteraU^. ;• 
goodterms with its creditors. Page 20 £* ? 

Chairman of MKSFC namad 7-?v'-. 

Mr Anthony Neob. is to succeed Mr Rdbex^fottie 
as chairman of Hong Ko ng Securities «"<i Futures 
Commission (SFC), when the latter retires.ot the 
end of tins year. Page 20 .•-•cv 

Anwrican express rebounds 


Tony Jackson asks who stands to gain - or lose — from KKR’s $2bn takeover bid 


:• -.s- r \t V* 

.. -j. ; ;rt‘ 


•. ■,«•-?• r.: 

. ■*. '’.Vi 


and disposals, earnings pm* share at American 
Express, which sagged at the start of the decade, 
have rebounded. Page 21 r . 

Market greets Caradon rise ■ ; t . 

The share price of Caradon, one of BurOpe ! ’s>Uggest 
bufiding materials groups, rose almost 4 per cent ! - 
after the company announced a first-half increase 
in underlying profits of almost a fifth- : 

Pa«e28 ' ... | 

Taylor Woodrow douMos to "• 

Pre-tax profits at Taylor Woodrow, the UK amstrac- 
tion and property group, more thandrtfotedlo " 
£22m (|S4m), from £l0.1m, during the flrstsix 
monthsof this year after a sharp rise in heuse^ 
sales. Page 23 iU- 1 ’ • •' 

Publisher benefits from acq a^rfU ons 

First profits from recent acqidsiticais : and gradually 
rising advertising revenues helped Trinity Interna- 
tional, the newspaper pn hbshTog group, to a pre-tax, 
outcome of £10im (Hft9m) for fto surraouths to‘ 
June 2S, a 15J per emt increase. Pajge 25 

Stagecoach moves up. a,, gw ' • j'* v -I 

Stagecoach, the bfggesfcKxaa^j^to^a^ge r ' 

■ the privatisation oftiie U^hus^^dHy^^iiovledtnp^ 
a gear test week by 

nies which run London’s red buses. Pag*2S : . ; L 

Hce frede set for growth " ‘ 

Thegrowtotow«n4drii»tradBisBh(aytobe‘^- 
nificantiy higher” than expected as a^result of tiiB 
successful conclusion to the Uruguay Booad of 
world trade talks. Page 28 ' ^ 

Companies in this issue ' J 


Adsteam 
AUnutoae-Lonza 
American Express 
Avesta Shefflaid 
BNFL 

Bartons Trust 
Bte 

Btagden 

Bloomstxjry Publish 
Boretan 

Brtt Data Management 
British Stee) 

Cadtttac Fairvtew 
Cartsbarg 
Casts Energy 
Chubb Security 
Ctaremont Garments 
Cotes Myer 
Commonwealth Bank 
Corral RKblat 
QrastaCare 
Cuasine Property 
DBS Data & Research 
Dial Medical 
Domestic & General 
EBC 

Eyecare Products 
FBD 
Haons 
GM Hughes 

Market Statistics 


20 Gambto ‘ 

18 Gbson (kwringa . 

21 Goldman Sachs .' . 

17 Haggas (John) 

12 Int Business Comma. 
21 Irish Parmanant BS . 

18 KKR -- - 

24 Kingfisher 

24 Lon and Manchester 
17 LOP®* 

24 Maybom 

17 Me di obanca 

m Merdiants Trust 
“ MkHbts 
w Owen & Robinson 
21 p& O 

® Paikdean Leisure 

“ ITreHi .ire Cnnr/lf 

ronans roooti 

20 RJR Nabisco 
20 Record 
24 Renault ' 

24 Royal Oak Mbas 
24 Second Alliance 
24 Stagecoach 

18 Trinity Internal! 

2* Usher (Frank? 

24 Village Roadshow 
2* Vymura 
24 Walker (JO) 

18 Watmougha 
20 Wyeuale Garden 


TT; T ot connoisseurs of 1980s 
- Jr+ '‘ftnancial engineering, 
*3l^*Mbtofay?s; *21m bid by 
Kotalbair Kravis Roberts for the 
J® fiodd group Borden brings a 
abstalgic tear to the eye. ' 

JT evokes the high wate r mar k 
of .1980& deal-making. KKR’s 
-$2$Hf purchase of the food and 
. tohsicco gi ant B JR Nabisco. Five 
years an, KER - stiQ the most 
formidable of the' Wall Street 
bdy^oui jhms 7- proposes to pay 
for-Borden not with ready ; 
money, but with RJR shar es. 

Jt js a reminder of KKR’s pas- 
sion leaf complexity. In a deal 
described by one Wall Street ana- 
lyst - not without admiration - . 
as "pure smoke and mirrors’*, 
observers -/are left scratching 
titeir - head s on who stands tej 
gain’ KKk evidently thinks te 
dbeS" Bat vtimt about Borden's 
■ shareholders, or . . indeed 
JOB'S? 

Fig t he ave rage Borden share- , 
holder, KKR’s $14J!5 per share 
oSer is nothing to shoot about A 
year ago the stock .was worth 
more than $19; two years ago it . 
was double that Indeed, $2hn is. a 
piixfol price for a leading US food 
company jrtth sates cf gSu^bn. For 
Sgup, a 

'^&;&'djrae : bn'^Ul^L 

Sadly, however, no one is bet- 
th^ on a better offer coming 
ailing. Borden is to a mess. Its 
sates have dropped every year in 
the past five. In the past two 
years, it has incurred enormous 
fosses; mostly because ai costly 
restructuring plans which the 
company admits have proved 
ineffectual. ■ ■■ 

A year ago it halved its divi- 
dend, then • halved it again. . 
Despite sharp cutbacks in capital 
spending and inventories, cash 
flow has gone oh dwindling. Until 
KER came along; Borden seemed 
headed for the rocks. 

The company’s mistakes are 
are sadly familiar. In the second 


At Borden, it’s got to 
be good for someone 



has proved a rather dubious 
investment - so that it can back 
awnthw horse in the form of Bor- 
den. In the process, analysts 
reckon, it may crystallise a use- 
ful tax loss. , 

More important. RJR as a 
recovery story may be played 
out its food profits have risen 
sharply in the past three years, 
and may not have much further 
to go. Tobacco, meanwhile, is 
under fire from US legislators 
and litigants as never before. 
Borden, by contrast, is a pure 
recovery play. If things came 
right, the results could be 
spectacular. 


M eanwhile, what about 
RJR 's shareholders? 
KKR, it must he recal- 
led, does not technically control 
RJR: its equity holding at present 
is only 35 per cent, and is due to 
Ml to Half that. The suspicion 
must be that KKR calla the shots, 
as the deal plainly envisages the 
sate of assets by Borden to RJR. 

Even at the outset, RJR share- 
holders suffer dilution through 
tiie issue of $500m of new RJR 
stock to buy 20 per cent of Bor- 
den, and RJR has the option to 
buy a further 10 per cent 
On the other hand, there is 
plainly some scope for putting- 
bits of the t, two companies 
together. For 'Instance, Borden 
owns the second biggest snack 
food business to the US. like the 
dairy business, it loses money. 
Hus is a business RJR under- 
stands. It owns Planters peanuts, 
and its Nabisco subsidiary is 
America’s biggest biscuit maker, 
with the distribution muscle to 
go with it 

In the end, however, one sim- 
ple con sidera tion may outweigh 

all that KKR has owned and con- 
trolled RJR for five years now. It 
knows and understands the busi- 
ness like no one else. 

Far outside shareholders, this 
raise s one simple question. If 
KKR wants out why would any- 
one else want to stay behind? 


half of He- 1980s; Borden began 
an ambitious and badly managed 
series of acquisitions, neglecting 
its basic business as a result For 
example, Barden has been in the 
dairy business fin- 140 years, and 
is America's biggest dairy com- 
pany. Last year the dairy divisian 
lost some $35m on about $L5bn of 
turnover. 

The obvious question is w hat 
thA financial jugglers of KkR can 
do to set this right There are 
scone simple answers. If the dairy 
busin ess, f ar instance, cannot be 
sold, KKR can afford to close it 
down, whereas Borden could not 


Barry Riley 


A large part of Borden has 
nothing to do with food; it is, for 
example, the world’s biggest 
maker of wallpaper (it owns 
Crown in the UK). 


N an-food businesses made 
a decent $172m of operat- 
ing profit on sales of 
$L8bn last year (food made only 
$23m an sates af '$8.7bn). Since 
those businesses are highly cash- 
generative, Borden coul d ill 
afford to wpn thom Again, KKK 
has deeper pockets, and could 
doubtless m ak e a handy profit on 
disposals. 




The rest of KKR’s calculations 
are murkier, relying as they do 
on smo ke a nd mirrors. For 
instance, KKR is apparently pay- 
ing $2bn for the whole of Borden, 
pay ment to the form of around 
half KKR’s remaining stake to 
RJR shares. But as soon as the 
deal is done, RJR has undertaken 
to bu y 20 per cent of Borden from 
KKR, at a cost of $50Qm - again, 
paym ent being in RJR shares. 
KKR’s net payment for control of 
Borden is therefor e $L5 bn. 

Fundamentally, KKR is effec- 
tively liquidating half its remain- 
ing equity stake in RJR - which 


Goldman 
Sachs lead 
partner 
to retire 

By Tony Jackson In Nsw Yoric 

Mr Stephen Friedman, senior 
partner and chairman of the 
management committee at Gold- 
man Sachs and arguably the 
world’s most powerful invest- 
ment banker, is to retire early at 
the age of 57. He will be replaced 
to November by Mr Jon Confine 
(47), now Joint head of the firm's 
fixed income division. Mr Henry 
Paulson (48), joint head of 
investment banking, will become 
vice-chairman and chief operat- 
ing officer. 

Mr Friedman said be made his 
decision a year ago, and had 
fixed the date of the announce- 
ment in March. 

Working at the head of Gold- 
man could be “more than a little 
tiring", he said. “1 guess people 
might be surprised by the tim- 
ing. Bat I’ve always made dear 
to my colleagues that I had no 
Intention of working full-time 
tm rm 80." 

Mr Friedman, now 56, will 
assume the title of senior chair- 
man and concentrate on Gold- 
man’s main investment business, 
whereby the firm buys stakes to 
companies on its own behalf, 
such as the recent purchase of a 
28 per cent stake to the Ralph 
Lauren fashion house. Mr Fried- 
man said “yon can handle a lot 
of that business on the phone, 
looking out at the river before 
you go trout fishing”. 

The change to command comes 
at a delicate time for Goldman. 
After record profits last year, the 
firm is believed to have been 
caught out, like other Wall 
Street firms, by upheavals to 
financial markets early this 
year. As a private partnership, 
Goldman does not disclose 
results, but it is estimated to 
have made a pre-tax profit last 
year of $2.7bu. Mr Friedman said 
-1994 had been a frus tratin g year. 
“While almost all of our busi- 
nesses have done well this year, 
the firm’s profits have been dis- 
appointing, particularly as a 
remit of trading results to some 
of the same businesses which 
performed extraordinarily well 
to the last few years." 

Mr Coratoe said yesterday: 
"We're in no way backing away 
from our commitment to global 
markets, but you have to adjust 
your risk profiles to different 
market environments. Maybe we 
were a bit sk»w in recognising 
changed conditions." 

Rival investment bankers, 
pointed out that as head of fixed 
income Mr Corzine appeared to 
bear much of the responsibility 
for losses to bond trading. 


Equities struggle to 
escape from bondage 


jm 

f 


fAnrnnl reports sarrioe 28-29 
BanctunaKkovt bonds 22 
Bond Mine and options 22 
Bond prices and yMds 22 

Commodates prices 26 

DMdsntis amounted. UK 23 
BtfS conancy rates 2* 

Eurobond prices 22 

Ffcad harost indfces ■ 22 
FT-A World fndtoss Bade Papa 
FT Sold Mlnaa tedax Back Pape 
FL1SMA inti bond sve 22 

FT-SE MduarteB Inflees 22 


Foreipi exchange 
Gflts prices 

Ufla equity options 1 
London stare aervka- 
' London Sad options I 
Hanged tend* aentee 
Money markets 

few Inti bond tens 

Recant Issues, UK 
Short-tern ht rates 
US Interest rates 
World Stock Mwkab 


Chief price changes yesterday 


Mo W #30-30 

Hi tonua w ' 8S7 - 13 

Unite 913 - 19 

fen— M WI 41&7 - 11.1 . 

food* 788 - K 

Pi— «6 - 13X 

HEW YORK (SI 

Mm9 

C—mtaHI 3W + 1 » 

aST^ 'W * 1 

Banda Padfc 73 + 1H 

Minper MH ♦ JJJ 

Ukru Tedi am ♦ . in 

WktaCDMnAB 168 + 4tt 


Accw 854 + 14 

New Ym* prim* a* 1230. , 


Legend DBA) + 240 . 

Falls ■ ■ 

Or Rutter 877 - 13 

OF 933 - 20 

Gaomaafei «7J» - 25.1 

SUC 721-19 

TOKYO (Yani 

kit— TM -1430'- +: 40 
HMT13 1080 + 30 

setmiom ini ism + m 

YMDbl Motor 916 + 21 

Me 

SufenaoUgH «JZ - 18 

T*nen im - son 


LONDON paaea} 
Wees 



ORSDtea 

40 


56 

MWiHaWr 

ZOO 

+ ' 

9 

WSteT 

485 . 

- 

11 

Otor 

287 

+ 

12 

Ddb 

468 

— _ 

.ST 

emu] 

288 

+ ■ 

.11 

DHMfc&Bm 

1683 

c 

to 1 

MteSnCWNB 

185 

237 

+ 

+ 

13 

EBC 

n 

■- 

5 

PSOOaH 

674 

+ 

21 

Bnw 

34. 

. 

as . 

(Men 

120 

+ 

11 

Burnt fto* 

00 

- 

13 

ream 




Am 

136 

• jm 

» 

BartotyCrp 

Ommat Bono 

«e 

303 

: 

IS 

10 


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•^6 

QriM 

248* 


11 M 

Shape Fbtar 

«3 

" 

7 


1 After decoupling, 

might recoupltog 
prove rather a 
painful process? 
This is tradition- 
ally a tricky time 
of year for finan- 
cial markets, a 
ii period of foreign 
exchange crisis and securities 
market instability . Perhaps it is 
the shock of returning to work 
after the summer, when finaweft 
ministers, for instance, decide 
they ahnnlrl resume unfinishe d 
business and raise interest rates. 

. In the securities markets the 
instability may be the conse- 
quence of portfolio rebalancing 
and temporarily reduced cash- 
flows. Stock markets tend to 
reserve their seasonal strength 
Jar the. period between November 
aid February, in anticipation of 

. large rash receipts. 

-'.'At iay rate, words such as 
“correction^ and even “crash" 
are beginning to crop up in bro- 
kers’ literature, which is nor- 
mally so bullish. The reason is 
that the August rally in equities 
was not paraHeled in bonds and 
therefore has pushed valuation 
ratios to awkward levels- For 
example, the Dow Jones Average 
Is stffl within 3 per cent of its 
all-time peak at fhe end of Janu- 
ary, white the. US Treasmy long 
bond yield has risen 150 baste 
points. ■; ■» 

By and large,' the key bond- 
equity ratios’ fo 'tte main 
national markets are still some 
way. short of the extremes 
reached before the crash of Octo- 
ber.l987. but they are well above 
normal levels. 

We are to that awkward period 
of the. securities, market cycle 
when bond prices have topped 
out but equities are still trying to 


chase corporate profits higher. In 
investment jargon, equities are 
trying to decouple from bonds. 
This is a dangerous game. 

The low level erf tfividend yields 
is the problem, to the US the 
stock market has never been 
worth buying cm its present yield 
of well below 3 per cent, and the 
ratio of band to equity yields at 
same 2 J} has risen to the highest 
since 1987. The same is true in 
the UK, where ibe ratio is 22. 

When tbis period 
of ends, 

raightltdoso 
spectacularly? 

Such ratios can only be justified 
by exceptionally buoyant divi- 
dend growth-ftitwith short-term 
interest rates going up almost 
everywhere; «Hdex expectations 
about corporate prosperity may 
need to be trimmed. 

Of course^itcgn be argued that 
the interest - hikes- reflect 

strong economic growth rather 
than threaten^ Rot there is a 
lack of sensitivity Wall Street to 
particular . has come to seem 
almost immune ^changes to the 
financial environment over the 


US Wue' difps-have continued 
their run qf yng^rn giy low vola- 
tility, so ■"toat*tBe - ; Siandard and 
Poor’s 500 index has fl u ct u a t ed 
only .5 per cent dtjjer side of the 
4fifr level so far in 1984, oemtinu- 
tog the pattern of 1993. When this 
period of tmnsual stability comes 
to an mid, might it do so spectac- 
ularly? 

.One explanation for the lack of 
movement to prices is that the 


US market is regarded as a core 
investment fay American institu- 
tions while the volatility and 
speculation has been exported 
into derivatives contracts and 
overseas markets. To take two 
markets m which US investors 
are active, Hang Kong has swung 
between 12^00 and 8,300 this 
year, Mexico between 2p00 and 
L950- Moreover the US bond mar- 
ket has been more volatile than 
blue-chip equities, this year (and 
European bonds more erratic 
stfll}. 

A pre-crash scenario can 
develop when the asset allocation 
mechanisms break down. This 
can happen because of institu- 
tional rigidities, such as the bias 
of UK pension funds towards 
equities. This is another way of 
looking at the u deconpling n 
which the equity market sales- 
men are SO PTithngtagHf! about. 

Seme Investors are also subject 
to irrational behaviour. US 
mutual fund investors have 
stopped putting money Into bond 
funds, even though the returns 
have gone up. TOey are still buy- 
ing equity funds, albeit at 
reduced levels, although the 
value has mrt similarly improved. 

Of course, a surge of economic 
growth could yet legitimise the 
stretching of the bond-equity 
relationships. This is believable if 
you swallow the rhetoric of the 
US and UK governments and 
accept that foe recent short-term 
interest rate rises have repre- 
sented- pre-emptive strikes 
against future inflation. 

A less encouraging interpreta- 
tion is that persistent and exces- 
sive g o v ern ment deficits around 
the world are crowding out the 
private sector’s recovery. The 
attempt by equities to break free 
could end In sullen recapture. 




TOPICS INCLUDE; 


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Identifying and approaching targets 
Legal, tax and accounting cons (derations 
Practical experience of alliances in China 

Speakers from: 

ja refine Flaming HokSnga LfrnBad * Loved While Dimwit * Bain & Company (Asia) 

Stephenson Harwood & La * Price Wetertwuse * JmcBne Fleming Taiwan Securities 
Oxford CNna Economic* ’ CMna-Brittin Trade Group * Case-Study - United Biscuits 

To book a place or receive further details, please contact 
Vanessa Foss, Acquisitions Monthly Conferences, 

Tel: 071-823 8740 Fax: 071-581 4331 

Acquisitions Monthly is the leading mergers, acquisitions and buyouts magazine in Europe 
Fora sample copy please contact: 

Peggy Small, Tudor House puMcafion* Ltd Fiancee Harvey. Tudor House Publications Ltd 
* Lonsdale House. 7/9 Lonsdale Gardens or PO Bax 484a 

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Teh (0882) S1S4S4 Fa* (0882) 5115*7 Tot (202)396-1052 Fa* (202)395-1053 


Acquisitions 

Monthly 











IS 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 


INTERNATIONAL COMPANIES AND FINANCE 


Mediobanca rises 8% to L216bn 


By Andrew Hill in Milan 

Mediobanca, the powerful 
Milan-based merchant bank, 
increased net profits to 
L215.9bn fSl38.39m) in the year 
ended June 30, up 7.8 per cent 
on the L200.1bn profit recorded 
in the previous year. 

The bank’s directors agreed 
yesterday to retain the option 
to relaunch an issue of new 
shares and warrants when 
appropriate. 

Adverse market conditions 
forced Mediobanca to postpone 
the original operation - which 
would have raised more than 

L1.500bn - in June. 

A new resolution on the 
share issue will be put to 
shareholders at the end of next 
month. No date has been set 
for a new offer, but this time 
no minimum price will be 


fixed, giving the bank more 
flexibility. 

“JThe resolution] now incor- 
porates a mechanism that will 
enable the share price to be 
fixed more closely in line with 
market quotations and the 
underlying net asset value of 
the bank's shares at the time 
of the issue,” Mediobanca said. 

When Mediobanca first 
announced its intention to 
issue new shares and warrants 
at the end of April, it fixed a 
minimum issue price of 
L15.000, compared with a mar- 
ket price of more than L18.500. 

However, the shares were hit 
by a general decline in Italian 
equities, and by news that four 
top executives of the bank, 
Including Mr Enrico Cuccia, 
honorary chairman, were 
under investigation by 
Ravenna magistrates for 


alleged involvement in false 
corporate reporting by the Fer- 
ruzzi and Montedison indus- 
trial groups. 

Mediobanca angrily denied 
there was any substance to the 
allegations, which are still 
being investigated, but the 
share price slipped below 
L15.000 on the eve of the pric- 
ing of the issue and the bank 
decided it would be safer to 
postpone the operation. 

Yesterday, Mediobanca's 
shares closed at L13.706, before 
the results announcement, 
against an opening price of 
L13.6Q3. 

Mediobanca has no urgent 
need to raise cash, as yester- 
day's results indicated. The 
bank's net worth rose to 
L4,4l6bn, up 37.5 per emit, and 
liquid assets rose 1Z per cent 
to L6,481bn. The market value 


of its share portfolio was 
L2.902bn more than its book 
value, after deducting LBSbn of 
unrealised losses. 

The issue was partly 
intended to dilute the 50 per 
cent holding of its traditional 
long-term shareholders - three 
banks. Banes Commerciale 
Italians, Banca di Roma. Cre- 
dito Italiano, and a group of 
corporate investors - to just 
over 40 per cent 

The bank approved its first 
set of consolidated accounts, 
which showed a net profit of 
L301.1bn, and shareholders' 
equity of L4605bn, after trans- 
fers to reserves. 

As in previous years, the 
board is recommending a divi- 
dend of L200 per share, and has 
asked shareholders’ permission 
to increase the maximum num- 
ber of directors from is to 21. 


Royal Oak 
raises C$100m 
for purchases 

By Bernard Simon in Toronto 

Royal Oak Mines, the 
Vancouver-based gold producer 
w'hich this summer launched a 
bold but unsuccessful bid for 
Lac Minerals, is raising 
C-SlOOm (US$7 2.4m) in equity to 

finance other potential acquisi- 
tions. 

Royal Oak said yesterday it 
had agreed to sell 17.4m shares 
to a group of Canadian securi- 
ties firms at CS5.75 a share. 
The shares will then be sold to 
the public. 

The funds were required, the 
company- said, to enable it to 
"react promptly in the event 
that a desirable acquisition 
opportunity should emerge". 

Royal Oak's C$2.4bn bid for 
Lac would have been partly 
financed by a share issue. It 
eventually lost the struggle to 
American Barrick, but analysts 
predicted that Royal Oak's 
tenacious president Ms Peggy 
Witte would seek other oppor- 
tunities. 

Among the possibilities are 
one or more of Lac's mines in 
North America, which are 
expected to be put up for sale 
by American Barrick. 

The underwriting group for 
the Royal Oak issue includes 
ScotiaMcLeod. Salomon 
Brothers Canada, First Mara- 
thon Securities and Midland 
Walwyn Capital. 


BfG Bank up 8.9% at DM50m 


By Andrew Fisher In Frankfurt 

BfG Bank, in which Crfedit 
Lyonnais of France has a 
majority stake, raised its bad 
debt provisions sharply in the 
first half of this year as a 
result of the collapse of Bal- 
sam, a sports flooring manufac- 
turer, but still turned in an 83 
per cent rise in operating prof- 
its to DM50m <$32m). 

The bank yesterday said that 
its provisions rose from 
DM106m to DMl33m. mostly 
reflecting the problems 
of Balsam which filed 
for bankruptcy in June. 
BfG is owed DM33m by B alsam 
and DM80m by Procedo, a fac- 
toring company which is 


Balsam’s largest creditor. 

BfG Bank, the biggest credi- 
tor of the two companies, has 
filed a suit against Procedo 
which c laims that Procedo was 
not a victim but an active 
party to the alleged fraud sur- 
rounding Balsam. Procedo's 
chief executive has been 
arrested, as has the four-man 
board of Balsam. 

As Balsam's factoring agent. 
Procedo bought up most of the 
company's claims on custom- 
ers. But the invoices have 
mostly turned out to be worth- 
less. The contracts had been 
inflated or fabricated, it was 
alleged. Procedo owes more 
than DMl.Tbn to 50 banks. 

BfG Bank - formerly con- 


trolled by Aacbener und MOn- 
chener Beteiligungs, the Ger- 
man insurance group, with the 
BGAG trade union company 
also holding a stake - also 
announced a 46.5 per cent rise 
to DM1 43m in Its partial oper- 
ating profits, which exclude 
trading on its own account All 
first-half figures are compared 
with six-twelfths of last year's 
full result 

Interest earnings were 5J2 
per cent higher at DM550m and 
commission earnings on secu- 
rities, credit and other busi- 
ness were up by 21.3 per cent 
to DM 129m. The bank's admin- 
istrative and other costs, how- 
ever, were held back to a rise 
of only 0.9 per cent to DM536m. 


Acquisition will boost 
Gambro’s US presence 


By Christopher Brown -Humes 
in Stockholm 

Gambro, the new Swedish 
recruit to the Wallenberg 
domain, said yesterday it was 
expanding its US operations 
through file purchase of Dial 
Medical, a Florida-based com- 
pany which produces and mar- 
kets dialysis concentrates. 

Hie move increases Gam- 
bro’s share of the US market 
for dialysis concentrates, 
which are used in dialysis 


machines for kidney treat- 
ment, to around one-third from 
7 per cent 

The purchase will also lift 
annual sales of Gambro's 
GOBE US subsidiary by $30m 
from last year's $500m level. 

COBE Renal Care said the 
purchase, on undisclosed 
terms, would broaden its prod- 
uct range and provide a pro- 
duction capacity it had lacked. 
It said Dial Medical had an 
extensive distribution system 
for its products. 


New chief for 
Alusuisse-Lonza 

By Ian Rodger in Zurich 

Mrs Dominique Damon, head 
of the packaging division of 
Alusuisse-Lonza. has been 
appointed chief operating offi- 
cer of the Swiss aluminium, 
chemicals and packaging 
group and the designated suc- 
cessor to Mr Theodor Tschopp 
as chief executive. 

Mrs Damon, who is 47, joined 
Alusuisse in 1988 and has built 
up the Swiss group's packaging 
division to be one of the 
leading participants in that 
sector. 


Kingfisher 

disappoints 

despite 

advance 

By Nell Buddey in London 

Kingfisher, the UK retailing 
group which includes B&Q, 
Comet, Snperdrug, Wool- 
worths, and France's Darty, 
yesterday disappointed the 
market in spite of announcing 
a 7.4 per cent increase in 
interim pre-tax profits to 
£88. lm (8138.55m) from £82m. 

The increase - at the bottom 
end of forecasts - was more 
than accounted for by a rise to 
£35. 7m from £16. Lm in the 
profits contribution from 
Darty, acquired by Kingfisher 
two months before the end of 
the first-half last year. 

Excluding Darty from both 
years, retail operating profits 
fell to £47.7m from £57.5m. 

With the interim dividend 
held at 4.4p, Kingfisher's 
share price fell 3p to 487p. 

“These results are less than 
satisfactory for Kingfisher,” 
Sir Geoffrey Mulcahy, chair- 
man, said. “However, each 
company Is making progress 
in establishing a platform of 
real value for its customers.” 

He remained “cautious” 
about UK retail markets, but 
said there were some signs of 
recovery in France. 

Mr Alan Smith, chief execu- 
tive, said Kingfisher's priori- 
ties were to improve ranges, 
value for money and service. 

He added that it would take 
time to implement Kingfish- 
er’s much-vaunted Everyday 
Low Pricing strategy - perma- 
nently lower prices, leading to 
higher sales and profits - 
throughout the group. It could 
be introduced by each rfmin 
only “when the total cost base 
of the business allows”. 

Group turnover increased by 
18.4 per cent to £2.i7bn, 
including £44 1.6m from Darty. 
UK retail turnover rose 26 per 
cent to £l.70bn. 

The underlying profits foil 
resulted partly from an unex- 
pectedly large loss of £66m at 
Woolworths from a £2.lm 
profit Comet also dropped to a 
£L7m loss from a £0.7m profit 

The group interest charge 
increased to £Il.im from 
£2. 9m, including a £4m loss on 
Kingfisher’s bond portfolio. 

Earnings per share fell from 
10.2p to 10p. 

Lex, Page 16 


Healthy operating result 
drives P&O shares up 21p 


By Simon Davies hi London 

A buoyant performance by 
Peninsular & Oriental Steam 
Navigation Company's cruise 
and cross-Channel ferry 
operations yesterday helped 
push its share price 2lp higher 
to 674p. 

Pre-tax profits fell to £126. 4m 
(S197.4m) from £29L6m for the 
six mouths ended June. How- 
ever, last year's figures 
Included a £200m gain from 
business sales, primarily the 
disposal of contract caterer 
Sutcliffe Services. The 1994 fig- 
ure includes a £4.4m excep- 
tional profit 

Profit before exceptional 
items rose 52 per cent to 
£122m from £80. lm, pushed up 
by the shipping businesses. 

Turnover rose 1.6 per cent to 
£2.73bn from £2.G9bn, but the 
company benefited from the 
operational gearing of its ship- 
ping businesses, which have a 
high level of fixed costs. 

The ferries division, where 
around 70 per cent of profits 
come from the D over-Calais 
route, lifted profits 131 per cent 
to £26.6m from £11.5m, in spite 
of continuing fore competition. 

P&O now has around a 60 


per cent share of the cross- 
Channel passenger market, 
and it carried 37 per cent more 
passengers during the period- 
The increase for freight units 
was slightly better, as P&O 
benefited from the delays 
which plagued the Channel 
Tunnel 

Consensus brokerage fore- 
casts for the full year rose by 
around £20m to £32Qm (before 
exceptional items), but ana- 
lysts warned that the tunnel 
threat was merely deferred, 
and could knock £50m off 
P&O’s operating profits next 
year. However, Lord Sterling. 
rhairman . said heavy promo- 
tion by Eurotunnel would also 
help expand the overall mar- 
ket, mitigating any increased 
competition. 

P&O's cruise liners also 
thrived on the economic recov- 
ery in its primary markets of 
the US and UK. with profits up 
25 per cent to £42.4m from 
£34m. 

Lord Sterling said cruise 
bookings for 1995 were "nicely 
up on this year”, and the com- 
pany should benefit from the 
la unc hing of two ships next 
year. 

The containers division lifted 


profits from 29.5m to £25.7m, os 
volumes improved and rates 
gradually started to recover. 

P&O Australia, which has 
been the focus of the group's 
rapid expansion into the Asia- 
Pacific region, also performed 
strongly, contributing £l66m 
against Eio^n- 

Lord Sterling said: “At the 
start of the year, prospects 
were looking strong in most of 
our businesses. This is still 
generally true, although the 

recovery in the UK is still 
rather patchy, and land trans- 
port. housebuilding and con- 
struction remain flat," 

Boris Homes improved from 
a loss of £Q.3m to a profit of 
EQ.lra, while the property 
development division reduced 
losses from £79 to £0.7m. 

Interest costs fell„to £59.2m 
from £63.501, in spite or a rise 

in net borrowings to £l.61bn. 
as P&O has invested £29T.6m in 
fixed assets, primarily ships, 
and a further £27.6m on acqui- 
sitions during the period. 

The dividend is maintained 
at I35p. but this was covered 
by recurrent earnings for the 
first time since 1990. Earnings 
per share amounted to 13.8p. 
Lex, Page 16 


Fisons delivers another bitter pill 


By Daniel Green in London 

Fisons, the UK drugs and 
scientific equipment company, 
disappointed the London stock 
market yet again yesterday 
with interim profits down to 
£30.4m (847.12m) from £4l.5m. 
The dividend was cut almost in 
half to l.Tp from 3.3p. and the 
shares fell 15p to 135p. 

Mr Patrick Egan, chairman, 
could provide little cheer for 
the immediate future, warning 
that “the trading environment 
is expected to remain challeng- 
ing on all fronts and it is 
unlikely that, for the group as 
a whole, any marked improve- 
ment in profitability levels can 
occur during the remainder of 
this year”. 

Mr Robin Gilbert, analyst at 
stockbroker Panmure Gordon, 
said: “It is disappointing to see 
yet another set of figures that 
foils short of expectations.” 

Since 1991 Fisons has seen 
the departure of two chief exec- 


Fisons 

Share price relative to the 
FT-SE-A AH-Share Index 



1901 92 93 94 

Sauce: FT Graphite 

utives and had to issue three 
profits warnings. 

Fisons* troubled scientific 
instruments division saw trad- 
ing losses increase more than 
five-fold to £lL&n from £2.lm 
on sales barely changed at 
£114m against £115.5m. Mr 
Egan said the previous year's 
loss should have been higher 


but costs "had been pushed 
into the second half". 

The company's pharmaceuti- 
cals division saw sales rise to 
£340. 7m from £209. 3m. Trading 
profits rose to £36.3m from 
£28.Sm. an increase exagger- 
ated by last December’s deci- 
sion to discontinue "trade load- 
ing” - the oversupply of 
distributors at relatively low 
profit margins. 

Sales of Fisons’ long-estab- 
lished asthma drug Intal rose 
from £83m to £lWm. Intal faces 
a more difficult second half in 
the US where competition from 
generic (unbranded) rivals 
began in earnest in May. 

Group turnover fell to 
£640.3m from £651.4m. There 
was a net cash outflow of 
£71.1m, compared with an 
inflow of £1445m. leading to a 
rise in gearing to 57 per cent 
from 40 per cent at the end of 
1993. Earnings per share fell 
from 4.1p to 3p. 

Lex, Page 16 





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Goldman Sachs (Asia) Limited 

CHIC Industrial Bank 
Fuji International Finance (HK) Limited 

ABN AMRO Securities (Far East) Limited 
IB J Asia Limited 

Salomon Brothers Hong Kong Limited 

CS First Boston 
DKB Asia Limited 

Merrill Lynch Hong Kong Securities Limited 
Paribas Capital Markets 
Sanwa Bank International Finance Limited 
S.G.Wiarburg Securities (Singapore) Pie. Ltd. 

September 1994 


Lehman Brothers 

The Development Bank of Singapore Ltd. 

HSBC Markets 

Banque Nationalede Paris, Hong Kong Branch 
Nomura International (Hong Kong) Limited 

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KNANOAL TIMES WEDNESDAY SEPTEMBER 14 1994 



★ 





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r , Sint in packs. C)eai^^ v ;WitiL them 


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■ •. • .-'^-5-,.. ..r. 


i:#c. 






' -- i: .^Nowl^'C is that linkage mbretmlsnecate than in 
the airline business. Fuel prices, interest rsites, curren- 


cy swingsj-ldad factors, even political pitfalls — each 

; ‘ " - •. ’ '•• • 

riskvhas to fee exarauurted in light of tHep.th^rs. 


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fes minute by minute. Bankers Trust has 


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LEAD FROM STRENGTH. 


20 


★ FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 

INTERNATIONAL COMPANIES AND FINANCE " 


Cut in bad debt 
costs helps lift 
Australian bank 


By Nikki Tait in Sydney 

Commonwealth Bank of 
Australia, one of Australia's 
“big four" banks and now par* 
t tally privatised by the federal 
government, yesterday 
announced a profit after tax of 
A$8S2.im (.US$507. 9m) in the 
year to end-June. This com- 
pares with AS443. lm in 1992-93. 

Earnings per share rose to 
76.9 cents from 51.7 cent, while 
the final dividend goes up to 36 
cents from 22 cents. The 
1992-93 figure was reached 
after a net abnormal charge of 
A$136.7m. There were no 
abnormal in the latest year. 

During the 12-month period, 
CBA's total operating income 
fell by around Z5 per cent to 
A$4.26bn. However, this was 
offset by a substantial reduc- 
tion in provisions for bad and 
doubtful debts. The charge for 
bad and doubtful debts fell by 
almost a third, to A$320.7m. 

CBA’s operating expenses 
were also 2.4 per cent lower at 
A$2.84bn. The company said 
this reflected an internal reor- 


By Nikki Tait 

Coles Myer, one of Australia's 
biggest retailers, yesterday 
announced a rise of 3 per cent 
in full-year profits to July 3L 
The company made A$424.2m 
(USS3l5.7mj after tax. com- 
pared with A$4U.8m in the 
previous year. 

Total sales for the year were 
up by 5 per cent to A$15.9bn, 
while fUUy-diluted earnings per 
share edged up to 30.7 cents 
from 30.1 cents. 

There is a 0.5 cent a share 
increase in the finnt dividend, 
to 9 cents, making a total of 20 
cents for the year, up 2.6 per 
cent. 

Coles, which operates around 
1.725 retail outlets and is in the 
process of buying out a 21.45 
per cent stake in itself held by 
the US stores group Kmart, 
blamed the small rise on the 


ganisation programme, which 
had already reduced staff num- 
bers to 37,269, compared with 
42,329 a year ago. Further 
“orderly reductions" are expec- 
ted as the branch restructuring 
continues into 1999. 

The contribution of the core 
banking operations to group 
profit rose to A$536.8m from 
A$502-5m. while the financial 
services division saw a much 
sharper jump, to A$46.5m com- 
pared with A$18.6m previously. 
The Commonwealth Develop- 
ment Bank business turned in 
a profit of A$39.5m, compared 
with a loss last time of 
ASll-7m, blamed on tad debt 
expenses. Meanwhile, ASB 
Bank in New Zealand saw an 
18.1 per cent increase in profits 
to NZ$45.5m (US$27.4m). 

CBA said it was looking for 
further earnings growth in 
1994-95, as lending volumes 
picked up on the back of 
increased domestic economic 
activity. However, it claimed 
that the “intensely competitive 
nature of the industry” could 


A$424m 

Myer Grace Bros department 
store business, where operat- 
ing profits (before interest and 
tax) fell by A$29.5m to 

A$9A8m. 

During the year, old stock 
and merchandise ranges were 
cleared and a restructuring got 
under way. with four smaller 
stores in rural New South 
Wales closing. 

The specialty stores group 
saw profits drop, from A$55 .8m 
to A$20.2m. due to start-up 
costs at the new World 4 Kids 
and Office works chains. 

The supermarkets business 
pushed profits up to A$200.1m 
from A$l72.7m, while the 
Kmart discount stores made 
A$l28.1m against A$120.4m. 
and the Target stores A$1292m 
compared with A$121.7m. 

Coles plans to open 130 new 
and replacement stores next 
year, and refurbish 274. 


Hong Kong 
SFC selects 
lawyer as 
chairman 

By Simon Hotborton 
in Hong Kong 

Mr Anthony Neoh, QC, is to 
succeed Mr Robert Not tie as 
chairman of the Hong Kong 
Securities and Futures Com- 
mission (SFC) when Mr Nottie 
retires at the end of this year, 
the Hong Kong government 
said yesterday. 

Mr Neoh is a member of the 
governing council of the Hong 
Kong Stock Exchange and well 
acquainted with sec mi ties 
markets In both Hong Kong 
and China. He was unobtaina- 
ble for comment yesterday. 

He was one of the advisers 
to China on bow to list main- 
land state companies on the 
Hong Kong exchange. In spite 
of teething problems, the list- 
ing of these companies has 
been an acknowledged success. 

Through this listing process 
Mr Neoh, 48, came into contact 
with senior officials in Beijing. 
Shanghai and Shenzhen and 
he has established good rela- 
tions with them. He is a 
respected authority on securi- 
ties law and has advised Chi- 
na’s central government on 
the drafting of China's securi- 
ties and company law. He is 
also an adviser to the Shen- 
zhen municipal government 

Sir Hamish Macieod, Hong 
Kong’s financial secretary, 
said Mr Neoh had made signif- 
icant contributions to the 
development of Hong Kong’s 
stock market over the past few 
years. “I am confident that he 
will bring in invaluable exper- 
tise and give new impetus to 
the SFC in the years ahead,” 
he said. 

Mr Neoh will take up his 
position at the beginning of 
February next year, ffis con- 
tract expires on June 30 1997 - 
the day before Hong Kong 
reverts to Chinese rule - but, 
if he wishes to continue, the 
high regard with which he is 
held in C hina ought to secure 
him another term. 

Mr Michael Cartiand, secre- 
tary for financial services, said 
there had been 66 applications 
for the SFC chairmanship in 
addition to candidates head- 
hunted by a search firm. Mr 
Neoh was the selection com- 
mittee’s unanimous choice, he 
said. 


hamper progress. 

Coles Myer edges 
up 3% to 


Staying upright in a collapsing market 

Bernard Simon explains why Canadian property group Cadillac Fairview outlived O&Y 


C adillac Fairview and 
Olympia & York Devel- 
opments once had a lot 
in common. Both were big, pri- 
vately-owned property develop- 
ers based in Toronto whose 
portfolios Included some of 
North America’s most impres- 
sive buildings. Both borrowed 
heavily in the late 1980s, and 
found themselves in trouble ' 
when the bottom fell out of the 
property market. 

The big difference now is 
that O&Y no longer exists as a 
going concern, while Cadillac 
continues to manage a stable 
of 70 prestige office buildings 
ami shopping malls, unencum- 
bered by bankruptcy court 
orders and on tolerably good 
terms with its creditors. 

Not that Cadillac, with debts 
totalling C$3.2bn (US$2Jbn), is 
out of the woods. About a 
dozen of its buildings have 
halted debt-service payments. 
It is in the throes of tough 
restructuring negotiations 
likely to take at least another 
nmp months to finalise. Many 
of its creditors and sharehold- 
ers are unpredictable US “vul- 
ture funds” which specialise in 
trading distressed companies' 
securities. 

However. Cadillac has 
learned several lessons from 
the O&Y debacle. Unlike O&Y, 
It approached creditors early 


on for help. In return for them 
signing confidentiality agree- 
ments, It supplied the informa- 
tion they asked for. 

Instead of the entire com- 
pany defaulting on its loans, as 
O&Y did, Cadillac moved 
quickly to segregate the cash 
flows and debt-service pay- 
ments of its various properties. 

“They worked with the lend- 
ers prior to everyone getting 
angry,” says one large creditor. 
“Nobody has pushed them to 
seek court protection, so they 
must be doing something 
right" 

Cadillac’s holding company 
does not publish financial 
statements. It refuses to dis- 
close how much of its debt is 
in default 

The restructuring was inter- 
rupted last week by the 
replacement of more than half 
the previous nine-member 
board of directors. The chair- 
man, a Toronto lawyer, was 
replaced by Mr Charles Mas- 
son. formerly head of financial 
restructurings at Salomon 
Brothers, the New York invest- 
ment hawk 

The board upheaval reflects 
dramatic changes In the 
make-up of Cadillac’s share- 
holders and creditors. 

Cadillac was taken private in 
1987 by a group of 41 North 
American institutional inves- 


tors led by JMB Realty, a Chi- 
cago-based property developer. 
One of those investors, the Cal- 
ifornia Public Employees 
Retirement System (Calpers). 
remains the biggest share- 
- holder with a 15 per cent stake. 
At about the same time, Cad-, 
iliac raised CSlbn in loans 
from two syndicates compris- 
ing 42 North American, Euro- 
pean and Japanese banks. . 

C adillac’s troubles have 
prompted many of the 
original shareholders 
and creditors to bail out They 
have sold their securities at 
varying discounts, mostly to 
US vulture funds but also to a 
number of European investors. 

narifflar nfffrials pg timatp that 

about 90 per cent of its com- 
mon shares and subordinated 
debentures, which comprise its 
equity, and 75 per cent of the 
syndicated bank loans have 
changed hands. 

'They recognise that there’s 
good value here and good 
upside,” says Mr Graeme 
Eadie, Cadillac’s chief execu- 
tive. 

The problem is largely on 
the liabilities side. According 
to Mr Walter Schroeder, presi- 
dent of Dominion Bond Rating 
Service In Toronto, Cadillac 
needs about C$lbn in fresh 
capital, mainly to ease the bur- 


den of the syndicated bank 
loans. 

Mr Schroeder concurs that 
“even with the fall in {property 
values], it’s a very viable com- 
pany if they can get the bank 
loan away”. Cadillac's portfolio 
includes Toronto's landmark 
Baton Centre, and office build- 
ings and shopping malls in 
such cities as Vancouver, 
Atlanta and New Orleans'. 

The drive to solve Cadillac’s 
problems is proceeding on sev- 
eral fronts. 

Securities holders have been 
divided into three groups, rep- 
resenting shareholders and 
subordinated debenture hold- 
ers, senior creditors (that is, 
holders of the syndicated bank 
lows) and lenders with loans 
secured by specific properties. 
“We’re trying to establish the 
size of the pie, and then we’ll 
decide how to slice it up,” says 
Mr Geoffrey Godard, vice- 
president of Quebec's Caisse 
Centrale Desjardins, who 
chairs the syndicated debt 
committee. 

Cadillac has sold its interest 
in a handful of properties, but 
Mr Masson says “we don't plan 
to dispose of any other assets”. 
The goal is to keep the 
company together as a going 
concern. 

Cadillac’s management is 
seeking an outside investor, or 


group of investors, to provide 
fresh capital. 

According to Mr Masson, 
several candidates are at the 
due diligence stage. There is a 
high level of interest,” he says. 
Cambridge Shopping Centres 
of Toronto disclosed earlier 
this year that it had submitted 
a bid for most of Cadillac's 
assets. 

The restructuring is compli- 
cated, however, by arrange- 
ments under which Cadillac's 
partners in some of its choice 
properties have a right of first 
refusal on its stake and other 
negotiating privileges. 

On the other hand, the 
recent reshuffle of sharehold- 
ers, creditors and directors Is 
expected to help rather than 
hinder the process. One credi- 
tor complains that members of 
the former banking syndicates 
"were so dysfunctional they 
couldn’t even agree when to 
meet”. Mr Godard adds that he 
is “cautiously optimistic” that 
the changes will speed things 
up. 

Mr "Masson is moving from 
New York to Toronto to over- 
see the restructuring. He says 
he plans to stay for no more 
than “single-digit months 11 . 
However, he also acknowl- 
edges that big corporate 
restructurings have a habit of 
taking longer than expected. 


Village Roadshow in 
A$230m fund-raising 


Disposals continue as 
Adsteam reduces loss 


By Nikki Tait 

Village Roadshow, the 
Australian ringip a and theme 
parks operator in which Angha 
TV of the UK holds a minority 
stake. Is raising op to A$230m 
(USS171.3m) through a three- 
part preference share issue. 

Part of the issue - A$80m - 
will only go ahead if acquisi- 
tion plans for “strategic invest- 
ment" are successful. However, 
the shares have been under- 
written by McIntosh, the stock- 
broking firm, guaranteeing 
that the money will be avail- 
able. 

Yesterday. Village declined 
to comment on what acquisi- 
tion it had in mind. It ruled out 
any interest in the Wesgo radio 
station business, currently the 
subject of a recommended bid 


from Mr Tony O'Reilly's Aus- 
tralian Provincial Newspapers. 
Market speculation had 
suggested that Village might 
have been the buyer of a 5 per 
cent block of shares. 

The first tranche of new 
money will be raised via the 
placement of 52.17m pre fer ence 
shares, at A82.30 each, yielding 
around A$120m. 

This wifi provide additional 
working capital for the group, 
and help fund its joint venture 
with Mr Kerry Packer’s Nine 
Network, and expansion of its 
cinema interests in Aria. 

The second tranche involves 
another 34.79m shares, also to 
be placed at AS2.30, to raise 
A$80m. These are the shares 
that will only be issued if the 
planned acquisition goes 
ahead. 


GM Hughes 
Electronics to 
shed 4,400 jobs 

General Motors’ GM Hughes 
Electronics unit says the con- 
solidation or its defence-related 
business will mean the loss of 
about 4,400 jobs by 1995, and 
tiie closure of its facilities in 
Fullerton, California, writes 
Louise Kehoe in San Fran- 
cisco. 

GM Hughes, which 
announced in March it would 
combine its electronics and 
defence operations in a newly- 
formed Hughes Aerospace and 
Electronics subsidiary, said the 
cuts were essential. “Today, 
the Department of Defense and 
our foreign customers are even 
more cost-driven and Hughes 
must change to meet those 
new priorities " said Mr Mich- 
ael Armstrong, chairman ap<j 
chief executive. 


By Nikki Tait 

Adsteam, the troubled South 
Australian group formerly run 
by Mr John Spalvins, yester- 
day reported a reduced loss 
after tax and abnormals of 
A$l64.4m (US$I22.4m) for the 
year to end-June. This com- 
pares with a A$44G.5m deficit 
for the previous 12 months. 

Adsteam took the profit on 
various asset sales as an 
extraordinary i tem, amounting 
to an aggregate A$893Jm gain 
against A3 108.6m previously. 
This left net profits for. the 
year at A$333m, compared with 
last time's A$222.6m loss. 

The David Jones retail busi- 
ness made an operating profit 
of A$8i8m, up 13.7 per cent 
over the previous year. Sales 
rose 7.3 per cent to A$1.41bn. 


However, Adsteam acknowl- 
edged that its operating busi- 
nesses could not generate suffi- 
cient earnings to service the 
group’s existing debt “Recog- 
nising this, the group is pro- 
ceeding with the policy of 
attempting to dispose of open 
ating businesses and invest- 
ments at a price and time that 
will maximise the sale value," 
it said. 

No decisions had been made 
on the disposal of businesses, 
but Adsteam’s directors indi- 
cated that trade sales were 
unlikely to leave any surplus 
for shareholders. "However, 
there remains the possibility of 
offers to shareholders of enti- 
tlements to subscribe for 
shares in any business which 
is subsequently floated,” they 
said. 


INTEREST 
RATE CHANGE 

Allied Irish Banks, p.I.c. announces 
that with effect from close of 
business on 12 September 1994 its 
Base Rate was increased from 
5.25% co 5.75% p.a. 



ItjiiUriicrc-Bric.im, Belmont RuaJ, Uxbridge, 
MnUU.-v.-t uas ISA. 

TJuplunw: U»15> 27-222 
Rr.indu> throughout the country. 


\t u 'W. t- ili, •■T1...C ni.nL .4 AllkU Irsli DjnU.% p.U.. uKurptrain] in InrUrhl 

I ‘V.r I'jiiluniiY. IV, [I -hn. ice. DtjUin 4 
Krw liwJ hi ttrl.r.l. N iiuKt I I" i. 


r Girobank 


Girobank announces that 
with effect from 
close of business 
on 12 September 1994 
its Base Rate was 
increased from 5.25% to 
5.75% per annum. 


Girobank pic. 10 Milk Street LONDON E=C2V 8JH 
Reg. No. 1950000 



071 329 62S2 

pjix 071 ^09 100,1 


The 1‘iirniLil luul iot ihc tcriow inuntar 

Market-Eye 

London stock exchange 





Base rate 

With effect from 
close of business 
on 12 September 1994, 
Base Rate has 
been increased from 
5.25% to 5.75% per annum* 

The Complete Private Banking Service. 

22 Omhtce Squur, Einbctgh £H2 40fTet QJ 1-225 8*44 
238 WoiOcrp- Sow*. Ola.^ 02 4QT Tat 0*1-226 *4*4 
42 Mill LanknSWIY9CTd:07I^4<!$ 


"HW, 

ferftifeetA* btcdquarutri 


• tr* >■ 

.pemriesita* ■ 

agrtreflirtjagwfi' 


Should've 
talked to CNT 

Cali OSOO Freefax 0800 

721 721 WW 221 177 

Land and premises with added value. 


FrankfurVMain, September 1994 

COMMERZBANK A. 



Commerzbank Aktiengesellschaft 

U.S.S 250,000,000 Subordinated Floating Rate 

Notes Due 2002 

Correction 

Interest Period: September 6. 1934 to March 6, 1999 (181 days) 
Interest Rate: 5-1875% p9. 

Coupon Amount: U.S.S 130.41 per u.S_S 5.000 Nora 
U-S.S 26082 per U-S.S 10,000 Note 
U.S.S 2^08.16 per U.S.S 100.000 Note 
Payment Date: March 6, 1995 


HongkongBank <z> 

The Hongkong and .Shanghai Ranking Corporation I J mi ted 
(Incorporated in Hong Kong with Bmfted BaMBty) 

U.S.$400,000,000 

PRIMARY CAPITAL UNDATED FLOATING RATE NOTES 

(SECOND SEMES) 

Notice Is hereby given that the Rate of Interest has been fixed at 
52S% and that the interest payable on the relevant Interest Payment Date 
December 14, 1994. in respect or USS5.000 nominal of the Notes wB 
be USS6&35 and In respect of USS 100,000 normal of tee Notes wffl be 
US$1 ,327.06. 


September 14. 1994. London 

By. Citibank. HA, (Issuer Services). Agent Bank 


CtTIBANtO 


I NATIQijRL 


FIRST NATIONAL BANK Pic 
AND FIRST NATIONAL 
MANAGEMENT LIMITED 


OUR HOME LOAN RATE IS INCREASED 
FROM 8.95% TO 9.5% WITH EFFECT 
FROM CLOSE OF BUSINESS ON 
13TH SEPTEMBER 1994 

l^Fint National House, College Road, Harrow, Middlesex HAl lFB.=dJ 


Petroleum Argus Oil Market Guides 

Con:pr£P£r's'\ e rtp-.-iuntion^ of :>•& off market-' 

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cat London rr 44 + (0)71 231 3558 

for your gteda rod Slpnel price tet 


CONTRACTS a TENDERS 


THE MINISTRY OF 
ENERGY AND MINES OF ECUADOR 
& 

PETROECUADOR 

The Ministry of Energy and Mines of the RepubGc of Ecuador and 
Petra ecuador invite National and foreign companies which are 
capable of exploring and producing hydrocarbons, to register in 
order to be pre-quafifled to participate in the international bidding 
round for production and additional exploration of producing fields In 
Ecuador. 

Interested companies can register in person or by Fax at the 
Marginal Reids Contracting Unit located at Santa Prisca 223, Y 
Manuel Larrea. 4th Root. Tel: (593-2) 584,409/564.860 Fax: (583-2) 
582.51 1. The deadline for registration is September 30, 1994. 

Companies that are registered can make an appointment to see the 
technical data on the fields to be tendered up until September 30, 
1994. 


All Advertisement bookings are accepted subject 
to our current Terms and Conditions, copies of 
which are available by writing to: The 
Advertisement 
Production Director 

The Financial Times, One Southwark Bridge, 
London SE1 SHL 

Tel:+44 71 873 3223 Fax; +44 71 873 3064 


Japan 

NIPPON MEAT 
PACKERS, INC 
CDRs 

The ■nrfetsignert announces that as ftoaj 
September 22. 1994 it Kaj- A ssociate 
N.V. end Krediet Bank S.A., 
Lnxemboargcotsc In Luxembourg 
div.cp.no. 22 (accompanied by no 
“Affidavit") of the CDRs Nippon Mem 
Packers Inc., will bs payable with USS 
13,25 per CDR. repr. LDO sbs and with 
USS 13240 per CD*, tnpr. UXM sta. 
(div. pec tec-date 30.0fi.94; grass Yen 
15,5 per Sb.) after deduction of 15% 
Japanese tax - Yen 232.50 a USS Z31 
per CDR. repr. 100 aba and Yen 1325 - 
USS 23,(0 per CDR. repr. U000 sbs. 
Without an Affidavit 20% Japanese tax 
(Yen 3li).- - USS 3,08 per CDR, repr 
100 aba and Yen 3.100,- ■* USS 30,80 per 
CDR, tepr. 1,000 sta. J 
After 3<U)9.94 the dividend wQI only be 
paid nder deduction of 20% Japanese 
lax with reap. USS 12*48; USS 12440, 
repr, resp. 100 and 1.000 sbs.. in 
accotdaeco with the Japanese lax 
regulations. 

Amsterdam, September 12, 1994 

AMSTERDAM DEPOSITARY 
COMPANY N.V. 


u„,15% 

off electricity 

r y.xir ::; 3 :vJs ..rsu.nd 

-‘CCO per r'.ir^h or nio-e or •-■octroi','. 

021 423 3018 

Rowerline 


w an 4 — *alar Who an 


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“T* ■ Pktt dc l-Etoilc 
•P - -174 L-I02I Luxembourg 
R.C. No B 32250 5 

dividend notice 

v- * - 

after September 22. 1994 , 0 s harr*hnM nfS ^ 1 P« Share °n ot 

^^^^“^.i.UXKMBOURGEOISE 
L-2449 LUXEMBOURG 


FhteBiy 



Investments' 








21 






FINANCIAL TIMES WEDNESDA Y SEPTEMBER 14 1994 ★ 

INTERNATIONAL COMPANIES AND FINANCE 

’Three-card trick from American Express 

Financial services group is entering a new phase, writes Richard Waters 

W ill investors ever 
again comer to look 
on American 




s;iis continue* 
m reduces k 


W ill investors ever 
again come to look 
on American 
Express as a high-growth 
company? ' 

After 18 months of reorgani- 
sation, rationalisation and dis- 
posals, that question has mm* 
to the fore In recent days. The 
benefits from cutting costs and 
shedding unwanted bosmssses 
have largely been realised: 
earnings per share, which 
sagged at the start, of the. 
decade, have rebounded. 

Mr Harvey Golub, the tough- 
talking Brooklyn native who 
has headed the US financial 
group tor the past 18 months, 
knows it is now to deliver 
on his promise to the 
company grow again. 

Two events in the past week 
suggest American Express has 
entered a new phase. First, the 
US . financial services group 
relaunched itself in the revolv- 
ing credit card business (most 
of its business comes through 
charge cards, on which the full 
outstanding balance must be 
paid at the end of each 
month). 

This week it has also bol- 
stered its presence in the 
travel business with the 
acquisition of parts of the 
Thomas Cook operations tor 

$375m. 

Both events provide pointers 
as to how Mr Golub hopes to 
restore the fortunes of the US 
financial services group, which 
was badly dented by a toiled 
attempt to convert itself into a 
“financial supermarket?* in the 
1980s. 

Mr Golub's plan rests on 
three elements; 

• extending the company’s 
customer base; 

• finding ways to sell hew 
products to existing customers; 
and 

• using the information the 
company has about its custom- 
ers to make it more nimble 
than the bank-owned payment 
systems that are its mam cam. 
petitars. 

American Express’s position 
in the plastic card market has 
slipped during a period of 
explosive growth. White spend 
ing on plastic cards around the 
world leapt from less than 
$250bn in 1985 to around 
jl.OOObn last year, American 
Express’s share of the market 
toll from 22 per cant 1b lS.per 
cart 



American express 

88 rrrr* 




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Harvey Goliib; tbreepart plan 
to restore conipaay’S fortunes 

It was overtaken first by 
bank issuers of credit cards 
and; more recently, by non- 
bank companies ranging from 
AT&T to Dean Witte" Discover. 

These organisations made 
headway by offering new 
incentives to people to use 
their cards «- tor instance by 
giving frequenWlyer miles, dis- 
counts mi ft g l ephcyi e wiia or (in 
the case of the Discover card) 
cash rebates - or by dropping 
then: fees and reducing interest 


American Express stuck 
with its “ane-slze-fits-all ” 
charge card,- continuing to 
charge all its customers a toe 
while applying a higher dis-' 
count to merchants who 
accepted its cards than those 
charged by the credit card 


Thl« higher rtigraymf fflmrn iir. 

aged merchants outside ttio 
travel and entertainment 
industries - where American 
Express is almost universally 
used - foam agreeing to accept 
the - card, thus slowing 
growth. 

Three things suggest Mr 
Golub has at least stopped the 
rot. ■ 

First, and most important, 
the attrition in the company's 
core card business has largely 
been balted. While it lost L5m 
cardholders in the US during 
1992 and 1993, the number of 
cards in use has falfan only 
very slightly, to 11.3m, this, 
year (outside the US the figure 
has hardly budged from 8m). 

The company has also cut 
the charges to its merchants in 
order to gain wider acceptance 
for its cards. Last year, the 
average toe was 2J& per cent. 


- 

- ■ 

down from 3.11 per cent in 
1992. That, too, bas largely sta- 
bilised - though Mr Golub has 
made dear that be will, If nec- 
essary, keep cutting the dis- 
count rate to build the mer- 
chant network. 

Second, the group has just 
completed the disposal of a 
variety of businesses acquired 
in Its disastrous attempt at 
diversification, in the early 
1980s. The list includes the sale 
of the Shearsan stockbro2ang 
firm and the Boston Company, 
along with the spinoff of First 
Data, a data processing com- 
pany, in 1992 and Of T Jhman 
Brothers, the investment bank, 
in recent nwntim 

T fra thir ^ Wg nfW anre l^ na 

been in 1 profitability. 
From a low point in 
1992, after-tax profits 
rebounded last year to equal 
the previous earnings record 
set in 1989. This was due hi 
equal measure to cost-cutting 
and a sharp reduction In credit 
losses (many of tbwn from the 
company's first, troubled entry 
into the credit card market). 

“They’ve had a lot of corpo- 
rate issues to solve, and 
they've done a world-class 
job,” says Mr Eugene Lock- 
hart, the recently-appointed 
head of rival card group 

Maaterflard Tnternatifl pftL "Byit 

the world card market has 
moved on apace." 

Lake many others, Mr Lock- 
hart questions whether Ameri- 
can Express nan hope to regain 
lost ground - particularly 
since the next wave of growth 
in the card business will come 
from persuading, qqnqjpgprs to 
use Mastic rather than cash fie" 


' 1 * 1 

: 

small-value purchases. Ameri- 
can Express's traditional cus- 
tomers have been business peo- 
ple using its cards for travel or 

ffn t e rt a ltmran f. 

Mr Golub's plans revolve. In 
part around extending the 
company's range of cards. Last 
week, American Express 
relaunched itself in the credit 
card business, announcing the 
first in a series ctf products it 

plana to lamrah In tho enmlwg 
month* 

Ratter than the old one-sizer-, 
fits-all approach, each card will 
offer a different range of incen- 
tives (the first provides a lon- 
ger interest-free grace period 
than is usual). 

At present, American - 
Express maintains revolving 
credit balances of around $8bn: 
by the end of the decade, that 
figure will grow to $30hn, Mr 
Golub predicts. He bases the 
estimate partly on the compa- 
ny’s ability to persuade its 
charge-card holders to shift 
their credit-card spending to 
American Express. These cus- 
tomers already owe around 
$40bn on cards issued by other 
companies, says Mr Golub. 

Growth is also coming from 
the corporate card, a charge 
card used by companies to 
make small purchases. Other 
card companies agree this 
remains one of the big untap- 
ped markets in the payments 
industry, and could provide 
solid double-digit growth for 
some time. 

The Thomas Cook acquisi- 
tions announced on Monday 
are likely to bolster the corpo- 
rate card business: around 
two-thirds of American 
Express’ existing travel cos- 



Bankers Trust sued over 
US derivatives contracts 


By recherd Waters 
in New York 

Bankas Trust is being sued in 
tile US over contracts that 
allegedly led to losses of 120m, 

The action is believed to be 
the. first lawsuit brought 
against a derivatives dealer by 
one of its corporate customers. 
■■ Gibson Greetings, a Crncin- 
nati-based company, has filed a 
suit in the federal court alleg- 
ing the US bank misled it 
about the risks of complicated 
interest rate swaps that it 
bought from 1992 onwards. 

Bankers Trust continued to 
maintain that the contracts 
were “legal, proper and appro- 
priate”. The bank is expected 
to defond itself by claiming 
that it bad advised senior Gib- 


son executives, including the 
finance director, about the 
risks of the transactions, both 
In meetings and in. written 

rmniniiirlHitlnM. 

Gibson's contention that it 
had been misled by Bankas 
Trust first emerged in April, 
alien it announced losses in 
the wake of rising US interest 
rates. It came after Procter & 
Gamble had also publicly 
attacked the bank, though 
PAG has yet to take any for- 
mal legal action over its allega- 
tions. 

In Us suit, Gibson said that 
Bankers Tmst “did not reveal 
the matpHni risks and misrep- 
resented the nature of the 
transactions and thereby 
deceived and defrauded’* the 
company. 


Hyoe are coneody enga&d in butane activities wfth Rnsrfa, Ac other newly 
fadependeflt awes of flie fanner Soviet Union and ch a wfaetc in Eastern Europe - 
- • ■ . or an considering to posabfflky you’ will want to talk to oft. 

We rac tfac otguriaca of the IntenBtiooal Bo a mgg Fomm taking ptaoe towirta 
the «d of Sepcentom Oxford and laidotL Ora 2to computes from die 
former Soviet Union and Omni and Batten Europe wffl be aBetxSqg foe Forum. 
AaxngX bE r v ii- g ntm nrtwv fin g from these co mpan ies arc the Inqinf* 


oa i pat with those la the Lfafed Kingdom. 

If yon do noi want to min foe opportunity to auabtiahor Blither yoor folks in 
these emerging Uttriasm/do no* tom this occasion. 

Wie are ansogfog meetings between Rasta and Btm European Enwprfee* and 
relevant Western counWpana. fa Oxford cttSepieilBtw 20th and 2tit. 26th and 27th. 
T iaia |xx t i txw and hmr p cj eo'wai be prodded udfogc ate aoccaaiovotynL 
ff yw to expfare a artnlB mw both as wodd,pka86 contact; | 

AlocHoB, bOmadontd Badness Fonaa, 98-100 Great North Road. London N2 ONL 
Telephone: OBI 365 2152 Foe 081 365 2151. 


tomers also use the corporate 
card. 

Beyond this, Mr Golub has 
expounded two Ideas for 
growth. 

The first involves greater use 
of information about its cus- 
tomers’ spending habits. 
Unlike bank card issuers, who 
use the Visa and MasterCard 
payment systems, American 
Express runs its own system, 
and claims this gives it more 
detailed information about 
bow its cards are used - and 
makes it possible to target 
marketing campaigns pre- 
cisely. 

Making this information 
available to retailers could 
make it easier for American 
Express to justify the higher 
It charges thwm. 

The second growth area 
involves taking American 
Express into new areas of the 
consumer finance business. Mr 
Golub bas yet to expound on 

What *HI« may awfariT, though 

he suggested at an investors’ 
conference last month that the 
company’s customer base and 
distribution mechanism could 
provide a platform for selling 
other companies’ consumer 
finance products. 

I n a different way, this ech- 
oes the ffiMtirfni suDcrmar- 
ket vision of the 1980s - 
though this time it would not 
involve large acquisitions. j 
Ironically, American Express 
has itself been taifcod of as an 
acquisition target in recent 
days. 

Perhaps this is not surpris- 
ingly, given the super-charged 
atmosphere in the US takeover 
market and the doldrums in 
which its share pries has 
languished after a brief spurt 
in foe middle of last year. 

On a multiple of around 11 
times forecast 1994 earnings, 
American Express is trading 
on a par with regional US 
banks and behind higher- 
growth financial services 
companies. 

General Electric is rumoured 
to be interested in making 
another big acquisition in the 
financial services sector, and 
this has helped to posh up 
American Express’s share 
price by 10 pa cant since foe 
end of last month. At a current 
market value of SlSte, though, 
it wojddbe a big target to hit, 
even for' GE. 


Castle moves 
closer to deal 
with German 
metals group 

The Castle Energy group of 
companies has completed the 
first of two steps in its settle- 
ment with Germany’s troubled 
MetaUgesellschaft group in a 
complex series of contracts 
between them, Renta reports 
from Radnor, Pennsylvania. 

Tbe US group said MetaU- 
gesellschaft has transferred 
3.6m of its Castle Energy 
shares to Castle Energy, leav- 
ing it with about lm shares (of 
about 7.6m shares issued and 
outstanding). In payment for 
the shares, Castle Energy bas 1 
transferred to MetallgeseU- 
sebaft certain participations It 
holds in debt to MetaUgesell* 
sehaft 

In the second step, MetaU- 
gesellschaft will cancel same 
Castle Energy debt obligations 
and Bffmtw some of its third 
party debt, together totalling 
about $375m. 

MetaUgesellschaft will also 
transfer its remaining Un 
Castle Energy shares, a 55.5m 
debenture convertible into 
500,000 shares, and Castle 
Energy warrants that it 
holds. 

Castle Energy will retain its 
natural gas business, free 
of any interests of MetaU- 
gesellschaft. Finally, MetaU- 
gesellschaft will issue to 
Castle Energy a 530m interest- 
bearing note payable to three 


March 2994 


Henkel 


Henkel KGaA 

Dtissddorf, Germany 

has received a short-term credit rating of 

A-1+ from Standard 6/ Poor’s 
P-1 from Moody’s Investors Service 


The undersigned acted asfmcmcial advisor to 
Henkel KGaA during the Rating Process. 


Lehman Brothers 


Ap pro, ni by Lriunm Bmlw humuhaj (BuiopAi unbffcfiFA. QI9M Ldna Bnichcn fate. 


Thtt mmm mm appmrt at a matttr rararj ralj 



Raine pic 

the housebuilding and contracting group 
announces the 


Private Placement 


US$ 40,000,000 

Guaranteed Senior Unsecured Notes due 2001 


Arranged and placed by 
Nat West Markets 


■NWV\. 

Na r\Vf:.s r Markets 


haul by .Yaftenc/ Kaumliww tad Wr. a Mttoba sf IMHO 











22 


FINANCIAL TIMES 


WEDNESDAY SEPTEMBER 14 1994 


INTERNATIONAL CAPITAL MARKETS 


US Treasuries improve on benign inflation data 


By Frank McQurty in New York 
and Antonia Sharpe and 
Martin Brice In London 


US bond prices improved 
yesterday morning after a 
benign reading on consumer 
price infla tion brought a mea- 
sure of relief to a fretful Trea- 
sury market. 

By midday, the benchmark 
30-year government bond was 

higher at 975, with the yield 
slipping to 7.678 per cent At 
the short end, the two-year 
note was & better at 995, to 
yield 6.317 per cent. 

With traders braced for bad 
news, the Labor Department 
announced that the August 
consumer prices index was up 
0.3 per cent from the previous 
month, a little less than the 
consensus forecast of a 0.4 per 
cent increase. The “core" rate, 
which excludes the more vol- 
atile energy and food sectors, 
showed a 0.3 per cent gain, 
matching expectations. 


Although the news was not 
bullish, it was enough to allow 
bond prices across the board to 
move forward. Dealers rushed 
in to cover positions set up 
amid the pessimis m that fol- 
lowed Friday's unpleasant dis- 
closure of a 0.6 per cent jump 
in August producer prices. 

Despite the favourable initial 
reaction, traders were uncer- 
tain whether the relatively 
tame CPI or the stronger PPI 
was the most accurate barome- 
ter .of inflationary pressures in 
the economy. 

Many had second thoughts, 
especially after the Federal 
Reserve Bank of Atlanta 
revealed a moderate increase 
in the prices-paid component of 
Us monthly survey on business 
conditions. 

However, most economists 
were sticking to their belief 
that the Federal Reserve would 
wait until November before 
lifting short-term interest rates 
again. 


Their reaffirmation enabled 
bonds to reverse course for a 
second time. By early after- 
noon, prices across the board 
were showing moderate gains. 


■ UK gilts edged higher yester- 
day as favourable figures for 
US Inflation lifted European 
markets. The long end was 
also supported by hopes that 


GOVERNMENT 

BONOS 


today’s spate of UK data, 
which includes inflation fig- 
ures for August, would be 
favourable for the market 

Meanwhile, analysts were 
digesting the implications of 
Monday's rise in UK base 
rates. 

Mr Michael Pratten at Kidder 
Peabody said the UK rate rise 
had increased credibility in the 
government's anti-inflationary 
stance. “But the market is still 


worried as to whether the gov- 
ernment will take any more 
necessary action on interest 
rates." he said. 

Mr Michael Saunders at Salo- 
mon Brothers said there may 
be a narrowing of the yield 
spread over bunds: “The UK’s 
inflationary outlook is good 
and the policymakers are 
doing the right tiling." 

The yield spread between 
gilts and bunds widened from 
about 135 basis points on Mon- 
day to around 138 yesterday. 
On Liffe, the December long 
gflt future fell to 99g before 
rallying to 100£, up & points 
on the day. 


■ German bunds bunt on Mon- 
day's gains but analysts sem 
the market remained con- 
cerned about supply and the 
outcome of next month’s fed- 
eral elections. 

The Bundesbank is believed 
to want to raise between 
DMBbn and DMIObn when it 


holds an auction of 10-year 
paper next week. 

The poor showing by the 
Free Democrats, the junior 
partner in the governing coali- 
tion. in last weekend's elec- 
tions in two east German 
states revived investors' aware- 
ness that a victory for Chan- 
cellor Helmut Kohl was not a 
foregone conclusion. 

Analysts said that hopes in 
some quarters of the market 
that the Bundesbank could 
announce a mar g inal cut of 
around five basis points in the 
repo rate after its meeting on 
Thursday were unlikely to be 
realised. On Liffe, the Decem- 
ber bund future rose 0.20 
points to 89-20 in moderate 
trading. 


0.14 points to 11Z30. Some ana- 
lysts expect the spread 
between bunds and OATs to 
break below the current level 
of around 50 basis points in the 
run-up to the German election. 


Swaps volume up 
by 58.5% in 1993 






By Tracy Corrigan 


■ Canadian bonds rose on the 
back of the stronger than 
expected showing by the Lib- 
eral party in a provincial elec- 
tion, which calmed market 
fears that Quebec would sepa- 
rate from Canada. “The market 
thinks there is no mandate for 
a referendum now." said Mr 
Simon Maggs at UBS in Lon- 
don. Yields at the short end fell 
30 basis points to 7.70 per cent, 
and 10-year band yields fell 15 
baas points to 9.03 per cent 


■ The better supply position in 
France and receding fears 
about an early presidential 
election supported French gov- 
ernment bonds. On the Matif. 
the notional bond future rose 


■ Elsewhere, yields on 10-year 
Italian bonds fell 13 basis 
points to 12.15 per cent on 
short-covering while yields on 
10-year Spanish bonds rose 2 
basis potato to 1126 per cent 
on infla tion figures. 


European Investment Bank 
launches L500bn offering 


NEW INTERNATIONAL BOND ISSUES 


By Graham Bowtey 


Offerings In a variety of 
currencies on the eurobond 
market yesterday drew support 
from the improved tone in gov- 
ernment bond markets. 

The European Investment 
Bank launched LSOObn of 
three-year bonds yielding 11.45 
per cent. Joint lead manager 
Deutsche Bank reported strong 
demand from, fund managers 
in Italy. Germany and the 
Benelux countries. 

“The lira market has been 
very volatile but there is now a 
feeling that the worst is behind 
us for a time." said a dealer. 

Joint lead manager IMI Lux- 
embourg said L300bn of the 
proceeds were swapped into 
floating-rate lire. 


Commerzbank launched a 
C$150m offering of five-year 
bonds priced to yield 20 basis 
points over Canadian govern- 
ment bonds. 

The bonds were mainly sold 
to retail accounts in Benelux 
and Germany, joint lead man- 
ager Merrill Lynch said. 


INTERNATIONAL 

BONDS 


"We have seen continued 
demand in the Canadian dollar 
market with large amounts of 
loan redemption at the 
moment and investors are 
looking to come hnntr into the 
market," said one trader. 

Some syndicate managers 
were surprised there was not 


more issnanna in the Canadian 
market following the rally in 
Canadian government bonds. 

However, others questioned 
the timing Of the laiTTirii “ilie 
Canadian mar ket has outper- 
formed the US market in 
recent mnnths and hanking on 

a further correction may be 
overly optimistic, " said one 

manag er 

Reed Elsevier tapped the dol- 
lar market with, a $2Q0m offer- 
ing of five-year bonds, priced 
to yield 40 basis points over US 
Treasuries. 

“The pricing was aggressive 
in what has been an anaamir 
market," said one dealer. 

“There seems to be contin- 
ued buying in the dollar sector, 
which is surprising given its 
recent turbulence. The US and 


US DOLLARS 
Read Efcevter 
Okctoankf 

Nippon Credit BV^Curacaoft 


Amount Coupon Price 
in. % 


Spread Book nmer 
hp 


oct-1999 asm 


OcL2Q0A 030 


+40)695-99) CS Fs*£atnVaSachs 
Kidder Peabody ML 
- Nippon Croat tort. 


CANADIAN DOLLARS 
Commerzbank Overeaae ffei. 


8.625 99.578R Oct-1 899 +4L2SR +20(7*- 99) CgnnWfz ba nWMLynch 


The total amount of swap 
transactions outstanding rose 
58.6 per cent last year to 
{8,4751m. according to the lat- 
est survey by the International 
Swaps and Derivatives Associ- 
ation. 

The volume of new swaps 
written in the second half of 
1993 rose 11.8 per cent to 
y? qi9Jm from S2,605bn in the 
first half. According to ISDA, 
the continued growth resulted 
from an increase in hedging by 
end-users. However, the pace 
of growth appears to be slow- 
ing as the plain vanilla swaps 
market reaches maturity. 

Activity in more complex 
swap-related transactions, such 
as caps, floors, collars and 
swaptions, rose most sharply, 
by 88.5 per cent for the whole 
year from $592bn in 1992. New 
activity amounte d to $607bn in 
the second half of 1993. 

ISDA said the continued 
growth in the over-the-counter 
swaps market does not neces- 
sarily represent a substantial 
increase in risk, as the figures 
represent the notional princi- 
pal amount used to calculate 
the cash flows involved in 
swap transactions. 


Swaps volume 

Notional princSpaL 


10.000 

■ Activity 

mr-lg 


6.000 - 


4,000 - 


1990 91 92 n 

Source: tSOA 


“Notional principal amounts 
reported by survey respon- 
dents are the base against 
which cashflows ore calculated 
and do not measure market 
value or credit risk,* 1 according 
to Ms Gay Evans, ISDA chair- 
man and a manag in g director 
of Bankers Trust. "Derivatives 
credit risk . . . typically varies 
from 1.2 per cent to 22 per cent 
of the notional amount for 
many dealers." 

The survey, conducted by- 
Arthur Andersen, gathered 
data from 66 firms represent- 
ing the majority of ISDA mem- 
ber swap dealers. 


STBtUNQ 
Cookson Qioup§fc) 


CS Rrst Boston 


AUSTRALIAN DOLLARS 
Austrafta & New Zeeland 8k. 


Hun g a rian bank raises $300m 


favinr U 


D-MARKS 

Baden-Wuertereberglachet 

GUU3ERS 

ABN Amro Bankftfl 

ITALIAN LIRE 
European imiaKmnnt Bank 
Heten Hnmoa BV Aim. 


100 Oct-1988 020 


Deutsche Bank 


By Virginia Marsh fn Budapest 


350 800 


I.G0R 0O2004 0425R 


SOObn 11.45 101.20 Oct-1997 1-25 
190bn 11.60 101 JO Oct1887 1.375 


BoRcma/D'teCtia/IMl Bk 
BQ /San Pauto 


Final terms red rwrvcafiaae urtaaa stated. The yMd spread |ow relevant govammret bond) at launch Es supplied by the lead 
m reagar. SConverdbta. Jfloadng rats note. fSamf-ennual coupon. R: load m-otfer price; fees are Karen at the re-offer tereL a) Rays 
3mm. LBscr +I45bp for yaws 1-6. then pays 3 mth. Ubor +345bp. b) Pays 6mth US LBsor +S0bp undi ATI 0/97, than pays 10% aviuady 
t hereafter. $ Amount In creased (ram £?5m. Converetcn premtun 17.55%. Convention prtca 288 p. Clean up caS at a>v dm* tear 18711/ 
99 If 86% of bonds ore converted, d) Amount Increased from NLQ2S0m. b) Pays a mth Libor +-l0bpL 


Canadian dollar markets are FI 350m issue of 10-year bonds, 
the markets of choice at the increased from an initial offer- 
moment. it seems," said one ing of FI 250m. 
syndicate manager The bonds were priced to 

ABN Amro launched a yield 65 basis points over 


underlying government bonds 
and were sold to Dutch pen- 
sion funds and investors in 
Switzerland and the UK, ABN 

Amro Raid 


The Hungarian National Bank 
has signed a $300m syndicated 
loan with a five-year maturity, 
completing its &5bn interna- 
tional borrowing requirements 
for this year. 

Around 3475m has come 
from bank loans, representing 
Hungary’s first moves into the 
syndicated loan market for 
some years, offlriala spM. 

Interest an t he loan, which is 
syndicated to 35 banks, is 
Libor plus 175 basis points. It 


was lead-managed by Central- 
European International Bank, 
which Is owned by Japanese 
and European banks and the 
Hungarian state. Agent bank 
was National Westminster. 

The loan will be used to 
cover Hungary’s expected cur 
rent account deficit of between 
$2.5bn and S3bn this year. 
Although central bank 
reserves stand at around 
S6.7bn, the country is due to 
pay a further $2.7bn in repay- 
ment and servicing of its $26bn 
gross foreign debt this year. 


WORLD BOND PRICES 


BENCHMARK GOVERNMENT BONOS 

Red Day's 

Coupon Pate Prtca change Ytetd 

Australia 9.000 0004 9X7700 *0.600 10.00 

Balkan 7.250 04834 91.1400 +0.130 8.63 

Canada * 6.500 06*34 853000 +0.B00 830 

Denmark 7.000 12/04 85.8500 +0.630 8.18 

Prance BTAN 6.000 OS/98 101 .6250 - 7.45 

OAT 5300 04/04 83.4400 40.160 8.03 

Germany Bund 6.750 07AM 94.7500 40.190 7.52 

Italy 8500 04/04 60.4000 4O510 12501- 

Japan Na1l9 4.800 06/99 1035360 +0.120 352 

4.100 12/03 97.0040 -0530 456 

Netherlands 5-750 01/04 888000 *0.180 7.45 


Italy 

■ NOTIONAL ITALIAN GOVT. BOND (BTP) FUTURES 
VJFfer Lire 200m lOOthg at 10094 


FT-ACTUARfES FIXED INTEREST INDICES 

Price Indtoas Tub Day's Man Accru 

UK QMb Sep 13 change 94 Sep 12 intere 


Day's Man 
Dangs 94 Sep 12 


— Low coupon yield— - Me dian coupon yWd- — High coupon yield- 
Sep 13 Sap 12 Yr. ago Sep 13 Sep 12 Vr. ago Sep 13 Sep 12 Yr B 


93.7700 

91.1400 

855000 

85.8500 

101.8250 

824400 

94.7500 

60.4000 

1035360 

97.0040 

888000 


*0.600 10.00 9.49 

+0130 863 857 

*0.800 850 858 

*0.630 818 819 

- 7.45 7.40 

*0.160 803 855 

*0.190 752 751 

*0510 1250f 12.16 
*0.120 352 454 

-0530 456 454 

+0.180 7.46 7.49 


Open Sett price Change High 
9555 9652 *0.72 97.00 

• 96.07 *050 


Low Eat vol Open InL 
9553 45535 62150 

0 340 


■ ITALIAN GOVT. BOND PIP) FUTURES 0PT10M8 (UFTQ Ure200m IQOtha of 10094 
Strike CALLS PUTS 


1 Up to 5 years £4) 

2 5-15 years (21) 

3 Over IS years (B) 

4 irredeemables (6) 

5 Al stocks (50) 


T19.7B 

+4L02 

119.73 

172 

&01 

5 yra 

062 

062 

027 

068 

069 

050 

082 

083 

071 

137.99 

*003 

13735 

1.62 

930 

15 yra 

059 

080 

7.07 

073 

073 

7.19 

095 

097 

7.42 

154J7 

+009 

154.13 

139 

931 

20 yra 

053 

053 

7.17 

073 

073 

735 

078 

OBI 

7.43 

17638 

-0.18 

176.67 

2.74 

083 

kraut 

061 

059 

731 







135.82 

+004 

135.77 

1.63 

9.15 

















— - 

— InUrton 5% — 

— 

— 

— Inflation 10% - 

— 



13 Sep 12 Yr. ago 


Spain 

8.000 

05/04 

00.7000 

- 

11.37 

11M1 

UK Gilts 

6.000 

08/99 

90-03 

+3/32 

830 

8.49 


8.750 

11AM 

86-30 

♦7/32 

8.70 

8.74 


9.000 

10/08 

102-15 

+4/32 

8.89 

974 

US Treasury * 

7350 

08/04 

98-27 

♦7/32 

7.42 

734 

7.500 

11/24 

97-27 

+10/32 

738 

734 

ECU (French Govt) 

6.000 

04/04 

833900 

+0.090 

8.62 

830 


Price 

Dec 

Mar 

Dec 

Mar 

9650 

2.80 

2.09 

228 

9.42 

9700 

232 

136 

230 

279 

9750 

2.06 

136 

274 

209 


6 Up to 5 years (2) 

7 Over 5 years fll) 

8 Al stocks p3) 


Sop 13 Sep 12 Yr. ape 

3.96 Up to 5 yr* 351 351 254 257 257 1.79 

351 Over 6 yra 358 3.86 3.16 3.70 353 259 

881 

3 year yield— — — 16 year yMd — — 2S year yMd 

Sap 13 Sap 12 Yr. ago Sap 13 Sap 12 Yr. ago Sep 13 Sep 12 Yr. gp 

754 9.76 873 7.76 868 864 80B 957 866 851 


Eat vet MHL Cafe 835 Put* 215*. FVevtaua da/a opan kt, Cafe 8673 Pua 11917 


Debenbses end Loans 


9 Oebs& Loans (75} 127.56 -005 12752 253 

Aresge grow le u a np oon ykkta are terere above. Count Sands: tree 0*-7W9fc 


nitd I rii nti 
arph ii> i\ 


Macau* 8H-10K94: Htfe 11 K and war. t M yield, ytd Year ts data. 


London doamg, -haw Yort mo-fey 
t Grow gnetuefing ■l tf noid >+| tax at 115 par 
ftioea: US. UK n 32rxto. oeiare « daefcrt 


Ytakto: local mpto 
cent payable by nrorafcdencag 

Some UUS l 


IIS INTEREST RATES 


Famine — 
FaHomtadi 


Treasuiy Bus and Bond YWds 

One nfei *BB Two year 

— . 71, Tan wrth 4.7B Hero jew— 

ft Dim w— t . — 4.72 fire yew 

, *i; Shnonfe— _ — — _ 5.18 10-year 

wen.. • One yew 355 30-year 


Spain 

■ NOTIONAL SPANISH BOND HmiRES (MBT) 
Open Sett prtca Change High 
Sep 8821 8628 -056 8650 

Dec 84.59 8453 *811 8456 


Low Eat voL Open InL 
8557 51536 84,182 
8459 18581 42,730 


FT FIXED INTEREST INDICES 

Sep 13 Sep 12 Sop 9 Sep 6 Sep 7 Yt-apo HgH* LaW 


CULT EDOED ACTIVITY INDICES 

Sap 12 Sap 9 Say 8 Sep 7 


Govt Secs. (UK) 9150 91.12f 9054 91.65 9126 10254 10754 9054 OR Edged 

Fbcod Interest 10852 10757 10819 10820 10759 12453 13887 10753 6-day awn 

' tor 1894. On —nwe re 8 k u Bm tvgn atooa co nmH e nn: T87AO |Wi/3S), kw 46.16 pn/TtQ. Raad Manat IW am ca 
26 and Fixed Vferew 18Z8. 8E acthfey Mots nbasad 1674. t Coneoferk 


I 880 111.7 100.7 795 865 

93.1 33.6 355 925 935 

ia35T (21/1/96 . few 5053 (3/159 . Baali lOOt Oreammanc Secu«aa laniV 


BOND FUTURES AND OPTIONS 


France 

■ NOTIONAL FRENCH BONO FUTURES (MAT1F) 


■ NOTIONAL UK <MLT FUTURE8 (UFFti* £50,000 32nda of 10094 

Open Settprice Change Hgh Low Eat ml Open Ir*. 
Sep 100-13 10024 *0-05 10024 1004B 1926 33300 

Dec 96-29 100-03 +(HM 100-07 96-09 75000 957B8 


FT/ISMA INTERNATIONAL BOND SERVICE 


■ LONG GK.T FUTURES OPTIONS (LIFFE) C50.000 64trw of 10094 


LUad »e Ihe mat Mamfenl bonds tar etfch there It an Adaqufee secondary marine. Latest prtoae at TOO pn at Sefeantow 13 
baaed BU OPw Chg. YMd tasued BU OOsr Chg. YtaM 



Open 

Sen price 

Change 

High 

Lpw 

Est VOL 

Open tot 

Strike 

Price 

Dec 

■ CALLS 

Mar 

Dec 

- PUTS — 

Sep 

11208 

112.16 

+0-02 

T 12.02 

111.72 

184364 

75.101 

Mar 

Dec 

11130 

11130 

- 

11132 

110.78 

74360 

79399 

100 

2-05 

2-51 

1-63 

a-2i 

Mar 

110.54 

110.52 

-a 02 

11034 

11030 

452 

6339 

IOI 

1-38 

2-24 

2-32 









102 

1-11 

1-63 

3-05 

403 


US. DOUAR SIMMS 

Abbey fed Tbafluy6*zC3 MDO 90% 90% 


Eat. *ol taea. Cola *r*3 Pun isos. Prerexs de/S open ML. Cafe 28015 Put* 28631 


■ LONG TERM FRENCH BOND OPTIONS (MATIF) 


Strike 

Pnce 

Oct 

- CALLS — 
Dec 

Mar 

Oct 

— PUTS — 
Dec 

Mar 

m 

034 

1.72 


0.62 

1.52 

. 

112 

0.12 

130 


133 

200 

re 

113 

035 

D.B1 


- 

200 

- 

114 

0.02 

0.43 


- 

- 

re 

116 

001 

030 


- 

4.03 

- 


Ecu 

■ ECU BOND FUTURES (MATS? 


Em. total. Cota 27.448 Puts 35,700 . PnMom day's open Cals 201.478 PuU 276598 


Ge r m any 

■ NOTIONAL GERMAN BUM) FUTURES (UFFE)‘ DM2Sq00Q IQOtha of 10094 

Open Salt pnee Change Mgh Low 6st vol Open inL 
Dec 6900 8920 *020 8925 8827 139113 143233 

Mar 87 95 8840 -0 15 6755 87.90 45 1064 



Opan 

Sen prtca 

Change 

High 

Low 

EaL vol 

Open tot 

Sep 

B0.18 

80.40 

+0.12 

8038 

8000 

1.111 

3379 

Dec 

US 

7936 

79.90 

+0.18 

7930 

7936 

1,467 

5.634 


■ US TREASURY BOND FUTURES (Cgf) $100500 32nda of 10094 

Open uatret Change High Low Eat. vot Opan W. 
Sep 10022 101-02 *0-13 101-04 100-12 26505 112.611 

Dee 99-25 100-06 *0-13 100-09 99-15 627261 343588 


9902 98-14 *009 99-17 96-26 


1/>60 8.196 


■ BUND FUTURES OPTIONS 1LTFF0 064250000 porta of 100% 


Strike 

Pnee 

Oci 

Nov 

CALLS — 
Dec 

Mar 

Oct 

Nov 

PUTS 

Dec 

Mar 

8900 

0.61 

1.06 

1.30 

136 

041 

0.86 

1.10 

138 

8950 

035 

0.79 

1.03 

1.16 

035 

139 

1.33 

236 

9000 

0.18 

0.57 

0.80 

036 

098 

137 

1.80 

256 


EaL Mil. total Gfea MS7 Pun KS3 Pnatoua da/e open rt_ Cafe 188868 Pub 175828 


Japan 

■ NOTIONAL LONG TERM JAPANESE GOVT. BOND FUTURES 
(UFFE) YTOQm IQOtfa Of 100% 

Open dare Chanoe Wgh Low EaL vd Open bit 
Dec 1075S - - 107.91 107.73 1551 0 

- UFFE co n aacw ttwtod on APT. Al Open W a eat Ifea. are tor tartans day. 


UK GILTS PRICES 


.-.noM-. ._ 1994 _. 

W fled PrictS Hpa law 


„VBU_ 

W fed Prtca £ • 


-1B84„ 
'«r~ Hp> Law 


-YUM- _I4W_ 

Unto PI CO Prtca E +ar- Hg|i Low 


Stan" Wreero to RwTrera) 


Tiea sue 196*0 

12SC19K 

EaJi3ncGaaiS9W5... 


596 100J1 
581 1ID,) 


572 — 


I0VPC1995 

B 85 

ft 57 

103 

-A 

107H 

103 

Tfen IZVcs I885tt ... 

1l» 

894 

108V 

-V 

uav 

1KV 

14K 1996 . 

1289 

7.17 

10ft 


11 7 A 

108V 

i5Vpc<OTR1» 

1LW 

740 

II iff 

-A 

121H 

1**H 

bOittVnc T9S eft 

1217 

7.47 

10ft 

-il» 

11 Ifl 

10B*V 

(amre <Opc iQH 

&50 

T.ra 

iwV 

-* 

118 Vi 

raft 

Hare Ow fee 1997ft— 

7.15 

7J2 

9T* 


raft 

VM 

Tiaan3V*1997rt — 

un 

731 

niA 


*21 » 

111 A 

E«di Iftpc 1997 

a se 

7.98 

10SJ] 


114,’, 

1W4 

Tins fiVoc ’asm — 

as2 

8<4 

ioi V 


"M 

1U1H 

Left <5*1897 

<2n 

M2 

11711 


WH 

1170 

OVpc 1898 . . 

938 

839 

1Q3J? 


**4|i 

rosti 

TttafLpcraOfe* 

Til 

MB 

98A« 




Tr*6V*19a5-984±- 

M3 

8.44 

■*« 


102 

94V 

<4* IW8-I 

1201 

682 

116* 


131* 

I1BH 

Tires Iftpc vm - 

1254 

647123VN 

-* 

l«*A 

123H 

UditSpclMB 

1075 

680 

uih 


*23*4 

HIV 

TtoreftpcIWB# 

H 21 

653 

103V 

— 

116* 

10ft 


nets i Hue 2001-4 

Itnu 10DJI Fining Jigae 1996-*— 
’S'? C*W«bn9i2|ie20M_ 
Tme 6 Lbc 200* i± 


•■mi havm — — - 

7\>pc 20064 


1831 9. IS <11 AN 

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Gan Bee CBpid ft 98 — 

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1000 101*8 wi 3 * 


(feted ngdoai 7*a 97- 
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£00 10H* 
1000 oft 


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1000 eft 6ft -*8 759 

- ISO 101% IQft 033 


- 100 102*8 XJft 0» BBft 04 

-300 10ft 10ft 734 Seeds Re 

1000 9ft 9ft 596 Hnfendft 


-100 TQft Kft 650 KcbeftO 

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1000 10ft toft 597 Cutest* 

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- 200 101*8 10ft 

- 200 Wft NEle 

.3500 86>4 6ft 

-800 10ft Wft 

- 380 10ft 10ft 


.an 1011] IQft ft 735 feredanftto. 


WoMBtaOIS 

— 2000 

WrtdBankft03 

— 3000 

total Bank ft 00 

— 1250 

8WS8 FRANC STRMOHIS 


AUWtoftOO 

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Card 4V BB — 

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Denrrek4V 99 


BBft 04 

300 






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nom 

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Noway ft 97 


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101*1 656 

9ft 751 

2ft 732 

8ft ft 771 

10ft ft 596 


96*2 ft 525 


10ft ft 514 
630 

10ft ft 556 


104 ft 557 
10ft ft 534 


107*2 ft 505 
9ft ft 552 
107 ft 57B 


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— 400 10ft 

— 200 81*2 
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— 1® 10ft 
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— 75 aft 
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• 9000 oft 
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Bill ft 957 
lOft 850 

eft -*8 1046 


10ft ft 528 
10ft ft 541 
10ft ft 592 
10ft ft 958 
107 ft 9,70 
91% ft 556 


954 
954 
ft B5B 


10ft ft 932 


Bft ft &3B 
Oft -2 958 


Oft ft 853 


ROftTMQ RATE NOTS 


10ft ft 443 


lift ft 454 
92*8 458 


458 
ft 432 


105 ft 342 


. 1000 9ft 98V 
. 1000 101 101 V 

. 3000 aft 9ft 


501 Mtarid Bank 5V Q2 — 
579 

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.190000 101*2 
250000 103V 


111 ft 446 

10ft ft 4.72 

ioft ft 418 


.200 10ft -raft ft 753 GwtancaUBftWUf 1000 iffiV 


-200 108 10ft 

- 190 107V 107V 
1600 9ft 9ft 


-200 102*2 10ft ft 595 Sec da Kraft 96 Ct. 

.an 9ft aft am GnSssc^teiosecs 
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Asm 0e« lOVpe 2000— U2 

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UbcW-C 1116 


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LJtot 13*2X2006 1067 

UwnedftKbred. — 959 

ICC fee *20 ML— 538 

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890 141 A 


— 1«A 

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— lift 9ft 
ft 10ft 100 

— lift 107 


370 113*2 
530 57*2 

482 181*2 
440 12ft 
- 136 


— 149V 12ft 

— 44V 9V 

— 4ft 2ft 

— 13ft 112 

78 6ft 

190V 1BV 

148V 12ft 

18ft 134V 


Cres Fonste 7V 08 — 

Dmrrefcft 98 

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woo 8ft Bft ft aw MbUHtaaoeut- 1000 10ft 

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.150 ioft raft ft 752 Aitaftalnee 10V sees S00 10ft 

.200 108 raft at* MCrafcfflVBCI 150 10ft 

. 750 107V UI7V 725 Brttfl Cctirfeb 10 98 CS 500 18ft 

1600 9ft 9ft 748 BSIftBCS 130 10ft 

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SCO 9ft Sft AM Gm Sac Cfetf 1096 CS .300 102V 

.«o raft raft 580 raw wm iooi cs 4co ioft 

1000 88V 99 753 NOpOnTdWIOVna 200 10S 

. 200 UB% HBV 175 Qrteta8 03CS -1500 Sft 

1500 aft 9ft 758 Onteto HiteoUft »CS 800 10ft 

3000 97V Oft ft 7.71 Ota Kenfe*rt 1ft » CS ^ 150 raft 

1500 70S raft 750 Oteacftor ra>2 act 200 10ft 

1500 10ft IK 57< Bdgun ft 98 Ecu 1280 10ft 

Card Beeps 9 °1 5 eu — — 1100 10lV 

Ota Liomi 9 K Ecu 12S 101*2 

SCO Si*, 81*2 &2D SB 1037 Ecu IIS raft 

2000 Oft 97 ft 7& Fra del S« 10*8* Ecu 500 ioft 

2000 2ft 98*| Ml teylftOOEcu 1X0 raft 

1500 91*i 3lV ft 7.75 SpdlBHBai — 1000 102*8 

2000 9ft 9ft +1*i 748 IfeM Wgdcm ft 01 Ecu — 2780 102*2 

29CD 9ft 97 ft 720 /«C 10 98 AS. IK IDlV 

1500 n 9ft 7.13 CarenBkAugttalftaAS-iao lift 


10ft 747 

101 849 

WV 741 


ian sft a 
_ 200 raft raft 
woo aft sft 


.1800 ioft 


6ft ft 7J3 

raft ft 7*4 
ioft ft 9ai 
109*2 ft 734 

raft ft B2B 

raft ft AS> 
103V ft 527 
ra* ft 023 

ioft ft am 

BV ft 654 
ioft ft 504 

raft ft aa 

ik ft ai4 


NteyNteTtasrey-AW 1000 

Banco ftotnaoa 300 

Stare A wow 600 

— 350 

Mamto am an ft — tgo 

OtotaftW- 2000 

CCCEOOBEcu, 200 

Ota Lyomb A 00 300 

OanftBA-VBB ... 1030 

Oreactv Rnreca A 95 DM 1000 

FBnoddSaai097 - - 420 

fteamOHT.. 10OO 

DtendOa-. .300 

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Unite Bank PwpSaiO m 

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ICft ft 844 
10ft ft 574 


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aoo raoV raft 


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5ft 9ft 9ft 48826 


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7ft 7ft 

400 18.1 131% 133V 

— 672 87% BB 

90 3.84 82*2 84 

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23 




N, 


L<Sy^ 

' A <' 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 


COMPANY NEWS: UK 


■* 

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Underlying growth of almost a fifth after purchase of Pillar 

Remixed Caradon pleases City 


7* ii 

-« 8 


.. 

: 

... r.‘5 & 

.V',1 


By Andrew Taytar, 

Constmcddn Correspondent 

The share price of Caradon, 
one of Europe’s biggest bund- 
ing materials groups rose fay 
almost 4 per cent yesterday 
after the company announced 
an Increase in tmdertying prof- 
its of almost a fifth in the first 
half of 1991 

Operating profits of Cara- 
don’s new mix of businesses, 
following last year’s £80ftai 
purchase of the FSDar budding 
products business from RTZ, 
rose freon £79 An to £9A2tm. 
The comparable figures have 
been restated to include Pil- 
lar’s results. 

Mr Peter Jansen, Caradon's 
chief e x ec utiv e said that oper- 
ating margins at Pillar, which 
had significantly increased the 
group’s exposure'- to the 
sharply recovering US con- 
struction market, had risen 
from S per cent to 8 per cent 
since it was acquired. 

The improvement was due 
mainly to increased sales vol- 
ume and cost reductions. 
Prices also had risen bat 
mostly in line with raw mate- 
rial costs, said Mr Jansen. 
Turnover rose from a restated 




' TorrfAndrmm 

Peter Jansen, left, and Antony Htchens, chairman: gcqnjsttlon of 
Pillar has increased exposure to US construction market 


£326.9m to £98L7m, including 
£5Um (fftftm) from, discontin- 
ued activities. 

Caradon manufactures a 
wide range of building materi- 
als jnchafing windows, doors, 
central beating boilers and 
dectranic control systems^far 
h ntiifap in tjhft UK, OS* and - 


continental European markets. 

It also has i nterests in auto- 
motive and aircraft compo- 
nents as well as a cheque 
printing business in the US. . 

The shares rose lip to 298p 
in spite of a 41 per cent fall in 
pre-tax profits to £90.8m, 
against £152.8m which 


included an' exceptional 
cinasm profit from the sale of 
its CarraraM^^ 

Earnings per share fell from 
26.4p to 8jp reflecting last 
year’s £334m rights to help 
fund the Pillar acquisition. 
Excluding exceptional items 
earnings rose from 6L8p to 85p. 
The interim dividend is 
increased from 258p to 25p. 

Profits rose fastest in the US 
increasing by 30 per cent from 
£27 An to £35.7*0 in spite of a 
20 per emit cent fall fat operat- 
ing profits to £20.4m from 
ch eq ue printing . 

Mr Jansen said that US 
building materials sales had 
been strong in the first half in 
spite of bad weather disrupting 
construction activity. 

UK profits rose by 22 per 
cent from £38.6m to £47.3m. 
Btrikfing materials sales, how- 
ever, were mixed doe to the 
feflnre of repair, maintenance 
and DIY work to recover in 
line with the increase in new 
building. 

Profits in continental 
Europe, where recovery in con- 
struction bag occ ur red 

later than' in the US and UK, 
fen from MX-ftm to jSl2m. 

See Lex 


Taylor Woodrow doubled to £22m 


By Andrew Taylor, 

CoiMtiu ct lon Correspondent -■ 

Pretax profits of Taylor Woodrow more 
than doubled fr om nft im bo *{am during 
the first six months of this year, led by a 
sharp rise in house sales. 

Earnings per share increased from LIJp 
to 35p, and the oanstruction and pro p erty 
group is raising its interim dividend by 50 
per cent from 05p to (LTBp. 

Its share price, however, fen 2p to 135p 
as construction and building material 
stocks continued to be depressed by Mon- 
day’s UK interest rate rise. 

Mr Cohn Parsons, cli wlfma n.- Raid the 
increase' would make it more difficult for 
housebuilders, bat could help the economy 
as a whole if it encouraged low inflation. 

The rise in profits had been achieved in 
spite of 'a 17 par cent dedine in t u rnover to 
ESl-fan (£823m). The reduction reflected the 
group’s refusal to take an construction 
contracts at miacceptable margins. 


Even so, UK contracting only Just man- 
aged to break even in the first half, 
although construction worldwide moved 
from a £3.4m loss to a £L8m profit, thanks 
to the mm settlement of aclahn far work 

On Sto wheett Wnfc fn TVu m nar l r 

The profits improvement was led by 
housebuilding, which mare than doubled 
from £&9m to film, with Taywood Homes 

■hi flra TTK TTwyeagfag ftc rawh- thn- 

tkm by 50 per cent to £3m (£2m). 

UK housing profits overall remained 
unchanged at £3m because of the absence 
of apartment sales, by the commercial 
property divirion, which co nt rib ut ed film 
in the first rixmmrths of 1993. 

Hanning profits from the US, Canada- 
and Australia also rose from ffan to £6m, 
after aQowing for a £3An writedown last 
year in southern California. 

Property profits rose from £6 An to 
£7Am doe to lower interest charges and in 
spite of a reduction In net rental resulting 
from previous disposals. 


Net borrowings tell by £2&3m to £90 Am 
reducing gearing to £1&9 ul Interest pay- 
ments as a result halved in the first half to 
fSJm (£10.5). 


Colin. Parsons 1ms done a good Job in 
steadying the ship after Taylor Woodrow 
lost its way in the early 1990 b. The balance 
sheet is in fine ' fettle while the group’s 
conservative approach to contracting and 
housebuilding should stand It in good 
stead with interest rates starting climb 
a gain Contracting, however, remains an 
unattractive business, particularly in the 
UK, where margins are likely to remain 
depressed in the short term. Hhonahirfid- 
ing profits should recover further, but 
group profits of £48m this year and £S0m 
next would put the shares on multiples of 
18 and 14 respectively, which, is dear 
enough given that tiie shares already have 
o u tperformed the market by about a 10th 
in the past 12 nwqfhs. 


United Friendly ahead 
sharply to £ 13 r 6 m ; ’ 


Fall in gambling profits 
leaves Urocldbrds at £8m 


ByChrtetopher Price 

A tuxnnmnd in tiie general 
insurance business underpin- 
ned a sharp rise at;, United 

Kriendly, where pre-tax profits 
more than doubled from £8.1m 
to £l3.6m for the flrst six 
months of the year. - - 

Pre miu m income increased 
to £170m (2168m), while earn- 
ings per share advanced to 
lL8p (7pX The intetm divi- 
dend is raised to (Up (5-fip). 

Mr George Mack, assistant 
managing director and finance 
director, ' said the general 
insurance business, which at 
toe last interims showed'a loss . 


of £7m, bad benefited, from 
changes to the underwriting 
and -n general im provement in 
the trading en v ironment 
-However, life assurance 
profits fell from £5.6m to 
£2.7m, largely as a result of 
losses , Incurred by Acnma, 
wttieh United purchased from 
American Express last year. 
Mt Baik said the court action 
being punned against the US 
group over the purchase price 
of Acnma was now IHcdy to he 
settled out of court 
Life Haul investments feD to 
£2.41bn (£2.6bn), reflecting 
weak bond and equity mar- 
kets. :_••• 


By Davkf BtecfcweB 

Crockfords, the casino 
company that was reversed 
into TV-am last year, reported 
pre-tax profits down from flSm 
to £A12m ter the 28 weeks to 
Jidy 17. 

However, the previous half 
Included CL93m in movements 
in^ provisions ter fflaoontinned 
activities - a hangover from 
TV-am. - ■ 

Operating profits from its 
ga mWing business teQ by 40 
per cent from ElA2m to £7 Am. 

Ute shares closed down at 
14Q? after recovering from a 
low of 132p. 

Crockfords opened London’s 


r 


United Friendly Group pic 

RESULTS FOR THE HALF YEAR ENDED 30 JUNE 1994 


■ Pre-tax profit more than double at £13.6 mfflton (1983 -Efi.l million) 

■ Gross premium income tip by 3 per cent to £170.2 mfilion. 

■ IntBrim efividend 6.1p per share, an increasepf 11 per cent 

■ New Mia annual premiums up 95 per cent to £18.5 million. 

■ Lite profits down to £2.7 million (1993-25-6 million) after 
development expenses. 

■ General business turn-round to uridenwriting profit of £3J5 million 
(1 993 - loss £7.0 million). 



Half Year. 

Fun Year 


1994 

1993 

1993 


■ Em 

! £m 

fin 



Life business profits 


General business underwit i«oft/0oss) : 3^ 


Other income and expenditure " ‘ ' ~ r ’ " * ■ ' 7j4 


Profit attributable to shareholders ' TJ' . . 


Dividend per stere .. 6.1|> 


Eaminfls per snare j ".w 


16.5p 




Tho iBHris tor the hall yws ancinb 36 Jpna.im«J KUuna itoshm been token tan 8w 

unautfitodlSS+IntertmSJatpnwrt . • • .s .- - » 

•Ths 199* toterim Statemart wi t» sent to a| ^iutMtkKa on 9p Sa(ttmbar 1994. Coplasm^r 
b®ottriosdfrirotreSMat*y> •- **■ ' r 

uniM fWw»y auup pus, 4asouawwk BMfl#flflfl(MAicionSei fltc . 


first legal castno in Cumni 
Street in 1961. 

The turnover, or the casino’s 
win from gamblers playing 
there, fell from £27 .2m to 
£24-9m. Mr Garry Nesbitt, 
^irmnn, sa id that just as 
many players were coming 
through the doors as last year, 
but the casino had won a 
smaller proportion of the 
money staked. 

Operating costs rose from 

£5^2m to £9.63m. 

Fully dflnted earnings per 
Bhare tell from ll-71p to 5.89p. 
An interim dlvidsud of 2p is 
being pall Mr Nesbitt said the 
company expected to pay a 
final of ftp.' 


Clyde Petrol 
back to black 
with £2.2m 

ByPoggy Hoinger 

Clyde Petroleum, the UK 
exploration and production 
company, has celebrated a 
ret u rn to toe black with its 
first dividend payment in 
tofee years. 

The independent oil group 
announced Interim net profits 
of £2. 2m, against losses of 
£16420, and a firet half payout 
oftSJSp, ■ i 

The - performance was 
achieved in spite of a . 19 per j 
cent drop in the average oil 
price, 

Turnover rose by 25 per cent 
to £49.lm. 

Mr Matanhn Gourlay. chair- 
man, said the group had tried 
toy itch foe dividend at a sus- 

tahubleleveLCiyde espectsto 

pay a further 0.65p at the end 
of toe year, ter a lp totaL 

The company increased pro- 
duction by 46 per cent to 
riLMX barrels ^of ofl equivalent 
per day. About 80 par cent of 
Clyde's reserves are produc- 
ing. 

Grarinr-was expected to be 
about 100 pm cent at the year- 
effld. . .. 

First half earnings were 
(MR against a loss of 4-6p. 


Norw6fe( re-pnrehase 

Norweb yesterday became toe 
sixth ' regional Electricity 
group to repurchase its own 
riiarea by buying back 5m of 
ffr'own shares representing 

2A9 per cent of its issued eapk 

taiaiTOGpasliarfc 
Meanrhflc South Western 
Electricity bought bode a fur- 
ther 504000 of its shares at. 
78B> bringing the total dunes 
it has" fffi mrrhiw e d in recent 
weeks to 4.75m shares repre- 
senting dxmt S3 per cent of 
id capital. 


Baynes 
back on 
acquisition 
trail 

By Christopher Price 

Charles Baynes, the 
fast-growing specialist 
engineering group, yesterday 
returned to the acquisition 
trail, paying a total of £ 14.4m 
for five companies. 

It also repor te d, interim 
pretax profits 71 per cent 
ahead at £&6m (£337m), 
boasted largely by other 
recent acquisitions. Turnover 
increased by a similar amount 
at £67. 04m (£3934m), while 
earnings per share grew IS per 
cent to 1.97p (i-65p). The 
interim dtvtdend was raised 22 
per cent to 0.7p (0375p). 

Mr John Par kins, ftiam* 
director, said that first half 
trading for existing businesses 
had been slightly uhaad of the 
same time last year. The valve 
dMUan had shown toe most 
i m provement, with, o per ati ng 
pnrftts increasing 64 per cent 
to£13Sm on turnover 25 per 
cant ahead at B4 ten 
(ElLOfru). He ssdd that 
overseas dema nd from the 
petrochemical industry was a 
significant factor In the 
improvement 
However, the aerospace 
business continued to 

struggle. Operating profits 
dipped from £516,000 to 
£73,000 on t urno ver 9 per cent 
down at £835m (ESJni). 

Buck ft fflekman, a tool 
d istri b uto r which Baynes 
acquired last year, cont ri buted 
to its first ten half year with 
£24.B7m in sales and £L85m in 
operating profits. The 
subsidiary was also behind the 
boost to cash reserves which 
jumped from £1.47m to 
£14.47m yeawm-year. 

Hr Furitins said the cash 
was bring used to tend 
yesterday’s acquisitions, a 
move wMch would leave the 
compa n y cash neutraL Pillar 
Engineering Supplies was the 
most eostiy of these at £53Bm. 
ft win link op with its former 
competitor BAH, greatly 
enhancing Baynes’ 
distribution networ k. 

The company is also paying 
£435m far French valve group 
Industrie Htouriqne Pour Les 
Fluids, mn for Maxseal, a 

Briatoi-based aolenoid valve 

manufacturer, £Um ter 
Oneal Valves, a manufacturer 
of ban valves fte- ships, and 
£Um ter Andrews Fasteners, 
a dist rib utor of 
corrosion-resistant fasteners. 


Delta shares faU despite 
5% advance to £30.6m 


By Andrew Bdger 

Shares hi Delta Cell by 3lp to 
46Sp after the cables and engi- 
neering group said increased 
activity in the UK construction 
market had not yet been telly 
reflected in demand for its 
plumbing products and electri- 
cal circ ui t s . 

Delta's pre-tax profits rose 5 
per cent from £29jm to £306m 
in the six months to July Z, 
turnover grew by 3 per cent to 
£440m. 

Sir Martin Jacomb, chair- 
man, said* “Despite conttnuteg 
encouraging signals, overall 
patterns of trading have 

remained in c onsist en t." 

Mr Robert Easton, chief exec- 
utive, said the “light end* of 
the bunding materials market 
in the UK was still flat, but the 
Europ ean cons truction market 
had rebounded sharply. 

Delta’s cable businesses con- 
tinue to softer from intense 
price competition. Mr Easton 
said the group had pushed 
through price increases of 
about 20 per cent in general 


cables and wiring, but this had 
been telly absorbed by higher 
prices ter raw materials such 
as copper and pvc. 

The engineering division 
Increased operating profits by 
27 per cent, mainly because of 
a recovery in demand for 
plumbing products in Conti- 
nental Europe. 

Industrial services also 
increased profits, reflecting 
growth in the Australian busi- 
nesses. Circuit protection, how- 
ever, was affected by a sharp 
downturn in demand for its 
products In the Middle East 
and by restructuring costs. 

Gearing fell from 28 to 23 per 
cent Mr Eaton said the group 
would continue to develop 
through organic growth and 
appropriate acquisitions. The 
sucoess of a Malaysian protec- 
tive coatings plant had 
reinforced the group’s commit- 
ment to further expansion In 
south-east Asia. 

Earnings per share increased 
by 43 per cent to l&lp (l23p). 
but the interim dividend was 
lifted by only by 2 A per cent 


from 43p to 43p. 

• COMMENT 

A 6 pm* cent drop in the share 
price seemed a little harsh for 
results which were in line with 
forecasts, even if the dividend 
was stingier than expected. 
Delta’s trouble is that, having 
cut costs so much, it is seen as 

a prime beneficiary of a recov- 
ery to volume - and the cau- 
tious trading statement was 
enough to unsettle a twitchy 
market. The operational gear- 
ing argument still stacks up. 
however - a 2 per cent Increase 
in engineering translated 
into a 27 per cent rise in oper- 
ating profit. Even tie troubled 
cables market could be lucra- 
tive when it turns - as BtCCs 
results in the US recently dem- 
onstrated. Yesterday's share 
price fall was on low turnover 
of a tightly-held stock. 
Unchanged full-year forecasts 
put the shares on a prospective 
multiple of about 18. Thai 15 
per cent premium to the mar- 
ket looks Justified, on medium- 
term view. 


Cost of restructuring Queens 
Moat debt jumps to £42m 


By Paggy HoHngar 

Queens Moat Houses, the 
straggling hotris group, yester- 
day added teel to the contro- 
versy over hefty charges paid 
to banks and advisers by 

annmmt-fng flint the COStS of 

restructuring its £l3bn bor- 
rowings would be £42m. 

Mr Andrew Coppel, chief 
executive, said delays in con- 
cluding toe refinancing taiva 
had forced the group to 
increase its provisions for 
charges, inctefing facility fees 
to banks, by £LQm to £42m. 

The delays have further hit 
tiie group by leaving it with a 
£L93m charge (gl QJbn gain) far 
currency movements. Because 
of restricted hanking arrange- 
ments in jdace while the dis- 
cussions are under way 
Queens Moat is unable to 
hedge against its foreign debt 

These factors helped to 
increase the pre-tax loss for the 
first half to July 3 by 56 per 
cent to £59m (£37.8m). 

Excluding exceptionals, the 
pre-tax loss fell from £48.4m to 
£3LSm. 


The company Is believed to 
be frustrated by the scale of 
fees paid to banks and advis- 
ers, both its own and those of 
the lenders. Mr Coppel said he 
had little choice, however. “My 
first priority must be to restore 
value to shareholders and get 
this company restructured.” 

Queens Moat has been in 
restructuring talks for the last 
18 months. While most of the 
company’s 74 lenders have 
agreed restructuring proposals 
- which include a substantial 
debt-fbr-equity swap - a minor- 
ity are objecting to the terms. 
Those resisting the proposals 
are believed to include lenders 
who came into Queens Moat 
through the secondary debt 
market 

Mr Coppel said he was confi- 
dent the group “would get 
there in the end". The provi- 
sions were made on the 
assumption that the lenders 
would all agree a refinancing 
by the end of the year. 

The long delays in complet- 
ing a restructuring, which was 
originally expected by Jane, 
are not believed to be causing 


the lenders any great concern. 
One adviser has said that the 
improved trading position 
made an early resolution of the 
disagreements between lenders 
less urgent 

Yesterday Queens Moat 
reported a 97 per cent increase 
in operating profits to £173m 
on sales 12 per cent ahead to 
£2fi7m. 

The improvement In profits 
was partly because of a strong 
recovery to the UK hotels divi- 
sion, with operating profits up 
54 per cent to £i43m. Occu- 
pancy rates increased from 51 
to 57 per cent, although room 
rates fell by more than 3 per 
cent This was in line with 
QMH’s strategy initially to 
chase volume and, when possi- 
ble, puSh up rates. 

Continental Europe 
remained difficult in spite of a 
turnround In Germany. 

Queens Moat raised £22m 
from disposals in the first half. 
About 14 more hotels are tar- 
geted for disposal 

Net debt was £13bn (£L3bn). 
Losses per share deepened to 
7.2p (5p). There is no dividend. 


Kenya shilling boosts Janies Finlay 


By Peter Pearm 

Strength of the Kenya shilling lay behind 
a 30 per cent rise in pre-tax profits at 
James Finlay, tiie overseas trading and 
financial services group, in the first half of 
1994. 

Profits rose to £4£4m (£3Am) after an 
exchange gain this time of £646,000, 
against losses last of £l-3%m- Turnover 
advanced to £82m (£7K3m). 

Mr Richard Capper, deputy chairman, 
expected toe Kenyan tea crop to be about 
20m kg, some 2m kg down on the previous 
first hall This led to operating profits 


from plantations (excluding Bangladesh, 
where the tea is not picked until late in 
the first half) felling to £2.46m (£2-57m)- 

Lowar tea trading was oflfcet by reduced 
losses at Finlay Industries in the US, 
which makes tractors and lawn mowers 
and the trading, manufacturing and mer- 
chanting division saw lower profits of 
£L21m. (£L55m). 

A bright spot was the confectionery and 
beverage manufacturing side, where prof- 
its advanced to £L77to (£L12m) on the 
back of greater volumes at Paynes and a 
lower interest MIL 

Losses on the oil and gas side fell to 


£157,000 (£418,000) and the group took a 
provision of £2.9m against the discontinu- 
ance of these operations by the end of the 
year. Mr Capper said it was “such a small 
part of the Finlay empire" and had not 
been a very good investment 

The prevision was offset by a profit of 
£3J2m from the disposal of the 18 per cent 
stake in Rockall Scotia Resources. 

Mr Capper said that the 31 per cent tax 
charge was Bkely to rise between 40 and 45 
per cent for the year, against 71 per cent 
last time. 

Earnings increased to 3£p (lp) per share 
a nd the interim dividend Is held at 2p. 


Everest Foods suffers Boyd leaves Goal Petrol 

pressure on margins I By Peggy ger months. ^Wrnover v 


By HchanJ Wofffe 

Everest Foods, the West 
Midlands-based potato chip 
producer, blamed low-cost 
economy products for a 47 
per cent decline in pre-tax 
profits In the year to May 
3L 

The group, which also ownB 
Ashfords, the lossmaking food 
distributor, saw pretax profits 
fall from £2. 09m to £l.lm. 
despite a 14 par cent rise in 
turnover from £31.9m to 

Mr Bob Gilbert, c h air m an, 
said that supermarket demand 
for economy goods put severe 
pressure on margins. The 
group has revised its 
contracts to lend more 
flexibility to potato pur- 


However, the group argues 
that fas contracts place fain a 
strong position to survive the 
current potato crop fears, 
which have pushed prices 

high 

Everest cat its final dividend 
to L8p <2J5p), leaving a total 
of 2_Sp (3.7ft). Earnings per 
share declined from A46p to 
&23P. 

Ashfords, which made losses 
of about £250,000 this year, suf- 
fered as Sunday trading by 
super ma rkets reduced demand 
from the smaller convenience 
stores which toe distributor 
supplies. 

In July, Everest sold toe 
majority of its state in Arnold 
Davies, the egg production 
company, to concentrate on its 
core business of potato prodr 
™4e 


Goal Petroleum, the oil and 
gas explorer, is Hkely to look 
beyond the North Sea for 
growth now that Mr David 
Boyd is retiring after 20 years 
as m ana g in g director. 

Mr Boyd’s retirement was 
announced yesterday, along 
with interim results showing a 
38 per cent fell in net profits 
from £2.77m to £1.76m for the 
six months to June 30. 

The profits were hit by the 


sharp fall tn ofl prices over the 
last 12 months. Turnover was 
down from £20.9m to £20.1m 
although production rose by 
23 per cent to 12,300 barrels of 
ofl equivalent a day. 

Mr Boyd, 59, is closely iden- 
tified with Goal, where he has 
worked since shortly after its 
flotation in 1973. He win be 
replaced by Mr Duncan 
Ritchie, the commercial direc- 
tor. 

Earnings per share fell by 37 
per cent from 2.07p to L31p. 


DIVIDENDS ANNOUNCED 


Baynes (Chartew) — —ht 

BOM fin 

Btaodon „ , ..M 

Caradon Jnt 

Chramortt I n t 

Ctyde Potroiauu Int 

Conrad RJtfatat fin 


Emess ahead as ‘markets 
emerge from recession’ 


Pretax profits at Emess, the 
UK’s largest fighting company, 
rose 45 per cent from CLlm to 
£L6m to the first half of 1994, 
as toe consumer and commer- 
cial lighting markets “emerged 
from recession". 

Turnover grew organically 
by 8 per cent to £64.5m 
(£59 .5m) and Mr Michael 
Meyer, chairman, ascribed the 

mar gin im pro vement to “strin- 
gent cost ccntror. Also, pro- 
ductivity rose with sales per 
amployee 19 15 per cant Trad- 
ing profits rose by 24 per cent 
to £2£m (wibi) ■ 

The shares eased 2%p to 34p 

yesterday. 

Trading profits from con- 
sumer lighting were up at 


£800,000 (£200,000) m turnover 
at £3K6m (£84Bm). Profit and 
turnover advances were less 
dramatic on the commercial 
safe at £2m (£L9m) and £2&9m 
(£24.7m) respectively. 

The overseas companies 
lifted their proportion of turn- 
over by 1 percentage point to 
57 per cent 

Profits from -the UK were 
unchanged at £3-4m, but this 
time there were no-losses from 
Germany, against £000,0 00 last 
time. Losses from the US deep- 
ened to £400,000 (£300,000). 

Fully diluted earnings 
increased to 0.8p (O.Gp) per 
share and n gafai- In line with 
recent .practice", there Is no 
interim dividend. 


Crockfords — ... Int 
Cuwlni Property— Jut 

Delta tat 

Domestic A Gen § fin 

DRS Data tat 

SC Jnt 

Everest Foods fin 

Eyecsr* Prods ... — ..Int 

FBD Hokfinflt fait 

Rnlay (James) Fnt 


Haggas (John) —fin 
bra Bus Comma —...Jnt 

Khgflahar — tat 

London and Man —Int 
Maybom Group § —Jnt 
Merc ha nt s Trust tat. 

Md States § int 

PjfWeao l.stmro—.. tat 

Pei Mn s Foods —Jnt 

P*0 tat 

Record Hobfiitg* int 

Taylor Woodrow —Jnt 

Trinity tad Int 

Unfed Friendly tat 

Usher (Frank) § 

Watmoughs tat 

Wpavale Oanekm Int 


Current 

pqffmmt 

Dare of 
payment 

Comes - 

poncing 

dlvMand 

Total 

for 

year 

Total 

last 

year 

0.7 

3.7S 

nS 

Z9f 

4t 

035 

05 

Nov 4 
Nov 24 

Nov 18 
Jan 3 
Oct 26 
Oct 27 

0575 

355 

15 

2.33 

3.6 

nl 

nfl 

5.4 

05 

1.65 

4.75 

15 

8.91 

6.1 

na 

nfl 

0J»t 

Nov 1 

025 


0.73 

2 

Oct 21 

- 


25 

1.4t 

Oct 27 

1 


3 

4J3 

Deo 1 

42 


145 

105 

Nov 24 

16 

27.75 

225 

1 

NOV 3 

-. 


- 

1.75 

Oct 21 

1.75 


4 

1A 

Dec 2 

25 

25 

3.7 

o^t 

Oct 4 

05 


25 

2J75* 

Oat 21 ’ 

23 


5.175 

2 

Jan 4 

2 

- 

4.15 

1.7 

Jan 3 

35 


45 

2 

Nov 25 

2 

3 

3 

W 

Nov 10 

nl 


nfl 

4 A 

NOV 17 

4 A 


14.9 

6.6 

- 

5.12 


1556 

2 

Nov 4 

15 


5.7 

2.85* 

Nov 18 

255 

m i 

11 

ni 

- 

0.75 


a75 

1A 

Oct 20 

- 


1.3 

1-75f 

o«2i 

1.76 

■■ 

4*45 

135 

NovSS 

24 

* 

305 

1.15 

- 

1.15 

re 

35 

075 

NOV 2 

as 


15 

35 

Oct 26 

3 


9.7 

8.1 

Oct 20 

55 


165 

45 

Nov 4 

35 

7 

6 

1.7 

NOV 4 

15" 

- 

65* 

253T 

Nov 7 

2.75 

- 

4 A 


Dividends shown pence per share not except where otherwise stated. TOn 
Increased capital. §USM stock. ’Adjusted for scrip issue, ft Second Interim 
making 5.7|p to data, fktsh pence. 







24 


COMPANY NEWS: UK AND IRELAND 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 


New contracts in UK and progress at Hungarian arm fuel the advance 

Watmoughs ahead to £7.91m 


By David Blacfcwefl 

Contracts to print the Daily 
Telegraph's TV & Radio Guide 
and The News of the World's 
colour supplement helped Wat- 
moughs (Holdings), the 
Bradford based printer, to lift 
interim pre-tax profits by 24 
per cent 

They Increased from £&37m 
to £7.9Im in the six months to 
end-June on sales 26 per cent 
ahead at £82. 7m (£65.5m). 

Mr Patrick Walker, chairman 
and chief executive, said the 
UK had perfumed better than 
expected, with overall demand 
improving in addition to the 
new contract work. 

The Hungarian, subsidiary 
had progressed in line with 
expectations, while the Span- 
ish arm, which came on stream 
last year, had performed 
slightly worse than expected. 


Blagden 

By Carofin© Southey 

Blagden Industries, the steel 
drum maker, yesterday 
announced a restructuring pro- 
gramme as well as pre-tax prof- 
its down 74 per cent at the 
interim stage. 

In the 25 weeks to June 28, 
pre-tax profits fell from £3. 04m 
to £780,000. Last year's figure 
Included £6X7,000 from a prop- 
erty sale. Group restructuring 
and reorganisation costs rose 
from £330,000 to £L5m 

Mr Richard Searle, chief 
executive, said the changes 
underway as well as the latest 
results showed the company 


By Christopher Price 

Domestic & General, the 
domestic appliance insurer, 
yesterday announced a 24 per 
cent rise in pre-tax profits from 
£7.6&n to £9.56m. for the year to 
the end of June. 

However, the results came 
towards the lower end of ana- 
lysts’ expectations, and this, 
together with a warning of 
increased expenditure on its 
German operations and new 
product development sent the 


Profits in the UK were 23 per 
cent ahead at £7 .lSm (£5-83m) 
on turnover of £67£m (£59.2m). 
Mr Walker said turnover in 
gravure printing had risen 
from mam to £4l6ra, and in 
web offset printing from £21m 
to £27 An. 

The company started print- 
ing the Telegraph TV guide in 
January and the News of the 
World supplement in April. It 
had also won more business 
printing retail and travel bro- 
chures and inserts. 

Last month the group deliv- 
ered the first Sky TV Guide, 
which had a print run of 2.7m 
copies. The guide is expected 
to increase circulation by 
60,000 copies an issue, giving It 
the biggest circulation of any 
UK magazine. 

In Spain recession held back 
the level of business outside 
the printing of EBola! and Hello 


“had huitefi Bie slide". 

Mr David Kendall, chairman, 
said “a modest improvement” 
was evident this year com- 
pared with the second six 
months of 1993 when the group 
incurred a loss of £106,000 after 
Interest. But underlying 
demand for steel drams 
remained weak, while profit 
margins had been, eroded due 
to pressure on selling prices 
and rises In raw material costs. 

Demand far speciality chemi- 
cals remained at a ‘reasonable 
level”. However, it had not 
been possible to recoup raw 
material cost rises in the UK 
manufactured resins division. 


shares retreating 92p — or 5 per 
cent - to £1693. 

Turnover increased to £66m 
(£56.3m), while earnings per 
share advanced to 93.47p 
(75.63p). The dividend is raised 
to 27.75p (22.5p) with a pro- 
posed final of 18.5p. 

Mr Mar tin Copley, chairman, 
said that although the rate of 
growth bad slowed over the 
year, particularly in the second 
half trading was stDl satisfac- 
tory. 

He added that the company 


magazine. Profits were 
£415,000, compared with 
SZKfiQQ from the start of the 
operation in the second quar- 
ter last year. 

Profits in Hungary grew 
from £215,000 to £305,000 on 
turnover up from £2.63m to 
£4.69m. The Budapest-based 
subsidiary now prints 86 peri- 
odicals and exports to Ru ssia, 
Romania and Poland. 

Net interest payable was 
£L61m. against £76,000 in the 
first half last year, when about 
£L75m of interest was capital- 
ised. For the whole of 1993, 
interest payable was £L97m. 

The tax charge of 27 per cent 
(23 per cent last time) reflected 
a fall in capital expenditure, 
which is expected to be £28an 
this year, felling to £lQm in 
1995 before rising again. 

Banting s per share rose to 
7A2p (6. rap). The interim tod- 


included a £S9m (£89m) con- 
tribution from discontinued 
operations. The chemicals divi- 
sion contributed £26 ,2m 
(2252m) while the UK packag- 
ing operations contributed 
£16m (£17m). 

As part of its “strategic 
review,” Blagden gold its main 
plastics panicag in g operations 
for £69m in July. A loss of 
about £3.8m, provided -for in 
the 1993 accounts, will fall in 
the second half. 

Changes to management 
in clud e the appointment of Mr 
David Koache, previously 


Was focusing tts attentions on 
the uninsured market - less 
than 30 per cent of domestic 
appliances in the UK are cur- 
rently insured - and the 
largely unexploited European 
market However, those objec- 
tives would necessitate addi- 
tional expenditure “which will 
continue to impact in the com- 
ing year.” 

Another cloud on. the hori- 
zon was the on-going DTI 
inquiry Into extended warran- 
ties, the outcome of which was 


Hand has been increased to L7p 
(U5p). 

• COMMENT 

Watmoughs looks well placed 
— demand is rising and custom- 
ers are seeking the group out 
because of its market position. 
Results are already weighted 
towards the second halt and 
will benefit from a full contri- 
bution from the two new con- 
tracts. It is confident of passing 
on price increases; in any case 
most of its paper cansfnnptian 
is paid for by its customers in 
tiie first place. There is plenty 
of room for growth in Hungary 
and Spam. Earning of 22p are 
expected for the full year 
despite the increasing tax 
charge. This puts the company 
on a prospective multiple of 
18.5 - fUlly valued, but a 
strong hold. 

See People 


finance director of Massey 
Ferguson, as finance director 
to replace Mr Lance Levine. As 
announced earlier, Mr Dick 
Searie has taken ova* from Mr 
Kendall as chief executive. 

The rfigmiwia business was 
split into two divisions, manu- 
facturing and trading, to “pro- 
vide more focus,” Mr Kendall 
said. 

Following the rights issue in 
June which raised ftsam an d 
the sale of the plastira packag- 
ing businesses, gearing s tands 
at 20 per cent compared with 
82 per lagt time. 

Eamlng s per share were nil 
against 2.7p last time. 


being awaited by the company 
before It introduced some new 
products to the market 

Total contribution (under- 
writing profits before 
expenses) amounted to £KL66m 
(£13.29m) and Investment 
income increased slightly to 
£6^8m (£6.14m). 

The company also 
announced that It was apply- 
ing fin: a full listing on the 
London Stock Exchange, but 
added that it had decided 
against having a share split 


DRS Data 
shares drop 
58% on 
fall in sales 

By Caroline Southey 

Shares in DRS Data & 
Research Services, the 
scanning equipment 
manufacturer which came to 
the market in May, fell by 58 
per cent yesterday after the 
company warned that 
uncertainty in education, the 

group's biggest market, bad 
led to lower than expected 
sales. 

Shares in the Milton 

DRS Data 

Share price (pence) 



Keynes-based company dosed 
56p lower at 40p. The shares 
were placed in May at UOp, 
valuing the company at £40m. 

Mr Jnhw Mar Arihqr , 
riMiniMii [ m<i| that tn first 

months of the year sales in in 
schools, which accounted for 
70 per cent of tu rno v er, were 6 
per cent above the same period 
last year. However, by the end 
of the 28-week period sales 
into schools were down by 14 
per cent Turnover for the 28 
weeks to July 15 fen from 
£A87m to £5.7Bm. 

Mr MacArthur said he 
expected sales to schools to 
repres en t a “smaller 
proportion of our growth in 
the future. 1 * 

DRS was seeking to broaden 
its product base as well as 
expanding into e ther areas, 
including the health sector. 

DRS supplies scanners 
which can capture 
hand-written data, such as 
ticks on multiple-choice forms, 
for processing by computers. 

Pre-tax profits stood at 
£L48zn (£L54m). Earnings per 
share were 3-19p (3A2p) and a 
lp dividend Is being paid. 


74% down at £780,000 

Turnover dipped from 
£U6.9m to £113.6m, which 


Domestic & General 24% ahead 



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fax 312-341 -3168. Or is London; 
phone 44-71-929-0021, ext. 7110, 
fax 44-71-929-0558. 


J Haggas 
slips 

to £2.27m 

A decline in pre-tax profits 
from £2.93m to £2.27m was 
reported by John Haggas, the 
worsted spinning and fabrics 
group, for the year to June 30 
despite turnover ahead from 
£32Am to £34Jm. 

The dividend is being main- 
tained at 3p with a proposed 
final of 2p. Earnings per share 
slipped to 6Jp (9-lp)- 

Record rises 22% 

Record Holdings, the Sheffield- 
based tools maker, lifted pre- 
tax profits by 22 per cent from 
£984.000 to £L2m In the first 
half of 1994. 

Turnover advanced from 
£l3An to £15_2m with overseas 
sales exceeding UK sales for 
the first time at £7.62m 
(£6.42m). 

The interim dividend is 
being maintained at l.ifi p, pay- 
able from earnings per share of 
232p(L78p). 

BDM climbs 15% 

British Data Management, the 
specialist data management 
and storage group, raised pre- 
tax profits by 15 per cent from 
a restated £4.01m to £4£2m for 
the year aided June 30. Turn- 
over was ahead 8 per cent at 
216.8m. 

Interest ch arges took an 
Increased £705,000 (£224X100) as 
a result of acquiring two prop- 
erties previously leased. Earn- 
ings per share were 14.lp 
(restated I3.4p) and a final divi- 
dend of 3.75p makes a total of 
5.4p <4.7Sp). 

FBD falls to I£5.4m 

FBD Holdings, the Dublin- 
based insurance and financial 
services group, saw pre-tax 
profits fall from I£?.3m to 
I£5.44m (£5. 36m) in the first 
half of 1994. 

Underwriting losses fell from 
I£8.53m to 12233,000. Insurance 
activities contributed I£4.6m 
(I£S.6m) after realised losses of 
I£l.63m (122.57m gains) on 
investments. 

Earnings per share dropped 
to 8.89p (LL25p) and the 
interim dividend has been 
stepped up to 2375p (2-3pX 

Vymura maiden 
Vymura, the wallcoverings 
company which came' to the 
market In May, reported pre- 
tax profits of- £LB3m tor the 
first half of 1994 against 


Not a cloudless sky 
for Irish Permanent 


Alison Smith charts the society’s road to conversion 


T he Irish Permanent 
Building Society, 
Ireland's largest mort- 
gage lender with about 27 per 
cent of the.£7.3bn Irish mort- 
gage market; is not living up to 

ItS 

It is stiH Irish, but its status 
as a building society is increas- 
ingly impermanent, as it is 
well cm the way to becoming a 
publicly quoted company 
floated on the London and 
Dublin, stock exchanges. 

The process is set to move a 
further step forward today as 
the pathfinder prospectus is 
doe to be published when the 
society announces its interim 
results. 

The society’s road to conver- 
sion illustrates some of the dif- 
ferences between the processes 
and regulatory regimes in 
Ireland and tn the UK - high- 
li ghted alqn by tha agreed 

bid of £L8bn by Lloyds Bazik 
for Cheltenham & Gloucester 
Building Society. 

For example, Irish Perma- 
nsrt appears to have benefited 
from some flexibility in 
enabling its customers to bene- 
fit from free shares. 

After savers and borrowers 
qualified to vote had approved 
a single resolution to convert 


from mutual status in March, 
savers were able to vote to 
make borrowers no longer 
members of the society: as 
members no longer, they 
became eligible for free 
shares. 

No disgruntled' borrower has 
yet suggested that changin g 
C&G’s rules to make borrowers 
no longer members, might 

cnahlo them to qualify for tfaC 

cash handout from which the 
law currently bars t hem . 

But even if the idea were 
moote d , it is by no means cer- 
tain that the Building Societies 
Commission, the sector’s statu- 
tory regulator, would approve. 

The reasons for Irish Perma- 
nent's decision to am vert are 
also different from what they 
might be for a UK society. 
Alongside the 8Gm-plus free 
shares to about 227,000 mem- 
bers, the flotation aims to raise 
up to 2£5Qm (£49-2Sm) in new 
capital through the issue of 
more than 30m shares. 

M r Roy Douglas, chief 
executive, has made 
it clear that it was 
not regulatory constraints that 
inclined the society to become 
a public wmipany - in Ireland 
unlike the OK the central bank 


regulates both banks and 
building societies - but the 
desire to be able to raise 
equity capital, in order to com- 
pete more effectively with 

franks. 

He has emphasised that Irish 
Permanent will not actively be 
acquisitions after con- 
version, however. Instead it 
will be looking for a period of 
consolidation. 

Alongside the plans Cor flota- 
tion, it has recently bought 
Prudential Lite of Ireland from 
Prudential Corporation - the 
UK’s largest life insurer - for 
just over l£30m cash, and 
acquired Guinness A Mahon, 
where the main activity is pri- 
vate hflnldng , for l£6.7m. 

Irish Permanent has a strong 
position in the Irish mortgage 
market, but the picture is not 
entirely cloudless. 

For example, its coet/income 
ratio, though declining; is still 
the highest in the industry In 
Ireland at Just over 60 per cent 

And though it benefits from 
tiie feet that it is quite bard to * 
win access to the Irish mot- ■ 
gage market, there are signs 
that growth in this area is 
expected to be steady, rafiur 
than spectacular in the next 
few years. 


CrestaCare healthy at £2.5m 


ni nil 11—1 lfif nlf#^ 

oy Kicnara wouTS 

CTOstaCare, the UK’s third largest nursing home 
operator, turned round losses of £L39m to report 
pre-tax profits of £2.48m for the six months to 
June 30. 

The gro^p has been refocused cm the owe 
healthcare business by a new management team 
ova 1 the past 18 months. It reported a modest 
rise in total turnover from £l52m to £15.7m; 
turnover from p roperty and other activities fell 
from £4.7m to £227,000. 

Turnover in the long term healthcare 
operations rose SO per cent from £10.4m to 
nitBm and o perati ng profits from flan activi- 
ties increased from filSlm to £3-43m. 

At the operating level a 0.57,000 loss was 
tornad into a £3. 43m profit in the latest period, 
partly reflecting the absence of property losses 
and exceptional costs. Finance costs fell to 
£961,000 from £L23m. 

CrestaCare’s flk5m acquisition of the Scot- 
tish nursing home group ScotCare in July 
helped to increase the number of beds in opera- 
tion by 32 per cent to mare than 2JJ00. A farther 


90 bed fedhty is under development in Scotland, 
to be completed by the end of this year. 

Mr Andrew Taee, chief executive, said the 
Scottish acquisition was the beginning of a slow 
growth outside the company’s traditional bases 
in the North erf England, Northern Ireland and 
the 7«fln of Man. 

"Our future growth will be focused upon 
strengthening our business within our existing 
regions, now including Scotland, and the grad- 
ual expansion into new geographic regions, par- 
ticularly the South of England," ha 

He added that the company’s future strategy 
would concentrate on specialist care, such as 
brain injury and stroke injury, which wwnmand 
higher weekly fees. 

Weekly fee rates rose to an average of £297, 
compared to £295 last year. Average bed oocu- 
pancy for the first half of the year was 933 per 
cent 

There were earnings per share of Lip, after 
losses at 2p last year. The interim dividend was 
lifted from (L25p to 0-2Sp_ 

Gearing stood at 22 per cent, including asi om 
af fixed rate debt paying 9.46 per cent 


NEWS DIGEST 


£L34m. Turnover advanced 
from £18fon to £19.6m. 

Earnings per share came out 
at A36p (359p). 

Owen & Robinson 

Owen & Robinson, toe jewel- 
lery and sports footwear 
retailer, reduced, pre-tax losses 
from £L67m to £L49m in the 
half year to July 3L an slightly 
lower turnover of £8.09m, 
against <w.eim. 

Losses per share were cut 
from 13£4p to 6-06p. 

Conrad Ritblat 

Conrad Ritblat Sinclair Gold- 
smith, the estate agents fanned 
by the merger at Conrad Kt- 
blat and Sfcyj air Goldsmith in 
May 1993, announced a pretax 
profit of £L2m for the year to 
May 31 against a loss of 
£184,000. 

Turnover was £11. 6m 

(£Z7m). 

Earnings per share came out 
at L22p, against losses of L23p, 
while a 0J5p (nil) dividend is 
recommended. 

Frank Usher ahead 

Frank Usher, the USM-quoted 

designer and makor of dTOSSeS 

and special occasion wear, 
raised pretax profits by 14 per 
cent from 21.22m to £L38m tn 
the year ended May 3L Turn- 
over grew 12 per cent to 
£19.7m, of which exports 
accounted for £9.44m or 48 per 
cent 

Earnings per share climbed 
to L3.1p (llip) while a recom- 
mended final dividend of 4Sp 
(&5p) makes a total of 7p (6p). 

EBC falls to £0.36m 

A fall in pretax profits from 
£562,000 to £356,000 was 
announced by EBC Group, the 
construction and development 
concern, for the half year to 
June 30. 

Turnover was little changed 
at £Z8t2m (f 28.4m) but operat- 
ing profits dropped to £294400 
(£452,000). Earnings per share 
slipped to L8p <3.G3p) but the 
interim dividend is being held 
at L75p. 

Parkdean Leisure 

hi its first interim statement as 
a public company, Parkdean 
Leisure, which operates holi- 
day parks in Scotland and East 
Anglia, announced a reduced 
pretax loss and is paying a 
L9p interim dividend. 

The loss for the six months 
to June 1 - normally a loss- 
making period as It reflects 
winter trading - was £537,000 
(£812,000), helped by a redne- 






£86,000 (£373400) as a result of 
the placing in October 1993. 

Turnover was ahead at 
£2.73m (£2. 52m). Losses per 
share were 3.6p (18.7p). 

Bloomsbury loss cut 

Bloomsbury Publishing, the 
book publishing company 
floated in June, cut its sea- 
sonal pre-tax losses from 
£563,000 to £478,000 for tbe first 
half of 1994. 

The company typically 
trades at a loss in the first half 
because of its orientation 
towards the Christmas book 
market. Turnover for the 
period grew 30 per cent to 
£303m and losses per share 
were lp lower at 6J)2p. 

Cassius tops £lm 

Cussins Property Group, the 
residential property developer, 
reported a 68 per emit advance 
in pretax profits from £667,000 
to £1.12m for the six month* to 
June 30. 

Turnover grew to £11. 8m 
(£9A6m). Earnings came out at 
&3p (A2p) per share and the 
interim dividend is raised to 
L4p (IP)- 

Lopex at £207,000 

Lopex, the advertising and 
marketing services company, 
improved pretax profits from 
044.000 to £207.000 in the first 
half of 3994. 

Turnover amounted to 

£73Jm (£74 m). After M ghar tar 
and minorities losses per share 
were 0,37p (0.38p). 

About £i.7m will be charged 
to goodwill in the lull-year 
accounts following sales 
closures. 

Eyecare Products 

Eyecare Products, the con- 
sumer goods maker formerly 
known as Kitty Little, reported 
reduced pre-tax profits of 
£6,000 in the first half of 1994, 
against £54400. 

The figures do not include 
any contribution from L’Amy, 
the French sunglasses and 
spectacles concern, acquired 
for FFr75.2m (£8Am) last 
month. L’Amy mark- a pre-tax 
profit of £U52m (£65,000) in the 
period, although these figures 
have not been, adjusted for UK 
accounting standards. 

The company intends to 
focus resources on its core 
eyewear business and have 
therefore decided to divest its 
fragrance and beauty bags 
operations, which mad* a net 
loss Of £154,000 (£77,000 profit) 
tn the period. 

Group turnover grew from 
£2.4Sm to £2_79m. Earnings per 
share were 0.03p (0-5Sp) and an 


unchanged interim dividend of 
05p has been declared. 

Mayborn Improves 

Mayborn Group, tbe 
USM-quoted fabric dyes, baby 
products and florists’ sundries 
group, lifted pre-tax profits 
from £L9m to £&06m in the six 
months to June 3d 
Turnover advanced to £l&9m 
(£17 ^m). The Interim dividend 
of 2p (1.8p) is payable from 
earnings of 7p (6_4p) par share. 

JO Walker in loss 

Losses of £20,000 pre-tax were 
a n nou n c ed by JO Walker & Co. 
the Importer of timber, wall- 
boards and plywood, for the 
half year to June 30. There 
were profits of £162.000 last 
ti me . 

Turnover improved to £7 An 
(£7.i7m) and operating profits 
jumped to £102,000 (£15,000). 
Losses per share were 2.5p 
(20.2p earnings). 

Mid-States ahead 

Second quarter pretax profits 
at Mid-States, the US automo- 
tive parts distributor with a 
USM quote, increased by 16A 
per emit from £L7in to £2m. 

Turnover for the three 
months to June 30 grew to 
£20.7m (£i6.3m); earning s fell 
to 2£p (3.ip) per share. 

The pre-tax outcome for tbe 
half year showed a 25 per cent 
advance to £3.27m (£2Xlm). 
Turnover for the period 
totalled £86JBm (£30 fen). Earn- 
ings emerged at 4.8p (4.5p). 
There is no interim divide nd 
this time against O.TSp in 1993. 

Second Alliance 

The Second Alliance Trust had 
a net asset value of £17.40 per 
share at July 31 against £16.40 
a year earlier. At the January 
3i half year end the value was 
£1&95. 

Net revenue for the year rose 
to £8.l8m (£7.66m). Earnings 
Per share amounted to 42.49p 
(38.74p) snd the dividend is 
raised to 42p C39p) via a 
recommended final of 29p 
{28 -5p). 

Merchants Trust 

Net asset value at the Mer- 
chants Trust improved from 
2565p to 259.4p over the 12 
months to July 31, however it 
was lower than the at 
the January 81 year end. 

Net revenue for the six 
months to the end of July was 
i&47m (£8 .34m) for eernfag a 
per shared 6J2p (6^,). A sec- 
ond interim dividend of 2JB5p is 
wfogpaid to make 5.7p <5Jp) 



„ ★ 


25 


, css skv 

,lla nent 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 






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COMPANY NEWS: UK 


Acquisitions bolster 
Trinity International 


By Raymond Snoddy 

First profits from recent 
acquisitions and gradually ris- 
ing advertising revenues 
helped Trinity International, 
the newspaper p ublishing 
group, to a pre-tax outcome of 
£10-9m for the six months to 
June 25. 

This represented an 
at 15.9 per cent an the £9.44m 
reported for the 1993 first half, 
although -t he c ompany con- 
ceded that. UK margins fell 
slightly as a result of the 
acquisitions in November of 
Huddersfield Newspapers a-nd 
the Argus weekly titles in the 
Boutkeast of England. 

Turnover grew by 24 per cent 
from £64.7m to fOUm, bol- 
stered by a £14-Sm contaUmticai 
from the acquisitions. Earn- 
ings per share were up 1&5 per 
cent to lO^p (Si2p). 

Mr Philip Graf, Trinity’s 


phi of executive; said there M 
been a strong pg rfumw nnp by 
the company’s UK and Cana- 
dian businesses, bat the US 
results had been adversely 
affected by the worst weather 
in the north-east for four years. 

The vast majority of Trini- 
ty's titles in the UK had been 
unaffected by the national 

newspaper price wax, he said. 
The Dally Post In Liverpool 
had, however, Ioetabout 5 per 
cent of its circulation, taking 
sales back to75JMOfor the Jan- 
uary to June period - lends 
last reachedtn 1996/ 

There were Nearly signs, 
however, that the 5 per oeazt 
loss was a one-off, and that 
circulation, on! tim -laverpodL 
daily was beginning to rise 

a gain . . 

“Although we anticipate a 
continuation of the natyip ai 
newspapers' cover price war 
throughout the second half of 


the year, we believe the overall 
effect win be small, ” Jtfr Graf 
said. 

Trinity has set an interim 
dividend of 3J3p, an increase of 
10 per emit, and said yesterday 
gearing had dropped from 50 
per rtmt at the of Decem- 
ber to 443 pea: emit 

Mr Graf said that advertising 
volumes were growing, but 
there ware dear differences by 
c a t e gory and by area erf the 
company, although job adver- 
tisements wore strong. 

"The second half of the year 
has begun satisfactorily. Our 
full-year performance should 
reflect foifher good progress in 
many areas,* Mr- Graf 

Mr Derek Terrington, media 
analyst at stockbrokers Ktetn- 
wort Benson, said yesterday he 
-expected frill year pre-tax prof- 
ttsaf £2&5m. 

The Trinity share price rose 
lp to 415p. 




Restructured Perkins 
Foods static at £10.1i 




•* 


Mi 


•I*V“ 


By David BteckvwH 

Perkins Foods, which has been restinettaing its 
business, reported static pre-tax- profits: of 
filOlm for the six months ito Jtrae-39, wfiQe 
turnover edged ahead from £L99m to £20lm- - 
However, sales from continuing businesses 
were 9 per cent higher at £L9fen (£L77m), yield- 
ing operating profits up 3 per cent at £HAn 

(£lL4m). 

Mr Howard PhflKps. chief ex e c u tive, said the 
results had benefited from a strong performance 
by tbe fresh produce division, and by increasing 
volumes. The group makes 80 per cent of its 
sales in Europe. •••»•■■ 

- During the half the group dosed it&loss- 
makmg UK frozen vegetables business and remv 
ganised its canned mushrooms anm hi July it 
completed the restructuring into three divisions 
with the disposal of the UK catering' meats 
business.. 

' The fresh produce side, which supplies Dutch 
supermarkets with off-season imported fruit and 


vegetables, saw voaume g rowt h of 12 per cent. 
Operating profits rose from MJDTn to fiam. and 
* turnover increased from 279.9m to ^ 

. The frozen foods division, which now 
- 'accounts for haw of group business, Kited iwi* 1 * 
from £76i5m to £8Ltoi, yielding operating profits 
of £7. 14m (27.11m). Operating Tnargimt were 
under pressure, dicing from 9^ per cent to &8 
per cent - still good margins for tbe sector, Mr 
EhfDxps'said. 

Operating profits in the dnBed foods division 
fa& from 22.29m to £2J08m as margins declined 
from U to '&9 per coxt However, sales were 
ahead at £22An (2208m). The foil reflected a 10 
per emit rise in turkey prices, which had proved 
difficult to recover, raid Mr Phillips. But there 
was strong demand for chflle d foods in wmijmii, 
which accounts for 65 per emit of the divislfln’s 
sales. 

-Net interest payable was slightly lower at 
£L32m (£L33m). Earnings per share eased from 
4p to sip, or from 4 Jp to 42p fully dfrated. The 
intB ri -»n dividend is Bit L75p. 


BBC surges to 
£4.94m in - 
first half , 

InternathoHal -Business^ 
n unu nmtlMttVwm , the. 


Increased customer 


v “ j- 



. ..'u / " i .. > * :^ 7* ■ 

By-SblKM Series* •' 


vices group, ann 
interim pre-tax profits 
ahead at £4.94m against 
£L37in. 

Most of the improvement 
came from 'conference 
operations, but the pretax tig- 
nre far the sbrmontbs to June 
30 was also helped by a redac- 
tion in interest charges to 
£485^000 (£L09m) followfng a 
capital reconstruction last 
Jtoie; tiie comparable period: 
also carried a uou-cootimring 
debenture interest charge of 
ELiem. - 

Tfuniover rose frmn 229.1m 
to 238.4m. 

“The performance has 
undoubtedly been enhanced by 
better trading conditions,” 
said Lord Rees-Mogg, chair- 
man. “Additionally, the 
release from the shackles 
imposed by tbe previous debt 
s tr u cture has allowed more 
freedom to progress* 

Bantings per share- were 
to.ip (7:lp). There is an 
interim dividend, of lAp (nil). 



^HtceSk' the 
s ' largest garden ' ^ntre 
compjmy, saw a. foil xn the 
hUBfoa: of cujstamera to its 41 
gsrdatcentres -during ^the first 
ts£tfof^994, but increased cus- 
tomer spending helped boost 


Its rose, 82 per 
cent from 23.71m to £8L?sin, but 
the figure was diistortedliy the 
StSm profit from the sale of 

TTnmalnTri fl Rafaril Park .■' 

■ There was a £340,000 excep- 
tional, charge, for payments to 
the charnnap and a tfirector, 
who retired during the first 
halt 1 ;-. “ • - - 

- Wyevale has maintained 
pressure on fts-suppEras, and 
ff imnroved its n wratin p nrafit 
margins from 17B pet cant to 
-l&Apercent. tu^rfte'ofa com- 
petitive retail pricing environ- 

ment 

' (derating profit before inter- 
est add except i onal itenra rose 
by 5 per cent to -24^4m 
(£4-12m), on a 3 per cent 
increase in turnover to 222.7m 
(E22m). 


-Thn -average spesiTper cus- 
tomer increased by more than 
4. jeff ? cent $8 ii0j50,*ahd while 
customer numbers foil about l 
per cent during the period, the 
company said there were 
already signs of recovery. 

Following the November 
rights issue, Wyevale will have 
net cash of about £5JSm, in 
spite of 22.92m invested in the 
purchases of centres in York, 
Bristol and Midfllwaur, and the 
cost of redeveloping its centre 
atMarple, Greater Manchester. 

The Bristol and Middlesex 
centres will make a maiden, 
contribution in the second half 
at the year. • , • 

Mr John Rodgaid, chairman, 
said: “our strategy offaroadea- 
fog our retailing base will pro- 
vide a framework for sustained 
future growth so despite the 
continued economic uncer- 
tainty, we remain confident of 
onr future prospects." 

The company is paying an 
interim dividend of 2.93p 
. (2-75p). Earnings per share, 
adjusted for exceptional items, 
foD, from 8p to 7-Sp, due to the 
rights issue. 


Enlarged 
Claremont 
18% ahead 
at £5.22m 


By Pater Poarsa 
ClaremontGarments 

(Hoktings), the clothing 
manufacturer which took over 
MagwTtwn Indu st ries to A pril, 
lifted jutstax profits by 18 per 
cent from *4^42m in the 26 
weeks to Jraie 26 1903 to 
£5A2m in toe 27 weeks to July 
2 this year. 

The £4&3m aD-paper 
takeover b roug h t together two 
of Marts 'and Spencer's 
leading suppHera and added 
Haggle and s wimw ear to 
Claremont's other 

womenswear activities. 

. More than 90 per cent of 
Claremont’s production is 
derived from the UK, and the 
group supplies about 11 per 
cent of MAS’ clothing stock. 

Group turnover grew 34 per 
cent to £6Z8m (£47.lm), 
biclndtng from Magellan, 
and BeHrlse Fashions, the' 
Next supplier bought for 
£1 ton cash. 

Operating profits rose to 
£5Jnm (24.6m), including a 
£577,000 (ufl) arntribution 
from tbe acqtxbdtions. 

Mr Peter Wfagand, 
chairman, stressed there was 
no sfippege to margins in the 
“aid” Cl a remont, and there 
would be margin improvement 
in the second half. 

Mr David McGarvey, 
managing director, said that 
dne to problems of production 
planning at Magellan, there 
had previously been 25 per 
cent of capacity lost 
But now Claremont 

mtMfl iHiiwit and t y ri mne had 
been introduced - prior to the 
a u t u mn gaffing season — 
production slippage -was down 
to 10 per cert and like-ftoJike 
turnover had rismi 25 per cent 
In 1993, Magellan incurred 
pretax losses Of £L26m 
(£511,000) on turnover fiat at 
2369m. 

Mr Wlegund reckoned there 
would be overhead savings of 
about 2800JXX) in the second 
half from the integration of 
Magellan, “with more to 
crane”. •> 

Earnings rose to 7.8p (7Jft>) 
basic and to 7.5p (7.1p) fully 
dflnted. The interim dividend 
is lifted to (3to>)- -■ 

The shares dosed down lOp 
at305p. 


Chubb Security 
sells French 
lossmaker 

Chubb Security, the dectrauic 
alarm and locks group, has 
sold its lossmaking French * 
alarm business, Chubb 
Securite, to its French rival, 
Ecco Securite, for 
(£3ton), writes Richard WoKEe. 

The sale is part of a 
longterm strategy to shed 
unpro fita ble companies and 


target markets to east Asia 
and Australia. 

Chubb Securite, which had 
an annual turnover of about 
FrF60m last year, is 
understood to have incurred to 
the region off FrF3m fair toe 
yearto end-March. 

Chubb is halfway through a 
four-year plan to raise its 
share of the £7bn world 
security market from 9.5 to 
U-5 per cent 


London and M- Chester raises pay-out 


By ABaon Snritfi 

London and Manchester Group, the life 
assurance and financial services ffroup, 
yesterday increased its interim dividend 
by 9.4 per cent from 5-12p to 5.6p for the 
first haK of 1994- 

A sharp foil in in new managed fund 
investments left premium income down 
from £220fim to £17LQin-- In other respects, 
premium income was generally flat' 

Mr Mtotiri 'Jackson, group finance direc- 
tor, said that the dividend level was not 
directly related to premium income on a 
year-by-year basis. 

He said that new business was at least 
•in-line with industry trends, and on a 


longer-term basis the group was able to 
show that it could afford the transfer to 
the shareholders. out of the life fund- 

L&M Ts the only insurer which the 
Department of Trade and todustry allows 
to d istri bute -part of the long-term invest- 
ment return on the s har eholders* interest 
in the fife fund. 

New managed fund business fell to 
£35ton (£84. 7m) after the company’s 
investment performance bad slipped from 
thehigh levels achieved in 1992 and 2998. 

There was a slight fell to £AGm(£3.7m) 
in annual' premiums collected through the 
industrial branch business, where premi- 
ums are collected we^ly from customers’ 
homes, but this was less than the sharper 


fan to this area experienced by the fife 
insurance industry as a whole. 

L&M said there were signs that the vol- 
ume of. business could be built up from 
these levels. 

■Within the consumer finance arm, levels 
of new unsecured lending were signifi- 
cantly abend of the first half of 1993 and 
hire purchase towHrig- had been buoyant 

The estate agency, inchiding four firms 
and 85 increased its number of 

house sales by 3 per cent and was the most 
productive appointed representative of tbe 
company. 

Mortgage arrears showed continuing 
i mp ro v ement, with a significant reduction 
in the proportion of serious arrears. 


- & Kingfisher offshoots turn 
in mixed performance 


By NeB Buckley 

The increase to interim pre-tax 
profits from 282m to 288.1m at 
Kingfisher masked a mixed 


group's chains. 

The biggest surprise was 
Woolworths’ foR from a£2JLm 
profit to a £6 ton lo ss, alter 
fffiffaring from the downturn 
In computer games sales, 
which left it with excess stock 
which had to he heavily 
marked down to clear. Than 
was also a new £3JSm depred- 
ation char ge on checkout scan- 
ning equipment, and £1.7m 
redundancy costs following 
restructuring. 

Comet also feO from a 20.7m 
profit into a £L7to loss, hit by 
higher expansion costs, and 
Increased rents on out-of-town 


sites. New .opening costs In 
Kingfisher’s smaller nbatim. 
Including Music and Video 
Club, and the office su pe r s t o re 
chain Staples, resulted to a 
£2ton loss (£Otoa profit). 

Other chains performed bet-, 
ter. Darty, the French electri- 
cal retailer which .made a foil 
first-half c o n t ri buti on for the 
first time, made operating 
profits of 235.7m, and held 
margins ^ mid increased sales to 
a shrinking French m ark et. 

The BJfeQ DIT chain lifted 
operating profits to £44.3m 
(£4 1.8m), . although sales 
growth was slower than last 
year, Superdrug, the chemists 
chain, also lifted operating 
pro fi ts from £12Bm to £t4m. 
ChartweQ Land, the property 
ffivishm, increased Investment 
income from 219.5m to £23Jm. 


FT-SE Actuaries 
classification changes 


The FT-SE Actuaries Industry 
Classification has agreed the 
following changes to constitu- 
ent companies' classifica t i o ns, 
effective from October 3: AAF 
Industries to Building ft Con- 
struction (FT- A. group. 210} 
from Vehicle Components & 
Assemblies (270); Asian Group 
to Computer Services (487) 
from Di s t ributo rs .of tottasMal 
Components ft Equipment 

(412); Bnmtcfiffe Aggregates to 
BuiMmg Materials (222) from 
Other Mineral Extractors & 
Mines (125); Carlisle Group to 
Property Agencies (794) from 
Financial, Other (772); DCC to 
Diversified industrials ' (240) 
from Distributors, Other (4U); 
Bunion Group to Property 
(792) from Building ft Con- 
struction (210); Inspirations to 


Leisure (422) from Transport 
(480); Manders to Chemicals, 
Speciality (234) from Chemi- 
cals, Commodity (232); Porter 
Chadbtxm to Paper ft Packag- 
ing (282) from Diversified 
Industrials (240); Protean to 
-Instruments, Tools ft Mechani- 
cal Handling Equipment (289) 
from Engineering, Contractors 
.<264 y, Bobert Wiseman Dairies 
40 Food Manufacturers (330) 
from Retailers ft Wholesalers, 
Food (440); Sherwood Com- 
puter Services to Computer 
Services (487) from Business 
Support Services (481); Simon 
Engineering to Engineering, 
Diversified (265) from Distribu- 
tors, Other (414); VflUers 
Group to Engineering, Diversi- 
fied (265) from (hi Exploration 

ft Production (162). 


Building a platform for growth 

James Buxton on the driving force behind the rise of Stagecoach 


S tagecoach, tbe biggest 
company to emerge from 
tbe privatisation of the 
UK bus industry, moved up a 
gear last week. R acquired two 
of the 10 companies which run 
London’s red buses, boosting 
its turnover by a fifth. 

With the £25jam purchase of 
East London Bus and Coach, 
and South East London and 
Kent (SeQceni), it now controls 
1L5 per cent at the - UK bus 
market and has a springboard 
to bid fts- more London routes. 

However its ambitions do not 
stop there. It expects tbe next 
12 months to produce opportu- 
nities for expansion fast may 
never be repeated. As the 
reshaping of the bos industry 
continues, more investors in 
bus company management 
buy-outs and employee share 
ownership plans are likely to 
seek a way out 
TO cope with expansion Mr 
Brian Souter, who founded 
Stagecoach in 1980 with his sis- 
ter Mrs Ann (Hoag; now con- 
centrates on acquisitions, as 
does Mr Derek Scott, the 
director. 

Last Friday Mr Souter told 
shareholders at Stagecoach’s 
AGM in Perth that it was tar- 
geting “a mix of companies, 
some of which are underper- 
forming and la y? . wparw i m to 
purchase, but with great poten- 
tial for profit improvement" 
Stagecoach, which came to 
the market last year, is tbe 
product of the Tory govern- 
ment’s bus policies: It 
exploited the deregulation of 
routes, and then the break up 
and privatisation of the 
National Bus Group and the 
Scottish Bus Group. K also has 
companies in Kenya, Malawi 
and New Zealand. 

It now owns 20 provincial 
bus unite throughout the coun- 
try. Turnover last year was 
21 aim, inffliifttnp aw piidtffant 
and pre-tax profits rose 46 per 
cent to £l&9m. 

It has successfully combined 
buying and absorbing a stream 
of companies with running a 
far-flung empire. According to 
Mr Peter Huntley, a transport 
consultant with the TAS Part- 
nership, it has "developed a 
strategy for running bus com- 
panies that is head and shoul- 
ders shave those Of the other 

private groups” 

'This is because Stagecoach 
was ■ never a traditional bus 
company and “never inherited- - 



Tiww NumpMM 

Brian Souter seeks companies with profit improvement potential 


any cultural baggage” from the 
state sector, he says. **You only 
have to compare its head office 
[employing SO people in a small 
house in Perth! with the mar- 
ble halls erf 'same of the other 
companies." 

When Stagecoach makes an 
acquisition, it has bought 
seven bus companies in the 17 
months since its flotation, the 
new subsidiary Is put under 
the control of one of three 
main board executive direc- 
tors, including Mr Souter. They 
carry out a standard reorgani- 
sation procedure which focuses 
on four areas. 

Overheads: “Most of the com- 
panies we take over have extra 
tiers of management left over 
from when they were publicly 
owned," says Mr Souter. Stage- 
coach cute them down to four 
levels above the bus driver or 
fitter, the main board, the 
board of tbe subsidiary (one for 
each region), the four-person 
team running the business, 
and the depot manager. 

The new management make 
up the acronym TEAM: a traf- 
fic manager, an engineering 
director, an accountant and 
the ww»n«g fa g director. 

The acquired company is 
likely to be streamlined. At 
Western Travel, the £33m turn- 
over group bought last year 
wbich operates in Gloucester- 
shire, Warwickshire and South 


Wales, 12 separate companies 
were merged into three. 
Purchasing: Stagecoach 

achieves immediate cost 
savings of L5 per cent because 
of its superior purchasing 
power on spare parte, tyres 
and engine components. 

The fleet may be renewed. 
Stagecoach has bought 650 new 
buses since 1992 and ordered 
another 680. New buses, built 
by Walter Alexander in Falkirk 
using pfrafiris tom Volvo and 
Trinity, yield big savings being 
more reliable and requiring 
fewer spare parte. 

The average age of a Stage- 
coach flett is 7.6 years com- 
pared with the industry aver- 
age of 1L 

Productivity: If labour rela- 
tions are unsatisfactory the 
company seeks a consolidated 
agreement with the unions. 
What Mr Souter calls “Spanish 
customs” are eliminated or 
bought out 

Improving the networks: “It 
can take two years to put a 
network right if the previous 
management has messed it 
up,” says Mr Souter. “That can 
happen if they continually 
responded to what the competi- 
tion was doing and eroded the 
loyalty of existing passengers.” 

Once the network has been 
sorted out, new services can be 
developed. Fife Scottish intro- 
duced a hub and spoke system 


on its links between Fife and 
Edinburgh, Glasgow and Dun- 
dee, and has achieved 40 per 
cent revenue growth. 

“Stagecoach is achieving 
genuine organic growth, which 
is rare among the new compa- 
nies in what is, overall, a 
declining Industry,” says Mr 
Huntley. 

Mr Souter says there was 
organic growth in nine subsid- 
iaries last year. Stagecoach is 
now lifting its target operating 
margin for its original subsid- 
iaries from 15 to 18 per cent 

The company wants existing 
managers to implement 
changes so that they “own” 
them. Though some senior 
executives in a subsidiary may 
leave on takeover, Stagecoach 
has consistently unlocked the 
potential of people in lesser 
positions after it moves in. 
Once the new subsidiaries 
have been restructured they 
are treated as autonomous pro- 
vided they conform to standar- 
dised budgetary controls. 

Its opportunities for expan- 
sion in the UK will tail off 
when the bus industry settles 
down, though it alms to 
achieve UK turnover of 2500m. 
With the London purchases tt 
will exceed £360m cm an ann- 
ualised basis. 

A nd the Office of Fair 
Trading Is unlikely to 
tolerate Stagecoach 
having more than a quarter of 
the UK bus market But that 
would still allow it to double 
its present UK turnover. Mr 
Souter talks of Stagecoach hav- 
ing a global turnover of £lbn 
by 2000. 

Stagecoach’s sub sidiarie s are 
already the frequent subject of 
OFT Investigations, mainly 
over alleged unfair competition 
on routes. But Mr Souter says 
the investigations generally 
concern very small parts of the 
group’s business, and receive 
disproportionate publicity 
because the OFT announces 
them to the Stock Exchange. 

When UK growth slows 
Stagecoach will turn more 
attention to expansion over- 
seas. The overseas subsid- 
iaries, managed by Mrs Gloag, 
only make a small contribution 
to profits but Mr Souter points 
out that they were mostly 
acquired very cheaply and sees 
immense opportunities for 
expansion as privatisation 
spreads. 




26 


FINANCIAL TIMES 


WEDNESDAY SEPTEMBER 14 1994 


COMMODITIES AND AGRICULTURE 


Lac loses fight for 
zinc-lead venture 


By Kenneth Gooding, 

Mining Correspondent 

A court battle between three 
big mining companies for con- 
trol of the Lisheen project in 
County Tipperary, Ireland, the 
second-largest zinc-lead deposit 
in Europe, ended yesterday 
with defeat for the Canadian 
group Lac Minerals. 

This leaves the way clear for 
Ivemia West, a “junior” Irish 
exploration company, to take 
control of the project Ivernia's 
two biggest shareholders, each 
with 24.5 per cent, are Mlnorco, 
the offshore arm of the Anglo 
American-De Beers group of 
South Africa, and Outokumpu, 
the state-owned Finnish group. 

Mr David Hough, Ivernia's 
managing director, said last 
night that he hoped his com- 
pany could now turn away 
from the courts and concen- 
trate on getting a mine into 
operation. It might be possible 


un warehouse stocks 

(As or Monday's cterae) 
own 


Alumtafum 

-11400 

to 2.401.550 

Aluminum oOoy 

*40 

10 25,760 

Coppw 

+675 

10 370.075 

Lead 


10 383,175 

Nfchd 

+750 

ID 141.010 

Zinc 

-50 

to 1230.000 

Tkn 

-35 

to 91480 


to start production towards the 
end of 1997, eventually achiev- 
ing an annual output of about 

200.000 tonnes of zinc and 

30.000 tonnes of lead in concen- 
trate. 

The dispute arose because 
Chevron, tike many other 
international oil companies, is 
divesting itself of its mining 
Interests and wants to dispose 
of its stake in the Lis been ven- 
ture. It agreed in September 
1992 to sell to Lac, one of Cana- 
da's biggest gold producers, 
which also had ambitions to 
become established in base 
metals mining . But Ivernia 


West which owns the minority 
interest In Lisheen, claimed to 
have pre-emptive rights over 
Chevron’s 5&5 per cent 

This claim was tested in the 
Irish High Court and Lac said 
yesterday that the court had 
ruled against it and said that 
Ivemia West did have pre-emp- 
tive rights. 

Lac said it would study the 
High Court judgment before 
deciding on any further action. 
An appeal is possibile, but Lac 
was recently taken over hy 
American Barrick Resources, 
North America's biggest gold 
producer, and analysts said 
Barrick was unlikely to be 
interested in pursuing a zinc- 
lead venture. 

Minorco some time ago 
agreed to provide Ivemia with 
$72m (£46.4m) to buy Chevron’s 
share of Lisheen and for Iver- 
nia to sell 50 per cent of the ore 
body to Minorco in return Tor 
cancellation of the loan. 


Car industry issues 
aluminium warning 


The use of aluminium in 
European car manufacturing 
should only grow slightly in 
coining years because of price 
volatility and competition from 
steel, said Mr Patrice Natier, 
general manager of Sogedac. 
the purchasing arm of the 
Peugeot Citroen group, Renter 
reports from Paris. 

“Aluminium's share of the 
European car market is likely 
to remain relatively close to 
current levels, at least for the 
next four or five years." Mr 
Natier told a Metal Bulletin 
conference. 

Mr Natier cited “erratic fluc- 
tuations in aluminium prices” 
as one of the main obstacles to 
an increased use of al uminium 
in the European car industry. 
“Everyone in the car industry 
Is looking for more stable alu- 
minium prices to be able to 


make the right long-term deci- 
sions," he said. 

“If aluminium prices return 
to $1,800-2,000 per tonne, this is 
likely to put a strong hold on 
aluminium use in the car 
industry," he added. 

He called for co-operation 
between the car industry and 
aluminium producers for “fix- 
ing purchasing contracts 
unconnected to -short-term 
developments in market 
prices". 

Mr Natier predicted that 
over the next 10 years, alumin- 
ium's share of total vehicle 
weight would increase from 6 
per cent to around 10 per cent, 
or from 60kg to 100-110kg. 

Only government regulations 
limiting fuel consumption 
could boost the use of alumin- 
ium in the European car indus- 
try, he said. 


MARKET REPORT 

Metals fall 
back after 
early surge 

Copper and aluminium looked 
set to sail through technical 
resistance levels and on to 
their next price targets in early 
trading on the London Metal 
Exchange yesterday, but they 
failed to follow through this 
early show of strength. Copper 
broke above resistance near 
$2,520 a tonne and then burst 
up to $2,533 - a move which 
traders thought would carry it 
up to this year’s high of $2,557. 
But caution set in and the last 
kerb (after hours) business was 
at $2312. the day's low and $4 
down from Monday. Alumin- 
ium, despite an 11,800-tonne 
foil In LME stocks, foiled to 
test $1,600 a tonne. Business 
was seen down to $1383 before 
last trading at $1386, down $6. 

Compiled from Reuters 


Healthy growth ahead for rice trade • 

The opening of Japanese and Korean markets has raised forecasts, says John Madeley : 


The growth in world rice trade 
Is likely to be “significantly 
higher" than expected as a 
result of the successful conclu- 
sion to the Uruguay Round 
world trade talks, the UN’s 
Food and Agriculture Organi- 
sation (FAO) predicts. 

Before the outcome of the 
Gatt Uruguay Round, the FAO 
predicted a growth in world 
rice trade of 3 per cent a year 
to 17.1m tonnes by 2000. 

But as a result of the talks, 
Japan will allow rice imports 
from next year, beginning with 
an import volume equivalent 
to 4 per cent of domestic con- 
sumption, rising to 8 per cent 
by 2000. South Korea will allow 
imports of 1 per cent of domes- 
tic consumption, rising to 4 per 
cent in 10 years. 

The FAO predicts “some sig- 


nificant structural changes” in 
the export market by 2000. 
especially in the Far East 
Thailan d, the world’s largest 
rice exporter, is expected to 
maintain its position, but Viet- 
nam is forecast to replace the 
United States as the world’s 
second-largest exporter by 
2000. Bangladesh, which Is now 
self-sufficient in rice, is expec- 
ted to be among the fop 10 rice 
exporting countries by 2000. 

China and India are expected 
to continue to be major rice 
exporters and importers, 
although India may emerge as 
the larger net exporter. 

The FAO also predicts con- 
siderable variations in prices 
over the next six years, with 
international prices “moder- 
ately higher” in real terms. 

At its 18th session in Rome 


last week, the International 
Rice Commission was told that 
lower GDP growth in the Mid- 
dle East would result in 
increased imports of medium 
quality at the expense of 
higher quality rice. Africa is 
likely to import more medium 
quality and contribute to 
alrm gfhpning de mand apd pos- 
sibly higher prices. 

In Europe and North Amer- 
ica the Increase in demand will 
be mainly for higher quality 
rice. Imports into the US and 
Canada of fragrant rice from 
Asia have escalated “and this 
trend Is expected to continue." 
Chan Ling Yap, FAO rice spe- 
cialist, told Hip c ommissi on. 

Rice imports into the US had 
grown to about 10 time s the 
level of the early 1980s. she 
said, but the US remained the 


world’s second largest rice 

exporter. 

Demand for lower quality 
rice may foil in the next lew- 
years, although in many 
exporting countries, more of 
this rice type is being used for 
feed, leaving less for the export 
market. 

World output of rice is pre- 
dicted to grow at 2 per cent a 
year to 409m tonnes by 2000, 
awfl demand for milled rice at 
about the same rate. About 90 
per cent would be for food and 
the remainder for feed, seed 
and industrial use. 

“New technologies of mill- 
ing, sorting and packaging will 
have to be put Into place" to 
meet the projected Increase in 
demand for higher quality rice, 
said Chan Ling yap. “The 
increased sophistication of the 


rice market opens up new 
investment opportunities. 1 * - 

But the FAO warns that 
although the growth in world 
rice supply and de m an d seems 
likely to be balanced in 2000, 
“the problem of hunger" will 
remain. Higher prices could 
lead to some countries, espe- 
cially in Africa, cutting bads 
on rice imports. This, together 
with cuts in food subsidies 
planned by some countries, 
"could worsen access to rice by 
the poor". 

However, higher world rice 
prices would re-emphasise “the 
importance of raising domestic 
production.” the FAO says, 
while international financial 
institutions that have previ- 
ously considered investment in 
rice uneconomic could find the 
commodity more attractive. ; 


Winter crops hit by 
Australian drought 


Jamaica acts to contam 
spread of livestock pest 


By Nikki Talt 
in Sydney 

A severe drought In Australia's 
eastern states has caused the 
country's Bureau of Agricul- 
ture and Resource Economics 
to cut its forecast for winter 
crop production to 16.6m 
tonnes, down from an esti- 
mated 28.2m tonnes in 1993-94. 

Wheat production alone is 
forecast to fall by 38 per cent to 
10.4m tonnes. The bulk of this 
production will come from 
Western Australia, “the third 
successive year that wheat pro- 
duction in WA will be around 
6m tonnes, which Is near-re- 
cord production," the bureau 
said. 

By contrast, the area sown to 
wheat in New South Wales is 
expected to be about half that 
planted in 1993-94. 

Total production in NSW is 
expected to be about 1m tonnes 
- less than 20 per cent of the 
1993-94 figure. 

Queensland, where the 
drought is into its fourth year, 
is forecast to produce only 


230,000 tonnes. In a “normal” 
year, Queensland’s wheat pro- 
duction is around L5m tonnes. 

The bureau acknowledged 
that the drought was likely to 
have “an Important impact on 
wheat exports”, but said that 
the drop in production would 
not be reflected in the foil in 
exports because of stocks car- 
ried over from 1993-94. 

Wheat is not the only crop 
seriously affected by drought 
In its latest quarterly crop fore- 
cast, the bureau predicts that 
barley production will halve 
from last year's record levels 
to 3.4m tonnes. 

Cotton production is also 
likely to be hit for the third 
year in a row. Plantings take 
place between September and 
December, but given meteorol- 
ogists’ forecasts, ABARE says 
it expects only 223300 hectares 
to be planted to cotton, 42,000 
hectares less than the area har- 
vested in 1993-94. 

The bureau says yields will 
probably be down too because 
of a shortage of irrigation 
water. 


By Canute James 
in Kingston 

Hundreds of thousands of 
infertile screw-worm - a type 
of fly which has been devastat- 
ing cattle and other livestock 
in the Caribbean - are to be 
released from aircraft over 
Jamaica. 

The project is being sup- 
ported by the UN Food and 
Agriculture Organisation 
(FAO) in an effort to contain 
the spread of the pest through 
the region. 

The flies being released are 
the sterile version of the New 
World screw-worm, which is 
attacking cattle in Jamaica 
and has also been detected in 
other parts of the Caribbean - 
mainly Cuba, Haiti, the Domin- 
ican Republic and Trinidad 
and Tobago. 

About % per cent of the 
Caribbean region has been 
found to be Infested with the 
screw-worm, according to file 
FAO. 

The project involves the con- 


tinuous release of Infertile 
insects which will mate but 
produce no offspring, leading 
to the progressive reduction 
and eventual total collapse of 
the screw-worm population, 
the FAO said. 

The Caribbean project, to be 
funded by regional govern- 
ments as. well as the FAO, is 
expected to cost about $20m 
(£l2.9m). The Caribbean 
islands are hoping for success 
similar to that achieved in 
Libya four years ago, when the 
introduction of sterile screw- 
warms eradicated the fly In 
two years before it could 
spread and devastate livestock 
throughout the continent. 

Sterile flies will be released 
over all but 10 per cent of 
Jamaica’s 11,424 sq km. The 
flies are produced in a labora- 
tory on the border between 
Mexico and the United States 
and have been tested in parts 
of the US, Puerto Rico. Cura- 
cao and the Virgin Islands. 

In I960, the cost of the screw- 
worm infestation in the United 


States was estimated at $lO(jm 
a year. Clearing Mexico and • 
the southern United States of 
the pest took more than 20 
years and cost nearly groom. 

Regional scientists say that 
one problem in dealing with 
the New Weald screw-worm Is 
the ease with which it can be 
spread by animals as well as 
by humans. A country can be 
infested by the presence of the 
fly in one animal or human, r 

Although quarantine regula- 
tions reduce the chances of 
infestation by animals crossing 
borders, no such arrangements 
have been mode for humans 
crossing from infested areas. 

There have been hundreds of 
documented cases of human 
infestation by screw-worm in 
South America, including some 
deaths. Caribbean govern- 
ments have been advised that 
a strengthening of quarantine 
regulations will be neceuaiy 
to prevent the spread of the 
fly, although scientists say it is 
also likely that the pest could 
be spread by wind. 



fisons 

suffers 

jfresh 



mtm - L 

• 


COMMODITIES PRICES 


BASE METALS 


LONDON METAL EXCHANGE 

(Prices from Amalgamated Metal Trading) 
ALUMINIUM, 99.7 PURITY (S per tome) 


Precious Metals continued 

■ POLO COM EX (100 Troy oa.; S/troy oz.) 


tat VoL 



Cash 

3 mttra 

Close 

1564-5 

1588-9 

Previous 

1568-9 

l591S-2i 

Mg Mow 


1597/1584 

AM Offldjl 

156645 

1 589-9 £ 

Kart dosa 


1586-7 

Open int. 

273,636 


Total daily turnover 

42.444 


■ ALUMINIUM ALLOY (S per tome) 


Close 

1548-55 

1570-80 

Previous 

1570-5 

1588-80 

HgMow 


1590/1580 

AM Official 

1SS5-6 

1584-6 

Kero dose 


1570-80 

Open tot 

2.956 


Total daly turnover 

771 


■ LEAD ($ per tonne) 



Ctose 

616-7 

628-7 

Previous 

611-2 

622.5-3 

rtgh/tow 

021 

631/823 

AM Official 

6205-1 

62B.S-9 

Kerb dose 


623-1 

Open bit. 

41.113 


Total daily turnover 

12.360 


■ NICKEL iS per tame) 


Ctoso 

6465-75 

6565-70 

Previous 

6480-5 

6575-80 

mgh/low 


6660/6530 

AM Official 

6450-3 

8550-1 

Kerb close 


6585-60 

Open ml. 

54.289 


Total fibrfy turnover 

33267 


■ TIN iS (M> tonne) 



CtoM 

8280-80 

8360-70 

Previous 

5316-35 

5390-400 

Kflhtov 


539Q/S380 

AM Official 

5388-93 

5365-6 

Kero dose 


5350-60 

Open inL 

16^86 


T’Mal daily turnover 

3,711 


■ ZINC, apodal Mgh grade IS per tonne) 

C3os+ 

962-3 

1005.5-6 

Previous 

972 5-3.5 

995-6 

rtgtVtow 

97S 

tooeroga 

AM Offical 

975-5J5 

9M-g 

Kero doao 


999-1000 

Open bit. 

95.733 


Total daily turnover 

20.821 


■ COPPER, grado A (S per torvxrt 


Ooaa 

3503-4 

2516-9 

Prtrmoitt 

2497.S-8-5 

2814-5 

High/low 

2515/3513 

2534/2512 

AM Offldd 

2514 5-5-5 

2528-9 

Kerb dose 


2511-2 

Open nit. 

318.194 


Total daily turnover 

55.760 


■ LME AM Official CIS rate; 1-5682 

LME Closing US rata 1.56:20 


snot 1.5625 3 siltis:l55B7 6nHft*:1^567 9mHc1 5517 

■ HCH GRADE COPPER |COME>) 


Day's 


Open 

Ossa change 

ffigli RM 

m m 

Sop 119.65 -1.45 

121.40 119.40 

5.072 968 

Oct 115.15 -1J0 

117.05 116.10 

1,480 319 

No* 115.65 -1.40 

11700 11500 

694 68 

Dee 11535 -1.50 

11555 11500 33,409 1837 

J M 114.90 -1.45 

116.50 11850 

547 20 

FeO 114.45 -t.to 

115.30 1 14,40 

426 79 


Oct 

Nov 

Dm 

Feb 

Apr 

TtaM 


391.5 
3910 

394.5 
397.8 
401.1 


■44 


PLATINUM NYMEX (50 Troy o *; S/troy oz.) 


Oct 


418.1 -as 4113 41S.fi 15,141 2200 
Jan 4212 -0.7 422.5 4115 7840 174 

Apr 435 -0.7 4250 433 2881 3 

Jut 4210 07 - - 483 2 

Oct 431.7 -07 • • 227 

Total 23,782 2.402 

■ PALLADIUM NYMEX {100 Troy Sflroy Qg-1 


Total 


55,734 1011 


PRECIOUS METALS 

■ LONDON BULLION MARKET 

fPncea suppled by N M RotfechW) 


Gold (Troy ol) 
Close 
Opening 
Morning fix 
Afternoon nx 
Day's High 
Day's Low 
Previous dow 


C cquhr. 


249.043 

248.948 


S price 
389.50- 38R 90 
390 .00-361.00 

390.45 
3S900 

39080-391.20 
389.10-363.50 
391.20-391 60 
Lqcq Ldn Mean OoW Lending Rants (Vs US$) 

1 month .... 4.37 6 months 4 , 5 a 

2 months -...4 38 12 month* 4.98 

3 months 4.42 

fVtroy oz. 

347.75 

352.45 
357-55 
370.55 
S price 
394-307 

40a35.4Q2.g0 
01-04 


Mor ft* 


month* 

months 

root 

rid Coda 

ugerrand 
Vta Leaf 
iW Sovereign 


US eta equtv. 
545.60 
552.10 
559.05 
575.75 
E eguiv. 

255-258 


Sop 14825 -0.70 14X50 14X50 122 59 

Dec 14X85 -X1Q 15030 14X75 5.771 2271 

Hot 15QJE0 -0.10 15050 14X00 975 3 

Jan 151.80 -0.10 152.00 15X00 151 100 

Total 7,019 2^33 

■ SILVER COMEX (100 Troy ozj Cmts/lroy Oz.) 

te 

54X2 

-1.0 

64X0 

541.0 

001 

379 

Oct 

54X0 

-18 

- 

- 

7 

. 

MO* 

5500 

-18 

- 


- 

- 

Dec 

55X5 

-1.0 

9558 

547.0 81257 

tJ0897 

Jan 

554J 

•18 

5558 

5558 

58 

W 

H* 

560.7 

■09 

5838 

555.0 

9,090 

470 

Total 




10X610 11856 

ENERGY 






■ CRUDE 00. 

NYMEX (42J100 US gain. STOtarel) 


UtM 

Dayf 



Open 



price 

dxum 

MDft 

Lni 

tot 

voi 

Oct 

17.11 

■028 

17.46 

17.10 

6083* 33,4*7 

MOV 

17.32 

■024 

1782 

1721 

74238 

19808 

Dec 

17.52 

-023 

1780 

1783 52.480 

14.409 

Jan 

17.70 

-an 

1786 

17.66 35.978 

X124 

Feb 

17.75 

■aio 

U.91 

17.75 20.965 

*280 

Mar 

1780 

■0® 

1787 

17.80 

14.721 

977 

Total 




386819 B586I 

■ CRUDE OIL IPE (STOamet) 





Latest 

Dsyta 



tea 



price 

dianpa 

HUM 

Low 

M 

«N 

Oct 

15.87 

■025 

ISIS 

1584 

59846 

18203 

tan 

16® 

-0.23 

1628 

1X0* 51873 

16,783 

Dec 

1628 

-025 

1X54 

1623 

26.442 

loss 

Jan 

1637 

-027 

1681 

1X37 

11267 

492 

Fab 

1X42 

■022 

1685 

1X42 

S.37S 

30 

Mar 

1X46 

-0.09 

1888 

1X« 

X837 

TOO 

Total 




169,703 37,473 

■ HEATING OIL NYMEX (42.000 US ffrita: C/US Qttj 


Latest 

Day’s 



Open 



price dbange 


Low 

tat 

Vtf 

Oct 

46.16 

-a 32 

4X30 

4X10 36,060 

9817 

Mov 

49 JO 

■078 

5035 

4025 

21.905 

1121 

Ok 

5035 

■0.72 

51.10 

5030 3X322 

4742 

Jan 

5130 

■052 

5185 

51.30 21111 

2850 

Feb 

51.75 

-042 

52.25 

51.75 

11251 

1811 

Mar 

51.50 

■012 

51.70 

51.40 

9815 

513 

Total 




163863 21,440 

■ GAS OH. IPE (Srionne) 





Sett 

Oar* 



qn> 



price 

iflwpB 


Low 

ml 

W 

Oct 

150.25 

-100 

15175 

150.00 

1,444 

7.650 

Nov 

753.00 

-300 

15X50 152.75 37,191 

4.665 

Dec 

155 J5 

■100 

157.75 

15X00 

14.352 

I.BD9 

Jan 

157 JS 

*150 

1S925 

15X75 

17.921 

1.865 

Feb 

157.75 

•150 15050 15X00 12.553 

179 

Mar 

157.75 

-2.50 

15X75 

15730 

4.683 

920 

Total 




0X217 1X247 

■ NATURAL GAS NYMEX (10.000 ramBu, SfmmBtuJ 


Latest 

fray’s 



Open 



Orioe donga 

MW 

low 

tal 

1M 

Oct 

1-666 

-0JC2 

1.710 

1.800 2X493 13891 

Nov 

1.910 

■0017 

1350 

1805 22,161 

5,458 

Dec 

2.110 

-0815 

2145 

2.100 27834 

1978 

Jan 

2.140 

-0010 

ties 

2.130 15,031 

928 

FA 

2.005 

-0007 

7 rso 

2870 

12.417 

1.095 

Mar 

20 

-0805 

2025 

2015 

9.407 

469 

Total 




159,630 2X413 

■ UNLEADED GASOLINE 




NYkEX (4znoo us gafls.; ous eafeu 




Latest 

Days 



Open 



price i 

flange 


Lew 

lot 

Vof 

Oct 

48i» 

■0.92 

47.10 

40,10 25,147 ' 

11,739 

Nov 

4850 

-180 

4720 

4X48 16281 

6281 

Ok 

5430 

-025 

5480 

54.20 

9.032 

1.483 

Jan 

53.30 

■015 

5385 

5120 

X105 

779 

Feb 

53.15 

+085 

5115 

5115 

I486 

321 

tor 

S44I 

- 

■ 

- 

787 

- 


Tow 


Mfltt 1S265 


59-62 


GRAINS AND OIL SEEDS 

WHEAT ICE (C per tore*) 


Sait Day* 
pries change Hkpi 
380.6 -03 - - - - 

- 0.4 391.7 390.0 8488 1.139 


-0.4 385.1 383J) 92J08 18,849 

-0.4 388.1 396.4 13599 315 

-0.4 401.1 3888 8,794 6 

160,472 20461 



Sett 

DtoT* 



Opes 



price 

throne 

Ite 

Lew 

tal 

Yd 

Sep 

10X00 

-0-25 

10X75 

10X79 

192 

5 

No* 

10780 

■020 

107.10 

10X75 

2.772 

145 

Jan 

109.00 

■0.20 

10900 

10X75 

1,813 

43 

Mar 

11180 

4L30 

11180 

11X75 

1.135 

31 

Hay 

moo 

-015 

11380 

11380 

1.181 

37 

M 

11X70 

- 

- 

- 

191 

- 

Total 





7^84 

281 

■ WHEAT CBT (S.OOObu rnfri; cents/BOlb bushel) 

S«p 

381/0 


383/2 

379/4 

827 

383 

Dac 

qrort 

•BXXt} 

+1/2 

3981B 

393/4 4X496 1X610 

lltar 

<*012 

+1/0 

405/4 

400/0 

17894 

1840 

May 

387/2 

+1/2 

390/4 

3881D 

28M 

781 

Jut 

354/8 

-1/8 

asaa 

353/D 

1439 

891 

Sap 

360n 

- 

38IVD 

356/0 

63 

18 

Total 





72838 1X423 

■ MAGEE CBT (5,000 bu min: cents/Sfilb busbaQ 

Sep 

224/0 

-0*4 

224/4 

223/D 

X862 

2,791 

Dec 

225/6 

-1/0 

227/0 

224IB132AE 2X87* 

Mar 

235/D 

-1/2 

236/4 

234/4 

31447 

3J37 

Hay 

241/2 

-1/2 

242/4 

241/0 

HIM 

719 

Jta 

245/D 

-1* 

248/6 

245/2 

12857 

934 

Sep 

247/4 

-0/4 

248/4 

247/4 

961 

12 

Total 




208870 33884 

■ BARLEY LCE (E per tonne) 




Sep 

moo 

-080 

103 80 

103-<W 

31 

5 

tow 

UMO 

•020 

104.40 

10485 

491 

7 

Jan 

10X50 

-020 

10680 

10X30 

342 

56 

Mar 

109.00 

- 


• 

79 


Hay 

11080 

• 

. 

• 

21 


Total 





AM 

68 

■ SOYABEANS COT ftOOCtaj min; amtaffiOfe buM) 

Sep 

583/4 

■3/4 

588/0 

582/D 

3,660 

1,635 

tow 

374*. 

-on 

580/D 

37Z/B 

78899 34830 

Jan 

582/8 

-5*2 

5884) 

581/D 15,390 

2£29 

Mar 

581/B 

•5/8 

597/D 

590/4 

7834 

1.248 

■far 

598/2 

-4/6 

604/D 

597/4 

4832 

475 

jiii 

603C 

■SM 

B09* 

603/0 

8.845 

97$ 

Total 




122,975 42,401 

■ SOYABEAN (ML COT (60,000tt»: centaflb} 



Sep 

26.78 


2X98 

2X84 

4008 

2488 

Oct 

2X41 

■X02 

2X68 

2X31 

T7.5B5 

5.520 

Dec 

2X03 

-0.10 

2X38 

2X08 4X233 

13.205 

Jan 

2X74 

-0JJ9 

2X05 

2X08 

5J/98 

501 

Mar 

25A3 

-X02 

2X.7U 

25.35 

7va 

1.140 

May 

2X25 

+0.10 

25.40 

2X10 

4.179 

495 

Total 





02813 23O0B 

■ SOYABEAN MEAL CBT (100 torn; S/tori) 


Sep 

1772 

•IX 

1726 

17X9 

X563 

2080 

Ota 

1812 

-Z-0 

16X9 

iaai 

12082 

4003 

Dec 

16X9 

-Z3 

17X7 

108.0 37021 

11,893 

Jan 

17X1 

-2.4 

171.9 

16X0 

X5M 

1.222 

Mar 

1711 

■2.1 

17M 

1728 

X334 

970 

May 

174J 

-1.5 

17X0 

1740 

4059 

102 

TOW 





8X017 Z1O06 

M POTATOES LCE fCftoraW 




Hot 

150.0 

* 

. 

. 



■tar 

105.0 

- 

- 



_ 

AW 

224 J) 

+X5 

2230 

2180 

1.455 

73 

May 

24X0 

p 

- 

- 

- 


Jn 

107X 

- 

- 

- 

- 

- 

Tou 





1^55 

73 

■ RR0GHT (BIFFBQ LCE (SlOOndax point) 


Sep 

15S7 

-3 

1555 

1545 

452 

95 

Oct 

1565 

■3 

1565 

1568 

827 

10 

tow 

1564 

*9 

1560 

1680 

77 

2 

J» 

1535 

-7 

1540 

1535 

5X7 

28 

Afr 

1540 

-ID 

1535 

1530 

329 

45 

M 

U10 

+27 

. 

- 

99 

- 

TaW 

tiew 

Pm 



2372 

181 

Bfl 

1506 

1495 






Minor Meta la 

Prices from MetN t&jKAn {hot weeks In brack- 
eta) .ANTIMONY: European free market 99.ff)4 p 
S per tome, in warehouse. 5.450-5^50 (5380 
5.500}.EHSMUTH: European free mark#, min. 
09J39K, S per lb, loma toe* in warehouse. 
3. 7D-4 .00. CADM1 UM: European free marks*, 
mm. 9915%. S per b. In warehouse, 126.00 
-138.00 (125.00-1 40. CHJJ.COBALT: MB free 
market. 990%. S per to, to warehouse. 24.60- 
2500 (23.80-24.60); 99.3%, $ par lb, to ware- 
house. Z1M-S&50 [21.00-21.90). MERCURY: 


European tree market, mm. 9&99%. S per 76 
1 20- MO- 


lb flask, in warehouse, 110-130 (110-11 
LYBDENUM; European free market, drummed 
malybdie oxide. S par to Mo, to w a rehouse. 
3.70-3.80 (3. 60-3. 36). SELENIUM: European 
free market, min 09.5%, S per lb. In ware- 
house,. 3.35-445. 


SOFTS 

■ COCOA LCE (Efroma) 


Dec 

Mir 

«*y 


998 

1028 


M 1054 
Sap 1089 
TOM 


COCOA CSCE (10 tonnes: S/tomea) 


oat — 


. 100952 


Prev. My 
1023.40 


■ COFFEE LCE (S/tonrre) 


te 

4104 

+11 

4150 

4117 

2.080 

84 

tow 

3993 

+11 

4090 

3990 1X030 2798 

Jen 

3962 

+39 

4000 

3963 13^26 

1.172 

tor 

3893 

+35 

3925 

3890 

X613 

576 

May 

3833 

+33 

3860 

3830 

1.495 

407 

Ji4 

3815 

+35 

3845 

3809 

344 

344 

Total 





3X888 X367 

■ corns tr CSCE O7JS0Dlbs; centanx* 


Sap „ 

217.00 

-X90 21X30 21X50 

178 

42 

Dec 

22200 

-1.80 22X45 221-50 23.186 Sjm 

Ha 

220.40 

-0J5 

22X30 

22X50 

7.1 82 

773 

May 

22X40 

-X60 23X00 22X40 

3.076 

230 

Jd 

227 AO 

-XBO 

• 

• 

784 

147 

Sap 

22X40 

-060 231.00 

231.00 

361 

8 


TOM 

ta COFFEE QCQ) (US centa/pound) 


35,202 7,187 


S*12 
Cup. Italy . 


Price 

.204411 


15 day enrage , 


19284 


fta*. day 
20043 
19CL65 


NoT PREWUM RAW SUGAR LCE (centaftba) 


Oct 

1X70 

+0.1 B 

1X67 

1X67 

1,701 

122 

Jan 

11-82 

- 

- 

. 

• 

- 

Star 

1X88 

+X17 

- 

. 

TO 

. 

TeW 





1,791 

122 

N WHITE SUGAR LCE (SflonncJ 



Ota 

33X60 

+1.70 

334 JO 

33X00 

3,422 1J32 

Dee 

32X20 

+1 JO moo 32X50 

3.409 

988 

Mar 

329.30 

+170 32950 32X50 

7.048 

1.082 

Mar 

32X00 

+2J0 327.40 327.40 

771 

74 

Aug 

327X0 

+1.10 32750 

327 JO 

419 

340 

Oct 

31X30 

+2.10 31X00 31150 

243 

2D 

ToW 





1X312 4JJ26 

■ SUGAR *11’ CSCE ni2.00abe; centa/fae) 


Oct 

12*4 

+024 

12-55 

1X31 34 .MS 8,322 

ttr 

12.47 

+X13 

1X49 

1X33 7X283 5.754 


1X40 

+X09 

1X41 

1X30 

1X391 

1,622 

JU 

1228 

+X10 

1X28 

1X17 

7.044 

880 

act 

2X21 

+X23 

1X00 

1139 

j'rro 

30 

Mar 

11*1 

+0.05 

1 1 -63 

11-59 

611 

ID 

ToW 




13X21914/625 

■ COTTON NYCE (50,000bn: centt/fes) 


Oct 

7X40 

+X43 

7X93 

TOM 

1256 

503 

Dm 

7X98 

+035 

7120 

8X70 

26426 

XSOO 

mat 

7X30 

+XS4 

7X00 

71 20 

0327 

261 

May 

73.38 

+XSB 

73.75 

7X36 

6/021 

202 

Jut 

7X88 

+UB 

74« 

73.11 

3,492 

67 

Out 

70J0 

+ais 

70.75 

7X50 

409 

11 

TeW 





47/931 3,053 

■ ORANGE JUICE NYCE tlSJXWfo* centa/toa) 

Sep 

8X50 

+X66 

8X85 

BX50 

121 

23 

Itav 

8X05 

+xn 

0X50 

&A5 11,702 

327 

Jon 

32.60 

+x» 

3X30 

31J0 

5.38B 

IBS 

Her 

SX50 

+x» 

97.15 

95.75 

3^70 

S3 

May 

99.80 

+X63 

10X00 

69J0 

078 

2 

Jd 

10X40 

+XB5 10X00 10X00 

496 

• 

TOW 





3XZ2B 

no 


VOLUME DATA 

Open Interest aid Volume data shown for 
contracts traded on CCM0C. NYMEX, COT, 
NYCE, CME. CSCE aid IPE Crude Ofl are one 
day (n arrears. 


INDICES 

■ REUTERS (Bara: 10^/31-100) 


Sep 13 Sop 13 month ego yaot 
2097.1 2089.0 3368.7 1~ 


■ CRB Butwaa [Saw: igg7 a TQH 


Sepia 

833.14 


Sep 0 month ago yar ego 
23284 229.44 21352 


MEAT AND LIVESTOCK 

■ LIVE CATTLE CME (40X100fte. cants/lbe) 


Sen day's Open 

pika change Mgh law tat Vot 

969 +-28 948 942 84 10 

+10 1000 978 Z7,flt» 3273 

+11 1032 1012 33J55 2.090 


1043 +14 1045 102S 11,704 197 


+13 1055 10(2 M38 2S6 
+11 1057 1057 8220 

9IL830 5337 


Oct 

Ok 

Fail 

Apr 

Jan 

tag 

Total 


Sea Day* apw 

price change Htfk Vnr lit 

69J75 +0025 60875 63450 31.873 

89200 +0075 60300 68.775 18286 

67.875 +0225 B8JJ00 67560 11555 

89X50 - 00.450 69.125 *247 

68225 -0523 66.475 68.150 1028 

63-550 -am 8BJB0 55000 022 


LIVE HOQ3 CME (flO.QOObK cants/toe) 


Sap 1308 +2S 1300 1298 ri| 4 

OK 1382 +30 1364 1331 4X3J1 44116 

Bar 1408 +29 1408 1378 11659 1,540 

May 1435 +28 1437 1407 4JU9 75 

Jut 1463 +28 1458 1434 1588 108 

Sap 1403 +28 1400 1480 1.294 21 

Total 70396 4664 

■ COCOA nCCO) (SC FTaAonna? 


Oct 

DK 

Ft* 

Apr 


Total 


0038 108 

647 19 

80 6 
*384 


■ PORK BBLUE8 CME (4ft000toe; panta/toa) 
Ml 


*ta» 

M 

AW 

ToW 


41-750 +0325 41.925 41000 
41.725 +0.450 41.775 41.173 
42000 +0230 <0560 42.060 
*3.525 +0275 40550 41100 
42.425 -0275 424S0 41.800 


7,483 2^29 
516 1GB 
91 11 

139 44 

30 2 

0259 s/m 


LONDON TRADED OPTIONS 

State price $ tome —-Cads Puts — 


■ ALUMNI UM 
(09.7361 LME 
1550 


1575 , 
1000. 


Oct Jan Oct Jan 
40 87 20 51 


29 

19 


31 

48 


75 


■ COPPER 
(Grade A) LME 

2400 


Oct 


2900. 


2600. 


114 153 

48 98 


Jan Oct 
9 


Jan 
48 
41 89 

107 147 


■ COFFEE LCE 


12 SO 
Nw Jan Nov Jan 


3690. 


3700. 


440 545 
401 514 


47 

58 

71 


■ COCOA LCE 
975 


1000. 
1060 . 


364 485 
Dec Mar Dec 
57 104 38 

90 
88 


183 

202 

223 


20 


48 

80 


51 

62 

80 


■ BRENT CRUDE (PE Oat Nw Oct Nov 


1800 . 


41 

19 


41 

62 

105 


LONDON SPOT MARKETS 

■ CRUDE Ott. FOB (per teiai/Nov) tor 


Dubai 

3l6.01-fiJJ3u 

-037 

Brent Stand (detect 

*15.48-6.50 

-039 

Brent Bend (Not) 

*16JQ6-fi.09g 

-037 

w.t.L ftpm eat) 

S112A-72SU 


■ OIL PRODUCTS NWEprompt daBvery OF {tome) 

Premium Gaaolne 

*180-183 

-55 

Gas OR 

5181 -IS 

-2LO 

Heavy Fuel Ofl 

S72-74 

+1^ 

Naphtha 

S158-189 

-2.0 

Jet fuel 

*169-170 

-3.0 

teofacm Mgua uaureanca 



■ OTHER 



Gold (per troy oz)* 

*389.70 

-1.70 

Stiver (per troy 044 

545.0c 

-3J 

Pknkium (per tray oz.) 

S415JS 

-4^5 ’ 

Pabdum (par troy oz.) 

SI 4850 

-3-2S 

Copper (US prod.) 

125.0c 

+2.0 

Load (US prod) 

3a2&0 


Tin (Kuala Lumpur] 

1330m 

-0J22 

Un (New York) 

348.6c 

+1J> 

Cattle (Are weigtitlte 

lf&55p 

•1.22* 

Sleep 0hre vreighijT^O 

87.05p 

-1JJ4' 

R 93 (Kva weigtiqo 

76.43P 

-037* 

Lotl day sugar (raw) 

*306.10 

+X00 

Urn. day sujpv (wte) 

S342.QQ 

-050 

Tata & Lyle export 

£306.00 

+1.00 

Barley (Eng. feed) 

ElQ7JJw 


Maize (us No3 Ya«ow) 

S136J) 


Wheat (US Dark North) 

£1800 


Rutter (CWJf 

8&EQp 

-OAO 

Rubber (Nw}¥ 

auop 

■030 

Rubber KLRSSNol Aug 

31060m 

+550 

Coconut 01 ff’hflfi 

*625. Oz 

+20.0 

Pirn OH (Matoyj§ 

ssi 50: 

+200 

Copra (PMQ§ 

*389.0 


Soyabeans (US) 

8106-Ou 


Cotton Outlook ‘A’ Wax 

758So 

-0.15 

Wodtopn (fl4» Super) 

486p 



£ par tome urinw oewvtereasd. p panco%. c cantata*. 

m MaUyatan cantata, u Nor, 1 Ool < Sap/OeL 
1 London FhyafcOL 5 Of HBMB ttm . t Man 


mm chm. % teepiM wrisfl* priced- * Chroga on 
'»re 


•rata- O Mod ae tar pavtoua < 


CROSSWORD 


5" .. 


No.8,558 Set by HIGHLANDER 


VO 

9521 

<683 

1,308 

782 

113 

21 


74£97 19,122 


39J50 +0350 38280 38.400 10,983 1.522 

39-775 +0.150 39900 39.500 101830 1,538 

40000 +0225 40200 30050 3,325 168 

30375 +4175 391425 39225 

4*500 +4050 44200 44.400 

43.100 - 43.190 43050 



ACROSS 

1 Choke or accelerator 

5 Old head swallowed one drug 
( 6 ) 

9 Fog has covered new pole 
which shows distance to fin- 
ish (8) 

10 Links progress with series of 
lectures (6) 

12 Former pit, once in a bad 
way, Is special case (9) 

13 Russian leader takes advan- 
tage of dodgy tricks (5) 

14 High-ranking officer can in 
US Navy (4) 

16 Cinderella's coach put ques- 
tions to family (7) 

19 Depending If hire charge cov- 
ers trouble reversing (7) 

21 Si^n Indicating pitch Is nearly 

24 Cast gives support for injured 
hand (5) 

25 Not for beginning of prose 
and poetry down under (9) 

27 Officer's aide wants middle 
son to become cricketer (6) 

28 It’s Issued regularly by mill , 
tary store (8) 

29 Planets - fifty featuring in 
discussions (6) 

30 Since flower starts to open 
slowly it's heat-resistant (8) 

DOWN 

1 Fiddle and piano put In more 
domesticated setting (6) 

2 Old widow has memory-evok- 
ing object on table top (6) 

3 Fill pot? (3,2) 

4 Heather has enclosed first cat- 
alogue (7) 


6 Plan for metric unit (9) 

7 A crowd starts from Easters 
inn after travelling down 
mountain (5-3) 

8 Carol follows regular service 
( 8 ) 

11 Cu t nails up (4) 

15 Bring up ceremonial escort : 


17 Traverse ship's front with oi 
weapon (8) 

18 Costlier version of covered 
walk (8) 

20 What affected defrosting pro- 
cess? (4) 

21 Sailor's weapon is to ignore 
girl (7) 

22 A tendency for floating off 
coarse (6) 

£3 Estimate value of donkeys 
mostly (g) 

26 Has to appear during exercise 
period (5) 


Solution 8*557 




a 


-” S3 


J V 


k . 

- sv 
ST 




.... 

V*"- ‘ ... 

■ ■***»; 




= a 


_ * •• 


! Y. 1 • . • 




> 




vj: 
X 


;v 


.V. . 


1- 


k -a... 

X, 




1 .-i i 

*•-+ 




^ *r - 




• — 4 . - ^ 


" •- -'■-■.-hiw 










M . . 


r,ce ij 

- ' ""V 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 


LONDON STOCK EXCHANGE 


MARKET REPORT 


s *o cont^ 

es tock pesi 


CROSSWORD 


m m A* 

rli 

■ b>< 




recouped following US consumer data 


By Terry Byland, 

UK Stock Market Btfltor 

Confidence in the near-t arm outlook 
for UK equities speared to recover 
yesterday afternoon when share 
and bond prices rallied after lie lat- 
est ps consumer price fndex came 
put in fine with forecasts. Earlier, 
equities had dropped by nearly 48 
points on the IT-SE 100 TnHw as 
nervousness ahead of the US data 
combined with fears in quar- 
ters that further rises might follow 
Monday's increase in UK base rates. 

The recovery in the second half of 

the ses si on, which was fuelled by 
a swing from losses to g»iim in 
long-dated UK government bonds, 
reduced the day's loss on the FT-SE 
100 to '7.4 at a final reading of 
3J2L4. Sentiment was also iwip«d 
by an early rise off 20 points in New 


Tuft's Dow Industrial Average. ■ 

Although the mood remained ner- 
vous, market analysts regarded the 

revival of confidence in the UK 

bond TnftT frat as vary si gnificant fnr 
equities. "Monday's move on. rates 
should luu &s m e gifts,” commented 
Mr Richard Jeffrey eft Charterhouse 
Tflney. 

But in early trading, when bands 
weakened across Europe an fears 
that the US data might provoke a 
fresh move by the Federal Reserve, 
equities were weak in London. Two 
leading financial newspapers 
suggested that UK base rates would 
have to he raised again soon. How- 
ever, Nat West Securities took 
a firm stance against such fears. 
"Base rates at 5.75 per cent; enough 
for this year,*i£toId f- Bflntq arWWqg 
that it saw only one more move - 
to 625 per cent” - in the next 12 


months. 

The equity market appeared 
unconvinced, however, and yester- 
day morning brought a round of 
losses among the retail stocks 
which managed to avoid nailing 
pressure in the previous session. 
Sentiment in these sectors was also 
hurt by disappointing results from 
Kingfisher, whose shares fell 
sharply at first but rallied lata:. A 
poor trading statement from Fisons 
a tan hit market hwAHwitp , 

The Footsie 3400 mark was 
quickly lost and the slid e continued 
Tmtii share prices steadied to put 
'rfhe index at a low far the day of 
;i%0964. 

^Against this background, the 
recovery hi the second half of the 
: session was all the more convtoo- 
',*& By the close, Marks and Spen- 
cer, the most prominent nama in 


the-retail sector, was a sharkt tinner 
an the day and losses elsewhere in 
the stares area were modest Across 
tbs broad range of the market there 
were many firm spots, with P&O 
standing out strongly an good first- 
haft figures. 

Stock market traders were favour- 
ably impressed by the recovery of 
the 3400 mark on the Footsie, and 
said that there had been ready sup- 
port when the index moved below 
this level. The day’s performance by 
equities showed that bond markets 
still hold the key to UK share prices 
and that a convincing recovery in 
band 'prices is still the necessary 
base for a farther advance in the 
stock market 

The futures markets played their 
u$hal role in fending the blue chip 
stocks as they first fell and then 
recovered. The FT-SE Mid 250 


Index, less closely linked to the 
futures market, finished the day 
down 342 at 5U579.1. 

Stwlc Rrrhflrigft fttwtjgHra indicate 

that on Monday, when shares 
reacted to the unexpected timing of 
the first rise in Bank of England 
fending rate for five years, retail, or 
genuine customer, business in equi- 
ties remained steady at £l-28bn. 
Volatility in share prices during 
that session suggested that inves- 
tors were both selling and buying 
stock. 

Trading volume of 567.2m shares 
through the Seaq electr onic system 
yesterday compared with only 
4846m on Monday, and showed a 
return to more normal daily aver- 
age equftv business levels. Further 
nervousness is likely ahead of 
tomorrow's policy meeting at the 
Bundesbank. 


FT-SS-A AH-Share iad*x 

1,675 i. 

1,650 — 

1.625 j* 

i.6oo — 

1.550 —-/*/- i- 

1,525 

1300 —J : 

1,475 — * 

1.450 > — 

Ju Aug a 

smwFromMt ttW 

■ Kay Indicator* 


KquHySham Traded 

Tumawr by tang (mttom. BrdUSnff 
htegartt tei w h — nH nmU mw 
1,000 — 



FT-SE 100 

FT-SE MW 250 

FT-SE- A 350 

FT-6E-A M-Stiarai 
FT-S&A AB-Shsra yWd 

3121.4 

3073.1 

1576.6 

156&5B 

3.82 

-7.4 

-34_2 

-A3 

■*27 

(331) 

FT Ordbwy Index 
FT-SEnA Non Fha pfe 
FT-SE lOOFut Sap 

10 yrGUtt yield 

Long gtt/aqurty yW ratio: 

242&5 

19.31 

3118.0 

8.B1 

2.30 

+1J 

(19.38) 

+&0 

(B.82) 

P-311 

Bsst performing ooeftoro 

.. +1J2 

Went perfomring Mctore 

1 Tnharm 

7 

2 09 Exploration & Prod. 

.. +1.1 
„ +03 

2 BuAding & Conatruc . 

— 

.„...-i.e 

4 Rataflera. Food 


„ +02 

4 Water 



5 Of. Integrated — 


. +ai 

5 Extractive InduMlaa 




. 


Fisons 

suffers 

afresh 

The troubles of Fisons, the 
hard hit pharmaceuticals and 
scientific . instruments group, 
took another twist yesterday 
as the interim results state- 
ment appeared to offer endur- 
ing glnmwi- 

The company has been seen 
as a long-time bid target by 
market optimists. But the pos- 
sfbfltty that, however cheap. It 
might not actually have much 


to offer, has led acme analysts 
to question just how much hid 
value there Is in the share 
price and thus how much ft 
would fall If bid hopes evap- 
orated. 

Mr Paul Woodhouse of Smith 
New Court argued' that the 
stock was on a highly demand- 
ing prospective nnfltiple of Z3 
times earnings. If ft were to 
return to a sector rating, fts 
share price would have to tum- 
ble to 90 p, whfle ifit.was on 
the stone rating as! C3axo its 
share price would be virtually 
halved. 

As . it was, ‘ \ analysts 
responded to -fintfSalf profits 
of £80 Am, a halved .dividend, 
and a very cautious sta t em e n t 


EQUITY FUTURES AND OPTIONS TRADING 


Stock index futures were been released. - 

volatile In thin trading, opening iWSeptember contract on 
with renewed weakness but the FT=SE 100 tndeoc moved 
rebounding sharply once the down through 3,100 at the 
latest US inflation indicator had opening but dawed back to 

■ nr-eciMBmex FUTumBffjFg as par MfcAit point (arq 

Open Sett price Change HWi Estvol Open to. 

Sep 31100 31180 +&0 31200 30750 22809 28681 

Dac . 3121.0 31290 +40 31300 30920 11106 33318 

Mar .. 31310 31560 +20 31310 31310 60 525 

■ PT-«CMP2B0WDeX FUTURES £10 per tahxlax point 

Sap ' 36700 36770 -130 387110 38700 163 - 3126 

Dac - . 36830 37000 -ISO 37050 - 36930 249 1941 

■ iT-eE9ro2»ece(HnuRBSpMuo cio par htinaw port 

Sap - 36770 - - - - 638 

M opan Ham flguM itfer pmtaua dqr. t Baal Mkana shown. ■ - 


■ FT-SE MO WDEX OPTION I 


J 1*31 IQ CIO par M. index paint 


2960 3000 3060 MOO -3180 3200 3280 3300 

c p c p c p;. c p .-c. . p . c p . c p c p 

ta 181 1 V8Pi Vi n IS 1 ! flfe 39 iy 87 ! 137 1 187 

Oct Ml IBfc 148 20z 194*2 36 7* 5Bh 41% 84 11S»* -IT 1SW; 8 197% 

Mw 2*2 30 IK 41*j ttBfe 65 Ml 76 7ft 1OT Sft 131 87 165V 23 201 
Dr HF«4ft 188 60 US 7 ftttft 98 Ift 119 7ft 14ft Sft 179 38 214 
JWf- — -27*10%.. J^fcMSt 2 198 497 -12ft 254 

Cali <653 Ms 17/MB ' !' . 

■ EUWQ4WVtelT-«TOeeiB^ic^toNJJTO£lgfiarflill0dypoM., - i 

2028 2976 aW-TSsoS'” ' 3176^1 «» .--3278"" 

S M8 1 W>1 ft Sft l l'fl Vs II 2 * BO *1 lUft 1 

204 14 M2 22 12ft 33 « 6ft Tft 48 9ft 24 1321a 1ft 17ft 

NOV 223* 2512 141 49'/..: 86% 8ft .41 142 

Dr 23ft 37 . 198 63V * .•■'JT'Kft 

Ittf 21ft 5ft 218 89 VMftWfc - . 178 .. 

cm wn ra» ixn - unwyno mm vm m m — mm m cud «■ n wnt ixicii. 
t U»g 3M Miy non* ■ 

■ HJnO STYLE FT-SEMP 260 MDEX OPTION (OMIjQ £10 par ft* Index pohrt 


8ft Bft 


.43 142 
• Jt «ft 
178 .. 

rft* Index point 


3600 3660 3000 

foP 

0* o Mi 0 Mamet prtcaa «d win 


3600 3709"' 3760 ..,3600 

42 11»j Hfc 35 4 . 78 ‘ ,v : 

i n Mm rt UtR. ■ 


on prospects for the second 
half by lowering forecasts. 
Smith New Court rarma down 
to £45m fiom £8flm for the fan 
year, while UBS reduced its 
estimate to £6fen from ESOm. 

Fisons, which stood above 
SOOp .a share three years ago, 
crumbfed a further lO per cent 
yesterday to end at 185p, with 
heavy volume of 7.7m going 
through the electronic ticker. 

P&Opfeases 

PAO was outstanding in the 
transport sector, jumping 21 to 
674p an' the back of sigpifir 
candy better thaw expected 
half-year results. The shares 
moved to 675p in heavy early 


dose at 3,118, marginally 
bdow the 3,120 best of the 
day, . The closing dbcount to . 
the cadi market narrowed to 
4, with the fair value premium 
standing at around: 3 points. 

Marketmakars said business 
was mostly thin and nervous 
with the September contract 
expiring on Friday. Trading 
volume totalled Just over 
22,000 but almost half of that 
figure was sdd.to have been 
determined by rpfl-overs into 
the Decorhber contract 

Trading was again 
dominated by locals - 
Independent traders - with 
institutions for the most part 
keeping firmly to the sidelines. 
■“What we badly need is an - 
injection of hedge-fund and 
inetitotionaJ^ac^ty/ saud one 
dealer yesterday. 

In traded options; volume 
rose strongly to 56^82 
contractvfrom 42 ATT on .. 
Monday; The main drive came 
from Footsie option volume, 
which was some 10,000 
contracts higher at 22,824. 
Between them. Footsie and 
Euro FT-SE options accounted 
for more than two-thirds of 
total turnover. The most active 
Individual stock options ware 
Glaxo and Tomkins. 


morning volume but eased 
back on modest profit-taking. 

The six-month performance 
was above the top end (ft most 
brokers* estimates, rising 
strongly to £L2&4m before tax 
cm the back <ft rapid expansion 
an the shipping side, 

The results, together with an 
upbeat management state- 
ment, led analysts to rapidly 
revise upwards their projec- 
tions for fan-year profits. To 
ta im one example, UBS is now 
pitching for £3G0m pre-tax for 
1994, up from earlier projec- 
tions (ft 

A surprised stock market 
described the buying as “seri- 
ous” and trading volume 
topped 2Am shares. According 


TRADING VOLUME 


ASOAOoupt . 

— ,1 -1~ .V 
mvy mnonwT 

MbvtFWar 


Maoc. 8dl Ports 

SSUt 


BTl- 

BTHf 

BMik of SoaOntfr 

awfcwt 


VaL 

Ctaatag 

Ota 

000a 

.P*M 

damoa 

0 JDO 

nh 

+* 

ZJMO 

401 

* 

687 

48 


889 

to 

-4 

to 

544 . 


EBB 

344 

-6 

ijroo 

Z 84 *| 

40 

087 

85 

to 

*77 

577 

an 

A 

-8 

Ito 

to 

+10 

JWOO 

493 

-7 

Ita 

IM 


443 

936 

400 

728 

- 4*2 

+1 

7.100 

416*2 

« 

iooo 

297 

-11 

imn 

388 

#1 

A 1 W 

288 

+1 

IOuuOQO 

329*1 

-2 

to. 

207 

-a 1 * 

MOD 

595 

zfim 

5 S 7 

-ia 

1300 

207 

+2 

17 

447 

re 

2jno 

to 

+1 

1.003 

487 

..+1 

1.700 

494 

-a 


uNamSKi 
EngCMiaClM 
BikrprfMOif 
Bmunl U«a 
HQ 


I "i - SE Actuaries Share indices 


'ho UK Series 


Day** •• v V YMr »*. Bam. P/e Xd nd). Total 

Sep 13 chH#94 Sap 12 ItepV Sep .8 ago yW6% yMdlt Mfc> ~ y Id Baton 


FT-SE 100 

FT-SE IH BOO 

FT4E Md SOD mu kw Ttaata 

FT46A30 

FT-SE SmuB Ca p . . 

FT-SE «— C ap ax kar Truata 
FT-9E-A ML-SHABE 

■ PT4RH Actuaries i 


10 Mmmu. EXTRAOnONdS 
12 Extradtue industries^ 

16 OB. Waondedp) 

16 OB ExntowBon 8. BSflUl 

20 BBI ftMNUEM3rURBR8pea . 

21 BuMng a ConatmoHonpa} 

22 BuMno Matte & ltopdn(31) 

23 awmfcalaC22) 

24 ravwaBtad tndustriaiatiq 

26 Sactroric & Bact Equip(34) 

28 EngtaxMdng(7D) 

27 En^naaring, VeMdse(l2) 

28 Prtnflno, Paper & PckgPQ 
SB TeWee 6 ApparICT 

30 CXXM9U>0Bn Q0OO6W7) 

31 B«BMMriea(17] 

32 Spkfta. Wnee a CUanCU8 
. 33 Food Manufactumra{23) 

34 Hooaahold SoodaflS 

36 Hearth Carepl) 

37 PI«ii>acautlcalBt12) 

■ 38 Tobaccofll 

40 BBiwceapiei - 

41 OtorfcUtoraPD . 

42 LektM 4 H0ttlat24) 

43 MadaPQ 

44 JReMsra. FdodflQ 

45 RataOafa, GetwwalH^ 

48 Support Servteee<40) 

40 TVanopart{16) 

51 Other Servfcea 5 Buaineaa«_ 
80 limuhEsm 

62 BMMCM17) 

64 Gaa DJatributionp) 

66 Talecomnunlcation«<4} 

68 Waterfta 


76 FaUHCUUS(104} 

71 Bankapq 

73 k>omiaef17) 

74 Uh ARurahre® 

75 Marctwnt BanMQ 

77 Olhar flnandal(24) 

79 PmoUvfr Ul _ — 

80 BVgjgEHM BgggBS 

89 FT-eeA Ml^aH«WP8aj 


-02 312&8 
-c» snas 
-in 371 ss 
-04. 15829 
-04188935 
-041867^3- 
-0.41572^' 


465 84B 

338 5.71 

351 318 

340 8.61 

301 415 

319 448 

382 843 


17.17 91.70 
21.00 B258 
1953 9376 
17.93 4479 
3080 39L8Q 
2849 4052 
1350 4367 


Day's - - Year Dtv. Earn R/E Xd «*. Total 

Sap 13 ctjgaH Sep 12 Sap 8 Sap B jmo ylelcm yMtWt mflo yM Bamn 

276658 276391 277316 279951 227330 327 302 2312 5477 109337 

397252 —15 401379 404363 404344 323300 3J23 306 2473 5424 1064 JOS 

270344 +31 269955 272457 2751 56 221250 340 556 2339 5399 110054 

201376 +1-1 1888.06 1BB753 1977.14 1851-90 303 ± X 2056 Ifflg 


-05 196374 197746 199746 186330 
-15 114859 T17309 137752 1151.70 
-05 191957 198323 198653 182320 
-03 245360 248319 245378 222950 
-0.7 1BB370 1B945S 192315 194550 
-04 196050 197414 1B8855 210400 
-a7 187444 1872.02 189147 164370 

231953233851234309192650 

-04 299057 299152 297745 248250 
+0.1 169750 17Qg.11 171376 190050 
-05 279351 2802.1 B 2821 .10 2787.70 
-1 2 SSSnXl 2906L2B 231 384 21 0650 
-05 288154 286951 291350 266750 
-ai 2371 56 238457 23B39B 282750 
-04 2482.76 247751 2497.74 2687.60 
-05 1680401686:78 169656 176390 
-32 306346 307356*310058303840 
-173607.31 364&B6 383247 3991 50 
-02196336197021 198374191310 
-15 264346 284391. 267492 274150 
-15 210748 211311 211748 197750 
-05 2901.76 291123 292657 254020 
+52 182406 181943 183358 184650 
-06 186553 166624 160375 187050 
-05 1577.14 1677.B4 168407 164940 
+12 229450 232157 236158 228400 
-02 130453 131244 1323, 93 13PW5B 

-05 242229 244342 248418 231 050 
-08 256753 2S7Q52 282054 200360 
+05 1945JS 1964.10 197252 217310 
+31 201323203850207043 205440 
-14 188059 1901.14 193757 191250 

-04169856170655172386 162355 


-05222126 221391 
-05287356287362 
■ -0.4 126321 124779 
-12244359242451 
-15 312652816351 
-15198384 200404 

-04267656288651 
-04 167255 1S78J* 


225651 217920 
203344 262550 
126354 1487.80 
248497 264150 
318316306360 
200310177250 
150750 160360 
2901.12 255360 
150657 150310 


552 2312 5477 109337 
656 2473 5424 106402 
5l 56 2239 G3S9 110034 
t t 2036 113325 
4.88 2496 5467 99499 

471 27.40 23.88 88047. 

454 2728 4758 89482 

417 3021 7417 108359 
•495 2423 87.10 95057 
848 1345 6598 35361 
479 2475 4195 1061.48 
249 8729 7037 112340 

556 2354 6321 114556 
648 1399 4049 95375 

7 « 1594 8334 96352 

792 1315 6153 101790 

37*1 17J29 8392 96197 

793 1896 71.13 963.42 . 

793 1332 5492' 68194“ 
393^ '4394 3590 96396 1 

'752 1649 7898 96341 
.370 1157 21757 80350 . 
' 312 1999 42.76 96026 . 

380 1798 6488 90424 

'494 26.18 4893 10275B 

597 2294 6457 100453 

893 1435 46.10 1000531' 
648 1316 3595 88327 

650 1997 237B 9fi35rT 

522 2229 4351 90597. 

2.14 aaoor 2i.« 

779 1694 7342 99023 • 

999 1233 8346 1057.1 V’ 

■ t t 6379 80199 
791 1356 5022 850.14 

s>«B A J» 8996 927.10 

322 1991 4312' 116228 i 

357 1350 8073 07316 

937 12.15 11494 65 99 5 

997 1193 4855 .88945 
752 1332 8634 01794 

10.72 1098 8229 92654' ‘I 

799 149a 5277 169293. 

420 afl.09 3950 850.10 ' 
192 S546 5056 88190 ! 

643 1850 4357 122922 


lABpmert 

ndteacL 


■ Hoivfy movements . .. 

Oca w Quftff 1050 1150 1«50 ■ 1350 1400 M90 - 1310 HftFVday LmMy 

c: 31084 31025 30B37 3080(8 30885 30814 31030 31137 31219 .30631^ 

STOB5 36999 36865 38733 36775 36769 *71.7 36762 3677.7 37065 36713 ; 

SS 1M.7 15669 MOW 15685 15643 - 15712 15734 15792 18622. 

Tke. FT-8E 100 O^a ** W 0^ ^ ^ w ' «* )»"**• »*■ 

rn FT-SE Actuaries 350 Industry !»»«»*■ 

goo 1090 115 0 1200 1390 1400 1590 1310 Cloea> Praufawa Cftwa ; 

— Zoo n +WM9 109 0 ? 1B731 10784 1077.T 10129 '10775 10731 10730 10972 -192 - 

gj folQWCn 10999 1«19 28799 29675 29889 29792 ' 30022 30248 30337 30359 -49 . 


Ptemaoaufce 30034 2iW9 10427 18414 18405 . 18442 1847.1 1862.1 «734 -283 

Water 18740 18759 16W.O mmj| -mas- sms 9«72 29143 -17.1 


£9122 29019 


CBnvMby 

OHM Mam 

VT-BPand 


i. yyV Iil'iSSS BSmtrFtewHptiaai W-17 tpm 

FT ' e ^^U 1 7^T~i 

tnofttad ly. tfw m— >*— wtfMfta hrtnaaofaciuar 

aM»trtee aflrte« [ 


l Tha F+uncMUrrMC 


Jfc^SM^jwTelZaSSei^raa . flaRd on Mag wlume Inr a i«h nl1»in d mafrr 

■UlMA^MMMiaSTeMilaMatpaniidsa.; 


Smart . 

BriLArapMf 

UMiMnaaf ■ 3700 307 

BriaahaMf 3a» aM . +»» 

maabund 44 a aoo +2 

amnsMMt .13000 t+eh -Va 

SUssst w W HI 

Bureau Caemoft 2M BOB +a 

•BWOO 1500 03*4 . ;5l 

cuaaAWket 7,ioo 417^ +1 

Caadonf 3500 20B +11 

C*o*wi Cdnana.t OBI B6B -4 

Coaavydat 1500 278 +4 

Comm. UMoot 1JOOO 5*S -0 

Coalman ^ 1900 24gt. -Ilja 

CauiaiMat 1900 -is»a 

Mgahr • 330 438 ^11 

DaLa Huet 841 808 . -10 

Ctara IjQOO 197 -4 

Eaatam Bact 1,100 7S3 -8 

EaatMband Saa 341 724 4 

Eng ChhaClM 737 388 -6 

BrarpriaaOtf 1500 413 +S 

Baoeimri Uua 171 271. +1 

FW 2200 178 -9 

fl aona 7.700 tad -10 

fMgn3Cd.LT. 1.000 138^ -*h 

Boraaf t 30+ 228-3 

OaaADddiMt 387 383 « 

Omni BacLT 3800 288 *1»j 

QMKDt 3200 60* -2 

waul 229 3*4 S 

CkadXt , 880 4*7. +8 

OwdMatt 3200 418 +|ij 

OUSt 2500 BU -10 

0HBf 1500 W2 

OKMt 1500 SOB *8 

atnmst 4200 472 -fi 

HSBCPEpMart 2400 738 <2 

Harnmu i 7 338 -1 

Hanaant 7500 241% *h 

Ha iWafial iM 864 177 -4 

Haw 150 B 237 -8 

life an 3700 181 d 

M 18 815. 

xat 2200 880 +6 

kachcapat 1,100 432 . -5 

Jataaon MOOhm 430 5B2 

Kknlmrt 3100 487 -3 

KbbcSmw Itt * +■ 

Ladmhat 4500 102 -2 

Land SacuHaaf £000 S38 *b 

Lapcrta 116 767 -8 

LagM AOananlf 372 481 -11% 

UaydsMbw 1.100 - 888 -8 

LtaydmBwkt 3400 548 -8 

LASMO 2500 118 +4 

UmdonEtad 483 087 -7 

Lmho 3*00 1324 -4% 

Looaa 2300 180 -1 

MSOt 1500 482 «2 

MR 2100 143 ■ -1 

Manaarb 881 027 -0 

MBMLIhanMt 3+00 +0* 1 J +4 

UUandl Baa. IBS 788 -13 

Montana CWBj 822 143 

WCt 2500 134 +2 

MM Bnfct 3300 494 -17 

fMond Rnaart '^oo 4®s +iJj 

Nnt 446 z«3 

North VAw want 380 344 -4 

Nartfanr Elact. B18 708 -a 

Nartran Foodit 1M £11 +1 ■ 

Nonafa 8500 m 42 

Faarmt MS 603 -A 

BftOt 2*» «7* •*» 

PMngtsn 1500 . 191 -2 

A»«M 1500 ESS -4 ■ 

- WUMfeXf 2900 318 -02 

HMC+ 532 080 -4 , 

RJZt 4500 573 -11 

,M , 360 230 -6 

' §F*Op.t „ 1500 400 -8 

HocMnX Colrnant 223 688 -Z 

Madt . 1500 313 -7 

Haa0M.t 872 768 *3 

naotoMt 3G6 223 

R*Mf 1500 482 +1% 

; BoM Rmwt 1.700 184*2 +1 

‘ FVBkfiSedMdfr B<7 420 

Mhurnri 3500 280 40 - 

Safialxnyt 1500 441 

amidai 124 1322 . -6 

SpoOMi 4 Nan.t 1500 SM 4 

Bool H)rtn>-aacr. 1.000 372 -9 

■ BcddMi PcanTt 1500 362 

Mat 4500 1101 -1 

aacbM* 070 170 . .-1 

Safas! ? Ijsm 423 -6 

BewmlMatf 1500 6*1 -as 

3M TMnaportt 2600 733 -1% 

SMxrt ■ aeo 551 -3 

8tau0l Ena 183 232 +1- 

am»» WMi ■ 308 490 -fl 

MMi&Napheart '8500 147% -1 

£mNBia3wnf 3500 438 4% 

BnaW P iaohun Udf W 386 4^ 

Barths hid*. ^ BE 430 

Souftaro B*a.t 098 737 -6 

Bntd IMUm Bad. Ml SIB -4 

Bnah WMai WMBr 730 388 *3 

Mutt MM. Bax. 1500 768 -C 

BauBipaYIMr 488 661 -44 

8tandaalCMM.t 2600 sss -* 

3UHKUt 224 211 ■+ 

Smurnml- .1900 

1W 146 228 

430 373 

TOBf . 1500 281 -1 

Mraac 2900 148 -*2 

UMlIala • 428 448 - 

TMordbodnu 2500 i» ■* 

•TrcdI 2400 842 ih 

l&H'Stefflt twa 6M -l 

Mr Q«r 401 1023 fl 

TtoMuf . . 11500 229 

TfaWgarHouM BU 89 -1 

uS>; 112 854 +1 

IMmrfr. ^ S73 1142 + 

UnMdnmMf 648 924 -1% 

OCtNaanpapan 1500 511 -17 

VodMararf 11500 -1 

MMaavtot «« 720 -20 

Wdcnnift^ 1500 BBS -5 

WddiVMar 4T t» -« 

WaaHMr 87 «0 -10 

8£=Vh ,S 1 1 

WRaCcnrxn 2800 157% -*t 

Wtapay ' £500 16 S 

WH a.l. yt 70S 7S0 -9 

'VWMMJBecL 710 761% -8% 

YOtOMVMsr 370 »; -8 

Zanroat 2500 888 +16- 


to traders, it begins to look as 
though P&O's heavy capital 
spending of recent years is 
fawiiy bearing fruft. 

Elsewhere, airports group 
BAA moved ahead 9 to 493p 
following the announcement of 
a 6.4 per cent advance in pas- 
senger volume for August 

Kingfisher weak 

Stores group Kingfisher 
failed to impress with firsthaft 
figures at the bottom end of 
expectations but the shares 
held firm on the “Only Way Is 
Up” theory. 

Forecasts for the full year 
were lowered, although seme 
of the more positive analysts 
argued that all the problems 
were now in the share price. 
UBS, for example, reduced its 
estimate by £l2m to £8S3m but 
remained a buyer on the basis 
that “the massive derating 
seat since Christmas is proba- 
bly now at an end”. Hoare 
Govett lowered its forecast by 
£15m to tMpw *nH appeared to 
be unaintafafaig a hold an the 
stock. 

BZW, which has taken a con- 
sistently bearish stance, name 
down by only £5m to £33Sm. 
However, analyst Mr Tony 
Shiret remained a strong seller 
and pinpointed the threat to 
Kjngfteher's\B&Q chain, from 
Home Depot, of the US. 

Some analysts maintained 
the belief that at least one 
senior management chang e 
was imminent in spite of a firm 

denial by the company yester- 
day. The shares fell 23 at the 
start of trading' but rallied to 
dose only 3 down at 487p. 


NEW HIGHS AND 
LOWS FOR 1994 


Banmn to oh* uaw. bum mna a 

■4CMT8 (S Je*»i MipcWd. Mnpapan, 

DunmmiM HI wya, nucmiica rjkst 

BQUP m OwAiaat A, Fmmy, MIL tat. 
EMOMURMA HI Fmtm, N*naht 800, Spto. 
- 8 M 0 , Bid. VWKUB (0 Akflew MW 

upf. Kxnucnw ma n houhholo 
rmrrr - — nrn ith 

M W I WI MT THB8T8 n> UBBUWg 8 HOTBLa 
PI CjH« Comp*. C Try fc. Zmuct. Rw a 
mtt auRr — e Cowbml. T^ior W P mx . onWH 
FMM40M. « OTWR SSRVEA 8U8NB (B 


AlMUn RMd. ttaov IPI8T2 WMS x cams 
(11 MMdamta Mem A. aUPPOKTaUMI p} 

UnM, Mw » o n «r , Flifcn r hnSMBIUi 

IWMRB-lDHnM tal Acvarat 
TRANsroer « oer bin. mm bw 
S iagaooadi. GAMADMMS fl) 

Mm LOWS (186^ 

RUB (H) BANKS (1| flMnried ChsUL Hide 
M- ORByraWB p) Moot Mar 8TA, 
BULOMQ 6 CMBIBH (tf( BLM MAILS 6 
MCHTB (4) Wn. Haiti. naynoU VH— m. 
Da. ftt, OHUPCAia (0 ftUb Sparioim 
UUIMBUTORS H A^pl^wrd. BMoMay, COM*. 
MX Uk aartax Uhe aunMc 
onownro IHDI5 PI BIB. Da Mtk. Da. 
(Mia 189M2 Da WMa 1886M, Da Witt. 

1987. 8uW MMt. UBTfBIC A B5CT BOUP 

W0raDPaBM-P*2 " I BW I —U IIQM 
BtPRPn tC 6 BmPv M8UR OnoMa 7Mpe 
M. Whatmn, BCnUCTIVE BBS M Sraokar, 
Bnmdiia 4op«gMa HOuanou (mods 
M CeaiwR Partrar K Jayaa, Uanhan vynua 
wyaMd. aaoHoMCE fp bm utm bw t 
THU8IB tm pM o vnma co wum (i> 
LBaunE 6 HOIB5 P) Onk 750 m. Ding 
Ml. MPK PI BaAeor indw. BbMila, 

SaMflV, OS. BXMOMTION A PftOO «) Nam 
London, OTHBt PBMHCIM. p) PiniKI. 

MPBt 2MCH9 68 BriL Ihortaan. l+nwptfex. 
PR0N9TV A a*- 1580 808 BO, SMftaRuy, 
SBuAand, Da 9po Cnx. 200, SpeotaPy Shopa 
REZWUM, FOOD (0 Bnka Rue. 
m*uB,«m*Lnc4a«]OMA 
Patridga Fhe AM Rneoya BLePOKT saws 
H B8 Bl JBA. Jot—on Cl aa naa , Maoa 4. 
Stix^ri Data. ffiXTLBB 6 APPAR8L H ADMl. 
B a e la na n (4). prannwod, P art M id 
tumoport 00 OiOX rFC. AIBBHCANB p|. 

A buy recommendation from 
BZW, plus talk of aggressive 
switching from other compos- 
ite insurance stocks, drove 
Royal Insurance sharply bet- 


ter. There was also talk around 
the market that a big US buyer 
had been operating, although 
some dealers thought this 
unlikely because of Royal's 
exposure to environmental 
claims in the US. At the dose. 
Royal stock was 9 higher at 
290p after good turnover of 
S.lm shares. 

Talk of a sen recormnenda- 
tian from one of the market’s 
leading brokers and a revival 
of rights Issue stories unsettled 
Forte, 3 lower at 228p. Specula- 
tion was that Forte may pay In 
excess of £200m for Meridian, 
the hotels group owned by Air 
France, aid also take advan- 
tage of the acquisition to 
launch a big rights issue to 
reduce its debt 

Granada was also affected by 
rumours that the group could 
be contemplating a sizeable 
acquisition and bad been tak- 
ing soundings from its share- 
holders. Granada declined 8 to 

487p. 

Norweb was one of the better 
performers in the utilities sec- 
tors, the shares edging up 2 to 
794p after the company sent its 
broker. Smith New Court in to 
the market to buy its own 
shares. Norweb bought 5m 
shares, or 2^ per cent of its 
issued capital, at 795p. 

South Western also moved in 
to acquire more of its own 
stock, buying 500,000 shares at 
766p. 

Smith New Court was 
responsible for keeping the 
Scottish generators on an even 
keel; the broker's utilities team 
said the Scots “should have 
prospects as good as the Rees 
after their distribution review; 


Hydro will be able to pay 10 
per cent real dividend growth 
until 2,000 and Power should 
be able to match this. Hydro 
slipped 3 to 372p and Power 

held at 882p. 

At least two of the market's 
most Influential broking 
houses. Klein wort Benson and 
Credit Lyonnais Lalng, were 
said to be recommending a big 
switch from NatWest to Bar- 
clays. The latter held at 596p 
on 6.6m traded and the former 
dropped 17 to 494p, on 6.3m 
traded. 

The building sectors had a 
rough ride again as dealers 
focused on the Implications of 
higher domestic interest rates. 
NatWest Securities' building 
team said “with September a 
key selling month for house- 
builders, the rise in base rates 
couldn't have been timed more 
badly." 

Taylor Woodrow foiled to 
hold an early gain inspired by 
better than expected interim 
profits, which were around 
£2m higher than best esti- 
mates. The share price settled 
2 easier at 135p, after 142p. 

Caradon. the building prod- 
ucts group, was one of the 
FT-SE 100’s best performers, 
raring up 11 to 298p, after top- 
of-the-range interim figures. 

The latest newspaper circu- 
lation figures knocked Drily 
Express parent United Newspa- 
pers which fell 17 to 511p. 

MARKET REPORTERS: 

Pater John, Jeffrey Brown, 
Steve Thompson, 

Ramraj Gogna. 

■ Other statistics. Page 22 



LONDON 

EQUITIES 

| LIFFE EQUITY OPTIONS | 

RISES AND FALLS YESTERDAY 

Maaa Ma Same 


Ml Mi 

Opto or Jr »r Oct JR to 

iH l yw 388 23 - - 15 - - 

(•593 ) .838 3 - - 40 - - 

*W* 280 UM2SH3M M IBM 22 

f284 ) 300 SH 14 21K 22 28* 33 

ASM 00 an 11 12 2 3* 3 

CBS } 70 2 5H6H6H BIO 

BrtAbrMR 390 28 J1W42Mr 11 20H 26H 
ra07) 420 7 1B28M29H 38 43 

SriBBdnA 420 H S1H 41 1SH 23 29 

P(24 ) 460 5H14M 2339M47M 53 

Boob 500 44S1H 84 3M 12 18 

(*535 ) 350 12 23* 37 24 9S 41 

BP 390 MM 4314 BOH 4H 8M 15 

{■♦IB ) cd n am u 22 a 

MHlSM 14012H 17 21 3 7 BH 

(TW) MO t 711W 15 18 1914 

BBS HO 24)4904 44 13 30H 38 

("358 ) 800 SH 142IH 49 88 71 

OttiAHs 390 37 48H 58 SlfiHZDH 
(*417 ) 420 WH » 43 18 29 35 

carta** 460 38H47H SB 5 15H 21 
(-486 1 500 12H26H 38 24M34H 40 

MnlMon 493 61 86 62 ZH B 15 

C540 ) 343 11 2i M 18H 2SM 38 

D 800 4BHS7H 88 12 S 40M 

f82S) 850 M 39Jk 63H 38M SDH 67 

HngMur 480 W 48 II 0 17 24 

(■487 ) 600 t21 VH 40 27K 37 43 

land Saar 600 sum 83 7H1SH21M 
(■616) 830 8 IS 28H 38 48 49 

MM & S 380 M82M 41 5H11H 18 
(*404 ) 420 8 17H 26 2BH 28H SDH 

M8IM 480 46 87 81 8K 14H 22 
1*484 ) 500 18H32H42H 21 30 41 

5*481 420 32 42 SZHr 8 T7H 22H 

(•441 ) 460 8 22H32K27K37H4ZH 

9*1*6 700 3BH Bl 88H 9 17* 28 

(731 ) 7» 8H 34*33* 37 44 55 

'Stanton* 200 18H Zt 28 3H 7 11 
ran ) 220 6 11 1BH 13M 17 2IH 

Tr**gv 80 1214H17H 2 4H SH 

PM ) 00 ■ SH 12 5» SH 10H 

IManr 1HXJ57H 76 97H 11M 27H 41 H 
(1137) 1180 26 4BH OS 32 50H 64 

2un 800 S8K72HMH 0H1DK34M 

r834 ) SO tSH 44 95H 32 41H S9H 

tlito to R*i to F+b Ifcy 

Grant Mat 390 39H 47 527H15M 19 
(*418 ) 420 2DH SB SB IBB 30 S3V. 

laflrta 180 11H 17 2110HT3H 18 
OS ) 180 4 BH 13 25 27 30H 

Uta Stats 300 38H35H 40 Gn 11 18 
{■32* ) 33012H 1924H21H2SH 34 

Often to to tor Sap PR to 

Aon 130BHT3H1SH 3 7H 10K 
.P 35 J 140 SH 8 12 7H 14 1# 

Onto to Bib to ww Ml to 

Brit 'Ann 480 49 81 7TH 15 24 32K 

<*491 ) . 500 MK 40H 61H 33H 45 S3 

BAT tad* 420 MH 36 4ZH 19 22 31 M 

T422 ) 480 8 1SH M4SH 47SBH 

BTR 300 3Z414M4M7Ht» 
CSZ8 > 330 14H 24 M 16 19H 27 

BrtTatan 380 38H 39 4BH 4 10* 13 
rSM) 30015H2BH27H 18 24 27 
CtatoSCh 43 4SH B S7 4H 9 15» 
(1408} 48018H2SH 34 1M25H33H 

Mm Boc 760 48 MS BOH 32H 45E6H 

f755) 800 24 42)4 58 B1H 74 84 

atom 460 2BH 38 48 13 19 26 

r«7Z ) 500 9 19 3B38H43H48H 

GEC 280 19 22H 29 7K 11H 14 
r288 ) 300 SH 13 19H17H 2 24 


ft 38) 
Ira Ms 
H90 ) 
P&O 
r«72). 


ran j 

opto 

BAA 

r«i ) 

UanWr 

r«0) 
Opto- 
Atay to 
r«o> 

Anted 

faj 

Batoa 
fSB4) 
to One* 
(*298 ) 


Cab Ml — ■ 

to tab to to Fab to 

240 1ZH 17 20 8 12H 16 

280 4 S 12 21 24H27H 

15414H - - 7H - - 
180 4H 8 122BH28H2BK 
180 1B20K24H 7H 11H 15 
200 9HT1H15H 20 23H2BH 
850 I9 92H84H21H32H 47 
700 14 28H 42 53M 82 7GH 
180 16 222SH 5 W. 11 

200 7H12HKH 15 19H 22 
3D0 20H27H32H 9 14 SDH 

330 SH T3H 18 28 31 37H 
860 40 87 82 28 38 49H 
BOO Z] 43 BB 55BSH75H 
500 30 43H5EH 18 24 37H 
550 WHMH30H 51 54H 89 
280 34 32H 38 11 15H21H 
300 M2ZH2BH 22 25H31H 
2*0 is im as ii is ibh 
280 SH 11 18H 24 27H 31 
1B3 1IH2ZH - 5H • - 
200 9 M WH 14 IB 20H 

325 36 - - 4 - - 

354 WH - - 14 - - 

Oct J— Apr Oct Jw Apr 

475 283SK48H 7 13J4 17 

500 1ZH 22*1* 18 25 29 
4B0 48H52H 60 3H 13H 15H 
500 18 29 36H 17 30H 33 

to to to to OR to 
390 18 31 40 4H 13 22* 
420 4 15* WH 23 29 39 
25 SH 8H 7 1 IH 2H 

30 IH 3H 4H 2 4 4H 

550 48* 64* 77 IH 10* 18* 
600 10* 32* 47 15 29H40H 


British Funde 

Other Hxncl Interest 

Mirant Extinction 

Gen*i* Manufacturers 

Conaumaf Gooda 

Santas — ., 

IMHM 

r-i - . . _r_a_ 

I IMURIll — —— Pip-an..—— — nr 

Invaqmrant Truata 

Othan 

Totah 

Data baau on Dnaa aompanlaa 


Mad ai Ora London I 


TRADITIONAL OPTIONS 

Brat DHflnos Saptmbar 12 Expiry 

LaRDsaflngs SapMitbor23 Satdomant 


Dwwrtar 8 
Decambar 22 


Cato: W anfcalm. Bunarah Caatrol. On lo o rtai im . Cana MnaMaon, DMaton, Magnum 
Powar, Nnan Has, Todpola Taoh, Wavarlay Mng. Puts; Lucan Wk, Wwartay Mnfl. 
Puts & Cato; Nawr Raa, SraHhKRna Boaohanr A. 


LONDON RECENT ISSUESs CQUTTTES 


Fiat Dtv. Ora FYE 


280 19 27* 30 
300 616H 26 

200 16* 21* 27* 
300 «M 12 19 
180 19U2SH 80 
200 0 15 18* 


3 10* 18 
13 20H 28 
2 BH 13 
10 20* 22* 
IH 6 TO* 
8MH 19 


P 

up 

ffmJ 

Hfah 

Low Stack 

P 

+/■ 

dv. 

cow. ytd 

irat 


FJP. 

aw 

89 

78 Ban G Sftn WH 

79*3 frllj 

_ 

_ 

_ 

• 

100 

FP. 

in 

102 

95 Baaoon bw Tat 

95 

c 

- 

- 

- 

- 

- 

KP. 

1/48 

48 

39 Do. Warrants 

39 

-4! 

- 

-a 

- 


- 

FP. 

1-30 


1 Conti Food* WS 

1*4 


- 

- 

- 

- 

- 

FP. 

31.5 

94 

89 INt/ESCO Jpn »*c 

90 


- 

a. 

- 

- 

-a 

hP. 

329 

ea 

42 Do. Warrama 

47 


- 

- 

- 

- 

a. 

FP. 

a 

77 

81 JFF1 Japan Vttta 

81 

-1 

- 

- 

- 

■ 

- 

FP. 

27.1 

67 

36 ^Mognum Power 

85 


- 

* 

- 

- 

23 

FP. 

iaa 

31 

20 Ort*. 

29 


- 

- 

- 

• 


FP. 

am 

17 

5*2 PwittwrVWrta. 

17 


- 

- 

- 

> 

- 

FP. 

0.82 

40 


26 


- 

aa 

- 

- 

- 

FP. 

3.85 

44 

33 Stdar Wrta BH04 

33 

-1 


- 

- 

- 

100 

FP. 

3P1 

105 

97 TR Euro GHi P*o 

105 


- 

- 

. 

• 

- 

FP. 

222 

35 

29 Topa Esta Wrta 

Sfi 


- 

- 

- 

- 


1*4831 
Scat taw 

ran 

Sam 

mo) 

tatta 
raz7 j 
lanrac 
H48) 
Han EM 
(1922) 

TS8 
T221 ) 
Tflrtta 
f228 ) 


180 BH 12 18 4 11 13 

200 IH 4H BH 21 25 26H 

130 5 13 16H 3* 7 11H 

140 2* 6 « BH 14 17 

480 39 42* S3 3 16 21 

900 5Z1HXZH 22 34 40 
360 25* 30* 45* 2H 12* 16 
390 6 23* 28* 15* 25* 30 

110 BHIIHWH IH 4 5H 
T20 2* 5* 5* 5* 9 11 
220 11* 18 W 3 BH 14 
240 ZK IftlOt 13 21*25* 

140 9 15 19H Ot M 12H 

160 1* 7 11 18 22* 25 

1000 34* 86 84 9 29 45 

1050 > 41 37* 35* 54* 70 

220 6 IBH 21* 5* 11* 17* 

240 IH 8 12* 21 24 20* 


RIGHTS OFFERS 

tea Amount Latest 


prtM 

p 

paid 

up 

Reran 

data 

1 

Mph 

360 

ra 

21A0 

48pm 

252 

w 

11711 

34pm 


29pm EMAP 
28pm W*r 


Qoebrg +or- 
prioe 

P 

29pm -1? 
28pm 


Tortta 220 13 22 25* 2H 7.12* 

C229 ) 340 3 11H 15H 14 18H 23 

WtaoBM 650 44 70 8BH 5 23H34H 

(WS) 700 12*41* 91*26* <7 5B 

Opto Pet Jan Apr Oct Jm Apr 

Sat) BOO W 37* 51 33H 47 80* 

ran) sso 4 zoszhtsh si 93 

nC7S|0i 700 62 87 in 17 35 55* 

(738 ) 750 33 82 80 30 59H 80 

hM 487 21* - - 15 - - 

r+91 ) 500 15* 30* 42 21* 30*38* 

Opto to tab to to tab to 

WWtaa 180 14 19 23 B 12H IB 
<184} BOO 6 10* 14 21H24H 28 

' undafttnp aaeurtw prtca Piaufema inmn m 
bflM d on ofcalna rAv pria i . 
SpptnmbprlSTotaJ wmtt 55. IM Cte 

asjui pu* aana 


FINANCIAL TIMES EQUITY INDICES 

Sap IS Sap 12 Sap 9 Sep B Sap 7 Vrapo -Woft law 

Ordinary Share 242&5 2426.3 242B.6 2454J 2475.7 2354.1 27196 224ft( 

dd. dfv. yteid 42.4 42A 4.19 4.15 4.12 356 4j48 XK 

E*n yfct * ftil a04 6,04 8JJ3 5J8 5.93 4^6 (L04 OX 

PIE ratio net 17.68 17^8 17.73 17^9 16JM 27,42 3X43 17.« 

P/E ratio rd 18.28 1&27 18L32 18.49 1063 2551 3080 1021 

-For 1894. Omnpty Bhn into ahroa ca n y dalo n. rto 2713-6 SKOM: law 4*4 9OI8M0 
FT Ordnary torn Indax bau tor .1/7/85. 

Onflmry Sham hotair ohangaa 

Opan too 1000 11J0 12J0 13J0 14J0 1SJ0 16L00 Wgh Law 
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Sepia Sr> 12 Sap 8 to 8 to 7 Yr age 


SEAQ baigakw 26 . 088 

Equity turnover (Em)t 
Equity batgainsr 
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(Cxctudno tana+Mrtat ixataMa and i 


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1363.6 ia06.fi 

30^07 31X62 

568J S26.0 


FT GOLD MINES INDEX 



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PtetaoMaer BoM Mtaaa hataa: Sap 18s 2732 ; data chwqc +L1 petea: Yaw bok 14M T tantat 
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THE TOP 

aiHMOUNniES SECTION 

for senior management positions. 
For advertising information call: 
Philip Wrigley 
+44 71 407 8733351 






FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 


LONDON SHARE SERVICE 



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CURRENCIES AND MONEY 


MARKETS REPORT 


POUND SPOT FORWARD AGAINST THE FOUND 


Canadian dollar firmer 


The failure of Quebec 
separatists to win a convincing 
mandate in weekend elections 
helped the Canadian dollar to 
its highest level in eight 
months yesterday, writes 
Philip Cawitk. 

Although the pro-sovereignty 
Parti Quebecois (PQ), scored a 
solid victory in the provincial 
elections, the smaller than 
expected margin of victory was 
seen as diminishing the pros- 
pect of Quebec seceding. 

The Canadian dollar closed 
in London at C$1.3534 against 
the US dollar from C$1 -3653 on 
Monday. Currency dealers said 
the Bank of Canada had inter- 
vened and sold Canadian dol- 
lars for dollars when the cur- 
rency had broken below the 
C$1.35 level 

The dollar, meanwhile, bene- 
fited from firmer bond prices, 
following a fairly benign US 
consumer prices report. It fin- 
ished in London at DM1.54S3 
from DM1.5435. Against the 
yen it closed at Y99.045 from 
Y98.985. 

The D-Mark was generally 
weaker in Europe, with the 
market realising that the polit- 
ical risk in the October elec- 
tions is higher than previously 
anticipated, rt finished at 
FFr3.421 against the franc, 
from FFr3.425, and L 1 , 0 13, from 
L1.017, against the Italian lira. 

Sterling traded firmly after 
Monday’s 50 basis point rise in 
interest rates, although it lost 
ground In the afternoon 
against the firmer dollar. It fin- 
ished at $1.5613. after briefly 
trading above $1.57, and at 
DM2.4189, after trading above 
DM2.42. 

■ Analysts said the strength 
in the Canadian dollar - which 
looks to be breaking a three- 
year downtrend against the US 
dollar - was partly a knee-jerk 
response to the election result, 
and partly a case of it making 
up lost ground. 

Other “commodity'* curren- 
cies, like the Australian and 
New Zealand dollars, have 
strengthened this year on the 
back of the improved outlook 
for commodity prices. The 
Canadian dollar, however, was 
held back by political uncer- 
tainty. 

Mr Tim Stewart, currency 
strategist at Morgan Stanley in 
London, said with the Quebec 


Canadian dollar 

Against the U5S fCS par US$ 

— 


1.38 —I* — — 


IXS* 2 * 1 * 

Aug 1984 Sep 

Sowok FT Graphite 

■ Pound In H— Ygfc 

Sea 13 — Latest-— -Pre». cte»- 

Eapol 1-5620 1-5705 

1 mth 1.5612 1.5885 

3mtti 1.56M 15675 

1 H 1.5488 1-5645 

issue partially resolved - at 
least in. the min<t of the market 
- the currency had made up 
some of the lost ground. He 
predicted that it would proba- 
bly establish a C$L3450 - L365Q 
trading range, compared to the 
C$1-375Q-L3950 so far this year. 

Mr Adrian Cunningham, 
senior currency economist at 
UBS in London, said the elec- 
tion result was good for the 
currency to the short term, but 
he r emain ed cautious over the 
longer term. “Now that you 
have the PQ to negotiations at 
the federal level it may be that 
much more difficult for the 
government to achieve the 
budget cuts it seeks." 

Wood Gundy economics, part 
of the Canadian Imperial Bank 
of Commerce group, com- 
mented: ‘'While today's victory 
for the PQ will provide them 
with a base from which to 
build support for sovereignty, 
we believe that markets will 
judge referendum prospects as 
s ufficiently distan t and uncer- 
tain as to not preclude a return 
to fimdsinenbiTTy driven mar- 
kets, with narrower Canada-US 
interest rate spreads and a 
fi rming Canadian dollar.” They 
predict C$1.3420 at the end of 
the year. 

■ Sterling appeared to be the 
beneficiary of Monday's rate 
rise being seen by the market 
as “pre-emptive”. Mr Brian 
Durrani, economist at brokers 
GNI. said it had been “a rare 
UK occurrence, a rate hike not 


provoked by turbulence in the 
foreign exchanges” 

“The UK. authorities appear 
to have pulled off something 
the Fed has been trying all 
year to achieve - namely a pre- 
emptive rate hike,” said Mr 
Durrant 

One pundit cautioned 
against the market getting car- 
ried away, noting that “ster- 
ling/D-Mark has been trending 
lower since I was born.” 

But Mr Chris Turner, cur- 
rency analyst at BZW. said 
there were various reasons 
why sterling should do better 
than the dollar did, when US 
rates were first raised in Feb- 
ruary. 

These included UK real rates 
having Jess to rise before “neu- 
trality” is achieved; the UK 
output gap being larger, reduc- 
ing the chance of the Bank 
being seen to be “behind the 

g amp ” mm hatting inflation; 

and the market was also much 
less b ullish about sterling -in 
the first place. 

Mr Stewart of Morgan Stan- 
ley said he thought sterling 
could reach DM2.45/2^0 in the 
next few months, especially if 
the D-Mark weakened ahead of 
next month’s elections. 

■ Short sterling staged a 
recovery after a bout of pessi- 
mism in the Immediate after- 
math of the rate rise. The Sep- 
tember contract rose by seven 
basis points to 94.14. while the 
December contract was up by a 
similar margin to 93.37. 

The market clearly believes 
that Monday’s rise in rates was 
only the first of many. It is still 
discounting short term rates 
above 6.6 per cent at the end of 
the year, and at 8.7 per cent in 
December 1995. 

The Bank of England pro- 
vided UK money markets with 
£329m assistance, at the new 
established rate of 5% per cent, 
after forecasting a £300m short- 
age. Overnight money traded 
between 3 and 5% per cent. 

In the cash markets three 
month money LIBOR traded at 
5 3 per cent, from 5% per cent 


Bump* 

Austria 

Belgium 

DdrVnark 

Finland 

Franc* 

Gemapy 

Oram 

Mnl 

Rtfy 

Luxembourg 

Kethwunds 

Norway 

Portugal 

Spain 

Swe d e n 

Swteeriml 

UK 

Ecu 

SORf. 

Americas 

Argentina 

Brad 

Canada 


Oaring 

mtdpdra 

17.0288 
PT) 48X023 
(DM) 8-55 18 

<FM) 7.7848 
CPftJ 02728 
LOM1 641B9 
(D1 364466 
0Q. 10152 
CJ 244082 
(lA) 400023 
« 20142 

P*r) 10.6187 
£4 240522 
(Ptt) 200661 
(SKr) 11.7338 
{SFl) 2.0171 


Change Bfctfoffer 
on day spread 

+0X478 183 - 321 
*0.1648 803 - 243 
*00318 471 - 684 
+0.0277 758 - 939 
+00137 700- 7S2 
+00072 180-197 
*1.088 240 - 670 
-00003 144 - 189 
-029 874 - 109 
+01848 803 - 243 
+0.0094 130 - 154 
+00246 164-223 
♦0854 328-717 
+0489 479 - 622 
+00271 281 - 415 
+001 180-182 


Day's MW One month Tine months On* year Bank of 
rtflh taw Rate XPA Bria %PA Rata *PA Eng, Ww 

17.0712 109906 17X211 0J3 17X093 04 * • 1102 

19X480 406820 408223 -OS 407573 04 406123 06 ”08 

05628 05378 05565 -08 9X789 -IX 9X183 -07 1103 

7X310 7.7600 - - - . . S4X 

03018 8X666 02729 OX 8X754 -0.1 82291 05 1104 

2.4264 2.4124 2*176 OX 04147 07 2X857 1.4 1282 


0.1 1X163 

-09 2488.(7 
-05 407573 
08 27096 
OX 108217 
-04 281.432 
-23 201X66 
-IX 11X003 
.1.8 20083 


-04 1X209 -08 

-3.0 2534X2 -04 
04 405123 OX 
07 2XT8 IX 
-Ol 108241 OO 
-40 

-22 204X48 -2X 
-03 12X138 -2.4 
1.7 1X73 22 


- 0940050 


+0003 678 - 685 1X722 1X673 1X684 -02 1X687 -02 1X869 Ol 


Argentina peso} 1X601 
Brad (Rfl 1X380 

Canada (CO 2.1129 

Madeo (NewPeeri 5X294 
USA (S 1X813 

Paetflc/MWdta EastfAMca 
Australa CAS 2.0969 

Hong Kong (HKS) 100639 
India (Raj 4497S5 

Japan (Y) 184X34 

Malaysia (MS) 3X871 

New Zealand (NZ39 05900 

Phbpplnes Peeo) 40X829 
Sauefi Arabia (SR) 5X854 
Singapore (SS) 2X224 
S Africa (Cam) (R) GXS07 
S Africa (Bn.) (R) 7.0022 

South Korea (Won) 1249X4 
Taiwan (T5) 409169 

Thailand (Bt) 39X848 

tSOfl iWea lor Sap 12. Bk*ritor apa 
mutest but era ttritad by ounent Mm 
tue art tm Drier ^et Hta Mm 


-00018 898 - 804 
+00082 362 • 388 
-0X204 122 - 138 
+0X104 246 - 341 
-00013 810 -615 

-0X028 059 - 979 
-00098 612 - 668 
-00407 647 - 882 
-0036 570-898 
-00013 857 - 885 
-0X015 874 - 928 
-00341 421 - 236 
-0X048 541 - 568 
-00078 212 - 235 
+00032 486-527 
-00012 855 • 189 
-1.19 880 - 967 
-00384 063 -254 
-00324 704 - 385 
bt ffw Pound Spat e 


1X711 1X583 - - - - - 

1X538 1X3S5 - - - - 

2.1481 21103 21124 03 21118 OX 21106 Ol 

5X621 5X233 - - - - - - 

1X720 1X604 1X604 07 1X584 07 1X456 IX 

21185 20952 2X969 OX 20982 -OX 21183 -09 

121468 120591 1206 04 120569 OX 120659 OX 

49X100 48X540 - - - - - - 

155.780 154X40 154X39 3.1 153X34 3.4 148X69 4.1 

4X105 3X853 - - - - - - 

2X087 2X884 25939 -tX 2X017 -1.8 26239 -IX 

41X268 407410 - - - 

8X9*3 5XS24 - - - 

2X420 2X211 - - - - - - 

5X809 5X488 - - - 

7.0288 6.9852 - - - - - 

1257X0 1348.79 - - - - - - 

41.1986 40X965 - ■ - 

39X450 38X700 - - - - 


thaw any me tee ttnt detenu ptecee. rn r— td ala am oot dbecfly i 

cdnaWBd by taaBanhot Banana BMa awra ge 1995 miO>rid.O— readied 

«S CUOSNQ S>OT RASES. Same <4u era nelM by be F.T. 


DOLLAR SPOT FORWARD AGAINST THE DOLLAR 


Oaring 

mid-paint 


Change BJd/offer Day's raid One month Three months one year J-P Morgan 
on day spread Mgh tow Rtee HM Bate SPA Bate %PA Index 


Roland 

France 

Germany 

Greece 

Wend 

Italy 

Luxembourg 

Motherlands 


■ OTHER CUR HBMCa g 

Sap 13 £ 

Hongay 166671 - 10.753 Id 
ban 2728X0 - 273000 17 

toe* 0.4626 • 04645 0 

Ward 35817.1 - 358755 22 

Ruria 351450 - 353000 72 

UAE 5.7288 - 5X404 3 


101740 - 106790 
174100 - 175000 
02970-0375 
229410 - 228756 
2251X0 - 2261X0 
3X710 - 3X735 


Switzerland (SFi) 1X920 
UK (£) 1X613 

Ecu - 12312 

SOflf - 1X6629 

Argentina (Peso) 09993 
BrazS (Rq 00570 

Canada (CS) 1X534 

Mexico (New Peso} 3.4135 
USA (5) 

PadSc/Mdde EaaVAMca 
Austraba (AS) 1X431 

Hong Kong 08C 5) 7.7271 

India (Hs) 31.3700 

Japan (V) 89X450 

Malaysia (M S) 2X538 
New Zeeland (NZS) 1XS90 
PMp pbea (Pen) 28X500 
SnudiAtriJia (SR) 3.7504 
Singapore (SS) 14875 
S Africa (CcmJ (R) 3X668 

S Africa (Rn.) (R) 4X860 

South Korea (Won) 800150 
Taiwan (78) 28X078 

Thailand (Bt) 24X700 

TSOfl rate tor Sep 12. Btttafler spreads 
but are Implad by cuient Mnente. 


+00396 025 
+0.132 900 
+4X0252 180 
+010219 813 
+0X1X2 979 
+0.0058 490 
*0X 900 
-0X006 270 
-OX 870 
+0.132 900 
+00075 380 
+0X214 010 
+0X5 800 
+017 430 
+00236 119 
+0.0076 915 
-00013 610 
-0X038 310 


-0.0003 992 
+0006 660 
-0X119 531 
+0X035 110 


-0.0006 428 - 43S 
+0X002 266 - 278 

- 675 - 725 
+0X8 200 - 700 

+0X013 533 - 543 
+0X005 576 -603 

- 000 - 000 
+0.0001 502 ' 506 
-0X037 870-880 

+0X05 545 • 560 
+0.003 750 - 950 
-0.1 000 - 300 
-0X015 065 - 090 
- 650 - 750 
> In the Drier Spot table 
UK. Htmd & ECU m c 


076 10X170 
080 31X360: 
200 6.1210 
913 4X913 

995 5X085 

496 1X511 

100 238.100 i 
388 1X483 

970 1573.05 
080 31X350: 
390 1.7390 

030 6X055 

000 158X00 
480. 128.720 
194 7X225 

925 1.2940 

615 1.5720 

313 12377 


0X993 0X992 
0X650 0X560 


1X486 1X414 
l 7.7276 7.7266 
! 31X725 31X675 
> 992000 96X800 
2X547 2X520 
1X814 1X581 
28.4500 26.1000 
3.7506 3.7502 
1.4910 1.4880 
3X565 2 5425 
4.4950 4.4850 
«y y> -y tn ryy ry yi 
mw m 282090 
24X750 24X650 
e draw only die leet oac 
coated e US currency. 


10X05 

OlO 

10X048 

0.0 

1083 

07 

104.4 

31X04 

-OX 

31.929 

-04 

32X29 

-0.4 

106.0 

6.1248 

-IX 

614*5 

-1.7 

62217 

-1.7 

1Q*A 

4X863 

0.0 

4.9933 

-06 

5X413 

-1.1 

79X 

5X015 

-ox 

13085 

-08 

5274 

05 

1067 

1X494 

-0.1 

1X494 

0.0 

1.5433 

0.4 

107.1 

Mai 

-IX 

236325 

-IX 

239X75 

-IX 

661 

1X374 

ox 

15344 

ox 

1.516 

1.4 

- 

1573X5 

-36 

15837 

-37 

18392 

-4X 

714 

31X04 

-02 

31X29 

-04 

32.029 

-0.4 

106X 

1.7386 

-Ol 

1.7386 

OO 

1.7331 

03 

1018 

5807 

-OX 

6827 

-IX 

6X995 

-1.4 

961 

15665 

-17 

162X28 

-112 

1669 

-17 

914 

12677 

-2X 

1204 

-38 

132X06 

-30 

81.0 

7X322 

-28 

7X707 

-28 

7.7632 

-33 

804 

1X909 

1.1 

12887 

IX 

12765 

12 

1064 

1X604 

07 

1X584 

07 

1.5488 

1.0 

87X 

1X303 

OX 

12284 

QX 

12202 

09 

: 

1X839 

-04 

1X552 

-OX 

1X854 

-09 

832 

3.4145 

-04 

3.4163 

-03 

34237 

-03 

. - 

- 

- 

• 

- 

• 

- 

919 

1X434 

-02 

1X441 

-03 

1X514 

-OX 

872 

7.7289 

0.0 

7.7276 

OO 

7.7426 

-02 

- 

31,455 

-XX 

31.6 

-39 

• 

- 

- 

98X45 

24 

98396 

28 

96 

31 

1468 

2X448 

4X 

2X333 

32 

26068 

-2.1 

- 

1X6 

-07 

1.8618 

-07 

1.6671 

-OS 

- 

3.7517 

-04 

3.7566 

-06 

3.7744 

-06 

_ 

1X862 

1.1 

1.4843 

09 

1X778 

07 

_ 

3X706 

-12 

3X991 

-4.9 

3X756 

-34 

- 

4X187 

-OO 

4.6775 

-62 

. 

. 

- 

803.15 

-4X 

BOMS 

-32 

625.15 

-31 

- 

262278 

-OB 

2&287B 

-09 

- 

. 

- 

210428 

-35 

a.17 

-32 

2165 

-2.7 

- 




i«55 

5s 

a 

■Ml 








mPMIw 

As 

I. 1 ' 1 

r~r* 


•e dnod ptecee. Fenmrt iWae are nor riecay quoted id rite market 
4P. Urgan noami McasSap 1* Beae orange 1880-100 


CROSS RATES AND DERIVATIVES 


EXCHANGE CROSS RATES 

Sep 13 BFT DKr F9 


EMS EUROPEAN CURRENCY UNIT RATES 


Brighan 

Denmark 

France 

Germany 

Ireland 


Switzerland 

UK 

Canada 

US 

Japan 

Ecu 

DBntfl Kroner, 


(8ft) 100 
iDKr) 5214 
(J=Ff) 60X0 
(DM) 20X0 
0Q 49X6 
(L) 2033 
(HJ 19X5 
(MO) 46X4 
(Ee) 2020 
(PM 24X4 
(SKr) 4246 
(SR) 24.69 
(£) 49.90 
(CS) 23X8 
(S) 31X0 
(YJ 3221 
39X7 

French Rene. N«m 


16X1 4X55 

8.661 2532 

10 2923 

3.421 1 

8.150 2X82 

0X38 0.09 a 

3X48 0X91 

7.796 2279 

3.358 0X81 

4.126 1X08 

7.0S2 2081 

4.101 1.199 

BX72 2418 
3X17 1.146 

5X99 1X49 

5X51 1X84 

8X24 1X07 

, and 0 * eC Kili Kroner 


Sep 13 

Ecu cen. 

Rate 

Change 

%+J- front 

% spread 

Ok. 


rata 

aorinstEcu 

an day 

can. rate 

v weakest 

bn 

Nethertende 

219672 

214701 

+0X0272 

-228 

147 

. 

Belgium 

402123 

39X047 

♦0X42 

-201 

120 

15 

Germany 

1X4884 

1X1454 

+0X0208 

-1.B0 

4X8 

• 

Ireland 

0X08628 

0X03833 

-0X02581 

-058 

669 

4 

France 

653883 

6X8287 

+0X038 

021 

288 

-2 

Portugal 

192X64 

191041 

♦OIOS 

1.13 

1X3 

-8 

Danmark . 

7/43879 

7X5948 

+0X048 

1X5 

1/41 

-11 

Spain 

154X50 

156009 

+0043 

109 

0.00 

-22 

NON ERM MEMBERS 






Greece 

284X13 

291/489 

♦0148 

1019 

-045 

- 

Italy 

179319 

1843X0 

-262 

640 

-4X1 

_ 

UK 

0786749 

0791324 

-0X04234 

058 

249 

- 



n-«aew 

ua Off 
is o* 

2.73 Off 
Z.B2 OH 
i3i or 


sea 

aria 

3.198 

sea 

MIS 

UM 


<a ini is 


P«r id; tapert Franc. Yen, Eecudo. Uia i 


■ D-MARK FUTURKS (IMM) DM 125X00 per DM 


1 (MM) Yen 125 per Yen 100 


Open 

Latest 

Change 

High 

Low 

EaL vri 

Open bit 


Open 

Latest 

Change 

High 

0.6482 

06452 

-0X034 

0.6510 

66449 

81X74 

77.713 

Sep 

1X099 

1.0090 

-00009 

1X118 

08478 

08458 

-00029 

0.6510 

06460 

38X58 

52X06 

Dec 

1X167 

1.01 57 

-0.0009 

1X183 

0.6)92 

68470 

-00025 

08492 

08470 

125 

3,175 

Mar 


1.0242 


1.0242 


BaacentarabceeribyBseBtai— nCnn eitee u n.Q«rcnctaeare>tcleBociring r riri«eabangd>. 
Pa n entegechangeaen tarEat eporite+dwioedcnceneaweahogrency. C tatf e na showethe 
iwb bw wi cno epieade; die pecan dWcrence be t wee n' ffe ncturi raerkw md Ecu cmaw reset 
tar a eurmey. and ffia nwtewi peromad pereentege Hadrian Of the currency** frarket me bam to 
Ecu cenU rate. 

p78ffBS) Stedtag and Beam lbs eutpended bom BM. Adaermera modeled by d» ftoencWTknee. 
■ PWLAIMCLMAM C/8 OFTMdM E31X80 (centa per pound) 



■ SWISS HWfC FUTURES QMM) SFr 126,000 per SFr 


Sep 

67705 

0.7740 

■00043 

0.7816 

Pec 

67798 

0.7781 

-0X038 

0.7833 

Mar 

- 

67850 

-00028 

07830 


INTEREST RATES 


MONEY RATES 

September 13 Over One Three 

night month mtha 

Belgium J-e SJ 54 

week ago 4T» 5i Stei 

France 54 54 5>b 

week ago S3 54 59h 


mtha year 


One Lamb. Dte. Repo 


Belgium 

week ago 
France 
weok ago 
Germany 
week ago 
(round 
weak ago 
Italy 

wok ago 
Netherlands 
u«ek ago 
Switz e r la nd 
week ago 
US 

week ago 


week ago 2)1 

■ S LIBOR FT London 
Interbank Fixing 
week ago 
US Dollar CDs 
week ago 
SDR Linked Da 
week ago 


*■■• 54 54 554 84 7.40 4X0 

47. 5i Ste. 53 64 7X0 4X0 

54 54 5k 53 64 5-00 — 6.75 

S3 S4 594 6 Q Bi 5.00 - 8.78 

4 97 4.95 4.95 5.10 645 8X0 4X0 4XS 

5.03 4.95 4.95 602 5X3 6X0 4X0 4X5 


IQ wmWB (IMM) 282X00 per£ 

1X890 1X630 -0X088 1.5718 1X828 18X81 27.968 

1.6868 1X816 -0X068 1.5690 1X604 25,727 22X46 

. t sum . 1 enan + <M+n a <.0 


; MOWTH QUBOMAML WTWQMt QJPF^* DMlm pdrrta o( 100% 

Open Sett price Change Wgh Low Eat vtrf Opm Jnt 
94X7 94.99 +0X1 94,99 04X7 10447 128090 

94.78 94X1 +0X2 94X2 94.76 2200S 179213 

94.41 94X3 +0.01 94.48 94X8 14078 188373 

94.04 94X8 +0.02 94.07 93X9 20785 104603 

I MONTH BWOUHA IKTJiATE HJTUHS9 gJFFE) LlOOttn prints ri 100% 


Strika 

Price 

S«P 

- CALLS - 
Oct 

Nov 

Sap 

— PUTS 
Oct 

1-450 

684 

674 

675 

• 

- 

1X78 

6X4 

6X6 

6/49 

- 

003 

1X00 

685 

4X9 

4.43 

- 

025 

1X25 

1X0 

224 

272 

008 

0X4 

1X80 

0X9 

0X6 

1X3 

1.14 

204 

1X78 

- 

n v> 

074 

643 

3X4 


9 % 10 % 

93 10‘ 


■1.84 4.98 
or-* 33 


5!» 63 63 

SVi 63 6 ft 

B4 BV, 9% 

83 83 93 

4.98 5.05 5.19 

4.98 602 5K 

33 +4 Ai 

33 43 4% 

43 5 63 

43 43 5* 

2tt 2% 23 

2 Vi 2% 24 


4.65 4.84 614 671 
4.85 4XQ 607 5X8 


- 8X5 

- 6a 

7.50 646 

7X0 645 

6X5 



Open 

Sent price 

Change 

High 

Low 

Eat vri 

Open (nL 

Sep 

9120 

91.18 

+009 

9120 

91.11 

2701 

18779 

Oec 

89.72 

68X2 

+022 

89X5 

88X8 

5880 

32558 

Mar 

8603 

8822 

+021 

8922 

8601 

2011 

19461 

Jun 

8683 

8682 

*022 

8681 

88X2 

1030 

14713 


Prerioue da/a *gt.. Crie 9XB4 Pum HAST . Rw. <tay\<aMn W. Oris 8069M hn OtM.143 


UK INTEREST RATES 


LONDON MONEY HATES 

8ep 18 Over* 7 .days One Three Sbt 

night nolicd nwrrili monlha nkiiXw , 

bffertiwtk Storing 64, - 3 8^-54 6ft - SH « * 6ft 8d - 8 . 74 - 7 

StafingCO* - - «-5\ 5S-6A Si -6 7-6^ 

Treasury B*s - ffl-53 A-*3 

Bank Bis - - 5& S& - BU 6-6)1 

Local authority ctaps. 5i - 4tf 8i - 4l] 4|J - 6% - 5^ Sfi - SN 

Dbccuit Market deps 4li - 6 1 * - 5** 


BUSINESSES FOR SALE 


Appear in the 

Financial Times on Tuesdays, Fridays and 
Saturdays. 

For further information 
or to advertise 
in this section please contact 

Karl Loynton on +44 71 873 4780 or 
Lesley Sumner on +44 71 873 3308 

| FIIWfCMXTlW J 


E MONTH WHO i 


I HMHC FUTURES (UFFQ SFrtm prints of 100% 


44 

♦a 

6025 

650 



Open 

Sett price 

Change 

H&i 

LOW 

Est vri 

4 Mr 

4Sb 

6826 

3X0 


Sep 

95X0 

85X3 

♦0.04 

95X8 

95X0 

4833 

64 

5ft 

- 

4.00 

_ 

Dec 

96X5 

95X8 

+0.04 

9160 

8148 

7188 

5M 

sa 

- 

4X0 

_ 

Ms- 

95X8 

9118 

+0X2 

9520 

96X6 

1621 

2i 

31 

- 

1.75 

- 

Jut 

94X0 

94X5 

+0.03 

94X0 

94X0 

778 


IW —DOTH KCU PUTUH 

Open Seaprics 
94.04 94.08 

8644 8648 

92 X 4 82 XS 
82X1 82X5 

i bAra traded or ART 


E8 (LffTg Bculm points of 100% 

Change Mgft Low Eat vd Opwi w. 
+0.04 94X8 94.02 917 8110 

+0X4 93X9 9343 1318 8860 

+0X1 92X8 82.90 637 4745 

+Q.Q2 92X5 92X0 286 1881 


UK dritlng bonk base lending trie 5^t per cent tram September 12. 1994 

Up to 1 1-3 8ri g.12 

month month OffartlA r wnft i months 

Carta of Tax dap. (C100XOO) I'z * ^ ^ 3^ 

Cats ri TM dee. mam Cioaxoo Is liMtOeocrits ridriwen tar aril 4rpa. 

AM. tandwra»efriW0u«5X9«0pe. KXSO «Mdiel» 8 BB. Bqanrl Ftwnoe Mdwi^dtar AUB31. 
ISO*. Agreed rare tar period Sep 28, 199+ to Oet 26199*. ScbMN ■ & B oaipa FMWti rate far 
pariod Sir sa 1994 to Aufl SI, >884. ScfMmai IV • V SX78pe. FSwxse Hern Beer Me 6>zpe tan 
Grp 1, 1904 


! MOUTH STMLaW RITIIIIB (Uffg) ESOOj)O0 pointg of 100% 


ECU United Da irid rates; i mdr S'.i. 3 iWh* Site; 6 mtlta: flit; 1 year 83- * UBOR Wrtwk Un 
ales Jffe olWrM atm tar StOm quaHd to Bte ma r k* t^r tar letarenc e birta at tlam eecfl working 
■to. Tba banka ora; Borteen T>iru. Bom (rt Tttgo. Bwdqrn end Nadoftal WtabnlnalW. 

Md rata aw etam tar the dommdc Manty Ran US 3 CDs and SDR Unkrt Depcrta (Oat. 

EURO CURRENCY INTEREST RATES 

Sep 13 Short 7 cfciya One Tlmg Sfat One 



Open 

Sett price 

Change 

Ugh 

Low 

Sep 

94.10 

94.14 

+0.07 

94.15 

84.10 

Dee 

9632 

9637 

♦607 

9638 

9630 

Mar 

92X3 

92X9 

+0X9 

9660 

92X0 

Jun 

91X8 

82.08 

+0.11 

62X7 

91X7 

Traded en APT. M Open bneraet tge. 

an tar prevtciu day. 



m TW— OWHHWBOtUB(iim) Sim prints of 100% 


BeJgon Franc 
town Krona 

D-Mark 
Dutch Guilder 
French Franc 
Portuguese 6 k. 
Spore!; Peseta 
Sterling 
Swiss Franc 
Con. Dollar 
US Dollar 
Italian Ire 
Yen 

Asun SStng 
Short term rates a 


Short 

7 days 

One 

Three 

trim 

notice 

month 

months 

4a • Jii 

S-4% 

SJ«-8 


5% 

53# - S*a 

53. -54c 

83b - 53+ 

6*. 

9% 

S-4?a 

5-4% 

5.4% 

5ft 

-a 

5-4% 

5-4* 

5-4% 

9ft 

*a 

■ 6*4 

5ft - 5ft 

5>2-5% 

5% 

a 1 * 


12% • 11* 

7,i - r 1 * 

5-4% 

3 h - 3% 
S,'. - + 7 s 
4ii - 

3 - 7h 
2U - 2A 
3% -3^1 


10 - 9*2 lift 

7»2 ■ 7A -fit 

5 A - 5 ,‘. SI 2 
3 B- 3 S 33 
5^4 - 5 It S»* 
4JI-4ti 

a>* - 8 aa 

2U-2A 2H 

i US Oofcr end Yen. 


10^1 11*8 
7A 73 
U 5JJ 
3!1 4,', 

4% 8 { t 

*A 

2jJ 2% 

4ft 

offiais; brad 


7\ 8ft - 5'a 
Bli 9ft - 6ft 
33 4ft. 4ft 
Sh 53-511 
43 5^.5I| 

«ti 

3ft 23-211 
4H 6ft ■ 3ft 

m’ ndbeo. 


One 

6ft ■ eft 

m - 7ft 

6ft - 6ft 

W -5ft 
• 6ft 
nia ■ ii 
83-84. 
7*a - 7 
«(4 - 4ft 
lft-84. 
53-5» 
115* - 1044 

Bli - S3 



Open 

Latest 

Change 

Hgh 

Low 

Sop 

94X2 

94X3 

+0.01 

94X3 

94X1 

Dec 

9425 

9428 

+601 

9429 

9420 

Mar 

93.86 

9688 

■ 

93X0 

9684 


■ SHORT ST««Aia Orinoia (UFFR *Sq0X00pota»ri100% 


■ US TWA3UKY BIU. PUTUWES QMM) Sim per 100% 


Sep 

95X7 

9140 

+0.03 

9140 

95.37 

2X85 


Deo 

94X1 

94.84 

+0X2 

94X8 

84.79 

1X05 

11,428 

Mar 

94.40 

94.40 

- 

94.42 

9438 

391 

5209 


Strike 

Price 

Sep 

“ CALLS - 
DBS 

Mar 

Sep 

- PUTS - 
Dec 

Mar 

9400 

615 

0X3 

0X2 

0.01 

606 

1/43 

9425 

0 

601 

601 

0.11 

0L89 

1.67 

0480 

0 

0 

a 

630 

1.13 

1X1 


I 

iX/lian To meet traders' needs Jot maitet I 

vYlldl VUU andtratfiaggtrat q gt nfof iiaUon.rie - 

j ji creatteoffflotnAcooiutttnibgtit 1 

are trading ■ 

Pi aotecriptkmtoRitafeaBaffiiiiB, JJ 

luiures On ^tradbggaide&wthticM^ I 

you beconai. more aoccessfttl ■ 

mine Arrm bate. You also law access to I 

JUUr UWIL wvesainiretelepftoMTiotftjes,* 1 

, „ . ' with daily market analysis and I 

information JSssSf™ 6 ” j 

K * Q 1901*17’ To meet tadera 1 needs for mbnna- ■ 

H Vu V tionibout the types rf orders tiad ( 

11 Iwr to pbtetbeaifffe wrote *(Wer a 

' VSU118NP nacemwtMadoEafljf.-iriap-hy- I 

VOIUOWIC guide to ti» process. Aod we ! 

jwwm-.. LJ 1 *i mate sure the profeasitfflsls moot I 

commo n Try . w(w>Mn«iii.ii«i* 

TV matoffl and hdpthafs right fcriuu 

— ‘ -IhmiVaBdngywithro^h'lHw 

We baw been serring ftrtures tradere 
since 1866-so lie knotr what Wnd 

you need to start tndliig 

^estabtebedfteinostcorapre- onjourwa-phafiO-tOXcoumig- 

Hate sure they g et iL close look at Liad-WakteW 

— omm4 72^T 

me* St 

” MgfewnB-IUMI 

OananrSIPMUlOO 

“ gSSftra 

BK+Wt+dl 

S3S3: SS®*— 

lm d^do^^ompahy 


Ex. vri. ori. Gab 22189 Puta 7095 fartoua d a/a open bit. Grid 357518 Pun 3)4637 


« opra mrert dgi. « tar prevtoue dn 
■ BWW6BK OFTWHP (Uffq DM1 fit pglntfl Of 100% 


Straw 

Price 

Sep 

Oct 

CALLS - 
Nov 

Dec 

Sep 

9478 

9500 

9S2S 

624 

0X3 

a 

612 

602 

0 

614 

0X4 

ao2 

0.17 

0X6 

0X2 

0 

0X4 

025 


BASE LENDING RATES 


■ THHB MOWIH PWSQH FUTUHEfl (MATTF) Parts Intritni* ottered rate 



Open 

Sett price 

Change 

W8* 

LOW 

Sep 

9428 

84.38 

+602 

94X8 

94.38 

Dec 

93.88 

83.93 

+606 

9694 

93.87 

Mar 

93.45 

93.48 

+0.05 

9648 

8642 

Jun 

93-09 

9612 

+603 

93.14 

93.07 


Open bn. 
41X66 
48,784 
29.714 
27,748 


PUT8 

Oct Nov Dec 
W* 0X0 611 


BL VOL ooraL Crie 2874 Pgr Siq. IWte m rtw/’ t spar tat, Cria 257400 Ruts 801813 
■ OHM 89B8 PBAWC OPTKW flJFFg SFr 1m pobrts of 100% 


Strike 

Price 

Sep 

- CALLS - 
Dec 

Mar 

Sep 

— PUIS - 
Dec 

Mar 

9S7E 

9600 

SOBS 

618 

601 

0 

604 

602 

601 

0X8 

0.05 

002 

0 

605 

022 

023 

0.46 

670 

665 

087 

1.09 


■ TlWai MONTH KIHWPOLLAR (UFF5* Sim prints ol 100% 


&& <riL ML Cats Q Pws 6 Pimous dafe span M.. Cab 308 Putt 1786 



Open 

Sett price 

Crange 

High 

Law 

£SL vri 

Open biL 

Sep 

9«.92 

94.93 

+601 

94.92 

94.92 

74 

2859 

Dec 

9424 

9427 

*0X3 

9424 

9424 

60 

2119 

Mar 

93X7 

969a 

+0X2 

9667 

9687 

80 

1356 

Jin 

• 

93.55 

+0X3 

- 

- 

0 

283 


hXtfl&Qxwerj — 526 

AfcdTruriSn* 62S 

AIBBnA 528 

•Herry Arttacher 178 

Banktf Banxb 175 

Banco BKao ire 

Bar* Of Cyprus 178 

BriArfketartd — 5J5 

BarA of bide 17S 

Barit of Swtiand 5.75 

BadayaBerk 178 

BriBkriHd&n — 12B 
•Brawn Sh|by & Co Ul X7S 
CL Barit Nederiend^. 675 

CsoenkNA x.re 

Berk 675 
The QppperaM Bank. ITS 

Osut&lGo -ire 

CredtLyonrMi ITS 

Cypnn Bar* — ITS 


Duncan Lands 175 

Babr Baric LbrtBd— 673 
HuncHl Oat Bank- 8 
•ROOM Barring 1 Co - 176 

Gbriartc ITS 

•QrinoMt Mahon 675 

H«U>8ricAS21aUi.6re 

B Ua rahroaBank ,— 173 

Heritable & Sen btvBk. 175 

HSnul ITS 

CHoera&Co., — — 175 
Honstengl Shanghai. 529 
Juian Hodge Baric 178 
Blxopdd Joaeph & Sen 178 

UoyriaBa* 3.73 

Megriri Baric Ud 179 

MUandBadc 175 

‘MoMBrtdrg 6 

Uto W aaffn bM Br 178 

•RSB Broom 175 


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Cqrpeci wu llrritedleno 
longer aubariaed as 
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woswnThrit IS 

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Investment Banking 


bensBB program in tbe tafantiy to 
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US INDICES 



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WaMkramyaprfHMnaa d g wwr. 


Financial Times. Europe’s Business Newspaper. 


iseats 






































36 


FINANCIAL TIMES WEDNESDAY SEPTEMBER 14 1994 


4 pm dbse September IS 


NEW YORK STOCK EXCHANGE COMPOSITE PRICES 


17% 12* MR 
16* 12* ALIA) A 
75* 57* AIF 
72* 52* AM 

56* 38* ASA 
31*25* AUH1. 

H* 11*AMMPr 

23* 17%MMM 
15* U* httnxta 
31 22* ACE LU 

12* 9% ACM Orth 

10* 7* AGMGeOpp CL80 11-2 
10* 7*AGM6MSD 0* 126 
12 8* ACM CM Se 1.99127 
11* S* ACM Mb 1.08122 
9* 8ACMKBagaa7Z 89 

15* 8* AcraCh 

8* 0* Aon Bad 
28* 23 Mania 

13* 5%A±M 
15* 1T% Aasan 
18* IB* Artome Be* an 27 
84 46* Ad IflCR) 3M £2 
31* 16%AM8c 
ft SAtaafrp 
31 16 tan toe 

59* 4B%A00mADR 
65* 47* Mart 
36* 25* Atac 
22* 18* Mnm 
4 i* tfeantc 
"i 38* AlftC 
26% AKweFft 
19* AW*hc 
14* AlrtMOB 
I 21* AAlGtl 
13*AMaAlr 
. 16* AttanjrW 
17* 13* AUTVll 
25* 19*A&Afi 
22* 17*MC**A 
30* 25* AMsi 
25* 10* Aland 
65* 49* ms 
30* 23* AMVnm 
22* 14 ATOM 

24* TTAfcghLud 
26* 20* AW* 

22* 13* Mil Con 
28 2Q Mopi 
4* 1 Altai 

Z7% 1?%«beeC*» 

10* 9 AMS B 

27* X* AHHdi 
40* 33*Afc«| 

29* 24 AM Op 

7 4*Mnm 
31* 21* Atom 
54* 64* Alan 
30* 20* MaCp A 
11* 7* Amenhcx 055124 


13* 13* 13* 4* 7* 

15% IS* 15* -* 59* 

72* 70* 72* *2* 19* 

S6% 5E 55 -% 63* 


m, n a* 

AUtlh 

048 3.6 22 301 13* 13* 13* 
OIB 12 36 280 15% 

1-68 23 253809 ~ 

98 2029 
13 12 3% 

200 35 33 815 51* 

OTB 25 17 9583 30* 

050 16 10 58 14* 

032 23 82 22* 

27 G 14* 

044 13 30 828 24* 

1.08 11.1 


nr* 



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8* 6* AmnSd 
25% XAswstbd 
52* 44AMtaX 
9?a 8* AnAcgRx 
31 20* Aw Bart* 

37* 29% Altaic) __ 

25* 18* AmBasPM 050 36 14 12 

8 8* Am CB he x OG5 07 284 


044 35 15 2369 1: 
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050 22 13 
036 13 3 
1TB 
0 


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7&5 11* IQ* 10* 

888 15* 14* 15* 

115 17* 17* 17* 

a SB 56 58 

100 106 12 4010 2a* 20* 2a* 
016 30 B 10 5* 5* 5* 

010 06118 51 17* 17* 17* 

1,47 28 12 3)5 SB* 5B% 58* 

278 17 712409 48* 48* 48* 

046 lJ 15 1030 35 34* 3ft 

088 A0 165015 2* 21* 22* 

2 470 3 2* 2% 

058 21 26 2083 47* 47* 47* 

030 1.1 17 1537 28* 28* 

43 93 25 24* 

1.84 112 12 Z7 10* 16* 

8079 28* 27* 27* 

020 12 25 1688 17* 16* 16* 

035 15 31 218 IB* 17% 18 

020 12 430 14% 14* 14% 

028 12 IS 30 23* 23 

028 13 IS ZB X' 

0.44 12 23 1886 
030 1.1 71 380 
120 12 44 1028 
070 22 5 177 
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048 22 18 329 21* 

1.64 80 10 771 20* 

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1 344 1* 

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068 12 19 1247 Z7% 27 27* 

25 973 6* 6* 8* 

11 927 29* 23* 

120 12131 3943 D84* 82% 

41 878 22% 22* 

282 7% 7* 


sens* 

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63* 53BBBM 
55 43* BMC A 
25* 30* Ben* 

89 56* 8anat4jp 
44 34* Bawl 
36% 27* BWMOl A 
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19% l3*Bhtf)r 
1995015100 BortcH 
10 * 

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an £6 163187 31* 31* 31* 

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10* a* BfctackMu 073 81 71 

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060 2.1 14 1281 28* 27% 28* 
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2.40 75 7 55 30* 30* 30* 

154 25 12 164 75* 74* 75 

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232 5.0 IS 4968 SB 57* 58 

1.77 25 14 1557 62 61* 61% 

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1.76 25 28 4506 78* 77* 78* 
158 73 7 133 21% 21* 2»* 
032 1.4 23 1771 23* 23 23 

177 03 IS 1413 80* 59% 60* 
135 5.7 13 101 23% 23* 23% 
150 4.4456 112 37 36* 36* 

032 <7 4 19 7 6% 6% 

095 14 4 142 28* 28* 28* 

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38 105 4* 4* 4* 

044 25 38 1660 22* 21% 22* 

155 17 16% 17 

30 37* 


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060 15 49 1582 . 

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30* 24% AfflGnl 1.16 45 25 2449 28* 

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20* 16* Am Hedge X 068 35 11 27 18* 

65* 55%Anttjme 292 55 124105 58% 

2% 2% Am Hast 075286 9 8 2* 

98% 81% Antd 048 05 154054 92% 

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30 23% AsPnm 058 35 2D 28* 

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8* 7% AaHnlEs 044 55 5 37 7* 

27* 21 AmSW 048 20 73871 24* 

22* 16 Am Wdr5% 155 OB 4 18* 

32* 26% Am WoX 155 35 12 104 27* 

152 4.7 14 5882 41* 

158 14 5 29 37% 

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010 15 8 IS 8* 

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50* «*Boeha 
29* 19 BosaC 

21% 10 Bofl B 5 M 

24 9% BanXiDxa 
18% 11 Bhdan 

22 18* Bos&CeB 
28* 2D*BaMfrx 
38* ia*ftBdRKl 
34* 29% BREftnp 
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33* 19% EfeMwtrx 
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74% 55%BrAT 
54* 39BWGBB 
78% 55* BP 
27 19%aPr*nXne 
25% 1BBSM 
71* 63% BT 
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38% S%&mGpx 

6 BlitaOi 

30* 25%anRDex 
32% 24Vai*rrx 
4% 3* BBT 
25%l7*frm* 

18* 13%&utitft«x 032 15 42 
41 35*8u*BjoPt 280 75 10 
39* 16* Bui Cod 17 1010 24% 24 

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19* 16* Burton Pe 1.42 07 21 171 16* 016* 16* 


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20* 14% [Mbs Sera 16 482 15* IS 

30* 25*cam 084 3.0 fl 237 27% 2J 
46* 3SDaMwrCB 012 03 24 144 
11* lODoMMt 018 1.7 27 1GB 
10* 6*DBtOi 2 

7% 3Ddnon 2 288 

9* 6%Dan=WW 020 25 S 30 8% 

66% 64% OonnH 1.68 11 17 4534 78% 

2 *00.0 3 353 1* 

8* 4 OB Set) 014 23 2 111 6 

33* 25% Daao Foods On 21 20 194 32% 

31* DoanttO 050 15 11 2446 42* 

050 7.8 875 8 

220 21 17 3921 71* 

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154 14 10 330 18% 

020 04 4 949 48* 47* 47* 

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1.48 47 18 4372 31% 30% 31* 

755 01 Z100 91* 91* 91* 

758 65 16 83* 32* 93 

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24*i7*0tagPm& 040 15 21 210 22* 

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14% aaonaaCtrp 14 54 7% 

46* 34 0htxtt 058 21 ZB 384 42* 

1 5685 24* 

012 04 13 4703 25* 

030 07 30 9252 42* 

040 15 22 257 29* 

254 7.1 II 2075 38* 


7*Db*IWx 
90% 64* Dhn 
i% A on xu Ai 
23* 16% MnPL 
57% 38*M8» 
12* 9*0a8BMM 
2% *0dhn 
38 25% Deam 

101 84 MX&17.45 

102 S3 1 ) Mr&17 88 
30* 24* Odra 



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055 42 33 140 
028 1.1 11 61 
054 22 25 1170 
1.04 15 20 527 55* 
290 14 32 8039 70 

084 27 20 1345 31* 




43% 35* Ankii 
43* 3<% Arrow he 
16% 11*AmMx 
81* 50% Amoco 
B% 6%Ampantt 
4* 3% Anri me 
34% 29% AmsauBi x 
4* 2*Aneaep 
58* 42% Anwtatox 

55% 47% AnBtdl 
28* 25% AKRPpePf 
34 l9*An0wi 

18% 14*ArthBn7hx 044 26 18 

35* 30MaCp 126 28 8 

29* 22* Apwile Op 026 1.1 37 

10* B Apart 1401 F 073 01 
21* 14% AW 37 

7% 4APPUUB9 1 

24 16* AppIPwA 012 05 39 578104* 

29 21* A(dOi 010 04 17 B345 25* 



150 45 10 427 32* 32% 32* 

II 194 3 2% 3 

OX 05 68 567 49% 48% «8% 

30 2766 31% 31% 31% 
054 14 24 79 27* 26% 27* 

150 35 24 2038 53* S3 53% 
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17% 16% BafearFM 040 24 231 

22% 17B*artH 046 24 44 3653 19% 

Z7%21%Z*agrBcx 040 1.6 21 59 22* 

30* 24% MCp 060 22 Z 148 27% 

15* a* BUM 005 OS 14 409 10% 

9% 8%B®7 12 1070 7* 

a*20*taa6Et 152 75 11 1375 21* 21% . 

20% 13% EM BMP* 020 15 X 83 20% 20% 20* 

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25* 20* Bmx» V 1.14 A7 8 353 24% 23* 24* 

11* 9%B»ea(talM 072 85 5 X 10* to* 10* 

34% 27BopH»3* 1JM 14 7 1457 31% 30* 31 

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354% 253%(SS 
2518* CMS Bl 
82% 50% CNARi 
54* 44% CPC 
18% 14CFIQXP 
X% 71 CSX 
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24% 18* CXttaSMra 
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15 318 61* 61% Bl* 
156 27 17 2479 51* 50% 51% 
056 11 19 S6 18% 18 16% 

1J8 24 X SUB 72* 71% 72* 
040 14 22 19 26* 28% 28* 

094 13 16 029 19% 19* IB* 
11 6664 44* 43% 43% 
056 20 13 417 28% 27% 28 

016 0519S 63 19% 19* 19% 
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121244 47 

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19* 15* CsEngy 17 1840 17% 16* 17 

15* 9* CMPM 0 582 13* 13* 13% 

25* 17%CPndQox 040 25 55 73 20* 20* 20* 
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37% 20* CM* 1-6* 160 95 ZlOO 23% 23* Z3l; 

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1.70 6.7 12 512 2S* 25* 25* 

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056 06 16 119 8% 8 8 

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200 02 11 94 32* 31% 32 

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206 09 8 565 23*623* 23* 
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12* 12 Ox*fl »C 070 5.7 0 357 12% 

36% 30* ChenM 204 07 X IX 35% 

33%0talA 152 11 6 5504 37 

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22*Chanpe*B 072 22 72 612 32 

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154 26 18 1877 a* 70 

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1.16 3.1 15 1013 37% 36% 37 

032 09 13 1® 34* 34 


4% 2% BN bur 
16% 13* FT Dearth 
18% 11% RrtriGert 
38* 35* Betid 1 

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21% lO%F*afthc 
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44% X* CATX A 




57% 4B%CBC0 
12* 7% OEM 
35* 28% GTE 
19* 1S%GTCf1X 
12% 10% GaOtCS Eq x 
36% X% GalgBr 
16 11* Galoabla 
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!9%Dnaar 156 34 a 2833 32 31% 31% 

rt%1MM 150' 25641 367 38% 37% 38% +% 

2%HnOp 7. 146 : S% 5% 5% +% 

II mn .150 05 ID 11% 11% 11% 

4 Todd 8ft) 14 M 4% 4% 4% ■% 

0%-nHstaCa 050 04873 179 8% ft ft ^% 

albtaCtfl 281 107 3 26% 28% 26% 

1%1M»M 13 293 12% 12% 12% 

A1UM 0440718 5 83 82% 83% -% 

6%Idmdc 1.12 27 11 448 41ft 41 41% At 

D%DnCbq) 048 15 19 1» 2£% 25% 3S 

7% TdWO 054 22 12 1169 29% J8% 29% 

9%TobQM 019 09 90 0101}% 30 31% +2 

2%ft«ab 945948 38% 36% 38% -% 

162 95 9 64 21% 621% 21% ft 

S Ttmm: 200 3J 9 in 51% 51% 91% -% 

MnoOnx 036 07 13 50 51% 51% 51% -% 

MTbmo 050 44 11 1730 1S% MS 15% +% 

2%DmMR 8 2 14% 14% 14% 

OftTkavtaEb oa 21 10. 42 t2% 12% t2% +% 

Slim*.. 090 17 ISO 35% 35% 35% +% 


45 MlftnMEft 
29 22% Mob* 

W 53% max 
«% 13% ItHMfel 
43 29%mmx 
2S lOftTUMr 

S 28%Dtaw 

MltaHba 

9%28%DiMlr 
30% 31%-TMM 
8 2%HnOp 
13% nttaaW 
4% IToMSft) 
is% 8%-nuab)Ci 
27% 297IME251 

19% 11% mm 
79 Sflft TDDtlbft 
. 46% 3B%Idxnk 

30% aoftmobv 

35 27% Un 
3D% 1B% TMiJM 
40% 32%ft(6Lb 
a2>%MMB*K 
57% MftTnM. 

S 45%Dmr0hi 
14 -moo - 
12% Tinned 8 
10%1ksp«di 
' '43 31 TM* 


12% ftSptalFund 
7%. 4%5MrtonCp 
19% 14%SpMraO 
33^ 29% Santas* 
40% 32%SoklX 
10 13% SF* 


« 31 Tnftr.. 050 17 9SBD 3S% 3^ 35% 

19% OftltaMoorit 024 13 It 19 18% 19% 19% 

37% 33 TMDCM25. 250 75 5 33% 35% 33% 

30% 12% Mr 91600 18% 15% 18% 

64% SOftTftoM 154 15 21 1640 &% 55 55% 

24% 21 % TdCoo 078 35 260 23% 22% 23 

47% 30%Ttt& 058 20 191456 3» 33% 3*1 

40 31% TflM . 088 15 90 224 37% 36% 90% 

.37 24% Trttaa (UO D31 26 HK4 32% 31% 31% 

4. 2%DaonB . 1121023 ft 3% 3ft 

7% 4%mxOp 020 4.1243 131 4% 4% 4% 

14% 5% TlxWdi It 012 15 122 7ft 7% ft 

28% 8% TMh CM 094 75 1 6769 ft dft ft 

24%19%1MiDta; 070 52 30 78 21% 21% 21% 

55% 42%1V0SL 040 OB 27 1562 46% 4ft 48% 

10 6%TfosT 0.10 15 4 622 7% ft 7% 

6% 4% Mr 462 210 4ft 4ft '4ft 


55% <2%iyeoL 
10 S^T-araT 
ft 4% Mar 


It 


S MB tad 
MUhHhi 
UMHoitac 


3B% 30ftWatacgCS 
29% 22% UMtx 
5% 2%«tamrln 
aft ooniMjn 

18% 14%«Wfiw W 
4ft 38% MOO. 


18% U%6MtlfD« 
40%3«%«Mig>M 
11 6%«MIM8t 
29 24% WaUK 
11% 7%WM30 
33% IftlWtaM 

18% MftMOMl 
I 25% 21% men 

18%14%WMfeMEx 
SDaftwMia 
15% oftaMMfli 
20% 6%WNOg 
35% lSUMtataa 
2ft 1B%1MtaMng 
34% 2ft VMnHMX 
15% 10% WMpH 
6% ftwnnOod 
2D% i3%m win 
20% 15% WMtnc 
38 2S%MBK0x 
51% 3ftnyitr 
21% 15%WMtaMr 


16 14%MHbm 
17% ifttattahr 
32% 25%iworfce 


16 481 16ft 19% 1ft 
152 75 13 87 29% 27% 27% 


67 696 ift Jft JB% 

120 35 12 WOO :fis‘4 33% 33% +% 
036 23328 Solft l5% -% 

48 <78 4% 4% 4% +% 

098 18 18 527 37% 37% S7% -% 
094 25 19 428 *1% 31 31% -% 

017 07 2545278 26 26% 2B +% 

004 05 101341 4% 4 4%+% 

244 35 X 6567 Bft 79 80% ■% 
1.00 75 I 171 14ft 14% 14% -% 
222 01 13 SI 36% 3ft 3ft +% 
156 45 9 231 22% 21% 22% +% 
4a 18 17 ,1523ft 234% 234% -% 
048 14 a 140 34% 34% 34% -ft 
056 43 0 134 2 1% 1% 

oa 15 17 121 1ft 1ft ift 
aa 85 a dim w% sft soft ft 

064 04 W 3476 ift 9% 10 

078 OO 15 64 2ft 34% 3S 
023 32 14 236 10% 10% ift ft 
OH 07 a 657 32% 32% 3ft ft 
400 29 10 1294 154% 1S2% 152ft- ft 
OH 18 19 1254 15% 15% 15% 

046 1517 19 24% 2ft 2ft 

OH 54 It 388 16% 1ft 1ft ft 
164 43% 43% 43% ft 

1624132 1)17% 1ft 1ft +4% 

601160 1ft 15 15 ft 

020 0918 82 22% 22% 2Z% ft 
023 05163 63 24% 24% 24% ft 

15 75 9 397 Z7% 27% Z7% ft 
OH 18 10 5148 13% 13% 13% 

032 85 0 46 5% 5% 5% ft 

a 970 Ift 17% ift ft 
068 3L6 51812 1ft IB lft ft 
1.10 11 45 1471 » 35% 35% 

150 27 17 6884 «% 44% 44% ft 
OIO 09 19 2122 1ft 16% 10% ft 
152 25 16 2275 94 52% 53% ft 

17 51 16% 19% 16% ft 
094 20 19 344 16% 18% 18% 

2Z 54601ft 17% 1ft +1 
190 54 IB a 29% 29% 29% ft 
OIO 14 15 848 7% 7 7% ft 

084 27 14 3291 31 30% 31 

056 05 15 22 7% 7 7-% 

Oa 1.7 19 233 11% T1% 11% -% 

158 01 IS 117 51 50% 33% 

18 874 ft ft 8% -% 

141 SL8 13 1108 24% 23% 24% 

182 BJ 11 3Z7 Z7% 07 27% ft 

040 24183 43 16% 16% 16% ft 

1.12 38 H 746 30 29% 29% -% 

060 21 a 82H 20% 28% a% 

016 00 10 375 27 26% 27 ft 

080 38 48800 18 17% IS +% 

OIO 08 ZI 15% 15% 15% ft 

B 480 7% 7 7% ft 

048 15 a 1804 41% -40% 40% -% 

oa 15 a 673 19% 1ft It% ft 

044 21 12 M 21% 20% V 


1ft 1ft 

8% B% 


3S%2B%SWM 098 23 14 442 28% . a 29% ft 
3 P, 24% Stands 096 21 16 107 27% 2ft 26% -% 

37 31% 6tndnm ia 35 21 67 35% 95% 3ft ft 

44% 38% SMMkX 140 34 a 185 41% 41% 41% 

43% 37%9MBne 140 38 113 43% 42% 42% ft 

25%2D%8tan«ax OA 38 a 12 22% 2ft 2ft 

11% wsortiiMd oh 84 si n no io 

29% 24%SHJMJk OM 23 7 SU 28% a% ,3ft ft 

7% 6%Sbd|papx 080 29 6 6 6% 6% 6% 

13% 3%Sn%aM Ott 06184 1157013% 12% 13% '+% 
14% 9%ShS 105 12% 1ft .12% ft 

35% aStadOSM 31 1068 31% 31%: 31% ft 

10% tSaURa 0.12 18 3 107. ft 6% 0% 
a% 27% StaaeUM 060 18 27 a 3ft 8ft 32% ft 


20% 23% UJB Hb 104 37 IS 32B 28% 27% 27% 
- 8 4% UBS . 34 116 ft 6 6% 

51% 46%USR£ 4.1 4.10 8.7 M 4ft 47% 47% 
M 17% UK 6 329 H% 23% 23% 

31%23%ISr 1.12 27 17 2045 30% 3% 30 

51%40%USXCBrt*t 380 78 XlW 49% 


ftSMCM 071 3L5 45064 20% 


19%SM&I0P 231479 27% 2B% 

tftSUEniX 004 5,7 U 383 14% 14% 
sirS 12 1952 35% 34% 

22% Stanis ' ' a 831-87% 36% 

18% 12301Mb 088 25 12 310 15% T5% 

33%23%S6niBpr 180 4814 » 27% a 
4% 2&OMSM 030150 0 18 2 d2 

10% sun Dk A 110105 7 « 10% 10% 
4ScnOxB OH 44 5 256 8% 6% 
4%SU)Bwyy OH 04 a a 4% dft 
53% Scnwr 040 00 15 0n 44% 4ft 
4lSnddrx ia 25 M 1». .-«%.«% 
BUMitrt 1.19119 ft 10 .10 
1%5UMM 31»ft 2% 

(AM 1ft 20.131170 5ft 50% 
10% SUM Food oa 3.1 13 ft 11% 11% 
aSqMrtx 0.10 00 a 515 30% 30% 
27%Sl«Nd 094 39. 11 460 20% 28% 
11% Sol Cm 016 09 a 9|1 17% 17% 


12%. 12% 
31%: 3i% 

6% (3 

92% 32% 

a 20% 

2ft 27% 


»» mm. vi». mi 

Z7% StfMd DM 3811 460 28% 
ift SugCm 016 00 a Ml 17% ; 

18 Salat Hab 008 04 150 21.. 

IftSfflbdllac -a 963 18% 

7%symiCnp aa 25 .10 a . 9 
16% Spurn Fat a« 24 17 332 19%' 


,_ro' to ^ 

ii% . ii% -ft‘ 
30%-80V ft 

sft' •■» 


a to oh 

a 1701 a ift ib% 
o 200 % A A 

719012 1ft 10% 
a 27 B3% ft 3% 
a 679 3ft_55 38 


iftspnmft 0« 24 17 332 19%' TB 
12% BjibK 104 44 12 722 bM 23 

21% 9FWO Oft 14 S 2355 28% H 


6% 51CBVBM Oft 38 » 278 0 5% . 5% -% 
43% 28% TCFftMB 180 24 13 313 4ft 42% +% 
ft 8%TEWQnrS OM 01 316 9%; 9% 9% ft 

49% 34% TDK Cop A 047 1.1 45 17 44% 4ft 44% ft 

ft 1%TISMp DU 48 2 11 2 2 2 -% 

29% 18% TJX 056 25 13 2620 22% 22 2Z% -% 

16% 19%TNPEoMp 080 68 12 191 IftUlft T3% 

77% 61TBW 200 28 21 926 72% - 72 72% ft 

3ft22%minFd 736 2ft 28% »% ft 


65% URL 951 193 a 97% 97% 

10% 3% UDCHnt. 1ft 449 2 142 3% ft 3% 
24% 17%uacnp 188 78 IS 614 16% 17% 19% 
11% 5%UNCInc 2 1582 5% 5% .8% 

24 21%IMon 180 74 M 5000 22 Cl % 21% 

- ZrmtVMtK Oft 1.7 15 407 24 2ft 24 

. 17% 11% IMMtn 010 07 14 » 13% .13% 13% 

7ft SftlMar . 2ft 38 10 176 71 70% 71 

liAlOftlMM 454 38 17 1491115% 114% lift 
58% 4fttMMu 18B 3.1 70 1450 50% 4B% 50% 

34%2T%UiCM 075 22 a 61C 33% 33% 33% 

13% ftudooOnp 19 11 1ft 12 1ft 

.94%43%IM3JB 380 77 Z10O 48% 45% 45% 

67 56UC480 480 78 3 m SB 60 - 

' 3S% 3=%1taB*x; 2a U 11 M 33% a 33% 

67%55%IM%gi 172 38K 225E 50% 56% 56% 

20%-23% IHonPbd / 092 06 9 « 2ft 25% 25% . 

22 16% IHortTtont oa 10 a 1701 a 19% 19% 

2% %IMn 0 200 % A A 

18%. ftlMqa 277204 719012 10% nc% io% 

g ftUUQxp ■-- • a Z7 03% 3% 3% 

29% ( MU M 096 i5 2D 87B 3ft 37%. 38 
■ 15% 12%T*dDoo«y .’078 58 67 "377 13% ^3% ift 

^ft rfttbBaaM oa i.i it a ift jft. ,ift 

(OrTUUMn* 003 01 2151« S3% SZ% 53% 
«.30%uataMx'-2.a O-i^'s a 3o%d30% sa% 
.ft ft UkMtaOt oa 59 6 * 5% ft 5% 
1ft 10% UkKoMPra) 005 04 a 11% 11% 11% 

% fiOBPMW 12 na hr- Jf h 

15% 5%U5Mr . 0.12 20 0 0982 .6 ft ft 

Iftlftusno oa 15 14 2941 13% 13% 13% 

23%iB%amr a a 21% 21% 21% 

29% 14USHMW - 2 48 ift 18 1ft 

41% 34% IJSUCp IM 18 B 161 3ft 38% 8ft 

24 11%U5Shn 032 1405 305 23 22% 22% 

32% IftDSSlig • 000 O 0 3324 27% 2ft 26% 

46%38%USHM 274 54 34 3732 39% 30% 99% 

72" EBUUTBC ZOO 12 17 4102 63% 02% 63% 

14% IftUHMbr . 092 68 13 10Z 13% W% G% 

17% 13% Utanb . a 5flul7% 17% . 17% 

34% 29% Ohb flood! 002 3813 » Jft 30% 38% 

. 10 ift Uta Mix ia 98 11 a 17 1ft 1,6% 

% %UnhMML 0 305 A 015 A 

12% ftUMwQp 0» 24 » 32H12% 1ft 12% 
28% 17%l9MCip OM 47 11 IS 20% 28% 2ft 

30% 34% Unocal 090 29 22 4079 26% ZB% a% 

a aiMNCnp oa 1912137s 4»% 49% 49% . 
37% 25% Upon 148 41 16 2880 3ft a 36% 

' M 15% WUXI 024 12 7 7* 20% 20% 20% 


33% 22%«Mmi 
7% 595 Matin 
12 ftHMdmn 

58% 42%HtifiCX 
ift ftblmbago 
27%23%«ta£n 
3ft 27 68HMM 
1ft ISWwO 
35 zftmcoOaqix 
3D%a%WMXT 
27% IftVMHrtb 
26% lft«taMd 
1ft 14% MUU HUB 
7$ ftlWXttXVp 
Bft 3B%9Mgtb 
2ft 10%«l<eLdnx 
22 % 18%WpnsU 


i«r« ’ti 

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7% 27% +% 

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18.19% +% 

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Is 11 


109% 87%XMb 190 .29 52 
54% 500*1*4125 412 78 
3% aXMCHp 09 1.1 32 
25% aUMM^yxia 57 12 


42% 33% Tort tat 
5% 1 Zapata 

13% 7ZM&B 


016 04 a 
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27%20%2Mtant 180 40 B 
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200510ft 104% 104% -1% 
3 54% 54% 54% 

112 50% 48% 40% -% 
» 21% 21% 21% +% 
37H 41% 40% 41% +% 
97 4% 4% 4% -% 

1814 10% »% 1B% *% 
116 2ft H% 24% +% 


1ft 11%2M9 
29% ift am W* 


040 3.1 16 
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10% 0%2aMD« 084 07 


1814 10% 
116 2ft 
144 ft 
313 . IS 
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327 ift 
318 ' ft 




1ft 11% USFS6 
23% 16% US Mb 
2ft 14USHMU 
41% sftusucp 
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32% IftDSSlig • 
46% 38%USMM 
72' SBUktTK 
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34% 2ft Olbftxxb 
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23 22% 32A 


a 36% 


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U ta nta b ami «■ tax b — pm g mm Tha W0vbw ante 
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rnuMtawl mi nb In Ml itHbb. xadat b feb 


AMEX COMPOSITE PRICES 


4 pm cte* September 13 


Stack Dta. E toot Ogb 

Advltaon 487 54 14% 

Mtahc 2 6 1% 

Attaint 4 402 6 

MdbrPl 184 14 6 4ft 

fetus Ax 0.54790 46 20% 
AmdsN 005 331® 10 

AnExpt 2 301 1% 

Aiqxd-AmA 52 286 ft 
ASRtan - 072 21 80 2% 
Adrotocfa 27 5 3 

AM 7 513 5% 

AOtaCUB 0 31 A 
AUcwxA 8 287 9% 


14 14% +% 
a 4ft 

2 % 2 % 

& 8 i * 

S 1 *% 


UHOcMi 055 0 3 2H 2fl 2ft 

BadDHMr 073 20 7 2ft 25% 25% 

BtabaoT-A OW » 70 5% ft ft 
BanyRG ib 50 mh 26 2ft 
BAhdr 071 33 13% 13% 13% 

Bud B a Ift 2 ft 

BHetHtai 040157 3 32 22 22 

Slo-RalA N 119 24 2ft 24 

BtaartAx 050 40 1Mb42% 41% 42% 

Bow Kay- nan 00 11% 11% 11% 
Bqwmr » 17 3* ft J* 
BnntX on a 184 20% 10% 20% 
encanA 104241 18 14% 14% 14% 


caatp i » % d% % -a 
Canto*' 020 14 » 23% 23% 2ft 
Car Marc oa » S3 11% 11% 11% , 
Onto* A 001 31401 2 A 2% 2ft +% 
OuntoB 5 21 2ft 2% 2ft ♦* 

Otonplon a 2B 36% 35% 3ft +% 

CMC* 735 5Z7 ft 4fl ft +ft 

Cteft 094 » 962 12% 12% 12% +% 

CtMFUA 091 P 5% ft ft ■% 


Stock Db. E 10M H(ta UwOonaChog 
Cttotao oaiZB fl 17% 17% T7% +% 
Cnnpuhac 0 2S3 % dft % -ft 

Coned RM 5 22 9% ft ft 
CranKTA 004554 302 ift 1B% 16% +% 
CrownCA 0* 43 5 1ft Ift 1ft -% 

OniMiCB tWO 15 13 17% 17% 17% -% 
Otoe 053 84 4 19% 19% 19% 

QAntah 20 63 3% 3% 3% ft 

DHnda 13 32 1ft 1 1ft 

{Nqurti 2B 21 17% T7% 17% 

i DuHaadMi 6 15 ft 4% ft ft 
Ot*(« 048 8 10 8% 8% 9% 

SHtaCD 046 13 4 13% 1ft Tft -% 

- EashpK* 1JHBB 42 20% 2ft- 

as* Bay 007426 4447 13% 12% 12% ft 
BsTEnA 030 9 19 10% 10% 10% ft 
-RtobRi 5 0 7% 7% 7% ft 

Ban 171122 38% S% 36% ft 

EnaySv 2510 15% 15% 18% ft 

i&W a . 13 461 2ft 19% 20% ft 

FttlHbX OM11 5 31%d31% 31% -k 6S 
FMAx 490 10 TWO 78% 78% 76% ft 
FaoyBnc 09MZ100 11% 11% 11% ft 

AtaaU 0L5B 74 79 30 29% 2ft . 

Rant La Z7 511 4ft 45% 4ft ft 
R un ner 4 4ft 3% ft 


am U 5 IS 1! 
GhdtRH 072 14 056 2 
BUM 17D 36 2*3 1 
eoMSdd 1 120 

Graanan » 136 
MfCda 034- 12 624 


m ift ift +h 

■ 5 1 ^3 


27 509 4% 4% 


Stack Db. E DXb «*• law Ctaw I 

Hostvo 028 142171 31% 31% 31% 
HaaRbCti 4 13 3 3 3 

HsdDMt 3 313 o3A 3% 3% 

Hdco 015 45 4 ift 1ft 10% 

HmaadwiA 10 6 9% 8% 8% 

man 1 MS 5% 5% 5% 

btanadpx 012 29 « 11% 11% Tl% 

MCamt ' 32569 ft ft 3% 

HaradOB a 465 17 1ft 17 

bn 096 » 34K 20% 19% 20% 


4 413 6% 6% ft 
21 5 14% 14 ift 

19 IM 1ft 16% 16% 
72 17 ft 6% 6% 


Itoga 9 75 IA 1% 1% 

ItataM 13 155 5% a 5 

LNPhann 4 81 1 ft % 

Uaankc -, 212 61 12% 12% 12% 

lynch C* - 6 26«28% 28% 26% 

Hants 3 140 30% 29% 29% 
MadbA 04429 44 29% 29 29% 

Mom CD 020 41 X100 ft 6% ft 

add a 7 7 7 

MOOQ A 15 5 9% 9% «% 

MSREtal 190 an BlA 1 1 

ttatmt 6 265 2H 2% 2ii 

WfTmA* 690339 WO 2ft 2ft 23% 
MMSdlCN 02013 -4 ft ft ft 
ibmaf ittxiOO ft ft ft 
Nffi 287 24 ft ft ft 

(Modes A 34 135 U9% 09% 9% 


PdrtBPx 

FWLOx 

PMdVAX 

3c“- 


Pf Sts 
Me E 1904 
02*451 914 
040 10 SCO 
MtlB 3S 
IM 9 2 

OHIO 968 
050 19 26 
0.12 29 148 
092 16 100 
OIO 0 431 


Hgh InrCtantano 

3ft 3ft 3ft -% 
1B% 16% 10% -% 
9% ft ft ft 
17% 17% 17% 

®i% 60 Kft +1% 
3ft 3ft 3ft \ 
22% ZZ 22 % 
15 14% 14% +% 
li 1% 1% -i 


TUFMA 

TcwnQUy 

man 

TebocMax 

ItaattA 

DanftS 


110 9 4 

16 119 

020 a 14 
096 67 996 
67 3D 
94 116 
020 17 191 
77 95 
2' 7 
7 120 
0 07 67 131 
OD7M37 487 


’S’lS’S 

35% 35 35 

1ft 17% 17% 

I ft ft 

SIS 

31% 31% 
12 12 % 
2A 2 A 
IS T» 

ft 5% 
1ft 1ft 1ft 
10% 16% 16% 


020115 30 
31 44 
M6 25 

251096 
!«25 
312061 
000 21 313 
1.12 16 701 
090 14 117 


3ft 38 38% +1% 
3ft 64 35 +1% 

ift +% 

31% 31% 31% 

5 4% 4fl ^ 



ea^ the edge ow your oornpemoTSDynaw^TiKriiKHKmi iui*» umniaou j**® wl!W i n <»j n u. n u % uo ! 

Hand ddiveiy services are available fix all subscribers who work or live In the business centre of Budapest 
Please cafl +43 69 15 68 50 for more Information. 

Financial Times. Europe's Business Newspaper. 


nth tte E m M0b law lad CM* 

ws Wax aa w a ia% ia% 13% 

ACCCDIp 012170 841 10% 18% 18% -% 

AECbtaE H 7993 10% 19% 18% -£ 

ACUMBt 21 9 24% M% 24% +% 

AodooCp 38 56 27% 27 27 

AMpncft 164317 20 191ft -A 

«CTBi6 S 2143 43% 42% 42% -% 

AtafcBB® 21 7 13% 13% 13% -% 

AM Saw 016 22 40 37% 39% 37% +% 

AtadwSya 020 2616BB1 38A 31 32% +1% 

AAtnce C 7 290 10% 9% 9^ V« 

A* LOfliC 6 40 4& 4% 4% -% 

AtoPayn 8 61 5% 5% 5% ft 

AdvTdZab 14 411017% 16% 16% -% 
Adwu 020 16 598 32% 31% 32 +% 

ASt/ma 12 123 17 16% 16% -% 

AflflfcoEl OlOia 678 13% 13 1ft 

AkSq* OH IS 203(07% 27% 27% 
AktaNW 2» 22 32B 61% 60% B1% -% 
ADSM aa 17 403 2ft 25% 25% 
Atamsw 16 129 ft 6% 6% 

moi 052 15x100 a a a -1% 
A«m« 5 537 9% «% 8% -% 

AMCapOX IA 13 00 15% 14% 14% -% 

Add Cap i 080 12 IM 14% 13% 14 -% 

AkbttaC 032 8 M 3% 2% 2% -% 

A6» Bold 00614 396 Tjj ig 1)1 -A 

AMnCD 29UW0 xfli 29% 29% +% 

Am Banter 072 8 m 23% 23% 23% +% i 
AmOyBo 14 .6 15% 15% 19% -% 
Amltonao 22 HI 24 23% 23% 
AmMUB 12 281 ft 0% ft -% 
Abi SoAMdL32 10 373 5 4% 4% ft 

Am Ray* 41 67 24% ZA »% +% 
AanOltA 050 175107 3ft 26% 29% +A 
AndaP 21533 t|i 1% 1& -it 

AOMb 220 7 21 Aft 4ft 4ft 
AwPwiCanv 351S14S 19 17% 1ft +1 

Am Trcr 13 1728 16% 16% 16% -% 
AtaQBOtac 20 8229 53% 52% 53% +% 

AnrtadiCpaOjOB 141621 10% ft 10% -% 
Amxfin 4 179 9% 9 9% +% 

AdStotfc 16 91 17 16% 17 +% 

Andyn 052 13 1B3 15% 1ft ift -ft 
AtWDBiAm 1X0 12 5 14% 14% 14% 

AakwCp 26 1084 47% 40 46% 

Antal* An 6 17 1ft 15% 16 -% 

AnogmEn 030 30 61 WA U ISA -A 
AH’ Ho 01147 ft 5% ft +% 

AppUlM 3314006 60% 48% 48% +% 
AwtoC 048 319218 36% 35 3SH +% 
Appbbni OM 481847 19% 16% 1ft -% 
AiterDr OH 46 179 20% 19% 20% «■% 
Arcteo 019 16 406 » 20% 21 -ft 

Argonaut 1.16 8 595 30% 29% 29% ft 
AnwAI OH 21 12 21 21 21 

Arnold la- 049 17 24 20% 19fi 20% -ft 
ASK Grp 3X100 13 13 13 

AtpadTd 351133 40 90 36 ft 

Anocconrn Z77 35 25% 25 S -% 

AST Rarer 61B132 14% 1ft 13% -% 
AOdnan 13 104 ift 10% 10% -% 

AS SEA* 032189148 2ft 24% H% -1% 
Aotdta 048 241068 61 GO 60% ft 

AuMrtD 10 26 3% 2% 3 +A 

(tanteto 062 20 143 7% 7% 7% ft 


- B - 

BE! 8 008 29 12 5% 5% 6% 

Babtagto B 254 12 11% 11% -% 

BdwHWt 10 A Ota A -A 

Bdur.1 006 13 102 21 20% 21 ft 

BMwLB OH 3 BO 15% 15% 15% 
BdKtK 16 683 26A 25% 25% 
BtaSaMbx05B 122001 19 16% 19 ft 

BdUaCii 040 8 9 15% 15% 1ft ft 

BdtowOl 0X014 103 25 24% 25 +1 

State Gao 052161279 33% 33 33% 
BUMF 00018 171 29 2B% 28% 

Bay View 060 13 14 24% 24% 24% 
Brterte 1X0 132847 56% 58 58% ft 
BB8T At 1.18 B 90 29% 29% 29% ft 
BE Aero 201253 9 8% 8% 

BuflUd 042 32 33 15% 14% 14% 
BanUaary M 284 14% 13% 14% 
BoMaym 044 133701 36% 36% 36% ft 
BHAGrp 0.1218 614 11% ift 11 ft 

Htae 05 97 4% 4% 4% ft 

BigB 016 17 212 12 11% 12 ft 

BhaiayW 006 16 211 14% 13% 14% ft 

-Hogan ' - 56-5976 53% 51% 52% ft 

Monet 196860 11% 10% 11% ft 
Block Dig UM II 119 31 30% 80% -% 

BMC Soft* 140402 44% 43% 44% +% 
Gasman S L36 10 2496 33% 32% 33% -A 

BoDErbs 029 19 723 21% 20% 21 ft 

Bata & 8 15 65 29% 29 29 ft 

BatHU 147820 12% 11% 12% ft 
BodMBk 076 61330 38% 36 38 -1 

BodonTc 501476 12% 12% 12% ft 
BradyWA 0X6 18 60 46% 47 47 -1 

Branco 024 29 64 13% 12% 12% ft 

BnnoS 026194251 9% ft 9ft 
BSBBnqt 076 9 688 29% 2B 2B% ft 
BTStane 048 4 40 2ft 2% 2ft ft 
BdMb 20 2041 17% 17% T7% ft , 

6U60B3T 21 119 12% 12% 12% ft 

Bur Hu 35 560010% 9% 10% 
Bttaneaifl 64 32 34 33% 34 -ft 

H4kM9 7 60 30 29 20% ft 


- c - 

CTac 200 494 2B% 23% 26 +2 

CatatMad 6 105 5% 6% 5% 

CatEtfny* 0G9 16 199 29 28% 29 ft 

CrtnuaCpmlUD 21 304 1 7% 17 17% ft 

CimCp 403 814 6% 8 8A ft 

CaJgena 2L2S' 5 2648 9% 9 ift ft 

CM teem 231049 25% 24% 24% ft 
Cntoita i nos i% i% iA 

CandetaL 2 M 3% 3% 3% ft 

endk* 4 29 2A i» 2A ft 

CmonhE 052120 42 66% 86% Bft ft 

Canto 3 350 u5% 5% 5% ft 

CrbooCm 0X3 22 229 27% Z7% 27% 

Quods 0X0 23 68 25 24 24% ft 

CaeayS 0X6 166886 11 10% 10% ft 

Cefen S 406 7% 7d 7% ft 

CBIty 19 60 12 11% 12 ft 

Cataonr 7n787ui$% 14% T4j| ft 


CntrtFUx 

112121351 32% 

32 32% 


Cmt^r 

21 8 10% 10% 10% 


Chanaer 

9 18 4% 

ft 4% 


ctHpuri 

0X0 8 471 23% 22% 53% ft 

ChnxSh 

OtB 12 5040 9% 

6% 8 

ft 

Ctemtdi 

17 20 12ft 

12 12ft 

-it 

OwnyuMf 

13*100 3% 

3% 3% 


CHpsSTs 

8 079 4% 

4 4% 


Ctduity 

656750 68% 

» 87% +1% 


OlMAix 1X8 12 518 54% Si 53% -1 

Chatty 017 32 799 33% 32% 33 ft 

Cfenetyc 3114036 31% 29% 29% ft 
CS Teed 125 620 2A 2A 2% ft 

Ctebtys 1437630 25% 25% 25% ft 
Ctx Bmiq) x 1X8 17 230 31 30% 30% ft 

(Seen Hr 20 38 6A 9% 5% 

CM Or 43 147 12% 12% 12% ft 

DUbaam 71100 4% 4% 4% ft 
QcaCttaB 1X0 16 11 20 20l2 29 


rr ib 

3»ta Ota E rtta Mte Lu La* cmi 

Otednonouii 7 21% Zi% 21% ft 
Oilcan* 3510404 34% 33% 34% ft 
DadaOSte 0.16 16 53 15% 15 13 
Dupy 030 32 62 37 % 39% 36% ft 
Dapoyx 1.T2 9 2 32% 32% 32% 
Devon 020 3 7100 6% 9% 8% ft 
DUTadi - 17 40u22% 21% 31% . 

(tanas 060 24 31 17% 16% 16% ft 
XlBiM 14 362 15 14% 15 ft 

DtyMcm 9 771 15% 15 15% ft 
HgSounl 40 866 1% 1% 1% 
OtOSyct 241212 7% 8% 6% ft 

Ohacatty 17 2 35% 35% 35% +% 

DhtaVkn 020 48 536 9 8% 0% ft 

DMA Rdt 1 1853 2% 7% 283 -05 

Debar Co 020 25 009 25% 25 25% -% 

Don* HOI 0X6 14 20 13 12% 13 ft 

DnasaBw B 532 9% 6% 9% 
OnaaBdD TO BSS 10% 9% 9% ft 
Dray CD OH 21 563 25% 25% 25% 

Hog Enpo 006 53 72 5% 5% 6% ft 
DS Bancor 1X0 M 90 26% 28% 26% ft 
DUdra 042 13 457 17% 16% 17 ft 

Own 030 H BU33% 32% 32% 
Djntacr 7 197 22 21% 21% -ft 


Coda Eng? 130 203 0% 0% 0% 

CodaAtem 29 09 11% 11% 11% ft 

CDmty -30 944 20% 19 19 -% 

Cognac 110 20 12A T2A 12A +A 

CEttaU 18 168 13% 13 13% ft 

Cricoan 040 00 682 22% 22% 22% ft 

COUGH 1XB 13 9 22 21% 21% -% 

0aU9n> 0X0 11 65 30% 29% 20% -% 

Qatar OH 171210 2B% 25% 2S% -1% 
CnfartA 0X0 20 2788 18% i'B% 10A ft 

oadasp one 4210701 16% -ia% 16% +A 
CDmnfltadA88 11 468 U33 32% 32% ft 
CoreaQ 070 97 44 18% 18 18% ft 

CunonC 161223 HA 3*2 23% ft 
Oonprttab 370 470 11% 10% 11% ft 

eastern 36 409 12% 12% 12% ft 

OntaoeMt 37 HOG 3% SA 3.40 +XB 

CanR* 1X8 33 '8 48% 48% 48% 

OoMitan 4 165 5% 5 5% 

OstadCtt 58 1328 23% 23% 23% 
Mon 10 507 7% 7% 7% ft 
Cbte A 05D 22 945 20% 19% 20% ft 

CBMlta 331014 4iJ 4% 4H +A 
Cotas Cp 221400 53 % 50% 30% ft 
C«p Of A 46 27 16% 16% 16% 

CmdmrBk 0X2 27 5730 24% 23 23% ft 
Q9C0U 11990 lA 1% lit ft 
OomiHbc 31 78 S 4% S 

ty«g» 2 468 B% 3% 3i T « -A 


- D - 

DSC OH 1927966 30 26% 29X0+1 .77 

DartHou 0.13 23 14 88 H H -1. 

DMSwcr 12 32 2% 2% 2% ft 

Dtaten 26 52 7% 7 7ft 

OtaBKSai 14 369 15% 15 15% ft 

Dtotetety 09212 376 26% 20 26% ft 

Deb Shape 02010 » 6% 6% 6% .-% 

DakatfBi 082 H 35 T5% 15% 15% ft 

Datebty 0X0 44 68 30% 29% 30 -% 


EngkRI 

1 1277 

2% 2% 2% 

ft 

Btaty 

2 772 

ft 3% 4% 

ft 

EMtEnamt 

2 5 

iA iA iA 


Ed Tal 

0X1 231377 

18 17% 17% 


POBtebt 

125 263 

7 6% 6% 


QPaaoB 

1 3390 

2 Oft 1{) 

ft 

BactrSU 

141641 

15 1ft 1ft 



- P - 

Fa* Grp 11 25 4% 4% 4% ft 

FcrrCp QH 3B 03 7% 6% «B ft 

Ftabnal 004 B3 417 40% 39% 39% ft 

RflDi 172263 29 28 26% 

ROBIM 1H 15 396 52 51% 51% ft 

FMyOff 15 475 5% 4% 5% +% 

RggtaA OH 0 181 9% 9% 9% ft 

ndU 32 577 24 23 23% ft 

Rot A« 0X4 0 487 34% 34% 94% ft 

RfficOfta 1X0 12 022x27% 25% 27% +1% 
FtaCoOk 0X0 20 186 23% 23% 23% ft 

MSiey 1X4 12 788 32 31% 31% ft 

M Tam x 1X8101421 47 40 46% ft 

Fit Waste 036 7 788 u9% 9% 9% +% 

RtfbMc 036 7 756 24% 34% M% +% 

Rotor x 1X4 8 2 33% 33 33% +H 

Rotates 45 31 7% 7% 7% ft 

Rtan 274841 21% 21% 21% 

Row lot 19 409 6% 6% 6% ft 

FoodLA 0X9 15 473 8 5% 5% ft 

FdndLB 0X8800 626 6% 8 6 

Ranuat 1XB 10 307 32% 31% 32% ft 

Rasteir 11 537 12 11% 11% +% 

Rater A 33 211 3% (E% 3 -A 

FrttHn 1X4 12 356 30% 29% H% ft 

MRnlx 040 8 318 16% 16% 16% 
RrtMtata 1.1011 127 29 28% 20% -A 

RderHB 05B 20 854 32%d31% 32% +% 
RdartTn OBB 11 120 21% 20% 20% ft 
Finn OH 22 14 17% 17% 17% 
RdncdAOR 20 323 3% 3 3% ft 


- G - 

GHAff 7 3» 3% 3% 3% ft 

GBKSara 007 » M 18% 15% 15% ft 

GCnttn 0 81 2% 2% 2% +A 

GmtRa 8 7 3% d3% 3% ft 

Gate CO 016148 38 B% 5% 5% ft 

Gate Bind 040 21 00 20 19% 20 ft 

Batayto 19 70 o5% 5% 5% ft 

GensbRi 31141 10% 9% 9% 

Gtatexty 4X0 40 541 24% 23% H ft 

Sana Inc 158 159 4% 4% 4% ft 
Gansu* 851532 36 35% 35% ft 

Gbaontt 040 21 1913 10% 15% 16 ft 

GhttigaLx 012 15S677 20% 19% 20% ft 

BtatA 0X0 15 184 14% 14 14 

OsTShM 12 74 ft 5 ft +A 

GoodGuya 151004 12 11% 12 

BoubbRnp 0X0 19 567 22% 22% 22% ft 

Gndoo^s 312 103 3% 3 3% ft 

Onto 020 69 252 21 20% 20% ft 

HoaAP 024 11 35 U 17% 18 


0 595 2% 2% 2% ft 
43 44 13 12% 12% ft 

9 135 13 12% 12% ft 
51755 10 9% 9% ft 


- H - 

HrdngA 54 51 ft 5% Bft 
HaataypAx OB8 9 42 24% » 24% ft 

HdprGp 0X0 13 717 15 14% 15 ft 

*0 6 CO 018 27 4305 33 32% 32% ft 

Haatexar 25 5998 28% 27% 28 ft 
Hltefcm 0X6 20 80 12% 12% 12£ -A 
i teallMim 11 2561 6 7% 7% ft 

HaoMogr 016 S 825 15% IS 15% +A 
Hakhnj 20 11% 10% 11% ft 

HdenThy 8 192 15% 14% U% ft 
Hwfatr 072 14 637 21% 20% 21% 
Hoontya 015 21 332 7% 7% 7% ft 
HatOfteO 77 S79 17% 10% 17 ft 

Bob* Barf 0X0 6 12 21% 20% 20% ft 
Ron hub 044 17 24 2ft 24% 24% ft 
tombac* 144320 13 11% 12% +U 

toOrfflu 044437 13 ft 4% 4% 
HHJB 020171140 18 T7% 17% 

Hrttagtnx 000 6 5886 20% 20 20% 

Huca Co 006 1 17 3 2% 3ft 

HuhteTorfi 1H) 955 33 32% 32% ft 

tocarBto T7 103 ft 4% 4% 


tech Eta E tlta Hrfi Law Ud (to* 

-K- 

K State 00511 56 22% 22 22% ft 

Kaowity OH 5 082 10% 9% 9% ft 

KteaiOl 3 847 8% ft ft ft 

MtySr 07! 25 280 30% 30 30% ft 

Kaokatej 011 11 35 6% 8% B>’« ft 

KKntM OM 13 12 25 H% M% •% 

1 UrKtor 21 34 10A IDA WA +A 

KUbdlr 66 4768x50% Ift 50+1% 
HUMge 2 181 3% 3% 3% ft 

KHA 0 BOB £ % A +ft 

tumobe 2131234 23% 23% 23% +% 
HtatesS 9 755 15% 14% 14% ft 


EbcSxB OB9 51 59 SO% 50% 50% +% 

BaciM* 2110KB 18% 10 18% +% 

EonoAta 17 20 5% 05% 5% 

Emrfn 695 09% 9% 9% ft 

Eoutom 54 7 15% 1ft 15% 

En* tot 79 51 2% 2A 2% 

Enron Inc 2 407 2% 2% 2% ft 

EqtdyOl 010 IB 218 4% 4% ft ft 

Skate 048148 25H 53% 53% 5ft ft 

BMd 361 8% ft ft ft 

Brans SOI 57 44 12% 12% 12% +% 

Batata 341276 18% 1ft 10ft +% 

bettor 8 11 7% 7% 7% 

BddeBac 15 112 21% 20% H +% 

Btpatatl 010 25 076 21% 21% 21% ft 

MEorpta* 20 79 13 12% 12% ft 


FRSy* 
DBConun 
IS MW 
tanaunr - 
ha uaao gan 


40 8 7% Oft ft 

276612 9% 9% 9% 
41482 4.7* 4% ft 
32 75 ft 5 ft 

2 88 4% ft ft 


imped Be 040 32 212 


QM192 53 13%61ft 13% 

16 170 14 1ft 13% ft 

2SS1214 21% 20% 20% ft 
0X8 18 516 11% 11% 11% ft 
Z72CZ7 23% 22% 22A +A 
32 400 13% 12% 15% 

9 145 2A 2% 2A +% 
OH 1239344 65% S5 95% +■% 
a 260 2% 1% 2% -ft 
MO 273428 15% 15% 15% +% 
18 595 ft B ft +% 
024 17 224 13% 13 13% ft 
31000 9% 9% 9% ft 
41059 4% 4% 4% ft 
5 602 12% 12 T2A -A 
223099 12% 12 12% +% 

14 387 17% 17 17% 4% 

00217 31 2%d2% 2% 

275 19 5% ft ft 

005 20 120 31% 30% 31% ft 

2 565 bft 3% 5% -ft 

IB 7*3 II 17% 17% ft 

1X9 387100 209 209 209+1% 


- J - 

JBJSoKk 14 232 12% 12% 12% ft 
JdODkc 026 14 14 9% 6% 9% ft 

JLB hbf BID 33 156 40 38 35% 

XtaBUiV . 80 2 24% H% 24% 

JodhH 11 377 14% 14% 14% ft 
JteMhWaaiOlZ 548 ft 7% 8ft 

Jotalfl ty 120 14 106 ' 30 29% 30 ft 

J58 Hn 0X0 17 47 27 26% 20% ft 

Juno Up* 028 18 IM IB ift 10% 

tew ta aw B 585 12% 11% 11% -% 


- L- 

LNXBB 072 24 S 20 18% 19% 

Ladd Fun ai2 36 453 7% ft 6% -% 
Lm total 458950 n40 38% 3911 +1|1 
Lancadnrx 046 15 3886 34% 33% 34% ft 
Lance he 09818 127 18 ift 16% +% 

Urchktyb 30 545 M 23% 23% ft 
Lanoptba 13 « 9% ft ft ft 
I tawi rpa 28 2917 4% 4 ft +% 

lances 181932 19% 19% 19% +% 
Lamm FT 048 18 23 B% »% 25^2 ft 
LOOS 3268323 23% 22% 23 ft 

U0ty 016 3 2100 ft 5% ft 
Lactam 20 906 U17 ift 16% -% 
LapotoCp 14 5944 24% 23% 24 +% 

UtoTneba 020 17 132 18% 18% 18% +% 

I Ufcm 23 219 4% 4% 4% +% 

LdlhiMx 02912 196 13% 12% 13% +% 
LflBr HS1154 136 1 35135% -% 

UicotaT QS 15 56 16 15% 15% +% 

UabayMt 12 19 29 28% 29 

UwwTk OM 35 3310 4S 43% l^a 

UquBdi 040 IB 27 3ft 34% 3ft 

Inmanty 006 287516 23% 22|) a% +% 

Lena Sui 9 314 6% ft ft -t, 

LitaaQ 338275 4ft 41% 42 -% 

LIXty 32583 4% 3% 4 .% 

LWM 078 4 12 32% 32% 32% +% 


HQ Cm 0» 211999 34 23% 23A l'c 

MS Can 22 427 23% 24% 25 ft 
Mac Mi 0X0 48 57 14% 14% 14% +% 
MbOamGE 1X8 15 148 3ft 33% 3ft +% 
Magma Far 121172 2ft 027 27% -% 
Magnate* 078 13 263 20% 20% 20% 


MrfBox 12 res 0% 7% 8ft 
Mann Op 23 680 10% 10 10% 

MarftoDr 121155 5 ft 4% 

Martel ty 9 28 42 41% 42 +% 

Mwquext 2 3 1% 1% 1% 

Utoikte 18 23 9% 8% 8% -% 

ManbSdkAOH 11 23 11% 11% 11% 

Itantte 0X0 11 583 20% 20% 20% ft 

M8MK 8 85 8% 8 8% 

Medea H 47 1089 uB2% 61% 61% 
kkxnrty 01990 5 4% 4% ft 

UcGrathR OH 121150 18% 1ft 1ft -% 
McCormk M8 15 IBM ift 19 ift +% 

McCdHC 171 7061 53% 52% 53% ft 

UttclK OW 17 2 13% 1ft 13% -% 

UatadneS 048 14 469 34% 24% 24% -% 

MMdrtns OH 21 129 10 ft 10 

WMorty 019 55 369 1ft 16 16% +% 

MtabG OH 23 4692 1 0% ft 10% 

MdCCCLB 0X8 12 412102% 22>4 22% +% 
Money Gx 070 7 225 28% 27% 27% ft 
ttoritaan 1X6 12 931 31% 31% 31% ft 
Mertsd 83796 ft 9% 9% ft 

UateodaA 012 20 7441119% 18% 18% +1 
IPS Cm 36 618 34% 33% 34% +% 

MkhaMF 020 201965 13 12% 1^1 +A 
UfchHte 200351 627 77% 77% 77% ft 
HcratMi > 574 3% dft 2% 
Mkranga 102554 14 13% 13B +A 

Mcncon 8 960 7% 7% 7% -aft 
Mfcrontet 11 88 8% 6% 6% +% 
Mopoto 22581 7% 8% 7 +% 

Mod 1625506 57% 56% 57&+1A 

MhiAflM 244915 27% 2ft 27% +% 

! Unease 052 11 2186 29 2B% 28% +% 

Hdw&ata 050 25 19 30 29% 30 ft 

UbrH 052 17 473 25 24% 24% -.05 

Won IK 24 23% 23)t 

Itentocb 21 348 16% 15% 15% -% 
IfcMaTal H 3813 22% 21% 22% ft 
Modem Co ore 20 42 7% 7% 7% +% 
MHtae id 052 20 212 28% 27% 26% ft 
Motel 004 351 u39% 38% 39% ft 

Motor he 004 32 7GBu43% 42% 43 ft 
Wacom 0X4 14 881 7% ft 7% 
MaatawP 03623 B5 32% 31% 31% ft 
Mr ODOM 18 197 15A 15% 15% 
tnssyix 056 9 313 23% 22% 23% +% 
hotmad 14 742 32% 31% 32% +% 
Mtcogan 5 205 ift 10 10% ft 


NNCHe 016 11 32 25% 2ft 2ft ft 
MaahRldl 07211 58 17% 17 17 
NatQanrf 0X611111581)13% 13 13% ft 
tax Sui 020 19 495 13% 12% 12{] -A 

Navigator 6X0 11 22 17% 17 17 -% 

ICC 041105 68 61% 81% 81% +% 

Ndkor 181735 29% 28% 28% ft 

NMwfcGon 29 932 20% 19% 19% 
UMS 1251877 8% 8% 6|) +A 

tauDgan 7 B5 5% 4% 5% ft 

tagna 027 361867 35% 35 35 
N8bE8us 0X0 21 477 18% 17% 16% +% 
New Image 189 478 1ft 15 15% 
taadgrfW 2310900 32% 31% 31% +% 
ttwprtty OM 18 S3 u7% 6% 7% +% 

Malta OK 21 5083 7 0% 7 *\ 

(tadrea 056 27 75 60 58% 59% ft 

Nrkkra 040 28 4097 48% 44% 44% -1 

Narstanl 13 106 10 18% 18% ft 

HStrUn 4 53 5% ft ft 

ftatanTax 0X8 131147 36% 37% 3ft +% 

LW Mr 191887 18% W ift ft 

I NOtal 79413068 16 15% 15ft 

Ntaten 402685 45% 44 44% ft 

NPGA 21 8% ft B% +% 

NSC Cup 7 130 3% 2% 3A +A 


- O - 

OChansyc 21 30 13% 13% 13% ft 

OcU Core 191494 H% 22% 23% ft 

OWiaig 15 342 14% 14% 14% 

OgtatayNx 1X0 10 2 29% 2ft 29% -1 

OttaCB 146 G 478 31% 31 31% +% 

OtdKant 1.18 10 93 34% 34 34 

OUHaffi 092 16 158 37 3ft 3ft 

OnbancenixlXO 7 61 30 2ft 30+1% 

One Price 11 546 ift 14 14% ft 

Opted R 21 128 23% 22% 23>V +A 

OracbS 83 9737 43% 42% 43% +1% 

(kbScnca 48 777 18 17% 18 ft 

OrtXMCh 099 29 10 9% 9% 8% 

OoMSmi 7 IB? 10% ID 10% -% 

OragooUat 031 9 28 ft ft ft ft 

OHap 16 2 3% 3% 3% -% 

QatarSA 041375 288 15% 15 15 -% 

OSNotlT 0X0 ID 48 10% 10 10% -% 


1,72 14 146 3ft 32% 


-P-Q- 

Pacor 1X0 13 880 40)2 48 4ft ft 

PacOuakp 058 11 69 12% 12 12% ft 

Pram 1X2 15 33 23% 23 23 ft 

PKBQB 301540 74% 72 73% ft 
Panmaoc 31 2574 28% 25% 2ft +H 

Pqtin DH 41 236 33% S% 33 

PapcnAm 21 Of 9% ft 0% ft 

Pwrktt 050 58 479 014 12% 13% +% 

PenaTrty 9 21 15% 15% 15% 

rtOTteg 1X0 23 4 33 33 33 

tort* 072 18 9521(42% 41% «% ft 
Ftattcbt 13 273 5% 5% 5% 
PawwstL 020 28 23 25 24 25 ft 

RaaphbH 032 14 270 14 13% 14 

Prfmaia 1.12 16 13 30% 2ft 29% 
Pbanoapr 35 82 11% 11% 11% ft 
Rmanfldt 201142 5% ft 5% 
Pkctttx 048 4 2 B% 8% 0% ft 

netware 362227 18 17 17% 
Phaorfm- 42 311 18% 18% 16% ft 
nemarty 064 33 993 49% 48% 49% ft 
i FknuM oa 21 1413 31 30% 80% -% 
PtaasSi 012 91181 17% 18% 17 ft 

nmaFad srioo a% 8 8 

Powta is 2 ft 5% 5% 

PwUEt 0X9 3 509 7 6% 7 +% 

PmttaK 1803885 uM 48% 48% ft 
PtKcat 22MB6 15% 15% 13% ft 

FTtbfbt 41 360 5% 5% 5% ft 

Prtatranl 32 5B 19% 18 18% -% 

PWfOpa OH 23 889 26% 25% 28 ft 

Plata B 012 B 1168 16% 18% 18% ft 


H lb 

tack bt w id !■ idCtoa 

FtraraM 82104 8% ft 8% +U 

teaming 12 510 7% 7% 7% +A 
Oudarcnm 062 71 TO 17% 17% 17% ft 
QalRmlQ2ai7 1M23% 23 23 ft 

(tattm 7S153M 18% 1818% ft 

Orfcto* 23 813 18% Ift 18% ft 

CMC he 301148 44)1 44% 44% ft 


- R- 

RttCow 10 456 12% 11% 11% ft 

(blya 3 297 4% 4% 4% ft 

Rwtorep* 1 391 4 3% 4 

Rtanmnd 27 3H 20% 2D% 20% ft 

Haatan 14134 is% is ift 

Halite A 16 682 17 18% 17 +% 

Rrfbgdl 1 389 3 2% 2% ft 

top W*m 6 173 3% 3% 3% ft 

Ranched 19 145 11% 10% 11% ft 

flaoan D4e leans 48% 45% 46% +% 
taxon Inc 8 124 4% d4% 4% ft 
MM 080 10 447 35% 34% 30% ft 
ROOMS 1MJ1814W 81%d6B% 59% -% 
RtNgnt 01212 115 8 5% 0 

todSflk 058 4 734 18% 18% 18% -A 
taoMfW OH 3 2225 17% 18% 17 +% 

taaaSrx 020 132537 17 16 17 +f 

IW aadtafl 29 1241 23% 22% S% «% 
taw 089 591108 10% 18 IB, 1 . -A 
RPMW- 053 201058 18% 17% 16% ft 
RSFti 0X0 14 3 23% 23% 23% -% 

AyanFrty 12 557 6% 8% 8% 


Satan 1.98 6 607 54% 54% 54% 
sandman 030 w 28 i«% iak ib ft 
ScMmtyrt 030 20 103 27% 27% 27% 
SUMtal 103402 39% 38% 38% ft 
sasyatm ias» 20% 19% 20% +% 
Seas 9 2787 7% 7% 7% +% 

Sctaty 032 102482 22% 21% 21% +% 
SonM I 739 4% 4 4% ft 

Sarfted 120 44 B 37% 36% 38% 

S-gata 111298 24% 24% H% +% 

SBCp 018 27 48 22% 21% 21% ■% 

Mtat 038 8 804 ft 2% 3 ft 

Stem 11218 <5 27 26% 28% •% 

Saquerf 82 1460 17% 17% 17% -A 

MW 391674 5% 4% ft +A 

Sara Tacn 13 82 9% 9% 9% ft 

SanRarf 17 267 4% ft 

Smoot 022 17 45 18% 17% 18% +% 

Strttad OM 194861 26% 25% 26% ft 
SHLSydm 2 470 5% 5% 5% +A 

StomHOd 38 173 22 21% 22 

SUmfttP 7 411 8 7ft 7% ft 

Store On 17 740 23% 22 23% +1 

StoreTdC 3 80 3ft (0 3 

SkaN OS1B19H 34% 34% H% ft 
SVhDK 10 6C 7% 7% 7% 

8SOMC QU 82 IM 12ft 12% 12% 

SBcnVty 38 408 12% 12% 12% 

snpacn 040 13 331 11% 11 n ft 

SmWdd 39 IM 29 H% 28% •% 

Snaprfrfb 388852 14 13% 13}| ft 

SrflwaraP 1 232 4% 4% 4% ft 

Sema 0X8 17 2389 23% 21ft 23% +1 

Sorted 068 ID 880 20% 2D>] 20% -ft 

Spkgd A 020 84 2277 18% 19% 18% +% 

St JubMd 040 14 3597 36% 33% 34% -% 

St PaUBC 030 10 108 21 20% 20% 

Shyfif 1 333 2% 2 2% +A 

Starter 487599 31% 29% 30 

Stas* 060 183149 39% 38% 38% ft 

SUMCIQ t4 1138 20% 20% 20% 
SMflagk an 14 38 21% 20% 20% 
SMTsd 0X8 21 463 2D 19% 19% 
SUdyUBA 020 37 10H 11% 10% 10% -% 
State 141 88 19% 19% 19% ft 

StraMUa 1.10 14 524te3% 23 23ft -ft 
StradDy 151938 7% 7% 7% 
Stytar 028 292018 37 35% 37+1% 
SdHootO 21 54 14% 14 14% ft 
SuritonoB 0X0 18 8 Z3H 23% 23)2 +A 

SmmflBc 0X4 13 435 21% 21% 21% -ft 
SumrflTn 34 732 33 32% 32% 

SOT Sport 11 27 4% 4% 4% ft 
Sudflc 1S20OS2 28% 26% 28+lA 

SnfllTre 41 1136 40% 39% 40% ft 

SytxmidC 5413772 48% 48% 47 ft -ft 

Symantec 383333 13% 13% 13% ft 

Syntty 040 18 38 19% 18% 19% +% 

Synerooni 80 176 4ft 4 4 -A 

Sjnxpon 12000 5% 5 5% -ft 

Stott 65 89 15H 15% 15» ft 
syntefla 14 2K6 16 15% 15% ft 
SyatnSMt 012 131398 14% 13% 13% -% 
SyttenSco 27 238 17 ift ift -A 


34 732 33 32% 32% 

1 1 27 4% 4% 4% ft 
1S20O52 28% 26% 28 +1 A 

41 1138 40% 39% 40% ft 
5413772 48% 48% 47i -H 
383333 13% 13% 13% ft 
040 18 38 19% 1ft 19% +% 
80 176 4ft 4 4ft 
T 2000 5% 5 5% ft 

85 88 15H 1ft 15fl ft 
142KB 16 19% 15% ft 


39 1326 HB% 


- T - 

T-CedSc 6 311 3% 3% 3% +% 
TjwwPi OS 20 S21 33% 32% 33% ft 
TBCty 13 881 9% ft ft -% 

TCACabta 044 29 760 24% 24% 24% ft 
TochData 12 2492 18% 17X8 1ft 
Taaimaoti x 080 12 1B4 49% 47% 47% -% 
Tahrtsc 3 7 8 8 8 -% 

TdaoSyx 8 968 12% 11% 12 ft 

TrtQnA 17345T19 22% 21% 22% ft 

TWoM 71783 ft 5 5 

Talate 30 4078 42% 40% 42% +1% 

Tahoi ty 0X1 60 44 15 14% 14% 

Tana Toe 79 04 ft 9% ft 

TavaPKAM OIO 301950 29>< 2S% 29% ft 
Him Car 72D128 33% 32% 3ft +% 
TJW 022 28 831 19% 1ft 1ft ft 
Tates Mad 4 888 5% ft ft -% 

Tokyo Mr OH 35 88 Gft 5ft 99% 

Tore Bram H 330 1ft 11% 12% -% 

TQppaCO 020353 2908 ft ft 7ft +A 

TPIEnto 3 188 6% ft ft -% 

TranadU 10 3 11 11 11 -% 

Tranwkkx 1X0 11 5 39% 3ft 39% ft 

Meats 21 139 2% ft ft 

Tltabfa 60 4688(115% 14% 15% +% 
TmfcttSxl.10 11 16 21% 20% 21% 

lung lab 020 12 473 7% 7 7 -ft 

TytfdA Ottimne 2(>2 24% 24% ft 


LBWhff 084 168192 44% 43% 44% +% 
(ftdab 2 637 5% 6 8 -% 

IKHMto 1X0 14 37 17 1B% 17 +% 

US TB 2X0 12 41 52% 52% 52% -% 

UnBadSt 040 8 76 ft BA BA -A 

Udug 012 21 34 27% 2S% 27% +% 

Urthn 1X0 28 375 48^2 47% 47^ -A 

USBwEpx 1X0 10 2738 28% 2ft 2ft 

USStoW 25 IM 3% 03% 3il +ft 

LIST Cup 1.12 9 609 13 12% 12% 

UtatllM 15 1124 ft ft ft ft 
IH Tain 12 11 52 51% & +% 

Ufa 11 151 3% 3% ft 


tent 

030 35 14 16% 15% 15% 


YngtaM 

TW 634 27% 28% 27% 


Vartfona 

24 3144 21% 20% 21% 

+% 

Vtcnr 

37 558 25% 24% 24% 


ttaxpRB 

102314 17% 

18 18% 

ft 

!■ ■ 1- 

miMogte 

231017 18% 

18 16A 

-A 

VLSI Tact) 

2820549 12% 

12 12% 

+% 

VteoB 

017 3 119 19% 

19 19% 



- w- 

WarerEn OW 19 564 25% 24% 25 -% 
nannt e en 821798 ft 4% 5A +A 
WaaMkSS8072 71139 21% 21% 21% ft 
mtlfFOdSL OM 8 562 21% 21% 21% ft 

UdtahdA 0X2 9 B8 23ft 23 23 

MuraoNtjOH IB 183 25% H% 25% ft 

MMO iXJ 16 109 42% 41Ji 42% +1 

BUM 5 724 3% 3 3% ft 

Wan One 072 12 789 31% 31% 31 A >ft 

WOPub 10 978 13 12% 12% ft 

WdpStA 1 MS 13% 13% 13% +ft 

VMSarfA 10 208 3A 3% 3A +ft 

WBttt OK 25 314 50% 49% 50% +% 

VtoaSangm 871799 43% 42% 43 ft 
WakhteL 028 14 18 18% 15% 16% ft 
Wttngt 040 283191 21% 20% 20% ft 
WPP Qny 003 22 H5 3ft ft ft -ft 

•yman-SduMO 1 385 8% 8% 6% ft 


-X - Y-Z - 

Xfau 328180 50%' 49 4ft +1 

XmaCup 2 322 3% 2% 2% 
VWkw OM H12B7 20% 1ft 19% +ft 
York Rich 184 IE 4% ft ft 
Batata 1.12 10 38 40% 40 40% ft 




38 

WORLD STOCK MARKETS 


* FINANCIAL TIMES 


Wednesday September 14 1994^ 


AMERICA EUROPE * 

Inflation data US data provide support to late closing bourses 


give Dow 
renewed heart 


Wall Street 


US stocks moved higher yester- 
day morning after a tame read- 
ing on consumer price infla tion 
brought some encouragement 
to a depressed bond market, 
writes Frank M cGurty m New 
York. 

By l pm, the Dow Jones 
Industrial Average was up 
1&80 at 3.874.14. while the more 
broadly based Standard & 
Poor's 500 was 0.97 ahead at 
467.18. Advancing issues led 
declines on the Big Board by 
an ll-to- seven margin in mod- 
erate volume of 175m shares. 

In the secondary markets, 
the American SE composite 
was U30 better at 456.36, and 
the Nasdaq composite added 
3.91 at 763.92. 

A two-session bout of selling, 
triggered by Friday's news of 
an unexpected jump in pro- 
ducer prices, came to an end 
yesterday morning. Before the 
market opened yesterday, the 
labor department revealed a 0.3 
per cent increase in the August 
consumer price index, a figure 
that compared favourably with 
the consensus forecast. 

Amid the relief, investors 
largely ignored contradictory 
evidence in a regional manu- 
facturing survey. The Federal 
Reserve Bank of Atlanta said 
the prices-paid component of 
its monthly survey of business 
conditions showed a moderate 
upturn. 

In spite of that unfavourable 
news, analysts said the more 
henigu reading in the con- 
sumer sector would allow the 
Federal Reserve to wait until 
November before lifting 
short-term interest rates again. 
That scenario had seemed less 
credible in the aftermath of 
last week's report on producer 
prices. 

The improved outlook yester- 
day enabled bonds to post mod- 
erate gains during the early 
morning, giving additional sup- 
port to those stocks affected 
most by the impact of a rate 
increase on the economy. But 
the pessimism among bond 
traders proved to be firmly 
rooted. As Treasuries retraced 
their steps, the solid improve- 
ment in equities eroded some- 
what 

Among the Dow industrials, 
raw material suppliers - which 
also benefit from the accelerat- 
ing trend in producer prices - 
led the way. Alcoa was up $% 
at $83 V, and International 
Paper climbed *T.'« to $74%. 

Elsewhere in the robust 
paper and pulp sector. Georgia 
Pacific gained Sl'.i to *73 and 
Champion International added 
$1% to $36\. 

Bellwether IBM set the posi- 
tive tone among technology 
issues, moving $1 higher to 
S8S%. 

But it was semiconductor 
issues which showed the most 
sparkle over the morning after 
the release of the August book- 


Jobannesburg drifted lower in 
dull trade as the market 
waited for further direction 
amid concern about prospects 
for bullion and world equities. 
The overall index slipped 19 to 
5 .863 and industrials dropped 
39 to 6.S47. 

Dealers said traders were 
cautious about a weak indus- 
trial sector and fears of infla- 
tion. New figures showed that 
the producer price index rose 
sharply in July to its highest 
annual rate in two years, ber- 


Canada 


Toronto SE 300 
4,400 • 



3,900 1 1 1 1 ' 

May 1984 Sap 

Souc# FT Qraphfta 

Toronto was mixed with a 
firm bias at noon as the mar- 
ket failed to keep pace with 
rallying New York equities 
and the stronger Canadian dol- 
lar. The TSE-300 composite 
index moved up 8.48 to 
4,333.35 in heavy morning vol- 
ume of 29.3m shares. The dol- 
lar was sent to a seven-month 
high by the stronger than 
expected showing of the 
defeated Liberal party in the 
Quebec elections, indicating 
that popular support for sepa- 
ration was not overwhelming. 
Falls in precious metals damp- 
ened e 8 '" 15 in interest rate-sen- 
sitive conglomerates and 
financials services. 


to-bill ratio, a keenly watched 
indicator of the industry's 
future performance. A surpris- 
ingly strong reading sent 
Micron Technology $1% higher 
to *40% and Texas Instruments 
up *1% to *75%. 

The session propelled two 
relative unknowns into the 
NYSE’s most active list West- 
ern Company of North Ameri- 
can, an oil-services concern, 
jumped $4%, or nearly 38 per 
cent, to $16% after BJ Services 
announced its interest in 
acquiring the company. BJ 
said it was appealing directly 
to Western's shareholders alter 
the rejection of its unsolicited 
$450m offer, worth $18.50 a 
share. 

Meanwhile, EMC added $1 to 
$18% in unusually brisk trad- 
ing of 2J2m shares. The activity 
reflected a positive reaction by 
analysts to the company’s 
announcement that it was 
developing storage applications 
for “video on demand” ser- 
vices. 


Mexico 


Mexican equities were pro- 
pelled higher during early trad- 
ing by gains on Wall Street 
following the release there of 
CPI data. At midesssion the 
IPC index of the 37 most traded 
stocks was up 1331 or 0-5 per 
cent at 2,722.7. Turnover was 
1 65m pesos in volume of 116m 
shares. 

Telmex ADRs were up *Vi at 
$62% in New York, while in 
Mexico the L shares improved 
l.l per cent. Gains outpaced 
declines by 21 to 6. 


aiding a possible return to 
double-digit inflation by tbe 
end of the year, and exceeding 
market expectations. The all- 
commodities index rose 1.7 per 
cent for the month to show a 9 
per cent gain year-on-year, the 
highest since August 1992 
when the rate was 9.5 pm- cent 
The engineering conglomerate 
Barlows receded 50 cents to 
R31.75. 

Gold shares, meanwhile, 
managed to hold steady in 
spite of the softer metal price 


Markets took a waiting brief 
during the morning ahead of 
the release of the US CPI data, 
which encouraged their perfor- 
mance in the afternoon. 

FRANKFURT reacted to the 
US data with a modest gain in 
the post-bourse after falling 
back nearly I per cent during 
the session. However, brokers 
commented that investors 
remained nervous, illustrated 
by the low trading volume. 

The Dax index retreated 
1862 to 2,136.09. 

In the post-bourse, the Ibis 
indicated index moved to 
2,144.56. Turnover totalled 
DM5.4bn_ 

Aside from the economic 
news there was little else to 
stimulate activity. Bayerische 
Hypo Bank, which announced 
the price for its one-for-10 capi- 
tal increase at DM350, lost 
DM660 at DM40360. 

Bayer was down a further 
DM360 at DM36560 following 
news on Monday of its pur- 
chase of Sterling Drug’s North. 
American over-the-counter 
pharmaceuticals business. 

AMSTERDAM moved 


ASIA PACIFIC 


Tokyo 

Buying by public funds and 
investment trusts supported 
share prices, and the Nikkei 
225 average closed above the 
technically important 20,000 
level for the first time in four 
trading days, writes Emiko 
Terazono in Tokyo. 

The index was finally up 
128.83 at 20.046.11 after a low 
for the day of 19,826.37 in the 
morning session and a high of 
20.097.02 in the afternoon. 

Volume picked up to 339m 
shares Grom Monday's 192m, 
but most overseas investors 
and domestic institutions 
remained on the sidelines due 
to the lack of fresh incentives. 
However, corporate fund man- 
agers stepped up profit-taking 
to boost their earnings ahead 
of the September book closing, 
while buying by public funds 
and arbitrageurs countered the 
rise in stock sales. 

The Toplx index of all first 
section stocks put on 664 at 
1,592.51 and the Nikkei 300 
added 1.72 at 290.76, but 
declines led rises by 531 to 440, 
with 201 issues unchanged. In 
London the lSE/Nikkei 50 
index eased 0.19 to 1,300.56. 

In spite of the rise in share 
prices, traders said underlying 
investor confidence remained 
sluggish. 

Japan Telecom, regarded as 
the recent benchmark for mar- 
ket sentiment, declined Y70.000 
to a new low of Y46m- Tbe 
company has been a casualty 
of oversupply fears since its 
listing on tbe second section 
last week. 

DDL another telecommunica- 
tions stock on the second sec- 
tion, fell Y14.000 to Y884.000, 
while East Japan Railway, a 
Leading shareholder of Japan 
Telecom, lost Y3.000 at 
Y500.000. But Nippon Tele- 


steady 

in largely technical trade. 
Golds edged up 7 to 2^417 ami 
the bullion’s afternoon fix was 
down below the $390 an ounce 
level to *389.60. Mr Emin Eyi 
from Baring Securities 
described the small gain, how- 
ever, as “the start of an under- 
lying rise in gold shares". He 
cited a weakening commercial 
rand, helping exporters, and 
prospects of a rise in interest 
rates as reasons why tbe mar- 
ket should pick up. Dries 
added 75 cents at R6&50. 


slightly higher, the AEX index 
finishing at 412^8, a gain on 
the session of 068. 

Gist-Brocades, the consumer 
goods group, which had been 
downgraded to hold by James 
Capel on Monday, added 90 
cents at FI 45-10, in line with 
the market trend. Capel 
explained that after three 
years of strong profits growth 
- 23 per cent on average - the 
9.9 per cent first-half figures 
disappointed investors. Capel 
lowered its net profits growth 
forecast from 15 per cent to 10 
per cent annually which, due 
to stock option dividends, 
would translate as an armuai 
increase in earnings per share 
of 6.5 per cent 
PARIS was another market 
to turn from a weak morning 
to strength in the afternoon. 
The CAC-40 index finished 257 
up at 16® -36, having been off 
nearly L5 per cent during the 
early part of the day. Turnover 
was some FFr3bn_ 

Legrand. was one of the most 
popular stocks, gaining FFr240 
at FFr6,670 after forecasting a 
30 per cent rise in profits for 


graph and Telephone finished 
Y4.000 ahead at Y888.000 on 
buying by public funds after 
sliding to a low of Y879.000 dur- 
ing the day. 

Mitsui Trust and Banking 
advanced Y30 to Yl.080 on 
reports that it had started to 
clear its balance sheet Other 
trust banks were also higher, 
Mitsubishi Trust adding Y40 at 
Yi.430 and Sumitomo Trust 
Y5Q at Y1.380. 

Tsumura, a pharmaceutical 
company, retreated by its daily 
limit of Y200 to YL170 on sell- 
ing by individual investors. 
Reports of in-house squabbling 
among executives discouraged 
investors. 

In Osaka, the OSE average 
rose 22.47 to 2265069 in vol- 
ume of 109.6m shares. Rohm, 
the semiconductor device 
maker, gained Y60 at Y4620 for 
the second consecutive day. 

Roundup 


Trading in some of tbe Pacific 
Rim markets was restrained 
ahead of yesterday’s key US 
inflation data. 

SEOUL turned hack from an 
intraday high for the year as 
active selling of an estimated 
Won40hn of shares by a state- 
run fund wiped out most of the 
early gains. The composite 
index ended 062 easier on bal- 
ance at 99568, after touching a 
year’s peak of 1.0066L 

Brokers said the government 
wanted tbe index to remain 
below the 1,000 mark ahead erf 
the Cbusok full-moon holidays 
next week amid worries that a 
sharp rise in stock prices could 
provoke discontent among 
fanners, who have criticised 
government policies favouring 
dty dwellers. 

Primary blue chips remained 
strong in spite of selling by 
the stock stabilisation fund. 
Volume totalled 41. im shares. 


Sonffi Africa 

Johannesburg SE Imfices {retained} 



i too* Sep 

Source: FT GfcapMte 


S Africa drifts lower, golds 


Nikkei regains 20 


compiled by nw Financial Times LW.. Goldman. Sachs & Ca and NatWest Securities Lid. In conjunction with the Institute of Actuates aid the Faculty at Actuaries 

NATIONAL AND 


























I 








Figures n paiufithcejyj 

US 

Day's 

Pound 



Local 

Local 

Grass 

US 

Pound 






KA — ■ 

show number o( 

OoBat 

Change 

Sailing 

Yen 

DM 

Cwency 

% cho 

Dw. 

Dofar 

Storfino 

Yen 

DM Currency 52 week 52 week, 


c4 stock 

Index 

K 

Index 

Index 

Index 

Index 

an day 

Yield 

Index 

Index 

Index 

tedax 

Index 

High 

LOW 


Ausunflaf68) 

t*L20 

-1.7 

16139 

107.75 

138.19 

16338 

-1.6 

337 

175.11 

167.40 

109.80 

14038 

15835 

189.15 

13824 

141.00 

Austria (IT) 

— 198.11 

-1.4 

186.08 

122.71 

15737 

15734 

-13 

1.02 

198.89 

190.14 

12430 

159.44 

15839 

19839 

16434 




174 54 

-0.6 

16&61 

10931 

140.06 

136.73 

-0.5 

4.04 

17530 

187.77 

110.12 

14038 

137^18 

177.04 

143.62 

15238 

Conidn tint) 

...135 41 

0.3 

128.48 

84.72 

106.88 

133.8? 

0.0 

Mi 

135.03 

128.11 

84.74 

10828 

13331 

14531 

12034 


Oemvirk (Ml ... 

.. TSJ85 

-7.1 

239.82 

15831 

20X90 

209.53 

-1.1 

1.42 

255^3 

24438 

1S353 

20433 

21132 

276.79 

223.94 


Finland IJ4I 

.. .1SO.S0 

-0.6 

17132 

11237 

144JJ9 

ieai 2 

-1.4 

074 

181.70 

17070 

11431 

14535 

19073 

181.70 

10438 


Franco 

17J43 

00 

164.56 

10851 

139.16 

143.79 

03 

3.06 

172-43 

164.83 

108.19 

13022 

14230 

18537 

15034 


Germany 1591. . 

. 148.13 

-1.6 

140.56 

32-69 

11B.87 

11X87 

-1.4 

1.73 

150.40 

143.78 

9M7 

12037 

12057 

15030 

12439 


Hong twng |56) 

-40S .72 

-2.6 

384 JS 7 

253.86 

32538 

402.48 

-2-6 

304 

41043 

38009 

26139 

333.81 

413.12 

606.66 

203.00 


fcdanaiW*. 

. ..212.13 

-0.3 

2Q13S 

132.73 

17033 

194.25 

-0.6 

337 

212-62 

203.45 

13334 

170.80 

195.81 

216.60 

18134 


iufv»59l - , 

79.0? 

-0.4 

7532 

48.47 

63.45 

82.71 

-05 

1.67 

79.36 

7537 

4930 

6332 

83.17 

97.7B 

5738 


Japan W69i ..... 

... .15993 

03 

151.60 

100.10 

12838 

100.10 

0.0 

076 

15931 

152.49 

10009 

12737 

100.09 

17010 

124.54 

15007 

Malaysia 

-....576.72 

-03 

54733 

360&5 

482,80 

56835 

-1.1 

1.46 

582.14 

55051 

36028 

468.66 

573.17 

62133 



Uauco it 01 . . . .. 

_. 2J9J.14 

-0.2 

2175.65 

1434.81 

1840.12 

8534.51 

-02 

130 

223002 

219084 

1441.93 

1842.12 

8551.43 

2847.08 

1615.11 

175632 

Nctnwtmd CD.. 

... .218 10 

-0.4 

205.05 

13533 

173.42 

170.73 

-03 

336 

217.03 

207.48 

136.18 

17338 

17137 

21019 



Now Zo^and lU).... _ 

..73.44 

-2.5 

69 68 

45.95 

58.BS 

64.87 

-23 

3.70 

75.35 

72.03 

47.26 

60.40 

8631 

7738 

5932 


Norway t 23| ... „ 

. . aw 97 

0.1 

1B4 4B 

12835 

184.48 

188.64 

0.0 

1.75 

204.07 

195.85 

128-55 

16423 

18062 

211.74 

16532 


Seigaporo i44l 

361.70 

-03 

34331 

22632 

29035 

248.56 

-0.8 

1.70 

362.40 

346.45 

227.40 

29051 

26005 

37832 

285.31 


South Afcica (591 - 

. ...30833 

me 

292^6 

192.92 

247.42 

302.05 

-13 

2.12 

31015 

29049 

19431 

24832 

305.73 

314.24 

176.89 


Span t J31 . 

• 139.52 

-u 

132.38 

8739 

111.35 

13530 

-1.4 

435 

14139 

135.17 

80.72 

11334 

137.48 

155.79 

12838 


Swodon PB> - - - 

287.99 

1.5 

216.33 

142.88 

182.96 

252.87 

0.8 

138 

224.70 

214.01 

14090 

160.12 

251.46 

23135 

17533 


SWiScrtand |47l ... 

—..167.87 

0.1 

15934 

105.00 

13437 

133.64 

0.0 

1.82 

16730 

16032 

105.16 

13435 

133.04 

17056 

135.70 


United Kingdom (TIM)..., . 

— 199.70 

04 

189.48 

124.95 

16035 

189.48 

-0.4 

339 

19096 

19023 

124.B8 

15832 

19023 

21436 

181.11 


USA (51 il 

—190.18 

-0.4 

180.45 

11839 

152.61 

190.19 

-04 

2.85 

19098 

182.57 

11933 

15339 

19036 

19834 

17835 

18834 

EUROPE (7181 

173 76 

-O.l 

164 88 

108.72 

139^4 

15409 

-0.4 

3.01 

17093 

16027 

109.13 

138.42 

154.71 

178.58 

153.98 


Non£c (1 16)..... . , 

... 2213? 

0.4 

209.99 

138.47 

17739 

21037 

-03 

1M1 

22034 

21084 

13835 

178.63 

21037 

222.03 

173.19 


Pacific Run iTA& 

._ . 17015 

0.0 

151.45 

106.48 

13834 

11131 

-03 

1.08 

17022 

182.73 

10631 

136.45 

11133 

17838 

134.79 


&in>- Patfc 

, ....171.66 

-0.1 

162.78 

10734 

137.66 

128.30 

-03 

131 

171.88 

164.10 

107.71 

137.60 

128.74 

imi4 

14338 


Norm Anwrtco {621J ......... 

....188.78 

-0.4 

17732 

11636 

14038 

18639 

-0.4 

233 

187.51 

17935 

11735 

150.31 

187.04 

192.73 

175.67 


fcc UK tSU) 

155.98 

-0.4 

14 a oo 

9739 

125.16 

133.18 

-04 

2.43 

15054 

149.65 

9022 

125.48 

133.73 

15012 

13437 


Pacific £«. Japan CT9j . - 

.....jwair 

-1.7 

254.41 

167.77 

215.18 

238.16 

-13 

2.72 

27234 

28033 

17120 

21072 

242.47 

29021 

20013 


WOtld Ex US 0047? 

- .17330 

-0.1 

164.44 

10&44 

13937 

132.10 

-03 

132 

17042 

165.78 

10832 

13002 

13234 

17835 

14050 

18006 


.... 175.75 

-02 

166.76 

109.97 

141.03 

14633 

-0.4 

008 

176.19 

16043 

11035 

14134 

146.77 

178.69 

15096 


IVortd Ex. SO. Al. G10S1 177.04 

-03 

167.99 

11077 

142.07 

149.02 

-0.4 

234 

17737 

10936 

11129 

142.18 

149.55 

18003 

15834 


wand Ex. Japan P695) ... 

— 189.37 

-0.4 

179.60 

118.49 

15138 

179.68 

-05 

236 

19012 

181.75 

11929 

152.40 

18033 

19020 

174.04 

17830 

Tttt World index pi6A}._. 

._ 177.87 

-03 

108.77 

11139 

143.73 

150.14 

-04 

2.24 

17831 

17038 

111.82 

14235 

15069 

18000 

15835 

168.58 


c <wng« flte Fratao! Unw LmnoA QcMrmo. SkJw M Co. And NWWnt SocuttM UiWM. 1887 
taKW pnan. ufuvMUOM lor*H «xEwrt. 


FT-SE - Actuaries Snare "indices 


Sap THE EUROPEAN SERIES 

Hnurty clgnqM Open I BOO 11 JO 1200 13J0 1400 15.00 flow 

FT-SE 6notW* 100 136171 136272 135643 135&2T 1358.78 139947 136628 1367.41 

FT-SE Enron** 200 140824 140677 140439 1406.13 2408.76 140536 1413.73 141&44 

Sep 12 Sep fl Sep 8 Sap 7 Sep 6 


FT-SE EoutraX 100 
FT-SE Emu* 2D0 


1368TB 1371X03 138001 1371.13 13714)3 

141&17 141630 1431.14 142833 142757 


am inDeEnamHgMw vtn-osjiUOT- loo- issawaoo- 


the full year. 

MILAN picked up late in tbe 
day, helped by the US data and 
the outcome of talks between 
Mr Silvio Berlusconi and union 
representatives on reform of 
the pension system. 

The Comit index was flat, 
finishing o.&l lower at 648.19, 
while the real time Mibtel 
index picked up from a day’s 
low of 10,312 to finish 28 ahead 
at 10.429. 

Olivetti reversed recent falls 
with a L36, or US per cent, 
advance to Lh986 and Credito 
Italian© picked up L95, or 4.6 
per cent, to L2.140, although 
dealers said there was no news 
to explain the rise. 

Ferruzzi fell L50, or 3.1 per 


rynt, to LL665 in the wake of 
moves by the Ferruzzi family 
to contest decisions made at 
the August 1993 shareholders' 
meeting on the accounts, and 
speculation about a capital 
increase. 

In the telecommunications 
sector, Telecom Italia rose 1/40 
to 14330. but the holding com- 
pany Stet eased L15 to 14,625 
after Mr Michele Tedeschi, 
c hair man of state industrial 
holding company QU, said that 
a first tranche of the state- 
owned telecommunications 
sector should be sold by tbe 
e nd of the year. 

ZURICH rebounded after 
early weakness, the SMI index 
picking up from a low of 2,624^ 


to finish 15.8 higher at 2.B5&9. 
with the strengthening dollar 
providing additional support. 

Banks led the market higher. 
CS Holding rose SFrl2 to 
SFr567, still benefiting from its 
decision to withdraw lts offer 
for Austria's Creditanstalt- 
Bankverem. UBS bearers rose 
SFrlS to SFrl,220, and among 
the insurers, Zurich added. 
SFrlB at SFrl.279. 

Nestle rose SFrl9 to SFrl.236 
ahead of tomorrow’s results: 
analysts are expecting a mod- 
est increase in first-half profits 
but forecast that second-half 
earnings should surge due to 
the capital gain from selling its 
L’Oreal distributorships to 
L'Oreal. 

The pharmaceuticals sector 
was mixed, Roche certificates 
rising SFr40 to SFr6^25 but 
Sando z losi ng SFr6 at SF770O. 

STOCKHOLM was supported 
by a st ro nger crown, a more 
stable debt market and the US 
CPI figures. The AfiSrsvftrlden 
index put on 3JS at 1,454.2. 

The banking and insurance 
sector climbed almost 3 per 
emit S-E-Banken’s “A" shares 


advanced SKrl.70 to SKt 4&2Q, 
white Handebbankea "A" rose 
SKr2 to SKrlOl. 

NCC “B" was up SKrtfiO at 
SKrd3 after- the construction 
group said it had sold its entire 
stake of 25.7m shares in the 
British-Swedish stainless steel- 
maker Avesta Sheffield to 
' BZW, giving it a capital gain of 

about SKrl_2bn. 

MADRID reacted wildly first 
to higher than expected infla- 
tion figures in Spain which 
triggered early losses, and then 
to the US’s CPI data which 
caused a rebound. 

At the end of the day; the 
general index was ahead 3JQ, 
or 1 per cart, at 301.82 on a 
turnover of PtaSl.lBbn. Dealers 
said stocks with ADRs per- 
formed well in the afternoon 
session and there was also 
strong buying in the hanks, ' 

Among the banks, Sant a nde r 
added Pta60 at PtaS.180 and 
Argentaria put on Pta240 at 

Pta5,450. 


Written and etfitod by John 
Pitt, Mcftaal Morgan and Jamas 
Whittington 


,000 level for first 


compared with Monday’s 
36.2m. 

HONG KONG picked itself 
up after the previous day’s 
steep fell but the mood was 
cautious ahead of yesterday’s 
US inflation data on worries 
that higher short-term US 
interest rates would feed 
through to local rates. 

The Hang Seng index ended 
46.64 higher at 9,937.01, pushed 
up largely by selected blue 
chips. In turnover that shrank 
to HK$3.7bn from. Monday’s 
HK$5.i9bn. 

H shares, which were sold off 
sharply on Monday, bounced 
back on Japanese buying. The 
H-share index of China-incor- 
porated issues rose 40.47. or 28 
per cent, to 1,47189. 

Tianjin Bohai was the most 
active H share, up 12 cents at 
HKS180, followed by Yizheng 
Chemical Fibre, 19 cents ahead 
at HKS3.13. 

BOMBAY edged back from 
Monday's record peak, the BSE 
30 index giving up 29.15 at 
4,599-42 after testing a new 
high during the day erf 482883. 


Among the day’s gains. Ray- 
mond Woollen Mills rose 
Rs37.50 to Rs400 on expecta- 
tions of better half-yearly 
results. 

SINGAPORE saw a technical 
rebound as Malaysian specula- 
tive shares traded over the 
counter ignored Wall Street's 
weak overnight performance. 

The Straits Times Industrial 
index closed 19.27 higher at 
2899-66 after a day's peak of 
281080. 

KUALA LUMPUR traded in a 
tight range, the composite 
index finishing just 086 firmer 
at 1469.11 in volume of 40im 
shares. 

Sateras Resources moved for 
ward 20 cents to MS3.40 on 
rumours that a politically 
linked group was buying a 
stake in the company. 

BANGKOK saw a rally in 
blue chips during the after- 
noon which brokers stud was a 
technical rebound. The SET 
index added 1782, or 1.16 per 
cent, at 1,507.73 in Bt7.1bn 
turnover. 

Siam City Bank topped the 



■ 0 

e in four days 


actives list and moved ahead 
Btl to Bt31. 

TAIPEI retreated as inves- 
tors were seen moving out of 
industrial stocks, particularity 
in the plastics and petrochemi- 
cals sectors. The weighted 
index shed 12.46 to 6855.02 in 
thin turnover of T$56JB7bn. 

Tung Ho Steel saw heavy 
profit-taking, ending 7 per emit 
down at T$4280 in spite of 
announcing a successful issue 
of global depositary receipts. 

Elsewhere, Hwa Nan. Bank 
rose T$4 to TS215. First Com- 
mercial advanced T$3 to T*182 
and Chang Hwa Bank gained 
T$1 at TJ193 in late trade. 

MANILA recovered from 
Monday's fell on late buying 
and the composite index fin- 
ished 33.9 higher at 2,95384. 
Turnover came to 28bn pesos 
in volume of 38bn shares. 

Oil refiner Petron was the 
day’s most active stock, 
although it dosed unchanged 
at 2380 pesos. 

PLDT again led the 
advances, rising 28 per cent to 
1880 pesos, addle Meralco “A” 


moved ahead 280 pesos to 285 
pesos and the “B" stock 
climbed L4 per cent to 36780 
pesos. 

SYDNEY was helped higher 
by Commonwealth Bank 
announcing an increase in 
profits. The All Ordinaries 
index closed 10.7 ahead at 
28438 after touching 2,051.7. 

Commonwealth Bank ended 
a net 19 cents lip at Af7.86 
after jumping 4 per cent within 
minutes of the . profits 
announcement. Other banks 
mostly rose in sympathy: ANZ 
appreciated S cents to A$S8S in 
turnover of 5.74m shares and 
Westpac 4 cents to A$485 but 
NAB slipped 6 cents to A*10. 

Coles Myer, the retailer, 
improved 9 cents to A*4.03 an 
the back of strong earning^ 

WELLINGTON was 
depressed by a fell in forest 
sector stocks, although -Tde- 
com was a steadying influence. 

-The NZSE-40 capital index 
shed 1728 to 2,093.80 after a 22 
per cent decline on Monday. 
Fletcher Challenge dropped 11 
cents to NZ$4.14. 


Risky 


to ignore. 


Not so long ago, most fund managers thought futures 
and options were risky. Today ignoring them is the 
risk. The new DTI regulations have put derivatives in 
the spotlight for UK insurers. LIFFEls FT-SE Index 
futures and equity options enable insurance fund 
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for the sound and prudent use of derivatives. 


LIFFE is commited to helping the 
insurance industry make the most of 
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sponsored by the ABI. 

For information on these workshops 
and a free copy of our new 
information sheet "New Regulations 
for UK Insurance Companies” call 
Sandy Phillips on 071 3792439. 





London International Financial 
Futures and Options Exchange